N-CSR

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: 811-03623

The Prudential Series Fund

Exact name of registrant as specified in charter:

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Address of principal executive offices:

Deborah A. Docs

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Name and address of agent for service:

Registrant’s telephone number, including area code: 973-367-7521

Date of fiscal year end: 12/31/2008

Date of reporting period: 12/31/2008

Item 1 – Reports to Stockholders

ANNUAL REPORT December 31, 2008

The Prudential Series Fund

n Conservative Balanced Portfolio

n Diversified Bond Portfolio

n Equity Portfolio

n Flexible Managed Portfolio

n Global Portfolio

n Government Income Portfolio

n High Yield Bond Portfolio

n Jennison Portfolio

n Money Market Portfolio

n Natural Resources Portfolio

n Small Capitalization Stock Portfolio

n Stock Index Portfolio

n Value Portfolio

Please note that inside is a Prospectus Supplement dated January 21, 2009. This document is separate from and not part of the annual report.

IFS-A114446

This report is one of several that provide financial information about certain investment choices available on variable life insurance and variable annuity contracts. Based on the variable contract you own or the portfolios you invested in, you may receive additional reports that provide financial information on those investment choices. Please refer to your variable life insurance or variable annuity contract prospectus to determine which portfolios are available to you.

This report must be preceded or accompanied by the current prospectuses for the Prudential Series Fund portfolios and the applicable variable life or annuity contract. The prospectuses contain information on the investment objectives, risks, and charges and expenses of the portfolios and the contract and should be read carefully.

The contract’s prospectus contains hypothetical performance illustrations that show the effect of various assumptions regarding the cost of insurance protection. You may also obtain a personalized illustration of historical performance that reflects the cost of your contract’s insurance protection.

A description of the Fund’s proxy voting policies and procedures is available, without charge, upon request. Owners of variable annuity contracts should call 888-778-2888 and owners of variable life insurance contracts should call 800-778-2255 to obtain descriptions of the Fund’s proxy voting policies and procedures. The description is also available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. 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 website of the Commission at www.sec.gov and on the Fund’s website.

The Fund files with the Commission a complete listing of portfolio holdings as of its first and third quarter-end on Form N-Q. Form N-Q is available on the Commission’s website at www.sec.gov or by visiting the Commission’s Public Reference Room. For more information on the Commission’s Public Reference Room, please visit the Commission’s website or call 1-800-SEC-0330. Form N-Q is also available on the Fund’s website at www.prudential.com or by calling the telephone numbers referenced above.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge upon request by calling 888-778-2888.

This report may include financial information pertaining to certain portfolios that are not available through the variable life insurance policy or variable annuity contract that you have chosen. Please refer to your variable life insurance or variable annuity prospectus to determine which portfolios are available to you.

The Prudential Series Fund Letter to Contract Owners Annual Report December 31, 2008

n DEAR CONTRACT OWNER

Our objective at Prudential is very simple — we strive to help our clients achieve and maintain financial success. Our Prudential Series Fund annual report details this commitment to you as we focus on ways to help you with your financial security. We hope you find it both informative and useful.

While 2008 presented unprecedented challenges to investors, it also proved that Prudential’s strategies around growing and protecting our clients’ wealth have never been more important.

Your financial professional is the best resource to help you understand how market changes affect your investments. Together, you can develop a diversified mix of investments that works best for you and review it periodically to ensure your financial objectives remain on target.

Thank you for selecting Prudential as one of your financial partners. We value your trust and appreciate the opportunity to help you reach your financial goals.

Sincerely,

Steve Pelletier

President,

The Prudential Series Fund January 30, 2009

PRESIDENT

STEVE PELLETIER

The Prudential Series Fund, Conservative Balanced Portfolio Subadvised by:  Prudential Investment Management, Inc., Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-21.41	%	0.58	%	1.47	%
S&P 500 Index	-36.99		-2.19		-1.38
Blended Index	-18.23		1.24		2.15

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Conservative Balanced Portfolio underperformed the blended index (the Index).

Both fixed income and equity were slightly overweight for much of the year. However, in the risk-averse investment environment, the ultra-safe U.S. Treasury securities market outperformed all other U.S. fixed income markets. An underweight position in U.S. Treasury securities and overweight positions in credit-sensitive sectors, such as investment grade corporate bonds, primarily drove the Portfolio’s underperformance.

The equity portion of the Portfolio closely matched its benchmark for the year. Early in 2008 an overweight in equities (versus the guideline weight of 50%) slightly detracted from performance relative to the Index. Equities declined in all sectors and styles for the year. By the end of the third quarter, equities had fallen to very near their guideline level.

The Portfolio held overweight positions in fixed income for most of 2008. Some of the Portfolio’s cash holdings were used to fund the fixed income component, which did not reward relative performance during the year. The Portfolio’s guideline weight for cash is 10%, but it varied between 1% and 3% in 2008.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of S&P 500 Index (50%), Barclays Capital Aggregate Bond Index (40%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and 3-Month T-Bill Index (10%), an unmanaged market value-weighted index of investment grade fixed rate public obligations of the U.S. Treasury with maturities of 3 months, excluding zero coupon strips. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Diversified Bond Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-3.46	%	3.16	%	4.59	%
Barclays Capital U.S. Aggregate Bond Index	5.24		4.65		5.63

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Diversified Bond Portfolio posted a decline that underperformed its benchmark index, which posted a gain.

A burst housing bubble in the United States led to a collapse in the subprime mortgage market that escalated into a full-scale credit crisis in which financial institutions continued to take massive write-downs and losses in 2008. The U.S. economy, mired in one of its worst recessions since the Great Depression, shed some 2.5 million jobs in 2008. The Federal Reserve (the Fed) tried to boost growth by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December. The Fed and the U.S. Department of the Treasury employed unconventional measures to encourage commercial banks and finance firms to lend, yet it remained difficult for businesses and individuals to borrow money.

Preservation of capital became a top priority of investors who fled to super-safe U.S. Treasury securities, enabling that market to post a gain for 2008 that led other U.S. bond markets. A key reason the Portfolio trailed its benchmark index was its investment in the Dryden Core Investment Fund—Short Term Bond Series, which declined in value due to exposure to securities backed by subprime home equity loans. Another negative for the Portfolio was its exposures to high yield corporate (“junk”) bonds and bank loans, both of which ended 2008 in the red as these riskier assets fell out of favor. (Neither is in the benchmark index, which is made up of investment-grade debt securities.) Among investment-grade bond markets, the Portfolio had larger exposures than its benchmark index to commercial mortgage-backed securities and asset-backed securities, particularly those backed by home equity loans. This strategy did not work well as both posted declines for 2008. Another strategy that did not work well was security selection within the high-grade corporate bond market. The Portfolio emphasized lower investment-grade bonds, which underperformed higher quality bonds.

Meanwhile, the Portfolio benefited from other strategies such as its approach to managing duration, which measures a fund’s sensitivity to changes in interest rates. A long duration increases responsiveness to changes in rates, while a short duration lessens responsiveness. The Portfolio’s duration in the Treasury market was slightly longer than that of its benchmark index in November and December. During this time, the Fed cut rates and announced it was considering purchasing longer-term Treasurys, which might help reduce long-term rates. Yields on Treasurys declined in anticipation, pushing their prices higher, as bond prices move inversely to yields. Having a slightly longer duration helped the Portfolio derive greater benefit from the Treasury market rally.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital U.S. Aggregate Bond Index is an unmanaged index comprised of more than 5,000 government and corporate bonds. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Equity Portfolio Subadvised by:   ClearBridge Advisors, LLC, Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year		Since Inception
Portfolio: Class I	-38.16	%	-1.39	%	-0.16	%	N/A
Portfolio: Class II	-38.41		-1.77		N/A		-1.81	%
S&P 500 Index	-36.99		-2.19		-1.38		-2.31
Russell 1000® Index	-37.60		-2.04		-1.09		-1.96

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS¹

Portfolio (Class I) inception: 5/13/1983. Portfolio (Class II) inception: 5/4/1999. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class II).

The Russell 1000^® Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Equity Portfolio slightly underperformed its benchmark index, the Russell 1000^® Index.

The Portfolio is co-managed by Jennison Associates and ClearBridge Advisors. Style and risk factors contributed to the Portfolio’s underperformance during 2008. An overexposure to factors such as earnings variation, a multiple that measures a company’s historical earnings variability and cash flow fluctuations, hurt performance.

The Portfolio’s exposure to leveraged stocks (companies with a higher debt-to-capital ratio) detracted from performance. In addition, an underexposure to earnings yield, or stocks with low price-to-earnings ratios (P/E), further hindered performance.

Stock selection in the banking industry helped relative performance, as did some stocks in the healthcare and technology sectors. Both subadvisers contributed positively in terms of stock selection.

Overall, sector selection had negligible effects on performance during 2008.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15%, respectively, of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000^® Index is a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Flexible Managed Portfolio Subadvised by:  Prudential Investment Management, Inc., Quantitative Management Associates, LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-24.82	%	0.68	%	1.13	%
S&P 500 Index	-36.99		-2.19		-1.38
Blended Index	-22.20		0.63		1.56

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Flexible Managed Portfolio underperformed the blended index.

The fixed income portion of the Portfolio primarily drove the Portfolio’s overall subpar performance. Underweight holdings in U.S. Treasury securities, which outperformed bonds (as measured by Barclays Capital Aggregate Index), hindered the Portfolio’s performance.

The Portfolio had an overweight position in equities (versus the guideline weight of 60%), which slightly hurt performance relative to the Index. The subadvisers began 2008 with an overweight position in equities. However, by the end of the third quarter, equities had fallen to very near their guideline level.

The fixed income portion of the Portfolio hovered quite close to its guideline weight through most of the year (the cash portion of the Portfolio varied between nearly 0.0% and 4.0%). Asset class weights represented only a minor factor in determining relative performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of S&P 500 Index (60%), Barclays Capital Aggregate Bond Index (35%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and 3-Month T-Bill Index (5%), an unmanaged market value-weighted index of investment grade fixed rate public obligations of the U.S. Treasury with maturities of 3 months, excluding zero coupon strips. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Global Portfolio Subadvised by:  LSV Asset Management, Marsico Capital Management, LLC, Quantitative Management Associates LLC, T. Rowe Price
Associates, Inc., William Blair & Company LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-42.92	%	-0.82	%	-0.32	%
MSCI World Index (GD)	-40.33		0.00		-0.19

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 9/19/1988. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Global Portfolio underperformed its benchmark, the MSCI World Index (GD) (the Index).

This multi-managed portfolio seeks to outperform the Index. The Portfolio is co-managed by four specialist subadvisers: Marsico Capital Management manages large-cap domestic growth stocks; T. Rowe Price manages large-cap domestic value stocks; William Blair & Company manages international growth stocks; and LSV Asset Management manages international value stocks. William Blair has the flexibility to invest in emerging markets stocks, which are not part of the benchmark. Usually, this portfolio maintains a modest exposure to the sector, which may detract from performance during periods characterized by a “flight to quality” when investors move money out of equities and into other investments such as government securities and money market funds.

During 2008, stock selection primarily drove the Portfolio’s underperformance during the period. In the U.S., the Portfolio was underweight compared with the Index in some of the top-performing companies in the energy sector. Stock selection in the utilities and consumer staples sectors, particularly by growth-oriented managers Marsico Capital Management, LLC and William Blair & Company LLC, detracted from results. From a country standpoint, exposure to emerging markets, specifically China, Brazil, and Russia detracted, as did underweight positions in Japan and the United States. An overweight position in Switzerland and an underweight position in Australia also helped performance. All of these countries experienced significant declines in the Index at the end of the reporting period.

Sector exposures detracted from results relative to the Index. For the year, all sectors in the Index posted declines. Underweight positions in defensive sectors (companies that tend to remain more stable throughout the business cycle), including healthcare, consumer staples, and utilities, negatively affected performance. Conversely, an underweight to financial services, which declined the most in the Index, was rewarded.

The fairly modest cash allocation held in the Portfolio for transactional purposes had a positive impact on performance due to the sharp sell-off in equity markets.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

MSCI World Index (GD) - The Morgan Stanley Capital International World Index is an unmanaged capitalization weighted index which includes the equity markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, United Kingdom and United States. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Government Income Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	4.30	%	3.87	%	5.11	%
Barclays Capital Government Bond Index	12.39		6.06		6.16

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/1/1989. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Government Income Portfolio posted a positive total return that was below its benchmark index.

A burst housing bubble in the United States led to a collapse in the subprime mortgage market that escalated into a credit crisis in which financial institutions around the world continued to take massive write-downs and losses during 2008. The U.S. economy, mired in one of its worst recessions since the Great Depression, shed some 2.5 million jobs in 2008. The Federal Reserve (the Fed) tried to boost growth by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December. The Fed and the U.S. Department of the Treasury employed unconventional measures to encourage commercial banks and finance firms to lend, yet it remained difficult for businesses and individuals to borrow money.

Preservation of capital became a top priority for investors who fled to super-safe U.S. Treasury securities, enabling that market to post a double-digit gain in 2008 that outperformed other U.S. bond markets. The Portfolio invested in a diverse group of debt securities that included Treasurys, federal agency securities, mortgage-backed securities, commercial mortgage-backed securities and, to a lesser extent, corporate bonds and asset-backed securities. The latter are backed by pools of consumer loans such as credit cards and home equity loans that are packaged into securities and sold to investors. A key reason the Portfolio trailed its benchmark index was its investment in the Dryden Core Investment Fund—Short Term Bond Series, which declined in value because it held securities backed by subprime home equity loans. The Portfolio also had a larger exposure than its benchmark index to mortgage-backed securities. This hurt its relative performance as that market underperformed the Treasury market. Poor security selection within the mortgage-backed market also detracted from the Portfolio’s performance versus its benchmark index.

On a positive note, favorable security selection within the commercial mortgage-backed market aided the Portfolio’s performance versus its benchmark index. The Portfolio also benefited from its strategy for managing duration, which measures a fund’s sensitivity to changes in interest rates. A long duration increases responsiveness to changes in rates, while a short duration lessens responsiveness. The Portfolio’s duration in the U.S. Treasury market was slightly longer than that of its benchmark index in November and December. During this time, the Fed cut rates and announced it was considering purchasing longer-term Treasurys, which might reduce long-term rates. In anticipation, yields on Treasurys declined, pushing their prices higher, as bond prices move inversely to yields. Having a slightly longer duration helped the Portfolio derive greater benefit from the Treasury market rally.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital Government Bond Index is a weighted index comprised of securities issued or backed by the U.S. Government, its agencies and instrumentalities with a remaining maturity of one to thirty years. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, High Yield Bond Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-22.28	%	0.06	%	2.02	%
Barclays Capital U.S. Corp. High Yield Bond Index	-26.16		-0.80		2.17
Barclays Capital U.S. High Yield 2% Issuer Capped Index	-25.88		-0.84		2.28
Barclays Capital U.S. High Yield 1% Issuer Capped Index	-26.57		-1.04		2.25

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 2/23/1987. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the High Yield Bond Portfolio declined less than its benchmark indexes.

A burst housing bubble in the United States led to a collapse in the subprime mortgage market that escalated into a credit crisis in which financial institutions around the world continued to take massive write-downs and losses during 2008. The U.S. economy, mired in one of its worst recessions since the Great Depression, shed some 2.5 million jobs in 2008. The Federal Reserve (the Fed) tried to boost growth by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December. The Fed and the U.S. Department of the Treasury employed unconventional measures to encourage commercial banks and finance firms to lend, yet it remained difficult for businesses and individuals to borrow money.

High yield corporate bonds, which are rated below investment grade, are commonly called “junk” bonds. The worsening credit crisis led investors to avoid risky classes of assets such as high yield bonds. There was concern that an increasing number of companies will be unable to make interest and principal payments on their bonds amid the weak economic conditions. Consequently, the high yield market posted a large decline for the year, even though high yield bond prices generally gained in December after the Fed cut rates and stated its intention to use all available tools to lift the U.S. economy out of recession.

The Portfolio declined less than its benchmark index because its allocation to industries within the high yield market generally worked well and because of its favorable security selection within industries such as technology, chemicals, and capital goods. For example, the Portfolio had a larger exposure than its benchmark index to healthcare, an industry that posted one of the smallest annual declines in the high yield market. The Portfolio’s relative performance also benefited because it had smaller exposures than the benchmark index to the media & entertainment and auto industries. The former was negatively affected by declining advertising sales and a widespread shift to Internet-based media options. The latter was hurt by steep declines in auto sales and the high costs of auto companies such as their retirement healthcare plans.

That said, bonds of an auto financing firm soared in value because the company was granted bank holding status that enabled it to qualify for assistance from the federal government. Having a smaller exposure to these bonds than its benchmark index was one of the largest detractors from the Portfolio’s relative performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital U.S. Corporate High Yield Index is an unmanaged index of fixed-rate, non-investment-grade debt securities with at least one year remaining to maturity. It gives a broad look at how high yield (“junk”) bonds have performed. Barclays Capital U.S. Corporate High Yield 1% and 2% Issuer Capped Indexes cover the universe of U.S. dollar denominated, non-convertible, fixed-rate, non-investment-grade debt. Issuers are capped at 1% and 2% of the Index, respectively. Index holdings must have at least one year to final maturity, at least $150 million par amount outstanding, and be publicly issued with a rating of Ba1 or lower. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Jennison Portfolio Subadvised by:  Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year		Since Inception
Portfolio: Class I	-37.28	%	-2.13	%	-2.51	%	N/A
Portfolio: Class II	-37.55		-2.54		N/A		-7.56	%
S&P 500 Index	-36.99		-2.19		-1.38		-3.08
Russell 1000® Growth Index	-38.44		-3.42		-4.27		-7.29

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS¹

Portfolio (Class I) inception: 4/25/1995. Portfolio (Class II) inception: 2/10/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class II).

The Russell 1000^® Growth Index is a trademark/service of the Frank Russell Company. Russell^® is the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Jennison Portfolio outperformed its benchmark index, the Russell 1000^® Growth Index.

The greatest contributor to relative performance was stock selection in the healthcare sector. One example was a manufacturer of drugs for HIV treatments. The solid results seemed to reinforce the idea held by many investors that the company will likely benefit in a jittery market. It also received an additional boost when analysts upgraded the stock and increased their earnings per share and revenue projections for the company. On a negative note, stock selection within the technology sector hindered performance. For example, a major producer of graphic design software fell on concerns that the deteriorating macroeconomic environment would likely lead to further cuts in corporate discretionary spending on technology, hurting the company despite its operating efficiency and strong expense control.

A conservative risk posture mitigated negative returns. More recently, the subadviser has been finding opportunities in more conservative stocks, as defined by their beta factors. (Beta measures a stock’s volatility to the degree in which its price fluctuates in relation to the overall market.) In 2008, a year that saw large negative returns across the board, lower beta stocks generally declined less than more aggressive stocks. Consequently, the manager’s overexposure to more conservative stocks benefited the Portfolio.

Sector allocations contributed to positive relative performance. Overweight positions in the healthcare and technology sectors contributed positively to relative performance for the year; however, an underweight in consumer services pared gains made through sector positioning. Sector allocations are a residual of the manager’s bottom-up stock selection.

Risk factors detracted from performance. Returns for the year were hurt by the Portfolio’s overexposure to momentum stocks (stocks in companies experiencing recent price strength). Additionally, an overweight position in larger capitalization stocks (compared to the benchmark) detracted from results. On the positive side, the manager’s underexposure to leveraged stocks (stocks in companies with above-market debt-to-asset ratios) helped performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15%, respectively, of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000 Growth Index is a market cap-weighted index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Money Market Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	7-Day* Current Net Yield		1-Year		5-Year		10-Year
Portfolio	1.32	%	2.65	%	3.27	%	3.38	%
Lipper (VIP) Money Market Funds Avg.	N/A		2.23		3.00		3.15

Past performance does not guarantee future returns. 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.

7-DAY CURRENT NET YIELD*

Portfolio inception: 5/13/1983. The yield quotation more closely reflects the current earnings of the Portfolio than the total return quotation. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Money Market Portfolio had a total return of 2.65%, which was above the average of its peer group, the Lipper (VIP) Money Market Funds Average. On December 30, 2008, the Portfolio’s 7-day current net yield was 1.32%, down from 4.81% on December 25, 2007. The yield more closely reflects the current earnings of the Portfolio than the total return.

The year was marked by severe stress in financial systems around the world, increasing aversion to risky investments, and sharply declining interest rates in the United States. A bursting housing bubble in the United States led to the collapse of the subprime mortgage market. The resulting large write-downs and losses escalated into a full-scale credit crisis that affected commercial banks and other financial institutions. The magnitude of the financial crisis required aggressive and inventive measures by the Federal Reserve (Fed) and the U.S. Department of the Treasury to ease stress in the credit markets. The Fed also tried to stimulate growth in the economy by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December.

Due to the uncertainty in the credit markets, the Portfolio employed a conservative strategy in which it invested primarily in money market securities of highly rated corporate issuers, highly rated banks, and government agencies. Additionally, the Portfolio also invested in overnight repurchase agreements, contracts in which a seller of securities agrees to buy them back the next day at a specified price. This prudent approach resulted in a high level of liquidity in the Portfolio and positioned the Portfolio’s weighted average maturity (WAM) shorter than that of the average comparable fund for much of the year. (WAM measures a fund’s sensitivity to changes in the level of interest rates. It considers the maturity and quantity of each security held in a portfolio.)

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

* Source: iMoneyNet, Inc. based on 335 funds in the iMoneyNet Prime Retail universe. Weekly 7-day current net yields of the Money Market Portfolio and the iMoneyNet Prime Retail universe as of 12/30/2008.

The Lipper Variable Insurance Products (VIP) Funds Averages are calculated by Lipper Analytical Services, Inc., and reflect the investment return of certain portfolios underlying variable life and annuity products. These returns are net of investment fees and fund expenses, but not product charges. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index or average. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Natural Resources Portfolio Subadvised by:  Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year		Since Inception
Portfolio: Class I	-53.00	%	10.70	%	17.38	%	N/A
Portfolio: Class II	-53.19		N/A		N/A		6.65	%
S&P 500 Index	-36.99		-2.19		-1.38		-4.61
Lipper (VIP) Natural Resources Funds Avg.	-47.18		7.04		11.57		4.05
Lipper (VUF) Natural Resources Funds Index	-50.13		6.07		N/A		3.83

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS¹

Portfolio (Class I) inception: 5/1/1988. Portfolio (Class II) inception: 4/28/2005. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class II). Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Natural Resources Portfolio underperformed its benchmark, the Lipper (VUF) Natural Resources Funds Index.

The metals and mining subsector drove performance during the year while stock selection of oil and gas exploration and production companies was weak. The most significant contributors to performance were gold mining companies. Oil and gas refiners were among the most significant detractors from performance as record-high commodity prices earlier in the year led to lower margins. Energy service holdings also underperformed as the impact of the global economic slowdown on oil and gas exploration and production led many of these holdings to report weaker-than-expected financial results.

Copper underperformed given the pronounced decline in the commodities market and subsequent fall in metal prices due to fears of a global recession. The Portfolio continued to emphasize fiscally-conservative exploration and production companies that are growing production and reserves by successfully exploiting unconventional sources of oil or gas and as such, offering more leverage to historically high oil and/or natural gas prices.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15% respectively of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. The Lipper Variable Insurance Products (VIP) Funds Averages are calculated by Lipper Analytical Services, Inc., and reflect the investment return of certain portfolios underlying variable life and annuity products. The Lipper Variable Underlying Funds (VUF) Natural Resources Funds Index consists of an equal dollar-weighted composite of the 10 largest funds in the Lipper VUF Natural Resources Fund classification. The index is rebalanced quarterly. Natural Resources Funds are deemed as funds that invest primarily in the equity securities of domestic and foreign companies engaged in natural resources. These returns are net of investment fees and fund expenses, but not product charges. Investors cannot invest directly in a market index or average. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Small Capitalization Stock Portfolio Subadvised by:  Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-31.04	%	0.59	%	4.98	%
S&P SmallCap 600 Index	-31.07		0.88		5.18

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 4/25/1995. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Small Capitalization Stock Portfolio performed in line with its benchmark, the S&P SmallCap 600 Index (the Index).

Quantitative Management Associates LLC (QMA) subadvises the Portfolio. Its investment strategy entails replication of the holdings and weights of the Index, which holds small-cap stocks. The managers accomplish this performance by using quantitative techniques. The Portfolio is somewhat different from the typical index fund because the managers have the flexibility to build positions slowly when the composition of the Index changes.

The Portfolio met its goal of replicating the returns of the Index. The Index experienced a large decline, which was in line with the performance of small cap stocks in general. Indeed, 2008 was a year of historically poor returns for nearly every category of investable assets. Events related to the credit crisis and the economy pressured all equity sectors and indexes downward. There were no substantial differences in positions, weights, or performance between the Portfolio and the Index.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P SmallCap 600 Index is an unmanaged index representing the aggregate market value of the common equity of 600 small-company stocks. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Stock Index Portfolio Subadvised by:  Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	-36.94	%	-2.43	%	-1.61	%
S&P 500 Index	-36.99		-2.19		-1.38

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 10/19/1987. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Stock Index Portfolio performed in line with the S&P 500 Index, its benchmark index (the Index).

The Portfolio is subadvised by Quantitative Management Associates LLC (QMA). This is an index portfolio based on the S&P 500. The managers approximate the holdings and weights of the Index using a purely quantitative approach. For compliance purposes, the Portfolio cannot hold Prudential stock, which will result in a slight difference in weights.

The large decline of the Portfolio was in line with the performance of U.S. equities in general. Indeed, 2008 was a year of historically poor returns for nearly every category of investable assets. The managers matched the performance of the Index, thus meeting their goal of reproducing its performance. There were no substantial differences in positions, weights, or performance between the Portfolio and the Index.

All sectors in the Index were down significantly for the year. The distressed financial sector, reeling from the credit crisis, was the worst performing sector during the year. Materials and energy stocks posted significant declines as global construction demand collapsed, especially in China. Global demand for energy resources deteriorated, and the price of crude oil plunged from its record high in July to a low of under $40 late in the year, pushing the energy sector down.

Industrials, stalled by the credit crisis and global slowdown, declined. Demand for computers and software slumped as information technology fell. Weak consumer spending drove the consumer discretionary sector deep into negative territory. The smallest declines were in two sectors of defensive stocks (companies that tend to remain more stable throughout the business cycle): healthcare and consumer staples. Telecommunications and utilities also fell sharply.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Value Portfolio Subadvised by:  Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year		Since Inception
Portfolio: Class I	-42.29	%	-0.63	%	2.12	%	N/A
Portfolio: Class II	-42.56		-1.03		N/A		-1.37	%
S&P 500 Index	-36.99		-2.19		-1.38		-2.36
Russell 1000® Value Index	-36.85		-0.79		1.36		0.12

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS¹

Portfolio (Class I) inception: 2/19/1988. Portfolio (Class II) inception: 5/14/2001. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class II). The Russell 1000^® Value Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Value Portfolio underperformed its benchmark index (the Index, the Russell 1000^® Value Index).

Energy holdings were the primary cause of underperformance relative to the Index. Telecommunications, due to a couple individual stock disappointments, was also a meaningful source of relative loss. Although the Portfolio trailed the Index in financials, a persistent underweight in the sector benefited relative return and greatly mitigated the performance lag. The consumer discretionary sector detracted from relative performance; however, individual holdings had mixed results.

An aggressive risk posture hurt performance. In 2008, a year that saw large negative returns across the board, stocks with higher beta factors generally declined more than less aggressive stocks. (Beta measures a stock’s volatility to the degree in which its price fluctuates in relation to the overall market). Consequently, the subadviser’s higher beta positioning detracted from returns.

Overall, risk factors also hurt relative performance. The subadviser’s overexposure to leveraged stocks (stocks in companies with above-market debt-to-asset ratios) and high earnings variability (earnings variation, which measures the volatility in a company’s earnings and cash flow) detracted from returns.

On the positive side, security selection was strong in healthcare. One of the largest single contributors was a healthcare company that dispenses drugs to nursing homes and other long-term care facilities. The Portfolio also outperformed the Index in consumer staples, industrials, and information technology. A smaller exposure to materials added to relative performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15%, respectively, of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000 Value Index is a market cap-weighted index that measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund Presentation of Portfolio Holdings — unaudited December 31, 2008

Conservative Balanced
Five Largest Holdings    (% of Net Assets)
Federal National Mortgage Association, 5.00%, TBA 30 YR	2.6%
Exxon Mobil Corp.	2.4%
Federal National Mortgage Association, 6.00%, TBA 30 YR	2.3%
Federal Home Loan Mortgage Corp., 5.50%, TBA 30 YR	1.9%
Procter & Gamble Co.	1.1%

Diversified Bond
Allocation     (% of Net Assets)
U.S. Government Mortgage- Backed Securities	45.8%
Corporate Bonds	30.9%
Commercial Mortgage-Backed Securities	7.8%
U.S. Government Treasury Securities	4.9%
Bank Loans	3.4%

Equity
Five Largest Holdings     (% of Net Assets)
Wal-Mart Stores, Inc.	2.7%
QUALCOMM, Inc.	2.5%
Cisco Systems, Inc.	2.0%
Gilead Sciences, Inc.	2.0%
PepsiCo, Inc.	2.0%

Flexible Managed
Five Largest Holdings     (% of Net Assets)
Exxon Mobil Corp.	2.5%
Federal National Mortgage Assn., 5.00%, TBA 30 YR	1.9%
Federal Home Loam Mortgage Corp., 5.50%, TBA 30 YR	1.7%
Federal National Mortgage Assn., 6.00%, 1/01/35	1.6%
Microsoft Corp.	1.4%

Global
Top Five Countries     (% of Net Assets)
United States	47.9%
United Kingdom	9.7%
Japan	8.1%
Switzerland	5.6%
France	4.8%

Government Income
Allocation     (% of Net Assets)
Mortgage Backed Securities	48.8%
U.S. Government Agency Obligations	14.8%
U.S. Government Treasury Securities	14.3%
Commercial Mortgage Backed Securities	6.2%
Collateralized Mortgage Obligations	6.0%

High Yield Bond
Allocation     (% of Net Assets)
Corporate Bonds	89.6%
Common Stock	0.1%
Preferred Stock	0.0%	*
Warrants	0.0%	*
* Less than 0.05%

Jennison
Five Largest Holdings     (% of Net Assets)
Gilead Sciences, Inc.	6.7%
Google, Inc. (Class A Stock)	4.5%
Genentech, Inc.	4.3%
Wal-Mart Stores, Inc.	3.8%
QUALCOMM, Inc.	3.8%

Natural Resources
Five Largest Holdings     (% of Net Assets)
Southwestern Energy Co.	3.1%
Kinross Gold Corp.	2.8%
Occidental Petroleum Corp.	2.5%
Devon Energy Corp.	2.2%
Eldorado Gold Corp.	2.2%

Small Capitalization Stock
Five Largest Holdings     (% of Net Assets)
Piedmont Natural Gas Co., Inc.	0.7%
Itron, Inc.	0.7%
Atmos Energy Corp.	0.7%
Senior Housing Properties Trust	0.6%
Watson Wyatt Worldwide, Inc. (Class A Stock)	0.6%

Stock Index
Five Largest Holdings     (% of Net Assets)
Exxon Mobil Corp	5.1%
Procter & Gamble Co	2.3%
General Electric Co.	2.1%
AT&T, Inc.	2.1%
Johnson & Johnson	2.1%

Value
Five Largest Holdings     (% of Net Assets)
Symantec Corp.	3.1%
Comcast Corp. (Class A Stock)	3.1%
CA, Inc.	3.1%
IAC/InterActiveCorp.	2.9%
H&R Block, Inc.	2.8%

For a complete list of holdings, please refer to the Schedule of Investments section of this report. Holdings reflect only long-term investments. Holdings/Issues/Industries/Sectors are subject to change.

The Prudential Series Fund Fees and Expenses — unaudited December 31, 2008

As a contract owner investing in Portfolios of the Fund through a variable annuity or variable life contract, you incur ongoing costs, including management fees, and other Portfolio expenses. 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 investment options. This example does not reflect fees and charges under your variable annuity or variable life contract. If contract charges were included, the costs shown below would be higher. Please consult the prospectus for your contract for more information about contract fees and charges.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2008 through December 31, 2008.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the Portfolio expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six-Month Period” to estimate the Portfolio expenses you paid on your account during this period. As noted above, the table does not reflect variable contract fees and charges.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio and other investment options. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other investment options.

Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any contract fees and charges, such as sales charges (loads), insurance charges or administrative charges. Therefore the second line of the table is useful to compare ongoing investment option costs only, and will not help you determine the relative total costs of owning different contracts. In addition, if these contract fee and charges were included, your costs would have been higher.

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio based on the Six-Month period		Expenses Paid During the Six-Month period
Conservative Balanced (Class I)	Actual	$	1,000.00	$	842.10	0.60	%	$	2.78
	Hypothetical	$	1,000.00	$	1,022.17	0.60	%	$	3.05
Diversified Bond (Class I)	Actual	$	1,000.00	$	961.20	0.45	%	$	2.22
	Hypothetical	$	1,000.00	$	1,022.87	0.45	%	$	2.29
Equity (Class I)	Actual	$	1,000.00	$	673.00	0.49	%	$	2.06
	Hypothetical	$	1,000.00	$	1,022.67	0.49	%	$	2.49
Equity (Class II)	Actual	$	1,000.00	$	671.70	0.89	%	$	3.74
	Hypothetical	$	1,000.00	$	1,020.66	0.89	%	$	4.52
Flexible Managed (Class I)	Actual	$	1,000.00	$	814.50	0.64	%	$	2.92
	Hypothetical	$	1,000.00	$	1,021.92	0.64	%	$	3.25
Global (Class I)	Actual	$	1,000.00	$	648.30	0.87	%	$	3.60
	Hypothetical	$	1,000.00	$	1,020.76	0.87	%	$	4.42
Government Income (Class I)	Actual	$	1,000.00	$	1,033.50	0.50	%	$	2.56
	Hypothetical	$	1,000.00	$	1,022.62	0.50	%	$	2.54
High Yield Bond (Class I)	Actual	$	1,000.00	$	780.80	0.58	%	$	2.60
	Hypothetical	$	1,000.00	$	1,022.22	0.58	%	$	2.95
Jennison (Class I)	Actual	$	1,000.00	$	689.70	0.63	%	$	2.68
	Hypothetical	$	1,000.00	$	1,021.97	0.63	%	$	3.20
Jennison (Class II)	Actual	$	1,000.00	$	688.20	1.03	%	$	4.37
	Hypothetical	$	1,000.00	$	1,019.96	1.03	%	$	5.23
Money Market (Class I)	Actual	$	1,000.00	$	1,011.00	0.43	%	$	2.17
	Hypothetical	$	1,000.00	$	1,022.97	0.43	%	$	2.19

The Prudential Series Fund Fees and Expenses — unaudited (continued) December 31, 2008

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio based on the Six-Month period		Expenses Paid During the Six-Month period
Natural Resources (Class I)	Actual	$	1,000.00	$	389.30	0.53	%	$	1.85
	Hypothetical	$	1,000.00	$	1,022.47	0.53	%	$	2.69
Natural Resources (Class II)	Actual	$	1,000.00	$	388.60	0.93	%	$	3.25
	Hypothetical	$	1,000.00	$	1,020.46	0.93	%	$	4.72
Small Capitalization Stock (Class I)	Actual	$	1,000.00	$	742.10	0.47	%	$	2.06
	Hypothetical	$	1,000.00	$	1,022.77	0.47	%	$	2.39
Stock Index (Class I)	Actual	$	1,000.00	$	716.40	0.37	%	$	1.60
	Hypothetical	$	1,000.00	$	1,023.28	0.37	%	$	1.88
Value (Class I)	Actual	$	1,000.00	$	623.10	0.43	%	$	1.75
	Hypothetical	$	1,000.00	$	1,022.97	0.43	%	$	2.19
Value (Class II)	Actual	$	1,000.00	$	621.40	0.83	%	$	3.38
	Hypothetical	$	1,000.00	$	1,020.96	0.83	%	$	4.22

*Portfolio 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 December 31, 2008, and divided by the 366 days in the Portfolio's fiscal year ended December 31, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.

