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- 07343 | |
Exact name of registrant as specified in charter: | The Prudential Investment Portfolios, Inc. | |
Address of principal executive offices: | 655 Broad Street, 17th Floor | |
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Andrew R. French | |
655 Broad Street, 17th Floor | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 9/30/2020 | |
Date of reporting period: | 9/30/2020 |
Item 1 – Reports to Stockholders
PGIM BALANCED FUND
ANNUAL REPORT
SEPTEMBER 30, 2020
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (pgim.com/investments), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-225-1852 or by sending an email request to PGIM Investments at shareholderreports@pgim.com.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1-800-225-1852 or send an email request to shareholderreports@pgim.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Fund.
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 Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser and Prudential Financial company. QMA is the primary business name of QMA LLC, a wholly owned subsidiary of PGIM. © 2020 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.
Effective June 26, 2020, all of the issued and outstanding Class B shares of the Fund converted into Class A shares.
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Dear Shareholder:
We hope you find the annual report for the PGIM Balanced Fund informative and useful. The report covers performance for the 12-month period that ended September 30, 2020.
During the first half of the period, the global economy remained healthy—particularly in the US—fueled by rising corporate profits and strong job growth. The outlook changed dramatically in March as the coronavirus outbreak quickly and substantially shut down economic activity worldwide, leading to significant job losses and a steep decline in global growth and earnings. Responding to this disruption, the Federal Reserve (the Fed) cut the federal funds rate target to near zero and flooded capital markets with liquidity; and Congress passed stimulus bills worth approximately $3 trillion that offered an economic lifeline to consumers and businesses.
While stocks climbed throughout the first half of the period, they fell significantly in March amid a spike in volatility, ending the 11-year-long equity bull market. With stores and factories closing and consumers staying at home to limit the spread of the virus, investors sold stocks on fears that corporate earnings would take a serious hit. As states reopened their economies in the spring and summer, a strong equity market rally helped stocks around the globe post gains during the period.
The bond market overall—including US and global bonds as well as emerging market debt—rose during the period as investors sought safety in fixed income. A significant rally in interest rates pushed the 10-year US Treasury yield down to a record low. In March, the Fed took several aggressive actions to keep the bond markets running smoothly, restarting many of the relief programs that proved to be successful in helping end the global financial crisis in 2008-09.
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 consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Balanced Fund
November 16, 2020
PGIM Balanced 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 9/30/20 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||
Class A | ||||||||
(with sales charges) | 2.21 | 6.79 | 7.99 | — | ||||
(without sales charges) | 5.64 | 7.50 | 8.35 | — | ||||
Class C | ||||||||
(with sales charges) | 3.77 | 6.73 | 7.58 | — | ||||
(without sales charges) | 4.77 | 6.73 | 7.58 | — | ||||
Class R | ||||||||
(without sales charges) | 4.95 | 7.12 | 8.04 | — | ||||
Class Z | ||||||||
(without sales charges) | 5.90 | 7.81 | 8.67 | — | ||||
Class R6 | ||||||||
(without sales charges) | 6.01 | N/A | N/A | 5.20 (11/28/17) | ||||
Customized Blend Index | ||||||||
10.46 | 9.21 | 8.57 | — | |||||
Bloomberg Barclays US Aggregate Bond Index | ||||||||
6.98 | 4.18 | 3.64 | — | |||||
S&P 500 Index | ||||||||
15.14 | 14.14 | 13.73 | — |
Average Annual Total Returns as of 9/30/20 Since Inception (%) | ||
Class R6 (11/28/17) | ||
Customized Blend Index | 7.51 | |
Bloomberg Barclays US Aggregate Bond Index | 5.59 | |
S&P 500 Index | 10.94 |
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’ 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 Customized Blend Index and the S&P 500 Index by portraying the initial account values at the beginning of the 10-year period (September 30, 2010) and the account values at the end of the current fiscal year (September 30, 2020) 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 reimbursement, if any, the Fund’s 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 Balanced 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 R6 | ||||||
Maximum initial sales charge | 3.25% of the public offering price | 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 $500,000 or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | None | |||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% | 1.00% | 0.75% (0.50% currently) | None | None |
Benchmark Definitions
Customized Blend Index—The Customized Blend Index is unmanaged and intended to provide a theoretical comparison to the Fund’s performance based on the amounts allocated to each asset class. S&P 500 Index (44%) provides a broad indicator of domestic stock price movements in large cap stocks; Bloomberg Barclays US Aggregate Bond Index (40%) includes investment grade securities issued by the US government, its agencies, and by corporations with between 1 and 10 years remaining to maturity; Russell 2000 Index (4%) contains the 2,000 smallest US companies included in the Russell 3000 Index, which gives a broad look at how stock prices of smaller companies have performed; and MSCI ACWI ex US Index (12%) is a stock market index comprising of non-US stocks from 23 developed markets and 26 emerging markets.
Bloomberg Barclays US Aggregate Bond Index—The Bloomberg Barclays US Aggregate Bond Index is unmanaged and represents securities that are SEC-registered, taxable, and dollar denominated. It covers the US investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
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 stock prices in the United States have performed.
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 9/30/20
Ten Largest Holdings | Line of Business | % of Net Assets | ||
Apple, Inc. | Technology Hardware, Storage & Peripherals | 3.3% | ||
Microsoft Corp. | Software | 2.9% | ||
Amazon.com, Inc. | Internet & Direct Marketing Retail | 2.4% | ||
Facebook, Inc., (Class A Stock) | Interactive Media & Services | 1.3% | ||
Procter & Gamble Co. (The) | Household Products | 0.9% | ||
Alphabet, Inc., (Class C Stock) | Interactive Media & Services | 0.8% | ||
Alphabet, Inc., (Class A Stock) | Interactive Media & Services | 0.7% | ||
Home Depot, Inc. (The) | Specialty Retail | 0.7% | ||
Intel Corp. | Semiconductors & Semiconductor Equipment | 0.6% | ||
AT&T, Inc. | Diversified Telecommunication Services | 0.6% |
Holdings reflect only long-term Investments and are subject to change.
PGIM Balanced Fund | 7 |
Strategy and Performance Overview
How did the Fund perform?
The PGIM Balanced Fund’s Class Z shares returned 5.90% in the 12-month reporting period that ended September 30, 2020, underperforming the 10.46% return of the Customized Blend Index (the Index). The Index is a model portfolio consisting of the S&P 500 Index (44%), the Bloomberg Barclays US Aggregate Bond Index (40%), the Russell 2000 Index (4%), and the MSCI ACWI ex US Index (12%).
What were the market conditions?
• | The global COVID-19 pandemic led to the most severe economic contraction in decades during the first half of 2020, followed by a surge in economic growth in the third quarter as government-mandated lockdowns and restrictions were loosened. |
• | Though financial markets were extremely volatile, equities outperformed bonds during the reporting period, with the broad-based S&P 500 Index returning 15.14% and the Bloomberg Barclays US Aggregate Bond Index returning 6.98%. |
• | In the fourth quarter of 2019, before the outbreak of COVID-19, a combination of positive factors—including lower geopolitical risk as the US and China signed a “Phase One” trade deal, solid economic fundamentals, and dovish central banks—supported equity markets. The S&P 500 Index rose 9% while bonds were essentially flat in the quarter. |
• | Entering 2020, economic and earnings data continued to improve. However, concerns about COVID-19 surfaced near the end of January. Equity markets faced downward pressure as volatility increased and interest rates fell. Still, data indicated a healthy US economy, which helped lift the S&P 500 Index to an all-time high in mid-February before the spread of COVID-19 quickly shifted market sentiment. As COVID-19 evolved from a localized outbreak in China to a global pandemic, large-scale economic shutdowns enveloped the globe. The question of whether there would be a global recession changed to how sharp, deep, and long that recession would last. In March, equity markets declined precipitously, dropping more than 30% between February 19 and March 23. |
• | The global policy response to the pandemic was massive, completely dwarfing the response to the global financial crisis in 2008-09 and delivered in a much shorter period of time. This response helped prevent a global economic collapse, reduced collateral damage, and may have provided the support necessary to sustain an economic recovery. |
• | In the second quarter of 2020, equities sharply rebounded, as the number of COVID-19 infections stabilized, the global policy response took hold, and economic conditions improved as countries reopened. The stock market rebound was almost as strong and swift as the decline. From its 2020 trough in late March through the end of the reporting period, the S&P 500 Index surged more than 50%, with most other risky asset classes following suit. |
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• | The pandemic resulted in investors crowding into idiosyncratic growth stocks that could perform well even when broad economic growth is slow, in QMA’s view. Such an environment does not bode well for value stocks (i.e., inexpensive stocks with strong fundamentals), which tend to be more economically sensitive in nature. Moreover, investors have bid up the price of health care stocks with any affiliation to a COVID-19 vaccine, treatment, or testing solution without regard for relative valuations or underlying company fundamentals. QMA expects that these elevated valuations will revert to levels supported by fundamentals in due time. |
• | Following a difficult first quarter of 2020, spread markets rebounded sharply in the second and third quarters as the Federal Reserve’s (the Fed’s) unprecedented monetary responses—including a near-zero federal funds rate, purchases of mortgage-backed securities and commercial mortgage-backed securities (CMBS), primary and secondary corporate credit facilities, and its Term Asset-Backed Securities Loan Facility—significantly improved market liquidity. With investors willing to take on more risk amid improving economic data and a gradual re-opening of the economy, spreads declined sharply over the last six months of the period. Investment grade spreads and high yield spreads continued to tighten in the third quarter to end the period at 136 basis points (bps) and 541 bps, respectively, but they remained wider than where they began 2020. (One basis point equals 0.01%.) Spreads on high-quality tranches of conduit CMBS continued to tighten but also remained wide of where they began 2020. Meanwhile, AAA-rated tranches of collateralized loan obligations were one of the few assets that revisited pre-COVID levels by the end of the period, having regained the level they were at when 2020 started. |
What worked?
• | Security selection within the fixed income segment of the Fund added to performance, with positions in high yield corporate bonds, CMBS, and US Treasury securities the largest contributors to returns. Within corporate credit, the Fund’s positions in the healthcare & pharmaceutical, telecommunications, and consumer non-cyclical industries added value. |
• | The Fund’s duration positioning also bolstered performance. (Duration measures the sensitivity of the price—the value of principal—of a bond to a change in interest rates.) |
• | Within the US equity segment of the Fund, overweight positions in companies with improving growth prospects and underweight positions in companies with deteriorating growth prospects contributed to results. |
• | In the international equity segment of the Fund, favoring high-growth, high-quality stocks, overall was effective. This strategy was particularly advantageous in the Chinese consumer discretionary and industrials sectors. |
PGIM Balanced Fund | 9 |
Strategy and Performance Overview (continued)
What didn’t work?
• | The equity segment of the Fund underperformed the blended equity benchmark by 5.56% during the reporting period. The fixed income segment underperformed the Bloomberg Barclays US Aggregate Bond Index by 0.53%. |
• | For slower-growing companies, QMA favors stocks that are inexpensive relative to industry peers. During the period, that positioning produced a negative excess return. While more reasonably priced names relative to their earnings and book value started to perform well toward the end of 2019, the COVID-19 pandemic was a major drag on the strategy’s value performance. |
• | Within the fixed income segment of the Fund, overall sector allocation hurt performance, with overweight positions in CMBS, high yield corporate bonds, investment-grade corporate bonds, and emerging markets debt the largest detractors from returns. |
• | Security selection of emerging markets debt and asset-backed securities was negative. In addition, within corporate credit, positions in media & entertainment, gaming & lodging & leisure, and foreign non-corporate bonds also limited results. |
• | Within the fixed income segment, yield curve positioning, principally along the US Treasury curve, detracted from results. Currency selection was also negative. |
• | Asset allocation detracted from performance during the period. This was mainly due to the Fund’s conservative positioning in April 2020, when the S&P 500 Index outperformed the Bloomberg Barclays US Aggregate Bond Index by 11% amid massive uncertainty surrounding COVID-19 and its potential impact on the global economy and corporate earnings. |
Did the Fund use derivatives?
• | The Fund utilized S&P 500 equity futures to equitize cash positions and for liquidity purposes. This exposure had a slightly positive impact on the Fund’s performance during the reporting period. |
• | The US equity sleeves did not hold any derivatives. The international equity sleeve held stock index futures, including Topix (Tokyo Stock Index) futures, DJ Euro Stoxx futures, FTSE 100 futures, and MSCI EAFE mini futures. These derivatives were used to maintain exposure to equities and to provide portfolio liquidity. The futures had minimal impact on performance. |
• | The fixed income sleeve uses derivatives when they facilitate implementation of the overall investment approach. During the period, the Fund used interest rate futures, options, and swaps to help manage duration positioning and yield curve exposure. Over the period, futures and swaps helped performance, while options had a negligible impact. In addition, the Fund traded foreign exchange derivatives, which hurt performance during the period. |
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Current outlook
• | At the end of reporting period, there were signs that global economic growth was slowing, and it remains highly uncertain when the global economy will regain its pre-COVID-19 levels of activity, in QMA’s view. |
• | QMA believes the pace of the global economic recovery will depend on several critical factors: |
• | How the pandemic evolves |
• | How quickly medical breakthroughs (e.g., treatments and vaccines) emerge |
• | Whether or not US-China tensions escalate further |
• | Whether governments continue to provide ample fiscal support |
• | Since the current downturn was sparked by a pandemic—an external shock—rather than a build-up of economic imbalances that precipitated previous downturns, the economy should be better positioned to bounce back more quickly. |
• | During the period, the Fed changed its operating framework, enabling it to target higher inflation during economic recoveries after inflation shortfalls during downturns. QMA thinks this means the Fed will let the US economy run hotter than it would otherwise and that it will delay raising short-term interest rates until inflation picks up. The Fed’s interest rate forecasts suggest it does not expect to raise rates until 2023. |
• | The biggest risk seems to be politics. The US Congress had not yet agreed on another round of fiscal stimulus by the end of the period, and the odds of an agreement before the November election did not appear good. The loss of fiscal support could undercut the US economy’s progress and endanger the recovery. The results of the US presidential election (including the possibility of a delayed result or a contested outcome) and new policies from the subsequent government are other risks that could prove disruptive to the economy. |
• | Massive divergence among equity market segments has been a defining feature of 2020: |
• | Among US equity sectors, information technology and consumer discretionary were up more than 20% by the end of the period, while cyclical sectors such as industrials, financials, and energy had declined. |
• | Growth massively outperformed value, and the US outperformed non-US developed markets and emerging markets. |
• | The macro environment continues to be positive for equities and other risky assets: |
• | Economic growth continues to recover, with lots of spare capacity in both labor markets and industry. |
PGIM Balanced Fund | 11 |
Strategy and Performance Overview (continued)
• | Governments continue to provide massive support with fiscal and monetary largess. |
• | Inflationary pressures are not likely to force authorities to hit the brakes anytime soon. |
• | The Fed’s new operating framework is likely to push real interest rates down even further. |
• | The rebound in economic growth has elevated earning revisions sharply into positive territory. Thus, QMA believes the earnings hole for 2020 won’t be as deep as originally feared, and US earnings should reach new highs by the end of 2021 if consensus forecasts are correct. |
• | The danger is that markets have already moved too far in discounting the improvement in fundamentals, as equity market multiples have reached levels last seen during the technology bubble of the late 1990s. Equity valuations, however, look much less ominous compared to ultra-low/negative rates on cash or sovereign bonds. |
• | Fixed income spread product will likely continue to benefit from central bank buying and the global search for yield. However, spreads are not nearly as attractive as they were and some segments, such as speculative-grade debt, face significant fundamental challenges. |
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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 September 30, 2020. The example is for illustrative purposes only; you should consult the Fund’s 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
PGIM Balanced Fund | 13 |
Fees and Expenses (continued)
and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information 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 Balanced Fund | Beginning Account Value April 1, 2020 | Ending Account Value September 30, 2020 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,198.10 | 1.00 | % | $ | 5.50 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.00 | 1.00 | % | $ | 5.05 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,193.20 | 1.78 | % | $ | 9.76 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.10 | 1.78 | % | $ | 8.97 | ||||||||||
Class R | Actual | $ | 1,000.00 | $ | 1,195.40 | 1.47 | % | $ | 8.07 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.65 | 1.47 | % | $ | 7.41 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,199.20 | 0.77 | % | $ | 4.23 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.15 | 0.77 | % | $ | 3.89 | ||||||||||
Class R6 | Actual | $ | 1,000.00 | $ | 1,199.80 | 0.65 | % | $ | 3.57 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.75 | 0.65 | % | $ | 3.29 |
*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 183 days in the six-month period ended September 30, 2020, and divided by the 366 days in the Fund’s fiscal year ended September 30, 2020 (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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Schedule of Investments
as of September 30, 2020
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 98.7% | ||||||||
COMMON STOCKS 60.1% | ||||||||
Aerospace & Defense 1.1% | ||||||||
Aerojet Rocketdyne Holdings, Inc.* | 800 | $ | 31,912 | |||||
BWX Technologies, Inc. | 7,700 | 433,587 | ||||||
Huntington Ingalls Industries, Inc. | 3,580 | 503,885 | ||||||
Lockheed Martin Corp. | 9,017 | 3,456,036 | ||||||
Moog, Inc. (Class A Stock) | 1,732 | 110,034 | ||||||
Northrop Grumman Corp. | 6,980 | 2,202,120 | ||||||
Raytheon Technologies Corp. | 51,377 | 2,956,233 | ||||||
Vectrus, Inc.* | 2,380 | 90,440 | ||||||
|
| |||||||
9,784,247 | ||||||||
Air Freight & Logistics 0.3% | ||||||||
Atlas Air Worldwide Holdings, Inc.* | 1,500 | 91,350 | ||||||
Deutsche Post AG (Germany) | 20,030 | 910,833 | ||||||
Expeditors International of Washington, Inc. | 9,500 | 859,940 | ||||||
Hub Group, Inc. (Class A Stock)* | 3,680 | 184,717 | ||||||
Radiant Logistics, Inc.* | 14,539 | 74,730 | ||||||
SBS Holdings, Inc. (Japan) | 22,600 | 471,501 | ||||||
SF Holding Co. Ltd. (China) (Class A Stock) | 7,200 | 86,826 | ||||||
SG Holdings Co. Ltd. (Japan) | 3,800 | 197,178 | ||||||
|
| |||||||
2,877,075 | ||||||||
Airlines 0.0% | ||||||||
Mesa Air Group, Inc.* | 9,840 | 29,028 | ||||||
SkyWest, Inc. | 7,460 | 222,756 | ||||||
|
| |||||||
251,784 | ||||||||
Auto Components 0.3% | ||||||||
Adient PLC* | 12,440 | 215,585 | ||||||
Cie Generale des Etablissements Michelin SCA (France) | 912 | 97,227 | ||||||
Dana, Inc. | 1,302 | 16,041 | ||||||
Hyundai Mobis Co. Ltd. (South Korea) | 2,208 | 433,862 | ||||||
Magna International, Inc. (Canada) | 13,200 | 604,015 | ||||||
S&T Motiv Co. Ltd. (South Korea) | 16,058 | 698,884 | ||||||
Tianneng Power International Ltd. (China)(a) | 298,000 | 537,950 | ||||||
TPR Co. Ltd. (Japan) | 9,400 | 114,217 | ||||||
|
| |||||||
2,717,781 | ||||||||
Automobiles 0.4% | ||||||||
Daimler AG (Germany) | 943 | 50,693 |
See Notes to Financial Statements.
PGIM Balanced Fund 15
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Automobiles (cont’d.) | ||||||||
Ford Otomotiv Sanayi A/S (Turkey) | 11,172 | $ | 127,078 | |||||
General Motors Co. | 91,480 | 2,706,893 | ||||||
Kia Motors Corp. (South Korea) | 9,181 | 368,051 | ||||||
Peugeot SA (France)* | 1,897 | 34,392 | ||||||
Toyota Motor Corp. (Japan) | 2,654 | 175,024 | ||||||
|
| |||||||
3,462,131 | ||||||||
Banks 2.5% | ||||||||
Ameris Bancorp | 1,500 | 34,170 | ||||||
Banco do Brasil SA (Brazil) | 102,000 | 539,433 | ||||||
Bancorp, Inc. (The)* | 19,190 | 165,802 | ||||||
Bank Mandiri Persero Tbk PT (Indonesia) | 120,000 | 40,091 | ||||||
Bank of America Corp. | 20,630 | 496,977 | ||||||
Bank of Beijing Co. Ltd. (China) (Class A Stock) | 80,400 | 55,603 | ||||||
Bank of China Ltd. (China) (Class H Stock) | 407,000 | 126,757 | ||||||
Bank of Communications Co. Ltd. (China) (Class H Stock) | 943,000 | 455,866 | ||||||
Bank of Jiangsu Co. Ltd. (China) (Class A Stock) | 50,000 | 44,900 | ||||||
Bank of NT Butterfield & Son Ltd. (The) (Bermuda) | 7,398 | 164,827 | ||||||
Berkshire Hills Bancorp, Inc. | 4,780 | 48,326 | ||||||
BNP Paribas SA (France)* | 22,093 | 800,853 | ||||||
BOC Hong Kong Holdings Ltd. (China) | 19,000 | 50,515 | ||||||
Cadence BanCorp | 18,863 | 162,033 | ||||||
Capstar Financial Holdings, Inc. | 1,800 | 17,658 | ||||||
China CITIC Bank Corp. Ltd. (China) (Class H Stock) | 1,140,000 | 442,298 | ||||||
China Construction Bank Corp. (China) (Class H Stock) | 504,000 | 329,044 | ||||||
China Minsheng Banking Corp. Ltd. (China) (Class H Stock) | 870,000 | 457,346 | ||||||
Citigroup, Inc. | 78,716 | 3,393,447 | ||||||
Civista Bancshares, Inc. | 2,000 | 25,040 | ||||||
CNB Financial Corp. | 1,176 | 17,487 | ||||||
ConnectOne Bancorp, Inc. | 3,199 | 45,010 | ||||||
Credit Agricole SA (France)* | 42,308 | 370,207 | ||||||
Customers Bancorp, Inc.* | 8,860 | 99,232 | ||||||
DBS Group Holdings Ltd. (Singapore) | 47,000 | 690,252 | ||||||
DNB ASA (Norway)* | 40,183 | 554,377 | ||||||
Financial Institutions, Inc. | 7,452 | 114,761 | ||||||
First BanCorp. (Puerto Rico) | 32,700 | 170,694 | ||||||
First Internet Bancorp | 1,588 | 23,391 | ||||||
First Midwest Bancorp, Inc. | 2,400 | 25,872 | ||||||
Flushing Financial Corp. | 2,100 | 22,092 | ||||||
FNB Corp. | 66,960 | 453,989 | ||||||
Great Western Bancorp, Inc. | 900 | 11,205 | ||||||
Hana Financial Group, Inc. (South Korea) | 13,453 | 323,526 | ||||||
Hancock Whitney Corp. | 5,380 | 101,198 | ||||||
Heartland Financial USA, Inc. | 2,680 | 80,387 |
See Notes to Financial Statements.
16
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Banks (cont’d.) | ||||||||
Hilltop Holdings, Inc. | 11,140 | $ | 229,261 | |||||
Hope Bancorp, Inc. | 13,120 | 99,515 | ||||||
Industrial & Commercial Bank of China Ltd. (China) (Class H Stock) | 315,000 | 164,330 | ||||||
Intesa Sanpaolo SpA (Italy)* | 75,577 | 141,891 | ||||||
JPMorgan Chase & Co. | 8,664 | 834,083 | ||||||
KB Financial Group, Inc. (South Korea) | 19,192 | 614,690 | ||||||
Lakeland Bancorp, Inc. | 1,700 | 16,915 | ||||||
Mebuki Financial Group, Inc. (Japan) | 265,804 | 601,445 | ||||||
Mediobanca Banca di Credito Finanziario SpA (Italy) | 5,620 | 44,039 | ||||||
Metropolitan Bank Holding Corp.* | 1,500 | 42,000 | ||||||
Midland States Bancorp, Inc. | 2,600 | 33,410 | ||||||
MidWestOne Financial Group, Inc. | 3,283 | 58,667 | ||||||
Mizuho Financial Group, Inc. (Japan) | 57,460 | 717,517 | ||||||
National Bank of Canada (Canada) | 12,300 | 610,959 | ||||||
OFG Bancorp (Puerto Rico) | 6,587 | 82,074 | ||||||
Old Second Bancorp, Inc. | 4,118 | 30,864 | ||||||
Orrstown Financial Services, Inc. | 887 | 11,354 | ||||||
PacWest Bancorp | 38,760 | 662,021 | ||||||
PCB Bancorp | 1,100 | 9,669 | ||||||
Popular, Inc. (Puerto Rico) | 23,580 | 855,247 | ||||||
QCR Holdings, Inc. | 2,673 | 73,267 | ||||||
RBB Bancorp | 2,700 | 30,618 | ||||||
Royal Bank of Canada (Canada) | 900 | 63,190 | ||||||
Sberbank of Russia PJSC (Russia)* | 54,020 | 158,844 | ||||||
Shanghai Pudong Development Bank Co. Ltd. (China) (Class A Stock) | 30,900 | 42,930 | ||||||
Shinhan Financial Group Co. Ltd. (South Korea) | 23,124 | 542,757 | ||||||
Signature Bank | 1,700 | 141,083 | ||||||
Simmons First National Corp. (Class A Stock) | 12,700 | 201,358 | ||||||
Skandinaviska Enskilda Banken AB (Sweden) (Class A Stock)* | 8,302 | 73,820 | ||||||
Southern National Bancorp of Virginia, Inc. | 5,580 | 48,434 | ||||||
Sumitomo Mitsui Financial Group, Inc. (Japan) | 1,400 | 38,886 | ||||||
Svenska Handelsbanken AB (Sweden) (Class A Stock)* | 56,216 | 470,755 | ||||||
Swedbank AB (Sweden) (Class A Stock)* | 16,335 | 255,976 | ||||||
Synovus Financial Corp. | 8,700 | 184,179 | ||||||
Valley National Bancorp | 12,660 | 86,721 | ||||||
Wells Fargo & Co. | 145,440 | 3,419,294 | ||||||
WesBanco, Inc. | 700 | 14,952 | ||||||
|
| |||||||
22,661,681 | ||||||||
Beverages 0.5% | ||||||||
Carlsberg A/S (Denmark) (Class B Stock) | 852 | 114,802 | ||||||
Coca-Cola European Partners PLC (United Kingdom) | 4,066 | 157,801 |
See Notes to Financial Statements.
PGIM Balanced Fund 17
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Beverages (cont’d.) | ||||||||
Keurig Dr. Pepper, Inc. | 87,905 | $ | 2,426,178 | |||||
Monster Beverage Corp.* | 11,700 | 938,340 | ||||||
National Beverage Corp.*(a) | 2,480 | 168,665 | ||||||
PepsiCo, Inc. | 2,600 | 360,360 | ||||||
|
| |||||||
4,166,146 | ||||||||
Biotechnology 1.7% | ||||||||
AbbVie, Inc. | 41,885 | 3,668,707 | ||||||
Aeglea BioTherapeutics, Inc.* | 4,715 | 33,429 | ||||||
Allogene Therapeutics, Inc.* | 6,200 | 233,802 | ||||||
ALX Oncology Holdings, Inc.* | 300 | 11,322 | ||||||
Arcus Biosciences, Inc.* | 1,500 | 25,710 | ||||||
Athenex, Inc.* | 4,980 | 60,258 | ||||||
Avid Bioservices, Inc.* | 4,400 | 33,528 | ||||||
Biogen, Inc.* | 5,603 | 1,589,459 | ||||||
BioSpecifics Technologies Corp.* | 2,080 | 109,886 | ||||||
Castle Biosciences, Inc.* | 400 | 20,580 | ||||||
Catalyst Pharmaceuticals, Inc.* | 49,120 | 145,886 | ||||||
Coherus Biosciences, Inc.* | 3,800 | 69,692 | ||||||
Concert Pharmaceuticals, Inc.* | 15,097 | 148,253 | ||||||
Cytokinetics, Inc.* | 700 | 15,155 | ||||||
Denali Therapeutics, Inc.* | 500 | 17,915 | ||||||
Dicerna Pharmaceuticals, Inc.* | 9,260 | 166,587 | ||||||
Eagle Pharmaceuticals, Inc.* | 3,180 | 135,086 | ||||||
Emergent BioSolutions, Inc.* | 3,064 | 316,603 | ||||||
FibroGen, Inc.* | 5,362 | 220,486 | ||||||
Gilead Sciences, Inc. | 48,929 | 3,091,824 | ||||||
Halozyme Therapeutics, Inc.* | 4,500 | 118,260 | ||||||
Insmed, Inc.* | 500 | 16,070 | ||||||
Ligand Pharmaceuticals, Inc.*(a) | 2,180 | 207,798 | ||||||
Natera, Inc.* | 5,560 | 401,655 | ||||||
Novavax, Inc.* | 300 | 32,505 | ||||||
OPKO Health, Inc.*(a) | 47,060 | 173,651 | ||||||
PDL BioPharma, Inc.* | 7,280 | 22,932 | ||||||
PTC Therapeutics, Inc.* | 5,080 | 237,490 | ||||||
Puma Biotechnology, Inc.* | 7,760 | 78,298 | ||||||
Regeneron Pharmaceuticals, Inc.* | 400 | 223,912 | ||||||
Retrophin, Inc.* | 12,920 | 238,503 | ||||||
Ultragenyx Pharmaceutical, Inc.* | 3,380 | 277,802 | ||||||
Vanda Pharmaceuticals, Inc.* | 18,677 | 180,420 | ||||||
Vertex Pharmaceuticals, Inc.* | 11,680 | 3,178,362 | ||||||
Xencor, Inc.* | 2,600 | 100,854 | ||||||
|
| |||||||
15,602,680 |
See Notes to Financial Statements.
18
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Building Products 0.5% | ||||||||
American Woodmark Corp.* | 3,180 | $ | 249,757 | |||||
Carrier Global Corp. | 24,517 | 748,749 | ||||||
Cie de Saint-Gobain (France)* | 17,418 | 732,462 | ||||||
Geberit AG (Switzerland) | 192 | 113,622 | ||||||
JELD-WEN Holding, Inc.* | 8,800 | 198,880 | ||||||
Kingspan Group PLC (Ireland)* | 780 | 71,028 | ||||||
Masco Corp. | 44,140 | 2,433,438 | ||||||
PGT Innovations, Inc.* | 1,700 | 29,784 | ||||||
UFP Industries, Inc. | 5,777 | 326,458 | ||||||
|
| |||||||
4,904,178 | ||||||||
Capital Markets 1.6% | ||||||||
Affiliated Managers Group, Inc.(a) | 15,222 | 1,040,880 | ||||||
Ameriprise Financial, Inc. | 17,877 | 2,755,024 | ||||||
B3 SA - Brasil Bolsa Balcao (Brazil) | 10,000 | 98,150 | ||||||
Bank of New York Mellon Corp. (The) | 33,120 | 1,137,341 | ||||||
Brightsphere Investment Group, Inc. | 7,120 | 91,848 | ||||||
CI Financial Corp. (Canada) | 3,300 | 41,859 | ||||||
Credit Suisse Group AG (Switzerland) | 63,909 | 640,101 | ||||||
Deutsche Boerse AG (Germany) | 413 | 72,409 | ||||||
Donnelley Financial Solutions, Inc.* | 3,520 | 47,027 | ||||||
Evercore, Inc. (Class A Stock) | 500 | 32,730 | ||||||
Federated Hermes, Inc. | 10,160 | 218,542 | ||||||
Goldman Sachs Group, Inc. (The) | 15,070 | 3,028,618 | ||||||
Hong Kong Exchanges & Clearing Ltd. (Hong Kong) | 10,400 | 490,340 | ||||||
Magellan Financial Group Ltd. (Australia) | 13,782 | 568,046 | ||||||
Nomura Holdings, Inc. (Japan) | 146,000 | 662,897 | ||||||
Platinum Asset Management Ltd. (Australia) | 56,581 | 124,919 | ||||||
S&P Global, Inc. | 6,680 | 2,408,808 | ||||||
SEI Investments Co. | 9,400 | 476,768 | ||||||
Stifel Financial Corp. | 5,460 | 276,057 | ||||||
UBS Group AG (Switzerland) | 65,549 | 730,723 | ||||||
|
| |||||||
14,943,087 | ||||||||
Chemicals 0.9% | ||||||||
Avient Corp. | 9,160 | 242,374 | ||||||
Celanese Corp.(a) | 4,100 | 440,545 | ||||||
Chr Hansen Holding A/S (Denmark) | 720 | 79,819 | ||||||
Corteva, Inc. | 86,280 | 2,485,727 | ||||||
Fujimi, Inc. (Japan) | 6,600 | 229,912 | ||||||
Hawkins, Inc. | 602 | 27,752 | ||||||
Hengli Petrochemical Co. Ltd. (China) (Class A Stock) | 25,300 | 69,709 | ||||||
Ingevity Corp.* | 1,880 | 92,947 |
See Notes to Financial Statements.
PGIM Balanced Fund 19
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Chemicals (cont’d.) | ||||||||
Koppers Holdings, Inc.* | 2,201 | $ | 46,023 | |||||
Kumho Petrochemical Co. Ltd. (South Korea) | 5,846 | 548,729 | ||||||
Linde PLC (United Kingdom) | 800 | 190,504 | ||||||
LyondellBasell Industries NV (Class A Stock)(a) | 29,580 | 2,085,094 | ||||||
Minerals Technologies, Inc. | 1,200 | 61,320 | ||||||
Orion Engineered Carbons SA (Germany) | 9,460 | 118,345 | ||||||
PQ Group Holdings, Inc.* | 8,002 | 82,100 | ||||||
Sensient Technologies Corp. | 1,600 | 92,384 | ||||||
Sherwin-Williams Co. (The) | 1,200 | 836,088 | ||||||
Stepan Co. | 980 | 106,820 | ||||||
Tessenderlo Group SA (Belgium)* | 1,375 | 51,729 | ||||||
Tokuyama Corp. (Japan) | 17,000 | 409,588 | ||||||
W.R. Grace & Co. | 3,600 | 145,044 | ||||||
|
| |||||||
8,442,553 | ||||||||
Commercial Services & Supplies 0.2% | ||||||||
CECO Environmental Corp.* | 6,468 | 47,152 | ||||||
Country Garden Services Holdings Co. Ltd. (China) | 85,000 | 550,583 | ||||||
Deluxe Corp. | 6,909 | 177,768 | ||||||
Herman Miller, Inc. | 3,300 | 99,528 | ||||||
HNI Corp. | 1,300 | 40,794 | ||||||
Interface, Inc. | 3,680 | 22,522 | ||||||
Knoll, Inc. | 2,165 | 26,110 | ||||||
Matthews International Corp. (Class A Stock) | 1,200 | 26,832 | ||||||
Secom Co. Ltd. (Japan) | 6,900 | 631,227 | ||||||
Tetra Tech, Inc. | 400 | 38,200 | ||||||
|
| |||||||
1,660,716 | ||||||||
Communications Equipment 0.6% | ||||||||
Calix, Inc.* | 3,000 | 53,340 | ||||||
Cisco Systems, Inc. | 115,577 | 4,552,578 | ||||||
Clearfield, Inc.* | 614 | 12,384 | ||||||
NETGEAR, Inc.* | 3,500 | 107,870 | ||||||
NetScout Systems, Inc.* | 9,759 | 213,039 | ||||||
Viavi Solutions, Inc.* | 17,100 | 200,583 | ||||||
|
| |||||||
5,139,794 | ||||||||
Construction & Engineering 0.3% | ||||||||
Arcosa, Inc. | 1,400 | 61,726 | ||||||
Bouygues SA (France) | 1,200 | 41,641 | ||||||
Comfort Systems USA, Inc. | 1,300 | 66,963 | ||||||
EMCOR Group, Inc. | 4,250 | 287,768 |
See Notes to Financial Statements.
20
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Construction & Engineering (cont’d.) | ||||||||
Kyudenko Corp. (Japan) | 7,500 | $ | 216,286 | |||||
MasTec, Inc.* | 4,480 | 189,056 | ||||||
Metallurgical Corp. of China Ltd. (China) (Class A Stock) | 132,000 | 51,678 | ||||||
Obayashi Corp. (Japan) | 4,800 | 43,579 | ||||||
Primoris Services Corp. | 800 | 14,432 | ||||||
Quanta Services, Inc. | 28,351 | 1,498,634 | ||||||
|
| |||||||
2,471,763 | ||||||||
Construction Materials 0.2% | ||||||||
Anhui Conch Cement Co. Ltd. (China) (Class H Stock) | 95,000 | 658,601 | ||||||
Buzzi Unicem SpA (Italy) | 13,220 | 307,743 | ||||||
China National Building Material Co. Ltd. (China) (Class H Stock) | 240,000 | 305,819 | ||||||
Forterra, Inc.* | 4,000 | 47,280 | ||||||
LafargeHolcim Ltd. (Switzerland)* | 13,986 | 636,188 | ||||||
Vicat SA (France) | 3,018 | 101,353 | ||||||
|
| |||||||
2,056,984 | ||||||||
Consumer Finance 0.1% | ||||||||
Navient Corp. | 32,460 | 274,287 | ||||||
OneMain Holdings, Inc. | 9,000 | 281,250 | ||||||
Regional Management Corp.* | 2,100 | 34,986 | ||||||
|
| |||||||
590,523 | ||||||||
Containers & Packaging 0.0% | ||||||||
Greif, Inc. (Class A Stock) | 3,580 | 129,632 | ||||||
Diversified Consumer Services 0.0% | ||||||||
Adtalem Global Education, Inc.* | 600 | 14,724 | ||||||
Offcn Education Technology Co. Ltd. (China) (Class A Stock) | 10,000 | 48,270 | ||||||
Perdoceo Education Corp.* | 4,880 | 59,731 | ||||||
Strategic Education, Inc. | 2,390 | 218,613 | ||||||
|
| |||||||
341,338 | ||||||||
Diversified Financial Services 0.4% | ||||||||
Berkshire Hathaway, Inc. (Class B Stock)* | 10,334 | 2,200,522 | ||||||
Cannae Holdings, Inc.* | 5,080 | 189,281 | ||||||
Equitable Holdings, Inc. | 40,780 | 743,827 | ||||||
Groupe Bruxelles Lambert SA (Belgium) | 576 | 52,011 |
See Notes to Financial Statements.
PGIM Balanced Fund 21
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Diversified Financial Services (cont’d.) | ||||||||
Jefferies Financial Group, Inc. | 8,000 | $ | 144,000 | |||||
M&G PLC (United Kingdom) | 22,500 | 46,254 | ||||||
|
| |||||||
3,375,895 | ||||||||
Diversified Telecommunication Services 1.3% | ||||||||
AT&T, Inc.(a) | 189,456 | 5,401,391 | ||||||
ATN International, Inc. | 1,380 | 69,193 | ||||||
China Unicom Hong Kong Ltd. (China) | 420,000 | 275,967 | ||||||
Cogent Communications Holdings, Inc. | 1,980 | 118,899 | ||||||
Consolidated Communications Holdings, Inc.* | 1,800 | 10,242 | ||||||
Deutsche Telekom AG (Germany) | 17,245 | 288,217 | ||||||
Hellenic Telecommunications Organization SA (Greece) | 32,488 | 467,411 | ||||||
Liberty Latin America Ltd. (Chile) (Class A Stock)* | 1,798 | 14,833 | ||||||
Liberty Latin America Ltd. (Chile) (Class C Stock)* | 5,076 | 41,319 | ||||||
Nippon Telegraph & Telephone Corp. (Japan) | 29,200 | 595,189 | ||||||
Orange SA (France) | 12,380 | 128,833 | ||||||
Verizon Communications, Inc. | 73,000 | 4,342,770 | ||||||
|
| |||||||
11,754,264 | ||||||||
Electric Utilities 0.7% | ||||||||
Chubu Electric Power Co., Inc. (Japan) | 4,300 | 52,304 | ||||||
CK Infrastructure Holdings Ltd. (Hong Kong) | 70,500 | 331,218 | ||||||
Exelon Corp. | 73,328 | 2,622,209 | ||||||
Fortum OYJ (Finland) | 21,534 | 435,941 | ||||||
Iberdrola SA (Spain) | 73,766 | 905,399 | ||||||
Inter RAO UES PJSC (Russia) | 3,377,000 | 243,986 | ||||||
Kansai Electric Power Co., Inc. (The) (Japan) | 4,100 | 39,712 | ||||||
NRG Energy, Inc.(a) | 58,220 | 1,789,683 | ||||||
Otter Tail Corp. | 3,480 | 125,872 | ||||||
Portland General Electric Co. | 413 | 14,661 | ||||||
|
| |||||||
6,560,985 | ||||||||
Electrical Equipment 0.6% | ||||||||
ABB Ltd. (Switzerland) | 28,122 | 714,479 | ||||||
Acuity Brands, Inc. | 19,880 | 2,034,718 | ||||||
Atkore International Group, Inc.* | 7,760 | 176,385 | ||||||
AZZ, Inc. | 800 | 27,296 | ||||||
Eaton Corp. PLC | 2,700 | 275,481 | ||||||
Emerson Electric Co. | 2,300 | 150,811 | ||||||
Encore Wire Corp. | 1,080 | 50,134 | ||||||
Eve Energy Co. Ltd. (China) (Class A Stock) | 6,200 | 45,722 | ||||||
Gunkul Engineering PCL (Thailand) | 5,904,000 | 419,351 |
See Notes to Financial Statements.
22
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Electrical Equipment (cont’d.) | ||||||||
Nitto Kogyo Corp. (Japan) | 5,200 | $ | 103,254 | |||||
nVent Electric PLC | 18,000 | 318,420 | ||||||
Schneider Electric SE (France) | 6,103 | 756,409 | ||||||
WEG SA (Brazil) | 67,500 | 785,952 | ||||||
|
| |||||||
5,858,412 | ||||||||
Electronic Equipment, Instruments & Components 0.3% | ||||||||
ALSO Holding AG (Switzerland)* | 777 | 205,387 | ||||||
Daiwabo Holdings Co. Ltd. (Japan) | 3,800 | 244,741 | ||||||
Delta Electronics, Inc. (Taiwan) | 33,000 | 216,757 | ||||||
ePlus, Inc.* | 1,180 | 86,376 | ||||||
Hexagon AB (Sweden) (Class B Stock)* | 1,054 | 79,498 | ||||||
Hon Hai Precision Industry Co. Ltd. (Taiwan) | 284,000 | 763,317 | ||||||
Lens Technology Co. Ltd. (China) (Class A Stock) | 14,000 | 66,955 | ||||||
LG Innotek Co. Ltd. (South Korea) | 336 | 44,539 | ||||||
Lotes Co. Ltd. (Taiwan) | 29,000 | 466,927 | ||||||
Luxshare Precision Industry Co. Ltd. (China) (Class A Stock) | 11,959 | 101,839 | ||||||
Methode Electronics, Inc. | 2,380 | 67,830 | ||||||
PC Connection, Inc. | 1,785 | 73,292 | ||||||
Sanmina Corp.* | 7,080 | 191,514 | ||||||
ScanSource, Inc.* | 4,580 | 90,821 | ||||||
TDK Corp. (Japan) | 600 | 65,537 | ||||||
|
| |||||||
2,765,330 | ||||||||
Energy Equipment & Services 0.1% | ||||||||
Matrix Service Co.* | 4,932 | 41,182 | ||||||
Oceaneering International, Inc.* | 11,240 | 39,565 | ||||||
TechnipFMC PLC (United Kingdom) | 104,860 | 661,667 | ||||||
|
| |||||||
742,414 | ||||||||
Entertainment 1.0% | ||||||||
Activision Blizzard, Inc. | 39,960 | 3,234,762 | ||||||
AMC Entertainment Holdings, Inc. (Class A Stock) | 2,100 | 9,891 | ||||||
Electronic Arts, Inc.* | 25,780 | 3,361,970 | ||||||
G-bits Network Technology Xiamen Co. Ltd. (China) (Class A Stock) | 700 | 64,505 | ||||||
NetEase, Inc. (China), ADR | 1,700 | 772,939 | ||||||
Nexon Co. Ltd. (Japan) | 25,600 | 638,106 | ||||||
Nintendo Co. Ltd. (Japan) | 1,265 | 718,266 |
See Notes to Financial Statements.
PGIM Balanced Fund 23
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Entertainment (cont’d.) | ||||||||
Soft-World International Corp. (Taiwan) | 38,000 | $ | 113,062 | |||||
Wuhu Sanqi Interactive Entertainment Network Technology Group Co. Ltd. (China) (Class A Stock) | 9,100 | 53,390 | ||||||
|
| |||||||
8,966,891 | ||||||||
Equity Real Estate Investment Trusts (REITs) 1.2% | ||||||||
American Assets Trust, Inc. | 2,200 | 52,998 | ||||||
Apple Hospitality REIT, Inc. | 117,248 | 1,126,753 | ||||||
Charter Hall Group (Australia) | 21,315 | 191,442 | ||||||
Columbia Property Trust, Inc. | 38,420 | 419,162 | ||||||
CoreCivic, Inc. | 39,815 | 318,520 | ||||||
Crown Castle International Corp. | 2,200 | 366,300 | ||||||
Diversified Healthcare Trust | 16,120 | 56,742 | ||||||
Equinix, Inc. | 900 | 684,117 | ||||||
Franklin Street Properties Corp. | 25,121 | 91,943 | ||||||
Gaming & Leisure Properties, Inc. | 64,415 | 2,378,846 | ||||||
GEO Group, Inc. (The) | 19,003 | 215,494 | ||||||
Goodman Group (Australia) | 60,999 | 788,997 | ||||||
Hersha Hospitality Trust | 1,600 | 8,864 | ||||||
Kite Realty Group Trust | 9,795 | 113,426 | ||||||
Klepierre SA (France)(a) | 14,210 | 199,577 | ||||||
Mercialys SA (France) | 46,539 | 257,316 | ||||||
Morguard Real Estate Investment Trust (Canada) | 22,900 | 73,264 | ||||||
National Health Investors, Inc. | 1,880 | 113,308 | ||||||
Office Properties Income Trust | 600 | 12,432 | ||||||
Pebblebrook Hotel Trust | 10,840 | 135,825 | ||||||
Piedmont Office Realty Trust, Inc. (Class A Stock) | 7,360 | 99,875 | ||||||
PotlatchDeltic Corp. | 5,300 | 223,130 | ||||||
RLJ Lodging Trust | 9,998 | 86,583 | ||||||
Sabra Health Care REIT, Inc. | 15,720 | 216,700 | ||||||
Service Properties Trust | 36,240 | 288,108 | ||||||
Stockland (Australia) | 23,780 | 64,782 | ||||||
Urban Edge Properties | 13,740 | 133,553 | ||||||
Urstadt Biddle Properties, Inc. (Class A Stock) | 2,800 | 25,760 | ||||||
Weyerhaeuser Co. | 84,960 | 2,423,059 | ||||||
Xenia Hotels & Resorts, Inc. | 16,066 | 141,059 | ||||||
|
| |||||||
11,307,935 | ||||||||
Food & Staples Retailing 1.1% | ||||||||
Alimentation Couche-Tard, Inc. (Canada) (Class B Stock) | 6,800 | 236,804 | ||||||
BJ’s Wholesale Club Holdings, Inc.* | 5,760 | 239,328 | ||||||
Coles Group Ltd. (Australia) | 33,852 | 413,825 | ||||||
Koninklijke Ahold Delhaize NV (Netherlands) | 29,658 | 878,519 |
See Notes to Financial Statements.
24
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Food & Staples Retailing (cont’d.) | ||||||||
Kroger Co. (The) | 75,200 | $ | 2,550,032 | |||||
PriceSmart, Inc. | 2,980 | 198,021 | ||||||
Walmart, Inc. | 37,429 | 5,236,691 | ||||||
|
| |||||||
9,753,220 | ||||||||
Food Products 1.1% | ||||||||
Archer-Daniels-Midland Co. | 23,800 | 1,106,462 | ||||||
Balrampur Chini Mills Ltd. (India) | 90,183 | 191,273 | ||||||
Conagra Brands, Inc. | 38,960 | 1,391,262 | ||||||
Darling Ingredients, Inc.* | 10,920 | 393,448 | ||||||
Fujian Sunner Development Co. Ltd. (China) (Class A Stock) | 19,400 | 62,793 | ||||||
Indofood Sukses Makmur Tbk PT (Indonesia) | 758,400 | 364,754 | ||||||
John B. Sanfilippo & Son, Inc. | 1,129 | 85,104 | ||||||
Kaveri Seed Co. Ltd. (India)* | 17,119 | 124,174 | ||||||
Kraft Heinz Co. (The)(a) | 78,900 | 2,363,055 | ||||||
Lancaster Colony Corp. | 1,480 | 264,624 | ||||||
Muyuan Foodstuff Co. Ltd. (China) (Class A Stock) | 5,500 | 60,375 | ||||||
Nestle SA (Switzerland) | 9,954 | 1,181,901 | ||||||
Pilgrim’s Pride Corp.*(a) | 42,000 | 628,530 | ||||||
Tyson Foods, Inc. (Class A Stock) | 5,176 | 307,868 | ||||||
Wens Foodstuffs Group Co. Ltd. (China) (Class A Stock) | 16,680 | 48,179 | ||||||
WH Group Ltd. (Hong Kong), 144A | 651,500 | 533,177 | ||||||
Wilmar International Ltd. (China) | 136,500 | 443,101 | ||||||
|
| |||||||
9,550,080 | ||||||||
Gas Utilities 0.3% | ||||||||
Chesapeake Utilities Corp. | 777 | 65,501 | ||||||
GAIL India Ltd. (India) | 399,840 | 472,395 | ||||||
Naturgy Energy Group SA (Spain) | 10,517 | 210,952 | ||||||
New Jersey Resources Corp. | 2,280 | 61,606 | ||||||
ONE Gas, Inc. | 3,080 | 212,551 | ||||||
Snam SpA (Italy) | 8,492 | 43,690 | ||||||
Southwest Gas Holdings, Inc. | 400 | 25,240 | ||||||
Spire, Inc. | 2,307 | 122,732 | ||||||
UGI Corp. | 56,481 | 1,862,743 | ||||||
|
| |||||||
3,077,410 | ||||||||
Health Care Equipment & Supplies 1.6% | ||||||||
Abbott Laboratories | 47,440 | 5,162,895 | ||||||
AngioDynamics, Inc.* | 10,940 | 131,937 | ||||||
Baxter International, Inc. | 9,757 | 784,658 | ||||||
Becton, Dickinson & Co. | 7,400 | 1,721,832 |
See Notes to Financial Statements.
PGIM Balanced Fund 25
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Equipment & Supplies (cont’d.) | ||||||||
CONMED Corp. | 900 | $ | 70,803 | |||||
Danaher Corp. | 10,200 | 2,196,366 | ||||||
Eckert & Ziegler Strahlen- und Medizintechnik AG (Germany) | 1,530 | 78,183 | ||||||
Edwards Lifesciences Corp.* | 10,760 | 858,863 | ||||||
Fisher & Paykel Healthcare Corp. Ltd. (New Zealand) | 8,835 | 194,056 | ||||||
Hartalega Holdings Bhd (Malaysia) | 10,000 | 39,154 | ||||||
Integer Holdings Corp.* | 3,729 | 220,048 | ||||||
Lantheus Holdings, Inc.* | 3,281 | 41,570 | ||||||
Meridian Bioscience, Inc.* | 13,360 | 226,853 | ||||||
Merit Medical Systems, Inc.* | 2,000 | 87,000 | ||||||
Natus Medical, Inc.* | 7,960 | 136,355 | ||||||
Neogen Corp.* | 1,800 | 140,850 | ||||||
ResMed, Inc. | 1,500 | 257,145 | ||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd. (China) (Class A Stock) | 900 | 46,401 | ||||||
STERIS PLC | 3,200 | 563,808 | ||||||
Surmodics, Inc.* | 700 | 27,237 | ||||||
Top Glove Corp. Bhd (Malaysia) | 79,500 | 159,650 | ||||||
West Pharmaceutical Services, Inc. | 5,500 | 1,511,950 | ||||||
|
| |||||||
14,657,614 | ||||||||
Health Care Providers & Services 1.8% | ||||||||
Anthem, Inc. | 12,180 | 3,271,426 | ||||||
Cigna Corp. | 20,033 | 3,393,791 | ||||||
CVS Health Corp.(a) | 23,260 | 1,358,384 | ||||||
Ensign Group, Inc. (The) | 4,280 | 244,217 | ||||||
Fresenius Medical Care AG & Co. KGaA (Germany) | 7,738 | 653,122 | ||||||
Fresenius SE & Co. KGaA (Germany) | 14,085 | 640,356 | ||||||
Humana, Inc. | 6,480 | 2,682,007 | ||||||
Magellan Health, Inc.* | 3,473 | 263,184 | ||||||
McKesson Corp. | 3,800 | 565,934 | ||||||
Medipal Holdings Corp. (Japan) | 28,000 | 560,824 | ||||||
Providence Service Corp. (The)* | 1,600 | 148,656 | ||||||
Qualicorp Consultoria e Corretora de Seguros SA (Brazil) | 31,000 | 188,509 | ||||||
Select Medical Holdings Corp.* | 12,934 | 269,286 | ||||||
Tivity Health, Inc.* | 2,500 | 35,050 | ||||||
Triple-S Management Corp. (Puerto Rico) (Class B Stock)* | 1,500 | 26,805 | ||||||
UnitedHealth Group, Inc. | 5,600 | 1,745,912 | ||||||
Universal Health Services, Inc. (Class B Stock) | 1,900 | 203,338 | ||||||
|
| |||||||
16,250,801 | ||||||||
Health Care Technology 0.1% | ||||||||
Allscripts Healthcare Solutions, Inc.* | 16,981 | 138,225 |
See Notes to Financial Statements.
26
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Technology (cont’d.) | ||||||||
Computer Programs & Systems, Inc. | 2,900 | $ | 80,069 | |||||
HMS Holdings Corp.* | 1,800 | 43,110 | ||||||
Inovalon Holdings, Inc. (Class A Stock)* | 1,300 | 34,385 | ||||||
NextGen Healthcare, Inc.* | 10,975 | 139,822 | ||||||
Omnicell, Inc.* | 3,443 | 257,054 | ||||||
|
| |||||||
692,665 | ||||||||
Hotels, Restaurants & Leisure 0.7% | ||||||||
Biglari Holdings, Inc. (Class B Stock)* | 270 | 24,032 | ||||||
Bloomin’ Brands, Inc. | 7,700 | 117,579 | ||||||
Brinker International, Inc. | 1,076 | 45,967 | ||||||
Century Casinos, Inc.* | 3,077 | 16,862 | ||||||
Chuy’s Holdings, Inc.* | 1,100 | 21,538 | ||||||
Del Taco Restaurants, Inc.* | 11,460 | 93,972 | ||||||
Evolution Gaming Group AB (Sweden), 144A | 9,212 | 611,334 | ||||||
Jack in the Box, Inc. | 700 | 55,517 | ||||||
Kindred Group PLC (Malta), SDR | 78,746 | 572,655 | ||||||
Marriott Vacations Worldwide Corp. | 480 | 43,589 | ||||||
McDonald’s Corp. | 15,980 | 3,507,450 | ||||||
Papa John’s International, Inc. | 980 | 80,634 | ||||||
RCI Hospitality Holdings, Inc. | 9,487 | 193,535 | ||||||
Restaurant Brands International, Inc. (Canada) | 2,900 | 166,567 | ||||||
Texas Roadhouse, Inc. | 2,700 | 164,133 | ||||||
Twin River Worldwide Holdings, Inc. | 2,700 | 70,929 | ||||||
Wingstop, Inc. | 880 | 120,252 | ||||||
Yum China Holdings, Inc. (China) | 9,100 | 481,845 | ||||||
Yum! Brands, Inc. | 1,700 | 155,210 | ||||||
|
| |||||||
6,543,600 | ||||||||
Household Durables 0.5% | ||||||||
Berkeley Group Holdings PLC (United Kingdom) | 10,888 | 592,851 | ||||||
Cavco Industries, Inc.* | 1,100 | 198,341 | ||||||
D.R. Horton, Inc. | 12,900 | 975,627 | ||||||
Husqvarna AB (Sweden) (Class B Stock) | 29,846 | 328,171 | ||||||
M/I Homes, Inc.* | 6,074 | 279,708 | ||||||
Man Wah Holdings Ltd. (Hong Kong) | 262,000 | 351,579 | ||||||
MDC Holdings, Inc. | 1,200 | 56,520 | ||||||
Meritage Homes Corp.* | 2,680 | 295,845 | ||||||
SEB SA (France) | 1,430 | 232,788 | ||||||
Sekisui House Ltd. (Japan) | 5,100 | 89,973 |
See Notes to Financial Statements.
