UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number:	811-08915
Exact name of registrant as specified in charter:	Prudential Investment Portfolios 16
Address of principal executive offices:	655 Broad Street, 17th Floor
	Newark, New Jersey 07102
Name and address of agent for service:	Deborah A. Docs
	655 Broad Street, 17th Floor
	Newark, New Jersey 07102
Registrant’s telephone number, including area code:	800-225-1852
Date of fiscal year end:	10/31/2017
Date of reporting period:	10/31/2017

Item 1 – Reports to Stockholders

     PRUDENTIAL INCOME BUILDER FUND

ANNUAL REPORT

OCTOBER 31, 2017

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Objective: Income and long-term capital growth

Highlights

• An overweight allocation to convertible bonds, which can be converted into the underlying company’s stock, made positive contributions as the asset class outperformed the Bloomberg Barclays US Aggregate Bond Index (the Index), over the reporting period.

• Tactical allocations to overweight income-oriented stocks as well as high yield bonds made positive contributions as these exposures were the top-performing market segments within the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Jennison Associates LLC and PGIM, Inc. (PGIM) are registered investment advisers and Prudential Financial companies. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM. ^© 2017 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on or about June 15, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

LR993

Prudential Income Builder Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

Prudential Income Builder Fund 5

This Page Intentionally Left Blank

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Letter from the President

Dear Shareholder:

We hope you find the annual report for the Prudential Income Builder Fund informative and useful. The report covers performance for the 12-month period ended October 31, 2017.

Significant events during the reporting period included a new US president, followed by uncertainty in Congress over implementing the Trump administration’s policy initiatives. Elsewhere, Britain began its formal legal process to leave the European Union. France elected a more centrist president, which was viewed as a pro-euro referendum. North Korea’s missile launches escalated geopolitical tensions. Also, late in the period, a series of hurricanes caused damage in the US and the Caribbean.

Despite some turbulence in the macro-environment, solid economic fundamentals in the US economy included moderate gross domestic product expansion, robust employment, and accelerating corporate profit growth. Inflation remained tame. The Federal Reserve raised its federal funds rate twice in 2017, and is in the process of winding down its stimulus program.

Global economic growth remained mostly positive. Equities in the US reached new highs amid low volatility, while international equities posted strong gains. European stocks continued to gain. Asian markets were solid, and emerging markets outperformed most regions. Fixed income markets were mixed. High yield and emerging markets bonds were the top performers.

Given the uncertainty in today’s investment environment, we believe that active professional portfolio management offers a potential advantage. Active managers often have the knowledge and flexibility to find the best investment opportunities in the most challenging markets.

Even so, it’s best if investment decisions are based on your long-term goals rather than on short-term market and economic developments. We also encourage you to work with an experienced financial advisor who can help you set goals, determine your tolerance for risk, and build a diversified plan that’s right for you and make adjustments when necessary.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. We’re part of PGIM, a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart S. Parker, President

Prudential Income Builder Fund

December 15, 2017

Prudential Income Builder Fund 7

Your Fund’s Performance (unaudited)

Performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.pgiminvestments.com or by calling (800) 225-1852.

	Average Annual Total Returns as of 10/31/17 (with sales charges)
	One Year (%)		Five Years (%)		Ten Years (%)		Since Inception (%)
Class A		2.62		4.36		3.76		—
Class B		1.69		4.39		3.47		—
Class C		5.69		4.52		3.46		—
Class Q		N/A		N/A		N/A		6.58* (12/30/16)
Class R		7.20		5.05		3.99		—
Class Z		7.67		5.57		4.50		—
S&P 500 Index		23.61		15.17		7.51		—
Bloomberg Barclays US Aggregate Bond Index		0.90		2.04		4.19		—
Lipper Flexible Portfolio Funds Average		12.46		6.11		3.90		—
	Average Annual Total Returns as of 10/31/17 (without sales charges)
	One Year (%)		Five Years (%)		Ten Years (%)		Since Inception (%)
Class A		7.45		5.32		4.24		—
Class B		6.69		4.54		3.47		—
Class C		6.69		4.52		3.46		—
Class Q		N/A		N/A		N/A		6.58* (12/30/16)
Class R		7.20		5.05		3.99		—
Class Z		7.67		5.57		4.50		—
S&P 500 Index		23.61		15.17		7.51		—
Bloomberg Barclays US Aggregate Bond Index		0.90		2.04		4.19		—
Lipper Flexible Portfolio Funds Average		12.46		6.11		3.90		—

*Not annualized

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential Income Builder Fund (Class Z shares) with a similar investment in the Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) and the Bloomberg Barclays US Aggregate Index by portraying the initial account values at the beginning of the 10-year period for Class Z shares (October 31, 2007) and the account values at the end of the current fiscal year (October 31, 2017) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class B, Class C, Class Q, and Class R shares will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the Fund’s returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: PGIM Investments LLC and Lipper Inc.

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the inception date for the indicated share class.

Prudential Income Builder Fund 9

Your Fund’s Performance (continued)

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

	Class A*	Class B**	Class C*	Class Q	Class R*	Class Z*
Maximum initial sales charge	4.50% of the public offering price	None	None	None	None	None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	5% (Year 1) 4% (Year 2) 3% (Year 3) 2% (Year 4) 1% (Years 5/6) 0% (Year 7)	1.00% on sales made within 12 months of purchase	None	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.30% (0.25% currently)	1.00%	1.00%	None	0.75% (0.50% currently)	None

*Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 4 of this report for more information.

**Class B shares are closed to all purchase activity and no additional Class B shares may be purchased or acquired by except by exchange from Class B shares of another Fund or through dividend or capital gains reinvestment.

Benchmark Definitions

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how US stock prices in the United States have performed. The cumulative total return for the Index measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 16.89%.

Bloomberg Barclays US Aggregate Bond Index—The Bloomberg Barclays US Aggregate Bond Index represents an unmanaged diversified portfolio of fixed income securities, including US Treasuries, investment-grade corporate bonds, and mortgage-backed and asset-backed securities. The cumulative total return for the Index measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 3.20%.

Lipper Flexible Portfolio Funds Average—The Lipper Flexible Portfolio Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Flexible Portfolio Funds universe for the periods noted. The funds in the Lipper Average allocate their investments to both domestic and foreign securities across

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traditional asset classes with a focus on total return. The cumulative total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 10.36%.

Investors cannot invest directly in an index or average. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

Presentation of Fund Holdings

Five Largest Holdings expressed as a percentage of net assets as of 10/31/17 (%)
SPDR Bloomberg Barclays Convertible Securities ETF, Exchange Traded Funds	6.0
Prudential Short Duration High Yield Income Fund (Class Q), Affiliated Mutual Funds	3.0
PowerShares Preferred Portfolio ETF, Exchange Traded Funds	3.0
Prudential Absolute Return Bond Fund (Class Q), Affiliated Mutual Funds	2.0
Prudential Total Return Bond Fund (Class Q), Affiliated Mutual Funds	2.0

Holdings reflect only long-term investments and are subject to change.

Five Largest Industries expressed as a percentage of net assets as of 10/31/17 (%)
Oil, Gas & Consumable Fuels	12.3
Equity Real Estate Investment Trusts (REITs)	11.7
Foreign Government Bonds	10.7
Exchange Traded Funds	9.0
Affiliated Mutual Funds	7.0

Industry weightings reflect only long-term investments and are subject to change.

Prudential Income Builder Fund 11

Strategy and Performance Overview

How did the Fund perform?

The Prudential Income Builder Fund’s Class Z shares gained 7.67% for the 12-month period ended October 31, 2017, outperforming the 0.90% return of the Bloomberg Barclays US Aggregate Bond Index (the Index), while trailing the 23.61% return of the S&P 500 Index and the 12.46% return of the Lipper Flexible Portfolio Funds Average.

What were market conditions?

• In November 2016, after the reporting period began, the US election resulted in an upset Republican sweep. US stocks, especially financials, surged on optimism about President-Elect Donald Trump’s growth-friendly agenda. International stocks experienced lackluster performance, especially in Europe, which was fraught with political uncertainty. Meanwhile, fixed income investors appeared to believe the new US political landscape could lead to a stronger US economy, as evidenced by the rise in Treasury yields and the narrowing of credit spreads (yield differentials between corporate bonds and US Treasuries of comparable maturity). In December, the Federal Reserve (Fed) raised short-term interest rates and said it expected to hike rates three times in 2017.

• In the first quarter of 2017, US stocks soared in anticipation of policies by the new administration that could result in a more business-friendly market environment. However, in March, a failed attempt to repeal and replace the Affordable Care Act soured investor enthusiasm and US stocks gave up some of their gains. International stocks rose significantly, supported by a strengthening global economy. The fixed income market was buoyed by expectations of stimulative policies from the new administration and a modest upswing in US economic growth and inflation. In March, the Fed once again raised short-term interest rates.

• Heading into the second quarter, Washington, DC was bogged down in political intrigue, hearings, and investigations, as well as normal legislative challenges, rather than previously anticipated broad health care reform and fast-tracked stimulative fiscal policy. Nevertheless, US stocks advanced amid higher corporate earnings growth and sound economic fundamentals. International stocks also posted significant gains. European stocks continued their run, even as the UK began its formal legal process to leave the European Union. In the bond market, the political turmoil in Washington, DC, combined with modestly softer economic data, led to a modest decline in long-term US Treasury yields. The front, or short-term, end of the Treasury yield curve rose as the Fed implemented another rate hike in June and set the stage to start tapering its balance sheet by the end of 2017.

• During the third quarter, US stocks marched to record highs, though they experienced some volatility in August amid geopolitical tensions in Asia. Gains were driven by robust second-quarter earnings, a solid labor market, a strengthening economy, and expectations for a business-friendly tax agenda from the Trump administration.

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International equities recorded double-digit gains, fueled by strong performance in Europe and the Asia Pacific region. In the bond market, volatility remained near historic lows. Treasury yields were relatively stable, which along with improving global growth, sustained investors’ search for yield. Near the end of the reporting period in the fourth quarter, equities powered forward, and the Fed provided information on how it planned to reduce its balance sheet.

What worked?

• An overweight allocation to convertible bonds, which can be converted into the underlying company’s stock, made positive contributions as the asset class outperformed over the reporting period.

• Tactical allocations to overweight income-oriented stocks as well as high yield bonds made positive contributions as these exposures were the top-performing market segments within the Fund.

• The Fund’s allocations added value for the period as the Fund’s managers, in aggregate, posted positive results relative to their benchmarks.

• The Emerging Markets Debt and master limited partnerships (MLPs) segments of the Fund were the largest contributors, beating their respective benchmarks by sizeable margins.

What didn’t work?

• Strategic asset allocation was a key driver of negative relative returns as most of the Fund’s exposures failed to keep pace with an equity market that returned over 23% for the trailing period.

• Strategically, exposure to MLP challenged Fund performance as they struggled and were the only asset class exposure to post negative returns on an absolute basis.

• Tactical asset allocation decisions marginally detracted from Fund relative performance as the Fund had an overweight allocation to MLPs because they offered an attractive yield and valuation profile.

• The Equity Income sleeve trailed its benchmark by a large margin, a headwind for performance.

• Hybrid securities (Exchange Traded Funds (ETFs)) also lagged their respective benchmarks, negatively contributing to fund performance. Hybrid securities exhibit characteristics of both debt and equity. The Fund invests in preferred stocks and convertible bonds, both considered hybrid securities.

Did the Fund use derivatives and how did they affect performance?

• In the high yield sleeve of the Fund, credit derivatives, in the form of the high yield CDX, which is an index of credit derivatives, were used and were instrumental in attaining

Prudential Income Builder Fund 13

Strategy and Performance Overview (continued)

specific exposures targeted to gain from anticipated market developments. The high yield sleeve also used US Treasury futures to hedge interest rate risk relative to the Index. The futures helped to immunize any impact from interest rate fluctuations.

• In the emerging markets sleeve, currency positioning in the Fund was partially facilitated by the use of currency forward and options contracts. The Fund’s currency positioning added to relative performance over the one-year period. On various occasions throughout the reporting period, the Fund used the Emerging Markets CDX Index to obtain broad market exposure, which added to the Fund’s performance. The Markit CDX Emerging Markets Index is composed of 15 sovereign reference entities that trade in the credit default swap (CDS) market. A credit default swap is similar to buying or selling insurance contracts on a corporation’s debt. The emerging markets sleeve also used US Treasury futures to hedge interest rate risk relative to the Index. The futures helped to immunize any impact from interest rate fluctuations.

Current outlook

The Fund seeks to provide income and long-term capital growth by investing in a dynamically managed diversified portfolio of income-oriented securities. The Fund adjusts its allocations as market conditions change to help provide a balance of yield, return, and risk.

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Fees and Expenses (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 held through the six-month period ended October 31, 2017. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the

Prudential Income Builder Fund 15

Fees and Expenses (continued)

period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Prudential Income Builder Fund		Beginning  Account Value May 1, 2017		Ending  Account Value October 31, 2017		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During the Six-Month  Period*
Class A	Actual	$	1,000.00	$	1,021.80		0.95	%	$	4.84
	Hypothetical	$	1,000.00	$	1,020.42		0.95	%	$	4.84
Class B	Actual	$	1,000.00	$	1,017.30		1.70	%	$	8.64
	Hypothetical	$	1,000.00	$	1,016.64		1.70	%	$	8.64
Class C	Actual	$	1,000.00	$	1,017.40		1.70	%	$	8.64
	Hypothetical	$	1,000.00	$	1,016.64		1.70	%	$	8.64
Class Q	Actual**	$	1,000.00	$	1,023.10		0.70	%	$	3.57
	Hypothetical	$	1,000.00	$	1,021.68		0.70	%	$	3.57
Class R	Actual	$	1,000.00	$	1,019.50		1.20	%	$	6.11
	Hypothetical	$	1,000.00	$	1,019.16		1.20	%	$	6.11
Class Z	Actual	$	1,000.00	$	1,021.90		0.70	%	$	3.57
	Hypothetical	$	1,000.00	$	1,021.68		0.70	%	$	3.57

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2017, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2017 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

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Schedule of Investments

as of October 31, 2017

Description	Shares		Value
LONG-TERM INVESTMENTS    97.2%
AFFILIATED MUTUAL FUNDS    7.0%
Prudential Absolute Return Bond Fund (Class Q)		906,729	$	9,012,885
Prudential Short Duration High Yield Income Fund (Class Q)		1,487,258		13,459,680
Prudential Total Return Bond Fund (Class Q)		616,488		8,969,904
TOTAL AFFILIATED MUTUAL FUNDS (cost $31,059,647)(w)				31,442,469
COMMON STOCKS    41.6%
Aerospace & Defense    1.4%
Boeing Co. (The)		3,042		784,775
General Dynamics Corp.		9,004		1,827,632
Lockheed Martin Corp.		5,294		1,631,399
Safran SA (France)		17,779		1,872,526
				6,116,332
Air Freight & Logistics    0.4%
United Parcel Service, Inc. (Class B Stock)		13,624		1,601,229
Banks    3.5%
Bank of America Corp.		125,540		3,438,541
BB&T Corp.		56,716		2,792,696
Citigroup, Inc.		39,863		2,929,930
JPMorgan Chase & Co.		32,877		3,307,755
PNC Financial Services Group, Inc. (The)		22,080		3,020,323
				15,489,245
Beverages    0.4%
Coca-Cola Co. (The)		37,662		1,731,699
Biotechnology    0.8%
AbbVie, Inc.		22,696		2,048,314
Amgen, Inc.		8,877		1,555,428
				3,603,742
Capital Markets    0.1%
Goldman Sachs Group, Inc. (The)		2,685		651,059
Chemicals    0.9%
Air Products & Chemicals, Inc.		9,144		1,457,828
Akzo Nobel NV (Netherlands)		6,065		547,554
DowDuPont, Inc.		26,568		1,921,132
				3,926,514

See Notes to Financial Statements.

Prudential Income Builder Fund 17

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Communications Equipment    0.2%
Cisco Systems, Inc.		31,627	$	1,080,062
Electric Utilities    0.4%
Exelon Corp.		49,263		1,980,865
Energy Equipment & Services    0.1%
USA Compression Partners LP, MLP		40,438		635,281
Equity Real Estate Investment Trusts (REITs)    9.3%
AEW UK REIT PLC (United Kingdom)		615,000		828,972
Ascendas Real Estate Investment Trust (Singapore)		291,935		586,981
Cache Logistics Trust (Singapore)		3,743,889		2,251,621
Community Healthcare Trust, Inc.		114,283		3,134,783
CyrusOne, Inc.		36,314		2,229,317
Empiric Student Property PLC (United Kingdom)		357,686		462,180
EPR Properties		33,613		2,325,347
Eurocommercial Properties NV (Netherlands), CVA		22,014		916,640
Frasers Logistics & Industrial Trust (Singapore)		708,324		579,381
Gramercy Property Trust		31,610		938,817
Invincible Investment Corp. (Japan)		1,177		477,039
Lexington Realty Trust		100,902		1,021,128
Life Storage, Inc.		5,773		466,574
MedEquities Realty Trust, Inc.		221,147		2,569,728
Medical Properties Trust, Inc.		175,187		2,317,724
MGM Growth Properties LLC (Class A Stock)		57,955		1,710,252
NewRiver REIT PLC (United Kingdom)		105,571		469,747
Omega Healthcare Investors, Inc.		46,198		1,333,274
Park Hotels & Resorts, Inc.		83,217		2,395,817
Physicians Realty Trust		97,478		1,694,168
Prologis Property Mexico SA de CV (Mexico)		381,175		742,597
QTS Realty Trust, Inc. (Class A Stock)		17,892		1,035,052
Retail Properties of America, Inc. (Class A Stock)		133,334		1,629,342
Sabra Health Care REIT, Inc.		57,070		1,136,834
Senior Housing Properties Trust		63,859		1,175,006
Slate Retail REIT (Canada) (Class U Stock)		55,525		568,119
STAG Industrial, Inc.		34,663		946,300
Starhill Global REIT (Singapore)		1,022,210		577,585
Suntec Real Estate Investment Trust (Singapore)		337,363		482,962
Taubman Centers, Inc.		19,302		911,440
Washington Prime Group, Inc.		176,595		1,382,739
Welltower, Inc.		25,150		1,684,044
Wereldhave NV (Netherlands)		18,252		829,737
				41,811,247

See Notes to Financial Statements.

18

Description	Shares		Value
COMMON STOCKS (Continued)
Food & Staples Retailing    0.4%
Wal-Mart Stores, Inc.		21,426	$	1,870,704
Food Products    0.3%
Conagra Brands, Inc.		41,531		1,418,699
Health Care Equipment & Supplies    0.2%
Koninklijke Philips Electronics NV (Netherlands), ADR		21,385		872,294
Health Care Providers & Services    0.4%
Aetna, Inc.		9,548		1,623,446
Hotels, Restaurants & Leisure    1.0%
International Game Technology PLC		50,950		1,197,325
McDonald’s Corp.		16,529		2,758,855
Starbucks Corp.		9,681		530,906
				4,487,086
Household Products    0.4%
Procter & Gamble Co. (The)		19,782		1,707,978
Independent Power & Renewable Electricity Producers    0.4%
NextEra Energy Partners LP		30,516		1,200,499
NRG Yield, Inc. (Class C Stock)		37,440		696,384
				1,896,883
Industrial Conglomerates    0.4%
Honeywell International, Inc.		11,747		1,693,448
Insurance    0.5%
MetLife, Inc.		39,987		2,142,503
IT Services    0.9%
DXC Technology Co.		38,297		3,504,942
MasterCard, Inc. (Class A Stock)		3,907		581,244
				4,086,186
Life Sciences Tools & Services    0.4%
Thermo Fisher Scientific, Inc.		8,374		1,623,132
Machinery    0.4%
Caterpillar, Inc.		13,285		1,804,103

See Notes to Financial Statements.

Prudential Income Builder Fund 19

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Metals & Mining    0.4%
Rio Tinto PLC (United Kingdom), ADR		33,928	$	1,626,169
Mortgage Real Estate Investment Trusts (REITs)    0.5%
MFA Financial, Inc.		142,783		1,176,532
Starwood Property Trust, Inc.		50,760		1,091,848
				2,268,380
Multi-Utilities    0.3%
DTE Energy Co.		9,838		1,086,705
SCANA Corp.		11,269		486,145
				1,572,850
Oil, Gas & Consumable Fuels    11.9%
Andeavor		7,309		776,508
Antero Midstream GP LP		33,064		618,627
Antero Midstream Partners LP, MLP		51,297		1,472,224
Boardwalk Pipeline Partners LP, MLP		32,516		455,874
BP PLC (United Kingdom), ADR		43,990		1,789,073
Buckeye Partners LP, MLP		30,115		1,599,408
Cheniere Energy Partners LP Holdings LLC		125,856		3,151,434
Cheniere Energy Partners LP, MLP		98,041		2,744,168
Energy Transfer Equity LP, MLP		91,261		1,619,883
Energy Transfer Partners LP, MLP		166,772		2,903,501
EnLink Midstream LLC		44,521		690,075
EnLink Midstream Partners LP, MLP		51,172		783,443
Enterprise Products Partners LP, MLP		82,236		2,014,782
EQT GP Holdings LP, MLP		25,914		716,004
EQT Midstream Partners LP, MLP		31,132		2,274,504
Frontera Energy Corp. (Colombia)*		1,116		33,366
Hess Midstream Partners LP, MLP		24,586		488,278
Kinder Morgan, Inc.		78,269		1,417,452
MPLX LP, MLP		104,390		3,680,791
Noble Midstream Partners LP, MLP		31,222		1,619,173
NuStar Energy LP, MLP		20,549		684,282
ONEOK, Inc.		30,105		1,633,798
Pembina Pipeline Corp. (Canada)		37,657		1,245,317
Plains All American Pipeline LP, MLP		90,138		1,800,056
Royal Dutch Shell PLC (Class A Stock) (Netherlands), ADR		61,305		3,864,054
SemGroup Corp. (Class A Stock)		50,553		1,316,906
Tallgrass Energy GP LP		40,056		1,001,400
Tallgrass Energy Partners LP, MLP		48,543		2,118,417
Targa Resources Corp.		50,000		2,075,000

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
TC PipeLines LP, MLP		12,193	$	649,765
TransCanada Corp. (Canada)		28,906		1,372,368
Williams Cos., Inc. (The)		58,523		1,667,905
Williams Partners LP, MLP		83,766		3,102,693
				53,380,529
Pharmaceuticals    1.6%
Bristol-Myers Squibb Co.		49,166		3,031,575
Eli Lilly & Co.		32,469		2,660,510
Pfizer, Inc.		47,765		1,674,641
				7,366,726
Road & Rail    0.2%
CSX Corp.		14,777		745,204
Semiconductors & Semiconductor Equipment    0.4%
Texas Instruments, Inc.		17,500		1,692,075
Software    1.6%
Microsoft Corp.		43,207		3,593,958
Oracle Corp.		72,721		3,701,499
				7,295,457
Specialty Retail    0.3%
Home Depot, Inc. (The)		8,625		1,429,853
Technology Hardware, Storage & Peripherals    0.9%
Apple, Inc.		22,846		3,861,888
Textiles, Apparel & Luxury Goods    0.2%
Tapestry, Inc.		21,841		894,389
Transportation Infrastructure    0.1%
EcoRodovias Infraestrutura e Logistica SA (Brazil)		155,435		580,155
TOTAL COMMON STOCKS (cost $169,615,823)				186,567,412
EXCHANGE TRADED FUNDS    9.0%
PowerShares Preferred Portfolio ETF		889,788		13,311,229
SPDR Bloomberg Barclays Convertible Securities ETF		523,542		27,114,240
TOTAL EXCHANGE TRADED FUNDS (cost $36,811,414)				40,425,469

See Notes to Financial Statements.

Prudential Income Builder Fund 21

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Shares		Value
PREFERRED STOCKS    3.6%
Electronic Equipment, Instruments & Components    0.2%
Belden, Inc., CVT, Series B, 6.750%							10,211	$	1,097,376
Equity Real Estate Investment Trusts (REITs)    2.4%
American Homes 4 Rent, Series G, 5.8750%(a)							57,500		1,495,000
American Tower Corp., CVT, Series B, 5.500%							7,917		998,888
Cedar Realty Trust, Inc., Series C, 6.500%(a)							34,750		876,569
Investors Real Estate Trust, Series C, 6.625%							29,950		756,237
Monmouth Real Estate Investment Corp., Series C, 6.125%							29,250		736,808
Pebblebrook Hotel Trust, Series D, 6.375%(a)							18,522		479,442
Pennsylvania Real Estate Investment Trust, Series C, 7.200%							37,800		994,140
Rexford Industrial Realty, Inc., Series A, 5.875%							20,750		524,975
STAG Industrial, Inc., Series C, 6.875%(a)							27,420		736,227
Sunstone Hotel Investors, Inc., Series E, 6.950%							44,700		1,186,785
UMH Properties, Inc., Series C, 6.7500%							41,090		1,148,465
Urstadt Biddle Properties, Inc., Series H, 6.250%(a)							38,269		1,017,573
									10,951,109
Internet Software & Services    0.3%
Mandatory Exchangeable Trust, CVT, 5.75%, 144A							5,453		1,142,894
Oil, Gas & Consumable Fuels    0.4%
Anadarko Petroleum Corp., CVT, 7.500%							51,712		1,965,056
Pharmaceuticals    0.3%
Allergan PLC, CVT, Series A, 5.500%							1,758		1,131,607
TOTAL PREFERRED STOCKS (cost $15,391,033)									16,288,042
						Principal Amount (000)#
ASSET-BACKED SECURITIES    1.1%
Collateralized Loan Obligations
Adams Mill CLO Ltd. (Cayman Islands), Series 2014-1A, Class A1R, 144A, 3 Month LIBOR + 1.100%		2.459	%(c)		07/15/26		500		501,576
ALM XII Ltd. (Cayman Islands), Series 2015-12A, Class A1R, 144A, 3 Month LIBOR + 1.050%		2.409	(c)		04/16/27		500		502,463

See Notes to Financial Statements.

22

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
ASSET-BACKED SECURITIES (Continued)
Collateralized Loan Obligations (cont’d.)
ALM XVI Ltd./ALM XVI LLC (Cayman Islands), Series 2015-16A, Class A1R, 144A, 3 Month LIBOR + 1.050%		2.409	%(c)		07/15/27		500	$	502,689
Benefit Street Partners CLO VII Ltd. (Cayman Islands), Series 2015-VIIA, Class A1AR, 144A, 3 Month LIBOR + 0.780%^		2.160	(c)		07/18/27		500		500,000
OCP CLO Ltd. (Cayman Islands), Series 2015-9A, Class A1R, 144A, 3 Month LIBOR + 0.800%^		2.180	(c)		07/15/27		500		500,000
Regatta IV Funding Ltd. (Cayman Islands), Series 2014-1A, Class A1R, 144A, 3 Month LIBOR + 1.020%		2.387	(c)		07/25/26		700		700,594
Silver Spring CLO Ltd. (Cayman Islands), Series 2014-1A, Class AR, 144A, 3 Month LIBOR + 1.250%		2.609	(c)		10/15/26		500		502,484
Silvermore CLO Ltd. (Cayman Islands), Series 2014-1A, Class A1R, 144A, 3 Month LIBOR + 1.170%		2.485	(c)		05/15/26		297		298,371
Venture XXI CLO Ltd. (Cayman Islands), Series 2015-21A, Class AR, 144A, 3 Month LIBOR + 0.880%		2.239	(c)		07/15/27		750		750,135
TOTAL ASSET-BACKED SECURITIES (cost $4,747,363)									4,758,312
CONVERTIBLE BOND    0.2%
Banks
Goldman Sachs DXC Technology Co., Sr. Unsec’d. Notes, 144A^ (cost $921,274)		2.850			11/08/17		1,215		1,096,331
CORPORATE BONDS    23.9%
Advertising    0.0%
Acosta, Inc., Sr. Unsec’d. Notes, 144A		7.750			10/01/22		275		192,500
Aerospace & Defense    0.1%
Arconic, Inc., Sr. Unsec’d. Notes(a)		5.125			10/01/24		70		75,126
DAE Funding LLC (United Arab Emirates), Gtd. Notes, 144A		5.000			08/01/24		150		153,187
Orbital ATK, Inc., Gtd. Notes		5.250			10/01/21		75		77,156
StandardAero Aviation Holdings, Inc., Gtd. Notes, 144A		10.000			07/15/23		150		165,750
TransDigm, Inc.,
Gtd. Notes		6.375			06/15/26		50		50,875
Gtd. Notes		6.500			07/15/24		125		129,063
									651,157

See Notes to Financial Statements.

Prudential Income Builder Fund 23

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Agriculture    0.0%
Vector Group Ltd., Sr. Sec’d. Notes, 144A		6.125	%		02/01/25		125	$	129,688
Auto Manufacturers    0.1%
Fiat Chrysler Automobiles NV (United Kingdom), Sr. Unsec’d. Notes		5.250			04/15/23		200		212,500
Mclaren Finance PLC (United Kingdom), Sr. Sec’d. Notes, 144A		5.750			08/01/22		200		205,840
									418,340
Auto Parts & Equipment    0.3%
Adient Global Holdings Ltd., Gtd. Notes, 144A		4.875			08/15/26		200		205,750
Allison Transmission, Inc.,
Sr. Unsec’d. Notes, 144A		4.750			10/01/27		100		101,000
Sr. Unsec’d. Notes, 144A		5.000			10/01/24		100		104,250
American Axle & Manufacturing, Inc., Gtd. Notes, 144A		6.250			04/01/25		50		51,250
Cooper-Standard Automotive, Inc., Gtd. Notes, 144A		5.625			11/15/26		150		155,625
Dana Financing Luxembourg Sarl, Gtd. Notes, 144A		5.750			04/15/25		125		132,500
Dana, Inc., Sr. Unsec’d. Notes(a)		5.500			12/15/24		100		105,500
Nemak SAB de CV (Mexico), Sr. Unsec’d. Notes, 144A		5.500			02/28/23		200		205,260
TI Group Automotive Systems LLC (United Kingdom), Gtd. Notes, 144A		8.750			07/15/23		72		77,760
ZF North America Capital, Inc. (Germany), Gtd. Notes, 144A		4.750			04/29/25		250		262,500
									1,401,395
Banks    0.6%
Banco de Costa Rica (Costa Rica), Gov’t. Gtd. Notes		5.250			08/12/18		200		202,500
Bank of America Corp., Series M, Jr. Sub. Notes		8.125			12/29/49		25		25,790
Banque Centrale de Tunisie International Bond (Tunisia),
Sr. Unsec’d. Notes		5.625			02/17/24	EUR	125		154,659
Sr. Unsec’d. Notes		5.750			01/30/25		200		198,298
BBVA Bancomer SA (Mexico), Sub. Notes, 144A		6.750			09/30/22		200		227,100
CIT Group, Inc., Sr. Unsec’d. Notes		5.000			08/15/22		250		268,750
Citigroup, Inc., Series Q, Jr. Sub. Notes		5.950			12/29/49		100		105,518
National Savings Bank (Sri Lanka), Sr. Unsec’d. Notes		8.875			09/18/18		200		208,920
State Savings Bank of Ukraine Via SSB #1 PLC (Ukraine), Sr. Unsec’d. Notes		9.625			03/20/25		200		215,502
TC Ziraat Bankasi A/S (Turkey), Sr. Unsec’d. Notes, 144A, MTN		5.125			09/29/23		200		196,185

See Notes to Financial Statements.

