-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NJl6EqQi7851boKGwp/Zw2hR6b0at/i+T9uMjsWaGc9vOgZsYcfhbC010tlvyUda jVIJ7SxybGashOglBcjtdg== 0000898733-03-000201.txt : 20030404 0000898733-03-000201.hdr.sgml : 20030404 20030404121659 ACCESSION NUMBER: 0000898733-03-000201 CONFORMED SUBMISSION TYPE: N-30D/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030131 FILED AS OF DATE: 20030404 EFFECTIVENESS DATE: 20030404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STRATEGIC PARTNERS ASSET ALLOCATION FUNDS CENTRAL INDEX KEY: 0001067442 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-08915 FILM NUMBER: 03639717 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 SERIES DATE OF NAME CHANGE: 19980803 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL DIVERSIFIED FUNDS DATE OF NAME CHANGE: 19980930 N-30D/A 1 mf15960.txt SP--ASSET ALLOCATIN FUNDS -- PROSPECTUS -- 4/4/2003 SEMIANNUAL REPORT JANUARY 31, 2003 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's investment objective is current income and a reasonable level of capital appreciation. The Fund is designed for investors who want investment professionals to make their asset allocation decisions, that is, it invests in a diversified portfolio of fixed income securities and stocks. The Fund is periodically rebalanced in accordance with its asset allocation strategy. There can be no assurance that the Fund will achieve its investment objective. ABSOLUTE AND RELATIVE PERFORMANCE We evaluate an investment's performance in two ways. The first considers how much more (or less) an investment is worth at the end of a reporting period. This is known as absolute performance. The second compares whether you did better (or worse) than the market average (the benchmark index) or the average return of comparable funds (the Lipper Average) regardless of your gain or loss. This is called relative performance. Three factors determine the absolute return of an asset allocation fund: the asset allocation, the return for each asset class, and the relative performance of the investment advisers for the different asset classes. The fund's return is higher when the advisers outperform their asset class average than when they underperform them. This "adviser contribution" has a greater impact in the asset classes with larger allocations. This is why, in the discussion of the performance of your Strategic Partners Asset Allocation Fund, we may say, for example, that the Fund's large allocation to a low-performing asset class hurt its return even though the advisers' relative perform-ance had a positive impact. www.strategicpartners.com (800) 225-1852 Semiannual Report January 31, 2003 Cumulative Total Returns1 As of 1/31/03
Six Months One Year Three Years Since Inception2 Class A 3.17% -6.18% 0.34% 11.48% Class B 2.79 -6.91 -1.83 8.07 Class C 2.79 -6.91 -1.83 8.07 Class Z 3.29 -5.95 0.96 12.59 S&P 500 Index3 -5.26 -23.01 -36.01 -22.21 Lipper Balanced Funds Avg.4 -1.97 -12.15 -12.53 -3.61
Average Annual Total Returns1 As of 12/31/02 One Year Three Years Since Inception2 Class A -12.21% -2.31% 1.40% Class B -12.69 -2.20 1.72 Class C -10.01 -1.68 1.68 Class Z -7.27 -0.42 2.92 S&P 500 Index3 -22.09 -14.54 -5.35 Lipper Balanced Funds Avg.4 -11.71 -4.97 -0.67 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. 1Source: Prudential Investments LLC and Lipper Inc. The cumulative total returns do not take into account applicable sales charges. The average annual total returns do take into account applicable sales charges. Without the distribution and service (12b-1) fee waiver of 0.05% for Class A shares annually, the returns would have been lower. The Fund charges a maximum front-end sales charge of 5% for Class A shares, and a distribution and service 12b-1 fee of 0.30% annually. In some limited circumstances, Class A shares may not be subject to a front-end sales charge, but may be subject to a 1% contingent deferred sales charge (CDSC) for the first year. Class B shares are subject to a sales charge CDSC of 5%, 4%, 3%, 2%, 1%, and 1% for the first six years respectively after purchase, and a 12b-1 fee of 1.00% annually. 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 shares redeemed within 18 months of purchase, and a 12b-1 fee of 1.00% annually. Class Z shares are not subject to a sales charge or 12b-1 fees. The returns in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or following the redemption of fund shares. 2Inception date: 11/18/98. 3The Standard & Poor's 500 Composite Stock Price Index (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. Investors cannot invest directly in an index. 4The Lipper Average represents returns based on an average of all funds in the Lipper Balanced Funds category for the periods noted. Funds in the Lipper Balanced Funds Average 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%. The returns for the S&P 500 Index and Lipper Balanced Funds Average would be lower if they included the effects of sales charges or taxes, or in the case of the S&P 500 Index, operating expenses. 1 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS (LOGO) March 14, 2003 DEAR SHAREHOLDER, Securities markets were extraordinarily volatile between August 2002 and January 2003, the semiannual reporting period of the Strategic Partners Conservative Growth Fund. As stock prices dropped sharply around the world, investors looked for less volatile securities, pushing bond prices up. The Fund's above-average 60% allocation to bonds and the strong performance of its investment-grade bond portfolio resulted in a moderate gain (3.17%), a much better performance than the Lipper Balanced Funds Average (-1.97%) or the Standard & Poor's 500 Index (-5.26%). In the following report, its investment advisers describe the different factors affecting the Fund's return this reporting period. The recent large swings of stock and bond prices suggest that some people abandoned their investment plans because of market turbulence or economic and geopolitical uncertainty. We recommend that you make any change to your investment strategy in consultation with a financial professional and that you base it on sound financial principles. In March 2003, I was named President of the Strategic Partners Asset Allocation Funds. I strongly believe in the value of these funds' selection of asset allocations for different risk tolerances. What really sets the funds apart, however, is the stringent screening process that we use to select and monitor their subadvisers. This assures you that the funds' managers will adhere to their specific investment disciplines, which is especially important when trying to maintain a consistent strategy in today's turbulent market. We appreciate your continued confidence in us. Sincerely, Judy A. Rice, President Strategic Partners Asset Allocation Funds 2 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Semiannual Report January 31, 2003 INVESTMENT ADVISERS' REPORT A BRIEF UPSWING If the securities markets during the last years of the 20th century were driven largely by dreams of gains, the markets during the six months that ended in January 2003 were driven largely by fears of losses. As the reporting period began, stock markets around the world were in a decline of historic proportion. Investors lost confidence in corporations' financial reporting and in analysts' earnings forecasts. Slower-than-expected economic growth and concern about a possible war in Iraq also suppressed investment in stocks. By October, shares looked inexpensive, given forecasts for 2003 corporate earnings and the low yields on alternative fixed income investments. In addition, positive reports from technology executives fueled hopes that demand might recover, setting the scene for a brief upswing in October and November 2002 largely driven by stocks that were rebounding from steep declines earlier in the year. The rebound of stocks in past economic recoveries has often been swift. Investors, particularly institutional investors, didn't want to be left out if that happened again, and the market rose quickly as they rebuilt their portfolios. Sectors that had become relatively inexpensive in the bear market earlier in the year--technology, utilities, and producer durables--had substantial rebounds, while consumer staples, which had not been hurt as much in the falling market, shared only briefly in the rally. Then reports of slow retail sales in December chilled stock investors' enthusiasm again. Over the full reporting period, energy, technology, and healthcare stocks performed best, and consumer staples performed poorly. Although there were marked differences between sector returns, the differences between value and growth stocks and between small and large caps were small relative to the broad market decline. Stock markets in developed countries around the world fared even worse than U.S. stocks. The loss of U.S. confidence discouraged investors nearly 3 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Semiannual Report January 31, 2003 everywhere, particularly as none of the largest economies in the world looked strong. The fear of war was another factor affecting foreign markets. The same uncertainties that drove the changes in stock prices caused bonds to shift direction, albeit not to the same extent. A flight to safety from stocks increased demand for bonds, pushing their prices up. Moreover, in November 2002, the Federal Reserve again eased short-term interest rates, further elevating bond prices. The prices of the safest investments, such as U.S. Treasury bonds, rose early in 2002 and had become quite high by the beginning of our reporting period. During the fourth quarter of 2002, investors renewed their interest in relatively inexpensive corporate bonds, causing a catch-up spurt in their prices compared to Treasuries. Their greater volatility worked in favor of high yield ("junk") bonds over this period. These are bonds of companies that have to pay high interest rates because of concerns about their ability to redeem the bonds at maturity. Investors had been frightened away from them by the two largest bankruptcies ever--Enron Corporation and WorldCom-- and several other prominent corporate casualties. As the reporting period progressed, corporate officers made the newly required certifications of their companies' financial statements, and some companies changed auditors and/or announced more conservative accounting practices. These improvements in oversight practices, plus continued--albeit uncertain--economic growth, increased confidence that most of the large negative surprises were behind us. The low prices on junk bonds attracted investors, who bid their prices up. They outperformed the other asset classes in the Fund by a considerable margin. YOUR FUND'S PERFORMANCE Asset allocation was the critical factor in the Fund's return, even more than usual. All of the equity classes lost ground, but both bond classes had large gains, and the Fund maintains a larger allocation to fixed income investments than most balanced funds. High yield bonds returned almost 12%. With 20% of the Fund's net assets allocated to the asset class, they helped offset the negative impact of the stock allocations even though the Fund's 4 www.strategicpartners.com (800) 225-1852 Asset Class Index Returns As of 1/31/03 (CHART) The chart above shows returns for the six months ended January 31, 2003, of various securities indexes, which are generally considered representative of the market sectors in which the fund may invest. Source: Prudential Investments LLC, Lipper Inc., and Lehman Brothers. 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 Russell 1000 Value Index comprises those securities in the Russell 1000 Index with a less- than-average growth orientation. Companies in this index generally have low price-to-book and price/earnings ratios, higher dividend yields, and lower forecasted growth values. The Russell 1000 Growth Index comprises those securities in the Russell 1000 Index with a greater- than-average growth orientation. Companies in this index tend to exhibit higher price-to-book and price/earnings ratios, lower dividend yields, and higher forecasted growth rates. The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to- book ratios. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios. The Lehman Brothers Aggregate Bond 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 Bond Index gives a broad look at how short- and intermediate- term bonds have performed. The Lehman Brothers U.S. Corporate High Yield Index is an unmanaged index of fixed-rate, noninvestment- grade debt securities with at least one year remaining to maturity. The Lehman Brothers U.S. Corporate High Yield Index gives a broad look at how high yield ("junk bonds") have performed. 5 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Semiannual Report January 31, 2003 high yield bond holdings trailed the Lehman Brothers U.S. Corporate High Yield Bond Index by a moderate amount. The Fund's investment-grade bonds made an even greater positive contribution. The Fund had a larger allocation to investment-grade bonds than to high yield bonds. Although investment-grade bonds did not perform as well as high yield, the Fund's investment- grade holdings outperformed the Lehman Brothers Aggregate Bond Index, a broad measure of the fixed income market, by a substantial amount. The primary reasons for the strong result were good selection among corporate bonds and exposure to foreign bonds, particularly German government bonds and Brazilian bonds. The portfolio also had more exposure to changes in interest rates than the Lehman Brothers Aggregate Bond Index. As interest rates fell, the prices of existing bonds rose, adding a significant capital gain to the portfolio. The adviser magnified the impact by emphasizing intermediate maturity securities, where interest rates fell most. The gains on both bond allocations together almost offset the losses on the Fund's stock allocations. The Fund has modest allocations to U.S. large-cap growth and value stocks. The Russell 1000 Value Index held up slightly better than the Russell 1000 Growth Index. This small style advantage was overshadowed by a strong relative performance by the Fund's large-cap value holdings, which focused on media firms, including The News Corporation and EchoStar Communications. Stronger-than-expected advertising rates and the prospect of rising advertising volume helped media stocks generally. Moreover, EchoStar announced a surprise repurchase of more than 10% of its outstanding shares from Vivendi Universal. The Fund's value adviser had a substantial emphasis on technology, buying positions in leading firms inexpensively after the prolonged bear market in technology stocks. Positions in Hewlett-Packard, Xerox, BMC Software, and Cisco Systems had large gains during the period. The Fund's large-cap growth holdings trailed the Russell 1000 Growth Index, hurt by weak technology and healthcare selections. The poorest performers in these sectors were the semiconductor firms Texas Instruments and TMicroelectronics, and in healthcare company Baxter International. The Fund's 6 www.strategicpartners.com (800) 225-1852 holdings were also hurt by a sizable commitment to the retail chain Kohl's, whose stock fell sharply because of poor retail sales in the fourth quarter of 2002. The fixed 10% of the Fund's investments allocated to small/mid-cap stocks is a permanent overweighting within its overall equity allocation. Small caps make up about a quarter of the Fund's equity allocation compared to about 8% small caps in the Russell 3000, which represents the overall U.S. equity market. In this reporting period, small-cap stocks declined somewhat less than stocks of larger companies. In fact, small-cap growth stocks held up better than all the other equity asset classes in the Fund. Small-cap profitability in the fourth quarter of 2002, particularly earnings of technology companies, improved more than analysts expected. The Fund's small-cap value portfolio performed substantially better than its asset class overall, while the small- cap growth portfolio trailed its market by a much smaller margin. The small-cap value holdings' exceptionally large outperformance was driven by a focus on the healthcare sector. The subadviser managing these investments believes that certain stocks in the healthcare industry may benefit from many developed countries' aging populations. A strong selection of healthcare stocks, including Covance and Pharmaceutical Product Development, had gains even in this period's weak markets. Both offer outsourced research services to drug companies and both reported positive financial results. Another top contributor was Pediatrix Medical Group, which manages hospital pediatric units. The Fund changed subadvisers for its small-cap growth stocks during the period. Averaged over the period, the small-cap growth holdings focused on technology and healthcare stocks and underweighted financials. Gains on some technology positions were outweighed by the more mixed performance of its healthcare holdings, but the margin by which the Fund trailed its market had a negligible impact on its overall return. Strategic Partners Conservative Growth Fund Management Team 7 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Semiannual Report January 31, 2003 WHAT IS AN ASSET ALLOCATION FUND? 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 (Chart) 9 SEMIANNUAL REPORT JANUARY 31, 2003 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS (LOGO) STRATEGIC PARTNERS CONSERVATIVE GROWTH FUND Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited)
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ LONG-TERM INVESTMENTS 85.5% COMMON STOCKS 36.3% - ------------------------------------------------------------------------------------- Aerospace/Defense 1.2% 6,200 Aeroflex, Inc.(a) $ 49,600 3,600 Cubic Corp. 72,432 6,200 General Dynamics Corp. 410,068 5,000 Herley Industries, Inc. 79,250 5,400 Lockheed Martin Corp. 275,670 1,300 Moog, Inc. (Class A Stock)(a) 41,470 7,800 Northrop Grumman Corp. 712,998 ---------------- 1,641,488 - ------------------------------------------------------------------------------------- Apparel 0.1% 14,700 Ashworth, Inc.(a) 93,198 - ------------------------------------------------------------------------------------- Automobiles 0.4% 7,100 Harley-Davidson, Inc. 296,638 5,800 Navistar International Corp.(a) 139,606 1,600 Winnebago Industries, Inc. 55,024 ---------------- 491,268 - ------------------------------------------------------------------------------------- Banks 1.5% 9,200 Bank One Corp. 335,892 12,100 Bank United Financial Corp.(a) 191,180 35,166 Citigroup, Inc. 1,209,007 1,800 Commerce Bancorp, Inc. 79,002 1,200 East West Bancorp, Inc. 41,952 1,600 First Community Bancorp/CA 45,872 1,800 Hibernia Corp. (Class A Stock) 33,570 3,300 R&G Financial Corp. 72,897 ---------------- 2,009,372 - ------------------------------------------------------------------------------------- Beverages 0.4% 6,900 Anheuser-Busch Cos., Inc. 327,543 5,100 Coca-Cola Co. 206,346 ---------------- 533,889
See Notes to Financial Statements 11 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Biotechnology 1.0% 7,900 Acacia Research - CombiMatrix(a) $ 23,700 13,400 Amgen, Inc.(a) 682,864 1,700 CV Therapeutics, Inc.(a) 28,560 700 Digene Corp.(a) 8,022 6,000 Embrex, Inc.(a) 62,034 4,300 Exact Sciences Corp.(a) 38,528 6,300 Genentech, Inc.(a) 231,462 6,400 MedImmune, Inc.(a) 190,656 6,600 Serologicals Corp.(a) 72,138 4,200 Telik, Inc.(a) 47,292 ---------------- 1,385,256 - ------------------------------------------------------------------------------------- Building Products 0.1% 4,900 Watsco, Inc. 76,685 - ------------------------------------------------------------------------------------- Chemicals 0.7% 6,800 Dow Chemical Co. 197,608 17,100 IMC Global, Inc. 167,067 18,100 Lyondell Chemical Co. 231,861 9,584 Monsanto Co. 169,158 9,300 Nuco2, Inc.(a) 46,156 2,300 Scotts Co. (Class A Stock)(a) 117,852 2,100 Valspar Corp. 89,250 ---------------- 1,018,952 - ------------------------------------------------------------------------------------- Commercial Services & Supplies 0.8% 23,200 Administaff, Inc.(a) 116,000 12,100 Allied Waste Industries, Inc.(a) 118,338 3,700 Bright Horizons Family Solutions, Inc.(a) 98,790 2,800 Coinstar, Inc.(a) 54,460 2,000 Digitas, Inc.(a) 8,100 4,000 Global Payments, Inc.(a) 114,120 3,200 Kelly Services, Inc. (Class A Stock) 66,880 4,900 NDCHealth Corp. 106,526 4,700 Republic Services, Inc.(a) 96,256 10,600 Waste Management, Inc. 243,694 ---------------- 1,023,164
12 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Communications Equipment 0.9% 46,600 3Com Corp.(a) $ 197,118 4,000 Anaren Microwave, Inc.(a) 31,000 44,000 Cisco Systems, Inc.(a) 588,280 24,200 Nokia Corp., ADR (Finland) 348,238 ---------------- 1,164,636 - ------------------------------------------------------------------------------------- Computers & Peripherals 1.2% 17,700 Dell Computer Corp.(a) 422,322 45,334 Hewlett-Packard Co. 789,265 3,900 IBM Corp. 305,097 13,400 Netscout Systems, Inc.(a) 53,734 6,200 Paxar Corp.(a) 92,380 ---------------- 1,662,798 - ------------------------------------------------------------------------------------- Containers & Packaging 0.2% 5,400 Temple-Inland, Inc. 233,388 - ------------------------------------------------------------------------------------- Diversified Financials 2.2% 18,000 American Express Co. 639,540 12,600 AmeriCredit Corp.(a) 39,564 3,400 Astoria Financial Corp. 88,230 4,900 Eaton Vance Corp. 136,024 5,000 Edwards (A.G.), Inc. 142,850 10,200 Goldman Sachs Group, Inc. 694,620 3,300 Jefferies Group, Inc. 129,195 8,800 Lehman Brothers Holdings, Inc. 479,864 8,400 Merrill Lynch & Co., Inc. 294,168 4,800 Principal Financial Group(a) 137,280 4,600 Raymond James Financial, Inc. 117,300 300 Saxon Capital, Inc.(a) 3,834 600 Student Loan Corp. 57,468 ---------------- 2,959,937 - ------------------------------------------------------------------------------------- Diversified Manufacturing 0.2% 4,500 Applied Films Corp.(a) 72,900 2,300 ESCO Technologies, Inc.(a) 79,580
See Notes to Financial Statements 13 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 10,400 Tyco International Ltd. $ 166,504 ---------------- 318,984 - ------------------------------------------------------------------------------------- Electric Utilities 0.6% 3,600 Dominion Resources, Inc. 195,084 5,100 FirstEnergy Corp. 159,120 14,700 PG&E Corp.(a) 202,860 4,300 PNM Resources, Inc. 90,773 6,400 Public Service Enterprise Group, Inc. 225,792 ---------------- 873,629 - ------------------------------------------------------------------------------------- Electrical Equipment 0.1% 3,400 C&D Technologies, Inc. 58,990 3,500 Harris Corp. 109,200 ---------------- 168,190 - ------------------------------------------------------------------------------------- Electronic Equipment & Instruments 0.5% 1,700 Analogic Corp. 89,692 3,400 Electro Scientific Industries, Inc.(a) 61,438 3,200 FLIR Systems, Inc.(a) 149,344 8,900 Ingram Micro, Inc. (Class A Stock)(a) 102,350 15,000 Sanmina-SCI Corp.(a) 54,900 75,400 Solectron Corp.(a) 270,686 ---------------- 728,410 - ------------------------------------------------------------------------------------- Energy Equipment & Services 1.5% 3,400 Cal Dive International, Inc.(a) 72,454 16,200 ENSCO International, Inc. 436,428 16,700 GlobalSantaFe Corp. 362,891 13,500 Schlumberger Ltd. 508,950 12,500 Superior Energy Services, Inc.(a) 99,375 11,500 TXU Corp. 211,025 7,600 Weatherford International Ltd. (Bermuda)(a) 282,416 ---------------- 1,973,539 - ------------------------------------------------------------------------------------- Food & Drug Retailing 0.1% 6,400 Walgreen Co. 185,600
14 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Food Products 0.6% 16,800 ConAgra Foods, Inc. $ 412,104 10,400 Sara Lee Corp. 207,376 5,900 Kraft Foods, Inc. 187,915 4,700 Stake Technology Ltd.(a) 14,476 ---------------- 821,871 - ------------------------------------------------------------------------------------- Gas Utilities 0.2% 5,800 Oneok, Inc. 99,470 8,800 Sempra Energy 212,080 ---------------- 311,550 - ------------------------------------------------------------------------------------- Health Care Equipment & Supplies 0.7% 2,300 Allergan, Inc. 139,541 3,600 Atrix Labs, Inc.(a) 41,040 7,100 Baxter International, Inc. 200,078 5,800 Cooper Companies, Inc. 148,538 3,700 Closure Medical Corp.(a) 37,925 6,900 Conceptus, Inc. 58,650 4,000 Diagnostic Products Corp. 140,120 11,200 Quinton Cardiology Systems, Inc.(a) 61,600 1,600 Zoll Medical Corp. 63,904 ---------------- 891,396 - ------------------------------------------------------------------------------------- Health Care Providers & Services 1.1% 1,500 Centene Corp.(a) 42,300 8,300 Covance, Inc.(a) 223,934 11,100 HCA, Inc. 474,414 1,300 Icon PLC(a) 36,400 4,500 Lincare Holdings, Inc.(a) 128,430 4,300 Pediatrix Medical Group, Inc.(a) 158,025 7,100 Pharmaceutical Product Development, Inc.(a) 211,935 6,700 Per-Se Technologies, Inc.(a) 54,136 4,700 Quintiles Transnational Corp.(a) 59,737 1,700 Service Corp. International(a) 5,627 7,800 Tenet Healthcare Corp.(a) 140,322 ---------------- 1,535,260
See Notes to Financial Statements 15 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Hotels, Restaurants & Leisure 1.0% 4,800 Brinker International, Inc.(a) $ 142,800 2,500 CEC Entertainment, Inc.(a) 70,725 10,000 Marriott International, Inc. (Class A Stock) 312,000 22,800 McDonald's Corp. 324,672 2,400 Rare Hospitality International, Inc.(a) 68,400 9,800 Scientific Games Corp.(a) 57,820 4,000 Sonic Corp.(a) 90,960 11,100 Starbucks Corp.(a) 252,192 5,400 WMS Industries, Inc.(a) 62,694 ---------------- 1,382,263 - ------------------------------------------------------------------------------------- Household Durables 0.5% 8,500 D.R. Horton, Inc. 162,350 3,300 Harman International Industries, Inc. 202,950 7,000 Hovnanian Enterprises, Inc. (Class A Stock)(a) 203,910 1,700 Snap-On, Inc. 43,350 ---------------- 612,560 - ------------------------------------------------------------------------------------- Household Products 0.2% 3,700 The Procter & Gamble Co. 316,609 - ------------------------------------------------------------------------------------- Industrial Conglomerates 0.4% 4,200 3M Co. 523,110 - ------------------------------------------------------------------------------------- Insurance 2.3% 6,700 Allstate Corp. 235,773 10,462 American International Group, Inc. 566,203 9,800 American Medical Security Group, Inc.(a) 135,632 3,700 Commerce Group, Inc. 128,390 13,800 Hartford Financial Services Group, Inc. 575,184 5,100 Lincoln National Corp. 164,475 4,300 Loews Corp. 189,286 4,600 Philadelphia Consolidated Holding Corp.(a) 153,318 3,200 ProAssurance Corp.(a) 74,336 2,600 Protective Life Corp. 70,538
16 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 7,000 Scottish Annuity & Life Holdings, Ltd. (Cayman Islands) $ 125,300 10,000 XL Capital Ltd. (Cayman Islands) (Class A Stock) 750,600 ---------------- 3,169,035 - ------------------------------------------------------------------------------------- Internet & Catalog Retail 0.1% 500 eBay, Inc.(a) 37,580 6,500 School Specialty, Inc.(a) 128,050 ---------------- 165,630 - ------------------------------------------------------------------------------------- Internet Software & Services 0.1% 2,600 FindWhat.com(a) 20,072 19,300 Looksmart Ltd.(a) 58,865 11,800 Matrixone, Inc.(a) 57,466 13,300 S1 Corp.(a) 65,835 ---------------- 202,238 - ------------------------------------------------------------------------------------- Media 2.5% 3,800 Clear Channel Communication, Inc.(a) 152,304 12,200 EchoStar Communications Corp. (Class A Stock)(a) 316,590 11,800 Fox Entertainment Group, Inc.(a) 326,034 2,900 Knight-Ridder, Inc. 196,388 6,400 Lamar Advertising Co.(a) 222,592 24,400 Liberty Media Corp.(a) 243,268 7,500 New York Times Co. (Class A Stock) 366,300 4,400 Omnicon Group, Inc. 265,320 13,200 Regent Communications, Inc.(a) 79,200 15,900 Sinclair Broadcast Group, Inc. (Class A Stock)(a) 179,988 2,500 Spanish Broadcasting System, Inc. 18,875 12,300 Univision Communications, Inc. (Class A Stock)(a) 324,228 19,340 Viacom, Inc. (Class B Stock)(a) 745,557 ---------------- 3,436,644 - ------------------------------------------------------------------------------------- Metals & Mining 0.1% 5,600 Freeport-McMoRan Copper & Gold, Inc. (Class A Stock)(a) 105,112 - ------------------------------------------------------------------------------------- Office Electronics 0.2% 28,400 Xerox Corp. 251,340
See Notes to Financial Statements 17 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Oil & Gas 1.6% 3,200 Apache Corp. $ 199,712 6,800 Baker Hughes, Inc. 205,768 19,500 Grey Wolf, Inc.(a) 75,075 11,000 Halliburton Co. 206,360 11,100 Occidental Petroleum Corp. 324,231 4,500 Swift Energy Co.(a) 42,750 4,044 Total Fina SA, ADR (France) 274,628 2,900 Total Fina SA (France) (Class B Stock) 390,983 4,700 Unit Corp.(a) 83,942 4,900 Westport Resources Corp.(a) 98,196 8,400 XTO Energy, Inc. 204,456 ---------------- 2,106,101 - ------------------------------------------------------------------------------------- Paper & Forest Products 1.0% 8,700 Boise Cascade Corp. 208,017 18,200 International Paper Co. 649,740 9,200 Weyerhaeuser Co. 442,060 ---------------- 1,299,817 - ------------------------------------------------------------------------------------- Personal Products 0.3% 6,400 The Gillette Co. 191,360 4,600 Kimberly-Clark Corp. 213,072 ---------------- 404,432 - ------------------------------------------------------------------------------------- Pharmaceuticals 2.8% 13,900 Abbott Laboratories 529,868 3,100 Able Laboratories, Inc.(a) 35,538 11,700 Atherogenics, Inc.(a) 88,335 1,400 Barr Laboratories, Inc.(a) 110,670 8,000 Bradley Pharmaceuticals(a) 90,000 12,400 Bristol-Myers Squibb Co. 292,516 3,400 Chattem, Inc.(a) 51,578 3,300 Collagenex Pharmaceuticals, Inc.(a) 32,406 3,400 Connetics Corp.(a) 44,166 4,000 Forest Laboratories Inc 207,000 10,900 Johnson & Johnson 584,349
18 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 5,800 K V Pharmaceutical Co.(a) $ 106,372 6,100 La Jolla Pharmaceutical Co.(a) 48,678 5,100 Nastech Pharmaceutical, Inc.(a) 49,725 1,600 NPS Pharmaceuticals, Inc.(a) 35,648 9,550 Pfizer, Inc. 289,938 13,075 Pharmacia Corp. 546,143 11,600 Pozen, Inc. 49,300 3,000 Teva Pharmaceutical Inds. Ltd. (Israel) 115,200 4,900 Versicor, Inc.(a) 54,096 11,300 Wyeth 441,039 ---------------- 3,802,565 - ------------------------------------------------------------------------------------- Real Estate Investment Trusts 0.1% 1,400 Alexandria Real Estate Equities, Inc. 57,890 1,700 SL Green Realty Corp. 51,374 ---------------- 109,264 - ------------------------------------------------------------------------------------- Retail 2.4% 4,500 Aaron Rents, Inc. (Class B Stock) 87,570 11,300 Bed Bath & Beyond, Inc.(a) 378,889 7,300 Circuit City Stores-Circuit City Group 43,727 7,700 CSK Auto Corp.(a) 76,538 7,600 Federated Department Stores, Inc.(a) 197,752 6,950 Fred's, Inc. 186,684 4,100 Guitar Center, Inc.(a) 79,868 3,400 HOT Topic, Inc.(a) 80,580 10,000 Kirkland's, Inc.(a) 116,000 11,000 Kohl's Corp.(a) 576,070 5,800 Lowe's Companies, Inc. 198,244 4,800 Movie Gallery, Inc.(a) 67,440 2,800 Regis Corp. 75,432 12,800 Tiffany & Co. 297,600 19,700 ToysR'Us, Inc.(a) 178,088 2,400 Urban Outfitters, Inc.(a) 49,152 12,600 Wal-Mart Stores, Inc. 602,280 ---------------- 3,291,914
See Notes to Financial Statements 19 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Semiconductor Equipment & Products 1.7% 227,100 Agere Systems, Inc. (Class B Stock)(a) $ 395,154 13,900 Applied Materials, Inc.(a) 166,383 17,000 California Micro Devices Corp.(a) 69,530 4,600 DSP Group, Inc.(a) 76,222 3,400 Exar Corp.(a) 44,030 21,500 Genus, Inc.(a) 60,415 27,200 Intel Corp. 425,952 2,200 KLA-Tencor Corp.(a) 71,808 16,900 Kopin Corp.(a) 70,659 8,200 Mykrolis Corp.(a) 59,532 1,900 Power Integrations, Inc.(a) 41,059 10,800 STMicroelectronics, NV, ADR (Netherlands) 198,288 13,500 Texas Instruments, Inc. 214,650 7,900 Ultratech Stepper, Inc.(a) 92,825 12,000 Xilinx, Inc. 237,480 5,200 Zoran Corp.(a) 56,420 ---------------- 2,280,407 - ------------------------------------------------------------------------------------- Software 1.6% 6,900 ActivCard Corp.(a) 52,785 3,000 Business Objects SA, ADR (France)(a) 48,150 3,400 Cerner Corp.(a) 125,355 2,800 Computer Programs & Systems, Inc.(a) 66,553 13,500 Concur Technologies, Inc.(a) 57,375 10,000 Embarcadero Technologies, Inc.(a) 70,000 12,700 Entrust, Inc.(a) 33,896 11,100 Legato Systems, Inc.(a) 55,833 26,900 Logicvision, Inc.(a) 51,917 14,400 Microsoft Corp.(a) 683,424 9,400 Monolithic System Technology, Inc.(a) 78,669 4,700 Novellus Systems, Inc.(a) 138,415 11,300 Opnet Technologies, Inc.(a) 92,683 4,300 Systeme, Anwendungen, Produkte AG, ADR (Germany) 101,050 3,700 Synopsys, Inc.(a) 143,079 45,400 Tumbleweed Communications Corp.(a) 63,605 8,400 Verity, Inc.(a) 130,284
