0000898733-01-500406.txt : 20011009
0000898733-01-500406.hdr.sgml : 20011009
ACCESSION NUMBER: 0000898733-01-500406
CONFORMED SUBMISSION TYPE: N-30D
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20010731
FILED AS OF DATE: 20011001
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: STRATEGIC PARTNERS ASSET ALLOCATION FUNDS
CENTRAL INDEX KEY: 0001067442
STANDARD INDUSTRIAL CLASSIFICATION: []
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0731
FILING VALUES:
FORM TYPE: N-30D
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-08915
FILM NUMBER: 1749623
BUSINESS ADDRESS:
STREET 1: GATEWAY CENTER THREE
STREET 2: 100 MULBERRY STREET
CITY: NEWARK
STATE: NJ
ZIP: 07102
BUSINESS PHONE: 9733671495
FORMER COMPANY:
FORMER CONFORMED NAME: PRUDENTIAL DIVERSIFIED FUNDS
DATE OF NAME CHANGE: 19980930
FORMER COMPANY:
FORMER CONFORMED NAME: PRUDENTIAL DIVERSIFIED SERIES
DATE OF NAME CHANGE: 19980803
N-30D
1
jul15035.txt
STRATEGIC PARTNERS ASSET ALLOCATION -- PROS -- 10/1/01
(ICON)
ANNUAL REPORT JULY 31, 2001
STRATEGIC PARTNERS
ASSET ALLOCATION FUNDS
Strategic Partners
High Growth Fund
Objective: Seeks Long-Term Capital Appreciation
This report is not authorized for distribution
to prospective investors unless preceded or
accompanied by a current prospectus. The views
expressed in this report and information about
the Fund's portfolio holdings are for the
period covered by this report and are subject
to change thereafter.
(LOGO)
Build on the Rock
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Performance at a Glance
INVESTMENT GOALS AND STYLE
The Strategic Partners High Growth Fund seeks
to provide long-term capital appreciation. It invests
in a diversified portfolio of equity stocks. There
can be no assurance that the Fund will achieve
its investment objective.
MANAGER
Prudential Investments Fund Management LLC
INVESTMENT ADVISERS
(LOGO)
www.strategicpartners.com (800) 225-1852
Annual Report July 31, 2001
Cumulative Total Returns1 As of 7/31/01
One Since
Year Inception2
Class A -10.09% 23.25%
Class B -10.66 21.05
Class C -10.66 21.05
Class Z -9.74 24.41
Lipper Multi-Cap Core Fund Avg.3 -12.56 18.62
Average Annual Total Returns1 As of 6/30/01
One Since
Year Inception2
Class A -12.24% 7.23%
Class B -13.24 7.57
Class C -10.16 8.17
Class Z -7.43 9.67
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund
Management LLC and Lipper Inc. The cumulative
total returns do not take into account sales
charges. The average annual total returns do
take into account applicable sales charges. The
Fund charges a maximum front-end sales charge
of 5% for Class A shares. Class B shares are
subject to a declining contingent deferred
sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and
1% for six years. Approximately seven years
after purchase, Class B shares will
automatically convert to Class A shares on a
quarterly basis. Class C shares are subject to
a front-end sales charge of 1% and a CDSC of 1%
for 18 months. Class Z shares are not subject
to a sales charge or distribution and
service (12b-1) fees.
2 Inception date: Class A, B, C, and Z,
11/18/98.
3 Lipper average returns are unmanaged, and are
based on the average return for all funds in
each share class for the one-year and since
inception periods in the Lipper Multi-Cap Core
Fund category. The Lipper Multi-Cap Core Fund
Average includes funds that invest in a variety
of market capitalization ranges, generally have
between 25% and 75% of their equity assets invested
in companies with market capitalizations above 300% of
the dollar-weighted median of the S&P MidCap 400 Index,
have wide latitude in the companies in which
they invest, have an above-average price/earnings
ratio and price-to-book ratio, and have a three-year
earnings growth figure.
1
STRATEGIC PARTNERS
Asset Allocation Funds
(LOGO)
September 18, 2001
DEAR SHAREHOLDER,
The horrific events that took place on
September 11, 2001 will remain forever
ingrained in our nation's consciousness.
In their aftermath, our thoughts and our
prayers remain with the victims of this
senseless tragedy, their families, and friends.
It is also with deep gratitude that we
acknowledge the heroic efforts of the men and
women involved in the rescue efforts.
We at Prudential Financial would like to take
the opportunity during this difficult time
to reassure our shareholders of our unwavering
commitment to their investment needs. Under
normal circumstances, the investment landscape
is a difficult one to navigate, and during this
extremely tragic period in our nation's history,
even more so. We're here to provide the expertise
and resources that may help make the journey ahead
less daunting.
For now, investors should try to maintain a
patient focus on their long-term investment
strategies. It is also important for
individuals to avoid making investment
decisions based on emotional reactions. While
no one can predict the future, history has
shown that after an event of this magnitude,
the major markets post initial sharp declines
from which they eventually recover. Should
history repeat itself, individuals who leave
the market now may be unable to fully
participate in a market rebound. Above all,
investors should continue to seek guidance
from their financial professionals.
It is a testament to the resiliency of our
country that as we mourn, we also carry on.
Please let us know how we can help you as we
move forward together in the weeks and months
ahead.
Sincerely,
David R. Odenath, Jr., President
Strategic Partners Asset Allocation Funds
2
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Annual Report July 31, 2001
PRUDENTIAL DIVERSIFIED FUNDS RENAMED "STRATEGIC PARTNERS
ASSET ALLOCATION FUNDS"
On September 4, 2001, we welcomed the
Prudential Diversified Funds into the Strategic
Partners family of mutual funds, renaming them
the Strategic Partners Asset Allocation Funds.
These changes will have no effect at all on the
Funds' management: Both the asset allocations
and the advisers for each asset class have stayed
the same.
The change will allow investors in these Funds
to exchange their shares with shares of other
Strategic Partners Funds, including the
Strategic Partners Style Specific Funds and the
Strategic Partners Opportunity Funds. Our team
of investment management analysts selected
investment advisers for all of the Strategic
Partners Funds from among leading managers
across the entire investment industry. Should
you and your financial professional wish to
modify the asset allocation provided by your
fund, we believe the Strategic Partners family
offers a fine selection. Effective September 4,
2001, however, your shares of any Strategic Partners
fund are no longer exchangeable for those of
funds in the Prudential fund family.
3
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Annual Report July 31, 2001
INVESTMENT ADVISERS' REPORT
PERFORMANCE
During the Strategic Partners High Growth
Fund's (formerly Prudential Diversified High
Growth Fund) fiscal year ended July 31, 2001,
the price of growth stocks fell sharply. The
stronger performance of value stocks only
mitigated the decline for investors in the
Fund; it didn't offset it. However, the -10.09%
return of the Fund's Class A shares (-14.52% to
those paying the maximum one-time Class A share
sales charge) was substantially above the -
12.56% Lipper Multi-Cap Core Fund Average.
A GOOD TIME FOR DEFENSIVE INVESTING
During the 12 months ended July 31, 2001,
investors gradually came to accept that the
U.S. economy was slowing and that it was
affecting the global economy. As company
after company announced profits that
were well below growth estimates, and even
below levels a year earlier, stock prices
began to fall precipitously. The worst hit
were primarily growth stocks whose peak
prices reflected the assumption that their
companies' earnings would increase very
rapidly. U.S. large-cap and small-cap growth
stocks had prolonged slides from September
2000 through March 2001 before recovering modestly.
In response to the market conditions, many
investors fled to asset classes that are
thought of as defensive--that is, relatively
immune to an economic slowdown--such as
inexpensively priced (value) stocks. This
increased interest pushed up prices in those
asset classes. Small-cap value stocks, which
had been neglected for some time, particularly
benefited: the return of the small-cap Russell
2000 Value Index was a huge 47 percentage
points above that of the corresponding Growth
Index. International stocks generally followed
the U.S. market down as the slowing U.S.
economy affected sales of companies based in
other countries.
4
www.strategicpartners.com (800) 225-1852
Asset Class Index Returns
(GRAPH)
Source: Prudential and Lipper Inc.
The performance cited does not represent the
performance of the Strategic Partners High
Growth Fund. Past performance is not indicative
of future results. Investors cannot invest
directly in an index.
The S&P/ Barra Value Index is an unmanaged,
weighted index comprising companies within the
S&P 500 Index with lower price-to-book ratios.
The S&P/Barra Growth Index is an unmanaged,
weighted index comprising companies within the
S&P 500 Index with higher price-to-book ratios.
The Russell 2000 Value Index is an unmanaged,
weighted index that measures the performance of
those Russell 2000 companies with lower price-
to-book ratios.
The Russell 2000 Growth Index is an unmanaged,
weighted index that measures the performance of
those Russell 2000 companies with higher price-
to-book ratios.
The Morgan Stanley Capital International
Emerging Market Free Index (MSCI EAFE Index) is
an unmanaged, weighted index that comprises
approximately 965 companies representing Asia,
Africa, Europe, and North and South America.
MSCI Free Indexes account for the actual
buyable securities available to foreign
investors by taking into account local market
restrictions on share ownership by foreigners.
These indexes are calculated in U.S. dollars,
without dividends reinvested.
5
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Annual Report July 31, 2001
THE FUND OUTPERFORMED ITS BENCHMARK...
The Strategic Partners High Growth Fund's
outperformance relative to the Lipper Multi-Cap
Core Fund Average was primarily due to the
substantial positive returns of its value
stocks, which made up about 40% of its
holdings.
The Fund's large-cap value comparable index,
the S&P/Barra Value Index, was solidly
positive, but the Fund's holdings in that asset
class still far outperformed the Index. The
Fund's strong performance in this asset class
resulted from focuses on the insurance
(primarily property and casualty), basic
materials (paper, aluminum, and chemicals),
tobacco, and health services (HMO and hospital
management) industries. Stocks in these
industries were recovering from their depressed
prices in previous years, and earnings were
consistent or rising.
Small-cap value stocks, an asset class that had
previously suffered several years of poor
performance, staged a strong rebound when
investors fled from high-priced stocks to those
that had remained inexpensive. Because of their
volatile nature, small-cap value stocks are
among the Fund's smaller asset allocations.
Nonetheless, their exceptionally high return
this reporting period made a significant,
positive contribution to the Fund, even though
the Fund's holdings slightly trailed the
Russell 2000 Value Index.
...BUT LOSING ASSET CLASSES STILL PREDOMINATED
The largest detractor from the Fund's return
was its position in large-cap growth stocks--the
worst performing asset class over the period
and one of the larger components of the Fund.
As corporate profits fell below last year's
levels, the stocks of rapidly growing companies
suffered most. Cumulatively, the Fund's
holdings fell a bit farther than the S&P/Barra
Growth Index largely because of their emphasis
on technology, media, and telecommunications.
The Fund's investments in these industries
included companies that were central to the
building of the Internet (such as Cisco Systems
and JDS Uniphase), and to wireless
telecommunications products and services (such
as Nokia and Vodafone). Share price declines in
these industries were very dramatic.
6
www.strategicpartners.com (800) 225-1852
The slowing U.S. economy and falling stock
market also affected the Fund's international
stock holdings. Over the reporting period, the
MSCI EAFE Index, a general measure of
international stock performance, dropped by
more than 20%. Although the Fund's holdings
modestly outperformed this Index, the magnitude
of the international markets' decline
overwhelmed the Fund's margin of
outperformance.
Strategic Partners High Growth Fund Management Team
7
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Annual Report July 31, 2001
WHAT IS DIVERSIFICATION
Diversification--spreading your investments over
many different securities--is a basic principle
of investing. It helps reduce the overall risk
of your portfolio. Mutual funds not only
provide professional money management, but they
also allow a relatively small investment to be
spread over many different securities. When you
own a large number of different securities, the
impact of any one security on your return is
reduced. In addition, if you diversify your
investments among asset classes and investment
styles--between stocks and bonds, value and
growth stocks, and investment-grade and high-
yield bonds--it is less likely that all the
securities you own will move in the same
direction at one time. Strategic Partners Asset
Allocation Funds provide more of this buffer
than funds investing in only one asset class.
We believe this will result in more consistent
returns over time. In addition, when we
rebalance the Strategic Partners High Growth
Fund to restore the original weighting of
different asset classes, the discipline forces
us to sell high and buy low. Over time, this
may improve your return.
REBALANCING
The Strategic Partners High Growth Fund has a
target allocation for each asset class. As some
asset classes perform better than others, the
portfolio will drift from this original target:
the securities that rise most will become a
larger proportion of the invested assets. We
direct new investments to the asset classes
that have fallen below their target ratio and,
when necessary, sell certain securities in
appreciated asset classes to maintain the
balance. This not only keeps your risk exposure
from changing too much, but it may reduce the
average cost of our investments and increase
our average selling price over time.
Although an individual investor can diversify
and rebalance, it would require a large
investment to own the range of asset classes
represented in the Strategic Partners High
Growth Fund. Moreover, calculating the amounts
to allocate to each kind of security in a
rebalancing would be difficult. Strategic
Partners Asset Allocation Funds do it all for
you.
8
www.strategicpartners.com (800) 225-1852
Glossary of Terms
Asset classes are classifications of
investments. The most basic classification of
securities is among stocks, bonds, and money
market investments. Stocks are shares of
ownership in a firm. Owners share in the
profits after debts are paid, and share in the
firm's appreciation in value. Generally, the
prices of stocks vary with investors' estimates
of a firm's earnings prospects, including the
impact of broader economic conditions.
Strategic Partners High Growth Fund Diversification Target
(GRAPH)
9
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 94.4%
Common Stocks
-------------------------------------------------------------------------------------
Advertising 0.8%
1,950 ADVO, Inc. $ 76,148
12,200 Lamar Advertising Co. 536,556
6,200 Omnicom Group, Inc. 541,694
4,300 R.H. Donnelley Corp. 133,300
----------------
1,287,698
-------------------------------------------------------------------------------------
Aerospace/Defense 0.9%
4,900 BE Aerospace, Inc.(a) 90,993
81,700 British Aerospace PLC (United Kingdom)(a) 436,048
7,600 Embraer Empresa Brasileira de Aeronautica SA,
ADR 270,560
9,000 Northrop Grumman Corp. 722,070
----------------
1,519,671
-------------------------------------------------------------------------------------
Agriculture & Equipment 0.4%
11,700 Monsanto Co. 411,840
3,900 Toro Co. 183,885
----------------
595,725
-------------------------------------------------------------------------------------
Airlines 0.5%
10,050 Airtran Holdings, Inc. 86,430
14,050 America West Holdings Corp. (Class B) 145,418
14,300 Atlantic Coast Airlines Holdings, Inc.(a) 415,415
2,650 SkyWest, Inc. 88,881
----------------
736,144
-------------------------------------------------------------------------------------
Auto & Truck 1.3%
16,300 General Motors Corp. (Class H Stock)(a) 314,590
7,000 Lear Corp.(a) 277,200
12,700 Navistar International Corp.(a) 407,797
104,000 Nissan Motor Co., Ltd. (Japan)(a) 715,086
16,000 Toyota Motor Corp. 528,269
----------------
2,242,942
10 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Banking 5.3%
1,600 1st Source Corp. $ 38,928
45,900 ABN AMRO Holdings NV, ADR 811,529
2,300 Astoria Financial Corp. 137,977
8,450 BancorpSouth, Inc. 136,045
15,200 Bank One Corp. 588,392
16,600 BankAtlantic Bancorp, Inc. (Class A) 170,150
6,151 Banknorth Group, Inc. 141,227
5,800 Banque Nationale de Paris (France) 504,350
13,500 Bayerische Vereinsbank AG (Germany) 602,328
3,400 City National Corp. 159,800
8,150 Colonial BancGroup, Inc. 119,968
2,300 Corus BankShares, Inc. 136,160
3,300 Cullen/Frost Bankers, Inc. 115,863
7,487 CVB Financial Corp. 142,028
5,800 East West Bancorp, Inc. 148,016
450 First Citizens BancShares, Inc. 45,230
4,550 First Merchants Corp. 106,925
6,615 Fulton Financial Corp. 146,853
2,800 Harbor Florida Bancshares, Inc. 53,340
79,000 HSBC Holdings PLC (United Kingdom)(a) 915,378
4,500 Independent Bank Corp. 87,975
4,350 MAF Bancorp, Inc. 134,154
96 Mizuho Holdings, Inc. (Japan) 369,275
48,850 Overseas-Chinese Banking Corp., Ltd. (Singapore) 308,869
5,600 PFF Bancorp, Inc. 143,360
28,700 San Paolo Imi SpA (Italy) 355,877
6,850 Silicon Valley Bancshares(a) 138,096
4,250 Southwest Bancorporation of Texas, Inc.(a) 142,885
74,000 Sumitomo Bank (Japan) 530,160
61,000 Sumitomo Trust & Banking Co., Ltd. (Japan) 353,921
5,850 Susquehanna Bancshares, Inc. 121,914
85,904 United Overseas Bank, Ltd. (Singapore) 500,273
7,205 Washington Federal, Inc. 191,725
3,400 WestAmerica Bancorp. 134,130
See Notes to Financial Statements 11
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
2,800 Whitney Holding Corp. $ 126,252
----------------
8,859,353
-------------------------------------------------------------------------------------
Building & Construction 1.0%
3,900 Centex Corp. 183,456
6,176 D.R. Horton, Inc. 170,149
4,700 KB Home 153,173
3,500 Lennar Corp. 160,615
3,825 M.D.C. Holdings, Inc. 160,421
3,950 Nortek, Inc. 105,149
5,150 Thomas Industries, Inc. 132,458
9,038 Vivendi SA (France) 530,276
3,600 York International Corp. 119,232
----------------
1,714,929
-------------------------------------------------------------------------------------
Chemicals 1.5%
16,900 Akzo Nobel NV (Netherlands) 706,520
4,400 Albany Molecular Research, Inc.(a) 136,796
5,150 Arch Chemicals, Inc. 103,515
8,600 Cambrex Corp. 409,790
5,125 Cytec Industries, Inc.(a) 166,511
2,250 Du Pont Photomasks, Inc. (Class A) 86,783
3,900 Ferro Corp. 86,190
4,650 Great Lakes Chemical Corp. 132,014
3,050 H.B. Fuller Co. 160,643
5,650 Lubrizol Corp. 197,072
3,650 Minerals Technologies, Inc. 155,015
7,700 Olin Corp. 129,899
1,850 OM Group, Inc. 108,225
----------------
2,578,973
-------------------------------------------------------------------------------------
Commercial Services 0.4%
3,900 Arbitron, Inc. 102,570
20,150 Kforce, Inc.(a) 99,541
12 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
34,100 Modis Professional Services, Inc. $ 217,217
7,600 Resources Connection, Inc.(a) 193,040
----------------
612,368
-------------------------------------------------------------------------------------
Computers 2.7%
40,200 Dell Computer Corp.(a) 1,082,586
12,400 EMC Corp.(a) 244,528
59,000 Fujitsu, Ltd. (Japan) 550,827
4,200 Hewlett-Packard Co. 103,572
16,700 International Business Machines Corp. 1,757,007
29,050 Iomega Corp. 46,190
69,360 Maxtor Corp.(a) 457,776
8,200 MTS Systems Corp. 114,800
25,650 Silicon Graphics, Inc.(a) 16,160
11,950 Storage Technology Corp.(a) 164,551
----------------
4,537,997
-------------------------------------------------------------------------------------
Computer Services 1.8%
22,800 Advanced Digital Information Corp.(a) 258,780
13,800 ASM Lithography Holding NV, (Netherlands)(a) 282,486
3,300 CACI International, Inc. (Class A)(a) 115,500
8,700 Carreker Corp.(a) 164,865
5,700 Catapult Communications Corp.(a) 98,268
34,200 Cisco Systems, Inc.(a) 657,324
13,500 Inforte Corp.(a) 151,200
20,000 Jack Henry & Associates, Inc. 565,400
8,400 MatrixOne, Inc.(a) 133,140
8,600 Sapient Corp.(a) 53,750
30,300 Sun Microsystems, Inc.(a) 493,587
6,500 Tier Technologies, Inc. (Class B)(a) 75,400
----------------
3,049,700
-------------------------------------------------------------------------------------
Computer Software & Services 2.1%
11,400 Actuate Corp.(a) 116,508
21,400 BindView Development Corp.(a) 29,318
21,800 BMC Software, Inc.(a) 436,000
28,500 Brio Technology, Inc.(a) 118,845
See Notes to Financial Statements 13
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
3,550 JDA Software Group, Inc.(a) $ 74,195
17,100 Keane, Inc.(a) 316,350
23,700 Microsoft Corp.(a) 1,568,703
4,750 NetIQ Corp.(a) 156,702
8,950 Novell, Inc.(a) 44,661
18,700 Oracle Corp.(a) 338,096
8,600 Precise Software Solutions, Ltd.(a) 186,104
7,100 Verity, Inc.(a) 124,676
----------------
3,510,158
-------------------------------------------------------------------------------------
Consumer Products 2.1%
12,733 R.J. Reynolds Tobacco Holdings, Inc. 683,889
14,200 American Greetings Corp. 156,910
10,500 Eastman Kodak Co. 454,755
26,700 Electrolux AB, Ser. B (Sweden) 401,646
2 Japan Tobacco, Inc. (Japan) 14,505
2,300 K-Swiss, Inc. (Class A Stock) 74,750
20,000 Kao Corp. (Japan) 468,005
21,500 Philip Morris Co., Inc. 978,250
19,350 RPM, Inc. 179,568
6,050 Tupperware Corp. 142,054
----------------
3,554,332
-------------------------------------------------------------------------------------
Consumer Services 1.1%
17,100 Cheap Tickets, Inc.(a) 199,044
4,500 Ebay, Inc.(a) 281,565
5,750 Navigant International, Inc.(a) 99,187
34,700 Service Corp. International(a) 274,130
3,150 Tetra Tech, Inc.(a) 71,505
3,500 Travelocity.com, Inc.(a) 80,675
6,200 Trico Marine Services, Inc.(a) 60,946
8,100 United Rentals, Inc.(a) 189,459
17,200 Waste Management, Inc. 533,200
----------------
1,789,711
-------------------------------------------------------------------------------------
Data Processing/Management 0.3%
15,700 ProBusiness Services, Inc.(a) 432,849
14 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Diversified Manufacturing 3.1%
5,750 ESCO Technologies, Inc. $ 161,575
3,700 Federal Signal Corp. 78,070
31,100 General Electric Co. 1,352,850
11,700 Gerber Scientific, Inc. 126,594
3,000 Harsco Corp. 91,680
33,000 Hutchison Whampoa, Ltd. (Hong Kong) 318,378
275,500 Invensys PLC (United Kingdom) 333,957
4,000 Minnesota Mining & Manufacturing Co. 447,520
3,900 National Service Industries, Inc. 88,218
8,600 Roper Industries, Inc. 325,510
13,400 Thyssen Krupp AG (Germany)(a) 185,520
22,300 Tyco International, Ltd. 1,186,360
7,000 Veba AG (Germany) 384,038
----------------
5,080,270
-------------------------------------------------------------------------------------
Electronics 1.3%
2,800 Fisher Scientific International, Inc. 75,460
2,500 Intermagnetics General Corp.(a) 78,125
29,547 Koninklijke (Royal) Philips Electronics NV
(Netherlands) 826,684
5,400 Mentor Graphics Corp.(a) 100,710
42,300 National Grid Group PLC (United Kingdon) 286,539
4,200 Polycom, Inc.(a) 106,890
10,800 Sony Corp. (Japan) 532,275
3,350 Tweeter Home Entertainment Group, Inc.(a) 95,576
----------------
2,102,259
-------------------------------------------------------------------------------------
Electronic Components 2.7%
2,315 ABB Ltd. (Switzerland) 25,695
3,400 Belden, Inc. 83,130
7,100 Cable Design Technologies Corp.(a) 106,855
4,300 Caliper Technologies Corp.(a) 70,735
9,400 CTS Corp. 207,270
17,100 DDI Corp.(a) 332,424
3,300 Electronic Scientific Industries, Inc.(a) 106,095
5,750 Electronics for Imaging, Inc.(a) 126,730
See Notes to Financial Statements 15
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
17,100 Gentex Corp.(a) $ 560,709
68,000 Hitachi, Ltd. (Japan) 572,729
4,450 Idacorp, Inc. 164,650
5,550 Keithley Instruments, Inc. 111,278
1,800 Kyocera Corp. (Japan) 135,016
14,550 Methode Eletronics, Inc. (Class A) 130,514
4,900 Novellus Systems, Inc.(a) 249,753
6,700 STMicroelectronics NV (France) 213,328
2,750 Technitrol, Inc. 68,255
37,800 Texas Instruments, Inc. 1,304,100
----------------
4,569,266
-------------------------------------------------------------------------------------
Exchange Traded Fund 0.2%
6,800 Nasdaq-100 Shares 283,968
-------------------------------------------------------------------------------------
Financial Services 8.3%
11,200 A.G. Edwards, Inc. 490,000
2,400 Acom Co., Ltd. (Japan)(a) 195,793
5,300 Allied Capital Corp. 123,225
15,200 American Express Co. 613,016
8,600 Americredit Corp.(a) 528,814
2,150 Chittenden Corp. 71,918
32,500 Citigroup, Inc. 1,631,825
5,050 Doral Financial Corp. 187,153
4,500 Downey Financial Corp. 263,565
4,900 Eaton Vance Corp. 167,286
9,400 Federal Home Loan Mortgage Corp. 643,336
10,400 Fortis NL NV (Netherlands) 271,397
5,000 Goldman Sachs Group, Inc. 415,800
16,000 Hartford Financial Group, Inc. 1,059,360
14,400 Household International Corp. 954,576
7,550 Indymac Bancorp, Inc.(a) 196,224
12,700 ING Groep NV (Netherlands) 414,160
15,800 Instinet Group, Inc. 219,620
49,800 Investor AB (Sweden) 619,975
4,700 Jefferies Group, Inc. 166,662
2,500 J.P. Morgan Chase & Co. 108,250
8,500 Lehman Brothers Holdings, Inc. 612,000
2,300 MBNA Corp. 81,420
16 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
11,800 Merrill Lynch & Co., Inc. $ 640,032
8,800 Morgan Stanley Dean Witter & Co. 526,416
86,000 Nikko Securities Co., Ltd. (Japan) 540,321
3,700 Orix Corp. (Japan) 312,818
8,300 PNC Bank Corp. 550,705
4,050 Provident Financial Group, Inc. 133,691
7,700 Sky Financial Group, Inc. 150,612
13,200 Stilwell Financial, Inc. 391,512
2,850 Triad Guaranty, Inc. 108,015
3,250 Webster Financial Corp. 116,155
960 Zurich Financial Services AG (Switzerland) 318,832
----------------
13,824,484
-------------------------------------------------------------------------------------
Food & Beverage 2.3%
62,900 Cadbury Schweppes PLC (United Kingdom) 428,774
6,800 Corn Products International, Inc. 201,960
3,250 Dean Foods Co. 136,175
11,500 Del Monte Foods Co. 103,385
62,100 Diageo PLC (United Kingdom)(a) 638,524
12,100 Dole Food Co., Inc. 272,734
12,500 Heineken NV (Netherlands) 493,785
21,200 PepsiCo, Inc. 988,556
23,000 Sara Lee Corp. 463,910
1,900 Suiza Foods Corp.(a) 104,671
----------------
3,832,474
-------------------------------------------------------------------------------------
Gas Distribution 0.4%
4,900 AGL Resources, Inc. 117,600
3,350 CH Energy Group, Inc. 141,203
5,950 Energen Corp. 151,725
3,600 New Jersey Resources Corp. 156,420
9,300 Oneok, Inc. 169,260
----------------
736,208
-------------------------------------------------------------------------------------
Health Care 1.0%
14,900 HCA-The Healthcare Corp. 684,655
See Notes to Financial Statements 17
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
8,500 Health Net, Inc.(a) $ 155,975
9,300 Humana, Inc.(a) 103,695
3,350 Sunrise Assisted Living, Inc.(a) 102,208
5,300 Wellpoint Health Networks, Inc.(a) 566,888
----------------
1,613,421
-------------------------------------------------------------------------------------
Hotels & Leisure 1.1%
5,700 Argosy Gaming Co. 150,480
24,900 Boyd Gaming Corp. 149,898
6,000 Marriott International, Inc. (Class A) 286,500
39,400 MeriStar Hotels & Resorts, Inc.(a) 69,738
9,400 Prime Hospitality Corp.(a) 112,894
20,300 Starwood Hotels & Resorts Worldwide, Inc. 724,507
11,900 Station Casinos, Inc.(a) 171,241
5,000 WMS Industries, Inc. 115,000
----------------
1,780,258
-------------------------------------------------------------------------------------
Insurance 5.1%
5,600 Alfa Corp. 135,016
24,135 Alleanza Assicurazioni SpA (Italy) 268,626
2,841 Allianz AG (Germany) 798,579
15,300 Allstate Corp. 534,888
12,450 American International Group, Inc. 1,036,462
4,550 Arthur J. Gallagher & Co. 125,125
20,780 AXA (France) 608,691
7,300 Chubb Corp. 512,241
4,800 CIGNA Corp. 481,488
7,650 CNA Surety Corp. 110,007
4,700 Commerce Group, Inc.(a) 173,148
4,390 Fidelity National Financial, Inc. 112,560
7,300 First American Financial Corp. 129,575
5,000 LandAmerica Financial Group, Inc. 160,000
4,550 Leucadia National Corp. 148,603
7,000 Lincoln National Corp. 357,210
8,400 Loews Corp. 476,784
6,400 Milacron, Inc. 117,120
18 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
17,900 Old Republic International Corp. $ 474,350
5,400 Presidential Life Corp. 103,842
11,700 Reinsurance Group of America, Inc. 457,236
4,950 StanCorp Financial Group, Inc. 218,295
11,400 XL Capital, Ltd. 874,950
----------------
8,414,796
-------------------------------------------------------------------------------------
Internet 0.3%
15,700 Avocent Corp.(a) 406,630
2,800 DigitalThink, Inc.(a) 40,600
2,150 Sonicwall, Inc.(a) 45,688
----------------
492,918
-------------------------------------------------------------------------------------
Machinery 0.4%
11,450 AGCO Corp. 118,049
5,500 Applied Industrial Technologies, Inc. 94,325
7,100 JLG Industries, Inc. 80,230
6,600 Lincoln Electric Holdings, Inc. 157,872
3,950 Manitowoc Co., Inc. 109,771
3,600 Sauer-Danfos, Inc. 32,760
5,400 Snap-On, Inc. 145,800
----------------
738,807
-------------------------------------------------------------------------------------
Manufacturing 1.1%
1,710 Compagnie de Saint Gobain (France) 252,320
8,200 CoorsTek, Inc.(a) 255,020
9,500 Jakks Pacific, Inc. 190,285
6,500 Merix Corp. 158,405
12,100 Mettler-Toledo International, Inc.(a) 515,460
16,400 Varian Medical Systems, Inc. 471,992
----------------
1,843,482
-------------------------------------------------------------------------------------
Media 2.6%
8,600 Acme Communications, Inc.(a) 68,800
17,300 AOL Time Warner, Inc.(a) 786,285
6,250 Banta Corp. 173,812
21 Clear Channel Communications, Inc.(a) 1,231
See Notes to Financial Statements 19
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
5,900 Consolidated Graphics, Inc.(a) $ 129,800
28,500 Entravision Communications Corp.(a) 357,105
10,750 Lagardere SCA (France) 567,180
2,000 Liberty Corp. 79,700
1,100 Media General, Inc. 52,789
19,600 Metro Goldwyn Mayer, Inc. 392,000
13,000 Univision Communications, Inc.(a) 496,340
23,824 Viacom, Inc.(a) 1,186,435
----------------
4,291,477
-------------------------------------------------------------------------------------
Medical Products & Services 3.5%
16,800 Amgen, Inc.(a) 1,053,528
2,800 Aspect Medical Systems, Inc. 33,348
7,900 Baxter International, Inc. 393,420
7,500 Coventry Health Care, Inc.(a) 172,575
4,000 Digene Corp.(a) 138,520
13,200 Genetech, Inc.(a) 558,360
11,374 GlaxoSmithKline PLC (United Kingdom)(a) 328,789
25,400 Health Management Associates, Inc. 501,904
9,400 Johnson & Johnson 508,540
5,550 Mid-Atlantic Medical Services, Inc. 116,550
5,000 North American Scientific, Inc.(a) 76,750
4,300 ORATEC Interventions, Inc. 36,464
12,700 Ortec International, Inc. 90,170
15,000 Packard BioScience Co. 144,450
15,801 Pharmacia Corp. 705,040
7,000 Sepracor, Inc. 308,420
7,600 STERIS Corp.(a) 163,476
2,900 Triad Hospitals, Inc.(a) 98,368
2,300 Varian Medical Systems, Inc. 164,450
5,700 Ventana Medical Systems, Inc.(a) 190,950
4,000 VISX, Inc. 63,600
----------------
5,847,672
-------------------------------------------------------------------------------------
Mining 0.5%
22,400 Freeport-McMoRan Copper & Gold, Inc. (Class
A)(a) 218,624
20 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
7,600 Freeport-McMoRan Copper & Gold, Inc. (Class
B)(a) $ 81,776
2,900 Massey Energy Corp. 49,822
10,100 Newmont Mining Corp. 188,870
10,700 Stillwater Mining Co.(a) 276,060
----------------
815,152
-------------------------------------------------------------------------------------
Networking 0.4%
3,250 Anixter International, Inc.(a) 93,763
1,650 Black Box Corp.(a) 90,519
21,600 Ixia(a) 302,616
33,100 Lucent Technologies, Inc. 221,770
----------------
708,668
-------------------------------------------------------------------------------------
Office Equipment & Supplies 0.9%
11,000 Canon, Inc. (Japan) 372,000
11,050 Daisytek International Corp.(a) 169,175
16,100 Harris Corp. 483,322
2,200 United Stationers, Inc. 72,578
3,450 Wallace Computer Services, Inc. 58,788
35,700 Xerox Corp. 284,886
----------------
1,440,749
-------------------------------------------------------------------------------------
Oil & Gas 5.3%
5,000 Amerada Hess Corp. 386,400
2,800 Cal Dive International, Inc. 52,360
11,500 Conoco, Inc. (Class A) 354,660
20,500 Diamond Offshore Drilling, Inc. 601,470
57,200 ENI 695,750
38,900 ENSCO International, Inc. 804,841
13,100 FMC Technologies, Inc. 236,717
27,850 Grey Wolf, Inc. 86,892
22,700 Halliburton Co. 794,727
6,300 Key Energy Services, Inc. 58,590
11,900 Nabors Industries, Inc. 348,670
14,600 Santa Fe International Corp. 436,540
16,900 Schlumberger, Ltd. (France) 908,375
3,892 Stone Energy Corp.(a) 177,281
See Notes to Financial Statements 21
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
7,100 Superior Energy Services, Inc.(a) $ 60,350
17,900 Talisman Energy, Inc. (Canada)(a) 703,649
7,733 TotalFinaElf SA, ADR 548,115
5,440 TotalFinaElf SA (France) 774,595
4,550 Universal Compression Holdings, Inc.(a) 127,627
6,800 WGL Holdings, Inc. 189,244
13,100 Williams Companies, Inc. 438,850
----------------
8,785,703
-------------------------------------------------------------------------------------
Oil & Gas Exploration & Production 0.8%
105,900 BP Amoco PLC (United Kingdom) 881,225
8,600 Chesapeake Energy Corp. 55,556
8,800 Comstock Resources, Inc.(a) 64,416
5,750 Seitel, Inc.(a) 77,625
4,200 Spinnaker Exploration Co. 169,260
7,000 Vintage Petroleum, Inc. 129,850
----------------
1,377,932
-------------------------------------------------------------------------------------
Paper & Packaging 2.0%
11,600 Boise Cascade Corp. 419,920
5,750 Buckeye Technologies, Inc.(a) 77,913
13,950 Caraustar Industries, Inc. 138,803
13,448 Georgia-Pacific Group 492,197
12,100 International Paper Co. 494,406
11,100 Louisiana-Pacific Corp. 117,882
33,650 Pactiv Corp.(a) 522,584
4,500 Pope & Talbot, Inc. 62,100
9,200 Temple-Inland, Inc. 570,860
6,600 Universal Forest Products, Inc. 129,426
11,200 UPM-Kymmene Oy (Finland) 333,466
----------------
3,359,557
-------------------------------------------------------------------------------------
Pharmaceuticals 3.2%
13,800 Abbott Laboratories 739,542
22 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
13,250 Alpharma, Inc. (Class A) $ 373,782
19,800 American Home Products Corp. 1,194,138
5,551 Aventis SA (France) 427,040
6,900 Elan Corp. PLC, ADR(a) 398,475
1,100 Eli Lilly & Co. 87,208
7,450 Perrigo Co. 123,447
20,600 Pfizer, Inc. 849,132
3,200 Pharmaceutical Product Development, Inc.(a) 113,312
5,450 Roche Holdings AG (Switzerland) 415,391
20,000 Yamanouchi Pharmaceutical Co., Ltd. 554,554
----------------
5,276,021
-------------------------------------------------------------------------------------
Printing & Publishing 0.1%
7,200 Pearson PLC, ADR(a) 110,880
-------------------------------------------------------------------------------------
Publishing 1.1%
5,400 Hollinger, Inc. 78,408
13,300 Knight-Ridder, Inc. 819,147
14,600 New York Times Co. (Class A) 675,980
12,300 Wolters Kluwer NV (Netherlands)(a) 326,257
----------------
1,899,792
-------------------------------------------------------------------------------------
Real Estate 0.3%
25,500 Security Capital Group, Inc. (Class B) 525,300
-------------------------------------------------------------------------------------
Real Estate Investment Trust 2.2%
6,250 Amli Residential Properties Trust 146,562
6,450 Arden Realty, Inc. 163,830
7,550 Boykin Lodging Co. 91,355
4,250 BRE Properties, Inc. 129,030
5,750 Cabot Industrial Trust 120,750
3,200 Camden Property Trust 119,840
5,700 Capital Automotive REIT 96,843
700 CBL & Associates Properties, Inc. 21,588
6,250 CBRL Group, Inc. 121,187
16,800 Equity Office Properties Trust 504,336
6,900 Felcor Lodging Trust, Inc. 150,006
4,350 First Industrial Realty Trust, Inc. 136,590
See Notes to Financial Statements 23
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
7,500 Glenborough Realty Trust, Inc. $ 141,750
6,600 Highwoods Properties, Inc. 168,630
2,400 Home Properties of New York, Inc. 72,360
4,600 Hospitality Properties Trust 129,030
18,200 HRPT Properties Trust 157,066
5,750 Innkeepers USA Trust 67,218
10,700 JDN Realty Corp. 127,544
3,400 Kilroy Realty Corp. 91,120
7,350 New Plan Excel Realty Trust, Inc. 117,968
2,500 Realty Income Corp. 71,675
15,700 Reckson Associates Realty Corp. 347,755
5,950 Regency Centers Corp. 153,034
3,650 Summit Properties, Inc. 95,265
3,750 Weingarten Realty Investors 167,625
----------------
3,709,957
-------------------------------------------------------------------------------------
Restaurants 0.8%
5,700 CEC Entertainment, Inc. 203,433
20,600 Darden Restaurants, Inc. 615,940
6,900 Landry's Seafood Restaurants, Inc. 130,410
8,100 McDonald's Corp. 236,034
6,600 Ruby Tuesday, Inc. 122,760
----------------
1,308,577
-------------------------------------------------------------------------------------
Retail 5.6%
2,900 BJ's Wholesale Club, Inc.(a) 162,400
10,950 Borders Group, Inc.(a) 252,616
2,650 Christopher & Banks Corp. 71,020
12,000 Cost Plus, Inc. 338,760
7,650 Dillard's, Inc. (Class A) 113,526
16,500 Federated Department Stores, Inc.(a) 636,900
925 Fred's, Inc. (Class A) 23,449
6,400 Friedman's, Inc. (Class A) 47,680
15,600 Gillette Co. 434,772
38,820 Great Universal Stores PLC (United Kingdom) 345,454
30,200 Home Depot, Inc. 1,521,174
16,450 IKON Office Solutions, Inc. 127,981
24 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
5,500 Kenneth Cole Productions, Inc. (Class A) $ 108,625
17,400 Kohl's Corp.(a) 996,672
1,900 Libbey, Inc. 65,265
8,600 Linens 'n Things, Inc. 221,020
2,800 Payless Shoesource, Inc.(a) 160,356
8,200 Phillips-Van Heusen Corp. 112,340
8,150 Pier 1 Imports, Inc. 95,763
15,450 ShopKo Stores, Inc. 133,642
12,600 Sonic Automatic, Inc.(a) 245,700
15,600 Target Corp. 603,720
131,500 Tesco PLC (United Kingdom)(a) 470,706
25,900 The Limited, Inc. 439,523
17,200 Tiffany & Co. 607,160
15,600 Value City Department Stores, Inc. 97,344
12,750 Venator Group, Inc. 210,375
12,200 Wal-Mart Stores, Inc. 681,980
----------------
9,325,923
-------------------------------------------------------------------------------------
Semiconductors 3.3%
5,700 Alpha Industries, Inc.(a) 217,284
8,700 Applied Materials, Inc.(a) 398,982
10,000 Credence Systems Corp.(a) 207,000
21,800 Integrated Circuit Systems, Inc.(a) 420,740
18,300 Intel Corp. 545,523
20,700 Intersil Holding Corp.(a) 718,290
4,400 KLA Instruments Corp.(a) 239,316
8,900 Micron Technology, Inc. 373,800
3,000 Nanometrics, Inc.(a) 99,000
15,400 National Semiconductor Corp.(a) 493,570
8,600 Power Integrations, Inc.(a) 186,190
11,400 Rudolph Technologies, Inc.(a) 473,100
15,700 Semtech Corp.(a) 581,685
16,400 Varian Semiconductor Equipment Associates,
Inc.(a) 576,624
----------------
5,531,104
See Notes to Financial Statements 25
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Steel & Metals 1.2%
11,300 Alcoa, Inc. $ 443,299
4,400 Carpenter Technology Corp. 120,736
3,250 Century Aluminum Co. 56,713
3,750 Cleveland-Cliffs, Inc. 62,812
4,300 Ladish Co., Inc.(a) 68,800
7,300 NS Group, Inc. 69,350
7,100 Phelps Dodge Corp. 286,840
3,000 Precision Castparts Corp. 109,500
5,500 Quanex Corp. 150,425
8,600 Reliance Steel & Aluminum Co. 214,140
6,550 Timken Co. 109,188
8,400 Wolverine Tube, Inc.(a) 130,368
9,650 Worthington Industries, Inc. 135,679
----------------
1,957,850
-------------------------------------------------------------------------------------
Telecommunications 6.7%
28,500 Advanced Fibre Communications, Inc.(a) 719,625
9,500 Alcatel (France) 169,295
6,800 ALLTEL Corp. 419,220
3,600 Andrew Corp.(a) 79,344
19,900 AT&T Corp. 402,179
19,503 AT&T Wireless Svcs., Inc.(a) 364,511
94,130 British Telecommunications PLC (United Kingdom) 655,085
11,400 Leap Wireless International, Inc.(a) 279,756
73,700 Liberty Media Group (Class A) 1,159,301
27,100 Nokia Corp., ADR(a) 591,051
30 NTT Mobile Communication (Japan) 415,915
62,734 Portugal Telecom SA (Portugal) 449,927
13,900 Powerwave Technologies, Inc.(a) 238,523
28,400 Qwest Communications International, Inc.(a) 738,400
2,800 SBA Communcations Corp.(a) 55,188
12,000 SBC Communications, Inc. 540,360
5,700 Sierra Wireless, Inc.(a) 69,255
37,000 Sprint Corp. 886,542
12,800 Stanford Microdevices, Inc.(a) 102,400
26 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
33,672 Telefonica SA (Spain) $ 410,453
12,100 Verizon Communications, Inc. 655,215
212,900 Vodafone Airtouch PLC (United Kingdom)(a) 466,052
20,375 Vodafone Group PLC, ADR(a) 439,081
21,400 Western Multiplex Corp. (Class A)(a) 102,720
5,000 Western Wireless Corp.(a) 194,550
33,000 Worldcom, Inc.(a) 462,000
----------------
11,065,948
-------------------------------------------------------------------------------------
Trucking & Shipping 1.5%
8,600 Alexander & Baldwin, Inc. 218,440
3,550 Arkansas Best Corp.(a) 97,980
11,500 Canadian Pacific Ltd. 435,850
4,700 CNF Transporation, Inc. 152,562
52 East Japan Railway 278,784
10,850 Forward Air Corp. 300,002
49,600 OMI Corp. 237,584
4,300 Roadway Express, Inc. 124,915
7,400 Teekay Shipping Corp. 254,560
5,900 Union Pacific Corp. 316,771
6,550 Yellow Corp.(a) 142,528
----------------
2,559,976
-------------------------------------------------------------------------------------
Utilities 2.9%
5,700 ALLETE, Inc. 135,033
15,680 Alstom 437,331
14,300 Beacon Power Corp.(a) 66,495
3,750 California Water Service Group 89,813
9,800 Cleco Corp. 222,950
6,550 El Paso Electric Co. 94,910
36,400 Endesa SA (Spain) 594,477
6,375 Exelon Corp. 360,187
6,500 Kansas City Power & Light Co. 157,950
3,900 MDU Resources Group, Inc. 118,443
2,800 NewPower Holdings, Inc. 19,600
19,800 NiSource, Inc. 521,928
See Notes to Financial Statements 27
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
3,650 OGE Energy Corp. $ 78,840
4,400 Park Electrochemical Corp. 108,460
3,550 Peoples Energy Corp. 135,113
30,800 PG&E Corp. 457,996
20,000 Power-One, Ltd.(a) 310,000
4,800 Public Service Company of New Mexico(a) 142,128
19,350 Suez Lyonnaise des Eaux (France) 653,561
5,250 Western Resources, Inc. 97,597
----------------
4,802,812
----------------
Total long-term investments (cost $158,192,254) 157,036,211
----------------
SHORT-TERM INVESTMENTS 5.8%
Principal
Amount
(000)
-------------------------------------------------------------------------------------
Repurchase Agreement
$ 9,722 Joint Repurchase Agreement Account,
3.87%, 8/1/01 (cost $9,722,000; Note 5) 9,722,000
----------------
Total Investments 100.2%
(cost $167,914,254; Note 4) 166,758,211
Liabilities in excess of other
assets (0.2%) (370,180)
----------------
Net Assets 100% $ 166,388,031
----------------
----------------
28 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
(a) Non-income producing security.