24

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Banks (cont’d.)
Trade & Development Bank of Mongolia LLC (Mongolia), Gov’t. Gtd. Notes, EMTN		9.375	%		05/19/20		205	$	225,196
Vnesheconombank Via VEB Finance PLC (Russia),
Sr. Unsec’d. Notes		5.942			11/21/23		200		217,287
Sr. Unsec’d. Notes		6.025			07/05/22		200		217,022
									2,462,727
Beverages    0.1%
Cott Holdings, Inc. (Canada), Gtd. Notes, 144A		5.500			04/01/25		200		206,250
Building Materials    0.4%
BMC East LLC, Sr. Sec’d. Notes, 144A		5.500			10/01/24		150		157,125
Builders FirstSource, Inc.,
Gtd. Notes, 144A		10.750			08/15/23		175		199,062
Sr. Sec’d. Notes, 144A		5.625			09/01/24		50		52,813
Cemex SAB de CV (Mexico), Sr. Sec’d. Notes, 144A		5.700			01/11/25		200		210,500
Griffon Corp., Gtd. Notes		5.250			03/01/22		280		284,116
James Hardie International Finance DAC (Ireland), Gtd. Notes, 144A		5.875			02/15/23		200		210,000
Standard Industries, Inc.,
Sr. Unsec’d. Notes, 144A		5.125			02/15/21		50		51,563
Sr. Unsec’d. Notes, 144A		5.375			11/15/24		100		105,490
Summit Materials LLC/Summit Materials Finance Corp.,
Gtd. Notes		6.125			07/15/23		150		155,625
Gtd. Notes		8.500			04/15/22		100		111,750
Gtd. Notes, 144A		5.125			06/01/25		50		50,625
US Concrete, Inc., Gtd. Notes		6.375			06/01/24		275		295,625
									1,884,294
Chemicals    1.2%
A Schulman, Inc., Gtd. Notes		6.875			06/01/23		395		416,231
Alpha 3 BV/Alpha US Bidco, Inc. (United Kingdom), Gtd. Notes, 144A		6.250			02/01/25		200		205,000
Ashland LLC, Gtd. Notes		6.875			05/15/43		100		112,000
Blue Cube Spinco, Inc.,
Gtd. Notes		9.750			10/15/23		70		83,125
Gtd. Notes		10.000			10/15/25		125		152,187
Chemours Co. (The),
Gtd. Notes		5.375			05/15/27		75		80,063
Gtd. Notes		6.625			05/15/23		200		212,000
Gtd. Notes		7.000			05/15/25		110		122,650

See Notes to Financial Statements.

Prudential Income Builder Fund 25

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Chemicals (cont’d.)
CNAC HK Finbridge Co. Ltd. (China), Gtd. Notes		4.125	%		07/19/27		200	$	204,228
Cornerstone Chemical Co., Sr. Sec’d. Notes, 144A		6.750			08/15/24		185		187,312
CVR Partners LP/CVR Nitrogen Finance Corp., Sec’d. Notes, 144A(a)		9.250			06/15/23		100		106,500
GCP Applied Technologies, Inc., Gtd. Notes, 144A		9.500			02/01/23		75		84,000
Hexion, Inc.,
Sec’d. Notes, 144A		13.750			02/01/22		220		176,550
Sr. Sec’d. Notes, 144A(a)		10.375			02/01/22		480		452,400
Hexion, Inc./Hexion Nova Scotia Finance ULC, Sec’d. Notes		9.000			11/15/20		175		124,688
Kraton Polymers LLC/Kraton Polymers Capital Corp., Gtd. Notes, 144A		7.000			04/15/25		50		54,000
Mexichem SAB de CV (Mexico), Gtd. Notes, 144A		6.750			09/19/42		200		228,000
NOVA Chemicals Corp. (Canada),
Sr. Unsec’d. Notes, 144A		5.000			05/01/25		100		101,750
Sr. Unsec’d. Notes, 144A		5.250			06/01/27		375		382,500
Platform Specialty Products Corp.,
Sr. Unsec’d. Notes, 144A(a)		6.500			02/01/22		90		93,263
Sr. Unsec’d. Notes, 144A		10.375			05/01/21		175		189,875
PQ Corp., Sr. Sec’d. Notes, 144A		6.750			11/15/22		50		54,000
PQ Corp./Eco Finance Corp., Gtd. Notes, 144A		8.500			11/01/22		170		176,800
Rain CII Carbon LLC/CII Carbon Corp., Sec’d. Notes, 144A		7.250			04/01/25		410		443,825
TPC Group, Inc., Sr. Sec’d. Notes, 144A		8.750			12/15/20		650		635,375
Tronox Finance LLC, Gtd. Notes, 144A(a)		7.500			03/15/22		285		298,894
Tronox Finance PLC, Gtd. Notes, 144A		5.750			10/01/25		75		78,281
Venator Finance Sarl/Venator Materials LLC, Gtd. Notes, 144A		5.750			07/15/25		50		52,875
									5,508,372
Coal    0.3%
Alliance Resource Operating Partners LP/Alliance Resource Finance Corp., Gtd. Notes, 144A		7.500			05/01/25		200		211,250
CONSOL Energy, Inc.,
Gtd. Notes		5.875			04/15/22		475		484,500
Gtd. Notes		8.000			04/01/23		225		240,750
Peabody Energy Corp., Sr. Sec’d. Notes, 144A		6.375			03/31/25		132		136,125
Warrior Met Coal, Inc., Sr. Sec’d. Notes, 144A		8.000			11/01/24		75		76,841
									1,149,466

See Notes to Financial Statements.

26

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Commercial Services    0.4%
Ahern Rentals, Inc., Sec’d. Notes, 144A		7.375	%		05/15/23		175	$	160,125
Laureate Education, Inc., Gtd. Notes, 144A(a)		8.250			05/01/25		955		1,027,819
RR Donnelley & Sons Co., Sr. Unsec’d. Notes(a)		6.500			11/15/23		61		58,560
United Rentals North America, Inc.,
Gtd. Notes		4.875			01/15/28		350		351,750
Gtd. Notes		5.500			05/15/27		150		160,500
Gtd. Notes		5.875			09/15/26		200		218,000
									1,976,754
Computers    0.4%
Dell International LLC/EMC Corp.,
Gtd. Notes, 144A		5.875			06/15/21		100		104,728
Gtd. Notes, 144A		7.125			06/15/24		100		110,375
Exela Intermediate LLC/Exela Finance, Inc., Sr. Sec’d. Notes, 144A		10.000			07/15/23		370		354,275
NCR Corp., Gtd. Notes		6.375			12/15/23		100		106,506
West Corp., Gtd. Notes, 144A(a)		8.500			10/15/25		370		359,362
Western Digital Corp., Gtd. Notes		10.500			04/01/24		660		774,510
									1,809,756
Distribution/Wholesale    0.1%
Beacon Roofing Supply, Inc., Gtd. Notes		6.375			10/01/23		125		134,375
Global Partners LP/GLP Finance Corp.,
Gtd. Notes		6.250			07/15/22		50		51,125
Gtd. Notes		7.000			06/15/23		350		355,250
H&E Equipment Services, Inc., Gtd. Notes, 144A		5.625			09/01/25		100		105,625
									646,375
Diversified Financial Services    0.3%
Ally Financial, Inc., Gtd. Notes		8.000			03/15/20		100		112,375
FBM Finance, Inc., Sr. Sec’d. Notes, 144A		8.250			08/15/21		100		106,375
LPL Holdings, Inc., Gtd. Notes, 144A		5.750			09/15/25		250		260,000
Navient Corp.,
Sr. Unsec’d. Notes		5.875			10/25/24		200		203,000
Sr. Unsec’d. Notes, MTN		6.125			03/25/24		25		25,656
Sr. Unsec’d. Notes		6.625			07/26/21		50		53,562
Sr. Unsec’d. Notes		7.250			09/25/23		75		81,234
Sr. Unsec’d. Notes, MTN		8.000			03/25/20		100		110,250
OneMain Financial Holdings LLC, Gtd. Notes, 144A		6.750			12/15/19		25		25,938
Springleaf Finance Corp., Gtd. Notes		6.000			06/01/20		50		52,438
VFH Parent LLC/Orchestra Co.-Issuer, Inc., Sec’d. Notes, 144A		6.750			06/15/22		150		155,970
									1,186,798

See Notes to Financial Statements.

Prudential Income Builder Fund 27

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Diversified Machinery    0.1%
ATS Automation Tooling Systems, Inc. (Canada), Gtd. Notes, 144A		6.500	%		06/15/23		275	$	288,062
Cleaver-Brooks, Inc., Sr. Sec’d. Notes, 144A		8.750			12/15/19		25		25,594
Cloud Crane LLC, Sec’d. Notes, 144A		10.125			08/01/24		275		310,750
									624,406
Electric    1.4%
AES Corp.,
Sr. Unsec’d. Notes		5.500			04/15/25		150		158,625
Sr. Unsec’d. Notes		7.375			07/01/21		175		199,062
Calpine Corp.,
Sr. Unsec’d. Notes(a)		5.375			01/15/23		550		534,187
Sr. Unsec’d. Notes		5.500			02/01/24		150		143,625
Sr. Unsec’d. Notes(a)		5.750			01/15/25		300		285,000
Comision Federal de Electricidad (Mexico), Sr. Unsec’d. Notes		5.750			02/14/42		200		209,250
DPL, Inc.,
Sr. Unsec’d. Notes		6.750			10/01/19		250		263,125
Sr. Unsec’d. Notes		7.250			10/15/21		175		193,200
Dynegy, Inc.,
Gtd. Notes		5.875			06/01/23		300		309,750
Gtd. Notes(a)		7.625			11/01/24		1,025		1,119,812
Gtd. Notes		8.034			02/02/24		325		344,500
Gtd. Notes, 144A		8.000			01/15/25		25		27,313
Gtd. Notes, 144A		8.125			01/30/26		300		333,000
Eskom Holdings SOC Ltd. (South Africa),
Sr. Unsec’d. Notes		5.750			01/26/21		400		404,000
Sr. Unsec’d. Notes, EMTN		6.750			08/06/23		200		204,500
GenOn Energy, Inc.,
Sr. Unsec’d. Notes(d)		7.875			06/15/17		400		286,000
Sr. Unsec’d. Notes(d)		9.875			10/15/20		275		193,875
Listrindo Capital BV (Indonesia), Gtd. Notes, 144A		4.950			09/14/26		200		202,500
Majapahit Holding BV (Indonesia), Gtd. Notes		7.875			06/29/37		100		135,630
NRG Energy, Inc.,
Gtd. Notes		6.250			05/01/24		244		259,250
Gtd. Notes		6.625			03/15/23		217		224,595
Gtd. Notes		7.250			05/15/26		150		162,563
NRG REMA LLC, Series C, Pass-Through Certificates		9.681			07/02/26		225		159,750
									6,353,112
Electrical Components & Equipment    0.0%
Belden, Inc., Gtd. Notes, 144A		5.250			07/15/24		75		78,000

See Notes to Financial Statements.

28

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Engineering & Construction    0.2%
AECOM,
Gtd. Notes		5.125	%		03/15/27		125	$	128,594
Gtd. Notes		5.875			10/15/24		225		248,287
Delhi International Airport Ltd. (India), Sr. Sec’d. Notes, 144A		6.125			10/31/26		200		215,000
Mexico City Airport Trust (Mexico), Sr. Sec’d. Notes, 144A		4.250			10/31/26		200		203,200
Odebrecht Finance Ltd. (Brazil), Gtd. Notes		7.125			06/26/42		200		75,500
									870,581
Entertainment    0.9%
AMC Entertainment Holdings, Inc.,
Gtd. Notes(a)		5.750			06/15/25		300		291,750
Gtd. Notes(a)		5.875			11/15/26		150		146,438
Carmike Cinemas, Inc., Sec’d. Notes, 144A		6.000			06/15/23		125		132,500
Cinemark USA, Inc., Gtd. Notes		4.875			06/01/23		350		356,562
Eldorado Resorts, Inc.,
Gtd. Notes		6.000			04/01/25		50		52,750
Gtd. Notes		7.000			08/01/23		200		216,000
GLP Capital LP/GLP Financing II, Inc.,
Gtd. Notes		5.375			11/01/23		75		81,563
Gtd. Notes		5.375			04/15/26		75		81,188
International Game Technology PLC, Sr. Sec’d. Notes, 144A		6.500			02/15/25		400		449,000
Jacobs Entertainment, Inc., Sec’d. Notes, 144A		7.875			02/01/24		75		81,000
National CineMedia LLC,
Sr. Sec’d. Notes		6.000			04/15/22		100		102,000
Sr. Unsec’d. Notes		5.750			08/15/26		325		299,812
Penn National Gaming, Inc., Sr. Unsec’d. Notes, 144A		5.625			01/15/27		150		155,250
Pinnacle Entertainment, Inc., Sr. Unsec’d. Notes		5.625			05/01/24		350		361,375
Regal Entertainment Group, Sr. Unsec’d. Notes		5.750			06/15/23		75		77,906
Scientific Games International, Inc.,
Gtd. Notes		6.625			05/15/21		800		827,000
Gtd. Notes		10.000			12/01/22		175		193,581
Sr. Sec’d. Notes, 144A		7.000			01/01/22		150		158,625
									4,064,300
Environmental Control    0.0%
Advanced Disposal Services, Inc., Gtd. Notes, 144A		5.625			11/15/24		125		130,000

See Notes to Financial Statements.

Prudential Income Builder Fund 29

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Foods    0.6%
Albertsons Cos. LLC/Safeway, Inc., Gtd. Notes		5.750	%		03/15/25		400	$	352,000
ESAL GmbH (Brazil), Gtd. Notes, 144A		6.250			02/05/23		200		192,500
Hearthside Group Holdings LLC/Hearthside Finance Co., Gtd. Notes, 144A		6.500			05/01/22		175		178,938
Ingles Markets, Inc., Sr. Unsec’d. Notes		5.750			06/15/23		210		206,325
JBS USA LUX SA/JBS USA Finance, Inc. (Brazil),
Gtd. Notes, 144A		5.750			06/15/25		250		242,500
Gtd. Notes, 144A		5.875			07/15/24		250		245,625
Gtd. Notes, 144A		7.250			06/01/21		350		356,818
Pilgrim’s Pride Corp.,
Gtd. Notes, 144A		5.750			03/15/25		175		185,281
Sr. Unsec’d. Notes, 144A		5.875			09/30/27		125		130,000
Shearer’s Foods LLC/Chip Finance Corp., Sr. Sec’d. Notes, 144A		9.000			11/01/19		150		153,750
SUPERVALU, Inc., Sr. Unsec’d. Notes(a)		7.750			11/15/22		300		284,062
									2,527,799
Forest Products & Paper    0.0%
Mercer International, Inc. (Canada), Sr. Unsec’d. Notes		6.500			02/01/24		25		26,438
Gas    0.1%
AmeriGas Partners LP/AmeriGas Finance Corp.,
Sr. Unsec’d. Notes		5.625			05/20/24		75		79,031
Sr. Unsec’d. Notes		5.875			08/20/26		225		234,000
									313,031
Hand/Machine Tools    0.0%
Apex Tool Group LLC, Gtd. Notes, 144A		7.000			02/01/21		100		94,750
Healthcare-Products    0.2%
Avantor, Inc., Sr. Sec’d. Notes, 144A		6.000			10/01/24		50		51,000
Greatbatch Ltd., Gtd. Notes, 144A		9.125			11/01/23		275		297,688
Mallinckrodt International Finance SA, Gtd. Notes(a)		4.750			04/15/23		450		379,125
									727,813
Healthcare-Services    1.2%
Acadia Healthcare Co., Inc.,
Gtd. Notes		5.625			02/15/23		318		326,586
Gtd. Notes		6.500			03/01/24		50		52,688

See Notes to Financial Statements.

30

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Healthcare-Services (cont’d.)
CHS/Community Health Systems, Inc.,
Gtd. Notes(a)		6.875	%		02/01/22		1,175	$	850,406
Gtd. Notes(a)		7.125			07/15/20		225		195,188
Sr. Sec’d. Notes		6.250			03/31/23		225		216,563
HCA, Inc., Gtd. Notes		5.375			02/01/25		1,070		1,103,437
HealthSouth Corp., Gtd. Notes		5.125			03/15/23		25		25,500
Kindred Healthcare, Inc.,
Gtd. Notes		8.000			01/15/20		320		323,200
Gtd. Notes		8.750			01/15/23		25		24,375
Select Medical Corp., Gtd. Notes		6.375			06/01/21		375		385,781
SP Finco LLC, Gtd. Notes, 144A(a)		6.750			07/01/25		100		91,250
Surgery Center Holdings, Inc., Gtd. Notes, 144A(a)		8.875			04/15/21		100		102,250
Tenet Healthcare Corp.,
Sr. Sec’d. Notes		4.750			06/01/20		150		153,750
Sr. Unsec’d. Notes		6.750			02/01/20		250		254,375
Sr. Unsec’d. Notes(a)		6.750			06/15/23		475		445,906
Sr. Unsec’d. Notes(a)		8.125			04/01/22		525		527,625
Sr. Unsec’d. Notes, 144A(a)		7.000			08/01/25		325		297,781
									5,376,661
Home Builders    0.8%
Ashton Woods USA LLC/Ashton Woods Finance Co., Sr. Unsec’d. Notes, 144A		6.750			08/01/25		125		123,750
AV Homes, Inc., Gtd. Notes		6.625			05/15/22		75		77,884
Beazer Homes USA, Inc.,
Gtd. Notes		6.750			03/15/25		100		105,780
Gtd. Notes		7.250			02/01/23		5		5,219
Gtd. Notes		8.750			03/15/22		100		111,120
Brookfield Residential Properties, Inc. (Canada),
Gtd. Notes, 144A		6.375			05/15/25		150		157,125
Gtd. Notes, 144A		6.500			12/15/20		125		127,656
CalAtlantic Group, Inc.,
Gtd. Notes		5.250			06/01/26		75		79,875
Gtd. Notes		5.375			10/01/22		25		27,250
KB Home,
Gtd. Notes		7.500			09/15/22		100		115,750
Gtd. Notes		7.625			05/15/23		125		144,062
Lennar Corp.,
Gtd. Notes		4.750			05/30/25		185		192,862
Gtd. Notes		4.875			12/15/23		65		68,738

See Notes to Financial Statements.

Prudential Income Builder Fund 31

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Home Builders (cont’d.)
M/I Homes, Inc.,
Gtd. Notes		5.625	%		08/01/25		75	$	76,219
Gtd. Notes		6.750			01/15/21		75		78,000
Mattamy Group Corp. (Canada),
Sr. Unsec’d. Notes, 144A		6.500			10/01/25		100		104,250
Sr. Unsec’d. Notes, 144A		6.875			12/15/23		225		236,250
Meritage Homes Corp.,
Gtd. Notes		5.125			06/06/27		175		176,969
Gtd. Notes		6.000			06/01/25		50		53,750
Gtd. Notes		7.000			04/01/22		50		57,000
New Home Co., Inc. (The), Gtd. Notes		7.250			04/01/22		50		52,250
PulteGroup, Inc.,
Gtd. Notes		5.000			01/15/27		125		131,250
Gtd. Notes		5.500			03/01/26		275		301,469
Shea Homes LP/Shea Homes Funding Corp.,
Gtd. Notes, 144A		5.875			04/01/23		75		77,812
Gtd. Notes, 144A		6.125			04/01/25		150		156,000
Taylor Morrison Communities, Inc./Taylor Morrison Holdings II, Inc., Gtd. Notes, 144A		5.875			04/15/23		425		455,013
William Lyon Homes, Inc.,
Gtd. Notes		5.875			01/31/25		225		229,500
Gtd. Notes		7.000			08/15/22		150		155,625
									3,678,428
Home Furnishings    0.0%
Tempur Sealy International, Inc., Gtd. Notes		5.500			06/15/26		200		206,000
Housewares    0.0%
Scotts Miracle-Gro Co. (The), Gtd. Notes		6.000			10/15/23		50		53,500
Internet    0.0%
Zayo Group LLC/Zayo Capital, Inc., Gtd. Notes, 144A		5.750			01/15/27		125		131,719
Iron/Steel    0.1%
Cleveland-Cliffs, Inc., Gtd. Notes, 144A(a)		5.750			03/01/25		205		198,594
Signode Industrial Group Lux SA/Signode Industrial Group US, Inc., Gtd. Notes, 144A		6.375			05/01/22		350		363,562
									562,156

See Notes to Financial Statements.

32

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Leisure Time    0.1%
Silversea Cruise Finance Ltd., Sr. Sec’d. Notes, 144A		7.250	%		02/01/25		100	$	107,250
Viking Cruises Ltd., Sr. Unsec’d. Notes, 144A		6.250			05/15/25		150		155,250
									262,500
Lodging    0.3%
Boyd Gaming Corp., Gtd. Notes		6.875			05/15/23		225		241,594
Caesars Entertainment Resort Properties LLC/Caesars Entertainment Resort Properties, Sr. Sec’d. Notes		8.000			10/01/20		325		332,312
CRC Escrow Issuer LLC/CRC Finco, Inc., Gtd. Notes, 144A		5.250			10/15/25		200		201,310
Interval Acquisition Corp., Gtd. Notes		5.625			04/15/23		75		78,375
Jack Ohio Finance LLC/Jack Ohio Finance 1 Corp.,
Sec’d. Notes, 144A		10.250			11/15/22		100		110,000
Sr. Sec’d. Notes, 144A		6.750			11/15/21		200		213,500
MGM Resorts International,
Gtd. Notes		6.000			03/15/23		25		27,410
Gtd. Notes		6.625			12/15/21		200		223,500
Gtd. Notes		6.750			10/01/20		50		55,000
									1,483,001
Media    2.1%
Block Communications, Inc., Sr. Unsec’d. Notes, 144A		6.875			02/15/25		100		108,000
Cablevision SA (Argentina), Sr. Unsec’d. Notes		6.500			06/15/21		150		160,530
CCO Holdings LLC/CCO Holdings Capital Corp.,
Sr. Unsec’d. Notes		5.750			01/15/24		275		285,656
Sr. Unsec’d. Notes, 144A		5.000			02/01/28		500		496,250
Sr. Unsec’d. Notes, 144A		5.375			05/01/25		50		51,875
Sr. Unsec’d. Notes, 144A		5.500			05/01/26		100		102,500
Sr. Unsec’d. Notes, 144A		5.875			05/01/27		425		445,060
Cequel Communications Holdings I LLC/Cequel Capital Corp.,
Sr. Unsec’d. Notes, 144A		5.125			12/15/21		305		310,337
Sr. Unsec’d. Notes, 144A		5.125			12/15/21		425		432,437
Sr. Unsec’d. Notes, 144A		6.375			09/15/20		474		483,537
Sr. Unsec’d. Notes, 144A		7.750			07/15/25		600		655,500
Clear Channel Worldwide Holdings, Inc.,
Series A, Gtd. Notes		6.500			11/15/22		87		89,828
Series A, Gtd. Notes		7.625			03/15/20		405		402,975
Series B, Gtd. Notes		7.625			03/15/20		565		564,294
CSC Holdings LLC, Sr. Unsec’d. Notes		7.875			02/15/18		350		355,292

See Notes to Financial Statements.

Prudential Income Builder Fund 33

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Media (cont’d.)
DISH DBS Corp.,
Gtd. Notes		6.750	%		06/01/21		200	$	210,000
Gtd. Notes		7.750			07/01/26		650		710,937
Gray Television, Inc., Gtd. Notes, 144A		5.875			07/15/26		225		230,625
Mediacom Broadband LLC/Mediacom Broadband Corp., Sr. Unsec’d. Notes		6.375			04/01/23		355		369,200
Midcontinent Communications/Midcontinent Finance Corp., Gtd. Notes, 144A		6.875			08/15/23		180		193,050
Nexstar Broadcasting, Inc., Gtd. Notes, 144A(a)		5.625			08/01/24		175		179,375
Quebecor Media, Inc. (Canada), Sr. Unsec’d. Notes		5.750			01/15/23		250		271,250
SFR Group SA (France), Sr. Sec’d. Notes, 144A		7.375			05/01/26		700		752,500
Sinclair Television Group, Inc.,
Gtd. Notes, 144A(a)		5.125			02/15/27		250		237,812
Gtd. Notes, 144A		5.625			08/01/24		80		81,200
Gtd. Notes, 144A(a)		5.875			03/15/26		50		50,500
TEGNA, Inc., Gtd. Notes(a)		6.375			10/15/23		200		212,250
Tribune Media Co., Gtd. Notes		5.875			07/15/22		175		181,563
Univision Communications, Inc., Sr. Sec’d. Notes, 144A		6.750			09/15/22		128		132,640
UPCB Finance IV Ltd. (Netherlands), Sr. Sec’d. Notes, 144A		5.375			01/15/25		75		76,688
VTR Finance BV (Chile), Sr. Sec’d. Notes, 144A		6.875			01/15/24		200		212,050
Ziggo Bond Finance BV (Netherlands), Sr. Unsec’d. Notes, 144A		6.000			01/15/27		150		152,625
									9,198,336
Metal Fabricate/Hardware    0.1%
Novelis Corp., Gtd. Notes, 144A		5.875			09/30/26		125		128,827
TriMas Corp., Gtd. Notes, 144A		4.875			10/15/25		50		50,563
Zekelman Industries, Inc., Sr. Sec’d. Notes, 144A		9.875			06/15/23		200		226,000
									405,390
Mining    0.9%
Constellium NV (Netherlands), Sr. Unsec’d. Notes, 144A(a)		6.625			03/01/25		250		259,375
Corp. Nacional del Cobre de Chile (Chile), Sr. Unsec’d. Notes		4.875			11/04/44		400		443,098
Eldorado Gold Corp. (Canada), Gtd. Notes, 144A		6.125			12/15/20		140		139,300
First Quantum Minerals Ltd. (Zambia),
Gtd. Notes, 144A		7.250			05/15/22		200		209,000
Gtd. Notes, 144A		7.250			04/01/23		200		211,500

See Notes to Financial Statements.

34

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Mining (cont’d.)
Freeport-McMoRan, Inc.,
Gtd. Notes(a)		3.550	%		03/01/22		150	$	148,500
Gtd. Notes(a)		3.875			03/15/23		420		413,175
Gtd. Notes		6.750			02/01/22		100		104,000
IAMGOLD Corp. (Canada), Gtd. Notes, 144A		7.000			04/15/25		200		210,000
International Wire Group, Inc., Sec’d. Notes, 144A (original cost $239,983; purchased 07/12/16 - 09/26/16)(f)		10.750			08/01/21		250		228,125
Kinross Gold Corp. (Canada), Gtd. Notes		5.950			03/15/24		150		166,500
Lundin Mining Corp. (Canada), Sr. Sec’d. Notes, 144A		7.875			11/01/22		100		108,250
New Gold, Inc. (Canada), Gtd. Notes, 144A(a)		6.250			11/15/22		400		413,000
Nexa Resources SA (Peru), Gtd. Notes, 144A		5.375			05/04/27		210		221,802
Southern Copper Corp. (Peru), Sr. Unsec’d. Notes		6.750			04/16/40		100		125,189
Teck Resources Ltd. (Canada), Gtd. Notes		4.750			01/15/22		720		759,600
									4,160,414
Miscellaneous Manufacturing    0.3%
Amsted Industries, Inc., Gtd. Notes, 144A(a)		5.000			03/15/22		166		171,395
Bombardier, Inc. (Canada), Sr. Unsec’d. Notes, 144A		8.750			12/01/21		625		695,312
EnPro Industries, Inc., Gtd. Notes		5.875			09/15/22		75		78,469
FXI Holdings, Inc., Sr. Sec’d. Notes, 144A		7.875			11/01/24		125		126,719
Gates Global LLC/Gates Global Co., Gtd. Notes, 144A(a)		6.000			07/15/22		75		77,156
									1,149,051
Office/Business Equipment    0.0%
CDW LLC/CDW Finance Corp.,
Gtd. Notes		5.000			09/01/25		50		52,438
Gtd. Notes		5.500			12/01/24		150		166,125
									218,563
Oil & Gas    3.5%
Alta Mesa Holdings LP/Alta Mesa Finance Services Corp., Gtd. Notes, 144A		7.875			12/15/24		225		245,250
Andeavor, Gtd. Notes, 144A		5.125			12/15/26		125		138,496
Antero Resources Corp.,
Gtd. Notes		5.000			03/01/25		275		279,125
Gtd. Notes		5.375			11/01/21		100		102,625
Gtd. Notes		5.625			06/01/23		175		183,313
Ascent Resources Utica Holdings LLC/ARU Finance Corp., Sr. Unsec’d. Notes, 144A		10.000			04/01/22		466		505,610
California Resources Corp., Sec’d. Notes, 144A(a)		8.000			12/15/22		127		83,820

See Notes to Financial Statements.

Prudential Income Builder Fund 35

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Oil & Gas (cont’d.)
Carrizo Oil & Gas, Inc., Gtd. Notes		8.250	%		07/15/25		50	$	53,875
Chesapeake Energy Corp., Gtd. Notes, 144A(a)		8.000			06/15/27		350		337,531
Citgo Holding, Inc., Sr. Sec’d. Notes, 144A		10.750			02/15/20		225		243,000
CrownRock LP/CrownRock Finance, Inc., Sr. Unsec’d. Notes, 144A		5.625			10/15/25		225		228,460
Denbury Resources, Inc., Sec’d. Notes, 144A(a)		9.000			05/15/21		75		73,313
Diamond Offshore Drilling, Inc., Sr. Unsec’d. Notes(a)		7.875			08/15/25		100		107,000
Diamondback Energy, Inc., Gtd. Notes		5.375			05/31/25		225		233,719
Endeavor Energy Resources LP/EER Finance, Inc.,
Sr. Unsec’d. Notes, 144A		7.000			08/15/21		215		222,794
Sr. Unsec’d. Notes, 144A		8.125			09/15/23		275		295,625
Extraction Oil & Gas, Inc., Gtd. Notes, 144A		7.375			05/15/24		180		191,700
Extraction Oil & Gas, Inc./Extraction Finance Corp., Gtd. Notes, 144A		7.875			07/15/21		75		79,500
Gazprom OAO Via Gaz Capital SA (Russia),
Sr. Unsec’d. Notes		6.510			03/07/22		100		110,745
Sr. Unsec’d. Notes, EMTN		8.625			04/28/34		340		458,792
Halcon Resources Corp., Gtd. Notes, 144A(a)		6.750			02/15/25		450		460,125
Hilcorp Energy I LP/Hilcorp Finance Co., Sr. Unsec’d. Notes, 144A		5.750			10/01/25		250		255,937
KazMunayGas National Co. JSC (Kazakhstan),
Sr. Unsec’d. Notes		7.000			05/05/20		100		109,067
Sr. Unsec’d. Notes, EMTN		6.375			04/09/21		600		657,000
Sr. Unsec’d. Notes, 144A		3.875			04/19/22		200		202,294
MEG Energy Corp. (Canada),
Gtd. Notes, 144A		6.375			01/30/23		350		320,250
Gtd. Notes, 144A		7.000			03/31/24		100		90,750
Sec’d. Notes, 144A(a)		6.500			01/15/25		175		174,125
Newfield Exploration Co., Sr. Unsec’d. Notes		5.375			01/01/26		175		185,937
Noble Holding International Ltd. (United Kingdom), Gtd. Notes(a)		7.750			01/15/24		100		89,500
Parsley Energy LLC/Parsley Finance Corp., Gtd. Notes, 144A		5.625			10/15/27		75		77,391
Pertamina Persero PT (Indonesia),
Sr. Unsec’d. Notes, EMTN		4.300			05/20/23		200		211,249
Sr. Unsec’d. Notes		4.875			05/03/22		200		214,836
Sr. Unsec’d. Notes		6.500			05/27/41		200		241,354
Petrobras Global Finance BV (Brazil),
Gtd. Notes		6.750			01/27/41		170		171,275
Gtd. Notes		7.375			01/17/27		550		610,775
Gtd. Notes		8.375			05/23/21		250		288,281
Gtd. Notes		8.750			05/23/26		150		181,688
Gtd. Notes, 144A		5.299			01/27/25		45		45,146

See Notes to Financial Statements.