	CONSERVATIVE BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 91.8%
COMMON STOCKS — 45.7%	Shares	Value (Note 2)
Aerospace & Defense — 1.3%
Boeing Co.	84,200	$	3,592,814
General Dynamics Corp.	45,200		2,603,068
Goodrich Corp.	15,600		577,512
Honeywell International, Inc.	84,712		2,781,095
L-3 Communications Holdings, Inc.	13,500		996,030
Lockheed Martin Corp.	37,900		3,186,632
Northrop Grumman Corp.	39,462		1,777,368
Precision Castparts Corp.	15,500		921,940
Raytheon Co.	48,500		2,475,440
Rockwell Collins, Inc.	17,300		676,257
United Technologies Corp.	109,700		5,879,920
			25,468,076
Air Freight & Logistics — 0.5%
C.H. Robinson Worldwide, Inc.	19,300		1,062,079
Expeditors International Washington, Inc.(b)	24,400		811,788
FedEx Corp.	35,400		2,270,910
United Parcel Service, Inc. (Class B Stock)	112,700		6,216,532
			10,361,309
Airlines
Southwest Airlines Co.	83,500		719,770
Auto Components — 0.1%
Goodyear Tire & Rubber Co. (The)(a)	23,400		139,698
Johnson Controls, Inc.	70,300		1,276,648
			1,416,346
Automobiles — 0.1%
Ford Motor Co.(a)(b)	257,185		588,954
General Motors Corp.(b)	73,491		235,171
Harley-Davidson, Inc.(b)	26,000		441,220
			1,265,345
Beverages — 1.2%
Brown-Forman Corp. (Class B Stock)	11,000		566,390
Coca-Cola Co. (The)	226,100		10,235,547
Coca-Cola Enterprises, Inc.	40,200		483,606
Constellation Brands, Inc.(a)	22,000		346,940
Dr Pepper Snapple Group, Inc.(a)	28,900		469,625
Molson Coors Brewing Co. (Class B Stock)	17,100		836,532
Pepsi Bottling Group, Inc.	17,700		398,427
PepsiCo, Inc.	178,030		9,750,703
			23,087,770
Biotechnology — 1.0%
Amgen, Inc.(a)(b)	120,360		6,950,790
Biogen Idec, Inc.(a)	32,990		1,571,314
Celgene Corp.(a)	51,700		2,857,976
Cephalon, Inc.(a)(b)	7,700		593,208
Genzyme Corp.(a)	30,600		2,030,922
Gilead Sciences, Inc.(a)	104,600		5,349,244
			19,353,454
Building Products
Masco Corp.	43,100		479,703

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Capital Markets — 1.1%
American Capital Ltd.(b)	45,100	$	146,124
Ameriprise Financial, Inc.	27,820		649,875
Bank of New York Mellon Corp. (The)	130,358		3,693,042
Charles Schwab Corp. (The)	106,150		1,716,446
E*Trade Financial Corp.(a)(b)	104,600		120,290
Federated Investors, Inc. (Class B Stock)	9,000		152,640
Franklin Resources, Inc.	17,300		1,103,394
Goldman Sachs Group, Inc. (The)	50,400		4,253,256
Invesco Ltd. (Bermuda)	43,200		623,808
Janus Capital Group, Inc.	18,600		149,358
Legg Mason, Inc.	17,800		389,998
Merrill Lynch & Co., Inc.	182,600		2,125,464
Morgan Stanley	126,180		2,023,927
Northern Trust Corp.	24,500		1,277,430
State Street Corp.	49,100		1,931,103
T. Rowe Price Group, Inc.(b)	29,700		1,052,568
			21,408,723
Chemicals — 0.8%
Air Products and Chemicals, Inc.	23,900		1,201,453
CF Industries Holding, Inc.	7,300		358,868
Dow Chemical Co. (The)	105,231		1,587,936
E. I. Du Pont de Nemours & Co.	102,620		2,596,286
Eastman Chemical Co.	8,000		253,680
Ecolab, Inc.	20,000		703,000
International Flavors & Fragrances, Inc.	8,300		246,676
Monsanto Co.	59,594		4,192,437
PPG Industries, Inc.	18,700		793,441
Praxair, Inc.	35,800		2,125,088
Rohm & Haas Co.	12,811		791,592
Sigma-Aldrich Corp.(b)	14,400		608,256
			15,458,713
Commercial Banks — 1.4%
BB&T Corp.(b)	62,500		1,716,250
Comerica, Inc.	19,200		381,120
Fifth Third Bancorp	68,321		564,331
First Horizon National Corp.(b)	21,198		224,063
Huntington Bancshares, Inc.	59,936		459,110
KeyCorp.(b)	59,400		506,088
M&T Bank Corp.(b)	8,100		465,021
Marshall & Ilsley Corp.(b)	29,200		398,288
National City Corp.	238,100		430,961
PNC Financial Services Group, Inc.	39,400		1,930,600
Regions Financial Corp.	81,203		646,376
SunTrust Banks, Inc.	40,200		1,187,508
U.S. Bancorp	203,185		5,081,657
Wachovia Corp.	181,640		1,006,286
Wells Fargo & Co.	431,900		12,732,411
Zions Bancorporation(b)	13,550		332,111
			28,062,181
Commercial Services & Supplies — 0.2%
Avery Dennison Corp.	12,100		396,033
Cintas Corp.	15,000		348,450
Matsuda Sangyo Co. Ltd. (Japan)	30		298
Pitney Bowes, Inc.	23,600		601,328

SEE NOTES TO FINANCIAL STATEMENTS.

A1

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Commercial Services & Supplies (continued)
Republic Services, Inc.	36,465	$	903,967
RR Donnelley & Sons Co.	22,900		310,982
Stericycle, Inc.(a)	9,400		489,552
Waste Management, Inc.	55,742		1,847,290
			4,897,900
Communications Equipment — 1.1%
Ciena Corp.(a)	10,142		67,951
Cisco Systems, Inc.(a)	668,900		10,903,070
Corning, Inc.	179,500		1,710,635
Harris Corp.	15,300		582,165
JDS Uniphase Corp.(a)	21,475		78,384
Juniper Networks, Inc.(a)(b)	60,800		1,064,608
Motorola, Inc.	248,725		1,101,852
QUALCOMM, Inc.	183,800		6,585,554
Tellabs, Inc.(a)	45,800		188,696
			22,282,915
Computers & Peripherals — 1.9%
Apple, Inc.(a)	99,000		8,449,650
Dell, Inc.(a)	197,400		2,021,376
EMC Corp.(a)	235,550		2,466,209
Hewlett-Packard Co.	278,548		10,108,507
International Business Machines Corp.	154,100		12,969,055
Lexmark International, Inc. (Class A Stock)(a)(b)	9,833		264,508
NetApp, Inc.(a)	38,800		542,036
QLogic Corp.(a)(b)	19,600		263,424
SanDisk Corp.(a)	31,800		305,280
Sun Microsystems, Inc.(a)	81,575		311,617
Teradata Corp.(a)	23,500		348,505
			38,050,167
Construction & Engineering — 0.1%
Fluor Corp.	21,400		960,218
Jacobs Engineering Group, Inc.(a)	13,400		644,540
			1,604,758
Construction Materials
Vulcan Materials Co.(b)	12,300		855,834
Consumer Finance — 0.2%
American Express Co.	131,900		2,446,745
Capital One Financial Corp.	45,161		1,440,184
Discover Financial Services	57,540		548,356
SLM Corp.(a)(b)	54,200		482,380
			4,917,665
Containers & Packaging — 0.1%
Ball Corp.	12,100		503,239
Bemis Co., Inc.	11,300		267,584
Pactiv Corp.(a)	15,100		375,688
Sealed Air Corp.	21,800		325,692
			1,472,203
Distributors
Genuine Parts Co.	17,900		677,694
Diversified Consumer Services — 0.1%
Apollo Group, Inc. (Class A Stock)(a)(b)	12,300		942,426
H&R Block, Inc.	37,300		847,456
			1,789,882

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Diversified Financial Services — 1.5%
Bank of America Corp.	570,477	$	8,032,316
CIT Group, Inc.(b)	30,800		139,832
Citigroup, Inc.	619,358		4,155,892
CME Group, Inc.	7,640		1,589,960
IntercontinentalExchange, Inc.(a)	8,800		725,472
JPMorgan Chase & Co.	425,345		13,411,129
Leucadia National Corp.(b)	20,700		409,860
Moody’s Corp.(b)	21,100		423,899
Nasdaq OMX Group, Inc. (The)(a)	12,000		296,520
NYSE Euronext	31,100		851,518
			30,036,398
Diversified Telecommunication Services — 1.7%
AT&T, Inc.	672,068		19,153,939
CenturyTel, Inc.	14,200		388,086
Embarq Corp.	16,943		609,270
Frontier Communications Corp.	39,500		345,230
Qwest Communications International, Inc.(b)	163,057		593,527
Verizon Communications Group, Inc.	323,976		10,982,787
Windstream Corp.	51,857		477,084
			32,549,923
Electric Utilities — 1.1%
Allegheny Energy, Inc.	18,800		636,568
American Electric Power Co., Inc.	45,760		1,522,893
Duke Energy Corp.	143,824		2,158,798
Edison International	37,600		1,207,712
Entergy Corp.	21,800		1,812,234
Exelon Corp.	74,774		4,158,181
FirstEnergy Corp.	34,701		1,685,775
FPL Group, Inc.	46,500		2,340,345
Pepco Holdings, Inc.	27,700		491,952
Pinnacle West Capital Corp.	11,700		375,921
PPL Corp.	42,600		1,307,394
Progress Energy, Inc.	29,483		1,174,898
Southern Co. (The)	85,600		3,167,200
			22,039,871
Electrical Equipment — 0.2%
Cooper Industries Ltd. (Class A Stock)(Bermuda)	20,400		596,292
Emerson Electric Co.	88,300		3,232,663
Rockwell Automation, Inc.	16,200		522,288
			4,351,243
Electronic Equipment & Instruments — 0.1%
Agilent Technologies, Inc.(a)	40,714		636,360
Amphenol Corp., (Class A Stock)	15,200		364,496
Jabil Circuit, Inc.	23,600		159,300
Molex, Inc.	15,000		217,350
Tyco Electronics Ltd. (Bermuda)	56,515		916,108
			2,293,614
Energy Equipment & Services — 0.7%
B.J. Services Co.	31,900		372,273
Baker Hughes, Inc.	36,950		1,184,987
Cameron International Corp.(a)(b)	24,800		508,400
ENSCO International, Inc.	16,800		476,952

SEE NOTES TO FINANCIAL STATEMENTS.

A2

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Energy Equipment & Services (continued)
Halliburton Co.	99,700	$	1,812,546
Nabors Industries Ltd. (Bermuda)(a)	31,900		381,843
National Oilwell Varco, Inc.(a)	44,400		1,085,136
Noble Corp. (Cayman Islands)	30,600		675,954
Rowan Cos., Inc.	13,200		209,880
Schlumberger Ltd.	136,400		5,773,812
Smith International, Inc.	21,200		485,268
Weatherford International Ltd. (Bermuda)(a)	70,100		758,482
			13,725,533
Food & Staples Retailing — 1.5%
Costco Wholesale Corp.	49,500		2,598,750
CVS Caremark Corp.	163,248		4,691,748
Kroger Co. (The)	74,446		1,966,119
Safeway, Inc.	49,500		1,176,615
SUPERVALU, Inc.	24,110		352,006
SYSCO Corp.	68,500		1,571,390
Walgreen Co.(b)	109,600		2,703,832
Wal-Mart Stores, Inc.	254,200		14,250,451
Whole Foods Market, Inc.(b)	14,100		133,104
			29,444,015
Food Products — 0.8%
Archer-Daniels-Midland Co.	73,326		2,113,989
Campbell Soup Co.(b)	23,500		705,235
ConAgra Foods, Inc.	55,000		907,500
Dean Foods Co.(a)(b)	17,300		310,881
General Mills, Inc.	38,200		2,320,650
H.J. Heinz Co.	37,200		1,398,720
Hershey Co. (The)	18,500		642,690
J.M. Smucker Co. (The)	13,300		576,688
Kellogg Co.	29,900		1,311,115
Kraft Foods, Inc.	172,653		4,635,733
McCormick & Co., Inc.	14,400		458,784
Sara Lee Corp.	79,200		775,368
Tyson Foods, Inc. (Class A Stock)	38,000		332,880
			16,490,233
Gas Utilities — 0.1%
Equitable Resources, Inc.(b)	10,900		365,695
Nicor, Inc.	4,600		159,804
Questar Corp.(b)	19,700		643,993
			1,169,492
Healthcare Equipment & Supplies — 1.0%
Baxter International, Inc.	71,400		3,826,326
Becton Dickinson & Co.	28,600		1,955,954
Boston Scientific Corp.(a)	171,767		1,329,477
C.R. Bard, Inc.	13,000		1,095,380
Covidien Ltd. (Bermuda)	57,115		2,069,848
Densply International, Inc.	16,900		477,256
Hospira, Inc.(a)	18,360		492,415
Intuitive Surgical, Inc.(a)(b)	4,400		558,756
Medtronic, Inc.	128,300		4,031,185
St. Jude Medical, Inc.(a)	38,900		1,282,144
Stryker Corp.	28,100		1,122,595
Varian Medical Systems, Inc.(a)(b)	14,200		497,568
Zimmer Holdings, Inc.(a)	25,600		1,034,752
			19,773,656

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Healthcare Providers & Services — 1.0%
Aetna, Inc.	53,600	$	1,527,600
AmerisourceBergen Corp.	19,300		688,238
Cardinal Health, Inc.	42,050		1,449,464
Cigna Corp.	37,400		630,190
Coventry Health Care, Inc.(a)	19,150		284,952
DaVita, Inc.(a)	11,900		589,883
Express Scripts, Inc.(a)(b)	28,100		1,544,938
Humana, Inc.(a)(b)	22,900		853,712
Laboratory Corp. of America Holdings(a)(b)	11,200		721,392
McKesson Corp.	31,430		1,217,284
Medco Health Solutions, Inc.(a)	57,498		2,409,741
Patterson Cos., Inc.(a)	11,400		213,750
Quest Diagnostics, Inc.	17,100		887,661
Tenet Healthcare Corp.(a)	44,600		51,290
UnitedHealth Group, Inc.	138,500		3,684,100
WellPoint, Inc.(a)	58,200		2,451,966
			19,206,161
Healthcare Technology
IMS Health, Inc.	22,200		336,552
Hotels, Restaurants & Leisure — 0.7%
Carnival Corp.	51,500		1,252,480
Darden Restaurants, Inc.	16,950		477,651
International Game Technology	35,200		418,528
Marriott International, Inc. (Class A Stock)	33,600		653,520
McDonald’s Corp.	127,900		7,954,101
Starbucks Corp.(a)	80,200		758,692
Starwood Hotels & Resorts Worldwide, Inc.	19,500		349,050
Wyndham Worldwide Corp.	16,420		107,551
Wynn Resorts Ltd.(a)(b)	6,200		262,012
Yum! Brands, Inc.	53,300		1,678,950
			13,912,535
Household Durables — 0.2%
Black & Decker Corp. (The)(b)	6,900		288,489
Centex Corp.	11,900		126,616
D.R. Horton, Inc.	31,100		219,877
Fortune Brands, Inc.	17,000		701,760
Harman International Industries, Inc.(b)	6,400		107,072
KB Home(b)	8,200		111,684
Leggett & Platt, Inc.	17,600		267,344
Lennar Corp. (Class A Stock)(b)	13,300		115,311
Newell Rubbermaid, Inc.	32,914		321,899
Pulte Homes, Inc.	20,800		227,344
Snap-On, Inc.	7,000		275,660
Stanley Works (The)	10,500		358,050
Whirlpool Corp.(b)	9,626		398,035
			3,519,141
Household Products — 1.5%
Clorox Co.	15,400		855,624
Colgate-Palmolive Co.	57,500		3,941,050
Kimberly-Clark Corp.	47,100		2,484,054
Procter & Gamble Co.	342,925		21,199,624
			28,480,352

SEE NOTES TO FINANCIAL STATEMENTS.

A3

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Independent Power Producers & Energy Traders — 0.1%
AES Corp. (The)(a)(b)	75,300	$	620,472
Constellation Energy Group, Inc.	17,000		426,530
Dynegy, Inc. (Class A Stock)(a)	48,400		96,800
			1,143,802
Industrial Conglomerates — 1.3%
3M Co.	79,500		4,574,430
General Electric Co.	1,187,800		19,242,360
Textron, Inc.	28,300		392,521
Tyco International Ltd. (Bermuda)	56,415		1,218,564
			25,427,875
Insurance — 1.2%
Aflac, Inc.(b)	54,200		2,484,528
Allstate Corp. (The)	61,600		2,018,016
American International Group, Inc.(b)	295,788		464,387
AON Corp.	30,700		1,402,376
Assurant, Inc.	17,400		522,000
Chubb Corp.	41,000		2,091,000
Cincinnati Financial Corp.	17,837		518,522
Genworth Financial, Inc.	62,800		177,724
Hartford Financial Services Group, Inc.	36,800		604,256
Lincoln National Corp.	28,118		529,743
Loews Corp.	39,775		1,123,644
Marsh & McLennan Cos., Inc.	57,000		1,383,390
MBIA, Inc.(b)	29,800		121,286
MetLife, Inc.	90,700		3,161,802
Principal Financial Group, Inc.	27,400		618,418
Progressive Corp. (The)	75,600		1,119,636
Torchmark Corp.	10,000		447,000
Travelers Cos., Inc. (The)	67,235		3,039,022
Unum Group	40,010		744,186
XL Capital Ltd. (Class A Stock) (Bermuda)	31,000		114,700
			22,685,636
Internet & Catalog Retail — 0.1%
Amazon.com, Inc.(a)	35,300		1,810,184
Expedia, Inc.(a)	23,300		191,992
			2,002,176
Internet Software & Services — 0.6%
Akamai Technologies, Inc.(a)	19,200		289,728
eBay, Inc.(a)	124,300		1,735,228
Google, Inc. (Class A Stock)(a)	27,150		8,352,698
Verisign, Inc.(a)	21,600		412,128
Yahoo!, Inc.(a)	150,600		1,837,320
			12,627,102
IT Services — 0.4%
Affiliated Computer Services, Inc. (Class A Stock)(a)	10,400		477,880
Automatic Data Processing, Inc.	57,900		2,277,786
Cognizant Technology Solutions Corp. (Class A Stock)(a)	32,500		586,950
Computer Sciences Corp.(a)	17,200		604,408
Convergys Corp.(a)	17,800		114,098
Fidelity National Information Services, Inc.	21,600		351,432

COMMON STOCKS
(continued)	Shares	Value (Note 2)
IT Services (continued)
Fiserv, Inc.(a)	18,200	$	661,934
Mastercard, Inc. (Class A Stock)	8,200		1,172,026
Paychex, Inc.	38,700		1,017,036
Total System Services, Inc.	25,796		361,144
Western Union Co.	81,210		1,164,551
			8,789,245
Leisure Equipment & Products — 0.1%
Eastman Kodak Co.(b)	28,100		184,898
Hasbro, Inc.	15,800		460,886
Mattel, Inc.	41,051		656,816
			1,302,600
Life Sciences Tools & Services — 0.2%
Life Technologies Corp.(a)	19,601		456,899
Millipore Corp.(a)	5,700		293,664
PerkinElmer, Inc.	12,800		178,048
Thermo Fisher Scientific, Inc.(a)	47,700		1,625,139
Waters Corp.(a)	11,300		414,145
			2,967,895
Machinery — 0.8%
Caterpillar, Inc.(b)	67,200		3,001,824
Cummins, Inc.	23,200		620,136
Danaher Corp.	29,000		1,641,690
Deere & Co.	48,600		1,862,352
Dover Corp.	21,400		704,488
Eaton Corp.	20,200		1,004,142
Flowserve Corp.	7,700		396,550
Illinois Tool Works, Inc.	45,500		1,594,775
Ingersoll-Rand Co. Ltd. (Class A Stock) (Bermuda)	34,455		597,794
ITT Corp.	20,700		951,993
Manitowoc Co., Inc. (The)	14,600		126,436
PACCAR, Inc.(b)	40,343		1,153,810
Pall Corp.	15,300		434,979
Parker Hannifin Corp.	19,065		811,025
			14,901,994
Media — 1.2%
CBS Corp. (Class B Stock)	83,534		684,143
Comcast Corp. (Class A Stock)	331,890		5,602,304
DIRECTV Group, Inc. (The)(a)(b)	64,500		1,477,695
Gannett Co., Inc.(b)	30,700		245,600
Interpublic Group of Cos., Inc.(a)(b)	67,400		266,904
McGraw-Hill Cos., Inc. (The)	38,100		883,539
Meredith Corp.(b)	4,000		68,480
New York Times Co. (The) (Class A Stock)(b)	15,700		115,081
News Corp. (Class A Stock)	261,100		2,373,399
Omnicom Group, Inc.	36,300		977,196
Scripps Networks Interactive, Inc. (Class A Stock)	12,900		283,800
Time Warner, Inc.	400,500		4,029,030
Viacom, Inc. (Class B Stock)(a)	70,634		1,346,284
Walt Disney Co. (The)	213,400		4,842,046
Washington Post Co. (The) (Class B Stock)	800		312,200
			23,507,701

SEE NOTES TO FINANCIAL STATEMENTS.

A4

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Metals & Mining — 0.4%
AK Steel Holding Corp.	11,400	$	106,248
Alcoa, Inc.(b)	93,040		1,047,630
Allegheny Technologies, Inc.	13,600		347,208
Freeport-McMoRan Copper & Gold, Inc.	42,394		1,036,109
Newmont Mining Corp.	51,900		2,112,331
Nucor Corp.	36,000		1,663,200
Titanium Metals Corp.(b)	8,600		75,766
United States Steel Corp.(b)	13,400		498,480
			6,886,972
Multiline Retail — 0.3%
Big Lots, Inc.(a)	9,200		133,308
Family Dollar Stores, Inc.	15,900		414,513
J.C. Penney Co., Inc.	25,300		498,410
Kohl’s Corp.(a)	34,600		1,252,520
Macy’s, Inc.(b)	47,874		495,496
Nordstrom, Inc.(b)	20,000		266,200
Sears Holding Corp.(a)(b)	6,042		234,853
Target Corp.(b)	85,800		2,962,673
			6,257,973
Multi-Utilities — 0.7%
Ameren Corp.	23,900		794,914
CenterPoint Energy, Inc.	38,200		482,084
CMS Energy Corp.(b)	28,800		291,168
Consolidated Edison, Inc.	32,600		1,269,118
Dominion Resources, Inc.	65,932		2,363,002
DTE Energy Co.	18,600		663,462
Integrys Energy Group, Inc.	8,820		379,084
NiSource, Inc.	36,800		403,696
PG&E Corp.	40,800		1,579,368
Public Service Enterprise Group, Inc.	57,800		1,686,026
Sempra Energy	27,419		1,168,872
TECO Energy, Inc.	27,900		344,565
Wisconsin Energy Corp.	13,000		545,740
Xcel Energy, Inc.	49,410		916,556
			12,887,655
Office Electronics
Xerox Corp.	99,200		790,624
Oil, Gas & Consumable Fuels — 5.3%
Anadarko Petroleum Corp.	53,254		2,052,942
Apache Corp.	38,014		2,833,183
Cabot Oil & Gas Corp.	11,800		306,800
Chesapeake Energy Corp.	58,500		945,945
Chevron Corp.	229,322		16,962,948
ConocoPhillips	172,877		8,955,029
CONSOL Energy, Inc.	20,800		594,464
Devon Energy Corp.	50,300		3,305,213
El Paso Corp.	79,436		621,984
EOG Resources, Inc.	28,300		1,884,214
Exxon Mobil Corp.	579,940		46,296,609
Hess Corp.	32,200		1,727,208
Marathon Oil Corp.	80,282		2,196,516
Massey Energy Corp.	8,800		121,352
Murphy Oil Corp.	21,100		935,785
Noble Energy, Inc.	19,500		959,790
Occidental Petroleum Corp.	90,900		5,453,091

COMMON STOCKS
(continued)	Shares		Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Peabody Energy Corp.	30,400		$	691,600
Pioneer Natural Resources Co.	12,300			199,014
Range Resources Corp.	17,200			591,508
Southwestern Energy Co.(a)	39,000			1,129,830
Spectra Energy Corp.	69,962			1,101,202
Sunoco, Inc.(b)	14,500			630,170
Tesoro Corp.	20,600			271,302
Valero Energy Corp.	59,500			1,287,580
Williams Cos., Inc.	69,500			1,006,360
XTO Energy, Inc.	62,441			2,202,294
				105,263,933
Paper & Forest Products — 0.1%
International Paper Co.	48,373			570,801
MeadWestvaco Corp.	20,514			229,552
Weyerhaeuser Co.	24,100			737,701
				1,538,054
Personal Products — 0.1%
Avon Products, Inc.	47,600			1,143,828
Estee Lauder Cos., Inc. (The) (Class A Stock)(b)	13,100			405,576
				1,549,404
Pharmaceuticals — 3.6%
Abbott Laboratories	176,900			9,441,153
Allergan, Inc.	35,000			1,411,200
Bristol-Myers Squibb Co.	225,200			5,235,900
Eli Lilly & Co.	113,800			4,582,726
Forest Laboratories, Inc.(a)	34,100			868,527
Johnson & Johnson	316,648			18,945,050
King Pharmaceuticals, Inc.(a)	33,366			354,347
Merck & Co., Inc.	243,700			7,408,480
Mylan, Inc.(a)(b)	33,000			326,370
Pfizer, Inc.(b)	768,945			13,618,016
Schering-Plough Corp.	184,900			3,148,847
Teva Pharmaceutical Industries Ltd. (ADR)(Israel)	—	(m)		12
Watson Pharmaceuticals, Inc.(a)(b)	12,200			324,154
Wyeth	151,700			5,690,267
				71,355,049
Professional Services — 0.1%
Dun & Bradstreet Corp. (The)	5,800			447,760
Equifax, Inc.	13,700			363,324
Monster Worldwide, Inc.(a)(b)	13,100			158,379
Robert Half International, Inc.	20,000			416,400
				1,385,863
Real Estate Investment Trusts — 0.4%
Apartment Investment & Management Co. (Class A Stock)	13,611			157,207
AvalonBay Communities, Inc.	8,700			527,046
Boston Properties, Inc.(b)	13,200			726,000
Developers Diversified Realty Corp.(b)	14,200			69,296
Equity Residential	29,600			882,672
HCP, Inc.(b)	29,300			813,661
Host Hotels & Resorts, Inc.(b)	63,700			482,209
Kimco Realty Corp.(b)	25,200			460,656

SEE NOTES TO FINANCIAL STATEMENTS.

A5

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Real Estate Investment Trusts (continued)
Plum Creek Timber Co., Inc.(b)	19,100	$	663,534
ProLogis(b)	26,700		370,863
Public Storage	14,200		1,128,900
Simon Property Group, Inc.	25,600		1,360,128
Vornado Realty Trust	15,100		911,285
			8,553,457
Real Estate Management & Development
CB Richard Ellis Group, Inc.(Class A Stock)(a)	21,600		93,312
Road & Rail — 0.5%
Burlington Northern Santa Fe Corp.	32,100		2,430,291
CSX Corp.	42,100		1,366,987
Norfolk Southern Corp.	42,700		2,009,035
Ryder System, Inc.	6,900		267,582
Union Pacific Corp.(b)	57,900		2,767,620
			8,841,515
Semiconductors & Semiconductor Equipment — 1.0%
Advanced Micro Devices, Inc.(a)(b)	59,000		127,440
Altera Corp.(b)	33,500		559,785
Analog Devices, Inc.	33,000		627,660
Applied Materials, Inc.	148,600		1,505,318
Broadcom Corp. (Class A Stock)(a)	51,150		868,016
Intel Corp.(b)	639,500		9,375,069
KLA-Tencor Corp.	19,700		429,263
Linear Technology Corp.(b)	24,500		541,940
LSI Corp.(a)	72,800		239,512
MEMC Electronic Materials, Inc.(a)	29,400		419,832
Microchip Technology, Inc.	19,800		386,694
Micron Technology, Inc.(a)(b)	104,000		274,560
National Semiconductor Corp.	25,900		260,813
Novellus Systems, Inc.(a)	10,400		128,336
NVIDIA Corp.(a)	63,350		511,235
Teradyne, Inc.(a)	23,500		99,170
Texas Instruments, Inc.	149,100		2,314,032
Xilinx, Inc.	31,400		559,548
			19,228,223
Software — 1.7%
Adobe Systems, Inc.(a)	60,300		1,283,787
Autodesk, Inc.(a)	25,600		503,040
BMC Software, Inc.(a)	21,300		573,183
CA, Inc.	43,264		801,682
Citrix Systems, Inc.(a)	20,700		487,899
Compuware Corp.(a)	31,800		214,650
Electronic Arts, Inc.(a)	32,800		526,112
Intuit, Inc.(a)(b)	38,800		923,052
McAfee, Inc.(a)	13,800		477,066
Microsoft Corp.	883,000		17,165,519
Novell, Inc.(a)	34,200		133,038
Oracle Corp.(a)	434,800		7,709,004
Salesforce.com, Inc.(a)(b)	8,700		278,487
Symantec Corp.(a)	95,478		1,290,863
			32,367,382
Specialty Retail — 0.8%
Abercrombie & Fitch Co.(b)	8,700		200,709
AutoNation, Inc.(a)(b)	16,974		167,703

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Specialty Retail (continued)
AutoZone, Inc.(a)	4,400	$	613,668
Bed Bath & Beyond, Inc.(a)(b)	29,600		752,432
Best Buy Co., Inc.	38,425		1,080,127
GameStop Corp. (Class A Stock)(a)(b)	19,400		420,204
Gap, Inc. (The)	53,400		715,026
Home Depot, Inc.	193,150		4,446,313
Lowe’s Cos., Inc.	163,700		3,522,824
Limited Brands, Inc.	31,106		312,304
Office Depot, Inc.(a)(b)	27,800		82,844
RadioShack Corp.	18,700		223,278
Sherwin-Williams Co. (The)(b)	11,200		669,200
Staples, Inc.(b)	73,849		1,323,374
Tiffany & Co.	13,200		311,916
TJX Cos., Inc. (The)(b)	46,900		964,733
			15,806,655
Textiles, Apparel & Luxury Goods — 0.2%
Coach, Inc.(a)	38,400		797,568
Jones Apparel Group, Inc.	12,600		73,836
NIKE, Inc. (Class B Stock)(b)	42,100		2,147,100
Polo Ralph Lauren Corp.	6,500		295,165
VF Corp.	9,600		525,792
			3,839,461
Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.	57,500		917,700
People’s United Financial, Inc.	39,500		704,285
Sovereign Bancorp, Inc.	82,655		246,312
			1,868,297
Tobacco — 0.9%
Altria Group, Inc.	234,300		3,528,558
Lorillard, Inc.	20,947		1,180,363
Philip Morris International, Inc.	232,800		10,129,128
Reynolds American, Inc.	19,300		777,983
UST, Inc.	16,800		1,165,584
			16,781,616
Trading Companies & Distributors — 0.1%
Fastenal Co.(b)	14,700		512,295
W.W. Grainger, Inc.	8,100		638,604
			1,150,899
Wireless Telecommunication Services — 0.1%
American Tower Corp. (Class A Stock)(a)	44,800		1,313,536
Sprint Nextel Corp.(b)	324,677		594,159
			1,907,695
TOTAL COMMON STOCKS (cost $943,231,701)			894,669,192
PREFERRED STOCK
Banking
JPMorgan Chase Capital XXVI (cost $700,000)	28,000		685,720
	Units
RIGHTS
Diversified Financial Services
Fortis (Belgium)(a) (cost $0)	5,951		—	(n)

SEE NOTES TO FINANCIAL STATEMENTS.

A6

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS — 46.1%	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Aerospace & Defense — 0.2%
BAE Systems Holding, Inc., Gtd. Notes, 144A	Baa2	4.75%	08/15/10	$	2,000	$	1,988,232
Boeing Capital Corp., Sr. Unsec’d. Notes	A2	6.10%	03/01/11		975		987,223
Goodrich Corp., Sr. Unsec’d. Notes	Baa2	6.80%	07/01/36		811		865,868
Raytheon Co., Sr. Unsec’d. Notes	Baa1	5.50%	11/15/12		625		631,793
							4,473,116
Airlines — 0.2%
American Airlines, Inc., Pass-thru Certs., Ser. 01-1	B1	6.817%	05/23/11		2,420		1,548,800
Continental Airlines, Inc., Pass-thru Certs.	Baa2	6.648%	09/15/17		266		194,431
Continental Airlines, Inc., Pass-thru Certs.(j)	Baa2	6.703%	06/15/21		155		116,402
Delta Air Lines, Inc., Pass-thru Certs.	Baa1	6.821%	08/10/22		467		296,842
Southwest Airlines Co., Sr. Unsec’d. Notes	Baa1	6.50%	03/01/12		965		903,232
							3,059,707
Asset-Backed Securities — 0.9%
American Express Credit Account Master Trust I, Series 2004-4, Class C, 144A(g)	Baa1	1.665%	03/15/12		1,510		1,274,922
American Express Credit Account Master Trust I, Series 2004-C, Class C, 144A(g)	Baa1	1.695%	02/15/12		78		67,163
Amortizing Residential Collateral Trust, Series 2002-BC9, Class M1(g)	A1	2.121%	12/25/32		2,359		1,270,488
Bank of America Credit Card Trust, Series 2006-C5, Class C5(g)	Baa2	1.595%	01/15/16		4,159		1,493,977
CDC Mortgage Capital Trust, Series 2002-HE3, Class M1(g)	Baa2	2.121%	03/25/33		808		482,938
CDC Mortgage Capital Trust, Series 2003-HE1, Class M2(g)	Baa2	3.396%	08/25/33		67		34,777
Centex Home Equity, Series 2005-A, Class M2(g)	Aa2	0.971%	01/25/35		2,250		1,471,265
Citibank Credit Card Issuance Trust, Series 2006-C1, Class C1(g)	Baa2	0.908%	02/20/15		1,500		693,941
Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB6, Class A3	Aaa	5.12%	07/25/35		1,074		993,612
Equity One ABS, Inc., Series 2004-3, Class M1	Aa2	5.70%	07/25/34		1,660		1,166,153
First Franklin Mortgage Loan Trust, Series 2005-FFH1, Class M2(g)	A2	0.991%	06/25/36		1,800		782,088
HFC Home Equity Loan Trust, Series 2005-2, Class M2(g)	Aa1	1.00%	01/20/35		558		357,888
MBNA Master Credit Card Trust, Series 1999-J, Class A	Aaa	7.00%	02/15/12		2,370		2,377,312
Morgan Stanley ABS Capital I, Series 2004-NC3, Class M2(g)	A2	2.121%	03/25/34		643		448,971
Morgan Stanley Dean Witter Capital I, Series 2002-HE1, Class M1(g)	Aa2	1.371%	07/25/32		1,443		797,060
Morgan Stanley Dean Witter Capital I, Series 2002-NC4, Class M1(g)	Aaa	1.746%	09/25/32		1,324		786,476
Saxon Asset Securities Trust, Series 2005-2, Class M2(g)	Aa2	0.911%	10/25/35		1,480		659,698
Securitized Asset Backed Receivables LLC, Series 2004-OP1, Class M1(g)	Aa2	0.981%	02/25/34		1,660		974,304
Securitized Asset Backed Receivables LLC, Series 2006-FR3, Class A3(g)	B2	0.721%	05/25/36		1,400		491,251
SVO VOI Mortgage Corp., Series 2005-AA, Class A, 144A	Aaa	5.25%	02/20/21		627		524,053
							17,148,337
Automotive — 0.1%
Johnson Controls, Inc., Sr. Unsec’d. Notes	A3	5.50%	01/15/16		235		182,110
Oshkosh Truck Corp., Bank Loan(j)	Ba3	3.425%	12/06/13		1,761		1,019,780
							1,201,890
Banking — 1.4%
Banco Bradesco (Cayman Islands), Sr. Sub Notes	A2	8.75%	10/24/13		1,690		1,859,000
Bank of America Corp., Jr. Sub. Notes(g)	A2	8.00%	12/29/49		2,100		1,510,505
Bank of America NA, Sub. Notes	Aa2	5.30%	03/15/17		850		807,097
Bank of America NA, Sub. Notes	Aa2	6.00%	10/15/36		1,300		1,380,317
Bank One Corp., Sub. Notes	Aa3	7.875%	08/01/10		2,500		2,620,375
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa2	5.30%	10/30/15		550		529,154
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa2	6.40%	10/02/17		270		280,578
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa2	7.25%	02/01/18		1,135		1,243,797
Citigroup, Inc., Jr. Sub. Notes(b)(g)	Baa2	8.40%	04/29/49		2,000		1,320,580
Citigroup, Inc., Sr. Unsec’d. Notes(b)	A2	6.875%	03/05/38		790		898,931
Citigroup, Inc., Sub. Notes	A3	5.625%	08/27/12		1,900		1,781,111
Citigroup, Inc., Sub. Notes	A3	6.125%	08/25/36		725		649,451
DEPFA ACS Bank (Ireland), 144A	Aa1	5.125%	03/16/37		1,325		959,463

SEE NOTES TO FINANCIAL STATEMENTS.

A7

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Banking (continued)
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.45%	11/01/12	$	580	$	553,267
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	5.625%	01/15/17		765		657,194
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.45%	05/01/36		1,770		1,374,587
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.75%	10/01/37		113		91,741
HSBC Bank USA, Sr. Unsec’d. Notes	Aa2	3.875%	09/15/09		250		249,577
ICICI Bank Ltd. (India), 144A(g)	Baa2	5.29%	01/12/10		1,880		1,555,700
ICICI Bank Ltd. (Singapore), 144A	Baa2	5.75%	11/16/10		1,670		1,418,949
JPMorgan Chase & Co., Jr. Sub. Notes(g)	A1	7.90%	04/29/49		2,000		1,663,660
JPMorgan Chase & Co., Sr. Unsec’d. Notes	Aa2	4.60%	01/17/11		175		171,905
JPMorgan Chase & Co., Sub. Notes	Aa3	6.50%	01/15/09		1,100		1,099,780
MUFG Capital Finance Group Ltd. (Cayman Islands)	A2	6.346%	07/25/49		800		557,378
Santander Central Hispano Issuances Ltd. (Cayman Islands), Bank Gtd. Notes	Aa2	7.625%	09/14/10		805		786,271
Wells Fargo Bank, Sub. Notes	Aa2	6.45%	02/01/11		90		93,289
Wells Fargo Capital XIII, Bank Gtd. Notes, M.T.N.(g)	A1	7.70%	12/29/49		1,000		825,311
							26,938,968
Brokerage — 0.3%
Lehman Brothers Holdings, Inc., Jr. Sub. Notes(l)	NR	6.50%	07/19/17		514		51
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, M.T.N.(l)	NR	5.25%	02/06/12		1,850		175,750
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, M.T.N.(l)	NR	6.875%	05/02/18		700		66,500
Merrill Lynch & Co., Inc., Notes, M.T.N.(b)	A2	6.875%	04/25/18		1,230		1,286,612
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes	A2	4.79%	08/04/10		375		364,587
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, M.T.N.(b)	A2	4.25%	02/08/10		1,470		1,436,840
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, M.T.N.	A2	5.00%	01/15/15		190		183,262
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, M.T.N.	A2	5.77%	07/25/11		355		350,785
Morgan Stanley Group, Inc., Sr. Unsec’d. Notes, M.T.N.	A2	5.25%	11/02/12		30		27,284
Morgan Stanley Group, Inc., Sr. Unsec’d. Notes, M.T.N.	A2	5.45%	01/09/17		670		552,269
Morgan Stanley Group, Inc., Sr. Unsec’d. Notes, M.T.N.(b)	A2	5.75%	10/18/16		1,860		1,562,907
Morgan Stanley Group, Inc., Sr. Unsec’d. Notes, M.T.N.	A2	5.95%	12/28/17		600		497,989
							6,504,836
Building Materials & Construction — 0.1%
American Standard, Inc., Gtd. Notes(b)	Baa3	7.625%	02/15/10		1,000		999,991
Hanson PLC (United Kingdom), Gtd. Notes	Ba3	7.875%	09/27/10		1,270		512,905
Lafarge SA (France), Sr. Unsec’d. Notes	Baa2	6.15%	07/15/11		1,100		957,749
							2,470,645
Cable — 0.4%
AT&T Broadband, Gtd. Notes	Baa2	9.455%	11/15/22		115		128,841
Cox Communications, Inc., Sr. Unsec’d. Notes	Baa3	6.75%	03/15/11		1,195		1,163,233
Cox Communications, Inc., Sr. Unsec’d. Notes	Baa3	7.875%	08/15/09		1,160		1,140,267
Insight Midwest Holdings LLC, Bank Loan(j)	B1	3.66%	10/06/13		1,216		978,545
Tele-Communications, Inc., Gtd. Notes	Baa2	9.875%	06/15/22		1,440		1,710,054
Time Warner Cable, Inc., Gtd. Notes(b)	Baa2	5.40%	07/02/12		2,410		2,250,331
							7,371,271
Capital Goods — 0.3%
Caterpillar Financial Service Corp., Sr. Unsec’d. Notes, M.T.N.	A2	5.50%	03/15/16		780		742,240
Caterpillar, Inc., Sr. Unsec’d. Notes	A2	7.25%	09/15/09		1,000		1,018,197
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	5.80%	10/15/12		460		384,803
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	6.375%	10/15/17		1,198		831,426
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	7.00%	10/15/37		390		214,803
FedEx Corp., Gtd. Notes	Baa2	7.25%	02/15/11		480		487,622
General Electric Co., Sr. Unsec’d. Notes	Aaa	5.25%	12/06/17		320		319,023
Sensata Technologies, Bank Loan(j)	B1	5.258%	04/27/13		1,379		689,394
United Technologies Corp., Sr. Unsec’d. Notes(e)	A2	6.35%	03/01/11		810		856,452
United Technologies Corp., Sr. Unsec’d. Notes(c)(e)	A2	8.875%	11/15/19		375		496,799
							6,040,759

SEE NOTES TO FINANCIAL STATEMENTS.