AB--Aktiebolag (Swedish Company).
ADR--American Depository Receipt.
AG--Aktiengesellschaft (German Company).
NV--Naamloze Vennootschap (Dutch Corporation).
Oy--Osakehio (Finnish Company).
PLC--Public Liability Company (British Company).
REIT--Real Estate Investment Trust.
SA--Sociedad Anonima (Spanish Corporation) or SA-- Societe Anonyme (French
Corporation).
SCA--Societe Capital Anonyme (French Corporation).
SpA--Societa per Azione (Italian Corporation).
See Notes to Financial Statements 29
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Statement of Assets and Liabilities
July 31, 2001
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $167,914,254) $166,758,211
Foreign currency, at value (cost $134,018) 133,235
Receivable for investments sold 2,054,458
Receivable for Fund shares sold 387,889
Dividends and interest receivable 102,838
Tax reclaim receivable 29,788
----------------
Total assets 169,466,419
----------------
LIABILITIES
Payable to custodian 102,367
Payable for investments purchased 2,133,055
Payable for Fund shares reacquired 461,163
Accrued expenses 159,632
Distribution fee payable 112,531
Management fee payable 105,629
Foreign withholding tax payable 4,011
----------------
Total liabilities 3,078,388
----------------
NET ASSETS $166,388,031
----------------
----------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 15,715
Paid-in capital in excess of par 169,264,410
----------------
169,280,125
Distributions in excess of net investment income (85,442)
Undistributed net realized loss on investments (1,650,329)
Net unrealized depreciation on investments and foreign
currency transactions (1,156,323)
----------------
Net assets, July 31, 2001 $166,388,031
----------------
----------------
30 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Statement of Assets and Liabilities Cont'd.
July 31, 2001
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($39,527,818 / 3,692,578 shares of beneficial interest
issued and outstanding) $10.70
Maximum sales charge (5% of offering price) 0.56
----------------
Maximum offering price to public $11.26
----------------
----------------
Class B:
Net asset value, offering price and redemption price per
share ($86,940,550 / 8,244,107 shares of beneficial
interest issued and outstanding) $10.55
----------------
----------------
Class C:
Net asset value and redemption price per share
($36,507,113 / 3,461,823 shares of beneficial interest
issued and outstanding) $10.55
Sales charge (1% of offering price) 0.11
----------------
Offering price to public $10.66
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per
share ($3,412,550 / 316,992 shares of beneficial
interest issued and outstanding) $10.77
----------------
----------------
See Notes to Financial Statements 31
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Statement of Operations
Year
Ended
July 31, 2001
----------------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Dividends (net of foreign withholding taxes of $79,489) $ 1,977,479
Interest 708,439
----------------
Total income 2,685,918
----------------
Expenses
Management fee 1,213,003
Distribution fee--Class A 97,820
Distribution fee--Class B 849,490
Distribution fee--Class C 353,869
Custodian's fees and expenses 385,000
Transfer agent's fees and expenses 302,000
Reports to shareholders 203,000
Registration fees 64,000
Audit fee 25,000
Legal fees 25,000
Trustees' fees 20,000
Miscellaneous 6,013
----------------
Total expenses 3,544,195
----------------
Net investment loss (858,277)
----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,292,627
Foreign currency transactions (79,745)
----------------
1,212,882
----------------
Net change in unrealized appreciation (depreciation) of:
Investments (18,672,362)
Foreign currency 4,287
----------------
(18,668,075)
----------------
Net loss on investments and foreign currencies (17,455,193)
----------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (18,313,470)
----------------
----------------
32 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Statement of Changes in Net Assets
Year Ended July 31,
------------------------------------
2001 2000
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (858,277) $ (593,753)
Net realized gain on investments and
foreign currency transactions 1,212,882 17,935,568
Net change in unrealized appreciation
(depreciation) of investments and
foreign currencies (18,668,075) 5,900,003
---------------- ----------------
Net increase (decrease) in net assets
resulting from operations (18,313,470) 23,241,818
---------------- ----------------
Dividends and distributions (Note 1)
Distributions in excess of net investment
income
Class A -- (798,740)
Class B -- (1,548,906)
Class C -- (694,850)
Class Z -- (1,329,649)
---------------- ----------------
-- (4,372,145)
---------------- ----------------
Distributions from net realized gains
Class A (2,991,298) (510,822)
Class B (6,683,757) (1,183,192)
Class C (2,720,970) (530,788)
Class Z (122,496) (794,899)
---------------- ----------------
(12,518,521) (3,019,701)
---------------- ----------------
Fund share transactions (net of share
conversions) (Note 6)
Net proceeds from shares sold 62,710,336 75,419,062
Net asset value of shares issued in
reinvestment of dividends and
distributions 12,225,780 7,276,356
Cost of shares reacquired (26,141,501) (68,742,787)
---------------- ----------------
Net increase in net assets from Fund share
transactions 48,794,615 13,952,631
---------------- ----------------
Total increase 17,962,624 29,802,603
NET ASSETS
Beginning of year 148,425,407 118,622,804
---------------- ----------------
End of year $166,388,031 $148,425,407
---------------- ----------------
---------------- ----------------
See Notes to Financial Statements 33
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements
Strategic Partners Allocation Funds (the 'Trust'), formerly Prudential
Diversified Funds, are registered under the Investment Company Act of 1940 as an
open-end, diversified management investment company presently consisting of
three Portfolios: Strategic Partners High Growth Fund ('the Fund'), Strategic
Partners Conservative Growth Fund and Strategic Partners Moderate Growth Fund.
These financial statements relate only to Strategic Partners High Growth Fund.
The financial statements of the other Portfolios are not presented herein. The
Trust was organized as a business trust in Delaware on July 29, 1998. The Fund's
Advisers consist of Jennison Associates LLC ('Jennison'), Prudential Investment
Management, Inc. ('PIM'), formerly known as Prudential Investment Corporation,
Lazard Asset Management, Franklin Advisers, Inc. and the Dreyfus Corporation.
The investment objective of the Fund is to provide long-term capital
appreciation. The Fund seeks to achieve its investment objective by investing in
a diversified portfolio of equity securities issued by U.S. and foreign
companies. Under normal circumstances, substantially all of the Fund's assets
will be invested in equity securities, including common stock, securities
convertible into common stock and preferred stock.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements.
Securities Valuation: Securities for which the primary market is on an
exchange and NASDAQ National Market Securities are valued at the last sales
price on such exchange on the day of valuation, or, if there was no sale on such
day, at the mean between the last bid and asked prices on such day or at the bid
price on such day in the absence of an asked price. Securities that are actively
traded in the over-the-counter market, including listed securities for which the
primary market is believed by the Prudential Investment Fund Management LLC
('PIFM' or the 'Manager'), in consultation with the Adviser, to be
over-the-counter, are valued by an independent pricing agent or principal market
maker. Privately placed securities including equity securities for which market
prices may be obtained from primary dealers shall be valued at the bid prices
provided by such primary dealers. Securities for which market quotations are not
readily available, may be valued using the last available market quotation for a
period not to exceed five days, provided the Manager and Adviser feel this is
representative of market value; after that period, such securities are valued in
good faith under procedures adopted by the Trustees.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.
All securities are valued as of 4:15 p.m., New York time.
34
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and liabilities -
at the closing daily rates of exchange.
(ii) purchases and sales of investment securities, income and expenses -
at the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the period. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the fiscal period. Accordingly, realized foreign currency gains
(losses) are included in the reported net realized gains (losses) on investment
transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from the holdings of foreign currencies,
currency gains (losses) realized between the trade and settlement dates on
security transactions, and the difference between the amounts of dividends,
interest and foreign taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Repurchase Agreements: In connection with transactions in repurchase
agreements with U.S. financial institutions, it is the Fund's policy that its
custodian or designated subcustodians, as the case may be under triparty
repurchase agreements, take possession of the underlying securities, the value
of which exceeds the principal amount of the repurchase transaction, including
accrued interest. If the seller defaults and the value of the collateral
declines or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of the collateral by the Fund may be delayed or
limited.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains (losses) on sales of
investment and currency transactions are calculated on the identified cost
basis. Dividend income is
35
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
recorded on the ex-dividend date and interest income is recorded on the accrual
basis. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.
Net investment income (loss) (other than distribution fees) and unrealized
and realized gains (losses) are allocated daily to each class of shares based
upon the relative proportion of net assets of each class at the beginning of the
day.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income and distributions of net realized capital and currency gains,
if any, annually. Dividends and distributions are recorded on the ex-dividend
date.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
Taxes: For federal income tax purposes, each Fund in the Trust is
treated as a separate taxpaying entity. It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income and capital gains, if
any, to shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gains, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to decrease distributions in excess of net investment income
by $1,014,056, decrease accumulated net realized gain on investments by
$1,977,522 and increase paid-in capital in excess of par by $963,466 for the
year ended July 31, 2001, for redemptions utilized as distributions for federal
income tax purposes and realized and recognized currency gains during the period
and due to a net operating loss. Net investment income, net realized gains and
net assets were not affected by this change.
Note 2. Agreements
The Fund has a management agreement with PIFM. Pursuant to this agreement, PIFM
manages the investment operations of the Fund, administers the Fund's affairs
and supervises the Advisers' performance of all investment advisory services.
PIFM pays for the costs pursuant to the advisory agreements, the cost of
compensation of officers of the Fund, occupancy and certain clerical and
accounting costs of the Fund. The Fund bears all other costs and expenses. The
management fee paid to PIFM is
36
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
computed daily and payable monthly at an annual rate of .75% of the average
daily net assets of the Fund. PIFM, in turn, pays the Advisers' fees, based on
the average daily net assets of the Fund segments they manage.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution (the 'Class A, B and C Plans') regardless of
expenses actually incurred by PIMS. The distribution fees are accrued daily and
payable monthly. No distribution or service fees are paid to PIMS as distributor
for Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, B and C shares respectively, for the year ended July 31,
2001.
PIMS has advised the Fund that it has received approximately $190,100 and
$132,900 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended July 31, 2001.
PIMS has advised the Fund that for the year ended July 31, 2001, it has
received approximately $188,000 and $20,500 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
Jennison, PIMS, PIM and PIFM are indirect, wholly owned subsidiaries of
The Prudential Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $500 million.
Interest on any such borrowings will be at market rates. The Funds pay a
commitment fee of .080 of 1% of the unused portion of the credit facility. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
The expiration date of the SCA is March 7, 2002. Prior to March 9, 2001, the
maximum commitment was $1 billion and the commitment fee was .080 of 1% of the
unused portion of the credit facility. Effective September 14, 2001, the
commitment under the SCA was increased to $930 million through December 31,
2001. Effective January 1, 2002, the commitment will be reduced to $500 million.
All other terms and conditions are unchanged. The purpose of the agreement is to
serve as an alternative source of funding for
37
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
capital share redemptions. The Fund did not borrow any amounts pursuant to the
SCA during the year ended July 31, 2001.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PIFM and an
indirect, wholly owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the year ended July 31, 2001, the Fund incurred fees of
approximately $252,800 for the services of PMFS. As of July 31, 2001
approximately $23,200 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to nonaffiliates.
For the year ended July 31, 2001, Prudential Securities Incorporated, a
wholly owned subsidiary of Prudential, earned approximately $30 in brokerage
commissions from portfolio transactions executed on behalf of the Fund.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments,
for the year ended July 31, 2001, aggregated $168,964,837 and $123,083,386,
respectively.
The United States federal income tax basis of the Fund's investments at
July 31, 2001 was $169,994,614 and accordingly, net unrealized depreciation on
investments for federal income tax purposes was $3,236,403 (gross unrealized
appreciation $14,623,832, gross unrealized depreciation $17,860,235).
For United States Federal income tax purposes, the Fund will elect to
treat net currency losses of approximately $45,000 incurred in the nine month
period ended July 31, 2001 as having been incurred in the next fiscal year.
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of July 31, 2001, the Fund
had a 1.7% undivided interest in the joint account. The undivided interest for
the Fund represents $9,722,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Deutsche Bank Alex. Brown, 3.87%, in the principal amount of $65,821,000,
repurchase price $65,828,075, due 8/1/01. The value of the collateral including
accrued interest was $67,137,420.
38
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
Greenwich Capital Markets, Inc., 3.87%, in the principal amount of
$180,000,000, repurchase price $180,019,350, due 8/1/01. The value of the
collateral including accrued interest was $183,603,519.
Morgan Stanley Co., Inc., 3.87%, in the principal amount of $180,000,000
repurchase price $180,019,350, due 8/1/01. The value of the collateral including
accrued interest was $183,603,260.
State Street Bank & Trust Co., 3.87%, in the principal amount of
$145,661,000, repurchase price $145,676,658, due 8/1/01. The value of the
collateral including accrued interest was $148,578,786.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualified to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
The Fund has authorized an unlimited number of shares of beneficial
interest at $.001 par value per share.
Transactions in shares of beneficial interest were as follows:
Class A Shares Amount
------------------------------------------------------------ ---------- ------------
Year ended July 31, 2001:
Shares sold 1,257,928 $ 14,867,212
Shares issued in reinvestment of dividends and distributions 262,678 2,920,976
Shares reacquired (753,781) (8,636,896)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 766,825 9,151,292
Shares issued upon conversion from Class B 169,673 1,979,162
---------- ------------
Net increase (decrease) in shares outstanding 936,498 $ 11,130,454
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 1,540,352 $ 19,257,931
Shares issued in reinvestment of dividends and distributions 106,417 1,264,231
Shares reacquired (967,716) (12,147,899)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 679,053 8,374,263
Shares issued upon conversion from Class B 233,346 3,014,476
---------- ------------
Net increase (decrease) in shares outstanding 912,399 $ 11,388,739
---------- ------------
---------- ------------
39
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Notes to Financial Statements Cont'd.
Class B Shares Amount
------------------------------------------------------------ ---------- ------------
Year ended July 31, 2001:
Shares sold 2,503,158 $ 28,942,699
Shares issued in reinvestment of dividends and distributions 597,823 6,582,027
Shares reacquired (891,341) (10,095,052)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 2,209,640 25,429,674
Shares reacquired upon conversion into Class A (171,643) (1,979,162)
---------- ------------
Net increase (decrease) in shares outstanding 2,037,997 $ 23,450,512
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 3,291,551 $ 40,858,317
Shares issued in reinvestment of dividends and distributions 226,817 2,687,787
Shares reacquired (655,599) (8,105,781)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 2,862,769 35,440,323
Shares reacquired upon conversion into Class A (234,534) (3,014,476)
---------- ------------
Net increase (decrease) in shares outstanding 2,628,235 $ 32,425,847
---------- ------------
---------- ------------
Class C
------------------------------------------------------------
Year ended July 31, 2001:
Shares sold 1,328,084 $ 15,425,950
Shares issued in reinvestment of dividends and distributions 236,394 2,602,699
Shares reacquired (563,097) (6,282,292)
---------- ------------
Net increase (decrease) in shares outstanding 1,001,381 $ 11,746,357
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 1,132,420 $ 14,053,104
Shares issued in reinvestment of dividends and distributions 101,310 1,200,525
Shares reacquired (508,887) (6,343,433)
---------- ------------
Net increase (decrease) in shares outstanding 724,843 $ 8,910,196
---------- ------------
---------- ------------
Class Z
------------------------------------------------------------
Year ended July 31, 2001:
Shares sold 304,334 $ 3,474,475
Shares issued in reinvestment of dividends and distributions 10,760 120,078
Shares reacquired (99,609) (1,127,261)
---------- ------------
Net increase (decrease) in shares outstanding 215,485 $ 2,467,292
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 96,668 $ 1,249,710
Shares issued in reinvestment of dividends and distributions 178,772 2,123,813
Shares reacquired (3,324,795) (42,145,674)
---------- ------------
Net increase (decrease) in shares outstanding (3,049,355) $(38,772,151)
---------- ------------
---------- ------------
40
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Financial Highlights
Class A
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of
period $ 12.95 $ 11.52 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income --(e) --(e) --(e)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (1.27) 2.14 1.52
------------- ------------- --------
Total from investment
operations (1.27) 2.14 1.52
------------- ------------- --------
Less distributions:
Dividends in excess of net
investment income -- (.43) --
Distributions from net realized
capital gains (.98) (.28) --
------------- ------------- --------
Total dividends and
distributions (.98) (.71) --
------------- ------------- --------
Net asset value, end of period $ 10.70 $ 12.95 $ 11.52
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) (10.09)% 18.99% 15.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $39,528 $35,678 $ 21,248
Average net assets (000) $39,128 $27,528 $ 10,442
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.64% 1.54% 1.73%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.39% 1.29% 1.48%(c)
Net investment income .02% .01% .02%(c)
For Classes A, B, C and Z shares:
Portfolio turnover rate 83% 67% 38%
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
(e) Less than $.005 per share.
See Notes to Financial Statements 41
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Financial Highlights Cont'd.
Class B
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of
period $ 12.86 $ 11.47 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income (loss) (.08) (.09) (.05)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (1.25) 2.12 1.52
------------- ------------- --------
Total from investment
operations (1.33) 2.03 1.47
------------- ------------- --------
Less distributions:
Dividends in excess of net
investment income -- (.36) --
Distributions from net realized
capital gains (.98) (.28) --
------------- ------------- --------
Total dividends and
distributions (.98) (.64) --
------------- ------------- --------
Net asset value, end of period $ 10.55 $ 12.86 $ 11.47
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) (10.66)% 18.13% 14.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $86,941 $79,793 $ 41,049
Average net assets (000) $84,949 $60,994 $ 24,260
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.39% 2.29% 2.48%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.39% 1.29% 1.48%(c)
Net investment income (loss) (.72)% (.71)% (.70)%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
42 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Financial Highlights Cont'd.
Class C
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of
period $ 12.86 $ 11.47 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income (loss) (.08) (.09) (.05)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (1.25) 2.12 1.52
------------- ------------- --------
Total from investment
operations (1.33) 2.03 1.47
------------- ------------- --------
Less distributions:
Dividends in excess of net
investment income -- (.36) --
Distributions from net realized
capital gains (.98) (.28) --
------------- ------------- --------
Total dividends and
distributions (.98) (.64) --
------------- ------------- --------
Net asset value, end of period $ 10.55 $ 12.86 $ 11.47
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) (10.66)% 18.13% 14.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $36,507 $31,636 $ 19,914
Average net assets (000) $35,387 $26,413 $ 15,204
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.39% 2.29% 2.48%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.39% 1.29% 1.48%(c)
Net investment income (loss) (.73)% (.73)% (.75)%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
See Notes to Financial Statements 43
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Financial Highlights Cont'd.
Class Z
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of
period $ 12.98 $ 11.56 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income .03 .02 .02
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (1.26) 2.14 1.54
------------- ------------- --------
Total from investment
operations (1.23) 2.16 1.56
------------- ------------- --------
Less distributions:
Dividends in excess of net
investment income -- (.46) --
Distributions from net realized
capital gains (.98) (.28) --
------------- ------------- --------
Total dividends and
distributions (.98) (.74) --
------------- ------------- --------
Net asset value, end of period $ 10.77 $ 12.98 $ 11.56
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) (9.74)% 19.23% 15.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 3,413 $ 1,318 $ 36,413
Average net assets (000) $ 2,270 $25,793 $ 45,999
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.39% 1.29% 1.48%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.39% 1.29% 1.48%(c)
Net investment income .23% .12% .21%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
44 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Report of Independent Accountants
To the Shareholders and Board of Trustees of
Strategic Partners Asset Allocation Funds--
Strategic Partners Diversified High Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Strategic Partners Asset Allocation
Funds--Strategic Partners Diversified High Growth Fund, formerly Prudential
Diversified Funds--Prudential Diversified High Growth Fund (the 'Fund') at July
31, 2001, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended and the
financial highlights for each of the periods presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
'financial statements') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at July 31, 2001 by correspondence with the custodian
and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
September 21, 2001
45
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Tax Information (Unaudited)
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end (July 31, 2001) as to the federal income tax
status of dividends paid by the Fund during such fiscal period. Accordingly, we
are advising you that during its fiscal period ended July 31, 2001, the Fund
paid distributions of $.155 and $.825 per share which represent short-term
capital gains and long-term capital gains, respectively. The Fund utilized
redemptions as distributions in the amount of $.07 per Class A, Class B, Class C
and Class Z shares of long-term capital gains.
For the purpose of preparing your annual federal income tax return,
however, you should report the amounts as reflected on the appropriate Form
1099-DIV or substitute 1099-DIV.
46
Strategic Partners Asset Allocation Funds
The Strategic Partners Mutual Fund Family
Strategic Partners offers a variety of mutual
funds designed to meet your individual needs.
For information about these funds, contact your
financial professional or call us at (800) 225-1852.
Please read the applicable prospectus carefully
before you invest or send money.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Strategic Partners Moderate Growth Fund
Strategic Partners High Growth Fund
Strategic Partners Style Specific Funds
Strategic Partners
Large Capitalization Growth Fund
Strategic Partners
Large Capitalization Value Fund
Strategic Partners
Small Capitalization Growth Fund
Strategic Partners
Small Capitalization Value Fund
Strategic Partners
International Equity Fund
Strategic Partners
Total Return Bond Fund
Strategic Partners Opportunity Funds
Strategic Partners Focused Growth Fund
Strategic Partners New Era Growth Fund
Strategic Partners Focused Value Fund
Special Money Market Fund, Inc.*
* This fund is not a direct purchase money fund
and is only an exchangeable money fund.
Strategic Partners Asset Allocation Funds
Getting the Most from Your Mutual Fund
How many times have you read these reports--or
other financial materials--and stumbled across a
word that you don't understand?
Many shareholders have run into the same
problem. We'd like to help. So we'll use this
space from time to time to explain some of the
words you might have read, but not understood.
And if you have a favorite word that no one can
explain to your satisfaction, please write to
us.
Basis Point: 1/100th of 1%. For example, one-
half of one percent is 50 basis points.
Collateralized Mortgage Obligations (CMOs):
Mortgage-backed bonds that separate mortgage
pools into different maturity classes called
tranches. These instruments are sensitive to
changes in interest rates and homeowner
refinancing activity. They are subject to
prepayment and maturity extension risk.
Derivatives: Securities that derive their value
from other securities. The rate of return of
these financial instruments rises and falls--
sometimes very suddenly--in response to changes
in some specific interest rate, currency,
stock, or other variable.
Discount Rate: The interest rate charged by the
Federal Reserve on loans to member banks.
Federal Funds Rate: The interest rate charged
by one bank to another on overnight loans.
Futures Contract: An agreement to purchase or
sell a specific amount of a commodity or financial
instrument at a set price at a specified date in
the future.
www.strategicpartners.com (800) 225-1852
Leverage: The use of borrowed assets to enhance
return. The expectation is that the interest
rate charged on borrowed funds will be lower
than the return on the investment. While
leverage can increase profits, it can also
magnify losses.
Liquidity: The ease with which a financial
instrument (or product) can be bought or sold
(converted into cash) in the financial markets.
Price/Earnings Ratio: The price of a share of
stock divided by the earnings per share for a
12-month period.
Option: An agreement to purchase or sell
something, such as shares of stock, by a
certain time for a specified price. An option
need not be exercised.
Spread: The difference between two values;
often used to describe the difference between
"bid" and "asked" prices of a security, or
between the yields of two similar maturity bonds.
Yankee Bond: A bond sold by a foreign company
or government on the U.S. market and
denominated in U.S. dollars.
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Class A Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -14.52% N/A N/A 6.04%
Without Sales Charge -10.09% N/A N/A 8.07%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners High
Growth Fund (Class A shares) with a similar
investment in the Standard & Poor's 500 Composite
Stock Price Index (S&P 500 Index) by
portraying the initial account values at the
commencement of operations of Class A shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the
maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
Class A shares; (b) all recurring fees
(including management fees) were deducted; and
(c) all dividends and distributions were
reinvested.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or
operating expenses of a mutual fund. The
securities that comprise the S&P 500 Index may
differ substantially from the securities in the
Fund. The S&P 500 Index is not the only index
that may be used to characterize performance of
balanced stock funds. Other indexes may portray
different comparative performance. Investors
cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -15.13% N/A N/A 6.33%
Without Sales Charge -10.66% N/A N/A 7.32%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners High
Growth Fund (Class B shares) with a similar
investment in the Standard & Poor's 500
Composite Stock Price Index (S&P 500 Index) by
portraying the initial account values at the
commencement of operations of Class B shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the
maximum applicable contingent deferred sales
charge was deducted from the value of the
investment in Class B shares, assuming full
redemption on July 31, 2001; (b) all recurring
fees (including management fees) were deducted;
and (c) all dividends and distributions were
reinvested. Approximately seven years after
purchase, Class B shares will automatically
convert to Class A shares, on a quarterly
basis. This conversion feature is not reflected
in the graph.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or
operating expenses of a mutual fund. The
securities that comprise the S&P 500 Index
may differ substantially from the securities
in the Fund. The S&P 500 Index is not the only
one that may be used to characterize performance
of balanced stock funds. Other indexes may portray
different comparative performance. Investors
cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
Strategic Partners Asset Allocation Funds
Strategic Partners High Growth Fund
Class C Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -12.44% N/A N/A 6.93%
Without Sales Charge -10.66% N/A N/A 7.32%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners High
Growth Fund (Class C shares) with a similar
investment in the Standard & Poor's 500
Composite Stock Price Index (S&P 500 Index) by
portraying the initial account values at the
commencement of operations of Class C shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the
maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
Class C shares; (b) the maximum applicable
contingent deferred sales charge was deducted
from the value of the investment in Class C
shares, assuming full redemption on July 31,
2001; (c) all recurring fees (including
management fees) were deducted; and (d) all
dividends and distributions were reinvested.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or operating
expenses of a mutual fund. The securities
that comprise the S&P 500 Index may differ
substantially from the securities in the Fund.
The S&P 500 Index is not the only index that
may be used to characterize performance of
balanced stock funds. Other indexes may portray
different comparative performance. Investors cannot
invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
-9.74% N/A N/A 8.42%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners High
Growth Fund (Class Z shares) with a similar
investment in the Standard & Poor's 500
Composite Stock Price Index (S&P 500 Index) by
portraying the initial account values at the
commencement of operations of Class Z shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) all
recurring fees (including management fees)
were deducted, and (b) all dividends and
distributions were reinvested. Class Z shares
are not subject to a sales charge or
distribution and service (12b-1) fees.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or operating
expenses of a mutual fund. The securities that
comprise the S&P 500 Index may differ
substantially from the securities in the Fund.
The S&P 500 Index is not the only index that
may be used to characterize performance of
balanced stock funds. Other indexes may
portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit our website at:
www.strategicpartners.com
Trustees
Eugene C. Dorsey
Saul K. Fenster
Robert F. Gunia
Maurice F. Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
David R. Odenath, Jr.
Stephen Stoneburn
Joseph Weber
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Judy A. Rice, Vice President
Grace C. Torres, Treasurer
George P. Attisano, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments
Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Franklin Advisers, Inc.
920 Park Place.
San Mateo, CA 94403
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Lazard Asset Management
30 Rockefeller Plaza
New York, NY 10112
Prudential Investment Management, Inc.
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Fund Symbols NASDAQ CUSIP
Class A PHGAX 86276X509
Class B PIHGX 86276X608
Class C PHGCX 86276X707
Class Z PDHZX 86276X806
MFSP504E5
(LOGO) Printed on Recycled Paper
ANNUAL REPORT JULY 31, 2001
STRATEGIC PARTNERS
ASSET ALLOCATION FUNDS
(LOGO)
STRATEGIC PARTNERS
CONSERVATIVE GROWTH FUND
Objective: Seeks Current Income and a Reasonable
Level of Capital Appreciation
This report is not authorized for distribution
to prospective investors unless preceded or
accompanied by a current prospectus. The views
expressed in this report and information about
the Fund's portfolio holdings are for the
period covered by this report and are subject
to change thereafter.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Performance at a Glance
INVESTMENT GOALS AND STYLE
The Strategic Partners Conservative Growth Fund
seeks current income and a reasonable level of
capital appreciation. It invests in a
diversified portfolio of stocks and fixed-
income securities. There can be no assurance
that the Fund will achieve its investment
objective.
MANAGER
Prudential Investments Fund Management LLC
INVESTMENT ADVISERS
(LOGO)
www.strategicpartners.com (800) 225-1852
Annual Report July 31, 2001
Cumulative Total Returns1 As of 7/31/01
One Since
Year Inception2
Class A 1.00% 18.87%
Class B 0.34 16.58
Class C 0.34 16.58
Class Z 1.30 19.61
Lipper Balanced Fund Avg.3 -2.12 12.31
Average Annual Total Returns1 As of 6/30/01
One Since
Year Inception2
Class A -3.65% 4.55%
Class B -4.35 4.77
Class C -1.35 5.42
Class Z 1.64 6.85
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund
Management LLC and Lipper Inc. The cumulative
total returns do not take into account sales
charges. The average annual total returns do
take into account applicable sales charges. The
Fund charges a maximum front-end sales charge
of 5% for Class A shares. Class B shares are
subject to a declining contingent deferred
sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and
1% for six years. Approximately seven years
after purchase, Class B shares will
automatically convert to Class A shares on a
quarterly basis. Class C shares are subject to
a front-end sales charge of 1% and a CDSC of 1%
for 18 months. Class Z shares are not subject
to a sales charge or distribution and service
(12b-1) fees.
