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: | 811-03981 | |
Exact name of registrant as specified in charter: | Prudential World Fund, Inc. | |
Address of principal executive offices: | 655 Broad Street, 6th Floor | |
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Andrew R. French | |
655 Broad Street, 6th Floor | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 10/31/2023 | |
Date of reporting period: | 10/31/2023 |
Item 1 – Reports to Stockholders
PGIM QUANT SOLUTIONS INTERNATIONAL EQUITY FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. PGIM Quantitative Solutions LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), is a registered investment adviser. © 2023 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM Quant Solutions International Equity Fund informative and
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global | ||
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Quant Solutions International Equity Fund
December 15, 2023
PGIM Quant Solutions International Equity Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||
Class A | ||||||||
(with sales charges) | 7.65 | 1.27 | 1.06 | — | ||||
(without sales charges) | 13.91 | 2.42 | 1.63 | — | ||||
Class C | ||||||||
(with sales charges) | 11.11 | 1.20 | 0.66 | — | ||||
(without sales charges) | 12.11 | 1.20 | 0.66 | — | ||||
Class Z | ||||||||
(without sales charges) | 14.49 | 2.89 | 2.02 | — | ||||
Class R6 | ||||||||
(without sales charges) | 14.97 | 3.18 | N/A | 4.29 (12/28/2016) | ||||
MSCI All Country World ex-US Index | ||||||||
12.07 | 3.46 | 2.54 | — |
Average Annual Total Returns as of 10/31/23 Since Inception (%) | ||
Class R6
| ||
MSCI All Country World ex-US Index | 4.40 |
Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes are measured from the closest month-end to the class’s inception date.
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the MSCI All Country World ex-US Index by portraying the initial account values at the beginning of the 10-year period for Class Z shares (October 31, 2013) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Quant Solutions International Equity Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R6 | |||||
Maximum initial sales charge | 5.50% of the public offering price
| None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase
| 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% | 1.00% | None | None |
Benchmark Definitions
MSCI All Country World ex-US Index—The Morgan Stanley Capital International All Country World ex-US Index (MSCI ACWI ex-US Index) is an unmanaged, free float-adjusted, market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world, with the exception of US-based companies. The Index includes both developed and emerging markets.
Investors cannot invest directly in an index. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Presentation of Fund Holdings as of 10/31/23
Ten Largest Holdings | Line of Business | Country | % of Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | Taiwan | 2.1% | |||
Novo Nordisk A/S (Class B Stock) | Pharmaceuticals | Denmark | 1.9% | |||
iShares MSCI EAFE ETF | Unaffiliated Exchange-Traded Funds | United States | 1.5% | |||
Shell plc | Oil, Gas & Consumable Fuels | Netherlands | 1.3% | |||
Roche Holding AG | Pharmaceuticals | United States | 1.3% | |||
Novartis AG | Pharmaceuticals | Switzerland | 1.1% | |||
BP plc | Oil, Gas & Consumable Fuels | United Kingdom | 1.1% | |||
Hermes International SCA | Textiles, Apparel & Luxury Goods | France | 0.9% | |||
GSK plc | Pharmaceuticals | United States | 0.9% | |||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | Insurance | Germany | 0.80% |
Holdings reflect only long-term investments and are subject to change.
PGIM Quant Solutions International Equity Fund 7
Strategy and Performance Overview*
(unaudited)
How did the Fund perform?
The PGIM Quant Solutions International Equity Fund’s Class Z shares returned 14.49% in the 12-month reporting period that ended October 31, 2023, outperforming the 12.07% return of the MSCI All Country World ex-US Index (the Index).
What were the market conditions?
· | Investors remained cautious despite generally decreasing inflationary pressures and moderating fears of a global economic recession. Persistent geopolitical pressures, particularly the Russia-Ukraine war and its corollaries—softening Chinese economic data and the potential paradigm shift as Russia and China forge economic alliances—did little to quell investor concerns. |
· | PGIM Quantitative Solutions’ model performed relatively well throughout this period of heightened volatility. For the reporting period, value was the predominant driver of outperformance. |
What worked?
· | During the reporting period, stock selection and an overweight in industrials in Japan, along stock selection and an overweight in Taiwanese information technology names, were beneficial to results relative to the Index. |
· | A tilt toward reasonably priced companies across the industrial, financial, and energy sectors and away from expensive financial and industrial names contributed to relative returns. |
What didn’t work?
· | A shift toward materials in Norway and Australia, along with a shift away from consumer discretionary names in Japan and Germany, slightly detracted from relative results. |
· | Favoring high-quality materials and shifting away from low-quality financial and consumer discretionary names, along with favoring inexpensive consumer staples and consumer discretionary names, had slightly negative impacts. |
Did the Fund use derivatives?
· | The Fund held fully collateralized index futures during the reporting period that were used for cash-management purposes. They had a negligible impact on performance. |
Current outlook
· | Global economic activity remained resilient through the third quarter of 2023, despite considerable monetary tightening by global central banks over the past 18 months that prompted speculation earlier this year that a US recession was imminent. |
· | Global equity markets delivered mixed performance for much of the third quarter, with US stocks pulling back modestly despite better-than-expected corporate quarterly results. |
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· | While sector composition often explains much of the difference in valuation between the US and the rest of the world, US stocks appear relatively expensive, even after accounting for composition effects. |
· | Strong labor demand in the US has provided a buffer to household incomes and supported private consumption, while fiscal stimulus continues to boost the economy. The most likely economic scenario is one of modest US growth in late 2023 and into 2024, with a lower risk of recession in the near term. |
· | Europe’s post-pandemic recovery has already faded, with second-quarter GDP growth just barely positive in the Eurozone, UK, and Switzerland. The risks of a European recession are significant. Available hard data for the third quarter of 2023 are mixed, while soft data appear bleak. |
· | In contrast to Europe and China, Japan is a relative bright spot, helped by a more supportive central bank. The Japanese economy remains underpinned by solid consumption and business spending. |
· | Growth is likely to remain weak in China, barring significant measures by the government to jump start the economy. Consumption spending and industrial activity remain anemic, while the real estate sector continues to struggle. |
· | Central banks are making progress in their fight against inflation. US headline inflation remains driven by geopolitics and supply cuts implemented by the OPEC+ group of petroleum producing nations, but core inflation has declined from its peak. Eurozone core inflation has moderated slightly from recent highs. |
· | Although their hiking cycles appear to be ending, the US Federal Reserve and European Central Bank are likely to keep monetary policy tight until they have more confidence that they can reach their inflation goals. |
· | The Bank of Japan has kept interest rates low, while other central banks have raised rates, and is just beginning to allow more flexibility in its yield-curve control program. |
· | While the People’s Bank of China has continued to cut interest rates marginally in the third quarter, it is still holding back from a “bazooka” stimulus to restart the economy. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
PGIM Quant Solutions International Equity Fund 9
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
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provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Quant Solutions International Equity Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense Ratio Based on Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||
Class A | Actual | $1,000.00 | $ 963.50 | 1.56% | $ 7.70 | |||||||
Hypothetical | $1,000.00 | $1,017.37 | 1.56% | $ 7.91 | ||||||||
Class C | Actual | $1,000.00 | $ 958.00 | 2.95% | $14.53 | |||||||
Hypothetical | $1,000.00 | $1,010.36 | 2.95% | $14.92 | ||||||||
Class Z | Actual | $1,000.00 | $ 966.80 | 1.00% | $ 4.93 | |||||||
Hypothetical | $1,000.00 | $1,020.19 | 1.00% | $ 5.07 | ||||||||
Class R6 | Actual | $1,000.00 | $ 968.40 | 0.79% | $ 3.89 | |||||||
Hypothetical | $1,000.00 | $1,021.25 | 0.79% | $ 4.00 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
PGIM Quant Solutions International Equity Fund 11
as of October 31, 2023
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 97.3% | ||||||||
COMMON STOCKS 93.6% | ||||||||
Australia 5.2% | ||||||||
BHP Group Ltd. | 7,886 | $ | 223,233 | |||||
BlueScope Steel Ltd. | 43,006 | 515,533 | ||||||
Brambles Ltd. | 10,712 | 89,400 | ||||||
Fortescue Metals Group Ltd. | 77,216 | 1,098,461 | ||||||
Glencore PLC | 239,020 | 1,266,048 | ||||||
Goodman Group, REIT | 86,714 | 1,147,392 | ||||||
Helia Group Ltd. | 408,988 | 940,569 | ||||||
Iluka Resources Ltd. | 28,000 | 129,297 | ||||||
JB Hi-Fi Ltd. | 21,326 | 613,015 | ||||||
Medibank Private Ltd. | 416,856 | 909,696 | ||||||
Pilbara Minerals Ltd. | 22,180 | 52,101 | ||||||
QBE Insurance Group Ltd. | 11,160 | 110,664 | ||||||
Rio Tinto Ltd. | 3,134 | 234,104 | ||||||
Rio Tinto PLC | 10,679 | 681,326 | ||||||
Stockland, REIT | 17,388 | 39,243 | ||||||
Suncorp Group Ltd. | 34,715 | 295,482 | ||||||
Telstra Group Ltd. | 126,540 | 306,844 | ||||||
West African Resources Ltd.* | 297,147 | 138,066 | ||||||
Woolworths Group Ltd. | 12,165 | 272,311 | ||||||
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| |||||||
9,062,785 | ||||||||
Austria 0.0% | ||||||||
Erste Group Bank AG | 1,000 | 35,809 | ||||||
Belgium 0.3% | ||||||||
Solvay SA | 3,475 | 367,362 | ||||||
Tessenderlo Group SA | 3,385 | 98,545 | ||||||
|
| |||||||
465,907 | ||||||||
Brazil 1.8% | ||||||||
B3 SA - Brasil Bolsa Balcao | 43,200 | 95,538 | ||||||
Banco do Brasil SA | 127,800 | 1,226,099 | ||||||
Centrais Eletricas Brasileiras SA | 9,200 | 63,319 | ||||||
Cia de Saneamento do Parana, UTS | 15,700 | 67,543 | ||||||
CPFL Energia SA | 31,500 | 209,365 | ||||||
Odontoprev SA | 15,000 | 31,209 | ||||||
Petroleo Brasileiro SA | 27,900 | 209,177 | ||||||
Telefonica Brasil SA | 97,600 | 874,224 | ||||||
Vale SA | 26,600 | 364,199 | ||||||
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3,140,673 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Canada 5.7% | ||||||||
Agnico Eagle Mines Ltd. | 3,700 | $ | 173,534 | |||||
Alimentation Couche-Tard, Inc. | 11,600 | 631,465 | ||||||
ARC Resources Ltd. | 3,000 | 48,264 | ||||||
Celestica, Inc.* | 21,000 | 490,189 | ||||||
Choice Properties Real Estate Investment Trust | 9,000 | 78,140 | ||||||
Dollarama, Inc. | 14,100 | 962,877 | ||||||
Element Fleet Management Corp. | 69,500 | 940,198 | ||||||
Fairfax Financial Holdings Ltd. | 1,600 | 1,331,493 | ||||||
Finning International, Inc. | 2,800 | 75,030 | ||||||
George Weston Ltd. | 6,800 | 737,592 | ||||||
Great-West Lifeco, Inc. | 1,700 | 47,099 | ||||||
Imperial Oil Ltd. | 1,600 | 91,183 | ||||||
Loblaw Cos. Ltd. | 9,800 | 801,526 | ||||||
Magna International, Inc. | 2,200 | 105,721 | ||||||
Manulife Financial Corp. | 62,900 | 1,094,938 | ||||||
Metro, Inc. | 1,500 | 76,193 | ||||||
Open Text Corp. | 2,300 | 76,791 | ||||||
Parex Resources, Inc. | 31,500 | 603,764 | ||||||
Parkland Corp. | 2,000 | 60,530 | ||||||
Russel Metals, Inc. | 6,100 | 151,978 | ||||||
Sun Life Financial, Inc. | 24,900 | 1,137,311 | ||||||
Whitecap Resources, Inc. | 7,500 | 57,923 | ||||||
|
| |||||||
9,773,739 | ||||||||
Chile 0.1% | ||||||||
Enel Chile SA | 1,404,400 | 83,124 | ||||||
China 9.8% | ||||||||
3SBio, Inc., 144A* | 38,500 | 34,251 | ||||||
Alibaba Group Holding Ltd.* | 43,300 | 445,777 | ||||||
ANTA Sports Products Ltd. | 54,600 | 617,498 | ||||||
Baidu, Inc. (Class A Stock)* | 32,700 | 429,312 | ||||||
Bank of Beijing Co. Ltd. (Class A Stock) | 147,500 | 91,662 | ||||||
Bank of Communications Co. Ltd. (Class H Stock) | 854,000 | 505,146 | ||||||
Bank of Jiangsu Co. Ltd. (Class A Stock) | 265,700 | 249,831 | ||||||
Bank of Shanghai Co. Ltd. (Class A Stock) | 315,700 | 261,102 | ||||||
Beijing Enterprises Holdings Ltd. | 30,000 | 99,956 | ||||||
BYD Co. Ltd. (Class H Stock) | 34,500 | 1,049,149 | ||||||
China BlueChemical Ltd. (Class H Stock) | 1,596,000 | 373,495 | ||||||
China CITIC Bank Corp. Ltd. (Class H Stock) | 1,326,000 | 591,539 | ||||||
China Construction Bank Corp. (Class H Stock) | 2,450,000 | 1,385,617 | ||||||
China Medical System Holdings Ltd. | 386,000 | 617,252 | ||||||
China Minsheng Banking Corp. Ltd. (Class H Stock) | 260,000 | 86,440 |
See Notes to Financial Statements.
14
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
China (cont’d.) | ||||||||
China Tower Corp. Ltd. (Class H Stock), 144A | 2,296,000 | $ | 214,104 | |||||
Chlitina Holding Ltd. | 48,000 | 289,066 | ||||||
Chongqing Rural Commercial Bank Co. Ltd. (Class A Stock) | 360,000 | 208,445 | ||||||
Foxconn Industrial Internet Co. Ltd. (Class A Stock) | 44,800 | 89,966 | ||||||
Gree Electric Appliances, Inc. of Zhuhai (Class A Stock) | 6,600 | 30,510 | ||||||
Hello Group, Inc., ADR | 82,400 | 583,392 | ||||||
Industrial Bank Co. Ltd. (Class A Stock) | 119,500 | 245,582 | ||||||
KE Holdings, Inc., ADR | 23,900 | 351,569 | ||||||
Meituan (Class B Stock), 144A* | 47,800 | 677,566 | ||||||
NetEase, Inc. | 67,600 | 1,446,745 | ||||||
PDD Holdings, Inc., ADR* | 14,000 | 1,419,880 | ||||||
PetroChina Co. Ltd. (Class H Stock) | 1,512,000 | 986,906 | ||||||
Shanghai Rural Commercial Bank Co. Ltd. (Class A Stock) | 315,200 | 255,933 | ||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd. (Class A Stock) | 73,300 | 190,059 | ||||||
Sinopharm Group Co. Ltd. (Class H Stock) | 86,000 | 205,650 | ||||||
Tencent Holdings Ltd. | 30,700 | 1,136,169 | ||||||
Tianqi Lithium Corp. (Class A Stock) | 22,300 | 167,230 | ||||||
Vipshop Holdings Ltd., ADR* | 2,400 | 34,224 | ||||||
Wilmar International Ltd. | 329,800 | 857,409 | ||||||
Xiaomi Corp. (Class B Stock), 144A* | 302,800 | 542,928 | ||||||
Yum China Holdings, Inc. | 2,700 | 141,912 | ||||||
Yutong Bus Co. Ltd. (Class A Stock) | 50,000 | 92,911 | ||||||
|
| |||||||
17,006,183 | ||||||||
Denmark 2.3% | ||||||||
AP Moller - Maersk A/S (Class A Stock) | 22 | 35,921 | ||||||
D/S Norden A/S | 5,275 | 299,706 | ||||||
Novo Nordisk A/S (Class B Stock) | 34,468 | 3,325,343 | ||||||
Scandinavian Tobacco Group A/S, 144A | 15,916 | 236,328 | ||||||
|
| |||||||
3,897,298 | ||||||||
Finland 0.7% | ||||||||
Kemira OYJ | 5,175 | 83,789 | ||||||
Nordea Bank Abp | 98,919 | 1,041,836 | ||||||
|
| |||||||
1,125,625 | ||||||||
France 5.6% | ||||||||
Accor SA | 10,752 | 343,017 | ||||||
Air France-KLM* | 9,621 | 108,823 | ||||||
Amundi SA, 144A | 2,884 | 150,658 | ||||||
Carrefour SA | 14,060 | 246,492 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
France (cont’d.) | ||||||||
Cie de Saint-Gobain SA | 18,434 | $ | 1,003,439 | |||||
Coface SA | 34,576 | 417,170 | ||||||
Dassault Aviation SA | 1,805 | 358,814 | ||||||
Dassault Systemes SE | 4,823 | 198,676 | ||||||
Engie SA | 13,497 | 214,668 | ||||||
Hermes International SCA | 855 | 1,595,281 | ||||||
Ipsen SA | 2,616 | 309,191 | ||||||
Klepierre SA, REIT | 20,590 | 500,003 | ||||||
Legrand SA | 975 | 84,344 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 900 | 644,338 | ||||||
Publicis Groupe SA | 17,136 | 1,304,792 | ||||||
Rexel SA | 18,530 | 378,434 | ||||||
Sopra Steria Group SACA | 1,448 | 259,968 | ||||||
TotalEnergies SE | 2,850 | 190,544 | ||||||
Vinci SA | 12,698 | 1,404,074 | ||||||
|
| |||||||
9,712,726 | ||||||||
Georgia 0.1% | ||||||||
Bank of Georgia Group PLC | 5,808 | 235,150 | ||||||
Germany 5.3% | ||||||||
adidas AG | 450 | 80,014 | ||||||
Bayerische Motoren Werke AG | 11,267 | 1,047,880 | ||||||
Daimler Truck Holding AG | 32,609 | 1,024,582 | ||||||
Deutsche Bank AG | 91,070 | 1,002,184 | ||||||
Deutsche Lufthansa AG* | 39,303 | 275,592 | ||||||
GEA Group AG | 1,600 | 54,721 | ||||||
Heidelberg Materials AG | 13,066 | 948,505 | ||||||
Henkel AG & Co. KGaA | 770 | 48,664 | ||||||
HUGO BOSS AG | 6,307 | 368,865 | ||||||
Infineon Technologies AG | 38,160 | 1,114,662 | ||||||
Krones AG | 806 | 78,563 | ||||||
Mercedes-Benz Group AG | 16,694 | 982,179 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 3,650 | 1,464,774 | ||||||
Salzgitter AG | 2,574 | 64,316 | ||||||
Suedzucker AG | 6,970 | 105,587 | ||||||
Talanx AG | 4,430 | 279,175 | ||||||
Telefonica Deutschland Holding AG | 115,884 | 197,012 | ||||||
|
| |||||||
9,137,275 |
See Notes to Financial Statements.
16
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Greece 0.4% | ||||||||
Eurobank Ergasias Services & Holdings SA* | 312,853 | $ | 511,366 | |||||
National Bank of Greece SA* | 16,350 | 93,642 | ||||||
|
| |||||||
605,008 | ||||||||
Hong Kong 0.4% | ||||||||
WH Group Ltd., 144A | 1,223,000 | 730,416 | ||||||
India 2.8% | ||||||||
Coal India Ltd. | 222,496 | 839,864 | ||||||
Dr. Reddy’s Laboratories Ltd. | 1,400 | 90,362 | ||||||
Hindalco Industries Ltd. | 30,775 | 169,870 | ||||||
Hindustan Aeronautics Ltd. | 1,441 | 31,536 | ||||||
ITC Ltd. | 111,654 | 574,744 | ||||||
Karnataka Bank Ltd. (The) | 87,140 | 240,485 | ||||||
KPIT Technologies Ltd. | 6,938 | 101,516 | ||||||
Oil & Natural Gas Corp. Ltd. | 517,356 | 1,157,628 | ||||||
Power Grid Corp. of India Ltd. | 440,405 | 1,069,628 | ||||||
Tata Motors Ltd. | 41,888 | 316,381 | ||||||
Zensar Technologies Ltd. | 55,019 | 323,958 | ||||||
|
| |||||||
4,915,972 | ||||||||
Indonesia 0.5% | ||||||||
Astra International Tbk PT | 984,100 | 357,995 | ||||||
Bank Mandiri Persero Tbk PT | 264,000 | 94,315 | ||||||
First Pacific Co. Ltd. | 902,000 | 341,466 | ||||||
|
| |||||||
793,776 | ||||||||
Israel 0.7% | ||||||||
Check Point Software Technologies Ltd.* | 8,000 | 1,074,000 | ||||||
Plus500 Ltd. | 4,875 | 83,629 | ||||||
Wix.com Ltd.* | 400 | 31,960 | ||||||
|
| |||||||
1,189,589 | ||||||||
Italy 1.0% | ||||||||
Assicurazioni Generali SpA | 51,585 | 1,024,667 | ||||||
Intesa Sanpaolo SpA | 124,695 | 324,929 | ||||||
UniCredit SpA | 14,247 | 357,167 | ||||||
Unipol Gruppo SpA | 17,784 | 96,346 | ||||||
|
| |||||||
1,803,109 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 17
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan 12.0% | ||||||||
ANA Holdings, Inc.* | 3,200 | $ | 62,822 | |||||
ASAHI YUKIZAI Corp. | 3,300 | 80,811 | ||||||
Astellas Pharma, Inc. | 54,800 | 693,213 | ||||||
Chugai Pharmaceutical Co. Ltd. | 31,300 | 928,251 | ||||||
Dai-ichi Life Holdings, Inc. | 3,900 | 82,388 | ||||||
Dentsu Group, Inc. | 7,100 | 206,227 | ||||||
Disco Corp. | 600 | 105,959 | ||||||
Electric Power Development Co. Ltd. | 12,800 | 196,233 | ||||||
FANUC Corp. | 30,700 | 761,864 | ||||||
Fast Retailing Co. Ltd. | 2,000 | 442,793 | ||||||
Fujikura Ltd. | 114,800 | 824,507 | ||||||
Goldwin, Inc. | 3,400 | 214,734 | ||||||
GungHo Online Entertainment, Inc. | 41,300 | 622,702 | ||||||
Hitachi Ltd. | 8,200 | 519,770 | ||||||
Honda Motor Co. Ltd. | 64,800 | 664,121 | ||||||
Iino Kaiun Kaisha Ltd. | 11,600 | 83,203 | ||||||
INFRONEER Holdings, Inc. | 6,300 | 66,458 | ||||||
Inpex Corp. | 41,200 | 597,848 | ||||||
JAFCO Group Co. Ltd. | 67,500 | 727,030 | ||||||
Japan Airlines Co. Ltd. | 3,500 | 64,343 | ||||||
Japan Exchange Group, Inc. | 22,400 | 442,955 | ||||||
Japan Lifeline Co. Ltd. | 11,000 | 83,879 | ||||||
JFE Holdings, Inc. | 5,400 | 75,237 | ||||||
Komatsu Ltd. | 38,500 | 884,591 | ||||||
Koshidaka Holdings Co. Ltd. | 12,000 | 85,376 | ||||||
Lasertec Corp. | 2,700 | 445,987 | ||||||
Mazda Motor Corp. | 8,100 | 78,295 | ||||||
Mitsui Fudosan Co. Ltd. | 10,300 | 223,251 | ||||||
Mitsui OSK Lines Ltd. | 2,500 | 64,543 | ||||||
Mori Hills REIT Investment Corp., REIT | 279 | 261,129 | ||||||
Nabtesco Corp. | 4,800 | 85,016 | ||||||
Nippon Steel Corp. | 56,800 | 1,225,111 | ||||||
Nomura Research Institute Ltd. | 35,300 | 926,623 | ||||||
NTN Corp. | 434,400 | 773,862 | ||||||
Obayashi Corp. | 8,400 | 71,953 | ||||||
Open Up Group, Inc. | 23,400 | 290,251 | ||||||
Oriental Land Co. Ltd. | 3,600 | 116,443 | ||||||
ORIX Corp. | 5,200 | 94,569 | ||||||
Otsuka Holdings Co. Ltd. | 26,700 | 898,347 | ||||||
Persol Holdings Co. Ltd. | 103,500 | 155,190 | ||||||
Pressance Corp. | 6,800 | 73,363 | ||||||
Renesas Electronics Corp.* | 63,800 | 838,053 | ||||||
Sangetsu Corp. | 7,900 | 148,464 | ||||||
SCREEN Holdings Co. Ltd. | 14,200 | 660,188 |
See Notes to Financial Statements.
18
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Sega Sammy Holdings, Inc. | 3,700 | $ | 57,866 | |||||
Sekisui House REIT, Inc., REIT | 528 | 278,085 | ||||||
Shionogi & Co. Ltd. | 23,300 | 1,084,956 | ||||||
Sojitz Corp. | 42,400 | 880,453 | ||||||
Sompo Holdings, Inc. | 3,400 | 147,288 | ||||||
Subaru Corp. | 4,700 | 81,358 | ||||||
Suzuki Motor Corp. | 3,600 | 139,723 | ||||||
Tamron Co. Ltd. | 6,000 | 163,339 | ||||||
TIS, Inc. | 1,600 | 34,264 | ||||||
Tokyo Steel Manufacturing Co. Ltd. | 7,200 | 83,218 | ||||||
Tomy Co. Ltd. | 9,000 | 124,133 | ||||||
Toyota Boshoku Corp. | 20,800 | 361,731 | ||||||
Toyota Motor Corp. | 13,665 | 239,052 | ||||||
Visional, Inc.* | 1,700 | 83,326 | ||||||
|
| |||||||
20,706,745 | ||||||||
Luxembourg 0.5% | ||||||||
ArcelorMittal SA | 41,677 | 922,198 | ||||||
Mexico 0.8% | ||||||||
Banco del Bajio SA, 144A | 170,900 | 520,312 | ||||||
Grupo Mexico SAB de CV (Class B Stock) | 195,100 | 810,202 | ||||||
|
| |||||||
1,330,514 | ||||||||
Netherlands 4.6% | ||||||||
ABN AMRO Bank NV, 144A, CVA | 2,325 | 31,315 | ||||||
AMG Critical Materials NV | 1,750 | 45,639 | ||||||
ASM International NV | 348 | 143,613 | ||||||
ASML Holding NV | 1,607 | 966,001 | ||||||
EXOR NV | 6,168 | 529,394 | ||||||
ING Groep NV | 56,147 | 719,834 | ||||||
Koninklijke Ahold Delhaize NV | 45,263 | 1,340,318 | ||||||
Koninklijke KPN NV | 286,174 | 961,882 | ||||||
Shell PLC | 68,455 | 2,206,089 | ||||||
Wolters Kluwer NV | 7,545 | 968,069 | ||||||
|
| |||||||
7,912,154 | ||||||||
New Zealand 0.3% | ||||||||
Xero Ltd.* | 7,025 | 480,280 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 19
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Norway 0.6% | ||||||||
DNB Bank ASA | 45,873 | $ | 827,635 | |||||
Mowi ASA | 13,724 | 223,010 | ||||||
|
| |||||||
1,050,645 | ||||||||
Poland 0.0% | ||||||||
Powszechny Zaklad Ubezpieczen SA | 4,298 | 48,636 | ||||||
Qatar 0.4% | ||||||||
Ooredoo QPSC | 228,249 | 619,744 | ||||||
Russia 0.0% | ||||||||
Inter RAO UES PJSC^ | 13,660,000 | 15 | ||||||
LUKOIL PJSC^ | 14,283 | — | ||||||
Polyus PJSC*^ | 1,450 | — | ||||||
Rosneft Oil Co. PJSC^ | 155,425 | — | ||||||
Sberbank of Russia PJSC^ | 366,709 | — | ||||||
|
| |||||||
15 | ||||||||
Saudi Arabia 0.3% | ||||||||
Elm Co. | 993 | 185,663 | ||||||
Etihad Etisalat Co. | 8,294 | 101,954 | ||||||
SABIC Agri-Nutrients Co. | 3,400 | 121,390 | ||||||
Saudi Telecom Co. | 10,918 | 111,845 | ||||||
|
| |||||||
520,852 | ||||||||
Singapore 1.8% | ||||||||
BW LPG Ltd., 144A | 9,869 | 139,700 | ||||||
Hafnia Ltd. | 5,230 | 34,369 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 126,000 | 1,168,161 | ||||||
Singapore Airlines Ltd. | 183,000 | 817,143 | ||||||
STMicroelectronics NV | 25,806 | 983,727 | ||||||
|
| |||||||
3,143,100 | ||||||||
South Africa 0.0% | ||||||||
Sanlam Ltd. | 12,623 | 44,286 | ||||||
South Korea 4.9% | ||||||||
DB Insurance Co. Ltd. | 12,339 | 802,762 | ||||||
Doosan Bobcat, Inc. | 1,712 | 49,188 | ||||||
Hana Financial Group, Inc. | 34,217 | 994,920 | ||||||
Hyundai Mobis Co. Ltd. | 5,877 | 910,140 |
See Notes to Financial Statements.
20
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
South Korea (cont’d.) | ||||||||
Hyundai Motor Co. | 3,799 | $ | 478,614 | |||||
Industrial Bank of Korea | 14,867 | 123,039 | ||||||
JB Financial Group Co. Ltd. | 14,248 | 106,576 | ||||||
KB Financial Group, Inc. | 27,988 | 1,066,854 | ||||||
Kia Corp. | 20,363 | 1,163,368 | ||||||
OCI Holdings Co. Ltd. | 1,000 | 72,252 | ||||||
Samsung C&T Corp. | 12,385 | 979,229 | ||||||
Samsung Electronics Co. Ltd. | 18,948 | 943,134 | ||||||
Samsung Engineering Co. Ltd.* | 1,805 | 31,813 | ||||||
Samsung Fire & Marine Insurance Co. Ltd. | 1,208 | 230,997 | ||||||
Samsung Life Insurance Co. Ltd. | 3,379 | 180,909 | ||||||
Samsung Securities Co. Ltd. | 14,124 | 369,997 | ||||||
|
| |||||||
8,503,792 | ||||||||
Spain 1.0% | ||||||||
Endesa SA | 16,892 | 317,817 | ||||||
Industria de Diseno Textil SA | 41,115 | 1,419,207 | ||||||
Repsol SA | 3,850 | 56,372 | ||||||
|
| |||||||
1,793,396 | ||||||||
Sweden 3.1% | ||||||||
Alfa Laval AB | 2,310 | 74,860 | ||||||
Atlas Copco AB (Class A Stock) | 52,970 | 685,910 | ||||||
Atlas Copco AB (Class B Stock) | 14,008 | 157,355 | ||||||
Epiroc AB (Class B Stock) | 2,938 | 40,795 | ||||||
Essity AB (Class B Stock) | 36,471 | 831,607 | ||||||
Investor AB (Class B Stock) | 28,035 | 514,641 | ||||||
Scandic Hotels Group AB, 144A* | 50,175 | 169,112 | ||||||
Skandinaviska Enskilda Banken AB (Class A Stock) | 63,075 | 703,886 | ||||||
SKF AB (Class B Stock) | 9,162 | 148,539 | ||||||
SSAB AB (Class A Stock) | 12,800 | 76,679 | ||||||
Swedbank AB (Class A Stock) | 46,979 | 771,551 | ||||||
Volvo AB (Class B Stock) | 62,470 | 1,237,855 | ||||||
|
| |||||||
5,412,790 | ||||||||
Switzerland 2.2% | ||||||||
ABB Ltd. | 37,842 | 1,271,405 | ||||||
Kuehne + Nagel International AG | 1,152 | 310,653 | ||||||
Novartis AG | 19,655 | 1,840,092 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 21
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Switzerland (cont’d.) | ||||||||
Partners Group Holding AG | 363 | $ | 384,367 | |||||
Schindler Holding AG | 170 | 33,140 | ||||||
|
| |||||||
3,839,657 | ||||||||
Taiwan 4.5% | ||||||||
Accton Technology Corp. | 15,000 | 232,414 | ||||||
Acer, Inc. | 144,000 | 152,191 | ||||||
Advantech Co. Ltd. | 6,599 | 67,770 | ||||||
Asustek Computer, Inc. | 5,000 | 52,426 | ||||||
Chunghwa Telecom Co. Ltd. | 30,000 | 107,296 | ||||||
Compal Electronics, Inc. | 126,000 | 109,599 | ||||||
Evergreen Marine Corp. Taiwan Ltd. | 134,000 | 445,922 | ||||||
Hon Hai Precision Industry Co. Ltd. | 53,000 | 158,190 | ||||||
Largan Precision Co. Ltd. | 1,000 | 64,047 | ||||||
Novatek Microelectronics Corp. | 41,000 | 577,406 | ||||||
Quanta Computer, Inc. | 175,000 | 1,033,254 | ||||||
Supreme Electronics Co. Ltd. | 60,000 | 103,068 | ||||||
TaiDoc Technology Corp. | 37,000 | 162,748 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 219,000 | 3,576,823 | ||||||
Wistron Corp. | 277,000 | 772,415 | ||||||
Wiwynn Corp. | 3,000 | 142,149 | ||||||
|
| |||||||
7,757,718 | ||||||||
Thailand 0.5% | ||||||||
Bumrungrad Hospital PCL | 109,300 | 789,966 | ||||||
Turkey 0.5% | ||||||||
KOC Holding A/S | 14,692 | 71,066 | ||||||
Turkiye Is Bankasi A/S (Class C Stock) | 890,790 | 662,137 | ||||||
Yapi ve Kredi Bankasi A/S | 130,618 | 79,718 | ||||||
|
| |||||||
812,921 | ||||||||
United Arab Emirates 1.3% | ||||||||
Emaar Properties PJSC | 616,930 | 1,123,913 | ||||||
Emirates NBD Bank PJSC | 254,782 | 1,176,144 | ||||||
|
| |||||||
2,300,057 | ||||||||
United Kingdom 7.8% | ||||||||
3i Group PLC | 39,102 | 921,931 | ||||||
Ashtead Group PLC | 3,292 | 188,804 | ||||||
AstraZeneca PLC | 3,469 | 434,332 |
See Notes to Financial Statements.
22
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom (cont’d.) | ||||||||
B&M European Value Retail SA | 12,600 | $ | 81,116 | |||||
BAE Systems PLC | 35,625 | 479,027 | ||||||
Barclays PLC | 547,187 | 878,261 | ||||||
BP PLC | 298,520 | 1,822,769 | ||||||
British American Tobacco PLC | 42,085 | 1,257,182 | ||||||
Centrica PLC | 144,072 | 275,797 | ||||||
HSBC Holdings PLC | 152,109 | 1,098,292 | ||||||
Imperial Brands PLC | 56,338 | 1,200,236 | ||||||
Informa PLC | 50,984 | 441,750 | ||||||
Investec PLC | 29,783 | 165,830 | ||||||
JD Sports Fashion PLC | 404,970 | 629,662 | ||||||
Lloyds Banking Group PLC | 215,169 | 104,723 | ||||||
Man Group PLC | 94,800 | 253,461 | ||||||
Mitie Group PLC | 65,772 | 78,943 | ||||||
NatWest Group PLC | 36,449 | 79,306 | ||||||
Paragon Banking Group PLC | 14,150 | 76,326 | ||||||
Rolls-Royce Holdings PLC* | 404,635 | 1,065,091 | ||||||
Serco Group PLC | 89,954 | 156,288 | ||||||
Standard Chartered PLC | 17,455 | 133,833 | ||||||
Tesco PLC | 86,699 | 284,508 | ||||||
Unilever PLC | 10,324 | 488,952 | ||||||
Whitbread PLC | 22,622 | 917,280 | ||||||
|
| |||||||
13,513,700 | ||||||||
United States 3.8% | ||||||||
GSK PLC | 87,086 | 1,552,463 | ||||||
Holcim AG* | 19,262 | 1,190,926 | ||||||
Nestle SA | 12,317 | 1,328,250 | ||||||
Roche Holding AG | 8,508 | 2,192,594 | ||||||
Sanofi SA | 3,107 | 282,135 | ||||||
Stellantis NV | 4,060 | 75,850 | ||||||
|
| |||||||
6,622,218 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(cost $162,420,901) | 161,839,548 | |||||||
|
| |||||||
PREFERRED STOCKS 1.8% | ||||||||
Brazil 1.6% | ||||||||
Cia Energetica de Minas Gerais (PRFC) | 389,469 | 904,583 | ||||||
Gerdau SA (PRFC) | 60,900 | 264,291 |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 23
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
PREFERRED STOCKS (Continued) | ||||||||
Brazil (cont’d.) | ||||||||
Metalurgica Gerdau SA (PRFC) | 69,300 | $ | 142,126 | |||||
Petroleo Brasileiro SA (PRFC) | 204,800 | 1,410,761 | ||||||
|
| |||||||
2,721,761 | ||||||||
Germany 0.1% | ||||||||
Bayerische Motoren Werke AG (PRFC) | 418 | 35,542 | ||||||
Henkel AG & Co. KGaA (PRFC) | 1,175 | 84,759 | ||||||
|
| |||||||
120,301 | ||||||||
South Korea 0.1% | ||||||||
Samsung Electronics Co. Ltd. (PRFC) | 6,505 | 259,711 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS | ||||||||
(cost $2,390,125) | 3,101,773 | |||||||
|
| |||||||
UNAFFILIATED EXCHANGE-TRADED FUNDS 1.9% | ||||||||
United States | ||||||||
iShares MSCI EAFE ETF | 37,700 | 2,522,884 | ||||||
iShares MSCI Emerging Markets ETF(a) | 22,700 | 833,090 | ||||||
|
| |||||||
TOTAL UNAFFILIATED EXCHANGE-TRADED FUNDS | ||||||||
(cost $3,538,503) | 3,355,974 | |||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | ||||||||
(cost $168,349,529) | 168,297,295 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 2.5% | ||||||||
AFFILIATED MUTUAL FUNDS 2.3% | ||||||||
PGIM Core Government Money Market Fund(wb) | 3,297,041 | 3,297,041 | ||||||
PGIM Institutional Money Market Fund | ||||||||
(cost $685,423; includes $677,700 of cash collateral for securities on loan)(b)(wb) | 685,833 | 685,491 | ||||||
|
| |||||||
TOTAL AFFILIATED MUTUAL FUNDS | ||||||||
(cost $3,982,464) | 3,982,532 | |||||||
|
|
See Notes to Financial Statements.
24
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
U.S. TREASURY OBLIGATION(k)(n) 0.2% | ||||||||||||||||
U.S. Treasury Bills | ||||||||||||||||
(cost $298,117) | 5.330% | 12/14/23 | 300 | $ | 298,102 | |||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||||||||||
(cost $4,280,581) | 4,280,634 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 99.8% | ||||||||||||||||
(cost $172,630,110) | 172,577,929 | |||||||||||||||
Other assets in excess of liabilities(z) 0.2% | 360,402 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 172,938,331 | ||||||||||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
USD—US Dollar
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
ADR—American Depositary Receipt
CVA—Certificate Van Aandelen (Bearer)
EAFE—Europe, Australasia, Far East
ETF—Exchange-Traded Fund
GS—Goldman Sachs & Co. LLC
MSCI—Morgan Stanley Capital International
PJSC—Public Joint-Stock Company
PRFC—Preference Shares
REITs—Real Estate Investment Trust
SOFR—Secured Overnight Financing Rate
UTS—Unit Trust Security
* | Non-income producing security. |
# | Principal amount is shown in U.S. dollars unless otherwise stated. |
^ | Indicates a Level 3 instrument. The aggregate value of Level 3 instruments is $15 and 0.0% of net assets. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $660,600; cash collateral of $677,700 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(k) | Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
(z) | Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments: |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 25
Schedule of Investments (continued)
as of October 31, 2023
Futures contracts outstanding at October 31, 2023:
Number of Contracts | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | ||||||||||||
Long Positions: | ||||||||||||||||
39 | Mini MSCI EAFE Index | Dec. 2023 | $ | 3,849,495 | $ | (210,205 | ) | |||||||||
35 | Mini MSCI Emerging Markets Index | Dec. 2023 | 1,608,600 | (116,181 | ) | |||||||||||
|
| |||||||||||||||
$ | (326,386 | ) | ||||||||||||||
|
|
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||
GS | $— | $298,102 | ||
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||
Investments in Securities | ||||||||||
Assets | ||||||||||
Long-Term Investments | ||||||||||
Common Stocks | ||||||||||
Australia | $ | — | $ | 9,062,785 | $— | |||||
Austria | — | 35,809 | — | |||||||
Belgium | — | 465,907 | — | |||||||
Brazil | 3,140,673 | — | — | |||||||
Canada | 9,773,739 | — | — | |||||||
Chile | — | 83,124 | — | |||||||
China | 2,530,977 | 14,475,206 | — | |||||||
Denmark | — | 3,897,298 | — | |||||||
Finland | — | 1,125,625 | — | |||||||
France | — | 9,712,726 | — | |||||||
Georgia | — | 235,150 | — |
See Notes to Financial Statements.
26
Level 1 | Level 2 | Level 3 | ||||||||
Investments in Securities (continued) | ||||||||||
Assets (continued) | ||||||||||
Long-Term Investments (continued) | ||||||||||
Common Stocks (continued) | ||||||||||
Germany | $ | — | $ | 9,137,275 | $— | |||||
Greece | — | 605,008 | — | |||||||
Hong Kong | — | 730,416 | — | |||||||
India | — | 4,915,972 | — | |||||||
Indonesia | — | 793,776 | — | |||||||
Israel | 1,105,960 | 83,629 | — | |||||||
Italy | — | 1,803,109 | — | |||||||
Japan | — | 20,706,745 | — | |||||||
Luxembourg | — | 922,198 | — | |||||||
Mexico | 1,330,514 | — | — | |||||||
Netherlands | — | 7,912,154 | — | |||||||
New Zealand | — | 480,280 | — | |||||||
Norway | — | 1,050,645 | — | |||||||
Poland | — | 48,636 | — | |||||||
Qatar | — | 619,744 | — | |||||||
Russia | — | — | 15 | |||||||
Saudi Arabia | — | 520,852 | — | |||||||
Singapore | — | 3,143,100 | — | |||||||
South Africa | — | 44,286 | — | |||||||
South Korea | — | 8,503,792 | — | |||||||
Spain | — | 1,793,396 | — | |||||||
Sweden | — | 5,412,790 | — | |||||||
Switzerland | — | 3,839,657 | — | |||||||
Taiwan | — | 7,757,718 | — | |||||||
Thailand | — | 789,966 | — | |||||||
Turkey | — | 812,921 | — | |||||||
United Arab Emirates | — | 2,300,057 | — | |||||||
United Kingdom | — | 13,513,700 | — | |||||||
United States | — | 6,622,218 | — | |||||||
Preferred Stocks | ||||||||||
Brazil | 2,721,761 | — | — | |||||||
Germany | — | 120,301 | — | |||||||
South Korea | — | 259,711 | — | |||||||
Unaffiliated Exchange-Traded Funds | ||||||||||
United States | 3,355,974 | — | — | |||||||
Short-Term Investments | ||||||||||
Affiliated Mutual Funds | 3,982,532 | — | — | |||||||
U.S. Treasury Obligation | — | 298,102 | — | |||||||
|
|
|
| |||||||
Total | $ | 27,942,130 | $ | 144,635,784 | $15 | |||||
|
|
|
|
| ||||||
Other Financial Instruments* | ||||||||||
Liabilities | ||||||||||
Futures Contracts | $ | (326,386 | ) | $ | — | $— | ||||
|
|
|
|
|
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 27
Schedule of Investments (continued)
as of October 31, 2023
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value. |
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of October 31, 2023 were as follows:
Banks | 11.2 | % | ||
Pharmaceuticals | 8.2 | |||
Oil, Gas & Consumable Fuels | 6.2 | |||
Insurance | 5.6 | |||
Semiconductors & Semiconductor Equipment | 5.5 | |||
Metals & Mining | 5.0 | |||
Automobiles | 3.7 | |||
Machinery | 3.6 | |||
Capital Markets | 2.6 | |||
Consumer Staples Distribution & Retail | 2.5 | |||
Technology Hardware, Storage & Peripherals | 2.4 | |||
Affiliated Mutual Funds (0.4% represents investments purchased with collateral from securities on loan) | 2.3 | |||
Food Products | 2.1 | |||
Textiles, Apparel & Luxury Goods | 2.0 | |||
Diversified Telecommunication Services | 2.0 | |||
Unaffiliated Exchange-Traded Funds | 1.9 | |||
Tobacco | 1.9 | |||
Financial Services | 1.8 | |||
Specialty Retail | 1.8 | |||
Broadline Retail | 1.7 | |||
Electric Utilities | 1.5 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Electrical Equipment | 1.3 | |||
Interactive Media & Services | 1.2 | |||
Construction Materials | 1.2 | |||
Entertainment | 1.2 | |||
Media | 1.1 | |||
Aerospace & Defense | 1.1 | |||
Software | 1.1 | |||
Industrial Conglomerates | 1.1 | |||
IT Services | 1.0 | |||
Real Estate Management & Development | 1.0 | |||
Trading Companies & Distributors | 1.0 | |||
Construction & Engineering | 0.9 |
Professional Services | 0.9 | % | ||
Automobile Components | 0.8 | |||
Chemicals | 0.8 | |||
Passenger Airlines | 0.8 | |||
Marine Transportation | 0.7 | |||
Industrial REITs | 0.7 | |||
Health Care Providers & Services | 0.6 | |||
Building Products | 0.6 | |||
Household Products | 0.6 | |||
Electronic Equipment, Instruments & Components | 0.5 | |||
Personal Care Products | 0.5 | |||
Retail REITs | 0.3 | |||
Multi-Utilities | 0.3 | |||
Household Durables | 0.2 | |||
Commercial Services & Supplies | 0.2 | |||
Diversified REITs | 0.2 | |||
U.S. Treasury Obligation | 0.2 | |||
Office REITs | 0.2 | |||
Health Care Equipment & Supplies | 0.1 | |||
Communications Equipment | 0.1 | |||
Independent Power & Renewable Electricity Producers | 0.1 | |||
Leisure Products | 0.1 | |||
Wireless Telecommunication Services | 0.1 | |||
Gas Utilities | 0.1 | |||
Water Utilities | 0.0 | * | ||
Biotechnology | 0.0 | * | ||
|
| |||
99.8 | ||||
Other assets in excess of liabilities | 0.2 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than 0.05% |
See Notes to Financial Statements.
28
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of October 31, 2023 as presented in the Statement of Assets and Liabilities:
Asset Derivatives | Liability Derivatives | |||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Statement of Assets and Liabilities Location |
| Fair Value |
| Statement of Assets and Liabilities Location |
| Fair Value | |||||||||
Equity contracts | — | $— | Due from/to broker-variation margin futures | $ | 326,386 | * | ||||||||||
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
The effects of derivative instruments on the Statement of Operations for the year ended October 31, 2023 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||
| ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Futures | |||
Equity contracts | $ | 1,025,115 | ||
|
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||
| ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Futures | |||
Equity contracts | $ | (365,135 | ) | |
|
|
For the year ended October 31, 2023, the Fund’s average volume of derivative activities is as follows:
Derivative Contract Type | Average Volume of Derivative Activities* | |
| ||
Futures Contracts - Long Positions (1) | $5,629,972 | |
|
* | Average volume is based on average quarter end balances as noted for the year ended October 31, 2023. |
(1) | Notional Amount in USD. |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 29
Schedule of Investments (continued)
as of October 31, 2023
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions where the legal right to set-off exists is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
| ||||||
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||
| ||||||
Securities on Loan | $660,600 | $(660,600) | $— | |||
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
30
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value, including securities on loan of $660,600: | ||||
Unaffiliated investments (cost $168,647,646) | $ | 168,595,397 | ||
Affiliated investments (cost $3,982,464) | 3,982,532 | |||
Foreign currency, at value (cost $366,078) | 362,272 | |||
Tax reclaim receivable | 800,830 | |||
Dividends and interest receivable | 446,732 | |||
Receivable for Fund shares sold | 124,209 | |||
Due from broker—variation margin futures | 830 | |||
Prepaid expenses and other assets | 10,015 | |||
|
| |||
Total Assets | 174,322,817 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 677,700 | |||
Payable for Fund shares purchased | 299,671 | |||
Foreign capital gains tax liability accrued | 105,743 | |||
Affiliated transfer agent fee payable | 73,989 | |||
Accrued expenses and other liabilities | 57,229 | |||
Management fee payable | 49,339 | |||
Distribution fee payable | 32,770 | |||
Custodian and accounting fee payable | 31,358 | |||
Audit fees payable | 28,618 | |||
Transfer agent fee payable | 27,097 | |||
Directors’ fees payable | 972 | |||
|
| |||
Total Liabilities | 1,384,486 | |||
|
| |||
Net Assets | $ | 172,938,331 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 272 | ||
Paid-in capital in excess of par | 187,607,164 | |||
Total distributable earnings (loss) | (14,669,105 | ) | ||
|
| |||
Net assets, October 31, 2023 | $ | 172,938,331 | ||
|
|
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 31
Statement of Assets and Liabilities
as of October 31, 2023
Class A | ||||||||||
Net asset value and redemption price per share, ($ 121,356,700 ÷ 19,162,539 shares of common stock issued and outstanding) | $ | 6.33 | ||||||||
Maximum sales charge (5.50% of offering price) | 0.37 | |||||||||
|
| |||||||||
Maximum offering price to public | $ | 6.70 | ||||||||
|
| |||||||||
Class C | ||||||||||
Net asset value, offering price and redemption price per share, ($ 1,106,903 ÷ 186,703 shares of common stock issued and outstanding) | $ | 5.93 | ||||||||
|
| |||||||||
Class Z | ||||||||||
Net asset value, offering price and redemption price per share, ($ 10,954,745 ÷ 1,708,392 shares of common stock issued and outstanding) | $ | 6.41 | ||||||||
|
| |||||||||
Class R6 | ||||||||||
Net asset value, offering price and redemption price per share, ($ 39,519,983 ÷ 6,149,655 shares of common stock issued and outstanding) | $ | 6.43 | ||||||||
|
|
See Notes to Financial Statements.
32
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $1,067,802 foreign withholding tax) | $ | 7,963,293 | ||
Affiliated dividend income | 94,993 | |||
Interest income | 18,893 | |||
Income from securities lending, net (including affiliated income of $2,819) | 3,326 | |||
|
| |||
Total income | 8,080,505 | |||
|
| |||
Expenses | ||||
Management fee | 1,424,530 | |||
Distribution fee(a) | 403,784 | |||
Transfer agent’s fees and expenses (including affiliated expense of $392,007)(a) | 623,067 | |||
Custodian and accounting fees | 142,220 | |||
Professional fees | 104,133 | |||
Shareholders’ reports | 58,317 | |||
Registration fees(a) | 33,291 | |||
Audit fee | 28,620 | |||
Directors’ fees | 12,264 | |||
Miscellaneous | 46,062 | |||
|
| |||
Total expenses | 2,876,288 | |||
Less: Fee waiver and/or expense reimbursement(a) | (336,153 | ) | ||
|
| |||
Net expenses | 2,540,135 | |||
|
| |||
Net investment income (loss) | 5,540,370 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $394) (net of foreign capital gains taxes $88,432) | 1,735,117 | |||
Futures transactions | 1,025,115 | |||
Foreign currency transactions | (70,871 | ) | ||
|
| |||
2,689,361 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $67) (net of change in foreign capital gains taxes $(106,037)) | 17,045,197 | |||
Futures | (365,135 | ) | ||
Foreign currencies | 43,982 | |||
|
| |||
16,724,044 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 19,413,405 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 24,953,775 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 390,998 | 12,786 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 585,757 | 9,376 | 24,992 | 2,942 | ||||||||||||
Registration fees | 12,502 | 7,673 | 5,888 | 7,228 | ||||||||||||
Fee waiver and/or expense reimbursement | (223,686) | (2,194) | (20,798) | (89,475) |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 33
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
|
| |||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 5,540,370 | $ | 6,188,562 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 2,689,361 | (19,454,171 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 16,724,044 | (47,598,728 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 24,953,775 | (60,864,337 | ) | |||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (4,478,558 | ) | (17,710,432 | ) | ||||
Class C | (30,105 | ) | (215,704 | ) | ||||
Class Z | (511,647 | ) | (1,681,493 | ) | ||||
Class R6 | (1,675,178 | ) | (6,297,350 | ) | ||||
|
|
|
| |||||
(6,695,488 | ) | (25,904,979 | ) | |||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 17,742,828 | 21,038,306 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 6,609,213 | 25,597,840 | ||||||
Cost of shares purchased | (38,363,562 | ) | (46,108,812 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | (14,011,521 | ) | 527,334 | |||||
|
|
|
| |||||
Total increase (decrease) | 4,246,766 | (86,241,982 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 168,691,565 | 254,933,547 | ||||||
|
|
|
| |||||
End of year | $ | 172,938,331 | $ | 168,691,565 | ||||
|
|
|
|
See Notes to Financial Statements.
34
Financial Highlights
Class A Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $5.76 | $8.59 | $6.74 | $7.19 | $6.96 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.17 | 0.18 | 0.18 | 0.11 | 0.15 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.62 | (2.14 | ) | 1.78 | (0.39 | ) | 0.28 | |||||||||||||
Total from investment operations | 0.79 | (1.96 | ) | 1.96 | (0.28 | ) | 0.43 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.24 | ) | (0.11 | ) | (0.17 | ) | (0.17 | ) | ||||||||||
Distributions from net realized gains | - | (0.63 | ) | - | - | (0.03 | ) | |||||||||||||
Total dividends and distributions | (0.22 | ) | (0.87 | ) | (0.11 | ) | (0.17 | ) | (0.20 | ) | ||||||||||
Net asset value, end of year | $6.33 | $5.76 | $8.59 | $6.74 | $7.19 | |||||||||||||||
Total Return(b): | 13.91 | % | (25.11 | )% | 29.28 | % | (4.07 | )% | 6.53 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 121,357 | $ | 119,053 | $ | 176,479 | $ | 147,445 | $ | 173,103 | ||||||||||
Average net assets (000) | $ | 130,333 | $ | 148,834 | $ | 176,751 | $ | 156,952 | $ | 172,031 | ||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.54 | % | 1.49 | % | 1.43 | % | 1.47 | % | 1.48 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.71 | % | 1.63 | % | 1.55 | % | 1.64 | % | 1.62 | % | ||||||||||
Net investment income (loss) | 2.69 | % | 2.65 | % | 2.12 | % | 1.58 | % | 2.19 | % | ||||||||||
Portfolio turnover rate(d) | 111 | % | 99 | % | 104 | % | 128 | % | 94 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying portfolios in which the Fund invests. |
(d) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 35
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $5.42 | $8.13 | $6.38 | $6.86 | $6.64 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.07 | 0.09 | 0.07 | 0.02 | 0.07 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.58 | (2.02 | ) | 1.71 | (0.38 | ) | 0.30 | |||||||||||||
Total from investment operations | 0.65 | (1.93 | ) | 1.78 | (0.36 | ) | 0.37 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.15 | ) | (0.03 | ) | (0.12 | ) | (0.12 | ) | ||||||||||
Distributions from net realized gains | - | (0.63 | ) | - | - | (0.03 | ) | |||||||||||||
Total dividends and distributions | (0.14 | ) | (0.78 | ) | (0.03 | ) | (0.12 | ) | (0.15 | ) | ||||||||||
Net asset value, end of year | $5.93 | $5.42 | $8.13 | $6.38 | $6.86 | |||||||||||||||
Total Return(b): | 12.11 | % | (25.98 | )% | 27.89 | % | (5.42 | )% | 5.77 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 1,107 | $ | 1,319 | $ | 2,335 | $ | 2,381 | $ | 2,928 | ||||||||||
Average net assets (000) | $ | 1,279 | $ | 1,929 | $ | 2,444 | $ | 2,640 | $ | 7,163 | ||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 3.12 | % | 2.73 | % | 2.61 | % | 2.81 | % | 2.25 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 3.29 | % | 2.87 | % | 2.73 | % | 2.98 | % | 2.39 | % | ||||||||||
Net investment income (loss) | 1.13 | % | 1.43 | % | 0.84 | % | 0.24 | % | 1.09 | % | ||||||||||
Portfolio turnover rate(d) | 111 | % | 99 | % | 104 | % | 128 | % | 94 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying portfolios in which the Fund invests. |
(d) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
36
Class Z Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $5.83 | $8.68 | $6.81 | $7.26 | $7.02 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.21 | 0.22 | 0.22 | 0.13 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.62 | (2.16 | ) | 1.79 | (0.37 | ) | 0.29 | |||||||||||||
Total from investment operations | 0.83 | (1.94 | ) | 2.01 | (0.24 | ) | 0.47 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.25 | ) | (0.28 | ) | (0.14 | ) | (0.21 | ) | (0.20 | ) | ||||||||||
Distributions from net realized gains | - | (0.63 | ) | - | - | (0.03 | ) | |||||||||||||
Total dividends and distributions | (0.25 | ) | (0.91 | ) | (0.14 | ) | (0.21 | ) | (0.23 | ) | ||||||||||
Net asset value, end of year | $6.41 | $5.83 | $8.68 | $6.81 | $7.26 | |||||||||||||||
Total Return(b): | 14.49 | % | (24.82 | )% | 29.85 | % | (3.61 | )% | 7.05 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $10,955 | $11,635 | $16,562 | $13,062 | $14,753 | |||||||||||||||
Average net assets (000) | $12,118 | $15,433 | $17,429 | $12,955 | $13,815 | |||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.04 | % | 1.04 | % | 1.01 | % | 1.09 | % | 1.03 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.21 | % | 1.18 | % | 1.13 | % | 1.26 | % | 1.17 | % | ||||||||||
Net investment income (loss) | 3.16 | % | 3.20 | % | 2.60 | % | 1.97 | % | 2.58 | % | ||||||||||
Portfolio turnover rate(d) | 111 | % | 99 | % | 104 | % | 128 | % | 94 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying portfolios in which the Fund invests. |
(d) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Quant Solutions International Equity Fund 37
Financial Highlights (continued)
Class R6 Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $5.85 | $8.70 | $6.83 | $7.27 | $7.03 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.24 | 0.25 | 0.16 | 0.21 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.62 | (2.16 | ) | 1.78 | (0.38 | ) | 0.27 | |||||||||||||
Total from investment operations | 0.85 | (1.92 | ) | 2.03 | (0.22 | ) | 0.48 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.30 | ) | (0.16 | ) | (0.22 | ) | (0.21 | ) | ||||||||||
Distributions from net realized gains | - | (0.63 | ) | - | - | (0.03 | ) | |||||||||||||
Total dividends and distributions | (0.27 | ) | (0.93 | ) | (0.16 | ) | (0.22 | ) | (0.24 | ) | ||||||||||
Net asset value, end of year | $6.43 | $5.85 | $8.70 | $6.83 | $7.27 | |||||||||||||||
Total Return(b): | 14.97 | % | (24.60 | )% | 29.96 | % | (3.26 | )% | 7.33 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $39,520 | $36,684 | $59,558 | $18,837 | $5,487 | |||||||||||||||
Average net assets (000) | $46,208 | $51,067 | $37,941 | $18,273 | $23,216 | |||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.78 | % | 0.78 | % | 0.78 | % | 0.78 | % | 0.78 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.97 | % | 0.96 | % | 0.94 | % | 1.05 | % | 0.95 | % | ||||||||||
Net investment income (loss) | 3.53 | % | 3.38 | % | 2.92 | % | 2.33 | % | 3.06 | % | ||||||||||
Portfolio turnover rate(d) | 111 | % | 99 | % | 104 | % | 128 | % | 94 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying portfolios in which the Fund invests. |
(d) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
38
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Quant Solutions International Equity Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is to seek long-term growth of capital.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the
PGIM Quant Solutions International Equity Fund 39
Notes to Financial Statements (continued)
Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
40
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in
PGIM Quant Solutions International Equity Fund 41
Notes to Financial Statements (continued)
the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.
The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
42
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
The Fund is subject to foreign income taxes imposed by certain countries in which it invests. Additionally, capital gains realized upon disposition of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries. All taxes are computed in accordance with the applicable foreign tax law, and, to the extent permitted, capital losses are used to offset capital gains. Taxes attributable to income are accrued by the Fund as a reduction of income. Current and deferred tax expense attributable to capital gains is reflected as a component of realized or change in unrealized gain/loss on securities in the accompanying financial statements. To the extent that the Fund has country specific capital loss carryforwards, such carryforwards are applied against net unrealized gains when determining the deferred tax liability. Any deferred tax liability incurred by the Fund is included in either Other liabilities or Deferred tax liability on the accompanying Statement of Assets and Liabilities.
PGIM Quant Solutions International Equity Fund 43
Notes to Financial Statements (continued)
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |||
Net Investment Income | Annually | |||
Short-Term Capital Gains | Annually | |||
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with PGIM Quantitative Solutions LLC (“PGIM Quantitative Solutions” or the “subadviser”). The Manager pays for the services of PGIM Quantitative Solutions.
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |||
0.75% of average daily net assets up to $2 billion; | 0.75% | |||
0.70% of average daily net assets from $2 billion to $5 billion; | ||||
0.69% of average daily net assets over $5 billion |
The Manager has contractually agreed, through February 28, 2025, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual
44
waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Expense Limitations | |
A | 1.45*% | |
C | 2.69* | |
Z | 1.00* | |
R6 | 0.78 |
*Effective July 1, 2023.
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. The distribution fees are accrued daily and payable monthly.
The Fund’s annual gross and net distribution rates, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | ||
A | 0.30% | 0.30% | ||
C | 1.00 | 1.00 | ||
Z | N/A | N/A | ||
R6 | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales
PGIM Quant Solutions International Equity Fund 45
Notes to Financial Statements (continued)
charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||||
A | $ | 16,427 | $ 7 | |||
C | — | 36 |
PGIM Investments, PIMS and PGIM Quantitative Solutions are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
4. | Other Transactions with Affiliates |
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act that, subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
46
5. | Portfolio Securities |
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |
$203,882,876 | $218,166,259 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | |||||||||||||||
Short-Term Investments - Affiliated Mutual Funds: | ||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||||||
$ — | $29,937,516 | $26,640,475 | $— | $ — | $3,297,041 | 3,297,041 | $94,993 | |||||||||||||||
PGIM Institutional Money Market Fund(1)(b)(wb) | ||||||||||||||||||||||
1,713,797 | 36,467,723 | 37,496,490 | 67 | 394 | 685,491 | 685,833 | 2,819(2) | |||||||||||||||
| ||||||||||||||||||||||
$1,713,797 | $66,405,239 | $64,136,965 | $67 | $394 | $3,982,532 | $97,812 | ||||||||||||||||
|
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.
For the year ended October 31, 2023, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$6,695,488 | $— | $— | $6,695,488 | |||
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows: | ||||||
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$7,500,340 | $18,404,639 | $— | $25,904,979 |
PGIM Quant Solutions International Equity Fund 47
Notes to Financial Statements (continued)
For the year ended October 31, 2023, the Fund had the following amounts of accumulated undistributed earnings on a tax basis:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |
$6,678,482 | $— |
The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation | |||
$173,753,704 | $20,045,358 | $(21,547,519) | $(1,502,161) |
The difference between GAAP and tax basis were primarily due to deferred losses on wash sales, investments in passive foreign investment companies, corporate spin-off adjustments and other GAAP to tax differences.
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |
$19,688,000 | $400,000 |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. | Capital and Ownership |
The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are
48
sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 700,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |||
A | 100,000,000 | |||
B | 5,000,000 | |||
C | 100,000,000 | |||
Z | 180,000,000 | |||
T | 135,000,000 | |||
R6 | 180,000,000 |
The Fund currently does not have any Class B or Class T shares outstanding.
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||||
Z | 90,135 | 5.3% | ||||
R6 | 3,899,956 | 63.4 |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | 1 | 14.5% | ||
Unaffiliated | 2 | 26.0 |
PGIM Quant Solutions International Equity Fund 49
Notes to Financial Statements (continued)
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 186,486 | $ | 1,209,888 | |||||
Shares issued in reinvestment of dividends and distributions | 725,523 | 4,403,922 | ||||||
Shares purchased | (2,382,623 | ) | (15,398,749 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (1,470,614 | ) | (9,784,939 | ) | ||||
Shares issued upon conversion from other share class(es) | 23,446 | 154,741 | ||||||
Shares purchased upon conversion into other share class(es) | (52,571 | ) | (345,682 | ) | ||||
Net increase (decrease) in shares outstanding | (1,499,739 | ) | $ | (9,975,880 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 404,803 | $ | 2,911,633 | |||||
Shares issued in reinvestment of dividends and distributions | 2,336,663 | 17,408,142 | ||||||
Shares purchased | (2,591,505 | ) | (18,139,350 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 149,961 | 2,180,425 | ||||||
Shares issued upon conversion from other share class(es) | 42,923 | 299,039 | ||||||
Shares purchased upon conversion into other share class(es) | (69,077 | ) | (504,976 | ) | ||||
Net increase (decrease) in shares outstanding | 123,807 | $ | 1,974,488 | |||||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 13,168 | $ | 80,989 | |||||
Shares issued in reinvestment of dividends and distributions | 5,223 | 30,087 | ||||||
Shares purchased | (50,815 | ) | (309,324 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (32,424 | ) | (198,248 | ) | ||||
Shares purchased upon conversion into other share class(es) | (24,475 | ) | (151,868 | ) | ||||
Net increase (decrease) in shares outstanding | (56,899 | ) | $ | (350,116 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 33,493 | $ | 238,119 | |||||
Shares issued in reinvestment of dividends and distributions | 30,506 | 215,681 | ||||||
Shares purchased | (66,948 | ) | (415,404 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (2,949 | ) | 38,396 | |||||
Shares purchased upon conversion into other share class(es) | (40,820 | ) | (272,886 | ) | ||||
Net increase (decrease) in shares outstanding | (43,769 | ) | $ | (234,490 | ) |
50
Share Class | Shares | Amount | ||||||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 238,881 | $ | 1,527,659 | |||||
Shares issued in reinvestment of dividends and distributions | 81,704 | 500,026 | ||||||
Shares purchased | (638,583 | ) | (4,184,774 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (317,998 | ) | (2,157,089 | ) | ||||
Shares issued upon conversion from other share class(es) | 49,058 | 325,780 | ||||||
Shares purchased upon conversion into other share class(es) | (17,944 | ) | (118,254 | ) | ||||
Net increase (decrease) in shares outstanding | (286,884 | ) | $ | (1,949,563 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 730,314 | $ | 5,112,983 | |||||
Shares issued in reinvestment of dividends and distributions | 223,258 | 1,676,667 | ||||||
Shares purchased | (918,453 | ) | (6,181,648 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 35,119 | 608,002 | ||||||
Shares issued upon conversion from other share class(es) | 58,857 | 440,756 | ||||||
Shares purchased upon conversion into other share class(es) | (5,659 | ) | (33,978 | ) | ||||
Net increase (decrease) in shares outstanding | 88,317 | $ | 1,014,780 | |||||
Class R6 | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 2,359,691 | $ | 14,924,292 | |||||
Shares issued in reinvestment of dividends and distributions | 273,722 | 1,675,178 | ||||||
Shares purchased | (2,779,963 | ) | (18,470,715 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (146,550 | ) | (1,871,245 | ) | ||||
Shares issued upon conversion from other share class(es) | 20,458 | 135,283 | ||||||
Net increase (decrease) in shares outstanding | (126,092 | ) | $ | (1,735,962 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 1,776,069 | $ | 12,775,571 | |||||
Shares issued in reinvestment of dividends and distributions | 838,529 | 6,297,350 | ||||||
Shares purchased | (3,192,802 | ) | (21,372,410 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (578,204 | ) | (2,299,489 | ) | ||||
Shares issued upon conversion from other share class(es) | 10,841 | 72,045 | ||||||
Net increase (decrease) in shares outstanding | (567,363 | ) | $ | (2,227,444 | ) |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary
PGIM Quant Solutions International Equity Fund 51
Notes to Financial Statements (continued)
funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund did not utilize the SCA during the year ended October 31, 2023.
9. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Active Trading Risk: The Fund actively and frequently trades its portfolio securities. High portfolio turnover results in higher transaction costs, which can affect the Fund’s performance and have adverse tax consequences. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to shareholders will be taxed as ordinary income rather than long-term capital gains compared to investment companies with lower portfolio turnover.
Core Style Risk: The Fund’s core investment style may subject the Fund to risks of both value and growth investing. The portion of the Fund’s portfolio that makes investments pursuant to a growth strategy may be subject to above-average fluctuations as a result of seeking higher than average capital growth. The portion of the Fund’s portfolio that makes investments pursuant to a value strategy may be subject to the risk that the market may not
52
recognize a security’s intrinsic value for long periods of time or at all, or that a stock judged to be undervalued may actually be appropriately priced or overvalued. Issuers of value stocks may have experienced adverse business developments or may be subject to special risks that have caused the stock to be out of favor. If the Fund’s assessment of market conditions or a company’s value is inaccurate, the Fund could suffer losses or produce poor performance relative to other funds. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during periods of economic recovery. Therefore, both styles may over time go in and out of favor with the markets. At times when a style is out of favor, that portion of the portfolio may lag the other portion of the portfolio, which may cause the Fund to underperform the market in general, its benchmark and other mutual funds. Growth and value stocks have historically produced similar long-term results, though each category has periods when it outperforms the other.
Currency Risk: The Fund’s net asset value could decline as a result of changes in exchange rates, which could adversely affect the Fund’s investments in currencies, or in securities that trade in, and receive revenues related to, currencies, or in derivatives that provide exposure to currencies. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset classes. In addition to an individual security losing value, the value of the equity markets or a
PGIM Quant Solutions International Equity Fund 53
Notes to Financial Statements (continued)
sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which
54
could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Capitalization Risk: The Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and mid-cap companies are less stable than the prices of large-cap stocks and may present greater risks. Large capitalization companies as a group could fall out of favor with the market, causing the Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries
PGIM Quant Solutions International Equity Fund 55
Notes to Financial Statements (continued)
directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
10. Recent Regulatory Developments
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
56
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Quant Solutions International Equity Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Quant Solutions International Equity Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 16, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Quant Solutions International Equity Fund 57
Tax Information (unaudited)
For the year ended October 31, 2023, the Fund reports, the maximum amount allowable under Section 854 of the Internal Revenue Code, but not less than, the following percentage of the ordinary income dividends paid as qualified dividend income (QDI):
Fund | QDI | |
PGIM Quant Solutions International Equity Fund | 81.93% |
For the year ended October 31, 2023, the Fund made an election to pass through the maximum amount of the portion of the ordinary income dividends paid derived from foreign source income as well as any foreign taxes paid by the Fund in accordance with Section 853 of the Internal Revenue Code of the following amounts: $841,702 foreign tax credit from recognized foreign source income of $7,061,015.