A8

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Chemicals — 0.4%
Dow Chemical Co., Sr. Unsec’d. Notes	Baa1	5.97%	01/15/09	$	430	$	430,011
Dow Chemical Co., Sr. Unsec’d. Notes	Baa1	6.125%	02/01/11		690		690,936
Huntsman LLC, Sec’d. Notes	Ba1	11.625%	10/15/10		2,000		1,750,000
ICI Wilmington, Inc., Gtd. Notes	A3	5.625%	12/01/13		780		751,996
Lubrizol Corp., Gtd. Notes	Baa2	4.625%	10/01/09		1,090		1,070,641
PPG Industries, Inc., Sr. Unsec’d. Notes	A3	5.75%	03/15/13		3,500		3,461,275
Union Carbide Corp., Sr. Unsec’d. Notes	Ba2	7.50%	06/01/25		500		411,214
							8,566,073
Collateralized Mortgage Obligations — 0.6%
Bank of America Alternative Loan Trust, Series 2005-12, Class 3CB1	Aaa	6.00%	01/25/36		3,495		2,723,607
Bank of America Mortgage Securities, Inc., Series 2005-A, Class 2A1(g)	Aaa	4.443%	02/25/35		1,087		721,510
Bank of America Mortgage Securities, Inc., Series 2005-B, Class 2A1(g)	Aaa	4.386%	03/25/35		1,077		658,303
Chase Mortgage Finance Corp., Series 2007-A1, Class 1A5(g)	Aaa	4.884%	02/25/37		2,853		2,178,208
Countrywide Alternative Loan Trust, Pass-Thru Certificates, Series 2004-18CB, Class 3A1	Aaa	5.25%	09/25/19		1,566		1,427,916
JPMorgan Chase Commerical Mortgage Securities Corp., Series 2007-A1, Class 4A1(g)	Aaa	4.066%	07/25/35		2,240		1,629,100
Master Alternative Loans Trust, Pass-Thru Certificates, Series 2004-4, Class 4A1	Aaa	5.00%	04/25/19		428		396,293
Structured Adjustable Rate Mortgage Loan, Series 2004-1, Class 4A3(g)	Aaa	5.365%	02/25/34		969		601,941
Washington Mutual Alternative Loan Trust, Mortgage Pass-Thru Certificates, Series 2005-1, Class 3A	AAA(d)	5.00%	03/25/20		947		759,611
							11,096,489
Commercial Mortgage Backed Securities — 4.5%
Bank of America Commercial Mortgage, Inc., Series 2003-2, Class A3(g)	AAA(d)	4.873%	03/11/41		3,350		3,063,279
Bank of America Commercial Mortgage, Inc., Series 2004-2, Class A4	Aaa	4.153%	11/10/38		3,680		3,377,779
Bank of America Commercial Mortgage, Inc., Series 2005-1, Class ASB(g)	AAA(d)	4.967%	11/10/42		975		827,490
Banc of America Commercial Mortgage, Inc., Series 2006-4, Class A3A	Aaa	5.60%	07/10/46		2,000		1,423,153
Banc of America Commercial Mortgage, Inc., Series 2007-3, Class A2(g)	Aaa	5.658%	06/10/49		5,730		4,524,822
Bear Stearns Commercial Mortgage Securities, Series 2005-T18, Class AAB(g)	Aaa	4.823%	02/13/42		2,250		1,783,301
Bear Stearns Commercial Mortgage Securities, Series 2005-T20, Class AAB(g)	Aaa	5.135%	10/12/42		3,000		2,457,740
Commercial Mortgage Acceptance Corp., Series 1998-C2, Class F, 144A(g)	A-(d)	5.44%	09/15/30		890		790,206
Commercial Mortgage Load Trust, Series 2008-LS1, Class A2(g)	Aaa	6.020%	12/10/49		2,100		1,658,043
Commercial Mortgage Pass-Thru Certificate, Series 2004-LB2A, Class X2, I/O, 144A(g)	AAA(d)	0.85%	03/10/39		11,829		175,963
Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C4, Class A4	Aaa	4.283%	10/15/39		1,500		1,367,289
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C5, Class A4(g)	AAA(d)	5.10%	08/15/38		3,000		2,454,909
Credit Suisse Mortgage Capital Certificates, Series 2006-C1, Class A4(g)	AAA(d)	5.552%	02/15/39		4,330		3,515,706
CW Capital Cobalt Ltd., Series 2007-C3, Class A3(g)	AAA(d)	5.82%	05/15/46		2,100		1,376,376
DLJ Commercial Mortgage Corp., Series 2000-CF1, Class A1B	AAA(d)	7.62%	06/10/33		3,056		3,058,297
GE Commercial Mortgage Corp., Series 2004-C2, Class X2, I/O, 144A(g)	Aaa	0.53%	03/10/40		22,735		250,676
GMAC Commercial Mortgage Securities, Inc., Ser. 2005-C1, Class A5	AAA(d)	4.697%	05/10/43		2,610		2,115,880
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A5(g)	Aaa	5.224%	04/10/37		3,600		2,958,491
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2000-C10, Class A2(g)	Aaa	7.371%	08/15/32		5,832		5,818,766
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class ASB(g)	Aaa	4.853%	03/15/46		4,000		3,359,583
JPMorgan Chase Commerical Mortgage Securities Corp., Series 2005-LDP2, Class ASB	Aaa	4.659%	07/15/42		6,380		5,195,662

SEE NOTES TO FINANCIAL STATEMENTS.

A9

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Commercial Mortgage Backed Securities (continued)
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A4(g)	Aaa	5.179%	12/15/44	$	3,630	$	2,909,190
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2006-CB16, Class ASB	Aaa	5.523%	05/12/45		2,000		1,523,830
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP6, Class X2 I/O(g)	Aaa	0.07%	04/15/43		143,712		468,945
Keycorp., Series 2000-C1, Class A2(g)	Aaa	7.727%	05/17/32		9,668		9,668,159
LB-UBS Commercial Mortgage Trust, Series 2003-C8, Class A3	Aaa	4.83%	11/15/27		2,720		2,513,318
LB-UBS Commercial Mortgage Trust, Series 2004-C6, Class A5(g)	AAA(d)	4.826%	08/15/29		5,000		4,456,330
LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A5	Aaa	4.739%	07/15/30		695		561,686
LB-UBS Commercial Mortgage Trust, Series 2006-C6, Class AAB	Aaa	5.341%	09/15/39		4,280		3,216,352
Merrill Lynch Mortgage Trust, Series 2004-Key 2, Class A3	Aaa	4.615%	08/12/39		1,900		1,693,519
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4(g)	Aaa	5.909%	06/12/46		2,210		1,770,685
Morgan Stanley Capital I, Series 2006-IQ11, Class A4(g)	AAA(d)	5.772%	10/15/42		2,600		2,134,096
Morgan Stanley Capital I, Series 2007-HQ11, Class AAB	Aaa	5.444%	02/12/44		4,400		3,148,583
Morgan Stanley Capital I, Series 2007-T27, Class AAB(g)	AAA(d)	5.65%	06/11/42		1,040		777,902
Wachovia Bank Commercial Mortgage Trust, Series 2002-C2, Class A4	Aaa	4.98%	11/15/34		1,700		1,508,101
							87,904,107
Consumer — 0.2%
Avon Products, Inc., Sr. Unsec’d. Notes	A2	5.75%	03/01/18		1,400		1,317,242
Newell Rubbermaid, Inc., Sr. Unsec’d. Notes	Baa2	6.25%	04/15/18		1,600		1,287,037
Whirlpool Corp., Sr. Unsec’d. Notes	Baa2	6.125%	06/15/11		1,045		930,542
							3,534,821
Electric — 1.3%
Appalachian Power Co., Sr. Unsec’d. Notes	Baa2	4.40%	06/01/10		790		773,050
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2	6.25%	08/01/16		170		136,692
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2	6.375%	10/15/11		1,250		1,176,654
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes	Baa2	6.35%	10/01/36		530		436,180
Carolina Power & Light Co., First Mtge. Bonds	A2	5.25%	12/15/15		660		669,555
CenterPoint Energy Houston Electric LLC, Mtge. Bonds	Baa2	5.70%	03/15/13		1,070		1,018,343
CenterPoint Energy Houston Electric LLC, Mtge. Bonds	Baa2	6.95%	03/15/33		300		275,829
Consolidated Edison, Inc., Sr. Unsec’d. Notes	A1	5.375%	12/15/15		820		804,864
Consolidated Edison, Inc., Sr. Unsec’d. Notes	A1	6.75%	04/01/38		130		138,901
Consumers Energy Co., First Mtge. Bonds, Series D	Baa1	5.375%	04/15/13		435		428,095
Dominion Resources, Inc., Sr. Unsec’d. Notes	Baa2	5.125%	12/15/09		1,255		1,252,238
Duke Energy Carolinas LLC, First Mtge. Bond	A2	6.05%	04/15/38		530		581,415
Duke Energy Carolinas LLC, Sr. Unsec’d. Notes	A3	6.10%	06/01/37		920		966,474
E.ON International Finance BV, Gtd. Notes, 144A	A2	6.65%	04/30/38		930		863,824
El Paso Electric Co., Sr. Unsec’d. Notes	Baa2	6.00%	05/15/35		845		579,220
Empresa Nacional de Electricidad S.A. (Chile), Unsec’d. Notes	Baa3	8.50%	04/01/09		1,350		1,372,777
Empresa Nacional de Electricidad S.A. (Chile), Unsub. Notes	Baa3	8.625%	08/01/15		1,160		1,254,846
Energy East Corp., Sr. Unsec’d. Notes	Baa2	6.75%	09/15/33		140		112,583
Exelon Corp., Sr. Unsec’d. Notes	Baa1	4.90%	06/15/15		195		159,867
Florida Power & Light Co., First Mtge. Bond	Aa3	5.95%	10/01/33		380		420,112
Georgia Power Co., Sr. Unsec’d. Notes, Series B	A2	5.70%	06/01/17		470		469,970
Indiana Michigan Power Co., Sr. Unsec’d. Notes	Baa2	5.05%	11/15/14		575		517,971
MidAmerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.75%	04/01/18		210		204,845
MidAmerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.95%	05/15/37		325		294,695
Nevada Power Co., Mtge. Bond	Baa3	6.50%	05/15/18		1,210		1,164,823
NiSource Finance Corp., Gtd. Notes	Baa3	5.45%	09/15/20		500		267,796
NRG Energy, Bank Loan(j)	Ba1	1.359%	02/01/13		439		379,414
NRG Energy, Bank Loan(j)	Ba1	2.675%	02/01/13		891		769,995
NSTAR Electric Co., Sr. Unsec’d. Notes	A1	4.875%	04/15/14		730		730,788
Oncor Electric Delivery Co., Sr. Sec’d. Notes	Baa3	6.375%	01/15/15		465		445,407
Oncor Electric Delivery Co., Sr. Sec’d. Notes	Baa3	7.00%	09/01/22		545		509,252

SEE NOTES TO FINANCIAL STATEMENTS.

A10

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Electric (continued)
Pacific Gas & Electric Co., Sr. Unsec’d. Notes	A3	6.05%	03/01/34	$	1,610	$	1,709,915
PPL Electric Utilities Corp., Sr. Sec’d. Notes	A3	6.25%	08/15/09		1,900		1,910,943
Public Service Co. of New Mexico, Sr. Unsec’d. Notes	Baa3	7.95%	05/15/18		135		109,857
Public Service Electric & Gas Co., Sec’d. Notes, M.T.N.	A3	5.80%	05/01/37		515		481,965
Southern California Edison Co., First Mtge. Bond	A2	4.65%	04/01/15		610		608,327
Texas Competitive Electric Holdings Co. LLC, Bank Loan(j)	Ba3	5.582%	10/10/14		988		682,609
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	5.613%	04/01/17		263		232,879
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	6.50%	07/01/36		445		408,564
							25,321,534
Energy — Integrated 0.1%
Phillips Petroleum Co., Sr. Unsec’d. Notes	A1	8.75%	05/25/10		1,900		2,002,475
TNK-BP Finance SA (Luxembourg), Gtd. Notes, 144A	Baa2	7.50%	07/18/16		1,365		709,800
							2,712,275
Energy — Other 0.3%
Devon Energy Corp., Gtd. Notes	Baa1	7.875%	09/30/31		280		308,309
Halliburton Co., Sr. Unsec’d. Notes	A2	5.50%	10/15/10		200		204,276
Nexen, Inc. (Canada), Sr. Unsec’d. Notes	Baa2	6.40%	05/15/37		195		152,584
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%	05/01/18		1,450		1,014,133
Valero Energy Corp., Sr. Unsec’d. Notes	Baa2	6.625%	06/15/37		250		183,876
Weatherford International, Inc. (Bermuda), Gtd. Notes	Baa1	6.50%	08/01/36		25		18,767
Weatherford International, Inc., Gtd. Notes	Baa1	6.35%	06/15/17		895		763,825
Woodside Finance Ltd. (Australia), Gtd. Notes, 144A	Baa1	5.00%	11/15/13		1,660		1,661,268
XTO Energy, Inc., Sr. Unsec’d. Notes	Baa2	6.25%	08/01/17		565		542,557
							4,849,595
Foods — 0.6%
Aramark Corp. Bank Loan(j)	Ba3	3.334%	01/26/14		1,658		1,359,741
Aramark Corp. Bank Loan(j)	Ba3	5.787%	01/26/14		105		86,384
Bunge Ltd. Finance Corp., Gtd. Notes	Baa2	5.35%	04/15/14		1,000		717,415
Cargill, Inc., Sr. Unsec’d. Notes, 144A	A2	6.00%	11/27/17		650		582,819
ConAgra Foods, Inc., Sr. Unsec’d. Notes	Baa2	7.875%	09/15/10		585		605,327
Delhaize Group (Belgium), Sr. Unsec’d. Notes(b)	Baa3	6.50%	06/15/17		460		417,677
Dr Pepper Snapple Group, Inc., Gtd. Notes, 144A	Baa3	6.82%	05/01/18		530		522,767
General Mills, Inc., Sr. Unsec’d. Notes	Baa1	6.00%	02/15/12		975		1,011,434
Kellogg Co., Sr. Unsec’d. Notes	A3	6.60%	04/01/11		1,285		1,344,880
Kroger Co. (The), Gtd. Notes	Baa2	6.75%	04/15/12		215		217,012
Kroger Co. (The), Gtd. Notes	Baa2	6.80%	04/01/11		575		593,693
McDonald’s Corp., Sr. Unsec’d. Notes, M.T.N.	A3	6.30%	03/01/38		1,140		1,257,426
Tricon Global Restaurants, Inc., Sr. Unsec’d. Notes	Baa3	8.875%	04/15/11		235		238,029
Tyson Foods, Inc., Gtd. Notes	Ba3	7.85%	04/01/16		785		580,900
Whitman Corp., Sr. Unsec’d. Notes	Baa1	6.375%	05/01/09		1,645		1,652,826
							11,188,330
Foreign Government Bonds — 0.2%
DP World Ltd., Bonds, 144A	A1	6.85%	07/02/37		1,610		829,259
Macquarie Bank Ltd., Gov’t. Liquid Gtd. Notes,144A	Aaa	4.10%	12/17/13		1,495		1,543,528
Pemex Project Funding Master Trust, Gtd. Notes	Baa1	8.625%	12/01/23		350		343,420
RSHB Capital SA for OJSC Russian Agricultural Bank (Luxembourg), Sr. Sec’d. Notes, 144A	A3	6.299%	05/15/17		2,100		1,197,000
							3,913,207
Gaming
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.50%	07/01/10		970		615,950
Healthcare & Pharmaceutical — 0.9%
Abbott Laboratories, Sr. Unsec’d. Notes	A1	5.875%	05/15/16		1,100		1,191,374
AmerisourceBergen Corp., Gtd. Notes	Baa3	5.625%	09/15/12		915		856,725

SEE NOTES TO FINANCIAL STATEMENTS.

A11

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Healthcare & Pharmaceutical (continued)
AstraZeneca PLC (United Kingdom), Sr. Unsec’d. Notes	A1	6.45%	09/15/37	$	480	$	545,606
Community Health Systems, Bank Loan(j)	Ba3	3.404%	07/25/14		81		62,955
Community Health Systems, Bank Loan(j)	Ba3	4.445%	07/25/14		1,588		1,230,959
Covidien International Finance SA (Luxembourg), Gtd. Notes	Baa1	6.00%	10/15/17		1,100		1,085,157
DaVita, Inc., Bank Loan(j)	Ba1	3.295%	10/05/12		1,200		1,043,143
Genentech, Inc., Sr. Unsec’d. Notes	A1	4.75%	07/15/15		270		271,637
GlaxoSmithKline Capital, Inc., Gtd. Notes(c)	A1	5.65%	05/15/18		780		819,256
GlaxoSmithKline Capital, Inc., Gtd. Notes	A1	6.375%	05/15/38		840		949,061
HCA, Inc., Bank Loan(j)	Ba3	3.709%	11/18/13		1,960		1,532,475
HCA, Inc., Sr. Sec’d. Notes	B2	9.25%	11/15/16		1,925		1,766,188
Health Management Associates, Inc. Term B, Bank Loan(j)	B1	3.209%	02/28/14		1,135		694,061
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes	Baa3	5.625%	12/15/15		560		471,311
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.75%	11/15/36		65		68,447
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.95%	12/01/28		205		218,331
Schering-Plough Corp., Sr. Unsec’d. Notes	Baa1	5.55%	12/01/13		695		700,082
Schering-Plough Corp., Sr. Unsec’d. Notes	Baa1	6.00%	09/15/17		842		833,503
Schering Plough Corp., Sr. Unsec’d. Notes	Baa1	6.55%	09/15/37		330		332,651
Teva Pharmaceutical Finance LLC (Israel), Gtd. Notes	Baa2	6.15%	02/01/36		115		113,694
Wyeth, Sr. Unsec’d. Notes	A3	5.50%	03/15/13		1,165		1,186,690
Wyeth, Sr. Unsec’d. Notes	A3	5.95%	04/01/37		1,645		1,826,421
Wyeth, Sr. Unsec’d. Notes	A3	6.45%	02/01/24		60		67,663
							17,867,390
Healthcare Insurance — 0.3%
Aetna, Inc., Sr. Unsec’d. Notes	A3	5.75%	06/15/11		430		420,033
Aetna, Inc., Sr. Unsec’d. Notes	A3	6.625%	06/15/36		480		399,566
Cigna Corp., Sr. Unsec’d. Notes	Baa2	6.15%	11/15/36		640		486,977
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		2,200		1,307,097
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	5.25%	03/15/11		1,470		1,382,188
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.00%	06/15/17		115		103,549
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.50%	06/15/37		400		335,741
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.625%	11/15/37		410		345,605
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.875%	02/15/38		430		376,512
WellPoint, Inc., Sr. Unsec’d. Notes	Baa1	5.00%	12/15/14		1,085		942,446
WellPoint, Inc., Sr. Unsec’d. Notes	Baa1	5.25%	01/15/16		335		296,561
							6,396,275
Insurance — 0.4%
American International Group, Inc., Jr. Sub. Debs., 144A(g)	Baa1	8.175%	05/15/58		860		334,562
American International Group, Inc., Jr. Sub. Notes	Baa1	6.25%	03/15/37		260		97,181
American International Group, Inc., Sr. Unsec’d. Notes	A3	4.25%	05/15/13		1,355		998,616
American International Group, Inc., Sr. Unsec’d. Notes	A3	5.05%	10/01/15		125		83,821
American International Group, Inc., Sr. Unsec’d. Notes, M.T.N.	A3	5.85%	01/16/18		1,620		1,085,861
AXA SA (France), Sub. Notes	A3	8.60%	12/15/30		230		150,599
Berkshire Hathaway, Inc., Gtd. Notes	Aaa	4.75%	05/15/12		425		436,274
Liberty Mutual Group, Bonds, 144A	Baa2	7.00%	03/15/34		910		540,188
Lincoln National Corp., Sr. Unsec’d. Notes	A3	6.30%	10/09/37		476		289,108
Marsh & McLennan Cos., Inc., Sr. Unsec’d. Notes	Baa2	5.15%	09/15/10		335		326,098
MetLife, Inc., Sr. Unsec’d. Notes	A2	5.70%	06/15/35		1,185		964,975
MetLife, Inc., Sr. Unsec’d. Notes	A2	6.125%	12/01/11		435		429,060
MetLife, Inc., Sr. Unsec’d. Notes	A2	6.375%	06/15/34		85		70,364
Travelers Cos., Inc. (The), Sr. Unsec’d. Notes	A2	6.75%	06/20/36		740		770,377
W.R. Berkley Corp., Sr. Unsub. Notes	Baa2	5.60%	05/15/15		705		590,687
W.R. Berkley Corp., Sr. Unsub. Notes	Baa2	6.15%	08/15/19		575		521,729
XL Capital Ltd. (Cayman Islands), Sr. Unsec’d. Notes	Baa2	5.25%	09/15/14		110		61,088
							7,750,588

SEE NOTES TO FINANCIAL STATEMENTS.

A12

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Lodging — 0.1%
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes	Baa3	6.25%	02/15/13	$	1,585	$	1,093,650
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes	Baa3	6.75%	05/15/18		2,700		1,485,000
							2,578,650
Media & Entertainment — 0.2%
Idearc, Inc., Bank Loan(j)	B2	1.97%	11/17/13		1,000		325,000
Idearc, Inc., Bank Loan(j)	B2	3.575%	11/17/14		473		144,126
News America Holdings, Inc., Gtd. Notes	Baa1	7.625%	11/30/28		1,265		1,268,818
Time Warner, Inc., Gtd. Notes	Baa2	6.75%	04/15/11		725		707,871
Time Warner, Inc., Gtd. Notes	Baa2	7.25%	10/15/17		745		683,772
Time Warner, Inc., Sr. Unsec’d. Notes	Baa2	9.15%	02/01/23		625		666,564
Viacom, Inc., Sr. Unsec’d. Notes	Baa3	6.75%	10/05/37		290		223,527
Viacom, Inc., Sr. Unsec’d. Notes	Baa3	6.875%	04/30/36		580		458,361
							4,478,039
Metals — 0.1%
Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB(d)	4.50%	05/15/13		255		186,934
Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB(d)	5.00%	06/01/15		755		559,055
Alcoa, Inc., Sr. Unsec’d. Notes	Baa1	5.90%	02/01/27		70		46,045
Rio Tinto Finance USA Ltd., Gtd. Notes	Baa1	5.875%	07/15/13		500		398,257
Southern Copper Corp., Sr. Unsec’d. Notes	Baa2	7.50%	07/27/35		120		89,784
United States Steel Corp., Sub. Notes	Baa3	5.65%	06/01/13		540		403,899
							1,683,974
Mortgage Backed Securities — 19.4%
Federal Home Loan Mortgage Corp.		4.50%	02/01/19-07/01/20		6,429		6,598,175
Federal Home Loan Mortgage Corp.		5.00%	07/01/18-05/01/34		11,658		11,998,276
Federal Home Loan Mortgage Corp.		5.00%	TBA 30 YR		2,500		2,554,688
Federal Home Loan Mortgage Corp.(g)		5.222%	12/01/35		3,099		3,147,534
Federal Home Loan Mortgage Corp.(g)		5.525%	06/01/36		2,926		2,979,118
Federal Home Loan Mortgage Corp.		5.50%	12/01/33-05/01/38		13,732		14,081,375
Federal Home Loan Mortgage Corp.		5.50%	TBA 30 YR		36,500		37,355,487
Federal Home Loan Mortgage Corp.		6.00%	03/01/32-12/01/33		3,020		3,128,362
Federal Home Loan Mortgage Corp.		6.50%	12/01/14-09/01/16		387		402,009
Federal Home Loan Mortgage Corp.		7.00%	05/01/31-09/01/33		4,722		4,962,526
Federal National Mortgage Association		4.00%	06/01/19		2,274		2,311,760
Federal National Mortgage Association(g)		4.142%	07/01/33		1,004		1,010,185
Federal National Mortgage Association		4.50%	11/01/18-01/01/35		14,811		15,165,378
Federal National Mortgage Association		5.00%	10/01/18-05/01/38		17,914		18,343,841
Federal National Mortgage Association		5.00%	TBA 30 YR		50,000		51,046,899
Federal National Mortgage Association		5.50%	03/01/16-01/01/38		55,472		57,004,060
Federal National Mortgage Association		5.50%	TBA 15 YR		2,000		2,059,376
Federal National Mortgage Association		5.50%	TBA 30 YR		14,250		14,606,250
Federal National Mortgage Association(g)		5.894%	06/01/37		5,974		6,146,895
Federal National Mortgage Association(g)		5.95%	07/01/37		4,829		4,966,699
Federal National Mortgage Association		6.00%	04/01/13-08/01/38		29,891		30,876,338
Federal National Mortgage Association		6.00%	TBA 30 YR		44,500		45,807,188
Federal National Mortgage Association		6.50%	07/01/17-01/01/37		10,792		11,233,993
Federal National Mortgage Association		7.00%	08/01/11-07/01/32		981		1,035,945
Federal National Mortgage Association		7.50%	05/01/12-05/01/32		759		798,167
Government National Mortgage Association		5.50%	08/15/33-04/15/36		9,849		10,173,378
Government National Mortgage Association		6.00%	11/15/23-03/15/37		5,392		5,573,216
Government National Mortgage Association		6.00%	TBA 30 YR		7,000		7,220,934
Government National Mortgage Association		6.50%	10/15/23-09/15/36		5,940		6,224,617
Government National Mortgage Association		7.00%	09/15/31		146		154,640
Government National Mortgage Association		8.00%	01/15/24-04/15/25		146		155,049
							379,122,358

SEE NOTES TO FINANCIAL STATEMENTS.

A13

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Non Captive Finance — 0.6%
Capital One Bank, Sr. Sub. Notes	A3	6.50%	06/13/13	$	10	$	8,911
Capital One Financial Corp., Sr. Unsec’d. Notes, M.T.N.	A3	5.70%	09/15/11		570		531,528
CIT Group, Inc., Sr. Unsec’d. Notes	Baa1	4.25%	02/01/10		195		178,771
Countrywide Financial Corp., Gtd. Notes, M.T.N.	Aa2	5.80%	06/07/12		1,160		1,130,597
General Electric Capital Corp., Sr. Unsec’d. Notes, M.T.N.(c)	Aaa	5.55%	05/04/20		1,875		1,792,742
General Electric Capital Corp., Sr. Unsec’d. Notes, M.T.N.(b)	Aaa	5.875%	01/14/38		970		949,494
Household Finance Corp., Sr. Unsec’d. Notes	Aa3	4.75%	05/15/09		370		369,862
HSBC Finance Corp., Sr. Unsec’d. Notes	Aa3	5.70%	06/01/11		585		570,484
International Lease Finance Corp., Sr. Unsec’d. Notes	Baa1	3.50%	04/01/09		750		712,130
International Lease Finance Corp., Sr. Unsec’d. Notes(b)	Baa1	6.375%	03/25/13		1,750		1,188,768
SLM Corp., Sr. Unsec’d. Notes, M.T.N.	Baa2	8.45%	06/15/18		4,725		3,735,685
							11,168,972
Paper — 0.1%
Domtar Corp., Bank Loan(j)	Baa3	3.251%	03/05/14		952		636,508
Plum Creek Timberlands LP, Gtd. Notes	Baa3	5.875%	11/15/15		515		420,631
							1,057,139
Pipelines & Other — 0.5%
Atmos Energy Corp., Sr. Unsec’d. Notes	Baa3	4.00%	10/15/09		1,815		1,777,584
Duke Energy Field Services Corp., Sr. Unsec’d. Notes	Baa2	7.875%	08/16/10		1,830		1,799,104
Enterprise GP Holdings LP, Bank Loan(j)	Ba2	5.357%	11/08/14		1,000		810,000
Enterprise Products Operating LP, Gtd. Notes	Baa3	4.625%	10/15/09		710		687,664
Enterprise Products Operating LP, Gtd. Notes	Baa3	6.875%	03/01/33		140		107,318
ONEOK Partners LP, Gtd. Notes	Baa2	6.65%	10/01/36		405		313,804
Sempra Energy, Sr. Unsec’d. Notes	Baa1	6.00%	02/01/13		80		76,804
Spectra Energy Capital LLC, Gtd. Notes	Baa1	6.20%	04/15/18		3,310		2,872,253
Spectra Energy Capital LLC, Sr. Unsec’d. Notes	Baa1	6.25%	02/15/13		205		195,056
TransCanada Pipelines Ltd., Sr. Unsec’d. Notes	A3	7.25%	08/15/38		420		418,077
							9,057,664
Railroads — 0.2%
Burlington Northern Santa Fe Corp., Sr. Unsec’d. Notes	Baa1	6.70%	08/01/28		735		719,294
CSX Corp. , Sr. Unsec’d. Notes	Baa3	6.15%	05/01/37		690		552,146
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	5.59%	05/17/25		630		564,673
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	7.80%	05/15/27		24		26,173
Union Pacific Corp., Sr. Unsec’d. Notes	Baa2	3.625%	06/01/10		1,395		1,382,826
Union Pacific Corp., Sr. Unsec’d. Notes	Baa2	6.65%	01/15/11		760		757,348
							4,002,460
Real Estate Investments Trusts — 0.3%
Brandywine Operating Partnership LP, Gtd. Notes	Baa3	5.75%	04/01/12		1,405		1,053,369
Mack-Cali Realty Corp., Sr. Unsec’d. Notes	Baa2	7.25%	03/15/09		1,595		1,575,799
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	5.45%	06/01/12		545		444,091
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	6.30%	06/01/13		650		523,482
Simon Property Group LP, Sr. Unsec’d. Notes	A3	5.75%	05/01/12		1,625		1,299,010
Simon Property Group LP, Sr. Unsec’d. Notes	A3	6.125%	05/30/18		2,700		1,824,396
							6,720,147
Retailers — 0.4%
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.75%	08/15/11		1,240		1,244,288
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.75%	06/01/17		1,580		1,487,521
Federated Retail Holdings, Inc., Gtd. Notes	Baa3	5.35%	03/15/12		815		605,360
Federated Retail Holdings, Inc., Gtd. Notes	Baa3	5.90%	12/01/16		100		60,711
Home Depot, Inc., Sr. Unsec’d. Notes	Baa1	5.875%	12/16/36		315		246,992
May Department Stores Co., Gtd. Notes	Baa3	6.65%	07/15/24		60		32,934
Nordstrom, Inc., Sr. Unsec’d. Notes	Baa1	6.25%	01/15/18		4,500		3,160,732
Target Corp., Sr. Unsec’d. Notes	A2	7.00%	01/15/38		1,475		1,367,023
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	5.25%	09/01/35		235		233,981
							8,439,542

SEE NOTES TO FINANCIAL STATEMENTS.

A14

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Structured Notes — 0.1%
CDX North America High Yield, Sec’d. Notes, Series 10-T, 144A	B3	8.875%	06/29/13	$	2,200	$	1,980,000
Technology — 0.5%
Computer Sciences Corp., Sr. Unsec’d. Notes, 144A	Baa1	6.50%	03/15/18		1,700		1,464,423
Dell, Inc., Sr. Unsec’d. Notes	A2	4.70%	04/15/13		1,565		1,472,279
Electronic Data Systems Corp., Sr. Unsec’d. Notes	A2	7.45%	10/15/29		120		129,998
First Data Corp., Bank Loan(j)	Ba3	3.211%	09/24/14		1,086		694,812
First Data Corp., Bank Loan(j)	Ba3	3.211%	09/24/14		1,481		947,471
Fiserv, Inc., Gtd. Notes	Baa2	6.125%	11/20/12		960		901,954
Flextronics International Ltd. (Singapore), Bank Loan(j)	Ba1	6.155%	10/01/14		767		480,701
Flextronics International Ltd. (Singapore), Bank Loan(j)	Ba1	7.069%	10/01/14		220		138,133
Intuit, Inc., Sr. Unsec’d. Notes	Baa2	5.40%	03/15/12		575		522,549
Jabil Circuit, Inc., Sr. Unsec’d. Notes	Ba1	5.875%	07/15/10		1,800		1,646,999
Metavante Corp., Bank Loan(j)	Ba2	4.942%	11/01/14		993		734,450
Motorola, Inc., Sr. Unsec’d. Notes	Baa2	8.00%	11/01/11		48		40,055
Oracle Corp., Sr. Unsec’d. Notes	A2	6.50%	04/15/38		620		682,595
							9,856,419
Telecommunications — 1.4%
America Movil SA de CV (Mexico), Gtd. Notes	A3	6.375%	03/01/35		630		534,247
AT&T Corp., Gtd. Notes(c)	A2	8.00%	11/15/31		1,400		1,758,589
AT&T Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.125%	05/01/12		800		857,895
AT&T Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.75%	03/01/31		1,235		1,543,856
BellSouth Corp., Sr. Unsec’d. Notes	A2	4.20%	09/15/09		1,365		1,370,355
British Telecommunications PLC (United Kingdom), Sr. Unsec’d. Notes	Baa1	9.125%	12/15/30		1,415		1,504,063
Cingular Wireless LLC, Sr. Unsec’d. Notes	A2	7.125%	12/15/31		535		562,264
Deutsche Telekom International Finance BV (Netherlands), Gtd. Notes	Baa1	8.75%	06/15/30		345		425,434
Embarq Corp., Sr. Unsec’d. Notes	Baa3	7.082%	06/01/16		350		269,500
Embarq Corp., Sr. Unsec’d. Notes	Baa3	7.995%	06/01/36		1,645		1,110,375
France Telecom SA (France), Sr. Unsec’d. Notes	A3	8.50%	03/01/31		360		451,977
PCCW HKT Capital Ltd., Gtd. Notes, 144A	Baa2	8.00%	11/15/11		2,275		2,222,584
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.00%	08/03/09		2,000		1,960,000
Qwest Capital Funding, Inc., Sr. Unsec’d. Notes	Ba1	8.875%	03/15/12		2,000		1,850,000
Rogers Communications, Inc. , Gtd. Notes	Baa3	6.80%	08/15/18		1,120		1,131,683
Royal KPN NV (Netherlands), Sr. Unsec’d. Notes	Baa2	8.00%	10/01/10		645		650,936
SBC Communications, Inc., Sr. Unsec’d. Notes	A2	4.125%	09/15/09		1,335		1,340,470
SBC Communications, Inc., Sr. Unsec’d. Notes	A2	5.30%	11/15/10		1,180		1,199,443
Telecom Italia Capital SA, Gtd. Notes	Baa2	6.999%	06/04/18		1,000		811,250
Telecom Italia Finance (Luxembourg), Gtd. Notes	Baa2	5.25%	11/15/13		170		129,625
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	7.045%	06/20/36		210		229,222
TELUS Corp. (Cananda), Sr. Unsec’d. Notes	Baa1	8.00%	06/01/11		1,500		1,491,882
US Cellular Corp., Sr. Unsec’d. Notes	Baa2	6.70%	12/15/33		255		183,778
Verizon Communications, Inc., Sr. Unsec’d. Notes(b)	A3	6.10%	04/15/18		3,500		3,487,368
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	6.25%	04/01/37		105		108,728
Vodafone Group PLC (United Kingdom), Sr. Unsec’d. Notes	Baa1	7.75%	02/15/10		950		970,914
							28,156,438
Tobacco — 0.2%
Altria Group, Inc., Gtd. Notes	Baa1	9.70%	11/10/18		1,315		1,421,292
Philip Morris International, Inc., Sr. Unsec’d. Notes	A2	4.875%	05/16/13		830		832,375
Reynolds American, Inc., Sr. Sec’d. Notes	Baa3	6.75%	06/15/17		910		722,345
Reynolds American, Inc., Sr. Sec’d. Notes	Baa3	7.25%	06/15/37		345		232,312
							3,208,324
U.S. Government Agency Obligations — 2.9%
Federal Farm Credit Bank		3.875%	10/07/13		2,480		2,635,878
Federal Farm Credit Bank		4.75%	05/07/10		280		294,637
Federal Farm Credit Bank		4.875%	01/17/17		845		952,274
Federal Home Loan Bank		4.75%	04/24/09		3,655		3,705,406

SEE NOTES TO FINANCIAL STATEMENTS.