2 Inception date: Class A, B, C, and Z,
11/18/98.
3 Lipper average returns are unmanaged, and are
based on the average return for all funds in
each share class for the one-year and since
inception periods in the Lipper Balanced Fund
category. The Lipper Balanced Fund Average
includes funds that generally seek to conserve
principal by maintaining at all times a
balanced portfolio of both stocks and bonds.
Typically, the stock/bond ratio ranges around
60%/40%.
1
STRATEGIC PARTNERS
Asset Allocation Funds
(LOGO)
September 18, 2001
DEAR SHAREHOLDER,
The horrific events that took place on
September 11, 2001 will remain forever ingrained
in our nation's consciousness. In their aftermath,
our thoughts and our prayers remain with the victims
of this senseless tragedy, their families,
and friends. It is also with deep gratitude that we
acknowledge the heroic efforts of the men and
women involved in the rescue efforts.
We at Prudential Financial would like to take
the opportunity during this difficult time
to reassure our shareholders of our
unwavering commitment to their investment
needs. Under normal circumstances, the
investment landscape is a difficult one to
navigate, and during this extremely tragic
period in our nation's history, even more so.
We're here to provide the expertise and
resources that may help make the journey ahead
less daunting.
For now, investors should try to maintain a
patient focus on their long-term investment
strategies. It is also important for
individuals to avoid making investment
decisions based on emotional reactions. While
no one can predict the future, history has
shown that after an event of this magnitude,
the major markets post initial sharp declines from
which they eventually recover. Should history repeat
itself, individuals who leave the market now
may be unable to fully participate in a market
rebound. Above all, investors should continue
to seek guidance from their financial
professionals.
It is a testament to the resiliency of our
country that as we mourn, we also carry on.
Please let us know how we can help you as we
move forward together in the weeks and months
ahead.
Sincerely,
David R. Odenath, Jr., President
Strategic Partners Asset Allocation Funds
2
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Annual Report July 31, 2001
PRUDENTIAL DIVERSIFIED FUNDS RENAMED "STRATEGIC
PARTNERS ASSET ALLOCATION FUNDS"
On September 4, 2001, we welcomed the
Prudential Diversified Funds into the Strategic
Partners family of mutual funds, renaming them
the Strategic Partners Asset Allocation Funds.
These changes will have no effect at all on the
Funds' management: Both the asset allocations
and the advisers for each asset class have
stayed the same.
The change will allow investors in these Funds
to exchange their shares with shares of other
Strategic Partners Funds, including the
Strategic Partners Style Specific Funds and the
Strategic Partners Opportunity Funds. Our team
of investment management analysts selected
investment advisers for all of the Strategic
Partners Funds from among leading managers
across the entire investment industry. Should
you and your financial professional wish to
modify the asset allocation provided by your
fund, we believe the Strategic Partners family
offers a fine selection. Effective September 4,
2001, however, your shares of any Strategic
Partners fund are no longer exchangeable for
those of funds in the Prudential fund family.
3
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Annual Report July 31, 2001
INVESTMENT ADVISERS' REPORT
PERFORMANCE
During the Strategic Partners Conservative
Growth Fund's (formerly Prudential Diversified
Conservative Growth Fund) fiscal year ended
July 31, 2001, the strong performance of the
Fund's core bonds and value stocks earned it a
moderate gain, despite the sharply falling
prices of growth stocks. The 1.00% return on
the Fund's Class A shares (-4.05% to those
paying the maximum one-time Class A share sales
charge) was significantly above the -2.12%
Lipper Balanced Fund Average.
A GOOD TIME FOR DEFENSIVE INVESTING
During the 12 months ended July 31, 2001,
investors gradually came to accept that the
U.S. economy was slowing and that it was
affecting the global economy. As company after
company announced profits that were well below
growth estimates, and even below levels a year
earlier, stock prices began to fall precipitously.
The worst hit were primarily growth stocks whose
peak prices reflected the assumption that their
companies' earnings would increase very
rapidly. U.S. large-cap and small-cap growth
stocks had prolonged slides from September 2000
through March 2001 before recovering modestly.
In response to the market conditions, many
investors fled to asset classes that are
thought of as defensive--that is, relatively
immune to an economic slowdown--such as core
bonds and inexpensively priced (value) stocks.
This increased interest pushed up prices in
those asset classes. Small-cap value stocks,
which had been neglected for some time,
particularly benefited: the return of the
small-cap Russell 2000 Value Index was a huge
47 percentage points above that of the corresponding
Growth Index. Core bonds turned in the kind of large
return usually associated with stocks. Falling
interest rates, which increase the prices of
previously issued bonds, helped bond returns.
However, high-yield ("junk") bonds--those of
companies with lower credit ratings--didn't
share in the gains because investors
4
www.strategicpartners.com (800) 225-1852
Asset Class Index Returns
(GRAPH)
Source: Prudential and Lipper Inc.
The performance cited does not represent the
performance of the Strategic Partners
Conservative Growth Fund. Past performance is
not indicative of future results. Investors
cannot invest directly in an index.
The S&P/ Barra Value Index is an unmanaged,
weighted index comprising companies within the
S&P 500 Index with lower price-to-book ratios.
The S&P/Barra Growth Index is an unmanaged,
weighted index comprising companies within the
S&P 500 Index with higher price-to-book ratios.
The Russell 2000 Value Index is an unmanaged,
weighted index that measures the performance of
those Russell 2000 companies with lower price-
to-book ratios.
The Russell 2000 Growth Index is an unmanaged,
weighted index that measures the performance of
those Russell 2000 companies with higher price-
to-book ratios.
The Lehman Brothers Aggregate Index is an
unmanaged index of investment-grade securities
issued by the U.S. government and its agencies,
and by corporations with between 1 and 10 years
remaining to maturity. The Lehman Brothers
Aggregate Index gives a broad look at how
short- and intermediate-term bonds have
performed.
The Lehman Brothers High Yield Bond Index is an
unmanaged index of fixed-rate, noninvestment-
grade debt securities with at least one year
remaining to maturity. The Lehman Brothers High
Yield Bond Index gives a broad look at how
high-yield (junk) bonds have performed.
5
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Annual Report July 31, 2001
became more sensitive about potential defaults.
International stocks generally followed the
U.S. market down as the slowing U.S. economy
affected sales of companies based in other
countries.
THE FUND OUTPERFORMED ITS BENCHMARK...
The Strategic Partners Conservative Growth
Fund's outperformance relative to the Lipper
Balanced Fund Average was primarily due to the
substantial positive returns of its large-cap
value stocks and core bonds. The Fund's
positions in small-cap value stocks and high-
yield bonds made smaller contributions to performance.
The Fund's large-cap value comparable index,
the S&P/Barra Value Index, was solidly
positive, but the Fund's holdings in that asset
class still outperformed the Index by far. The Fund's
strong performance in this asset class resulted
from focuses on the insurance (primarily
property and casualty), basic materials (paper,
aluminum, and chemicals), tobacco, and health
services (HMO and hospital management)
industries. Stocks in these industries were
recovering from their depressed prices in
previous years, and earnings were consistent or
rising.
Core bonds were the second best performing
asset class (after small-cap value stocks), and
the Fund's holdings only marginally trailed the
return of the Lehman Brothers Aggregate Index,
a general measure of performance for this asset
class. Because of the strong performance of the
bond market over this reporting period, the
portion of the Fund's assets invested in core
bonds made the second largest positive
contribution to the Fund's return.
Small-cap value stocks--an asset class that had
previously suffered several years of poor
performance--staged a strong rebound when
investors fled from high-priced stocks to those
that remained inexpensive. Because of their
volatile nature, small-cap value stocks are
among the Fund's smaller asset allocations.
Nonetheless, their exceptionally high return
this reporting period made a significant,
positive contribution to the Fund, even though
the Fund's holdings slightly trailed the
comparable index return.
6
www.strategicpartners.com (800) 225-1852
The comparable index for high-yield bonds--the
Lehman Brothers High Yield Bond Index--was
essentially flat over this reporting period;
the generally good outlook for bonds was offset
by concerns that the slowing economy would
increase the pressure on financially weak
companies. However, the Fund's high-yield bond
holdings substantially outperformed their
comparable index, adding modestly to the Fund's
return.
...BUT LOSING ASSET CLASSES STILL PREDOMINATED
The largest detractor from the Fund's return
was its position in large-cap growth stocks--the
worst performing asset class over the period
and one of the larger components of the Fund.
As corporate profits fell below last year's
levels, the stocks of rapidly growing companies
suffered most. Cumulatively, the Fund's
holdings fell a bit farther than the S&P/Barra
Growth Index largely because of their emphasis
on technology, media, and telecommunications.
The Fund's investments in these industries
included companies that were central to the
building of the Internet (such as Cisco
Systems and JDS Uniphase), and to wireless
telecommunications products and services (such
as Nokia and Vodafone). Share price declines in
these industries were very dramatic.
The slowing U.S. economy and falling stock
market also affected the Fund's smaller
commitment to U.S. small-cap growth stocks. The
comparable index for this asset class dropped
by more than 20%. Although the Fund's holdings
in the asset class outperformed the comparable
index, this did little to mitigate the impact
of the falling markets. Only the fact that the
asset allocation to this volatile class was
relatively small held down its detractions from
the Fund's return.
Strategic Partners Conservative Growth Fund
Management Team
7
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Annual Report July 31, 2001
WHAT IS DIVERSIFICATION
Diversification--spreading your investments over
many different securities--is a basic principle
of investing. It helps to reduce the overall
risk of your portfolio. Mutual funds not only
provide professional money management, but they
also allow a relatively small investment to be
spread over many different securities. When you
own a large number of different securities, the
impact of any one security on your return is
reduced. In addition, if you diversify your
investments among asset classes and investment
styles--between stocks and bonds, value and
growth stocks, and investment-grade and high-
yield bonds--it is less likely that all the
securities you own will move in the same
direction at one time. Strategic Partners Asset
Allocation Funds provide more of this buffer
than funds investing in only one asset class.
We believe this will result in more consistent
returns over time.
REBALANCING
The Strategic Partners Conservative Growth Fund
has a target allocation for each asset class.
As some asset classes perform better than
others, the portfolio will drift from this
original target: asset classes with the best
performance will become a larger proportion of
the invested assets. We direct new investments
to the asset classes that have fallen below
their target ratio and, when necessary, sell
certain securities in appreciated asset classes
to maintain the balance. This not only keeps
your risk exposure from changing too much, but
it may reduce the average cost of our
investments and increase our average selling
price over time.
Although an individual investor can diversify
and rebalance, it would require a large
investment to own the range of asset classes
represented in the Strategic Partners
Conservative Growth Fund. Moreover, calculating
the amounts to allocate to each kind of
security in a rebalancing would be difficult.
Strategic Partners Asset Allocation Funds do it
all for you.
8
www.strategicpartners.com (800) 225-1852
GLOSSARY OF TERMS
Asset classes are classifications of
investments. The most basic classification of
securities is among stocks, bonds, and money
market investments. Stocks are shares of
ownership in a firm. Owners share in the
profits after debts are paid, and share in the
firm's appreciation in value. Generally, the
prices of stocks vary with investors' estimates
of a firm's earnings prospects, including the
impact of broader economic conditions. Bonds
are loans to a company, government, or agency.
They carry a fixed interest rate or one that
varies according to the terms specified in the
bond. They have a maturity date at which they
must be repaid. Generally, bond prices
fluctuate with current interest rates and with
events that affect the debtor's prospects of
repaying the loan. Money market instruments are
short-term loans that mature in 13 months or
less. Bonds and money market instruments are
called fixed-income securities. High-yield
bonds are also known as junk bonds. They are
subject to greater risk of loss of principal
and interest, including default risk, than higher-
rated bonds.
Strategic Partners Conservative Growth Fund
Diversification Target
(GRAPHIC)
9
Strategic Partners Asset Allocation Funds
Annual Report July 31, 2001
Financial
Statements
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''''''''''''''''''''''''''''''''''''''''''''
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 109.9%
Common Stocks 37.2%
-------------------------------------------------------------------------------------
Advertising 0.4%
4,100 Lamar Advertising Co.(a) $ 180,318
2,100 Omnicom Group, Inc. 183,477
----------------
363,795
-------------------------------------------------------------------------------------
Aerospace/Defense 0.4%
325 ADVO, Inc. 12,691
800 BE Aerospace, Inc.(a) 14,856
2,400 Embraer Aircraft Corp., ADR (Brasil)(a) 85,440
3,100 Northrop Grumman Corp. 248,713
----------------
361,700
-------------------------------------------------------------------------------------
Airlines 0.1%
1,625 Airtran Holdings, Inc.(a) 13,975
2,900 Atlantic Coast Airlines Holdings(a) 84,245
425 Skywest, Inc. 14,255
----------------
112,475
-------------------------------------------------------------------------------------
Aluminum 0.2%
3,600 Alcoa, Inc. 141,228
525 Century Aluminum Co. 9,161
875 Quanex Corp. 23,932
1,700 Reliance Steel & Aluminum Co. 42,330
----------------
216,651
-------------------------------------------------------------------------------------
Apparel 0.1%
875 Kenneth Cole Productions, Inc.(a) 17,281
400 K-Swiss, Inc. (Class A Stock) 13,000
1,325 Phillips-Van Heusen Corp. 18,153
----------------
48,434
-------------------------------------------------------------------------------------
Auto & Truck 0.2%
1,150 Lear Corp.(a) 45,540
4,000 Navistar International Corp.(a) 128,440
2,050 Sonic Automatic, Inc.(a) 39,975
----------------
213,955
See Notes to Financial Statements 11
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Banking 1.0%
300 1st Source Corp. $ 7,299
375 Astoria Financial Corp. 22,496
1,375 BancorpSouth, Inc. 22,137
5,500 Bank One Corp. 212,905
2,675 BankAtlantic Bancorp, Inc. 27,419
1,005 BankNorth Group, Inc. 23,075
550 City National Corp. 25,850
1,325 Colonial BancGroup, Inc. 19,504
375 Corus Bankshares, Inc. 22,200
525 Cullen/Frost Bankers, Inc. 18,433
1,198 CVB Financial Corp. 22,726
950 East West Bancorp, Inc. 24,244
75 First Citizens Bancshares, Inc. 7,538
750 First Merchants Corp. 17,625
1,076 Fulton Financial Corp. 23,887
400 Harbor Florida Bancshares, Inc. 7,620
725 Independent Bank Corp. 14,174
725 MAF Bancorp, Inc. 22,359
800 MBNA Corp. 28,320
900 PFF Bancorp, Inc. 23,040
2,800 PNC Bank Corp. 185,780
675 Provident Financial Group, Inc. 22,282
675 Southwest Bancorp(a) 22,693
950 Susquehanna Bancshares, Inc. 19,798
1,160 Washington Federal, Inc. 30,868
550 Westamerica BanCorporation 21,697
475 Whitney Holding Corp. 21,418
----------------
917,387
-------------------------------------------------------------------------------------
Building & Construction 0.2%
650 Centex Corp. 30,576
1,009 D.R. Horton, Inc. 27,798
750 KB Home 24,442
12 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
575 Lennar Corp. $ 26,387
612 M.D.C. Holdings, Inc. 25,667
650 Nortek, Inc.(a) 17,303
850 Thomas Industries, Inc. 21,862
575 York International Corp. 19,044
----------------
193,079
-------------------------------------------------------------------------------------
Business Services 0.1%
600 Arbitron, Inc. 15,780
5,525 Modis Professional Services, Inc.(a) 35,194
----------------
50,974
-------------------------------------------------------------------------------------
Cable
550 Belden, Inc. 13,448
1,162 Cable Design Technologies Corp. 17,488
----------------
30,936
-------------------------------------------------------------------------------------
Chemicals 0.3%
700 Albany Molecular Research, Inc. 21,763
825 Arch Chemicals, Inc. 16,583
1,700 Cambrex Corp. 81,005
825 Cytec Industries, Inc.(a) 26,804
350 Du Pont Photomasks, Inc.(a) 13,500
625 Ferro Corp. 13,813
750 Great Lakes Chemical Corp. 21,292
500 H.B. Fuller Co. 26,335
600 Minerals Technologies, Inc. 25,482
1,250 Olin Corp. 21,087
300 OM Group, Inc. 17,550
925 The Lubrizol Corp. 32,264
----------------
317,478
-------------------------------------------------------------------------------------
Computers 1.8%
5,200 ASM Lithography Holding N.V. (Netherlands)(a) 106,444
1,200 Catapult Communications Corp.(a) 20,688
13,200 Dell Computer Corp.(a) 355,476
4,400 EMC Corp.(a) 86,768
1,500 Hewlett-Packard Co. 36,990
See Notes to Financial Statements 13
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
5,600 IBM Corp. $ 589,176
4,700 Iomega Corp.(a) 7,473
10,400 Lucent Technologies, Inc.(a) 69,680
17,828 Maxtor Corp.(a) 117,665
2,800 Micron Technology, Inc. 117,600
1,325 MTS Systems Corp. 18,550
11,200 Sun Microsystems, Inc.(a) 182,448
----------------
1,708,958
-------------------------------------------------------------------------------------
Computer Services 0.8%
4,600 Advanced Digital Information(a) 52,210
525 CACI International, Inc.(a) 18,375
1,400 Carreker Corp.(a) 26,530
12,300 Cisco Systems, Inc.(a) 236,406
600 Digitalthink, Inc.(a) 8,700
1,600 eBay, Inc.(a) 100,112
4,000 Henry (Jack) & Associates, Inc. 113,080
2,700 Inforte Corp.(a) 30,240
3,200 Probusiness Services, Inc.(a) 88,224
1,950 Storage Technology Corp.(a) 26,851
1,025 Tier Technologies, Inc 11,890
----------------
712,618
-------------------------------------------------------------------------------------
Consulting Management
500 Tetra Tech, Inc. 11,350
-------------------------------------------------------------------------------------
Consumer Products/Services 0.3%
2,300 American Greetings Corp. 25,415
2,400 Cost Plus, Inc. 67,752
5,000 Gillette Co. 139,350
5,625 Service Corp. International(a) 44,438
975 Tupperware Corp. 22,893
----------------
299,848
14 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Diversified Manufacturing 1.5%
1,850 AGCO Corp. $ 19,074
700 Carpenter Technology Corp. 19,208
1,700 Coorstek, Inc.(a) 52,871
1,775 Daisytek International Corp.(a) 27,175
925 Esco Technologies, Inc.(a) 25,992
11,200 General Electric Co. 487,200
1,900 Gerber Scientific, Inc.(a) 20,558
500 Harsco Corp. 15,280
400 Intermagnetics General Corp.(a) 12,500
1,550 Jakks Pacific, Inc.(a) 31,046
725 Leucadia National Corp. 23,678
325 Libbey, Inc. 11,164
1,400 Minnesota Mining & Manufacturing Co. 156,632
625 National Service Industries, Inc. 14,138
1,700 Roper Industries, Inc. 64,345
600 Sauer-Danfoss, Inc. 5,460
875 Snap-On, Inc. 23,625
7,600 Tyco International Ltd. 404,320
375 United Stationers, Inc. 12,371
1,000 WMS Industries, Inc.(a) 23,000
----------------
1,449,637
-------------------------------------------------------------------------------------
Drugs & Medical Supplies 0.5%
3,300 Johnson & Johnson 178,530
3,000 Packard Bioscience Co. 28,890
5,775 Pharmacia Corp. 257,680
1,250 STERIS Corp.(a) 26,888
----------------
491,988
-------------------------------------------------------------------------------------
Electrical Services 0.5%
925 Allete, Inc. 21,913
2,087 Exelon Corp. 117,915
625 MDU Resources Group, Inc. 18,981
6,300 Nisource, Inc. 166,068
600 OGE Energy Corp. 12,960
10,200 PG&E Corp. 151,674
850 Western Resources, Inc. 15,802
----------------
505,313
See Notes to Financial Statements 15
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Electronic Components 1.6%
1,200 Alpha Industries, Inc.(a) $ 45,744
900 Caliper Technologies Corp.(a) 14,805
2,000 Credence Systems Corp.(a) 41,400
1,775 CTS Corp. 39,139
525 Electro Scientific Industries, Inc.(a) 16,879
925 Electronics for Imaging, Inc.(a) 20,387
3,500 Gentex Corp.(a) 114,765
4,400 Integrated Circuit Systems, Inc.(a) 84,920
4,200 Intersil Holding Corp.(a) 145,740
900 Keithley Industries, Inc. 18,045
1,050 Merix Corp.(a) 25,588
2,350 Methode Eletronics, Inc. (Class A Stock) 21,079
1,700 Novellus Systems, Inc.(a) 86,649
712 Park Electrochemical Corp. 17,551
200 Polycom, Inc.(a) 5,090
4,000 Power-One, Inc.(a) 62,000
3,200 Semtech Corp.(a) 118,560
2,400 STMicroelectronics N.V. (Netherlands) 76,416
450 Technitrol, Inc. 11,169
13,000 Texas Instruments, Inc. 448,500
3,300 Varian Semiconductor Equipment, Inc. 116,028
----------------
1,530,454
-------------------------------------------------------------------------------------
Exchange Traded Fund 0.1%
2,200 Nasdaq--100 Shares Trust Unit Series 1 91,872
-------------------------------------------------------------------------------------
Financial Services 3.1%
875 Allied Capital Corp. 20,344
2,275 America West Holdings Corp. 23,546
5,500 American Express Co. 221,815
1,700 Americredit Corp.(a) 104,533
750 Arthur J. Gallagher & Co. 20,625
350 Chittenden Corp. 11,708
12,066 Citigroup, Inc. 605,834
825 Doral Financial Corp. 30,574
725 Downey Financial Corp. 42,463
1,900 Eaton Vance Corp. 64,866
3,500 Edwards (A.G.), Inc. 153,125
3,100 Federal Home Loan Mortgage Corp. 212,164
600 Federal Signal Corp. 12,660
16 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
1,800 Goldman Sachs Group, Inc. $ 149,688
5,000 Household International, Inc. 331,450
1,225 Indymac Bancorp, Inc. 31,838
750 Jeffries Group, Inc. 26,595
900 J. P. Morgan Chase 38,970
800 Landamerica Financial Group, Inc. 25,600
2,600 Lehman Brothers Holdings, Inc. 187,200
4,300 Merrill Lynch & Co., Inc. 233,232
3,200 Morgan Stanley Dean Witter 191,424
1,300 Silicon Valley Bancshares(a) 26,208
1,250 Sky Financial Group, Inc. 24,450
4,400 Stilwell Financial, Inc. 130,504
450 Triad Guaranty, Inc.(a) 17,055
525 Webster Financial Corp. 18,763
----------------
2,957,234
-------------------------------------------------------------------------------------
Food & Beverage 1.0%
1,100 Corn Products International, Inc. 32,670
525 Dean Foods Co. 21,998
1,900 Del Monte Foods Co.(a) 17,081
1,950 Dole Food Co., Inc. 43,953
2,500 Mettler-Toledo International, Inc.(a) 106,500
7,700 PepsiCo, Inc. 359,051
7,329 Purina Mills, Inc.(a) 167,321
7,400 Sara Lee Corp. 149,258
325 Suiza Foods Corp.(a) 17,904
----------------
915,736
-------------------------------------------------------------------------------------
Gaming 0.1%
1,200 Argosy Gaming Co.(a) 31,680
4,025 Boyd Gaming Corp.(a) 24,231
2,400 Station Casinos, Inc.(a) 34,536
----------------
90,447
-------------------------------------------------------------------------------------
Health Care 1.0%
1,500 CIGNA Corp. 150,465
1,225 Coventry Healthcare, Inc.(a) 28,187
See Notes to Financial Statements 17
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
4,700 HCA Healthcare Co. $ 215,965
8,200 Health Management Assoc., Inc.(a) 162,032
1,375 Health Net, Inc. 25,231
1,525 Humana, Inc.(a) 17,004
900 Mid Atlantic Medical Services, Inc.(a) 18,900
525 Sunrise Assisted Living, Inc. 16,018
600 Triad Hospitals, Inc.(a) 20,352
500 Varian Med Systems, Inc. 35,750
1,700 Wellpoint Health Networks, Inc.(a) 181,832
----------------
871,736
-------------------------------------------------------------------------------------
Hotels 0.5%
3,900 Canadian Pacific Ltd. 147,810
2,100 Marriott International, Inc. (Class A Stock) 100,275
8,500 Meristar Hotels & Resorts, Inc.(a) 15,045
6,800 Starwood Hotels & Resorts (Class B Stock)(a) 242,692
----------------
505,822
-------------------------------------------------------------------------------------
Human Resources 0.1%
3,275 Kforce, Inc.(a) 16,179
1,500 Resources Connection, Inc.(a) 38,100
----------------
54,279
-------------------------------------------------------------------------------------
Insurance 2.1%
900 Alfa Corp. 21,699
4,900 Allstate Corp. 171,304
4,662 American International Group, Inc. 388,112
2,300 Chubb Corp. 161,391
1,250 CNA Surety Corp. 17,975
750 Commerce Group, Inc. 27,630
715 Fidelity National Financial, Inc. 18,333
1,175 First American Financial Corp. 20,856
2,200 Lincoln National Corp. 112,266
5,600 Old Republic International Corp. 148,400
875 Presidential Life Corp. 16,826
2,400 Reinsurance Group of America, Inc. 93,792
800 Stancorp Financial Group, Inc. 35,280
18 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
5,500 The Hartford Financial Services Group, Inc. $ 364,155
2,000 Union Pacific Corp. 107,380
3,800 XL Capital Ltd. (Class A stock) 291,650
----------------
1,997,049
-------------------------------------------------------------------------------------
Internet 0.1%
3,200 Avocent Corp.(a) 82,880
3,500 Cheap Tickets, Inc.(a) 40,740
350 Sonicwall, Inc.(a) 7,438
575 Travelocity.com, Inc.(a) 13,254
----------------
144,312
-------------------------------------------------------------------------------------
Lodging
1,225 Boykin Lodging Co. 14,823
-------------------------------------------------------------------------------------
Machinery & Equipment 0.2%
875 Applied Industrial Technologies, Inc. 15,006
4,400 FMC Technologies, Inc.(a) 79,508
1,150 JLG Industries, Inc. 12,995
1,050 Lincoln Electric Holdings, Inc. 25,116
650 Manitowoc Co., Inc. 18,064
1,025 Milacron, Inc. 18,758
650 Toro Co. 30,647
750 Universal Compression Holdings, Inc.(a) 21,037
----------------
221,131
-------------------------------------------------------------------------------------
Media 1.9%
1,700 Acme Communications, Inc.(a) 13,600
6,400 AOL Time Warner, Inc.(a) 290,880
27,000 AT&T Corp. Liberty Media 424,710
1,025 Banta Corp. 28,505
3 Clear Channel Communications, Inc.(a) 176
5,800 Entravision Communication Corp.(a) 72,674
875 Hollinger, Inc. 12,705
4,200 Knight-Ridder, Inc. 258,678
325 Liberty Corp. 12,951
175 Media General, Inc. 8,398
6,200 Metro Goldwyn Mayer, Inc.(a) 124,000
4,800 New York Times Co. 222,240
See Notes to Financial Statements 19
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
2,600 Pearson PLC, ADR (United Kingdom) $ 40,040
700 RH Donnelley Corp.(a) 21,700
5,200 Silicon Graphics, Inc.(a) 3,276
5,200 Univision Communications, Inc. (Class A
stock)(a) 198,536
----------------
1,733,069
-------------------------------------------------------------------------------------
Medical Products/Services 1.6%
4,900 Abbott Laboratories 262,591
6,100 Amgen, Inc.(a) 382,531
600 Aspect Med Systems, Inc.(a) 7,146
2,900 Baxter International, Inc. 144,420
925 Buckeye Technologies, Inc.(a) 12,534
800 Digene Corp. 27,704
500 Fisher Scientific International, Inc.(a) 13,475
4,800 Genentech, Inc.(a) 203,040
3,700 Monsanto Co. 130,240
1,000 North American Scientific, Inc.(a) 15,350
900 Oratec Interventions, Inc.(a) 7,632
2,600 Ortec International, Inc.(a) 18,460
2,500 Sepracor, Inc.(a) 110,150
3,300 Varian, Inc.(a) 94,974
1,200 Ventana Medical Systems, Inc.(a) 40,200
650 Visx, Inc.(a) 10,335
----------------
1,480,782
-------------------------------------------------------------------------------------
Metals 0.2%
600 Cleveland-Cliffs, Inc. 10,050
700 Ladish Co., Inc.(a) 11,200
1,175 NS Group, Inc.(a) 11,163
2,300 Phelps Dodge Corp. 92,920
475 Precision Castparts Corp. 17,338
1,050 Timken Co. 17,503
1,350 Wolverine Tube, Inc.(a) 20,952
1,575 Worthington Industries, Inc. 22,144
----------------
203,270
20 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Mining 0.2%
7,100 Freeport-McMoRan Copper & Gold, Inc.
(Class A stock)(a) $ 69,296
2,600 Freeport-McMoRan Copper & Gold, Inc.
(Class B stock)(a) 27,976
475 Massey Energy Co. 8,160
3,200 Newmont Mining Corp. 59,840
2,200 Stillwater Mining Co.(a) 56,760
----------------
222,032
-------------------------------------------------------------------------------------
Miscellaneous Consumer 0.1%
900 Consolidated Graphics, Inc.(a) 19,800
925 Navigant International, Inc.(a) 15,956
1,325 United Rentals, Inc. 30,992
----------------
66,748
-------------------------------------------------------------------------------------
Networking 0.2%
525 Anixter International, Inc.(a) 15,146
275 Black Box Corp.(a) 15,087
4,200 IXIA(a) 58,842
6,500 Oracle Corp.(a) 117,520
4,300 Western Multiplex Corp. (Class A stock)(a) 20,640
----------------
227,235
-------------------------------------------------------------------------------------
Office Equipment & Supplies 0.3%
5,100 Harris Corp. 153,102
575 Wallace Computer Services, Inc. 9,798
10,600 Xerox Corp. 84,588
----------------
247,488
-------------------------------------------------------------------------------------
Oil & Gas 2.0%
800 AGL Resources, Inc. 19,200
1,600 Amerada Hess Corp. 123,648
600 Cal Dive International, Inc.(a) 11,220
1,700 Chesapeake Energy Corp.(a) 10,982
6,900 Diamond Offshore Drilling, Inc. 202,446
950 Energen Corp. 24,225
See Notes to Financial Statements 21
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
13,100 ENSCO International, Inc. $ 271,039
4,500 Grey Wolf, Inc.(a) 14,040
8,400 Halliburton Co. 294,084
1,025 Key Energy Services, Inc.(a) 9,532
4,000 Nabors Industries, Inc.(a) 117,200
1,500 Oneok, Inc. 27,300
4,900 Santa Fe International Corp. 146,510
6,100 Schlumberger Ltd. 327,875
750 Spinnaker Exploration Co.(a) 30,225
1,400 Superior Energy Services, Inc.(a) 11,900
2,444 Total Fina, SA, ADR (France) 173,231
1,025 Trico Marine Services, Inc.(a) 10,076
1,150 Vintage Petroleum, Inc. 21,332
1,100 WGL Holdings, Inc. 30,613
----------------
1,876,678
-------------------------------------------------------------------------------------
Oil & Gas Exploration/Production 0.6%
1,425 Comstock Resources, Inc.(a) 10,431
3,700 Conoco, Inc. 114,108
925 Seitel, Inc.(a) 12,487
718 Stone Energy Corp.(a) 32,705
6,000 Talisman Energy, Inc. 235,860
4,200 Williams Companies, Inc. 140,700
----------------
546,291
-------------------------------------------------------------------------------------
Paint
3,125 RPM, Inc. 29,000
-------------------------------------------------------------------------------------
Paper & Forest Products 0.8%
3,800 Boise Cascade Corp. 137,560
2,250 Caraustar Industries, Inc. 22,387
4,296 Georgia-Pacific Corp. 157,234
3,600 International Paper Co. 147,096
1,800 Louisiana-Pacific Corp. 19,116
6,150 Pactiv Corp.(a) 95,509
725 Pope & Talbot, Inc. 10,005
2,900 Temple-Inland, Inc. 179,945
1,075 Universal Forest Products, Inc. 21,081
----------------
789,933
22 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Pharmaceuticals 0.9%
2,525 Alpharma, Inc. $ 71,230
7,200 American Home Products Corp. 434,232
500 Lilly (Eli) & Co. 39,640
1,200 Perrigo Co. 19,884
7,450 Pfizer, Inc. 307,089
550 Pharmaceutical Product Development, Inc.(a) 19,476
----------------
891,551
-------------------------------------------------------------------------------------
Photography 0.1%
3,000 Eastman Kodak Co. 129,930
-------------------------------------------------------------------------------------
Real Estate Investment Trusts 0.9%
1,000 Amli Residential Properties Trust 23,450
1,025 Arden Realty, Inc. 26,035
700 BRE Properties, Inc. 21,252
1,000 Cabot Industrial Trust Corp. 21,000
500 Camden Property Trust 18,725
925 Capital Automotive REIT 15,716
100 CBL & Associates Properties, Inc. 3,084
5,600 Equity Office Properties Trust 168,112
1,125 Felcor Lodging Trust, Inc. 24,458
700 First Industrial Realty Trust, Inc. 21,980
1,225 Glenborough Realty Trust, Inc. 23,153
1,050 Highwoods Properties, Inc. 26,827
400 Home Properties of New York, Inc. 12,060
750 Hospitality Properties Trust 21,038
2,950 HRPT Properties Trust 25,458
925 Innkeepers USA Trust 10,813
1,725 JDN Realty Corp. 20,562
550 Kilroy Realty Corp. 14,740
1,200 New Plan Excel Realty Trust, Inc. 19,260
1,525 Prime Hospitality Corp.(a) 18,315
400 Realty Income Corp. 11,468
See Notes to Financial Statements 23
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
2,850 Reckson Associates Realty Corp. $ 63,127
950 Regency Centers Corp. 24,434
6,900 Security Capital Group, Inc.(a) 142,140
600 Summit Properties, Inc. 15,660
600 Weingarten Realty Investors 26,820
----------------
819,687
-------------------------------------------------------------------------------------
Restaurants 0.4%
1,000 CBRL Group, Inc. 19,390
1,200 CEC Entertainment, Inc.(a) 42,828
6,500 Darden Restaurants, Inc. 194,350
1,125 Landry's Seafood Restaurants, Inc. 21,262
2,400 McDonald's Corp. 69,936
1,050 Ruby Tuesday, Inc. 19,530
----------------
367,296
-------------------------------------------------------------------------------------
Retail 2.4%
1,100 BJ's Wholesale Club, Inc.(a) 61,600
1,775 Borders Group, Inc.(a) 40,949
425 Christopher & Banks Corp.(a) 11,390
1,250 Dillards, Inc. (Class A stock) 18,550
5,600 Federated Department Stores, Inc.(a) 216,160
156 Freds, Inc. 3,955
1,000 Friedmans, Inc. 7,450
11,100 Home Depot, Inc. 559,107
2,650 IKON Office Solutions, Inc. 20,617
6,000 Kohl's Corp.(a) 343,680
7,600 Limited, Inc. 128,972
1,700 Linens N Things, Inc.(a) 43,690
450 Payless Shoesource, Inc. 25,771
325 Pier 1 Imports, Inc. 3,819
2,500 Shopko Stores, Inc. 21,625
6,100 Target Corp. 236,070
6,500 Tiffany & Co. 229,450
575 Tweeter Home Entertainment Group, Inc.(a) 16,405
24 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
2,525 Value City Department Stores, Inc.(a) $ 15,756
2,050 Venator Group, Inc. 33,825
4,600 Wal-Mart Stores, Inc. 257,140
----------------
2,295,981
-------------------------------------------------------------------------------------
Semiconductors 0.9%
3,000 Applied Materials, Inc.(a) 137,580
6,600 Intel Corp. 196,746
2,900 KLA Tencor Corp.(a) 157,731
600 Nanometrics, Inc.(a) 19,800
4,900 National Semiconductor Corp.(a) 157,045
1,700 Power Integrations, Inc.(a) 36,805
2,300 Rudolph Technologies, Inc.(a) 95,450
----------------
801,157
-------------------------------------------------------------------------------------
Shipping/Shipbuilding 0.1%
2,400 Teekay Shipping Corp. 82,560
-------------------------------------------------------------------------------------
Software 1.0%
2,300 Actuate Corp.(a) 23,506
4,300 Bindview Development Corp.(a) 5,891
6,900 BMC Software, Inc.(a) 138,000
5,800 Brio Technology, Inc.(a) 24,186
575 JDA Software Group, Inc.(a) 12,017
3,500 Keane, Inc. 64,750
1,700 Matrixone, Inc.(a) 26,945
875 Mentor Graphics Corp.(a) 16,319
8,300 Microsoft Corp.(a) 549,377
775 NetIQ Corp.(a) 25,567
1,450 Novell, Inc.(a) 7,236
1,700 Precise Software Solutions Ltd.(a) 36,788
1,700 Sapient Corp.(a) 10,625
1,400 Verity, Inc.(a) 24,584
----------------
965,791
See Notes to Financial Statements 25
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
Telecommunications 2.9%
5,800 Advanced Fibre Communications(a) $ 146,450
2,300 ALLTEL Corp. 141,795
600 Andrew Corp.(a) 13,224
6,200 AT&T Corp. 125,302
6,395 AT&T Wireless Services, Inc. 119,522
3,500 DDI Corp.(a) 68,040
5,100 General Motors Corp., (Class H stock) 98,430
2,300 Leap Wireless International, Inc.(a) 56,442
9,800 Nokia Corp., ADR (Finland) 213,738
2,800 Powerwave Technologies, Inc.(a) 48,048
9,500 Qwest Communications International, Inc.(a) 247,000
600 SBA Communications Corp.(a) 11,826
3,800 SBC Communications, Inc. 171,114
1,200 Sierra Wireless, Inc.(a) 14,580
12,000 Sprint Corp. 287,820
2,600 Stanford Microdevices, Inc.(a) 20,800
3,900 Verizon Communications, Inc. 211,185
8,740 Viacom, Inc.(a) 435,252
7,298 Vodafone Air Touch Group PLC, ADR (United
Kingdom) 157,272
1,700 Western Wireless Corp.(a) 66,147
9,700 Worldcom, Inc.(a) 135,800
----------------
2,789,787
-------------------------------------------------------------------------------------
Tobacco 0.7%
2,700 Loews Corp. 153,252
6,800 Philip Morris Companies, Inc. 309,400
4,300 R.J. Reynolds Tobacco Holdings, Inc. 230,953
----------------
693,605
-------------------------------------------------------------------------------------
Transportation 0.3%
1,400 Alexander & Baldwin, Inc. 35,560
575 Arkansas Best Corp.(a) 15,870
775 CNF, Inc. 25,157
26 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
2,125 Forward Air Corp.(a) $ 58,756
15,800 OMI Corp.(a) 75,682
700 Roadway Express, Inc. 20,335
1,050 Yellow Corp.(a) 22,848
----------------
254,208
-------------------------------------------------------------------------------------
Utilities 0.2%
2,900 Beacon Power Corp.(a) 13,485
600 California Water Service Group 14,370
525 CH Energy Group, Inc. 22,129
1,600 Cleco Corp. 36,400
1,050 El Paso Electric Co. 15,214
725 Idacorp, Inc. 26,825
1,050 Kansas City Power & Light Co. 25,515
575 New Jersey Resources Corp. 24,984
600 Newpower Holdings, Inc.(a) 4,200
575 Peoples Energy Corp. 21,884
775 Public Service Company of New Mexico 22,948
----------------
227,954
-------------------------------------------------------------------------------------
Waste Management 0.2%
5,400 Waste Management, Inc. 167,400
----------------
Total common stocks (cost $34,737,610) 35,310,904
----------------
PREFERRED STOCKS 0.1%
-------------------------------------------------------------------------------------
Publishing
1,000 Primedia, Inc.