In January 2024, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of dividends received by you in calendar year 2023.
58
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Quant Solutions International Equity Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
Visit our website at pgim.com/investments
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Quant Solutions International Equity Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
Visit our website at pgim.com/investments
Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer (‘‘PEO’’) (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Quant Solutions International Equity Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
Visit our website at pgim.com/investments
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Quant Solutions International Equity Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Quant Solutions International Equity Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Quant Solutions International Equity Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with PGIM Quantitative Solutions LLC (“PGIM Quantitative Solutions”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and PGIM Quantitative Solutions. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
1PGIM Quant Solutions International Equity Fund is a series of Prudential World Fund, Inc.
PGIM Quant Solutions International Equity Fund
Approval of Advisory Agreements (continued)
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and PGIM Quantitative Solutions, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and PGIM Quantitative Solutions. The Board noted that PGIM Quantitative Solutions is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Quantitative Solutions, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and PGIM Quantitative Solutions, and also considered the qualifications, backgrounds and responsibilities of the PGIM Quantitative Solutions portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and PGIM Quantitative Solutions’ organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments and PGIM Quantitative Solutions. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments and PGIM Quantitative Solutions.
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The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by PGIM Quantitative Solutions, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and PGIM Quantitative Solutions under the management and subadvisory agreements.
Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments to the Fund during the year ended December 31, 2022 exceeded the management fees paid by the Fund, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
PGIM Quant Solutions International Equity Fund
Approval of Advisory Agreements (continued)
Other Benefits to PGIM Investments and PGIM Quantitative Solutions
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Quantitative Solutions and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), and benefits to its reputation as well as other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Quantitative Solutions included its ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments and PGIM Quantitative Solutions were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2022.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
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Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
4th Quartile | 4th Quartile | 4th Quartile | 4th Quartile | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 3rd Quartile |
· | The Board noted that the Fund underperformed its benchmark index over all periods. |
· | The Board also noted that the Fund outperformed its benchmark index for the fourth quarter of 2022 and that Fund outperformed its benchmark index and ranked in the 54th percentile of its peer group in 2021. |
· | The Board considered PGIM Investments’ assertions that the Fund’s benchmark-relative underperformance in 2022 was most notably impacted by its small overweight to Russia at the time of Russia’s invasion of Ukraine and also that macroeconomic factors, including interest rate hikes and elevated inflation, had a significant impact on the markets in 2022, and as those factors stabilize, PGIM Investments anticipates that the Fund’s multi-factor approach, focusing on earnings growth, quality, and value, will deliver improved results from the stock selection models. |
· | The Board requested and PGIM Investments agreed to a contractual cap on Fund expenses that (exclusive of certain fees and expenses) caps total annual operating expenses at 1.45% of average daily net assets for Class A shares, 2.65% of average daily net assets for Class C shares, 1.00% of average daily net assets for Class Z shares, and 0.78% of average daily net assets for Class R6 shares through June 30, 2025. |
· | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
· | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
· | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Quant Solutions International Equity Fund
655 Broad Street Newark, NJ 07102 | ∎ TELEPHONE
(800) 225-1852 | ∎ WEBSITE
pgim.com/investments |
PROXY VOTING
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS Ellen S. Alberding · Kevin J. Bannon · Scott E. Benjamin · Linda W. Bynoe · Barry H. Evans · Keith F. Hartstein · Laurie Simon Hodrick · Stuart S. Parker · Brian K. Reid · Grace C. Torres |
OFFICERS Stuart S. Parker, President · Scott E. Benjamin, Vice President · Christian J. Kelly, Chief Financial Officer · Claudia DiGiacomo, Chief Legal Officer · Andrew Donohue, Chief Compliance Officer · Russ Shupak, Treasurer and Principal Accounting Officer · Kelly Florio, Anti-Money Laundering Compliance Officer · Andrew R. French, Secretary · Melissa Gonzalez, Assistant Secretary · Kelly A. Coyne, Assistant Secretary · Patrick E. McGuinness, Assistant Secretary · Debra Rubano, Assistant Secretary · George Hoyt, Assistant Secretary · Devan Goolsby, Assistant Secretary · Lana Lomuti, Assistant Treasurer · Elyse M. McLaughlin, Assistant Treasurer · Deborah Conway, Assistant Treasurer · Robert W. McCormack, Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISER | PGIM Quantitative Solutions LLC | 655 Broad Street 16th Floor Newark, NJ 07102 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus
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E-DELIVERY
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Quant Solutions International Equity Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM QUANT SOLUTIONS INTERNATIONAL EQUITY FUND
SHARE CLASS | A | C | Z | R6 | ||||||
NASDAQ | PJRAX | PJRCX | PJIZX | PJRQX | ||||||
CUSIP | 743969859 | 743969875 | 743969883 | 743969578 |
MF190E
PGIM EMERGING MARKETS DEBT LOCAL CURRENCY FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM Emerging Markets Debt Local Currency Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Emerging Markets Debt Local Currency Fund
December 15, 2023
PGIM Emerging Markets Debt Local Currency Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||
One Year (%) | Five Years (%) | Ten Years (%) | ||||
Class A | ||||||
(with sales charges) | 9.01 | 0.37 | -1.35 | |||
(without sales charges) | 12.66 | 1.04 | -1.02 | |||
Class C | ||||||
(with sales charges) | 10.76 | 0.26 | -1.77 | |||
(without sales charges) | 11.76 | 0.26 | -1.77 | |||
Class Z | ||||||
(without sales charges) | 13.05 | 1.41 | -0.71 | |||
Class R6 | ||||||
(without sales charges) | 12.88 | 1.43 | -0.65 | |||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | ||||||
13.50 | 0.29 | -1.16 |
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the JP Morgan Government Bond Index-Emerging Markets Global Diversified Index by portraying the initial account values at the beginning of the 10-year period (October 31, 2013) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Emerging Markets Debt Local Currency Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R6 | |||||
Maximum initial sales charge | 3.25% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $500,000 or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.25% | 1.00% | None | None |
Benchmark Definition
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index—The JP Morgan Government Bond Index-Emerging Markets Global Diversified Index, an unmanaged index, is a comprehensive emerging markets debt benchmark that tracks local currency bonds issued by emerging market governments.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Credit Quality expressed as a percentage of total investments as of 10/31/23 (%) | ||
AAA | 4.7 | |
AA | 4.9 | |
A | 21.5 | |
BBB | 39.7 | |
BB | 18.5 | |
B | 0.3 | |
C | 0.1 | |
Not Rated | -1.9 | |
Cash/Cash Equivalents | 12.2 | |
Total | 100.0 |
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch Ratings Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by an NRSRO. Credit ratings are subject to change.
Distributions and Yields as of 10/31/23 | ||||||||
Total Distributions One Year ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||||
Class A | 0.24 | 5.87 | 4.06 | |||||
Class C | 0.21 | 5.33 | -4.40 | |||||
Class Z | 0.26 | 6.50 | 6.05 | |||||
Class R6 | 0.27 | 6.58 | 5.94 |
*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.
PGIM Emerging Markets Debt Local Currency Fund 7
Strategy and Performance Overview*
(unaudited)
How did the Fund perform?
The PGIM Emerging Markets Debt Local Currency Fund’s Class Z shares returned 13.05% in the 12-month reporting period that ended October 31, 2023, underperforming the 13.50% return of the JP Morgan Government Bond Index–Emerging Markets Global Diversified Index (the Index).
What were the market conditions?
· | Emerging markets debt posted positive returns during the reporting period, even as some headwinds emerged toward the end of the period. Reduced rate-hike expectations, declining interest rate volatility, and a softer US dollar provided for a constructive tone throughout much of the reporting period. However, slowing growth in China and Europe, a rise in US Treasury yields, and a resilient US dollar led to mixed performance over the final few months of the reporting period. |
· | While the constructive note of year-end 2022 carried into the beginning of 2023, uncertainty increased in February due to elevated inflation data and then exploded in March as Silicon Valley Bank and Signature Bank failed and Credit Suisse Group AG experienced distress. Concerns about financial instability then led to a negative confidence shock that pressured valuations and created further dispersion between higher-quality and lower-quality issuers. Local interest rates produced positive returns in the first quarter of 2023 amid an uptick in volatility, trading directionally with developed markets, and inflation data mixed across countries. Meanwhile, emerging markets foreign exchanges (EMFX) registered gains, but those were concentrated in Latin America and Europe, with high yielding currencies outperforming. |
· | Emerging markets debt saw positive gains in the second quarter of 2023 as momentum shifted in response to increased clarity concerning inflation, interest rates, and growth, as well as a resolution to the US debt ceiling. Local interest rates performed well during the quarter due to lower-than-expected inflation data in emerging markets and strong emerging markets currencies against the US dollar. EMFX was also positive in the quarter. |
· | In the third quarter of 2023, emerging markets debt had mixed performance, performing well in July with a rally in spreads, led by tightening in high yield, before widening in August amid slowing growth in China and Europe. Local interest rates posted modestly negative total returns, and yields rose. In response to bear steepening of the US yield curve, a majority of emerging markets curves steepened. (Bear steepening occurs when interest rates on long-term bonds rise faster than rates on short-term bonds.) While overall EMFX performance was negative against the US dollar, Latin American currencies gained amid central bank rate cuts. |
· | Over the last month of the reporting period, returns across hard currency, local currency, and corporates were negative, while EMFX exhibited positive returns. The emerging markets debt sovereign sector exhibited positive spread returns in October 2023, with investment-grade bonds lagging while high yield outperformed. Within local interest rates, Europe and Africa/Middle East outperformed in October, while |
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Asia and Latin America underperformed. Meanwhile, EMFX exhibited positive performance in October, as the expectation of peak rates in the US led to a stall in the US dollar rally and some reprieve across emerging markets currencies. |
What worked?
· | Long-duration positioning in South Africa and Indonesia, along with neutral positioning in Hungary and short-duration positioning in Turkey, contributed to the Fund’s performance during the reporting period. (Duration measures the sensitivity of the price—the value of principal—of a bond to a change in interest rates.) |
· | Sovereign debt positioning in Egypt, Turkey, and Brazil also contributed. |
· | In out-of-Index hard currency, positioning in Malaysia, Pakistan, and Argentina contributed. |
· | Overall currency selection was also positive, with overweights relative to the Index to the Hungarian forint and Colombian peso, along with underweights relative to the Index to the Chinese yuan and Korean won, contributing to the Fund’s returns. |
What didn’t work?
· | Long-duration positioning in Brazil, Korea, and Mexico detracted from the Fund’s returns during the reporting period. |
· | Sovereign debt positioning in China, Malaysia, Hungary, and Thailand also detracted from the Fund’s returns. |
· | In out-of-Index hard currency, positioning in Brazil and Jamaica detracted from returns. |
· | Within currencies, an underweight to the Thai baht, along with overweights to the US dollar and the Israeli shekel, detracted from returns. |
Did the Fund use derivatives?
· | Currency positioning in the Fund was partially facilitated by the use of currency forward and option contracts. During the reporting period, the Fund’s currency positioning contributed to relative performance. The Fund also used futures and interest rate swaps, in part, to help manage duration and yield curve exposure, which collectively had a negative impact on performance. (A yield curve is a line graph that illustrates the relationship between the yields and maturities of fixed income securities. It is created by plotting the yields of different maturities for the same type of bonds.) |
Current outlook
· | Higher US interest rates, the strong US dollar, and rising energy prices are testing local-currency emerging markets government bonds. Considering that context, PGIM Fixed Income prefers regional relative value over directional calls and is positioned with overweight allocations relative to the Index to Asia; underweights relative to the Index to Central and Eastern Europe, the Middle East, and Africa; and neutral |
PGIM Emerging Markets Debt Local Currency Fund 9
Strategy and Performance Overview* (continued)
positioning in Latin America. PGIM Fixed Income expects medium-term debt issuances (five to seven years) to outperform short-dated and long-dated segments. Beyond the seven-year horizon, PGIM Fixed Income has a bias toward steeper local-currency yield curves. |
· | If the US Federal Reserve’s rate hikes have ended, PGIM Fixed Income expects emerging markets local currency yields to trade sideways from current levels. Country-level factors should support lower yields, while global macroeconomic forces push yields higher. But given the level of yields, PGIM Fixed Income believes carry (i.e., the return obtained from holding an asset) opportunities can still contribute to positive total returns within the local currency bond market. |
· | PGIM Fixed Income remains cautious on emerging markets currencies and is maintaining underweight positions in Asian, and to a lesser extent European and Latin American, emerging-markets currencies. PGIM Fixed Income believes that US-dollar strength can broaden if China’s stimulus doesn’t prove impactful and continues to worry about lackluster growth in Europe. Historically, the US dollar benefits when US growth outperforms Europe and China. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Emerging Markets Debt Local Currency Fund 11
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Emerging Markets Debt Local Currency Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $ 987.80 | 1.14% | $5.71 | |||||
Hypothetical | $1,000.00 | $1,019.46 | 1.14% | $5.80 | ||||||
Class C | Actual | $1,000.00 | $ 984.20 | 1.89% | $9.45 | |||||
Hypothetical | $1,000.00 | $1,015.68 | 1.89% | $9.60 | ||||||
Class Z | Actual | $1,000.00 | $ 990.20 | 0.73% | $3.66 | |||||
Hypothetical | $1,000.00 | $1,021.53 | 0.73% | $3.72 | ||||||
Class R6 | Actual | $1,000.00 | $ 988.40 | 0.67% | $3.36 | |||||
Hypothetical | $1,000.00 | $1,021.83 | 0.67% | $3.41 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||
LONG-TERM INVESTMENTS 83.3% | ||||||||||||
CORPORATE BONDS 0.9% | ||||||||||||
Brazil 0.1% | ||||||||||||
JSM Global Sarl, | ||||||||||||
Gtd. Notes, 144A | 4.750% | 10/20/30(d) | 200 | $ | 30,000 | |||||||
Jamaica 0.0% | ||||||||||||
Digicel Ltd., | ||||||||||||
Gtd. Notes | 6.750 | 03/01/23(d) | 235 | 5,875 | ||||||||
Malaysia 0.3% | ||||||||||||
Gohl Capital Ltd., | ||||||||||||
Gtd. Notes | 4.250 | 01/24/27 | 200 | 182,810 | ||||||||
South Africa 0.3% | ||||||||||||
Sasol Financing USA LLC, | ||||||||||||
Gtd. Notes | 4.375 | 09/18/26 | 200 | 176,000 | ||||||||
Supranational Bank 0.2% | ||||||||||||
European Investment Bank, | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 3.000 | 05/24/24 | PLN | 600 | 139,591 | |||||||
|
| |||||||||||
TOTAL CORPORATE BONDS | 534,276 | |||||||||||
|
| |||||||||||
SOVEREIGN BONDS 82.4% | ||||||||||||
Angola 0.3% | ||||||||||||
Angolan Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 9.500 | 11/12/25 | 200 | 191,813 | ||||||||
Brazil 4.8% | ||||||||||||
Brazil Minas SPE via State of Minas Gerais, | ||||||||||||
Gov’t. Gtd. Notes | 5.333 | 02/15/28 | 118 | 113,937 | ||||||||
Brazil Notas do Tesouro Nacional, | ||||||||||||
Notes, Series NTNB | 6.000 | 08/15/30 | BRL | 2 | 387,084 | |||||||
Notes, Series NTNB | 6.000 | 05/15/35 | BRL | 1 | 108,257 | |||||||
Notes, Series NTNF | 10.000 | 01/01/25 | BRL | 3 | 650,156 | |||||||
Notes, Series NTNF | 10.000 | 01/01/27 | BRL | 8 | 1,547,782 | |||||||
Notes, Series NTNF | 10.000 | 01/01/31 | BRL | —(r | ) | 36,425 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||
Brazil (cont’d.) | ||||||||||||
Brazilian Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 8.500% | 01/05/24 | BRL | 54 | $ | 10,600 | ||||||
|
| |||||||||||
2,854,241 | ||||||||||||
Chile 0.8% | ||||||||||||
Bonos de la Tesoreria de la Republica en pesos, | ||||||||||||
Bonds | 5.000 | 03/01/35 | CLP | 115,000 | 113,337 | |||||||
Bonds, 144A | 5.000 | 10/01/28 | CLP | 110,000 | 114,814 | |||||||
Bonds, Series 30YR | 6.000 | 01/01/43 | CLP | 135,000 | 143,847 | |||||||
Unsec’d. Notes, 144A | 2.800 | 10/01/33 | CLP | 50,000 | 40,737 | |||||||
Unsec’d. Notes, 144A | 4.700 | 09/01/30 | CLP | 95,000 | 94,594 | |||||||
|
| |||||||||||
507,329 | ||||||||||||
China 3.5% | ||||||||||||
China Government Bond, | ||||||||||||
Bonds, Series 1910 | 3.860 | 07/22/49 | CNH | 680 | 105,319 | |||||||
Bonds, Series INBK | 1.990 | 04/09/25 | CNH | 6,890 | 933,080 | |||||||
Bonds, Series INBK | 2.850 | 06/04/27 | CNH | 3,370 | 465,096 | |||||||
Bonds, Series INBK | 3.270 | 11/19/30 | CNH | 2,890 | 411,513 | |||||||
Unsec’d. Notes, Series INBK | 3.810 | 09/14/50 | CNH | 1,240 | 191,156 | |||||||
|
| |||||||||||
2,106,164 | ||||||||||||
Colombia 4.1% | ||||||||||||
Colombia Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 4.500 | 01/28/26 | 200 | 191,560 | ||||||||
Colombian TES, | ||||||||||||
Bonds, Series B | 5.750 | 11/03/27 | COP | 250,000 | 50,717 | |||||||
Bonds, Series B | 6.000 | 04/28/28 | COP | 1,221,000 | 245,243 | |||||||
Bonds, Series B | 6.250 | 07/09/36 | COP | 1,644,000 | 256,938 | |||||||
Bonds, Series B | 7.000 | 03/26/31 | COP | 2,281,200 | 437,319 | |||||||
Bonds, Series B | 7.000 | 06/30/32 | COP | 2,648,100 | 486,345 | |||||||
Bonds, Series B | 7.250 | 10/18/34 | COP | 1,405,800 | 248,580 | |||||||
Bonds, Series B | 7.250 | 10/26/50 | COP | 210,000 | 31,991 | |||||||
Bonds, Series B | 7.750 | 09/18/30 | COP | 500,000 | 101,775 | |||||||
Bonds, Series B | 9.250 | 05/28/42 | COP | 1,094,100 | 211,573 | |||||||
Bonds, Series G | 7.000 | 03/26/31 | COP | 759,800 | 145,535 | |||||||
Sr. Unsec’d. Notes, Series UVR | 3.750 | 06/16/49 | COP | 230,888 | 45,366 | |||||||
|
| |||||||||||
2,452,942 |
See Notes to Financial Statements.
14
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||
Czech Republic 4.9% | ||||||||||||
Czech Republic Government Bond, | ||||||||||||
Bonds, Series 049 | 4.200% | 12/04/36 | CZK | 2,950 | $ | 120,478 | ||||||
Bonds, Series 078 | 2.500 | 08/25/28 | CZK | 2,100 | 82,632 | |||||||
Bonds, Series 089 | 2.400 | 09/17/25 | CZK | 3,040 | 125,479 | |||||||
Bonds, Series 094 | 0.950 | 05/15/30 | CZK | 8,770 | 301,638 | |||||||
Bonds, Series 100 | 0.250 | 02/10/27 | CZK | 18,980 | 711,821 | |||||||
Bonds, Series 103 | 2.000 | 10/13/33 | CZK | 9,290 | 315,698 | |||||||
Bonds, Series 105 | 2.750 | 07/23/29 | CZK | 16,250 | 637,444 | |||||||
Bonds, Series 121 | 1.200 | 03/13/31 | CZK | 11,920 | 405,779 | |||||||
Bonds, Series 130 | 0.050 | 11/29/29 | CZK | 6,050 | 199,047 | |||||||
|
| |||||||||||
2,900,016 | ||||||||||||
Dominican Republic 0.3% | ||||||||||||
Dominican Republic International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 5.950 | 01/25/27 | 200 | 192,182 | ||||||||
Hungary 6.0% | ||||||||||||
Hungary Government Bond, | ||||||||||||
Bonds, Series 25/C | 1.000 | 11/26/25 | HUF | 181,520 | 439,547 | |||||||
Bonds, Series 26/D | 2.750 | 12/22/26 | HUF | 226,920 | 540,563 | |||||||
Bonds, Series 26/E | 1.500 | 04/22/26 | HUF | 198,840 | 474,663 | |||||||
Bonds, Series 26/F | 1.500 | 08/26/26 | HUF | 206,700 | 482,767 | |||||||
Bonds, Series 27/A | 3.000 | 10/27/27 | HUF | 42,680 | 100,214 | |||||||
Bonds, Series 28/A | 6.750 | 10/22/28 | HUF | 134,280 | 360,121 | |||||||
Bonds, Series 28/B | 4.500 | 03/23/28 | HUF | 144,380 | 355,672 | |||||||
Bonds, Series 29/A | 2.000 | 05/23/29 | HUF | 128,070 | 271,766 | |||||||
Bonds, Series 31/A | 3.250 | 10/22/31 | HUF | 33,070 | 69,778 | |||||||
Bonds, Series 32/A | 4.750 | 11/24/32 | HUF | 45,870 | 104,463 | |||||||
Bonds, Series 34/A | 2.250 | 06/22/34 | HUF | 55,760 | 98,315 | |||||||
Bonds, Series 38/A | 3.000 | 10/27/38 | HUF | 21,890 | 36,356 | |||||||
Bonds, Series 51/G | 4.000 | 04/28/51 | HUF | 29,330 | 48,006 | |||||||
Hungary Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 05/22/28 | 200 | 198,414 | ||||||||
|
| |||||||||||
3,580,645 | ||||||||||||
Indonesia 12.0% | ||||||||||||
Indonesia Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 1.400 | 10/30/31 | EUR | 100 | 82,102 | |||||||
Indonesia Treasury Bond, | ||||||||||||
Bonds, Series 056 | 8.375 | 09/15/26 | IDR | 9,696,000 | 630,835 | |||||||
Bonds, Series 059 | 7.000 | 05/15/27 | IDR | 7,548,000 | 473,977 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Indonesia (cont’d.) | ||||||||||||||||
Indonesia Treasury Bond, (cont’d.) | ||||||||||||||||
Bonds, Series 064 | 6.125% | 05/15/28 | IDR | 8,837,000 | $ | 535,449 | ||||||||||
Bonds, Series 068 | 8.375 | 03/15/34 | IDR | 8,238,000 | 560,869 | |||||||||||
Bonds, Series 070 | 8.375 | 03/15/24 | IDR | 1,410,000 | 89,207 | |||||||||||
Bonds, Series 071 | 9.000 | 03/15/29 | IDR | 3,640,000 | 248,281 | |||||||||||
Bonds, Series 072 | 8.250 | 05/15/36 | IDR | 3,843,000 | 261,280 | |||||||||||
Bonds, Series 073 | 8.750 | 05/15/31 | IDR | 6,870,000 | 470,326 | |||||||||||
Bonds, Series 075 | 7.500 | 05/15/38 | IDR | 3,754,000 | 241,641 | |||||||||||
Bonds, Series 078 | 8.250 | 05/15/29 | IDR | 6,284,000 | 416,164 | |||||||||||
Bonds, Series 079 | 8.375 | 04/15/39 | IDR | 1,850,000 | 128,108 | |||||||||||
Bonds, Series 081 | 6.500 | 06/15/25 | IDR | 993,000 | 61,949 | |||||||||||
Bonds, Series 082 | 7.000 | 09/15/30 | IDR | 8,415,000 | 527,626 | |||||||||||
Bonds, Series 087 | 6.500 | 02/15/31 | IDR | 7,837,000 | 476,091 | |||||||||||
Bonds, Series 092 | 7.125 | 06/15/42 | IDR | 1,354,000 | 84,279 | |||||||||||
Bonds, Series 095 | 6.375 | 08/15/28 | IDR | 11,784,000 | 721,803 | |||||||||||
Bonds, Series 096 | 7.000 | 02/15/33 | IDR | 18,174,000 | 1,138,378 | |||||||||||
|
| |||||||||||||||
7,148,365 | ||||||||||||||||
Ivory Coast 0.2% | ||||||||||||||||
Ivory Coast Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.250 | 03/22/30 | EUR | 140 | 121,840 | |||||||||||
Malaysia 4.4% | ||||||||||||||||
Malaysia Government Bond, | ||||||||||||||||
Bonds, Series 115 | 3.955 | 09/15/25 | MYR | 140 | 29,592 | |||||||||||
Bonds, Series 118 | 3.882 | 03/14/25 | MYR | 567 | 119,676 | |||||||||||
Bonds, Series 120 | 4.065 | 06/15/50 | MYR | 1,886 | 365,562 | |||||||||||
Bonds, Series 219 | 3.885 | 08/15/29 | MYR | 3,515 | 733,358 | |||||||||||
Bonds, Series 222 | 4.696 | 10/15/42 | MYR | 755 | 164,075 | |||||||||||
Bonds, Series 317 | 4.762 | 04/07/37 | MYR | 842 | 185,733 | |||||||||||
Bonds, Series 411 | 4.232 | 06/30/31 | MYR | 280 | 59,210 | |||||||||||
Bonds, Series 413 | 3.844 | 04/15/33 | MYR | 390 | 79,920 | |||||||||||
Bonds, Series 417 | 3.899 | 11/16/27 | MYR | 1,835 | 385,995 | |||||||||||
Bonds, Series 419 | 3.828 | 07/05/34 | MYR | 810 | 164,865 | |||||||||||
Bonds, Series 519 | 3.757 | 05/22/40 | MYR | 1,272 | 246,252 | |||||||||||
Malaysia Government Investment Issue, | ||||||||||||||||
Bonds, Series 121 | 3.447 | 07/15/36 | MYR | 430 | 83,413 | |||||||||||
|
| |||||||||||||||
2,617,651 |
See Notes to Financial Statements.
16
Description | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Mexico 10.0% | ||||||||||||||||
Mexican Bonos, | ||||||||||||||||
Bonds, Series M | 5.500% | 03/04/27 | MXN | 30 | $ | 143,701 | ||||||||||
Bonds, Series M | 7.500 | 05/26/33 | MXN | 35 | 162,161 | |||||||||||
Bonds, Series M | 7.750 | 05/29/31 | MXN | 229 | 1,107,354 | |||||||||||
Bonds, Series M | 8.000 | 11/07/47 | MXN | 68 | 306,099 | |||||||||||
Bonds, Series M | 10.000 | 11/20/36 | MXN | 78 | 428,770 | |||||||||||
Sr. Unsec’d. Notes, Series M | 7.750 | 11/23/34 | MXN | 120 | 559,379 | |||||||||||
Sr. Unsec’d. Notes, Series M | 7.750 | 11/13/42 | MXN | 46 | 204,127 | |||||||||||
Sr. Unsec’d. Notes, Series M | 8.500 | 11/18/38 | MXN | 73 | 353,803 | |||||||||||
Mexican Udibonos, | ||||||||||||||||
Bonds, Series S | 2.750 | 11/27/31 | MXN | 4 | 154,064 | |||||||||||
Bonds, Series S | 4.500 | 12/04/25 | MXN | 60 | 2,530,171 | |||||||||||
|
| |||||||||||||||
5,949,629 | ||||||||||||||||
Peru 2.8% | ||||||||||||||||
Peru Government Bond, | ||||||||||||||||
Bonds | 5.940 | 02/12/29 | PEN | 800 | 199,425 | |||||||||||
Bonds | 6.900 | 08/12/37 | PEN | 260 | 62,835 | |||||||||||
Bonds | 6.950 | 08/12/31 | PEN | 190 | 48,168 | |||||||||||
Sr. Unsec’d. Notes | 5.350 | 08/12/40 | PEN | 540 | 109,147 | |||||||||||
Sr. Unsec’d. Notes | 5.400 | 08/12/34 | PEN | 2,610 | 568,113 | |||||||||||
Sr. Unsec’d. Notes | 6.150 | 08/12/32 | PEN | 2,138 | 508,361 | |||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.850 | 02/12/42 | PEN | 245 | 58,191 | |||||||||||
Sr. Unsec’d. Notes | 6.900 | 08/12/37 | PEN | 7 | 1,692 | |||||||||||
Sr. Unsec’d. Notes | 6.950 | 08/12/31 | PEN | 478 | 121,182 | |||||||||||
|
| |||||||||||||||
1,677,114 | ||||||||||||||||
Philippines 0.1% | ||||||||||||||||
Philippine Government Bond, | ||||||||||||||||
Bonds, Series 1060 | 3.625 | 09/09/25 | PHP | 5,600 | 92,732 | |||||||||||
Poland 7.6% | ||||||||||||||||
Republic of Poland Government Bond, | ||||||||||||||||
Bonds, Series 0428 | 2.750 | 04/25/28 | PLN | 1,480 | 317,546 | |||||||||||
Bonds, Series 0432 | 1.750 | 04/25/32 | PLN | 710 | 125,540 | |||||||||||
Bonds, Series 0725 | 3.250 | 07/25/25 | PLN | 4,301 | 988,749 | |||||||||||
Bonds, Series 0726 | 2.500 | 07/25/26 | PLN | 3,925 | 871,056 | |||||||||||
Bonds, Series 0727 | 2.500 | 07/25/27 | PLN | 2,580 | 558,755 | |||||||||||
Bonds, Series 0728 | 7.500 | 07/25/28 | PLN | 830 | 214,635 | |||||||||||
Bonds, Series 1026 | 0.250 | 10/25/26 | PLN | 1,660 | 342,357 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 17
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal | Value | ||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||
Poland (cont’d.) | ||||||||||||
Republic of Poland Government Bond, (cont’d.) | ||||||||||||
Bonds, Series 1029 | 2.750% | 10/25/29 | PLN | 2,420 | $ | 500,351 | ||||||
Bonds, Series 1030 | 1.250 | 10/25/30 | PLN | 3,350 | 608,072 | |||||||
|
| |||||||||||
4,527,061 | ||||||||||||
Romania 3.3% | ||||||||||||
Romania Government Bond, | ||||||||||||
Bonds, Series 05YR | 4.250 | 04/28/36 | RON | 1,245 | 203,073 | |||||||
Bonds, Series 07YR | 2.500 | 10/25/27 | RON | 1,170 | 214,267 | |||||||
Bonds, Series 07YR | 3.250 | 04/29/24 | RON | 750 | 157,626 | |||||||
Bonds, Series 07YR | 4.850 | 04/22/26 | RON | 2,680 | 551,784 | |||||||
Bonds, Series 08YR | 7.350 | 04/28/31 | RON | 540 | 117,127 | |||||||
Bonds, Series 10YR | 6.700 | 02/25/32 | RON | 1,050 | 218,443 | |||||||
Bonds, Series 15YR | 3.650 | 09/24/31 | RON | 1,270 | 217,432 | |||||||
Romanian Government International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 3.000 | 02/27/27 | 220 | 199,016 | ||||||||
Sr. Unsec’d. Notes, EMTN | 2.125 | 03/07/28 | EUR | 80 | 73,353 | |||||||
|
| |||||||||||
1,952,121 | ||||||||||||
Serbia 0.9% | ||||||||||||
Serbia International Bond, | ||||||||||||
Sr. Unsec’d. Notes | 3.125 | 05/15/27 | EUR | 410 | 392,326 | |||||||
Serbia Treasury Bonds, | ||||||||||||
Bonds, Series 07YR | 4.500 | 01/11/26 | RSD | 9,460 | 83,551 | |||||||
Bonds, Series 12.5 | 4.500 | 08/20/32 | RSD | 6,240 | 48,874 | |||||||
|
| |||||||||||
524,751 | ||||||||||||
South Africa 11.5% | ||||||||||||
Republic of South Africa Government Bond, | ||||||||||||
Sr. Unsec’d. Notes, Series 2030 | 8.000 | 01/31/30 | ZAR | 22,285 | 1,051,933 | |||||||
Sr. Unsec’d. Notes, Series 2032 | 8.250 | 03/31/32 | ZAR | 28,025 | 1,236,089 | |||||||
Sr. Unsec’d. Notes, Series 2035 | 8.875 | 02/28/35 | ZAR | 13,864 | 591,816 | |||||||
Sr. Unsec’d. Notes, Series 2037 | 8.500 | 01/31/37 | ZAR | 12,256 | 485,763 | |||||||
Sr. Unsec’d. Notes, Series 2040 | 9.000 | 01/31/40 | ZAR | 9,770 | 388,802 | |||||||
Sr. Unsec’d. Notes, Series 2048 | 8.750 | 02/28/48 | ZAR | 2,955 | 110,863 | |||||||
Sr. Unsec’d. Notes, Series R186 | 10.500 | 12/21/26 | ZAR | 35,619 | 1,968,782 | |||||||
Sr. Unsec’d. Notes, Series R209 | 6.250 | 03/31/36 | ZAR | 3,850 | 127,634 |
See Notes to Financial Statements.
18
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
South Africa (cont’d.) | ||||||||||||||||
Republic of South Africa Government Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes, Series R213 | 7.000% | 02/28/31 | ZAR | 10,845 | $ | 460,036 | ||||||||||
Sr. Unsec’d. Notes, Series R214 | 6.500 | 02/28/41 | ZAR | 14,390 | 442,037 | |||||||||||
|
| |||||||||||||||
6,863,755 | ||||||||||||||||
Thailand 4.8% | ||||||||||||||||
Thailand Government Bond, | ||||||||||||||||
Bonds | 1.600 | 12/17/29 | THB | 3,885 | 99,410 | |||||||||||
Bonds | 2.000 | 06/17/42 | THB | 2,080 | 44,622 | |||||||||||
Bonds | 2.875 | 12/17/28 | THB | 12,015 | 332,709 | |||||||||||
Bonds | 2.875 | 06/17/46 | THB | 3,065 | 72,462 | |||||||||||
Bonds | 3.300 | 06/17/38 | THB | 8,815 | 235,519 | |||||||||||
Bonds | 3.400 | 06/17/36 | THB | 9,585 | 262,180 | |||||||||||
Sr. Unsec’d. Notes | 1.585 | 12/17/35 | THB | 19,650 | 445,735 | |||||||||||
Sr. Unsec’d. Notes | 1.600 | 06/17/35 | THB | 2,700 | 61,958 | |||||||||||
Sr. Unsec’d. Notes | 1.875 | 06/17/49 | THB | 1,063 | 19,938 | |||||||||||
Sr. Unsec’d. Notes | 2.000 | 12/17/31 | THB | 11,505 | 291,600 | |||||||||||
Sr. Unsec’d. Notes | 3.350 | 06/17/33 | THB | 6,230 | 174,617 | |||||||||||
Sr. Unsec’d. Notes | 3.650 | 06/20/31 | THB | 13,094 | 375,619 | |||||||||||
Sr. Unsec’d. Notes | 3.775 | 06/25/32 | THB | 15,085 | 435,034 | |||||||||||
|
| |||||||||||||||
2,851,403 | ||||||||||||||||
Uruguay 0.1% | ||||||||||||||||
Uruguay Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 8.500 | 03/15/28 | UYU | 1,870 | 44,478 | |||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS | 49,156,232 | |||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 49,690,508 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 13.8% | ||||||||||||||||
AFFILIATED MUTUAL FUND 9.4% | ||||||||||||||||
PGIM Core Government Money Market Fund | ||||||||||||||||
(cost $5,602,977)(wb) | 5,602,977 | 5,602,977 | ||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 19
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
U.S. TREASURY OBLIGATION(n) 4.4% | ||||||||||||||||
U.S. Treasury Bills | ||||||||||||||||
(cost $2,632,854) | 5.433% | 04/18/24 | 2,700 | $ | 2,632,615 | |||||||||||
|
| |||||||||||||||
OPTIONS PURCHASED*~ 0.0% | ||||||||||||||||
(cost $30,356) | 16,101 | |||||||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 8,251,693 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN 97.1% | 57,942,201 | |||||||||||||||
|
| |||||||||||||||
OPTIONS WRITTEN*~ (0.4)% | ||||||||||||||||
(premiums received $299,427) | (266,517 | ) | ||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN 96.7% | 57,675,684 | |||||||||||||||
Other assets in excess of liabilities(z) 3.3% | 1,957,599 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 59,633,283 | ||||||||||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
AUD—Australian Dollar
BRL—Brazilian Real
CLP—Chilean Peso
CNH—Chinese Renminbi
COP—Colombian Peso
CZK—Czech Koruna
EGP—Egyptian Pound
EUR—Euro
HUF—Hungarian Forint
IDR—Indonesian Rupiah
ILS—Israeli Shekel
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RON—Romanian Leu
RSD—Serbian Dinar
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
TWD—New Taiwanese Dollar
See Notes to Financial Statements.
20
USD—US Dollar
UYU—Uruguayan Peso
ZAR—South African Rand
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
A—Annual payment frequency for swaps
BARC—Barclays Bank PLC
BNP—BNP Paribas S.A.
BNYM—Bank of New York Mellon
BOA—Bank of America, N.A.
BROIS—Brazil Overnight Index Swap
BUBOR—Budapest Interbank Offered Rate
CDX—Credit Derivative Index
CGM—Citigroup Global Markets, Inc.
CITI—Citibank, N.A.
CLOIS—Sinacofi Chile Interbank Rate Average
COOIS—Colombia Overnight Interbank Reference Rate
DB—Deutsche Bank AG
EMTN—Euro Medium Term Note
GSI—Goldman Sachs International
HSBC—HSBC Bank PLC
JIBAR—Johannesburg Interbank Agreed Rate
JPM—JPMorgan Chase Bank N.A.
JPS—J.P. Morgan Securities LLC
KLIBOR—Kuala Lumpur Interbank Offered Rate
KWCDC—Korean Won Certificate of Deposit
M—Monthly payment frequency for swaps
MSI—Morgan Stanley & Co International PLC
OTC—Over-the-counter
PRIBOR—Prague Interbank Offered Rate
Q—Quarterly payment frequency for swaps
S—Semiannual payment frequency for swaps
SCB—Standard Chartered Bank
SOFR—Secured Overnight Financing Rate
SSB—State Street Bank & Trust Company
T—Swap payment upon termination
TD—The Toronto-Dominion Bank
THOR—Thai Overnight Repurchase Rate
UAG—UBS AG
WIBOR—Warsaw Interbank Offered Rate
* | Non-income producing security. |
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
~ | See tables subsequent to the Schedule of Investments for options detail. Options with maturity dates greater than one year from date of acquisition would be considered long-term investments. |
(d) | Represents issuer in default on interest payments and/or principal repayment. Non-income producing security. Such securities may be post-maturity. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(r) | Principal or notional amount is less than $500 par. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
(z) | Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments: |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 21
Schedule of Investments (continued)
as of October 31, 2023
Options Purchased:
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs ILS | Call | MSI | 02/16/24 | 5.50 | — | EUR | 289 | $ | 102 | |||||||||||||||
Currency Option EUR vs PLN | Call | HSBC | 11/02/23 | 5.40 | — | EUR | 142 | — | ||||||||||||||||
Currency Option EUR vs PLN | Call | MSI | 11/16/23 | 5.00 | — | EUR | 300 | 4 | ||||||||||||||||
Currency Option EUR vs PLN | Call | CITI | 11/27/23 | 5.10 | — | EUR | 140 | 3 | ||||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/02/23 | 1,100.00 | — | 481 | — | |||||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/27/23 | 1,150.00 | — | 481 | 10 | |||||||||||||||||
Currency Option USD vs CNH | Call | JPM | 11/08/23 | 7.30 | — | 426 | 2,300 | |||||||||||||||||
Currency Option USD vs CNH | Call | HSBC | 11/08/23 | 7.80 | — | 426 | 4 | |||||||||||||||||
Currency Option USD vs JPY | Call | JPM | 11/08/23 | 150.00 | — | 357 | 4,321 | |||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/01/23 | 17.85 | — | 269 | 2,491 | |||||||||||||||||
Currency Option USD vs MXN | Call | MSI | 11/01/23 | 20.00 | — | 269 | — | |||||||||||||||||
Currency Option USD vs MXN | Call | GSI | 11/16/23 | 22.00 | — | 301 | 6 | |||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/29/23 | 22.00 | — | 269 | 26 | |||||||||||||||||
Currency Option USD vs ZAR | Call | JPM | 12/01/23 | 19.75 | — | 975 | 3,328 | |||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 360.00 | — | EUR | 144 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 360.00 | — | EUR | 144 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | MSI | 11/02/23 | 360.00 | — | EUR | 297 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/27/23 | 360.00 | — | EUR | 142 | 2 | ||||||||||||||||
Currency Option EUR vs ILS | Put | MSI | 02/16/24 | 3.80 | — | EUR | 289 | 356 | ||||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/02/23 | 4.20 | — | EUR | 142 | — | ||||||||||||||||
Currency Option EUR vs PLN | Put | MSI | 11/09/23 | 4.20 | — | EUR | 148 | 1 | ||||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/30/23 | 4.20 | — | EUR | 142 | 10 | ||||||||||||||||
Currency Option USD vs BRL | Put | GSI | 11/08/23 | 4.50 | — | 296 | — | |||||||||||||||||
Currency Option USD vs BRL | Put | CITI | 11/16/23 | 4.00 | — | 300 | — | |||||||||||||||||
Currency Option USD vs BRL | Put | MSI | 12/27/23 | 4.30 | — | 695 | 14 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/02/23 | 3,500.00 | — | 107 | — | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 3,600.00 | — | 298 | — |
See Notes to Financial Statements.
22
Options Purchased (continued):
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 3,600.00 | — | 298 | $ | — | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/27/23 | 3,600.00 | — | 107 | 3 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/29/23 | 3,500.00 | — | 298 | 3 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 12/12/23 | 3,200.00 | — | 957 | 2 | |||||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 290.00 | — | 658 | — | |||||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 300.00 | — | 348 | — | |||||||||||||||||
Currency Option USD vs HUF | Put | MSI | 11/20/23 | 350.00 | — | 658 | 571 | |||||||||||||||||
Currency Option USD vs HUF | Put | MSI | 11/20/23 | 360.00 | — | 348 | 2,461 | |||||||||||||||||
Currency Option USD vs MXN | Put | JPM | 11/09/23 | 16.00 | — | 298 | — | |||||||||||||||||
Currency Option USD vs MXN | Put | HSBC | 11/09/23 | 16.75 | — | 148 | 3 | |||||||||||||||||
Currency Option USD vs MXN | Put | MSI | 11/10/23 | 15.00 | — | 463 | — | |||||||||||||||||
Currency Option USD vs PLN | Put | JPM | 11/01/23 | 3.45 | — | 589 | — | |||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 11/09/23 | 16.75 | — | 298 | 1 | |||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 16.75 | — | 796 | 79 | |||||||||||||||||
|
| |||||||||||||||||||||||
Total Options Purchased (cost $30,356) | $ | 16,101 | ||||||||||||||||||||||
|
|
Options Written:
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs ILS | Call | MSI | 02/16/24 | 4.48 | — | EUR | 289 | $ | (2,958 | ) | ||||||||||||||
Currency Option EUR vs PLN | Call | HSBC | 11/02/23 | 4.70 | — | EUR | 142 | — | ||||||||||||||||
Currency Option EUR vs PLN | Call | MSI | 11/16/23 | 4.47 | — | EUR | 300 | (1,452 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 23
Schedule of Investments (continued)
as of October 31, 2023
Options Written (continued):
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs PLN | Call | CITI | 11/27/23 | 4.50 | — | EUR | 140 | $ | (645 | ) | ||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/27/23 | 930.00 | — | 481 | (3,202 | ) | ||||||||||||||||
Currency Option USD vs CNH | Call | HSBC | 11/08/23 | 7.30 | — | 426 | (2,300 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | MSI | 11/01/23 | 17.85 | — | 269 | (2,491 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | GSI | 11/16/23 | 18.00 | — | 301 | (4,015 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/29/23 | 18.20 | — | 269 | (3,465 | ) | ||||||||||||||||
Currency Option USD vs ZAR | Call | JPM | 12/01/23 | 20.50 | — | 975 | (1,131 | ) | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 387.00 | — | EUR | 144 | (1,671 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 388.00 | — | EUR | 144 | (2,059 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | MSI | 11/02/23 | 388.00 | — | EUR | 297 | (4,246 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/27/23 | 383.00 | — | EUR | 142 | (985 | ) | |||||||||||||||
Currency Option EUR vs PLN | Put | MSI | 11/09/23 | 4.57 | — | EUR | 148 | (4,033 | ) | |||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/30/23 | 4.45 | — | EUR | 142 | (978 | ) | |||||||||||||||
Currency Option USD vs BRL | Put | GSI | 11/08/23 | 5.05 | — | 296 | (2,633 | ) | ||||||||||||||||
Currency Option USD vs BRL | Put | CITI | 11/16/23 | 5.00 | — | 300 | (2,056 | ) | ||||||||||||||||
Currency Option USD vs BRL | Put | MSI | 12/27/23 | 5.35 | — | 695 | (42,547 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 4,150.00 | — | 298 | (4,006 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 4,200.00 | — | 298 | (6,492 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/27/23 | 4,100.00 | — | 107 | (1,400 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/29/23 | 4,000.00 | — | 298 | (1,626 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 12/12/23 | 4,700.00 | — | 957 | (125,452 | ) |
See Notes to Financial Statements.
24
Options Written (continued):
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 350.00 | — | 658 | $ | (571 | ) | |||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 360.00 | — | 348 | (2,461 | ) | ||||||||||||||||
Currency Option USD vs MXN | Put | MSI | 11/10/23 | 18.70 | — | 463 | (17,831 | ) | ||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 18.75 | — | 298 | (5,483 | ) | ||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 19.25 | — | 498 | (18,328 | ) | ||||||||||||||||
|
| |||||||||||||||||||||||
Total Options Written (premiums received $299,427) | $ | (266,517 | ) | |||||||||||||||||||||
|
|
Futures contracts outstanding at October 31, 2023:
Number of Contracts | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Short Positions: |
| |||||||||||||||||||||
2 | 2 Year U.S. Treasury Notes | Dec. 2023 | $ | 404,844 | $ | 1,842 | ||||||||||||||||
3 | 5 Year Euro-Bobl | Dec. 2023 | 369,139 | 3,438 | ||||||||||||||||||
8 | 5 Year U.S. Treasury Notes | Dec. 2023 | 835,812 | 13,553 | ||||||||||||||||||
1 | 10 Year Euro-Bund | Dec. 2023 | 136,484 | 2,449 | ||||||||||||||||||
|
| |||||||||||||||||||||
$ | 21,282 | |||||||||||||||||||||
|
|
Forward foreign currency exchange contracts outstanding at October 31, 2023:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts: |
| |||||||||||||||||||||||||
Australian Dollar, | ||||||||||||||||||||||||||
Expiring 01/19/24 | JPM | AUD | 224 | $ | 142,000 | $ | 142,358 | $ | 358 | $ | — | |||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 1,587 | 313,000 | 314,663 | 1,663 | — | |||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 1,284 | 248,000 | 254,628 | 6,628 | — | |||||||||||||||||||
Expiring 11/03/23 | DB | BRL | 14,593 | 2,953,879 | 2,892,981 | — | (60,898 | ) | ||||||||||||||||||
Expiring 11/03/23 | GSI | BRL | 771 | 148,000 | 152,777 | 4,777 | — | |||||||||||||||||||
Expiring 11/03/23 | TD | BRL | 769 | 147,000 | 152,429 | 5,429 | — | |||||||||||||||||||
Expiring 12/04/23 | BNP | BRL | 16,889 | 3,353,608 | 3,335,917 | — | (17,691 | ) | ||||||||||||||||||
Expiring 12/04/23 | BNYM | BRL | 868 | 172,763 | 171,435 | — | (1,328 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 25
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Chilean Peso, | TD | CLP | 149,040 | $ | 160,000 | $ | 166,016 | $ | 6,016 | $ | — | |||||||||||||||||||||||
Expiring 12/20/23 | ||||||||||||||||||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||||||||||
Expiring 11/16/23 | BNP | CNH | 2,945 | 405,943 | 401,669 | — | (4,274 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | BOA | CNH | 6,378 | 877,000 | 869,807 | — | (7,193 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | CITI | CNH | 2,149 | 296,115 | 293,098 | — | (3,017 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | GSI | CNH | 4,743 | 649,000 | 646,786 | — | (2,214 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | GSI | CNH | 4,552 | 626,000 | 620,844 | — | (5,156 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 6,899 | 947,000 | 940,795 | — | (6,205 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 3,617 | 499,000 | 493,247 | — | (5,753 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 2,077 | 286,000 | 283,217 | — | (2,783 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | JPM | CNH | 3,124 | 426,000 | 426,015 | 15 | — | |||||||||||||||||||||||||||
Expiring 11/16/23 | SSB | CNH | 2,004 | 273,813 | 273,339 | — | (474 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | SSB | CNH | 1,098 | 150,872 | 149,686 | — | (1,186 | ) | ||||||||||||||||||||||||||
Colombian Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | COP | 4,219,597 | 990,411 | 1,013,671 | 23,260 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | COP | 934,753 | 222,825 | 224,554 | 1,729 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | COP | 965,892 | 218,346 | 232,036 | 13,690 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | DB | COP | 840,020 | 207,874 | 201,797 | — | (6,077 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | COP | 2,615,183 | 649,049 | 628,243 | — | (20,806 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | TD | COP | 2,801,517 | 686,815 | 673,007 | — | (13,808 | ) | ||||||||||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | DB | CZK | 9,182 | 392,000 | 394,877 | 2,877 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | CZK | 13,515 | 576,888 | 581,203 | 4,315 | — | |||||||||||||||||||||||||||
Egyptian Pound, | ||||||||||||||||||||||||||||||||||
Expiring 01/10/24 | CITI | EGP | 1,981 | 61,346 | 58,645 | — | (2,701 | ) | ||||||||||||||||||||||||||
Expiring 01/10/24 | CITI | EGP | 703 | 20,562 | 20,800 | 238 | — | |||||||||||||||||||||||||||
Expiring 01/10/24 | MSI | EGP | 4,080 | 121,618 | 120,763 | — | (855 | ) | ||||||||||||||||||||||||||
Euro, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | EUR | 647 | 690,750 | 687,623 | — | (3,127 | ) | ||||||||||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | CITI | HUF | 14,606 | 39,759 | 39,951 | 192 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | DB | HUF | 115,837 | 318,000 | 316,847 | — | (1,153 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | SSB | HUF | 118,299 | 327,000 | 323,582 | — | (3,418 | ) | ||||||||||||||||||||||||||
Indian Rupee, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | INR | 79,699 | 955,000 | 955,583 | 583 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | INR | 36,018 | 431,000 | 431,850 | 850 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 71,781 | 862,000 | 860,646 | — | (1,354 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 61,967 | 743,684 | 742,979 | — | (705 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 43,900 | 526,000 | 526,356 | 356 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | INR | 79,730 | 955,000 | 955,961 | 961 | — | |||||||||||||||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNYM | IDR | 1,100,000 | 70,158 | 68,999 | — | (1,159 | ) |
See Notes to Financial Statements.
26
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Indonesian Rupiah (cont’d.), | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | IDR | 6,073,335 | $ | 394,306 | $ | 380,956 | $ | — | $ | (13,350 | ) | ||||||||||||||||||||||
Expiring 12/20/23 | MSI | IDR | 2,977,099 | 186,945 | 186,741 | — | (204 | ) | ||||||||||||||||||||||||||
Japanese Yen, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | JPY | 53,112 | 362,434 | 355,154 | — | (7,280 | ) | ||||||||||||||||||||||||||
Malaysian Ringgit, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MYR | 15,973 | 3,434,665 | 3,363,654 | — | (71,011 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | MYR | 658 | 140,000 | 138,665 | — | (1,335 | ) | ||||||||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MXN | 5,697 | 312,000 | 313,388 | 1,388 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MXN | 2,504 | 136,242 | 137,718 | 1,476 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | MXN | 2,743 | 155,799 | 150,885 | — | (4,914 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | MXN | 3,473 | 199,803 | 191,036 | — | (8,767 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | MXN | 2,329 | 125,763 | 128,090 | 2,327 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | MXN | 2,751 | 148,000 | 151,348 | 3,348 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | MXN | 3,174 | 174,441 | 174,572 | 131 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SSB | MXN | 2,741 | 148,000 | 150,798 | 2,798 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SSB | MXN | 2,732 | 148,000 | 150,305 | 2,305 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | MXN | 5,474 | 300,000 | 301,097 | 1,097 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | MXN | 5,447 | 297,000 | 299,649 | 2,649 | — | |||||||||||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 1,000 | 268,565 | 259,783 | — | (8,782 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PEN | 999 | 267,870 | 259,459 | — | (8,411 | ) | ||||||||||||||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PHP | 52,858 | 931,000 | 930,820 | — | (180 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | PHP | 17,789 | 314,000 | 313,257 | — | (743 | ) | ||||||||||||||||||||||||||
Romanian Leu, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BARC | RON | 2,184 | 466,344 | 464,838 | — | (1,506 | ) | ||||||||||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | SGD | 741 | 544,000 | 542,371 | — | (1,629 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | SGD | 298 | 218,000 | 218,037 | 37 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | SGD | 647 | 473,000 | 473,599 | 599 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | SGD | 885 | 652,000 | 647,721 | — | (4,279 | ) | ||||||||||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | ZAR | 6,211 | 328,145 | 331,784 | 3,639 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | ZAR | 1,276 | 65,787 | 68,181 | 2,394 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | ZAR | 6,203 | 330,000 | 331,365 | 1,365 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | ZAR | 2,653 | 138,622 | 141,739 | 3,117 | — | |||||||||||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 198,678 | 148,000 | 147,264 | — | (736 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | KRW | 968,557 | 726,000 | 717,913 | — | (8,087 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | KRW | 401,081 | 298,000 | 297,289 | — | (711 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 27
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | THB | 6,987 | $ | 192,729 | $ | 195,282 | $ | 2,553 | $ | — | |||||||||||||||||||||||
Expiring 12/20/23 | BOA | THB | 19,306 | 539,000 | 539,589 | 589 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | THB | 64,735 | 1,820,954 | 1,809,303 | — | (11,651 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | THB | 5,528 | 150,000 | 154,490 | 4,490 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | UAG | THB | 27,182 | 755,000 | 759,714 | 4,714 | — | |||||||||||||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | TRY | 13,381 | 463,978 | 453,942 | — | (10,036 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 39,895,470 | $ | 39,673,476 | 114,953 | (336,947 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts: |
| |||||||||||||||||||||||||||||||||
Australian Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | JPM | AUD | 237 | $ | 152,777 | $ | 150,912 | $ | 1,865 | $ | — | |||||||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||||||||||
Expiring 11/03/23 | BNP | BRL | 16,889 | 3,366,107 | 3,348,294 | 17,813 | — | |||||||||||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 1,603 | 309,000 | 317,841 | — | (8,841 | ) | ||||||||||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 511 | 101,673 | 101,343 | 330 | — | |||||||||||||||||||||||||||
Chilean Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | GSI | CLP | 291,518 | 319,000 | 324,723 | — | (5,723 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | TD | CLP | 243,150 | 270,244 | 270,845 | — | (601 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | UAG | CLP | 298,920 | 331,000 | 332,968 | — | (1,968 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | UAG | CLP | 278,978 | 308,000 | 310,755 | — | (2,755 | ) | ||||||||||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||||||||||
Expiring 11/16/23 | BNP | CNH | 1,549 | 212,859 | 211,236 | 1,623 | — | |||||||||||||||||||||||||||
Expiring 11/16/23 | DB | CNH | 710 | 97,460 | 96,758 | 702 | — | |||||||||||||||||||||||||||
Colombian Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | COP | 983,380 | 227,976 | 236,237 | — | (8,261 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | COP | 642,044 | 150,000 | 154,238 | — | (4,238 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | COP | 306,281 | 70,800 | 73,578 | — | (2,778 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | COP | 286,122 | 69,186 | 68,735 | 451 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | COP | 1,483,744 | 367,000 | 356,439 | 10,561 | — | |||||||||||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BARC | CZK | 12,665 | 546,732 | 544,637 | 2,095 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | CZK | 7,200 | 306,592 | 309,636 | — | (3,044 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | CZK | 7,981 | 339,408 | 343,220 | — | (3,812 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | CZK | 3,613 | 155,138 | 155,388 | — | (250 | ) | ||||||||||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | HUF | 1,457,756 | 3,940,733 | 3,987,388 | — | (46,655 | ) |
See Notes to Financial Statements.
28
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||||||||
Hungarian Forint (cont’d.), | ||||||||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | HUF | 124,963 | $ | 334,000 | $ | 341,810 | $ | — | $ | (7,810 | ) | ||||||||||||||||||||||||||||
Indian Rupee, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 80,136 | 962,000 | 960,833 | 1,167 | — | |||||||||||||||||||||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNYM | IDR | 6,503,334 | 422,103 | 407,928 | 14,175 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNYM | IDR | 3,520,873 | 223,789 | 220,850 | 2,939 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | IDR | 393,247 | 25,512 | 24,667 | 845 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | IDR | 7,799,072 | 495,000 | 489,204 | 5,796 | — | |||||||||||||||||||||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | ILS | 2,718 | 713,000 | 674,355 | 38,645 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | ILS | 143 | 37,618 | 35,471 | 2,147 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | ILS | 1,403 | 366,000 | 348,026 | 17,974 | — | |||||||||||||||||||||||||||||||||
Malaysian Ringgit, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MYR | 471 | 101,067 | 99,263 | 1,804 | — | |||||||||||||||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MXN | 34,941 | 1,958,637 | 1,922,000 | 36,637 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MXN | 1,648 | 89,876 | 90,629 | — | (753 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | MXN | 5,544 | 311,000 | 304,963 | 6,037 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | SSB | MXN | 5,888 | 338,000 | 323,897 | 14,103 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | TD | MXN | 3,013 | 173,081 | 165,731 | 7,350 | — | |||||||||||||||||||||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | TWD | 28,385 | 879,000 | 877,024 | 1,976 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | GSI | TWD | 16,927 | 523,000 | 523,012 | — | (12 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | TWD | 29,033 | 908,000 | 897,065 | 10,935 | — | |||||||||||||||||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 1,613 | 422,800 | 418,986 | 3,814 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 1,492 | 388,976 | 387,702 | 1,274 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 829 | 215,024 | 215,304 | — | (280 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PEN | 1,644 | 424,535 | 427,074 | — | (2,539 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | PEN | 1,765 | 474,000 | 458,623 | 15,377 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | PEN | 738 | 190,465 | 191,777 | — | (1,312 | ) | ||||||||||||||||||||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PHP | 64,065 | 1,128,301 | 1,128,182 | 119 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PHP | 3,444 | 60,439 | 60,648 | — | (209 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | PHP | 8,535 | 150,000 | 150,301 | — | (301 | ) | ||||||||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | PHP | 51,254 | 903,000 | 902,587 | 413 | — | |||||||||||||||||||||||||||||||||
Polish Zloty, | ||||||||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BARC | PLN | 1,356 | 310,000 | 321,206 | — | (11,206 | ) | ||||||||||||||||||||||||||||||||
Expiring 01/19/24 | UAG | PLN | 7,561 | 1,769,675 | 1,790,332 | — | (20,657 | ) | ||||||||||||||||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | SGD | 318 | 234,788 | 232,867 | 1,921 | — | |||||||||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | SGD | 5,603 | 4,134,261 | 4,101,396 | 32,865 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 29
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrelized Appreciation | Unrealized | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Singapore Dollar (cont’d.), | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | SGD | 407 | $ | 298,000 | $ | 297,631 | $ | 369 | $ | — | |||||||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | DB | ZAR | 5,265 | 277,803 | 281,243 | — | (3,440 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | ZAR | 8,351 | 436,263 | 446,109 | — | (9,846 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | ZAR | 2,361 | 122,073 | 126,135 | — | (4,062 | ) | ||||||||||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | DB | KRW | 204,322 | 151,000 | 151,447 | — | (447 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | DB | KRW | 166,456 | 126,122 | 123,380 | 2,742 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | KRW | 380,411 | 287,750 | 281,968 | 5,782 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | KRW | 2,778,871 | 2,106,401 | 2,059,752 | 46,649 | — | |||||||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | THB | 15,952 | 442,000 | 445,845 | — | (3,845 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | THB | 6,539 | 180,000 | 182,760 | — | (2,760 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | THB | 4,354 | 119,870 | 121,700 | — | (1,830 | ) | ||||||||||||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | TRY | 343 | 12,000 | 11,636 | 364 | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 35,867,914 | $ | 35,718,490 | 309,659 | (160,235 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 424,612 | $ | (497,182 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
Cross currency exchange contracts outstanding at October 31, 2023:
Settlement | Type | Notional Amount (000) | In Exchange For (000) | Unrealized | Unrealized | Counterparty | ||||||||||||||||||||||||||
OTC Cross Currency Exchange Contracts: | ||||||||||||||||||||||||||||||||
01/19/24 | Buy | EUR | 284 | PLN 1,277 | $ | — | $ | (631 | ) | JPM | ||||||||||||||||||||||
01/19/24 | Buy | EUR | 302 | PLN 1,377 | — | (5,207 | ) | BOA | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||
$ | — | $ | (5,838 | ) | ||||||||||||||||||||||||||||
|
|
|
|
Credit default swap agreement outstanding at October 31, 2023:
Reference Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||||||||
Centrally Cleared Credit Default Swap Agreement on credit indices - Buy Protection(1): |
| |||||||||||||||||||||||||||||||||||||||
CDX.EM.40.V1 | 12/20/28 | 1.000%(Q) | 2,060 | $ | 106,215 | $ | 110,242 | $ | 4,027 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness.
See Notes to Financial Statements.
30
CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases.
(1) | If the Fund is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make 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. |
(2) | If the Fund is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund 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. |
(3) | Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
(4) | Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements where the Fund is the seller of protection as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front 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 of risk of default or other credit event occurring as defined under the terms of the agreement. |
Interest rate swap agreements outstanding at October 31, 2023:
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements: | ||||||||||||||||||||||||||||||||||||
BRL | 1,374 | 01/02/24 | 4.590%(T) | 1 Day BROIS(2)(T)/ 0.047% | $ | — | $ | (46,307 | ) | $ | (46,307 | ) | ||||||||||||||||||||||||
BRL | 1,478 | 01/02/25 | 5.840%(T) | 1 Day BROIS(2)(T)/ 0.047% | — | (48,569 | ) | (48,569 | ) | |||||||||||||||||||||||||||
BRL | 6,491 | 01/02/26 | 10.461%(T) | 1 Day BROIS(2)(T)/ 0.047% | — | (15,314 | ) | (15,314 | ) | |||||||||||||||||||||||||||
BRL | 4,956 | 01/02/26 | 10.559%(T) | 1 Day BROIS(2)(T)/ 0.047% | — | (9,798 | ) | (9,798 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 31
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||
BRL | 3,581 | 01/02/26 | 10.769%(T) | 1 Day BROIS(2)(T)/0.047% | $ | — | $ | (4,064 | ) | $ | (4,064 | ) | ||||||||||||||||||||||||
BRL | 5,092 | 01/02/26 | 10.940%(T) | 1 Day BROIS(2)(T)/0.047% | — | (1,701 | ) | (1,701 | ) | |||||||||||||||||||||||||||
BRL | 10,946 | 01/02/26 | 11.190%(T) | 1 Day BROIS(2)(T)/0.047% | — | (12,206 | ) | (12,206 | ) | |||||||||||||||||||||||||||
BRL | 668 | 01/04/27 | 6.325%(T) | 1 Day BROIS(2)(T)/0.047% | — | (33,610 | ) | (33,610 | ) | |||||||||||||||||||||||||||
BRL | 1,056 | 01/04/27 | 6.529%(T) | 1 Day BROIS(2)(T)/0.047% | — | (50,144 | ) | (50,144 | ) | |||||||||||||||||||||||||||
BRL | 2,748 | 01/04/27 | 10.000%(T) | 1 Day BROIS(2)(T)/0.047% | — | (21,972 | ) | (21,972 | ) | |||||||||||||||||||||||||||
BRL | 5,095 | 01/04/27 | 10.750%(T) | 1 Day BROIS(2)(T)/0.047% | — | (13,224 | ) | (13,224 | ) | |||||||||||||||||||||||||||
BRL | 478 | 01/04/27 | 11.120%(T) | 1 Day BROIS(2)(T)/0.047% | 3,172 | (941 | ) | (4,113 | ) | |||||||||||||||||||||||||||
BRL | 413 | 01/04/27 | 11.680%(T) | 1 Day BROIS(2)(T)/0.047% | 298 | (779 | ) | (1,077 | ) | |||||||||||||||||||||||||||
BRL | 1,688 | 01/04/27 | 11.755%(T) | 1 Day BROIS(2)(T)/0.047% | — | 2,185 | 2,185 | |||||||||||||||||||||||||||||
BRL | 3,099 | 01/04/27 | 11.800%(T) | 1 Day BROIS(2)(T)/0.047% | — | 7,360 | 7,360 | |||||||||||||||||||||||||||||
BRL | 2,235 | 01/04/27 | 12.500%(T) | 1 Day BROIS(2)(T)/0.047% | — | 16,715 | 16,715 | |||||||||||||||||||||||||||||
BRL | 7,258 | 01/04/27 | 12.640%(T) | 1 Day BROIS(1)(T)/0.047% | (44,075 | ) | (60,160 | ) | (16,085 | ) | ||||||||||||||||||||||||||
BRL | 518 | 01/04/27 | 13.270%(T) | 1 Day BROIS(1)(T)/0.047% | — | (7,307 | ) | (7,307 | ) |
See Notes to Financial Statements.
32
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||
BRL | 1,933 | 01/02/29 | 11.420%(T) | 1 Day BROIS(2)(T)/0.047% | $ | — | $ | (231 | ) | $ | (231 | ) | ||||||||||||||||||||||||
CLP | 25,080 | 03/15/33 | 5.100%(S) | 1 Day CLOIS(2)(S)/9.000% | (571 | ) | (1,985 | ) | (1,414 | ) | ||||||||||||||||||||||||||
CLP | 61,055 | 09/20/33 | 4.785%(S) | 1 Day CLOIS(1)(S)/9.000% | 4,783 | 6,707 | 1,924 | |||||||||||||||||||||||||||||
CNH | 3,000 | 07/28/27 | 2.438%(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | — | 1,958 | 1,958 | |||||||||||||||||||||||||||||
CNH | 4,547 | 12/15/27 | 2.680%(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | (2,035 | ) | 8,596 | 10,631 | ||||||||||||||||||||||||||||
CNH | 5,630 | 04/24/28 | 2.811%(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | — | 14,090 | 14,090 | |||||||||||||||||||||||||||||
CNH | 38,170 | 09/20/28 | 2.420%(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | 16,769 | 4,478 | (12,291 | ) | ||||||||||||||||||||||||||||
COP | 950,000 | 12/12/23 | 5.530%(Q) | 1 Day COOIS(2)(Q)/12.230% | — | (3,930 | ) | (3,930 | ) | |||||||||||||||||||||||||||
COP | 2,839,900 | 12/20/25 | 8.755%(Q) | 1 Day COOIS(1)(Q)/12.230% | — | 9,131 | 9,131 | |||||||||||||||||||||||||||||
COP | 1,435,100 | 12/20/25 | 9.702%(Q) | 1 Day COOIS(1)(Q)/12.230% | 13 | (1,162 | ) | (1,175 | ) | |||||||||||||||||||||||||||
COP | 1,721,850 | 12/20/25 | 9.750%(Q) | 1 Day COOIS(1)(Q)/12.230% | (426 | ) | (1,746 | ) | (1,320 | ) | ||||||||||||||||||||||||||
COP | 2,065,890 | 09/21/27 | 9.200%(Q) | 1 Day COOIS(1)(Q)/12.230% | (154 | ) | (820 | ) | (666 | ) | ||||||||||||||||||||||||||
COP | 363,880 | 11/04/27 | 11.300%(Q) | 1 Day COOIS(1)(Q)/12.230% | — | (6,262 | ) | (6,262 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 33
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||
COP | 236,760 | 12/21/27 | 10.125%(Q) | 1 Day COOIS(1)(Q)/12.230% | $ | — | $ | (1,997 | ) | $ | (1,997 | ) | ||||||||||||||||||||||||
COP | 1,416,700 | 12/21/27 | 10.187%(Q) | 1 Day COOIS(1)(Q)/12.230% | 447 | (12,677 | ) | (13,124 | ) | |||||||||||||||||||||||||||
COP | 1,047,000 | 12/21/27 | 10.960%(Q) | 1 Day COOIS(1)(Q)/12.230% | — | (16,093 | ) | (16,093 | ) | |||||||||||||||||||||||||||
COP | 1,081,990 | 12/21/27 | 11.966%(Q) | 1 Day COOIS(1)(Q)/12.230% | — | (25,675 | ) | (25,675 | ) | |||||||||||||||||||||||||||
COP | 1,700,665 | 03/15/28 | 9.098%(Q) | 1 Day COOIS(1)(Q)/12.230% | 9,888 | (36 | ) | (9,924 | ) | |||||||||||||||||||||||||||
COP | 1,233,371 | 09/20/28 | 7.440%(Q) | 1 Day COOIS(2)(Q)/12.230% | (2,769 | ) | (18,576 | ) | (15,807 | ) | ||||||||||||||||||||||||||
COP | 2,766,640 | 12/20/28 | 9.447%(Q) | 1 Day COOIS(1)(Q)/12.230% | — | (16,466 | ) | (16,466 | ) | |||||||||||||||||||||||||||
COP | 211,800 | 11/09/31 | 6.650%(Q) | 1 Day COOIS(2)(Q)/12.230% | — | (7,155 | ) | (7,155 | ) | |||||||||||||||||||||||||||
CZK | 19,848 | 06/21/25 | 5.919%(A) | 6 Month PRIBOR(1)(S)/6.880% | 150 | (4,671 | ) | (4,821 | ) | |||||||||||||||||||||||||||
CZK | 16,845 | 12/20/28 | 4.385%(A) | 6 Month PRIBOR(2)(S)/6.880% | — | 661 | 661 | |||||||||||||||||||||||||||||
CZK | 6,507 | 06/15/31 | 1.730%(A) | 6 Month PRIBOR(2)(S)/6.880% | — | (56,468 | ) | (56,468 | ) | |||||||||||||||||||||||||||
CZK | 7,860 | 09/20/33 | 4.225%(A) | 6 Month PRIBOR(2)(S)/6.880% | — | (8,750 | ) | (8,750 | ) | |||||||||||||||||||||||||||
CZK | 9,149 | 12/20/33 | 4.290%(A) | 6 Month PRIBOR(2)(S)/6.880% | — | (5,362 | ) | (5,362 | ) | |||||||||||||||||||||||||||
HUF | 637,900 | 12/20/25 | 7.740%(A) | 6 Month BUBOR(1)(S)/11.180% | — | 15,559 | 15,559 |
See Notes to Financial Statements.
