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:	Andrew R. French
	655 Broad Street, 17th Floor
	Newark, New Jersey 07102
Registrant’s telephone number, including area code:	800-225-1852
Date of fiscal year end:	10/31/2018
Date of reporting period:	10/31/2018

Item 1 – Reports to Stockholders

PGIM INCOME BUILDER FUND

(Formerly known as Prudential Income Builder Fund)

ANNUAL REPORT

OCTOBER 31, 2018

COMING SOON: PAPERLESS SHAREHOLDER REPORTS

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.pgiminvestments.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-225-1852 or by sending an e-mail request to PGIM Investments at shareholderreports@pgim.com.

Beginning on January 1, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1-800-225-1852 or send an email request to shareholderreports@pgim.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Fund.

To enroll in e-delivery, go to pgiminvestments.com/edelivery

Objective: To seek income and long-term capital growth

Highlights (unaudited)

• Tactical asset allocation decisions added to the Fund’s relative performance, led by overweight allocations to equity income investments, convertible bonds, high yield corporate bonds, and master limited partnerships.

• The Fund benefited from its underweight positions in core bonds, emerging markets bonds, and preferred stocks, all of which posted negative returns during the reporting period.

• Strategic asset allocation was a key detractor from performance, with most of the Fund’s exposures failing to keep pace with the S&P 500 Index, which posted a gain during the period.

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, PGIM, Inc. (PGIM), and Quantitative Management Associates LLC (QMA) 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. ^© 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, 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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PGIM FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved the implementation of an automatic conversion feature for Class C shares, effective as of April 1, 2019. To reflect these changes, effective April 1, 2019, the section of the Fund’s Prospectus entitled “How to Buy, Sell and Exchange Fund Shares—How to Exchange Your Shares—Frequent Purchases and Redemptions of Fund Shares” is restated to read as follows:

This supplement should be read in conjunction with your Summary Prospectus, Statutory Prospectus and Statement of Additional Information, be retained for future reference and is in addition to any existing Fund supplements.

1. In each Fund’s Statutory Prospectus, the following is added at the end of the section entitled “Fund Distributions And Tax Issues—If You Sell or Exchange Your Shares”:

Automatic Conversion of Class C Shares

The conversion of Class C shares into Class A shares—which happens automatically approximately 10 years after purchase—is not a taxable event for federal income tax purposes. For more information about the automatic conversion of Class C shares, see Class C Shares Automatically Convert to Class A Shares in How to Buy, Sell and Exchange Fund Shares.

2. In each Fund’s Statutory Prospectus, the following sentence is added at the end of the section entitled “How to Buy, Sell and Exchange Shares—Closure of Certain Share Classes to New Group Retirement Plans”:

Shareholders owning Class C shares may continue to hold their Class C shares until the shares automatically convert to Class A shares under the conversion schedule, or until the shareholder redeems their Class C shares.

3. In each Fund’s Statutory Prospectus, the following disclosure is added immediately following the section entitled “How to Buy, Sell and Exchange Shares—How to Buy Shares—Class B Shares Automatically Convert to Class A Shares”:

Class C Shares Automatically Convert to Class A Shares

Starting on or about April 1, 2019 (the “Effective Date”), Class C shares will be eligible for automatic conversion into Class A shares on a monthly basis approximately ten years after the original date of purchase (the “Conversion Date”). Conversion will take place based on the relative NAV of the two classes, without the imposition of any sales load, fee or other charge. All such automatic conversions of Class C shares will constitute tax-free exchanges for federal income tax purposes.

For shareholders investing in Class C shares through retirement plans or omnibus accounts, and in certain other instances, the Fund and its agents may not have transparency into how

PGIM Income Builder Fund 3

long a shareholder has held Class C shares for purposes of determining whether such Class C shares are eligible for automatic conversion into Class A shares, and the relevant financial intermediary may not have the ability to track purchases in order to credit individual shareholders’ holding periods. In these circumstances, the Fund will not be able to automatically convert Class C shares into Class A shares as described above. In order to determine eligibility for conversion in these circumstances, it is the responsibility of the financial intermediary to notify the Fund that the shareholder is eligible for the conversion of Class C shares to Class A shares, and the financial intermediary may be required to maintain and provide the Fund with records that substantiate the holding period of Class C shares. It is the financial intermediary’s (and not the Fund’s) responsibility to keep records of transactions made in accounts it holds and to ensure that the shareholder is credited with the proper holding period based on such records or those provided to the financial intermediary by the shareholder. Please consult with your financial intermediary for the applicability of this conversion feature to your shares.

A financial intermediary may sponsor and/or control accounts, programs or platforms that impose a different conversion schedule or different eligibility requirements for the exchange of Class C shares for Class A shares (see Appendix A: Waivers and Discounts Available From Certain Financial Intermediaries of the Prospectus). Please consult with your financial intermediary if you have any questions regarding your shares’ conversion from Class C shares to Class A shares.

4. In Part II of each Fund’s Statement of Additional Information, the following disclosure is added immediately following the section entitled “Purchase, Redemption and Pricing of Fund Shares—Share Classes—Automatic Conversion of Class B Shares”:

AUTOMATIC CONVERSION OF CLASS C SHARES. Starting on or about April 1, 2019 (the “Effective Date”), Class C shares will be eligible for automatic conversion into Class A shares on a monthly basis approximately ten years after the original date of purchase (the “Conversion Date”). Conversion will take place based on the relative NAV of the two classes, without the imposition of any sales load, fee or other charge. Class C shares of a Fund acquired through automatic reinvestment of dividends or distributions will convert to Class A shares of the Fund on the Conversion Date pro rata with the converting Class C shares of the Fund that were not acquired through reinvestment of dividends or distributions. All such automatic conversions of Class C shares will constitute tax-free exchanges for federal income tax purposes.

For shareholders investing in Class C shares through retirement plans or omnibus accounts, and in certain other instances, the Fund and its agents may not have transparency into how long a shareholder has held Class C shares for purposes of determining whether such Class C shares are eligible for automatic conversion into Class A shares, and the relevant financial intermediary may not have the ability to track purchases in order to credit individual shareholders’ holding periods. In these circumstances, the Fund will not be able

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to automatically convert Class C shares into Class A shares as described above. In order to determine eligibility for conversion in these circumstances, it is the responsibility of the financial intermediary to notify the Fund that the shareholder is eligible for the conversion of Class C shares to Class A shares, and the financial intermediary may be required to maintain and provide the Fund with records that substantiate the holding period of Class C shares. It is the financial intermediary’s (and not the Fund’s) responsibility to keep records of transactions made in accounts it holds and to ensure that the shareholder is credited with the proper holding period based on such records or those provided to the financial intermediary by the shareholder. Please consult with your financial intermediary for the applicability of this conversion feature to your shares.

Class C shares were generally closed to investments by new group retirement plans effective June 1, 2018. Group retirement plans (and their successor, related and affiliated plans) that have Class C shares of the Fund available to participants on or before the Effective Date may continue to open accounts for new participants in such share class and purchase additional shares in existing participant accounts.

The Fund has no responsibility for monitoring or implementing a financial intermediary’s process for determining whether a shareholder meets the required holding period for conversion. A financial intermediary may sponsor and/or control accounts, programs or platforms that impose a different conversion schedule or different eligibility requirements for the exchange of Class C shares for Class A shares, as set forth on Appendix A: Waivers and Discounts Available From Certain Financial Intermediaries of the Prospectus. In these cases, Class C shareholders may have their shares exchanged for Class A shares under the policies of the financial intermediary. Financial intermediaries will be responsible for making such exchanges in those circumstances. Please consult with your financial intermediary if you have any questions regarding your shares’ conversion from Class C shares to Class A shares.

LR1094

- Not part of the Annual Report -

PGIM Income Builder Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	9
Strategy and Performance Overview	12
Fees and Expenses	16
Holdings and Financial Statements	19

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Letter from the President

Dear Shareholder:

We hope you find the annual report for PGIM Income Builder Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*

During the reporting period, the global economy continued to grow, and central banks gradually tightened monetary policy. In the US, the economy expanded and employment increased. In September, the Federal Reserve hiked interest rates for the eighth time since 2015, based on confidence in the economy.

Equity returns on the whole were strong, due to optimistic earnings expectations and investor sentiment. Global equities, including emerging markets, generally posted positive returns. However, they trailed the performance of US equities, which rose on higher corporate profits, new regulatory policies, and tax reform benefits. Volatility spiked briefly early in the period on inflation concerns, rising interest rates, and a potential global trade war, and again late in the period on worries that profit growth might slow in 2019.

The overall bond market declined modestly during the period, as measured by the Bloomberg Barclays US Aggregate Bond Index. The best performance came from higher-yielding, economically sensitive sectors, such as high yield bonds and bank loans, which posted small gains. US investment-grade corporate bonds and US Treasury bonds both finished the period with negative returns. A major trend during the period was the flattening of the US Treasury yield curve, which increased the yield on fixed income investments with shorter maturities and made them more attractive to investors.

Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This 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

PGIM Income Builder Fund

December 14, 2018

*The Prudential Day One Funds did not change their names.

PGIM 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 10/31/18 (with sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	–5.77		1.94		5.82		—
Class B	–6.81		1.97		5.52		—
Class C	–3.03		2.09		5.51		—
Class R	–1.58		2.62		6.05		—
Class Z	–1.08		3.13		6.57		—
Class R6*	–1.07		N/A		N/A		2.92 (12/30/16)
S&P 500 Index
	7.35		11.33		13.23		—
Bloomberg Barclays US Aggregate Bond Index
	–2.05		1.83		3.94		—
Lipper Flexible Portfolio Funds Average
	–1.58		3.27		7.58		—
	Average Annual Total Returns as of 10/31/18 (without sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	–1.33		2.88		6.31		—
Class B	–2.08		2.11		5.52		—
Class C	–2.09		2.09		5.51		—
Class R	–1.58		2.62		6.05		—
Class Z	–1.08		3.13		6.57		—
Class R6*	–1.07		N/A		N/A		2.92 (12/30/16)
S&P 500 Index	7.35		11.33		13.23		—
Bloomberg Barclays US Aggregate Bond Index
	–2.05		1.83		3.94		—
Lipper Flexible Portfolio Funds Average
	–1.58		3.27		7.58		—

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Growth of a $10,000 Investment (unaudited)

The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the S&P 500 Index and the Bloomberg Barclays US Aggregate Bond Index by portraying the initial account values at the beginning of the 10-year period for Class Z shares (October 31, 2008) and the account values at the end of the current fiscal year (October 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing 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.

*Formerly known as Class Q shares.

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 class’ inception date.

PGIM 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 R	Class Z	Class R6**
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	5.00% (Year 1) 4.00% (Year 2) 3.00% (Year 3) 2.00% (Year 4) 1.00% (Years 5/6) 0.00% (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%	0.75% (0.50% currently)	None	None

*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.

**Formerly known as Class Q shares.

Benchmark Definitions

S&P 500 Index—The S&P 500 Index is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how US stock prices in the United States have performed. The average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 13.18%.

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 average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 0.59%.

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 traditional asset classes with a focus on total return. The average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 4.59%.

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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 of a mutual fund, but not sales charges or taxes.

Presentation of Fund Holdings

Five Largest Holdings expressed as a percentage of net assets as of 10/31/18 (%)
SPDR Bloomberg Barclays Convertible Securities ETF	8.0
PGIM Total Return Bond Fund (Class R6)	4.7
Invesco Preferred ETF	3.9
SPDR S&P 500 ETF Trust	1.8
Williams Cos., Inc. (The), Oil, Gas & Consumable Fuels	1.2

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

Five Largest Industries expressed as a percentage of net assets as of 10/31/18 (%)
Exchange Traded Funds	13.7
Oil, Gas & Consumable Fuels	13.1
Equity Real Estate Investment Trusts (REITs)	12.8
Sovereign Bonds	8.0
Affiliated Mutual Funds	6.8

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

PGIM Income Builder Fund 11

Strategy and Performance Overview (unaudited)

How did the Fund perform?

The PGIM Income Builder Fund’s Class Z shares returned –1.08% for the 12-month reporting period that ended October 31, 2018, outperforming the –2.05% return of the Bloomberg Barclays US Aggregate Bond Index (the Index) and underperforming the 7.35% return of the S&P 500 Index. The Fund outperformed the –1.58% return of the Lipper Flexible Portfolio Funds Average.

What were the market conditions?

• In a major event capping 2017, the US Congress passed a tax reform bill that was signed into law in December. The law cut the corporate tax rate to 21% from 35% and reduced individual tax rates, including lowering the top rate to 37% from 39.6%. The US equity markets advanced in anticipation of the law and surged into the new year.

• In late January through February of 2018, US equities experienced a steep decline, triggered by an inflation scare and US protectionist trade measures. The market pullback was accompanied by a sharp spike in volatility that drove the unwinding of investors’ short volatility positions. These positions seek to profit from the potential of continued low levels of volatility.

• US equities remained range bound during the spring, despite 25% year-over-year earnings growth in the first two quarters of 2018, fueled by the fiscal stimulus of corporate tax cuts. The economic backdrop was also favorable, amid continued strong growth. Equity performance may have been restrained by geopolitical concerns. Anxiety regarding a global trade war emerged in March, eased in May, but intensified again in June on the heels of unprecedented acrimony at the G7 (Group of Seven) summit and the Trump administration’s threat to impose tariffs on Chinese goods. The G7 consists of Canada, France, Germany, Italy, Japan, the United Kingdom (the UK), and the US. These countries, with the seven largest advanced economies in the world, represent more than 62% of global net wealth. Retaliatory measures by China ignited fears of a tit-for-tat escalation cycle that could be destructive for global economic growth.

• Fears of a trade war abated toward the end of the summer, with good news heralded by a trade agreement between the US and Mexico, lower-than-expected tariffs on $200 billion of Chinese goods, and a trade deal with Canada that concluded the renegotiation of the North American Free Trade Agreement. US equity markets surged in response, delivering strong gains from July to September and reaching new highs as geopolitical anxiety eased and strong corporate earnings continued.

• US equities were volatile in October 2018, declining amid investor concerns about the pace of US economic growth and the outlook for corporate earnings. Toward the end of the month, US equities retraced some of their losses on positive economic news and solid earnings reports.

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• At the end of the reporting period, US economic growth was continuing, while growth in other major economies had moderated. Overall, 2018 appeared to be a year of global growth divergence, whereas 2017 was characterized by synchronized global economic recovery.

• US economic growth was accompanied by rising interest rates and a stronger US dollar, which strained emerging markets economies. Higher US interest rates caused capital outflows from the emerging markets, leading to the sharp depreciation of emerging markets currencies and unleashing a vicious cycle of increased inflation and central bank rate hikes. This was especially true in countries with significant political problems, economic imbalances, and limited reserves, such as Turkey and Argentina. Trade tensions and the high price of crude oil further exacerbated the problem, even in stronger emerging markets countries, by putting additional pressure on their foreign currency reserves. Nevertheless, the potential of an emerging markets crisis appeared to be contained at the end of the period, thanks to China’s commitment to doing “whatever it takes” to keep its own economy stable and the proactive stance of emerging markets central banks overall.

• In Europe and Japan, economic growth has slowed since the beginning of 2018, roiled by negative news such as tariff uncertainty, protracted negotiations over the UK’s exit from the European Union, and the possibility of Italy leaving as well. Consequently, non-US developed markets stocks were weak, while emerging markets stocks declined. In contrast, the S&P 500 Index generated a solidly positive return during the same period. QMA believes the divergence in equity returns between the US and other developed markets countries has reached an unprecedented level and thinks they are likely to converge.

• US small-cap equities outperformed from March to July at the height of the trade tensions, perceived by investors as a domestic asset class that could provide safe haven from macroeconomic turbulence abroad. With trade tensions easing, this sector gave back some of its gains toward the end of the reporting period.

• The Federal Reserve (the Fed) continued tightening US monetary policy, having raised short-term rates six times from the beginning of 2017 through the end of the reporting period. This has lifted the short-term end of the US Treasury yield curve, while the long-term end has remained anchored by interest rate differentials with the rest of the world and investors’ fears about the maturity of the US business cycle. As a result, the US Treasury yield curve flattened throughout 2018.

• US Treasury securities and investment-grade corporate bonds underperformed US equities between January 1 and October 31, 2018. At the same time, high yield corporate bonds performed strongly, as spreads (yield differentials versus US Treasuries) narrowed due to the healthy economic backdrop.

PGIM Income Builder Fund 13

Strategy and Performance Overview (continued)

What worked?

• Tactical asset allocation decisions added to the Fund’s relative performance, led by overweight allocations to equity income investments, convertible bonds, high yield corporate bonds, and master limited partnerships. These exposures were the Fund’s top-performing market segments.

• The Fund benefited from its underweight positions in core bonds, emerging markets bonds, and preferred stocks, all of which posted negative returns during the reporting period.

• Manager allocations within the High Yield sleeve and Emerging Markets Debt sleeve added value for the period, as they posted positive results relative to their benchmark indexes.

What didn’t work?

• Strategic asset allocation was a key detractor from performance, with most of the Fund’s exposures failing to keep pace with the S&P 500 Index, which posted a gain during the period.

• The Fund’s strategic exposure to emerging markets debt challenged its relative performance, as that asset class posted large negative returns on an absolute basis.

• Manager allocations hurt performance as the Fund’s subadvisers, in aggregate, posted negative results relative to their benchmark indexes.

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

• The Fund did not utilize any derivative instruments at the aggregate level, though the underlying subadvisers may, as is permitted in managing their respective strategies.

• For the emerging markets sleeve of the Fund, currency positioning was partially facilitated by the use of currency forward and option contracts. This currency positioning hurt relative performance during the period. The sleeve also used Treasury futures to hedge rate risk relative to the benchmark and to help immunize any impact from fluctuation in interest rates relative to the benchmark.

• For the high yield sleeve of the Fund, US Treasury futures were used to hedge rate risk relative to the benchmark and to help immunize any impact from fluctuation in interest rates relative to the benchmark.

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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• The global economy enters the last quarter of 2018 with good momentum. However, global growth has become less synchronized, more uneven, and less robust as economic activity appears to be moderating across most of the developed world while slowing in China and other emerging markets. On balance, the near-term risk of a global downturn remains low. However, global risk factors—including continued Fed tightening, Brexit, and escalating trade tensions—all remain in place. With such uncertainty, the markets seem poised for a heightened period of volatility as investors continue to contend with these risks. Income-oriented markets will not be immune to volatility as prospects for continued Fed tightening, the recent increase in Treasury yields, and the sizeable drop in energy prices likely will weigh on markets. Moving forward, investors will be monitoring growth-oriented indicators to see whether macro fundamentals remain supportive. In addition, inflation developments will be a key focus as markets look to price in the risk of the Fed moving too quickly in 2019. If growth remains healthy and inflation subdued, risk assets may provide positive returns as macro risks give way to corporate fundamentals and supportive valuations.

PGIM Income Builder Fund 15

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, 2018. 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 PGIM Funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period

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

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

PGIM Income Builder Fund		Beginning Account Value May 1, 2018		Ending Account Value October 31, 2018		Annualized Expense Ratio Based on the Six-Month  Period			Expenses Paid During the Six-Month  Period*
Class A	Actual	$	1,000.00	$	992.10		0.95	%	$	4.77
	Hypothetical	$	1,000.00	$	1,020.42		0.95	%	$	4.84
Class B	Actual	$	1,000.00	$	988.20		1.70	%	$	8.52
	Hypothetical	$	1,000.00	$	1,016.64		1.70	%	$	8.64
Class C	Actual	$	1,000.00	$	987.10		1.70	%	$	8.51
	Hypothetical	$	1,000.00	$	1,016.64		1.70	%	$	8.64
Class R	Actual	$	1,000.00	$	989.80		1.20	%	$	6.02
	Hypothetical	$	1,000.00	$	1,019.16		1.20	%	$	6.11
Class Z	Actual	$	1,000.00	$	992.30		0.70	%	$	3.52
	Hypothetical	$	1,000.00	$	1,021.68		0.70	%	$	3.57
Class R6**	Actual	$	1,000.00	$	993.40		0.70	%	$	3.52
	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, 2018, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

**Formerly known as Class Q shares.

PGIM Income Builder Fund 17

Schedule of Investments

as of October 31, 2018

Description	Shares		Value
LONG-TERM INVESTMENTS    98.0%
AFFILIATED MUTUAL FUNDS    6.8%
PGIM Floating Rate Income Fund (Class R6)		422,948	$	4,166,038
PGIM Short Duration High Yield Income Fund (Class R6)		482,251		4,238,989
PGIM Total Return Bond Fund (Class R6)		1,377,258		19,047,477
TOTAL AFFILIATED MUTUAL FUNDS (cost $27,911,298)				27,452,504
COMMON STOCKS    44.5%
Aerospace & Defense    0.9%
Boeing Co. (The)		5,484		1,946,052
Safran SA (France)		11,583		1,498,418
				3,444,470
Banks    2.2%
Bank of America Corp.		69,894		1,922,085
BB&T Corp.		28,530		1,402,535
JPMorgan Chase & Co.		28,770		3,136,505
PNC Financial Services Group, Inc. (The)		7,280		935,407
SunTrust Banks, Inc.		24,303		1,522,826
				8,919,358
Beverages    0.8%
Coca-Cola Co. (The)		41,968		2,009,428
Diageo PLC (United Kingdom), ADR		3,381		467,119
Keurig Dr Pepper, Inc.		22,062		573,612
				3,050,159
Capital Markets    0.9%
CME Group, Inc.		10,130		1,856,221
Moelis & Co. (Class A Stock)		41,261		1,665,294
				3,521,515
Chemicals    0.2%
Akzo Nobel NV (Netherlands)		7,681		645,856
Communications Equipment    0.6%
Cisco Systems, Inc.		49,212		2,251,449

See Notes to Financial Statements.

PGIM Income Builder Fund 19

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Diversified Telecommunication Services    0.2%
AT&T, Inc.		8,588	$	263,480
Verizon Communications, Inc.		11,261		642,890
				906,370
Electric Utilities    0.5%
Duke Energy Corp.		8,709		719,625
Exelon Corp.		33,744		1,478,324
				2,197,949
Electrical Equipment    0.4%
Emerson Electric Co.		23,468		1,593,008
Energy Equipment & Services    0.1%
USA Compression Partners LP, MLP		33,570		491,801
Entertainment    0.2%
Twenty-First Century Fox, Inc. (Class A Stock)		15,764		717,577
Equity Real Estate Investment Trusts (REITs)    10.2%
AEW UK REIT PLC (United Kingdom), REIT		558,124		679,843
Alstria office REIT-AG (Germany)		37,260		536,675
American Tower Corp.		6,411		998,898
Americold Realty Trust, REIT		61,398		1,519,600
Columbia Property Trust, Inc., REIT		127,222		2,856,134
Community Healthcare Trust, Inc., REIT		63,644		1,891,500
CoreSite Realty Corp., REIT		4,975		466,953
Crown Castle International Corp., REIT		4,714		512,600
DiamondRock Hospitality Co., REIT		82,854		865,824
Easterly Government Properties, Inc., REIT		110,899		2,015,035
Extra Space Storage, Inc., REIT		5,565		501,184
Four Corners Property Trust, Inc., REIT		22,773		593,920
Frasers Logistics & Industrial Trust (Singapore), REIT		701,919		517,773
Highwoods Properties, Inc., REIT		86		3,667
Japan Hotel REIT Investment Corp. (Japan)		811		577,296
JBG SMITH Properties, REIT		34,937		1,309,439
Kenedix Retail REIT Corp. (Japan)		559		1,191,243
Keppel REIT (Singapore)		1,061,714		867,087
Klepierre SA (France), REIT		30,838		1,048,823
LaSalle Logiport REIT (Japan)		624		574,302
Macerich Co. (The), REIT		38,136		1,968,580
MedEquities Realty Trust, Inc., REIT		254,676		2,106,170
MGM Growth Properties LLC, REIT (Class A Stock)		100,775		2,850,925

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Equity Real Estate Investment Trusts (REITs) (cont’d.)
Omega Healthcare Investors, Inc.		16,473	$	549,375
Prologis Property Mexico SA de CV (Mexico), REIT		278,049		490,033
Sabra Health Care REIT, Inc.		128,543		2,782,956
STAG Industrial, Inc., REIT		74,999		1,984,474
Starhill Global REIT (Singapore)		12		6
Stockland (Australia), REIT		290,216		740,835
Suntec Real Estate Investment Trust (Singapore), REIT		968,754		1,239,060
Unibail-Rodamco-Westfield (France), REIT		10,529		1,907,749
Vicinity Centres (Australia), REIT		452,857		848,541
Warehouse REIT PLC (United Kingdom)		847,687		1,048,453
Welltower, Inc., REIT		47,184		3,117,447
				41,162,400
Food & Staples Retailing    0.3%
Walmart, Inc.		10,632		1,066,177
Food Products    1.0%
Conagra Brands, Inc.		40,579		1,444,612
Hershey Co. (The)		12,532		1,342,804
Mondelez International, Inc. (Class A Stock)		28,076		1,178,631
				3,966,047
Health Care Equipment & Supplies    0.8%
Abbott Laboratories		23,454		1,616,919
Zimmer Biomet Holdings, Inc.		15,415		1,750,990
				3,367,909
Health Care Providers & Services    0.3%
UnitedHealth Group, Inc.		3,893		1,017,436
Hotels, Restaurants & Leisure    0.5%
McDonald’s Corp.		10,312		1,824,193
Independent Power & Renewable Electricity Producers    1.2%
Clearway Energy, Inc. (Class C Stock)		103,344		2,026,576
NextEra Energy Partners LP		35,347		1,609,349
NRG Energy, Inc.		37,996		1,375,075
				5,011,000
Industrial Conglomerates    0.2%
Honeywell International, Inc.		6,142		889,484

See Notes to Financial Statements.

PGIM Income Builder Fund 21

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Insurance    0.2%
MetLife, Inc.		23,344	$	961,539
IT Services    0.7%
Fidelity National Information Services, Inc.		16,295		1,696,309
Mastercard, Inc. (Class A Stock)		5,783		1,143,126
				2,839,435
Life Sciences Tools & Services    0.3%
Thermo Fisher Scientific, Inc.		5,933		1,386,245
Media    0.2%
CBS Corp. (Class B Stock)		12,591		722,094
Metals & Mining    0.3%
BHP Billiton Ltd. (Australia), ADR(a)		26,634		1,229,958
Mortgage Real Estate Investment Trusts (REITs)    0.3%
MFA Financial, Inc.		142,988		990,907
Starwood Property Trust, Inc.		19,550		424,626
				1,415,533
Multiline Retail    0.3%
Target Corp.		16,101		1,346,527
Multi-Utilities    0.4%
Ameren Corp.		14,575		941,253
Public Service Enterprise Group, Inc.		9,778		522,439
				1,463,692
Oil, Gas & Consumable Fuels    13.1%
Andeavor Logistics LP, MLP		20,722		830,123
Antero Midstream GP LP		29,233		470,944
Antero Midstream Partners LP, MLP		49,784		1,500,988
BP PLC (United Kingdom), ADR		70,434		3,054,722
Cheniere Energy Partners LP, MLP		116,166		3,911,309
Cheniere Energy, Inc.*		27,814		1,680,244
Crestwood Equity Partners LP, MLP		21,403		721,495
Enbridge, Inc. (Canada)		46,151		1,438,045
Energy Transfer LP, MLP		255,935		3,977,230
EnLink Midstream LLC		40,763		529,919
EnLink Midstream Partners LP, MLP		93,393		1,415,838

See Notes to Financial Statements.

22

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
Enterprise Products Partners LP, MLP		132,976	$	3,566,416
EQGP Holdings LP, MLP		23,255		365,103
EQM Midstream Partners LP, MLP		22,130		1,015,988
Frontera Energy Corp. (Colombia)*		2,232		29,083
Kinder Morgan, Inc.		138,541		2,357,968
MPLX LP, MLP		37,254		1,252,107
Noble Midstream Partners LP, MLP		22,573		770,642
ONEOK, Inc.		58,209		3,818,510
Pembina Pipeline Corp. (Canada)		67,146		2,170,159
Plains All American Pipeline LP, MLP		129,130		2,811,160
Royal Dutch Shell PLC (Netherlands) (Class A Stock), ADR		32,435		2,049,568
SemGroup Corp. (Class A Stock)		47,096		870,805
Tallgrass Energy LP		96,368		2,096,968
Targa Resources Corp.		87,734		4,533,216
Western Gas Equity Partners LP, MLP		30,777		885,146
Williams Cos., Inc. (The)		193,263		4,702,089
				52,825,785
Pharmaceuticals    2.7%
Allergan PLC		11,516		1,819,643
AstraZeneca PLC (United Kingdom), ADR		69,339		2,688,967
Bristol-Myers Squibb Co.		18,270		923,366
Elanco Animal Health, Inc.*		11,319		345,003
Eli Lilly & Co.		10,362		1,123,655
Merck & Co., Inc.		24,161		1,778,491
Pfizer, Inc.		53,903		2,321,063
				11,000,188
Real Estate Management & Development    0.5%
Cibus Nordic Real Estate AB (Sweden)		103,716		1,202,334
Henderson Land Development Co. Ltd. (Hong Kong)		95,384		444,954
Sun Hung Kai Properties Ltd. (Hong Kong)		37,500		488,595
				2,135,883
Road & Rail    0.4%
CSX Corp.		16,323		1,124,002
Union Pacific Corp.		4,404		643,953
				1,767,955
Semiconductors & Semiconductor Equipment    0.7%
QUALCOMM, Inc.		43,508		2,736,218

See Notes to Financial Statements.

PGIM Income Builder Fund 23

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Software    0.7%
Microsoft Corp.		26,977	$	2,881,413
Specialty Retail    1.0%
Home Depot, Inc. (The)		2,664		468,544
Lowe’s Cos., Inc.		14,831		1,412,208
Ross Stores, Inc.		20,474		2,026,926
				3,907,678
Technology Hardware, Storage & Peripherals    0.6%
Apple, Inc.		10,702		2,342,240
Textiles, Apparel & Luxury Goods    0.6%
NIKE, Inc. (Class B Stock)		20,286		1,522,261
Tapestry, Inc.		24,496		1,036,426
				2,558,687
TOTAL COMMON STOCKS (cost $169,222,782)				179,565,228
EXCHANGE TRADED FUNDS    13.7%
Invesco Preferred ETF		1,141,788		15,996,450
SPDR Bloomberg Barclays Convertible Securities ETF		640,342		32,170,782
SPDR S&P 500 ETF Trust		26,450		7,158,163
TOTAL EXCHANGE TRADED FUNDS (cost $54,426,420)				55,325,395
PREFERRED STOCKS    2.8%
Equity Real Estate Investment Trusts (REITs)    2.6%
American Homes 4 Rent		58,587		1,295,944
EPR Properties (Class G Stock)		58,442		1,341,244
Investors Real Estate Trust		33,580		818,512
Jernigan Capital, Inc. (Class B Stock)		33,650		812,647
Monmouth Real Estate Investment Corp.		44,305		1,063,320
Pebblebrook Hotel Trust		32,839		799,465
Pennsylvania Real Estate Investment Trust		32,224		723,107
Rexford Industrial Realty, Inc.(a)		21,838		507,734
UMH Properties, Inc.		41,143		942,998
Urstadt Biddle Properties, Inc. (Class H Stock)		32,833		760,084
Vornado Realty Trust		60,686		1,330,237
				10,395,292

See Notes to Financial Statements.