PGIM Balanced Fund 27
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Household Durables (cont’d.) | ||||||||
Sony Corp. (Japan) | 14,950 | $ | 1,141,974 | |||||
TopBuild Corp.* | 1,760 | 300,414 | ||||||
|
| |||||||
4,843,791 | ||||||||
Household Products 1.2% | ||||||||
Henkel AG & Co. KGaA (Germany) | 542 | 50,660 | ||||||
Kimberly-Clark Corp. | 11,300 | 1,668,558 | ||||||
Kimberly-Clark de Mexico SAB de CV (Mexico) (Class A Stock) | 387,000 | 611,527 | ||||||
Procter & Gamble Co. (The) | 58,239 | 8,094,639 | ||||||
Vinda International Holdings Ltd. (Hong Kong) | 71,000 | 233,611 | ||||||
|
| |||||||
10,658,995 | ||||||||
Independent Power & Renewable Electricity Producers 0.4% | ||||||||
AES Corp. (The) | 87,980 | 1,593,318 | ||||||
AES Gener SA (Chile) | 735,582 | 113,373 | ||||||
Atlantic Power Corp.* | 2,425 | 4,753 | ||||||
Vistra Corp. | 85,571 | 1,613,869 | ||||||
|
| |||||||
3,325,313 | ||||||||
Industrial Conglomerates 0.4% | ||||||||
3M Co. | 18,580 | 2,976,144 | ||||||
CITIC Ltd. (China) | 533,000 | 394,130 | ||||||
CK Hutchison Holdings Ltd. (United Kingdom) | 13,657 | 82,723 | ||||||
Shun Tak Holdings Ltd. (Hong Kong) | 924,000 | 297,739 | ||||||
Toshiba Corp. (Japan) | 1,570 | 39,905 | ||||||
|
| |||||||
3,790,641 | ||||||||
Insurance 1.5% | ||||||||
Aflac, Inc.(a) | 45,040 | 1,637,204 | ||||||
Allstate Corp. (The) | 27,180 | 2,558,725 | ||||||
American Equity Investment Life Holding Co. | 2,469 | 54,293 | ||||||
American Financial Group, Inc. | 8,300 | 555,934 | ||||||
Argo Group International Holdings Ltd. | 600 | 20,658 | ||||||
Aviva PLC (United Kingdom) | 173,666 | 638,908 | ||||||
China Life Insurance Co. Ltd. (China) (Class H Stock) | 239,000 | 540,409 | ||||||
CNO Financial Group, Inc. | 7,800 | 125,112 | ||||||
Employers Holdings, Inc. | 1,100 | 33,275 | ||||||
Fubon Financial Holding Co. Ltd. (Taiwan) | 34,000 | 49,467 | ||||||
Genworth Financial, Inc. (Class A Stock)* | 8,060 | 27,001 | ||||||
Great-West Lifeco, Inc. (Canada) | 30,400 | 594,051 | ||||||
Heritage Insurance Holdings, Inc. | 3,380 | 34,206 |
See Notes to Financial Statements.
28
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Insurance (cont’d.) | ||||||||
Japan Post Holdings Co. Ltd. (Japan) | 50,100 | $ | 340,896 | |||||
Japan Post Insurance Co. Ltd. (Japan) | 3,700 | 58,141 | ||||||
Just Group PLC (United Kingdom)* | 70,500 | 40,828 | ||||||
Legal & General Group PLC (United Kingdom) | 30,082 | 72,683 | ||||||
Lincoln National Corp. | 21,080 | 660,436 | ||||||
Manulife Financial Corp. (Canada) | 48,900 | 680,131 | ||||||
MetLife, Inc. | 70,876 | 2,634,461 | ||||||
NN Group NV (Netherlands) | 16,773 | 629,588 | ||||||
Old Republic International Corp. | 21,880 | 322,511 | ||||||
Protective Insurance Corp. (Class B Stock) | 900 | 11,817 | ||||||
Selective Insurance Group, Inc. | 376 | 19,360 | ||||||
Sompo Holdings, Inc. (Japan) | 3,300 | 113,707 | ||||||
Stewart Information Services Corp. | 4,100 | 179,293 | ||||||
Sun Life Financial, Inc. (Canada) | 18,100 | 737,566 | ||||||
T&D Holdings, Inc. (Japan) | 4,600 | 45,180 | ||||||
Third Point Reinsurance Ltd. (Bermuda)* | 2,200 | 15,290 | ||||||
Universal Insurance Holdings, Inc. | 3,500 | 48,440 | ||||||
Wiz Solucoes e Corretagem de Seguros SA (Brazil) | 49,200 | 79,987 | ||||||
|
| |||||||
13,559,558 | ||||||||
Interactive Media & Services 3.0% | ||||||||
Alphabet, Inc. (Class A Stock)* | 4,405 | 6,455,968 | ||||||
Alphabet, Inc. (Class C Stock)* | 4,627 | 6,799,839 | ||||||
Cars.com, Inc.* | 19,680 | 159,014 | ||||||
Facebook, Inc. (Class A Stock)* | 46,614 | 12,208,207 | ||||||
Liberty TripAdvisor Holdings, Inc. (Class A Stock)* | 14,635 | 25,319 | ||||||
QuinStreet, Inc.* | 4,380 | 69,379 | ||||||
Tencent Holdings Ltd. (China) | 22,700 | 1,530,565 | ||||||
|
| |||||||
27,248,291 | ||||||||
Internet & Direct Marketing Retail 3.3% | ||||||||
1-800-Flowers.com, Inc. (Class A Stock)* | 3,700 | 92,278 | ||||||
Alibaba Group Holding Ltd. (China), ADR* | 11,600 | 3,410,168 | ||||||
Amazon.com, Inc.* | 6,897 | 21,716,791 | ||||||
eBay, Inc. | 53,433 | 2,783,859 | ||||||
HelloFresh SE (Germany)* | 13,750 | 767,133 | ||||||
JD.com, Inc. (China), ADR* | 14,500 | 1,125,345 | ||||||
Overstock.com, Inc.* | 1,500 | 108,975 | ||||||
Stamps.com, Inc.* | 1,260 | 303,597 | ||||||
|
| |||||||
30,308,146 |
See Notes to Financial Statements.
PGIM Balanced Fund 29
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
IT Services 2.5% | ||||||||
Accenture PLC (Class A Stock) | 22,230 | $ | 5,023,758 | |||||
Amdocs Ltd. | 20,780 | 1,192,980 | ||||||
Automatic Data Processing, Inc. | 4,700 | 655,603 | ||||||
Bechtle AG (Germany) | 1,951 | 394,473 | ||||||
CACI International, Inc. (Class A Stock)* | 5,800 | 1,236,328 | ||||||
Cognizant Technology Solutions Corp. (Class A Stock) | 49,540 | 3,439,067 | ||||||
EPAM Systems, Inc.* | 2,200 | 711,216 | ||||||
Euronet Worldwide, Inc.* | 3,100 | 282,410 | ||||||
Fujitsu Ltd. (Japan) | 6,130 | 838,867 | ||||||
Hackett Group, Inc. (The) | 4,480 | 50,086 | ||||||
HCL Technologies Ltd. (India) | 21,688 | 239,665 | ||||||
Infosys Ltd. (India) | 17,380 | 240,070 | ||||||
International Business Machines Corp.(a) | 13,654 | 1,661,282 | ||||||
KBR, Inc. | 11,239 | 251,304 | ||||||
MAXIMUS, Inc. | 780 | 53,360 | ||||||
Obic Co. Ltd. (Japan) | 3,000 | 526,819 | ||||||
PayPal Holdings, Inc.* | 20,480 | 4,035,174 | ||||||
Perspecta, Inc. | 8,212 | �� | 159,723 | |||||
Science Applications International Corp. | 5,400 | 423,468 | ||||||
Sopra Steria Group (France)* | 1,428 | 227,235 | ||||||
VeriSign, Inc.* | 1,400 | 286,790 | ||||||
Visa, Inc. (Class A Stock)(a) | 4,275 | 854,872 | ||||||
Wipro Ltd. (India) | 94,276 | 401,810 | ||||||
|
| |||||||
23,186,360 | ||||||||
Leisure Products 0.2% | ||||||||
Brunswick Corp. | 10,460 | 616,198 | ||||||
Johnson Outdoors, Inc. (Class A Stock) | 302 | 24,731 | ||||||
Malibu Boats, Inc. (Class A Stock)* | 3,780 | 187,337 | ||||||
MasterCraft Boat Holdings, Inc.* | 2,159 | 37,761 | ||||||
Shimano, Inc. (Japan) | 2,100 | 413,206 | ||||||
Smith & Wesson Brands, Inc. | 11,440 | 177,549 | ||||||
|
| |||||||
1,456,782 | ||||||||
Life Sciences Tools & Services 0.4% | ||||||||
Medpace Holdings, Inc.* | 2,080 | 232,440 | ||||||
Sartorius Stedim Biotech (France) | 2,032 | 701,264 | ||||||
Thermo Fisher Scientific, Inc. | 6,973 | 3,078,719 | ||||||
|
| |||||||
4,012,423 | ||||||||
Machinery 0.8% | ||||||||
AGCO Corp. | 10,000 | 742,700 |
See Notes to Financial Statements.
30
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Machinery (cont’d.) | ||||||||
Allison Transmission Holdings, Inc. | 6,200 | $ | 217,868 | |||||
Altra Industrial Motion Corp. | 6,260 | 231,432 | ||||||
Astec Industries, Inc. | 500 | 27,125 | ||||||
Atlas Copco AB (Sweden) (Class A Stock) | 19,472 | 928,796 | ||||||
Atlas Copco AB (Sweden) (Class B Stock) | 2,056 | 85,799 | ||||||
CIRCOR International, Inc.* | 600 | 16,410 | ||||||
Crane Co. | 4,300 | 215,559 | ||||||
Gates Industrial Corp. PLC*(a) | 85,024 | 945,467 | ||||||
Jiangsu Hengli Hydraulic Co. Ltd. (China) (Class A Stock) | 7,400 | 78,221 | ||||||
Kone OYJ (Finland) (Class B Stock) | 6,257 | 549,450 | ||||||
L.B. Foster Co. (Class A Stock)* | 1,000 | 13,420 | ||||||
Mueller Industries, Inc. | 1,280 | 34,637 | ||||||
Oshkosh Corp. | 28,824 | 2,118,564 | ||||||
Park-Ohio Holdings Corp. | 700 | 11,249 | ||||||
Pentair PLC | 4,700 | 215,119 | ||||||
Rexnord Corp. | 8,260 | 246,478 | ||||||
Sany Heavy Industry Co. Ltd. (China) (Class A Stock) | 19,800 | 73,056 | ||||||
Shyft Group, Inc. (The) | 7,060 | 133,293 | ||||||
SPX Corp.* | 5,360 | 248,597 | ||||||
Standex International Corp. | 1,680 | 99,456 | ||||||
Techtronic Industries Co. Ltd. (Hong Kong) | 11,000 | 146,521 | ||||||
Zhejiang Dingli Machinery Co. Ltd. (China) (Class A Stock) | 3,000 | 44,107 | ||||||
Zoomlion Heavy Industry Science & Technology Co. Ltd. (China) (Class A Stock)* | 65,600 | 78,773 | ||||||
|
| |||||||
7,502,097 | ||||||||
Marine 0.0% | ||||||||
Costamare, Inc. (Monaco) | 10,940 | 66,406 | ||||||
D/S Norden A/S (Denmark) | 6,221 | 100,903 | ||||||
Matson, Inc. | 1,600 | 64,144 | ||||||
|
| |||||||
231,453 | ||||||||
Media 0.3% | ||||||||
Comcast Corp. (Class A Stock) | 14,153 | 654,718 | ||||||
Discovery, Inc. (Class A Stock)*(a) | 6,600 | 143,682 | ||||||
Discovery, Inc. (Class C Stock)* | 35,070 | 687,372 | ||||||
Entercom Communications Corp. (Class A Stock) | 12,255 | 19,731 | ||||||
Gray Television, Inc.* | 9,360 | 128,887 | ||||||
KT Skylife Co. Ltd. (South Korea) | 21,253 | 169,220 | ||||||
Telenet Group Holding NV (Belgium) | 7,168 | 278,424 | ||||||
ViacomCBS, Inc. (Class B Stock)(a) | 30,571 | 856,294 | ||||||
|
| |||||||
2,938,328 |
See Notes to Financial Statements.
PGIM Balanced Fund 31
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Metals & Mining 1.1% | ||||||||
Anglo American Platinum Ltd. (South Africa) | 9,735 | $ | 675,485 | |||||
Anglo American PLC (South Africa) | 32,353 | 779,724 | ||||||
Barrick Gold Corp. (Canada) | 4,700 | 132,012 | ||||||
BHP Group Ltd. (Australia) | 15,493 | 395,992 | ||||||
BHP Group PLC (Australia) | 39,832 | 848,716 | ||||||
Commercial Metals Co. | 1,300 | 25,974 | ||||||
Compass Minerals International, Inc. | 380 | 22,553 | ||||||
Fortescue Metals Group Ltd. (Australia) | 65,857 | 773,037 | ||||||
Impala Platinum Holdings Ltd. (South Africa) | 54,948 | 475,496 | ||||||
KGHM Polska Miedz SA (Poland)* | 22,115 | 673,398 | ||||||
Newcrest Mining Ltd. (Australia) | 2,470 | 55,321 | ||||||
Newmont Corp. | 44,860 | 2,846,367 | ||||||
Rio Tinto Ltd. (Australia) | 1,960 | 132,918 | ||||||
Rio Tinto PLC (Australia) | 8,216 | 493,351 | ||||||
Ryerson Holding Corp.* | 10,344 | 59,271 | ||||||
Steel Dynamics, Inc. | 36,120 | 1,034,116 | ||||||
Worthington Industries, Inc. | 5,660 | 230,815 | ||||||
|
| |||||||
9,654,546 | ||||||||
Mortgage Real Estate Investment Trusts (REITs) 0.4% | ||||||||
Annaly Capital Management, Inc. | 245,980 | 1,751,378 | ||||||
Chimera Investment Corp. | 24,580 | 201,556 | ||||||
Colony Credit Real Estate, Inc. | 18,400 | 90,344 | ||||||
Great Ajax Corp. | 2,800 | 23,212 | ||||||
Ready Capital Corp. | 10,940 | 122,528 | ||||||
Starwood Property Trust, Inc. | 71,880 | 1,084,669 | ||||||
TPG RE Finance Trust, Inc. | 13,520 | 114,379 | ||||||
|
| |||||||
3,388,066 | ||||||||
Multiline Retail 0.3% | ||||||||
Target Corp. | 18,500 | 2,912,270 | ||||||
Multi-Utilities 0.6% | ||||||||
MDU Resources Group, Inc. | 34,460 | 775,350 | ||||||
Public Service Enterprise Group, Inc. | 42,960 | 2,358,933 | ||||||
Sempra Energy | 21,080 | 2,495,029 | ||||||
|
| |||||||
5,629,312 | ||||||||
Oil, Gas & Consumable Fuels 1.0% | ||||||||
Ardmore Shipping Corp. (Ireland) | 20,880 | 74,333 | ||||||
Berry Corp. | 8,860 | 28,086 | ||||||
Canadian Natural Resources Ltd. (Canada) | 39,700 | 636,250 |
See Notes to Financial Statements.
32
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Oil, Gas & Consumable Fuels (cont’d.) | ||||||||
Cimarex Energy Co. | 22,100 | $ | 537,693 | |||||
DHT Holdings, Inc. | 6,480 | 33,437 | ||||||
Diamond S Shipping, Inc.* | 9,760 | 67,051 | ||||||
Ecopetrol SA (Colombia) | 653,507 | 323,594 | ||||||
Euronav NV (Belgium) | 47,259 | 419,274 | ||||||
Exxon Mobil Corp. | 32,440 | 1,113,665 | ||||||
International Seaways, Inc. | 5,180 | 75,680 | ||||||
Kinder Morgan, Inc. | 149,424 | 1,842,398 | ||||||
LUKOIL PJSC (Russia) | 6,948 | 402,259 | ||||||
Neste OYJ (Finland) | 15,722 | 825,710 | ||||||
Petroleo Brasileiro SA (Brazil) | 19,400 | 68,606 | ||||||
Phillips 66 | 9,060 | 469,670 | ||||||
Pioneer Natural Resources Co. | 8,000 | 687,920 | ||||||
Renewable Energy Group, Inc.* | 2,000 | 106,840 | ||||||
Rosneft Oil Co. PJSC (Russia) | 32,000 | 158,841 | ||||||
Royal Dutch Shell PLC (Netherlands) (Class A Stock) | 21,626 | 268,620 | ||||||
Surgutneftegas PJSC (Russia) | 709,200 | 317,234 | ||||||
TC Energy Corp. (Canada) | 15,400 | 646,510 | ||||||
TOTAL SE (France) | 7,504 | 256,025 | ||||||
World Fuel Services Corp. | 8,849 | 187,510 | ||||||
|
| |||||||
9,547,206 | ||||||||
Paper & Forest Products 0.0% | ||||||||
Boise Cascade Co. | 5,460 | 217,963 | ||||||
Louisiana-Pacific Corp. | 1,000 | 29,510 | ||||||
Neenah, Inc. | 400 | 14,988 | ||||||
Schweitzer-Mauduit International, Inc. | 2,100 | 63,819 | ||||||
|
| |||||||
326,280 | ||||||||
Personal Products 0.2% | ||||||||
Edgewell Personal Care Co.* | 2,738 | 76,335 | ||||||
Hengan International Group Co. Ltd. (China) | 8,000 | 58,502 | ||||||
Industri Jamu Dan Farmasi Sido Muncul Tbk PT (Indonesia) | 2,803,000 | 140,673 | ||||||
Nu Skin Enterprises, Inc. (Class A Stock) | 3,700 | 185,333 | ||||||
TCI Co. Ltd. (Taiwan) | 61,000 | 572,314 | ||||||
Unilever NV (United Kingdom) | 6,280 | 378,796 | ||||||
Unilever PLC (United Kingdom) | 6,149 | 378,513 | ||||||
USANA Health Sciences, Inc.* | 1,080 | 79,542 | ||||||
|
| |||||||
1,870,008 | ||||||||
Pharmaceuticals 3.2% | ||||||||
Amneal Pharmaceuticals, Inc.* | 33,060 | 128,273 |
See Notes to Financial Statements.
PGIM Balanced Fund 33
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Pharmaceuticals (cont’d.) | ||||||||
Amphastar Pharmaceuticals, Inc.* | 3,800 | $ | 71,250 | |||||
Astellas Pharma, Inc. (Japan) | 42,800 | 637,719 | ||||||
AstraZeneca PLC (United Kingdom) | 1,027 | 112,132 | ||||||
Bayer AG (Germany) | 1,593 | 98,099 | ||||||
Bristol-Myers Squibb Co. | 80,500 | 4,853,345 | ||||||
Chugai Pharmaceutical Co. Ltd. (Japan) | 2,100 | 94,202 | ||||||
Corcept Therapeutics, Inc.* | 1,800 | 31,329 | ||||||
Eli Lilly & Co. | 24,980 | 3,697,540 | ||||||
Endo International PLC* | 11,240 | 37,092 | ||||||
GlaxoSmithKline PLC (United Kingdom) | 53,559 | 1,002,006 | ||||||
Innoviva, Inc.* | 1,800 | 18,810 | ||||||
Johnson & Johnson | 22,649 | 3,371,983 | ||||||
Merck & Co., Inc. | 60,665 | 5,032,162 | ||||||
Novartis AG (Switzerland) | 18,170 | 1,575,175 | ||||||
Ono Pharmaceutical Co. Ltd. (Japan) | 21,600 | 680,592 | ||||||
Osmotica Pharmaceuticals PLC* | 3,900 | 21,099 | ||||||
Otsuka Holdings Co. Ltd. (Japan) | 14,980 | 634,047 | ||||||
Pfizer, Inc. | 77,580 | 2,847,186 | ||||||
Prestige Consumer Healthcare, Inc.* | 6,060 | 220,705 | ||||||
Roche Holding AG (Switzerland) | 5,420 | 1,856,595 | ||||||
Sanofi (France) | 11,133 | 1,113,069 | ||||||
Shionogi & Co. Ltd. (Japan) | 8,420 | 450,555 | ||||||
Supernus Pharmaceuticals, Inc.* | 9,060 | 188,810 | ||||||
|
| |||||||
28,773,775 | ||||||||
Professional Services 0.2% | ||||||||
ASGN, Inc.* | 2,980 | 189,409 | ||||||
Barrett Business Services, Inc. | 3,063 | 160,624 | ||||||
BayCurrent Consulting, Inc. (Japan) | 1,800 | 250,746 | ||||||
Heidrick & Struggles International, Inc. | 1,800 | 35,370 | ||||||
Kelly Services, Inc. (Class A Stock) | 1,600 | 27,264 | ||||||
Kforce, Inc. | 5,280 | 169,857 | ||||||
Nihon M&A Center, Inc. (Japan) | 11,900 | 680,485 | ||||||
TriNet Group, Inc.* | 1,700 | 100,844 | ||||||
|
| |||||||
1,614,599 | ||||||||
Real Estate Management & Development 0.2% | ||||||||
CK Asset Holdings Ltd. (Hong Kong) | 13,000 | 63,795 | ||||||
Cushman & Wakefield PLC* | 7,528 | 79,119 | ||||||
Deutsche Wohnen SE (Germany) | 13,569 | 678,429 | ||||||
DREAM Unlimited Corp. (Canada) (Class A Stock) | 13,150 | 192,083 | ||||||
Greenland Holdings Corp. Ltd. (China) (Class A Stock) | 48,600 | 45,872 | ||||||
Newmark Group, Inc. (Class A Stock) | 3,491 | 15,081 |
See Notes to Financial Statements.
34
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Real Estate Management & Development (cont’d.) | ||||||||
Poly Developments & Holdings Group Co. Ltd. (China) (Class A Stock) | 29,800 | $ | 70,193 | |||||
RMR Group, Inc. (The) (Class A Stock) | 463 | 12,719 | ||||||
Selvaag Bolig ASA (Norway) | 12,369 | 68,871 | ||||||
Shimao Group Holdings Ltd. (China) | 77,000 | 320,923 | ||||||
Vonovia SE (Germany) | 2,624 | 179,862 | ||||||
|
| |||||||
1,726,947 | ||||||||
Road & Rail 0.7% | ||||||||
Canadian National Railway Co. (Canada) | 2,100 | 223,650 | ||||||
Canadian Pacific Railway Ltd. (Canada) | 3,000 | 912,583 | ||||||
CSX Corp. | 31,660 | 2,459,032 | ||||||
Old Dominion Freight Line, Inc. | 3,000 | 542,760 | ||||||
Saia, Inc.* | 980 | 123,617 | ||||||
Union Pacific Corp. | 10,880 | 2,141,946 | ||||||
Werner Enterprises, Inc. | 5,660 | 237,663 | ||||||
|
| |||||||
6,641,251 | ||||||||
Semiconductors & Semiconductor Equipment 2.9% | ||||||||
Amkor Technology, Inc.* | 4,500 | 50,400 | ||||||
Applied Materials, Inc. | 49,124 | 2,920,422 | ||||||
ASML Holding NV (Netherlands) | 251 | 92,570 | ||||||
Brooks Automation, Inc. | 4,960 | 229,450 | ||||||
Cabot Microelectronics Corp. | 600 | 85,686 | ||||||
DB HiTek Co. Ltd. (South Korea) | 5,150 | 166,156 | ||||||
Dialog Semiconductor PLC (United Kingdom)* | 12,528 | 546,560 | ||||||
FormFactor, Inc.* | 8,760 | 218,387 | ||||||
Intel Corp.(a) | 112,588 | 5,829,807 | ||||||
KLA Corp. | 12,100 | 2,344,254 | ||||||
LONGi Green Energy Technology Co. Ltd. (China) (Class A Stock) | 6,200 | 69,147 | ||||||
MediaTek, Inc. (Taiwan) | 19,000 | 402,109 | ||||||
Micron Technology, Inc.* | 58,640 | 2,753,734 | ||||||
MKS Instruments, Inc. | 6,200 | 677,226 | ||||||
NVIDIA Corp. | 9,680 | 5,239,009 | ||||||
Photronics, Inc.* | 2,980 | 29,681 | ||||||
Semtech Corp.* | 4,680 | 247,853 | ||||||
Skyworks Solutions, Inc. | 9,800 | 1,425,900 | ||||||
STMicroelectronics NV (Switzerland) | 5,118 | 157,338 | ||||||
Synaptics, Inc.* | 2,180 | 175,316 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) | 125,000 | 1,888,463 | ||||||
Teradyne, Inc. | 7,500 | 595,950 | ||||||
Tokyo Electron Ltd. (Japan) | 1,995 | 520,464 |
See Notes to Financial Statements.
PGIM Balanced Fund 35
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Semiconductors & Semiconductor Equipment (cont’d.) | ||||||||
Ultra Clean Holdings, Inc.* | 8,360 | $ | 179,406 | |||||
United Microelectronics Corp. (Taiwan) | 58,000 | 57,623 | ||||||
|
| |||||||
26,902,911 | ||||||||
Software 4.8% | ||||||||
A10 Networks, Inc.* | 3,580 | 22,805 | ||||||
ACI Worldwide, Inc.* | 4,679 | 122,262 | ||||||
Adobe, Inc.* | 7,478 | 3,667,435 | ||||||
Asseco Poland SA (Poland) | 4,002 | 72,087 | ||||||
Avaya Holdings Corp.* | 10,540 | 160,208 | ||||||
Blackbaud, Inc. | 1,780 | 99,377 | ||||||
Box, Inc. (Class A Stock)* | 9,540 | 165,614 | ||||||
Cadence Design Systems, Inc.* | 4,800 | 511,824 | ||||||
ChannelAdvisor Corp.* | 5,280 | 76,402 | ||||||
Check Point Software Technologies Ltd. (Israel)*(a) | 5,800 | 697,972 | ||||||
Cloudera, Inc.* | 19,900 | 216,711 | ||||||
CommVault Systems, Inc.* | 1,100 | 44,880 | ||||||
Ebix, Inc. | 3,880 | 79,928 | ||||||
eGain Corp.* | 1,400 | 19,838 | ||||||
Envestnet, Inc.* | 2,200 | 169,752 | ||||||
Fortinet, Inc.* | 1,300 | 153,153 | ||||||
Hundsun Technologies, Inc. (China) (Class A Stock) | 4,550 | 66,559 | ||||||
Intuit, Inc. | 11,078 | 3,613,754 | ||||||
J2 Global, Inc.* | 3,780 | 261,652 | ||||||
Microsoft Corp. | 124,866 | 26,263,066 | ||||||
MicroStrategy, Inc. (Class A Stock)* | 1,180 | 177,661 | ||||||
NortonLifeLock, Inc. | 10,000 | 208,400 | ||||||
OneSpan, Inc.* | 3,280 | 68,749 | ||||||
Oracle Corp. | 67,718 | 4,042,765 | ||||||
Oracle Corp. (Japan) | 4,500 | 485,300 | ||||||
Progress Software Corp. | 6,143 | 225,325 | ||||||
QAD, Inc. (Class A Stock) | 300 | 12,660 | ||||||
SAP SE (Germany) | 959 | 149,036 | ||||||
ServiceNow, Inc.* | 4,100 | 1,988,500 | ||||||
SPS Commerce, Inc.* | 4,176 | 325,185 | ||||||
|
| |||||||
44,168,860 | ||||||||
Specialty Retail 1.7% | ||||||||
Aaron’s, Inc. | 400 | 22,660 | ||||||
Asbury Automotive Group, Inc.* | 2,880 | 280,656 | ||||||
AutoNation, Inc.*(a) | 15,980 | 845,821 | ||||||
Buckle, Inc. (The) | 4,000 | 81,560 | ||||||
Group 1 Automotive, Inc. | 2,750 | 243,073 |
See Notes to Financial Statements.
36
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Specialty Retail (cont’d.) | ||||||||
Hibbett Sports, Inc.* | 600 | $ | 23,532 | |||||
Home Depot, Inc. (The) | 22,358 | 6,209,040 | ||||||
Hornbach Holding AG & Co. KGaA (Germany) | 1,878 | 219,082 | ||||||
JD Sports Fashion PLC (United Kingdom) | 55,963 | 583,668 | ||||||
JUMBO SA (Greece) | 13,470 | 235,456 | ||||||
Lowe’s Cos., Inc. | 29,360 | 4,869,650 | ||||||
MarineMax, Inc.* | 1,200 | 30,804 | ||||||
Murphy USA, Inc.* | 1,880 | 241,148 | ||||||
Nitori Holdings Co. Ltd. (Japan) | 3,100 | 643,925 | ||||||
O’Reilly Automotive, Inc.* | 2,600 | 1,198,808 | ||||||
Sleep Number Corp.* | 500 | 24,455 | ||||||
Sonic Automotive, Inc. (Class A Stock) | 4,864 | 195,338 | ||||||
|
| |||||||
15,948,676 | ||||||||
Technology Hardware, Storage & Peripherals 3.5% | ||||||||
Apple, Inc. | 260,624 | 30,182,865 | ||||||
Asustek Computer, Inc. (Taiwan) | 6,000 | 52,716 | ||||||
Lite-On Technology Corp. (Taiwan) | 26,000 | 41,525 | ||||||
Logitech International SA (Switzerland) | 851 | 65,632 | ||||||
MCJ Co. Ltd. (Japan) | 45,600 | 416,960 | ||||||
Pegatron Corp. (Taiwan) | 291,000 | 646,031 | ||||||
Quanta Computer, Inc. (Taiwan) | 18,000 | 47,263 | ||||||
Samsung Electronics Co. Ltd. (South Korea) | 13,306 | 661,530 | ||||||
Wistron Corp. (Taiwan) | 42,000 | 43,472 | ||||||
|
| |||||||
32,157,994 | ||||||||
Textiles, Apparel & Luxury Goods 0.1% | ||||||||
Deckers Outdoor Corp.* | 1,690 | 371,817 | ||||||
LVMH Moet Hennessy Louis Vuitton SE (France) | 181 | 84,641 | ||||||
|
| |||||||
456,458 | ||||||||
Thrifts & Mortgage Finance 0.1% | ||||||||
Axos Financial, Inc.* | 2,700 | 62,937 | ||||||
Flagstar Bancorp, Inc. | 1,200 | 35,556 | ||||||
Merchants Bancorp | 1,413 | 27,850 | ||||||
Meta Financial Group, Inc. | 1,400 | 26,908 | ||||||
MGIC Investment Corp. | 1,480 | 13,113 | ||||||
Mr. Cooper Group, Inc.* | 10,760 | 240,163 | ||||||
OP Bancorp | 2,672 | 15,284 |
See Notes to Financial Statements.
PGIM Balanced Fund 37
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Thrifts & Mortgage Finance (cont’d.) | ||||||||
PennyMac Financial Services, Inc. | 4,080 | $ | 237,130 | |||||
Sterling Bancorp, Inc. | 4,922 | 14,815 | ||||||
|
| |||||||
673,756 | ||||||||
Tobacco 0.7% | ||||||||
Altria Group, Inc. | 89,480 | 3,457,507 | ||||||
British American Tobacco PLC (United Kingdom) | 28,817 | 1,034,288 | ||||||
Imperial Brands PLC (United Kingdom) | 34,611 | 610,678 | ||||||
Japan Tobacco, Inc. (Japan) | 36,573 | 667,086 | ||||||
KT&G Corp. (South Korea) | 2,170 | 152,538 | ||||||
Scandinavian Tobacco Group A/S (Denmark), 144A | 37,266 | 552,631 | ||||||
|
| |||||||
6,474,728 | ||||||||
Trading Companies & Distributors 0.2% | ||||||||
Applied Industrial Technologies, Inc. | 2,080 | 114,608 | ||||||
Brenntag AG (Germany) | 759 | 48,197 | ||||||
Bunzl PLC (United Kingdom) | 1,633 | 52,724 | ||||||
Ferguson PLC | 7,580 | 763,904 | ||||||
Foundation Building Materials, Inc.* | 3,500 | 55,020 | ||||||
GMS, Inc.* | 10,640 | 256,424 | ||||||
LG International Corp. (South Korea) | 13,316 | 175,928 | ||||||
Mitsui & Co. Ltd. (Japan) | 8,500 | 145,897 | ||||||
MonotaRO Co. Ltd. (Japan) | 1,100 | 54,617 | ||||||
Univar Solutions, Inc.* | 14,700 | 248,136 | ||||||
Veritiv Corp.* | 300 | 3,798 | ||||||
|
| |||||||
1,919,253 | ||||||||
Transportation Infrastructure 0.0% | ||||||||
MMC Corp. Bhd (Malaysia) | 458,200 | 81,798 | ||||||
Westshore Terminals Investment Corp. (Canada) | 13,100 | 149,639 | ||||||
|
| |||||||
231,437 | ||||||||
Water Utilities 0.0% | ||||||||
American States Water Co. | 2,980 | 223,351 | ||||||
Artesian Resources Corp. (Class A Stock) | 705 | 24,301 | ||||||
|
| |||||||
247,652 | ||||||||
Wireless Telecommunication Services 0.2% | ||||||||
America Movil SAB de CV (Mexico) (Class L Stock) | 705,900 | 440,878 | ||||||
China Mobile Ltd. (China) | 43,000 | 276,491 |
See Notes to Financial Statements.
38
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Wireless Telecommunication Services (cont’d.) | ||||||||
Globe Telecom, Inc. (Philippines) | 1,985 | $ | 85,201 | |||||
KDDI Corp. (Japan) | 28,400 | 716,059 | ||||||
PLDT, Inc. (Philippines) | 14,850 | 411,097 | ||||||
SoftBank Corp. (Japan) | 9,800 | 109,547 | ||||||
Vodacom Group Ltd. (South Africa) | 13,865 | 101,873 | ||||||
|
| |||||||
2,141,146 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 550,530,918 | |||||||
|
| |||||||
EXCHANGE-TRADED FUNDS 0.2% | ||||||||
iShares MSCI EAFE ETF | 19,100 | 1,215,715 | ||||||
iShares MSCI Emerging Markets ETF(a) | 10,500 | 462,945 | ||||||
|
| |||||||
TOTAL EXCHANGE-TRADED FUNDS | 1,678,660 | |||||||
|
| |||||||
PREFERRED STOCKS 0.1% | ||||||||
Banks 0.0% | ||||||||
Citigroup Capital XIII, 6.638%, Maturity Date 10/30/2040 | 3,000 | 80,940 | ||||||
Capital Markets 0.0% | ||||||||
State Street Corp. 5.350%, Series G, Maturity Date 03/15/2026 | 5,000 | 138,650 | ||||||
Electric Utilities 0.1% | ||||||||
Cia Paranaense de Energia (Brazil) (PRFC B) | 43,100 | 477,286 | ||||||
Technology Hardware, Storage & Peripherals 0.0% | ||||||||
Samsung Electronics Co. Ltd. (South Korea) (PRFC) | 4,320 | 186,121 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 882,997 | |||||||
|
|
Interest Rate | Maturity Date | Principal Amount (000)# | ||||||||||||||
ASSET-BACKED SECURITIES 5.0% | ||||||||||||||||
Automobiles 1.5% | ||||||||||||||||
AmeriCredit Automobile Receivables Trust, |
| |||||||||||||||
Series 2018-01, Class C | 3.500% | 01/18/24 | 300 | 312,065 | ||||||||||||
Series 2019-01, Class B | 3.130 | 02/18/25 | 100 | 103,799 | ||||||||||||
Series 2019-01, Class C | 3.360 | 02/18/25 | 200 | 211,057 |
See Notes to Financial Statements.
PGIM Balanced Fund 39
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Automobiles (cont’d.) | ||||||||||||||||
AmeriCredit Automobile Receivables Trust, (cont’d.) | ||||||||||||||||
Series 2019-02, Class C | 2.740% | 04/18/25 | 300 | $ | 312,939 | |||||||||||
Series 2019-03, Class C | 2.320 | 07/18/25 | 800 | 825,162 | ||||||||||||
Series 2020-01, Class B | 1.480 | 01/21/25 | 500 | 508,489 | ||||||||||||
Series 2020-02, Class D | 2.130 | 03/18/26 | 100 | 101,281 | ||||||||||||
Avis Budget Rental Car Funding AESOP LLC, | ||||||||||||||||
Series 2018-02A, Class A, 144A | 4.000 | 03/20/25 | 300 | 320,848 | ||||||||||||
Series 2019-02A, Class A, 144A | 3.350 | 09/22/25 | 616 | 650,412 | ||||||||||||
Series 2019-03A, Class A, 144A | 2.360 | 03/20/26 | 1,000 | 1,021,082 | ||||||||||||
Series 2020-01A, Class A, 144A | 2.330 | 08/20/26 | 500 | 511,001 | ||||||||||||
Series 2020-02A, Class A, 144A | 2.020 | 02/20/27 | 200 | 201,741 | ||||||||||||
Exeter Automobile Receivables Trust, | ||||||||||||||||
Series 2020-03A, Class C | 1.320 | 07/15/25 | 100 | 100,233 | ||||||||||||
Series 2020-03A, Class D | 1.730 | 07/15/26 | 100 | 100,254 | ||||||||||||
Ford Auto Securitization Trust (Canada), | ||||||||||||||||
Series 2019-BA, Class A2, 144A | 2.321 | 10/15/23 | CAD | 600 | 456,776 | |||||||||||
Ford Credit Auto Owner Trust, | ||||||||||||||||
Series 2018-01, Class A, 144A | 3.190 | 07/15/31 | 1,200 | 1,321,809 | ||||||||||||
Ford Credit Floorplan Master Owner Trust, | ||||||||||||||||
Series 2017-03, Class A | 2.480 | 09/15/24 | 396 | 411,238 | ||||||||||||
Series 2018-02, Class A | 3.170 | 03/15/25 | 2,100 | 2,229,398 | ||||||||||||
GM Financial Consumer Automobile Receivables Trust, | ||||||||||||||||
Series 2018-04, Class C | 3.620 | 06/17/24 | 100 | 105,733 | ||||||||||||
Hertz Vehicle Financing II LP, | ||||||||||||||||
Series 2019-02A, Class A, 144A | 3.420 | 05/25/25 | 195 | 195,893 | ||||||||||||
OneMain Direct Auto Receivables Trust, | ||||||||||||||||
Series 2019-01A, Class A, 144A | 3.630 | 09/14/27 | 1,280 | 1,398,060 | ||||||||||||
Santander Drive Auto Receivables Trust, | ||||||||||||||||
Series 2020-02, Class D | 2.220 | 09/15/26 | 100 | 102,095 | ||||||||||||
Series 2020-03, Class D | 1.640 | 11/16/26 | 400 | 400,364 | ||||||||||||
World Omni Select Auto Trust, | ||||||||||||||||
Series 2018-01A, Class C, 144A | 3.860 | 01/15/25 | 440 | 452,643 | ||||||||||||
Series 2019-A, Class B | 2.170 | 12/15/25 | 700 | 719,829 | ||||||||||||
Series 2019-A, Class C | 2.380 | 12/15/25 | 200 | 206,314 | ||||||||||||
|
| |||||||||||||||
13,280,515 | ||||||||||||||||
|
| |||||||||||||||
Collateralized Loan Obligations 1.5% | ||||||||||||||||
Anchorage Capital CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2019-11A, Class A, 144A, 3 Month LIBOR + 1.390% (Cap N/A, Floor 1.390%) | 1.648(c) | 07/22/32 | 1,000 | 999,997 |
See Notes to Financial Statements.
40
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Collateralized Loan Obligations (cont’d.) | ||||||||||||||||
Atlas Senior Loan Fund Ltd. (Cayman Islands), | ||||||||||||||||
Series 2014-01A, Class AR2, 144A, 3 Month LIBOR + 1.260% (Cap N/A, Floor 0.000%) | 1.531%(c) | 07/16/29 | 247 | $ | 243,699 | |||||||||||
Battalion CLO Ltd., | ||||||||||||||||
Series 2018-12A, Class A1, 144A, 3 Month LIBOR + 1.070% (Cap N/A, Floor 1.070%) | 1.350(c) | 05/17/31 | 1,000 | 986,126 | ||||||||||||
Carlyle CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series C17A, Class A1AR, 144A, 3 Month LIBOR + 1.030% (Cap N/A, Floor 0.000%) | 1.298(c) | 04/30/31 | 1,000 | 987,790 | ||||||||||||
Carlyle Global Market Strategies CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2015-05A, Class A1R, 144A, 3 Month LIBOR + 1.320% (Cap N/A, Floor 1.320%) | 1.592(c) | 01/20/32 | 750 | 745,295 | ||||||||||||
Carlyle US CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2017-01A, Class A1B, 144A, 3 Month LIBOR + 1.230% (Cap N/A, Floor 0.000%) | 1.502(c) | 04/20/31 | 249 | 245,100 | ||||||||||||
HPS Loan Management Ltd. (Cayman Islands), | ||||||||||||||||
Series 15A-19, Class A1, 144A, 3 Month LIBOR + 1.320% (Cap N/A, Floor 1.320%) | 1.578(c) | 07/22/32 | 750 | 747,746 | ||||||||||||
ICG US CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2019-01A, Class A1A, 144A, 3 Month LIBOR + 1.380% (Cap N/A, Floor 1.380%) | 1.625(c) | 10/26/32 | 1,000 | 990,197 | ||||||||||||
LCM LP (Cayman Islands), | ||||||||||||||||
Series 13A, Class ARR, 144A, 3 Month LIBOR + 1.140% (Cap N/A, Floor 0.000%) | 1.412(c) | 07/19/27 | 1,750 | 1,738,852 | ||||||||||||
OZLM Ltd. (Cayman Islands), | ||||||||||||||||
Series 2018-20A, Class A1, 144A, 3 Month LIBOR + 1.050% (Cap N/A, Floor 0.000%) | 1.322(c) | 04/20/31 | 1,500 | 1,468,495 | ||||||||||||
Series 2019-24A, Class A1A, 144A, 3 Month LIBOR + 1.390% (Cap N/A, Floor 0.000%) | 1.662(c) | 07/20/32 | 1,000 | 994,045 | ||||||||||||
Shackleton CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2015-07RA, Class A1, 144A, 3 Month LIBOR + 1.170% (Cap N/A, Floor 0.000%) | 1.445(c) | 07/15/31 | 500 | 494,114 | ||||||||||||
Sound Point CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2014-03RA, Class A1, 144A, 3 Month LIBOR + 1.250% (Cap N/A, Floor 1.250%) | 1.506(c) | 10/23/31 | 750 | 742,566 | ||||||||||||
TIAA CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2016-01A, Class AR, 144A, 3 Month LIBOR + 1.200% (Cap N/A, Floor 0.000%) | 1.472(c) | 07/20/31 | 250 | 248,142 | ||||||||||||
Trinitas CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2016-04A, Class A1LR, 144A, 3 Month LIBOR + 1.180% (Cap N/A, Floor 0.000%) | 1.452(c) | 10/18/31 | 998 | 987,888 |
See Notes to Financial Statements.
PGIM Balanced Fund 41
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Collateralized Loan Obligations (cont’d.) | ||||||||||||||||
Wellfleet CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2018-02A, Class A1, 144A, 3 Month LIBOR + 1.200% (Cap N/A, Floor 1.200%) | 1.472%(c) | 10/20/31 | 500 | $ | 494,990 | |||||||||||
York CLO Ltd. (Cayman Islands), | ||||||||||||||||
Series 2019-01A, Class A1, 144A, 3 Month LIBOR + 1.350% (Cap N/A, Floor 0.000%) | 1.608(c) | 07/22/32 | 1,000 | 997,613 | ||||||||||||
|
| |||||||||||||||
14,112,655 | ||||||||||||||||
|
| |||||||||||||||
Consumer Loans 0.5% | ||||||||||||||||
Lendmark Funding Trust, | ||||||||||||||||
Series 2018-01A, Class A, 144A | 3.810 | 12/21/26 | 130 | 133,091 | ||||||||||||
Series 2019-02A, Class A, 144A | 2.780 | 04/20/28 | 900 | 909,865 | ||||||||||||
Mariner Finance Issuance Trust, | ||||||||||||||||
Series 2020-AA, Class A, 144A | 2.190 | 08/21/34 | 200 | 200,627 | ||||||||||||
OneMain Financial Issuance Trust, | ||||||||||||||||
Series 2017-01A, Class A2, 144A, 1 Month LIBOR + 0.800% (Cap N/A, Floor 0.000%) | 0.951(c) | 09/14/32 | 189 | 189,513 | ||||||||||||
Series 2017-01A, Class C, 144A | 3.350 | 09/14/32 | 135 | 135,403 | ||||||||||||
Series 2018-01A, Class A, 144A | 3.300 | 03/14/29 | 190 | 195,063 | ||||||||||||
Series 2020-01A, Class A, 144A | 3.840 | 05/14/32 | 300 | 315,508 | ||||||||||||
Series 2020-02A, Class A, 144A | 1.750 | 09/14/35 | 500 | 503,645 | ||||||||||||
Oportun Funding X LLC, | ||||||||||||||||
Series 2018-C, Class A, 144A | 4.100 | 10/08/24 | 300 | 305,249 | ||||||||||||
Oportun Funding XII LLC, | ||||||||||||||||
Series 2018-D, Class A, 144A | 4.150 | 12/09/24 | 200 | 203,720 | ||||||||||||
PNMAC GMSR Issuer Trust, | ||||||||||||||||
Series 2018-GT01, Class A, 144A, 1 Month LIBOR + 2.850% (Cap N/A, Floor 2.850%) | 2.998(c) | 02/25/23 | 150 | 146,402 | ||||||||||||
SoFi Consumer Loan Program Trust, | ||||||||||||||||
Series 2020-01, Class A, 144A | 2.020 | 01/25/29 | 653 | 659,674 | ||||||||||||
Springleaf Funding Trust, | ||||||||||||||||
Series 2017-AA, Class A, 144A | 2.680 | 07/15/30 | 506 | 506,772 | ||||||||||||
|
| |||||||||||||||
4,404,532 | ||||||||||||||||
|
| |||||||||||||||
Credit Cards 0.2% | ||||||||||||||||
Citibank Credit Card Issuance Trust, | ||||||||||||||||
Series 2018-A07, Class A7 | 3.960 | 10/13/30 | 1,100 | 1,329,043 | ||||||||||||
Newday Partnership Funding PLC (United Kingdom), | ||||||||||||||||
Series 2020-01A, Class A3, 144A | — (p) | 11/15/28 | GBP | 465 | 600,013 | |||||||||||
|
| |||||||||||||||
1,929,056 | ||||||||||||||||
|
|
See Notes to Financial Statements.
42
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Equipment 0.1% | ||||||||||||||||
MMAF Equipment Finance LLC, | ||||||||||||||||
Series 2017-B, Class A5, 144A | 2.720% | 06/15/40 | 400 | $ | 421,518 | |||||||||||
Series 2018-A, Class A5, 144A | 3.610 | 03/10/42 | 100 | 107,556 | ||||||||||||
Series 2019-A, Class A5, 144A | 3.080 | 11/12/41 | 400 | 434,527 | ||||||||||||
|
| |||||||||||||||
963,601 | ||||||||||||||||
|
| |||||||||||||||
Home Equity Loans 0.0% | ||||||||||||||||
CDC Mortgage Capital Trust, | ||||||||||||||||
Series 2002-HE03, Class M1, 1 Month LIBOR + 1.650% (Cap N/A, Floor 1.100%) | 1.798(c) | 03/25/33 | 9 | 9,303 | ||||||||||||
Morgan Stanley Dean Witter Capital I, Inc. Trust, | ||||||||||||||||
Series 2002-HE01, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.600%) | 1.048(c) | 07/25/32 | 3 | 3,298 | ||||||||||||
|
| |||||||||||||||
12,601 | ||||||||||||||||
|
| |||||||||||||||
Other 0.2% | ||||||||||||||||
Sierra Timeshare Receivables Funding LLC, | ||||||||||||||||
Series 2018-02A, Class A, 144A | 3.500 | 06/20/35 | 177 | 184,010 | ||||||||||||
Series 2019-02A, Class A, 144A | 2.590 | 05/20/36 | 445 | 457,023 | ||||||||||||
TH MSR Issuer Trust, | ||||||||||||||||
Series 2019-FT01, Class A, 144A, 1 Month LIBOR + 2.800% (Cap N/A, Floor 2.800%) | 2.948(c) | 06/25/24 | 1,400 | 1,320,397 | ||||||||||||
|
| |||||||||||||||
1,961,430 | ||||||||||||||||
|
| |||||||||||||||
Residential Mortgage-Backed Securities 0.3% | ||||||||||||||||
CIT Mortgage Loan Trust, | ||||||||||||||||
Series 2007-01, Class 1A, 144A, 1 Month LIBOR + 1.350% (Cap N/A, Floor 1.350%) | 1.498(c) | 10/25/37 | 217 | 217,443 | ||||||||||||
Countrywide Asset-Backed Certificates, | ||||||||||||||||
Series 2004-01, Class M1, 1 Month LIBOR + 0.750% (Cap N/A, Floor 0.500%) | 0.898(c) | 03/25/34 | 71 | 70,518 | ||||||||||||
Credit Suisse Mortgage Trust, | ||||||||||||||||
Series 2018-RPL08, Class A1, 144A | 4.125(cc) | 07/25/58 | 296 | 296,804 | ||||||||||||
Legacy Mortgage Asset Trust, | ||||||||||||||||
Series 2019-GS02, Class A1, 144A | 3.750 | 01/25/59 | 158 | 160,297 | ||||||||||||
Series 2019-GS04, Class A1, 144A | 3.438 | 05/25/59 | 261 | 261,010 | ||||||||||||
Series 2019-SL01, Class A, 144A | 4.000(cc) | 12/28/54 | 53 | 53,714 | ||||||||||||
Mill City Mortgage Loan Trust, | ||||||||||||||||
Series 2017-03, Class A1, 144A | 2.750(cc) | 01/25/61 | 222 | 228,107 | ||||||||||||
Series 2018-01, Class A1, 144A | 3.250(cc) | 05/25/62 | 129 | 134,666 |
See Notes to Financial Statements.
PGIM Balanced Fund 43
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Residential Mortgage-Backed Securities (cont’d.) |
| |||||||||||||||
Towd Point Mortgage Trust, | ||||||||||||||||
Series 2017-04, Class A1, 144A | 2.750%(cc) | 06/25/57 | 737 | $ | 764,249 | |||||||||||
Series 2017-05, Class A1, 144A, 1 Month LIBOR + 0.600% (Cap N/A, Floor 0.000%) | 0.748(c) | 02/25/57 | 354 | 353,512 | ||||||||||||
Series 2017-06, Class A1, 144A | 2.750(cc) | 10/25/57 | 363 | 377,799 | ||||||||||||
Series 2019-MH01, Class A1, 144A | 3.000(cc) | 11/25/58 | 143 | 146,857 | ||||||||||||
|
| |||||||||||||||
3,064,976 | ||||||||||||||||
|
| |||||||||||||||
Student Loans 0.7% | ||||||||||||||||
Commonbond Student Loan Trust, | ||||||||||||||||
Series 2017-BGS, Class A1, 144A | 2.680 | 09/25/42 | 230 | 236,429 | ||||||||||||
Series 2018-AGS, Class A1, 144A | 3.210 | 02/25/44 | 194 | 200,647 | ||||||||||||
Series 2018-CGS, Class A1, 144A | 3.870 | 02/25/46 | 99 | 103,227 | ||||||||||||
Laurel Road Prime Student Loan Trust, | ||||||||||||||||
Series 2017-C, Class A2B, 144A | 2.810 | 11/25/42 | 151 | 154,540 | ||||||||||||
Series 2018-B, Class A2FX, 144A | 3.540 | 05/26/43 | 300 | 308,655 | ||||||||||||
Series 2019-A, Class A2FX, 144A | 2.730 | 10/25/48 | 261 | 267,305 | ||||||||||||
Navient Private Education Refi Loan Trust, | ||||||||||||||||
Series 2018-A, Class A2, 144A | 3.190 | 02/18/42 | 565 | 577,109 | ||||||||||||
Series 2018-CA, Class A2, 144A | 3.520 | 06/16/42 | 280 | 287,918 | ||||||||||||
Series 2019-CA, Class A2, 144A | 3.130 | 02/15/68 | 300 | 309,768 | ||||||||||||
Series 2019-EA, Class A2A, 144A | 2.640 | 05/15/68 | 500 | 522,103 | ||||||||||||
Series 2019-FA, Class A2, 144A | 2.600 | 08/15/68 | 700 | 724,418 | ||||||||||||
Navient Student Loan Trust, | ||||||||||||||||
Series 2018-EA, Class A2, 144A | 4.000 | 12/15/59 | 300 | 311,775 | ||||||||||||
SoFi Professional Loan Program LLC, | ||||||||||||||||
Series 2019-B, Class A2FX, 144A | 3.090 | 08/17/48 | 400 | 419,571 | ||||||||||||
Series 2019-C, Class A2FX, 144A | 2.370 | 11/16/48 | 600 | 616,671 | ||||||||||||
SoFi Professional Loan Program Trust, | ||||||||||||||||
Series 2018-B, Class A2FX, 144A | 3.340 | 08/25/47 | 400 | 412,110 | ||||||||||||
Series 2020-A, Class A2FX, 144A | 2.540 | 05/15/46 | 600 | 622,892 | ||||||||||||
|
| |||||||||||||||
6,075,138 | ||||||||||||||||
|
| |||||||||||||||
TOTAL ASSET-BACKED SECURITIES | 45,804,504 | |||||||||||||||
|
| |||||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES 10.2% | ||||||||||||||||
BANK, | ||||||||||||||||
Series 2017-BNK04, Class A3 | 3.362 | 05/15/50 | 1,000 | 1,120,017 | ||||||||||||
Series 2020-BN26, Class A3 | 2.155 | 03/15/63 | 1,800 | 1,881,230 |
See Notes to Financial Statements.