(cost $94,875) 83,000
----------------
See Notes to Financial Statements 27
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES 0.7%
A2 $ 700 General Motors Acceptance Corp.,
MTN, FRN,
4.07%, 10/5/01
(cost $699,826) $ 696,700
----------------
CORPORATE BONDS 25.6%
-------------------------------------------------------------------------------------
Aerospace/Defense 0.1%
B2 20 Alliant Techsystems, Inc.,
Sr. Sub. Notes,
8.50%, 5/15/11 20,700
Ba2 35 Sequa Corp., Sr. Sub. Notes,
9.00%, 8/1/09 34,913
----------------
55,613
-------------------------------------------------------------------------------------
Airlines 0.7%
Ba2 75 Continental Airlines, Inc., Sr.
Notes,
8.00%, 12/15/05 75,040
Baa3 135 Delta Air Lines, Inc., Notes,
8.30%, 12/15/29 121,341
Ba2 75 Northwest Airlines, Inc. Notes,
7.625%, 3/15/05 73,829
United Airlines, Inc., Sr. Debs.,
Ba1 125 10.67%, 5/1/04 130,502
B1 5 9.75%, 8/15/21 4,759
B1 240 U.S. Air, Inc., Ser. 1993,
10.375%, 3/1/13 228,897
----------------
634,368
-------------------------------------------------------------------------------------
Aluminum 0.1%
Ba3 35 Century Aluminum Co. Sr. Sec'd.
Notes,
11.75%, 4/15/08 36,488
B3 35 United States Can Co. Sr. Sub.
Notes,
12.375%, 10/1/10 33,250
----------------
69,738
28 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Automotive Parts 0.9%
B1 $ 25 American Axle & Manufacturing,
Inc.
Sr. Sub. Notes,
9.75%, 3/1/09 $ 25,750
B2 15 Collins & Aikman Products Co.,
Sr. Sub. Notes,
11.50%, 4/15/06 15,000
Caa1 50 Eagle Picher Industries, Inc.,
Sr. Sub. Notes,
9.375%, 3/1/08 31,000
B3 60 Motors & Gears, Inc., Sr. Notes,
10.75%, 11/15/06 59,700
Ba1 150 Navistar International Corp., Sr.
Notes,
7.00%, 2/1/03 147,750
Baa2 500 TRW, Inc., Notes,
8.75%, 5/15/06 549,535
----------------
828,735
-------------------------------------------------------------------------------------
Banks 0.2%
Ba3 150 Sovereign Bancorp, Inc., Sr.
Notes,
10.25%, 5/15/04 158,872
B2 30 Western Financial Bank, Sub. Cap.
Debs.,
8.875%, 8/1/07 28,425
----------------
187,297
-------------------------------------------------------------------------------------
Building & Construction 0.1%
B3 100 Nortek, Inc.
Sr. Sub. Notes,
9.875%, 6/15/11 99,000
-------------------------------------------------------------------------------------
Cable 1.9%
Adelphia Communications Corp.,
Sr. Notes,
B2 150 10.875%, 10/1/10 150,000
B2 115 10.25%, 6/15/11 112,125
See Notes to Financial Statements 29
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Callahan Nordrhein Westfalen,
Sr. Disc. Notes,
Zero Coupon (until 7/15/05),
B3 $ 50 16.00%, 7/15/10 $ 19,250
Sr. Notes,
B3 50 14.00%, 7/15/10 36,500
Charter Communications Holdings,
Sr. Disc. Notes,
Zero Coupon (until 5/15/06),
B2 420 11.75%, 5/15/11 237,300
Sr. Notes,
B2 200 10.00%, 5/15/11 203,000
B2 25 10.75%, 10/1/09 26,000
B3 75 Coaxial Communications, Inc., Sr.
Notes,
10.00%, 8/15/06 75,000
Ba3 200 CSC Holdings, Inc.,
Sr. Sub. Debs.,
10.50%, 5/15/16 214,000
B1 15 Fox Family Worldwide, Inc., Sr.
Notes,
9.25%, 11/1/07 16,200
B3 500 Insight Communications, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 2/15/06),
12.25%, 2/15/11 295,000
B3 100 International Wire Group, Inc.,
Sr. Sub. Notes,
11.75%, 6/1/05 100,000
Lin Holdings Corp., Sr. Disc.
Notes,
Zero Coupon (until 3/1/03),
B3 115 10.00%, 3/1/08 89,700
Zero Coupon (until 3/10/03)
B3 20 10.00%, 3/1/08 14,550
B3 125 Paxson Communications Corp.,
Sr. Sub. Notes,
10.75%, 7/15/08 129,375
Caa1 180 United Pan-European Communications
(Netherlands), Sr. Notes,
10.875%, 8/1/09 72,000
----------------
1,790,000
30 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Chemicals 0.5%
B2 $ 50 Applied Extrusion Tech., Inc., Sr.
Notes
10.75%, 7/1/11 $ 52,000
B2 55 Huntsman ICI Chemicals, Inc.,
Sr. Sub. Notes,
10.125%, 7/1/09 53,625
IMC Global, Inc. Sr. Notes,
Ba1 20 10.875%, 6/1/08 20,072
Ba1 70 11.25%, 6/1/11 70,003
B2 60 ISP Chemco, Inc., Sr. Sub. Notes,
10.25%, 7/1/11 60,000
B2 70 ISP Holdings, Inc., Sr. Notes
9.00%, 10/15/03 66,500
B2 70 Lyondell Chemical Co., Sr. Sub.
Notes,
10.875%, 5/1/09 69,300
Ba1 50 Millennium America, Inc., Sr.
Notes,
9.25%, 6/15/08 50,625
B1 12 NL Industries, Inc., Sr. Sec'd.
Notes,
11.75%, 10/15/03 12,120
Ca 70(b) Sterling Chemical Holdings, Inc.,
Sr. Sec'd. Notes,
12.375%, 7/15/06 56,000
----------------
510,245
-------------------------------------------------------------------------------------
Commercial Services 0.5%
Comdisco, Inc.
Notes,
B2 35 6.00%, 1/30/02 28,525
Sr. Notes,
B2 150 9.50%, 8/15/03 123,750
Baa1 300 Cox Enterprises, Inc., FRN
5.21375%, 5/1/03 300,020
----------------
452,295
-------------------------------------------------------------------------------------
Computer Services 0.4%
Ba3 30 Amkor Tech, Inc., Sr. Notes,
9.25%, 2/15/08 26,700
See Notes to Financial Statements 31
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
B1 $ 100 Echostar Broadband Corp.,
Sr. Notes,
10.375%, 10/1/07 $ 102,000
B1 150 Insight Midwest LP, Sr. Notes,
10.50%, 11/1/10 161,250
B1 75 Seagate Technology, Sub. Notes,
12.50%, 11/15/07 73,969
Ba1 50 Unisys Corp., Sr. Notes,
8.125%, 6/1/06 48,750
----------------
412,669
-------------------------------------------------------------------------------------
Containers 0.3%
B1 10 Norampac, Inc., Sr. Notes,
9.50%, 2/1/08 10,350
B3 106 Packaged Ice, Inc., Sr. Notes,
9.75%, 2/1/05 83,740
B2 100 Radnor Holdings, Inc., Sr. Notes,
10.00%, 12/1/03 80,000
B2 150 Stone Container Corp., Sr. Notes,
9.25%, 2/1/08 154,500
----------------
328,590
-------------------------------------------------------------------------------------
Electronics 0.1%
Ba3 50 Flextronics International Ltd.,
9.875%, 7/1/10 51,500
Ba3 75 TNP Enterprises, Inc.,
Sr. Sub. Notes,
10.25%, 4/1/10 81,750
----------------
133,250
-------------------------------------------------------------------------------------
Energy 1.4%
Baa2 700 Cinergy Corp., Debs.,
6.125%, 4/15/04 694,797
Ba3 150 CMS Energy Corp., Sr. Notes,
9.875%, 10/15/07 160,137
32 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Baa3 $ 200 Southern California Edison Co.,
Notes,
6.51375%, 8/1/01 $ 160,000
A3 300 TXU Electric Co.,
4.53688%, 9/20/01 300,266
----------------
1,315,200
-------------------------------------------------------------------------------------
Financial Services 3.4%
B3 15 Actuant Finance Corp.,
Sr. Sub. Notes,
13.00%, 5/1/09 15,300
Ba1 200 Americredit Corp., Gtd. Notes,
9.875%, 4/15/06 204,000
A2 300 Bear, Stearns & Co., Inc.,
FRN, Sr. Notes,
4.68875%, 8/1/01 300,228
A2 200 CIT Group, Inc.,
FRN, MTN, Sr. Notes,
4.27%, 4/7/03 200,705
A2 600 Ford Motor Credit Corp.,
7.50%, 3/15/05 634,512
B1 200 Green Tree Financial Corp., MTN,
6.50%, 9/26/02 192,196
Ba1 400 GS Escrow Corp., Sr. Notes,
6.75%, 8/1/01 400,000
Midland Funding Corp.,
Debs.,
Ba3 75 13.25%, 7/23/06 88,052
Sr. Sec'd. Note, Ser. A,
Ba3 250 11.75%, 7/23/05 273,510
Aa3 600 Morgan Stanley Dean Witter,
MTN, FRN,
3.83%, 1/28/02 600,545
See Notes to Financial Statements 33
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Ba3 $ 100 Orion Power Holdings, Inc., Sr.
Notes,
12.00%, 5/1/10 $ 112,000
B2 200 Stone Container Finance Co., Sr.
Notes,
11.50%, 8/15/06 212,000
----------------
3,233,048
-------------------------------------------------------------------------------------
Food & Beverage 0.3%
B3 50 Agrilink Foods, Inc., Sr. Sub.
Notes,
11.875%, 11/1/08 47,062
B2 100 Great Atlantic & Pacific Tea,
Inc.,
Sr. Notes,
7.70%, 1/15/04 91,500
B2 100 Notes,
7.75%, 4/15/07 85,000
B1 100 Pilgrim's Pride Corp., Sr. Sub.
Notes,
10.875%, 8/1/03 100,250
----------------
323,812
-------------------------------------------------------------------------------------
Gaming 1.0%
B2 20 Argosy Gaming
Sr. Sub. Notes,
9.00%, 9/1/11 20,250
Circus Circus Enterprises, Inc.,
Debs.,
Ba2 100 6.70%, 11/15/96 99,086
Sr. Sub. Notes
Ba3 300 6.75%, 7/15/03 289,500
Notes,
Ba3 100 6.45%, 2/1/06 93,973
B2 75 Coast Hotels & Casinos, Inc.,
Sr. Sub. Notes,
9.50%, 4/1/09 76,875
B2 100 Harveys Casino Resorts, Sr. Sub.
Notes,
10.625%, 6/1/06 105,500
B3 25 Hollywood Casino Corp.,
Sr. Sec'd. Notes,
11.25%, 5/1/07 26,250
34 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
B2 $ 100 Hollywood Park, Inc.,
Sr. Sub. Notes,
9.25%, 2/15/07 $ 86,000
B2 30 Horseshoe Gaming Holding Corp.,
Sr. Sub. Notes,
8.625%, 5/15/09 30,075
Ba2 20 Park Place Entertainment Corp.,
Sr. Sub. Notes,
9.375%, 2/15/07 21,200
B3 50 Premier Parks, Inc., Sr. Notes,
9.75%, 6/15/07 51,250
B1 40 Station Casinos, Inc., Sr. Sub.
Notes,
9.875%, 7/1/10 40,800
Caa 35 Venetian Casino Resort LLC,
Sec'd. Mtge. Notes,
12.25%, 11/15/04 37,100
----------------
977,859
-------------------------------------------------------------------------------------
Health Care 1.4%
Columbia/HCA Healthcare Corp.,
Ba1 60 9.00%, 12/15/14 63,900
MTN,
Ba1 300 6.73%, 7/15/45 302,250
C 350(b) Integrated Health Services, Inc.,
Sr. Sub. Notes,
9.25%, 1/15/08 1,750
B2 25 Lifepoint Hospitals Holdings,
Inc.,
Sr. Sub. Notes,
10.75%, 5/15/09 28,000
Aa2 500 Long Island College Hosp.,
Rev., FHA Mtge., Ser. B,
8.90%, 8/15/30 566,265
B3 125 Magellan Health Services, Inc.,
Sr. Sub. Notes,
9.00%, 2/15/08 118,750
B2 100 Matria Healthcare, Inc., Sr. Notes
11.00%, 5/1/08 96,250
See Notes to Financial Statements 35
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
B3 $ 100 Select Medical Corp.,
Sr. Sub. Notes,
9.50%, 6/15/09 $ 97,500
B2 50 Triad Hospitals, Sr. Sub. Notes,
11.00%, 5/15/09 54,875
----------------
1,329,540
-------------------------------------------------------------------------------------
Industrials 0.5%
AES Drax Holdings Ltd.,
Sr. Sec'd. Notes,
Ba2 100 11.50%, 8/30/10 108,500
Baa3 250 10.41%, 13/31/20 278,750
B3 325 United International Holdings,
Inc.,
Sr. Disc. Notes,
Zero Coupon (until 2/15/03),
10.75%, 2/15/08 104,813
----------------
492,063
-------------------------------------------------------------------------------------
Insurance 0.5%
Conseco, Inc.,
Notes,
B1 400 8.75%, 2/9/04 374,000
Sr. Notes,
B1 120 10.75%, 6/15/08 118,200
----------------
492,200
-------------------------------------------------------------------------------------
Internet
Ca 20 Exodus Communications, Inc.,
Sr. Notes,
11.625%, 7/15/10 6,600
-------------------------------------------------------------------------------------
Lodging 0.2%
B2 65 Extended Stay America, Inc.,
Sr. Sub. Notes,
9.875%, 6/15/11 65,325
36 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Ba1 $ 115 ITT Corp., Debs.,
7.375%, 11/15/15 $ 106,723
Ba3 50 La Quinta Inns, Inc., Sr. Notes,
7.25%, 3/15/04 47,250
----------------
219,298
-------------------------------------------------------------------------------------
Manufacturing 0.3%
B2 20 Blount, Inc., Sr. Notes,
7.00%, 6/15/05 13,400
B3 110 Core Mark International, Inc.,
Sr. Sub. Notes,
11.375%, 9/15/03 106,150
B1 100 Elizabeth Arden, Inc., Ser. B,
Sr. Sec'd. Notes,
11.75%, 2/1/11 106,500
B2 75 Gentek Corp.
Sr. Sub. Notes,
11.00%, 8/1/09 56,063
Ca 20 Polymer Group, Inc., Sr. Sub.
Notes,
Ser. B,
8.75%, 3/1/08 7,800
B2 10 Venture Holdings, Inc., Sr. Notes,
Ser. B,
9.50%, 7/1/05 7,825
----------------
297,738
-------------------------------------------------------------------------------------
Media 2.1%
B2 200 Ackerley Group, Inc.,
Sr. Sub. Notes, Ser. B,
9.00%, 1/15/09 180,000
B2 125 Alliance Atlantis Communications,
Inc., Sr. Sub. Notes,
13.00%, 12/15/09 132,500
B2 100 Canwest Media, Inc., Sr. Sub.
Notes,
10.625%, 5/15/11 104,500
See Notes to Financial Statements 37
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
B1 $ 250 Fox Family Worldwide, Inc.,
Sr. Disc. Notes,
Zero Coupon, 11/1/02 $ 243,125
B2 250 Mediacom Broadband LLC,
Sr. Notes,
11.00%, 7/15/13 263,750
B3 50 Nextmedia, Inc., Sr. Sub. Notes,
10.75%, 7/1/11 52,062
Ba3 50 Primedia, Inc., Sr. Notes,
8.875%, 5/15/11 48,000
Quebecor Media, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 7/15/06)
B2 100 13.75%, 7/15/11 59,000
Sr. Notes,
B2 100 11.125%, 7/15/11 105,500
Baa1 600 Time Warner, Inc., Sr. Notes,
6.10%, 12/30/01 604,404
B2 175 Young Broadcasting, Inc.,
Sr. Sub. Notes,
10.00%, 3/1/11 171,500
----------------
1,964,341
-------------------------------------------------------------------------------------
Metals 0.2%
B2 75 Kaiser Aluminum & Chemical Corp.,
Sr. Notes,
9.875%, 2/15/02 73,500
Ba1 150 USEC, Inc., Sr. Notes,
6.625%, 1/20/06 137,236
Caa3 40 WHX Corp., Sr. Sub. Notes,
10.50%, 4/15/05 20,400
----------------
231,136
38 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Mining
$ 30 Terex Corp., Sr. Sub. Notes,
10.375%, 4/1/11 $ 31,050
-------------------------------------------------------------------------------------
Miscellaneous Services 0.8%
B3 100 Concentra Operating Corp.,
Sr. Sub. Notes, Ser. B,
13.00%, 8/15/09 108,000
200 Fresenius Med. Care Cap. Trust,
Gtd. Notes,
7.875%, 2/1/08 198,000
Service Corp. International, Inc.,
Notes,
B1 175 6.30%, 3/15/20 162,750
B1 175 6.50%, 3/15/08 139,562
Sr. Notes,
B1 50 6.00%, 12/15/05 41,750
Ba3 150 Stena AB, (Sweden)
Sr. Notes,
8.75%, 6/15/07 134.250
B2 5 Sun World International, Inc.,
First Mtge. Notes, Ser. B,
11.25%, 4/15/04 4,625
----------------
788,937
-------------------------------------------------------------------------------------
Networking 0.1%
A3 50 Nortel Networks Ltd., Notes,
6.125%, 2/15/06 43,874
Caa1 155 Williams Communications Group,
Inc.,
Sr. Notes,
10.875%, 10/1/09 67,425
----------------
111,299
See Notes to Financial Statements 39
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Oil & Gas 0.5%
B2 $ 55 Comstock Resources, Inc.,
Sr. Sub. Notes,
11.25%, 5/1/07 $ 57,750
Ba2 255 Eott Energy Partners LP, Sr.
Notes,
11.00%, 10/1/09 274,125
B2 15 Houston Exploration Co., Sr. Sub.
Notes,
8.625%, 1/1/08 14,850
Ba2 25 Leviathan Gas Pipeline LP,
Sr. Sub. Notes,
10.375%, 6/1/09 26,625
B1 55 Parker Drilling Co., Sr. Notes,
Ser. D,
9.75%, 11/15/06 55,000
B2 40 Swift Energy Co., Sr. Sub. Notes,
10.25%, 8/1/09 42,350
----------------
470,700
-------------------------------------------------------------------------------------
Paper & Packaging 0.3%
Ba1 45 Caraustar Industries, Inc.,
Sr. Sub. Notes,
9.875%, 4/1/11 44,663
Doman Industries Ltd. (Canada),
Sr. Notes,
B1 35 8.75%, 3/15/04 21,000
Sr. Notes, Ser. B
B1 20 9.25%, 11/15/07 11,000
Sec'd. Notes,
B3 20 12.00%, 7/1/04 20,300
B3 50 Riverwood International Corp.,
Sr. Notes,
10.625%, 8/1/07 51,500
B1 100 Silgan Holdings, Inc., Sr. Sub.
Deb.,
9.00%, 6/1/09 100,500
----------------
248,963
40 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Pharmaceuticals 0.1%
B2 $ 50 Bio Rad Labs, Inc., Sr. Sub.
Notes,
11.625%, 2/15/07 $ 54,500
-------------------------------------------------------------------------------------
Publishing 0.2%
B2 250 Mail-Well I Corp., Sr. Sub. Notes,
8.75%, 12/15/08 205,000
-------------------------------------------------------------------------------------
Real Estate 0.4%
B2 50 Blum CB Corp., Sr. Sub. Notes,
11.25%, 6/15/11 48,500
Ba2 185 HMH Properties, Inc., Sr. Notes,
Ser. B,
7.875%, 8/1/08 177,138
B1 100 Intrawest Corp., Sr. Notes,
10.50%, 2/1/10 103,000
----------------
328,638
-------------------------------------------------------------------------------------
Recreation
B3 35 Bally's Total Fitness Holdings,
Ser. D,
Sr. Sub. Notes,
9.875%, 10/15/07 35,175
-------------------------------------------------------------------------------------
Restaurants 0.8%
B2 60 Carrols Corp., Sr. Sub. Notes,
9.50%, 12/1/08 53,400
Ba2 350 Felcor Suites LP, Gtd. Sr. Notes,
7.375%, 10/1/04 343,777
Ba3 25 Sbarro, Inc., Sr. Notes,
11.00%, 9/15/09 25,594
Ba1 350 Tricon Global Restaurants, Inc.,
Sr. Notes,
8.875%, 4/15/11 360,500
----------------
783,271
See Notes to Financial Statements 41
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Retail 0.7%
Dillards, Inc., Notes,
Ba1 $ 50 6.125%, 11/1/03 $ 46,703
Ba1 75 6.43%, 8/1/04 70,170
Baa3 75 Kmart Corp., Notes,
9.875%, 6/15/08 75,303
Rite Aid Corp.,
Sr. Notes,
B1 100 11.25%, 7/1/08 103,000
Debs.,
B1 25 6.875%, 8/15/13 18,469
B1 25 7.70%, 2/15/27 18,437
Notes,
B2 50 6.00%, 12/15/05 40,750
Ba1 150 Saks, Inc., Notes,
7.375%, 2/15/19 109,500
Ba2 150 Winn Dixie Stores, Inc.,
Sr. Notes,
8.875%, 4/1/08 153,000
----------------
635,332
-------------------------------------------------------------------------------------
Schools 0.1%
B3 80 Kindercare Learning Center, Inc.,
Sr. Sub. Notes,
9.50%, 2/15/09 79,400
-------------------------------------------------------------------------------------
Semiconductors 0.1%
B2 45 Fairchild Semiconductor Corp.,
Sr. Sub. Notes,
10.50%, 2/1/09 45,225
-------------------------------------------------------------------------------------
Sovereign Bonds 0.2%
Baa2 200 State of Qatar, Sr. Notes,
9.75%, 6/15/30 230,000
42 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Steel
Ba2 $ 5 AK Steel Corp., Sr. Notes,
9.125%, 12/15/06 $ 5,150
Caa1 10 Lukens, Inc., Notes,
7.625%, 8/1/04 2,700
Ba2 25 United States Steel LLC,
Sr. Notes,
10.75%, 8/1/08 25,125
----------------
32,975
-------------------------------------------------------------------------------------
Telecommunications 2.0%
B3 45 American Tower Corp.,
Sr. Notes,
9.375%, 2/1/09 41,625
B3 10 Dobson Communications Corp.,
Sr. Notes,
10.875%, 7/1/10 10,250
B3 40 Fairpoint Communications, Inc.,
Sr. Sub. Notes,
12.50%, 5/1/10 35,200
Ba2 250 Global Crossing Holdings Ltd.,
Sr. Notes,
9.50%, 11/15/09 187,500
Level 3 Communications, Inc.,
Sr. Disc. Notes,
Zero Coupon, (until 12/1/03),
B3 30 10.50%, 12/1/08 9,900
Zero Coupon (until 3/15/05),
B3 250 12.875%, 3/1/10 70,000
Sr. Notes,
Caa1 55 11.00%, 3/15/08 31,075
Caa1 145 McleodUSA, Inc., Sr. Notes,
11.375%, 1/1/09 84,100
See Notes to Financial Statements 43
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
B3 $ 90 Microcell Telecommunications,
Sr. Disc. Notes,
Zero Coupon (until 6/1/04),
12.00%, 6/1/09 $ 37,800
B3 40 Millicom International Cellular,
Sr. Disc. Sub. Notes,
13.50%, 6/1/06 34,800
B2 100 Netia Holdings BV, (Poland), Ser.
B,
Gtd. Sr. Disc. Notes,
Zero Coupon (until 11/1/01),
11.00%, 11/1/07 25,000
Nextel Communications, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 9/15/02),
B1 230 10.65%, 9/15/07 174,800
Sr. Notes,
B1 185 9.375%, 11/15/09 152,394
B2 250 NTL Communications Corp.,
Sr. Notes,
Zero Coupon, (until 10/1/03),
12.375%, 10/1/08 110,000
Baa3 35 Rogers Wireless, Inc.,
Sr. Sec'd. Notes,
9.625%, 5/1/11 35,437
B3 35 Spectrasite Holdings, Inc., Sr.
Disc. Notes, Zero Coupon (until
3/15/05),
12.875%, 3/15/10 12,250
B3 75 Star Choice Communications,
Sr. Sec'd. Notes,
13.00%, 12/15/05 78,750
Tritel PCS, Inc., Sr. Sub. Disc.
Notes,
Zero Coupon (until 3/15/05),
B3 55 12.75%, 5/15/09 35,200
B3 50 10.375%, 1/15/11 46,500
44 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
A2 $ 300 Vodafone AirTouch PLC, FRN,
3.987%, 12/19/01 $ 300,063
Voicestream Wireless Corp., Sr.
Disc. Notes, Zero Coupon (until
11/15/04),
Baa1 120 11.875%, 11/15/09 99,900
Sr. Notes,
Baa1 80 10.375%, 11/15/09 91,300
----------------
1,703,844
-------------------------------------------------------------------------------------
Utilities 1.9%
AES Corp., Sr. Notes,
Ba1 150 9.50%, 6/1/09 153,000
Ba1 100 8.75%, 12/15/02 101,250
Aaa 1,000 Boston Massachusetts Water and
Sewer, Ser. D, Sr. Notes,
Aaa 5.00%, 11/1/28 982,830
A3 400 Commonwealth Edison Co.,
First Mtge.,
7.375%, 9/15/02 412,816
B1 15 El Paso Energy Partners LP,
Sr. Sub. Notes,
8.50%, 6/1/11 15,000
Baa3 50 PSEG Energy Holdings,
10.00%, 10/1/09 55,455
Baa2 100 Reliant Energy Mid Atlantic,
Ser. C,
9.681%, 7/2/26 112,449
----------------
1,832,800
-------------------------------------------------------------------------------------
Waste Management 0.3%
Allied Waste of North America,
Inc.,
Sr. Notes,
Ba3 50 7.375%, 1/1/04 49,375
Ba3 150 7.875%, 1/1/09 147,750
Sr. Sub. Notes,
B2 75 10.00%, 8/1/09 77,625
----------------
274,750
----------------
See Notes to Financial Statements 45
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Total corporate bonds
(cost $24,942,477) $ 24,276,494
----------------
CONVERTIBLE BONDS 0.5%
-------------------------------------------------------------------------------------
Financial Services
A3 Euro 500 Hellenic Finance Corp.,
2.00%, 7/15/03
(cost $526,875) 435,661
----------------
MORTGAGE-RELATED SECURITIES 4.9%
Aaa US 600 Bear Stearns Mortgage Securities,
Inc.,
Ser. 1997-7, Class A-9,
7.00%, 2/25/28 606,186
Aaa 490 Credit Suisse First Boston
Mortgage,
Ser. 1999-WM1 Class M1,
6.6052%, 10/19/39 492,978
AAA(Pound) 262 GE Capital Mortgage Services,
Inc.,
Ser. 1999-15, Class 16,
6.75%, 8/25/29 263,549
Baa2 300 Korea Asset Funding Ltd.,
Ser. 2000-1A, Class 1,
7.27%, 2/10/09 307,076
Aaa 500 Mellon Residential Funding Corp.,
Ser. 1999, Class A-3,
6.58%, 7/25/29 536,156
Aaa 500 Nationslink Funding Corp.,
Ser. 1999-Sl, Class A-3,
6.297%, 11/10/02 514,672
PNC Mortgage Securities Corp.,
Ser. 1995-2, Class A-4,
Aa1 276 6.75%, 6/25/16 278,786
Ser. 1999, Class A-3,
AAA(Pound) 496 7.25%, 10/25/29 515,754
Ser. 1999-8, Class I A-5,
AAA(Pound) 415 6.75%, 8/25/29 418,934
46 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
--------------------------------------------------------------------------------------------
Aaa $ 756 Residential Funding Mortgage,
Inc.,
Ser. 1997 S-19, Class A-3,
6.50%, 12/25/12 $ 759,629
----------------
Total mortgage-related securities
(cost $4,539,464) 4,693,720
----------------
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES 4.9%
Government of Germany,
EURO 2,300 6.00%, 7/4/07 2,161,643
2,300 5.25%, 1/4/08 2,073,620
20 6.25%, 1/4/24 19,143
170 6.50%, 7/4/27 168,386
200 6.25%, 1/4/30 193,897
----------------
Total foreign government securities
(cost $4,449,306) 4,616,689
----------------
MUNICIPLE BONDS, U.S. GOVERNMENT AGENCY AND SECURITIES 36.0%
$ 400 Chicago Illinois
Project & Refunding Series A
5.00%, 1/1/41(c) 381,808
Federal Home Loan Mortgage Corp.,
1,251 10.00%, 5/15/20(c) 1,320,077
84 7.66%, 8/1/23(c) 85,171
Federal National Mortgage Association,
415 6.50%, 5/1/06(c) 423,784
567 5.00%, 4/1/14(c) 548,937
4,000 7.50%, TBA(a) 4,116,240
2,000 7.00%, TBA(a) 2,035,000
3,500 6.00%, TBA(a) 3,423,455
400 6.25%, TBA(a) 403,961
Government National Mortgage Association,
67 7.75%, 9/20/22(c) 68,509
1,000 8.00%, TBA(a) 1,043,130
1,000 7.50%, TBA(a) 1,030,781
See Notes to Financial Statements 47
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
$ 468 7.50%, 12/15/28(c) $ 484,353
446 6.00%, 1/15/29(c) 440,838
522 6.00%, 2/15/29(c) 515,657
617 6.00%, 5/15/29(c) 609,334
559 6.00%, 8/15/29(c) 552,744
541 8.50%, 2/20/30(c) 566,191
590 8.50%, 5/20/30(c) 617,141
1,645 8.50%, 6/15/30(c) 1,726,450
1,246 8.50%, 8/15/30(c) 1,307,173
996 8.50%, 9/15/30(c) 1,045,576
126 8.50%, 10/15/30(c) 132,598
155 8.50%, 1/15/31(c) 163,034
986 United States Department Veteran Affairs,
6.83721%, 1/15/30(c) 1,017,351
United States Treasury Bonds,
500 6.25%, 8/15/23(c) 539,375
100 5.25%, 11/15/28(c) 94,828
United States Treasury Bond, (Principal Only)
1,500 Zero Coupon, 2/15/15(c) 701,325
1,000 Zero Coupon, 11/15/18(c) 368,110
250 Zero Coupon, 2/15/21(c) 80,190
United States Treasury Note,
1,775 3.625%, 7/15/02(c) 1,810,809
200 6.75%, 5/15/05(c) 216,156
900 7.00%, 7/15/06(c) 994,077
1,459 3.375%, 1/15/07(c) 1,484,149
500 6.125%, 8/15/07(c) 535,860
1,842 3.875%, 1/15/09(c) 1,916,558
1,300 6.50%, 2/15/10(c) 1,433,653
----------------
Total Municiple Bonds, U.S. Government Agency and
Securities
(cost $33,666,187) 34,234,383
----------------
Total long-term investments
(cost $103,657,668) 104,347,551
----------------
48 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Principal
Amount
(000) Description Value (Note 1)
-----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 7.5%
-------------------------------------------------------------------------------------
Repurchase Agreement
$ 7,151 Joint Repurchase Agreement Account,
3.87%, 8/1/01 (cost $7,151,000; Note 5) $ 7,151,000
----------------
OUTSTANDING CALL OPTION PURCHASED 1.3%
Description Contracts Value (Note 1)
--------------------------------------------------------------------------------------
U.S. Treasury Bonds
August 01 @ $93.81 9,000 98,667
October 01 @ $93 100,000 1,139,900
----------------
(cost $1,042,094) 1,238,567
----------------
Total Investments 118.7%
(cost $111,849,714; Note 4) 112,737,118
Liabilities in excess of other
assets (18.7)% (17,741,891)
----------------
Net Assets 100% $ 94,995,227
----------------
----------------
------------------------------
(a) Non-income producing security.
(b) Represents issuer in default on interest payments, non income producing
security.
(c) All or a portion of security segregated as collateral for TBA.
Pound S&P rating.
AB--Aktiebolag (Swedish stock company).
ADR--American Depository Receipt.
BV--Beloten Vennootschap (Dutch Company).
FHA--Federal Housing Administration.
FRN--Floating Rate Note.
LLC--Limited Liability Company.
LP--Limited Partnership.
MTN--Medium-Term Note.
N.V.--Naamloze Vennootschaap (Dutch Corporation).
PLC--Public Limited Company.
REIT--Real Estate Investment Trust.
SA--Societe Anonyme (French Corporation).
TBA--Securities purchased on a forward commitment basis.
The Fund's current Prospectus contains a description of Moody's and Standard &
Poor's ratings.
See Notes to Financial Statements 49
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Statement of Assets and Liabilities
July 31, 2001
---------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $111,849,714) $ 112,737,118
Foreign currency, at value (cost $10,125) 9,528
Cash 4,619
Interest and dividends receivable 817,783
Receivable for investments sold 483,152
Receivable for Fund shares sold 335,226
Unrealized appreciation on forward currency contracts 13,645
-------------
Total assets 114,401,071
-------------
LIABILITIES
Payable for investments purchased 18,611,864
Payable for Fund shares reacquired 554,546
Accrued expenses and other liabilities 112,489
Distribution fee payable 67,291
Management fee payable 59,440
Foreign withholding tax payable 214
-------------
Total liabilities 19,405,844
-------------
NET ASSETS $ 94,995,227
-------------
-------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 9,563
Paid-in capital in excess of par 95,177,145
-------------
95,186,708
Distribution in excess of net investment income (85,176)
Accumulated net realized loss on investments (888,705)
Net unrealized appreciation on investments and foreign
currency 782,400
-------------
Net assets, July 31, 2001 $ 94,995,227
-------------
-------------
50 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Statement of Assets and Liabilities Cont'd.