24

Description						Shares		Value
PREFERRED STOCKS (Continued)
Multi-Utilities    0.2%
Sempra Energy,
Series A, CVT, 6.000%							8,325	$	825,507
Series B, CVT, 6.750%							794		79,170
									904,677
TOTAL PREFERRED STOCKS (cost $12,045,519)									11,299,969
	Interest Rate			Maturity Date		Principal Amount (000)#
ASSET-BACKED SECURITIES    1.5%
Collateralized Loan Obligations
Adams Mill CLO Ltd. (Cayman Islands), Series 2014-01A, Class A1R, 144A, 3 Month LIBOR + 1.100%		3.536	%(c)		07/15/26		468		468,275
Atrium (Cayman Islands), Series 12A, Class AR, 144A, 3 Month LIBOR + 0.830%		3.299	(c)		04/22/27		250		248,788
Benefit Street Partners CLO Ltd. (Cayman Islands), Series 2015-VIIA, Class A1AR, 144A, 3 Month LIBOR + 0.780%		3.225	(c)		07/18/27		500		498,369
CIFC Funding Ltd. (Cayman Islands), Series 2015-03A, Class AR, 144A, 3 Month LIBOR + 0.870%		3.320	(c)		04/19/29		500		497,857
MidOcean Credit CLO (Cayman Islands), Series 2014-03A, Class A1R, 144A, 3 Month LIBOR + 1.120%		3.589	(c)		04/21/31		500		498,559
OCP CLO Ltd. (Cayman Islands), Series 2015-09A, Class A1R, 144A, 3 Month LIBOR + 0.800%		3.236	(c)		07/15/27		500		497,751
OZLM Ltd. (Cayman Islands), Series 2015-13A, Class A1R, 144A, 3 Month LIBOR + 1.080%		3.600	(c)		07/30/27		500		500,208
Silvermore CLO Ltd. (Cayman Islands), Series 2014-01A, Class A1R, 144A, 3 Month LIBOR + 1.170%		3.484	(c)		05/15/26		267		266,762
Venture CLO Ltd. (Cayman Islands), Series 2015-21A, Class AR, 144A, 3 Month LIBOR + 0.880%		3.316	(c)		07/15/27		750		748,017
Series 2016-24A, Class A1D, 144A, 3 Month LIBOR + 1.420%		3.889	(c)		10/20/28		350		350,133

See Notes to Financial Statements.

PGIM Income Builder Fund 25

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
ASSET-BACKED SECURITIES (Continued)
Collateralized Loan Obligations (cont’d.)
Wellfleet CLO Ltd. (Cayman Islands), Series 2016-01A, Class AR, 144A, 3 Month LIBOR + 0.910%		3.379	%(c)		04/20/28		350	$	348,389
Series 2016-02A, Class A1R, 144A, 3 Month LIBOR + 1.140% (Cap N/A, Floor 1.140%)		3.609	(c)		10/20/28		500		500,000
Zais CLO Ltd. (Cayman Islands), Series 2018-02A, Class A, 144A, 3 Month LIBOR + 1.200%		3.720	(c)		07/20/31		500		499,554
TOTAL ASSET-BACKED SECURITIES (cost $5,934,337)									5,922,662
CONVERTIBLE BOND    0.2%
Insurance
AXA SA (France), Sr. Unsec’d. Notes, 144A, (cost $640,793)		7.250			05/15/21		623		639,513
CORPORATE BONDS    20.5%
Aerospace & Defense    0.4%
Arconic, Inc.,
Sr. Unsec’d. Notes		5.125			10/01/24		70		69,349
Bombardier, Inc. (Canada),
Sr. Unsec’d. Notes, 144A		7.500			12/01/24		1,000		1,016,250
Sr. Unsec’d. Notes, 144A		8.750			12/01/21		275		295,625
TransDigm UK Holdings PLC,
Gtd. Notes, 144A,		6.875			05/15/26		200		199,500
TransDigm, Inc.,
Gtd. Notes		6.375			06/15/26		50		49,000
Gtd. Notes		6.500			07/15/24		125		126,355
									1,756,079
Agriculture    0.0%
Vector Group Ltd.,
Sr. Sec’d. Notes, 144A,		6.125			02/01/25		125		113,750
Auto Manufacturers    0.1%
Allison Transmission, Inc.,
Sr. Unsec’d. Notes, 144A,		4.750			10/01/27		150		137,813

See Notes to Financial Statements.

26

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Auto Manufacturers (cont’d.)
JB Poindexter & Co., Inc.,
Sr. Unsec’d. Notes, 144A,		7.125	%		04/15/26		75	$	77,250
Navistar International Corp.,
Gtd. Notes, 144A,(a)		6.625			11/01/25		350		357,000
									572,063
Auto Parts & Equipment    0.3%
Adient Global Holdings Ltd.,
Gtd. Notes, 144A,(a)		4.875			08/15/26		400		343,000
American Axle & Manufacturing, Inc.,
Gtd. Notes(a)		6.250			04/01/25		50		47,188
Gtd. Notes		6.250			03/15/26		225		212,625
Gtd. Notes		6.500			04/01/27		75		71,344
Cooper-Standard Automotive, Inc.,
Gtd. Notes, 144A,		5.625			11/15/26		300		283,500
Dana Financing Luxembourg Sarl,
Gtd. Notes, 144A		5.750			04/15/25		125		120,000
Gtd. Notes, 144A		6.500			06/01/26		125		123,750
Titan International, Inc.,
Sr. Sec’d. Notes		6.500			11/30/23		175		163,187
									1,364,594
Banks    0.4%
Banque Centrale de Tunisie International Bond (Tunisia), Sr. Unsec’d. Notes		5.750			01/30/25		200		169,553
BBVA Bancomer SA/Texas (Mexico),
Sub. Notes, 144A,		6.750			09/30/22		200		210,300
CIT Group, Inc.,
Sub. Notes		6.125			03/09/28		250		258,750
Citigroup, Inc.,
Jr. Sub. Notes, Series Q,		5.950			12/29/49		100		101,625
State Savings Bank of Ukraine Via SSB #1 PLC (Ukraine),
Sr. Unsec’d. Notes		9.625			03/20/25		200		198,524
TC Ziraat Bankasi AS (Turkey),
Sr. Unsec’d. Notes, 144A, MTN,		5.125			09/29/23		200		169,396
Vnesheconombank Via VEB Finance PLC (Russia),
Sr. Unsec’d. Notes		5.942			11/21/23		200		190,933
Sr. Unsec’d. Notes		6.025			07/05/22		200		194,040
									1,493,121

See Notes to Financial Statements.

PGIM Income Builder Fund 27

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Beverages    0.0%
Cott Holdings, Inc. (Canada),
Gtd. Notes, 144A,		5.500	%		04/01/25		150	$	142,875
Building Materials    0.4%
Cemex SAB de CV (Mexico),
Sr. Sec’d. Notes, 144A,		5.700			01/11/25		200		195,440
Griffon Corp.,
Gtd. Notes		5.250			03/01/22		430		403,125
Masonite International Corp.,
Gtd. Notes, 144A,		5.750			09/15/26		75		71,250
Standard Industries, Inc.,
Sr. Unsec’d. Notes, 144A		4.750			01/15/28		175		156,406
Sr. Unsec’d. Notes, 144A		5.375			11/15/24		75		72,000
Summit Materials LLC/Summit Materials Finance Corp.,
Gtd. Notes		6.125			07/15/23		75		72,562
Gtd. Notes		8.500			04/15/22		100		105,500
Gtd. Notes, 144A		5.125			06/01/25		75		67,125
U.S. Concrete, Inc.,
Gtd. Notes		6.375			06/01/24		275		256,094
									1,399,502
Chemicals    1.1%
Alpha 2 BV (Germany),
Sr. Unsec’d. Notes, 144A, Cash coupon 8.750% or PIK 9.500%(a)		8.750			06/01/23		225		224,437
Alpha 3 BV/Alpha US Bidco, Inc. (United Kingdom),
Gtd. Notes, 144A,		6.250			02/01/25		200		190,750
Ashland LLC,
Gtd. Notes		6.875			05/15/43		375		379,687
Chemours Co. (The),
Gtd. Notes		5.375			05/15/27		210		195,300
Gtd. Notes		6.625			05/15/23		5		5,113
Gtd. Notes		7.000			05/15/25		110		113,300
CNAC HK Finbridge Co. Ltd. (China),
Gtd. Notes		4.875			03/14/25		400		396,840
Cornerstone Chemical Co.,
Sr. Sec’d. Notes, 144A,		6.750			08/15/24		185		179,681
Hexion, Inc.,
Sec’d. Notes, 144A		13.750			02/01/22		220		139,700

See Notes to Financial Statements.

28

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Chemicals (cont’d.)
Hexion, Inc., (cont’d.)
Sr. Sec’d. Notes, 144A		10.375	%		02/01/22		100	$	89,375
Mexichem SAB de CV (Mexico),
Gtd. Notes, 144A,		5.500			01/15/48		225		197,890
NOVA Chemicals Corp. (Canada),
Sr. Unsec’d. Notes, 144A,		5.250			06/01/27		520		469,300
Olin Corp.,
Sr. Unsec’d. Notes		5.000			02/01/30		30		26,935
Platform Specialty Products Corp.,
Gtd. Notes, 144A		5.875			12/01/25		175		166,250
Gtd. Notes, 144A		6.500			02/01/22		90		91,238
PQ Corp.,
Sr. Sec’d. Notes, 144A,		6.750			11/15/22		50		51,500
Rain CII Carbon LLC/CII Carbon Corp.,
Sec’d. Notes, 144A,		7.250			04/01/25		300		302,250
SASOL Financing USA LLC (South Africa),
Gtd. Notes		5.875			03/27/24		200		201,476
Starfruit Finco BV/Starfruit US Holdco LLC (Netherlands),
Sr. Unsec’d. Notes, 144A,		8.000			10/01/26		150		145,500
TPC Group, Inc.,
Sr. Sec’d. Notes, 144A,		8.750			12/15/20		245		240,100
Tronox Finance PLC,
Gtd. Notes, 144A,(a)		5.750			10/01/25		255		223,444
Tronox, Inc.,
Gtd. Notes, 144A,(a)		6.500			04/15/26		155		141,438
Venator Finance Sarl/Venator Materials LLC,
Gtd. Notes, 144A,(a)		5.750			07/15/25		260		221,650
									4,393,154
Coal    0.1%
Warrior Met Coal, Inc.,
Sr. Sec’d. Notes, 144A,		8.000			11/01/24		165		169,538
Commercial Services    0.7%
Laureate Education, Inc.,
Gtd. Notes, 144A,		8.250			05/01/25		705		752,587
Nielsen Finance LLC/Nielsen Finance Co.,
Gtd. Notes, 144A,		5.000			04/15/22		165		160,669
Refinitiv US Holdings, Inc.,
Gtd. Notes, 144A(a)		8.250			11/15/26		500		486,250
Sr. Sec’d. Notes, 144A(a)		6.250			05/15/26		225		223,875

See Notes to Financial Statements.

PGIM Income Builder Fund 29

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Commercial Services (cont’d.)
United Rentals North America, Inc.,
Gtd. Notes		4.875	%		01/15/28		775	$	698,236
Gtd. Notes		5.500			05/15/27		150		142,312
Gtd. Notes		5.875			09/15/26		150		147,000
Gtd. Notes		6.500			12/15/26		125		126,374
Verscend Escrow Corp.,
Sr. Unsec’d. Notes, 144A,		9.750			08/15/26		125		125,313
									2,862,616
Computers    0.3%
Banff Merger Sub, Inc.,
Sr. Unsec’d. Notes, 144A,		9.750			09/01/26		470		451,200
Everi Payments, Inc.,
Gtd. Notes, 144A,		7.500			12/15/25		200		199,000
Exela Intermediate LLC/Exela Finance, Inc.,
Sr. Sec’d. Notes, 144A,		10.000			07/15/23		85		88,375
NCR Corp.,
Gtd. Notes		6.375			12/15/23		200		199,500
West Corp.,
Gtd. Notes, 144A,		8.500			10/15/25		475		428,687
									1,366,762
Distribution/Wholesale    0.1%
Global Partners LP/GLP Finance Corp.,
Gtd. Notes		6.250			07/15/22		50		49,125
Gtd. Notes		7.000			06/15/23		250		249,063
H&E Equipment Services, Inc.,
Gtd. Notes		5.625			09/01/25		150		142,875
									441,063
Diversified Financial Services    0.5%
LPL Holdings, Inc.,
Gtd. Notes, 144A,		5.750			09/15/25		150		145,688
Nationstar Mortgage Holdings, Inc.,
Gtd. Notes, 144A,		9.125			07/15/26		800		812,000
Navient Corp.,
Sr. Unsec’d. Notes		6.625			07/26/21		50		51,438
Sr. Unsec’d. Notes		7.250			09/25/23		200		207,000
Springleaf Finance Corp.,
Gtd. Notes		6.875			03/15/25		175		167,562

See Notes to Financial Statements.

30

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Diversified Financial Services (cont’d.)
Springleaf Finance Corp., (cont’d.)
Gtd. Notes		7.125	%		03/15/26		275	$	260,562
Tempo Acquisition LLC/Tempo Acquisition Finance Corp.,
Sr. Unsec’d. Notes, 144A,		6.750			06/01/25		175		166,635
Travelport Corporate Finance PLC,
Sr. Sec’d. Notes, 144A,		6.000			03/15/26		175		175,437
VFH Parent LLC/Orchestra Co-Issuer, Inc.,
Sec’d. Notes, 144A,		6.750			06/15/22		150		153,000
									2,139,322
Electric    1.1%
Calpine Corp.,
Sr. Unsec’d. Notes(a)		5.375			01/15/23		325		307,937
Sr. Unsec’d. Notes		5.500			02/01/24		175		158,813
Sr. Unsec’d. Notes(a)		5.750			01/15/25		850		759,517
Comision Federal de Electricidad (Mexico),
Sr. Unsec’d. Notes		5.750			02/14/42		200		185,952
Eskom Holdings SOC Ltd. (South Africa),
Sr. Unsec’d. Notes		5.750			01/26/21		400		383,000
Sr. Unsec’d. Notes, MTN		6.750			08/06/23		200		187,000
GenOn Energy, Inc.,
Sr. Unsec’d. Notes(d)		7.875			06/15/17		400		275,000
Sr. Unsec’d. Notes(a)(d)		9.875			10/15/20		275		187,687
Listrindo Capital BV (Indonesia),
Gtd. Notes, 144A,		4.950			09/14/26		200		177,800
NRG Energy, Inc.,
Gtd. Notes		5.750			01/15/28		100		99,750
Gtd. Notes		6.250			05/01/24		144		147,007
Gtd. Notes		6.625			01/15/27		100		103,500
NRG REMA LLC,
Pass-Through Certificates, Series C		9.681			07/02/26		325		277,449
Perusahaan Listrik Negara PT (Indonesia),
Sr. Unsec’d. Notes, 144A, MTN,		5.450			05/21/28		200		197,883
Vistra Energy Corp.,
Gtd. Notes		7.625			11/01/24		488		516,060
Vistra Operations Co. LLC,
Gtd. Notes, 144A,		5.500			09/01/26		350		344,750
									4,309,105

See Notes to Financial Statements.

PGIM Income Builder Fund 31

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Electronics    0.1%
Itron, Inc.,
Gtd. Notes, 144A,		5.000	%		01/15/26		100	$	93,125
Sensata Technologies BV,
Gtd. Notes, 144A,		5.000			10/01/25		150		144,750
									237,875
Energy-Alternate Sources    0.1%
Neerg Energy Ltd. (Mauritius),
Sr. Sec’d. Notes		6.000			02/13/22		200		187,794
Engineering & Construction    0.3%
AECOM,
Gtd. Notes		5.125			03/15/27		175		162,750
Gtd. Notes		5.875			10/15/24		75		76,312
Mexico City Airport Trust (Mexico),
Sr. Sec’d. Notes, 144A,		4.250			10/31/26		200		167,100
Pisces Midco, Inc.,
Gtd. Notes, 144A,		8.000			04/15/26		275		267,094
StandardAero Aviation Holdings, Inc.,
Gtd. Notes, 144A,		10.000			07/15/23		150		161,493
TopBuild Corp.,
Gtd. Notes, 144A,		5.625			05/01/26		250		238,125
									1,072,874
Entertainment    0.8%
AMC Entertainment Holdings, Inc.,
Gtd. Notes(a)		5.750			06/15/25		225		208,125
Gtd. Notes		5.875			11/15/26		325		298,188
Caesars Resort Collection LLC/CRC Finco, Inc.,
Gtd. Notes, 144A,		5.250			10/15/25		600		558,375
Churchill Downs, Inc.,
Gtd. Notes, 144A,		4.750			01/15/28		125		113,750
International Game Technology PLC,
Sr. Sec’d. Notes, 144A,		6.500			02/15/25		350		354,375
Jacobs Entertainment, Inc.,
Sec’d. Notes, 144A,		7.875			02/01/24		175		184,406
National CineMedia LLC,
Sr. Sec’d. Notes		6.000			04/15/22		100		101,000
Sr. Unsec’d. Notes		5.750			08/15/26		275		259,875
Penn National Gaming, Inc.,
Sr. Unsec’d. Notes, 144A,		5.625			01/15/27		200		186,000

See Notes to Financial Statements.

32

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Entertainment (cont’d.)
Scientific Games International, Inc.,
Gtd. Notes		6.625	%		05/15/21		600	$	580,500
Gtd. Notes		10.000			12/01/22		150		156,750
Sr. Sec’d. Notes, 144A		5.000			10/15/25		125		116,250
									3,117,594
Environmental Control    0.1%
Advanced Disposal Services, Inc.,
Gtd. Notes, 144A,		5.625			11/15/24		175		170,625
Foods    0.4%
Albertsons Cos LLC/Safeway, Inc./New Albertsons LP/Albertson’s LLC,
Gtd. Notes		5.750			03/15/25		250		220,000
B&G Foods, Inc.,
Gtd. Notes		4.625			06/01/21		25		24,844
Gtd. Notes		5.250			04/01/25		150		142,875
ESAL GmbH,
Gtd. Notes, 144A,		6.250			02/05/23		200		196,250
JBS USA LUX SA/JBS USA Finance, Inc.,
Gtd. Notes, 144A		5.750			06/15/25		300		288,000
Gtd. Notes, 144A		5.875			07/15/24		200		196,300
Matterhorn Merger Sub LLC/Matterhorn Finance Sub, Inc.,
Sr. Unsec’d. Notes, 144A,		8.500			06/01/26		100		92,000
Pilgrim’s Pride Corp.,
Gtd. Notes, 144A		5.750			03/15/25		75		69,938
Gtd. Notes, 144A		5.875			09/30/27		350		316,750
Post Holdings, Inc.,
Gtd. Notes, 144A,		5.625			01/15/28		225		211,567
									1,758,524
Gas    0.1%
AmeriGas Partners LP/AmeriGas Finance Corp.,
Sr. Unsec’d. Notes		5.500			05/20/25		175		163,625
Sr. Unsec’d. Notes		5.875			08/20/26		225		212,625
Superior Plus LP/Superior General Partner, Inc. (Canada),
Sr. Unsec’d. Notes, 144A,		7.000			07/15/26		175		174,563
									550,813

See Notes to Financial Statements.

PGIM Income Builder Fund 33

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Healthcare-Products    0.1%
Mallinckrodt International Finance SA,
Gtd. Notes		4.750	%		04/15/23		275	$	225,500
Healthcare-Services    0.8%
Acadia Healthcare Co., Inc.,
Gtd. Notes		6.500			03/01/24		50		50,825
CHS/Community Health Systems, Inc.,
Gtd. Notes		6.875			02/01/22		914		462,027
Sec’d. Notes, 144A(a)		8.125			06/30/24		327		258,330
DaVita, Inc.,
Gtd. Notes		5.000			05/01/25		25		23,625
Encompass Health Corp.,
Gtd. Notes		5.125			03/15/23		25		25,000
Hadrian Merger Sub, Inc.,
Sr. Unsec’d. Notes, 144A,		8.500			05/01/26		150		142,875
HCA, Inc.,
Gtd. Notes(a)		5.375			02/01/25		670		674,187
Select Medical Corp.,
Gtd. Notes		6.375			06/01/21		150		151,313
Surgery Center Holdings, Inc.,
Gtd. Notes, 144A(a)		6.750			07/01/25		100		94,000
Gtd. Notes, 144A		8.875			04/15/21		100		102,750
Tenet Healthcare Corp.,
Sr. Unsec’d. Notes		6.750			02/01/20		250		256,875
Sr. Unsec’d. Notes(a)		6.750			06/15/23		325		322,969
Sr. Unsec’d. Notes		8.125			04/01/22		550		572,687
									3,137,463
Home Builders    0.8%
Ashton Woods USA LLC/Ashton Woods Finance Co.,
Sr. Unsec’d. Notes, 144A,		6.750			08/01/25		225		208,687
Beazer Homes USA, Inc.,
Gtd. Notes		5.875			10/15/27		100		80,750
Gtd. Notes		6.750			03/15/25		225		197,437
Gtd. Notes		7.250			02/01/23		5		4,700
Brookfield Residential Properties, Inc. (Canada),
Gtd. Notes, 144A,		6.375			05/15/25		150		141,188
KB Home,
Gtd. Notes		7.000			12/15/21		175		181,562
Lennar Corp.,
Gtd. Notes		4.750			05/30/25		85		80,963
Gtd. Notes		4.750			11/29/27		175		163,625

See Notes to Financial Statements.

34

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Home Builders (cont’d.)
Lennar Corp., (cont’d.)
Gtd. Notes		4.875	%		12/15/23		65	$	63,456
Gtd. Notes		5.250			06/01/26		75		71,630
M/I Homes, Inc.,
Gtd. Notes		5.625			08/01/25		75		69,000
Gtd. Notes		6.750			01/15/21		75		75,188
Mattamy Group Corp. (Canada),
Sr. Unsec’d. Notes, 144A		6.500			10/01/25		125		117,500
Sr. Unsec’d. Notes, 144A		6.875			12/15/23		125		121,719
Meritage Homes Corp.,
Gtd. Notes		5.125			06/06/27		275		242,000
Gtd. Notes		6.000			06/01/25		275		267,437
New Home Co., Inc. (The),
Gtd. Notes		7.250			04/01/22		150		148,500
PulteGroup, Inc.,
Gtd. Notes		5.000			01/15/27		125		115,625
Gtd. Notes		5.500			03/01/26		200		196,000
Shea Homes LP/Shea Homes Funding Corp.,
Gtd. Notes, 144A,		5.875			04/01/23		75		70,875
Taylor Morrison Communities, Inc.,
Gtd. Notes		6.625			05/15/22		75		75,375
Taylor Morrison Communities, Inc./Taylor Morrison Holdings II, Inc.,
Gtd. Notes, 144A,		5.875			04/15/23		225		222,187
William Lyon Homes, Inc.,
Gtd. Notes		5.875			01/31/25		350		308,437
Gtd. Notes		7.000			08/15/22		150		149,813
									3,373,654
Home Furnishings    0.1%
Tempur Sealy International, Inc.,
Gtd. Notes		5.500			06/15/26		450		411,750
Household Products/Wares    0.1%
Spectrum Brands, Inc.,
Gtd. Notes		5.750			07/15/25		200		194,500
Housewares    0.0%
Scotts Miracle-Gro Co. (The),
Gtd. Notes		5.250			12/15/26		150		142,125

See Notes to Financial Statements.

PGIM Income Builder Fund 35

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Internet    0.0%
Zayo Group LLC/Zayo Capital, Inc.,
Gtd. Notes, 144A,		5.750	%		01/15/27		125	$	122,525
Iron/Steel    0.2%
AK Steel Corp.,
Gtd. Notes		6.375			10/15/25		85		75,650
Gtd. Notes(a)		7.000			03/15/27		120		106,200
Cleveland-Cliffs, Inc.,
Gtd. Notes(a)		5.750			03/01/25		355		335,475
United States Steel Corp.,
Sr. Unsec’d. Notes		6.250			03/15/26		125		117,813
									635,138
Leisure Time    0.0%
Silversea Cruise Finance Ltd.,
Sr. Sec’d. Notes, 144A,		7.250			02/01/25		100		107,751
Lodging    0.1%
Boyd Gaming Corp.,
Gtd. Notes		6.000			08/15/26		200		193,250
Interval Acquisition Corp.,
Gtd. Notes		5.625			04/15/23		50		50,125
Jack Ohio Finance LLC/Jack Ohio Finance 1 Corp.,
Sec’d. Notes, 144A,		10.250			11/15/22		300		326,625
									570,000
Machinery-Diversified    0.1%
ATS Automation Tooling Systems, Inc. (Canada),
Gtd. Notes, 144A,		6.500			06/15/23		100		102,500
Cloud Crane LLC,
Sec’d. Notes, 144A,		10.125			08/01/24		250		269,375
RBS Global, Inc./Rexnord LLC,
Gtd. Notes, 144A,		4.875			12/15/25		100		93,750
									465,625
Media    2.2%
Altice France SA (France),
Sr. Sec’d. Notes, 144A		7.375			05/01/26		300		287,157

See Notes to Financial Statements.

36

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Media (cont’d.)
Altice France SA (France), (cont’d.)
Sr. Sec’d. Notes, 144A		8.125	%		02/01/27		500	$	495,000
Altice US Finance I Corp.,
Sr. Sec’d. Notes, 144A,		5.375			07/15/23		200		199,962
AMC Networks, Inc.,
Gtd. Notes		4.750			08/01/25		190		176,624
Cablevision SA (Argentina),
Sr. Unsec’d. Notes		6.500			06/15/21		150		146,625
CCO Holdings LLC/CCO Holdings Capital Corp.,
Sr. Unsec’d. Notes, 144A		5.000			02/01/28		270		251,606
Sr. Unsec’d. Notes, 144A		5.125			05/01/23		200		199,000
Sr. Unsec’d. Notes, 144A		5.375			05/01/25		50		48,938
Sr. Unsec’d. Notes, 144A		5.875			05/01/27		300		294,750
Cequel Communications Holdings I LLC/Cequel Capital Corp.,
Sr. Unsec’d. Notes, 144A		5.125			12/15/21		490		488,667
Sr. Unsec’d. Notes, 144A		7.500			04/01/28		750		777,352
Sr. Unsec’d. Notes, 144A		7.750			07/15/25		200		211,500
Clear Channel Worldwide Holdings, Inc.,
Gtd. Notes, Ser. A		6.500			11/15/22		312		313,170
Gtd. Notes, Ser. A		7.625			03/15/20		330		328,763
Gtd. Notes, Ser. B		7.625			03/15/20		755		754,056
CSC Holdings LLC,
Gtd. Notes, 144A,		5.375			02/01/28		200		188,500
DISH DBS Corp.,
Gtd. Notes(a)		7.750			07/01/26		1,500		1,342,500
Gray Television, Inc.,
Gtd. Notes, 144A,		5.875			07/15/26		225		215,930
Meredith Corp.,
Gtd. Notes, 144A,		6.875			02/01/26		55		55,000
Midcontinent Communications/Midcontinent Finance Corp.,
Gtd. Notes, 144A,		6.875			08/15/23		180		187,650
Nexstar Broadcasting, Inc.,
Gtd. Notes, 144A,		5.625			08/01/24		200		191,000
Quebecor Media, Inc. (Canada),
Sr. Unsec’d. Notes		5.750			01/15/23		250		250,625
Radiate Holdco LLC/Radiate Finance, Inc.,
Sr. Unsec’d. Notes, 144A		6.625			02/15/25		25		23,375
Sr. Unsec’d. Notes, 144A		6.875			02/15/23		390		374,400
Sinclair Television Group, Inc.,
Gtd. Notes, 144A		5.125			02/15/27		100		90,000

See Notes to Financial Statements.

PGIM Income Builder Fund 37

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Media (cont’d.)
Sinclair Television Group, Inc., (cont’d.)
Gtd. Notes, 144A		5.875	%		03/15/26		150	$	142,875
Tribune Media Co.,
Gtd. Notes		5.875			07/15/22		150		151,875
Univision Communications, Inc.,
Sr. Sec’d. Notes, 144A		5.125			05/15/23		260		244,920
Sr. Sec’d. Notes, 144A		5.125			02/15/25		200		182,800
UPCB Finance IV Ltd. (Netherlands),
Sr. Sec’d. Notes, 144A,		5.375			01/15/25		75		72,975
Ziggo Bond Co. BV (Netherlands),
Sr. Unsec’d. Notes, 144A,		6.000			01/15/27		150		133,500
									8,821,095
Metal Fabricate/Hardware    0.1%
Novelis Corp.,
Gtd. Notes, 144A		5.875			09/30/26		125		117,812
Gtd. Notes, 144A		6.250			08/15/24		75		74,250
TriMas Corp.,
Gtd. Notes, 144A,		4.875			10/15/25		75		70,900
Zekelman Industries, Inc.,
Sr. Sec’d. Notes, 144A,		9.875			06/15/23		200		213,000
									475,962
Mining    0.6%
Constellium NV,
Gtd. Notes, 144A,		5.875			02/15/26		250		233,125
Corp. Nacional del Cobre de Chile (Chile),
Sr. Unsec’d. Notes		4.875			11/04/44		400		389,495
First Quantum Minerals Ltd. (Zambia),
Gtd. Notes, 144A		6.500			03/01/24		250		218,750
Gtd. Notes, 144A		7.250			04/01/23		200		184,750
Gtd. Notes, 144A		7.500			04/01/25		200		178,500
Freeport-McMoRan, Inc.,
Gtd. Notes		3.875			03/15/23		415		383,875
IAMGOLD Corp. (Canada),
Gtd. Notes, 144A,		7.000			04/15/25		200		198,250
International Wire Group, Inc.,
Sec’d. Notes, 144A,		10.750			08/01/21		100		91,750

See Notes to Financial Statements.

38

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Mining (cont’d.)
New Gold, Inc. (Canada),
Gtd. Notes, 144A,		6.250	%		11/15/22		225	$	195,750
Nexa Resources SA (Peru),
Gtd. Notes, 144A,		5.375			05/04/27		210		204,227
									2,278,472
Miscellaneous Manufacturing    0.0%
FXI Holdings, Inc.,
Sr. Sec’d. Notes, 144A,		7.875			11/01/24		175		163,188
Oil & Gas    2.8%
Alta Mesa Holdings LP/Alta Mesa Finance Services Corp.,
Gtd. Notes		7.875			12/15/24		250		223,750
Antero Resources Corp.,
Gtd. Notes(a)		5.000			03/01/25		350		339,937
Gtd. Notes		5.625			06/01/23		50		50,000
Ascent Resources Utica Holdings LLC/ARU Finance Corp.,
Sr. Unsec’d. Notes, 144A		7.000			11/01/26		250		242,500
Sr. Unsec’d. Notes, 144A		10.000			04/01/22		276		303,945
Centennial Resource Production LLC,
Gtd. Notes, 144A,		5.375			01/15/26		175		171,062
Chesapeake Energy Corp.,
Gtd. Notes(a)		8.000			06/15/27		700		695,625
Citgo Holding, Inc.,
Sr. Sec’d. Notes, 144A,		10.750			02/15/20		650		676,000
CNX Resources Corp.,
Gtd. Notes		5.875			04/15/22		425		417,299
CrownRock LP/CrownRock Finance, Inc.,
Sr. Unsec’d. Notes, 144A,		5.625			10/15/25		225		214,031
Denbury Resources, Inc.,
Sec’d. Notes, 144A,		9.000			05/15/21		150		156,187
Diamondback Energy, Inc.,
Gtd. Notes		5.375			05/31/25		125		124,375
Endeavor Energy Resources LP/EER Finance, Inc.,
Sr. Unsec’d. Notes, 144A,		5.750			01/30/28		150		154,875
Ensco PLC,
Sr. Unsec’d. Notes		7.750			02/01/26		125		116,563
Extraction Oil & Gas, Inc.,
Gtd. Notes, 144A		5.625			02/01/26		250		211,250

See Notes to Financial Statements.

