Shareholder Fees (fees paid directly from your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.50% | None | None | None | None | None |
Maximum deferred sales charge (load) | 1% | 5% | 1% | None | 6% | None |
Maximum sales charge (load) imposed on reinvested dividends and other distributions | None | None | None | None | None | None |
Redemption fee | None | None | None | None | None | None |
Exchange fee | None | None | None | None | None | None |
Maximum account fee (accounts under $10,000) | $15 | $15 | $15 | None | $15 | None |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Management fees | .75% | .75% | .75% | .75% | .75% | .75% |
+ Distribution and service (12b-1) fees | .30 | 1.00 | 1.00 | .75 | 1.00 | None |
+ Other expenses | .54 | .54 | .54 | .54 | .54 | .54 |
= Total annual Fund operating expenses | 1.59 | 2.29 | 2.29 | 2.04 | 2.29 | 1.29 |
– Fee waiver or expense reimbursement | (.05) | None | None | (.25) | None | None |
= Net annual Fund operating expenses | 1.54 | 2.29 | 2.29 | 1.79 | 2.29 | 1.29 |
If Shares Are Redeemed | If Shares Are Not Redeemed | |||||||
Share Class | 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years |
Class A | $698 | $1,020 | $1,364 | $2,331 | $698 | $1,020 | $1,364 | $2,331 |
Class B | $732 | $1,015 | $1,325 | $2,368 | $232 | $715 | $1,225 | $2,368 |
Class C | $332 | $715 | $1,225 | $2,626 | $232 | $715 | $1,225 | $2,626 |
Class R | $182 | $616 | $1,075 | $2,349 | $182 | $616 | $1,075 | $2,349 |
Class X | $832 | $1,116 | $1,525 | $2,626 | $232 | $716 | $1,225 | $2,626 |
Class Z | $131 | $409 | $708 | $1,556 | $131 | $409 | $708 | $1,556 |
Visit our website at www.prudentialfunds.com | 3 |
4 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 5 |
6 | Target Asset Allocation Funds |
Annual Total Returns % (Class A Shares)1 |
![]() |
Best Quarter: | Worst Quarter: | ||
9.80% | 3rd Quarter 2009 | -7.94% | 4th Quarter 2008 |
Average Annual Total Returns % (as of 12-31-11) | ||||
Return Before Taxes | One Year | Five Years | Ten Years | Since Inception |
Class B shares | -3.92 | 1.99 | 3.78 | — |
Class C shares | -0.02 | 2.14 | 3.77 | — |
Class R shares | 1.54 | 2.67 | N/A | 4.04 (10/4/04) |
Class X shares | -4.92 | 1.70 | N/A | 3.44 (10/4/04) |
Class Z shares | 2.01 | 3.19 | 4.83 | — |
Class A Shares % | ||||
Return Before Taxes | -3.82 | 1.78 | 3.96 | — |
Return After Taxes on Distributions | -4.22 | 0.73 | 2.77 | — |
Return After Taxes on Distribution and Sale of Fund Shares | -2.33 | 1.01 | 2.83 | — |
Index % (reflects no deduction for fees, expenses or taxes) | ||||
Customized Blend Index | 5.43 | 4.33 | 5.24 | — |
S&P 500 Index | 2.09 | -0.25 | 2.92 | — |
Lipper Mixed-Asset Target Allocation Conservative Funds Average | 2.06 | 2.88 | 4.05 | — |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Prudential Investments LLC | Eagle Asset Management, Inc. | Bert L. Boksen, CFA | Senior Vice President & Managing Director | July 2008 |
Eric Mintz, CFA | Co-Portfolio Manager | July 2008 | ||
EARNEST Partners, LLC | Paul E. Viera, Jr. | Chief Executive Officer & Partner | December 2001 | |
Epoch Investment Partners, Inc. | David N. Pearl | Executive Vice President, Co-Chief Investment Officer & Portfolio Manager | July 2012 | |
Janet K. Navon | Managing Director, Portfolio Manager & Director of Research | July 2012 |
Visit our website at www.prudentialfunds.com | 7 |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Michael A. Welhoelter, CFA | Managing Director, Chief Risk Officer & Portfolio Manager | July 2012 | ||
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | Principal & Portfolio Manager | April 2005 | |
George Davis | Principal & CEO | April 2005 | ||
Scott McBride | Portfolio Manager | February 2009 | ||
Patricia McKenna | Principal & Portfolio Manager | April 2005 | ||
Judd Peters | Portfolio Manager | February 2009 | ||
Marsico Capital Management, LLC | Thomas F. Marsico | Portfolio Manager, CIO, & CEO | June 2005 | |
Coralie Witter, CFA | Senior Analyst & Portfolio Manager | February 2011 | ||
Massachusetts Financial Services Company | Eric B. Fischman | Investment Officer | January 2011 | |
NFJ Investment Group LLC | Ben Fischer, CFA | Managing Director, Portfolio Manager | December 2005 | |
Tom Oliver, CPA, CFA | Managing Director, Portfolio Manager | September 2008 | ||
Paul Magnuson | Managing Director, Portfolio Manager | December 2005 | ||
R. Burns McKinney, CFA | Managing Director, Portfolio Manager | September 2010 | ||
Jeff Reed, CFA | Vice President, Portfolio Manager | February 2011 | ||
Pacific Investment Management Company LLC | Chris Dialynas | Managing Director | May 2000 | |
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | Senior Portfolio Manager | July 2005 | |
Scott Weber | Portfolio Manager | July 2005 |
Minimum Initial Investment | Minimum Subsequent Investment | |
Fund shares (most cases) | $2,500 | $100 |
Retirement accounts and custodial accounts for minors | $1,000 | $100 |
Automatic Investment Plan (AIP) | $50 | $50 |
8 | Target Asset Allocation Funds |
Shareholder Fees (fees paid directly from your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.50% | None | None | None | None | None |
Maximum deferred sales charge (load) | 1% | 5% | 1% | None | 6% | None |
Maximum sales charge (load) imposed on reinvested dividends and other distributions | None | None | None | None | None | None |
Redemption fee | None | None | None | None | None | None |
Exchange fee | None | None | None | None | None | None |
Maximum account fee (accounts under $10,000) | $15 | $15 | $15 | None | $15 | None |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Management fees | .75% | .75% | .75% | .75% | .75% | .75% |
+ Distribution and service (12b-1) fees | .30 | 1.00 | 1.00 | .75 | 1.00 | None |
+ Other expenses | .41 | .41 | .41 | .41 | .41 | .41 |
= Total annual Fund operating expenses | 1.46 | 2.16 | 2.16 | 1.91 | 2.16 | 1.16 |
– Fee waiver or expense reimbursement | (.05) | None | None | (.25) | None | None |
= Net annual Fund operating expenses | 1.41 | 2.16 | 2.16 | 1.66 | 2.16 | 1.16 |
If Shares Are Redeemed | If Shares Are Not Redeemed | |||||||
Share Class | 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years |
Class A | $686 | $982 | $1,299 | $2,196 | $686 | $982 | $1,299 | $2,196 |
Class B | $719 | $976 | $1,259 | $2,232 | $219 | $676 | $1,159 | $2.232 |
Class C | $319 | $676 | $1,159 | $2,493 | $219 | $676 | $1,159 | $2,493 |
Class R | $169 | $576 | $1,008 | $2,212 | $169 | $576 | $1,008 | $2,212 |
Class X | $819 | $1,076 | $1,459 | $2,493 | $219 | $676 | $1,159 | $2,493 |
Class Z | $118 | $368 | $638 | $1,409 | $118 | $368 | $638 | $1,409 |
Visit our website at www.prudentialfunds.com | 9 |
10 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 11 |
12 | Target Asset Allocation Funds |
Annual Total Returns % (Class A Shares)1 |
![]() |
Best Quarter: | Worst Quarter: | ||
12.96% | 2nd Quarter 2003 | -13.86% | 4th Quarter 2008 |
Average Annual Total Returns % (as of 12-31-11) | ||||
Return Before Taxes | One Year | Five Year | Ten Years | Since Inception |
Class B shares | -6.86 | -0.53 | 3.27 | — |
Class C shares | -2.86 | -0.36 | 3.27 | — |
Class R shares | -1.37 | 0.15 | N/A | 3.53 (10/4/04) |
Class X shares | -6.99 | -0.54 | N/A | 3.15 (10/4/04) |
Class Z shares | -0.95 | 0.64 | 4.29 | — |
Class A Shares % | ||||
Return Before Taxes | -6.55 | -0.73 | 3.46 | — |
Return After Taxes on Distributions | -6.70 | -1.42 | 2.74 | — |
Return After Taxes on Distributions and Sale of Fund Shares | -4.07 | -0.80 | 2.81 | — |
Index % (reflects no deduction for fees, expenses or taxes) | ||||
Customized Blend Index | 1.89 | 2.09 | 4.84 | — |
S&P 500 Index | 2.09 | -0.25 | 2.92 | — |
Lipper Mixed-Asset Target Allocation Growth Funds Average | -1.30 | 0.63 | 3.80 | — |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Prudential Investments LLC | Eagle Asset Management, Inc. | Bert L. Boksen, CFA | Senior Vice President & Managing Director | July 2008 |
Eric Mintz, CFA | Co-Portfolio Manager | July 2008 | ||
EARNEST Partners, LLC | Paul E. Viera, Jr. | Chief Executive Officer & Partner | December 2001 | |
Epoch Investment Partners, Inc. | David N. Pearl | Executive Vice President, Co-Chief Investment Officer & Portfolio Manager | July 2012 | |
Janet K. Navon | Managing Director, Portfolio Manager & Director of Research | July 2012 |
Visit our website at www.prudentialfunds.com | 13 |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Michael A. Welhoelter, CFA | Managing Director, Chief Risk Officer & Portfolio Manager | July 2012 | ||
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | Principal & Portfolio Manager | April 2005 | |
George Davis | Principal & CEO | April 2005 | ||
Scott McBride | Portfolio Manager | February 2009 | ||
Patricia McKenna | Principal & Portfolio Manager | April 2005 | ||
Judd Peters | Portfolio Manager | February 2009 | ||
LSV Asset Management | Josef Lakonishok | CEO, CIO, Partner & Portfolio Manager | April 2005 | |
Menno Vermuelen, CFA | Partner, Portfolio Manager & Senior Quantitative Analyst | April 2005 | ||
Puneet Mansharamani, CFA | Partner, Portfolio Manager & Senior Quantitative Analyst | January 2006 | ||
Marsico Capital Management, LLC | Thomas F. Marsico | Portfolio Manager, CIO, & CEO | June 2005 | |
Coralie Witter, CFA | Senior Analyst & Portfolio Manager | February 2011 | ||
Massachusetts Financial Services Company | Eric B. Fischman | Investment Officer | January 2011 | |
NFJ Investment Group LLC | Ben Fischer, CFA | Managing Director, Portfolio Manager | December 2005 | |
Tom Oliver, CPA, CFA | Managing Director, Portfolio Manager | September 2008 | ||
Paul Magnuson | Managing Director, Portfolio Manager | December 2005 | ||
R. Burns McKinney, CFA | Managing Director, Portfolio Manager | September 2010 | ||
Jeff Reed, CFA | Vice President, Portfolio Manager | February 2011 | ||
Pacific Investment Management Company LLC | Chris Dialynas | Managing Director | May 2000 | |
Thornburg Investment Management, Inc. | William V. Fries, CFA | Managing Director | April 2005 | |
Wendy Trevisani | Managing Director | April 2005 | ||
Lei Wang, CFA | Managing Director | February 2006 | ||
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | Senior Portfolio Manager | July 2005 | |
Scott Weber | Portfolio Manager | July 2005 |
Minimum Initial Investment | Minimum Subsequent Investment | |
Fund shares (most cases) | $2,500 | $100 |
Retirement accounts and custodial accounts for minors | $1,000 | $100 |
Automatic Investment Plan (AIP) | $50 | $50 |
14 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 15 |
Shareholder Fees (fees paid directly from your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.50% | None | None | None | None | None |
Maximum deferred sales charge (load) | 1% | 5% | 1% | None | 6% | None |
Maximum sales charge (load) imposed on reinvested dividends and other distributions | None | None | None | None | None | None |
Redemption fee | None | None | None | None | None | None |
Exchange fee | None | None | None | None | None | None |
Maximum account fee (accounts under $10,000) | $15 | $15 | $15 | None | $15 | None |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | ||||||
Class A | Class B | Class C | Class R | Class X | Class Z | |
Management fees | .75% | .75% | .75% | .75% | .75% | .75% |
+ Distribution and service (12b-1) fees | .30 | 1.00 | 1.00 | .75 | 1.00 | None |
+ Other expenses | .55 | .55 | .55 | .55 | .55 | .55 |
= Total annual Fund operating expenses | 1.60 | 2.30 | 2.30 | 2.05 | 2.30 | 1.30 |
– Fee waiver or expense reimbursement | (.05) | None | None | (.25) | None | None |
= Net annual Fund operating expenses | 1.55 | 2.30 | 2.30 | 1.80 | 2.30 | 1.30 |
If Shares Are Redeemed | If Shares Are Not Redeemed | |||||||
Share Class | 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years |
Class A | $699 | $1,023 | $1,368 | $2,342 | $699 | $1,023 | $1,368 | $2,342 |
Class B | $733 | $1,018 | $1,330 | $2,378 | $233 | $718 | $1,230 | $2,378 |
Class C | $333 | $718 | $1,230 | $2,636 | $233 | $718 | $1,230 | $2,636 |
Class R | $183 | $619 | $1,080 | $2,359 | $183 | $619 | $1,080 | $2,359 |
Class X | $833 | $1,118 | $1,530 | $2,636 | $233 | $718 | $1,230 | $2,636 |
Class Z | $132 | $412 | $713 | $1,568 | $132 | $412 | $713 | $1,568 |
16 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 17 |
18 | Target Asset Allocation Funds |
Annual Total Returns % (Class A Shares)1 |
![]() |
Best Quarter: | Worst Quarter: | ||
17.94% | 2nd Quarter 2003 | -22.16% | 4th Quarter 2008 |
Average Annual Total Returns % (as of 12-31-11) | ||||
Return Before Taxes | One Year | Five Year | Ten Years | Since Inception |
Class B shares | -10.07 | -3.85 | 2.13 | — |
Class C shares | -6.28 | -3.66 | 2.14 | — |
Class R shares | -4.85 | -3.19 | N/A | 2.35 (10/4/2004) |
Class X shares | -10.30 | -3.76 | N/A | 2.04 (10/4/2004) |
Class Z shares | -4.36 | -2.71 | 3.17 | — |
Class A Shares % | ||||
Return Before Taxes | -9.88 | -4.05 | 2.32 | — |
Return After Taxes on Distributions | -9.92 | -4.42 | 1.91 | — |
Return After Taxes on Distribution and Sale of Fund Shares | -6.37 | -3.40 | 2.01 | — |
Index % (reflects no deduction for fees, expenses or taxes) | ||||
Customized Blend Index | -1.71 | -0.91 | 3.80 | — |
S&P 500 Index | 2.09 | -0.25 | 2.92 | — |
Lipper Large-Cap Core Funds Average | -0.67 | -0.87 | 2.41 | — |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Prudential Investments LLC | Eagle Asset Management, Inc. | Bert L. Boksen, CFA | Senior Vice President & Managing Director | July 2008 |
Eric Mintz, CFA | Co-Portfolio Manager | July 2008 | ||
EARNEST Partners, LLC | Paul E. Viera, Jr. | Chief Executive Officer & Partner | December 2001 | |
Epoch Investment Partners, Inc. | David N. Pearl | Executive Vice President, Co-Chief Investment Officer & Portfolio Manager | July 2012 |
Visit our website at www.prudentialfunds.com | 19 |
Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
Janet K. Navon | Managing Director, Portfolio Manager & Director of Research | July 2012 | ||
Michael A. Welhoelter, CFA | Managing Director, Chief Risk Officer & Portfolio Manager | July 2012 | ||
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | Principal & Portfolio Manager | April 2005 | |
George Davis | Principal & CEO | April 2005 | ||
Scott McBride | Portfolio Manager | February 2009 | ||
Patricia McKenna | Principal & Portfolio Manager | April 2005 | ||
Judd Peters | Portfolio Manager | February 2009 | ||
LSV Asset Management | Josef Lakonishok | CEO, CIO, Partner & Portfolio Manager | April 2005 | |
Menno Vermuelen, CFA | Partner, Portfolio Manager & Senior Quantitative Analyst | April 2005 | ||
Puneet Mansharamani, CFA | Partner, Portfolio Manager & Senior Quantitative Analyst | January 2006 | ||
Marsico Capital Management, LLC | Thomas F. Marsico | Portfolio Manager, CIO, & CEO | June 2005 | |
Coralie Witter, CFA | Senior Analyst & Portfolio Manager | February 2011 | ||
Massachusetts Financial Services Company | Eric B. Fischman | Investment Officer | January 2011 | |
NFJ Investment Group LLC | Ben Fischer, CFA | Managing Director, Portfolio Manager | December 2005 | |
Tom Oliver, CPA, CFA | Managing Director, Portfolio Manager | September 2008 | ||
Paul Magnuson | Managing Director, Portfolio Manager | December 2005 | ||
R. Burns McKinney, CFA | Managing Director, Portfolio Manager | September 2010 | ||
Jeff Reed, CFA | Vice President, Portfolio Manager | February 2011 | ||
Thornburg Investment Management, Inc. | William V. Fries, CFA | Managing Director | April 2005 | |
Wendy Trevisani | Managing Director | April 2005 | ||
Lei Wang, CFA | Managing Director | February 2006 | ||
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | Senior Portfolio Manager | July 2005 | |
Scott Weber | Portfolio Manager | July 2005 |
Minimum Initial Investment | Minimum Subsequent Investment | |
Fund shares (most cases) | $2,500 | $100 |
Retirement accounts and custodial accounts for minors | $1,000 | $100 |
Automatic Investment Plan (AIP) | $50 | $50 |
20 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 21 |
Conservative Allocation Fund | |||
Subadviser | Allocation | Asset Class | Primary Investment Type/Style |
Marsico Capital Management, LLC (Marsico) Massachusetts Financial Services Company (MFS) | 19% | Equities | Growth-oriented, focusing on large-cap stocks |
Hotchkis and Wiley Capital Management, LLC (Hotchkis and Wiley) Epoch Investment Partners, Inc. (Epoch) NFJ Investment Group LLC (NFJ) | 17% | Equities | Value-oriented, focusing on large-cap stocks |
Eagle Asset Management, Inc. (Eagle) | 1% | Equities | Growth-oriented, focusing on small-cap stocks |
EARNEST Partners, LLC (EARNEST) Vaughan Nelson Investment Management LP (Vaughan Nelson) | 2% | Equities | Value-oriented, focusing on small-cap stocks |
Pacific Investment Management Company LLC (PIMCO) | 61% | Fixed-Income | High-quality debt instruments |
22 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 23 |
24 | Target Asset Allocation Funds |
Moderate Allocation Fund | |||
Subadviser | Allocation | Asset Class | Primary Investment Type/Style |
Marsico MFS | 26% | Equities | Growth-oriented, focusing on large-cap stocks |
Hotchkis and Wiley Epoch NFJ | 23% | Equities | Value-oriented, focusing on large-cap stocks |
Eagle | 2% | Equities | Growth-oriented, focusing on small-cap stocks |
EARNEST Vaughan Nelson | 2% | Equities | Value-oriented, focusing on small-cap stocks |
LSV Asset Management (LSV) Thornburg Investment Management, Inc. (Thornburg) | 12% | International Equities | Stocks of foreign companies |
PIMCO | 35% | Fixed-Income | High-quality debt instruments |
Visit our website at www.prudentialfunds.com | 25 |
26 | Target Asset Allocation Funds |
Growth Allocation Fund | |||
Subadviser | Allocation | Asset Class | Primary Investment Type/Style |
Marsico MFS | 38% | Equities | Growth-oriented, focusing on large-cap stocks |
Hotchkis and Wiley Epoch NFJ | 38% | Equities | Value-oriented, focusing on large-cap stocks |
Eagle | 3% | Equities | Growth-oriented, focusing on small-cap stocks |
EARNEST Vaughan Nelson | 3% | Equities | Value-oriented, focusing on small-cap stocks |
LSV Thornburg | 18% | International Equities | Stocks of foreign companies |
Visit our website at www.prudentialfunds.com | 27 |
28 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 29 |
30 | Target Asset Allocation Funds |
Visit our website at www.prudentialfunds.com | 31 |
Common Stocks | |
Risks | Potential Rewards |
■ Individual stocks could lose value. ■ Equity markets could go down, resulting in a decline in value of the Fund’s investments. ■ Companies that normally pay dividends may not do so if they don’t have profits or adequate cash flow. ■ Changes in economic or political conditions, both domestic and international, may result in a decline in value of the Fund’s investments. ■ Investment style risk—the risk that returns from the types of stocks in which the Fund invests will trail returns from the overall stock market. | ■ Historically, stocks have outperformed other investments over the long term. ■ Generally, economic growth leads to higher corporate profits, which in turn can lead to an increase in stock prices, known as capital appreciation. ■ May be a source of dividend income. |
Small Capitalization Stocks | |
Risks | Potential Rewards |
■ Individual stocks could lose value. ■ The equity markets could go down, resulting in a decline in value of the Fund's investments. ■ Stocks of small and medium-sized companies are more volatile and may decline more than those of larger capitalization companies. ■ Small-cap companies are more likely to reinvest earnings and not pay dividends. ■ Changes in interest rates may affect the securities of smaller companies more than the securities of larger companies. ■ Changes in economic or political conditions, both domestic and international, may result in a decline in value of the Fund's investments. | ■ Historically, stocks have outperformed other investments over the long term. ■ Generally, economic growth means higher corporate profits, which leads to an increase in stock prices, known as capital appreciation. ■ Highly successful small-cap companies can outperform larger ones. |
32 | Target Asset Allocation Funds |
Fixed-Income Obligations | |
Risks | Potential Rewards |