44
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||
Barclays Commercial Mortgage Securities Trust, | ||||||||||||||
Series 2018-C02, Class A4 | 4.047% | 12/15/51 | 1,351 | $ | 1,565,544 | |||||||||
Benchmark Mortgage Trust, | ||||||||||||||
Series 2018-B03, Class A4 | 3.761 | 04/10/51 | 1,138 | 1,301,450 | ||||||||||
Series 2019-B13, Class A3 | 2.701 | 08/15/57 | 1,800 | 1,967,213 | ||||||||||
Series 2020-B17, Class A4 | 2.042 | 03/15/53 | 650 | 676,556 | ||||||||||
BX Commercial Mortgage Trust, | ||||||||||||||
Series 2020-BXLP, Class A, 144A, 1 Month LIBOR + 0.800% (Cap N/A, Floor 0.800%) | 0.952(c) | 12/15/36 | 1,099 | 1,097,669 | ||||||||||
CD Mortgage Trust, | ||||||||||||||
Series 2019-CD08, Class A3 | 2.657 | 08/15/57 | 1,550 | 1,685,454 | ||||||||||
CFK Trust, | ||||||||||||||
Series 2020-MF02, Class B, 144A | 2.792 | 03/15/39 | 1,200 | 1,191,667 | ||||||||||
Series 2020-MF02, Class C, 144A | 2.995 | 03/15/39 | 1,500 | 1,435,069 | ||||||||||
Series 2020-MF02, Class D, 144A | 3.349 | 03/15/39 | 900 | 832,965 | ||||||||||
Citigroup Commercial Mortgage Trust, | ||||||||||||||
Series 2014-GC21, Class A4 | 3.575 | 05/10/47 | 196 | 209,910 | ||||||||||
Series 2015-GC29, Class A3 | 2.935 | 04/10/48 | 410 | 433,165 | ||||||||||
Series 2015-P01, Class A4 | 3.462 | 09/15/48 | 600 | 654,582 | ||||||||||
Series 2017-P08, Class A3 | 3.203 | 09/15/50 | 1,000 | 1,098,714 | ||||||||||
Series 2019-GC41, Class A4 | 2.620 | 08/10/56 | 3,600 | 3,909,721 | ||||||||||
Series 2020-555, Class A, 144A | 2.647 | 12/10/41 | 2,000 | 2,129,060 | ||||||||||
Series 2020-GC46, Class A4 | 2.477 | 02/15/53 | 1,400 | 1,504,687 | ||||||||||
Commercial Mortgage Trust, | ||||||||||||||
Series 2013-CR08, Class A4 | 3.334 | 06/10/46 | 326 | 340,597 | ||||||||||
Series 2014-CR15, Class A2 | 2.928 | 02/10/47 | 118 | 119,500 | ||||||||||
Series 2014-CR18, Class A4 | 3.550 | 07/15/47 | 381 | 411,091 | ||||||||||
Series 2014-UBS04, Class A4 | 3.420 | 08/10/47 | 700 | 748,409 | ||||||||||
Series 2015-LC21, Class A3 | 3.445 | 07/10/48 | 700 | 758,961 | ||||||||||
CSAIL Commercial Mortgage Trust, | ||||||||||||||
Series 2015-C02, Class A3 | 3.231 | 06/15/57 | 765 | 830,732 | ||||||||||
Series 2017-C08, Class A3 | 3.127 | 06/15/50 | 800 | 877,964 | ||||||||||
DBJPM Mortgage Trust, | ||||||||||||||
Series 2016-C01, Class A3A | 3.015 | 05/10/49 | 800 | 872,073 | ||||||||||
Fannie Mae-Aces, | ||||||||||||||
Series 2015-M10, Class A2 | 3.092(cc) | 04/25/27 | 1,138 | 1,272,932 | ||||||||||
Series 2015-M17, Class A2 | 3.014(cc) | 11/25/25 | 574 | 628,716 | ||||||||||
Series 2017-M01, Class A2 | 2.497(cc) | 10/25/26 | 300 | 326,186 | ||||||||||
Series 2017-M04, Class A2 | 2.670(cc) | 12/25/26 | 1,750 | 1,904,716 | ||||||||||
Series 2017-M08, Class A2 | 3.061(cc) | 05/25/27 | 1,250 | 1,410,875 | ||||||||||
Series 2018-M04, Class A2 | 3.147(cc) | 03/25/28 | 996 | 1,135,459 | ||||||||||
Series 2018-M10, Class A1 | 3.482(cc) | 07/25/28 | 210 | 231,933 | ||||||||||
Series 2018-M10, Class A2 | 3.482(cc) | 07/25/28 | 1,884 | 2,189,742 | ||||||||||
Series 2019-M25, Class A1 | 2.142 | 11/25/29 | 1,875 | 1,983,947 |
See Notes to Financial Statements.
PGIM Balanced Fund 45
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||
FHLMC Multifamily Structured Pass-Through Certificates, | ||||||||||||||
Series K020, Class X1, IO | 1.493%(cc) | 05/25/22 | 2,523 | $ | 45,310 | |||||||||
Series K021, Class X1, IO | 1.543(cc) | 06/25/22 | 778 | 14,283 | ||||||||||
Series K025, Class X1, IO | 0.929(cc) | 10/25/22 | 1,301 | 17,527 | ||||||||||
Series K055, Class X1, IO | 1.497(cc) | 03/25/26 | 2,273 | 146,144 | ||||||||||
Series K064, Class AM | 3.327(cc) | 03/25/27 | 1,280 | 1,460,981 | ||||||||||
Series K068, Class AM | 3.315 | 08/25/27 | 900 | 1,034,286 | ||||||||||
Series K069, Class AM | 3.248(cc) | 09/25/27 | 150 | 171,354 | ||||||||||
Series K070, Class AM | 3.364 | 12/25/27 | 225 | 259,251 | ||||||||||
Series K072, Class A2 | 3.444 | 12/25/27 | 300 | 349,894 | ||||||||||
Series K074, Class A2 | 3.600 | 01/25/28 | 2,773 | 3,245,177 | ||||||||||
Series K075, Class AM | 3.650(cc) | 02/25/28 | 575 | 672,940 | ||||||||||
Series K076, Class AM | 3.900 | 04/25/28 | 425 | 508,832 | ||||||||||
Series K077, Class A2 | 3.850(cc) | 05/25/28 | 1,180 | 1,406,469 | ||||||||||
Series K077, Class AM | 3.850(cc) | 05/25/28 | 160 | 190,621 | ||||||||||
Series K079, Class AM | 3.930 | 06/25/28 | 996 | 1,189,779 | ||||||||||
Series K080, Class AM | 3.986(cc) | 07/25/28 | 1,777 | 2,129,839 | ||||||||||
Series K083, Class A2 | 4.050(cc) | 09/25/28 | 960 | 1,173,802 | ||||||||||
Series K083, Class AM | 4.030(cc) | 10/25/28 | 275 | 334,786 | ||||||||||
Series K086, Class A2 | 3.859(cc) | 11/25/28 | 1,422 | 1,712,227 | ||||||||||
Series K086, Class AM | 3.919(cc) | 12/25/28 | 200 | 240,922 | ||||||||||
Series K087, Class AM | 3.832(cc) | 12/25/28 | 250 | 298,783 | ||||||||||
Series K157, Class A2 | 3.990(cc) | 05/25/33 | 700 | 869,866 | ||||||||||
Series W5FX, Class AFX | 3.336(cc) | 04/25/28 | 380 | 430,095 | ||||||||||
GS Mortgage Securities Trust, | ||||||||||||||
Series 2015-GC28, Class A4 | 3.136 | 02/10/48 | 400 | 432,630 | ||||||||||
JPMCC Commercial Mortgage Securities Trust, | ||||||||||||||
Series 2017-JP07, Class ASB | 3.241 | 09/15/50 | 400 | 436,553 | ||||||||||
JPMorgan Chase Commercial Mortgage Securities Trust, | ||||||||||||||
Series 2013-LC11, Class A4 | 2.694 | 04/15/46 | 91 | 93,968 | ||||||||||
Series 2019-BKWD, Class A, 144A, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%) | 1.152(c) | 09/15/29 | 700 | 683,144 | ||||||||||
Series 2020-NNN, Class AFL, 144A, 1 Month LIBOR + 0.860% (Cap N/A, Floor 0.860%) | 1.012(c) | 01/16/37 | 900 | 883,101 | ||||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, | ||||||||||||||
Series 2013-C08, Class A3 | 2.863 | 12/15/48 | 180 | 186,931 | ||||||||||
Series 2015-C23, Class A3 | 3.451 | 07/15/50 | 584 | 638,574 | ||||||||||
Series 2015-C25, Class A4 | 3.372 | 10/15/48 | 700 | 758,095 | ||||||||||
Series 2016-C29, Class A3 | 3.058 | 05/15/49 | 800 | 872,034 | ||||||||||
Morgan Stanley Capital I Trust, | ||||||||||||||
Series 2016-UB11, Class A3 | 2.531 | 08/15/49 | 1,300 | 1,378,476 | ||||||||||
Series 2019-H06, Class A3 | 3.158 | 06/15/52 | 1,250 | 1,396,340 | ||||||||||
Series 2020-L04, Class A2 | 2.449 | 02/15/53 | 3,600 | 3,862,869 |
See Notes to Financial Statements.
46
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) |
| |||||||||||||||
UBS Commercial Mortgage Trust, | ||||||||||||||||
Series 2017-C02, Class ASB | 3.264% | 08/15/50 | 500 | $ | 547,050 | |||||||||||
Series 2017-C05, Class A4 | 3.212 | 11/15/50 | 1,422 | 1,570,135 | ||||||||||||
Series 2018-C08, Class A4 | 3.983 | 02/15/51 | 1,650 | 1,908,082 | ||||||||||||
Series 2018-C09, Class A3 | 3.854 | 03/15/51 | 400 | 457,064 | ||||||||||||
Series 2018-C14, Class A3 | 4.180 | 12/15/51 | 996 | 1,171,799 | ||||||||||||
UBS-Barclays Commercial Mortgage Trust, | ||||||||||||||||
Series 2012-C04, Class A4 | 2.792 | 12/10/45 | 200 | 205,477 | ||||||||||||
Series 2013-C05, Class A3 | 2.920 | 03/10/46 | 151 | 154,675 | ||||||||||||
Series 2013-C06, Class A3 | 2.971 | 04/10/46 | 200 | 207,501 | ||||||||||||
Wells Fargo Commercial Mortgage Trust, | ||||||||||||||||
Series 2015-NXS02, Class A4 | 3.498 | 07/15/58 | 800 | 876,686 | ||||||||||||
Series 2016-C33, Class A3 | 3.162 | 03/15/59 | 1,280 | 1,369,521 | ||||||||||||
Series 2016-C34, Class A3 | 2.834 | 06/15/49 | 800 | 848,512 | ||||||||||||
Series 2016-C35, Class A3 | 2.674 | 07/15/48 | 1,200 | 1,276,659 | ||||||||||||
Series 2016-NXS06, Class A3 | 2.642 | 11/15/49 | 1,500 | 1,597,377 | ||||||||||||
Series 2017-C38, Class A4 | 3.190 | 07/15/50 | 700 | 778,950 | ||||||||||||
Series 2018-C46, Class A3 | 3.888 | 08/15/51 | 1,050 | 1,212,260 | ||||||||||||
Series 2018-C48, Class A4 | 4.037 | 01/15/52 | 1,707 | 1,992,291 | ||||||||||||
Series 2019-C52, Class A3 | 2.631 | 08/15/52 | 2,500 | 2,673,858 | ||||||||||||
Series 2020-C55, Class A4 | 2.474 | 02/15/53 | 3,600 | 3,875,400 | ||||||||||||
|
| |||||||||||||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES | 92,987,686 | |||||||||||||||
|
| |||||||||||||||
CORPORATE BONDS 16.5% | ||||||||||||||||
Advertising 0.0% | ||||||||||||||||
National CineMedia LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 08/15/26 | 500 | 342,480 | ||||||||||||
Aerospace & Defense 0.1% | ||||||||||||||||
Boeing Co. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 3.750 | 02/01/50 | 515 | 464,287 | ||||||||||||
Embraer Netherlands Finance BV (Brazil), | ||||||||||||||||
Gtd. Notes | 5.050 | 06/15/25 | 99 | 95,032 | ||||||||||||
Embraer Overseas Ltd. (Brazil), | ||||||||||||||||
Gtd. Notes, 144A(a) | 5.696 | 09/16/23 | 210 | 212,677 | ||||||||||||
Raytheon Technologies Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.125 | 11/16/28 | 235 | 278,033 | ||||||||||||
|
| |||||||||||||||
1,050,029 |
See Notes to Financial Statements.
PGIM Balanced Fund 47
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Agriculture 0.1% | ||||||||||||||||
BAT Capital Corp. (United Kingdom), | ||||||||||||||||
Gtd. Notes | 3.222% | 08/15/24 | 810 | $ | 865,509 | |||||||||||
Airlines 0.1% | ||||||||||||||||
American Airlines 2016-1 Class AA Pass-Through Trust, | ||||||||||||||||
Pass-Through Certificates | 3.575 | 07/15/29 | 170 | 163,076 | ||||||||||||
Continental Airlines 2001-1 Class A-1 Pass-Through Trust, | ||||||||||||||||
Pass-Through Certificates | 6.703 | 12/15/22 | 3 | 3,185 | ||||||||||||
Continental Airlines 2012-2 Class A Pass-Through Trust, | ||||||||||||||||
Pass-Through Certificates | 4.000 | 04/29/26 | 78 | 74,442 | ||||||||||||
Delta Air Lines 2007-1 Class A Pass-Through Trust, | ||||||||||||||||
Pass-Through Certificates | 6.821 | 02/10/24 | 40 | 40,318 | ||||||||||||
Delta Air Lines, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.400 | 04/19/21 | 200 | 199,877 | ||||||||||||
Southwest Airlines Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.125 | 06/15/27 | 260 | 283,454 | ||||||||||||
Sr. Unsec’d. Notes | 5.250 | 05/04/25 | 300 | 330,441 | ||||||||||||
United Airlines 2014-1 Class A Pass-Through Trust, | ||||||||||||||||
Pass-Through Certificates | 4.000 | 10/11/27 | 65 | 63,884 | ||||||||||||
|
| |||||||||||||||
1,158,677 | ||||||||||||||||
Auto Manufacturers 0.5% | ||||||||||||||||
BMW US Capital LLC (Germany), | ||||||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.410% | 0.676(c) | 04/12/21 | 80 | 80,061 | ||||||||||||
Gtd. Notes, 144A | 3.100 | 04/12/21 | 105 | 106,422 | ||||||||||||
Daimler Finance North America LLC (Germany), | ||||||||||||||||
Gtd. Notes, 144A | 3.350 | 05/04/21 | 330 | 335,305 | ||||||||||||
Ford Motor Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.291 | 12/08/46 | 135 | 125,856 | ||||||||||||
Ford Motor Credit Co. LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.336 | 03/18/21 | 206 | 206,080 | ||||||||||||
Sr. Unsec’d. Notes | 3.350 | 11/01/22 | 770 | 761,324 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 08/02/21 | 200 | 203,784 | ||||||||||||
General Motors Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.875 | 10/02/23 | 155 | 168,811 | ||||||||||||
Sr. Unsec’d. Notes | 6.250 | 10/02/43 | 95 | 112,200 | ||||||||||||
Sr. Unsec’d. Notes | 6.600 | 04/01/36 | 80 | 96,878 | ||||||||||||
General Motors Financial Co., Inc., | ||||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.850% | 1.118(c) | 04/09/21 | 160 | 159,920 |
See Notes to Financial Statements.
48
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Auto Manufacturers (cont’d.) | ||||||||||||||||
General Motors Financial Co., Inc., (cont’d.) | ||||||||||||||||
Gtd. Notes | 3.550% | 04/09/21 | 120 | $ | 121,580 | |||||||||||
Gtd. Notes(a) | 3.950 | 04/13/24 | 616 | 652,711 | ||||||||||||
Sr. Unsec’d. Notes | 3.600 | 06/21/30 | 535 | 552,419 | ||||||||||||
Harley-Davidson Financial Services, Inc., | ||||||||||||||||
Gtd. Notes, 144A, MTN | 2.850 | 01/15/21 | 565 | 566,960 | ||||||||||||
Volkswagen Group of America Finance LLC (Germany), | ||||||||||||||||
Gtd. Notes, 144A | 3.875 | 11/13/20 | 215 | 215,845 | ||||||||||||
Gtd. Notes, 144A | 4.000 | 11/12/21 | 245 | 254,013 | ||||||||||||
|
| |||||||||||||||
4,720,169 | ||||||||||||||||
Auto Parts & Equipment 0.1% | ||||||||||||||||
Dana, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.375 | 11/15/27 | 250 | 256,391 | ||||||||||||
Magna International, Inc. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.450 | 06/15/30 | 350 | 368,302 | ||||||||||||
|
| |||||||||||||||
624,693 | ||||||||||||||||
Banks 3.8% | ||||||||||||||||
Banco Santander SA (Spain), | ||||||||||||||||
Sr. Unsec’d. Notes | 3.848 | 04/12/23 | 200 | 213,495 | ||||||||||||
Bank of America Corp., | ||||||||||||||||
Jr. Sub. Notes, Series JJ | 5.125(ff) | –(rr) | 350 | 360,630 | ||||||||||||
Jr. Sub. Notes, Series MM | 4.300(ff) | –(rr) | 235 | 228,601 | ||||||||||||
Sr. Unsec’d. Notes | 3.004(ff) | 12/20/23 | 286 | 300,265 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.300 | 01/11/23 | 390 | 414,027 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.593(ff) | 07/21/28 | 160 | 179,293 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 3.194(ff) | 07/23/30 | 215 | 237,542 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 3.824(ff) | 01/20/28 | 1,835 | 2,077,889 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 3.974(ff) | 02/07/30 | 115 | 133,290 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 4.125 | 01/22/24 | 882 | 976,543 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 4.271(ff) | 07/23/29 | 350 | 410,603 | ||||||||||||
Sub. Notes, MTN | 4.450 | 03/03/26 | 365 | 419,187 | ||||||||||||
Bank of Montreal (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.500 | 06/28/24 | 660 | 702,484 | ||||||||||||
Bank of New York Mellon Corp. (The), | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.200 | 08/16/23 | 782 | 819,968 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 2.950 | 01/29/23 | 170 | 179,054 | ||||||||||||
Barclays PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.645(ff) | 06/24/31 | 1,075 | 1,072,520 |
See Notes to Financial Statements.
PGIM Balanced Fund 49
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks (cont’d.) | ||||||||||||||||
Barclays PLC (United Kingdom), (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.375% | 01/12/26 | 200 | $ | 224,506 | |||||||||||
Sr. Unsec’d. Notes, MTN | 4.972(ff) | 05/16/29 | 400 | 467,221 | ||||||||||||
BNP Paribas SA (France), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 1.904(ff) | 09/30/28 | 750 | 749,019 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.950 | 05/23/22 | 275 | 284,707 | ||||||||||||
Citigroup, Inc., | ||||||||||||||||
Jr. Sub. Notes, Series Q, 3 Month LIBOR + 4.095% | 4.375(c) | –(rr) | 280 | 273,173 | ||||||||||||
Jr. Sub. Notes, Series R | 6.125(ff) | –(rr) | 150 | 148,420 | ||||||||||||
Jr. Sub. Notes, Series T | 6.250(ff) | –(rr) | 105 | 116,372 | ||||||||||||
Jr. Sub. Notes, Series U | 5.000(ff) | –(rr) | 100 | 99,693 | ||||||||||||
Jr. Sub. Notes, Series V | 4.700(ff) | –(rr) | 1,020 | 987,180 | ||||||||||||
Sr. Unsec’d. Notes(a) | 2.572(ff) | 06/03/31 | 880 | 921,366 | ||||||||||||
Sr. Unsec’d. Notes | 3.668(ff) | 07/24/28 | 290 | 325,480 | ||||||||||||
Sr. Unsec’d. Notes | 3.700 | 01/12/26 | 200 | 224,638 | ||||||||||||
Sr. Unsec’d. Notes | 3.887(ff) | 01/10/28 | 1,500 | 1,697,010 | ||||||||||||
Sub. Notes | 4.400 | 06/10/25 | 767 | 862,984 | ||||||||||||
Sub. Notes | 4.450 | 09/29/27 | 195 | 225,835 | ||||||||||||
Sub. Notes | 4.750 | 05/18/46 | 55 | 68,924 | ||||||||||||
Deutsche Bank AG (Germany), | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 1.290% | 1.539(c) | 02/04/21 | 200 | 199,803 | ||||||||||||
Sr. Unsec’d. Notes | 2.222(ff) | 09/18/24 | 245 | 246,591 | ||||||||||||
Sr. Unsec’d. Notes | 4.250 | 02/04/21 | 175 | 176,567 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.375 | 05/12/21 | 220 | 222,689 | ||||||||||||
Discover Bank, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.250 | 03/13/26 | 315 | 358,500 | ||||||||||||
Goldman Sachs Group, Inc. (The), | ||||||||||||||||
Jr. Sub. Notes, Series M, 3 Month LIBOR + 3.922% | 4.165(c) | –(rr) | 265 | 257,187 | ||||||||||||
Sr. Unsec’d. Notes | 3.750 | 02/25/26 | 50 | 56,247 | ||||||||||||
Sr. Unsec’d. Notes | 3.814(ff) | 04/23/29 | 165 | 187,822 | ||||||||||||
Sr. Unsec’d. Notes | 3.850 | 01/26/27 | 410 | 460,709 | ||||||||||||
Sr. Unsec’d. Notes | 4.223(ff) | 05/01/29 | 120 | 140,038 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 01/24/22 | 250 | 266,961 | ||||||||||||
Sub. Notes | 6.750 | 10/01/37 | 275 | 397,947 | ||||||||||||
JPMorgan Chase & Co., | ||||||||||||||||
Jr. Sub. Notes, Series FF | 5.000(ff) | –(rr) | 345 | 344,262 | ||||||||||||
Jr. Sub. Notes, Series HH | 4.600(ff) | –(rr) | 1,290 | 1,253,446 | ||||||||||||
Jr. Sub. Notes, Series I, 3 Month LIBOR + 3.470% | 3.738(c) | –(rr) | 146 | 140,030 | ||||||||||||
Sr. Unsec’d. Notes | 2.950 | 10/01/26 | 210 | 230,857 | ||||||||||||
Sr. Unsec’d. Notes | 3.200 | 06/15/26 | 1,066 | 1,181,450 | ||||||||||||
Sr. Unsec’d. Notes | 3.509(ff) | 01/23/29 | 265 | 298,303 | ||||||||||||
Sr. Unsec’d. Notes | 3.702(ff) | 05/06/30 | 145 | 166,198 | ||||||||||||
Sr. Unsec’d. Notes | 3.782(ff) | 02/01/28 | 1,591 | 1,801,052 |
See Notes to Financial Statements.
50
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks (cont’d.) | ||||||||||||||||
JPMorgan Chase & Co., (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.005%(ff) | 04/23/29 | 796 | $ | 922,020 | |||||||||||
Sr. Unsec’d. Notes | 4.452(ff) | 12/05/29 | 250 | 300,638 | ||||||||||||
Sub. Notes | 3.875 | 09/10/24 | 90 | 99,663 | ||||||||||||
Lloyds Banking Group PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes | 3.750 | 01/11/27 | 300 | 333,061 | ||||||||||||
Morgan Stanley, | ||||||||||||||||
Jr. Sub. Notes, Series H, 3 Month LIBOR + 3.610% | 3.885(c) | –(rr) | 125 | 118,329 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.750 | 02/25/23 | 45 | 48,297 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.772(ff) | 01/24/29 | 1,173 | 1,337,993 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 3.875 | 01/27/26 | 370 | 420,597 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 4.431(ff) | 01/23/30 | 240 | 286,346 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 3.591(ff) | 07/22/28 | 1,536 | 1,723,354 | ||||||||||||
State Bank of India (India), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.375 | 01/24/24 | 310 | 331,233 | ||||||||||||
State Street Corp., | ||||||||||||||||
Jr. Sub. Notes, Series F, 3 Month LIBOR + 3.597% | 3.847(c) | –(rr) | 190 | 188,266 | ||||||||||||
Wells Fargo & Co., | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.393(ff) | 06/02/28 | 2,500 | 2,609,014 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 2.572(ff) | 02/11/31 | 1,025 | 1,072,133 | ||||||||||||
|
| |||||||||||||||
34,579,522 | ||||||||||||||||
Beverages 0.2% | ||||||||||||||||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev | ||||||||||||||||
Worldwide, Inc. (Belgium), | ||||||||||||||||
Gtd. Notes | 4.700 | 02/01/36 | 150 | 180,738 | ||||||||||||
Anheuser-Busch InBev Finance, Inc. (Belgium), | ||||||||||||||||
Gtd. Notes | 4.000 | 01/17/43 | 120 | 131,175 | ||||||||||||
Anheuser-Busch InBev Worldwide, Inc. (Belgium), | ||||||||||||||||
Gtd. Notes | 5.550 | 01/23/49 | 825 | 1,109,518 | ||||||||||||
Keurig Dr. Pepper, Inc., | ||||||||||||||||
Gtd. Notes | 3.551 | 05/25/21 | 190 | 193,870 | ||||||||||||
|
| |||||||||||||||
1,615,301 | ||||||||||||||||
Building Materials 0.2% | ||||||||||||||||
Griffon Corp., | ||||||||||||||||
Gtd. Notes(a) | 5.750 | 03/01/28 | 800 | 836,225 |
See Notes to Financial Statements.
PGIM Balanced Fund 51
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Building Materials (cont’d.) | ||||||||||||||||
Johnson Controls International PLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.000% | 01/15/36 | 450 | $ | 596,161 | |||||||||||
Standard Industries, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.375 | 07/15/30 | 300 | 307,697 | ||||||||||||
|
| |||||||||||||||
1,740,083 | ||||||||||||||||
Chemicals 0.4% | ||||||||||||||||
CF Industries, Inc., | ||||||||||||||||
Gtd. Notes | 5.375 | 03/15/44 | 150 | 180,604 | ||||||||||||
CNAC HK Finbridge Co. Ltd. (China), | ||||||||||||||||
Gtd. Notes | 3.500 | 07/19/22 | 640 | 656,878 | ||||||||||||
Dow Chemical Co. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 9.400 | 05/15/39 | 67 | 113,695 | ||||||||||||
Nouryon Holding BV (Netherlands), | ||||||||||||||||
Gtd. Notes | 6.500 | 10/01/26 | EUR | 2,250 | 2,723,950 | |||||||||||
Sasol Financing USA LLC (South Africa), | ||||||||||||||||
Gtd. Notes | 5.875 | 03/27/24 | 200 | 192,318 | ||||||||||||
Gtd. Notes | 6.500 | 09/27/28 | 200 | 187,932 | ||||||||||||
|
| |||||||||||||||
4,055,377 | ||||||||||||||||
Commercial Services 0.6% | ||||||||||||||||
Allied Universal Holdco LLC/Allied Universal Finance Corp., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 6.625 | 07/15/26 | 500 | 531,596 | ||||||||||||
ERAC USA Finance LLC, | ||||||||||||||||
Gtd. Notes, 144A | 2.700 | 11/01/23 | 1,166 | 1,225,994 | ||||||||||||
Gtd. Notes, 144A | 7.000 | 10/15/37 | 20 | 28,613 | ||||||||||||
Johns Hopkins University, | ||||||||||||||||
Sr. Unsec’d. Notes, Series A | 2.813 | 01/01/60 | 100 | 107,900 | ||||||||||||
Loxam SAS (France), | ||||||||||||||||
Sr. Sub. Notes | 5.750 | 07/15/27 | EUR | 1,100 | 1,153,247 | |||||||||||
Moody’s Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.550 | 08/18/60 | 65 | 59,499 | ||||||||||||
President & Fellows of Harvard College, | ||||||||||||||||
Unsec’d. Notes | 3.300 | 07/15/56 | 270 | 327,414 | ||||||||||||
Trustees of Boston College, | ||||||||||||||||
Unsec’d. Notes | 3.129 | 07/01/52 | 279 | 314,598 | ||||||||||||
Trustees of the University of Pennsylvania (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 3.610 | 02/15/2119 | 55 | 59,618 | ||||||||||||
United Rentals North America, Inc., | ||||||||||||||||
Gtd. Notes | 3.875 | 02/15/31 | 75 | 76,098 |
See Notes to Financial Statements.
52
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Commercial Services (cont’d.) | ||||||||||||||||
United Rentals North America, Inc., (cont’d.) | ||||||||||||||||
Gtd. Notes | 4.000% | 07/15/30 | 425 | $ | 437,155 | |||||||||||
Gtd. Notes | 4.875 | 01/15/28 | 200 | 210,176 | ||||||||||||
Gtd. Notes | 5.500 | 05/15/27 | 250 | 266,190 | ||||||||||||
Yale University, | ||||||||||||||||
Unsec’d. Notes, Series 2020 | 1.482 | 04/15/30 | 595 | 603,557 | ||||||||||||
|
| |||||||||||||||
5,401,655 | ||||||||||||||||
Diversified Financial Services 0.2% | ||||||||||||||||
Jefferies Group LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.500 | 01/20/43 | 65 | 82,109 | ||||||||||||
Nationstar Mortgage Holdings, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 5.500 | 08/15/28 | 120 | 119,741 | ||||||||||||
Gtd. Notes, 144A | 6.000 | 01/15/27 | 600 | 612,078 | ||||||||||||
Power Finance Corp. Ltd. (India), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.150 | 12/06/28 | 200 | 224,819 | ||||||||||||
Private Export Funding Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 2.650 | 02/16/21 | 335 | 338,032 | ||||||||||||
|
| |||||||||||||||
1,376,779 | ||||||||||||||||
Electric 1.4% | ||||||||||||||||
Baltimore Gas & Electric Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.350 | 10/01/36 | 115 | 167,425 | ||||||||||||
Berkshire Hathaway Energy Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.950 | 05/15/37 | 120 | 170,193 | ||||||||||||
Calpine Corp., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 4.500 | 02/15/28 | 200 | 204,986 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.625 | 02/01/29 | 150 | 150,078 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.000 | 02/01/31 | 225 | 229,285 | ||||||||||||
CenterPoint Energy Houston Electric LLC, | ||||||||||||||||
General Ref. Mortgage, Series K2 | 6.950 | 03/15/33 | 120 | 180,544 | ||||||||||||
General Ref. Mortgage, Series Z | 2.400 | 09/01/26 | 170 | 182,752 | ||||||||||||
Commonwealth Edison Co., | ||||||||||||||||
First Mortgage, Series 123 | 3.750 | 08/15/47 | 754 | 893,265 | ||||||||||||
Dominion Energy, Inc., | ||||||||||||||||
Jr. Sub. Notes | 3.071 | 08/15/24 | 800 | 860,849 | ||||||||||||
Jr. Sub. Notes | 4.104 | 04/01/21 | 400 | 406,756 | ||||||||||||
DTE Electric Co., | ||||||||||||||||
General Ref. Mortgage | 3.750 | 08/15/47 | 622 | 733,299 | ||||||||||||
Duke Energy Carolinas LLC, | ||||||||||||||||
First Mortgage | 6.050 | 04/15/38 | 55 | 81,934 |
See Notes to Financial Statements.
PGIM Balanced Fund 53
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Electric (cont’d.) | ||||||||||||||||
Duke Energy Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.650% | 09/01/26 | 210 | $ | 227,676 | |||||||||||
El Paso Electric Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.000 | 05/15/35 | 135 | 179,058 | ||||||||||||
Emera US Finance LP (Canada), | ||||||||||||||||
Gtd. Notes | 3.550 | 06/15/26 | 685 | 763,722 | ||||||||||||
Enel Finance International NV (Italy), | ||||||||||||||||
Gtd. Notes, 144A | 2.875 | 05/25/22 | 500 | 516,423 | ||||||||||||
Gtd. Notes, 144A | 4.625 | 09/14/25 | 265 | 306,438 | ||||||||||||
Engie Energia Chile SA (Chile), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.400 | 01/28/30 | 200 | 215,944 | ||||||||||||
Eskom Holdings SOC Ltd. (South Africa), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.750 | 01/26/21 | 540 | 527,648 | ||||||||||||
Eversource Energy, | ||||||||||||||||
Sr. Unsec’d. Notes, Series O | 4.250 | 04/01/29 | 315 | 377,931 | ||||||||||||
FirstEnergy Transmission LLC, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.450 | 07/15/44 | 50 | 64,401 | ||||||||||||
Florida Power & Light Co., | ||||||||||||||||
First Mortgage | 5.950 | 10/01/33 | 60 | 86,302 | ||||||||||||
Iberdrola International BV (Spain), | ||||||||||||||||
Gtd. Notes | 6.750 | 09/15/33 | 30 | 41,064 | ||||||||||||
Interstate Power & Light Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.300 | 06/01/30 | 315 | 332,462 | ||||||||||||
Israel Electric Corp. Ltd. (Israel), | ||||||||||||||||
Sr. Sec’d. Notes, 144A, GMTN | 4.250 | 08/14/28 | 235 | 267,767 | ||||||||||||
Monongahela Power Co., | ||||||||||||||||
First Mortgage, 144A | 4.100 | 04/15/24 | 280 | 307,401 | ||||||||||||
Ohio Power Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.000 | 06/01/49 | 160 | 195,822 | ||||||||||||
Sr. Unsec’d. Notes | 4.150 | 04/01/48 | 175 | 218,450 | ||||||||||||
Public Service Co. of Colorado, | ||||||||||||||||
First Mortgage | 4.300 | 03/15/44 | 35 | 44,455 | ||||||||||||
Public Service Electric & Gas Co., | ||||||||||||||||
Sr. Sec’d. Notes, MTN | 5.800 | 05/01/37 | 125 | 180,506 | ||||||||||||
San Diego Gas & Electric Co., | ||||||||||||||||
First Mortgage | 4.150 | 05/15/48 | 230 | 276,039 | ||||||||||||
Southwestern Public Service Co., | ||||||||||||||||
First Mortgage | 3.700 | 08/15/47 | 250 | 284,445 | ||||||||||||
Virginia Electric & Power Co., | ||||||||||||||||
Sr. Unsec’d. Notes, Series A | 2.875 | 07/15/29 | 1,135 | 1,271,302 | ||||||||||||
Vistra Operations Co. LLC, | ||||||||||||||||
Gtd. Notes, 144A | 5.625 | 02/15/27 | 600 | 633,203 | ||||||||||||
Sr. Sec’d. Notes, 144A | 3.550 | 07/15/24 | 645 | 687,005 |
See Notes to Financial Statements.
54
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Electric (cont’d.) | ||||||||||||||||
Xcel Energy, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.800% | 09/15/41 | 105 | $ | 129,756 | |||||||||||
|
| |||||||||||||||
12,396,586 | ||||||||||||||||
Electronics 0.1% | ||||||||||||||||
Trimble, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.750 | 12/01/24 | 1,200 | 1,328,016 | ||||||||||||
Engineering & Construction 0.1% | ||||||||||||||||
Mexico City Airport Trust (Mexico), | ||||||||||||||||
Sr. Sec’d. Notes | 5.500 | 07/31/47 | 200 | 162,940 | ||||||||||||
Sr. Sec’d. Notes, 144A | 4.250 | 10/31/26 | 200 | 177,162 | ||||||||||||
Sr. Sec’d. Notes, 144A | 5.500 | 07/31/47 | 200 | 162,939 | ||||||||||||
|
| |||||||||||||||
503,041 | ||||||||||||||||
Entertainment 0.1% | ||||||||||||||||
AMC Entertainment Holdings, Inc., | ||||||||||||||||
Sec’d. Notes, 144A, Cash coupon 10.000% / PIK | 12.000 | 06/15/26 | 441 | 118,987 | ||||||||||||
Sr. Sec’d. Notes, 144A | 10.500 | 04/24/26 | 52 | 37,440 | ||||||||||||
International Game Technology PLC, | ||||||||||||||||
Sr. Sec’d. Notes, 144A(a) | 6.500 | 02/15/25 | 650 | 692,601 | ||||||||||||
|
| |||||||||||||||
849,028 | ||||||||||||||||
Foods 0.4% | ||||||||||||||||
B&G Foods, Inc., | ||||||||||||||||
Gtd. Notes(a) | 5.250 | 09/15/27 | 650 | 676,405 | ||||||||||||
Conagra Brands, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.800 | 10/22/21 | 902 | 933,060 | ||||||||||||
Kraft Heinz Foods Co., | ||||||||||||||||
Gtd. Notes, 144A | 4.875 | 10/01/49 | 450 | 473,395 | ||||||||||||
Mars, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 3.950 | 04/01/49 | 275 | 332,205 | ||||||||||||
Picard Bondco SA (Luxembourg), | ||||||||||||||||
Gtd. Notes | 5.500 | 11/30/24 | EUR | 1,000 | 1,172,682 | |||||||||||
|
| |||||||||||||||
3,587,747 |
See Notes to Financial Statements.
PGIM Balanced Fund 55
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Forest Products & Paper 0.0% | ||||||||||||||||
Georgia-Pacific LLC, | ||||||||||||||||
Gtd. Notes, 144A | 5.400% | 11/01/20 | 40 | $ | 40,154 | |||||||||||
International Paper Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.000 | 11/15/41 | 30 | 40,953 | ||||||||||||
Sr. Unsec’d. Notes | 7.300 | 11/15/39 | 175 | 255,430 | ||||||||||||
|
| |||||||||||||||
336,537 | ||||||||||||||||
Gas 0.3% | ||||||||||||||||
AmeriGas Partners LP/AmeriGas Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 05/20/27 | 825 | 911,951 | ||||||||||||
CenterPoint Energy Resources Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.100 | 09/01/47 | 200 | 234,668 | ||||||||||||
Dominion Energy Gas Holdings LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.600 | 12/15/44 | 10 | 12,340 | ||||||||||||
NiSource, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.490 | 05/15/27 | 548 | 611,117 | ||||||||||||
Sr. Unsec’d. Notes | 4.800 | 02/15/44 | 40 | 50,070 | ||||||||||||
Piedmont Natural Gas Co., Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.500 | 06/01/29 | 740 | 843,552 | ||||||||||||
|
| |||||||||||||||
2,663,698 | ||||||||||||||||
Healthcare-Products 0.1% | ||||||||||||||||
Abbott Laboratories, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.900 | 11/30/46 | 295 | 416,539 | ||||||||||||
DH Europe Finance II Sarl, | ||||||||||||||||
Gtd. Notes | 1.350 | 09/18/39 | EUR | 385 | 446,729 | |||||||||||
Medtronic Global Holdings SCA, | ||||||||||||||||
Gtd. Notes | 2.250 | 03/07/39 | EUR | 100 | 137,578 | |||||||||||
|
| |||||||||||||||
1,000,846 | ||||||||||||||||
Healthcare-Services 0.6% | ||||||||||||||||
Allina Health System, | ||||||||||||||||
Unsec’d. Notes, Series 2019 | 3.887 | 04/15/49 | 115 | 136,129 | ||||||||||||
Anthem, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.625 | 05/15/42 | 45 | 56,422 | ||||||||||||
Sr. Unsec’d. Notes | 4.650 | 01/15/43 | 30 | 37,748 | ||||||||||||
Ascension Health, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.945 | 11/15/46 | 795 | 992,663 | ||||||||||||
Catalent Pharma Solutions, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 2.375 | 03/01/28 | EUR | 800 | 901,965 |
See Notes to Financial Statements.
56
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Healthcare-Services (cont’d.) | ||||||||||||||||
Duke University Health System, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.920% | 06/01/47 | 95 | $ | 118,017 | |||||||||||
HCA, Inc., | ||||||||||||||||
Gtd. Notes | 5.375 | 02/01/25 | 230 | 251,799 | ||||||||||||
Health Care Service Corp. A Mutual Legal Reserve Co., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.200 | 06/01/50 | 160 | 165,386 | ||||||||||||
IHC Health Services, Inc., | ||||||||||||||||
Sec’d. Notes | 4.131 | 05/15/48 | 480 | 618,480 | ||||||||||||
Kaiser Foundation Hospitals, | ||||||||||||||||
Gtd. Notes | 4.150 | 05/01/47 | 140 | 176,599 | ||||||||||||
Laboratory Corp. of America Holdings, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.200 | 02/01/22 | 20 | 20,696 | ||||||||||||
MultiCare Health System, | ||||||||||||||||
Unsec’d. Notes | 2.803 | 08/15/50 | 280 | 278,184 | ||||||||||||
Providence St. Joseph Health Obligated Group, | ||||||||||||||||
Unsec’d. Notes, Series 19A | 2.532 | 10/01/29 | �� | 190 | 201,964 | |||||||||||
Unsec’d. Notes, Series H | 2.746 | 10/01/26 | 50 | 54,785 | ||||||||||||
Tenet Healthcare Corp., | ||||||||||||||||
Gtd. Notes, 144A | 6.125 | 10/01/28 | 325 | 316,666 | ||||||||||||
Sr. Sec’d. Notes | 4.625 | 07/15/24 | 478 | 479,612 | ||||||||||||
UnitedHealth Group, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.500 | 02/15/24 | 355 | 389,625 | ||||||||||||
|
| |||||||||||||||
5,196,740 | ||||||||||||||||
Home Builders 0.1% | ||||||||||||||||
Brookfield Residential Properties, Inc./Brookfield | ||||||||||||||||
Gtd. Notes, 144A | 4.875 | 02/15/30 | 600 | 561,373 | ||||||||||||
Mattamy Group Corp. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.625 | 03/01/30 | 325 | 328,438 | ||||||||||||
Taylor Morrison Communities, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 5.875 | 06/15/27 | 90 | 99,466 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.125 | 08/01/30 | 80 | 85,589 | ||||||||||||
|
| |||||||||||||||
1,074,866 | ||||||||||||||||
Insurance 0.2% | ||||||||||||||||
Liberty Mutual Group, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 3.950 | 05/15/60 | 115 | 126,811 | ||||||||||||
Gtd. Notes, 144A | 3.951 | 10/15/50 | 180 | 200,452 | ||||||||||||
Gtd. Notes, 144A | 4.569 | 02/01/29 | 350 | 422,754 |
See Notes to Financial Statements.
PGIM Balanced Fund 57
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Insurance (cont’d.) | ||||||||||||||||
Lincoln National Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.300% | 10/09/37 | 110 | $ | 143,775 | |||||||||||
Markel Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.000 | 03/30/43 | 25 | 30,202 | ||||||||||||
Sr. Unsec’d. Notes | 5.000 | 04/05/46 | 325 | 428,839 | ||||||||||||
New York Life Insurance Co., | ||||||||||||||||
Sub. Notes, 144A | 6.750 | 11/15/39 | 110 | 167,239 | ||||||||||||
Principal Financial Group, Inc., | ||||||||||||||||
Gtd. Notes | 4.625 | 09/15/42 | 15 | 18,720 | ||||||||||||
Teachers Insurance & Annuity Association of America, | ||||||||||||||||
Sub. Notes, 144A | 4.270 | 05/15/47 | 240 | 282,922 | ||||||||||||
Sub. Notes, 144A | 6.850 | 12/16/39 | 22 | 32,496 | ||||||||||||
|
| |||||||||||||||
1,854,210 | ||||||||||||||||
Lodging 0.1% | ||||||||||||||||
Marriott International, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.250 | 09/15/22 | 130 | 132,510 | ||||||||||||
Sr. Unsec’d. Notes, Series R | 3.125 | 06/15/26 | 561 | 557,181 | ||||||||||||
|
| |||||||||||||||
689,691 | ||||||||||||||||
Machinery-Diversified 0.1% | ||||||||||||||||
Westinghouse Air Brake Technologies Corp., | ||||||||||||||||
Gtd. Notes | 4.950 | 09/15/28 | 89 | 103,918 | ||||||||||||
Xylem, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 1.950 | 01/30/28 | 975 | 1,017,281 | ||||||||||||
Sr. Unsec’d. Notes | 4.875 | 10/01/21 | 160 | 166,979 | ||||||||||||
|
| |||||||||||||||
1,288,178 | ||||||||||||||||
Media 0.7% | ||||||||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 4.250 | 02/01/31 | 350 | 361,711 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.375 | 06/01/29 | 900 | 975,108 | ||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, | ||||||||||||||||
Sr. Sec’d. Notes | 5.375 | 05/01/47 | 120 | 142,284 | ||||||||||||
Sr. Sec’d. Notes | 6.384 | 10/23/35 | 110 | 149,999 | ||||||||||||
Sr. Sec’d. Notes | 6.484 | 10/23/45 | 172 | 230,133 | ||||||||||||
Clear Channel Worldwide Holdings, Inc., | ||||||||||||||||
Gtd. Notes | 9.250 | 02/15/24 | 1,000 | 969,708 |
See Notes to Financial Statements.
58
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Media (cont’d.) | ||||||||||||||||
Comcast Corp., | ||||||||||||||||
Gtd. Notes | 3.969% | 11/01/47 | 19 | $ | 22,739 | |||||||||||
Cox Communications, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.150 | 08/15/24 | 740 | 797,492 | ||||||||||||
CSC Holdings LLC, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.375 | 02/15/31 | 310 | 300,412 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.625 | 12/01/30 | 300 | 301,104 | ||||||||||||
Diamond Sports Group LLC/Diamond Sports Finance Co., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 5.375 | 08/15/26 | 550 | 389,193 | ||||||||||||
Discovery Communications LLC, | ||||||||||||||||
Gtd. Notes(a) | 5.300 | 05/15/49 | 575 | 703,045 | ||||||||||||
DISH DBS Corp., | ||||||||||||||||
Gtd. Notes, 144A | 7.375 | 07/01/28 | 225 | 231,328 | ||||||||||||
Time Warner Cable LLC, | ||||||||||||||||
Sr. Sec’d. Notes | 5.500 | 09/01/41 | 140 | 169,954 | ||||||||||||
ViacomCBS, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.375 | 03/15/43 | 600 | 637,535 | ||||||||||||
Sr. Unsec’d. Notes | 5.250 | 04/01/44 | 65 | 76,040 | ||||||||||||
Videotron Ltd. (Canada), | ||||||||||||||||
Gtd. Notes | 5.000 | 07/15/22 | 150 | 156,546 | ||||||||||||
|
| |||||||||||||||
6,614,331 | ||||||||||||||||
Mining 0.1% | ||||||||||||||||
Barrick North America Finance LLC (Canada), | ||||||||||||||||
Gtd. Notes | 5.750 | 05/01/43 | 280 | 407,382 | ||||||||||||
BHP Billiton Finance USA Ltd. (Australia), | ||||||||||||||||
Gtd. Notes, 144A | 6.250(ff) | 10/19/75 | 65 | 65,085 | ||||||||||||
Newmont Corp., | ||||||||||||||||
Gtd. Notes | 3.625 | 06/09/21 | 110 | 111,788 | ||||||||||||
Southern Copper Corp. (Peru), | ||||||||||||||||
Sr. Unsec’d. Notes | 7.500 | 07/27/35 | 95 | 139,253 | ||||||||||||
|
| |||||||||||||||
723,508 | ||||||||||||||||
Miscellaneous Manufacturing 0.1% | ||||||||||||||||
Bombardier, Inc. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 7.500 | 03/15/25 | 300 | 224,930 | ||||||||||||
Pentair Finance Sarl, | ||||||||||||||||
Gtd. Notes(a) | 4.500 | 07/01/29 | 450 | 512,057 | ||||||||||||
|
| |||||||||||||||
736,987 |
See Notes to Financial Statements.
PGIM Balanced Fund 59
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Multi-National 0.0% | ||||||||||||||||
Corp. Andina de Fomento (Supranational Bank), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.750% | 01/06/23 | 70 | $ | 72,719 | |||||||||||
Sr. Unsec’d. Notes | 3.250 | 02/11/22 | 65 | 67,041 | ||||||||||||
|
| |||||||||||||||
139,760 | ||||||||||||||||
Oil & Gas 1.3% | ||||||||||||||||
Antero Resources Corp., | ||||||||||||||||
Gtd. Notes | 5.125 | 12/01/22 | 250 | 206,810 | ||||||||||||
Gtd. Notes | 5.625 | 06/01/23 | 500 | 367,471 | ||||||||||||
Ascent Resources Utica Holdings LLC/ARU Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 10.000 | 04/01/22 | 225 | 223,588 | ||||||||||||
BP Capital Markets America, Inc., | ||||||||||||||||
Gtd. Notes | 3.790 | 02/06/24 | 518 | 567,852 | ||||||||||||
BP Capital Markets PLC (United Kingdom), | ||||||||||||||||
Gtd. Notes | 4.375(ff) | –(rr) | 750 | 781,653 | ||||||||||||
Cenovus Energy, Inc. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes | 5.400 | 06/15/47 | 318 | 268,652 | ||||||||||||
CNOOC Finance 2013 Ltd. (China), | ||||||||||||||||
Gtd. Notes | 2.875 | 09/30/29 | 450 | 479,553 | ||||||||||||
Concho Resources, Inc., | ||||||||||||||||
Gtd. Notes | 3.750 | 10/01/27 | 2,000 | 2,159,618 | ||||||||||||
Gtd. Notes | 4.875 | 10/01/47 | 35 | 38,654 | ||||||||||||
ConocoPhillips Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.950 | 04/15/29 | 150 | 208,067 | ||||||||||||
Continental Resources, Inc., | ||||||||||||||||
Gtd. Notes | 4.500 | 04/15/23 | 754 | 718,403 | ||||||||||||
Devon Energy Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.600 | 07/15/41 | 35 | 35,352 | ||||||||||||
EOG Resources, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.900 | 04/01/35 | 120 | 134,493 | ||||||||||||
Helmerich & Payne, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.650 | 03/15/25 | 240 | 262,958 | ||||||||||||
Husky Energy, Inc. (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes | 4.400 | 04/15/29 | 650 | 681,212 | ||||||||||||
MEG Energy Corp. (Canada), | ||||||||||||||||
Gtd. Notes, 144A | 7.125 | 02/01/27 | 200 | 179,510 | ||||||||||||
Occidental Petroleum Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.450 | 09/15/36 | 200 | 169,993 | ||||||||||||
Ovintiv, Inc., | ||||||||||||||||
Gtd. Notes | 6.500 | 08/15/34 | 340 | 315,793 | ||||||||||||
Gtd. Notes | 6.500 | 02/01/38 | 50 | 45,324 |
See Notes to Financial Statements.
60
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Oil & Gas (cont’d.) | ||||||||||||||||
Petrobras Global Finance BV (Brazil), | ||||||||||||||||
Gtd. Notes | 6.625% | 01/16/34 | GBP | 230 | $ | 324,919 | ||||||||||
Gtd. Notes | 6.900 | 03/19/49 | 430 | 478,161 | ||||||||||||
Gtd. Notes | 7.375 | 01/17/27 | 60 | 71,085 | ||||||||||||
Gtd. Notes | 8.750 | 05/23/26 | 60 | 74,950 | ||||||||||||
Petroleos Mexicanos (Mexico), | ||||||||||||||||
Gtd. Notes | 5.500 | 01/21/21 | 50 | 50,466 | ||||||||||||
Gtd. Notes | 6.350 | 02/12/48 | 136 | 101,864 | ||||||||||||
Gtd. Notes | 6.500 | 03/13/27 | 1,650 | 1,538,595 | ||||||||||||
Gtd. Notes, 144A | 6.490 | 01/23/27 | 73 | 68,287 | ||||||||||||
Gtd. Notes, 144A | 7.690 | 01/23/50 | 303 | 251,043 | ||||||||||||
Gtd. Notes, EMTN | 4.875 | 02/21/28 | EUR | 240 | 246,259 | |||||||||||
Gtd. Notes, MTN | 6.750 | 09/21/47 | 231 | 177,673 | ||||||||||||
Gtd. Notes, MTN | 6.875 | 08/04/26 | 10 | 9,617 | ||||||||||||
Range Resources Corp., | ||||||||||||||||
Gtd. Notes, 144A | 9.250 | 02/01/26 | 625 | 641,986 | ||||||||||||
Sinopec Group Overseas Development 2018 Ltd. (China), | ||||||||||||||||
Gtd. Notes, 144A | 3.680 | 08/08/49 | 345 | 395,392 | ||||||||||||
|
| |||||||||||||||
12,275,253 | ||||||||||||||||
Oil & Gas Services 0.0% | ||||||||||||||||
Schlumberger Holdings Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.900 | 05/17/28 | 336 | 360,825 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.000 | 12/21/25 | 23 | 25,707 | ||||||||||||
|
| |||||||||||||||
386,532 | ||||||||||||||||
Packaging & Containers 0.0% | ||||||||||||||||
WestRock RKT LLC, | ||||||||||||||||
Gtd. Notes | 4.900 | 03/01/22 | 95 | 100,742 | ||||||||||||
Pharmaceuticals 1.1% | ||||||||||||||||
AbbVie, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.600 | 05/14/25 | 315 | 349,048 | ||||||||||||
Sr. Unsec’d. Notes | 4.500 | 05/14/35 | 235 | 285,323 | ||||||||||||
Sr. Unsec’d. Notes | 4.700 | 05/14/45 | 250 | 305,970 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.250 | 11/21/49 | 1,285 | 1,518,382 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.550 | 03/15/35 | 430 | 524,638 | ||||||||||||
Bausch Health Cos., Inc., | ||||||||||||||||
Gtd. Notes, 144A | 7.000 | 01/15/28 | 500 | 530,223 |
See Notes to Financial Statements.
PGIM Balanced Fund 61
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Pharmaceuticals (cont’d.) | ||||||||||||||||
Bayer US Finance II LLC (Germany), | ||||||||||||||||
Gtd. Notes, 144A | 3.500% | 06/25/21 | 200 | $ | 203,956 | |||||||||||
Becton, Dickinson & Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.734 | 12/15/24 | 65 | 71,807 | ||||||||||||
Bristol-Myers Squibb Co., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.125 | 06/15/39 | 70 | 88,479 | ||||||||||||
Sr. Unsec’d. Notes(a) | 4.250 | 10/26/49 | 395 | 519,304 | ||||||||||||
Sr. Unsec’d. Notes | 5.000 | 08/15/45 | 225 | 314,466 | ||||||||||||
Cigna Corp., | ||||||||||||||||
Gtd. Notes | 4.500 | 02/25/26 | 967 | 1,127,502 | ||||||||||||
CVS Health Corp., | ||||||||||||||||
Sr. Unsec’d. Notes(a) | 4.300 | 03/25/28 | 1,635 | 1,916,338 | ||||||||||||
Sr. Unsec’d. Notes | 4.780 | 03/25/38 | 90 | 109,186 | ||||||||||||
Sr. Unsec’d. Notes | 5.125 | 07/20/45 | 487 | 614,494 | ||||||||||||
Sr. Unsec’d. Notes | 5.300 | 12/05/43 | 45 | 57,275 | ||||||||||||
Mylan NV, | ||||||||||||||||
Gtd. Notes | 5.250 | 06/15/46 | 755 | 940,967 | ||||||||||||
Shire Acquisitions Investments Ireland DAC, | ||||||||||||||||
Gtd. Notes | 2.400 | 09/23/21 | 228 | 232,076 | ||||||||||||
Takeda Pharmaceutical Co. Ltd. (Japan), | ||||||||||||||||
Sr. Unsec’d. Notes | 3.025 | 07/09/40 | 250 | 260,117 | ||||||||||||
Upjohn, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 3.850 | 06/22/40 | 140 | 151,228 | ||||||||||||
Gtd. Notes, 144A | 4.000 | 06/22/50 | 260 | 276,216 | ||||||||||||
|
| |||||||||||||||
10,396,995 | ||||||||||||||||
Pipelines 0.8% | ||||||||||||||||
Energy Transfer Operating LP, | ||||||||||||||||
Gtd. Notes | 4.950 | 06/15/28 | 210 | 222,316 | ||||||||||||
Gtd. Notes | 5.000 | 05/15/50 | 170 | 156,742 | ||||||||||||
Gtd. Notes | 5.300 | 04/15/47 | 500 | 465,436 | ||||||||||||
Enterprise Products Operating LLC, | ||||||||||||||||
Gtd. Notes | 3.200 | 02/15/52 | 275 | 249,489 | ||||||||||||
Gtd. Notes | 4.200 | 01/31/50 | 345 | 365,506 | ||||||||||||
Gtd. Notes | 4.850 | 03/15/44 | 185 | 208,851 | ||||||||||||
Florida Gas Transmission Co. LLC, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 2.550 | 07/01/30 | 350 | 366,505 | ||||||||||||
Kinder Morgan, Inc., | ||||||||||||||||
Gtd. Notes | 3.250 | 08/01/50 | 220 | 198,583 | ||||||||||||
MPLX LP, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.650 | 08/15/30 | 630 | 614,600 | ||||||||||||
Sr. Unsec’d. Notes | 4.500 | 04/15/38 | 175 | 178,290 |
See Notes to Financial Statements.