PGIM Income Builder Fund 39

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Oil & Gas (cont’d.)
Extraction Oil & Gas, Inc., (cont’d.)
Gtd. Notes, 144A		7.375	%		05/15/24		180	$	168,750
Gazprom OAO Via Gaz Capital SA (Russia),
Sr. Unsec’d. Notes, MTN,		8.625			04/28/34		130		158,886
Halcon Resources Corp.,
Gtd. Notes		6.750			02/15/25		125		113,750
Hilcorp Energy I LP/Hilcorp Finance Co.,
Sr. Unsec’d. Notes, 144A		5.000			12/01/24		25		23,594
Sr. Unsec’d. Notes, 144A		5.750			10/01/25		250		243,125
Sr. Unsec’d. Notes, 144A		6.250			11/01/28		150		144,377
Jones Energy Holdings LLC/Jones Energy Finance Corp.,
Sr. Sec’d. Notes, 144A,		9.250			03/15/23		100		100,000
KazMunayGas National Co. JSC (Kazakhstan),
Sr. Unsec’d. Notes, 144A,		6.375			10/24/48		200		202,919
MEG Energy Corp. (Canada),
Gtd. Notes, 144A		6.375			01/30/23		500		482,500
Gtd. Notes, 144A		7.000			03/31/24		150		147,375
Petrobras Global Finance BV (Brazil),
Gtd. Notes		5.299			01/27/25		45		42,919
Gtd. Notes		5.999			01/27/28		28		26,572
Gtd. Notes		6.250			03/17/24		40		40,460
Gtd. Notes		7.375			01/17/27		448		464,285
Gtd. Notes		8.750			05/23/26		250		279,212
Petroleos de Venezuela SA (Venezuela),
Gtd. Notes(d)		5.375			04/12/27		625		110,938
Gtd. Notes(d)		6.000			05/16/24		115		19,723
Gtd. Notes(d)		6.000			11/15/26		670		115,575
Gtd. Notes(d)		9.000			11/17/21		150		31,485
Gtd. Notes(d)		9.750			05/17/35		200		42,500
Sr. Sec’d. Notes, 144A		8.500			10/27/20		175		163,187
Petroleos Mexicanos (Mexico),
Gtd. Notes		5.375			03/13/22		100		99,810
Gtd. Notes		6.500			03/13/27		190		183,920
Gtd. Notes		6.500			06/02/41		420		359,646
Gtd. Notes, 144A		6.350			02/12/48		324		268,855
Gtd. Notes, 144A		6.500			01/23/29		65		62,205
Gtd. Notes, MTN		6.875			08/04/26		80		79,680
Petroleum Co. of Trinidad & Tobago Ltd. (Trinidad & Tobago),
Sr. Unsec’d. Notes		6.000			05/08/22		100		87,279
Precision Drilling Corp. (Canada),
Gtd. Notes, 144A,		7.125			01/15/26		225		223,312

See Notes to Financial Statements.

40

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Oil & Gas (cont’d.)
QEP Resources, Inc.,
Sr. Unsec’d. Notes		5.625	%		03/01/26		75	$	70,594
Range Resources Corp.,
Gtd. Notes		4.875			05/15/25		150		139,125
Gtd. Notes		5.000			03/15/23		75		72,563
Gtd. Notes		5.875			07/01/22		210		211,312
Saka Energi Indonesia PT (Indonesia),
Sr. Unsec’d. Notes, 144A,		4.450			05/05/24		200		183,173
Seven Generations Energy Ltd. (Canada),
Gtd. Notes, 144A,		5.375			09/30/25		125		116,563
Sinopec Group Overseas Development 2012 Ltd. (China),
Gtd. Notes		4.875			05/17/42		400		402,248
State Oil Co. of the Azerbaijan Republic (Azerbaijan),
Sr. Unsec’d. Notes, EMTN,		4.750			03/13/23		200		197,418
Sunoco LP/Sunoco Finance Corp.,
Gtd. Notes, 144A		4.875			01/15/23		150		144,563
Gtd. Notes, 144A		5.500			02/15/26		150		142,875
Transocean Pontus Ltd.,
Sr. Sec’d. Notes, 144A,		6.125			08/01/25		75		74,531
Transocean, Inc.,
Gtd. Notes, 144A		7.250			11/01/25		275		267,437
Gtd. Notes, 144A		7.500			01/15/26		175		171,937
WPX Energy, Inc.,
Sr. Unsec’d. Notes		5.250			09/15/24		100		98,750
Sr. Unsec’d. Notes		5.750			06/01/26		50		49,750
Sr. Unsec’d. Notes		6.000			01/15/22		115		117,588
Sr. Unsec’d. Notes		8.250			08/01/23		100		112,375
YPF SA (Argentina),
Sr. Unsec’d. Notes		8.500			03/23/21		150		151,425
Sr. Unsec’d. Notes, 144A		8.500			03/23/21		50		50,475
									11,358,940
Oil & Gas Services    0.0%
Nine Energy Service, Inc.,
Sr. Unsec’d. Notes, 144A,		8.750			11/01/23		75		76,219
Packaging & Containers    0.3%
ARD Finance SA (Luxembourg),
Sr. Sec’d. Notes, Cash coupon 7.125% or PIK 7.875%		7.125			09/15/23		400		387,750

See Notes to Financial Statements.

PGIM Income Builder Fund 41

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Packaging & Containers (cont’d.)
ARD Securities Finance SARL (Luxembourg),
Sr. Sec’d. Notes, 144A, Cash coupon 8.750% or PIK 8.750%		8.750	%		01/31/23		209	$	200,772
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. (Ireland),
Gtd. Notes, 144A,		6.000			02/15/25		200		187,500
Owens-Brockway Glass Container, Inc.,
Gtd. Notes, 144A,		6.375			08/15/25		50		50,250
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Lu,
Gtd. Notes, 144A,		7.000			07/15/24		150		150,094
									976,366
Pharmaceuticals    0.2%
Bausch Health Cos., Inc.,
Gtd. Notes, 144A,		7.500			07/15/21		255		258,825
Endo Dac/Endo Finance LLC/Endo Finco, Inc.,
Gtd. Notes, 144A		6.000			07/15/23		200		172,000
Gtd. Notes, 144A		6.000			02/01/25		200		167,500
NVA Holdings, Inc.,
Gtd. Notes, 144A,		6.875			04/01/26		200		197,500
									795,825
Pipelines    0.6%
Antero Midstream Partners LP/Antero Midstream Finance Corp.,
Gtd. Notes		5.375			09/15/24		50		48,750
CNX Midstream Partners LP/CNX Midstream Finance Corp.,
Sr. Unsec’d. Notes, 144A,		6.500			03/15/26		100		97,500
DCP Midstream Operating LP,
Gtd. Notes		5.600			04/01/44		150		135,750
Gtd. Notes, 144A		6.450			11/03/36		150		154,875
Energy Transfer LP,
Sr. Sec’d. Notes		7.500			10/15/20		150		158,812
NGPL PipeCo LLC,
Sr. Unsec’d. Notes, 144A		4.875			08/15/27		125		120,313
Sr. Unsec’d. Notes, 144A		7.768			12/15/37		175		204,750
Rockies Express Pipeline LLC,
Sr. Unsec’d. Notes, 144A		6.875			04/15/40		450		489,375

See Notes to Financial Statements.

42

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Pipelines (cont’d.)
Rockies Express Pipeline LLC, (cont’d.)
Sr. Unsec’d. Notes, 144A		7.500	%		07/15/38		100	$	114,500
Southern Gas Corridor CJSC (Azerbaijan),
Gov’t. Gtd. Notes, 144A,		6.875			03/24/26		250		268,169
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.,
Gtd. Notes, 144A		5.500			09/15/24		125		125,781
Gtd. Notes, 144A		5.500			01/15/28		325		321,282
Targa Resources Partners LP/Targa Resources Partners Finance Corp.,
Gtd. Notes		4.250			11/15/23		100		95,905
Gtd. Notes		5.125			02/01/25		75		72,938
Gtd. Notes		6.750			03/15/24		100		104,750
									2,513,450
Real Estate    0.2%
Five Point Operating Co. LP/Five Point Capital Corp.,
Gtd. Notes, 144A,		7.875			11/15/25		200		198,140
Greystar Real Estate Partners LLC,
Sr. Sec’d. Notes, 144A,		5.750			12/01/25		275		266,750
Hunt Cos., Inc.,
Sr. Sec’d. Notes, 144A,		6.250			02/15/26		275		253,688
WeWork Cos., Inc.,
Gtd. Notes, 144A,		7.875			05/01/25		50		45,875
									764,453
Real Estate Investment Trusts (REITs)    0.2%
GLP Capital LP/GLP Financing II, Inc.,
Gtd. Notes		5.375			04/15/26		225		223,594
MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer, Inc.,
Gtd. Notes		4.500			09/01/26		100		90,500
Gtd. Notes		4.500			01/15/28		225		199,969
MPT Operating Partnership LP/MPT Finance Corp.,
Gtd. Notes		5.000			10/15/27		125		117,462
Gtd. Notes		5.250			08/01/26		75		72,375
Sabra Health Care LP,
Gtd. Notes		5.125			08/15/26		50		47,870
									751,770

See Notes to Financial Statements.

PGIM Income Builder Fund 43

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Retail    1.0%
Beacon Roofing Supply, Inc.,
Gtd. Notes		6.375	%		10/01/23		125	$	126,250
Gtd. Notes, 144A		4.875			11/01/25		175		157,063
Brinker International, Inc.,
Gtd. Notes, 144A,		5.000			10/01/24		125		117,500
CEC Entertainment, Inc.,
Gtd. Notes		8.000			02/15/22		375		336,562
Ferrellgas LP/Ferrellgas Finance Corp.,
Gtd. Notes		6.750			06/15/23		50		43,125
Sr. Unsec’d. Notes		6.750			01/15/22		150		130,125
Ferrellgas Partners LP/Ferrellgas Partners Finance Corp.,
Sr. Unsec’d. Notes		8.625			06/15/20		375		339,375
Golden Nugget, Inc.,
Gtd. Notes, 144A		8.750			10/01/25		375		385,312
Sr. Unsec’d. Notes, 144A		6.750			10/15/24		225		224,438
Hot Topic, Inc.,
Sr. Sec’d. Notes, 144A,		9.250			06/15/21		100		98,750
L Brands, Inc.,
Gtd. Notes		5.250			02/01/28		150		127,920
Gtd. Notes		5.625			10/15/23		50		49,440
Gtd. Notes		6.750			07/01/36		275		227,219
Gtd. Notes		6.875			11/01/35		200		170,000
PetSmart, Inc.,
Gtd. Notes, 144A		7.125			03/15/23		275		192,500
Sr. Sec’d. Notes, 144A		5.875			06/01/25		325		253,500
PF Chang’s China Bistro, Inc.,
Gtd. Notes, 144A,		10.250			06/30/20		175		166,250
Rite Aid Corp.,
Gtd. Notes, 144A,		6.125			04/01/23		425		360,984
Sally Holdings LLC/Sally Capital, Inc.,
Gtd. Notes		5.625			12/01/25		400		371,480
Suburban Propane Partners LP/Suburban Energy Finance Corp.,
Sr. Unsec’d. Notes		5.500			06/01/24		225		213,750
									4,091,543
Software    0.5%
Change Healthcare Holdings LLC/Change Healthcare Finance, Inc.,
Sr. Unsec’d. Notes, 144A,		5.750			03/01/25		120		117,300

See Notes to Financial Statements.

44

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Software (cont’d.)
First Data Corp.,
Gtd. Notes, 144A,		7.000	%		12/01/23		395	$	409,615
Infor Software Parent LLC/Infor Software Parent, Inc.,
Sr. Unsec’d. Notes, 144A, Cash coupon 7.125% or PIK 7.875%		7.125			05/01/21		590		588,525
Infor US, Inc.,
Gtd. Notes		6.500			05/15/22		475		473,813
Informatica LLC,
Sr. Unsec’d. Notes, 144A,		7.125			07/15/23		40		40,812
Rackspace Hosting, Inc.,
Gtd. Notes, 144A,(a)		8.625			11/15/24		175		164,500
RP Crown Parent LLC,
Sr. Sec’d. Notes, 144A,		7.375			10/15/24		380		389,500
									2,184,065
Telecommunications    1.6%
Anixter, Inc.,
Gtd. Notes, 144A,		6.000			12/01/25		100		100,250
Bharti Airtel International Netherlands BV (India),
Gtd. Notes		5.125			03/11/23		200		193,997
C&W Senior Financing DAC (Ireland),
Sr. Unsec’d. Notes, 144A,		6.875			09/15/27		200		190,500
CenturyLink, Inc.,
Sr. Unsec’d. Notes, Ser. S		6.450			06/15/21		435		444,787
Sr. Unsec’d. Notes, Ser. V		5.625			04/01/20		200		202,500
CommScope Technologies LLC,
Gtd. Notes, 144A,		6.000			06/15/25		200		194,500
Digicel Group Ltd. (Jamaica),
Sr. Unsec’d. Notes, 144A,		8.250			09/30/20		200		143,002
Digicel Ltd. (Jamaica),
Gtd. Notes, 144A		6.750			03/01/23		400		321,000
Sr. Unsec’d. Notes		6.000			04/15/21		200		181,500
GTT Communications, Inc.,
Gtd. Notes, 144A,(a)		7.875			12/31/24		365		343,100
Intelsat Jackson Holdings SA (Luxembourg),
Gtd. Notes, 144A,		9.750			07/15/25		330		345,675
Level 3 Financing, Inc.,
Gtd. Notes		5.375			01/15/24		200		198,000
MTN Mauritius Investments Ltd. (South Africa),
Gtd. Notes, 144A,		6.500			10/13/26		200		192,900
ORBCOMM, Inc.,
Sr. Sec’d. Notes, 144A,		8.000			04/01/24		340		353,600

See Notes to Financial Statements.

PGIM Income Builder Fund 45

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Telecommunications (cont’d.)
Sprint Capital Corp.,
Gtd. Notes		6.875	%		11/15/28		415	$	408,256
Gtd. Notes		8.750			03/15/32		380		415,150
Sprint Corp.,
Gtd. Notes(a)		7.625			02/15/25		655		680,381
Gtd. Notes		7.875			09/15/23		275		293,562
ViaSat, Inc.,
Sr. Unsec’d. Notes, 144A,		5.625			09/15/25		150		138,938
Wind Tre SpA (Italy),
Sr. Sec’d. Notes, 144A,		5.000			01/20/26		925		787,360
Xplornet Communications, Inc. (Canada),
Gtd. Notes, 144A, Cash coupon 9.625% or PIK 10.625%		9.625			06/01/22		433		442,473
									6,571,431
Textiles    0.0%
Eagle Intermediate Global Holding BV/Ruyi US Finance LLC (China),
Sr. Sec’d. Notes, 144A,		7.500			05/01/25		150		145,125
Transportation    0.2%
Kazakhstan Temir Zholy Finance BV (Kazakhstan),
Gtd. Notes		6.950			07/10/42		200		216,549
Pelabuhan Indonesia III Persero PT (Indonesia),
Sr. Unsec’d. Notes		4.875			10/01/24		200		195,240
XPO Logistics, Inc.,
Gtd. Notes, 144A		6.125			09/01/23		125		128,025
Gtd. Notes, 144A		6.500			06/15/22		95		97,375
									637,189
Trucking & Leasing    0.2%
Avolon Holdings Funding Ltd. (Ireland),
Gtd. Notes, 144A,		5.500			01/15/23		350		348,250
Park Aerospace Holdings Ltd. (Ireland),
Gtd. Notes, 144A		4.500			03/15/23		75		71,354
Gtd. Notes, 144A		5.250			08/15/22		175		173,687
Gtd. Notes, 144A		5.500			02/15/24		200		198,050
									791,341

See Notes to Financial Statements.

46

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
CORPORATE BONDS (Continued)
Water    0.1%
Aegea Finance Sarl (Brazil),
Gtd. Notes		5.750	%		10/10/24		200	$	192,502
TOTAL CORPORATE BONDS (cost $85,698,346)									82,594,610
SOVEREIGN BONDS    8.0%
Angolan Government International Bond (Angola),
Sr. Unsec’d. Notes		9.500			11/12/25		400		440,440
Sr. Unsec’d. Notes, 144A		8.250			05/09/28		200		199,798
Argentina Bonar Bonds (Argentina),
Bonds		8.750			05/07/24		300		290,240
Argentine Republic Government International Bond (Argentina),
Sr. Unsec’d. Notes		2.260	(cc)		12/31/38	EUR	200		126,652
Sr. Unsec’d. Notes		2.500	(cc)		12/31/38		180		100,260
Sr. Unsec’d. Notes		5.625			01/26/22		150		134,625
Sr. Unsec’d. Notes		6.875			01/11/48		75		54,937
Sr. Unsec’d. Notes		7.500			04/22/26		260		226,850
Sr. Unsec’d. Notes		7.820			12/31/33	EUR	550		563,004
Sr. Unsec’d. Notes		8.280			12/31/33		140		120,225
Bahrain Government International Bond (Bahrain),
Sr. Unsec’d. Notes		6.125			07/05/22		200		201,252
Sr. Unsec’d. Notes		6.750			09/20/29		200		190,670
Sr. Unsec’d. Notes		7.000			10/12/28		200		195,228
Brazil Loan Trust 1 (Brazil),
Gov’t. Gtd. Notes		5.477			07/24/23		101		101,297
Brazil Minas SPE via State of Minas Gerais (Brazil),
Gov’t. Gtd. Notes		5.333			02/15/28		300		290,625
Brazilian Government International Bond (Brazil),
Sr. Unsec’d. Notes		5.625			01/07/41		150		138,075
Sr. Unsec’d. Notes		7.125			01/20/37		135		148,500
Sr. Unsec’d. Notes		8.250			01/20/34		458		548,455
Colombia Government International Bond (Colombia),
Sr. Unsec’d. Notes		6.125			01/18/41		355		383,759
Sr. Unsec’d. Notes		7.375			09/18/37		210		253,575
Sr. Unsec’d. Notes		10.375			01/28/33		200		300,000
Congolese International Bond (Congo (Republic)),
Sr. Unsec’d. Notes		6.000			06/30/29		137		107,621
Costa Rica Government International Bond (Costa Rica),
Sr. Unsec’d. Notes		4.250			01/26/23		200		174,500
Sr. Unsec’d. Notes		7.000			04/04/44		200		165,078

See Notes to Financial Statements.

PGIM Income Builder Fund 47

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
SOVEREIGN BONDS (Continued)
Costa Rica Government International Bond (Costa Rica), (cont’d.)
Sr. Unsec’d. Notes		7.158	%		03/12/45		200	$	166,800
Dominican Republic International Bond (Dominican Republic),
Sr. Unsec’d. Notes		5.875			04/18/24		200		202,740
Sr. Unsec’d. Notes		6.850			01/27/45		200		197,000
Sr. Unsec’d. Notes		7.450			04/30/44		350		365,750
Sr. Unsec’d. Notes		7.500			05/06/21		145		150,075
Sr. Unsec’d. Notes, 144A		6.000			07/19/28		150		148,687
Ecuador Government International Bond (Ecuador),
Sr. Unsec’d. Notes		7.950			06/20/24		200		178,900
Sr. Unsec’d. Notes		10.500			03/24/20		200		205,000
Sr. Unsec’d. Notes		10.750			03/28/22		200		206,000
Sr. Unsec’d. Notes, 144A		7.875			01/23/28		200		167,140
Sr. Unsec’d. Notes, 144A		8.750			06/02/23		265		253,075
Sr. Unsec’d. Notes, 144A		8.875			10/23/27		200		175,800
Sr. Unsec’d. Notes, 144A		9.650			12/13/26		200		186,000
Egypt Government International Bond (Egypt),
Sr. Unsec’d. Notes		5.577			02/21/23		200		190,876
Sr. Unsec’d. Notes		5.875			06/11/25		200		186,364
Sr. Unsec’d. Notes, 144A, MTN		4.750			04/16/26	EUR	100		106,013
Sr. Unsec’d. Notes, 144A, MTN		8.500			01/31/47		455		429,361
Sr. Unsec’d. Notes, MTN		6.125			01/31/22		200		197,424
El Salvador Government International Bond (El Salvador),
Sr. Unsec’d. Notes		7.375			12/01/19		205		204,692
Sr. Unsec’d. Notes		7.625			02/01/41		300		272,136
Sr. Unsec’d. Notes		7.750			01/24/23		100		100,689
Sr. Unsec’d. Notes		8.250			04/10/32		280		274,417
Ethiopia International Bond (Ethiopia),
Sr. Unsec’d. Notes		6.625			12/11/24		200		194,056
Export Credit Bank of Turkey (Turkey),
Sr. Unsec’d. Notes, 144A		5.000			09/23/21		200		184,262
Export-Import Bank of India (India),
Sr. Unsec’d. Notes, 144A		3.375			08/05/26		200		180,977
Gabon Government International Bond (Gabon),
Bonds		6.375			12/12/24		200		181,708
Sr. Unsec’d. Notes		6.950			06/16/25		200		183,996
Ghana Government International Bond (Ghana),
Sr. Unsec’d. Notes		7.875			08/07/23		300		305,649
Sr. Unsec’d. Notes		8.125			01/18/26		200		200,931
Guatemala Government Bond (Guatemala),
Sr. Unsec’d. Notes		5.750			06/06/22		200		204,360
Hellenic Republic Government Bond (Greece),
Bonds		3.000	(cc)		02/24/38	EUR	240		223,926

See Notes to Financial Statements.

48

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
SOVEREIGN BONDS (Continued)
Hellenic Republic Government Bond (Greece), (cont’d.)
Bonds		3.000	%(cc)		02/24/39	EUR	75	$	69,760
Bonds		3.000	(cc)		02/24/40	EUR	115		106,906
Honduras Government International Bond (Honduras),
Sr. Unsec’d. Notes		7.500			03/15/24		200		210,924
Sr. Unsec’d. Notes		8.750			12/16/20		200		215,358
Hungary Government International Bond (Hungary),
Sr. Unsec’d. Notes		7.625			03/29/41		294		399,105
Indonesia Government International Bond (Indonesia),
Sr. Unsec’d. Notes		7.750			01/17/38		200		249,235
Sr. Unsec’d. Notes		8.500			10/12/35		100		131,066
Sr. Unsec’d. Notes, 144A		4.350			01/08/27		200		192,224
Sr. Unsec’d. Notes, MTN		4.750			01/08/26		280		276,723
Sr. Unsec’d. Notes, MTN		5.125			01/15/45		200		187,870
Sr. Unsec’d. Notes, MTN		5.250			01/17/42		200		192,084
Iraq International Bond (Iraq),
Sr. Unsec’d. Notes		6.752			03/09/23		400		389,384
Unsec’d. Notes		5.800			01/15/28		250		228,997
Ivory Coast Government International Bond (Ivory Coast),
Sr. Unsec’d. Notes		5.375			07/23/24		400		373,840
Sr. Unsec’d. Notes		6.375			03/03/28		200		185,372
Jamaica Government International Bond (Jamaica),
Sr. Unsec’d. Notes		7.875			07/28/45		200		233,000
Sr. Unsec’d. Notes		9.250			10/17/25		200		246,448
Jordan Government International Bond (Jordan),
Sr. Unsec’d. Notes, 144A		7.375			10/10/47		200		181,032
KazAgro National Management Holding JSC (Kazakhstan),
Sr. Unsec’d. Notes, MTN		4.625			05/24/23		200		197,370
Kazakhstan Government International Bond (Kazakhstan),
Sr. Unsec’d. Notes, MTN		6.500			07/21/45		200		238,130
Kenya Government International Bond (Kenya),
Sr. Unsec’d. Notes		6.875			06/24/24		200		194,582
Sr. Unsec’d. Notes, 144A		8.250			02/28/48		200		182,328
Lebanon Government International Bond (Lebanon),
Sr. Unsec’d. Notes		6.000			01/27/23		89		76,599
Sr. Unsec’d. Notes		6.400			05/26/23		100		86,508
Sr. Unsec’d. Notes		6.650			04/22/24		55		46,907
Sr. Unsec’d. Notes		6.850			05/25/29		80		62,744
Sr. Unsec’d. Notes, EMTN		6.100			10/04/22		90		78,446
Sr. Unsec’d. Notes, EMTN		6.250			05/27/22		175		153,984

See Notes to Financial Statements.

PGIM Income Builder Fund 49

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
SOVEREIGN BONDS (Continued)
Lebanon Government International Bond (Lebanon), (cont’d.)
Sr. Unsec’d. Notes, GMTN		6.250	%		11/04/24		110	$	90,630
Sr. Unsec’d. Notes, GMTN		6.375			03/09/20		120		115,428
Sr. Unsec’d. Notes, GMTN		6.600			11/27/26		50		40,365
Sr. Unsec’d. Notes, MTN		8.250			04/12/21		271		259,358
Malaysia Government Bond (Malaysia),
Sr. Unsec’d. Notes		4.378			11/29/19	MYR	530		127,870
Malaysia Sukuk Global Bhd (Malaysia),
Sr. Unsec’d. Notes, 144A		4.080			04/27/46		250		235,265
Mexican Bonos (Mexico),
Bonds, Ser. M		6.500			06/09/22	MXN	710		32,632
Mexico Government International Bond (Mexico),
Sr. Unsec’d. Notes, MTN		6.050			01/11/40		330		342,375
Sr. Unsec’d. Notes, MTN		6.750			09/27/34		203		232,942
Mongolia Government International Bond (Mongolia),
Sr. Unsec’d. Notes, EMTN		10.875			04/06/21		200		222,063
Sr. Unsec’d. Notes, MTN		5.125			12/05/22		200		189,201
Nigeria Government International Bond (Nigeria),
Sr. Unsec’d. Notes		6.750			01/28/21		200		206,282
Sr. Unsec’d. Notes		7.875			02/16/32		200		192,236
Sr. Unsec’d. Notes, 144A		7.696			02/23/38		200		180,002
Sr. Unsec’d. Notes, 144A, MTN		7.625			11/28/47		230		202,777
Oman Government International Bond (Oman),
Sr. Unsec’d. Notes		4.750			06/15/26		400		368,000
Sr. Unsec’d. Notes, 144A		6.500			03/08/47		205		182,962
Sr. Unsec’d. Notes, 144A		6.750			01/17/48		200		182,500
Pakistan Government International Bond (Pakistan),
Sr. Unsec’d. Notes		6.875			12/05/27		200		184,641
Sr. Unsec’d. Notes		7.250			04/15/19		300		300,228
Panama Government International Bond (Panama),
Sr. Unsec’d. Notes		4.300			04/29/53		250		223,502
Sr. Unsec’d. Notes		6.700			01/26/36		100		119,750
Sr. Unsec’d. Notes		9.375			04/01/29		40		55,400
Papua New Guinea Government International Bond (Papua New Guinea),
Sr. Unsec’d. Notes, 144A		8.375			10/04/28		200		198,250
Paraguay Government International Bond (Paraguay),
Sr. Unsec’d. Notes		6.100			08/11/44		200		201,000
Peruvian Government International Bond (Peru),
Sr. Unsec’d. Notes		5.625			11/18/50		150		168,000
Sr. Unsec’d. Notes		6.550			03/14/37		385		468,737
Philippine Government International Bond (Philippines),
Sr. Unsec’d. Notes		3.950			01/20/40		100		92,226
Sr. Unsec’d. Notes		7.750			01/14/31		310		406,319

See Notes to Financial Statements.

50

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
SOVEREIGN BONDS (Continued)
Provincia de Buenos Aires (Argentina),
Sr. Unsec’d. Notes		9.125	%		03/16/24		150	$	133,876
Sr. Unsec’d. Notes		9.950			06/09/21		300		293,160
Provincia de Buenos Airesgentina (Argentina),
Sr. Unsec’d. Notes		4.000			05/01/20	EUR	60		64,699
Qatar Government International Bond (Qatar),
Sr. Unsec’d. Notes, 144A		5.103			04/23/48		200		203,000
Republic of Belarus International Bond (Belarus),
Sr. Unsec’d. Notes, 144A		6.875			02/28/23		225		231,808
Republic of South Africa Government International Bond (South Africa),
Sr. Unsec’d. Notes		4.875			04/14/26		400		370,000
Sr. Unsec’d. Notes		5.875			09/16/25		200		197,232
Sr. Unsec’d. Notes		6.250			03/08/41		210		195,208
Romanian Government International Bond (Romania),
Sr. Unsec’d. Notes		5.125			06/15/48		30		27,748
Sr. Unsec’d. Notes, MTN		6.125			01/22/44		244		262,729
Russian Foreign Bond (Russia),
Sr. Unsec’d. Notes		4.750			05/27/26		200		197,300
Sr. Unsec’d. Notes		5.250			06/23/47		200		185,120
Sr. Unsec’d. Notes		5.625			04/04/42		200		203,210
Sr. Unsec’d. Notes		12.750			06/24/28		160		253,220
Sr. Unsec’d. Notes, 144A		4.250			06/23/27		200		189,337
Saudi Government International Bond (Saudi Arabia),
Sr. Unsec’d. Notes, MTN		5.000			04/17/49		200		191,806
Senegal Government International Bond (Senegal),
Sr. Unsec’d. Notes, 144A		6.750			03/13/48		200		164,340
Unsec’d. Notes, 144A		6.250			05/23/33		205		177,247
Sri Lanka Government International Bond (Sri Lanka),
Sr. Unsec’d. Notes		5.875			07/25/22		210		193,705
Sr. Unsec’d. Notes		6.250			10/04/20		120		115,796
Sr. Unsec’d. Notes		6.250			07/27/21		230		218,262
Sr. Unsec’d. Notes		6.850			11/03/25		200		181,512
Sr. Unsec’d. Notes, 144A		5.750			04/18/23		200		179,766
Sr. Unsec’d. Notes, 144A		6.750			04/18/28		200		176,002
Third Pakistan International Sukuk Co. Ltd. (The) (Pakistan),
Sr. Unsec’d. Notes		5.625			12/05/22		200		190,785
Sr. Unsec’d. Notes, 144A		5.500			10/13/21		200		193,638
Sr. Unsec’d. Notes, 144A		5.625			12/05/22		200		190,785
Turkey Government International Bond (Turkey),
Sr. Unsec’d. Notes		4.250			04/14/26		200		164,673
Sr. Unsec’d. Notes		4.875			10/09/26		320		270,484
Sr. Unsec’d. Notes		5.125			03/25/22		200		188,062

See Notes to Financial Statements.