34
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||
HUF | 150,000 | 03/17/27 | 6.250%(A) | 6 Month BUBOR(1)(S)/11.180% | $ | — | $ | 12,372 | $ | 12,372 | ||||||||||||||||||||||||||
HUF | 120,000 | 12/20/28 | 7.410%(A) | 6 Month BUBOR(2)(S)/11.180% | — | (764 | ) | (764 | ) | |||||||||||||||||||||||||||
HUF | 170,370 | 12/20/33 | 7.420%(A) | 6 Month BUBOR(2)(S)/11.180% | — | (284 | ) | (284 | ) | |||||||||||||||||||||||||||
KRW | 496,507 | 09/21/27 | 3.087%(Q) | 3 Month KWCDC(2)(Q)/3.820% | (693 | ) | (13,463 | ) | (12,770 | ) | ||||||||||||||||||||||||||
KRW | 180,000 | 12/21/27 | 4.197%(Q) | 3 Month KWCDC(2)(Q)/3.820% | 6,504 | 681 | (5,823 | ) | ||||||||||||||||||||||||||||
KRW | 904,550 | 03/15/28 | 2.965%(Q) | 3 Month KWCDC(2)(Q)/3.820% | (4,414 | ) | (30,792 | ) | (26,378 | ) | ||||||||||||||||||||||||||
KRW | 2,668,563 | 03/15/28 | 3.100%(Q) | 3 Month KWCDC(1)(Q)/3.820% | 75,533 | 79,702 | 4,169 | |||||||||||||||||||||||||||||
KRW | 1,739,782 | 09/20/28 | 3.435%(Q) | 3 Month KWCDC(2)(Q)/3.820% | (9,333 | ) | (37,852 | ) | (28,519 | ) | ||||||||||||||||||||||||||
MXN | 44,000 | 06/18/25 | 10.240%(M) | 28 Day Mexican Interbank Rate(1)(M)/11.503% | 1,131 | 26,279 | 25,148 | |||||||||||||||||||||||||||||
MXN | 18,000 | 09/17/25 | 9.640%(M) | 28 Day Mexican Interbank Rate(1)(M)/11.503% | — | 19,393 | 19,393 | |||||||||||||||||||||||||||||
MXN | 14,446 | 03/11/26 | 4.845%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (6,957 | ) | (95,123 | ) | (88,166 | ) | ||||||||||||||||||||||||||
MXN | 124 | 06/09/27 | 8.543%(M) | 28 Day Mexican Interbank Rate(1)(M)/11.503% | 71 | 312 | 241 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 35
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||
MXN | 4,670 | 03/08/28 | 8.109%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | $ | — | $ | (15,796 | ) | $ | (15,796 | ) | ||||||||||||||||||
MXN | 1,255 | 06/14/28 | 8.660%(M) | 28 Day Mexican Interbank Rate(1)(M)/11.503% | (1,053 | ) | 2,993 | 4,046 | ||||||||||||||||||||||
MXN | 9,700 | 09/13/28 | 8.185%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (33,172 | ) | (33,172 | ) | |||||||||||||||||||||
MXN | 12,745 | 09/13/28 | 8.658%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (9,934 | ) | (30,499 | ) | (20,565 | ) | ||||||||||||||||||||
MXN | 6,220 | 12/13/28 | 8.535%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (15,035 | ) | (15,035 | ) | |||||||||||||||||||||
MXN | 12,910 | 12/13/28 | 8.570%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (6,735 | ) | (30,228 | ) | (23,493 | ) | ||||||||||||||||||||
MXN | 11,100 | 12/13/28 | 9.635%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (433 | ) | (433 | ) | |||||||||||||||||||||
MXN | 5,346 | 01/28/30 | 6.640%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (25,843 | ) | (42,635 | ) | (16,792 | ) | ||||||||||||||||||||
MXN | | 4,070 | | | 09/07/33 | | 7.872%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (25,884 | ) | (25,884 | ) | |||||||||||||||||
PLN | 2,360 | 12/15/23 | 2.400%(A) | 6 Month WIBOR(1)(S)/5.560% | — | 6,104 | 6,104 | |||||||||||||||||||||||
PLN | 2,700 | 07/24/24 | 1.798%(A) | 6 Month WIBOR(2)(S)/5.560% | — | (26,532 | ) | (26,532 | ) |
See Notes to Financial Statements.
36
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||
PLN | 930 | 02/01/25 | 4.300%(A) | 6 Month WIBOR(1)(S)/5.560% | $ | — | $ | (692 | ) | $ | (692 | ) | ||||||||||||||||||
PLN | 6,921 | 06/21/25 | 6.021%(A) | 6 Month WIBOR(1)(S)/5.560% | 4,254 | (17,855 | ) | (22,109 | ) | |||||||||||||||||||||
PLN | 2,730 | 09/08/25 | 0.637%(A) | 6 Month WIBOR(2)(S)/5.560% | (1,459 | ) | (54,394 | ) | (52,935 | ) | ||||||||||||||||||||
PLN | 1,186 | 06/15/27 | 4.970%(A) | 6 Month WIBOR(2)(S)/5.560% | (12,967 | ) | 87 | 13,054 | ||||||||||||||||||||||
PLN | 1,670 | 08/02/27 | 5.680%(A) | 6 Month WIBOR(2)(S)/5.560% | — | 11,354 | 11,354 | |||||||||||||||||||||||
PLN | 4,830 | 09/21/27 | 6.632%(A) | 6 Month WIBOR(1)(S)/5.560% | (15,532 | ) | (77,941 | ) | (62,409 | ) | ||||||||||||||||||||
PLN | 1,434 | 10/06/27 | 6.826%(A) | 6 Month WIBOR(2)(S)/5.560% | — | 25,682 | 25,682 | |||||||||||||||||||||||
PLN | 117 | 10/25/27 | 7.900%(A) | 6 Month WIBOR(1)(S)/5.560% | (3,383 | ) | (3,155 | ) | 228 | |||||||||||||||||||||
PLN | 2,116 | 12/21/27 | 6.845%(A) | 6 Month WIBOR(1)(S)/5.560% | (32,911 | ) | (55,625 | ) | (22,714 | ) | ||||||||||||||||||||
PLN | 3,580 | 09/20/28 | 4.640%(A) | 6 Month WIBOR(1)(S)/5.560% | (7,773 | ) | 2,877 | 10,650 | ||||||||||||||||||||||
PLN | 17,660 | 12/20/28 | 4.087%(A) | 6 Month WIBOR(2)(S)/5.560% | (115,518 | ) | (102,647 | ) | 12,871 | |||||||||||||||||||||
PLN | 700 | 06/17/31 | 1.745%(A) | 6 Month WIBOR(1)(S)/5.560% | — | 34,933 | 34,933 | |||||||||||||||||||||||
PLN | 271 | 05/10/32 | 6.410%(A) | 6 Month WIBOR(1)(S)/5.560% | — | (6,246 | ) | (6,246 | ) | |||||||||||||||||||||
THB | 47,553 | 12/20/28 | 3.080%(Q) | 1 Day THOR(1)(Q)/2.481% | — | (14,156 | ) | (14,156 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 37
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||
ZAR | 18,880 | 06/21/25 | 8.250%(Q) | 3 Month JIBAR(1)(Q)/8.358% | $ | 12,729 | $ | (99 | ) | $ | (12,828 | ) | ||||||||||||||||||
ZAR | 5,789 | 08/21/25 | 4.978%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (6,155 | ) | (18,774 | ) | (12,619 | ) | ||||||||||||||||||||
ZAR | 2,808 | 03/16/27 | 6.960%(Q) | 3 Month JIBAR(1)(Q)/8.358% | 5,758 | 6,111 | 353 | |||||||||||||||||||||||
ZAR | 1,744 | 09/21/27 | 7.490%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (3,246 | ) | (2,853 | ) | 393 | |||||||||||||||||||||
ZAR | 19,350 | 09/21/27 | 8.280%(Q) | 3 Month JIBAR(1)(Q)/8.358% | 1,025 | 3,729 | 2,704 | |||||||||||||||||||||||
ZAR | 3,900 | 12/21/27 | 8.860%(Q) | 3 Month JIBAR(1)(Q)/8.358% | (1,108 | ) | (3,169 | ) | (2,061 | ) | ||||||||||||||||||||
ZAR | 8,623 | 03/15/28 | 7.766%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (24,088 | ) | (12,525 | ) | 11,563 | |||||||||||||||||||||
ZAR | 7,568 | 06/21/28 | 8.455%(Q) | 3 Month JIBAR(1)(Q)/8.358% | (820 | ) | 1,511 | 2,331 | ||||||||||||||||||||||
ZAR | 11,962 | 09/20/28 | 8.623%(Q) | 3 Month JIBAR(1)(Q)/8.358% | — | (294 | ) | (294 | ) | |||||||||||||||||||||
ZAR | 39,491 | 12/20/28 | 8.897%(Q) | 3 Month JIBAR(1)(Q)/8.358% | (3,711 | ) | (16,840 | ) | (13,129 | ) | ||||||||||||||||||||
ZAR | 6,998 | 12/20/28 | 9.085%(Q) | 3 Month JIBAR(1)(Q)/8.358% | — | (5,803 | ) | (5,803 | ) | |||||||||||||||||||||
ZAR | 3,244 | 04/13/31 | 7.530%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (38 | ) | (16,942 | ) | (16,904 | ) | ||||||||||||||||||||
ZAR | 6,680 | 07/13/31 | 7.415%(Q) | 3 Month JIBAR(1)(Q)/8.358% | 93 | 39,163 | 39,070 | |||||||||||||||||||||||
ZAR | 6,610 | 09/27/31 | 7.493%(Q) | 3 Month JIBAR(1)(Q)/8.358% | 1,662 | 38,981 | 37,319 |
See Notes to Financial Statements.
38
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||
ZAR | 4,635 | 01/04/32 | 7.595%(Q) | 3 Month JIBAR(1)(Q)/8.358% | $ | 5,064 | $ | 27,269 | $ | 22,205 | ||||||||||||||||||||||||
ZAR | 2,682 | 11/10/32 | 9.160%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (11 | ) | (4,159 | ) | (4,148 | ) | ||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||
$ | (194,368 | ) | $ | (901,846 | ) | $ | (707,478 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Fair Value | Upfront Premiums Paid(Received) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||||||||||||||||||||
OTC Interest Rate Swap Agreements: | ||||||||||||||||||||||||||||||||||||||||
MYR | 11,850 | 12/20/25 | 3.898%(Q) | 3 Month KLIBOR(1)(Q)/3.650% | $ | (3,970 | ) | $ | — | $ | (3,970 | ) | GSI | |||||||||||||||||||||||||||
MYR | 2,300 | 07/21/27 | 3.640%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (4,117 | ) | (9 | ) | (4,108 | ) | GSI | |||||||||||||||||||||||||||||
MYR | 3,000 | 07/29/27 | 3.500%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (8,585 | ) | (11 | ) | (8,574 | ) | JPM | |||||||||||||||||||||||||||||
MYR | 5,300 | 06/21/28 | 3.442%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (23,795 | ) | — | (23,795 | ) | BOA | ||||||||||||||||||||||||||||||
MYR | 4,100 | 06/21/28 | 3.507%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (15,908 | ) | — | (15,908 | ) | BOA | ||||||||||||||||||||||||||||||
MYR | 4,300 | 06/21/28 | 3.598%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (13,034 | ) | — | (13,034 | ) | GSI | ||||||||||||||||||||||||||||||
MYR | 4,495 | 09/20/28 | 3.629%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (13,544 | ) | — | (13,544 | ) | CITI | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
$ | (82,953 | ) | $ | (20 | ) | $ | (82,933 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
(1) | The Fund pays the fixed rate and receives the floating rate. |
(2) | The Fund pays the floating rate and receives the fixed rate. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 39
Schedule of Investments (continued)
as of October 31, 2023
Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:
Premiums Paid | Premiums Received | Unrealized Appreciation | Unrealized Depreciation | |||||
OTC Swap Agreements | $— | $(20) | $— | $(82,933) |
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||||||||||||||||||||||
CGM | $ | 760,000 | $ | — | ||||||||||||||||||||
JPS | 170,000 | — | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total | $ | 930,000 | $ | — | ||||||||||||||||||||
|
|
|
|
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Long-Term Investments | ||||||||||||
Corporate Bonds | ||||||||||||
Brazil | $ | — | $ | 30,000 | $— | |||||||
Jamaica | — | 5,875 | — | |||||||||
Malaysia | — | 182,810 | — | |||||||||
South Africa | — | 176,000 | — | |||||||||
Supranational Bank | — | 139,591 | — | |||||||||
Sovereign Bonds | ||||||||||||
Angola | — | 191,813 | — | |||||||||
Brazil | — | 2,854,241 | — | |||||||||
Chile | — | 507,329 | — | |||||||||
China | — | 2,106,164 | — | |||||||||
Colombia | — | 2,452,942 | — | |||||||||
Czech Republic | — | 2,900,016 | — | |||||||||
Dominican Republic | — | 192,182 | — | |||||||||
Hungary | — | 3,580,645 | — |
See Notes to Financial Statements.
40
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Investments in Securities (continued) | ||||||||||||||||||||
Assets (continued) | ||||||||||||||||||||
Long-Term Investments (continued) | ||||||||||||||||||||
Sovereign Bonds (continued) | ||||||||||||||||||||
Indonesia | $ | — | $ | 7,148,365 | $— | |||||||||||||||
Ivory Coast | — | 121,840 | — | |||||||||||||||||
Malaysia | — | 2,617,651 | — | |||||||||||||||||
Mexico | — | 5,949,629 | — | |||||||||||||||||
Peru | — | 1,677,114 | — | |||||||||||||||||
Philippines | — | 92,732 | — | |||||||||||||||||
Poland | — | 4,527,061 | — | |||||||||||||||||
Romania | — | 1,952,121 | — | |||||||||||||||||
Serbia | — | 524,751 | — | |||||||||||||||||
South Africa | — | 6,863,755 | — | |||||||||||||||||
Thailand | — | 2,851,403 | — | |||||||||||||||||
Uruguay | — | 44,478 | — | |||||||||||||||||
Short-Term Investments | ||||||||||||||||||||
Affiliated Mutual Fund | 5,602,977 | — | — | |||||||||||||||||
U.S. Treasury Obligation | — | 2,632,615 | — | |||||||||||||||||
Options Purchased | — | 16,101 | — | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total | $ | 5,602,977 | $ | 52,339,224 | $— | |||||||||||||||
|
|
|
|
|
| |||||||||||||||
Liabilities | ||||||||||||||||||||
Options Written | $ | — | $ | (266,517 | ) | $— | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Other Financial Instruments* | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Futures Contracts | $ | 21,282 | $ | — | $— | |||||||||||||||
OTC Forward Foreign Currency Exchange Contracts | — | 424,612 | — | |||||||||||||||||
Centrally Cleared Credit Default Swap Agreement | — | 4,027 | — | |||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements | — | 376,397 | — | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total | $ | 21,282 | $ | 805,036 | $— | |||||||||||||||
|
|
|
|
|
| |||||||||||||||
Liabilities | ||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts | $ | — | $ | (497,182 | ) | $— | ||||||||||||||
OTC Cross Currency Exchange Contracts | — | (5,838 | ) | — | ||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements | — | (1,083,875 | ) | — | ||||||||||||||||
OTC Interest Rate Swap Agreements | — | (82,953 | ) | — | ||||||||||||||||
|
|
|
| |||||||||||||||||
Total | $ | — | $ | (1,669,848 | ) | $— | ||||||||||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 41
Schedule of Investments (continued)
as of October 31, 2023
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of October 31, 2023 were as follows:
Sovereign Bonds | 82.4 | % | ||
Affiliated Mutual Fund | 9.4 | |||
U.S. Treasury Obligation | 4.4 | |||
Lodging | 0.3 | |||
Chemicals | 0.3 | |||
Multi-National | 0.2 | |||
Retail | 0.1 | |||
Options Purchased | 0.0 | * | ||
Telecommunications | 0.0 | * | ||
|
| |||
97.1 | ||||
Options Written | (0.4 | ) | ||
Other assets in excess of liabilities | 3.3 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than 0.05% |
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit risk, foreign exchange risk and interest rate risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of October 31, 2023 as presented in the Statement of Assets and Liabilities:
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Credit contracts | Due from/to broker-variation margin swaps | $ | 4,027* | — | $ | — | ||||||
Foreign exchange contracts | Unaffiliated investments | 16,101 | Options written outstanding, at value | 266,517 | ||||||||
Foreign exchange contracts | — | — | Unrealized depreciation on OTC cross currency exchange contracts | 5,838 |
See Notes to Financial Statements.
42
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | $ | 424,612 | Unrealized depreciation on OTC forward foreign currency exchange contracts | $ | 497,182 | ||||||
Interest rate contracts | Due from/to broker-variation margin futures | 21,282 | * | — | — | |||||||
Interest rate contracts | Due from/to broker-variation margin swaps | 376,397 | * | Due from/to broker-variation margin swaps | 1,083,875 | * | ||||||
Interest rate contracts | — | — | Premiums received for OTC swap agreements | 20 | ||||||||
Interest rate contracts | — | — | Unrealized depreciation on OTC swap agreements | 82,933 | ||||||||
|
|
|
| |||||||||
$ | 842,419 | $ | 1,936,365 | |||||||||
|
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
The effects of derivative instruments on the Statement of Operations for the year ended October 31, 2023 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | |||||||||||||||||||
Credit contracts | $ | — | $ | — | $ | — | $ | — | $ | (18,371 | ) | |||||||||||||
Foreign exchange contracts | (216,376 | ) | 140,644 | — | 1,193,494 | — | ||||||||||||||||||
Interest rate contracts | — | — | 57,493 | — | 194,124 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | (216,376 | ) | $ | 140,644 | $ | 57,493 | $ | 1,193,494 | $ | 175,753 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | |||||||||||||
Credit contracts | $ | — | $ | — | $ — | $ — | $ | 4,286 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 43
Schedule of Investments (continued)
as of October 31, 2023
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | |||||||||||||||||||||
Foreign exchange contracts | $ | (51,026 | ) | $ | 60,136 | $ | — | $ | (258,570 | ) | $ | — | ||||||||||||||
Interest rate contracts | — | — | (21,352 | ) | — | (774,213 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total | $ | (51,026 | ) | $ | 60,136 | $ | (21,352 | ) | $ | (258,570 | ) | $ | (769,927 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
For the year ended October 31, 2023, the Fund’s average volume of derivative activities is as follows:
Derivative Contract Type | Average Volume of Derivative Activities* | |||
Options Purchased (1) | $ 39,457 | |||
Options Written (2) | 6,058,974 | |||
Futures Contracts - Short Positions (2) | 1,503,327 | |||
Forward Foreign Currency Exchange Contracts - Purchased (3) | 33,768,499 | |||
Forward Foreign Currency Exchange Contracts - Sold (3) | 30,422,320 | |||
Cross Currency Exchange Contracts (4) | 758,609 | |||
Interest Rate Swap Agreements (2) | 50,738,616 | |||
Credit Default Swap Agreements - Buy Protection (2) | 692,000 | |||
Credit Default Swap Agreements - Sell Protection (2) | 180,721 |
* | Average volume is based on average quarter end balances as noted for the year ended October 31, 2023. |
(1) | Cost. |
(2) | Notional Amount in USD. |
(3) | Value at Settlement Date. |
(4) | Value at Trade Date. |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund invested in OTC derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives where the legal right to set-off exists is presented in the summary below.
Offsetting of OTC derivative assets and liabilities:
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts of Recognized Liabilities(1) | Net Amounts of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(2) | Net Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
BARC | $ | 109,181 | $ | (84,476 | ) | $ | 24,705 | $ | — | $ | 24,705 | |||||||||||||||||||||||||||||||||||||||||||||||||
BNP | 27,549 | (35,140 | ) | (7,591 | ) | — | (7,591 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
BNYM | 17,114 | (2,487 | ) | 14,627 | — | 14,627 |
See Notes to Financial Statements.
44
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts of Recognized Liabilities(1) | Net Amounts of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(2) | Net Amount | ||||||||||||||||||||
BOA | $ | 16,386 | $ | (79,846 | ) | $ | (63,460 | ) | $ | — | $ | (63,460 | ) | ||||||||||||
CITI | 50,482 | (76,647 | ) | (26,165 | ) | — | (26,165 | ) | |||||||||||||||||
DB | 6,321 | (72,015 | ) | (65,694 | ) | — | (65,694 | ) | |||||||||||||||||
GSI | 4,783 | (98,383 | ) | (93,600 | ) | — | (93,600 | ) | |||||||||||||||||
HSBC | 18,059 | (49,570 | ) | (31,511 | ) | — | (31,511 | ) | |||||||||||||||||
JPM | 46,577 | (46,294 | ) | 283 | — | 283 | |||||||||||||||||||
MSI | 31,875 | (256,463 | ) | (224,588 | ) | 224,588 | — | ||||||||||||||||||
SCB | 62,808 | (6,302 | ) | 56,506 | — | 56,506 | |||||||||||||||||||
SSB | 19,206 | (5,078 | ) | 14,128 | — | 14,128 | |||||||||||||||||||
TD | 25,658 | (14,409 | ) | 11,249 | — | 11,249 | |||||||||||||||||||
UAG | 4,714 | (25,380 | ) | (20,666 | ) | — | (20,666 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
$ | 440,713 | $ | (852,490 | ) | $ | (411,777 | ) | $ | 224,588 | $ | (187,189 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities. |
(2) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and the Fund’s OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 45
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $57,723,838) | $ | 52,339,224 | ||
Affiliated investments (cost $5,602,977) | 5,602,977 | |||
Foreign currency, at value (cost $127,397) | 127,319 | |||
Cash segregated for counterparty - OTC | 271,000 | |||
Deposit with broker for centrally cleared/exchange-traded derivatives | 930,000 | |||
Dividends and interest receivable | 922,582 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 424,612 | |||
Receivable for Fund shares sold | 237,488 | |||
Tax reclaim receivable | 70,265 | |||
Receivable for investments sold | 7,527 | |||
Due from broker—variation margin futures | 154 | |||
Prepaid expenses | 1,087 | |||
|
| |||
Total Assets | 60,934,235 | |||
|
| |||
Liabilities | ||||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 497,182 | |||
Payable for Fund shares purchased | 324,823 | |||
Options written outstanding, at value (premiums received $299,427) | 266,517 | |||
Unrealized depreciation on OTC swap agreements | 82,933 | |||
Audit fees payable | 53,000 | |||
Accrued expenses and other liabilities | 37,321 | |||
Due to broker—variation margin swaps | 16,218 | |||
Payable for investments purchased | 8,825 | |||
Unrealized depreciation on OTC cross currency exchange contracts | 5,838 | |||
Management fee payable | 5,746 | |||
Directors’ fees payable | 853 | |||
Affiliated transfer agent fee payable | 851 | |||
Distribution fee payable | 607 | |||
Dividends payable | 218 | |||
Premiums received for OTC swap agreements | 20 | |||
|
| |||
Total Liabilities | 1,300,952 | |||
|
| |||
Net Assets | $ | 59,633,283 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 130 | ||
Paid-in capital in excess of par | 77,853,091 | |||
Total distributable earnings (loss) | (18,219,938 | ) | ||
|
| |||
Net assets, October 31, 2023 | $ | 59,633,283 | ||
|
|
See Notes to Financial Statements.
46
Class A | ||||||
Net asset value and redemption price per share, ($2,390,897 ÷ 523,673 shares of common stock issued and outstanding) | $ | 4.57 | ||||
Maximum sales charge (3.25% of offering price) | 0.15 | |||||
|
| |||||
Maximum offering price to public | $ | 4.72 | ||||
|
| |||||
Class C | ||||||
Net asset value, offering price and redemption price per share, ($61,954 ÷ 13,473 shares of common stock issued and outstanding) | $ | 4.60 | ||||
|
| |||||
Class Z | ||||||
Net asset value, offering price and redemption price per share, ($52,178,436 ÷ 11,326,944 shares of common stock issued and outstanding) | $ | 4.61 | ||||
|
| |||||
Class R6 | ||||||
Net asset value, offering price and redemption price per share, ($5,001,996 ÷ 1,086,432 shares of common stock issued and outstanding) | $ | 4.60 | ||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 47
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) | ||||
Income | ||||
Interest income (net of $35,168 foreign withholding tax) | $ | 2,674,480 | ||
Affiliated dividend income | 165,420 | |||
Unaffiliated dividend income (net of $149 foreign withholding tax) | 43,831 | |||
|
| |||
Total income | 2,883,731 | |||
|
| |||
Expenses | ||||
Management fee | 305,994 | |||
Distribution fee(a) | 7,269 | |||
Custodian and accounting fees | 67,307 | |||
Audit fee | 53,000 | |||
Professional fees | 45,096 | |||
Transfer agent’s fees and expenses (including affiliated expense of $4,955)(a) | 43,602 | |||
Registration fees(a) | 37,805 | |||
Fund data services | 21,834 | |||
Shareholders’ reports | 21,082 | |||
Directors’ fees | 10,090 | |||
Miscellaneous | 14,813 | |||
|
| |||
Total expenses | 627,892 | |||
Less: Fee waiver and/or expense reimbursement(a) | (274,854 | ) | ||
|
| |||
Net expenses | 353,038 | |||
|
| |||
Net investment income (loss) | 2,530,693 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (806,443 | ) | ||
Futures transactions | 57,493 | |||
Forward and cross currency contract transactions | 1,193,494 | |||
Options written transactions | 140,644 | |||
Swap agreement transactions | 175,753 | |||
Foreign currency transactions | (631,811 | ) | ||
|
| |||
129,130 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 1,829,578 | |||
Futures | (21,352 | ) | ||
Forward and cross currency contracts | (258,570 | ) | ||
Options written | 60,136 | |||
Swap agreements | (769,927 | ) | ||
Foreign currencies | (35,514 | ) | ||
|
| |||
804,351 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 933,481 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 3,464,174 | ||
|
|
See Notes to Financial Statements.
48
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 6,246 | 1,023 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 5,580 | 1,026 | 36,664 | 332 | ||||||||||||
Registration fees | 9,665 | 5,905 | 13,630 | 8,605 | ||||||||||||
Fee waiver and/or expense reimbursement | (22,296) | (7,248) | (225,731) | (19,579) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 49
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 2,530,693 | $ | 1,987,116 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 129,130 | (7,259,546 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 804,351 | (3,858,356 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 3,464,174 | (9,130,786 | ) | |||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (128,985 | ) | (32,039 | ) | ||||
Class C | (4,499 | ) | (1,359 | ) | ||||
Class Z | (2,349,011 | ) | (495,733 | ) | ||||
Class R6 | (126,015 | ) | (25,551 | ) | ||||
|
|
|
| |||||
(2,608,510 | ) | (554,682 | ) | |||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (85,763 | ) | |||||
Class C | — | (3,638 | ) | |||||
Class Z | — | (1,326,945 | ) | |||||
Class R6 | — | (68,392 | ) | |||||
|
|
|
| |||||
— | (1,484,738 | ) | ||||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 35,222,107 | 13,758,267 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 2,577,270 | 2,038,819 | ||||||
Cost of shares purchased | (5,879,610 | ) | (33,752,375 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | 31,919,767 | (17,955,289 | ) | |||||
|
|
|
| |||||
Total increase (decrease) | 32,775,431 | (29,125,495 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 26,857,852 | 55,983,347 | ||||||
|
|
|
| |||||
End of year | $ | 59,633,283 | $ | 26,857,852 | ||||
|
|
|
|
See Notes to Financial Statements.
50
Financial Highlights
Class A Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $4.27 | $5.45 | $5.57 | $6.07 | $5.52 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | (b) | 0.20 | 0.22 | 0.24 | 0.30 | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.31 | (c) | (1.17 | ) | (0.09 | ) | (0.47 | ) | 0.57 | |||||||||||||
Total from investment operations | 0.54 | (0.97 | ) | 0.13 | (0.23 | ) | 0.87 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income* | (0.24 | ) | (0.04 | ) | (0.25 | ) | - | (0.31 | ) | |||||||||||||
Tax return of capital distributions | - | (0.17 | ) | - | (0.27 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.24 | ) | (0.21 | ) | (0.25 | ) | (0.27 | ) | (0.32 | ) | ||||||||||||
Net asset value, end of year | $4.57 | $4.27 | $5.45 | $5.57 | $6.07 | |||||||||||||||||
Total Return(d): | 12.66 | % | (18.18 | )% | 2.19 | % | (3.75 | )% | 16.14 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $2,391 | $2,151 | $3,489 | $3,853 | $3,692 | |||||||||||||||||
Average net assets (000) | $2,498 | $2,762 | $3,950 | $3,518 | $3,223 | |||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.14 | %(f) | 1.14 | %(f) | 1.13 | % | 1.13 | % | 1.13 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 2.03 | %(f) | 1.90 | %(f) | 1.67 | % | 2.04 | % | 2.03 | % | ||||||||||||
Net investment income (loss) | 4.97 | % | 4.13 | % | 3.75 | % | 4.24 | % | 5.13 | % | ||||||||||||
Portfolio turnover rate(g) | 19 | % | 26 | % | 35 | % | 64 | % | 69 | % |
* | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(d) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Includes certain non-reoccurring expenses of 0.01% for the year ended October 31, 2023 and interest expense on borrowings from the Syndicated Credit Agreement of 0.01%, for the year ended October 31, 2022 which are being excluded from the Fund’s contractual waiver. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 51
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $4.30 | $5.49 | $5.61 | $6.11 | $5.56 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.20 | (b) | 0.17 | 0.18 | 0.20 | 0.26 | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.31 | (c) | (1.19 | ) | (0.09 | ) | (0.47 | ) | 0.57 | |||||||||||||
Total from investment operations | 0.51 | (1.02 | ) | 0.09 | (0.27 | ) | 0.83 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income* | (0.21 | ) | - | (0.21 | ) | - | (0.27 | ) | ||||||||||||||
Tax return of capital distributions | - | (0.17 | ) | - | (0.23 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.21 | ) | (0.17 | ) | (0.21 | ) | (0.23 | ) | (0.28 | ) | ||||||||||||
Net asset value, end of year | $4.60 | $4.30 | $5.49 | $5.61 | $6.11 | |||||||||||||||||
Total Return(d): | 11.76 | % | (18.82 | )% | 1.44 | % | (4.41 | )% | 15.18 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $62 | $126 | $190 | $466 | $579 | |||||||||||||||||
Average net assets (000) | $102 | $144 | $331 | $484 | $566 | |||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.88 | % | 1.89 | %(f) | 1.88 | % | 1.88 | % | 1.88 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 8.97 | % | 7.40 | %(f) | 4.60 | % | 5.82 | % | 4.82 | % | ||||||||||||
Net investment income (loss) | 4.19 | % | 3.35 | % | 3.00 | % | 3.54 | % | 4.37 | % | ||||||||||||
Portfolio turnover rate(g) | 19 | % | 26 | % | 35 | % | 64 | % | 69 | % |
* | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(d) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Includes interest expense on borrowings from the Syndicated Credit Agreement of 0.01%, for the year ended October 31, 2022. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
52
Class Z Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $4.31 | $5.50 | $5.62 | $6.13 | $5.57 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | (b) | 0.22 | 0.24 | 0.27 | 0.32 | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.30 | (c) | (1.18 | ) | (0.08 | ) | (0.48 | ) | 0.58 | |||||||||||||
Total from investment operations | 0.56 | (0.96 | ) | 0.16 | (0.21 | ) | 0.90 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income* | (0.26 | ) | (0.06 | ) | (0.28 | ) | - | (0.33 | ) | |||||||||||||
Tax return of capital distributions | - | (0.17 | ) | - | (0.30 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.26 | ) | (0.23 | ) | (0.28 | ) | (0.30 | ) | (0.34 | ) | ||||||||||||
Net asset value, end of year | $4.61 | $4.31 | $5.50 | $5.62 | $6.13 | |||||||||||||||||
Total Return(d): | 13.05 | % | (17.83 | )% | 2.63 | % | (3.45 | )% | 16.50 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $52,178 | $23,229 | $49,067 | $57,392 | $68,101 | |||||||||||||||||
Average net assets (000) | $42,236 | $39,563 | $59,794 | $56,989 | $63,219 | |||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.73 | %(f) | 0.73 | %(f) | 0.72 | % | 0.74 | % | 0.88 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 1.26 | %(f) | 1.32 | %(f) | 1.16 | % | 1.27 | % | 1.31 | % | ||||||||||||
Net investment income (loss) | 5.40 | % | 4.49 | % | 4.16 | % | 4.72 | % | 5.35 | % | ||||||||||||
Portfolio turnover rate(g) | 19 | % | 26 | % | 35 | % | 64 | % | 69 | % |
* | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Includes certain non-reoccurring expenses of 0.01% for the year ended October 31, 2023 and interest expense on borrowings from the Syndicated Credit Agreement of 0.01%, for the year ended October 31, 2022 which are being excluded from the Fund’s contractual waiver. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund 53
Financial Highlights (continued)
Class R6 Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $4.31 | $5.50 | $5.62 | $6.12 | $5.56 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | (b) | 0.23 | 0.25 | 0.27 | 0.31 | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.30 | (c) | (1.19 | ) | (0.09 | ) | (0.47 | ) | 0.58 | |||||||||||||
Total from investment operations | 0.56 | (0.96 | ) | 0.16 | (0.20 | ) | 0.89 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income* | (0.27 | ) | (0.06 | ) | (0.28 | ) | - | (0.32 | ) | |||||||||||||
Tax return of capital distributions | - | (0.17 | ) | - | (0.30 | ) | (0.01 | ) | ||||||||||||||
Total dividends and distributions | (0.27 | ) | (0.23 | ) | (0.28 | ) | (0.30 | ) | (0.33 | ) | ||||||||||||
Net asset value, end of year | $4.60 | $4.31 | $5.50 | $5.62 | $6.12 | |||||||||||||||||
Total Return(d): | 12.88 | % | (17.77 | )% | 2.70 | % | (3.24 | )% | 16.41 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $5,002 | $1,352 | $3,237 | $50 | $29 | |||||||||||||||||
Average net assets (000) | $2,239 | $2,001 | $1,613 | $42 | $15 | |||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.66 | %(f) | 0.66 | %(f) | 0.65 | % | 0.67 | % | 0.88 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 1.53 | %(f) | 1.47 | %(f) | 1.63 | % | 40.50 | % | 92.22 | % | ||||||||||||
Net investment income (loss) | 5.45 | % | 4.56 | % | 4.27 | % | 4.64 | % | 5.20 | % | ||||||||||||
Portfolio turnover rate(g) | 19 | % | 26 | % | 35 | % | 64 | % | 69 | % |
* | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Includes certain non-reoccurring expenses of 0.01% for the year ended October 31, 2023 and interest expense on borrowings from the Syndicated Credit Agreement of 0.01%, for the year ended October 31, 2022 which are being excluded from the Fund’s contractual waiver. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
54
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Emerging Markets Debt Local Currency Fund (the “Fund”), a series of the RIC. The Fund is classified as a non-diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is total return, through a combination of current income and capital appreciation.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities
PGIM Emerging Markets Debt Local Currency Fund 55
Notes to Financial Statements (continued)
trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an
56
approved independent third-party vendor source. The Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the
PGIM Emerging Markets Debt Local Currency Fund 57
Notes to Financial Statements (continued)
fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gains (losses) on foreign currency transactions.
Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Fund enters into forward currency contracts, as defined in the prospectus, in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation or depreciation on forward and cross currency contracts. Gain (loss) is realized on the settlement date of the contract equal to the difference between the settlement value of the original and negotiated forward contracts. This gain (loss), if any, is included in net realized gain (loss) on forward and cross currency contract transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks from currency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from the counterparty at the end of the contract’s life. A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.
58
Options: The Fund purchased and/or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates with respect to securities or financial instruments which the Fund currently owns or intends to purchase. The Fund may also use options to gain additional market exposure. The Fund’s principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid at the closing of a purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on options written transactions.
The Fund, as writer of an option, may have no control over whether the underlying securities or financial instruments may be sold (called) or purchased (put). As a result, the Fund bears the market risk of an unfavorable change in the price of the security or financial instrument underlying the written option. The Fund, as purchaser of an OTC option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts. With exchange-traded options contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the options contracts against default.
When the Fund writes an option on a swap, an amount equal to any premium received by the Fund is recorded as a liability and is subsequently adjusted to the current market value of the written option on the swap. If a call option on a swap is exercised, the Fund becomes obligated to pay a fixed interest rate (noted as the strike price) and receive a variable interest rate on a notional amount. If a put option on a swap is exercised, the Fund becomes obligated to pay a variable interest rate and receive a fixed interest rate (noted as the strike price) on a notional amount. Premiums received from writing options on swaps that expire or are exercised are treated as realized gains upon the expiration or exercise of such options on swaps. The risk associated with writing put and call options on swaps is that the Fund will be obligated to be party to a swap agreement if an option on a swap is exercised.
Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in
PGIM Emerging Markets Debt Local Currency Fund 59
Notes to Financial Statements (continued)
the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.
The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Swap Agreements: The Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with a counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. For OTC-traded, upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.
Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Fund used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value of the cash flows to be received from the counterparty over the contract’s remaining life.
Credit Default Swaps (“CDS”): CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a
60
specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.
The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be “short the credit” because the higher the contract value rises, the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases. The Fund’s maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.
As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements where the Fund is the seller of protection as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements
PGIM Emerging Markets Debt Local Currency Fund 61
Notes to Financial Statements (continued)
which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
The RIC, on behalf of the Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Schedule of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to
62
serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
Short sales and OTC contracts, including forward foreign currency exchange contracts, swaps, forward rate agreements and written options involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities, if applicable. Such risks may be mitigated by engaging in master netting arrangements.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |||
Net Investment Income | Monthly |
PGIM Emerging Markets Debt Local Currency Fund 63
Notes to Financial Statements (continued)
Expected Distribution Schedule to Shareholders* | Frequency | |||
Short-Term Capital Gains | Annually | |||
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadvisers’ performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its PGIM Fixed Income unit, and PGIM Limited (collectively the “subadviser”). The Manager pays for the services of subadvisers.
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |
0.650% on average daily net assets up to $1 billion; | 0.65% | |
0.630% on average daily net assets from $1 billion to $3 billion; | ||
0.610% on average daily net assets from $3 billion to $5 billion; | ||
0.600% on average daily net assets from $5 billion to $10 billion; | ||
0.590% on average daily net assets over $10 billion. |
The Manager has contractually agreed, through February 28, 2025, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
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Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Expense Limitations | |
A | 1.13% | |
C | 1.88 | |
Z | 0.72 | |
R6 | 0.65 |
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. The distribution fees are accrued daily and payable monthly.
The Fund’s annual gross and net distribution rates, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | ||||
A | 0.25% | 0.25% | ||||
C |
| 1.00 | 1.00 | |||
Z | N/A | N/A | ||||
R6 | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||||
A | $ | 13,304 | $— | |||
C | — | 13 |
PGIM Investments, PGIM, Inc., PGIM Limited and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
PGIM Emerging Markets Debt Local Currency Fund 65
Notes to Financial Statements (continued)
4. | Other Transactions with Affiliates |
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income”.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
5. | Portfolio Securities |
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |||
$32,935,878 | $7,330,520 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
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Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in | Realized | Value, | Shares, | Income | |||||||||||||||||||
Short-Term Investments - Affiliated Mutual Fund: |
| |||||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||||||||||
$— | $ | 25,278,225 | $ | 19,675,248 | $— | $— | $5,602,977 | 5,602,977 | $165,420 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.
For the year ended October 31, 2023, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$2,608,510 | $— | $— | $2,608,510 |
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$554,682 | $— | $1,484,738 | $2,039,420 |
For the year ended October 31, 2023, the Fund had the following amounts of accumulated undistributed earnings on a tax basis:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |
$1,089,241 | $— |
The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation | |||
$63,663,927 | $1,534,718 | $(8,366,491) | $(6,831,773) |
The difference between GAAP and tax basis is primarily attributable to the deferred losses on wash sales, bond premium amortization, mark-to-market of forwards contracts, and other GAAP to tax differences.
PGIM Emerging Markets Debt Local Currency Fund 67
Notes to Financial Statements (continued)
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |
$11,954,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. | Capital and Ownership |
The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 3.25%. Investors who purchase $500,000 or more of Class A shares and sell those shares within 12 months of purchase are subject to a CDSC of 1% on sales although these purchases are not subject to a front-end sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
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The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 550,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |
A | 10,000,000 | |
C | 50,000,000 | |
Z | 250,000,000 | |
T | 190,000,000 | |
R6 | 50,000,000 |
The Fund currently does not have any Class T shares outstanding.
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||
Z | 4,022,199 | 35.5% | ||
R6 | 209 | 0.1 |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | 1 | 31.1% | ||
Unaffiliated | 4 | 63.5 |
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 130,790 | $ | 615,924 | |||||
Shares issued in reinvestment of dividends and distributions | 27,366 | 128,267 | ||||||
Shares purchased | (141,337 | ) | (656,886 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 16,819 | 87,305 | ||||||
Shares issued upon conversion from other share class(es) | 3,395 | 16,191 | ||||||
Net increase (decrease) in shares outstanding | 20,214 | $ | 103,496 | |||||
Year ended October 31, 2022: | ||||||||
Shares sold | 66,195 | $ | 341,565 | |||||
Shares issued in reinvestment of dividends and distributions | 24,360 | 117,212 | ||||||
Shares purchased | (236,571 | ) | (1,172,120 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (146,016 | ) | (713,343 | ) | ||||
Shares issued upon conversion from other share class(es) | 9,979 | 46,343 | ||||||
Shares purchased upon conversion into other share class(es) | (651 | ) | (3,466 | ) | ||||
Net increase (decrease) in shares outstanding | (136,688 | ) | $ | (670,466 | ) |
PGIM Emerging Markets Debt Local Currency Fund 69
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 2,187 | $ | 10,400 | |||||
Shares issued in reinvestment of dividends and distributions | 955 | 4,497 | ||||||
Shares purchased | (15,622 | ) | (73,689 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (12,480 | ) | (58,792 | ) | ||||
Shares purchased upon conversion into other share class(es) | (3,374 | ) | (16,191 | ) | ||||
Net increase (decrease) in shares outstanding | (15,854 | ) | $ | (74,983 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 9,916 | $ | 46,594 | |||||
Shares issued in reinvestment of dividends and distributions | 1,029 | 4,995 | ||||||
Shares purchased | (6,394 | ) | (32,776 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 4,551 | 18,813 | ||||||
Shares purchased upon conversion into other share class(es) | (9,912 | ) | (46,343 | ) | ||||
Net increase (decrease) in shares outstanding | (5,361 | ) | $ | (27,530 | ) | |||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 6,331,274 | $ | 30,086,527 | |||||
Shares issued in reinvestment of dividends and distributions | 489,547 | 2,318,647 | ||||||
Shares purchased | (884,489 | ) | (4,171,193 | ) | ||||
Net increase (decrease) in shares outstanding | 5,936,332 | $ | 28,233,981 | |||||
Year ended October 31, 2022: | ||||||||
Shares sold | 2,502,871 | $ | 13,016,107 | |||||
Shares issued in reinvestment of dividends and distributions | 372,746 | 1,822,678 | ||||||
Shares purchased | (6,406,152 | ) | (30,692,749 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (3,530,535 | ) | (15,853,964 | ) | ||||
Shares issued upon conversion from other share class(es) | 645 | 3,466 | ||||||
Net increase (decrease) in shares outstanding | (3,529,890 | ) | $ | (15,850,498 | ) | |||
Class R6 | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 953,543 | $ | 4,509,256 | |||||
Shares issued in reinvestment of dividends and distributions | 26,693 | 125,859 | ||||||
Shares purchased | (207,608 | ) | (977,842 | ) | ||||
Net increase (decrease) in shares outstanding | 772,628 | $ | 3,657,273 |
70
Share Class | Shares | Amount | ||||||
Year ended October 31, 2022: | ||||||||
Shares sold | 72,252 | $ | 354,001 | |||||
Shares issued in reinvestment of dividends and distributions | 19,125 | 93,934 | ||||||
Shares purchased | (366,479 | ) | (1,854,730 | ) | ||||
Net increase (decrease) in shares outstanding | (275,102 | ) | $ | (1,406,795 | ) |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||||
Total Commitment | $1,200,000,000 | $1,200,000,000 | ||||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund did not utilize the SCA during the year ended October 31, 2023.
9. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Credit Risk: Credit risk relates to the ability of the issuer of a fixed income instrument or the counterparty to a financial transaction with the Fund to meet interest and principal payments as they come due or to fulfill its obligations to the Fund. The value of the fixed
PGIM Emerging Markets Debt Local Currency Fund 71
Notes to Financial Statements (continued)
income instruments held by the Fund will be adversely affected by any erosion in the ability of the relevant issuers to make interest and principal payments as they become due. The ratings given to a debt security by certain ratings agencies provide a generally useful guide as to such credit risk. The lower the rating of a debt security held by the Fund, the greater the degree of credit risk that is perceived to exist by the rating agency with respect to that security. Increasing the amount of Fund assets invested in lower-rated securities generally will increase the Fund’s income, but also will increase the credit risk to which the Fund is subject. The Fund generally enters into financial transactions with major dealers that are deemed acceptable to the subadviser from a credit perspective.
Currency Risk: The Fund’s assets may be invested in securities that are denominated in non-US currencies or directly in currencies. Such investments are subject to the risk that the value of a particular currency will change in relation to the US dollar or other currencies. The weakening of a country’s currency relative to the US dollar will negatively affect the dollar value of the Fund’s assets. Among the factors that may affect currency values are trade balances, levels of short term interest rates, differences in relative values of similar assets in different currencies, long term opportunities for investment and capital appreciation, central bank policy, and political developments. The Fund may attempt to hedge such risks by selling or buying currencies in the forward market; selling or buying currency futures contracts, options or other securities thereon; borrowing funds denominated in particular currencies; or any combination thereof, depending on the availability of liquidity in the hedging instruments and their relative costs. There can be no assurance that such strategies will be implemented or, if implemented, will be effective. The Fund would incur additional costs from hedging.
Debt Obligations Risk: Debt obligations are subject to credit risk, market risk and interest rate risk. The Fund’s holdings, share price, yield and total return may also fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to reinvest at the same rate of interest and therefore would earn less income.
Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivatives transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” or may create economic leverage for the Fund. and therefore may magnify or otherwise increase
72
investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders.
Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, many over-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument. Over-the-counter derivative instruments also involve the risk that the other party will not meet its obligations to the Fund. The use of derivatives also exposes the Fund to operational issues, such as documentation and settlement issues, systems failures, inadequate control and human error.
Derivatives may also involve legal risks, such as insufficient documentation, the lack of capacity or authority of a counterparty to execute or settle a transaction, and the legality and enforceability of derivatives contracts. The U.S. Government and foreign governments have adopted (and may adopt further) regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements and risk exposure limitations. Regulation of derivatives may make derivatives more costly, limit their availability or utility to the Fund, or otherwise adversely affect their performance or disrupt markets.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation, may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and
PGIM Emerging Markets Debt Local Currency Fund 73
Notes to Financial Statements (continued)
emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Interest Rate Risk: The value of your investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration debt securities. Similarly, a rise in interest rates may also have a greater negative impact on the value of equity securities whose issuers expect earnings further out in the future. For example, a fixed income security with a duration of three years is expected to decrease in value by approximately 3% if interest rates increase by 1%. This is referred to as “duration risk.” When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings
74
may fall sharply. This is referred to as “extension risk.” The Fund may lose money if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Junk Bonds Risk: High-yield, high-risk bonds have predominantly speculative characteristics, including particularly high credit risk. Junk bonds tend to have lower market liquidity than higher-rated securities. The liquidity of particular issuers or industries within a particular investment category may shrink or disappear suddenly and without warning. The non-investment grade bond market can experience sudden and sharp price swings and become illiquid due to a variety of factors, including changes in economic forecasts, stock market activity, large sustained sales by major investors, a high profile default or a change in the market’s psychology.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or
PGIM Emerging Markets Debt Local Currency Fund 75
Notes to Financial Statements (continued)
conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
Non-Diversified Investment Company Risk: The Fund is non-diversified for purposes of the 1940 Act. This means that the Fund may invest a greater percentage of its assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund.
10. | Recent Regulatory Developments |
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
76
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Emerging Markets Debt Local Currency Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Emerging Markets Debt Local Currency Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 19, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Emerging Markets Debt Local Currency Fund 77
Tax Information (unaudited)
For the year ended October 31, 2023, the Fund reports the maximum amount allowable but not less than 2.05% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.
For the year ended October 31, 2023 the Fund reports the maximum amount allowable but not less than 72.30% as interest dividends that are eligible to be treated as interest income in accordance with Section 163(j) of the Internal Revenue Code.
In January 2024, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2023. call your financial adviser.
We are required by Massachusetts, Missouri and Oregon to inform you that dividends which have been derived from interest on federal obligations are not taxable to shareholders provided the Fund meets certain requirements mandated by the respective state’s taxing authorities. We are pleased to report that 1.73% of the dividends paid by the Fund qualify for such deduction.
For more detailed information regarding your state and local taxes, you should contact your tax advisor or the state/local taxing authorities.
78
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members
| ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Emerging Markets Debt Local Currency Fund
Independent Board Members
| ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
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Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Emerging Markets Debt Local Currency Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer (“PEO”) (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Emerging Markets Debt Local Currency Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Emerging Markets Debt Local Currency Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) | Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively. |
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Emerging Markets Debt Local Currency Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Emerging Markets Debt Local Currency Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”), the Fund’s subadvisory agreement with PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit (“PGIM Fixed Income”), and the Fund’s sub-subadvisory agreement with PGIM Limited (“PGIML”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments, PGIM, and, where appropriate, affiliates of PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments, the subadviser, and, as relevant, its affiliates, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
1PGIM Emerging Markets Debt Local Currency Fund is a series of Prudential World Fund, Inc.
PGIM Emerging Markets Debt Local Currency Fund
Approval of Advisory Agreements (continued)
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, between PGIM Investments and PGIM, which, through its PGIM Fixed Income unit, serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, and between PGIM and PGIML, which serves as the Fund’s sub-subadviser pursuant to the terms of a sub-subadvisory agreement with PGIM, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments, PGIM Fixed Income, and PGIML. The Board noted that PGIM Fixed Income and PGIML are affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser and sub-subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser and sub-subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser and sub-subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Fixed Income and PGIML, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser and sub-subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser and sub-subadviser, to renew the subadvisory and sub-subadvisory agreements.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund, PGIM, and PGIML, and also considered the qualifications, backgrounds and responsibilities of PGIM Fixed Income’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments, PGIM Fixed Income’s, and PGIML’s organizational structure, senior management, investment operations, and other relevant information
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pertaining to PGIM Investments, PGIM Fixed Income, and PGIML. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments, PGIM Fixed Income, and PGIML.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments, the subadvisory services provided to the Fund by PGIM Fixed Income, and the sub-subadvisory services provided by PGIML, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, PGIM Fixed Income, and PGIML under the management, subadvisory and sub-subadvisory agreements.
Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments for the year ended December 31, 2022 exceeded the management fees received by PGIM Investments, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments investment in the Fund over time. The Board noted that economies of scale may be shared with the Fund in several ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
PGIM Emerging Markets Debt Local Currency Fund
Approval of Advisory Agreements (continued)
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments, PGIM Fixed Income, and PGIML
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Fixed Income, PGIML and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Fixed Income and PGIML included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to their reputations. The Board concluded that the benefits derived by PGIM Investments, PGIM Fixed Income, and PGIML were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three- and five-year periods ended December 31, 2022.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table
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sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
Net Performance
| 1 Year | 3 Years | 5 Years | 10 Years | ||||
2nd Quartile | 1st Quartile | 2nd Quartile | 2nd Quartile | |||||
Actual Management Fees: 2nd Quartile | ||||||||
Net Total Expenses: 1st Quartile |
· | The Board noted that the Fund outperformed its benchmark index over all periods. |
· | The Board and PGIM Investments agreed to retain the existing contractual expense cap that (exclusive of other fees and expenses) caps the Fund’s annual operating expenses at 1.13% for Class A shares, 1.88% for Class C shares, 0.65% for Class R6 shares and 0.72% for Class Z shares through February 29, 2024. |
· | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
· | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
· | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Emerging Markets Debt Local Currency Fund
655 Broad Street
Newark, NJ 07102 | ⬛ TELEPHONE
(800) 225-1852 | ⬛ WEBSITE
pgim.com/investments |
PROXY VOTING
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.
DIRECTORS
Ellen S. Alberding ● Kevin J. Bannon ● Scott E. Benjamin ● Linda W. Bynoe ● Barry H. Evans ● Keith F. Hartstein ● Laurie Simon Hodrick ●
Stuart S. Parker ● Brian K. Reid ● Grace C. Torres
OFFICERS
Stuart S. Parker, President ● Scott E. Benjamin, Vice President ● Christian J. Kelly, Chief Financial Officer ● Claudia DiGiacomo, Chief Legal Officer ● Andrew Donohue, Chief Compliance Officer ● Russ Shupak, Treasurer and Principal Accounting Officer ● Kelly Florio, Anti-Money Laundering Compliance Officer ● Andrew R. French, Secretary ● Melissa Gonzalez, Assistant Secretary ● Kelly A. Coyne, Assistant Secretary ● Patrick E. McGuinness, Assistant Secretary ● Debra Rubano, Assistant Secretary ● George Hoyt, Assistant Secretary ● Devan Goolsby, Assistant Secretary ● Lana Lomuti, Assistant Treasurer ● Elyse M. McLaughlin, Assistant Treasurer ● Deborah Conway, Assistant Treasurer ● Robert W. McCormack, Assistant Treasurer
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISER | PGIM Fixed Income | 655 Broad Street Newark, NJ 07102 | ||
SUB-SUBADVISER | PGIM Limited | Grand Buildings, 1-3 Strand Trafalgar Square London, WC2N 5HR United Kingdom | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.
E-DELIVERY
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Emerging Markets Debt Local Currency Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee.
AVAILABILITY OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852.
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM EMERGING MARKETS DEBT LOCAL CURRENCY FUND
SHARE CLASS | A | C | Z | R6 | ||||
NASDAQ | EMDAX | EMDCX | EMDZX | EMDQX | ||||
CUSIP | 743969750 | 743969743 | 743969727 | 743969735 |
MF212E
PGIM JENNISON GLOBAL INFRASTRUCTURE FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM Jennison Global Infrastructure Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Global Infrastructure Fund
December 15, 2023
PGIM Jennison Global Infrastructure Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||
Class A | ||||||||
(with sales charges) | -8.24 | 3.85 | 4.19 | — | ||||
(without sales charges) | -2.90 | 5.03 | 4.79 | — | ||||
Class C | ||||||||
(with sales charges) | -4.53 | 4.24 | 4.00 | — | ||||
(without sales charges) | -3.59 | 4.24 | 4.00 | — | ||||
Class Z | ||||||||
(without sales charges) | -2.57 | 5.37 | 5.09 | — | ||||
Class R6 | ||||||||
(without sales charges) | -2.58 | 5.37 | N/A | 5.40 (12/28/2016) | ||||
S&P Global Infrastructure Index | ||||||||
-2.23 | 3.38 | 3.49 | — | |||||
S&P 500 Index | ||||||||
10.14 | 11.01 | 11.18 | — |
Average Annual Total Returns as of 10/31/23 Since Inception (%) | ||
Class R6
(12/28/2016) | ||
S&P Global Infrastructure Index | 3.66 | |
S&P 500 Index | 11.59 |
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Indexes are measured from the closest month-end to the class’s inception date.
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the S&P Global Infrastructure Index by portraying the initial account values at the beginning of 10-year period of Class Z shares (October 31, 2013) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Jennison Global Infrastructure Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R6 | |||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | None | None |
Benchmark Definitions
S&P Global Infrastructure Index—The S&P Global Infrastructure Index is an unmanaged index that consists of 75 companies from around the world that represent the listed infrastructure universe. To create diversified exposure across the global listed infrastructure market, the Index has balanced weights across three distinct infrastructure clusters: Utilities, Transportation, and Energy.
S&P 500 Index*—The S&P 500 Index is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how large company stocks in the United States have performed.
*The S&P 500 Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by PGIM, Inc. and/or its affiliates. Copyright ©2023 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com.S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC.
Investors cannot invest directly in an index. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Presentation of Fund Holdings as of 10/31/23
Ten Largest Holdings | Line of Business | Country | % of Net Assets | |||
Vinci SA | Construction & Engineering | France | 4.2% | |||
Southern Co. (The) | Electric Utilities | United States | 4.1% | |||
Ferrovial SE | Construction & Engineering | United States | 4.1% | |||
Targa Resources Corp. | Oil, Gas & Consumable Fuels | United States | 4.1% | |||
Aena SME SA, 144A | Transportation Infrastructure | Spain | 4.0% | |||
Cheniere Energy, Inc. | Oil, Gas & Consumable Fuels | United States | 3.9% | |||
NiSource, Inc. | Multi-Utilities | United States | 3.7% | |||
Centrica plc | Multi-Utilities | United Kingdom | 3.6% | |||
PG&E Corp. | Electric Utilities | United States | 3.4% | |||
Constellation Energy Corp. | Electric Utilities | United States | 3.3% |
Holdings reflect only long-term investments and are subject to change.
PGIM Jennison Global Infrastructure Fund 7
Strategy and Performance Overview* (unaudited)
How did the Fund perform?
The PGIM Jennison Global Infrastructure Fund’s Class Z shares returned –2.57% in the 12-month reporting period that ended October 31, 2023, underperforming the –2.23% return of the S&P Global Infrastructure Index (the Index).
What was the market environment?
· | Prior to the start of the reporting period, in June 2022, inflation rose above 9%, the highest level in four decades. Between March 2022 and July 2023, the US Federal Reserve (Fed) raised the federal funds rate 11 times, from near zero to a range of 5.25%–5.50%, reflecting the Fed’s urgency in reestablishing price stability. |
· | Calendar year 2022 ended with investors uncertain about inflationary pressures and Fed policy, heightened geopolitical tensions, war in Ukraine, and expectations that US economic growth would slow and could enter a recession. Companies took aggressive steps to rationalize costs, expecting a more challenging environment ahead. In this environment, stocks generally continued to underperform, as they had earlier in 2022. |
· | In the first half of 2023, the economy delivered better-than-feared results, with continued—albeit moderating growth led by resilient consumer spending amid ongoing labor market strength. As inflationary pressures eased, the Fed slowed the pace of monetary tightening, which encouraged investors, as did stronger-than-expected earnings reports. Investors appeared surprised that many companies were able to effectively cut their costs and stabilize profit margins, enabling them to exceed Wall Street expectations. |
· | In late summer, markets stumbled again in the face of the increasing likelihood that the Fed would maintain rates at elevated levels for longer than previously expected, due to rising energy prices, sustained wage pressures, and the broad persistence of above-target inflation. By the end of the third quarter, macroeconomic and political developments began adding to investor unease. Threats of a federal government shutdown, strikes at several US automakers, and tensions with China made the path to slower growth and a soft landing appear less smooth or likely than expected. Oil prices moved higher in response to coordinated supply restraints implemented by the OPEC group of oil exporting nations, which drove a subsequent rebound in gasoline prices. US consumer confidence ticked down over the summer months, while employment and home prices held firm. |
· | Global Infrastructure stocks, as represented by the Index, declined for the period and lagged the broader equity market. Among infrastructure sectors, telecommunications infrastructure (not represented in the Index) declined the most, followed by declines in utilities and then midstream energy. Transportation stocks were down only modestly. |
What worked?
· | The Fund’s performance relative to the Index benefited during the reporting period from strong stock selection in both the utility and transportation sectors. |
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· | The Fund’s utility holdings, including Centrica plc, National Grid plc, and Terna SpA, provided the largest contributions to relative performance. |
· | Several transportation stocks, including Ferrovial SE, Vinci SA, Sacyr SA, and Eiffage SA, also contributed. |
· | Other contributors included positions in Targa Resources Corp., Digital Realty Trust, Inc., Exelon Corp., and The Williams Companies, Inc. |
What didn’t work?
· | The Fund underperformed the broad stock market, with declines in telecommunications and midstream energy being the largest detractors. Compared to the Index, an underweight allocation to midstream energy, as well as an off-Index allocation to telecommunications infrastructure, were the most significant detractors from relative performance. |
· | Utility stocks NextEra Energy, Inc., NextEra Energy Partners LP, Dominion Energy, Inc., and Drax Group plc detracted from relative performance. |
· | Transportation stocks Grupo Aeroportuario del Pacifico SAB de CV, Aeroports de Paris SA, and Norfolk Southern Corp. also detracted from performance. |
· | Other notable detractors included Cheniere Energy, Inc., SBA Communications Corp., and SSE plc. |
Current outlook
· | The pronounced rise in market interest rates in the US and Europe weighed heavily on investor sentiment during the reporting period and presented a meaningful headwind to the performance of much of the listed infrastructure universe, particularly within the utilities, transportation, and towers sectors. A sharp rise in crude oil prices—along with concern that central banks would keep rates higher for longer than previously expected—contributed to the rise in market interest rates. At the same time, the increase in oil prices buoyed investor sentiment regarding the energy sector, including the Fund’s midstream energy infrastructure holdings. Jennison continues to believe that the defensive nature of listed infrastructure stocks should continue to appeal to investors, as the global economic outlook remains uncertain. Despite expectations for continued market volatility, Jennison remains positive regarding the long-term fundamental outlook for the Fund’s holdings across all four infrastructure sectors. Additionally, Jennison continues to believe that environmental, social, and governance (ESG) factors are likely to prove increasingly influential in determining investment outcomes over time. |
· | Jennison projects the Fund’s utilities holdings will generate mid-high, single-digit earnings growth with commensurate dividend growth, supported by highly visible, regulated capital expenditure trajectories and improving regulatory regimes. In particular, utilities are well positioned to capitalize on the energy transition. In Jennison’s view, energy transition investment is supported by two broad and enduring themes: (1) pronounced reductions in the cost of renewable energy, driven by continued technological advancement, and (2) increasing public policy support, driven by concerns over greenhouse gas emissions, energy security, and most |
PGIM Jennison Global Infrastructure Fund 9
Strategy and Performance Overview* (continued)
recently, job creation. The many decarbonization-related financial incentives included in the US Inflation Reduction Act will likely accelerate the energy transition in the US. In Europe, energy policy uncertainty, driven by the need to transition away from Russian energy supply, led to weakness in stock prices of European utilities for most of 2022. However, in 2023, Jennison added to the Fund’s European utilities exposure, as clarity around policy decisions increased, policy changes proved largely benign, and the risk/reward proposition for the Fund’s holdings appeared favorable. |
· | After lackluster absolute performance through the first half of 2023, the Fund’s midstream holdings performed much better as investors appeared to gain better appreciation for the companies’ cash flow resiliency and improving capital return potential. In Jennison’s view, companies with strong balance sheets, integrated asset systems with multiple touchpoints across the energy value chain, and strong ESG metrics are likely to continue to fare well going forward. Additionally, Jennison believes the Fund’s energy infrastructure holdings are poised for a noteworthy, upward inflection in free cash flow and return of capital to shareholders through dividend increases and/or share repurchases. |
· | Transportation infrastructure stocks generally rallied to start the year, reflecting a more optimistic outlook for growth, especially in Europe, before giving back some gains later in the period. Jennison modestly trimmed the Fund’s European transport exposure and increased North American rail exposure, which rallied as service levels improved, and volumes appeared closer to bottoming. Generally, toll road stocks continued to see solid traffic and pricing trends, with strong performance at Ferrovial’s managed lanes in Texas, while political concerns negatively affected French toll road stocks. Airport stocks in Europe and Mexico benefited from very strong peak summer demand trends and strong retail spend per passenger. Looking forward, Jennison believes the Fund’s airport exposure will benefit from improving China/Pacific traffic into 2024. Jennison also remains constructive on US waste stocks, which continue to exhibit defensive characteristics and strong pricing power. |
· | Regarding communications infrastructure, Jennison favors data centers that are well-positioned to capitalize on two related themes: 1) robust growth from existing data demand drivers and growing contributions from generative artificial intelligence, and 2) rising pricing power related to tight supply and increased value of specialization, particularly for the hyperscale market. Jennison continues to see investment opportunities among wireless tower companies, given their recession-resistant business models (including inflation-adjusted revenues), which benefit from expanded, carrier-funded 5G network deployment. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Jennison Global Infrastructure Fund 11
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Jennison Global Infrastructure Fund | Beginning Account Value May 1, 2023 | Ending Account Value | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $ 897.30 | 1.53% | $ 7.32 | |||||
Hypothetical | $1,000.00 | $1,017.49 | 1.53% | $ 7.78 | ||||||
Class C | Actual | $1,000.00 | $ 894.30 | 2.28% | $10.89 | |||||
Hypothetical | $1,000.00 | $1,013.71 | 2.28% | $11.57 | ||||||
Class Z | Actual | $1,000.00 | $ 899.10 | 1.19% | $ 5.70 | |||||
Hypothetical | $1,000.00 | $1,019.21 | 1.19% | $ 6.06 | ||||||
Class R6 | Actual | $1,000.00 | $ 899.00 | 1.19% | $ 5.70 | |||||
Hypothetical | $1,000.00 | $1,019.21 | 1.19% | $ 6.06 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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as of October 31, 2023
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 98.2% | ||||||||
COMMON STOCKS | ||||||||
Australia 2.8% | ||||||||
Transurban Group, UTS | 131,054 | $ | 986,639 | |||||
Canada 2.2% | ||||||||
Canadian Pacific Kansas City Ltd. | 10,902 | 774,048 | ||||||
France 6.4% | ||||||||
Eiffage SA | 4,707 | 427,163 | ||||||
Engie SA | 22,542 | 358,528 | ||||||
Vinci SA | 13,465 | 1,488,884 | ||||||
|
| |||||||
2,274,575 | ||||||||
Germany 4.3% | ||||||||
E.ON SE | 30,262 | 360,061 | ||||||
Fraport AG Frankfurt Airport Services Worldwide* | 8,167 | 405,896 | ||||||
RWE AG | 19,718 | 754,518 | ||||||
|
| |||||||
1,520,475 | ||||||||
Italy 6.2% | ||||||||
Enav SpA, 144A | 95,517 | 318,354 | ||||||
Enel SpA | 121,767 | 772,926 | ||||||
Infrastrutture Wireless Italiane SpA, 144A | 66,431 | 727,409 | ||||||
Terna - Rete Elettrica Nazionale | 52,614 | 402,867 | ||||||
|
| |||||||
2,221,556 | ||||||||
Japan 1.1% | ||||||||
West Japan Railway Co. | 10,256 | 390,903 | ||||||
Mexico 0.7% | ||||||||
Grupo Aeroportuario del Pacifico SAB de CV (Class B Stock) | 22,774 | 265,888 | ||||||
New Zealand 1.5% | ||||||||
Auckland International Airport Ltd. | 124,727 | 533,492 | ||||||
Spain 9.0% | ||||||||
Aena SME SA, 144A | 9,803 | 1,422,422 | ||||||
EDP Renovaveis SA | 11,869 | 190,936 | ||||||
Iberdrola SA | 69,877 | 777,173 | ||||||
Sacyr SA | 291,806 | 842,614 | ||||||
|
| |||||||
3,233,145 |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Thailand 0.5% | ||||||||
Airports of Thailand PCL* | 100,324 | $ | 186,263 | |||||
United Kingdom 8.7% | ||||||||
Centrica PLC | 674,994 | 1,292,141 | ||||||
Drax Group PLC | 67,196 | 345,238 | ||||||
National Grid PLC | 32,525 | 387,795 | ||||||
SSE PLC | 54,373 | 1,080,585 | ||||||
|
| |||||||
3,105,759 | ||||||||
United States 54.8% | ||||||||
American Tower Corp., REIT | 2,147 | 382,574 | ||||||
CenterPoint Energy, Inc. | 39,555 | 1,063,238 | ||||||
Cheniere Energy, Inc. | 8,467 | 1,409,078 | ||||||
CMS Energy Corp. | 13,906 | 755,652 | ||||||
Constellation Energy Corp. | 10,450 | 1,180,014 | ||||||
CSX Corp. | 24,825 | 741,026 | ||||||
Digital Realty Trust, Inc., REIT | 9,333 | 1,160,652 | ||||||
Equinix, Inc., REIT | 1,053 | 768,311 | ||||||
Ferrovial SE | 48,855 | 1,470,342 | ||||||
NextEra Energy, Inc. | 16,125 | 940,087 | ||||||
NiSource, Inc. | 51,866 | 1,304,949 | ||||||
Norfolk Southern Corp. | 1,787 | 340,942 | ||||||
PG&E Corp.* | 74,061 | 1,207,194 | ||||||
Public Service Enterprise Group, Inc. | 9,092 | 560,522 | ||||||
Sempra | 13,915 | 974,467 | ||||||
Southern Co. (The) | 21,854 | 1,470,774 | ||||||
Targa Resources Corp. | 17,393 | 1,454,229 | ||||||
Union Pacific Corp. | 2,748 | 570,512 | ||||||
Vistra Corp. | 16,621 | 543,839 | ||||||
Waste Connections, Inc. | 3,239 | 419,451 | ||||||
Williams Cos., Inc. (The) | 24,589 | 845,862 | ||||||
|
| |||||||
19,563,715 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 35,056,458 | |||||||
|
|
See Notes to Financial Statements.