62
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Pipelines (cont’d.) | ||||||||||||||||
MPLX LP, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.875% | 06/01/25 | 375 | $ | 424,355 | |||||||||||
Sr. Unsec’d. Notes | 5.200 | 03/01/47 | 20 | 21,533 | ||||||||||||
Sr. Unsec’d. Notes | 5.500 | 02/15/49 | 90 | 100,844 | ||||||||||||
ONEOK Partners LP, | ||||||||||||||||
Gtd. Notes | 6.200 | 09/15/43 | 205 | 217,080 | ||||||||||||
ONEOK, Inc., | ||||||||||||||||
Gtd. Notes | 4.500 | 03/15/50 | 1,000 | 885,709 | ||||||||||||
Gtd. Notes | 4.950 | 07/13/47 | 50 | 47,486 | ||||||||||||
Phillips 66 Partners LP, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.550 | 10/01/26 | 360 | 380,429 | ||||||||||||
Plains All American Pipeline LP/PAA Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.300 | 01/31/43 | 740 | 628,440 | ||||||||||||
Spectra Energy Partners LP, | ||||||||||||||||
Gtd. Notes | 3.375 | 10/15/26 | 165 | 181,023 | ||||||||||||
Tallgrass Energy Partners LP/Tallgrass Energy | ||||||||||||||||
Finance Corp., | ||||||||||||||||
Gtd. Notes, 144A | 7.500 | 10/01/25 | 125 | 126,139 | ||||||||||||
Western Midstream Operating LP, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.000 | 07/01/22 | 445 | 447,744 | ||||||||||||
Sr. Unsec’d. Notes | 5.300 | 03/01/48 | 20 | 16,224 | ||||||||||||
Williams Cos., Inc. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 4.850 | 03/01/48 | 20 | 22,403 | ||||||||||||
Sr. Unsec’d. Notes | 4.900 | 01/15/45 | 220 | 236,998 | ||||||||||||
Sr. Unsec’d. Notes | 5.400 | 03/04/44 | 175 | 197,417 | ||||||||||||
|
| |||||||||||||||
6,960,142 | ||||||||||||||||
Real Estate Investment Trusts (REITs) 0.5% | ||||||||||||||||
Brandywine Operating Partnership LP, | ||||||||||||||||
Gtd. Notes | 4.550 | 10/01/29 | 450 | 477,409 | ||||||||||||
Brixmor Operating Partnership LP, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.050 | 07/01/30 | 345 | 369,353 | ||||||||||||
GLP Capital LP/GLP Financing II, Inc., | ||||||||||||||||
Gtd. Notes | 5.375 | 04/15/26 | 175 | 193,999 | ||||||||||||
Healthpeak Properties, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.875 | 01/15/31 | 315 | 333,962 | ||||||||||||
Ventas Realty LP, | ||||||||||||||||
Gtd. Notes | 2.650 | 01/15/25 | 1,750 | 1,828,137 |
See Notes to Financial Statements.
PGIM Balanced Fund 63
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Real Estate Investment Trusts (REITs) (cont’d.) | ||||||||||||||||
VEREIT Operating Partnership LP, | ||||||||||||||||
Gtd. Notes | 3.400% | 01/15/28 | 800 | $ | 834,307 | |||||||||||
Welltower, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.250 | 04/01/26 | 160 | 183,432 | ||||||||||||
|
| |||||||||||||||
4,220,599 | ||||||||||||||||
Retail 0.6% | ||||||||||||||||
AutoZone, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 1.650 | 01/15/31 | 185 | 181,413 | ||||||||||||
Dollar Tree, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes(a) | 4.200 | 05/15/28 | 2,350 | 2,762,454 | ||||||||||||
eG Global Finance PLC (United Kingdom), | ||||||||||||||||
Sr. Sec’d. Notes | 6.250 | 10/30/25 | EUR | 1,200 | 1,403,640 | |||||||||||
L Brands, Inc., | ||||||||||||||||
Gtd. Notes | 6.625 | 04/01/21 | 225 | 231,218 | ||||||||||||
Macy’s Retail Holdings LLC, | ||||||||||||||||
Gtd. Notes | 3.875 | 01/15/22 | 26 | 24,612 | ||||||||||||
Sally Holdings LLC/Sally Capital, Inc., | ||||||||||||||||
Gtd. Notes | 5.625 | 12/01/25 | 170 | 172,132 | ||||||||||||
Suburban Propane Partners LP/Suburban Energy Finance Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.875 | 03/01/27 | 500 | 513,935 | ||||||||||||
|
| |||||||||||||||
5,289,404 | ||||||||||||||||
Semiconductors 0.4% | ||||||||||||||||
Broadcom, Inc., | ||||||||||||||||
Gtd. Notes | 3.459 | 09/15/26 | 166 | 181,791 | ||||||||||||
Gtd. Notes | 4.700 | 04/15/25 | 1,750 | 1,987,352 | ||||||||||||
Gtd. Notes | 4.750 | 04/15/29 | 975 | 1,132,844 | ||||||||||||
|
| |||||||||||||||
3,301,987 | ||||||||||||||||
Software 0.0% | ||||||||||||||||
Microsoft Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.525 | 06/01/50 | 48 | 50,071 | ||||||||||||
Sr. Unsec’d. Notes | 2.675 | 06/01/60 | 295 | 309,783 | ||||||||||||
|
| |||||||||||||||
359,854 | ||||||||||||||||
Telecommunications 0.9% | ||||||||||||||||
AT&T, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 3.800 | 02/15/27 | 240 | 270,539 |
See Notes to Financial Statements.
64
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Telecommunications (cont’d.) | ||||||||||||||||
AT&T, Inc., (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 4.300% | 02/15/30 | 80 | $ | 94,717 | |||||||||||
Sr. Unsec’d. Notes, 144A | 3.500 | 09/15/53 | 2,073 | 2,003,354 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 3.550 | 09/15/55 | 115 | 110,410 | ||||||||||||
Sr. Unsec’d. Notes, 144A(a) | 3.650 | 09/15/59 | 665 | 648,072 | ||||||||||||
British Telecommunications PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes | 9.625 | 12/15/30 | 50 | 80,062 | ||||||||||||
Intelsat Jackson Holdings SA (Luxembourg), | ||||||||||||||||
Gtd. Notes | 5.500 | 08/01/23(d) | 400 | 250,797 | ||||||||||||
Level 3 Financing, Inc., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 3.400 | 03/01/27 | 1,250 | 1,348,615 | ||||||||||||
Sprint Capital Corp., | ||||||||||||||||
Gtd. Notes | 8.750 | 03/15/32 | 300 | 439,225 | ||||||||||||
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC, | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 3.360 | 03/20/23 | 69 | 69,593 | ||||||||||||
T-Mobile USA, Inc., | ||||||||||||||||
Sr. Sec’d. Notes, 144A | 2.550 | 02/15/31 | 1,500 | 1,550,251 | ||||||||||||
Sr. Sec’d. Notes, 144A | 4.500 | 04/15/50 | 300 | 358,019 | ||||||||||||
Verizon Communications, Inc., | ||||||||||||||||
Sr. Unsec’d. Notes | 4.500 | 08/10/33 | 185 | 233,764 | ||||||||||||
Sr. Unsec’d. Notes | 4.862 | 08/21/46 | 711 | 967,482 | ||||||||||||
|
| |||||||||||||||
8,424,900 | ||||||||||||||||
Transportation 0.1% | ||||||||||||||||
Burlington Northern Santa Fe LLC, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.700 | 08/01/28 | 135 | 184,611 | ||||||||||||
CSX Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 6.150 | 05/01/37 | 170 | 241,849 | ||||||||||||
Norfolk Southern Corp., | ||||||||||||||||
Sr. Unsec’d. Notes | 2.903 | 02/15/23 | 97 | 101,523 | ||||||||||||
Sr. Unsec’d. Notes | 5.590 | 05/17/25 | 20 | 23,890 | ||||||||||||
XPO Logistics, Inc., | ||||||||||||||||
Gtd. Notes, 144A | 6.750 | 08/15/24 | 300 | 317,547 | ||||||||||||
|
| |||||||||||||||
869,420 | ||||||||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS | 151,099,872 | |||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 65
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
MUNICIPAL BONDS 0.4% | ||||||||||||||||
Alabama 0.0% | ||||||||||||||||
Alabama Economic Settlement Authority, | ||||||||||||||||
Taxable, Revenue Bonds, Series B | 4.263% | 09/15/32 | 35 | $ | 41,512 | |||||||||||
|
| |||||||||||||||
California 0.2% | ||||||||||||||||
Bay Area Toll Authority, | ||||||||||||||||
Revenue Bonds, BABs, Series F2 | 6.263 | 04/01/49 | 220 | 375,201 | ||||||||||||
Taxable, Revenue Bonds | 2.574 | 04/01/31 | 415 | 450,815 | ||||||||||||
State of California, | ||||||||||||||||
General Obligation Unlimited, BABs | 7.300 | 10/01/39 | 210 | 344,824 | ||||||||||||
General Obligation Unlimited, Taxable, BABs | 7.500 | 04/01/34 | 15 | 24,862 | ||||||||||||
|
| |||||||||||||||
1,195,702 | ||||||||||||||||
|
| |||||||||||||||
Illinois 0.1% | ||||||||||||||||
Chicago O’Hare International Airport, | ||||||||||||||||
Revenue Bonds, BABs, Series B | 6.395 | 01/01/40 | 160 | 238,625 | ||||||||||||
State of Illinois, | ||||||||||||||||
General Obligation Unlimited, Series A | 5.000 | 10/01/22 | 35 | 36,733 | ||||||||||||
General Obligation Unlimited, Series D | 5.000 | 11/01/22 | 710 | 740,452 | ||||||||||||
General Obligation Unlimited, Taxable, Pension | 5.100 | 06/01/33 | 100 | 100,397 | ||||||||||||
|
| |||||||||||||||
1,116,207 | ||||||||||||||||
|
| |||||||||||||||
Michigan 0.1% | ||||||||||||||||
University of Michigan, | ||||||||||||||||
Revenue Bonds, Series B | 2.437 | 04/01/40 | 550 | 567,633 | ||||||||||||
|
| |||||||||||||||
New Jersey 0.0% | ||||||||||||||||
New Jersey Turnpike Authority, | ||||||||||||||||
Taxable, Revenue Bonds, BABs, Series F | 7.414 | 01/01/40 | 165 | 278,035 | ||||||||||||
|
| |||||||||||||||
New York 0.0% | ||||||||||||||||
New York City Transitional Finance Authority Future | ||||||||||||||||
Tax Secured Revenue, | ||||||||||||||||
Taxable, Revenue Bonds, BABs | 5.767 | 08/01/36 | 190 | 253,944 | ||||||||||||
|
|
See Notes to Financial Statements.
66
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
MUNICIPAL BONDS (Continued) | ||||||||||||||||
Ohio 0.0% | ||||||||||||||||
Ohio State University (The), | ||||||||||||||||
Taxable, Revenue Bonds, BABs, Series C | 4.910% | 06/01/40 | 65 | $ | 90,557 | |||||||||||
Ohio Water Development Authority Water Pollution Control Loan Fund, | ||||||||||||||||
Taxable, Revenue Bonds, BABs, Series B2 | 4.879 | 12/01/34 | 45 | 54,828 | ||||||||||||
|
| |||||||||||||||
145,385 | ||||||||||||||||
|
| |||||||||||||||
Oregon 0.0% | ||||||||||||||||
State of Oregon Department of Transportation, | ||||||||||||||||
Taxable, Revenue Bonds, BABs, Series A | 5.834 | 11/15/34 | 70 | 101,706 | ||||||||||||
|
| |||||||||||||||
Pennsylvania 0.0% | ||||||||||||||||
Pennsylvania Turnpike Commission, | ||||||||||||||||
Revenue Bonds, BABs, Series B | 5.511 | 12/01/45 | 80 | 121,839 | ||||||||||||
|
| |||||||||||||||
Virginia 0.0% | ||||||||||||||||
University of Virginia, | ||||||||||||||||
Taxable, Revenue Bonds, Series C | 4.179 | 09/01/2117 | 80 | 110,222 | ||||||||||||
|
| |||||||||||||||
TOTAL MUNICIPAL BONDS | 3,932,185 | |||||||||||||||
|
| |||||||||||||||
RESIDENTIAL MORTGAGE-BACKED SECURITIES 1.7% | ||||||||||||||||
Alternative Loan Trust, | ||||||||||||||||
Series 2004-18CB, Class 3A1 | 5.250 | 09/25/35 | 3 | 3,131 | ||||||||||||
Banc of America Mortgage Trust, | ||||||||||||||||
Series 2005-A, Class 2A1 | 3.690(cc) | 02/25/35 | 14 | 13,985 | ||||||||||||
Bellemeade Re Ltd. (Bermuda), | ||||||||||||||||
Series 2018-01A, Class M1B, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor 0.000%) | 1.748(c) | 04/25/28 | 79 | 78,744 | ||||||||||||
Series 2018-03A, Class M1B, 144A, 1 Month LIBOR + 1.850% (Cap N/A, Floor 1.850%) | 1.998(c) | 10/25/28 | 93 | 92,110 | ||||||||||||
Series 2019-03A, Class M1A, 144A, 1 Month LIBOR + 1.100% (Cap N/A, Floor 1.100%) | 1.248(c) | 07/25/29 | 101 | 100,726 | ||||||||||||
Series 2019-03A, Class M1B, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor 1.600%) | 1.748(c) | 07/25/29 | 300 | 293,357 | ||||||||||||
Series 2019-04A, Class M1A, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor 1.400%) | 1.575(c) | 10/25/29 | 99 | 99,007 | ||||||||||||
Series 2019-04A, Class M1B, 144A, 1 Month LIBOR + 2.000% (Cap N/A, Floor 2.000%) | 2.175(c) | 10/25/29 | 300 | 290,397 | ||||||||||||
Series 2020-01A, Class M1A, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor 0.000%) | 2.798(c) | 06/25/30 | 290 | 290,596 |
See Notes to Financial Statements.
PGIM Balanced Fund 67
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||
Bellemeade Re Ltd. (Bermuda), (cont’d.) | ||||||||||||||
Series 2020-01A, Class M1B, 144A, 1 Month LIBOR + 3.400% (Cap N/A, Floor 0.000%) | 3.548%(c) | 06/25/30 | 150 | $ | 152,045 | |||||||||
Chase Mortgage Finance Trust, | ||||||||||||||
Series 2007-A01, Class 1A5 | 3.503(cc) | 02/25/37 | 34 | 33,870 | ||||||||||
CIM Trust, | ||||||||||||||
Series 2017-03, Class A1, 144A, 1 Month LIBOR + 2.000% (Cap N/A, Floor 0.000%) | 2.155(c) | 01/25/57 | 360 | 361,529 | ||||||||||
Series 2017-06, Class A1, 144A | 3.015(cc) | 06/25/57 | 493 | 497,536 | ||||||||||
Series 2017-08, Class A1, 144A | 3.000(cc) | 12/25/65 | 344 | 344,781 | ||||||||||
Connecticut Avenue Securities Trust, | ||||||||||||||
Series 2019-R03, Class 1M2, 144A, 1 Month LIBOR + 2.150% (Cap N/A, Floor 0.000%) | 2.298(c) | 09/25/31 | 228 | 227,611 | ||||||||||
Series 2019-R07, Class 1M2, 144A, 1 Month LIBOR + 2.100% (Cap N/A, Floor 0.000%) | 2.248(c) | 10/25/39 | 250 | 248,759 | ||||||||||
Credit Suisse Mortgage Trust, | ||||||||||||||
Series 2018-RPL09, Class A, 144A | 3.850(cc) | 09/25/57 | 370 | 405,912 | ||||||||||
Series 2020-WL01, Class A, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor 0.000%) | 1.548(c) | 12/25/59^ | 1,101 | 1,090,430 | ||||||||||
Eagle Re Ltd. (Bermuda), | ||||||||||||||
Series 2018-01, Class M1, 144A, 1 Month LIBOR + 1.700% (Cap N/A, Floor 1.700%) | 1.875(c) | 11/25/28 | 69 | 68,684 | ||||||||||
Fannie Mae Connecticut Avenue Securities, | ||||||||||||||
Series 2018-C03, Class 1M21 Month LIBOR + 2.150% (Cap N/A, Floor 2.150%) | 2.298(c) | 10/25/30 | 75 | 73,133 | ||||||||||
Fannie Mae REMICS, | ||||||||||||||
Series 2014-11, Class VB | 4.500 | 04/25/42 | 500 | 583,599 | ||||||||||
Series 2018-78, Class A | 3.500 | 07/25/43 | 354 | 362,181 | ||||||||||
FHLMC Structured Agency Credit Risk Debt Notes, | ||||||||||||||
Series 2017-DNA03, Class M11 Month LIBOR + 0.750% (Cap N/A, Floor 0.000%) | 0.898(c) | 03/25/30 | 142 | 142,300 | ||||||||||
FHLMC Structured Agency Credit Risk REMIC Trust, | ||||||||||||||
Series 2020-DNA02, Class M2, 144A, 1 Month LIBOR + 1.850% (Cap N/A, Floor 1.850%) | 1.998(c) | 02/25/50 | 360 | 350,473 | ||||||||||
Series 2020-DNA03, Class M2, 144A, 1 Month LIBOR + 3.000% (Cap N/A, Floor 0.000%) | 3.148(c) | 06/25/50 | 235 | 235,588 | ||||||||||
Series 2020-DNA04, Class B1, 144A, 1 Month LIBOR + 6.000% (Cap N/A, Floor 0.000%) | 6.148(c) | 08/25/50 | 450 | 464,904 | ||||||||||
Series 2020-DNA04, Class M2, 144A, 1 Month LIBOR + 3.750% (Cap N/A, Floor 0.000%) | 3.898(c) | 08/25/50 | 230 | 232,774 | ||||||||||
Series 2020-HQA03, Class M2, 144A, 1 Month LIBOR + 3.600% (Cap N/A, Floor 0.000%) | 3.748(c) | 07/25/50 | 625 | 628,130 | ||||||||||
FHLMC Structured Agency Credit Risk Trust, | ||||||||||||||
Series 2018-DNA03, Class M1, 144A, 1 Month LIBOR + 0.750% (Cap N/A, Floor 0.000%) | 0.898(c) | 09/25/48 | 1 | 589 |
See Notes to Financial Statements.
68
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||
Finsbury Square PLC (United Kingdom), | ||||||||||||||
Series 2020-02A, Class A, 144A, 3 Month Sterling | ||||||||||||||
Overnight Index Average + 1.300% (Cap N/A, Floor 0.000%) | 1.366%(c) | 06/16/70 | GBP | 200 | $ | 259,949 | ||||||||
GCAT LLC, | ||||||||||||||
Series 2019-04, Class A1, 144A | 3.228 | 11/26/49 | 1,124 | 1,126,361 | ||||||||||
JPMorgan Mortgage Trust, | ||||||||||||||
Series 2007-A01, Class 4A1 | 2.962(cc) | 07/25/35 | 14 | 13,950 | ||||||||||
Legacy Mortgage Asset Trust, | ||||||||||||||
Series 2019-GS06, Class A1, 144A | 3.000 | 06/25/59 | 92 | 91,853 | ||||||||||
Series 2019-PR01, Class A1, 144A | 3.858 | 09/25/59 | 183 | 183,000 | ||||||||||
Series 2020-GS01, Class A1, 144A | 2.882 | 10/25/59 | 383 | 383,705 | ||||||||||
Series 2020-SL01, Class A, 144A | 2.734 | 09/01/2100 | 470 | 469,997 | ||||||||||
LSTAR Securities Investment Trust, | ||||||||||||||
Series 2019-02, Class A1, 144A, 1 Month LIBOR + 1.500% (Cap N/A, Floor 0.000%) | 1.655(c) | 04/01/24 | 89 | 88,008 | ||||||||||
Mortgage Repurchase Agreement Financing Trust, | ||||||||||||||
Series 2020-03, Class A1, 144A, 1 Month LIBOR + 1.250% (Cap N/A, Floor 1.250%) | 1.406(c) | 01/23/23 | 185 | 185,007 | ||||||||||
Series 2020-04, Class A1, 144A, 1 Month LIBOR + 1.350% (Cap N/A, Floor 0.000%) | 1.506(c) | 04/23/23 | 175 | 175,028 | ||||||||||
Series 2020-04, Class A2, 144A, 1 Month LIBOR + 1.350% (Cap N/A, Floor 0.000%) | 1.506(c) | 04/23/23 | 345 | 345,055 | ||||||||||
New Residential Mortgage Loan Trust, | ||||||||||||||
Series 2018-01A, Class A1A, 144A | 4.000(cc) | 12/25/57 | 221 | 238,662 | ||||||||||
Series 2018-04A, Class A1S, 144A, 1 Month LIBOR + 0.750% (Cap N/A, Floor 0.750%) | 0.898(c) | 01/25/48 | 154 | 153,209 | ||||||||||
Oaktown Re III Ltd. (Bermuda), | ||||||||||||||
Series 2019-01A, Class M1A, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor 1.400%) | 1.548(c) | 07/25/29 | 12 | 11,589 | ||||||||||
Oaktown Re IV Ltd. (Bermuda), | ||||||||||||||
Series 2020-01A, Class M1A, 144A, 1 Month LIBOR + 3.200% (Cap N/A, Floor 3.200%) | 3.348(c) | 07/25/30 | 200 | 201,464 | ||||||||||
Series 2020-01A, Class M1B, 144A, 1 Month LIBOR + 4.750% (Cap N/A, Floor 4.750%) | 4.898(c) | 07/25/30 | 300 | 299,751 | ||||||||||
OBX Trust, | ||||||||||||||
Series 2018-01, Class A2, 144A, 1 Month LIBOR + 0.650% (Cap N/A, Floor 0.000%) | 0.798(c) | 06/25/57 | 133 | 133,083 | ||||||||||
Radnor Re Ltd. (Bermuda), | ||||||||||||||
Series 2020-01, Class M1B, 144A, 1 Month LIBOR + 1.450% (Cap N/A, Floor 1.450%) | 1.598(c) | 02/25/30 | 200 | 193,703 | ||||||||||
Series 2020-02, Class M1A, 144A | — (p) | 10/25/30 | 375 | 375,000 | ||||||||||
Series 2020-02, Class M1B, 144A | — (p) | 10/25/30 | 235 | 235,000 | ||||||||||
Series 2020-02, Class M1C, 144A | — (p) | 10/25/30 | 185 | 185,000 |
See Notes to Financial Statements.
PGIM Balanced Fund 69
Schedule of Investments (continued)
as of September 30, 2020
Description |
Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||
Residential Mortgage Securities PLC (United Kingdom), | ||||||||||||||
Series 32A, Class A, 144A, 3 Month Sterling Overnight Index Average + 1.250% (Cap N/A, Floor 0.000%) | 1.314 | %(c) | 06/20/70 | GBP | 600 | $ | 777,544 | |||||||
Seasoned Credit Risk Transfer Trust, | 3.500 | 08/25/58 | 546 | 594,330 | ||||||||||
Station Place Securitization Trust, | 1.651 | (c) | 05/20/21^ | 1,260 | 1,260,000 | |||||||||
Structured Adjustable Rate Mortgage Loan Trust, | 3.170 | (cc) | 02/25/34 | 24 | 23,632 | |||||||||
|
| |||||||||||||
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES | 15,770,761 | |||||||||||||
|
| |||||||||||||
SOVEREIGN BONDS 1.6% | ||||||||||||||
Abu Dhabi Government International Bond (United Arab Emirates), | 3.125 | 10/11/27 | 485 | 539,145 | ||||||||||
Bermuda Government International Bond (Bermuda), | 2.375 | 08/20/30 | �� | 200 | 202,864 | |||||||||
Colombia Government International Bond (Colombia), | ||||||||||||||
Sr. Unsec’d. Notes | 4.375 | 07/12/21 | 200 | 205,496 | ||||||||||
Sr. Unsec’d. Notes | 5.000 | 06/15/45 | 200 | 234,152 | ||||||||||
Sr. Unsec’d. Notes | 7.375 | 09/18/37 | 100 | 140,556 | ||||||||||
Egypt Government International Bond (Egypt), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.750 | 04/11/25 | EUR | 290 | 331,515 | |||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.750 | 04/16/26 | EUR | 450 | 502,292 | |||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.375 | 04/11/31 | EUR | 290 | 315,433 | |||||||||
Export-Import Bank of India (India), | 3.875 | 02/01/28 | 200 | 209,973 | ||||||||||
Ghana Government International Bond (Ghana), | 6.375 | 02/11/27 | 250 | 225,657 | ||||||||||
Hungary Government International Bond (Hungary), | 6.375 | 03/29/21 | 114 | 117,289 | ||||||||||
Indonesia Government International Bond (Indonesia), | ||||||||||||||
Sr. Unsec’d. Notes | 3.375 | 07/30/25 | EUR | 350 | 455,497 | |||||||||
Sr. Unsec’d. Notes | 4.450 | 02/11/24 | 200 | 221,518 | ||||||||||
Sr. Unsec’d. Notes, EMTN | 2.150 | 07/18/24 | EUR | 315 | 386,865 | |||||||||
Sr. Unsec’d. Notes, EMTN | 4.750 | 01/08/26 | 200 | 232,227 | ||||||||||
Iraq International Bond (Iraq), | 5.800 | 01/15/28 | 347 | 307,719 |
See Notes to Financial Statements.
70
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Japan Finance Organization for Municipalities (Japan), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.125 | % | 10/25/23 | 200 | $ | 209,337 | ||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.625 | 04/20/22 | 400 | 413,295 | ||||||||||||
Panama Government International Bond (Panama), | 6.700 | 01/26/36 | 200 | 290,403 | ||||||||||||
Province of Manitoba (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.125 | 06/22/26 | 100 | 107,727 | ||||||||||||
Sr. Unsec’d. Notes, Series GX | 2.600 | 04/16/24 | 70 | 75,115 | ||||||||||||
Province of Quebec (Canada), | 7.140 | 02/27/26 | 135 | 178,867 | ||||||||||||
Qatar Government International Bond (Qatar), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 3.875 | 04/23/23 | 200 | 214,728 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 5.103 | 04/23/48 | 200 | 278,669 | ||||||||||||
Republic of Italy Government International Bond (Italy), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.375 | 10/17/24 | 1,900 | 1,976,997 | ||||||||||||
Sr. Unsec’d. Notes | 2.875 | 10/17/29 | 2,000 | 2,069,794 | ||||||||||||
Republic of Poland Government International Bond (Poland), | 3.000 | 03/17/23 | 160 | 169,650 | ||||||||||||
Romanian Government International Bond (Romania), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 3.875 | 10/29/35 | EUR | 420 | 559,522 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 4.125 | 03/11/39 | EUR | 270 | 359,553 | |||||||||||
Saudi Government International Bond (Saudi Arabia), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.375 | 10/26/21 | 205 | 208,269 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.875 | 03/04/23 | 285 | 297,644 | ||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 4.000 | 04/17/25 | 200 | 222,142 | ||||||||||||
Sri Lanka Government International Bond (Sri Lanka), | 5.750 | 01/18/22 | 200 | 164,999 | ||||||||||||
Tokyo Metropolitan Government (Japan), | 2.500 | 06/08/22 | 200 | 206,576 | ||||||||||||
Ukraine Government International Bond (Ukraine), | ||||||||||||||||
Sr. Unsec’d. Notes | 8.994 | 02/01/24 | 300 | 313,811 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 4.375 | 01/27/30 | EUR | 400 | 384,090 | |||||||||||
Sr. Unsec’d. Notes, 144A | 7.750 | 09/01/22 | 640 | 655,988 | ||||||||||||
Uruguay Government International Bond (Uruguay), | ||||||||||||||||
Sr. Unsec’d. Notes | 4.975 | 04/20/55 | 210 | 279,768 | ||||||||||||
Sr. Unsec’d. Notes | 5.100 | 06/18/50 | 65 | 87,322 | ||||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS | 14,352,464 | |||||||||||||||
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 71
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS 1.0% |
| |||||||||||||
Federal Home Loan Bank(k) | 5.500 | % | 07/15/36 | 135 | $ | 210,606 | ||||||||
Federal Home Loan Mortgage Corp. | 4.500 | 10/01/39 | 137 | 153,651 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.000 | 04/01/34 | 11 | 13,195 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.000 | 05/01/34 | 22 | 24,818 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.000 | 10/01/35 | 33 | 38,410 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.000 | 11/01/41 | 288 | 331,431 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.500 | 12/01/33 | 23 | 26,768 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.500 | 05/01/34 | 8 | 8,888 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.500 | 07/01/34 | 50 | 58,395 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.500 | 05/01/37 | 9 | 9,973 | ||||||||||
Federal Home Loan Mortgage Corp. | 5.500 | 10/01/37 | 17 | 19,652 | ||||||||||
Federal Home Loan Mortgage Corp. | 6.000 | 01/01/34 | 26 | 29,460 | ||||||||||
Federal Home Loan Mortgage Corp. | 6.750 | 09/15/29 | 25 | 37,786 | ||||||||||
Federal Home Loan Mortgage Corp. | 7.000 | 10/01/31 | 1 | 751 | ||||||||||
Federal Home Loan Mortgage Corp. | 7.000 | 05/01/32 | 12 | 12,995 | ||||||||||
Federal National Mortgage Assoc. | 4.500 | 09/01/39 | 114 | 127,682 | ||||||||||
Federal National Mortgage Assoc. | 4.500 | 08/01/40 | 97 | 108,925 | ||||||||||
Federal National Mortgage Assoc. | 4.500 | 02/01/44 | 145 | 162,749 | ||||||||||
Federal National Mortgage Assoc. | 4.500 | 08/01/44 | 269 | 298,640 | ||||||||||
Federal National Mortgage Assoc. | 4.500 | 01/01/45 | 238 | 266,499 | ||||||||||
Federal National Mortgage Assoc. | 5.000 | 07/01/35 | 20 | 22,853 | ||||||||||
Federal National Mortgage Assoc. | 5.000 | 02/01/36 | 49 | 56,080 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 06/01/33 | 10 | 11,362 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 08/01/33 | 16 | 18,865 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 09/01/33 | 26 | 30,760 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 09/01/33 | 47 | 55,871 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 01/01/34 | 21 | 23,548 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 01/01/34 | 21 | 24,367 | ||||||||||
Federal National Mortgage Assoc. | 5.500 | 07/01/34 | 35 | 41,132 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 09/01/21 | —(r | ) | 33 | |||||||||
Federal National Mortgage Assoc. | 6.000 | 11/01/33 | 17 | 19,119 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 01/01/34 | 7 | 8,571 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 01/01/34 | 99 | 117,313 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 02/01/34 | 10 | 12,042 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 10/01/34 | 3 | 3,674 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 10/01/34 | 5 | 5,598 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 11/01/34 | 10 | 11,916 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 11/01/34 | 17 | 18,827 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 11/01/34 | 60 | 70,008 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 01/01/35 | 12 | 12,939 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 01/01/35 | 59 | 65,878 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 02/01/35 | 51 | 60,369 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 08/01/36 | 16 | 18,370 | ||||||||||
Federal National Mortgage Assoc. | 6.000 | 08/01/38 | 5 | 6,356 | ||||||||||
Federal National Mortgage Assoc. | 6.250 | 05/15/29 | 45 | 65,098 |
See Notes to Financial Statements.
72
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued) | ||||||||||||||||
Federal National Mortgage Assoc. | 6.500 | % | 05/01/24 | 9 | $ | 9,884 | ||||||||||
Federal National Mortgage Assoc. | 6.500 | 07/01/29 | 9 | 10,479 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 07/01/32 | 13 | 15,298 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 04/01/33 | 10 | 11,770 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 01/01/34 | 11 | 12,041 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 01/01/34 | 15 | 18,022 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 10/01/36 | 18 | 21,022 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 09/01/37 | 50 | 57,516 | ||||||||||||
Federal National Mortgage Assoc. | 6.500 | 10/01/37 | 47 | 53,924 | ||||||||||||
Federal National Mortgage Assoc.(k) | 6.625 | 11/15/30 | 145 | 222,690 | ||||||||||||
Federal National Mortgage Assoc. | 7.000 | 06/01/32 | 12 | 14,634 | ||||||||||||
Federal National Mortgage Assoc.(k) | 7.125 | 01/15/30 | 452 | 700,163 | ||||||||||||
Federal National Mortgage Assoc. | 7.500 | 09/01/30 | 1 | 928 | ||||||||||||
Federal National Mortgage Assoc. | 8.000 | 12/01/23 | —(r | ) | 504 | |||||||||||
Federal National Mortgage Assoc. | 8.500 | 02/01/28 | 2 | 1,888 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 09/20/43 | 194 | 204,359 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 01/20/44 | 55 | 57,748 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 03/15/45 | 158 | 164,681 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 05/20/45 | 241 | 255,519 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 08/20/45 | 405 | 425,871 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 06/20/46 | 508 | 533,624 | ||||||||||||
Government National Mortgage Assoc.(k) | 3.000 | 12/20/46 | 813 | 859,978 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 01/20/47 | 743 | 781,962 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 03/20/47 | 260 | 273,630 | ||||||||||||
Government National Mortgage Assoc. | 3.000 | 12/20/48 | 1,226 | 1,285,849 | ||||||||||||
Government National Mortgage Assoc. | 5.000 | 10/20/37 | 11 | 12,717 | ||||||||||||
Government National Mortgage Assoc. | 5.000 | 04/20/45 | 85 | 97,659 | ||||||||||||
Government National Mortgage Assoc. | 5.500 | 07/15/33 | 24 | 26,454 | ||||||||||||
Government National Mortgage Assoc. | 5.500 | 12/15/33 | 7 | 7,199 | ||||||||||||
Government National Mortgage Assoc. | 5.500 | 09/15/34 | 98 | 108,674 | ||||||||||||
Government National Mortgage Assoc. | 5.500 | 01/15/36 | 46 | 52,593 | ||||||||||||
Government National Mortgage Assoc. | 5.500 | 02/15/36 | 72 | 80,026 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 09/15/23 | 2 | 2,394 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 10/15/23 | 2 | 1,823 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 12/15/23 | 1 | 757 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 12/15/23 | 2 | 2,711 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 12/15/23 | 3 | 3,661 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 04/15/24 | 20 | 22,504 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 07/15/32 | 2 | 2,526 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 08/15/32 | —(r | ) | 316 | |||||||||||
Government National Mortgage Assoc. | 6.500 | 08/15/32 | 1 | 750 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 08/15/32 | 2 | 1,771 | ||||||||||||
Government National Mortgage Assoc. | 6.500 | 08/15/32 | 10 | 11,456 | ||||||||||||
Government National Mortgage Assoc. | 7.000 | 06/15/24 | 6 | 6,423 | ||||||||||||
Government National Mortgage Assoc. | 7.000 | 05/15/31 | 5 | 5,992 |
See Notes to Financial Statements.
PGIM Balanced Fund 73
Schedule of Investments (continued)
as of September 30, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued) | ||||||||||||||||
Government National Mortgage Assoc. | 7.500 | % | 04/15/29 | 1 | $ | 590 | ||||||||||
Government National Mortgage Assoc. | 8.000 | 08/15/22 | —(r | ) | 492 | |||||||||||
Government National Mortgage Assoc. | 8.000 | 12/15/22 | 1 | 915 | ||||||||||||
Government National Mortgage Assoc. | 8.000 | 12/15/22 | 2 | 1,914 | ||||||||||||
Government National Mortgage Assoc. | 8.000 | 06/15/25 | 15 | 16,738 | ||||||||||||
Tennessee Valley Authority, Sr. Unsec’d. Notes | 7.125 | 05/01/30 | 90 | 138,558 | ||||||||||||
|
| |||||||||||||||
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS | 9,323,820 | |||||||||||||||
|
| |||||||||||||||
U.S. TREASURY OBLIGATIONS 1.9% | ||||||||||||||||
U.S. Treasury Bonds | 2.875 | 05/15/43 | 1,085 | 1,416,603 | ||||||||||||
U.S. Treasury Bonds | 3.125 | 02/15/43 | 105 | 142,259 | ||||||||||||
U.S. Treasury Bonds | 3.375 | 05/15/44 | 660 | 931,425 | ||||||||||||
U.S. Treasury Bonds(h)(k) | 3.625 | 08/15/43 | 2,455 | 3,579,313 | ||||||||||||
U.S. Treasury Bonds | 3.750 | 11/15/43 | 1,975 | 2,933,801 | ||||||||||||
U.S. Treasury Notes | 0.250 | 09/30/25 | 55 | 54,927 | ||||||||||||
U.S. Treasury Notes | 0.375 | 09/30/27 | 1,790 | 1,777,973 | ||||||||||||
U.S. Treasury Notes | 0.625 | 08/15/30 | 125 | 124,277 | ||||||||||||
U.S. Treasury Strips Coupon | 1.468 | (s) | 11/15/41 | 210 | 155,909 | |||||||||||
U.S. Treasury Strips Coupon | 2.052 | (s) | 11/15/43 | 6,350 | 4,503,787 | |||||||||||
U.S. Treasury Strips Coupon(k) | 2.502 | (s) | 11/15/30 | 194 | 178,040 | |||||||||||
U.S. Treasury Strips Coupon(k) | 2.752 | (s) | 08/15/30 | 321 | 295,458 | |||||||||||
U.S. Treasury Strips Coupon(k) | 2.843 | (s) | 11/15/35 | 575 | 482,933 | |||||||||||
U.S. Treasury Strips Principal, PO | 1.927 | (s) | 05/15/43 | 550 | 401,242 | |||||||||||
|
| |||||||||||||||
TOTAL U.S. TREASURY OBLIGATIONS | 16,977,947 | |||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 903,341,814 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 4.4% | ||||||||||||||||
AFFILIATED MUTUAL FUNDS 4.3% | ||||||||||||||||
PGIM Core Ultra Short Bond Fund(w) | 6,417,829 | 6,417,829 | ||||||||||||||
PGIM Institutional Money Market Fund | 33,134,333 | 33,127,706 | ||||||||||||||
|
| |||||||||||||||
TOTAL AFFILIATED MUTUAL FUNDS | 39,545,535 | |||||||||||||||
|
|
See Notes to Financial Statements.
74
Description | Value | |||
OPTIONS PURCHASED*~ 0.1% | ||||
(cost $3,296) | 200,342 | |||
|
|
Interest Rate | Maturity Date | Principal Amount (000)# | ||||||||||||||
U.S. TREASURY OBLIGATION(k)(n) 0.0% | ||||||||||||||||
U.S. Treasury Bills | 0.100 | % | 12/17/20 | 200 | 199,959 | |||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 39,945,836 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 103.1% | ||||||||||||||||
(cost $826,933,762) | 943,287,650 | |||||||||||||||
Liabilities in excess of other assets(z) (3.1)% | (28,093,002 | ) | ||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 915,194,648 | ||||||||||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
AUD—Australian Dollar
BRL—Brazilian Real
CAD—Canadian Dollar
CHF—Swiss Franc
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
NOK—Norwegian Krone
NZD—New Zealand Dollar
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RUB—Russian Ruble
SEK—Swedish Krona
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
TWD—New Taiwanese Dollar
USD—US Dollar
See Notes to Financial Statements.
PGIM Balanced Fund 75
Schedule of Investments (continued)
as of September 30, 2020
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
Aces—Alternative Credit Enhancements Securities
ADR—American Depositary Receipt
BABs—Build America Bonds
BBR—New Zealand Bank Bill Rate
BBSW—Australian Bank Bill Swap Reference Rate
BROIS—Brazil Overnight Index Swap
BUBOR—Budapest Interbank Offered Rate
CLO—Collateralized Loan Obligation
CMBS—Collateralized Mortgage-Backed Security
CMS—Constant Maturity Swap
COOIS—Colombia Overnight Interbank Reference Rate
EAFE—Europe, Australasia, Far East
EMTN—Euro Medium Term Note
ETF—Exchange-Traded Fund
FHLMC—Federal Home Loan Mortgage Corporation
GMTN—Global Medium Term Note
IO—Interest Only (Principal amount represents notional)
JIBAR—Johannesburg Interbank Agreed Rate
LIBOR—London Interbank Offered Rate
LP—Limited Partnership
M—Monthly payment frequency for swaps
MSCI—Morgan Stanley Capital International
MTN—Medium Term Note
OTC—Over-the-counter
PIK—Payment-in-Kind
PJSC—Public Joint-Stock Company
PO—Principal Only
PRFC—Preference Shares
Q—Quarterly payment frequency for swaps
REITs—Real Estate Investment Trust
REMICS—Real Estate Mortgage Investment Conduit Security
S—Semiannual payment frequency for swaps
S&P—Standard & Poor’s
SDR—Sweden Depositary Receipt
Strips—Separate Trading of Registered Interest and Principal of Securities
T—Swap payment upon termination
USOIS—United States Overnight Index Swap
* | Non-income producing security. |
~ | See tables subsequent to the Schedule of Investments for options detail. |
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
^ | Indicates a Level 3 instrument. The aggregate value of Level 3 instruments is $2,350,465 and 0.3% 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 $32,539,992; cash collateral of $33,096,124 (included in liabilities) was received with which the Series 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 Series 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. |
See Notes to Financial Statements.
76
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at September 30, 2020. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of September 30, 2020. 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. |
(ff) | Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
(h) | Represents security, or a portion thereof, segregated as collateral for OTC derivatives. |
(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. |
(p) | Interest rate not available as of September 30, 2020. |
(r) | Less than $500 par. |
(rr) | Perpetual security with no stated maturity date. |
(s) | Represents zero coupon bond or principal only security. Rate represents yield to maturity at purchase date. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
(z) | Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments: |
Options Purchased:
OTC Traded
Description | Call/ Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||
2- Year 10 CMS Curve CAP | Call | Barclays Bank PLC | 07/12/21 | 0.11% | — | 577 | $ | 13,773 | ||||||||||
2- Year 10 CMS Curve CAP | Call | Barclays Bank PLC | 07/13/21 | 0.11% | — | 561 | 13,391 | |||||||||||
2- Year 10 CMS Curve CAP | Call | Bank of America, N.A. | 08/16/21 | 0.15% | — | 1,402 | 31,763 | |||||||||||
2- Year 10 CMS Curve CAP | Call | Bank of America, N.A. | 08/20/21 | 0.15% | — | 2,784 | 63,181 | |||||||||||
2- Year 10 CMS Curve CAP | Call | Bank of America, N.A. | 09/13/21 | 0.14% | — | 2,820 | 66,224 | |||||||||||
2- Year 10 CMS Curve CAP | Call | Barclays Bank PLC | 11/09/21 | 0.21% | — | 561 | 12,010 | |||||||||||
|
| |||||||||||||||||
Total Options Purchased (cost $3,296) | $ | 200,342 | ||||||||||||||||
|
|
Futures contracts outstanding at September 30, 2020:
Number of Contracts | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | ||||||||||
Long Positions: |
| |||||||||||||
78 | 5 Year U.S. Treasury Notes | Dec. 2020 | $ | 9,830,438 | $ | 14,046 | ||||||||
141 | 20 Year U.S. Treasury Bonds | Dec. 2020 | 24,855,656 | (93,999 | ) | |||||||||
124 | 30 Year U.S. Ultra Treasury Bonds | Dec. 2020 | 27,504,750 | (188,706 | ) | |||||||||
11 | S&P 500 E-Mini Index | Dec. 2020 | 1,843,600 | 11,954 | ||||||||||
|
| |||||||||||||
(256,705 | ) | |||||||||||||
|
| |||||||||||||
Short Positions: | ||||||||||||||
568 | 2 Year U.S. Treasury Notes | Dec. 2020 | 125,505,813 | (49,750 | ) | |||||||||
22 | 5 Year Euro-Bobl | Dec. 2020 | 3,486,561 | (7,171 | ) |
See Notes to Financial Statements.
PGIM Balanced Fund 77
Schedule of Investments (continued)
as of September 30, 2020
Futures contracts outstanding at September 30, 2020 (continued):
Number | Type | Expiration Date | Current Notional Amount | Value / Unrealized Appreciation (Depreciation) | |||||||||||||
Short Positions (cont’d): | |||||||||||||||||
21 | 10 Year Euro-Bund | Dec. 2020 | $ | 4,296,935 | $ | (42,682 | ) | ||||||||||
528 | 10 Year U.S. Treasury Notes | Dec. 2020 | 73,672,500 | (134,432 | ) | ||||||||||||
50 | 10 Year U.S. Ultra Treasury Notes | Dec. 2020 | 7,996,094 | 10,475 | |||||||||||||
17 | Euro Schatz Index | Dec. 2020 | 2,238,125 | (864 | ) | ||||||||||||
|
| ||||||||||||||||
(224,424 | ) | ||||||||||||||||
|
| ||||||||||||||||
$ | (481,129 | ) | |||||||||||||||
|
|
Forward foreign currency exchange contracts outstanding at September 30, 2020:
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 10/20/20 | Citibank, N.A. | AUD | 176 | $ | 128,000 | $ | 125,759 | $ | — | $ | (2,241 | ) | ||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | AUD | 172 | 123,000 | 122,933 | — | (67 | ) | ||||||||||||||||||
Expiring 10/20/20 | JPMorgan Chase Bank, N.A. | AUD | 180 | 130,596 | 128,822 | — | (1,774 | ) | ||||||||||||||||||
Expiring 10/20/20 | JPMorgan Chase Bank, N.A. | AUD | 137 | 99,000 | 97,972 | — | (1,028 | ) | ||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 782 | 142,000 | 139,199 | — | (2,801 | ) | ||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 730 | 133,000 | 130,030 | — | (2,970 | ) | ||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 583 | 108,034 | 103,757 | — | (4,277 | ) | ||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 572 | 108,279 | 101,921 | — | (6,358 | ) | ||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 468 | 87,000 | 83,308 | — | (3,692 | ) | ||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 292 | 52,000 | 51,909 | — | (91 | ) | ||||||||||||||||||
Expiring 10/02/20 | JPMorgan Chase Bank, N.A. | BRL | 693 | 125,200 | 123,427 | — | (1,773 | ) | ||||||||||||||||||
Expiring 10/02/20 | JPMorgan Chase Bank, N.A. | BRL | 262 | 48,000 | 46,725 | — | (1,275 | ) | ||||||||||||||||||
Expiring 10/02/20 | Morgan Stanley & Co. International PLC | BRL | 587 | 107,565 | 104,459 | — | (3,106 | ) | ||||||||||||||||||
Expiring 10/02/20 | Morgan Stanley & Co. International PLC | BRL | 403 | 75,000 | 71,768 | — | (3,232 | ) | ||||||||||||||||||
Expiring 11/04/20 | JPMorgan Chase Bank, N.A. | BRL | 2,527 | 457,955 | 449,586 | — | (8,369 | ) | ||||||||||||||||||
British Pound, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | GBP | 236 | 306,786 | 304,956 | — | (1,830 | ) | ||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | GBP | 74 | 94,000 | 95,389 | 1,389 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | GBP | 73 | 92,000 | 93,825 | 1,825 | — |
See Notes to Financial Statements.
78
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
British Pound (cont’d.), | ||||||||||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | GBP | 100 | $ | 126,000 | $ | 128,780 | $ | 2,780 | $ | — | |||||||||||||||
Canadian Dollar, | ||||||||||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 404 | 303,428 | 303,531 | 103 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 253 | 187,000 | 190,149 | 3,149 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 210 | 158,000 | 157,800 | — | (200 | ) | ||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 184 | 136,000 | 138,215 | 2,215 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 177 | 135,000 | 132,843 | — | (2,157 | ) | ||||||||||||||||||
Expiring 10/20/20 | JPMorgan Chase Bank, N.A. | CAD | 399 | 304,256 | 299,474 | — | (4,782 | ) | ||||||||||||||||||
Expiring 10/20/20 | JPMorgan Chase Bank, N.A. | CAD | 324 | 242,000 | 243,451 | 1,451 | — | |||||||||||||||||||
Expiring 10/20/20 | The Toronto-Dominion Bank | CAD | 179 | 133,000 | 134,115 | 1,115 | — | |||||||||||||||||||
Chilean Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | CLP | 66,366 | 86,000 | 84,603 | — | (1,397 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | CLP | 61,580 | 81,000 | 78,502 | — | (2,498 | ) | ||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||
Expiring 11/06/20 | Citibank, N.A. | CNH | 8,228 | 1,170,557 | 1,209,603 | 39,046 | — | |||||||||||||||||||
Expiring 11/06/20 | Citibank, N.A. | CNH | 1,818 | 261,705 | 267,245 | 5,540 | — | |||||||||||||||||||
Expiring 11/06/20 | Citibank, N.A. | CNH | 892 | 128,265 | 131,137 | 2,872 | — | |||||||||||||||||||
Expiring 11/06/20 | HSBC Bank USA, N.A. | CNH | 7,656 | 1,094,719 | 1,125,538 | 30,819 | — | |||||||||||||||||||
Expiring 11/06/20 | HSBC Bank USA, N.A. | CNH | 760 | 108,830 | 111,692 | 2,862 | — | |||||||||||||||||||
Expiring 11/06/20 | JPMorgan Chase Bank, N.A. | CNH | 1,859 | 266,000 | 273,320 | 7,320 | — | |||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | CZK | 4,680 | 197,364 | 202,806 | 5,442 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | CZK | 2,186 | 98,000 | 94,713 | — | (3,287 | ) | ||||||||||||||||||
Expiring 10/19/20 | HSBC Bank USA, N.A. | CZK | 2,190 | 98,000 | 94,893 | — | (3,107 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,559 | 117,000 | 110,890 | — | (6,110 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,436 | 110,000 | 105,563 | — | (4,437 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,157 | 97,000 | 93,461 | — | (3,539 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 1,924 | 85,000 | 83,350 | — | (1,650 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | CZK | 2,702 | 122,000 | 117,078 | — | (4,922 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | CZK | 2,232 | 99,000 | 96,703 | — | (2,297 | ) |
See Notes to Financial Statements.
PGIM Balanced Fund 79
Schedule of Investments (continued)
as of September 30, 2020
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Euro, | ||||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | EUR | 219 | $ | 249,000 | $ | 256,325 | $ | 7,325 | $ | — | |||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | EUR | 84 | 100,000 | 99,027 | — | (973 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | EUR | 61 | 71,059 | 71,117 | 58 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 180 | 215,130 | 211,526 | — | (3,604 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 180 | 216,068 | 211,115 | — | (4,953 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 106 | 125,000 | 124,194 | — | (806 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 94 | 106,822 | 109,896 | 3,074 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 92 | 108,525 | 107,344 | — | (1,181 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 92 | 108,448 | 107,630 | — | (818 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 91 | 108,830 | 107,157 | — | (1,673 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | EUR | 92 | 108,422 | 107,430 | — | (992 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | EUR | 92 | 108,681 | 107,585 | — | (1,096 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | EUR | 92 | 107,998 | 108,467 | 469 | — | |||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||
Expiring 10/19/20 | HSBC Bank USA, N.A. | HUF | 42,821 | 145,000 | 138,086 | — | (6,914 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 64,168 | 215,130 | 206,922 | — | (8,208 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 42,151 | 141,000 | 135,925 | — | (5,075 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 28,820 | 98,000 | 92,935 | — | (5,065 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 27,466 | 93,000 | 88,569 | — | (4,431 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 24,256 | 83,000 | 78,218 | — | (4,782 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | HUF | 43,377 | 149,000 | 139,877 | — | (9,123 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | HUF | 27,392 | 92,000 | 88,330 | — | (3,670 | ) | ||||||||||||||||||
Indian Rupee, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | INR | 12,230 | 165,000 | 164,902 | — | (98 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | INR | 40,580 | 549,189 | 547,172 | — | (2,017 | ) |
See Notes to Financial Statements.
80
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Indian Rupee (cont’d.), | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | INR | 12,816 | $ | 173,000 | $ | 172,806 | $ | — | $ | (194 | ) | ||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | INR | 18,554 | 250,000 | 250,181 | 181 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | INR | 8,031 | 108,371 | 108,292 | — | (79 | ) | ||||||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | IDR | 1,875,875 | 125,000 | 125,088 | 88 | — | |||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | IDR | 1,609,174 | 108,508 | 107,304 | — | (1,204 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | IDR | 1,551,992 | 104,000 | 103,491 | — | (509 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | IDR | 1,272,654 | 85,000 | 84,864 | — | (136 | ) | ||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | IDR | 1,850,983 | 123,000 | 123,429 | 429 | — | |||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | IDR | 1,774,956 | 118,000 | 118,359 | 359 | — | |||||||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | ILS | 775 | 226,000 | 226,420 | 420 | — | |||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | ILS | 409 | 118,000 | 119,673 | 1,673 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | ILS | 1,001 | 294,914 | 292,662 | — | (2,252 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | ILS | 723 | 214,889 | 211,244 | — | (3,645 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | ILS | 434 | 126,000 | 126,948 | 948 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | ILS | 434 | 125,000 | 126,893 | 1,893 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | ILS | 409 | 120,000 | 119,509 | — | (491 | ) | ||||||||||||||||||
Japanese Yen, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | JPY | 13,495 | 128,000 | 127,982 | — | (18 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | JPY | 75,790 | 710,577 | 718,779 | 8,202 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 32,422 | 306,771 | 307,488 | 717 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 32,143 | 305,830 | 304,839 | — | (991 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 11,325 | 107,565 | 107,406 | — | (159 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 10,823 | 101,113 | 102,646 | 1,533 | — | |||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | JPY | 32,229 | 306,786 | 305,651 | — | (1,135 | ) | ||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | MXN | 2,406 | 108,293 | 107,848 | — | (445 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | MXN | 8,151 | 369,697 | 365,413 | — | (4,284 | ) |
See Notes to Financial Statements.