PGIM Income Builder Fund 51

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
SOVEREIGN BONDS (Continued)
Turkey Government International Bond (Turkey), (cont’d.)
Sr. Unsec’d. Notes		5.625	%		03/30/21		100	$	97,494
Sr. Unsec’d. Notes		5.750			03/22/24		200		186,298
Sr. Unsec’d. Notes		6.000			01/14/41		200		159,107
Sr. Unsec’d. Notes		6.250			09/26/22		300		290,617
Sr. Unsec’d. Notes		6.875			03/17/36		124		110,242
Sr. Unsec’d. Notes		7.375			02/05/25		245		242,833
Ukraine Government International Bond (Ukraine),
Sr. Unsec’d. Notes		—	(p)		05/31/40		50		25,563
Sr. Unsec’d. Notes		7.750			09/01/21		100		98,371
Sr. Unsec’d. Notes		7.750			09/01/22		200		193,872
Sr. Unsec’d. Notes		7.750			09/01/23		180		171,216
Sr. Unsec’d. Notes		7.750			09/01/24		260		243,750
Sr. Unsec’d. Notes		7.750			09/01/25		480		441,028
Sr. Unsec’d. Notes		7.750			09/01/26		104		93,997
Sr. Unsec’d. Notes		7.750			09/01/27		100		89,422
Sr. Unsec’d. Notes, 144A		—	(p)		05/31/40		35		17,894
Ukreximbank Via Biz Finance PLC (Ukraine),
Sr. Unsec’d. Notes		9.625			04/27/22		200		201,812
Uruguay Government International Bond (Uruguay),
Sr. Unsec’d. Notes		5.100			06/18/50		255		241,612
Sr. Unsec’d. Notes		7.625			03/21/36		155		199,485
Venezuela Government International Bond (Venezuela),
Sr. Unsec’d. Notes(d)		7.000			03/31/38		220		53,460
Sr. Unsec’d. Notes(d)		7.750			10/13/19		110		27,115
Sr. Unsec’d. Notes(d)		9.000			05/07/23		100		25,250
Sr. Unsec’d. Notes(d)		11.950			08/05/31		300		76,500
Zambia Government International Bond (Zambia), Unsec’d. Notes		5.375			09/20/22		400		269,292
TOTAL SOVEREIGN BONDS (COST $34,297,824)									32,449,077
TOTAL LONG-TERM INVESTMENTS (cost $390,177,319)									395,248,958
						Shares
SHORT-TERM INVESTMENTS    4.0%
AFFILIATED MUTUAL FUNDS
PGIM Core Ultra Short Bond Fund(w)							7,129,578		7,129,578

See Notes to Financial Statements.

52

Description	Shares		Value
AFFILIATED MUTUAL FUNDS (Continued)
PGIM Institutional Money Market Fund (cost $9,220,824; includes $9,200,546 of cash collateral for securities on loan)(b)(w)		9,221,511	$	9,221,511
TOTAL SHORT-TERM INVESTMENTS (cost $16,350,402)				16,351,089
TOTAL INVESTMENTS    102.0% (cost $406,527,721)				411,600,047
Liabilities in excess of other assets(z)    (2.0)%				(8,210,630	)
NET ASSETS    100.0%			$	403,389,417

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

CVT—Convertible Security

EMTN—Euro Medium Term Note

ETF—Exchange Traded Fund

GMTN—Global Medium Term Note

LIBOR—London Interbank Offered Rate

MLP—Master Limited Partnership

MTN—Medium Term Note

OTC—Over-the-counter

PIK—Payment-in-Kind

REITs—Real Estate Investment Trusts

SPDR—Standard & Poor’s Depositary Receipts

ARS—Argentine Peso

AUD—Australian Dollar

BRL—Brazilian Real

CAD—Canadian Dollar

CHF—Swiss Franc

CLP—Chilean Peso

CNH—Chinese Renminbi

COP—Colombian Peso

CZK—Czech Koruna

EUR—Euro

HUF—Hungarian Forint

IDR—Indonesian Rupiah

ILS—Israeli Shekel

INR—Indian Rupee

KRW—South Korean Won

MXN—Mexican Peso

MYR—Malaysian Ringgit

NZD—New Zealand Dollar

PEN—Peruvian Nuevo Sol

See Notes to Financial Statements.

PGIM Income Builder Fund 53

Schedule of Investments (continued)

as of October 31, 2018

PHP—Philippine Peso

PLN—Polish Zloty

RUB—Russian Ruble

SGD—Singapore Dollar

THB—Thai Baht

TRY—Turkish Lira

TWD—New Taiwanese Dollar

ZAR—South African Rand

* 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 $9,075,158; cash collateral of $9,200,546 (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, 2018.

(cc) Variable rate instrument. The rate shown is based on the latest available information as of October 31, 2018. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.

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

(p) Interest rate not available as of October 31, 2018.

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

(z) Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments:

Futures contracts outstanding at October 31, 2018:

Number of Contracts		Type	Expiration Date		Current Notional Amount		Value / Unrealized Appreciation (Depreciation)
		Long Positions:
	15	2 Year U.S. Treasury Notes		Dec. 2018	$	3,159,844	$	(10,500	)
	6	5 Year U.S. Treasury Notes		Dec. 2018		674,297		(5,641	)
	23	10 Year U.S. Treasury Notes		Dec. 2018		2,724,062		(18,898	)
	2	20 Year U.S. Treasury Bonds		Dec. 2018		276,250		(12,438	)
	1	30 Year U.S. Ultra Treasury Bonds		Dec. 2018		149,219		(11,110	)
							$	(58,587	)

Forward foreign currency exchange contracts outstanding at October 31, 2018:

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts:
Argentine Peso,
Expiring 11/30/18	BNP Paribas	ARS	554	$	14,497	$	14,866	$	369	$	—
Expiring 11/30/18	BNP Paribas	ARS	553		14,486		14,816		330		—

See Notes to Financial Statements.

54

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
Brazilian Real,
Expiring 12/04/18	UBS AG	BRL	272	$	68,000	$	72,894	$	4,894	$	—
Expiring 02/25/19	Citibank NA	BRL	857		253,700		228,000		—		(25,700	)
Canadian Dollar,
Expiring 01/18/19	Citibank NA	CAD	187		143,400		142,111		—		(1,289	)
	Goldman Sachs
Expiring 01/18/19	International	CAD	188		143,800		143,122		—		(678	)
Chilean Peso,
Expiring 12/19/18	JPMorgan Chase	CLP	12,355		18,500		17,765		—		(735	)
Expiring 12/19/18	Morgan Stanley	CLP	53,715		77,000		77,236		236		—
Expiring 12/19/18	Morgan Stanley	CLP	45,578		69,000		65,535		—		(3,465	)
Colombian Peso,
Expiring 12/14/18	Citibank NA	COP	233,845		74,025		72,494		—		(1,531	)
Expiring 12/14/18	JPMorgan Chase	COP	228,790		71,511		70,927		—		(584	)
Expiring 12/14/18	JPMorgan Chase	COP	160,331		51,851		49,704		—		(2,147	)
Czech Koruna,
Expiring 01/25/19	UBS AG	CZK	2,367		106,000		104,204		—		(1,796	)
Euro,
Expiring 02/25/19	Citibank NA	EUR	50		59,230		57,257		—		(1,973	)
Indian Rupee,
	Goldman Sachs
Expiring 01/11/19	International	INR	8,054		107,515		107,975		460		—
	Goldman Sachs
Expiring 01/11/19	International	INR	7,700		103,357		103,224		—		(133	)
Expiring 01/11/19	JPMorgan Chase	INR	29,977		402,426		401,881		—		(545	)
Expiring 01/11/19	JPMorgan Chase	INR	24,162		321,195		323,925		2,730		—
Indonesian Rupiah,
Expiring 12/14/18	Deutsche Bank AG	IDR	3,579,403		236,655		234,056		—		(2,599	)
Expiring 12/19/18	Barclays Bank PLC	IDR	5,001,478		328,067		326,800		—		(1,267	)
Expiring 12/19/18	Barclays Bank PLC	IDR	4,503,098		297,509		294,236		—		(3,273	)
Expiring 12/19/18	Barclays Bank PLC	IDR	1,057,218		69,000		69,079		79		—
Expiring 12/19/18	Citibank NA	IDR	1,101,672		72,000		71,984		—		(16	)
Expiring 12/19/18	JPMorgan Chase	IDR	2,910,182		191,660		190,154		—		(1,506	)
Expiring 12/19/18	JPMorgan Chase	IDR	664,655		43,570		43,429		—		(141	)
Expiring 12/19/18	Morgan Stanley	IDR	1,179,640		77,000		77,079		79		—
Israeli Shekel,
Expiring 01/28/19	Barclays Bank PLC	ILS	16		4,300		4,299		—		(1	)
Mexican Peso,
Expiring 01/29/19	UBS AG	MXN	5,179		262,000		251,103		—		(10,897	)
Expiring 01/29/19	UBS AG	MXN	4,707		238,000		228,257		—		(9,743	)
New Taiwanese Dollar,
Expiring 01/11/19	Citibank NA	TWD	2,733		89,000		88,868		—		(132	)
Expiring 01/11/19	JPMorgan Chase	TWD	2,826		92,000		91,878		—		(122	)

See Notes to Financial Statements.

PGIM Income Builder Fund 55

Schedule of Investments (continued)

as of October 31, 2018

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
New Taiwanese Dollar (cont’d.),
Expiring 01/11/19	JPMorgan Chase	TWD	2,752	$	89,000	$	89,487	$	487	$	—
Expiring 01/11/19	Morgan Stanley	TWD	3,400		110,000		110,541		541		—
Peruvian Nuevo Sol,
Expiring 12/19/18	BNP Paribas	PEN	1,101		333,023		326,070		—		(6,953	)
Expiring 12/19/18	BNP Paribas	PEN	345		103,100		102,170		—		(930	)
Expiring 12/19/18	BNP Paribas	PEN	238		71,000		70,379		—		(621	)
Expiring 12/19/18	Citibank NA	PEN	632		189,739		187,013		—		(2,726	)
Expiring 12/19/18	JPMorgan Chase	PEN	323		97,415		95,716		—		(1,699	)
Expiring 12/19/18	JPMorgan Chase	PEN	322		97,197		95,360		—		(1,837	)
Philippine Peso,
Expiring 12/14/18	Barclays Bank PLC	PHP	6,115		112,000		113,955		1,955		—
Expiring 12/14/18	Barclays Bank PLC	PHP	4,869		89,000		90,735		1,735		—
Expiring 12/14/18	Barclays Bank PLC	PHP	4,745		87,000		88,417		1,417		—
Expiring 12/14/18	Barclays Bank PLC	PHP	4,313		79,000		80,361		1,361		—
Expiring 12/14/18	Barclays Bank PLC	PHP	4,247		78,000		79,147		1,147		—
Expiring 12/14/18	Citibank NA	PHP	5,312		98,000		98,976		976		—
Expiring 12/14/18	JPMorgan Chase	PHP	5,540		102,000		103,226		1,226		—
Expiring 12/14/18	JPMorgan Chase	PHP	4,536		84,000		84,523		523		—
Expiring 12/14/18	JPMorgan Chase	PHP	3,697		69,200		68,887		—		(313	)
Expiring 12/14/18	Morgan Stanley	PHP	8,147		150,000		151,807		1,807		—
Expiring 12/14/18	Morgan Stanley	PHP	7,844		144,000		146,158		2,158		—
Expiring 12/14/18	Morgan Stanley	PHP	5,811		106,000		108,280		2,280		—
Polish Zloty,
Expiring 01/25/19	Toronto Dominion	PLN	261		70,000		68,195		—		(1,805	)
Russian Ruble,
Expiring 12/19/18	Barclays Bank PLC	RUB	7,520		112,000		113,446		1,446		—
Expiring 12/19/18	Barclays Bank PLC	RUB	4,850		74,000		73,168		—		(832	)
Singapore Dollar,
Expiring 11/09/18	Bank of America	SGD	143		105,000		103,184		—		(1,816	)
Expiring 11/09/18	Citibank NA	SGD	174		127,000		125,488		—		(1,512	)
Expiring 11/09/18	Citibank NA	SGD	117		85,000		84,609		—		(391	)
Expiring 11/09/18	Citibank NA	SGD	105		77,000		76,128		—		(872	)
Expiring 11/09/18	Deutsche Bank AG	SGD	241		176,000		174,097		—		(1,903	)
Expiring 11/09/18	JPMorgan Chase	SGD	151		111,000		109,068		—		(1,932	)
Expiring 11/09/18	UBS AG	SGD	157		115,000		113,265		—		(1,735	)
South African Rand,
Expiring 12/07/18	JPMorgan Chase	ZAR	1,034		71,000		69,743		—		(1,257	)
Expiring 12/07/18	UBS AG	ZAR	1,437		93,762		96,984		3,222		—
Expiring 12/07/18	UBS AG	ZAR	1,394		97,000		94,057		—		(2,943	)
Expiring 12/07/18	UBS AG	ZAR	1,297		90,000		87,513		—		(2,487	)
South Korean Won,
Expiring 01/16/19	JPMorgan Chase	KRW	131,282		116,354		115,526		—		(828	)

See Notes to Financial Statements.

56

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
Thai Baht,
Expiring 11/09/18	Citibank NA	THB	4,677	$	144,885	$	141,124	$	—	$	(3,761	)
Expiring 11/09/18	Citibank NA	THB	3,489		108,000		105,281		—		(2,719	)
Expiring 11/09/18	Citibank NA	THB	3,319		102,000		100,147		—		(1,853	)
Expiring 11/09/18	Citibank NA	THB	3,305		101,000		99,725		—		(1,275	)
Expiring 11/09/18	Citibank NA	THB	3,179		96,000		95,911		—		(89	)
Expiring 11/09/18	Citibank NA	THB	3,009		92,000		90,793		—		(1,207	)
Expiring 11/09/18	Citibank NA	THB	2,478		76,000		74,766		—		(1,234	)
Expiring 11/09/18	Citibank NA	THB	2,415		75,000		72,868		—		(2,132	)
Expiring 11/09/18	Citibank NA	THB	2,239		68,000		67,548		—		(452	)
Expiring 11/09/18	Deutsche Bank AG	THB	2,338		72,000		70,549		—		(1,451	)
Turkish Lira,
Expiring 12/07/18	Barclays Bank PLC	TRY	560		97,000		97,868		868		—
Expiring 12/07/18	JPMorgan Chase	TRY	460		73,568		80,383		6,815		—
Expiring 12/07/18	Morgan Stanley	TRY	523		81,000		91,368		10,368		—
Expiring 12/07/18	Toronto Dominion	TRY	547		86,000		95,666		9,666		—
				$	9,181,497	$	9,118,834		59,175		(121,838	)
Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts:
Australian Dollar,
Expiring 01/18/19	Bank of America	AUD	102	$	72,439	$	72,504	$	—	$	(65	)
Brazilian Real,
Expiring 12/04/18	Barclays Bank PLC	BRL	357		96,000		95,612		388		—
	Goldman Sachs
Expiring 12/04/18	International	BRL	1,022		251,734		273,843		—		(22,109	)
Expiring 02/25/19	Citibank NA	BRL	233		59,294		61,989		—		(2,695	)
Canadian Dollar,
Expiring 01/18/19	Deutsche Bank AG	CAD	190		145,761		144,472		1,289		—
	Goldman Sachs
Expiring 01/18/19	International	CAD	188		144,839		143,054		1,785		—
Chilean Peso,
Expiring 12/19/18	BNP Paribas	CLP	352,972		524,616		507,530		17,086		—
Chinese Renminbi,
Expiring 01/28/19	Deutsche Bank AG	CNH	1,417		203,000		202,139		861		—
Expiring 01/28/19	Morgan Stanley	CNH	6,065		869,561		865,472		4,089		—
Colombian Peso,
Expiring 12/14/18	Citibank NA	COP	837,149		268,210		259,523		8,687		—
Expiring 12/14/18	Morgan Stanley	COP	269,692		90,000		83,607		6,393		—

See Notes to Financial Statements.

PGIM Income Builder Fund 57

Schedule of Investments (continued)

as of October 31, 2018

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
Colombian Peso (cont’d.),
Expiring 12/14/18	Morgan Stanley	COP	239,788	$	78,000	$	74,336	$	3,664	$	—
Czech Koruna,
Expiring 01/25/19	Citibank NA	CZK	6,634		294,874		292,068		2,806		—
Expiring 01/25/19	Deutsche Bank AG	CZK	6,634		296,641		292,068		4,573		—
Euro,
Expiring 12/19/18	UBS AG	EUR	790		903,272		898,643		4,629		—
Expiring 01/25/19	UBS AG	EUR	59		67,350		67,208		142		—
Expiring 02/25/19	Citibank NA	EUR	200		253,730		229,029		24,701		—
Hungarian Forint,
Expiring 01/25/19	JPMorgan Chase	HUF	66,889		241,173		235,131		6,042		—
Expiring 01/25/19	Toronto Dominion	HUF	90,990		326,258		319,849		6,409		—
Expiring 01/25/19	Toronto Dominion	HUF	44,816		160,965		157,538		3,427		—
Expiring 01/25/19	UBS AG	HUF	25,754		91,000		90,532		468		—
Indian Rupee,
Expiring 01/11/19	JPMorgan Chase	INR	7,483		101,000		100,322		678		—
Expiring 01/11/19	JPMorgan Chase	INR	6,307		85,000		84,550		450		—
Expiring 01/11/19	JPMorgan Chase	INR	5,171		69,200		69,319		—		(119	)
Indonesian Rupiah,
Expiring 12/14/18	Barclays Bank PLC	IDR	3,579,403		232,465		234,055		—		(1,590	)
Expiring 12/19/18	Barclays Bank PLC	IDR	2,762,370		180,000		180,495		—		(495	)
Expiring 12/19/18	Barclays Bank PLC	IDR	1,721,913		114,000		112,511		1,489		—
Expiring 12/19/18	Barclays Bank PLC	IDR	1,638,862		108,000		107,084		916		—
Expiring 12/19/18	Barclays Bank PLC	IDR	1,181,026		77,000		77,169		—		(169	)
Expiring 12/19/18	Citibank NA	IDR	1,226,800		80,000		80,160		—		(160	)
Expiring 12/19/18	JPMorgan Chase	IDR	2,059,414		136,000		134,564		1,436		—
Expiring 12/19/18	JPMorgan Chase	IDR	1,958,343		130,000		127,960		2,040		—
Expiring 12/19/18	JPMorgan Chase	IDR	1,868,247		123,000		122,073		927		—
Expiring 12/19/18	JPMorgan Chase	IDR	1,857,767		123,000		121,388		1,612		—
Expiring 12/19/18	JPMorgan Chase	IDR	1,293,612		86,000		84,526		1,474		—
Expiring 12/19/18	JPMorgan Chase	IDR	984,743		65,021		64,344		677		—
Expiring 12/19/18	JPMorgan Chase	IDR	767,661		49,979		50,160		—		(181	)
Expiring 12/19/18	JPMorgan Chase	IDR	416,892		27,599		27,239		360		—
Expiring 12/19/18	Morgan Stanley	IDR	1,107,000		72,997		72,332		665		—
Israeli Shekel,
Expiring 01/28/19	Citibank NA	ILS	1,049		286,415		284,089		2,326		—
Malaysian Ringgit,
Expiring 12/05/18	Barclays Bank PLC	MYR	201		48,521		47,941		580		—
Mexican Peso,
Expiring 12/19/18	JPMorgan Chase	MXN	654		34,059		31,927		2,132		—
Expiring 12/19/18	UBS AG	MXN	9,885		521,833		482,579		39,254		—
Expiring 01/29/19	UBS AG	MXN	4,657		238,000		225,816		12,184		—

See Notes to Financial Statements.

58

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
New Taiwanese Dollar,
Expiring 01/11/19	JPMorgan Chase	TWD	2,709	$	88,000	$	88,070	$	—	$	(70	)
Expiring 01/11/19	UBS AG	TWD	4,579		150,490		148,896		1,594		—
New Zealand Dollar,
Expiring 01/18/19	JPMorgan Chase	NZD	130		84,551		84,651		—		(100	)
Peruvian Nuevo Sol,
Expiring 12/19/18	JPMorgan Chase	PEN	316		95,000		93,586		1,414		—
Expiring 12/19/18	Morgan Stanley	PEN	232		70,000		68,746		1,254		—
Philippine Peso,
Expiring 12/14/18	Citibank NA	PHP	4,200		77,000		78,262		—		(1,262	)
Expiring 12/14/18	JPMorgan Chase	PHP	4,379		81,000		81,595		—		(595	)
Expiring 12/14/18	JPMorgan Chase	PHP	4,270		79,000		79,558		—		(558	)
Expiring 12/14/18	JPMorgan Chase	PHP	4,103		75,000		76,450		—		(1,450	)
Expiring 12/14/18	JPMorgan Chase	PHP	2,722		50,650		50,715		—		(65	)
Expiring 12/14/18	Morgan Stanley	PHP	20,096		368,153		374,460		—		(6,307	)
Polish Zloty,
	Goldman Sachs
Expiring 01/25/19	International	PLN	2,220		594,733		580,023		14,710		—
Russian Ruble,
Expiring 12/19/18	JPMorgan Chase	RUB	12,570		187,119		189,630		—		(2,511	)
Expiring 12/19/18	JPMorgan Chase	RUB	4,218		62,501		63,640		—		(1,139	)
Singapore Dollar,
Expiring 11/09/18	Citibank NA	SGD	219		160,424		158,308		2,116		—
Expiring 11/09/18	Citibank NA	SGD	144		105,596		104,062		1,534		—
Expiring 11/09/18	Deutsche Bank AG	SGD	125		90,000		90,040		—		(40	)
Expiring 11/09/18	Deutsche Bank AG	SGD	102		74,000		73,961		39		—
Expiring 11/09/18	Deutsche Bank AG	SGD	101		73,000		72,615		385		—
Expiring 11/09/18	JPMorgan Chase	SGD	127		93,000		92,018		982		—
Expiring 11/09/18	Morgan Stanley	SGD	79		57,900		56,965		935		—
Expiring 11/09/18	Toronto Dominion	SGD	125		91,000		90,445		555		—
Expiring 11/09/18	UBS AG	SGD	138		100,000		99,808		192		—
South African Rand,
Expiring 11/09/18	Citibank NA	ZAR	1,294		89,959		87,612		2,347		—
Expiring 12/07/18	Barclays Bank PLC	ZAR	3,156		206,382		212,935		—		(6,553	)
Expiring 12/07/18	Barclays Bank PLC	ZAR	3,156		206,382		212,935		—		(6,553	)
Expiring 12/07/18	Citibank NA	ZAR	1,052		73,711		70,990		2,721		—
Expiring 12/07/18	Citibank NA	ZAR	800		55,563		53,956		1,607		—
Expiring 12/07/18	Citibank NA	ZAR	506		34,871		34,150		721		—
Expiring 12/07/18	Citibank NA	ZAR	348		23,931		23,481		450		—
Expiring 12/07/18	Citibank NA	ZAR	207		14,233		13,942		291		—
	Goldman Sachs
Expiring 12/07/18	International	ZAR	1,064		68,756		71,769		—		(3,013	)
Expiring 12/07/18	JPMorgan Chase	ZAR	1,526		98,000		102,952		—		(4,952	)

See Notes to Financial Statements.

PGIM Income Builder Fund 59

Schedule of Investments (continued)

as of October 31, 2018

Forward foreign currency exchange contracts outstanding at October 31, 2018 (continued):

Sale Contracts	Counterparty		Notional Amount (000)		Value at Settlement Date		Current Value		Unrealized Appreciation		Unrealized Depreciation
OTC Forward Foreign Currency Exchange Contracts (cont’d.):
South African Rand (cont’d.),
Expiring 12/07/18		JPMorgan Chase	ZAR	1,033	$	68,711	$	69,668	$	—	$	(957	)
South Korean Won,
Expiring 01/16/19		Barclays Bank PLC	KRW	252,246		222,045		221,971		74		—
Expiring 01/16/19		Barclays Bank PLC	KRW	82,573		73,568		72,663		905		—
		Goldman Sachs
Expiring 01/16/19		International	KRW	80,166		71,000		70,545		455		—
Expiring 01/16/19		JPMorgan Chase	KRW	107,169		94,000		94,307		—		(307	)
Expiring 01/16/19		Morgan Stanley	KRW	85,072		75,000		74,862		138		—
Expiring 01/16/19		Morgan Stanley	KRW	82,996		73,000		73,035		—		(35	)
Swiss Franc,
Expiring 01/25/19		BNP Paribas	CHF	103		103,794		102,809		985		—
Expiring 01/25/19		Toronto Dominion	CHF	103		103,894		102,809		1,085		—
Thai Baht,
Expiring 11/09/18		Citibank NA	THB	2,919		88,000		88,064		—		(64	)
Expiring 11/09/18		Citibank NA	THB	2,694		81,000		81,288		—		(288	)
Expiring 11/09/18		UBS AG	THB	2,490		74,826		75,144		—		(318	)
Turkish Lira,
Expiring 12/07/18		JPMorgan Chase	TRY	379		65,200		66,302		—		(1,102	)
Expiring 12/07/18		JPMorgan Chase	TRY	96		16,520		16,808		—		(288	)
					$	13,418,269	$	13,280,251		204,128		(66,110	)
									$	263,303	$	(187,948	)

Cross currency exchange contracts outstanding at October 31, 2018:

Settlement

Type

Notional Amount (000)

In Exchange For (000)

Unrealized Appreciation

Unrealized Depreciation

Counterparty

OTC Cross Currency Exchange Contract:

01/25/19

CHF

102

EUR

89

$

—

$

(43

)

Toronto Dominion

Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:

Cash and securities segregated as collateral to cover requirements for open centrally cleared/exchange-traded derivatives are listed by broker as follows:

Broker	Cash and/or Foreign Currency	Securities Market Value
Citigroup Global Markets	$220,000	$  —

See Notes to Financial Statements.

60

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.

The following is a summary of the inputs used as of October 31, 2018 in valuing such portfolio securities:

	Level 1			Level 2			Level 3
Investments in Securities
Affiliated Mutual Funds	$	43,803,593		$	—		$	—
Common Stocks		163,507,385			16,057,843			—
Exchange Traded Funds		55,325,395			—			—
Preferred Stocks		11,299,969			—			—
Asset-Backed Securities
Collateralized Loan Obligations		—			5,922,662			—
Convertible Bond		—			639,513			—
Corporate Bonds		—			82,594,610			—
Sovereign Bonds		—			32,449,077			—
Other Financial Instruments*
Futures Contracts		(58,587	)		—			—
OTC Forward Foreign Currency Exchange Contracts		—			75,355			—
OTC Cross Currency Exchange Contract		—			(43	)		—
Total	$	273,877,755		$	137,739,017		$	—

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

Industry Classification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of October 31, 2018 were as follows (unaudited):

Exchange Traded Funds	13.7	%
Oil, Gas & Consumable Fuels	13.1
Equity Real Estate Investment Trusts (REITs)	12.8
Affiliated Mutual Funds (2.3% represents investments purchased with collateral from securities on loan)	10.8
Sovereign Bonds	8.0
Pharmaceuticals	2.9
Oil & Gas	2.8
Banks	2.6
Media	2.4	%
Telecommunications	1.6
Collateralized Loan Obligations	1.5
Aerospace & Defense	1.3
Chemicals	1.3
Software	1.2
Independent Power & Renewable Electricity Producers	1.2
Electric	1.1
Retail	1.0

See Notes to Financial Statements.

PGIM Income Builder Fund 61

Schedule of Investments (continued)

as of October 31, 2018

Industry Classification (continued):

Food Products	1.0	%
Specialty Retail	1.0
Entertainment	1.0
Capital Markets	0.9
Home Builders	0.8
Health Care Equipment & Supplies	0.8
Beverages	0.8
Healthcare-Services	0.8
Commercial Services	0.7
IT Services	0.7
Semiconductors & Semiconductor Equipment	0.7
Textiles, Apparel & Luxury Goods	0.6
Pipelines	0.6
Multi-Utilities	0.6
Technology Hardware, Storage & Peripherals	0.6
Mining	0.6
Communications Equipment	0.6
Electric Utilities	0.5
Diversified Financial Services	0.5
Real Estate Management & Development	0.5
Hotels, Restaurants & Leisure	0.5
Road & Rail	0.4
Foods	0.4
Insurance	0.4
Electrical Equipment	0.4
Building Materials	0.4
Mortgage Real Estate Investment Trusts (REITs)	0.3
Life Sciences Tools & Services	0.3
Computers	0.3
Auto Parts & Equipment	0.3
Multiline Retail	0.3
Metals & Mining	0.3
Engineering & Construction	0.3
Food & Staples Retailing	0.3
Health Care Providers & Services	0.3
Packaging & Containers	0.3
Diversified Telecommunication Services	0.2
Industrial Conglomerates	0.2	%
Trucking & Leasing	0.2
Real Estate	0.2
Real Estate Investment Trusts (REITs)	0.2
Transportation	0.2
Iron/Steel	0.2
Auto Manufacturers	0.1
Lodging	0.1
Gas	0.1
Energy Equipment & Services	0.1
Metal Fabricate/Hardware	0.1
Machinery-Diversified	0.1
Distribution/Wholesale	0.1
Home Furnishings	0.1
Electronics	0.1
Healthcare-Products	0.1
Household Products/Wares	0.1
Water	0.1
Energy-Alternate Sources	0.1
Environmental Control	0.1
Coal	0.1
Miscellaneous Manufacturing	0.0	*
Textiles	0.0	*
Housewares	0.0	*
Internet	0.0	*
Agriculture	0.0	*
Leisure Time	0.0	*
Oil & Gas Services	0.0	*
	102.0
Liabilities in excess of other assets	(2.0	)
	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 types of risk associated with these derivative instruments are 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.

See Notes to Financial Statements.

62

Fair values of derivative instruments as of October 31, 2018 as presented in the Statement of Assets and Liabilities:

	Asset Derivatives			Liability Derivatives
Derivatives not accounted for as hedging instruments, carried at fair value	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location		Fair Value
Foreign exchange contracts	—	$	—		Unrealized depreciation on OTC cross currency exchange contracts	$	43
Foreign exchange contracts	Unrealized appreciation on OTC forward foreign currency exchange contracts		263,303		Unrealized depreciation on OTC forward foreign currency exchange contracts		187,948
Interest rate contracts	—		—		Due from/to broker— variation margin futures		58,587	*
		$	263,303			$	246,578

* 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, 2018 are as follows:

Amount of Realized Gain (Loss) 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 Exchange Contracts
Foreign exchange contracts	$	(24,428	)	$	52,567	$	—		$	(400,117	)
Interest rate contracts		—			—		(249,747	)		—
Total	$	(24,428	)	$	52,567	$	(249,747	)	$	(400,117	)

(1) Included in net realized gain (loss) on investment transactions in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Options Purchased(2)			Options Written			Futures			Forward & Cross Currency Exchange Contracts
Foreign exchange contracts	$	(13,896	)	$	(21,253	)	$	—		$	161,065
Interest rate contracts		—			—			(4,884	)		—
Total	$	(13,896	)	$	(21,253	)	$	(4,884	)	$	161,065

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

See Notes to Financial Statements.

PGIM Income Builder Fund 63

Schedule of Investments (continued)

as of October 31, 2018

For the year ended October 31, 2018, the Fund’s average volume of derivative activities is as follows:

Options Purchased(1)		Options Written(2)		Futures Contracts— Long Positions(2)		Forward Foreign Currency Exchange Contracts— Purchased(3)
$	61,305	$	1,723,808	$	7,069,796	$	12,800,844

Forward Foreign Currency Exchange Contracts— Sold(3)		Cross Currency Exchange Contracts(4)
$	12,727,747	$	298,403

(1) Cost.

(2) Notional Amount in USD.

(3) Value at Settlement Date.

(4) Value at Trade Date.

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.