July 31, 2001
---------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($16,759,793
/ 1,683,896 shares of beneficial interest issued and
outstanding) $9.95
Maximum sales charge (5% of offering price) .52
-------------
Maximum offering price to public $10.47
-------------
-------------
Class B:
Net asset value, offering price and redemption price per
share ($62,177,404 / 6,262,365 shares of beneficial
interest issued and outstanding) $9.93
-------------
-------------
Class C:
Net asset value and redemption price per share ($14,626,444
/ 1,473,163 shares of beneficial interest issued and
outstanding) $9.93
Sales charge (1% of offering price) .10
-------------
Offering price to public $10.03
-------------
-------------
Class Z:
Net asset value, offering price and redemption price per
share ($1,431,586 / 143,867 shares of beneficial interest
issued and outstanding) $9.95
-------------
-------------
See Notes to Financial Statements 51
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Statement of Operations
Year
Ended
July 31, 2001
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 3,995,033
Dividends (net of foreign withholding taxes of $1,976) 369,629
-------------
Total income 4,364,662
-------------
Expenses
Management fee 615,975
Distribution fee--Class A 39,961
Distribution fee--Class B 524,334
Distribution fee--Class C 127,635
Custodian's fees and expenses 350,000
Transfer agent's fees and expenses 88,000
Reports to shareholders 66,000
Registration fees 40,000
Audit fee 25,000
Trustees' fees and expenses 13,000
Legal fees 10,000
Miscellaneous 902
-------------
Total expenses 1,900,807
-------------
Net investment income 2,463,855
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (859,998)
Foreign currency transactions 152,630
Swaps (59,786)
-------------
(767,154)
-------------
Net change in unrealized appreciation (depreciation) on:
Investments (1,356,689)
Foreign currencies 95,105
Swaps 11,016
-------------
(1,250,568)
-------------
Net gain (loss) on investments (2,017,722)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 446,133
-------------
-------------
52 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Statement of Changes in Net Assets
Year Ended July 31,
------------------------------------
2001 2000
-------------------------------------------------------------------------------------
INCREASE (DECREASE)
IN NET ASSETS
Operations
Net investment income $ 2,463,855 $ 2,170,624
Net realized gain (loss) on investment and
foreign currency transactions (767,154) 6,336,720
Net change in unrealized
appreciation/(depreciation) of
investments and foreign currencies (1,250,568) (211,361)
---------------- ----------------
Net increase in net assets resulting from
operations 446,133 8,295,983
---------------- ----------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (576,487) (419,711)
Class B (1,619,314) (1,002,217)
Class C (390,857) (337,721)
Class Z (42,134) (348,570)
---------------- ----------------
(2,628,792) (2,108,219)
---------------- ----------------
Distributions from net realized gains on
investment transactions
Class A (1,148,585) (113,245)
Class B (3,624,125) (387,774)
Class C (860,929) (152,973)
Class Z (57,520) (219,765)
---------------- ----------------
(5,691,159) (873,757)
---------------- ----------------
Fund share transactions (net of share
conversions)
(Note 6)
Net proceeds from shares sold 41,841,390 35,877,305
Net asset value of shares issued in
reinvestment of dividends and
distributions 7,966,952 2,861,038
Cost of shares reacquired (17,063,782) (48,138,088)
---------------- ----------------
Net increase (decrease) in net assets from
Fund share transactions 32,744,560 (9,399,745)
---------------- ----------------
Total increase/(decrease) 24,870,742 (4,085,738)
NET ASSETS
Beginning of year 70,124,485 74,210,223
---------------- ----------------
End of year(a) $ 94,995,227 $ 70,124,485
---------------- ----------------
---------------- ----------------
------------------------------
(a) Includes undistributed net investment
income of $ -- $ 392,105
---------------- ----------------
See Notes to Financial Statements 53
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements
Strategic Partners Asset Allocation Funds (the 'Trust') formerly
Prudential Diversified Funds, is registered under the Investment Company Act of
1940 as an open-end, diversified management investment company presently
consisting of three portfolios: Strategic Partners Conservative Growth Fund (the
'Fund'), Strategic Partners Moderate Growth Fund and Strategic Partners High
Growth Fund. These financial statements relate only to Strategic Partners
Conservative Growth Fund. The financial statements of the other portfolios are
not presented herein. The Trust was organized as a business trust in Delaware on
July 29, 1998.
Jennison Associates LLC ('Jennison'), Prudential Investment Management,
Inc. ('PIM'), formerly known as Prudential Investment Corporation, Pacific
Investment Management Company, Franklin Advisers, Inc. and the Dreyfus
Corporation are the Fund's 'Advisers'.
The investment objective of the Fund is to provide current income and a
reasonable level of capital appreciation. The Fund seeks to achieve its
investment objective by investing in a diversified portfolio of debt obligations
and equity securities. The ability of the issuers of the debt securities held by
the Fund to meet their obligations may be affected by economic developments in a
specific industry or country.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements.
Securities Valuation: Securities for which the primary market is on an
exchange and NASDAQ National Market Securities are valued at the last sales
price on such exchange on the day of valuation, or, if there was no sale on such
day, at the mean between the last bid and asked prices on such day or at the bid
price on such day in the absence of an asked price. Securities that are actively
traded in the over-the-counter market, including listed securities for which the
primary market is believed by Prudential Investments Fund Management LLC ('PIFM'
or the 'Manager'), in consultation with the Adviser, to be over-the-counter, are
valued by an independent pricing agent or principal market maker. U.S.
government securities for which market quotations are available shall be valued
at a price provided by an independent pricing agent or broker-dealer. Privately
placed securities including equity securities for which market prices may be
obtained from primary dealers shall be valued at the bid prices provided by such
primary dealers. Securities for which market quotations are not readily
available may be valued using the last available market quotation for a period
not to exceed five days, provided the Manager and Adviser feel this is
representative of market value; after that period, such securities are valued in
good faith under procedures adopted by the Trustees.
54
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.
All securities are valued as of 4:15 p.m., New York time.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and liabilities -
at the closing daily rates of exchange.
(ii) purchases and sales of investment securities, income and expenses -
at the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the period. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the fiscal period. Accordingly, realized foreign currency gains
(losses) are included in the reported net realized gains (losses) on investment
transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from the holdings of foreign currencies,
currency gains (losses) realized between the trade and settlement dates on
security transactions, and the difference between the amounts of dividends,
interest and foreign taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Repurchase Agreements: In connection with transactions in repurchase
agreements with U.S. financial institutions, it is the Fund's policy that its
custodian or designated subcustodians, as the case may be under triparty
repurchase agreements, take possession of the underlying securities, the value
of which exceeds the principal amount of the repurchase transaction, including
accrued interest. If the seller defaults and the value of the collateral
declines or if bankruptcy proceedings are
55
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
Forward Currency Contracts: A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
Swaps: The Fund may enter into swap agreements. A swap agreement is an
agreement between two parties to exchange a series of cash flows at specified
intervals. Based on a notional amount, each party pays an interest rate or the
change in the value of a security. Dividends and interest on the securities in
the swap are included in the value of the exchange. The swaps are valued daily
at current market value and any unrealized gain or loss is included in the net
unrealized appreciation or depreciation on investments. Gain or loss is realized
on the termination date of the swap and is equal to the difference between the
Fund's basis in the swap and the proceeds of the closing transaction, including
fees. During the period that the swap agreement is open, the Fund may be subject
to risk from the potential inability of the counterparty to meet the terms of
the agreement.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains (losses) on sales of
investment and currency transactions are calculated on the identified cost
basis. Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis. The Fund amortizes premiums and discounts on
portfolio securities as adjustments to interest income. Expenses are recorded on
the accrual basis which may require the use of certain estimates by management.
Net investment income (loss) (other than distribution fees) and unrealized
and realized gains (losses) are allocated daily to each class of shares based
upon the relative proportion of net assets of each class at the beginning of the
day.
56
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income quarterly, and distributions of net realized capital and
currency gains, if any, annually. Dividends and distributions are recorded on
the ex-dividend date.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Options: The Fund may either purchase or write options in order to
hedge against adverse market movements or fluctuations in value caused by
changes in prevailing interest rates or foreign currency exchange rates with
respect to securities or currencies which the Fund currently owns or intends to
purchase. When the Fund writes an option, it receives a premium and an amount
equal to that premium is recorded as a liability. When the Fund purchases an
option, it pays a premium and an amount equal to that premium is recorded as an
asset. The asset or liability is adjusted daily to reflect the current market
value of the option. If an option expires unexercised, the Fund realizes a gain
(loss) to the extent of the premium received or paid. If an option is exercised,
the premium received or paid is recorded as an adjustment to the proceeds from
the sale or the cost basis of the purchase in determining whether the Fund has
realized a gain (loss).
The difference between the premium and the amount received or paid on
effecting a closing purchase or sale transaction is also treated as a realized
gain or loss. Gain or loss on purchased options is included in net realized gain
(loss) on investment transactions. Gain or loss on written options is presented
separately as net realized gain (loss) on written option transactions.
The Fund, as writer of an option, has no control over whether the
underlying securities or currencies may be sold (called) or purchased (put). As
a result, the Fund bears the market risk of an unfavorable change in the price
of the security or currency underlying the written option. The Fund, as
purchaser of an option, bears the risk of the potential inability of the
counterparties to meet the terms of their contracts.
Taxes: For federal income tax purposes, each Fund in the Trust is
treated as a separate taxpaying entity. It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income and capital gains, if
any, to shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified
57
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
Public Accountants' Statement of Position 93-2: Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gains, and Return of Capital
Distributions by Investment Companies. The effect of applying this statement was
to decrease undistributed net investment income by $312,344, increase
accumulated net realized loss on investments by $368,335 and increase paid-in
capital in excess of par by $680,679 due to realized and recognized currency
gains during the period and the Fund treating redemptions as distributions for
federal income tax purposes during the year ended July 31, 2001. Net investment
income, net realized gains and net assets were not affected by this change.
Note 2. Agreements
The Fund has a management agreement with PIFM. Pursuant to this agreement, PIFM
manages the investment operations of the Fund, administers the Fund's affairs
and supervises the Advisers' performance of all investment advisory services.
PIFM pays for the costs pursuant to the advisory agreements, the cost of
compensation of officers of the Fund, occupancy and certain clerical and
accounting costs of the Fund. The Fund bears all other costs and expenses. The
management fee paid to PIFM is computed daily and payable monthly at an annual
rate of .75% of the average daily net assets of the Fund. PIFM, in turn, pays
the Advisers' fees, based on the average daily net assets of the Fund segments
they manage.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution (the 'Class A, B and C Plans') regardless of
expenses actually incurred by PIMS. The distribution fees are accrued daily and
payable monthly. No distribution or service fees are paid to PIMS as distributor
for Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, B and C shares, respectively, for the year ended July 31,
2001.
PIMS has advised the Fund that it has received approximately $85,100 and
$47,400 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended July 31, 2001.
PIMS has advised the Fund that for the year ended July 31, 2001, it has
received approximately $135,900 and $7,000 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
58
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
Jennison, PIMS, PIM and PIFM are indirect, wholly owned subsidiaries of
The Prudential Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $500 million.
Interest on any such borrowings will be at market rates. The Funds pay a
commitment fee of .080 of 1% of the unused portion of the credit facility. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
The expiration date of the SCA is March 7, 2002. Prior to March 9, 2001, the
maximum commitment was $1 billion and the commitment fee was .080 of 1% of the
unused portion of the credit facility. The purpose of the agreement is to serve
as an alternative source of funding for capital share redemptions. Effective
September 14, 2001, the commitment under the SCA was increased to $930 million
through December 31, 2001. Effective January 1, 2002, the commitment will be
reduced to $500 million. All other terms and conditions are unchanged. The Fund
did not borrow any amounts pursuant to the SCA during the year ended July 31,
2001.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PIFM and an
indirect, wholly owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the year ended July 31, 2001, the Fund incurred fees of
approximately $74,000 for the services of PMFS. As of July 31, 2001
approximately $7,000 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to nonaffiliates.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments,
for the year ended July 31, 2001 aggregated $339,032,765 and $305,796,629,
respectively.
At July 31, 2001, the Fund had outstanding forward currency contracts to
buy foreign currencies as follows:
Value at Value at
Foreign Currency July 31, Settlement Date
Purchase Contract 2001 Payable Appreciation
----------------------------------------- ----------- --------------- --------------
EUR, 499,000
expiring 8/21/01 $ 436,089 $ 422,444 $ 13,645
----------- --------------- --------------
----------- --------------- --------------
59
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
The United States federal income tax basis of the Fund's investments, at
July 31, 2001 was $112,592,327 and accordingly, net unrealized appreciation on
investments for federal income tax purposes was $144,791 (gross unrealized
appreciation--$5,079,748, gross unrealized depreciation--$4,934,957).
For federal income tax purposes, the Fund has a capital loss carryforward
as of July 31, 2001 of approximately $17,574 which expires in 2009. In addition,
the Fund will elect to treat net capital losses of approximately $128,518 and
net foreign currency losses of $71,317 incurred in the nine month period ended
July 31, 2001 as having been incurred in the next fiscal year. Accordingly, no
capital gains distribution is expected to be paid to shareholders until net
gains have been realized in excess of such amounts.
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of July 31, 2001, the Fund
had a 1.3% undivided interest in the joint account. The undivided interest for
the Fund represents $7,151,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Deutsche Bank Alex. Brown, 3.87%, in the principal amount of $65,821,000,
repurchase price $65,828,075, due 8/1/01. The value of the collateral including
accrued interest was $67,137,420.
Greenwich Capital Markets, Inc., 3.87%, in the principal amount of
$180,000,000, repurchase price $180,019,350, due 8/1/01. The value of the
collateral including accrued interest was $183,603,519.
Morgan Stanley Co., Inc., 3.87%, in the principal amount of $180,000,000,
repurchase price $180,019,350, due 8/1/01. The value of the collateral including
accrued interest was $183,603,260.
State Street Bank & Trust Co., 3.87%, in the principal amount of
$145,661,000, repurchase price $145,676,658, due 8/1/01. The value of the
collateral including accrued interest was $148,578,786.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a
60
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
contingent deferred sales charge of 1% during the first 18 months. Class B
shares automatically convert to Class A shares on a quarterly basis
approximately seven years after purchase. A special exchange privilege is also
available for shareholders who qualified to purchase Class A shares at net asset
value. Class Z shares are not subject to any sales or redemption charge and are
offered exclusively for sale to a limited group of investors.
The Fund has authorized an unlimited number of shares of beneficial
interest at $.001 par value per share.
Transactions in shares of beneficial interest were as follows:
Class A Shares Amount
------------------------------------------------------ ---------- ------------
Year ended July 31, 2001:
Shares sold 526,047 $ 5,460,468
Shares issued in reinvestment of dividends and
distributions 167,430 1,659,110
Shares reacquired (459,254) (4,715,631)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 234,223 2,403,947
Shares issued upon conversion from Class B 136,971 1,400,032
---------- ------------
Net increase in shares outstanding 371,194 $ 3,803,979
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 1,090,045 $ 11,650,462
Shares issued in reinvestment of dividends and
distributions 47,988 515,634
Shares reacquired (812,925) (8,741,195)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 325,108 3,424,901
Shares issued upon conversion from Class B 109,810 1,201,204
---------- ------------
Net increase in shares outstanding 434,918 $ 4,626,105
---------- ------------
---------- ------------
Class B
------------------------------------------------------
Year ended July 31, 2001:
Shares sold 2,768,777 $ 28,390,731
Shares issued in reinvestment of dividends and
distributions 510,312 5,039,906
Shares reacquired (845,336) (8,664,381)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 2,433,753 24,766,256
Shares issued upon conversion into Class A (137,334) (1,400,032)
---------- ------------
Net increase (decrease) in shares outstanding 2,296,419 $ 23,366,224
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 1,916,483 $ 20,536,163
Shares issued in reinvestment of dividends and
distributions 123,462 1,322,329
Shares reacquired (885,951) (9,503,752)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 1,153,994 12,354,740
Shares issued upon conversion into Class A (110,000) (1,201,204)
---------- ------------
Net increase (decrease) in shares outstanding 1,043,994 $ 11,153,536
---------- ------------
---------- ------------
61
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Notes to Financial Statements Cont'd.
Class C Shares Amount
------------------------------------------------------ ---------- ------------
Year ended July 31, 2001:
Shares sold 669,736 $ 6,832,248
Shares issued in reinvestment of dividends and
distributions 118,345 1,169,251
Shares reacquired (337,274) (3,462,746)
---------- ------------
Net increase (decrease) in shares outstanding 450,807 $ 4,538,753
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 304,558 $ 3,288,339
Shares issued in reinvestment of dividends and
distributions 42,720 455,132
Shares reacquired (681,306) (7,334,166)
---------- ------------
Net increase (decrease) in shares outstanding (334,028) $ (3,590,695)
---------- ------------
---------- ------------
Class Z
------------------------------------------------------
Year ended July 31, 2001:
Shares sold 113,224 $ 1,157,943
Shares issued in reinvestment of dividends and
distributions 9,991 98,685
Shares reacquired (22,001) (221,024)
---------- ------------
Net increase (decrease) in shares outstanding 101,214 $ 1,035,604
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 37,256 $ 402,341
Shares issued in reinvestment of dividends and
distributions 54,363 567,943
Shares reacquired (2,059,454) (22,558,975)
---------- ------------
Net increase (decrease) in shares outstanding (1,967,835) $(21,588,691)
---------- ------------
---------- ------------
62
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Financial Highlights
Class A
--------------------------------------------------------
Year Ended July 31, November 18, 1998(a)
------------------------------- Through
2001 2000 July 31, 1999
-------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of period $ 11.06 $ 10.36 $10.00
------------- ------------- -------
Income from investment operations:
Net investment income .37 .37 .19
Net realized and unrealized gain
(loss) on investments and foreign
currencies (.30) .82 .35
------------- ------------- -------
Total from investment
operations .07 1.19 .54
------------- ------------- -------
Less distributions
Dividends from net investment income (.36) (.37) (.18)
Distributions from net realized
capital gains (.82) (.12) --
------------- ------------- -------
Total dividends and
distributions (1.18) (.49) (.18)
------------- ------------- -------
Net asset value, end of period $ 9.95 $ 11.06 $10.36
------------- ------------- -------
------------- ------------- -------
TOTAL RETURN(b) 1.00% 11.73% 5.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $16,760 $14,514 $9,097
Average net assets (000) $15,985 $12,535 $6,157
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.72% 1.73% 1.92%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.47% 1.48% 1.67%(c)
Net investment income 3.61% 3.46% 2.69%(c)
For Class A, B, C and Z shares:
Portfolio turnover rate 334% 244% 180%
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
return for periods of less than a full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
See Notes to Financial Statements 63
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Financial Highlights Cont'd.
Class B
--------------------------------------------------------
Year Ended July 31, November 18, 1998(a)
------------------------------- Through
2001 2000 July 31, 1999
-------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of period $ 11.05 $ 10.35 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income .29 .29 .14
Net realized and unrealized gain
(loss) on investments and foreign
currencies (.29) .82 .34
------------- ------------- --------
Total from investment
operations -- 1.11 .48
------------- ------------- --------
Less distributions
Dividends from net investment income (.30) (.29) (.13)
Distributions from net realized
capital gains (.82) (.12) --
------------- ------------- --------
Total dividends and
distributions (1.12) (.41) (.13)
------------- ------------- --------
Net asset value, end of period $ 9.93 $ 11.05 $ 10.35
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) .34% 10.89% 4.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $62,177 $43,838 $ 30,235
Average net assets (000) $52,433 $36,574 $ 19,308
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.47% 2.48% 2.67%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.47% 1.48% 1.67%(c)
Net investment income 2.84% 2.70% 1.94%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
return for periods of less than a full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
64 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Financial Highlights Cont'd.
Class C
--------------------------------------------------------
Year Ended July 31, November 18, 1998(a)
------------------------------- Through
2001 2000 July 31, 1999
-------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of period $ 11.05 $ 10.35 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income .29 .28 .14
Net realized and unrealized gain
(loss) on investments and foreign
currencies (.29) .83 .34
------------- ------------- --------
Total from investment
operations -- 1.11 .48
------------- ------------- --------
Less distributions
Dividends from net investment income (.30) (.29) (.13)
Distributions from net realized
capital gains (.82) (.12) --
------------- ------------- --------
Total dividends and
distributions (1.12) (.41) (.13)
------------- ------------- --------
Net asset value, end of period $ 9.93 $ 11.05 $ 10.35
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) .34% 10.89% 4.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $14,626 $11,301 $ 14,035
Average net assets (000) $12,763 $12,954 $ 12,039
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.47% 2.48% 2.67%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.47% 1.48% 1.67%(c)
Net investment income 2.84% 2.63% 1.91%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
return for periods of less than a full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
See Notes to Financial Statements 65
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Financial Highlights Cont'd.
Class Z
--------------------------------------------------------
Year Ended July 31, November 18, 1998(a)
------------------------------- Through
2001 2000 July 31, 1999
-------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(d):
Net asset value, beginning of period $ 11.05 $ 10.37 $ 10.00
------------- ------------- --------
Income from investment operations:
Net investment income .38 .35 .21
Net realized and unrealized gain
(loss) on investments and foreign
currencies (.28) .85 .35
------------- ------------- --------
Total from investment
operations .10 1.20 .56
------------- ------------- --------
Less distributions
Dividends from net investment income (.38) (.40) (.19)
Distributions from net realized
capital gains (.82) (.12) --
------------- ------------- --------
Total dividends and
distributions (1.20) (.52) (.19)
------------- ------------- --------
Net asset value, end of period $ 9.95 $ 11.05 $ 10.37
------------- ------------- --------
------------- ------------- --------
TOTAL RETURN(b) 1.30% 11.84% 5.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 1,432 $ 471 $ 20,843
Average net assets (000) $ 949 $12,354 $ 38,460
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.47% 1.48% 1.67%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.47% 1.48% 1.67%(c)
Net investment income 3.78% 3.30% 2.89%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
return for periods of less than a full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
66 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Report of Independent Accountants
To the Shareholders and Trustees of
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Strategic Partners Asset Allocation
Funds--Strategic Partners Conservative Growth Fund, formerly Prudential
Diversified Funds--Prudential Diversified Conservative Growth Fund (the 'Fund')
at July 31, 2001, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
'financial statements') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at July 31, 2001 by correspondence with the custodian
and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
September 21, 2001
67
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Federal Income Tax Information
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end (July 31, 2001) as to the federal income tax
status of dividends paid by the Fund during such fiscal period. Accordingly, we
are advising you that during its fiscal period ended July 31, 2001, the Fund
paid dividends for Class A, Class B, Class C and Class Z shares totaling $.36,
$.30, $.30 and $.38 per share, of ordinary income, which is taxable as such,
respectively. In addition, the Fund paid to Class A, B, C and Z shares a
short-term capital gain distribution of $.29 and a long term capital gain
distribution of $.53 which are taxable as such. Further, we wish to advise you
that 9.76% of the ordinary income dividends paid in the fiscal year ended July
31, 2001 qualified for the corporate dividend received deduction available to
corporate taxpayers. The Fund utilized redemptions as distributions in the
amount of $.043 and $.042 of ordinary income and long-term capital gains,
respectively, for each class of shares.
In January 2002, you will be advised on IRS Form 1099 DIV or substitute
1099 DIV as to the federal tax status of the distributions received by you in
calendar year 2001.
IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders providing the mutual fund meets certain requirements
mandated by the respective state's taxing authorities. We are pleased to report
that 5.87% of the dividends paid by Strategic Partners Conservative Growth Fund
qualify for such deduction.
For more detailed information regarding your state and local taxes, you
should contact your tax advisor or the state/local taxing authorities.
68
Strategic Partners Asset Allocation Funds
The Strategic Partners Mutual Fund Family
Strategic Partners offers a variety of mutual
funds designed to meet your individual needs.
For information about these funds, contact
your financial professional or call us at
(800) 225-1852. Please read the applicable
prospectus carefully before you invest or send
money.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Strategic Partners Moderate Growth Fund
Strategic Partners High Growth Fund
Strategic Partners Style Specific Funds
Strategic Partners
Large Capitalization Growth Fund
Strategic Partners
Large Capitalization Value Fund
Strategic Partners
Small Capitalization Growth Fund
Strategic Partners
Small Capitalization Value Fund
Strategic Partners
International Equity Fund
Strategic Partners
Total Return Bond Fund
Strategic Partners Opportunity Funds
Strategic Partners Focused Growth Fund
Strategic Partners New Era Growth Fund
Strategic Partners Focused Value Fund
Special Money Market Fund, Inc.*
* This fund is not a direct purchase money fund
and is only an exchangeable money fund.
Strategic Partners Asset Allocation Funds
Getting the Most from your Mutual Fund
Some mutual fund shareholders won't ever read
this--they don't read annual and semiannual
reports. It's quite understandable. These
annual and semiannual reports are prepared to
comply with federal regulations, and are often
written in language that is difficult to
understand. So when most people run into those
particularly daunting sections of these
reports, they don't read them.
WE THINK THAT'S A MISTAKE
We've made some changes to our mutual funds
report to make it easier to understand and more
pleasant to read. We hope you'll find it
profitable to spend a few minutes familiarizing
yourself with your investment. Here's what
you'll find in the report:
PERFORMANCE AT A GLANCE
Since an investment's performance is often a
shareholder's primary concern, we present
performance information in two different
formats. You'll find it first on the
"Performance at a Glance" page where we compare
the Fund and the comparable average calculated
by Lipper Inc., a nationally recognized mutual
fund rating agency. We report both the
cumulative total returns and the average annual
total returns. The cumulative total return is
the total amount of income and appreciation the
Fund has achieved in various time periods. The
average annual total return is an annualized
representation of the Fund's performance. It
gives you an idea of how much the Fund has
earned in an average year for a given time
period. Under the performance box, you'll see
legends that explain the performance
information, whether fees and sales charges
have been included in the returns, and the
inception dates for the Fund's share classes.
See the performance comparison charts at the
back of the report for more performance
information. Please keep in mind that past
performance is not indicative of future
results.
www.strategicpartners.com (800) 225-1852
INVESTMENT ADVISER'S REPORT
The portfolio manager, who invests your money
for you, reports on successful--and not-so-successful--
strategies in this section of your report. Look
for recent purchases and sales here, as well as
information about the sectors the portfolio
manager favors, and any changes that are on the
drawing board.
PORTFOLIO OF INVESTMENTS
This is where the report begins to appear
technical, but it's really just a listing
of each security held at the end of the
reporting period, along with valuations and
other information. Please note that sometimes
we discuss a security in the "Investment
Adviser's Report" section that doesn't appear
in this listing, because it was sold before the
close of the reporting period.
STATEMENT OF ASSETS AND LIABILITIES
The balance sheet shows the assets (the value
of the Fund's holdings), liabilities (how
much the Fund owes), and net assets (the Fund's
equity or holdings after the Fund pays its
debts) as of the end of the reporting period.
It also shows how we calculate the net asset
value per share for each class of shares.
The net asset value is reduced by payment
of your dividend, capital gain, or other
distribution--but remember that the money
or new shares are being paid or issued to
you. The net asset value fluctuates
daily, along with the value of every
security in the portfolio.
STATEMENT OF OPERATIONS
This is the income statement, which details
income (mostly interest and dividends earned)
and expenses (including what you pay us to
manage your money). You'll also see capital
gains here--both realized and unrealized.
Strategic Partners Asset Allocation Funds
Getting the Most from your Mutual Fund
STATEMENT OF CHANGES IN NET ASSETS
This schedule shows how income and expenses
translate into changes in net assets.
The Fund is required to pay out the bulk
of its income to shareholders every year, and
this statement shows you how we do it (through
dividends and distributions) and how that
affects the net assets. This statement also
shows how money from investors flowed into
and out of the Fund.
NOTES TO FINANCIAL STATEMENTS
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The notes provide a brief history
and explanation of your Fund's objectives. In
addition, they outline how Strategic Partners
mutual funds prices securities. The notes also
explain who manages and distributes the Fund's
shares and, more important, how much they are paid for
doing so. Finally, the notes explain how many
shares are outstanding and the number issued
and redeemed over the period.
FINANCIAL HIGHLIGHTS
This information contains many elements from
prior pages, but on a per-share basis.
It is designed to help you understand how
the Fund performed, and to compare this year's
performance and expenses to those of prior
years.
INDEPENDENT ACCOUNTANT'S REPORT
Once a year, an independent accountant looks
over our books and certifies that the financial
statements are fairly presented in accordance
with generally accepted accounting principles.
TAX INFORMATION
This is information that we report annually
about how much of your total return is taxable.
Should you have any questions, you may want to
consult a tax adviser.
www.strategicpartners.com (800) 225-1852
PERFORMANCE COMPARISON
These charts are included in the annual report
and are required by the Securities Exchange
Commission. Performance is presented here as
the return on a hypothetical $10,000 investment
in the Fund since its inception or for 10 years
(whichever is shorter). To help you put that
return in context, we are required to include
the performance of an unmanaged, broad-based
securities index as well. The index does not
reflect the cost of buying the securities it
contains or the cost of managing a mutual fund.
Of course, the index holdings do not mirror
those of the Fund--the index is a broad-based
reference point commonly used by investors to
measure how well they are doing. A definition
of the selected index is also provided.
Investors cannot invest directly in an index.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Class A Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -4.05% N/A N/A 4.60%
Without Sales Charge 1.00% N/A N/A 6.61%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners
Conservative Growth Fund (Class A shares) with
a similar investment in the Standard & Poor's
500 Composite Stock Price Index (S&P 500 Index)
by portraying the initial account values at the
commencement of operations of Class A shares
(November 18, 1998) and the account values at the
end of the current fiscal year (July 31, 2001), as
measured on a quarterly basis. For purposes of
the graph, and unless otherwise indicated, it
has been assumed that (a) the maximum
applicable front-end sales charge was deducted
from the initial $10,000 investment in Class A
shares; (b) all recurring fees (including
management fees) were deducted; and (c) all
dividends and distributions were reinvested.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or
operating expenses of a mutual fund. The
securities that comprise the S&P 500 Index may
differ substantially from the securities in the Fund.
The S&P 500 Index is not the only index that
may be used to characterize performance of
balanced stock funds. Other indexes may portray
different comparative performance. Investors
cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -4.66% N/A N/A 4.82%
Without Sales Charge 0.34% N/A N/A 5.84%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners Conservative
Growth Fund (Class B shares) with a similar investment
in the Standard & Poor's 500 Composite Stock Price
Index (S&P 500 Index) by portraying the initial
account values at the commencement of
operations of Class B shares (November 18,
1998) and the account values at the end of the
current fiscal year (July 31, 2001), as
measured on a quarterly basis. For purposes
of the graph, and unless otherwise indicated,
it has been assumed that (a) the maximum
applicable contingent deferred sales charge was
deducted from the value of the investment in
Class B shares, assuming full redemption on
July 31, 2001; (b) all recurring fees
(including management fees) were deducted; and
(c) all dividends and distributions were
reinvested. Approximately seven years after
purchase, Class B shares will automatically
convert to Class A shares on a quarterly basis.
This conversion feature is not reflected in
the graph.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or
operating expenses of a mutual fund. The
securities that comprise the S&P 500 Index may
differ substantially from the securities in the
Fund. The S&P 500 Index is not the only index
that may be used to characterize performance of
balanced stock funds. Other indexes may portray
different comparative performance. Investors
cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Class C Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -1.66% N/A N/A 5.45%
Without Sales Charge 0.34% N/A N/A 5.84%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners
Conservative Growth Fund (Class C shares) with
a similar investment in the Standard & Poor's
500 Composite Stock Price Index (S&P 500 Index)
by portraying the initial account values at the
commencement of operations of Class C shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the
maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
Class C shares; (b) the maximum applicable
contingent deferred sales charge was deducted
from the value of the investment in Class C
shares, assuming full redemption on July 31,
2001; (c) all recurring fees (including
management fees) were deducted; and (d) all
dividends and distributions were reinvested.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not
include the effect of sales charges or
operating expenses of a mutual fund. The
securities that comprise the S&P 500 Index may
differ substantially from the securities in the
Fund. The S&P 500 Index is not the only index
that may be used to characterize performance of
balanced stock funds. Other indexes may portray
different comparative performance. Investors
cannot invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
1.30% N/A N/A 6.85%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The graph compares a $10,000
investment in the Strategic Partners
Conservative Growth Fund (Class Z shares) with
a similar investment in the Standard & Poor's
500 Composite Stock Price Index (S&P 500 Index)
by portraying the initial account values at the
commencement of operations of Class Z shares
(November 18, 1998) and the account values at
the end of the current fiscal year (July 31,
2001), as measured on a quarterly basis. For
purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) all
recurring fees (including management fees)
were deducted, and (b) all dividends and
distributions were reinvested. Class Z shares
are not subject to a sales charge or
distribution and service (12b-1) fees.
The S&P 500 Index is an unmanaged index of 500
stocks of large U.S. companies. It gives a
broad look at how stock prices have performed.
The S&P 500 Index total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise
the S&P 500 Index may differ substantially from the
securities in the Fund. The S&P 500 Index is
not the only index that may be used to
characterize performance of balanced stock
funds. Other indexes may portray different
comparative performance. Investors cannot
invest directly in an index.
This graph is furnished to you in accordance
with SEC regulations.
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit our website at:
www.strategicpartners.com
Trustees
Eugene C. Dorsey
Saul K. Fenster
Robert F. Gunia
Maurice F. Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
David R. Odenath, Jr.
Stephen Stoneburn
Joseph Weber
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Judy A. Rice, Vice President
Grace C. Torres, Treasurer
George P. Attisano, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments
Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
Prudential Investment Management, Inc.
Prudential Plaza
Newark, NJ 07102-3777
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Franklin Advisers, Inc.
920 Park Place
San Mateo, CA 94403
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Pacific Investment
Management Company LLC
840 Newport Center Dr.
Newport Beach, CA 92660
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Fund Symbols NASDAQ CUSIP
Class A PCGAX 86276X103
Class B PBCFX 86276X202
Class C PCCFX 86276X301
Class Z PDCZX 86276X400
MFSP504E
(LOGO) Printed on Recycled Paper
(ICON)
ANNUAL REPORT JULY 31, 2001
STRATEGIC PARTNERS
ASSET ALLOCATION FUNDS
Strategic Partners
Moderate Growth Fund
Objective: Seeks Capital Appreciation and a
Reasonable Level of Current Income
This report is not authorized for
distribution to prospective investors
unless preceded or accompanied by a
current prospectus. The views expressed in
this report and information about the
Fund's portfolio holdings are for the
period covered by this report and are
subject to change thereafter.
(LOGO)
Build on the Rock
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Performance at a Glance
INVESTMENT GOALS AND STYLE
The Strategic Partners Moderate Growth
Fund seeks capital appreciation and a
reasonable level of current income. It
invests in a diversified portfolio of
stocks and fixed-income securities.
There can be no assurance that
the Fund will achieve its investment
objective.
MANAGER
Prudential Investments Fund Management LLC
INVESTMENT ADVISERS
(LOGO)
Cumulative Total Returns1 As of 7/31/01
One Since
Year Inception2
Class A -4.89% 18.65%
Class B -5.72 15.98
Class C -5.72 15.98
Class Z -4.75 19.40
Lipper Multi-Cap Core Fund Avg.3 -12.56 18.62
Average Annual Total Returns1 As of 6/30/01
One Since
Year Inception2
Class A -8.56% 4.98%
Class B -9.44 5.13
Class C -6.40 5.77
Class Z -3.50 7.32
Past performance is not indicative of
future results. Principal and investment
return will fluctuate so that an
investor's shares, when redeemed, may be
worth more or less than their original
cost.
1 Source: Prudential Investments Fund
Management LLC and Lipper Inc. The
cumulative total returns do not take into
account sales charges. The average annual
total returns do take into account
applicable sales charges. The Fund charges
a maximum front-end sales charge of 5% for
Class A shares. Class B shares are subject
to a declining contingent deferred sales
charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and
1% for six years. Approximately seven
years after purchase, Class B shares will
automatically convert to Class A shares on
a quarterly basis. Class C shares are
subject to a front-end sales charge of 1%
and a CDSC of 1% for 18 months. Class Z
shares are not subject to a sales charge
or distribution and service (12b-1) fees.
2 Inception date: Class A, B, C, and Z,
11/18/98.
3 Lipper average returns are unmanaged,
and are based on the average return for
all funds in each share class for the one-
year and since inception periods in the
Lipper Multi-Cap Core Fund category. The
Lipper Multi-Cap Core Fund Average
includes funds that invest in a variety of
market capitalization ranges,
generally have between 25% and 75% of
their equity assets invested in companies
with market capitalizations above 300% of
the dollar-weighted median of the S&P
MidCap 400 Index, have wide latitude in
the companies in which they invest, have
an above-average price/earnings ratio and
price-to-book ratio, and have a three-year
earnings growth figure.
1
STRATEGIC PARTNERS
Asset Allocation Funds
September 18, 2001
DEAR SHAREHOLDER,
The horrific events that took place on
September 11, 2001 will remain
forever ingrained in our nation's
consciousness. In their aftermath, our
thoughts and our prayers remain with the
victims of this senseless tragedy, their
families, and friends. It is also with
deep gratitude that we acknowledge the
heroic efforts of the men and women
involved in the rescue efforts.
We at Prudential Financial would like to
take the opportunity during this difficult
time to reassure our shareholders of our
unwavering commitment to their investment
needs. Under normal circumstances, the
investment landscape is a difficult one to
navigate, and during this extremely tragic
period in our nation's history, even more
so. We're here to provide the expertise
and resources that may help make the
journey ahead less daunting.
For now, investors should try to maintain
a patient focus on their long-term investment
strategies. It is also important for
individuals to avoid making investment decisions
based on emotional reactions. While no one can
predict the future, history has shown that
after an event of this magnitude, the
major markets post initial sharp declines
from which they eventually recover. Should
history repeat itself, individuals who
leave the market now may be unable to
fully participate in a market rebound.
Above all, investors should continue to
seek guidance from their financial
professionals.
It is a testament to the resiliency of our
country that as we mourn, we also carry
on. Please let us know how we can help you
as we move forward together in the weeks
and months ahead.
Sincerely,
David R. Odenath, Jr., President
Strategic Partners Asset Allocation Funds
2
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Annual Report July 31, 2001
Prudential Diversified Funds Renamed
"Strategic Partners Asset Allocation
Funds"
On September 4, 2001, we welcomed the
Prudential Diversified Funds into the
Strategic Partners family of mutual funds,
renaming them the Strategic Partners Asset
Allocation Funds. These changes will have
no effect at all on the Funds' management:
Both the asset allocations and the advisers
for each asset class have stayed the same.
The change will allow investors in these
Funds to exchange their shares with shares
of other Strategic Partners Funds,
including the Strategic Partners Style
Specific Funds and the Strategic Partners
Opportunity Funds. Our team of investment
management analysts selected investment
advisers for all of the Strategic Partners
Funds from among leading managers across
the entire investment industry. Should you
and your financial professional wish to
modify the asset allocation provided by
your fund, we believe the Strategic Partners
family offers a fine selection. Effective
September 4, 2001, however, your shares of any
Strategic Partners fund are no longer
exchangeable for those of funds in the
Prudential fund family.
3
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Annual Report July 31, 2001
INVESTMENT ADVISERS' REPORT
PERFORMANCE
During the Strategic Partners Moderate
Growth Fund's (formerly Prudential
Diversified Moderate Growth Fund) fiscal
year ended July 31, 2001, the price of
growth stocks fell sharply. The stronger
performances of bonds and value stocks
weren't enough to pull the Fund into
positive territory. However, the -4.89%
return of the Fund's Class A shares
(-9.65% to those paying the maximum
one-time Class A share sales charge) was
substantially above the -12.56% Lipper
Multi-Cap Core Fund Average.