■ The Fund's holdings, share price, yield and total return may fluctuate in response to
bond market movements. ■ Credit risk—the risk that the default of an issuer will leave the Fund with unpaid interest or principal. The lower an instrument's quality, the higher its potential volatility. ■ Market risk—the risk that the market value of an investment may decline, sometimes rapidly or unpredictably. Market risk may affect an industry, a sector, or the market as a whole. ■ Interest rate risk—the risk that the value of most bonds will fall when interest rates rise: the longer a bond's maturity and the lower its credit quality, the more its value typically falls. Interest rate risk can lead to price volatility, particularly for junk bonds and stripped securities. ■ Spread Risk— Wider credit spreads and decreasing market values typically represent a deterioration of the fixed income instrument's credit soundness and a perceived greater likelihood or risk of default by the issuer. Fixed income instruments generally compensate for greater credit risk by paying interest at a higher rate. As the spread on a security widens (or increases), the price (or value) of the security generally falls. ■ Not all U.S. Government securities are insured or guaranteed by the full faith and credit of the U.S. Government—some are backed only by the issuing agency, which must rely on its own resources to repay the debt. ■ Inflation-indexed bonds, such as Treasury Inflation-Protected Securities (“TIPS”), may experience greater losses than other fixed income securities with similar durations. Investments in inflation-indexed bonds are more likely to cause fluctuations in the Fund’s income distributions. | ■ Bonds have generally outperformed money market instruments over the long term with less risk than stocks. ■ Most bonds will rise in value when interest rates fall. ■ May provide a source of regular interest income. ■ Generally more secure than stocks since companies must pay their debts before paying stockholders. ■ Investment-grade obligations have a lower risk of default. ■ Bonds with longer maturity dates typically have higher yields. ■ Intermediate-term securities may be less susceptible to loss of principal than longer-term securities. |
Foreign Securities | |
Risks | Potential Rewards |
■ Foreign markets, economies and political systems, particularly those in developing
countries, may not be as stable as those in the U.S. ■ Currency risk—the risk that adverse changes in the values of foreign currencies can cause losses (non-U.S. dollar denominated securities). ■ May be less liquid than U.S. stocks and bonds. ■ Differences in foreign laws, accounting standards, public information, custody and settlement practices may result in less reliable information on foreign investments and involve more risks. ■ Investments in emerging market securities are subject to greater volatility and price declines. | ■ Investors may participate in the growth of foreign markets through the Fund's investments in companies operating in those
markets. ■ The Fund may profit from a favorable change in the value of foreign currencies (non-U.S. dollar denominated securities). |
Visit our website at www.prudentialfunds.com | 33 |
U.S. Government and Agency Securities | |
Risks | Potential Rewards |
■ Not all U.S. Government securities are insured or guaranteed by 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. ■ Limits potential for capital appreciation. ■ Credit risk—the risk that the borrower can't pay back the money borrowed or make interest payments (relatively low for U.S. Government securities). ■ Market risk—the risk that the market value of an investment may move up or down, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower. Market risk may affect an industry, a sector or the market as a whole. ■ Interest rate risk—the risk that the value of most debt obligations will fall when interest rates rise. The longer a bond's maturity and the lower its credit quality, the more its value typically falls. Price volatility may follow. ■ Inflation-indexed bonds, such as Treasury Inflation-Protected Securities (“TIPS”), may experience greater losses than other fixed income securities with similar durations. ■ Investments in inflation-indexed bonds are more likely to cause fluctuations in the Fund’s income distributions. | ■ May preserve the Fund's assets. ■ May provide a source of regular interest income. ■ Generally more secure than lower quality debt securities and generally more secure than equity securities. ■ Principal and interest may be guaranteed by the U.S. Government. ■ If interest rates decline, long-term yields should be higher than money market yields. ■ Bonds have generally outperformed money market instruments over the long term. ■ Most bonds rise in value when interest rates fall. |
Mortgage-Related Securities | |
Risks | Potential Rewards |
■ Prepayment risk—the risk that the underlying mortgages may be prepaid, partially
or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Fund to reinvest in lower yielding securities. ■ Extension risk—the risk that rising interest rates may cause the underlying mortgages to be paid off more slowly by the borrower, causing the value of the securities to fall. ■ Credit risk—the risk that the underlying mortgages will not be paid by debtors or by credit insurers or guarantors of such instruments. Some private mortgage securities are unsecured or secured by lower-rated insurers or guarantors and thus may involve greater risk. ■ Market risk—the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond's insurer. Market risk may affect an industry, a sector or the market as a whole. ■ Interest rate risk—the risk that the value of most bonds will fall when interest rates rise. The longer a bond's maturity and the lower its credit quality, the more its value typically falls. Price volatility may result. ■ Illiquidity risk—the risk that securities may be difficult to value precisely and to sell at the time or price desired. | ■ A source of regular interest income. ■ The U.S. Government guarantees interest and principal payments on certain securities. ■ May benefit from security interest in real estate collateral. ■ Pass-through instruments provide greater diversification than direct ownership of loans. |
34 | Target Asset Allocation Funds |
Asset-Backed Securities | |
Risks: | Potential Rewards: |
■ Credit risk—the risk that the underlying receivables will not be paid by debtors
or by credit insurers or guarantors of such instruments. Some asset-backed securities are unsecured or secured by lower-rated insurers or guarantors and thus may involve greater risk. ■ Prepayment risk—the risk that the underlying debt instruments may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Fund to reinvest in lower yielding debt instruments. ■ Extension risk—the risk that rising interest rates may cause the underlying debt instruments to be paid off more slowly by the debtor, causing the value of the securities to fall. ■ Market risk—the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond’s insurer. Market risk may affect an industry, a sector or the market as a whole. ■ Interest rate risk—the risk that the value of most bonds will fall when interest rates rise. The longer a bond's maturity and the lower its credit quality, the more its value typically falls. Price volatility may result. ■ Illiquidity risk—the risk that securities may be difficult to value precisely and to sell at the time or price desired. | ■ A potential source of regular interest income. ■ Prepayment risk is generally lower than with mortgage related securities. ■ Pass-through instruments may provide greater diversification than direct ownership of loans. ■ May offer higher yields due to their structure than other instruments. |
Derivatives | |
Risks | Potential Rewards |
■ The value of derivatives (such as forwards, futures, swaps and options) that are used to
hedge a portfolio security is generally determined independently from the value of that security and could result in a loss to the Fund when the price movement of the derivative does not correlate with a change in the
value of the portfolio security. ■ Derivatives may not have the intended effects and may result in losses or missed opportunities. ■ The counterparty to a derivatives contract could default. ■ Derivatives can increase share price volatility and those that involve leverage could magnify losses. ■ Certain types of derivatives involve costs to the Fund that can reduce returns. ■ Derivatives may be difficult to value precisely or sell at the time or price desired. ■ Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulations are not yet fully known and may not be for some time. New regulation of derivatives may make them more costly, may limit their availability, or may otherwise adversely affect their value or performance. | ■ Derivatives could make money and protect against losses if the investment analysis proves correct. ■ Derivatives used for return enhancement purposes involve a type of leverage and could generate substantial gains at low cost. ■ One way to manage the Fund's risk/return balance is by locking in the value of an investment ahead of time. ■ Hedges that correlate well with an underlying position can reduce or eliminate the volatility of investment income or capital gains at low cost. |
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Collateralized Debt Obligations | |
Risks | Potential Rewards |
■ The CDO's underlying obligations may not be authorized investments for the Fund. ■ As a derivative, a CDO is subject to credit, liquidity and market risks, as well as price volatility. ■ Limited liquidity because of transfer restrictions and lack of an organized trading market. | ■ Greater diversification than direct investment in debt instruments. ■ May offer higher yield than other instruments due to their structure. |
Credit-Linked Securities | |
Risks | Potential Rewards |
■ The issuer of the credit-linked security may default or go bankrupt. ■ Subject to the credit risk of the corporate issuer underlying the credit default swaps. ■ Typically privately negotiated transactions, resulting in limited liquidity or no liquidity. ■ Market risk—the risk that underlying debt investments will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the issuer of the security or the underlying security or the bond's insurer. ■ Prepayment risk—the risk that the underlying debt instruments may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Fund to reinvest in lower yielding debt instruments. ■ Extension risk—the risk that rising interest rates may cause the underlying debt instruments to be paid off more slowly by the debtor, causing the value of the securities to fall. | ■ A potential source of regular interest income. ■ Pass-through instruments may provide greater diversification than direct investments. ■ May offer higher yield due to their structure than other instruments. |
Money Market Instruments | |
Risks | Potential Rewards |
■ May limit the Fund's potential for capital appreciation and achieving its
objective. ■ Credit risk (which is less of a concern for money market instruments)—the risk that the underlying receivables will not be paid by debtors or by credit insurers or guarantors of such instruments. ■ Market risk (which is less of a concern for money market instruments)—the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond's insurer. | ■ May preserve the Fund's assets. |
36 | Target Asset Allocation Funds |
Reverse Repurchase Agreements and Dollar Rolls | |
Risks | Potential Rewards |
■ Risk that the counterparty may fail to return securities in a timely manner or at
all. ■ May magnify underlying investment losses. ■ Investment costs may exceed potential underlying investment gains. ■ Leverage risk—the risk that the market value of the securities purchased with proceeds of the sale declines below the price of the securities the Fund must repurchase. | ■ May magnify underlying investment gains. |
Borrowing | |
Risks | Potential Rewards |
■ Leverage for investment may magnify losses. ■ Interest costs and borrowing fees may exceed potential investment gains. ■ Transactions that leverage the Fund must be covered by segregated liquid assets, which may require the Fund to liquidate positions when it may not be advantageous to do so to meet its asset segregation or other obligations. | ■ Leverage may magnify investment gains (if any). |
Stripped Securities | |
Risks | Potential Rewards |
■ More volatile than securities where the principal and interest are not separated. | ■ Value may rise faster when interest rates fall. |
Illiquid Securities | |
Risks | Potential Rewards |
■ May be difficult to value precisely. ■ May be difficult to sell at the time or price desired. | ■ May offer a more attractive yield or potential for growth than more widely traded securities. |
Variable/Floating Rate Bonds | |
Risks | Potential Rewards |
■ The Fund's share price, yield and total return may fluctuate in response to bond market
movements. ■ Credit risk—the risk that the borrower can't pay back the money borrowed or make interest payments (lower risk for higher rated bonds). The greater a bond's credit risk, the higher its potential volatility. ■ Market risk—the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower. ■ Interest rate risk—the risk that the value of most bonds will fall when interest rates rise. The longer a bond's maturity and the lower the credit quality, the more its value typically falls. Price volatility may result. | ■ May offer protection against interest rate increases. |
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Exchange-Traded Funds (ETFs) | |
Risks | Potential Rewards |
■ The price movement of an ETF may not track the underlying index or basket of securities
and may result in a loss. ■ Duplicate management fees. | ■ Helps to manage cash flows. ■ Ability to get rapid exposure to an index. ■ Provides opportunity to buy or sell an entire portfolio of securities in a single transaction in a manner similar to buying or selling a share of stock. ■ The unsystemic risk (risk associated with certain issues rather than the financial markets generally) associated with investments in ETFs is generally low relative to investments in securities of individual issuers. |
Short Sales, including Short Sales Against the Box | |
Risks | Potential Rewards |
■ May magnify underlying investment losses. ■ Share price volatility can magnify losses because the underlying security must be replaced at a specific time. ■ Investment costs may exceed potential underlying investment gains. ■ Short sales pose the risk of potentially unlimited loss. ■ Short sales “against the box” give up the opportunity for capital appreciation in the security. ■ Short sales “against the box” are not subject to the 25% of net assets limitation. | ■ May magnify underlying investment gains. ■ Short sales “against the box” may lock in capital appreciation while delaying tax consequences. |
Securities of Real Estate Investment Trusts (REITs) | |
Risks | Potential Rewards |
■ Performance and values depend on the value of the underlying properties or the
underlying loans or interests, the strength of real estate markets, REIT management and property management which can be affected by many factors, including national and regional economic conditions. ■ Securities of individual REITs could lose value. ■ Equity markets could go down, resulting in a decline in value of the Fund's investments. ■ Companies that normally pay dividends may not do so if they don't have profits or adequate cash flow. ■ Changes in economic or political conditions, both domestic and international, may result in a decline in value of REIT investments. ■ REITs charge management fees which may result in layering the management fees paid by the Fund. ■ Real estate companies, including REITs, may be leveraged, which increases risk. | ■ Real estate holdings can generate good returns from rents, rising market values, etc. ■ Greater diversification than direct ownership of real estate. ■ Potential for dividend income. |
38 | Target Asset Allocation Funds |
Municipal Obligations | |
Risks | Potential Rewards |
■ Credit risk—the risk that the borrower or counterparty can't repay the money
borrowed or make interest payments (lower for insured and higher rated bonds). The lower a bond's quality, the higher its potential volatility. ■ Market risk—the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or counterparty or the bond's insurer. ■ Geographic concentration risk—the risk that bonds may lose value because of political, economic or other events in the geographic region where the Fund's investments are focused. ■ Illiquidity risk—the risk that bonds may be difficult to value precisely and sell at the time or price desired. ■ Non-appropriation risk—the risk that the state or municipality may not include the bond obligations in future budgets. ■ Prepayment risk — the risk that the underlying municipal bonds may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Fund to reinvest in lower yielding instruments. ■ Extension risk — the risk that rising interest rates may cause the underlying municipal bonds to be paid off more slowly by the debtor, causing the value of the securities to fall. ■ Insured bond risk — insurance does not protect the Fund or its shareholders against losses caused by declines in a municipal bond’s value. Also, the Fund cannot be certain that any insurance company will make the payments it guarantees. ■ Tax risk—the risk that federal income tax rates may decrease, which could decrease demand for municipal bonds, or that a change in law may limit or eliminate exemption of interest on municipal bonds from such taxes. | ■ If interest rates decline, long term yields should be higher than money market yields. ■ Bonds have generally outperformed money market instruments over the long term. ■ Most bonds rise in value when interest rates fall. |
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Conservative Allocation Fund: Principal & Non-Principal Strategies |
■ Common Stocks (approximately 40%, may range up to 45%) ■ Small capitalization stocks (up to 15%) ■ Fixed-income securities (approximately 60%, may range up to 65%) ■ Foreign Equity Securities (up to 20%) ■ Securities Denominated in Foreign Currencies (up to 30% of total assets, no more than 15% in emerging markets) ■ U.S. Government and agency securities (percentage varies, up to 100% of total assets on a temporary basis) ■ Money market instruments (amount varies on a normal basis; up to 100% of total assets on a temporary basis) ■ Mortgage-related securities (percentage varies, up to 35%) ■ Asset-Backed Securities (amount varies, up to 25% of total assets) ■ Junk bonds (up to 35% of total assets) ■ Collateralized debt obligations (up to 5% of total assets) ■ Credit-Linked Securities (up to 15% of total assets) ■ Derivatives (percentage varies, but swaps up to 15% of net assets) ■ Reverse repurchase agreements & Dollar Rolls (up to 33 1∕3%, usually less than 10%) ■ When issued and delayed delivery securities: (percentage varies, usually less than 35% of total assets) ■ Borrowing (up to 33 1∕3%, usually less than 10%) ■ Stripped Securities (percentage varies) ■ Illiquid Securities (up to 15% of net assets) ■ Adjustable/floating rate securities (percentage varies) ■ ETFs (up to 5% in any one ETF or other mutual fund, and up to 10% in ETFs or other mutual funds collectively) ■ Corporate loans (up to 5% of total assets) ■ Municipals (up to 10% of net assets) |
Moderate Allocation Fund: Principal & Non-Principal Strategies |