PGIM Balanced Fund 81
Schedule of Investments (continued)
as of September 30, 2020
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Mexican Peso (cont’d.), | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 2,466 | $ | 108,508 | $ | 110,524 | $ | 2,016 | $ | — | |||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 2,389 | 107,273 | 107,102 | — | (171 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 2,375 | 108,053 | 106,448 | — | (1,605 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 2,023 | 95,000 | 90,689 | — | (4,311 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 1,743 | 81,000 | 78,114 | — | (2,886 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 1,429 | 65,000 | 64,048 | — | (952 | ) | ||||||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | TWD | 31,134 | 1,070,638 | 1,087,701 | 17,063 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | TWD | 6,957 | 242,000 | 243,042 | 1,042 | — | |||||||||||||||||||
New Zealand Dollar, | ||||||||||||||||||||||||||
Expiring 10/20/20 | BNP Paribas S.A. | NZD | 180 | 120,000 | 118,961 | — | (1,039 | ) | ||||||||||||||||||
Expiring 10/20/20 | BNP Paribas S.A. | NZD | 178 | 117,000 | 118,050 | 1,050 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 653 | 430,932 | 432,006 | 1,074 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 174 | 114,000 | 114,942 | 942 | — | |||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 118 | 78,000 | 77,738 | — | (262 | ) | ||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 111 | 74,000 | 73,472 | — | (528 | ) | ||||||||||||||||||
Expiring 10/20/20 | JPMorgan Chase Bank, N.A. | NZD | 461 | 303,714 | 304,908 | 1,194 | — | |||||||||||||||||||
Expiring 10/20/20 | Morgan Stanley & Co. International PLC | NZD | 755 | 507,093 | 499,226 | — | (7,867 | ) | ||||||||||||||||||
Expiring 10/20/20 | Morgan Stanley & Co. International PLC | NZD | 613 | 405,037 | 405,388 | 351 | — | |||||||||||||||||||
Expiring 10/20/20 | The Toronto-Dominion Bank | NZD | 166 | 112,000 | 109,976 | — | (2,024 | ) | ||||||||||||||||||
Norwegian Krone, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | NOK | 914 | 98,000 | 97,996 | — | (4 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | NOK | 1,592 | 170,000 | 170,715 | 715 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | NOK | 883 | 97,000 | 94,666 | — | (2,334 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | NOK | 785 | 89,000 | 84,118 | — | (4,882 | ) | ||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | PEN | 664 | 187,000 | 184,267 | — | (2,733 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | PEN | 612 | 172,000 | 169,719 | — | (2,281 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | PEN | 577 | 163,000 | 160,083 | — | (2,917 | ) |
See Notes to Financial Statements.
82
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Peruvian Nuevo Sol (cont’d.), | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | PEN | 407 | $ | 114,000 | $ | 112,804 | $ | — | $ | (1,196 | ) | ||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | PEN | 383 | 108,508 | 106,162 | — | (2,346 | ) | ||||||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | PHP | 7,976 | 164,000 | 164,114 | 114 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | PHP | 7,365 | 151,000 | 151,549 | 549 | — | |||||||||||||||||||
Polish Zloty, | ||||||||||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 1,021 | 256,993 | 264,074 | 7,081 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 683 | 180,000 | 176,705 | — | (3,295 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 674 | 181,000 | 174,373 | — | (6,627 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 334 | 89,000 | 86,330 | — | (2,670 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 289 | 77,000 | 74,797 | — | (2,203 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | PLN | 530 | 140,000 | 137,081 | — | (2,919 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | PLN | 454 | 122,000 | 117,415 | — | (4,585 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | PLN | 337 | 91,000 | 87,170 | — | (3,830 | ) | ||||||||||||||||||
Russian Ruble, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Morgan Stanley & Co. International PLC | RUB | 27,622 | 360,044 | 352,754 | — | (7,290 | ) | ||||||||||||||||||
Expiring 12/16/20 | Morgan Stanley & Co. International PLC | RUB | 4,873 | 64,000 | 62,228 | — | (1,772 | ) | ||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 1,760 | 1,289,700 | 1,289,744 | 44 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 147 | 108,097 | 107,997 | — | (100 | ) | ||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||
Expiring 12/17/20 | JPMorgan Chase Bank, N.A. | ZAR | 977 | 58,000 | 57,806 | — | (194 | ) | ||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | KRW | 897,555 | 754,933 | 769,860 | 14,927 | — | |||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | KRW | 194,555 | 167,000 | 166,876 | — | (124 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | KRW | 644,636 | 542,042 | 552,923 | 10,881 | — |
See Notes to Financial Statements.
PGIM Balanced Fund 83
Schedule of Investments (continued)
as of September 30, 2020
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
South Korean Won (cont’d.), | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | KRW | 153,336 | $ | 130,175 | $ | 131,521 | $ | 1,346 | $ | — | |||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | KRW | 132,495 | 114,000 | 113,645 | — | (355 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | KRW | 125,967 | 108,508 | 108,046 | — | (462 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | KRW | 101,714 | 86,783 | 87,243 | 460 | — | |||||||||||||||||||
Expiring 12/16/20 | Morgan Stanley & Co. International PLC | KRW | 127,119 | 108,448 | 109,034 | 586 | — | |||||||||||||||||||
Swedish Krona, | ||||||||||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | SEK | 4,487 | 485,814 | 501,093 | 15,279 | — | |||||||||||||||||||
Swiss Franc, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | CHF | 137 | 149,000 | 149,101 | 101 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | CHF | 121 | 134,000 | 131,695 | — | (2,305 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CHF | 193 | 206,000 | 209,745 | 3,745 | — | |||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | THB | 16,097 | 510,352 | 507,947 | — | (2,405 | ) | ||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | THB | 6,798 | 214,792 | 214,505 | — | (287 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | THB | 11,125 | 353,632 | 351,061 | — | (2,571 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | THB | 10,294 | 327,317 | 324,834 | — | (2,483 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | THB | 7,471 | 237,706 | 235,753 | — | (1,953 | ) | ||||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | TRY | 836 | 107,100 | 105,781 | — | (1,319 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 30,098,347 | $ | 30,057,829 | 215,857 | (256,375 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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 10/20/20 | Citibank, N.A. | AUD | 154 | $ | 108,000 | $ | 110,640 | $ | — | $ | (2,640 | ) | ||||||||||||||
Expiring 10/20/20 | HSBC Bank USA, N.A. | AUD | 2,226 | 1,546,880 | 1,594,729 | — | (47,849 | ) | ||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||||||
Expiring 10/02/20 | Citibank, N.A. | BRL | 1,677 | 307,402 | 298,623 | 8,779 | — |
See Notes to Financial Statements.
84
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Brazilian Real (cont’d.), | ||||||||||||||||||||||||||
Expiring 10/02/20 | JPMorgan Chase Bank, N.A. | BRL | 2,527 | $ | 458,317 | $ | 449,969 | $ | 8,348 | $ | — | |||||||||||||||
Expiring 10/02/20 | JPMorgan Chase Bank, N.A. | BRL | 577 | 108,371 | 102,715 | 5,656 | — | |||||||||||||||||||
Expiring 10/02/20 | Morgan Stanley & Co. International PLC | BRL | 591 | 108,264 | 105,195 | 3,069 | — | |||||||||||||||||||
Expiring 11/04/20 | BNP Paribas S.A. | BRL | 268 | 48,000 | 47,735 | 265 | — | |||||||||||||||||||
Expiring 11/04/20 | JPMorgan Chase Bank, N.A. | BRL | 401 | 71,300 | 71,356 | — | (56 | ) | ||||||||||||||||||
Expiring 11/04/20 | JPMorgan Chase Bank, N.A. | BRL | 322 | 58,000 | 57,344 | 656 | — | |||||||||||||||||||
British Pound, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | GBP | 200 | 252,707 | 258,091 | — | (5,384 | ) | ||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | GBP | 120 | 155,000 | 155,246 | — | (246 | ) | ||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | GBP | 82 | 107,000 | 106,196 | 804 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | GBP | 86 | 111,000 | 111,320 | — | (320 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | GBP | 72 | 94,000 | 92,770 | 1,230 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | GBP | 48 | 60,696 | 61,858 | — | (1,162 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | GBP | 600 | 785,124 | 774,283 | 10,841 | — | |||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | GBP | 24 | 30,351 | 30,929 | — | (578 | ) | ||||||||||||||||||
Expiring 10/19/20 | The Toronto-Dominion Bank | GBP | 24 | 30,229 | 30,930 | — | (701 | ) | ||||||||||||||||||
Canadian Dollar, | ||||||||||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | CAD | 1,514 | 1,121,992 | 1,136,924 | — | (14,932 | ) | ||||||||||||||||||
Chilean Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | CLP | 209,012 | 272,559 | 266,448 | 6,111 | — | |||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | CLP | 300,773 | 391,137 | 383,424 | 7,713 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | CLP | 85,491 | 108,136 | 108,984 | — | (848 | ) | ||||||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||||||
Expiring 11/06/20 | JPMorgan Chase Bank, N.A. | CNH | 1,461 | 213,000 | 214,727 | — | (1,727 | ) | ||||||||||||||||||
Expiring 11/06/20 | JPMorgan Chase Bank, N.A. | CNH | 1,057 | 154,000 | 155,353 | — | (1,353 | ) | ||||||||||||||||||
Colombian Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | COP | 1,304,415 | 347,786 | 339,469 | 8,317 | — | |||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | COP | 644,194 | 172,010 | 167,649 | 4,361 | — | |||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | COP | 1,181,043 | 306,713 | 307,363 | — | (650 | ) |
See Notes to Financial Statements.
PGIM Balanced Fund 85
Schedule of Investments (continued)
as of September 30, 2020
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Colombian Peso (cont’d.), | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | COP | 822,117 | $ | 221,918 | $ | 213,953 | $ | 7,965 | $ | — | |||||||||||||||
Czech Koruna, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | CZK | 4,256 | 191,000 | 184,421 | 6,579 | — | |||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | CZK | 2,781 | 121,000 | 120,501 | 499 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,968 | 127,000 | 128,589 | — | (1,589 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,433 | 109,000 | 105,414 | 3,586 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,154 | 93,000 | 93,326 | — | (326 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CZK | 2,073 | 94,000 | 89,846 | 4,154 | — | |||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | CZK | 2,369 | 105,000 | 102,644 | 2,356 | — | |||||||||||||||||||
Euro, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | EUR | 3,590 | 4,077,798 | 4,211,150 | — | (133,352 | ) | ||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | EUR | 108 | 127,000 | 127,192 | — | (192 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | EUR | 127 | 150,000 | 149,034 | 966 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | EUR | 101 | 119,000 | 118,468 | 532 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 179 | 210,000 | 209,552 | 448 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | EUR | 94 | 106,989 | 109,945 | — | (2,956 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | EUR | 3,505 | 3,964,922 | 4,111,281 | — | (146,359 | ) | ||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | EUR | 245 | 285,400 | 287,360 | — | (1,960 | ) | ||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | HUF | 22,215 | 72,000 | 71,637 | 363 | — | |||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | HUF | 60,641 | 193,704 | 195,549 | — | (1,845 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | HUF | 47,737 | 161,000 | 153,937 | 7,063 | — | |||||||||||||||||||
Expiring 10/19/20 | HSBC Bank USA, N.A. | HUF | 48,991 | 161,000 | 157,981 | 3,019 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 48,182 | 160,000 | 155,373 | 4,627 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 35,105 | 116,000 | 113,204 | 2,796 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 34,838 | 117,000 | 112,342 | 4,658 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 27,246 | 89,000 | 87,860 | 1,140 | — |
See Notes to Financial Statements.
86
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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 10/19/20 | JPMorgan Chase Bank, N.A. | HUF | 21,812 | $ | 72,000 | $ | 70,336 | $ | 1,664 | $ | — | |||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | IDR | 6,310,107 | 420,268 | 420,776 | — | (508 | ) | ||||||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | ILS | 466 | 136,000 | 136,291 | — | (291 | ) | ||||||||||||||||||
Japanese Yen, | ||||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | JPY | 16,594 | 157,000 | 157,371 | — | (371 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | JPY | 12,021 | 113,000 | 114,006 | — | (1,006 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 45,684 | 432,982 | 433,261 | — | (279 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 32,123 | 306,147 | 304,645 | 1,502 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 13,594 | 130,041 | 128,925 | 1,116 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | JPY | 11,604 | 108,890 | 110,049 | — | (1,159 | ) | ||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | MXN | 2,441 | 108,508 | 109,439 | — | (931 | ) | ||||||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | TWD | 11,850 | 415,000 | 414,002 | 998 | — | |||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | TWD | 11,325 | 396,000 | 395,639 | 361 | — | |||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | TWD | 10,911 | 379,000 | 381,174 | — | (2,174 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | TWD | 6,709 | 232,000 | 234,401 | — | (2,401 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | TWD | 5,597 | 196,000 | 195,529 | 471 | — | |||||||||||||||||||
New Zealand Dollar, | ||||||||||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 655 | 427,500 | 433,187 | — | (5,687 | ) | ||||||||||||||||||
Expiring 10/20/20 | Citibank, N.A. | NZD | 409 | 271,161 | 270,671 | 490 | — | |||||||||||||||||||
Expiring 10/20/20 | Morgan Stanley & Co. International PLC | NZD | 404 | 267,950 | 267,373 | 577 | — | |||||||||||||||||||
Expiring 10/20/20 | The Toronto-Dominion Bank | NZD | 875 | 575,983 | 578,751 | — | (2,768 | ) | ||||||||||||||||||
Norwegian Krone, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | NOK | 1,376 | 146,000 | 147,480 | — | (1,480 | ) | ||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | NOK | 1,092 | 114,000 | 117,120 | — | (3,120 | ) | ||||||||||||||||||
Expiring 10/19/20 | HSBC Bank USA, N.A. | NOK | 1,563 | 166,295 | 167,553 | — | (1,258 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | NOK | 1,922 | 215,000 | 206,014 | 8,986 | — |
See Notes to Financial Statements.
PGIM Balanced Fund 87
Schedule of Investments (continued)
as of September 30, 2020
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): |
| |||||||||||||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | PEN | 2,620 | $ | 739,253 | $ | 726,946 | $ | 12,307 | $ | — | |||||||||||||||
Philippine Peso, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | PHP | 21,003 | 430,327 | 432,140 | — | (1,813 | ) | ||||||||||||||||||
Polish Zloty, | ||||||||||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 1,130 | 299,000 | 292,396 | 6,604 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 658 | 174,000 | 170,325 | 3,675 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 538 | 137,000 | 139,286 | — | (2,286 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 460 | 119,000 | 118,950 | 50 | — | |||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 388 | 99,000 | 100,439 | — | (1,439 | ) | ||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | PLN | 197 | 53,450 | 51,091 | 2,359 | — | |||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | PLN | 722 | 193,000 | 186,869 | 6,131 | — | |||||||||||||||||||
Russian Ruble, | ||||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | RUB | 4,096 | 53,000 | 52,304 | 696 | — | |||||||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 353 | 258,000 | 258,397 | — | (397 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 337 | 246,000 | 246,686 | — | (686 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 336 | 244,000 | 246,473 | — | (2,473 | ) | ||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | SGD | 293 | 215,000 | 214,757 | 243 | — | |||||||||||||||||||
South African Rand, | ||||||||||||||||||||||||||
Expiring 12/17/20 | Citibank, N.A. | ZAR | 4,899 | 292,269 | 289,790 | 2,479 | — | |||||||||||||||||||
Expiring 12/17/20 | Citibank, N.A. | ZAR | 2,245 | 129,952 | 132,810 | — | (2,858 | ) | ||||||||||||||||||
Expiring 12/17/20 | Citibank, N.A. | ZAR | 1,869 | 107,998 | 110,565 | — | (2,567 | ) | ||||||||||||||||||
Expiring 12/17/20 | HSBC Bank USA, N.A. | ZAR | 6,377 | 376,756 | 377,187 | — | (431 | ) | ||||||||||||||||||
Expiring 12/17/20 | JPMorgan Chase Bank, N.A. | ZAR | 1,830 | 108,264 | 108,250 | 14 | — | |||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | KRW | 173,054 | 146,000 | 148,434 | — | (2,434 | ) | ||||||||||||||||||
Swedish Krona, | ||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | SEK | 979 | 112,000 | 109,357 | 2,643 | — |
See Notes to Financial Statements.
88
Forward foreign currency exchange contracts outstanding at September 30, 2020 (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.): | ||||||||||||||||||||||||||||||||
Swedish Krona (cont’d.), | ||||||||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | SEK | 952 | $ | 107,000 | $ | 106,330 | $ | 670 | $ | — | |||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | SEK | 885 | 101,000 | 98,801 | 2,199 | — | |||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | SEK | 796 | 90,000 | 88,883 | 1,117 | — | |||||||||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | SEK | 969 | 106,000 | 108,271 | — | (2,271 | ) | ||||||||||||||||||||||||
Swiss Franc, | ||||||||||||||||||||||||||||||||
Expiring 10/19/20 | BNP Paribas S.A. | CHF | 211 | 224,000 | 229,050 | — | (5,050 | ) | ||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | CHF | 208 | 222,000 | 226,358 | — | (4,358 | ) | ||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | CHF | 191 | 204,000 | 207,670 | — | (3,670 | ) | ||||||||||||||||||||||||
Expiring 10/19/20 | Citibank, N.A. | CHF | 151 | 163,000 | 163,528 | — | (528 | ) | ||||||||||||||||||||||||
Expiring 10/19/20 | JPMorgan Chase Bank, N.A. | CHF | 118 | 129,000 | 128,109 | 891 | — | |||||||||||||||||||||||||
Expiring 10/19/20 | Morgan Stanley & Co. International PLC | CHF | 497 | 531,088 | 540,019 | — | (8,931 | ) | ||||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | THB | 3,718 | 117,000 | 117,324 | — | (324 | ) | ||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | THB | 10,574 | 334,000 | 333,680 | 320 | — | |||||||||||||||||||||||||
Expiring 12/16/20 | HSBC Bank USA, N.A. | THB | 3,935 | 124,000 | 124,158 | — | (158 | ) | ||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | THB | 4,000 | 126,000 | 126,221 | — | (221 | ) | ||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | THB | 3,775 | 119,000 | 119,136 | — | (136 | ) | ||||||||||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | TRY | 571 | 74,000 | 72,267 | 1,733 | — | |||||||||||||||||||||||||
Expiring 12/16/20 | BNP Paribas S.A. | TRY | 452 | 58,000 | 57,175 | 825 | — | |||||||||||||||||||||||||
Expiring 12/16/20 | Citibank, N.A. | TRY | 5,054 | 656,820 | 639,533 | 17,287 | — | |||||||||||||||||||||||||
Expiring 12/16/20 | JPMorgan Chase Bank, N.A. | TRY | 742 | 96,000 | 93,931 | 2,069 | — | |||||||||||||||||||||||||
|
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|
|
|
| |||||||||||||||||||||||||
$ | 32,602,607 | $ | 32,838,718 | 197,378 | (433,489 | ) | ||||||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 413,235 | $ | (689,864 | ) | ||||||||||||||||||||||||||||
|
|
|
|
Cross currency exchange contracts outstanding at September 30, 2020:
Settlement | Type | Notional Amount (000) | In Exchange For (000) | Unrealized Appreciation | Unrealized Depreciation | Counterparty | ||||||||||||||||||||
OTC Cross Currency Exchange Contracts: |
| |||||||||||||||||||||||||
10/19/20 | Buy | CZK | 2,478 | EUR | 94 | $ — | $(2,681) | HSBC Bank USA, N.A. | ||||||||||||||||||
10/19/20 | Buy | EUR | 45 | PLN | 197 | 1,548 | — | Citibank, N.A. |
See Notes to Financial Statements.
PGIM Balanced Fund 89
Schedule of Investments (continued)
as of September 30, 2020
Cross currency exchange contracts outstanding at September 30, 2020 (continued):
Settlement | Type | Notional Amount (000) | In Exchange For (000) | Unrealized Appreciation | Unrealized Depreciation | Counterparty | ||||||||||||||||||||||||||||||||||
OTC Cross Currency Exchange Contracts (cont’d.): |
| |||||||||||||||||||||||||||||||||||||||
10/19/20 | Buy | HUF | 53,380 | EUR | 151 | $ | — | $ | (5,096 | ) | Citibank, N.A. | |||||||||||||||||||||||||||||
10/19/20 | Buy | NOK | 2,841 | EUR | 259 | 727 | — | | Morgan Stanley & Co. International PLC | |||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
$ | 2,275 | $ | (7,777 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
Credit default swap agreements outstanding at September 30, 2020:
Reference Entity/ Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Implied Credit Spread at September 30, 2020(4) | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | ||||||||||||||||||||||||||||||||
OTC Credit Default Swap Agreement on asset-backed securities - Sell Protection(2)^: |
| |||||||||||||||||||||||||||||||||||||||
Towd Point Mortgage Trust | 07/25/56 | 0.450 | %(M) | 471 | * | $ | 35 | $ | — | $ | 35 | Citigroup Global Markets, Inc. | ||||||||||||||||||||||||||||
|
|
|
|
|
|
Reference Entity/ Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | ||||||||||||||||||||||||||||
OTC Credit Default Swap Agreement on corporate and/or sovereign issues - Buy Protection(1): |
| ||||||||||||||||||||||||||||||||||
United Mexican States | 12/20/24 | 1.000 | %(Q) | 400 | $ | 3,788 | $ | (4,019 | ) | $ | 7,807 | Barclays Bank PLC | |||||||||||||||||||||||
|
|
|
|
|
|
Reference Entity/ Obligation | Termination Date | Fixed Rate | Notional Amount (000)#(3) | Implied Credit Spread at September 30, | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | ||||||||||||||||||||||||||||||
OTC Credit Default Swap Agreements on corporate and/or sovereign issues - Sell Protection(2): |
| |||||||||||||||||||||||||||||||||||||
Boeing Co. | 12/20/21 | 1.000 | %(Q) | 1,000 | 2.807% | $ | (21,412 | ) | $ | 6,631 | $ | (28,043 | ) | | Bank of America, N.A. | |||||||||||||||||||||||
Petroleos Mexicanos | 12/20/24 | 1.000 | %(Q) | 400 | 5.666% | (68,662 | ) | (17,634 | ) | (51,028 | ) | | Barclays Bank PLC | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
$ | (90,074 | ) | $ | (11,003 | ) | $ | (79,071 | ) | ||||||||||||||||||||||||||||||
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|
|
|
|
The Series 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
See Notes to Financial Statements.
90
of the CDS contract increases for the protection buyer if the spread increases.
(1) | If the Series 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 Series 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 Series 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 Series 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 Series 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 Series 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. |
* | When an implied credit spread is not available, reference the fair value of credit default swap agreements on credit indices and asset-backed securities. Where the Series is the seller of protection, it serves as an indicator of the current status of the payment/performance risk and represents the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date. Increasing fair value in absolute terms, when compared to the notional amount of the swap, represents 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 September 30, 2020:
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at September 30, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||
Centrally Cleared Interest Rate Swap Agreements: | ||||||||||||||||||||
AUD 1,800 | 02/13/30 | 1.210%(S) | 6 Month BBSW(2)(S) | $ | (8 | ) | $ | 58,379 | $ | 58,387 | ||||||||||
BRL 11,882 | 01/04/27 | 6.215%(T) | 1 Day BROIS(2)(T) | — | (86,615 | ) | (86,615 | ) |
See Notes to Financial Statements.
PGIM Balanced Fund 91
Schedule of Investments (continued)
as of September 30, 2020
Interest rate swap agreements outstanding at September 30, 2020 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at September 30, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): |
| |||||||||||||||||||||
CNH | 30,350 | 02/13/25 | 2.570%(Q) | 7 Day China Fixing Repo Rates(2)(Q) | $ | (20 | ) | $ | (8,955 | ) | $ | (8,935 | ) | |||||||||
COP | 1,141,000 | 02/18/25 | 4.505%(Q) | 1 Day COOIS(2)(Q) | — | 18,968 | 18,968 | |||||||||||||||
COP | 1,967,840 | 02/21/25 | 4.565%(Q) | 1 Day COOIS(2)(Q) | — | 34,006 | 34,006 | |||||||||||||||
COP | 806,000 | 02/18/30 | 5.072%(Q) | 1 Day COOIS(2)(Q) | — | 15,580 | 15,580 | |||||||||||||||
COP | 564,000 | 02/18/30 | 5.081%(Q) | 1 Day COOIS(2)(Q) | — | 11,014 | 11,014 | |||||||||||||||
COP | 1,216,000 | 02/24/30 | 5.078%(Q) | 1 Day COOIS(2)(Q) | — | 24,582 | 24,582 | |||||||||||||||
HUF | 452,000 | 02/14/30 | 1.605%(A) | 6 Month BUBOR(2)(S) | — | 3,462 | 3,462 | |||||||||||||||
HUF | 123,000 | 02/18/30 | 1.803%(A) | 6 Month BUBOR(2)(S) | — | 8,285 | 8,285 | |||||||||||||||
NZD | 600 | 02/14/30 | 1.523%(S) | 3 Month BBR(2)(Q) | — | 39,905 | 39,905 | |||||||||||||||
900 | 02/14/30 | 1.382%(A) | 1 Day USOIS(1)(A) | — | (84,265 | ) | (84,265 | ) | ||||||||||||||
ZAR | 29,000 | 07/07/25 | 5.160%(Q) | 3 Month JIBAR(1)(Q) | (1,042 | ) | (28,116 | ) | (27,074 | ) | ||||||||||||
ZAR | 9,600 | 02/11/30 | 7.481%(Q) | 3 Month JIBAR(2)(Q) | (353 | ) | 29,145 | 29,498 | ||||||||||||||
ZAR | 12,200 | 02/28/30 | 7.500%(Q) | 3 Month JIBAR(2)(Q) | (4,094 | ) | 36,151 | 40,245 | ||||||||||||||
ZAR | 4,300 | 03/02/30 | 7.625%(Q) | 3 Month JIBAR(2)(Q) | (16 | ) | 14,939 | 14,955 | ||||||||||||||
ZAR | 6,300 | 03/12/30 | 7.840%(Q) | 3 Month JIBAR(2)(Q) | (56 | ) | 27,369 | 27,425 | ||||||||||||||
ZAR | 4,200 | 03/12/30 | 7.900%(Q) | 3 Month JIBAR(2)(Q) | (39 | ) | 19,364 | 19,403 | ||||||||||||||
ZAR | 10,000 | 03/18/30 | 10.650%(Q) | 3 Month JIBAR(2)(Q) | — | 21,429 | 21,429 | |||||||||||||||
ZAR | 3,500 | 04/01/30 | 8.600%(Q) | 3 Month JIBAR(2)(Q) | (15 | ) | 28,782 | 28,797 |
See Notes to Financial Statements.
92
Interest rate swap agreements outstanding at September 30, 2020 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at September 30, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): |
| |||||||||||||||||||||||
ZAR 8,300 | 04/03/30 | 9.300%(Q) | 3 Month JIBAR(2)(Q) | $ | (169 | ) | $ | 94,600 | $ | 94,769 | ||||||||||||||
ZAR 17,400 | 07/07/30 | 7.040%(Q) | 3 Month JIBAR(2)(Q) | (487 | ) | 12,637 | 13,124 | |||||||||||||||||
|
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|
|
|
| |||||||||||||||||||
$ | (6,299 | ) | $ | 290,646 | $ | 296,945 | ||||||||||||||||||
|
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|
|
|
|
(1) | The Series pays the fixed rate and receives the floating rate. |
(2) | The Series pays the floating rate and receives the fixed rate. |
Total return swap agreements outstanding at September 30, 2020:
Reference Entity | Financing Rate | Counterparty | Termination Date | Long (Short) Notional Amount (000)#(1) | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation)(2) | ||||||||||||||||||||||||||||
OTC Total Return Swap Agreement: | |||||||||||||||||||||||||||||||||||
Barclays US Agency CMBS Index(T) | | 1 Month LIBOR(M) | | Barclays Bank PLC | 5/01/21 | 4,200 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
|
|
|
|
|
|
(1) | On a long total return swap, the Series receives payments for any positive return on the reference entity (makes payments for any negative return) and pays the financing rate. On a short total return swap, the Series makes payments for any positive return on the reference entity (receives payments for any negative return) and receives the financing rate. |
(2) | Upfront/recurring fees or commissions, as applicable, are included in the net unrealized appreciation (depreciation). |
Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:
Premiums Paid | Premiums Received | Unrealized Appreciation | Unrealized Depreciation | |||||
OTC Swap Agreements | $6,631 | $(21,653) | $7,842 | $(79,071) |
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 | ||||||||
Citigroup Global Markets, Inc. | $ | 452,000 | $ | 2,332,901 | ||||||
Goldman Sachs & Co. LLC | — | 199,959 | ||||||||
|
|
|
| |||||||
Total | $ | 452,000 | $ | 2,532,860 | ||||||
|
|
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 93
Schedule of Investments (continued)
as of September 30, 2020
Fair Value Measurements:
Various inputs are used in determining the value of the Series’ 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 September 30, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Common Stocks | $ | 458,752,723 | $ | 91,778,195 | $ | — | ||||||
Exchange-Traded Funds | 1,678,660 | — | — | |||||||||
Preferred Stocks | 696,876 | 186,121 | — | |||||||||
Asset-Backed Securities | ||||||||||||
Automobiles | — | 13,280,515 | — | |||||||||
Collateralized Loan Obligations | — | 14,112,655 | — | |||||||||
Consumer Loans | — | 4,404,532 | — | |||||||||
Credit Cards | — | 1,929,056 | — | |||||||||
Equipment | — | 963,601 | — | |||||||||
Home Equity Loans | — | 12,601 | — | |||||||||
Manufactured Housing | — | 146,857 | — | |||||||||
Other | — | 1,961,430 | — | |||||||||
Residential Mortgage-Backed Securities | — | 2,918,119 | — | |||||||||
Student Loans | — | 6,075,138 | — | |||||||||
Commercial Mortgage-Backed Securities | — | 92,987,686 | — | |||||||||
Corporate Bonds | — | 151,099,872 | — | |||||||||
Municipal Bonds | — | 3,932,185 | — | |||||||||
Residential Mortgage-Backed Securities | — | 13,420,331 | 2,350,430 | |||||||||
Sovereign Bonds | — | 14,352,464 | — | |||||||||
U.S. Government Agency Obligations | — | 9,323,820 | — | |||||||||
U.S. Treasury Obligations | — | 17,177,906 | — | |||||||||
Affiliated Mutual Funds | 39,545,535 | — | — | |||||||||
Options Purchased | — | 200,342 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 500,673,794 | $ | 440,263,426 | $ | 2,350,430 | ||||||
|
|
|
|
|
| |||||||
Other Financial Instruments* | ||||||||||||
Assets | ||||||||||||
Futures Contracts | $ | 36,475 | $ | — | $ | — | ||||||
OTC Forward Foreign Currency Exchange Contracts | — | 413,235 | — | |||||||||
OTC Cross Currency Exchange Contracts | — | 2,275 | — | |||||||||
OTC Credit Default Swap Agreements | — | 3,788 | 35 |
See Notes to Financial Statements.
94
Level 1 | Level 2 | Level 3 | ||||||||||
Other Financial Instruments* (continued) | ||||||||||||
Assets (continued) | ||||||||||||
Centrally Cleared Interest Rate Swap Agreements | $ | — | $ | 503,834 | $ | — | ||||||
OTC Total Return Swap Agreement | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 36,475 | $ | 923,132 | $ | 35 | ||||||
|
|
|
|
|
| |||||||
Liabilities | ||||||||||||
Futures Contracts. | $ | (517,604 | ) | $ | — | $ | — | |||||
OTC Forward Foreign Currency Exchange Contracts | — | (689,864 | ) | — | ||||||||
OTC Cross Currency Exchange Contracts | — | (7,777 | ) | — | ||||||||
OTC Credit Default Swap Agreements | — | (90,074 | ) | — | ||||||||
Centrally Cleared Interest Rate Swap Agreements | — | (206,889 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total | $ | (517,604 | ) | $ | (994,604 | ) | $ | — | ||||
|
|
|
|
|
|
* | 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 liabilities in excess of other assets shown as a percentage of net assets as of September 30, 2020 were as follows (unaudited):
Commercial Mortgage-Backed Securities | 10.2 | % | ||
Banks | 6.3 | |||
Software | 4.8 | |||
Affiliated Mutual Funds (3.6% represents investments purchased with collateral from securities on loan) | 4.3 | |||
Pharmaceuticals | 4.3 | |||
Technology Hardware, Storage & Peripherals | 3.5 | |||
Internet & Direct Marketing Retail | 3.3 | |||
Interactive Media & Services | 3.0 | |||
Semiconductors & Semiconductor Equipment | 2.9 | |||
IT Services | 2.5 | |||
Residential Mortgage-Backed Securities | 2.0 | |||
U.S. Treasury Obligations | 1.9 | |||
Automobiles | 1.9 | |||
Health Care Providers & Services | 1.8 | |||
Specialty Retail | 1.7 | |||
Biotechnology | 1.7 | |||
Insurance | 1.7 | |||
Capital Markets | 1.6 | |||
Health Care Equipment & Supplies | 1.6 |
Sovereign Bonds | 1.6 | % | ||
Collateralized Loan Obligations | 1.5 | |||
Electric | 1.4 | |||
Chemicals | 1.3 | |||
Oil & Gas | 1.3 | |||
Diversified Telecommunication Services | 1.3 | |||
Equity Real Estate Investment Trusts (REITs) | 1.2 | |||
Aerospace & Defense | 1.2 | |||
Household Products | 1.2 | |||
Entertainment | 1.1 | |||
Food & Staples Retailing | 1.1 | |||
Metals & Mining | 1.1 | |||
Food Products | 1.1 | |||
Media | 1.0 | |||
Oil, Gas & Consumable Fuels | 1.0 | |||
U.S. Government Agency Obligations | 1.0 | |||
Telecommunications | 0.9 | |||
Machinery | 0.8 | |||
Electric Utilities | 0.8 | |||
Pipelines | 0.8 | |||
Road & Rail | 0.7 |
See Notes to Financial Statements.
PGIM Balanced Fund 95
Schedule of Investments (continued)
as of September 30, 2020
Industry Classification (continued):
Hotels, Restaurants & Leisure | 0.7 | % | ||
Tobacco | 0.7 | |||
Student Loans | 0.7 | |||
Beverages | 0.7 | |||
Electrical Equipment | 0.6 | |||
Multi-Utilities | 0.6 | |||
Commercial Services | 0.6 | |||
Retail | 0.6 | |||
Healthcare-Services | 0.6 | |||
Communications Equipment | 0.6 | |||
Diversified Financial Services | 0.6 | |||
Building Products | 0.5 | |||
Household Durables | 0.5 | |||
Auto Manufacturers | 0.5 | |||
Consumer Loans | 0.5 | |||
Real Estate Investment Trusts (REITs) | 0.5 | |||
Life Sciences Tools & Services | 0.4 | |||
Municipal Bonds | 0.4 | |||
Industrial Conglomerates | 0.4 | |||
Foods | 0.4 | |||
Mortgage Real Estate Investment Trusts (REITs) | 0.4 | |||
Independent Power & Renewable Electricity Producers | 0.4 | |||
Semiconductors | 0.4 | |||
Gas Utilities | 0.3 | |||
Multiline Retail | 0.3 | |||
Air Freight & Logistics | 0.3 | |||
Electronic Equipment, Instruments & Components | 0.3 | |||
Auto Components | 0.3 | |||
Gas | 0.3 | |||
Construction & Engineering | 0.3 | |||
Wireless Telecommunication Services | 0.2 | |||
Construction Materials | 0.2 | |||
Other | 0.2 | |||
Credit Cards | 0.2 | |||
Trading Companies & Distributors | 0.2 | |||
Personal Products | 0.2 | |||
Building Materials | 0.2 | |||
Real Estate Management & Development | 0.2 | |||
Exchange-Traded Funds | 0.2 | |||
Commercial Services & Supplies | 0.2 | |||
Professional Services | 0.2 |
Leisure Products | 0.2 | % | ||
Airlines | 0.1 | |||
Electronics | 0.1 | |||
Machinery-Diversified | 0.1 | |||
Home Builders | 0.1 | |||
Healthcare-Products | 0.1 | |||
Equipment | 0.1 | |||
Transportation | 0.1 | |||
Agriculture | 0.1 | |||
Energy Equipment & Services | 0.1 | |||
Miscellaneous Manufacturing | 0.1 | |||
Mining | 0.1 | |||
Health Care Technology | 0.1 | |||
Lodging | 0.1 | |||
Thrifts & Mortgage Finance | 0.1 | |||
Auto Parts & Equipment | 0.1 | |||
Consumer Finance | 0.1 | |||
Engineering & Construction | 0.1 | |||
Textiles, Apparel & Luxury Goods | 0.1 | |||
Options Purchased | 0.1 | |||
Oil & Gas Services | 0.0 | * | ||
Advertising | 0.0 | * | ||
Diversified Consumer Services | 0.0 | * | ||
Forest Products & Paper | 0.0 | * | ||
Paper & Forest Products | 0.0 | * | ||
Water Utilities | 0.0 | * | ||
Marine | 0.0 | * | ||
Transportation Infrastructure | 0.0 | * | ||
Manufactured Housing | 0.0 | * | ||
Multi-National | 0.0 | * | ||
Containers & Packaging | 0.0 | * | ||
Packaging & Containers | 0.0 | * | ||
Home Equity Loans | 0.0 | * | ||
|
| |||
103.1 | ||||
Liabilities in excess of other assets | (3.1 | ) | ||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05% |
See Notes to Financial Statements.
96
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Series invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit contracts risk, equity contracts risk, foreign exchange contracts risk, and interest rate 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 Series’ 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 September 30, 2020 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 | Premiums paid for OTC swap agreements | $ | 6,631 | Premiums received for OTC swap agreements | $ | 21,653 | ||||||
Credit contracts | Unrealized appreciation on OTC swap agreements | 7,842 | Unrealized depreciation on OTC swap agreements | 79,071 | ||||||||
Equity contracts | Due from/to broker-variation margin futures | 11,954 | * | — | — | |||||||
Foreign exchange contracts | Unrealized appreciation on OTC cross currency exchange contracts | 2,275 | Unrealized depreciation on OTC cross currency exchange contracts | 7,777 | ||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | 413,235 | Unrealized depreciation on OTC forward foreign currency exchange contracts | 689,864 | ||||||||
Interest rate contracts | Due from/to broker-variation margin futures | 24,521 | * | Due from/to broker-variation margin futures | 517,604 | * | ||||||
Interest rate contracts | Due from/to broker-variation margin swaps | 503,834 | * | Due from/to broker-variation margin swaps | 206,889 | * | ||||||
Interest rate contracts | Unaffiliated investments | 200,342 | — | — | ||||||||
|
|
|
| |||||||||
$ | 1,170,634 | $ | 1,522,858 | |||||||||
|
|
|
|
* | 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.
PGIM Balanced Fund 97
Schedule of Investments (continued)
as of September 30, 2020
The effects of derivative instruments on the Statement of Operations for the year ended September 30, 2020 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Rights(1) | Options Purchased(1) | Options Written | Futures | Forward & Cross Currency Exchange Contracts | Swaps | ||||||||||||||||||||||||
Credit contracts | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 8,189 | ||||||||||||||||||
Equity contracts | (60,419 | ) | — | — | 207,042 | — | — | |||||||||||||||||||||||
Foreign exchange contracts | — | — | — | — | (793,936 | ) | — | |||||||||||||||||||||||
Interest rate contracts | — | (24,340 | ) | 10,881 | 3,087,782 | — | (4,749,155 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total | $ | (60,419 | ) | $ | (24,340 | ) | $ | 10,881 | $ | 3,294,824 | $ | (793,936 | ) | $ | (4,740,966 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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 | Rights(2) | Options Purchased(2) | Futures | Forward & Cross Currency Exchange Contracts | Swaps | ||||||||||||||||||||
Credit contracts | $ | — | $ | — | $ | — | $ | — | $ | (71,229 | ) | ||||||||||||||
Equity contracts | (101 | ) | — | 20,684 | — | — | |||||||||||||||||||
Foreign exchange contracts | — | — | — | (328,822 | ) | — | |||||||||||||||||||
Interest rate contracts | — | 113,807 | (87,441 | ) | — | 2,257,110 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Total | $ | (101 | ) | $ | 113,807 | $ | (66,757 | ) | $ | (328,822 | ) | $ | 2,185,881 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
See Notes to Financial Statements.
98
For the year ended September 30, 2020, the Series’ average volume of derivative activities is as follows:
Options Purchased(1) |
| Options Written(2) | Futures Contracts— Long Positions(2) | Futures Contracts— Short Positions(2) | Forward Foreign Currency Exchange Contracts—Purchased(3) | |||||
$3,462 | $28,400 | $74,150,068 | $138,041,697 | $15,135,296 |
Forward Foreign Currency Exchange Contracts—Sold(3) |
| Cross Currency Exchange Contracts(4) | Interest Rate Swap Agreements(2) | Credit Default Swap Agreements— Buy Protection(2) | ||||
$21,752,639 | $569,052 | $53,309,967 | $240,000 |
Credit Default Swap Agreements— Sell Protection(2) | Total Return Swap Agreements(2) | |
$1,281,581 | $4,200,000 |
(1) | Cost. |
(2) | Notional Amount in USD. |
(3) | Value at Settlement Date. |
(4) | Value at Trade Date. |
Average volume is based on average quarter end balances as noted for the fiscal year ended September 30, 2020.
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series 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 | $32,539,992 | $(32,539,992) | $— | |||||||||||
|
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 99
Schedule of Investments (continued)
as of September 30, 2020
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 | ||||||||||||||||||||
Bank of America, N.A. | $ | 167,799 | $ | (28,043 | ) | $ | 139,756 | $ | — | $ | 139,756 | ||||||||||||||
Barclays Bank PLC | 46,981 | (72,681 | ) | (25,700 | ) | — | (25,700 | ) | |||||||||||||||||
BNP Paribas S.A. | 54,852 | (149,138 | ) | (94,286 | ) | — | (94,286 | ) | |||||||||||||||||
Citibank, N.A. | 123,298 | (110,660 | ) | 12,638 | — | 12,638 | |||||||||||||||||||
Citigroup Global Markets, Inc. | 35 | — | 35 | — | 35 | ||||||||||||||||||||
HSBC Bank USA, N.A. | 61,505 | (66,523 | ) | (5,018 | ) | — | (5,018 | ) | |||||||||||||||||
JPMorgan Chase Bank, N.A. | 134,354 | (147,892 | ) | (13,538 | ) | — | (13,538 | ) | |||||||||||||||||
Morgan Stanley & Co. International PLC | 40,386 | (217,935 | ) | (177,549 | ) | 177,549 | — | ||||||||||||||||||
The Toronto-Dominion Bank | 1,115 | (5,493 | ) | (4,378 | ) | — | (4,378 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
$ | 630,325 | $ | (798,365 | ) | $ | (168,040 | ) | $ | 177,549 | $ | 9,509 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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 Series is limited to the market value of financial instruments/transactions and the Series’ OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
100
Statement of Assets and Liabilities
as of September 30, 2020
Assets | ||||
Investments at value, including securities on loan of $32,539,992: | ||||
Unaffiliated investments (cost $787,411,391) | $ | 903,742,115 | ||
Affiliated investments (cost $39,522,371) | 39,545,535 | |||
Foreign currency, at value (cost $805,591) | 807,486 | |||
Receivable for investments sold | 4,501,407 | |||
Dividends and interest receivable | 2,863,938 | |||
Receivable for Series shares sold | 849,496 | |||
Deposit with broker for centrally cleared/exchange-traded derivatives | 452,000 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 413,235 | |||
Tax reclaim receivable | 137,193 | |||
Due from broker—variation margin swaps | 44,771 | |||
Due from broker—variation margin futures | 10,065 | |||
Unrealized appreciation on OTC swap agreements | 7,842 | |||
Premiums paid for OTC swap agreements | 6,631 | |||
Unrealized appreciation on OTC cross currency exchange contracts | 2,275 | |||
Prepaid expenses and other assets | 18,759 | |||
|
| |||
Total Assets | 953,402,748 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 33,096,124 | |||
Payable for investments purchased | 2,159,158 | |||
Payable for Series shares reacquired | 940,913 | |||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 689,864 | |||
Management fee payable | 428,618 | |||
Accrued expenses and other liabilities | 284,637 | |||
Distribution fee payable | 232,679 | |||
Due to broker—variation margin futures | 197,119 | |||
Unrealized depreciation on OTC swap agreements | 79,071 | |||
Affiliated transfer agent fee payable | 70,487 | |||
Premiums received for OTC swap agreements | 21,653 | |||
Unrealized depreciation on OTC cross currency exchange contracts | 7,777 | |||
|
| |||
Total Liabilities | 38,208,100 | |||
|
| |||
Net Assets | $ | 915,194,648 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 57,195 | ||
Paid-in capital in excess of par | 804,663,076 | |||
Total distributable earnings (loss) | 110,474,377 | |||
|
| |||
Net assets, September 30, 2020 | $ | 915,194,648 | ||
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 101
Statement of Assets and Liabilities
as of September 30, 2020
Class A | |||||
Net asset value and redemption price per share, ($616,645,947 ÷ 38,631,413 shares of common stock issued and outstanding) | $ | 15.96 | |||
Maximum sales charge (3.25% of offering price) | 0.54 | ||||
|
| ||||
Maximum offering price to public | $ | 16.50 | |||
|
| ||||
Class C | |||||
Net asset value, offering price and redemption price per share, ($95,165,866 ÷ 5,923,998 shares of common stock issued and outstanding) | $ | 16.06 | |||
|
| ||||
Class R | |||||
Net asset value, offering price and redemption price per share, ($1,135,309 ÷ 71,099 shares of common stock issued and outstanding) | $ | 15.97 | |||
|
| ||||
Class Z | |||||
Net asset value, offering price and redemption price per share, ($147,634,715 ÷ 9,175,765 shares of common stock issued and outstanding) | $ | 16.09 | |||
|
| ||||
Class R6 | |||||
Net asset value, offering price and redemption price per share, ($54,612,811 ÷ 3,392,613 shares of common stock issued and outstanding) | $ | 16.10 | |||
|
|
See Notes to Financial Statements.
102
Statement of Operations
Year Ended September 30, 2020
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $309,884 foreign withholding tax) | $ | 11,910,067 | ||
Interest income | 10,651,888 | |||
Affiliated dividend income | 227,570 | |||
Income from securities lending, net (including affiliated income of $68,030) | 93,774 | |||
|
| |||
Total income | 22,883,299 | |||
|
| |||
Expenses | ||||
Management fee | 5,900,198 | |||
Distribution fee(a) | 2,908,951 | |||
Transfer agent’s fees and expenses (including affiliated expense of $519,938)(a) | 1,149,055 | |||
Custodian and accounting fees | 342,048 | |||
Shareholders’ reports | 110,231 | |||
Registration fees(a) | 92,550 | |||
Audit fee | 48,354 | |||
Directors’ fees | 24,221 | |||
Legal fees and expenses | 22,202 | |||
Miscellaneous | 67,712 | |||
|
| |||
Total expenses | 10,665,522 | |||
Less: Fee waiver and/or expense reimbursement(a) | (1,201,727 | ) | ||
Distribution fee waiver(a) | (3,597 | ) | ||
|
| |||
Net expenses | 9,460,198 | |||
|
| |||
Net investment income (loss) | 13,423,101 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $208,863) (net of foreign capital gains taxes $(7,280)) | 3,222,806 | |||
Futures transactions | 3,294,824 | |||
Forward and cross currency contract transactions | (793,936 | ) | ||
Options written transactions | 10,881 | |||
Swap agreement transactions | (4,740,966 | ) | ||
Foreign currency transactions | (11,721 | ) | ||
|
| |||
981,888 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(173,726)) | 31,582,725 | |||
Futures | (66,757 | ) | ||
Forward and cross currency contracts | (328,822 | ) | ||
Swap agreements | 2,185,881 | |||
Foreign currencies | 20,605 | |||
|
| |||
33,393,632 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 34,375,520 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 47,798,621 | ||
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 103
Statement of Operations
as of September 30, 2020
(a) | Class specific expenses and waivers were as follows: |
Class A | Class B | Class C | Class R | Class Z | Class R6 | |||||||||||||||||||
Distribution fee | 1,780,179 | 94,022 | 1,023,960 | 10,790 | — | — | ||||||||||||||||||
Transfer agent’s fees and expenses | 806,661 | 41,570 | 113,449 | 3,253 | 183,685 | 437 | ||||||||||||||||||
Registration fees | 30,553 | 11,109 | 13,959 | 13,252 | 13,554 | 10,123 | ||||||||||||||||||
Fee waiver and/or expense reimbursement | (942,473 | ) | (28,983 | ) | (69,789 | ) | (12,864 | ) | (106,901 | ) | (40,717 | ) | ||||||||||||
Distribution fee waiver | — | — | — | (3,597 | ) | — | — |
See Notes to Financial Statements.
104
Statements of Changes in Net Assets
Year Ended September 30, | ||||||||
2020 | 2019 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 13,423,101 | $ | 10,990,901 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 981,888 | 14,953,508 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 33,393,632 | (8,621,052 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 47,798,621 | 17,323,357 | ||||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (19,801,537 | ) | (24,291,098 | ) | ||||
Class B | (308,171 | ) | (500,200 | ) | ||||
Class C | (2,718,887 | ) | (5,245,293 | ) | ||||
Class R | (44,497 | ) | (127,565 | ) | ||||
Class Z | (5,698,818 | ) | (12,143,630 | ) | ||||
Class R6 | (1,547,024 | ) | (671,587 | ) | ||||
|
|
|
| |||||
(30,118,934 | ) | (42,979,373 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 130,823,489 | 148,906,917 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 29,261,978 | 41,144,300 | ||||||
Net asset value of shares issued in merger | — | 267,312,375 | ||||||
Cost of shares reacquired | (187,522,568 | ) | (154,808,052 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | (27,437,101 | ) | 302,555,540 | |||||
|
|
|
| |||||
Total increase (decrease) | (9,757,414 | ) | 276,899,524 | |||||
Net Assets: | ||||||||
Beginning of year | 924,952,062 | 648,052,538 | ||||||
|
|
|
| |||||
End of year | $ | 915,194,648 | $ | 924,952,062 | ||||
|
|
|
|
See Notes to Financial Statements.
PGIM Balanced Fund 105
Notes to Financial Statements
1. | Organization |
The Prudential Investment Portfolios, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Company consists of three series: PGIM Balanced Fund, PGIM Jennison Focused Value Fund (formerly known as PGIM Jennison Equity Opportunity Fund) and PGIM Jennison Growth Fund, each of which are diversified funds for purposes of the 1940 Act. These financial statements relate only to the PGIM Balanced Fund (the “Series”).
The investment objective of the Series is to seek income and long-term growth of capital.
2. | Accounting Policies |
The Series 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 accounting policies conform to U.S. generally accepted accounting principles. The Series consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Series holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the 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. The Company’s Board of Directors (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Series 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. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
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 Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
106
Various inputs determine how the Series’ 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 Measurements and Disclosures.
Common or preferred stocks, exchange-traded funds 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 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 Series 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 exchange-traded funds) 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 Series 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.
PGIM Balanced Fund 107
Notes to Financial Statements (continued)
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 Series 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 pricing methodologies 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.
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; any available analyst media or other reports or information deemed reliable by the Manager 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.
Illiquid Securities: Pursuant to Rule 22e-4 under the 1940 Act, the Series has adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Series limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without
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the sale or disposition significantly changing the market value of the investment. The Series may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser(s) and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities: Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Series’ investments in restricted securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series 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 current rates of exchange;
(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 Series are presented at the foreign exchange rates and market values at the close of the period, the Series 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 Series 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 realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Series 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 Series’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign
PGIM Balanced Fund 109
Notes to Financial Statements (continued)
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 Series 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 Series’ 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 Series 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 Series currently owns or intends to purchase. The Series may also use options to gain additional market exposure. The Series’ 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 Series purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Series 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 Series 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 Series 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.
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The Series, 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 Series bears the market risk of an unfavorable change in the price of the security or financial instrument underlying the written option. The Series, 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 Series since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the options contracts against default.
When the Series writes an option on a swap, an amount equal to any premium received by the Series 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 Series 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 Series 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 Series 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 Series 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 Series 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 is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.
The Series invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Series intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Series 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 Series since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Swap Agreements: The Series 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
PGIM Balanced Fund 111
Notes to Financial Statements (continued)
(“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 Series is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Series 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 Series’ 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.
The Series 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 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. The Series’ 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 Series 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 Series effectively increases its investment
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risk because, in addition to its total net assets, the Series may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Series, 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 Series entered into for the same referenced entity or index. As a buyer of protection, the Series 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 Series 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.
Total Return Swaps: In a total return swap, one party receives payments based on the market value of the security or the commodity involved, or total return of a specific referenced asset, such as an equity, index or bond, and in return pays a defined amount. The Series is subject to risk exposures associated with the referenced asset in the normal course of pursuing its investment objectives. The Series entered into total return swaps to manage its exposure to a security or an index. The Series’ maximum risk of loss from counterparty credit risk is the change in the value of the security, in the Series’ favor, from the point of entering into the contract.
Master Netting Arrangements: The Company, on behalf of the Series, 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 Series. A master netting arrangement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ 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
PGIM Balanced Fund 113
Notes to Financial Statements (continued)
of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.
The Company, on behalf of the Series, 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 Series is held in a segregated account by the Series’ 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 Series is segregated by the Series’ 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 Series and the applicable counterparty. Collateral requirements are determined based on the Series’ net position with each counterparty. Termination events applicable to the Series may occur upon a decline in the Series’ 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 Series’ counterparties to elect early termination could impact the Series’ 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.
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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.
Rights: The Series held rights acquired either through a direct purchase or pursuant to corporate actions. Rights entitle the holder to buy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such rights are held as long positions by the Series until exercised, sold or expired. Rights are valued at fair value in accordance with the Board approved fair valuation procedures.
Payment-In-Kind: The Series invested in the open market or receive pursuant to debt restructuring, securities that pay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to the existing principal balance of the debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.
Securities Lending: The Series 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 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 Series. Upon termination of the loan, the borrower will return to the Series securities identical to the loaned securities. Should the borrower of the securities fail financially, the Series has the right to repurchase the securities in the open market using the collateral.
The Series 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. The Series 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 equity REITs): The Series invested in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received
PGIM Balanced Fund 115
Notes to Financial Statements (continued)
from equity 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 equity REITs.
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 Series 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. 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. Class specific expenses 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 Series’ 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: The Series expects to pay dividends from net investment income quarterly. Distributions from net realized capital and currency gains, if any, are declared and paid annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, 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.
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.
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3. | Agreements |
The Company, on behalf of the Series, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. In addition, under the management agreement, the Manager provides all of the administrative functions necessary for the organization, operation and management of the Series. The Manager administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Series’ custodian and the Series’ transfer agent. The Manager is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
The Manager has entered into subadvisory agreements with PGIM, Inc., which provides subadvisory services to the Series through its business unit PGIM Fixed Income, PGIM Limited, and QMA LLC (“QMA”) (each a “subadviser” and collectively the “subadvisers”). The subadvisory agreements provide that the subadvisers will furnish investment advisory services in connection with the management of the Series. In connection therewith, the subadvisers are obligated to keep certain books and records of the Series. The Manager pays for the services of the subadvisers, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to the Manager is accrued daily and payable monthly at an annual rate of 0.65% of the Series’ average daily net assets up to and including $1 billion and 0.60% of such average daily net assets in excess of $1 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.65% for the year ended September 30, 2020.