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	$	9,075,158	$	(9,075,158	)	$	—

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	$	—	$	(1,881	)	$	(1,881	)	$	—	$	(1,881	)
Barclays Bank PLC		14,360		(20,733	)		(6,373	)		—		(6,373	)
BNP Paribas		18,770		(8,504	)		10,266			—		10,266
Citibank NA		51,283		(55,333	)		(4,050	)		—		(4,050	)
Deutsche Bank AG		7,147		(5,993	)		1,154			—		1,154
Goldman Sachs
International		17,410		(25,933	)		(8,523	)		—		(8,523	)
JPMorgan Chase		32,005		(28,040	)		3,965			—		3,965
Morgan Stanley		34,607		(9,807	)		24,800			—		24,800

See Notes to Financial Statements.

64

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
Toronto Dominion	$	21,142	$	(1,848	)	$	19,294	$	—	$	19,294
UBS AG		66,579		(29,919	)		36,660		—		36,660
	$	263,303	$	(187,991	)	$	75,312	$	—	$	75,312

(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 Portfolio is limited to the market value of financial instruments/transactions and the Portfolio’s OTC derivative exposure by counterparty.

See Notes to Financial Statements.

PGIM Income Builder Fund 65

Statement of Assets and Liabilities

as of October 31, 2018

Assets
Investments at value, including securities on loan of $9,075,158:
Unaffiliated investments (cost $362,266,021)	$	367,796,454
Affiliated investments (cost $44,261,700)		43,803,593
Foreign currency, at value (cost $58,143)		57,393
Dividends and interest receivable		2,581,304
Receivable for investments sold		2,225,388
Receivable for Fund shares sold		1,037,665
Unrealized appreciation on OTC forward foreign currency exchange contracts		263,303
Deposit with broker for centrally cleared/exchange-traded derivatives		220,000
Tax reclaim receivable		33,415
Prepaid expenses		3,098
Total Assets		418,021,613
Liabilities
Payable to broker for collateral for securities on loan		9,200,546
Payable for investments purchased		2,992,319
Payable for Fund shares reacquired		1,662,742
Accrued expenses and other liabilities		299,619
Unrealized depreciation on OTC forward foreign currency exchange contracts		187,948
Distribution fee payable		132,692
Management fee payable		126,304
Affiliated transfer agent fee payable		17,989
Due to broker—variation margin futures		11,994
Unrealized depreciation on OTC cross currency exchange contracts		43
Total Liabilities		14,632,196
Net Assets	$	403,389,417
Net assets were comprised of:
Shares of beneficial interest, at par	$	44,389
Paid-in capital in excess of par		427,171,345
Total distributable earnings (loss)		(23,826,317	)
Net assets, October 31, 2018	$	403,389,417

See Notes to Financial Statements.

66

Class A
Net asset value and redemption price per share,
($153,762,430 ÷ 16,865,584 shares of beneficial interest issued and outstanding)	$	9.12
Maximum sales charge (4.50% of offering price)		0.43
Maximum offering price to public	$	9.55
Class B
Net asset value, offering price and redemption price per share,
($1,719,926 ÷ 192,411 shares of beneficial interest issued and outstanding)	$	8.94
Class C
Net asset value, offering price and redemption price per share,
($109,767,355 ÷ 12,284,674 shares of beneficial interest issued and outstanding)	$	8.94
Class R
Net asset value, offering price and redemption price per share,
($1,767,998 ÷ 194,213 shares of beneficial interest issued and outstanding)	$	9.10
Class Z
Net asset value, offering price and redemption price per share,
($133,029,001 ÷ 14,488,263 shares of beneficial interest issued and outstanding)	$	9.18
Class R6
Net asset value, offering price and redemption price per share,
($3,342,707 ÷ 364,253 shares of beneficial interest issued and outstanding)	$	9.18

See Notes to Financial Statements.

PGIM Income Builder Fund 67

Statement of Operations

Year Ended October 31, 2018

Net Investment Income (Loss)
Income
Unaffiliated dividend income (net of $166,009 foreign withholding tax)	$	10,666,948
Interest income		7,238,379
Affiliated dividend income		1,653,676
Income from securities lending, net (including affiliated income of $36,680)		167,347
Total income		19,726,350
Expenses
Management fee		3,087,433
Distribution fee(a)		1,774,565
Transfer agent’s fees and expenses (including affiliated expense of $95,565)(a)		433,946
Custodian and accounting fees		312,663
Shareholders’ reports		162,315
Registration fees(a)		107,172
Audit fee		50,911
Legal fees and expenses		24,797
Trustees’ fees		19,853
Miscellaneous		39,075
Total expenses		6,012,730
Less: Fee waiver and/or expense reimbursement(a)		(1,606,130	)
Distribution fee waiver(a)		(87,815	)
Net expenses		4,318,785
Net investment income (loss)		15,407,565
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions (including affiliated of $(533,452))		731,339
Futures transactions		(249,747	)
Forward and cross currency contract transactions		(400,117	)
Options written transactions		52,567
Foreign currency transactions		(42,879	)
		91,163
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated of $(841,658))		(21,228,363	)
Futures		(4,884	)
Forward and cross currency contracts		161,065
Options written		(21,253	)
Foreign currencies		(1,944	)
		(21,095,379	)
Net gain (loss) on investment and foreign currency transactions		(21,004,216	)
Net Increase (Decrease) In Net Assets Resulting From Operations	$	(5,596,651	)

See Notes to Financial Statements.

68

(a) Class specific expenses and waivers were as follows:

	Class A			Class B			Class C			Class R			Class Z			Class R6
Distribution fee		508,951			20,802			1,235,842			8,970			—			—
Transfer agent’s fees and expenses		163,804			7,656			107,863			1,646			152,942			35
Registration fees		22,095			15,710			18,685			15,458			20,466			14,758
Fee waiver and/or expense reimbursement		(595,638	)		(28,375	)		(424,674	)		(20,043	)		(515,108	)		(22,292	)
Distribution fee waiver		(84,825	)		—			—			(2,990	)		—			—

See Notes to Financial Statements.

PGIM Income Builder Fund 69

Statements of Changes in Net Assets

	Year Ended October 31,
	2018			2017
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	15,407,565		$	14,546,585
Net realized gain (loss) on investment and foreign currency transactions		91,163			(3,589,332	)
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(21,095,379	)		17,354,138
Net increase (decrease) in net assets resulting from operations		(5,596,651	)		28,311,391
Dividends and Distributions
Distributions from distributable earnings*
Class A		(5,875,719	)		—
Class B		(60,426	)		—
Class C		(3,586,836	)		—
Class R		(39,506	)		—
Class Z		(5,173,783	)		—
Class R6		(113,903	)		—
		(14,850,173	)		(15,407,359	)
Tax return of capital distributions
Class A		(1,059,381	)		(869,553	)
Class B		(10,895	)		(11,198	)
Class C		(646,700	)		(539,781	)
Class R		(7,123	)		(2,839	)
Class Z		(932,823	)		(662,147	)
Class R6		(20,537	)		(6,645	)
		(2,677,459	)		(2,092,163	)
Dividends from net investment income
Class A					(6,403,663	)
Class B					(82,466	)
Class C					(3,975,121	)
Class R					(20,908	)
Class Z					(4,876,263	)
Class R6					(48,938	)
		*			(15,407,359	)

See Notes to Financial Statements.

70

	Year Ended October 31,
	2018			2017
Fund share transactions (Net of share conversions)
Net proceeds from shares sold	$	80,250,069		$	177,533,383
Net asset value of shares issued in reinvestment of dividends and distributions		15,428,166			15,392,007
Cost of shares reacquired		(117,650,414	)		(116,065,837	)
Net increase (decrease) in net assets from Fund share transactions		(21,972,179	)		76,859,553
Total increase (decrease)		(45,096,462	)		87,671,422
Net Assets:
Beginning of year		448,485,879			360,814,457
End of year(a)	$	403,389,417		$	448,485,879
(a) Includes undistributed/(distributions in excess of) net investment income of:	$	*		$	(312,127	)

* For the year ended October 31, 2018, the Fund has adopted amendments to Regulation S-X (refer to Note 10).

See Notes to Financial Statements.

PGIM Income Builder Fund 71

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: PGIM Income Builder Fund and PGIM QMA Defensive Equity Fund, each of which are diversified funds for the purposes of the 1940 Act. These financial statements relate only to the PGIM Income Builder Fund (the “Fund”). Effective June 11, 2018, the names of the Fund and the other funds which comprise the Trust were changed by replacing “Prudential” with “PGIM” and each fund’s Class Q shares were renamed Class R6 shares.

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

1. Accounting Policies

The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The 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 Trust’s 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”). Pursuant to the Board’s delegation, a Valuation Committee has been established as two persons, being one or more officers of the Trust, including: the Trust’s Treasurer (or the Treasurer’s direct reports); and the Trust’s Chief or Deputy Chief Compliance Officer (or Vice-President-level direct reports of the Chief or Deputy Chief Compliance Officer). Under the current valuation procedures, the Valuation Committee of the Board 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.

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur

72

when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820—Fair Value Measurements and Disclosures.

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

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

Investments in open-end, 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

PGIM Income Builder Fund 73

Notes to Financial Statements (continued)

valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

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 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.

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

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

74

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. 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.

Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on 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) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.

Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The 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

PGIM Income Builder Fund 75

Notes to Financial Statements (continued)

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 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 of an OTC option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts. With exchange-traded options contracts, there is minimal counterparty credit risk to the 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

76

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 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.

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 International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the

PGIM Income Builder Fund 77

Notes to Financial Statements (continued)

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 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, 2018, 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 invests 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.

78

Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the 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”.

Equity and Mortgage Real Estate Investment Trusts (collectively equity 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.

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.

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 class specific expenses and

PGIM Income Builder Fund 79

Notes to Financial Statements (continued)

waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

Taxes: It is the 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 and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst total distributable earnings (loss) and paid-in capital in excess of par, as appropriate.

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

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. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Fund’s custodian and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the

80

management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

PGIM Investments has entered into subadvisory agreements with each of Quantitative Management Associates LLC (“QMA”), Jennison Associates LLC, PGIM, Inc. (on behalf of its PGIM Fixed Income and PGIM Real Estate units), (each a “Subadviser” and together, the “Subadvisers”). 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. PGIM Investments pays for the services of the Subadvisers, 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 0.700% of the Fund’s average daily net assets up to $1 billion and 0.650% of such assets in excess of $1 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.700% for the year ended October 31, 2018.

PGIM Investments has contractually agreed, through February 28, 2019, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 0.95% of average daily net assets for Class A shares, 1.70% of average daily net assets for Class B shares, 1.70% of average daily net assets for Class C shares, 1.20% of average daily net assets for Class R shares, 0.70% of average daily net assets for Class Z shares, and 0.70% of average daily net assets for Class R6 shares. This contractual waiver includes acquired fund fees and expenses, and excludes Fund and any acquired fund interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales. 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. Effective November 1, 2018 this waiver agreement was extended through February 29, 2020.

Where applicable, PGIM Investments voluntarily agreed through October 31, 2018, to waive management fees or shared operating expenses on any share class to the same extent that it waives similar expenses on any other share class and, in addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Effective November 1, 2018 this voluntary agreement became part of the Fund’s contractual waiver agreement through February 29, 2020 and is subject to recoupment by the Manager within the same fiscal year during which such wavier/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.

PGIM Income Builder Fund 81

Notes to Financial Statements (continued)

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 R, Class Z and Class R6 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 Z and Class R6 shares of the Fund.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1%, 1% and 0.75% 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 29, 2020 to limit such fees to 0.25% and 0.50% of the average daily net assets of the Class A and Class R shares.

PIMS has advised the Fund that it received $431,838 in front-end sales charges resulting from sales of Class A shares during the year ended October 31, 2018. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended October 31, 2018, it received $581, $682 and $20,681 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.

PGIM, Inc., Jennison Associates LLC, 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, 2018, no such transactions were entered into by the Fund.

82

The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (formerly known as Prudential Core Ultra Short Bond Fund) (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (formerly known as 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, 2018, PGIM, Inc. was compensated $15,870 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, 2018, were $488,231,301 and $510,188,105, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2018, is presented as follows:

Value, Beginning of Year		Cost of Purchases		Proceeds from Sales		Change in Unrealized Gain (Loss)			Realized Gain (Loss)			Value, End of Year		Shares, End of Year		Income
	PGIM Absolute Return Bond Fund (Class Q)*
$	9,012,885	$	298,947	$	9,314,919	$	(186,495	)	$	189,582		$	—		—	$	155,023
	PGIM Core Ultra Short Bond Fund*
	9,514,021		279,285,319		281,669,762		—			—			7,129,578		7,129,578		161,100
	PGIM Floating Rate Income Fund*
	—		15,545,015		11,313,300		(20,783	)		(44,894	)		4,166,038		422,948		163,967
	PGIM Institutional Money Market Fund*
	16,868,625		288,966,454		296,610,714		(42	)		(2,812	)		9,221,511		9,221,511		36,680	**
	PGIM Short Duration High Yield Income Fund*
	13,459,680		9,404,492		18,363,000		(121,016	)		(141,167	)		4,238,989		482,251		526,677
	PGIM Total Return Bond Fund*
	8,969,904		45,884,956		34,759,900		(513,322	)		(534,161	)		19,047,477		1,377,258		646,909
$	57,825,115	$	639,385,183	$	652,031,595	$	(841,658	)	$	(533,452	)	$	43,803,593			$	1,690,356

* The Fund did not have any capital gain distributions during the reporting period.

** This amount is included in “Income from securities lending, net” on the Statement of Operations.

PGIM Income Builder Fund 83

Notes to Financial Statements (continued)

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 total distributable earnings (loss) 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 total distributable earnings (loss) and paid-in capital in excess of par. For the year ended October 31, 2018, the adjustments were to increase total distributable loss and increase paid-in capital in excess of par by $502,104 due to investments in partnerships. Net investment income, net realized gain (loss) on investments and foreign currency transactions and net assets were not affected by this change.

For the year ended October 31, 2018, the tax character of dividends paid by the Fund were $14,850,173 of ordinary income and $2,677,459 of tax return of capital. For the year ended October 31, 2017, the tax character of dividends paid by the Fund was $15,407,359 of ordinary income and $2,092,163 of tax return of capital.

As of October 31, 2018, 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 depreciation as of October 31, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Depreciation
$415,644,428	$21,561,490	$(25,589,146)	$(4,027,656)

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, 2018 of approximately $19,799,000 which can be carried forward for an unlimited period. The Fund utilized approximately $466,000 of its capital loss carryforward during the fiscal year ended October 31, 2018 to offset capital gains. No capital gains 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

84

Revenue Service and state departments of revenue.

6. Capital and Ownership

The Fund offers Class A, Class B, Class C, Class R, Class Z and Class R6 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 are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. 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 will 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. Class R, Class Z and Class R6 shares are not subject to any sales or redemption charge and are available exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the 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 $0.001 par value per share, divided into six classes, designated Class A, Class B, Class C, Class R, Class Z and Class R6.

At reporting period end, eight shareholders of record held 68% of the Fund’s outstanding shares.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended October 31, 2018:
Shares sold		2,529,383		$	24,326,647
Shares issued in reinvestment of dividends and distributions		684,537			6,526,719
Shares reacquired		(3,684,232	)		(35,181,399	)
Net increase (decrease) in shares outstanding before conversion		(470,312	)		(4,328,033	)
Shares issued upon conversion from other share class(es)		163,484			1,564,532
Shares reacquired upon conversion into other share class(es)		(598,883	)		(5,702,892	)
Net increase (decrease) in shares outstanding		(905,711	)	$	(8,466,393	)
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

PGIM Income Builder Fund 85

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2018:
Shares sold		9,986		$	94,504
Shares issued in reinvestment of dividends and distributions		7,403			69,278
Shares reacquired		(16,011	)		(148,536	)
Net increase (decrease) in shares outstanding before conversion		1,378			15,246
Shares reacquired upon conversion into other share class(es)		(55,851	)		(525,447	)
Net increase (decrease) in shares outstanding		(54,473	)	$	(510,201	)
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	)
Class C
Year ended October 31, 2018:
Shares sold		1,893,897		$	17,817,356
Shares issued in reinvestment of dividends and distributions		413,102			3,863,201
Shares reacquired		(3,245,407	)		(30,365,820	)
Net increase (decrease) in shares outstanding before conversion		(938,408	)		(8,685,263	)
Shares reacquired upon conversion into other share class(es)		(482,459	)		(4,491,513	)
Net increase (decrease) in shares outstanding		(1,420,867	)	$	(13,176,776	)
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
Class R
Year ended October 31, 2018:
Shares sold		140,814		$	1,346,701
Shares issued in reinvestment of dividends and distributions		4,864			46,176
Shares reacquired		(14,970	)		(142,231	)
Net increase (decrease) in shares outstanding		130,708		$	1,250,646
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

86

Class Z	Shares			Amount
Year ended October 31, 2018:
Shares sold		3,661,114		$	35,352,541
Shares issued in reinvestment of dividends and distributions		498,851			4,788,384
Shares reacquired		(5,306,867	)		(51,027,556	)
Net increase (decrease) in shares outstanding before conversion		(1,146,902	)		(10,886,631	)
Shares issued upon conversion from other share class(es)		1,025,333			9,817,130
Shares reacquired upon conversion into other share class(es)		(93,008	)		(895,480	)
Net increase (decrease) in shares outstanding		(214,577	)	$	(1,964,981	)
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
Class R6
Year ended October 31, 2018:
Shares sold		136,808		$	1,312,320
Shares issued in reinvestment of dividends and distributions		14,019			134,408
Shares reacquired		(81,499	)		(784,872	)
Net increase (decrease) in shares outstanding before conversion		69,328			661,856
Shares issued upon conversion from other share class(es)		24,208			233,670
Net increase (decrease) in shares outstanding		93,536		$	895,526
Year 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

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 4, 2018 through October 3, 2019. The Funds pay an annualized commitment fee of 0.15% 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 4, 2018, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under both 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.

PGIM Income Builder Fund 87

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, 2018.

8. Dividends and Distributions to Shareholders

Subsequent to the year ended October 31, 2018, the Fund declared ordinary income dividends and capital gains distributions on November 28, 2018 to shareholders of record on November 29, 2018. The ex-date was November 30, 2018. The per share amounts declared were as follows:

	Ordinary Income
Class A	$	0.03879
Class B	$	0.03295
Class C	$	0.03295
Class R	$	0.03679
Class Z	$	0.04079
Class R6	$	0.04079

9. Risks of Investing in the Fund

The Fund’s risks include, but are not limited to, some or all of the risks discussed below:

Bond Obligations Risk: The Fund’s holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed-income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to reinvest at the same level and therefore would earn less income.

Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and

88

therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, many OTC derivative instruments will not have liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet its obligations to the Fund.

Foreign Securities Risk: The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.

Interest Rate Risk: The value of an investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk. The Fund may face a heightened level of interest rate risk as a result of the US Federal Reserve Board’s policies. The Fund’s investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.

Liquidity Risk: The Fund may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Fund are difficult to purchase or sell. Liquidity risk includes the risk that the Fund may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be more difficult to value. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.

Risks of Investing in Equity and Mortgage Real Estate Investment Trusts (collectively equity REITs): Real estate securities are subject to similar 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 payments that occur earlier or later than expected, and such loans may also include

PGIM Income Builder Fund 89

Notes to Financial Statements (continued)

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 equity 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 equity REITs, while mortgage equity REITs may be affected by the quality of any credit extended. Equity 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. Since equity REITs are relatively smaller in size when compared to the broader market, and smaller companies tend to be more volatile than larger companies, they may be more volatile and/or more illiquid than other types of equity securities. Equity REITs are subject to interest rate risks. Equity REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each equity REIT in which it invests, in addition to the expenses of the Fund.

10. Recent Accounting Pronouncements and Reporting Updates

In August 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments to Regulation S-X to update and simplify the disclosure requirements for registered investment companies by eliminating requirements that are redundant or duplicative of US GAAP requirements or other SEC disclosure requirements. The new amendments require the presentation of the total, rather than the components, of distributable earnings on the Statement of Assets and Liabilities and the total, rather than the components, of dividends from net investment income and distributions from net realized gains on the Statements of Changes in Net Assets. The amendments also removed the requirement for the parenthetical disclosure of undistributed net investment income on the Statements of Changes in Net Assets and certain tax adjustments that were reflected in the Notes to Financial Statements. All of these have been reflected in the Fund’s financial statements.

In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Fund’s policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019,

90

and interim periods within those fiscal years. Management has evaluated the implications of certain provisions of the ASU and has determined to early adopt aspects related to the removal and modification of certain fair value measurement disclosures under the ASU effective immediately. At this time, management is evaluating the implications of certain other provisions of the ASU related to new disclosure requirements and any impact on the financial statement disclosures has not yet been determined.

PGIM Income Builder Fund 91

Financial Highlights

Class A Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)			Year Ended July 31, 2014
	2018			2017			2016			2015
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.62			$9.36			$9.39			$11.90			$11.78			$11.55
Income (loss) from investment operations:
Net investment income (loss)		0.35			0.35			0.37			0.39			0.05			0.05
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.46	)		0.32			0.06			(0.70	)		0.14			0.89
Total from investment operations		(0.11	)		0.67			0.43			(0.31	)		0.19			0.94
Less Dividends and Distributions
Dividends from net investment income		(0.33	)		(0.36	)		(0.40	)		(0.44	)		(0.07	)		(0.12	)
Tax return of capital distributions		(0.06	)		(0.05	)		(0.06	)		-			-			-
Distributions from net realized gains		-			-			-			(1.76	)		-			(0.59	)
Total dividends and distributions		(0.39	)		(0.41	)		(0.46	)		(2.20	)		(0.07	)		(0.71	)
Net asset value, end of period		$9.12			$9.62			$9.36			$9.39			$11.90			$11.78
Total Return(c):		(1.22)%			7.34%			4.76%			(2.59)%			1.63%			8.37%
Ratios/Supplemental Data:
Net assets, end of period (000)		$153,762			$171,047			$165,090			$141,432			$84,863			$85,292
Average net assets (000)		$169,651			$167,079			$143,159			$109,965			$84,889			$86,591
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		0.85%			0.85%			0.83%			0.78%			1.03%	(e)		1.51%
Expenses before waivers and/or expense reimbursement		1.25%	(f)		1.27%			1.30%			1.37%			1.92%	(e)		1.56%
Net investment income (loss)		3.63%			3.69%			4.05%			3.96%			1.58%	(e)		0.43%
Portfolio turnover rate(g)		114%			102%			90%			93%			140%			478%

(a) 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.

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

(c) 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.

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

(e) Annualized.

(f) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

See Notes to Financial Statements.

92

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM Income Builder Fund 93

Financial Highlights (continued)

Class B Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)			Year Ended July 31, 2014
	2018			2017			2016			2015
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.45			$9.19			$9.23			$11.74			$11.59			$11.38
Income (loss) from investment operations:
Net investment income (loss)		0.27			0.28			0.30			0.32			0.02			(0.04	)
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.46	)		0.33			0.05			(0.70	)		0.15			0.88
Total from investment operations		(0.19	)		0.61			0.35			(0.38	)		0.17			0.84
Less Dividends and Distributions
Dividends from net investment income		(0.27	)		(0.31	)		(0.34	)		(0.37	)		(0.02	)		(0.04	)
Tax return of capital distributions		(0.05	)		(0.04	)		(0.05	)		-			-			-
Distributions from net realized gains		-			-			-			(1.76	)		-			(0.59	)
Total dividends and distributions		(0.32	)		(0.35	)		(0.39	)		(2.13	)		(0.02	)		(0.63	)
Net asset value, end of period		$8.94			$9.45			$9.19			$9.23			$11.74			$11.59
Total Return(c):		(2.08)%			6.69%			3.97%			(3.35)%			1.47%			7.52%
Ratios/Supplemental Data:
Net assets, end of period (000)		$1,720			$2,332			$2,575			$3,083			$4,810			$5,180
Average net assets (000)		$2,080			$2,532			$2,762			$3,824			$5,005			$5,826
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.60%			1.60%			1.58%			1.51%			1.78%	(e)		2.26%
Expenses before waivers and/or expense reimbursement		2.96%	(f)		1.97%			2.00%			2.09%			2.59%	(e)		2.26%
Net investment income (loss)		2.88%			2.95%			3.34%			3.24%			0.80%	(e)		(0.31)%
Portfolio turnover rate(g)		114%			102%			90%			93%			140%			478%

(a) 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.

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

(c) 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.

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

(e) Annualized.

(f) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

94

Class C Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)			Year Ended July 31, 2014
	2018			2017			2016			2015
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.44			$9.18			$9.23			$11.74			$11.59			$11.38
Income (loss) from investment operations:
Net investment income (loss)		0.27			0.27			0.30			0.31			0.02			(0.04	)
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.45	)		0.34			0.04			(0.69	)		0.15			0.88
Total from investment operations		(0.18	)		0.61			0.34			(0.38	)		0.17			0.84
Less Dividends and Distributions
Dividends from net investment income		(0.27	)		(0.31	)		(0.34	)		(0.37	)		(0.02	)		(0.04	)
Tax return of capital distributions		(0.05	)		(0.04	)		(0.05	)		-			-			-
Distributions from net realized gains		-			-			-			(1.76	)		-			(0.59	)
Total dividends and distributions		(0.32	)		(0.35	)		(0.39	)		(2.13	)		(0.02	)		(0.63	)
Net asset value, end of period		$8.94			$9.44			$9.18			$9.23			$11.74			$11.59
Total Return(c):		(1.98)%			6.69%			3.86%			(3.35)%			1.47%			7.53%
Ratios/Supplemental Data:
Net assets, end of period (000)		$109,767			$129,397			$108,543			$75,622			$17,474			$17,887
Average net assets (000)		$123,584			$122,174			$88,099			$44,389			$17,513			$17,793
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.60%			1.60%			1.58%			1.55%			1.78%	(e)		2.26%
Expenses before waivers and/or expense reimbursement		1.94%	(f)		1.98%			2.00%			2.05%			2.61%	(e)		2.26%
Net investment income (loss)		2.88%			2.93%			3.27%			3.19%			0.82%	(e)		(0.32)%
Portfolio turnover rate(g)		114%			102%			90%			93%			140%			478%

(a) 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.

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

(c) 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.

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

(e) Annualized.

(f) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM Income Builder Fund 95

Financial Highlights (continued)

Class R Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)			Year Ended July 31, 2014
	2018			2017			2016			2015
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.61			$9.34			$9.38			$11.89			$11.75			$11.52
Income (loss) from investment operations:
Net investment income (loss)		0.31			0.33			0.35			0.36			0.04			0.02
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.45	)		0.33			0.05			(0.69	)		0.15			0.89
Total from investment operations		(0.14	)		0.66			0.40			(0.33	)		0.19			0.91
Less Dividends and Distributions
Dividends from net investment income		(0.31	)		(0.34	)		(0.38	)		(0.42	)		(0.05	)		(0.09	)
Tax return of capital distributions		(0.06	)		(0.05	)		(0.06	)		-			-			-
Distributions from net realized gains		-			-			-			(1.76	)		-			(0.59	)
Total dividends and distributions		(0.37	)		(0.39	)		(0.44	)		(2.18	)		(0.05	)		(0.68	)
Net asset value, end of period		$9.10			$9.61			$9.34			$9.38			$11.89			$11.75
Total Return(c):		(1.58)%			7.20%			4.40%			(2.83)%			1.60%			8.13%
Ratios/Supplemental Data:
Net assets, end of period (000)		$1,768			$610			$561			$359			$393			$288
Average net assets (000)		$1,196			$579			$404			$427			$347			$275
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.10%			1.10%			1.08%			1.03%			1.25%	(e)		1.76%
Expenses before waivers and/or expense reimbursement		3.02%	(f)		1.73%			1.75%			1.82%			2.45%	(e)		2.01%
Net investment income (loss)		3.25%			3.41%			3.76%			3.69%			1.45%	(e)		0.19%
Portfolio turnover rate(g)		114%			102%			90%			93%			140%			478%

(a) 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.

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

96

Class Z Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)			Year Ended July 31, 2014
	2018			2017			2016			2015
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.69			$9.42			$9.45			$11.96			$11.85			$11.62
Income (loss) from investment operations:
Net investment income (loss)		0.37			0.38			0.40			0.41			0.06			0.08
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.46	)		0.33			0.05			(0.69	)		0.15			0.89
Total from investment operations		(0.09	)		0.71			0.45			(0.28	)		0.21			0.97
Less Dividends and Distributions
Dividends from net investment income		(0.36	)		(0.39	)		(0.42	)		(0.47	)		(0.10	)		(0.15	)
Tax return of capital distributions		(0.06	)		(0.05	)		(0.06	)		-			-			-
Distributions from net realized gains		-			-			-			(1.76	)		-			(0.59	)
Total dividends and distributions		(0.42	)		(0.44	)		(0.48	)		(2.23	)		(0.10	)		(0.74	)
Net asset value, end of period		$9.18			$9.69			$9.42			$9.45			$11.96			$11.85
Total Return(c):		(1.08)%			7.67%			4.98%			(2.33)%			1.74%			8.59%
Ratios/Supplemental Data:
Net assets, end of period (000)		$133,029			$142,478			$84,046			$74,114			$5,965			$5,287
Average net assets (000)		$141,463			$119,795			$64,595			$45,082			$5,426			$4,306
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		0.60%			0.60%			0.58%			0.56%			0.77%	(e)		1.26%
Expenses before waivers and/or expense reimbursement		0.96%	(f)		0.98%			1.00%			1.03%			1.64%	(e)		1.26%
Net investment income (loss)		3.87%			3.90%			4.35%			4.15%			1.87%	(e)		0.69%
Portfolio turnover rate(g)		114%			102%			90%			93%			140%			478%

(a) 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.

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM Income Builder Fund 97

Financial Highlights (continued)

Class R6 Shares
	Year Ended October 31, 2018			December 30, 2016(a) through October 31, 2017
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$9.69			$9.44
Income (loss) from investment operations:
Net investment income (loss)		0.37			0.30
Net realized and unrealized gain (loss) on investment and foreign currency transactions		(0.46	)		0.31
Total from investment operations		(0.09	)		0.61
Less Dividends and Distributions
Dividends from net investment income		(0.36	)		(0.31	)
Tax return of capital distributions		(0.06	)		(0.05	)
Total dividends and distributions		(0.42	)		(0.36	)
Net asset value, end of period		$9.18			$9.69
Total Return(c):		(1.07)%			6.58%
Ratios/Supplemental Data:
Net assets, end of period (000)		$3,343			$2,622
Average net assets (000)		$3,088			$1,384
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		0.60%			0.60%	(e)
Expenses before waivers and/or expense reimbursement		1.32%	(f)		0.90%	(e)
Net investment income (loss)		3.85%			3.74%	(e)
Portfolio turnover rate(g)		114%			102%

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

98

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 16:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of PGIM Income Builder Fund (formerly Prudential Income Builder Fund) (the “Fund”), a series of Prudential Investment Portfolios 16, including the schedule of investments, as of October 31, 2018, 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 related notes (collectively, the financial statements) and the financial highlights for the years or periods indicated therein. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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 are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of October 31, 2018, by correspondence with the custodians, transfer agents and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more PGIM and/or Prudential Retail investment companies since 2003.

New York, New York

December 18, 2018

PGIM Income Builder Fund 99

Tax Information (unaudited)

For the year ended October 31, 2018, 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
PGIM Income Builder Fund		36.06	%		27.65	%

In January 2019, 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 2018.