20 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 27,600 VitalWorks, Inc.(a) $ 107,088 4,700 Websense, Inc.(a) 73,837 ---------------- 2,173,998 - ------------------------------------------------------------------------------------- Telecommunications 0.6% 15,500 AT&T Corp. 301,940 15,700 BellSouth Corp. 357,646 776 McLeodUSA, Inc. (Class A Stock)(a) 182 225 NTL, Inc.(a) 3,143 5,200 Verizon Communications, Inc. 199,056 ---------------- 861,967 - ------------------------------------------------------------------------------------- Tobacco 0.2% 5,200 Altria Group, Inc. 196,924 5,800 Loews Corp. - Carolina Group 118,378 ---------------- 315,302 - ------------------------------------------------------------------------------------- Transportation 2,250 UTI Worldwide, Inc. 53,550 - ------------------------------------------------------------------------------------- Wireless Telecommunication Services 0.3% 26,900 American Tower Corp., (Class A Stock)(a) 136,652 14,700 Vodafone Group Plc., (United Kingdom) 277,095 ---------------- 413,747 ---------------- Total common stocks (cost $52,726,407) 49,380,065 ---------------- PREFERRED STOCKS 1.0% - ------------------------------------------------------------------------------------- Automobiles 0.1% 300 Porsche AG (Germany) 119,472 - ------------------------------------------------------------------------------------- Cable 0.6% 3,770 CSC Holdings, Inc. 11.125% 364,748 4,530 CSC Holdings, Inc. 11.75% 442,807 ---------------- 807,555
See Notes to Financial Statements 21 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Media 0.3% 17,800 The News Corp. Ltd., ADR (Australia) $ 395,694 500 Primedia, Inc. 10.00% 38,625 ---------------- 434,319 - ------------------------------------------------------------------------------------- Telecommunications 350 McLeodUSA, Inc. 2.50% 1,148 ---------------- Total preferred stocks (cost $1,284,641) 1,362,494 ----------------
Principal Moody's Amount Rating (000) Description - -------------------------------------------------------------------------------------------- CORPORATE BONDS 23.4% - ------------------------------------------------------------------------------------- Aerospace/Defense 0.1% B2 $ 20 Alliant Techsystems, Inc., Sr. Sub. Notes, 8.50%, 5/15/11 21,500 K&F Industries, Sr. Sub. Notes, B3 100 9.25%, 10/15/07 104,000 B3 50 9.625%, 12/15/10 52,250 ---------------- 177,750 - ------------------------------------------------------------------------------------- Airlines 0.2% B1 150 AMR Corp., Notes, MTN 10.55%, 3/12/21 41,388 B3 100 Continental Airlines, Inc., Notes, 8.00%, 12/15/05 54,000 Delta Air Lines, Inc., Notes, Ba3 125 6.65%, 3/15/04 101,250 Ba3 50 7.70%, 12/15/05 36,500 Ba3 50 8.30%, 12/15/29 28,500 B2 100 Northwest Airlines, Inc., Notes, 8.70%, 3/15/07 62,500 ---------------- 324,138
22 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Aluminum 0.1% B1 $ 110 Century Aluminum Co., Sr. Sec'd. Notes, 11.75%, 4/15/08 $ 106,150 Caa1 20 United States Can Co., Sr. Sub. Notes, 12.375%, 10/1/10 11,600 ---------------- 117,750 - ------------------------------------------------------------------------------------- Automotive Parts 0.7% Ba2 75 American Axle & Manufacturing, Inc., Sr. Sub. Notes, 9.75%, 3/1/09 80,719 Baa3 150 ArvinMeritor, Inc., Notes, 8.75%, 3/1/12 159,000 Ba2 15 AutoNation, Inc., Sr. Notes, 9.00%, 8/1/08 15,600 Caa1 50 Eagle Picher Industries, Inc., Sr. Sub. Notes, 9.375%, 3/1/08 37,000 Ba1 200 Lear Corp., Gtd., 7.96%, 5/15/05 210,500 Caa1 100 Motors & Gears, Inc., Sr. Notes, 10.75%, 11/15/06 87,000 Ba3 200 Navistar International 7.00%, 2/1/03 200,000 B3 100 Rexnord Corp., Sr. Sub. Notes, 10.125%, 12/15/12 103,500 ---------------- 893,319 - ------------------------------------------------------------------------------------- Banks 0.1% Ba2 150 Sovereign Bancorp, Inc., Sr. Notes, 10.25%, 5/15/04 159,000 B1 30 Western Financial Bank, Sub. Cap. Debs., 8.875%, 8/1/07 29,437 ---------------- 188,437
See Notes to Financial Statements 23 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Building & Construction 0.3% Ba2 $ 30 Beazer Homes USA, Inc., Sr. Notes, 8.375%, 4/15/12 $ 31,200 Ba1 150 D.R. Horton., Inc., Sr. Notes, 7.875%, 8/15/11 150,000 Ba3 65 KB Home, Sr. Sub. Notes, 8.625%, 12/15/08 67,925 B1 160 Nortek, Inc., Sr. Sub. Notes, Ser. B, 9.25%, 3/15/07 162,600 ---------------- 411,725 - ------------------------------------------------------------------------------------- Cable 0.6% NR 50 Callahan Nordrhein Westfalen, (Germany), Sr. Disc. Notes, Zero Coupon (until 7/15/05), 16.00%, 7/15/10(b) 1,500 Charter Communications Holdings, Sr. Disc. Notes, Zero Coupon (until 5/15/06), Ca 420 11.75%, 5/15/11 138,600 Sr. Notes, Ca 370 10.00%, 5/15/11 179,450 B3 75 Coaxial Communications, Inc., Sr. Notes, 10.00%, 8/15/06 69,469 B2 50 CSC Holdings, Inc., Sr. Sub. Debs., 10.50%, 5/15/16 51,500 Caa1 100 International Wire Group, Inc., Sr. Sub. Notes, 11.75%, 6/1/05 69,000 Lin Holdings Corp., Sr. Disc. Notes, Zero Coupon (until 3/1/03), B3 45 10.00%, 3/1/08 46,913 Zero Coupon (until 3/10/03), B3 115 10.00%, 3/1/08 117,300
24 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- B3 $ 125 Paxson Communications Corp., Sr. Sub. Notes, 10.75%, 7/15/08 $ 125,000 B3 75 Star Choice Communications, Sr. Sec'd. Notes, 13.00%, 12/15/05 71,250 ---------------- 869,982 - ------------------------------------------------------------------------------------- Chemicals 0.7% B2 75 Avecia Group PLC, Sr. Notes, 11.00%, 7/1/09 62,250 Baa3 125 Ferro Corp., Sr. Notes, 9.125%, 1/1/09 136,172 Huntsman ICI Chemicals, Inc., Gtd. Notes, Caa1 185 10.125%, 7/1/09 153,550 IMC Global, Inc., Ba2 50 11.25%, 6/1/11 53,500 Sr. Notes, Ser. B, Ba2 20 10.875%, 6/1/08 21,500 Ba2 40 11.25%, 6/1/11 42,800 B2 120 ISP Chemco, Inc., Sr. Sub. Notes, 10.25%, 7/1/11 126,600 B2 295 Lyondell Chemical Co., Sr. Sub. Notes, 10.875%, 5/1/09 249,275 Caa2 95 OM Group, Inc., Sr. Sub. Notes, 9.25%, 12/15/11 62,700 ---------------- 908,347 - ------------------------------------------------------------------------------------- Commercial Services 0.2% B2 50 Iron Mountain, Inc., Gtd. Notes, 8.625%, 4/1/13 52,875 B2 175 RH Donnelley Financial Corp., Sr. Sub. Notes, 10.875%, 12/15/12 192,500 ---------------- 245,375
See Notes to Financial Statements 25 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Computer Services 0.3% B1 $ 85 Amkor Tech, Inc., Sr. Notes, 9.25%, 5/1/06 $ 80,325 B1 70 Echostar Broadband Corp., Sr. Notes, 10.375%, 10/1/07 74,900 Unisys Corp., Sr. Notes, Ba1 150 7.25%, 1/15/05 152,625 Ba1 50 8.125%, 6/1/06 52,000 ---------------- 359,850 - ------------------------------------------------------------------------------------- Containers 0.8% B2 75 Anchor Glass Container Corp., Sec'd. Notes, 11.00%, 2/15/13 75,000 B3 75 Berry Plastics Corp., Sr. Sub. Notes, 10.75%, 7/15/12 79,500 B3 125 BWAY Corp., Sr. Sub. Notes, 10.00%, 10/15/10 131,250 CCC+(Pound) 235 Graham Packaging, Sr. Disc. Notes, Ser. B, 10.75%, 1/15/09 227,950 B2 100 Greif Brothers Corp., Sr. Sub. Notes, 8.875%, 8/1/12 105,500 B2 30 Owens-Brockway Glass Containers, Sr. Sec'd. Notes 8.75%, 11/15/12 30,450 B2 50 Radnor Holdings, Inc., Sr. Notes, 10.00%, 12/1/03 43,625 B3 25 Riverwood International Corp., Sr. Notes, 10.625%, 8/1/07 25,750 B2 50 Smurfit-Stone Container Corp., Gtd., 8.25%, 10/1/12 51,375 B2 150 Stone Container Corp., Sr. Notes, 8.375%, 7/1/12 155,250 B2 145 Stone Container Fin-Can (Canada), Gtd., 11.50%, 8/15/06 153,700 ---------------- 1,079,350
26 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Electronics 0.4% Ba2 $ 150 Flextronics International Ltd. (Singapore), 9.875%, 7/1/10 $ 161,250 NR 75 Gentek, Inc., Gtd. Notes 11.00%, 8/1/09(b) 3,750 Ba3 125 L-3 Communications Corp., Sr. Sub. Notes, 7.625%, 6/15/12 130,625 Ba3 25 PerkinElmer, Inc., Sr. Sub. Notes, 8.875%, 1/15/13 24,375 Ba2 125 Sanmina-SCI Corp., Sec'd., 10.375%, 1/15/10 130,000 Ba3 75 TNP Enterprises, Inc., Sr. Sub. Notes, 10.25%, 4/1/10 74,250 ---------------- 524,250 - ------------------------------------------------------------------------------------- Energy 0.5% Calpine Corp., Notes, B1 395 8.50%, 2/15/11 181,700 Sr. Notes, B1 50 8.75%, 7/15/07 23,500 Cogentrix Energy, Inc., B1 75 8.75%, 10/15/08 49,500 Sr. Notes, Ba3 20 7.20%, 10/1/08 12,000 Ba3 100 7.625%, 5/1/06 63,000 Ba3 175 8.30%, 5/1/11 105,000 B2 240 Stone Energy Corp., Sr. Sub. Notes, 8.25%, 12/15/11 249,000 ---------------- 683,700 - ------------------------------------------------------------------------------------- Financial Services 1.8% B2 85 Actuant Finance Corp., Sr. Sub. Notes, 13.00%, 5/1/09 99,450 A3 200 Ford Motor Credit Corp., 2.69%, 3/8/04 194,750
See Notes to Financial Statements 27 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- General Motors Acceptance Corp., FRN, MTN, A2 $ 700 6.251%, 4/5/04 $ 691,148 Notes, A2 1,000 6.875%, 9/15/11 973,814 Midland Funding Corp., Debs., Ba3 75 13.25%, 7/23/06 80,250 Sr. Sec'd. Notes, Ser. A, Ba3 250 11.75%, 7/23/05 262,500 Orion Power Holdings, Inc., Sr. Notes, B3 100 12.00%, 5/1/10 90,000 UCAR Finance, Inc., Gtd. Notes, B3 55 10.25%, 2/15/12 44,000 ---------------- 2,435,912 - ------------------------------------------------------------------------------------- Food & Beverage 0.2% B3 40 Agrilink Foods, Inc., Sr. Sub. Notes, 11.875%, 11/1/08 43,200 B2 125 Del Monte Corp., Sr. Sub. Notes, 8.625%, 12/15/12 129,375 B3 60 Great Atlantic & Pacific Tea, Inc., Notes, 7.75%, 4/15/07 44,550 Ba2 110 Smithfield Foods, Inc., Sr. Notes, 8.00%, 10/15/09 109,175 ---------------- 326,300 - ------------------------------------------------------------------------------------- Gaming 1.4% B2 20 Argosy Gaming Co., Sr. Sub. Notes, 9.00%, 9/1/11 21,000 B1 50 Boyd Gaming Corp., Sr. Sub. Notes, 8.75%, 4/15/12 52,250 Circus Circus Enterprises, Inc., Debs., Ba2 100 6.70%, 11/15/96 100,404 Notes, Ba2 100 6.45%, 2/1/06 100,000
28 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Ba2 $ 75 Coast Hotels & Casinos, Inc., Sr. Sub. Notes, 9.50%, 4/1/09 $ 78,750 B3 40 Hollywood Casino Corp., Sr. Sec'd. Notes, 11.25%, 5/1/07 42,900 Caa1 60 Hollywood Park, Inc., Sr. Sub. Notes, 9.25%, 2/15/07 53,400 B2 30 Horseshoe Gaming Holding Corp., Sr. Sub. Notes, 8.625%, 5/15/09 31,650 Baa3 25 International Game Technology, Sr. Notes, 7.875%, 5/15/04 26,375 MGM Mirage, Inc., Gtd. Notes, Ba2 370 9.75%, 6/1/07 402,837 Sr. Sub. Notes, Ba2 10 8.375%, 2/1/11 10,650 Ba3 25 Mohegan Tribal Gaming Authority, Sr. Sub. Notes, 8.00%, 4/1/12 25,687 Park Place Entertainment Corp., Sr. Notes, Ba1 200 7.50%, 9/1/09 204,000 Sr. Sub. Notes, Ba2 20 9.375%, 2/15/07 21,250 Ba2 20 8.875%, 9/15/08 21,200 B2 160 Station Casinos, Inc., Sr. Sub. Notes, 9.875%, 7/1/10 171,200 B3 350 Venetian Casino Resort LLC, Sec'd Mtge., 11.00%, 6/15/10 363,125 B3 125 Wynn Las Vegas LLC, 12.00%, 11/1/10 126,875 ---------------- 1,853,553
See Notes to Financial Statements 29 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Healthcare 1.7% Alaris Medical Systems, Inc., Sr. Sec'd. Notes, B2 $ 75 11.625%, 12/1/06 $ 85,312 Sr. Disc. Notes, Zero Coupon (until 8/1/03), Caa2 110 11.125%, 8/1/08 108,350 Ba3 150 Coventry Healthcare, Inc., Sr. Notes, 8.125%, 2/15/12 157,687 Hanger Orthopedic Group, Gtd. Notes, B2 125 10.375%, 2/15/09 131,875 Sr. Sub. Notes, B3 10 11.25%, 6/15/09 10,500 HCA, Inc., Debs., Ba1 230 7.50%, 12/15/23 237,362 Notes, FRN, Ba1 200 7.125%, 6/1/06 213,564 Notes, MTN, Ba1 60 9.00%, 12/15/14 73,215 Ba1 300 6.73%, 7/15/45 303,287 HealthSouth Corp., Sr. Sub. Notes, Baa3 25 6.875%, 6/15/05 22,750 B2 235 10.75%, 10/1/08 206,800 Caa2 130 Magellan Health Services, Inc., Sr. Sub Notes, 9.375%, 11/15/07 104,000 B3 160 Medquest Inc., Sr. Sub. Notes, 11.875%, 8/15/12 152,800 B2 150 Rotech Healthcare, Inc., Sr. Sub. Notes, 9.50%, 4/1/12 150,000 B3 55 Select Medical Corp., Sr. Sub. Notes, 9.50%, 6/15/09 58,025
30 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Triad Hospitals, Sr. Sub. Notes, B1 $ 195 8.75%, 5/1/09 $ 207,675 B2 50 11.00%, 5/15/09 54,625 ---------------- 2,277,827 - ------------------------------------------------------------------------------------- Hotels 0.3% B2 65 Extended Stay America, Inc., Sr. Sub. Notes, 9.875%, 6/15/11 64,838 Ba1 25 Hilton Hotels Corp., Notes, 7.625%, 12/2/12 24,716 Ba1 100 ITT Corp., Notes, 6.75%, 11/15/05 100,625 Starwood Hotels & Resorts Worldwide, Inc., Notes, Ba1 100 7.375%, 5/1/07 99,750 Ba1 115 7.375%, 11/15/15 105,800 ---------------- 395,729 - ------------------------------------------------------------------------------------- Industrials 0.1% Caa2 50 AES Drax Holdings Ltd. (Cayman Islands), Sr. Sec'd. Notes, 10.41%, 12/31/20 28,000 B2 150 United Rentals, Inc., Gtd. Notes, 9.50%, 6/1/08 124,500 ---------------- 152,500 - ------------------------------------------------------------------------------------- Manufacturing 0.5% Caa1 40 Applied Extrusion Technologies, Sr. Notes, 10.75%, 7/1/11 25,200 Baa1 250 Ford Motor Co., Notes, 7.45%, 7/16/31 211,553 B2 150 Joy Global, Inc., Sr. Sub. Notes, 8.75%, 3/15/12 157,500
See Notes to Financial Statements 31 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- B2 $ 150 The Manitowoc Company, Inc., Sr. Sub. Notes, 10.50%, 8/1/12 $ 157,500 Tyco International Group SA, Notes, Ba2 100 6.375%, 10/15/11 93,000 ---------------- 644,753 - ------------------------------------------------------------------------------------- Media 1.4% B1 125 Alliance Atlantis Communications, Inc. (Canada), Sr. Sub. Notes, 13.00%, 12/15/09 137,500 B2 30 American Media Operations, Inc., Gtd. Notes, Ser. B, 10.25%, 5/1/09 32,100 Baa1 250 AOL Time Warner, Inc., 7.625%, 4/15/31 259,004 B2 75 Canwest Media, Inc., Sr. Sub. Notes, 10.625%, 5/15/11 81,563 Baa1 300 Cox Enterprises, Inc., FRN, 2.607%, 5/1/03 298,835 B3 200 Dex Media East LLC, Sr. Sub. Notes, 12.125%, 11/15/12 220,500 Ba3 125 Entercom Radio, Gtd. Notes, 7.625%, 3/1/14 131,250 B3 50 Gray Communications Systems, Inc., Sr. Sub. Notes, 9.25%, 12/15/11 53,500 Houghton Mifflin Co., Sr. Notes, B2 100 8.25%, 2/1/11 102,250 B3 75 9.875%, 2/1/13 78,000 B2 150 Mediacom Broadband LLC, Sr. Notes, 11.00%, 7/15/13 156,375 B3 50 Primedia, Inc., Sr. Notes, 8.875%, 5/15/11 47,500
32 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Quebecor Media, Inc. (Canada), Sr. Disc. Notes, Zero Coupon (until 7/15/06), B2 $ 100 13.75%, 7/15/11 $ 66,500 Sr. Notes, B2 50 11.125%, 7/15/11 52,000 B2 125 Sinclair Broadcast Group, Inc., Gtd. Notes, 8.00%, 3/15/12 128,750 B- (Pound) 100 Vertis Inc., Sr. Notes, 10.875%, 6/15/09 103,000 ---------------- 1,948,627 - ------------------------------------------------------------------------------------- Mining 0.2% Ba2 125 Normandy Yandal Ops. LTD (Austria), Sr. Notes, 8.875%, 4/1/08 124,375 Terex Corp., Sr. Sub. Notes, B3 75 8.875%, 4/1/08 69,000 B3 90 10.375%, 4/1/11 86,175 B3 30 9.25%, 7/15/11 27,600 ---------------- 307,150 - ------------------------------------------------------------------------------------- Miscellaneous Services 0.5% B3 145 Concentra Operating Corp., Sr. Sub. Notes, Ser. B, 13.00%, 8/15/09 148,625 Ba2 200 Fresenius Med. Care Cap. Trust, Gtd. Notes, 7.875%, 2/1/08 199,000 Service Corp. International, Inc., Notes, B1 175 6.50%, 3/15/08 161,875 Sr. Notes, B1 50 6.00%, 12/15/05 48,625 Ba3 150 Stena AB (Sweden), Sr. Notes, 8.75%, 6/15/07 151,500
See Notes to Financial Statements 33 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Caa1 $ 20 Sun World International, Inc., First Mtge. Notes, Ser. B, 11.25%, 4/15/04(b) $ 12,000 ---------------- 721,625 - ------------------------------------------------------------------------------------- Networking 0.1% B3 145 Nortel Networks Ltd., Notes, 6.125%, 2/15/06 123,975 - ------------------------------------------------------------------------------------- Office Equipment & Supplies 0.2% B1 65 Xerox Capital Europe PLC (United Kingdom), Gtd. Notes, 5.875%, 5/15/04 64,025 B1 195 Xerox Corp., Notes, 5.50%, 11/15/03 193,050 ---------------- 257,075 - ------------------------------------------------------------------------------------- Oil & Gas 2.0% BB- (Pound) 75 AmeriGas Partners, LP, Sr. Notes, 8.875%, 5/20/11 80,250 D (Pound) 40 Eott Energy Partners LP, Sr. Notes, 11.00%, 10/1/09(b) 19,600 B2 40 Ferrellgas Partners LP, Notes, 8.75%, 6/15/12 41,600 Ba3 250 Forest Oil Corp., Sr. Notes, 8.00%, 6/15/08 261,250 Hanover Equipment, Sr. Sec'd. Notes, B2 200 8.50%, 9/1/08 189,000 B2 40 8.75%, 9/1/11 37,500 B2 15 Houston Exploration Co., Sr. Sub. Notes, 8.625%, 1/1/08 15,488 B1 25 Leviathan Gas Pipeline LP, Sr. Sub Notes, 10.375%, 6/1/09 25,625 B2 65 Magnum Hunter Resources, Inc., Gtd., 9.60%, 3/15/12 69,550 Ba3 250 Newfield Exploration Co., Sr. Sub. Notes, 8.375%, 8/15/12 265,253
34 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Ba1 $ 150 Ocean Energy, Inc., Gtd., 8.375%, 7/1/08 $ 157,688 Ba1 150 Parker & Parsley Petroleum Co., Sr. Notes, 8.25%, 8/15/07 162,121 B1 35 Parker Drilling Co., Sr. Notes, Ser. D, 9.75%, 11/15/06 35,525 Baa1 250 Petroleos Mexicanos Proj. Fdg. Master Tr., 7.375%, 12/15/14 251,563 Ba2 20 Plains All American Pipeline, LP, Gtd., 7.75%, 10/15/12 21,000 Ba3 100 Premcor Refining Group, Sr. Notes, 9.50%, 2/1/13 100,750 Tennessee Gas Pipeline, Debs., B1 140 7.00%, 3/15/27 130,200 B1 125 7.625%, 4/1/37 105,000 B1 155 Vintage Petroleum, Inc., Sr. Sub. Notes, 9.75%, 6/30/09 162,750 Ba3 125 Westport Resources Corp., Sr. Sub. Notes, 9.75%, 6/30/09 131,875 The Williams Companies, Inc., Caa1 375 7.125%, 9/1/11 285,000 Caa1 50 8.125%, 3/15/12 39,250 Caa1 250 7.50%, 1/15/31 173,750 ---------------- 2,761,588 - ------------------------------------------------------------------------------------- Paper & Packaging 0.5% Ba1 150 Casades Inc. (Canada), Sr. Notes, 7.25%, 2/15/13 150,000 Ba2 45 Caraustar Industries, Inc., Sr. Sub. Notes, 9.875%, 4/1/11 46,350 Ba2 100 Fort James Corp., Sr. Notes, 6.625%, 9/15/04 99,500
See Notes to Financial Statements 35 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Ca $ 20 Doman Industries Ltd. (Canada), Sr. Notes, Ser. B, 9.25%, 11/15/07(b) $ 2,800 Georgia-Pacific Corp., Notes, Ba3 35 8.125%, 5/15/11 31,850 Ba2 150 9.375%, 2/1/13 150,000 B1 190 Silgan Holdings, Inc., Sr. Sub. Debs., 9.00%, 6/1/09 196,650 ---------------- 677,150 - ------------------------------------------------------------------------------------- Real Estate Investment Trusts 0.9% Ba3 350 Felcor Suites LP, Gtd. Sr. Notes, 7.375%, 10/1/04 351,313 Ba3 185 HMH Properties, Inc., Sr. Notes, Ser. B, 7.875%, 8/1/08 172,975 Ba3 150 Host Marriott LP, Sr. Notes, Ser. H, 9.50%, 1/15/07 148,500 B1 150 Intrawest Corp., Sr. Notes, 10.50%, 2/1/10 156,750 B1 50 Prime Hospitality Corp., Sr. Sub. Notes, 8.375%, 5/1/12 46,500 Ba2 300 Senior Housing Properties Trust, Sr. Notes, 8.625%, 1/15/12 298,500 Ventas Realty LP, Gtd. Notes, Ba3 40 8.75%, 5/1/09 42,200 Sr. Notes, Ba3 35 9.00%, 5/1/12 37,275 ---------------- 1,254,013 - ------------------------------------------------------------------------------------- Recreation 0.2% B2 125 Regal Cinemas Corp., Sr. Sub. Notes, 9.375%, 2/1/12 131,562 Ba2 30 Royal Caribbean Cruises Ltd. (Liberia), Notes, 8.125%, 7/28/04 30,075
36 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- B2 $ 165 Sun International Hotels Ltd., Sr. Sub. Notes, 8.875%, 8/15/11 $ 169,950 ---------------- 331,587 - ------------------------------------------------------------------------------------- Restaurants 0.3% B3 60 Carrols Corp., Sr. Sub. Notes, 9.50%, 12/1/08 54,000 Ba1 350 Tricon Global Restaurants, Inc., Sr. Notes, 8.875%, 4/15/11 383,250 ---------------- 437,250 - ------------------------------------------------------------------------------------- Retail 0.4% Ba1 105 Delhaize America, Inc., Gtd., 8.125%, 4/15/11 102,113 Ba3 15 Dillards, Inc., Notes, 6.43%, 8/1/04 15,000 Ba3 75 Dimon, Inc., Sr. Notes, 9.625%, 10/15/11 80,250 Ba3 75 JC Penney Co., Inc., Debs., 7.40%, 4/1/37 76,688 B2 45 Resources-Care, Inc., Sr. Notes, 10.625%, 11/15/08 33,750 Rite Aid Corp., Debs., Caa3 25 6.875%, 8/15/13 17,625 Caa3 10 7.70%, 2/15/27 6,850 Notes, Caa3 40 6.00%, 12/15/05 33,800 B1 145 Saks, Inc., Notes, 7.375%, 2/15/19 119,625 Ba2 30 Winn Dixie Stores, Inc., Sr. Notes, 8.875%, 4/1/08 31,725 ---------------- 517,426
See Notes to Financial Statements 37 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Schools 0.1% B3 $ 80 Kindercare Learning Center, Inc., Sr. Sub Notes, 9.50%, 2/15/09 $ 79,300 - ------------------------------------------------------------------------------------- Semiconductors 0.1% B2 100 Fairchild Semiconductor Corp., Gtd., 10.375%, 10/1/07 105,750 B3 40 ON Semiconductor Corp., Gtd. Notes, 12.00%, 5/15/08 32,650 ---------------- 138,400 - ------------------------------------------------------------------------------------- Steel 0.2% B1 195 AK Steel Corp., Sr. Notes, 7.75%, 6/15/12 186,225 Ba3 25 United States Steel LLC, Sr. Notes, 10.75%, 8/1/08 24,750 ---------------- 210,975 - ------------------------------------------------------------------------------------- Telecommunications 3.6% Baa2 500 AT&T Corp., Sr. Notes, 8.00%, 11/15/31 527,878 Baa3 47 AT&T Broadband, Gtd., 8.375%, 3/15/13 53,797 B3 80 Crown Castle International Corp., Sr. Notes, 10.75%, 8/1/11 68,400 B3 10 Dobson Communications Corp., Sr. Notes, 10.875%, 7/1/10 9,100 Echostar DBS Corp., Sr. Notes, B+Pound 175 9.25%, 2/1/06 183,094 B1 300 9.125%, 1/15/09 316,500 Caa1 15 Fairpoint Communications, Inc., Sr. Sub. Notes, 12.50%, 5/1/10 12,750
38 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Baa3 $ 500 France Telecom SA (France), Notes, 9.00%, 3/1/31 $ 607,843 Caa1 50 Lucent Technologies, Inc., Notes, 5.50%, 11/15/08 32,500 Ca 2 Netia Holdings BV (Netherlands), 10.00%, 12/20/08 2,039 Nextel Communications, Inc., Sr. Disc. Notes, B3 290 10.65%, 9/15/07 290,000 Sr. Notes, B3 15 9.375%, 11/15/09 14,438 B3 65 Panamsat Corp., Notes, 8.50%, 2/1/12 63,050 Qwest Capital Funding, Inc., Caa2 300 7.00%, 8/3/09 219,750 Caa2 50 7.90%, 8/15/10 37,125 Gtd. Notes, Caa2 100 7.25%, 2/15/11 72,750 Qwest Corp., Notes, Ba3 150 7.625%, 6/9/03 149,625 Ba3 40 7.20%, 11/1/04 39,300 CCC+ (Pound) 162 Qwest Services Corp., Notes, 13.50%, 12/15/10 170,910 Ba3 35 Rogers Wireless, Inc. (Canada), Sr. Sec'd. Notes, 9.625%, 5/1/11 34,037 Sprint Capital Corp., Gtd. Notes, Baa3 150 5.70%, 11/15/03 150,000 Baa3 500 5.875%, 5/1/04 492,500 Notes, Baa3 575 8.375%, 3/15/12 549,125 Ba3 150 Sun Media Corp. (Canada), Sr. Notes, 7.625%, 2/15/13 151,875
See Notes to Financial Statements 39 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Ba1 $ 220 Telus Corp. (Canada), Notes, 8.00%, 6/1/11 $ 215,600 Tritel PCS, Inc., Sr. Sub. Disc. Notes, Zero Coupon (until 5/15/04), Baa2 71 12.75%, 5/15/09 67,805 Baa2 128 10.375%, 1/15/11 142,080 A3 85 Verizon Wireless Capital, Notes, 5.375%, 12/15/06 89,275 Ba3 78 Voicestream Wireless Corp., Sr. Disc. Notes, Zero Coupon (until 11/15/04), 11.875%, 11/15/09 70,980 ---------------- 4,834,126 - ------------------------------------------------------------------------------------- Utilities 1.0% B3 125 AES Corp., Sr. Notes, 9.375%, 9/15/10 85,625 Ba1 100 AES Eastern Energy 9.00%, 1/2/17 91,430 B1 30 Cogentrix Energy, Inc., Sr. Notes, 8.10%, 3/15/04 22,500 El Paso Corp., Notes, Caa1 90 7.125%, 5/6/09 69,220 Sr. Notes, Caa1 365 7.00%, 5/15/11 281,050 Caa1 150 7.75%, 1/15/32 102,000 B1 15 El Paso Energy Partners LP, Sr. Sub. Notes, 8.50%, 6/1/11 14,700 B3 15 Illinova Corp., 11.50%, 12/15/10 14,850 Caa1 400 Limestone Electron Trust, Notes, 8.625%, 3/15/03 394,736 Ba3 20 Mirant Mid-Atlantic LLC, 8.625%, 6/30/12 17,227
40 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- B3 $ 100 Reliant Energy Mid Atlantic, Ser. C, 9.681%, 7/2/26 $ 77,000 Western Resources, Inc., Notes, Ba2 30 6.25%, 8/15/03 29,400 Ba1 130 7.875%, 5/1/07 133,250 ---------------- 1,332,988 - ------------------------------------------------------------------------------------- Waste Management 0.7% Allied Waste of North America, Inc., Sr. Notes, Ba3 50 7.375%, 1/1/04 50,500 Ba3 370 8.50%, 12/1/08 375,550 Ba3 150 7.875%, 1/1/09 148,125 Ba1 375 Waste Management Inc., Sr. Notes, 7.00%, 10/1/04 391,533 ---------------- 965,708 Total corporate bonds (cost $31,711,915) 31,769,510 ---------------- CONVERTIBLE BONDS 0.5% - ------------------------------------------------------------------------------------- Electronic Equipment & Instruments 0.1% Tyco International Group, SA, Ba2 75 2.75%, 1/15/18 75,000 Ba2 25 3.125%, 1/15/23 25,031 Ba3 150 Solectron Corp., Zero Coupon, 11/20/20 78,188 ---------------- 178,219 - ------------------------------------------------------------------------------------- Financial Services 0.4% A1 500 Hellenic Finance Corp., (Luxembourg), 2.00%, 7/15/03 558,138 - ------------------------------------------------------------------------------------- Telecommunications B3 10 Nortel Networks Corp., Gtd. Sr. Notes, 4.25%, 9/1/08 6,725 ---------------- Total convertible bonds (cost $713,216) 743,082 ----------------
See Notes to Financial Statements 41 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- MORTGAGE-RELATED SECURITIES 2.4% Aaa $ 254 Bear Stearns Mortgage Securities, Inc., Ser. 1997-7, Class A-9, 7.00%, 2/25/28 $ 257,890 AAA (Pound) 283 Mellon Residential Funding Corp., Ser. 1999, Class A-3, 6.58%, 7/25/29 285,188 Aaa 500 Nationslink Funding Corp., Ser. 1999-SI, Class A-3, 6.297%, 11/10/30 509,506 PNC Mortgage Securities Corp., Ser. 1995-2, Class A-4, Aa1 62 6.75%, 6/25/16 62,143 Ser. 1999-8, Class I A-5, AAA (Pound) 493 7.25%, 10/25/29 504,106 AAA (Pound) 521 Residential Funding Mortgage, Inc., Ser. 1997 S-19, Class A-3, 6.50%, 12/25/12 529,927 NA 732 Vendee Mortgage Trust, Ser. 2000-1, Class 1A, 6.828%, 1/15/30 783,068 NA 298 Washington Mutual, Ser. 1999-WM1, Class M1, 6.484%, 10/19/39 301,528 ---------------- Total mortgage-related securities (cost $3,062,171) 3,233,356 ---------------- FOREIGN GOVERNMENT SECURITIES 4.3% Government of Germany, Notes, Aaa 1,400 5.375%, 1/4/10 1,654,573 Aaa 1,700 5.25%, 7/4/10 1,995,255 Aaa 500 5.25%, 1/4/11 586,751 Ba1 300 Government of Panama, 9.625%, 2/8/11 327,750
42 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- Republic of Brazil, Notes, B2 $ 400 11.00%, 1/11/12 $ 281,000 Ser. C, B2 259 8.00%, 4/15/14 177,397 United Mexican States, NA 300 Zero Coupon, 6/30/04 2,100 Notes, Baa2 250 8.375%, 1/14/11 278,125 Baa2 500 6.375%, 1/16/13 488,500 ---------------- Total foreign government securities (cost $5,329,066) 5,791,451 ---------------- MUNICIPAL BONDS 2.1% 400 Chicago Illinois, Project & Refunding Series A, 5.00%, 1/1/41 395,288 400 Florida St. Brd. of Ed., 5.00%, 6/1/32 402,860 200 Georgia St., Rd. & Twy. Auth. Rev., 5.00%, 3/1/21 206,322 250 Golden State Tobacco Settlement Rev., 6.25%, 6/1/33 239,383 500 Long Island College Hosp., Rev., FHA, Mtge., Ser. B, 8.90%, 8/15/30 569,850 250 Massachusetts. St. Wtr. Res. Auth., 5.00%, 8/1/32 250,372 400 San Antonio Water Rev., 5.00%, 5/15/25 401,740 400 South Carolina St. Hwy., Ser. B, 5.00%, 4/1/17 421,604 ---------------- Total municipal bonds (cost $2,734,218) 2,887,419 ----------------
See Notes to Financial Statements 43 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Moody's Amount Rating (000) Description Value (Note 1) - -------------------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY AND SECURITIES 15.4% Federal Home Loan Mortgage Corp., $ 48 4.818%, 8/1/23 $ 49,338 782 10.00%, 5/15/20 802,009 Federal National Mortgage Association, 131 6.50%, 9/1/05 135,451 451 5.00%, 4/1/14 461,171 185 8.00%, 8/25/22 191,676 636 7.50%, 1/1/32 677,081 1,500 6.50%, 2/20/33 1,574,063 275 4.49%, 5/1/36, FRN 280,290 Government National Mortgage Association, 36 5.75%, 9/20/22 36,682 500 7.00%, TBA 530,781 119 8.50%, 2/20/30 - 6/15/30 128,983 111 8.50%, 5/20/30 119,552 530 8.50% 6/15/30 573,976 2,490 6.50%, 7/15/31 2,615,676 111 7.50%, 8/15/31 119,070 2,884 6.50%, 4/15/32 3,029,643 United States Treasury Bonds, 600 8.875%, 8/15/17 869,227 20 8.125%, 8/15/19 27,634 276 3.875%, 4/15/29 337,100 United States Treasury Notes, 900 5.75%, 11/15/05 988,523 1,683 3.625%, 1/15/08 1,850,240 1,562 3.50%, 1/15/11 1,724,515 400 12.00%, 8/15/13 575,500 1,000 10.625%, 8/15/15 1,598,672 500 6.00%, 2/15/26 568,008 728 3.625%, 4/15/28 851,927 500 United States Treasury Strips, Zero Coupon, 2/15/22 180,680 ---------------- Total U.S. government agency and securities (cost $20,345,018) 20,897,468 ----------------
44 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Units Description Value (Note 1) - ----------------------------------------------------------------------------------------- WARRANTS(a) 0.1% 300,000 United Mexican States, expiring 6/30/05 $ 375 300,000 United Mexican States, expiring 6/30/06 255 300,000 United Mexican States, expiring 6/1/07 225 ---------------- Total warrants (cost $87) 855 ---------------- RIGHTS(a) 19,021 Netia Holdings, expiring 12/31/04, (Poland) (cost $0) 14,922 ---------------- Total long-term investments (cost $117,906,739) 116,080,622 ---------------- SHORT-TERM INVESTMENTS 15.0% COMMERCIAL PAPER 1.2% Principal Amount (000) - ----------------------------------------------------------------------------------------- $ 1,600 Westpac Trust Disc. Note, 1.245%, 5/28/03 1,593,581 ---------------- MUTUAL FUNDS 13.6% Shares - ----------------------------------------------------------------------------------------- 18,566,051 Prudential Core Investment Fund - Taxable Money Market Series 18,566,051 ---------------- U.S. GOVERNMENT AGENCY AND SECURITIES 0.2% Principal Amount (000) - ----------------------------------------------------------------------------------------- $ 10 Federal National Mortgage Association, 1.235%, 2/13/03 10,000 United States Treasury Bills, 30 Zero Coupon, 2/13/03 29,990 205 Zero Coupon, 2/20/03 204,889 ---------------- Total U.S. government agency and securities 244,879 ---------------- Total short-term investments (cost $20,404,461) 20,404,511 ---------------- Total Investments Before Outstanding Options Written and Securities Sold Short 100.5% (cost $138,311,200; Note 5) 136,485,133 ----------------
See Notes to Financial Statements 45 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Contracts Description Value (Note 1) - ----------------------------------------------------------------------------------------- OUTSTANDING CALL OPTIONS WRITTEN (0.1%) (8) United States Treasury Notes, expiring 6/03 @ 116 $ (5,875) (26) Euribor Futures, expiring 12/15/03 @ 97.25 (11,164) (900,000) Swap Option 3 month LIBOR, expiring 12/17/03 @ 5.5% (10,348) (2,600,000) Swap Option 3 month LIBOR, 5/03 @ 3.25% (15,473) (26) United States Treasury Notes, expiring 2/03 @ 116 (4,062) (3) United States Treasury Notes, expiring 3/03 @ 117 (141) ---------------- Total outstanding call options written (premiums received $67,809) (47,063) ---------------- SECURITIES SOLD SHORT (1.6%) Principal Amount (000) - ----------------------------------------------------------------------------------------- United States Treasury Notes, $ (500) 4.375%, 5/15/07 (531,933) (1,000) 5.50%, 5/15/09 (1,120,430) (500) 4.875%, 2/15/12 (536,914) ---------------- Total securities sold short (proceeds $2,175,246) (2,189,277) ---------------- Total Investments, Net of Outstanding Call Options Written and Securities Sold Short 98.8% (cost $136,068,145) 134,248,793 Assets in excess of other liabilities 1.2% 1,685,854 ---------------- Net Assets 100.0% $ 135,934,647 ---------------- ----------------
46 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd. (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. FHA--Federal Housing Administration. FRN--Floating Rate Note. MTN--Medium-Term Note. 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 47 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Statement of Assets and Liabilities (Unaudited)
January 31, 2003 - ---------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $138,311,200) $136,485,133 Foreign currency, at value (cost $4,440,150) 4,504,686 Cash 3,358,027 Receivable for investments sold 6,409,048 Receivable for Fund shares sold 1,304,263 Interest and dividends receivable 1,100,663 Unrealized appreciation on forward currency contracts 141,751 Due from broker--variation margin 10,575 Deferred expenses and other assets 1,283 ---------------- Total assets 153,315,429 ---------------- LIABILITIES Payable for investments purchased 13,354,296 Investments sold short, at value (proceeds received $2,175,246) 2,189,277 Payable for Fund shares reacquired 665,312 Unrealized depreciation on forward foreign currency contracts 586,927 Unrealized depreciation on swap agreements 302,870 Distribution fee payable 97,746 Management fee payable 86,409 Outstanding options written (premium received $67,809) 47,063 Accrued expenses and other liabilities 43,389 Deferred trustees' fees payable 7,493 ---------------- Total liabilities 17,380,782 ---------------- NET ASSETS $135,934,647 ---------------- ---------------- Net assets were comprised of: Shares of beneficial interest, at par $ 15,216 Paid-in capital in excess of par 148,338,640 ---------------- 148,353,856 Overdistribution of net investment income (112,261) Accumulated net realized loss on investments (10,092,618) Net unrealized depreciation on investments and foreign currency (2,214,330) ---------------- Net assets, January 31, 2003 $135,934,647 ---------------- ----------------
48 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Statement of Assets and Liabilities (Unaudited) Cont'd.