A GOOD TIME FOR DEFENSIVE INVESTING
During the 12 months ended July 31, 2001,
investors gradually came to accept that
the U.S. economy was slowing and that it
was affecting the global economy. As
company after company announced profits
that were well below growth estimates, and
even below levels a year earlier, stock
prices began to fall precipitously. The
worst hit were stocks whose peak prices
reflected the assumption that their
companies' earnings would increase very
rapidly. U.S. large-cap and small-cap
growth stocks had prolonged slides from
September 2000 through March 2001 before
recovering modestly.
In response to the market conditions, many
investors fled to asset classes that are
thought of as defensive--that is, relatively
immune to an economic slowdown--such as
core bonds and inexpensively priced (value)
stocks. This increased interest pushed up
prices in those asset classes. Small-cap
value stocks, which had been neglected
for some time, particularly benefited:
the return of the small-cap Russell 2000
Value Index was a huge 47 percentage
points above that of the corresponding
Growth Index. Core bonds turned in the
kind of large return usually associated
with stocks. Falling interest rates,
which increase the prices of previously
issued bonds, helped bond returns. However,
high-yield ("junk") bonds--those of companies
with lower credit ratings--didn't share
in the gains because investors became more sensitive
4
www.strategicpartners.com (800) 225-1852
Asset Class Index Returns
(GRAPH)
Source: Prudential and Lipper Inc.
The performance cited does not represent
the performance of the Strategic Partners
Moderate Growth Fund. Past performance is
not indicative of future results.
Investors cannot invest directly in an
index.
The S&P/ Barra Value Index is an
unmanaged, weighted index comprising
companies within the S&P 500 Index with
lower price-to-book ratios.
The S&P/Barra Growth Index is an
unmanaged, weighted index comprising
companies within the S&P 500 Index with
higher price-to-book ratios.
The Russell 2000 Value Index is an
unmanaged, weighted index that measures
the performance of those Russell 2000
companies with lower price-to-book ratios.
The Russell 2000 Growth Index is an
unmanaged, weighted index that measures
the performance of those Russell 2000
companies with higher price-to-book
ratios.
The Morgan Stanley Capital International
Emerging Market Free Index (MSCI EAFE
Index) is an unmanaged, weighted index
that comprises approximately 965 companies
representing Asia, Africa, Europe, and
North and South America. MSCI Free Indexes
account for the actual buyable securities
available to foreign investors by taking
into account local market restrictions on
share ownership by foreigners. These
indexes are calculated in U.S. dollars,
without dividends reinvested.
The Lehman Brothers Aggregate Index is an
unmanaged index of investment-grade
securities issued by the U.S. government
and its agencies, and by corporations with
between 1 and 10 years remaining to
maturity. The Lehman Brothers Aggregate
Index gives a broad look at how short- and
intermediate-term bonds have performed.
The Lehman Brothers High Yield Bond Index
is an unmanaged index of fixed-rate,
noninvestment-grade debt securities with
at least one year remaining to maturity.
The Lehman Brothers High Yield Bond Index
gives a broad look at how high-yield
(junk) bonds have performed.
5
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Annual Report July 31, 2001
about potential defaults. International
stocks generally followed the U.S. market
down as the slowing U.S. economy affected
sales of companies based in other
countries.
THE FUND OUTPERFORMED ITS BENCHMARK...
The Strategic Partners Moderate Growth
Fund's large outperformance relative to
the Lipper Multi-Cap Core Fund Average was
primarily due to the substantial positive
returns on its large-cap value stocks and
core bonds. Each of these asset classes
made up a fifth of the Fund's holdings.
The Fund's positions in small-cap value
stocks and high-yield bonds made smaller
contributions to performance.
The Fund's large-cap value comparable
index, the S&P/Barra Value Index, was
solidly positive, but the Fund's holdings
in that asset class still far outperformed
the Index. The Fund's strong performance
in this asset class resulted from focuses
on the insurance (primarily property and
casualty), basic materials (paper,
aluminum, and chemicals), tobacco, and
health services (HMO and hospital management)
industries. Stocks in these industries
were recovering from their depressed
prices in previous years, and earnings
were consistent or rising.
Core bonds were the second best performing
asset class (after small-cap value
stocks), and the Fund's holdings performed
in line with the return of the Lehman
Brothers Aggregate Index, a general
measure of performance for this asset
class. Because of the strong performance
of the bond market over this reporting
period, the portion of the Fund's assets
invested in core bonds made the second
largest positive contribution to the
Fund's return.
Small-cap value stocks, an asset class
that had previously suffered several years
of poor performance, staged a strong
rebound when investors fled from high-
priced stocks to those that had remained
inexpensive. Because of their volatile
nature, small-cap value stocks are among
the Fund's smaller asset allocations.
Nonetheless, their exceptionally high
return this reporting
6
www.strategicpartners.com (800) 225-1852
period made a significant, positive
contribution to the Fund's return, even
though the Fund's holdings slightly
trailed the Russell 2000 Value Index.
The comparable index for high-yield bonds--
the Lehman Brothers High Yield Bond Index--
was essentially flat over this reporting
period; the generally good outlook for bonds
was offset by concerns that the slowing
economy would increase the pressure on
financially weak companies. However, the
Fund's high-yield bond holdings
substantially outperformed this Index,
adding modestly to the Fund's return.
...BUT LOSING ASSET CLASSES STILL PREDOMINATED
The largest detractor from the Fund's
return was its position in large-cap
growth stocks--the worst performing asset
class over the period and one of the
larger components of the Fund. As
corporate profits fell below last year's
levels, the stocks of rapidly growing
companies suffered most. Cumulatively, the
Fund's holdings fell a bit farther than
the S&P/Barra Growth Index largely because
of their emphasis on technology, media,
and telecommunications. The Fund's
investments in these industries included
companies that were central to the
building of the Internet (such as Cisco
Systems and JDS Uniphase), and to wireless
telecommunications products and services
(such as Nokia and Vodafone). Share price
declines in these industries were very
dramatic.
The slowing U.S. economy and falling stock
market also affected the Fund's smaller
commitments to international stocks and
U.S. small-cap growth stocks. The
comparable indexes for both of these asset
classes dropped by more than 20%. Although
the Fund's holdings in both asset classes
outperformed their comparable indexes,
this did little to mitigate the impact of
the falling markets. Only the fact that
the asset allocations to these more
volatile classes were relatively small
held down their detractions from the
Fund's return.
Strategic Partners Moderate Growth Fund Management Team
7
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Annual Report July 31, 2001
WHAT IS DIVERSIFICATION
Diversification--spreading your investments
over many different securities--is a basic
principle of investing. It helps reduce
the overall risk of your portfolio. Mutual
funds not only provide professional money
management, but they also allow a
relatively small investment to be spread
over many different securities. When you
own a large number of different
securities, the impact of any one security
on your return is reduced. In addition, if
you diversify your investments among asset
classes and investment styles--between
stocks and bonds, value and growth stocks,
and investment-grade and high-yield bonds--
it is less likely that all the securities
you own will move in the same direction at
one time. Strategic Partners Asset
Allocation Funds provide more of this
buffer than funds investing in only one
asset class. We believe this will result
in more consistent returns over time. In
addition, when we rebalance the Strategic
Partners Moderate Growth Fund to restore
the original weighting of different asset
classes, the discipline forces us to sell
high and buy low. Over time, this may
improve your return.
REBALANCING
The Strategic Partners Moderate Growth
Fund has a target allocation for each
asset class. As some asset classes perform
better than others, the portfolio will
drift from this original target: the
securities that rise most will become a
larger proportion of the invested assets.
We direct new investments to the asset
classes that have fallen below their
target ratio and, when necessary, sell
certain securities in appreciated asset
classes to maintain the balance. This
keeps your risk exposure from changing too
much; by forcing us to sell high, it may
also increase our average selling price
over time.
Although an individual investor can
diversify and rebalance, it would require
a large investment to own the range of
asset classes represented in the Strategic
Partners Moderate Growth Fund. Moreover,
calculating the amounts to allocate to
each kind of security in a rebalancing
would be difficult. Strategic Partners
Asset Allocation Funds do it all for you.
8
www.strategicpartners.com (800) 225-1852
Glossary of Terms
Asset classes are classifications of
investments. The most basic classification
of securities is among stocks, bonds, and
money market investments. Stocks are
shares of ownership in a firm. Owners
share in the profits after debts are paid,
and share in the firm's appreciation in
value. Generally, the prices of stocks
vary with investors' estimates of a firm's
earnings prospects, including the impact
of broader economic conditions. Bonds are
loans to a company, government, or agency.
They carry a fixed interest rate, or one
that varies according to the terms
specified in the bond. They have a
maturity date at which they must be
repaid. Generally, bond prices fluctuate
with current interest rates and with
events that affect the debtor's prospects
of repaying the loan. Money market
instruments are short-term loans that
mature in 13 months or less. Bonds and
money market instruments are called fixed-
income securities. High-yield bonds are
also known as junk bonds. They are subject
to greater risk of loss of principal and
interest, including default risk, than
higher-rated bonds.
Strategic Partners Moderate Growth Fund Diversification Target
(GRAPH)
9
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 96.2%
Common Stocks 60.8%
-------------------------------------------------------------------------------------
Advertising 0.6%
1,100 ADVO, Inc. $ 42,955
12,300 Lamar Advertising Co. 540,954
6,400 Omnicom Group, Inc. 559,168
2,450 R.H. Donnelley Corp. 75,950
----------------
1,219,027
-------------------------------------------------------------------------------------
Aerospace/Defense 0.6%
2,775 BE Aerospace, Inc.(a) 51,532
52,400 British Aerospace PLC (United Kingdom)(a) 279,668
7,500 Embraer-Empresa Brasileira de Aeronautica SA, ADR 267,000
9,300 Northrop Grumman Corp. 746,139
----------------
1,344,339
-------------------------------------------------------------------------------------
Agriculture & Equipment 0.2%
11,600 Monsanto Co. 408,320
2,250 Toro Co. 106,087
----------------
514,407
-------------------------------------------------------------------------------------
Airlines 0.2%
5,700 Airtran Holdings, Inc. 49,020
7,950 America West Holdings Corp. (Class B) 82,283
9,800 Atlantic Coast Airlines Holdings, Inc.(a) 284,690
1,500 SkyWest, Inc. 50,310
----------------
466,303
-------------------------------------------------------------------------------------
Auto & Truck 0.8%
16,200 General Motors Corp. (Class H)(a) 312,660
3,950 Lear Corp.(a) 156,420
12,700 Navistar International Corp.(a) 407,797
67,000 Nissan Motor Co., Ltd. (Japan)(a) 460,680
10,300 Toyota Motor Corp. 340,073
----------------
1,677,630
10 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Banking 2.6%
29,500 ABN AMRO Holding NV, ADR $ 521,571
1,325 Astoria Financial Corp. 79,487
4,800 BancorpSouth, Inc. 77,280
16,300 Bank One Corp. 630,973
9,400 BankAtlantic Bancorp, Inc. (Class A) 96,350
3,508 Banknorth Group, Inc. 80,544
3,660 Banque Nationale de Paris (France) 318,263
8,920 Bayerische Vereinsbank AG (Germany) 397,983
1,925 City National Corp. 90,475
4,625 Colonial BancGroup, Inc. 68,080
1,325 Corus BankShares, Inc. 78,440
1,875 Cullen/Frost Bankers, Inc. 65,831
4,227 CVB Financial Corp. 80,186
3,300 East West Bancorp, Inc. 84,216
275 First Citizens BancShares, Inc. 27,640
900 1st Source Corp. 21,897
3,753 Fulton Financial Corp. 83,317
1,600 Harbor Florida BancShares, Inc. 30,480
50,700 HSBC Holdings PLC (United Kingdom)(a) 587,464
2,550 Independent Bank Corp. 49,853
2,475 MAF Bancorp, Inc. 76,329
60 Mizuho Holding, Inc. (Japan) 230,797
30,400 Overseas-Chinese Banking Corp. Ltd. (Singapore) 192,213
18,000 Sao Paolo Imi SpA (Italy) 223,198
4,325 Silicon Valley Bancshares(a) 87,192
4,375 Sky Financial Group, Inc. 85,575
2,350 Southwest BanCorp. of Texas(a) 79,007
48,000 Sumitomo Mitsui Banking Corp. (Japan) 343,887
38,000 Sumitomo Trust & Banking Co. Ltd. (Japan) 220,475
3,300 Susquehanna Bancshares, Inc. 68,772
54,896 United Overseas Bank, Ltd. (Singapore) 319,694
4,040 Washington Federal, Inc. 107,504
1,925 Westamerica Bancorp. 75,941
1,650 Whitney Holding Corp. 74,399
----------------
5,655,313
See Notes to Financial Statements 11
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Building & Construction 0.4%
2,250 Centex Corp. $ 105,840
3,550 D.R. Horton, Inc. 97,802
2,625 KB Home 85,549
1,975 Lennar Corp. 90,633
2,175 M.D.C. Holdings, Inc. 91,219
2,950 Thomas Industries, Inc. 75,874
5,819 Vivendi Universal SA (France) 341,412
2,025 York International Corp. 67,068
----------------
955,397
-------------------------------------------------------------------------------------
Chemicals 0.7%
10,900 Akzo Nobel NV (Netherlands) 455,684
2,925 Arch Chemicals, Inc. 58,793
5,900 Cambrex Corp. 281,135
2,875 Cytec Industries, Inc.(a) 93,409
1,275 Du Pont Photomasks, Inc. 49,177
2,225 Ferro Corp. 49,173
2,625 Great Lakes Chemical Corp. 74,524
1,750 H.B. Fuller Co. 92,172
3,200 Lubrizol Corp. 111,616
2,075 Minerals Technologies, Inc. 88,125
4,325 Olin Corp. 72,963
1,025 OM Group, Inc. 59,962
----------------
1,486,733
-------------------------------------------------------------------------------------
Commercial Services 0.2%
2,200 Arbitron, Inc. 57,860
11,425 Kforce, Inc.(a) 56,440
19,350 Modis Professional Services, Inc. 123,259
5,200 Resources Connection, Inc.(a) 132,080
----------------
369,639
-------------------------------------------------------------------------------------
Computers 2.0%
41,400 Dell Computer Corp.(a) 1,114,902
13,000 EMC Corp.(a) 256,360
12 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
38,000 Fujitsu Ltd. (Japan) $ 354,770
4,600 Hewlett-Packard Co. 113,436
17,300 International Business Machines Corp. 1,820,133
16,450 Iomega Corp. 26,156
60,464 Maxtor Corp.(a) 399,062
4,650 MTS Systems Corp. 65,100
17,700 Silicon Graphics, Inc.(a) 11,151
6,775 Storage Technology Corp. 93,292
----------------
4,254,362
-------------------------------------------------------------------------------------
Computer Services 1.3%
15,700 Advanced Digital Information(a) 178,195
15,000 ASM Lithography Holding NV (Netherlands)(a) 307,050
1,875 CACI International, Inc. (Class A)(a) 65,625
4,950 Carreker Corp.(a) 93,802
3,900 Catapult Communications Corp.(a) 67,236
36,700 Cisco Systems, Inc.(a) 705,374
3,250 Electronics for Imaging, Inc.(a) 71,630
9,300 Inforte Corp.(a) 104,160
13,800 Jack Henry & Associates, Inc.(a) 390,126
5,800 MatrixOne, Inc.(a) 91,930
5,900 Sapient Corp.(a) 36,875
33,200 Sun Microsystems, Inc.(a) 540,828
3,665 Tier Technologies, Inc. (Class B)(a) 42,514
----------------
2,695,345
-------------------------------------------------------------------------------------
Computer Software & Services 1.5%
7,900 Actuate Corp.(a) 80,738
14,700 BindView Development Corp.(a) 20,139
21,600 BMC Software, Inc.(a) 432,000
19,700 Brio Technology, Inc.(a) 82,149
2,025 JDA Software Group, Inc.(a) 42,323
11,800 Keane, Inc.(a) 218,300
24,900 Microsoft Corp.(a) 1,648,131
2,675 NetIQ Corp.(a) 88,248
5,075 Novell, Inc.(a) 25,324
19,800 Oracle Corp.(a) 357,984
See Notes to Financial Statements 13
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
5,900 Precise Software Solutions Ltd.(a) $ 127,676
4,900 Verity, Inc.(a) 86,044
----------------
3,209,056
-------------------------------------------------------------------------------------
Consumer Products 1.9%
8,050 American Greetings Corp. (Class A) 88,953
10,400 Eastman Kodak Co. 450,424
16,840 Electrolux AB, Ser. B (Sweden) 253,323
15,500 Gillette Co. 431,985
5,425 JAKKS Pacific, Inc. 108,663
1 Japan Tobacco, Inc. 7,252
13,000 Kao Corp. (Japan) 304,203
1,075 Libbey, Inc. 36,926
8,400 Loews Corp. 476,784
21,300 Philip Morris Cos., Inc. 969,150
5,235 Purina Mills, Inc. 119,515
12,833 R.J. Reynolds Tobacco Holdings, Inc. 689,260
10,975 RPM, Inc. 101,848
3,425 Tupperware Corp. 80,419
----------------
4,118,705
-------------------------------------------------------------------------------------
Consumer Services 0.7%
11,800 Cheap Tickets, Inc.(a) 137,352
4,900 Ebay, Inc.(a) 306,593
3,250 Navigant International, Inc.(a) 56,062
3,250 Seitel, Inc.(a) 43,875
19,700 Service Corp. International(a) 155,630
1,800 Tetra Tech, Inc.(a) 40,860
1,975 Travelocity, Inc.(a) 45,524
3,575 Trico Marine Services, Inc.(a) 35,142
4,625 United Rentals, Inc.(a) 108,179
17,100 Waste Management, Inc. 530,100
----------------
1,459,317
-------------------------------------------------------------------------------------
Data Processing/Management 0.1%
10,800 ProBusiness Services, Inc.(a) 297,756
14 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Diversified Manufacturing 2.3%
3,250 ESCO Technologies, Inc.(a) $ 91,325
2,075 Federal Signal Corp. 43,783
34,000 General Electric Co. 1,479,000
6,650 Gerber Scientific, Inc. 71,953
1,750 Harsco Corp. 53,480
20,000 Hutchison Whampoa, Ltd. (Hong Kong) 192,956
1,425 Intermagnetics General Corp. 44,531
177,700 Invensys PLC (United Kingdom) 215,405
2,400 Ladish Co., Inc. 38,400
3,675 Merix Corp. 89,560
4,300 Minnesota Mining & Manufacturing Co. 481,084
2,225 National Service Industries, Inc. 50,329
21,125 Pactiv Corp.(a) 328,071
5,900 Roper Industries, Inc. 223,315
23,400 Tyco International Ltd. 1,244,880
4,550 Veba AG (Germany) 249,625
----------------
4,897,697
-------------------------------------------------------------------------------------
Electronics 0.6%
1,600 Fisher Scientific International, Inc. 43,120
3,150 Keithley Instruments, Inc. 63,158
18,956 Koninklijke (Royal) Philips Electronics NV
(Netherlands) 530,362
3,050 Mentor Graphics Corp.(a) 56,883
26,400 National Grid Group PLC (United Kingdom) 178,833
4,000 Polycom, Inc.(a) 101,800
7,000 Sony Corp. (Japan) 344,993
1,975 Tweeter Home Entertainment Group, Inc.(a) 56,347
----------------
1,375,496
-------------------------------------------------------------------------------------
Electronic Components 2.0%
3,900 Alpha Industries, Inc.(a) 148,668
1,925 Belden, Inc. 47,066
4,000 Cable Design Technologies Corp. 60,200
2,900 Caliper Technologies Corp. 47,705
5,550 Cleco Corp. 126,263
6,900 Credence Systems Corp.(a) 142,830
See Notes to Financial Statements 15
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
6,100 CTS Corp. $ 134,505
11,800 DDI Corp.(a) 229,392
1,875 Electro Scientific Industries, Inc. 60,281
11,800 Gentex Corp.(a) 386,922
44,000 Hitachi, Ltd. 370,589
2,500 Idacorp, Inc. 92,500
1,100 Kyocera Corp. (Japan) 82,510
8,250 Methode Eletronics, Inc. (Class A) 74,003
5,200 Novellus Systems, Inc.(a) 265,044
2,500 Park Electrochemical Corp. 61,625
13,800 Power-One, Inc.(a) 213,900
7,300 STMicroelectronics NV (France) 232,432
1,550 Technitrol, Inc. 38,471
40,000 Texas Instruments, Inc. 1,380,000
----------------
4,194,906
-------------------------------------------------------------------------------------
Exchange Traded Fund 0.1%
6,800 Nasdaq--100 Shares 283,968
-------------------------------------------------------------------------------------
Financial Services 5.2%
11,100 A.G. Edwards, Inc. 485,625
1,600 Acom Co., Ltd. (Japan)(a) 130,528
3,025 Allied Capital Corp. 70,331
16,200 American Express Co. 653,346
5,900 Americredit Corp. 362,791
1,225 Chittenden Corp. 40,976
35,100 Citigroup, Inc. 1,762,371
2,875 Doral Financial Corp. 106,548
2,550 Downey Financial Corp. 149,353
6,000 Eaton Vance Corp. 204,840
9,500 Federal Home Loan Mortgage Corp. 650,180
2,600 First Merchants Corp. 61,100
7,800 Fortis NL NV (Netherlands) 203,548
5,600 Goldman Sachs Group, Inc. 465,696
14,900 Household International, Inc. 987,721
4,275 Indymac Bancorp, Inc.(a) 111,107
8,200 ING Groep NV 267,411
32,000 Investor AB (Sweden) 398,378
2,700 J.P. Morgan Chase & Co. 116,910
2,625 Jefferies Group, Inc. 93,083
16 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
8,500 Lehman Brothers Holdings, Inc. $ 612,000
2,400 MBNA Corp. 84,960
12,800 Merrill Lynch & Co., Inc. 694,272
9,700 Morgan Stanley Dean Witter & Co. 580,254
56,000 Nikko Securities Co., Ltd. (Japan) 351,837
2,400 Orix Corp. (Japan) 202,909
3,150 PFF Bancorp, Inc. 80,640
8,400 PNC Financial Services Group 557,340
2,300 Provident Financial Group, Inc. 75,923
13,300 Stilwell Financial, Inc. 394,478
1,825 Webster Financial Corp. 65,226
606 Zurich Financial Services Group (Switzerland) 201,262
----------------
11,222,944
-------------------------------------------------------------------------------------
Food & Beverage 1.7%
40,800 Cadbury Schweppes PLC (United Kingdom) 278,124
3,850 Corn Products International, Inc. 114,345
20,400 Darden Restaurants, Inc. 609,960
1,825 Dean Foods Co. 76,467
6,500 Del Monte Foods Co. 58,435
39,900 Diageo PLC (United Kingdom)(a) 410,259
6,875 Dole Food Co., Inc. 154,962
8,112 Heineken NV (Netherlands) 320,447
22,900 PepsiCo, Inc. 1,067,827
22,900 Sara Lee Corp. 461,893
1,075 Suiza Foods Corp.(a) 59,222
----------------
3,611,941
-------------------------------------------------------------------------------------
Gas Distribution 0.1%
2,775 AGL Resources, Inc. 66,600
1,875 CH Energy Group, Inc. 79,031
2,025 New Jersey Resources Corp. 87,987
----------------
233,618
-------------------------------------------------------------------------------------
Health Care 1.0%
2,000 Aspect Medical Systems, Inc.(a) 23,820
14,800 HCA, Inc. 680,060
See Notes to Financial Statements 17
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
25,300 Health Management Assoc., Inc. (Class A)(a) $ 499,928
4,800 Health Net, Inc.(a) 88,080
5,275 Humana, Inc.(a) 58,816
3,150 Mid-Atlantic Medical Services, Inc. 66,150
1,875 Sunrise Assisted Living, Inc.(a) 57,206
2,000 Triad Hospital, Inc.(a) 67,840
5,200 Wellpoint Health Networks, Inc.(a) 556,192
----------------
2,098,092
-------------------------------------------------------------------------------------
Hotels & Leisure 0.7%
3,900 Argosy Gaming Co. 102,960
14,125 Boyd Gaming Corp. 85,033
6,500 Marriott International, Inc. (Class A) 310,375
27,400 MeriStar Hotels & Resorts, Inc. 48,498
5,325 Prime Hospitality Corp.(a) 63,953
20,700 Starwood Hotels & Resorts Worldwide, Inc. 738,783
8,200 Station Casinos, Inc.(a) 117,998
3,400 WMS Industries, Inc. 78,200
----------------
1,545,800
-------------------------------------------------------------------------------------
Insurance 3.6%
3,150 Alfa Corp. 75,946
14,720 Alleanza Assicurazionni SpA (Italy) 163,836
1,794 Allianz AG (Germany) 504,277
15,200 Allstate Corp. 531,392
13,312 American International Group, Inc. 1,108,224
2,600 Arthur J. Gallagher & Co. 71,500
13,480 AXA (France) 394,858
7,300 Chubb Corp. 512,241
4,700 CIGNA Corp. 471,457
4,325 CNA Surety Corp. 62,194
2,625 Commerce Group, Inc.(a) 96,705
2,465 Fidelity National Financial, Inc. 63,203
4,150 First American Corp. 73,662
16,900 Hartford Financial Services Group, Inc. 1,118,949
2,825 Landamerica Financial Group, Inc. 90,400
2,550 Leucadia National Corp. 83,283
18 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
7,000 Lincoln National Corp. $ 357,210
17,800 Old Republic International Corp. 471,700
3,050 Presidential Life Corp. 58,652
8,100 Reinsurance Group of America, Inc. 316,548
2,825 StanCorp Financial Group, Inc. 124,582
1,600 Triad Guaranty, Inc.(a) 60,640
11,600 XL Capital Ltd. 890,300
----------------
7,701,759
-------------------------------------------------------------------------------------
Internet 0.2%
10,800 Avocent Corp.(a) 279,720
2,000 DigitalThink, Inc. 29,000
1,225 Sonicwall, Inc. 26,031
----------------
334,751
-------------------------------------------------------------------------------------
Machinery 0.2%
6,500 AGCO Corp. 67,015
3,100 Applied Industrial Technologies, Inc. 53,165
4,000 JLG Industries, Inc. 45,200
3,725 Lincoln Electric Holdings, Inc. 89,102
2,300 Manitowoc Co., Inc. 63,917
2,000 Sauer-Danfoss, Inc. 18,200
3,050 Snap-On, Inc. 82,350
----------------
418,949
-------------------------------------------------------------------------------------
Manufacturing 0.5%
1,050 Compaignie de Saint Gobain (France) 154,933
5,700 CoorsTek, Inc.(a) 177,270
8,400 Mettler-Toledo International, Inc.(a) 357,840
8,720 Thyssen AG (Germany) 120,727
11,300 Varian, Inc.(a) 325,214
----------------
1,135,984
-------------------------------------------------------------------------------------
Media 1.6%
5,900 Acme Communications, Inc.(a) 47,200
18,700 AOL Time Warner, Inc.(a) 849,915
3,575 Banta Corp. 99,421
19,700 Entravision Communications Corp. 246,841
See Notes to Financial Statements 19
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
7,000 Lagardere SA (France) $ 369,326
1,125 Liberty Corp. 44,831
650 Media General, Inc. (Class A)(a) 31,194
19,400 Metro Goldwyn Mayer, Inc. 388,000
25,830 Viacom, Inc. (Class B)(a) 1,286,334
----------------
3,363,062
-------------------------------------------------------------------------------------
Medical Products & Services 2.1%
2,500 Albany Molecular Research, Inc.(a) 77,725
17,900 Amgen, Inc.(a) 1,122,509
8,600 Baxter International, Inc. 428,280
4,250 Coventry Health Care, Inc. 97,793
2,800 Digene Corp.(a) 96,964
14,000 Genetech, Inc. 592,200
7,305 Glaxo Smithkline PLC (United Kingdom)(a) 211,166
9,900 Johnson & Johnson 535,590
3,400 North American Scientific, Inc.(a) 52,190
2,900 ORATEC Interventions, Inc.(a) 24,592
8,700 Ortec International, Inc. 61,770
10,300 Packard Bioscience Co. 99,189
1,800 Pharmaceutical Product Development, Inc. 63,738
3,510 Roche Holdings AG 267,527
7,600 Sepracor, Inc. 334,856
4,325 STERIS Corp.(a) 93,031
1,600 Varian Medical Systems, Inc. 114,400
3,900 Ventana Medical Systems, Inc.(a) 130,650
2,250 VISX, Inc. 35,775
----------------
4,439,945
-------------------------------------------------------------------------------------
Mining 0.3%
22,200 Freeport-McMoRan Copper & Gold, Inc. (Class A)(a) 216,672
7,900 Freeport-McMoRan Copper & Gold, Inc. (Class B)(a) 85,004
10,000 Newmont Mining Corp. 187,000
7,400 Stillwater Mining Co.(a) 190,920
----------------
679,596
20 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Networking 0.2%
1,825 Anixter International, Inc.(a) $ 52,651
950 Black Box Corp.(a) 52,117
14,100 Ixia(a) 197,541
32,800 Lucent Technologies, Inc. 219,760
----------------
522,069
-------------------------------------------------------------------------------------
Office Equipment & Supplies 0.5%
7,000 Canon, Inc. (Japan) 236,727
6,275 Daisytek International Corp.(a) 96,071
16,000 Harris Corp. 480,320
1,275 United Stationers, Inc. 42,062
1,975 Wallace Computer Services, Inc. 33,654
35,400 Xerox Corp. 282,492
----------------
1,171,326
-------------------------------------------------------------------------------------
Oil & Gas 4.0%
1,576 ABB, Ltd., ADR(a) 17,493
5,000 Amerada Hess Corp. 386,400
67,800 BP Amoco PLC (United Kingdom) 564,184
2,000 Cal Dive International, Inc. 37,400
11,400 Conoco, Inc. (Class A) 351,576
20,800 Diamond Offshore Drilling, Inc. 610,272
3,350 Energen Corp. 85,425
36,800 ENI SpA (Italy) 447,615
39,300 ENSCO International, Inc.(a) 813,117
15,775 Grey Wolf, Inc. 49,218
24,700 Halliburton Co. 864,747
3,575 Key Energy Services, Inc. 33,247
12,000 Nabors Industries, Inc. 351,600
5,275 Oneok, Inc. 96,005
14,800 Santa Fe International Corp. 442,520
17,800 Schlumberger, Ltd. 956,750
2,303 Stone Energy Corp.(a) 104,902
4,900 Superior Energy Services, Inc.(a) 41,650
18,100 Talisman Energy, Inc. (Canada)(a) 711,511
7,685 TotalFinaElf SA, ADR 544,713
See Notes to Financial Statements 21
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
3,513 TotalFinaElf SA (France) $ 500,212
2,600 Universal Compression Holdings, Inc.(a) 72,930
13,100 Williams Companies, Inc. 438,850
----------------
8,522,337
-------------------------------------------------------------------------------------
Oil & Gas Exploration & Production 0.3%
5,900 Chesapeake Energy Corp. 38,114
5,000 Comstock Resources, Inc.(a) 36,600
13,200 Fmc Technologies , Inc. 238,524
2,600 Spinnaker Exploration Co. 104,780
3,950 Vintage Petroleum, Inc. 73,273
3,850 WGL Holdings, Inc. 107,145
----------------
598,436
-------------------------------------------------------------------------------------
Paper & Packaging 1.2%
11,700 Boise Cascade Corp. 423,540
3,250 Buckeye Technologies, Inc.(a) 44,037
7,900 Caraustar Industries, Inc. 78,605
13,422 Georgia-Pacific Corp. (Timber Group) 491,245
12,000 International Paper Co. 490,320
6,300 Louisiana-Pacific Corp. 66,906
2,575 Pope & Talbot, Inc. 35,535
9,100 Temple-Inland, Inc. 564,655
3,775 Universal Forest Products, Inc. 74,028
7,000 UPM-Kymmene Oy (Finland) 208,417
----------------
2,477,288
-------------------------------------------------------------------------------------
Pharmaceuticals 2.3%
14,500 Abbott Laboratories 777,055
8,725 Alpharma, Inc. (Class A) 246,132
21,400 American Home Products Corp. 1,290,634
3,600 Aventis SA(a) (France) 276,949
4,300 Elan Corp. PLC, ADR(a) 248,325
1,300 Eli Lilly & Co. 103,064
4,225 Perrigo Co. 70,008
22,025 Pfizer, Inc. 907,871
17,278 Pharmacia Corp. 770,944
13,000 Yamanouchi Pharmaceutical Co., Ltd. 360,460
----------------
5,051,442
22 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Printing & Publishing 0.9%
3,400 Consolidated Graphics, Inc.(a) $ 74,800
3,050 Hollinger International, Inc. 44,286
13,600 Knight-Ridder, Inc. 837,624
14,700 New York Times Co. (Class A) 680,610
8,000 Pearson PLC, ADR(a) 123,200
7,700 Wolters Kluwer NV (Netherlands)(a) 204,242
----------------
1,964,762
-------------------------------------------------------------------------------------
Real Estate 0.2%
22,250 Security Capital Group, Inc. (Class B) 458,350
-------------------------------------------------------------------------------------
Real Estate Investment Trust 1.1%
3,525 Amli Residential Properties Trust 82,661
3,625 Arden Realty, Inc. 92,075
4,275 Boykin Lodging Co. 51,728
2,400 BRE Properties, Inc. 72,864
3,475 Cabot Industrial Trust 72,975
1,800 Camden Property Trust 67,410
3,250 Capital Automotive REIT 55,217
450 CBL & Associates Properties, Inc. 13,878
3,525 CBRL Group, Inc. 68,350
17,300 Equity Office Properties Trust 519,346
3,900 Felcor Lodging Trust, Inc. 84,786
2,400 First Industrial Realty Trust, Inc. 75,360
4,250 Glenborough Realty Trust, Inc. 80,325
3,725 Highwoods Properties, Inc. 95,174
1,375 Home Properties New York, Inc. 41,456
2,600 Hospitality Properties Trust 72,930
10,325 HRPT Properties Trust 89,105
3,250 Innkeepers USA Trust 37,993
6,075 JDN Realty Corp. 72,414
1,925 Kilroy Realty Corp. 51,590
4,200 New Plan Excel Realty Trust, Inc. 67,410
1,425 Realty Income Corp. 40,855
9,950 Reckson Associates Realty Corp. 220,392
See Notes to Financial Statements 23
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
3,350 Regency Centers Corp. $ 86,162
2,075 Summit Properties, Inc. 54,157
2,125 Weingarten Realty Investors 94,987
----------------
2,361,600
-------------------------------------------------------------------------------------
Restaurants 0.2%
3,900 CEC Entertainment, Inc. 139,191
3,900 Landry's Seafood Restaurants, Inc. 73,710
8,000 McDonald's Corp. 233,120
3,725 Ruby Tuesday, Inc. 69,285
----------------
515,306
-------------------------------------------------------------------------------------
Retail 3.7%
3,200 BJ's Wholesale Club, Inc.(a) 179,200
6,225 Borders Group, Inc.(a) 143,611
1,500 Christopher & Banks Corp. 40,200
8,300 Cost Plus, Inc.(a) 234,309
4,325 Dillards, Inc. (Class A) 64,183
16,700 Federated Department Stores, Inc.(a) 644,620
543 Freds, Inc. (Class A) 13,765
3,600 Friedman's, Inc. (Class A) 26,820
24,290 Great Universal Stores PLC (United Kingdom) 216,153
32,500 Home Depot, Inc. 1,637,025
9,325 IKON Office Solutions, Inc. 72,549
1,375 K-Swiss, Inc. (Class A) 44,688
3,100 Kenneth Cole Productions, Inc. (Class A) 61,225
18,700 Kohl's Corp.(a) 1,071,136
5,900 Linens 'n Things, Inc.(a) 151,630
1,550 Payless Shoesource, Inc.(a) 88,768
4,650 Phillips-Van Heusen Corp. 63,705
4,575 Pier 1 Imports, Inc. 53,756
8,750 ShopKo Stores, Inc. 75,688
7,150 Sonic Automative, Inc.(a) 139,425
17,400 Target Corp. 673,380
83,300 Tesco PLC (United Kingdom)(a) 298,173
25,700 The Limited, Inc. 436,129
19,100 Tiffany & Co. 674,230
24 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
8,850 Value City Department Stores , Inc. $ 55,224
7,200 Venator Group, Inc. 118,800
12,900 Wal-Mart Stores, Inc. 721,110
----------------
7,999,502
-------------------------------------------------------------------------------------
Semiconductors 2.1%
8,900 Applied Materials, Inc.(a) 408,154
15,000 Integrated Circuit Systems, Inc.(a) 289,500
19,700 Intel Corp. 587,257
14,300 Intersil Corp. (Class A)(a) 496,210
9,000 KLA Tencor Corp.(a) 489,510
8,800 Micron Technology, Inc. 369,600
3,625 Milacron, Inc. 66,337
2,100 Nanometrics, Inc.(a) 69,300
15,300 National Semiconductor Corp.(a) 490,365
5,900 Power Integrations, Inc.(a) 127,735
7,900 Rudolph Technologies, Inc.(a) 327,850
10,800 Semtech Corp.(a) 400,140
11,300 Varian Semiconductor Equipment Associates,
Inc.(a) 397,308
----------------
4,519,266
-------------------------------------------------------------------------------------
Steel & Metals 0.7%
11,200 Alcoa, Inc. 439,376
2,450 Carpenter Technology Corp. 67,228
1,825 Century Aluminum Co. 31,846
2,125 Cleveland-Cliffs, Inc. 35,594
4,150 NS Group, Inc.(a) 39,425
7,000 Phelps Dodge Corp. 282,800
1,700 Precision Castparts Corp. 62,050
3,100 Quanex Corp. 84,785
5,900 Reliance Steel & Aluminum Co. 146,910
3,725 Timken Co. 62,096
4,750 Wolverine Tube, Inc.(a) 73,720
5,450 Worthington Industries, Inc. 76,627
----------------
1,402,457
See Notes to Financial Statements 25
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
Telecommunications 4.9%
19,700 Advanced Fibre Communications, Inc.(a) $ 497,425
5,900 Alcatel (France) 105,141
6,900 ALLTEL Corp. 425,385
2,000 Andrew Corp.(a) 44,080
19,800 AT&T Corp. 400,158
19,671 AT&T Wireless Services, Inc.(a) 367,651
61,070 British Telecommunications PLC (United Kingdom) 425,008
7,900 Leap Wireless International, Inc.(a) 193,866
80,000 Liberty Media Group (Class A) 1,258,400
28,800 Nokia Corp., ADR(a) 628,128
2,250 Nortek, Inc. 59,895
20 NTT Mobile Communications (Japan) 277,277
39,166 Portugal Telecom, SA (Portugal) 280,898
9,600 Powerwave Technologies, Inc. 164,736
28,800 Qwest Communications International, Inc.(a) 748,800
2,000 SBA Communcations Corp. 39,420
11,900 SBC Communications, Inc. 535,857
3,900 Sierra Wireless, Inc. 47,385
36,900 Sprint Corp. 884,466
8,800 Stanford Microdevices, Inc. 70,400
21,902 Telefonica SA (Spain) 266,980
14,300 Univision Communications, Inc.(a) 545,974
12,000 Verizon Communications, Inc. 649,800
22,096 Vodafone Group PLC, ADR(a) 476,169
134,100 Vodafone Group PLC (United Kingdom) 293,553
14,700 Western Multiplex Corp.(a) 70,560
5,000 Western Wireless Corp.(a) 194,550
32,700 Worldcom, Inc.(a) 457,800
----------------
10,409,762
-------------------------------------------------------------------------------------
Transportation/Shipping 1.0%
4,900 Alexander & Baldwin, Inc. 124,460
2,025 Arkansas Best Corp.(a) 55,890
11,600 Canadian Pacific Ltd. 439,640
2,650 CNF Transportation, Inc. 86,019
34 East Japan Railway 182,282
7,150 Forward Air Corp. 197,697
26 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
49,400 OMI Corp. $ 236,626
2,450 Roadway Express, Inc. 71,173
7,600 Teekay Shipping Corp. 261,440
6,200 Union Pacific Corp. 332,878
3,725 Yellow Corp.(a) 81,056
----------------
2,069,161
-------------------------------------------------------------------------------------
Utilities 1.5%
3,200 ALLETE 75,808
10,500 Alstom 292,856
9,800 Beacon Power Corp.(a) 45,570
2,125 California Water Service Group 50,894
3,725 El Paso Electric Co. 53,975
23,420 Endesa SA (Spain) 382,491
6,350 Exelon Corp. 358,775
3,675 Kansas City Power & Light Co. 89,303
1,650 Massey Energy Corp. 28,347
2,225 MDU Resources Group, Inc. 67,573
2,000 NewPower Holdings, Inc.(a) 14,000
19,700 NiSource, Inc. 519,292
2,125 OGE Energy Corp. 45,900
2,025 Peoples Energy Corp. 77,072
31,200 PG&E Corp. 463,944
2,725 Public Service Co. of New Mexico 80,687
12,150 Suez Lyonnaise des Eaux (France) 410,375
2,975 Western Resources, Inc. 55,305
----------------
3,112,167
----------------
Total common stocks 130,417,068
----------------
PREFERRED STOCKS
-------------------------------------------------------------------------------------
Publishing
1,000 Primedia, Inc., 8.625% 83,000
----------------
See Notes to Financial Statements 27
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
CORPORATE BONDS 13.9%
-------------------------------------------------------------------------------------
Aerospace/Defense 0.1%
B2 $ 35 Alliant Techsystems, Inc., Sr. Sub.