■ Common Stocks (approximately 65%, may range up to 70%) ■ Small capitalization stocks (up to 25%) ■ Fixed-income securities (approximately 35%, may range up to 40%) ■ Foreign Equity Securities (up to 30%) ■ Securities Denominated in Foreign Currencies (up to 30% of total assets, no more than 15% in emerging markets) ■ U.S. Government and agency securities (percentage varies; up to 100% of total assets on a temporary basis) ■ Money market instruments (amount varies on a normal basis; up to 100% of total assets on a temporary basis) ■ Mortgage-related securities (percentage varies, up to 35%) ■ Asset-Backed Securities (amount varies, but usually less than 25% of total assets) ■ Junk bonds (up to 35% of total assets) ■ Collateralized debt obligations (up to 5% of total assets) ■ Credit-Linked Securities (up to 15% of total assets) ■ Derivatives (percentage varies, but swaps up to 15% of net assets) ■ Reverse repurchase agreements & Dollar Rolls (up to 33 1∕3%, usually less than 10%) ■ When issued and delayed delivery securities (percentage varies, usually less than 35% of total assets) ■ Borrowing (up to 33 1∕3%, usually less than 10%) ■ Stripped Securities (percentage varies) ■ Illiquid Securities (up to 15% of net assets) ■ Adjustable/floating rate securities (percentage varies) ■ ETFs (up to 5% in any one ETF or other mutual fund, and up to 10% in ETFs or other mutual funds collectively) ■ Corporate loans (up to 5% of total assets) ■ Municipals (up to 10% of net assets) |
40 | Target Asset Allocation Funds |
Growth Allocation Fund: Principal & Non-Principal Strategies |
■ Common Stocks (substantially all) ■ Small capitalization stocks (up to 35%) ■ Foreign Equity Securities (up to 40%) ■ U.S. Government and agency securities (percentage varies; up to 100% on a temporary basis) ■ Money market instruments (amount varies on a normal basis; up to 100% on a temporary basis) ■ Derivatives (percentage varies) ■ Reverse repurchase agreements (up to 33 1∕3%, usually less than 10%) ■ When issued and delayed delivery securities (percentage varies, usually less than 35%) ■ Borrowing (up to 33 1∕3%, usually less than 10%) ■ Illiquid Securities (up to 15% of net assets) ■ ETFs (up to 5% in any one ETF or other mutual funds, and up to 10% in ETFs or other mutual funds collectively) |
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42 | Target Asset Allocation Funds |
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44 | Target Asset Allocation Funds |
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46 | Target Asset Allocation Funds |
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Fund | Dividends Declared and Paid* |
Conservative Allocation Fund | dividends of net investment income—annually; net capital gains—annually |
48 | Target Asset Allocation Funds |
Fund | Dividends Declared and Paid* |
Moderate Allocation Fund | dividends of net investment income—annually; net capital gains—annually |
Growth Allocation Fund | dividends of net investment income—annually; net capital gains—annually |
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50 | Target Asset Allocation Funds |
Share Class | Eligibility |
Class A | Individual investors |
Class B | Individual investors |
Class C | Individual investors |
Class R | Certain group retirement plans |
Class X | Closed to new investors. Available only by exchange from same share class of another Prudential Investments fund |
Class Z | Institutional investors and certain other investors |
■ | Class A shares purchased in amounts of less than $1 million require you to pay a sales charge at the time of purchase, but the operating expenses of Class A shares are lower than the operating expenses of Class B and Class C shares. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are also subject to a contingent deferred sales charge (CDSC) of 1%. The CDSC is waived for certain retirement and/or benefit plans. |
■ | Class B shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within six years (that is why it is called a CDSC). The operating expenses of Class B shares are higher than the operating expenses of Class A shares. |
■ | Class C shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within 12 months of purchase. The operating expenses of Class C shares are higher than the operating expenses of Class A shares. |
■ | The amount of your investment and any previous or planned future investments, which may qualify you for reduced sales charges for Class A shares under Rights of Accumulation or a Letter of Intent. |
■ | The length of time you expect to hold the shares and the impact of varying distribution fees. Over time, these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. For this reason, Class C shares are generally appropriate only for investors who plan to hold their shares for no more than 3 years. |
■ | The different sales charges that apply to each share class—Class A's front-end sales charge (in certain cases, CDSC) vs. Class B's CDSC vs. Class C's lower CDSC. |
■ | The fact that Class B shares automatically convert to Class A shares approximately seven years after purchase. |
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■ | Class B shares purchased in single amounts greater than $100,000 are generally less advantageous than purchasing Class A shares. Purchase orders for Class B shares exceeding this amount generally will not be accepted. |
■ | Class C shares purchased in single amounts greater than $1 million are generally less advantageous than purchasing Class A shares. Purchase orders for Class C shares above this amount generally will not be accepted. |
■ | Because Class Z and Class R shares have lower operating expenses than Class A, Class B or Class C shares, as applicable, you should consider whether you are eligible to purchase Class Z or Class R shares. |
Class A | Class B | Class C | Class R | Class X | Class Z | |
Minimum purchase amount | $2,500 | $2,500 | $2,500 | None | $2,500 | None |
Minimum amount for subsequent purchases | $100 | $100 | $100 | None | $100 | None |
Maximum initial sales charge | 5.5% of the public offering price | None | None | None | None | None |
Contingent Deferred Sales Charge (CDSC) (as a percentage of the lower of original purchase price or sale proceeds) | 1% on sales of $1 million or more made within 12 months of purchase | 5% (Year 1) 4% (Year 2) 3% (Year 3) 2% (Year 4) 1% (Years 5/6) 0% (Year 7) | 1% on sales made within 12 months of purchase | None | 6% (Year 1) 5% (Year 2) 4% (Year 3/4) 3% (Year 5) 2% (Year 6/7) 1% (Year 8) 0% (Year 9) | None |
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .30% (.25% currently) | 1% | 1% | .75% (.50% currently) | 1% | None |
52 | Target Asset Allocation Funds |
Amount of Purchase | Sales Charge as a % of Offering Price | Sales Charge as a % of Amount Invested | Dealer Reallowance |
Less than $25,000 | 5.50% | 5.82% | 5.00% |
$25,000 to $49,999 | 5.00% | 5.26% | 4.50% |
$50,000 to $99,999 | 4.50% | 4.71% | 4.00% |
$100,000 to $249,999 | 3.75% | 3.90% | 3.25% |
$250,000 to $499,999 | 2.75% | 2.83% | 2.50% |
$500,000 to $999,999 | 2.00% | 2.04% | 1.75% |
$1 million to $4,999,999* | None | None | 1.00%** |
■ | Use your Rights of Accumulation, which allow you or an eligible group of related investors to combine (1) the current value of Prudential Investments mutual fund shares you or the group already own, (2) the value of money market shares (other than Direct Purchase money market shares) you or an eligible group of related investors have received for shares of other Prudential Investments mutual funds in an exchange transaction, and (3) the value of the shares you or an eligible group of related investors are purchasing; or |
■ | Sign a Letter of Intent, stating in writing that you or an eligible group of related investors will purchase a certain amount of shares in the Fund and other Prudential Investments mutual funds within 13 months. |
■ | All accounts held in your name (alone or with other account holders) and taxpayer identification number (TIN); |
■ | Accounts held in your spouse's name (alone or with other account holders) and TIN (see definition of spouse below); |
■ | Accounts for your children or your spouse's children, including children for whom you and/or your spouse are legal guardian(s) (e.g., UGMAs and UTMAs); |
■ | Accounts in the name and TINs of your parents; |
■ | Trusts with you, your spouse, your children, your spouse's children and/or your parents as the beneficiaries; |
■ | With limited exclusions, accounts with the same address (exclusions include, but are not limited to, addresses for brokerage firms and other intermediaries and Post Office boxes); and |
■ | Accounts held in the name of a company controlled by you (a person, entity or group that holds 25% or more of the outstanding voting securities of a company will be deemed to control the company, and a partnership will be deemed to be controlled by each of its general partners), including employee benefit plans of the company where the accounts are held in the plan's TIN. |
■ | The person to whom you are legally married. We also consider your spouse to include the following: |
■ | An individual of the same gender with whom you have been joined in a civil union, or legal contract similar to marriage; |
■ | A domestic partner, who is an individual (including one of the same gender) with whom you have shared a primary residence for at least six months, in a relationship as a couple where you, your domestic partner or both provide for the personal or financial welfare of the other without a fee, to whom you are not related by blood; or |
■ | An individual with whom you have a common law marriage, which is a marriage in a state where such marriages are recognized between a man and a woman arising from the fact that the two live together and hold themselves out as being married. |
■ | for Class A shares and any other share class for which a sales charge is paid, the value of existing shares is determined by the maximum offering price (NAV plus maximum sales charge); and |
■ | for all other share classes, the value of existing shares is determined by the NAV. |
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■ | Mutual fund “wrap” or asset allocation programs, where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services, or |
■ | Mutual fund “supermarket” programs, where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services. |
■ | certain directors, officers, employees (including their spouses, children and parents) of Prudential and its affiliates, the Prudential Investments mutual funds, and the investment subadvisers of the Prudential Investments mutual funds; |
■ | persons who have retired directly from active service with Prudential or one of its subsidiaries; |
■ | certain real estate brokers, agents and employees of real estate brokerage companies affiliated with the Prudential Real Estate Affiliates; |
■ | registered representatives and employees of broker-dealers that have entered into dealer agreements with the Distributor; |
■ | investors in IRAs, provided that: (a) the purchase is made either from a directed rollover to such IRA or with the proceeds of a tax-free rollover of assets from a Benefit Plan for which Prudential Retirement (the institutional Benefit Plan recordkeeping entity of Prudential) provides administrative or recordkeeping services, in each case provided that such purchase is made |
54 | Target Asset Allocation Funds |
within 60 days of receipt of the Benefit Plan distribution, and (b) the IRA is established through Prudential Retirement as part of its “Rollover IRA” program (regardless of whether or not the purchase consists of proceeds of a tax-free rollover of assets from a Benefit Plan described above) and | |
■ | Clients of financial intermediaries, who (i) have entered into an agreement with the principal underwriter to offer Class A shares through a no-load network or platform, (ii) charge clients an ongoing fee for advisory, investment, consulting or similar services, or (iii) offer self-directed brokerage accounts that may or may not charge transaction fees to customers. |
■ | Mutual fund “wrap” or asset allocation programs where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services; or |
■ | Mutual fund “supermarket” programs where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services. |
■ | Certain participants in the MEDLEY Program (group variable annuity contracts) sponsored by Prudential for whom Class Z shares of the Prudential mutual funds are an available option; |
■ | Current and former Directors/Trustees of mutual funds managed by PI or any other affiliate of Prudential; |
■ | Prudential, with an investment of $10 million or more (except that seed money investments by Prudential in other Prudential funds may be made in any amount); |
■ | Prudential funds, including Prudential fund-of-funds; and |
■ | Qualified state tuition programs (529 plans). |
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56 | Target Asset Allocation Funds |
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58 | Target Asset Allocation Funds |
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■ | You are selling more than $100,000 of shares; |
■ | You want the redemption proceeds made payable to someone that is not in our records; |
■ | You want the redemption proceeds sent to some place that is not in our records; |
■ | You are a business or a trust; or |
■ | You are redeeming due to the death of the shareholder or on behalf of the shareholder. |
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | |
Class A | 1% | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
60 | Target Asset Allocation Funds |
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | |
Class B | 5% | 4% | 3% | 2% | 1% | 1% | N/A | N/A |
Class C | 1% | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Class X | 6% | 5% | 4% | 4% | 3% | 2% | 2% | 1% |
■ | Amounts representing shares you purchased with reinvested dividends and distributions, |
■ | Amounts representing the increase in NAV above the total amount of payments for shares made during the past 12 months for Class A shares (in certain cases), six years for Class B shares, 12 months for Class C shares, and eight years for Class X shares, |
■ | Any bonus shares received by investors when purchasing Class X shares, and |
■ | Amounts representing the cost of shares held beyond the CDSC period (12 months for Class A shares (in certain cases), six years for Class B shares, 12 months for Class C shares, and eight years for Class X shares). |
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■ | After a shareholder is deceased or disabled (or, in the case of a trust account, the death or disability of the grantor). This waiver applies to individual shareholders, as well as shares held in joint tenancy, provided the shares were purchased before the death or disability, |
■ | To provide for certain distributions—made without IRS penalty—from a tax-deferred retirement plan, IRA or Section 403(b) custodial account, and |
■ | On certain sales effected through a Systematic Withdrawal Plan. |
62 | Target Asset Allocation Funds |
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64 | Target Asset Allocation Funds |
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66 | Target Asset Allocation Funds |
Class A Shares | |||||
Year Ended July 31, | |||||
2012(c) | 2011(c) | 2010(c) | 2009(c) | 2008(c) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.30 | $9.53 | $8.48 | $9.84 | $10.66 |
Income (loss) from investment operations: | |||||
Net investment income | .17 | .16 | .18 | .23 | .27 |
Net realized and unrealized gain (loss) on investments | .38 | .79 | .90 | (.92) | (.32) |
Total from investment operations | .55 | .95 | 1.08 | (.69) | (.05) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.16) | (.18) | (.03) | (.37) | (.27) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.16) | (.18) | (.03) | (.67) | (.77) |
Net asset value, end of year | $10.69 | $10.30 | $9.53 | $8.48 | $9.84 |
Total Return(a) | 5.53% | 10.04% | 12.72% | (6.36)% | (.75)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $86,352 | $86,746 | $75,228 | $63,491 | $68,408 |
Average net assets (000) | $84,243 | $83,395 | $70,865 | $59,479 | $65,817 |
Ratios to average net assets(d): | |||||
Expenses, including distribution and service (12b-1) fees(b) | 1.54% | 1.52% | 1.52% | 1.64%(e) | 1.43% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(e) | 1.18% |
Net investment income | 1.64% | 1.59% | 2.00% | 2.76% | 2.59% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
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Class B Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.15 | $9.41 | $8.43 | $9.82 | $10.64 |
Income (loss) from investment operations: | |||||
Net investment income | .09 | .08 | .11 | .17 | .19 |
Net realized and unrealized gain (loss) on investments | .39 | .78 | .89 | (.92) | (.32) |
Total from investment operations | .48 | .86 | 1.00 | (.75) | (.13) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.09) | (.12) | (.02) | (.34) | (.19) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.09) | (.12) | (.02) | (.64) | (.69) |
Net asset value, end of year | $10.54 | $10.15 | $9.41 | $8.43 | $9.82 |
Total Return(a) | 4.86% | 9.20% | 11.82% | (7.05)% | (1.49)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $7,856 | $13,995 | $23,212 | $32,609 | $56,853 |
Average net assets (000) | $10,840 | $18,900 | $28,746 | $39,077 | $70,345 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.29% | 2.27% | 2.27% | 2.39%(d) | 2.18% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(d) | 1.18% |
Net investment income | .93% | .82% | 1.26% | 2.08% | 1.82% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
68 | Target Asset Allocation Funds |
Class C Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.15 | $9.41 | $8.43 | $9.82 | $10.64 |
Income (loss) from investment operations: | |||||
Net investment income | .09 | .08 | .11 | .17 | .19 |
Net realized and unrealized gain (loss) on investments | .39 | .78 | .89 | (.92) | (.32) |
Total from investment operations | .48 | .86 | 1.00 | (.75) | (.13) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.09) | (.12) | (.02) | (.34) | (.19) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.09) | (.12) | (.02) | (.64) | (.69) |
Net asset value, end of year | $10.54 | $10.15 | $9.41 | $8.43 | $9.82 |
Total Return(a) | 4.86% | 9.20% | 11.82% | (7.05)% | (1.49)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $17,307 | $19,133 | $20,499 | $21,777 | $29,417 |
Average net assets (000) | $17,651 | $20,208 | $21,746 | $23,090 | $32,068 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.29% | 2.27% | 2.27% | 2.39%(d) | 2.18% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(d) | 1.18% |
Net investment income | .89% | .83% | 1.26% | 2.04% | 1.83% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
Visit our website at www.prudentialfunds.com | 69 |
Class M Shares | ||||||
Period Ended April 13, 2012(b)(e) | Year Ended July 31, | |||||
2011(b) | 2010(b) | 2009(b) | 2008(b) | 2007 | ||
Per Share Operating Performance: | ||||||
Net Asset Value, Beginning Of Period | $10.15 | $9.41 | $8.43 | $9.82 | $10.64 | $10.31 |
Income (loss) from investment operations: | ||||||
Net investment income | .07 | .08 | .12 | .17 | .19 | .17 |
Net realized and unrealized gain (loss) on investments | .31 | .78 | .88 | (.92) | (.32) | .56 |
Total from investment operations | .38 | .86 | 1.00 | (.75) | (.13) | .73 |
Less Dividends and Distributions: | ||||||
Dividends from net investment income | (.09) | (.12) | (.02) | (.34) | (.19) | (.19) |
Tax return of capital | – | – | – | (.05) | – | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) | (.21) |
Total dividends and distributions | (.09) | (.12) | (.02) | (.64) | (.69) | (.40) |
Net asset value, end of period | $10.44 | $10.15 | $9.41 | $8.43 | $9.82 | $10.64 |
Total Return(a) | 3.86% | 9.20% | 11.82% | (7.06)% | (1.49)% | 7.12% |
Ratios/Supplemental Data: | ||||||
Net assets, end of period (000) | $2 | $50 | $168 | $479 | $1,047 | $2,936 |
Average net assets (000) | $22 | $94 | $339 | $654 | $2,357 | $3,219 |
Ratios to average net assets(c): | ||||||
Expenses, including distribution and service (12b-1) fees | 2.29%(f) | 2.27% | 2.27% | 2.39%(d) | 2.18% | 2.10% |
Expenses, excluding distribution and service (12b-1) fees | 1.29%(f) | 1.27% | 1.27% | 1.39%(d) | 1.18% | 1.10% |
Net investment income | .75%(f) | .80% | 1.28% | 2.09% | 1.81% | 1.60% |
Portfolio turnover rate | 248%(g)(h) | 188% | 200% | 356% | 353% | 395% |
70 | Target Asset Allocation Funds |
Class R Shares | |||||
Year Ended July 31, | |||||
2012(c) | 2011(c) | 2010(c) | 2009(c) | 2008(c) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.28 | $9.51 | $8.48 | $9.85 | $10.67 |
Income (loss) from investment operations: | |||||
Net investment income | .14 | .13 | .16 | .24 | .24 |
Net realized and unrealized gain (loss) on investments | .39 | .80 | .89 | (.95) | (.31) |