A15

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Government Agency Obligations (continued)
Federal Home Loan Bank	5.00%	11/17/17	$	800	$	917,199
Federal Home Loan Bank	5.625%	06/11/21		2,320		2,673,232
Federal Home Loan Bank	5.75%	05/15/12		6,915		7,754,115
Federal Home Loan Mortgage Corp.	4.125%	09/27/13		2,325		2,505,250
Federal Home Loan Mortgage Corp.(b)	4.875%	06/13/18		1,015		1,166,529
Federal Home Loan Mortgage Corp.	5.25%	07/18/11-04/18/16		5,610		6,257,858
Federal National Mortgage Association	2.875%	12/11/13		8,175		8,373,432
Federal National Mortgage Association	3.625%	08/15/11		8,125		8,611,662
Federal National Mortgage Association	4.875%	05/18/12		500		544,485
Federal National Mortgage Association	6.125%	03/15/12		1,220		1,385,638
General Electric Capital Corp., FDIC Gtd. Notes.	3.00%	12/09/11		7,690		7,950,307
Tennessee Valley Authority, Notes	4.50%	04/01/18		1,390		1,533,447
Tennessee Valley Authority, Series B	5.88%	04/01/36		85		109,446
						57,370,795
U.S. Treasury Securities — 5.4%
United States Treasury Bonds(b)	4.375%	02/15/38		1,005		1,346,072
United States Treasury Bonds	4.50%	05/15/38		1,990		2,716,040
United States Treasury Bonds	6.00%	02/15/26		370		516,381
United States Treasury Bonds	6.125%	08/15/29		315		462,361
United States Treasury Bonds(b)	6.25%	08/15/23		10,640		14,511,961
United States Treasury Bonds(b)	7.50%	11/15/16		3,110		4,246,120
United States Treasury Bonds	7.875%	02/15/21		1,900		2,823,875
United States Treasury Bonds(c)	8.125%	05/15/21-08/15/21		2,395		3,634,765
United States Treasury Bonds(b)	8.875%	08/15/17		3,350		4,987,051
United States Treasury Inflation Index	0.63%	04/15/13		430		411,586
United States Treasury Inflation Index	0.88%	04/15/10		1,475		1,386,463
United States Treasury Inflation Index	1.375%	07/15/18		1,678		1,569,119
United States Treasury Inflation Index	1.625%	01/15/15-01/15/18		1,835		1,715,745
United States Treasury Inflation Index	1.75%	01/15/28		626		578,035
United States Treasury Inflation Index(b)	1.875%	07/15/13-07/15/15		4,282		4,034,291
United States Treasury Inflation Index(b)	2.00%	04/15/12-01/15/26		11,151		10,584,098
United States Treasury Inflation Index	2.375%	04/15/11-01/15/27		3,504		3,460,683
United States Treasury Inflation Index	2.50%	07/15/16		858		851,428
United States Treasury Inflation Index	2.625%	07/15/17		674		690,916
United States Treasury Inflation Index	3.00%	07/15/12		1,379		1,352,003
United States Treasury Inflation Index	3.375%	01/15/12-04/15/32		604		655,550
United States Treasury Inflation Index	3.50%	01/15/11		492		482,576
United States Treasury Inflation Index	3.625%	04/15/28		830		989,356
United States Treasury Inflation Index	3.875%	04/15/29		922		1,139,345
United States Treasury Inflation Index	4.25%	01/15/10		522		512,176
United States Treasury Notes	1.50%	12/31/13		11,100		11,074,847
United States Treasury Notes	3.75%	11/15/18		509		575,637
United States Treasury Notes	4.00%	09/30/09		405		415,916
United States Treasury Strips(b)(f)	3.01%	02/15/19		2,345		1,737,019
United States Treasury Strips(f)	3.13%	08/15/19		1,630		1,175,031
United States Treasury Strips(b)(f)	3.81%	02/15/20		10,100		7,062,051
United States Treasury Strips(b)(f)	3.94%	05/15/20		17,395		11,961,881
United States Treasury Strips(f)	4.18%	02/15/23		1,495		935,148
United States Treasury Strips(b)(f)	4.21%	11/15/21		4,775		3,095,809
United States Treasury Strips(f)	4.25%	08/15/29		4,455		2,358,000
						106,049,335
TOTAL LONG-TERM BONDS (cost $950,120,223)						901,856,419
TOTAL LONG-TERM INVESTMENTS (cost $1,894,051,924)						1,797,211,331

SEE NOTES TO FINANCIAL STATEMENTS.

A16

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

SHORT-TERM INVESTMENTS — 23.0%	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Treasury Security — 0.5%
United States Treasury Bill(k) (cost $9,045,953)	0.10%	06/11/09	$	9,050	$	9,044,688
			Shares
Affiliated Mutual Funds — 22.5%
Dryden Core Investment Fund — Short-Term Bond Series (Note 4)(i)				14,895,019		109,627,339
Dryden Core Investment Fund — Taxable Money Market Series (includes $143,440,658 of cash collateral received for securities on loan) (Note 4)(h)(i)				331,002,077		331,002,077
TOTAL AFFILIATED MUTUAL FUNDS (cost $478,766,482)						440,629,416
TOTAL SHORT-TERM INVESTMENTS (cost $487,812,435)						449,674,104
TOTAL INVESTMENTS(o) — 114.8% (cost $2,381,864,359)						2,246,885,435
LIABILITIES IN EXCESS OF OTHER ASSETS(p) — (14.8)%						(289,359,804	)
NET ASSETS — 100.0%					$	1,957,525,631

The following abbreviations are used in portfolio descriptions:

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.
I/O	Interest Only
M.T.N.	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor
TBA	To Be Announced

* The ratings reflected are as of December 31, 2008. Ratings of certain bonds may have changed subsequent to that date.

(a) Non-income producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $138,390,357; cash collateral of $143,440,658 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Security segregated as collateral for futures contracts.

(d) Standard & Poor’s rating.

(e) Increase/decrease in rate variable upon increase/decrease in Moody’s or Standard & Poor’s rating.

(f) Represents zero coupon bond. Rate shown reflects the effective yield at reporting date.

(g) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(h) Represents security, or a portion thereof, purchased with cash collateral for securities on loan.

(i) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series and Dryden Core Investment Fund—Short-Term Bond Series.

(j) Indicates a security that has been deemed illiquid.

(k) Rate quoted represents yield-to-maturity as of purchase date.

(l) Represents issuer in default on interest payments and/or principal repayment; non income producing security.

(m) Fractional shares.

(n) Less than $0.50.

(o) As of December 31, 2008, 2 securities representing $298 and 0.0% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

SEE NOTES TO FINANCIAL STATEMENTS.

A17

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(p) Liabilities in excess of other assets include unrealized appreciation (depreciation) on financial futures, credit default swaps and interest rate swaps as follows:

Open futures contracts outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2008		Unrealized Appreciation
Long Positions:
344	S&P 500 Index	Mar. 2009	$	77,098,250	$	77,408,600	$	310,350
45	U.S. Treasury 2 Yr. Notes	Mar. 2009		9,754,958		9,812,813		57,855
447	U.S. Treasury 5 Yr. Notes	Mar. 2009		52,174,324		53,217,445		1,043,121
126	U.S. Treasury 10 Yr. Notes	Mar. 2009		14,834,137		15,844,500		1,010,363
87	U.S. Treasury 30 Yr. Bond	Mar. 2009		11,358,183		12,010,078		651,895
							$	3,073,584

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation/ (Depreciation)
Buy Protection(1):
Citibank NA	09/20/2012	$	3,200	0.32%	Altria Group, Inc., 7.00%, 11/04/13	$	114,248
Barclays Bank PLC	09/20/2012		2,800	0.595%	Fortune Brands, Inc., 5.375%, 01/15/16		129,315
Deutsche Bank AG	06/20/2013		1,750	2.00%	International Lease Finance Corp., 4.15%, 01/15/10		343,295
JPMorgan Chase Bank	06/20/2014		1,110	0.65%	Bunge Ltd. Finance Corp., 5.35%, 04/15/14		248,050
Merrill Lynch Capital Services	09/20/2016		785	1.73%	Tyson Foods, Inc., 6.6%, 04/01/16		113,682
Morgan Stanley Capital Services, Inc.	03/20/2018		1,400	0.70%	Avon Products, Inc., 7.15%, 11/15/09		30,340
Barclays Bank PLC	03/20/2018		1,700	1.22%	Computer Sciences Corp., 5.0%, 02/15/13		(22,171	)
Morgan Stanley Capital Services, Inc.	06/20/2018		1,600	1.00%	Newell Rubbermaid, Inc., 6.35%, 07/15/28		101,088
Citibank NA	03/25/2035		523	3.00%	Centex Home Equity, 6.215%, 03/25/35		250,826
Citibank NA	01/25/2035		506	3.00%	Morgan Stanley ABS Capital I, 6.765%, 01/25/35		316,016
Barclays Bank PLC	09/25/2035		1,000	3.35%	Accredited Mortgage Loan Trust, 7.02%, 09/25/35		935,634
Merrill Lynch Capital Services, Inc.	03/25/2036		1,000	3.72%	AmeriQuest Mortgage Securities Inc., 7.82%, 3/25/36		959,705
Merrill Lynch Capital Services, Inc.	06/20/2018		1,800	3.05%	SLM Corp. 5.125%, 8/27/12		333,711
Goldman Sachs International	09/20/2013		1,200	1.02%	Anheuser-Busch Cos., Inc. 5.525%, 10/1/10		53,475
Deutsche Bank AG	03/20/2018		4,500	0.99%	Nordstrom, Inc. 6.95%, 3/15/26		995,637
Morgan Stanley Capital Services, Inc.	06/20/2018		2,700	0.97%	Simon Property Group LP 5.25%, 12/1/18		807,789
Merrill Lynch Capital Services, Inc.	06/20/2018		2,700	1.45%	Starwood Hotels & Resorts Worldwide, Inc. 6.75%, 5/15/18		714,680
Credit Suisse International	06/20/2018		3,500	0.97%	Verizon Communications, Inc. 4.90%, 9/15/15		120,215
Deutsche Bank AG	06/20/2018		2,800	1.15%	Spectra Energy Capital LLC 6.25%, 2/15/13		164,388
						$	6,709,923

SEE NOTES TO FINANCIAL STATEMENTS.

A18

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008 (continued):

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value(3)	Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Asset-Backed Issues-Sell Protection(2):
Merrill Lynch Capital Services, Inc.	03/25/2036	$	1,000	9.00%	AmeriQuest Mortgage Securities, Inc., 7.82%, 03/25/36	$(950,949)	$	—	$	(950,949	)
									$	5,758,974

The Portfolio entered into credit default swaps as the protection seller on asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date.

(4) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

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

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(a)	8/15/2015	$	1,235	3.712%	3 month LIBOR	$	(103,475	)
Merrill Lynch Capital Services, Inc.(a)	5/15/2016		2,465	4.397%	3 month LIBOR		(331,387	)
Deutsche Bank AG(a)	5/15/2016		445	4.490%	3 month LIBOR		(62,639	)
Merrill Lynch Capital Services, Inc.(b)	10/10/2013		2,465	3.784%	3 month LIBOR		179,554
Citibank, NA(b)	10/20/2013		2,465	4.059%	3 month LIBOR		210,962
						$	(106,985	)

(a) Portfolio pays the fixed rate and receives the floating rate.

(b) Portfolio pays the floating rate and receives the fixed rate.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	1,335,984,030	$	3,073,584
Level 2—Other Significant Observable Inputs		910,901,405		4,140,757
Level 3—Significant Unobservable Inputs		—		1,511,232
Total	$	2,246,885,435	$	8,725,573

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A19

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities		Other Financial Instruments
Balance as of 12/31/07	$	—	$	1,609,091
Realized gain (loss)		—		*
Change in unrealized appreciation (depreciation)		—		(74,090	)
Net purchases (sales)		—		—
Transfers in and/or out of Level 3		—		(23,769	)
Balance as of 12/31/08	$	—	$	1,511,232

* The realized gain earned during the period for other financial instruments was $1,437,589.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Mutual Funds (including 7.3% of collateral received for securities on loan)	22.5	%
Mortgage Backed Securities	19.4
U.S. Treasury Securities	5.9
Oil, Gas & Consumable Fuels	5.3
Commercial Mortgage Backed Securities	4.5
Pharmaceuticals	3.6
U.S. Government Agency Obligations	2.9
Computers & Peripherals	1.9
Diversified Telecommunication Services	1.7
Software	1.7
Insurance	1.6
Aerospace & Defense	1.5
Diversified Financial Services	1.5
Food & Staples Retailing	1.5
Household Products	1.5
Banking	1.4
Commercial Banks	1.4
Telecommunications	1.4
Electric	1.3
Industrial Conglomerates	1.3
Beverages	1.2
Chemicals	1.2
Media	1.2
Capital Markets	1.1
Communications Equipment	1.1
Electric Utilities	1.1
Tobacco	1.1
Biotechnology	1.0
Healthcare Equipment & Supplies	1.0
Healthcare Providers & Services	1.0
Semiconductors & Semiconductor Equipment	1.0
Asset Backed Securities	0.9
Healthcare & Pharmaceutical	0.9
Food Products	0.8
Machinery	0.8
Specialty Retail	0.8
Energy Equipment & Services	0.7
Hotels, Restaurants & Leisure	0.7
Multi-Utilities	0.7
Real Estate Investment Trust	0.7
Collateralized Mortgage Obligations	0.6
Foods	0.6
Internet Software & Services	0.6
Non Captive Finance	0.6
Air Freight & Logistics	0.5
Pipelines & Other	0.5
Road & Rail	0.5

Technology	0.5	%
Cable	0.4
IT Services	0.4
Metals & Mining	0.4
Retailers	0.4
Brokerage	0.3
Capital Goods	0.3
Healthcare Insurance	0.3
Multiline Retail	0.3
Energy – Other	0.3
Commercial Services & Supplies	0.2
Consumer Finance	0.2
Airlines	0.2
Consumer	0.2
Electrical Equipment	0.2
Foreign Government Bonds	0.2
Household Durables	0.2
Life Sciences Tools & Services	0.2
Media & Entertainment	0.2
Railroads	0.2
Textiles, Apparel & Luxury Goods	0.2
Auto Components	0.1
Automobiles	0.1
Automotive	0.1
Building Materials & Construction	0.1
Construction & Engineering	0.1
Containers & Packaging	0.1
Diversified Consumer Services	0.1
Electronic Equipment & Instruments	0.1
Energy – Integrated	0.1
Gas Utilities	0.1
Independent Power Producers & Energy Traders	0.1
Internet & Catalog Retail	0.1
Leisure Equipment & Products	0.1
Lodging	0.1
Metals	0.1
Paper	0.1
Paper & Forest Products	0.1
Personal Products	0.1
Professional Services	0.1
Structured Notes	0.1
Thrifts & Mortgage Finance	0.1
Trading Companies & Distributors	0.1
Wireless Telecommunication Services	0.1
	114.8
Liabilities in excess of other assets	(14.8	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A20

CONSERVATIVE BALANCED PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $138,390,357:
Unaffiliated investments (cost $1,903,097,877)	$	1,806,256,019
Affiliated investments (cost $478,766,482)		440,629,416
Foreign currency, at value (cost $61,269)		62,568
Receivable for investments sold		35,171,192
Dividends and interest receivable		9,472,789
Unrealized appreciation on swaps		7,122,610
Due from broker—variation margin		361,641
Foreign tax reclaim receivable		322,148
Premium for swaps purchased		308,734
Prepaid expenses		30,023
Receivable for Series shares sold		7,663
Total Assets		2,299,744,803
LIABILITIES
Payable for investments purchased		186,224,372
Collateral for securities on loan		143,440,658
Payable to custodian		9,237,323
Unrealized depreciation on swaps		1,470,621
Management fee payable		898,815
Payable for Series shares repurchased		638,831
Accrued expenses and other liabilities		307,850
Affiliated transfer agent fee payable		702
Total Liabilities		342,219,172
NET ASSETS	$	1,957,525,631
Net assets were comprised of:
Paid-in capital	$	2,113,267,984
Retained earnings		(155,742,353	)
Net assets, December 31, 2008	$	1,957,525,631
Net asset value and redemption price per share, $1,957,525,631 / 154,295,785 outstanding shares of beneficial interest	$	12.69

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest	$	44,422,711
Unaffiliated dividend income (net of foreign withholding taxes of $333,574)		28,834,754
Affiliated dividend income		13,212,691
Affiliated income from securities loaned, net		1,778,072
		88,248,228
EXPENSES
Management fee		13,051,807
Custodian’s fees and expenses		474,000
Shareholders’ reports		349,000
Trustees’ fees		40,000
Interest expense (Note 8)		38,023
Audit fee		36,000
Insurance expenses		30,000
Legal fees and expenses		17,000
Commitment fee on syndicated credit agreement		13,000
Transfer agent’s fee and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Miscellaneous		43,544
Total expenses		14,096,374
NET INVESTMENT INCOME		74,151,854
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(2,193,469))		(37,651,704	)
Short sale transactions		(233,023	)
Futures transactions		(29,870,404	)
Swap agreement transactions		2,841,502
Foreign currency transactions		(151,699	)
		(65,065,328	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $(29,774,501))		(570,712,515	)
Futures		3,643,456
Swaps		3,356,506
Foreign currencies		(4,217	)
		(563,716,770	)
NET LOSS ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		(628,782,098	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(554,630,244	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	74,151,854		$	81,811,715
Net realized gain (loss) on investment, swap agreement and foreign currency transactions		(65,065,328	)		91,118,299
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		(563,716,770	)		(8,785,193	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(554,630,244	)		164,144,821
DISTRIBUTIONS		(81,811,715	)		(80,805,076	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,194,754 and 894,544 shares, respectively]		16,824,187			14,946,386
Series shares issued in reinvestment of distributions [5,295,257 and 4,870,710 shares, respectively]		81,811,715			80,805,076
Series shares repurchased [15,304,061 and 13,534,553 shares, respectively]		(226,520,392	)		(227,819,116	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(127,884,490	)		(132,067,654	)
TOTAL DECREASE IN NET ASSETS		(764,326,449	)		(48,727,909	)
NET ASSETS:
Beginning of year		2,721,852,080			2,770,579,989
End of year	$	1,957,525,631		$	2,721,852,080

SEE NOTES TO FINANCIAL STATEMENTS.

A21

	DIVERSIFIED BOND PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 98.7% LONG-TERM BONDS — 95.3%	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Airlines — 1.1%
American Airlines, Inc., Pass-Thru Certificates, Series 2001-1	B1	6.817%	05/23/11	$	2,750	$	1,760,000
Continental Airlines, Inc., Pass-Thru Certificates, Series 2000-1, Class A-1	Ba1	7.373%	12/15/15		1,067		618,920
Continental Airlines, Inc., Pass-Thru Certificates, Series 2000-1, Class A-1(h)	Baa2	6.703%	06/15/21		3		2,196
Continental Airlines, Inc., Pass-Thru Certificates, Series 2000-1, Class A-1(h)	Baa2	7.487%	10/02/10		7,954		7,158,600
Continental Airlines, Inc., Pass-Thru Certificates, Series A(a)	Baa1	5.983%	04/19/22		1,850		1,239,500
Delta Air Lines, Inc., Pass-Thru Certificates	Baa1	6.821%	08/10/22		1,734		1,101,284
United Airlines, Inc., Pass-Thru Certificates, Series 2007-1, Class A	Ba1	6.636%	07/02/22		1,237		729,769
							12,610,269
Asset-Backed Securities — 2.5%
American Express Credit Account Master Trust, Series 2004-C, Class C, 144A(f)	Baa1	1.695%	02/15/12		98		84,820
AmeriQuest Mortgage Securities, Inc., Series 2001-2, Class M3(f)	Baa2	3.396%	10/25/31		725		479,388
AmeriQuest Mortgage Securities, Inc., Series 2003-AR3, Class M6(f)(h)	Baa3	6.5005%	10/25/33		1,600		235,202
Amortizing Residential Collateral Trust, Series 2002-BC7, Class M2(f)	CCC(e)	1.821%	10/25/32		134		13,216
Argent Securities, Inc. Series 2003-W2, Class M4(f)	Baa1	6.776%	09/25/33		2,400		2,077,368
Asset Backed Funding Certificates, Series 2004-OPT1, Class M1(f)	Aa2	1.171%	08/25/33		2,592		1,269,628
Asset Backed Securities Corp. Home Equity, Series 2003-HE3, Class M1(f)	Aa1	2.44%	06/15/33		2,346		1,388,552
Bank of America Credit Card Trust, Series 2006-C5, Class C5(f)	Baa2	1.595%	01/15/16		5,750		2,065,487
CDC Mortgage Capital Trust, Series 2002-HE3, Class M2(f)	Ba3	3.846%	03/25/33		355		23,596
Citibank Credit Card Issuance Trust, Series 2003-C4, Class C-4	Baa2	5.00%	06/10/15		6,500		3,505,096
Citigroup Mortgage Loan Trust, Inc., Series 2004-RES1, Class M3(f)	Aa3	1.551%	11/25/34		890		756,946
Countrywide Asset-Backed Certificates, Series 2004-12, Class MV3(f)	Aa3	1.131%	03/25/35		2,670		1,207,382
CS First Boston Mortgage Securities Corp., Series 2002-HE4, Class M2(f)	Baa3	2.7213%	08/25/32		174		22,042
Equity One ABS, Inc., Series 2004-3, Class M1	Aa2	5.70%	07/25/34		2,100		1,475,254
FBR Securitization Trust, Series 2005-2, Class M1(f)	Aa1	.95%	09/25/35		3,600		2,509,670
First Franklin Mortgage Loan Asset-Backed Certificates, Series 2005-FF6, Class M2(f)	Aa2	.91%	05/25/36		2,575		1,314,411
Ford Credit Auto Owner Trust, Series 2006-B, Class C	Baa1	5.68%	06/15/12		2,100		1,590,689
Fremont Home Loan Trust, Series 2003-B, Class M1	Aa1	1.521%	12/25/33		435		210,751
HFC Household Home Equity Loan Trust Asset-Backed Certificates, Series 2006-2, Class A1(f)	Aaa	.66%	03/20/36		400		280,908
IXIS Real Estate Capital Trust, Series 2006-HE1, Class A4(f)	Baa3	.77%	03/25/36		3,200		1,806,359
Morgan Stanley ABS Capital I, Series 2002-NC6, Class M2(f)	Ba2	3.621%	11/25/32		174		29,487
Morgan Stanley ABS Capital I, Series 2003-HE1, Class M1(f)	Aa2	1.671%	05/25/33		2,187		1,249,322
New Century Home Equity Loan Trust, Series 2004-4, Class M1(f)	Aa1	.98%	02/25/35		3,680		1,441,626
Residential Asset Mortgage Products, Inc., Series 2004-RS12, Class MII2(f)(h)	Aa3	1.271%	12/25/34		2,100		1,672,135
Residential Asset Securities Corp., Series 2004-KS1, Class AI5	Aaa	5.221%	02/25/34		1,000		526,575
Saxon Asset Securities Trust, Series 2002-3, Class M1(f)	Aaa	1.596%	12/25/32		1,155		797,375
Securitized Asset Backed Receivables LLC Trust, Series 2006-FR1, Class M1(f)	Baa2	.87%	11/25/35		2,000		235,252
Structured Asset Securities Corp., Series 2002-HF2, Class M3(f)(h)	B(e)	3.471%	07/25/32		1,345		579,462
							28,847,999
Banking — 3.2%
Alfa MTN Markets Ltd. for ABH Financial Ltd. (Cypress), 144A	Ba1	8.20%	06/25/12		1,500		870,000
Banc of America Corp., Notes	A1	8.00%	12/29/49		3,500		2,517,508
Bank of America Corp., Sr. Unsec’d. Notes	Aa2	5.65%	05/01/18		1,420		1,428,426
Bank of America Corp., Sub. Notes	Aa2	5.30%	03/15/17		790		750,126
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa2	7.25%	02/01/18		1,575		1,725,973
Chuo Mitsui Trust & Banking Co. Ltd., Jr. Sub. Notes (Japan), 144A(f)	A2	5.506%	12/29/49		3,050		2,098,812
Citigroup, Inc., Jr. Sub. Notes(a)(f)	Baa2	8.40%	04/29/49		5,150		3,400,494

SEE NOTES TO FINANCIAL STATEMENTS.

A22

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Banking (continued)
Credit Suisse, Sub. Notes (Switzerland)	Aa2	6.00%	02/15/18	$	610	$	560,178
Depfa ACS Bank (Ireland), 144A	Aa1	5.125%	03/16/37		3,065		2,219,437
HSBC Holdings PLC, Sub. Notes (United Kingdom)	Aa3	6.50%	09/15/37		2,255		2,290,144
HSBC Holdings PLC, Sub. Notes (United Kingdom),	Aa3	6.80%	06/01/38		1,970		2,081,778
HSBK Europe BV, Gtd. Notes (Netherlands), 144A	Baa3	7.25%	05/03/17		2,230		1,204,200
ICICI Bank Ltd., Jr. Sub. Notes (India), 144A(a)(f)	Baa2	7.25%	12/31/49		2,380		1,144,656
ICICI Bank Ltd., Notes (Singapore), 144A	Baa2	5.75%	11/16/10		2,500		2,124,175
JPMorgan Chase & Co., Jr. Sub. Notes(f)	A1	7.90%	04/29/49		2,180		1,813,389
KBC Bank Funding Trust III, Gtd. Notes 144A(f)	A1	9.86%	11/29/49		5,000		2,289,255
Krung Thai Bank PCL, Sub. Notes (Thailand)(f)	Baa3	7.378%	10/29/49		1,590		738,965
Northern Rock PLC, Sub. Notes (United Kingdom), 144A(f)	B3	6.594%	06/29/49		920		349,600
Resona Bank Ltd., Notes, 144A(f)	A2	5.85%	09/29/49		2,900		1,643,943
Sumitomo Mitsui Banking Corp., Sub. Notes (Japan), 144A(f)	Aa3	5.625%	07/29/49		6,380		4,724,850
							35,975,909
Brokerage — 1.0%
Goldman Sachs Group, Inc., Sr. Unsec’d Notes	A1	6.15%	04/01/18		3,105		2,983,784
Goldman Sachs Group, Inc., Sub. Notes	A2	6.75%	10/01/37		440		357,222
Lehman Brothers Holdings, Inc., Jr. Sub. Notes(i)	NR	6.50%	07/19/17		1,210		121
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(i)	NR	6.875%	05/02/18		2,740		260,300
Merrill Lynch & Co., Inc., Notes, MTN(a)	Aa3	6.875%	04/25/18		2,860		2,991,634
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, MTN	Aa3	6.05%	08/15/12		1,500		1,479,869
Merrill Lynch & Co., Inc., Sub. Notes	A3	6.11%	01/29/37		275		247,204
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.45%	01/09/17		4,035		3,325,978
							11,646,112
Building Materials & Construction — 0.3%
American Standard, Inc., Gtd. Notes(a)	Baa3	7.625%	02/15/10		3,800		3,799,966
Cable — 0.3%
AT&T Broadband, Gtd. Notes	Baa2	9.455%	11/15/22		1,065		1,193,181
TCI Communications, Inc., Gtd. Notes	Baa2	7.875%	02/15/26		750		778,238
Time Warner Cable ,Inc., Gtd. Notes(a)	Baa2	8.25%	02/14/14		1,100		1,115,913
							3,087,332
Capital Goods — 0.7%
Rockwell International Co., Sr. Unsec’d Notes	A2	5.20%	01/15/98		6,500		5,851,722
Waste Management, Inc., Sr. Unsec’d Notes	Baa3	7.65%	03/15/11		2,100		2,095,901
							7,947,623
Chemicals — 1.1%
Huntsman International LLC, Sec’d. Notes	Ba1	11.625%	10/15/10		2,100		1,837,500
Lubrizol Corp., Gtd. Notes	Baa2	4.625%	10/01/09		5,600		5,500,539
Potash Corp. of Saskatchewan, Sr. Unsec’d. Notes (Canada)	Baa1	5.875%	12/01/36		3,180		2,800,874
Union Carbide Chemical & Plastics Co., Gtd Notes	Ba2	7.875%	04/01/23		3,058		2,734,861
							12,873,774
Collateralized Mortgage Obligations — 0.5%
Countrywide Alternative Loan Trust, Series 2004-18CB, Class 3A1	Aaa	5.25%	09/25/19		1,937		1,766,106
Master Alternative Loan Trust, Series 2004-4, Class 4A1	Aaa	5.00%	04/25/19		428		396,292
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-1, Class 4A3(f)	Aaa	5.3648%	02/25/34		2,714		1,685,437
Washington Mutual Mortgage Pass-Through Certificates, Series 2005-1, Class 3A	AAA(e)	5.00%	03/25/20		1,453		1,165,312
							5,013,147
Commercial Mortgage-Backed Securities — 7.8%
Banc of America Commercial Mortgage, Inc., Series 2005-1, Class ASB(f)	AAA(e)	4.9667%	11/10/42		5,275		4,475,969
Banc of America Commercial Mortgage, Inc., Series 2007-4, Class A3(f)	AAA(e)	5.8117%	02/10/51		3,805		2,487,671

SEE NOTES TO FINANCIAL STATEMENTS.

A23

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Commercial Mortgage-Backed Securities (continued)
Bear Stearns Commercial Mortgage Securities, Inc., Series 2005-T18, Class AAB(f)	Aaa	4.823%	02/13/42	$	2,475	$	1,961,631
Bear Stearns Commercial Mortgage Securities, Inc., Series 2005-T20, Class AAB(f)	Aaa	5.135%	10/12/42		3,400		2,785,439
Citigroup Commercial Mortgage Trust, Series 2008-C7, Class A2A	Aaa	6.034%	12/10/49		3,620		3,216,457
Commercial Mortgage Load Trust, Series 2008-LS1, Class A2(f)	Aaa	6.0197%	12/10/49		3,000		2,368,632
CS First Boston Mortgage Securities Corp., Ser. 2005-C5, Class A4(f)	AAA(e)	5.10%	08/15/38		2,400		1,963,927
GMAC Commercial Mortgage Securities, Inc., Series 2002-C3, Class A2	Aaa	4.93%	07/10/39		8,500		7,681,435
Greenwich Capital Commercial Funding Corp., Series 2003-C1, Class A4	Aaa	4.111%	07/05/35		12,700		11,034,164
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A5(f)	Aaa	5.224%	04/10/37		2,400		1,972,327
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A2	Aaa	5.381%	03/10/39		3,610		2,845,615
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1A, Class A2	Aaa	4.767%	03/12/39		4,969		4,389,857
JP Morgan Chase Commerical Mortgage Securities Corp., Series 2005-LDP2, Class ASB	Aaa	4.659%	07/15/42		9,300		7,573,614
JP Morgan Chase Commerical Mortgage Securities Corp., Series 2007-LDPX, Class A2	Aaa	5.434%	01/15/49		1,520		949,623
LB-UBS Commercial Mortgage Trust, Series 2003-C8, Class A3	Aaa	4.83%	11/15/27		3,375		3,118,547
LB-UBS Commercial Mortgage Trust, Series 2004-C8, Class A6(f)	Aaa	4.799%	12/15/29		4,200		3,473,526
LB-UBS Commerical Mortgage Trust, Series 2006-C6, Class AAB	Aaa	5.341%	09/15/39		7,126		5,355,076
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4(f)	Aaa	5.909%	06/12/46		2,325		1,862,825
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-9, Class A2	AAA(e)	5.59%	09/12/49		2,400		1,841,797
PNC Mortgage Acceptance Corp., Series 2001-C1, Class A1	Aaa	5.91%	03/12/34		774		767,585
Wachovia Bank Commercial Mortgage Trust, Series 2002-C2, Class A4	Aaa	4.98%	11/15/34		2,500		2,217,796
Wachovia Bank Commercial Mortgage Trust, Series 2003-C3, Class A2	AAA(e)	4.867%	02/15/35		7,330		6,525,716
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A3	AAA(e)	4.608%	12/15/35		4,401		4,091,838
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class APB	Aaa	4.807%	04/15/42		1,500		1,218,032
Wachovia Bank Commercial Mortgage Trust, Series 2007-C34, Class A2	Aaa	5.569%	05/15/46		3,600		2,767,539
							88,946,638
Consumer
Realogy Corp., Gtd. Notes, PIK	Ca	11.00%	04/15/14		2,118		243,513
Electric — 2.1%
CenterPoint Energy Houston Electric LLC, Series J2	Baa2	5.70%	03/15/13		2,950		2,807,580
Consumers Energy Co., Series D	Baa1	5.375%	04/15/13		1,000		984,127
EDP Finance BV (Netherlands), 144A	A2	6.00%	02/02/18		600		498,088
El Paso Electric Co., Sr. Unsec’d Notes	Baa2	6.00%	05/15/35		2,325		1,593,713
Empresa Nacional de Electricidad SA, Unsub. Notes (Chile)	Baa3	8.35%	08/01/13		625		660,029
Energy East Corp., Sr. Unsec’d. Notes	Baa2	6.75%	09/15/33		1,150		924,792
Energy East Corp., Sr. Unsub. Notes	Baa2	6.75%	06/15/12		750		751,616
Enersis SA, Sr. Unsec’d. Notes (Chile)	Baa3	7.375%	01/15/14		3,700		3,853,332
Exelon Corp., Sr. Unsec’d. Notes	Baa1	4.90%	06/15/15		500		409,915
Exelon Generation Co. LLC, Sr. Unsec’d. Notes	A3	6.20%	10/01/17		1,930		1,659,823
Korea East-West Power Co. Ltd., Sr. Unsub. Notes (South Korea), 144A	A1	4.875%	04/21/11		1,700		1,624,064
NiSource Finance Corp., Gtd. Notes	Baa3	5.45%	09/15/20		1,345		720,370
Northern States Power Co., Series B	A2	8.00%	08/28/12		2,800		2,952,849
Orion Power Holdings, Inc., Sr. Unsec’d Notes	Ba3	12.00%	05/01/10		1,920		1,920,000
Sierra Pacific Power Co., Series P	Baa3	6.75%	07/01/37		125		111,538
Southern California Edison Co., Sr. Unsec’d. Notes	A3	7.625%	01/15/10		1,100		1,125,563
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	5.613%	04/01/17		1,947		1,724,010
							24,321,409

SEE NOTES TO FINANCIAL STATEMENTS.

A24

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Emerging Markets — 0.1%
Alfa Diversified Payment Rights Finance Co., Series 1A, Class A, 144A(f)	Ba1	3.596%	03/15/11	$	1,717	$	1,115,888
Energy – Integrated — 0.1%
Shell International Finance BV, Gtd. Notes (Netherlands)	Aa1	6.375%	12/15/38		1,400		1,574,985
Energy – Other — 1.0%
EnCana Corp., Sr. Unsec’d. Notes (Canada)	Baa2	5.90%	12/01/17		2,500		2,085,763
GS Caltex Corp., Sr. Unsec’d. Notes (South Korea), 144A	Baa1	7.75%	07/25/11		3,250		3,000,253
Newfield Exploration Co., Sr. Sub. Notes	Ba3	6.625%	04/15/16		320		254,400
Nexen, Inc., Sr. Unsec’d. Notes (Canada)	Baa2	6.40%	05/15/37		1,890		1,478,891
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%	05/01/18		1,750		1,223,954
Transocean, Inc., Sr. Unsec’d. Notes (Cayman Islands)	Baa2	6.80%	03/15/38		1,200		1,070,336
Western Oil Sand, Inc., Sr. Sec’d. Notes (Canada)	Baa1	8.375%	05/01/12		1,900		1,813,820
							10,927,417
Foods — 1.0%
General Mills, Inc., Sr. Unsec’d. Notes	Baa1	5.20%	03/17/15		1,880		1,837,542
Kraft Foods, Inc., Sr. Unsec’d. Notes	Baa2	5.625%	11/01/11		860		878,737
Kraft Foods, Inc., Sr. Unsec’d. Notes	Baa2	6.125%	02/01/18		2,770		2,714,314
PepsiCo, Inc., Sr. Unsec’d. Notes	Aa2	7.90%	11/01/18		1,100		1,348,212
Tyson Foods, Inc., Gtd. Notes	Ba3	7.85%	04/01/16		1,000		740,000
Tyson Foods, Inc., Sr. Unsec’d. Notes	B2	8.25%	10/01/11		2,050		1,824,500
Yum! Brands, Inc., Sr. Unsec’d. Notes	Baa3	8.875%	04/15/11		1,705		1,726,974
							11,070,279
Foreign Government Bonds — 0.3%
Pemex Project Funding Master Trust, Gtd. Notes, 144A(f)	Baa1	6.5525%	10/15/09		3,190		3,126,200
Gaming — 0.2%
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.625%	06/01/15		665		113,050
Harrah’s Operating Co., Inc., Gtd. Notes, 144A	NR	10.00%	12/15/18		134		48,910
MGM Mirage, Inc., Gtd. Notes	Ba3	6.875%	04/01/16		3,000		1,897,500
							2,059,460
Health Care & Pharmaceutical — 1.4%
Alliance Imaging, Inc., Sr. Sub. Notes	B3	7.25%	12/15/12		1,500		1,275,000
AmerisourceBergen Corp., Gtd. Notes	Baa3	5.875%	09/15/15		2,325		2,032,013
Cardinal Health, Inc., Sr. Unsec’d. Notes	Baa2	5.80%	10/15/16		265		239,740
GlaxoSmithKline Capital, Inc., Gtd. Notes(d)	A1	5.65%	05/15/18		4,000		4,201,311
HCA, Inc., Sr. Unsec’d. Notes, MTN	Caa1	8.70%	02/10/10		1,700		1,620,381
Hospira, Inc., Sr. Unsec’d. Notes	Baa3	5.55%	03/30/12		2,500		2,368,670
Schering-Plough Corp., Sr. Unsec’d. Notes	Baa1	5.55%	12/01/13		2,735		2,754,998
Wyeth, Sr. Unsec’d. Notes	A3	5.50%	02/15/16		1,630		1,659,803
							16,151,916
Health Care Insurance — 0.8%
Aetna, Inc., Sr. Unsec’d. Notes	A3	6.75%	12/15/37		1,900		1,600,592
Cigna Corp., Sr. Unsec’d. Notes	Baa2	5.375%	03/15/17		2,125		1,786,022
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		4,025		2,391,394
Health Net, Inc., Sr. Unsec’d. Notes(a)	Ba3	6.375%	06/01/17		1,315		526,000
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.00%	06/15/17		2,610		2,350,109
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.50%	06/15/37		760		637,908
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.875%	02/15/38		180		157,610
							9,449,635
Insurance — 1.1%
Ace INA Holdings, Inc., Gtd. Notes	A3	5.70%	02/15/17		1,135		1,017,691
Allied World Insurance Holdings Ltd., Sr. Unsec’d. Notes (Bermuda)	Baa1	7.50%	08/01/16		1,700		1,198,475
American International Group, Inc., Jr. Sub. Notes, 144A(f)	Baa1	8.175%	05/15/58		2,600		1,011,465
American International Group, Inc., Sr. Unsec’d. Notes	A3	4.25%	05/15/13		1,820		1,341,316
American International Group, Inc., Sr. Unsec’d. Notes	A3	5.05%	10/01/15		315		211,230

SEE NOTES TO FINANCIAL STATEMENTS.