100

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS  (unaudited)

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

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 93	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (66) Board Member Portfolios Overseen: 93	Retired; Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive  Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company;  President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).	Since July 2008
Linda W. Bynoe (66) Board Member Portfolios Overseen: 93	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 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).	Since March 2005

PGIM Income Builder Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (58) Board Member Portfolios Overseen: 92	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 (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (62) Board Member & Independent Chair Portfolios Overseen: 93	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.	Since September 2013

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Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (56) Board Member Portfolios Overseen: 92	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company); Independent Director, Kabbage, Inc. (since July 2018) (financial services).	Since September 2017
Michael S. Hyland, CFA (73) Board Member Portfolios Overseen: 93	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.	Since July 2008
Richard A. Redeker (75) Board Member Portfolios Overseen: 93	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

PGIM Income Builder Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 92	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018

# Mr. Reid joined the Board effective as of March 1, 2018.

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (56) Board Member & President Portfolios Overseen: 93	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012

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Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Scott E. Benjamin (45) Board Member & Vice President Portfolios Overseen:93	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); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010
Grace C. Torres* (59) Board Member Portfolios Overseen: 92	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* 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.

PGIM 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
Raymond A. O’Hara (63) 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 June 2012
Chad A. Earnst (43) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global Short Duration High Yield Income Fund, Inc., PGIM Short Duration High Yield Fund, Inc. and PGIM 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 September 2014
Dino Capasso (44) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Andrew R. French (56) 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 October 2006

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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
Jonathan D. Shain (60) 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 May 2005
Claudia DiGiacomo (44) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
Brian D. Nee (52) Treasurer and Principal Financial and Accounting Officer	Vice President and Head of Finance of PGIM Investments LLC (since August 2015) and PGIM Global Partners (since February 2017); formerly, Vice President, Treasurer’s Department of Prudential (September 2007-August 2015).	Since July 2018
Peter Parrella (60) 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 June 2007
Lana Lomuti (51) 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 April 2014
Linda McMullin (57) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (50) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 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.

PGIM Income Builder Fund

∎ “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 PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM Short Duration High Yield Fund, Inc., PGIM 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 (unaudited)

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of PGIM 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”) on behalf of 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, met on June 7, 2018 and on June 19-21, 2018 and approved the renewal of the agreements through July 31, 2019, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments, QMA, 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 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  PGIM Income Builder Fund is a series of Prudential Investment Portfolios 16.

PGIM Income Builder 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 7, 2018 and on June 19-21, 2018.

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 (through its PGIM Fixed Income and PGIM Real Estate units), 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, QMA, Jennison, PGIM Fixed Income and PGIM Real Estate. 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, PGIM Fixed Income and PGIM Real Estate, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreements.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and each of QMA, Jennison, PGIM Fixed Income and PGIM Real Estate and also considered the

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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 pertaining to PGIM Investments’ and each of QMA’s, Jennison’s, PGIM Fixed Income’s and PGIM Real Estate’s organizational structure, senior management, investment operations, and other relevant information pertaining to each of PGIM Investments, QMA, Jennison, PGIM Fixed Income and PGIM Real Estate. 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, PGIM Fixed Income and PGIM Real Estate 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, PGIM Fixed Income and PGIM Real Estate 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, PGIM Fixed Income and PGIM Real Estate 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, 2017 exceeded the management fees paid by the Fund, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of

PGIM Income Builder Fund

Approval of Advisory Agreements (continued)

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

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

Other Benefits to PGIM Investments, QMA, Jennison, PGIM Fixed Income and PGIM Real Estate

The Board considered potential ancillary benefits that might be received by PGIM Investments, QMA, Jennison, PGIM Fixed Income, PGIM Real Estate 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, PGIM Fixed Income and PGIM Real Estate included their ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to their reputations. The Board concluded that the benefits derived by PGIM Investments, QMA, 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, 2017.

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, 2017. 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

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funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also may have provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. 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.

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

• The Board noted that the Fund outperformed its fixed-income benchmark index (the Bloomberg Barclays US Aggregate Bond Index) over all periods, while it underperformed its equity benchmark index (the S&P 500 Index) over all periods.

• The Board also considered PGIM Investments’ assertion that given the Fund’s goal of investing in securities that are expected to both generate income and appreciate along with its allocation to fixed-income securities, it would expect that the Fund would underperform against its equity benchmark in light of the strong performance of the equity markets during 2017.

• The Board further considered that, when it evaluated performance in the prior year, as of December 31, 2016, the Fund ranked in the second quartile of its Peer Universe over the one, three- and ten-year periods and ranked in the third quartile over the five-year period and outperformed its fixed-income benchmark over the one-, three-, five- and ten-year periods.

PGIM Income Builder Fund

Approval of Advisory Agreements (continued)

• The Board also noted PGIM Investments’ assertion that, consistent with its prospectus disclosure, the Fund continues to meet its objective of providing an attractive distribution yield. In this respect the Board noted that, relative to peers, the Fund’s 12-month yield ranks in the top 15%, as of March 31, 2018.

• The Board and PGIM Investments agreed to retain the existing contractual expense cap, which (exclusive of certain fees and expenses) caps the Fund’s annual operating expenses at 0.95% for Class A shares, 1.70% for Class B shares, 1.70% for Class C shares, 1.20% for Class R shares, 0.70% for Class Z shares, and 0.70% for Class R6 shares through February 28, 2019.

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

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

*    *    *

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

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∎ 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 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 • Brian K. Reid • Grace C. Torres

OFFICERS

Stuart S. Parker, President • Scott E. Benjamin, Vice President • Brian D. Nee, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Chad A. Earnst, Chief Compliance Officer • Andrew R. French, Secretary • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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
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, PGIM 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 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

PGIM INCOME BUILDER FUND

SHARE CLASS	A	B	C	R	Z	R6*
NASDAQ	PCGAX	PBCFX	PCCFX	PCLRX	PDCZX	PCGQX
CUSIP	74442X108	74442X207	74442X306	74442X405	74442X504	74442X769

*Formerly known as Class Q shares.

MFSP504E

PGIM QMA DEFENSIVE EQUITY FUND

(Formerly known as Prudential QMA Defensive Equity Fund)

ANNUAL REPORT

OCTOBER 31, 2018

COMING SOON: PAPERLESS SHAREHOLDER REPORTS

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (www.pgiminvestments.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-225-1852 or by sending an e-mail request to PGIM Investments at shareholderreports@pgim.com.

Beginning on January 1, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary or follow instructions included with this notice to elect to continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1-800-225-1852 or send an email request to shareholderreports@pgim.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with the Fund.

To enroll in e-delivery, go to pgiminvestments.com/edelivery

Objective: Long-term capital appreciation

Highlights (unaudited)

• An underweight in industrials, which was among the worst-performing sectors of the reporting period, had a positive effect on the Fund’s returns.

• An underweight in the real estate sector during the first half of the period, due to high valuations and volatility, benefited the Fund’s performance as the sector trailed the S&P 500 Index in the rising interest rate environment.

• A broad underweight in cyclical sectors worked against the Fund during the reporting period.

• Overweights in defensive sectors, such as utilities, consumer staples, and telecommunication services, detracted in varying degrees from the Fund’s returns because of their interest rate sensitivity and the cyclical nature of the equity market.

• On November 16, 2018, shareholders approved the PGIM QMA Defensive Equity Fund’s reorganization into the PGIM QMA Large-Cap Core Equity Fund. The reorganization transaction is expected to be completed as of the close of business on Friday, December 14, 2018, and will result in shareholders of the PGIM QMA Defensive Equity Fund becoming shareholders of the PGIM QMA Large-Cap Core Equity 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 and member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a registered investment adviser and a wholly owned subsidiary of PGIM, Inc., a Prudential Financial company. ^© 2018 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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PGIM FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved the implementation of an automatic conversion feature for Class C shares, effective as of April 1, 2019. To reflect these changes, effective April 1, 2019, the section of the Fund’s Prospectus entitled “How to Buy, Sell and Exchange Fund Shares—How to Exchange Your Shares—Frequent Purchases and Redemptions of Fund Shares” is restated to read as follows:

This supplement should be read in conjunction with your Summary Prospectus, Statutory Prospectus and Statement of Additional Information, be retained for future reference and is in addition to any existing Fund supplements.

1. In each Fund’s Statutory Prospectus, the following is added at the end of the section entitled “Fund Distributions And Tax Issues—If You Sell or Exchange Your Shares”:

Automatic Conversion of Class C Shares

The conversion of Class C shares into Class A shares—which happens automatically approximately 10 years after purchase—is not a taxable event for federal income tax purposes. For more information about the automatic conversion of Class C shares, see Class C Shares Automatically Convert to Class A Shares in How to Buy, Sell and Exchange Fund Shares.

2. In each Fund’s Statutory Prospectus, the following sentence is added at the end of the section entitled “How to Buy, Sell and Exchange Shares—Closure of Certain Share Classes to New Group Retirement Plans”:

Shareholders owning Class C shares may continue to hold their Class C shares until the shares automatically convert to Class A shares under the conversion schedule, or until the shareholder redeems their Class C shares.

3. In each Fund’s Statutory Prospectus, the following disclosure is added immediately following the section entitled “How to Buy, Sell and Exchange Shares—How to Buy Shares—Class B Shares Automatically Convert to Class A Shares”:

Class C Shares Automatically Convert to Class A Shares

Starting on or about April 1, 2019 (the “Effective Date”), Class C shares will be eligible for automatic conversion into Class A shares on a monthly basis approximately ten years after the original date of purchase (the “Conversion Date”). Conversion will take place based on the relative NAV of the two classes, without the imposition of any sales load, fee or other charge. All such automatic conversions of Class C shares will constitute tax-free exchanges for federal income tax purposes.

For shareholders investing in Class C shares through retirement plans or omnibus accounts, and in certain other instances, the Fund and its agents may not have

PGIM QMA Defensive Equity Fund 3

transparency into how long a shareholder has held Class C shares for purposes of determining whether such Class C shares are eligible for automatic conversion into Class A shares, and the relevant financial intermediary may not have the ability to track purchases in order to credit individual shareholders’ holding periods. In these circumstances, the Fund will not be able to automatically convert Class C shares into Class A shares as described above. In order to determine eligibility for conversion in these circumstances, it is the responsibility of the financial intermediary to notify the Fund that the shareholder is eligible for the conversion of Class C shares to Class A shares, and the financial intermediary may be required to maintain and provide the Fund with records that substantiate the holding period of Class C shares. It is the financial intermediary’s (and not the Fund’s) responsibility to keep records of transactions made in accounts it holds and to ensure that the shareholder is credited with the proper holding period based on such records or those provided to the financial intermediary by the shareholder. Please consult with your financial intermediary for the applicability of this conversion feature to your shares.

A financial intermediary may sponsor and/or control accounts, programs or platforms that impose a different conversion schedule or different eligibility requirements for the exchange of Class C shares for Class A shares (see Appendix A: Waivers and Discounts Available From Certain Financial Intermediaries of the Prospectus). Please consult with your financial intermediary if you have any questions regarding your shares’ conversion from Class C shares to Class A shares.

4. In Part II of each Fund’s Statement of Additional Information, the following disclosure is added immediately following the section entitled “Purchase, Redemption and Pricing of Fund Shares—Share Classes—Automatic Conversion of Class B Shares”:

AUTOMATIC CONVERSION OF CLASS C SHARES. Starting on or about April 1, 2019 (the “Effective Date”), Class C shares will be eligible for automatic conversion into Class A shares on a monthly basis approximately ten years after the original date of purchase (the “Conversion Date”). Conversion will take place based on the relative NAV of the two classes, without the imposition of any sales load, fee or other charge. Class C shares of a Fund acquired through automatic reinvestment of dividends or distributions will convert to Class A shares of the Fund on the Conversion Date pro rata with the converting Class C shares of the Fund that were not acquired through reinvestment of dividends or distributions. All such automatic conversions of Class C shares will constitute tax-free exchanges for federal income tax purposes.

For shareholders investing in Class C shares through retirement plans or omnibus accounts, and in certain other instances, the Fund and its agents may not have transparency into how long a shareholder has held Class C shares for purposes of determining whether such Class C shares are eligible for automatic conversion into Class A shares, and the relevant financial intermediary may not have the ability to track purchases in order to credit individual shareholders’ holding periods. In these circumstances, the

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Fund will not be able to automatically convert Class C shares into Class A shares as described above. In order to determine eligibility for conversion in these circumstances, it is the responsibility of the financial intermediary to notify the Fund that the shareholder is eligible for the conversion of Class C shares to Class A shares, and the financial intermediary may be required to maintain and provide the Fund with records that substantiate the holding period of Class C shares. It is the financial intermediary’s (and not the Fund’s) responsibility to keep records of transactions made in accounts it holds and to ensure that the shareholder is credited with the proper holding period based on such records or those provided to the financial intermediary by the shareholder. Please consult with your financial intermediary for the applicability of this conversion feature to your shares.

Class C shares were generally closed to investments by new group retirement plans effective June 1, 2018. Group retirement plans (and their successor, related and affiliated plans) that have Class C shares of the Fund available to participants on or before the Effective Date may continue to open accounts for new participants in such share class and purchase additional shares in existing participant accounts.

The Fund has no responsibility for monitoring or implementing a financial intermediary’s process for determining whether a shareholder meets the required holding period for conversion. A financial intermediary may sponsor and/or control accounts, programs or platforms that impose a different conversion schedule or different eligibility requirements for the exchange of Class C shares for Class A shares, as set forth on Appendix A: Waivers and Discounts Available From Certain Financial Intermediaries of the Prospectus. In these cases, Class C shareholders may have their shares exchanged for Class A shares under the policies of the financial intermediary. Financial intermediaries will be responsible for making such exchanges in those circumstances. Please consult with your financial intermediary if you have any questions regarding your shares’ conversion from Class C shares to Class A shares.

LR1094

- Not part of the Annual Report -

PGIM QMA Defensive Equity Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	9
Strategy and Performance Overview	12
Fees and Expenses	15
Holdings and Financial Statements	17

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Letter from the President

Dear Shareholder:

We hope you find the annual report for PGIM QMA Defensive Equity Fund informative and useful. The report covers performance for the 12-month period that ended October 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*

During the reporting period, the global economy continued to grow, and central banks gradually tightened monetary policy. In the US, the economy expanded and employment increased. In September, the Federal Reserve hiked interest rates for the eighth time since 2015, based on confidence in the economy.

Equity returns on the whole were strong, due to optimistic earnings expectations and investor sentiment. Global equities, including emerging markets, generally posted positive returns. However, they trailed the performance of US equities, which rose on higher corporate profits, new regulatory policies, and tax reform benefits. Volatility spiked briefly early in the period on inflation concerns, rising interest rates, and a potential global trade war, and again late in the period on worries that profit growth might slow in 2019.

The overall bond market declined modestly during the period, as measured by the Bloomberg Barclays US Aggregate Bond Index. The best performance came from higher-yielding, economically sensitive sectors, such as high yield bonds and bank loans, which posted small gains. US investment-grade corporate bonds and US Treasury bonds both finished the period with negative returns. A major trend during the period was the flattening of the US Treasury yield curve, which increased the yield on fixed income investments with shorter maturities and made them more attractive to investors.

Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This 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

PGIM QMA Defensive Equity Fund

December 14, 2018

*The Prudential Day One Funds did not change their names.

PGIM 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 10/31/18 (with sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	–1.37		6.78		8.77		—
Class B	–1.64		6.99		8.56		—
Class C	2.53		7.17		8.57		—
Class R	3.88		7.90		9.22		—
Class Z	4.36		8.20		9.62		—
Class R6*	4.58		N/A		N/A		8.60 (12/28/16)
S&P 500 Index
	7.35		11.33		13.23		—
Russell 1000 Defensive Index
	9.07		11.23		12.77		—
Lipper Large-Cap Core Funds Average
	5.58		9.64		12.06		—
	Average Annual Total Returns as of 10/31/18 (without sales charges)
	One Year (%)	Five Years (%)		Ten Years (%)		Since Inception (%)
Class A	4.37		7.99		9.39		—
Class B	3.35		7.14		8.56		—
Class C	3.53		7.17		8.57		—
Class R	3.88		7.90		9.22		—
Class Z	4.36		8.20		9.62		—
Class R6*	4.58		N/A		N/A		8.60 (12/28/16)
S&P 500 Index
	7.35		11.33		13.23		—
Russell 1000 Defensive Index
	9.07		11.23		12.77		—
Lipper Large-Cap Core Funds Average
	5.58		9.64		12.06		—

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Growth of a $10,000 Investment (unaudited)

The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the 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, 2008) and the account values at the end of the current fiscal year (October 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing 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.

*Formerly known as Class Q shares.

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 class’ inception date.

PGIM 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 R	Class Z	Class R6**
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%	0.75% (0.50% currently)	None	None

*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.

**Formerly known as Class Q shares.

Benchmark Definitions

S&P 500 Index—The S&P 500 Index is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed. The average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 13.18%.

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 average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 13.45%.

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 the Lipper Average invest at least 75% of their equity assets in companies with market capitalizations (on a

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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 average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 11.73%.

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 of a mutual fund, but not sales charges or taxes.

Presentation of Fund Holdings

Five Largest Holdings expressed as a percentage of net assets as of 10/31/18 (%)
Amazon.com, Inc., Internet & Direct Marketing Retail	2.8
Exxon Mobil Corp., Oil, Gas & Consumable Fuels	2.2
Berkshire Hathaway, Inc. (Class B Stock), Diversified Financial Services	1.9
Procter & Gamble Co. (The), Household Products	1.9
JPMorgan Chase & Co., Banks	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 10/31/18 (%)
Electric Utilities	8.4
Oil, Gas & Consumable Fuels	7.7
Banks	6.6
Equity Real Estate Investment Trusts (REITs)	5.2
Multi-Utilities	4.3

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

PGIM QMA Defensive Equity Fund 11

Strategy and Performance Overview (unaudited)

How did the Fund perform?

The PGIM QMA Defensive Equity Fund’s Class Z shares gained 4.36% for the 12-month reporting period that ended October 31, 2018, underperforming the 7.35% gain of the S&P 500 Index, the 9.07% gain of the Russell 1000 Defensive Index, and the 5.58% gain of the Lipper Large-Cap Core Funds Average.

What were the market conditions?

• In a major event capping 2017, the US Congress passed a tax reform bill that was signed into law in December. The law cut the corporate tax rate to 21% from 35% and reduced individual tax rates, including lowering the top rate to 37% from 39.6%. The US equity markets advanced in anticipation of the law and surged into the new year.

• In late January through February of 2018, US equities experienced a steep decline, triggered by an inflation scare and US protectionist trade measures. The market pullback was accompanied by a sharp spike in volatility that drove the unwinding of investors’ short volatility positions. These positions seek to profit from the potential of continued low levels of volatility.

• US equities remained range bound during the spring, despite 25% year-over-year earnings growth in the first two quarters of 2018, fueled by the fiscal stimulus of corporate tax cuts. The economic backdrop was also favorable, amid continued strong growth. Equity performance may have been restrained by geopolitical concerns. Anxiety regarding a global trade war emerged in March, eased in May, but intensified again in June on the heels of unprecedented acrimony at the G7 (Group of Seven) summit and the Trump administration’s threat to impose tariffs on Chinese goods. The G7 consists of Canada, France, Germany, Italy, Japan, the United Kingdom (the UK), and the US. These countries, with the seven largest advanced economies in the world, represent more than 62% of global net wealth. Retaliatory measures by China ignited fears of a tit-for-tat escalation cycle that could be destructive for global economic growth.

• Fears of a trade war abated toward the end of the summer, with good news heralded by a trade agreement between the US and Mexico, lower-than-expected tariffs on $200 billion of Chinese goods, and a trade deal with Canada that concluded the renegotiation of the North American Free Trade Agreement. US equity markets surged in response, delivering strong gains from July to September and reaching new highs as geopolitical anxiety eased and strong corporate earnings continued.

• US equities were volatile in October 2018, declining amid investor concerns about the pace of US economic growth and the outlook for corporate earnings. Toward the end of the month, US equities retraced some of their losses on positive economic news and solid earnings reports.

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• At the end of the reporting period, US economic growth was continuing, while growth in other major economies had moderated. Overall, 2018 appeared to be a year of global growth divergence, whereas 2017 was characterized by synchronized global economic recovery.

• US economic growth was accompanied by rising interest rates and a stronger US dollar, which strained emerging markets economies. Higher US interest rates caused capital outflows from the emerging markets, leading to the sharp depreciation of emerging markets currencies and unleashing a vicious cycle of increased inflation and central bank rate hikes. This was especially true in countries with significant political problems, economic imbalances, and limited reserves, such as Turkey and Argentina. Trade tensions and the high price of crude oil further exacerbated the problem, even in stronger emerging markets countries, by putting additional pressure on their foreign currency reserves. Nevertheless, the potential of an emerging markets crisis appeared to be contained at the end of the period, thanks to China’s commitment to doing “whatever it takes” to keep its own economy stable and the proactive stance of emerging markets central banks overall.

• In Europe and Japan, economic growth has slowed since the beginning of 2018, roiled by negative news such as tariff uncertainty, protracted negotiations over the UK’s exit from the European Union, and the possibility of Italy leaving as well. Consequently, non-US developed markets stocks were weak, while emerging markets stocks declined. In contrast, the S&P 500 Index generated a solidly positive return during the same period. QMA believes the divergence in equity returns between the US and other developed markets countries has reached an unprecedented level and thinks they are likely to converge.

• US small-cap equities outperformed from March to July at the height of the trade tensions, perceived by investors as a domestic asset class that could provide safe haven from macroeconomic turbulence abroad. With trade tensions easing, this sector gave back some of its gains toward the end of the reporting period.

• The Federal Reserve (the Fed) continued tightening US monetary policy, having raised short-term rates six times from the beginning of 2017 through the end of the reporting period. This has lifted the short-term end of the US Treasury yield curve, while the long-term end has remained anchored by interest rate differentials with the rest of the world and investors’ fears about the maturity of the US business cycle. As a result, the US Treasury yield curve flattened throughout 2018.

• US Treasury securities and investment-grade corporate bonds underperformed US equities between January 1 and October 31, 2018. At the same time, high yield corporate bonds performed strongly, as spreads (yield differentials versus US Treasuries) narrowed due to the healthy economic backdrop.

PGIM QMA Defensive Equity Fund 13

Strategy and Performance Overview (continued)

What worked?

• An underweight in industrials, which was among the worst-performing sectors during the reporting period, had a positive effect on the Fund’s returns. Industrials exhibited an unattractive correlation to the overall market and valuations appeared relatively high, leading QMA to underweight the sector.

• In addition, an underweight in the real estate sector during the first half during the period, due to high valuations and volatility, benefited the Fund’s performance as the sector trailed the S&P 500 Index in the rising interest rate environment.

What didn’t work?

• A broad underweight in cyclical sectors worked against the Fund during the reporting period.

• Rising interest rates weighed on more defensive sectors, while a continuation of strong earnings growth helped companies that are sensitive to cyclical changes in the economy.

• Overweights in defensive sectors, such as utilities, consumer staples, and telecommunication services, detracted in varying degrees from the Fund’s returns because of their interest rate sensitivity and the cyclical nature of the equity market.

• Conversely, an underweight in technology, due to high volatility and market correlation, detracted from the Fund’s performance. Technology companies maintained durable profit growth, which helped make the sector one of the strongest performers of the period.

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

• The Fund periodically utilized positions in S&P 500 Index 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.

14 Visit our website at pgiminvestments.com

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, 2018. 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 PGIM Funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period

PGIM QMA Defensive Equity Fund 15

Fees and Expenses (continued)

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

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

PGIM QMA Defensive Equity Fund		Beginning Account Value May 1, 2018		Ending Account Value October 31, 2018		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During  the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,026.40		1.51	%	$	7.71
	Hypothetical	$	1,000.00	$	1,017.59		1.51	%	$	7.68
Class B	Actual	$	1,000.00	$	1,021.70		2.28	%	$	11.62
	Hypothetical	$	1,000.00	$	1,013.71		2.28	%	$	11.57
Class C	Actual	$	1,000.00	$	1,021.60		2.27	%	$	11.57
	Hypothetical	$	1,000.00	$	1,013.76		2.27	%	$	11.52
Class R	Actual	$	1,000.00	$	1,024.10		1.78	%	$	9.08
	Hypothetical	$	1,000.00	$	1,016.23		1.78	%	$	9.05
Class Z	Actual	$	1,000.00	$	1,026.40		1.48	%	$	7.56
	Hypothetical	$	1,000.00	$	1,017.74		1.48	%	$	7.53
Class R6**	Actual	$	1,000.00	$	1,027.70		1.14	%	$	5.83
	Hypothetical	$	1,000.00	$	1,019.46		1.14	%	$	5.80

* 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, 2018, and divided by the 365 days in the Fund’s fiscal year ended October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

**Formerly known as Class Q shares.

16 Visit our website at pgiminvestments.com

Schedule of Investments

as of October 31, 2018

Description	Shares		Value
LONG-TERM INVESTMENTS    95.6%
COMMON STOCKS
Aerospace & Defense    2.3%
Arconic, Inc.		3,333	$	67,760
Boeing Co. (The)		4,250		1,508,155
General Dynamics Corp.		2,220		383,128
Harris Corp.		940		139,787
Huntington Ingalls Industries, Inc.		350		76,468
L3 Technologies, Inc.		630		119,366
Lockheed Martin Corp.		1,970		578,884
Northrop Grumman Corp.		1,390		364,110
Raytheon Co.		2,270		397,341
Rockwell Collins, Inc.		1,310		167,706
Textron, Inc.		2,000		107,260
TransDigm Group, Inc.*		390		128,798
United Technologies Corp.		5,980		742,776
				4,781,539
Air Freight & Logistics    0.6%
C.H. Robinson Worldwide, Inc.		1,100		97,933
Expeditors International of Washington, Inc.		1,400		94,052
FedEx Corp.		1,940		427,460
United Parcel Service, Inc. (Class B Stock)		5,510		587,035
				1,206,480
Airlines    0.4%
Alaska Air Group, Inc.		1,000		61,420
American Airlines Group, Inc.		3,200		112,256
Delta Air Lines, Inc.		5,000		273,650
Southwest Airlines Co.		4,100		201,310
United Continental Holdings, Inc.*		1,800		153,918
				802,554
Auto Components    0.1%
Aptiv PLC		2,400		184,320
BorgWarner, Inc.		1,860		73,303
Goodyear Tire & Rubber Co. (The)		2,100		44,226
				301,849
Automobiles    0.4%
Ford Motor Co.		34,700		331,385

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 17

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Automobiles (cont’d.)
General Motors Co.		11,600	$	424,444
Harley-Davidson, Inc.		1,400		53,508
				809,337
Banks    6.6%
Bank of America Corp.		93,700		2,576,750
BB&T Corp.		7,900		388,364
Citigroup, Inc.		25,400		1,662,684
Citizens Financial Group, Inc.		4,900		183,015
Comerica, Inc.		1,820		148,439
Fifth Third Bancorp		6,900		186,231
Huntington Bancshares, Inc.		11,500		164,795
JPMorgan Chase & Co.		33,910		3,696,868
KeyCorp		10,900		197,944
M&T Bank Corp.		1,490		246,461
People’s United Financial, Inc.		4,100		64,206
PNC Financial Services Group, Inc. (The)		4,730		607,758
Regions Financial Corp.		11,400		193,458
SunTrust Banks, Inc.		4,700		294,502
SVB Financial Group*		560		132,849
U.S. Bancorp		15,500		810,185
Wells Fargo & Co.		43,800		2,331,474
Zions Bancorp NA		2,100		98,805
				13,984,788
Beverages    3.6%
Brown-Forman Corp. (Class B Stock)		3,050		141,337
Coca-Cola Co. (The)		68,800		3,294,144
Constellation Brands, Inc. (Class A Stock)		3,020		601,675
Molson Coors Brewing Co. (Class B Stock)		3,340		213,760
Monster Beverage Corp.*		7,100		375,235
PepsiCo, Inc.		25,430		2,857,823
				7,483,974
Biotechnology    0.8%
AbbVie, Inc.		4,640		361,224
Alexion Pharmaceuticals, Inc.*		690		77,328
Amgen, Inc.		1,990		383,652
Biogen, Inc.*		620		188,647
Celgene Corp.*		2,130		152,508
Gilead Sciences, Inc.		3,970		270,675
Incyte Corp.*		540		35,003

See Notes to Financial Statements.

18

Description	Shares		Value
COMMON STOCKS (Continued)
Biotechnology (cont’d.)
Regeneron Pharmaceuticals, Inc.*		240	$	81,418
Vertex Pharmaceuticals, Inc.*		790		133,873
				1,684,328
Building Products    0.2%
A.O. Smith Corp.		1,100		50,083
Allegion PLC		766		65,669
Fortune Brands Home & Security, Inc.		1,100		49,313
Johnson Controls International PLC		7,278		232,678
Masco Corp.		2,400		72,000
Resideo Technologies, Inc.*		985		20,734
				490,477
Capital Markets    3.1%
Affiliated Managers Group, Inc.		590		67,059
Ameriprise Financial, Inc.		1,480		188,315
Bank of New York Mellon Corp. (The)		9,400		444,902
BlackRock, Inc.		1,260		518,389
Cboe Global Markets, Inc.		1,190		134,292
Charles Schwab Corp. (The)		12,200		564,128
CME Group, Inc.		3,470		635,843
E*TRADE Financial Corp.		2,700		133,434
Franklin Resources, Inc.		3,290		100,345
Goldman Sachs Group, Inc. (The)		3,570		804,571
Intercontinental Exchange, Inc.		5,830		449,143
Invesco Ltd.		4,400		95,524
Moody’s Corp.		1,730		251,680
Morgan Stanley		13,500		616,410
MSCI, Inc.		940		141,357
Nasdaq, Inc.		1,200		104,052
Northern Trust Corp.		2,310		217,302
Raymond James Financial, Inc.		1,400		107,366
S&P Global, Inc.		2,570		468,563
State Street Corp.		3,880		266,750
T. Rowe Price Group, Inc.		2,510		243,445
				6,552,870
Chemicals    2.1%
Air Products & Chemicals, Inc.		2,420		373,527
Albemarle Corp.		1,210		120,056
CF Industries Holdings, Inc.		2,550		122,476
DowDuPont, Inc.		25,435		1,371,455

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 19

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Chemicals (cont’d.)
Eastman Chemical Co.		1,530	$	119,876
Ecolab, Inc.		2,810		430,351
FMC Corp.		1,500		117,120
International Flavors & Fragrances, Inc.		1,120		162,019
Linde PLC (United Kingdom)		3,180		526,195
LyondellBasell Industries NV (Class A Stock)		3,520		314,230
Mosaic Co. (The)		3,900		120,666
PPG Industries, Inc.		2,730		286,896
Sherwin-Williams Co. (The)		910		358,058
				4,422,925
Commercial Services & Supplies    0.3%
Cintas Corp.		690		125,490
Copart, Inc.*		1,600		78,256
Republic Services, Inc.		1,700		123,556
Rollins, Inc.		800		47,360
Stericycle, Inc.*		670		33,480
Waste Management, Inc.		3,100		277,357
				685,499
Communications Equipment    0.4%
Arista Networks, Inc.*		160		36,856
Cisco Systems, Inc.		13,500		617,625
F5 Networks, Inc.*		180		31,550
Juniper Networks, Inc.		1,000		29,270
Motorola Solutions, Inc.		480		58,829
				774,130
Construction & Engineering    0.1%
Fluor Corp.		1,100		48,246
Jacobs Engineering Group, Inc.		1,000		75,090
Quanta Services, Inc.*		1,100		34,320
				157,656
Construction Materials    0.1%
Martin Marietta Materials, Inc.		700		119,896
Vulcan Materials Co.		1,460		147,664
				267,560

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Consumer Finance    0.8%
American Express Co.		7,180	$	737,601
Capital One Financial Corp.		4,920		439,356
Discover Financial Services		3,500		243,845
Synchrony Financial		7,001		202,189
				1,622,991
Containers & Packaging    0.4%
Avery Dennison Corp.		970		87,998
Ball Corp.		3,800		170,240
International Paper Co.		4,500		204,120
Packaging Corp. of America		1,080		99,155
Sealed Air Corp.		1,700		55,012
WestRock Co.		2,836		121,863
				738,388
Distributors 0.1%
Genuine Parts Co.		1,340		131,213
LKQ Corp.*		2,800		76,356
				207,569
Diversified Consumer Services    0.0%
H&R Block, Inc.		1,800		47,772
Diversified Financial Services    2.0%
Berkshire Hathaway, Inc. (Class B Stock)*		19,670		4,037,858
Jefferies Financial Group, Inc.		3,200		68,704
				4,106,562
Diversified Telecommunication Services    1.4%
AT&T, Inc.		45,467		1,394,928
CenturyLink, Inc.		5,871		121,177
Verizon Communications, Inc.		25,900		1,478,631
				2,994,736
Electric Utilities    8.4%
Alliant Energy Corp.		9,300		399,714
American Electric Power Co., Inc.		19,700		1,445,192
Duke Energy Corp.		28,500		2,354,955
Edison International		13,000		902,070
Entergy Corp.		7,200		604,440

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 21

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Electric Utilities (cont’d.)
Evergy, Inc.		10,800	$	604,692
Eversource Energy		12,600		797,076
Exelon Corp.		38,500		1,686,685
FirstEnergy Corp.		19,400		723,232
NextEra Energy, Inc.		18,830		3,248,175
PG&E Corp.*		20,600		964,286
Pinnacle West Capital Corp.		4,500		370,125
PPL Corp.		27,900		848,160
Southern Co. (The)		40,500		1,823,715
Xcel Energy, Inc.		20,300		994,903
				17,767,420
Electrical Equipment    0.4%
AMETEK, Inc.		1,800		120,744
Eaton Corp. PLC		3,500		250,845
Emerson Electric Co.		5,000		339,400
Rockwell Automation, Inc.		980		161,435
				872,424
Electronic Equipment, Instruments & Components    0.1%
Amphenol Corp. (Class A Stock)		940		84,130
Corning, Inc.		2,400		76,680
FLIR Systems, Inc.		400		18,524
IPG Photonics Corp.*		110		14,691
TE Connectivity Ltd.		1,010		76,174
				270,199
Energy Equipment & Services    1.0%
Baker Hughes a GE Co.		5,800		154,802
Halliburton Co.		12,300		426,564
Helmerich & Payne, Inc.		1,570		97,795
National Oilwell Varco, Inc.		5,300		195,040
Schlumberger Ltd.		19,419		996,389
TechnipFMC PLC (United Kingdom)		5,900		155,170
				2,025,760
Entertainment    1.4%
Activision Blizzard, Inc.		4,800		331,440
Electronic Arts, Inc.*		1,910		173,772
Netflix, Inc.*		2,730		823,859
Take-Two Interactive Software, Inc.*		720		92,786

See Notes to Financial Statements.