Total from investment operations | .53 | .93 | 1.05 | (.71) | (.07) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.14) | (.16) | (.02) | (.36) | (.25) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.14) | (.16) | (.02) | (.66) | (.75) |
Net asset value, end of year | $10.67 | $10.28 | $9.51 | $8.48 | $9.85 |
Total Return(a) | 5.29% | 9.84% | 12.44% | (6.59)% | (.99)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $231 | $232 | $687 | $721 | $4,015 |
Average net assets (000) | $219 | $669 | $686 | $1,255 | $4,787 |
Ratios to average net assets(d): | |||||
Expenses, including distribution and service (12b-1) fees(b) | 1.79% | 1.77% | 1.77% | 1.89%(e) | 1.68% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(e) | 1.18% |
Net investment income | 1.39% | 1.29% | 1.76% | 2.70% | 2.33% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
Visit our website at www.prudentialfunds.com | 71 |
Class X Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.16 | $9.41 | $8.43 | $9.82 | $10.63 |
Income (loss) from investment operations: | |||||
Net investment income | .09 | .08 | .12 | .18 | .21 |
Net realized and unrealized gain (loss) on investments | .38 | .79 | .88 | (.93) | (.31) |
Total from investment operations | .47 | .87 | 1.00 | (.75) | (.10) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.09) | (.12) | (.02) | (.34) | (.21) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.09) | (.12) | (.02) | (.64) | (.71) |
Net asset value, end of year | $10.54 | $10.16 | $9.41 | $8.43 | $9.82 |
Total Return(a) | 4.75% | 9.31% | 11.82% | (7.05)% | (1.22)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $93 | $123 | $769 | $977 | $2,120 |
Average net assets (000) | $108 | $391 | $863 | $1,342 | $2,441 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.29% | 2.27% | 2.27% | 2.37%(d) | 1.99% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(d) | 1.18% |
Net investment income | .90% | .78% | 1.26% | 2.13% | 2.02% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
72 | Target Asset Allocation Funds |
Class Z Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.35 | $9.57 | $8.50 | $9.85 | $10.67 |
Income (loss) from investment operations: | |||||
Net investment income | .20 | .19 | .21 | .26 | .30 |
Net realized and unrealized gain (loss) on investments | .39 | .79 | .89 | (.93) | (.32) |
Total from investment operations | .59 | .98 | 1.10 | (.67) | (.02) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.19) | (.20) | (.03) | (.38) | (.30) |
Tax return of capital | – | – | – | (.05) | – |
Distributions from net realized gains on investments | – | – | – | (.25) | (.50) |
Total dividends and distributions | (.19) | (.20) | (.03) | (.68) | (.80) |
Net asset value, end of year | $10.75 | $10.35 | $9.57 | $8.50 | $9.85 |
Total Return(a) | 5.85% | 10.31% | 12.97% | (6.14)% | (.50)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $3,717 | $3,921 | $2,877 | $3,156 | $5,610 |
Average net assets (000) | $4,379 | $3,567 | $3,031 | $3,809 | $5,771 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(d) | 1.18% |
Expenses, excluding distribution and service (12b-1) fees | 1.29% | 1.27% | 1.27% | 1.39%(d) | 1.18% |
Net investment income | 1.90% | 1.84% | 2.26% | 3.10% | 2.85% |
Portfolio turnover rate | 248% | 188% | 200% | 356% | 353% |
Visit our website at www.prudentialfunds.com | 73 |
Class A Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.12 | $9.88 | $8.97 | $10.72 | $12.75 |
Income (loss) from investment operations: | |||||
Net investment income | .13 | .13 | .14 | .19 | .25 |
Net realized and unrealized gain (loss) on investment transactions | .09 | 1.20 | .90 | (1.59) | (1.05) |
Total from investment operations | .22 | 1.33 | 1.04 | (1.40) | (.80) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.11) | (.09) | (.13) | (.25) | (.24) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.11) | (.09) | (.13) | (.35) | (1.23) |
Net asset value, end of year | $11.23 | $11.12 | $9.88 | $8.97 | $10.72 |
Total Return(a) | 2.05% | 13.51% | 11.67% | (12.78)% | (7.02)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $170,788 | $196,985 | $164,925 | $142,715 | $162,212 |
Average net assets (000) | $188,087 | $186,704 | $159,007 | $131,169 | $169,156 |
Ratios to average net assets(d): | |||||
Expenses, including distribution and service (12b-1) fees(c) | 1.41% | 1.37% | 1.41% | 1.48%(e) | 1.39% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(e) | 1.14% |
Net investment income | 1.19% | 1.16% | 1.39% | 2.18% | 2.05% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
74 | Target Asset Allocation Funds |
Class B Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.06 | $9.84 | $8.97 | $10.66 | $12.70 |
Income (loss) from investment operations: | |||||
Net investment income | .05 | .04 | .06 | .13 | .16 |
Net realized and unrealized gain (loss) on investment transactions | .09 | 1.20 | .91 | (1.58) | (1.04) |
Total from investment operations | .14 | 1.24 | .97 | (1.45) | (.88) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.03) | (.02) | (.10) | (.14) | (.17) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.03) | (.02) | (.10) | (.24) | (1.16) |
Net asset value, end of year | $11.17 | $11.06 | $9.84 | $8.97 | $10.66 |
Total Return(a) | 1.26% | 12.57% | 10.82% | (13.43)% | (7.72)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $24,968 | $36,955 | $52,726 | $67,013 | $110,784 |
Average net assets (000) | $29,979 | $46,927 | $62,087 | $76,425 | $139,512 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.16% | 2.12% | 2.16% | 2.23%(d) | 2.14% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(d) | 1.14% |
Net investment income | .45% | .41% | .65% | 1.46% | 1.30% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
Visit our website at www.prudentialfunds.com | 75 |
Class C Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.06 | $9.84 | $8.97 | $10.66 | $12.70 |
Income (loss) from investment operations: | |||||
Net investment income | .05 | .04 | .06 | .12 | .16 |
Net realized and unrealized gain (loss) on investment transactions | .09 | 1.20 | .91 | (1.57) | (1.04) |
Total from investment operations | .14 | 1.24 | .97 | (1.45) | (.88) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.03) | (.02) | (.10) | (.14) | (.17) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.03) | (.02) | (.10) | (.24) | (1.16) |
Net asset value, end of year | $11.17 | $11.06 | $9.84 | $8.97 | $10.66 |
Total Return(a) | 1.26% | 12.57% | 10.82% | (13.43)% | (7.72)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $50,632 | $58,827 | $63,077 | $68,208 | $100,797 |
Average net assets (000) | $52,831 | $62,754 | $68,051 | $72,815 | $119,437 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.16% | 2.12% | 2.16% | 2.23%(d) | 2.14% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(d) | 1.14% |
Net investment income | .44% | .41% | .64% | 1.45% | 1.30% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
76 | Target Asset Allocation Funds |
Class M Shares | ||||||
Period Ended April 13, 2012(b)(e) | Year Ended July 31, | |||||
2011(b) | 2010(b) | 2009(b) | 2008(b) | 2007(b) | ||
Per Share Operating Performance: | ||||||
Net Asset Value, Beginning Of Year | $11.04 | $9.81 | $8.95 | $10.64 | $12.66 | $11.85 |
Income (loss) from investment operations: | ||||||
Net investment income | .04 | .04 | .06 | .13 | .16 | .12 |
Net realized and unrealized gain (loss) on investment transactions | .16 | 1.21 | .90 | (1.58) | (1.02) | 1.30 |
Total from investment operations | .20 | 1.25 | .96 | (1.45) | (.86) | 1.42 |
Less Dividends and Distributions: | ||||||
Dividends from net investment income | (.03) | (.02) | (.10) | (.14) | (.17) | (.13) |
Distributions from net realized gains | – | – | – | (.10) | (.99) | (.48) |
Total dividends and distributions | (.03) | (.02) | (.10) | (.24) | (1.16) | (.61) |
Net asset value, end of year | $11.21 | $11.04 | $9.81 | $8.95 | $10.64 | $12.66 |
Total Return(a) | 1.81% | 12.71% | 10.74% | (13.46)% | (7.58)% | 12.21% |
Ratios/Supplemental Data: | ||||||
Net assets, end of year (000) | $13 | $230 | $1,100 | $2,083 | $4,709 | $8,277 |
Average net assets (000) | $102 | $702 | $1,717 | $2,764 | $6,746 | $8,529 |
Ratios to average net assets(c): | ||||||
Expenses, including distribution and service (12b-1) fees | 2.16%(f) | 2.12% | 2.16% | 2.23%(d) | 2.14% | 1.93% |
Expenses, excluding distribution and service (12b-1) fees | 1.16%(f) | 1.12% | 1.16% | 1.23%(d) | 1.14% | .93% |
Net investment income | .33%(f) | .38% | .64% | 1.47% | 1.29% | .96% |
Portfolio turnover rate | 174%(g)(h) | 151% | 140% | 249% | 213% | 195% |
Visit our website at www.prudentialfunds.com | 77 |
Class R Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.10 | $9.87 | $8.97 | $10.73 | $12.76 |
Income (loss) from investment operations: | |||||
Net investment income | .10 | .09 | .11 | .17 | .22 |
Net realized and unrealized gain (loss) on investment transactions | .09 | 1.21 | .91 | (1.60) | (1.05) |
Total from investment operations | .19 | 1.30 | 1.02 | (1.43) | (.83) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.08) | (.07) | (.12) | (.23) | (.21) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.08) | (.07) | (.12) | (.33) | (1.20) |
Net asset value, end of year | $11.21 | $11.10 | $9.87 | $8.97 | $10.73 |
Total Return(a) | 1.78% | 13.16% | 11.43% | (13.03)% | (7.25)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $311 | $341 | $578 | $761 | $1,950 |
Average net assets (000) | $306 | $497 | $632 | $1,024 | $3,358 |
Ratios to average net assets(d): | |||||
Expenses, including distribution and service (12b-1) fees(c) | 1.66% | 1.62% | 1.66% | 1.73%(e) | 1.64% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(e) | 1.14% |
Net investment income | .94% | .89% | 1.15% | 1.97% | 1.78% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
78 | Target Asset Allocation Funds |
Class X Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.12 | $9.88 | $8.97 | $10.66 | $12.69 |
Income (loss) from investment operations: | |||||
Net investment income | .13 | .12 | .10 | .13 | .16 |
Net realized and unrealized gain (loss) on investment transactions | .08 | 1.21 | .91 | (1.58) | (1.03) |
Total from investment operations | .21 | 1.33 | 1.01 | (1.45) | (.87) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.11) | (.09) | (.10) | (.14) | (.17) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.11) | (.09) | (.10) | (.24) | (1.16) |
Capital Contribution | –(e) | –(e) | –(e) | – | – |
Net asset value, end of year | $11.22 | $11.12 | $9.88 | $8.97 | $10.66 |
Total Return(a) | 1.96% | 13.51% | 11.28% | (13.43)% | (7.64)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $367 | $777 | $1,430 | $2,235 | $4,299 |
Average net assets (000) | $505 | $1,112 | $1,847 | $2,858 | $5,199 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 1.41% | 1.37% | 1.77% | 2.21%(d) | 2.08% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(d) | 1.14% |
Net investment income | 1.20% | 1.15% | 1.04% | 1.48% | 1.35% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
Visit our website at www.prudentialfunds.com | 79 |
Class Z Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.14 | $9.90 | $8.98 | $10.74 | $12.77 |
Income (loss) from investment operations: | |||||
Net investment income | .16 | .15 | .16 | .21 | .28 |
Net realized and unrealized gain (loss) on investment transactions | .08 | 1.21 | .90 | (1.60) | (1.05) |
Total from investment operations | .24 | 1.36 | 1.06 | (1.39) | (.77) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.14) | (.12) | (.14) | (.27) | (.27) |
Distributions from net realized gains | – | – | – | (.10) | (.99) |
Total dividends and distributions | (.14) | (.12) | (.14) | (.37) | (1.26) |
Net asset value, end of year | $11.24 | $11.14 | $9.90 | $8.98 | $10.74 |
Total Return(a) | 2.22% | 13.75% | 11.90% | (12.55)% | (6.78)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $3,464 | $3,539 | $3,848 | $4,786 | $13,558 |
Average net assets (000) | $3,240 | $3,846 | $4,425 | $8,208 | $14,407 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(d) | 1.14% |
Expenses, excluding distribution and service (12b-1) fees | 1.16% | 1.12% | 1.16% | 1.23%(d) | 1.14% |
Net investment income | 1.44% | 1.42% | 1.64% | 2.47% | 2.30% |
Portfolio turnover rate | 174% | 151% | 140% | 249% | 213% |
80 | Target Asset Allocation Funds |
Class A Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.49 | $9.73 | $8.77 | $11.52 | $14.62 |
Income (loss) from investment operations: | |||||
Net investment income | .07 | .05 | .04 | .09 | .13 |
Net realized and unrealized gain (loss) on investments | (.09) | 1.71 | .98 | (2.73) | (1.90) |
Total from investment operations | (.02) | 1.76 | 1.02 | (2.64) | (1.77) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.03) | – | (.06) | (.11) | (.07) |
Distributions from net realized gains | – | – | – | –(e) | (1.26) |
Total dividends and distributions | (.03) | – | (.06) | (.11) | (1.33) |
Net asset value, end of year | $11.44 | $11.49 | $9.73 | $8.77 | $11.52 |
Total Return(a) | (.14)% | 18.09% | 11.69% | (22.71)% | (13.25)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $105,678 | $114,839 | $99,938 | $95,405 | $124,579 |
Average net assets (000) | $105,524 | $112,821 | $102,324 | $89,232 | $135,539 |
Ratios to average net assets(d): | |||||
Expenses, including distribution and service (12b-1) fees(c) | 1.55% | 1.51% | 1.57% | 1.58% | 1.36% |
Expenses, excluding distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income | .61% | .48% | .38% | 1.03% | 1.01% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
Visit our website at www.prudentialfunds.com | 81 |
Class B Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.55 | $9.00 | $8.13 | $10.68 | $13.67 |
Income (loss) from investment operations: | |||||
Net investment income (loss) | (.01) | (.03) | (.03) | .02 | .03 |
Net realized and unrealized gain (loss) on investments | (.09) | 1.58 | .91 | (2.52) | (1.76) |
Total from investment operations | (.10) | 1.55 | .88 | (2.50) | (1.73) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | – | – | (.01) | (.05) | – |
Distributions from net realized gains | – | – | – | –(d) | (1.26) |
Total dividends and distributions | – | – | (.01) | (.05) | (1.26) |
Net asset value, end of year | $10.45 | $10.55 | $9.00 | $8.13 | $10.68 |
Total Return(a) | (.95)% | 17.22% | 10.80% | (23.29)% | (13.86)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $18,005 | $24,634 | $29,184 | $33,691 | $58,763 |
Average net assets (000) | $20,467 | $28,562 | $33,068 | $37,140 | $78,596 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.30% | 2.26% | 2.32% | 2.33% | 2.11% |
Expenses, excluding distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income (loss) | (.13)% | (.27)% | (.36)% | .31% | .26% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
82 | Target Asset Allocation Funds |
Class C Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.55 | $9.00 | $8.13 | $10.68 | $13.67 |
Income (loss) from investment operations: | |||||
Net investment income (loss) | (.01) | (.03) | (.03) | .02 | .03 |
Net realized and unrealized gain (loss) on investments | (.08) | 1.58 | .91 | (2.52) | (1.76) |
Total from investment operations | (.09) | 1.55 | .88 | (2.50) | (1.73) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | – | – | (.01) | (.05) | – |
Distributions from net realized gains | – | – | – | –(d) | (1.26) |
Total dividends and distributions | – | – | (.01) | (.05) | (1.26) |
Net asset value, end of year | $10.46 | $10.55 | $9.00 | $8.13 | $10.68 |
Total Return(a) | (.85)% | 17.22% | 10.80% | (23.29)% | (13.86)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $35,215 | $42,214 | $43,511 | $48,649 | $76,714 |
Average net assets (000) | $37,161 | $44,983 | $48,040 | $51,040 | $96,952 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 2.30% | 2.26% | 2.32% | 2.33% | 2.11% |
Expenses, excluding distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income (loss) | (.14)% | (.27)% | (.37)% | .30% | .26% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
Visit our website at www.prudentialfunds.com | 83 |
Class M Shares | ||||||
Period Ended April 13, 2012(b)(e) | Year Ended July 31, | |||||
2011(b) | 2010(b) | 2009(b) | 2008(b) | 2007(b) | ||
Per Share Operating Performance: | ||||||
Net Asset Value, Beginning Of Period | $10.58 | $9.02 | $8.15 | $10.70 | $13.70 | $12.54 |
Income (loss) from investment operations: | ||||||
Net investment income (loss) | (.02) | (.03) | (.03) | .03 | .03 | (.01) |
Net realized and unrealized gain (loss) on investments | .19 | 1.59 | .91 | (2.53) | (1.77) | 2.01 |
Total from investment operations | .17 | 1.56 | .88 | (2.50) | (1.74) | 2.00 |
Less Dividends and Distributions: | ||||||
Dividends from net investment income | – | – | (.01) | (.05) | – | – |
Distributions from net realized gains | – | – | – | –(d) | (1.26) | (.84) |
Total dividends and distributions | – | – | (.01) | (.05) | (1.26) | (.84) |
Net asset value, end of period | $10.75 | $10.58 | $9.02 | $8.15 | $10.70 | $13.70 |
Total Return(a) | 1.61% | 17.29% | 10.77% | (23.24)% | (13.91)% | 16.28% |
Ratios/Supplemental Data: | ||||||
Net assets, end of period (000) | $15 | $308 | $1,004 | $2,154 | $4,712 | $10,851 |
Average net assets (000) | $135 | $671 | $1,680 | $2,773 | $8,028 | $10,882 |
Ratios to average net assets(c): | ||||||
Expenses, including distribution and service (12b-1) fees | 2.32%(f) | 2.26% | 2.32% | 2.33% | 2.11% | 2.10% |
Expenses, excluding distribution and service (12b-1) fees | 1.32%(f) | 1.26% | 1.32% | 1.33% | 1.11% | 1.10% |
Net investment income (loss) | (.19)%(f) | (.32)% | (.36)% | .33% | .25% | (.10)% |
Portfolio turnover rate | 68%(g)(h) | 73% | 97% | 135% | 83% | 71% |
84 | Target Asset Allocation Funds |
Class R Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.38 | $9.66 | $8.71 | $11.44 | $14.52 |
Income (loss) from investment operations: | |||||
Net investment income (loss) | .06 | .01 | .01 | .07 | .10 |
Net realized and unrealized gain (loss) on investments | (.09) | 1.71 | .98 | (2.71) | (1.88) |
Total from investment operations | (.03) | 1.72 | .99 | (2.64) | (1.78) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | –(d) | – | (.04) | (.09) | (.04) |
Distributions from net realized gains | – | – | – | –(d) | (1.26) |
Total dividends and distributions | –(d) | – | (.04) | (.09) | (1.30) |
Net asset value, end of year | $11.35 | $11.38 | $9.66 | $8.71 | $11.44 |
Total Return(a) | (.24)% | 17.81% | 11.40% | (22.90)% | (13.42)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $2 | $2 | $80 | $225 | $323 |
Average net assets (000) | $2 | $74 | $122 | $203 | $339 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees(e) | 1.65% | 1.76% | 1.82% | 1.83% | 1.61% |
Expenses, excluding distribution and service (12b-1) fees | 1.15% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income (loss) | .55% | .14% | .14% | .82% | .77% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
Visit our website at www.prudentialfunds.com | 85 |
Class X Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $10.71 | $9.07 | $8.17 | $10.68 | $13.68 |
Income (loss) from investment operations: | |||||
Net investment income (loss) | .06 | .04 | .03 | .04 | .03 |
Net realized and unrealized gain (loss) on investments | (.08) | 1.60 | .93 | (2.50) | (1.77) |
Total from investment operations | (.02) | 1.64 | .96 | (2.46) | (1.74) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.03) | – | (.06) | (.05) | – |
Distributions from net realized gains | – | – | – | –(d) | (1.26) |
Total dividends and distributions | (.03) | – | (.06) | (.05) | (1.26) |
Capital Contributions | – | –(d) | –(d) | –(d) | – |
Net asset value, end of year | $10.66 | $10.71 | $9.07 | $8.17 | $10.68 |
Total Return(a) | (.15)% | 18.08% | 11.71% | (22.91)% | (13.93)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $189 | $534 | $1,293 | $1,705 | $3,759 |
Average net assets (000) | $326 | $846 | $1,593 | $2,123 | $4,440 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 1.55% | 1.51% | 1.57% | 2.09% | 2.11% |
Expenses, excluding distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income (loss) | .59% | .44% | .39% | .56% | .26% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
86 | Target Asset Allocation Funds |
Class Z Shares | |||||
Year Ended July 31, | |||||
2012(b) | 2011(b) | 2010(b) | 2009(b) | 2008(b) | |
Per Share Operating Performance: | |||||