A25

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance (continued)
Axis Capital Holdings Ltd., Sr. Unsec’d. Notes (Bermuda)	Baa1	5.75%	12/01/14	$	3,350	$	2,212,688
Chubb Corp., Sr. Notes	A2	5.75%	05/15/18		2,950		2,832,493
Travelers Cos, Inc., Sr. Unsec’d. Notes, MTN	A2	6.25%	06/15/37		1,890		1,817,180
XL Capital Ltd., Jr. Sub. Notes, Class E (Cayman Islands)(f)	Ba1	6.50%	12/31/49		1,880		432,400
XL Capital Ltd., Sr. Unsec’d. Notes, Class A (Cayman Islands)	Baa2	5.25%	09/15/14		140		77,748
							12,152,686
Lodging — 0.3%
Felcore Lodging LP, Sr. Sec’d. Notes(f)	Ba3	4.442%	12/01/11		1,800		1,116,000
Royal Caribbean Cruises Ltd., Sr. Unsec’d. Notes (Liberia), Sr. Notes	Ba1	8.00%	05/15/10		1,730		1,479,150
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes	Baa3	6.25%	02/15/13		980		676,200
							3,271,350
Media & Entertainment — 0.6%
British Sky Broadcasting Group PLC (United Kingdom), 144A	Baa2	6.10%	02/15/18		210		172,431
Dex Media West LLC, Sr. Sub. Notes, Series B	B2	9.875%	08/15/13		950		225,625
News America, Inc., Gtd. Notes	Baa1	7.625%	11/30/28		1,415		1,419,270
Time Warner, Inc., Gtd. Notes,	Baa2	7.25%	10/15/17		1,440		1,321,654
Viacom, Inc., Sr. Unsec’d. Notes	Baa3	6.875%	04/30/36		740		584,805
Viacom, Inc., Sr. Unsec’d. Notes	Baa3	6.75%	10/05/37		1,075		828,593
Vivendi, Notes (France), 144A	Baa2	5.75%	04/04/13		2,000		1,755,476
							6,307,854
Metals — 0.5%
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes	Ba2	8.375%	04/01/17		2,095		1,717,900
United States Steel Corp., Sr. Unsec’d. Notes	Baa3	7.00%	02/01/18		2,000		1,363,080
Xstrata Finance Canada Ltd., Gtd. Notes (Canada), 144A	Baa2	5.50%	11/16/11		3,430		2,680,041
							5,761,021
Non-Captive Finance — 1.7%
Bosphorus Financial Services Ltd., Sr. Sec’d. Notes (Cayman Islands), 144A(f)(h)	Baa2	3.949%	02/15/12		1,808		1,538,268
Capital One Financial Corp., Sub. Notes	Baa1	6.15%	09/01/16		700		492,588
CITGroup, Inc., Sub. Notes, 144A	Baa2	12.00%	12/18/18		2,628		2,023,560
CitiGroup, Inc., Sr. Unsec’d. Notes	Baa1	5.65%	02/13/17		1,708		1,187,660
Countrywide Financial Corp., Gtd. Notes, MTN	Aa2	5.80%	06/07/12		3,670		3,576,976
General Electric Capital Australia Funding Pty Ltd., Gtd. Notes (Australia), MTN	Aaa	6.00%	04/15/15		AUD  4,440		2,447,184
Nelnet, Inc., Sub. Notes(f)	Ba2	7.40%	09/29/36		6,500		1,948,986
Preferred Term Securities X, Sr. Notes, Class A-1 (Cayman Islands), 144A(f)	Aa1	4.196%	07/03/33		3,280		1,485,554
SLM Corp., Sr. Unsec’d. Notes, MTN	Baa2	8.45%	06/15/18		6,170		4,878,131
							19,578,907
Non-Corporate Foreign Agency — 1.4%
Credit Suisse First Boston International for CJSC, Sec’d. Notes (The) (United Kingdom)	Ba3	6.80%	10/04/12		1,400		560,000
Dresdner Kleinwort Wasserstein for CJSC, Sec’d. Notes (The) (Germany)	Ba3	7.75%	09/23/09		1,400		980,000
Gazprom International SA, Gtd. Notes (Luxembourg), 144A	BBB+(e)	7.201%	02/01/20		1,932		1,410,374
Gazprom OAO (Russia)	A3	10.50%	10/21/09		1,685		1,693,617
Macquarie Group Ltd. Gov’t. Liquid Gtd. Notes (Australia), 144A	Aaa	4.10%	12/17/13		1,955		2,018,459
National Power Corp., Gov’t. Gtd. Notes (Philippines), 144A(f)	BB-(e)	6.403%	08/23/11		1,530		1,422,900
Petronas Capital, Ltd., Gtd. Notes (Malaysia), 144A	A1	7.00%	05/22/12		7,300		7,737,125
							15,822,475
Non-Corporate Sovereign — 2.3%
Federal Republic of Brazil (Brazil)	Ba1	12.50%	01/05/16		BRL  250		112,564
Federal Republic of Brazil, Unsec’d. Notes (Brazil)	Ba1	9.25%	10/22/10		5,325		5,836,201
Government of Hungary, Bonds (Hungary)	A3	8.00%	02/12/15		HUF  693,400		3,479,052

SEE NOTES TO FINANCIAL STATEMENTS.

A26

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Non-Corporate Sovereign (continued)
Government of Jamaica, Sr. Unsec’d. Notes (Jamaica)	B1	11.00%	07/27/12		EUR  995	$	1,137,597
Japan Government CPI Linked Bonds, Series 16 (Japan)	Aa3	1.40%	06/10/18		JPY  248,148		2,389,502
Peru Government International Bond, Sr. Sec’d. (Peru), 144A(g)	Ba1	6.857%	05/31/18	$	1,779		942,993
Republic of Panama, Unsub. Notes (Panama)	Ba1	9.375%	07/23/12		1,295		1,405,075
Republic of Poland, Bonds (Poland)	A2	6.25%	10/24/15		PLN  9,910		3,486,745
Republic of Uruguay, Unsub. Notes (Uruguay)	B1	7.25%	02/15/11		660		666,600
Russian Government International Bond, Unsub. Notes (Russia), 144A(a)	Baa1	8.25%	03/31/10		1,730		1,790,748
United Mexican States, Sr. Unsec’d. Notes (Mexico)	Baa1	7.50%	01/14/12		4,250		4,568,750
							25,815,827
Paper — 0.5%
Graphic Packaging International, Inc., Gtd. Notes	B3	8.50%	08/15/11		2,970		2,479,950
International Paper Co., Sr. Unsec’d. Notes	Baa3	4.00%	04/01/10		2,815		2,708,897
Norampac, Inc., Gtd. Notes (Canada)	Ba3	6.75%	06/01/13		1,400		630,000
							5,818,847
Pipelines & Other — 0.8%
Atmos Energy Corp., Sr. Unsec’d. Notes	Baa3	4.00%	10/15/09		5,300		5,190,741
Energy Transfer Partners LP, Sr. Unsec’d. Notes	Baa3	7.50%	07/01/38		1,945		1,518,668
Transcanada Pipelines Ltd., Sr. Unsec’d. Notes (Cananda)	A3	7.25%	08/15/38		2,200		2,189,928
							8,899,337
Railroads — 0.2%
CSX Corp., Sr. Unsec’d. Notes	Baa3	5.75%	03/15/13		2,600		2,443,015
Real Estate Investments Trusts — 0.4%
Equity One, Inc., Gtd. Notes	Baa3	3.875%	04/15/09		1,450		1,414,202
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	5.45%	06/01/12		2,300		1,874,144
Realty Income Corp., Sr. Unsec’d. Notes	Baa1	6.75%	08/15/19		1,545		894,115
							4,182,461
Retailers — 0.6%
CVS/Caremark Corp., Sr. Unsec’d. Notes	Baa2	6.25%	06/01/27		3,020		2,808,002
Neiman-Marcus Group, Inc., Gtd. Notes, PIK	B3	9.00%	10/15/15		1,250		550,000
Target Corp., Sr. Unsec’d. Notes	A2	6.50%	10/15/37		800		686,937
Target Corp., Sr. Unsec’d. Notes	A2	7.00%	01/15/38		1,870		1,733,107
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	6.50%	08/15/37		545		647,086
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes(d)	Aa2	6.20%	04/15/38		200		228,891
							6,654,023
Structured Notes — 1.6%
Dow Jones CDX High Yield, 144A	Caa2	8.25%	12/29/10		8,298		8,349,475
Dow Jones CDX High Yield, 144A(a)	B3	8.625%	06/29/11		9,555		9,494,784
							17,844,259
Technology — 1.0%
Affiliated Computer Services, Inc., Sr. Unsec’d. Notes	Ba2	4.70%	06/01/10		3,000		2,790,000
Dell, Inc., Sr. Unsec’d Notes	A2	4.70%	04/15/13		1,800		1,693,357
Fiserv, Inc., Gtd. Notes	Baa2	6.125%	11/20/12		1,600		1,503,256
International Business Machines Corp., Sr. Unsec’d. Notes	A1	8.00%	10/15/38		640		851,995
Jabil Circuit, Inc., Sr. Unsec’d. Notes	Ba1	5.875%	07/15/10		2,000		1,830,000
Motorola, Inc., Sr. Unsec’d. Notes	Baa2	8.00%	11/01/11		121		100,971
Oracle Corp., Sr. Unsec’d. Notes	A2	5.75%	04/15/18		1,265		1,323,150
SunGard Data Systems, Inc., Gtd. Notes	B3	3.75%	01/15/09		720		716,016
Xerox Corp., Sr. Unsec’d. Notes	Baa2	5.50%	05/15/12		870		729,104
							11,537,849
Telecommunications — 2.4%
AT&T Corp., Gtd. Notes	A2	8.00%	11/15/31		2,475		3,108,934
Embarq Corp., Sr. Unsec’d. Notes	Baa3	7.082%	06/01/16		5,600		4,311,999
New Cingular Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.125%	05/01/12		1,810		1,940,988

SEE NOTES TO FINANCIAL STATEMENTS.

A27

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Telecommunications (continued)
New Cingular Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.75%	03/01/31	$	2,375	$	2,968,954
Qwest Corp.	Ba1	8.875%	03/15/12		3,300		3,052,500
Rogers Communications, Inc. (Canada)	Baa3	6.80%	08/15/18		2,600		2,627,121
Telecom Italia Capital (Luxembourg)	Baa2	4.875%	10/01/10		3,400		3,077,000
Telefonica Emisiones SAU (Spain)	Baa1	7.045%	06/20/36		5		5,458
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	5.25%	04/15/13		2,420		2,429,257
Verizon Wireless, Sr. Unsec’d. Notes, 144A	A2	7.375%	11/15/13		3,500		3,692,780
							27,214,991
Tobacco — 1.1%
Altria Group, Inc., Gtd. Notes	Baa1	9.95%	11/10/38		4,100		4,464,125
Altria Group, Inc., Gtd. Notes	Baa1	9.70%	11/10/18		500		540,415
Philip Morris International, Inc., Sr. Unsec’d. Notes	A2	5.65%	05/16/18		3,000		2,973,999
Reynolds American, Inc., Sr. Sec’d. Notes	Baa3	6.50%	07/15/10		4,000		3,974,640
							11,953,179
U.S. Government Agency Obligations — 2.6%
Federal Farm Credit Bank	Aaa	4.875%	01/17/17		580		653,632
Federal Home Loan Bank	Aaa	5.125%	10/19/16		120		137,265
Federal Home Loan Mortgage Corp.	Aaa	4.125%	09/27/13		17,455		18,808,233
Federal National Mortgage Association	Aaa	2.875%	12/11/13		9,750		9,986,662
Federal National Mortgage Association	Aaa	5.625%	07/15/37		165		212,879
							29,798,671
U.S. Government Mortgage-Backed Securities — 45.8%
Federal Home Loan Mortgage Corp.	Aaa	4.50%	02/01/19-07/01/19		12,891		13,235,245
Federal Home Loan Mortgage Corp.	Aaa	5.00%	07/01/19-05/01/34		6,552		6,739,157
Federal Home Loan Mortgage Corp.	Aaa	5.00%	TBA 30 YR		9,500		9,707,813
Federal Home Loan Mortgage Corp.	Aaa	5.50%	10/01/33-05/01/37		15,535		15,939,987
Federal Home Loan Mortgage Corp.	Aaa	5.50%	TBA 30 YR		29,500		30,191,421
Federal Home Loan Mortgage Corp.	Aaa	6.00%	11/01/33-04/01/34		5,562		5,744,662
Federal Home Loan Mortgage Corp.	Aaa	6.50%	07/01/32		2,566		2,677,179
Federal Home Loan Mortgage Corp.	Aaa	7.00%	10/01/32-11/01/33		4,763		5,005,918
Federal National Mortgage Association	Aaa	4.00%	05/01/19-06/01/19		6,245		6,347,310
Federal National Mortgage Association	Aaa	4.50%	06/01/18-02/01/35		18,985		19,448,115
Federal National Mortgage Association	Aaa	5.00%	01/01/19-05/01/38		21,408		21,951,877
Federal National Mortgage Association	Aaa	5.00%	TBA 30 YR		71,500		72,997,066
Federal National Mortgage Association	Aaa	5.195%	10/01/37		9,719		9,807,908
Federal National Mortgage Association	Aaa	5.307%	01/01/36		2,864		2,915,030
Federal National Mortgage Association	Aaa	5.50%	12/01/16-02/01/38		109,137		112,088,919
Federal National Mortgage Association	Aaa	5.50%	TBA 30 YR		2,250		2,306,250
Federal National Mortgage Association	Aaa	5.894%	06/01/37		3,414		3,512,512
Federal National Mortgage Association	Aaa	6.00%	09/01/17-06/01/38		28,628		29,572,465
Federal National Mortgage Association	Aaa	6.00%	TBA 30 YR		80,500		82,864,687
Federal National Mortgage Association	Aaa	6.036%	09/01/37		9,098		9,351,248
Federal National Mortgage Association	Aaa	6.50%	11/01/09-10/01/37		20,667		21,514,978
Federal National Mortgage Association	Aaa	7.00%	05/01/32		428		452,912
Government National Mortgage Association	Aaa	5.50%	01/15/33-01/15/35		8,919		9,216,391
Government National Mortgage Association	Aaa	5.50%	TBA 30 YR		5,600		5,748,781
Government National Mortgage Association	Aaa	6.00%	12/15/32-11/15/34		8,197		8,472,433
Government National Mortgage Association	Aaa	6.00%	TBA 30 YR		7,000		7,220,934
Government National Mortgage Association	Aaa	6.50%	09/15/32-11/15/33		4,578		4,799,550
Government National Mortgage Association	Aaa	7.50%	10/15/25-02/15/26		157		166,196
							519,996,944
U.S. Government Treasury Securities — 4.9%
U.S. Treasury Bonds(a)	Aaa	4.375%	02/15/38		330		441,994
U.S. Treasury Bonds(j)	Aaa	4.50%	05/15/38		5,420		7,397,454
U.S. Treasury Inflation Indexed Bonds(a)	Aaa	1.875%	07/15/13		6,287		5,919,212

SEE NOTES TO FINANCIAL STATEMENTS.

A28

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Government Treasury Securities (continued)
U.S. Treasury Inflation Indexed Bonds(a)(j)	Aaa	2.00%	01/15/14	$	12,065	$	11,431,416
U.S. Treasury Inflation Indexed Bonds	Aaa	1.375%	07/15/18		8,590		8,033,513
U.S. Treasury Notes	Aaa	1.50%	12/31/13		11,485		11,458,974
U.S. Treasury Strips(a)(g)	Aaa	4.21%	11/15/21		8,545		5,540,040
U.S. Treasury Strips(g)	Aaa	4.25%	08/15/29		10,165		5,380,263
							55,602,866
TOTAL LONG-TERM BONDS (cost $1,168,010,451)							1,081,446,033
BANK LOANS — 3.4%
Automotive — 0.1%
Oshkosh Truck Corp.(h)	Ba3	3.4248%	12/06/13		1,414		818,855
Cable — 0.2%
Insight Midwest Holding LLC(h)	B1	3.66%	10/06/13		3,208		2,582,273
Capital Goods — 0.1%
Capital Safety Group Ltd.(h)	B2	2.711%	07/20/15		409		315,121
Capital Safety Group Ltd.(h)	B2	3.211%	07/20/16		1,091		839,879
							1,155,000
Consumer — 0.2%
Huish Detergents, Inc.(h)	Ba3	2.48%	04/26/14		2,955		2,078,349
Electric — 0.5%
NRG Energy, Inc.(h)	Ba1	1.3588%	02/01/13		1,171		1,011,770
NRG Energy, Inc.(h)	Ba1	2.675%	02/01/13		2,377		2,053,319
Reliant Energy, Inc.(h)	Ba3	1.88%	06/30/14		2,500		1,790,000
Texas Competitive Electric Holdings Co. LLC(h)	Ba3	5.582%	10/10/14		1,975		1,365,219
							6,220,308
Foods — 0.1%
Supervalu, Inc.(h)	Ba3	2.3138%	06/02/11		2,077		1,692,692
Gaming — 0.1%
Las Vegas Sands LLC Term B(h)	B2	2.22%	05/23/14		2,167		972,742
Las Vegas Sands LLC Term DD(h)	B2	2.22%	05/23/14		547		245,655
							1,218,397
Health Care & Pharmaceutical — 1.2%
Community Health Systems, Inc.(h)	Ba3	3.4038%	07/25/14		135		104,326
Community Health Systems, Inc.(h)	Ba3	4.445%	07/25/14		2,631		2,039,874
HCA, Inc.(h)	Ba3	3.7088%	11/18/13		2,450		1,915,594
Health Management Associates Term B(h)	B1	3.2088%	02/28/14		1,933		1,181,999
Inverness Medical Innovations(h)	B1	3.723%	06/26/14		2,955		1,942,913
PTS Acquisition Corp.(h)	Ba3	3.7088%	04/10/14		3,842		2,285,692
Royalty Pharma Finance Trust(h)	Baa3	6.5688%	05/15/15		4,000		3,513,331
							12,983,729
Media & Entertainment — 0.1%
Idearc, Inc.(h)	B2	1.97%	11/17/13		1,000		325,000
Idearc, Inc.(h)	B2	3.5745%	11/17/14		1,715		523,075
							848,075
Paper — 0.1%
Domtar, Inc.(h)	Baa3	3.251%	03/05/14		1,530		1,023,188
Pipelines & Other — 0.1%
Enterprise GP Holdings LP(h)	Ba2	5.3568%	11/08/14		1,520		1,230,917
Technology — 0.5%
First Data Corp.(h)	Ba3	3.211%	09/24/14-09/24/14		3,012		1,926,525
Flextronics International Ltd. Term A (Singapore)(h)	Ba1	6.155%	10/01/14		2,301		1,442,103

SEE NOTES TO FINANCIAL STATEMENTS.

A29

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

BANK LOANS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Technology (continued)
Flextronics International Ltd. Term A-1-A (Singapore)(h)	Ba1	7.0688%	10/01/14	$	661	$	414,398
Metavante Corp.(h)	Ba2	4.942%	11/01/14		2,481		1,836,125
							5,619,151
Telecommunications — 0.1%
Alltel Communications, Inc.(h)	Ba3	3.9388%	05/15/15		1,580		1,550,375
TOTAL BANK LOANS (cost $55,200,855)							39,021,310
TOTAL LONG-TERM INVESTMENTS (cost $1,223,211,306)							1,120,467,342
				Shares
SHORT-TERM INVESTMENTS — 22.9%
AFFILIATED MUTUAL FUNDS
Dryden Core Investment Fund — Short-Term Bond Series (cost $164,222,330) (Note 4)(c)					16,575,018		121,992,132
Dryden Core Investment Fund — Taxable Money Market Fund Series (cost $137,331,502; includes $44,158,988 of cash collateral received for securities on loan) (Note 4)(b)(c)					137,331,502		137,331,502
TOTAL AFFILIATED MUTUAL FUNDS (cost $301,553,832)							259,323,634
TOTAL INVESTMENTS(k) — 121.6% (cost $1,524,765,138)							1,379,790,976
LIABILITIES IN EXCESS OF OTHER ASSETS(l) — (21.6)%							(244,955,264	)
NET ASSETS — 100.0%						$	1,134,835,712

The following abbreviations are used in portfolio descriptions:

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.
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
PIK	Payment-in-kind
TBA	To Be Announced
AUD	Australian Dollar
BRL	Brazilian Real
EUR	Euro
HUF	Hungarian Forint
JPY	Japanese Yen
MXN	Mexican Peso
PLN	Polish Zloty

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

† The rating reflected is as of December 31, 2008. Rating of certain bonds may have changed subsequent to that date.

(a) All or portion of security is on loan. The aggregate market value of such securities is $42,538,539; cash collateral of $44,158,988 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(c) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

(d) Security segregated as collateral for futures contracts.

(e) Standard & Poor’s rating.

(f) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(g) Represents a zero coupon bond. Rate shown reflects the effective yield at reporting date.

SEE NOTES TO FINANCIAL STATEMENTS.

A30

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(h) Indicates a security that has been deemed illiquid.

(i) Represents issuer in default of interest payments; non-income producing security.

(j) Security segregated as collateral for swap contracts.

(k) As of December 31, 2008, 1 security representing $2,023,560 and 0.18% of net assets was fair valued in accordance with the policies adopted by the Board of Trustees.

(l) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on futures contracts, forward foreign currency exchange contracts, interest rate and credit default swap agreements as follows:

Open futures contracts outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2008		Unrealized Appreciation/ (Depreciation)
Long Positions:
661	10 Yr. U.S. Treasury Notes	Mar. 2009	$	78,061,253	$	83,120,750	$	5,059,497
11	10 Yr. Euro Bonds	Mar. 2009		1,897,774		1,908,869		11,095
8	2 Yr. Euro British Pound	Mar. 2009		1,335,397		1,420,154		84,757
272	5 Yr. U.S. Treasury Notes	Mar. 2009		32,327,939		32,382,875		54,936
167	30 Yr. U.S. Treasury Bonds	Mar. 2009		21,219,857		23,053,828		1,833,971
								7,044,256
Short Positions:
20	Australian 10 Yr. Bonds	Mar. 2009		1,334,313		1,338,692		(4,379	)
251	2 Yr.U.S. Treasury Notes	Mar. 2009		54,218,848		54,733,688		(514,840	)
								(519,219	)
							$	6,525,037

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Foreign Currency Contract	Notional Amount (000)	Value at Settlement Date		Value at December 31, 2008		Unrealized Appreciation/ (Depreciation)
Purchased:
Euro, Expiring 01/23/09	EUR  908	$	1,262,630	$	1,261,119	$	(1,511	)
Mexican Nuevo Peso, Expiring 01/20/09	MXN  71,035		5,306,098		5,092,266		(213,832	)
Polish Zloty, Expiring 01/22/09	PLN  1,936		681,400		651,332		(30,068	)
			7,250,128		7,004,717		(245,411	)
Sold:
Australian Dollar, Expiring 01/21/09	AUD  1,981		1,374,992		1,377,740		(2,748	)
Hungarian Forint, Expiring 01/22/09	HUF  636,108		3,395,113		3,313,654		81,459
Japanese Yen, Expiring 01/23/09	JPY  219,267		2,449,757		2,420,000		29,757
Mexican Nuevo Peso, Expiring 01/20/09	MXN  71,035		5,287,339		5,092,265		195,074
Polish Zloty, Expiring 01/22/09	PLN  10,371		3,602,679		3,489,903		112,776
			16,109,880		15,693,562		416,318
						$	170,907

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(b)	8/15/2015	$	2,990	3.71%	3 month LIBOR	$	(250,518	)
Deutsche Bank AG(b)	5/15/2016		1,080	4.49%	3 month LIBOR		(152,023	)
Citibank, N.A.(a)	10/20/2013		5,955	4.06%	3 month LIBOR		509,646
Merrill Lynch Capital Services, Inc.(a)	10/10/2013		5,955	3.78%	3 month LIBOR		433,770
Merrill Lynch Capital Services, Inc.(b)	5/15/2016		5,955	4.40%	3 month LIBOR		(800,570	)
						$	(259,695	)

(a) Portfolio pays the floating rate and receives the fixed rate.

(b) Portfolio pays the fixed rate and receives the floating rate.

SEE NOTES TO FINANCIAL STATEMENTS.

A31

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding as of December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation
Buy protection(1):
Morgan Stanley Capital Services, Inc.	9/20/2012	$	5,600	1.70%	CIT Group, Inc. 7.75%, due 04/02/12	$	951,740
Morgan Stanley Capital Services, Inc.	6/20/2013		3,700	1.65%	Itraxx Euro zero, due 06/20/13		164,252
Merrill Lynch Capital Services, Inc.	9/20/2016		1,000	1.73%	Tyson Foods, Inc. 6.6%, due 04/01/16		144,818
Barclays Bank PLC	9/25/2035		1,000	3.35%	Accredited Mortgage Loan Trust, Ser. 2005-3, Class M9 7.02%, 09/25/35		935,634
Citibank, N.A.	1/25/2035		512	3.00%	Morgan Stanley ABS Capital 1, Ser. 2005-HE2, Class B2, 6.165%, 01/25/35		281,374
Citibank, N.A.	1/25/2035		506	3.00%	Morgan Stanley ABS Capital 1, Ser. 2005-HE2, Class B3, 6.765%, 01/25/35		316,016
Citibank, N.A.	3/25/2035		523	3.00%	Centex Home Equity, Ser. 2005-B, Class B, 6.215%, 03/25/35		250,826
Merrill Lynch Capital Services, Inc.	3/25/2036		1,000	3.72%	AmeriQuest Mortgage Securities, Inc. Ser. 2006-R1, Class M9, 7.82%, 03/25/36		959,705
Morgan Stanley Capital Services, Inc.	5/25/2036		1,000	3.23%	Countrywide Asset-Backed Certificates, Ser. 2005-16, Class MV8, 7.57%, 05/25/36		991,770
						$	4,996,135

Counterparty	Termination Date	Implied Credit Spread at December 31, 2008(4)	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/ Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Depreciation
Credit Default Swaps on Corporate Issues-Sell Protection(2):
Morgan Stanley Capital Services, Inc.	6/20/2009	1.50%	$	1,334	0.82%	Tyco International Group SA, 6.00%, due 11/15/13	$	(3,887	)	$	3,798		$	(7,685	)
Morgan Stanley Capital Services, Inc.	6/20/2009	1.50%		1,333	0.82%	Covidien Ltd., 6.00%, due 10/15/17		(3,886	)		3,798			(7,684	)
Morgan Stanley Capital Services, Inc.	6/20/2009	1.50%		1,333	0.82%	Tyco Electronics Ltd., 6.00%, due 10/01/12		(3,888	)		3,799			(7,687	)
Morgan Stanley Capital Services, Inc.	6/20/2009	12.76%		3,000	1.90%	Texas Competitive Electric Holdings Co., LLC 6.21287%, due 10/10/14		(143,356	)		—			(143,356	)
JPMorgan Chanse Bank	6/20/2009	31.40%		1,750	5.00%	Harrah’s Operating Co., Inc. 5.625%, due 06/01/15		(198,358	)		(44,199	)		(154,159	)
Barclays Bank PLC	6/20/2013	87.70%		1,930	5.00%	Station Casinos, Inc., 6.00%, 04/01/12		(1,508,484	)		(300,231	)		(1,208,253	)
Morgan Stanley Capital Services, Inc.	12/20/2014	18.70%		2,500	1.17%	Nextel Communications, Inc., 7.375%, due 8/1/15		(1,165,784	)		—			(1,165,784	)
							$	(3,027,643	)	$	(333,035	)	$	(2,694,608	)

SEE NOTES TO FINANCIAL STATEMENTS.

A32

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Counterparty	Termination Date	Notional Amount (000)#(3)	Fixed Rate	Reference Entity/ Obligation	Fair Value(5)			Upfront Premiums Paid/ (Received)		Unrealized Depreciation
Credit Default Swaps on Asset-Backed Issues-Sell Protection(2):
Merrill Lynch Capital Services, Inc.	3/25/2036	1,000	9.00%	AmeriQuest Mortgage Securities, Inc. Ser. 2006-R1, Class M9, 7.82%, 03/25/36	$	(950,949	)	$	—	$	(950,949	)
					$	(950,949	)	$	—	$	(950,949	)

The Portfolio entered into credit default swaps as the protection seller on corporate issues and asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(4) Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

(5) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date.

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

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	259,323,634	$	6,525,037
Level 2—Other Significant Observable Inputs		1,118,443,782		(1,379,231	)
Level 3—Significant Unobservable Inputs		2,023,560		2,641,021
Total	$	1,379,790,976	$	7,786,827

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A33

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities			Other Financial Instruments
Balance as of 12/31/07	$	—		$	2,173,171
Realized gain (loss)		—			*
Change in unrealized appreciation (depreciation)		(578,234	)		986,780
Net purchases (sales)		2,601,794			—
Transfers in and/or out of Level 3		—			(518,930	)
Balance as of 12/31/08	$	2,023,560		$	2,641,021

* The realized loss incurred during the period for other financial instruments was $494,272.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

U.S. Government Mortgage-Backed Securities	45.8	%
Affiliated Money Market Mutual Funds (including 3.9% of collateral received for securities on loan)	22.9
Commercial Mortgage-Backed Securities	7.8
U.S. Government Treasury Securities	4.9
Banking	3.2
Electric	2.6
U.S. Government Agency Obligations	2.6
Health Care & Pharmaceutical	2.6
Asset-Backed Securities	2.5
Telecommunications	2.5
Non-Corporate Sovereign	2.3
Non-Captive Finance	1.7
Structured Notes	1.6
Technology	1.5
Non-Corporate Foreign Agency	1.4
Airlines	1.1
Chemicals	1.1
Foods	1.1
Insurance	1.1
Tobacco	1.1
Brokerage	1.0
Energy – Other	1.0
Pipelines & Other	0.9
Capital Goods	0.8
Health Care Insurance	0.8
Media & Entertainment	0.7
Paper	0.6
Retailers	0.6
Cable	0.5
Collateralized Mortgage Obligations	0.5
Metals	0.5
Real Estate Investment Trusts	0.4
Gaming	0.3
Building Materials & Construction	0.3
Foreign Government Bonds	0.3
Lodging	0.3
Consumer	0.2
Railroads	0.2
Automotive	0.1
Emerging Markets	0.1
Enery – Integrated	0.1
	121.6
Liabilities in excess of other assets	(21.6	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A34

DIVERSIFIED BOND PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $42,538,539:
Unaffiliated investments (cost $1,223,211,306)	$	1,120,467,342
Affiliated investments (cost $301,553,832)		259,323,634
Foreign currency, at value (cost $309)		309
Receivable for investments sold		53,992,213
Interest receivable		9,629,246
Unrealized appreciation on swaps		5,939,551
Premium for swaps purchased		448,162
Unrealized appreciation on forward foreign currency exchange contracts		419,066
Receivable for Series shares sold		16,109
Prepaid expenses		14,562
Total Assets		1,450,250,194
LIABILITIES
Payable for investments purchased		256,536,806
Collateral for securities on loan		44,158,988
Payable to custodian		6,606,289
Unrealized depreciation on swaps		4,848,668
Due to broker-variation margin		1,740,484
Premium for swaps written		480,772
Management fee payable		381,914
Unrealized depreciation on forward foreign currency exchange contracts		248,159
Payable for Series shares repurchased		223,751
Accrued expenses and other liabilities		181,079
Deferred trustees’ fees		6,785
Affiliated transfer agent fee payable		787
Total Liabilities		315,414,482
NET ASSETS	$	1,134,835,712
Net assets were comprised of:
Paid-in capital	$	1,247,564,086
Retained earnings		(112,728,374	)
Net assets, December 31, 2008	$	1,134,835,712
Net asset value and redemption price per share, $1,134,835,712 / 114,800,544 outstanding shares of beneficial interest	$	9.89

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest	$	56,912,144
Affiliated dividend income		8,289,602
Affiliated income from securities loaned, net		524,003
		65,725,749
EXPENSES
Management fee		4,766,674
Custodian’s fees and expenses		309,000
Shareholders’ reports		73,000
Audit fee		33,000
Interest expense (Note 8)		31,313
Trustees’ fees		23,000
Insurance expenses		12,000
Legal fees and expenses		9,000
Commitment fee on syndicated credit agreement		6,000
Transfer agent’s fee and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Miscellaneous		10,948
Total expenses		5,277,935
NET INVESTMENT INCOME		60,447,814
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain on:
Investment transactions		2,354,434
Short sale transactions		94,551
Futures transactions		11,455,174
Swap transactions		5,656,697
Foreign currency transactions		1,392,152
		20,953,008
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $(33,944,971))		(125,445,660	)
Securities sold short		41,247
Futures		5,767,689
Swaps		(3,439,766	)
Foreign currencies		(915,197	)
		(123,991,687	)
NET LOSS ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		(103,038,679	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(42,590,865	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	60,447,814		$	63,095,081
Net realized gain on investment, swap and foreign currency transactions		20,953,008			22,075,622
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		(123,991,687	)		(19,462,861	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(42,590,865	)		65,707,842
DISTRIBUTIONS		(72,614,494	)		(59,479,872	)
SERIES SHARE TRANSACTIONS:
Series shares sold [9,801,318 and 12,326,563 shares, respectively]		102,899,591			133,636,466
Series shares issued in reinvestment of distributions [7,018,378 and 5,514,681 shares, respectively]		72,614,494			59,479,872
Series shares repurchased [13,831,055 and 12,074,002 shares, respectively]		(143,763,704	)		(131,418,698	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		31,750,381			61,697,640
TOTAL INCREASE (DECREASE) IN NET ASSETS		(83,454,978	)		67,925,610
NET ASSETS:
Beginning of year		1,218,290,690			1,150,365,080
End of year	$	1,134,835,712		$	1,218,290,690

SEE NOTES TO FINANCIAL STATEMENTS.

A35

	EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 97.8%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace & Defense — 1.4%
Lockheed Martin Corp.	152,006	$	12,780,665
Orbital Sciences Corp.*(a)	1,203,380		23,502,011
			36,282,676
Air Freight & Logistics — 0.6%
Expeditors International of Washington, Inc.(a)	435,800		14,499,066
Auto Components — 0.2%
Goodyear Tire & Rubber Co. (The)*(a)	660,500		3,943,185
Beverages — 2.0%
PepsiCo, Inc.	920,828		50,433,750
Biotechnology — 5.6%
BioMarin Pharmaceutical, Inc.*(a)	254,300		4,526,540
Celgene Corp.*	372,500		20,591,800
Genentech, Inc.*	414,300		34,349,613
Genzyme Corp.*(a)	471,550		31,296,773
Gilead Sciences, Inc.*(a)	996,500		50,961,010
			141,725,736
Building Materials — 0.9%
Masco Corp.	2,019,632		22,478,504
Capital Markets — 2.6%
Bank of New York Mellon Corp. (The)	452,078		12,807,370
Goldman Sachs Group, Inc. (The)(a)	247,731		20,906,019
Morgan Stanley(a)	604,900		9,702,596
Schwab, (Charles) Corp. (The)	1,398,150		22,608,085
			66,024,070
Chemicals — 1.1%
Air Products & Chemicals, Inc.	890		44,740
Monsanto Co.	409,990		28,842,797
			28,887,537
Commercial Banks — 1.4%
Wells Fargo & Co.(a)	1,193,724		35,190,984
Commercial Services — 0.4%
Moody’s Corp.(a)	445,460		8,949,291
Commercial Services & Supplies — 1.1%
McKesson Corp.	279,070		10,808,381
Waste Management, Inc.	515,600		17,086,984
			27,895,365
Communication Equipment — 5.9%
Cisco Systems, Inc.*	3,140,649		51,192,579
Corning, Inc.	1,805,915		17,210,370
QUALCOMM, Inc.(a)	1,767,300		63,322,359
Research In Motion Ltd. (Canada)*(a)	409,600		16,621,568
			148,346,876
Computers & Peripherals — 3.2%
Apple, Inc.*(a)	390,006		33,287,012
Hewlett-Packard Co.	1,274,760		46,261,041
			79,548,053

COMMON STOCKS (continued)	Shares	Value (Note 2)
Construction — 2.2%
Centex Corp.(a)	1,148,640	$	12,221,529
Toll Brothers, Inc.*(a)	2,033,760		43,583,477
			55,805,006
Consumer Finance — 1.0%
American Express Co.(a)	634,888		11,777,172
SLM Corp.*(a)	1,575,400		14,021,060
			25,798,232
Diversified Consumer Services — 1.4%
Career Education Corp.*(a)	797,600		14,308,944
H&R Block, Inc.	878,100		19,950,432
			34,259,376
Diversified Financial Services — 1.4%
JPMorgan Chase & Co.	1,160,202		36,581,169
Diversified Telecommunication Services — 0.7%
Verizon Communications, Inc.	532,210		18,041,919
Electric Utilities — 1.1%
Dominion Resources, Inc.	239,080		8,568,627
Exelon Corp.	363,830		20,232,587
			28,801,214
Electronic Components — 1.0%
Dolby Laboratories, Inc. (Class A Stock)*(a)	762,398		24,976,158
Energy – Alternate Sources — 0.5%
First Solar, Inc.*(a)	85,710		11,824,552
Energy Equipment & Services — 3.3%
Diamond Offshore Drilling, Inc.(a)	336,460		19,830,952
Halliburton Co.	1,477,980		26,869,677
National Oilwell Varco, Inc.*	881,920		21,554,125
Schlumberger Ltd. (Netherlands)(a)	326,900		13,837,677
			82,092,431
Financial – Bank & Trust — 0.7%
Hudson City Bancorp, Inc.(a)	564,650		9,011,814
State Street Corp.	226,830		8,921,224
			17,933,038
Food & Staples Retailing — 4.6%
Costco Wholesale Corp.(a)	257,500		13,518,750
CVS/Caremark Corp.	651,700		18,729,858
Kroger Co. (The)	614,800		16,236,868
Wal-Mart Stores, Inc.(a)	1,215,862		68,161,224
			116,646,700
Food Products — 3.9%
Cadbury PLC (United Kingdom)	398,000		3,464,825
Cadbury PLC, ADR (United Kingdom)(a)	546,564		19,495,938
ConAgra Foods, Inc.	1,040,600		17,169,900
Kellogg Co.(a)	521,405		22,863,609
McCormick & Co., Inc.	565,143		18,005,456
Tyson Foods, Inc. (Class A Stock)	1,869,900		16,380,324
			97,380,052

SEE NOTES TO FINANCIAL STATEMENTS.