January 31, 2003 - ---------------------------------------------------------------------------------------- Class A: Net asset value and redemption price per share ($22,852,151 / 2,553,628 shares of beneficial interest issued and outstanding) $8.95 Maximum sales charge (5% of offering price) .47 ---------------- Maximum offering price to public $9.42 ---------------- ---------------- Class B: Net asset value, offering price and redemption price per share ($78,141,311 / 8,750,656 shares of beneficial interest issued and outstanding) $8.93 ---------------- ---------------- Class C: Net asset value and redemption price per share ($31,720,440 / 3,552,195 shares of beneficial interest issued and outstanding) $8.93 Sales charge (1% of offering price) .09 ---------------- Offering price to public $9.02 ---------------- ---------------- Class Z: Net asset value, offering price and redemption price per share ($3,220,745 / 359,838 shares of beneficial interest issued and outstanding) $8.95 ---------------- ----------------
See Notes to Financial Statements 49 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Statement of Operations (Unaudited)
Six Months Ended January 31, 2003 - ---------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Interest $ 2,635,523 Dividends (net of foreign withholding taxes of $1,717) 319,287 ---------------- Total income 2,954,810 ---------------- Expenses Management fee 475,594 Distribution fee--Class A 26,764 Distribution fee--Class B 371,132 Distribution fee--Class C 141,663 Custodian's fees and expenses 174,000 Transfer agent's fees and expenses 64,000 Registration fees 37,000 Reports to shareholders 35,000 Audit fee 14,000 Trustees' fees and expenses 8,000 Legal fees 4,000 Miscellaneous 952 ---------------- Total expenses 1,352,105 ---------------- Net investment income 1,602,705 ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions (4,110,050) Foreign currency transactions 413,734 Options written 47,119 Financial futures transactions 17,311 ---------------- (3,631,886) ---------------- Net change in unrealized appreciation (depreciation) on: Investments 6,014,619 Foreign currencies (350,446) Swaps (165,703) Options written 59,984 Financial futures contracts 53,924 ---------------- 5,612,378 ---------------- Net gain (loss) on investments 1,980,492 ---------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,583,197 ---------------- ----------------
50 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Statement of Changes in Net Assets (Unaudited)
Six Months Year Ended Ended January 31, 2003 July 31, 2002 - ------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income $ 1,602,705 $ 2,245,269 Net realized loss on investment and foreign currency transactions (3,631,886) (5,714,532) Net change in unrealized appreciation/(depreciation) of investments and foreign currencies 5,612,378 (8,612,419) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations 3,583,197 (12,081,682) ---------------- ---------------- Dividends and distributions (Note 1) Dividends from net investment income Class A (324,791) (487,140) Class B (851,471) (1,273,463) Class C (327,117) (365,244) Class Z (49,857) (50,160) ---------------- ---------------- (1,553,236) (2,176,007) ---------------- ---------------- Fund share transactions (net of share conversions) (Note 6) Net proceeds from shares sold 33,524,238 57,975,450 Net asset value of shares issued in reinvestment of dividends and distributions 567,262 2,056,625 Cost of shares reacquired (16,931,413) (24,025,014) ---------------- ---------------- Net increase in net assets from Fund share transactions 17,160,087 36,007,061 ---------------- ---------------- Total increase 19,190,048 21,749,372 NET ASSETS Beginning of year 116,744,599 94,995,227 ---------------- ---------------- End of year $135,934,647 $116,744,599 ---------------- ---------------- ---------------- ----------------
See Notes to Financial Statements 51 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Strategic Partners Asset Allocation Funds (the 'Trust'), 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'), Pacific Investment Management Company, RS Investments, Inc. and EARNEST Partners LLC 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 sale 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 LLC ('PI' 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. 52 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) 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. 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. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at year end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on investments and foreign currencies. 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. To the 53 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy on the collateral. 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. Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the 'initial margin.' Subsequent payments known as 'variation margin,' are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts. The Fund invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or market conditions. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. 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 (loss) is included in the Statement of Assets and Liabilities. Gain (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 (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. 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 54 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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 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. The Fund's principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund 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 (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on 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. 55 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Written options, future contracts and forward foreign currency exchange contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Interest Rate Swaps: In a simple interest rate swap, one investor pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps were conceived as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time. During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by 'marking-to-market' to reflect the market value of the swap. When the swap is terminated, the Fund will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund's basis in the contract, if any. The Fund is exposed to credit loss in the event of non-performance by the other party to the interest rate swap. However, the Fund does not anticipate non-performance by any counterparty. 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. Note 2. Agreements The Fund has a management agreement with PI. Pursuant to this agreement, PI manages the investment operations of the Fund, administers the Fund's affairs and supervises the Advisers' performance of all investment advisory services. PI 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 PI is computed daily and payable monthly at an annual rate of .75% of the average daily net assets of the Fund. PI, in turn, pays the Advisers' fees, based on the average daily net assets of the Fund segments they manage. 56 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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 January 31, 2003. PIMS has advised the Fund that it has received approximately $157,100 and $36,600 in front-end sales charges resulting from sales of Class A and Class C shares, respectively, during the six months ended January 31, 2003. PIMS has advised the Fund that for the six months ended January 31, 2003, it has received approximately $86,300 and $16,200 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively. Jennison, PIMS, PIM and PI are indirect, wholly owned subsidiaries of Prudential Financial, Inc. ('Prudential'). The Fund, along with other affiliated registered investment companies (the 'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of banks. For the six months ended January 31, 2003 the amount of the commitment was $800 million and the SCA allows the Funds to increase the commitment to $1 billion, if necessary. Interest on any borrowings under the SCA will be incurred at market rates. The Funds pay a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued and paid quarterly on a pro rata basis by the Funds. The purpose of the SCA is to serve as an alternative source of funding for capital share redemptions. The expiration date of the SCA is May 2, 2003. The Fund did not borrow any amounts pursuant to the SCA during the six months ended January 31, 2003. Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an indirect, wholly owned subsidiary of Prudential, serves as the Fund's transfer agent. During the six months ended January 31, 2003, the Fund incurred fees of approximately $55,900 for the services of PMFS. As of January 31, 2003 approximately $9,800 of such fees 57 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. were due to PMFS. Transfer agent fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to nonaffiliates. The Fund pays networking fees to affiliated and unaffiliated broker/dealers. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national clearing system. The Fund incurred approximately $8,000 in total networking fees, of which the amount relating to the services of Prudential Securities, Inc. ('PSI'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential was approximately $7,800 for the six months ended January 31, 2003. As of January 31, 2003, approximately $1,200 of such fees were due to PSI. These amounts are included in transfer agent's fees and expenses in the Statement of Operations. The Fund invests in the Taxable Money Market Series (the 'Series'), a portfolio of Prudential Core Investment Fund, pursuant to an exemptive order received from the Securities and Exchange Commission. The Series is a money market mutual fund registered under the Investment Company Act of 1940, as amended, and managed by PI. During the six months ended January 31, 2003, the Fund earned $21,000 from the Series by investing its excess cash. Note 4. Portfolio Securities Purchases and sales of portfolio securities, other than short-term investments, for the six months ended January 31, 2003 aggregated $151,900,827 and $164,865,108, respectively. At January 31, 2003 the Fund had outstanding forward currency contracts to sell foreign currencies, as follows:
Value at Value at Foreign Currency January 31, Settlement Date Appreciation Sale Contract 2003 Receivable (Depreciation) - ---------------------------------------- ----------- --------------- -------------- EUR 7,720,000, expiring 2/10/03 $ 8,283,726 $ 7,696,799 $ (586,927) ----------- --------------- -------------- ----------- --------------- -------------- Value at Value at Foreign Currency January 31, Settlement Date Appreciation Purchase Contract 2003 Payable (Depreciation) - ---------------------------------------- ----------- --------------- -------------- EUR 1,713,000, expiring 2/10/03 1,838,086 1,696,335 $ 141,751 ----------- --------------- -------------- ----------- --------------- --------------
During the period ended January 31, 2003, the Fund entered into financial futures contracts. Details of open contracts at January 31, 2003 are as follows: 58 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd.
Value at Value at Number of Expiration January 31, Trade Appreciation/ Contracts Type Date 2003 Date (Depreciation) - --------- --------------------------- ----------- ----------- ----------- --------------- Long Positions: 21 90 Day Eurobond 3/15/2004 $ 5,137,913 $ 5,103,795 $ 34,118 130 10 yr. U.S. Treasury Note 3/21/2003 14,838,282 14,647,625 190,657 Short Positions: 4 U.S. Treasury Bond 3/31/2003 436,062 423,374 (12,688) --------------- $ 212,087 --------------- ---------------
The Fund entered into 3 interest rate swap agreements. Under the agreement the Fund receives a floating rate and pays a respective fixed rate. Details of the swaps at January 31, 2003 are as follows:
Notional Unrealized Amount Fixed Floating Termination Appreciation (000) Rate Rate Date (Depreciation) - -------- ------ --------------- ------------ -------------- $9,300 5.00% 3 month LIBOR 6/18/13(a) $ (295,396) 800 4.25 6 month LIBOR 3/17/04(b) (1,401) 4,100 4.25 6 month LIBOR 3/17/04(b) (6,073) -------------- $ (302,870) -------------- --------------
- ------------------------------ (a) Counterparty--Bank of America (b) Counterparty--Morgan Stanley Transactions in options written during the six months ended January 31, 2003 were as follows:
Number of Premiums Contracts Received ---------- --------- Options outstanding as of July 31, 2002 35 $ 27,494 Options written 4,900,128 101,346 Options terminated (44) (44,475 ) Options expired (1,400,056) (16,556 ) ---------- --------- Options outstanding as of January 31, 2003 3,500,063 $ 67,809 ---------- --------- ---------- ---------
Note 5. Distributions and Tax Information The United States federal income tax basis of the Fund's investments and the net unrealized depreciation as of January 31, 2003 were as follows: 59 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd.
Total Net Unrealized Tax Basis Appreciation Depreciation Depreciation - ------------ ------------ ------------ ------------ $139,476,235 $ 4,774,877 $ 7,765,979 $ 2,991,102
The difference between book basis and tax basis were primarily attributable to deferred losses on wash sales for book and tax purposes. As of January 31, 2003, the accumulated undistributed earnings on a tax basis were $105,012. This differs from the amount shown on the statement of assets and liabilities primarily due to the deferral for federal tax purposes of post-October currency losses of approximately $178,500 and other cumulative timing differences. For federal income tax purposes, the Fund has a capital loss carryforward as of July 31, 2002 of approximately $77,000 of which $17,600 expires in 2009 and $59,400 expires in 2010. In addition, as of January 31, 2003, the Fund will elect to treat net capital losses of approximately $5,280,000 and net foreign currency losses of $178,500 incurred in the nine month period ended July 31, 2002 as having been incurred in the current 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 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. 60 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Transactions in shares of beneficial interest were as follows:
Class A Shares Amount - ----------------------------------------------------------- ---------- ----------- Six months ended January 31, 2003: Shares sold 631,497 $ 5,225,419 Shares issued in reinvestment of dividends and distributions 15,270 127,353 Shares reacquired (423,883) (3,351,827) ---------- ----------- Net increase (decrease) in shares outstanding before conversion 222,884 2,000,945 Shares issued upon conversion from Class B 33,587 299,982 ---------- ----------- Net increase (decrease) in shares outstanding 256,471 $ 2,300,927 ---------- ----------- ---------- ----------- Year ended July 31, 2002: Shares sold 1,113,546 $10,751,835 Shares issued in reinvestment of dividends and distributions 48,420 461,205 Shares reacquired (619,791) (5,938,289) ---------- ----------- Net increase (decrease) in shares outstanding before conversion 542,175 5,274,751 Shares issued upon conversion from Class B 71,086 675,623 ---------- ----------- Net increase (decrease) in shares outstanding 613,261 $ 5,950,374 ---------- ----------- ---------- ----------- Class B - ----------------------------------------------------------- Six months ended January 31, 2003: Shares sold 1,799,524 $15,921,229 Shares issued in reinvestment of dividends and distributions 37,162 309,560 Shares reacquired (885,361) (7,834,806) ---------- ----------- Net increase (decrease) in shares outstanding before conversion 951,325 8,395,983 Shares issued upon conversion into Class A (33,668) (299,982) ---------- ----------- Net increase (decrease) in shares outstanding 917,657 $ 8,096,001 ---------- ----------- ---------- ----------- Year ended July 31, 2002: Shares sold 2,835,534 $27,361,791 Shares issued in reinvestment of dividends and distributions 127,911 1,217,083 Shares reacquired (1,321,979) (12,590,473) ---------- ----------- Net increase (decrease) in shares outstanding before conversion 1,641,466 15,988,401 Shares issued upon conversion into Class A (70,832) (675,623) ---------- ----------- Net increase (decrease) in shares outstanding 1,570,634 $15,312,778 ---------- ----------- ---------- -----------
61 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Notes to Financial Statements (Unaudited) Cont'd.
Class C Shares Amount - ----------------------------------------------------------- ---------- ----------- Six months ended January 31, 2003: Shares sold 1,213,959 $10,785,338 Shares issued in reinvestment of dividends and distributions 13,265 110,495 Shares reacquired (567,357) (5,041,476) ---------- ----------- Net increase (decrease) in shares outstanding 659,867 $ 5,854,357 ---------- ----------- ---------- ----------- Year ended July 31, 2002: Shares sold 1,848,621 $17,765,124 Shares issued in reinvestment of dividends and distributions 34,760 329,476 Shares reacquired (464,216) (4,430,701) ---------- ----------- Net increase (decrease) in shares outstanding 1,419,165 $13,663,899 ---------- ----------- ---------- ----------- Class Z - ----------------------------------------------------------- Six months ended January 31, 2003: Shares sold 182,010 $ 1,592,252 Shares issued in reinvestment of dividends and distributions 2,381 19,854 Shares reacquired (80,023) (703,304) ---------- ----------- Net increase (decrease) in shares outstanding 104,368 $ 908,802 ---------- ----------- ---------- ----------- Year ended July 31, 2002: Shares sold 217,692 $ 2,096,700 Shares issued in reinvestment of dividends and distributions 5,141 48,861 Shares reacquired (111,230) (1,065,551) ---------- ----------- Net increase (decrease) in shares outstanding 111,603 $ 1,080,010 ---------- ----------- ---------- -----------
62 SEMIANNUAL REPORT JANUARY 31, 2003 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS STRATEGIC PARTNERS CONSERVATIVE GROWTH FUND Financial Highlights Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited)
Class A ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE(d): Net asset value, beginning of period $ 8.81 -------- Income from investment operations Net investment income .14 Net realized and unrealized gain (loss) on investments and foreign currencies .14 -------- Total from investment operations .28 -------- Less distributions Dividends from net investment income (.14) Distributions from net realized capital gains -- -------- Total dividends and distributions (.14) -------- Net asset value, end of period $ 8.95 -------- -------- TOTAL RETURN(b) 3.17% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $22,852 Average net assets (000) $21,237 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.53%(c) Expenses, excluding distribution and service (12b-1) fees 1.28%(c) Net investment income 3.12%(c) For Class A, B, C and Z shares: Portfolio turnover rate 123%
- ------------------------------ (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. * Effective August 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting market discount on debt securities. The effect of this change for the year ended July 31, 2002 was to decrease net investment income and increase net realized and unrealized gain (loss) per share by less than $.005 and decrease the ratio of net investment income from 2.72% to 2.71%. Per share amounts and ratios for the years ended prior to July 31, 2002 have not been restated to reflect this change in presentation. 64 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class A - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002* 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 9.95 $ 11.06 $ 10.36 $10.00 -------- -------- -------- ------- .26 .37 .37 .19 (1.15) (.30) .82 .35 -------- -------- -------- ------- (.89) .07 1.19 .54 -------- -------- -------- ------- (.25) (.36) (.37) (.18) -- (.82) (.12) -- -------- -------- -------- ------- (.25) (1.18) (.49) (.18) -------- -------- -------- ------- $ 8.81 $ 9.95 $ 11.06 $10.36 -------- -------- -------- ------- -------- -------- -------- ------- (9.10)% 1.00% 11.73% 5.34% $ 20,234 $ 16,760 $ 14,514 $9,097 $ 18,414 $ 15,985 $ 12,535 $6,157 1.62% 1.72% 1.73% 1.92%(c) 1.37% 1.47% 1.48% 1.67%(c) 2.71% 3.61% 3.46% 2.69%(c) 338% 334% 244% 180%
See Notes to Financial Statements 65 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class B ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE(d): Net asset value, beginning of period $ 8.79 -------- Income from investment operations Net investment income .11 Net realized and unrealized gain (loss) on investments and foreign currencies .13 -------- Total from investment operations .24 -------- Less distributions Dividends from net investment income (.10) Distributions from net realized capital gains -- -------- Total dividends and distributions (.10) -------- --- Net asset value, end of period $ 8.93 -------- -------- TOTAL RETURN(b) 2.79% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $78,141 Average net assets (000) $73,621 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.28%(c) Expenses, excluding distribution and service (12b-1) fees 1.28%(c) Net investment income 2.38%(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. * Effective August 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting market discount on debt securities. The effect of this change for the year ended July 31, 2002 was to decrease net investment income and increase net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to July 31, 2002 have not been restated to reflect this change in presentation. 66 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class B - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002* 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 9.93 $ 11.05 $ 10.35 $ 10.00 -------- -------- -------- -------- .19 .29 .29 .14 (1.15) (.29) .82 .34 -------- -------- -------- -------- (.96) -- 1.11 .48 -------- -------- -------- -------- (.18) (.30) (.29) (.13) -- (.82) (.12) -- -------- -------- -------- -------- (.18) (1.12) (.41) (.13) -------- -------- -------- -------- $ 8.79 $ 9.93 $ 11.05 $ 10.35 -------- -------- -------- -------- -------- -------- -------- -------- (9.81)% 34% 10.89% 4.77% $ 68,841 $ 62,177 $ 43,838 $ 30,235 $ 67,736 $ 52,433 $ 36,574 $ 19,308 2.37% 2.47% 2.48% 2.67%(c) 1.37% 1.47% 1.48% 1.67%(c) 1.97% 2.84% 2.70% 1.94%(c)
See Notes to Financial Statements 67 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE(d): Net asset value, beginning of period $ 8.79 -------- --- Income from investment operations Net investment income .11 Net realized and unrealized gain (loss) on investments and foreign currencies .13 -------- Total from investment operations .24 -------- Less distributions Dividends from net investment income (.10) Distributions from net realized capital gains -- -------- Total dividends and distributions (.10) -------- Net asset value, end of period $ 8.93 -------- -------- TOTAL RETURN(b) 2.79% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $31,720 Average net assets (000) $28,102 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.28%(c) Expenses, excluding distribution and service (12b-1) fees 1.28%(c) Net investment income 2.38%(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. * Effective August 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting market discount on debt securities. The effect of this change for the year ended July 31, 2002 was to decrease net investment income and increase net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to July 31, 2002 have not been restated to reflect this change in presentation. 68 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002* 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 9.93 $ 11.05 $ 10.35 $ 10.00 -------- -------- -------- -------- .19 .29 .28 .14 (1.15) (.29) .83 .34 -------- -------- -------- -------- (.96) -- 1.11 .48 -------- -------- -------- -------- (.18) (.30) (.29) (.13) -- (.82) (.12) -- -------- -------- -------- -------- (.18) (1.12) (.41) (.13) -------- -------- -------- -------- 8.79 $ 9.93 $ 11.05 $ 10.35 -------- -------- -------- -------- -------- -------- -------- -------- (9.81)% .34% 10.89% 4.77% $ 25,419 $ 14,626 $ 11,301 $ 14,035 $ 18,350 $ 12,763 $ 12,954 $ 12,039 2.37% 2.47% 2.48% 2.67%(c) 1.37% 1.47% 1.48% 1.67%(c) 1.97% 2.84% 2.63% 1.91%(c)
See Notes to Financial Statements 69 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class Z ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE(d): Net asset value, beginning of period $ 8.81 ------- Income from investment operations Net investment income .15 Net realized and unrealized gain (loss) on investments and foreign currencies .13 ------- Total from investment operations .28 ------- Less distributions Dividends from net investment income (.14) Distributions from net realized capital gains -- ------- Total dividends and distributions (.14) ------- Net asset value, end of period $ 8.95 ------- ------- TOTAL RETURN(b) 3.29% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 3,221 Average net assets (000) $ 2,832 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.28%(c) Expenses, excluding distribution and service (12b-1) fees 1.28%(c) Net investment income 3.39%(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. * Effective August 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting market discount on debt securities. The effect of this change for the year ended July 31, 2002 was to decrease net investment income and increase net realized and unrealized gains per share by $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to July 31, 2002 have not been restated to reflect this change in presentation. 70 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund Financial Highlights (Unaudited) Cont'd.