36

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Oil & Gas (cont’d.)
Petroleos de Venezuela SA (Venezuela),
Gtd. Notes(d)		5.375	%		04/12/27		625	$	180,625
Gtd. Notes		6.000			11/15/26		500		138,750
Gtd. Notes(a)		8.500			11/02/17		213		203,733
Gtd. Notes		9.000			11/17/21		150		66,375
Gtd. Notes		9.750			05/17/35		200		72,000
Sr. Sec’d. Notes, 144A		8.500			10/27/20		500		415,750
Petroleos Mexicanos (Mexico),
Gtd. Notes		5.375			03/13/22		100		106,290
Gtd. Notes		5.500			01/21/21		260		276,250
Gtd. Notes		5.500			06/27/44		350		316,190
Gtd. Notes		6.500			06/02/41		690		698,625
Gtd. Notes, MTN		6.875			08/04/26		80		89,880
Petroleum Co. of Trinidad & Tobago Ltd. (Trinidad And Tobago), Sr. Unsec’d. Notes		6.000			05/08/22		125		126,250
Precision Drilling Corp. (Canada), Gtd. Notes		7.750			12/15/23		150		153,750
Range Resources Corp.,
Gtd. Notes(a)		4.875			05/15/25		150		144,750
Gtd. Notes		5.000			03/15/23		75		74,249
Gtd. Notes		5.875			07/01/22		360		369,000
Rice Energy, Inc.,
Gtd. Notes		6.250			05/01/22		75		78,480
Gtd. Notes		7.250			05/01/23		175		188,380
RSP Permian, Inc., Gtd. Notes, 144A		5.250			01/15/25		175		178,063
Saka Energi Indonesia PT (Indonesia), Sr. Unsec’d. Notes, 144A		4.450			05/05/24		200		203,815
Seven Generations Energy Ltd. (Canada), Gtd. Notes, 144A		5.375			09/30/25		125		126,250
Sinopec Group Overseas Development 2012 Ltd. (China), Gtd. Notes		4.875			05/17/42		400		453,463
Sinopec Group Overseas Development 2015 Ltd. (China), Gtd. Notes		3.250			04/28/25		550		552,431
State Oil Co. of the Azerbaijan Republic (Azerbaijan), Sr. Unsec’d. Notes, EMTN		4.750			03/13/23		400		401,600
Sunoco LP/Sunoco Finance Corp.,
Gtd. Notes		5.500			08/01/20		100		102,750
Gtd. Notes		6.375			04/01/23		361		383,562
Transocean, Inc., Gtd. Notes, 144A		7.500			01/15/26		175		180,250
WPX Energy, Inc.,
Sr. Unsec’d. Notes		7.500			08/01/20		35		37,975
Sr. Unsec’d. Notes		5.250			09/15/24		100		100,375
Sr. Unsec’d. Notes		6.000			01/15/22		115		119,744
Sr. Unsec’d. Notes		8.250			08/01/23		100		112,625

See Notes to Financial Statements.

Prudential Income Builder Fund 37

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Oil & Gas (cont’d.)
YPF SA (Argentina),
Sr. Unsec’d. Notes		8.500	%		03/23/21		150	$	169,848
Sr. Unsec’d. Notes, 144A		8.500			03/23/21		50		56,616
									15,639,967
Packaging & Containers    0.4%
ARD Finance SA (Luxembourg), Sr. Sec’d. Notes, Cash coupon 7.125% or PIK 7.875%(a)		7.125			09/15/23		200		213,000
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. (Ireland), Gtd. Notes, 144A		7.250			05/15/24		450		494,438
Coveris Holdings SA (Luxembourg), Gtd. Notes, 144A(a)		7.875			11/01/19		400		390,000
Owens-Brockway Glass Container, Inc., Gtd. Notes, 144A		6.375			08/15/25		50		56,500
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC (New Zealand), Gtd. Notes, 144A(a)		7.000			07/15/24		350		373,625
Sealed Air Corp., Gtd. Notes, 144A		4.875			12/01/22		25		26,500
									1,554,063
Pharmaceuticals    0.6%
Endo Dac/Endo Finance LLC/Endo Finco, Inc.,
Gtd. Notes, 144A		6.000			07/15/23		400		324,000
Gtd. Notes, 144A		6.000			02/01/25		200		159,000
Endo Finance LLC/Endo Finco, Inc., Gtd. Notes, 144A		5.375			01/15/23		200		161,000
Horizon Pharma, Inc., Gtd. Notes		6.625			05/01/23		200		197,000
Valeant Pharmaceuticals International, Inc.,
Gtd. Notes, 144A		5.375			03/15/20		225		221,344
Gtd. Notes, 144A		5.500			03/01/23		25		21,000
Gtd. Notes, 144A(a)		6.125			04/15/25		375		315,000
Gtd. Notes, 144A		7.500			07/15/21		650		639,437
Sr. Sec’d. Notes, 144A		6.500			03/15/22		75		79,500
Vizient, Inc., Sr. Unsec’d. Notes, 144A		10.375			03/01/24		300		342,000
									2,459,281
Pipelines    0.6%
Andeavor Logistics LP/Tesoro Logistics Finance Corp., Gtd. Notes		6.375			05/01/24		125		136,875
Antero Midstream Partners LP/Antero Midstream Finance Corp., Gtd. Notes		5.375			09/15/24		50		52,000
DCP Midstream Operating LP, Gtd. Notes		5.600			04/01/44		25		23,875
Energy Transfer Equity LP, Sr. Sec’d. Notes		7.500			10/15/20		75		84,375

See Notes to Financial Statements.

38

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Pipelines (cont’d.)
Fermaca Enterprises S de RL de CV (Mexico), Sr. Sec’d. Notes, 144A		6.375	%		03/30/38		232	$	252,880
Genesis Energy LP/Genesis Energy Finance Corp., Gtd. Notes		6.750			08/01/22		175		180,687
NGPL PipeCo LLC,
Sr. Unsec’d. Notes, 144A		4.875			08/15/27		125		129,375
Sr. Unsec’d. Notes, 144A		7.768			12/15/37		175		218,312
Rockies Express Pipeline LLC,
Sr. Unsec’d. Notes, 144A		5.625			04/15/20		75		79,500
Sr. Unsec’d. Notes, 144A		6.000			01/15/19		150		155,250
Sr. Unsec’d. Notes, 144A		6.875			04/15/40		275		306,625
Southern Gas Corridor CJSC (Azerbaijan), Gov’t. Gtd. Notes, 144A		6.875			03/24/26		250		282,510
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.,
Gtd. Notes, 144A		5.500			09/15/24		125		129,219
Gtd. Notes, 144A		5.500			01/15/28		275		282,219
Targa Resources Partners LP/Targa Resources Partners Finance Corp.,
Gtd. Notes		5.125			02/01/25		125		128,750
Gtd. Notes		6.750			03/15/24		100		107,750
									2,550,202
Real Estate    0.1%
Crescent Communities LLC/Crescent Venture, Inc., Sr. Sec’d. Notes, 144A		8.875			10/15/21		238		252,875
Greystar Real Estate Partners LLC, Sr. Sec’d. Notes, 144A		8.250			12/01/22		100		106,540
Realogy Group LLC/Realogy Co-Issuer Corp., Gtd. Notes, 144A		4.875			06/01/23		100		102,970
									462,385
Real Estate Investment Trusts (REITs)    0.2%
FelCor Lodging LP, Gtd. Notes		6.000			06/01/25		100		107,750
MGM Growth Properties Operating Partnership LP/MGP Finance Co.-Issuer, Inc.,
Gtd. Notes		4.500			09/01/26		125		125,469
Sr. Unsec’d. Notes, 144A		4.500			01/15/28		150		149,625
MPT Operating Partnership LP/MPT Finance Corp.,
Gtd. Notes		5.000			10/15/27		125		128,437
Gtd. Notes		5.250			08/01/26		75		78,089
Gtd. Notes		6.375			03/01/24		75		81,094

See Notes to Financial Statements.

Prudential Income Builder Fund 39

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Real Estate Investment Trusts (REITs) (cont’d.)
RHP Hotel Properties LP/RHP Finance Corp., Gtd. Notes		5.000	%		04/15/21		200	$	205,000
Sabra Health Care LP/Sabra Capital Corp.,
Gtd. Notes		5.375			06/01/23		50		51,625
Gtd. Notes		5.500			02/01/21		100		103,125
									1,030,214
Retail    1.2%
Brinker International, Inc., Gtd. Notes, 144A		5.000			10/01/24		75		75,000
Caleres, Inc., Gtd. Notes		6.250			08/15/23		125		131,563
CEC Entertainment, Inc., Gtd. Notes		8.000			02/15/22		200		206,750
Claire’s Stores, Inc., Sr. Sec’d. Notes, 144A		9.000			03/15/19		25		15,313
Cumberland Farms, Inc., Sr. Unsec’d. Notes, 144A		6.750			05/01/25		50		53,125
Ferrellgas LP/Ferrellgas Finance Corp., Gtd. Notes		6.750			06/15/23		50		46,500
Ferrellgas Partners LP/Ferrellgas Partners Finance Corp.,
Sr. Unsec’d. Notes		8.625			06/15/20		200		178,500
Sr. Unsec’d. Notes(a)		8.625			06/15/20		375		334,687
Golden Nugget, Inc.,
Gtd. Notes, 144A		8.750			10/01/25		375		385,312
Sr. Unsec’d. Notes, 144A		6.750			10/15/24		275		279,812
Hot Topic, Inc., Sr. Sec’d. Notes, 144A		9.250			06/15/21		275		228,250
L Brands, Inc.,
Gtd. Notes		6.750			07/01/36		350		342,125
Gtd. Notes		6.875			11/01/35		300		297,750
Men’s Wearhouse, Inc. (The), Gtd. Notes		7.000			07/01/22		275		261,250
Neiman Marcus Group Ltd. LLC, Gtd. Notes, 144A		8.000			10/15/21		327		192,930
PetSmart, Inc.,
Gtd. Notes, 144A(a)		7.125			03/15/23		675		514,687
Gtd. Notes, 144A(a)		8.875			06/01/25		225		177,188
Sr. Sec’d. Notes, 144A		5.875			06/01/25		225		196,313
PF Chang’s China Bistro, Inc., Gtd. Notes, 144A		10.250			06/30/20		200		188,000
Rite Aid Corp., Gtd. Notes, 144A		6.125			04/01/23		650		604,500
Ruby Tuesday, Inc., Gtd. Notes		7.625			05/15/20		75		76,875
Sally Holdings LLC/Sally Capital, Inc., Gtd. Notes(a)		5.625			12/01/25		300		297,750
Tops Holding LLC/Tops Markets II Corp., Sr. Sec’d. Notes, 144A		8.000			06/15/22		175		105,000
									5,189,180
Semiconductors    0.1%
NXP BV/NXP Funding LLC (Netherlands), Gtd. Notes, 144A		4.625			06/15/22		200		214,250
Sensata Technologies BV, Gtd. Notes, 144A		5.000			10/01/25		325		344,500
									558,750

See Notes to Financial Statements.

40

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Software    1.1%
BMC Software Finance, Inc., Sr. Unsec’d. Notes, 144A		8.125	%		07/15/21		1,880	$	1,924,650
BMC Software, Inc., Sr. Unsec’d. Notes		7.250			06/01/18		68		69,360
Boxer Parent Co., Inc., Sr. Unsec’d. Notes, Cash coupon 9.000% or PIK 9.750%, 144A		9.000			10/15/19		100		100,188
Change Healthcare Holdings LLC/Change Healthcare Finance, Inc., Sr. Unsec’d. Notes, 144A		5.750			03/01/25		120		122,700
First Data Corp., Gtd. Notes, 144A		7.000			12/01/23		1,225		1,310,774
Infor Software Parent LLC/Infor Software Parent, Inc., Gtd. Notes, Cash coupon 7.125% or PIK 7.875%, 144A(a)		7.125			05/01/21		590		606,225
Informatica LLC, Sr. Unsec’d. Notes, 144A		7.125			07/15/23		275		279,813
Nuance Communications, Inc., Gtd. Notes, 144A		5.375			08/15/20		48		48,648
Rackspace Hosting, Inc., Gtd. Notes, 144A(a)		8.625			11/15/24		75		78,984
RP Crown Parent LLC, Sr. Sec’d. Notes, 144A		7.375			10/15/24		205		213,200
									4,754,542
Telecommunications    2.1%
Aegis Merger Sub, Inc., Sr. Unsec’d. Notes, 144A		10.250			02/15/23		143		156,585
Bharti Airtel International Netherlands BV (India), Gtd. Notes		5.125			03/11/23		200		214,216
C&W Senior Financing Designated Activity Co. (Ireland), Sr. Unsec’d. Notes, 144A		6.875			09/15/27		200		209,000
CenturyLink, Inc.,
Series G, Sr. Unsec’d. Notes		6.875			01/15/28		75		74,620
Series S, Sr. Unsec’d. Notes		6.450			06/15/21		390		411,493
CommScope Technologies LLC, Gtd. Notes, 144A		6.000			06/15/25		260		274,625
Digicel Group Ltd. (Jamaica), Sr. Unsec’d. Notes, 144A		8.250			09/30/20		200		197,750
Digicel Ltd. (Jamaica),
Gtd. Notes, 144A		6.750			03/01/23		400		394,824
Sr. Unsec’d. Notes		6.000			04/15/21		200		196,732
Frontier Communications Corp.,
Sr. Unsec’d. Notes(a)		6.875			01/15/25		100		74,344
Sr. Unsec’d. Notes		9.250			07/01/21		50		44,625
Sr. Unsec’d. Notes		10.500			09/15/22		225		196,313
Sr. Unsec’d. Notes		11.000			09/15/25		1,195		1,014,256
GTT Communications, Inc., Gtd. Notes, 144A		7.875			12/31/24		310		330,537
Intelsat Jackson Holdings SA (Luxembourg),
Gtd. Notes		5.500			08/01/23		475		404,937
Gtd. Notes, 144A		9.750			07/15/25		350		352,187
Level 3 Financing, Inc.,
Gtd. Notes		5.250			03/15/26		270		279,032
Gtd. Notes		5.375			01/15/24		25		25,969

See Notes to Financial Statements.

Prudential Income Builder Fund 41

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Telecommunications (cont’d.)
MTN Mauritius Investment Ltd. (South Africa), Gtd. Notes, 144A		6.500	%		10/13/26		200	$	216,000
ORBCOMM, Inc., Sr. Sec’d. Notes, 144A		8.000			04/01/24		340		362,525
Sprint Capital Corp., Gtd. Notes		8.750			03/15/32		700		848,750
Sprint Corp.,
Gtd. Notes		7.250			09/15/21		500		545,000
Gtd. Notes(a)		7.625			02/15/25		640		701,600
T-Mobile USA, Inc., Gtd. Notes		6.625			04/01/23		250		262,500
ViaSat, Inc., Sr. Unsec’d. Notes, 144A		5.625			09/15/25		175		176,969
Wind Acquisition Finance SA (Italy),
Sec’d. Notes, 144A		7.375			04/23/21		315		327,222
Sr. Sec’d. Notes, 144A		6.500			04/30/20		200		206,820
Wind Tre SpA (Italy), Gtd. Notes, 144A		5.000			01/20/26		325		327,109
Xplornet Communications, Inc. (Canada), Sr. Unsec’d. Notes, Cash coupon 9.625% or PIK 10.625%, 144A		9.625			06/01/22		345		372,492
									9,199,032
Textiles    0.1%
Springs Industries, Inc., Sr. Sec’d. Notes		6.250			06/01/21		350		360,500
Transportation    0.2%
Georgian Railway JSC (Georgia), Sr. Unsec’d. Notes		7.750			07/11/22		200		223,254
Hornbeck Offshore Services, Inc.,
Gtd. Notes		5.000			03/01/21		25		13,250
Gtd. Notes		5.875			04/01/20		125		82,500
Kazakhstan Temir Zholy Finance BV (Kazakhstan), Gtd. Notes		6.950			07/10/42		200		223,832
XPO Logistics, Inc.,
Gtd. Notes, 144A(a)		6.125			09/01/23		75		78,938
Gtd. Notes, 144A(a)		6.500			06/15/22		375		393,412
									1,015,186
TOTAL CORPORATE BONDS (cost $105,171,773)									107,093,123
FOREIGN GOVERNMENT BONDS    10.7%
Angolan Government International Bond (Angola), Sr. Unsec’d. Notes		9.500			11/12/25		400		436,000
Argentina Bonar Bonds (Argentina), Bonds		8.750			05/07/24		300		350,152
Argentine Bonos del Tesoro (Argentina), Bonds		22.750			03/05/18	ARS	1,199		67,195

See Notes to Financial Statements.

42

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Argentine Republic Government International Bond (Argentina),
Sr. Unsec’d. Notes		2.260	%(t)		12/31/38	EUR	200	$	165,642
Sr. Unsec’d. Notes		2.500	(t)		12/31/38		180		129,330
Sr. Unsec’d. Notes		5.625			01/26/22		150		157,500
Sr. Unsec’d. Notes		7.500			04/22/26		480		542,400
Sr. Unsec’d. Notes		7.820			12/31/33	EUR	550		736,621
Sr. Unsec’d. Notes		8.280			12/31/33		631		736,280
Bahrain Government International Bond (Bahrain),
Sr. Unsec’d. Notes		7.000			10/12/28		200		205,512
Sr. Unsec’d. Notes, 144A		7.500			09/20/47		200		194,819
Brazil Loan Trust 1 (Brazil), Gov’t. Gtd. Notes		5.477			07/24/23		115		119,982
Brazil Minas SPE via State of Minas Gerais (Brazil), Gov’t. Gtd. Notes		5.333			02/15/28		500		508,750
Brazilian Government International Bond (Brazil),
Sr. Unsec’d. Notes		2.625			01/05/23		200		193,300
Sr. Unsec’d. Notes		5.625			01/07/41		150		152,025
Sr. Unsec’d. Notes		7.125			01/20/37		100		119,450
Sr. Unsec’d. Notes		8.250			01/20/34		348		452,226
City of Buenos Aires Argentina (Argentina), Sr. Unsec’d. Notes, EMTN		8.950			02/19/21		200		222,760
Colombia Government International Bond (Colombia),
Sr. Unsec’d. Notes		6.125			01/18/41		355		417,835
Sr. Unsec’d. Notes		7.375			09/18/37		540		712,800
Sr. Unsec’d. Notes		10.375			01/28/33		200		311,000
Congolese International Bond (Congo), Sr. Unsec’d. Notes		6.000			06/30/29		163		120,436
Costa Rica Government International Bond (Costa Rica),
Sr. Unsec’d. Notes		4.250			01/26/23		400		395,500
Sr. Unsec’d. Notes		7.000			04/04/44		200		208,500
Sr. Unsec’d. Notes		7.158			03/12/45		200		212,500
Croatia Government International Bond (Croatia),
Sr. Unsec’d. Notes		5.500			04/04/23		250		276,011
Sr. Unsec’d. Notes		6.375			03/24/21		500		551,875
Dominican Republic International Bond (Dominican Republic),
Sr. Unsec’d. Notes		5.875			04/18/24		300		326,625
Sr. Unsec’d. Notes		6.850			01/27/45		200		223,000
Sr. Unsec’d. Notes		7.450			04/30/44		550		653,125
Sr. Unsec’d. Notes		7.500			05/06/21		245		271,031

See Notes to Financial Statements.

Prudential Income Builder Fund 43

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Ecuador Government International Bond (Ecuador),
Sr. Unsec’d. Notes		7.950	%		06/20/24		200	$	202,000
Sr. Unsec’d. Notes, 144A		8.750			06/02/23		265		277,985
Sr. Unsec’d. Notes, 144A		8.875			10/23/27		200		203,984
Sr. Unsec’d. Notes, 144A		9.650			12/13/26		200		217,000
Sr. Unsec’d. Notes		10.500			03/24/20		400		434,000
Sr. Unsec’d. Notes		10.750			03/28/22		400		452,000
Egypt Government International Bond (Egypt),
Sr. Unsec’d. Notes		5.875			06/11/25		200		204,112
Sr. Unsec’d. Notes		6.875			04/30/40		100		99,433
Sr. Unsec’d. Notes, MTN		7.500			01/31/27		400		443,436
Sr. Unsec’d. Notes, 144A, MTN		8.500			01/31/47		455		514,638
Sr. Unsec’d. Notes, MTN		8.500			01/31/47		200		226,214
El Salvador Government International Bond (El Salvador),
Sr. Unsec’d. Notes		6.375			01/18/27		200		199,000
Sr. Unsec’d. Notes		7.375			12/01/19		205		212,688
Sr. Unsec’d. Notes		7.625			02/01/41		300		312,750
Sr. Unsec’d. Notes		7.750			01/24/23		300		323,250
Sr. Unsec’d. Notes		8.250			04/10/32		280		311,500
Sr. Unsec’d. Notes, 144A		8.625			02/28/29		50		56,625
Ethiopia International Bond (Ethiopia), Sr. Unsec’d. Notes		6.625			12/11/24		200		206,000
Export Credit Bank of Turkey (Turkey), Sr. Unsec’d. Notes, 144A		5.000			09/23/21		200		202,090
Export-Import Bank of India (India), Sr. Unsec’d. Notes, 144A		3.375			08/05/26		200		198,212
Gabon Government International Bond (Gabon),
Bonds		6.375			12/12/24		200		196,032
Sr. Unsec’d. Notes		6.950			06/16/25		400		400,489
Ghana Government International Bond (Ghana),
Sr. Unsec’d. Notes		7.875			08/07/23		300		324,390
Sr. Unsec’d. Notes		9.250			09/15/22		200		225,760
Guatemala Government Bond (Guatemala), Sr. Unsec’d. Notes		5.750			06/06/22		200		217,162
Hellenic Republic Government Bond (Greece),
Bonds(a)		3.000	(t)		02/24/38	EUR	240		207,779
Sr. Unsec’d. Notes, 144A		4.375			08/01/22	EUR	80		93,024
Honduras Government International Bond (Honduras),
Sr. Unsec’d. Notes		7.500			03/15/24		200		227,000
Sr. Unsec’d. Notes		8.750			12/16/20		200		227,376

See Notes to Financial Statements.

44

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Hungary Government International Bond (Hungary),
Sr. Unsec’d. Notes		5.375	%		02/21/23		218	$	244,160
Sr. Unsec’d. Notes		5.375			03/25/24		222		252,350
Sr. Unsec’d. Notes		5.750			11/22/23		200		229,881
Sr. Unsec’d. Notes		7.625			03/29/41		372		573,624
Indonesia Government International Bond (Indonesia),
Sr. Unsec’d. Notes, 144A		4.350			01/08/27		200		212,084
Sr. Unsec’d. Notes, MTN		4.750			07/18/47		200		211,671
Sr. Unsec’d. Notes, EMTN		5.125			01/15/45		200		221,934
Sr. Unsec’d. Notes, EMTN		5.250			01/17/42		200		223,949
Sr. Unsec’d. Notes, 144A, MTN		5.950			01/08/46		200		247,352
Sr. Unsec’d. Notes		7.750			01/17/38		200		285,671
Sr. Unsec’d. Notes		8.500			10/12/35		200		299,243
Iraq International Bond (Iraq),
Sr. Unsec’d. Notes, 144A		6.752			03/09/23		200		200,385
Unsec’d. Notes		5.800			01/15/28		750		705,897
Ivory Coast Government International Bond (Cote D’lvoire),
Sr. Unsec’d. Notes, 144A		5.125			06/15/25	EUR	165		203,017
Sr. Unsec’d. Notes		6.375			03/03/28		600		622,978
Jamaica Government International Bond (Jamaica),
Sr. Unsec’d. Notes		7.625			07/09/25		200		241,468
Sr. Unsec’d. Notes		7.875			07/28/45		200		248,000
Sr. Unsec’d. Notes		8.000			03/15/39		100		124,750
Sr. Unsec’d. Notes		9.250			10/17/25		200		264,866
Jordan Government International Bond (Jordan),
Sr. Unsec’d. Notes		5.750			01/31/27		200		200,000
Sr. Unsec’d. Notes, 144A		7.375			10/10/47		200		209,300
KazAgro National Management Holding JSC (Kazakhstan), Sr. Unsec’d. Notes, EMTN		4.625			05/24/23		200		202,052
Kazakhstan Government International Bond (Kazakhstan), Sr. Unsec’d. Notes, EMTN		6.500			07/21/45		400		500,438
Kenya Government International Bond (Kenya), Sr. Unsec’d. Notes		6.875			06/24/24		400		415,680
Lebanon Government International Bond (Lebanon),
Sr. Unsec’d. Notes		6.000			01/27/23		155		150,803
Sr. Unsec’d. Notes, EMTN		6.100			10/04/22		255		251,969
Sr. Unsec’d. Notes, EMTN		6.250			05/27/22		135		133,952
Sr. Unsec’d. Notes, GMTN		6.250			11/04/24		110		106,053
Sr. Unsec’d. Notes, GMTN		6.375			03/09/20		120		121,872
Sr. Unsec’d. Notes		6.400			05/26/23		325		324,392
Sr. Unsec’d. Notes, GMTN		6.600			11/27/26		120		115,725
Sr. Unsec’d. Notes		6.650			04/22/24		185		182,616

See Notes to Financial Statements.

Prudential Income Builder Fund 45

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Lebanon Government International Bond (Lebanon), (cont’d.)
Sr. Unsec’d. Notes, GMTN		6.650	%		11/03/28		173	$	164,372
Sr. Unsec’d. Notes		6.850			05/25/29		80		76,216
Sr. Unsec’d. Notes		7.250			03/23/37		55		52,381
Sr. Unsec’d. Notes, EMTN		8.250			04/12/21		260		275,593
Malaysia Sukuk Global Bhd (Malaysia), Gov’t. Gtd. Notes, 144A		4.080			04/27/46		250		262,875
Mexican Bonos (Mexico), Series M, Bonds		6.500			06/09/22		MXN 710		36,226
Mexico Government International Bond (Mexico),
Sr. Unsec’d. Notes, MTN		6.050			01/11/40		530		620,630
Sr. Unsec’d. Notes, MTN		6.750			09/27/34		203		263,392
Mongolia Government International Bond (Mongolia),
Sr. Unsec’d. Notes, EMTN		4.125			01/05/18		200		200,200
Sr. Unsec’d. Notes, EMTN		5.125			12/05/22		200		198,760
Sr. Unsec’d. Notes, EMTN		10.875			04/06/21		400		469,693
Morocco Government International Bond (Morocco), Sr. Unsec’d. Notes		4.250			12/11/22		200		209,916
Nigeria Government International Bond (Nigeria),
Sr. Unsec’d. Notes		6.375			07/12/23		200		209,874
Sr. Unsec’d. Notes		6.750			01/28/21		200		212,564
Sr. Unsec’d. Notes		7.875			02/16/32		200		219,696
Oman Government International Bond (Oman),
Sr. Unsec’d. Notes		4.750			06/15/26		400		394,480
Sr. Unsec’d. Notes, 144A		6.500			03/08/47		205		210,984
Sr. Unsec’d. Notes		6.500			03/08/47		200		205,838
Pakistan Government International Bond (Pakistan),
Sr. Unsec’d. Notes		7.250			04/15/19		300		312,477
Sr. Unsec’d. Notes		8.250			04/15/24		200		222,810
Panama Government International Bond (Panama),
Sr. Unsec’d. Notes		4.300			04/29/53		250		256,250
Sr. Unsec’d. Notes		6.700			01/26/36		100		132,000
Sr. Unsec’d. Notes		7.125			01/29/26		335		430,475
Sr. Unsec’d. Notes		9.375			04/01/29		100		150,250
Paraguay Government International Bond (Paraguay), Sr. Unsec’d. Notes		6.100			08/11/44		200		228,500
Perusahaan Penerbit SBSN Indonesia III (Indonesia), Sr. Unsec’d. Notes, 144A		4.325			05/28/25		200		209,300
Peruvian Government International Bond (Peru),
Sr. Unsec’d. Notes		5.625			11/18/50		195		246,090
Sr. Unsec’d. Notes		6.550			03/14/37		655		880,975

See Notes to Financial Statements.

46

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Philippine Government International Bond (Philippines),
Sr. Unsec’d. Notes		3.950	%		01/20/40		100	$	103,243
Sr. Unsec’d. Notes		7.750			01/14/31		460		661,722
Provincia de Buenos Aires (Argentina),
Sr. Unsec’d. Notes		3.000	(t)		05/01/20		EUR 90		104,979
Sr. Unsec’d. Notes		9.125			03/16/24		150		174,750
Sr. Unsec’d. Notes		9.950			06/09/21		150		174,398
Republic of Armenia International Bond (Armenia), Sr. Unsec’d. Notes		6.000			09/30/20		200		210,540
Republic of Azerbaijan International Bond (Azerbaijan), Sr. Unsec’d. Notes		4.750			03/18/24		200		205,718
Republic of Belarus International Bond (Belarus), Sr. Unsec’d. Notes, 144A		6.875			02/28/23		225		239,108
Republic of Cameroon International Bond (Cameroon), Sr. Unsec’d. Notes		9.500			11/19/25		200		237,032
Republic of South Africa Government International Bond (South Africa),
Sr. Unsec’d. Notes		4.665			01/17/24		150		151,979
Sr. Unsec’d. Notes		4.875			04/14/26		400		397,594
Sr. Unsec’d. Notes		5.875			09/16/25		200		213,190
Sr. Unsec’d. Notes		6.250			03/08/41		550		576,994
Romanian Government International Bond (Romania),
Sr. Unsec’d. Notes, EMTN		3.875			10/29/35		EUR 150		188,648
Sr. Unsec’d. Notes, EMTN		6.125			01/22/44		242		306,954
Russian Foreign Bond - Eurobond (Russia),
Sr. Unsec’d. Notes, 144A		4.250			06/23/27		200		203,834
Sr. Unsec’d. Notes		4.750			05/27/26		400		422,224
Sr. Unsec’d. Notes		5.250			06/23/47		400		409,500
Sr. Unsec’d. Notes		5.625			04/04/42		200		220,584
Sr. Unsec’d. Notes		12.750			06/24/28		290		508,291
Senegal Government International Bond (Senegal),
Sr. Unsec’d. Notes		8.750			05/13/21		200		231,428
Unsec’d. Notes, 144A		6.250			05/23/33		205		211,898
Serbia International Bond (Serbia), Sr. Unsec’d. Notes		4.875			02/25/20		600		624,971
Sri Lanka Government International Bond (Sri Lanka),
Sr. Unsec’d. Notes		5.875			07/25/22		210		224,175
Sr. Unsec’d. Notes		6.250			10/04/20		120		128,118
Sr. Unsec’d. Notes		6.250			07/27/21		230		247,825
Sr. Unsec’d. Notes		6.850			11/03/25		400		443,994
Third Pakistan International Sukuk Co. Ltd. (The) (Pakistan), Sr. Unsec’d. Notes, 144A		5.500			10/13/21		200		203,593

See Notes to Financial Statements.