A36

	EQUITY PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies — 2.3%
Alcon, Inc. (Switzerland)(a)	235,700	$	21,022,083
Baxter International, Inc.	538,100		28,836,779
Medtronic, Inc.	301,646		9,477,717
			59,336,579
Healthcare Providers & Services — 2.4%
Aetna, Inc.	595,400		16,968,900
Medco Health Solutions, Inc.*	560,400		23,486,364
Omnicare, Inc.(a)	471,700		13,094,392
UnitedHealth Group, Inc.	244,200		6,495,720
			60,045,376
Hotels, Restaurants & Leisure — 0.6%
McDonald’s Corp.	235,455		14,642,946
Household Products — 2.5%
Colgate-Palmolive Co.(a)	309,700		21,226,838
Kimberly-Clark Corp.	203,500		10,732,590
Procter & Gamble Co.	489,148		30,239,129
			62,198,557
Independent Power Producers & Energy Traders — 0.9%
NRG Energy, Inc.*	954,900		22,277,817
Industrial Conglomerates — 1.7%
Eaton Corp.	201,400		10,011,594
General Electric Co.	2,020,603		32,733,769
			42,745,363
Insurance — 3.7%
Aflac, Inc.(a)	334,030		15,311,935
Allstate Corp. (The)	255,700		8,376,732
Berkshire Hathaway, Inc. (Class A Stock)*	204		19,706,400
Berkshire Hathaway, Inc. (Class B Stock)*(a)	3,005		9,658,070
Loews Corp.	505,100		14,269,075
Progressive Corp. (The)(a)	1,320,420		19,555,420
XL Capital Ltd. (Class A Stock) (Cayman Islands)	1,649,300		6,102,410
			92,980,042
Internet & Catalog Retail — 0.8%
Amazon.com, Inc.*(a)	363,400		18,635,152
HSN, Inc.*	152,860		1,111,292
			19,746,444
Internet Software & Services — 2.1%
Google, Inc. (Class A Stock)*	109,100		33,564,615
IAC/InterActiveCorp*(a)	1,171,050		18,420,617
			51,985,232
IT Services — 1.4%
Infosys Technologies Ltd., ADR (India)(a)	310,600		7,631,442
Visa, Inc. (Class A Stock)	538,400		28,239,080
			35,870,522
Life Science Tools & Services — 0.7%
Thermo Fisher Scientific, Inc.*(a)	512,300		17,454,061

COMMON STOCKS (continued)	Shares	Value (Note 2)
Media — 3.1%
Comcast Corp. (Class A Stock)	1,056,490	$	17,833,551
Liberty Global, Inc. (Class C Stock)*	860,350		13,060,113
News Corp. (Class B Stock)(a)	2,025,768		19,406,857
Sirius XM Radio, Inc.*(a)	20,187,800		2,422,536
Walt Disney Co. (The)	1,076,830		24,433,273
			77,156,330
Metals & Mining — 1.3%
Freeport-McMoRan Copper & Gold, Inc.(a)	571,900		13,977,236
Kinross Gold Corp. (Canada)(a)	1,019,200		18,773,664
			32,750,900
Multi-Line Retail — 1.7%
Lowe’s Cos., Inc.(a)	516,950		11,124,764
Staples, Inc.(a)	1,837,393		32,926,083
			44,050,847
Multi-Utilities — 1.3%
Sempra Energy	797,626		34,002,796
Oil, Gas & Consumable Fuels — 9.2%
Apache Corp.	121,400		9,047,942
ConocoPhillips	294,526		15,256,447
EOG Resources, Inc.(a)	190,400		12,676,832
Exxon Mobil Corp.	411,898		32,881,817
Hess Corp.(a)	125,700		6,742,548
Newfield Exploration Co.*(a)	778,450		15,374,387
Occidental Petroleum Corp.	606,900		36,407,931
Petroleo Brasileiro SA, ADR (Brazil)	554,600		13,582,154
Suncor Energy, Inc. (Canada)	582,939		11,200,740
Total SA, ADR (France)(a)	628,466		34,754,170
Williams Cos., Inc.	968,900		14,029,672
XTO Energy, Inc.	826,200		29,140,074
			231,094,714
Pharmaceuticals — 6.9%
Abbott Laboratories	920,765		49,141,228
Novartis AG, ADR (Switzerland)(a)	635,100		31,602,576
Schering-Plough Corp.(a)	2,819,460		48,015,404
Shire PLC, ADR (United Kingdom)	110,200		4,934,756
Teva Pharmaceutical Industries Ltd., ADR (Israel)(a)	508,800		21,659,616
Wyeth	486,600		18,252,366
			173,605,946
Semiconductors & Semiconductor Equipment — 0.9%
ASML Holding NV (Netherlands)(a)	1,211,308		21,888,336
Spansion, Inc. (Class A Stock)*(a)	2,861,500		541,682
			22,430,018
Software — 3.2%
Adobe Systems, Inc.*	546,600		11,637,114
CA, Inc.(a)	1,000,900		18,546,677
Microsoft Corp.(a)	1,203,124		23,388,731

SEE NOTES TO FINANCIAL STATEMENTS.

A37

	EQUITY PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Software (continued)
Oracle Corp.*	405,300	$	7,185,969
Symantec Corp.*(a)	1,553,900		21,008,728
			81,767,219
Textiles, Apparel & Luxury Goods — 0.5%
NIKE, Inc. (Class B Stock)	246,800		12,586,800
Tobacco — 1.0%
Philip Morris International, Inc.	597,560		25,999,836
Transportation — 0.5%
Norfolk Southern Corp.	288,040		13,552,282
Wireless Telecommunication Services — 0.9%
American Tower Corp. (Class A Stock)*	94,780		2,778,949
NII Holdings, Inc.*(a)	815,500		14,825,790
Sprint Nextel Corp.*(a)	2,622,836		4,799,790
			22,404,529
TOTAL LONG-TERM INVESTMENTS (cost $2,910,669,945)			2,465,030,096
SHORT-TERM INVESTMENT — 25.7%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund —Taxable Money Market Series (cost $648,452,738; includes $596,704,279 of cash collateral for securities on loan)(b)(w)(Note 4)	648,452,738		648,452,738
TOTAL INVESTMENTS — 123.5% (cost $3,559,122,683)			3,113,482,834
LIABILITIES IN EXCESS OF OTHER ASSETS — (23.5)%			(592,127,124	)
NET ASSETS — 100.0%		$	2,521,355,710

The following abbreviation is used in portfolio descriptions:

ADR American Depositary Receipt

* Non-income producing security.

(a) All or a portion of security is on loan. The aggregate market value of such securities is $565,214,365; cash collateral of $596,704,279 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(w) Prudential Investments LLC, the manager of the Portfolio also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio's own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio's assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	3,113,482,834	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	3,113,482,834	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	23,529,912
Realized gain (loss)		(28,385,420	)
Change in unrealized appreciation (depreciation)		8,236,728
Net purchases (sales)		(3,381,220	)
Transfers in and/or out of Level 3		—
Balance as of 12/31/08	$	—

SEE NOTES TO FINANCIAL STATEMENTS.

A38

EQUITY PORTFOLIO (continued)

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (23.7% represents investments purchased with collateral from securities on loan)	25.7	%
Oil, Gas & Consumable Fuels	9.2
Pharmaceuticals	6.9
Communication Equipment	5.9
Biotechnology	5.6
Food & Staples Retailing	4.6
Food Products	3.9
Insurance	3.7
Energy Equipment & Services	3.3
Software	3.2
Computers & Peripherals	3.2
Media	3.1
Capital Markets	2.6
Household Products	2.5
Healthcare Providers & Services	2.4
Healthcare Equipment & Supplies	2.3
Construction	2.2
Internet Software & Services	2.1
Beverages	2.0
Multi-line Retail	1.7
Industrial Conglomerates	1.7
Diversified Financial Services	1.4
Aerospace & Defense	1.4
IT Services	1.4
Commercial Banks	1.4
Diversified Consumer Services	1.4
Multi-Utilities	1.3
Metals & Mining	1.3
Chemicals	1.1
Electric Utilities	1.1
Commercial Services & Supplies	1.1
Tobacco	1.0
Consumer Finance	1.0
Electronic Components	1.0
Building Materials	0.9
Semiconductors & Semiconductor Equipment	0.9
Wireless Telecommunication Services	0.9
Independent Power Producers & Energy Traders	0.9
Internet & Catalog Retail	0.8
Diversified Telecommunication Services	0.7
Financial – Bank & Trust	0.7
Life Science Tools & Services	0.7
Hotels, Restaurants & Leisure	0.6
Air Freight & Logistics	0.6
Transportation	0.5
Textiles, Apparel & Luxury Goods	0.5
Energy – Alternate Sources	0.5
Commercial Services	0.4
Auto Components	0.2
	123.5
Liabilities in excess of other assets	(23.5	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A39

EQUITY PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value, including securities on loan of $565,214,365:
Unaffiliated investments (cost $2,910,669,945)	$	2,465,030,096
Affiliated investments (cost $648,452,738)		648,452,738
Receivable for investments sold		6,852,551
Dividends and interest receivable		4,552,066
Receivable for Series shares sold		26,136
Prepaid expenses		35,852
Total Assets		3,124,949,439
LIABILITIES
Collateral for securities on loan		596,704,279
Payable for investments purchased		2,691,535
Payable to custodian		1,670,136
Payable for Series shares repurchased		1,240,172
Management fee payable		932,920
Accrued expenses and other liabilities		351,859
Deferred trustees’ fees		1,770
Affiliated transfer agent fees payable		933
Distribution fee payable		78
Administration fee payable		47
Total Liabilities		603,593,729
NET ASSETS	$	2,521,355,710
Net assets were comprised of:
Paid-in capital	$	3,420,816,845
Retained earnings		(899,461,135	)
Net assets, December 31, 2008	$	2,521,355,710
Class I:
Net asset value and redemption price per share, $2,520,985,725 / 153,673,372 outstanding shares of beneficial interest	$	16.40
Class II:
Net asset value and redemption price per share, $369,985 / 22,466 outstanding shares of beneficial interest	$	16.47

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $897,280 foreign withholding tax)	$	55,161,588
Affiliated income from securities lending, net		3,427,623
Affiliated dividend income		2,139,421
		60,728,632
EXPENSES
Management fee		16,189,920
Distribution fee—Class II		1,612
Administration fee—Class II		967
Custodian’s fees and expenses		577,000
Shareholders’ reports		356,000
Insurance expenses		62,000
Trustees’ fees		59,000
Legal fees and expenses		20,000
Audit fee		19,000
Commitment fee on syndicated credit agreement		18,000
Transfer agent’s fees and expenses (including affiliated expense of $5,000) (Note 4)		5,000
Miscellaneous		6,522
Total expenses		17,315,021
NET INVESTMENT INCOME		43,413,611
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(413,215,126	)
Foreign currency transactions		(145,726	)
		(413,360,852	)
Net change in unrealized appreciation (depreciation) on:
Investments		(1,236,224,567	)
Foreign currencies		9,114
		(1,236,215,453	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(1,649,576,305	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(1,606,162,694	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	43,413,611		$	51,836,584
Net realized gain (loss) on investment and foreign currency transactions		(413,360,852	)		385,190,299
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(1,236,215,453	)		(37,720,589	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(1,606,162,694	)		399,306,294
DISTRIBUTIONS
Class I		(436,963,357	)		(49,976,890	)
Class II		(63,526	)		(9,549	)
TOTAL DISTRIBUTIONS		(437,026,883	)		(49,986,439	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold		31,235,697			29,826,206
Series shares issued in reinvestment of distributions		437,026,883			49,986,439
Series shares repurchased		(328,918,685	)		(408,578,092	)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		139,343,895			(328,765,447	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(1,903,845,682	)		20,554,408
NET ASSETS:
Beginning of year		4,425,201,392			4,404,646,984
End of year	$	2,521,355,710		$	4,425,201,392

SEE NOTES TO FINANCIAL STATEMENTS.

A40

	FLEXIBLE MANAGED PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 93.7%
COMMON STOCKS — 56.7%	Shares	Value (Note 2)
Aerospace & Defense — 2.0%
Boeing Co. (The)	176,000	$	7,509,920
General Dynamics Corp.	206,000		11,863,540
Honeywell International, Inc.	17,300		567,959
Lockheed Martin Corp.	58,400		4,910,272
Northrop Grumman Corp.	236,700		10,660,968
Raytheon Co.	214,800		10,963,392
United Technologies Corp.	129,500		6,941,200
			53,417,251
Air Freight & Logistics — 0.2%
FedEx Corp.	21,700		1,392,055
Pacer International, Inc.	105,800		1,103,494
United Parcel Service, Inc. (Class B Stock)	70,200		3,872,232
			6,367,781
Airlines — 0.1%
Allegiant Travel Co.(a)	18,700		908,259
Continental Airlines, Inc. (Class B Stock)(a)(b)	148,800		2,687,328
			3,595,587
Auto Components — 0.3%
Fuel Systems Solutions, Inc.(a)(b)	95,800		3,138,408
Johnson Controls, Inc.	199,300		3,619,288
			6,757,696
Beverages — 1.3%
Coca-Cola Co. (The)(b)	383,400		17,356,518
Coca-Cola Enterprises, Inc.	162,600		1,956,078
Constellation Brands, Inc. (Class A Stock)(a)	67,500		1,064,475
Dr. Pepper Snapple Group, Inc.(a)	31,000		503,750
Pepsi Bottling Group, Inc.	64,200		1,445,142
PepsiAmericas, Inc.	16,900		344,084
PepsiCo, Inc.	225,920		12,373,638
			35,043,685
Biotechnology — 1.0%
Amgen, Inc.(a)(b)	325,408		18,792,312
Biogen Idec, Inc.(a)	129,800		6,182,374
Cubist Pharmaceuticals, Inc.(a)(b)	15,500		374,480
			25,349,166
Building Products
NCI Buildings Systems, Inc.(a)(b)	27,300		444,990
Capital Markets — 1.2%
Ameriprise Financial, Inc.	121,200		2,831,232
Bank of New York Mellon Corp. (The)	152,100		4,308,993
Charles Schwab Corp. (The)	121,000		1,956,570
Goldman Sachs Group, Inc. (The)	114,600		9,671,094
Morgan Stanley(b)	612,990		9,832,360
State Street Corp.	104,700		4,117,851
			32,718,100
Chemicals — 0.6%
Air Products and Chemicals, Inc.	61,900		3,111,713
Ashland, Inc.	203,000		2,133,530
Dow Chemical Co. (The)	432,200		6,521,898
Eastman Chemical Co.	15,200		481,992

COMMON STOCKS (continued)	Shares	Value (Note 2)
Chemicals (continued)
Mosaic Co. (The)	75,100	$	2,598,460
Nalco Holdings Co.	94,100		1,085,914
Rockwood Holdings, Inc.(a)	29,700		320,760
Solutia, Inc.(a)	24,500		110,250
Terra Industries, Inc.	36,900		615,123
			16,979,640
Commercial Banks — 1.6%
Bank of Hawaii Corp.	6,900		311,673
First Midwest Bancorp, Inc.	26,800		535,196
Huntington Bancshares, Inc.(b)	315,600		2,417,496
Oriental Financial Group, Inc. (Puerto Rico)	18,100		109,505
PNC Financial Services Corp.(b)	156,300		7,658,700
Regions Financial Corp.	137,300		1,092,908
SunTrust Banks, Inc.	70,000		2,067,800
Susquehanna Bancshares, Inc.	33,900		539,349
U.S. Bancorp	400,932		10,027,309
Wachovia Corp.	119,600		662,584
Webster Financial Corp.	53,600		738,608
Wells Fargo & Co.(b)	565,900		16,682,732
			42,843,860
Commercial Services & Supplies
Deluxe Corp.	51,000		762,960
Communications Equipment — 1.5%
Cisco Systems, Inc.(a)	1,249,300		20,363,590
Corning, Inc.	977,700		9,317,481
F5 Networks, Inc.(a)(b)	164,100		3,751,326
Harris Corp.	24,100		917,005
InterDigital, Inc.(a)(b)	23,800		654,500
QUALCOMM, Inc.	90,800		3,253,364
			38,257,266
Computers & Peripherals — 2.8%
Apple, Inc.(a)	84,300		7,195,005
Dell, Inc.(a)	982,300		10,058,752
Hewlett-Packard Co.	679,065		24,643,269
International Business Machines Corp.	314,400		26,459,904
Lexmark International, Inc. (Class A Stock)(a)	23,600		634,840
NCR Corp.(a)	20,700		292,698
QLogic Corp.(a)(b)	75,800		1,018,752
Synaptics, Inc.(a)	93,500		1,548,360
Western Digital Corp.(a)	163,200		1,868,640
			73,720,220
Construction & Engineering — 0.3%
Fluor Corp.	91,300		4,096,631
Jacobs Engineering Group, Inc.(a)	58,900		2,833,090
			6,929,721
Construction Materials
Headwaters, Inc.(a)(b)	82,900		559,575
Consumer Finance — 0.1%
American Express Co.	100,700		1,867,985
Capital One Financial Corp.(b)	23,200		739,848
			2,607,833

SEE NOTES TO FINANCIAL STATEMENTS.

A41

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Diversified Consumer Services — 0.3%
Apollo Group, Inc. (Class A Stock)(a)	51,200	$	3,922,944
H&R Block, Inc.	62,900		1,429,088
ITT Educational Services, Inc.(a)(b)	18,300		1,738,134
Jackson Hewitt Tax Service, Inc.	20,300		318,507
Regis Corp.	18,900		274,617
Weight Watchers International, Inc.	12,400		364,808
			8,048,098
Diversified Financial Services — 2.0%
Bank of America Corp.(b)	1,470,482		20,704,386
CIT Group, Inc.(b)	138,900		630,606
Citigroup, Inc.	1,833,762		12,304,543
Interactive Brokers Group, Inc. (Class A Stock)(a)(b)	30,400		543,856
JPMorgan Chase & Co.	590,194		18,608,817
			52,792,208
Diversified Telecommunication Services — 2.3%
AT&T, Inc.	1,139,147		32,465,690
CenturyTel, Inc.	94,000		2,569,020
Embarq Corp.	26,900		967,324
Frontier Communications Corp.	64,500		563,730
Verizon Communications, Inc.	479,388		16,251,253
Windstream Corp.	732,000		6,734,400
			59,551,417
Electrical Equipment — 0.6%
Acuity Brands, Inc.	69,400		2,422,754
Emerson Electric Co.	338,100		12,377,841
Energy Conversion Devices, Inc.(a)(b)	27,300		688,233
Polypore International, Inc.(a)	42,000		317,520
			15,806,348
Electrical Utilities — 1.7%
American Electric Power Co., Inc.	311,100		10,353,408
DPL, Inc.	23,200		529,888
Duke Energy Corp.	62,000		930,620
Edison International	295,800		9,501,096
Entergy Corp.	61,400		5,104,182
Exelon Corp.	123,700		6,878,957
FirstEnergy Corp.	125,900		6,116,222
Pepco Holdings, Inc.	111,200		1,974,912
PPL Corp.	135,400		4,155,426
			45,544,711
Electronic Equipment & Instruments — 0.1%
Daktronics, Inc.(b)	32,000		299,520
Tyco Electronics Ltd. (Bermuda)	199,600		3,235,516
			3,535,036
Energy Equipment & Services — 1.0%
Complete Production Services, Inc.(a)	112,100		913,615
ENSCO International, Inc.	156,200		4,434,518
Halliburton Co.	239,800		4,359,564
Noble Corp.	220,300		4,866,427
Schlumberger Ltd. (Netherlands)	239,800		10,150,734
Superior Energy Services, Inc.(a)	45,200		720,036
Willbros Group, Inc. (Panama)(a)(b)	38,900		329,483
			25,774,377

COMMON STOCKS (continued)	Shares	Value (Note 2)
Food & Staples Retailing — 1.8%
Costco Wholesale Corp.	18,100	$	950,250
CVS Caremark Corp.	21,700		623,658
Kroger Co. (The)	350,900		9,267,269
Safeway, Inc.	386,100		9,177,597
SUPERVALU, Inc.	145,300		2,121,380
Sysco Corp.	174,600		4,005,324
Wal-Mart Stores, Inc.	355,300		19,918,118
			46,063,596
Food Products — 1.4%
Archer-Daniels-Midland Co.(b)	325,600		9,387,048
Bunge Ltd.	48,100		2,490,137
ConAgra Foods, Inc.	407,300		6,720,450
General Mills, Inc.	134,600		8,176,950
Kellogg Co.	54,500		2,389,825
Kraft Foods, Inc. (Class A Stock)	253,700		6,811,845
			35,976,255
Gas Utilities — 0.1%
ONEOK, Inc.	79,000		2,300,480
Healthcare Equipment & Supplies — 1.5%
American Medical Systems Holdings, Inc.(a)	84,100		756,059
Becton, Dickinson & Co.	155,900		10,662,001
Boston Scientific Corp.(a)	790,300		6,116,922
Covidien Ltd. (Bermuda)	203,900		7,389,336
Haemonetics Corp.(a)	3,900		220,350
Invacare Corp.	12,500		194,000
Medtronic, Inc.	442,300		13,897,066
Varian Medical Systems, Inc.(a)(b)	24,300		851,472
			40,087,206
Healthcare Providers & Services — 1.3%
Coventry Health Care, Inc.(a)	198,200		2,949,216
Express Scripts, Inc.(a)	214,000		11,765,720
Humana, Inc.(a)(b)	259,100		9,659,248
McKesson Corp.	5,100		197,523
UnitedHealth Group, Inc.	106,400		2,830,240
WellPoint, Inc.(a)(b)	133,600		5,628,568
			33,030,515
Hotels, Restaurants & Leisure — 0.8%
Carnival Corp.	204,600		4,975,872
Domino’s Pizza, Inc.(a)	13,400		63,114
International Speedway Corp. (Class A Stock)	14,200		407,966
McDonald’s Corp.	111,300		6,921,747
Royal Caribbean Cruises Ltd.	336,500		4,626,875
WMS Industries, Inc.(a)	27,800		747,820
Wyndham Worldwide Corp.	75,400		493,870
Yum! Brands, Inc.	132,600		4,176,900
			22,414,164
Household Durables — 0.4%
Harman International Industries, Inc.(b)	115,800		1,937,334
Jarden Corp.(a)(b)	192,800		2,217,200
Leggett & Platt, Inc.	344,200		5,228,398
			9,382,932

SEE NOTES TO FINANCIAL STATEMENTS.

A42

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Household Products — 2.2%
Colgate-Palmolive Co.	193,300	$	13,248,782
Kimberly-Clark Corp.	197,900		10,437,246
Procter & Gamble Co.	557,005		34,434,049
			58,120,077
Independent Power Producers & Energy Traders — 0.2%
AES Corp. (The)(a)(b)	551,900		4,547,656
Industrial Conglomerates — 1.4%
3M Co.	71,500		4,114,110
General Electric Co.	1,496,200		24,238,440
Tyco International Ltd. (Bermuda)	354,700		7,661,520
			36,014,070
Insurance — 1.8%
Aflac, Inc.(b)	240,100		11,006,184
Allstate Corp. (The)	306,900		10,054,044
American Financial Group, Inc.	118,500		2,711,280
Assurant, Inc.(b)	171,200		5,136,000
Chubb Corp. (The)	13,500		688,500
CNA Financial Corp.	20,600		338,664
Delphi Financial Group, Inc. (Class A Stock)	22,100		407,524
Loews Corp.	126,900		3,584,925
MBIA, Inc.(b)	451,900		1,839,233
MetLife, Inc.	67,200		2,342,592
Platinum Underwriters Holdings Ltd. (Bermuda)	83,000		2,994,640
Travelers Cos, Inc. (The)	94,900		4,289,480
XL Capital Ltd. (Class A Stock)	143,800		532,060
			45,925,126
Internet & Catalog Retail — 0.1%
Expedia, Inc.(a)	285,000		2,348,400
PetMed Express, Inc.(a)	32,400		571,212
			2,919,612
Internet Software & Services — 0.9%
EarthLink, Inc.(a)(b)	377,800		2,553,928
eBay, Inc.(a)	593,900		8,290,844
Google, Inc. (Class A Stock)(a)	40,400		12,429,060
			23,273,832
IT Services — 0.3%
Accenture Ltd. (Class A Stock) (Bermuda)	132,100		4,331,559
Automatic Data Processing, Inc.	85,000		3,343,900
Convergys Corp.(a)	151,200		969,192
			8,644,651
Leisure Equipment & Products
Jakks Pacific, Inc.(a)	15,000		309,450
Life Sciences, Tools & Services
Life Technologies Corp.(a)	52,536		1,224,614
Machinery — 0.5%
AGCO Corp.(a)	59,800		1,410,682
Bucyrus International, Inc.	125,300		2,320,556
Crane Co.	14,200		244,808
Cummins, Inc.	57,000		1,523,610
Deere & Co.	109,700		4,203,704
Flowserve Corp.	44,500		2,291,750

COMMON STOCKS (continued)	Shares	Value (Note 2)
Machinery (continued)
Illinois Tool Works, Inc.	9,800	$	343,490
Titan International, Inc.	63,700		525,525
			12,864,125
Media — 1.3%
CBS Corp. (Class B Stock)	362,019		2,964,936
Comcast Corp. (Class A Stock)	40,673		686,560
DIRECTV Group, Inc.(a)(b)	362,700		8,309,457
DISH Network Corp. (Class A Stock)(a)	180,300		1,999,527
Gannett Co., Inc.(b)	689,800		5,518,400
Liberty Media Corp. (Class A Stock)(a)	161,300		2,819,524
Meredith Corp.(b)	43,400		743,008
Time Warner, Inc.	409,800		4,122,588
Walt Disney Co. (The)	272,500		6,183,025
			33,347,025
Metals & Mining — 0.7%
AK Steel Holding Corp.	512,000		4,771,840
Century Aluminum Co.(a)	203,000		2,030,000
Cliffs Natural Resources, Inc.(b)	23,100		591,591
Newmont Mining Corp.	154,800		6,300,360
Reliance Steel & Aluminum Co.	13,700		273,178
United States Steel Corp.(b)	126,200		4,694,640
			18,661,609
Multiline Retail — 0.1%
Big Lots, Inc.(a)(b)	103,100		1,493,919
Multi-Utilities — 0.8%
Centerpoint Energy, Inc.	153,800		1,940,956
CMS Energy Corp.(b)	188,300		1,903,713
Dominion Resources, Inc.	30,500		1,093,120
NiSource, Inc.	147,900		1,622,463
Public Service Enterprise Group, Inc.	337,400		9,841,958
Sempra Energy	79,500		3,389,085
			19,791,295
Office Electronics — 0.2%
Xerox Corp.	630,100		5,021,897
Oil, Gas & Consumable Fuels — 6.3%
Apache Corp.	36,700		2,735,251
Chevron Corp.	348,256		25,760,496
ConocoPhillips (Class B Stock)	399,634		20,701,041
CONSOL Energy, Inc.	35,900		1,026,022
Devon Energy Corp.	57,700		3,791,467
Encore Acquisition Co.(a)	7,000		178,640
EOG Resources, Inc.	7,900		525,982
Exxon Mobil Corp.	837,416		66,850,920
Forest Oil Corp.(a)	105,900		1,746,291
Foundation Coal Holdings, Inc.	42,100		590,242
Marathon Oil Corp.	249,400		6,823,584
Mariner Energy, Inc.(a)	64,100		653,820
McMoRan Exploration Co.(a)	144,500		1,416,100
Murphy Oil Corp.	120,200		5,330,870
Newfield Exploration Co.(a)	45,900		906,525
Occidental Petroleum Corp.	34,000		2,039,660
Overseas Shipholding Group, Inc.	15,300		644,283

SEE NOTES TO FINANCIAL STATEMENTS.

A43

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Peabody Energy Corp.	344,100	$	7,828,275
Southwestern Energy Co.(a)	248,600		7,201,942
Tesoro Petroleum Corporation	84,300		1,110,231
Valero Energy Corp.	272,300		5,892,572
Western Refining, Inc.(b)	106,100		823,336
			164,577,550
Paper & Forest Products
MeadWestvaco Corp.	37,200		416,268
Pharmaceuticals — 5.0%
Abbott Laboratories	273,600		14,602,032
Allergan, Inc.	72,200		2,911,104
Bristol-Myers Squibb Co.	435,200		10,118,400
Eli Lilly & Co.	395,400		15,922,758
Forest Laboratories, Inc.(a)	179,600		4,574,412
Johnson & Johnson	408,498		24,440,435
Medicines Co. (The)(a)(b)	56,600		833,718
Merck & Co., Inc.	632,300		19,221,920
Pfizer, Inc.(b)	1,556,165		27,559,682
Warner Chilcott Ltd. (Class A Stock) (Bermuda)(a)	42,800		620,600
Wyeth	263,400		9,880,134
			130,685,195
Real Estate Investment Trusts — 0.3%
Brandywine Realty Trust	278,400		2,146,464
CBL & Associates Properties, Inc.(b)	203,900		1,325,350
Colonial Properties Trust	87,300		727,209
First Industrial Realty Trust, Inc.	58,200		439,410
Host Hotels & Resorts, Inc.	248,500		1,881,145
Pennsylvania Real Estate Investment Trust(b)	105,800		788,210
Sunstone Hotel Investors, Inc.	152,200		942,118
			8,249,906
Real Estate Management & Development
CB Richard Ellis Group, Inc. (Class A Stock)(a)	165,600		715,392
Road & Rail — 0.9%
Burlington Northern Santa Fe Corp.(b)	79,800		6,041,658
Norfolk Southern Corp.(b)	226,000		10,633,300
Ryder System, Inc.	69,100		2,679,698
Union Pacific Corp.(b)	105,500		5,042,900
			24,397,556
Semiconductors & Semiconductor Equipment — 0.9%
Analog Devices, Inc.	37,900		720,858
Broadcom Corp. (Class A Stock)(a)	73,600		1,248,992
Integrated Device Technology, Inc.(a)	35,000		196,350
Intel Corp.(b)	1,192,500		17,482,050
Silicon Laboratories, Inc.(a)(b)	90,800		2,250,024
Texas Instruments, Inc.	25,900		401,968
Volterra Semiconductor Corp.(a)(b)	48,500		346,775
			22,647,017

COMMON STOCKS (continued)	Shares	Value (Note 2)
Software — 2.2%
Adobe Systems, Inc.(a)	208,700	$	4,443,223
Factset Research Systems, Inc.(b)	43,300		1,915,592
Microsoft Corp.	1,858,200		36,123,408
Oracle Corp.(a)	233,300		4,136,409
Quest Software, Inc.(a)	42,000		528,780
Symantec Corp.(a)(b)	719,300		9,724,936
			56,872,348
Specialty Retail — 0.6%
Aeropostale, Inc.(a)	18,900		304,290
Gap, Inc. (The)	241,500		3,233,685
Gymboree Corp.(a)(b)	52,000		1,356,680
Home Depot, Inc.	286,950		6,605,589
Ltd. Brands, Inc.	111,300		1,117,452
Rent-A-Center, Inc.(a)	82,600		1,457,890
TJX Cos., Inc.(b)	75,600		1,555,092
Tractor Supply Co.(a)	35,400		1,279,356
			16,910,034
Textiles, Apparel & Luxury Goods — 0.5%
Coach, Inc.(a)	455,600		9,462,812
Jones Apparel Group, Inc.	262,700		1,539,422
Polo Ralph Lauren Corp.	47,100		2,138,811
			13,141,045
Tobacco — 1.1%
Altria Group, Inc.	706,100		10,633,866
Philip Morris International, Inc.	251,200		10,929,712
Reynolds American, Inc.	148,500		5,986,035
			27,549,613
Trading Companies & Distributors — 0.1%
WESCO International, Inc.(a)	100,800		1,938,384
TOTAL COMMON STOCKS (cost $1,745,160,944)			1,486,921,940
PREFERRED STOCK
Banking
JPMorgan Chase Capital XXVI (cost $700,000)	28,000		685,720
	Units
RIGHTS
Diversified Financial Services
Fortis (cost $0)	8,208		—

SEE NOTES TO FINANCIAL STATEMENTS.

A44

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS — 36.4%	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Aerospace/Defense — 0.2%
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2	4.75%	08/15/10	$	2,150	$	2,137,350
Boeing Capital Corp., Sr. Unsec. Notes	A2	6.10%	03/01/11		925		936,596
Goodrich Corp., Sr. Unsec. Notes	Baa2	6.80%	07/01/36		848		905,371
Raytheon Co., Sr. Unsec. Notes	Baa1	5.50%	11/15/12		595		601,467
							4,580,784
Airlines — 0.1%
American Airlines, Inc., Pass-thru Certs., Ser. 01-1	B1	6.817%	05/23/11		2,520		1,612,800
Continental Airlines, Inc., Pass-thru Certs., Ser. 981A	Baa2	6.648%	09/15/17		292		213,047
Delta Air Lines, Inc., Pass-thru Certs., Ser. 071A	Baa1	6.821%	08/10/22		486		308,716
Southwest Airlines Co., Sr. Unsec. Notes	Baa1	6.50%	03/01/12		1,005		940,672
							3,075,235
Asset Backed Securities — 0.5%
American Express Credit Account Master Trust, Ser. 2004-4, Class C, 144A(g)	Baa1	1.665%	03/15/12		1,170		987,854
American Express Credit Account Master Trust, Ser. 2004-C, Class C, 144A(g)	Baa1	1.695%	02/15/12		60		51,584
Amortizing Residential Collateral Trust, Ser. 2002-BC7 M2(g)	CCC(f)	1.8213%	10/25/32		107		10,534
Amortizing Residential Collateral Trust, Ser. 2002-BC9 M1(g)	A1	2.1212%	12/25/32		2,212		1,191,083
Bank of America Credit Card Trust, Ser. 2006-C5, Class C5(g)	Baa2	1.595%	01/15/16		3,209		1,152,721
CDC Mortgage Capital Trust, Ser. 2002-HE3, Class M1(g)	Baa2	2.1212%	03/25/33		642		383,332
Centex Home Equity, Ser. 2005-A, Class M2(g)	Aa2	0.971%	01/25/35		1,790		1,170,473
Citibank Credit Card Insurance Trust, Ser. 2006-C1, Class C1(g)	Baa2	0.908%	02/20/15		1,350		624,547
Credit-Based Asset Servicing and Securitization LLC, Ser. 2005-CB6, Class A3	Aaa	5.12%	07/25/35		864		799,458
Equity One ABS, Inc., Ser. 2004-3, Class M1	Aa2	5.70%	07/25/34		1,280		899,203
First Franklin Mortgage Loan Trust, Ser. 2005-FFH1, Class M2(g)	A2	.991%	06/25/36		1,450		630,016
Household Home Equity Loan Trust, Ser. 2005-2, Class M2(g)	Aa1	0.998%	01/20/35		451		289,064
MBNA Master Credit Card Trust, Ser. 1999-J, Class A	Aaa	7.00%	02/15/12		1,830		1,835,645
Morgan Stanley ABS Capital I, Ser. 2004-NC3, Class M2(g)	A2	2.1212%	03/25/34		522		364,165
Morgan Stanley Dean Witter Capital I, Ser. 2002-HE1, Class M1(g)	Aa2	1.3713%	07/25/32		1,329		734,134
Morgan Stanley Dean Witter Capital I, Ser. 2002-NC2, Class M2, 144A(g)	B(f)	2.7962%	04/25/32		361		207,428
Morgan Stanley Dean Witter Capital I, Ser. 2002-NC4, Class M1(g)	Aaa	1.7462%	09/25/32		1,009		599,220
Saxon Asset Securities Trust, Ser. 2005-2, Class M2(g)	Aa2	0.911%	10/25/35		1,170		521,518
Securitized Asset Backed Receivables LLC, Ser. 2004-OP1, Class M1(g)	Aa2	0.981%	02/25/34		1,325		777,223
Securitized Asset Backed Receivables LLC, Ser. 2006-FR3, Class A3(g)	B2	0.721%	05/25/36		1,100		385,983
SVO VOI Mortgage Corp., Ser. 2005-AA, Class A, 144A	Aaa	5.25%	02/20/21		502		419,242
							14,034,427
Automotive
Johnson Controls, Inc., Sr. Unsec. Notes	A3	5.50%	01/15/16		245		189,860
Banking — 1.4%
Banco Bradesco (Cayman Islands), Sr. Sub. Notes	A2	8.75%	10/24/13		1,760		1,936,000
Bank of America Corp., Jr. Sub. Notes(g)	A1	8.00%	12/29/49		2,200		1,582,434
Bank of America Corp., Sub. Notes	A1	5.75%	08/15/16		1,775		1,658,947
Bank of America NA, Sub. Notes	Aa1	5.30%	03/15/17		930		883,059
Bank of America NA, Sub. Notes	Aa1	6.00%	10/15/36		410		435,331
Bank One Corp., Sub. Notes	Aa3	7.875%	08/01/10		2,250		2,358,337
Bear Stearns Co., Inc. (The), Sr. Unsec. Notes	Aa2	5.30%	10/30/15		515		495,481
Bear Stearns Co., Inc. (The), Sr. Unsec. Notes	Aa2	6.40%	10/02/17		330		342,929
Bear Stearns Co., Inc. (The), Sr. Unsec. Notes	Aa2	7.25%	02/01/18		1,175		1,287,631
Capital One Bank Corp., Sr. Sub. Notes	A3	6.50%	06/13/13		20		17,822
Capital One Financial Corp., Sr. Unsec. Notes, M.T.N.	A3	5.70%	09/15/11		600		559,504

SEE NOTES TO FINANCIAL STATEMENTS.