14
Description | Shares | Value | ||||||
SHORT-TERM INVESTMENT 1.3% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
PGIM Core Government Money Market Fund | 466,760 | $ | 466,760 | |||||
|
| |||||||
TOTAL INVESTMENTS 99.5% | 35,523,218 | |||||||
Other assets in excess of liabilities 0.5% | 165,195 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 35,688,413 | ||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
REITs—Real Estate Investment Trust
SOFR—Secured Overnight Financing Rate
UTS—Unit Trust Security
* | Non-income producing security. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Long-Term Investments | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | — | $ | 986,639 | $— | |||||||
Canada | 774,048 | — | — | |||||||||
France | — | 2,274,575 | — | |||||||||
Germany | — | 1,520,475 | — | |||||||||
Italy | — | 2,221,556 | — | |||||||||
Japan | — | 390,903 | — | |||||||||
Mexico | 265,888 | — | — | |||||||||
New Zealand | — | 533,492 | — | |||||||||
Spain | — | 3,233,145 | — |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Assets (continued) | ||||||||||||
Long-Term Investments (continued) | ||||||||||||
Common Stocks (continued) | ||||||||||||
Thailand | $ | — | $ | 186,263 | $— | |||||||
United Kingdom | — | 3,105,759 | — | |||||||||
United States | 18,093,373 | 1,470,342 | — | |||||||||
Short-Term Investment | ||||||||||||
Affiliated Mutual Fund | 466,760 | — | — | |||||||||
|
|
|
| |||||||||
Total | $ | 19,600,069 | $ | 15,923,149 | $— | |||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of October 31, 2023 were as follows:
Electric Utilities | 21.9 | % | ||
Multi-Utilities | 19.8 | |||
Construction & Engineering | 11.8 | |||
Transportation Infrastructure | 11.6 | |||
Oil, Gas & Consumable Fuels | 10.4 | |||
Ground Transportation | 8.0 | |||
Specialized REITs | 6.4 | |||
Independent Power & Renewable Electricity Producers | 5.1 |
Diversified Telecommunication Services | 2.0 | % | ||
Affiliated Mutual Fund | 1.3 | |||
Commercial Services & Supplies | 1.2 | |||
|
| |||
99.5 | ||||
Other assets in excess of liabilities | 0.5 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
16
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $30,983,194) | $ | 35,056,458 | ||
Affiliated investments (cost $466,760) | 466,760 | |||
Receivable for investments sold | 131,812 | |||
Tax reclaim receivable | 73,351 | |||
Dividends receivable | 55,295 | |||
Receivable for Fund shares sold | 42,662 | |||
Prepaid expenses | 1,012 | |||
|
| |||
Total Assets | 35,827,350 | |||
|
| |||
Liabilities | ||||
Payable for Fund shares purchased | 46,035 | |||
Audit fee payable | 28,621 | |||
Management fee payable | 23,735 | |||
Custodian and accounting fees payable | 10,933 | |||
Transfer agent’s fees and expenses payable | 7,195 | |||
Professional fees payable | 5,974 | |||
Accrued expenses and other liabilities | 5,412 | |||
Distribution fee payable | 3,897 | |||
Shareholders’ reports fee payable | 3,738 | |||
Affiliated transfer agent fee payable | 2,325 | |||
Directors’ fees payable | 977 | |||
Payable to custodian | 95 | |||
|
| |||
Total Liabilities | 138,937 | |||
|
| |||
Net Assets | $ | 35,688,413 | ||
|
| |||
| ||||
Net assets were comprised of: | ||||
Common stock, at par | $ | 26 | ||
Paid-in capital in excess of par | 33,528,912 | |||
Total distributable earnings (loss) | 2,159,475 | |||
|
| |||
Net assets, October 31, 2023 | $ | 35,688,413 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 17
Statement of Assets and Liabilities
as of October 31, 2023
Class A |
| |||
Net asset value and redemption price per share, ($9,079,537 ÷ 672,457 shares of common stock issued and outstanding) | $ | 13.50 | ||
Maximum sales charge (5.50% of offering price) | 0.79 | |||
|
| |||
Maximum offering price to public | $ | 14.29 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, ($2,331,609 ÷ 176,067 shares of common stock issued and outstanding) | $ | 13.24 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, ($14,385,182 ÷ 1,064,256 shares of common stock issued and outstanding) | $ | 13.52 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share, ($9,892,085 ÷ 732,050 shares of common stock issued and outstanding) | $ | 13.51 | ||
|
|
See Notes to Financial Statements.
18
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) |
| |||
Income | ||||
Unaffiliated dividend income (net of $107,574 foreign withholding tax) | $ | 1,699,104 | ||
Affiliated dividend income | 29,243 | |||
Affiliated income from securities lending, net | 379 | |||
|
| |||
Total income | 1,728,726 | |||
|
| |||
Expenses | ||||
Management fee | 549,930 | |||
Distribution fee(a) | 59,011 | |||
Transfer agent’s fees and expenses (including affiliated expense of $13,568)(a) | 63,174 | |||
Custodian and accounting fees | 61,607 | |||
Professional fees | 49,088 | |||
Registration fees(a) | 29,915 | |||
Audit fee | 28,620 | |||
Shareholders’ reports | 20,308 | |||
Directors’ fees | 10,743 | |||
SEC registration fees | 1,440 | |||
Miscellaneous | 24,007 | |||
|
| |||
Total expenses | 897,843 | |||
Less: Fee waiver and/or expense reimbursement(a) | (178,019 | ) | ||
Distribution fee waiver(a) | (4,874 | ) | ||
|
| |||
Net expenses | 714,950 | |||
|
| |||
Net investment income (loss) | 1,013,776 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (1,396,987 | ) | ||
In-kind redemptions(1) | (248,030 | ) | ||
Foreign currency transactions | (948 | ) | ||
|
| |||
(1,645,965 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 84,406 | |||
Foreign currencies | 1,819 | |||
|
| |||
86,225 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (1,559,740 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (545,964 | ) | |
|
|
(1) | See Note 9, Purchases & Redemption In-kind, in Notes to Financial Statements |
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 29,243 | 29,768 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 19,301 | 4,938 | 38,602 | 333 | ||||||||||||
Registration fees | 7,462 | 6,163 | 10,878 | 5,412 | ||||||||||||
Fee waiver and/or expense reimbursement | (37,276) | (13,947) | (95,318) | (31,478) | ||||||||||||
Distribution fee waiver | (4,874) | — | — | — |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 19
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
|
| |||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 1,013,776 | $ | 748,400 | ||||
Net realized gain (loss) on investment and foreign currency transactions | (1,645,965 | ) | 735,185 | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 86,225 | (8,373,785 | ) | |||||
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|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (545,964 | ) | (6,890,200 | ) | ||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (337,388 | ) | (601,050 | ) | ||||
Class C | (93,436 | ) | (299,687 | ) | ||||
Class Z | (1,033,637 | ) | (2,030,688 | ) | ||||
Class R6 | (642,318 | ) | (1,207,913 | ) | ||||
|
|
|
| |||||
(2,106,779 | ) | (4,139,338 | ) | |||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 11,460,820 | 31,402,800 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 2,105,393 | 4,134,256 | ||||||
Cost of shares purchased | (39,735,852 | ) | (15,178,225 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | (26,169,639 | ) | 20,358,831 | |||||
|
|
|
| |||||
Total increase (decrease) | (28,822,382 | ) | 9,329,293 | |||||
Net Assets: | ||||||||
Beginning of year | 64,510,795 | 55,181,502 | ||||||
|
|
|
| |||||
End of year | $ | 35,688,413 | $ | 64,510,795 | ||||
|
|
|
|
See Notes to Financial Statements.
20
Financial Highlights
Class A Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $ | 14.41 | $ | 17.15 | $ | 13.80 | $ | 14.66 | $ | 12.21 | ||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.14 | 0.09 | 0.14 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.62 | ) | (1.64 | ) | 3.36 | (0.86 | ) | 2.49 | ||||||||||||
Total from investment operations | (0.39 | ) | (1.50 | ) | 3.45 | (0.72 | ) | 2.67 | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.14 | ) | (0.10 | ) | (0.12 | ) | (0.21 | ) | ||||||||||
Tax return of capital distributions | - | - | - | (0.02 | ) | (0.01 | ) | |||||||||||||
Distributions from net realized gains | (0.26 | ) | (1.10 | ) | - | - | - | |||||||||||||
Total dividends and distributions | (0.52 | ) | (1.24 | ) | (0.10 | ) | (0.14 | ) | (0.22 | ) | ||||||||||
Net asset value, end of year | $ | 13.50 | $ | 14.41 | $ | 17.15 | $ | 13.80 | $ | 14.66 | ||||||||||
Total Return(b): | (2.90 | )% | (9.23 | )% | 25.04 | % | (4.93 | )% | 22.01 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 9,080 | $ | 8,806 | $ | 8,153 | $ | 5,961 | $ | 7,637 | ||||||||||
Average net assets (000) | $ | 9,748 | $ | 8,278 | $ | 7,154 | $ | 6,859 | $ | 7,718 | ||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.52 | %(d) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.95 | % | 1.90 | % | 1.99 | % | 2.20 | % | 2.10 | % | ||||||||||
Net investment income (loss) | 1.56 | % | 0.92 | % | 0.55 | % | 0.95 | % | 1.34 | % | ||||||||||
Portfolio turnover rate(e) | 84 | % | 89 | % | 72 | % | 62 | % | 62 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.02% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 21
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $ | 14.16 | $ | 16.90 | $ | 13.63 | $ | 14.51 | $ | 12.12 | ||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.12 | 0.04 | (0.03 | )(b) | 0.03 | 0.08 | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.60 | ) | (1.63 | ) | 3.31 | (0.84 | ) | 2.45 | ||||||||||||
Total from investment operations | (0.48 | ) | (1.59 | ) | 3.28 | (0.81 | ) | 2.53 | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.05 | ) | (0.01 | ) | (0.05 | ) | (0.13 | ) | ||||||||||
Tax return of capital distributions | - | - | - | (0.02 | ) | (0.01 | ) | |||||||||||||
Distributions from net realized gains | (0.26 | ) | (1.10 | ) | - | - | - | |||||||||||||
Total dividends and distributions | (0.44 | ) | (1.15 | ) | (0.01 | ) | (0.07 | ) | (0.14 | ) | ||||||||||
Net asset value, end of year | $ | 13.24 | $ | 14.16 | $ | 16.90 | $ | 13.63 | $ | 14.51 | ||||||||||
Total Return(c): | (3.59 | )% | (9.91 | )% | 24.10 | % | (5.63 | )% | 21.01 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 2,332 | $ | 3,737 | $ | 4,336 | $ | 3,242 | $ | 4,135 | ||||||||||
Average net assets (000) | $ | 2,977 | $ | 4,348 | $ | 3,720 | $ | 3,771 | $ | 4,131 | ||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.26 | %(e) | 2.25 | % | 2.25 | % | 2.25 | % | 2.25 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 2.73 | % | 2.60 | % | 2.79 | % | 3.05 | % | 2.90 | % | ||||||||||
Net investment income (loss) | 0.85 | % | 0.27 | % | (0.21 | )% | 0.21 | % | 0.59 | % | ||||||||||
Portfolio turnover rate(f) | 84 | % | 89 | % | 72 | % | 62 | % | 62 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.01% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
22
Class Z Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $14.42 | $17.16 | $13.80 | $14.66 | $12.21 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.29 | 0.20 | 0.14 | 0.18 | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.63 | ) | (1.65 | ) | 3.37 | (0.85 | ) | 2.48 | ||||||||||||
Total from investment operations | (0.34 | ) | (1.45 | ) | 3.51 | (0.67 | ) | 2.71 | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.19 | ) | (0.15 | ) | (0.17 | ) | (0.25 | ) | ||||||||||
Tax return of capital distributions | - | - | - | (0.02 | ) | (0.01 | ) | |||||||||||||
Distributions from net realized gains | (0.26 | ) | (1.10 | ) | - | - | - | |||||||||||||
Total dividends and distributions | (0.56 | ) | (1.29 | ) | (0.15 | ) | (0.19 | ) | (0.26 | ) | ||||||||||
Net asset value, end of year | $13.52 | $14.42 | $17.16 | $13.80 | $14.66 | |||||||||||||||
Total Return(b): | (2.57 | )% | (8.93 | )% | 25.42 | % | (4.56 | )% | 22.30 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $14,385 | $26,049 | $25,429 | $20,148 | $21,868 | |||||||||||||||
Average net assets (000) | $27,102 | $27,109 | $24,462 | $21,048 | $21,608 | |||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.18 | %(d) | 1.17 | % | 1.17 | % | 1.17 | % | 1.17 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.53 | % | 1.47 | % | 1.55 | % | 1.66 | % | 1.57 | % | ||||||||||
Net investment income (loss) | 1.98 | % | 1.29 | % | 0.92 | % | 1.25 | % | 1.66 | % | ||||||||||
Portfolio turnover rate(e) | 84 | % | 89 | % | 72 | % | 62 | % | 62 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.01% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund 23
Financial Highlights (continued)
Class R6 Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $14.41 | $17.15 | $13.80 | $14.66 | $12.21 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.29 | 0.21 | 0.12 | 0.18 | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.63 | ) | (1.66 | ) | 3.38 | (0.85 | ) | 2.48 | ||||||||||||
Total from investment operations | (0.34 | ) | (1.45 | ) | 3.50 | (0.67 | ) | 2.71 | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.19 | ) | (0.15 | ) | (0.17 | ) | (0.25 | ) | ||||||||||
Tax return of capital distributions | - | - | - | (0.02 | ) | (0.01 | ) | |||||||||||||
Distributions from net realized gains | (0.26 | ) | (1.10 | ) | - | - | - | |||||||||||||
Total dividends and distributions | (0.56 | ) | (1.29 | ) | (0.15 | ) | (0.19 | ) | (0.26 | ) | ||||||||||
Net asset value, end of year | $13.51 | $14.41 | $17.15 | $13.80 | $14.66 | |||||||||||||||
Total Return(b): | (2.58 | )% | (8.93 | )% | 25.44 | % | (4.62 | )% | 22.40 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $9,892 | $25,919 | $17,263 | $5,636 | $11,954 | |||||||||||||||
Average net assets (000) | $15,166 | $23,177 | $11,389 | $8,565 | $13,787 | |||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.18 | %(d) | 1.17 | % | 1.17 | % | 1.17 | % | 1.17 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.39 | % | 1.32 | % | 1.40 | % | 1.66 | % | 1.48 | % | ||||||||||
Net investment income (loss) | 1.97 | % | 1.34 | % | 0.74 | % | 1.28 | % | 1.70 | % | ||||||||||
Portfolio turnover rate(e) | 84 | % | 89 | % | 72 | % | 62 | % | 62 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.01% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
24
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Jennison Global Infrastructure Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is to seek total return.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the
PGIM Jennison Global Infrastructure Fund 25
Notes to Financial Statements (continued)
Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
26
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover
PGIM Jennison Global Infrastructure Fund 27
Notes to Financial Statements (continued)
the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Equity and Mortgage Real Estate Investment Trusts (collectively REITs): The Fund invested in REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the REITs.
28
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |
Net Investment Income | Quarterly | |
Short-Term Capital Gains | Annually | |
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
PGIM Jennison Global Infrastructure Fund 29
Notes to Financial Statements (continued)
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “subadviser”). The Manager pays for the services of Jennison.
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |||
1.00% of average daily net assets up to $1 billion; | 1.00% | |||
0.98% of average daily net assets from $1 billion to $3 billion; | ||||
0.96% of average daily net assets from $3 billion to $5 billion; | ||||
0.95% of average daily net assets from $5 billion to $10 billion; | ||||
0.94% of average daily net assets over $10 billion |
The Manager has contractually agreed, through February 28, 2025, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives similar expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for the fiscal year. The expense limitations attributable to each class are as follows:
Class | Expense Limitations | |
A | 1.50% |
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Class | Expense Limitations | |
C | 2.25% | |
Z | 1.17 | |
R6 | 1.17 |
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through February 28, 2025 to limit such fees on certain classes based on the daily net assets. The distribution fees are accrued daily and payable monthly.
The Fund’s annual gross and net distribution rates, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | ||
A | 0.30% | 0.25% | ||
C | 1.00 | 1.00 | ||
Z | N/A | N/A | ||
R6 | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||
A | $4,762 | $— | ||
C | — | 496 |
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
4. | Other Transactions with Affiliates |
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market
PGIM Jennison Global Infrastructure Fund 31
Notes to Financial Statements (continued)
Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Affiliated income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
5. | Portfolio Securities |
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |||
$45,884,135 | $63,916,223 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | |||||||||||||||||||||||||||||||||||||||||
Short-Term Investments - Affiliated Mutual Funds: | ||||||||||||||||||||||||||||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||||||||||||||||||||||||||||||||
$— | $ | 19,704,655 | $ | 19,237,895 | $— | $— | $466,760 | 466,760 | $29,243 | |||||||||||||||||||||||||||||||||||||||
PGIM Institutional Money Market Fund(1)(b)(wb) | ||||||||||||||||||||||||||||||||||||||||||||||||
— | 1,435,480 | 1,435,480 | — | — | — | — | 379(2) | |||||||||||||||||||||||||||||||||||||||||
$— | $ | 21,140,135 | $ | 20,673,375 | $— | $— | $466,760 | $29,622 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
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(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. In order to present total distributable earnings (loss) and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to total distributable earnings (loss) and paid-in capital in excess of par for the Fund. The adjustments were due to redemption in-kind transactions and a taxable overdistribution.
For the year ended October 31, 2023, the adjustments were as follows:
Total Distributable Earnings (Loss) | Paid-in Capital in Excess of Par | |||
$319,888 | $(319,888) |
For the year ended October 31, 2023, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$1,012,828 | $1,093,951 | $— | $2,106,779 |
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$722,423 | $3,416,915 | $— | $4,139,338 |
As of October 31, 2023, there were no accumulated undistributed earnings on a tax basis.
The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||
$32,124,203 | $5,566,142 | $(2,167,127) | $3,399,015 |
The difference between GAAP and tax basis was primarily due to deferred losses on wash sales.
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains
PGIM Jennison Global Infrastructure Fund 33
Notes to Financial Statements (continued)
distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |||
$1,234,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. | Capital and Ownership |
The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 510,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |||
A | 20,000,000 | |||
C | 100,000,000 | |||
Z | 150,000,000 | |||
T | 115,000,000 | |||
R6 | 125,000,000 |
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The Fund currently does not have any Class T shares outstanding.
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||
R6 | 698,926 | 95.5% |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | 1 | 26.5% | ||
Unaffiliated | 4 | 57.2 |
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 87,599 | $ | 1,302,546 | |||||
Shares issued in reinvestment of dividends and distributions | 23,206 | 336,079 | ||||||
Shares purchased | (104,379 | ) | (1,527,468 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 6,426 | 111,157 | ||||||
Shares issued upon conversion from other share class(es) | 70,638 | 1,044,505 | ||||||
Shares purchased upon conversion into other share class(es) | (15,757 | ) | (232,188 | ) | ||||
Net increase (decrease) in shares outstanding | 61,307 | $ | 923,474 | |||||
Year ended October 31, 2022: | ||||||||
Shares sold | 117,154 | $ | 1,830,512 | |||||
Shares issued in reinvestment of dividends and distributions | 38,277 | 596,146 | ||||||
Shares purchased | (62,851 | ) | (942,436 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 92,580 | 1,484,222 | ||||||
Shares issued upon conversion from other share class(es) | 46,493 | 722,259 | ||||||
Shares purchased upon conversion into other share class(es) | (3,405 | ) | (56,034 | ) | ||||
Net increase (decrease) in shares outstanding | 135,668 | $ | 2,150,447 | |||||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 19,219 | $ | 270,043 | |||||
Shares issued in reinvestment of dividends and distributions | 6,541 | 93,436 | ||||||
Shares purchased | (27,469 | ) | (396,189 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (1,709 | ) | (32,710 | ) | ||||
Shares purchased upon conversion into other share class(es) | (86,040 | ) | (1,249,192 | ) | ||||
Net increase (decrease) in shares outstanding | (87,749 | ) | $ | (1,281,902 | ) |
PGIM Jennison Global Infrastructure Fund 35
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||
Year ended October 31, 2022: | ||||||||
Shares sold | 64,812 | $ | 1,012,615 | |||||
Shares issued in reinvestment of dividends and distributions | 19,470 | 299,687 | ||||||
Shares purchased | (27,936 | ) | (415,935 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 56,346 | 896,367 | ||||||
Shares purchased upon conversion into other share class(es) | (49,043 | ) | (750,462 | ) | ||||
Net increase (decrease) in shares outstanding | 7,303 | $ | 145,905 | |||||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 568,214 | $ | 8,479,836 | |||||
Shares issued in reinvestment of dividends and distributions | 71,146 | 1,033,560 | ||||||
Shares purchased | (1,411,451 | ) | (20,242,707 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (772,091 | ) | (10,729,311 | ) | ||||
Shares issued upon conversion from other share class(es) | 29,507 | 436,875 | ||||||
Net increase (decrease) in shares outstanding | (742,584 | ) | $ | (10,292,436 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 582,073 | $ | 9,297,231 | |||||
Shares issued in reinvestment of dividends and distributions | 130,725 | 2,030,510 | ||||||
Shares purchased | (393,341 | ) | (6,166,300 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 319,457 | 5,161,441 | ||||||
Shares issued upon conversion from other share class(es) | 5,155 | 84,237 | ||||||
Net increase (decrease) in shares outstanding | 324,612 | $ | 5,245,678 | |||||
Class R6 | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 95,586 | $ | 1,408,395 | |||||
Shares issued in reinvestment of dividends and distributions | 44,294 | 642,318 | ||||||
Shares purchased | (1,206,357 | ) | (17,569,488 | ) | ||||
Net increase (decrease) in shares outstanding | (1,066,477 | ) | $ | (15,518,775 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 1,194,029 | $ | 19,262,442 | |||||
Shares issued in reinvestment of dividends and distributions | 78,291 | 1,207,913 | ||||||
Shares purchased | (480,363 | ) | (7,653,554 | ) | ||||
Net increase (decrease) in shares outstanding | 791,957 | $ | 12,816,801 |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a
36
group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund utilized the SCA during the year ended October 31, 2023. The average daily balance for the 25 days that the Fund had loans outstanding during the period was approximately $675,120, borrowed at a weighted average interest rate of 5.31%. The maximum loan outstanding amount during the period was $2,607,000. At October 31, 2023, the Fund did not have an outstanding loan amount.
9. | Purchases & Redemption In-kind |
As of the close of business on September 26, 2023, the Fund settled the redemption of fund Class Z shares by delivering to an affiliate portfolio securities and other assets. The value of such securities and other assets that were transferred in-kind was $8,774,563.
In-kind redemption gains and losses are excluded in the calculation of taxable gain (loss) for federal income tax purposes.
10. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Blend Style Risk: The Fund’s blend investment style may subject the Fund to risks of both value and growth investing. The portion of the Fund’s portfolio that makes investments
PGIM Jennison Global Infrastructure Fund 37
Notes to Financial Statements (continued)
pursuant to a growth strategy may be subject to above-average fluctuations as a result of seeking higher than average capital growth. The portion of the Fund’s portfolio that makes investments pursuant to a value strategy may be subject to the risk that the market may not recognize a security’s intrinsic value for long periods of time or at all, or that a stock judged to be undervalued may actually be appropriately priced or overvalued. Issuers of value stocks may have experienced adverse business developments or may be subject to special risks that have caused the stock to be out of favor. If the Fund’s assessment of market conditions or a company’s value is inaccurate, the Fund could suffer losses or produce poor performance relative to other funds. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during periods of economic recovery. Therefore, both styles may over time go in and out of favor with the markets. At times when a style is out of favor, that portion of the portfolio may lag the other portion of the portfolio, which may cause the Fund to underperform the market in general, its benchmark and other mutual funds. Growth and value stocks have historically produced similar long-term results, though each category has periods when it outperforms the other.
Distribution Risk: The Fund’s distributions may consist of net investment income, if any, and net realized gains, if any, from the sale of investments and/or return of capital. The Fund will provide to shareholders early in each calendar year the final tax character of the Fund’s distributions for the previous year. Also, at such time that the Fund distribution is expected to be from sources other than current or accumulated net income, a notice to shareholders may be required.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
38
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset classes. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Infrastructure Companies Risk: Securities of infrastructure companies are more susceptible to adverse economic, social, political and regulatory occurrences than securities of companies in other industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the level of government spending on infrastructure projects, the effects of economic slowdown, surplus capacity, technological changes,
PGIM Jennison Global Infrastructure Fund 39
Notes to Financial Statements (continued)
casualty losses, insufficient supply of necessary resources, increased competition from other providers of similar services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Certain infrastructure companies may operate in limited areas or have few sources of revenue.
Infrastructure companies may also be affected by or subject to:
∎ regulation by various government authorities, including regulation of rates charged to customers;
∎ service interruption due to environmental, operational or other mishaps as well as political and social unrest;
∎ the imposition of special tariffs and changes in tax laws and accounting standards; and
∎ general changes in market sentiment towards the assets of infrastructure companies.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the
40
Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Capitalization Risk: The Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and mid-cap companies are less stable than the prices of large-cap stocks and may present greater risks. Large capitalization companies as a group could fall out of favor with the market, causing the Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
Master Limited Partnerships Risk: The risks of investing in an MLP are generally those involved in investing in a partnership as opposed to a corporation. For example, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation. Investments held by MLPs may be relatively illiquid, limiting the MLPs’ ability to vary their portfolios promptly in response to changes in economic or other conditions. MLPs may have limited financial resources, their securities may trade infrequently and in limited volume, and they may be subject to more abrupt or erratic price movements than securities
PGIM Jennison Global Infrastructure Fund 41
Notes to Financial Statements (continued)
of larger or more broadly-based companies. The Fund’s investment in MLPs also subjects the Fund to the risks associated with the specific industry or industries in which the MLPs invest, risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP’s general partner, cash flow risks, dilution risks and risks related to the general partner’s right to require unit-holders to sell their common units at an undesirable time or price. MLPs are generally considered interest-rate sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns. Since MLPs generally conduct business in multiple states, the Fund may be subject to income or franchise tax in each of the states in which the partnership does business. The additional cost of preparing and filing the tax returns and paying the related taxes may adversely impact the Fund’s return on its investment in MLPs.
Real Estate Investment Trust (“REIT”) Risk: Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.
REITs must also meet certain requirements under the Internal Revenue Code of 1986, as amended (the Code) to avoid entity level tax and be eligible to pass-through certain tax attributes of their income to shareholders. REITs are consequently subject to the risk of failing to meet these requirements for favorable tax treatment and of failing to maintain their exemptions from registration under the Investment Company Act of 1940. REITs are subject to the risks of changes in the Code affecting their tax status.
11. | Recent Regulatory Developments |
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a
42
semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
PGIM Jennison Global Infrastructure Fund 43
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Jennison Global Infrastructure Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison Global Infrastructure Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 19, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
44
Tax Information (unaudited)
We are advising you that during the fiscal year ended October 31, 2023, the Fund reports the maximum amount allowed per share, but not less than $0.27 for Class A, C, R6 and Z share as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.
For the year ended October 31, 2023, the Series reports under Section 854 of the Internal Revenue Code, the following percentages of the ordinary income dividends paid as 1) qualified dividend income (QDI); and 2) eligible for corporate dividends received deduction (DRD):
Fund | QDI | DRD | ||||||
PGIM Jennison Global Infrastructure Fund | 100.00% | 58.64% |
In January 2024, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the federal tax status of dividends and distributions received by you in calendar year 2023.
PGIM Jennison Global Infrastructure Fund 45
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Jennison Global Infrastructure Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
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Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison Global Infrastructure Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer ("PEO") (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Jennison Global Infrastructure Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Jennison Global Infrastructure Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Jennison Global Infrastructure Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Jennison Global Infrastructure Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with Jennison Associates LLC (“Jennison”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and Jennison. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a
1PGIM Jennison Global Infrastructure Fund is a series of Prudential World Fund, Inc.
PGIM Jennison Global Infrastructure Fund
Approval of Advisory Agreements (continued)
management agreement, and between PGIM Investments and Jennison, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and Jennison. The Board noted that Jennison is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by Jennison, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and Jennison, and also considered the qualifications, backgrounds and responsibilities of Jennison’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and Jennison’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PGIM Investments and Jennison.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by Jennison, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and Jennison under the management and subadvisory agreements.
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Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments to the Fund during the year ended December 31, 2022 exceeded the management fees paid by the Fund, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale may be shared with the Fund in several ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments and Jennison
The Board considered potential ancillary benefits that might be received by PGIM Investments and Jennison and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), benefits to its reputation as well as other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by Jennison included its ability to use soft dollar
PGIM Jennison Global Infrastructure Fund
Approval of Advisory Agreements (continued)
credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments and Jennison were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund /Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three- and five-year periods ended December 31, 2022.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
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Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
3rd Quartile |
1st Quartile |
1st Quartile |
N/A | |||||
Actual Management Fees: 3rd Quartile | ||||||||
Net Total Expenses: 4th Quartile |
· | The Board noted that the Fund outperformed its benchmark index over the three- and five-year periods, and underperformed over the one-year period. |
· | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap that (exclusive of certain fees and expenses) caps total annual operating expenses at 1.50% for Class A shares, 2.25% for Class C shares, 1.17% for Class R6 shares, and 1.17% for Class Z shares through February 29, 2024. |
· | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
· | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
· | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Jennison Global Infrastructure Fund
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street | (800) 225-1852 | pgim.com/investments | ||
Newark, NJ 07102 |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Ellen S. Alberding · Kevin J. Bannon · Scott E. Benjamin · Linda W. Bynoe · Barry H. Evans · Keith F. Hartstein · Laurie Simon Hodrick · Stuart S. Parker · Brian K. Reid · Grace C. Torres |
OFFICERS
Stuart S. Parker, President · Scott E. Benjamin, Vice President · Christian J. Kelly, Chief Financial Officer · Claudia DiGiacomo, Chief Legal Officer · Andrew Donohue, Chief Compliance Officer · Russ Shupak, Treasurer and Principal Accounting Officer · Kelly Florio, Anti-Money Laundering Compliance Officer · Andrew R. French, Secretary · Melissa Gonzalez, Assistant Secretary · Kelly A. Coyne, Assistant Secretary · Patrick E. McGuinness, Assistant Secretary · Debra Rubano, Assistant Secretary · George Hoyt, Assistant Secretary · Devan Goolsby, Assistant Secretary · Lana Lomuti, Assistant Treasurer · Elyse M. McLaughlin, Assistant Treasurer · Deborah Conway, Assistant Treasurer · Robert W. McCormack, Assistant Treasurer
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr &Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Jennison Global Infrastructure Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO HOLDINGS |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852. |
Mutual Funds: | ||||
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM JENNISON GLOBAL INFRASTRUCTURE FUND
SHARE CLASS | A | C | Z | R6 | ||||||||
NASDAQ | PGJAX | PGJCX | PGJZX | PGJQX | ||||||||
CUSIP | 743969792 | 743969784 | 743969776 | 743969560 |
MF217E
PGIM JENNISON GLOBAL OPPORTUNITIES FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM Jennison Global Opportunities Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Global Opportunities Fund
December 15, 2023
PGIM Jennison Global Opportunities Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||
Class A | ||||||||
(with sales charges) | 13.50 | 10.33 | 10.49 | — | ||||
(without sales charges) | 20.11 | 11.58 | 11.12 | — | ||||
Class C | ||||||||
(with sales charges) | 18.11 | 10.64 | 10.24 | — | ||||
(without sales charges) | 19.11 | 10.64 | 10.24 | — | ||||
Class Z | ||||||||
(without sales charges) | 20.29 | 11.75 | 11.34 | — | ||||
Class R2 | ||||||||
(without sales charges) | 19.79 | N/A | N/A | 13.13 (12/27/2018) | ||||
Class R4 | ||||||||
(without sales charges) | 20.06 | N/A | N/A | 13.43 (12/27/2018) | ||||
Class R6 | ||||||||
(without sales charges) | 20.41 | 11.86 | N/A | 11.91 (12/22/2014) | ||||
MSCI All Country World ND Index | ||||||||
10.50 | 7.47 | 6.81 | — |
Average Annual Total Returns as of 10/31/23 Since Inception (%) | ||||
Class R2, Class R4 (12/27/2018) | Class R6 (12/22/2014) | |||
MSCI All Country World ND Index | 9.05 | 6.87 |
Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the class’s inception date.
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the MSCI All Country World ND Index by portraying the initial account values at the beginning of the 10-year period for Class Z shares (October 31, 2013) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Jennison Global Opportunities Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R2 | Class R4 | Class R6 | |||||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | None | None | ||||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | None | None | ||||||
Annual distribution or distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | None | 0.25% | None | None | ||||||
Shareholder services fees | None | None | None | 0.10%* | 0.10%* | None |
*Shareholder service fee reflects maximum allowable fees under a shareholder services plan.
Benchmark Definition
MSCI All Country World ND Index—The Morgan Stanley Capital International All Country World Net Dividends Index (MSCI ACWI ND Index) is an unmanaged, free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI ND Index consists of 47 country indexes comprising 23 developed and 24 emerging market country indexes. The ND version of the MSCI ACWI Index reflects the impact of the maximum withholding taxes on reinvested dividends. The MSCI ACWI ND Index is unmanaged and the total return includes the reinvestment of all dividends.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Presentation of Fund Holdings as of 10/31/23
Ten Largest Holdings | Line of Business | Country | % of Net Assets | |||
NVIDIA Corp. | Semiconductors & Semiconductor Equipment | United States | 7.6% | |||
Microsoft Corp. | Software | United States | 6.2% | |||
Hermes International SCA | Textiles, Apparel & Luxury Goods | France | 5.9% | |||
Amazon.com, Inc. | Broadline Retail | United States | 5.3% | |||
Novo Nordisk A/S (Class B Stock) | Pharmaceuticals | Denmark | 5.1% | |||
Ferrari NV | Automobiles | Italy | 5.1% | |||
Eli Lilly & Co. | Pharmaceuticals | United States | 4.8% | |||
MercadoLibre, Inc. | Broadline Retail | Brazil | 4.6% | |||
L’Oreal SA | Personal Care Products | France | 3.9% | |||
Alphabet, Inc. (Class A Stock) | Interactive Media & Services | United States | 3.5% |
Holdings reflect only long-term investments and are subject to change.
PGIM Jennison Global Opportunities Fund 7
Strategy and Performance Overview* (unaudited)
How did the Fund perform?
The PGIM Jennison Global Opportunities Fund’s Class Z shares returned 20.29% in the 12-month reporting period that ended October 31, 2023, outperforming the 10.50% return of the MSCI All Country World Net Dividends Index (the Index).
What were the market conditions?
· | The past year was dominated by the US Federal Reserve’s historic campaign of interest rate hikes, which began in March 2022. The success of this effort to lower inflation, along with clearing of the global supply chain, resilient consumer spending, and most important, healthy corporate earnings, drove strong equity market performance over most of the reporting period. |
· | In the last three months of the period, however, market sentiment turned negative due to sustained upward pressure on interest rates, dysfunction in the US federal government, US labor strikes, and geopolitical instability—including the tragic events in the Middle East. |
· | Within the Index, information technology and communication services were the best performers. Consumer discretionary also outperformed the overall index. The real estate, utilities, and healthcare sectors declined during the period. |
What worked?
· | Stock selection within the healthcare, information technology, and consumer sectors were largely responsible for the Fund’s outperformance relative to the Index during the reporting period. |
· | Top individual contributors, all in the sectors cited above, included Nvidia Corp., Hermès International SCA, Novo Nordisk A/S, Ferrari N.V., and Microsoft Corp. |
· | Nvidia enjoyed tremendous demand for accelerated computing and generative artificial intelligence (AI) semiconductors. Improving supply, in Jennison’s view, should sustain revenue growth well into next year. |
· | Luxury goods maker Hermès benefited from sales strength across regions, as well as the company’s success in passing on price increases. All geographies and categories performed better than expected over most of the period. |
· | Novo Nordisk’s sales of diabetes and weight-loss drugs Ozempic and Wegovy continued to exceed expectations. Supply constraints for Wegovy, in Jennison’s view, are expected to improve. |
· | High-end automaker Ferrari continued to benefit from its strong model mix and pricing. Global orders remained at record levels, with delivery times for newly purchased vehicles at more than two years for certain models. |
· | Enterprise software company Microsoft continued to gain share across multiple product lines while remaining very well positioned for the surging AI wave, given the company’s progress in incorporating the technology into existing products to increase revenue potential. |
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What didn’t work?
· | From a sector perspective, stock selection within financials was a meaningful detractor during the reporting period, with notable underperformers including DLocal Limited and Nu Holdings Ltd. |
· | Shares in payment processor DLocal declined sharply early in the period following a report alleging that the company misreported numbers and acted fraudulently, which introduced a new risk to the investment thesis, and the position was eliminated. |
· | The Fund’s position in digital financial services provider Nu Holdings was eliminated early in 2023 due to concerns regarding systemically higher credit risk and legislative discussions to cap interest rates in Brazil. Jennison added Nu back into the Fund at the end of the period on the conviction that the company’s growth and profitability was underappreciated. Increasing product penetration in Brazil and success in Mexico and Colombia are key catalysts. |
· | Other notable detractors included Tesla Inc., Atlassian Corp., and Enphase Energy Inc. |
· | Shares in electric car maker Tesla fluctuated widely during the period but ultimately finished in negative territory. Shares were weak early in the period as CEO Elon Musk’s acquisition of X (formerly Twitter)—and subsequent controversy regarding his day-to-day involvement as CEO of both companies—weighed on Tesla’s brand perception. Later in the period, Tesla shares gained on a slate of positive news, including strong deliveries (benefiting from price cuts and increased availability); continued progress on the company’s new Gen III platform; Ford’s announcement that it will adopt Tesla’s charging standard; and Musk’s announcement that he hired an X CEO. Tesla remains a meaningful position in the Fund. |
· | Project management software developer Atlassian reported disappointing results early in the period that highlighted the risks to the company’s new business prospects in a slowing economy. As a result, the position was eliminated during the reporting period. |
· | Shares in solar energy solutions provider Enphase Energy were pressured by disappointing company guidance due to weak battery sales and share loss to competitors, as well as signs of weakening residential solar demand. This position was also sold from the Fund during the reporting period. |
Current outlook
· | Sentiment in the near term is clouded by monetary policy and economic growth uncertainties that will likely remain into year-end. |
· | Consumers, facing less robust prospects overall, are beginning to show stress—primarily at lower income levels. In Jennison’s opinion, Fund holdings most directly tied to high-end consumer spending remain best positioned to take wallet share and grow revenues and profits on a multi-year basis. |
PGIM Jennison Global Opportunities Fund 9
Strategy and Performance Overview* (continued)
· | Additionally, the broad categories of cloud adoption, data mining, and analytics, are still in nascent development. Adoption of generative AI capabilities remain at the forefront of Jennison’s longer-term investment plans across a wide range of industries. |
· | Jennison remains vigilant in evaluating the investment landscape against a mixed political and economic backdrop, while continuing to focus on companies with the ability to innovate, invest, and grow through various macroeconomic environments. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 =8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Jennison Global Opportunities Fund 11
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Jennison Global Opportunities Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $1,030.10 | 1.08% | $5.53 | |||||
Hypothetical | $1,000.00 | $1,019.76 | 1.08% | $5.50 | ||||||
Class C | Actual | $1,000.00 | $1,026.10 | 1.92% | $9.81 | |||||
Hypothetical | $1,000.00 | $1,015.53 | 1.92% | $9.75 | ||||||
Class Z | Actual | $1,000.00 | $1,031.20 | 0.91% | $4.66 | |||||
Hypothetical | $1,000.00 | $1,020.62 | 0.91% | $4.63 | ||||||
Class R2 | Actual | $1,000.00 | $1,028.90 | 1.34% | $6.85 | |||||
Hypothetical | $1,000.00 | $1,018.45 | 1.34% | $6.82 | ||||||
Class R4 | Actual | $1,000.00 | $1,030.10 | 1.09% | $5.58 | |||||
Hypothetical | $1,000.00 | $1,019.71 | 1.09% | $5.55 | ||||||
Class R6 | Actual | $1,000.00 | $1,031.50 | 0.83% | $4.25 | |||||
Hypothetical | $1,000.00 | $1,021.02 | 0.83% | $4.23 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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as of October 31, 2023
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.8% | ||||||||
COMMON STOCKS | ||||||||
Brazil 6.1% | ||||||||
MercadoLibre, Inc.* | 188,370 | $ | 233,718,194 | |||||
NU Holdings Ltd. (Class A Stock)* | 9,513,774 | 78,012,947 | ||||||
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311,731,141 | ||||||||
Denmark 5.1% | ||||||||
Novo Nordisk A/S (Class B Stock) | 2,707,383 | 261,198,121 | ||||||
France 13.0% | ||||||||
Hermes International SCA | 160,921 | 300,250,559 | ||||||
L’Oreal SA | 473,663 | 199,095,108 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 225,114 | 161,165,995 | ||||||
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660,511,662 | ||||||||
Israel 1.1% | ||||||||
Mobileye Global, Inc. (Class A Stock)*(a) | 1,554,471 | 55,447,981 | ||||||
Italy 5.1% | ||||||||
Ferrari NV | 861,990 | 260,927,812 | ||||||
Japan 1.5% | ||||||||
Keyence Corp. | 193,384 | 74,862,566 | ||||||
Netherlands 3.5% | ||||||||
Argenx SE, ADR* | 161,555 | 75,861,381 | ||||||
ASML Holding NV | 171,697 | 103,210,572 | ||||||
|
| |||||||
179,071,953 | ||||||||
United Kingdom 1.3% | ||||||||
Ashtead Group PLC | 1,118,664 | 64,158,185 | ||||||
United States 63.1% | ||||||||
Adobe, Inc.* | 241,366 | 128,421,194 | ||||||
Airbnb, Inc. (Class A Stock)* | 362,325 | 42,859,424 | ||||||
Alphabet, Inc. (Class A Stock)* | 1,420,955 | 176,312,096 | ||||||
Amazon.com, Inc.* | 2,023,639 | 269,326,114 | ||||||
Apple, Inc. | 618,366 | 105,598,362 | ||||||
Applied Materials, Inc. | 961,326 | 127,231,496 | ||||||
Arista Networks, Inc.* | 722,927 | 144,852,883 | ||||||
Broadcom, Inc. | 125,462 | 105,559,963 | ||||||
Cadence Design Systems, Inc.* | 613,453 | 147,136,702 |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
United States (cont’d.) | ||||||||
Costco Wholesale Corp. | 83,302 | $ | 46,019,357 | |||||
Eli Lilly & Co. | 445,702 | 246,887,709 | ||||||
HubSpot, Inc.* | 109,934 | 46,586,731 | ||||||
Lululemon Athletica, Inc.* | 102,810 | 40,453,679 | ||||||
Mastercard, Inc. (Class A Stock) | 358,142 | 134,786,742 | ||||||
Microsoft Corp. | 931,255 | 314,866,628 | ||||||
MongoDB, Inc.* | 253,561 | 87,374,585 | ||||||
Netflix, Inc.* | 231,109 | 95,145,264 | ||||||
NVIDIA Corp. | 944,207 | 385,047,615 | ||||||
Palo Alto Networks, Inc.*(a) | 531,993 | 129,284,939 | ||||||
ServiceNow, Inc.* | 283,549 | 164,982,986 | ||||||
Snowflake, Inc. (Class A Stock)* | 216,037 | 31,353,450 | ||||||
Tesla, Inc.* | 427,761 | 85,911,519 | ||||||
Trade Desk, Inc. (The) (Class A Stock)* | 1,114,243 | 79,066,683 | ||||||
Vertex Pharmaceuticals, Inc.* | 216,666 | 78,456,925 | ||||||
|
| |||||||
3,213,523,046 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 5,081,432,467 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 2.8% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
PGIM Core Government Money Market Fund(wb) | 41,074,802 | 41,074,802 | ||||||
PGIM Institutional Money Market Fund | 102,232,704 | 102,181,588 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 143,256,390 | |||||||
|
| |||||||
TOTAL INVESTMENTS 102.6% | 5,224,688,857 | |||||||
Liabilities in excess of other assets (2.6)% | (131,958,554 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 5,092,730,303 | ||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
ADR—American Depositary Receipt
SOFR—Secured Overnight Financing Rate
* | Non-income producing security. |
See Notes to Financial Statements.
14
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $103,232,547; cash collateral of $101,810,632 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Investments in Securities | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Long-Term Investments | ||||||||||||||||||||
Common Stocks | ||||||||||||||||||||
Brazil | $ | 311,731,141 | $ | — | $ | — | ||||||||||||||
Denmark | — | 261,198,121 | — | |||||||||||||||||
France | — | 660,511,662 | — | |||||||||||||||||
Israel | 55,447,981 | — | — | |||||||||||||||||
Italy | — | 260,927,812 | — | |||||||||||||||||
Japan | — | 74,862,566 | — | |||||||||||||||||
Netherlands | 75,861,381 | 103,210,572 | — | |||||||||||||||||
United Kingdom | — | 64,158,185 | — | |||||||||||||||||
United States | 3,213,523,046 | — | — | |||||||||||||||||
Short-Term Investments | ||||||||||||||||||||
Affiliated Mutual Funds | 143,256,390 | — | — | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total | $ | 3,799,819,939 | $ | 1,424,868,918 | $ | — | ||||||||||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of October 31, 2023 were as follows:
Software | 18.2 | % | ||
Semiconductors & Semiconductor Equipment | 14.2 | |||
Pharmaceuticals | 10.0 | |||
Broadline Retail | 9.9 |
Textiles, Apparel & Luxury Goods | 9.9 | % | ||
Automobiles | 6.8 | |||
Personal Care Products | 3.9 | |||
Interactive Media & Services | 3.5 |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Industry Classification (continued):
Biotechnology | 3.0 | % | ||
Communications Equipment | 2.8 | |||
Affiliated Mutual Funds (2.0% represents investments purchased with collateral from securities on loan) | 2.8 | |||
Financial Services | 2.6 | |||
IT Services | 2.3 | |||
Technology Hardware, Storage & Peripherals | 2.1 | |||
Entertainment | 1.9 | |||
Media | 1.6 | |||
Banks | 1.5 |
Electronic Equipment, Instruments & Components | 1.5 | % | ||
Trading Companies & Distributors | 1.3 | |||
Automobile Components | 1.1 | |||
Consumer Staples Distribution & Retail | 0.9 | |||
Hotels, Restaurants & Leisure | 0.8 | |||
|
| |||
102.6 | ||||
Liabilities in excess of other assets | (2.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions where the legal right to set-off exists is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) |
| Collateral Pledged/(Received)(1) | Net Amount | ||||
Securities on Loan | $103,232,547 | $(101,810,632) | $1,421,915 |
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
16
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value, including securities on loan of $103,232,547: | ||||
Unaffiliated investments (cost $3,752,628,614) | $ | 5,081,432,467 | ||
Affiliated investments (cost $143,254,411) | 143,256,390 | |||
Receivable for Fund shares sold | 8,921,326 | |||
Tax reclaim receivable | 7,200,941 | |||
Dividends receivable | 459,630 | |||
Prepaid expenses and other assets | 147,956 | |||
|
| |||
Total Assets | 5,241,418,710 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 101,810,632 | |||
Payable for investments purchased | 29,170,258 | |||
Payable for Fund shares purchased | 12,770,453 | |||
Management fee payable | 3,490,094 | |||
Accrued expenses and other liabilities | 1,090,089 | |||
Distribution fee payable | 314,884 | |||
Affiliated transfer agent fee payable | 31,340 | |||
Directors’ fees payable | 10,657 | |||
|
| |||
Total Liabilities | 148,688,407 | |||
|
| |||
Net Assets | $ | 5,092,730,303 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 1,504 | ||
Paid-in capital in excess of par | 4,379,664,510 | |||
Total distributable earnings (loss) | 713,064,289 | |||
|
| |||
Net assets, October 31, 2023 | $ | 5,092,730,303 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 17
Statement of Assets and Liabilities
as of October 31, 2023
Class A |
| |||
Net asset value and redemption price per share, ($464,837,019 ÷ 14,019,864 shares of common stock issued and outstanding) | $ | 33.16 | ||
Maximum sales charge (5.50% of offering price) | 1.93 | |||
|
| |||
Maximum offering price to public | $ | 35.09 | ||
|
| |||
Class C |
| |||
Net asset value, offering price and redemption price per share, ($245,621,244 ÷ 8,209,735 shares of common stock issued and outstanding) | $ | 29.92 | ||
|
| |||
Class Z |
| |||
Net asset value, offering price and redemption price per share, ($2,250,783,050 ÷ 66,135,946 shares of common stock issued and outstanding) | $ | 34.03 | ||
|
| |||
Class R2 |
| |||
Net asset value, offering price and redemption price per share, ($13,340,836 ÷ 398,518 shares of common stock issued and outstanding) | $ | 33.48 | ||
|
| |||
Class R4 |
| |||
Net asset value, offering price and redemption price per share, ($401,945 ÷ 11,844 shares of common stock issued and outstanding) | $ | 33.94 | ||
|
| |||
Class R6 |
| |||
Net asset value, offering price and redemption price per share, ($2,117,746,209 ÷ 61,668,182 shares of common stock issued and outstanding) | $ | 34.34 | ||
|
|
See Notes to Financial Statements.
18
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) |
| |||
Income | ||||
Unaffiliated dividend income (net of $3,021,818 foreign withholding tax) | $ | 32,005,749 | ||
Affiliated dividend income | 2,530,155 | |||
Income from securities lending, net (including affiliated income of $1,150,873) | 1,343,694 | |||
|
| |||
Total income | 35,879,598 | |||
|
| |||
Expenses | ||||
Management fee | 39,432,532 | |||
Distribution fee(a) | 3,929,298 | |||
Shareholder servicing fees(a) | 13,484 | |||
Transfer agent’s fees and expenses (including affiliated expense of $177,495)(a) | 2,993,787 | |||
Shareholders’ reports | 350,352 | |||
Custodian and accounting fees | 326,223 | |||
Registration fees(a) | 146,622 | |||
Professional fees | 94,630 | |||
Directors’ fees | 85,310 | |||
Audit fee | 28,620 | |||
Miscellaneous | 100,492 | |||
|
| |||
Total expenses | 47,501,350 | |||
Less: Fee waiver and/or expense reimbursement(a) | (445,395 | ) | ||
Distribution fee waiver(a) | (231,193 | ) | ||
|
| |||
Net expenses | 46,824,762 | |||
|
| |||
Net investment income (loss) | (10,945,164 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $63,640) | 223,385,013 | |||
Foreign currency transactions | (1,414,901 | ) | ||
|
| |||
221,970,112 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $3,962) | 629,156,343 | |||
Foreign currencies | 421,063 | |||
|
| |||
629,577,406 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 851,547,518 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 840,602,354 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R2 | Class R4 | Class R6 | |||||||||||||||||||
Distribution fee | 1,387,156 | 2,509,370 | — | 32,772 | — | — | ||||||||||||||||||
Shareholder servicing fees | — | — | — | 13,109 | 375 | — | ||||||||||||||||||
Transfer agent’s fees and expenses | 435,702 | 257,841 | 2,184,528 | 20,578 | 718 | 94,420 | ||||||||||||||||||
Registration fees | 22,609 | 17,401 | 55,168 | 5,119 | 5,118 | 41,207 | ||||||||||||||||||
Fee waiver and/or expense reimbursement | (436,086) | — | — | (4,090) | (5,219) | — | ||||||||||||||||||
Distribution fee waiver | (231,193) | — | — | — | — | — |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 19
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
|
| |||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | (10,945,164 | ) | $ | (26,733,074 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 221,970,112 | (808,527,502 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 629,577,406 | (2,955,467,565 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 840,602,354 | (3,790,728,141 | ) | |||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | — | (71,122,560 | ) | |||||
Class C | — | (47,133,586 | ) | |||||
Class Z | — | (420,099,934 | ) | |||||
Class R2 | — | (1,885,487 | ) | |||||
Class R4 | — | (31,140 | ) | |||||
Class R6 | — | (290,482,018 | ) | |||||
|
|
|
| |||||
— | (830,754,725 | ) | ||||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (35,800 | ) | |||||
Class C | — | (23,725 | ) | |||||
Class Z | — | (211,460 | ) | |||||
Class R2 | — | (949 | ) | |||||
Class R4 | — | (16 | ) | |||||
Class R6 | — | (146,216 | ) | |||||
|
|
|
| |||||
— | (418,166 | ) | ||||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 1,201,970,353 | 1,698,275,216 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | — | 818,705,147 | ||||||
Cost of shares purchased | (1,477,592,274 | ) | (2,777,192,591 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | (275,621,921 | ) | (260,212,228 | ) | ||||
|
|
|
| |||||
Total increase (decrease) | 564,980,433 | (4,882,113,260 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 4,527,749,870 | 9,409,863,130 | ||||||
|
|
|
| |||||
End of year | $ | 5,092,730,303 | $ | 4,527,749,870 | ||||
|
|
|
|
See Notes to Financial Statements.
20
Financial Highlights
Class A Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $27.60 | $52.15 | $38.50 | $24.58 | $21.47 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.11 | ) | (0.19 | ) | (0.37 | ) | (0.22 | ) | (0.11 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.67 | (19.72 | ) | 14.76 | 14.14 | 3.22 | ||||||||||||||
Total from investment operations | 5.56 | (19.91 | ) | 14.39 | 13.92 | 3.11 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Net asset value, end of year | $33.16 | $27.60 | $52.15 | $38.50 | $24.58 | |||||||||||||||
Total Return(c): | 20.11 | % | (41.69 | )% | 37.75 | % | 56.63 | % | 14.49 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $464,837 | $428,097 | $797,091 | $494,173 | $236,118 | |||||||||||||||
Average net assets (000) | $462,385 | $568,379 | $684,569 | $344,283 | $205,653 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.08 | % | 1.08 | % | 1.08 | % | 1.08 | % | 1.08 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.22 | % | 1.22 | % | 1.21 | % | 1.24 | % | 1.28 | % | ||||||||||
Net investment income (loss) | (0.34 | )% | (0.53 | )% | (0.80 | )% | (0.69 | )% | (0.45 | )% | ||||||||||
Portfolio turnover rate(e) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 21
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $25.12 | $48.27 | $35.98 | $23.16 | $20.41 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.34 | ) | (0.45 | ) | (0.70 | ) | (0.45 | ) | (0.29 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.14 | (18.06 | ) | 13.73 | 13.27 | 3.04 | ||||||||||||||
Total from investment operations | 4.80 | (18.51 | ) | 13.03 | 12.82 | 2.75 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Net asset value, end of year | $29.92 | $25.12 | $48.27 | $35.98 | $23.16 | |||||||||||||||
Total Return(c): | 19.11 | % | (42.19 | )% | 36.63 | % | 55.31 | % | 13.47 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $245,621 | $238,329 | $496,435 | $364,557 | $211,290 | |||||||||||||||
Average net assets (000) | $250,937 | $333,018 | $449,870 | $279,272 | $198,518 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.94 | % | 1.93 | % | 1.91 | % | 1.93 | % | 1.94 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.94 | % | 1.93 | % | 1.91 | % | 1.93 | % | 1.97 | % | ||||||||||
Net investment income (loss) | (1.19 | )% | (1.38 | )% | (1.62 | )% | (1.53 | )% | (1.31 | )% | ||||||||||
Portfolio turnover rate(e) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
22
Class Z Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $28.29 | $53.25 | $39.24 | $25.01 | $21.82 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.06 | ) | (0.14 | ) | (0.30 | ) | (0.17 | ) | (0.07 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.80 | (20.18 | ) | 15.05 | 14.40 | 3.26 | ||||||||||||||
Total from investment operations | 5.74 | (20.32 | ) | 14.75 | 14.23 | 3.19 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Net asset value, end of year | $34.03 | $28.29 | $53.25 | $39.24 | $25.01 | |||||||||||||||
Total Return(c): | 20.29 | % | (41.59 | )% | 37.96 | % | 56.90 | % | 14.62 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $2,250,783 | $2,073,103 | $4,792,805 | $3,390,006 | $1,466,571 | |||||||||||||||
Average net assets (000) | $2,168,204 | $3,132,931 | $4,303,934 | $2,338,060 | $1,228,375 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.93 | % | 0.93 | % | 0.92 | % | 0.93 | % | 0.94 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.93 | % | 0.93 | % | 0.92 | % | 0.93 | % | 0.96 | % | ||||||||||
Net investment income (loss) | (0.19 | )% | (0.39 | )% | (0.64 | )% | (0.54 | )% | (0.31 | )% | ||||||||||
Portfolio turnover rate(e) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 23
Financial Highlights (continued)
Class R2 Shares | ||||||||||||||||||||||||||||
Year Ended October 31, | December 27, 2018(a) through October 31, | |||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.94 | $52.86 | $39.10 | $25.02 | $20.59 | |||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.19 | ) | (0.28 | ) | (0.48 | ) | (0.31 | ) | (0.12 | ) | ||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.73 | (20.00 | ) | 14.98 | 14.39 | 4.55 | ||||||||||||||||||||||
Total from investment operations | 5.54 | (20.28 | ) | 14.50 | 14.08 | 4.43 | ||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Tax return of capital distributions | - | (- | )(c) | - | - | - | ||||||||||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||||||||||
Net asset value, end of period | $33.48 | $27.94 | $52.86 | $39.10 | $25.02 | |||||||||||||||||||||||
Total Return(d): | 19.79 | % | (41.85 | )% | 37.45 | % | 56.27 | % | 21.52 | % | ||||||||||||||||||
| ||||||||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $13,341 | $11,838 | $21,615 | $377 | $12 | |||||||||||||||||||||||
Average net assets (000) | $13,109 | $15,315 | $12,667 | $221 | $13 | |||||||||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.34 | % | 1.34 | % | 1.34 | % | 1.33 | % | 1.34 | %(f) | ||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.37 | % | 1.38 | % | 1.39 | % | 7.68 | % | 216.05 | %(f) | ||||||||||||||||||
Net investment income (loss) | (0.60 | )% | (0.79 | )% | (1.00 | )% | (0.92 | )% | (0.58 | )%(f) | ||||||||||||||||||
Portfolio turnover rate(g) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Amount rounds to zero. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
24
Class R4 Shares | ||||||||||||||||||||||||||||
Year Ended October 31, | December 27, 2018(a) through October 31, | |||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $28.26 | $53.27 | $39.31 | $25.08 | $20.59 | |||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.12 | ) | (0.18 | ) | (0.37 | ) | (0.19 | ) | (0.10 | ) | ||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.80 | (20.19 | ) | 15.07 | 14.42 | 4.59 | ||||||||||||||||||||||
Total from investment operations | 5.68 | (20.37 | ) | 14.70 | 14.23 | 4.49 | ||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Tax return of capital distributions | - | (- | )(c) | - | - | - | ||||||||||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||||||||||
Net asset value, end of period | $33.94 | $28.26 | $53.27 | $39.31 | $25.08 | |||||||||||||||||||||||
Total Return(d): | 20.06 | % | (41.68 | )% | 37.76 | % | 56.74 | % | 21.81 | % | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $402 | $310 | $332 | $505 | $362 | |||||||||||||||||||||||
Average net assets (000) | $375 | $318 | $696 | $433 | $122 | |||||||||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.09 | % | 1.09 | % | 1.06 | % | 1.02 | % | 0.97 | %(f) | ||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.48 | % | 3.42 | % | 2.18 | % | 4.28 | % | 23.67 | %(f) | ||||||||||||||||||
Net investment income (loss) | (0.36 | )% | (0.51 | )% | (0.78 | )% | (0.60 | )% | (0.46 | )%(f) | ||||||||||||||||||
Portfolio turnover rate(g) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Amount rounds to zero. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund 25
Financial Highlights (continued)
Class R6 Shares | ||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $28.52 | $53.60 | $39.46 | $25.13 | $21.90 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.03 | ) | (0.10 | ) | (0.26 | ) | (0.15 | ) | (0.06 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 5.85 | (20.34 | ) | 15.14 | 14.48 | 3.29 | ||||||||||||||
Total from investment operations | 5.82 | (20.44 | ) | 14.88 | 14.33 | 3.23 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Total dividends and distributions | - | (4.64 | ) | (0.74 | ) | - | - | |||||||||||||
Net asset value, end of year | $34.34 | $28.52 | $53.60 | $39.46 | $25.13 | |||||||||||||||
Total Return(c): | 20.41 | % | (41.54 | )% | 38.08 | % | 57.02 | % | 14.75 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $2,117,746 | $1,776,074 | $3,301,585 | $1,803,620 | $641,419 | |||||||||||||||
Average net assets (000) | $2,002,806 | $2,401,595 | $2,690,566 | $1,074,262 | $448,178 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.83 | % | 0.83 | % | 0.83 | % | 0.84 | % | 0.84 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.83 | % | 0.83 | % | 0.83 | % | 0.84 | % | 0.87 | % | ||||||||||
Net investment income (loss) | (0.10 | )% | (0.28 | )% | (0.54 | )% | (0.46 | )% | (0.23 | )% | ||||||||||
Portfolio turnover rate(e) | 75 | % | 84 | % | 62 | % | 57 | % | 52 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
26
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Jennison Global Opportunities Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is to seek long-term growth of capital.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the
PGIM Jennison Global Opportunities Fund 27
Notes to Financial Statements (continued)
Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
28
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover
PGIM Jennison Global Opportunities Fund 29
Notes to Financial Statements (continued)
the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based
30
upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |
Net Investment Income | Annually | |
Short-Term Capital Gains | Annually | |
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “subadviser”). The Manager pays for the services of Jennison.
PGIM Jennison Global Opportunities Fund 31
Notes to Financial Statements (continued)
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |||
0.825% up to $1 billion of the Fund’s average daily net assets; | 0.805% | |||
0.800% over $1 billion to $5 billion of the Fund’s average daily net assets; | ||||
0.780% over $5 billion of the Fund’s average daily net assets. |
The Manager has contractually agreed, through February 28, 2025, to limit certain operating expenses and/or to limit total annual operating expenses after fee waivers and/or expense reimbursements. The contractual waivers exclude interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Fund Expense Limitation* | Class Expense Limitation | ||||||
A | 0.84 | % | 1.08 | % | ||||
C | 0.84 | — | ||||||
Z | 0.84 | — | ||||||
R2 | 0.84 | 1.34 | ** | |||||
R4 | 0.84 | 1.09 | ** | |||||
R6 | 0.84 | — |
*Expense limitation excludes distribution and service (12b-1) fees, shareholder service fee, and transfer agency expenses (including sub-transfer agency and networking fees).
**Expense limitation applicable only to blue sky fees, shareholder service fee, and transfer agency expenses (including sub-transfer agency and networking fees).
32
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z, Class R2, Class R4 and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class C and Class R2 shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through February 28, 2025 to limit such fees on certain classes based on the average daily net assets. The distribution fees are accrued daily and payable monthly.
The Fund has adopted a Shareholder Services Plan with respect to Class R2 and Class R4 shares. Under the terms of the Shareholder Services Plan, Class R2 and Class R4 shares are authorized to compensate Prudential Mutual Fund Services LLC (“PMFS”), its affiliates or third-party service providers for services rendered to the shareholders of such Class R2 or Class R4 shares. The shareholder service fee is accrued daily and paid monthly, as applicable.
The Fund’s annual gross and net distribution rates and maximum shareholder service fee, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | Shareholder Service Fee | ||||||||||||
A | 0.30 | % | 0.25 | % | N/A | % | |||||||||
C | 1.00 | 1.00 | N/A | ||||||||||||
Z | N/A | N/A | N/A | ||||||||||||
R2 | 0.25 | 0.25 | 0.10 | ||||||||||||
R4 | N/A | N/A | 0.10 | ||||||||||||
R6 | N/A | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||||||
A | $ | 675,741 | $ | 2,324 | ||||
C | — | 15,566 |
PGIM Investments, PIMS, PMFS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
PGIM Jennison Global Opportunities Fund 33
Notes to Financial Statements (continued)
4. | Other Transactions with Affiliates |
PMFS serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s and shareholder servicing agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act that, subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
5. | Portfolio Securities |
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |||
$3,627,743,622 | $3,693,455,822 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
34
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | |||||||||||||||||||||||||||||||||||||||||||
Short-Term Investments - Affiliated Mutual Funds: | ||||||||||||||||||||||||||||||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ — | $1,266,262,533 | $1,225,187,731 | $ — | $ — | $41,074,802 | 41,074,802 | $2,530,155 | |||||||||||||||||||||||||||||||||||||||||||
PGIM Institutional Money Market Fund (1)(b)(wb) | ||||||||||||||||||||||||||||||||||||||||||||||||||
215,395,369 | 2,089,695,180 | 2,202,976,563 | 3,962 | 63,640 | 102,181,588 | 102,232,704 | 1,150,873(2) | |||||||||||||||||||||||||||||||||||||||||||
$215,395,369 | $3,355,957,713 | $3,428,164,294 | $3,962 | $63,640 | $143,256,390 | $3,681,028 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. In order to present total distributable earnings (loss) and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to total distributable earnings (loss) and paid-in capital in excess of par for the Fund. The adjustment was due to a net operating loss.
For the year ended October 31, 2023, the adjustments were as follows:
Total Distributable Earnings (Loss) | Paid-in Capital in Excess of Par | |||
$2,496,354 | $(2,496,354) |
For the year ended October 31, 2023, there were no distributions paid by the Fund.
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$57,821,230 | $772,933,495 | $418,166 | $831,172,891 |
As of October 31, 2023, there were no accumulated undistributed earnings on a tax basis.
PGIM Jennison Global Opportunities Fund 35
Notes to Financial Statements (continued)
The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||
$3,944,308,787 | $1,431,960,100 | $(151,580,030) | $1,280,380,070 |
The difference between GAAP and tax basis was primarily due to deferred losses on wash sales.
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |||
$557,387,000 | $214,832,000 |
The Fund elected to treat the below approximated losses as having been incurred in the following fiscal year (October 31, 2024).
Qualified Late-Year Losses | Post-October Capital Losses | |||
$9,864,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. | Capital and Ownership |
The Fund offers Class A, Class C, Class Z, Class R2, Class R4 and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis
36
approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z, Class R2, Class R4 and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 3,450,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |||
A | 150,000,000 | |||
C | 100,000,000 | |||
Z | 2,000,000,000 | |||
R2 | 100,000,000 | |||
R4 | 100,000,000 | |||
R6 | 1,000,000,000 |
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||
Z | 45,919 | 0.1% | ||
R2 | 543 | 0.1 | ||
R4 | 543 | 4.6 |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | — | —% | ||
Unaffiliated | 5 | 69.7 |
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||||||
Class A | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 1,380,152 | $ | 44,453,275 | |||||||||
Shares purchased | (3,160,104 | ) | (98,601,525 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (1,779,952 | ) | (54,148,250 | ) | ||||||||
Shares issued upon conversion from other share class(es) | 682,929 | 21,909,549 | ||||||||||
Shares purchased upon conversion into other share class(es) | (391,985 | ) | (12,399,520 | ) | ||||||||
Net increase (decrease) in shares outstanding | (1,489,008 | ) | $ | (44,638,221 | ) |
PGIM Jennison Global Opportunities Fund 37
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 2,437,561 | $ | 87,742,751 | |||||||||
Shares issued in reinvestment of dividends and distributions | 1,531,839 | 69,897,795 | ||||||||||
Shares purchased | (4,025,343 | ) | (137,018,440 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (55,943 | ) | 20,622,106 | |||||||||
Shares issued upon conversion from other share class(es) | 794,706 | 29,615,720 | ||||||||||
Shares purchased upon conversion into other share class(es) | (515,018 | ) | (18,642,964 | ) | ||||||||
Net increase (decrease) in shares outstanding | 223,745 | $ | 31,594,862 | |||||||||
Class C | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 748,163 | $ | 21,825,781 | |||||||||
Shares purchased | (1,472,013 | ) | (41,553,603 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (723,850 | ) | (19,727,822 | ) | ||||||||
Shares issued upon conversion from other share class(es) | 1,545 | 50,414 | ||||||||||
Shares purchased upon conversion into other share class(es) | (554,777 | ) | (16,007,168 | ) | ||||||||
Net increase (decrease) in shares outstanding | (1,277,082 | ) | $ | (35,684,576 | ) | |||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 1,076,874 | $ | 36,143,113 | |||||||||
Shares issued in reinvestment of dividends and distributions | 1,111,201 | 46,503,742 | ||||||||||
Shares purchased | (2,117,875 | ) | (65,859,606 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | 70,200 | 16,787,249 | ||||||||||
Shares purchased upon conversion into other share class(es) | (868,686 | ) | (29,829,616 | ) | ||||||||
Net increase (decrease) in shares outstanding | (798,486 | ) | $ | (13,042,367 | ) | |||||||
Class Z | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 16,570,207 | $ | 547,854,907 | |||||||||
Shares purchased | (23,650,774 | ) | (740,039,391 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (7,080,567 | ) | (192,184,484 | ) | ||||||||
Shares issued upon conversion from other share class(es) | 640,282 | 20,925,786 | ||||||||||
Shares purchased upon conversion into other share class(es) | (701,564 | ) | (23,635,892 | ) | ||||||||
Net increase (decrease) in shares outstanding | (7,141,849 | ) | $ | (194,894,590 | ) |
38
Share Class | Shares | Amount | ||||||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 24,079,983 | $ | 892,122,293 | |||||||||
Shares issued in reinvestment of dividends and distributions | 8,798,903 | 410,908,760 | ||||||||||
Shares purchased | (50,050,741 | ) | (1,746,002,720 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (17,171,855 | ) | (442,971,667 | ) | ||||||||
Shares issued upon conversion from other share class(es) | 816,866 | 30,109,990 | ||||||||||
Shares purchased upon conversion into other share class(es) | (370,962 | ) | (13,277,879 | ) | ||||||||
Net increase (decrease) in shares outstanding | (16,725,951 | ) | $ | (426,139,556 | ) | |||||||
Class R2 | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 30,797 | $ | 1,014,673 | |||||||||
Shares purchased | (55,916 | ) | (1,775,908 | ) | ||||||||
Net increase (decrease) in shares outstanding | (25,119 | ) | $ | (761,235 | ) | |||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 36,394 | $ | 1,279,903 | |||||||||
Shares issued in reinvestment of dividends and distributions | 40,744 | 1,886,436 | ||||||||||
Shares purchased | (62,443 | ) | (2,192,717 | ) | ||||||||
Net increase (decrease) in shares outstanding | 14,695 | $ | 973,622 | |||||||||
Class R4 | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 1,829 | $ | 58,704 | |||||||||
Shares purchased | (950 | ) | (31,293 | ) | ||||||||
Net increase (decrease) in shares outstanding | 879 | $ | 27,411 | |||||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 4,403 | $ | 162,182 | |||||||||
Shares issued in reinvestment of dividends and distributions | 667 | 31,156 | ||||||||||
Shares purchased | (342 | ) | (14,868 | ) | ||||||||
Net increase (decrease) in shares outstanding | 4,728 | $ | 178,470 | |||||||||
Class R6 | ||||||||||||
Year ended October 31, 2023: | ||||||||||||
Shares sold | 17,303,063 | $ | 586,763,013 | |||||||||
Shares purchased | (18,174,338 | ) | (595,590,554 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | (871,275 | ) | (8,827,541 | ) | ||||||||
Shares issued upon conversion from other share class(es) | 419,859 | 14,394,339 | ||||||||||
Shares purchased upon conversion into other share class(es) | (155,629 | ) | (5,237,508 | ) | ||||||||
Net increase (decrease) in shares outstanding | (607,045 | ) | $ | 329,290 |
PGIM Jennison Global Opportunities Fund 39
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||||||
Year ended October 31, 2022: | ||||||||||||
Shares sold | 18,555,279 | $ | 680,824,974 | |||||||||
Shares issued in reinvestment of dividends and distributions | 6,153,853 | 289,477,258 | ||||||||||
Shares purchased | (24,091,674 | ) | (826,104,240 | ) | ||||||||
Net increase (decrease) in shares outstanding before conversion | 617,458 | 144,197,992 | ||||||||||
Shares issued upon conversion from other share class(es) | 115,451 | 4,122,577 | ||||||||||
Shares purchased upon conversion into other share class(es) | (57,593 | ) | (2,097,828 | ) | ||||||||
Net increase (decrease) in shares outstanding | 675,316 | $ | 146,222,741 |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund utilized the SCA during the year ended October 31, 2023. The average daily balance for the 1 day that the Fund had loans outstanding during the period was approximately $496,000, borrowed at a weighted average interest rate of 5.91%. The maximum loan outstanding amount during the period was $496,000. At October 31, 2023,
40
the Fund did not have an outstanding loan amount.
9. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Country Risk: Changes in the business environment may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes or stability factors such as mass riots, civil war and other potential events may contribute to companies’ operational risks.
Currency Risk: The Fund’s net asset value could decline as a result of changes in exchange rates, which could adversely affect the Fund’s investments in currencies, or in securities that trade in, and receive revenues related to, currencies, or in derivatives that provide exposure to currencies. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation, may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset classes. In addition to an individual security losing value, the value of the equity markets or a
PGIM Jennison Global Opportunities Fund 41
Notes to Financial Statements (continued)
sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Growth Style Risk: The Fund’s growth style may subject the Fund to above-average fluctuations as a result of seeking higher than average capital growth. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during periods of economic recovery. Since the Fund follows a growth investment style, there is the risk that the growth investment style may be out of favor for long periods of time. At times when the style is out of favor, the Fund may underperform the market in general, its benchmark and other mutual funds.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease.
42
Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Capitalization Risk: The Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and mid-cap companies are less stable than the prices of large-cap stocks and may present greater risks. Large capitalization companies as a group could fall out of favor with the market, causing the Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability
PGIM Jennison Global Opportunities Fund 43
Notes to Financial Statements (continued)
in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
10. | Recent Regulatory Developments |
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
44
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Jennison Global Opportunities Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison Global Opportunities Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 16, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Jennison Global Opportunities Fund 45
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Jennison Global Opportunities Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
Visit our website at pgim.com/investments
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison Global Opportunities Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer (“PEO”) (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Jennison Global Opportunities Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Jennison Global Opportunities Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Jennison Global Opportunities Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Jennison Global Opportunities Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with Jennison Associates LLC (“Jennison”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and Jennison. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a
1PGIM | Jennison Global Opportunities Fund is a series of Prudential World Fund, Inc. |
PGIM Jennison Global Opportunities Fund
Approval of Advisory Agreements (continued)
management agreement, and between PGIM Investments and Jennison, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and Jennison. The Board noted that Jennison is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by Jennison, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and Jennison, and also considered the qualifications, backgrounds and responsibilities of Jennison’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and Jennison’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PGIM Investments and Jennison.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by Jennison, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and Jennison under the management and subadvisory agreements.
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Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale may be shared with the Fund in several ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments and Jennison
The Board considered potential ancillary benefits that might be received by PGIM Investments, Jennison and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by Jennison included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits
PGIM Jennison Global Opportunities Fund
Approval of Advisory Agreements (continued)
derived by PGIM Investments and Jennison were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three- and five-year periods ended December 31, 2022.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
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Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
4th Quartile | 2nd Quartile | 1st Quartile | 1st Quartile | |||||
Actual Management Fees: 3rd Quartile | ||||||||
Net Total Expenses: 4th Quartile |
· | The Board noted that the Fund outperformed its benchmark index over the three-, five-, and ten-year periods and underperformed over the one-year period. |
· | The Board considered PGIM Investments’ assertions that the Fund’s exposure to secular growth stocks was out of favor, but that PGIM Investments is encouraged by the Fund’s strong longer-term performance over the three-, five- and ten-year periods. |
· | The Board noted that, effective July 1, 2022, PGIM Investments contractually amended its management fee schedule to add an additional breakpoint at asset levels above $5 billion. The current contractual fee rate schedule is as follows: 0.825% up to $1 billion; 0.800% from $1 billion up to $5 billion; and 0.780% over $5 billion. |
· | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap that (exclusive of certain fees and expenses) limits total annual operating expenses at 0.84% for each class of the Fund’s shares, and limits transfer agency, shareholder servicing, sub-transfer agency and blue sky fees to the extent that such fees cause net annual Fund operating expenses to exceed 1.34% for Class R2 shares or 1.09% for Class R4 shares through February 29, 2024. |
· | The Board and PGIM Investments has also agreed to retain the existing contractual expense cap with respect to Class A shares, which (exclusive of certain fees and expenses) limits total annual fund operating expenses to 1.08% for Class A shares through February 29, 2024. |
· | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
· | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
· | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Jennison Global Opportunities Fund
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street | (800) 225-1852 | pgim.com/investments | ||
Newark, NJ 07102 |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Ellen S. Alberding · Kevin J. Bannon · Scott E. Benjamin · Linda W. Bynoe · Barry H. Evans · Keith F. Hartstein · Laurie Simon Hodrick · Stuart S. Parker · Brian K. Reid · Grace C. Torres |
OFFICERS |
Stuart S. Parker, President · Scott E. Benjamin, Vice President · Christian J. Kelly, Chief Financial Officer · Claudia DiGiacomo, Chief Legal Officer · Andrew Donohue, Chief Compliance Officer · Russ Shupak, Treasurer and Principal Accounting Officer · Kelly Florio, Anti-Money Laundering Compliance Officer · Andrew R. French, Secretary · Melissa Gonzalez, Assistant Secretary · Kelly A. Coyne, Assistant Secretary · Patrick E. McGuinness, Assistant Secretary · Debra Rubano, Assistant Secretary · George Hoyt, Assistant Secretary · Devan Goolsby, Assistant Secretary · Lana Lomuti, Assistant Treasurer · Elyse M. McLaughlin, Assistant Treasurer · Deborah Conway, Assistant Treasurer · Robert W. McCormack, Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Jennison Global Opportunities Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO HOLDINGS |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852. |
Mutual Funds: | ||||
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM JENNISON GLOBAL OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | R2 | R4 | R6 | ||||||
NASDAQ | PRJAX | PRJCX | PRJZX | PRJBX | PRJDX | PRJQX | ||||||
CUSIP | 743969719 | 743969693 | 743969685 | 743969438 | 743969420 | 743969594 |
MF214E
PGIM JENNISON EMERGING MARKETS EQUITY OPPORTUNITIES FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
3 | ||||
4 | ||||
5 | ||||
8 | ||||
11 | ||||
13 | ||||
53 |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder: | ||
We hope you find the annual report for the PGIM Jennison Emerging Markets Equity Opportunities Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Emerging Markets Equity Opportunities Fund
December 15, 2023
PGIM Jennison Emerging Markets Equity Opportunities Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||
One Year (%) | Five Years (%) | Since Inception (%) | ||||
Class A | ||||||
(with sales charges) | -5.42 | 4.11 | 1.75 (9/16/2014) | |||
(without sales charges) | 0.08 | 5.30 | 2.39 (9/16/2014) | |||
Class C | ||||||
(with sales charges) | -1.68 | 4.51 | 1.62 (9/16/2014) | |||
(without sales charges) | -0.69 | 4.51 | 1.62 (9/16/2014) | |||
Class Z | ||||||
(without sales charges) | 0.32 | 5.57 | 2.64 (9/16/2014) | |||
Class R6 | ||||||
(without sales charges) | 0.39 | 5.62 | 2.67 (9/16/2014) | |||
MSCI Emerging Markets Index | ||||||
10.80 | 1.59 | 1.37 |
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the Fund’s inception date.
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the MSCI Emerging Markets Index, by portraying the initial account values at the commencement of operations for Class Z shares (September 16, 2014) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Jennison Emerging Markets Equity Opportunities Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R6 | |||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | None | None |
Benchmark Definition
MSCI Emerging Markets Index—The MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization-weighted index that is designed to measure equity market performance of emerging markets. It consists of the following 24 emerging market country indexes: Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and the United Arab Emirates.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Presentation of Fund Holdings as of 10/31/23
Ten Largest Holdings | Line of Business | Country | % of Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | Semiconductors & Semiconductor Equipment | Taiwan | 6.2% | |||
MakeMyTrip Ltd. | Hotels, Restaurants & Leisure | India | 6.2% | |||
XP, Inc. (Class A Stock) | Capital Markets | Brazil | 5.2% | |||
MercadoLibre, Inc. | Broadline Retail | Brazil | 4.8% | |||
NU Holdings Ltd. (Class A Stock) | Banks | Brazil | 4.5% | |||
Mahindra & Mahindra Ltd. | Automobiles | India | 3.4% | |||
Varun Beverages Ltd. | Beverages | India | 3.3% | |||
KE Holdings, Inc., ADR | Real Estate Management & Development | China | 3.3% | |||
PDD Holdings, Inc., ADR | Broadline Retail | China | 3.0% | |||
Kanzhun Ltd., ADR | Interactive Media & Services | China | 2.9% |
Holdings reflect only long-term investments and are subject to change.
PGIM Jennison Emerging Markets Equity Opportunities Fund 7
Strategy and Performance Overview* (unaudited)
How did the Fund perform?
The PGIM Jennison Emerging Markets Equity Opportunities Fund’s Class Z shares returned 0.32% in the 12-month reporting period that ended October 31, 2023, underperforming the 10.80% return of the MSCI Emerging Markets Index (the Index).
What were the market conditions?
● | The reporting period was dominated by interest rate hikes by major central banks. The success of this effort to lower inflation, along with clearing of the global supply chain, resilient consumer spending, and most important, healthy corporate earnings, drove solid equity market performance over most of the period. |
● | In the last three months of the period, however, market sentiment turned negative due to sustained upward pressure on interest rates and geopolitical instability—including the tragic events in the Middle East. |
● | From January 2023 through the end of the period, equity market performance in China (the second-largest economy globally and the largest emerging-markets economy) declined substantially from early 2023 highs, despite the discontinuance of the country’s zero-COVID-19 policy and the reopening of its economy. However, near the end of the period, China’s market stabilized in response to policy support announcements from the central government. |
● | Within the Index, the communication services, information technology, consumer discretionary, energy, and real estate sectors all outperformed the return of the overall Index. The utilities and materials sectors lost ground during the period. With respect to the Index’s largest country weights, China, Taiwan, and Korea posted solid gains, while Indonesia and Thailand declined. |
What worked?
● | Despite disappointing performance for the period, there were several holdings that performed well, including MakeMyTrip Ltd., XP Inc., Aspeed Technology Inc., Hong Kong Exchanges & Clearing Ltd., and NU Holdings Ltd. |
● | Shares in MakeMyTrip (consumer discretionary), India’s largest online travel agency, delivered broad-based growth, with all segments recovering to pre-pandemic levels. |
● | Shares in XP (financials), the largest investment platform in Brazil, benefited from the company’s growth in assets and lower expenses. Jennison believes XP is well positioned to capture market share in growing investment trends. As of the end of the period, shares still traded at a very attractive valuation. |
● | Shares of Aspeed Technology (information technology), a Taiwanese designer of integrated circuits, rose on signs that the cycle for the data center semiconductor chip segment may be bottoming. Jennison expects strong top-line/bottom-line growth from the company, driven by new projects and market share gains. |
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● | Hong Kong Exchanges & Clearing (financials) operates a range of equity, commodity, fixed income, and currency markets. Shares benefited from expectations that the company will return to strong top- and bottom-line growth after a period of slow activity. Jennison views the company as a high-quality/high-margin business that generates significant cash flow. |
● | Shares in NU Holdings, another Brazilian financials company, benefited from healthy growth metrics, including client adds, accelerating personal loan origination, and credit card market-share gains. |
What didn’t work?
● | Stock selection in the consumer discretionary, industrials, healthcare, and communication services sectors were the most substantial detractors from relative performance during the reporting period. |
● | The most consequential individual detractors were diversified across sectors and included Samsung SDI Co., Ltd., Jiumaojiu International Holdings Ltd., B3 S.A. – Brasil, Bolsa, Balcão, East Money Information Co., Ltd., and Hangzhou Tigermed Consulting Co., Ltd. |
● | Shares in Samsung SDI (information technology), a South Korean electric vehicle battery company, declined on concerns of slowing growth. In Jennison’s view, the company’s longer-term prospects remain attractive given its technology leadership and capacity growth potential in the US. |
● | Shares of Jiumaojiu International (consumer discretionary), a Chinese catering group, fell on disappointing 2022 results. Although the company should be a beneficiary of the post-pandemic reopening in China with opportunities for multi-brand expansion, Jennison eliminated the position during the reporting period. |
● | Shares of B3, a Brazil-based financial market infrastructure provider, declined in early 2023 on lower revenue from equities and pressures from non-core expenses. Shares recovered from April through July, then fell again from August through the end of the period on weaker-than-expected earnings. Jennison favors the company’s strategy of continuing to invest in innovation and launching new products in capital markets, as well its initial progress in operating in new markets and expanding revenue streams. |
● | In addition to being the largest discount broker in China, East Money Information (financials) provides web-based financial and stock information. The timing of the Fund’s sale and repurchase of the stock detracted from relative returns in aggregate during the period. The company is gaining market share and is listed on the Chinese A-share market. |
● | Hangzhou Tigermed Consulting (healthcare), a contract research organization in China, missed profit expectations in the fourth quarter of 2022, and the Fund’s position was sold during the reporting period. |
PGIM Jennison Emerging Markets Equity Opportunities Fund 9
Strategy and Performance Overview* (continued)
Current outlook
● | While economic growth in developed markets is slowing, emerging-markets economic growth is starting to advance, driven by more than just China. Jennison believes India remains well positioned to capitalize on its burgeoning middle class, while Indonesia’s growth prospects are also improving. In Jennison’s view, growth prospects in Latin America have improved as well in response to nearshoring (operations are moved from business overseas to a neighboring or nearby country, usually within the same region or continent) trends and an increase in foreign direct investment as companies adjust their global supply-chain strategies. |
● | Jennison also expects earnings growth in emerging markets to outpace that of developed markets, driven by the trends outlined above. |
● | Emerging markets’ overall valuation discounts are much wider than their long-term averages relative to developed markets and US equities. |
● | Jennison remains vigilant in evaluating the investment landscape against a mixed geopolitical and economic backdrop, while continuing to focus on companies with the ability to innovate, invest, and grow through various macroeconomic environments. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Jennison Emerging Markets Equity Opportunities Fund 11
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Jennison Emerging Markets Equity Opportunities Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $1,018.90 | 1.30% | $ 6.62 | |||||
Hypothetical | $1,000.00 | $1,018.65 | 1.30% | $ 6.61 | ||||||
Class C | Actual | $1,000.00 | $1,014.90 | 2.05% | $10.41 | |||||
Hypothetical | $1,000.00 | $1,014.87 | 2.05% | $10.41 | ||||||
Class Z | Actual | $1,000.00 | $1,020.10 | 1.05% | $ 5.35 | |||||
Hypothetical | $1,000.00 | $1,019.91 | 1.05% | $ 5.35 | ||||||
Class R6 | Actual | $1,000.00 | $1,020.90 | 0.98% | $ 4.99 | |||||
Hypothetical | $1,000.00 | $1,020.27 | 0.98% | $ 4.99 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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as of October 31, 2023
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 98.0% | ||||||||
COMMON STOCKS | ||||||||
Brazil 15.5% | ||||||||
B3 SA - Brasil Bolsa Balcao | 2,496,641 | $ | 5,521,406 | |||||
MercadoLibre, Inc.* | 20,257 | 25,133,670 | ||||||
NU Holdings Ltd. (Class A Stock)* | 2,854,673 | 23,408,318 | ||||||
XP, Inc. (Class A Stock) | 1,357,198 | 27,143,960 | ||||||
|
| |||||||
81,207,354 | ||||||||
China 22.0% | ||||||||
Airtac International Group | 294,829 | 9,693,269 | ||||||
Alibaba Group Holding Ltd., ADR* | 87,953 | 7,259,641 | ||||||
Baidu, Inc., ADR* | 46,034 | 4,833,570 | ||||||
BYD Co. Ltd. (Class H Stock) | 330,738 | 10,057,785 | ||||||
East Money Information Co. Ltd. (Class A Stock) | 5,049,951 | 10,502,081 | ||||||
Estun Automation Co. Ltd. (Class A Stock) | 2,946,846 | 7,553,808 | ||||||
Kanzhun Ltd., ADR* | 1,027,878 | 15,212,594 | ||||||
KE Holdings, Inc., ADR | 1,161,694 | 17,088,519 | ||||||
Kweichow Moutai Co. Ltd. (Class A Stock) | 31,998 | 7,344,874 | ||||||
PDD Holdings, Inc., ADR* | 155,528 | 15,773,650 | ||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd. (Class A Stock) | 2,770,902 | 10,107,595 | ||||||
|
| |||||||
115,427,386 | ||||||||
Hong Kong 1.7% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 249,683 | 8,734,574 | ||||||
India 21.0% | ||||||||
Devyani International Ltd.* | 6,092,439 | 13,161,153 | ||||||
HDFC Bank Ltd., ADR | 86,831 | 4,910,293 | ||||||
KPIT Technologies Ltd. | 884,705 | 12,944,908 | ||||||
Mahindra & Mahindra Ltd. | 1,022,454 | 17,918,795 | ||||||
MakeMyTrip Ltd.* | 842,468 | 32,628,786 | ||||||
Max Healthcare Institute Ltd. | 1,656,927 | 11,421,803 | ||||||
Varun Beverages Ltd. | 1,589,305 | 17,347,006 | ||||||
|
| |||||||
110,332,744 | ||||||||
Indonesia 6.1% | ||||||||
Bank Central Asia Tbk PT | 22,705,415 | 12,508,882 | ||||||
Bank Mandiri Persero Tbk PT | 30,848,432 | 11,020,668 | ||||||
Sumber Alfaria Trijaya Tbk PT | 46,114,797 | 8,392,741 | ||||||
|
| |||||||
31,922,291 |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Mexico 0.9% | ||||||||
Corp. Inmobiliaria Vesta SAB de CV, ADR | 155,273 | $ | 4,881,783 | |||||
South Korea 7.8% | ||||||||
Coupang, Inc.* | 582,141 | 9,896,397 | ||||||
Orion Corp. | 67,104 | 5,939,049 | ||||||
Samsung Electronics Co. Ltd. | 192,295 | 9,571,460 | ||||||
Samsung SDI Co. Ltd. | 31,724 | 10,044,924 | ||||||
SK Hynix, Inc. | 63,365 | 5,502,751 | ||||||
|
| |||||||
40,954,581 | ||||||||
Taiwan 21.0% | ||||||||
Alchip Technologies Ltd. | 168,974 | 13,858,636 | ||||||
ASPEED Technology, Inc. | 188,251 | 15,044,588 | ||||||
Chroma ATE, Inc. | 704,642 | 4,761,689 | ||||||
eMemory Technology, Inc. | 192,019 | 12,030,268 | ||||||
Global Unichip Corp. | 289,589 | 12,942,610 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 605,047 | 9,881,942 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 378,492 | 32,667,644 | ||||||
United Microelectronics Corp. | 6,170,064 | 8,873,257 | ||||||
|
| |||||||
110,060,634 | ||||||||
Thailand 2.0% | ||||||||
Bumrungrad Hospital PCL | 1,422,591 | 10,281,780 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 513,803,127 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 1.6% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
PGIM Core Government Money Market Fund(wb) | 8,412,248 | 8,412,248 | ||||||
PGIM Institutional Money Market Fund(wb) | 17,079 | 17,071 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 8,429,319 | |||||||
|
| |||||||
TOTAL INVESTMENTS 99.6% | 522,232,446 | |||||||
Other assets in excess of liabilities 0.4% | 2,016,427 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 524,248,873 | ||||||
|
|
See Notes to Financial Statements.
14 |
Below is a list of the abbreviation(s) used in the annual report:
ADR—American Depositary Receipt
SOFR—Secured Overnight Financing Rate
* | Non-income producing security. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Long-Term Investments | ||||||||||||
Common Stocks | ||||||||||||
Brazil | $ | 81,207,354 | $ | — | $— | |||||||
China | 60,167,974 | 55,259,412 | — | |||||||||
Hong Kong | — | 8,734,574 | — | |||||||||
India | 37,539,079 | 72,793,665 | — | |||||||||
Indonesia | — | 31,922,291 | — | |||||||||
Mexico | 4,881,783 | — | — | |||||||||
South Korea | 9,896,397 | 31,058,184 | — | |||||||||
Taiwan | 32,667,644 | 77,392,990 | — | |||||||||
Thailand | — | 10,281,780 | — | |||||||||
Short-Term Investments | ||||||||||||
Affiliated Mutual Funds | 8,429,319 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 234,789,550 | $ | 287,442,896 | $— | |||||||
|
|
|
|
|
|
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of October 31, 2023 were as follows:
Semiconductors & Semiconductor Equipment | 21.2 | % | ||
Broadline Retail | 11.1 | |||
Capital Markets | 9.9 | |||
Banks | 9.9 | |||
Hotels, Restaurants & Leisure | 8.7 |
Automobiles | 5.3 | % | ||
Machinery | 5.2 | |||
Beverages | 4.7 | |||
Real Estate Management & Development | 4.2 | |||
Health Care Providers & Services | 4.2 |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Industry Classification (continued):
Interactive Media & Services | 3.8 | % | ||
Electronic Equipment, Instruments & Components | 2.8 | |||
Software | 2.5 | |||
Technology Hardware, Storage & Peripherals | 1.8 | |||
Affiliated Mutual Funds | 1.6 | |||
Consumer Staples Distribution & Retail | 1.6 |
Food Products | 1.1 | % | ||
|
| |||
99.6 | ||||
Other assets in excess of liabilities | 0.4 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
16 |
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $452,207,942) | $ | 513,803,127 | ||
Affiliated investments (cost $8,429,309) | 8,429,319 | |||
Foreign currency, at value (cost $1,804,940) | 1,804,776 | |||
Receivable for investments sold | 1,634,975 | |||
Receivable for Fund shares sold | 1,061,616 | |||
Dividends and interest receivable | 136,171 | |||
Foreign capital gains tax benefit accrued | 25,750 | |||
Tax reclaim receivable | 8,256 | |||
Prepaid expenses | 3,711 | |||
|
| |||
Total Assets | 526,907,701 | |||
|
| |||
Liabilities | ||||
Payable for Fund shares purchased | 1,860,482 | |||
Management fee payable | 488,448 | |||
Shareholders’ reports fee payable | 97,061 | |||
Accrued expenses and other liabilities | 88,550 | |||
Transfer agent fee payable | 62,536 | |||
Custodian and accounting fee payable | 45,440 | |||
Distribution fee payable | 8,317 | |||
Affiliated transfer agent fee payable | 6,570 | |||
Directors’ fees payable | 1,424 | |||
|
| |||
Total Liabilities | 2,658,828 | |||
|
| |||
Net Assets | $ | 524,248,873 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 414 | ||
Paid-in capital in excess of par | 1,055,945,937 | |||
Total distributable earnings (loss) | (531,697,478 | ) | ||
|
| |||
Net assets, October 31, 2023 | $ | 524,248,873 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 17
Statement of Assets and Liabilities
as of October 31, 2023
Class A | ||||||||
Net asset value and redemption price per share, | ||||||||
($24,886,188 ÷ 2,006,536 shares of common stock issued and outstanding) | $ | 12.40 | ||||||
Maximum sales charge (5.50% of offering price) | 0.72 | |||||||
|
| |||||||
Maximum offering price to public | $ | 13.12 | ||||||
|
| |||||||
Class C | ||||||||
Net asset value, offering price and redemption price per share, | ||||||||
($3,140,408 ÷ 271,082 shares of common stock issued and outstanding) | $ | 11.58 | ||||||
|
| |||||||
Class Z | ||||||||
Net asset value, offering price and redemption price per share, | ||||||||
($249,579,867 ÷ 19,678,019 shares of common stock issued and outstanding) | $ | 12.68 | ||||||
|
| |||||||
Class R6 | ||||||||
Net asset value, offering price and redemption price per share, | ||||||||
($246,642,410 ÷ 19,411,324 shares of common stock issued and outstanding) | $ | 12.71 | ||||||
|
|
See Notes to Financial Statements.
18 |
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $1,032,769 foreign withholding tax) | $ | 6,471,938 | ||
Affiliated dividend income | 294,597 | |||
Affiliated income from securities lending, net | 54,543 | |||
|
| |||
Total income | 6,821,078 | |||
|
| |||
Expenses | ||||
Management fee | 6,101,595 | |||
Distribution fee(a) | 120,801 | |||
Transfer agent’s fees and expenses (including affiliated expense of $40,617)(a) | 562,864 | |||
Custodian and accounting fees | 242,969 | |||
Shareholders’ reports | 178,168 | |||
Registration fees(a) | 93,849 | |||
Professional fees | 80,643 | |||
Audit fee | 28,620 | |||
SEC registration fees | 20,059 | |||
Directors’ fees | 19,057 | |||
Miscellaneous | 35,626 | |||
|
| |||
Total expenses | 7,484,251 | |||
Less: Fee waiver and/or expense reimbursement(a) | (797,168 | ) | ||
Distribution fee waiver(a) | (14,033 | ) | ||
|
| |||
Net expenses | 6,673,050 | |||
|
| |||
Net investment income (loss) | 148,028 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $20,131) (net of foreign capital gains taxes $(26,588)) | (85,529,015 | ) | ||
Foreign currency transactions | (728,783 | ) | ||
|
| |||
(86,257,798 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(5,071)) (net of change in foreign capital gains taxes $(260)) | 92,359,191 | |||
Foreign currencies | (3,950 | ) | ||
|
| |||
92,355,241 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 6,097,443 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 6,245,471 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 84,199 | 36,602 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 45,161 | 9,451 | 483,471 | 24,781 | ||||||||||||
Registration fees | 14,774 | 13,102 | 42,385 | 23,588 | ||||||||||||
Fee waiver and/or expense reimbursement | (57,926 | ) | (22,292 | ) | (499,388 | ) | (217,562 | ) | ||||||||
Distribution fee waiver | (14,033 | ) | — | — | — |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 19
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
|
| |||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 148,028 | $ | (4,231,862 | ) | |||
Net realized gain (loss) on investment and foreign currency transactions | (86,257,798 | ) | (475,628,433 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 92,355,241 | (120,339,843 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 6,245,471 | (600,200,138 | ) | |||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 256,873,979 | 920,955,434 | ||||||
Cost of shares purchased | (425,226,056 | ) | (644,755,797 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | (168,352,077 | ) | 276,199,637 | |||||
|
|
|
| |||||
Total increase (decrease) | (162,106,606 | ) | (324,000,501 | ) | ||||
Net Assets: | ||||||||
Beginning of year | 686,355,479 | 1,010,355,980 | ||||||
|
|
|
| |||||
End of year | $ | 524,248,873 | $ | 686,355,479 | ||||
|
|
|
|
See Notes to Financial Statements.
20 |
Financial Highlights
Class A Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $12.39 | $23.66 | $17.66 | $12.16 | $9.58 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.03 | )(b) | (0.12 | ) | (0.23 | ) | (0.14 | ) | (0.04 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.04 | (11.15 | ) | 6.23 | 5.64 | 2.62 | ||||||||||||||
Total from investment operations | 0.01 | (11.27 | ) | 6.00 | 5.50 | 2.58 | ||||||||||||||
Net asset value, end of year | $12.40 | $12.39 | $23.66 | $17.66 | $12.16 | |||||||||||||||
Total Return(c): | 0.08 | % | (47.63 | )% | 33.98 | % | 45.23 | % | 26.93 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $24,886 | $28,082 | $47,683 | $6,144 | $3,806 | |||||||||||||||
Average net assets (000) | $28,066 | $36,017 | $26,309 | $4,507 | $3,074 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.30 | % | 1.30 | % | 1.33 | % | 1.45 | % | 1.45 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.56 | % | 1.54 | % | 1.64 | % | 2.61 | % | 3.35 | % | ||||||||||
Net investment income (loss) | (0.23 | )% | (0.74 | )% | (0.98 | )% | (0.99 | )% | (0.37 | )% | ||||||||||
Portfolio turnover rate(e) | 103 | % | 134 | % | 78 | % | 58 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 21
Financial Highlights (continued)
Class C Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $11.66 | $22.43 | $16.88 | $11.71 | $9.29 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.12 | )(b) | (0.23 | ) | (0.39 | ) | (0.23 | ) | (0.11 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.04 | (10.54 | ) | 5.94 | 5.40 | 2.53 | ||||||||||||||
Total from investment operations | (0.08 | ) | (10.77 | ) | 5.55 | 5.17 | 2.42 | |||||||||||||
Net asset value, end of year | $11.58 | $11.66 | $22.43 | $16.88 | $11.71 | |||||||||||||||
Total Return(c): | (0.69 | )% | (48.02 | )% | 32.96 | % | 44.06 | % | 26.05 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $3,140 | $3,724 | $5,881 | $1,563 | $1,107 | |||||||||||||||
Average net assets (000) | $3,660 | $4,938 | $4,077 | $1,244 | $1,438 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.05 | % | 2.05 | % | 2.09 | % | 2.20 | % | 2.20 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 2.66 | % | 2.69 | % | 2.65 | % | 4.15 | % | 4.23 | % | ||||||||||
Net investment income (loss) | (0.99 | )% | (1.48 | )% | (1.76 | )% | (1.73 | )% | (1.05 | )% | ||||||||||
Portfolio turnover rate(e) | 103 | % | 134 | % | 78 | % | 58 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
22 |
Class Z Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $12.64 | $24.07 | $17.93 | $12.31 | $9.67 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | - | (b) | (0.08 | ) | (0.17 | ) | (0.13 | ) | (0.01 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.04 | (11.35 | ) | 6.31 | 5.75 | 2.65 | ||||||||||||||
Total from investment operations | 0.04 | (11.43 | ) | 6.14 | 5.62 | 2.64 | ||||||||||||||
Net asset value, end of year | $12.68 | $12.64 | $24.07 | $17.93 | $12.31 | |||||||||||||||
Total Return(c): | 0.32 | % | (47.49 | )% | 34.24 | % | 45.65 | % | 27.30 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $249,580 | $393,985 | $642,316 | $34,993 | $2,357 | |||||||||||||||
Average net assets (000) | $341,699 | $549,186 | $293,229 | $11,195 | $1,866 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.05 | % | 1.05 | % | 1.08 | % | 1.20 | % | 1.20 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.20 | % | 1.20 | % | 1.28 | % | 1.93 | % | 3.17 | % | ||||||||||
Net investment income (loss) | - | %(b) | (0.49 | )% | (0.72 | )% | (0.83 | )% | (0.08 | )% | ||||||||||
Portfolio turnover rate(e) | 103 | % | 134 | % | 78 | % | 58 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund 23
Financial Highlights (continued)
Class R6 Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $12.66 | $24.08 | $17.93 | $12.31 | $9.67 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.01 | (0.07 | ) | (0.15 | ) | (0.10 | ) | (0.01 | ) | |||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.04 | (11.35 | ) | 6.30 | 5.72 | 2.65 | ||||||||||||||
Total from investment operations | 0.05 | (11.42 | ) | 6.15 | 5.62 | 2.64 | ||||||||||||||
Net asset value, end of year | $12.71 | $12.66 | $24.08 | $17.93 | $12.31 | |||||||||||||||
Total Return(b): | 0.39 | % | (47.43 | )% | 34.30 | % | 45.65 | % | 27.30 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $246,642 | $260,565 | $314,476 | $18,340 | $12,319 | |||||||||||||||
Average net assets (000) | $268,848 | $302,211 | $121,398 | $14,144 | $11,249 | |||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.98 | % | 0.98 | % | 1.01 | % | 1.20 | % | 1.20 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.06 | % | 1.05 | % | 1.16 | % | 1.80 | % | 2.41 | % | ||||||||||
Net investment income (loss) | 0.09 | % | (0.40 | )% | (0.62 | )% | (0.74 | )% | (0.11 | )% | ||||||||||
Portfolio turnover rate(d) | 103 | % | 134 | % | 78 | % | 58 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(c) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
24 |
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Jennison Emerging Markets Equity Opportunities Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is to seek long-term growth of capital.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the
PGIM Jennison Emerging Markets Equity Opportunities Fund 25
Notes to Financial Statements (continued)
Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
26 |
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover
PGIM Jennison Emerging Markets Equity Opportunities Fund 27
Notes to Financial Statements (continued)
the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based
28 |
upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
The Fund is subject to foreign income taxes imposed by certain countries in which it invests. Additionally, capital gains realized upon disposition of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries. All taxes are computed in accordance with the applicable foreign tax law, and, to the extent permitted, capital losses are used to offset capital gains. Taxes attributable to income are accrued by the Fund as a reduction of income. Current and deferred tax expense attributable to capital gains is reflected as a component of realized or change in unrealized gain/loss on securities in the accompanying financial statements. To the extent that the Fund has country specific capital loss carryforwards, such carryforwards are applied against net unrealized gains when determining the deferred tax liability. Any deferred tax liability incurred by the Fund is included in either Other liabilities or Deferred tax liability on the accompanying Statement of Assets and Liabilities.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |
Net Investment Income | Annually | |
Short-Term Capital Gains | Annually | |
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
PGIM Jennison Emerging Markets Equity Opportunities Fund 29
Notes to Financial Statements (continued)
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “subadviser”). The Manager pays for the services of Jennison.
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |
0.95% of the Fund’s average daily net assets up to and including $5 billion; | 0.95% | |
0.925% of the Fund’s average daily net assets exceeding $5 billion. |
The Manager has contractually agreed, through February 28, 2025, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Expense Limitations | |
A | 1.30% | |
C | 2.05 | |
Z | 1.05 | |
R6 | 0.98 |
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The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through February 28, 2025 to limit such fees on certain classes based on the average daily net assets. The distribution fees are accrued daily and payable monthly.
The Fund’s annual gross and net distribution rates, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | ||
A | 0.30% | 0.25% | ||
C | 1.00 | 1.00 | ||
Z | N/A | N/A | ||
R6 | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||
A | $54,567 | $ 176 | ||
C | — | 1,005 |
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
4. | Other Transactions with Affiliates |
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings
PGIM Jennison Emerging Markets Equity Opportunities Fund 31
Notes to Financial Statements (continued)
from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Affiliated income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act that, subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
5. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |
$639,310,370 | $754,268,355 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | |||||||||||||||||||
Short-Term Investments - Affiliated Mutual Funds: | ||||||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||||||||||
$ — | $ | 233,183,699 | $ | 224,771,451 | $ | — | $ | — | $ | 8,412,248 | 8,412,248 | $ 294,597 | ||||||||||||||
PGIM Institutional Money Market Fund(1)(wb) | ||||||||||||||||||||||||||
27,122,281 | 510,540,177 | 537,660,447 | (5,071 | ) | 20,131 | 17,071 | 17,079 | 54,543(2) | ||||||||||||||||||
$27,122,281 | $ | 743,723,876 | $ | 762,431,898 | $ | (5,071 | ) | $ | 20,131 | $ | 8,429,319 | $349,140 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. In order to present total distributable earnings (loss) and paid-in capital in excess of par on the
32 |
Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to total distributable earnings (loss) and paid-in capital in excess of par for the Fund. The adjustment was due to a net operating loss.
For the year ended October 31, 2023, the adjustments were as follows:
Total Distributable Earnings (Loss) | Paid-in Capital in Excess of Par | |
$3,324,369 | $(3,324,369) |
For the year ended October 31, 2023, there were no distributions paid by the Fund.
For the year ended October 31, 2022, there were no distributions paid by the Fund.
As of October 31, 2023, there were no accumulated undistributed earnings on a tax basis.
The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||
$469,172,889 | $96,399,061 | $(43,339,504) | $53,059,557 |
The differences between GAAP and tax basis were primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies.
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |
$584,784,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. Capital and Ownership
The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of
PGIM Jennison Emerging Markets Equity Opportunities Fund 33
Notes to Financial Statements (continued)
1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 865,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |||
A | 25,000,000 | |||
C | 65,000,000 | |||
Z | 300,000,000 | |||
T | 225,000,000 | |||
R6 | 250,000,000 |
The Fund currently does not have any Class T shares outstanding.
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||
Z | 76,288 | 0.4% |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | — | —% | ||
Unaffiliated | 8 | 91.2 |
34 |
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 363,156 | $ | 4,692,293 | |||||
Shares purchased | (645,625 | ) | (8,259,719 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (282,469 | ) | (3,567,426 | ) | ||||
Shares issued upon conversion from other share class(es) | 40,943 | 525,720 | ||||||
Shares purchased upon conversion into other share class(es) | (17,846 | ) | (230,995 | ) | ||||
Net increase (decrease) in shares outstanding | (259,372 | ) | $ | (3,272,701 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 1,055,027 | $ | 18,358,156 | |||||
Shares purchased | (743,321 | ) | (12,558,145 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 311,706 | 5,800,011 | ||||||
Shares issued upon conversion from other share class(es) | 25,109 | 378,868 | ||||||
Shares purchased upon conversion into other share class(es) | (86,308 | ) | (1,418,730 | ) | ||||
Net increase (decrease) in shares outstanding | 250,507 | $ | 4,760,149 | |||||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 60,381 | $ | 736,562 | |||||
Shares purchased | (85,591 | ) | (1,031,457 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (25,210 | ) | (294,895 | ) | ||||
Shares purchased upon conversion into other share class(es) | (23,002 | ) | (278,199 | ) | ||||
Net increase (decrease) in shares outstanding | (48,212 | ) | $ | (573,094 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 161,915 | $ | 2,666,741 | |||||
Shares purchased | (96,511 | ) | (1,384,438 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 65,404 | 1,282,303 | ||||||
Shares purchased upon conversion into other share class(es) | (8,240 | ) | (111,420 | ) | ||||
Net increase (decrease) in shares outstanding | 57,164 | $ | 1,170,883 | |||||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 11,409,752 | $ | 150,815,751 | |||||
Shares purchased | (22,458,380 | ) | (294,535,847 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (11,048,628 | ) | (143,720,096 | ) | ||||
Shares issued upon conversion from other share class(es) | 67,490 | 874,907 | ||||||
Shares purchased upon conversion into other share class(es) | (505,193 | ) | (6,826,928 | ) | ||||
Net increase (decrease) in shares outstanding | (11,486,331 | ) | $ | (149,672,117 | ) |
PGIM Jennison Emerging Markets Equity Opportunities Fund 35
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||
Year ended October 31, 2022: | ||||||||
Shares sold | 34,906,372 | $ | 632,098,939 | |||||
Shares purchased | (30,471,330 | ) | (506,872,022 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 4,435,042 | 125,226,917 | ||||||
Shares issued upon conversion from other share class(es) | 76,249 | 1,312,777 | ||||||
Shares purchased upon conversion into other share class(es) | (26,729 | ) | (438,625 | ) | ||||
Net increase (decrease) in shares outstanding | 4,484,562 | $ | 126,101,069 | |||||
Class R6 | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 7,656,472 | $ | 100,629,373 | |||||
Shares purchased | (9,268,913 | ) | (121,399,033 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (1,612,441 | ) | (20,769,660 | ) | ||||
Shares issued upon conversion from other share class(es) | 486,152 | 6,589,165 | ||||||
Shares purchased upon conversion into other share class(es) | (50,538 | ) | (653,670 | ) | ||||
Net increase (decrease) in shares outstanding | (1,176,827 | ) | $ | (14,834,165 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 15,203,394 | $ | 267,831,598 | |||||
Shares purchased | (7,690,840 | ) | (123,941,192 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 7,512,554 | 143,890,406 | ||||||
Shares issued upon conversion from other share class(es) | 31,732 | 482,578 | ||||||
Shares purchased upon conversion into other share class(es) | (13,580 | ) | (205,448 | ) | ||||
Net increase (decrease) in shares outstanding | 7,530,706 | $ | 144,167,536 |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% |
36 |
Current SCA | Prior SCA | |||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund utilized the SCA during the year ended October 31, 2023. The average daily balance for the 14 days that the Fund had loans outstanding during the period was approximately $2,813,786, borrowed at a weighted average interest rate of 5.83%. The maximum loan outstanding amount during the period was $10,455,000. At October 31, 2023, the Fund did not have an outstanding loan amount.
9. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Country Risk: Changes in the business environment may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes or stability factors such as mass riots, civil war and other potential events may contribute to companies’ operational risks.
Currency Risk: The Fund’s net asset value could decline as a result of changes in exchange rates, which could adversely affect the Fund’s investments in currencies, or in securities that trade in, and receive revenues related to, currencies, or in derivatives that provide exposure to currencies. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation, may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on
PGIM Jennison Emerging Markets Equity Opportunities Fund 37
Notes to Financial Statements (continued)
the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset classes. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or
38 |
restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Investments in China Risk: Investments in China subject the Fund to risks specific to China and may make it more volatile than other funds. Over the last few decades, the Chinese government has undertaken reform of economic and market practices and has expanded the sphere of private ownership of property in China. However, Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation.
China has experienced security concerns, such as terrorism and strained international relations. Incidents involving China’s or the region’s security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and the Fund’s investments. Export growth continues to be a major driver of China’s rapid economic growth. Reduction in spending on Chinese products and services, institution of additional tariffs or other trade barriers, including as a result of heightened trade tensions between China and the U.S., or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy or the Fund. For example, a series of executive orders issued between November 2020 and June 2021 prohibit the Fund from investing in certain companies identified by the U.S. government as “Chinese Military Industrial Complex Companies.” The restrictions in these executive orders may force the subadviser to sell certain positions and may restrict the Fund from future investments the subadviser deems otherwise attractive.
Chinese companies, including Chinese companies that are listed on U.S. exchanges, are not subject to the same degree of regulatory requirements, accounting standards or auditor oversight as companies in more developed countries, and as a result, information about the Chinese securities in which the Fund invests may be less reliable or complete. There may be
PGIM Jennison Emerging Markets Equity Opportunities Fund 39
Notes to Financial Statements (continued)
significant obstacles to obtaining information necessary for investigations into or litigation against Chinese companies and shareholders may have limited legal remedies.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Capitalization Risk: The Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and mid-cap companies are less stable than the prices of large-cap stocks and may present greater risks. Large capitalization companies as a group could fall out of favor with the market, causing the Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or
40 |
conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
10. | Recent Regulatory Developments |
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
PGIM Jennison Emerging Markets Equity Opportunities Fund 41
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Jennison Emerging Markets Equity Opportunities Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison Emerging Markets Equity Opportunities Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 19, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 19, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
42 |
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members
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Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Jennison Emerging Markets Equity Opportunities Fund
Independent Board Members
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Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
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Independent Board Members
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Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison Emerging Markets Equity Opportunities Fund
Independent Board Members
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Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members
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Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer (“PEO”) (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Jennison Emerging Markets Equity Opportunities Fund
Fund Officers(a)
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Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a)
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Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Jennison Emerging Markets Equity Opportunities Fund
Fund Officers(a)
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Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a)
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Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) | Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively. |
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Jennison Emerging Markets Equity Opportunities Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Trustees
The Board of Directors (the “Board”) of PGIM Jennison Emerging Markets Equity Opportunities Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with Jennison Associates LLC (“Jennison”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and Jennison. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a
1 PGIM Jennison Emerging Markets Equity Opportunities Fund is a series of Prudential World Fund, Inc.
PGIM Jennison Emerging Markets Equity Opportunities Fund
Approval of Advisory Agreements (continued)
management agreement, and between PGIM Investments and Jennison, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ determinations to approve the renewal of the agreements are discussed separately below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and Jennison. The Board noted that Jennison is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by Jennison, including investment research and security selection, as well as compliance with the Fund’s investment restrictions, policies and procedures. The Board considered PGIM Investments’ evaluation of Jennison as well as PGIM Investments’ recommendation, based on its review of Jennison, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and Jennison, and also considered the qualifications, backgrounds and responsibilities of Jennison’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and Jennison’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PGIM Investments and Jennison.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by Jennison, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and Jennison under the management and subadvisory agreements.
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Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments and Jennison
The Board considered potential ancillary benefits that might be received by PGIM Investments and Jennison and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by Jennison included its ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits
PGIM Jennison Emerging Markets Equity Opportunities Fund
Approval of Advisory Agreements (continued)
derived by PGIM Investments and Jennison were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three- and five-year periods ended December 31, 2022. The Board considered that the Fund commenced operations on September 16, 2014 and that longer-term performance was not yet available.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
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Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
4th Quartile | 1st Quartile | 1st Quartile | N/A | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 2nd Quartile |
● | The Board noted that the Fund outperformed its benchmark index over the three- and five-year periods, and underperformed over the one-year period. |
● | The Board also noted that the Fund outperformed its benchmark index and peer group median in five out of the seven calendar years since its inception. |
● | The Board and PGIM Investments agreed to retain the existing contractual expense cap, which (exclusive of certain fees and expenses) caps the Fund’s annual operating expenses at 1.30% for Class A shares, 2.05% for Class C shares, 0.98% for Class R6 shares, and 1.05% for Class Z shares through February 29, 2024. |
● | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
● | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
● | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Jennison Emerging Markets Equity Opportunities Fund
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street | (800) 225-1852 | pgim.com/investments | ||
Newark, NJ 07102 |
PROXY VOTING
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.
DIRECTORS
Ellen S. Alberding ● Kevin J. Bannon ● Scott E. Benjamin ● Linda W. Bynoe ● Barry H. Evans ● Keith F. Hartstein ● Laurie Simon Hodrick ● Stuart S. Parker ● Brian K. Reid ● Grace C. Torres
OFFICERS
Stuart S. Parker, President ● Scott E. Benjamin, Vice President ● Christian J. Kelly, Chief Financial Officer ● Claudia DiGiacomo, Chief Legal Officer ● Andrew Donohue, Chief Compliance Officer ● Russ Shupak, Treasurer and Principal Accounting Officer ● Kelly Florio, Anti-Money Laundering Compliance Officer ● Andrew R. French, Secretary ● Melissa Gonzalez, Assistant Secretary ● Kelly A. Coyne, Assistant Secretary ● Patrick E. McGuinness, Assistant Secretary ● Debra Rubano, Assistant Secretary ● George Hoyt, Assistant Secretary ● Devan Goolsby, Assistant Secretary ● Lana Lomuti, Assistant Treasurer ● Elyse M. McLaughlin, Assistant Treasurer ● Deborah Conway, Assistant Treasurer ● Robert W. McCormack, Assistant Treasurer
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.
E-DELIVERY
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Jennison Emerging Markets Equity Opportunities Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee.
AVAILABILITY OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852.
Mutual Funds: | ||||
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY |
MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM JENNISON EMERGING MARKETS EQUITY OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | R6 | ||||
NASDAQ | PDEAX | PDECX | PDEZX | PDEQX | ||||
CUSIP | 743969644 | 743969636 | 743969610 | 743969628 |
MF225E
PGIM JENNISON INTERNATIONAL
OPPORTUNITIES FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
| 3 | |||
| 4 | |||
Growth of a $10,000 Investment
| 5 | |||
Strategy and Performance Overview
| 8 | |||
| 11 | |||
Holdings and Financial Statements
| 13 | |||
Approval of Advisory Agreements
| 60 |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at pgim.com/investments |
Dear Shareholder:
We hope you find the annual report for the PGIM Jennison International Opportunities Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison International Opportunities Fund
December 15, 2023
PGIM Jennison International Opportunities Fund | 3 |
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||||
One Year (%)
| Five Years (%)
| Ten Years (%)
| Since Inception (%)
| |||||
Class A | ||||||||
(with sales charges) | 2.91 | 7.48 | 5.70 | — | ||||
(without sales charges) | 8.90 | 8.70 | 6.30 | — | ||||
Class C | ||||||||
(with sales charges) | 7.02 | 7.82 | 5.47 | — | ||||
(without sales charges) | 8.02 | 7.82 | 5.47 | — | ||||
Class R | ||||||||
(without sales charges) | 8.51 | 8.29 | N/A | 5.05 (11/20/2017) | ||||
Class Z | ||||||||
(without sales charges) | 9.13 | 8.91 | 6.54 | — | ||||
Class R2 | ||||||||
(without sales charges) | 8.65 | N/A | N/A | 10.05 (12/27/2018) | ||||
Class R4 | ||||||||
(without sales charges) | 8.92 | N/A | N/A | 10.34 (12/27/2018) | ||||
Class R6 | ||||||||
(without sales charges) | 9.20 | 8.99 | N/A | 8.28 (12/23/2015) | ||||
MSCI All Country World ex-US Index | ||||||||
12.07 | 3.46 | 2.54 | — |
Average Annual Total Returns as of 10/31/23 Since Inception (%) | ||||||
Class R | Class R2, Class R4 | Class R6 | ||||
(11/20/2017)
| (12/27/2018)
| (12/23/2015)
| ||||
MSCI All Country World ex-US Index | 1.29 | 4.37 | 4.41 |
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the class’s inception date.
4 | Visit our website at pgim.com/investments |
Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the MSCI ACWI ex-US Index by portraying the initial account values at the beginning of the 10-year period for Class Z (October 31, 2013) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Jennison International Opportunities Fund | 5 |
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class R | Class Z | Class R2 | Class R4 | Class R6 | ||||||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | None | None | None | |||||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | None | None | None | |||||||
Annual distribution or distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | 0.75% (0.50% currently) | None | 0.25% | None | None | |||||||
Shareholder services fees | None | None | None | None | 0.10%* | 0.10%* | None |
*Shareholder service fee reflects maximum allowable fees under a shareholder services plan.
Benchmark Definition
MSCI All Country World ex-US Index—The Morgan Stanley Capital International All Country World ex-US Index (MSCI ACWI ex-US Index) is an unmanaged, free float-adjusted, market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world, with the exception of US-based companies. The Index includes both developed and emerging markets.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Presentation of Fund Holdings as of 10/31/23
Ten Largest Holdings | Line of Business | Country | % of Net Assets | |||
Novo Nordisk A/S (Class B Stock) | Pharmaceuticals | Denmark | 7.3% | |||
Ferrari NV | Automobiles | Italy | 6.6% | |||
Hermes International SCA | Textiles, Apparel & Luxury Goods | France | 5.4% | |||
MercadoLibre, Inc. | Broadline Retail | Brazil | 5.2% | |||
L’Oreal SA | Personal Care Products | France | 5.1% | |||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | Semiconductors & Semiconductor Equipment | Taiwan | 4.6% | |||
ASM International NV | Semiconductors & Semiconductor Equipment | Netherlands | 3.4% | |||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | France | 3.4% | |||
Compass Group plc | Hotels, Restaurants & Leisure | United Kingdom | 3.3% | |||
ASML Holding NV | Semiconductors & Semiconductor Equipment
| Netherlands | 3.3% |
Holdings reflect only long-term investments and are subject to change.
PGIM Jennison International Opportunities Fund | 7 |
Strategy and Performance Overview*
(unaudited)
How did the Fund perform?
The PGIM Jennison International Opportunities Fund’s Class Z shares returned 9.13% in the 12-month reporting period that ended October 31, 2023, underperforming the 12.07% return of the MSCI All Country World Ex-US Index (the Index).
What were the market conditions?
● | The past year was dominated by interest rate hikes by major central banks. The success of this effort to lower inflation, along with clearing of the global supply chain, resilient consumer spending, and most important, healthy corporate earnings, drove strong equity market performance over most of the reporting period. |
● | In the last three months of the period, however, market sentiment turned negative due to sustained upward pressure on interest rates and geopolitical instability—including the tragic events in the Middle East. |
● | Within the Index, all sectors were positive for the period. Information technology, consumer discretionary, industrials, energy, communication services, and financials all performed better than the overall Index. |
What worked?
● | Security selection within the healthcare, consumer discretionary, and consumer staples sectors contributed the most to the Fund’s performance relative to the Index during the reporting period. |
● | Top contributors, all in the sectors cited above, included Novo Nordisk A/S, Ferrari N.V., Hermès International SCA, LVMH SE, and Brunello Cucinelli S.p.A. |
● | Novo Nordisk’s sales of diabetes and weight-loss drugs Ozempic and Wegovy continued to exceed expectations. Supply constraints for Wegovy, in Jennison’s view, are expected to improve. |
● | High-end automaker Ferrari continued to benefit from its strong model mix and pricing. Global orders remained at record levels, with delivery times for newly purchased vehicles at more than two years for certain models. |
● | Luxury goods maker Hermés benefited from sales strength across regions, as well as the company’s success in passing on price increases. All geographies and categories performed better than expected over most of the period. |
● | Luxury goods company LVMH benefited from steady demand, lack of discounting, and market share gains. More recently, shares underperformed due to some concerns regarding slowing sales in high-end luxury. |
● | Brunello Cucinelli S.p.A. (consumer discretionary), an Italian high-end apparel and accessories firm, reported solid results in the period. While some concerns over slowing growth in high-end luxury emerged, the company delivered strong sales into period-end. In Jennison’s opinion, the resilience of the company’s fundamentals are likely to continue supporting its top-line outperformance. |
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What didn’t work?
● | Security selection within information technology and financials was largely responsible for the Fund’s performance shortfall relative to the Index during the reporting period. |
● | Notable underperformers included Atlassian Corp., Samsung SDI Co. Ltd., Lasertec Corp., Advantest Corp., and Hong Kong Exchanges and Clearing Limited. |
● | Project management software developer Atlassian reported disappointing results early in the period that highlighted the risks to the company’s new business prospects in a slowing economy. As a result, Jennison eliminated the Fund’s position during the reporting period. |
● | Shares in South Korean electric vehicle battery company Samsung SDI declined on concerns of slowing growth. The position was eliminated during the reporting period. |
● | Lasertec shares declined due to near-term order weakness, and the position was eliminated during the reporting period. |
● | Shares in Japanese specialized semiconductor testing equipment maker Advantest, a recent addition to the Fund, lost ground due to weak semiconductor demand, especially for smart phones. However, AI demand is building, and Jennison believes business should expand, driven by growth in the AI chip and high-end smartphone markets. |
● | Shares in financial exchange company Hong Kong Exchanges and Clearing underperformed despite the company’s solid results. While net profit and investment income were both up, a change in trading fee structure negatively affected fee income. |
Current outlook
● | Sentiment in the near term is clouded by monetary policy and economic growth uncertainties that will likely remain into year-end. |
● | Consumers, facing less robust prospects overall, are beginning to show stress—primarily at lower income levels. In Jennison’s opinion, Fund holdings most directly tied to high-end consumer spending remain best positioned to take wallet share and grow revenues and profits on a multi-year basis. |
● | Additionally, the broad categories of cloud adoption, data mining, and analytics are still in nascent development. Adoption of generative-AI capabilities remain at the forefront of Jennison’s longer-term investment plans across a wide range of industries. |
● | Jennison remains vigilant in evaluating the investment landscape against a mixed political and economic backdrop, while continuing to focus on companies with the ability to innovate, invest, and grow through various macroeconomic environments. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based
PGIM Jennison International Opportunities Fund | 9 |
Strategy and Performance Overview* (continued)
on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Jennison International Opportunities Fund | 11 |
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Jennison International Opportunities Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $ 899.90 | 1.09% | $5.22 | |||||
Hypothetical | $1,000.00 | $1,019.71 | 1.09% | $5.55 | ||||||
Class C | Actual | $1,000.00 | $ 895.90 | 1.90% | $9.08 | |||||
Hypothetical | $1,000.00 | $1,015.63 | 1.90% | $9.65 | ||||||
Class R | Actual | $1,000.00 | $ 898.40 | 1.47% | $7.03 | |||||
Hypothetical | $1,000.00 | $1,017.80 | 1.47% | $7.48 | ||||||
Class Z | Actual | $1,000.00 | $ 900.70 | 0.90% | $4.31 | |||||
Hypothetical | $1,000.00 | $1,020.67 | 0.90% | $4.58 | ||||||
Class R2 | Actual | $1,000.00 | $ 898.90 | 1.34% | $6.41 | |||||
Hypothetical | $1,000.00 | $1,018.45 | 1.34% | $6.82 | ||||||
Class R4 | Actual | $1,000.00 | $ 899.70 | 1.09% | $5.22 | |||||
Hypothetical | $1,000.00 | $1,019.71 | 1.09% | $5.55 | ||||||
Class R6 | Actual | $1,000.00 | $ 901.00 | 0.84% | $4.02 | |||||
Hypothetical | $1,000.00 | $1,020.97 | 0.84% | $4.28 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
12 | Visit our website at pgim.com/investments |
as of October 31, 2023
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 96.3% | ||||||||
COMMON STOCKS 95.6% | ||||||||
Brazil 8.3% | ||||||||
MercadoLibre, Inc.* | 172,696 | $ | 214,270,835 | |||||
NU Holdings Ltd. (Class A Stock)* | 15,481,499 | 126,948,292 | ||||||
|
| |||||||
341,219,127 | ||||||||
Denmark 7.3% | ||||||||
Novo Nordisk A/S (Class B Stock) | 3,130,266 | 301,996,281 | ||||||
France 20.8% | ||||||||
Dassault Systemes SE | 2,373,016 | 97,752,527 | ||||||
Hermes International SCA | 118,439 | 220,986,546 | ||||||
L’Oreal SA | 502,851 | 211,363,721 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 193,100 | 138,246,194 | ||||||
Pernod Ricard SA | 353,492 | 62,771,841 | ||||||
Safran SA | 814,190 | 127,192,392 | ||||||
|
| |||||||
858,313,221 | ||||||||
Hong Kong 1.1% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 1,255,539 | 43,922,085 | ||||||
India 2.3% | ||||||||
HDFC Bank Ltd., ADR | 1,663,374 | 94,063,800 | ||||||
Indonesia 1.7% | ||||||||
Bank Central Asia Tbk PT | 128,182,925 | 70,618,621 | ||||||
Israel 1.4% | ||||||||
Mobileye Global, Inc. (Class A Stock)*(a) | 1,662,949 | 59,317,391 | ||||||
Italy 10.5% | ||||||||
Brunello Cucinelli SpA | 1,426,071 | 114,709,934 | ||||||
Ferrari NV | 900,636 | 272,626,110 | ||||||
Moncler SpA | 879,495 | 45,678,486 | ||||||
|
| |||||||
433,014,530 | ||||||||
Japan 4.3% | ||||||||
Advantest Corp. | 2,569,231 | 66,179,886 | ||||||
Keyence Corp. | 282,818 | 109,484,141 | ||||||
|
| |||||||
175,664,027 |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 13 |
Schedule of Investments (continued)
as of October 31, 2023
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Netherlands 9.0% | ||||||||
Argenx SE, ADR* | 196,723 | $ | 92,375,219 | |||||
ASM International NV | 341,433 | 140,902,558 | ||||||
ASML Holding NV | 226,826 | 136,349,739 | ||||||
|
| |||||||
369,627,516 | ||||||||
Spain 3.2% | ||||||||
Industria de Diseno Textil SA(a) | 3,840,668 | 132,572,087 | ||||||
Sweden 2.0% | ||||||||
Atlas Copco AB (Class A Stock) | 6,228,601 | 80,654,289 | ||||||
Switzerland 1.5% | ||||||||
On Holding AG (Class A Stock)*(a) | 2,494,733 | 64,039,796 | ||||||
Taiwan 5.8% | ||||||||
Global Unichip Corp. | 1,083,558 | 48,427,492 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 2,195,266 | 189,473,409 | ||||||
|
| |||||||
237,900,901 | ||||||||
United Kingdom 8.5% | ||||||||
Ashtead Group PLC | 1,575,509 | 90,359,391 | ||||||
AstraZeneca PLC | 992,012 | 124,203,625 | ||||||
Compass Group PLC | 5,448,936 | 137,375,231 | ||||||
|
| |||||||
351,938,247 | ||||||||
United States 7.9% | ||||||||
CyberArk Software Ltd.* | 375,467 | 61,441,420 | ||||||
Globant SA* | 274,571 | 46,756,695 | ||||||
Lululemon Athletica, Inc.* | 274,045 | 107,831,227 | ||||||
Schneider Electric SE | 721,871 | 111,065,104 | ||||||
|
| |||||||
327,094,446 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(cost $3,386,495,006) | 3,941,956,365 | |||||||
|
|
See Notes to Financial Statements.
14 |
Description | Shares | Value | ||||||
PREFERRED STOCK 0.7% | ||||||||
Germany | ||||||||
Dr. Ing. h.c. F. Porsche AG (PRFC), 144A | ||||||||
(cost $31,513,392) | 354,351 | $ | 31,057,110 | |||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | ||||||||
(cost $3,418,008,398) | 3,973,013,475 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 8.1% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
PGIM Core Government Money Market Fund(wb) | 122,656,274 | 122,656,274 | ||||||
PGIM Institutional Money Market Fund | ||||||||
(cost $210,570,354; includes $209,891,572 of cash collateral for securities on loan)(b)(wb) | 210,696,049 | 210,590,701 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(cost $333,226,628) | 333,246,975 | |||||||
|
| |||||||
TOTAL INVESTMENTS 104.4% | ||||||||
(cost $3,751,235,026) | 4,306,260,450 | |||||||
Liabilities in excess of other assets (4.4)% | (181,854,724 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 4,124,405,726 | ||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
ADR—American Depositary Receipt
PRFC—Preference Shares
SOFR—Secured Overnight Financing Rate
* | Non-income producing security. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $203,411,868; cash collateral of $209,891,572 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 15 |
Schedule of Investments (continued)
as of October 31, 2023
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | |||||||||||||
Investments in Securities | |||||||||||||||
Assets | |||||||||||||||
Long-Term Investments | |||||||||||||||
Common Stocks | |||||||||||||||
Brazil | $ | 341,219,127 | $ | — | $ | — | |||||||||
Denmark | — | 301,996,281 | — | ||||||||||||
France | — | 858,313,221 | — | ||||||||||||
Hong Kong | — | 43,922,085 | — | ||||||||||||
India | 94,063,800 | — | — | ||||||||||||
Indonesia | — | 70,618,621 | — | ||||||||||||
Israel | 59,317,391 | — | — | ||||||||||||
Italy | — | 433,014,530 | — | ||||||||||||
Japan | — | 175,664,027 | — | ||||||||||||
Netherlands | 92,375,219 | 277,252,297 | — | ||||||||||||
Spain | — | 132,572,087 | — | ||||||||||||
Sweden | — | 80,654,289 | — | ||||||||||||
Switzerland | 64,039,796 | — | — | ||||||||||||
Taiwan | 189,473,409 | 48,427,492 | — | ||||||||||||
United Kingdom | — | 351,938,247 | — | ||||||||||||
United States | 216,029,342 | 111,065,104 | — | ||||||||||||
Preferred Stock | |||||||||||||||
Germany | — | 31,057,110 | — | ||||||||||||
Short-Term Investments | |||||||||||||||
Affiliated Mutual Funds | 333,246,975 | — | — | ||||||||||||
|
|
|
|
|
| ||||||||||
Total | $ | 1,389,765,059 | $ | 2,916,495,391 | $ | — | |||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
16 |
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of October 31, 2023 were as follows:
Textiles, Apparel & Luxury Goods | 16.7 | % | ||
Semiconductors & Semiconductor Equipment | 14.1 | |||
Pharmaceuticals | 10.3 | |||
Affiliated Mutual Funds (5.1% represents | 8.1 | |||
Automobiles | 7.3 | |||
Banks | 7.1 | |||
Broadline Retail | 5.2 | |||
Personal Care Products | 5.1 | |||
Software | 3.9 | |||
Hotels, Restaurants & Leisure | 3.3 | |||
Specialty Retail | 3.2 | |||
Aerospace & Defense | 3.1 | |||
Electrical Equipment | 2.7 |
Electronic Equipment, Instruments & Components | 2.7 | % | ||
Biotechnology | 2.3 | |||
Trading Companies & Distributors | 2.2 | |||
Machinery | 2.0 | |||
Beverages | 1.5 | |||
Automobile Components | 1.4 | |||
IT Services | 1.1 | |||
Capital Markets | 1.1 | |||
|
| |||
104.4 | ||||
Liabilities in excess of other assets | (4.4 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions where the legal right to set-off exists is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description |
Gross Market | Collateral Pledged/(Received)(1) | Net Amount | ||||||||||||
Securities on Loan | $203,411,868 | $(203,411,868) | $— |
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 17 |
Statement of Assets and Liabilities
as of October 31, 2023
Assets | |||||
Investments at value, including securities on loan of $203,411,868: | |||||
Unaffiliated investments (cost $3,418,008,398) | $3,973,013,475 | ||||
Affiliated investments (cost $333,226,628) | 333,246,975 | ||||
Foreign currency, at value (cost $14,792) | 14,521 | ||||
Receivable for investments sold | 51,358,470 | ||||
Receivable for Fund shares sold | 11,192,311 | ||||
Tax reclaim receivable | 4,253,397 | ||||
Dividends receivable | 2,454,567 | ||||
Prepaid expenses and other assets | 58,466 | ||||
|
| ||||
Total Assets | 4,375,592,182 | ||||
|
| ||||
Liabilities | |||||
Payable to broker for collateral for securities on loan | 209,891,572 | ||||
Payable for investments purchased | 22,662,531 | ||||
Payable for Fund shares purchased | 14,369,634 | ||||
Management fee payable | 2,660,287 | ||||
Accrued expenses and other liabilities | 1,441,615 | ||||
Distribution fee payable | 137,738 | ||||
Affiliated transfer agent fee payable | 17,724 | ||||
Directors’ fees payable | 5,355 | ||||
|
| ||||
Total Liabilities | 251,186,456 | ||||
|
| ||||
Net Assets | $4,124,405,726 | ||||
|
| ||||
Net assets were comprised of: | |||||
Common stock, at par | $ 1,687 | ||||
Paid-in capital in excess of par | 4,980,759,142 | ||||
Total distributable earnings (loss) | (856,355,103 | ) | |||
|
| ||||
Net assets, October 31, 2023 | $4,124,405,726 | ||||
|
|
See Notes to Financial Statements.
18 |
Class A | ||||||||
Net asset value and redemption price per share, | $ | 23.99 | ||||||
Maximum sales charge (5.50% of offering price) | 1.40 | |||||||
|
| |||||||
Maximum offering price to public | $ | 25.39 | ||||||
|
| |||||||
Class C | ||||||||
Net asset value, offering price and redemption price per share, | $ | 21.95 | ||||||
|
| |||||||
Class R | ||||||||
Net asset value, offering price and redemption price per share, | $ | 23.60 | ||||||
|
| |||||||
Class Z | ||||||||
Net asset value, offering price and redemption price per share, | $ | 24.50 | ||||||
|
| |||||||
Class R2 | ||||||||
Net asset value, offering price and redemption price per share, | $ | 24.00 | ||||||
|
| |||||||
Class R4 | ||||||||
Net asset value, offering price and redemption price per share, | $ | 24.30 | ||||||
|
| |||||||
Class R6 | ||||||||
Net asset value, offering price and redemption price per share, | $ | 24.57 | ||||||
|
|
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 19 |
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $5,601,430 foreign withholding tax) | $ | 42,312,447 | ||
Affiliated dividend income | 3,869,840 | |||
Income from securities lending, net (including affiliated income of $1,192,842) | 1,362,871 | |||
|
| |||
Total income | 47,545,158 | |||
|
| |||
Expenses | ||||
Management fee | 34,454,241 | |||
Distribution fee(a) | 2,401,156 | |||
Shareholder servicing fees(a) | 21,665 | |||
Transfer agent’s fees and expenses (including affiliated expense of $93,398)(a) | 3,417,989 | |||
Custodian and accounting fees | 413,483 | |||
Shareholders’ reports | 326,404 | |||
Registration fees(a) | 167,591 | |||
Professional fees | 96,831 | |||
Directors’ fees | 71,015 | |||
Audit fee | 28,620 | |||
SEC registration fees | 7,322 | |||
Miscellaneous | 102,163 | |||
|
| |||
Total expenses | 41,508,480 | |||
Less: Fee waiver and/or expense reimbursement(a) | (1,418,989 | ) | ||
Distribution fee waiver(a) | (650,406 | ) | ||
|
| |||
Net expenses | 39,439,085 | |||
|
| |||
Net investment income (loss) | 8,106,073 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $97,662) | (378,037,317 | ) | ||
Foreign currency transactions | (1,761,833 | ) | ||
|
| |||
(379,799,150 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $8,999) | 667,750,819 | |||
Foreign currencies | 390,657 | |||
|
| |||
668,141,476 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 288,342,326 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 296,448,399 | ||
|
|
See Notes to Financial Statements.
20 |
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class R | Class Z | Class R2 | Class R4 | Class R6 | ||||||||||||||||||||||
Distribution fee | 343,943 | 248,384 | 1,779,245 | — | 29,584 | — | — | |||||||||||||||||||||
Shareholder servicing fees | — | — | — | — | 11,833 | 9,832 | — | |||||||||||||||||||||
Transfer agent’s fees and expenses | 129,009 | 28,655 | 308,803 | 2,826,645 | 19,426 | 15,483 | 89,968 | |||||||||||||||||||||
Registration fees | 18,705 | 11,750 | 5,253 | 84,781 | 4,602 | 5,967 | 36,533 | |||||||||||||||||||||
Fee waiver and/or expense reimbursement | (136,365 | ) | (23,055 | ) | — | (1,248,705 | ) | (5,122 | ) | (5,742 | ) | — | ||||||||||||||||
Distribution fee waiver | (57,324 | ) | — | (593,082 | ) | — | — | — | — |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 21 |
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 8,106,073 | $ | (8,021,795 | ) | |||
Net realized gain (loss) on investment and foreign currency transactions | (379,799,150 | ) | (1,020,071,756 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 668,141,476 | (1,948,124,913 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 296,448,399 | (2,976,218,464 | ) | |||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | — | (181,181 | ) | |||||
Class C | — | (38,113 | ) | |||||
Class R | — | (296,402 | ) | |||||
Class Z | — | (3,142,102 | ) | |||||
Class R2 | — | (11,816 | ) | |||||
Class R4 | — | (12,841 | ) | |||||
Class R6 | — | (1,853,539 | ) | |||||
|
|
|
| |||||
— | (5,535,994 | ) | ||||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (2,270 | ) | |||||
Class C | — | (478 | ) | |||||
Class R | — | (3,713 | ) | |||||
Class Z | — | (39,364 | ) | |||||
Class R2 | — | (148 | ) | |||||
Class R4 | — | (161 | ) | |||||
Class R6 | — | (23,221 | ) | |||||
|
|
|
| |||||
— | (69,355 | ) | ||||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 1,730,279,329 | 3,237,458,222 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | — | 5,596,238 | ||||||
Cost of shares purchased | (1,558,581,592 | ) | (2,859,687,305 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | 171,697,737 | 383,367,155 | ||||||
|
|
|
| |||||
Total increase (decrease) | 468,146,136 | (2,598,456,658 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 3,656,259,590 | 6,254,716,248 | ||||||
|
|
|
| |||||
End of year | $ | 4,124,405,726 | $ | 3,656,259,590 | ||||
|
|
|
|
See Notes to Financial Statements.