Prudential Income Builder Fund 47

Schedule of Investments (continued)

as of October 31, 2017

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
FOREIGN GOVERNMENT BONDS (Continued)
Turkey Government International Bond (Turkey),
Sr. Unsec’d. Notes		3.250	%		03/23/23		200	$	188,572
Sr. Unsec’d. Notes		4.875			04/16/43		200		172,461
Sr. Unsec’d. Notes		5.625			03/30/21		200		210,814
Sr. Unsec’d. Notes		5.750			03/22/24		200		210,603
Sr. Unsec’d. Notes		5.750			05/11/47		200		190,600
Sr. Unsec’d. Notes		6.000			01/14/41		400		399,898
Sr. Unsec’d. Notes		6.250			09/26/22		300		325,589
Sr. Unsec’d. Notes		6.875			03/17/36		459		505,506
Ukraine Government International Bond (Ukraine),
Sr. Unsec’d. Notes, 144A		4.925	(s)		05/31/40		35		19,958
Sr. Unsec’d. Notes		4.994	(s)		05/31/40		50		28,511
Sr. Unsec’d. Notes, 144A		7.375			09/25/32		325		320,408
Sr. Unsec’d. Notes		7.750			09/01/20		100		106,605
Sr. Unsec’d. Notes, 144A		7.750			09/01/20		106		113,001
Sr. Unsec’d. Notes		7.750			09/01/22		100		106,871
Sr. Unsec’d. Notes, 144A		7.750			09/01/22		104		111,145
Sr. Unsec’d. Notes		7.750			09/01/23		300		318,387
Sr. Unsec’d. Notes		7.750			09/01/24		215		225,362
Sr. Unsec’d. Notes		7.750			09/01/25		600		624,024
Sr. Unsec’d. Notes		7.750			09/01/26		204		210,336
Sr. Unsec’d. Notes		7.750			09/01/27		300		309,023
Ukreximbank Via Biz Finance PLC (Ukraine), Sr. Unsec’d. Notes		9.625			04/27/22		200		216,016
Uruguay Government International Bond (Uruguay),
Sr. Unsec’d. Notes		5.100			06/18/50		255		273,487
Sr. Unsec’d. Notes		7.625			03/21/36		300		423,750
Venezuela Government International Bond (Venezuela),
Sr. Unsec’d. Notes		7.000			03/31/38		620		201,500
Sr. Unsec’d. Notes		7.750			10/13/19		110		51,425
Sr. Unsec’d. Notes		9.000			05/07/23		100		34,250
Sr. Unsec’d. Notes		11.950			08/05/31		300		120,750
Vietnam Government International Bond (Vietnam), Sr. Unsec’d. Notes		4.800			11/19/24		200		214,551
Zambia Government International Bond (Zambia),
Sr. Unsec’d. Notes		8.500			04/14/24		200		214,040
Unsec’d. Notes		5.375			09/20/22		200		191,042
TOTAL FOREIGN GOVERNMENT BONDS (cost $45,797,342)									48,132,829
U.S. TREASURY OBLIGATION    0.1%
U.S. Treasury Notes(k) (cost $302,512)		2.250			11/15/24		300		300,258
TOTAL LONG-TERM INVESTMENTS (cost $409,818,181)									436,104,245

See Notes to Financial Statements.

48

Description	Shares		Value
SHORT-TERM INVESTMENTS    5.9%
AFFILIATED MUTUAL FUNDS    5.9%
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund(b)		9,514,021	$	9,514,021
Prudential Investment Portfolios 2 - Prudential Institutional Money Market Fund (cost $16,867,896; includes $16,848,946 of cash collateral for securities on loan)(b)(w)		16,866,939		16,868,625
TOTAL AFFILIATED MUTUAL FUNDS (cost $26,381,917)				26,382,646
OPTIONS PURCHASED*    0.0%
(cost $101,802)				115,698
TOTAL SHORT-TERM INVESTMENTS (cost $26,483,719)				26,498,344
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN    103.1% (cost $436,301,900)				462,602,589
OPTIONS WRITTEN*    (0.0)%
(premiums received $62,481)				(41,228	)
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN    103.1% (cost $436,239,419)				462,561,361
Liabilities in excess of other assets(z)    (3.1)%				(14,075,482	)
NET ASSETS    100.0%			$	448,485,879

The following abbreviations are used in the annual report:

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

ADR—American Depositary Receipt

CLO—Collateralized Loan Obligation

CVA—Certificate Van Aandelen (Bearer)

CVT—Convertible Security

EMTN—Euro Medium Term Note

ETF—Exchange Traded Fund

GMTN—Global Medium Term Note

MLP—Master Limited Partnership

MTN—Medium Term Note

OTC—Over-the-counter

PIK—Payment-in-Kind

REIT(s)—Real Estate Investment Trust(s)

SPDR—Standard & Poor’s Depository Receipts

ARS—Argentine Peso

AUD—Australian Dollar

BRL—Brazilian Real

CHF—Swiss Franc

CLP—Chilean Peso

See Notes to Financial Statements.

Prudential Income Builder Fund 49

Schedule of Investments (continued)

as of October 31, 2017

CNH—Chinese Renminbi

COP—Colombian Peso

CZK—Czech Koruna

EUR—Euro

HUF—Hungarian Forint

IDR—Indonesian Rupiah

ILS—Israeli Shekel

INR—Indian Rupee

JPY—Japanese Yen

KRW—South Korean Won

MXN—Mexican Peso

PEN—Peruvian Nuevo Sol

PHP—Philippine Peso

PLN—Polish Zloty

RUB—Russian Ruble

SGD—Singapore Dollar

THB—Thai Baht

TRY—Turkish Lira

TWD—New Taiwanese Dollar

USD—United States Dollar

ZAR—South African Rand

* Non-income producing security.

^ Indicates a Level 3 security. The aggregate value of Level 3 securities is $2,096,331 and 0.5% of net assets.

# Principal or notional amount is shown in U.S. dollars unless otherwise stated.

(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $16,437,021; cash collateral of $16,848,946 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b) Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(c) Variable rate instrument. The interest rate shown reflects the rate in effect at October 31, 2017.

(d) Represents issuer in default on interest payments and/or principal repayment, Non-income producing security. Such securities may be post maturity.

(f) Indicates a restricted security; the aggregate original cost of the restricted securities is $239,983. The aggregate value of $228,125 is approximately 0.1% of net assets.

(k) Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(n) Rates shown are the effective yields at purchase date.

(s) Represents zero coupon bond or principal only securities. Rate represents yield to maturity at purchase date.

(t) Represents step coupon bond. Rate shown reflects the rate in effect at October 31, 2017.

(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the underlying funds in which the Fund invests.

See Notes to Financial Statements.

50

(z) Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end with the exception of options which are included in net assets at market value:

OTC Options Purchased:

Description	Call/Put		Counterparty		Expiration Date		Strike Price		Contracts		Notional Amount (000)#		Value
Currency Option EUR vs BRL		Call		Citigroup Global Markets		04/04/18		3.40		—	EUR	400	$	62,416
Currency Option EUR vs ZAR		Call		Goldman Sachs & Co.		04/04/18		15.00		—	EUR	200		29,507
Currency Option USD vs MXN		Call		Citigroup Global Markets		03/23/18		19.25		—		600		23,775
													$	115,698
OTC Options Written:
Description	Call/Put		Counterparty		Expiration Date		Strike Price		Contracts		Notional Amount (000)#		Value
Currency Option EUR vs BRL		Call		Citigroup Global Markets		04/04/18		3.80		—	EUR	400	$	(22,332	)
Currency Option EUR vs ZAR		Call		Goldman Sachs & Co.		04/04/18		17.00		—	EUR	200		(10,753	)
Currency Option USD vs MXN		Call		Citigroup Global Markets		03/23/18		21.25		—		600		(6,320	)
Currency Option EUR vs BRL		Put		Citigroup Global Markets		04/04/18		3.20		—	EUR	400		(86	)
Currency Option EUR vs ZAR		Put		Goldman Sachs & Co.		04/04/18		14.00		—	EUR	200		(334	)
Currency Option USD vs MXN		Put		Citigroup Global Markets		03/23/18		17.75		—		600		(1,403	)
													$	(41,228	)

See Notes to Financial Statements.

Prudential Income Builder Fund 51

Schedule of Investments (continued)

as of October 31, 2017

Futures contracts outstanding at October 31, 2017:

Number of Contracts		Type	Expiration Date		Value at Trade Date		Current Notional Amount		Value / Unrealized Appreciation (Depreciation)
		Long Positions:
	10	2 Year U.S. Treasury Notes		Dec. 2017	$	2,160,844	$	2,153,594	$	(7,250	)
	39	10 Year U.S. Treasury Notes		Dec. 2017		4,892,696		4,872,563		(20,133	)
	6	20 Year U.S. Treasury Bonds		Dec. 2017		929,977		914,813		(15,164	)
	4	30 Year U.S. Ultra Treasury Bonds		Dec. 2017		670,281		659,125		(11,156	)
									$	(53,703	)

Cash of $100,000 and a security with a market value of $120,103 have been segregated with Citigroup Global Markets to cover requirement for open futures contracts at October 31, 2017.

Forward foreign currency exchange contracts outstanding at October 31, 2017:

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts:
Argentine Peso,
Expiring 11/17/17	BNP Paribas	ARS	1,369	$	77,146	$	76,670	$	(476	)
Expiring 11/21/17	Citigroup Global Markets	ARS	2,020		113,876		112,854		(1,022	)
Australian Dollar,
Expiring 01/12/18	Citigroup Global Markets	AUD	109		83,300		83,113		(187	)
Brazilian Real,
Expiring 11/03/17	Citigroup Global Markets	BRL	934		291,539		285,317		(6,222	)
Expiring 11/03/17	Citigroup Global Markets	BRL	299		93,571		91,300		(2,271	)
Expiring 11/03/17	UBS AG	BRL	347		111,708		105,909		(5,799	)
Expiring 11/03/17	UBS AG	BRL	257		79,898		78,449		(1,449	)
Expiring 02/02/18	Citigroup Global Markets	BRL	627		189,100		189,467		367
Colombian Peso,
Expiring 12/18/17	Citigroup Global Markets	COP	408,380		139,293		133,626		(5,667	)
Expiring 12/18/17	Citigroup Global Markets	COP	313,241		106,004		102,496		(3,508	)
Czech Koruna,
Expiring 01/08/18	UBS AG	CZK	4,222		193,368		192,539		(829	)
Expiring 01/08/18	UBS AG	CZK	4,222		193,311		192,539		(772	)
Hungarian Forint,
Expiring 01/24/18	Goldman Sachs & Co.	HUF	113,311		435,043		425,808		(9,235	)
Indian Rupee,
Expiring 01/30/18	Bank of America	INR	28,775		438,951		439,222		271
Expiring 01/30/18	Citigroup Global Markets	INR	20,320		309,283		310,164		881
Expiring 01/30/18	Morgan Stanley	INR	28,775		437,349		439,222		1,873

See Notes to Financial Statements.

52

Forward foreign currency exchange contracts outstanding at October 31, 2017 (continued):

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts (cont’d.):
Indian Rupee, (cont’d.)
Expiring 11/03/17	Citigroup Global Markets	INR	56,093	$	873,087	$	865,659	$	(7,428	)
Expiring 11/03/17	Citigroup Global Markets	INR	8,419		129,000		129,920		920
Expiring 11/03/17	Citigroup Global Markets	INR	3,809		58,000		58,781		781
Expiring 11/03/17	UBS AG	INR	37,395		577,978		577,106		(872	)
Indonesian Rupiah,
Expiring 11/16/17	Citigroup Global Markets	IDR	3,774,229		279,552		277,907		(1,645	)
Expiring 11/16/17	Citigroup Global Markets	IDR	1,103,533		83,639		81,256		(2,383	)
Expiring 02/12/18	Morgan Stanley	IDR	7,184,389		525,056		524,391		(665	)
Mexican Peso,
Expiring 11/10/17	Citigroup Global Markets	MXN	11,460		631,961		596,676		(35,285	)
Expiring 03/27/18	Citigroup Global Markets	MXN	4,973		250,000		252,977		2,977
New Taiwanese Dollar,
Expiring 11/08/17	Barclays Capital Group	TWD	10,489		346,000		347,912		1,912
Expiring 11/08/17	Barclays Capital Group	TWD	5,254		173,000		174,271		1,271
Expiring 11/08/17	Citigroup Global Markets	TWD	2,325		77,000		77,132		132
Expiring 11/08/17	Citigroup Global Markets	TWD	1,869		62,000		62,003		3
Expiring 11/08/17	UBS AG	TWD	5,689		187,000		188,703		1,703
Philippine Peso,
Expiring 12/15/17	Citigroup Global Markets	PHP	6,631		129,219		128,084		(1,135	)
Expiring 12/15/17	UBS AG	PHP	12,697		245,000		245,244		244
Expiring 12/15/17	UBS AG	PHP	4,230		83,122		81,702		(1,420	)
Expiring 01/25/18	Citigroup Global Markets	PHP	15,451		302,656		297,690		(4,966	)
Polish Zloty,
Expiring 01/24/18	Barclays Capital Group	PLN	742		206,588		204,050		(2,538	)
Russian Ruble,
Expiring 11/17/17	Citigroup Global Markets	RUB	4,126		68,250		70,358		2,108
Expiring 11/17/17	Citigroup Global Markets	RUB	4,123		68,250		70,296		2,046
Expiring 11/17/17	Citigroup Global Markets	RUB	3,962		65,588		67,552		1,964
Expiring 01/12/18	JPMorgan Chase	RUB	40,840		693,341		689,457		(3,884	)
Singapore Dollar,
Expiring 11/13/17	Citigroup Global Markets	SGD	317		235,000		232,319		(2,681	)
Expiring 11/13/17	Citigroup Global Markets	SGD	316		233,450		231,335		(2,115	)
Expiring 11/13/17	Citigroup Global Markets	SGD	197		146,000		144,568		(1,432	)
Expiring 11/13/17	Citigroup Global Markets	SGD	115		86,000		84,548		(1,452	)
Expiring 11/13/17	UBS AG	SGD	102		75,600		74,507		(1,093	)
Expiring 11/13/17	UBS AG	SGD	102		75,600		74,498		(1,102	)
South African Rand,
Expiring 12/15/17	Citigroup Global Markets	ZAR	5,777		418,900		405,317		(13,583	)

See Notes to Financial Statements.

Prudential Income Builder Fund 53

Schedule of Investments (continued)

as of October 31, 2017

Forward foreign currency exchange contracts outstanding at October 31, 2017 (continued):

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts (cont’d.):
South Korean Won,
Expiring 11/17/17	JPMorgan Chase	KRW	172,169	$	152,700	$	153,686	$	986
Expiring 11/17/17	UBS AG	KRW	197,727		176,000		176,501		501
Thai Baht,
Expiring 11/10/17	Citigroup Global Markets	THB	6,028		181,000		181,472		472
Expiring 11/10/17	Citigroup Global Markets	THB	7,035		212,001		211,775		(226	)
Turkish Lira,
Expiring 12/15/17	Hong Kong & Shanghai Bank	TRY	2,257		635,898		587,061		(48,837	)
				$	12,036,176	$	11,885,409	$	(150,767	)
Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts:
Australian Dollar,
Expiring 01/12/18	Citigroup Global Markets	AUD	109	$	84,231	$	83,095	$	1,136
Expiring 01/12/18	Citigroup Global Markets	AUD	109		84,231		83,065		1,166
Brazilian Real,
Expiring 11/03/17	Citigroup Global Markets	BRL	627		191,274		191,704		(430	)
Expiring 11/03/17	Barclays Capital Group	BRL	460		141,674		140,673		1,001
Expiring 11/03/17	Citigroup Global Markets	BRL	455		141,699		139,146		2,553
Expiring 11/03/17	Citigroup Global Markets	BRL	293		92,000		89,452		2,548
Chilean Peso,
Expiring 01/17/18	Barclays Capital Group	CLP	64,911		103,000		101,878		1,122
Expiring 01/17/18	Citigroup Global Markets	CLP	79,257		125,760		124,394		1,366
Chinese Renminbi,
Expiring 01/26/18	Citigroup Global Markets	CNH	1,018		152,392		152,640		(248	)
Colombian Peso,
Expiring 12/18/17	Barclays Capital Group	COP	413,630		140,000		135,344		4,656
Expiring 12/18/17	Citigroup Global Markets	COP	420,563		141,699		137,613		4,086
Czech Koruna,
Expiring 01/08/18	Citigroup Global Markets	CZK	4,058		185,000		185,098		(98	)
Euro,
Expiring 01/26/18	Citigroup Global Markets	EUR	997		1,183,504		1,167,675		15,829
Expiring 01/26/18	Citigroup Global Markets	EUR	136		159,900		159,166		734
Expiring 01/26/18	Citigroup Global Markets	EUR	122		141,862		142,360		(498	)
Expiring 01/26/18	Citigroup Global Markets	EUR	122		141,533		142,360		(827	)
Expiring 01/26/18	UBS AG	EUR	997		1,183,800		1,167,676		16,124
Expiring 01/26/18	UBS AG	EUR	109		127,000		127,744		(744	)
Expiring 01/26/18	UBS AG	EUR	100		117,000		117,239		(239	)

See Notes to Financial Statements.

54

Forward foreign currency exchange contracts outstanding at October 31, 2017 (continued):

Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts (cont’d.):
Indian Rupee,
Expiring 11/03/17	Bank of America	INR	28,775	$	443,312	$	444,080	$	(768	)
Expiring 11/03/17	Citigroup Global Markets	INR	20,320		312,331		313,595		(1,264	)
Expiring 11/03/17	Citigroup Global Markets	INR	15,609		242,000		240,888		1,112
Expiring 11/03/17	Citigroup Global Markets	INR	12,235		189,999		188,823		1,176
Expiring 11/03/17	Morgan Stanley	INR	28,775		441,747		444,080		(2,333	)
Israeli Shekel,
Expiring 01/24/18	Citigroup Global Markets	ILS	495		141,674		140,994		680
Expiring 01/24/18	Citigroup Global Markets	ILS	400		114,403		114,044		359
Japanese Yen,
Expiring 01/26/18	Citigroup Global Markets	JPY	29,480		260,077		260,468		(391	)
Expiring 01/26/18	UBS AG	JPY	23,026		203,000		203,449		(449	)
Mexican Peso,
Expiring 11/10/17	Citigroup Global Markets	MXN	1,230		68,421		64,037		4,384
Expiring 11/10/17	JPMorgan Chase	MXN	2,116		111,000		110,175		825
Expiring 11/10/17	UBS AG	MXN	1,332		69,000		69,335		(335	)
New Taiwanese Dollar,
Expiring 11/08/17	Barclays Capital Group	TWD	3,378		112,000		112,062		(62	)
Expiring 11/08/17	Citigroup Global Markets	TWD	37,088		1,228,896		1,230,183		(1,287	)
Expiring 11/08/17	Citigroup Global Markets	TWD	2,479		81,886		82,216		(330	)
Expiring 11/08/17	UBS AG	TWD	7,733		258,000		256,507		1,493
Peruvian Nuevo Sol,
Expiring 01/12/18	Citigroup Global Markets	PEN	1,560		475,090		478,274		(3,184	)
Philippine Peso,
Expiring 12/15/17	Citigroup Global Markets	PHP	11,331		221,001		218,847		2,154
Expiring 12/15/17	UBS AG	PHP	14,018		272,000		270,747		1,253
Polish Zloty,
Expiring 01/24/18	Citigroup Global Markets	PLN	516		141,170		141,923		(753	)
Russian Ruble,
Expiring 11/17/17	Citigroup Global Markets	RUB	5,571		96,000		94,983		1,017
Expiring 01/12/18	Barclays Capital Group	RUB	15,747		268,653		265,844		2,809
Expiring 01/12/18	Barclays Capital Group	RUB	8,005		135,250		135,149		101
Expiring 01/12/18	Barclays Capital Group	RUB	7,970		135,250		134,553		697
Singapore Dollar,
Expiring 11/13/17	Citigroup Global Markets	SGD	427		314,000		313,472		528
Expiring 11/13/17	Morgan Stanley	SGD	851		624,978		624,233		745
Expiring 11/13/17	UBS AG	SGD	316		233,450		232,149		1,301
Expiring 11/13/17	UBS AG	SGD	187		137,539		136,925		614

See Notes to Financial Statements.

Prudential Income Builder Fund 55

Schedule of Investments (continued)

as of October 31, 2017

Forward foreign currency exchange contracts outstanding at October 31, 2017 (continued):

Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation (Depreciation)
OTC forward foreign currency exchange contracts (cont’d.):
South African Rand,
Expiring 12/15/17	UBS AG	ZAR	2,866	$	213,467	$	201,084	$	12,383
Expiring 12/15/17	UBS AG	ZAR	2,866		213,467		201,085		12,382
South Korean Won,
Expiring 11/17/17	Citigroup Global Markets	KRW	189,779		167,000		169,405		(2,405	)
Expiring 11/17/17	Citigroup Global Markets	KRW	160,493		141,000		143,264		(2,264	)
Expiring 11/17/17	Citigroup Global Markets	KRW	19,987		17,556		17,841		(285	)
Swiss Franc,
Expiring 01/26/18	Bank of America	CHF	38		39,099		38,831		268
Expiring 01/26/18	JPMorgan Chase	CHF	38		39,101		38,831		270
Expiring 01/26/18	UBS AG	CHF	77		78,085		77,662		423
Thai Baht,
Expiring 11/10/17	Citigroup Global Markets	THB	7,165		215,593		215,695		(102	)
Turkish Lira,
Expiring 12/15/17	UBS AG	TRY	534		141,700		139,001		2,699
Expiring 12/15/17	UBS AG	TRY	287		75,000		74,719		281
Expiring 12/15/17	UBS AG	TRY	251		69,000		65,349		3,651
				$	13,379,754	$	13,293,124	$	86,630
								$	(64,137	)

Cross currency exchange contracts outstanding at October 31, 2017:

Settlement	Type	Notional Amount (000)		In Exchange For (000)			Unrealized Appreciation (Depreciation)			Counterparty
OTC cross currency exchange contracts:
01/26/2018	Buy	CHF	78		EUR	67	$	(314	)		UBS AG
04/06/2018	Buy	BRL	603		EUR	166		(14,477	)		Citigroup Global Markets
04/06/2018	Buy	ZAR	1,369		EUR	86		(6,825	)		Goldman Sachs & Co.
							$	(21,616	)

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—unadjusted quoted prices generally in active markets for identical securities.

See Notes to Financial Statements.

56

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of October 31, 2017 in valuing such portfolio securities:

	Level 1			Level 2			Level 3
Investments in Securities
Affiliated Mutual Funds	$	57,825,115		$	—		$	—
Common Stocks		175,684,487			10,882,925			—
Exchange Traded Funds		40,425,469			—			—
Preferred Stocks		16,288,042			—			—
Asset-Backed Securities:
Collateralized Loan Obligations		—			3,758,312			1,000,000
Convertible Bond		—			—			1,096,331
Corporate Bonds		—			107,093,123			—
Foreign Government Bonds		—			48,132,829			—
U.S. Treasury Obligation		—			300,258			—
Options Purchased		—			115,698			—
Options Written		—			(41,228	)		—
Other Financial Instruments*
Futures Contracts		(53,703	)		—			—
OTC Forward Foreign Currency Exchange Contracts		—			(64,137	)		—
OTC Cross Currency Exchange Contracts		—			(21,616	)		—
Total	$	290,169,410		$	170,156,164		$	2,096,331

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value.

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Industry Classification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of October 31, 2017 were as follows (unaudited):

Affiliated Mutual Funds (including 3.8% of collateral for securities on loan)	12.9	%
Oil, Gas & Consumable Fuels	12.3
Equity Real Estate Investment Trusts (REITs)	11.7	%
Foreign Government Bonds	10.7
Exchange Traded Funds	9.0

See Notes to Financial Statements.

Prudential Income Builder Fund 57

Schedule of Investments (continued)

as of October 31, 2017

Industry (cont’d.)
Banks	4.3	%
Oil & Gas	3.5
Software	2.7
Pharmaceuticals	2.5
Chemicals	2.1
Telecommunications	2.1
Media	2.1
Aerospace & Defense	1.5
Electric	1.4
Healthcare-Services	1.2
Retail	1.2
Collateralized Loan Obligations	1.1
Hotels, Restaurants & Leisure	1.0
Mining	0.9
IT Services	0.9
Entertainment	0.9
Technology Hardware, Storage & Peripherals	0.9
Home Builders	0.8
Biotechnology	0.8
Pipelines	0.6
Foods	0.6
Mortgage Real Estate Investment Trusts (REITs)	0.5
Insurance	0.5
Beverages	0.5
Electric Utilities	0.4
Commercial Services	0.4
Independent Power & Renewable Electricity Producers	0.4
Building Materials	0.4
Food & Staples Retailing	0.4
Computers	0.4
Machinery	0.4
Household Products	0.4
Industrial Conglomerates	0.4
Semiconductors & Semiconductor Equipment	0.4
Metals & Mining	0.4
Health Care Providers & Services	0.4
Life Sciences Tools & Services	0.4
Air Freight & Logistics	0.4
Packaging & Containers	0.4
Multi-Utilities	0.3
Lodging	0.3
Specialty Retail	0.3
Food Products	0.3
Auto Parts & Equipment	0.3
Diversified Financial Services	0.3	%
Coal	0.3
Miscellaneous Manufacturing	0.3
Internet Software & Services	0.3
Electronic Equipment, Instruments & Components	0.2
Communications Equipment	0.2
Real Estate Investment Trusts (REITs)	0.2
Transportation	0.2
Textiles, Apparel & Luxury Goods	0.2
Health Care Equipment & Supplies	0.2
Engineering & Construction	0.2
Road & Rail	0.2
Healthcare-Products	0.2
Capital Markets	0.1
Distribution/Wholesale	0.1
Energy Equipment & Services	0.1
Diversified Machinery	0.1
Transportation Infrastructure	0.1
Iron/Steel	0.1
Semiconductors	0.1
Real Estate	0.1
Auto Manufacturers	0.1
Metal Fabricate/Hardware	0.1
Textiles	0.1
Gas	0.1
U.S. Treasury Obligation	0.1
Leisure Time	0.1
Office/Business Equipment	0.0	*
Home Furnishings	0.0	*
Advertising	0.0	*
Internet	0.0	*
Environmental Control	0.0	*
Agriculture	0.0	*
Hand/Machine Tools	0.0	*
Electrical Components & Equipment	0.0	*
Housewares	0.0	*
Forest Products & Paper	0.0	*
Options Purchased	0.0	*
	103.1
Options Written	(0.0	)*
Liabilities in excess of other assets	(3.1	)
	100.0	%

* Less than +/- 0.05%

See Notes to Financial Statements.

58

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit contracts risk, foreign exchange contracts risk and interest rate contracts risk. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of October 31, 2017 as presented in the Statement of Assets and Liabilities:

Derivatives not accounted for as hedging instruments, carried at fair value	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Unaffiliated investments	$	115,698	Options written outstanding, at value	$	41,228
Foreign exchange contracts	—		—	Unrealized depreciation on OTC cross currency exchange contracts		21,616
Foreign exchange contracts	Unrealized appreciation on OTC forward foreign currency exchange contracts		127,338	Unrealized depreciation on OTC forward foreign currency exchange contracts		191,475
Interest rate contracts	—		—	Due from/to broker—variation margin futures		53,703	*
Total		$	243,036		$	308,022

* Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended October 31, 2017 are as follows:

Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures		Forward & Cross Currency Contracts		Swaps		Total
Credit contracts	$	—	$	—	$	589,906	$	589,906
Foreign exchange contracts		—		240,100		—		240,100
Interest rate contracts		37,652		—		—		37,652
Total	$	37,652	$	240,100	$	589,906	$	867,658

See Notes to Financial Statements.

Prudential Income Builder Fund 59

Schedule of Investments (continued)

as of October 31, 2017

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Options Purchased(1)		Options Written		Futures			Forward & Cross Currency Contracts		Swaps			Total
Credit contracts	$	—	$	—	$	—		$	—	$	(484,271	)	$	(484,271	)
Foreign exchange contracts		13,896		21,253		—			353		—			35,502
Interest rate contracts		—		—		(23,305	)		—		—			(23,305	)
Total	$	13,896	$	21,253	$	(23,305	)	$	353	$	(484,271	)	$	(472,074	)

(1) Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the year ended October 31, 2017, the Fund’s average volume of derivative activities is as follows:

Options Purchased(1)		Options Written(4)		Futures Contracts— Long Positions(2)		Futures Contracts— Short Positions(2)
$	61,081	$	1,545,107	$	7,794,036	$	919,903

Forward Foreign Currency Exchange Contracts— Purchased(3)		Forward Foreign Currency Exchange Contracts— Sold(3)		Cross Currency Exchange Contracts(2)		Credit Default Swap Agreements— Sell Protection(4)
$	11,554,660	$	12,217,904	$	843,416	$	4,416,000

(1) Cost.

(2) Value at Trade Date.

(3) Value at Settlement Date.

(4) Notional Amount in USD.

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund invested in OTC derivatives and entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives and financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.

See Notes to Financial Statements.

60

Offsetting of financial instrument/transaction assets and liabilities:

Description	Gross Market Value of Recognized Assets/(Liabilities)		Collateral Pledged/(Received)(2)			Net Amount
Securities on Loan	$	16,437,021	$	(16,437,021	)	$	—

Offsetting of OTC derivative assets and liabilities:

Counterparty	Gross Amounts of Recognized Assets(1)		Gross Amounts of Recognized Liabilities(1)			Net Amounts of Recognized Assets/ (Liabilities)			Collateral Pledged/ (Received)(2)		Net Amount
Bank of America	$	539	$	(768	)	$	(229	)	$	—	$	(229	)
Barclays Capital Group		13,569		(2,600	)		10,969			—		10,969
BNP Paribas		—		(476	)		(476	)		—		(476	)
Citigroup Global Markets		139,670		(152,192	)		(12,522	)		—		(12,522	)
Goldman Sachs & Co.		29,507		(27,147	)		2,360			—		2,360
Hong Kong & Shanghai Bank		—		(48,837	)		(48,837	)		—		(48,837	)
JPMorgan Chase		2,081		(3,884	)		(1,803	)		—		(1,803	)
Morgan Stanley		2,618		(2,998	)		(380	)		—		(380	)
UBS AG		55,052		(15,417	)		39,635			—		39,635
	$	243,036	$	(254,319	)	$	(11,283	)	$	—	$	(11,283	)

(1) Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities.

(2) Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and the Fund’s OTC derivative exposure by counterparty.

See Notes to Financial Statements.

Prudential Income Builder Fund 61

Statement of Assets & Liabilities

as of October 31, 2017

Assets
Investments at value, including securities on loan of $16,437,021:
Unaffiliated investments (cost $378,860,336)	$	404,777,474
Affiliated investments (cost $57,441,564)		57,825,115
Cash		86,835
Foreign currency, at value (cost $20,194)		20,107
Deposit with broker for futures		100,000
Dividends and interest receivable		3,172,031
Receivable for Fund shares sold		2,874,011
Receivable for investments sold		2,678,137
Unrealized appreciation on OTC forward foreign currency exchange contracts		127,338
Tax reclaim receivable		15,393
Prepaid expenses		3,459
Total assets		471,679,900
Liabilities
Payable to broker for collateral for securities on loan		16,848,946
Payable for investments purchased		3,508,448
Payable for Fund shares reacquired		1,956,242
Unrealized depreciation on OTC forward foreign currency exchange contracts		191,475
Accrued expenses and other liabilities		165,934
Dividends payable		163,079
Distribution fee payable		148,896
Management fee payable		127,504
Options written outstanding, at value (premiums received $62,481)		41,228
Unrealized depreciation on OTC cross currency exchange contracts		21,616
Affiliated transfer agent fee payable		19,033
Due to broker—variation margin futures		1,453
Deferred trustees’ fees		167
Total liabilities		23,194,021
Net Assets	$	448,485,879
Net assets were comprised of:
Shares of beneficial interest, at par	$	46,761
Paid-in capital in excess of par		451,316,507
		451,363,268
Distributions in excess of net investment income		(312,127	)
Accumulated net realized loss on investment and foreign currency transactions		(28,746,609	)
Net unrealized appreciation on investments and foreign currencies		26,181,347
Net assets, October 31, 2017	$	448,485,879

See Notes to Financial Statements.

62

Class A
Net asset value and redemption price per share,
($171,046,832 ÷ 17,771,295 shares of beneficial interest issued and outstanding)	$	9.62
Maximum sales charge (4.50% of offering price)		0.45
Maximum offering price to public	$	10.07
Class B
Net asset value, offering price and redemption price per share,
($2,331,846 ÷ 246,884 shares of beneficial interest issued and outstanding)	$	9.45
Class C
Net asset value, offering price and redemption price per share,
($129,396,958 ÷ 13,705,541 shares of beneficial interest issued and outstanding)	$	9.44
Class Q
Net asset value, offering price and redemption price per share,
($2,621,946 ÷ 270,717 shares of beneficial interest issued and outstanding)	$	9.69
Class R
Net asset value, offering price and redemption price per share,
($610,366 ÷ 63,505 shares of beneficial interest issued and outstanding)	$	9.61
Class Z
Net asset value, offering price and redemption price per share,
($142,477,931 ÷ 14,702,840 shares of beneficial interest issued and outstanding)	$	9.69

See Notes to Financial Statements.