The Manager has contractually agreed, through January 31, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 1.00% of average daily net assets for Class A shares, 1.47% of average daily net assets for Class R shares and 0.65% of average daily net assets for Class R6 shares. 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 expenses of the Series 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 may be recouped by the Manager within the same fiscal year
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Notes to Financial Statements (continued)
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 Company, on behalf of the Series, 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 and Class R6 shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A, Class C and Class R shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1% and 0.75% of the average daily net assets of the Class A, Class C and Class R shares, respectively. PIMS has contractually agreed through January 31, 2022 to limit such fees to 0.50% of the average daily net assets of Class R shares.
For the year ended September 30, 2020, PIMS received $745,899 in front-end sales charges resulting from sales of Class A shares. Additionally, for the year ended September 30, 2020, PIMS received $9,380 and $8,966 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders, respectively. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.
PGIM Investments, PGIM, Inc., PGIM Limited, PIMS and QMA 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 Series’ transfer 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 Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. The Series also invests in the PGIM Core Short-Term Bond Fund, pursuant to an exemptive order received
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from the Securities and Exchange Commission (“SEC”), a series of Prudential Investment Portfolios 2 (together with PGIM Core Ultra Short Bond Fund, the “Core Funds”), registered under the 1940 Act and managed by PGIM Investments. Through the Series’ investments in the mentioned underlying funds, PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services. In addition to the realized and unrealized gains on investments in the Core Funds and 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 Series 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, and/or common officers. Pursuant to the Rule 17a-7 procedures and consistent with guidance issued by the Securities and Exchange Commission, the Company’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such 17a-7 transactions were effected in accordance with the Series’ Rule 17a-7 procedures. For the year ended September 30, 2020, no 17a-7 transactions were entered into by the Series.
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 year ended September 30, 2020, were $897,016,742 and $949,544,768, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the year ended September 30, 2020, 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 | |||||||||||||||||||||||||||||||
PGIM Core Short-Term Bond Fund* | ||||||||||||||||||||||||||||||||||||||
$ | 1,444,833 | $ | 7,808 | $ | 1,451,071 | $(196,831 | ) | $ | 195,261 | $ | — | — | $ | 8,196 | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund* | ||||||||||||||||||||||||||||||||||||||
24,685,626 | 259,705,196 | 277,972,993 | — | — | 6,417,829 | 6,417,829 | 219,374 | |||||||||||||||||||||||||||||||
PGIM Institutional Money Market Fund* | ||||||||||||||||||||||||||||||||||||||
4,685,253 | 380,695,959 | 352,290,213 | 23,105 | 13,602 | 33,127,706 | 33,134,333 | 68,030 | ** | ||||||||||||||||||||||||||||||
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$ | 30,815,712 | $ | 640,408,963 | $ | 631,714,277 | $(173,726 | ) | $ | 208,863 | $ | 39,545,535 | $ | 295,600 | |||||||||||||||||||||||||
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* | The Fund did not have any capital gain distributions during the reporting period. |
** | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
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Notes to Financial Statements (continued)
6. | Distributions and Tax Information |
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date.
For the year ended September 30, 2020, the tax character of dividends paid by the Series were $14,203,983 of ordinary income and $15,914,951 of long-term capital gains. For the year ended September 30, 2019, the tax character of dividends paid by the Series were $17,870,365 of ordinary income and $25,109,008 of long-term capital gains.
As of September 30, 2020, there were no accumulated undistributed earnings on a tax basis.
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of September 30, 2020 were as follows:
Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | |||
$831,386,029 | $145,534,922 | $(34,185,867) | $111,349,055 |
The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales, investments in passive foreign investment companies, mark-to-market of futures and forwards contracts and other cost basis differences between financial reporting and tax accounting.
The Fund elected to treat post-October capital losses of approximately $531,000 and late year losses of approximately $344,000 as having been incurred in the following fiscal year (September 30, 2021).
The Manager has analyzed the Series’ 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 Series’ financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Series’ U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended September 30, 2020 are subject to such review.
7. | Capital and Ownership |
The Series offers Class A, Class C, Class R, 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
120
contingent deferred sales charge (“CDSC”) of 1.00% 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. Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. 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 10 years after purchase. Class R, 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 Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock, below.
The Company is authorized to issue 6.625 billion shares of capital stock at $0.001 par value per share, 923 million of which are designated as shares of the Series. The shares are further classified and designated as follows:
Class A | 125,000,000 | |||
Class B | 3,000,000 | |||
Class C | 25,000,000 | |||
Class R | 125,000,000 | |||
Class Z | 280,000,000 | |||
Class T | 75,000,000 | |||
Class R6 | 290,000,000 |
The Series currently does not have any Class B or Class T shares outstanding.
As of September 30, 2020, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Series as follows:
Number of Shares | Percentage of Outstanding Shares | |||||||||
Class A | 22,722 | 0.1 | % | |||||||
Class Z | 1,417,302 | 15.4 | % |
At the reporting period end, the number of shareholders holding greater than 5% of the Series are as follows:
Affiliated | Unaffiliated | |||||
Number of Shareholders | Percentage of Outstanding Shares | Number of Shareholders | Percentage of Outstanding Shares | |||
— | —% | 3 | 39.3% |
PGIM Balanced Fund 121
Notes to Financial Statements (continued)
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||||
Year ended September 30, 2020: | ||||||||||
Shares sold | 4,334,646 | $ | 67,271,019 | |||||||
Shares issued in reinvestment of dividends and distributions | 1,226,383 | 19,480,215 | ||||||||
Shares reacquired | (5,831,906 | ) | (89,710,377 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | (270,877 | ) | (2,959,143 | ) | ||||||
Shares issued upon conversion from other share class(es) | 1,224,771 | 18,746,349 | ||||||||
Shares reacquired upon conversion into other share class(es) | (140,812 | ) | (2,154,486 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 813,082 | $ | 13,632,720 | |||||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 3,564,995 | $ | 53,745,202 | |||||||
Shares issued in reinvestment of dividends and distributions | 1,637,437 | 23,878,981 | ||||||||
Shares reacquired | (3,763,490 | ) | (57,160,879 | ) | ||||||
Shares issued in merger | 13,647,113 | 211,257,317 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | 15,086,055 | 231,720,621 | ||||||||
Shares issued upon conversion from other share class(es) | 808,689 | 12,396,402 | ||||||||
Shares reacquired upon conversion into other share class(es) | (107,621 | ) | (1,627,345 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 15,787,123 | $ | 242,489,678 | |||||||
|
|
|
| |||||||
Class B | ||||||||||
Period ended June 26, 2020*: | ||||||||||
Shares sold | 17,722 | $ | 278,121 | |||||||
Shares issued in reinvestment of dividends and distributions | 18,482 | 296,189 | ||||||||
Shares reacquired | (122,330 | ) | (1,878,726 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | (86,126 | ) | (1,304,416 | ) | ||||||
Shares reacquired upon conversion into other share class(es) | (878,548 | ) | (13,417,695 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (964,674 | ) | $ | (14,722,111 | ) | |||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 25,694 | $ | 385,535 | |||||||
Shares issued in reinvestment of dividends and distributions | 32,860 | 479,296 | ||||||||
Shares reacquired | (134,662 | ) | (2,068,442 | ) | ||||||
Shares issued in merger | 619,146 | 9,646,297 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | 543,038 | 8,442,686 | ||||||||
Shares reacquired upon conversion into other share class(es) | (147,416 | ) | (2,236,636 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 395,622 | $ | 6,206,050 | |||||||
|
|
|
|
122
Class C | Shares | Amount | ||||||||
Year ended September 30, 2020: | ||||||||||
Shares sold | 855,885 | $ | 13,317,003 | |||||||
Shares issued in reinvestment of dividends and distributions | 162,109 | 2,598,199 | ||||||||
Shares reacquired | (1,476,919 | ) | (22,799,704 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | (458,925 | ) | (6,884,502 | ) | ||||||
Shares reacquired upon conversion into other share class(es) | (550,497 | ) | (8,591,251 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (1,009,422 | ) | $ | (15,475,753 | ) | |||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 1,206,042 | $ | 18,339,462 | |||||||
Shares issued in reinvestment of dividends and distributions | 344,108 | 5,026,537 | ||||||||
Shares reacquired | (1,478,466 | ) | (22,482,648 | ) | ||||||
Shares issued in merger | 2,227,999 | 34,712,221 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | 2,299,683 | 35,595,572 | ||||||||
Shares reacquired upon conversion into other share class(es) | (825,704 | ) | (12,744,695 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 1,473,979 | $ | 22,850,877 | |||||||
|
|
|
| |||||||
Class R | ||||||||||
Year ended September 30, 2020: | ||||||||||
Shares sold | 8,305 | $ | 128,286 | |||||||
Shares issued in reinvestment of dividends and distributions | 2,574 | 40,959 | ||||||||
Shares reacquired | (70,659 | ) | (1,085,125 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (59,780 | ) | $ | (915,880 | ) | |||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 29,742 | $ | 443,426 | |||||||
Shares issued in reinvestment of dividends and distributions | 6,724 | 97,724 | ||||||||
Shares reacquired | (67,760 | ) | (1,023,935 | ) | ||||||
Shares issued in merger | 26,302 | 407,417 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (4,992 | ) | $ | (75,368 | ) | |||||
|
|
|
| |||||||
Class Z | ||||||||||
Year ended September 30, 2020: | ||||||||||
Shares sold | 1,548,789 | $ | 24,126,132 | |||||||
Shares issued in reinvestment of dividends and distributions | 331,245 | 5,299,470 | ||||||||
Shares reacquired | (4,104,407 | ) | (63,152,386 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | (2,224,373 | ) | (33,726,784 | ) | ||||||
Shares issued upon conversion from other share class(es) | 361,400 | 5,578,690 | ||||||||
Shares reacquired upon conversion into other share class(es) | (23,897 | ) | (383,852 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (1,886,870 | ) | $ | (28,531,946 | ) | |||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 2,794,553 | $ | 42,785,407 | |||||||
Shares issued in reinvestment of dividends and distributions | 749,485 | 10,989,961 | ||||||||
Shares reacquired | (4,571,985 | ) | (69,197,141 | ) | ||||||
Shares issued in merger | 718,839 | 11,213,890 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | (309,108 | ) | (4,207,883 | ) | ||||||
Shares issued upon conversion from other share class(es) | 276,693 | 4,223,670 | ||||||||
Shares reacquired upon conversion into other share class(es) | (11,803 | ) | (181,991 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | (44,218 | ) | $ | (166,204 | ) | |||||
|
|
|
|
PGIM Balanced Fund 123
Notes to Financial Statements (continued)
Class R6 | Shares | Amount | ||||||||
Year ended September 30, 2020: | ||||||||||
Shares sold | 1,673,736 | $ | 25,702,928 | |||||||
Shares issued in reinvestment of dividends and distributions | 96,651 | 1,546,946 | ||||||||
Shares reacquired | (575,638 | ) | (8,896,250 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | 1,194,749 | 18,353,624 | ||||||||
Shares issued upon conversion from other share class(es) | 13,863 | 222,245 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 1,208,612 | $ | 18,575,869 | |||||||
|
|
|
| |||||||
Year ended September 30, 2019: | ||||||||||
Shares sold | 2,158,204 | $ | 33,207,885 | |||||||
Shares issued in reinvestment of dividends and distributions | 45,074 | 671,801 | ||||||||
Shares reacquired | (187,063 | ) | (2,875,007 | ) | ||||||
Shares issued in merger | 4,823 | 75,233 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding before conversion | 2,021,038 | 31,079,912 | ||||||||
Shares issued upon conversion from other share class(es) | 11,291 | 170,595 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in shares outstanding | 2,032,329 | $ | 31,250,507 | |||||||
|
|
|
|
* | Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. |
8. | Borrowings |
The Company, on behalf of the Series, 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 | 10/3/2019 – 10/1/2020 | 10/4/2018 – 10/2/2019 | ||
Total Commitment | $ 1,222,500,000* | $900,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.20% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent | 1.25% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent | ||
* Effective March 31, 2020, the SCA’s total commitment was increased from $900,000,000 to $1,162,500,000 and subsequently, effective April 7, 2020 was increased to $1,222,500,000. |
Subsequent to the reporting period end, the SCA has been renewed effective October 2, 2020 and will provide a commitment of $1,200,000,000 through September 30, 2021. The commitment fee paid by the Participating Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.30% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent.
124
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 Series did not utilize the SCA during the year ended September 30, 2020.
9. | Risks of Investing in the Series |
The Series’ risks include, but are not limited to, some or all of the risks discussed below. For further information on the Series’ risks, please refer to the Series’ Prospectus and Statement of Additional Information.
Asset Allocation Risk: Assets may be allocated to an asset class that underperforms other classes. For example, the Series may be overweight in equities when the stock market is falling and the fixed income market is rising. Likewise, the Series may be overweight in fixed income securities when fixed income markets are falling and the equity markets are rising.
Bond Obligations Risk: The Series’ holdings, share price, yield and total return may 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 Series for redemption before it matures and the Series may not be able to reinvest at the same level and therefore would earn less income.
Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Series. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Series will depend on the subadviser’s ability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increase investment losses to the Series. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Series’ derivatives positions. In fact, many OTC derivative instruments will not have liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet its obligations to the Series.
Equity and Equity-Related Securities Risks: The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Series invests could go down. The Series’ holdings
PGIM Balanced Fund 125
Notes to Financial Statements (continued)
can vary significantly from broad market indexes and the performance of the Series can deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: The Series’ investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Series may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Series’ investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.
Interest Rate Risk: The value of an 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 securities. When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Series 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 Series’ holdings may fall sharply. This is referred to as “extension risk”. The Series may face a heightened level of interest rate risk as a result of the U.S. Federal Reserve Board’s policies. The Series’ investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
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 Series’ shares. There is no requirement that these entities maintain their investment in the Series. There is a risk that such large shareholders or that the Series’ shareholders generally may redeem all or a substantial portion of their investments in the Series in a short period of time, which could have a significant negative impact on the Series’ NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Series’ ability to implement its investment strategy. The Series’ ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Series may invest a larger portion of its assets in cash or cash equivalents.
LIBOR Risk: Many financial instruments use or may use a floating rate based on the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On July 27, 2017, the Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential impact of a transition away from LIBOR on the Series or the financial instruments in which the Series invest cannot yet be determined. The
126
elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Series’ performance and/or net asset value. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
Liquidity Risk: The Series may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Series are difficult to purchase or sell. Liquidity risk includes the risk that the Series may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be more difficult to value. If the Series is forced to sell these investments to pay redemption proceeds or for other reasons, the Series may lose money. In addition, when there is no willing buyer and investments may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, the Series may incur higher transaction costs when executing trade orders of a given size. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Series’ value or prevent the Series from being able to take advantage of other investment opportunities.
Market and Credit Risk: Securities markets may be volatile and the market prices of the Series’ 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 Series fall, the value of an investment in the Series will decline. Additionally, the Series may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Series has unsettled or open transactions defaults.
Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally.
Mortgage-Backed and Other Asset-Backed Securities Risk: Mortgage-related securities are usually pass-through instruments that pay investors a share of all interest and principal
PGIM Balanced Fund 127
Notes to Financial Statements (continued)
payments from an underlying pool of fixed or adjustable rate mortgages. Asset-backed securities are another type of pass-through instruments that pays interest based upon the cash flow of an underlying pool of assets, such as automobile loans or credit card receivables. Asset-backed securities can also be collateralized by a portfolio of corporate bonds including junk bonds or other securities. The values of mortgage-backed and asset-backed securities vary with changes in interest rates and are particularly sensitive to prepayments (the risk is that the underlying debt instruments may be partially or wholly prepaid during periods of falling interest rates, which could require the Series to reinvest in lower yielding debt instruments) or extensions (the risk is that rising interest rates may cause the underlying debt instruments to be repaid more slowly by the debtor, causing the value of the securities to fall). Asset-backed securities are also subject to liquidity risk.
U.S. Government and Agency Securities Risk: U.S. Government and agency securities are subject to market risk, interest rate risk and credit risk. Not all U.S. Government securities are insured or guaranteed by the full faith and credit of the U.S. Government; some are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. In addition, the value of U.S. Government securities may be affected by changes in the credit rating of the U.S. Government.
10. | Reorganization |
On December 6, 2018, the Board approved an Agreement and Plan of Reorganization (the “Plan”) which provided for the transfer of all the assets of PGIM Conservative Allocation Fund and PGIM Moderate Allocation Fund (the “Merged Funds”) for shares of PGIM Balanced Fund (the “Acquiring Fund”) and the assumption of the liabilities of the Merged Funds respectively. Shareholders approved the Plan at a meeting on May 7, 2019 and the reorganization took place on June 21, 2019.
On the reorganization date, the Merged Funds had the following total investment cost and value, representing the principal assets acquired by the Acquiring Fund:
Merged Fund | Total Investment Value | Total Investment Cost | ||||||||
PGIM Conservative Allocation Fund | $ | 110,241,907 | $ | 108,443,357 | ||||||
PGIM Moderate Allocation Fund | 134,209,519 | 131,966,240 |
The purpose of the transaction was to combine three funds with substantially similar investment objectives and policies.
128
The acquisition was accomplished by a tax-free exchange of the following shares on June 21, 2019:
Merged Funds | Acquiring Fund | |||||||||||||||||||
PGIM Conservative Allocation Fund | PGIM Moderate Allocation Fund | PGIM Balanced Fund | ||||||||||||||||||
Class | Shares | Class | Shares | Class | Shares | Value | ||||||||||||||
A | 8,333,171 | A | 11,190,291 | A | 13,647,113 | $211,257,317 | ||||||||||||||
B | 306,871 | B | 589,235 | B | 619,146 | 9,646,297 | ||||||||||||||
C | 1,713,024 | C | 1,518,623 | C | 2,227,999 | 34,712,221 | ||||||||||||||
R | 18,458 | R | 19,263 | R | 26,302 | 407,417 | ||||||||||||||
Z | 770,838 | Z | 266,005 | Z | 718,839 | 11,213,890 | ||||||||||||||
R6 | 5,997 | R6 | 970 | R6 | 4,823 | 75,233 |
For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Merged Funds were carried forward to reflect the tax-free status of the acquisition.
The net assets and net unrealized appreciation immediately before the acquisition were as follows:
Merged Funds | Acquiring Fund | |||||||||||||||||||||||
PGIM Conservative Allocation Fund | PGIM Moderate Allocation Fund | PGIM Balanced Fund | ||||||||||||||||||||||
Class | Net Assets | Unrealized Appreciation on Investments | Class | Net Assets | Unrealized Appreciation on Investments | Class | Net Assets | |||||||||||||||||
A | $89,456,593 | $1,343,218 | A | $121,800,724 | $1,850,027 | A | $375,368,904 | |||||||||||||||||
B | 3,279,316 | 49,237 | B | 6,366,981 | 96,684 | B | 6,896,442 | |||||||||||||||||
C | 18,312,914 | 277,216 | C | 16,399,307 | 249,254 | C | 78,883,539 | |||||||||||||||||
R | 199,217 | 2,991 | R | 208,200 | 3,162 | R | 1,705,767 | |||||||||||||||||
Z | 8,319,813 | 124,917 | Z | 2,894,077 | 43,992 | Z | 168,501,849 | |||||||||||||||||
R6 | 64,683 | 971 | R6 | 10,550 | 160 | R6 | 24,534,008 |
Assuming the acquisition had been completed on October 1, 2018, the Acquiring Fund’s unaudited pro forma results of operations for the year ended September 30, 2019 would have been as follows:
Acquiring Fund | Net investment income (a) | Net realized and unrealized gain on investments (b) | Net increase in net assets resulting from operations | ||||||||||||
PGIM Balanced Fund | $ | 15,422,204 | $ | 7,042,789 | $ | 22,464,993 |
(a) | Net investment income as reported in the Statement of Operations (year ended September 30, 2019) of the Acquiring Fund, plus net investment income from the Merged Funds pre-merger as follows: PGIM Conservative Allocation Fund $2,220,902 and PGIM Moderate Allocation Fund $2,210,401. |
(b) | Net realized and unrealized gain on investments as reported in the Statement of Operations (year ended September 30, 2019) of the Acquiring Fund, plus net realized and unrealized gain (loss) on investments from the Merged Funds pre-merger as follows: PGIM Conservative Allocation Fund $1,628,275 and PGIM Moderate Allocation Fund $(917,942). |
PGIM Balanced Fund 129
Notes to Financial Statements (continued)
Since both the Merged Funds and the Acquiring Fund sold and redeemed shares throughout the period, it is not practicable to provide pro-forma information on a per-share basis.
Since the combined investment Funds had been managed as a single integrated portfolio since the acquisition was completed, it is also not practicable to separate the amounts of revenue and earnings of the Merged Funds that have been included in the Acquiring Fund’s Statement of Operations since June 21, 2019.
11. | Recent Accounting Pronouncements and Reporting Updates |
In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of certain provisions of the ASU and any impact on the financial statement disclosures has not yet been determined.
130
Financial Highlights
Class A Shares
| ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $15.61 | $16.38 | $15.93 | $14.99 | $14.67 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.24 | 0.24 | 0.19 | 0.17 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.63 | 0.04 | 1.15 | 1.43 | 1.25 | |||||||||||||||
Total from investment operations | 0.87 | 0.28 | 1.34 | 1.60 | 1.43 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.25 | ) | (0.20 | ) | (0.18 | ) | (0.19 | ) | ||||||||||
Distributions from net realized gains | (0.28 | ) | (0.80 | ) | (0.69 | ) | (0.48 | ) | (0.92 | ) | ||||||||||
Total dividends and distributions | (0.52 | ) | (1.05 | ) | (0.89 | ) | (0.66 | ) | (1.11 | ) | ||||||||||
Net asset value, end of year | $15.96 | $15.61 | $16.38 | $15.93 | $14.99 | |||||||||||||||
Total Return(b): | 5.64 | % | 2.28 | % | 8.66 | % | 10.99 | % | 10.15 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data:
| ||||||||||||||||||||
Net assets, end of year (000) | $616,646 | $590,383 | $360,798 | $343,550 | $324,422 | |||||||||||||||
Average net assets (000) | $593,393 | $416,723 | $352,124 | $332,088 | $308,458 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.00 | % | 1.00 | % | 1.12 | % | 1.18 | % | 1.23 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.16 | % | 1.16 | % | 1.17 | % | 1.20 | % | 1.25 | % | ||||||||||
Net investment income (loss) | 1.52 | % | 1.58 | % | 1.22 | % | 1.11 | % | 1.23 | % | ||||||||||
Portfolio turnover rate(e)(f) | 108 | % | 128 | % | 145 | % | 180 | % | 230 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Balanced Fund 131
Financial Highlights (continued)
Class C Shares
| ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $15.71 | $16.48 | $16.02 | $15.08 | $14.74 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.12 | 0.13 | 0.08 | 0.06 | 0.08 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.64 | 0.04 | 1.16 | 1.43 | 1.26 | |||||||||||||||
Total from investment operations | 0.76 | 0.17 | 1.24 | 1.49 | 1.34 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.14 | ) | (0.09 | ) | (0.07 | ) | (0.08 | ) | ||||||||||
Distributions from net realized gains | (0.28 | ) | (0.80 | ) | (0.69 | ) | (0.48 | ) | (0.92 | ) | ||||||||||
Total dividends and distributions | (0.41 | ) | (0.94 | ) | (0.78 | ) | (0.55 | ) | (1.00 | ) | ||||||||||
Net asset value, end of year | $16.06 | $15.71 | $16.48 | $16.02 | $15.08 | |||||||||||||||
Total Return(b): | 4.77 | % | 1.62 | % | 7.92 | % | 10.16 | % | 9.49 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data:
| ||||||||||||||||||||
Net assets, end of year (000) | $95,166 | $108,958 | $89,949 | $74,527 | $57,448 | |||||||||||||||
Average net assets (000) | $102,396 | $92,047 | $82,930 | $66,532 | $43,525 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.77 | % | 1.73 | % | 1.81 | % | 1.88 | % | 1.93 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.84 | % | 1.84 | % | 1.87 | % | 1.90 | % | 1.95 | % | ||||||||||
Net investment income (loss) | 0.75 | % | 0.87 | % | 0.52 | % | 0.41 | % | 0.53 | % | ||||||||||
Portfolio turnover rate(e)(f) | 108 | % | 128 | % | 145 | % | 180 | % | 230 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
132
Class R Shares
| ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $15.64 | $16.38 | $15.94 | $15.00 | $14.68 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.16 | 0.17 | 0.11 | 0.14 | 0.15 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.64 | 0.05 | 1.14 | 1.43 | 1.25 | |||||||||||||||
Total from investment operations | 0.80 | 0.22 | 1.25 | 1.57 | 1.40 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.19 | ) | (0.16 | ) | (0.12 | ) | (0.15 | ) | (0.16 | ) | ||||||||||
Distributions from net realized gains | (0.28 | ) | (0.80 | ) | (0.69 | ) | (0.48 | ) | (0.92 | ) | ||||||||||
Total dividends and distributions | (0.47 | ) | (0.96 | ) | (0.81 | ) | (0.63 | ) | (1.08 | ) | ||||||||||
Net asset value, end of year | $15.97 | $15.64 | $16.38 | $15.94 | $15.00 | |||||||||||||||
Total Return(b): | 5.16 | % | 1.85 | % | 8.07 | % | 10.77 | % | 9.93 | % | ||||||||||
Ratios/Supplemental Data:
| ||||||||||||||||||||
Net assets, end of year (000) | $1,135 | $2,047 | $2,226 | $1,457 | $723 | |||||||||||||||
Average net assets (000) | $1,439 | $1,959 | $1,837 | $947 | $739 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.47 | % | 1.45 | % | 1.63 | % | 1.38 | % | 1.43 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 2.61 | % | 2.16 | % | 2.88 | % | 1.65 | % | 1.70 | % | ||||||||||
Net investment income (loss) | 1.04 | % | 1.14 | % | 0.71 | % | 0.92 | % | 1.04 | % | ||||||||||
Portfolio turnover rate(e)(f) | 108 | % | 128 | % | 145 | % | 180 | % | 230 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Balanced Fund 133
Financial Highlights (continued)
Class Z Shares
| ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $15.73 | $16.49 | $16.04 | $15.09 | $14.75 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.27 | 0.29 | 0.24 | 0.22 | 0.22 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.65 | 0.04 | 1.15 | 1.43 | 1.27 | |||||||||||||||
Total from investment operations | 0.92 | 0.33 | 1.39 | 1.65 | 1.49 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.29 | ) | (0.25 | ) | (0.22 | ) | (0.23 | ) | ||||||||||
Distributions from net realized gains | (0.28 | ) | (0.80 | ) | (0.69 | ) | (0.48 | ) | (0.92 | ) | ||||||||||
Total dividends and distributions | (0.56 | ) | (1.09 | ) | (0.94 | ) | (0.70 | ) | (1.15 | ) | ||||||||||
Net asset value, end of year | $16.09 | $15.73 | $16.49 | $16.04 | $15.09 | |||||||||||||||
Total Return(b): | 5.90 | % | 2.59 | % | 8.91 | % | 11.32 | % | 10.57 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data:
| ||||||||||||||||||||
Net assets, end of year (000) | $147,635 | $174,033 | $183,204 | $139,497 | $92,562 | |||||||||||||||
Average net assets (000) | $156,846 | $172,091 | $156,026 | $118,555 | $79,518 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.78 | % | 0.75 | % | 0.82 | % | 0.88 | % | 0.93 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.85 | % | 0.86 | % | 0.88 | % | 0.90 | % | 0.95 | % | ||||||||||
Net investment income (loss) | 1.74 | % | 1.86 | % | 1.52 | % | 1.41 | % | 1.53 | % | ||||||||||
Portfolio turnover rate(e)(f) | 108 | % | 128 | % | 145 | % | 180 | % | 230 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
134
Class R6 Shares
| ||||||||||||||||||||||
Year Ended September 30, | November 28, 2017(a) through September 30, | |||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.74 | $16.50 | $16.48 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.29 | 0.30 | 0.23 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.65 | 0.05 | 0.73 | |||||||||||||||||||
Total from investment operations | 0.94 | 0.35 | 0.96 | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.31 | ) | (0.25 | ) | ||||||||||||||||
Distributions from net realized gains | (0.28 | ) | (0.80 | ) | (0.69 | ) | ||||||||||||||||
Total dividends and distributions | (0.58 | ) | (1.11 | ) | (0.94 | ) | ||||||||||||||||
Net asset value, end of period | $16.10 | $15.74 | $16.50 | |||||||||||||||||||
Total Return(c): | 6.01 | % | 2.69 | % | 6.10 | % | ||||||||||||||||
| ||||||||||||||||||||||
Ratios/Supplemental Data:
| �� | |||||||||||||||||||||
Net assets, end of period (000) | $54,613 | $34,369 | $2,502 | |||||||||||||||||||
Average net assets (000) | $44,247 | $16,501 | $295 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.65 | % | 0.65 | % | 0.67 | %(e) | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.74 | % | 0.83 | % | 11.39 | %(e) | ||||||||||||||||
Net investment income (loss) | 1.88 | % | 1.96 | % | 1.73 | %(e) | ||||||||||||||||
Portfolio turnover rate(f)(g) | 108 | % | 128 | % | 145 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | 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 generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | The Series accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate. |
(g) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Balanced Fund 135
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Prudential Investment Portfolios, Inc. and Shareholders of PGIM Balanced Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Balanced Fund (one of the funds constituting The Prudential Investment Portfolios, Inc., referred to hereafter as the “Fund”) as of September 30, 2020, and the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year ended September 30, 2020 (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 September 30, 2020, and the results of its operations, changes in its net assets, and the financial highlights for the year ended September 30, 2020 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 September 30, 2019 and the financial highlights for each of the periods ended on or prior to September 30, 2019 (not presented herein, other than the statement of changes in net assets and the financial highlights) were audited by other auditors whose report dated November 15, 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 audit. 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 audit 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 audit 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 audit 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 September 30, 2020 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 audit provides a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
November 17, 2020
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
136 |
Series Liquidity Risk Management Program (unaudited)
Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Series has adopted and implemented a liquidity risk management program (the “LRMP”). The Series’ LRMP seeks to assess and manage the Series’ liquidity risk, which is defined as the risk that the Series is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Series. The Company’s Board of Directors (the “Board”) has approved PGIM Investments LLC (“PGIM Investments”), the Series’ investment manager, to serve as the administrator of the Series’ LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.
The Series’ LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Series’ LRMP includes no less than annual assessments of factors that influence the Series’ liquidity risk; no less than monthly classifications of the Series’ investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Series’ assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Series does not invest primarily in highly liquid investments; and regular reporting to the Board.
At a meeting of the Board on March 3-5, 2020, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Series’ LRMP, including any material changes to the LRMP for the period from the inception of the Series’ LRMP on December 1, 2018 through December 31, 2019 (“Reporting Period”). The LRMP Report concluded that the Series’ LRMP was reasonably designed to assess and manage the Series’ liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Series’ investment strategies continue to be appropriate given the Series’ status as an open-end fund.
There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Series, including liquidity risks presented by the Series’ investment portfolio, is found in the Series’ Prospectus and Statement of Additional Information.
PGIM Balanced Fund | 137 |
Tax Information (unaudited)
We are advising you that during the fiscal year ended September 30, 2020, the Series reported the maximum amount allowed per share, but not less than $0.28 for Class A, B, C, R, Z, and R6 shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.
For the year ended September 30, 2020, the Series reports in the maximum amount allowable under Section 854 of the Internal Revenue Code, but not less than, the following percentages of the ordinary income distributions paid as 1) qualified dividend income (QDI), and 2) eligible for corporate dividends received deduction (“DRD”) and 3) interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code (“IR”):
QDI | DRD | IR | ||||||||||
PGIM Balanced Fund | 83.06 | % | 62.70 | % | 43.05 | % |
In January 2021, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the federal tax status of distributions received by you in calendar year 2020.
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 10.42% of the ordinary income dividends paid 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.
138 |
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: 95 | President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 95 | Retired; 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; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). | Since July 2008 |
PGIM Balanced 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: 95 | 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). | Director of Anixter International, Inc. (communication products distributor) (since January 2006–June 2020); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 94 | 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 U.S. | 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: 95 | Executive Committee of the IDC Board of Governors (since October 2019); Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); 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); 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: 94 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); 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, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (June 2018-October 2020) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Michael S. Hyland, CFA 1945 Board Member Portfolios Overseen: 95 | Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). | None. | Since July 2008 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 94 | 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); Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Balanced 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: 94 | 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. | Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. | Since November 2014 |
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: 96 | President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). | None. | Since January 2012 |
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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 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 96 | Executive Vice President (since June 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); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
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 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 Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Dino Capasso 1974 Chief Compliance Officer | Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. | Since March 2018 |
PGIM Balanced Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018 - present) of PGIM Investments LLC; 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 | ||
Diana N. Huffman 1982 Assistant Secretary | Vice President and Corporate Counsel (since September 2015) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). | Since March 2019 | ||
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; 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; and Corporate Counsel (2012 – 2017) of IIL, Inc. | Since June 2020 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). | Since March 2015 | ||
Christian J. Kelly 1975 Treasurer and Principal Financial and Accounting Officer | Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); 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 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. | Since April 2014 | ||
Russ Shupak 1973 Assistant Treasurer | Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) and Director (2011-2017), 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 | ||
Charles H. Smith 1973 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007-December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998-January 2007). | Since January 2017 |
(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. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., 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. |
PGIM Balanced Fund
Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Balanced Fund (the “Fund”)1 consists of eleven individuals, nine 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 four standing committees: the Audit Committee, the Nominating and Governance 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 agreements with QMA LLC (“QMA”), PGIM Limited (“PGIML”) and PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit (“PGIM Fixed Income”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on May 27, 2020 and on June 9-11, 2020 and approved the renewal of the agreements through July 31, 2021, 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, QMA, PGIML and 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 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
1 | PGIM Balanced Fund is a series of The Prudential Investment Portfolios, Inc. |
PGIM Balanced Fund |
Approval of Advisory Agreements (continued)
meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on May 27, 2020 and on June 9-11, 2020.
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 each of QMA, PGIML and PGIM, which serve as the Fund’s subadvisers pursuant to the terms of subadvisory agreements 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, QMA, PGIML and PGIM Fixed Income. The Board noted that QMA, PGIML and PGIM Fixed Income 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 QMA, PGIML and PGIM Fixed Income, 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 agreements.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund, QMA, PGIML and PGIM Fixed Income, and also considered the qualifications, backgrounds and
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responsibilities of the QMA, PGIML and PGIM Fixed Income 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’, QMA’s, PGIML’s and PGIM Fixed Income’s organizational structures, senior management, investment operations, and other relevant information pertaining to PGIM Investments, QMA, PGIML and PGIM Fixed Income. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to each of PGIM Investments, QMA, PGIML and PGIM Fixed Income.
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 each of QMA, PGIML and PGIM Fixed Income, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, QMA, PGIML and PGIM Fixed Income 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. 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
PGIM Balanced Fund |
Approval of Advisory Agreements (continued)
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, QMA, PGIML and PGIM Fixed Income
The Board considered potential ancillary benefits that might be received by PGIM Investments, QMA, PGIML PGIM Fixed Income 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 QMA, PGIML and PGIM Fixed Income included their 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, QMA, PGIML and PGIM Fixed Income 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, 2019.
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 September 30, 2019. 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.
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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 | ||||
1st Quartile | 1st Quartile | 1st Quartile | 1st Quartile | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 2nd Quartile |
• | The Board noted that the Fund outperformed its benchmark index over the ten-year period, though it underperformed over the one-, three- and five-year periods. |
• | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap, which (exclusive of certain fees and expenses) caps total annual operating expenses at 1.00% for Class A shares, 0.65% for Class R6 shares, and 1.47% for Class R shares through January 31, 2021. |
• | 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 Balanced Fund |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | 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 • Michael S. Hyland • Stuart S. Parker • Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer • Claudia DiGiacomo, Chief Legal Officer • Dino Capasso, Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Andrew R. French, Secretary • Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary • Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary • Lana Lomuti, Assistant Treasurer • Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer • Deborah Conway, Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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SUBADVISERS | PGIM Fixed Income PGIM Limited | 655 Broad Street Newark, NJ 07102 | ||
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QMA LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | |||
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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 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue | ||
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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 |
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 Balanced 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 BALANCED FUND
SHARE CLASS | A | C | R | Z | R6 | |||||
NASDAQ | PIBAX | PABCX | PALRX | PABFX | PIBQX | |||||
CUSIP | 74437E883 | 74437E867 | 74437E636 | 74437E859 | 74437E461 |
MF185E
PGIM JENNISON FOCUSED VALUE FUND
ANNUAL REPORT
SEPTEMBER 30, 2020
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (pgim.com/investments), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-225-1852 or by sending an email request to PGIM Investments at shareholderreports@pgim.com.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1-800-225-1852 or send an email request to shareholderreports@pgim.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Fund.
To enroll in e-delivery, go to pgim.com/investments/resource/edelivery
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15 | ||||
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. © 2020 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.
Effective June 26, 2020, all of the issued and outstanding Class B shares of the Fund converted into Class A shares.
2 | Visit our website at pgim.com/investments |
Dear Shareholder:
We hope you find the annual report for the PGIM Jennison Focused Value Fund informative and useful. The report covers performance for the 12-month period that ended September 30, 2020.
During the first half of the period, the global economy remained healthy—particularly in the US—fueled by rising corporate profits and strong job growth. The outlook changed dramatically in March as the coronavirus outbreak quickly and substantially shut down economic activity worldwide, leading to significant job losses and a steep decline in global growth and earnings. Responding to this disruption, the Federal Reserve (the Fed) cut the federal funds rate target to near zero and flooded capital markets with liquidity; and Congress passed stimulus bills worth approximately $3 trillion that offered an economic lifeline to consumers and businesses.
While stocks climbed throughout the first half of the period, they fell significantly in March amid a spike in volatility, ending the 11-year-long equity bull market. With stores and factories closing and consumers staying at home to limit the spread of the virus, investors sold stocks on fears that corporate earnings would take a serious hit. As states reopened their economies in the spring and summer, a strong equity market rally helped stocks around the globe post gains during the period.
The bond market overall—including US and global bonds as well as emerging market debt—rose during the period as investors sought safety in fixed income. A significant rally in interest rates pushed the 10-year US Treasury yield down to a record low. In March, the Fed took several aggressive actions to keep the bond markets running smoothly, restarting many of the relief programs that proved to be successful in helping end the global financial crisis in 2008-09.
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 consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Focused Value Fund
November 16, 2020
PGIM Jennison Focused Value 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 9/30/20 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||
Class A | ||||||||
(with sales charges) | –7.86 | 4.40 | 7.82 | — | ||||
(without sales charges) | –2.50 | 5.59 | 8.43 | — | ||||
Class C | ||||||||
(with sales charges) | –4.28 | 4.80 | 7.65 | — | ||||
(without sales charges) | –3.41 | 4.80 | 7.65 | — | ||||
Class R | ||||||||
(without sales charges) | –2.82 | 5.24 | 8.14 | — | ||||
Class Z | ||||||||
(without sales charges) | –2.16 | 5.91 | 8.77 | — | ||||
Class R6 | ||||||||
(without sales charges) | –2.17 | 5.92 | N/A | 3.64 (11/25/14) | ||||
Russell 1000 Value Index | ||||||||
–5.03 | 7.66 | 9.95 | — |
Average Annual Total Returns as of 9/30/20 Since Inception (%) | ||
Class R6 (11/25/14) | ||
Russell 1000 Value Index | 4.94 |
Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Index is measured from the closest month-end to the inception date of Class R6 shares.
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 similar investments in the Russell 1000 Value Index by portraying the initial account values at the beginning of the 10-year period (September 30, 2010) and the account values at the end of the current fiscal year (September 30, 2020) 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 reimbursement, if any, the Fund’s 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 Focused Value 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 R6 | ||||||
Maximum initial sales charge | 5.50% of the public offering price | 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 | |||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% | 1.00% | 0.75% (0.50% currently) | None | None |
Benchmark Definitions
Russell 1000 Value Index—The Russell 1000 Value Index is an unmanaged index comprising those securities in the Russell 1000 Index with a less-than-average growth orientation. Companies in this index generally have low price-to-book and price-to-earnings ratios, higher dividend yields, and lower forecasted growth values.
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 9/30/20
Ten Largest Holdings | Line of Business | % of Net Assets | ||
Union Pacific Corp. | Road & Rail | 5.3% | ||
Dominion Energy, Inc. | Multi-Utilities | 4.9% | ||
Lowe’s Cos., Inc. | Specialty Retail | 4.3% | ||
SAP SE (Germany), ADR | Software | 4.1% | ||
Alphabet, Inc. (Class A Stock) | Interactive Media & Services | 4.0% | ||
Linde PLC (United Kingdom) | Chemicals | 4.0% | ||
Walmart, Inc. | Food & Staples Retailing | 4.0% | ||
AstraZeneca PLC (United Kingdom), ADR | Pharmaceuticals | 3.9% | ||
Microsoft Corp. | Software | 3.9% | ||
Texas Instruments, Inc. | Semiconductors & Semiconductor Equipment | 3.7% |
Holdings reflect only long-term Investments and are subject to change.
PGIM Jennison Focused Value Fund | 7 |
Strategy and Performance Overview
How did the Fund perform?
The PGIM Jennison Focused Value Fund’s Class Z shares returned -2.16% in the 12-month reporting period that ended September 30, 2020, outperforming the -5.03% return of the Russell 1000 Value Index (the Index).
What were the market conditions?
• | Equity markets were extremely volatile during the reporting period, unsettled by US-China trade discord and the global spread of COVID-19, the disease caused by the novel coronavirus that originated in China in 2019. Stocks rose to historic highs on February 19, 2020, then dropped more than 30% in only 25 trading days as the COVID-19 outbreak spread around the globe, disrupting markets and everyday life. |
• | The US political landscape was likewise unsettled, as investigations of interference in the 2016 presidential election unfolded, impeachment hearings against President Trump proceeded, the 2020 election cycle ramped up, and leaders politicized the pandemic. |
• | Policymakers responded to the COVID-19 pandemic and subsequent market events with historic monetary and fiscal actions. Still, US gross domestic product plummeted 32.9% in the second quarter of 2020, the largest decline in post-World War II history. |
• | Equity markets rebounded strongly in the final quarter of the period, led by the information technology and consumer discretionary sectors, but the pandemic’s economic damage continued to accumulate. Growth stocks outperformed value stocks by a wide margin over the full period, although value outperformed growth amid a turbulent market in September 2020. |
• | The Chicago Board Options Exchange Volatility Index jumped 62% over the period as investors grappled with uncertainty related to the pandemic. The price of West Texas Intermediate (WTI) crude oil declined over 25% during the period, while all precious metals advanced, with gold gaining more than 28% as investors fled to the safe-haven metal. |
• | Within the Index, the health care, materials, and information technology sectors gained the most over the period. Energy was the worst-performing sector. Defensive-oriented sectors such as real estate and utilities also declined, along with financials. |
What worked?
Individual Fund holdings with strong performance during the reporting period included:
• | Home improvement retailer Lowe’s Companies Inc. benefited from increased demand during the period due to stay-at-home restrictions. Increased time at home caused many consumers to fix up their homes and outdoor spaces. The company posted impressive quarterly results in April 2020 that continued into May, helped by strong online sales. With a new management team comprised of ex-Home Depot executives seeking to copy past successes, Jennison believes Lowe’s should be able to narrow the performance gap |
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between the company and Home Depot which, from Jennison’s perspective, could potentially improve long-term earnings growth and outperformance. |
• | Microsoft Corp.’s strong and stable enterprise business, along with its differentiated hybrid cloud strategy, have helped the company garner market share from an increase in technology capital spending over the last few years. Additionally, the COVID-19 pandemic has highlighted the prudence—and in many cases the government-mandated necessity—of working from home or at off-site locations and, by extension, the advantage of housing mission-critical software applications and services in the cloud. The company’s Teams collaboration platform is also benefiting from these increased work-from-home requirements. Microsoft reported second-quarter 2020 revenue and earnings that exceeded analysts’ projections. Jennison believes Microsoft continues to pursue an excellent long-term strategy of increasing spending within its current customer base, while bringing new customers onto its platform via multiple avenues. |
• | Union Pacific Corp., through its principal operating company—Union Pacific Railroad Co.—links approximately 20 states in the western two-thirds of the US by rail. The company reported better-than-expected second-quarter 2020 earnings per share (EPS). While revenues declined due to COVID-19 headwinds, third-quarter 2020 rail values were on the upswing. Jennison continues to favor the stock for its pricing power and limited competition. Management has acted quickly during this downturn with decisive cost actions that Jennison believes will set the stage for incremental margins as volumes continue to recover. |
• | Germany-based SAP SE is the world’s largest vendor of enterprise resource planning software used to integrate back-office functions such as distribution, accounting, human resources, and manufacturing. With the robust growth in people going digital amid the pandemic, demand for SAP’s products and services increased sharply. Against this backdrop, the company reported second-quarter 2020 EPS and revenues that exceeded expectations. |
• | Eli Lilly & Co. is a diversified biopharmaceutical company best known for its core franchises in neuroscience, women’s health, oncology, and cardiovascular, along with its immunology franchise. The company is also a global leader in diabetes treatments. Eli Lilly reported better-than-expected second-quarter 2020 EPS and raised its full-year guidance. Jennison favors the stock given its strong earnings, an abundance of events later in 2020 related to its pipeline of drugs, and the lack of patent expirations versus its peers. |
What didn’t work?
The largest detractors from total Fund returns during the reporting period were:
• | Airbus SE is a European multinational aerospace company that designs, manufactures, and delivers commercial aircraft, helicopters, military transports, satellites, and launch |
PGIM Jennison Focused Value Fund | 9 |
Strategy and Performance Overview (continued)
vehicles, as well as providing data services, navigation, secure communications, urban mobility, and other solutions for its global customers. Financial strain across the airline industry due to COVID-19-related travel restrictions led to plane-order cancellations and deferrals, along with balance sheet concerns. Given the company’s exposure to the airline industry, Jennison eliminated its position in March 2020. |
• | Aerospace & defense firm Raytheon Technologies Corp. came under pressure as the timing and magnitude of an air traffic recovery has been pushed out due to the pandemic. Additionally, the increased probability of political party changes in the US House and Senate have raised budgetary concerns at the US Department of Defense. As a result, defense companies saw their stock prices weaken during the period. Despite these headwinds, Jennison favors Raytheon’s stable defense business and cost saving plans, along with its solid free cash flow and attractive dividend. For these reasons, Jennison believes that remaining patient for an eventual recovery in the company’s aerospace business is prudent. |
• | Shares of integrated oil & gas firm Suncor Energy Inc. struggled during the period as energy was the Index’s worst-performing sector amid a volatile energy environment. Although Suncor reported strong second-quarter 2020 earnings that beat analysts’ expectations, its stock price declined as investors negatively reacted to a strategic reversal of maintaining a healthy balance sheet and a position of strength for engaging in potential acquisitions at the bottom of the energy cycle to a position of adding a surprising amount of debt in the quarter. Jennison eliminated the stock from the portfolio during the reporting period. |
• | Healthcare equipment company Zimmer Biomet Holdings Inc. also hampered Fund performance during the period. However, Jennison has continued to hold its position in the stock and believes Zimmer is an awakening giant. From Jennison’s perspective, the franchise’s new management team is highly capable, and the company has started to achieve meaningful operating improvements such as addressing quality and manufacturing issues and reducing expenses. With the turnaround continuing and boosted by ongoing potential catalysts, the company’s shares should eventually move higher, in Jennison’s view. |
• | American Electric Power is a major investor-owned electric utility, delivering electricity to more than five million customers in 11 states. The company reported strong second-quarter 2020 results, as favorable weather partially made up for the mild weather in the first quarter. However, its shares traded lower, along with the overall utilities sector. Jennison swapped its position in American Electric Power for a stake in Dominion Energy, believing that Dominion is better positioned in the near term with its renewable energy transition. Utilities that have a renewable path articulated have historically performed better than those that did not. |
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Current outlook
• | Jennison remains committed to its process and investment philosophy and believes that having patience and a long-term perspective, coupled with disciplined risk controls, are needed to outperform in today’s environment. |
• | Jennison continues its focus on cash-flow strength and dependability, which it believes leads to higher levels of franchise durability. Jennison continues to assess the underlying impacts to its holdings and strongly believes the portfolio consists of businesses with valuations that still do not reflect their true long-term intrinsic value. |
PGIM Jennison Focused Value Fund | 11 |
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 September 30, 2020. The example is for illustrative purposes only; you should consult the Fund’s 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
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and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information 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 Focused Value Fund | Beginning Account Value | Ending Account Value September 30, 2020 | Annualized Expense Ratio | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,201.20 | 1.16 | % | $ | 6.38 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.20 | 1.16 | % | $ | 5.86 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,195.30 | 2.03 | % | $ | 11.14 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.85 | 2.03 | % | $ | 10.23 | ||||||||||
Class R | Actual | $ | 1,000.00 | $ | 1,199.00 | 1.53 | % | $ | 8.41 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.35 | 1.53 | % | $ | 7.72 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,203.70 | 0.76 | % | $ | 4.19 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.20 | 0.76 | % | $ | 3.84 | ||||||||||
Class R6 | Actual | $ | 1,000.00 | $ | 1,203.40 | 0.78 | % | $ | 4.30 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.10 | 0.78 | % | $ | 3.94 |
*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 183 days in the six-month period ended September 30, 2020, and divided by the 366 days in the Fund’s fiscal year ended September 30, 2020 (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 Jennison Focused Value Fund | 13 |
as of September 30, 2020
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.0% | ||||||||
COMMON STOCKS | ||||||||
Aerospace & Defense 4.7% | ||||||||
Northrop Grumman Corp. | 10,374 | $ | 3,272,893 | |||||
Raytheon Technologies Corp. | 96,460 | 5,550,309 | ||||||
|
| |||||||
8,823,202 | ||||||||
Air Freight & Logistics 1.2% | ||||||||
FedEx Corp. | 8,875 | 2,232,240 | ||||||
Automobiles 2.1% | ||||||||
General Motors Co. | 132,625 | 3,924,374 | ||||||
Banks 10.2% | ||||||||
Bank of America Corp. | 217,587 | 5,241,671 | ||||||
JPMorgan Chase & Co. | 66,718 | 6,422,942 | ||||||
PNC Financial Services Group, Inc. (The) | 36,672 | 4,030,619 | ||||||
Truist Financial Corp. | 93,213 | 3,546,755 | ||||||
|
| |||||||
19,241,987 | ||||||||
Building Products 1.7% | ||||||||
Johnson Controls International PLC | 76,866 | 3,139,976 | ||||||
Capital Markets 3.6% | ||||||||
Goldman Sachs Group, Inc. (The) | 33,466 | 6,725,662 | ||||||
Chemicals 6.3% | ||||||||
FMC Corp. | 40,270 | 4,264,996 | ||||||
Linde PLC (United Kingdom) | 31,782 | 7,568,247 | ||||||
|
| |||||||
11,833,243 | ||||||||
Entertainment 3.0% | ||||||||
Walt Disney Co. (The) | 46,163 | 5,727,905 | ||||||
Equity Real Estate Investment Trusts (REITs) 2.0% | ||||||||
American Tower Corp. | 15,597 | 3,770,263 | ||||||
Food & Staples Retailing 4.0% | ||||||||
Walmart, Inc. | 53,687 | 7,511,348 | ||||||
Food Products 2.4% | ||||||||
Mondelez International, Inc. (Class A Stock) | 77,674 | 4,462,371 |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 15 |
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Health Care Equipment & Supplies 2.3% | ||||||||
Zimmer Biomet Holdings, Inc. | 32,487 | $ | 4,422,780 | |||||
Health Care Providers & Services 3.8% | ||||||||
Cigna Corp. | 17,327 | 2,935,367 | ||||||
Laboratory Corp. of America Holdings* | 22,166 | 4,173,193 | ||||||
|
| |||||||
7,108,560 | ||||||||
Household Durables 2.2% | ||||||||
D.R. Horton, Inc. | 55,959 | 4,232,179 | ||||||
Household Products 1.6% | ||||||||
Procter & Gamble Co. (The) | 21,538 | 2,993,567 | ||||||
Insurance 4.7% | ||||||||
Chubb Ltd. | 43,343 | 5,032,989 | ||||||
MetLife, Inc. | 106,195 | 3,947,268 | ||||||
|
| |||||||
8,980,257 | ||||||||
Interactive Media & Services 4.0% | ||||||||
Alphabet, Inc. (Class A Stock)* | 5,168 | 7,574,221 | ||||||
Machinery 1.9% | ||||||||
Otis Worldwide Corp. | 58,859 | 3,673,979 | ||||||
Multi-Utilities 4.9% | ||||||||
Dominion Energy, Inc.(a) | 116,365 | 9,184,689 | ||||||
Oil, Gas & Consumable Fuels 2.3% | ||||||||
Chevron Corp. | 61,489 | 4,427,208 | ||||||
Pharmaceuticals 6.3% | ||||||||
AstraZeneca PLC (United Kingdom), ADR(a) | 135,497 | 7,425,235 | ||||||
Eli Lilly & Co. | 30,540 | 4,520,531 | ||||||
|
| |||||||
11,945,766 | ||||||||
Road & Rail 5.3% | ||||||||
Union Pacific Corp. | 51,178 | 10,075,413 | ||||||
Semiconductors & Semiconductor Equipment 3.7% | ||||||||
Texas Instruments, Inc. | 49,055 | 7,004,563 |
See Notes to Financial Statements.