22
Financial Highlights
Class A Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $22.03 | $38.51 | $28.14 | $19.51 | $15.82 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.01 | (0.09 | ) | (0.25 | ) | (0.12 | ) | 0.01 | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.95 | (16.36 | ) | 10.62 | 8.75 | 3.68 | ||||||||||||||
Total from investment operations | 1.96 | (16.45 | ) | 10.37 | 8.63 | 3.69 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | - | ||||||||||||||
Net asset value, end of year | $23.99 | $22.03 | $38.51 | $28.14 | $19.51 | |||||||||||||||
Total Return(c): | 8.90 | % | (42.74 | )% | 36.90 | % | 44.11 | % | 23.39 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $102,499 | $105,135 | $208,515 | $76,093 | $26,778 | |||||||||||||||
Average net assets (000) | $114,648 | $150,632 | $142,641 | $46,059 | $20,599 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.09 | % | 1.09 | % | 1.09 | % | 1.09 | % | 1.09 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.26 | % | 1.27 | % | 1.27 | % | 1.34 | % | 1.46 | % | ||||||||||
Net investment income (loss) | 0.03 | % | (0.34 | )% | (0.71 | )% | (0.52 | )% | 0.04 | % | ||||||||||
Portfolio turnover rate(e) | 59 | % | 76 | % | 41 | % | 43% | 53 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 23 |
Financial Highlights (continued)
Class C Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $20.32 | $35.82 | $26.38 | $18.44 | $15.08 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.18 | )(b) | (0.30 | ) | (0.50 | ) | (0.29 | ) | (0.13 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.81 | (15.17 | ) | 9.94 | 8.23 | 3.49 | ||||||||||||||
Total from investment operations | 1.63 | (15.47 | ) | 9.44 | 7.94 | 3.36 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(c) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | - | ||||||||||||||
Net asset value, end of year | $21.95 | $20.32 | $35.82 | $26.38 | $18.44 | |||||||||||||||
Total Return(d): | 8.02 | % | (43.22 | )% | 35.84 | % | 43.00 | % | 22.28 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $22,579 | $22,981 | $40,128 | $16,411 | $5,302 | |||||||||||||||
Average net assets (000) | $24,838 | $30,780 | $28,884 | $9,894 | $4,683 | |||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.90 | % | 1.90 | % | 1.90 | % | 1.90 | % | 1.91 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.99 | % | 2.01 | % | 1.97 | % | 2.15 | % | 2.33 | % | ||||||||||
Net investment income (loss) | (0.79 | )% | (1.14 | )% | (1.52 | )% | (1.32 | )% | (0.80 | )% | ||||||||||
Portfolio turnover rate(f) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | Amount rounds to zero. |
(d) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
24 |
Class R Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $21.75 | $38.17 | $27.98 | $19.48 | $15.86 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.09 | )(b) | (0.19 | ) | (0.37 | ) | (0.20 | ) | (0.06 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.94 | (16.20 | ) | 10.56 | 8.70 | 3.68 | ||||||||||||||
Total from investment operations | 1.85 | (16.39 | ) | 10.19 | 8.50 | 3.62 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Tax return of capital distributions | - | (- | )(c) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | - | ||||||||||||||
Net asset value, end of year | $23.60 | $21.75 | $38.17 | $27.98 | $19.48 | |||||||||||||||
Total Return(d): | 8.51 | % | (42.97) | % | 36.42 | % | 43.56 | % | 22.89 | % | ||||||||||
Ratios/Supplemental Data: |
| |||||||||||||||||||
Net assets, end of year (000) | $218,828 | $230,246 | $358,284 | $291,162 | $280,311 | |||||||||||||||
Average net assets (000) | $237,233 | $269,777 | $340,986 | $281,238 | $278,086 | |||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.46 | % | 1.47 | % | 1.47 | % | 1.47 | % | 1.47 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.71 | % | 1.72 | % | 1.72 | % | 1.77 | % | 1.81 | % | ||||||||||
Net investment income (loss) | (0.35 | )% | (0.70 | )% | (1.08 | )% | (0.87 | )% | (0.36 | )% | ||||||||||
Portfolio turnover rate(f) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(c) | Amount rounds to zero. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 25 |
Financial Highlights (continued)
Class Z Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $22.45 | $39.17 | $28.56 | $19.77 | $16.01 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.06 | (0.04 | ) | (0.18 | ) | (0.10 | ) | 0.03 | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.99 | (16.65 | ) | 10.79 | 8.89 | 3.74 | ||||||||||||||
Total from investment operations | 2.05 | (16.69 | ) | 10.61 | 8.79 | 3.77 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | - | - | - | (0.01 | ) | ||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | (0.01 | ) | |||||||||||||
Net asset value, end of year | $24.50 | $22.45 | $39.17 | $28.56 | $19.77 | |||||||||||||||
Total Return(c): | 9.13 | % | (42.63 | )% | 37.15 | % | 44.46 | % | 23.56 | % | ||||||||||
Ratios/Supplemental Data: |
| |||||||||||||||||||
Net assets, end of year (000) | $2,332,761 | $1,948,250 | $3,481,110 | $1,364,899 | $208,629 | |||||||||||||||
Average net assets (000) | $2,382,104 | $2,744,398 | $2,452,905 | $639,223 | $139,982 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.95 | % | 0.96 | % | 0.94 | % | 0.99 | % | 1.04 | % | ||||||||||
Net investment income (loss) | 0.21 | % | (0.14) | % | (0.51) | % | (0.38) | % | 0.15 | % | ||||||||||
Portfolio turnover rate(e) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
26 |
Class R2 Shares |
| |||||||||||||||||||||||
Year Ended October 31, | December 27, 2018(a) through October 31, 2019 | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | |||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $22.09 | $38.72 | $28.35 | $19.70 | $15.10 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.06 | )(c) | (0.15 | ) | (0.33 | ) | (0.29 | ) | (0.12 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.97 | (16.45 | ) | 10.70 | 8.94 | 4.72 | ||||||||||||||||||
Total from investment operations | 1.91 | (16.60 | ) | 10.37 | 8.65 | 4.60 | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Tax return of capital distributions | - | (- | )(d) | - | - | - | ||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | - | ||||||||||||||||||
Net asset value, end of period | $24.00 | $22.09 | $38.72 | $28.35 | $19.70 | |||||||||||||||||||
Total Return(e): | 8.65 | % | (42.90 | )% | 36.58 | % | 43.91 | % | 30.46 | % | ||||||||||||||
Ratios/Supplemental Data: |
| |||||||||||||||||||||||
Net assets, end of period (000) | $11,710 | $10,579 | $13,101 | $4,664 | $233 | |||||||||||||||||||
Average net assets (000) | $11,833 | $11,553 | $8,789 | $1,557 | $44 | |||||||||||||||||||
Ratios to average net assets(f): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.34 | % | 1.34 | % | 1.33 | % | 1.32 | % | 1.26 | %(g) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.38 | % | 1.41 | % | 1.41 | % | 2.23 | % | 64.97 | %(g) | ||||||||||||||
Net investment income (loss) | (0.23 | )% | (0.55 | )% | (0.92 | )% | (1.06 | )% | (0.76 | )%(g) | ||||||||||||||
Portfolio turnover rate(h) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses. |
(d) | Amount rounds to zero. |
(e) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized. |
(f) | Does not include expenses of the underlying funds in which the Fund invests. |
(g) | Annualized. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 27 |
Financial Highlights (continued)
Class R4 Shares |
| |||||||||||||||||||||||
Year Ended October 31, | December 27, 2018(a) through October 31, 2019 | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | |||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $22.31 | $39.01 | $28.49 | $19.75 | $15.10 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | - | (c) | (0.09 | ) | (0.25 | ) | (0.11 | ) | (0.02 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.99 | (16.58 | ) | 10.77 | 8.85 | 4.67 | ||||||||||||||||||
Total from investment operations | 1.99 | (16.67) | 10.52 | 8.74 | 4.65 | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Tax return of capital distributions | - | (- | )(c) | - | - | - | ||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||||||
Total dividends and distributions | - | (0.03 | ) | - | - | - | ||||||||||||||||||
Net asset value, end of period | $24.30 | $22.31 | $39.01 | $28.49 | $19.75 | |||||||||||||||||||
Total Return(d): | 8.92 | % | (42.76) | % | 36.97 | % | 44.20 | % | 30.79 | % | ||||||||||||||
Ratios/Supplemental Data: |
| |||||||||||||||||||||||
Net assets, end of period (000) | $9,811 | $8,646 | $16,892 | $1,359 | $846 | |||||||||||||||||||
Average net assets (000) | $9,832 | $11,164 | $11,907 | $1,023 | $293 | |||||||||||||||||||
Ratios to average net assets(e): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.09 | % | 1.09 | % | 1.08 | % | 1.04 | % | 0.95 | %(f) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.15 | % | 1.16 | % | 1.14 | % | 2.47 | % | 10.65 | %(f) | ||||||||||||||
Net investment income (loss) | 0.02 | % | (0.33 | )% | (0.69 | )% | (0.46 | )% | (0.11 | )%(f) | ||||||||||||||
Portfolio turnover rate(g) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Amount rounds to zero. |
(d) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized. |
(e) | Does not include expenses of the underlying funds in which the Fund invests. |
(f) | Annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
28 |
Class R6 Shares |
| |||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $22.50 | $39.24 | $28.59 | $19.78 | $16.02 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.07 | (0.02 | ) | (0.16 | ) | (0.08 | ) | 0.04 | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 2.00 | (16.69 | ) | 10.81 | 8.89 | 3.74 | ||||||||||||||
Total from investment operations | 2.07 | (16.71 | ) | 10.65 | 8.81 | 3.78 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | - | - | - | (0.02 | ) | ||||||||||||||
Tax return of capital distributions | - | (- | )(b) | - | - | - | ||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | - | - | - | ||||||||||||||
Total dividends and distributions | - | �� | (0.03 | ) | - | - | (0.02 | ) | ||||||||||||
Net asset value, end of year | $24.57 | $22.50 | $39.24 | $28.59 | $19.78 | |||||||||||||||
Total Return(c): | 9.20 | % | (42.61 | )% | 37.25 | % | 44.54 | % | 23.72 | % | ||||||||||
Ratios/Supplemental Data: |
| |||||||||||||||||||
Net assets, end of year (000) | $1,426,218 | $1,330,422 | $2,136,686 | $673,736 | $101,975 | |||||||||||||||
Average net assets (000) | $1,495,043 | $1,686,565 | $1,445,464 | $295,968 | $54,900 | |||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.84 | % | 0.84 | % | 0.84 | % | 0.91 | % | 0.98 | % | ||||||||||
Net investment income (loss) | 0.27 | % | (0.07) | % | (0.46) | % | (0.32) | % | 0.20 | % | ||||||||||
Portfolio turnover rate(e) | 59 | % | 76 | % | 41 | % | 43 | % | 53 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Amount rounds to zero. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 29 |
Notes to Financial Statements
1. Organization
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Jennison International Opportunities Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is to seek long-term growth of capital.
2. Accounting Policies
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the
30 |
Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any
PGIM Jennison International Opportunities Fund | 31 |
Notes to Financial Statements (continued)
comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such
32 |
mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
PGIM Jennison International Opportunities Fund | 33 |
Notes to Financial Statements (continued)
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |
Net Investment Income | Annually | |
Short-Term Capital Gains | Annually | |
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
3. Agreements
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “subadviser”). The Manager pays for the services of Jennison.
34 |
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |||
0.825% on average daily net assets up to and including $1 billion; | 0.806% | |||
0.80% on average daily net assets from $1 billion to | ||||
$5 billion; 0.78% on average daily net assets exceeding $5 billion. |
The Manager has contractually agreed, through February 28, 2025, to limit certain operating expenses and/or to limit total annual operating expenses after fee waivers and/or expense reimbursements. The contractual waivers exclude interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Fund Expense Limitation* | Class Expense Limitation | ||
A | 0.84% | 1.09% | ||
C | 0.84 | 1.90** | ||
R | 0.84 | 1.48** | ||
Z | 0.84 | 0.90** | ||
R2 | 0.84 | 1.34*** | ||
R4 | 0.84 | 1.09*** | ||
R6 | 0.84 | 0.84** |
*Expense limitation excludes distribution and service (12b-1) fees, shareholder service fee, and transfer agency expenses (including sub-transfer agency and networking fees).
**Expense waiver/reimbursement limited to 0.06% on an annualized basis.
***Expense limitation applicable only to blue sky fees, shareholder service fee, and transfer agency expenses (including sub-transfer agency and networking fees).
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class R, Class Z, Class R2, Class R4 and Class R6 shares of the Fund. The Fund
PGIM Jennison International Opportunities Fund | 35 |
Notes to Financial Statements (continued)
compensates PIMS for distributing and servicing the Fund’s Class A, Class C, Class R and Class R2 shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through February 28, 2025 to limit such fees on certain classes based on the average daily net assets. The distribution fees are accrued daily and payable monthly.
The Fund has adopted a Shareholder Services Plan with respect to Class R2 and Class R4 shares. Under the terms of the Shareholder Services Plan, Class R2 and Class R4 shares are authorized to compensate Prudential Mutual Fund Services LLC (“PMFS”), its affiliates or third-party service providers for services rendered to the shareholders of such Class R2 or Class R4 shares. The shareholder service fee is accrued daily and paid monthly, as applicable.
The Fund’s annual gross and net distribution rates and maximum shareholder service fee, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | Shareholder Service Fee | ||||||||||||
A | 0.30 | % | 0.25 | % | N/A | % | |||||||||
C | 1.00 | 1.00 | N/A | ||||||||||||
R | 0.75 | 0.50 | N/A | ||||||||||||
Z | N/A | N/A | N/A | ||||||||||||
R2 | 0.25 | 0.25 | 0.10 | ||||||||||||
R4 | N/A | N/A | 0.10 | ||||||||||||
R6 | N/A | N/A | N/A |
For the year ended October 31, 2023, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:
Class | FESL | CDSC | ||||||
A | $150,035 | $ 726 | ||||||
C | — | 4,472 |
PGIM Investments, PIMS, PMFS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
36 |
4. Other Transactions with Affiliates
PMFS serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s and shareholder servicing agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act that, subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
5. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |
$2,699,139,906 | $2,432,725,908 |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2023, is presented as follows:
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | |||||||||||
Short-Term Investments - Affiliated Mutual Funds: | ||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) | ||||||||||||||||||
$ — | $1,317,199,716 | $1,194,543,442 | $ — | $ — | $122,656,274 | 122,656,274 | $3,869,840 |
PGIM Jennison International Opportunities Fund | 37 |
Notes to Financial Statements (continued)
Value, Beginning of Year | Cost of Purchases | Proceeds from Sales | Change in (Loss) | Realized Gain (Loss) | Value, End of Year | Shares, End of Year | Income | ||||||||||||||||||||||||||||
PGIM Institutional Money Market Fund(1)(b)(wb) |
| ||||||||||||||||||||||||||||||||||
$150,020,337 | $1,601,544,973 | $1,541,081,270 | $8,999 | $97,662 | $210,590,701 | 210,696,049 | $1,192,842 | (2) | |||||||||||||||||||||||||||
$150,020,337 | $2,918,744,689 | $2,735,624,712 | $8,999 | $97,662 | $333,246,975 | $5,062,682 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.
For the year ended October 31, 2023, there were no distributions paid by the Fund.
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$— | $5,535,994 | $69,355 | $5,605,349 |
For the year ended October 31, 2023, the Fund had the following amounts of accumulated undistributed earnings on a tax basis:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |
$4,519,099 | $— |
The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||
$3,804,775,118 | $803,070,389 | $(301,585,057) | $501,485,332 |
The difference between GAAP basis and tax basis were primarily attributable to deferred losses on wash sales and corporate spin-off adjustments.
38 |
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |
$1,362,377,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. Capital and Ownership
The Fund offers Class A, Class C, Class R, Class Z, Class R2, Class R4 and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class R, Class Z, Class R2, Class R4 and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
PGIM Jennison International Opportunities Fund | 39 |
Notes to Financial Statements (continued)
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 3,550,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | ||||
A | 150,000,000 | ||||
C | 100,000,000 | ||||
R | 100,000,000 | ||||
Z | 2,000,000,000 | ||||
R2 | 100,000,000 | ||||
R4 | 100,000,000 | ||||
R6 | 1,000,000,000 |
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||||||||
Z | 28,259 | 0.1 | % | |||||||
R2 | 663 | 0.1 | ||||||||
R4 | 663 | 0.2 |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||||||||
Affiliated | — | — | % | |||||||
Unaffiliated | 6 | 78.1 |
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 928,798 | $ | 23,616,317 | |||||
Shares purchased | (1,447,891 | ) | (36,155,179 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (519,093 | ) | (12,538,862 | ) | ||||
Shares issued upon conversion from other share class(es) | 287,546 | 7,259,438 | ||||||
Shares purchased upon conversion into other share class(es) | (269,268 | ) | (6,876,548 | ) | ||||
Net increase (decrease) in shares outstanding | (500,815 | ) | $ | (12,155,972 | ) |
40 |
Share Class | Shares | Amount | ||||||
Year ended October 31, 2022: | ||||||||
Shares sold | 1,863,405 | $ | 55,373,880 | |||||
Shares issued in reinvestment of dividends and distributions | 5,200 | 182,714 | ||||||
Shares purchased | (2,566,608 | ) | (69,034,328 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (698,003 | ) | (13,477,734 | ) | ||||
Shares issued upon conversion from other share class(es) | 297,066 | 8,736,406 | ||||||
Shares purchased upon conversion into other share class(es) | (240,270 | ) | (7,536,465 | ) | ||||
Net increase (decrease) in shares outstanding | (641,207 | ) | $ | (12,277,793 | ) | |||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 187,589 | $ | 4,440,068 | |||||
Shares purchased | (243,289 | ) | (5,598,141 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (55,700 | ) | (1,158,073 | ) | ||||
Shares purchased upon conversion into other share class(es) | (46,809 | ) | (1,093,354 | ) | ||||
Net increase (decrease) in shares outstanding | (102,509 | ) | $ | (2,251,427 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 439,161 | $ | 12,611,578 | |||||
Shares issued in reinvestment of dividends and distributions | 1,181 | 38,543 | ||||||
Shares purchased | (381,085 | ) | (9,470,187 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 59,257 | 3,179,934 | ||||||
Shares purchased upon conversion into other share class(es) | (48,581 | ) | (1,296,415 | ) | ||||
Net increase (decrease) in shares outstanding | 10,676 | $ | 1,883,519 | |||||
Class R | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 770,737 | $ | 18,505,836 | |||||
Shares purchased | (2,085,417 | ) | (51,603,399 | ) | ||||
Net increase (decrease) in shares outstanding | (1,314,680 | ) | $ | (33,097,563 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 2,646,941 | $ | 70,002,360 | |||||
Shares issued in reinvestment of dividends and distributions | 8,622 | 300,115 | ||||||
Shares purchased | (1,455,193 | ) | (39,061,923 | ) | ||||
Net increase (decrease) in shares outstanding | 1,200,370 | $ | 31,240,552 | |||||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 47,423,534 | $ | 1,228,116,493 | |||||
Shares purchased | (38,873,083 | ) | (985,909,752 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 8,550,451 | 242,206,741 | ||||||
Shares issued upon conversion from other share class(es) | 366,669 | 9,499,673 | ||||||
Shares purchased upon conversion into other share class(es) | (481,122 | ) | (12,457,578 | ) | ||||
Net increase (decrease) in shares outstanding | 8,435,998 | $ | 239,248,836 |
PGIM Jennison International Opportunities Fund | 41 |
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||||
Year ended October 31, 2022: | ||||||||||
Shares sold | 76,944,814 | $ | 2,301,749,213 | |||||||
Shares issued in reinvestment of dividends and distributions | 88,911 | 3,178,566 | ||||||||
Shares purchased | (78,931,653 | ) | (2,134,832,204 | ) | ||||||
Net increase (decrease) in shares outstanding before conversion | (1,897,928 | ) | 170,095,575 | |||||||
Shares issued upon conversion from other share class(es) | 233,999 | 7,032,081 | ||||||||
Shares purchased upon conversion into other share class(es) | (411,416 | ) | (12,499,417 | ) | ||||||
Net increase (decrease) in shares outstanding | (2,075,345 | ) | $ | 164,628,239 | ||||||
Class R2 | ||||||||||
Year ended October 31, 2023: | ||||||||||
Shares sold | 120,287 | $ | 3,018,622 | |||||||
Shares purchased | (111,283 | ) | (2,820,567 | ) | ||||||
Net increase (decrease) in shares outstanding | 9,004 | $ | 198,055 | |||||||
Year ended October 31, 2022: | ||||||||||
Shares sold | 205,770 | $ | 5,870,696 | |||||||
Shares issued in reinvestment of dividends and distributions | 339 | 11,964 | ||||||||
Shares purchased | (65,558 | ) | (1,795,651 | ) | ||||||
Net increase (decrease) in shares outstanding | 140,551 | $ | 4,087,009 | |||||||
Class R4 | ||||||||||
Year ended October 31, 2023: | ||||||||||
Shares sold | 101,724 | $ | 2,654,605 | |||||||
Shares purchased | (85,547 | ) | (2,110,945 | ) | ||||||
Net increase (decrease) in shares outstanding | 16,177 | $ | 543,660 | |||||||
Year ended October 31, 2022: | ||||||||||
Shares sold | 180,706 | $ | 5,177,531 | |||||||
Shares issued in reinvestment of dividends and distributions | 365 | 13,002 | ||||||||
Shares purchased | (226,586 | ) | (6,776,093 | ) | ||||||
Net increase (decrease) in shares outstanding | (45,515 | ) | $ | (1,585,560 | ) | |||||
Class R6 | ||||||||||
Year ended October 31, 2023: | ||||||||||
Shares sold | 17,208,208 | $ | 449,927,388 | |||||||
Shares purchased | (18,426,569 | ) | (474,383,609 | ) | ||||||
Net increase (decrease) in shares outstanding before conversion | (1,218,361 | ) | (24,456,221 | ) | ||||||
Shares issued upon conversion from other share class(es) | 228,434 | 5,979,034 | ||||||||
Shares purchased upon conversion into other share class(es) | (90,206 | ) | (2,310,665 | ) | ||||||
Net increase (decrease) in shares outstanding | (1,080,133 | ) | $ | (20,787,852 | ) |
42 |
Share Class | Shares | Amount | ||||||
Year ended October 31, 2022: | ||||||||
Shares sold | 26,706,420 | $786,672,964 | ||||||
Shares issued in reinvestment of dividends and distributions | 52,243 | 1,871,334 | ||||||
Shares purchased | (22,246,205 | ) | (598,716,919 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 4,512,458 | 189,827,379 | ||||||
Shares issued upon conversion from other share class(es) | 212,509 | 6,952,926 | ||||||
Shares purchased upon conversion into other share class(es) | (46,935 | ) | (1,389,116 | ) | ||||
Net increase (decrease) in shares outstanding | 4,678,032 | $195,391,189 |
8. Borrowings
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||
Term of Commitment | 9/29/2023 – 9/26/2024 | 9/30/2022 – 9/28/2023 | ||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund utilized the SCA during the year ended October 31, 2023. The average daily balance for the 1 day that the Fund had loans outstanding during the period was approximately $8,047,000, borrowed at a weighted average interest rate of 6.40%. The maximum loan outstanding amount during the period was $8,047,000. At October 31, 2023, the Fund did not have an outstanding loan amount.
PGIM Jennison International Opportunities Fund | 43 |
Notes to Financial Statements (continued)
9. Risks of Investing in the Fund
The Fund���s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Country Risk: Changes in the business environment may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes or stability factors such as mass riots, civil war and other potential events may contribute to companies’ operational risks.
Currency Risk: The Fund’s net asset value could decline as a result of changes in exchange rates, which could adversely affect the Fund’s investments in currencies, or in securities that trade in, and receive revenues related to, currencies, or in derivatives that provide exposure to currencies. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation, may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset
44 |
classes. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Growth Style Risk: The Fund’s growth style may subject the Fund to above-average fluctuations as a result of seeking higher than average capital growth. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during periods of economic recovery. Since the Fund follows a growth investment style, there is the risk that the growth investment style may be out of favor for long periods of time. At times when the style is out of favor, the Fund may underperform the market in general, its benchmark and other mutual funds.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
PGIM Jennison International Opportunities Fund | 45 |
Notes to Financial Statements (continued)
Investments in China Risk: Investments in China subject the Fund to risks specific to China and may make it more volatile than other funds. Over the last few decades, the Chinese government has undertaken reform of economic and market practices and has expanded the sphere of private ownership of property in China. However, Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation.
China has experienced security concerns, such as terrorism and strained international relations. Incidents involving China’s or the region’s security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and the Fund’s investments. Export growth continues to be a major driver of China’s rapid economic growth. Reduction in spending on Chinese products and services, institution of additional tariffs or other trade barriers, including as a result of heightened trade tensions between China and the U.S., or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy or the Fund. For example, a series of executive orders issued between November 2020 and June 2021 prohibit the Fund from investing in certain companies identified by the U.S. government as “Chinese Military Industrial Complex Companies.” The restrictions in these executive orders may force the subadviser to sell certain positions and may restrict the Fund from future investments the subadviser deems otherwise attractive.
Chinese companies, including Chinese companies that are listed on U.S. exchanges, are not subject to the same degree of regulatory requirements, accounting standards or auditor oversight as companies in more developed countries, and as a result, information about the Chinese securities in which the Fund invests may be less reliable or complete. There may be significant obstacles to obtaining information necessary for investigations into or litigation against Chinese companies and shareholders may have limited legal remedies.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its
46 |
investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Capitalization Risk: The Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and mid-cap companies are less stable than the prices of large-cap stocks and may present greater risks. Large capitalization companies as a group could fall out of favor with the market, causing the Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain
PGIM Jennison International Opportunities Fund | 47 |
Notes to Financial Statements (continued)
securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
10. Recent Regulatory Developments
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
48 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Jennison International Opportunities Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison International Opportunities Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 16, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Jennison International Opportunities Fund | 49 |
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Jennison International Opportunities Fund |
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
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Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison International Opportunities Fund |
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer (“PEO”) (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Jennison International Opportunities Fund |
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Jennison International Opportunities Fund |
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) Excludes Mr.Parker and Mr.Benjamin, interested Board Members who also serve as President and Vice President, respectively.
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Jennison International Opportunities Fund |
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (continued)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Jennison International Opportunities Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with Jennison Associates LLC (“Jennison”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and Jennison. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a
1PGIM Jennison International Opportunities Fund is a series of Prudential World Fund, Inc.
PGIM Jennison International Opportunities Fund |
Approval of Advisory Agreements (continued)
management agreement, and between PGIM Investments and Jennison, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and Jennison. The Board noted that Jennison is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by Jennison, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and Jennison, and also considered the qualifications, backgrounds and responsibilities of Jennison’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and Jennison’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PGIM Investments and Jennison.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by Jennison, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and Jennison under the management and subadvisory agreements.
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Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of reducing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds, and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale may be shared with the Fund in several ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments and Jennison
The Board considered potential ancillary benefits that might be received by PGIM Investments, Jennison and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by Jennison included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits
PGIM Jennison International Opportunities Fund |
Approval of Advisory Agreements (continued)
derived by PGIM Investments and Jennison were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three- and five-year periods ended December 31, 2022.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
4th Quartile |
1st Quartile |
1st Quartile |
1st Quartile | |||||
Actual Management Fees: 2nd Quartile | ||||||||
Net Total Expenses: 2nd Quartile |
● | The Board noted that the Fund outperformed its benchmark index over the three-, five- and ten-year periods, and underperformed over the one-year period. |
Visit our website at pgim.com/investments |
● | The Board noted that, effective July 1, 2022, PGIM Investments contractually amended its management fee schedule to add an additional breakpoint at asset levels above $5 billion. The current contractual fee rate schedule is as follows: 0.825% up to $1 billion; 0.800% from $1 billion up to $5 billion; and 0.780% over $5 billion. |
● | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap that (exclusive of certain fees and expenses) caps net annual operating expenses at 0.84% for each class of the Fund’s shares, and that limits transfer agency, shareholder servicing, sub-transfer agency and blue sky fees, as applicable, to the extent that such fees cause the net annual operating expenses to exceed 1.34% of average daily net assets for Class R2 shares or 1.09% of average daily net assets for Class R4 shares through February 29, 2024. |
● | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap with respect to Class A shares, pursuant to which PGIM Investments agrees to limit total annual operating expenses for Class A shares to 1.09% through February 29, 2024. |
● | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense waiver, pursuant to which (exclusive of certain fees and expenses) PGIM Investments waives and/or reimburses up to 0.06% of certain other expenses, through February 29, 2024, to the extent that total annual operating expenses exceed 1.90% for Class C shares, 1.48% for Class R shares, 0.90% for Class Z shares, and 0.84% for Class R6 shares. |
● | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
● | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
● | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Jennison International Opportunities Fund |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street | (800) 225-1852 | pgim.com/investments |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Stuart S. Parker • Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Christian J. Kelly, Chief Financial Officer • Claudia DiGiacomo, Chief Legal Officer • Andrew Donohue, Chief Compliance Officer • Russ Shupak, Treasurer and Principal Accounting Officer • Kelly Florio, Anti-Money Laundering Compliance Officer • Andrew R. French, Secretary • Melissa Gonzalez, Assistant Secretary • Kelly A. Coyne, Assistant Secretary • Patrick E. McGuinness, Assistant Secretary • Debra Rubano, Assistant Secretary • George Hoyt, Assistant Secretary • Devan Goolsby, Assistant Secretary • Lana Lomuti, Assistant Treasurer • Elyse M. McLaughlin, Assistant Treasurer • Deborah Conway, Assistant Treasurer • Robert W. McCormack, Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
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TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 | ||
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An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY
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To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
|
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Jennison International Opportunities Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO HOLDINGS
|
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. |
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM JENNISON INTERNATIONAL OPPORTUNITIES FUND
SHARE CLASS | A | C | R | Z | R2 | R4 | R6 | |||||||
NASDAQ | PWJAX | PWJCX | PWJRX | PWJZX | PWJBX | PWJDX | PWJQX | |||||||
CUSIP | 743969677 | 743969669 | 743969487 | 743969651 | 743969412 | 743969396 | 743969586 |
MF215E
PGIM EMERGING MARKETS DEBT HARD CURRENCY FUND
ANNUAL REPORT
OCTOBER 31, 2023
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2023 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Dear Shareholder:
We hope you find the annual report for the PGIM Emerging Markets Debt Hard Currency Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2023.
Although central banks raised interest rates aggressively to tame surging inflation during the period, the global economy and financial markets demonstrated resilience. Employers continued hiring, consumers continued spending, home prices rose, and recession fears receded. |
Early in the period, stocks began a rally that eventually ended a bear market and continued to rise globally for much of 2023 as inflation cooled and the Federal Reserve (the Fed) slowed the pace of its rate hikes. However, stocks declined late in the period when the Fed signaled that rates may remain elevated longer than investors had expected. For the entire period, large-cap US stocks and equities in international markets posted gains, while small-cap US stocks declined.
Bond markets benefited during the period as the Fed moderated its rate-hiking cycle, and the higher level of interest rates offered investors an additional cushion from fixed income volatility. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted gains.
Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 14th-largest investment manager with more than $1.3 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Emerging Markets Debt Hard Currency Fund
December 15, 2023
PGIM Emerging Markets Debt Hard Currency Fund 3
Your Fund’s Performance (unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment 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. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.
Average Annual Total Returns as of 10/31/23 | ||||||
One Year (%) | Five Years (%) | Since Inception (%) | ||||
Class A | ||||||
(with sales charges) | 4.56 | -1.46 | -2.45 (12/12/2017) | |||
(without sales charges) | 8.07 | -0.81 | -1.90 (12/12/2017) | |||
Class C | ||||||
(with sales charges) | 6.26 | -1.55 | -2.63 (12/12/2017) | |||
(without sales charges) | 7.26 | -1.55 | -2.63 (12/12/2017) | |||
Class Z | ||||||
(without sales charges) | 8.57 | -0.50 | -1.60 (12/12/2017) | |||
Class R6 | ||||||
(without sales charges) | 8.50 | -0.43 | -1.54 (12/12/2017) | |||
JP Morgan Emerging Markets Bond Index Global Diversified Index | ||||||
8.36 | -0.19 | -0.92 |
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the Fund’s inception date.
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Growth of a $10,000 Investment (unaudited)
The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the JP Morgan Emerging Markets Bond Index Global Diversified Index by portraying the initial account values at the commencement of operations for Class Z shares (December 12, 2017) and the account values at the end of the current fiscal year (October 31, 2023) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing fees and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.
Past performance does not predict future performance. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
PGIM Emerging Markets Debt Hard Currency Fund 5
Your Fund’s Performance (continued)
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | Class R6 | |||||
Maximum initial sales charge | 3.25% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption) | 1.00% on sales of $500,000 or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.25% | 1.00% | None | None |
Benchmark Definition
JP Morgan Emerging Markets Bond Index Global Diversified Index—The JP Morgan Emerging Markets Bond Index Global Diversified Index is an unmanaged index that tracks total returns for USD-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, and Eurobonds. It limits the weights of those index countries with larger debt stocks by only including specified portions of these countries’ eligible current face amounts of debt outstanding.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.
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Credit Quality expressed as a percentage of total investments as of 10/31/23 (%) | ||
AAA | 1.8 | |
AA | 4.4 | |
A | 6.3 | |
BBB | 35.2 | |
BB | 25.2 | |
B | 16.2 | |
CCC | 4.9 | |
CC | 2.8 | |
C | 0.8 | |
D | 0.1 | |
Not Rated | 0.6 | |
Cash/Cash Equivalents | 1.7 | |
Total | 100.0 |
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch Ratings Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by an NRSRO. Credit ratings are subject to change.
Distributions and Yields as of 10/31/23 | ||||||||
Total Distributions Paid for One Year ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||||
Class A | 0.52 | 7.25 | 3.29 | |||||
Class C | 0.46 | 6.73 | -12.12 | |||||
Class Z | 0.54 | 7.81 | 7.78 | |||||
Class R6 | 0.54 | 7.92 | 7.63 |
*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.
PGIM Emerging Markets Debt Hard Currency Fund 7
Strategy and Performance Overview* (unaudited)
How did the Fund perform?
The PGIM Emerging Markets Debt Hard Currency Fund’s Class Z shares returned 8.57% in the 12-month reporting period that ended October 31, 2023, outperforming the 8.36% return of the JP Morgan Emerging Markets Bond Index Global Diversified Index (the Index).
What were the market conditions?
· | Emerging-markets debt posted positive returns during the reporting period, even as some headwinds emerged toward the end of the period. Reduced rate-hike expectations, declining interest rate volatility, and a softer US dollar provided for a constructive tone throughout much of the reporting period. However, slowing growth in China and Europe, a rise in US Treasury yields, and a resilient US dollar led to mixed performance over the final few months of the reporting period. |
· | While the constructive note of year-end 2022 carried into the beginning of 2023, uncertainty increased in February due to elevated inflation data and then exploded in March as Silicon Valley Bank and Signature Bank failed and Credit Suisse Group AG experienced distress. Concerns about financial instability then led to a negative confidence shock that pressured valuations and created further dispersion between higher-quality and lower-quality issuers. Local interest rates produced positive returns in the first quarter of 2023 amid an uptick in volatility, trading directionally with developed markets, and inflation data mixed across countries. Meanwhile, emerging-markets foreign exchanges (EMFX) registered gains, but those were concentrated in Latin America and Europe, with high yielding currencies outperforming. |
· | Emerging-markets debt saw positive gains in the second quarter of 2023 as momentum shifted in response to increased clarity concerning inflation, interest rates, and growth, as well as a resolution to the US debt ceiling. Local interest rates performed well during the quarter due to lower-than-expected inflation data in emerging markets and strong emerging-markets currencies against the US dollar. EMFX was also positive in the quarter. |
· | In the third quarter of 2023, emerging-markets debt had mixed performance, performing well in July with a rally in spreads, led by tightening in high yield, before widening in August amid slowing growth in China and Europe. Local interest rates posted modestly negative total returns, and yields rose. In response to bear steepening of the US yield curve, a majority of emerging-markets curves steepened. (Bear steepening occurs when interest rates on long-term bonds rise faster than rates on short-term bonds.) While overall EMFX performance was negative against the US dollar, Latin American currencies gained amid central bank rate cuts. |
· | Over the last month of the reporting period, returns across hard currency, local currency, and corporates were negative, while EMFX exhibited positive returns. The emerging-markets debt sovereign sector exhibited positive spread returns in October 2023, with investment-grade bonds lagging while high yield outperformed. Within local interest rates, Europe and Africa/Middle East outperformed in October, while |
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Asia and Latin America underperformed. Meanwhile, EMFX exhibited positive performance in October, as the expectation of peak rates in the US led to a stall in the US dollar rally and some reprieve across emerging-markets currencies. |
What worked?
· | Overall issue selection and currency selection contributed to the Fund’s performance during the reporting period. |
· | Sovereign debt positioning in Ukraine, Pakistan, China, Argentina, and Mexico also contributed to performance. |
· | While overall country selection detracted from performance, long-spread duration positioning in India, the Dominican Republic, Cote D’Ivoire, Serbia, and Indonesia contributed. (Duration measures the sensitivity of the price—the value of principal—of a bond to a change in interest rates.) |
· | Within currencies, overweight positioning relative to the Index in the Hungarian forint and Colombian peso, along with underweight positioning in the Korean won and Singapore dollar, contributed to performance. |
· | In out-of-Index local currency, positioning in South Africa contributed to performance. |
What didn’t work?
· | Short-spread duration in Turkey, Nigeria, and El Salvador, along with neutral positioning in Ukraine, detracted from the Fund’s performance during the reporting period. |
· | Sovereign positioning in Brazil, Sri Lanka, Ghana, and Chile also detracted from performance. |
· | While overall currency selection contributed to performance, an underweight relative to the Index to the Thai baht, along with overweights relative to the Index to the Israeli shekel and US dollar, detracted. |
· | In out-of-Index local currency, positioning in Korea detracted from performance. |
Did the Fund use derivatives?
· | Currency positioning in the Fund was partially facilitated by the use of currency forward and option contracts. During the reporting period, the Fund’s currency positioning added to relative performance. The Fund also used futures and interest rate swaps, in part, to help manage duration and yield curve exposure, which collectively had a negative impact on performance. (A yield curve is a line graph that illustrates the relationship between the yields and maturities of fixed income securities. It is created by plotting the yields of different maturities for the same type of bonds.) |
Current outlook
· | While the near-term context remains cloudy due to concerns over economic growth and volatility in US markets, PGIM Fixed Income believes hard-currency bonds |
PGIM Emerging Markets Debt Hard Currency Fund 9
Strategy and Performance Overview* (continued)
continue to offer attractive opportunities. Current yields offer a significant cushion against near-term spread volatility or an increase in US Treasury yields, and spreads remain at historically high levels in many rating buckets, as well as relative to other growth-sensitive bond sectors, such as US high yield. |
· | While PGIM Fixed Income doesn’t foresee a significant positive catalyst in the near term, it believes there are several medium-term tailwinds. Emerging-markets economies are set to materially outgrow developed market economies for the foreseeable future. |
· | PGIM Fixed Income expects technical factors to continue to support the emerging markets debt asset class as well. Outflows have been persistent, but PGIM Fixed Income believes that this will eventually turn to inflows. Investors’ positioning across their emerging-markets debt portfolios remains defensive, and crossover allocators from other sectors have generally left the market. Recent government issuance has been limited and targeted at segmented pockets of demand—sukuk, ESG-related, and euro-denominated—while liability management exercises (including debt buybacks) have emerged recently. (Sukuk refers to a sharia-compliant bond-like instrument used in Islamic finance.) |
· | PGIM Fixed Income believes emerging-markets countries can benefit from changing global dynamics and that the Fund’s hard-currency credit barbell—with a mix of government and corporate bonds—is well-suited for the current environment. At the longer end of the barbell, PGIM Fixed Income focuses on BBB-rated and BB-rated government, quasi-sovereign, and corporate bonds. At the front end of the barbell, B-rated and distressed exposure remains selective where PGIM Fixed Income expects greater dispersion going forward, which should present alpha opportunities from underweight allocations relative to the Index. (Alpha is a measure of an investment’s active return compared to a market or index.) |
· | PGIM Fixed Income expects emerging-markets local-currency bonds to trade sideways, with country-level factors supporting lower yields; and it remains cautious on emerging-markets currencies, maintaining short positioning versus long exposure in the US dollar. |
*This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to US generally accepted accounting principles.
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 held through the six-month period ended October 31, 2023. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information
PGIM Emerging Markets Debt Hard Currency Fund 11
Fees and Expenses (continued)
provided in the expense table. Additional fees have the effect of reducing investment returns.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
PGIM Emerging Markets Debt Hard Currency Fund | Beginning Account Value May 1, 2023 | Ending Account Value October 31, 2023 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||
Class A | Actual | $1,000.00 | $ 980.20 | 1.06% | $5.29 | |||||
Hypothetical | $1,000.00 | $1,019.86 | 1.06% | $5.40 | ||||||
Class C | Actual | $1,000.00 | $ 976.50 | 1.81% | $9.02 | |||||
Hypothetical | $1,000.00 | $1,016.08 | 1.81% | $9.20 | ||||||
Class Z | Actual | $1,000.00 | $ 983.20 | 0.76% | $3.80 | |||||
Hypothetical | $1,000.00 | $1,021.37 | 0.76% | $3.87 | ||||||
Class R6 | Actual | $1,000.00 | $ 982.20 | 0.66% | $3.30 | |||||
Hypothetical | $1,000.00 | $1,021.88 | 0.66% | $3.36 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2023, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2023 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||
LONG-TERM INVESTMENTS 94.9% | ||||||||||||||
CORPORATE BONDS 23.6% | ||||||||||||||
Azerbaijan 0.4% | ||||||||||||||
Southern Gas Corridor CJSC, | ||||||||||||||
Gov’t. Gtd. Notes | 6.875% | 03/24/26 | 400 | $ | 393,644 | |||||||||
State Oil Co. of the Azerbaijan Republic, | ||||||||||||||
Sr. Unsec’d. Notes | 6.950 | 03/18/30 | 400 | 387,000 | ||||||||||
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780,644 | ||||||||||||||
Bahrain 0.2% | ||||||||||||||
Oil & Gas Holding Co. BSCC (The), | ||||||||||||||
Sr. Unsec’d. Notes | 8.375 | 11/07/28 | 500 | 518,125 | ||||||||||
Brazil 0.6% | ||||||||||||||
Banco do Brasil SA, | ||||||||||||||
Sr. Unsec’d. Notes | 4.875 | 01/11/29 | 200 | 184,500 | ||||||||||
Braskem Netherlands Finance BV, | ||||||||||||||
Gtd. Notes, 144A | 8.500 | 01/12/31 | 240 | 224,688 | ||||||||||
Globo Comunicacao e Participacoes SA, | ||||||||||||||
Sr. Unsec’d. Notes | 4.875 | 01/22/30 | 200 | 159,000 | ||||||||||
JSM Global Sarl, | ||||||||||||||
Gtd. Notes, 144A | 4.750 | 10/20/30 | (d) | 400 | 60,000 | |||||||||
Nexa Resources SA, | ||||||||||||||
Gtd. Notes | 6.500 | 01/18/28 | 410 | 382,837 | ||||||||||
Petrobras Global Finance BV, | ||||||||||||||
Gtd. Notes | 5.375 | 10/01/29 | GBP | 100 | 106,063 | |||||||||
Suzano Austria GmbH, | ||||||||||||||
Gtd. Notes | 3.750 | 01/15/31 | 150 | 120,915 | ||||||||||
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1,238,003 | ||||||||||||||
Chile 1.0% | ||||||||||||||
Alfa Desarrollo SpA, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 4.550 | 09/27/51 | 199 | 128,990 | ||||||||||
Corp. Nacional del Cobre de Chile, | ||||||||||||||
Sr. Unsec’d. Notes | 3.000 | 09/30/29 | 200 | 165,692 | ||||||||||
Sr. Unsec’d. Notes | 4.250 | 07/17/42 | 360 | 250,560 | ||||||||||
Sr. Unsec’d. Notes | 4.875 | 11/04/44 | 600 | 441,600 | ||||||||||
Sr. Unsec’d. Notes, 144A | 4.875 | 11/04/44 | 200 | 147,200 | ||||||||||
Sr. Unsec’d. Notes, 144A | 5.125 | 02/02/33 | 200 | 176,056 | ||||||||||
Empresa Nacional del Petroleo, | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.450 | 09/16/31 | 200 | 154,798 | ||||||||||
Sr. Unsec’d. Notes, 144A | 6.150 | 05/10/33 | 200 | 185,420 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 13
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Chile (cont’d.) | ||||||||||||||||
Mercury Chile Holdco LLC, | ||||||||||||||||
Sr. Sec’d. Notes | 6.500% | 01/24/27 | 400 | $ | 359,000 | |||||||||||
VTR Finance NV, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.375 | 07/15/28 | 200 | 34,370 | ||||||||||||
|
| |||||||||||||||
2,043,686 | ||||||||||||||||
China 0.5% | ||||||||||||||||
Agile Group Holdings Ltd., | ||||||||||||||||
Sr. Sec’d. Notes | 6.050 | 10/13/25 | 200 | 14,250 | ||||||||||||
ENN Clean Energy International Investment Ltd., | ||||||||||||||||
Gtd. Notes, 144A | 3.375 | 05/12/26 | 200 | 183,000 | ||||||||||||
Prosus NV, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.193 | 01/19/32 | 550 | 423,087 | ||||||||||||
Sinopec Group Overseas Development 2012 Ltd., | ||||||||||||||||
Gtd. Notes | 4.875 | 05/17/42 | 200 | 170,990 | ||||||||||||
Sinopec Group Overseas Development 2018 Ltd., | ||||||||||||||||
Gtd. Notes, 144A | 3.680 | 08/08/49 | 200 | 134,310 | ||||||||||||
Sunac China Holdings Ltd., | ||||||||||||||||
Sr. Sec’d. Notes | 6.500 | 01/10/25(d) | 200 | 27,000 | ||||||||||||
|
| |||||||||||||||
952,637 | ||||||||||||||||
Colombia 0.8% | ||||||||||||||||
Colombia Telecomunicaciones SA ESP, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.950 | 07/17/30 | 200 | 131,900 | ||||||||||||
Ecopetrol SA, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.625 | 11/02/31 | 76 | 56,734 | ||||||||||||
Sr. Unsec’d. Notes | 6.875 | 04/29/30 | 233 | 208,873 | ||||||||||||
Sr. Unsec’d. Notes | 8.625 | 01/19/29 | 560 | 557,480 | ||||||||||||
Sr. Unsec’d. Notes | 8.875 | 01/13/33 | 476 | 455,056 | ||||||||||||
Grupo Aval Ltd., | ||||||||||||||||
Gtd. Notes, 144A | 4.375 | 02/04/30 | 200 | 147,500 | ||||||||||||
|
| |||||||||||||||
1,557,543 | ||||||||||||||||
Costa Rica 0.1% | ||||||||||||||||
Instituto Costarricense de Electricidad, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 10/07/31 | 200 | 185,000 |
See Notes to Financial Statements.
14
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Guatemala 0.3% | ||||||||||||||
Central American Bottling Corp./CBC Bottling | ||||||||||||||
Holdco SL/Beliv Holdco SL, | ||||||||||||||
Gtd. Notes | 5.250% | 04/27/29 | 167 | $ | 146,688 | |||||||||
CT Trust, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 5.125 | 02/03/32 | 200 | 153,000 | ||||||||||
Energuate Trust, | ||||||||||||||
Gtd. Notes | 5.875 | 05/03/27 | 400 | 357,656 | ||||||||||
|
| |||||||||||||
657,344 | ||||||||||||||
Hungary 0.2% | ||||||||||||||
MFB Magyar Fejlesztesi Bank Zrt, | ||||||||||||||
Gov’t. Gtd. Notes | 6.500 | 06/29/28 | 215 | 210,941 | ||||||||||
MVM Energetika Zrt, | ||||||||||||||
Sr. Unsec’d. Notes | 7.500 | 06/09/28 | 208 | 207,480 | ||||||||||
|
| |||||||||||||
418,421 | ||||||||||||||
India 1.7% | ||||||||||||||
Adani Ports & Special Economic Zone Ltd., | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.000 | 08/02/41 | 200 | 121,132 | ||||||||||
Azure Power Solar Energy Pvt. Ltd., | ||||||||||||||
Sr. Sec’d. Notes, 144A, MTN | 5.650 | 12/24/24 | 200 | 183,816 | ||||||||||
CA Magnum Holdings, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 5.375 | 10/31/26 | 400 | 348,344 | ||||||||||
GMR Hyderabad International Airport Ltd., | ||||||||||||||
Sr. Sec’d. Notes | 4.250 | 10/27/27 | 400 | 350,772 | ||||||||||
HPCL-Mittal Energy Ltd., | ||||||||||||||
Sr. Unsec’d. Notes | 5.250 | 04/28/27 | 400 | 372,364 | ||||||||||
NTPC Ltd., | ||||||||||||||
Sr. Unsec’d. Notes, EMTN | 2.750 | 02/01/27 | EUR | 100 | 98,430 | |||||||||
Periama Holdings LLC, | ||||||||||||||
Gtd. Notes | 5.950 | 04/19/26 | 400 | 375,500 | ||||||||||
Power Finance Corp. Ltd., | ||||||||||||||
Sr. Unsec’d. Notes | 4.500 | 06/18/29 | 810 | 733,244 | ||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.150 | 12/06/28 | 200 | 198,412 | ||||||||||
Reliance Industries Ltd., | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.625 | 01/12/52 | 250 | 152,203 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 15
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
India (cont’d.) | ||||||||||||||
Summit Digitel Infrastructure Ltd., | ||||||||||||||
Sr. Sec’d. Notes, 144A | 2.875% | 08/12/31 | 435 | $ | 324,049 | |||||||||
TML Holdings Pte Ltd., | ||||||||||||||
Sr. Unsec’d. Notes | 5.500 | 06/03/24 | 200 | 196,718 | ||||||||||
|
| |||||||||||||
3,454,984 | ||||||||||||||
Indonesia 2.4% | ||||||||||||||
Cikarang Listrindo Tbk PT, | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.950 | 09/14/26 | 200 | 189,206 | ||||||||||
Freeport Indonesia PT, | ||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 5.315 | 04/14/32 | 400 | 355,304 | ||||||||||
Indofood CBP Sukses Makmur Tbk PT, | ||||||||||||||
Sr. Unsec’d. Notes | 3.541 | 04/27/32 | 200 | 155,980 | ||||||||||
Indonesia Asahan Aluminium PT/Mineral Industri Indonesia Persero PT, | ||||||||||||||
Sr. Unsec’d. Notes | 5.450 | 05/15/30 | 920 | 850,273 | ||||||||||
Sr. Unsec’d. Notes, 144A | 4.750 | 05/15/25 | 200 | 195,300 | ||||||||||
Pertamina Geothermal Energy PT, | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.150 | 04/27/28 | 200 | 193,216 | ||||||||||
Pertamina Persero PT, | ||||||||||||||
Sr. Unsec’d. Notes | 6.000 | 05/03/42 | 200 | 176,206 | ||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.700 | 07/30/49 | 200 | 144,878 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 3.100 | 01/21/30 | 200 | 167,424 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 3.100 | 08/27/30 | 300 | 247,557 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 3.650 | 07/30/29 | 200 | 177,122 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 4.700 | 07/30/49 | 200 | 144,878 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 6.500 | 11/07/48 | 200 | 186,236 | ||||||||||
Perusahaan Perseroan Persero PT Perusahaan Listrik Negara, | ||||||||||||||
Sr. Unsec’d. Notes | 1.875 | 11/05/31 | EUR | 400 | 322,429 | |||||||||
Sr. Unsec’d. Notes | 2.875 | 10/25/25 | EUR | 200 | 203,517 | |||||||||
Sr. Unsec’d. Notes, 144A, MTN | 5.450 | 05/21/28 | 620 | 600,743 | ||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.150 | 05/21/48 | 400 | 339,000 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 6.150 | 05/21/48 | 200 | 169,500 | ||||||||||
|
| |||||||||||||
4,818,769 | ||||||||||||||
Israel 0.6% | ||||||||||||||
Bank Leumi Le-Israel BM, | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.125 | 07/27/27 | 203 | 188,790 | ||||||||||
Energian Israel Finance Ltd., | ||||||||||||||
Sr. Sec’d. Notes, 144A | 4.875 | 03/30/26 | 75 | 65,768 |
See Notes to Financial Statements.
16
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Israel (cont’d.) | ||||||||||||||||
Energian Israel Finance Ltd., (cont’d.) | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 5.375% | 03/30/28 | 385 | $ | 314,257 | |||||||||||
Sr. Sec’d. Notes, 144A | 5.875 | 03/30/31 | 215 | 170,656 | ||||||||||||
Leviathan Bond Ltd., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 6.125 | 06/30/25 | 200 | 183,750 | ||||||||||||
Sr. Sec’d. Notes, 144A | 6.750 | 06/30/30 | 300 | 246,300 | ||||||||||||
|
| |||||||||||||||
1,169,521 | ||||||||||||||||
Jamaica 0.1% | ||||||||||||||||
Digicel International Finance Ltd./Digicel International Holdings Ltd., | ||||||||||||||||
Gtd. Notes, 144A (original cost $29,599; purchased 10/23/20)(f) | 8.000 | 12/31/26 | (d) | 39 | 773 | |||||||||||
Gtd. Notes, 144A, Cash coupon 13.000% (original cost $41,277; purchased 10/19/23)(f) | 13.000 | 12/31/25 | (d) | 59 | 40,689 | |||||||||||
Sr. Sec’d. Notes, 144A (original cost $91,556; purchased 10/19/23)(f) | 8.750 | 05/25/24 | 97 | 88,724 | ||||||||||||
|
| |||||||||||||||
130,186 | ||||||||||||||||
Kazakhstan 0.9% | ||||||||||||||||
KazMunayGas National Co. JSC, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.500 | 04/14/33 | 200 | 145,500 | ||||||||||||
Sr. Unsec’d. Notes | 4.750 | 04/19/27 | 400 | 372,800 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 04/19/47 | 200 | 148,300 | ||||||||||||
Sr. Unsec’d. Notes | 6.375 | 10/24/48 | 600 | 469,500 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 5.375 | 04/24/30 | 800 | 713,200 | ||||||||||||
|
| |||||||||||||||
1,849,300 | ||||||||||||||||
Kuwait 0.2% | ||||||||||||||||
MEGlobal BV, | ||||||||||||||||
Gtd. Notes, EMTN | 2.625 | 04/28/28 | 300 | 255,831 | ||||||||||||
MEGlobal Canada ULC, | ||||||||||||||||
Gtd. Notes, 144A, MTN | 5.875 | 05/18/30 | 200 | 194,748 | ||||||||||||
|
| |||||||||||||||
450,579 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 17
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Macau 0.2% | ||||||||||||||||
MGM China Holdings Ltd., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750% | 02/01/27 | 330 | $ | 288,725 | |||||||||||
Sands China Ltd., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.650 | 08/08/28 | 250 | 230,563 | ||||||||||||
|
| |||||||||||||||
519,288 | ||||||||||||||||
Malaysia 1.0% | ||||||||||||||||
GENM Capital Labuan Ltd., | ||||||||||||||||
Gtd. Notes | 3.882 | 04/19/31 | 400 | 304,056 | ||||||||||||
Gohl Capital Ltd., | ||||||||||||||||
Gtd. Notes | 4.250 | 01/24/27 | 250 | 228,512 | ||||||||||||
Petronas Capital Ltd., | ||||||||||||||||
Gtd. Notes, 144A, MTN | 4.550 | 04/21/50 | 800 | 613,648 | ||||||||||||
Gtd. Notes, 144A, MTN | 4.800 | 04/21/60 | 200 | 155,318 | ||||||||||||
Gtd. Notes, EMTN | 2.480 | 01/28/32 | 400 | 310,484 | ||||||||||||
Gtd. Notes, EMTN | 4.550 | 04/21/50 | 500 | 383,530 | ||||||||||||
Gtd. Notes, EMTN | 4.800 | 04/21/60 | 200 | 155,318 | ||||||||||||
|
| |||||||||||||||
2,150,866 | ||||||||||||||||
Mexico 4.8% | ||||||||||||||||
Cemex SAB de CV, | ||||||||||||||||
Gtd. Notes | 5.450 | 11/19/29 | 400 | 370,250 | ||||||||||||
Comision Federal de Electricidad, | ||||||||||||||||
Gtd. Notes | 4.688 | 05/15/29 | 710 | 628,350 | ||||||||||||
Gtd. Notes, 144A | 4.688 | 05/15/29 | 200 | 177,000 | ||||||||||||
Fermaca Enterprises S de RL de CV, | ||||||||||||||||
Sr. Sec’d. Notes | 6.375 | 03/30/38 | 564 | 535,393 | ||||||||||||
Mexico City Airport Trust, | ||||||||||||||||
Sr. Sec’d. Notes | 3.875 | 04/30/28 | 200 | 176,536 | ||||||||||||
Sr. Sec’d. Notes | 4.250 | 10/31/26 | 200 | 185,272 | ||||||||||||
Sr. Sec’d. Notes | 5.500 | 07/31/47 | 2,430 | 1,728,969 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.500 | 10/31/46 | 400 | 282,696 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.500 | 07/31/47 | 400 | 284,604 | ||||||||||||
Petroleos Mexicanos, | ||||||||||||||||
Gtd. Notes | 5.350 | 02/12/28 | 882 | 708,555 | ||||||||||||
Gtd. Notes | 6.350 | 02/12/48 | (a) | 493 | 269,301 | |||||||||||
Gtd. Notes | 6.490 | 01/23/27 | 655 | 578,457 | ||||||||||||
Gtd. Notes | 6.500 | 03/13/27 | 653 | 573,540 | ||||||||||||
Gtd. Notes | 6.500 | 06/02/41 | 610 | 357,063 | ||||||||||||
Gtd. Notes | 6.700 | 02/16/32 | 1,141 | 832,930 | ||||||||||||
Gtd. Notes | 6.840 | 01/23/30 | 573 | 444,934 |
See Notes to Financial Statements.
18
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Mexico (cont’d.) | ||||||||||||||||
Petroleos Mexicanos, (cont’d.) | ||||||||||||||||
Gtd. Notes | 6.950% | 01/28/60 | 45 | $ | 25,481 | |||||||||||
Gtd. Notes | 7.690 | 01/23/50 | 661 | 408,167 | ||||||||||||
Gtd. Notes | 10.000 | 02/07/33 | 109 | 97,174 | ||||||||||||
Gtd. Notes, EMTN | 3.750 | 04/16/26 | EUR | 285 | 260,601 | |||||||||||
Gtd. Notes, MTN | 6.750 | 09/21/47 | 805 | 455,630 | ||||||||||||
Gtd. Notes, MTN | 6.875 | 08/04/26 | 95 | 87,234 | ||||||||||||
Gtd. Notes, MTN | 8.750 | 06/02/29 | 150 | 131,835 | ||||||||||||
Tierra Mojada Luxembourg II Sarl, | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 5.750 | 12/01/40 | 398 | 314,920 | ||||||||||||
|
| |||||||||||||||
9,914,892 | ||||||||||||||||
Panama 0.4% | ||||||||||||||||
Aeropuerto Internacional de Tocumen SA, | ||||||||||||||||
Sr. Sec’d. Notes | 4.000 | 08/11/41 | 200 | 142,736 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.125 | 08/11/61 | 400 | 267,112 | ||||||||||||
AES Panama Generation Holdings SRL, | ||||||||||||||||
Sr. Sec’d. Notes | 4.375 | 05/31/30 | 396 | 321,417 | ||||||||||||
|
| |||||||||||||||
731,265 | ||||||||||||||||
Peru 0.7% | ||||||||||||||||
Banco Internacional del Peru SAA Interbank, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.250 | 10/04/26 | 350 | 321,212 | ||||||||||||
Corp. Financiera de Desarrollo SA, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.400 | 09/28/27 | 200 | 170,096 | ||||||||||||
Fondo MIVIVIENDA SA, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.625 | 04/12/27 | 150 | 141,101 | ||||||||||||
InRetail Consumer, | ||||||||||||||||
Sr. Sec’d. Notes | 3.250 | 03/22/28 | 300 | 250,446 | ||||||||||||
Petroleos del Peru SA, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750 | 06/19/32 | 225 | 149,623 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 06/19/47 | 700 | 381,808 | ||||||||||||
|
| |||||||||||||||
1,414,286 | ||||||||||||||||
Philippines 0.1% | ||||||||||||||||
Globe Telecom, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.000 | 07/23/35 | 200 | 139,704 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 19
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Poland 0.3% | ||||||||||||||
Bank Gospodarstwa Krajowego, | ||||||||||||||
Gov’t. Gtd. Notes, 144A | 6.250% | 10/31/28 | 200 | $ | 202,183 | |||||||||
Gov’t. Gtd. Notes, 144A, MTN | 5.375 | 05/22/33 | 400 | 372,000 | ||||||||||
|
| |||||||||||||
574,183 | ||||||||||||||
Qatar 0.5% | ||||||||||||||
QatarEnergy, | ||||||||||||||
Sr. Unsec’d. Notes | 3.300 | 07/12/51 | 200 | 121,812 | ||||||||||
Sr. Unsec’d. Notes, 144A | 3.125 | 07/12/41 | 1,240 | 813,750 | ||||||||||
|
| |||||||||||||
935,562 | ||||||||||||||
Saudi Arabia 0.7% | ||||||||||||||
Arabian Centres Sukuk Ltd., | ||||||||||||||
Gtd. Notes | 5.375 | 11/26/24 | 200 | 190,812 | ||||||||||
EIG Pearl Holdings Sarl, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 3.545 | 08/31/36 | 450 | 349,875 | ||||||||||
Greensaif Pipelines Bidco Sarl, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 6.129 | 02/23/38 | 200 | 186,000 | ||||||||||
Saudi Arabian Oil Co., | ||||||||||||||
Sr. Unsec’d. Notes | 2.250 | 11/24/30 | 260 | 203,775 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 4.250 | 04/16/39 | 400 | 312,500 | ||||||||||
TMS Issuer Sarl, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 5.780 | 08/23/32 | 200 | 194,000 | ||||||||||
|
| |||||||||||||
1,436,962 | ||||||||||||||
South Africa 2.1% | ||||||||||||||
Eskom Holdings SOC Ltd., | ||||||||||||||
Gov’t. Gtd. Notes, MTN | 6.350 | 08/10/28 | 1,510 | 1,366,550 | ||||||||||
Sr. Unsec’d. Notes | 7.125 | 02/11/25 | 890 | 872,200 | ||||||||||
Sr. Unsec’d. Notes, MTN | 8.450 | 08/10/28 | 660 | 623,535 | ||||||||||
MTN Mauritius Investments Ltd., | ||||||||||||||
Gtd. Notes, 144A | 6.500 | 10/13/26 | 200 | 195,000 | ||||||||||
Sasol Financing USA LLC, | ||||||||||||||
Gtd. Notes | 6.500 | 09/27/28 | 300 | 263,550 | ||||||||||
Transnet SOC Ltd., | ||||||||||||||
Sr. Unsec’d. Notes | 8.250 | 02/06/28 | 200 | 189,000 | ||||||||||
Sr. Unsec’d. Notes, 144A | 8.250 | 02/06/28 | 845 | 798,525 | ||||||||||
|
| |||||||||||||
4,308,360 |
See Notes to Financial Statements.
20
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Thailand 0.2% | ||||||||||||||||
Thaioil Treasury Center Co. Ltd., | ||||||||||||||||
Gtd. Notes, 144A, MTN | 3.750% | 06/18/50 | (a) | 600 | $ | 344,850 | ||||||||||
Trinidad & Tobago 0.1% | ||||||||||||||||
Heritage Petroleum Co. Ltd., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 9.000 | 08/12/29 | 200 | 207,038 | ||||||||||||
Turkey 0.1% | ||||||||||||||||
Aydem Yenilenebilir Enerji A/S, | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 7.750 | 02/02/27 | 200 | 174,748 | ||||||||||||
Ukraine 0.1% | ||||||||||||||||
NAK Naftogaz Ukraine via Kondor Finance PLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.125 | 07/19/26 | (d) | EUR | 420 | 208,869 | ||||||||||
State Savings Bank of Ukraine Via SSB #1 PLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.625 | 03/20/25 | 30 | 27,583 | ||||||||||||
|
| |||||||||||||||
236,452 | ||||||||||||||||
United Arab Emirates 2.0% | ||||||||||||||||
Abu Dhabi Crude Oil Pipeline LLC, | ||||||||||||||||
Sr. Sec’d. Notes | 3.650 | 11/02/29 | 200 | 178,625 | ||||||||||||
Sr. Sec’d. Notes | 4.600 | 11/02/47 | 400 | 323,500 | ||||||||||||
Abu Dhabi National Energy Co. PJSC, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.000 | 10/03/49 | 200 | 144,000 | ||||||||||||
Abu Dhabi Ports Co. PJSC, | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 2.500 | 05/06/31 | 200 | 159,076 | ||||||||||||
DP World Crescent Ltd., | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 3.875 | 07/18/29 | 660 | 584,925 | ||||||||||||
DP World Ltd., | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.850 | 07/02/37 | 1,670 | 1,644,951 | ||||||||||||
Galaxy Pipeline Assets Bidco Ltd., | ||||||||||||||||
Sr. Sec’d. Notes | 2.160 | 03/31/34 | 187 | 150,669 | ||||||||||||
Sr. Sec’d. Notes, 144A | 2.940 | 09/30/40 | 933 | 687,710 | ||||||||||||
MDGH GMTN RSC Ltd., | ||||||||||||||||
Gtd. Notes, 144A, MTN | 5.084 | 05/22/53 | 200 | 165,750 | ||||||||||||
Gtd. Notes, EMTN | 3.700 | 11/07/49 | 240 | 159,300 | ||||||||||||
|
| |||||||||||||||
4,198,506 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 21
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Venezuela 0.1% | ||||||||||||||||
Petroleos de Venezuela SA, | ||||||||||||||||
Gtd. Notes | 5.375% | 04/12/27 | (d) | 205 | $ | 27,265 | ||||||||||
Gtd. Notes | 6.000 | 05/16/24 | (d) | 45 | 5,715 | |||||||||||
Gtd. Notes | 6.000 | 11/15/26 | (d) | 65 | 8,222 | |||||||||||
Sr. Sec’d. Notes | 8.500 | 10/27/20 | (d) | 205 | 172,200 | |||||||||||
|
| |||||||||||||||
213,402 | ||||||||||||||||
Vietnam 0.2% | ||||||||||||||||
Mong Duong Finance Holdings BV, | ||||||||||||||||
Sr. Sec’d. Notes | 5.125 | 05/07/29 | 500 | 450,260 | ||||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS | 48,175,366 | |||||||||||||||
|
| |||||||||||||||
SOVEREIGN BONDS 71.2% | ||||||||||||||||
Angola 2.1% | ||||||||||||||||
Angolan Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.250 | 05/09/28 | 2,180 | 1,850,275 | ||||||||||||
Sr. Unsec’d. Notes | 8.750 | 04/14/32 | 300 | 234,750 | ||||||||||||
Sr. Unsec’d. Notes | 9.375 | 05/08/48 | 400 | 285,000 | ||||||||||||
Sr. Unsec’d. Notes | 9.500 | 11/12/25 | 1,305 | 1,251,577 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 8.000 | 11/26/29 | 800 | 640,000 | ||||||||||||
|
| |||||||||||||||
4,261,602 | ||||||||||||||||
Argentina 1.0% | ||||||||||||||||
Argentine Republic Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 0.000 | 12/15/35 | 16,368 | 352,076 | ||||||||||||
Sr. Unsec’d. Notes | 0.000 | 12/15/35 | (d) | EUR | 15,000 | 606,609 | ||||||||||
Sr. Unsec’d. Notes | 0.750(cc) | 07/09/30 | 481 | 133,680 | ||||||||||||
Sr. Unsec’d. Notes | 1.000 | 07/09/29 | 544 | 145,546 | ||||||||||||
Sr. Unsec’d. Notes | 3.500(cc) | 07/09/41 | 567 | 147,645 | ||||||||||||
Sr. Unsec’d. Notes | 3.625(cc) | 07/09/35 | 1,772 | 435,875 | ||||||||||||
Sr. Unsec’d. Notes | 3.625(cc) | 07/09/46 | 335 | 83,080 | ||||||||||||
Sr. Unsec’d. Notes | 4.250(cc) | 01/09/38 | 527 | 158,587 | ||||||||||||
Provincia de Buenos Aires, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.375(cc) | 09/01/37 | 194 | 62,306 | ||||||||||||
|
| |||||||||||||||
2,125,404 |
See Notes to Financial Statements.