Class Z - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002* 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 9.95 $11.05 $ 10.37 $ 10.00 ------- ------- -------- -------- .28 .38 .35 .21 (1.14) (.28) .85 .35 ------- ------- -------- -------- (.86) .10 1.20 .56 ------- ------- -------- -------- (.28) (.38) (.40) (.19) -- (.82) (.12) -- ------- ------- -------- -------- (.28) (1.20) (.52) (.19) ------- ------- -------- -------- $ 8.81 $ 9.95 $ 11.05 $ 10.37 ------- ------- -------- -------- ------- ------- -------- -------- (8.87)% 1.30% 11.84% 5.58% $2,250 $1,432 $ 471 $ 20,843 $1,773 $ 949 $ 12,354 $ 38,460 1.37% 1.47% 1.48% 1.67%(c) 1.37% 1.47% 1.48% 1.67%(c) 2.96% 3.78% 3.30% 2.89%(c)
See Notes to Financial Statements 71 Strategic Partners Asset Allocation Funds Strategic Partners Conservative Growth Fund 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 Getting the Most from your Mutual Fund 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 Strategic Partners Conservative Growth Fund 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 Getting the Most from your Mutual Fund 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 Getting the Most from your Mutual Fund When you invest, you receive financial advice from a Financial Advisor or Registered Representative. Your financial professional can provide you with the following services: THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK WORTH IT? Your financial professional can help you match the reward you seek with the risk you can tolerate. Risk can be difficult to gauge--sometimes even the simplest investments bear surprising risks. The educated investor knows that markets seldom move in just one direction. There are times when a market sector or asset class will lose value or provide little in the way of total return. Managing your own expectations is easier with help from someone who understands the markets, and who knows you! KEEPING UP WITH THE JONESES A financial professional can help you wade through the numerous available mutual funds to find the ones that fit your individual investment profile and risk tolerance. While the newspapers and popular magazines are full of advice about investing, they are aimed at generic groups of people or representative individuals--not at you personally. Your financial professional will review your investment objectives with you. This means you can make financial decisions based on the assets and liabilities in your current portfolio and your risk tolerance--not just based on the current investment fad. BUY LOW, SELL HIGH Buying at the top of a market cycle and selling at the bottom are among the most common investor mistakes. But sometimes it's difficult to hold on to an investment when it's losing value every month. Your financial professional can answer questions when you're confused or worried about your investment, and should remind you that you're investing for the long haul. www.strategicpartners.com (800) 225-1852 FOR MORE INFORMATION Strategic Partners Mutual Funds Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 (800) 225-1852 Trustees Saul K. Fenster Robert F. Gunia Robert E. La Blanc Douglas H. McCorkindale W. Scott McDonald, Jr. Thomas T. Mooney David R. Odenath, Jr. Stephen Stoneburn Clay T. Whitehead Officers Judy A. Rice, President Robert F. Gunia, Vice President Grace C. Torres, Treasurer Lori E. Bostrom, Secretary Marguerite E.H. Morrison, Assistant Secretary Maryanne Ryan, Anti-Money Laundering Compliance Officer Manager Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Investment Advisers EARNEST Partners, LLC 75 14th Street, Suite 2300 Atlanta, GA 30309 Jennison Associates LLC 466 Lexington Avenue New York, NY 10017 Pacific Investment Management Company LLC 840 Newport Center Dr. Newport Beach, CA 92660 Prudential Investment Management, Inc. Gateway Center Two Newark, NJ 07102 RS Investment Management, L.P. 388 Market Street, Suite 1700 San Francisco, CA 94111 Distributor Prudential Investment Management Services LLC Gateway Center Three, 14th Floor 100 Mulberry Street Newark, NJ 07102-4077 Custodian The Bank of New York One Wall Street New York, NY 10286 Transfer Agent Prudential Mutual Fund Services LLC PO Box 8098 Philadelphia, PA 19101 Independent Accountants PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 Legal Counsel Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Fund Symbols Nasdaq CUSIP - ------------ ------ ----- Class A PCGAX 86276X103 Class B PBCFX 86276X202 Class C PCCFX 86276X301 Class Z PDCZX 86276X400 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. The accompanying financial statements as of January 31, 2003, were not audited and, accordingly, no opinion is expressed on them. Mutual funds are not insured by the FDIC or any federal government agency, are not a deposit of or guaranteed by any bank or any bank affiliate, and may lose value. (LOGO) Fund Symbols Nasdaq CUSIP - ------------ ------ ----- Class A PCGAX 86276X103 Class B PBCFX 86276X202 Class C PCCFX 86276X301 Class Z PDCZX 86276X400 MFSP504E2 IFS-A078609 SEMIANNUAL REPORT JANUARY 31, 2003 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. Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Performance at a Glance INVESTMENT GOALS AND STYLE The Strategic Partners Moderate Growth Fund's investment objective is capital appreciation and a reasonable level of current income. The Fund is designed for investors who want investment professionals to make their asset allocation decisions, that is, it invests in a diversified portfolio of stocks and fixed income securities. The Fund is periodically rebalanced in accordance with its asset allocation strategy. There can be no assurance that the Fund will achieve its investment objective. ABSOLUTE AND RELATIVE PERFORMANCE We evaluate an investment's performance in two ways. The first considers how much more (or less) an investment is worth at the end of a reporting period. This is known as absolute performance. The second compares whether you did better (or worse) than the market average (the benchmark index) or the average return of comparable funds (the Lipper Average) regardless of your gain or loss. This is called relative performance. Three factors determine the absolute return of an asset allocation fund: the asset allocation, the return for each asset class, and the relative performance of the investment advisers for the different asset classes. The fund's return is higher when the advisers outperform their asset class average than when they underperform them. This "adviser contribution" has a greater impact in the asset classes with larger allocations. This is why, in the discussion of the performance of your Strategic Partners Asset Allocation Fund, we may say, for example, that the Fund's large allocation to a low-performing asset class hurt its return even though the advisers' relative perform-ance had a positive impact. www.strategicpartners.com (800) 225-1852 Semiannual Report January 31, 2003 Cumulative Total Returns1 As of 1/31/03
Six Months One Year Three Years Since Inception2 Class A -0.46% -13.05% -14.50% 0.48% Class B -0.68 -13.62 -16.36 -2.73 Class C -0.68 -13.62 -16.36 -2.73 Class Z -0.33 -12.89 -13.89 1.50 S&P 500 Index3 -5.26 -23.01 -36.01 -22.21 Lipper Multi-Cap Core Funds Avg.4 -5.37 -22.43 -30.69 -10.92
Average Annual Total Returns1 As of 12/31/02 One Year Three Years Since Inception2 Class A -17.74% -7.46% -0.85% Class B -18.32 -7.41 -0.61 Class C -15.76 -6.86 -0.64 Class Z -13.25 -5.59 0.64 S&P 500 Index3 -22.09 -14.54 -5.35 Lipper Multi-Cap Core Funds Avg.4 -21.74 -12.15 -2.85 Past performance is not indicative of future results. Principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 1Source: Prudential Investments LLC and Lipper Inc. The cumulative total returns do not take into account applicable sales charges. The average annual total returns do take into account applicable sales charges. Without the distribution and service (12b-1) fee waiver of 0.05% annually for Class A shares, the returns would have been lower. The Fund charges a maximum front-end sales charge of 5% for Class A shares, and a 12b-1 fee of 0.30% annually. In some limited circumstances, Class A shares may not be subject to a front-end sales charge, but may be subject to a 1% contingent deferred sales charge (CDSC) for the first year. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1% for the first six years respectively after purchase, and a 12b-1 fee of 1.00% annually. 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 shares redeemed within 18 months of purchase, and a 12b-1 fee of 1.00% annually. Class Z shares are not subject to a sales charge or 12b-1 fees. The returns in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or following the redemption of fund shares. 2Inception date: 11/18/98. 3The Standard & Poor's 500 Composite Stock Price Index (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. Investors cannot invest directly in an index. 4The Lipper Average represents returns based on an average of all funds in the Lipper Multi-Cap Core Funds category for the periods noted. Funds in the Lipper Multi-Cap Core Funds Average typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value compared to the S&P SuperComposite 1500 Index. The returns for the S&P 500 Index and Lipper Multi-Cap Core Funds Average would be lower if they included the effects of sales charges or taxes, or in the case of the S&P 500 Index, operating expenses. 1 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS (LOGO) March 14, 2003 DEAR SHAREHOLDER, Securities markets were extraordinarily volatile between August 2002 and January 2003, the semiannual reporting period of the Strategic Partners Moderate Growth Fund. As stock prices dropped sharply around the world, investors looked for more stable securities, pushing bond prices up. The Fund's modest loss was far better than the Lipper Multi-Cap Core Funds Average or the Standard & Poor's 500 Index, primarily due to the Fund's 35% allocation to bonds. In the following report, its investment advisers describe the different factors affecting the Fund's return this reporting period. The recent large swings of stock and bond prices suggest that some people abandoned their investment plans because of market turbulence or economic and geopolitical uncertainty. We recommend that you make any change to your investment strategy in consultation with a financial professional and that you base it on sound financial principles. In March 2003, I was named the President of Strategic Partners Asset Allocation Funds. I strongly believe in the value of these Funds' selection of asset allocations for different risk tolerances. What really sets the Funds apart, however, is the stringent screening process that we use to select and monitor their subadvisers. This assures you that the Funds' managers will adhere to their specific investment disciplines, which is especially important when trying to maintain a consistent strategy in today's turbulent market. We appreciate your continued confidence in us. Sincerely, Judy A. Rice, President Strategic Partners Asset Allocation Funds 2 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Semiannual Report January 31, 2003 INVESTMENT ADVISERS' REPORT A BRIEF UPSWING If the securities markets during the last years of the 20th century were driven largely by dreams of gains, the markets during the six months that ended in January 2003 were driven largely by fears of losses. As the reporting period began, stock markets around the world were in a decline of historic proportion. Investors lost confidence in corporations' financial reporting and in analysts' earnings forecasts. Slower-than-expected economic growth and concern about a possible war in Iraq also suppressed investment in stocks. By October, shares looked inexpensive, given forecasts for 2003 corporate earnings and the low yields on alternative fixed income investments. In addition, positive reports from technology executives fueled hopes that demand might recover, setting the scene for a brief upswing in October and November 2002 largely driven by stocks that were rebounding from steep declines earlier in the year. The rebound of stocks in past economic recoveries has often been swift. Investors, particularly institutional investors, didn't want to be left out if that happened again, and the market rose quickly as they rebuilt their portfolios. Sectors that had become relatively inexpensive in the bear market earlier in the year-- technology, utilities, and producer durables-- had substantial rebounds, while consumer staples, which had not been hurt as much in the falling market, shared only briefly in the rally. Then reports of slow retail sales in December chilled stock investors' enthusiasm again. Over the full reporting period, energy, technology, and healthcare stocks performed best, and consumer staples performed poorly. Although there were marked differences between sector returns, the differences between value and growth stocks and between small and large caps were small relative to the broad market decline. Stock markets in developed countries around the world fared even worse than U.S. stocks. The loss of U.S. confidence discouraged investors nearly everywhere, particularly as none of the largest economies in the world looked strong. The fear of war was another factor affecting foreign markets. 3 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Semiannual Report January 31, 2003 The same uncertainties that drove the changes in stock prices caused bonds to shift direction, albeit not to the same extent. A flight to safety from stocks increased demand for bonds, pushing their prices up. Moreover, in November 2002, the Federal Reserve again eased short-term interest rates, further elevating bond prices. The prices of the safest investments, such as U.S. Treasury bonds, rose early in 2002 and had become quite high by the beginning of our reporting period. During the fourth quarter of 2002, investors renewed their interest in relatively inexpensive corporate bonds, causing a catch-up spurt in their prices compared to Treasuries. The greater volatility of high yield ("junk") bonds worked in their favor over this period. These are bonds of companies that have to pay high interest rates because of concerns about their ability to redeem the bonds at maturity. Investors had been frightened away from them by the two largest bankruptcies ever--Enron Corporation and WorldCom--and several other prominent corporate casualties. As the reporting period progressed, corporate officers made the newly required certifications of their companies' financial statements, and some companies changed auditors and/or announced more conservative accounting practices. These trends, plus continued-- albeit uncertain--economic growth, increased confidence that most of the large negative surprises were behind us. The low prices on junk bonds attracted investors, who bid their prices up. They outperformed the other asset classes in the Fund by a considerable margin. YOUR FUND'S PERFORMANCE Asset allocation was the critical factor in the Fund's return, even more than usual. All of the equity classes lost ground, but both bond classes had large gains. High yield bonds returned almost 12%. With 15% of the Fund's net assets allocated to the asset class, they helped offset the negative impact of the stock allocations even though the Fund's high yield bond holdings trailed the Lehman Brothers U.S. Corporate High Yield Bond Index by a moderate amount. The Fund's investment-grade bonds made an even larger positive contribution. The Fund had a slightly larger allocation to investment-grade bonds than to high yield bonds. Although investment-grade bonds did not perform as well as 4 www.strategicpartners.com (800) 225-1852 Asset Class Index Returns As of 1/31/03 (CHART) The chart above shows returns for the six months ended January 31, 2003, of various securities indexes, which are generally considered representative of the market sectors in which the fund may invest. Source: Prudential Investments LLC, Lipper Inc., and Lehman Brothers. 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 Russell 1000 Value Index comprises those securities in the Russell 1000 Index with a less- than-average growth orientation. Companies in this index generally have low price-to-book and price/earnings ratios, higher dividend yields, and lower forecasted growth values. The Russell 1000 Growth Index comprises those securities in the Russell 1000 Index with a greater- than-average growth orientation. Companies in this index tend to exhibit higher price-to-book and price/earnings ratios, lower dividend yields, and higher forecasted growth rates. The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to- book ratios. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios. The Morgan Stanley Capital International Europe, Australasia, and Far East Index (MSCI EAFE Index) is an unmanaged, weighted index of performance that reflects stock price movements in Europe, Australasia, and the Far East. The Lehman Brothers Aggregate Bond 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 Bond Index gives a broad look at how short- and intermediate- term bonds have performed. The Lehman Brothers U.S. Corporate High Yield 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 Index gives a broad look at how high yield ("junk") bonds have performed. 5 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Semiannual Report January 31, 2003 high yield, the Fund's investment-grade holdings outperformed the Lehman Brothers Aggregate Bond Index, a broad measure of the fixed income market, by a substantial amount. The primary reasons for the strong result were good selection among corporate bonds and exposure to foreign bonds, particularly German government bonds and Brazilian bonds. The portfolio benefited from more exposure to changes in interest rates than the Lehman Brothers Aggregate Bond Index. As interest rates fell, the prices of existing bonds rose, adding a significant capital gain to the portfolio. The adviser managing the Fund's investment-grade bonds magnified the impact by emphasizing intermediate maturity securities, where interest rates fell most. The gains on both bond allocations together almost offset the losses on the Fund's stock allocations. The Fund's largest asset-class allocations are to U.S. large-cap growth and value stocks. The Russell 1000 Value Index held up slightly better than the Russell 1000 Growth Index. This small style advantage was enhanced by a strong relative performance by the Fund's large-cap value holdings, which focused on media firms, including The News Corporation and EchoStar Communications. Stronger-than-expected advertising rates and the prospect of rising advertising volume helped media stocks generally. Moreover, EchoStar announced a surprise repurchase of more than 10% of its outstanding shares from Vivendi Universal. The Fund's value adviser had a substantial emphasis on technology, buying positions in leading firms inexpensively after the prolonged bear market in technology stocks. Positions in Hewlett-Packard, Xerox, BMC Software, and Cisco Systems had large gains during the period. The Fund's large-cap growth holdings trailed the Russell 1000 Growth Index, hurt by weak technology and healthcare selections. The poorest performers in these sectors were the semiconductor firms Texas Instruments and STMicroelectronics in technology and Baxter International in healthcare. The Fund's holdings were also hurt by a sizable commitment to the retail chain Kohl's, whose stock fell sharply because of poor retail sales in the fourth quarter of 2002. The Fund had much smaller allocations to small-cap stocks, which declined somewhat less than stocks of larger companies. In fact, small-cap growth 6 www.strategicpartners.com (800) 225-1852 stocks held up better than all the other equity asset classes in the Fund. Small-cap profitability in the fourth quarter of 2002, particularly earnings of technology companies, improved more than analysts expected. The Fund's small-cap value portfolio performed substantially better than its asset class overall, while the small-cap growth portfolio trailed its market by a much smaller margin. The small-cap value holdings' exceptionally large outperformance was driven by a focus on the healthcare sector. The subadviser responsible for these investments believes that certain stocks in the healthcare industry may benefit from many developed countries' aging populations. A strong selection of healthcare stocks, including Covance and Pharmaceutical Product Development, had gains even in this period's weak markets. Both offer outsourced research services to drug companies and both reported positive financial results. Another top contributor was Pediatrix Medical Group, which manages hospital pediatric units. The Fund changed subadvisers for its small-cap growth stocks during the period. Averaged over the period, the small-cap growth holdings focused on technology and healthcare stocks and underweighted financials. Gains on some technology positions were outweighed by the more mixed performance of its healthcare holdings, but the margin by which the Fund trailed its market had a negligible impact on its overall return. The stocks of other developed countries performed significantly worse than U.S. stocks overall, but the Fund's foreign holdings held up relatively well. That strong performance brought their return in line with that of U.S. large-cap stocks. The Fund had strong international stock selection across sectors, including the generally weak technology sector. Positions in the consumer staples company Unilever and the Dutch telecommunications provider KPN were among the gainers. KPN rose because it aggressively reduced its capital expenditures in order to boost free cash flow and reduce its debt. However, the Spanish utility Endesa was hurt by its substantial investments in Latin America, as well as by regulatory uncertainty in its core Spanish electricity business. Strategic Partners Moderate Growth Fund Management Team 7 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Semiannual Report January 31, 2003 WHAT IS AN ASSET ALLOCATION FUND 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, reducing the impact of any one security on your return. 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 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. Forcing us to sell high 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 (CHART) 9 SEMIANNUAL REPORT JANUARY 31, 2003 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS STRATEGIC PARTNERS MODERATE GROWTH FUND Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited)
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- LONG-TERM INVESTMENTS 90.4% COMMON STOCKS 60.5% - ------------------------------------------------------------------------------------- Aerospace & Defense 1.6% 15,700 Aeroflex, Inc.(a) $ 125,600 9,100 Cubic Corp. 183,092 13,600 General Dynamics Corp. 899,504 12,500 Herley Industries, Inc.(a) 198,125 11,500 Lockheed Martin Corp. 587,075 3,100 Moog, Inc. (Class A Stock)(a) 98,890 16,900 Northrop Grumman Corp. 1,544,829 ---------------- 3,637,115 - ------------------------------------------------------------------------------------- Agriculture 0.2% 23,710 Monsanto Co. 418,482 - ------------------------------------------------------------------------------------- Automobiles 0.8% 9,400 Bayerische Motoren Werke (BMW) AG (Germany) 272,435 15,400 Harley-Davidson, Inc. 643,412 69,000 Nissan Motor Co., Ltd. (Japan) 525,238 9,400 Toyota Motor Corp. (Japan) 223,754 4,100 Winnebago Industries, Inc. 140,999 ---------------- 1,805,838 - ------------------------------------------------------------------------------------- Banks 2.9% 26,200 ABN AMRO Holding NV, ADR (Netherlands) 407,793 26,058 Allied Irish Banks PLC (Ireland) 358,032 9,200 Astoria Financial Corp. 238,740 20,500 Bank of Ireland (Ireland) 207,949 3,000 Bank of Ireland (Ireland) 30,592 19,800 Bank One Corp. 722,898 31,800 Bank United Financial Corp. (Class A)(a) 502,440 91,100 Barclays PLC (United Kingdom) 524,540 12,120 BNP Paribas SA (France) 478,373 4,800 Commerce Bancorp, Inc. 210,672 12,300 Credit Suisse Group (Switzerland)(a) 263,970 3,100 East West Bancorp, Inc. 108,376 4,100 First Community Bancorp/CA 117,547
See Notes to Financial Statements 11 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 4,900 Hibernia Corp. (Class A Stock) $ 91,385 63,400 HSBC Holdings PLC (United Kingdom)(a) 657,659 36,400 Oversea-Chinese Banking Corp., Ltd. (Singapore) 190,455 8,300 R&G Financial Corp. (Class B)(Puerto Rico) 183,347 15,400 Royal Bank of Scotland PLC (United Kingdom) 338,987 19,200 Standard Chartered PLC (United Kingdom) 196,955 10,800 UBS AG (Switzerland)(a) 466,321 29,896 United Overseas Bank, Ltd. (Singapore) 180,490 ---------------- 6,477,521 - ------------------------------------------------------------------------------------- Beverages 1.0% 15,100 Anheuser-Busch Companies, Inc. 716,797 11,100 Coca-Cola Co. 449,106 40,600 Diageo PLC (United Kingdom)(a) 414,476 14,467 Heineken NV (Netherlands) 521,004 ---------------- 2,101,383 - ------------------------------------------------------------------------------------- Biotechnology 1.4% 20,100 Acacia Research - CombiMatrix(a) 60,300 29,000 Amgen, Inc.(a) 1,477,840 4,300 CV Therapeutics, Inc.(a) 72,240 2,000 Digene Corp.(a) 22,920 15,100 Embrex, Inc.(a) 156,119 10,800 Exact Sciences Corp.(a) 96,768 13,600 Genentech, Inc.(a) 499,664 14,000 Medimmune, Inc.(a) 417,060 10,700 Telik, Inc.(a) 120,482 12,400 Versicor Inc.(a) 136,896 ---------------- 3,060,289 - ------------------------------------------------------------------------------------- Building & Construction 0.5% 18,929 CRH PLC, ADR (Ireland) 238,755 22,150 D.R. Horton, Inc. 423,065 18,600 Hovnanian Enterprises, Inc. (Class A)(a) 541,818 ---------------- 1,203,638 - ------------------------------------------------------------------------------------- Building Products 0.1% 12,800 Watsco, Inc. 200,320
12 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Chemicals 0.8% 15,000 Dow Chemical Co. $ 435,900 37,800 IMC Global, Inc. 369,306 32,500 Lyondell Chemical Co. 416,325 6,000 Scotts Co. (Class A Stock)(a) 307,440 5,600 Valspar Corp. 238,000 ---------------- 1,766,971 - ------------------------------------------------------------------------------------- Commercial Services & Supplies 1.3% 62,400 Administaff, Inc.(a) 312,000 32,300 Allied Waste Industries, Inc.(a) 315,894 7,100 Coinstar, Inc.(a) 138,095 10,300 Global Payments, Inc.(a) 293,859 3,300 ICON PLC ADR(a) 92,400 8,500 Kelly Services, Inc. 177,650 13,500 NDCHealth Corp. (Class A Stock) 293,490 23,500 NuCo2 Inc.(a) 116,631 13,100 Republic Services, Inc.(a) 268,288 24,700 Scientific Games Corp. (Class A)(a) 145,730 5,850 UTI Worldwide, Inc. 139,230 24,000 Waste Management, Inc.(a) 551,760 ---------------- 2,845,027 - ------------------------------------------------------------------------------------- Communications Equipment 1.4% 112,000 3Com Corp.(a) 473,760 10,200 Anaren Microwave, Inc.(a) 79,050 93,400 Cisco Systems, Inc.(a) 1,248,758 51,700 Nokia OYJ ADR (Finland) 743,963 37,600 Nokia OYJ (Finland) 527,918 ---------------- 3,073,449 - ------------------------------------------------------------------------------------- Computers & Peripherals 1.5% 37,900 Dell Computer Corp.(a) 904,294 99,194 Hewlett-Packard Co. 1,726,968 8,400 IBM Corp. 657,132 ---------------- 3,288,394
See Notes to Financial Statements 13 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Containers & Packaging 0.2% 11,900 Temple-Inland, Inc. $ 514,318 - ------------------------------------------------------------------------------------- Diversified Financials 4.5% 12,100 A.G. Edwards, Inc. 345,697 2,300 Acom Co., Ltd. (Japan)(a) 70,377 37,300 American Express Co. 1,325,269 33,600 AmeriCredit Corp.(a) 105,504 77,100 Citigroup, Inc. 2,650,698 12,600 Eaton Vance Corp. 349,776 17,200 Fortis NL NV (Netherlands) 270,296 23,100 Goldman Sachs Group, Inc. 1,573,110 9,100 Jefferies Group, Inc. 356,265 21,700 Lehman Brothers Holdings, Inc. 1,183,301 17,900 Merrill Lynch & Co., Inc. 626,858 81,000 Nikko Cordial Corp. (Japan) 291,746 10,500 Principal Financial Group(a) 300,300 11,800 Raymond James Financial, Inc. 300,900 1,000 Saxon Capital, Inc.(a) 12,780 1,900 Student Loan Corp. 181,982 ---------------- 9,944,859 - ------------------------------------------------------------------------------------- Diversified Telecommunication Services 1.9% 34,000 AT&T Corp. 662,320 29,300 BellSouth Corp. 667,454 54,570 BT Group PLC (United Kingdom) 155,645 8,600 Clear Channel Communications, Inc.(a) 344,688 26,900 EchoStar Communications Corp. (Class A)(a) 698,055 87,000 Koninklijke KPN NV (Netherlands)(a) 609,822 47 Nippon Telegraph & Telephone Corp. (Japan) 157,529 812 NTL Inc.(a) 11,344 72,600 Telecom Italia SpA (Italy) 549,410 11,300 Verizon Communications, Inc. 432,564 ---------------- 4,288,831 - ------------------------------------------------------------------------------------- Electric Utilities 0.9% 33,000 CLP Holdings, Ltd. (Hong Kong) 132,848
14 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 25,920 Endesa SA (Spain) $ 310,784 32,300 PG&E Corp.(a) 445,740 10,700 PNM Resources, Inc. 225,877 14,100 Public Service Enterprise Group, Inc. 497,448 25,200 TXU Corp. 462,420 ---------------- 2,075,117 - ------------------------------------------------------------------------------------- Electrical Equipment 0.4% 8,600 C&D Technologies, Inc. 149,210 5,800 ESCO Technologies Inc.(a) 200,680 8,100 Harris Corp. 252,720 15,700 Paxar Corp.(a) 233,930 2,800 Schneider Electric SA (France)(a) 122,207 ---------------- 958,747 - ------------------------------------------------------------------------------------- Electronic Equipment & Instruments 1.5% 4,200 Analogic Corp. 221,592 11,400 Applied Films Corp. 184,680 42,900 California Micro Devices Corp.(a) 175,461 8,500 Electro Scientific Industries, Inc.(a) 153,595 9,500 FLIR Systems, Inc.(a) 443,365 9,100 Harman International Industries, Inc. 559,650 19,500 Ingram Micro, Inc. (Class A Stock)(a) 224,250 10,556 Koninklijke (Royal) Philips Electronics N.V. (Denmark)(a) 179,030 40,300 Sanmina-SCI Corp.(a) 147,498 166,200 Solectron Corp.(a) 596,658 8,900 SONY Corp. (Japan) 349,500 ---------------- 3,235,279 - ------------------------------------------------------------------------------------- Energy Equipment & Services 2.3% 8,600 Cal Dive International, Inc.(a) 183,266 8,000 Dominion Resources, Inc. 433,520 35,600 ENSCO International, Inc. 959,064 11,200 FirstEnergy Corp. 349,440 36,700 GlobalSantaFe Corp. 797,491 24,100 Halliburton Co. 452,116 29,400 Schlumberger Ltd. 1,108,380
See Notes to Financial Statements 15 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 33,800 Superior Energy Services, Inc.(a) $ 268,710 16,700 Weatherford International, Ltd. (Bermuda)(a) 620,572 ---------------- 5,172,559 - ------------------------------------------------------------------------------------- Food & Drug Retailing 0.4% 51,500 Boots Co. PLC (United Kingdom) 442,783 4,700 Carrefour SA (France) 186,668 73,400 Tesco PLC (United Kingdom) 199,699 ---------------- 829,150 - ------------------------------------------------------------------------------------- Food Products 1.2% 56,100 Cadbury Schweppes PLC (United Kingdom) 305,262 36,900 ConAgra Foods, Inc. 905,157 12,700 Kraft Foods, Inc. 404,495 27,700 Sara Lee Corp. 552,338 52,600 Unilever PLC (United Kingdom) 457,429 ---------------- 2,624,681 - ------------------------------------------------------------------------------------- Gas Utilities 0.5% 84,000 Hong Kong & China Gas (Hong Kong) 105,540 15,100 Oneok, Inc. 258,965 18,600 Sempra Energy 448,260 55,500 Snam Rete Gas SpA (Italy) 189,448 ---------------- 1,002,213 - ------------------------------------------------------------------------------------- Health Care Equipment & Supplies 1.1% 30,663 Amersham PLC (United Kingdom) 236,916 29,700 AtheroGenics, Inc.(a) 224,235 15,500 Baxter International, Inc. 436,790 9,300 Closure Medical Corp.(a) 95,325 17,400 Conceptus, Inc. 147,900 11,000 Diagnostic Products Corp. 385,330 28,200 Quinton Cardiology Systems, Inc.(a) 155,100 14,500 The Cooper Cos., Inc. 371,345 69,800 VitalWorks Inc.(a) 270,824 4,100 Zoll Medical Corp.(a) 163,754 ---------------- 2,487,519