16 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Software 8.0% | ||||||||
Microsoft Corp. | 35,254 | $ | 7,414,974 | |||||
SAP SE (Germany), ADR(a) | 49,223 | 7,669,436 | ||||||
|
| |||||||
15,084,410 | ||||||||
Specialty Retail 6.8% | ||||||||
Lowe’s Cos., Inc. | 48,927 | 8,115,032 | ||||||
Ross Stores, Inc. | 50,627 | 4,724,512 | ||||||
|
| |||||||
12,839,544 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 186,939,707 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 11.6% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
PGIM Core Ultra Short Bond Fund(w) | 2,134,123 | 2,134,123 | ||||||
PGIM Institutional Money Market Fund | 19,742,175 | 19,738,227 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 21,872,350 | |||||||
|
| |||||||
TOTAL INVESTMENTS 110.6% | 208,812,057 | |||||||
Liabilities in excess of other assets (10.6)% | (19,990,216 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 188,821,841 | ||||||
|
|
Below is a list of the abbreviation(s) used in the annual report:
ADR—American Depositary Receipt
LIBOR—London Interbank Offered Rate
REITs—Real Estate Investment Trust
* | 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 $19,404,571; cash collateral of $19,730,505 (included in liabilities) was received with which the Series 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 Series 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. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 17 |
Schedule of Investments (continued)
as of September 30, 2020
Fair Value Measurements:
Various inputs are used in determining the value of the Series’ 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 September 30, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Assets | ||||||||||||
Common Stocks | ||||||||||||
Aerospace & Defense | $ | 8,823,202 | $— | $— | ||||||||
Air Freight & Logistics | 2,232,240 | — | — | |||||||||
Automobiles | 3,924,374 | — | — | |||||||||
Banks | 19,241,987 | — | — | |||||||||
Building Products | 3,139,976 | — | — | |||||||||
Capital Markets | 6,725,662 | — | — | |||||||||
Chemicals | 11,833,243 | — | — | |||||||||
Entertainment | 5,727,905 | — | — | |||||||||
Equity Real Estate Investment Trusts (REITs) | 3,770,263 | — | — | |||||||||
Food & Staples Retailing | 7,511,348 | — | — | |||||||||
Food Products | 4,462,371 | — | — | |||||||||
Health Care Equipment & Supplies | 4,422,780 | — | — | |||||||||
Health Care Providers & Services | 7,108,560 | — | — | |||||||||
Household Durables | 4,232,179 | — | — | |||||||||
Household Products | 2,993,567 | — | — | |||||||||
Insurance | 8,980,257 | — | — | |||||||||
Interactive Media & Services | 7,574,221 | — | — | |||||||||
Machinery | 3,673,979 | — | — | |||||||||
Multi-Utilities | 9,184,689 | — | — | |||||||||
Oil, Gas & Consumable Fuels | 4,427,208 | — | — | |||||||||
Pharmaceuticals | 11,945,766 | — | — | |||||||||
Road & Rail | 10,075,413 | — | — | |||||||||
Semiconductors & Semiconductor Equipment | 7,004,563 | — | — | |||||||||
Software | 15,084,410 | — | — | |||||||||
Specialty Retail | 12,839,544 | — | — | |||||||||
Affiliated Mutual Funds | 21,872,350 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 208,812,057 | $— | $— | ||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
18 |
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of September 30, 2020 were as follows (unaudited):
Affiliated Mutual Funds (10.4% represents investments purchased with collateral from securities on loan) | 11.6 | % | ||
Banks | 10.2 | |||
Software | 8.0 | |||
Specialty Retail | 6.8 | |||
Pharmaceuticals | 6.3 | |||
Chemicals | 6.3 | |||
Road & Rail | 5.3 | |||
Multi-Utilities | 4.9 | |||
Insurance | 4.7 | |||
Aerospace & Defense | 4.7 | |||
Interactive Media & Services | 4.0 | |||
Food & Staples Retailing | 4.0 | |||
Health Care Providers & Services | 3.8 | |||
Semiconductors & Semiconductor Equipment | 3.7 | |||
Capital Markets | 3.6 |
Entertainment | 3.0 | % | ||
Food Products | 2.4 | |||
Oil, Gas & Consumable Fuels | 2.3 | |||
Health Care Equipment & Supplies | 2.3 | |||
Household Durables | 2.2 | |||
Automobiles | 2.1 | |||
Equity Real Estate Investment Trusts (REITs) | 2.0 | |||
Machinery | 1.9 | |||
Building Products | 1.7 | |||
Household Products | 1.6 | |||
Air Freight & Logistics | 1.2 | |||
|
| |||
110.6 | ||||
Liabilities in excess of other assets | (10.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series 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:
Gross Market | |||||||||||||||
Value of | |||||||||||||||
Recognized | Collateral | Net | |||||||||||||
Description | Assets/(Liabilities) | Pledged/(Received)(1) | Amount | ||||||||||||
Securities on Loan | $ | 19,404,571 | $ | (19,404,571 | ) | $ | — | ||||||||
|
|
|
|
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 19 |
Statement of Assets and Liabilities
as of September 30, 2020
Assets | ||||||
Investments at value, including securities on loan of $19,404,571: | ||||||
Unaffiliated investments (cost $170,037,911) | $ | 186,939,707 | ||||
Affiliated investments (cost $21,870,096) | 21,872,350 | |||||
Receivable for investments sold | 918,772 | |||||
Dividends receivable | 121,837 | |||||
Receivable for Series shares sold | 106,862 | |||||
Tax reclaim receivable | 65,263 | |||||
Prepaid expenses and other assets | 4,264 | |||||
|
| |||||
Total Assets | 210,029,055 | |||||
|
| |||||
Liabilities | ||||||
Payable to broker for collateral for securities on loan | 19,730,505 | |||||
Payable for investments purchased | 912,173 | |||||
Payable for Series shares reacquired | 300,574 | |||||
Accrued expenses and other liabilities | 109,739 | |||||
Management fee payable | 95,325 | |||||
Distribution fee payable | 42,902 | |||||
Affiliated transfer agent fee payable | 15,996 | |||||
|
| |||||
Total Liabilities | 21,207,214 | |||||
|
| |||||
Net Assets | $ | 188,821,841 | ||||
|
| |||||
Net assets were comprised of: | ||||||
Common stock, at par | $ | 13,484 | ||||
Paid-in capital in excess of par | 177,370,323 | |||||
Total distributable earnings (loss) | 11,438,034 | |||||
|
| |||||
Net assets, September 30, 2020 | $ | 188,821,841 | ||||
|
|
See Notes to Financial Statements.
20 |
Class A | ||||
Net asset value and redemption price per share, | $ | 14.03 | ||
Maximum sales charge (5.50% of offering price) | 0.82 | |||
|
| |||
Maximum offering price to public | $ | 14.85 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | $ | 10.59 | ||
|
| |||
Class R | ||||
Net asset value, offering price and redemption price per share, | $ | 11.75 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | $ | 14.82 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share, | $ | 14.79 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 21 |
Statement of Operations
Year Ended September 30, 2020
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $49,647 foreign withholding tax) | $ | 4,205,260 | ||
Affiliated dividend income | 74,857 | |||
Income from securities lending, net (including affiliated income of $31,930) | 35,106 | |||
|
| |||
Total income | 4,315,223 | |||
|
| |||
Expenses | ||||
Management fee | 1,294,166 | |||
Distribution fee(a) | 595,929 | |||
Transfer agent’s fees and expenses (including affiliated expense of $124,916)(a) | 302,319 | |||
Custodian and accounting fees | 75,693 | |||
Registration fees(a) | 72,511 | |||
Shareholders’ reports | 52,090 | |||
Legal fees and expenses | 28,260 | |||
Audit fee | 24,154 | |||
Directors’ fees | 14,290 | |||
Miscellaneous | 24,254 | |||
|
| |||
Total expenses | 2,483,666 | |||
Less: Fee waiver and/or expense reimbursement(a) | (34,712 | ) | ||
Distribution fee waiver(a) | (2,619 | ) | ||
|
| |||
Net expenses | 2,446,335 | |||
|
| |||
Net investment income (loss) | 1,868,888 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $1,640) | (5,411,166 | ) | ||
Foreign currency transactions | 8,074 | |||
|
| |||
(5,403,092 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $2,376) | (1,519,046 | ) | ||
Foreign currencies | 6,253 | |||
|
| |||
(1,512,793 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (6,915,885 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (5,046,997 | ) | |
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class B | Class C | Class R | Class Z | Class R6 | |||||||||||||||||||||||||
Distribution fee | 490,662 | 16,728 | 80,683 | 7,856 | — | — | ||||||||||||||||||||||||
Transfer agent’s fees and expenses | 234,909 | 10,444 | 12,548 | 1,742 | 42,623 | 53 | ||||||||||||||||||||||||
Registration fees | 13,190 | 5,958 | 12,947 | 13,566 | 13,234 | 13,616 | ||||||||||||||||||||||||
Fee waiver and/or expense reimbursement | — | (10,901 | ) | — | (11,801 | ) | — | (12,010 | ) | |||||||||||||||||||||
Distribution fee waiver | — | — | — | (2,619 | ) | — | — |
See Notes to Financial Statements.
22 |
Statements of Changes in Net Assets
Year Ended | ||||||||||||
September 30, | ||||||||||||
2020 | 2019 | |||||||||||
Increase (Decrease) in Net Assets | ||||||||||||
Operations | ||||||||||||
Net investment income (loss) | $ | 1,868,888 | $ | 3,098,530 | ||||||||
Net realized gain (loss) on investment and foreign currency transactions | (5,403,092 | ) | 18,667,343 | |||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (1,512,793 | ) | (63,871,717 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (5,046,997 | ) | (42,105,844 | ) | ||||||||
|
|
|
| |||||||||
Dividends and Distributions | ||||||||||||
Distributions from distributable earnings | ||||||||||||
Class A | (14,946,779 | ) | (28,829,960 | ) | ||||||||
Class B | (264,691 | ) | (720,916 | ) | ||||||||
Class C | (995,657 | ) | (4,758,944 | ) | ||||||||
Class R | (179,353 | ) | (496,144 | ) | ||||||||
Class Z | (4,375,230 | ) | (17,077,466 | ) | ||||||||
Class R6 | (106,094 | ) | (2,483,158 | ) | ||||||||
|
|
|
| |||||||||
(20,867,804 | ) | (54,366,588 | ) | |||||||||
|
|
|
| |||||||||
Series share transactions (Net of share conversions) | ||||||||||||
Net proceeds from shares sold | 10,015,902 | 28,980,479 | ||||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 20,476,867 | 53,306,093 | ||||||||||
Cost of shares reacquired | (72,470,026 | ) | (155,796,738 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets from Series share transactions | (41,977,257 | ) | (73,510,166 | ) | ||||||||
|
|
|
| |||||||||
Total increase (decrease) | (67,892,058 | ) | (169,982,598 | ) | ||||||||
Net Assets: | ||||||||||||
Beginning of year | 256,713,899 | 426,696,497 | ||||||||||
|
|
|
| |||||||||
End of year | $ | 188,821,841 | $ | 256,713,899 | ||||||||
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 23 |
Notes to Financial Statements
1. Organization
The Prudential Investment Portfolios, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Company consists of three series: PGIM Balanced Fund, PGIM Jennison Focused Value Fund (formerly known as PGIM Jennison Equity Opportunity Fund) and PGIM Jennison Growth Fund, each of which are diversified funds for purposes of the 1940 Act. These financial statements relate only to the PGIM Jennison Focused Value Fund (the “Series”).
The investment objective of the Series is to achieve long-term growth of capital.
2. Accounting Policies
The Series 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 accounting policies conform to U.S. generally accepted accounting principles. The Series consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Series holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the 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. The Company’s Board of Directors (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Series 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. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
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 Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
24 |
Various inputs determine how the Series’ 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 Measurements and Disclosures.
Common or preferred stocks, exchange-traded funds 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 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 Series 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 exchange-traded funds) 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 pricing methodologies 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.
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; any available analyst media or other reports or information deemed reliable by the Manager 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
PGIM Jennison Focused Value Fund | 25 |
Notes to Financial Statements (continued)
most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities: Pursuant to Rule 22e-4 under the 1940 Act, the Series has adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Series limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Series may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser(s) and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities: Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Series’ investments in restricted securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series 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 current rates of exchange;
(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 Series are presented at the foreign exchange rates and market values at the close of the period, the Series 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 Series does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term
26 |
portfolio securities sold during the period. Accordingly, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.
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 Series’ 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 Company, on behalf of the Series, 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 Series. A master netting arrangement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ 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. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.
Securities Lending: The Series 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 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 Series. Upon termination of the loan, the borrower will return to the Series securities identical to the loaned securities. Should the borrower of the securities fail financially, the Series has the right to repurchase the securities in the open market using the collateral.
The Series 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. The Series also continues to recognize any unrealized gain (loss) in the market price of the securities loaned
PGIM Jennison Focused Value Fund | 27 |
Notes to Financial Statements (continued)
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 equity REITs): The Series invested in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity 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 equity REITs.
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 Series 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. 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. Class specific expenses 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 Series’ 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: The Series expects to pay dividends from net investment income and distributions from net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, 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.
28 |
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 Company, on behalf of the Series, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. In addition, under the management agreement, the Manager provides all of the administrative functions necessary for the organization, operation and management of the Series. The Manager administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Series’ custodian and the Series’ transfer agent. The Manager is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “subadvisor”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. The Manager pays for the services of Jennison, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to the Manager is accrued daily and payable monthly at an annual rate of 0.60% of the Series average daily net assets up to $300 million and 0.575% of the average daily net assets of the Series over $300 million. The effective management fee rate before any waivers and/or expense reimbursements was 0.60% for the year ended September 30, 2020.
The Manager has contractually agreed, through January 31, 2022, to limit transfer agency, shareholder servicing, sub-transfer agency, and blue sky fees, as applicable, to the extent that such fees cause the total annual operating expenses to exceed 1.53% of average daily net assets for Class R shares. 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 Series 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
PGIM Jennison Focused Value Fund | 29 |
Notes to Financial Statements (continued)
total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager 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 Company, on behalf of the Series, 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 and Class R6 shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A, Class C and Class R shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1% and 0.75% of the average daily net assets of the Class A, Class C and Class R shares, respectively. PIMS has contractually agreed through January 31, 2022 to limit such fees to 0.50% of the average daily net assets of Class R shares.
For the year ended September 30, 2020, PIMS received $63,440 in front-end sales charges resulting from sales of Class A shares. Additionally, for the year ended September 30, 2020, PIMS received $180 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.
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 Series’ transfer 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 Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios
30 |
2, registered under the 1940 Act and managed by PGIM Investments. Through the Series’ investments in the mentioned underlying funds, PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services. In addition to the realized and unrealized gains on investments in the Core Fund and 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 Series 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, and/or common officers. Pursuant to the Rule 17a-7 procedures and consistent with guidance issued by the Securities and Exchange Commission (“SEC”), the Company’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such 17a-7 transactions were effected in accordance with the Series’ Rule 17a-7 procedures. For the year ended September 30, 2020, no 17a-7 transactions were entered into by the Series.
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 year ended September 30, 2020, were $270,621,272 and $319,852,720, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the year ended September 30, 2020, is presented as follows:
Value, Beginning of Year | Cost of | Proceeds | Change in | Realized | Value, | Shares, | Income | |||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund* | ||||||||||||||||||||||||||||||
$14,253,567 | $ | 70,975,653 | $ | 83,095,097 | $ | — | $ | — | $ | 2,134,123 | 2,134,123 | $ | 74,857 | |||||||||||||||||
PGIM Institutional Money Market Fund* | ||||||||||||||||||||||||||||||
4,619,279 | 265,485,282 | 250,370,350 | 2,376 | 1,640 | 19,738,227 | 19,742,175 | 31,930 | ** | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
$18,872,846 | $ | 336,460,935 | $ | 333,465,447 | $ | 2,376 | $ | 1,640 | $ | 21,872,350 | $ | 106,787 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | The Fund did not have any capital gain distributions during the reporting period. |
** | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
PGIM Jennison Focused Value Fund | 31 |
Notes to Financial Statements (continued)
6. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date.
For the year ended September 30, 2020, the tax character of dividends paid by the Series were $2,275,889 of ordinary income and $18,591,915 of long-term capital gains. For the year ended September 30, 2019, the tax character of dividends paid by the Series were $12,965,983 of ordinary income and $41,400,605 of long-term capital gains.
As of September 30, 2020, the accumulated undistributed earnings on a tax basis was $1,825,769 of ordinary income.
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of September 30, 2020 were as follows:
Gross | Gross | Net | ||||
Unrealized | Unrealized | Unrealized | ||||
Tax Basis | Appreciation | Depreciation | Appreciation | |||
$192,819,820 | $29,781,849 | $(13,789,612) | $15,992,237 |
The differences between book basis and tax basis were primarily attributable to deferred losses on wash sales.
For federal income tax purposes, the Series had a capital loss carryforward as of September 30, 2020 of approximately $6,380,000 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.
The Manager has analyzed the Series’ 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 Series’ financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Series’ U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended September 30, 2020 are subject to such review.
7. Capital and Ownership
The Series offers Class A, Class C, Class R, 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 contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial
32 |
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. Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. 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 10 years after purchase. Class R, 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 Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock, below.
The Company is authorized to issue 6.625 billion shares of capital stock, $0.001 par value per share, 1.02 billion of which are designated as shares of the Series. The shares are further classified and designated as follows:
Class A | 100,000,000 | |||
Class B | 2,000,000 | |||
Class C | 25,000,000 | |||
Class R | 200,000,000 | |||
Class Z | 325,000,000 | |||
Class T | 50,000,000 | |||
Class R6 | 320,000,000 |
The Series currently does not have any Class B or Class T shares outstanding.
As of September 30, 2020, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Series as follows:
Number of Shares | Percentage of Outstanding Shares | |||
Class A | 5,948 | 0.1% |
At the reporting period end, the number of shareholders holding greater than 5% of the Series are as follows:
Affiliated | Unaffiliated | |||||
Number of Shareholders | Percentage of Outstanding Shares | Number of Shareholders | Percentage of Outstanding Shares | |||
— | —% | 2 | 49.7% |
PGIM Jennison Focused Value Fund | 33 |
Notes to Financial Statements (continued)
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 316,168 | $ | 4,319,339 | |||||
Shares issued in reinvestment of dividends and distributions | 950,412 | 14,721,886 | ||||||
Shares reacquired | (2,308,864 | ) | (33,022,444 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,042,284 | ) | (13,981,219 | ) | ||||
Shares issued upon conversion from other share class(es) | 259,959 | 3,562,850 | ||||||
Shares reacquired upon conversion into other share class(es) | (59,327 | ) | (856,219 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (841,652 | ) | $ | (11,274,588 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 391,520 | $ | 6,255,286 | |||||
Shares issued in reinvestment of dividends and distributions | 1,931,988 | 28,187,707 | ||||||
Shares reacquired | (2,605,085 | ) | (42,369,547 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (281,577 | ) | (7,926,554 | ) | ||||
Shares issued upon conversion from other share class(es) | 814,333 | 13,395,921 | ||||||
Shares reacquired upon conversion into other share class(es) | (58,122 | ) | (929,477 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 474,634 | $ | 4,539,890 | |||||
|
|
|
| |||||
Class B | ||||||||
Period ended June 26, 2020*: | ||||||||
Shares sold | 456 | $ | 4,983 | |||||
Shares issued in reinvestment of dividends and distributions | 22,124 | 259,740 | ||||||
Shares reacquired | (42,757 | ) | (478,245 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (20,177 | ) | (213,522 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (210,198 | ) | (2,109,887 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (230,375 | ) | $ | (2,323,409 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 1,877 | $ | 24,475 | |||||
Shares issued in reinvestment of dividends and distributions | 62,151 | 706,659 | ||||||
Shares reacquired | (79,655 | ) | (994,276 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (15,627 | ) | (263,142 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (45,783 | ) | (581,760 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (61,410 | ) | $ | (844,902 | ) | |||
|
|
|
|
34 |
Class C | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 31,395 | $ | 344,871 | |||||
Shares issued in reinvestment of dividends and distributions | 79,485 | 936,329 | ||||||
Shares reacquired | (297,775 | ) | (3,354,686 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (186,895 | ) | (2,073,486 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (159,747 | ) | (1,756,143 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (346,642 | ) | $ | (3,829,629 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 160,929 | $ | 1,939,927 | |||||
Shares issued in reinvestment of dividends and distributions | 404,351 | 4,613,643 | ||||||
Shares reacquired | (566,189 | ) | (7,262,783 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (909 | ) | (709,213 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1,054,567 | ) | (13,478,236 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,055,476 | ) | $ | (14,187,449 | ) | |||
|
|
|
| |||||
Class R | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 14,065 | $ | 177,686 | |||||
Shares issued in reinvestment of dividends and distributions | 6,606 | 85,944 | ||||||
Shares reacquired | (131,990 | ) | (1,639,082 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (111,319 | ) | $ | (1,375,452 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 30,454 | $ | 400,728 | |||||
Shares issued in reinvestment of dividends and distributions | 24,004 | 299,086 | ||||||
Shares reacquired | (91,211 | ) | (1,203,572 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (36,753 | ) | $ | (503,758 | ) | |||
|
|
|
| |||||
Class Z | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 324,643 | $ | 4,865,762 | |||||
Shares issued in reinvestment of dividends and distributions | 267,414 | 4,366,874 | ||||||
Shares reacquired | (2,160,614 | ) | (33,420,477 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,568,557 | ) | (24,187,841 | ) | ||||
Shares issued upon conversion from other share class(es) | 73,979 | 1,129,565 | ||||||
Shares reacquired upon conversion into other share class(es) | (4,840 | ) | (65,102 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,499,418 | ) | $ | (23,123,378 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 1,046,142 | $ | 17,796,182 | |||||
Shares issued in reinvestment of dividends and distributions | 1,112,146 | 17,015,840 | ||||||
Shares reacquired | (5,087,618 | ) | (85,553,733 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (2,929,330 | ) | (50,741,711 | ) | ||||
Shares issued upon conversion from other share class(es) | 99,052 | 1,624,007 | ||||||
Shares reacquired upon conversion into other share class(es) | (4,615 | ) | (75,332 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (2,834,893 | ) | $ | (49,193,036 | ) | |||
|
|
|
|
PGIM Jennison Focused Value Fund | 35 |
Notes to Financial Statements (continued)
Class R6 | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 20,920 | $ | 303,261 | |||||
Shares issued in reinvestment of dividends and distributions | 6,513 | 106,094 | ||||||
Shares reacquired | (37,137 | ) | (555,092 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (9,704 | ) | (145,737 | ) | ||||
Shares issued upon conversion from other share class(es) | 6,294 | 94,936 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (3,410 | ) | $ | (50,801 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 154,628 | $ | 2,563,881 | |||||
Shares issued in reinvestment of dividends and distributions | 162,192 | 2,483,158 | ||||||
Shares reacquired | (1,114,444 | ) | (18,412,827 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (797,624 | ) | (13,365,788 | ) | ||||
Shares issued upon conversion from other share class(es) | 2,584 | 44,877 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (795,040 | ) | $ | (13,320,911 | ) | |||
|
|
|
|
* | Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. |
8. Borrowings
The Company, on behalf of the Series, 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 | 10/3/2019 – 10/1/2020 | 10/4/2018 – 10/2/2019 | ||
Total Commitment | $ 1,222,500,000* | $ 900,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
1.20% plus the higher of (1) | 1.25% plus the higher of (1) | |||
the effective federal funds | the effective federal funds | |||
Annualized Interest Rate on | rate, (2) the one-month | rate, (2) the one-month | ||
Borrowings | ||||
LIBOR rate or (3) zero | LIBOR rate or (3) zero | |||
percent | percent | |||
* Effective March 31, 2020, the SCA’s total commitment was increased from $900,000,000 to $1,162,500,000 and subsequently, effective April 7, 2020 was increased to $1,222,500,000. |
Subsequent to the reporting period end, the SCA has been renewed effective October 2, 2020 and will provide a commitment of $1,200,000,000 through September 30, 2021. The commitment fee paid by the Participating Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.30% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent.
36 |
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 Series utilized the SCA during the year ended September 30, 2020. The average daily balance for the 9 days that the Series had loans outstanding during the period was approximately $613,000, borrowed at a weighted average interest rate of 2.71%. The maximum loan outstanding amount during the period was $947,000. At September 30, 2020, the Series did not have an outstanding loan amount.
9. Risks of Investing in the Series
The Series’ risks include, but are not limited to, some or all of the risks discussed below. For further information on the Series’ risks, please refer to the Series’ Prospectus and Statement of Additional Information.
Equity and Equity-Related Securities Risks: The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Series invests could go down. The Series’ holdings can vary significantly from broad market indexes and the performance of the Series can deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: The Series’ investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Series may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Series’ investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.
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 Series’ shares. There is no requirement that these entities maintain their investment in the Series. There is a risk that such large shareholders or that the Series’ shareholders generally may redeem all or a substantial portion of their investments in the Series in a short period of time, which could have a significant negative impact on the Series’ NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Series’ ability to implement its investment strategy. The Series’ ability to pursue its
PGIM Jennison Focused Value Fund | 37 |
Notes to Financial Statements (continued)
investment objective after one or more large scale redemptions may be impaired and, as a result, the Series may invest a larger portion of its assets in cash or cash equivalents.
Market and Credit Risk: Securities markets may be volatile and the market prices of the Series’ 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 Series fall, the value of an investment in the Series will decline. Additionally, the Series may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Series has unsettled or open transactions defaults.
Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally.
Value Style Risk: Since the Series follows a value investment style, there is the risk that the value style may be out of favor for a period of time, that the market will not recognize a security’s intrinsic value for a long time or that a stock judged to be undervalued may not be undervalued.
10. Recent Accounting Pronouncements and Reporting Updates
In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of certain provisions of the ASU and any impact on the financial statement disclosures has not yet been determined.
38 |
Financial Highlights
Class A Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $ | 15.63 | $ | 20.62 | $ | 20.89 | $ | 19.11 | $ | 18.46 | ||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.12 | 0.14 | 0.14 | 0.08 | 0.14 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.38 | ) | (2.42 | ) | 2.42 | 3.21 | 1.97 | |||||||||||||
Total from investment operations | (0.26 | ) | (2.28 | ) | 2.56 | 3.29 | 2.11 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.09 | ) | (0.19 | ) | (0.16 | ) | (0.13 | ) | ||||||||||
Distributions from net realized gains | (1.19 | ) | (2.62 | ) | (2.64 | ) | (1.35 | ) | (1.33 | ) | ||||||||||
Total dividends and distributions | (1.34 | ) | (2.71 | ) | (2.83 | ) | (1.51 | ) | (1.46 | ) | ||||||||||
Net asset value, end of year | $ | 14.03 | $ | 15.63 | $ | 20.62 | $ | 20.89 | $ | 19.11 | ||||||||||
Total Return(b): | (2.50 | )% | (10.13 | )% | 13.39 | % | 17.80 | % | 12.14 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 151,149 | $ | 181,559 | $ | 229,733 | $ | 229,043 | $ | 226,889 | ||||||||||
Average net assets (000) | $ | 163,554 | $ | 193,160 | $ | 233,106 | $ | 231,082 | $ | 235,287 | ||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.15 | % | 1.11 | % | 1.06 | % | 1.09 | % | 1.07 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.15 | % | 1.11 | % | 1.06 | % | 1.09 | % | 1.07 | % | ||||||||||
Net investment income (loss) | 0.85 | % | 0.87 | % | 0.72 | % | 0.39 | % | 0.78 | % | ||||||||||
Portfolio turnover rate(e) | 128 | % | 47 | % | 59 | % | 49 | % | 59 | % |
(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 generally accepted accounting principles. |
(c) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 39 |
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $ | 12.15 | $ | 16.75 | $ | 17.48 | $ | 16.24 | $ | 15.89 | ||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | – | (b) | 0.02 | – | (c) | (0.05 | ) | 0.01 | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.29 | ) | (2.00 | ) | 1.99 | 2.70 | 1.69 | |||||||||||||
Total from investment operations | (0.29 | ) | (1.98 | ) | 1.99 | 2.65 | 1.70 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.08 | ) | – | (0.08 | ) | (0.06 | ) | (0.02 | ) | |||||||||||
Distributions from net realized gains | (1.19 | ) | (2.62 | ) | (2.64 | ) | (1.35 | ) | (1.33 | ) | ||||||||||
Total dividends and distributions | (1.27 | ) | (2.62 | ) | (2.72 | ) | (1.41 | ) | (1.35 | ) | ||||||||||
Net asset value, end of year | $ | 10.59 | $ | 12.15 | $ | 16.75 | $ | 17.48 | $ | 16.24 | ||||||||||
Total Return(d): | (3.41 | )% | (10.78 | )% | 12.61 | % | 16.91 | % | 11.41 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $ | 5,874 | $ | 10,945 | $ | 32,765 | $ | 35,289 | $ | 37,229 | ||||||||||
Average net assets (000) | $ | 8,068 | $ | 20,114 | $ | 34,589 | $ | 37,497 | $ | 40,176 | ||||||||||
Ratios to average net assets(e)(f): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.02 | % | 1.85 | % | 1.78 | % | 1.79 | % | 1.77 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 2.02 | % | 1.85 | % | 1.78 | % | 1.79 | % | 1.77 | % | ||||||||||
Net investment income (loss) | (0.02 | )% | 0.13 | % | 0.01 | % | (0.31 | )% | 0.08 | % | ||||||||||
Portfolio turnover rate(g) | 128 | % | 47 | % | 59 | % | 49 | % | 59 | % |
(a) | Calculated based on average shares outstanding during the year. |
(b) | Less than $(0.005) per share. |
(c) | Less than $0.005 per share. |
(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 generally accepted accounting principles. |
(e) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(f) | Does not include expenses of the underlying funds in which the Series invests. |
(g) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
40 |
Class R Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $13.30 | $18.01 | $18.63 | $17.21 | $16.76 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.05 | 0.06 | 0.05 | 0.03 | 0.09 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.30 | ) | (2.13 | ) | 2.12 | 2.87 | 1.79 | |||||||||||||
Total from investment operations | (0.25 | ) | (2.07 | ) | 2.17 | 2.90 | 1.88 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.02 | ) | (0.15 | ) | (0.13 | ) | (0.10 | ) | ||||||||||
Distributions from net realized gains | (1.19 | ) | (2.62 | ) | (2.64 | ) | (1.35 | ) | (1.33 | ) | ||||||||||
Total dividends and distributions | (1.30 | ) | (2.64 | ) | (2.79 | ) | (1.48 | ) | (1.43 | ) | ||||||||||
Net asset value, end of year | $11.75 | $13.30 | $18.01 | $18.63 | $17.21 | |||||||||||||||
Total Return(b): | (2.82 | )% | (10.53 | )% | 12.85 | % | 17.49 | % | 11.98 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $494 | $2,041 | $3,424 | $5,382 | $5,880 | |||||||||||||||
Average net assets (000) | $1,047 | $2,504 | $4,542 | $5,859 | $6,281 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.53 | % | 1.53 | % | 1.53 | % | 1.29 | % | 1.27 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 2.91 | % | 1.89 | % | 1.84 | % | 1.54 | % | 1.52 | % | ||||||||||
Net investment income (loss) | 0.38 | % | 0.44 | % | 0.26 | % | 0.19 | % | 0.57 | % | ||||||||||
Portfolio turnover rate(e) | 128 | % | 47 | % | 59 | % | 49 | % | 59 | % |
(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 generally accepted accounting principles. |
(c) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 41 |
Financial Highlights (continued)
Class Z Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $16.43 | $21.52 | $21.68 | $19.78 | $19.06 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.18 | 0.21 | 0.21 | 0.14 | 0.20 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.42 | ) | (2.54 | ) | 2.52 | 3.32 | 2.04 | |||||||||||||
Total from investment operations | (0.24 | ) | (2.33 | ) | 2.73 | 3.46 | 2.24 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.14 | ) | (0.25 | ) | (0.21 | ) | (0.19 | ) | ||||||||||
Distributions from net realized gains | (1.19 | ) | (2.62 | ) | (2.64 | ) | (1.35 | ) | (1.33 | ) | ||||||||||
Total dividends and distributions | (1.37 | ) | (2.76 | ) | (2.89 | ) | (1.56 | ) | (1.52 | ) | ||||||||||
Net asset value, end of year | $14.82 | $16.43 | $21.52 | $21.68 | $19.78 | |||||||||||||||
Total Return(b): | (2.16 | )% | (9.86 | )% | 13.74 | % | 18.11 | % | 12.49 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $30,153 | $58,051 | $137,027 | $124,480 | $102,564 | |||||||||||||||
Average net assets (000) | $40,142 | $101,530 | $131,155 | $115,507 | $123,372 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.84 | % | 0.80 | % | 0.76 | % | 0.79 | % | 0.77 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.84 | % | 0.80 | % | 0.76 | % | 0.79 | % | 0.77 | % | ||||||||||
Net investment income (loss) | 1.15 | % | 1.20 | % | 0.99 | % | 0.70 | % | 1.06 | % | ||||||||||
Portfolio turnover rate(e) | 128 | % | 47 | % | 59 | % | 49 | % | 59 | % |
(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 generally accepted accounting principles. |
(c) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
42 |
Class R6 Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $16.39 | $21.53 | $21.70 | $19.80 | $19.09 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.18 | 0.22 | 0.22 | 0.17 | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.41 | ) | (2.59 | ) | 2.52 | 3.31 | 2.03 | |||||||||||||
Total from investment operations | (0.23 | ) | (2.37 | ) | 2.74 | 3.48 | 2.26 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.15 | ) | (0.27 | ) | (0.23 | ) | (0.22 | ) | ||||||||||
Distributions from net realized gains | (1.19 | ) | (2.62 | ) | (2.64 | ) | (1.35 | ) | (1.33 | ) | ||||||||||
Total dividends and distributions | (1.37 | ) | (2.77 | ) | (2.91 | ) | (1.58 | ) | (1.55 | ) | ||||||||||
Net asset value, end of year | $14.79 | $16.39 | $21.53 | $21.70 | $19.80 | |||||||||||||||
Total Return(b): | (2.17 | )% | (10.08 | )% | 13.80 | % | 18.21 | % | 12.61 | % | ||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $1,151 | $1,332 | $18,870 | $17,438 | $16,766 | |||||||||||||||
Average net assets (000) | $1,210 | $12,474 | $18,366 | $16,981 | $16,698 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.84 | % | 0.78 | % | 0.72 | % | 0.66 | % | 0.66 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.83 | % | 0.78 | % | 0.72 | % | 0.66 | % | 0.66 | % | ||||||||||
Net investment income (loss) | 1.17 | % | 1.26 | % | 1.04 | % | 0.81 | % | 1.20 | % | ||||||||||
Portfolio turnover rate(e) | 128 | % | 47 | % | 59 | % | 49 | % | 59 | % |
(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 generally accepted accounting principles. |
(c) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Focused Value Fund | 43 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Prudential Investment Portfolios, Inc. and Shareholders of PGIM Jennison Focused Value Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison Focused Value Fund (one of the funds constituting The Prudential Investment Portfolios, Inc., referred to hereafter as the “Fund”) as of September 30, 2020, and the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year ended September 30, 2020 (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 September 30, 2020, and the results of its operations, changes in its net assets, and the financial highlights for the year ended September 30, 2020 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 September 30, 2019 and the financial highlights for each of the periods ended on or prior to September 30, 2019 (not presented herein, other than the statement of changes in net assets and the financial highlights) were audited by other auditors whose report dated November 15, 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 audit. 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 audit 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 audit 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 audit 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 September 30, 2020 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 audit provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
November 17, 2020
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
44 |
Series Liquidity Risk Management Program (unaudited)
Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Series has adopted and implemented a liquidity risk management program (the “LRMP”). The Series’ LRMP seeks to assess and manage the Series’ liquidity risk, which is defined as the risk that the Series is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Series. The Company’s Board of Directors (the “Board”) has approved PGIM Investments LLC (“PGIM Investments”), the Series’ investment manager, to serve as the administrator of the Series’ LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.
The Series’ LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Series’ LRMP includes no less than annual assessments of factors that influence the Series’ liquidity risk; no less than monthly classifications of the Series’ investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Series’ assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Series does not invest primarily in highly liquid investments; and regular reporting to the Board.
At a meeting of the Board on March 3-5, 2020, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Series’ LRMP, including any material changes to the LRMP for the period from the inception of the Series’ LRMP on December 1, 2018 through December 31, 2019 (“Reporting Period”). The LRMP Report concluded that the Series’ LRMP was reasonably designed to assess and manage the Series’ liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Series’ investment strategies continue to be appropriate given the Series’ status as an open-end fund.
There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Series, including liquidity risks presented by the Series’ investment portfolio, is found in the Series’ Prospectus and Statement of Additional Information.
PGIM Jennison Focused Value Fund | 45 |
Tax Information (unaudited)
We are advising you that during the fiscal year ended September 30, 2020, the Series reported the maximum amount allowed per share, but not less than $1.19 for Class A, B, C, R, Z, and R6 shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.
For the year ended September 30, 2020, the Series reports in the maximum amount allowable under Section 854 of the Internal Revenue Code, but not less than, the following percentages of the ordinary income distributions paid as 1) qualified dividend income (QDI), and 2) eligible for corporate dividends received deduction (DRD):
QDI | DRD | |||||||
PGIM Jennison Focused Value Fund | 100.00 | % | 100.00 | % |
In January 2021, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the federal tax status of distributions received by you in calendar year 2020.
46 |
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: 95 | President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 95 | Retired; 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; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). | Since July 2008 |
PGIM Jennison Focused Value 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: 95 | 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). | Director of Anixter International, Inc. (communication products distributor) (since January 2006–June 2020); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 94 | 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 U.S. | 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: 95 | Executive Committee of the IDC Board of Governors (since October 2019); Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); 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); 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: 94 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); 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, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (June 2018-October 2020) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Michael S. Hyland, CFA 1945 Board Member Portfolios Overseen: 95 | Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). | None. | Since July 2008 | |||
Brian K. Reid 1961 Board Member Portfolios Overseen: 94 | 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); Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison Focused Value 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: 94 | 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. | Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. | Since November 2014 |
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: 96 | President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). | None. | Since January 2012 |
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 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 96 | Executive Vice President (since June 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); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
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 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 Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Dino Capasso 1974 Chief Compliance Officer | Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. | Since March 2018 |
PGIM Jennison Focused Value Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018 - present) of PGIM Investments LLC; 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 | ||
Diana N. Huffman 1982 Assistant Secretary | Vice President and Corporate Counsel (since September 2015) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). | Since March 2019 | ||
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; 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; and Corporate Counsel (2012 – 2017) of IIL, Inc. | Since June 2020 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). | Since March 2015 | ||
Christian J. Kelly 1975 Treasurer and Principal Financial and Accounting Officer | Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); 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 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. | Since April 2014 | ||
Russ Shupak 1973 Assistant Treasurer | Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration. | Since October 2019 |
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 | ||
Charles H. Smith 1973 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007-December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998-January 2007). | Since January 2017 |
(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. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., 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. |
PGIM Jennison Focused Value Fund
Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Jennison Focused Value Fund, formerly PGIM Jennison Equity Opportunity Fund (the “Fund”)1 consists of eleven individuals, nine 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 four standing committees: the Audit Committee, the Nominating and Governance 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 27, 2020 and on June 9-11, 2020 and approved the renewal of the agreements through July 31, 2021, 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
1 | PGIM Jennison Focused Value Fund is a series of The Prudential Investment Portfolios, Inc. |
PGIM Jennison Focused Value Fund |
Approval of Advisory Agreements (continued)
meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on May 27, 2020 and on June 9-11, 2020.
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 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 the Jennison portfolio managers who are responsible for the day-to-day management of the Fund’s
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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 PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to each of 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.
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.
PGIM Jennison Focused Value 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 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), 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 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 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-, five- and ten-year periods ended December 31, 2019.
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 September 30, 2019. 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).
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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 | 4th Quartile | 4th Quartile | |||||
Actual Management Fees: 2nd Quartile | ||||||||
Net Total Expenses: 2nd Quartile |
• | The Board noted that the Fund underperformed its benchmark index over all periods. |
• | In December 2019, the Fund’s investment approach transitioned from blend to a focused large-cap value strategy, and the benchmark changed from the S&P 500 Index to the Russell 1000 Value Index. The Board considered the Fund’s performance history as of December 31, 2019 does not reflect its current investment mandate. |
• | The Board considered that the Fund outperformed its benchmark and Peer Group for the first quarter of 2020. |
• | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap, which (exclusive of certain fees and expenses) caps transfer agency, shareholder servicing, sub-transfer agency and blue sky fees to the extent that such fees cause annual fund operating expenses to exceed 1.53% for Class R shares through January 31, 2021. |
• | 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 Focused Value Fund |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (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 • Michael S. Hyland • Stuart S. Parker • Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer • Claudia DiGiacomo, Chief Legal Officer • Dino Capasso, Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Andrew R. French, Secretary • Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary • Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary • Lana Lomuti, Assistant Treasurer • Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer • Deborah Conway, 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 9658 Providence, RI 02940 | ||
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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 |
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 Focused Value 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 FOCUSED VALUE FUND
SHARE CLASS | A | C | R | Z | R6 | |||||
NASDAQ | PJIAX | PJGCX | PJORX | PJGZX | PJOQX | |||||
CUSIP | 74437E503 | 74437E701 | 74437E644 | 74437E800 | 74437E552 |
MF172E
PGIM JENNISON GROWTH FUND
ANNUAL REPORT
SEPTEMBER 30, 2020
COMING SOON: PAPERLESS SHAREHOLDER REPORTS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (pgim.com/investments), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-225-1852 or by sending an email request to PGIM Investments at shareholderreports@pgim.com.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1-800-225-1852 or send an email request to shareholderreports@pgim.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Fund.
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. © 2020 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.
Effective June 26, 2020, all of the issued and outstanding Class B shares of the Fund converted into Class A shares.
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Dear Shareholder:
We hope you find the annual report for the PGIM Jennison Growth Fund informative and useful. The report covers performance for the 12-month period that ended September 30, 2020.
During the first half of the period, the global economy remained healthy—particularly in the US—fueled by rising corporate profits and strong job growth. The outlook changed dramatically in March as the coronavirus outbreak quickly and substantially shut down economic activity worldwide, leading to significant job losses and a steep decline in global growth and earnings. Responding to this disruption, the Federal Reserve (the Fed) cut the federal funds rate target to near zero and flooded capital markets with liquidity; and Congress passed stimulus bills worth approximately $3 trillion that offered an economic lifeline to consumers and businesses.
While stocks climbed throughout the first half of the period, they fell significantly in March amid a spike in volatility, ending the 11-year-long equity bull market. With stores and factories closing and consumers staying at home to limit the spread of the virus, investors sold stocks on fears that corporate earnings would take a serious hit. As states reopened their economies in the spring and summer, a strong equity market rally helped stocks around the globe post gains during the period.
The bond market overall—including US and global bonds as well as emerging market debt—rose during the period as investors sought safety in fixed income. A significant rally in interest rates pushed the 10-year US Treasury yield down to a record low. In March, the Fed took several aggressive actions to keep the bond markets running smoothly, restarting many of the relief programs that proved to be successful in helping end the global financial crisis in 2008-09.
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 consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This scale and investment expertise allow us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Growth Fund
November 16, 2020
PGIM Jennison Growth 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 9/30/20 | ||||||||||||||||
One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | |||||||||||||
Class A | ||||||||||||||||
(with sales charges) | 46.78 | 19.97 | 17.31 | — | ||||||||||||
(without sales charges) | 55.32 | 21.34 | 17.98 | — | ||||||||||||
Class C | ||||||||||||||||
(with sales charges) | 53.27 | 20.52 | 17.16 | — | ||||||||||||
(without sales charges) | 54.27 | 20.52 | 17.16 | — | ||||||||||||
Class R | ||||||||||||||||
(without sales charges) | 54.99 | 21.09 | 17.75 | — | ||||||||||||
Class Z | ||||||||||||||||
(without sales charges) | 55.83 | 21.72 | 18.34 | — | ||||||||||||
Class R2 | ||||||||||||||||
(without sales charges) | 55.19 | N/A | N/A | 22.98 (11/28/17) | ||||||||||||
Class R4 | ||||||||||||||||
(without sales charges) | 55.59 | N/A | N/A | 23.30 (11/28/17) | ||||||||||||
Class R6 | ||||||||||||||||
(without sales charges) | 55.98 | N/A | N/A | 25.60 (9/27/17) | ||||||||||||
Russell 1000 Growth Index |
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37.53 | 20.10 | 17.25 | — | |||||||||||||
S&P 500 Index |
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15.14 | 14.14 | 13.73 | — | |||||||||||||
Average Annual Total Returns as of 9/30/20 Since Inception (%) | ||||||||||||||||
Class R2 (11/28/17) | Class R4 (11/28/17) | Class R6 (9/27/17) | ||||||||||||||
Russell 1000 Growth Index |
| 20.17 | 20.17 | 21.67 | ||||||||||||
S&P 500 Index |
| 10.94 | 10.94 | 12.27 |
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’ 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 Russell 1000 Growth Index and the S&P 500 Index by portraying the initial account values at the beginning of the 10-year period (September 30, 2010) and the account values at the end of the current fiscal year (September 30, 2020) 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 reimbursement, if any, the Fund’s 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 Growth 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% | 1.00% | 0.75% (0.50% currently) | None | 0.25% | None | None | |||||||
Shareholder service fees | None | None | None | None | 0.10%* | 0.10%* | None |
*Shareholder service fee reflects maximum allowable fees under a shareholder services plan.
Benchmark Definitions
Russell 1000 Growth Index—The Russell 1000 Growth Index is an unmanaged index which contains those securities in the Russell 1000 Growth Index with an above-average growth orientation. Companies in this index tend to exhibit higher price-to-book ratios and price-to-earnings ratios, lower dividend yields, and higher forecasted growth rates.
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 stock prices in the United States have performed.
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 9/30/20
Ten Largest Holdings | Line of Business | % of Net Assets | ||
Amazon.com, Inc. | Internet & Direct Marketing Retail | 8.1% | ||
Tesla, Inc. | Automobiles | 6.9% | ||
Apple, Inc. | Technology Hardware, Storage & Peripherals | 6.3% | ||
Microsoft Corp. | Software | 5.0% | ||
Facebook, Inc., (Class A Stock) | Interactive Media & Services | 4.3% | ||
NVIDIA Corp. | Semiconductors & Semiconductor Equipment | 4.2% | ||
Netflix, Inc. | Entertainment | 3.4% | ||
Visa, Inc., (Class A Stock) | IT Services | 3.1% | ||
salesforce.com, Inc. | Software | 2.9% | ||
Adobe, Inc. | Software | 2.8% |
Holdings reflect only long-term Investments and are subject to change.
PGIM Jennison Growth Fund | 7 |
Strategy and Performance Overview
How did the Fund perform?
The PGIM Jennison Growth Fund’s Class Z shares returned 55.83% in the 12-month reporting period that ended September 30, 2020, outperforming the 37.53% return of the Russell 1000 Growth Index (the Index).
What were the market conditions?
• | Markets were extremely volatile in the period, unsettled by US-China trade discord and the COVID-19 pandemic. Stocks peaked in February 2020, then dropped dramatically in March as the viral outbreak spread around the globe, disrupting markets and life everywhere. |
• | The realities of COVID-19 dictated daily conduct for individuals, businesses, and governments around the world. Shelter-in-place rules and work-from-home policies became standard. Global infection and mortality rates reflected varying policy and social behaviors, with the US logging the highest number of infections and deaths. Human and capital resources were deployed in an overwhelming global effort to develop a vaccine. |
• | Markets rebounded rapidly in the period’s final months, but the pandemic’s economic damage accumulated. The effects of US fiscal stimulus—trillions of dollars disbursed through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program—blunted the pandemic’s negative effect on US employment and spending. The Federal Reserve’s comprehensive monetary policy initiatives to bolster liquidity and stabilize asset prices contributed to record-low interest rates. |
What worked?
• | Stock selection and sector weights benefited the Fund’s performance relative to the Index across every sector during the reporting period. Holdings in consumer discretionary, information technology, and communication services—the Fund’s three biggest sectors—strongly contributed to outperformance, as both stock selection and overweights in these sectors were beneficial. |
• | In consumer discretionary: |
• | Tesla Inc. surged on impressive financial results made possible by solid production, increased capacity, and strong execution. The company’s technology, scale, and low-cost advantage make it not only the breakaway leader in the electric-vehicle market but also position it to disrupt the automotive industry. |
• | Consumer businesses that have migrated to digital, direct-to-consumer business models were notably strong performers. Amazon.com Inc.’s relevance and dominance in this area became more apparent during the period. The online retailer and cloud-computing giant continues to benefit from economies of scale and its platform-based |
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business model, while strengthening its competitive edge through reinvestment. Amazon Web Services, its cloud-platform business, significantly drove revenue and profit. |
• | Apparel retailer Lululemon Athletica Inc. benefited from its less-seasonal offerings, strong brand, and direct-to-consumer infrastructure that shields it from wholesale distribution backlogs and higher price discounting. |
• | In information technology: |
• | As key facilitators of e-commerce, digital payments processors were strong performers for the Fund. |
• | Adyen NV has developed a single, dynamic, reliable, and secure payment platform that supports omni-channel e-commerce with end-to-end gateway, risk management, and processing services. |
• | PayPal Holdings Inc. is the largest e-commerce payments enabler in the US and many developing countries. Jennison believes it can continue to deepen and extend its services among global, consumer, and business clients. |
• | Recognition of the importance of digital commerce as the pandemic restricted personal mobility benefited Shopify Inc., which provides cloud-based, easy-to-use infrastructure tools to enable omni-channel e-commerce capability. |
• | With millions of people working from home, the advantage of housing mission-critical software applications and services on the cloud is now essential. |
• | In addition to a strong and stable enterprise business, Microsoft Corp. has a differentiated hybrid cloud strategy that is increasing its share of technology capital spending. Its Azure cloud business hosts Microsoft software and hundreds of cloud-native applications created by the company’s customers or third parties. Microsoft’s Teams collaboration platform also benefited as workers shifted from the office to working from home. |
• | Adobe Inc.’s content creation and digital marketing applications and services continued to transform businesses operations. |
• | Salesforce.com Inc. remains an industry leader in migrating traditional customer records systems to comprehensive customer intelligence systems. Despite unpredictable macroeconomic trends, enterprises are concluding that the financial benefits delivered by Salesforce more than offset the capital outlay required for software purchase and deployment. |
PGIM Jennison Growth Fund | 9 |
Strategy and Performance Overview (continued)
• | Higher demand for cloud storage led to robust data-center spending by chipmaker Nvidia Corp.’s largest customers. Nvidia recently acquired chip designer Mellanox Technologies Ltd. in a move to enhance its functionality and potentially increase its share of the data-center space. |
• | With its huge installed base, computer and smartphone manufacturer Apple Inc. has benefited from rapid growth in service business subscriptions, a key source of recurring revenue. The company’s upcoming product cycle should provide robust revenue and profit growth, in Jennison’s view. |
• | In communication services, Netflix Inc. continues to enhance its long-term competitive position with the industry’s largest investment in exclusive and original content. Given its still-low global penetration and the accelerating shift away from watching television programs when they are broadcast, Netflix has significant room for growth. The company’s secular growth profile looks even stronger in the current environment, as social distancing and shelter-in-place directives are drawing renewed attention to the value, utility, and resilience of video-streaming business models. |
What didn’t work?
• | In industrials: |
• | The longer-than-anticipated grounding and recertification of Boeing Co.’s 737 Max jet weighed on the company’s shares during the reporting period. With the COVID-19 outbreak severely restricting air travel and compromising the financial health of all airlines, the position in Boeing was eliminated. |
• | The Fund’s position in French aerospace supplier Safran SA was closed based on the company’s exposure to the ailing airline industry. Most of Safran’s revenue is generated by its aerospace propulsion business, which includes a joint venture with aircraft engine giant General Electric. |
• | In consumer discretionary, the position in Adidas AG was eliminated based on the German sportswear company’s softer-than-expected gross margin, COVID-19-related sporting event cancellations, and an anticipated backup in wholesale inventories. |
• | In information technology, the Fund eliminated its position in FleetCor Technologies Inc., a provider of charge cards and payment-processing services to commercial and government trucking fleets, based on litigation related to the company’s marketing and fee practices, as well as on exposure to oil prices. |
• | In health care, the position in Sage Therapeutics Inc. was closed as a Phase 3 clinical trial of its key developmental therapy to treat major depression fell short of its goal. |
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Current outlook
• | The US economy continues to recover from the worst effects of the pandemic, but the pace of the rebound appears to be moderating. By the end of the reporting period, Congress had failed to agree on additional stimulus to take up the slack from the massive, but now largely exhausted, programs approved in March. Further job reductions at large companies, particularly where the effects of COVID-19 have created the most disruption, are an additional headwind. The uneven pace of reopening state economies and businesses heightens the need for further government action, in Jennison’s view. |
• | Corporate profit recovery is set to continue, aided by reduced labor and travel costs that further expand profit margin opportunities. However, Jennison believes the outlook overall remains uncertain, not least because of uncertainty over the November US presidential election and the pandemic’s ongoing impact. |
• | COVID-19 continues to disrupt activity around the globe. Jennison is optimistic that promising results from a number of clinical trials will result in an effective vaccine in the coming months, but it may be another 12 to 18 months before an approved product—the likely prerequisite for a broad-based recovery in confidence and activity—is globally available. Sectors whose share prices and operating fundamentals have been disproportionately hit by the disease will likely experience a relief rally once distribution of a vaccine begins, but a return to pre-COVID-19 operating rates will probably not transpire for some time thereafter. |
• | Investors have demonstrated a preference for businesses that were thriving before the COVID-19 outbreak and that have benefited from pandemic-related tailwinds and enhanced competitive positions. The Fund holds many companies across the technology, consumer, and communications services industries in this category. Prospects for their continued growth at above-average rates remain strong, in Jennison’s view. |
PGIM Jennison Growth Fund | 11 |
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 September 30, 2020. The example is for illustrative purposes only; you should consult the Fund’s 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
12 | Visit our website at pgim.com/investments |
and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information 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 Growth Fund | Beginning Account Value | Ending Account Value September 30, 2020 | Annualized Expense Ratio | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,571.10 | 0.99 | % | $ | 6.36 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.05 | 0.99 | % | $ | 5.00 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,565.70 | 1.66 | % | $ | 10.65 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.70 | 1.66 | % | $ | 8.37 | ||||||||||
Class R | Actual | $ | 1,000.00 | $ | 1,569.70 | 1.20 | % | $ | 7.71 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.00 | 1.20 | % | $ | 6.06 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,573.70 | 0.68 | % | $ | 4.38 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.60 | 0.68 | % | $ | 3.44 | ||||||||||
Class R2 | Actual | $ | 1,000.00 | $ | 1,570.40 | 1.10 | % | $ | 7.07 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.50 | 1.10 | % | $ | 5.55 | ||||||||||
Class R4 | Actual | $ | 1,000.00 | $ | 1,572.50 | 0.85 | % | $ | 5.47 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.75 | 0.85 | % | $ | 4.29 | ||||||||||
Class R6 | Actual | $ | 1,000.00 | $ | 1,574.80 | 0.58 | % | $ | 3.73 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,022.10 | 0.58 | % | $ | 2.93 |
*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 183 days in the six-month period ended September 30, 2020, and divided by the 366 days in the Fund’s fiscal year ended September 30, 2020 (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 Jennison Growth Fund | 13 |
Schedule of Investments
as of September 30, 2020
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.5% | ||||||||
COMMON STOCKS | ||||||||
Automobiles 6.9% | ||||||||
| ||||||||
Tesla, Inc.*(a) | 1,139,800 | $ | 488,985,598 | |||||
Biotechnology 1.2% | ||||||||
| ||||||||
Sarepta Therapeutics, Inc.*(a) | 147,114 | 20,659,219 | ||||||
Vertex Pharmaceuticals, Inc.* | 225,715 | 61,421,566 | ||||||
|
| |||||||
82,080,785 | ||||||||
Capital Markets 1.9% | ||||||||
| ||||||||
Goldman Sachs Group, Inc. (The) | 274,886 | 55,243,839 | ||||||
S&P Global, Inc. | 224,855 | 81,082,713 | ||||||
|
| |||||||
136,326,552 | ||||||||
Entertainment 4.3% | ||||||||
| ||||||||
Netflix, Inc.* | 485,976 | 243,002,579 | ||||||
Spotify Technology SA* | 259,240 | 62,883,847 | ||||||
|
| |||||||
305,886,426 | ||||||||
Equity Real Estate Investment Trusts (REITs) 0.5% | ||||||||
| ||||||||
American Tower Corp. | 150,759 | 36,442,973 | ||||||
Food & Staples Retailing 1.5% | ||||||||
| ||||||||
Costco Wholesale Corp. | 291,579 | 103,510,545 | ||||||
Health Care Equipment & Supplies 1.9% | ||||||||
| ||||||||
Danaher Corp. | 186,643 | 40,189,837 | ||||||
DexCom, Inc.* | 153,904 | 63,443,846 | ||||||
Intuitive Surgical, Inc.* | 39,179 | 27,799,068 | ||||||
|
| |||||||
131,432,751 | ||||||||
Health Care Providers & Services 1.2% | ||||||||
| ||||||||
Guardant Health, Inc.*(a) | 222,494 | 24,870,379 | ||||||
Humana, Inc. | 136,220 | 56,380,096 | ||||||
|
| |||||||
81,250,475 | ||||||||
Health Care Technology 1.1% | ||||||||
| ||||||||
Teladoc Health, Inc.*(a) | 355,050 | 77,841,162 |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 15 |
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Hotels, Restaurants & Leisure 1.4% | ||||||||
| ||||||||
Chipotle Mexican Grill, Inc.* | 78,089 | $ | 97,120,070 | |||||
Interactive Media & Services 10.2% | ||||||||
| ||||||||
Alphabet, Inc. (Class A Stock)* | 82,826 | 121,389,786 | ||||||
Alphabet, Inc. (Class C Stock)* | 82,503 | 121,246,409 | ||||||
Facebook, Inc. (Class A Stock)* | 1,158,464 | 303,401,721 | ||||||
Match Group, Inc.*(a) | 937,933 | 103,782,286 | ||||||
Tencent Holdings Ltd. (China) | 1,021,884 | 68,901,326 | ||||||
|
| |||||||
718,721,528 | ||||||||
Internet & Direct Marketing Retail 9.7% | ||||||||
| ||||||||
Alibaba Group Holding Ltd. (China), ADR* | 262,841 | 77,269,997 | ||||||
Amazon.com, Inc.* | 182,359 | 574,199,254 | ||||||
Wayfair, Inc. (Class A Stock)*(a) | 118,737 | 34,553,655 | ||||||
|
| |||||||
686,022,906 | ||||||||
IT Services 14.3% | ||||||||
| ||||||||
Adyen NV (Netherlands), 144A* | 83,595 | 154,008,456 | ||||||
Mastercard, Inc. (Class A Stock) | 533,647 | 180,463,406 | ||||||
PayPal Holdings, Inc.* | 785,581 | 154,783,024 | ||||||
Shopify, Inc. (Canada) (Class A Stock)* | 171,319 | 175,254,198 | ||||||
Twilio, Inc. (Class A Stock)*(a) | 501,368 | 123,883,019 | ||||||
Visa, Inc. (Class A Stock)(a) | 1,102,501 | 220,467,125 | ||||||
|
| |||||||
1,008,859,228 | ||||||||
Leisure Products 0.7% | ||||||||
| ||||||||
Peloton Interactive, Inc. (Class A Stock)* | 516,535 | 51,260,933 | ||||||
Personal Products 1.2% | ||||||||
| ||||||||
Estee Lauder Cos., Inc. (The) (Class A Stock) | 389,576 | 85,024,962 | ||||||
Pharmaceuticals 1.9% | ||||||||
| ||||||||
AstraZeneca PLC (United Kingdom), ADR(a) | 1,776,834 | 97,370,503 | ||||||
Eli Lilly & Co. | 239,573 | 35,461,596 | ||||||
|
| |||||||
132,832,099 | ||||||||
Road & Rail 2.5% | ||||||||
| ||||||||
Uber Technologies, Inc.* | 2,596,102 | 94,705,801 | ||||||
Union Pacific Corp. | 411,452 | 81,002,555 | ||||||
|
| |||||||
175,708,356 |
See Notes to Financial Statements.