22
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Bahrain 1.6% | ||||||||||||||||
Bahrain Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.750% | 09/20/29 | 800 | $ | 771,000 | |||||||||||
Sr. Unsec’d. Notes | 7.000 | 10/12/28 | 950 | 944,063 | ||||||||||||
Sr. Unsec’d. Notes | 7.375 | 05/14/30 | 1,070 | 1,055,287 | ||||||||||||
Sr. Unsec’d. Notes | 7.500 | 09/20/47 | 400 | 334,000 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.250 | 01/25/51 | 200 | 143,250 | ||||||||||||
|
| |||||||||||||||
3,247,600 | ||||||||||||||||
Brazil 3.1% | ||||||||||||||||
Brazil Minas SPE via State of Minas Gerais, | ||||||||||||||||
Gov’t. Gtd. Notes | 5.333 | 02/15/28 | 143 | 138,179 | ||||||||||||
Brazilian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.875 | 06/12/30 | 1,285 | 1,102,800 | ||||||||||||
Sr. Unsec’d. Notes | 4.500 | 05/30/29 | 557 | 512,757 | ||||||||||||
Sr. Unsec’d. Notes | 5.000 | 01/27/45 | 1,304 | 933,012 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 01/07/41 | 845 | 686,563 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 02/21/47 | 300 | 229,950 | ||||||||||||
Sr. Unsec’d. Notes | 6.000 | 10/20/33 | 1,495 | 1,382,875 | ||||||||||||
Sr. Unsec’d. Notes | 7.125 | 01/20/37 | 585 | 574,763 | ||||||||||||
Sr. Unsec’d. Notes | 8.250 | 01/20/34 | 763 | 816,028 | ||||||||||||
|
| |||||||||||||||
6,376,927 | ||||||||||||||||
Cameroon 0.2% | ||||||||||||||||
Republic of Cameroon International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.500 | 11/19/25 | 400 | 383,752 | ||||||||||||
Chile 0.5% | ||||||||||||||||
Chile Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.550 | 07/27/33 | 370 | 276,575 | ||||||||||||
Sr. Unsec’d. Notes | 2.750 | 01/31/27 | 220 | 200,754 | ||||||||||||
Sr. Unsec’d. Notes | 3.100 | 01/22/61 | 200 | 106,900 | ||||||||||||
Sr. Unsec’d. Notes | 3.250 | 09/21/71 | 200 | 106,000 | ||||||||||||
Sr. Unsec’d. Notes | 4.000 | 01/31/52 | 235 | 161,563 | ||||||||||||
Sr. Unsec’d. Notes | 4.340 | 03/07/42 | 280 | 216,300 | ||||||||||||
|
| |||||||||||||||
1,068,092 | ||||||||||||||||
Colombia 3.2% | ||||||||||||||||
Colombia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.000 | 01/30/30 | 1,518 | 1,165,824 | ||||||||||||
Sr. Unsec’d. Notes | 3.875 | 04/25/27 | 870 | 790,830 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 23
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Colombia (cont’d.) | ||||||||||||||||
Colombia Government International Bond, (cont’d.) |
| |||||||||||||||
Sr. Unsec’d. Notes | 4.500% | 03/15/29 | 1,300 | $ | 1,127,100 | |||||||||||
Sr. Unsec’d. Notes | 5.000 | 06/15/45 | 400 | 254,000 | ||||||||||||
Sr. Unsec’d. Notes | 5.200 | 05/15/49 | 412 | 262,238 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 02/26/44 | 710 | 493,095 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 01/18/41 | 730 | 554,800 | ||||||||||||
Sr. Unsec’d. Notes | 7.500 | 02/02/34 | 840 | 783,300 | ||||||||||||
Sr. Unsec’d. Notes | 8.000 | 04/20/33 | 910 | 885,885 | ||||||||||||
Sr. Unsec’d. Notes | 10.375 | 01/28/33 | 200 | 224,000 | ||||||||||||
|
| |||||||||||||||
6,541,072 | ||||||||||||||||
Congo (Republic) 0.1% | ||||||||||||||||
Congolese International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.000 | 06/30/29 | 224 | 179,228 | ||||||||||||
Costa Rica 0.8% | ||||||||||||||||
Costa Rica Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 4.375 | 04/30/25 | 200 | 193,938 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 02/19/31 | 650 | 617,500 | ||||||||||||
Sr. Unsec’d. Notes | 7.000 | 04/04/44 | 400 | 366,200 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.550 | 04/03/34 | 465 | 441,982 | ||||||||||||
|
| |||||||||||||||
1,619,620 | ||||||||||||||||
Dominican Republic 3.9% | ||||||||||||||||
Dominican Republic International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 4.500 | 01/30/30 | 1,691 | 1,429,740 | ||||||||||||
Sr. Unsec’d. Notes | 4.875 | 09/23/32 | 190 | 153,615 | ||||||||||||
Sr. Unsec’d. Notes | 5.500 | 02/22/29 | 883 | 803,089 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 01/30/60 | 474 | 336,066 | ||||||||||||
Sr. Unsec’d. Notes | 5.950 | 01/25/27 | 705 | 677,442 | ||||||||||||
Sr. Unsec’d. Notes | 6.000 | 07/19/28 | 640 | 604,800 | ||||||||||||
Sr. Unsec’d. Notes | 6.400 | 06/05/49 | 1,020 | 797,640 | ||||||||||||
Sr. Unsec’d. Notes | 6.850 | 01/27/45 | (a) | 610 | 507,825 | |||||||||||
Sr. Unsec’d. Notes | 6.875 | 01/29/26 | 300 | 298,347 | ||||||||||||
Sr. Unsec’d. Notes | 7.450 | 04/30/44 | 1,120 | 1,006,880 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.300 | 01/21/41 | 150 | 108,900 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.500 | 02/22/29 | 1,010 | 918,595 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.875 | 01/30/60 | 225 | 159,525 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.000 | 07/19/28 | 170 | 160,650 | ||||||||||||
|
| |||||||||||||||
7,963,114 |
See Notes to Financial Statements.
24
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Ecuador 1.0% | ||||||||||||||||
Ecuador Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.000%(cc) | 07/31/30 | 667 | $ | 337,609 | |||||||||||
Sr. Unsec’d. Notes, 144A | 7.187(s) | 07/31/30 | 179 | 52,978 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 2.500(cc) | 07/31/40 | 1,511 | 505,475 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 3.500(cc) | 07/31/35 | 1,645 | 623,496 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.000(cc) | 07/31/30 | 910 | 461,012 | ||||||||||||
|
| |||||||||||||||
1,980,570 | ||||||||||||||||
Egypt 2.4% | ||||||||||||||||
Egypt Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.800 | 09/30/27 | 420 | 267,750 | ||||||||||||
Sr. Unsec’d. Notes | 7.500 | 01/31/27 | 400 | 276,000 | ||||||||||||
Sr. Unsec’d. Notes | 7.625 | 05/29/32 | 1,110 | 632,700 | ||||||||||||
Sr. Unsec’d. Notes | 7.903 | 02/21/48 | 200 | 101,250 | ||||||||||||
Sr. Unsec’d. Notes | 8.500 | 01/31/47 | 500 | 259,275 | ||||||||||||
Sr. Unsec’d. Notes | 8.700 | 03/01/49 | 850 | 445,187 | ||||||||||||
Sr. Unsec’d. Notes | 8.875 | 05/29/50 | 400 | 211,000 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 8.700 | 03/01/49 | 410 | 214,738 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.750 | 04/16/26 | EUR | 100 | 71,587 | |||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.375 | 04/11/31 | EUR | 220 | 125,241 | |||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 8.500 | 01/31/47 | 255 | 132,230 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 3.875 | 02/16/26 | 630 | 429,975 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 4.750 | 04/11/25 | EUR | 300 | 251,266 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 4.750 | 04/16/26 | EUR | 1,000 | 715,871 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 5.625 | 04/16/30 | EUR | 450 | 253,766 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 6.375 | 04/11/31 | EUR | 300 | 170,784 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 7.600 | 03/01/29 | 650 | 403,000 | ||||||||||||
|
| |||||||||||||||
4,961,620 | ||||||||||||||||
El Salvador 0.7% | ||||||||||||||||
El Salvador Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.875 | 01/30/25 | 501 | 454,156 | ||||||||||||
Sr. Unsec’d. Notes | 6.375 | 01/18/27 | 495 | 400,950 | ||||||||||||
Sr. Unsec’d. Notes | 7.625 | 02/01/41 | 150 | 99,375 | ||||||||||||
Sr. Unsec’d. Notes | 7.650 | 06/15/35 | 57 | 39,530 | ||||||||||||
Sr. Unsec’d. Notes | 8.250 | 04/10/32 | 275 | 213,813 | ||||||||||||
Sr. Unsec’d. Notes | 8.625 | 02/28/29 | 340 | 274,210 | ||||||||||||
|
| |||||||||||||||
1,482,034 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 25
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Gabon 0.9% | ||||||||||||||||
Gabon Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.625% | 02/06/31 | 1,200 | $ | 843,000 | |||||||||||
Sr. Unsec’d. Notes | 6.950 | 06/16/25 | 1,000 | 867,500 | ||||||||||||
Sr. Unsec’d. Notes | 7.000 | 11/24/31 | 200 | 140,500 | ||||||||||||
|
| |||||||||||||||
1,851,000 | ||||||||||||||||
Ghana 1.1% | ||||||||||||||||
Ghana Government International Bond, | ||||||||||||||||
Bank Gtd. Notes | 10.750 | 10/14/30 | 400 | 249,000 | ||||||||||||
Sr. Unsec’d. Notes | 6.375 | 02/11/27(d) | 450 | 195,750 | ||||||||||||
Sr. Unsec’d. Notes | 7.625 | 05/16/29(d) | 400 | 172,000 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 04/07/29(d) | 650 | 274,742 | ||||||||||||
Sr. Unsec’d. Notes | 7.875 | 03/26/27(d) | 550 | 239,250 | ||||||||||||
Sr. Unsec’d. Notes | 7.875 | 02/11/35(d) | 800 | 347,000 | ||||||||||||
Sr. Unsec’d. Notes | 8.125 | 01/18/26(d) | 400 | 175,500 | ||||||||||||
Sr. Unsec’d. Notes | 8.750 | 03/11/61(d) | 200 | 84,000 | ||||||||||||
Sr. Unsec’d. Notes | 8.875 | 05/07/42 | 200 | 84,000 | ||||||||||||
Sr. Unsec’d. Notes | 8.950 | 03/26/51(d) | 870 | 365,400 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 8.950 | 03/26/51(d) | 205 | 86,100 | ||||||||||||
|
| |||||||||||||||
2,272,742 | ||||||||||||||||
Guatemala 0.8% | ||||||||||||||||
Guatemala Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.875 | 02/13/28 | 400 | 365,000 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 06/01/50 | 850 | 675,750 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.650 | 10/07/41 | 200 | 138,000 | ||||||||||||
Unsec’d. Notes | 5.250 | 08/10/29 | 430 | 388,720 | ||||||||||||
|
| |||||||||||||||
1,567,470 | ||||||||||||||||
Honduras 0.2% | ||||||||||||||||
Honduras Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.250 | 01/19/27 | 400 | 371,684 | ||||||||||||
Hungary 2.5% | ||||||||||||||||
Hungary Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.125 | 09/21/51 | 200 | 105,612 | ||||||||||||
Sr. Unsec’d. Notes | 5.250 | 06/16/29 | 200 | 188,342 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 05/22/28 | 612 | 607,147 | ||||||||||||
Sr. Unsec’d. Notes | 6.250 | 09/22/32 | 220 | 211,334 | ||||||||||||
Sr. Unsec’d. Notes | 7.625 | 03/29/41 | 760 | 778,763 |
See Notes to Financial Statements.
26
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Hungary (cont’d.) | ||||||||||||||||
Hungary Government International Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.250% | 06/16/29 | 740 | $ | 696,865 | |||||||||||
Sr. Unsec’d. Notes, 144A | 6.125 | 05/22/28 | 500 | 496,035 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.250 | 09/22/32 | 1,235 | 1,186,353 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 09/25/52 | 220 | 203,500 | ||||||||||||
Magyar Export-Import Bank Zrt, | ||||||||||||||||
Gov’t. Gtd. Notes, 144A | 6.125 | 12/04/27 | 600 | 586,440 | ||||||||||||
|
| |||||||||||||||
5,060,391 | ||||||||||||||||
India 0.3% | ||||||||||||||||
Export-Import Bank of India, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.875 | 02/01/28 | 200 | 183,534 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 3.250 | 01/15/30 | 400 | 336,764 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 2.250 | 01/13/31 | 200 | 152,758 | ||||||||||||
|
| |||||||||||||||
673,056 | ||||||||||||||||
Indonesia 3.0% | ||||||||||||||||
Indonesia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.100 | 03/12/33 | EUR | 440 | 333,274 | |||||||||||
Sr. Unsec’d. Notes | 1.400 | 10/30/31 | EUR | 100 | 82,102 | |||||||||||
Sr. Unsec’d. Notes | 1.450 | 09/18/26 | EUR | 100 | 96,707 | |||||||||||
Sr. Unsec’d. Notes | 3.550 | 03/31/32 | 200 | 169,252 | ||||||||||||
Sr. Unsec’d. Notes | 4.300 | 03/31/52 | 400 | 296,252 | ||||||||||||
Sr. Unsec’d. Notes | 4.650 | 09/20/32 | 590 | 539,301 | ||||||||||||
Sr. Unsec’d. Notes | 5.450 | 09/20/52 | 400 | 352,756 | ||||||||||||
Sr. Unsec’d. Notes | 5.650 | 01/11/53 | 200 | 182,416 | ||||||||||||
Sr. Unsec’d. Notes | 6.625 | 02/17/37 | 150 | 155,862 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 01/17/38 | 690 | 787,132 | ||||||||||||
Sr. Unsec’d. Notes | 8.500 | 10/12/35 | 400 | 477,200 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.625 | 02/17/37 | 290 | 301,333 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 3.750 | 06/14/28 | EUR | 570 | 587,545 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 4.625 | 04/15/43 | 200 | 165,766 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 4.750 | 07/18/47 | 230 | 187,643 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 5.125 | 01/15/45 | 200 | 173,860 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 5.250 | 01/17/42 | 400 | 359,220 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.750 | 01/15/44 | 100 | 104,318 | ||||||||||||
Perusahaan Penerbit SBSN Indonesia III, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.700 | 06/06/32 | 600 | 557,052 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.700 | 06/06/32 | 205 | 190,326 | ||||||||||||
|
| |||||||||||||||
6,099,317 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 27
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Iraq 0.4% | ||||||||||||||||
Iraq International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.800% | 01/15/28 | 897 | $ | 796,720 | |||||||||||
Ivory Coast 1.2% | ||||||||||||||||
Ivory Coast Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 5.250 | 03/22/30 | EUR | 1,360 | 1,183,591 | |||||||||||
Sr. Unsec’d. Notes | 5.750 | 12/31/32 | 85 | 75,599 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 10/17/31 | EUR | 1,150 | 981,057 | |||||||||||
Sr. Unsec’d. Notes | 6.375 | 03/03/28 | 200 | 185,500 | ||||||||||||
|
| |||||||||||||||
2,425,747 | ||||||||||||||||
Jamaica 0.7% | ||||||||||||||||
Jamaica Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 6.750 | 04/28/28 | 500 | 506,050 | ||||||||||||
Sr. Unsec’d. Notes | 7.875 | 07/28/45 | 400 | 427,600 | ||||||||||||
Sr. Unsec’d. Notes | 8.000 | 03/15/39 | 320 | 354,080 | ||||||||||||
Sr. Unsec’d. Notes | 9.250 | 10/17/25 | 200 | 208,956 | ||||||||||||
|
| |||||||||||||||
1,496,686 | ||||||||||||||||
Jordan 0.8% | ||||||||||||||||
Jordan Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 01/31/27 | 200 | 180,000 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 01/29/26 | 200 | 185,250 | ||||||||||||
Sr. Unsec’d. Notes | 7.375 | 10/10/47 | 400 | 301,500 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 01/15/28 | 550 | 521,813 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.500 | 01/13/29 | 205 | 189,881 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.750 | 01/15/28 | 220 | 208,725 | ||||||||||||
|
| |||||||||||||||
1,587,169 | ||||||||||||||||
Kazakhstan 0.1% | ||||||||||||||||
Kazakhstan Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.500 | 07/21/45 | 200 | 196,000 | ||||||||||||
Lebanon 0.1% | ||||||||||||||||
Lebanon Government International Bond, |
| |||||||||||||||
Sr. Unsec’d. Notes | 6.000 | 01/27/23 | (d) | 191 | 11,634 | |||||||||||
Sr. Unsec’d. Notes | 6.650 | 04/22/24 | (d) | 172 | 10,535 | |||||||||||
Sr. Unsec’d. Notes | 6.750 | 11/29/27 | (d) | 170 | 10,242 | |||||||||||
Sr. Unsec’d. Notes | 6.850 | 03/23/27 | (d) | 30 | 1,828 | |||||||||||
Sr. Unsec’d. Notes | 7.000 | 04/22/31 | (d) | 115 | 6,867 |
See Notes to Financial Statements.
28
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Lebanon (cont’d.) | ||||||||||||||||
Lebanon Government International Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.100% | 10/04/22(d) | 75 | $ | 4,577 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 6.850 | 05/25/29(d) | 335 | 20,100 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 6.250 | 05/27/22(d) | 245 | 14,700 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 6.250 | 11/04/24(d) | 320 | 19,648 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 6.375 | 03/09/20(d) | 220 | 13,200 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 6.400 | 05/26/23(d) | 250 | 15,050 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 6.650 | 02/26/30(d) | 715 | 43,880 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 7.150 | 11/20/31(d) | 415 | 27,109 | ||||||||||||
|
| |||||||||||||||
199,370 | ||||||||||||||||
Mexico 2.4% | ||||||||||||||||
Mexico Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.659 | 05/24/31 | 465 | 362,003 | ||||||||||||
Sr. Unsec’d. Notes | 3.250 | 04/16/30 | 270 | 227,340 | ||||||||||||
Sr. Unsec’d. Notes | 3.500 | 02/12/34 | 1,000 | 761,000 | ||||||||||||
Sr. Unsec’d. Notes | 3.750 | 01/11/28 | 320 | 295,040 | ||||||||||||
Sr. Unsec’d. Notes | 4.600 | 02/10/48 | 300 | 208,500 | ||||||||||||
Sr. Unsec’d. Notes | 4.875 | 05/19/33 | 850 | 745,875 | ||||||||||||
Sr. Unsec’d. Notes | 5.400 | 02/09/28 | 350 | 343,350 | ||||||||||||
Sr. Unsec’d. Notes | 6.338 | 05/04/53 | 290 | 251,285 | ||||||||||||
Sr. Unsec’d. Notes | 6.350 | 02/09/35 | 250 | 238,250 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 5.750 | 10/12/2110 | 358 | 270,827 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 4.750 | 03/08/44 | 140 | 103,219 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 6.050 | 01/11/40 | 930 | 832,350 | ||||||||||||
Sr. Unsec’d. Notes, Series A, MTN | 6.750 | 09/27/34 | 203 | 201,173 | ||||||||||||
Sr. Unsec’d. Notes, Series A, MTN | 7.500 | 04/08/33 | 130 | 136,890 | ||||||||||||
|
| |||||||||||||||
4,977,102 | ||||||||||||||||
Mongolia 0.3% | ||||||||||||||||
Mongolia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.650 | 01/19/28 | 200 | 198,420 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 8.750 | 03/09/24 | 400 | 400,624 | ||||||||||||
|
| |||||||||||||||
599,044 | ||||||||||||||||
Morocco 1.0% | ||||||||||||||||
Morocco Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.500 | 11/27/31 | EUR | 100 | 77,506 | |||||||||||
Sr. Unsec’d. Notes | 2.000 | 09/30/30 | EUR | 600 | 507,888 | |||||||||||
Sr. Unsec’d. Notes | 2.375 | 12/15/27 | 200 | 171,136 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 29
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Morocco (cont’d.) | ||||||||||||||||
Morocco Government International Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.000% | 12/15/50 | 400 | $ | 236,500 | |||||||||||
Sr. Unsec’d. Notes, 144A | 5.950 | 03/08/28 | 550 | 538,313 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.500 | 09/08/33 | 595 | 570,456 | ||||||||||||
|
| |||||||||||||||
2,101,799 | ||||||||||||||||
Mozambique 0.4% | ||||||||||||||||
Mozambique International Bond, | ||||||||||||||||
Unsec’d. Notes | 9.000 | 09/15/31 | 1,040 | 803,171 | ||||||||||||
Nigeria 1.1% | ||||||||||||||||
Nigeria Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.143 | 02/23/30 | 200 | 160,250 | ||||||||||||
Sr. Unsec’d. Notes | 7.696 | 02/23/38 | 200 | 142,000 | ||||||||||||
Sr. Unsec’d. Notes | 7.875 | 02/16/32 | 400 | 319,000 | ||||||||||||
Sr. Unsec’d. Notes | 8.747 | 01/21/31 | 400 | 342,500 | ||||||||||||
Sr. Unsec’d. Notes | 9.248 | 01/21/49 | 200 | 154,750 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.696 | 02/23/38 | 200 | 142,000 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 7.375 | 09/28/33 | 200 | 150,000 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.500 | 11/28/27 | 700 | 602,000 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 8.250 | 09/28/51 | 250 | 174,687 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 8.375 | 03/24/29 | 200 | 174,750 | ||||||||||||
|
| |||||||||||||||
2,361,937 | ||||||||||||||||
Oman 3.0% | ||||||||||||||||
Oman Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750 | 06/15/26 | 410 | 393,157 | ||||||||||||
Sr. Unsec’d. Notes | 5.375 | 03/08/27 | 930 | 898,612 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 01/17/28 | 1,480 | 1,426,365 | ||||||||||||
Sr. Unsec’d. Notes | 6.250 | 01/25/31 | 200 | 194,250 | ||||||||||||
Sr. Unsec’d. Notes | 6.500 | 03/08/47 | 1,025 | 889,188 | ||||||||||||
Sr. Unsec’d. Notes | 6.750 | 10/28/27 | 800 | 806,750 | ||||||||||||
Sr. Unsec’d. Notes | 7.000 | 01/25/51 | 200 | 183,500 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 01/17/48 | 200 | 178,250 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.000 | 08/01/29 | 1,200 | 1,164,000 | ||||||||||||
|
| |||||||||||||||
6,134,072 | ||||||||||||||||
Pakistan 1.2% | ||||||||||||||||
Pakistan Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.875 | 12/05/27 | 640 | 334,208 |
See Notes to Financial Statements.
30
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||
Pakistan (cont’d.) | ||||||||||||||
Pakistan Government International Bond, (cont’d.) | ||||||||||||||
Sr. Unsec’d. Notes | 8.250% | 04/15/24 | 900 | $ | 803,322 | |||||||||
Sr. Unsec’d. Notes | 8.250 | 09/30/25 | (a) | 770 | 539,662 | |||||||||
Sr. Unsec’d. Notes, 144A, MTN | 7.375 | 04/08/31 | 200 | 97,044 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 6.000 | 04/08/26 | 610 | 330,986 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 7.375 | 04/08/31 | 650 | 315,393 | ||||||||||
|
| |||||||||||||
2,420,615 | ||||||||||||||
Panama 1.2% | ||||||||||||||
Panama Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 3.160 | 01/23/30 | 200 | 160,400 | ||||||||||
Sr. Unsec’d. Notes | 3.298 | 01/19/33 | 200 | 146,800 | ||||||||||
Sr. Unsec’d. Notes | 3.870 | 07/23/60 | 200 | 104,400 | ||||||||||
Sr. Unsec’d. Notes | 4.300 | 04/29/53 | 375 | 223,313 | ||||||||||
Sr. Unsec’d. Notes | 4.500 | 04/16/50 | 850 | 528,275 | ||||||||||
Sr. Unsec’d. Notes | 4.500 | 04/01/56 | 400 | 240,400 | ||||||||||
Sr. Unsec’d. Notes | 4.500 | 01/19/63 | 200 | 116,600 | ||||||||||
Sr. Unsec’d. Notes | 6.700 | 01/26/36 | 695 | 646,697 | ||||||||||
Sr. Unsec’d. Notes | 6.853 | 03/28/54 | 215 | 183,395 | ||||||||||
Sr. Unsec’d. Notes | 9.375 | 04/01/29 | 165 | 182,160 | ||||||||||
|
| |||||||||||||
2,532,440 | ||||||||||||||
Papua New Guinea 0.2% | ||||||||||||||
Papua New Guinea Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 8.375 | 10/04/28 | 220 | 201,098 | ||||||||||
Sr. Unsec’d. Notes, 144A | 8.375 | 10/04/28 | 200 | 182,816 | ||||||||||
|
| |||||||||||||
383,914 | ||||||||||||||
Paraguay 0.5% | ||||||||||||||
Paraguay Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 4.700 | 03/27/27 | 200 | 190,200 | ||||||||||
Sr. Unsec’d. Notes | 4.950 | 04/28/31 | 200 | 181,400 | ||||||||||
Sr. Unsec’d. Notes | 6.100 | 08/11/44 | 700 | 585,200 | ||||||||||
Sr. Unsec’d. Notes, 144A | 5.400 | 03/30/50 | 200 | 149,500 | ||||||||||
|
| |||||||||||||
1,106,300 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 31
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Peru 1.9% | ||||||||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.780% | 12/01/60 | 490 | $ | 245,245 | |||||||||||
Sr. Unsec’d. Notes | 2.783 | 01/23/31 | 1,050 | 841,050 | ||||||||||||
Sr. Unsec’d. Notes | 3.000 | 01/15/34 | 1,385 | 1,044,982 | ||||||||||||
Sr. Unsec’d. Notes | 3.230 | 07/28/2121 | 110 | 55,165 | ||||||||||||
Sr. Unsec’d. Notes | 3.600 | 01/15/72 | 515 | 290,460 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 11/18/50 | 502 | 442,262 | ||||||||||||
Sr. Unsec’d. Notes | 6.550 | 03/14/37 | 225 | 226,238 | ||||||||||||
Sr. Unsec’d. Notes | 8.750 | 11/21/33 | 670 | 781,327 | ||||||||||||
|
| |||||||||||||||
3,926,729 | ||||||||||||||||
Philippines 1.9% | ||||||||||||||||
Philippine Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 0.700 | 02/03/29 | EUR | 300 | 262,921 | |||||||||||
Sr. Unsec’d. Notes | 1.750 | 04/28/41 | EUR | 265 | 174,457 | |||||||||||
Sr. Unsec’d. Notes | 2.650 | 12/10/45 | 200 | 115,806 | ||||||||||||
Sr. Unsec’d. Notes | 3.200 | 07/06/46 | 200 | 125,386 | ||||||||||||
Sr. Unsec’d. Notes | 3.556 | 09/29/32 | 300 | 252,192 | ||||||||||||
Sr. Unsec’d. Notes | 3.700 | 03/01/41 | 600 | 433,902 | ||||||||||||
Sr. Unsec’d. Notes | 3.950 | 01/20/40 | 450 | 343,724 | ||||||||||||
Sr. Unsec’d. Notes | 4.200 | 03/29/47 | 700 | 520,002 | ||||||||||||
Sr. Unsec’d. Notes | 5.000 | 07/17/33 | 770 | 723,800 | ||||||||||||
Sr. Unsec’d. Notes | 5.609 | 04/13/33 | 200 | 195,994 | ||||||||||||
Sr. Unsec’d. Notes | 6.375 | 10/23/34 | 200 | 205,292 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 01/14/31 | 420 | 467,317 | ||||||||||||
|
| |||||||||||||||
3,820,793 | ||||||||||||||||
Poland 0.6% | ||||||||||||||||
Republic of Poland Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.875 | 10/04/33 | 300 | 277,461 | ||||||||||||
Sr. Unsec’d. Notes | 5.500 | 04/04/53 | 785 | 689,599 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 11/16/32 | 230 | 227,613 | ||||||||||||
|
| |||||||||||||||
1,194,673 | ||||||||||||||||
Qatar 2.5% | ||||||||||||||||
Qatar Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.000 | 03/14/29 | 1,000 | 940,000 | ||||||||||||
Sr. Unsec’d. Notes | 4.500 | 04/23/28 | 500 | 483,780 | ||||||||||||
Sr. Unsec’d. Notes | 4.625 | 06/02/46 | 330 | 268,641 |
See Notes to Financial Statements.
32
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Qatar (cont’d.) | ||||||||||||||||
Qatar Government International Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.817% | 03/14/49 | 220 | $ | 179,781 | |||||||||||
Sr. Unsec’d. Notes | 5.103 | 04/23/48 | 2,210 | 1,887,478 | ||||||||||||
Sr. Unsec’d. Notes | 6.400 | 01/20/40 | 100 | 103,063 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.817 | 03/14/49 | 1,340 | 1,095,031 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.103 | 04/23/48 | 200 | 170,812 | ||||||||||||
|
| |||||||||||||||
5,128,586 | ||||||||||||||||
Romania 3.2% | ||||||||||||||||
Romanian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.125 | 06/15/48 | 180 | 133,058 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.625 | 02/17/28 | 1,080 | 1,081,253 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.125 | 01/17/33 | 478 | 474,202 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.625 | 01/17/53 | 1,136 | 1,108,744 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 2.000 | 04/14/33 | EUR | 260 | 188,005 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 2.125 | 03/07/28 | EUR | 960 | 880,233 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 3.875 | 10/29/35 | EUR | 440 | 363,867 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 4.125 | 03/11/39 | EUR | 410 | 321,952 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 5.000 | 09/27/26 | EUR | 490 | 520,413 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 6.000 | 05/25/34 | 80 | 72,750 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.625 | 09/27/29 | EUR | 370 | 401,896 | |||||||||||
Unsec’d. Notes, 144A, MTN | 6.000 | 05/25/34 | 1,022 | 929,386 | ||||||||||||
|
| |||||||||||||||
6,475,759 | ||||||||||||||||
Russia 0.1% | ||||||||||||||||
Russian Foreign Bond - Eurobond, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.850 | 11/20/32 | (d) | EUR | 300 | 131,733 | ||||||||||
Sr. Unsec’d. Notes | 5.100 | 03/28/35 | 400 | 132,000 | ||||||||||||
|
| |||||||||||||||
263,733 | ||||||||||||||||
Saudi Arabia 2.3% | ||||||||||||||||
Saudi Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.250 | 01/16/50 | 480 | 394,800 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.250 | 01/16/50 | 400 | 329,000 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 5.000 | 01/18/53 | 600 | 474,750 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 4.500 | 10/26/46 | 2,500 | 1,871,875 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 4.625 | 10/04/47 | 1,470 | 1,106,175 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 5.000 | 04/17/49 | 800 | 635,000 | ||||||||||||
|
| |||||||||||||||
4,811,600 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 33
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Senegal 0.8% | ||||||||||||||||
Senegal Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750% | 03/13/28 | EUR | 1,110 | $ | 1,015,935 | ||||||||||
Sr. Unsec’d. Notes | 5.375 | 06/08/37 | EUR | 785 | 531,590 | |||||||||||
Sr. Unsec’d. Notes, 144A | 5.375 | 06/08/37 | EUR | 100 | 67,718 | |||||||||||
|
| |||||||||||||||
1,615,243 | ||||||||||||||||
Serbia 1.5% | ||||||||||||||||
Serbia International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.500 | 06/26/29 | EUR | 1,120 | 913,987 | |||||||||||
Sr. Unsec’d. Notes, 144A | 1.650 | 03/03/33 | EUR | 225 | 157,099 | |||||||||||
Sr. Unsec’d. Notes, 144A | 2.125 | 12/01/30 | 230 | 168,319 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 3.125 | 05/15/27 | EUR | 715 | 684,178 | |||||||||||
Sr. Unsec’d. Notes, 144A | 6.250 | 05/26/28 | 600 | 581,964 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.500 | 09/26/33 | 430 | 403,280 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 1.000 | 09/23/28 | EUR | 230 | 190,964 | |||||||||||
|
| |||||||||||||||
3,099,791 | ||||||||||||||||
South Africa 1.6% | ||||||||||||||||
Republic of South Africa Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.300 | 10/12/28 | 200 | 172,000 | ||||||||||||
Sr. Unsec’d. Notes | 4.850 | 09/30/29 | 1,000 | 848,750 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 09/30/49 | 1,350 | 877,500 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 06/22/30 | 340 | 297,925 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 04/20/32 | 600 | 506,250 | ||||||||||||
Sr. Unsec’d. Notes | 7.300 | 04/20/52 | 680 | 529,550 | ||||||||||||
|
| |||||||||||||||
3,231,975 | ||||||||||||||||
Sri Lanka 1.1% | ||||||||||||||||
Sri Lanka Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 04/18/23 | (d) | 400 | 207,848 | |||||||||||
Sr. Unsec’d. Notes | 6.200 | 05/11/27 | (d) | 600 | 297,054 | |||||||||||
Sr. Unsec’d. Notes | 6.350 | 06/28/24 | (d) | 630 | 323,108 | |||||||||||
Sr. Unsec’d. Notes | 6.750 | 04/18/28 | 240 | 119,189 | ||||||||||||
Sr. Unsec’d. Notes | 6.825 | 07/18/26 | (d) | 1,150 | 589,593 | |||||||||||
Sr. Unsec’d. Notes | 6.850 | 11/03/25 | (d) | 350 | 179,232 | |||||||||||
Sr. Unsec’d. Notes | 7.550 | 03/28/30 | (d) | 440 | 218,429 | |||||||||||
Sr. Unsec’d. Notes | 7.850 | 03/14/29 | (d) | 250 | 123,685 |
See Notes to Financial Statements.
34
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||
Sri Lanka (cont’d.) | ||||||||||||||
Sri Lanka Government International Bond, (cont’d.) | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750% | 04/18/28 | (d) | 200 | $ | 99,324 | ||||||||
Sr. Unsec’d. Notes, 144A | 6.850 | 03/14/24 | (d) | 205 | 105,110 | |||||||||
|
| |||||||||||||
2,262,572 | ||||||||||||||
Turkey 4.2% | ||||||||||||||
Turkey Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 4.250 | 04/14/26 | 400 | 367,000 | ||||||||||
Sr. Unsec’d. Notes | 4.750 | 01/26/26 | 495 | 464,063 | ||||||||||
Sr. Unsec’d. Notes | 4.875 | 10/09/26 | 620 | 570,400 | ||||||||||
Sr. Unsec’d. Notes | 5.250 | 03/13/30 | 810 | 668,250 | ||||||||||
Sr. Unsec’d. Notes | 5.750 | 05/11/47 | 200 | 130,250 | ||||||||||
Sr. Unsec’d. Notes | 5.950 | 01/15/31 | 400 | 336,000 | ||||||||||
Sr. Unsec’d. Notes | 6.000 | 03/25/27 | 440 | 413,050 | ||||||||||
Sr. Unsec’d. Notes | 6.000 | 01/14/41 | 200 | 142,000 | ||||||||||
Sr. Unsec’d. Notes | 6.125 | 10/24/28 | 920 | 833,750 | ||||||||||
Sr. Unsec’d. Notes | 6.500 | 09/20/33 | 200 | 167,500 | ||||||||||
Sr. Unsec’d. Notes | 6.875 | 03/17/36 | 549 | 453,611 | ||||||||||
Sr. Unsec’d. Notes | 9.375 | 03/14/29 | 1,631 | 1,659,542 | ||||||||||
Sr. Unsec’d. Notes | 9.375 | 01/19/33 | 400 | 399,500 | ||||||||||
Sr. Unsec’d. Notes | 9.875 | 01/15/28 | 629 | 658,091 | ||||||||||
Turkiye Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 9.125 | 07/13/30 | 1,245 | 1,241,888 | ||||||||||
|
| |||||||||||||
8,504,895 | ||||||||||||||
Ukraine 1.2% | ||||||||||||||
Ukraine Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 4.375 | 01/27/32 | (d) | EUR | 760 | 179,176 | ||||||||
Sr. Unsec’d. Notes | 6.750 | 06/20/28 | (d) | EUR | 580 | 151,890 | ||||||||
Sr. Unsec’d. Notes | 7.375 | 09/25/34 | (d) | 200 | 50,300 | |||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/25 | (d) | 300 | 91,500 | |||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/26 | (d) | 1,030 | 293,406 | |||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/27 | (d) | 1,920 | 545,280 | |||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/28 | (d) | 1,520 | 425,600 | |||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/29 | (d) | 520 | 144,560 | |||||||||
Sr. Unsec’d. Notes | 8.994 | 02/01/26 | (d) | 200 | 60,687 | |||||||||
Sr. Unsec’d. Notes | 9.750 | 11/01/30 | (d) | 1,665 | 482,850 | |||||||||
Sr. Unsec’d. Notes, 144A | 4.375 | 01/27/32 | (d) | EUR | 100 | 23,576 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 35
Schedule of Investments (continued)
as of October 31, 2023
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Ukraine (cont’d.) | ||||||||||||||||
Ukreximbank Via Biz Finance PLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.750% | 01/22/25 | 38 | $ | 34,288 | |||||||||||
|
| |||||||||||||||
2,483,113 | ||||||||||||||||
United Arab Emirates 1.5% | ||||||||||||||||
Abu Dhabi Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.125 | 09/30/49 | 800 | 489,500 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 3.125 | 09/30/49 | 500 | 305,937 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 3.875 | 04/16/50 | 200 | 141,313 | ||||||||||||
Emirate of Dubai Government International Bonds, | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 5.250 | 01/30/43 | 1,390 | 1,178,025 | ||||||||||||
Finance Department Government of Sharjah, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.500 | 11/23/32 | 200 | 193,500 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.500 | 11/23/32 | 355 | 343,462 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.000 | 07/28/50 | 400 | 226,500 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 4.000 | 07/28/50 | 200 | 113,250 | ||||||||||||
|
| |||||||||||||||
2,991,487 | ||||||||||||||||
Uruguay 1.6% | ||||||||||||||||
Uruguay Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.125 | 11/20/45 | 120 | 94,800 | ||||||||||||
Sr. Unsec’d. Notes | 4.975 | 04/20/55 | 800 | 666,400 | ||||||||||||
Sr. Unsec’d. Notes | 5.100 | 06/18/50 | 1,104 | 951,648 | ||||||||||||
Sr. Unsec’d. Notes | 7.625 | 03/21/36 | 870 | 982,665 | ||||||||||||
Sr. Unsec’d. Notes, Cash coupon 7.875% | 7.875 | 01/15/33 | 435 | 496,770 | ||||||||||||
|
| |||||||||||||||
3,192,283 | ||||||||||||||||
Venezuela 0.5% | ||||||||||||||||
Venezuela Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.250 | 09/15/27 | (d) | 5,320 | 997,500 | |||||||||||
Sr. Unsec’d. Notes | 12.750 | 08/23/22 | (d) | 180 | 31,770 | |||||||||||
|
| |||||||||||||||
1,029,270 | ||||||||||||||||
Zambia 0.7% | ||||||||||||||||
Zambia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.500 | 04/14/24 | (d) | 1,610 | 982,603 |
See Notes to Financial Statements.
36
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Zambia (cont’d.) | ||||||||||||||||
Zambia Government International Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 8.970% | 07/30/27 | (d) | 600 | $ | 363,938 | ||||||||||
Unsec’d. Notes | 5.375 | 09/20/22 | (d) | 200 | 109,040 | |||||||||||
|
| |||||||||||||||
1,455,581 | ||||||||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS | 145,696,464 | |||||||||||||||
|
| |||||||||||||||
U.S. TREASURY OBLIGATION(h) 0.1% | ||||||||||||||||
U.S. Treasury Notes | ||||||||||||||||
(cost $265,190) | 4.250 | 09/30/24 | 265 | 262,154 | ||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | ||||||||||||||||
(cost $229,619,306) | 194,133,984 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 3.5% | ||||||||||||||||
AFFILIATED MUTUAL FUNDS 1.8% | ||||||||||||||||
PGIM Core Government Money Market Fund(wb) | 2,239,489 | 2,239,489 | ||||||||||||||
PGIM Institutional Money Market Fund | ||||||||||||||||
(cost $1,381,128; includes $1,375,852 of cash collateral for securities on loan)(b)(wb) | 1,382,021 | 1,381,330 | ||||||||||||||
|
| |||||||||||||||
TOTAL AFFILIATED MUTUAL FUNDS | ||||||||||||||||
(cost $3,620,617) | 3,620,819 | |||||||||||||||
|
| |||||||||||||||
Principal (000)# | ||||||||||||||||
U.S. TREASURY OBLIGATION(n) 1.7% | ||||||||||||||||
U.S. Treasury Bills | ||||||||||||||||
(cost $3,456,160) | 5.378% | 01/25/24 | 3,500 | 3,456,255 | ||||||||||||
|
| |||||||||||||||
OPTIONS PURCHASED*~ 0.0% | ||||||||||||||||
(cost $55,612) | 28,097 | |||||||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||||||||||
(cost $7,132,389) | 7,105,171 | |||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 37
Schedule of Investments (continued)
as of October 31, 2023
Description | Value | |||||||||||||||
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN 98.4% | ||||||||||||||||
(cost $236,751,695) | $ | 201,239,155 | ||||||||||||||
|
| |||||||||||||||
OPTIONS WRITTEN*~ (0.3)% | ||||||||||||||||
(premiums received $590,503) | (521,748 | ) | ||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN 98.1% | ||||||||||||||||
(cost $236,161,192) | 200,717,407 | |||||||||||||||
Other assets in excess of liabilities(z) 1.9% | 3,914,826 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 204,632,233 | ||||||||||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
AUD—Australian Dollar
BRL—Brazilian Real
CLP—Chilean Peso
CNH—Chinese Renminbi
COP—Colombian Peso
CZK—Czech Koruna
EUR—Euro
GBP—British Pound
HUF—Hungarian Forint
IDR—Indonesian Rupiah
ILS—Israeli Shekel
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
SGD—Singapore Dollar
THB—Thai Baht
TWD—New Taiwanese Dollar
USD—US Dollar
ZAR—South African Rand
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
A—Annual payment frequency for swaps
BARC—Barclays Bank PLC
BNP—BNP Paribas S.A.
BOA—Bank of America, N.A.
BROIS—Brazil Overnight Index Swap
BUBOR—Budapest Interbank Offered Rate
CDX—Credit Derivative Index
CITI—Citibank, N.A.
CLOIS—Sinacofi Chile Interbank Rate Average
COOIS—Colombia Overnight Interbank Reference Rate
DB—Deutsche Bank AG
See Notes to Financial Statements.
38
EMTN—Euro Medium Term Note
GMTN—Global Medium Term Note
GSI—Goldman Sachs International
HSBC—HSBC Bank PLC
JIBAR—Johannesburg Interbank Agreed Rate
JPM—JPMorgan Chase Bank N.A.
JPS—J.P. Morgan Securities LLC
KLIBOR—Kuala Lumpur Interbank Offered Rate
KWCDC—Korean Won Certificate of Deposit
M—Monthly payment frequency for swaps
MSI—Morgan Stanley & Co International PLC
MTN—Medium Term Note
OTC—Over-the-counter
PJSC—Public Joint-Stock Company
PRIBOR—Prague Interbank Offered Rate
Q—Quarterly payment frequency for swaps
S—Semiannual payment frequency for swaps
SCB—Standard Chartered Bank
SOFR—Secured Overnight Financing Rate
SSB—State Street Bank & Trust Company
T—Swap payment upon termination
TD—The Toronto-Dominion Bank
THOR—Thai Overnight Repurchase Rate
UAG—UBS AG
WIBOR—Warsaw Interbank Offered Rate
* | Non-income producing security. |
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
~ | See tables subsequent to the Schedule of Investments for options detail. Options with maturity dates greater than one year from date of acquisition would be considered long-term investments. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $1,351,138; cash collateral of $1,375,852 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of October 31, 2023. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(d) | Represents issuer in default on interest payments and/or principal repayment. Non-income producing security. Such securities may be post-maturity. |
(f) | Indicates a restricted security that is acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer and is considered restricted as to disposition under federal securities law; the aggregate original cost of such securities is $162,432. The aggregate value of $130,186 is 0.1% of net assets. |
(h) | Represents security, or a portion thereof, segregated as collateral for OTC derivatives. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(s) | Represents zero coupon bond or principal only security. Rate represents yield to maturity at purchase date. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
(z) | Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments: |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 39
Schedule of Investments (continued)
as of October 31, 2023
Options Purchased:
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs ILS | Call | MSI | 02/16/24 | 5.50 | — | EUR | 555 | $ | 195 | |||||||||||||||
Currency Option EUR vs PLN | Call | HSBC | 11/02/23 | 5.40 | — | EUR | 234 | — | ||||||||||||||||
Currency Option EUR vs PLN | Call | MSI | 11/16/23 | 5.00 | — | EUR | 471 | 7 | ||||||||||||||||
Currency Option EUR vs PLN | Call | CITI | 11/27/23 | 5.10 | — | EUR | 219 | 5 | ||||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/02/23 | 1,100.00 | — | 889 | — | |||||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/27/23 | 1,150.00 | — | 889 | 19 | |||||||||||||||||
Currency Option USD vs CNH | Call | JPM | 11/08/23 | 7.30 | — | 169 | 913 | |||||||||||||||||
Currency Option USD vs CNH | Call | HSBC | 11/08/23 | 7.80 | — | 169 | 2 | |||||||||||||||||
Currency Option USD vs JPY | Call | JPM | 11/08/23 | 150.00 | — | 710 | 8,594 | |||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/01/23 | 17.85 | — | 522 | 4,834 | |||||||||||||||||
Currency Option USD vs MXN | Call | MSI | 11/01/23 | 20.00 | — | 522 | — | |||||||||||||||||
Currency Option USD vs MXN | Call | GSI | 11/16/23 | 22.00 | — | 542 | 11 | |||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/29/23 | 22.00 | — | 522 | 50 | |||||||||||||||||
Currency Option USD vs ZAR | Call | JPM | 12/01/23 | 19.75 | — | 1,962 | 6,696 | |||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 360.00 | — | EUR | 237 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 360.00 | — | EUR | 237 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | MSI | 11/02/23 | 360.00 | — | EUR | 492 | — | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/27/23 | 360.00 | — | EUR | 255 | 4 | ||||||||||||||||
Currency Option EUR vs ILS | Put | MSI | 02/16/24 | 3.80 | — | EUR | 555 | 682 | ||||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/02/23 | 4.20 | — | EUR | 234 | — | ||||||||||||||||
Currency Option EUR vs PLN | Put | MSI | 11/09/23 | 4.20 | — | EUR | 234 | 1 | ||||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/30/23 | 4.20 | — | EUR | 234 | 16 | ||||||||||||||||
Currency Option USD vs BRL | Put | GSI | 11/08/23 | 4.50 | — | 471 | — |
See Notes to Financial Statements.
40
Options Purchased (continued):
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option USD vs BRL | Put | CITI | 11/16/23 | 4.00 | — | 471 | $ | — | ||||||||||||||||
Currency Option USD vs BRL | Put | MSI | 12/27/23 | 4.30 | — | 1,455 | 30 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/02/23 | 3,500.00 | — | 177 | 1 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 3,600.00 | — | 472 | — | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 3,600.00 | — | 472 | — | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/27/23 | 3,600.00 | — | 177 | 5 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/29/23 | 3,500.00 | — | 510 | 5 | |||||||||||||||||
Currency Option USD vs COP | Put | MSI | 12/12/23 | 3,200.00 | — | 1,952 | 5 | |||||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 290.00 | — | 1,297 | — | |||||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 300.00 | — | 671 | — | |||||||||||||||||
Currency Option USD vs HUF | Put | MSI | 11/20/23 | 350.00 | — | 1,297 | 1,126 | |||||||||||||||||
Currency Option USD vs HUF | Put | MSI | 11/20/23 | 360.00 | — | 671 | 4,746 | |||||||||||||||||
Currency Option USD vs MXN | Put | JPM | 11/09/23 | 16.00 | — | 472 | 1 | |||||||||||||||||
Currency Option USD vs MXN | Put | HSBC | 11/09/23 | 16.75 | — | 234 | 4 | |||||||||||||||||
Currency Option USD vs MXN | Put | MSI | 11/10/23 | 15.00 | — | 963 | — | |||||||||||||||||
Currency Option USD vs PLN | Put | JPM | 11/01/23 | 3.45 | — | 1,133 | — | |||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 11/09/23 | 16.75 | — | 472 | 1 | |||||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 16.75 | — | 1,456 | 144 | |||||||||||||||||
|
| |||||||||||||||||||||||
Total Options Purchased (cost $55,612) | $ | 28,097 | ||||||||||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 41
Schedule of Investments (continued)
as of October 31, 2023
Options Written:
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs ILS | Call | MSI | 02/16/24 | 4.48 | — | EUR | 555 | $ | (5,682 | ) | ||||||||||||||
Currency Option EUR vs PLN | Call | HSBC | 11/02/23 | 4.70 | — | EUR | 234 | — | ||||||||||||||||
Currency Option EUR vs PLN | Call | MSI | 11/16/23 | 4.47 | — | EUR | 471 | (2,280 | ) | |||||||||||||||
Currency Option EUR vs PLN | Call | CITI | 11/27/23 | 4.50 | — | EUR | 219 | (1,009 | ) | |||||||||||||||
Currency Option USD vs CLP | Call | MSI | 11/27/23 | 930.00 | — | 889 | (5,918 | ) | ||||||||||||||||
Currency Option USD vs CNH | Call | HSBC | 11/08/23 | 7.30 | — | 169 | (913 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | MSI | 11/01/23 | 17.85 | — | 522 | (4,834 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | GSI | 11/16/23 | 18.00 | — | 542 | (7,229 | ) | ||||||||||||||||
Currency Option USD vs MXN | Call | HSBC | 11/29/23 | 18.20 | — | 522 | (6,725 | ) | ||||||||||||||||
Currency Option USD vs ZAR | Call | JPM | 12/01/23 | 20.50 | — | 1,962 | (2,276 | ) | ||||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 387.00 | — | EUR | 237 | (2,750 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/02/23 | 388.00 | — | EUR | 237 | (3,388 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | MSI | 11/02/23 | 388.00 | — | EUR | 492 | (7,034 | ) | |||||||||||||||
Currency Option EUR vs HUF | Put | JPM | 11/27/23 | 383.00 | — | EUR | 255 | (1,769 | ) | |||||||||||||||
Currency Option EUR vs PLN | Put | MSI | 11/09/23 | 4.57 | — | EUR | 234 | (6,376 | ) | |||||||||||||||
Currency Option EUR vs PLN | Put | HSBC | 11/30/23 | 4.45 | — | EUR | 234 | (1,611 | ) | |||||||||||||||
Currency Option USD vs BRL | Put | GSI | 11/08/23 | 5.05 | — | 471 | (4,189 | ) | ||||||||||||||||
Currency Option USD vs BRL | Put | CITI | 11/16/23 | 5.00 | — | 471 | (3,229 | ) | ||||||||||||||||
Currency Option USD vs BRL | Put | MSI | 12/27/23 | 5.35 | — | 1,455 | (89,074 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 4,150.00 | — | 472 | (6,345 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/09/23 | 4,200.00 | — | 472 | (10,282 | ) | ||||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/27/23 | 4,100.00 | — | 177 | (2,310 | ) |
See Notes to Financial Statements.
42
Options Written (continued):
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||
Currency Option USD vs COP | Put | MSI | 11/29/23 | 4,000.00 | — | 510 | $ | (2,783 | ) | |||||||||||||
Currency Option USD vs COP | Put | MSI | 12/12/23 | 4,700.00 | — | 1,952 | (255,885 | ) | ||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 350.00 | — | 1,297 | (1,126 | ) | ||||||||||||||
Currency Option USD vs HUF | Put | JPM | 11/20/23 | 360.00 | — | 671 | (4,746 | ) | ||||||||||||||
Currency Option USD vs MXN | Put | MSI | 11/10/23 | 18.70 | — | 963 | (37,087 | ) | ||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 18.75 | — | 472 | (8,684 | ) | ||||||||||||||
Currency Option USD vs ZAR | Put | MSI | 12/01/23 | 19.25 | — | 984 | (36,214 | ) | ||||||||||||||
|
| |||||||||||||||||||||
Total Options Written (premiums received $590,503) | $ | (521,748 | ) | |||||||||||||||||||
|
|
Futures contracts outstanding at October 31, 2023:
Number of Contracts | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Long Positions: |
| |||||||||||||||||||||
126 | 2 Year U.S. Treasury Notes | Dec. 2023 | $ | 25,505,156 | $ | (102,542 | ) | |||||||||||||||
48 | 10 Year U.S. Treasury Notes | Dec. 2023 | 5,096,250 | (97,638 | ) | |||||||||||||||||
23 | 10 Year U.S. Ultra Treasury Notes | Dec. 2023 | 2,503,047 | (80,521 | ) | |||||||||||||||||
8 | 30 Year U.S. Ultra Treasury Bonds | Dec. 2023 | 900,500 | (59,731 | ) | |||||||||||||||||
|
| |||||||||||||||||||||
(340,432 | ) | |||||||||||||||||||||
|
| |||||||||||||||||||||
Short Positions: |
| |||||||||||||||||||||
44 | 5 Year Euro-Bobl | Dec. 2023 | 5,414,044 | 43,345 | ||||||||||||||||||
25 | 5 Year U.S. Treasury Notes | Dec. 2023 | 2,611,914 | 34,313 | ||||||||||||||||||
35 | 10 Year Euro-Bund | Dec. 2023 | 4,776,951 | 94,645 | ||||||||||||||||||
16 | Euro Schatz Index | Dec. 2023 | 1,780,571 | 2,227 | ||||||||||||||||||
|
| |||||||||||||||||||||
174,530 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
$ | (165,902 | ) | ||||||||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 43
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts: |
| |||||||||||||||||||||||||||||||||
Australian Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | JPM | AUD | 351 | $ | 223,000 | $ | 223,562 | $ | 562 | $ | — | |||||||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 1,623 | 320,000 | 321,701 | 1,701 | — | |||||||||||||||||||||||||||
Expiring 11/03/23 | DB | BRL | 2,091 | 423,195 | 414,470 | — | (8,725 | ) | ||||||||||||||||||||||||||
Expiring 11/03/23 | GSI | BRL | 1,224 | 235,000 | 242,585 | 7,585 | — | |||||||||||||||||||||||||||
Expiring 11/03/23 | TD | BRL | 392 | 75,000 | 77,770 | 2,770 | — | |||||||||||||||||||||||||||
Expiring 12/04/23 | BNP | BRL | 2,787 | 553,383 | 550,464 | — | (2,919 | ) | ||||||||||||||||||||||||||
Chilean Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | CLP | 110,245 | 122,700 | 122,802 | 102 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | CLP | 253,368 | 272,000 | 282,227 | 10,227 | — | |||||||||||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||||||||||
Expiring 11/16/23 | BOA | CNH | 12,196 | 1,677,000 | 1,663,245 | — | (13,755 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | GSI | CNH | 8,821 | 1,213,000 | 1,203,010 | — | (9,990 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | GSI | CNH | 8,535 | 1,168,000 | 1,164,016 | — | (3,984 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 10,963 | 1,505,000 | 1,495,139 | — | (9,861 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 6,929 | 956,000 | 944,978 | — | (11,022 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 3,972 | 547,000 | 541,678 | — | (5,322 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | HSBC | CNH | 1,637 | 223,909 | 223,262 | — | (647 | ) | ||||||||||||||||||||||||||
Expiring 11/16/23 | JPM | CNH | 1,239 | 169,000 | 169,006 | 6 | — | |||||||||||||||||||||||||||
Colombian Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | COP | 8,140,254 | 1,910,656 | 1,955,527 | 44,871 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | COP | 665,582 | 150,459 | 159,892 | 9,433 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | COP | 5,057,062 | 1,255,088 | 1,214,855 | — | (40,233 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | TD | COP | 5,417,383 | 1,328,116 | 1,301,414 | — | (26,702 | ) | ||||||||||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | DB | CZK | 15,765 | 673,000 | 677,940 | 4,940 | — | |||||||||||||||||||||||||||
Euro, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | EUR | 347 | 368,762 | 368,059 | — | (703 | ) | ||||||||||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | DB | HUF | 197,432 | 542,000 | 540,035 | — | (1,965 | ) | ||||||||||||||||||||||||||
Indian Rupee, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | INR | 126,266 | 1,513,000 | 1,513,924 | 924 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | INR | 34,848 | 417,000 | 417,822 | 822 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | INR | 42,634 | 512,614 | 511,178 | — | (1,436 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 139,397 | 1,674,000 | 1,671,371 | — | (2,629 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 125,606 | 1,507,446 | 1,506,017 | — | (1,429 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 79,620 | 954,000 | 954,646 | 646 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | INR | 143,514 | 1,719,000 | 1,720,730 | 1,730 | — | |||||||||||||||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | IDR | 2,285,688 | 144,159 | 143,372 | — | (787 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | IDR | 39,100,868 | 2,541,741 | 2,452,639 | — | (89,102 | ) |
See Notes to Financial Statements.
44
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | DB | ILS | 539 | $ | 142,185 | $ | 133,813 | $ | — | $ | (8,372 | ) | ||||||||||||||||||||||
Japanese Yen, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | JPY | 104,656 | 714,169 | 699,823 | — | (14,346 | ) | ||||||||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | MXN | 3,682 | 198,842 | 202,521 | 3,679 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | DB | MXN | 5,397 | 306,556 | 296,856 | — | (9,700 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | MXN | 4,369 | 235,000 | 240,316 | 5,316 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | MXN | 2,267 | 123,660 | 124,725 | 1,065 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SSB | MXN | 4,353 | 235,000 | 239,443 | 4,443 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | MXN | 9,068 | 497,000 | 498,818 | 1,818 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | MXN | 9,024 | 492,000 | 496,388 | 4,388 | — | |||||||||||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PEN | 6,250 | 1,676,222 | 1,623,587 | — | (52,635 | ) | ||||||||||||||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PHP | 5,745 | 101,500 | 101,177 | — | (323 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | PHP | 33,651 | 594,000 | 592,594 | — | (1,406 | ) | ||||||||||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | SGD | 1,335 | 980,000 | 977,065 | — | (2,935 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | SGD | 421 | 308,000 | 308,052 | 52 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | DB | SGD | 521 | 383,026 | 381,312 | — | (1,714 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | SGD | 870 | 636,000 | 636,806 | 806 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | SGD | 229 | 167,476 | 167,812 | 336 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | SGD | 1,623 | 1,196,000 | 1,188,152 | — | (7,848 | ) | ||||||||||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | ZAR | 2,723 | 142,351 | 145,443 | 3,092 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | ZAR | 10,602 | 564,001 | 566,333 | 2,332 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | TD | ZAR | 55,722 | 2,911,162 | 2,976,614 | 65,452 | — | |||||||||||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 405,710 | 302,696 | 300,720 | — | (1,976 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 311,441 | 232,000 | 230,846 | — | (1,154 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 222,343 | 164,619 | 164,805 | 186 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | KRW | 868,687 | 659,000 | 643,888 | — | (15,112 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | KRW | 686,414 | 510,000 | 508,783 | — | (1,217 | ) | ||||||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | THB | 34,779 | 971,000 | 972,061 | 1,061 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | THB | 9,139 | 248,000 | 255,424 | 7,424 | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 42,585,693 | $ | 42,423,513 | 187,769 | (349,949 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 45
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts: |
| |||||||||||||||||||||||||||||||||
Australian Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | JPM | AUD | 372 | $ | 239,334 | $ | 236,412 | $ | 2,922 | $ | — | |||||||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||||||||||
Expiring 11/03/23 | BNP | BRL | 2,787 | 555,445 | 552,506 | 2,939 | — | |||||||||||||||||||||||||||
Expiring 11/03/23 | CITI | BRL | 2,542 | 490,000 | 504,020 | — | (14,020 | ) | ||||||||||||||||||||||||||
Expiring 12/04/23 | CITI | BRL | 714 | 142,226 | 140,993 | 1,233 | — | |||||||||||||||||||||||||||
British Pound, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | GBP | 102 | 125,898 | 124,426 | 1,472 | — | |||||||||||||||||||||||||||
Chilean Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | GSI | CLP | 497,134 | 544,000 | 553,759 | — | (9,759 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | TD | CLP | 1,438,132 | 1,598,387 | 1,601,939 | — | (3,552 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | UAG | CLP | 542,559 | 599,000 | 604,357 | — | (5,357 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | UAG | CLP | 512,048 | 567,000 | 570,371 | — | (3,371 | ) | ||||||||||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||||||||||
Expiring 11/16/23 | MSI | CNH | 34,493 | 4,731,411 | 4,703,960 | 27,451 | — | |||||||||||||||||||||||||||
Colombian Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BNP | COP | 1,625,077 | 376,740 | 390,391 | — | (13,651 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | COP | 1,061,512 | 248,000 | 255,006 | — | (7,006 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | COP | 506,142 | 117,000 | 121,590 | — | (4,590 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | COP | 504,252 | 122,135 | 121,137 | 998 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | COP | 2,676,400 | 662,000 | 642,950 | 19,050 | — | |||||||||||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BARC | CZK | 37,510 | 1,619,292 | 1,613,086 | 6,206 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | CZK | 11,346 | 483,143 | 487,940 | — | (4,797 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | CZK | 5,725 | 246,134 | 246,205 | — | (71 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | CZK | 12,577 | 534,857 | 540,864 | — | (6,007 | ) | ||||||||||||||||||||||||||
Euro, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BNP | EUR | 4,703 | 5,011,623 | 4,995,000 | 16,623 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | EUR | 5,237 | 5,545,778 | 5,562,984 | — | (17,206 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | MSI | EUR | 2,997 | 3,196,980 | 3,183,419 | 13,561 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | SCB | EUR | 926 | 983,977 | 983,247 | 730 | — | |||||||||||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | HUF | 1,218,756 | 3,294,647 | 3,333,653 | — | (39,006 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | GSI | HUF | 197,172 | 527,000 | 539,322 | — | (12,322 | ) | ||||||||||||||||||||||||||
Indian Rupee, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | INR | 37,021 | 444,046 | 443,884 | 162 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | INR | 18,825 | 225,070 | 225,712 | — | (642 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | INR | 125,453 | 1,506,000 | 1,504,173 | 1,827 | — | |||||||||||||||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | IDR | 3,129,572 | 201,947 | 196,305 | 5,642 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | IDR | 1,424,088 | 91,016 | 89,327 | 1,689 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | IDR | 11,643,462 | 739,000 | 730,347 | 8,653 | — |
See Notes to Financial Statements.
46
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | ILS | 2,741 | $ | 719,000 | $ | 680,030 | $ | 38,970 | $ | — | |||||||||||||||||||||||
Expiring 12/20/23 | BARC | ILS | 1,494 | 393,196 | 370,750 | 22,446 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | ILS | 2,537 | 662,000 | 629,490 | 32,510 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | ILS | 497 | 122,922 | 123,427 | — | (505 | ) | ||||||||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | MXN | 33,041 | 1,852,135 | 1,817,490 | 34,645 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | MXN | 10,803 | 606,000 | 594,237 | 11,763 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | MXN | 2,249 | 122,140 | 123,712 | — | (1,572 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SSB | MXN | 10,679 | 613,000 | 587,424 | 25,576 | — | |||||||||||||||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | TWD | 44,402 | 1,375,000 | 1,371,908 | 3,092 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | TWD | 8,574 | 266,378 | 264,911 | 1,467 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | GSI | TWD | 29,032 | 897,000 | 897,020 | — | (20 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | TWD | 45,948 | 1,437,000 | 1,419,694 | 17,306 | — | |||||||||||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | BARC | PEN | 3,299 | 875,020 | 857,143 | 17,877 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 2,507 | 657,300 | 651,371 | 5,929 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 2,461 | 641,424 | 639,323 | 2,101 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | BOA | PEN | 1,367 | 354,576 | 355,037 | — | (461 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PEN | 2,951 | 762,091 | 766,650 | — | (4,559 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PEN | 716 | 184,654 | 185,931 | — | (1,277 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | PEN | 1,325 | 341,909 | 344,265 | — | (2,356 | ) | ||||||||||||||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | PHP | 68,904 | 1,213,518 | 1,213,390 | 128 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | PHP | 14,111 | 248,000 | 248,498 | — | (498 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | PHP | 87,406 | 1,533,000 | 1,539,223 | — | (6,223 | ) | ||||||||||||||||||||||||||
Polish Zloty, | ||||||||||||||||||||||||||||||||||
Expiring 01/19/24 | BARC | PLN | 2,162 | 494,000 | 511,857 | — | (17,857 | ) | ||||||||||||||||||||||||||
Expiring 01/19/24 | HSBC | PLN | 1,730 | 409,871 | 409,580 | 291 | — | |||||||||||||||||||||||||||
Expiring 01/19/24 | UAG | PLN | 11,840 | 2,771,261 | 2,803,610 | — | (32,349 | ) | ||||||||||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | HSBC | SGD | 475 | 348,139 | 347,754 | 385 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | JPM | SGD | 10,329 | 7,621,657 | 7,561,070 | 60,587 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | SGD | 696 | 510,000 | 509,369 | 631 | — | |||||||||||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | DB | ZAR | 2,706 | 142,647 | 144,561 | — | (1,914 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | ZAR | 1,601 | 81,977 | 85,524 | — | (3,547 | ) | ||||||||||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 737,771 | 558,000 | 546,850 | 11,150 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | CITI | KRW | 413,967 | 308,631 | 306,840 | 1,791 | — | |||||||||||||||||||||||||||
Expiring 12/20/23 | DB | KRW | 336,928 | 249,000 | 249,738 | — | (738 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | SCB | KRW | 5,335,133 | 4,044,066 | 3,954,504 | 89,562 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 47
Schedule of Investments (continued)
as of October 31, 2023
Forward foreign currency exchange contracts outstanding at October 31, 2023 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||||||||||||
OTC Forward Foreign Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||||||||||
Expiring 12/20/23 | GSI | THB | 17,989 | $ | 507,125 | $ | 502,775 | $ | 4,350 | $ | — | |||||||||||||||||||||||
Expiring 12/20/23 | JPM | THB | 27,248 | 754,999 | 761,569 | — | (6,570 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | THB | 13,513 | 372,000 | 377,678 | — | (5,678 | ) | ||||||||||||||||||||||||||
Expiring 12/20/23 | MSI | THB | 10,244 | 282,000 | 286,324 | — | (4,324 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 71,101,722 | $ | 70,839,812 | 493,715 | (231,805 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 681,484 | $ | (581,754 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
Cross currency exchange contracts outstanding at October 31, 2023:
Settlement | Type | Notional | In Exchange For (000) | Unrealized Appreciation | Unrealized Depreciation | Counterparty | ||||||||||||||||||||||||||||||||||||
OTC Cross Currency Exchange Contracts: | ||||||||||||||||||||||||||||||||||||||||||
01/19/24 | Buy | EUR | 478 | PLN 2,181 | $ | — | $ | (8,248 | ) | BOA | ||||||||||||||||||||||||||||||||
01/19/24 | Buy | EUR | 510 | PLN 2,292 | — | (1,134 | ) | JPM | ||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||
$ | — | $ | (9,382 | ) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
Credit default swap agreement outstanding at October 31, 2023:
Reference Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||||||||
Centrally Cleared Credit Default Swap Agreement on credit indices - Buy Protection(1): |
| |||||||||||||||||||||||||||||||||||||||
CDX.EM.40.V1 | 12/20/28 | 1.000%(Q) | 10,460 | $ | 527,204 | $ | 559,773 | $ | 32,569 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases.
(1) | If the Fund is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make 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 Notes to Financial Statements.
48
(2) | If the Fund is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund 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. |
(3) | Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
(4) | Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements where the Fund is the seller of protection as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front 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 of risk of default or other credit event occurring as defined under the terms of the agreement. |
Interest rate swap agreements outstanding at October 31, 2023:
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements: | ||||||||||||||||||||||||||||||||||||||||||||||||||
BRL | 7,132 | 01/02/26 | 10.461%(T) | 1 Day BROIS(2)(T)/0.047% | $ | — | $ | (16,827 | ) | $ | (16,827 | ) | ||||||||||||||||||||||||||||||||||||||
BRL | 7,834 | 01/02/26 | 10.559%(T) | 1 Day BROIS(2)(T)/0.047% | — | (15,487 | ) | (15,487 | ) | |||||||||||||||||||||||||||||||||||||||||
BRL | 2,676 | 01/04/27 | 10.000%(T) | 1 Day BROIS(2)(T)/0.047% | — | (21,394 | ) | (21,394 | ) | |||||||||||||||||||||||||||||||||||||||||
BRL | 5,309 | 01/04/27 | 10.730%(T) | 1 Day BROIS(2)(T)/0.047% | — | (14,572 | ) | (14,572 | ) | |||||||||||||||||||||||||||||||||||||||||
BRL | 10,979 | 01/04/27 | 10.750%(T) | 1 Day BROIS(2)(T)/0.047% | �� | — | (28,497 | ) | (28,497 | ) | ||||||||||||||||||||||||||||||||||||||||
BRL | 342 | 01/04/27 | 11.120%(T) | 1 Day BROIS(2)(T)/0.047% | 2,265 | (673 | ) | (2,938 | ) | |||||||||||||||||||||||||||||||||||||||||
BRL | 7,258 | 01/04/27 | 12.640%(T) | 1 Day BROIS(1)(T)/0.047% | (44,025 | ) | (60,160 | ) | (16,135 | ) | ||||||||||||||||||||||||||||||||||||||||
BRL | 1,592 | 01/02/29 | 11.420%(T) | 1 Day BROIS(2)(T)/0.047% | — | (190 | ) | (190 | ) | |||||||||||||||||||||||||||||||||||||||||
CLP | 91,414 | 09/20/33 | 4.785%(S) | 1 Day CLOIS(1)(S)/9.000% | 7,161 | 10,041 | 2,880 | |||||||||||||||||||||||||||||||||||||||||||
CNH | 4,647 | 12/15/27 | 2.680%(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | — | 8,786 | 8,786 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 49
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination | Fixed Rate | Floating Rate | Value at | Value at October 31, 2023 | Unrealized Appreciation | ||||||||||||||||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||||||||||||||||
CNH | 19,155 | 09/20/28 | 2.420 | %(Q) | 7 Day China Fixing Repo Rates(2)(Q)/2.500% | $ | 7,758 | $ | 2,248 | $ | (5,510 | ) | ||||||||||||||||||||||||||||||||||||||
COP | 5,397,490 | 12/20/25 | 8.755 | %(Q) | 1 Day COOIS(1)(Q)/12.230% | — | 17,355 | 17,355 | ||||||||||||||||||||||||||||||||||||||||||
COP | 5,238,410 | 12/20/25 | 9.702 | %(Q) | 1 Day COOIS(1)(Q)/12.230% | 34 | (4,243 | ) | (4,277 | ) | ||||||||||||||||||||||||||||||||||||||||
COP | 6,795,160 | 12/20/25 | 9.750 | %(Q) | 1 Day COOIS(1)(Q)/12.230% | (1,137 | ) | (6,890 | ) | (5,753 | ) | |||||||||||||||||||||||||||||||||||||||
COP | 2,511,025 | 03/15/28 | 9.098 | %(Q) | 1 Day COOIS(1)(Q)/12.230% | 12,647 | (52 | ) | (12,699 | ) | ||||||||||||||||||||||||||||||||||||||||
COP | 835,888 | 09/20/28 | 7.440 | %(Q) | 1 Day COOIS(2)(Q)/12.230% | (1,921 | ) | (12,589 | ) | (10,668 | ) | |||||||||||||||||||||||||||||||||||||||
COP | 2,159,000 | 12/20/28 | 9.447 | %(Q) | 1 Day COOIS(1)(Q)/12.230% | — | (12,849 | ) | (12,849 | ) | ||||||||||||||||||||||||||||||||||||||||
CZK | 19,526 | 06/21/25 | 5.919 | %(A) | 6 Month PRIBOR(1)(S)/6.880% | 147 | (4,595 | ) | (4,742 | ) | ||||||||||||||||||||||||||||||||||||||||
CZK | 14,410 | 12/20/28 | 4.385 | %(A) | 6 Month PRIBOR(2)(S)/6.880% | — | 566 | 566 | ||||||||||||||||||||||||||||||||||||||||||
CZK | 7,500 | 09/20/33 | 4.225 | %(A) | 6 Month PRIBOR(2)(S)/6.880% | — | (8,349 | ) | (8,349 | ) | ||||||||||||||||||||||||||||||||||||||||
CZK | 7,214 | 12/20/33 | 4.290 | %(A) | 6 Month PRIBOR(2)(S)/6.880% | — | (4,228 | ) | (4,228 | ) | ||||||||||||||||||||||||||||||||||||||||
HUF | 575,500 | 12/20/25 | 7.740 | %(A) | 6 Month BUBOR(1)(S)/11.180% | — | 14,037 | 14,037 | ||||||||||||||||||||||||||||||||||||||||||
HUF | 300,000 | 12/20/28 | 7.410 | %(A) | 6 Month BUBOR(2)(S)/11.180% | — | (1,909 | ) | (1,909 | ) | ||||||||||||||||||||||||||||||||||||||||
HUF | 145,770 | 12/20/33 | 7.420 | %(A) | 6 Month BUBOR(2)(S)/11.180% | — | (243 | ) | (243 | ) |
See Notes to Financial Statements.