Prudential Income Builder Fund 63

Statement of Operations

Year Ended October 31, 2017

Net Investment Income (Loss)
Income
Interest income	$	9,611,225
Unaffiliated dividend income (net of foreign withholding taxes of $101,286)		7,298,262
Affiliated dividend income		1,645,933
Income from securities lending, net (including affiliated income of $14,113)		132,959
Total income		18,688,379
Expenses
Management fee		2,893,132
Distribution fee—Class A		501,236
Distribution fee—Class B		25,322
Distribution fee—Class C		1,221,742
Distribution fee—Class R		4,341
Transfer agent’s fees and expenses (including affiliated expense of $96,300)		426,000
Custodian and accounting fees		319,000
Shareholders’ reports		159,000
Registration fees		118,000
Audit fee		50,000
Legal fees and expenses		23,000
Trustees’ fees		13,000
Miscellaneous		33,577
Total expenses		5,787,350
Less: Management fee waiver and/or expense reimbursement		(1,560,570	)
Less: Distribution fee waiver—Class A		(83,539	)
Less: Distribution fee waiver—Class R		(1,447	)
Net expenses		4,141,794
Net investment income (loss)		14,546,585
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions (including affiliated of $(355,664))		(4,574,485	)
Net capital gain distribution received		151,076
Futures transactions		37,652
Swap agreements transactions		589,906
Forward and cross currency contract transactions		240,100
Foreign currency transactions		(33,581	)
		(3,589,332	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated of $(163,502))		17,836,165
Futures		(23,305	)
Options written		21,253
Swap agreements		(484,271	)
Forward and cross currency contracts		353
Foreign currencies		3,943
		17,354,138
Net gain (loss) on investment and foreign currency transactions		13,764,806
Net Increase (Decrease) In Net Assets Resulting From Operations	$	28,311,391

See Notes to Financial Statements.

64

Statement of Changes in Net Assets

	Year Ended October 31,
	2017			2016
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	14,546,585		$	11,596,610
Net realized gain (loss) on investment and foreign currency transactions		(3,589,332	)		(16,347,292	)
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		17,354,138			15,956,531
Net increase (decrease) in net assets resulting from operations		28,311,391			11,205,849
Dividends and Distributions
Dividends from net investment income
Class A		(6,403,663	)		(6,266,134	)
Class B		(82,466	)		(105,634	)
Class C		(3,975,121	)		(3,350,236	)
Class Q		(48,938	)		—
Class R		(20,908	)		(16,891	)
Class Z		(4,876,263	)		(2,949,966	)
		(15,407,359	)		(12,688,861	)
Tax return of capital distributions
Class A		(869,553	)		(873,996	)
Class B		(11,198	)		(14,734	)
Class C		(539,781	)		(467,288	)
Class Q		(6,645	)		—
Class R		(2,839	)		(2,356	)
Class Z		(662,147	)		(411,458	)
		(2,092,163	)		(1,769,832	)
Fund share transactions (Net of share conversions)
Net proceeds from shares sold		177,533,383			169,263,582
Net asset value of shares issued in reinvestment of dividends and distributions		15,392,007			12,625,332
Cost of shares reacquired		(116,065,837	)		(112,431,080	)
Net increase (decrease) in net assets from Fund share transactions		76,859,553			69,457,834
Total increase (decrease)		87,671,422			66,204,990
Net Assets:
Beginning of year		360,814,457			294,609,467
End of year	$	448,485,879		$	360,814,457

See Notes to Financial Statements.

Prudential Income Builder Fund 65

Notes to Financial Statements

Prudential Investment Portfolios 16 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on July 29, 1998. The Trust currently consists of two funds: Prudential Income Builder Fund and Prudential QMA Defensive Equity Fund which are diversified funds. These financial statements relate to the Prudential Income Builder Fund (the “Fund”).

The investment objective of the Fund is to seek income and long-term capital growth.

1. Accounting Policies

The Fund follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or “the Manager”) (formerly known as Prudential Investments LLC). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official

66

closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.

Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing recent transaction prices for identical or comparable securities. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

OTC derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing OTC derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the

Prudential Income Builder Fund 67

Notes to Financial Statements (continued)

present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated OTC derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain OTC derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are generally valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

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 rates of exchange;

(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from

68

the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gains (losses) on foreign currency transactions.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.

Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Fund enters into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or specific receivables and payables denominated in a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation (depreciation) on investments and foreign currencies. Gain (loss) is realized on the settlement date of the contract equal to the difference between the settlement value of the original and negotiated forward contracts. This gain (loss), if any, is included in net realized gain (loss) on forward and cross currency contract transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks from currency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from the counterparty at the end of the contract’s life. A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.

Options: The Fund purchased or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates with respect to securities or financial instruments which the Fund currently owns or intends to purchase. The Fund may also use options to gain additional market exposure. The Fund’s principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium

Prudential Income Builder Fund 69

Notes to Financial Statements (continued)

and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid at the closing of a purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on options written transactions.

The Fund, as writer of an option, may have no control over whether the underlying securities or financial instruments may be sold (called) or purchased (put). As a result, the Fund bears the market risk of an unfavorable change in the price of the security or financial instrument underlying the written option. The Fund, as purchaser or an OTC option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts. With exchange-traded options contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the options contracts against default.

When the Fund writes an option on a swap, an amount equal to any premium received by the Fund is recorded as a liability and is subsequently adjusted to the current market value of the written option on the swap. If a call option on a swap is exercised, the Fund becomes obligated to pay a fixed interest rate (noted as the strike price) and receive a variable interest rate on a notional amount. If a put option on a swap is exercised, the Fund becomes obligated to pay a variable interest rate and receive a fixed interest rate (noted as the strike price) on a notional amount. Premiums received from writing options on swaps that expire or are exercised are treated as realized gains upon the expiration or exercise of such options on swaps. The risk associated with writing put and call options on swaps is that the Fund will be obligated to be party to a swap agreement if an option on a swap is exercised.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract

70

expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.

The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Swap Agreements: The Fund may enter into credit default, interest rate and other types of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation (depreciation) on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. Any upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.

Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. The Fund may use interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed-rate payments and to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value of the cash flows to be received from the counterparty over the contract’s remaining life.

Credit Default Swaps (“CDS”): CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.

Prudential Income Builder Fund 71

Notes to Financial Statements (continued)

The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases. The Fund’s maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.

As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund may be subject to investment exposure on the notional amount of the swap.

The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as indicators of the current status of the payment/performance risk. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

72

Master Netting Arrangements: The Trust, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.

The Trust, on behalf of the Fund, is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Schedule of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.

In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and

Prudential Income Builder Fund 73

Notes to Financial Statements (continued)

to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.

As of October 31, 2017, the Fund has not met conditions under such agreements which give the counterparty the right to call for an early termination.

Forward currency contracts, forward rate agreements, written options, short sales, swaps and financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.

Payment-In-Kind: The Fund may invest in the open market or receive pursuant to debt restructuring, securities that pay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to the existing principal balance of the debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.

Securities Lending: The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.

74

Concentration of Risk: The ability of debt securities issuers (other than those issued or guaranteed by the U.S. Government) held by the Portfolios to meet their obligations may be affected by the economic or political developments in a specific industry, region or country. 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 or economic instability or the level of the governmental supervision and regulation of foreign securities markets.

Equity and Mortgage Real Estate Investment Trusts (REITs): The Fund invests in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the equity REITs.

Concentration of Risk for REITs: Real estate securities are subject to the same risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of default or of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. The value of these securities will rise and fall in response to many factors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management of the underlying properties.

In addition, investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.

Prudential Income Builder Fund 75

Notes to Financial Statements (continued)

Net investment income or loss (other than distribution fees which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.

Master Limited Partnerships (MLPs): The Fund invests in MLPs. Distributions received from the Fund’s investment in MLPs generally are comprised of income and return of capital. The Fund records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on historical information available from each MLP and other industry sources. These estimates may subsequently be revised based on information received from MLPs after their respective tax reporting periods have concluded.

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects to pay dividends from net investment income monthly and distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. PGIM Investments has entered into subadvisory agreements with each of Quantitative Management Associates LLC (“QMA”), Jennison Associates LLC, PGIM Fixed Income and PGIM Real Estate, each a

76

Subadviser and together, the Subadvisers. PGIM Fixed Income and PGIM Real Estate are business units of PGIM, Inc. The subadvisory agreements provide that the Subadvisers furnish investment advisory services in connection with the management of the Fund. In connection therewith, the Subadvisers are obligated to keep certain books and records of the Fund. Pursuant to the advisory agreement, PGIM Investments pays 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 PGIM Investments is accrued daily and payable monthly at an annual rate of .70% of the Fund’s average daily net assets up to $1 billion and .65% of such assets in excess of $1 billion. The effective management fee rate before any waivers and/or expense reimbursements was .70% for the year ended October 31, 2017. The effective management fee rate, net of waivers and/or expense reimbursement was .32%.

PGIM Investments has contractually agreed through February 28, 2019 to limit the net annual operating expenses and acquired fund fees and expenses (exclusive of distribution and service (12b-1) fees, taxes (such as income and foreign withholdings taxes, stamp duty and deferred tax expenses, including acquired fund taxes), interest, brokerage, extraordinary and certain other expenses such as dividend, broker charges and interest expense on short sales, including acquired fund dividend and interest expense on short sales) of each class of shares of the Fund to .70% of the Fund’s average daily net assets. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/ reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year.

The Trust, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) which acts as the distributor of the Class A, Class B, Class C, Class Q, Class R and Class Z shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B, Class C and Class R shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Q and Class Z shares of the Fund.

Pursuant to the Fund’s Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30%, 1%, 1% and .75% of the average daily net assets of the Class A, B, C and R shares, respectively. PIMS has contractually agreed through February 28, 2019 to limit such fees to .25% and .50% of the average daily net assets of the Class A and Class R shares.

PIMS has advised the Fund that it has received $859,603 in front-end sales charges resulting from sales of Class A shares, during the year ended October 31, 2017. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to sales persons and incurred other distribution costs.

Prudential Income Builder Fund 77

Notes to Financial Statements (continued)

PIMS has advised the Fund that for the year ended October 31, 2017, it received $1,097, $1,796 and $23,905 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.

PGIM, Inc., PGIM Investments, PIMS, and QMA are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended October 31, 2017 no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the Prudential Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the Prudential Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended October 31, 2017, PGIM, Inc. was compensated $13,048 by PGIM Investments for managing the Fund’s securities lending cash collateral as subadviser to the Money Market Fund. The Fund also invests in other affiliated mutual funds. Earnings from the Core Fund and other affiliated mutual funds are disclosed on the Statement of Operations as “Affiliated dividend income”. Earnings from the Money Market Fund are disclosed on the Statement of Operations as “Income from securities lending, net.”

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended October 31, 2017 were $483,241,741 and $401,916,888, respectively.

78

On June 14, 2017, GenOn Energy, Inc. and its subsidiaries filed for bankruptcy under Chapter 11. In connection with the Chapter 11 plan of reorganization (the “GenOn Reorganization Plan”) GenOn Energy, Inc. and its subsidiaries will issue a 144A high yield bond offering for the exit financing of the bankruptcy. As part of the GenOn Reorganization Plan and restructuring of the existing bond, PGIM, Inc. has agreed to participate in a backstop commitment of $548,000 for the new bond offering. Under the commitment agreement, the Fund will be obligated to purchase all of the unsubscribed shares of the bond offering. The Fund has received a backstop fee of $27,400 in conjunction with this commitment. As of November 17, 2017, the commitment has been terminated and PGIM, Inc. will not be obligated to purchase any unsubscribed shares of the bond offering.

A summary of cost of purchases and proceeds of sales from shares of affiliated mutual funds, other than short-term investments, for the year ended October 31, 2017 is presented as follows:

Affiliated Mutual Funds	Value, Beginning of Year		Cost of Purchases		Proceeds from Sales			Change in Unrealized Gain (Loss)			Realized Gain (Loss)			Value, End of Year		Shares, End of Year		Dividend Income		Capital Gain Distributions
Prudential Absolute Return Fund (Class Q)	$	—	$	8,846,431	$	(20,000	)	$	186,495		$	(41	)	$	9,012,885		906,729	$	135,931	$	—
Prudential Floating Rate Income Fund (Class Q)		—		15,863,898		(15,859,370	)		—			(4,528	)		—		—		179,878		—
Prudential Short Duration High Yield Income (Class Q)		10,744,837		33,175,771		(30,558,100	)		(98,987	)		196,159			13,459,680		1,487,258		801,571		—
Prudential Total Return Bond (Class Q)		20,504,299		18,867,409		(29,608,700	)		(250,109	)		(542,995	)		8,969,904		616,488		273,452		151,076
	$	31,249,136	$	76,753,509	$	(76,046,170	)	$	(162,601	)	$	(351,405	)	$	31,442,469			$	1,390,832	$	151,076

5. Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. In order to present distributions in excess of net investment income, accumulated net realized loss on investment and foreign currency transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to distributions in excess of net investment income, accumulated net realized loss on investment and foreign currency transactions and paid-in capital in excess of par. For the year ended October 31, 2017, the adjustments were to decrease distributions in excess of net investment income by $882,190, increase accumulated net realized loss on investment and foreign currency transactions by $996,366 and increase paid-in capital in excess of par by $114,176 due to differences in the treatment for book and tax purposes of certain

Prudential Income Builder Fund 79

Notes to Financial Statements (continued)

transactions involving foreign securities and currencies, passive foreign investment companies, investments in partnerships, reclasses on swaps and other book to tax adjustments. Net investment income, net realized gain (loss) on investment and foreign currency transactions and net assets were not affected by this change.

For the year ended October 31, 2017, the tax character of dividends paid were $15,407,359 of ordinary income and $2,092,163 of tax return of capital. For the year ended October 31, 2016, the tax character of dividends paid were $12,688,861 of ordinary income and $1,769,832 of tax return of capital.

As of October 31, 2017, the Fund had no undistributed earnings on a tax basis.

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2017 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$445,541,959	$32,086,048	$(15,199,572)	$16,886,476

The differences between book basis and tax basis were primarily attributable to deferred losses on wash sales and other cost basis differences between financial and tax accounting.

For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2017 of approximately $19,764,000 which can be carry forward for an unlimited period. No capital gain distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

6. Capital

The Fund offers Class A, Class B, Class C, Class Q, Class R and Class Z shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase

80

are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. Class B shares are subject to a CDSC of 5%, Which decreases by 1% annually to 1% in the fifth and sixth years and 0% in the seventh year. Class B shares automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class B shares are closed to new purchases. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class Q, Class R and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value per share, divided into six classes, designated Class A, Class B, Class C, Class Q, Class R and Class Z.

At reporting period end, seven shareholders of record held 64% of the Fund’s outstanding shares on behalf of multiple beneficial owners.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended October 31, 2017:
Shares sold		5,364,085		$	51,082,115
Shares issued in reinvestment of dividends and distributions		709,776			6,769,425
Shares reacquired		(3,951,542	)		(37,636,741	)
Net increase (decrease) in shares outstanding before conversion		2,122,319			20,214,799
Shares issued upon conversion from other share class(es)		144,613			1,380,496
Shares reacquired upon conversion into other share class(es)		(2,142,598	)		(20,583,204	)
Net increase (decrease) in shares outstanding		124,334		$	1,012,091
Year ended October 31, 2016:
Shares sold		6,136,054		$	56,948,938
Shares issued in reinvestment of dividends and distributions		692,375			6,371,045
Shares reacquired		(4,184,582	)		(38,113,694	)
Net increase (decrease) in shares outstanding before conversion		2,643,847			25,206,289
Shares issued upon conversion from other share class(es)		84,076			774,528
Shares reacquired upon conversion into other share class(es)		(146,912	)		(1,392,549	)
Net increase (decrease) in shares outstanding		2,581,011		$	24,588,268

Prudential Income Builder Fund 81

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2017:
Shares sold		72,236		$	669,165
Shares issued in reinvestment of dividends and distributions		9,683			90,616
Shares reacquired		(39,375	)		(369,915	)
Net increase (decrease) in shares outstanding before conversion		42,544			389,866
Shares reacquired upon conversion into other share class(es)		(75,851	)		(708,021	)
Net increase (decrease) in shares outstanding		(33,307	)	$	(318,155	)
Year ended October 31, 2016:
Shares sold		58,927		$	536,738
Shares issued in reinvestment of dividends and distributions		13,276			119,688
Shares reacquired		(53,278	)		(476,663	)
Net increase (decrease) in shares outstanding before conversion		18,925			179,763
Shares reacquired upon conversion into other share class(es)		(72,760	)		(656,006	)
Net increase (decrease) in shares outstanding		(53,835	)	$	(476,243	)
Class C
Year ended October 31, 2017:
Shares sold		4,777,729		$	44,699,909
Shares issued in reinvestment of dividends and distributions		428,759			4,015,817
Shares reacquired		(2,455,692	)		(22,969,709	)
Net increase (decrease) in shares outstanding before conversion		2,750,796			25,746,017
Shares reacquired upon conversion into other share class(es)		(862,734	)		(8,108,045	)
Net increase (decrease) in shares outstanding		1,888,062		$	17,637,972
Year ended October 31, 2016:
Shares sold		5,763,197		$	52,392,702
Shares issued in reinvestment of dividends and distributions		359,547			3,251,707
Shares reacquired		(2,358,027	)		(21,083,233	)
Net increase (decrease) in shares outstanding before conversion		3,764,717			34,561,176
Shares reacquired upon conversion into other share class(es)		(142,489	)		(1,294,898	)
Net increase (decrease) in shares outstanding		3,622,228		$	33,266,278
Class Q
Period ended October 31, 2017*:
Shares sold		275,300		$	2,659,973
Shares issued in reinvestment of dividends and distributions		5,749			55,577
Shares reacquired†		(55,283	)		(533,464	)
Net increase (decrease) in shares outstanding before conversion		225,766			2,182,086
Shares issued upon conversion from other share class(es)		44,951			433,703
Net increase (decrease) in shares outstanding		270,717		$	2,615,789

82

Class R	Shares			Amount
Year ended October 31, 2017:
Shares sold		44,189		$	422,486
Shares issued in reinvestment of dividends and distributions		2,397			22,854
Shares reacquired†		(43,080	)		(412,627	)
Net increase (decrease) in shares outstanding		3,506		$	32,713
Year ended October 31, 2016:
Shares sold		21,131		$	196,606
Shares issued in reinvestment of dividends and distributions		1,975			18,168
Shares reacquired		(1,376	)		(12,288	)
Net increase (decrease) in shares outstanding		21,730		$	202,486
Class Z
Year ended October 31, 2017:
Shares sold		8,117,414		$	77,999,735
Shares issued in reinvestment of dividends and distributions		461,311			4,437,718
Shares reacquired		(5,655,759	)		(54,143,381	)
Net increase (decrease) in shares outstanding before conversion		2,922,966			28,294,072
Shares issued upon conversion from other share class(es)		2,869,795			27,743,420
Shares reacquired upon conversion into other share class(es)		(16,450	)		(158,349	)
Net increase (decrease) in shares outstanding		5,776,311		$	55,879,143
Year ended October 31, 2016:
Shares sold		6,339,942		$	59,188,598
Shares issued in reinvestment of dividends and distributions		309,110			2,864,724
Shares reacquired		(5,841,516	)		(52,745,202	)
Net increase (decrease) in shares outstanding before conversion		807,536			9,308,120
Shares issued upon conversion from other share class(es)		276,772			2,608,772
Shares reacquired upon conversion into other share class(es)		(4,302	)		(39,847	)
Net increase (decrease) in shares outstanding		1,080,006		$	11,877,045

* Commencement of offering was December 30, 2016.

† Includes affiliated redemptions of 1,088 shares with a value of $10,467 for Class Q shares and 358 shares with a value of $3,412 for Class R shares.

7. Borrowings

The Trust, on behalf of 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. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of .15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Prudential Income Builder Fund 83

Notes to Financial Statements (continued)

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the reporting period ended October 31, 2017.

8. Dividends and Distributions to Shareholders

Subsequent to the year ended October 31, 2017, the Fund declared ordinary income dividends on November 28, 2017 to shareholders of record on November 29, 2017. The ex-date was November 30, 2017. The per share amounts declared were as follows:

	Ordinary Income
Class A	$	0.04620
Class B	$	0.04004
Class C	$	0.04004
Class Q	$	0.04831
Class R	$	0.04410
Class Z	$	0.04831

9. Other

At the Trust’s Board meeting in March 2017, the Board approved a change in the methodology of allocating certain expenses, such as Transfer Agent fees (including sub-transfer agent and networking fees) and Blue Sky fees. PGIM Investments implemented the changes effective November 1, 2017.

84

Financial Highlights

Class A Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017			2016			2015			2014(f)			2014			2013
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.36			$9.39			$11.90			$11.78			$11.55			$10.69
Income (loss) from investment operations:
Net investment income (loss)		.35			.37			.39			.05			.05			.14
Net realized and unrealized gain (loss) on investments		.32			.06			(.70	)		.14			.89			.86
Total from investment operations		.67			.43			(.31	)		.19			.94			1.00
Less Dividends and Distributions:
Dividends from net investment income		(.36	)		(.40	)		(.44	)		(.07	)		(.12	)		(.14	)
Distributions from net realized gains		-			-			(1.76	)		-			(.59	)		-
Tax return of capital distributions		(.05	)		(.06	)		-			-			-			-
Total dividends and distributions		(.41	)		(.46	)		(2.20	)		(.07	)		(.71	)		(.14	)
Net asset value, end of period		$9.62			$9.36			$9.39			$11.90			$11.78			$11.55
Total Return(a)		7.34%			4.76%			(2.59)%			1.63%			8.37%			9.41%
Ratios/Supplemental Data:
Net assets, end of period (000)		$171,047			$165,090			$141,432			$84,863			$85,292			$86,386
Average net assets (000)		$167,079			$143,159			$109,965			$84,889			$86,591			$85,636
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		.85%			.83%			.78%			1.03%	(d)		1.51%			1.52%
Expenses before waivers and/or expense reimbursement		1.27%			1.30%			1.37%			1.92%	(d)		1.56%			1.57%
Net investment income (loss)		3.69%			4.05%			3.96%			1.58%	(d)		.43%			1.25%
Portfolio turnover rate		102%			90%			93%			140%	(e)		478%			210%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying funds in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

Prudential Income Builder Fund 85

Financial Highlights (continued)

Class B Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017			2016			2015			2014(f)			2014			2013
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.19			$9.23			$11.74			$11.59			$11.38			$10.54
Income (loss) from investment operations:
Net investment income (loss)		.28			.30			.32			.02			(.04	)		.06
Net realized and unrealized gain (loss) on investments		.33			.05			(.70	)		.15			.88			.84
Total from investment operations		.61			.35			(.38	)		.17			.84			.90
Less Dividends and Distributions:
Dividends from net investment income		(.31	)		(.34	)		(.37	)		(.02	)		(.04	)		(.06	)
Distributions from net realized gains		-			-			(1.76	)		-			(.59	)		-
Tax return of capital distributions		(.04	)		(.05	)		-			-			-			-
Total dividends and distributions		(.35	)		(.39	)		(2.13	)		(.02	)		(.63	)		(.06	)
Net asset value, end of period		$9.45			$9.19			$9.23			$11.74			$11.59			$11.38
Total Return(a)		6.69%			3.97%			(3.35)%			1.47%			7.52%			8.57%
Ratios/Supplemental Data:
Net assets, end of period (000)		$2,332			$2,575			$3,083			$4,810			$5,180			$6,012
Average net assets (000)		$2,532			$2,762			$3,824			$5,005			$5,826			$6,958
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.60%			1.58%			1.51%			1.78%	(d)		2.26%			2.27%
Expenses before waivers and/or expense reimbursement		1.97%			2.00%			2.09%			2.59%	(d)		2.26%			2.27%
Net investment income (loss)		2.95%			3.34%			3.24%			.80%	(d)		(.31)%			.52%
Portfolio turnover rate		102%			90%			93%			140%	(e)		478%			210%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying funds in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

86

Class C Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017			2016			2015			2014(f)			2014			2013
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.18			$9.23			$11.74			$11.59			$11.38			$10.54
Income (loss) from investment operations:
Net investment income (loss)		.27			.30			.31			.02			(.04	)		.06
Net realized and unrealized gain (loss) on investments		.34			.04			(.69	)		.15			.88			.84
Total from investment operations		.61			.34			(.38	)		.17			.84			.90
Less Dividends and Distributions:
Dividends from net investment income		(.31	)		(.34	)		(.37	)		(.02	)		(.04	)		(.06	)
Distributions from net realized gains		-			-			(1.76	)		-			(.59	)		-
Tax return of capital distributions		(.04	)		(.05	)		-			-			-			-
Total dividends and distributions		(.35	)		(.39	)		(2.13	)		(.02	)		(.63	)		(.06	)
Net asset value, end of period		$9.44			$9.18			$9.23			$11.74			$11.59			$11.38
Total Return(a)		6.69%			3.86%			(3.35)%			1.47%			7.53%			8.57%
Ratios/Supplemental Data:
Net assets, end of period (000)		$129,397			$108,543			$75,622			$17,474			$17,887			$17,217
Average net assets (000)		$122,174			$88,099			$44,389			$17,513			$17,793			$17,251
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.60%			1.58%			1.55%			1.78%	(d)		2.26%			2.27%
Expenses before waivers and/or expense reimbursement		1.98%			2.00%			2.05%			2.61%	(d)		2.26%			2.27%
Net investment income (loss)		2.93%			3.27%			3.19%			.82%	(d)		(.32)%			.51%
Portfolio turnover rate		102%			90%			93%			140%	(e)		478%			210%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying funds in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

Prudential Income Builder Fund 87

Financial Highlights (continued)

Class Q Shares
	December 30, 2016(a) through October 31, 2017
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.44
Income (loss) from investment operations:
Net investment income (loss)		.30
Net realized and unrealized gain (loss) on investments		.31
Total from investment operations		.61
Less Dividends and Distributions:
Dividends from net investment income		(.31	)
Tax return of capital distributions		(.05	)
Total dividends and distributions		(.36	)
Net asset value, end of period		$9.69
Total Return(c):		6.58%
Ratios/Supplemental Data:
Net assets, end of period (000)		$2,622
Average net assets (000)		$1,384
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		.60%	(e)
Expenses before waivers and/or expense reimbursement		.90%	(e)
Net investment income (loss)		3.74%	(e)
Portfolio turnover rate		102%	(f)

(a) Commencement of offering.

(b) Calculated based on average shares outstanding during the period.

(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying funds in which the Fund invests.

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

88

Class R Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017			2016			2015			2014(f)			2014			2013
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.34			$9.38			$11.89			$11.75			$11.52			$10.67
Income (loss) from investment operations:
Net investment income (loss)		.33			.35			.36			.04			.02			.11
Net realized and unrealized gain (loss) on investments		.33			.05			(.69	)		.15			.89			.85
Total from investment operations		.66			.40			(.33	)		.19			.91			.96
Less Dividends and Distributions:
Dividends from net investment income		(.34	)		(.38	)		(.42	)		(.05	)		(.09	)		(.11	)
Distributions from net realized gains		-			-			(1.76	)		-			(.59	)		-
Tax return of capital distributions		(.05	)		(.06	)		-			-			-			-
Total dividends and distributions		(.39	)		(.44	)		(2.18	)		(.05	)		(.68	)		(.11	)
Net asset value, end of period		$9.61			$9.34			$9.38			$11.89			$11.75			$11.52
Total Return(a)		7.20%			4.40%			(2.83)%			1.60%			8.13%			9.07%
Ratios/Supplemental Data:
Net assets, end of period (000)		$610			$561			$359			$393			$288			$167
Average net assets (000)		$579			$404			$427			$347			$275			$196
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.10%			1.08%			1.03%			1.25%	(d)		1.76%			1.77%
Expenses before waivers and/or expense reimbursement		1.73%			1.75%			1.82%			2.45%	(d)		2.01%			2.02%
Net investment income (loss)		3.41%			3.76%			3.69%			1.45%	(d)		.19%			1.04%
Portfolio turnover rate		102%			90%			93%			140%	(e)		478%			210%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying funds in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

Prudential Income Builder Fund 89

Financial Highlights (continued)

Class Z Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017			2016			2015			2014(f)			2014			2013
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.42			$9.45			$11.96			$11.85			$11.62			$10.75
Income (loss) from investment operations:
Net investment income (loss)		.38			.40			.41			.06			.08			.17
Net realized and unrealized gain (loss) on investments		.33			.05			(.69	)		.15			.89			.87
Total from investment operations		.71			.45			(.28	)		.21			.97			1.04
Less Dividends and Distributions:
Dividends from net investment income		(.39	)		(.42	)		(.47	)		(.10	)		(.15	)		(.17	)
Distributions from net realized gains		-			-			(1.76	)		-			(.59	)		-
Tax return of capital distributions		(.05	)		(.06	)		-			-			-			-
Total dividends and distributions		(.44	)		(.48	)		(2.23	)		(.10	)		(.74	)		(.17	)
Net asset value, end of period		$9.69			$9.42			$9.45			$11.96			$11.85			$11.62
Total Return(a)		7.67%			4.98%			(2.33)%			1.74%			8.59%			9.72%
Ratios/Supplemental Data:
Net assets, end of period (000)		$142,478			$84,046			$74,114			$5,965			$5,287			$3,178
Average net assets (000)		$119,795			$64,595			$45,082			$5,426			$4,306			$3,181
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		.60%			.58%			.56%			.77%	(d)		1.26%			1.27%
Expenses before waivers and/or expense reimbursement		.98%			1.00%			1.03%			1.64%	(d)		1.26%			1.27%
Net investment income (loss)		3.90%			4.35%			4.15%			1.87%	(d)		.69%			1.51%
Portfolio turnover rate		102%			90%			93%			140%	(e)		478%			210%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying funds in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

90

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 16:

We have audited the accompanying statement of assets and liabilities of Prudential Income Builder Fund (the “Fund”), a series of Prudential Investment Portfolios 16, including the schedule of investments, as of October 31, 2017, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the three-year period then ended, for the three-month period ended October 31, 2014, and for each of the years in the two year period ended July 31, 2014. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2017, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of October 31, 2017, and the results of its operations, the changes in its net assets, and the financial highlights for each of the years or periods described in the first paragraph, in conformity with U.S. generally accepted accounting principles.

New York, New York

December 15, 2017

Prudential Income Builder Fund 91

Tax Information (unaudited)

For the year ended October 31, 2017, the Fund reports the maximum amount allowable but not less than the following percentages of ordinary income dividends paid as: 1) qualified dividend income in accordance with Section 854 of the Internal Revenue Code (QDI); and 2) eligible for the corporate dividends received deduction (DRD):

	QDI			DRD
Prudential Income Builder Fund		28.23	%		24.31	%

In January 2018, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2017.

92

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (59) Board Member Portfolios Overseen: 89	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (65) Board Member Portfolios Overseen: 89	Retired; Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (65) Board Member Portfolios Overseen: 89	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Prudential Income Builder Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; Formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer-Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (2011-present); Director, Manulife Asset Management Limited (2015-present); Formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); Formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 89	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (since 1996); Visiting Professor of Law and Rock Center for Corporate Governance Fellow, Stanford Law School (since 2015); Visiting Fellow, Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); Formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008); Formerly Director/Trustee, Merrill Lynch Investment Managers Funds (1999-2006).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 89	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.