16 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Health Care Providers & Services 1.9% 25,000 American Medical Security Group, Inc. $ 346,000 3,700 Centene Corp.(a) 104,340 22,200 Covance, Inc.(a) 598,956 24,500 HCA, Inc. 1,047,130 11,000 Lincare Holdings, Inc.(a) 313,940 12,300 Pediatrix Medical Group, Inc.(a) 452,025 18,900 Pharmaceutical Product Development, Inc.(a) 564,165 13,100 Quintiles Transnational Corp.(a) 166,501 17,500 Serologicals Corp.(a) 191,275 5,300 Service Corp. International(a) 17,543 17,300 Tenet Healthcare Corp.(a) 311,227 ---------------- 4,113,102 - ------------------------------------------------------------------------------------- Hotels, Restaurants & Leisure 1.4% 12,400 Brinker International, Inc.(a) 368,900 5,800 CEC Entertainment, Inc.(a) 164,082 21,400 Marriott International, Inc. (Class A Stock) 667,680 50,000 McDonald's Corp. 712,000 6,100 RARE Hospitality International, Inc.(a) 173,850 12,000 Sonic Corp.(a) 272,880 23,900 Starbucks Corp.(a) 543,008 14,000 WMS Industries, Inc.(a) 162,540 ---------------- 3,064,940 - ------------------------------------------------------------------------------------- Household Products 0.8% 15,000 Kao Corp. (Japan) 305,778 10,000 Kimberly-Clark Corp. 463,200 25,900 Kirkland's, Inc.(a) 300,440 8,100 Procter & Gamble Co. 693,117 ---------------- 1,762,535 - ------------------------------------------------------------------------------------- Industrial Conglomerates 0.8% 9,100 3M Co. 1,133,405 3,800 Siemens AG (Germany) 155,002 12,000 Stake Technology Ltd. (Canada)(a) 36,960 22,900 Tyco International Ltd. (Bermuda) 366,629 ---------------- 1,691,996
See Notes to Financial Statements 17 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Insurance 3.2% 25,320 Alleanza Assicurazionni (Italy) $ 191,340 16,400 Allstate Corp. 577,116 22,512 American International Group, Inc. 1,218,349 9,700 Commerce Group, Inc. 336,590 29,500 Hartford Financial Services Group, Inc. 1,229,560 11,600 Lincoln National Corp. 374,100 10,500 Loews Corp. 462,210 11,600 Philadelphia Consolidated Holding Corp.(a) 386,628 8,200 ProAssurance Corp.(a) 190,486 7,200 Protective Life Corp. 195,336 17,800 Scottish Annuity & Life Holdings, Ltd. (Cayman Islands) 318,620 21,400 XL Capital, Ltd. (Cayman Islands) (Class A Stock) 1,606,284 ---------------- 7,086,619 - ------------------------------------------------------------------------------------- Internet Software & Services 0.5% 17,600 ActivCard SA ADR (France) 134,640 5,100 Digitas Inc.(a) 20,655 1,200 eBay, Inc.(a) 90,192 6,600 FindWhat.com(a) 50,952 51,100 LookSmart Ltd.(a) 155,855 29,900 MatrixOne, Inc.(a) 145,613 33,700 S1 Corp.(a) 166,815 114,900 Tumbleweed Communications Corp.(a) 160,975 12,600 Websense, Inc.(a) 197,946 ---------------- 1,123,643 - ------------------------------------------------------------------------------------- Machinery 0.3% 10,800 Navistar International Corp.(a) 259,956 9,800 Sandvik AB (Sweden) 202,536 4,900 Snap-On, Inc. 124,950 ---------------- 587,442 - ------------------------------------------------------------------------------------- Media 3.1% 25,900 Fox Entertainment Group, Inc. (Class A Stock)(a) 715,617 7,000 Knight-Ridder, Inc. 474,040 8,800 Lagardere SA (France) 358,008
18 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 14,000 Lamar Advertising Co.(a) $ 486,920 51,900 Liberty Media Corp. (Class A Stock)(a) 517,443 16,200 New York Times Co. (Class A Stock) 791,208 9,500 Omnicom Group Inc. 572,850 33,500 Regent Communications, Inc.(a) 201,000 38,100 Sinclair Broadcast Group, Inc. (Class A Stock)(a) 431,292 6,400 Spanish Broadcasting System, Inc. 48,320 25,300 Univision Communications, Inc. (Class A Stock)(a) 666,908 43,630 Viacom, Inc. (Class B Stock)(a) 1,681,937 ---------------- 6,945,543 - ------------------------------------------------------------------------------------- Metals & Mining 0.3% 92,949 BHP Billiton Ltd. (Australia) 486,022 12,300 Freeport-McMoRan Copper & Gold, Inc. (Class B Stock)(a) 230,871 ---------------- 716,893 - ------------------------------------------------------------------------------------- Multiline Retail 1.7% 16,700 Federated Department Stores, Inc.(a) 434,534 17,900 Fred's, Inc. (Class A) 480,812 87,700 Kingfisher PLC (United Kingdom)(a) 277,532 23,800 Kohl's Corp.(a) 1,246,406 26,800 Wal-Mart Stores, Inc. 1,281,040 ---------------- 3,720,324 - ------------------------------------------------------------------------------------- Office Electronics 0.4% 11,000 Canon, Inc. (Japan) 384,275 62,400 Xerox Corp. 552,240 ---------------- 936,515 - ------------------------------------------------------------------------------------- Oil & Gas 3.1% 7,100 Apache Corp. 443,111 14,900 Baker Hughes Inc. 450,874 80,900 BP Amoco PLC (United Kingdom) 508,035 52,900 Eni SpA (Italy) 800,087 49,400 Grey Wolf, Inc.(a) 190,190 24,300 Occidental Petroleum Corp. 709,803 13,000 Royal Dutch Petroleum Co. (Netherlands) 538,225 8,900 Statoil ASA (Norway) 68,532
See Notes to Financial Statements 19 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 11,300 Swift Energy Co.(a) $ 107,350 40,000 Tokyo Gas Co. Ltd. 117,726 10,613 TotalFinaElf, SA (France) 1,430,864 8,985 TotalFinaElf ADR (France) 610,171 11,900 Unit Corp.(a) 212,534 13,300 Westport Resources Corp.(a) 266,532 21,500 XTO Energy, Inc. 523,310 ---------------- 6,977,344 - ------------------------------------------------------------------------------------- Paper & Forest Products 1.3% 20,700 Boise Cascade Corp. 494,937 39,700 International Paper Co. 1,417,290 19,800 Weyerhaeuser Co. 951,390 ---------------- 2,863,617 - ------------------------------------------------------------------------------------- Personal Products 0.3% 9,200 Chattem, Inc. 139,564 14,100 Gillette Co. 421,590 ---------------- 561,154 - ------------------------------------------------------------------------------------- Pharmaceuticals 4.7% 29,700 Abbott Laboratories 1,132,164 8,000 Able Laboratories, Inc. 91,712 4,900 Allergan Inc. 297,283 9,200 Atrix Laboratories, Inc.(a) 104,880 3,600 Barr Laboratories, Inc.(a) 284,580 21,300 Bradley Pharmaceuticals, Inc.(a) 239,625 27,200 Bristol-Myers Squibb Company 641,648 8,300 CollaGenex Pharamaceuticals, Inc. 81,506 8,500 Connetics Corp.(a) 110,415 8,500 Forest Laboratories, Inc.(a) 439,875 44,700 GlaxoSmithKline PLC (United Kingdom)(a) 840,651 22,900 Johnson & Johnson 1,227,669 15,100 KV Pharmaceutical Co.(a) 276,934 15,400 La Jolla Pharmaceutical Co.(a) 122,892 3,800 Merck & Co., Inc. 210,482 13,000 Nastech Pharmaceutical Co., Inc.(a) 126,750 16,100 Novartis AG,(Switzerland) 588,622 11,300 Novo Nordisk A/S (Denmark) 309,073
20 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 4,100 NPS Pharmaceuticals, Inc.(a) $ 91,348 20,525 Pfizer, Inc. 623,139 28,278 Pharmacia Corp. 1,181,172 29,300 POZEN Inc.(a) 124,525 6,500 Teva Pharmaceutical Industries Ltd. ADR 249,600 24,600 Wyeth 960,138 ---------------- 10,356,683 - ------------------------------------------------------------------------------------- Real Estate Investment Trust 0.1% 3,600 Alexandria Real Estate Equities, Inc. 148,860 4,900 SL Green Realty Corp. 148,078 ---------------- 296,938 - ------------------------------------------------------------------------------------- Road & Rail 0.1% 59 East Japan Railway (Japan) 271,044 - ------------------------------------------------------------------------------------- Schools - Day Care 0.1% 9,400 Bright Horizons Family Solutions, Inc.(a) 250,980 - ------------------------------------------------------------------------------------- Semiconductor Equipment & Products 2.5% 501,000 Agere Systems, Inc. (Class B)(a) 871,740 31,100 Applied Materials, Inc.(a) 372,267 11,700 DSP Group, Inc.(a) 193,869 8,700 Exar Corp.(a) 112,665 54,600 Genus, Inc.(a) 153,426 57,400 Intel Corp. (Class A)(a) 898,884 4,600 KLA-Tencor Corp.(a) 150,144 42,800 Kopin Corp.(a) 178,947 68,100 LogicVision, Inc.(a) 131,433 23,800 Monolithic System Technology, Inc.(a) 199,182 20,800 Mykrolis Corp.(a) 151,008 11,600 Novellus Systems, Inc.(a) 341,620 4,700 Power Integrations, Inc.(a) 101,567 23,300 STMicroelectronics NV (Switzerland) 427,788 29,000 Texas Instruments, Inc. 461,100 20,000 Ultratech Stepper, Inc.(a) 235,000 25,400 Xilinx, Inc.(a) 502,666 13,100 Zoran Corp.(a) 142,135 ---------------- 5,625,441
See Notes to Financial Statements 21 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Software 1.8% 7,500 Business Objects SA ADR (France)(a) $ 120,375 9,200 Cerner Corp.(a) 339,195 7,200 Computer Programs and Systems, Inc.(a) 171,137 34,200 Concur Technologies, Inc.(a) 145,350 25,300 Embarcadero Technologies, Inc.(a) 177,100 32,400 Entrust, Inc.(a) 86,476 28,000 Legato Systems, Inc.(a) 140,840 31,700 Microsoft Corp.(a) 1,504,482 33,700 NetScout Systems, Inc.(a) 135,137 28,600 OPNET Technologies, Inc.(a) 234,577 17,000 Per-Se Technologies, Inc.(a) 137,360 9,400 SAP AG 220,900 8,100 Synopsys, Inc.(a) 313,227 22,700 Verity, Inc.(a) 352,077 ---------------- 4,078,233 - ------------------------------------------------------------------------------------- Specialty Retail 2.2% 11,300 Aaron Rents, Inc. (Class B) 219,898 37,100 Ashworth, Inc. 235,214 24,200 Bed, Bath & Beyond, Inc.(a) 811,426 17,500 Circuit City Stores-Circuit City Group 104,825 18,600 Compagnie Financiere Richemont AG (Switzerland) 309,411 20,600 CSK Auto Corp.(a) 204,764 10,400 Guitar Center, Inc.(a) 202,592 8,600 Hot Topic, Inc.(a) 203,820 12,400 Lowe's Companies, Inc. 423,832 12,800 Movie Gallery, Inc.(a) 179,840 7,100 Regis Corp. 191,274 16,400 School Specialty, Inc.(a) 323,080 27,100 Tiffany & Co. 630,075 41,200 ToysRUs, Inc.(a) 372,448 6,100 Urban Outfitters, Inc.(a) 124,928 13,900 Walgreen Co. 403,100 ---------------- 4,940,527
22 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Tobacco 0.7% 16,600 Altadis SA (Class A) (Spain) $ 379,006 11,500 Altria Group Inc. 435,505 28,580 Imperial Tobacco Group PLC (United Kingdom) 436,476 13,600 Loews Corp. - Carolina Group 277,576 ---------------- 1,528,563 - ------------------------------------------------------------------------------------- Wireless Telecommunication Services 0.8% 71,300 American Tower Corp. (Class A)(a) 362,204 95 NTT DoCoMo, Inc. (Japan)(a) 182,966 362,500 Vodafone Group PLC (United Kingdom) 649,556 31,900 Vodafone Group PLC ADR 601,315 ---------------- 1,796,041 ---------------- Total common stocks 134,307,817 ---------------- PREFERRED STOCKS 1.0% - ------------------------------------------------------------------------------------- Automobiles 0.1% 600 Porsche AG (Germany) 238,944 - ------------------------------------------------------------------------------------- Cable 0.5% 5,500 CSC Holdings, Inc., Ser. M, 11.125% 532,125 5,330 CSC Holdings, Inc., Ser. H, 11.75% 521,008 ---------------- 1,053,133 - ------------------------------------------------------------------------------------- Media 0.4% 39,100 The News Corp., Ltd. ADR 869,193 - ------------------------------------------------------------------------------------- Publishing 1,000 Primedia, Inc., Ser. D, 10.00% 77,250 - ------------------------------------------------------------------------------------- Telecommunication Services 687 McLeodUSA, Inc., Ser. A, 2.50% 2,253 ---------------- Total preferred stocks 2,240,773 ---------------- WARRANTS(a) 1,525 McLeodUSA, Inc. 358 47,555 Netia Holdings SA 37,307 ---------------- Total warrants 37,665 ----------------
See Notes to Financial Statements 23 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- CORPORATE BONDS 16.4% - ------------------------------------------------------------------------------------- Aerospace & Defense 0.2% B2 $ 35 Alliant Techsystems, Inc., Sr. Sub. Notes, 8.50%, 5/15/11 $ 37,625 K&F Industries, Sr. Sub. Notes, B2 100 9.25%, 10/15/07 104,000 B3 100 9.625%, 12/15/10 104,500 Ba3 105 PanAmSat Corp., Notes, 8.50%, 2/1/12 101,850 ---------------- 347,975 - ------------------------------------------------------------------------------------- Agricultural Products 0.1% IMC Global, Inc., Notes, Ba2 65 11.25%, 6/1/11 69,550 Ba2 40 10.875%, 6/1/08 43,000 ---------------- 112,550 - ------------------------------------------------------------------------------------- Airlines 0.2% AMR Corp., Debs., Caa2(g) 50 10.00%, 4/15/21 13,500 MTN, NR(g) 100 10.55%, 3/12/21 27,592 Continental Airlines, Inc., Pass Through Trust, Ser. 1996-C Certificates, B3 30 8.00%, 12/15/05 16,200 Ba2 69 9.50%, 10/15/13 36,594 Delta Air Lines, Inc., Notes, Ba3 175 7.70%, 12/15/05 127,750 Sr. Notes, Ba3 230 8.30%, 12/15/29 131,100
24 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- B2 $ 100 Northwest Airlines, Inc., Sr. Notes, 8.875%, 6/1/06 $ 62,500 ---------------- 415,236 - ------------------------------------------------------------------------------------- Auto & Truck 0.4% Baa3 200 ArvinMeritor, Inc., Notes, 8.75%, 3/1/12 212,000 Ba2 25 Autonation, Inc., Sr. Notes, 9.00%, 8/1/08 26,000 Caa1 50 Eagle-Picher, Inc., Gtd. Notes, 9.375%, 3/1/08 37,000 Baa1 150 Ford Motor Co., Notes, 7.45%, 7/16/31 126,932 Ba1 200 Lear Corp., Gtd. Notes, Ser. B, 7.96%, 5/15/05 210,500 Navistar International Corp., Sr. Notes, Ba1 100 7.00%, 2/1/03 100,000 Ba1 50 9.375%, 6/1/06 49,125 B3 125 Rexnord Corp., Sr. Sub. Notes, 10.125%, 12/15/12 129,375 ---------------- 890,932 - ------------------------------------------------------------------------------------- Banking 0.2% Ba3 100 Chevy Chase Savings Bank, Sr. Sub. Debs., 9.25%, 12/1/05 100,375 Sovereign Bancorp, Inc., Sr. Notes, Ba2 110 10.25%, 5/15/04 116,600 Ba2 90 10.50%, 11/15/06 101,250 B1 55 Western Financial Svgs. Bank, Sub. Debs., 8.875%, 8/1/07 53,969 ---------------- 372,194
See Notes to Financial Statements 25 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Building & Construction 0.2% Ba2 $ 45 Beazer Homes USA, Inc., Sr. Notes, 8.375%, 4/15/12 $ 46,800 Ba1 215 D.R. Horton, Inc., Sr. Notes, 7.875%, 8/15/11 215,000 Ba3 95 KB Home, Sr. Sub. Notes, 8.625%, 12/15/08 99,275 Ba3 125 Nortek Holdings Inc., Sr. Notes, 9.25%, 3/15/07 127,031 ---------------- 488,106 - ------------------------------------------------------------------------------------- Cable 0.3% NR 50 Callahan Nordrhein Nestfalen KG (Germany), Sr. Disc. Notes, 16.00%, 7/15/10 1,500 Charter Communications Holdings, Sr. Disc. Notes, Zero Coupon, (until 5/15/06), Ca(g) 445 11.75%, 5/15/11 146,850 Sr. Notes, Ca(g) 425 10.00%, 5/15/11 206,125 B2 250 Mediacom LLC Capital Corp., Sr. Notes, 7.875%, 2/15/11 222,500 B3 175 Paxson Communications Corp., Sr. Sub. Notes, 10.75%, 7/15/08 175,000 United Pan Europe Communications, Sr. Disc. Notes, Zero Coupon (until 8/1/04), Ca 100 8/1/09 6,000 Ca 50 2/1/10 2,688 ---------------- 760,663 - ------------------------------------------------------------------------------------- Casinos 1.1% B1 80 Boyd Gaming Corp., Sr. Sub. Notes, 8.75%, 4/15/12 83,600
26 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- B3 $ 75 Coast Hotels & Casinos, Inc., Sr. Sub. Notes, 9.50%, 4/1/09 $ 78,750 B3 60 Hollywood Casino Corp., Gtd. Notes, 11.25%, 5/1/07 64,350 B2 70 Hollywood Park, Inc., Sr. Sub. Notes, Ser. B, 9.25%, 2/15/07 62,300 B2 65 Horseshoe Gaming LLC, Sr. Sub. Notes, 8.625%, 5/15/09 68,575 Baa3 35 International Game Technology, Sr. Notes, 7.875%, 5/15/04 36,925 Mandalay Resort Group, Debs. Notes, Ba2 100 6.70%, 11/15/2096 100,404 Sr. Sub. Debs., Ba3 80 7.625%, 7/15/13 77,600 Sr. Sub. Notes, Ba3 105 9.375%, 2/15/10 111,563 MGM Mirage, Inc., Gtd. Notes, Ba2 475 9.75%, 6/1/07 517,156 Sr. Sub. Notes, Ba2 20 8.375%, 2/1/11 21,300 Ba3 35 Mohegan Tribal Gaming Authority, Sr. Sub. Notes, 8.00%, 4/1/12 35,963 Park Place Entertainment Corp., Sr. Notes, Baa3 300 7.50%, 9/1/09 306,000 Sr. Sub. Notes, Ba2 30 9.375%, 2/15/07 31,875 B2 200 Station Casinos, Inc., Sr. Sub. Notes, 9.875%, 7/1/10 214,000
See Notes to Financial Statements 27 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Caa1 $ 420 Venetian Casino Resort LLC, 2nd Mtge., 11.00%, 6/15/10 $ 435,750 B3 175 Wynn Las Vegas LLC, 12.00%, 11/1/10 177,625 ---------------- 2,423,736 - ------------------------------------------------------------------------------------- Chemicals 0.5% B2 50 Avecia Group PLC (United Kingdom), Sr. Notes, 11.00%, 7/1/09 41,500 Baa3 175 Ferro Corp., Sr. Notes, 9.125%, 1/1/09 190,641 Caa1 230 Huntsman International LLC, Gtd. Notes, 10.125%, 7/1/09 190,900 B2 160 ISP Chemco, Inc., Sr. Sub. Notes, Ser. B, 10.25%, 7/1/11 168,800 Lyondell Chemical Co., Sr. Sec. Notes, Ba3 90 9.50%, 12/15/08 81,000 Sr. Sub. Notes, Ba3 100 9.875%, 5/1/07 93,500 B2 160 10.875%, 5/1/09 135,200 Caa2 115 OM Group, Inc., Sr. Sub. Notes, 9.25%, 12/15/11 75,900 Ba2 80 USEC, Inc., Sr. Notes, 6.75%, 1/20/09 64,690 ---------------- 1,042,131 - ------------------------------------------------------------------------------------- Commercial Services 0.1% B2 85 Iron Mountain, Inc., Sr. Sub. Notes, 8.625%, 4/1/13 89,888 B2 200 United Rentals, Inc., Gtd. Notes, 9.50%, 6/1/08 166,000 ---------------- 255,888
28 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Computer Services 0.1% Unisys Corp., Sr. Notes, Ba1 $ 100 7.25%, 1/15/05 $ 101,750 Ba1 120 8.125%, 6/1/06 124,800 ---------------- 226,550 - ------------------------------------------------------------------------------------- Consumer Services 0.2% B1 150 Alliance Atlantis Commerce, Inc., Sr. Sub. Notes, 13.00%, 12/15/09 165,000 NR 150 KinderCare Learning Center, Inc., Sr. Sub. Notes, 9.50%, 2/15/09 148,687 B1 250 Service Corp. International, Sr. Notes, 6.50%, 3/15/08 231,250 ---------------- 544,937 - ------------------------------------------------------------------------------------- Diversified Manufacturing Operations 0.4% B1 123 American Axle & Manufacturing, Inc., Sr. Sub. Notes, 9.75%, 3/1/09 132,379 Baa1 300 Cox Enterprises, Inc., Sr. Notes, 2.7225%, 5/1/33 298,835 NR(h) 150 Gentek, Inc., Gtd. Notes, 11.00%, 8/1/09 7,500 Terex Corp., Gtd. Notes, B2 50 8.875%, 4/1/08 46,000 Sr. Sub. Notes, B2 40 9.25%, 7/15/11 36,800 B2 170 10.375%, 4/1/11 162,775 Tyco Int'l Group, Notes, Baa1 100 6.375%, 10/15/11 93,000 B3 35 U.S. Can Corp., Sr. Sub. Notes, 12.375%, 10/1/10 20,300 ---------------- 797,589
See Notes to Financial Statements 29 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Diversified Operations 0.1% Ba2 $ 250 Stena AB (Sweden), Sr. Notes, 8.75%, 6/15/07 $ 252,500 - ------------------------------------------------------------------------------------- Electronic Components 0.3% BA1 150 AES Corp., Sr. Notes, 9.375%, 9/15/10 102,750 Ba2 190 Flextronics International, Ltd. (Singapore), Sr. Notes, 9.875%, 7/1/10 204,250 B3 20 Illinova Corp., 11.50%, 12/15/10 19,800 Ba3 150 L-3 Communications Corp., Sr. Sub. Notes, 7.625%, 6/15/12 156,750 Baa3 20 Mirant Mid-Atlantic LLC, Pass thru Certs., 8.625%, 6/30/12 17,227 B3 150 Motors & Gears, Inc., Sr. Notes, 10.75%, 11/15/06 130,500 Ba2 100 Sanmina-SCI Corp., Sec'd Notes, 10.375%, 1/15/10 104,000 ---------------- 735,277 - ------------------------------------------------------------------------------------- Energy 0.5% Ba1 125 AES Eastern Energy, Pass thru Certs., 9.00%, 1/2/17 114,288 Cogentrix Energy, Inc., Sr. Notes, Ba1 35 8.10%, 3/15/04 26,250 Baa3 95 8.75%, 10/15/08 62,700 El Paso Corp., Bond, Ba1 50 7.125%, 5/6/09 38,455 Sr. Notes, Baa2 410 7.00%, 5/15/11 315,700 Caa1 180 7.75%, 1/15/32 122,400
30 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Caa1 $ 250 El Paso Energy Corp., MTN, Tranche Trust 00005, 7.80%, 8/1/31 $ 170,000 B1 40 El Paso Energy Partners, Sr. Sub. Notes, 8.50%, 6/1/11 39,200 Ba2 25 Plains All American Pipeline LP, Gtd. Notes, 7.75%, 10/15/12 26,250 Tennessee Gas Pipeline, Debs., Ba1 185 7.00%, 3/15/27 172,050 Ba1 155 7.625%, 4/1/37 130,200 ---------------- 1,217,493 - ------------------------------------------------------------------------------------- Engineering & Construction B2 50 CSC Holdings, Inc., Sr. Sub. Debs., 10.50%, 5/15/16 51,500 - ------------------------------------------------------------------------------------- Financial Services 1.5% B3 117 Actuant Corp., Sr. Sub. Notes, 13.00%, 5/1/09 136,890 Caa2 75 AES Drax Holdings, Ltd., Sr. Sec. Bonds, 10.41%, 12/31/20 42,000 NR 90 Finova Group, Inc., Sr. Sec'd Notes, 7.50%, 11/15/09 32,625 A3 500 Ford Motor Credit Co., Notes, 7.25%, 10/25/11 476,188 General Motors Acceptance Corp., A2 500 2.6125%, 5/4/04 496,496 MTN, A2 400 2.11%, 4/5/04 394,942 Notes, A2 500 6.875%, 9/15/11 486,907 Ba3 285 Midland Funding Corp., Debs., 13.25%, 7/23/06 304,950
See Notes to Financial Statements 31 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Ba3 $ 125 Midland Funding II, Sec. Deb. Notes, Ser. A, 11.75%, 7/23/05 $ 131,250 B3 210 Orion Power Holdings, Inc., Sr. Notes, 12.00%, 5/1/10 189,000 Qwest Capital Funding, Inc., Gtd. Notes, Caa2 300 7.00%, 8/3/09 219,750 Caa2 100 7.25%, 2/15/11 72,750 Caa2 150 7.90%, 8/15/10 111,375 B2 100 R.H. Donnelley Financial Corp., Sr. Sub. Notes, 10.875%, 12/15/12 110,000 B2 70 UCAR Finance, Inc., Gtd. Notes, 10.25%, 2/15/12 56,000 ---------------- 3,261,123 - ------------------------------------------------------------------------------------- Food & Beverage 0.3% B3 70 Agrilink Foods, Inc., Sr. Sub. Notes, 11.875%, 11/1/08 75,600 B2 175 Del Monte Corp., Sr. Sub. Notes, 8.625%, 12/15/12 181,125 Baa3 140 Delhaize America Inc., Gtd. Notes, 8.125%, 4/15/11 136,150 B2 105 Great Atlantic & Pacific Tea Co., Inc., Notes, 7.75%, 4/15/07 77,962 Ba2 135 Smithfield Foods, Inc., Sr. Notes, 8.00%, 10/15/09 133,988 Ba2 40 Winn Dixie Stores, Inc., Sr. Notes, 8.875%, 4/1/08 42,300 ---------------- 647,125 - ------------------------------------------------------------------------------------- Health Care 1.0% B2 75 Alaris Medical Systems, Inc., Sr. Sec. Notes, Ser. B, 11.625%, 12/1/06 85,313
32 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Caa2 $ 105 Alaris Medical, Inc., Sr. Disc. Notes, Zero Coupon, (until 8/1/03), 11.125%, 8/1/08 $ 103,425 B3 190 Concentra Operating Corp., Sr. Sub. Notes, Ser. B, 13.00%, 8/15/09 194,750 HCA, Inc., Ba1 55 9.00%, 12/15/14 67,114 Deb., Ba1 100 7.50%, 12/15/23 103,201 Ba1 50 8.36%, 4/15/24 55,954 Notes, Ba1 200 6.73%, 7/15/45 202,191 Ba1 400 7.125%, 6/1/06 427,127 Healthsouth Corp., Sr. Notes, Caa2(g) 50 6.875%, 6/15/05 45,500 Sr. Sub. Notes, C(g) 300 10.75%, 10/1/08 264,000 B2 70 Resources Care, Inc., Sr. Notes, 10.625%, 11/15/08 52,500 B2 225 Rotech Healthcare, Inc., Sr. Sub. Notes, 9.50%, 4/1/12 225,000 B3 75 Select Medical Corp., Sr. Sub. Notes, 9.50%, 6/15/09 79,125 Triad Hospitals, Inc., Gtd. Notes, B1 240 8.75%, 5/1/09 255,600 Sr. Sub. Notes, B2 90 11.00%, 5/15/09 98,325 ---------------- 2,259,125 - ------------------------------------------------------------------------------------- Hotels & Leisure 0.9% B2 35 Argosy Gaming, Sr. Notes, 9.00%, 9/1/11 36,750 B3 115 Carrols Corp., Sr. Sub. Notes, 9.50%, 12/1/08 103,500
See Notes to Financial Statements 33 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- B2 $ 110 Extended Stay America, Inc., Sr. Sub. Notes, 9.875%, 6/15/11 $ 109,725 Ba3 250 Felcor Suites L.P., Gtd. Sr. Notes, 7.375%, 10/1/04 250,937 Ba2 300 HMH Properties, Inc., Gtd. Notes, Ser. B, 7.875%, 8/1/08 280,500 Ba1 50 Hilton Hotels Corp., Notes, 7.625%, 12/1/12 49,432 Ba3 200 Host Marriott L.P., Sr. Notes, Ser. H, 9.50%, 1/15/07 198,000 ITT Corp., Notes, Ba1 125 6.75%, 11/15/05 125,781 B1 85 Prime Hospitality Corp., Sr. Sub. Notes, 8.375%, 5/1/12 79,050 B3 200 Regal Cinemas Corp., Sr. Sub. Notes, 9.375%, 2/1/12 210,500 Royal Caribbean Cruises Ltd., Notes, Ba2 50 8.125%, 7/28/04 50,125 Sr. Notes, Ba2 10 8.75%, 2/2/11 9,200 Starwood Hotels & Resorts Worldwide, Inc., Debs., Ba1 120 7.375%, 11/15/15 110,400 Deb. Notes, Ba1 130 7.375%, 5/1/07 129,675 Notes, Ba1 70 7.875%, 5/1/12 69,125 B2 255 Sun International Hotels Ltd., Sr. Sub. Notes, 8.875%, 8/15/11 262,650 ---------------- 2,075,350
34 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Machinery 0.2% B2 $ 175 Joy Global, Inc., Gtd. Notes, 8.75%, 3/15/12 $ 183,750 B2 200 Manitowoc Co. Inc., Sr. Sub. Notes, 10.50%, 8/1/12 210,000 Ba3 25 PerkinElmer, Inc., Sr. Sub. Notes, 8.875%, 1/15/13 24,375 ---------------- 418,125 - ------------------------------------------------------------------------------------- Manufacturing Ba3 50 Dimon, Inc., Sr. Notes, 9.625%, 10/15/11 53,500 B2 30 Sun World International, Inc., First Mtge., Ser. B, 11.25%, 4/15/04 18,000 ---------------- 71,500 - ------------------------------------------------------------------------------------- Media 0.4% B2 100 Canwest Media, Inc., Sr. Sub. Notes, 10.625%, 5/15/11 108,750 Ba3 200 Entercom Radio LLC, Gtd. Notes, 7.625%, 3/1/14 210,000 B3 75 Gray Television Inc., Gtd. Notes, 9.25%, 12/15/11 80,250 Lin Holdings Corp., Sr. Disc. Notes, Zero Coupon (until 3/1/03), Caa1 175 10.00%, 3/1/08 178,500 Sr. Disc. Notes, Zero Coupon, (until 3/1/03), Caa1 75 10.00%, 3/1/08 78,187 B2 175 Sinclair Broadcast Group, Inc., Sr. Sub. Notes, 8.00%, 3/15/12 180,250 ---------------- 835,937
See Notes to Financial Statements 35 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Medical Products & Services 0.4% Ba3 $ 350 Coventry Health Care, Inc., Sr. Notes, 8.125%, 2/15/12 $ 367,937 B2 75 Fresenius Medical Capital Trust III., Gtd. Notes, 7.875%, 2/1/08 74,625 Ba2 150 Fresenius Medical Capital Trust IV., Gtd. Notes, 7.875%, 6/15/11 147,750 Hanger Orthopedic Group, Sr. Sub. Notes, B3 15 11.25%, 6/15/09 15,750 Sr. Notes, B2 125 10.375%, 2/15/09 131,875 Caa2 110 Magellan Health Services, Sr. Notes, 9.375%, 11/15/07 88,000 Caa2 100 Medquest Inc., Sr. Sub. Notes, 11.875%, 8/15/12 95,500 ---------------- 921,437 - ------------------------------------------------------------------------------------- Mining 0.1% Ba2 220 Normandy Yandal Operations, Ltd., Sr. Notes, 8.875%, 4/1/08 218,900 - ------------------------------------------------------------------------------------- Office Equipment & Supplies 0.1% A2 100 Xerox Capital Europe PLC, Gtd. Notes, 5.875%, 5/15/04 98,500 B1 150 Xerox Corp., Notes, 5.50%, 11/15/03 148,500 ---------------- 247,000 - ------------------------------------------------------------------------------------- Oil & Gas 1.2% Ba3 75 AmeriGas Partners, L.P., Sr. Notes, 8.875%, 5/20/11 80,250 B1 60 Eott Energy Partners, Sr. Notes, 11.00%, 10/1/09 29,400
36 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- B2 $ 50 Ferrellgas Partners L.P., Sr. Notes, 8.75%, 6/15/12 $ 52,000 Ba3 200 Forest Oil Corp., Sr. Notes, 8.00%, 6/15/08 209,000 Hanover Equipment Test, Sr. Sec. Notes, B1 250 8.50%, 9/1/08 236,250 Ba3 65 8.75%, 9/1/11 60,937 B2 20 Houston Exploration Co., Sr. Sub. Notes, 8.625%, 1/1/08 20,650 B2 85 Magnum Hunter Resources Inc., Gtd. Notes, 9.6%, 3/15/12 90,950 Ba2 200 Parker & Parsley Petroleum Co., Sr. Notes, 8.25%, 8/15/07 216,162 B1 55 Parker Drilling Co., Sr. Notes, 9.75%, 11/15/06 55,825 Baa1 250 Pemex Master Trust, 7.375%, 12/15/14 251,563 Ba3 125 Premcor Refining Group, Sr. Notes, 9.50%, 2/1/13 125,938 B2 215 Stone Energy Corp., Sr. Sub. Notes, 8.25%, 12/15/11 223,063 B1 245 Vintage Petroleum, Inc., Sr. Sub. Notes, 9.75%, 6/30/09 257,250 Ba3 150 Westport Resources Corp., Sr. Sub. Notes, 8.25%, 11/1/11 158,250 Williams Cos., Inc., Debs., Ser. A, Caa1 250 7.50%, 1/15/31 173,750 Notes, Caa1 350 7.125%, 9/1/11 266,000 Caa1 125 8.125%, 3/15/12 98,125 ---------------- 2,605,363
See Notes to Financial Statements 37 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Paper & Packaging 0.8% B2 $ 75 Anchor Glass Container Corp., Sec'd. Notes, 11.00%, 2/15/13 $ 75,000 B3 100 Berry Plastics, Gtd. Notes, 10.75%, 7/15/12 106,000 B3 150 BWAY Corp., Sr. Sub. Notes, 10.00%, 10/15/10 157,500 Ba1 60 Caraustar Industries, Inc., Sr. Sub. Notes, 9.875%, 4/1/11 61,800 Ba1 100 Cascades Inc., Sr. Notes, 7.25%, 2/15/13 100,000 Ca 55 Doman Industries, Ltd. (Canada), Sr. Notes, 9.25%, 11/15/07 7,700 Georgia Pacific Corp., Notes, Ba1 50 8.125%, 5/15/11 45,500 Sr. Notes, Ba2 180 9.375%, 2/1/13 180,000 B2 290 Graham Packaging, Sr. Disc. Notes, 10.75%, 1/15/09 281,300 B2 40 Owens-Brockway Glass, Sec'd Notes, 8.75%, 11/15/12 40,600 B2 65 Radnor Holdings Inc., Sr. Notes, 10.00%, 12/1/03 56,713 B3 40 Riverwood International Corp., Sr. Notes, 10.625%, 8/1/07 41,200 B1 200 Silgan Holdings, Inc., Sr. Sub. Debs., 9.00%, 6/1/09 207,000 B2 50 Smurfit-Stone Container, Gtd. Notes, 8.25%, 10/1/12 51,375 Stone Container Corp., Sr. Notes, B2 175 8.375%, 7/1/12 181,125 B2 230 11.50%, 8/15/06 243,800 ---------------- 1,836,613
38 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Printing & Publishing 0.5% B2 $ 50 American Media Operations, Inc., Sr. Sub. Notes, 10.25%, 5/1/09 $ 53,500 B3 275 Dex Media East LLC, Sr. Sub. Notes, 12.125%, 11/15/12 303,187 Houghton Mifflin Co., Sr. Notes, B2 125 8.25%, 2/1/11 127,812 B3 100 9.875%, 2/1/13 104,000 Quebecor Media, Inc., Sr. Disc. Notes, Zero Coupon, (until 7/15/06), B2 150 13.75%, 7/15/11 99,750 Sr. Notes, B2 50 11.125%, 7/15/11 52,000 Sun Media Corp., Sr. Notes, Ba3 175 7.625%, 2/15/13 177,188 B2 125 Vertis Inc., Sr. Notes, 10.875%, 6/15/09 128,750 ---------------- 1,046,187 - ------------------------------------------------------------------------------------- Real Estate Investment Trust 0.2% B1 205 Intrawest Corp., Sr. Notes, 10.50%, 2/1/10 214,225 Ba2 175 Senior Housing Properties Trust, Sr. Notes, 8.625%, 1/15/12 174,125 Ventas Realty L.P., Gtd. Notes, Ba3 55 8.75%, 5/1/09 58,025 Sr. Notes, Ba3 45 9.00%, 5/1/12 47,925 ---------------- 494,300
See Notes to Financial Statements 39 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Restaurants 0.2% Ba1 $ 350 Yum! Brands, Inc., Sr. Notes, 8.875%, 4/15/11 $ 383,250 - ------------------------------------------------------------------------------------- Retail 0.2% Ba3 30 Dillards, Inc., 6.43%, 8/1/04 30,000 A3 110 JC Penney Co., Inc., Debs., 7.40%, 4/1/37 112,475 Rite Aid Corp., Debs., Caa3 25 6.875%, 8/15/13 17,625 Caa3 25 6.875%, 12/15/28 16,125 Caa3 10 7.70%, 2/15/27 6,850 Notes, Caa3 75 6.00%, 12/15/05 63,375 Baa3 235 Saks, Inc., Notes, 7.375%, 2/15/19 193,875 ---------------- 440,325 - ------------------------------------------------------------------------------------- Semiconductors 0.1% B1 100 Amkor Tech, Inc., Debs., 9.25%, 2/15/08 93,500 Fairchild Semiconductor Corp., Gtd. Notes, B2 100 10.375%, 10/1/07 105,750 B3 60 ON Semiconductor Corp., Gtd. Notes, 12.00%, 5/15/08 48,975 ---------------- 248,225 - ------------------------------------------------------------------------------------- Steel & Metals 0.3% B1 255 AK Steel Corp., Sr. Notes, 7.75%, 6/15/12 243,525 Ba3 135 Century Aluminum Co., Sr. Sec. First Mtge., 11.75%, 4/15/08 130,275
40 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- B2 $ 150 Greif Bros. Corp., Sr. Sub. Notes, Cl. A, 8.875%, 8/1/12 $ 158,250 B2 25 Leviathan Corp., Sr. Sub. Notes, 10.375%, 6/1/09 25,625 Ba3 45 United States Steel LLC, Sr. Notes, 10.75%, 8/1/08 44,550 ---------------- 602,225 - ------------------------------------------------------------------------------------- Telecommunications 2.0% Baa2 53 AT&T Broadband Corp., Gtd. Notes, 8.375%, 3/15/13 60,665 Baa2 300 AT&T Corp., Sr. Notes, 8.00%, 11/15/31 316,727 B3 100 Coaxial Communications, Inc., Gtd. Notes, 10.00%, 8/15/06 92,625 B3 100 Crown Castle International Corp., Sr. Notes, 10.75%, 8/1/11 85,500 B3 20 Dobson Communications Corp., Sr. Notes, 10.875%, 7/1/10 18,200 Echostar DBS Corp., Sr. Notes, B1 500 9.125%, 1/15/09 527,500 B1 125 9.25%, 2/1/06 130,781 B1 75 9.375%, 2/1/09 78,750 Caa1 95 FairPoint Communications, Inc., Sr. Sub. Notes, 12.50%, 5/1/10 80,750 Baa3 250 France Telecom SA (France), Notes, 8.25%, 3/1/11 286,745 Caa1 150 International Wire Group, Inc., Sr. Sub. Notes, 11.75%, 6/1/05 103,500 Caa1 70 Lucent Technologies, Notes, 5.50%, 11/15/08 45,500
See Notes to Financial Statements 41 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Ca $ 7 Netia Holdings, 10.00%, 12/20/08 $ 7,138 Nextel Communications, Inc., Sr. Disc. Notes, Zero Coupon, (until 9/15/02), B1 395 10.65%, 9/15/07 395,000 Sr. Notes,, B1 15 9.375%, 11/15/09 14,438 A2 200 Nortel Networks, Ltd., 6.125%, 2/15/06 171,000 A2 55 Qwest Corp., Notes, 7.20%, 11/1/04 54,038 A2 236 Qwest Services Corp., Notes, 13.50%, 12/15/10 248,980 Ba3 65 Rogers Wireless, Inc., Sr. Sec. Notes, 9.625%, 5/1/11 63,212 Sprint Capital Corp., Gtd. Notes, Baa3 150 5.70%, 11/15/03 150,000 Notes, Baa3 625 8.375%, 3/15/12 596,875 B3 125 Star Choice Communications, Sr. Sec'd. Notes, 13.00%, 12/15/05 118,750 Ba1 250 Telus Corp., Notes, 8.00%, 6/1/11 245,000 Tritel PCS, Inc., Gtd. Notes, Zero Coupon, (until 5/1/04), Baa3 122 12.75%, 5/15/09 116,510 Sr. Sub. Notes, Baa3 148 10.375%, 1/15/11 164,280 A2 115 Verizon Wireless Capital, Notes, 5.375%, 12/15/06 120,784
42 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Baa2 $ 156 Voicestream Wireless Corp., Sr. Disc. Notes, Zero Coupon, (until 11/15/04), 11.875%, 11/15/09 $ 141,960 ---------------- 4,435,208 - ------------------------------------------------------------------------------------- Utilities 0.6% Calpine Corp., Sr. Notes, Ba1 170 8.50%, 2/15/11 78,200 B1 150 8.75%, 7/15/07 70,500 B1 220 10.50%, 5/15/06 114,400 Mirant Americas Generation LLC, Ba3 30 7.20%, 10/1/08 18,000 Ba3 100 7.625%, 5/1/06 63,000 Ba3 200 8.30%, 5/1/11 120,000 D(f)(g) 400 Pacific Gas & Electric Co., 7.583%, 10/31/49(a)(b) 388,000 B3 100 Reliant Mid-Atlantic Power, Ser. C Pass-through Certs., 9.681%, 7/2/26 77,000 Ba3 175 Tnp Enterprises, Inc., Sr. Sub. Notes, 10.25%, 4/1/10 173,250 Western Resources, Inc., First Mtge., Ba1 195 7.875%, 5/1/07 199,875 Notes, Ba2 35 6.25%, 8/15/03 34,300 ---------------- 1,336,525 - ------------------------------------------------------------------------------------- Waste Management 0.5% Allied Waste North America, Inc., Sr. Notes, Ba2 75 7.375%, 1/1/04 75,750 Ba3 250 7.875%, 1/1/09 246,875 Ba3 465 8.50%, 12/1/08 471,975