22

Description	Shares		Value
COMMON STOCKS (Continued)
Entertainment (cont’d.)
Twenty-First Century Fox, Inc. (Class A Stock)		6,600	$	300,432
Twenty-First Century Fox, Inc. (Class B Stock)		3,000		135,540
Viacom, Inc. (Class B Stock)		2,200		70,356
Walt Disney Co. (The)		9,330		1,071,364
				2,999,549
Equity Real Estate Investment Trusts (REITs)    5.2%
Alexandria Real Estate Equities, Inc.		1,840		224,903
American Tower Corp.		7,680		1,196,621
Apartment Investment & Management Co. (Class A Stock)		2,700		116,208
AvalonBay Communities, Inc., REIT		2,410		422,666
Boston Properties, Inc., REIT		2,690		324,844
Crown Castle International Corp., REIT		7,230		786,190
Digital Realty Trust, Inc., REIT		3,590		370,704
Duke Realty Corp., REIT		6,200		170,934
Equinix, Inc., REIT		1,391		526,827
Equity Residential		6,400		415,744
Essex Property Trust, Inc., REIT		1,150		288,397
Extra Space Storage, Inc., REIT		2,200		198,132
Federal Realty Investment Trust, REIT		1,280		158,784
HCP, Inc.		8,100		223,155
Host Hotels & Resorts, Inc., REIT		12,900		246,519
Iron Mountain, Inc.		4,938		151,152
Kimco Realty Corp., REIT		7,300		117,457
Macerich Co. (The), REIT		1,800		92,916
Mid-America Apartment Communities, Inc.		2,040		199,328
Prologis, Inc., REIT		11,000		709,170
Public Storage, REIT		2,610		536,277
Realty Income Corp.		5,000		301,350
Regency Centers Corp.		2,900		183,744
SBA Communications Corp.*		2,000		324,340
Simon Property Group, Inc., REIT		5,390		989,173
SL Green Realty Corp.		1,560		142,366
UDR, Inc., REIT		4,600		180,274
Ventas, Inc.		6,200		359,848
Vornado Realty Trust		2,990		203,559
Welltower, Inc., REIT		6,500		429,455
Weyerhaeuser Co.		13,140		349,918
				10,940,955
Food & Staples Retailing    3.2%
Costco Wholesale Corp.		7,890		1,803,891
Kroger Co. (The)		14,300		425,568

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 23

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Food & Staples Retailing (cont’d.)
Sysco Corp.		8,600	$	613,438
Walgreens Boots Alliance, Inc.		15,200		1,212,504
Walmart, Inc.		25,770		2,584,215
				6,639,616
Food Products    2.2%
Archer-Daniels-Midland Co.		10,000		472,500
Campbell Soup Co.		3,400		127,194
Conagra Brands, Inc.		7,000		249,200
General Mills, Inc.		10,700		468,660
Hershey Co. (The)		2,510		268,946
Hormel Foods Corp.		4,900		213,836
J.M. Smucker Co. (The)		2,050		222,056
Kellogg Co.		4,500		294,660
Kraft Heinz Co. (The)		11,200		615,664
McCormick & Co., Inc.		2,180		313,920
Mondelez International, Inc. (Class A Stock)		26,300		1,104,074
Tyson Foods, Inc. (Class A Stock)		5,300		317,576
				4,668,286
Health Care Equipment & Supplies    1.0%
Abbott Laboratories		5,357		369,312
ABIOMED, Inc.*		140		47,768
Align Technology, Inc.*		230		50,876
Baxter International, Inc.		1,500		93,765
Becton, Dickinson and Co.		822		189,471
Boston Scientific Corp.*		4,200		151,788
Cooper Cos., Inc. (The)		150		38,746
Danaher Corp.		1,890		187,866
DENTSPLY SIRONA, Inc.		600		20,778
Edwards Lifesciences Corp.*		640		94,464
Hologic, Inc.*		800		31,192
IDEXX Laboratories, Inc.*		270		57,272
Intuitive Surgical, Inc.*		350		182,413
Medtronic PLC		4,188		376,166
ResMed, Inc.		440		46,605
Stryker Corp.		950		154,109
Varian Medical Systems, Inc.*		280		33,424
Zimmer Biomet Holdings, Inc.		630		71,562
				2,197,577

See Notes to Financial Statements.

24

Description	Shares		Value
COMMON STOCKS (Continued)
Health Care Providers & Services    1.2%
Aetna, Inc.		1,010	$	200,384
AmerisourceBergen Corp.		550		48,400
Anthem, Inc.		800		220,456
Cardinal Health, Inc.		900		45,540
Centene Corp.*		630		82,102
Cigna Corp.		750		160,358
CVS Health Corp.		3,090		223,685
DaVita, Inc.*		380		25,589
Express Scripts Holding Co.*		1,700		164,849
HCA Healthcare, Inc.		830		110,830
Henry Schein, Inc.*		480		39,840
Humana, Inc.		430		137,776
Laboratory Corp. of America Holdings*		320		51,376
McKesson Corp.		610		76,104
Quest Diagnostics, Inc.		420		39,526
UnitedHealth Group, Inc.		2,950		770,983
Universal Health Services, Inc. (Class B Stock)		270		32,821
WellCare Health Plans, Inc.*		160		44,158
				2,474,777
Health Care Technology    0.0%
Cerner Corp.*		1,000		57,280
Hotels, Restaurants & Leisure    1.7%
Carnival Corp.		3,600		201,744
Chipotle Mexican Grill, Inc.*		220		101,273
Darden Restaurants, Inc.		1,100		117,205
Hilton Worldwide Holdings, Inc.		2,600		185,042
Marriott International, Inc. (Class A Stock)		2,560		299,238
McDonald’s Corp.		6,880		1,217,072
MGM Resorts International		4,500		120,060
Norwegian Cruise Line Holdings Ltd.*		1,800		79,326
Royal Caribbean Cruises Ltd.		1,520		159,190
Starbucks Corp.		12,000		699,240
Wynn Resorts Ltd.		870		87,522
Yum! Brands, Inc.		2,800		253,148
				3,520,060
Household Durables    0.3%
D.R. Horton, Inc.		3,000		107,880
Garmin Ltd.		1,100		72,776
Leggett & Platt, Inc.		1,100		39,941
Lennar Corp. (Class A Stock)		2,600		111,748

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 25

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Household Durables (cont’d.)
Mohawk Industries, Inc.*		570	$	71,096
Newell Brands, Inc.		3,800		60,344
PulteGroup, Inc.		2,300		56,511
Whirlpool Corp.		570		62,563
				582,859
Household Products    2.9%
Church & Dwight Co., Inc.		4,440		263,603
Clorox Co. (The)		2,310		342,919
Colgate-Palmolive Co.		15,600		928,980
Kimberly-Clark Corp.		6,250		651,875
Procter & Gamble Co. (The)		44,800		3,972,864
				6,160,241
Independent Power & Renewable Electricity Producers    0.4%
AES Corp.		26,400		384,912
NRG Energy, Inc.		12,100		437,899
				822,811
Industrial Conglomerates    1.3%
3M Co.		4,670		888,514
General Electric Co.		69,020		697,102
Honeywell International, Inc.		5,910		855,886
Roper Technologies, Inc.		830		234,807
				2,676,309
Insurance    2.4%
Aflac, Inc.		7,900		340,253
Allstate Corp. (The)		3,560		340,763
American International Group, Inc.		9,100		375,739
Aon PLC		2,490		388,888
Arthur J. Gallagher & Co.		1,900		140,619
Assurant, Inc.		600		58,326
Brighthouse Financial, Inc.*		1,290		51,123
Chubb Ltd.		4,717		589,201
Cincinnati Financial Corp.		1,600		125,824
Everest Re Group Ltd.		440		95,858
Hartford Financial Services Group, Inc. (The)		3,700		168,054
Lincoln National Corp.		2,300		138,437
Loews Corp.		2,900		135,024
Marsh & McLennan Cos., Inc.		5,200		440,700

See Notes to Financial Statements.

26

Description	Shares		Value
COMMON STOCKS (Continued)
Insurance (cont’d.)
MetLife, Inc.		10,100	$	416,019
Principal Financial Group, Inc.		2,800		131,796
Progressive Corp. (The)		6,000		418,200
Torchmark Corp.		1,100		93,126
Travelers Cos., Inc. (The)		2,750		344,108
Unum Group		2,300		83,398
Willis Towers Watson PLC		1,370		196,129
				5,071,585
Interactive Media & Services    3.1%
Alphabet, Inc. (Class A Stock)*		1,880		2,050,290
Alphabet, Inc. (Class C Stock)*		1,931		2,079,243
Facebook, Inc. (Class A Stock)*		15,130		2,296,583
TripAdvisor, Inc.*		590		30,763
Twitter, Inc.*		4,500		156,375
				6,613,254
Internet & Direct Marketing Retail    3.3%
Amazon.com, Inc.*		3,640		5,816,757
Booking Holdings, Inc.*		430		806,069
eBay, Inc.*		8,200		238,046
Expedia Group, Inc.		1,060		132,956
				6,993,828
IT Services    1.5%
Accenture PLC (Class A Stock)		1,910		301,054
Akamai Technologies, Inc.*		500		36,125
Alliance Data Systems Corp.		140		28,865
Automatic Data Processing, Inc.		1,300		187,304
Broadridge Financial Solutions, Inc.		350		40,929
Cognizant Technology Solutions Corp. (Class A Stock)		1,720		118,732
DXC Technology Co.		839		61,104
Fidelity National Information Services, Inc.		980		102,018
Fiserv, Inc.*		1,220		96,746
FleetCor Technologies, Inc.*		270		54,008
Gartner, Inc.*		270		39,831
Global Payments, Inc.		470		53,688
International Business Machines Corp.		2,710		312,815
Mastercard, Inc. (Class A Stock)		2,710		535,686
Paychex, Inc.		1,000		65,490
PayPal Holdings, Inc.*		3,500		294,665
Total System Services, Inc.		500		45,575

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 27

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
IT Services (cont’d.)
VeriSign, Inc.*		320	$	45,613
Visa, Inc. (Class A Stock)		5,280		727,848
Western Union Co. (The)		1,300		23,452
				3,171,548
Leisure Products    0.1%
Hasbro, Inc.		1,040		95,378
Mattel, Inc.*(a)		3,000		40,740
				136,118
Life Sciences Tools & Services    0.3%
Agilent Technologies, Inc.		1,000		64,790
Illumina, Inc.*		450		140,017
IQVIA Holdings, Inc.*		500		61,465
Mettler-Toledo International, Inc.*		80		43,746
PerkinElmer, Inc.		400		34,592
Thermo Fisher Scientific, Inc.		1,240		289,726
Waters Corp.*		240		45,526
				679,862
Machinery    1.2%
Caterpillar, Inc.		4,730		573,844
Cummins, Inc.		1,200		164,028
Deere & Co.		2,560		346,726
Dover Corp.		1,140		94,438
Flowserve Corp.		1,000		45,900
Fortive Corp.		2,450		181,913
Illinois Tool Works, Inc.		2,450		312,546
Ingersoll-Rand PLC		1,950		187,083
PACCAR, Inc.		2,800		160,188
Parker-Hannifin Corp.		1,060		160,728
Pentair PLC (United Kingdom)		1,300		52,195
Snap-on, Inc.		450		69,273
Stanley Black & Decker, Inc.		1,220		142,154
Xylem, Inc.		1,400		91,812
				2,582,828
Media    0.9%
CBS Corp. (Class B Stock)		2,100		120,435
Charter Communications, Inc. (Class A Stock)*		1,120		358,814
Comcast Corp. (Class A Stock)		28,600		1,090,804

See Notes to Financial Statements.

28

Description	Shares		Value
COMMON STOCKS (Continued)
Media (cont’d.)
Discovery, Inc. (Class A Stock)*		900	$	29,151
Discovery, Inc. (Class C Stock)*		2,164		63,427
DISH Network Corp. (Class A Stock)*		1,400		43,036
Interpublic Group of Cos., Inc. (The)		2,400		55,584
News Corp. (Class A Stock)		2,350		30,997
News Corp. (Class B Stock)		700		9,338
Omnicom Group, Inc.		1,400		104,048
				1,905,634
Metals & Mining    0.3%
Freeport-McMoRan, Inc.		16,000		186,400
Newmont Mining Corp.		5,800		179,336
Nucor Corp.		3,500		206,920
				572,656
Multiline Retail    0.5%
Dollar General Corp.		2,360		262,857
Dollar Tree, Inc.*		2,150		181,245
Kohl’s Corp.		1,500		113,595
Macy’s, Inc.		2,700		92,583
Nordstrom, Inc.		1,000		65,770
Target Corp.		4,700		393,061
				1,109,111
Multi-Utilities    4.3%
Ameren Corp.		9,700		626,426
CenterPoint Energy, Inc.		19,600		529,396
CMS Energy Corp.		11,300		559,576
Consolidated Edison, Inc.		12,400		942,400
Dominion Energy, Inc.		26,100		1,864,062
DTE Energy Co.		7,260		816,024
NiSource, Inc.		14,400		365,184
Public Service Enterprise Group, Inc.		20,200		1,079,286
SCANA Corp.		5,700		228,285
Sempra Energy		10,920		1,202,510
WEC Energy Group, Inc.		12,584		860,746
				9,073,895
Oil, Gas & Consumable Fuels    7.7%
Anadarko Petroleum Corp.		7,230		384,636
Apache Corp.		5,300		200,499

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 29

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
Cabot Oil & Gas Corp.		6,100	$	147,803
Chevron Corp.		26,880		3,001,152
Cimarex Energy Co.		1,340		106,490
Concho Resources, Inc.*		2,810		390,843
ConocoPhillips		16,300		1,139,370
Devon Energy Corp.		7,100		230,040
EOG Resources, Inc.		8,130		856,414
EQT Corp.		3,670		124,670
Exxon Mobil Corp.		59,420		4,734,586
Hess Corp.		3,530		202,622
HollyFrontier Corp.		2,300		155,112
Kinder Morgan, Inc.		26,600		452,732
Marathon Oil Corp.		11,900		225,981
Marathon Petroleum Corp.		9,371		660,220
Newfield Exploration Co.*		2,800		56,560
Noble Energy, Inc.		6,700		166,495
Occidental Petroleum Corp.		10,700		717,649
ONEOK, Inc.		5,800		380,480
Phillips 66		5,990		615,892
Pioneer Natural Resources Co.		2,390		351,975
Valero Energy Corp.		6,000		546,540
Williams Cos., Inc. (The)		16,900		411,177
				16,259,938
Personal Products    0.3%
Coty, Inc. (Class A Stock)		8,000		84,400
Estee Lauder Cos., Inc. (The) (Class A Stock)		4,030		553,883
				638,283
Pharmaceuticals    1.7%
Allergan PLC		978		154,534
Bristol-Myers Squibb Co.		5,000		252,700
Eli Lilly & Co.		2,930		317,729
Johnson & Johnson		8,220		1,150,718
Merck & Co., Inc.		8,100		596,241
Mylan NV*		1,500		46,875
Nektar Therapeutics*		500		19,340
Perrigo Co. PLC		350		24,605
Pfizer, Inc.		17,900		770,774
Zoetis, Inc.		1,500		135,225
				3,468,741

See Notes to Financial Statements.

30

Description	Shares		Value
COMMON STOCKS (Continued)
Professional Services    0.3%
Equifax, Inc.		960	$	97,382
IHS Markit Ltd.*		2,800		147,084
Nielsen Holdings PLC		2,800		72,744
Robert Half International, Inc.		1,000		60,530
Verisk Analytics, Inc.*		1,310		156,991
				534,731
Real Estate Management & Development    0.1%
CBRE Group, Inc. (Class A Stock)*		5,500		221,595
Road & Rail    0.9%
CSX Corp.		6,500		447,590
J.B. Hunt Transport Services, Inc.		700		77,427
Kansas City Southern		810		82,588
Norfolk Southern Corp.		2,230		374,261
Union Pacific Corp.		5,880		859,773
				1,841,639
Semiconductors & Semiconductor Equipment    1.2%
Advanced Micro Devices, Inc.*		2,500		45,525
Analog Devices, Inc.		1,108		92,751
Applied Materials, Inc.		2,900		95,352
Broadcom, Inc.		1,282		286,514
Intel Corp.		13,700		642,256
KLA-Tencor Corp.		480		43,939
Lam Research Corp.		470		66,613
Microchip Technology, Inc.		740		48,677
Micron Technology, Inc.*		3,400		128,248
NVIDIA Corp.		1,810		381,602
Qorvo, Inc.*		400		29,404
QUALCOMM, Inc.		4,200		264,138
Skyworks Solutions, Inc.		540		46,851
Texas Instruments, Inc.		2,890		268,279
Xilinx, Inc.		800		68,296
				2,508,445
Software    1.9%
Adobe, Inc.*		1,460		358,810
ANSYS, Inc.*		250		37,387
Autodesk, Inc.*		650		84,012
CA, Inc.		900		39,924
Cadence Design Systems, Inc.*		800		35,656

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 31

Schedule of Investments (continued)

as of October 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Software (cont’d.)
Citrix Systems, Inc.*		380	$	38,939
Intuit, Inc.		770		162,470
Microsoft Corp.		22,770		2,432,064
Oracle Corp.		8,400		410,256
Red Hat, Inc.*		530		90,969
salesforce.com, Inc.*		2,250		308,790
Symantec Corp.		1,800		32,670
Synopsys, Inc.*		460		41,184
				4,073,131
Specialty Retail    2.2%
Advance Auto Parts, Inc.		660		105,441
AutoZone, Inc.*		240		176,033
Best Buy Co., Inc.		2,200		154,352
CarMax, Inc.*		1,600		108,656
Foot Locker, Inc.		1,000		47,140
Gap, Inc. (The)		1,900		51,870
Home Depot, Inc. (The)		10,150		1,785,182
L Brands, Inc.		2,000		64,840
Lowe’s Cos., Inc.		7,200		685,584
O’Reilly Automotive, Inc.*		720		230,940
Ross Stores, Inc.		3,380		334,620
Tiffany & Co.		970		107,961
TJX Cos., Inc. (The)		5,560		610,933
Tractor Supply Co.		1,100		101,079
Ulta Beauty, Inc.*		510		140,005
				4,704,636
Technology Hardware, Storage & Peripherals    1.6%
Apple, Inc.		13,630		2,983,062
Hewlett Packard Enterprise Co.		4,300		65,575
HP, Inc.		4,600		111,044
NetApp, Inc.		800		62,792
Seagate Technology PLC		700		28,161
Western Digital Corp.		832		35,834
Xerox Corp.		650		18,116
				3,304,584
Textiles, Apparel & Luxury Goods    0.7%
Hanesbrands, Inc.		3,100		53,196
Michael Kors Holdings Ltd.*		1,300		72,033
NIKE, Inc. (Class B Stock)		11,320		849,453

See Notes to Financial Statements.

32

Description	Interest Rate			Maturity Date		Shares		Value
COMMON STOCKS (Continued)
Textiles, Apparel & Luxury Goods (cont’d.)
PVH Corp.							680	$	82,137
Ralph Lauren Corp.							490		63,509
Tapestry, Inc.							2,500		105,775
Under Armour, Inc. (Class A Stock)*							1,600		35,376
Under Armour, Inc. (Class C Stock)*							1,611		31,946
VF Corp.							2,920		242,010
									1,535,435
Tobacco    2.2%
Altria Group, Inc.							33,900		2,204,856
Philip Morris International, Inc.							27,990		2,465,079
									4,669,935
Trading Companies & Distributors    0.1%
Fastenal Co.							2,300		118,243
United Rentals, Inc.*							660		79,246
W.W. Grainger, Inc.							370		105,069
									302,558
Water Utilities    0.3%
American Water Works Co., Inc.							7,200		637,416
TOTAL LONG-TERM INVESTMENTS (cost $148,864,959)									201,411,493
SHORT-TERM INVESTMENTS    4.5%
AFFILIATED MUTUAL FUNDS    4.3%
PGIM Core Ultra Short Bond Fund(w)							9,001,076		9,001,076
PGIM Institutional Money Market Fund (cost $34,494; includes $34,364 of cash collateral for securities on loan)(b)(w)							34,498		34,498
TOTAL AFFILIATED MUTUAL FUNDS (cost $9,035,570)									9,035,574
						Principal Amount (000)#
U.S. TREASURY OBLIGATIONS(n)    0.2%
U.S. Treasury Bills(k)		2.125	%		12/20/18		100		99,707

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 33

Schedule of Investments (continued)

as of October 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
U.S. TREASURY OBLIGATIONS (Continued)
U.S. Treasury Bills(k)		2.128	%		12/20/18		500	$	498,537
TOTAL U.S. TREASURY OBLIGATIONS (cost $598,263)									598,244
TOTAL SHORT-TERM INVESTMENTS (cost $9,633,833)									9,633,818
TOTAL INVESTMENTS    100.1% (cost $158,498,792)									211,045,311
Liabilities in excess of other assets(z)    (0.1)%									(303,775	)
NET ASSETS    100.0%								$	210,741,536

The following abbreviations are used in the annual report:

LIBOR—London Interbank Offered Rate

OTC—Over-the-counter

REITs—Real Estate Investment Trusts

* 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 $33,950; cash collateral of $34,364 (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) Rate shown reflects yield to maturity at purchased date.

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

(z) Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments:

Futures contracts outstanding at October 31, 2018:

Number of Contracts		Type	Expiration Date		Current Notional Amount		Value / Unrealized Appreciation (Depreciation)
		Long Position:
	62	S&P 500 E-Mini Index		Dec. 2018	$	8,404,410	$	(511,322	)

See Notes to Financial Statements.

34

Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:

Cash and securities segregated as collateral to cover requirements for open centrally cleared/exchange-traded derivatives are listed by broker as follows:

Broker	Cash and/or Foreign Currency			Securities Market Value
Goldman Sachs & Co.		$	—		$	598,244

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.

The following is a summary of the inputs used as of October 31, 2018 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Aerospace & Defense	$	4,781,539	$	—	$	—
Air Freight & Logistics		1,206,480		—		—
Airlines		802,554		—		—
Auto Components		301,849		—		—
Automobiles		809,337		—		—
Banks		13,984,788		—		—
Beverages		7,483,974		—		—
Biotechnology		1,684,328		—		—
Building Products		490,477		—		—
Capital Markets		6,552,870		—		—
Chemicals		4,422,925		—		—
Commercial Services & Supplies		685,499		—		—
Communications Equipment		774,130		—		—
Construction & Engineering		157,656		—		—
Construction Materials		267,560		—		—
Consumer Finance		1,622,991		—		—
Containers & Packaging		738,388		—		—
Distributors		207,569		—		—
Diversified Consumer Services		47,772		—		—
Diversified Financial Services		4,106,562		—		—
Diversified Telecommunication Services		2,994,736		—		—
Electric Utilities		17,767,420		—		—
Electrical Equipment		872,424		—		—
Electronic Equipment, Instruments & Components		270,199		—		—
Energy Equipment & Services		2,025,760		—		—

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 35

Schedule of Investments (continued)

as of October 31, 2018

	Level 1			Level 2		Level 3
Investments in Securities (continued)
Common Stocks (continued)
Entertainment	$	2,999,549		$	—	$	—
Equity Real Estate Investment Trusts (REITs)		10,940,955			—		—
Food & Staples Retailing		6,639,616			—		—
Food Products		4,668,286			—		—
Health Care Equipment & Supplies		2,197,577			—		—
Health Care Providers & Services		2,474,777			—		—
Health Care Technology		57,280			—		—
Hotels, Restaurants & Leisure		3,520,060			—		—
Household Durables		582,859			—		—
Household Products		6,160,241			—		—
Independent Power & Renewable Electricity Producers		822,811			—		—
Industrial Conglomerates		2,676,309			—		—
Insurance		5,071,585			—		—
Interactive Media & Services		6,613,254			—		—
Internet & Direct Marketing Retail		6,993,828			—		—
IT Services		3,171,548			—		—
Leisure Products		136,118			—		—
Life Sciences Tools & Services		679,862			—		—
Machinery		2,582,828			—		—
Media		1,905,634			—		—
Metals & Mining		572,656			—		—
Multiline Retail		1,109,111			—		—
Multi-Utilities		9,073,895			—		—
Oil, Gas & Consumable Fuels		16,259,938			—		—
Personal Products		638,283			—		—
Pharmaceuticals		3,468,741			—		—
Professional Services		534,731			—		—
Real Estate Management & Development		221,595			—		—
Road & Rail		1,841,639			—		—
Semiconductors & Semiconductor Equipment		2,508,445			—		—
Software		4,073,131			—		—
Specialty Retail		4,704,636			—		—
Technology Hardware, Storage & Peripherals		3,304,584			—		—
Textiles, Apparel & Luxury Goods		1,535,435			—		—
Tobacco		4,669,935			—		—
Trading Companies & Distributors		302,558			—		—
Water Utilities		637,416			—		—
Affiliated Mutual Funds		9,035,574			—		—
U.S. Treasury Obligations		—			598,244		—
Other Financial Instruments*
Futures Contracts		(511,322	)		—		—
Total	$	209,935,745		$	598,244	$	—

* 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.

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, 2018 were as follows (unaudited):

Electric Utilities	8.4	%
Oil, Gas & Consumable Fuels	7.7
Banks	6.6
Equity Real Estate Investment Trusts (REITs)	5.2
Multi-Utilities	4.3
Affiliated Mutual Funds (0.0% represents investments purchased with collateral from securities on loan)	4.3
Beverages	3.6
Internet & Direct Marketing Retail	3.3
Food & Staples Retailing	3.2
Interactive Media & Services	3.1
Capital Markets	3.1
Household Products	2.9
Insurance	2.4
Aerospace & Defense	2.3
Specialty Retail	2.2
Tobacco	2.2
Food Products	2.2
Chemicals	2.1
Diversified Financial Services	2.0
Software	1.9
Hotels, Restaurants & Leisure	1.7
Pharmaceuticals	1.7
Technology Hardware, Storage & Peripherals	1.6
IT Services	1.5
Entertainment	1.4
Diversified Telecommunication Services	1.4
Industrial Conglomerates	1.3
Machinery	1.2
Semiconductors & Semiconductor Equipment	1.2
Health Care Providers & Services	1.2
Health Care Equipment & Supplies	1.0
Energy Equipment & Services	1.0
Media	0.9
Road & Rail	0.9
Biotechnology	0.8
Consumer Finance	0.8
Textiles, Apparel & Luxury Goods	0.7	%
Air Freight & Logistics	0.6
Multiline Retail	0.5
Electrical Equipment	0.4
Independent Power & Renewable Electricity Producers	0.4
Automobiles	0.4
Airlines	0.4
Communications Equipment	0.4
Containers & Packaging	0.4
Commercial Services & Supplies	0.3
Life Sciences Tools & Services	0.3
Personal Products	0.3
Water Utilities	0.3
Household Durables	0.3
Metals & Mining	0.3
Professional Services	0.3
U.S. Treasury Obligations	0.2
Building Products	0.2
Trading Companies & Distributors	0.1
Auto Components	0.1
Electronic Equipment, Instruments & Components	0.1
Construction Materials	0.1
Real Estate Management & Development	0.1
Distributors	0.1
Construction & Engineering	0.1
Leisure Products	0.1
Health Care Technology	0.0	*
Diversified Consumer Services	0.0	*
	100.1
Liabilities in excess of other assets	(0.1	)
	100.0	%

* Less than +/- 0.05%

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 37

Schedule of Investments (continued)

as of October 31, 2018

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 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, 2018 as presented in the Statement of Assets and Liabilities:

	Asset Derivatives			Liability Derivatives
Derivatives not accounted for as hedging instruments, carried at fair value	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Equity contracts	—	$	—	Due from/to broker-variation margin futures	$	511,322	*

* 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, 2018 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			$	1,545,103
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Rights(1)		Futures
Equity contracts	$	1,193	$	(854,282	)

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

For the year ended October 31, 2018, the Fund’s average volume of derivative activities is as follows:

Futures Contracts— Long Positions(1)
$	8,540,140

(1) Notional Amount in USD.

See Notes to Financial Statements.