Visit our website at pgiminvestments.com

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Richard A. Redeker (74) Board Member & Independent Vice Chair9 Portfolios Overseen: 87	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 89	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

± Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 89	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.

Prudential Income Builder Fund

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen: 89	Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (58) Board Member Portfolios Overseen: 88	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	Director (since July 2015) of Sun Bancorp, Inc. N.A. and Sun National Bank

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a Non-Management Interested Board Member.

⁽¹⁾ The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Barry H. Evans, 2017; Keith F. Hartstein, 2013; Laurie Simon Hodrick, 2017; Michael S. Hyland, 2008; Richard A. Redeker, 2003; Stephen G. Stoneburn, 1999; Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

Visit our website at pgiminvestments.com

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (62) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of PGIM Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988-August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006-December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (59) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005

Prudential Income Builder Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Andrew R. French (54) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006
Charles H. Smith (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007-December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998-January 2007).	Since 2016
M. Sadiq Peshimam (53) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (59) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (50) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Explanatory Notes to Tables:

∎ Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC.

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

∎ “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

∎ “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

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Approval of Advisory Agreements

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of Prudential Income Builder Fund (the “Fund”)¹ consists of twelve individuals, nine of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established four standing committees: the Audit Committee, the Nominating and Governance Committee, and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.

Annual Approval of the Fund’s Advisory Agreements

As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreements with each of Quantitative Management Associates LLC (“QMA”), Jennison Associates LLC (“Jennison”), and PGIM, Inc. (“PGIM”) (which provides subadvisory services to the Fund through its PGIM Fixed Income unit and PGIM Real Estate units). In considering the renewal of the agreements, the Board, including all of the Independent Trustees,² met on June 6-8, 2017 and approved the renewal of the agreements through July 31, 2018, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and each of QMA, Jennison and PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.

In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadvisers, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify

¹  Prudential Income Builder Fund is a series of Prudential Investment Portfolios 16.

²  Barry H. Evans and Laurie Simon Hodrick joined the Board effective as of September 1, 2017. Neither Mr. Evans nor Ms. Hodrick participated in the consideration of the renewal of the advisory agreements.

Prudential Income Builder Fund

Approval of Advisory Agreements (continued)

any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 6-8, 2017.

The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and each of QMA, Jennison and PGIM, which serve as the Fund’s subadvisers pursuant to the terms of subadvisory agreements with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.

Nature, Quality and Extent of Services

The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and each of QMA, Jennison and PGIM. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of each subadviser for the Fund, as well as the provision of fund recordkeeping, compliance, and other services to the Fund. With respect to PGIM Investments’ oversight of the subadvisers, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of each subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by QMA, Jennison and PGIM, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreements.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and each of QMA, Jennison and PGIM and also considered the qualifications, backgrounds and responsibilities of each subadviser’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information

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pertaining to PGIM Investments’ and each of QMA’s, Jennison’s and PGIM’s organizational structure, senior management, investment operations, and other relevant information pertaining to each of PGIM Investments, QMA, Jennison and PGIM. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to each of PGIM Investments, QMA, Jennison and PGIM. The Board noted that QMA, Jennison and PGIM Fixed Income are each affiliated with PGIM Investments.

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by each of QMA, Jennison and PGIM and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and each of QMA, Jennison and PGIM under the management and subadvisory agreements.

Costs of Services and Profits Realized by PGIM Investments

The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments during the year ended December 31, 2016 exceeded the management fees paid by PGIM Investments, resulting in an operating loss to PGIM Investments. The Board further noted that the subadvisers are affiliated with PGIM Investments and that their profitability is reflected in PGIM Investments’ profitability report. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase, but that at its current level of assets the Fund does not realize the effect of those rate reductions. The Board took note that the Fund’s fee structure currently results in benefits to Fund shareholders whether or not PGIM Investments realizes any economies of scale. The Board noted that economies of scale can

Prudential Income Builder Fund

Approval of Advisory Agreements (continued)

be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.

Other Benefits to PGIM Investments, QMA, Jennison and PGIM

The Board considered potential ancillary benefits that might be received by PGIM Investments, QMA, Jennison and PGIM and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), and benefits to its reputation as well as other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by QMA, Jennison and PGIM included their ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments, QMA, Jennison and PGIM were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

Performance of the Fund / Fees and Expenses

The Board considered certain additional specific factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2016.

The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2016. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

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The mutual funds included in the Peer Universe (the Lipper Flexible Funds Performance Universe), which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. The comparisons placed the Fund in various quartiles, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth gross performance comparisons (which do not reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.

Performance	1 Year	3 Years	5 Years	10 Years
	2nd Quartile	2nd Quartile	3rd Quartile	2nd Quartile
Actual Management Fees: 1st Quartile
Net Total Expenses: 1st Quartile

• The Board noted that the Fund outperformed one of its benchmark indexes (the Bloomberg Barclays US Aggregate Bond Index) over all periods, while it underperformed its other benchmark index (the S&P 500 Index) over all periods.

• The Board also noted that pursuant to a repositioning in September 2014, the Fund adopted new investment policies, strategies and a new investment objective, and therefore, the Fund’s previous performance did not reflect how the Fund is currently managed.

• The Board and PGIM Investments agreed to retain the existing contractual expense cap, which caps the Fund’s annual operating expenses at 0.70% (exclusive of 12b-1 and certain other fees) through February 28, 2018.

• The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to continue to allow the Fund to establish a performance record and to renew the agreements.

• The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided.

*    *    *

After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.

Prudential Income Builder Fund

∎   MAIL	∎   TELEPHONE	∎   WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.com

PROXY VOTING

The Board of Trustees of the Fund has delegated to the Fund’s investment subadvisers the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.

TRUSTEES

Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres

OFFICERS

Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Chad A. Earnst, Chief Compliance Officer • Deborah A. Docs, Secretary • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Andrew R. French, Assistant Secretary • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer

MANAGER	PGIM Investments LLC	655 Broad Street Newark, NJ 07102
INVESTMENT SUBADVISERS	Jennison Associates LLC	466 Lexington Avenue New York, NY 10017
	PGIM Fixed Income	655 Broad Street Newark, NJ 07102
	PGIM Real Estate	7 Giralda Farms Madison, NJ 07940
	Quantitative Management Associates LLC	Gateway Center Two 100 Mulberry Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	655 Broad Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	225 Liberty Street New York, NY 10286
TRANSFER AGENT	Prudential Mutual Fund Services LLC	PO Box 9658 Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	KPMG LLP	345 Park Avenue New York, NY 10154
FUND COUNSEL	Willkie Farr & Gallagher LLP	787 Seventh Avenue New York, NY 10019

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.pgiminvestments.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

E-DELIVERY

To receive your mutual fund documents online, go to www.pgiminvestments.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES

Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Prudential Income Builder Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

AVAILABILITY OF PORTFOLIO SCHEDULE

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month no sooner than 15 days after the end of the month.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY
FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED
BY ANY BANK OR ANY BANK AFFILIATE

PRUDENTIAL INCOME BUILDER FUND

SHARE CLASS	A	B	C	Q	R	Z
NASDAQ	PCGAX	PBCFX	PCCFX	PCGQX	PCLRX	PDCZX
CUSIP	74442X108	74442X207	74442X306	74442X769	74442X405	74442X504

MFSP504E

PRUDENTIAL QMA DEFENSIVE EQUITY FUND

ANNUAL REPORT

OCTOBER 31, 2017

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Objective: Long-term capital appreciation

Highlights

• A broad overweight to defensive sectors in the S&P 500 Index (the Index) worked against the Fund over the past year. Stable interest rates and strong earnings growth in cyclical sectors, which are sensitive to changes in the economy, led to robust returns and historically low volatility for the broad market; a difficult environment for a Fund focused on reducing drawdowns and maximizing risk-adjusted returns.

• Specifically, overweights to defensive sectors such as utilities, consumer staples, telecommunication services, and real estate, all detracted from returns to a moderate degree due to the cyclical focus of the market.

• A consistent underweight to the energy sector due to its valuations and volatility was a benefit for the Fund, as it has been among the worst-performing sectors over the previous year, hindered by the low and volatile price of oil, and uncertain outlooks for many smaller players.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company. ^© 2017 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on or about June 15, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

LR993

Prudential QMA Defensive Equity Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

Prudential QMA Defensive Equity Fund 5

This Page Intentionally Left Blank

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Letter from the President

Dear Shareholder:

We hope you find the annual report for the Prudential QMA Defensive Equity Fund informative and useful. The report covers performance for the 12-month period ended October 31, 2017.

Significant events during the reporting period included a new US president, followed by uncertainty in Congress over implementing the Trump administration’s policy initiatives. Elsewhere, Britain began its formal legal process to leave the European Union. France elected a more centrist president, which was viewed as a pro-euro referendum. North Korea’s missile launches escalated geopolitical tensions. Also, late in the period, a series of hurricanes caused damage in the US and the Caribbean.

Despite some turbulence in the macro-environment, solid economic fundamentals in the US economy included moderate gross domestic product expansion, robust employment, and accelerating corporate profit growth. Inflation remained tame. The Federal Reserve raised its federal funds rate twice in 2017, and is in the process of winding down its stimulus program.

Global economic growth remained mostly positive. Equities in the US reached new highs amid low volatility, while international equities posted strong gains. European stocks continued to gain. Asian markets were solid, and emerging markets outperformed most regions. Fixed income markets were mixed. High yield and emerging markets bonds were the top performers.

Given the uncertainty in today’s investment environment, we believe that active professional portfolio management offers a potential advantage. Active managers often have the knowledge and flexibility to find the best investment opportunities in the most challenging markets.

Even so, it’s best if investment decisions are based on your long-term goals rather than on short-term market and economic developments. We also encourage you to work with an experienced financial advisor who can help you set goals, determine your tolerance for risk, and build a diversified plan that’s right for you and make adjustments when necessary.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. We’re part of PGIM, a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart S. Parker, President

Prudential QMA Defensive Equity Fund

December 15, 2017

Prudential QMA Defensive Equity Fund 7

Your Fund’s Performance (unaudited)

Performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.pgiminvestments.com or by calling (800) 225-1852.

	Average Annual Total Returns as of 10/31/17 (with sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	10.12		9.19		4.57		—
Class B	10.71		9.49		4.38		—
Class C	14.72		9.61		4.38		—
Class Q	N/A		N/A		N/A		11.32* (12/28/16)
Class R	17.62		10.40		5.02		—
Class Z	16.84		10.71		5.42
S&P 500 Index	23.61		15.17		7.51		—
Russell 1000 Defensive Index	20.87		14.27		7.85		—
Lipper Large-Cap Core Funds Average	22.24		13.73		6.58		—
	Average Annual Total Returns as of 10/31/17 (without sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	16.53		10.43		5.16		—
Class B	15.71		9.63		4.38		—
Class C	15.72		9.61		4.38		—
Class Q	N/A		N/A		N/A		11.32* (12/28/16)
Class R	17.62		10.40		5.02		—
Class Z	16.84		10.71		5.42		—
S&P 500 Index	23.61		15.17		7.51		—
Russell 1000 Defensive Index	20.87		14.27		7.85		—
Lipper Large-Cap Core Funds Average	22.24		13.73		6.58		—

*Not annualized

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential QMA Defensive Equity Fund (Class Z shares) with a similar investment in the Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) and the Russell 1000 Defensive Index by portraying the initial account values at the beginning of the 10-year period for Class Z shares (October 31, 2007) and the account values at the end of the current fiscal year (October 31, 2017) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class B, Class C, Class Q, and Class R shares will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the Fund’s returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: PGIM Investments LLC and Lipper Inc.

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and Lipper Average are measured from the closest month-end to the Fund’s inception date.

Prudential QMA Defensive Equity Fund 9

Your Fund’s Performance (continued)

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

	Class A*	Class B**	Class C*	Class Q	Class R*	Class Z*
Maximum initial sales charge	5.50% of the public offering price	None	None	None	None	None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	5.00% (Yr. 1) 4.00% (Yr. 2) 3.00% (Yr. 3) 2.00% (Yr. 4) 1.00% (Yrs. 5/6) 0.00% (Yr. 7)	1.00% on sales made within 12 months of purchase	None	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.30% (0.25% currently)	1.00%	1.00%	None	0.75% (0.50% currently)	None

*Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 4 of this report for more information.

**Class B shares are closed to all purchase activity and no additional Class B shares may be purchased or acquired except by exchange from Class B shares of another Fund or through dividend or capital gains reinvestment.

Benchmark Definitions

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed. The cumulative total return for the Index measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 16.89%.

Russell 1000 Defensive Index—The Russell 1000 Defensive Index is unmanaged and measures the performance of the large-cap defensive segment of the US equity universe. It includes those Russell 1000 Index companies with relatively stable business conditions which are less sensitive to economic cycles, credit cycles, and market volatility based on their stability variables. Stability is measured in terms of volatility (price and earnings), leverage, and return on assets. The cumulative total return for the Index measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 15.54%.

Lipper Large-Cap Core Funds Average—The Lipper Large-Cap Core Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Large-Cap Core Funds universe for the periods noted. Funds in

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the Lipper Average invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large-cap core funds have wide latitude in the companies in which they invest. These funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share-growth value compared with the S&P 500 Index. The cumulative total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class Q shares through 10/31/17 is 15.86%.

Investors cannot invest directly in an index or average. The returns for the indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

Presentation of Fund Holdings

Five Largest Holdings expressed as a percentage of net assets as of 10/31/17 (%)
AT&T, Inc., Diversified Telecommunication Services	2.3
Verizon Communications, Inc., Diversified Telecommunication Services	2.2
Amazon.com, Inc., Internet & Direct Marketing Retail	2.1
Apple, Inc., Technology Hardware, Storage & Peripherals	2.0
Exxon Mobil Corp., Oil, Gas & Consumable Fuels	1.8

Holdings reflect only long-term investments and are subject to change.

Five Largest Industries expressed as a percentage of net assets as of 10/31/17 (%)
Banks	7.2
Oil, Gas & Consumable Fuels	5.8
Diversified Telecommunication Services	4.7
Beverages	3.4
Capital Markets	3.3

Industry weightings reflect only long-term investments and are subject to change.

Prudential QMA Defensive Equity Fund 11

Strategy and Performance Overview

How did the Fund perform?

• The Prudential QMA Defensive Equity Fund’s Class Z shares gained 16.84% for the 12-month reporting period ended October 31, 2017, underperforming the 23.61% gain of the S&P 500 Index, the 20.87% gain of the Russell 1000 Defensive Index, and the 22.24% gain of the Lipper Large-Cap Core Funds Average.

What were market conditions?

• In November 2016, after the reporting period began, the US election resulted in an upset Republican sweep. US stocks, especially financials, surged on optimism about President-Elect Donald Trump’s growth-friendly agenda. International stocks experienced lackluster performance, especially in Europe, which was fraught with political uncertainty. Meanwhile, fixed income investors appeared to believe the new US political landscape could lead to a stronger US economy, as evidenced by the rise in Treasury yields and the narrowing of credit spreads (yield differentials between corporate bonds and US Treasuries of comparable maturity). In December, the Federal Reserve (Fed) raised short-term interest rates and said it expected to hike rates three times in 2017.

• In the first quarter of 2017, US stocks soared in anticipation of policies by the new administration that could result in a more business-friendly market environment. However, in March, a failed attempt to repeal and replace the Affordable Care Act soured investor enthusiasm and US stocks gave up some of their gains. International stocks rose significantly, supported by a strengthening global economy. The fixed income market was buoyed by expectations of stimulative policies from the new administration and a modest upswing in US economic growth and inflation. In March, the Fed once again raised short-term interest rates.

• Heading into the second quarter, Washington, DC was bogged down in political intrigue, hearings, and investigations, as well as normal legislative challenges, rather than previously anticipated broad health care reform and fast-tracked stimulative fiscal policy. Nevertheless, US stocks advanced amid higher corporate earnings growth and sound economic fundamentals. International stocks also posted significant gains. European stocks continued their run, even as the UK began its formal legal process to leave the European Union. In the bond market, the political turmoil in Washington, DC, combined with modestly softer economic data, led to a modest decline in long-term US Treasury yields. The front, or short-term, end of the Treasury yield curve rose as the Fed implemented another rate hike in June and set the stage to start tapering its balance sheet by the end of 2017.

• During the third quarter, US stocks marched to record highs, though they experienced some volatility in August amid geopolitical tensions in Asia. Gains were driven by robust second-quarter earnings, a solid labor market, a strengthening economy, and expectations for a business-friendly tax agenda from the Trump administration. International equities

12 Visit our website at prudentialfunds.com

recorded double-digit gains, fueled by strong performance in Europe and the Pacific region. In the bond market, volatility remained near historic lows. Treasury yields were relatively stable, which along with improving global growth, sustained investors’ search for yield. Near the end of the reporting period in the fourth quarter, equities powered forward, and the Fed provided information on how it planned to reduce its balance sheet.

What worked?

• A consistent underweight through the reporting period to the energy sector due to its high valuations and volatility was a benefit for the Fund, as it was among the worst-performing sectors over the previous year, hindered by the low and volatile price of oil, and uncertain outlooks for many smaller players.

• An overweight to the industrial sector also helped returns. The sector performed in line with the overall market, but periodic intervals of outperformance coincided with larger weights to the sector, helping with the success of the position.

What didn’t work?

• A broad overweight to defensive sectors worked against the Fund over the past year. Stable interest rates and strong earnings growth in cyclical sectors, which are sensitive to changes in the economy, led to robust returns and historically low volatility for the broad market; a difficult environment for a portfolio focused on reducing drawdowns in investments and maximizing risk-adjusted returns.

• Specifically, overweights to defensive sectors such as utilities, consumer staples, telecommunication services, and real estate all detracted from returns to a moderate degree due to the cyclical focus of the market.

• Conversely, an underweight to technology detracted, as this cyclical sector saw resilient profits which led it to be the strongest performer over the past year, up close to 40%.

Did the Fund use derivatives and how did they affect performance?

• The Fund periodically utilized nominal positions in S&P 500 futures for the purpose of the Fund’s cash flow management. These instruments track the Fund’s underlying benchmark and did not materially impact performance.

Current outlook

• The Fund will attempt to provide long-term performance in line with broader equity markets, while reducing risk as measured by standard deviation and maximum drawdown. To do this, QMA will deploy its equity sector rotation strategy, which results in overweighting and underweighting certain sectors. The Fund may also make a tactical investment in CBOE Volatility Index^® (VIX^®) futures during times of excessive volatility to mitigate risk. At a time of historically low volatility, the Fund is well positioned in a complacent market environment to take advantage of a future downturn in market performance.

Prudential QMA Defensive Equity Fund 13

Fees and Expenses (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 held through the six-month period ended October 31, 2017. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account

14 Visit our website at pgiminvestments.com

over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Prudential  QMA Defensive Equity Fund		Beginning  Account Value May 1, 2017		Ending Account Value October 31, 2017		Annualized Expense Ratio Based on the Six-Month Period			Expenses  Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,062.50		1.26	%	$	6.55
	Hypothetical	$	1,000.00	$	1,018.85		1.26	%	$	6.41
Class B	Actual	$	1,000.00	$	1,058.50		2.01	%	$	10.43
	Hypothetical	$	1,000.00	$	1,015.07		2.01	%	$	10.21
Class C	Actual	$	1,000.00	$	1,057.80		2.01	%	$	10.43
	Hypothetical	$	1,000.00	$	1,015.07		2.01	%	$	10.21
Class Q	Actual	$	1,000.00	$	1,063.80		0.87	%	$	4.53
	Hypothetical	$	1,000.00	$	1,020.82		0.87	%	$	4.43
Class R	Actual	$	1,000.00	$	1,072.70		1.53	%	$	7.99
	Hypothetical	$	1,000.00	$	1,017.49		1.53	%	$	7.78
Class Z	Actual	$	1,000.00	$	1,063.80		1.01	%	$	5.25
	Hypothetical	$	1,000.00	$	1,020.11		1.01	%	$	5.14

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended October 31, 2017, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2017 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

Prudential QMA Defensive Equity Fund 15

Schedule of Investments

as of October 31, 2017

Description	Shares		Value
LONG-TERM INVESTMENTS    95.8%
COMMON STOCKS    95.8%
Aerospace & Defense    3.0%
Arconic, Inc.		4,933	$	123,917
Boeing Co. (The)		7,110		1,834,238
General Dynamics Corp.		3,570		724,639
L3 Technologies, Inc.		1,000		187,180
Lockheed Martin Corp.		3,210		989,193
Northrop Grumman Corp.		2,230		659,032
Raytheon Co.		3,720		670,344
Rockwell Collins, Inc.		2,080		282,048
Textron, Inc.		3,400		179,316
TransDigm Group, Inc.		620		172,050
United Technologies Corp.		9,510		1,138,917
				6,960,874
Air Freight & Logistics    0.9%
C.H. Robinson Worldwide, Inc.		1,800		141,354
Expeditors International of Washington, Inc.		2,300		134,274
FedEx Corp.		3,160		713,560
United Parcel Service, Inc. (Class B Stock)		8,820		1,036,614
				2,025,802
Airlines    0.6%
Alaska Air Group, Inc.		1,600		105,648
American Airlines Group, Inc.		5,500		257,510
Delta Air Lines, Inc.		8,500		425,255
Southwest Airlines Co.		7,000		377,020
United Continental Holdings, Inc.*		3,300		192,984
				1,358,417
Auto Components    0.2%
BorgWarner, Inc.		2,060		108,603
Delphi Automotive PLC		2,900		288,202
Goodyear Tire & Rubber Co. (The)		2,600		79,534
				476,339
Automobiles    0.5%
Ford Motor Co.		41,700		511,659
General Motors Co.		14,000		601,720
Harley-Davidson, Inc.		1,800		85,212
				1,198,591

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 17

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Banks    7.2%
Bank of America Corp.		111,700	$	3,059,463
BB&T Corp.		9,300		457,932
Citigroup, Inc.		31,100		2,285,850
Citizens Financial Group, Inc.		5,900		224,259
Comerica, Inc.		2,100		164,997
Fifth Third Bancorp		8,600		248,540
Huntington Bancshares, Inc.		12,900		178,020
JPMorgan Chase & Co.		40,100		4,034,461
KeyCorp		12,700		231,775
M&T Bank Corp.		1,780		296,851
People’s United Financial, Inc.		4,300		80,238
PNC Financial Services Group, Inc. (The)		5,500		752,345
Regions Financial Corp.		14,000		216,720
SunTrust Banks, Inc.		5,600		337,176
U.S. Bancorp		18,200		989,716
Wells Fargo & Co.		50,900		2,857,526
Zions Bancorporation		2,400		111,504
				16,527,373
Beverages    3.4%
Brown-Forman Corp. (Class B Stock)		3,500		199,570
Coca-Cola Co. (The)		68,400		3,145,032
Constellation Brands, Inc. (Class A Stock)		3,070		672,606
Dr. Pepper Snapple Group, Inc.		3,300		282,678
Molson Coors Brewing Co. (Class B Stock)		3,340		270,106
Monster Beverage Corp.*		7,400		428,682
PepsiCo, Inc.		25,460		2,806,456
				7,805,130
Biotechnology    1.8%
AbbVie, Inc.		10,600		956,650
Alexion Pharmaceuticals, Inc.*		1,480		177,097
Amgen, Inc.		4,830		846,313
Biogen, Inc.*		1,400		436,324
Celgene Corp.*		5,180		523,025
Gilead Sciences, Inc.		8,670		649,903
Incyte Corp.*		1,130		127,972
Regeneron Pharmaceuticals, Inc.*		510		205,336
Vertex Pharmaceuticals, Inc.*		1,670		244,204
				4,166,824

See Notes to Financial Statements.

18

Description	Shares		Value
COMMON STOCKS (Continued)
Building Products    0.4%
A.O. Smith Corp.		1,900	$	112,480
Allegion PLC		1,266		105,572
Fortune Brands Home & Security, Inc.		2,000		132,120
Johnson Controls International PLC		11,878		491,630
Masco Corp.		4,000		159,280
				1,001,082
Capital Markets    3.3%
Affiliated Managers Group, Inc.		680		126,820
Ameriprise Financial, Inc.		1,760		275,510
Bank of New York Mellon Corp. (The)		11,900		612,255
BlackRock, Inc.		1,430		673,287
Cboe Global Markets, Inc.		1,360		153,762
Charles Schwab Corp. (The)		13,700		614,308
CME Group, Inc.		3,920		537,706
E*TRADE Financial Corp.*		3,300		143,847
Franklin Resources, Inc.		3,890		163,886
Goldman Sachs Group, Inc. (The)		4,120		999,018
Intercontinental Exchange, Inc.		6,830		451,463
Invesco Ltd.		4,800		171,792
Moody’s Corp.		1,950		277,699
Morgan Stanley		16,200		810,000
Nasdaq, Inc.		1,400		101,710
Northern Trust Corp.		2,500		233,800
Raymond James Financial, Inc.		1,600		135,648
S&P Global, Inc.		2,970		464,716
State Street Corp.		4,300		395,600
T. Rowe Price Group, Inc.		2,800		260,120
				7,602,947
Chemicals    1.5%
Air Products & Chemicals, Inc.		1,460		232,768
Albemarle Corp.		740		104,259
CF Industries Holdings, Inc.		1,550		58,869
DowDuPont, Inc.		15,635		1,130,567
Eastman Chemical Co.		1,000		90,810
Ecolab, Inc.		1,740		227,348
FMC Corp.		900		83,574
International Flavors & Fragrances, Inc.		530		78,133
LyondellBasell Industries NV (Class A Stock)		2,160		223,625
Monsanto Co.		2,940		356,034
Mosaic Co. (The)		2,300		51,382

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 19

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Chemicals (cont’d.)
PPG Industries, Inc.		1,720	$	199,933
Praxair, Inc.		1,920		280,550
Sherwin-Williams Co. (The)		550		217,332
				3,335,184
Commercial Services & Supplies    0.4%
Cintas Corp.		1,100		163,944
Republic Services, Inc.		2,900		188,703
Stericycle, Inc.*		1,070		75,810
Waste Management, Inc.		5,200		427,284
				855,741
Communications Equipment    0.5%
Cisco Systems, Inc.		26,200		894,730
F5 Networks, Inc.*		340		41,232
Harris Corp.		630		87,771
Juniper Networks, Inc.		1,900		47,177
Motorola Solutions, Inc.		900		81,486
				1,152,396
Construction & Engineering    0.1%
Fluor Corp.		1,800		77,562
Jacobs Engineering Group, Inc.		1,500		87,315
Quanta Services, Inc.*		1,900		71,687
				236,564
Construction Materials    0.1%
Martin Marietta Materials, Inc.		420		91,077
Vulcan Materials Co.		890		108,358
				199,435
Consumer Finance    0.9%
American Express Co.		8,400		802,368
Capital One Financial Corp.		5,600		516,208
Discover Financial Services		4,400		292,732
Navient Corp.		3,600		44,856
Synchrony Financial		8,701		283,827
				1,939,991
Containers & Packaging    0.2%
Avery Dennison Corp.		600		63,702
Ball Corp.		2,300		98,739

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Containers & Packaging (cont’d.)
International Paper Co.		2,800	$	160,356
Packaging Corp. of America		630		73,250
Sealed Air Corp.		1,200		53,076
WestRock Co.		1,736		106,469
				555,592
Distributors    0.1%
Genuine Parts Co.		1,560		137,639
LKQ Corp.*		3,300		124,377
				262,016
Diversified Consumer Services    0.0%
H&R Block, Inc.		2,200		54,428
Diversified Financial Services    1.8%
Berkshire Hathaway, Inc. (Class B Stock)*		21,890		4,092,117
Leucadia National Corp.		3,900		98,670
				4,190,787
Diversified Telecommunication Services    4.7%
AT&T, Inc.		155,494		5,232,373
CenturyLink, Inc.(a)		13,900		263,961
Level 3 Communications, Inc.*		7,400		396,862
Verizon Communications, Inc.		103,300		4,944,971
				10,838,167
Electric Utilities    3.2%
Alliant Energy Corp.		3,800		164,388
American Electric Power Co., Inc.		8,100		602,721
Duke Energy Corp.		11,600		1,024,396
Edison International		5,400		431,730
Entergy Corp.		3,000		258,780
Eversource Energy		5,200		325,728
Exelon Corp.		15,900		639,339
FirstEnergy Corp.		7,300		240,535
NextEra Energy, Inc.		7,750		1,201,793
PG&E Corp.		8,500		491,045
Pinnacle West Capital Corp.		1,900		166,649
PPL Corp.		11,300		424,428
Southern Co. (The)		16,500		861,300
Xcel Energy, Inc.		8,400		415,968
				7,248,800

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 21

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Electrical Equipment    0.7%
Acuity Brands, Inc.		540	$	90,288
AMETEK, Inc.		3,000		202,470
Eaton Corp. PLC		5,700		456,114
Emerson Electric Co.		8,200		528,572
Rockwell Automation, Inc.		1,650		331,353
				1,608,797
Electronic Equipment, Instruments & Components    0.2%
Amphenol Corp. (Class A Stock)		1,640		142,680
Corning, Inc.		4,700		147,157
FLIR Systems, Inc.		700		32,774
TE Connectivity Ltd.		1,900		172,843
				495,454
Energy Equipment & Services    0.9%
Baker Hughes a GE Co.		4,900		154,007
Halliburton Co.		10,100		431,674
Helmerich & Payne, Inc.(a)		1,270		68,974
National Oilwell Varco, Inc.		4,400		150,436
Schlumberger Ltd.		16,119		1,031,616
TechnipFMC PLC (United Kingdom)		5,100		139,689
				1,976,396
Equity Real Estate Investment Trusts (REITs)    1.9%
Alexandria Real Estate Equities, Inc.		640		79,334
American Tower Corp.		2,920		419,516
Apartment Investment & Management Co. (Class A Stock)		1,000		43,980
AvalonBay Communities, Inc.		940		170,450
Boston Properties, Inc.		1,050		127,239
Crown Castle International Corp.		2,770		296,612
Digital Realty Trust, Inc.		1,400		165,816
Duke Realty Corp.		2,400		68,352
Equinix, Inc.		531		246,119
Equity Residential		2,500		168,150
Essex Property Trust, Inc.		450		118,094
Extra Space Storage, Inc.		900		73,431
Federal Realty Investment Trust		490		59,055
GGP, Inc.		4,200		81,732
HCP, Inc.		3,100		80,104
Host Hotels & Resorts, Inc.		5,000		97,800
Iron Mountain, Inc.		1,738		69,520
Kimco Realty Corp.		2,800		50,848

See Notes to Financial Statements.