Net Asset Value, Beginning Of Year | $11.81 | $9.98 | $8.99 | $11.81 | $14.95 |
Income (loss) from investment operations: | |||||
Net investment income | .10 | .08 | .06 | .12 | .17 |
Net realized and unrealized gain (loss) on investments | (.09) | 1.75 | 1.02 | (2.81) | (1.94) |
Total from investment operations | .01 | 1.83 | 1.08 | (2.69) | (1.77) |
Less Dividends and Distributions: | |||||
Dividends from net investment income | (.06) | – | (.09) | (.13) | (.11) |
Distributions from net realized gains | – | – | – | –(d) | (1.26) |
Total dividends and distributions | (.06) | – | (.09) | (.13) | (1.37) |
Net asset value, end of year | $11.76 | $11.81 | $9.98 | $8.99 | $11.81 |
Total Return(a) | .12% | 18.34% | 11.98% | (22.54)% | (13.00)% |
Ratios/Supplemental Data: | |||||
Net assets, end of year (000) | $1,997 | $1,851 | $1,558 | $1,741 | $5,234 |
Average net assets (000) | $1,639 | $1,707 | $1,600 | $2,938 | $7,414 |
Ratios to average net assets(c): | |||||
Expenses, including distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Expenses, excluding distribution and service (12b-1) fees | 1.30% | 1.26% | 1.32% | 1.33% | 1.11% |
Net investment income | .87% | .73% | .62% | 1.32% | 1.25% |
Portfolio turnover rate | 68% | 73% | 97% | 135% | 83% |
Visit our website at www.prudentialfunds.com | 87 |
FOR MORE INFORMATION Please read this Prospectus before you invest in the Fund and keep it for future reference. For information or shareholder questions contact: | |
■ MAIL Prudential Mutual Fund Services LLC PO Box 9658 Providence, RI 02940 ■ TELEPHONE (800) 225-1852 (973) 367-3529 (from outside the U.S.) ■ WEBSITE www.prudentialfunds.com | ■ OUTSIDE BROKERS SHOULD CONTACT Prudential Investment Management Services LLC PO Box 9658 Providence, RI 02940 ■ TELEPHONE (800) 778-8769 |
■ E-DELIVERY To receive your mutual fund documents on-line, go to www.prudentialfunds.com/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. |
You can also obtain copies of Fund documents from the Securities and Exchange Commission as follows: | |
■ MAIL Securities and Exchange Commission Public Reference Section 100 F Street, N.E. Washington, DC 20549-1520 ■ ELECTRONIC REQUEST publicinfo@sec.gov (The SEC charges a fee to copy documents) | ■ IN PERSON Public Reference Room located at 100 F Street, N.E. in Washington, DC For hours of operation, call (202) 551-8090 ■ VIA THE INTERNET on the EDGAR Database at www.sec.gov |
The Annual and Semi-Annual Reports and the SAI contain additional information about the Fund. Shareholders may obtain free copies of the SAI, Annual Report and Semi-Annual Report as well as other information about the Fund and may make other shareholder inquiries through the telephone number, address and website listed above. | |
■ STATEMENT OF ADDITIONAL INFORMATION (SAI) (incorporated by reference into this Prospectus) ■ SEMI-ANNUAL REPORT | ■ ANNUAL REPORT (contains a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the last fiscal year) |
Conservative Allocation Fund | ||||||
Share Class | A | B | C | R | X | Z |
NASDAQ | PCGAX | PBCFX | PCCFX | PCLRX | N/A | PDCZX |
CUSIP | 87612A104 | 87612A203 | 87612A302 | 87612A401 | 87612A708 | 87612A500 |
Moderate Allocation Fund | ||||||
Share Class | A | B | C | R | X | Z |
NASDAQ | PAMGX | DMGBX | PIMGX | SPMRX | N/A | PDMZX |
CUSIP | 87612A807 | 87612A880 | 87612A872 | 87612A864 | 87612A831 | 87612A856 |
Growth Allocation Fund | ||||||
Share Class | A | B | C | R | X | Z |
NASDAQ | PHGAX | PIHGX | PHGCX | PGARX | N/A | PDHZX |
CUSIP | 87612A823 | 87612A815 | 87612A799 | 87612A781 | 87612A757 | 87612A773 |
■ | Target Conservative Allocation Fund (Conservative Allocation Fund) |
■ | Target Moderate Allocation Fund (Moderate Allocation Fund) |
■ | Target Growth Allocation Fund (Growth Allocation Fund) |
Term | Definition |
ADR | American Depositary Receipt |
ADS | American Depositary Share |
Board | Fund’s Board of Directors or Trustees |
Board Member | A trustee or director of the Fund’s Board |
CFTC | U.S. Commodity Futures Trading Commission |
Code | Internal Revenue Code of 1986, as amended |
CDO | Collateralized Debt Obligation |
CMO | Collateralized Mortgage Obligation |
ETF | Exchange-Traded Fund |
EDR | European Depositary Receipt |
Fannie Mae | Federal National Mortgage Association |
FDIC | Federal Deposit Insurance Corporation |
Fitch | Fitch, Inc. |
Freddie Mac | Federal Home Loan Mortgage Corporation |
GDR | Global Depositary Receipt |
Ginnie Mae | Government National Mortgage Association |
IPO | Initial Public Offering |
IRS | Internal Revenue Service |
1933 Act | Securities Act of 1933, as amended |
1934 Act | Securities Exchange Act of 1934, as amended |
1940 Act | Investment Company Act of 1940, as amended |
LIBOR | London Interbank Offered Rate |
Manager or PI | Prudential Investments LLC |
Moody’s | Moody’s Investor Services, Inc. |
NASDAQ | National Association of Securities Dealers Automated Quotations System |
NAV | Net Asset Value |
NYSE | New York Stock Exchange |
OTC | Over the Counter |
PMFS | Prudential Mutual Fund Services LLC |
Term | Definition |
REIT | Real Estate Investment Trust |
RIC | Regulated Investment Company, as the term is used in the Internal Revenue Code of 1986, as amended |
S&P | Standard & Poor’s Corporation |
SEC | U.S. Securities & Exchange Commission |
World Bank | International Bank for Reconstruction and Development |
■ | Conservative Allocation Fund and Moderate Allocation Fund may each invest up to 5% of total assets in event-linked bonds. |
■ | Conservative Allocation Fund and Moderate Allocation Fund may each invest up to 5% of total assets in CDOs. |
■ | Conservative Allocation Fund and Moderate Allocation Fund may each invest up to 5% of total assets in corporate loans. |
■ | Each Fund may invest up to 5% of total assets in any one ETF, and up to 10% in ETFs or other mutual funds collectively. |
■ | With respect to each Fund, the amount of Fund assets which may be utilized for short sales purposes is subject to the following restrictions: no more than 25% of each Fund’s total assets will be, when added together, (1) deposited as collateral for the obligation to replace securities borrowed to effect short sales, and (2) segregated in connection with short sales. |
■ | Each Fund may invest up to 10% of its net assets in municipal securities. |
■ | Junk bonds are issued by less creditworthy issuers. These securities are vulnerable to adverse changes in the issuer's economic condition and to general economic conditions. Issuers of junk bonds may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments or the unavailability of additional financing. |
■ | The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. If the issuer experiences financial stress, it may be unable to meet its debt obligations. |
■ | Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its obligations, the senior obligations are generally paid off before the junior obligations. |
■ | Junk bonds frequently have redemption features that permit an issuer to repurchase the security from the Fund before it matures. If an issuer redeems the junk bonds, the Fund may have to invest the proceeds in bonds with lower yields and may lose income. |
■ | Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments may have a greater impact on the prices of junk bonds than on other higher rated fixed income securities. |
■ | Junk bonds may be less liquid than higher rated fixed income securities even under normal economic conditions. There are fewer dealers in the junk bond market, and there may be significant differences in the prices quoted for junk bonds by the dealers. Because they are less liquid, judgment may play a greater role in valuing certain of the Fund’s portfolio securities than in the case of securities trading in a more liquid market. |
■ | The Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer. |
Independent Board Members(1) | ||
Name, Address, Age Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held |
Kevin J. Bannon (60) Board Member Portfolios Overseen: 61 | Managing Director (since April 2008) and Chief Investment Officer (since October 2008) 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 (since September 2008). |
Linda W. Bynoe (60) Board Member Portfolios Overseen: 61 | President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co (broker-dealer). | Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009). |
Michael S. Hyland, CFA (66) Board Member Portfolios Overseen: 61 | Independent Consultant (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. |
Douglas H. McCorkindale (73) Board Member Portfolios Overseen: 61 | Formerly Chairman (February 2001-June 2006), Chief Executive Officer (June 2000-July 2005), President (September 1997-July 2005) and Vice Chairman (March 1984-May 2000) of Gannett Co. Inc. (publishing and media). | Director of Lockheed Martin Corp. (aerospace and defense) (since May 2001). |
Stephen P. Munn (70) Board Member Portfolios Overseen: 61 | Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products). | Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products). |
Richard A. Redeker (69) Board Member & Independent Chair Portfolios Overseen: 61 | Retired Mutual Fund Senior Executive (44 years); Management Consultant; Independent Directors Council (organization of 2,800 Independent Mutual Fund Directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council. | None. |
Robin B. Smith (72) Board Member Portfolios Overseen: 61 | Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); Member of the Board of Directors of ADLPartner (marketing) (since December 2010); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House. | Formerly Director of BellSouth Corporation (telecommunications) (1992-2006). |
Stephen G. Stoneburn (69) Board Member Portfolios Overseen: 61 | Chairman, (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989). | None. |
Interested Board Members(1) | ||
Name, Address, Age Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held |
Stuart S. Parker (49) Board Member & President Portfolios Overseen: 61 | President of Prudential Investments LLC (since January 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005 - December 2011). | None. |
Interested Board Members(1) | ||
Name, Address, Age Position(s) Portfolios Overseen | Principal Occupation(s) During Past Five Years | Other Directorships Held |
Scott E. Benjamin (39) Board Member & Vice President Portfolios Overseen: 61 | Executive Vice President (since June 2009) of Prudential Investments LLC and Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006). | None. |
Fund Officers(a)(1) | |
Name, Address and Age Position with Fund | Principal Occupation(s) During Past Five Years |
Judy A. Rice (64) Vice President | President, Chief Executive Officer (May 2011-Present) and Executive Vice President (December 2008-May 2011) of Prudential Investment Management Services LLC; Formerly President, Chief Executive Officer, Chief Operating Officer and Officer-In-Charge (February 2003-December 2011) of Prudential Investments LLC; formerly President, Chief Executive Officer and Officer-In-Charge (April 2003-December 2011) of Prudential Mutual Fund Services LLC (PMFS); formerly Member of the Board of Directors of Jennison Associates LLC (November 2010-December 2011); formerly Vice President (February 1999-April 2006) of Prudential Investment Management Services LLC; formerly President, COO, CEO and Manager of PIFM Holdco, LLC (April 2006-December 2011); formerly President, Chief Executive Officer, Chief Operating Officer and Officer-In-Charge (May 2003-June 2005) and Director (May 2003-March 2006) and Executive Vice President (June 2005-March 2006) of AST Investment Services, Inc.; Member of Board of Governors of the Investment Company Institute. |
Raymond A. O’Hara (56) Chief Legal Officer | Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of PMFS (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.). |
Deborah A. Docs (54) Secretary | Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc. |
Jonathan D. Shain (54) Assistant Secretary | Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc. |
Claudia DiGiacomo (37) Assistant Secretary | Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004). |
Andrew R. French (49) Assistant Secretary | Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of PMFS. |
Amanda S. Ryan (34) Assistant Secretary | Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray (2008-2012). |
Timothy J. Knierim (53) Chief Compliance Officer | Chief Compliance Officer of Prudential Investment Management, Inc. (since July 2007); formerly Chief Risk Officer of Prudential Investment Management, Inc. and Prudential Investments LLC (2002-2007) and formerly Chief Ethics Officer of Prudential Investment Management, Inc. and Prudential Investments LLC (2006-2007). |
Valerie M. Simpson (54) Deputy Chief Compliance Officer | Chief Compliance Officer (since April 2007) of Prudential Investments LLC and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance. |
Theresa C. Thompson (50) Deputy Chief Compliance Officer | Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004). |
Fund Officers(a)(1) | |
Name, Address and Age Position with Fund | Principal Occupation(s) During Past Five Years |
Richard W. Kinville (44) Anti-Money Laundering Compliance Officer | Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial's Internal Audit Department and Manager in AXA's Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009). |
Grace C. Torres (53) Treasurer and Principal Financial and Accounting Officer | Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of Prudential Investments LLC; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc. |
M. Sadiq Peshimam (48) Assistant Treasurer | Vice President (since 2005) of Prudential Investments LLC. |
Peter Parrella (54) Assistant Treasurer | Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004). |
■ | Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC. |
■ | Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077. |
■ | 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 only 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 Prudential Investments LLC. The investment companies for which PI serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential's Gibraltar Fund, Inc. and the Advanced Series Trust. |
Compensation Received by Independent Board Members | ||||
Name | Aggregate Fiscal Year Compensation from Funds | Pension or Retirement Benefits Accrued as Part of Fund Expenses | Estimated Annual Benefits Upon Retirement | Total Compensation from Fund and Fund Complex for Most Recent Calendar Year |
Kevin J. Bannon | $5,217 | None | None | $190,000 (31/60)* |
Linda W. Bynoe** | $5,130 | None | None | $187,000 (31/60)* |
Compensation Received by Independent Board Members | ||||
Name | Aggregate Fiscal Year Compensation from Funds | Pension or Retirement Benefits Accrued as Part of Fund Expenses | Estimated Annual Benefits Upon Retirement | Total Compensation from Fund and Fund Complex for Most Recent Calendar Year |
Michael S. Hyland | $5,227 | None | None | $193,000 (31/60)* |
Douglas H. McCorkindale** | $5,150 | None | None | $188,000 (31/60)* |
Stephen P. Munn | $5,247 | None | None | $194,000 (31/60)* |
Richard A. Redeker | $5,617 | None | None | $212,000 (31/60)* |
Robin B. Smith** | $5,150 | None | None | $188,000 (31/60)* |
Stephen G. Stoneburn** | $5,197 | None | None | $189,000 (31/60)* |
Board Committee Meetings (for most recently completed fiscal year) | ||
Audit Committee | Nominating & Governance Committee | Target Investment Committee |
4 | 4 | 4 |
Name | Dollar Range of Equity Securities in each Fund | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Board Member in Fund Complex |
Board Member Share Ownership: Independent Board Members | ||
Kevin J. Bannon | None | Over $100,000 |
Linda W. Bynoe | None | Over $100,000 |
Michael S. Hyland | None | Over $100,000 |
Douglas H. McCorkindale | Target Growth Allocation Fund ($10,001-$50,000) | Over $100,000 |
Stephen P. Munn | None | Over $100,000 |
Richard A. Redeker | None | Over $100,000 |
Robin B. Smith | None | Over $100,000 |
Stephen G. Stoneburn | None | Over $100,000 |
Board Member Share Ownership: Interested Board Members | ||
Stuart S. Parker | None | Over $100,000 |
Name | Dollar Range of Equity Securities in each Fund | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Board Member in Fund Complex |
Board Member Share Ownership: Interested Board Members | ||
Scott E. Benjamin | None | Over $100,000 |
■ | the salaries and expenses of all of its and the Funds' personnel except the fees and expenses of Independent Board Members; |
■ | all expenses incurred by the Manager or the Funds in connection with managing the ordinary course of a Fund’s business, other than those assumed by the Funds as described below; and |
■ | the fees, costs and expenses payable to any investment subadviser pursuant to a subadvisory agreement between PI and such investment subadviser. |
■ | the fees and expenses incurred by the Funds in connection with the management of the investment and reinvestment of the Funds' assets payable to the Manager; |
■ | the fees and expenses of Independent Board Members; |
■ | the fees and certain expenses of the Custodian and transfer and dividend disbursing agent, including the cost of providing records to the Manager in connection with its obligation of maintaining required records of the Funds and of pricing the Funds' shares; |
■ | the charges and expenses of the Funds' legal counsel and independent auditors and of legal counsel to the Independent Board Members; |
■ | brokerage commissions and any issue or transfer taxes chargeable to the Funds in connection with its securities (and futures, if applicable) transactions; |
■ | all taxes and corporate fees payable by the Funds to governmental agencies; |
■ | the fees of any trade associations of which the Funds may be a member; |
■ | the cost of share certificates representing, and/or non-negotiable share deposit receipts evidencing, shares of the Funds; |
■ | the cost of fidelity, directors and officers and errors and omissions insurance; |
■ | the fees and expenses involved in registering and maintaining registration of the Funds and of its shares with the SEC and paying notice filing fees under state securities laws, including the preparation and printing of the Funds' registration statements and prospectuses for such purposes; allocable communications expenses with respect to investor services and all expenses of shareholders' and Board meetings and of preparing, printing and mailing reports and notices to shareholders; and |
■ | litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Funds' business and distribution and service (12b-1) fees. |
Management Fees Paid by the Funds | |||
Fund Name | 2012 | 2011 | 2010 |
Conservative Allocation Fund | $880,913 | $954,172 | $947,071 |
Moderate Allocation Fund | $2,062,669 | $2,269,065 | $2,233,243 |
Growth Allocation Fund | $1,239,111 | $1,422,474 | $1,413,204 |
Subadvisers, Subadvisory Fee Rates and Subadvisory Fees Paid | |||||
Fund Name | Subadviser | Fee Rate | 2012 | 2011 | 2010 |
Conservative Allocation Fund | Eagle Asset Management, Inc. | 0.50% on assets up to and including $50 million; 0.45% on assets over $50 million | $6,537 | $9,504 | $9,599 |
EARNEST Partners, LLC | 0.40% | $1,248 | $2,221 | $2,863 | |
Eaton Vance Management (terminated July 2012) | 0.25% on first $250 million; 0.24% on next $250 million; 0.23% on next $500 million; 0.22% over $1 billion | $17,969 | $25,268 | $24,273 | |
Epoch Investment Partners, Inc. (started July 2012) | 0.275% to $1 billion; 0.20% over $1 billion | $585 | None | None | |
Pacific Investment Management Company LLC | 0.25% to $1 billion; 0.225% over $1 billion | $157,347 | $166,244 | $167,933 | |
Hotchkis and Wiley Capital Management, LLC | 0.30% | $16,814 | $17,106 | $16,184 | |
Marsico Capital Management, LLC | 0.40% to $1.5 billion; 0.35% over $1.5 billion | $51,105 | $50,924 | $50,203 | |
Massachusetts Financial Services Company* | 0.375% on assets up to and including $250 million; 0.325% on next $250 milliion; 0.300% on next $250 million; 0.275% on next $250 million; 0.25% on next $500 million; 0.225% over $1.5 billion | $27,783 | $34,597 | $32,278 | |