Notes,
8.50%, 5/15/11 $ 36,225
Ba2 250 Sequa Corp., Sr. Notes,
9.00%, 8/1/09 249,375
----------------
285,600
-------------------------------------------------------------------------------------
Agricultural Products 0.1%
IMC Global, Inc., Sr. Notes,
Ba1 40 10.875%, 6/1/08 40,144
Ba2 125 11.25%, 6/1/11 125,006
----------------
165,150
-------------------------------------------------------------------------------------
Airlines 0.5%
Ba2 140 Continental Airlines, Inc., Sr.
Notes,
8.00%, 12/15/05 140,074
Baa3 230 Delta Air Lines, Inc., Notes,
8.30%, 12/15/29 206,729
Northwest Airlines, Inc.,
Notes,
Ba2 100 7.625%, 3/15/05 98,439
Sr. Notes,
Ba2 100 8.875%, 6/1/06 100,395
United Airlines, Inc.,
Debs., Ser. A,
Ba1 125 10.67%, 5/1/04 130,502
Debs.,
Ba1 15 9.75%, 8/15/21 14,276
Ba3 300 US Airways, Inc., Pass-through
Certs.,
10.375%, 3/1/13 286,122
----------------
976,537
-------------------------------------------------------------------------------------
Auto & Truck 0.1%
B2 25 Collins & Aikman Products Co., Sr.
Sub. Notes,
11.50%, 4/15/06 25,000
28 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
B3 $ 75 Eagle-Picher, Inc., Gtd. Notes,
9.375%, 3/1/08 $ 46,500
Navistar International Corp.,
Sr. Notes,
Ba1 100 7.00%, 2/1/03 98,500
Ba1 60 9.375%, 6/1/06 61,500
----------------
231,500
-------------------------------------------------------------------------------------
Banking 0.3%
B1 100 Chevy Chase Savings Bank, Sub.
Debs.,
9.25%, 12/1/05 99,500
A1 300 KBC Bank Funding Trust, Gtd. Notes,
9.86%, 11/2/09 347,073
Sovereign Bancorp, Inc., Sr. Notes,
Ba3 110 10.25%, 5/15/04 116,506
Ba3 90 10.50%, 11/15/06 97,650
B2 55 Western Financial Svgs. Bank,
Sub. Cap. Debs.,
8.875%, 8/1/07 52,113
----------------
712,842
-------------------------------------------------------------------------------------
Building Materials & Components 0.1%
B3 200 Nortek, Inc., Sr. Sub. Notes,
9.875%, 6/15/11 198,000
-------------------------------------------------------------------------------------
Cable 1.4%
B2 400 Adelphia Communications Corp., Sr.
Notes,
10.25%, 6/15/11 390,000
Callahan Nordrhein-Westfalen
(Germany),
Sr. Disc. Notes,
Zero Coupon (until 7/15/05)
B3 50 16.00%, 7/15/10 19,250
Sr. Notes,
B3 100 14.00%, 7/15/10 73,000
Charter Communications Holdings,
Inc., Sr. Disc. Notes,
B2 445 Zero Coupon (until 5/15/06)
11.75%, 5/15/11 251,425
See Notes to Financial Statements 29
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Sr. Notes,
B2 $ 55 11.125%, 1/15/11 $ 58,300
B2 350 10.00%, 5/15/11 355,250
B2 75 10.75%, 10/1/09 78,000
B3 150 Diamond Cable Comm. Co. (United
Kingdom), Sr. Disc. Notes,
13.25%, 9/30/04 97,500
Fox Family Worldwide, Inc.,
Sr. Notes,
B1 30 9.25%, 11/1/07 32,400
Sr. Disc. Notes,
Zero Coupon (until 11/1/02),
B1 325 10.25%, 11/1/07 316,063
B3 75 Insight Communications, Inc., Sr.
Disc. Notes,
Zero Coupon (until 2/15/06)
12.25%, 2/15/11 44,250
B2 500 Mediacom Broadband LLC, Sr. Notes,
11.00%, 7/15/13 527,500
B2 250 Mediacom LLC/Capital Corp., Sr.
Notes,
7.875%, 2/15/11 227,500
B3 175 Paxson Communications Corp., Sr.
Sub. Notes,
10.75%, 7/15/08 181,125
B2 235 Telewest PLC, Sr. Disc. Notes,
Zero Coupon (until 2/1/05)
11.375%, 2/1/10 110,450
B3 250 United Int'l. Holdings, Inc., Sr.
Disc. Notes,
Zero Coupon (until 2/1/02)
10.75%, 2/1/08 80,625
United Pan Europe Communications,
Sr. Disc Notes,
Zero Coupon (until 8/1/04)
Caa1 100 12.50%, 8/1/09 19,500
Sr. Disc. Notes,
Caa1 50 Zero Coupon (until 2/1/05) 9,250
30 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Sr. Notes,
Caa1 $ 200 10.875%, 8/1/09 $ 80,000
Caa1 250 11.25%, 2/1/10 100,000
----------------
3,051,388
-------------------------------------------------------------------------------------
Casinos 0.7%
Ba3 150 Aztar Corp., Sr. Sub. Notes,
8.875%, 5/15/07 150,750
B2 75 Coast Hotels & Casinos, Inc., Sr.
Sub. Notes,
9.50%, 4/1/09 76,875
B2 100 Harvey Casino & Resorts, Sr. Sub.
Notes,
10.625%, 6/1/06 105,500
B3 45 Hollywood Casino Corp., Gtd. Notes,
11.25%, 5/1/07 47,250
B2 250 Hollywood Park, Inc., Sr. Sub.
Notes,
Ser. B,
9.25%, 2/15/07 215,000
B2 65 Horseshoe Gaming LLC, Sr. Sub.
Notes,
8.625%, 5/15/09 65,162
Mandalay Resort Group, Inc.,
Deb. Notes,
Ba2 100 6.70%, 11/15/96 99,086
Sr. Sub. Debs.,
Ba3 100 7.625%, 7/15/13 88,000
Sr. Sub. Notes,
Ba3 300 6.75%, 7/15/03 289,500
Ba3 30 Park Place Entertainment Corp., Sr.
Sub. Notes,
9.375%, 2/15/07 31,800
Station Casinos, Inc.,
Sr. Sub. Notes
B1 50 9.75%, 4/15/07 51,000
B1 220 9.875%, 7/1/10 224,400
NA 55 Venetian Casino Resort LLC,
Gtd. Notes,
12.25%, 11/15/04 58,300
----------------
1,502,623
See Notes to Financial Statements 31
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Chemicals 0.3%
B2 $ 100 Huntsman ICI Chemicals LLC, Sr.
Sub. Notes,
10.125%, 7/1/09 $ 97,500
B2 100 ISP Chemco, Inc., Sr. Sub. Notes,
10.25%, 7/1/11 100,000
B2 100 ISP Holdings, Inc., Sr. Notes,
9.00%, 10/15/03 95,000
Lyondell Chemical Co.,
Sr. Sub. Notes,
B2 120 10.875%, 5/1/09 118,800
Sec'd. Notes,
Ba3 100 9.875%, 5/1/07 100,500
Ba1 80 Millennium America, Inc., Sr.
Notes,
9.25%, 6/15/08 81,000
B1 24 NL Industries, Inc., Sr. Sec'd.
Notes,
11.75%, 10/15/03 24,240
Ca 125 Sterling Chemicals, Inc., Sr. Sub.
Notes,
12.375%(b), 7/15/06 100,000
----------------
717,040
-------------------------------------------------------------------------------------
Computers
B1 90 Seagate Technology International,
Inc., Gtd. Notes,
12.50%, 11/15/07 88,763
-------------------------------------------------------------------------------------
Computer Services
Ba1 100 Unisys Corp., Sr. Notes,
8.125%, 6/1/06 97,500
-------------------------------------------------------------------------------------
Consulting 0.1%
B2 250 Comdisco, Inc., Sr. Notes,
9.50%, 8/15/03 206,250
-------------------------------------------------------------------------------------
Consumer Products 0.1%
B1 200 Elizabeth Arden, Inc., Sr. Sec.
Notes,
Ser. B,
11.75%, 2/1/11 213,000
32 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Consumer Services 0.4%
B2 $ 200 Alliance Atlantis Commerce, Inc.,
Sr. Sub. Notes,
13.00%, 12/15/09 $ 212,000
B3 190 Kindercare Learning Center, Inc.,
Sr. Sub. Notes,
9.50%, 2/15/09 188,575
Service Corp. International,
Notes,
B1 300 6.30%, 3/15/03 279,000
Notes,
B1 250 6.50%, 3/15/08 199,375
----------------
878,950
-------------------------------------------------------------------------------------
Distribution/Wholesalers 0.1%
B3 115 Core-Mark Int'l, Inc., Sr. Sub.
Notes,
11.375%, 9/15/03 110,975
-------------------------------------------------------------------------------------
Diversified Manufacturing Operations 0.3%
B1 25 American Axle & Manufacturing,
Inc., Sr. Sub. Notes,
9.75%, 3/1/09 25,750
B2 80 Applied Extrusion Tech, Inc., Sr.
Notes,
10.75%, 7/1/11 83,200
B2 30 Blount, Inc., Sr. Notes,
7.00%, 6/15/05 20,100
Baa1 300 Cox Enterprises, Inc., Bonds,
5.21375%, 8/1/03 300,020
B2 150 Gentek, Inc., Gtd. Notes,
11.00%, 8/1/09 112,125
B2 55 Terex Corp., Sr. Sub. Notes,
10.375%, 4/1/11 56,925
B3 55 United States Can Corp., Gtd.
Notes,
Ser. B,
12.375%, 10/1/10 52,250
----------------
650,370
See Notes to Financial Statements 33
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Diversified Operations 0.1%
B3 $ 75 Nextmedia Operating, Inc., Sr. Sub.
Notes,
10.75%, 7/1/11 $ 78,094
Ba3 250 Stena AB, (Sweden), Sr. Notes,
8.75%, 6/15/07 223,750
----------------
301,844
-------------------------------------------------------------------------------------
Electronic Components 0.1%
Ba3 90 Flextronics International Ltd.
(Singapore), Sr. Sub. Notes,
9.875%, 7/1/10 92,700
B3 125 Motors & Gears, Inc., Sr. Notes,
10.75%, 11/15/06 124,375
----------------
217,075
-------------------------------------------------------------------------------------
Energy 0.1%
Ba2 100 AES Drax Energy Ltd., Sr. Sec.
Notes, Ser. B,
11.50%, 8/30/10 108,500
B1 40 El Paso Energy Partners LP, Sr.
Sub. Notes,
8.50%, 6/1/11 40,000
Baa3 50 PSEG Energy Holdings,
10.00%, 10/1/09 55,456
----------------
203,956
-------------------------------------------------------------------------------------
Engineering & Construction 0.2%
Ba3 429 CSC Holdings, Inc., Sr. Sub. Debs.,
10.50%, 5/15/16 459,030
-------------------------------------------------------------------------------------
Financial Services 1.4%
B3 25 Actuant Finance Corp., Sr. Sub.
Notes,
13.00%, 5/1/09 25,500
Baa3 175 AES Drax Holdings Ltd., Sr. Sec.
Bonds,
10.41%, 12/31/20 195,125
34 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Americredit Corp., Gtd.
Gtd. Notes,
Ba1 $ 100 9.25%, 2/1/04 $ 100,000
Ba1 250 9.875%, 4/15/06 255,000
NR 100 Coinstar, Inc., Sr. Disc. Notes,
13.00%, 10/1/06 99,000
Conseco, Inc., Notes,
B1 750 8.75%, 2/9/04 701,250
Sr. Notes,
B1 215 10.75%, 6/15/08 211,775
NR 188 Credit Asset Receivable LLC, Sr.
Sec'd. Notes,
6.274%, 10/31/03 188,870
B3 300 Finova Capital Corp., MTN,
5.98%, 2/27/49 287,250
Ba1 50 Golden State Holdings, Inc., Sr.
Notes,
7.125%, 8/1/05 49,475
Midland Funding II,
Debs.,
Ba3 75 13.25%, 7/23/06 88,052
Ba3 200 11.75%, 7/23/05 218,808
Ba3 500 Orion Power Holdings, Inc., Sr.
Notes,
12.00%, 5/1/10 560,000
----------------
2,980,105
-------------------------------------------------------------------------------------
Food & Beverage 0.3%
B3 150 Agrilink Foods, Inc., Sr. Sub.
Notes,
11.875%, 11/1/08 141,187
Great Atlantic & Pacific Tea Co.,
Inc.,
Sr. Notes,
B2 150 7.70%, 1/15/04 137,250
Notes,
B2 150 7.75%, 4/15/07 127,500
B1 150 Pilgrim's Pride Corp., Sr. Sub.
Notes,
10.875%, 8/1/03 150,375
See Notes to Financial Statements 35
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Ba2 $ 150 Winn Dixie Stores, Inc., Sr. Notes,
8.875%, 4/1/08 $ 153,000
----------------
709,312
-------------------------------------------------------------------------------------
Health Care 0.9%
Columbia/HCA Healthcare Co.,
Deb. Notes,
Ba1 50 8.36%, 4/15/24 48,500
Ba1 200 6.73%, 7/15/45 201,500
Notes,
Ba1 55 9.00%, 12/15/14 58,575
B3 200 Concentra Operating Corp., Sr. Sub.
Notes, Ser. B,
13.00%, 8/15/09 216,000
Fresenius Medical Capital Trust II,
Gtd.
Notes,
Ba2 75 7.875%, 2/1/08 74,250
Ba2 125 9.00%, 12/1/06 130,000
C 250 Integrated Health Services, Inc.,
Sr. Sub. Notes, Ser. A,
9.25%,(b) 1/15/08 1,250
Ba3 100 La Quinta Inns, Inc., Sr. Notes,
7.40%, 9/15/05 92,000
B2 55 LifePoint Hospitals Holdings, Inc.,
Sr. Sub. Notes,
10.75%, 5/15/09 61,600
B3 325 Magellan Health Services, Inc., Sr.
Sub. Notes,
9.00%, 2/15/08 308,750
B2 200 Matria Healthcare, Inc., Sr. Notes,
11.00%, 5/1/08 192,500
Ba3 250 Meditrust, Notes,
7.82%, 9/10/26 241,875
B3 200 Select Med Corp., Sr. Sub. Notes,
9.50%, 6/15/09 195,000
B2 90 Triad Hospitals Holdings, Inc.,
Gtd. Notes,
11.00%, 5/15/09 98,775
----------------
1,920,575
36 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Hotels & Leisure 0.5%
B2 $ 35 Argosy Gaming, Sr. Notes,
9.00%, 9/1/11 $ 35,437
B3 60 Ballys Total Fitness Holdings, Sr.
Sub. Notes, Ser. C,
9.875%, 10/15/07 60,300
B2 115 Carrols Corp., Sr. Sub. Notes,
9.50%, 12/1/08 102,350
B2 110 Extended Stay Amererica, Inc., Sr.
Sub. Notes,
9.875%, 6/15/11 110,550
Felcor Lodging LP,
Notes,
Ba2 30 9.50%, 9/15/08 30,984
Gtd. Sr. Notes,
Ba2 250 7.375%, 10/1/04 245,555
Ba2 300 HMH Properties, Inc., Gtd. Notes,
Ser. B,
7.875%, 8/1/08 287,250
Ba1 120 ITT Corp., Deb. Notes,
7.375%, 11/15/15 111,364
Ba3 75 La Quinta Inns, Inc., Sr. Notes,
7.25%, 3/15/04 70,875
B3 95 Premier Parks, Inc., Sr. Notes,
9.75%, 6/15/07 97,375
----------------
1,152,040
-------------------------------------------------------------------------------------
Internet
Ca 35 Exodus Communications, Inc., Sr.
Notes,
11.625%, 7/15/10 11,550
-------------------------------------------------------------------------------------
Manufacturing
Polymer Group, Inc.,
Sr. Sub. Notes, Ser. B,
Ca 20 9.00%, 7/1/07 8,600
Ca 25 8.75%, 3/1/08 9,750
B2 5 Sun World International, Inc., Gtd.
Notes,
Ser. B,
11.25%, 4/15/04 4,625
See Notes to Financial Statements 37
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
B2 $ 10 Venture Holdings Trust, Sr. Notes,
Ser. B,
9.50%, 7/1/05 $ 7,825
----------------
30,800
-------------------------------------------------------------------------------------
Media 0.3%
B2 250 Ackerley Group, Inc., Sr. Sub.
Notes,
Ser. B,
9.00%, 1/15/09 225,000
B2 150 Canwest Media, Inc., Sr. Sub.
Notes,
10.625%, 5/15/11 156,750
Lin Holdings Corp., Sr. Disc.
Notes,
Zero Coupon (until 9/1/03)
B3 75 10.00%, 3/1/08 54,563
Zero Coupon (until 3/1/03)
B3 175 10.00%, 3/1/08 136,500
----------------
572,813
-------------------------------------------------------------------------------------
Medical Products & Services 0.1%
B2 120 Bio-Rad Labs, Inc., Sr. Sub. Notes,
11.625%, 2/15/07 130,800
-------------------------------------------------------------------------------------
Oil & Gas 0.5%
B2 55 Comstock Resources, Inc., Sr.
Notes,
11.25%, 5/1/07 57,750
Ba2 250 Eott Energy Partners, Sr. Notes,
11.00%, 10/1/09 268,750
B2 20 Houston Exploration Co., Sr. Sub.
Notes,
8.625%, 1/1/08 19,800
B1 80 Parker Drilling Co., Sr. Notes,
Ser. D,
9.75%, 11/15/06 80,000
Baa3 200 Petroleos Mexicanos (Mexico), Gtd.
Notes,
9.375%, 12/2/08 214,000
B2 55 Swift Energy Co., Sr. Sub. Notes,
10.25%, 8/1/09 58,231
Ba3 250 Triton Energy Ltd., Sr. Notes,
9.25%, 4/15/05 270,000
----------------
968,531
38 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Paper & Packaging 0.6%
Ba1 $ 60 Caraustar Industries, Inc., Sr.
Sub. Notes,
9.875%, 4/1/11 $ 59,550
Doman Industries Ltd. (Canada),
Gtd. Notes,
B3 45 12.00%, 7/1/04 45,675
Sr. Notes,
Caa1 15 8.75%, 3/15/04 9,000
Caa1 95 9.25%, 11/15/07 52,250
B1 20 Norampac, Inc., Sr. Notes,
9.50%, 2/1/08 20,700
B3 135 Packaged Ice, Inc., Sr. Notes,
9.75%, 2/1/05 106,650
B2 150 Radnor Holdings Corp., Sr. Notes,
10.00%, 12/1/03 120,000
B3 80 Riverwood International Corp., Sr.
Notes,
10.625%, 8/1/07 82,400
B1 150 Silgan Holdings, Inc., Sr. Sub.
Debs.,
9.00%, 6/1/09 150,750
B2 515 Stone Container Corp., Sr. Notes,
11.50%, 8/15/06 545,900
----------------
1,192,875
-------------------------------------------------------------------------------------
Printing & Publishing 0.3%
B2 250 Mail Well I Corp., Sr. Sub. Notes,
8.75%, 12/15/08 205,000
Ba3 175 Primedia, Inc., Sr. Notes,
8.875%, 5/15/11 168,000
Quebecor Media, Inc.,
Sr. Disc. Notes,
B2 150 13.75%, 7/15/11 88,500
Sr. Notes,
B2 150 11.125%, 7/15/11 158,250
----------------
619,750
-------------------------------------------------------------------------------------
Real Estate 0.1%
B2 75 Blum CB Corp., Sr. Sub. Notes,
11.25%, 6/15/11 72,750
See Notes to Financial Statements 39
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
B1 $ 100 Intrawest Corp., Sr. Notes,
10.50%, 2/1/10 $ 103,000
----------------
175,750
-------------------------------------------------------------------------------------
Restaurants 0.2%
Ba3 30 Sbarro, Inc., Sr. Notes,
11.00%, 9/15/09 30,713
Ba1 350 Tricon Global Restaurants, Inc.,
Sr. Notes,
8.875%, 4/15/11 360,500
----------------
391,213
-------------------------------------------------------------------------------------
Retail 0.4%
Dillards, Inc.,
Notes,
Ba1 75 6.125%, 11/1/03 70,055
Ba1 145 6.43%, 8/1/04 135,662
Baa3 175 Kmart Corp., Notes,
9.875%, 6/15/08 175,706
Rite Aid Corp, Sr. Notes,
Caa2 200 11.25%, 7/1/08 206,000
Debs.,
B1 25 6.875%, 8/15/13 18,469
B1 25 7.70%, 2/15/27 18,437
B2 25 6.875%, 12/15/28 16,938
Notes,
B2 100 6.00%, 12/15/05 81,500
Ba1 290 Saks, Inc., Notes,
7.375%, 2/15/19 211,700
----------------
934,467
-------------------------------------------------------------------------------------
Semiconductors 0.1%
Ba3 50 Amkor Tech, Inc.,
9.25%, 2/15/08 44,500
B2 80 Fairchild Semiconductor Corp., Sr.
Sub. Notes,
10.50%, 2/1/09 80,400
----------------
124,900
40 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Steel & Metals 0.2%
Ba2 $ 10 AK Steel Corp., Sr. Notes,
9.125%, 12/15/06 $ 10,300
Ba3 60 Century Aluminum Co., Sr. Sec.
First Mtg.,
11.75%, 4/15/08 62,550
Ba2 25 Leviathan Gas Pipeline Partners,
Sr. Sub. Notes,
10.375%, 6/1/09 26,625
Caa1 15 Lukens, Inc., Notes,
7.625%, 8/1/04 4,050
Ba2 45 United States Steel LLC, Sr. Notes,
10.75%, 8/1/08 45,225
USEC, Inc., Sr. Notes,
Ba1 175 6.625%, 1/20/06 160,109
Ba1 100 6.75%, 1/20/09 87,771
B3 70 WHX Corp., Sr. Notes,
10.50%, 4/15/05 35,700
----------------
432,330
-------------------------------------------------------------------------------------
Telecommunications 1.7%
B3 75 American Tower Corp., Sr. Notes,
9.375%, 2/1/09 69,375
B3 100 Coaxial Communications, Inc., Gtd.
Notes,
10.00%, 8/15/06 100,000
B3 20 Dobson Communications Corp., Sr.
Notes,
10.875%, 7/1/10 20,500
B1 150 Echostar Broadband Corp., Sr.
Notes,
10.375%, 10/1/07 153,000
B3 95 FairPoint Communications, Inc., Sr.
Sub. Notes,
12.50%, 5/1/10 83,600
Ba2 500 Global Crossing Holdings Ltd., Sr.
Notes,
9.50%, 11/15/09 375,000
B1 200 Insight Midwest LP, Sr. Notes,
10.50%, 11/1/10 215,000
See Notes to Financial Statements 41
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
B3 $ 150 International Wire Group, Inc., Sr.
Sub. Notes,
11.75%, 6/1/05 $ 150,000
Level 3 Communications, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 12/1/03)
B3 130 10.50%, 12/1/08 42,900
Zero Coupon (until 3/15/05),
B3 500 12.875%, 3/15/10 140,000
Sr. Notes, Zero Coupon (until
3/15/05),
B3 30 11.00%, 3/15/08 16,950
McLeodUSA, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 3/1/02),
B1 50 10.50%, 3/1/07 24,500
Sr. Notes,
B3 215 11.375%, 1/1/09 124,700
B3 160 Microcell Telecommunications, Inc.,
Sr. Disc. Notes,
Zero Coupon (until 6/1/04)
12.00%, 6/1/09 67,200
B3 65 Millicom International Cellular SA
(Luxumburg), Sr. Disc. Notes,
13.50%, 6/1/06 56,550
B2 250 Netia Holdings BV (Poland), Gtd.
Sr. Disc. Notes,
Zero Coupon, (until 11/1/01),
11.00%, 11/1/07 62,500
Nextel Communications, Inc., Sr.
Disc. Notes,
Zero Coupon (until 9/15/02)
B1 430 10.65%, 9/15/07 326,800
Sr. Notes,
B1 445 9.375%, 11/15/09 366,569
A3 80 Nortel Networks Ltd.,
6.125%, 2/15/06 70,198
B2 250 NTL Communications Corp., Sr.
Notes, Zero Coupon (until 10/1/03)
12.375%, 10/1/08 110,000
42 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Baa3 $ 65 Rogers Wireless, Inc., Sr. Sec'd.
Notes,
9.625%, 5/1/11 $ 65,812
B3 55 Spectrasite Holdings, Inc., Sr.
Disc. Notes, Zero Coupon (until
3/15/05) 12.875%, 10/15/08 19,250
B3 125 Star Choice Communications, Sr.
Sec'd. Notes,
13.00%, 12/15/05 131,250
Tritel PCS, Inc., Gtd. Notes,
Zero Coupon (until 5/1/04)
B3 110 12.75%, 5/15/09 70,400
Sr. Sub. Notes,
B3 50 10.375%, 1/15/11 46,500
Voicestream Wireless Corp.,
Sr. Notes,
Baa1 130 10.375%, 11/15/09 148,362
Sr. Disc. Notes,
Zero Coupon, (until 11/15/04),
Baa1 240 11.875%, 11/15/09 199,800
Williams Communications Group,
Inc.,
Sr. Notes,
Caa1 25 10.70%, 10/1/07 10,875
Caa1 200 10.875%, 10/1/09 87,000
Caa1 100 11.875%, 8/1/10 43,500
B2 300 Young Broadcasting, Inc., Sr. Sub.
Notes,
10.00%, 3/1/11 294,000
----------------
3,692,091
-------------------------------------------------------------------------------------
Utilities 0.9%
AES Corp.,
Sr Sub. Debs.,
Ba1 100 8.875%, 11/1/27 91,000
Sr. Notes,
Ba1 100 8.75%, 12/15/02 101,250
Ba1 250 9.50%, 6/1/09 255,000
See Notes to Financial Statements 43
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Ba1 $ 500 Calpine Corp., Sr. Notes,
10.50%, 5/15/06 $ 523,043
Ba3 300 CMS Energy Corp., Sr. Notes,
9.875%, 10/15/07 320,274
A3 400 Commonwealth Edison Co., First
Mtge., Ser. 85,
7.375%, 9/15/02 412,816
Baa2 100 Reliant Energy Mid Atlantic, Ser. C
Pass-through Certs.,
9.681%, 7/2/26 112,449
Ba3 175 TNP Enterprises, Inc., Sr. Sub.
Notes,
10.25%, 4/1/10 190,750
----------------
2,006,582
-------------------------------------------------------------------------------------
Waste Management 0.3%
Allied Waste of North America,
Inc.,
Sr. Notes,
Ba3 75 7.375%, 1/1/04 74,062
Ba3 250 7.875%, 1/1/09 246,250
Sr. Sub. Notes,
B2 195 10.00%, 8/1/09 201,825
Ba1 100 Waste Management, Inc., Debs.,
8.75%, 5/1/18 103,771
----------------
625,908
----------------
Total corporate bonds 29,940,785
----------------
CONVERTIBLE BONDS 0.2%
-------------------------------------------------------------------------------------
Financial Services
A2 500 Hellenic Finance,
2.00%, 7/15/03 435,661
----------------
SOVEREIGN BONDS 3.8%
Ba3 500 Egyptian Government Bonds,
8.75%, 7/11/11 498,000
German Government Bonds,
Aaa 2,000 6.00%, 1/5/06 1,861,738
Aaa 30 6.25%, 1/4/24 28,714
Aaa 580 6.50%, 7/4/27 574,492
44 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
German Government Bonds,
Aaa $ 2,800 6.00%, 7/4/07 $ 2,631,565
Aaa 2,800 5.25%, 1/4/08 2,524,407
----------------
Total sovereign bonds 8,118,916
----------------
COLLATERALIZED MORTGAGE OBLIGATIONS 2.6%
Aaa 1,131 Banktrust Mortgage Trust, Ser. 1
Class G,
5.70%, 12/1/23 1,119,483
Aaa 500 Bear Stearns Mortgage Secs., Inc.,
Ser. 97-7 Class A-9,
7.00%, 2/25/28 505,155
Aaa 85 Capital Asset Research Funding LP,
Ser. 97-A, Class I,
6.40%, 12/15/04 85,105
Aaa 200 Contimortgage Home Equity Loan
Trust,
Ser. 1998-2, Class A4,
6.19%, 1/15/14 200,774
Aaa 100 FDIC Remic Trust, 1996 Class
Commercial Mortgage Pass-through
Certificate,
6.75%, 5/25/26 101,757
Federal Home Loan Mortgage Corp.,
Preassign. 00132,
Aaa 299 7.70%, 11/15/30 299,472
Series 119, Class H,
Aaa 487 7.50%, 1/15/21 498,348
Series C007, Class C007A,
Aaa 234 7.00%, 9/17/31 243,418
Aaa 226 Federal Home Loan Mortgage Pc
Guaranteed,
Ser. 1869, Class 1869B,
8.00%, 12/15/24 228,103
Aaa 576 Federal National Mortgage
Association,
Ser. 1998-73, Class MZ,
6.30%, 10/17/38 512,959
See Notes to Financial Statements 45
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Aaa $ 300 GE Capital Mortgage Services, Inc.,
Ser. 1999-5, Class A29,
6.50%, 5/25/29 $ 294,990
B1 300 Green Tree Financial Corp., Tranche
Trust 00007,
6.50%, 9/26/02 288,294
Aaa 61 Government National Mortgage,
Assoc., Single Family, 008052
7.75%, 9/20/22 62,240
Aaa 397 PNC Mortgage Secs. Corp., Ser.
1999-9, Class A3,
7.25%, 10/25/29 412,603
Residential Funding Mortgage,
Ser. 1993-S36, Class A9,
Aaa 63 6.478%, 10/25/08 62,882
Ser. 1994-S5, Class A6,
Aa1 500 6.50%, 2/25/24 480,155
Ser. 1999-S8, Class A1,
Aaa 193 6.25%, 3/25/14 193,920
----------------
Total collateralized mortgage
obligations 5,589,658
----------------
U.S. GOVERNMENT AND AGENCY SECURITIES 14.9%
Federal National Mortgage
Association,
767 6.00%, 8/1/06(c) 777,594
12,500 6.00%, TBA(a) 12,226,625
400 6.25%, TBA(a) 403,961
700 7.50%, TBA(a) 720,342
Government National Mortgage
Association,
212 7.00%, 10/20/27(c) 217,601
1,520 7.50%, 12/15/28(c) 1,574,146
595 8.50%, 5/15/30(c) 624,333
411 8.50%, 5/20/30(c) 429,874
571 8.50%, 7/15/30(c) 599,152
66 8.50%, 7/15/30(c) 69,258
166 8.50%, 9/15/30(c) 174,199
46 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
$ 828 8.50%, 4/20/31(c) $ 866,766
400 7.50%, TBA(a) 412,313
United States Treasury Bonds,
1,100 7.50%, 11/15/16(c) 1,325,324
1,000 United States Treasury Bonds, P/O,
Zero Coupon, 2/15/19(c) 362,200
1,300 Zero Coupon, 2/15/15(c) 607,815
1,000 Zero Coupon, 5/15/18(c) 379,220
United States Treasury Notes,
500 7.00%, 7/15/06(c) 552,265
3,252 3.375%, 1/15/07(c) 3,308,052
1,870 3.625%, 1/15/08(c) 1,920,687
217 3.875%, 1/15/09(c) 225,477
3,700 6.50%, 2/15/10(c) 4,080,397
----------------
Total U.S. government and agency
securities 31,857,601
----------------
Total debt obligations 75,942,621
----------------
Total long-term investments
(cost $207,338,957) 206,442,689
----------------
SHORT-TERM INVESTMENTS 13.0%
CORPORATE BONDS 2.0%
-------------------------------------------------------------------------------------
Airlines 0.2%
Baa3 400 AMR Corp., Notes,
8.47%, 2/20/02 408,976
-------------------------------------------------------------------------------------
Banking 0.2%
Korea Development Bank, Sr. Notes,
Baa2 300 7.90%, 2/1/02 305,034
Baa2 200 7.125%, 9/17/01 200,336
----------------
505,370
-------------------------------------------------------------------------------------
Cable 0.1%
B2 150 Adelphia Communications Corp.,
Sr. Notes,
10.875%, 10/1/10 150,000
See Notes to Financial Statements 47
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
Consulting
B2 $ 65 Comdisco, Inc., Sr. Notes,
6.00%, 1/30/02 $ 52,975
-------------------------------------------------------------------------------------
Financial Services 0.7%
A2 400 General Motors Acceptance Corp.,
MTN,
4.07%, 10/5/01 398,114
Golden State Holdings, Notes,
Ba1 100 5.31375%, 8/1/01 98,134
Ba1 100 6.75%, 8/1/01 100,000
Aa3 600 Morgan Stanley Dean Witter, Sr.
Notes,
3.96%, 10/22/01 600,035
Aa1 300 PaineWebber Group, Inc., Sr. Notes,
4.33%, 10/15/01 301,238
----------------
1,497,521
-------------------------------------------------------------------------------------
Media 0.1%
Baa1 265 Time Warner, Inc., Series 97-1,
Pass-through Certificates,
6.10%, 12/30/01 266,945
-------------------------------------------------------------------------------------
Steel & Metals 0.1%
B2 225 Kaiser Aluminum & Chemical, Corp.,
Sr. Notes,
9.875%, 2/15/02 220,500
-------------------------------------------------------------------------------------
Utilities 0.6%
Baa1 300 Enron Corp., Bonds,
4.36813%, 9/10/01 300,113
Caa2 400 Pacific Gas & Electric Co., Sr.