38

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 instrument/transaction assets and liabilities:

Description	Gross Market Value of Recognized Assets/ (Liabilities)		Collateral Pledged/ (Received)(1)			Net Amount
Securities on Loan	$	33,950	$	(33,950	)	$	—

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

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 39

Statement of Assets & Liabilities

as of October 31, 2018

Assets
Investments at value, including securities on loan of $33,950:
Unaffiliated investments (cost $149,463,222)	$	202,009,737
Affiliated investments (cost $9,035,570)		9,035,574
Dividends and interest receivable		361,140
Due from broker—variation margin futures		82,650
Receivable for Fund shares sold		39,442
Tax reclaim receivable		826
Prepaid expenses		1,070
Total Assets		211,530,439
Liabilities
Payable for Fund shares reacquired		213,136
Shareholders’ reports payable		197,712
Management fee payable		141,668
Distribution fee payable		68,208
Legal fees and expenses payable		56,349
Accrued expenses and other liabilities		43,580
Payable to broker for collateral for securities on loan		34,364
Affiliated transfer agent fee payable		33,886
Total Liabilities		788,903
Net Assets	$	210,741,536
Net assets were comprised of:
Shares of beneficial interest, at par	$	14,286
Paid-in capital in excess of par		144,244,949
Total distributable earnings (loss)		66,482,301
Net assets, October 31, 2018	$	210,741,536

See Notes to Financial Statements.

40

Class A
Net asset value and redemption price per share, ($169,942,916 ÷ 11,501,588 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, ($3,906,207 ÷ 267,163 shares of beneficial interest issued and outstanding)	$	14.62
Class C
Net asset value, offering price and redemption price per share, ($31,326,949 ÷ 2,140,853 shares of beneficial interest issued and outstanding)	$	14.63
Class R
Net asset value, offering price and redemption price per share, ($4,544 ÷ 305 shares of beneficial interest issued and outstanding)	$	14.88
Class Z
Net asset value, offering price and redemption price per share, ($5,338,156 ÷ 360,677 shares of beneficial interest issued and outstanding)	$	14.80
Class R6
Net asset value, offering price and redemption price per share, ($222,764 ÷ 15,009 shares of beneficial interest issued and outstanding)	$	14.84

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 41

Statement of Operations

Year Ended October 31, 2018

Net Investment Income (Loss)
Income
Unaffiliated dividend income	$	5,215,760
Affiliated dividend income		187,578
Interest income		8,101
Income from securities lending, net (including affiliated income of $3,239)		4,011
Total income		5,415,450
Expenses
Management fee		1,694,159
Distribution fee(a)		941,836
Shareholders’ reports		274,742
Transfer agent’s fees and expenses (including affiliated expense of $146,621)(a)		263,571
Legal fees and expenses		91,049
Custodian and accounting fees		88,617
Registration fees(a)		78,530
Audit fee		67,871
Trustees’ fees		16,149
Miscellaneous		20,556
Total expenses		3,537,080
Less: Fee waiver and/or expense reimbursement(a)		(42,851	)
Distribution fee waiver(a)		(89,557	)
Net expenses		3,404,672
Net investment income (loss)		2,010,778
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions (including affiliated of $(874))		15,615,808
Futures transactions		1,545,103
Foreign currency transactions		(881	)
		17,160,030
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated of $(7))		(8,596,914	)
Futures		(854,282	)
Foreign currencies		883
		(9,450,313	)
Net gain (loss) on investment and foreign currency transactions		7,709,717
Net Increase (Decrease) In Net Assets Resulting From Operations	$	9,720,495

(a) Class specific expenses and waivers were as follows:

	Class A			Class B			Class C		Class R			Class Z		Class R6
Distribution fee		537,250			51,266			353,274		46			—		—
Transfer agent’s fees and expenses		202,755			22,666			31,655		137			6,310		48
Registration fees		14,210			14,142			14,239		13,906			14,320		7,713
Fee waiver and/or expense reimbursement		—			(21,202	)		—		(14,021	)		—		(7,628	)
Distribution fee waiver		(89,542	)		—			—		(15	)		—		—

See Notes to Financial Statements.

42

Statement of Change in Net Assets

	Year Ended October 31,
	2018			2017
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	2,010,778		$	1,876,420
Net realized gain (loss) on investment and foreign currency transactions		17,160,030			7,869,746
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(9,450,313	)		24,929,447
Net increase (decrease) in net assets resulting from operations		9,720,495			34,675,613
Dividends and Distributions
Distributions from distributable earnings*
Class A		(7,802,550	)		—
Class B		(209,409	)		—
Class C		(1,347,853	)		—
Class R		(293	)		—
Class Z		(297,504	)		—
Class R6		(5,114	)		—
		(9,662,723	)		—
Dividends from net investment income
Class A					(2,090,702	)
Class B					(42,128	)
Class C					(201,451	)
Class R					(3,166	)
Class Z					(96,074	)
		*			(2,433,521	)
Distributions from net realized gains
Class A					(10,624,756	)
Class B					(520,479	)
Class C					(2,488,861	)
Class R					(20,046	)
Class Z					(407,553	)
		*			(14,061,695	)
Fund share transactions (Net of share conversions)
Net proceeds from shares sold		5,946,078			7,282,000
Net asset value of shares issued in reinvestment of dividends and distributions		9,476,379			16,111,166
Cost of shares reacquired		(33,830,832	)		(36,046,707	)
Net increase (decrease) in net assets from Fund share transactions		(18,408,375	)		(12,653,541	)
Total increase (decrease)		(18,350,603	)		5,526,856
Net Assets:
Beginning of year		229,092,139			223,565,283
End of year(a)	$	210,741,536		$	229,092,139
(a) Includes undistributed/(distributions in excess of) net investment income of:	$	*		$	1,442,957

* For the year ended October 31, 2018, the Fund has adopted amendments to Regulation S-X (refer to Note 9).

See Notes to Financial Statements.

PGIM 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: PGIM Income Builder Fund and PGIM QMA Defensive Equity Fund, each of which are diversified funds for the purposes of the 1940 Act. These financial statements relate only to the PGIM QMA Defensive Equity Fund (the “Fund”). Effective June 11, 2018, the names of the Fund and the other funds which comprise the Trust were changed by replacing “Prudential” with “PGIM” and each fund’s Class Q shares were renamed Class R6 shares.

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

1. Accounting Policies

The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The 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 Trust’s 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”). Pursuant to the Board’s delegation, a Valuation Committee has been established as two persons, being one or more officers of the Trust, including: the Trust’s Treasurer (or the Treasurer’s direct reports); and the Trust’s Chief or Deputy Chief Compliance Officer (or Vice-President-level direct reports of the Chief or Deputy Chief Compliance Officer). Under the current valuation procedures, the Valuation Committee of the Board 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.

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur

44

when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820—Fair Value Measurements and Disclosures.

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 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 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,

PGIM QMA Defensive Equity Fund 45

Notes to Financial Statements (continued)

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 transaction costs 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 Trust. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

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, 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) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.

46

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 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.

Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the 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.

PGIM QMA Defensive Equity Fund 47

Notes to Financial Statements (continued)

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”.

Equity and Mortgage Real Estate Investment Trusts (collectively equity 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.

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. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

Taxes: It is the 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

48

recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst total distributable earnings (loss) and paid-in capital in excess of par, as appropriate.

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

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. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Fund’s custodian and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

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 0.750% of the Fund’s average daily net assets up to $500 million, 0.70% of average daily net assets for the next $500 million and 0.650% of the average daily net assets in excess of $1 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.750% for the year ended October 31, 2018.

PGIM Investments has contractually agreed, through February 29, 2020, to limit transfer agency, shareholder servicing, sub-transfer agency, and blue sky fees, as applicable, to the extent that such fees cause the total operating expenses to exceed 2.28% of average daily net assets for Class B shares, 1.78% of average daily net assets for Class R shares, or 1.14% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and

PGIM QMA Defensive Equity Fund 49

Notes to Financial Statements (continued)

certain other Fund expenses such as dividend and interest expense and broker charges on short sales. 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.

Where applicable, PGIM Investments voluntarily agreed through June 30, 2018, to waive management fees or shared operating expenses on any share class to the same extent that it waives similar expenses on any other share class and, in addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Effective July 1, 2018 this voluntary agreement became part of the Fund’s contractual waiver agreement through February 29, 2020 and is subject to recoupment by the Manager within the same fiscal year during which such wavier/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 R, Class Z and Class R6 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 Z and Class R6 shares of the Fund.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1%, 1% and 0.75% 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 29, 2020 to limit such expenses to 0.25% and

0.50% of the average daily net assets of the Class A and Class R shares, respectively.

PIMS has advised the Fund that it received $99,362 in front-end sales charges resulting from sales of Class A shares during the year ended October 31, 2018. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended October 31, 2018, it received $2,943 and $1,800 in contingent deferred sales charges imposed upon redemptions by certain Class B and Class C shareholders, respectively.

PGIM Investments, PIMS and QMA are indirect, wholly-owned subsidiaries of Prudential

50

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 subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended October 31, 2018, no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended October 31, 2018, PGIM, Inc. was compensated $389 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, 2018, were $270,256,806 and $295,972,092, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended October 31, 2018, is presented as follows:

Value, Beginning of Year		Cost of Purchases		Proceeds from Sales		Change in Unrealized Gain (Loss)			Realized Gain (Loss)			Value, End of Year		Shares, End of Year		Income
	PGIM Core Ultra Short Bond Fund*
$	9,196,634	$	66,737,574	$	66,933,132	$	—		$	—		$	9,001,076		9,001,076	$	187,578
	PGIM Institutional Money Market Fund*
	530,123		26,485,133		26,979,877		(7	)		(874	)		34,498		34,498		3,239	**

PGIM QMA Defensive Equity Fund 51

Notes to Financial Statements (continued)

Value, Beginning of Year		Cost of Purchases		Proceeds from Sales		Change in Unrealized Gain (Loss)			Realized Gain (Loss)			Value, End of Year		Shares, End of Year	Income
$	9,726,757	$	93,222,707	$	93,913,009	$	(7	)	$	(874	)	$	9,035,574		$	190,817

* The Fund did not have any capital gain distributions during the reporting period.

** This amount is included in “Income from securities lending, net” on the Statement of Operations.

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.

For the year ended October 31, 2018, the tax character of dividends paid by the Fund were $6,468,484 of ordinary income and $3,194,239 of long-term capital gains. 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.

As of October 31, 2018, the accumulated undistributed earnings on a tax basis were $4,236,942 of ordinary income and $13,567,713 of long-term capital gains.

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of October 31, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$161,856,343	$54,991,276	$(6,313,630)	$48,677,646

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.

52

6. Capital and Ownership

The Fund offers Class A, Class B, Class C, Class R, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. 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 will 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. Class R, Class Z and Class R6 shares are not subject to any sales or redemption charge and are available exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the 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 $0.001 par value per share, divided into six classes, designated Class A, Class B, Class C, Class R, Class Z and Class R6.

As of October 31, 2018, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned 305 Class R shares and 785 Class R6 shares of the Fund. At reporting period end, two shareholders of record held 33% 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, 2018:
Shares sold		301,086		$	4,510,704
Shares issued in reinvestment of dividends and distributions		513,845			7,656,287
Shares reacquired		(1,555,132	)		(23,236,030	)
Net increase (decrease) in shares outstanding before conversion		(740,201	)		(11,069,039	)
Shares issued upon conversion from other share class(es)		150,709			2,279,617
Shares reacquired upon conversion into other share class(es)		(34,457	)		(511,226	)
Net increase (decrease) in shares outstanding		(623,949	)	$	(9,300,648	)
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	)

PGIM QMA Defensive Equity Fund 53

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2018:
Shares sold		1		$	31
Shares issued in reinvestment of dividends and distributions		14,092			209,400
Shares reacquired		(42,060	)		(622,787	)
Net increase (decrease) in shares outstanding before conversion		(27,967	)		(413,356	)
Shares reacquired upon conversion into other share class(es)		(127,535	)		(1,916,513	)
Net increase (decrease) in shares outstanding		(155,502	)	$	(2,329,869	)
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	)
Class C
Year ended October 31, 2018:
Shares sold		57,472		$	845,940
Shares issued in reinvestment of dividends and distributions		89,964			1,335,958
Shares reacquired		(495,702	)		(7,320,608	)
Net increase (decrease) in shares outstanding before conversion		(348,266	)		(5,138,710	)
Shares reacquired upon conversion into other share class(es)		(36,547	)		(544,638	)
Net increase (decrease) in shares outstanding		(384,813	)	$	(5,683,348	)
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	)
Class R
Year ended October 31, 2018:
Shares sold		12		$	181
Shares issued in reinvestment of dividends and distributions		19			293
Shares reacquired		(199	)		(2,940	)
Net increase (decrease) in shares outstanding		(168	)	$	(2,466	)
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	)

54

Class Z	Shares			Amount
Year ended October 31, 2018:
Shares sold		31,592		$	469,795
Shares issued in reinvestment of dividends and distributions		18,051			269,327
Shares reacquired		(171,655	)		(2,561,880	)
Net increase (decrease) in shares outstanding before conversion		(122,012	)		(1,822,758	)
Shares issued upon conversion from other share class(es)		61,282			914,363
Shares reacquired upon conversion into other share class(es)		(19,599	)		(295,713	)
Net increase (decrease) in shares outstanding		(80,329	)	$	(1,204,108	)
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	)
Class R6
Year ended October 31, 2018:
Shares sold		7,790		$	119,427
Shares issued in reinvestment of dividends and distributions		343			5,114
Shares reacquired		(5,630	)		(86,587	)
Net increase (decrease) in shares outstanding before conversion		2,503			37,954
Shares issued upon conversion from other share class(es)		4,815			74,110
Net increase (decrease) in shares outstanding		7,318		$	112,064
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

* Commencement of offering 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 4, 2018 through October 3, 2019. The Funds pay an annualized commitment fee of 0.15% 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 4, 2018, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under both 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.

PGIM QMA Defensive Equity Fund 55

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, 2018.

8. Risks of Investing in the Fund

The Fund’s risks include, but are not limited to, some or all of the risks discussed below:

Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, many OTC derivative instruments will not have liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet its obligations to the Fund.

Equity and Equity-Related Securities Risks: The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund invests could go down. The Fund’s holdings can vary significantly from broad market indexes and the performance of the Fund can deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.

Foreign Securities Risk: The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability.

56

Risks of Investing in Equity and Mortgage Real Estate Investment Trusts (collectively equity REITs): Real estate securities are subject to similar 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 payments 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 equity 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 equity REITs, while mortgage equity REITs may be affected by the quality of any credit extended. Equity 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. Since equity REITs are relatively smaller in size when compared to the broader market, and smaller companies tend to be more volatile than larger companies, they may be more volatile and/or more illiquid than other types of equity securities. Equity REITs are subject to interest rate risks. Equity REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each equity REIT in which it invests, in addition to the expenses of the Fund.

9. Recent Accounting Pronouncements and Reporting Updates

In August 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments to Regulation S-X to update and simplify the disclosure requirements for registered investment companies by eliminating requirements that are redundant or duplicative of US GAAP requirements or other SEC disclosure requirements. The new amendments require the presentation of the total, rather than the components, of distributable earnings on the Statement of Assets and Liabilities and the total, rather than the components, of dividends from net investment income and distributions from net realized gains on the Statements of Changes in Net Assets. The amendments also removed the requirement for the parenthetical disclosure of undistributed net investment income on the Statements of Changes in Net Assets and certain tax adjustments that were reflected in the Notes to Financial Statements. All of these have been reflected in the Fund’s financial statements.

In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Fund’s policy for the timing of transfers between levels. The amendments are

PGIM QMA Defensive Equity Fund 57

Notes to Financial Statements (continued)

effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the implications of certain provisions of the ASU and has determined to early adopt aspects related to the removal and modification of certain fair value measurement disclosures under the ASU effective immediately. At this time, management is evaluating the implications of certain other provisions of the ASU related to new disclosure requirements and any impact on the financial statement disclosures has not yet been determined.

10. Subsequent Event

At a meeting held on June 19, 2018, the Board of Trustees of the Trust approved a plan of reorganization whereby PGIM QMA Large-Cap Core Equity Fund would acquire the PGIM QMA Defensive Equity Fund. This reorganization was approved by the shareholders of the PGIM QMA Defensive Equity Fund on November 16, 2018 and was completed at the close of business on December 14, 2018.

58

Financial Highlights

Class A Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)(b)			Year Ended July 31, 2014(a)
	2018(a)			2017(a)			2016(a)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$14.78			$13.68			$13.71			$14.26			$13.65			$12.86
Income (loss) from investment operations:
Net investment income (loss)		0.15			0.13			0.16			0.13			0.03			0.12
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.50			2.02			0.21			0.24			0.58			1.46
Total from investment operations		0.65			2.15			0.37			0.37			0.61			1.58
Less Dividends and Distributions
Dividends from net investment income		(0.13	)		(0.17	)		(0.14	)		(0.12	)		-			(0.13	)
Distributions from net realized gains		(0.52	)		(0.88	)		(0.26	)		(0.80	)		-			(0.66	)
Total dividends and distributions		(0.65	)		(1.05	)		(0.40	)		(0.92	)		-			(0.79	)
Net asset value, end of period		$14.78			$14.78			$13.68			$13.71			$14.26			$13.65
Total Return(c):		4.37%			16.53%			2.85%			2.64%			4.47%			12.66%
Ratios/Supplemental Data:
Net assets, end of period (000)		$169,943			$179,231			$167,731			$176,009			$184,830			$181,385
Average net assets (000)		$179,083			$175,657			$172,299			$180,590			$181,880			$182,251
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.37%			1.28%			1.30%			1.27%			1.40%	(e)		1.25%
Expenses before waivers and/or expense reimbursement		1.42%	(f)		1.33%			1.35%			1.32%			1.45%	(e)		1.30%
Net investment income (loss)		1.03%			0.96%			1.20%			0.88%			0.74%	(e)		0.90%
Portfolio turnover rate(g)		125%			103%			96%			74%			20%			87%

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

(b) 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.

(c) 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.

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

(e) Annualized.

(f) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 59

Financial Highlights (continued)

Class B Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)(b)			Year Ended July 31, 2014(a)
	2018(a)			2017(a)			2016(a)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$14.66			$13.57			$13.60			$14.15			$13.58			$12.80
Income (loss) from investment operations:
Net investment income (loss)		0.02			0.03			0.06			0.04			-	(c)		0.02
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.48			2.01			0.21			0.23			0.57			1.45
Total from investment operations		0.50			2.04			0.27			0.27			0.57			1.47
Less Dividends and Distributions
Dividends from net investment income		(0.02	)		(0.07	)		(0.04	)		(0.02	)		-			(0.03	)
Distributions from net realized gains		(0.52	)		(0.88	)		(0.26	)		(0.80	)		-			(0.66	)
Total dividends and distributions		(0.54	)		(0.95	)		(0.30	)		(0.82	)		-			(0.69	)
Net asset value, end of period		$14.62			$14.66			$13.57			$13.60			$14.15			$13.58
Total Return(d):		3.35%			15.71%			2.07%			1.90%			4.20%			11.84%
Ratios/Supplemental Data:
Net assets, end of period (000)		$3,906			$ 6,195			$8,689			$12,401			$17,164			$17,425
Average net assets (000)		$5,127			$ 7,431			$10,392			$14,669			$17,140			$19,454
Ratios to average net assets(e):
Expenses after waivers and/or expense reimbursement		2.28%			2.03%			2.05%			2.02%			2.15%	(f)		2.00%
Expenses before waivers and/or expense reimbursement		2.69%	(g)		2.03%			2.05%			2.02%			2.15%	(f)		2.00%
Net investment income (loss)		0.11%			0.24%			0.46%			0.15%			-%	(f)(h)		0.16%
Portfolio turnover rate(i)		125%			103%			96%			74%			20%			87%

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

(b) 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.

(c) Less than $0.005 per share.

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

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

(f) Annualized.

(g) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(h) Less than 0.005%.

(i) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

60

Class C Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)(b)			Year Ended July 31, 2014(a)
	2018(a)			2017(a)			2016(a)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$14.65			$13.56			$13.60			$14.15			$13.57			$12.80
Income (loss) from investment operations:
Net investment income (loss)		0.04			0.03			0.06			0.02			-	(c)		0.02
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.49			2.01			0.20			0.25			0.58			1.44
Total from investment operations		0.53			2.04			0.26			0.27			0.58			1.46
Less Dividends and Distributions
Dividends from net investment income		(0.03	)		(0.07	)		(0.04	)		(0.02	)		-			(0.03	)
Distributions from net realized gains		(0.52	)		(0.88	)		(0.26	)		(0.80	)		-			(0.66	)
Total dividends and distributions		(0.55	)		(0.95	)		(0.30	)		(0.82	)		-			(0.69	)
Net asset value, end of period		$14.63			$14.65			$13.56			$13.60			$14.15			$13.57
Total Return(d):		3.53%			15.72%			2.00%			1.91%			4.27%			11.75%
Ratios/Supplemental Data:
Net assets, end of period (000)		$31,327			$37,006			$40,003			$45,046			$50,550			$49,855
Average net assets (000)		$35,327			$38,497			$42,741			$48,105			$50,000			$49,435
Ratios to average net assets(e):
Expenses after waivers and/or expense reimbursement		2.12%			2.03%			2.05%			2.02%			2.15%	(f)		2.00%
Expenses before waivers and/or expense reimbursement		2.12%	(g)		2.03%			2.05%			2.02%			2.15%	(f)		2.00%
Net investment income (loss)		0.27%			0.22%			0.45%			0.13%			(0.01)%	(f)		0.15%
Portfolio turnover rate(h)		125%			103%			96%			74%			20%			87%

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

(b) 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.

(c) Less than $0.005 per share.

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

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

(f) Annualized.

(g) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(h) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 61

Financial Highlights (continued)

Class R Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)(b)			Year Ended July 31, 2014(a)
	2018(a)			2017(a)			2016(a)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$14.91			$13.64			$13.68			$14.23			$13.63			$12.85
Income (loss) from investment operations:
Net investment income (loss)		0.09			0.10			0.12			0.09			0.02			0.09
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.50			2.18			0.20			0.25			0.58			1.44
Total from investment operations		0.59			2.28			0.32			0.34			0.60			1.53
Less Dividends and Distributions
Dividends from net investment income		(0.10	)		(0.13	)		(0.10	)		(0.09	)		-			(0.09	)
Distributions from net realized gains		(0.52	)		(0.88	)		(0.26	)		(0.80	)		-			(0.66	)
Total dividends and distributions		(0.62	)		(1.01	)		(0.36	)		(0.89	)		-			(0.75	)
Net asset value, end of period		$14.88			$14.91			$13.64			$13.68			$14.23			$13.63
Total Return(c):		3.88%			17.62%			2.51%			2.39%			4.40%			12.32%
Ratios/Supplemental Data:
Net assets, end of period (000)		$5			$7			$311			$341			$434			$415
Average net assets (000)		$6			$345			$345			$358			$422			$391
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.78%			1.54%			1.55%			1.52%			1.65%	(e)		1.50%
Expenses before waivers and/or expense reimbursement		229.27%	(f)		1.79%			1.80%			1.77%			1.90%	(e)		1.75%
Net investment income (loss)		0.60%			0.75%			0.95%			0.63%			0.48%	(e)		0.65%
Portfolio turnover rate(g)		125%			103%			96%			74%			20%			87%

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

(b) 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.

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

62

Class Z Shares
	Year Ended October 31,												Three Months Ended October 31, 2014(a)(b)			Year Ended July 31, 2014(a)
	2018(a)			2017(a)			2016(a)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$14.83			$13.72			$13.75			$14.30			$13.68			$ 12.89
Income (loss) from investment operations:
Net investment income (loss)		0.16			0.17			0.19			0.15			0.03			0.15
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.49			2.02			0.21			0.26			0.59			1.46
Total from investment operations		0.65			2.19			0.40			0.41			0.62			1.61
Less Dividends and Distributions
Dividends from net investment income		(0.16	)		(0.20	)		(0.17	)		(0.16	)		-			(0.16	)
Distributions from net realized gains		(0.52	)		(0.88	)		(0.26	)		(0.80	)		-			(0.66	)
Total dividends and distributions		(0.68	)		(1.08	)		(0.43	)		(0.96	)		-			(0.82	)
Net asset value, end of period		$14.80			$14.83			$13.72			$13.75			$14.30			$ 13.68
Total Return(c):		4.36%			16.84%			3.10%			2.89%			4.53%			12.90%
Ratios/Supplemental Data:
Net assets, end of period (000)		$5,338			$ 6,540			$6,832			$5,126			$3,694			$ 3,473
Average net assets (000)		$6,213			$ 6,611			$5,953			$4,473			$4,210			$ 3,596
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.32%			1.03%			1.05%			1.02%			1.15%	(e)		1.00%
Expenses before waivers and/or expense reimbursement		1.32%	(f)		1.03%			1.05%			1.02%			1.15%	(e)		1.00%
Net investment income (loss)		1.08%			1.22%			1.46%			1.12%			0.99%	(e)		1.16%
Portfolio turnover rate(g)		125%			103%			96%			74%			20%			87%

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

(b) 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.

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

PGIM QMA Defensive Equity Fund 63

Financial Highlights (continued)

Class R6 Shares
	Year Ended October 31, 2018			December 28, 2016(a) through October 31, 2017
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$14.85			$13.34
Income (loss) from investment operations:
Net investment income (loss)		0.19			0.14
Net realized and unrealized gain (loss) on investment and foreign currency transactions		0.49			1.37
Total from investment operations		0.68			1.51
Less Dividends and Distributions
Dividends from net investment income		(0.17	)		-
Distributions from net realized gains		(0.52	)		-
Total dividends and distributions		(0.69	)		-
Net asset value, end of period		$14.84			$14.85
Total Return(c):		4.58%			11.32%
Ratios/Supplemental Data:
Net assets, end of period (000)		$223			$114
Average net assets (000)		$132			$61
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.14%			0.88%	(e)
Expenses before waivers and/or expense reimbursement		6.93%	(f)		0.88%	(e)
Net investment income (loss)		1.27%			1.19%	(e)
Portfolio turnover rate(g)		125%			103%

(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) Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees, which are charged to their respective share class.

(g) The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

See Notes to Financial Statements.

64

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 16:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of PGIM QMA Defensive Equity Fund (formerly Prudential QMA Defensive Equity Fund) (the “Fund”), a series of Prudential Investment Portfolios 16, including the schedule of investments, as of October 31, 2018, 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 related notes (collectively, the financial statements) and the financial highlights for the years or periods indicated therein. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Emphasis of Matter

As described in Note 10 to the financial statements, the Board of Trustees along with the Shareholders of the Fund approved a reorganization whereby the Fund would be acquired by an affiliated fund. The reorganization was completed at the close of business on December 14, 2018.

Basis for Opinion

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 are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of October 31, 2018, by correspondence with the custodians, transfer agents and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more PGIM and/or Prudential Retail investment companies since 2003.

New York, New York

December 17, 2018

PGIM QMA Defensive Equity Fund 65

Federal Income Tax Information (unaudited)

We are advising you that during the fiscal year ended October 31, 2018, the Fund reported the maximum amount allowed per share, but not less than $0.21 for Class A, B, C, R, Z and R6 shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.

For the year ended October 31, 2018, 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
PGIM QMA Defensive Equity Fund		71.80	%		71.03	%

In January 2019 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 2018.

66

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS  (unaudited)

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

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 93	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (66) Board Member Portfolios Overseen: 93	Retired; Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive  Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company;  President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).	Since July 2008
Linda W. Bynoe (66) Board Member Portfolios Overseen: 93	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 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).	Since March 2005

PGIM QMA Defensive Equity Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (58) Board Member Portfolios Overseen: 92	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 (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (62) Board Member & Independent Chair Portfolios Overseen: 93	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.	Since September 2013

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Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (56) Board Member Portfolios Overseen: 92	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company); Independent Director, Kabbage, Inc. (since July 2018) (financial services).	Since September 2017
Michael S. Hyland, CFA (73) Board Member Portfolios Overseen: 93	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.	Since July 2008
Richard A. Redeker (75) Board Member Portfolios Overseen: 93	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

PGIM QMA Defensive Equity Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 92	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018

# Mr. Reid joined the Board effective as of March 1, 2018.

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (56) Board Member & President Portfolios Overseen: 93	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012

Visit our website at pgiminvestments.com

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Scott E. Benjamin (45) Board Member & Vice President Portfolios Overseen:93	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); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010
Grace C. Torres* (59) Board Member Portfolios Overseen: 92	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* 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.

PGIM 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
Raymond A. O’Hara (63) 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 June 2012
Chad A. Earnst (43) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the PGIM Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM Global Short Duration High Yield Income Fund, Inc., PGIM Short Duration High Yield Fund, Inc. and PGIM 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 September 2014
Dino Capasso (44) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Andrew R. French (56) 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 October 2006

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
Jonathan D. Shain (60) 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 May 2005
Claudia DiGiacomo (44) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
Brian D. Nee (52) Treasurer and Principal Financial and Accounting Officer	Vice President and Head of Finance of PGIM Investments LLC (since August 2015) and PGIM Global Partners (since February 2017); formerly, Vice President, Treasurer’s Department of Prudential (September 2007-August 2015).	Since July 2018
Peter Parrella (60) 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 June 2007
Lana Lomuti (51) 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 April 2014
Linda McMullin (57) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (50) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 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.

PGIM QMA Defensive Equity Fund

∎ “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 PGIM Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM Short Duration High Yield Fund, Inc., PGIM Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

Visit our website at pgiminvestments.com

Approval of Advisory Agreements (unaudited)

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of PGIM 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, met on June 7, 2018 and on June 19-21, 2018 and approved the renewal of the agreements through July 31, 2019, 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 considered information provided by PGIM Investments throughout the year at regular Board

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

PGIM QMA Defensive Equity Fund

Approval of Advisory Agreements (continued)

meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 7, 2018 and on June 19-21, 2018.

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, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and 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 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.

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The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by 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. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

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

PGIM QMA Defensive Equity Fund

Approval of Advisory Agreements (continued)

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, 2017.

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, 2017. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. 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

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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.

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

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

• The Board noted that it had approved seeking shareholder approval for a reorganization (merger) of the Fund with the PGIM QMA Large-Cap Core Equity 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 on an interim basis, pending shareholder approval and completion of the proposed reorganization of the Fund, which was anticipated for the fourth quarter of 2018.

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

*    *    *

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

PGIM 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 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 • Brian K. Reid • Grace C. Torres

OFFICERS

Stuart S. Parker, President • Scott E. Benjamin, Vice President • Brian D. Nee, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’ Hara, Chief Legal Officer • Chad A. Earnst, Chief Compliance Officer • Andrew R. French, Secretary • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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
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, PGIM 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 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

PGIM QMA DEFENSIVE EQUITY FUND

SHARE CLASS	A	B	C	R	Z	R6*
NASDAQ	PAMGX	DMGBX	PIMGX	SPMRX	PDMZX	PAMQX
CUSIP	74442X868	74442X785	74442X793	74442X819	74442X827	74442X777

*Formerly known as Class Q shares.

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, 2018 and October 31, 2017, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $118,782 and $99,784 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, 2018 and October 31, 2017: none.

(c) Tax Fees

For the fiscal years ended October 31, 2018 and October 31, 2017: none.

(d) All Other Fees

For the fiscal years ended October 31, 2018 and October 31, 2017: 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:

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

➣ Financial information systems design and implementation

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

➣ Actuarial services

➣ Internal audit outsourcing services

➣ Management functions or human resources

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

➣ Legal services and expert services unrelated to the audit

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

Pre-approval of Non-Audit Services Provided to Other Entities Within the 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 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, 2018 and October 31, 2017: 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, 2018 and October 31, 2017 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/ Andrew R. French
	Andrew R. French
	Secretary
Date:	December 18, 2018

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 18, 2018
By:	/s/ Brian D. Nee
	Brian D. Nee
	Treasurer and Principal Financial and Accounting Officer
Date:	December 18, 2018