22

Description	Shares		Value
COMMON STOCKS (Continued)
Equity Real Estate Investment Trusts (REITs) (cont’d.)
Macerich Co. (The)		700	$	38,220
Mid-America Apartment Communities, Inc.		780		79,833
Prologis, Inc.		3,600		232,488
Public Storage		1,020		211,395
Realty Income Corp.		1,900		101,973
Regency Centers Corp.		1,000		61,550
SBA Communications Corp.*		820		128,888
Simon Property Group, Inc.		2,120		329,300
SL Green Realty Corp.		680		65,062
UDR, Inc.		1,800		69,822
Ventas, Inc.		2,400		150,600
Vornado Realty Trust		1,190		89,083
Welltower, Inc.		2,500		167,400
Weyerhaeuser Co.		5,040		180,986
				4,322,752
Food & Staples Retailing    2.9%
Costco Wholesale Corp.		7,820		1,259,645
CVS Health Corp.		18,090		1,239,708
Kroger Co. (The)		15,900		329,130
Sysco Corp.		8,600		478,332
Wal-Mart Stores, Inc.		26,100		2,278,791
Walgreens Boots Alliance, Inc.		16,400		1,086,828
				6,672,434
Food Products    2.1%
Archer-Daniels-Midland Co.		10,000		408,700
Campbell Soup Co.		3,400		161,058
Conagra Brands, Inc.		7,400		252,784
General Mills, Inc.		10,300		534,776
Hershey Co. (The)		2,520		267,574
Hormel Foods Corp.		4,800		149,568
J.M. Smucker Co. (The)		2,030		215,281
Kellogg Co.		4,400		275,132
Kraft Heinz Co. (The)		10,600		819,698
McCormick & Co., Inc.		2,140		212,994
Mondelez International, Inc. (Class A Stock)		26,800		1,110,324
Tyson Foods, Inc. (Class A Stock)		5,200		379,132
				4,787,021
Health Care Equipment & Supplies    1.8%
Abbott Laboratories		11,457		621,313
Align Technology, Inc.*		480		114,710

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 23

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Health Care Equipment & Supplies (cont’d.)
Baxter International, Inc.		3,300	$	212,751
Becton, Dickinson and Co.		1,505		314,048
Boston Scientific Corp.*		9,000		253,260
C.R. Bard, Inc.		480		156,993
Cooper Cos., Inc. (The)		330		79,286
Danaher Corp.		4,100		378,307
DENTSPLY SIRONA, Inc.		1,500		91,605
Edwards Lifesciences Corp.*		1,400		143,122
Hologic, Inc.*		1,800		68,130
IDEXX Laboratories, Inc.*		580		96,379
Intuitive Surgical, Inc.*		750		281,520
Medtronic PLC		8,988		723,714
ResMed, Inc.		900		75,762
Stryker Corp.		2,130		329,873
Varian Medical Systems, Inc.*		610		63,556
Zimmer Biomet Holdings, Inc.		1,340		162,971
				4,167,300
Health Care Providers & Services    1.7%
Aetna, Inc.		2,200		374,066
AmerisourceBergen Corp.		1,050		80,798
Anthem, Inc.		1,740		364,026
Cardinal Health, Inc.		2,100		129,990
Centene Corp.*		1,200		112,404
Cigna Corp.		1,670		329,357
DaVita, Inc.*		980		59,525
Envision Healthcare Corp.*		800		34,080
Express Scripts Holding Co.*		3,800		232,902
HCA Healthcare, Inc.*		1,900		143,735
Henry Schein, Inc.*		1,080		84,888
Humana, Inc.		960		245,136
Laboratory Corp. of America Holdings*		680		104,523
McKesson Corp.		1,390		191,653
Patterson Cos., Inc.		500		18,500
Quest Diagnostics, Inc.		880		82,526
UnitedHealth Group, Inc.		6,400		1,345,408
Universal Health Services, Inc. (Class B Stock)		590		60,593
				3,994,110
Health Care Technology    0.1%
Cerner Corp.*		2,100		141,792

See Notes to Financial Statements.

24

Description	Shares		Value
COMMON STOCKS (Continued)
Hotels, Restaurants & Leisure    1.9%
Carnival Corp.		4,400	$	292,116
Chipotle Mexican Grill, Inc.*		270		73,413
Darden Restaurants, Inc.		1,300		106,951
Hilton Worldwide Holdings, Inc.		2,200		159,016
Marriott International, Inc. (Class A Stock)		3,340		399,063
McDonald’s Corp.		8,650		1,443,772
MGM Resorts International		5,500		172,425
Royal Caribbean Cruises Ltd.		1,840		227,737
Starbucks Corp.		15,400		844,536
Wyndham Worldwide Corp.		1,100		117,535
Wynn Resorts Ltd.		860		126,841
Yum! Brands, Inc.		3,700		275,465
				4,238,870
Household Durables    0.4%
D.R. Horton, Inc.		3,600		159,156
Garmin Ltd.		1,200		67,932
Leggett & Platt, Inc.		1,400		66,164
Lennar Corp. (Class A Stock)		2,200		122,474
Mohawk Industries, Inc.*		680		177,997
Newell Brands, Inc.		5,200		212,056
PulteGroup, Inc.		2,900		87,667
Whirlpool Corp.		780		127,865
				1,021,311
Household Products    2.7%
Church & Dwight Co., Inc.		4,440		200,555
Clorox Co. (The)		2,300		291,019
Colgate-Palmolive Co.		15,700		1,106,065
Kimberly-Clark Corp.		6,300		708,813
Procter & Gamble Co. (The)		45,500		3,928,470
				6,234,922
Independent Power & Renewable Electricity Producers    0.1%
AES Corp.		10,900		115,867
NRG Energy, Inc.		4,900		122,500
				238,367
Industrial Conglomerates    2.5%
3M Co.		7,640		1,758,651
General Electric Co.		110,720		2,232,115
Honeywell International, Inc.		9,760		1,407,002
Roper Technologies, Inc.		1,310		338,203
				5,735,971

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 25

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Insurance    2.9%
Aflac, Inc.		4,600	$	385,894
Allstate Corp. (The)		4,200		394,212
American International Group, Inc.		10,400		671,944
Aon PLC		2,940		421,684
Arthur J. Gallagher & Co.		2,200		139,326
Assurant, Inc.		710		71,462
Brighthouse Financial, Inc.*		1,190		73,994
Chubb Ltd.		5,347		806,435
Cincinnati Financial Corp.		1,800		126,306
Everest Re Group Ltd.		500		118,725
Hartford Financial Services Group, Inc. (The)		4,300		236,715
Lincoln National Corp.		2,600		197,028
Loews Corp.		3,300		163,383
Marsh & McLennan Cos., Inc.		5,900		477,487
MetLife, Inc.		12,200		653,676
Principal Financial Group, Inc.		3,200		210,720
Progressive Corp. (The)		6,800		330,820
Torchmark Corp.		1,300		109,369
Travelers Cos., Inc. (The)		3,200		423,840
Unum Group		2,700		140,508
Willis Towers Watson PLC		1,580		254,506
XL Group Ltd. (Bermuda)		3,100		125,457
				6,533,491
Internet & Direct Marketing Retail    3.0%
Amazon.com, Inc.*		4,260		4,708,493
Expedia, Inc.		1,310		163,305
Netflix, Inc.*		4,610		905,542
Priceline Group, Inc. (The)*		530		1,013,339
TripAdvisor, Inc.*		1,090		40,875
				6,831,554
Internet Software & Services    2.5%
Akamai Technologies, Inc.*		900		47,025
Alphabet, Inc. (Class A Stock)*		1,570		1,621,873
Alphabet, Inc. (Class C Stock)*		1,591		1,617,474
eBay, Inc.*		5,200		195,728
Facebook, Inc. (Class A Stock)*		12,440		2,239,946
VeriSign, Inc.*		450		48,384
				5,770,430

See Notes to Financial Statements.

26

Description	Shares		Value
COMMON STOCKS (Continued)
IT Services    2.1%
Accenture PLC (Class A Stock)		3,250	$	462,670
Alliance Data Systems Corp.		260		58,170
Automatic Data Processing, Inc.		2,330		270,886
Cognizant Technology Solutions Corp. (Class A Stock)		3,120		236,090
CSRA, Inc.		800		25,592
DXC Technology Co.		1,459		133,528
Fidelity National Information Services, Inc.		1,800		166,968
Fiserv, Inc.*		1,110		143,667
Gartner, Inc.*		480		60,149
Global Payments, Inc.		800		83,160
International Business Machines Corp.		4,550		700,973
Mastercard, Inc. (Class A Stock)		4,900		728,973
Paychex, Inc.		1,700		108,443
PayPal Holdings, Inc.*		5,900		428,104
Total System Services, Inc.		900		64,845
Visa, Inc. (Class A Stock)		9,600		1,055,808
Western Union Co. (The)		2,400		47,664
				4,775,690
Leisure Products    0.1%
Hasbro, Inc.		1,230		113,886
Mattel, Inc.(a)		3,600		50,832
				164,718
Life Sciences Tools & Services    0.5%
Agilent Technologies, Inc.		2,100		142,863
Illumina, Inc.*		970		199,034
Mettler-Toledo International, Inc.*		170		116,047
PerkinElmer, Inc.		700		50,624
Quintiles IMS Holdings, Inc.*		1,000		108,100
Thermo Fisher Scientific, Inc.		2,650		513,649
Waters Corp.*		530		103,907
				1,234,224
Machinery    2.1%
Caterpillar, Inc.		7,560		1,026,648
Cummins, Inc.		2,020		357,298
Deere & Co.		4,100		544,808
Dover Corp.		2,000		190,980
Flowserve Corp.		1,600		70,512
Fortive Corp.		3,950		285,427
Illinois Tool Works, Inc.		3,970		621,384

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 27

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Machinery (cont’d.)
Ingersoll-Rand PLC		3,300	$	292,380
PACCAR, Inc.		4,500		322,785
Parker-Hannifin Corp.		1,710		312,263
Pentair PLC (United Kingdom)		2,100		147,966
Snap-on, Inc.		740		116,757
Stanley Black & Decker, Inc.		1,960		316,638
Xylem, Inc.		2,300		153,019
				4,758,865
Media    2.7%
CBS Corp. (Class B Stock)		3,900		218,868
Charter Communications, Inc. (Class A Stock)*		2,150		718,465
Comcast Corp. (Class A Stock)		50,200		1,808,706
Discovery Communications, Inc. (Class A Stock)*(a)		1,600		30,208
Discovery Communications, Inc. (Class C Stock)*		2,100		37,401
DISH Network Corp. (Class A Stock)*		2,400		116,496
Interpublic Group of Cos., Inc. (The)		4,200		80,850
News Corp. (Class A Stock)		4,050		55,323
News Corp. (Class B Stock)		1,300		18,070
Omnicom Group, Inc.		2,500		167,975
Scripps Networks Interactive, Inc. (Class A Stock)		1,000		83,280
Time Warner, Inc.		8,310		816,790
Twenty-First Century Fox, Inc. (Class A Stock)		11,200		292,880
Twenty-First Century Fox, Inc. (Class B Stock)		4,600		117,070
Viacom, Inc. (Class B Stock)		3,700		88,911
Walt Disney Co. (The)		16,490		1,612,887
				6,264,180
Metals & Mining    0.2%
Freeport-McMoRan, Inc.*		8,900		124,422
Newmont Mining Corp.		3,500		126,560
Nucor Corp.		2,100		121,443
				372,425
Multi-Utilities    1.7%
Ameren Corp.		4,000		247,960
CenterPoint Energy, Inc.		7,100		210,018
CMS Energy Corp.		4,600		222,502
Consolidated Edison, Inc.		5,100		438,855
Dominion Energy, Inc.		10,600		860,084
DTE Energy Co.		2,970		328,066
NiSource, Inc.		5,300		139,761

See Notes to Financial Statements.

28

Description	Shares		Value
COMMON STOCKS (Continued)
Multi-Utilities (cont’d.)
Public Service Enterprise Group, Inc.		8,400	$	413,280
SCANA Corp.		2,300		99,222
Sempra Energy		4,160		488,800
WEC Energy Group, Inc.		5,184		349,350
				3,797,898
Multiline Retail    0.4%
Dollar General Corp.		2,800		226,352
Dollar Tree, Inc.*		2,500		228,125
Kohl’s Corp.		1,800		75,168
Macy’s, Inc.		3,200		60,032
Nordstrom, Inc.		1,200		47,580
Target Corp.		5,800		342,432
				979,689
Oil, Gas & Consumable Fuels    5.8%
Anadarko Petroleum Corp.		6,530		322,386
Andeavor		1,680		178,483
Apache Corp.		4,400		182,028
Cabot Oil & Gas Corp.		5,300		146,810
Chesapeake Energy Corp.*(a)		10,500		40,950
Chevron Corp.		22,050		2,555,374
Cimarex Energy Co.		1,110		129,792
Concho Resources, Inc.*		1,730		232,183
ConocoPhillips		14,100		721,215
Devon Energy Corp.		6,100		225,090
EOG Resources, Inc.		6,710		670,128
EQT Corp.		1,970		123,204
Exxon Mobil Corp.		49,320		4,110,822
Hess Corp.		3,130		138,221
Kinder Morgan, Inc.		22,300		403,853
Marathon Oil Corp.		9,800		139,356
Marathon Petroleum Corp.		5,880		351,271
Newfield Exploration Co.*		2,300		70,817
Noble Energy, Inc.		5,600		156,072
Occidental Petroleum Corp.		8,900		574,673
ONEOK, Inc.		4,400		238,788
Phillips 66		5,000		455,400
Pioneer Natural Resources Co.		1,980		296,347
Range Resources Corp.		2,600		47,086
Valero Energy Corp.		5,100		402,339
Williams Cos., Inc. (The)		9,600		273,600
				13,186,288

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 29

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Personal Products    0.3%
Coty, Inc. (Class A Stock)		8,400	$	129,360
Estee Lauder Cos., Inc. (The) (Class A Stock)		3,990		446,122
				575,482
Pharmaceuticals    3.0%
Allergan PLC		2,218		393,096
Bristol-Myers Squibb Co.		10,900		672,094
Eli Lilly & Co.		6,400		524,416
Johnson & Johnson		17,760		2,475,922
Merck & Co., Inc.		18,100		997,129
Mylan NV*		3,500		124,985
Perrigo Co. PLC		850		68,841
Pfizer, Inc.		39,400		1,381,364
Zoetis, Inc.		3,200		204,224
				6,842,071
Professional Services    0.3%
Equifax, Inc.		1,540		167,136
IHS Markit Ltd.*		4,600		196,006
Nielsen Holdings PLC		4,300		159,401
Robert Half International, Inc.		1,600		82,832
Verisk Analytics, Inc.*		2,000		170,100
				775,475
Real Estate Management & Development    0.0%
CBRE Group, Inc. (Class A Stock)*		2,000		78,640
Road & Rail    1.1%
CSX Corp.		11,700		590,031
J.B. Hunt Transport Services, Inc.		1,090		115,965
Kansas City Southern		1,350		140,697
Norfolk Southern Corp.		3,690		484,940
Union Pacific Corp.		10,240		1,185,690
				2,517,323
Semiconductors & Semiconductor Equipment    2.0%
Advanced Micro Devices, Inc.*(a)		4,200		46,137
Analog Devices, Inc.		1,948		177,852
Applied Materials, Inc.		5,600		316,008
Broadcom Ltd.		2,142		565,295
Intel Corp.		24,600		1,119,054
KLA-Tencor Corp.		830		90,379

See Notes to Financial Statements.

30

Description	Shares		Value
COMMON STOCKS (Continued)
Semiconductors & Semiconductor Equipment (cont’d.)
Lam Research Corp.		860	$	179,370
Microchip Technology, Inc.		1,200		113,760
Micron Technology, Inc.*		5,800		256,998
NVIDIA Corp.		3,150		651,452
Qorvo, Inc.*		700		53,067
QUALCOMM, Inc.		7,700		392,777
Skyworks Solutions, Inc.		970		110,444
Texas Instruments, Inc.		5,200		502,788
Xilinx, Inc.		1,300		95,797
				4,671,178
Software    2.8%
Activision Blizzard, Inc.		4,000		261,960
Adobe Systems, Inc.*		2,590		453,664
ANSYS, Inc.*		450		61,519
Autodesk, Inc.*		1,150		143,704
CA, Inc.		1,600		51,808
Cadence Design Systems, Inc.*		1,400		60,424
Citrix Systems, Inc.*		800		66,088
Electronic Arts, Inc.*		1,620		193,752
Intuit, Inc.		1,280		193,306
Microsoft Corp.		40,400		3,360,472
Oracle Corp.		15,800		804,220
Red Hat, Inc.*		930		112,372
salesforce.com, Inc.*		3,600		368,424
Symantec Corp.		3,200		104,000
Synopsys, Inc.*		800		69,216
				6,304,929
Specialty Retail    2.1%
Advance Auto Parts, Inc.		810		66,209
AutoZone, Inc.*		300		176,850
Best Buy Co., Inc.		2,800		156,744
CarMax, Inc.*		2,000		150,200
Foot Locker, Inc.		1,400		42,112
Gap, Inc. (The)		2,300		59,777
Home Depot, Inc. (The)		12,590		2,087,170
L Brands, Inc.		2,600		111,904
Lowe’s Cos., Inc.		9,000		719,550
O’Reilly Automotive, Inc.*		940		198,293
Ross Stores, Inc.		4,180		265,388
Signet Jewelers Ltd.		670		43,932

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 31

Schedule of Investments (continued)

as of October 31, 2017

Description	Shares		Value
COMMON STOCKS (Continued)
Specialty Retail (cont’d.)
Tiffany & Co.		1,140	$	106,727
TJX Cos., Inc. (The)		6,800		474,640
Tractor Supply Co.		1,400		84,364
Ulta Beauty, Inc.*		630		127,128
				4,870,988
Technology Hardware, Storage & Peripherals    2.3%
Apple, Inc.		27,110		4,582,674
Hewlett Packard Enterprise Co.		8,600		119,712
HP, Inc.		8,700		187,485
NetApp, Inc.		1,400		62,188
Seagate Technology PLC		1,500		55,455
Western Digital Corp.		1,532		136,762
Xerox Corp.		1,050		31,826
				5,176,102
Textiles, Apparel & Luxury Goods    0.7%
Hanesbrands, Inc.		3,800		85,500
Michael Kors Holdings Ltd.*		1,600		78,096
NIKE, Inc. (Class B Stock)		14,020		770,960
PVH Corp.		830		105,252
Ralph Lauren Corp.		570		50,975
Tapestry, Inc.		3,000		122,850
Under Armour, Inc. (Class A Stock)*(a)		1,900		23,788
Under Armour, Inc. (Class C Stock)*(a)		1,911		22,034
VF Corp.		3,520		245,168
				1,504,623
Tobacco    2.2%
Altria Group, Inc.		34,200		2,196,324
Philip Morris International, Inc.		27,680		2,896,435
				5,092,759
Trading Companies & Distributors    0.2%
Fastenal Co.		3,700		173,789
United Rentals, Inc.*		1,080		152,798
W.W. Grainger, Inc.		680		134,436
				461,023

See Notes to Financial Statements.

32

Description						Shares		Value
Water Utilities    0.1%
American Water Works Co., Inc.							3,000	$	263,280
TOTAL COMMON STOCKS (cost $158,286,733)									219,431,302
						Units
RIGHTS*    0.0%
Food & Staples Retailing
Safeway Casa Ley, expiring 01/30/19, CVR^							2,400		1,278
Safeway PDC, expiring 01/30/19, CVR^							2,400		41
TOTAL RIGHTS (cost $2,512)									1,319
TOTAL LONG-TERM INVESTMENTS (cost $158,289,245)									219,432,621
						Shares
SHORT-TERM INVESTMENTS    4.5%
AFFILIATED MUTUAL FUNDS    4.2%
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund(w)							9,196,634		9,196,634
Prudential Investment Portfolios 2 - Prudential Institutional Money Market Fund (cost $530,112; includes $529,510 of cash collateral for securities on loan)(b)(w)							530,071		530,123
TOTAL AFFILIATED MUTUAL FUNDS (cost $9,726,746)									9,726,757
	Interest Rate			Maturity Date		Principal Amount (000)#
U.S. TREASURY OBLIGATION(n)    0.3%
U.S. Treasury Bills(k) (cost $599,150)		1.020	%		12/21/17		600		599,196
TOTAL SHORT-TERM INVESTMENTS (cost $10,325,896)									10,325,953
TOTAL INVESTMENTS    100.3% (cost $168,615,141)									229,758,574
Liabilities in excess of other assets(z)    (0.3)%									(666,435	)
NET ASSETS    100.0%								$	229,092,139

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 33

Schedule of Investments (continued)

as of October 31, 2017

The following abbreviations are used in the annual report:

CVR—Contingent Value Rights

LIBOR—London Interbank Offered Rate

REIT(s)—Real Estate Investment Trust(s)

^ Indicates a Level 3 security. The aggregate value of Level 3 securities is $1,319 and 0.0% of net assets.

* Non-income producing security.

# Principal amount is shown in U.S. dollars unless otherwise stated.

(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $510,417; cash collateral of $529,510 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.

(b) Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(k) Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(n) Rates shown reflect yield to maturity at purchase date.

(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund and Prudential Institutional Money Market Fund.

(z) Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end:

Futures contracts outstanding at October 31, 2017:

Number of Contracts		Type	Expiration Date		Value at Trade Date		Current Notional Amount		Value/ Unrealized Appreciation (Depreciation)
		Long Positions:
	70	S&P 500 E-Mini Index		Dec. 2017	$	8,661,490	$	9,004,450	$	342,960

A security with a market value of $599,196 has been segregated with Goldman Sachs & Co. to cover requirements for open futures contracts at October 31, 2017.

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—unadjusted quoted prices generally in active markets for identical securities.

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

See Notes to Financial Statements.

34

The following is a summary of the inputs used as of October 31, 2017 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Aerospace & Defense	$	6,960,874	$	—	$	—
Air Freight & Logistics		2,025,802		—		—
Airlines		1,358,417		—		—
Auto Components		476,339		—		—
Automobiles		1,198,591		—		—
Banks		16,527,373		—		—
Beverages		7,805,130		—		—
Biotechnology		4,166,824		—		—
Building Products		1,001,082		—		—
Capital Markets		7,602,947		—		—
Chemicals		3,335,184		—		—
Commercial Services & Supplies		855,741		—		—
Communications Equipment		1,152,396		—		—
Construction & Engineering		236,564		—		—
Construction Materials		199,435		—		—
Consumer Finance		1,939,991		—		—
Containers & Packaging		555,592		—		—
Distributors		262,016		—		—
Diversified Consumer Services		54,428		—		—
Diversified Financial Services		4,190,787		—		—
Diversified Telecommunication Services		10,838,167		—		—
Electric Utilities		7,248,800		—		—
Electrical Equipment		1,608,797		—		—
Electronic Equipment, Instruments & Components		495,454		—		—
Energy Equipment & Services		1,976,396		—		—
Equity Real Estate Investment Trusts (REITs)		4,322,752		—		—
Food & Staples Retailing		6,672,434		—		—
Food Products		4,787,021		—		—
Health Care Equipment & Supplies		4,167,300		—		—
Health Care Providers & Services		3,994,110		—		—
Health Care Technology		141,792		—		—
Hotels, Restaurants & Leisure		4,238,870		—		—
Household Durables		1,021,311		—		—
Household Products		6,234,922		—		—
Independent Power & Renewable Electricity Producers		238,367		—		—
Industrial Conglomerates		5,735,971		—		—
Insurance		6,533,491		—		—
Internet & Direct Marketing Retail		6,831,554		—		—
Internet Software & Services		5,770,430		—		—
IT Services		4,775,690		—		—

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 35

Schedule of Investments (continued)

as of October 31, 2017

	Level 1		Level 2		Level 3
Investments in Securities (Continued)
Common Stocks (continued)
Leisure Products	$	164,718	$	—	$	—
Life Sciences Tools & Services		1,234,224		—		—
Machinery		4,758,865		—		—
Media		6,264,180		—		—
Metals & Mining		372,425		—		—
Multi-Utilities		3,797,898		—		—
Multiline Retail		979,689		—		—
Oil, Gas & Consumable Fuels		13,186,288		—		—
Personal Products		575,482		—		—
Pharmaceuticals		6,842,071		—		—
Professional Services		775,475		—		—
Real Estate Management & Development		78,640		—		—
Road & Rail		2,517,323		—		—
Semiconductors & Semiconductor Equipment		4,671,178		—		—
Software		6,304,929		—		—
Specialty Retail		4,870,988		—		—
Technology Hardware, Storage & Peripherals		5,176,102		—		—
Textiles, Apparel & Luxury Goods		1,504,623		—		—
Tobacco		5,092,759		—		—
Trading Companies & Distributors		461,023		—		—
Water Utilities		263,280		—		—
Rights
Food & Staples Retailing		—		—		1,319
Affiliated Mutual Funds		9,726,757		—		—
U.S. Treasury Obligation		—		599,196		—
Other Financial Instruments*
Futures Contracts		342,960		—		—
Total	$	229,501,019	$	599,196	$	1,319

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value.

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

See Notes to Financial Statements.

36

Industry Classification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of October 31, 2017 were as follows (unaudited):

Banks	7.2	%
Oil, Gas & Consumable Fuels	5.8
Diversified Telecommunication Services	4.7
Affiliated Mutual Funds (including 0.2% of collateral for securities on loan)	4.2
Beverages	3.4
Capital Markets	3.3
Electric Utilities	3.2
Aerospace & Defense	3.0
Pharmaceuticals	3.0
Internet & Direct Marketing Retail	3.0
Food & Staples Retailing	2.9
Insurance	2.9
Software	2.8
Media	2.7
Household Products	2.7
Internet Software & Services	2.5
Industrial Conglomerates	2.5
Technology Hardware, Storage & Peripherals	2.3
Tobacco	2.2
Specialty Retail	2.1
Food Products	2.1
IT Services	2.1
Machinery	2.1
Semiconductors & Semiconductor Equipment	2.0
Equity Real Estate Investment Trusts (REITs)	1.9
Hotels, Restaurants & Leisure	1.9
Diversified Financial Services	1.8
Health Care Equipment & Supplies	1.8
Biotechnology	1.8
Health Care Providers & Services	1.7
Multi-Utilities	1.7
Chemicals	1.5
Road & Rail	1.1
Air Freight & Logistics	0.9
Energy Equipment & Services	0.9	%
Consumer Finance	0.9
Electrical Equipment	0.7
Textiles, Apparel & Luxury Goods	0.7
Airlines	0.6
Life Sciences Tools & Services	0.5
Automobiles	0.5
Communications Equipment	0.5
Household Durables	0.4
Building Products	0.4
Multiline Retail	0.4
Commercial Services & Supplies	0.4
Professional Services	0.3
U.S. Treasury Obligation	0.3
Personal Products	0.3
Containers & Packaging	0.2
Electronic Equipment, Instruments & Components	0.2
Auto Components	0.2
Trading Companies & Distributors	0.2
Metals & Mining	0.2
Water Utilities	0.1
Distributors	0.1
Independent Power & Renewable Electricity Producers	0.1
Construction & Engineering	0.1
Construction Materials	0.1
Leisure Products	0.1
Health Care Technology	0.1
Real Estate Management & Development	0.0	*
Diversified Consumer Services	0.0	*
	100.3
Liabilities in excess of other assets	(0.3	)
	100.0	%

* Less than +/- 0.05%

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity contracts risk. The effect of

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 37

Schedule of Investments (continued)

as of October 31, 2017

such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of October 31, 2017 as presented in the Statement of Assets and Liabilities:

	Asset Derivatives					Liability Derivatives
Derivatives not accounted for as hedging instruments, carried at fair value	Balance Sheet Location		Fair Value			Balance Sheet Location		Fair Value
Equity contracts		Due from/to broker—variation margin futures	$	342,960	*		—	$	—
Equity contracts		Unaffiliated investments		1,319			—		—
Total			$	344,279				$	—

* Includes cumulative appreciation (depreciation) as reported in schedule of open futures contracts and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended October 31, 2017 are as follows:

Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Equity contracts	$	1,280,543

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Rights(1)		Futures		Total
Equity contracts	$	754	$	432,862	$	433,616

(1) Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

See Notes to Financial Statements.

38

For the year ended October 31, 2017, the Fund’s average volume of derivative activities is as follows:

Futures Contracts - Long Positions(1)
$	8,581,140

(1) Value at Trade Date.

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.

Offsetting of financial instruments/transactions assets and liabilities:

Description	Gross Market Value of Recognized Assets/(Liabilities)		Collateral Pledged/(Received)(1)			Net Amount
Securities on Loan	$	510,417	$	(510,417	)	$	—

(1) Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions.

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 39

Statement of Assets & Liabilities

as of October 31, 2017

Assets
Investments at value, including securities on loan of $510,417:
Unaffiliated investments (cost $158,888,395)	$	220,031,817
Affiliated investments (cost $9,726,746)		9,726,757
Dividends and interest receivable		285,968
Receivable for Fund shares sold		85,252
Due from broker—variation margin futures		15,400
Tax reclaim receivable		7,894
Receivable for investments sold		862
Prepaid expenses		2,068
Total assets		230,156,018
Liabilities
Payable to broker for collateral for securities on loan		529,510
Payable for Fund shares reacquired		214,000
Management fee payable		146,693
Distribution fee payable		75,006
Accrued expenses and other liabilities		68,680
Affiliated transfer agent fee payable		29,823
Deferred trustees’ fees		167
Total liabilities		1,063,879
Net Assets	$	229,092,139
Net assets were comprised of:
Shares of beneficial interest, at par	$	15,523
Paid-in capital in excess of par		162,652,087
		162,667,610
Undistributed net investment income		1,442,957
Accumulated net realized gain on investment transactions		3,496,155
Net unrealized appreciation on investments and foreign currencies		61,485,417
Net assets, October 31, 2017	$	229,092,139

See Notes to Financial Statements.

40

Class A
Net asset value and redemption price per share, ($179,230,623 ÷ 12,125,537 shares of beneficial interest issued and outstanding)	$	14.78
Maximum sales charge (5.50% of offering price)		0.86
Maximum offering price to public	$	15.64
Class B
Net asset value, offering price and redemption price per share, ($6,194,853 ÷ 422,665 shares of beneficial interest issued and outstanding)	$	14.66
Class C
Net asset value, offering price and redemption price per share, ($37,005,654 ÷ 2,525,666 shares of beneficial interest issued and outstanding)	$	14.65
Class Q
Net asset value, offering price and redemption price per share, ($114,240 ÷ 7,691 shares of beneficial interest issued and outstanding)	$	14.85
Class R
Net asset value, offering price and redemption price per share, ($7,058 ÷ 473 shares of beneficial interest issued and outstanding)	$	14.91
Class Z
Net asset value, offering price and redemption price per share, ($6,539,711 ÷ 441,006 shares of beneficial interest issued and outstanding)	$	14.83

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 41

Statement of Operations

Year Ended October 31, 2017

Net Investment Income (Loss)
Income
Unaffiliated dividend income	$	5,018,045
Affiliated dividend income		104,199
Income from securities lending, net (including affiliated income of $2,916)		7,117
Interest income		3,731
Total income		5,133,092
Expenses
Management fee		1,714,432
Distribution fee—Class A		526,970
Distribution fee—Class B		74,307
Distribution fee—Class C		384,969
Distribution fee—Class R		2,587
Transfer agent’s fees and expenses (including affiliated expense of $147,200)		321,000
Registration fees		92,000
Custodian and accounting fees		89,000
Audit fee		49,000
Shareholders’ reports		39,000
Legal fees and expenses		23,000
Trustees’ fees		13,000
Miscellaneous		16,097
Total expenses		3,345,362
Less: Distribution fee waiver—Class A		(87,828	)
Distribution fee waiver—Class R		(862	)
Net expenses		3,256,672
Net investment income (loss)		1,876,420
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions (including affiliated of $68)		6,590,999
Futures transactions		1,280,543
Foreign currency transactions		(1,796	)
		7,869,746
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated of $(149))		24,494,793
Futures		432,862
Foreign currencies		1,792
		24,929,447
Net gain (loss) on investment and foreign currency transactions		32,799,193
Net Increase (Decrease) In Net Assets Resulting From Operations	$	34,675,613

See Notes to Financial Statements.