Vaughan Nelson Investment Management, L.P. | 0.40% on first $250 million; 0.35% over $250 million | $7,513 | $8,896 | $8,329 | |
NFJ Investment Group LLC | 0.40% on first $50 million; 0.38% on next $50 million; 0.34% on next $50 million; 0.30% on next $200 million; 0.28% over $350 million | $22,698 | $19,562 | $21,278 | |
Moderate Allocation Fund | Eagle Asset Management, Inc. | 0.50% to $50 million; 0.45% over $50 million | $25,902 | $31,750 | $29,938 |
EARNEST Partners, LLC | 0.40% | $10,263 | $12,723 | $11,923 | |
Eaton Vance Management (terminated July 2012) | 0.25% on first $250 million; 0.24% on next $250 million; 0.23% on next $500 million; 0.22% over $1 billion | $55,104 | $79,640 | $77,311 | |
Epoch Investment Partners, Inc. (started July 2012) | 0.275% to $1 billion; 0.20% over $1 billion | $1,817 | None | None | |
Pacific Investment Management Company LLC | 0.25% to $1 billion; 0.225% over $1 billion | $213,387 | $221,952 | $221,545 | |
Hotchkis and Wiley Capital Management, LLC | 0.30% | $51,765 | $53,799 | $51,235 | |
Marsico Capital Management, LLC | 0.40% to $1.5 billion; 0.35% over $1.5 billion | $156,907 | $157,529 | $155,828 | |
Massachusetts Financial Services Company* | 0.375% on first $250 million; 0.325% on next $250 milliion; 0.300% on next $250 million; 0.275% on next $250 million; 0.25% on next $500 million; 0.225% over $1.5 billion | $85,159 | $106,771 | $99,978 | |
Vaughan Nelson Investment Management, L.P. | 0.40% to $250 million; 0.35% over $250 million | $10,250 | $12,734 | $13,254 |
Subadvisers, Subadvisory Fee Rates and Subadvisory Fees Paid | |||||
Fund Name | Subadviser | Fee Rate | 2012 | 2011 | 2010 |
LSV Asset Management | 0.45% on first $150 million; 0.425% on next $150 million; 0.40% on next $150 million; 0.375% on next $300 million; 0.35% over $750 million | $69,961 | $79,944 | $79,484 | |
Thornburg Investment Management, Inc. | 0.35% to $100 million; 0.30% over $100 million | $46,778 | $53,717 | $55,247 | |
NFJ Investment Group LLC | 0.40% on first $50 million; 0.38% on next $50 million; 0.34% on next $50 million; 0.30% on next $200 million; 0.28% over $350 million | $69,867 | $61,786 | $67,482 | |
Growth Allocation Fund | Eagle Asset Management, Inc. | 0.50% on assets up to and including $50 million; 0.45% on assets over $50 million | $25,545 | $29,981 | $28,666 |
EARNEST Partners, LLC | 0.40% | $10,442 | $12,126 | $12,043 | |
Eaton Vance Management (terminated July 2012) | 0.25% on assets up to and including $250 million; 0.24% on next $250 million; 0.23% on next $500 million; 0.22% over $1 billion | $52,547 | $79,840 | $73,661 | |
Epoch Investment Partners, Inc. (started July 2012) | 0.275% to $1 billion; 0.20% over $1 billion | $1,729 | None | None | |
Hotckis and Wiley Capital Management, LLC | 0.30% | $49,156 | $54,005 | $48,743 | |
Marsico Capital Management, LLC | 0.40% to $1.5 billion: 0.35% over $1.5 billion | $140,929 | $146,437 | $147,893 | |
Massachusetts Financial Services Company* | 0.375% on assets up to and including $250 million; 0.325% on next $250 milliion; 0.300% on next $250 million; 0.275% on next $250 million; 0.25% on next $500 million; 0.225% over $1.5 billion | $76,554 | $98,968 | $95,222 | |
Vaughan Nelson Management Group, L.P. | 0.40% on first $250 million; 0.35% over $250 million | $10,427 | $12,129 | $12,202 | |
LSV Asset Management | 0.45% on first $150 million; 0.425% on next $150 million; 0.40% on next $150 million; 0.375% on next $300 million; 0.35% on amounts exceeding $750 million | $60,269 | $63,974 | $73,177 | |
Thornburg Investment Management, Inc. | 0.35% to $100 milliion; 0.30% over $100 million | $40,260 | $42,920 | $50,965 | |
NFJ Investment Group LLC | 0.40% on first $50 million; 0.38% on next $50 million; 0.34% on next $50 million; 0.30% on next $200 million; 0.28% over $350 million | $66,396 | $61,649 | $64,531 |
Conservative Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/ Total Assets | Other Accounts/ Total Assets | Ownership of Fund Securities |
Eagle Asset Management, Inc. | Bert L. Boksen | 14/$4,809,371,113 | 2/$104,271,459 | 5,147/$2,972,943,634 | None |
Eric Mintz | 14/$4,809,371,113 | None | 5,147/$2,972,943,634 | None | |
EARNEST Partners, LLC | Paul E. Viera, Jr. | 17/$2,756.8 million | 23/$1,159.3 million | 205/$10,685.9 million 7/$585.8 million | None |
Epoch Investment Partners, Inc. | David N. Pearl | 11/$2,818 million | 21/$2,354 million 1/$108 million | 110/$7,743 million 16/$1,822 million | None |
Janet K Navon | 7/$888 million | 7/$620 million | 9/$349 million | None |
Conservative Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/ Total Assets | Other Accounts/ Total Assets | Ownership of Fund Securities |
Michael A. Welhoelter, CFA | 18/$6,788 million | 37/$4,237 million 1/$108 million | 168/$12,666 million 19/$2,740 million | None | |
Pacific Investment Management Company LLC | Chris Dialynas | 16/$22,927.13 million | 18/$15,310.03 million | 97/$37,443.69 million 8/$5,081.9 million | None |
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None |
George Davis | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Scott McBride | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Patricia McKenna | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Judd Peters | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Marsico Capital Management, LLC | Thomas F. Marsico | 28/$14,951 million | 11/$1,732 million | 91/$7,967 million* | None |
Coralie Witter, CFA | 22/$14,751 million | 10/$1,672 million | 81/$7,903 million* | None | |
Massachusetts Financial Services Company | Eric B. Fischman | 10/$8.2 billion | 1/$14.1 million | 4/$286.8 million | None |
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | 9/$1,245,572,016 | 6/$161,336,752 | 248/$3,924,088,687 | None |
Scott Weber | 9/$1,245,572,016 | 6/$161,336,752 | 248/$3,924,088,687 | None | |
NFJ Investment Group LLC | Paul Magnuson | 21/$24,323,888,313 | 5/$161,242,208 | 48/$9,873,773,431 | None |
Thomas Oliver, CFA and CPA | 18/$15,909,626,299 | 2/$86,516,736 | 46/$9,631,602,498 | None | |
Ben Fischer, CFA | 24/$24,441,969,112 | 5/$161,242,208 | 53/$10,374,079,510 | None | |
R. Burns McKinney CFA | 16/$15,835,319,511 | 2/$86,516,736 | 43/$9,335,804,055 | None | |
Jeff Reed, CFA | 12/$12,632,870,010 | 1/$3,561,476 | 34/$6,541,841,088 | None |
Moderate Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/Total Assets | Other Accounts/Total Assets | Ownership of Fund Securities |
Eagle Asset Management, Inc. | Bert L. Boksen | 14/$4,809,371,113 | 2/$104,271,459 | 5,147/$2,972,943,634 | None |
Eric Mintz | 14/$4,809,371,113 | None | 5,147/$2,972,943,634 | None | |
EARNEST Partners, LLC | Paul E. Viera, Jr. | 17/$2,756.8 million | 23/$1,159.3 million | 205/$10,685.9 million 7/$585.8 million | None |
Epoch Investment Partners, Inc. | David N. Pearl | 11/$2,807 million | 21/$2,354 million 1/$108 million | 110/$7,743 million 16/$1,822 million | None |
Janet K. Navon | 7/$877 million | 7/$620 million | 9/$349 million | None | |
Michael A. Welhoelter, CFA | 18/$6,777 million | 37/$4,237 million 1/$108 million | 168/$12,666 million 19/$2,740 million | None | |
Pacific Investment Management Company LLC | Chris Dialynas | 16/$22,927.13 million | 18/$15,310.03 million | 97/$37,443.69 million 8/$5,081.9 million | None |
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None |
George Davis | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Scott McBride | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Patricia McKenna | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None |
Moderate Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/Total Assets | Other Accounts/Total Assets | Ownership of Fund Securities |
Judd Peters | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Marsico Capital Management, LLC | Thomas F. Marsico | 28/$14,923 million | 11/$1,732 million | 91/$7,967 million* | None |
Coralie Witter, CFA | 22/$14,687 million | 10/$1,672 million | 81/$7,903 million* | None | |
Massachusetts Financial Services Company | Eric B. Fischman | 10/$8.2 billion | 1/$14.1 million | 4/$286.8 million | None |
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | 9/$1,245,264,946 | 6/$161,336,752 | 248/$3,924,088,687 | None |
Scott Weber | 9/$1,245,264,946 | 6/$161,336,752 | 248/$3,924,088,687 | None | |
NFJ Investment Group LLC | Paul Magnuson | 21/$24,307,085,396 | 5/$161,242,208 | 48/$9,873,773,431 | None |
Thomas Oliver, CFA and CPA | 18/$15,892,823,382 | 2/$86,516,736 | 46/$9,631,602,498 | None | |
Ben Fischer, CFA | 24/$24,425,166,195 | 5/$161,242,208 | 53/$10,374,079,510 | None | |
R. Burns McKinney CFA | 16/$15,818,516,594 | 2/$86,516,736 | 43/$9,335,804,055 | None | |
Jeff Reed, CFA | 12/$12,616,067,093 | 1/$3,561,476 | 34/$6,541,841,088 | None | |
LSV Asset Management | Josef Lakonishok | 28/$7,806,721,066 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None |
Menno Vermuelen, CFA | 28/$7,806,721,066 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None | |
Puneet Mansharamani, CFA | 28/$7,806,721,066 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None | |
Thornburg Investment Management, Inc. | William V. Fries, CFA | 17/$30.8 billion | 8/$3.4 billion | 43/$8.7 billion 1/$84 million | None |
Wendy Trevisani | 17/$30.8 billion | 13/$3.4 billion | 10,244/$13.7 billion 1/$84 million | None | |
Lei Wang, CFA | 17/$30.8 billion | 8/$3.4 billion | 43/$8.7 billion 1/$84 million | None |
Growth Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/Total Assets | Other Accounts/Total Assets | Ownership of Fund Securities |
Eagle Asset Management, Inc. | Bert L. Boksen | 14/$4,809,371,113 | 2/$104,271,459 | 5,147/$2,972,943,634 | None |
Eric Mintz | 14/$4,809,371,113 | None | 5,147/$2,972,943,634 | None | |
EARNEST Partners, LLC | Paul E. Viera, Jr. | 17/$2,756.8 million | 23/$1,159.3 million | 205/$10,685.9 million 7/$585.8 million | None |
Epoch Investment Partners, Inc. | David N. Pearl | 11/$2,806 million | 21/$2,354 million 1/$108 million | 110/$7,743 million 16/$1,822 million | None |
Janet K. Navon | 7/$876 million | 7/$620 million | 9/$349 million | None | |
Michael A. Welhoelter, CFA | 18/$6,776 million | 37/$4,237 million 1/$108 million | 168/$12,666 million 19/$2,740 million | None | |
Hotchkis and Wiley Capital Management, LLC | Sheldon Lieberman | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None |
George Davis | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Scott McBride | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Patricia McKenna | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None | |
Judd Peters | 13/$8.5 billion 1/$2.2 billion | 3/$378 million | 58/$7.2 billion 3/$254 million | None |
Growth Allocation Fund | |||||
Subadvisers | Portfolio Managers | Registered Investment Companies/Total Assets | Other Pooled Investment Vehicles/Total Assets | Other Accounts/Total Assets | Ownership of Fund Securities |
Marsico Capital Management, LLC | Thomas F. Marsico | 28/$14,928 million | 11/$1,732 million | 91/$7,967 million* | None |
Coralie Witter, CFA | 22/$14,692 million | 10/$1,672 million | 81/$7,903 million* | None | |
Massachusetts Financial Services Company | Eric B. Fischman | 10/$8.2 billion | 1/$14.1 million | 4/$286.8 million | None |
Vaughan Nelson Investment Management, L.P. | Chris D. Wallis, CFA | 9/$1,245,017,012 | 6/$161,336,752 | 248/$3,924,088,687 | None |
Scott Weber | 9/$1,245,017,012 | 6/$161,336,752 | 248/$3,924,088,687 | None | |
NFJ Investment Group LLC | Paul Magnuson | 21/$24,308,075,256 | 5/$161,242,208 | 48/$9,873,773,431 | None |
Thomas Oliver, CFA and CPA | 18/$15,893,813,241 | 2/$86,516,736 | 46/$9,631,602,498 | None | |
Ben Fischer, CFA | 24/$24,426,156,055 | 5/$161,242,208 | 53/$10,374,079,510 | None | |
R. Burns McKinney CFA | 16/$15,819,506,454 | 2/$86,516,736 | 43/$9,335,804,055 | None | |
Jeff Reed, CFA | 12/$12,617,056,953 | 1/$3,561,476 | 34/$6,541,841,088 | None | |
LSV Asset Management | Josef Lakonishok | 28/$7,807,989,412 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None |
Menno Vermuelen, CFA | 28/$7,807,989,412 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None | |
Puneet Mansharamani | 28/$7,807,989,412 | 47/$9,510,916,627 6/$352,675,745 | 415/$42,087,634,674 30/$6,519,789,947 | None | |
Thornburg Investment Management, Inc. | William V. Fries, CFA | 17/$30.8 billion | 8/$3.4 billion | 43/$8.7 billion 1/$84 million | None |
Wendy Trevisani | 17/$30.8 billion | 13/$3.4 billion | 10,244/$13.7 billion 1/$84 million | None | |
Lei Wang, CFA | 17/$30.8 billion | 8/$3.4 billion | 43/$8.7 billion 1/$84 million | None |
■ | Base Salary—Base salary represents a smaller percentage of portfolio manager total cash compensation than performance bonus. |
■ | Performance Bonus—Generally, the performance bonus represents more than a majority of portfolio manager total cash compensation. |
Portfolio Manager | Benchmark |
Eric B. Fischman | Russell 1000 Growth Index |
■ | The most attractive investments could be allocated to higher-fee accounts or performance fee accounts. |
■ | The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time. |
■ | The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation. |
■ | Base Salary - Base salary is determined based on core job responsibilities, positions/levels, and market factors. Base salary levels are reviewed annually, when there is a significant change in job responsibilities or a significant change in the market. Base salary is paid in regular installments throughout the year and payment dates are in line with local practice. |
■ | Performance Bonus - Performance bonuses are designed to reward individual performance. Each professional and his or her supervisor will agree upon performance objectives to serve as a basis for performance evaluation during the year. The objectives will outline individual goals according to pre-established measures of the group or department success. Achievement against these goals as measured by the employee and supervisor will be an important, but not exclusive, element of the Compensation Committee’s bonus decision process. Final award amounts are determined at the discretion of the Compensation Committee and will also consider firm performance. |
■ | Equity or Long Term Incentive Compensation - Equity allows key professionals to participate in the long-term growth of the firm. This program provides mid to senior level employees with the potential to acquire an equity stake in PIMCO over their careers and to better align employee incentives with the firm’s long-term results. These options vest over a number of years and may convert into PIMCO equity which shares in the profit distributions of the firm. M Units are non-voting common equity of PIMCO and provide a mechanism for individuals to build a significant equity stake in PIMCO over time. Employees who reach a total compensation threshold are delivered their annual compensation in a mix of cash and option awards. PIMCO incorporates a progressive allocation of option awards as a percentage of total compensation which is in line with market practices. |
■ | 3-year, 2-year and 1-year dollar-weighted and account-weighted, pre-tax investment performance as judged against the applicable benchmarks for each account managed by a portfolio manager (including the Funds) and relative to applicable industry peer groups; |
■ | Appropriate risk positioning that is consistent with PIMCO’s investment philosophy and the Investment Committee/CIO approach to the generation of alpha; |
■ | Amount and nature of assets managed by the portfolio manager; |
■ | Consistency of investment performance across portfolios of similar mandate and guidelines (reward low dispersion); |
■ | Generation and contribution of investment ideas in the context of PIMCO’s secular and cyclical forums, portfolio strategy meetings, Investment Committee meetings, and on a day-to-day basis; |
■ | Absence of defaults and price defaults for issues in the portfolios managed by the portfolio manager; |
■ | Contributions to asset retention, gathering and client satisfaction; |
■ | Contributions to mentoring, coaching and/or supervising; and |
■ | Personal growth and skills added. |
■ | Attract and reward highly qualified employees |
■ | Align with critical business goals and objectives |
■ | Link to the performance results relevant to the business segment and Prudential |
■ | Retain top performers |
■ | Pay for results and differentiate levels of performance |
■ | Foster behaviors and contributions that promote Prudential’s success |
■ | Allocating a favorable investment opportunity to one account but not another. |
■ | Directing one account to buy a security before purchases through other accounts increase the price of the security in the market place. |
■ | Giving substantially inconsistent investment directions at the same time to similar accounts, so as to benefit one account over another. |
■ | Obtaining services from brokers conducting trades for one account, which are used to benefit another account. |
Compensation Received by PIM for Securities Lending: Conservative Allocation Fund | |||
2012 | 2011 | 2010 | |
None | None | None |
Compensation Received by PIM for Securities Lending: Moderate Allocation Fund | |||
2012 | 2011 | 2010 | |
None | None | None |
Compensation Received by PIM for Securities Lending: Growth Allocation Fund | |||
2012 | 2011 | 2010 | |
None | None | None |
Fees Paid to PMFS | |
Fund Name | Amount |
Conservative Allocation Fund | $78,000 |
Moderate Allocation Fund | $221,461 |
Growth Allocation Fund | $157,663 |
Payments Received by the Distributor | |||
Conservative Allocation Fund | Moderate Allocation Fund | Growth Allocation Fund | |
Class A Distribution and service (12b-1) fees | $210,607 | $470,218 | $263,809 |
Class A Initial Sales Charges | $31,973 | $92,100 | $78,957 |
Class A Contingent Deferred Sales Charges (CDSC’s) | $113 | $164 | $295 |
Class B Distribution and service (12b-1) fees | $108,396 | $299,794 | $204,665 |
Class B Contingent Deferred Sales Charges (CDSC’s) | $13,622 | $36,503 | $37,014 |
Class C Distribution and service (12b-1) fees | $176,506 | $528,312 | $371,613 |
Class C Contingent Deferred Sales Charges (CDSC’s) | $984 | $3,749 | $1,464 |
Class R Distribution and service (12b-1) fees | $1,096 | $1,531 | $12 |
Class X Distribution and service (12b-1) fees | $1,080 | $1,264 | $816 |
Class X Contingent Deferred Sales Charges (CDSC’s) | None | None | None |
Amounts Spent by Distributor | |||||
Fund | Share Class | Printing & Mailing Prospectuses to Other than Current Shareholders | Compensation to Broker/Dealers for Commissions to Representatives and Other Expenses* | Overhead Costs ** | Total Amount Spent by Distributor |
Conservative Allocation Fund |
Amounts Spent by Distributor | |||||
Fund | Share Class | Printing & Mailing Prospectuses to Other than Current Shareholders | Compensation to Broker/Dealers for Commissions to Representatives and Other Expenses* | Overhead Costs ** | Total Amount Spent by Distributor |
Class A | None | $206,384 | $73,775 | $280,159 | |
Class B | $71 | $49,685 | $9,120 | $58,876 | |
Class C | $113 | $174,168 | $14,574 | $188,855 | |
Class R | None | $1,098 | $182 | $1,280 | |
Class X | None | $196 | $73 | $269 | |
Moderate Allocation Fund | |||||
Class A | None | $404,948 | $220,622 | $625,570 | |
Class B | $63 | $155,029 | $25,066 | $180,158 | |
Class C | $112 | $522,484 | $43,661 | $566,257 | |
Class R | None | $1,530 | $253 | $1,783 | |
Class X | None | $1,117 | $147 | $1,264 | |
Growth Allocation Fund | |||||
Class A | None | $259,668 | $91,363 | $351,031 | |
Class B | $63 | $112,595 | $17,120 | $129,778 | |
Class C | $114 | $368,773 | $30,728 | $399,615 | |
Class R | None | $12 | None | $12 | |
Class X | None | $681 | $134 | $815 |
■ | 1st Global |
■ | ADP Retirement Services |
■ | AIG Advisors Group |
■ | American Enterprise Investment |
■ | American United Life Insurance |
■ | Ameriprise |
■ | Ascensus IO Business |
■ | AXA Equitable Life Insurance Company |
■ | Charles Schwab One Source |
■ | CitiStreet LLC |
■ | Commonwealth |
■ | CPI Qualified Plan Consultants |
■ | Daily Access |
■ | Diversified Investment Advisors—Target |
■ | Expert Plan |
■ | Fidelity IIOC |
■ | Fidelity NTF |
■ | Genworth Life & Annuity Insurance Company |
■ | GWFS |
■ | Hartford Life Insurance Company |
■ | Hartford Securities Distribution |