Notes,
Zero Coupon(b), 10/31/01 328,000
Baa3 200 Southern California Edison Co.,
6.51375%, 8/1/01 160,000
48 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Moody's Principal
Rating Amount
(Unaudited) (000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
A3 $ 400 TXU Electric Co., First Mtg. Bond,
Class B,
4.53688%, 9/20/01 $ 400,354
----------------
1,188,467
----------------
Total corporate bonds 4,290,754
----------------
SOVEREIGN BONDS 0.2%
B2 600 Brazilian Government Bonds,
5.4375%, 10/15/01 521,250
----------------
COLLATERALIZED MORTGAGE OBLIGATIONS 1.2%
A2 500 Bear Stearns Cos., Inc.,
Tranche Trust 00379,
4.1475%, 9/21/01 499,657
Aaa 1,100 Brazos Student Finance Corp.,
Student Loan Assoc. Bkd. Notes,
5.098587%, 9/3/01 1,096,683
A2 200 CIT Group, Inc., Tranche Senior
00048,
4.27%, 10/7/01 200,705
Aaa 490 Credit Suisse First Boston Mtg.,
Wash. Mut. Mtg. 1999 Cl. M 1,
6.60516%, 7/31/01 492,978
Aaa 88 Istar Receivables Trust, Ser.
2000-1, Class A,
4.105%, 8/25/01 87,658
Aaa 181 Salomon Brothers Mortgage, Ser.
1999-LB1, Class A,
4.105%, 8/26/01 180,690
----------------
Total collateralized mortgage
obligations 2,558,371
----------------
U.S. GOVERNMENT AND AGENCY SECURITIES 0.8%
Federal National Mortgage
Association,
370 4.42%, 8/17/01 370,768
965 5.50%, 8/29/01 914,657
See Notes to Financial Statements 49
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Portfolio of Investments as of July 31, 2001 Cont'd.
Principal
Amount
(000) Description Value (Note 1)
-------------------------------------------------------------------------------------------
$ 312 Government National Mortgage
Association,
7.00%, 8/1/01 $ 317,462
----------------
Total U.S. government and agency
securities 1,602,887
----------------
Total debt obligations 8,973,262
----------------
REPURCHASE AGREEMENT 8.8%
18,888 Joint Repurchase Agreement Account,
3.87%, 8/1/01 (Note 5) 18,888,000
----------------
Total short-term investments
(cost $28,072,361) 27,861,262
----------------
Total Investments 109.2%
(cost $235,411,318; Note 4) 234,303,951
Liabilities in excess of other
assets (9.2%) (19,829,993)
----------------
Net Assets 100% $ 214,473,958
----------------
----------------
------------------------------
(a) Non-income producing security.
(b) Represents issuer in default on interest payments.
(c) All or a portion of security segregated as collateral for TBA.
AB--Antiebolay (Swedish Company).
ADR--American Depository Receipt.
AG--Aktiengesellschate (German Company).
BV--Beloten Vennootschap (Dutch Company).
LLC--Limited Liability Company.
LP--Limited Partnership.
MTN--Medium Term Note.
NR--Not Rated by Moody's or Standard & Poor's
NV--Naamkee Vennootschap (Dutch Corporation).
Oy--Osakeyhtio (Finnish Stock Company).
P/O--Principal Only.
PLC--Public Limited Company (British Corporation).
REIT--Real-Estate Investment Trust.
SA--Sociedad Anomima (Spanish Corporation) or Societe Anonyme (French
Corporation).
SpA--Societa par Atione (Italian Corporation).
TBA--Securities purchased on a forward commitment basis.
The Fund's current Prospectus contains a description of Moody's and Standard &
Poor's ratings.
50 See Notes to Financial Statements
This page intentionally left blank
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Statement of Assets and Liabilities
July 31, 2001
---------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $235,411,318) $ 234,303,951
Foreign currency, at value (cost $93,533) 92,965
Receivable for investments sold 5,117,971
Interest and dividends receivable 1,258,875
Receivable for Fund shares sold 712,206
Tax reclaim receivable 19,043
Unrealized appreciation on forward currency contracts 4,218
-------------
Total assets 241,509,229
-------------
LIABILITIES
Payable to custodian 78,456
Payable for investments purchased 25,534,663
Payable for Fund shares reacquired 1,026,394
Distribution fee payable 139,719
Management fee payable 135,304
Accrued expenses and other liabilities 117,336
Withholding taxes payable 3,399
-------------
Total liabilities 27,035,271
-------------
NET ASSETS $ 214,473,958
-------------
-------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 20,134
Paid-in capital in excess of par 218,122,410
-------------
218,142,544
Undistributed net investment income 1,688,868
Accumulated net realized loss on investments (4,113,442)
Net unrealized depreciation on investments (1,244,012)
-------------
Net assets, July 31, 2001 $ 214,473,958
-------------
-------------
52 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Statement of Assets and Liabilities Cont'd.
July 31, 2001
---------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($58,516,834
/ 5,471,150 shares of beneficial interest issued and
outstanding) $10.70
Maximum sales charge (5% of offering price) .56
-------------
Maximum offering price to public $11.26
-------------
-------------
Class B:
Net asset value, offering price and redemption price per
share ($117,663,808 / 11,065,170 shares of beneficial
interest issued and outstanding) $10.63
-------------
-------------
Class C:
Net asset value and redemption price per share ($34,021,013
/ 3,199,348 shares of beneficial interest issued and
outstanding) $10.63
Sales charge (1% of offering price) .11
-------------
Offering price to public $10.74
-------------
-------------
Class Z:
Net asset value, offering price and redemption price per
share ($4,272,303 / 398,480 shares of beneficial interest
issued and outstanding) $10.72
-------------
-------------
See Notes to Financial Statements 53
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Statement of Operations
Year
Ended
July 31, 2001
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (net of foreign withholding taxes of $1,709) $ 5,867,313
Dividends (net of foreign withholding taxes of $57,766) 1,551,095
-------------
Total income 7,418,408
-------------
Expenses
Management fee 1,496,013
Distribution fee--Class A 141,568
Distribution fee--Class B 1,095,338
Distribution fee--Class C 306,226
Custodian's fees and expenses 436,000
Reports to shareholders 251,000
Transfer agent's fees and expenses 242,000
Registration fees 73,000
Audit fees 25,000
Trustees' fees and expenses 21,000
Legal fees 19,000
Miscellaneous 10,513
-------------
Total expenses 4,116,658
-------------
Net investment income 3,301,750
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (2,472,830)
Foreign currency transactions (153,480)
-------------
(2,626,310)
-------------
Net change in unrealized appreciation (depreciation) on:
Investments (11,795,929)
Foreign currencies (132,971)
Interest Rate Swaps (3,410)
-------------
(11,932,310)
-------------
Net loss on investments and foreign currencies (14,558,620)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (11,256,870)
-------------
-------------
54 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Statement of Changes in Net Assets
Year Ended July 31,
------------------------------
2001 2000
----------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income $ 3,301,750 $ 2,431,469
Net realized gain (loss) on investment and
foreign currency transactions (2,626,310) 10,087,355
Net change in unrealized appreciation
(depreciation) of investments and foreign
currencies (11,932,310) 4,428,145
------------- -------------
Net increase (decrease) in net assets
resulting from operations (11,256,870) 16,946,969
------------- -------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (647,380) (845,618)
Class B (883,997) (1,192,915)
Class C (234,932) (367,691)
Class Z (23,928) (80,073)
------------- -------------
(1,790,237) (2,486,297)
------------- -------------
Distributions from net realized gains
Class A (2,725,332) (197,082)
Class B (5,430,267) (490,277)
Class C (1,443,155) (167,209)
Class Z (91,171) (35,210)
------------- -------------
(9,689,925) (889,778)
------------- -------------
Fund share transactions (net of share
conversions)
(Note 6)
Net proceeds from shares sold 88,346,449 96,274,299
Net asset value of shares issued in
reinvestment of dividends and distributions 11,170,245 3,273,405
Cost of shares reacquired (40,429,816) (49,998,187)
------------- -------------
Net increase in net assets from Fund shares
transactions 59,086,878 49,549,517
------------- -------------
Total increase 36,349,846 63,120,411
NET ASSETS
Beginning of year 178,124,112 115,003,701
------------- -------------
End of year(a) $ 214,473,958 $ 178,124,112
------------- -------------
------------- -------------
------------------------------
(a) Includes undistributed net investment income
of: $ 1,688,868 $ 403,745
------------- -------------
See Notes to Financial Statements 55
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements
Strategic Partners Asset Allocation Funds (the 'Trust'), formerly
Prudential Diversified Funds, is registered under the Investment Company Act of
1940 as an open-end, diversified management investment company presently
consisting of three Portfolios: Strategic Partners Moderate Growth Fund (the
'Fund'), Strategic Partners Conservative Growth Fund and Strategic Partners High
Growth Fund. These financial statements relate only to Strategic Partners
Diversified Moderate Growth Fund. The financial statements of the other
Portfolios are not presented herein. The Trust was organized as a business trust
in Delaware on July 29, 1998. The Fund's Advisers consist of Jennison Associates
LLC ('Jennison'), Prudential Investment Management, Inc. ('PIM'), formerly known
as Prudential Investment Corporation, Lazard Asset Management, Pacific
Investment Company, Franklin Advisers, Inc., and the Dryfus Corporation.
The investment objective of the Fund is to provide capital appreciation
and a reasonable level of current income. The Fund seeks to achieve its
investment objective by investing in a diversified portfolio of equity and fixed
income securities. The ability of the issuers of the debt securities held by the
Fund to meet their obligations may be affected by economic developments in a
specific industry or country.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements.
Securities Valuation: Securities for which the primary market is on an
exchange and NASDAQ National Market Securities are valued at the last sales
price on such exchange on the day of valuation, or, if there was no sale on such
day, at the mean between the last bid and asked prices on such day or at the bid
price on such day in the absence of an asked price. Securities that are actively
traded in the over-the-counter market, including listed securities for which the
primary market is believed by Prudential Investments Fund Management LLC ('PIFM'
or the 'Manager'), in consultation with the Adviser, to be over-the-counter, are
valued by an independent pricing agent or principal market maker. U.S.
government securities for which market quotations are available shall be valued
at a price provided by an independent pricing agent or broker-dealer. Privately
placed securities including equity securities for which market prices may be
obtained from primary dealers shall be valued at the bid prices provided by such
primary dealers. Securities for which market quotations are not readily
available may be valued using the last available, market quotation for a period
not to exceed five days, provided the Manager and Adviser feel this is
representative of market value; after that period, such securities are valued in
good faith under procedures adopted by the Trustees.
56
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.
All securities are valued as of 4:15 p.m., New York time.
Repurchase Agreements: In connection with transactions in repurchase
agreements with U.S. financial institutions, it is the Fund's policy that its
custodian or designated subcustodians, as the case may be under triparty
repurchase agreements, take possession of the underlying securities, the value
of which exceeds the principal amount of the repurchase transaction, including
accrued interest. If the seller defaults and the value of the collateral
declines or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of the collateral by the Fund may be delayed or
limited.
Options: The Fund may either purchase or write options in order to
hedge against adverse market movements or fluctuations in value caused by
changes in prevailing interest rates or foreign currency exchange rates with
respect to securities or currencies which the Fund currently owns or intends to
purchase. When the Fund writes an option, it receives a premium and an amount
equal to that premium is recorded as a liability. When the Fund purchases an
option, it pays a premium and an amount equal to that premium is recorded as an
asset. The asset or liability is adjusted daily to reflect the current market
value of the option. If an option expires unexercised, the Fund realizes a gain
(loss) to the extent of the premium received or paid. If an option is exercised,
the premium received or paid is recorded as an adjustment to the proceeds from
the sale or the cost basis of the purchase in determining whether the Fund has
realized a gain (loss). The difference between the premium and the amount
received or paid on effecting a closing purchase or sale transaction is also
treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss on
written options is presented separately as net realized gain (loss) on written
option transactions.
The Fund, as writer of an option, has no control over whether the
underlying securities or currencies may be sold (called) or purchased (put). As
a result, the Fund bears the market risk of an unfavorable change in the price
of the security or currency underlying the written option. The Fund, as
purchaser of an option, bears the risk of the potential inability of the
counterparties to meet the terms of their contracts.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
57
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
(i) market value of investment securities, other assets and liabilities -
at the closing daily rates of exchange.
(ii) purchases and sales of investment securities, income and expenses -
at the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the period. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the fiscal period. Accordingly, realized foreign currency gains
(losses) are included in the reported net realized gains (losses) on investment
transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from the holdings of foreign currencies,
currency gains (losses) realized between the trade and settlement dates on
security transactions, and the difference between the amounts of dividends,
interest and foreign taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Forward Currency Contracts: A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
Swaps: The Fund may enter into swap agreements. A swap agreement is an
agreement between two parties to exchange a series of cash flows at specified
58
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
intervals. Based on a notional amount, each party pays an interest rate or the
change in the value of a security. Dividends and interest on the securities in
the swap are included in the value of the exchange. The swaps are valued daily
at current market value and any unrealized gain or loss is included in the net
unrealized appreciation or depreciation on investments. Gain or loss is realized
on the termination date of the swap and is equal to the difference between the
Fund's basis in the swap and the proceeds of the closing transaction, including
fees. During the period that the swap agreement is open, the Fund may be subject
to risk from the potential inability of the counterparty to meet the terms of
the agreement.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains (losses) on sales of
investment and currency transactions are calculated on the identified cost
basis. Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis. The Fund amortizes premiums and discounts on
portfolio securities as adjustments to interest income. Expenses are recorded on
the accrual basis which may require the use of certain estimates by management.
Net investment income (loss) (other than distribution fees) and unrealized
and realized gains (losses) are allocated daily to each class of shares based
upon the relative proportion of net assets of each class at the beginning of the
day.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income semi-annually, and distributions of net realized capital and
currency gains, if any, declared annually. Dividends and distributions are
recorded on the ex-dividend date.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
Taxes: For federal income tax purposes, each Fund in the Trust is
treated as a separate taxpaying entity. It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income and capital gains, if
any, to shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified
59
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
Public Accountants' Statement of Position 93-2: Determination, Disclosure and
Financial Statement Presentation of Income, Capital Gains, and Return of Capital
Distributions by Investment Companies. The effect of applying this statement was
to increase accumulated net realized loss on investments by $901,927, decrease
undistributed net investment income by $226,390 and increase paid-in capital in
excess of par by $1,128,317 for redemptions utilized as distributions for
federal income tax purposes and realized and recognized currency gains during
the period. Net investment income, net realized gains and net assets were not
affected by this change.
Note 2. Agreements
The Fund has a management agreement with PIFM. Pursuant to this agreement, PIFM
manages the investment operations of the Fund, administers the Fund's affairs
and supervises the Advisers' performance of all investment advisory services.
PIFM pays for the costs pursuant to the advisory agreements, the cost of
compensation of officers of the Fund, occupancy and certain clerical and
accounting costs of the Fund. The Fund bears all other costs and expenses. The
management fee paid to PIFM is computed daily and payable monthly at an annual
rate of .75% of the average daily net assets of the Fund. PIFM, in turn, pays
the Advisers' fees, based on the average daily net assets of the Fund segments
they manage.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution (the 'Class A, B and C Plans') regardless of
expenses actually incurred by PIMS. The distribution fees are accrued daily and
payable monthly. No distribution or service fees are paid to PIMS as distributor
for Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, B and C shares, respectively, for the year ended July 31,
2001.
PIMS has advised the Fund that it has received approximately $182,900 and
$125,200 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended July 31, 2001.
PIMS has advised the Fund that for the year ended July 31, 2001, it has
received approximately $231,900 and $19,100 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
60
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
Jennison, PIMS, PIM and PIFM are indirect, wholly owned subsidiaries of
The Prudential Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $500 million.
Interest on any such borrowings will be at market rates. The Funds pay a
commitment fee of .080 of 1% of the unused portion of the credit facility. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
The expiration date of the SCA is March 7, 2002. Prior to March 9, 2001, the
maximum commitment was $1 billion and the commitment fee was .080 of 1% of the
unused portion of the credit facility. Effective September 14, 2001, the
commitment under the SCA was increased to $930 million through December 31,
2001. Effective January 1, 2002, the commitment will be reduced to $500 million.
All other terms and conditions are unchanged. The purpose of the agreement is to
serve as an alternative source of funding for capital share redemptions. The
Fund did not borrow any amounts pursuant to the SCA during the year ended July
31, 2001.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PIFM and an
indirect wholly owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the year ended July 31, 2001, the Fund incurred fees of
approximately $202,100 for the services of PMFS. As of July 31, 2001
approximately $18,800 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to nonaffiliates. For the year ended July 31, 2001, Prudential Securities
Incorporated, a wholly owned subsidiary of Prudential, earned approximately $30
in brokerage commission fees from portfolio transactions executed on behalf of
the Fund.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments,
for the year ended July 31, 2001, aggregated $544,151,163 and $486,450,962,
respectively.
61
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
At July 31, 2001, the Fund had outstanding forward currency contracts both
to purchase and sell foreign currencies, as follows:
Value at Value at
Foreign Currency July 31, Settlement Date
Purchase Contract 2001 Payable Appreciation
----------------------------------------- ----------- --------------- --------------
EUR 147,000,
expiring 8/21/01 $ 128,666 $ 124,448 $4,218
----------- --------------- -------
----------- --------------- -------
The United States federal income tax basis of the Fund's investments at
July 31, 2001 was $237,491,745 and accordingly, net unrealized depreciation of
investments for federal income tax purposes was $3,187,794 (gross unrealized
appreciation $13,514,556, gross unrealized depreciation $16,702,350).
For federal income tax purposes, the Fund has elected to treat currency
losses of $116,545 and capital losses of $2,080,595 incurred in the nine month
period ended July 31, 2001 as having occurred in the next fiscal year.
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of July 31, 2001, the Fund
had a 3.31% undivided interest in the joint account. The undivided interest for
the Fund represents $18,888,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Deutsche Bank Alex. Brown, 3.87%, in the principal amount of $65,821,000,
repurchase price $65,828,075, due 8/1/01. The value of the collateral including
accrued interest was $67,137,420.
Greenwich Capital Markets, Inc., 3.87%, in the principal amount of
$180,000,000, repurchase price $180,019,350, due 8/1/01. The value of the
collateral including accrued interest was $183,603,519.
Morgan Stanley Co., Inc., 3.87%, in the principal amount of $180,000,000,
repurchase price $180,019,350, due 8/1/01. The value of the collateral including
accrued interest was $183,603,260.
State Street Bank & Trust Co., 3.87%, in the principal amount of
$145,661,000, repurchase price $145,676,658, due 8/1/01. The value of the
collateral including accrued interest was $148,578,786.
62
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualified to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
The Fund has authorized an unlimited number of shares of beneficial
interest at $.001 par value per share.
Transactions in shares of beneficial interest were as follows:
Class A Shares Amount
------------------------------------------------------------ ---------- ------------
Year ended July 31, 2001:
Shares sold 2,384,528 $ 26,932,178
Shares issued in reinvestment of dividends and distributions 305,915 3,288,581
Shares reacquired (1,496,350) (16,719,530)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 1,194,093 13,501,229
Shares issued upon conversion from Class B 222,872 2,518,136
---------- ------------
Net increase (decrease) in shares outstanding 1,416,965 $ 16,019,365
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 3,134,768 $ 36,505,644
Shares issued in reinvestment of dividends and distributions 86,639 1,018,090
Shares reacquired (1,196,414) (13,887,233)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 2,024,993 23,636,501
Shares issued upon conversion from Class B 153,988 1,821,985
---------- ------------
Net increase (decrease) in shares outstanding 2,178,981 $ 25,458,486
---------- ------------
---------- ------------
Class B
------------------------------------------------------------
Year ended July 31, 2001:
Shares sold 3,775,256 $ 42,088,513
Shares issued in reinvestment of dividends 573,011 6,154,140
Shares reacquired (1,383,908) (15,299,565)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 2,964,359 32,943,088
Shares reacquired upon conversion from Class A (223,494) (2,518,136)
---------- ------------
Net increase (decrease) in shares outstanding 2,740,865 $ 30,424,952
---------- ------------
---------- ------------
63
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Notes to Financial Statements Cont'd.
Class B Shares Amount
------------------------------------------------------------ ---------- ------------
Year ended July 31, 2000:
Shares sold 4,174,726 $ 48,125,208
Shares issued in reinvestment of dividends 139,553 1,627,356
Shares reacquired (1,240,994) (14,314,656)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion 3,073,285 35,437,908
Shares reacquired upon conversion from Class A (154,483) (1,821,985)
---------- ------------
Net increase (decrease) in shares outstanding 2,918,802 $ 33,615,923
---------- ------------
---------- ------------
Class C
------------------------------------------------------------
Year ended July 31, 2001:
Shares sold 1,351,621 $ 14,913,266
Shares issued in reinvestment of dividends 150,449 1,615,821
Shares reacquired (637,880) (7,061,147)
---------- ------------
Net increase (decrease) in shares outstanding 864,190 $ 9,467,940
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 864,615 $ 9,952,845
Shares issued in reinvestment of dividends 44,150 512,945
Shares reacquired (635,034) (7,388,381)
---------- ------------
Net increase (decrease) in shares outstanding 273,731 $ 3,077,409
---------- ------------
---------- ------------
Class Z
------------------------------------------------------------
Year ended July 31, 2001:
Shares sold 399,898 $ 4,412,492
Shares issued in reinvestment of dividends and distributions 10,381 111,703
Shares reacquired (123,697) (1,349,574)
---------- ------------
Net increase (decrease) in shares outstanding 286,582 $ 3,174,621
---------- ------------
---------- ------------
Year ended July 31, 2000:
Shares sold 139,641 $ 1,690,602
Shares issued in reinvestment of dividends and distributions 10,092 115,014
Shares reacquired (1,287,052) (14,407,917)
---------- ------------
Net increase (decrease) in shares outstanding (1,137,319) $(12,602,301)
---------- ------------
---------- ------------
64
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Financial Highlights
Class A
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:(d)
Net asset value, beginning of
period $ 12.03 $ 10.86 $ 10.00
------------- ------------- ----------
Income from investment operations:
Net investment income .24 .26 .12
Net realized and unrealized gain
(loss) on investments and
foreign currencies (.83) 1.25 .83
------------- ------------- ----------
Total from investment
operations (.59) 1.51 .95
------------- ------------- ----------
Less distributions
Dividends from net investment
income (.14) (.26) (.09)
Distributions from net realized
capital gains (.60) (.08) --
------------- ------------- ----------
Total dividends and
distributions (.74) (.34) (.09)
------------- ------------- ----------
Net asset value, end of period $ 10.70 $ 12.03 $ 10.86
------------- ------------- ----------
------------- ------------- ----------
TOTAL RETURN(b) (4.89)% 13.96% 9.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 58,517 $ 48,786 $ 20,372
Average net assets (000) $ 56,627 $ 34,809 $ 12,286
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.54% 1.49% 1.88%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.29% 1.24% 1.63%(c)
Net investment income 2.18% 2.27% 1.59%(c)
For Class A, B, C and Z shares:
Portfolio turnover rate 246% 155% 96%
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
See Notes to Financial Statements 65
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Financial Highlights Cont'd.
Class B
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:(d)
Net asset value, beginning of
period $ 12.01 $ 10.85 $ 10.00
------------- ------------- ----------
Income from investment operations:
Net investment income .16 .17 .06
Net realized and unrealized gain
(loss) on investments and
foreign currencies (.84) 1.23 .83
------------- ------------- ----------
Total from investment
operations (.68) 1.40 .89
------------- ------------- ----------
Less distributions
Dividends from net investment
income (.10) (.16) (.04)
Distributions from net realized
capital gains (.60) (.08) --
------------- ------------- ----------
Total dividends and
distributions (.70) (.24) (.04)
------------- ------------- ----------
Net asset value, end of period $ 10.63 $ 12.01 $ 10.85
------------- ------------- ----------
------------- ------------- ----------
TOTAL RETURN(b) (5.72)% 12.88% 8.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 117,664 $ 99,950 $ 58,678
Average net assets (000) $ 109,534 $ 79,855 $ 36,645
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.29% 2.24% 2.63%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.29% 1.24% 1.63%(c)
Net investment income 1.43% 1.48% .85%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
66 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Financial Highlights Cont'd.
Class C
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:(d)
Net asset value, beginning of
period $ 12.01 $ 10.85 $ 10.00
------------- ------------- ----------
Income from investment operations:
Net investment income .16 .17 .06
Net realized and unrealized gain
(loss) on investments and
foreign currencies (.84) 1.23 .83
------------- ------------- ----------
Total from investment
operations (.68) 1.40 .89
------------- ------------- ----------
Less distributions
Dividends from net investment
income (.10) (.16) (.04)
Distributions from net realized
capital gains (.60) (.08) --
------------- ------------- ----------
Total dividends and
distributions (.70) (.24) (.04)
------------- ------------- ----------
Net asset value, end of period $ 10.63 $ 12.01 $ 10.85
------------- ------------- ----------
------------- ------------- ----------
TOTAL RETURN(b) (5.72)% 12.88% 8.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 34,021 $ 28,040 $ 22,375
Average net assets (000) $ 30,623 $ 25,835 $ 18,346
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 2.29% 2.24% 2.63%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.29% 1.24% 1.63%(c)
Net investment income 1.43% 1.44% .79%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
See Notes to Financial Statements 67
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Financial Highlights Cont'd.
Class Z
----------------------------------------------------
Year Ended July 31, November 18, 1998(a)
----------------------------- Through
2001 2000 July 31, 1999
-----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:(d)
Net asset value, beginning of
period $ 12.05 $ 10.87 $ 10.00
------------- ------------- ----------
Income from investment operations:
Net investment income .25 .27 .13
Net realized and unrealized gain
(loss) on investments and
foreign currencies (.82) 1.27 .84
------------- ------------- ----------
Total from investment
operations (.57) 1.54 .97
------------- ------------- ----------
Less distributions
Dividends from net investment
income (.16) (.28) (.10)
Distributions from net realized
capital gains (.60) (.08) --
------------- ------------- ----------
Total dividends and
distributions (.76) (.36) (.10)
------------- ------------- ----------
Net asset value, end of period $ 10.72 $ 12.05 $ 10.87
------------- ------------- ----------
------------- ------------- ----------
TOTAL RETURN(b) (4.75)% 14.18% 9.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 4,272 $ 1,348 $ 13,578
Average net assets (000) $ 2,685 $ 4,102 $ 21,914
Ratios to average net assets:
Expenses, including distribution
and service (12b-1) fees 1.29% 1.24% 1.63%(c)
Expenses, excluding distribution
and service (12b-1) fees 1.29% 1.24% 1.63%(c)
Net investment income 2.39% 2.11% 1.68%(c)
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day and includes reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Calculated based upon weighted average shares outstanding during the period.
68 See Notes to Financial Statements
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Report of Independent Accountants
To the Shareholders and Board of Trustees of
Strategic Partners Asset Allocation Funds--
Strategic Partners Moderate Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Strategic Partners Asset Allocation
Funds--Strategic Partners Moderate Growth Fund, formerly Prudential Diversified
Funds--Prudential Diversified Moderate Growth Fund (the 'Fund') at July 31,
2001, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as 'financial
statements') are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at July 31, 2001 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
September 21, 2001
69
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Tax Information (Unaudited)
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end (July 31, 2001) as to the federal income tax
status of dividends paid by the Fund during such fiscal period. Accordingly, we
are advising you that during its fiscal period ended July 31, 2001, the Fund
paid an ordinary distribution for Class A, Class B, Class C and Class Z shares
of $0.143 per share, $0.098 per share, $0.098 per share and $0.158 per share,
respectively, which represents net investment income. The Fund also paid
distributions of $0.224 and $0.378 per share which represent short-term capital
gains and long-term capital gains, respectively. The Fund utilized redemptions
as distributions in the amount of $.06 and $.01 per Class A, Class B, Class C
and Class Z shares of long-term and short-term capital gains, respectively.
Further, we wish to advise you that 19.01% of the ordinary income dividends paid
in the fiscal period ended July 31, 2001 qualified for the corporate dividend
received deduction available to corporate taxpayers.
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders. Please be advised that 5.34% of the dividends paid from
ordinary income in the fiscal year ended July 31, 2001, qualify for each of
these states' tax exclusion.
For the purpose of preparing your annual federal income tax return,
however, you should report the amounts as reflected on the appropriate Form
1099-DIV or substitute 1099-DIV.
70
Strategic Partners Asset Allocation Funds
The Strategic Partners Mutual Fund Family
Strategic Partners offers a variety of
mutual funds designed to meet your individual
needs. For information about these funds, contact
your financial professional or call us at (800)
225-1852. Please read the applicable prospectus
carefully before you invest or send money.
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Strategic Partners Moderate Growth Fund
Strategic Partners High Growth Fund
Strategic Partners Style Specific Funds
Strategic Partners
Large Capitalization Growth Fund
Strategic Partners
Large Capitalization Value Fund
Strategic Partners
Small Capitalization Growth Fund
Strategic Partners
Small Capitalization Value Fund
Strategic Partners
International Equity Fund
Strategic Partners
Total Return Bond Fund
Strategic Partners Opportunity Funds
Strategic Partners Focused Growth Fund
Strategic Partners New Era Growth Fund
Strategic Partners Focused Value Fund
Special Money Market Fund, Inc.*
* This fund is not a direct purchase money fund
and is only an exchangeable money fund.
Strategic Partners Asset Allocation Funds
Getting the Most from Your Mutual Fund
How many times have you read these
reports--or other financial materials--and
stumbled across a word that you don't
understand?
Many shareholders have run into the same
problem. We'd like to help. So we'll use
this space from time to time to explain
some of the words you might have read, but
not understood. And if you have a favorite
word that no one can explain to your
satisfaction, please write to us.
Basis Point: 1/100th of 1%. For example,
one-half of one percent is 50 basis
points.
Collateralized Mortgage Obligations
(CMOs): Mortgage-backed bonds that
separate mortgage pools into different
maturity classes called tranches. These
instruments are sensitive to changes in
interest rates and homeowner refinancing
activity. They are subject to prepayment
and maturity extension risk.
Derivatives: Securities that derive their
value from other securities. The rate of
return of these financial instruments
rises and falls--sometimes very suddenly--in
response to changes in some specific
interest rate, currency, stock, or other
variable.
Discount Rate: The interest rate charged
by the Federal Reserve on loans to member
banks.
Federal Funds Rate: The interest rate
charged by one bank to
another on overnight loans.
Futures Contract: An agreement to purchase
or sell a specific amount of a commodity
or financial instrument at a set price at
a specified date in the future.
www.strategicpartners.com (800) 225-1852
Leverage: The use of borrowed assets to
enhance return. The expectation is that
the interest rate charged on borrowed
funds will be lower than the return on the
investment. While leverage can increase
profits, it can also magnify losses.
Liquidity: The ease with which a financial
instrument (or product) can be bought or
sold (converted into cash) in the
financial markets.
Price/Earnings Ratio: The price of a share
of stock divided by the earnings per share
for a 12-month period.
Option: An agreement to purchase or sell
something, such as shares of stock, by a
certain time for a specified price. An
option need not be exercised.
Spread: The difference between two values;
often used to describe the
difference between "bid" and "asked"
prices of a security, or between the
yields of two similar maturity bonds.
Yankee Bond: A bond sold by a foreign
company or government on the U.S. market
and denominated in U.S. dollars.
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Class A Growth of a $10,000 Investment
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -9.65% N/A N/A 4.53%
Without Sales Charge -4.89% N/A N/A 6.53%
Past performance is not indicative of
future results. Principal and investment
return will fluctuate so that an investor's
shares, when redeemed, may be worth more or
less than their original cost. The graph
compares a $10,000 investment in the
Strategic Partners Moderate Growth Fund
(Class A shares) with a similar investment
in the Standard & Poor's 500 Composite
Stock Price Index (S&P 500 Index) by
portraying the initial account values at
the commencement of operations of Class A
shares (November 18, 1998) and the account
values at the end of the current fiscal
year (July 31, 2001), as measured on a
quarterly basis. For purposes of the
graph, and unless otherwise indicated, it
has been assumed that (a) the maximum
applicable front-end sales charge was
deducted from the initial $10,000
investment in Class A shares; (b) all
recurring fees (including management fees)
were deducted; and (c) all dividends and
distributions were reinvested.
The S&P 500 Index is an unmanaged index of
500 stocks of large U.S. companies. It
gives a broad look at how stock prices
have performed. The S&P 500 Index total
returns include the reinvestment of all
dividends, but do not include the effect
of sales charges or operating expenses of
a mutual fund. The securities that
comprise the S&P 500 Index may differ
substantially from the securities in the
Fund. The S&P 500 Index is not the only
index that may be used to characterize
performance of balanced stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest
directly in an index.
This graph is furnished to you in
accordance with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class B Growth of a $10,000 Investment
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -10.72% N/A N/A 4.62%
Without Sales Charge -5.72% N/A N/A 5.64%
Past performance is not indicative of
future results. Principal and investment
return will fluctuate so that an
investor's shares, when redeemed, may be
worth more or less than their original
cost. The graph compares a $10,000
investment in the Strategic Partners
Moderate Growth Fund (Class B shares) with
a similar investment in the Standard &
Poor's 500 Composite Stock Price Index
(S&P 500 Index) by portraying the initial
account values at the commencement of
operations of Class B shares (November
18, 1998) and the account values at the
end of the current fiscal year (July
31, 2001), as measured on a quarterly
basis. For purposes of the graph, and
unless otherwise indicated, it
has been assumed that (a) the maximum
applicable contingent deferred sales
charge was deducted from the value of the
investment in Class B shares, assuming
full redemption on July 31, 2001; (b) all
recurring fees (including management fees)
were deducted; and (c) all dividends and
distributions were reinvested. Approximately
seven years after purchase, Class B shares will
automatically convert to Class A shares on
a quarterly basis. This conversion feature
is not reflected in the graph.
The S&P 500 Index is an unmanaged index of
500 stocks of large U.S. companies. It
gives a broad look at how stock prices
have performed. The S&P 500 Index total
returns include the reinvestment of all
dividends, but do not include the effect
of sales charges or operating expenses of
a mutual fund. The securities that
comprise the S&P 500 Index may differ
substantially from the securities in the
Fund.The S&P 500 Index is not the only
index that may be used to characterize
performance of balanced stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest
directly in an index.
This graph is furnished to you in
accordance with SEC regulations.
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Class C Growth of a $10,000 Investment
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
With Sales Charge -7.72% N/A N/A 5.25%
Without Sales Charge -5.72% N/A N/A 5.64%
Past performance is not indicative of
future results. Principal and investment
return will fluctuate so that an
investor's shares, when redeemed, may be
worth more or less than their original
cost. The graph compares a $10,000
investment in the Strategic Partners
Moderate Growth Fund (Class C shares) with
a similar investment in the Standard &
Poor's 500 Composite Stock Price Index
(S&P 500 Index) by portraying the initial
account values at the commencement of
operations of Class C shares (November 18,
1998) and the account values at the end of
the current fiscal year (July 31, 2001),
as measured on a quarterly basis. For
purposes of the graph, and unless
otherwise indicated, it has been assumed
that (a) the maximum appli-cable front-end
sales charge was deducted from the initial
$10,000 investment in Class C shares; (b)
the maximum applicable contingent deferred
sales charge was deducted from the value
of the investment in Class C shares,
assuming full redemption on July 31, 2001;
(c) all recurring fees (including
management fees) were deducted; and (d)
all dividends and distributions were
reinvested.
The S&P 500 Index is an unmanaged index of
500 stocks of large U.S. companies. It
gives a broad look at how stock prices
have performed. The S&P 500 Index total
returns include the reinvestment of all
dividends, but do not include the effect
of sales charges or operating expenses of
a mutual fund. The securities that
comprise the S&P 500 Index may differ
substantially from the securities in the
Fund. The S&P 500 Index is not the only
index that may be used to characterize
performance of balanced stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest
directly in an index.
This graph is furnished to you in
accordance with SEC regulations.
www.strategicpartners.com (800) 225-1852
Class Z Growth of a $10,000 Investment
Average Annual Total Returns as of 7/31/01
One Year Five Years Ten Years Since Inception
-4.75% N/A N/A 6.78%
Past performance is not indicative of
future results. Principal and investment
return will fluctuate so that an
investor's shares, when redeemed, may be
worth more or less than their original
cost. The graph compares a $10,000
investment in the Strategic Partners
Moderate Growth Fund (Class Z shares) with
a similar investment in the Standard &
Poor's 500 Composite Stock Price Index
(S&P 500 Index) by portraying the initial
account values at the commencement of
operations of Class Z shares (November 18,
1998) and the account values at the end of
the current fiscal year (July 31, 2001),
as measured on a quarterly basis. For
purposes of the graph, and unless
otherwise indicated, it has been assumed
that (a) all recurring fees (including
management fees) were deducted, and (b)
all dividends and distributions were
reinvested. Class Z shares are not subject
to a sales charge or distribution and
service (12b-1) fees.
The S&P 500 Index is an unmanaged index of
500 stocks of large U.S. companies. It
gives a broad look at how stock prices
have performed. The S&P 500 Index total
returns include the reinvestment of all
dividends, but do not include the effect
of sales charges or operating expenses of
a mutual fund. The securities that comprise
the S&P 500 Index may differ substantially from
the securities in the Fund. The S&P 500 Index
is not the only one that may be used to
characterize performance of balanced stock
funds. Other indexes may portray different
comparative performance. Investors cannot
invest directly in an index.
This graph is furnished to you in
accordance with SEC regulations.
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit our website at:
www.strategicpartners.com
Trustees
Eugene C. Dorsey
Saul K. Fenster
Robert F. Gunia
Maurice F. Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
David R. Odenath, Jr.
Stephen Stoneburn
Joseph Weber
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Judy A. Rice, Vice President
Grace C. Torres, Treasurer
George P. Attisano, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments
Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
Prudential Investment Management, Inc.
Prudential Plaza
Newark, NJ 07102-3777
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Franklin Advisers, Inc.
920 Park Place
San Mateo, CA 94403
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Lazard Asset Management
30 Rockefeller Plaza
New York, NY 10112
Pacific Investment
Management Company LLC
840 Newport Center Dr.
Newport Beach, CA 92660
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Fund Symbols NASDAQ CUSIP
Class A PAMGX 86276X889
Class B DMGBX 86276X871
Class C PIMGX 86276X863
Class Z PDMZX 86276X855
MFSP504E3
(LOGO) Printed on Recycled Paper