A45

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Banking (continued)
Citigroup, Inc., Jr. Sub. Notes(b)(g)	Baa2	8.40%	04/29/49	$	1,900	$	1,254,551
Citigroup, Inc., Sr. Unsec. Notes(b)	A2	6.875%	03/05/38		520		591,701
Citigroup, Inc., Sub. Notes	A3	5.00%	09/15/14		454		399,330
Citigroup, Inc., Sub. Notes	A3	6.125%	08/25/36		570		510,603
Citigroup, Inc., Sub. Notes	A3	5.625%	08/27/12		2,800		2,624,795
Countrywide Financial Corp., Gtd. Notes, M.T.N.	Aa2	5.80%	06/07/12		1,190		1,159,837
DEPFA ACS Bank (Ireland), Covered Notes, 144A	Aa1	5.125%	03/16/37		1,380		999,290
First Union National Bank, Sub. Notes	Aa3	7.80%	08/18/10		2,100		2,084,266
Goldman Sachs Group, Inc. (The), Sr. Unsec. Notes	A1	5.45%	11/01/12		600		572,345
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	5.625%	01/15/17		1,190		1,022,302
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.45%	05/01/36		1,615		1,254,214
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.75%	10/01/37		104		84,434
HSBC Bank USA, Sr. Unsec. Notes	Aa2	3.875%	09/15/09		250		249,577
ICICI Bank Ltd. (India), Notes, 144A(g)	Baa2	5.29%	01/12/10		2,385		1,973,588
ICICI Bank Ltd. (Singapore), Bonds, 144A	Baa2	5.75%	11/16/10		1,410		1,198,035
JPMorgan Chase & Co., Sub. Notes	Aa3	6.50%	01/15/09		1,100		1,099,780
JPMorgan Chase & Co., Jr. Sub. Notes(b)(g)	A1	7.90%	04/29/49		2,000		1,663,660
Morgan Stanley, Sr. Unsec. Notes	A2	5.30%	03/01/13		265		240,326
Morgan Stanley, Sr. Unsec. Notes	A2	5.45%	01/09/17		1,045		861,375
Morgan Stanley, Sr. Unsec. Notes, M.T.N.(b)	A2	5.75%	10/18/16		1,300		1,092,355
Morgan Stanley, Sr. Unsec. Notes, M.T.N.	A2	5.95%	12/28/17		620		514,588
MUFG Capital Finance 1 Ltd., (Cayman Islands), Gtd. Notes(g)	A2	6.346%	07/25/49		800		557,378
Santander Central Hispano Issuances (Cayman Islands), Bank Gtd. Notes	Aa2	7.625%	09/14/10		695		678,830
Wells Fargo Bank, Sub. Notes	Aa1	4.75%	02/09/15		585		592,131
Wells Fargo Bank, Sub. Notes	Aa1	6.45%	02/01/11		65		67,375
Wells Fargo Capital XIII, Bank Gtd. Notes, M.T.N.(g)	Aa2	7.70%	12/26/49		1,000		825,311
							35,729,452
Brokerage — 0.2%
Lehman Brothers Holdings, Inc., Sr. Unsec. Notes, M.T.N.(k)	NR	6.875%	05/02/18		700		66,500
Lehman Brothers Holdings, Inc., Sr. Unsec. Notes, M.T.N.(k)	NR	5.25%	02/06/12		1,715		162,925
Lehman Brothers Holdings, Inc., Sub. Notes(k)	NR	6.50%	07/19/17		582		58
Merrill Lynch & Co., Inc., Notes, M.T.N.(b)	A2	6.875%	04/25/18		980		1,025,105
Merrill Lynch & Co., Inc., Sr. Unsec. Notes, M.T.N.(b)	A2	4.25%	02/08/10		1,170		1,143,608
Merrill Lynch & Co., Inc., Sr. Unsec. Notes	A2	4.79%	08/04/10		295		286,808
Merrill Lynch & Co., Inc., Sr. Unsec. Notes	A2	6.40%	08/28/17		35		35,065
Merrill Lynch & Co., Inc., Sr. Unsec. Notes, M.T.N.	A2	5.00%	01/15/15		615		593,189
Merrill Lynch & Co., Inc., Sr. Unsec. Notes, M.T.N	A2	5.77%	07/25/11		520		513,826
							3,827,084
Building Materials & Construction
Hanson PLC (United Kingdom), Gtd. Notes	Ba3	7.875%	09/27/10		1,000		403,862
Lafarge SA (France), Sr. Unsec. Notes	Baa2	6.15%	07/15/11		910		792,320
							1,196,182
Cable — 0.2%
AT&T Broadband LLC, Gtd. Notes	Baa2	9.455%	11/15/22		255		285,691
Comcast Corp., Gtd. Notes	Baa2	6.50%	11/15/35		450		447,858
Comcast Corp., Gtd. Notes	Baa2	6.95%	08/15/37		65		68,448
Comcast Corp., Gtd. Notes	Baa2	6.45%	03/15/37		155		154,243
Cox Communications, Inc., Sr. Unsec. Notes, Class A	Baa3	6.75%	03/15/11		950		924,746
Cox Communications, Inc., Sr. Unsec. Notes, Class A	Baa3	7.875%	08/15/09		1,275		1,253,311
Time Warner Cable, Inc., Gtd. Notes(b)	Baa2	5.40%	07/02/12		2,510		2,343,706
							5,478,003
Capital Goods — 0.2%
American Standard, Inc., Gtd. Notes(b)	Baa3	7.625%	02/15/10		770		769,993
Caterpillar Financial Services Corp., Sr. Unsec. Notes, M.T.N.	A2	5.50%	03/15/16		825		785,062

SEE NOTES TO FINANCIAL STATEMENTS.

A46

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Capital Goods (continued)
Caterpillar, Inc., Sr. Unsec. Notes	A2	7.25%	09/15/09	$	700	$	712,737
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	5.80%	10/15/12		460		384,803
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	6.375%	10/15/17		1,302		903,604
Erac USA Finance Co., Gtd. Notes, 144A	Baa2	7.00%	10/15/37		380		209,295
FedEx Corp., Gtd. Notes	Baa2	7.25%	02/15/11		400		406,352
General Electric Co., Sr. Unsec. Notes	Aaa	5.25%	12/06/17		200		199,389
United Technologies Corp., Sr. Unsec. Notes	A2	6.35%	03/01/11		825		872,312
							5,243,547
Chemicals — 0.3%
Dow Chemical Co. (The), Sr. Unsec. Notes	Baa1	5.97%	01/15/09		390		390,010
Dow Chemical Co. (The), Sr. Unsec. Notes	Baa1	6.125%	02/01/11		685		685,930
Huntsman LLC, Sec. Notes	Ba1	11.625%	10/15/10		2,000		1,749,999
ICI Wilmington, Inc., Gtd. Notes	A3	5.625%	12/01/13		720		694,150
Lubrizol Corp., Gtd. Notes	Baa2	4.625%	10/01/09		860		844,726
Monsanto Co., Sr. Unsec. Notes	A2	5.875%	04/15/38		605		648,841
PPG Industries, Inc., Sr. Unsec. Notes	A3	5.75%	03/15/13		3,500		3,461,275
Union Carbide Corp., Sr. Unsec. Notes	Ba2	7.50%	06/01/25		460		378,317
							8,853,248
Collateralized Mortgage Obligations — 0.4%
Banc of America Mortgage Securities, Inc., Ser. 2005-A, Class 2A1(g)	Aaa	4.443%	02/25/35		1,189		788,851
Banc of America Mortgage Securities, Inc., Ser. 2005-B, Class 2A1(g)	Aaa	4.386%	03/25/35		890		544,197
Bank of America Alternative Loan Trust, Ser. 2005-12, Class 3CB1	Aaa	6.00%	01/25/36		3,495		2,723,606
Chase Mortgage Finance Corp., Ser. 2007-A1 Class 1A5(g)	Aaa	4.884%	02/25/37		2,968		2,265,336
Countrywide Alternative Loan Trust, Ser. 2004-18CB, Class 3A1	Aaa	5.25%	09/25/19		1,236		1,127,302
JPMorgan Mortgage Trust, Ser. 2007-A1, Class 4A1(g)	Aaa	4.066%	07/25/35		2,317		1,685,276
Master Alternative Loan Trust, Ser. 2004-4, Class 4A1	Aaa	5.00%	04/25/19		428		396,292
Structured Adjustable Rate Mortgage Loan, Ser. 2004-1, Class 4A3(g)	Aaa	5.365%	02/25/34		775		481,553
Washington Mutual Alternative Mortgage, Pass-Through Certificates, Ser. 2005-1, Class 3A	AAA(f)	5.00%	03/25/20		484		388,438
							10,400,851
Commercial Mortgage Backed Securities — 3.6%
Banc of America Commercial Mortgage, Inc., Ser. 2003-2, Class A3(g)	AAA(f)	4.873%	03/11/41		2,500		2,286,029
Banc of America Commercial Mortgage, Inc., Ser. 2004-2, Class A4	Aaa	4.153%	11/10/38		2,800		2,570,049
Banc of America Commercial Mortgage, Inc, Ser. 2005-1, Class ASB(g)	AAA(f)	4.967%	11/10/42		798		677,037
Banc of America Commercial Mortgage, Inc., Ser. 2006-4, Class A3A	Aaa	5.60%	07/10/46		3,700		2,632,833
Banc of America Commercial Mortgage, Inc., Ser. 2007-3, Class A2(g)	Aaa	5.658%	06/10/49		5,900		4,659,066
Bear Stearns Commercial Mortgage Securities, Ser.2005-T18, Class AAB(g)	Aaa	4.823%	02/13/42		1,775		1,406,826
Bear Stearns Commercial Mortgage Securities, Ser.2005-T20, Class AAB, I/O(g)	Aaa	5.135%	10/12/42		2,400		1,966,192
Commercial Mortgage Load Trust, Ser. 2008-LS1, Class A2(g)	Aaa	6.0197%	12/10/49		2,200		1,736,997
Commercial Mortgage Pass-Through Certificates, I/O, Ser. 2004-LB2A, Class X2, 144A(g)	AAA(f)	0.852%	03/10/39		9,090		135,208
Commercial Mortgage Acceptance Corp., Ser. 1998-C2, Class F, 144A(g)	A-(f)	5.44%	09/15/30		890		790,206
CS First Boston Mortgage Securities Corp., Ser. 2004-C3, Class A4	Aaa	4.835%	07/15/36		880		800,940
CS First Boston Mortgage Securities Corp., Ser. 2004-C4, Class A4	Aaa	4.283%	10/15/39		1,400		1,276,137
CS First Boston Mortgage Securities Corp., Ser. 2005-C5, Class A4(g)	AAA(f)	5.10%	08/15/38		6,800		5,564,461
CS Mortgage Capital Certificate Corp., Ser. 2006-C1, Class A4(g)	AAA(f)	5.552%	02/15/39		2,700		2,192,242
CW Capital Cobalt Ltd., Ser. 2007-C3, Class A3(g)	AAA(f)	5.82%	05/15/46		2,200		1,441,918
DLJ Commercial Mortgage Corp., Ser. 2000-CF1, Class A1B	AAA(f)	7.62%	06/10/33		2,588		2,589,995
General Electric Capital Commercial Mortgage Corp., I/O Ser. 2004-C2, Class X2, 144A(g)	Aaa	0.532%	03/10/40		17,687		195,015
GMAC Commercial Mortgage Securities, Inc., Ser. 2005-C1, Class A5	AAA(f)	4.697%	05/10/43		2,720		2,205,055

SEE NOTES TO FINANCIAL STATEMENTS.

A47

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Commercial Mortgage Backed Securities (continued)
Greenwich Capital Commercial Funding Corp., Inc., Ser. 2005-GG5, Class A5(g)	Aaa	5.224%	04/10/37	$	9,550	$	7,848,220
GS Mortgage Securities Corp. II, Ser. 2006-GG6, Class AAB(g)	AAA(f)	5.587%	04/10/38		6,650		5,157,541
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP1, Class ASB(g)	Aaa	4.853%	03/15/46		4,200		3,527,562
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP2, Class ASB	Aaa	4.659%	07/15/42		6,350		5,171,231
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-CB16, Class ASB	Aaa	5.523%	05/12/45		3,900		2,971,468
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP6, Class X2, I/O(g)	Aaa	0.066%	04/15/43		130,647		426,314
JPMorgan Commercial Mortgage Finance Corp., Ser. 2000-C10, Class A2(g)	Aaa	7.371%	08/15/32		7,402		7,385,356
JPMorgan Commercial Mortgage Finance Corp., Ser. 2003-CB6, Class A2(g)	Aaa	5.255%	07/12/37		2,100		1,903,536
KeyCorp., Ser. 2000-C1, Class A2(g)	Aaa	7.727%	05/17/32		7,783		7,782,954
LB-UBS Commercial Mortgage Trust, Ser. 2003-C8, Class A3	Aaa	4.83%	11/15/27		1,460		1,349,060
LB-UBS Commercial Mortgage Trust, Ser. 2004-C6, Class A5(g)	AAA(f)	4.826%	08/15/29		3,910		3,484,850
LB-UBS Commercial Mortgage Trust, Ser. 2006-C6, Class AAB	Aaa	5.341%	09/15/39		3,580		2,690,313
Merrill Lynch Mortgage Trust, Ser. 2004-KEY2, Class A3	Aaa	4.615%	08/12/39		2,000		1,782,652
Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2006-2, Class A4(g)	Aaa	5.9093%	06/12/46		1,795		1,438,181
Morgan Stanley Capital I, Ser. 2006-IQ11, Class A4(g)	AAA(f)	5.772%	10/15/42		2,600		2,134,096
Morgan Stanley Capital I, Ser. 2007-HQ11, Class AAB	Aaa	5.444%	02/12/44		4,600		3,291,701
Morgan Stanley Capital I, Ser. 2007-T27, AAB(g)	AAA(f)	5.65%	06/11/42		1,105		826,521
							94,297,762
Consumer — 0.1%
Avon Products, Inc., Sr. Unsec. Notes	A2	5.75%	03/01/18		1,500		1,411,330
Newell Rubbermaid, Inc., Sr. Unsec. Notes	Baa2	6.25%	04/15/18		1,700		1,367,477
Whirlpool Corp., Sr. Unsec. Notes	Baa2	6.125%	06/15/11		965		859,305
							3,638,112
Electric — 0.8%
Appalachian Power Co., Sr. Unsec. Notes, Ser. J	Baa2	4.40%	06/01/10		620		606,697
Arizona Public Service Co., Sr. Unsec. Notes	Baa2	6.25%	08/01/16		175		140,713
Arizona Public Service Co., Sr. Unsec. Notes	Baa2	6.375%	10/15/11		1,305		1,228,427
Baltimore Gas & Electric Co., Sr. Unsec. Notes	Baa2	6.35%	10/01/36		550		452,640
Carolina Power & Light Co., First Mtge. Bonds	A2	5.25%	12/15/15		525		532,601
CenterPoint Energy Houston Electric LLC, Mtge. Bonds, Ser. J2	Baa2	5.70%	03/15/13		740		704,274
CenterPoint Energy Houston Electric LLC, Mtge. Bonds, Ser. K2	Baa2	6.95%	03/15/33		590		542,463
Consolidated Edison Co. of New York, Sr. Unsec. Notes	A1	5.375%	12/15/15		730		716,526
Consolidated Edison Co. of New York, Inc., Sr. Unsec. Notes	A1	6.75%	04/01/38		200		213,693
Consumers Energy Co., First Mtge. Bonds, Ser. B	Baa1	5.375%	04/15/13		325		319,841
Dominion Resources, Inc., Sr. Unsec. Notes, Ser. D	Baa2	5.125%	12/15/09		970		967,865
Duke Energy Carolinas LLC, First Mtge. Bonds	A2	6.05%	04/15/38		550		603,356
Duke Energy Carolinas LLC, Sr. Unsec. Notes	A3	6.10%	06/01/37		960		1,008,494
E.ON International Finance BV (Netherlands), Gtd. Notes, 144A	A2	6.65%	04/30/38		890		826,670
El Paso Electric Co., Sr. Unsec. Notes	Baa2	6.00%	05/15/35		670		459,264
Empresa Nacional de Electricidad S.A. (Chile), Unsec. Notes, Ser. B	Baa3	8.50%	04/01/09		1,070		1,088,053
Empresa Nacional de Electricidad S.A. (Chile), Unsub. Notes	Baa3	8.625%	08/01/15		1,295		1,400,884
Energy East Corp., Sr. Unsec. Notes	Baa2	6.75%	09/15/33		145		116,604
Exelon Corp., Sr. Unsec. Notes	Baa1	4.90%	06/15/15		155		127,074
Florida Power & Light Co., First Mtge. Bonds	Aa3	5.95%	10/01/33		295		326,139
Georgia Power Co., Sr. Unsec. Notes	A2	5.70%	06/01/17		495		494,969
Indiana Michigan Power Co., Sr. Unsec. Notes	Baa2	5.05%	11/15/14		460		414,377
Midamerican Energy Holdings Co., Sr. Unsec. Notes	Baa1	5.75%	04/01/18		205		199,968
Midamerican Energy Holdings Co., Sr. Unsec. Notes	Baa1	5.95%	05/15/37		300		272,026

SEE NOTES TO FINANCIAL STATEMENTS.

A48

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Electric (continued)
National Rural Utilities Cooperative Finance Corp., Sr. Unsec. Notes, Ser. C, M.T.N.	A2	7.25%	03/01/12	$	185	$	190,480
Nevada Power Co., Mtge. Bonds, Ser. O	Baa3	6.50%	05/15/18		1,260		1,212,957
NiSource Finance Corp., Gtd. Notes	Baa3	5.25%	09/15/17		245		148,513
NiSource Finance Corp., Gtd. Notes	Baa3	5.45%	09/15/20		350		187,457
NSTAR Electric Co., Sr. Unsec. Notes	A1	4.875%	04/15/14		565		565,610
Oncor Electric Delivery Co., Sr. Sec. Notes	Baa3	6.375%	01/15/15		345		330,463
Oncor Electric Delivery Co., Sr. Sec. Notes	Baa3	7.00%	09/01/22		475		443,844
Pacific Gas & Electric Co., Sr. Unsec. Notes	A3	6.05%	03/01/34		1,550		1,646,190
PPL Electric Utilities Corp., Sr. Sec. Notes	A3	6.25%	08/15/09		1,500		1,508,639
Public Service Co. of New Mexico, Sr. Unsec. Notes	Baa3	7.95%	05/15/18		140		113,926
Public Service Electric & Gas Co., Sec. Notes M.T.N.	A3	5.80%	05/01/37		535		500,682
Southern California Edison Co., First Mtge. Bonds	A2	4.65%	04/01/15		470		468,711
Xcel Energy, Inc., Sr. Unsec. Notes	Baa1	5.613%	04/01/17		199		176,209
Xcel Energy, Inc., Sr. Unsec. Notes	Baa1	6.50%	07/01/36		445		408,564
							21,665,863
Energy - Integrated — 0.1%
ConocoPhillips, Sr. Unsec. Notes	A1	8.75%	05/25/10		1,505		1,586,171
TNK-BP Finance SA (Luxembourg), Gtd. Notes, 144A	Baa2	7.50%	07/18/16		1,425		741,000
							2,327,171
Energy - Other — 0.2%
Devon Financing Corp. ULC (Canada), Gtd. Notes	Baa1	7.875%	09/30/31		225		247,748
Halliburton Co., Sr. Unsec. Notes	A2	5.50%	10/15/10		150		153,207
Nexen, Inc. (Canada), Sr. Unsec. Notes	Baa2	6.40%	05/15/37		200		156,496
Pioneer Natural Resources Co., Sr. Unsec. Notes	Ba1	6.875%	05/01/18		1,500		1,049,103
Valero Energy Corp., Sr. Unsec. Notes	Baa2	6.625%	06/15/37		255		187,553
Weatherford International, Inc., Gtd. Notes	Baa1	6.35%	06/15/17		970		827,833
Western Oil Sands, Inc. (Canada), Sr. Sec. Notes	Baa1	8.375%	05/01/12		360		343,671
Woodside Finance Ltd. (Australia), Gtd. Notes, 144A	Baa1	5.00%	11/15/13		1,315		1,316,006
XTO Energy, Inc., Sr. Unsec. Notes	Baa2	6.25%	08/01/17		585		561,762
							4,843,379
Foods — 0.5%
Bunge Ltd. Finance Corp., Gtd. Notes	Baa2	5.35%	04/15/14		1,040		746,112
Cargill, Inc., Sr. Unsec. Notes, 144A	A2	3.625%	03/04/09		1,875		1,872,746
Cargill, Inc., Sr. Unsec. Notes, 144A	A2	6.00%	11/27/17		670		600,752
ConAgra Foods, Inc., Sr. Unsec. Notes	Baa2	7.875%	09/15/10		430		444,941
Delhaize Group (Belgium), Sr. Unsec. Notes(b)	Baa3	6.50%	06/15/17		480		435,837
Diageo Capital PLC (United Kingdom), Gtd. Notes	A3	5.75%	10/23/17		1,005		972,439
Dr Pepper Snapple Group, Inc., Gtd. Notes, 144A	Baa3	6.82%	05/01/18		510		503,040
General Mills, Inc., Sr. Unsec. Notes	Baa1	6.00%	02/15/12		1,050		1,089,236
Kellogg Co., Sr. Unsec. Notes, Ser. B	A3	6.60%	04/01/11		1,875		1,962,373
Kroger Co. (The), Gtd. Notes	Baa2	6.75%	04/15/12		45		45,421
Kroger Co. (The), Gtd. Notes	Baa2	6.80%	04/01/11		670		691,782
McDonald’s Corp., Sr. Unsec. Notes, M.T.N.	A3	6.30%	03/01/38		1,185		1,307,061
Tricon Global Restaurants, Sr. Unsec. Notes.	Baa3	8.875%	04/15/11		180		182,320
Tyson Foods, Inc., Gtd. Notes	Ba3	7.85%	04/01/16		735		543,900
Whitman Corp., Sr. Unsec. Notes	Baa1	6.375%	05/01/09		1,530		1,537,280
							12,935,240
Foreign Government Bonds — 0.2%
DP World Ltd., Bonds, 144A	A1	6.85%	07/02/37		1,680		865,314
Macquarie Bank Ltd., Gov’t. Liquid Gtd. Notes, 144A	Aaa	4.10%	12/17/13		2,345		2,421,119
Pemex Project Funding Master Trust (Mexico), Gtd. Notes	Baa1	8.625%	12/01/23		350		343,420

SEE NOTES TO FINANCIAL STATEMENTS.

A49

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Foreign Government Bonds (continued)
Quebec Province (Canada), Sr. Unsec. Notes	Aa2	5.75%	02/15/09	$	500	$	501,123
RSHB Capital SA for OJSC Russian Agricultural Bank, (Russia) Sr. Sec. Notes, 144A	A3	6.299%	05/15/17		2,190		1,248,300
							5,379,276
Gaming
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.50%	07/01/10		625		396,875
Healthcare & Pharmaceutical 0.5%
Abbott Laboratories, Sr. Unsec. Notes(e)	A1	5.875%	05/15/16		1,145		1,240,112
AmerisourceBergen Corp., Gtd. Notes	Baa3	5.625%	09/15/12		915		856,725
AstraZeneca PLC (United Kingdom), Sr. Unsec. Notes	A1	6.45%	09/15/37		495		562,657
Covidien International Finance SA (Luxembourg), Gtd. Notes	Baa1	6.00%	10/15/17		1,150		1,134,482
Genentech, Inc., Sr. Unsec. Notes	A1	4.75%	07/15/15		280		281,698
GlaxoSmithKline Capital, Inc., Gtd. Notes(e)	A1	5.65%	05/15/18		810		850,766
GlaxoSmithKline Capital, Inc., Gtd. Notes	A1	6.375%	05/15/38		870		982,956
HCA, Inc., Sr. Sec. Notes	B2	9.25%	11/15/16		1,925		1,766,187
Laboratory Corp. of America Holdings, Sr. Unsec. Notes	Baa3	5.625%	12/15/15		580		488,143
Merck & Co., Inc., Sr. Unsec. Notes	Aa3	5.75%	11/15/36		110		115,833
Merck & Co., Inc., Sr. Unsec. Notes	Aa3	5.95%	12/01/28		165		175,730
Schering-Plough Corp., Sr. Unsec. Notes	Baa1	5.55%	12/01/13		720		725,265
Schering-Plough Corp., Sr. Unsec. Notes	Baa1	6.00%	09/15/17		884		875,080
Schering-Plough Corp., Sr. Unsec. Notes	Baa1	6.55%	09/15/37		340		342,731
Teva Pharmaceutical Finance LLC, Gtd. Notes	Baa2	6.15%	02/01/36		120		118,637
Wyeth, Sr. Unsec. Notes	A3	5.95%	04/01/37		1,715		1,904,141
Wyeth, Sr. Unsec. Notes	A3	5.50%	03/15/13		1,210		1,232,528
Wyeth, Sr. Unsec. Notes	A3	6.45%	02/01/24		60		67,663
							13,721,334
Healthcare Insurance — 0.2%
Aetna, Inc., Sr. Unsec. Notes	A3	5.75%	06/15/11		390		380,960
Aetna, Inc., Sr. Unsec. Notes	A3	6.625%	06/15/36		515		428,701
Cigna Corp., Sr. Unsec. Notes	Baa2	6.15%	11/15/36		670		509,804
Coventry Health Care, Inc., Sr. Unsec. Notes	Ba1	6.125%	01/15/15		2,290		1,360,570
UnitedHealth Group, Inc., Sr. Unsec. Notes	Baa1	5.25%	03/15/11		1,350		1,269,356
UnitedHealth Group, Inc., Sr. Unsec. Notes	Baa1	6.00%	06/15/17		195		175,583
UnitedHealth Group, Inc., Sr. Unsec. Notes	Baa1	6.50%	06/15/37		420		352,528
UnitedHealth Group, Inc., Sr. Unsec. Notes	Baa1	6.625%	11/15/37		420		354,034
UnitedHealth Group, Inc., Sr. Unsec. Notes	Baa1	6.875%	02/15/38		445		389,646
Wellpoint, Inc., Sr. Unsec. Notes	Baa1	5.00%	12/15/14		860		747,008
							5,968,190
Insurance — 0.3%
American International Group, Inc., Jr. Sub. Debs., 144A(b)(g)	Baa1	8.175%	05/15/58		890		346,232
American International Group, Inc., Jr. Sub. Notes	Baa1	6.25%	03/15/37		420		156,984
American International Group, Inc., Sr. Unsec. Notes	A3	4.25%	05/15/13		1,080		795,946
American International Group, Inc., Sr. Unsec. Notes	A3	5.05%	10/01/15		180		120,703
American International Group, Inc., Sr. Unsec. Notes, M.T.N.	A3	5.85%	01/16/18		1,660		1,112,672
AXA SA (France), Sub. Notes	A3	8.60%	12/15/30		155		101,491
Berkshire Hathaway Finance Corp., Gtd. Notes	Aaa	4.75%	05/15/12		440		451,672
Liberty Mutual Group, Inc., Bonds, 144A	Baa2	7.00%	03/15/34		850		504,571
Lincoln National Corp., Sr. Unsec. Notes	A3	6.30%	10/09/37		492		298,826
Marsh & McLennan Cos., Inc., Sr. Unsec. Notes	Baa2	5.15%	09/15/10		265		257,958
MetLife, Inc., Sr. Unsec. Notes	A2	5.70%	06/15/35		1,020		830,612
MetLife, Inc., Sr. Unsec. Notes	A2	6.125%	12/01/11		335		330,425
MetLife, Inc., Sr. Unsec. Notes	A2	6.375%	06/15/34		400		331,124
St. Paul Travelers Cos., Inc. (The), Sr. Unsec. Notes	A2	6.75%	06/20/36		685		713,119

SEE NOTES TO FINANCIAL STATEMENTS.

A50

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Insurance (continued)
W.R. Berkley Corp., Sr. Unsec. Notes	Baa2	5.60%	05/15/15	$	555	$	465,009
W.R. Berkley Corp., Sr. Unsec. Notes	Baa2	6.15%	08/15/19		460		417,383
XL Capital Ltd. (Cayman Islands), Sr. Unsec. Notes	Baa2	5.25%	09/15/14		85		47,204
							7,281,931
Lodging — 0.1%
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Notes	Baa3	6.25%	02/15/13		1,645		1,135,050
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Notes	Baa3	6.75%	05/15/18		2,800		1,540,000
							2,675,050
Media & Entertainment — 0.1%
Time Warner, Inc., Gtd. Notes	Baa2	6.75%	04/15/11		640		624,879
Time Warner, Inc., Gtd. Notes	Baa2	7.25%	10/15/17		790		725,074
Time Warner, Inc., Sr. Unsec. Notes	Baa2	9.15%	02/01/23		505		538,584
Viacom, Inc., Sr. Unsec. Notes	Baa3	6.75%	10/05/37		295		227,381
Viacom, Inc., Sr. Unsec. Notes	Baa3	6.875%	04/30/36		605		478,118
							2,594,036
Metals — 0.1%
Alcan, Inc. (Canada), Sr. Unsec. Notes	BBB(f)	4.50%	05/15/13		115		84,303
Alcan, Inc. (Canada), Sr. Unsec. Notes	BBB(f)	5.00%	06/01/15		600		444,283
Alcoa, Inc., Sr. Unsec. Notes	Baa1	5.90%	02/01/27		70		46,045
Rio Tinto Finance USA Ltd. (Luxembourg), Gtd. Notes	Baa1	5.875%	07/15/13		1,000		796,514
Southern Copper Corp., Sr. Unsec. Notes	Baa2	7.50%	07/27/35		125		93,525
United States Steel Corp., Sr. Unsec. Notes	Baa3	5.65%	06/01/13		580		433,817
							1,898,487
Mortgage Backed Securities — 15.5%
Federal Home Loan Mortgage Corp.		4.50%	02/01/19-07/01/20		5,488		5,630,720
Federal Home Loan Mortgage Corp.		5.00%	07/01/18-05/01/34		9,396		9,670,393
Federal Home Loan Mortgage Corp.		5.00%	TBA 30 YR		3,500		3,576,563
Federal Home Loan Mortgage Corp.(g)		5.222%	12/01/35		2,878		2,923,711
Federal Home Loan Mortgage Corp.		5.50%	12/01/33-05/01/38		12,880		13,204,485
Federal Home Loan Mortgage Corp.		5.50%	TBA 30 YR		44,000		45,031,272
Federal Home Loan Mortgage Corp.(g)		5.525%	06/01/36		4,389		4,468,678
Federal Home Loan Mortgage Corp.		6.00%	03/01/32-12/01/33		3,020		3,128,361
Federal Home Loan Mortgage Corp.		6.50%	12/01/14		290		300,848
Federal Home Loan Mortgage Corp.		7.00%	02/01/31-11/01/33		3,495		3,672,601
Federal National Mortgage Assn.		4.00%	06/01/19		1,706		1,733,820
Federal National Mortgage Assn.(g)		4.142%	07/01/33		823		827,737
Federal National Mortgage Assn.		4.50%	11/01/18-01/01/35		11,916		12,196,999
Federal National Mortgage Assn.		4.50%	TBA 15 YR		3,500		3,576,563
Federal National Mortgage Assn.		5.00%	10/01/18-05/01/38		21,267		21,763,440
Federal National Mortgage Assn.		5.00%	TBA 15 YR		250		256,562
Federal National Mortgage Assn.		5.00%	TBA 30 YR		48,000		49,005,024
Federal National Mortgage Assn.		5.50%	03/01/16-08/01/38		55,276		56,790,492
Federal National Mortgage Assn.		5.50%	TBA 15 YR		7,000		7,207,816
Federal National Mortgage Assn.		5.50%	TBA 30 YR		31,750		32,543,750
Federal National Mortgage Assn.(g)		5.894%	06/01/37		11,110		11,431,480
Federal National Mortgage Assn.		6.00%	04/01/13-01/01/38		26,508		27,380,241
Federal National Mortgage Assn.		6.00%	TBA 30 YR		40,200		41,380,874
Federal National Mortgage Assn.		6.50%	07/01/17-09/01/37		12,000		12,486,512
Federal National Mortgage Assn.		7.00%	08/01/11-06/01/32		904		954,980
Federal National Mortgage Assn.		7.50%	06/01/12-06/01/32		650		682,423
Government National Mortgage Assn.		5.50%	11/15/32-02/15/36		12,140		12,541,778
Government National Mortgage Assn.		6.00%	09/15/33-08/15/37		7,019		7,256,412
Government National Mortgage Assn.		6.00%	TBA 30 YR		8,000		8,252,496

SEE NOTES TO FINANCIAL STATEMENTS.

A51

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Mortgage Backed Securities (continued)
Government National Mortgage Assn.		6.50%	02/15/24-07/15/35	$	5,058	$	5,303,530
Government National Mortgage Assn.		8.00%	01/15/24-04/15/25		172		183,000
							405,363,561
Non-Captive Finance — 0.5%
CIT Group Funding Co. (Canada), Gtd. Notes	Baa1	5.20%	06/01/15		680		477,396
General Electric Capital Corp., Sr. Unsec. Notes(b)	Aaa	5.625%	05/01/18		500		503,625
General Electric Capital Corp., Sr. Unsec. Notes, M.T.N.(b)	Aaa	5.875%	01/14/38		720		704,779
General Electric Capital Corp., Sr. Unsec. Notes, M.T.N.	Aaa	5.55%	05/04/20		1,190		1,137,794
General Electric Capital Corp., Sr. Unsec. Notes, M.T.N.	Aaa	4.375%	11/21/11		2,525		2,466,271
General Electric Capital Corp., Sr. Unsec. Notes, Ser. A, M.T.N	Aaa	6.125%	02/22/11		950		983,248
Household Finance Corp., Sr. Unsec. Notes	Aa3	4.75%	05/15/09		370		369,862
HSBC Finance Corp., Sr. Unsec. Notes	Aa3	5.70%	06/01/11		440		429,082
International Lease Finance Corp., Sr. Unsec. Notes	Baa1	3.50%	04/01/09		580		550,713
International Lease Finance Corp., Sr. Unsec. Notes(b)	Baa1	6.375%	03/25/13		1,850		1,256,698
SLM Corp., Sr. Unsec. Notes, M.T.N.	Baa2	8.45%	06/15/18		4,840		3,826,605
							12,706,073
Non-Corporate
Republic of Italy (Italy), Sr. Unsec. Notes, M.T.N.	A+(f)	5.375%	06/15/33		800		898,384
Paper
Plum Creek Timberlands LP, Gtd. Notes	Baa3	5.875%	11/15/15		535		436,966
Pipelines & Other — 0.3%
Atmos Energy Corp., Sr. Unsec. Notes	Baa3	4.00%	10/15/09		1,680		1,645,367
Duke Energy Field Services LLC, Sr. Unsec. Notes	Baa2	7.875%	08/16/10		1,760		1,730,286
Enterprise Products Operating LP, Gtd. Notes	Baa3	4.625%	10/15/09		740		716,720
Enterprise Products Operating LP, Gtd. Notes, Ser. B	Baa3	6.875%	03/01/33		140		107,318
Oneok Partners LP, Gtd. Notes	Baa2	6.65%	10/01/36		420		325,427
Sempra Energy, Sr. Unsec. Notes	Baa1	6.00%	02/01/13		90		86,405
Spectra Energy Capital LLC, Gtd. Notes	Baa1	6.20%	04/15/18		3,190		2,768,122
Spectra Energy Capital LLC, Sr. Unsec. Notes	Baa1	6.25%	02/15/13		235		223,601
TransCanada Pipelines Ltd. (Canada), Sr. Unsec. Notes	A3	7.25%	08/15/38		450		447,940
							8,051,186
Railroads — 0.2%
Burlington Northern Santa Fe Corp., Sr. Unsec. Notes	Baa1	6.70%	08/01/28		670		655,683
CSX Corp., Sr. Unsec. Notes	Baa3	6.15%	05/01/37		715		572,151
Norfolk Southern Corp., Sr. Unsec. Notes	Baa1	5.59%	05/17/25		525		470,561
Norfolk Southern Corp., Sr. Unsec. Notes	Baa1	7.80%	05/15/27		18		19,630
Union Pacific Corp., Sr. Unsec. Notes	Baa2	3.625%	06/01/10		1,375		1,363,000
Union Pacific Corp., Sr. Unsec. Notes	Baa2	6.65%	01/15/11		750		747,383
							3,828,408
Real Estate Investment Trusts — 0.2%
Brandywine Operating Partners LP, Gtd. Notes	Baa3	5.75%	04/01/12		1,295		970,899
Mack-Cali Realty LP, Sr. Unsec. Notes	Baa2	7.25%	03/15/09		1,270		1,254,711
Post Apartment Homes LP, Sr. Unsec. Notes	Baa3	5.45%	06/01/12		435		354,458
Post Apartment Homes LP, Sr. Unsec. Notes	Baa3	6.30%	06/01/13		660		531,536
Simon Property Group LP, Sr. Unsec. Notes	A3	5.75%	05/01/12		1,500		1,199,087
Simon Property Group LP, Sr. Unsec. Notes(b)	A3	6.125%	05/30/18		2,800		1,891,965
							6,202,656
Retailers — 0.4%
CVS Caremark Corp., Sr. Unsec. Notes	Baa2	5.75%	06/01/17		1,640		1,544,009
CVS Caremark Corp., Sr. Unsec. Notes	Baa2	5.75%	08/15/11		1,000		1,003,458
Federated Retail Holdings, Inc., Gtd. Notes	Baa3	5.35%	03/15/12		850		631,357
Federated Retail Holdings, Inc., Gtd. Notes	Baa3	5.90%	12/01/16		5		3,036

SEE NOTES TO FINANCIAL STATEMENTS.