See Notes to Financial Statements 43 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Baa3 $ 375 Waste Management Inc., Sr. Notes, 7.00%, 10/1/04 $ 391,533 ---------------- 1,186,133 ---------------- Total corporate bonds 36,505,233 ---------------- CONVERTIBLE BONDS 0.4% - ------------------------------------------------------------------------------------- Diversified Manufacturing Operations 0.1% Tyco Int'l Group, Ba2 75 2.75%, 1/15/18 75,000 Ba2 50 3.125%, 1/15/23 50,062 ---------------- 125,062 - ------------------------------------------------------------------------------------- Electronic Components Ba3 190 Solectron Corp., Zero Coupon, 11/20/20 99,038 - ------------------------------------------------------------------------------------- Financial Services 0.3% A1 500 Hellenic Finance, Notes, 2.00%, 7/15/03 558,138 - ------------------------------------------------------------------------------------- Telecommunications Nortel Networks, Ltd., Gtd. Sr. Notes, Baa 20 4.25%, 9/1/08 13,450 ---------------- Total convertible bonds 795,688 ---------------- SOVEREIGN BONDS 2.3% Brazilian Government Bonds, B2 308 8.00%, 4/15/14 211,187 B1 350 11.00%, 1/11/12 245,875 German Government Bonds, Aaa 1,900 5.25%, 7/4/10 2,229,991 Aaa 1,050 5.375%, 1/4/10 1,240,929 Mexican Government Bonds, Baa2 250 6.25%, 12/31/19 247,500 Baa2 500 6.375%, 1/16/13 488,500 Panamanian Government Bonds, Ba1 400 9.625%, 2/8/11 437,000 ---------------- Total sovereign bonds 5,100,982 ----------------
44 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS 3.5% Aaa $ 682 Banktrust Mortgage Trust, Ser. 1, Class G, 5.70%, 12/1/23 $ 676,071 Aaa 259 Bear Stearns Mortgage Secs., Inc., Ser. 97-7, Class 1, 7.00%, 2/25/28 262,450 Aaa 621 Brazos Student Finance Corp., Student Loan Assoc. Bkd. Notes, 2.67%, 6/1/23 626,444 Aaa 54 Capital Asset Research Funding L.P., Ser. 97-A, Class I, 6.40%, 12/15/04 54,940 NR 58 Credit Asset Receivable LLC, 6.274%, 10/31/03 58,411 Aaa 298 Credit Suisse First Boston Mortgage, Washington Mutual Mtge 1999, Class M1, 6.583%, 10/19/39 301,528 Aaa 3 FDIC Remic Trust, 1996 Class Commercial Mtge., Passthru Certificates, 6.75%, 5/25/26 2,743 Federal Home Loan Mortgage Corp., Ser. 119, Class H, Aaa 236 7.50%, 1/15/21 236,216 Ser. 2266, Class F, Aaa 95 2.28875%, 11/15/30 95,030 Ser. C007, Class C007A, Aaa 172 7.00%, 9/17/31 189,729 Federal National Mortgage Association, Aaa 105 2.2875%, 10/18/30 105,219 Ser. 1998-73, Class MZ, Aaa 633 6.30%, 10/17/38 660,698 Aa2 400 Florida St Brd of Ed., 5.00%, 6/1/32 402,860
See Notes to Financial Statements 45 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- AAA(f) $ 300 GE Capital Mortgage Services, Inc., Ser. 1999-S, Class A29, 6.50%, 5/25/29 $ 309,407 Aaa 200 Georgia State Thruway Authority Rev., 5.00%, 3/1/21 206,322 A1 250 Golden State Tobacco Settlement Rev., Ser. 2003-A-1 6.25%, 6/1/33 239,383 Aaa 162 Government National Mortgage Association, Ser. 2000-9, Class FH, 2.34%, 2/16/30 162,764 Aaa 33 Government National Mortgage Association, Single Family, 008052, 6.75%, 9/20/22 33,325 AAA(f) 33 Green Tree Financial Corp., Ser. 1999-B, Class A1B, 2.05875%, 11/15/29 33,394 Aaa 250 Massachusetts St Wtr. Res. Auth., Ser. J, 5.00%, 8/1/32 250,373 AAA(f) 394 PNC Mortgage Secs. Corp., Ser. 1999-5, Class A3, 7.25%, 10/25/29 403,285 Residential Funding Mortgage, Ser. 1994-5, Class A6, Aaa 500 6.50%, 2/25/24 514,747 Ser. 1999-8, Class A1, AAA(f) 178 6.25%, 3/25/14 184,468 AAA(f) 31 Salomon Brothers Mortgage Securities, Inc., Ser. 1999-LBI, Class A, 2.13688%, 6/25/29 31,207 Aa2 500 Salt River Project, Ser. B, 4.75%, 1/1/32 490,725 Aaa 400 San Antonio Texas Water Rev., 5.00%, 5/15/25 401,740 Aaa 400 South Carolina St. Hwy., Ser. B, 5.00%, 4/1/17 421,604
46 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description Value (Note 1) - ------------------------------------------------------------------------------------------- Aaa $ 298 Wells Fargo Mortgage Bkd Secs., Mtge. Certificate Class II, Ser. A, 6.557005%, 10/25/31 $ 300,155 ---------------- Total collateralized mortgage obligations 7,655,238 ----------------
U.S. GOVERNMENT AND AGENCY SECURITIES 6.3%
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., $ 363 6.00%, 8/1/06(d) 377,235 Federal National Mortgage Association, 275 4.471%, 5/1/36(d) 280,290 1,000 5.00%, TBA 1,019,375 145 5.50%, 10/1/17(d) 150,293 395 5.936%, 11/1/11(d) 429,610 1,000 6.50%, 2/20/33(d) 1,049,375 Government National Mortgage Association, 497 5.50%, 1/15/32(d) 507,864 112 6.00%, 11/20/29(d) 115,467 821 6.50%, 3/15/32(d) 862,182 1,236 6.50%, 4/15/32(d) 1,298,504 1,000 6.50%, TBA 1,049,688 72 6.63%, 10/20/27(d) 74,445 77 8.50%, 5/20/30(d) 83,275 194 8.50%, 4/20/31(d) 209,372 United States Inflation Index Bonds, 1,562 3.50%, 1/15/11 1,724,515 1,683 3.625%, 1/15/08 1,850,478 616 3.625%, 4/15/28 720,862 276 3.875%, 4/15/29 337,100 United States Treasury Notes, 500 6.00%, 2/15/26 568,008 500 10.625%, 8/15/15 799,336 United States Treasury Strip, 1,250 2/15/22 451,702 ---------------- Total U.S. government and agency securities 13,958,976 ---------------- Total long-term Investments (cost $210,401,965) 200,602,372 ----------------
See Notes to Financial Statements 47 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 13.3% U.S. Government and Agency Securities 0.4% Federal Home Loan Mortgage Corp., $ 600 1.28%, 3/13/03(d) $ 599,266 United States Treasury Bills, 115 1.52%(c), 2/13/03(e) 114,963 145 1.52%(c), 2/20/03(e) 144,922 ---------------- Total U.S. government and agency securities 859,151 ---------------- - ------------------------------------------------------------------------------------- Commercial Paper 1.6% Eksportfinans A.S. 1,500 1.31%, 3/10/03 1,497,980 2,000 UBS Financial Inc., 1.57%, 2/19/03 1,998,413 ---------------- Total commercial paper 3,496,393 ---------------- Shares - ---------------------------------------------------------------------------------------- Mutual Fund 11.3% 25,115,070 Prudential Core Investment Fund-Taxable Money Market Series (Note 3) 25,115,070 ---------------- Total short-term investments (cost $29,470,473) 29,470,614 ---------------- Total investments, before outstanding options written and securities sold short (cost $239,872,438) 230,072,986 ---------------- OUTSTANDING OPTIONS WRITTEN (0.1)% Contracts - ---------------------------------------------------------------------------------------- Put Options 20 Euribor Future, expiring 12/15/03 @ $97.25 (8,587) ---------------- Notional Amount (000) - ---------------------------------------------------------------------------------------- $ 1,800 Interest Rate Swap, 3 month LIBOR over 5.50%, expiring 12/17/03 (20,696) ----------------
48 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Contracts Description Value (Note 1) - ----------------------------------------------------------------------------------------- Call Options 8 United States Treasury Notes, 10yr Futures, expiring 3/15/03 @ $117 $ (375) 16 United States Treasury Notes, 10yr Futures, expiring 3/31/03 @ $116 (11,750) ---------------- (12,125) ---------------- Notional Amount (000) - ----------------------------------------------------------------------------------------- Interest Rate Swaps, $ 2,200 3 month LIBOR over 3.25%, expiring 3/31/03 (13,092) 3,400 6 month LIBOR over 4.25%, expiring 5/30/03 (GBP) (5,090) 7,000 3 month LIBOR over 5.00%, expiring 6/18/03 (222,341) ---------------- (240,523) ---------------- Total outstanding options written (premiums received $176,795) (281,931) ---------------- SECURITIES SOLD SHORT (0.7)% Principal Amount (000) - ----------------------------------------------------------------------------------------- United States Treasury Notes, $ (500) 4.375%, 5/15/07 (531,934) (1,000) 4.875%, 2/15/12 (1,073,828) ---------------- Total securities sold short (proceeds $1,589,959) (1,605,762) ---------------- Total investments, net of outstanding call options written and securities sold short 102.9% (cost $238,105,684) 228,185,293 ---------------- Liabilities in excess of other assets (2.9)% (6,472,964) ---------------- Net Assets 100.0% $ 221,712,329 ---------------- ----------------
- ------------------------------ (a) Non-income producing security. (b) Represents issuer in default on interest payments, non income producing security. (c) Percentage quoted represents yield-to-maturity as of purchase date. (d) All or a portion of security segregated as collateral for TBA. (e) Pledged as initial margin on financial futures contracts. (f) S&P Rating. (g) Current rating. (h) Issuer in default on interest payment, non-income producing security. ADR--American Depository Receipt. MTN--Medium Term Note. 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 Moderate Growth Fund Statement of Assets and Liabilities (Unaudited)
January 31, 2003 - ---------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $239,872,438) $230,072,986 Foreign currency, at value (cost $2,961,161) 3,010,733 Receivable for investments sold 6,245,634 Interest and dividends receivable 1,137,605 Receivable for Fund shares sold 1,002,032 Tax reclaim receivable 25,423 Due from broker - variation margin 8,606 Deferred expenses and other assets 3,209 ---------------- Total assets 241,506,228 ---------------- LIABILITIES Payable for investments purchased 12,500,351 Due to custodian 3,732,422 Securities sold short, at fair value (proceeds $1,589,959) 1,605,762 Payable for Fund shares reacquired 866,070 Unrealized depreciation on forward currency contracts 348,680 Options written, at fair value (premiums received $176,795) 281,931 Distribution fee payable 158,178 Accrued expenses and other liabilities 145,972 Management fee payable 144,447 Deferred director's fees 10,086 ---------------- Total liabilities 19,793,899 ---------------- NET ASSETS $221,712,329 ---------------- ---------------- Net assets were comprised of: Shares of beneficial interest, at par $ 25,387 Paid-in capital in excess of par 270,337,442 ---------------- 270,362,829 Undistributed net investment income 191,059 Accumulated net realized loss on investments, and foreign currency transactions (38,676,086) Net unrealized depreciation on investments and foreign currency transactions (10,165,473) ---------------- Net assets, January 31, 2003 $221,712,329 ---------------- ----------------
50 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Statement of Assets and Liabilities (Unaudited) Cont'd.
January 31, 2003 - ---------------------------------------------------------------------------------------- Class A: Net asset value and redemption price per share ($47,010,206 / 5,371,200 shares of beneficial interest issued and outstanding) $8.75 Maximum sales charge (5% of offering price) .46 ---------------- Maximum offering price to public $9.21 ---------------- ---------------- Class B: Net asset value, offering price and redemption price per share ($111,120,946 / 12,732,634 shares of beneficial interest issued and outstanding) $8.73 ---------------- ---------------- Class C: Net asset value and redemption price per share ($59,824,335 / 6,854,799 shares of beneficial interest issued and outstanding) $8.73 Sales charge (1% of offering price) .09 ---------------- Offering price to public $8.82 ---------------- ---------------- Class Z: Net asset value, offering price and redemption price per share ($3,756,842 / 428,697 shares of beneficial interest issued and outstanding) $8.76 ---------------- ----------------
See Notes to Financial Statements 51 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Statement of Operations (Unaudited)
Six Months Ended January 31, 2003 - ---------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Interest (net of foreign withholding taxes of $2,376) $ 2,740,246 Dividends (net of foreign withholding taxes of $20,672) 819,957 ---------------- Total income 3,560,203 ---------------- Expenses Management fee 808,145 Distribution fee--Class A 61,584 Distribution fee--Class B 550,258 Distribution fee--Class C 264,500 Custodian's fees and expenses 207,000 Transfer agent's fees and expenses 156,000 Reports to shareholders 60,000 Registration fees 30,000 Audit fee and expenses 14,000 Legal fees 11,000 Trustees' fees and expenses 7,000 Miscellaneous 2,716 ---------------- Total expenses 2,172,203 ---------------- Net investment income 1,388,000 ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions (14,126,898) Options written 12,546 Foreign currency 392,284 Financial futures contracts 10,613 ---------------- (13,711,455) ---------------- Net change in unrealized appreciation (depreciation) on: Investments 11,166,548 Foreign currencies (421,117) Financial futures transactions 17,209 Options written (62,301) ---------------- 10,700,339 ---------------- Net loss on investments (3,011,116) ---------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,623,116) ---------------- ----------------
52 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Statement of Changes in Net Assets (Unaudited)
Six Months Year Ended Ended January 31, 2003 July 31, 2002 - ----------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income $ 1,388,000 $ 2,520,388 Net realized loss on investment transactions (13,711,455) (20,921,777) Net change in unrealized depreciation of investments 10,700,339 (19,644,657) ---------------- ------------- Net decrease in net assets resulting from operations (1,623,116) (38,046,046) ---------------- ------------- Dividends and distributions (Note 1) Dividends from net investment income Class A (388,800) (1,487,953) Class B (513,676) (1,869,042) Class C (256,727) (631,115) Class Z (33,760) (131,679) ---------------- ------------- (1,192,963) (4,119,789) ---------------- ------------- Fund share transactions (net of share conversions) (Note 6) Net proceeds from shares sold 46,878,409 86,962,395 Net asset value of shares issued in reinvestment of dividends and distributions 1,141,323 3,998,554 Cost of shares reacquired (31,738,418) (55,021,978) ---------------- ------------- Net increase in net assets from Fund shares transactions 16,281,314 35,938,971 ---------------- ------------- Total increase (decrease) 13,465,235 (6,226,864) NET ASSETS Beginning of period 208,247,094 214,473,958 ---------------- ------------- End of period(a) $221,712,329 $ 208,247,094 ---------------- ------------- ---------------- ------------- - ------------------------------ (a) Includes undistributed net investment income of: $ 191,059 $ -- ---------------- -------------
See Notes to Financial Statements 53 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Strategic Partners Asset Allocation Funds (the 'Trust'), 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 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. Jennison Associates LLC ('Jennison'), Prudential Investment Management, Inc. ('PIM'), Lazard Asset Management, Pacific Investment Management Company, Franklin Advisers, Inc. and EARNEST Partners, LLC are the 'Advisers'. As of November 20, 2002, RS Investments replaced Franklin Advisers, Inc. as the Adviser of the Small-Capitalization Growth portion of the Fund. 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 (other than options on securities and indices) are valued at the last sale price on such exchange on the day of valuation, or, if there was no sale reported on such day, at the mean between the last reported bid and asked prices on such day or at the last 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 LLC ('PI' or the 'Manager'), in consultation with the Adviser, to be over-the-counter, are valued by an independent pricing agent or principal market maker (if available, otherwise a principal market maker or a primary market dealer). 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 or for which the pricing agent or market maker does not provide a valuation or methodology, or provides valuation methodology that, 54 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. in the judgment of the Manager or Advisers (or valuation committee or Board of Trustees), does not represent fair value, are valued by the valuation committee and Board of Trustees in consultation with the Manager or Advisers. Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation. 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. 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. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. 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. 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 current 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, 55 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at year end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on investments and foreign currencies. 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. Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the 'initial margin.' Subsequent payments known as 'variation margin,' are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts. The Fund invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or market conditions. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. 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 (loss) is included in net unrealized appreciation or depreciation on investments. Gain (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 (loss), if any, is included in net realized gain (loss) on foreign currency transactions. Risks may arise 56 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. 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 with respect to securities which the Fund currently owns or intends to purchase. The Fund's principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on written option transactions. The Fund, as writer of an option, may have no control over whether the underlying securities 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 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. Short Sales: The Fund may make short sales of securities as a method of hedging potential price declines in similar securities owned. When the Fund makes a short sale, it will borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow the particular securities and may be obligated to return any interest or dividends received on such borrowed securities. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon the termination of a short sale if the market price is less or greater than the proceeds originally received, respectively. 57 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Interest Rate Swaps: An interest rate 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. Interest on the securities in the swap are included in the value of the exchange. Net interest payments/receipts are included in interest income in the Statements of Operations. The swaps are valued daily at current market value and any unrealized gain (loss) is included in the net unrealized appreciation or depreciation on investments. Gain (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 transactions, 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. The use of derivative transactions may involve elements of both market and credit risk in excess of the amounts reported in the Statements of Assets and Liabilities. 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 continue 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. 58 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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. Note 2. Agreements The Fund has a management agreement with PI. Pursuant to this agreement, PI manages the investment operations of the Fund, administers the Fund's affairs and supervises the Advisers' performance of all investment advisory services. PI 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 PI is computed daily and payable monthly at an annual rate of .75% of the average daily net assets of the Fund. PI, 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 six months ended January 31, 2003. PIMS has advised the Fund that it has received approximately $159,000 and $114,200 in front-end sales charges resulting from sales of Class A and Class C shares, respectively, during the six month ended January 31, 2003. PIMS has advised the Fund that for the six months ended January 31, 2003, it has received approximately $138,400 and $13,800 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively. Jennison, PIMS, PIM and PI are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. ('Prudential'). The Fund, along with other affiliated registered investment companies (the 'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of banks. For the six months ended January 31, 2003, the amount of the commitment was 59 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. $800 million and allows the Funds to increase the commitment to $1 billion if necessary. Interest on any borrowings under the SCA will be incurred at market rates. The Funds pay a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued and paid quarterly on a pro rata basis by the Funds. The purpose of the SCA is to serve as an alternative source of funding for capital share redemptions. The expiration date of the SCA is May 2, 2003. The Fund did not borrow any amounts pursuant to the SCA during the six months ended January 31, 2003. Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an a indirect, wholly owned subsidiary of Prudential, serves as the Fund's transfer agent. During the six months ended January 31, 2003, the Fund incurred fees of approximately $139,600 for the services of PMFS. As of January 31, 2003, approximately $24,200 of such fees were due to PMFS. The Fund pays networking fees to affiliated and unaffiliated broker/dealers. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national mutual fund clearing system. The Fund incurred approximately $23,100 in total networking fees, of which the amount relating to the services of Prudential Securities, Inc. ('PSI'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential was approximately $22,500 for the six months ended January 31, 2003. As of January 31, 2003, approximately $3,200 of such fees were due to PSI. These amounts are included in transfer agent's fees and expenses on the Statement of Operations. The Fund invests in the Taxable Money Market Series, a portfolio of Prudential Core Investment Fund, pursuant to an exemptive order received from the Securities and Exchange Commission. The Taxable Money Market Series is a money market fund registered under the Investment Company Act of 1940, as amended, and managed by PI. For the six months ended January 31, 2003, the Fund earned income of $70,600 from the Taxable Money Market Series by investing its excess cash. Note 4. Portfolio Securities Purchases and sales of portfolio securities, other than short-term investments, for the six months ended January 31, 2003, aggregated $190,836,184 and $191,552,815, respectively. 60 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. At January 31, 2003, the Fund had outstanding forward currency contracts both to purchase and sell foreign currencies, as follows:
Value at Value at Foreign Currency January 31, Settlement Date Purchase Contract 2003 Payable Appreciation - ---------------------------------------- ----------- --------------- -------------- EUR 714,000, expiring 2/10/03 $ 707,721 $ 766,137 $ 58,436 ----------- --------------- -------------- ----------- --------------- -------------- Value at Value at Foreign Currency January 31, Settlement Date Sale Contract 2003 Receivable (Depreciation) - ---------------------------------------- ----------- --------------- -------------- EUR 5,355,000, expiring 2/10/03 $(5,746,030) $(5,338,914) $ (407,116) ----------- --------------- -------------- ----------- --------------- --------------
During the six months ended January 31, 2003, the Fund entered into financial futures contracts. Details of financial futures contracts open at period end are as follows:
Value at Value at Number of Expiration January 31, Trade Unrealized Contracts Type Date 2003 Date Appreciation - --------- --------------------- ----------- ----------- ----------- --------------- Long Position: 21 90 Day Euro Mar. 2004 $ 5,137,913 $ 5,103,463 $ 34,450 89 10 yr. U.S. T-Notes Mar. 2004 10,158,516 10,050,063 108,453 --------------- $ 142,903 --------------- ---------------
Transactions in written call options during the six months ended January 31, 2003 were as follows:
Number of Contracts/ Notional Amount Premiums (000) Received --------------- --------- Options outstanding at July 31, 2002 25 $ 30,696 Options written 15,723 207,319 Options closed (17) (19,855 ) Options expired (1,287) (41,365 ) --------------- --------- Options outstanding at January 31, 2003 14,444 $176,795 --------------- --------- --------------- ---------
61 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Note 5. Distributions and Tax Information The United States federal income tax basis of the Fund's investments and the net unrealized depreciation as of January 31, 2003 were as follows:
Total Net Unrealized Tax Basis Appreciation Depreciation Depreciation - ------------ ------------ ------------ ------------ $245,426,500 $ 7,928,614 $(20,320,967) $(12,392,353)
The differences between book and tax basis are primarily attributable to the different treatment of wash sales for book and tax purposes. The other cost basis adjustments are primarily attributable to futures, forward currency contracts and mark to market of receivables and payables. For the six months ended January 31, 2003, the tax character of dividends paid of $1,192,963 was ordinary income. For federal income tax purposes, the Fund had a capital loss carryforward at July 31, 2002, of approximately $8,507,000 which expires in 2010. The capital loss carryforward differs from the amount on the Statement of Assets and Liabilities primarily due to the Fund electing to treat post-October capital losses of approximately $13,288,000 and currency losses of approximately $58,000 as having occurred in the following fiscal year. 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. 62 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Transactions in shares of beneficial interest were as follows:
Class A Shares Amount - ------------------------------------------------------------ ---------- ------------ Six months ended January 31, 2003: Shares sold 767,286 $ 6,746,566 Shares issued in reinvestment of dividends and distributions 41,990 374,972 Shares reacquired (1,200,368) (10,584,895) ---------- ------------ Net increase (decrease) in shares outstanding before conversion (391,092) (3,463,357) Shares issued upon conversion from Class B 50,528 447,139 ---------- ------------ Net increase (decrease) in shares outstanding (340,564) $ (3,016,218) ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 1,626,004 $ 16,554,072 Shares issued in reinvestment of dividends and distributions 146,940 1,440,660 Shares reacquired (1,678,983) (16,899,015) ---------- ------------ Net increase (decrease) in shares outstanding before conversion 93,961 1,095,717 Shares issued upon conversion from Class B 146,653 1,468,951 ---------- ------------ Net increase (decrease) in shares outstanding 240,614 $ 2,564,668 ---------- ------------ ---------- ------------ Class B - ------------------------------------------------------------ Six months ended January 31, 2003: Shares sold 1,865,614 $ 16,409,084 Shares issued in reinvestment of dividends and distributions 55,892 497,998 Shares reacquired (1,444,393) (11,697,362) ---------- ------------ Net increase (decrease) in shares outstanding before conversion 477,113 5,209,720 Shares reacquired upon conversion from Class A 50,669 (447,139) ---------- ------------ Net increase (decrease) in shares outstanding 527,782 $ 4,762,581 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 3,289,589 $ 33,193,576 Shares issued in reinvestment of dividends and distributions 185,708 1,821,832 Shares reacquired (2,188,337) (21,480,205) ---------- ------------ Net increase (decrease) in shares outstanding before conversion 1,286,960 13,535,203 Shares reacquired upon conversion from Class A (147,278) (1,468,951) ---------- ------------ Net increase (decrease) in shares outstanding 1,139,682 $ 12,066,252 ---------- ------------ ---------- ------------
63 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Notes to Financial Statements (Unaudited) Cont'd.
Class C Shares Amount - ------------------------------------------------------------ ---------- ------------ Six months ended January 31, 2003: Shares sold 2,458,484 $ 21,693,411 Shares issued in reinvestment of dividends and distributions 26,814 238,911 Shares reacquired (971,743) (8,447,703) ---------- ------------ Net increase (decrease) in shares outstanding 1,513,555 $ 13,484,619 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 3,265,611 $ 33,060,063 Shares issued in reinvestment of dividends and distributions 62,836 611,082 Shares reacquired (1,186,551) (11,564,547) ---------- ------------ Net increase (decrease) in shares outstanding 2,141,896 $ 22,106,598 ---------- ------------ ---------- ------------ Class Z - ------------------------------------------------------------ Six months ended January 31, 2003: Shares sold 229,326 $ 2,029,348 Shares issued in reinvestment of dividends and distributions 3,297 29,442 Shares reacquired (113,916) (1,008,458) ---------- ------------ Net increase (decrease) in shares outstanding 118,707 $ 1,050,332 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 402,803 $ 4,154,684 Shares issued in reinvestment of dividends and distributions 12,645 124,980 Shares reacquired (503,938) (5,078,211) ---------- ------------ Net increase (decrease) in shares outstanding (88,490) $ (798,547) ---------- ------------ ---------- ------------
64 SEMIANNUAL REPORT JANUARY 31, 2003 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS STRATEGIC PARTNERS MODERATE GROWTH FUND Financial Highlights Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited)
Class A ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE:(d) Net asset value, beginning of period $ 8.86 -------- Income from investment operations: Net investment income 0.08 Net realized and unrealized gain (loss) on investments and foreign currencies (0.12) -------- Total from investment operations (0.04) -------- Less distributions Dividends from net investment income (0.07) Distributions from net realized capital gains -- -------- Total dividends and distributions (0.07) -------- Net asset value, end of period $ 8.75 -------- -------- TOTAL RETURN(b) (0.46)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $47,010 Average net assets (000) $48,865 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.45%(c) Expenses, excluding distribution and service (12b-1) fees 1.20%(c) Net investment income 1.85%(c) For Class A, B, C and Z shares: Portfolio turnover rate 94%
- ------------------------------ (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 (Unaudited) Cont'd.
Class A - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 10.70 $ 12.03 $ 10.86 $ 10.00 -------- -------- -------- -------- .19 .24 .26 .12 (1.76) (.83) 1.25 .83 -------- -------- -------- -------- (1.57) (.59) 1.51 .95 -------- -------- -------- -------- (.27) (.14) (.26) (.09) -- (.60) (.08) -- -------- -------- -------- -------- (.27) (.74) (.34) (.09) -------- -------- -------- -------- $ 8.86 $ 10.70 $ 12.03 $ 10.86 -------- -------- -------- -------- -------- -------- -------- -------- (14.92)% (4.89)% 13.96% 9.47% $ 50,559 $ 58,517 $ 48,786 $ 20,372 $ 57,234 $ 56,627 $ 34,809 $ 12,286 1.48% 1.54% 1.49% 1.88%(c) 1.23% 1.29% 1.24% 1.63%(c) 1.68% 2.18% 2.27% 1.59%(c) 217% 246% 155% 96%
See Notes to Financial Statements 67 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited) Cont'd.
Class B ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE:(d) Net asset value, beginning of period $ 8.83 ----------------- Income from investment operations: Net investment income 0.05 Net realized and unrealized gain (loss) on investments and foreign currencies (0.11) ----------------- Total from investment operations (0.06) ----------------- Less distributions Dividends from net investment income (0.04) Distributions from net realized capital gains -- ----------------- Total dividends and distributions (0.04) ----------------- Net asset value, end of period $ 8.73 ----------------- ----------------- TOTAL RETURN(b) (0.68)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 111,121 Average net assets (000) $ 109,155 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.20%(c) Expenses, excluding distribution and service (12b-1) fees 1.20%(c) Net investment income 0.56%(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 Financial Highlights (Unaudited) Cont'd.