16 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Semiconductors & Semiconductor Equipment 4.2% | ||||||||
| ||||||||
NVIDIA Corp. | 551,212 | $ | 298,326,959 | |||||
Software 18.6% | ||||||||
| ||||||||
Adobe, Inc.* | 399,025 | 195,693,831 | ||||||
Atlassian Corp. PLC (Class A Stock)*(a) | 378,418 | 68,792,608 | ||||||
Coupa Software, Inc.*(a) | 255,841 | 70,161,836 | ||||||
Crowdstrike Holdings, Inc. (Class A Stock)*(a) | 512,831 | 70,421,953 | ||||||
Microsoft Corp. | 1,676,956 | 352,714,155 | ||||||
RingCentral, Inc. (Class A Stock)* | 247,201 | 67,883,867 | ||||||
salesforce.com, Inc.* | 807,447 | 202,927,580 | ||||||
ServiceNow, Inc.* | 133,552 | 64,772,720 | ||||||
Splunk, Inc.*(a) | 422,645 | 79,512,204 | ||||||
Trade Desk, Inc. (The) (Class A Stock)*(a) | 124,062 | 64,360,884 | ||||||
Workday, Inc. (Class A Stock)* | 353,733 | 76,098,580 | ||||||
|
| |||||||
1,313,340,218 | ||||||||
Specialty Retail 2.3% | ||||||||
| ||||||||
Carvana Co.*(a) | 286,617 | 63,932,788 | ||||||
Home Depot, Inc. (The) | 360,956 | 100,241,091 | ||||||
|
| |||||||
164,173,879 | ||||||||
Technology Hardware, Storage & Peripherals 6.3% | ||||||||
| ||||||||
Apple, Inc. | 3,854,788 | 446,422,998 | ||||||
Textiles, Apparel & Luxury Goods 5.7% | ||||||||
| ||||||||
Kering SA (France) | 145,364 | 96,460,227 | ||||||
Lululemon Athletica, Inc.* | 397,549 | 130,940,714 | ||||||
LVMH Moet Hennessy Louis Vuitton SE (France) | 96,107 | 44,942,802 | ||||||
NIKE, Inc. (Class B Stock) | 998,457 | 125,346,292 | ||||||
|
| |||||||
397,690,035 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 7,019,261,438 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 15.1% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
PGIM Core Ultra Short Bond Fund(w) | 10,045,805 | 10,045,805 |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 17 |
Schedule of Investments (continued)
as of September 30, 2020
Description | Shares | Value | ||||||
AFFILIATED MUTUAL FUNDS (Continued) | ||||||||
PGIM Institutional Money Market Fund | 1,051,544,853 | $ | 1,051,334,544 | |||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 1,061,380,349 | |||||||
|
| |||||||
TOTAL INVESTMENTS 114.6% | 8,080,641,787 | |||||||
Liabilities in excess of other assets (14.6)% | (1,027,607,778 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 7,053,034,009 | ||||||
|
|
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
LIBOR—London Interbank Offered Rate
REITs—Real Estate Investment Trust
* | 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 $1,043,761,583; cash collateral of $1,050,675,951 (included in liabilities) was received with which the Series 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 Series 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. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
Fair Value Measurements:
Various inputs are used in determining the value of the Series’ 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.
See Notes to Financial Statements.
18 |
The following is a summary of the inputs used as of September 30, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||
Investments in Securities | ||||||||||
Assets | ||||||||||
Common Stocks | ||||||||||
Automobiles | $ | 488,985,598 | $ | — | $— | |||||
Biotechnology | 82,080,785 | — | — | |||||||
Capital Markets | 136,326,552 | — | — | |||||||
Entertainment | 305,886,426 | — | — | |||||||
Equity Real Estate Investment Trusts (REITs) | 36,442,973 | — | — | |||||||
Food & Staples Retailing | 103,510,545 | — | — | |||||||
Health Care Equipment & Supplies | 131,432,751 | — | — | |||||||
Health Care Providers & Services | 81,250,475 | — | — | |||||||
Health Care Technology | 77,841,162 | — | — | |||||||
Hotels, Restaurants & Leisure | 97,120,070 | — | — | |||||||
Interactive Media & Services | 649,820,202 | 68,901,326 | — | |||||||
Internet & Direct Marketing Retail | 686,022,906 | — | — | |||||||
IT Services | 854,850,772 | 154,008,456 | — | |||||||
Leisure Products | 51,260,933 | — | — | |||||||
Personal Products | 85,024,962 | — | — | |||||||
Pharmaceuticals | 132,832,099 | — | — | |||||||
Road & Rail | 175,708,356 | — | — | |||||||
Semiconductors & Semiconductor Equipment | 298,326,959 | — | — | |||||||
Software | 1,313,340,218 | — | — | |||||||
Specialty Retail | 164,173,879 | — | — | |||||||
Technology Hardware, Storage & Peripherals | 446,422,998 | — | — | |||||||
Textiles, Apparel & Luxury Goods | 256,287,006 | 141,403,029 | — | |||||||
Affiliated Mutual Funds | 1,061,380,349 | — | — | |||||||
|
|
|
|
| ||||||
Total | $ | 7,716,328,976 | $ | 364,312,811 | $— | |||||
|
|
|
|
|
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of September 30, 2020 were as follows (unaudited):
Software | 18.6 | % | ||
Affiliated Mutual Funds (14.9% represents investments purchased with collateral from securities on loan) | 15.1 | |||
IT Services | 14.3 | |||
Interactive Media & Services | 10.2 | |||
Internet & Direct Marketing Retail | 9.7 | |||
Automobiles | 6.9 | |||
Technology Hardware, Storage & Peripherals | 6.3 | |||
Textiles, Apparel & Luxury Goods | 5.7 | |||
Entertainment | 4.3 | |||
Semiconductors & Semiconductor Equipment | 4.2 |
Road & Rail | 2.5 | % | ||
Specialty Retail | 2.3 | |||
Capital Markets | 1.9 | |||
Pharmaceuticals | 1.9 | |||
Health Care Equipment & Supplies | 1.9 | |||
Food & Staples Retailing | 1.5 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Personal Products | 1.2 | |||
Biotechnology | 1.2 | |||
Health Care Providers & Services | 1.2 | |||
Health Care Technology | 1.1 | |||
Leisure Products | 0.7 |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 19 |
Schedule of Investments (continued)
as of September 30, 2020
Industry Classification (continued):
Equity Real Estate Investment Trusts (REITs) | 0.5 | % | ||
|
| |||
114.6 | ||||
Liabilities in excess of other assets | (14.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series 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:
Gross Market | |||||||||||||||
Value of | |||||||||||||||
Recognized | Collateral | Net | |||||||||||||
Description | Assets/(Liabilities) | Pledged/(Received)(1) | Amount | ||||||||||||
Securities on Loan | $ | 1,043,761,583 | $ | (1,043,761,583 | ) | $ | — | ||||||||
|
|
|
|
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
20 |
Statement of Assets and Liabilities
as of September 30, 2020
Assets | ||||
Investments at value, including securities on loan of $1,043,761,583: | ||||
Unaffiliated investments (cost $2,576,741,272) | $ | 7,019,261,438 | ||
Affiliated investments (cost $1,060,946,330) | 1,061,380,349 | |||
Receivable for investments sold | 54,218,985 | |||
Receivable for Series shares sold | 5,704,696 | |||
Tax reclaim receivable | 732,813 | |||
Dividends receivable | 472,929 | |||
Prepaid expenses | 46,032 | |||
|
| |||
Total Assets | 8,141,817,242 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 1,050,675,951 | |||
Payable for investments purchased | 20,182,616 | |||
Payable for Series shares reacquired | 12,508,867 | |||
Management fee payable | 3,206,845 | |||
Accrued expenses and other liabilities | 1,168,272 | |||
Distribution fee payable | 701,566 | |||
Affiliated transfer agent fee payable | 338,758 | |||
Affiliated shareholder servicing fees payable | 358 | |||
|
| |||
Total Liabilities | 1,088,783,233 | |||
|
| |||
Net Assets | $ | 7,053,034,009 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 117,731 | ||
Paid-in capital in excess of par | 2,057,804,295 | |||
Total distributable earnings (loss) | 4,995,111,983 | |||
|
| |||
Net assets, September 30, 2020 | $ | 7,053,034,009 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 21 |
Statement of Assets and Liabilities
as of September 30, 2020
Class A | ||||||
Net asset value and redemption price per share, | $ | 57.22 | ||||
Maximum sales charge (5.50% of offering price) | 3.33 | |||||
|
| |||||
Maximum offering price to public | $ | 60.55 | ||||
|
| |||||
Class C | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($165,723,884 ÷ 3,799,258 shares of common stock issued and outstanding) | $ | 43.62 | ||||
|
| |||||
Class R | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($300,322,827 ÷ 6,130,616 shares of common stock issued and outstanding) | $ | 48.99 | ||||
|
| |||||
Class Z | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($4,149,643,100 ÷ 66,176,875 shares of common stock issued and outstanding) | $ | 62.71 | ||||
|
| |||||
Class R2 | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($4,533,822 ÷ 73,133 shares of common stock issued and outstanding) | $ | 61.99 | ||||
|
| |||||
Class R4 | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($6,840,055 ÷ 109,471 shares of common stock issued and outstanding) | $ | 62.48 | ||||
|
| |||||
Class R6 | ||||||
Net asset value, offering price and redemption price per share, | ||||||
($609,442,921 ÷ 9,693,090 shares of common stock issued and outstanding) | $ | 62.87 | ||||
|
|
See Notes to Financial Statements.
22 |
Statement of Operations
Year Ended September 30, 2020
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of $187,607 foreign withholding tax) | $ | 29,258,630 | ||
Income from securities lending, net (including affiliated income of $1,658,516) | 1,952,563 | |||
Affiliated dividend income | 157,478 | |||
|
| |||
Total income | 31,368,671 | |||
|
| |||
Expenses | ||||
Management fee | 32,432,897 | |||
Distribution fee(a) | 7,869,494 | |||
Shareholder servicing fees (including affiliated expense of $3,397)(a) | 8,546 | |||
Transfer agent’s fees and expenses (including affiliated expense of $2,008,950)(a) | 6,046,450 | |||
Custodian and accounting fees | 421,902 | |||
Shareholders’ reports | 182,925 | |||
Registration fees(a) | 153,566 | |||
Directors’ fees | 96,280 | |||
Legal fees and expenses | 46,577 | |||
Audit fee | 24,354 | |||
Miscellaneous | 143,803 | |||
|
| |||
Total expenses | 47,426,794 | |||
Less: Fee waiver and/or expense reimbursement(a) | (61,194 | ) | ||
Distribution fee waiver(a) | (696,753 | ) | ||
|
| |||
Net expenses | 46,668,847 | |||
|
| |||
Net investment income (loss) | (15,300,176 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(395,025)) | 663,100,903 | |||
Foreign currency transactions | 133,071 | |||
|
| |||
663,233,974 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $417,047) | 1,969,714,990 | |||
Foreign currencies | 55,775 | |||
|
| |||
1,969,770,765 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 2,633,004,739 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 2,617,704,563 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 23 |
Statement of Operations
Year Ended September 30, 2020
(a) | Class specific expenses and waivers were as follows: |
Class A | Class B | Class C | Class R | Class Z | Class R2 | Class R4 | Class R6 | |||||||||||||||||||||||||
Distribution fee | 4,364,622 | 49,773 | 1,355,681 | 2,090,260 | — | 9,158 | — | — | ||||||||||||||||||||||||
Shareholder servicing fees | — | — | — | — | — | 3,663 | 4,883 | — | ||||||||||||||||||||||||
Transfer agent’s fees and expenses | 1,740,976 | 47,538 | 115,227 | 359,170 | 3,766,200 | 5,732 | 7,797 | 3,810 | ||||||||||||||||||||||||
Registration fees | 30,154 | 6,053 | 15,463 | 13,779 | 46,880 | 13,479 | 13,479 | 14,279 | ||||||||||||||||||||||||
Fee waiver and/or expense reimbursement | — | (35,258 | ) | — | — | — | (12,976 | ) | (12,960 | ) | — | |||||||||||||||||||||
Distribution fee waiver | — | — | — | (696,753 | ) | — | — | — | — |
See Notes to Financial Statements.
24 |
Statements of Changes in Net Assets
Year Ended | ||||||||
September 30, | ||||||||
2020 | 2019 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | (15,300,176 | ) | $ | (2,255,018 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 663,233,974 | 333,255,023 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 1,969,770,765 | (390,863,911 | ) | |||||
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Net increase (decrease) in net assets resulting from operations | 2,617,704,563 | (59,863,906) | ||||||
Dividends and Distributions | ||||||||
Distributions from distributable earnings | ||||||||
Class A | (104,917,397 | ) | (63,605,883 | ) | ||||
Class B | (785,755 | ) | (870,715 | ) | ||||
Class C | (12,359,218 | ) | (10,461,165 | ) | ||||
Class R | (25,255,542 | ) | (17,477,510 | ) | ||||
Class Z | (227,550,125 | ) | (156,200,474 | ) | ||||
Class R2 | (233,992 | ) | (345,321 | ) | ||||
Class R4 | (302,253 | ) | (225,237 | ) | ||||
Class R6 | (27,740,336 | ) | (5,871,697 | ) | ||||
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(399,144,618 | ) | (255,058,002 | ) | |||||
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Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 1,233,112,621 | 1,145,580,270 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 373,641,405 | 237,544,755 | ||||||
Cost of shares reacquired | (1,818,140,629 | ) | (1,528,147,328 | ) | ||||
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Net increase (decrease) in net assets from Series share transactions | (211,386,603 | ) | (145,022,303 | ) | ||||
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Total increase (decrease) | 2,007,173,342 | (459,944,211 | ) | |||||
Net Assets: | ||||||||
Beginning of year | 5,045,860,667 | 5,505,804,878 | ||||||
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End of year | $ | 7,053,034,009 | $ | 5,045,860,667 | ||||
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See Notes to Financial Statements.
PGIM Jennison Growth Fund | 25 |
Notes to Financial Statements
1. Organization
The Prudential Investment Portfolios, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Company consists of three series: PGIM Balanced Fund, PGIM Jennison Focused Value Fund (formerly known as PGIM Jennison Equity Opportunity Fund) and PGIM Jennison Growth Fund, each of which are diversified funds for purposes of the 1940 Act. These financial statements relate only to the PGIM Jennison Growth Fund (the “Series”).
The investment objective of the Series is to achieve long-term growth of capital.
2. Accounting Policies
The Series 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 accounting policies conform to U.S. generally accepted accounting principles. The Series consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Series holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the 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. The Company’s Board of Directors (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Series 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. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.
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 Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
26 |
Various inputs determine how the Series’ 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 Measurements and Disclosures.
Common or preferred stocks, exchange-traded funds 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 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 Series 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 exchange-traded funds) 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 pricing methodologies 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.
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; any available analyst media or other reports or information deemed reliable by the Manager 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
PGIM Jennison Growth Fund | 27 |
Notes to Financial Statements (continued)
most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities: Pursuant to Rule 22e-4 under the 1940 Act, the Series has adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Series limit its illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Series may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser(s) and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Restricted Securities: Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the LRMP because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Series’ investments in restricted securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series 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 current rates of exchange;
(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 Series are presented at the foreign exchange rates and market values at the close of the period, the Series 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 Series does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term
28 |
portfolio securities sold during the period. Accordingly, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.
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 Series’ 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 Company, on behalf of the Series, 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 Series. A master netting arrangement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ 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. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.
Securities Lending: The Series 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 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 Series. Upon termination of the loan, the borrower will return to the Series securities identical to the loaned securities. Should the borrower of the securities fail financially, the Series has the right to repurchase the securities in the open market using the collateral.
The Series 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. The Series also continues to recognize any unrealized gain (loss) in the market price of the securities loaned
PGIM Jennison Growth Fund | 29 |
Notes to Financial Statements (continued)
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 equity REITs): The Series invested in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity 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 equity REITs.
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 Series 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. 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. Class specific expenses 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 Series’ 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: The Series expects to pay dividends from net investment income and distributions from net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, 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.
30 |
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 Company, on behalf of the Series, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. In addition, under the management agreement, the Manager provides all of the administrative functions necessary for the organization, operation and management of the Series. The Manager administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Series’ custodian and the Series’ transfer agent. The Manager is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
The Manager has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison” or the “Subadviser”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. The Manager pays for the services of Jennison, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to the Manager is accrued daily and payable monthly at an annual rate of 0.60% of the Series’ average daily net assets up to $300 million, 0.575% of the average daily net assets on the next $2.7 billion and 0.55% of the average daily net assets in excess of $3 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.56% for the year ended September 30, 2020.
The Manager has contractually agreed, through January 31, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 0.60% of average daily net assets for Class R6 shares. Separately, the Manager has contractually agreed, through January 31, 2022, to limit transfer agency, shareholder servicing, sub-transfer agency, and blue sky fees, as applicable, to the extent that such fees cause the total annual operating expenses to exceed 1.10% of average daily net assets for Class R2 shares or 0.85% of average daily net assets for Class R4 shares. The contractual waiver and expense limitation excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, and certain other Series expenses such as dividend and interest expense and broker charges on short sales.
PGIM Jennison Growth Fund | 31 |
Notes to Financial Statements (continued)
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 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 Company, on behalf of the Series, 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 Series. The Series compensates PIMS for distributing and servicing the Series’ 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. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z, Class R4 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1%, 0.75% and 0.25% of the average daily net assets of the Class A, Class C, Class R and Class R2 shares, respectively. PIMS has contractually agreed through January 31, 2022 to limit such fees to 0.50% of the average daily net assets of the Class R shares.
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 pay to Prudential Mutual Fund Services LLC (“PMFS”), its affiliates or third-party service providers, as compensation for services rendered to the shareholders of such Class R2 or Class R4 shares, a shareholder service fee at an annual rate of up to 0.10% of the average daily net assets attributable to Class R2 and Class R4 shares. The shareholder service fee is accrued daily and paid monthly, as applicable.
For the year ended September 30, 2020, PIMS received $1,568,851 in front-end sales charges resulting from sales of Class A shares. Additionally, for the year ended September 30, 2020, PIMS received $2,049 and $11,566 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders, respectively. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.
PGIM Investments, PIMS, PMFS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
32 |
4. Other Transactions with Affiliates
PMFS serves as the Series’ transfer 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 Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Through the Series’ investments in the mentioned underlying funds, PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services. In addition to the realized and unrealized gains on investments in the Core Fund and 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 Series 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, and/or common officers. Pursuant to the Rule 17a-7 procedures and consistent with guidance issued by the Securities and Exchange Commission (“SEC”), the Company’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such 17a-7 transactions were effected in accordance with the Series’ Rule 17a-7 procedures. For the year ended September 30, 2020, no 17a-7 transactions were entered into by the Series.
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 year ended September 30, 2020, were $2,820,654,070 and $3,481,061,473, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated investments for the year ended September 30, 2020, is presented as follows:
Value, | Cost of | Proceeds from Sales | Change in | Realized | Value, | Shares, End of Year | Income | |||||||
PGIM Core Ultra Short Bond Fund* | ||||||||||||||
$ 10,613,551 | $1,378,500,423 | $1,379,068,169 | $ — | $ — | $ 10,045,805 | 10,045,805 | $ 157,478 |
PGIM Jennison Growth Fund | 33 |
Notes to Financial Statements (continued)
Value, | Cost of | Proceeds from Sales | Change in | Realized | Value, | Shares, End of Year | Income | |||||||||||||||||||||||
PGIM Institutional Money Market Fund* | ||||||||||||||||||||||||||||||
$ | 157,208,244 | $ | 5,565,942,275 | $ | 4,671,837,997 | $ | 417,047 | $ | (395,025 | ) | $ | 1,051,334,544 | 1,051,544,853 | $ | 1,658,516 | ** | ||||||||||||||
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$ | 167,821,795 | $ | 6,944,442,698 | $ | 6,050,906,166 | $ | 417,047 | $ | (395,025 | ) | $ | 1,061,380,349 | $ | 1,815,994 | ||||||||||||||||
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* | The Fund did not have any capital gain distributions during the reporting period. |
** | The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations. |
6. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date.
For the year ended September 30, 2020, the tax character of dividends paid by the Series was and $399,144,618 of long-term capital gains. For the year ended September 30, 2019, the tax character of dividends paid by the Series were $28,640,180 of ordinary income and $226,417,822 of long-term capital gains.
As of September 30, 2020, the accumulated undistributed earnings on a tax basis were $13,112,164 of ordinary income and $558,115,141 of long-term capital gains.
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of September 30, 2020 were as follows:
Tax Basis | Gross Unrealized | Gross Unrealized | Net Unrealized | |||
$3,656,757,109 | $4,441,119,364 | $(17,234,686) | $4,423,884,678 |
The difference between book and tax basis was primarily attributable to deferred losses on wash sales and corporate spin-offs.
The Manager has analyzed the Series’ 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 Series’ financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Series’ U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended
34 |
September 30, 2020 are subject to such review.
7. Capital and Ownership
The Series 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 contingent deferred sales charge (“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. Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. 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 10 years 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 Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock, below.
The Company is authorized to issue 6.625 billion shares of common stock at $0.001 par value per share, 1.897 billion of which are designated as shares of the Series. The shares are further classified and designated as follows:
Class A | 125,000,000 | |||
Class B | 2,000,000 | |||
Class C | 25,000,000 | |||
Class R | 220,000,000 | |||
Class Z | 825,000,000 | |||
Class T | 50,000,000 | |||
Class R2 | 125,000,000 | |||
Class R4 | 250,000,000 | |||
Class R6 | 275,000,000 |
The Series currently does not have any Class B or Class T shares outstanding.
As of September 30, 2020, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Series as follows:
Number of Shares | Percentage of Outstanding Shares | |||
Class A | 19,227 | 0.1% | ||
Class C | 54 | 0.1% | ||
Class R | 5,454,190 | 89.0% | ||
Class Z | 359,537 | 0.5% | ||
Class R6 | 1,787 | 0.1% |
PGIM Jennison Growth Fund | 35 |
Notes to Financial Statements (continued)
At the reporting period end, the number of shareholders holding greater than 5% of the Series are as follows:
Affiliated | Unaffiliated | |||||
Number of Shareholders | Percentage of Outstanding Shares | Number of Shareholders | Percentage of Outstanding Shares | |||
— | —% | 4 | 42.2% |
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 3,000,083 | $ | 134,784,660 | |||||
Shares issued in reinvestment of dividends and distributions | 2,507,625 | 100,355,167 | ||||||
Shares reacquired | (5,754,156 | ) | (252,674,381 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (246,448 | ) | (17,534,554 | ) | ||||
Shares issued upon conversion from other share class(es) | 534,595 | 24,811,598 | ||||||
Shares reacquired upon conversion into other share class(es) | (256,632 | ) | (11,542,404 | ) | ||||
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Net increase (decrease) in shares outstanding | 31,515 | $ | (4,265,360 | ) | ||||
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Year ended September 30, 2019: | ||||||||
Shares sold | 2,897,654 | $ | 111,076,254 | |||||
Shares issued in reinvestment of dividends and distributions | 1,708,724 | 60,420,497 | ||||||
Shares reacquired | (5,583,256 | ) | (216,915,407 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (976,878 | ) | (45,418,656 | ) | ||||
Shares issued upon conversion from other share class(es) | 1,417,587 | 57,061,147 | ||||||
Shares reacquired upon conversion into other share class(es) | (269,076 | ) | (10,591,487 | ) | ||||
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Net increase (decrease) in shares outstanding | 171,633 | $ | 1,051,004 | |||||
|
|
|
| |||||
Class B | ||||||||
Period ended June 26, 2020*: | ||||||||
Shares sold | 11,550 | $ | 365,038 | |||||
Shares issued in reinvestment of dividends and distributions | 24,675 | 750,130 | ||||||
Shares reacquired | (30,195 | ) | (927,412 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 6,030 | 187,756 | ||||||
Shares reacquired upon conversion into other share class(es) | (261,146 | ) | (8,966,022 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (255,116 | ) | $ | (8,778,266 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 24,378 | $ | 743,168 | |||||
Shares issued in reinvestment of dividends and distributions | 30,394 | 844,046 | ||||||
Shares reacquired | (70,502 | ) | (2,154,188 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (15,730 | ) | (566,974 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (156,849 | ) | (4,751,770 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (172,579 | ) | $ | (5,318,744 | ) | |||
|
|
|
|
36 |
Class C | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 800,396 | $ | 27,303,459 | |||||
Shares issued in reinvestment of dividends and distributions | 369,447 | 11,330,931 | ||||||
Shares reacquired | (742,441 | ) | (24,576,600 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 427,402 | 14,057,790 | ||||||
Shares reacquired upon conversion into other share class(es) | (428,961 | ) | (15,571,038 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,559 | ) | $ | (1,513,248 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 931,334 | $ | 27,929,356 | |||||
Shares issued in reinvestment of dividends and distributions | 352,083 | 9,833,672 | ||||||
Shares reacquired | (838,160 | ) | (25,312,488 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 445,257 | 12,450,540 | ||||||
Shares reacquired upon conversion into other share class(es) | (1,744,707 | ) | (55,487,558 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,299,450 | ) | $ | (43,037,018 | ) | |||
|
|
|
| |||||
Class R | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 370,381 | $ | 14,187,150 | |||||
Shares issued in reinvestment of dividends and distributions | 730,106 | 25,057,244 | ||||||
Shares reacquired | (2,634,607 | ) | (100,392,994 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,534,120 | ) | (61,148,600 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1,833 | ) | (64,169 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,535,953 | ) | $ | (61,212,769 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 777,652 | $ | 24,648,316 | |||||
Shares issued in reinvestment of dividends and distributions | 550,773 | 16,952,805 | ||||||
Shares reacquired | (2,508,823 | ) | (83,006,713 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,180,398 | ) | (41,405,592 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1,456 | ) | (51,496 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,181,854 | ) | $ | (41,457,088 | ) | |||
|
|
|
| |||||
Class Z | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 16,988,157 | $ | 838,426,937 | |||||
Shares issued in reinvestment of dividends and distributions | 4,763,454 | 208,401,095 | ||||||
Shares reacquired | (25,684,039 | ) | (1,281,369,220 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (3,932,428 | ) | (234,541,188 | ) | ||||
Shares issued upon conversion from other share class(es) | 327,220 | 16,106,467 | ||||||
Shares reacquired upon conversion into other share class(es) | (100,672 | ) | (4,918,555 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (3,705,880 | ) | $ | (223,353,276 | ) | |||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 16,227,973 | $ | 667,472,486 | |||||
Shares issued in reinvestment of dividends and distributions | 3,740,799 | 143,197,782 | ||||||
Shares reacquired | (27,028,430 | ) | (1,142,338,037 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (7,059,658 | ) | (331,667,769 | ) | ||||
Shares issued upon conversion from other share class(es) | 423,063 | 17,902,016 | ||||||
Shares reacquired upon conversion into other share class(es) | (100,894 | ) | (4,165,938 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (6,737,489 | ) | $ | (317,931,691 | ) | |||
|
|
|
|
PGIM Jennison Growth Fund | 37 |
Notes to Financial Statements (continued)
Class R2 | Shares | Amount | ||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 12,605 | $ | 597,344 | |||||
Shares issued in reinvestment of dividends and distributions | 5,393 | 233,992 | ||||||
Shares reacquired | (16,490 | ) | (819,225 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,508 | $ | 12,111 | |||||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 90,086 | $ | 3,479,070 | |||||
Shares issued in reinvestment of dividends and distributions | 9,052 | 345,321 | ||||||
Shares reacquired | (197,456 | ) | (8,237,424 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (98,318 | ) | $ | (4,413,033 | ) | |||
|
|
|
| |||||
Class R4 | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 34,265 | $ | 1,719,417 | |||||
Shares issued in reinvestment of dividends and distributions | 2,774 | 121,069 | ||||||
Shares reacquired | (19,299 | ) | (893,830 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 17,740 | $ | 946,656 | |||||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 119,986 | $ | 4,987,522 | |||||
Shares issued in reinvestment of dividends and distributions | 2,064 | 78,935 | ||||||
Shares reacquired | (38,393 | ) | (1,657,269 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 83,657 | $ | 3,409,188 | |||||
|
|
|
| |||||
Class R6 | ||||||||
Year ended September 30, 2020: | ||||||||
Shares sold | 4,068,459 | $ | 215,728,616 | |||||
Shares issued in reinvestment of dividends and distributions | 624,955 | 27,391,777 | ||||||
Shares reacquired | (3,063,977 | ) | (156,486,967 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,629,437 | 86,633,426 | ||||||
Shares issued upon conversion from other share class(es) | 2,725 | 144,123 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,632,162 | $ | 86,777,549 | |||||
|
|
|
| |||||
Year ended September 30, 2019: | ||||||||
Shares sold | 7,063,907 | $ | 305,244,098 | |||||
Shares issued in reinvestment of dividends and distributions | 153,308 | 5,871,697 | ||||||
Shares reacquired | (1,142,042 | ) | (48,525,802 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 6,075,173 | 262,589,993 | ||||||
Shares issued upon conversion from other share class(es) | 1,986 | 85,086 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 6,077,159 | $ | 262,675,079 | |||||
|
|
|
|
* | Effective June 26, 2020, all of the issued and outstanding Class B shares of the Series converted into Class A shares. |
8. Borrowings
The Company, on behalf of the Series, 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
38 |
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 | 10/3/2019 –10/1/2020 | 10/4/2018 –10/2/2019 | ||
Total Commitment | $ 1,222,500,000* | $ 900,000,000 | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | 0.15% | ||
Annualized Interest Rate on Borrowings | 1.20% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent | 1.25% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent | ||
* Effective March 31, 2020, the SCA’s total commitment was increased from $900,000,000 to $1,162,500,000 and subsequently, effective April 7, 2020 was increased to $1,222,500,000. |
Subsequent to the reporting period end, the SCA has been renewed effective October 2, 2020 and will provide a commitment of $1,200,000,000 through September 30, 2021. The commitment fee paid by the Participating Funds will continue to be 0.15% of the unused portion of the SCA. The interest on borrowings under the renewed SCA will be paid monthly and at a per annum interest rate of 1.30% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate 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 Series utilized the SCA during the year ended September 30, 2020. The average daily balance for the 44 days that the Series had loans outstanding during the period was approximately $9,320,977, borrowed at a weighted average interest rate of 2.24%. The maximum loan outstanding amount during the period was $36,056,000. At September 30, 2020, the Series did not have an outstanding loan amount.
9. Risks of Investing in the Series
The Series’ risks include, but are not limited to, some or all of the risks discussed below. For further information on the Series’ risks, please refer to the Series’ Prospectus and Statement of Additional Information.
Equity and Equity-Related Securities Risks: The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Series invests could go down. The Series’ holdings can vary significantly from broad market indexes and the performance of the Series can
PGIM Jennison Growth Fund | 39 |
Notes to Financial Statements (continued)
deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Foreign Securities Risk: The Series’ investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Series may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Series’ investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.
Growth Style Risk: The Series’ growth style may subject the Series 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 Series follows a growth investment style, there is the risk that the growth investment style may be out of favor for a period of time. At times when the style is out of favor, the Series may underperform the market in general, its benchmark and other mutual funds.
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 Series’ shares. There is no requirement that these entities maintain their investment in the Series. There is a risk that such large shareholders or that the Series’ shareholders generally may redeem all or a substantial portion of their investments in the Series in a short period of time, which could have a significant negative impact on the Series’ NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Series’ ability to implement its investment strategy. The Series’ ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Series may invest a larger portion of its assets in cash or cash equivalents.
Market and Credit Risk: Securities markets may be volatile and the market prices of the Series’ 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 Series fall, the value of an investment in the Series will decline. Additionally, the Series may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Series has unsettled or open transactions defaults.
Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the
40 |
world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally.
10. Recent Accounting Pronouncements and Reporting Updates
In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of certain provisions of the ASU and any impact on the financial statement disclosures has not yet been determined.
PGIM Jennison Growth Fund | 41 |
Financial Highlights
Class A Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $39.94 | $42.79 | $35.78 | $29.86 | $29.37 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.21 | ) | (0.09 | ) | (0.10 | ) | (0.05 | ) | (0.06 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 20.86 | (0.71 | ) | 9.23 | 7.13 | 2.60 | ||||||||||||||
Total from investment operations | 20.65 | (0.80 | ) | 9.13 | 7.08 | 2.54 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | (1.16 | ) | (2.05 | ) | ||||||||||
Net asset value, end of year | $57.22 | $39.94 | $42.79 | $35.78 | $29.86 | |||||||||||||||
Total Return(b): | 55.32 | % | (1.25 | )% | 26.60 | % | 24.70 | % | 8.63 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $1,816,527 | $1,266,661 | $1,349,940 | $1,147,941 | $1,044,317 | |||||||||||||||
Average net assets (000) | $1,454,874 | $1,257,759 | $1,258,241 | $1,055,913 | $1,061,391 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.00 | % | 1.03 | % | 1.02 | % | 1.02 | % | 1.03 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.00 | % | 1.03 | % | 1.02 | % | 1.02 | % | 1.03 | % | ||||||||||
Net investment income (loss) | (0.46 | )% | (0.24 | )% | (0.26 | )% | (0.16 | )% | (0.19 | )% | ||||||||||
Portfolio turnover rate(e) | 49 | % | 43 | % | 40 | % | 54 | %(f) | 36 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
(f) | The Portfolio turnover rate is calculated in accordance with regulatory requirements and excludes portfolio securities transferred as a result of in-kind transactions. If such transactions were included, the portfolio turnover rate may be higher. |
See Notes to Financial Statements.
42 |
Class C Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $31.38 | $34.34 | $29.29 | $24.82 | $24.89 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.39 | ) | (0.27 | ) | (0.30 | ) | (0.22 | ) | (0.21 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 16.00 | (0.64 | ) | 7.47 | 5.85 | 2.19 | ||||||||||||||
Total from investment operations | 15.61 | (0.91 | ) | 7.17 | 5.63 | 1.98 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | (1.16 | ) | (2.05 | ) | ||||||||||
Net asset value, end of year | $43.62 | $31.38 | $34.34 | $29.29 | $24.82 | |||||||||||||||
Total Return(b): | 54.27 | % | (1.92 | )% | 25.76 | % | 23.84 | % | 7.89 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $165,724 | $119,260 | $175,142 | $121,092 | $115,018 | |||||||||||||||
Average net assets (000) | $135,568 | $145,286 | $148,000 | $113,836 | $110,677 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.68 | % | 1.70 | % | 1.69 | % | 1.72 | % | 1.73 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.68 | % | 1.70 | % | 1.69 | % | 1.72 | % | 1.73 | % | ||||||||||
Net investment income (loss) | (1.13 | )% | (0.89 | )% | (0.94 | )% | (0.86 | )% | (0.88 | )% | ||||||||||
Portfolio turnover rate(e) | 49 | % | 43 | % | 40 | % | 54 | %(f) | 36 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
(f) | The Portfolio turnover rate is calculated in accordance with regulatory requirements and excludes portfolio securities transferred as a result of in-kind transactions. If such transactions were included, the portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 43 |
Financial Highlights (continued)
Class R Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $34.71 | $37.57 | $31.72 | $26.65 | $26.47 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.25 | ) | (0.15 | ) | (0.16 | ) | (0.10 | ) | (0.10 | ) | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 17.90 | (0.66 | ) | 8.13 | 6.33 | 2.33 | ||||||||||||||
Total from investment operations | 17.65 | (0.81 | ) | 7.97 | 6.23 | 2.23 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | (1.16 | ) | (2.05 | ) | ||||||||||
Net asset value, end of year | $48.99 | $34.71 | $37.57 | $31.72 | $26.65 | |||||||||||||||
Total Return(b): | 54.99 | % | (1.46 | )% | 26.34 | % | 24.48 | % | 8.39 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $300,323 | $266,084 | $332,402 | $318,202 | $290,328 | |||||||||||||||
Average net assets (000) | $278,701 | $282,917 | $334,713 | $306,004 | $277,093 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.21 | % | 1.23 | % | 1.23 | % | 1.22 | % | 1.23 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 1.46 | % | 1.48 | % | 1.48 | % | 1.47 | % | 1.48 | % | ||||||||||
Net investment income (loss) | (0.66 | )% | (0.43 | )% | (0.47 | )% | (0.36 | )% | (0.39 | )% | ||||||||||
Portfolio turnover rate(e) | 49 | % | 43 | % | 40 | % | 54 | %(f) | 36 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
(f) | The Portfolio turnover rate is calculated in accordance with regulatory requirements and excludes portfolio securities transferred as a result of in-kind transactions. If such transactions were included, the portfolio turnover rate may be higher. |
See Notes to Financial Statements.
44 |
Class Z Shares | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||
Net Asset Value, Beginning of Year | $43.34 | $46.12 | $38.30 | $31.79 | $31.05 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.07 | ) | 0.04 | 0.02 | 0.04 | 0.03 | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 22.81 | (0.75 | ) | 9.92 | 7.63 | 2.76 | ||||||||||||||
Total from investment operations | 22.74 | (0.71 | ) | 9.94 | 7.67 | 2.79 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | (0.02 | ) | - | - | - | ||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | (1.16 | ) | (2.05 | ) | ||||||||||
Total dividends and distributions | (3.37 | ) | (2.07 | ) | (2.12 | ) | (1.16 | ) | (2.05 | ) | ||||||||||
Net asset value, end of year | $62.71 | $43.34 | $46.12 | $38.30 | $31.79 | |||||||||||||||
Total Return(b): | 55.83 | % | (0.95 | )% | 26.99 | % | 25.07 | % | 8.99 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000) | $4,149,643 | $3,028,962 | $3,533,891 | $2,763,070 | $2,015,895 | |||||||||||||||
Average net assets (000) | $3,436,278 | $3,237,702 | $3,107,412 | $2,264,779 | $1,944,589 | |||||||||||||||
Ratios to average net assets(c)(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.69 | % | 0.71 | % | 0.71 | % | 0.72 | % | 0.73 | % | ||||||||||
Expenses before waivers and/or expense reimbursement | 0.69 | % | 0.71 | % | 0.71 | % | 0.72 | % | 0.73 | % | ||||||||||
Net investment income (loss) | (0.15 | )% | 0.09 | % | 0.04 | % | 0.13 | % | 0.11 | % | ||||||||||
Portfolio turnover rate(e) | 49 | % | 43 | % | 40 | % | 54 | %(f) | 36 | % |
(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 generally accepted accounting principles. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(e) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
(f) | The Portfolio turnover rate is calculated in accordance with regulatory requirements and excludes portfolio securities transferred as a result of in-kind transactions. If such transactions were included, the portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 45 |
Financial Highlights (continued)
Class R2 Shares | ||||||||||||||||||||
Year Ended September 30, | November 28, 2017(a) through September 30, | |||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $43.05 | $45.99 | $41.24 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.27 | ) | (0.14 | ) | (0.32 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 22.58 | (0.75 | ) | 7.19 | ||||||||||||||||
Total from investment operations | 22.31 | (0.89 | ) | 6.87 | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | ||||||||||||||
Net asset value, end of period | $61.99 | $43.05 | $45.99 | |||||||||||||||||
Total Return(c): | 55.19 | % | (1.37 | )% | 17.60 | % | ||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $4,534 | $3,084 | $7,815 | |||||||||||||||||
Average net assets (000) | $3,663 | $5,033 | $1,011 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.10 | % | 1.10 | % | 1.10 | %(e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.45 | % | 1.41 | % | 3.11 | %(e) | ||||||||||||||
Net investment income (loss) | (0.56 | )% | (0.33 | )% | (0.86) | %(e) | ||||||||||||||
Portfolio turnover rate(f) | 49 | % | 43 | % | 40 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | 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 generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
46 |
Class R4 Shares | ||||||||||||||||||||
Year Ended September 30, | November 28, 2017(a) through September 30, | |||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $43.26 | $46.08 | $41.24 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (0.15 | ) | (0.03 | ) | (0.22 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 22.74 | (0.74 | ) | 7.18 | ||||||||||||||||
Total from investment operations | 22.59 | (0.77 | ) | 6.96 | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | ||||||||||||||
Net asset value, end of period | $62.48 | $43.26 | $46.08 | |||||||||||||||||
Total Return(c): | 55.59 | % | (1.09 | )% | 17.83 | % | ||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $6,840 | $3,969 | $372 | |||||||||||||||||
Average net assets (000) | $4,883 | $4,125 | $38 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.85 | % | 0.85 | % | 0.85 | %(e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.12 | % | 1.22 | % | 57.88 | %(e) | ||||||||||||||
Net investment income (loss) | (0.31 | )% | (0.06 | )% | (0.62) | %(e) | ||||||||||||||
Portfolio turnover rate(f) | 49 | % | 43 | % | 40 | % |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | 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 generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Growth Fund | 47 |
Financial Highlights (continued)
Class R6 Shares | |||||||||||||||||||||||||
Year Ended September 30, | September 27, 2017(a) through September 30, | ||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||
Per Share Operating Performance(b): | |||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $43.41 | $46.19 | $38.30 | $37.92 | |||||||||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||
Net investment income (loss) | (0.02 | ) | 0.08 | 0.08 | - | (c) | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 22.85 | (0.75 | ) | 9.93 | 0.38 | ||||||||||||||||||||
Total from investment operations | 22.83 | (0.67 | ) | 10.01 | 0.38 | ||||||||||||||||||||
Less Dividends and Distributions: | |||||||||||||||||||||||||
Dividends from net investment income | - | (0.06 | ) | - | - | ||||||||||||||||||||
Distributions from net realized gains | (3.37 | ) | (2.05 | ) | (2.12 | ) | - | ||||||||||||||||||
Total dividends and distributions | (3.37 | ) | (2.11 | ) | (2.12 | ) | - | ||||||||||||||||||
Net asset value, end of period | $62.87 | $43.41 | $46.19 | $38.30 | |||||||||||||||||||||
Total Return(d): | 55.98 | % | (0.83 | )% | 27.18 | % | 1.00 | % | |||||||||||||||||
Ratios/Supplemental Data: | |||||||||||||||||||||||||
Net assets, end of period (000) | $609,443 | $349,897 | $91,625 | $13,539 | |||||||||||||||||||||
Average net assets (000) | $427,945 | $205,755 | $50,011 | $13,296 | |||||||||||||||||||||
Ratios to average net assets(e)(f): | |||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.58 | % | 0.59 | % | 0.60 | % | 0.58 | %(g) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.58 | % | 0.59 | % | 0.62 | % | 0.58 | %(g) | |||||||||||||||||
Net investment income (loss) | (0.04 | )% | 0.19 | % | 0.18 | % | (0.43) | %(g) | |||||||||||||||||
Portfolio turnover rate(h) | 49 | % | 43 | % | 40 | % | 54 | %(i) |
(a) | Commencement of offering. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Less than $0.005 per share. |
(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 generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(e) | Does not include expenses of the underlying funds in which the Series invests. |
(f) | Effective October 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class. |
(g) | Annualized. |
(h) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
(i) | The Portfolio turnover rate is calculated in accordance with regulatory requirements and excludes portfolio securities transferred as a result of in-kind transactions. If such transactions were included, the portfolio turnover rate may be higher. |
See Notes to Financial Statements.
48 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of The Prudential Investment Portfolios, Inc. and
Shareholders of PGIM Jennison Growth Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Jennison Growth Fund (one of the funds constituting The Prudential Investment Portfolios, Inc., referred to hereafter as the “Fund”) as of September 30, 2020, and the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year ended September 30, 2020 (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 September 30, 2020, and the results of its operations, changes in its net assets, and the financial highlights for the year ended September 30, 2020 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 September 30, 2019 and the financial highlights for each of the periods ended on or prior to September 30, 2019 (not presented herein, other than the statement of changes in net assets and the financial highlights) were audited by other auditors whose report dated November 15, 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 audit. 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 audit 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 audit 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 audit 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 September 30, 2020 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 audit provides a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
November 17, 2020
We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.
PGIM Jennison Growth Fund | 49 |
Series Liquidity Risk Management Program (unaudited)
Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Series has adopted and implemented a liquidity risk management program (the “LRMP”). The Series’ LRMP seeks to assess and manage the Series’ liquidity risk, which is defined as the risk that the Series is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Series. The Company’s Board of Directors (the “Board”) has approved PGIM Investments LLC (“PGIM Investments”), the Series’ investment manager, to serve as the administrator of the Series’ LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.
The Series’ LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Series’ LRMP includes no less than annual assessments of factors that influence the Series’ liquidity risk; no less than monthly classifications of the Series’ investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Series’ assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Series does not invest primarily in highly liquid investments; and regular reporting to the Board.
At a meeting of the Board on March 3-5, 2020, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Series’ LRMP, including any material changes to the LRMP for the period from the inception of the Series’ LRMP on December 1, 2018 through December 31, 2019 (“Reporting Period”). The LRMP Report concluded that the Series’ LRMP was reasonably designed to assess and manage the Series’ liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Series’ investment strategies continue to be appropriate given the Series’ status as an open-end fund.
There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Series, including liquidity risks presented by the Series’ investment portfolio, is found in the Series’ Prospectus and Statement of Additional Information.
50 |
Tax Information (unaudited)
We are advising you that during the fiscal year ended September 30, 2020, the Series reported the maximum amount allowed per share, but not less than $3.37 for Class A, B, C, R, Z, R2, R4 and R6 shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.
In January 2021, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the federal tax status of distributions received by you in calendar year 2020.
PGIM Jennison Growth Fund | 51 |
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: 95 | President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018). | None. | Since September 2013 | |||
Kevin J. Bannon 1952 Board Member Portfolios Overseen: 95 | Retired; 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; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds. | Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008). | Since July 2008 |
PGIM Jennison Growth 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: 95 | 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). | Director of Anixter International, Inc. (communication products distributor) (since January 2006–June 2020); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). | Since March 2005 | |||
Barry H. Evans 1960 Board Member Portfolios Overseen: 94 | 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 U.S. | 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 & | Executive Committee of the IDC Board of Governors (since October 2019); Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); 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); 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: 94 | A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); 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, Synnex Corporation (since April 2019) (information technology); Independent Director, Kabbage, Inc. (June 2018-October 2020) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company). | Since September 2017 | |||
Michael S. Hyland, CFA 1945 Board Member Portfolios Overseen: 95 | Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999). | None. | Since July 2008 | |||
Brian K. Reid 1961 | 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); Director, ICI Mutual Insurance Company (2012-2017). | None. | Since March 2018 |
PGIM Jennison Growth 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: 94 | 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. | Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank. | Since November 2014 |
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: 96 | President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). | None. | Since January 2012 |
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 | |||
Scott E. Benjamin 1973 Board Member & Vice President Portfolios Overseen: 96 | Executive Vice President (since June 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); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). | None. | Since March 2010 |
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 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 Associate at Sidley Austin Brown & Wood LLP (1999-2004). | Since December 2005 | ||
Dino Capasso 1974 Chief Compliance Officer | Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., and PGIM High Yield Bond Fund, Inc.; Vice President and Deputy Chief Compliance Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC. | Since March 2018 |
PGIM Jennison Growth Fund
Fund Officers(a) | ||||
Name Year of Birth Fund Position | Principal Occupation(s) During Past Five Years | Length of Service as Fund Officer | ||
Andrew R. French 1962 Secretary | Vice President (since December 2018 - present) of PGIM Investments LLC; 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 | ||
Diana N. Huffman 1982 Assistant Secretary | Vice President and Corporate Counsel (since September 2015) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; formerly Associate at Willkie Farr & Gallagher LLP (2009-2015). | Since March 2019 | ||
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; 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; and Corporate Counsel (2012 – 2017) of IIL, Inc. | Since June 2020 | ||
Kelly A. Coyne 1968 Assistant Secretary | Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010). | Since March 2015 | ||
Christian J. Kelly 1975 Treasurer and Principal Financial and Accounting Officer | Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); 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 | ||
Lana Lomuti 1967 Assistant Treasurer | Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc. | Since April 2014 | ||
Russ Shupak 1973 Assistant Treasurer | Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Deborah Conway 1969 Assistant Treasurer | Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration. | Since October 2019 | ||
Elyse M. McLaughlin 1974 Assistant Treasurer | Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration. | Since October 2019 |
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 | ||
Charles H. Smith 1973 Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007-December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998-January 2007). | Since January 2017 |
(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. |
∎ | “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., 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. |
PGIM Jennison Growth Fund
Approval of Advisory Agreements (unaudited)
The Fund’s Board of Directors
The Board of Directors (the “Board”) of PGIM Jennison Growth Fund (the “Fund”)1 consists of eleven individuals, nine 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 four standing committees: the Audit Committee, the Nominating and Governance 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 27, 2020 and on June 9-11, 2020 and approved the renewal of the agreements through July 31, 2021, 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 meetings on May 27, 2020 and on June 9-11, 2020.
1 | PGIM Jennison Growth Fund is a series of The Prudential Investment Portfolios, Inc. |
PGIM Jennison Growth 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 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, 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, including investment research and security selection, 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 the Jennison 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 PGIM Investments and Jennison. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to each of PGIM Investments and Jennison.
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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 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.
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.
PGIM Jennison Growth Fund |
Approval of Advisory Agreements (continued)
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), 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 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 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-, five- and ten-year periods ended December 31, 2019.
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 September 30, 2019. 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 evaluate performance, and the Peer Group, which was used to evaluate 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
Visit our website at pgim.com/investments |
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 | ||||
3rd 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- and five-year periods, though it underperformed over the one- and ten-year periods. |
• | 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 0.60% for Class R6 shares through January 31, 2021. |
• | The Board and PGIM Investments also agreed to retain the existing contractual expense cap that (exclusive of certain fees and expenses) limits transfer agency, shareholder servicing, sub-transfer agency and blue sky fees to the extent that such fees cause annual operating expenses to exceed 1.10% for Class R2 shares and 0.85% for Class R4 shares through January 31, 2021. |
• | 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 Growth Fund |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (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 • Michael S. Hyland • Stuart S. Parker • Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer • Claudia DiGiacomo, Chief Legal Officer • Dino Capasso, Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Andrew R. French, Secretary • Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary • Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary • Lana Lomuti, Assistant Treasurer • Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer • Deborah Conway, 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 9658 Providence, RI 02940 | ||
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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 |
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 Growth 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 GROWTH FUND
SHARE CLASS | A | C | R | Z | R2 | R4 | R6 | |||||||
NASDAQ | PJFAX | PJFCX | PJGRX | PJFZX | PJFOX | PJFPX | PJFQX | |||||||
CUSIP | 74437E107 | 74437E305 | 74437E651 | 74437E404 | 74437E420 | 74437E412 | 74437E479 |
MF168 E
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 year ended September 30, 2020, the Registrant’s principal accountant was PricewaterhouseCoopers LLP (“PwC”). For the fiscal year ended September 30, 2020, PwC billed the Registrant $95,800 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.
For the fiscal year ended September 30, 2019, the Registrant’s principal accountant was KPMG LLP (“KPMG”). For the fiscal year ended September 30, 2019, KPMG billed the Registrant $94,722 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 year ended September 30, 2020, PwC did not bill the Registrant for audit-related services.
For the fiscal year ended September 30, 2020, fees of $6,354 were billed to the Registrant for services rendered by KPMG in connection with the auditor transition.
For the fiscal year ended September 30, 2019, fees of $4,254 were billed to the Registrant for services rendered by KPMG in connection with an accounting system conversion and were paid by The Bank of New York Mellon.
(c) Tax Fees
For the fiscal years ended September 30, 2020 and September 30, 2019: none.
(d) All Other Fees
For the fiscal years ended September 30, 2020 and September 30, 2019: 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 referred to in 4(b) – 4(d) that were approved by the audit committee –
For the fiscal years ended September 30, 2020 and September 30, 2019, 100% of the services referred to in Item 4(b) was approved by the audit committee.
(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 KPMG 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 September 30, 2020 and September 30, 2019 was $0 and $0, respectively.
(h) Principal Accountant’s Independence
Not applicable as KPMG 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.
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 that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is 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. |
(2) |
(3) | Any written solicitation to purchase securities under Rule 23c-1 – Not applicable. |
(b) |
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: | The Prudential Investment Portfolios, Inc. | |
By: | /s/ Andrew R. French | |
Andrew R. French | ||
Secretary | ||
Date: | November 17, 2020 |
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: | November 17, 2020 | |
By: | /s/ Christian J. Kelly | |
Christian J. Kelly | ||
Treasurer and Principal Financial and Accounting Officer | ||
Date: | November 17, 2020 |