50
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
KRW | 400,000 | 09/21/27 | 3.639%(Q) | 3 Month KWCDC(1)(Q)/3.820% | $ | (3,603 | ) | $ | 4,727 | $ | 8,330 | |||||||||||||||||||||||||||||||||||||||||||||
KRW | 870,000 | 12/21/27 | 4.197%(Q) | 3 Month KWCDC(2)(Q)/3.820% | 31,070 | 3,291 | (27,779 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
KRW | 600,000 | 03/15/28 | 2.965%(Q) | 3 Month KWCDC(2)(Q)/3.820% | — | (20,425 | ) | (20,425 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
KRW | 2,028,148 | 03/15/28 | 3.100%(Q) | 3 Month KWCDC(1)(Q)/3.820% | 56,772 | 60,575 | 3,803 | |||||||||||||||||||||||||||||||||||||||||||||||||
KRW | 1,470,750 | 09/20/28 | 3.435%(Q) | 3 Month KWCDC(2)(Q)/3.820% | (6,814 | ) | (31,998 | ) | (25,184 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
MXN | 13,205 | 12/15/27 | 8.950%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | 6,037 | (22,706 | ) | (28,743 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
MXN | 3,279 | 03/08/28 | 8.475%(M) | 28 Day Mexican Interbank Rate(1)(M)/11.503% | 6,047 | 8,716 | 2,669 | |||||||||||||||||||||||||||||||||||||||||||||||||
MXN | 13,610 | 09/13/28 | 8.658%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (8,678 | ) | (32,569 | ) | (23,891 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
MXN | 15,680 | 12/13/28 | 8.535%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (37,901 | ) | (37,901 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
MXN | 20,680 | 12/13/28 | 8.570%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | (10,110 | ) | (48,422 | ) | (38,312 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
MXN | 10,160 | 09/07/33 | 7.872%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (64,614 | ) | (64,614 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
MXN | 9,570 | 09/07/33 | 7.970%(M) | 28 Day Mexican Interbank Rate(2)(M)/11.503% | — | (57,525 | ) | (57,525 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 51
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 6,830 | 06/21/25 | 6.021%(A) | 6 Month WIBOR(1)(S)/5.560% | $ | 4,201 | $ | (17,620 | ) | $ | (21,821 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
PLN | 1,204 | 06/15/27 | 4.970%(A) | 6 Month WIBOR(2)(S)/5.560% | (13,160 | ) | 89 | 13,249 | ||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 2,826 | 09/21/27 | 5.487%(A) | 6 Month WIBOR(1)(S)/5.560% | — | (18,601 | ) | (18,601 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 5,393 | 09/21/27 | 6.547%(A) | 6 Month WIBOR(1)(S)/5.560% | 1,194 | (83,344 | ) | (84,538 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 1,175 | 10/06/27 | 6.826%(A) | 6 Month WIBOR(2)(S)/5.560% | — | 21,043 | 21,043 | |||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 460 | 10/25/27 | 7.900%(A) | 6 Month WIBOR(2)(S)/5.560% | — | 12,405 | 12,405 | |||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 18 | 12/21/27 | 6.845%(A) | 6 Month WIBOR(2)(S)/5.560% | 227 | 473 | 246 | |||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 3,569 | 09/20/28 | 4.640%(A) | 6 Month WIBOR(1)(S)/5.560% | (7,773 | ) | 2,868 | 10,641 | ||||||||||||||||||||||||||||||||||||||||||||||||||
PLN | 14,410 | 12/20/28 | 4.087%(A) | 6 Month WIBOR(2)(S)/5.560% | (89,501 | ) | (83,757 | ) | 5,744 | |||||||||||||||||||||||||||||||||||||||||||||||||
THB | 44,802 | 12/20/28 | 3.080%(Q) | 1 Day THOR(1)(Q)/2.481% | — | (13,337 | ) | (13,337 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 52,851 | 09/21/27 | 7.490%(Q) | 3 Month JIBAR(1)(Q)/8.358% | 49,954 | 86,385 | 36,431 | |||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 26,104 | 09/21/27 | 7.995%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (3,965 | ) | (18,607 | ) | (14,642 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 10,122 | 12/21/27 | 8.860%(Q) | 3 Month JIBAR(1)(Q)/8.358% | (2,875 | ) | (8,224 | ) | (5,349 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 14,361 | 03/15/28 | 7.766%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (40,291 | ) | (20,860 | ) | 19,431 |
See Notes to Financial Statements.
52
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at October 31, 2023 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 17,762 | 06/21/28 | 8.455%(Q) | 3 Month JIBAR(1)(Q)/8.358% | $ | (1,774 | ) | $ | 3,544 | $ | 5,318 | |||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 15,630 | 09/20/28 | 8.415%(Q) | 3 Month JIBAR(2)(Q)/8.358% | — | (6,722 | ) | (6,722 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 11,504 | 09/20/28 | 8.623%(Q) | 3 Month JIBAR(1)(Q)/8.358% | — | (283 | ) | (283 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 25,326 | 12/20/28 | 8.897%(Q) | 3 Month JIBAR(1)(Q)/8.358% | (2,474 | ) | (10,800 | ) | (8,326 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 3,548 | 12/20/28 | 9.085%(Q) | 3 Month JIBAR(1)(Q)/8.358% | — | (2,942 | ) | (2,942 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
ZAR | 5,396 | 11/10/32 | 9.160%(Q) | 3 Month JIBAR(2)(Q)/8.358% | (18 | ) | (8,368 | ) | (8,350 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | (52,605 | ) | $ | (566,223 | ) | $ | (513,618 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Fair Value | Upfront Premiums Paid(Received) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||||||||||||||||||||||||||
OTC Interest Rate Swap Agreements: | ||||||||||||||||||||||||||||||||||||||||||||||
MYR | 10,158 | 12/20/25 | 3.898%(Q) | 3 Month KLIBOR(1)(Q)/3.650% | $ | (3,403 | ) | $ | — | $ | (3,403 | ) | GSI | |||||||||||||||||||||||||||||||||
MYR | 5,300 | 06/21/28 | 3.442%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (23,795 | ) | — | (23,795 | ) | BOA | ||||||||||||||||||||||||||||||||||||
MYR | 4,300 | 06/21/28 | 3.598%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (13,034 | ) | — | (13,034 | ) | GSI | ||||||||||||||||||||||||||||||||||||
MYR | 4,495 | 09/20/28 | 3.629%(Q) | 3 Month KLIBOR(2)(Q)/3.650% | (13,544 | ) | — | (13,544 | ) | CITI | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
$ | (53,776 | ) | $ | — | $ | (53,776 | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
(1) | The Fund pays the fixed rate and receives the floating rate. |
(2) | The Fund pays the floating rate and receives the fixed rate. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 53
Schedule of Investments (continued)
as of October 31, 2023
Interest rate swap agreements outstanding at October 31, 2023 (continued):
Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:
Premiums Paid | Premiums Received | Unrealized Appreciation | Unrealized Depreciation | |||||
| ||||||||
OTC Swap Agreements | $— | $— | $— | $(53,776) | ||||
|
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||||||||||||||||||||||
JPS | $ | 1,677,000 | $ | — | ||||||||||||||||||||
|
|
|
|
Fair Value Measurements:
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—unadjusted quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of October 31, 2023 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Long-Term Investments | ||||||||||||
Corporate Bonds | ||||||||||||
Azerbaijan | $ | — | $ | 780,644 | $— | |||||||
Bahrain | — | 518,125 | — | |||||||||
Brazil | — | 1,238,003 | — | |||||||||
Chile | — | 2,043,686 | — | |||||||||
China | — | 952,637 | — | |||||||||
Colombia | — | 1,557,543 | — | |||||||||
Costa Rica | — | 185,000 | — | |||||||||
Guatemala | — | 657,344 | — | |||||||||
Hungary | — | 418,421 | — | |||||||||
India | — | 3,454,984 | — | |||||||||
Indonesia | — | 4,818,769 | — | |||||||||
Israel | — | 1,169,521 | — | |||||||||
Jamaica | — | 130,186 | — | |||||||||
Kazakhstan | — | 1,849,300 | — |
See Notes to Financial Statements.
54
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Assets (continued) | ||||||||||||
Long-Term Investments (continued) | ||||||||||||
Corporate Bonds (continued) | ||||||||||||
Kuwait | $ | — | $ | 450,579 | $— | |||||||
Macau | — | 519,288 | — | |||||||||
Malaysia | — | 2,150,866 | — | |||||||||
Mexico | — | 9,914,892 | — | |||||||||
Panama | — | 731,265 | — | |||||||||
Peru | — | 1,414,286 | — | |||||||||
Philippines | — | 139,704 | — | |||||||||
Poland | — | 574,183 | — | |||||||||
Qatar | — | 935,562 | — | |||||||||
Saudi Arabia | — | 1,436,962 | — | |||||||||
South Africa | — | 4,308,360 | — | |||||||||
Thailand | — | 344,850 | — | |||||||||
Trinidad & Tobago | — | 207,038 | — | |||||||||
Turkey | — | 174,748 | — | |||||||||
Ukraine | — | 236,452 | — | |||||||||
United Arab Emirates | — | 4,198,506 | — | |||||||||
Venezuela | — | 213,402 | — | |||||||||
Vietnam | — | 450,260 | — | |||||||||
Sovereign Bonds | ||||||||||||
Angola | — | 4,261,602 | — | |||||||||
Argentina | — | 2,125,404 | — | |||||||||
Bahrain | — | 3,247,600 | — | |||||||||
Brazil | — | 6,376,927 | — | |||||||||
Cameroon | — | 383,752 | — | |||||||||
Chile | — | 1,068,092 | — | |||||||||
Colombia | — | 6,541,072 | — | |||||||||
Congo (Republic) | — | 179,228 | — | |||||||||
Costa Rica | — | 1,619,620 | — | |||||||||
Dominican Republic | — | 7,963,114 | — | |||||||||
Ecuador | — | 1,980,570 | — | |||||||||
Egypt | — | 4,961,620 | — | |||||||||
El Salvador | — | 1,482,034 | — | |||||||||
Gabon | — | 1,851,000 | — | |||||||||
Ghana | — | 2,272,742 | — | |||||||||
Guatemala | — | 1,567,470 | — | |||||||||
Honduras | — | 371,684 | — | |||||||||
Hungary | — | 5,060,391 | — | |||||||||
India | — | 673,056 | — | |||||||||
Indonesia | — | 6,099,317 | — | |||||||||
Iraq | — | 796,720 | — | |||||||||
Ivory Coast | — | 2,425,747 | — | |||||||||
Jamaica | — | 1,496,686 | — | |||||||||
Jordan | — | 1,587,169 | — | |||||||||
Kazakhstan | — | 196,000 | — | |||||||||
Lebanon | — | 199,370 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 55
Schedule of Investments (continued)
as of October 31, 2023
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Assets (continued) | ||||||||||||
Long-Term Investments (continued) | ||||||||||||
Sovereign Bonds (continued) | ||||||||||||
Mexico | $ | — | $ | 4,977,102 | $— | |||||||
Mongolia | — | 599,044 | — | |||||||||
Morocco | — | 2,101,799 | — | |||||||||
Mozambique | — | 803,171 | — | |||||||||
Nigeria | — | 2,361,937 | — | |||||||||
Oman | — | 6,134,072 | — | |||||||||
Pakistan | — | 2,420,615 | — | |||||||||
Panama | — | 2,532,440 | — | |||||||||
Papua New Guinea | — | 383,914 | — | |||||||||
Paraguay | — | 1,106,300 | — | |||||||||
Peru | — | 3,926,729 | — | |||||||||
Philippines | — | 3,820,793 | — | |||||||||
Poland | — | 1,194,673 | — | |||||||||
Qatar | — | 5,128,586 | — | |||||||||
Romania | — | 6,475,759 | — | |||||||||
Russia | — | 263,733 | — | |||||||||
Saudi Arabia | — | 4,811,600 | — | |||||||||
Senegal | — | 1,615,243 | — | |||||||||
Serbia | — | 3,099,791 | — | |||||||||
South Africa | — | 3,231,975 | — | |||||||||
Sri Lanka | — | 2,262,572 | — | |||||||||
Turkey | — | 8,504,895 | — | |||||||||
Ukraine | — | 2,483,113 | — | |||||||||
United Arab Emirates | — | 2,991,487 | — | |||||||||
Uruguay | — | 3,192,283 | — | |||||||||
Venezuela | — | 1,029,270 | — | |||||||||
Zambia | — | 1,455,581 | — | |||||||||
U.S. Treasury Obligation | — | 262,154 | — | |||||||||
Short-Term Investments | ||||||||||||
Affiliated Mutual Funds | 3,620,819 | — | — | �� | ||||||||
U.S. Treasury Obligation | — | 3,456,255 | — | |||||||||
Options Purchased | — | 28,097 | — | |||||||||
|
|
|
| |||||||||
Total | $ | 3,620,819 | $ | 197,618,336 | $— | |||||||
|
|
|
|
|
| |||||||
Liabilities | ||||||||||||
Options Written | $ | — | $ | (521,748 | ) | $— | ||||||
|
|
|
|
|
| |||||||
Other Financial Instruments* | ||||||||||||
Assets | ||||||||||||
Futures Contracts | $ | 174,530 | $ | — | $— | |||||||
OTC Forward Foreign Currency Exchange Contracts | — | 681,484 | — |
See Notes to Financial Statements.
56
Level 1 | Level 2 | Level 3 | ||||||||||
Other Financial Instruments* (continued) | ||||||||||||
Assets (continued) | ||||||||||||
Centrally Cleared Credit Default Swap Agreement | $ | — | $ | 32,569 | $— | |||||||
Centrally Cleared Interest Rate Swap Agreements | — | 182,934 | — | |||||||||
|
|
|
| |||||||||
Total | $ | 174,530 | $ | 896,987 | $— | |||||||
|
|
|
|
|
| |||||||
Liabilities | ||||||||||||
Futures Contracts | $ | (340,432 | ) | $ | — | $— | ||||||
OTC Forward Foreign Currency Exchange Contracts | — | (581,754 | ) | — | ||||||||
OTC Cross Currency Exchange Contracts | — | (9,382 | ) | — | ||||||||
Centrally Cleared Interest Rate Swap Agreements | — | (696,552 | ) | — | ||||||||
OTC Interest Rate Swap Agreements. | — | (53,776 | ) | — | ||||||||
|
|
|
| |||||||||
Total | $ | (340,432 | ) | $ | (1,341,464 | ) | $— | |||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value. |
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of October 31, 2023 were as follows:
Sovereign Bonds | 71.2 | % | ||
Oil & Gas | 8.5 | |||
Electric | 4.0 | |||
Engineering & Construction | 1.8 | |||
U.S. Treasury Obligations | 1.8 | |||
Affiliated Mutual Funds (0.7% represents investments purchased with collateral from securities on loan) | 1.8 | |||
Pipelines | 1.5 | |||
Mining | 1.4 | |||
Commercial Services | 1.2 | |||
Banks | 0.9 | |||
Diversified Financial Services | 0.5 | |||
Transportation | 0.5 | |||
Chemicals | 0.5 | |||
Telecommunications | 0.4 | |||
Lodging | 0.4 | |||
Internet | 0.2 | |||
Iron/Steel | 0.2 | |||
Building Materials | 0.2 | |||
Energy-Alternate Sources | 0.2 |
Computers | 0.2 | % | ||
Investment Companies | 0.1 | |||
Retail | 0.1 | |||
Entertainment | 0.1 | |||
Real Estate | 0.1 | |||
Auto Manufacturers | 0.1 | |||
Media | 0.1 | |||
Gas | 0.1 | |||
Foods | 0.1 | |||
Beverages | 0.1 | |||
Forest Products & Paper | 0.1 | |||
Options Purchased | 0.0 | * | ||
|
| |||
98.4 | ||||
Options Written | (0.3 | ) | ||
Other assets in excess of liabilities | 1.9 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than 0.05% |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 57
Schedule of Investments (continued)
as of October 31, 2023
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit risk, foreign exchange risk and interest rate risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of October 31, 2023 as presented in the Statement of Assets and Liabilities:
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Credit contracts | Due from/to broker-variation margin swaps | $ | 32,569* | — | $ | — | ||||||
Foreign exchange contracts | Unaffiliated investments | 28,097 | Options written outstanding, at value | 521,748 | ||||||||
Foreign exchange contracts | — | — | Unrealized depreciation on OTC cross currency exchange contracts | 9,382 | ||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | 681,484 | Unrealized depreciation on OTC forward foreign currency exchange contracts | 581,754 | ||||||||
Interest rate contracts | Due from/to broker-variation margin futures | 174,530 | * | Due from/to broker-variation margin futures | 340,432 | * | ||||||
Interest rate contracts | Due from/to broker-variation margin swaps | 182,934 | * | Due from/to broker-variation margin swaps | 696,552 | * | ||||||
Interest rate contracts | — | — | Unrealized depreciation on OTC swap agreements | 53,776 | ||||||||
|
|
|
| |||||||||
$ | 1,099,614 | $ | 2,203,644 | |||||||||
|
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
See Notes to Financial Statements.
58
The effects of derivative instruments on the Statement of Operations for the year ended October 31, 2023 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options Purchased(1) | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | |||||||||||||||||||
Credit contracts | $ | (42,180 | ) | $ | (25,567 | ) | $ | — | $ | — | $ | (341,349 | ) | |||||||||||
Foreign exchange contracts | (451,370 | ) | 351,084 | — | �� | 2,187,019 | — | |||||||||||||||||
Interest rate contracts | — | — | (903,022 | ) | — | 16,639 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | (493,550 | ) | $ | 325,517 | $ | (903,022 | ) | $ | 2,187,019 | $ | (324,710 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options Purchased(2) | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | |||||||||||||||||||
Credit contracts | $ | 23,464 | $ | (9,488 | ) | $ | — | $ | — | $ | 32,184 | |||||||||||||
Foreign exchange contracts | (132,901 | ) | 130,997 | — | (975,719 | ) | — | |||||||||||||||||
Interest rate contracts | — | — | 157,512 | — | (584,844 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | (109,437 | ) | $ | 121,509 | $ | 157,512 | $ | (975,719 | ) | $ | (552,660 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
For the year ended October 31, 2023, the Fund’s average volume of derivative activities is as follows:
Derivative Contract Type | Average Volume of Derivative Activities* | |||
Options Purchased (1) | $ 94,402 | |||
Options Written (2) | 15,798,728 | |||
Futures Contracts - Long Positions (2) | 30,382,203 | |||
Futures Contracts - Short Positions (2) | 14,539,055 | |||
Forward Foreign Currency Exchange Contracts - Purchased (3) | 47,113,737 | |||
Forward Foreign Currency Exchange Contracts - Sold (3) | 72,813,661 | |||
Cross Currency Exchange Contracts (4) | 1,608,111 | |||
Interest Rate Swap Agreements (2) | 39,178,199 | |||
Credit Default Swap Agreements - Buy Protection (2) | 6,631,000 | |||
Credit Default Swap Agreements - Sell Protection (2) | 2,974,968 |
* | Average volume is based on average quarter end balances as noted for the year ended October 31, 2023. |
(1) | Cost. |
(2) | Notional Amount in USD. |
(3) | Value at Settlement Date. |
(4) | Value at Trade Date. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 59
Schedule of Investments (continued)
as of October 31, 2023
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Fund invested in OTC derivatives and entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives and financial instruments/transactions where the legal right to set-off exists is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(2) | Net Amount | |||
Securities on Loan | $1,351,138 | $(1,351,138) | $— |
Offsetting of OTC derivative assets and liabilities:
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts of Recognized Liabilities(1) | Net Amounts of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(2) | Net Amount | ||||||||||||||||||||
BARC | $ | 165,015 | $ | (17,857 | ) | $ | 147,158 | $ | (147,158 | ) | $ | — | |||||||||||||
BNP | 19,562 | (16,570 | ) | 2,992 | — | 2,992 | |||||||||||||||||||
BOA | 22,600 | (60,790 | ) | (38,190 | ) | — | (38,190 | ) | |||||||||||||||||
CITI | 82,444 | (96,591 | ) | (14,147 | ) | — | (14,147 | ) | |||||||||||||||||
DB | 4,940 | (33,128 | ) | (28,188 | ) | — | (28,188 | ) | |||||||||||||||||
GSI | 11,946 | (107,733 | ) | (95,787 | ) | — | (95,787 | ) | |||||||||||||||||
HSBC | 24,921 | (110,737 | ) | (85,816 | ) | — | (85,816 | ) | |||||||||||||||||
JPM | 82,758 | (28,315 | ) | 54,443 | — | 54,443 | |||||||||||||||||||
MSI | 89,798 | (605,964 | ) | (516,166 | ) | 362,117 | (154,049 | ) | |||||||||||||||||
SCB | 90,923 | (17,644 | ) | 73,279 | — | 73,279 | |||||||||||||||||||
SSB | 30,019 | — | 30,019 | (30,019 | ) | — | |||||||||||||||||||
TD | 84,655 | (30,254 | ) | 54,401 | — | 54,401 | |||||||||||||||||||
UAG | — | (41,077 | ) | (41,077 | ) | — | (41,077 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
$ | 709,581 | $ | (1,166,660 | ) | $ | (457,079 | ) | $ | 184,940 | $ | (272,139 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities. |
(2) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and the Fund’s OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
60
Statement of Assets and Liabilities
as of October 31, 2023
Assets | ||||
Investments at value, including securities on loan of $1,351,138: | ||||
Unaffiliated investments (cost $233,131,078) | $ | 197,618,336 | ||
Affiliated investments (cost $3,620,617) | 3,620,819 | |||
Foreign currency, at value (cost $52,797) | 52,741 | |||
Cash segregated for counterparty - OTC | 99,000 | |||
Dividends and interest receivable | 3,046,074 | |||
Deposit with broker for centrally cleared/exchange-traded derivatives | 1,677,000 | |||
Receivable for investments sold | 927,686 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 681,484 | |||
Receivable for Fund shares sold | 419,638 | |||
Prepaid expenses and other assets | 2,339 | |||
|
| |||
Total Assets | 208,145,117 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 1,375,852 | |||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 581,754 | |||
Options written outstanding, at value (premiums received $590,503) | 521,748 | |||
Payable for Fund shares purchased | 370,960 | |||
Payable for investments purchased | 366,443 | |||
Accrued expenses and other liabilities | 106,952 | |||
Management fee payable | 62,018 | |||
Unrealized depreciation on OTC swap agreements | 53,776 | |||
Due to broker—variation margin futures | 42,668 | |||
Due to broker—variation margin swaps | 11,221 | |||
Unrealized depreciation on OTC cross currency exchange contracts | 9,382 | |||
Dividends payable | 8,619 | |||
Directors’ fees payable | 1,068 | |||
Affiliated transfer agent fee payable | 397 | |||
Distribution fee payable | 26 | |||
|
| |||
Total Liabilities | 3,512,884 | |||
|
| |||
Net Assets | $ | 204,632,233 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 319 | ||
Paid-in capital in excess of par | 265,419,981 | |||
Total distributable earnings (loss) | (60,788,067 | ) | ||
|
| |||
Net assets, October 31, 2023 | $ | 204,632,233 | ||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 61
Statement of Assets and Liabilities
as of October 31, 2023
Class A | ||||||
Net asset value, offering price and redemption price per share, ($92,539 ÷ 14,439 shares of beneficial interest issued and outstanding) | $ | 6.41 | ||||
Maximum sales charge (3.25% of offering price) | 0.22 | |||||
|
| |||||
Maximum offering price to public | $ | 6.63 | ||||
|
| |||||
Class C | ||||||
Net asset value, offering price and redemption price per share, ($8,548 ÷ 1,333 shares of beneficial interest issued and outstanding) | $ | 6.41 | ||||
|
| |||||
Class Z | ||||||
Net asset value, offering price and redemption price per share, ($8,792,584 ÷ 1,370,517 shares of beneficial interest issued and outstanding) | $ | 6.42 | ||||
|
| |||||
Class R6 | ||||||
Net asset value, offering price and redemption price per share, ($195,738,562 ÷ 30,531,514 shares of beneficial interest issued and outstanding) | $ | 6.41 | ||||
|
|
See Notes to Financial Statements.
62
Statement of Operations
Year Ended October 31, 2023
Net Investment Income (Loss) | ||||
Income | ||||
Interest income | $ | 11,861,796 | ||
Affiliated dividend income | 192,154 | |||
Unaffiliated dividend income | 77,498 | |||
Income from securities lending, net (including affiliated income of $13,266) | 13,276 | |||
|
| |||
Total income | 12,144,724 | |||
|
| |||
Expenses | ||||
Management fee | 1,245,770 | |||
Distribution fee(a) | 294 | |||
Audit fee | 53,000 | |||
Custodian and accounting fees | 43,531 | |||
Professional fees | 43,442 | |||
Shareholders’ reports | 37,908 | |||
Registration fees(a) | 37,718 | |||
Transfer agent’s fees and expenses (including affiliated expense of $2,331)(a) | 20,822 | |||
Directors’ fees | 12,351 | |||
SEC registration fees | 3,095 | |||
Miscellaneous | 48,908 | |||
|
| |||
Total expenses | 1,546,839 | |||
Less: Fee waiver and/or expense reimbursement(a) | (277,949 | ) | ||
|
| |||
Net expenses | 1,268,890 | |||
|
| |||
Net investment income (loss) | 10,875,834 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $869) | (10,965,677 | ) | ||
Futures transactions | (903,022 | ) | ||
Forward and cross currency contract transactions | 2,187,019 | |||
Options written transactions | 325,517 | |||
Swap agreement transactions | (324,710 | ) | ||
Foreign currency transactions | (554,798 | ) | ||
|
| |||
(10,235,671 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $325) | 10,875,690 | |||
Futures | 157,512 | |||
Forward and cross currency contracts | (975,719 | ) | ||
Options written | 121,509 | |||
Swap agreements | (552,660 | ) | ||
Foreign currencies | 111,992 | |||
|
| |||
9,738,324 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (497,347 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 10,378,487 | ||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 63
Statement of Operations
Year Ended October 31, 2023
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 207 | 87 | — | — | ||||||||||||
Registration fees | 5,790 | 5,290 | 11,847 | 14,791 | ||||||||||||
Transfer agent’s fees and expenses | 585 | 59 | 18,474 | 1,704 | ||||||||||||
Fee waiver and/or expense reimbursement | (6,352) | (5,344) | (32,658) | (233,595) |
See Notes to Financial Statements.
64
Statements of Changes in Net Assets
Year Ended October 31, | ||||||||
2023 | 2022 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 10,875,834 | $ | 7,190,721 | ||||
Net realized gain (loss) on investment and foreign currency transactions | (10,235,671 | ) | (7,031,392 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 9,738,324 | (44,402,458 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 10,378,487 | (44,243,129 | ) | |||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (6,066 | ) | (4,104 | ) | ||||
Class C | (595 | ) | (454 | ) | ||||
Class Z | (894,651 | ) | (885,485 | ) | ||||
Class R6 | (13,766,241 | ) | (8,274,777 | ) | ||||
|
|
|
| |||||
(14,667,553 | ) | (9,164,820 | ) | |||||
|
|
|
| |||||
Fund share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 119,813,877 | 79,972,841 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 14,522,957 | 8,930,919 | ||||||
Cost of shares purchased | (65,390,121 | ) | (49,944,561 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Fund share transactions | 68,946,713 | 38,959,199 | ||||||
|
|
|
| |||||
Total increase (decrease) | 64,657,647 | (14,448,750 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 139,974,586 | 154,423,336 | ||||||
|
|
|
| |||||
End of year | $ | 204,632,233 | $ | 139,974,586 | ||||
|
|
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 65
Financial Highlights
Class A Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $6.40 | $9.06 | $8.86 | $9.51 | $8.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.36 | 0.34 | 0.36 | 0.38 | 0.46 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.17 | (b) | (2.57 | ) | 0.25 | (0.56 | ) | 0.69 | ||||||||||||||
Total from investment operations | 0.53 | (2.23 | ) | 0.61 | (0.18 | ) | 1.15 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (0.52 | ) | (0.43 | ) | (0.41 | ) | (0.47 | ) | (0.52 | ) | ||||||||||||
Net asset value, end of year | $6.41 | $6.40 | $9.06 | $8.86 | $9.51 | |||||||||||||||||
Total Return(c): | 8.07 | % | (25.24 | )% | 6.91 | % | (1.82 | )% | 13.23 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $93 | $63 | $59 | $28 | $13 | |||||||||||||||||
Average net assets (000) | $83 | $74 | $47 | $18 | $12 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.06 | %(e) | 1.05 | % | 1.05 | % | 1.05 | % | 1.05 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 8.75 | % | 11.65 | % | 19.07 | % | 66.11 | % | 115.95 | % | ||||||||||||
Net investment income (loss) | 5.29 | % | 4.36 | % | 3.84 | % | 4.19 | % | 4.95 | % | ||||||||||||
Portfolio turnover rate(f) | 29 | % | 20 | % | 20 | % | 23 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.01% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
66
Class C Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $6.40 | $9.06 | $8.86 | $9.51 | $8.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.30 | 0.27 | 0.28 | 0.32 | 0.39 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.17 | (b) | (2.55 | ) | 0.26 | (0.57 | ) | 0.69 | ||||||||||||||
Total from investment operations | 0.47 | (2.28 | ) | 0.54 | (0.25 | ) | 1.08 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (0.46 | ) | (0.38 | ) | (0.34 | ) | (0.40 | ) | (0.45 | ) | ||||||||||||
Net asset value, end of year | $6.41 | $6.40 | $9.06 | $8.86 | $9.51 | |||||||||||||||||
Total Return(c): | 7.26 | % | (25.82 | )% | 6.11 | % | (2.55 | )% | 12.40 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $9 | $8 | $11 | $10 | $10 | |||||||||||||||||
Average net assets (000) | $9 | $9 | $11 | $10 | $10 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 63.23 | % | 81.50 | % | 78.90 | % | 114.46 | % | 139.02 | % | ||||||||||||
Net investment income (loss) | 4.52 | % | 3.53 | % | 3.08 | % | 3.56 | % | 4.22 | % | ||||||||||||
Portfolio turnover rate(e) | 29 | % | 20 | % | 20 | % | 23 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(c) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 67
Financial Highlights (continued)
Class Z Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $6.40 | $9.06 | $8.87 | $9.51 | $8.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.37 | 0.35 | 0.38 | 0.40 | 0.48 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.19 | (b) | (2.55 | ) | 0.25 | (0.54 | ) | 0.69 | ||||||||||||||
Total from investment operations | 0.56 | (2.20 | ) | 0.63 | (0.14 | ) | 1.17 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (0.54 | ) | (0.46 | ) | (0.44 | ) | (0.50 | ) | (0.54 | ) | ||||||||||||
Net asset value, end of year | $6.42 | $6.40 | $9.06 | $8.87 | $9.51 | |||||||||||||||||
Total Return(c): | 8.57 | % | (25.01 | )% | 7.11 | % | (1.43 | )% | 13.51 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $8,793 | $10,670 | $18,069 | $18,982 | $5,782 | |||||||||||||||||
Average net assets (000) | $11,553 | $14,687 | $25,561 | $10,951 | $3,498 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.80 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 1.03 | % | 1.06 | % | 1.07 | % | 1.53 | % | 2.41 | % | ||||||||||||
Net investment income (loss) | 5.57 | % | 4.54 | % | 4.12 | % | 4.45 | % | 5.12 | % | ||||||||||||
Portfolio turnover rate(e) | 29 | % | 20 | % | 20 | % | 23 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
68
Class R6 Shares | ||||||||||||||||||||||
Year Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning of Year | $6.40 | $9.06 | $8.86 | $9.51 | $8.88 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.38 | 0.36 | 0.39 | 0.43 | 0.49 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.17 | (b) | (2.56 | ) | 0.26 | (0.57 | ) | 0.69 | ||||||||||||||
Total from investment operations | 0.55 | (2.20 | ) | 0.65 | (0.14 | ) | 1.18 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (0.54 | ) | (0.46 | ) | (0.45 | ) | (0.51 | ) | (0.55 | ) | ||||||||||||
Net asset value, end of year | $6.41 | $6.40 | $9.06 | $8.86 | $9.51 | |||||||||||||||||
Total Return(c): | 8.50 | % | (24.94 | )% | 7.34 | % | (1.44 | )% | 13.58 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of year (000) | $195,739 | $129,233 | $136,285 | $97,771 | $26,493 | |||||||||||||||||
Average net assets (000) | $180,012 | $137,772 | $107,966 | $30,037 | $25,144 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.66 | %(e) | 0.65 | % | 0.65 | % | 0.66 | % | 0.74 | % | ||||||||||||
Expenses before waivers and/or expense reimbursement | 0.79 | % | 0.78 | % | 0.81 | % | 1.16 | % | 1.49 | % | ||||||||||||
Net investment income (loss) | 5.68 | % | 4.73 | % | 4.24 | % | 4.69 | % | 5.27 | % | ||||||||||||
Portfolio turnover rate(f) | 29 | % | 20 | % | 20 | % | 23 | % | 33 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | The per share amount of realized and unrealized gain (loss) on investments does not directly correlate to the amounts reported in the Statement of Operations due to the timing of portfolio share transactions in relation to fluctuating market values. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. |
(d) | Does not include expenses of the underlying funds in which the Fund invests. |
(e) | Includes interest expense on borrowings from the Syndicated Credit Agreement and certain non-recurring expenses of 0.01% which are being excluded from the Fund’s contractual waiver for the year ended October 31, 2023. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund 69
Notes to Financial Statements
1. | Organization |
Prudential World Fund, Inc. (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Maryland Corporation. These financial statements relate only to the PGIM Emerging Markets Debt Hard Currency Fund (the “Fund”), a series of the RIC. The Fund is classified as a diversified fund for purposes of the 1940 Act.
The investment objective of the Fund is total return, through a combination of current income and capital appreciation.
2. | Accounting Policies |
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The Board of Directors (the “Board”) has approved the Fund’s valuation policies and procedures for security valuation and designated PGIM Investments LLC (“PGIM Investments” or the “Manager”) as the “Valuation Designee,” as defined by Rule 2a-5(b) under the 1940 Act, to perform the fair value determination relating to all Fund investments. Pursuant to the Board’s oversight, the Valuation Designee has established a Valuation Committee to perform the duties and responsibilities as Valuation Designee under Rule 2a-5. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities
70
trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 — Fair Value Measurement.
Common or preferred stocks, exchange-traded funds (ETFs) and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on a valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Investments in open-end funds (other than ETFs) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing
PGIM Emerging Markets Debt Hard Currency Fund 71
Notes to Financial Statements (continued)
derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
Securities and other assets that cannot be priced according to the methods described above are valued based on policies and procedures approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; and any available analyst media or other reports or information deemed reliable by the Valuation Designee regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the
72
fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net
Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.
Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Fund enters into forward currency contracts, as defined in the prospectus, in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation or depreciation on forward and cross currency contracts. Gain (loss) is realized on the settlement date of the contract equal to the difference between the settlement value of the original and negotiated forward contracts. This gain (loss), if any, is included in net realized gain (loss) on forward and cross currency contract transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks from currency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from the counterparty at the end of the contract’s life. A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.
Options: The Fund purchased and/or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates with respect to securities or financial instruments which the Fund currently owns or intends to purchase. The Fund may also use options to gain additional market exposure. The Fund’s principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on
PGIM Emerging Markets Debt Hard Currency Fund 73
Notes to Financial Statements (continued)
the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid at the closing of a purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on options written transactions.
The Fund, as writer of an option, may have no control over whether the underlying securities or financial instruments may be sold (called) or purchased (put). As a result, the Fund bears the market risk of an unfavorable change in the price of the security or financial instrument underlying the written option. The Fund, as purchaser of an OTC option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts. With exchange-traded options contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the options contracts against default.
When the Fund writes an option on a swap, an amount equal to any premium received by the Fund is recorded as a liability and is subsequently adjusted to the current market value of the written option on the swap. If a call option on a swap is exercised, the Fund becomes obligated to pay a fixed interest rate (noted as the strike price) and receive a variable interest rate on a notional amount. If a put option on a swap is exercised, the Fund becomes obligated to pay a variable interest rate and receive a fixed interest rate (noted as the strike price) on a notional amount. Premiums received from writing options on swaps that expire or are exercised are treated as realized gains upon the expiration or exercise of such options on swaps. The risk associated with writing put and call options on swaps is that the Fund will be obligated to be party to a swap agreement if an option on a swap is exercised.
Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or
74
is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.
The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Swap Agreements: The Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with a counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. For OTC-traded, upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.
Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Fund used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value of the cash flows to be received from the counterparty over the contract’s remaining life.
Credit Default Swaps (“CDS”): CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.
PGIM Emerging Markets Debt Hard Currency Fund 75
Notes to Financial Statements (continued)
The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be “short the credit” because the higher the contract value rises, the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases. The Fund’s maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.
As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements where the Fund is the seller of protection as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of
76
the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.
The RIC, on behalf of the Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Schedule of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
PGIM Emerging Markets Debt Hard Currency Fund 77
Notes to Financial Statements (continued)
Short sales and OTC contracts, including forward foreign currency exchange contracts, swaps, forward rate agreements and written options involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities, if applicable. Such risks may be mitigated by engaging in master netting arrangements.
Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of the securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.
The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual expense amounts. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative
78
proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.
Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.
Expected Distribution Schedule to Shareholders* | Frequency | |||
Net Investment Income | Monthly | |||
Short-Term Capital Gains | Annually | |||
Long-Term Capital Gains | Annually |
* | Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year. |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
3. | Agreements |
The RIC, on behalf of the Fund, has a management agreement with the Manager pursuant to which it has responsibility for all investment advisory services, including supervision of the subadviser’s performance of such services, and for rendering administrative services.
The Manager has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its business unit PGIM Fixed Income, and PGIM Limited (collectively the “subadviser”). The Manager pays for the services of the subadviser.
PGIM Emerging Markets Debt Hard Currency Fund 79
Notes to Financial Statements (continued)
Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended October 31, 2023, the contractual and effective management fee rates were as follows:
Contractual Management Rate | Effective Management Fee, before any waivers and/or expense reimbursements | |
0.650% on average daily net assets up to $1 billion; | 0.65% | |
0.630% on average daily net assets from $1 billion to $3 billion; | ||
0.610% on average daily net assets from $3 billion to $5 billion; | ||
0.600% on average daily net assets from $5 billion to $10 billion; | ||
0.590% on average daily net assets over $10 billion. |
The Manager has contractually agreed, through February 28, 2025, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.
Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager for the purpose of preventing the expenses from exceeding a certain expense ratio limit may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:
Class | Expense Limitations | |
A | 1.05% | |
C | 1.80 | |
Z | 0.75 | |
R6 | 0.65 |
The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.
80
Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. The distribution fees are accrued daily and payable monthly.
The Fund’s annual gross and net distribution rates, where applicable, are as follows:
Class | Gross Distribution Fee | Net Distribution Fee | ||||
A | 0.25% | 0.25% | ||||
C | 1.00 | 1.00 | ||||
Z | N/A | N/A | ||||
R6 | N/A | N/A |
For the year ended October 31, 2023, PIMS has not received any front-end sales charges (“FESL”) resulting from sales of certain class shares. Additionally, for the year ended October 31, 2023, PIMS did not receive any contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain Class A and Class C shareholders.
PGIM Investments, PGIM, Inc., PGIM Limited and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
4. | Other Transactions with Affiliates |
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent and shareholder servicing agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Fund may invest its overnight sweep cash in the PGIM Core Government Money Market Fund (the “Core Government Fund”), a series of the Prudential Government Money Market Fund, Inc., and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), a series of Prudential Investment Portfolios 2, each registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Government Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments in the Core Government Fund and the Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act that, subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended October 31, 2023, no Rule 17a-7 transactions were entered into by the Fund.
PGIM Emerging Markets Debt Hard Currency Fund 81
Notes to Financial Statements (continued)
5. | Portfolio Securities |
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended October 31, 2023, were as follows:
Cost of Purchases | Proceeds from Sales | |||
$114,256,340 | $53,001,806 |
A summary of the cost of purchases and proceeds from sales of shares of an affiliated mutual fund for the year ended October 31, 2023, is presented as follows:
Value, of Year | Cost of Purchases | Proceeds from Sales | Change in | Realized | Value, | Shares, | Income | ||||||||||||||||||||||||||||
Short-Term Investments - Affiliated Mutual Funds: |
| ||||||||||||||||||||||||||||||||||
PGIM Core Government Money Market Fund(1)(wb) |
| ||||||||||||||||||||||||||||||||||
$ — | $65,184,433 | $62,944,944 | $ — | $ — | $2,239,489 | 2,239,489 | $192,154 | ||||||||||||||||||||||||||||
PGIM Institutional Money Market Fund(1)(b)(wb) |
| ||||||||||||||||||||||||||||||||||
1,747,632 | 4,477,725 | 4,845,221 | 325 | 869 | 1,381,330 | 1,382,021 | 13,266 | (2) | |||||||||||||||||||||||||||
$1,747,632 | $69,662,158 | $67,790,165 | $325 | $869 | $3,620,819 | $205,420 |
(1) | The Fund did not have any capital gain distributions during the reporting period. |
(2) | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
(b) | Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(wb) | Represents an investment in a Fund affiliated with the Manager. |
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.
For the year ended October 31, 2023, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$14,667,553 | $— | $— | $14,667,553 |
82
For the year ended October 31, 2022, the tax character of dividends paid as reflected in the Statement of Changes in Net Assets were as follows:
Ordinary Income | Long-Term Capital Gains | Tax Return of Capital | Total Dividends and Distributions | |||
$9,164,820 | $— | $— | $9,164,820 |
For the year ended October 31, 2023, the Fund had the following amounts of accumulated undistributed earnings on a tax basis:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |
$2,467,731 | $— |
The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of October 31, 2023 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation | |||
$236,988,890 | $1,188,498 | $(38,070,360) | $(36,881,862) |
The difference between GAAP and tax basis were primarily due to deferred losses on wash sales, amortization of bond premium, foreign currency forwards, defaulted securities and other GAAP to tax differences.
For federal income tax purposes, the Fund had an approximated capital loss carryforward as of October 31, 2023 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Capital Loss Carryforward | Capital Loss Carryforward Utilized | |
$24,920,000 | $— |
The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2023 are subject to such review.
7. | Capital and Ownership |
The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 3.25%. Investors who purchase $500,000 or more of Class A shares and sell those shares within 12 months of purchase are subject to a CDSC of 1% on sales although these purchases are not subject to a front-end sales charge. The
PGIM Emerging Markets Debt Hard Currency Fund 83
Notes to Financial Statements (continued)
Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock, below.
The RIC is authorized to issue 10,225,000,000 shares of common stock, $0.00001 par value per share, 600,000,000 of which are designated as shares of the Fund. The authorized shares of the Fund are currently classified and designated as follows:
Class | Number of Shares | |
A | 100,000,000 | |
C | 100,000,000 | |
Z | 200,000,000 | |
R6 | 200,000,000 |
As of October 31, 2023, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:
Class | Number of Shares | Percentage of Outstanding Shares | ||
A | 1,394 | 9.7% | ||
C | 1,333 | 100.0 | ||
R6 | 5,444,299 | 17.8 |
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Number of Shareholders | Percentage of Outstanding Shares | |||
Affiliated | 1 | 17.1% | ||
Unaffiliated | 2 | 78.2 |
84
Transactions in shares of common stock were as follows:
Share Class | Shares | Amount | ||||||
Class A | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 6,909 | $ | 46,253 | |||||
Shares issued in reinvestment of dividends and distributions | 849 | 5,718 | ||||||
Shares purchased | (5,335 | ) | (35,935 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 2,423 | 16,036 | ||||||
Shares issued upon conversion from other share class(es) | 2,140 | 14,681 | ||||||
Net increase (decrease) in shares outstanding | 4,563 | $ | 30,717 | |||||
Year ended October 31, 2022: | ||||||||
Shares sold | 39,571 | $ | 334,658 | |||||
Shares issued in reinvestment of dividends and distributions | 470 | 3,551 | ||||||
Shares purchased | (42,921 | ) | (352,555 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (2,880 | ) | (14,346 | ) | ||||
Shares issued upon conversion from other share class(es) | 6,260 | 42,074 | ||||||
Net increase (decrease) in shares outstanding | 3,380 | $ | 27,728 | |||||
Class C | ||||||||
Year ended October 31, 2023: | ||||||||
Shares issued in reinvestment of dividends and distributions | 88 | $ | 595 | |||||
Net increase (decrease) in shares outstanding | 88 | $ | 595 | |||||
Year ended October 31, 2022: | ||||||||
Shares issued in reinvestment of dividends and distributions | 59 | $ | 454 | |||||
Net increase (decrease) in shares outstanding | 59 | $ | 454 | |||||
Class Z | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 1,739,007 | $ | 11,665,541 | |||||
Shares issued in reinvestment of dividends and distributions | 111,346 | 751,057 | ||||||
Shares purchased | (1,819,009 | ) | (12,268,654 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 31,344 | 147,944 | ||||||
Shares issued upon conversion from other share class(es) | 78 | 523 | ||||||
Shares purchased upon conversion into other share class(es) | (327,880 | ) | (2,221,838 | ) | ||||
Net increase (decrease) in shares outstanding | (296,458 | ) | $ | (2,073,371 | ) | |||
Year ended October 31, 2022: | ||||||||
Shares sold | 1,071,706 | $ | 8,598,237 | |||||
Shares issued in reinvestment of dividends and distributions | 85,119 | 652,230 | ||||||
Shares purchased | (1,471,273 | ) | (11,268,608 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | (314,448 | ) | (2,018,141 | ) | ||||
Shares issued upon conversion from other share class(es) | 262 | 2,039 | ||||||
Shares purchased upon conversion into other share class(es) | (12,660 | ) | (96,047 | ) | ||||
Net increase (decrease) in shares outstanding | (326,846 | ) | $ | (2,112,149 | ) |
PGIM Emerging Markets Debt Hard Currency Fund 85
Notes to Financial Statements (continued)
Share Class | Shares | Amount | ||||||
Class R6 | ||||||||
Year ended October 31, 2023: | ||||||||
Shares sold | 15,999,865 | $ | 108,102,083 | |||||
Shares issued in reinvestment of dividends and distributions | 2,045,842 | 13,765,587 | ||||||
Shares purchased | (8,037,620 | ) | (53,085,532 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 10,008,087 | 68,782,138 | ||||||
Shares issued upon conversion from other share class(es) | 325,783 | 2,207,156 | ||||||
Shares purchased upon conversion into other share class(es) | (78 | ) | (522 | ) | ||||
Net increase (decrease) in shares outstanding | 10,333,792 | $ | 70,988,772 | |||||
Year ended October 31, 2022: | ||||||||
Shares sold | 9,368,577 | $ | 71,039,946 | |||||
Shares issued in reinvestment of dividends and distributions | 1,101,339 | 8,274,684 | ||||||
Shares purchased | (5,324,429 | ) | (38,323,398 | ) | ||||
Net increase (decrease) in shares outstanding before conversion | 5,145,487 | 40,991,232 | ||||||
Shares issued upon conversion from other share class(es) | 6,406 | 53,973 | ||||||
Shares purchased upon conversion into other share class(es) | (262 | ) | (2,039 | ) | ||||
Net increase (decrease) in shares outstanding | 5,151,631 | $ | 41,043,166 |
8. | Borrowings |
The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.
Current SCA | Prior SCA | |||||
Term of Commitment | 9/29/2023 - 9/26/2024 | 9/30/2022 – 9/28/2023 | ||||
Total Commitment | $ 1,200,000,000 | $ 1,200,000,000 | ||||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||||
Annualized Interest Rate on Borrowings | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent | 1.00% plus the higher of (1) the effective federal funds rate, (2) the daily SOFR rate plus 0.10% or (3) zero percent |
Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more
86
likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.
The Fund utilized the SCA during the year ended October 31, 2023. The average daily balance for the 5 day that the Fund had loans outstanding during the period was approximately $7,753,400, borrowed at a weighted average interest rate of 6.41%. The maximum loan outstanding amount during the period was $11,185,000. At October 31, 2023, the Fund did not have an outstanding loan amount.
9. | Risks of Investing in the Fund |
The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.
Credit Risk: Credit risk relates to the ability of the issuer of a fixed income instrument or the counterparty to a financial transaction with the Fund to meet interest and principal payments as they come due or to fulfill its obligations to the Fund. The value of the fixed income instruments held by the Fund will be adversely affected by any erosion in the ability of the relevant issuers to make interest and principal payments as they become due. The ratings given to a debt security by certain ratings agencies provide a generally useful guide as to such credit risk. The lower the rating of a debt security held by the Fund, the greater the degree of credit risk that is perceived to exist by the rating agency with respect to that security. Increasing the amount of Fund assets invested in lower-rated securities generally will increase the Fund’s income, but also will increase the credit risk to which the Fund is subject. The Fund generally enters into financial transactions with major dealers that are deemed acceptable to the subadviser from a credit perspective.
Currency Risk: The Fund’s assets may be invested in securities that are denominated in non-US currencies or directly in currencies. Such investments are subject to the risk that the value of a particular currency will change in relation to the US dollar or other currencies. The weakening of a country’s currency relative to the US dollar will negatively affect the dollar value of the Fund’s assets. Among the factors that may affect currency values are trade balances, levels of short term interest rates, differences in relative values of similar assets in different currencies, long term opportunities for investment and capital appreciation, central bank policy, and political developments. The Fund may attempt to hedge such risks by selling or buying currencies in the forward market; selling or buying currency futures contracts, options or other securities thereon; borrowing funds denominated in particular currencies; or any combination thereof, depending on the availability of liquidity in the hedging instruments and their relative costs. There can be no assurance that such strategies will be implemented or, if implemented, will be effective. The Fund would incur additional costs from hedging.
PGIM Emerging Markets Debt Hard Currency Fund 87
Notes to Financial Statements (continued)
Debt Obligations Risk: Debt obligations are subject to credit risk, market risk and interest rate risk. The Fund’s holdings, share price, yield and total return may also fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to reinvest at the same rate of interest and therefore would earn less income.
Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivatives transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” or may create economic leverage for the Fund and therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders.
Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, many over-the-counter derivative instruments will not have liquidity beyond the counterparty to the instrument. Over-the-counter derivative instruments also involve the risk that the other party will not meet its obligations to the Fund. The use of derivatives also exposes the Fund to operational issues, such as documentation and settlement issues, systems failures, inadequate control and human error.
Derivatives may also involve legal risks, such as insufficient documentation, the lack of capacity or authority of a counterparty to execute or settle a transaction, and the legality and enforceability of derivatives contracts. The U.S. Government and foreign governments have adopted (and may adopt further) regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements and risk exposure limitations. Regulation of derivatives may make derivatives more costly, limit their availability or utility to the Fund, or otherwise adversely affect their performance or disrupt markets.
Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, or otherwise reduce inflation, may at times result in unusually high market volatility, which could negatively impact performance. Governmental efforts to curb inflation often have negative effects on
88
the level of economic activity. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.
The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.
Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.
In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.
Geographic Concentration Risk: The Fund’s performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which the Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease.
PGIM Emerging Markets Debt Hard Currency Fund 89
Notes to Financial Statements (continued)
Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.
Interest Rate Risk: The value of your investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration debt securities. Similarly, a rise in interest rates may also have a greater negative impact on the value of equity securities whose issuers expect earnings further out in the future. For example, a fixed income security with a duration of three years is expected to decrease in value by approximately 3% if interest rates increase by 1%. This is referred to as “duration risk.” When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk.” The Fund may lose money if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Junk Bonds Risk: High-yield, high-risk bonds have predominantly speculative characteristics, including particularly high credit risk. Junk bonds tend to have lower market liquidity than higher-rated securities. The liquidity of particular issuers or industries within a particular investment category may shrink or disappear suddenly and without warning. The non-investment grade bond market can experience sudden and sharp price swings and become illiquid due to a variety of factors, including changes in economic forecasts, stock market activity, large sustained sales by major investors, a high profile default or a change in the market’s psychology.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.
Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the
90
Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.
Management Risk: Actively managed funds are subject to management risk. The subadviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but the subadviser’s judgments about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements may be incorrect. Additionally, the investments selected for the Fund may underperform the markets in general, the Fund’s benchmark and other funds with similar investment objectives.
Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.
Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.
10. | Recent Regulatory Developments |
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and
PGIM Emerging Markets Debt Hard Currency Fund 91
Notes to Financial Statements (continued)
semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments (the “Rule”). Other information, including financial statements, will no longer appear in the funds’ streamlined shareholder reports but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The Rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the Rule and its impact to the Fund.
92
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Prudential World Fund, Inc. and Shareholders of PGIM Emerging Markets Debt Hard Currency Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Emerging Markets Debt Hard Currency Fund (one of the funds constituting Prudential World Fund, Inc., referred to hereafter as the “Fund”) as of October 31, 2023, the related statement of operations for the year ended October 31, 2023, the statements of changes in net assets for each of the two years in the period ended October 31, 2023, including the related notes, and the financial highlights for each of the four years in the period ended October 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, 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 ended October 31, 2023 and the financial highlights for each of the four years in the period ended October 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Fund as of and for the year ended October 31, 2019 and the financial highlights for the period ended October 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated December 19, 2019 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2023 by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
December 18, 2023
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Emerging Markets Debt Hard Currency Fund 93
INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)
Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Ellen S. Alberding 1958 Board Member Portfolios Overseen: 100 | Chief Executive Officer and President, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); formerly Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); formerly Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 101 | Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; formerly President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (September 2008-August 2023). | Since July 2008 |
PGIM Emerging Markets Debt Hard Currency Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Linda W. Bynoe 1952 Board Member Portfolios Overseen: 98 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer). | Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 101 | Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management). | Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016). | Since September 2017 | |||
Keith F. Hartstein 1956 Board Member & Independent Chair Portfolios Overseen: 101 | Retired; formerly Member (November 2014-September 2022) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); formerly Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008). | None. | Since September 2013 |
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Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Laurie Simon Hodrick 1962 Board Member Portfolios Overseen: 98 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008). | Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 101 | Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); formerly Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Emerging Markets Debt Hard Currency Fund
Independent Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Grace C. Torres 1959 Board Member Portfolios Overseen: 101 | Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc. | Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank. | Since November 2014 |
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Interested Board Members | ||||||
Name Year of Birth Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held During Past Five Years | Length of Board Service | |||
Stuart S. Parker 1962 Board Member & President Portfolios Overseen: 101 | President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and Principal Executive Officer ("PEO") (since December 2023) of the PGIM Credit Income Fund; President and PEO (since September 2022) of the PGIM Private Credit Fund; President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012). | None. | Since January 2012 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 101 | Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since December 2023) of the PGIM Credit Income Fund; Vice President (since September 2022) of the PGIM Private Credit Fund; Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
PGIM Emerging Markets Debt Hard Currency Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Claudia DiGiacomo 1974 Chief Legal Officer | Chief Legal Officer (since December 2023) of the PGIM Credit Income Fund; Chief Legal Officer (since September 2022) of the PGIM Private Credit Fund; Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Andrew Donohue 1972 Chief Compliance Officer | Chief Compliance Officer (since May 2023) of the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Private Credit Fund, PGIM Private Real Estate Fund, Inc.; Chief Compliance Officer of AST Investment Services, Inc. (since October 2022); Vice President, Chief Compliance Officer of PGIM Investments LLC (since September 2022); Chief Compliance Officer (since December 2023) of the PGIM Credit Income Fund; formerly various senior compliance roles within Principal Global Investors, LLC., global asset management for Principal Financial (2011-2022), most recently as Global Chief Compliance Officer (2016-2022). | Since May 2023 | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018) of PGIM Investments LLC; Secretary (since December 2023) of the PGIM Credit Income Fund; Secretary (since September 2022) of the PGIM Private Credit Fund; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC. | Since October 2006 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Melissa Gonzalez 1980 Assistant Secretary | Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential. | Since March 2020 | ||
Patrick E. McGuinness 1986 Assistant Secretary | Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since June 2020 | ||
Debra Rubano 1975 Assistant Secretary | Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020). | Since December 2020 | ||
George Hoyt 1965 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since September 2023); formerly Associate General Counsel of Franklin Templeton and Secretary and Chief Legal Officer of certain funds in the Franklin Templeton complex (2020- 2023) and Managing Director (2016-2020) and Associate General Counsel for Legg Mason, Inc. and its predecessors (2004-2020). | Since December 2023 | ||
Devan Goolsby 1991 Assistant Secretary | Vice President and Corporate Counsel of Prudential (since May 2023); formerly Associate at Eversheds Sutherland (US) LLP (2021-2023); Compliance Officer at Bloomberg LP (2019-2021); and an Examiner at the Financial Industry Regulatory Authority (2015-2019). | Since December 2023 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since December 2023) of the PGIM Credit Income Fund; Assistant Secretary (since September 2022) of the PGIM Private Credit Fund; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc. | Since March 2015 |
PGIM Emerging Markets Debt Hard Currency Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Christian J. Kelly 1975 Chief Financial Officer | Vice President, Global Head of Fund Administration of PGIM Investments LLC (since November 2018); Chief Financial Officer (since March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Chief Financial Officer (since December 2023) of the PGIM Credit Income Fund; Chief Financial Officer of PGIM Private Credit Fund (since September 2022); Chief Financial Officer of PGIM Private Real Estate Fund, Inc. (since July 2022); formerly Treasurer and Principal Financial Officer (January 2019- March 2023) of PGIM Investments mutual funds, closed end funds and ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; formerly Treasurer and Principal Financial Officer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007). | Since January 2019 | ||
Russ Shupak 1973 Treasurer and Principal Accounting Officer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of PGIM Investments mutual funds, closed end funds and ETFs (since March 2023); Treasurer and Principal Accounting Officer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund (since October 2019); formerly Director (2013-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.; formerly Director (2005-2007) within PGIM Investments Fund Administration. | Since April 2014 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; formerly Director (2007-2017) within PGIM Investments Fund Administration. | Since October 2019 |
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Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer of the Advanced Series Trust, the Prudential Series Fund and the Prudential Gibraltar Fund (since March 2023); Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Treasurer and Principal Accounting Officer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Assistant Treasurer of PGIM Investments mutual funds, closed end funds and ETFs (since October 2019); formerly Director (2011-2017) within PGIM Investments Fund Administration. | Since October 2019 | ||
Robert W. McCormack 1973 Assistant Treasurer | Vice President (since 2019) within PGIM Investments Fund Administration; Assistant Treasurer (since March 2023) of PGIM Investments mutual funds, closed end funds, ETFs, Advanced Series Trust Portfolios, Prudential Series Funds and Prudential Gibraltar Fund; Assistant Treasurer (since December 2023) of the PGIM Credit Income Fund; Assistant Treasurer (since September 2022) of the PGIM Private Credit Fund; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director (2016-2019) within PGIM Investments Fund Administration; formerly Vice President within Goldman, Sachs & Co. Investment Management Controllers (2008-2016), Assistant Treasurer of Goldman Sachs Family of Funds (2015-2016). | Since March 2023 | ||
Kelly Florio 1978 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly Head of Fraud Risk Management (October 2019-December 2021) at New York Life Insurance Company; formerly Head of Key Risk Area Operations (November 2018-October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006-2009) at MetLife. | Since June 2022 |
(a) | Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively. |
Explanatory Notes to Tables:
∎ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC. |
∎ | Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410. |
∎ | There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75. |
∎ | “Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act. |
PGIM Emerging Markets Debt Hard Currency Fund
∎ | “Portfolios Overseen” includes such applicable investment companies managed by PGIM Investments LLC and overseen by the Board Member. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM Private Credit Fund, PGIM Credit Income Fund, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust. |
∎ | As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America. |
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Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Emerging Markets Debt Hard Currency Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Director. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Directors.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit (“PGIM Fixed Income”) and PGIM Limited (“PGIML”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 25 and June 6-8, 2023 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2024, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments, PGIM Fixed Income and PGIML. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadvisers, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.
The Directors determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between each of PGIM Investments and PGIM, which,
1PGIM Emerging Markets Debt Hard Currency Fund is a series of Prudential World Fund, Inc.
PGIM Emerging Markets Debt Hard Currency Fund
Approval of Advisory Agreements (continued)
through its PGIM Fixed Income unit, and PGIML, which serve as the Fund’s subadvisers pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments, PGIM Fixed Income, and PGIML. The Board noted that PGIM Fixed Income and PGIML are affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadvisers for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadvisers, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments senior management on the performance and operations of the subadvisers. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Directors of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Fixed Income and PGIML, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreement.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund, PGIM Fixed Income, and PGIML, and also considered the qualifications, backgrounds and responsibilities of PGIM Fixed Income’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’, PGIM Fixed Income’s, and PGIML’s organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments, PGIM Fixed Income, and PGIML. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments, PGIM Fixed Income, and PGIML.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments, the subadvisory services provided to the Fund by PGIM Fixed Income and PGIML, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, PGIM Fixed Income, and PGIML under the management and subadvisory agreements.
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Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments during the year ended December 31, 2022 exceeded the management fees received by PGIM Investments, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments, PGIM Fixed Income, and PGIML
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Fixed Income, PGIML and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Fixed Income and PGIML included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to their reputations. The Board concluded that the benefits derived by PGIM Investments, PGIM
PGIM Emerging Markets Debt Hard Currency Fund
Approval of Advisory Agreements (continued)
Fixed Income, and PGIML were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one- and three-year periods ended December 31, 2022. The Board considered that the Fund commenced operations on December 12, 2017 and that longer-term performance was not yet available.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2022. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
Net Performance
| 1 Year | 3 Years | 5 Years | 10 Years | ||||
4th Quartile |
4th Quartile |
3rd Quartile |
N/A | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 1st Quartile |
· | The Board noted that, while the Fund underperformed its benchmark index over all periods, it outperformed its benchmark index and ranked in the first quartile of its peer group in 2021. |
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· | The Board further considered PGIM Investments’ assertions that the Fund’s active positioning down the credit curve and persistent underweights to sovereign debt lend itself to underperformance during periods of market volatility and a flight-to-quality, and that country and security selection should be the primary driver of excess performance over the intermediate- to long-term. |
· | The Board noted that the Fund outperformed its benchmark index over all trailing periods as of December 31, 2022, gross of fees, and that the Fund performed in the first quartile of its peer group in two out of the last four calendar years, net of fees. |
· | The Board also considered that portfolio managers were added to the investment team in 2021. |
· | The Board and PGIM Investments agreed to retain the existing contractual expense cap that (exclusive of certain fees and expenses) caps total annual operating expenses at 1.05% for Class A shares, 1.80% for Class C shares, 0.75% for Class Z shares, and 0.65% for Class R6 shares through February 29, 2024. |
· | In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares. |
· | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
· | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.
PGIM Emerging Markets Debt Hard Currency Fund
655 Broad Street
Newark, NJ 07102 | ⬛ TELEPHONE
(800) 225-1852 | ⬛ WEBSITE
pgim.com/investments |
PROXY VOTING
The Board of Directors of the Fund has delegated to the Fund’s subadvisers the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.
DIRECTORS
Ellen S. Alberding ● Kevin J. Bannon ● Scott E. Benjamin ● Linda W. Bynoe ● Barry H. Evans ● Keith F. Hartstein ● Laurie Simon Hodrick ● Stuart S. Parker ● Brian K. Reid ● Grace C. Torres
OFFICERS
Stuart S. Parker, President ● Scott E. Benjamin, Vice President ● Christian J. Kelly, Chief Financial Officer ● Claudia DiGiacomo, Chief Legal Officer ● Andrew Donohue, Chief Compliance Officer ● Russ Shupak, Treasurer and Principal Accounting Officer ● Kelly Florio, Anti-Money Laundering Compliance Officer ● Andrew R. French, Secretary ● Melissa Gonzalez, Assistant Secretary ● Kelly A. Coyne, Assistant Secretary ● Patrick E. McGuinness, Assistant Secretary ● Debra Rubano, Assistant Secretary ● George Hoyt, Assistant Secretary ● Devan Goolsby, Assistant Secretary ● Lana Lomuti, Assistant Treasurer ● Elyse M. McLaughlin, Assistant Treasurer ● Deborah Conway, Assistant Treasurer ● Robert W. McCormack, Assistant Treasurer
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
SUBADVISERS | PGIM Fixed Income | 655 Broad Street Newark, NJ 07102 | ||
PGIM Limited | Grand Buildings, 1-3 Strand Trafalgar Square London, WC2N 5HR United Kingdom | |||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 534432 Pittsburgh, PA 15253 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.
E-DELIVERY
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM Emerging Markets Debt Hard Currency Fund, PGIM Investments, Attn: Board of Directors, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to that Director at the same address. Communications are not screened before being delivered to the addressee.
AVAILABILITY OF PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852.
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PGIM EMERGING MARKETS DEBT HARD CURRENCY FUND
SHARE CLASS | A | C | Z | R6 | ||||
NASDAQ | PDHAX | PDHCX | PDHVX | PDHQX | ||||
CUSIP | 743969479 | 743969461 | 743969446 | 743969453 |
MF239E
Item 2 – Code of Ethics — See Exhibit (a)
As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.
The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3 – Audit Committee Financial Expert –
The registrant’s Board has determined that Ms. Grace C. Torres, member of the Board’s Audit Committee is an “audit committee financial expert,” and that she is “independent,” for purposes of this item.
Item 4 – Principal Accountant Fees and Services –
(a) Audit Fees
For the fiscal years ended October 31, 2023 and October 31, 2022, PricewaterhouseCoopers LLP (“PwC”), the Registrant’s principal accountant, billed the Registrant $249,100 and $244,900, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.
(b) Audit-Related Fees
For the fiscal years ended October 31, 2023 and October 31, 2022: none.
(c) Tax Fees
For the fiscal years ended October 31, 2023 and October 31, 2022: none.
(d) All Other Fees
For the fiscal years ended October 31, 2023 and October 31, 2022: none.
(e) (1) Audit Committee Pre-Approval Policies and Procedures
THE PGIM MUTUAL FUNDS
AUDIT COMMITTEE POLICY
on
Pre-Approval of Services Provided by the Independent
Accountants
The Audit Committee of each PGIM Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve the independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:
• | a review of the nature of the professional services expected to be provided, |
• | a review of the safeguards put into place by the accounting firm to safeguard independence, and |
• | periodic meetings with the accounting firm. |
Policy for Audit and Non-Audit Services Provided to the Funds
On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services.
Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed
non-audit services will not adversely affect the independence of the independent accountants. Such proposed non-audit services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.
The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider for pre-approval.
Audit Services
The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:
• | Annual Fund financial statement audits |
• | Seed audits (related to new product filings, as required) |
• | SEC and regulatory filings and consents |
Audit-related Services
The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:
• | Accounting consultations |
• | Fund merger support services |
• | Agreed Upon Procedure Reports |
• | Attestation Reports |
• | Other Internal Control Reports |
Individual audit-related services that fall within one of these categories (except for fund merger support services) and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated). Fees related to fund merger support services are subject to a separate authorized pre-approval by the Audit Committee with fees determined on a per occurrence and merger complexity basis.
Tax Services
The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:
• | Tax compliance services related to the filing or amendment of the following: |
• | Federal, state and local income tax compliance; and, |
• | Sales and use tax compliance |
• | Timely RIC qualification reviews |
• | Tax distribution analysis and planning |
• | Tax authority examination services |
• | Tax appeals support services |
• | Accounting methods studies |
• | Fund merger support services |
• | Tax consulting services and related projects |
Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated).
Other Non-Audit Services
Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.
Proscribed Services
The Fund’s independent accountants will not render services in the following categories of non-audit services:
• | Bookkeeping or other services related to the accounting records or financial statements of the Fund |
• | Financial information systems design and implementation |
• | Appraisal or valuation services, fairness opinions, or contribution-in-kind reports |
• | Actuarial services |
• | Internal audit outsourcing services |
• | Management functions or human resources |
• | Broker or dealer, investment adviser, or investment banking services |
• | Legal services and expert services unrelated to the audit |
• | Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible. |
Pre-approval of Non-Audit Services Provided to Other Entities Within the PGIM Fund Complex
Certain non-audit services provided to PGIM Investments LLC or any of its affiliates that also provide ongoing services to the PGIM Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds.
Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $30,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.
Although the Audit Committee will not pre-approve all services provided to PGIM Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to PGIM Investments and its affiliates.
(e) (2) Percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X –
Fiscal Year Ended October 31, 2023 | Fiscal Year Ended October 31, 2022 | |||||||||
4(b) | Not applicable. | Not applicable. | ||||||||
4(c) | Not applicable. | Not applicable. | ||||||||
4(d) | Not applicable. | Not applicable. |
(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.
The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
(g) Non-Audit Fees
The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years ended October 31, 2023 and October 31, 2022 was $0 and $0, respectively.
(h) Principal Accountant’s Independence
Not applicable as the Registrant’s principal accountant has not provided non-audit services to the registrant’s 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 Rule 2-01(c)(7)(ii) of Regulation S-X.
(i) Not applicable.
(j) Not applicable.
Item 5 – Audit Committee of Listed Registrants – Not applicable.
Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
Item 11 – Controls and Procedures
(a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
(b) | There has been no significant change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during 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 – Controls and Procedures—Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not applicable.
Item 13 – Exhibits
(a)(1) Code of Ethics – Attached hereto as Exhibit EX-99.CODE-ETH.
(a)(2)(1) Any written solicitation to purchase securities under Rule 23c-1 – Not applicable.
(a)(2)(2) Change in the registrant’s independent public accountant – Not applicable.
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.
Registrant: | Prudential World Fund, Inc. | |
By: | /s/ Andrew R. French | |
Andrew R. French | ||
Secretary | ||
Date: | December 19, 2023 |
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/ Stuart S. Parker | |
Stuart S. Parker | ||
President and Principal Executive Officer | ||
Date: | December 19, 2023 | |
By: | /s/ Christian J. Kelly | |
Christian J. Kelly | ||
Chief Financial Officer (Principal Financial Officer) | ||
Date: | December 19, 2023 |