■ | Hewitt |
■ | Hewitt Associates LLC |
■ | ING Cetera (FNIC) |
■ | ING Cetera (Multi Financial) |
■ | ING Financial Partners |
■ | John Hancock Life Insurance Company |
■ | JP Morgan Chase Bank / TIAA-CREF |
■ | JP Morgan RPS |
■ | Lincoln Financial |
■ | LPL Marketing |
■ | Massachusetts Mutual Life Insurance Company |
■ | Matrix Settlement & Clearing |
■ | Mercer HR Services—JD |
■ | Merrill Lynch (Benchmark) |
■ | Merrill Lynch (New Sales) |
■ | Merrill Lynch RG |
■ | MidAtlantic (Sungard) |
■ | MSSB ADP |
■ | MSSB Revenue Share |
■ | MSSB SS |
■ | MSSB Trak NAV |
■ | Nationwide Trust Company |
■ | New York Life (Large) |
■ | Newport Group |
■ | Ohio National Life Insurance |
■ | Oppenheimer (Assets) |
■ | Oppenheimer (Sales) |
■ | Princeton (MFS) |
■ | Princeton Service Fees |
■ | Principal Financial—Level 3 |
■ | Raymond James |
■ | RBC Wealth Management |
■ | Reliance Trust |
■ | Securities America Inc. |
■ | Security Benefit Life Insurance Company |
■ | Standard Insurance Company |
■ | State Street Bank & Trust |
■ | T. Rowe Price |
■ | TD Ameritrade |
■ | UBS Marketing Support (Assets) |
■ | UBS Marketing Support (Sales) |
■ | UBS Wrap |
■ | United Planners |
■ | UVEST |
■ | Vanguard Fiduciary Trust Company |
■ | Wells Fargo Advisors |
■ | Wells Fargo Retirement Group |
■ | Wilmington Trust |
Offering Price Per Share | |||
Conservative Allocation Fund | Moderate Allocation Fund | Growth Allocation Fund | |
Class A | |||
NAV and redemption price per Class A share | $10.69 | $11.23 | $11.44 |
Maximum initial sales charge | .62 | .65 | .67 |
Maximum offering price to public | $11.31 | $11.88 | $12.11 |
Class B | |||
NAV, offering price and redemption price per Class B share | $10.54 | $11.17 | $10.45 |
Class C | |||
NAV, offering price and redemption price per Class C share | $10.54 | $11.17 | $10.46 |
Class R | |||
NAV, offering price and redemption price per Class R share | $10.67 | $11.21 | $11.35 |
Class X | |||
NAV, offering price and redemption price per Class X share | $10.54 | $11.22 | $10.66 |
Class Z | |||
NAV, offering price and redemption price per Class Z share | $10.75 | $11.24 | $11.76 |
Conservative Allocation Fund | |||
2012 | 2011 | 2010 | |
Total brokerage commissions paid by the Fund | $40,235 | $65,380 | $173,328 |
Total brokerage commissions paid to affiliated brokers | None | None | None |
Percentage of total brokerage commissions paid to affiliated brokers | 0.00% | 0.00% | 0.00% |
Percentage of the aggregate dollar amount of portfolio transactions involving the payment of commissions to affiliated brokers | 0.00% | 0.00% | 0.00% |
Moderate Allocation Fund | |||
2012 | 2011 | 2010 | |
Total brokerage commissions paid by the Fund | $134,391 | $209,091 | $280,451 |
Total brokerage commissions paid to affiliated brokers | None | None | None |
Percentage of total brokerage commissions paid to affiliated brokers | 0.00% | 0.00% | 0.00% |
Percentage of the aggregate dollar amount of portfolio transactions involving the payment of commissions to affiliated brokers | 0.00% | 0.00% | 0.00% |
Growth Allocation Fund | |||
2012 | 2011 | 2010 | |
Total brokerage commissions paid by the Fund | $123,679 | $192,299 | $263,029 |
Total brokerage commissions paid to affiliated brokers | None | None | None |
Percentage of total brokerage commissions paid to affiliated brokers | 0.00% | 0.00% | 0.00% |
Percentage of the aggregate dollar amount of portfolio transactions involving the payment of commissions to affiliated brokers | 0.00% | 0.00% | 0.00% |
Broker-Dealer Securities Holdings ($) (as of most recently completed fiscal year) | |||
Fund Name | Broker/Dealer Name | Equity (E)/Debt (D) | Amount (000’s) |
Conservative Allocation Fund | |||
Goldman Sachs & Co. | D | $1,782 | |
Citigroup Global Markets, Inc. | D | $1,543 | |
J.P. Morgan Chase & Co. | D | $1,470 | |
Barclays Investments, Inc. | D | $1,032 | |
Banc of America Securities LLC | D | $821 | |
Morgan Stanley | D | $696 | |
RBS Securities, Inc. | D | $626 | |
UBS Securities LLC | D | $443 | |
J.P. Morgan Chase & Co. | E | $475 | |
Citigroup Global Markets, Inc. | E | $248 | |
Banc of America Securities LLC | E | $152 | |
Goldman Sachs & Co. | E | $71 | |
Jefferies & Company, Inc. | E | $3 | |
Moderate Allocation Fund | |||
J.P. Morgan Chase & Co. | D | $3,359 | |
Banc of America Securities LLC | D | $1,501 | |
Barclays Investments, Inc. | D | $1,457 | |
RBS Securities, Inc. | D | $1,149 | |
Morgan Stanley | D | $696 | |
UBS Securities LLC | D | $554 | |
Goldman Sachs & Co. | D | $542 | |
J.P. Morgan Chase & Co. | E | $1,397 |
Broker-Dealer Securities Holdings ($) (as of most recently completed fiscal year) | |||
Fund Name | Broker/Dealer Name | Equity (E)/Debt (D) | Amount (000’s) |
Citigroup Global Markets, Inc. | E | $692 | |
Banc of America Securities LLC | E | $433 | |
Goldman Sachs & Co. | E | $212 | |
UBS Securities LLC | E | $98 | |
Barclays Investments, Inc. | E | $84 | |
Deutsche Bank Securities, Inc. | E | $70 | |
Jefferies & Company, Inc. | E | $30 | |
Growth Allocation Fund | |||
J.P. Morgan Chase & Co. | E | $1,382 | |
Citigroup Global Markets, Inc. | E | $725 | |
Banc of America Securities LLC | E | $450 | |
Goldman Sachs & Co. | E | $182 | |
Barclays Investments, Inc. | E | $113 | |
UBS Securities LLC | E | $104 | |
Deutsche Bank Securities, Inc. | E | $70 | |
Credit Suisse Securities (USA) LLC | E | $37 | |
Jefferies & Company, Inc. | E | $32 |
Prinicipal Fund Shareholders (as of September 12, 2012) | ||||
Fund Name | Shareholder Name | Address | Share Class | No. of Shares/ % of Fund |
Target Conservative Allocation Fund | Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | A | 2,201,149 / 28.03% |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | B | 229,185 / 31.16% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | C | 957,080 / 59.12% | |
Morgan Stanley & Co | Harborside Financial Center Plaza II, 3rd Floor Jersey City, NJ 07311 | C | 163,349 / 10.09% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | Z | 105,939 / 33.28% | |
Merrill Lynch, Pierce, Fenner & Smith Inc, For The Sole Benefit Of Its Customers | 4800 Deer Lake Dr E Jacksonville, FL 32246 | Z | 53,165 / 16.70% | |
Pims/Prudential Retirement As Nominee For The TTEE/CUST Uchicago Argonne, LLC | 9700 S Cass Avenue Argonne, IL 60439 | Z | 38,621 / 12.13% | |
Morgan Stanley & Co | Harborside Financial Center Plaza II,3rd Floor Jersey City, NJ 07311 | Z | 34,978 / 10.99% | |
Clearview IRA C/F A James Baroody Jr | Pittsford, NY 14534 | Z | 17,887 / 5.62% | |
Counsel Trust DBA Mid Atlantic Trust Company FBO Beehive Botanicals 401-K Plan | 1251 Waterfront Pl Pittsburgh, PA 15222 | Z | 16,938 / 5.32% | |
Frontier Trust Company FBO Bent Marine, Inc 401K & P/S Plan | PO Box 10758 Fargo, ND 58106 | R | 12,128 / 55.38% | |
Mid Atlantic Trust As Custodian FBO Virginia-Gilbert Family Dental PA 401K & PS Plan | 1251 Waterfront Place, Suite 525 Pittsburgh, PA 15222 | R | 8,983 / 41.02% | |
BNYM I S Trust Co Cust Simple IRA Jerry W Hamil DBA The Water Guy Jerry W Hamil | Margaretville, NY 12455 | X | 2,398 / 27.88% | |
UMB Bank, NA/CF Pleasant Valley SD-PA 403B FBO Charlene A Taylor | Effort, PA 18330 | X | 1,781 / 20.72% | |
UMB Bank, NA C/F Pocono Mountain SD 403B FBO Patricia E Furey | East Stroudsburg, PA 18301 | X | 1,193 / 13.88% | |
BNYM I S Trust Co Cust Simple IRA Global Imaging Inc NDFI Sim -IRA Kenneth N Kessler | Louisville, CO 80027 | X | 1,086 / 12.64% | |
UMB Bank, NA C/F Northern Lehigh SD 403B FBO Suzanne E Tobing | Northampton, PA 18067 | X | 783 / 9.11% | |
BNYM I S Trust Co Cust Simple IRA Salon Vizions By Vizza Inc John D Vizza | Johnstown, PA 15905 | X | 712 / 8.29% | |
Target Moderate Allocation Fund | Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | A | 4,376,132 / 29.88% |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | B | 801,918 / 36.08% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | C | 2,654,399 / 59.37% | |
Merrill Lynch, Pierce, Fenner & Smith For The Sole Benefit Of Its Customers | 4800 Deer Lake Dr E Jacksonville, Fl 32246-6484 | C | 347,057 / 7.76% | |
Morgan Stanley & Co | Harborside Financial Center Plaza II, 3rd Floor Jersey City, NJ 07311 | C | 256,864 / 5.75% | |
Frontier Trust Company FBO Bent Marine, Inc 401(K) & P/S Plan | P.O. Box 10758 Fargo, ND 58106 | R | 27,653 / 99.17% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | Z | 186,377 / 62.68% |
Prinicipal Fund Shareholders (as of September 12, 2012) | ||||
Fund Name | Shareholder Name | Address | Share Class | No. of Shares/ % of Fund |
Merrill Lynch, Pierce, Fenner & Smith For The Sole Benefit Of Its Customers | 4800 Deer Lake Dr E Jacksonville, Fl 32246-6484 | Z | 28,105 / 9.45% | |
Councel Trust DBA MID Atlantic Trust Company FBO Beehive Botanicals 401K Plan | 1251 Waterfront Pl Pittsburgh, PA 15222 | Z | 23,472 / 7.89% | |
PIMS/Prudential Retirement As Nominee For The TTEE Uchicago Argonne, LLC | 9700 Cass Avenue Argonne, IL 60439 | Z | 18,313 / 6.16% | |
Prudential Trust Company C/F The Rollover IRA Of David S Sitner | East Hampton, CT 06424 | X | 14,340 / 44.55% | |
Prudential Trust Company C/F The Roth IRA Of Randi F Cornaglia | S Glastonbury, CT 06073 | X | 1,873 / 5.82% | |
Target Growth Allocation Fund | Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | A | 2,905,440 / 32.21% |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | B | 523,828 / 30.75% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | C | 1,819,934 / 54.85% | |
Morgan Stanley & Co | Harborside Financial Center Plaza II, 3rd Floor Jersey City, NJ 07311 | C | 200,507 / 6.04% | |
Prudential Investment Mgmt, Inc Prudential Investments Fund Management LLC | 100 Mulberrry Street, Fl 14 Newark, NJ 07102 | R | 215 / 100.00% | |
BNYM I S Trust Co Cust Simple IRA Rusdal Construction Jill M Rusdal | PO Box 2356 GIG Harbor, WA 98335 | X | 1,654 / 11.40% | |
BNYM I S Trust Co Cust Simple IRA Rusdal Construction George F Rusdal | PO Box 2356 GIG Harbor, WA 98335 | X | 1,654 / 11.40% | |
UMA Bank, NA C/F Parkland School District 403B Ryan J Nunamaker | Macungie, PA 18062 | X | 1,086 / 7.48% | |
UMB Bank, NA C/F Nazareth Area SD 403B FBO Rex W Lutz | Easton, PA 18040 | X | 1,082 / 7.46% | |
Prudential Trust Company C/F The 403B Plan Of Sandra Y Yamamoto | Thornton, CO 80241 | X | 867 / 5.98% | |
BNYM I S Trust Co Cust Simple IRA Once Upon A Bagel Stephen B Geffen | Northbrook, IL 60062 | X | 794 / 5.48% | |
Special Custody Account For The Exclusive Benefit Of Customers | 2801 Market Street Saint Louis, MO 63103 | Z | 122,086 / 69.55% | |
Counsel Trust DBA MID Atlantic Trust Company FBO Beehive Botanicals 401-K Plan | 1251 WaterFront Pl Pittsburgh, PA 15222 | Z | 14,579 / 8.31% | |
PIMS/Prudential Retirement As Nominee For The TTEE Uchicago Argonne, LLC | 9700 S Cass Ave Argonne, IL 60439 | Z | 13,670 / 7.79% |
Post-Enactment Losses: | $0 |
Pre-Enactment Losses: | |
Expiring 2018 | $3,368,000 |
Post-Enactment Losses: | $0 |
Pre-Enactment Losses: | |
Expiring 2018 | $25,836,000 |
Post-Enactment Losses: | $0 |
Pre-Enactment Losses: | |
Expiring 2018 | $36,798,000 |
■ | Full holdings on a daily basis to Institutional Shareholder Services (ISS), Broadridge and Glass, Lewis & Co. (proxy voting administrator/agents) at the end of each day; |
■ | Full holdings on a daily basis to ISS (securities class action claims administrator) at the end of each day; |
■ | Full holdings on a daily basis to a Fund's Subadviser(s), Custodian Bank, sub-custodian (if any) and accounting agents (which includes the Custodian Bank and any other accounting agent that may be appointed) at the end of each day. When a Fund has more than one Subadviser, each Subadviser receives holdings information only with respect to the “sleeve” or segment of the Fund for which the Subadviser has responsibility; |
■ | Full holdings to a Fund's independent registered public accounting firm as soon as practicable following the Fund's fiscal year-end or on an as-needed basis; and |
■ | Full holdings to financial printers as soon as practicable following the end of a Fund's quarterly, semi-annual and annual period-ends. |
■ | Fund trades on a quarterly basis to Abel/Noser Corp. (an agency-only broker and transaction cost analysis company) as soon as practicable following a Fund's fiscal quarter-end; |
■ | Full holdings on a daily basis to FT Interactive Data (a fair value information service) at the end of each day; |
■ | Full holdings on a daily basis to FactSet Research Systems Inc. and Lipper, Inc. (investment research providers) at the end of each day; |
■ | Full holdings on a daily basis to Performance Explorer Limited (investment research provider for funds engaged in securities lending) at the end of each day, for certain funds; |
■ | Full holdings on a daily basis to Vestek (for preparation of fact sheets) at the end of each day (Target Portfolio Trust, and selected Prudential Investments Funds only); |
■ | Full holdings to Frank Russell Company (investment research provider) at the end of each month (Prudential Jennison Small Company Fund, Prudential Variable Contract Accounts -2 and -10 only); |
■ | Full holdings on a monthly basis to Fidelity Advisors (wrap program provider) approximately five days after the end of each month (Prudential Jennison Growth Fund and certain other selected Prudential Investments Funds only); |
■ | Full holdings on a daily basis to Brown Brothers Harriman & Co. (operations support) (Prudential Financial Services Fund only); |
■ | Full holdings on a daily basis to Markit WSO Corporation (certain operational functions)(Prudential Financial Services Fund only); |
■ | Full holdings on a daily basis to Investment Technology Group, Inc. (analytical service provider) (Prudential Financial Services Fund only); |
■ | Full holdings on a daily basis to State Street Bank and Trust Company (operations service provider) (Prudential Financial Services Fund only); and |
■ | Full holdings on a quarterly basis to Prudential Retirement Services / Watson Wyatt Investment Retirement Services (401(k) plan recordkeeping) approximately 30 days after the close of the Fund's fiscal quarter-end (Prudential Jennison Growth Fund only). |
A. | Voting Guidelines; |
B. | Administrative Procedures; |
C | Records Retention; and |
D. | Reports. |
A. | VOTING GUIDELINES |
B. | ADMINISTRATIVE PROCEDURES |
C. | RECORDS RETENTION |
D. | REPORTS |
■ | Exercising responsibility for voting decisions; |
■ | Resolving conflicts of interest; |
■ | Making appropriate disclosures to clients; |
■ | Creating and maintaining appropriate records; |
■ | Providing clients access to voting records; and |
■ | Outsourcing the proxy voting administrative process. |
■ | Establish NFJ’s proxy voting guidelines, with such advice, participation and research as the Proxy Committee deems appropriate from the investment professionals, proxy voting services or other knowledgeable interested parties. |
■ | To the extent the proxy guidelines do not cover potential proxy voting issues, discuss and determine the process for determining how to vote such issues. |
■ | Develop a process for the resolution of voting issues that require a case-by-case analysis or involve a conflict of interest (including the involvement of the appropriate investment professionals as necessary) and monitor such process. |
■ | Vote or engage a third party service provider to vote proxies in accordance with NFJ’s guidelines. |
■ | Document, in the form of a report, the resolution of any conflicts of interest between NFJ and its clients, and provide or make available, adequate documentation to support that conflicts were resolved in a fair, equitable and consistent manner that is in the interest of clients. |
■ | Approve and monitor the outsourcing of voting obligations to third-parties. |
■ | Oversee the maintenance of records regarding voting decisions in accordance with the standards set forth by this policy. |
■ | The Proxy Committee shall review, at least annually, all applicable processes and procedures, voting practices, the adequacy of records and the use of third party services. |
■ | When the economic effect on shareholder’s interests or the value of the portfolio holding is indeterminable or insignificant; |
■ | When voting the proxy would unduly impair the investment management process; or |
■ | When the cost of voting the proxies outweighs the benefits or is otherwise impractical. |
■ | Copies of NFJ’s Proxy Voting Policy and Procedures; |
■ | Copies or records of each proxy statement received with respect to clients’ securities for whom NFJ exercises voting authority; records of votes cast on behalf of clients; |
■ | Records of each vote cast as well as certain records pertaining to NFJ’s decision on the vote; |
■ | Records of written client requests for proxy voting information; and |
■ | Records of written responses from NFJ to either written or oral client request regarding proxy voting. |
■ | Leading market positions in well-established industries. |
■ | High rates of return on funds employed. |
■ | Conservative capitalization structure with moderate reliance on debt and ample asset protection. |
■ | Broad margins in earnings coverage of fixed financial charges and high internal cash generation. |
■ | Well-established access to a range of financial markets and assured sources of alternate liquidity. |
■ | Amortization schedule-the longer the final maturity relative to other maturities the more likely it will be treated as a note. |
■ | Source of payment-the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note. |
Name and Principal Business Address | Positions and Offices with Underwriter |
Judy A. Rice (1) | President and Chief Executive Officer |
Christine C. Marcks (4) | Executive Vice President |
Gary F. Neubeck (2) | Executive Vice President |
Scott E. Benjamin (1) | Vice President |
Joanne M. Accurso-Soto (1) | Senior Vice President |
Michael J. King (3) | Senior Vice President, Chief Legal Officer and Secretary |
Peter J. Boland (1) | Senior Vice President and Chief Operating Officer |
John N. Christolini (4) | Senior Vice President |
Mark R. Hastings (1) | Senior Vice President and Chief Compliance Officer |
Michael J. McQuade (1) | Senior Vice President, Comptroller and Chief Financial Officer |
John L. Bronson (3) | Vice President and Deputy Chief Legal Officer |
Richard W. Kinville (3) | Vice President and Anti-Money Laundering Officer |
(1) | Gateway Center Three, Newark, NJ 07102-4061 |
(2) | Gateway Center Two, Newark, NJ 07102-4061 |
(3) | 751 Broad Street, Newark NJ, 07102-3714 |
(4) | 280 Trumbull Street, Hartford, CT 06103-3509 |
Signature | Title | Date |
* Kevin J. Bannon | Trustee | |
* Scott E. Benjamin | Trustee | |
* Linda W. Bynoe | Trustee | |
* Michael S. Hyland | Trustee | |
* Douglas H. McCorkindale | Trustee | |
* Stephen P. Munn | Trustee | |
* Stuart S. Parker | Trustee and President, Principal Executive Officer | |
* Richard A. Redeker | Trustee | |
* Robin B. Smith | Trustee | |
* Stephen Stoneburn | Trustee | |
* Grace C. Torres | Treasurer, Principal Financial and Accounting Officer | |
*By: /s/ Jonathan D. Shain Jonathan D. Shain | Attorney-in-Fact | September 28, 2012 |
/s/ Kevin J. Bannon Kevin J. Bannon | /s/ Stuart S. Parker Stuart S. Parker | |
/s/ Scott E. Benjamin Scott E. Benjamin | /s/ Richard A. Redeker Richard A. Redeker | |
/s/ Linda W. Bynoe Linda W. Bynoe | /s/Robin B. Smith Robin B. Smith | |
/s/ Michael S. Hyland Michael S. Hyland | /s/ Stephen Stoneburn Stephen Stoneburn | |
/s/ Douglas H. McCorkindale Douglas H. McCorkindale | /s/ Grace C. Torres Grace C. Torres | |
/s/ Stephen P. Munn Stephen P. Munn | ||
Dated: June 6, 2012 |
Item 28 Exhibit No. | Description |
(d)(5) | Subadvisory Agreement between PI and Epoch Investment Partners, Inc. with respect to each Fund dated July 12, 2012 |
(j) | Consent of independent registered public accounting firm |
(m)(6) | Distribution and fee waiver for Class A and R shares |
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TARGET ASSET ALLOCATION FUNDS
Target Conservative Allocation Fund
Target Moderate Allocation Fund
Target Growth Allocation Fund
SUBADVISORY AGREEMENT
Agreement made as of this 12th day of July, 2012 between Prudential
Investments LLC ("PI" or the "Manager"), a New York limited liability company, and Epoch Investment Partners,
Inc. (the "Subadviser" or "Epoch"), a Delaware corporation.