42

Statement of Changes in Net Assets

	Year Ended October 31,
	2017			2016
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	1,876,420		$	2,402,535
Net realized gain (loss) on investment and foreign currency transactions		7,869,746			14,576,675
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		24,929,447			(10,996,934	)
Net increase (decrease) in net assets resulting from operations		34,675,613			5,982,276
Dividends and Distributions
Dividends from net investment income
Class A		(2,090,702	)		(1,783,179	)
Class B		(42,128	)		(32,714	)
Class C		(201,451	)		(124,223	)
Class Q		—			—
Class R		(3,166	)		(2,642	)
Class Z		(96,074	)		(69,723	)
		(2,433,521	)		(2,012,481	)
Distributions from net realized gains
Class A		(10,624,756	)		(3,297,410	)
Class B		(520,479	)		(218,683	)
Class C		(2,488,861	)		(830,401	)
Class Q		—			—
Class R		(20,046	)		(6,443	)
Class Z		(407,553	)		(103,730	)
		(14,061,695	)		(4,456,667	)
Fund share transactions (Net of share conversions)
Net proceeds from shares sold		7,282,000			13,780,024
Net asset value of shares issued in reinvestment of dividends and distributions		16,111,166			6,324,163
Cost of shares reacquired		(36,046,707	)		(34,975,736	)
Net increase (decrease) in net assets from Fund share transactions		(12,653,541	)		(14,871,549	)
Total increase (decrease)		5,526,856			(15,358,421	)
Net Assets:
Beginning of year		223,565,283			238,923,704
End of year(a)	$	229,092,139		$	223,565,283
(a) Includes undistributed net investment income of:	$	1,442,957		$	1,934,348

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 43

Notes to Financial Statements

Prudential Investment Portfolios 16 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on July 29, 1998. The Trust currently consists of two funds: Prudential Income Builder Fund and Prudential QMA Defensive Equity Fund which are diversified funds. These financial statements relate to the Prudential QMA Defensive Equity Fund (the “Fund”).

The investment objective of the Fund is to seek long-term capital appreciation.

1. Accounting Policies

The Fund follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or “the Manager”) (formerly known as Prudential Investments LLC). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly scheduled quarterly meeting.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official

44

closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur expenses that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Trustees of the Fund. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

Prudential QMA Defensive Equity Fund 45

Notes to Financial Statements (continued)

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 rates of exchange;

(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, forward currency contracts, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.

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 futures transactions.

The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused

46

by changes in value of equities. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Master Netting Arrangements: The Trust, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.

Warrants and Rights: The Fund may hold warrants and rights acquired either through a direct purchase, included as part of a private placement, or pursuant to corporate actions. Warrants and rights entitle the holder to buy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such warrants and rights are held as long positions by the Fund until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board approved fair valuation procedures.

Securities Lending: The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of

Prudential QMA Defensive Equity Fund 47

Notes to Financial Statements (continued)

the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.

Concentration of Risk: 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 or economic instability or the level of governmental supervision and regulation of foreign securities markets.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.

Net investment income or loss (other than distribution fees which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects to pay dividends from net investment income and distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

48

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PGIM Investments has entered into a subadvisory agreement with Quantitative Management Associates, LLC (“QMA”). The subadvisory agreement provides that QMA will furnish investment advisory services in connection with the management of the Fund. In connection therewith, QMA is obligated to keep certain books and records of the Fund. PGIM Investments pays for the services of QMA, the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

The management fee paid to PGIM Investments is accrued daily and payable monthly at an annual rate of .75% of the average daily net assets up to $500 million, .70% of average daily net assets for the next $500 million and .65% of average daily net assets in excess of $1 billion. The effective management fee rate was .75% for the year ended October 31, 2017.

The Trust, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C shares, Class Q, Class R and Class Z of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B, Class C and Class R shares, pursuant to plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Q and Class Z shares of the Fund.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30%, 1% , 1% and .75% of the average daily net assets of the Class A, Class B, Class C and Class R shares, respectively. PIMS has contractually agreed through February 28, 2019 to limit such expenses to .25% and .50% of the average daily net assets of the Class A and Class R shares, respectively.

PIMS has advised the Fund that it received $120,180, in front-end sales charges resulting from sales of Class A shares, during the year ended October 31, 2017. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended October 31, 2017, it received $250, $7,212 and $3,310 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.

PGIM Investments, PIMS and QMA are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Prudential QMA Defensive Equity Fund 49

Notes to Financial Statements (continued)

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended October 31, 2017 no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the Prudential Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the Prudential Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended October 31, 2017, PGIM, Inc. was compensated $623 by PGIM Investments for managing the Fund’s securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended October 31, 2017, were $225,852,137 and $251,768,669, respectively.

5. Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. In order to present undistributed net investment income, accumulated net realized gain on investment transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income and accumulated net realized gain on investment transactions. For the year ended October 31, 2017, the adjustments were to increase undistributed net investment income

50

and decrease accumulated net realized gain on investment transactions by $65,710 due to foreign currency transactions and other book to tax differences. Net investment income, net realized gain (loss) on investment and foreign currency transactions and net assets were not affected by this change.

For the year ended October 31, 2017, the tax character of dividends paid by the Fund were $2,421,978 of ordinary income and $14,073,238 of long-term capital gains. For the year ended October 31, 2016, the tax character of dividends paid by the Fund were $2,012,481 of ordinary income and $4,456,667 of long-term capital gains.

As of October 31, 2017, the accumulated undistributed earnings on a tax basis were $6,129,447 of ordinary income and $3,185,584 of long-term capital gains. This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing differences between financial and tax reporting.

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2017 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$172,991,869	$62,036,284	$(4,926,619)	$57,109,665

The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales and other cost basis differences between financial and tax accounting.

Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

6. Capital

The Fund offers Class A, Class B, Class C, Class Q, Class R and Class Z shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. Class B shares are subject to a CDSC of 5%, which decreases by 1% annually to 1% in the fifth and sixth years and 0% in the seventh year. Class B shares automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class B shares are closed to new purchases. Class C shares are sold with a

Prudential QMA Defensive Equity Fund 51

Notes to Financial Statements (continued)

CDSC of 1% on sales made within 12 months of purchase. An exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class Q, Class R and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

The Fund has authorized an unlimited number of shares of beneficial interest at $.001 par value per share, divided into six classes, designated Class A, Class B, Class C, Class Q, Class R and Class Z.

As of October 31, 2017, Prudential through its affiliate entities, including affiliated funds, owned 750 shares of Class Q and 293 shares of Class R. At reporting period end, two shareholders of record held 35% of the Fund’s outstanding shares on behalf of multiple beneficial owners.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended October 31, 2017:
Shares sold		337,903		$	4,698,783
Shares issued in reinvestment of dividends and distributions		938,366			12,527,192
Shares reacquired		(1,660,772	)		(23,231,213	)
Net increase (decrease) in shares outstanding before conversion		(384,503	)		(6,005,238	)
Shares issued upon conversion from other share class(es)		319,919			4,515,722
Shares reacquired upon conversion into other share class(es)		(74,241	)		(1,045,384	)
Net increase (decrease) in shares outstanding		(138,825	)	$	(2,534,900	)
Year ended October 31, 2016:
Shares sold		567,867		$	7,727,845
Shares issued in reinvestment of dividends and distributions		386,671			5,007,395
Shares reacquired		(1,717,332	)		(23,193,564	)
Net increase (decrease) in shares outstanding before conversion		(762,794	)		(10,458,324	)
Shares issued upon conversion from other share class(es)		240,556			3,261,217
Shares reacquired upon conversion into other share class(es)		(53,272	)		(731,865	)
Net increase (decrease) in shares outstanding		(575,510	)	$	(7,928,972	)

52

Class B	Shares			Amount
Year ended October 31, 2017:
Shares sold		3,336		$	45,380
Shares issued in reinvestment of dividends and distributions		42,047			560,494
Shares reacquired		(87,123	)		(1,203,233	)
Net increase (decrease) in shares outstanding before conversion		(41,740	)		(597,359	)
Shares reacquired upon conversion into other share class(es)		(176,032	)		(2,476,652	)
Net increase (decrease) in shares outstanding		(217,772	)	$	(3,074,011	)
Year ended October 31, 2016:
Shares sold		20,217		$	272,889
Shares issued in reinvestment of dividends and distributions		19,353			250,234
Shares reacquired		(99,609	)		(1,344,719	)
Net increase (decrease) in shares outstanding before conversion		(60,039	)		(821,596	)
Shares reacquired upon conversion into other share class(es)		(211,481	)		(2,848,892	)
Net increase (decrease) in shares outstanding		(271,520	)	$	(3,670,488	)
Class C
Year ended October 31, 2017:
Shares sold		99,453		$	1,379,289
Shares issued in reinvestment of dividends and distributions		189,094			2,518,726
Shares reacquired		(539,499	)		(7,478,815	)
Net increase (decrease) in shares outstanding before conversion		(250,952	)		(3,580,800	)
Shares reacquired upon conversion into other share class(es)		(172,464	)		(2,399,983	)
Net increase (decrease) in shares outstanding		(423,416	)	$	(5,980,783	)
Year ended October 31, 2016:
Shares sold		185,313		$	2,517,562
Shares issued in reinvestment of dividends and distributions		68,958			891,629
Shares reacquired		(563,808	)		(7,650,426	)
Net increase (decrease) in shares outstanding before conversion		(309,537	)		(4,241,235	)
Shares reacquired upon conversion into other share class(es)		(54,815	)		(741,013	)
Net increase (decrease) in shares outstanding		(364,352	)	$	(4,982,248	)
Class Q
Period ended October 31, 2017*:
Shares sold		6,485		$	91,028
Shares reacquired		(7,090	)		(101,861	)
Net increase (decrease) in shares outstanding before conversion		(605	)		(10,833	)
Shares issued upon conversion from other share class(es)		8,296			119,640
Net increase (decrease) in shares outstanding		7,691		$	108,807
Class R
Year ended October 31, 2017:
Shares sold		2,446		$	33,655
Shares issued in reinvestment of dividends and distributions		1,739			23,213
Shares reacquired		(26,468	)		(390,139	)
Net increase (decrease) in shares outstanding		(22,283	)	$	(333,271	)
Year ended October 31, 2016:
Shares sold		1,427		$	18,898
Shares issued in reinvestment of dividends and distributions		702			9,085
Shares reacquired		(4,345	)		(60,678	)
Net increase (decrease) in shares outstanding		(2,216	)	$	(32,695	)

Prudential QMA Defensive Equity Fund 53

Notes to Financial Statements (continued)

Class Z	Shares			Amount
Year ended October 31, 2017:
Shares sold		74,620		$	1,033,865
Shares issued in reinvestment of dividends and distributions		36,016			481,541
Shares reacquired		(259,965	)		(3,641,446	)
Net increase (decrease) in shares outstanding before conversion		(149,329	)		(2,126,040	)
Shares issued upon conversion from other share class(es)		99,281			1,386,228
Shares reacquired upon conversion into other share class(es)		(6,970	)		(99,571	)
Net increase (decrease) in shares outstanding		(57,018	)	$	(839,383	)
Year ended October 31, 2016:
Shares sold		233,391		$	3,242,830
Shares issued in reinvestment of dividends and distributions		12,785			165,820
Shares reacquired		(198,129	)		(2,726,349	)
Net increase (decrease) in shares outstanding before conversion		48,047			682,301
Shares issued upon conversion from other share class(es)		77,250			1,060,553
Net increase (decrease) in shares outstanding		125,297		$	1,742,854

* Commencement of operations was December 28, 2016.

7. Borrowings

The Trust, on behalf of 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. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of .15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby

54

requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the reporting period ended October 31, 2017.

8. Other

At the Trust’s Board meeting in March 2017, the Board approved a change in the methodology of allocating certain expenses, such as Transfer Agent fees (including sub-transfer agent and networking fees) and Blue Sky fees. PGIM Investments implemented the changes effective November 1, 2017.

Prudential QMA Defensive Equity Fund 55

Financial Highlights

Class A Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017(b)			2016(b)			2015			2014(b)(f)			2014(b)			2013(b)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$13.68			$13.71			$14.26			$13.65			$12.86			$11.23
Income (loss) from investment operations:
Net investment income (loss)		.13			.16			.13			.03			.12			.13
Net realized and unrealized gain (loss) on investment transactions		2.02			.21			.24			.58			1.46			1.72
Total from investment operations		2.15			.37			.37			.61			1.58			1.85
Less Dividends and Distributions:
Dividends from net investment income		(.17	)		(.14	)		(.12	)		-			(.13	)		(.22	)
Distributions from net realized gains		(.88	)		(.26	)		(.80	)		-			(.66	)		-
Total dividends and distributions		(1.05	)		(.40	)		(.92	)		-			(.79	)		(.22	)
Net asset value, end of period		$14.78			$13.68			$13.71			$14.26			$13.65			$12.86
Total Return(a)		16.53%			2.85%			2.64%			4.47%			12.66%			16.69%
Ratios/Supplemental Data:
Net assets, end of period (000)		$179,231			$167,731			$176,009			$184,830			$181,385			$179,711
Average net assets (000)		$175,657			$172,299			$180,590			$181,880			$182,251			$172,847
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		1.28%			1.30%			1.27%			1.40%	(d)		1.25%			1.38%
Expense before waivers and/or expense reimbursement		1.33%			1.35%			1.32%			1.45%	(d)		1.30%			1.43%
Net investment income (loss)		.96%			1.20%			.88%			.74%	(d)		.90%			1.05%
Portfolio turnover rate		103%			96%			74%			20%	(e)		87%			239%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying portfolios in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

56

Class B Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017(b)			2016(b)			2015			2014(b)(f)			2014(b)			2013(b)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$13.57			$13.60			$14.15			$13.58			$12.80			$11.17
Income (loss) from investment operations:
Net investment income (loss)		.03			.06			.04			-	(g)		.02			.04
Net realized and unrealized gain (loss) on investment transactions		2.01			.21			.23			.57			1.45			1.73
Total from investment operations		2.04			.27			.27			.57			1.47			1.77
Less Dividends and Distributions:
Dividends from net investment income		(.07	)		(.04	)		(.02	)		-			(.03	)		(.14	)
Distributions from net realized gains		(.88	)		(.26	)		(.80	)		-			(.66	)		-
Total dividends and distributions		(.95	)		(.30	)		(.82	)		-			(.69	)		(.14	)
Net asset value, end of period		$14.66			$13.57			$13.60			$14.15			$13.58			$12.80
Total Return(a)		15.71%			2.07%			1.90%			4.20%			11.84%			15.94%
Ratios/Supplemental Data:
Net assets, end of period (000)		$6,195			$8,689			$12,401			$17,164			$17,425			$20,780
Average net assets (000)		$7,431			$10,392			$14,669			$17,140			$19,454			$22,938
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		2.03%			2.05%			2.02%			2.15%	(d)		2.00%			2.13%
Expense before waivers and/or expense reimbursement		2.03%			2.05%			2.02%			2.15%	(d)		2.00%			2.13%
Net investment income (loss)		.24%			.46%			.15%			-%	(d)(h)		.16%			.30%
Portfolio turnover rate		103%			96%			74%			20%	(e)		87%			239%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying portfolios in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

(g) Less than $.005.

(h) Less than .005%.

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 57

Financial Highlights (continued)

Class C Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017(b)			2016(b)			2015			2014(b)(f)			2014(b)			2013(b)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$13.56			$13.60			$14.15			$13.57			$12.80			$11.17
Income (loss) from investment operations:
Net investment income (loss)		.03			.06			.02			-	(g)		.02			.04
Net realized and unrealized gain (loss) on investment transactions		2.01			.20			.25			.58			1.44			1.73
Total from investment operations		2.04			.26			.27			.58			1.46			1.77
Less Dividends and Distributions:
Dividends from net investment income		(.07	)		(.04	)		(.02	)		-			(.03	)		(.14	)
Distributions from net realized gains		(.88	)		(.26	)		(.80	)		-			(.66	)		-
Total dividends and distributions		(.95	)		(.30	)		(.82	)		-			(.69	)		(.14	)
Net asset value, end of period		$14.65			$13.56			$13.60			$14.15			$13.57			$12.80
Total Return(a)		15.72%			2.00%			1.91%			4.27%			11.75%			15.94%
Ratios/Supplemental Data:
Net assets, end of period (000)		$37,006			$40,003			$45,046			$50,550			$49,855			$48,666
Average net assets (000)		$38,497			$42,741			$48,105			$50,000			$49,435			$49,670
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		2.03%			2.05%			2.02%			2.15%	(d)		2.00%			2.13%
Expense before waivers and/or expense reimbursement		2.03%			2.05%			2.02%			2.15%	(d)		2.00%			2.13%
Net investment income (loss)		.22%			.45%			.13%			(.01)%	(d)		.15%			.30%
Portfolio turnover rate		103%			96%			74%			20%	(e)		87%			239%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying portfolios in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

(g) Less than $.005.

See Notes to Financial Statements.

58

Class Q Shares
	December 28, 2016(a) through October 31, 2017
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$13.34
Income (loss) from investment operations:
Net investment income (loss)		.14
Net realized and unrealized gain (loss) on investment transactions		1.37
Total from investment operations		1.51
Net asset value, end of period		$14.85
Total Return(c):		11.32%
Ratios/Supplemental Data:
Net assets, end of period (000)		$114
Average net assets (000)		$61
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		.88%	(e)
Expenses before waivers and/or expense reimbursement		.88%	(e)
Net investment income (loss)		1.19%	(e)
Portfolio turnover rate		103%	(f)

(a) Commencement of operations.

(b) Calculated based on average shares outstanding during the period.

(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying portfolios in which the Fund invests.

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 59

Financial Highlights (continued)

Class R Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017(b)			2016(b)			2015			2014(b)(f)			2014(b)			2013(b)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$13.64			$13.68			$14.23			$13.63			$12.85			$11.21
Income (loss) from investment operations:
Net investment income (loss)		.10			.12			.09			.02			.09			.10
Net realized and unrealized gain (loss) on investment transactions		2.18			.20			.25			.58			1.44			1.73
Total from investment operations		2.28			.32			.34			.60			1.53			1.83
Less Dividends and Distributions:
Dividends from net investment income		(.13	)		(.10	)		(.09	)		-			(.09	)		(.19	)
Distributions from net realized gains		(.88	)		(.26	)		(.80	)		-			(.66	)		-
Total dividends and distributions		(1.01	)		(.36	)		(.89	)		-			(.75	)		(.19	)
Net asset value, end of period		$14.91			$13.64			$13.68			$14.23			$13.63			$12.85
Total Return(a)		17.62%			2.51%			2.39%			4.40%			12.32%			16.52%
Ratios/Supplemental Data:
Net assets, end of period (000)		$7			$311			$341			$434			$415			$373
Average net assets (000)		$345			$345			$358			$422			$391			$341
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		1.54%			1.55%			1.52%			1.65%	(d)		1.50%			1.63%
Expense before waivers and/or expense reimbursement		1.79%			1.80%			1.77%			1.90%	(d)		1.75%			1.88%
Net investment income (loss)		.75%			.95%			.63%			.48%	(d)		.65%			.81%
Portfolio turnover rate		103%			96%			74%			20%	(e)		87%			239%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying portfolios in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

60

Class Z Shares
	Year Ended October 31,									Three Months Ended October 31,			Year Ended July 31,
	2017(b)			2016(b)			2015			2014(b)(f)			2014(b)			2013(b)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$13.72			$13.75			$14.30			$13.68			$12.89			$11.24
Income (loss) from investment operations:
Net investment income (loss)		.17			.19			.15			.03			.15			.16
Net realized and unrealized gain (loss) on investment transactions		2.02			.21			.26			.59			1.46			1.74
Total from investment operations		2.19			.40			.41			.62			1.61			1.90
Less Dividends and Distributions:
Dividends from net investment income		(.20	)		(.17	)		(.16	)		-			(.16	)		(.25	)
Distributions from net realized gains		(.88	)		(.26	)		(.80	)		-			(.66	)		-
Total dividends and distributions		(1.08	)		(.43	)		(.96	)		-			(.82	)		(.25	)
Net asset value, end of period		$14.83			$13.72			$13.75			$14.30			$13.68			$12.89
Total Return(a)		16.84%			3.10%			2.89%			4.53%			12.90%			17.13%
Ratios/Supplemental Data:
Net assets, end of period (000)		$6,540			$6,832			$5,126			$3,694			$3,473			$3,346
Average net assets (000)		$6,611			$5,953			$4,473			$4,210			$3,596			$3,533
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		1.03%			1.05%			1.02%			1.15%	(d)		1.00%			1.13%
Expense before waivers and/or expense reimbursement		1.03%			1.05%			1.02%			1.15%	(d)		1.00%			1.13%
Net investment income (loss)		1.22%			1.46%			1.12%			.99%	(d)		1.16%			1.30%
Portfolio turnover rate		103%			96%			74%			20%	(e)		87%			239%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Calculated based on average shares outstanding during the period.

(c) Does not include expenses of the underlying portfolios in which the Fund invests.

(d) Annualized.

(e) Not annualized.

(f) For the three month period ended October 31, 2014. The Fund changed its fiscal year end from July 31 to October 31, effective October 31, 2014.

See Notes to Financial Statements.

Prudential QMA Defensive Equity Fund 61

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 16:

We have audited the accompanying statement of assets and liabilities of Prudential QMA Defensive Equity Fund (the “Fund”), a series of Prudential Investment Portfolios 16, including the schedule of investments, as of October 31, 2017, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the three-year period then ended, for the three-month period ended October 31, 2014, and for each of the years in the two-year period ended July 31, 2014. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2017, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of October 31, 2017, and the results of its operations, the changes in its net assets, and the financial highlights for each of the years or periods described in the first paragraph, in conformity with U.S. generally accepted accounting principles.

New York, New York

December 15, 2017

62

Federal Income Tax Information (unaudited)

We are advising you that during the fiscal year ended October 31, 2017, the Fund reported the maximum amount allowed per share, but not less than $0.88 for Class A, B, C, R and Z shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.

For the year ended October 31, 2017, the Fund reports, in accordance with Section 854 of the Internal Revenue Code, the following percentages of the ordinary income dividends paid as: 1) qualified dividend income (QDI); and 2) eligible for corporate dividend received deduction (DRD):

	QDI			DRD
Prudential QMA Defensive Equity Fund		94.02	%		93.86	%

In January 2018 you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2017.

Prudential QMA Defensive Equity Fund 63

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (59) Board Member Portfolios Overseen: 89	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (65) Board Member Portfolios Overseen: 89	Retired; Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (65) Board Member Portfolios Overseen: 89	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Prudential QMA Defensive Equity Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; Formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer-Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (2011-present); Director, Manulife Asset Management Limited (2015-present); Formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); Formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 89	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (since 1996); Visiting Professor of Law and Rock Center for Corporate Governance Fellow, Stanford Law School (since 2015); Visiting Fellow, Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); Formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008); Formerly Director/Trustee, Merrill Lynch Investment Managers Funds (1999-2006).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 89	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.

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Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Richard A. Redeker (74) Board Member & Independent Vice Chair9 Portfolios Overseen: 87	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 89	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

± Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 89	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.

Prudential QMA Defensive Equity Fund

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen: 89	Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (58) Board Member Portfolios Overseen: 88	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	Director (since July 2015) of Sun Bancorp, Inc. N.A. and Sun National Bank

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a Non-Management Interested Board Member.

⁽¹⁾ The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Barry H. Evans, 2017; Keith F. Hartstein, 2013; Laurie Simon Hodrick, 2017; Michael S. Hyland, 2008; Richard A. Redeker, 2003; Stephen G. Stoneburn, 1999; Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

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Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (62) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of PGIM Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988-August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006–December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (59) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005

Prudential QMA Defensive Equity Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Andrew R. French (54) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006
Charles H. Smith (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007-December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998-January 2007).	Since 2016
M. Sadiq Peshimam (53) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (59) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (50) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Explanatory Notes to Tables:

∎ Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC.

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

∎ “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

∎ “Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

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Approval of Advisory Agreements

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of Prudential QMA Defensive Equity (the “Fund”)¹ consists of twelve individuals, nine of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established four standing committees: the Audit Committee, the Nominating and Governance Committee, and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.

Annual Approval of the Fund’s Advisory Agreements

As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with Quantitative Management Associates LLC (“QMA”). In considering the renewal of the agreements, the Board, including all of the Independent Trustees,² met on June 6-8, 2017 and approved the renewal of the agreements through July 31, 2018, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and QMA. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.

In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board

¹  Prudential QMA Defensive Equity Fund is a series of Prudential Investment Portfolios 16.

²  Barry H. Evans and Laurie Simon Hodrick joined the Board effective as of September 1, 2017. Neither Mr. Evans nor Ms. Hodrick participated in the consideration of the renewal of the advisory agreements.

Prudential QMA Defensive Equity Fund

Approval of Advisory Agreements (continued)

considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 6-8, 2017.

The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and QMA, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Trustees’ determinations to approve the renewal of the agreement are discussed separately below.

Nature, Quality, and Extent of Services

The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and QMA. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance, and other services to the Fund. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by QMA, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and QMA, and also considered the qualifications, backgrounds and responsibilities of QMA’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and QMA’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PGIM Investments and QMA. The Board also noted that it received favorable compliance

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reports from the Fund’s Chief Compliance Officer (“CCO”) as to both PGIM Investments and QMA. The Board noted that QMA is affiliated with PGIM Investments.

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by QMA, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and QMA under the management and subadvisory agreements.

Costs of Services and Profits Realized by PGIM Investments

The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. The Board further noted that the subadviser is affiliated with PGIM Investments and that its profitability is reflected in PGIM Investments’ profitability report. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase, but that at its current level of assets the Fund does not realize the effect of those rate reductions. The Board took note that the Fund’s fee structure currently results in benefits to Fund shareholders whether or not PGIM Investments realizes any economies of scale. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

Prudential QMA Defensive Equity Fund

Approval of Advisory Agreements (continued)

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.

Other Benefits to PGIM Investments and QMA

The Board considered potential ancillary benefits that might be received by PGIM Investments and QMA and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by QMA included its ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments and QMA were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

Performance of the Fund / Fees and Expenses

The Board considered certain additional specific factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2016.

The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended October 31, 2016. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe (the Lipper Large-Cap Core Funds Performance Universe), which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. The comparisons placed the Fund in various quartiles, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

Visit our website at pgiminvestments.com

The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth gross performance comparisons (which do not reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.

Performance	1 Year	3 Years	5 Years	10 Years
	3rd Quartile	3rd Quartile	4th Quartile	4th Quartile
Actual Management Fees: 3rd Quartile
Net Total Expenses: 2nd Quartile

• The Board noted that the Fund underperformed its benchmark index over all periods.

• The Board noted PGIM Investments’ assertion that the Fund’s recent underperformance was attributable to the Fund’s defensive orientation, which had not been favored by the market. In this regard, the Board considered information provided by PGIM Investments which indicated that during the first half of 2016 and the third quarter of 2015, when the Fund’s defensive orientation was in favor, the Fund outperformed its benchmark index and ranked in the first quartile of its Peer Universe.

• The Board also noted that in 2013, following shareholder approval, QMA was appointed to replace the Fund’s existing subadvisers as part of an overall restructuring and repositioning of the Fund, and that as a result, most of the Fund’s historical performance record did not reflect the current management and operation of the Fund.

• The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements.

• The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided.

*    *    *

After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.

Prudential QMA Defensive Equity Fund

∎   MAIL	∎   TELEPHONE	∎   WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.com

PROXY VOTING

The Board of Trustees of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.

TRUSTEES

Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres

OFFICERS

Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’ Hara, Chief Legal Officer • Chad A. Earnst, Chief Compliance Officer • Deborah A. Docs, Secretary • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Andrew R. French, Assistant Secretary • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer

MANAGER	PGIM Investments LLC	655 Broad Street Newark, NJ 07102
INVESTMENT SUBADVISER	Quantitative Management Associates LLC	Gateway Center Two 100 Mulberry Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	655 Broad Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	225 Liberty Street New York, NY 10286
TRANSFER AGENT	Prudential Mutual Fund Services LLC	PO Box 9658 Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	KPMG LLP	345 Park Avenue New York, NY 10154
FUND COUNSEL	Willkie Farr & Gallagher LLP	787 Seventh Avenue New York, NY 10019

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.pgiminvestments.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

E-DELIVERY

To receive your mutual fund documents online, go to www.pgiminvestments.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES

Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Prudential QMA Defensive Equity Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

AVAILABILITY OF PORTFOLIO SCHEDULE

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month no sooner than 15 days after the end of the month.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

PRUDENTIAL QMA DEFENSIVE EQUITY FUND

SHARE CLASS	A	B	C	Q	R	Z
NASDAQ	PAMGX	DMGBX	PIMGX	PAMQX	SPMRX	PDMZX
CUSIP	74442X868	74442X785	74442X793	74442X777	74442X819	74442X827

MFSP504E3

Item 2 – Code of Ethics — See Exhibit (a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

The registrant’s Board has determined that Mr. Kevin J. Bannon, member of the Board’s Audit Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.

Item 4 – Principal Accountant Fees and Services –

(a) Audit Fees

For the fiscal years ended October 31, 2017 and October 31, 2016, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $99,784 and $99,878 respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

For the fiscal years ended October 31, 2017 and October 31, 2016: none.

(c) Tax Fees

For the fiscal years ended October 31, 2017 and October 31, 2016: none.

(d) All Other Fees

For the fiscal years ended October 31, 2017 and October 31, 2016: none.

(e) (1) Audit Committee Pre-Approval Policies and Procedures

THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent Accountants

The Audit Committee of each Prudential Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve the independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

• a review of the nature of the professional services expected to be provided,

• a review of the safeguards put into place by the accounting firm to safeguard independence, and

• periodic meetings with the accounting firm.

Policy for Audit and Non-Audit Services Provided to the Funds

On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services. Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed non-audit services will not adversely affect the independence of the independent accountants. Such proposed non-audit services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider for pre-approval.

Audit Services

The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:

Ø Annual Fund financial statement audits

Ø Seed audits (related to new product filings, as required)

Ø SEC and regulatory filings and consents

Audit-related Services

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:

Ø Accounting consultations

Ø Fund merger support services

Ø Agreed Upon Procedure Reports

Ø Attestation Reports

Ø Other Internal Control Reports

Individual audit-related services that fall within one of these categories (except for fund merger support services) and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated). Fees related to fund merger support services are subject to a separate authorized pre-approval by the Audit Committee with fees determined on a per occurrence and merger complexity basis.

Tax Services

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:

Ø Tax compliance services related to the filing or amendment of the following:

◾    Federal, state and local income tax compliance; and,

◾    Sales and use tax compliance

Ø Timely RIC qualification reviews

Ø Tax distribution analysis and planning

Ø Tax authority examination services

Ø Tax appeals support services

Ø Accounting methods studies

Ø Fund merger support services

Ø Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated).

Other Non-Audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has

delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Proscribed Services

The Fund’s independent accountants will not render services in the following categories of non-audit services:

Ø Bookkeeping or other services related to the accounting records or financial statements of the Fund

Ø Financial information systems design and implementation

Ø Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

Ø Actuarial services

Ø Internal audit outsourcing services

Ø Management functions or human resources

Ø Broker or dealer, investment adviser, or investment banking services

Ø Legal services and expert services unrelated to the audit

Ø Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval of Non-Audit Services Provided to Other Entities Within the Prudential Fund Complex

Certain non-audit services provided to PGIM Investments LLC or any of its affiliates that also provide ongoing services to the Prudential Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds. Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $30,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Although the Audit Committee will not pre-approve all services provided to PGIM Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to PGIM Investments LLC and its affiliates.

(e) (2) Percentage of services referred to in 4(b) – 4(d) that were approved by the audit committee –

For the fiscal years ended October 31, 2017 and October 31, 2016: none.

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.

The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

(g) Non-Audit Fees

The aggregate non-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years ended October 31, 2017 and October 31, 2016 was $0 and $0, respectively.

(h) Principal Accountant’s Independence

Not applicable as KPMG has not provided non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

Item 5 –	Audit Committee of Listed Registrants – Not applicable.
Item 6 –	Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 –	Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 –	Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 –	Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 –	Submission of Matters to a Vote of Security Holders – Not applicable.
Item 11 –	Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits

(a) (1) Code of Ethics – Attached hereto as Exhibit EX-99.CODE-ETH

	(2)	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.
	(3)	Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
(b)	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:	Prudential Investment Portfolios 16
By:	/s/ Deborah A. Docs
	Deborah A. Docs
	Secretary
Date:	December 20, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Stuart S. Parker
	Stuart S. Parker
	President and Principal Executive Officer
Date:	December 20, 2017
By:	/s/ M. Sadiq Peshimam
	M. Sadiq Peshimam
	Treasurer and Principal Financial and Accounting Officer
Date:	December 20, 2017