Class B - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 10.63 $ 12.01 $ 10.85 $ 10.00 - ---------------- ---------------- -------- -------- .11 .16 .17 .06 (1.75) (.84) 1.23 .83 - ---------------- ---------------- -------- -------- (1.64) (.68) 1.40 .89 - ---------------- ---------------- -------- -------- (.16) (.10) (.16) (.04) -- (.60) (.08) -- - ---------------- ---------------- -------- -------- (.16) (.70) (.24) (.04) - ---------------- ---------------- -------- -------- $ 8.83 $ 10.63 $ 12.01 $ 10.85 - ---------------- ---------------- -------- -------- - ---------------- ---------------- -------- -------- (15.56)% (5.72)% 12.88% 8.99% $107,775 $117,664 $ 99,950 $ 58,678 $116,960 $109,534 $ 79,855 $ 36,645 2.23% 2.29% 2.24% 2.63%(c) 1.23% 1.29% 1.24% 1.63%(c) .93% 1.43% 1.48% .85%(c)
See Notes to Financial Statements 69 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE:(d) Net asset value, beginning of period $ 8.83 -------- Income from investment operations: Net investment income 0.05 Net realized and unrealized gain (loss) on investments and foreign currencies (0.11) -------- Total from investment operations (0.06) -------- Less distributions Dividends from net investment income (0.04) Distributions from net realized capital gains -- -------- Total dividends and distributions (0.04) -------- Net asset value, end of period $ 8.73 -------- -------- TOTAL RETURN(b) (0.68)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $59,824 Average net assets (000) $52,469 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.20%(c) Expenses, excluding distribution and service (12b-1) fees 1.20%(c) Net investment income 0.55%(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. 70 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 10.63 $ 12.01 $ 10.85 $ 10.00 -------- -------- -------- -------- .11 .16 .17 .06 (1.75) (.84) 1.23 .83 -------- -------- -------- -------- (1.64) (.68) 1.40 .89 -------- -------- -------- -------- (.16) (.10) (.16) (.04) -- (.60) (.08) -- -------- -------- -------- -------- (.16) (.70) (.24) (.04) -------- -------- -------- -------- $ 8.83 $ 10.63 $ 12.01 $ 10.85 -------- -------- -------- -------- -------- -------- -------- -------- (15.56)% (5.72)% 12.88% 8.99% $ 47,165 $ 34,021 $ 28,040 $ 22,375 $ 40,465 $ 30,623 $ 25,835 $ 18,346 2.23% 2.29% 2.24% 2.63%(c) 1.23% 1.29% 1.24% 1.63%(c) .95% 1.43% 1.44% .79%(c)
See Notes to Financial Statements 71 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited) Cont'd.
Class Z ----------------- Six Months Ended January 31, 2003 - --------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE:(d) Net asset value, beginning of period $ 8.87 ------- Income from investment operations: Net investment income 0.09 Net realized and unrealized gain (loss) on investments and foreign currencies (0.12) ------- Total from investment operations (0.03) ------- Less distributions Dividends from net investment income (0.08) Distributions from net realized capital gains -- ------- Total dividends and distributions (0.08) ------- Net asset value, end of period $ 8.76 ------- ------- TOTAL RETURN(b) (0.33)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 3,757 Average net assets (000) $ 3,260 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.20%(c) Expenses, excluding distribution and service (12b-1) fees 1.20%(c) Net investment income 1.06%(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. 72 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund Financial Highlights (Unaudited) Cont'd.
Class Z - ----------------------------------------------------------------------------------------------- Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001 2000 Through July 31, 1999 - ----------------------------------------------------------------------------------------------- $ 10.72 $ 12.05 $ 10.87 $ 10.00 -------- -------- -------- -------- .22 .25 .27 .13 (1.77) (.82) 1.27 .84 -------- -------- -------- -------- (1.55) (.57) 1.54 .97 -------- -------- -------- -------- (.30) (.16) (.28) (.10) -- (.60) (.08) -- -------- -------- -------- -------- (.30) (.76) (.36) (.10) -------- -------- -------- -------- $ 8.87 $ 10.72 $ 12.05 $ 10.87 -------- -------- -------- -------- -------- -------- -------- -------- (14.70)% (4.75)% 14.18% 9.70% $ 2,749 $ 4,272 $ 1,348 $ 13,578 $ 4,262 $ 2,685 $ 4,102 $ 21,914 1.23% 1.29% 1.24% 1.63%(c) 1.23% 1.29% 1.24% 1.63%(c) 1.93% 2.39% 2.11% 1.68%(c)
See Notes to Financial Statements 73 Strategic Partners Asset Allocation Funds Strategic Partners Moderate Growth Fund 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 Getting the Most from your Mutual Fund When you invest, you receive financial advice from a Financial Advisor or Registered Representative. Your financial professional can provide you with the following services: THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK WORTH IT? Your financial professional can help you match the reward you seek with the risk you can tolerate. Risk can be difficult to gauge--sometimes even the simplest investments bear surprising risks. The educated investor knows that markets seldom move in just one direction. There are times when a market sector or asset class will lose value or provide little in the way of total return. Managing your own expectations is easier with help from someone who understands the markets, and who knows you! KEEPING UP WITH THE JONESES A financial professional can help you wade through the numerous available mutual funds to find the ones that fit your individual investment profile and risk tolerance. While the newspapers and popular magazines are full of advice about investing, they are aimed at generic groups of people or representative individuals--not at you personally. Your financial professional will review your investment objectives with you. This means you can make financial decisions based on the assets and liabilities in your current portfolio and your risk tolerance--not just based on the current investment fad. BUY LOW, SELL HIGH Buying at the top of a market cycle and selling at the bottom are among the most common investor mistakes. But sometimes it's difficult to hold on to an investment when it's losing value every month. Your financial professional can answer questions when you're confused or worried about your investment, and should remind you that you're investing for the long haul. www.strategicpartners.com (800) 225-1852 FOR MORE INFORMATION Strategic Partners Mutual Funds Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 (800) 225-1852 Trustees Saul K. Fenster Robert F. Gunia Robert E. LaBlanc Douglas H. McCorkindale W. Scott McDonald, Jr. Thomas T. Mooney David R. Odenath, Jr. Stephen Stoneburn Clay T. Whitehead Officers Judy A. Rice, President Robert F. Gunia, Vice President Grace C. Torres, Treasurer Lori E. Bostrom, Secretary Marguerite E.H. Morrison, Assistant Secretary Maryanne Ryan, Anti-Money Laundering Compliance Officer Manager Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Investment Advisers EARNEST Partners, LLC 75 14th Street, Suite 2300 Atlanta, GA 30309 Jennison Associates LLC 466 Lexington Avenue New York, NY 10017 Lazard Asset Management 30 Rockefeller Plaza New York, NY 10112 Pacific Investment Management Company LLC 840 Newport Center Dr. Newport Beach, CA 92660 Prudential Investment Management, Inc. Gateway Center Two Newark, NJ 07102 RS Investment Management, L.P. 388 Market Street, Suite 1700 San Francisco, CA 94111 Distributor Prudential Investment Management Services LLC Gateway Center Three, 14th Floor 100 Mulberry Street Newark, NJ 07102-4077 Custodian The Bank of New York One Wall Street New York, NY 10286 Transfer Agent Prudential Mutual Fund Services LLC PO Box 8098 Philadelphia, PA 19101 Independent Accountants PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 Legal Counsel Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Fund Symbols Nasdaq CUSIP - ------------ ------ ----- Class A PAMGX 86276X889 Class B DMGBX 86276X871 Class C PIMGX 86276X863 Class Z PDMZX 86276X855 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. The accompanying financial statements as of January 31, 2003, were not audited and, accordingly, no opinion is expressed on them. Mutual funds are not insured by the FDIC or any federal government agency, are not a deposit of or guaranteed by any bank or any bank affiliate, and may lose value. (LOGO) Fund Symbols Nasdaq CUSIP - ------------ ------ ----- Class A PAMGX 86276X889 Class B DMGBX 86276X871 Class C PIMGX 86276X863 Class Z PDMZX 86276X855 MFSP504E4 IFS-A078620 SEMIANNUAL REPORT JANUARY 31, 2003 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS (LOGO) 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. Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Performance at a Glance INVESTMENT GOALS AND STYLE The Strategic Partners High Growth Fund's investment objective is long-term capital appreciation. The Fund is designed for investors who want investment professionals to make their asset allocation decisions, that is, it invests in a diversified portfolio of stocks. The Fund is periodically rebalanced in accordance with its asset allocation strategy. There can be no assurance that the Fund will achieve its investment objective. ABSOLUTE AND RELATIVE PERFORMANCE We evaluate an investment's performance in two ways. The first considers how much more (or less) an investment is worth at the end of a reporting period. This is known as absolute performance. The second compares whether you did better (or worse) than the market average (the benchmark index) or the average return of comparable funds (the Lipper Average) regardless of your gain or loss. This is called relative performance. Three factors determine the absolute return of an asset allocation fund: the asset allocation, the return for each asset class, and the relative performance of the investment advisers for the different asset classes. The fund's return is higher when the advisers outperform their asset class average than when they underperform them. This "adviser contribution" has a greater impact in the asset classes with larger allocations. This is why, in the discussion of the performance of your Strategic Partners Asset Allocation Fund, we may say, for example, that the Fund's large allocation to a low-performing asset class hurt its return even though the advisers' relative perform-ance had a positive impact. www.strategicpartners.com (800) 225-1852 Semiannual Report January 31, 2003 Cumulative Total Returns1 As of 1/31/03
Six Months One Year Three Years Since Inception2 Class A -4.42% -20.77% -28.38% -7.44% Class B -4.88 -21.37 -29.97 -10.28 Class C -4.88 -21.37 -29.97 -10.28 Class Z -4.26 -20.53 -27.75 -6.32 S&P 500 Index3 -5.26 -23.01 -36.01 -22.21 Lipper Multi-Cap Core Funds Avg.4 -5.37 -22.43 -30.69 -10.92
Average Annual Total Returns1 As of 12/31/02 One Year Three Years Since Inception2 Class A -24.64% -12.63% -2.38% Class B -25.26 -12.59 -2.09 Class C -22.90 -12.07 -2.12 Class Z -20.44 -10.87 -0.87 S&P 500 Index3 -22.09 -14.54 -5.35 Lipper Multi-Cap Core Funds Avg.4 -21.74 -12.45 -2.85 Past performance is not indicative of future results. Principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 1Source: Prudential Investments LLC and Lipper Inc. The cumulative total returns do not take into account applicable sales charges. The average annual total returns do take into account applicable sales charges. Without the distribution and service (12b-1) fee waiver of 0.05% annually for Class A shares, the returns would have been lower. The Fund charges a maximum front-end sales charge of 5% for Class A shares, and a 12b-1 fee of 0.30% annually. In some limited circumstances, Class A shares may not be subject to a front-end sales charge, but may be subject to a 1% contingent deferred sales charge (CDSC) for the first year. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1% for the first six years respectively after purchase, and a 12b-1 fee of 1.00% annually. 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 shares redeemed within 18 months of purchase, and a 12b-1 fee of 1.00% annually. Class Z shares are not subject to a sales charge or 12b-1 fees. The returns in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or following the redemption of fund shares. 2Inception date: 11/18/98. 3The Standard & Poor's 500 Composite Stock Price Index (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. Investors cannot invest directly in an index. 4The Lipper Average represents an average of all funds in the Lipper Multi-Cap Core Funds category for the periods noted. Funds in the Lipper Multi-Cap Core Funds Average typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value compared to the S&P SuperComposite 1500 Index. The returns for the S&P 500 Index and Lipper Multi-Cap Core Funds Average would be lower if they included the effects of sales charges or taxes, or in the case of the S&P 500 Index, operating expenses. 1 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS (LOGO) March 14, 2003 DEAR SHAREHOLDER, Securities markets were extraordinarily volatile between August 2002 and January 2003, the semiannual reporting period of the Strategic Partners High Growth Fund. As stock prices dropped sharply around the world, investors looked for more stable securities, pushing bond prices up. The Fund's performance for the period was slightly better than the Lipper Multi-Cap Core Funds Average or the Standard & Poor's 500 Index. In the following report, its investment advisers describe the different factors affecting the Fund's return this reporting period. The recent large swings of stock and bond prices suggest that some people abandoned their investment plans because of market turbulence or economic and geopolitical uncertainty. We recommend that you make any change to your investment strategy in consultation with a financial professional and that you base it on sound financial principles. In March 2003, I was named President of the Strategic Partners Asset Allocation Funds. I strongly believe in the value of these Funds' selection of asset allocations for different risk tolerances. What really sets the Funds apart, however, is the stringent screening process that we use to select and monitor their subadvisers. This assures you that the Funds' managers will adhere to their specific investment disciplines, which is especially important when trying to maintain a consistent strategy in today's turbulent market. We appreciate your continued confidence in us. Sincerely, Judy A. Rice, President Strategic Partners Asset Allocation Funds 2 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Semiannual Report January 31, 2003 INVESTMENT ADVISERS' REPORT A BRIEF UPSWING If the securities markets during the last years of the 20th century were driven largely by dreams of gains, the markets during the six months that ended in January 2003 were driven largely by fears of losses. As the reporting period began, stock markets around the world were in a decline of historic proportion. Investors lost confidence in corporations' financial reporting and in analysts' earnings forecasts. Slower-than-expected economic growth and concern about a possible war in Iraq also suppressed investment in stocks. By October, shares looked inexpensive, given forecasts for 2003 corporate earnings and the low yields on alternative fixed income investments. In addition, positive reports from technology executives fueled hopes that demand might recover, setting the scene for a brief upswing in October and November 2002 largely driven by stocks that were rebounding from steep declines earlier in the year. The rebound of stocks in past economic recoveries has often been swift. Investors, particularly institutional investors, didn't want to be left out if that happened again, and the market rose quickly as they rebuilt their portfolios. Sectors that had become relatively inexpensive in the bear market earlier in the year--technology, utilities, and producer durables--had substantial rebounds, while consumer staples, which had not been hurt as much in the falling market, shared only briefly in the rally. Then reports of slow retail sales in December chilled stock investors' enthusiasm again. Over the full reporting period, energy, technology, and healthcare stocks performed best, and consumer staples performed poorly. Although there were marked differences between sector returns, the differences between value and growth stocks and between small and large caps were small relative to the broad market decline. 3 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Semiannual Report January 31, 2003 Stock markets in developed countries around the world fared even worse than U.S. stocks. The loss of U.S. confidence discouraged investors nearly everywhere, particularly as none of the largest economies in the world looked strong. The fear of war was another factor affecting foreign markets. YOUR FUND'S PERFORMANCE We normally expect the Fund's asset allocation to have a larger impact on its return than the relative performance of its subadvisers. In this reporting period, however, the differences in performance between various equity asset classes were relatively small. The subadvisers of the large-cap value, small- cap value, and international stocks made strong contributions to the Fund's return in comparison to the performance of their respective asset classes. These strong relative returns outweighed the differences between asset classes. The Fund's small- cap value stocks, in particular, produced a solidly positive return in an asset class that declined by almost 6%. However, negative returns on all of the other asset classes in the Fund's portfolio resulted in a loss. The Fund's largest allocations are to U.S. large-cap growth and value stocks. The prices of value stocks held up slightly better than the prices of growth stocks, but this small style advantage was enhanced by a strong relative performance by the Fund's large-cap value holdings. They had a focus on media firms, including The News Corporation and EchoStar Communications. Stronger-than-expected advertising rates and the prospect of rising advertising volume helped media stocks generally. Moreover, EchoStar announced a surprise repurchase of more than 10% of its outstanding shares from Vivendi Universal. The Fund's large-cap value adviser had a substantial emphasis on technology, buying positions in leading firms inexpensively after the prolonged bear market in technology stocks. Positions in Hewlett-Packard, Xerox, BMC Software, and Cisco Systems had large gains during the period. 4 www.strategicpartners.com (800) 225-1852 Asset Class Index Returns As of 1/31/03 (CHART) The chart above shows returns for the six months ended January 31, 2003 of various securities indexes, which are generally considered representative of the market sectors in which the fund may invest. Source: Prudential Investments LLC 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 Russell 1000 Value Index comprises those securities in the Russell 1000 Index with a less- than-average growth orientation. Companies in this index generally have low price-to-book and price/earnings ratios, higher dividend yields, and lower forecasted growth values. The Russell 1000 Growth Index comprises those securities in the Russell 1000 Index with a greater- than-average growth orientation. Companies in this index tend to exhibit higher price-to-book and price/earnings ratios, lower dividend yields, and higher forecasted growth rates. The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to- book ratios. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios. The Morgan Stanley Capital International Europe, Australasia, and Far East Index (MSCI EAFE Index) is an unmanaged, weighted index of performance that reflects stock price movements in Europe, Australasia, and the Far East. 5 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Semiannual Report January 31, 2003 The Fund's large-cap growth holdings underperformed, hurt by weak technology and healthcare selections. The poorest performers in these sectors were the semiconductor firms Texas Instruments and STMicroelectronics in technology and Baxter International in healthcare. The Fund's holdings were also hurt by a sizable commitment to the retail chain Kohl's, whose stock fell sharply because of poor retail sales in the fourth quarter of 2002. The Fund had much smaller allocations to small-cap stocks, which declined somewhat less than stocks of larger companies. In fact, small-cap growth stocks held up better than all the other equity asset classes in the Fund. Small-cap profitability in the fourth quarter of 2002, particularily earnings of technology companies, improved more than analysts expected. The Fund's small-cap value portfolio performed substantially better than its asset class overall, while the small-cap growth portfolio trailed its market by a much smaller margin. The small-cap value holdings' exceptionally large outperformance was driven by a focus on the healthcare sector. The subadviser responsible for these investments believes that certain stocks in the healthcare industry may benefit from many developed countries' aging populations. A strong selection of healthcare stocks, including Covance and Pharmaceutical Product Development, had gains even in this period's weak equity markets. Both offer outsourced research services to drug companies and both reported positive financial results. Another top contributor was Pediatrix Medical Group, which manages hospital pediatric units. The Fund changed subadvisers for its small-cap growth stocks during the period. Averaged over the period, the small-cap growth holdings focused on technology and healthcare stocks and underweighted financials. Gains on some technology positions were outweighed by the more mixed performance of its healthcare holdings, but the margin by which the Fund trailed its market had a negligible impact on its overall return. 6 www.strategicpartners.com (800) 225-1852 The stocks of other developed countries performed significantly worse than U.S. stocks, but the Fund's foreign holdings held up relatively well. That strong performance brought their return in line with that of U.S. large-cap stocks. The Fund had strong international stock selection across sectors, including the generally weak technology sector. Positions in the consumer staples company Unilever and the Dutch telecommunications provider KPN were among the gainers. KPN rose because it aggressively reduced its capital expenditures in order to boost free cash flow and reduce its debt. However, the Spanish utility Endesa was hurt by its substantial investments in Latin America, as well as by regulatory uncertainty in its core Spanish electricity business. Strategic Partners High Growth Fund Management Team 7 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Semiannual Report January 31, 2003 WHAT IS AN ASSET ALLOCATION FUND? 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 domestic and international markets--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 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. Global investing has a worldwide scope, while international investing generally means markets outside the United States. A U.S. domestic portfolio, together with an international portfolio, provides global scope. Strategic Partners High Growth Fund Diversification Target (CHART) 9 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited)
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ LONG-TERM INVESTMENTS 93.5% COMMON STOCKS 92.9% - ------------------------------------------------------------------------------------- Aerospace & Defense 2.3% 19,700 Aeroflex, Inc.(a) $ 157,600 11,400 Cubic Corp. 229,368 10,900 General Dynamics Corp. 720,926 15,700 Herley Industries, Inc.(a) 248,845 8,600 Lockheed Martin Corp. 439,030 3,900 Moog Inc.(Class A)(a) 124,410 13,100 Northrop Grumman Corp. 1,197,471 ---------------- 3,117,650 - ------------------------------------------------------------------------------------- Auto Components 0.2% 24,400 CSK Auto Corp.(a) 242,536 - ------------------------------------------------------------------------------------- Automobiles 1.4% 10,890 Bayerische Motoren Werke (BMW) AG (Germany) 315,618 11,500 Harley-Davidson, Inc. 480,470 83,000 Nissan Motor Co., Ltd. (Japan) 631,807 11,000 Toyota Motor Corp. (Japan) 261,839 4,900 Winnebago Industries, Inc. 168,511 ---------------- 1,858,245 - ------------------------------------------------------------------------------------- Banks 5.5% 31,100 ABN Amro Holding NV (Netherlands) 484,060 30,820 Allied Irish Banks PLC (Ireland) 423,461 11,100 Astoria Financial Corp. 288,045 27,600 Bank of Ireland (Ireland) 279,970 14,600 Bank One Corp. 533,046 38,900 BankUnited Financial Corp. (Class A)(a) 614,620 108,100 Barclays PLC (United Kingdom) 622,423 14,300 BNP Paribas SA (France)(a) 564,417 5,700 Commerce Bancorp, Inc. 250,173 3,900 East-West Bancorp, Inc. 136,344 5,200 First Community Bancorp, Inc. 149,084 20,400 Fortis NV (Belgium) 320,584 6,000 Hibernia Corp. (Class A) 111,900
10 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 74,800 HSBC Holdings PLC (United Kingdom) $ 775,913 42,850 Overseas-Chinese Banking Corp., Ltd. (Singapore) 224,204 10,300 R&G Financial Corp. (Puerto Rico) 227,527 18,300 Royal Bank of Scotland Group PLC (United Kingdom) 402,823 22,700 Standard Chartered PLC (United Kingdom) 232,859 12,800 UBS AG (Switzerland)(a) 552,676 36,904 United Overseas Bank, Ltd. (Singapore) 222,799 ---------------- 7,416,928 - ------------------------------------------------------------------------------------- Beverages 1.5% 11,200 Anheuser-Busch Cos, Inc. 531,664 8,300 Coca-Cola Co. 335,818 48,200 Diageo PLC (United Kingdom) 492,063 17,110 Heineken NV (Netherlands) 616,188 ---------------- 1,975,733 - ------------------------------------------------------------------------------------- Biotechnology 1.8% 25,100 Acacia Research Corp. - CombiMatrix(a) 75,300 21,700 Amgen, Inc.(a) 1,105,832 2,300 Digene Corp.(a) 26,358 17,900 Embrex, Inc.(a) 185,068 13,500 Exact Sciences Corp.(a) 120,960 10,100 Genentech, Inc.(a) 371,074 10,300 MedImmune, Inc.(a) 306,837 20,800 Serologicals Corp.(a) 227,344 ---------------- 2,418,773 - ------------------------------------------------------------------------------------- Building Products 0.4% 104,000 Kingfisher PLC (United Kingdom) 329,114 15,800 Watsco, Inc. 247,270 ---------------- 576,384 - ------------------------------------------------------------------------------------- Chemicals 1.4% 11,700 Dow Chemical Co. 340,002 28,800 IMC Global, Inc. 281,376 24,900 Lyondell Chemical Co. 318,969 18,252 Monsanto Co. 322,148
See Notes to Financial Statements 11 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 6,900 The Scotts Co. (Class A)(a) $ 353,556 6,700 Valspar Corp. 284,750 ---------------- 1,900,801 - ------------------------------------------------------------------------------------- Commercial Services & Supplies 2.5% 73,200 Administaff, Inc.(a) 366,000 38,200 Allied Waste Industries, Inc.(a) 373,596 11,800 Bright Horizons Family Solution, Inc.(a) 315,060 9,000 Coinstar, Inc.(a) 175,050 10,800 Global Payments, Inc. 308,124 4,100 Icon PLC ADR (Ireland)(a) 114,800 10,200 Kelly Services, Inc. (Class A) 213,180 16,700 NDCHealth Corp. 363,058 16,000 Republic Services, Inc.(a) 327,680 31,000 Scientific Games Corp.(a) 182,900 17,900 Tyco International Ltd. (Bermuda) 286,579 18,300 Waste Management, Inc. 420,717 ---------------- 3,446,744 - ------------------------------------------------------------------------------------- Communications Equipment 1.0% 83,700 3Com Corp.(a) 354,051 12,800 Anaren Microwave, Inc.(a) 99,200 70,000 Cisco Systems, Inc.(a) 935,900 ---------------- 1,389,151 - ------------------------------------------------------------------------------------- Computers & Peripherals 2.1% 22,000 ActivCard Corp. ADR (France)(a) 168,300 28,400 Dell Computer Corp.(a) 677,624 73,947 Hewlett-Packard Co. 1,287,417 6,300 International Business Machines Corp. 492,849 41,800 Netscout Systems, Inc.(a) 167,618 ---------------- 2,793,808 - ------------------------------------------------------------------------------------- Construction & Engineering 0.2% 8,900 Navistar International Corp.(a) 214,223
12 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Construction Materials 0.2% 22,477 CRH PLC (Ireland) $ 283,496 - ------------------------------------------------------------------------------------- Containers & Packaging 0.3% 9,400 Temple-Inland, Inc. 406,268 - ------------------------------------------------------------------------------------- Diversified Financials 6.2% 2,800 Acom Co., Ltd. (Japan) 85,676 28,100 American Express Co. 998,393 39,700 AmeriCredit Corp.(a) 124,658 58,100 Citigroup, Inc. 1,997,478 14,600 Credit Suisse Group (Switzerland) 313,330 15,400 Eaton Vance Corp. 427,504 10,600 Edwards (A.G.), Inc. 302,842 17,500 Goldman Sachs Group, Inc. 1,191,750 10,400 Jeffries Group, Inc. 407,160 16,600 Lehman Brothers Holdings, Inc. 905,198 13,200 Merrill Lynch & Co., Inc. 462,264 95,000 Nikko Cordial Corp. (Japan) 342,171 8,200 Principal Financial Group, Inc. 234,520 14,500 Raymond James Financial, Inc. 369,750 1,100 Saxon Capital, Inc.(a) 14,058 2,200 Student Loan Corp 210,716 ---------------- 8,387,468 - ------------------------------------------------------------------------------------- Diversified Telecommunication Services 3.7% 27,100 AT&T Corp. 527,908 25,700 BellSouth Corp. 585,446 64,730 BT Group PLC (United Kingdom) 184,624 21,400 EchoStar Communications Corp. (Class A)(a) 555,330 103,200 Koninklijke KPN NV (Netherlands)(a) 723,375 55 Nippon Telegraph & Telephone Corp. (Japan) 184,342 46,700 Nokia Oyj (Finland) 655,685 38,900 Nokia Oyj ADR (Finland) 559,771 86,100 Telecom Italia SpA (Italy) 651,573 8,800 Verizon Communications, Inc. 336,864 ---------------- 4,964,918
See Notes to Financial Statements 13 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Electric Utilities 1.9% 37,000 CLP Holdings, Ltd. (Hong Kong) $ 148,951 6,400 Dominion Resources, Inc. 346,816 30,800 Endesa SA (Spain) 369,296 8,600 FirstEnergy Corp 268,320 25,100 PG&E Corp.(a) 346,380 13,100 PNM Resources, Inc. 276,541 11,000 Public Service Enterprise Group 388,080 19,700 TXU Corp. 361,495 ---------------- 2,505,879 - ------------------------------------------------------------------------------------- Electrical Equipment 1.2% 10,800 C&D Technologies, Inc. 187,380 6,500 Harris Corp. 202,800 12,447 Koninklijke Philips Electronic 211,102 19,600 Paxar Corp.(a) 292,040 33,600 Quinton Cardiology Systems, Inc.(a) 184,800 3,000 Schneider Electric SA (France) 130,936 10,500 Sony Corp. (Japan) 412,331 ---------------- 1,621,389 - ------------------------------------------------------------------------------------- Electronic Equipment & Instruments 1.6% 5,300 Analogic Corp. 279,628 10,600 Electro Scientific Industries, Inc.(a) 191,542 10,300 FLIR Systems, Inc.(a) 480,701 15,500 Ingram Micro, Inc. (Class A)(a) 178,250 47,600 Sanmina-SCI Corp.(a) 174,216 125,600 Solectron Corp.(a) 450,904 21,600 Texas Instruments, Inc. 343,440 ---------------- 2,098,681 - ------------------------------------------------------------------------------------- Energy Equipment & Services 3.1% 11,400 Baker Hughes, Inc. 344,964 10,800 Cal Dive International, Inc.(a) 230,148 28,300 ENSCO International, Inc. 762,402 29,100 GlobalSantaFe Corp. 632,343
14 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 19,100 Halliburton Co. $ 358,316 22,600 Schlumberger, Ltd. 852,020 39,800 Superior Energy Services, Inc.(a) 316,410 14,900 Unit Corp.(a) 266,114 13,200 Weatherford International, Ltd. (Bermuda)(a) 490,512 ---------------- 4,253,229 - ------------------------------------------------------------------------------------- Food & Drug Retailing 1.0% 61,100 Boots Group PLC (United Kingdom) 525,321 5,600 Carrefour SA (France) 222,413 83,900 Tesco PLC (United Kingdom) 228,266 10,700 Walgreen Corp. 310,300 ---------------- 1,286,300 - ------------------------------------------------------------------------------------- Food Products 1.8% 65,300 Cadbury Schweppes PLC (United Kingdom) 355,323 29,400 ConAgra Foods, Inc. 721,182 10,200 Kraft Foods, Inc. (Class A) 324,870 24,300 Sara Lee Corp. 484,542 15,000 Stake Technology Ltd. 46,200 62,400 Unilever PLC (United Kingdom)(a) 542,653 ---------------- 2,474,770 - ------------------------------------------------------------------------------------- Gas Utilities 0.6% 107,000 Hong Kong & China Gas (Hong Kong) 134,438 18,400 Oneok, Inc. 315,560 15,100 Sempra Energy 363,910 ---------------- 813,908 - ------------------------------------------------------------------------------------- Health Care Equipment & Supplies 2.0% 37,268 Amersham PLC 287,643 12,100 Baxter International, Inc. 340,978 10,900 Chattem, Inc.(a) 165,353 11,700 Closure Medical Corp.(a) 119,925 21,800 Conceptus, Inc.(a) 185,300 17,600 Cooper Cos., Inc. 450,736 13,900 Diagnostic Products Corp. 486,917
See Notes to Financial Statements 15 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 7,300 ESCO Technologies, Inc.(a) $ 252,580 13,300 Tenet Healthcare Corp.(a) 239,267 5,100 Zoll Medical Corp.(a) 203,694 ---------------- 2,732,393 - ------------------------------------------------------------------------------------- Health Care Providers & Services 2.6% 4,700 Centene Corp.(a) 132,540 26,200 Covance, Inc.(a) 706,876 18,800 HCA, Inc. 803,512 13,500 Lincare Holdings, Inc.(a) 385,290 15,000 Pediatrix Medical Group, Inc.(a) 551,250 22,400 Pharmaceutical Product Development, Inc.(a) 668,640 14,800 Quintiles Transnational Corp.(a) 188,108 7,400 Service Corp. International(a) 24,494 ---------------- 3,460,710 - ------------------------------------------------------------------------------------- Hotels Restaurants & Leisure 2.1% 15,200 Brinker International, Inc.(a) 452,200 7,700 CEC Entertainment, Inc.(a) 217,833 15,700 Marriott International, Inc. (Class A) 489,840 38,900 McDonald's Corp. 553,936 7,700 Rare Hospitality International, Inc.(a) 219,450 14,300 Sonic Corp.(a) 325,182 18,600 Starbucks Corp.(a) 422,592 17,000 WMS Industries, Inc.(a) 197,370 ---------------- 2,878,403 - ------------------------------------------------------------------------------------- Household Durables 1.5% 27,150 D.R. Horton, Inc. 518,565 11,000 Harman International Industries, Inc. 676,500 22,000 Hovnanian Enterprises, Inc. (Class A)(a) 640,860 5,500 Snap-On, Inc. 140,250 ---------------- 1,976,175 - ------------------------------------------------------------------------------------- Household Products 0.4% 13,500 Applied Films Corp.(a) 218,700 18,000 Kao Corp. (Japan) 366,933 ---------------- 585,633
16 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Industrial Conglomerates 1.4% 8,000 Kimberly Clark Corp. $ 370,560 6,100 Procter & Gamble Co. 521,977 4,400 Siemens AG (Germany) 179,476 6,800 3M Co. 846,940 ---------------- 1,918,953 - ------------------------------------------------------------------------------------- Insurance 4.9% 30,035 Alleanza Assicurazioni SpA (Italy) 226,971 12,600 Allstate Corp. 443,394 16,850 American International Group, Inc. 911,922 31,200 American Medical Security Group, Inc.(a) 431,808 11,800 Commerce Group, Inc. 409,460 22,700 Hartford Financial Services Group, Inc. 946,136 9,000 Lincoln National Corp. 290,250 8,200 Loews Corp. 360,964 14,300 Philadelphia Consolidated Holding Corp.(a) 476,619 10,200 ProAssurance Corp.(a) 236,946 8,200 Protective Life Corp. 222,466 22,300 Scottish Annuity & Life Holding, Ltd. (Cayman Islands) 399,170 16,400 XL Capital, Ltd. (Class A) (Cayman Islands) 1,230,984 ---------------- 6,587,090 - ------------------------------------------------------------------------------------- Internet & Catalog Retail 0.3% 20,600 School Specialty, Inc.(a) 405,820 - ------------------------------------------------------------------------------------- Internet Software & Services 0.7% 900 eBay, Inc.(a) 67,644 6,400 Digitas, Inc.(a) 25,920 8,400 FindWhat.com(a) 64,848 61,300 LookSmart Ltd.(a) 186,965 37,500 MatrixOne, Inc.(a) 182,625 42,200 S1 Corp(a) 208,890 14,900 WebMethods, Inc.(a) 234,079 ---------------- 970,971