WHEREAS, the Manager has entered into a Management Agreement,
dated May 25,2004, (the "Management Agreement") with Target Asset Allocation Funds, a Delaware statutory trust (the "Trust")
and a diversified, open-end, management investment company registered under the Investment Company Act of 1940, as amended (the
1940 Act), pursuant to which PI acts as Manager of the Trust; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment advisory services to the Target Conservative Allocation
Fund, Target Moderate Allocation Fund, and Target Growth Allocation Fund (each of which is referred to hereafter as the Fund),
each of which is a series of the Trust, and to manage such portion of the Fund's portfolio as the Manager shall from time to time
direct, and the Subadviser is willing to render such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of Trustees of the Trust (the Board), the Subadviser shall manage such portion of the Fund's portfolio, including the purchase, retention and disposition thereof, in accordance with the Fund's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of the Fund's portfolio as the Manager shall direct and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned (other than directing a securities lending program) by the Fund, and what portion of the assets will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the Declaration of Trust, as amended, and the By-Laws of the Trust and Prospectus of the Fund and any procedures adopted by the Board applicable to the Fund and any amendments to those procedures (Board Procedures) which have been provided to it by the Manager (the Trust Documents), and with the instructions and directions of the Manager and of the Board, and co-operate with the Manager's (or its designee's) personnel responsible for monitoring the Fund's compliance. The Subadviser shall also comply at all times with the applicable sections of the 1940 Act, the Investment Advisers Act of 1940, as amended (the Advisers Act), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations, including securities law. The Manager shall provide Subadviser timely with copies of any updated Trust or Fund Documents, including a list of Fund affiliates.
(iii) The Subadviser shall determine the securities and futures contracts to be purchased or sold by such portion of
the Fund's portfolio, as applicable, and shall place orders with or through such persons, brokers, dealers or futures commission merchants (including but not limited to any broker-dealer affiliated with the Manager or the Subadviser) to carry out the policy with respect to brokerage as set forth in the Fund's Prospectus or as the Board may direct from time to time. In providing the Fund with investment supervision, it is recognized that the Subadviser shall give primary consideration to seeking best execution (which may not involve the most favorable commission). Within the framework of this policy, the Subadviser may consider the receipt of services that affect securities transactions and incidental functions, such as clearance and settlement functions, and advice as to the value of securities, the advisability of investing in securities, the availability of securities or purchasers or sellers of securities and analyses and reports concerning issues, industries, securities, economic factors, trends, portfolio strategy, and the performance of accounts, the financial responsibility, and other services provided by brokers, dealers or futures commission merchants who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Manager (or Subadviser) to the Fund each shall have discretion to effect investment transactions for the Fund through broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Fund to pay any such broker-dealers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the brokerage or research services provided by such broker-dealer, viewed in light of either that particular investment transaction or the overall responsibilities of the Manager (or the Subadviser) with respect to the Fund and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. Pursuant to the rules promulgated under Section 326 of the USA PATRIOT ACT, broker-dealers are required to obtain, verify and record information that identities each person who opens an account with them. In accordance therewith, broker-dealers whom the Subadviser selects to execute transactions in the Fund's account may seek identifying information about the Trust and/or the Fund.
On occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Fund as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased in order to obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, shall be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other clients.
The Manager hereby agrees and consents that the Subadviser and its affiliates are authorized to execute cross agency transactions for the Fund, provided such transactions comply with applicable laws and regulations.
(iv) The Subadviser shall maintain all books and records
with respect to the Fund's portfolio transactions effected by it as required by any applicable federal or state securities laws
or regulations, including the 1940 Act, the 1934 Act and the Advisers Act. The Subadviser shall furnish to the Manager or the Board
all information relating to the Subadviser's services under this Agreement reasonably requested by the Manager in writing and the
Board within a reasonable period of time after the Manager or the Board makes such request. The Subadviser shall make reasonably
available with prior written notice its employees and officers (or their designees) for consultation with any of the trustees or
officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of
the Fund's securities.
(v) The Subadviser or its affiliates shall provide the Fund's Custodian on each business day with information relating to all transactions
concerning the portion of the Fund's assets it manages. The Subadviser shall furnish the Manager
each day with mutually agreed upon information in a mutually agreed upon format concerning portfolio transactions, and such other reports in a form and frequency as agreed upon from time to time concerning transactions, portfolio holdings and performance of the Fund. The Subadviser agrees to review the Fund and discuss the management of the Fund with the Manager and the Board as either or both shall from time to time reasonably request.
(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Subject to the Subadviser's responsibility to the Fund, the Manager agrees that the Subadviser may give advice or exercise investment responsibility and take such other action with respect to other individuals or entities which may differ from advice given to the Fund. Further, the Manager acknowledges that the Subadviser, or its agent, or employees, or any of the accounts the Subadviser advises, may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund may or may not have an interest from time to time, whether such transactions involve the Fund or otherwise.
(vii) The Subadviser and Manager understand and agree that if the Manager manages the Fund in a "manager-of managers" style, the Manager will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with the Subadviser should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process in accordance with Section 7 of this Agreement.
(viii) The Subadviser acknowledges that the Manager
and the Trust intend to rely on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Subadviser hereby
agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Fund's
portfolio or any other transactions of Fund assets.
(ix) The Subadviser shall provide annually to the Manager a copy of Subadviser's Form ADV as filed with the Securities and Exchange
Commission (the Commission).
(b) The Subadviser shall keep the Fund's books and records required to be maintained by the Subadviser pursuant to paragraph l(a) hereof in the form and for the period required by Rule 31a-2 under the 1940 Act. The Subadviser agrees that all records which it maintains for the Fund are the property of the Fund, and the Subadviser shall surrender promptly to the Fund any of such records upon the Fund's request, provided, however, that the Subadviser may retain copies of such records. The Fund's books and records maintained by the Subadviser shall be made available, within a reasonable period of time following submission of a written request, to the Fund's accountants or auditors during regular business hours at the Subadviser's offices. The Fund, the Manager or their respective authorized representatives shall have the right to copy any records in the Subadviser's possession that pertain to the Fund. These books, records, information, or reports may be made available to properly authorized government representatives consistent with state and federal law and/or regulations, provided that the Subadviser is given prior notice of such disclosure, unless such prior notice is prohibited by law or regulation. In the event of the termination of this Agreement, the Fund's books and records maintained by the Subadviser shall be returned to the Fund or the Manager upon the written request of the Trust, provided that the Subadviser shall be permitted to keep copies of such records. The Subadviser agrees that, subject to the execution of a Confidentiality and Non-Disclosure Agreement by and between the Subadviser and the Manager, the policies and procedures the Subadviser has established for managing the Fund's portfolio, including, but not limited to, all policies and procedures designed to ensure compliance with federal and state laws and regulations governing the adviser/client relationship and
management and operation of the Fund, shall be made
available for inspection by the Fund, the Manager or their respective authorized representatives upon reasonable written request
within not more than ten (10) business days.
(c) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements
of Rule 17j-1 under the 1940 Act and Rule 204A-l under the Advisers Act, a copy of which shall be provided to the Manager and the
Fund, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-l under the 1940
Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics
in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures
to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular,
the Sub adviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material,
nonpublic information by the Subadviser and its employees as required by the Insider Trading and Securities Fraud Enforcement Act
of 1988, a copy of which it shall provide to the Manager and the Fund upon reasonable request, subject to the requirements of paragraph
1(b) hereof. The Subadviser shall use its best efforts to ensure that its employees comply in all material respects with the provisions
of Section 16, as applicable, of the 1934 Act, and to cooperate reasonably with the Manager for purposes of filing any required
reports with respect to the Fund with the Securities and Exchange Commission (the Commission) or such other regulator having appropriate
jurisdiction. The Subadviser shall be responsible for the preparation and filing of Form 13F on behalf of the Fund, unless otherwise
directed by the Manager.
(d) The Subadviser shall furnish to the Manager a mutually-agreed upon certification regarding records prepared in connection with
maintenance of compliance procedures pursuant to paragraph l(c) hereof as the Manager may reasonably request in writing.
(e) The Subadviser shall be responsible for the voting
of all shareholder proxies with respect to the investments and securities held in the Fund's portfolio in accordance with the Subadviser's
procedures, subject to such reporting and other requirements as shall be established by the Manager which may include use by Manager
of a third-party vendor for proxy voting administration services. The Subadviser may utilize a third-party voting service and customized
policies designed to promote accountability of a company's management and board of directors to its shareholders and to align the
interests of management with those of shareholders.
(f) Upon reasonable request from the Manager in writing, the Subadviser (through a qualified person) shall assist the valuation
committee of the Trust or the Manager in valuing securities of the Fund as may be required from time to time, including making
available information of which the Subadviser has knowledge related to the securities being valued.
(g) The Subadviser shall provide the Manager with any information reasonably requested regarding its management of the Fund's portfolio
required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the
Commission. The Sub adviser shall provide the Manager with a mutually agreeable certification, documentation or other information
reasonably requested or required by the Manager for purposes of the certifications of shareholder reports by the Trust's principal
financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser
shall promptly inform the Fund and the Manager if any information provided by Subadviser in the Prospectus is (or will become)
materially inaccurate or incomplete.
(h) The Subadviser shall comply with Board Procedures provided to the Subadviser by the Manager or the Fund.
The Subadviser shall notify the Manager as soon as reasonably
practicable upon detection of any material breach of such Board Procedures.
(i) The Subadviser shall keep the Fund and the Manager informed of developments relating to its duties as Sub adviser of which
the Subadviser has knowledge that would materially affect the Fund. In this regard, the Subadviser shall provide the Trust, the
Manager, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this
Agreement as the Fund and the Manager may from time to time reasonably request. Additionally, prior to each Board meeting, the
Subadviser shall provide the Manager and the Board with reports regarding the Subadviser's management of the Fund's portfolio during
the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Manager. The Subadviser
shall certify quarterly to the Fund and the Manager that it and its "Advisory Persons" (as defined in Rule 17j-1 under
the 1940 Act) have complied materially with the requirements of Rule 17j-l under the 1940 Act during the previous quarter or, if
not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish
a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-l under the 1940 Act, concerning the Subadviser's
Code of Ethics and compliance program, respectively, to the Fund and the Manager.
(j) The Subadviser is not responsible for making any securities class action filings on behalf of the Trust or the Fund.
2. The Manager shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Management Agreement and, as more particularly discussed above, shall
oversee and review the Subadviser's performance of its duties under this Agreement. The Manager shall provide (or cause the Fund's
custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of
the Fund managed by the Subadviser, cash requirements and cash available for investment in such portion of the Fund, and all other
information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes
of meetings of the Board that affect the duties of the Subadviser).
3. The assets of the Fund shall be maintained in the custody of a custodian as designated within an agreement between the Fund
and the custodian (the "Custodian"). Subadviser shall have no liability for the acts or omissions of the Custodian, unless
such act or omission is taken solely in reliance upon instruction given to the Custodian by a representative of Subadviser properly
authorized to give such instruction.
4. For the services provided pursuant to this Agreement,
the Manager shall pay the Subadviser as full compensation therefore, a fee equal to the percentage of the Fund's average daily
net assets (as calculated by the Custodian) of the portion of the Fund managed by the Subadviser as described in the attached Schedule
A. Expense caps or fee waivers for the Fund that may be agreed to by the Manager, but not agreed to by the Subadviser, shall not
cause a reduction in the amount of the payment to the Subadviser by the Manager. If this Agreement becomes effective or terminates,
or if the manner of determining the applicable fee changes, in the middle of any month, the fee (if any) for the period from the
effective date to the end of such month or from the beginning of such month to the date of termination or change, as the case may
be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination
or change occurs.
5. (a) The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Fund or the Manager in connection
with the matters to which this Agreement relates, except a loss resulting from willful misfeasance or bad faith on the Subadviser's
part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided,
however, that nothing in this Agreement shall be deemed to waive any rights the Manager or the Fund may have against the Subadviser
under federal or state securities laws.
The Manager shall indemnify the Subadviser, its affiliated
persons, its officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may
be sustained as a result of the Manager's willful misfeasance, bad faith, or reckless disregard of its duties hereunder or violation
of applicable law, including, without limitation, the 1940 Act and federal and state securities laws.
The Subadviser shall indemnify the Manager, their affiliated persons, their officers, directors and employees, for any liability
and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance,
bad faith, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940
Act and federal and state securities laws. In any event, neither the Subadviser nor its affiliates shall be liable for any loss
or damage arising or resulting from the acts or omissions of the Fund's custodian, any broker, financial institution or any other
third party with or through whom the Sub adviser arranges or enters into a transaction with respect to the Fund.
(b) The Manager acknowledges and agrees that the Subadviser makes no representation or warranty, expressed or implied, that any
level of performance or investment results will be achieved by the Fund or that the Fund will perform comparably with any standard
or index, including other clients of the Subadviser, whether public or private.
(c) The Manager expressly acknowledges that the Subadviser
is a Delaware Corporation and that all persons dealing with the Subadviser must look solely to the property of the Subadviser for
satisfaction of claims of any nature against the Subadviser, as neither the trustees, officers, employees nor shareholders of the
Subadviser assume any personal liability in connection with its business or for obligations entered into on its behalf.
6. Subject to the right of each, the Manager and Subadviser, to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction over it, the parties hereto shall treat as confidential all information pertaining to the
Fund and the actions of each the Manager and Subadviser in respect thereof. In accordance with Regulation S-P, if non-public personal
information regarding either party's customers or consumers is disclosed to the other party in connection with the Agreement, the
party receiving such information will not disclose or use that information other than as necessary to carry out the purposes of
this Agreement.
7. This Agreement shall continue in effect for a period
of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity
with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Fund at any time, without
the payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Manager or the Subadviser at any time, without the payment of any penalty, on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment
(as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it shall promptly
notify the Fund and the Manager of the occurrence or anticipated occurrence of any event that would result in the assignment (as
defined in the 1940 Act) of this Agreement, including, but not limited to, a change or anticipated change in control (as defined
in the 1940 Act) of the Subadviser; provided that the Subadviser need not provide notice of such an anticipated event before the
anticipated event is a matter of public record.
8. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or
mailed by registered mail, postage prepaid, (1) to the Manager at Gateway Center Three, 100 Mulberry Street, 4th Floor, Newark,
NJ 07102-4077, Attention: Secretary; (2) to the Company at Gateway Center Three, 4th Floor, 100 Mulberry Street, Newark, NJ 07102-4077,
Attention: Secretary; or (3) to the Subadviser at 640 Fifth
Avenue, 18th Floor, New York, NY 10019 Attention: David
A. Barnett, with a copy to Lauren Babij at the same address.
9. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who
may also be a Trustee, officer or employee of the Trust or the Fund to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit
or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation,
firm, individual or association.
10. During the term of this Agreement, the Manager agrees to furnish the Subadviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature or other material prepared for distribution to shareholders of the Fund or
the public, which refer to the Subadviser in any way (including the Subadviser's name, derivatives thereof and any logo associated
therewith), prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or
such other time as may be mutually agreed) after confirming receipt thereof and prior to the distribution of such material. Sales
literature may be furnished to the Subadviser hereunder by first-class or overnight mail, facsimile transmission equipment or hand
delivery. The Manager hereby approves the use of the Manager's, the Trust's or the Fund's name (and any derivatives thereof or
any logos associated with those names) on a representative client list of the Subadviser.
11. The Manager hereby certifies that there are policies and procedures reasonably designed to effect the Fund's policies and procedures
disclosed in its prospectus to detect and deter disruptive trading practices in the Fund, including "market timing,"
and the Manager agrees that it will continue to enforce and abide by such policies and procedures, as amended from time to time.
The Subadviser agrees, upon reasonable request from the Manager, reasonably to assist the Manager to detect and deter disruptive
trading practices in the Fund. Manager and Sub adviser agree to fulfill their respective duties under this Agreement in accordance
with applicable laws and regulations, both state and federal.
12. In performance of its duties and obligations under this Agreement, the Manager shall use best efforts to not share sales data
for the Fund with the Subadviser
13. The parties to this Agreement each agree to cooperate in a reasonable manner with each other in the event that any of them should become involved in a legal, administrative, judicial or regulatory action, claim, or suit as a result of performing its obligations under this Agreement.
14. This Agreement may be amended by mutual consent,
but the consent of the Company must be obtained in conformity with the requirements of the 1940 Act.
15. This Agreement shall be governed by the laws of the State of New York.
16. The Manager acknowledges that the Subadviser has provided it with a copy of the Subadviser's most recent Form ADV as filed with the Securities and Exchange Commission, for its benefit and the benefit of the Trust.
17. This Agreement in no way restricts the Subadviser's right to perform investment management or other services for any person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to the Fund. The Fund and the Manager understand that the Subadviser shall not have any obligation to purchase or sell any security for the Fund which it (as investment manager for other clients, or as principal) or its affiliates or employees may purchase or sell for its or their own account or for the account of any
other clients, if it is the Subadviser's opinion that
such transaction or investment appears unsuitable or undesirable for the Fund.
18. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations
thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations
or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected
in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the
day and year first above written.
PRUDENTIAL INVESTMENTS LLC
BY: /s/ Scott Benjamin
Name: Scott Benjamin
Title: EVP, Prudential Investments
EPOCH INVESTMENT PARTNERS, INC.
BY: /s/ Timothy T. Tausig
Print Name: Timothy T. Tausig
Title: President & COO
Schedule A
TARGET CONSERVATIVE ALLOCATION FUND
TARGET MODERATE ALLOCATION FUND
TARGET GROWTH ALLOCATION FUND
As compensation for services provided by Epoch Investment Partners, Inc. (Epoch), Prudential Investments LLC (PI) will
pay Epoch a fee equal, on an annualized basis, to the following:
Fund Names | Fee on Combined Average Daily Net Assets* |
Target Conservative Allocation Fund Target Moderate Allocation Fund Target Growth Allocation Fund |
0.275% of combined assets up to $1 billion; 0.20% of combined average daily net assets over $1 billion. |
*Combined assets are assets in all portfolios subadvised by Epoch that are managed by Prudential Investments LLC that
have substantially the same investment strategy(ie., domestic large cap value). Such portfolios are the Large Capitalization Value Portfolio of The Target Portfolio Trust; Target Conservative Allocation Fund, Target Moderate Allocation Fund and Target Growth Allocation Fund, each a series of Target Asset Allocation Funds.
Dated as of July 12, 2012
Consent of Independent Registered Public Accounting Firm
The Board of Trustees and Shareholders
Target Asset Allocation Funds:
We consent to the use of our report incorporated by reference herein and to the references to our firm under the headings “Financial Highlights” in the prospectus and “Other Service Providers” and “Financial Statements” in the statement of additional information.
New York, New York
September 26, 2012
TARGET ASSET ALLOCATION FUNDS
Target Conservative Allocation Fund
Target Moderate Allocation Fund
Target Growth Allocation Fund
Notice of 12b-1 Fee Waiver
Class A and Class R Shares
THIS NOTICE OF RULE 12b-1 FEE WAIVER is signed as of August 1, 2012, by PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC (PIMS), the Principal Underwriter of Target Asset Allocation Funds, a multi-series open-end management investment company (the Trust and each separate series of which is referred to as a Fund).
WHEREAS, PIMS has been waiving a portion of its distribution and shareholder services fees payable on Class A and Class R shares of each Fund (Rule 12b-1 fees); and
WHEREAS, PIMS desires to continue to provide a contractual waiver of a portion of Rule 12b-1 fees; and
WHEREAS, PIMS understands and intends that the Trust will rely on this Notice and agreement in preparing a registration statement on Form N-1A and in accruing each Fund’s respective expenses for purposes of calculating net asset value and for other purposes, and expressly permits the Trust to do so; and
WHEREAS, shareholders of the Funds will benefit from the ongoing contractual waiver by incurring lower Fund operating expenses than they would absent such waiver.
NOW, THEREFORE, PIMS hereby provides notice that it has agreed to limit the distribution or service (12b-1) fees incurred by Class A shares of each Fund to .25 of 1% of the respective average daily net assets attributable to Class A shares of each Fund. This contractual waiver shall be effective from the date hereof through November 30, 2013.
NOW, THEREFORE, PIMS hereby provides notice that it has agreed to limit the distribution and service (12b-1) fees incurred by Class R shares of each Fund to .50 of 1% of the average daily net assets attributable to Class R shares of each Fund. This contractual waiver shall be effective from the date hereof through November 30, 2013.
IN WITNESS WHEREOF, PIMS has signed this Notice of Rule 12b-1 Fee Waiver as of the day and year first above written.
PRUDENTIAL INVESTMENT
MANAGEMENT SERVICES LLC
By: /s/ Scott E. Benjamin
Name: Scott E. Benjamin
Title: Vice President