See Notes to Financial Statements 17 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Machinery 0.2% 11,700 Sandvik AB (Sweden)(a) $ 241,803 - ------------------------------------------------------------------------------------- Media 4.4% 6,200 Clear Channel Communication, Inc.(a) 248,496 20,200 Fox Entertainment Group, Inc. (Class A)(a) 558,126 5,400 Knight-Ridder, Inc. 365,688 10,450 Lagardere SCA (France)(a) 425,134 11,100 Lamar Advertising Co.(a) 386,058 40,400 Liberty Media Corp. (Class A)(a) 402,788 12,300 New York Times Co. (Class A) 600,732 7,200 Omnicom Group, Inc. 434,160 42,000 Regent Communications, Inc.(a) 252,000 47,700 Sinclair Broadcast Group, Inc. (Class A)(a) 539,964 7,900 Spanish Broadcasting System, Inc.(a) 59,645 19,600 Univision Communications, Inc. (Class A)(a) 516,656 31,924 Viacom, Inc. (Class B)(a) 1,230,670 ---------------- 6,020,117 - ------------------------------------------------------------------------------------- Metals & Mining 0.6% 108,583 BHP Billiton Ltd. (Australia) 567,771 9,800 Freeport-McMoRan Copper & Gold, Inc. (Class B)(a) 183,946 ---------------- 751,717 - ------------------------------------------------------------------------------------- Multiline Retail 2.3% 13,300 Federated Department Stores, Inc.(a) 346,066 21,600 Fred's, Inc. 580,198 31,700 Kirkland's, Inc. a) 367,720 17,900 Kohl's Corp.(a) 937,423 19,800 Wal-Mart Stores, Inc. 946,440 ---------------- 3,177,847 - ------------------------------------------------------------------------------------- Office Electronics 0.7% 13,000 Canon, Inc. (Japan) 454,144 49,600 Xerox Corp.(a) 438,960 ---------------- 893,104
18 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Oil & Gas 4.9% 5,600 Apache Corp. $ 349,496 95,917 BP PLC (United Kingdom) 602,339 62,800 ENI SpA (Italy) 949,820 61,900 Grey Wolf, Inc.(a) 238,315 18,900 Occidental Petroleum Corp. 552,069 15,400 Royal Dutch Petroleum Co. (Netherlands) 637,589 66,300 Snam Rete Gas SpA (Italy) 226,314 10,600 Statoil ASA (Norway) 81,623 13,900 Swift Energy Co.(a) 132,050 45,000 Tokyo Gas Co Ltd.(Japan) 132,441 4,990 Total Fina Elf SA (Class B) 672,761 17,033 TotalFinaElf SA, ADR (France) 1,156,711 15,600 Westport Resources Corp.(a) 312,624 23,800 XTO Energy, Inc. 579,292 ---------------- 6,623,444 - ------------------------------------------------------------------------------------- Paper & Forest Products 1.6% 15,900 Boise Cascade Corp. 380,169 30,400 International Paper Co. 1,085,280 15,300 Weyerhaeuser Co. 735,165 ---------------- 2,200,614 - ------------------------------------------------------------------------------------- Personal Products 0.2% 10,500 Gillette Co. 313,950 - ------------------------------------------------------------------------------------- Pharmaceuticals 7.4% 22,200 Abbott Laboratories 846,264 9,900 Able Laboratories, Inc.(a) 113,494 3,700 Allergan, Inc. 224,479 37,200 Atherogenics, Inc.(a) 280,860 11,500 Atrix Labs, Inc.(a) 131,100 4,300 Barr Laboratories, Inc.(a) 339,915 25,300 Bradley Pharmaceuticals, Inc.(a) 284,625 21,700 Bristol-Myers Squibb Corp. 511,903 10,400 Collagenex Pharmaceuticals, Inc.(a) 102,128 10,700 Connetics Corp.(a) 138,993
See Notes to Financial Statements 19 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 5,400 CV Therapeutics, Inc.(a) $ 90,720 6,500 Forest Laboratories, Inc.(a) 336,375 52,800 GlaxoSmithKline PLC (United Kingdom) 992,984 17,200 Johnson & Johnson 922,092 18,600 K-V Pharmaceutical Co. (Class B)(a) 341,124 19,300 La Jolla Pharmaceutical Co.(a) 154,014 2,800 Merck & Company 155,092 16,300 Nastech Pharmaceutical, Inc.(a) 158,925 19,000 Novartis AG (Switzerland) 694,648 13,800 Novo Nordisk A/S ADR (Class B) (Denmark)(a) 377,452 5,200 NPS Pharmaceuticals, Inc.(a) 115,856 15,400 Pfizer, Inc. 467,544 21,601 Pharmacia Corp. 902,274 36,700 Pozen, Inc.(a) 155,975 13,400 Telik, Inc.(a) 150,884 4,800 Teva Pharmaceutical Industries Ltd. ADR (Israel) 184,320 15,500 Versicor, Inc.(a) 171,120 18,900 Wyeth 737,667 ---------------- 10,082,827 - ------------------------------------------------------------------------------------- Real Estate 0.1% 5,600 SL Green Realty Corp. 169,232 - ------------------------------------------------------------------------------------- Real Estate Investment Trust 0.1% 4,000 Alexandria Real Estate Equities, Inc. 165,400 - ------------------------------------------------------------------------------------- Road & Rail 0.2% 72 East Japan Railway Co. (Japan) 330,765 - ------------------------------------------------------------------------------------- Semiconductor Equipment & Products 3.5% 389,200 Agere Systems, Inc. (Class B)(a) 677,208 22,600 Applied Materials, Inc.(a) 270,522 53,700 California Micro Devices Corp.(a) 219,633 14,700 DSP Group, Inc.(a) 243,579 10,900 Exar Corp.(a) 141,155 68,300 Genus, Inc.(a) 191,923 42,500 Intel Corp. 665,550 3,500 KLA-Tencor Corp.(a) 114,240
20 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 53,500 Kopin Corp.(a) $ 223,683 29,900 Monolithic System Technology, Inc.(a) 250,233 26,100 Mykrolis Corp.(a) 189,486 8,700 Novellus Systems, Inc.(a) 256,215 5,900 Power Integrations, Inc.(a) 127,499 17,500 STMicroelectronics NV ADR (Switzerland) 321,300 25,100 Ultratech Stepper, Inc.(a) 294,925 19,100 Xilinx, Inc.(a) 377,989 16,400 Zoran Corp.(a) 177,940 ---------------- 4,743,080 - ------------------------------------------------------------------------------------- Software 3.2% 9,400 Business Objects SA ADR (France) 150,870 11,200 Cerner Corp.(a) 412,933 42,700 Concur Technologies, Inc.(a) 181,475 31,700 Embarcadero Technologies, Inc.(a) 221,900 40,500 Entrust, Inc.(a) 108,094 35,100 Legato Systems, Inc.(a) 176,553 85,400 Logicvision, Inc.(a) 164,822 23,700 Microsoft Corp.(a) 1,124,802 35,900 Opnet Technologies, Inc.(a) 294,452 21,400 Per-Se Technologies, Inc.(a) 172,912 7,000 S&P AG- Sponsored ADR 164,500 6,200 Synopsys, Inc.(a) 239,754 144,200 Tumbleweed Communications Corp.(a) 202,024 87,600 VitalWorks Inc.(a) 339,888 27,200 Verity, Inc.(a) 421,872 ---------------- 4,376,851 - ------------------------------------------------------------------------------------- Specialty Retail 3.1% 14,100 Aaron Rents, Inc. (Class B) 274,386 44,400 Ashworth, Inc.(a) 281,496 18,300 Bed Bath & Beyond, Inc.(a) 613,599 22,500 Compagnie Financiere Richemont AG (Class A) (Switzerland) 374,287 13,400 Circuit City Stores-Circuit City Group 80,266 9,000 Computer Programs & Systems, Inc.(a) 213,921
See Notes to Financial Statements 21 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ 13,000 Guitar Center, Inc.(a) $ 253,240 10,800 HOT Topic, Inc.(a) 255,960 9,300 Lowe's Companies, Inc. 317,874 15,100 Movie Gallery, Inc.(a) 212,155 29,800 Nuco2, Inc.(a) 147,897 8,900 Regis Corp. 239,766 20,900 Tiffany & Co. 485,925 32,800 Toys RUs, Inc.(a) 296,512 7,700 Urban Outfitters, Inc.(a) 157,696 ---------------- 4,204,980 - ------------------------------------------------------------------------------------- Tobacco 1.1% 19,700 Altadis SA (Spain) 449,784 8,800 Altria Group, Inc. 333,256 33,920 Imperial Tobacco Group PLC (United Kingdom) 518,029 10,400 Loews Corp. - Carolina Group 212,264 ---------------- 1,513,333 - ------------------------------------------------------------------------------------- Transportation 0.1% 7,250 UTI Worldwide, Inc. 172,550 - ------------------------------------------------------------------------------------- Wireless Telecommunication Services 1.4% 84,900 American Tower Corp. (Class A)(a) 431,292 106 NTT DoCoMo, Inc. (Japan) 204,152 430,000 Vodafone Group PLC (United Kingdom) 770,508 23,800 Vodafone Group PLC Spons ADR (United Kingdom) 448,630 ---------------- 1,854,582 ---------------- Total common stock 125,799,626 ---------------- PREFERRED STOCKS 0.6% - ------------------------------------------------------------------------------------- Automobiles 0.1% 500 Porsche AG Pfd. (Germany) 199,120
22 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Portfolio of Investments as of January 31, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ------------------------------------------------------------------------------------------ Media 0.5% 31,100 News Corp. Ltd. ADR Pfd. $ 691,353 ---------------- Total preferred stocks 890,473 ---------------- Total long-term investments (cost $136,744,743) 126,690,099 ---------------- SHORT-TERM INVESTMENTS 7.0% - ------------------------------------------------------------------------------------- Mutual Fund 7.0% 9,436,287 Prudential Core Investment Fund--Taxable Money Market Series (cost $9,436,287; Note 3) 9,436,287 ---------------- Total Investments 100.6% (cost $146,181,030) 136,126,386 Liabilities in excess of other assets (0.5%) (734,189) ---------------- Net Assets 100% $ 135,392,197 ---------------- ----------------
- ------------------------------ (a) Non-income producing security. ADR--American Depository Receipt. See Notes to Financial Statements 23 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Statement of Assets and Liabilities (Unaudited)
January 31, 2003 - ---------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $146,181,030) $136,126,386 Receivable for investments sold 869,570 Receivable for Fund shares sold 466,153 Foreign currency (cost $267,838) 267,064 Dividends and interest receivable 106,842 Cash 84,978 Tax reclaim receivable 51,199 Deferred expenses and other assets 1,797 ---------------- Total assets 137,973,989 ---------------- LIABILITIES Payable for investments purchased 2,008,671 Payable for Fund shares reacquired 225,850 Accrued expenses 150,718 Distribution fee payable 97,534 Management fee payable 89,777 Deferred trustees' fees payable 9,242 ---------------- Total liabilities 2,581,792 ---------------- NET ASSETS $135,392,197 ---------------- ---------------- Net assets were comprised of: Shares of beneficial interest, at par $ 17,246 Paid-in capital in excess of par 183,488,091 ---------------- 183,505,337 Accumulated net investment loss (832,676) Accumulated net realized loss on investments (37,234,688) Net unrealized depreciation on investments and foreign currency transactions (10,045,776) ---------------- Net assets, January 31, 2003 $135,392,197 ---------------- ----------------
24 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Statement of Assets and Liabilities (Unaudited) Cont'd.
January 31, 2003 - ---------------------------------------------------------------------------------------- Class A: Net asset value and redemption price per share ($30,294,428 / 3,783,142 shares of beneficial interest issued and outstanding) $8.01 Maximum sales charge (5% of offering price) .42 ---------------- Maximum offering price to public $8.43 ---------------- ---------------- Class B: Net asset value, offering price and redemption price per share ($64,498,560 / 8,268,756 shares of beneficial interest issued and outstanding) $7.80 ---------------- ---------------- Class C: Net asset value and redemption price per share ($38,277,896 / 4,906,870 shares of beneficial interest issued and outstanding) $7.80 Sales charge (1% of offering price) .08 ---------------- Offering price to public $7.88 ---------------- ---------------- Class Z: Net asset value, offering price and redemption price per share ($2,321,313 / 287,111 shares of beneficial interest issued and outstanding) $8.09 ---------------- ----------------
See Notes to Financial Statements 25 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Statement of Operations (Unaudited)
Six Months Ended January 31, 2003 - ---------------------------------------------------------------------------------------- NET INVESTMENT LOSS Income Dividends (net of foreign withholding taxes of $24,299) $ 726,898 Interest 63,880 ---------------- Total income 790,778 ---------------- Expenses Management fee 518,694 Distribution fee--Class A 37,890 Distribution fee--Class B 338,016 Distribution fee--Class C 190,308 Transfer agent's fees and expenses 203,000 Custodian's fees and expenses 163,000 Reports to shareholders 63,000 Registration fees 29,000 Audit fee 14,000 Legal fees 13,000 Trustees' fees 7,000 Miscellaneous 1,445 ---------------- Total expenses 1,578,353 ---------------- Net investment loss (787,575) ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions (14,438,532) Foreign currency transactions (13,950) Options written 3,112 ---------------- (14,449,370) ---------------- Net change in unrealized appreciation (depreciation) on: Investments 8,189,816 Foreign currency 6,757 Options written 5,247 ---------------- 8,201,820 ---------------- Net loss on investments and foreign currencies (6,247,550) ---------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (7,035,125) ---------------- ----------------
26 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Statement of Changes in Net Assets (Unaudited)
Six Months Year Ended Ended January 31, 2003 July 31, 2002 - ----------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment loss $ (787,575) $ (1,457,001) Net realized loss on investments and foreign currency transactions (14,449,370) (20,788,717) Net change in unrealized depreciation of investments and foreign currencies 8,201,820 (17,091,273) ---------------- ------------- Net decrease in net assets resulting from operations (7,035,125) (39,336,991) ---------------- ------------- Distributions from net realized gains Class A -- (88,806) Class B -- (205,210) Class C -- (90,577) Class Z -- (7,576) ---------------- ------------- -- (392,169) ---------------- ------------- Fund share transactions (net of share conversions) (Note 6) Net proceeds from shares sold 21,426,129 50,556,801 Net asset value of shares issued to shareholders in reinvestment of dividends and distributions -- 384,542 Cost of shares reacquired (18,743,442) (37,855,579) ---------------- ------------- Net increase in net assets from Fund share transactions 2,682,687 13,085,764 ---------------- ------------- Total increase (decrease) (4,352,438) (26,643,396) NET ASSETS Beginning of period 139,744,635 166,388,031 ---------------- ------------- End of period $135,392,197 $ 139,744,635 ---------------- ------------- ---------------- -------------
See Notes to Financial Statements 27 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Strategic Partners Asset Allocation Funds (the 'Trust'), is 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. Jennison Associates LLC ('Jennison'), Prudential Investment Management, Inc. ('PIM'), Lazard Asset Management, RS Investment Management, L.P. and EARNEST Partners, LLC are the Fund's 'Advisers'. As of November 20, 2002, RS Investment Management, L.P. replaced Franklin Advisers, Inc. as the Adviser of the Small-Capitalization Growth portion of the Fund. 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 sale 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 LLC ('PI' or '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 or for which the pricing agent or market maker does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgment of the Manager or subadviser, does not represent fair value, are valued by a Valuation 28 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. Committee appointed by the Board of Trustees, in consultation with the Manager or subadviser. 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. 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 holding of foreign currencies, currency gains (losses) realized between the trade date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at year end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on investments and foreign currencies. 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 29 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy on the collateral. 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 with respect to securities which the Fund currently owns or intends to purchase. The Fund's principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on written options. The Fund, as writer of an option, may have no control over whether the underlying securities 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 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. Written options, involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. 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. 30 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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. Note 2. Agreements The Fund has a management agreement with PI. Pursuant to this agreement, PI manages the investment operations of the Fund, administers the Fund's affairs and supervises the Advisers' performance of all investment advisory services. PI 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 PI is computed daily and payable monthly at an annual rate of .75% of the average daily net assets of the Fund. PI, 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. 31 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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 six months ended January 31, 2003. PIMS has advised the Fund that it has received approximately $82,800 and $50,600 in front-end sales charges resulting from sales of Class A and Class C shares, respectively, during the six months ended January 31, 2003. PIMS has advised the Fund that for the six months ended January 31, 2003, it has received approximately $89,600 and $17,700 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively. Jennison, PIMS, PIM and PI are indirect, wholly-owned subsidiaries of The Prudential Financial, Inc. ('Prudential'). The Fund, along with other affiliated registered investment companies (the 'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of banks. For the six months ended January 31, 2003 the amount of the commitment was $800 million and the SCA allows the Funds to increase the commitment to $1 billion, if necessary. Interest on any borrowings under the SCA will be incurred at market rates. The Funds pay a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued and paid quarterly on a pro rata basis by the Funds. The purpose of the SCA is to serve as an alternative source of funding for capital share redemptions. The expiration date of the SCA is May 2, 2003. The Fund did not borrow any amounts pursuant to the SCA during the six months ended January 31, 2003. Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund's transfer agent. During the six months ended January 31, 2003, the Fund incurred fees of approximately $146,300 for the services of PMFS. As of January 31, 2003 approximately $24,400 of such fees were due to PMFS. The Fund invested in the Taxable Money Market Series (the 'Series'), a portfolio of Prudential Core Investment Fund, pursuant to an exemptive order received from the Securities and Exchange Commission. The Series is a money market fund registered under the Investment Company Act of 1940, as amended, and managed by PI. During the six months ended January 31, 2003, the Fund earned income from the Series of approximately $39,300 by investing its excess cash. 32 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. The Fund pays networking fees to affiliated and unaffiliated broker/dealers. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national clearing system. The Fund incurred approximately $40,700 in total networking fees, of which the amount relating to the services of Prudential Securities, Inc. ('PSI'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, was approximately $19,400 for the six months ended January 31, 2003. As of January 31, 2003, approximately $3,800 of such fees were due to PSI. These amounts are included in transfer agent's fees and expenses in the Statement of Operations. Note 4. Portfolio Securities Purchases and sales of portfolio securities, other than short-term investments, for the six months ended January 31, 2003, aggregated $60,960,813 and $62,663,029, respectively. Note 5. Distributions and Tax Information The United States federal income tax basis of the Fund's investments and the net unrealized depreciation as of January 31, 2003 were as follows:
Total Net Tax Basis Unrealized of Investments Appreciation Depreciation Appreciation - -------------- --------------- --------------- --------------- $147,817,776 $5,620,071 $17,311,461 $(11,691,390)
As of July 31, 2002, the Fund had a capital loss carryforward for tax purposes of approximately $7,499,000 which expires in 2010. Accordingly, no capital gains distribution is expected to be paid to shareholders until net gains have been realized in excess of such amounts. The tax basis differs from the amount shown on the statement of assets and liabilities primarily due to the deferral for federal tax purposes of Post-October net foreign currency losses of $28,013 and $13,240,411 of capital losses incurred in the nine month period ended July 31, 2002 as having incurred in the following fiscal year. 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 33 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd. 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 - ------------------------------------------------------------ ---------- ------------ Six months ended January 31, 2003: Shares sold 548,795 $ 4,530,801 Shares reacquired (457,705) (3,651,450) ---------- ------------ Net increase (decrease) in shares outstanding before conversion 91,090 879,351 Shares issued upon conversion from Class B 72,427 598,572 ---------- ------------ Net increase (decrease) in shares outstanding 163,517 $ 1,477,923 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 991,885 $ 9,815,887 Shares issued in reinvestment of dividends and distributions 8,699 86,992 Shares reacquired (1,193,745) (11,877,183) ---------- ------------ Net increase (decrease) in shares outstanding before conversion (193,161) (1,974,304) Shares issued upon conversion from Class B 120,209 1,153,531 ---------- ------------ Net increase (decrease) in shares outstanding (72,952) $ (820,773) ---------- ------------ ---------- ------------ Class B - ------------------------------------------------------------ Six months ended January 31, 2003: Shares sold 773,239 $ 6,218,727 Shares reacquired (976,647) (7,753,229) ---------- ------------ Net increase (decrease) in shares outstanding before conversion (203,408) (1,534,502) Shares reacquired upon conversion into Class A (74,232) (598,572) ---------- ------------ Net increase (decrease) in shares outstanding (277,640) $ (2,133,074) ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 1,768,552 $ 17,310,439 Shares issued in reinvestment of dividends and distributions 20,597 202,465 Shares reacquired (1,364,338) (12,863,100) ---------- ------------ Net increase (decrease) in shares outstanding before conversion 424,811 4,649,804 Shares reacquired upon conversion into Class A (122,522) (1,153,531) ---------- ------------ Net increase (decrease) in shares outstanding 302,289 $ 3,496,273 ---------- ------------ ---------- ------------
34 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Notes to Financial Statements (Unaudited) Cont'd.
Class C Shares Amount - ------------------------------------------------------------ ---------- ------------ Six months ended January 31, 2003: Shares sold 1,143,414 $ 9,207,014 Shares reacquired (808,216) (6,415,857) ---------- ------------ Net increase (decrease) in shares outstanding 335,198 $ 2,791,157 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 2,209,436 $ 21,799,516 Shares issued in reinvestment of dividends and distributions 8,915 87,635 Shares reacquired (1,108,502) (10,543,165) ---------- ------------ Net increase (decrease) in shares outstanding 1,109,849 $ 11,343,986 ---------- ------------ ---------- ------------ Class Z - ------------------------------------------------------------ Six months ended January 31, 2003: Shares sold 174,067 $ 1,469,587 Shares reacquired (111,456) (922,906) ---------- ------------ Net increase (decrease) in shares outstanding 62,611 $ 546,681 ---------- ------------ ---------- ------------ Year ended July 31, 2002: Shares sold 163,862 $ 1,630,959 Shares issued in reinvestment of dividends and distributions 740 7,450 Shares reacquired (257,094) (2,572,131) ---------- ------------ Net increase (decrease) in shares outstanding (92,492) $ (933,722) ---------- ------------ ---------- ------------
35 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited)
Class A -------------------- Six Months Ended January 31, 2003(d) - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.38 -------- Income from investment operations: Net investment loss (.02) Net realized and unrealized gain (loss) on investment and foreign currency transactions (.35) -------- Total from investment operations (.37) -------- Less distributions: Dividends in excess of net investment income -- Distributions from net realized gains -- -------- Total dividends and distributions -- -------- Net asset value, end of period $ 8.01 -------- -------- TOTAL RETURN(b) (4.42)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 30,294 Average net assets (000) $ 30,065 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.71%(c) Expenses, excluding distribution and service (12b-1) fees 1.46%(c) Net investment income (loss) (.57)%(c) For Class A, B, C and Z shares: Portfolio turnover rate 47%
- ------------------------------ (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. 36 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class A - ------------------------------------------------------------------------------------------------ Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001(d) 2000(d) Through July 31, 1999(d) - ------------------------------------------------------------------------------------------------ $ 10.70 $ 12.95 $ 11.52 $ 10.00 -------- -------- -------- -------- (.03) --(e) --(e) --(e) (2.27) (1.27) 2.14 1.52 -------- -------- -------- -------- (2.30) (1.27) 2.14 1.52 -------- -------- -------- -------- -- -- (.43) -- (.02) (.98) (.28) -- -------- -------- -------- -------- (.02) (.98) (.71) -- -------- -------- -------- -------- $ 8.38 $ 10.70 $ 12.95 $ 11.52 -------- -------- -------- -------- -------- -------- -------- -------- (21.49)% (10.09)% 18.99% 15.20% $ 30,337 $ 39,528 $ 35,678 $21,248 $ 36,151 $ 39,128 $ 27,528 $10,442 1.57% 1.64% 1.54% 1.73%(c) 1.32% 1.39% 1.29% 1.48%(c) (.35)% .02% .01% .02%(c) 98% 83% 67% 38%
See Notes to Financial Statements 37 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class B -------------------- Six Months Ended January 31, 2003(d) - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.20 -------- Income from investment operations: Net investment loss (.05) Net realized and unrealized gain (loss) on investment and foreign currency transactions (.35) -------- Total from investment operations (.40) -------- Less distributions: Dividends in excess of net investment income -- Distributions from net realized gains -- -------- Total dividends and distributions -- -------- Net asset value, end of period $ 7.80 -------- -------- TOTAL RETURN(b) (4.88)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 64,499 Average net assets (000) $ 67,052 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.46%(c) Expenses, excluding distribution and service (12b-1) fees 1.46%(c) Net investment income (loss) (1.32)%(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. 38 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class B - ------------------------------------------------------------------------------------------------ Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001(d) 2000(d) Through July 31, 1999(d) - ------------------------------------------------------------------------------------------------ $ 10.55 $ 12.86 $ 11.47 $ 10.00 -------- -------- -------- -------- (.11) (.08) (.09) (.05) (2.22) (1.25) 2.12 1.52 -------- -------- -------- -------- (2.33) (1.33) 2.03 1.47 -------- -------- -------- -------- -- -- (.36) -- (.02) (.98) (.28) -- -------- -------- -------- -------- (.02) (.98) (.64) -- -------- -------- -------- -------- $ 8.20 $ 10.55 $ 12.86 $ 11.47 -------- -------- -------- -------- -------- -------- -------- -------- (22.08)% (10.66)% 18.13% 14.70% $ 70,043 $ 86,941 $ 79,793 $41,049 $ 82,953 $ 84,949 $ 60,994 $24,260 2.32% 2.39% 2.29% 2.48%(c) 1.32% 1.39% 1.29% 1.48%(c) (1.09)% (.72)% (.71)% (.70)%(c)
See Notes to Financial Statements 39 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C -------------------- Six Months Ended January 31, 2003(d) - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.20 -------- Income from investment operations: Net investment loss (.05) Net realized and unrealized gain (loss) on investment and foreign currency transactions (.35) -------- Total from investment operations (.40) -------- Less distributions: Dividends in excess of net investment income -- Distributions from net realized gains -- -------- Total dividends and distributions -- -------- Net asset value, end of period $ 7.80 -------- -------- TOTAL RETURN(b) (4.88)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 38,278 Average net assets (000) $ 37,752 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 2.46%(c) Expenses, excluding distribution and service (12b-1) fees 1.46%(c) Net investment income (loss) (1.32)%(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. 40 See Notes to Financial Statements Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class C - ------------------------------------------------------------------------------------------------ Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001(d) 2000(d) Through July 31, 1999(d) - ------------------------------------------------------------------------------------------------ $ 10.55 $ 12.86 $ 11.47 $ 10.00 -------- -------- -------- -------- (.09) (.08) (.09) (.05) (2.24) (1.25) 2.12 1.52 -------- -------- -------- -------- (2.33) (1.33) 2.03 1.47 -------- -------- -------- -------- -- -- (.36) -- (.02) (.98) (.28) -- -------- -------- -------- -------- (.02) (.98) (.64) -- -------- -------- -------- -------- $ 8.20 $ 10.55 $ 12.86 $ 11.47 -------- -------- -------- -------- -------- -------- -------- -------- (22.08)% (10.66)% 18.13% 14.70% $ 37,468 $ 36,507 $ 31,636 $19,914 $ 38,874 $ 35,387 $ 26,413 $15,204 2.32% 2.39% 2.29% 2.48%(c) 1.32% 1.39% 1.29% 1.48%(c) (1.09)% (.73)% (.73)% (.75)%(c)
See Notes to Financial Statements 41 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Financial Highlights (Unaudited) Cont'd.
Class Z -------------------- Six Months Ended January 31, 2003(d) - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.45 ------- Income from investment operations: Net investment income (loss) (.01) Net realized and unrealized gain (loss) on investment and foreign currency transactions (.35) ------- Total from investment operations (.36) ------- Less distributions: Dividends in excess of net investment income -- Distributions from net realized gains -- ------- Total dividends and distributions -- ------- Net asset value, end of period $ 8.09 ------- ------- TOTAL RETURN(b) (4.26)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $2,321 Average net assets (000) $2,315 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.46%(c) Expenses, excluding distribution and service (12b-1) fees 1.46%(c) Net investment income (loss) (.33)%(c)
- ------------------------------ (a) Commencement of investment operations. (b) 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 (Unaudited) Cont'd.
Class Z - ------------------------------------------------------------------------------------------------ Year Ended July 31, - ---------------------------------------------------------- November 18, 1998(a) 2002 2001(d) 2000(d) Through July 31, 1999(d) - ------------------------------------------------------------------------------------------------ $ 10.77 $ 12.98 $ 11.56 $ 10.00 -------- -------- -------- -------- (.01) .03 .02 .02 (2.29) (1.26) 2.14 1.54 -------- -------- -------- -------- (2.30) (1.23) 2.16 1.56 -------- -------- -------- -------- -- -- (.46) -- (.02) (.98) (.28) -- -------- -------- -------- -------- (.02) (.98) (.74) -- -------- -------- -------- -------- $ 8.45 $ 10.77 $ 12.98 $ 11.56 -------- -------- -------- -------- -------- -------- -------- -------- (21.35)% (9.74)% 19.23% 15.60% $ 1,897 $ 3,413 $ 1,318 $36,413 $ 2,778 $ 2,270 $ 25,793 $45,999 1.32% 1.39% 1.29% 1.48%(c) 1.32% 1.39% 1.29% 1.48%(c) (.10)% .23% .12% .21%(c)
See Notes to Financial Statements 43 Strategic Partners Asset Allocation Funds Strategic Partners High Growth Fund Getting the Most from your Mutual Fund When you invest, you receive financial advice from a Financial Advisor or Registered Representative. Your financial professional can provide you with the following services: THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK WORTH IT? Your financial professional can help you match the reward you seek with the risk you can tolerate. Risk can be difficult to gauge--sometimes even the simplest investments bear surprising risks. The educated investor knows that markets seldom move in just one direction. There are times when a market sector or asset class will lose value or provide little in the way of total return. Managing your own expectations is easier with help from someone who understands the markets, and who knows you! KEEPING UP WITH THE JONESES A financial professional can help you wade through the numerous available mutual funds to find the ones that fit your individual investment profile and risk tolerance. While the newspapers and popular magazines are full of advice about investing, they are aimed at generic groups of people or representative individuals--not at you personally. Your financial professional will review your investment objectives with you. This means you can make financial decisions based on the assets and liabilities in your current portfolio and your risk tolerance--not just based on the current investment fad. BUY LOW, SELL HIGH Buying at the top of a market cycle and selling at the bottom are among the most common investor mistakes. But sometimes it's difficult to hold on to an investment when it's losing value every month. Your financial professional can answer questions when you're confused or worried about your investment, and should remind you that you're investing for the long haul. www.strategicpartners.com (800) 225-1852 FOR MORE INFORMATION Strategic Partners Mutual Funds Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 (800) 225-1852 Trustees Saul K. Fenster Robert F. Gunia Robert E. La Blanc Douglas H. McCorkindale W. Scott McDonald, Jr. Thomas T. Mooney David R. Odenath, Jr. Stephen Stoneburn Clay T. Whitehead Officers Judy A. Rice, President Robert F. Gunia, Vice President Grace C. Torres, Treasurer Lori E. Bostrom, Secretary Marguerite E.H. Morrison, Assistant Secretary Maryanne Ryan, Anti-Money Laundering Compliance Officer Manager Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Investment Advisers EARNEST Partners, LLC 75 14th Street, Suite 2300 Atlanta, GA 30309 Jennison Associates LLC 466 Lexington Avenue New York, NY 10017 Lazard Asset Management 30 Rockefeller Plaza New York, NY 10112 RS Investment Management, L.P. 388 Market Street, Suite 1700 San Francisco, CA 94111 Prudential Investment Management, Inc. Gateway Center Two Newark, NJ 07102 Distributor Prudential Investment Management Services LLC Gateway Center Three, 14th Floor Newark, NJ 07102-4077 Custodian The Bank of New York One Wall Street New York, NY 10286 Transfer Agent Prudential Mutual Fund Services LLC PO Box 8098 Philadelphia, PA 19101 Independent Accountants PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 Legal Counsel Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Fund Symbols Nasdaq CUSIP - ------------ ------ ----- Class A PHGAX 86276X509 Class B PIHGX 86276X608 Class C PHGCX 86276X707 Class Z PDHZX 86276X806 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. The accompanying financial statements as of January 31, 2003, were not audited and, accordingly, no opinion is expressed on them. Mutual funds are not insured by the FDIC or any federal government agency, are not a deposit of or guaranteed by any bank or any bank affiliate, and may lose value. (LOGO) Fund Symbols Nasdaq CUSIP - ----------- ------ ----- Class A PHGAX 86276X509 Class B PIHGX 86276X608 Class C PHGCX 86276X707 Class Z PDHZX 86276X806 MFSP504E6 IFS-A078619 -----END PRIVACY-ENHANCED MESSAGE-----