A52

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Retailers (continued)
Home Depot, Inc., (The), Sr. Unsec. Notes	Baa1	5.875%	12/16/36	$	325	$	254,833
May Department Stores Co. (The), Notes	Baa3	6.65%	07/15/24		135		74,103
Nordstrom, Inc., Sr. Unsec. Notes(b)	Baa1	6.25%	01/15/18		4,500		3,160,733
Target Corp., Sr. Unsec. Notes	A2	7.00%	01/15/38		1,525		1,413,362
Wal-Mart Stores, Inc., (The) Sr. Unsec. Notes	Aa2	5.25%	09/01/35		245		243,937
Wal-Mart Stores, Inc., (The) Sr. Unsec. Notes	Aa2	6.20%	04/15/38		1,045		1,195,955
							9,524,783
Structured Note — 0.1%
CDX North America High Yield, Sec. Notes, Ser. 10-T, 144A	B3	8.875%	06/29/13		2,300		2,070,000
Technology — 0.3%
Computer Sciences Corp., Sr. Unsec. Notes, 144A	Baa1	6.50%	03/15/18		1,800		1,550,565
Dell, Inc., Sr. Unsec. Notes	A2	4.70%	04/15/13		1,625		1,528,725
Electronic Data Systems Corp., Sr. Unsec. Notes	A2	7.45%	10/15/29		120		129,998
Fiserv, Inc., Gtd. Notes	Baa2	6.125%	11/20/12		1,000		939,535
Intuit, Inc., Sr. Unsec. Notes.	Baa2	5.40%	03/15/12		600		545,268
Jabil Circuit, Inc., Sr. Unsec. Notes	Ba1	5.875%	07/15/10		1,875		1,715,626
Motorola, Inc., Sr. Unsec. Notes	Baa2	8.00%	11/01/11		49		40,889
Oracle Corp., Sr. Unsec. Notes	A2	6.50%	04/15/38		600		660,575
							7,111,181
Telecommunications — 1.1%
America Movil SAB de CV (Mexico), Gtd. Notes	A3	6.375%	03/01/35		580		491,846
AT&T Corp., Gtd. Notes(e)	A2	8.00%	11/15/31		1,530		1,921,887
AT&T, Inc., Sr. Unsec. Notes(b)	A2	4.125%	09/15/09		1,070		1,074,384
AT&T, Inc., Sr. Unsec. Notes	A2	5.30%	11/15/10		1,260		1,280,761
AT&T Wireless Services, Inc., Sr. Unsec. Notes	A2	8.125%	05/01/12		640		686,316
AT&T Wireless Services, Inc., Sr. Unsec. Notes	A2	8.75%	03/01/31		1,339		1,673,865
BellSouth Corp., Sr. Unsec. Notes	A2	4.20%	09/15/09		1,175		1,179,610
British Telecom PLC (United Kingdom), Sr. Unsec. Notes	Baa1	9.125%	12/15/30		1,475		1,567,839
Cingular Wireless LLC, Sr. Unsec. Notes	A2	7.125%	12/15/31		505		530,735
Deutsche Telekom International Finance BV (Netherlands), Gtd. Notes	Baa1	8.75%	06/15/30		295		363,777
Embarq Corp., Sr. Unsec. Notes	Baa3	7.082%	06/01/16		350		269,500
Embarq Corp., Sr. Unsec. Notes	Baa3	7.995%	06/01/36		1,600		1,080,000
France Telecom SA (France), Sr. Unsec. Notes	A3	8.50%	03/01/31		375		470,810
Koninklijke (Royal) KPN NV (Netherlands), Sr. Unsec. Notes	Baa2	8.00%	10/01/10		530		534,878
PCCW-HKT Capital Ltd., Gtd. Notes, 144A	Baa2	8.00%	11/15/11		2,370		2,315,395
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.00%	08/03/09		2,000		1,960,000
Qwest Corp., Sr. Unsec. Notes	Ba1	8.875%	03/15/12		2,000		1,850,000
Rogers Communications, Inc. (Canada), Gtd. Notes	Baa3	6.80%	08/15/18		1,220		1,232,726
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	5.25%	11/15/13		320		244,000
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	6.999%	06/04/18		1,000		811,250
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	7.045%	06/20/36		210		229,222
TELUS Corp. (Canada), Sr. Unsec. Notes	Baa1	8.00%	06/01/11		1,255		1,248,208
U.S. Cellular Corp., Sr. Unsec. Notes	Baa2	6.70%	12/15/33		275		198,192
Verizon Communications, Inc., Sr. Unsec. Notes(b)	A3	6.10%	04/15/18		3,400		3,387,728
Vodafone Group PLC (United Kingdom), Sr. Unsec. Notes	Baa1	7.75%	02/15/10		800		817,612
							27,420,541
Tobacco — 0.1%
Altria Group, Inc., Gtd. Notes	Baa1	9.70%	11/10/18		1,440		1,556,395
Philip Morris International, Inc., Sr. Unsec. Notes	A2	4.875%	05/16/13		860		862,461
Reynolds American, Inc., Sr. Sec. Notes	Baa3	6.75%	06/15/17		950		754,097
Reynolds American, Inc., Sr. Sec. Notes	Baa3	7.25%	06/15/37		390		262,614
							3,435,567

SEE NOTES TO FINANCIAL STATEMENTS.

A53

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Government Agency Obligations — 2.6%
Federal Farm Credit Bank	3.875%	10/07/13	$	3,070	$	3,262,962
Federal Farm Credit Bank	4.75%	05/07/10		415		436,695
Federal Farm Credit Bank	4.875%	01/17/17		855		963,543
Federal Home Loan Bank	4.50%	05/13/11		160		171,861
Federal Home Loan Bank	4.75%	04/24/09		4,470		4,531,646
Federal Home Loan Bank	5.00%	11/17/17		1,225		1,404,461
Federal Home Loan Bank	5.625%	06/11/21		2,390		2,753,889
Federal Home Loan Bank	5.75%	05/15/12		7,835		8,785,754
Federal Home Loan Mortgage Corp.	4.125%	09/27/13		3,635		3,916,811
Federal Home Loan Mortgage Corp.(b)	4.875%	06/13/18		1,420		1,631,992
Federal Home Loan Mortgage Corp.	5.25%	07/18/11		4,300		4,715,724
Federal Home Loan Mortgage Corp.	5.25%	04/18/16		3,935		4,480,804
Federal National Mortgage Assn.	2.875%	12/11/13		8,135		8,332,461
Federal National Mortgage Assn.	3.625%	08/15/11		9,240		9,793,448
Federal National Mortgage Assn.	4.875%	05/18/12		600		653,382
Federal National Mortgage Assn.	6.125%	03/15/12		1,275		1,448,105
General Electric Capital Corp., FDIC Gtd. Notes(b)	3.00%	12/09/11		7,785		8,048,522
Tennessee Valley Authority	4.50%	04/01/18		1,445		1,594,123
						66,926,183
U.S. Government Treasury Obligations — 4.8%
United States Treasury Bonds(b)	4.375%	02/15/38		3,405		4,560,572
United States Treasury Bonds	4.50%	05/15/38		1,825		2,490,840
United States Treasury Bonds	5.50%	08/15/28		540		729,844
United States Treasury Bonds	6.00%	02/15/26		385		537,316
United States Treasury Bonds	6.125%	08/15/29		325		477,039
United States Treasury Bonds(b)	6.25%	08/15/23		10,495		14,314,193
United States Treasury Bonds(b)	7.50%	11/15/16		4,395		6,000,546
United States Treasury Bonds	7.875%	02/15/21		2,290		3,403,513
United States Treasury Bonds	8.125%	08/15/21		3,665		5,574,238
United States Treasury Bonds	8.75%	08/15/20		2,830		4,417,896
United States Treasury Bonds(b)	8.875%	08/15/17		5,505		8,195,139
United States Treasury Inflation Index Bonds	2.375%	01/15/25		1,718		1,688,715
United States Treasury Inflation Index Bonds	3.625%	04/15/28		1,085		1,292,546
United States Treasury Inflation Index Bonds	3.375%	01/15/12-04/15/32		787		854,473
United States Treasury Inflation Index Note	0.625%	04/15/13		564		538,982
United States Treasury Inflation Index Note	0.875%	04/15/10		1,990		1,870,113
United States Treasury Inflation Index Note	1.375%	07/15/18		1,909		1,785,225
United States Treasury Inflation Index Note	1.625%	01/15/15-01/15/18		2,382		2,228,050
United States Treasury Inflation Index Note	1.75%	01/15/28		812		750,012
United States Treasury Inflation Index Note(b)	1.875%	07/15/13-07/15/15		4,474		4,215,304
United States Treasury Inflation Index Note(b)	2.00%	04/15/12-01/15/26		11,833		11,238,189
United States Treasury Inflation Index Note	2.375%	04/15/11-01/15/27		2,890		2,862,237
United States Treasury Inflation Index Note	2.50%	07/15/16		1,116		1,106,856
United States Treasury Inflation Index Note	2.625%	07/15/17		878		899,798
United States Treasury Inflation Index Note	3.00%	07/15/12		1,711		1,676,788
United States Treasury Inflation Index Note	3.50%	01/15/11		635		623,073
United States Treasury Inflation Index Note	3.875%	04/15/29		1,114		1,375,352
United States Treasury Inflation Index Note	4.25%	01/15/10		676		663,932
United States Treasury Notes	1.50%	12/31/13		17,085		17,046,284
United States Treasury Notes	3.75%	11/15/18		312		352,627
United States Treasury Strips(b)(i)	3.01%	02/15/19		11,340		8,399,912
United States Treasury Strips(b)(i)	4.21%	11/15/21		1,545		1,001,681
United States Treasury Strips(i)	4.25%	08/15/29		4,545		2,405,637
United States Treasury Strips, I/O(i)	2.99%	11/15/18		1,230		917,166

SEE NOTES TO FINANCIAL STATEMENTS.

A54

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM BONDS (continued)	Moody’s Rating* (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Government Treasury Obligations (continued)
United States Treasury Strips, I/O(b)(i)		3.81%	02/15/20	$	8,090	$	5,656,633
United States Treasury Strips, I/O(b)(i)		3.94%	05/15/20		5,865		4,033,138
							126,183,859
TOTAL LONG-TERM BONDS (cost $991,754,732)							952,390,727
BANK LOANS — 0.6%
Automotive
Oshkosh Truck Corp., Bank Loan(h)	Ba3	3.4248%	12/06/13		1,761		1,019,779
Cable
Insight Midwest Holdings LLC, Bank Loan(h)	B1	3.66%	10/06/13		1,216		978,545
Electric — 0.1%
NRG Energy, Bank Loan(h)	Ba1	1.359%	02/01/13		439		379,414
NRG Energy, Bank Loan(h)	Ba1	2.675%	02/01/13		891		769,995
Texas Competitive Electric Holdings Co. LLC, Bank Loan(h)	Ba3	5.5822%	10/10/14		988		682,609
							1,832,018
Foods — 0.1%
Aramark Corp., Bank Loan(h)	Ba3	3.3338%	01/26/14		1,658		1,359,741
Aramark Corp., Bank Loan(h)	Ba3	5.787%	01/26/14		105		86,384
							1,446,125
Healthcare & Pharmaceutical — 0.1%
Community Health Systems, Bank Loan(h)	Ba3	3.4037%	07/25/14		81		62,955
Community Health Systems, Bank Loan(h)	Ba3	4.445%	07/25/14		1,588		1,230,959
DaVita, Inc., Bank Loan(h)	Ba1	3.295%	10/05/12		1,200		1,043,143
HCA, Inc. Bank Loan(h)	Ba3	3.7088%	11/17/13		1,960		1,532,476
Health Management Association, Bank Loan(h)	B1	3.209%	02/28/14		1,135		694,061
							4,563,594
Media & Entertainment
Idearc, Inc., Bank Loan(h)	B2	1.97%	11/17/13		516		167,814
Idearc, Inc., Bank Loan(h)	B2	3.5745%	11/17/14		955		291,264
							459,078
Paper — 0.1%
Domtar Corp., Bank Loan(h)	Baa3	3.2513%	03/05/14		952		636,509
Georgia Pacific, Bank Loan(h)	Baa3	4.1079%	12/20/12		886		719,186
							1,355,695
Pipelines & Other
Enterprise GP Holdings LP, Bank Loan(h)	Ba2	5.3568%	11/08/14		990		801,150
Technology — 0.2%
First Data Corp., Bank Loan(h)	Ba3	3.2113%	09/24/14		1,481		947,471
First Data Corp., Bank Loan(h)	Ba3	3.2113%	09/24/14		1,185		757,977
Flextronics International Ltd. (Singapore), Bank Loan(h)	Ba1	6.1554%	10/01/14		997		624,912
Flextronics International Ltd. (Singapore), Bank Loan(h)	Ba1	7.0688%	10/01/14		287		179,572
Metavante Corp., Bank Loan(h)	Ba2	4.9425%	11/01/14		993		734,450
Sensata Technologies, Bank Loan(h)	B1	5.2575%	04/27/13		1,379		689,394
							3,933,776
TOTAL BANK LOANS (cost $23,010,473)							16,389,760
TOTAL LONG-TERM INVESTMENTS (cost $2,760,626,149)							2,456,388,147

SEE NOTES TO FINANCIAL STATEMENTS.

A55

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

SHORT-TERM INVESTMENTS — 23.5%	Interest Rate	Maturity Date	Shares		Value (Note 2)
AFFILIATED MUTUAL FUNDS — 23.3%
Dryden Core Investment Fund — Short-Term Bond Series (Note 4)(d)				17,428,295	$	128,272,254
Dryden Core Investment Fund — Taxable Money Market Series (includes $279,029,312 of cash collateral for securities on loan) (Note 4)(c)(d)				484,007,395		484,007,395
TOTAL AFFILIATED MUTUAL FUNDS (cost $656,927,612)						612,279,649
			Principal Amount (000)
U.S. Government Treasury Obligation — 0.2%
United States Treasury Bill (cost $4,597,943)(e)(j)	0.10%	06/11/09	$	4,600		4,597,300
TOTAL SHORT-TERM INVESTMENTS (cost $661,525,555)						616,876,949
TOTAL INVESTMENTS(l) — 117.2% (cost $3,422,151,704)						3,073,265,096
LIABILITIES IN EXCESS OF OTHER ASSETS(m) — (17.2%)						(451,657,713	)
NET ASSETS — 100.0%					$	2,621,607,383

The following abbreviations are used in portfolio descriptions:

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.
I/O	Interest Only
M.T.N.	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
TBA	To Be Announced

* The rating reflected is as of December 31, 2008. Ratings of certain bonds may have changed subsequent to that date.

(a) Non income-producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $270,420,154; cash collateral of $279,029,312 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

(e) Security segregated as collateral for futures contracts.

(f) Standard & Poor’s rating.

(g) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(h) Indicates a security that has been deemed illiquid.

(i) Represents zero-coupon bond. Rate shown reflects effective yield at December 31, 2008.

(j) Rate quoted represents yield-to-maturity as of purchase date.

(k) Represents issuer in default on interest payments and/or principal repayment; non income producing security.

(l) As of December 31, 2008, one security representing $0 and 0.0% of net assets was fair valued in accordance with the policies adopted by the Board of Trustees.

(m) Liabilities in excess of other assets includes net unrealized appreciation (depreciation) on financial futures contracts, interest rate and credit default swap agreements as follows:

SEE NOTES TO FINANCIAL STATEMENTS.

A56

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Open futures contracts outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2008		Unrealized Appreciation
Long Positions:
27	2-Yr. U.S. T-Notes	Mar. 2009	$	5,883,502	$	5,887,688	$	4,186
437	5-Yr. U.S. T-Notes	Mar. 2009		51,192,493		52,026,899		834,406
95	10-Yr. U.S. T-Notes	Mar. 2009		11,174,960		11,946,250		771,290
175	S&P 500 Index	Mar. 2009		39,296,275		39,379,375		83,100
94	U.S. Long Bond	Mar. 2009		11,914,031		12,976,406		1,062,375
							$	2,755,357

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Unrealized Appreciation/ (Depreciation)
Merrill Lynch Capital Services, Inc.(b)	10/10/2013	$	2,660	3.784%	3 Month LIBOR	$	193,758
Citibank NA(b)	10/20/2013		2,660	4.059%	3 Month LIBOR		227,650
Deutsche Bank AG(a)	8/15/2015		1,335	3.712%	3 Month LIBOR		(111,853	)
Merrill Lynch Capital Services, Inc.(a)	5/15/2016		2,660	4.397%	3 Month LIBOR		(357,602	)
Deutsche Bank AG(a)	5/15/2016		485	4.490%	3 Month LIBOR		(68,270	)
						$	(116,317	)

(a) Portfolio pays the fixed rate and receives the floating rate.

(b) Portfolio pays the floating rate and receives the fixed rate.

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation/ (Depreciation)
Buy protection(1):
Citibank NA	9/20/2012	$	3,200	0.32%	Altria Group, Inc., 7.00%, 11/04/13	$	114,248
Barclays Bank PLC	9/20/2012		2,900	0.595%	Fortune Brands, Inc., 5.375%, 01/15/16		133,934
Deutsche Bank AG	6/20/2013		1,850	2.00%	International Lease Finance Corp., 4.15%, 01/20/15		362,912
Goldman Sachs International	9/20/2013		1,300	1.02%	Anheuser Busch Cos., Inc., 5.625%, 10/01/10		57,931
JPMorgan Chase Bank	6/20/2014		1,150	0.65%	Bunge Ltd. Finance Corp., 5.35%, 04/15/14		256,989
Credit Suisse International	6/20/2018		3,400	0.97%	Verizon Communications, Inc., 4.90%, 09/15/15		116,780
Merrill Lynch Capital Services, Inc.	9/20/2016		735	1.73%	Tyson Foods, Inc., 6.85%, 04/01/16		106,441
Morgan Stanley Capital Services, Inc.	3/20/2018		1,500	0.70%	Avon Products, Inc., 7.15%, 11/15/09		32,507
Barclays Bank PLC	3/20/2018		1,800	1.22%	Computer Sciences Corp., 5.00%, 02/15/13		(23,475	)
Deutsche Bank AG	3/20/2018		4,500	0.99%	Nordstrom, Inc., 6.95%, 3/15/28		995,637
Merrill Lynch Capital Services, Inc.	6/20/2018		500	1.13%	Spectra Energy Capital LLC, 6.25%, 02/15/13		30,111
Morgan Stanley Capital Services, Inc.	6/20/2018		1,700	1.00%	Newell Rubbermaid, Inc., 6.35%, 7/15/28		107,406
Merrill Lynch Capital Services, Inc.	6/20/2018		1,800	3.05%	SLM Corp., 5.125%, 06/27/12		333,711
Deutsche Bank AG	6/20/2018		2,200	1.15%	Spectra Energy Capital LLC, 6.25%, 02/15/13		129,162
Morgan Stanley Capital Services, Inc.	6/20/2018		2,800	0.97%	Simon Property Group L.P., 5.25%, 12/01/16		837,707
Merrill Lynch Capital Services, Inc.	6/20/2018		2,800	1.45%	Starwood Hotels & Resorts Worldwide, Inc., 6.75%, 05/15/18		741,150
Citibank NA	3/25/2035		523	3.00%	Centex Home Equity, Ser. 2005-B, Class B, 6.215%, 03/25/35		250,826

SEE NOTES TO FINANCIAL STATEMENTS.

A57

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008 (continued)

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation/ (Depreciation)
Buy protection(1): (continued)
Citibank NA	1/25/2035	$	506	3.00%	Morgan Stanley ABS Capital I, Ser. 2005-HE2, Class B3, 6.765%, 01/25/35	316,016
Barclays Bank PLC	9/25/2035		1,000	3.35%	Accredited Mortgage Loan Trust, Ser. 2005-3, Class M9, 7.02%, 09/25/35	935,634
Merrill Lynch Capital Services, Inc.	3/25/2036		1,000	3.72%	Ameriquest Mortgage Securities, Inc., Ser. 2006-R1, Class M9, 7.82%, 03/25/36	959,705
						6,795,332

Counterparty	Termination Date	Notional Amount (000)#(3)	Fixed Rate	Reference Entity/Obligation	Fair Value(4)	Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Asset-Backed Issues — Sell protection(2):
Merrill Lynch Capital Services, Inc.	3/25/2036	1,000	9.00%	Ameriquest Mortgage Securities, Inc., Ser. 2006-R1, Class M9, 7.82%, 03/25/36	$(950,949)	$	—	$	(950,949	)
								$	5,844,383

The Portfolio entered into credit default swaps as the protection seller on asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(4) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	2,099,887,309	$	2,755,357
Level 2—Other Significant Observable Inputs-Long		973,377,787		4,216,834
Level 3—Significant Unobservable Inputs		—		1,511,232
Total	$	3,073,265,096	$	8,483,423

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A58

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other Financial Instruments
Balance as of 12/31/07	$	1,651,223
Realized gain (loss)		—	*
Change in unrealized appreciation (depreciation)		(115,323	)
Net purchases (sales)		—
Transfers in and/or out of Level 3		(24,668	)
Balance as of 12/31/08	$	1,511,232

* The realized gain earned during the period for other financial instruments was $1,516,997.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

Affiliated Mutual Funds (including 10.6% of collateral received for securities on loan	23.3	%
Mortgage Backed Securities	15.5
Oil, Gas & Consumable Fuels	6.3
Pharmaceuticals	5.0
U.S. Government Treasury Obligations	5.0
Commercial Mortgage Backed Securities	3.6
Computers & Peripherals	2.8
U.S. Government Agency Obligations	2.6
Diversified Telecommunication Services	2.3
Software	2.2
Aerospace/Defense	2.2
Household Products	2.2
Insurance	2.1
Diversified Financial Services	2.0
Food & Staples Retailing	1.8
Electrical Utilities	1.7
Commercial Banks	1.6
Communications Equipment	1.5
Healthcare Equipment & Supplies	1.5
Industrial Conglomerates	1.4
Food Products	1.4
Banking	1.4
Media	1.3
Beverages	1.3
Healthcare Providers & Services	1.3
Tobacco	1.2
Capital Markets	1.2
Energy Equipment & Services	1.0
Telecommunications	1.0
Biotechnology	1.0
Semiconductors & Semiconductor Equipment	0.9
Hotels, Restaurants & Leisure	0.9
Internet Software & Services	0.9
Road & Rail	0.9
Electric	0.9
Chemicals	0.9
Multi-Utilities	0.8
Metals & Mining	0.7
Electrical Equipment	0.6
Foods	0.6
Specialty Retail	0.6
Healthcare & Pharmaceutical	0.6

Machinery	0.5	%
Real Estate Investment Trusts	0.5
Textiles, Apparel & Luxury Goods	0.5
Asset Backed Securities	0.5
Non-Captive Finance	0.5
Technology	0.5
Collateralized Mortgage Obligations	0.4
Retailers	0.4
Household Durables	0.4
Diversified Consumer Services	0.3
Construction & Engineering	0.3
IT Services	0.3
Auto Components	0.3
Pipelines & Other	0.3
Brokerage	0.2
Foreign Government Bonds	0.2
Office Electronics	0.2
Air Freight & Logistics	0.2
Cable	0.2
Capital Goods	0.2
Energy – Other	0.2
Healthcare Insurance	0.2
Independent Power Producers & Energy Traders	0.2
Airlines	0.2
Railroads	0.2
Gas Utilities	0.1
Paper	0.1
Consumer	0.1
Consumer Finance	0.1
Electronic Equipment & Instruments	0.1
Energy – Integrated	0.1
Internet & Catalog Retail	0.1
Lodging	0.1
Media & Entertainment	0.1
Metals	0.1
Multiline Retail	0.1
Structured Note	0.1
Trading Companies & Distributors	0.1
	117.2
Liabilities in excess of other assets	(17.2	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A59

FLEXIBLE MANAGED PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $270,420,154:
Unaffiliated investments (cost $2,765,224,092)	$	2,460,985,447
Affiliated investments (cost $656,927,612)		612,279,649
Cash		162,655
Foreign currency, at value (cost $86,310)		88,192
Receivable for investments sold		33,161,731
Dividends and interest receivable		12,458,829
Unrealized appreciation on swaps		7,240,215
Foreign tax reclaim receivable		500,105
Premium for swaps purchased		308,734
Receivable for Series shares sold		1,191
Prepaid expenses		40,799
Total Assets		3,127,227,547
LIABILITIES
Collateral for securities on loan		279,029,312
Payable for investments purchased		222,062,318
Unrealized depreciation on swaps		1,512,149
Management fee payable		1,306,483
Payable for Series shares repurchased		1,252,375
Accrued expenses and other liabilities		336,399
Due to broker—variation margin		120,428
Affiliated transfer agent fee payable		700
Total Liabilities		505,620,164
NET ASSETS	$	2,621,607,383
Net assets were comprised of:
Paid-in capital	$	3,247,175,333
Retained earnings		(625,567,950	)
Net assets, December 31, 2008	$	2,621,607,383
Net asset value and redemption price per share, $2,621,607,383 / 212,370,808 outstanding shares of beneficial interest	$	12.34

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $390,530)	$	51,904,035
Unaffiliated interest income		45,297,744
Affiliated dividend income		12,527,169
Affiliated income from securities loaned, net		2,270,054
		111,999,002
EXPENSES
Management fee		19,251,536
Custodian’s fees and expenses		574,000
Shareholders’ reports		350,000
Trustees’ fees		52,000
Interest expense (Note 8)		50,287
Insurance expenses		41,000
Audit fee		36,000
Legal fees and expenses		18,000
Commitment fee on syndicated credit agreement		15,000
Transfer agent’s fee and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Miscellaneous		38,014
Total expenses		20,429,837
NET INVESTMENT INCOME		91,569,165
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: ($2,578,600))		(344,985,357	)
Short sale transactions		2,500
Futures transactions		(11,451,281	)
Swap agreement transactions		3,029,766
Foreign currency transactions		(226,409	)
		(353,630,781	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $(35,057,618))		(634,400,415	)
Futures		3,493,420
Swaps		3,354,220
Foreign currencies		(5,812	)
		(627,558,587	)
NET LOSS ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		(981,189,368	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(889,620,203	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	91,569,165		$	95,193,683
Net realized gain (loss) on investment, swap and foreign currency transactions		(353,630,781	)		258,380,114
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		(627,558,587	)		(122,643,174	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(889,620,203	)		230,930,623
DISTRIBUTIONS		(353,573,797	)		(231,155,961	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,347,523 and 986,911 shares, respectively]		19,045,784			18,632,642
Series shares issued in reinvestment of distributions [22,635,967 and 12,679,976 shares, respectively]		353,573,797			231,155,961
Series shares repurchased [14,641,462 and 13,414,705 shares, respectively]		(224,142,062	)		(256,790,391	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		148,477,519			(7,001,788	)
TOTAL DECREASE IN NET ASSETS		(1,094,716,481	)		(7,227,126	)
NET ASSETS:
Beginning of year		3,716,323,864			3,723,550,990
End of year	$	2,621,607,383		$	3,716,323,864

SEE NOTES TO FINANCIAL STATEMENTS.

A60

	GLOBAL PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 97.2%
COMMON STOCKS — 97.0%	Shares	Value (Note 2)
Australia — 2.7%
Amcor Ltd.	114,000	$	463,274
AWB Ltd.	271,500		483,942
BHP Billiton Ltd.(b)	23,267		998,154
BlueScope Steel Ltd.	218,400		536,586
Centennial Coal Co., Ltd.	220,700		517,099
CSR Ltd.	173,200		214,229
Downer EDI Ltd.	215,400		577,991
Foster’s Brewing Group Ltd.	113,500		436,530
Goodman Fielder Ltd.	291,100		270,609
Macquarie Bank Ltd.	48,553		985,400
National Australian Bank Ltd.	86,200		1,267,283
OZ Minerals Ltd.	268,220		102,852
Pacific Brands Ltd.	460,600		138,876
Qantas Airways Ltd.	520,100		958,183
QBE Insurance Group Ltd.	129,292		2,336,735
TABCORP Holdings Ltd.	90,900		444,736
Woolworths Ltd.	139,587		2,602,767
WorleyParsons Ltd.	39,429		393,342
			13,728,588
Austria
Voestalpine AG	9,500		198,610
Belgium
AGFA-Gevaert NV	62,200		160,818
Fortis	36,400		47,005
			207,823
Bermuda — 1.2%
Covidien Ltd.	53,500		1,938,840
Credicorp Ltd.	14,696		734,212
Tyco Electronics Ltd.	100,800		1,633,968
Tyco International Ltd.	75,000		1,620,000
			5,927,020
Brazil — 0.6%
BM&F Bovespa SA	201,212		519,424
LLX Logistica SA(a)	42,300		27,390
MMX Mineracao e Metalicos SA(a)	53,900		64,024
Petroleo Brasileiro SA	97,721		957,095
Petroleo Brasileiro SA, ADR	51,834		1,269,414
Weg SA	70,500		377,895
			3,215,242
Canada — 1.2%
Canadian National Railway Co.	49,885		1,833,773
Rogers Communications, Inc. (Class B Stock)(a)	64,100		1,899,894
Shoppers Drug Mart Corp.	62,800		2,444,341
			6,178,008
Chile
Centros Comerciales Sudamericanos SA 144A	1,294		27,566
China — 1.4%
China Life Insurance Co.	541,000		1,662,213
China Merchants Bank Co. Ltd.	555,500		1,039,381
China Oilfield Services Ltd.	942,000		769,073
Industrial & Commercial Bank of China (Class H Stock)(a)	6,441,000		3,419,635
			6,890,302

COMMON STOCKS (continued)	Shares	Value (Note 2)
Czech Republic — 0.2%
CEZ	26,363	$	1,071,324
Denmark — 1.1%
Danske Bank A/S	44,500		432,148
H Lundbeck A/S	72,700		1,493,468
Novo Nordisk SA	65,766		3,328,432
Vestas Wind Systems A/S	5,931		336,167
			5,590,215
Finland — 0.3%
Pohjola Bank PLC	30,700		416,076
Rautaruukki Oyj	22,300		376,936
Tietoenator Oyj	56,200		606,998
			1,400,010
France — 4.8%
Alstom SA	34,395		2,007,092
Arkema	530		9,025
AXA SA	86,528		1,905,805
BNP Paribas	19,800		832,569
Ciments Francais SA	5,200		436,008
Compagnie Generale des Etablissements Michelin (Class B Stock)	8,400		438,682
Credit Agricole SA	29,400		326,939
Eurazeo	14,235		663,865
France Telecom SA	48,300		1,340,100
Iliad SA	14,536		1,252,755
Lagardere SCA	14,000		564,359
Natixis	57,000		99,041
Peugeot SA	21,000		354,671
Rallye SA	13,400		299,889
Renault SA	9,500		244,961
Safran SA	54,600		731,188
Sanofi-Aventis SA	43,600		2,751,514
Societe Generale	5,300		265,221
Thales SA	13,700		568,072
Thomson	80,000		106,756
Total SA	27,900		1,509,020
Total SA, ADR	79,250		4,382,524
Valeo SA	17,600		259,694
Veolia Environnement	76,739		2,368,093
Vivendi	26,100		844,060
			24,561,903
Germany — 3.1%
BASF AG	51,800		1,983,003
Beiersdorf AG	32,528		1,904,927
Daimler AG	19,500		715,596
Deutsche Bank AG	11,600		452,455
Deutsche Lufthansa AG	51,700		813,876
E.ON AG	112,728		4,390,657
Hannover Rueckversicherung AG	16,300		518,183
Heidelberger Druckmaschinen AG	27,400		237,665
MTU Aero Engines Holding AG	28,100		748,005
Muenchener Rueckversicherungs-Gesellschaft AG	13,400		2,040,548
Norddeutsche Affinerie AG	10,300		404,612
Suedzucker AG	6,700		102,446
ThyssenKrupp AG	65,000		1,736,586
			16,048,559

SEE NOTES TO FINANCIAL STATEMENTS.

A61

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Greece
Alpha Bank A.E.	19,800	$	184,404
Hong Kong — 0.4%
Chaoda Modern Agriculture	825,470		530,455
Citic Pacific Ltd.	204,000		222,873
CNOOC Ltd.	1,166,000		1,109,071
			1,862,399
India — 0.3%
Infosys Technologies Ltd., ADR(b)	59,682		1,466,387
Indonesia — 0.2%
Bank Rakyat Indonesia	1,825,000		776,084
Ireland — 0.2%
Allied Irish Banks PLC	42,100		101,300
Bank of Ireland	83,300		96,570
Irish Life & Permanent PLC	51,300		112,312
Ryanair Holdings PLC, ADR(a)(b)	21,679		630,425
			940,607
Israel — 0.8%
Teva Pharmaceutical Industries Ltd., ADR(b)	96,901		4,125,076
Italy — 1.5%
Banco Popolare SC	38,200		262,844
ENI SpA	89,300		2,077,957
Finmeccanica SpA	20,900		316,376
Fondiaria-Sai SpA	19,900		354,073
Indesit Co. SpA	51,100		304,725
Intesa Sanpaolo SpA	166,300		586,581
Saipem SpA	137,141		2,253,275
Telecom Italia SpA	796,300		1,272,929
Unione di Banche Italiane SCPA	33,200		474,879
			7,903,639
Japan — 8.1%
Aeon Mall Co. Ltd.	52,300		1,011,045
Alpine Electronics, Inc.	41,600		333,935
Alps Electric Co. Ltd.	49,700		245,122
Asahi Glass Co. Ltd.	103,000		587,132
Asahi Kasei Corp.	226,100		998,018
Circle K Sunkus Co. Ltd.	65,000		1,175,970
Daiichi Sankyo Co. Ltd.	12,100		286,145
Denki Kagaku Kogyo K K	224,900		553,824
Fast Retailing Co. Ltd.	6,800		997,783
Fuji Heavy Industries Ltd.	129,000		354,508
Hitachi Information Systems Ltd.	28,300		584,766
Honda Motor Co. Ltd.	82,800		1,763,531
Jupiter Telecommunications Co. Ltd.(a)	2,805		2,919,559
Keihin Corp.	78,900		574,888
Kurabo Industries Ltd.	173,100		288,910
Kyoei Steel Ltd.	57,600		1,156,893
Kyowa Exeo Corp.	76,000		817,185
Marubeni Corp.	196,700		753,078
Matsushita Electric Industrial Co., Ltd.	74,000		909,625
Mitsubishi Corp.	34,400		487,244
Mitsui & Co. Ltd.	66,000		678,504

COMMON STOCKS (continued)	Shares	Value (Note 2)
Japan (continued)
Mitsui Chemicals, Inc.	148,000	$	549,978
Mizuho Financial Group, Inc.	119		343,315
Nifco, Inc.	33,400		338,710
Nintendo Co. Ltd.	10,300		3,936,163
Nippon Light Metal Co. Ltd.	457,000		464,136
Nippon Oil Corp.	185,600		941,060
Nippon Shokubai Co. Ltd.	161,000		1,240,668
Nippon Telegraph and Telephone Corp.	370		2,012,060
Nissan Motor Co. Ltd.	317,000		1,140,449
NTT DoCoMo, Inc.	1,052		2,070,669
Omron Corp.	47,900		643,578
Ricoh Co. Ltd.	95,600		1,225,279
Sanwa Holdings Corp.	281,000		1,080,795
Seiko Epson Corp.	3,600		57,283
Sumitomo Corp.	115,400		1,023,515
Sumitomo Electric Industries, Ltd.	72,300		559,689
Sumitomo Trust & Banking Co. Ltd. (The)	36,000		212,805
Suruga Bank Ltd.	69,000		685,488
Takeda Pharmaceutical Co. Ltd.	14,000		729,712
TDK Corp.	11,200		413,802
Terumo Corp.	32,700		1,531,846
Toyota Motor Corp.	29,500		975,221
Yamanouchi Pharmaceutical Co., Ltd.	31,000		1,268,901
Yokohama Rubber Co. Ltd. (The)	159,600		800,914
			41,723,701
Mexico — 0.3%
Wal-Mart de Mexico SAB de CV, Ser. V	620,400		1,657,566
Netherlands — 1.3%
Aegon NV	56,800		357,270
CSM	31,300		500,348
ING Groep NV	80,400		819,199
Koninklijke DSM NV	31,100		792,198
Koninklijke (Royal) Philips Electronics N.V.	38,900		747,827
OCE NV	53,300		232,641
Qiagen NV(a)	76,682		1,310,011
Royal Dutch Shell PLC, ADR	38,700		2,048,778
			6,808,272
New Zealand — 0.1%
Air New Zealand Ltd.	737,900		414,610
Fisher & Paykel Appliances Holdings Ltd.	319,700		252,913
			667,523
Norway — 0.3%
DnB NOR ASA	120,700		465,418
Norsk Hydro ASA	54,500		216,378
StatoiHydro ASA	45,100		733,621
			1,415,417
Portugal — 0.3%
Banco Espirito Santo SA	55,100		512,398
Portugal Telecom SGPS SA	109,400		923,072
			1,435,470

SEE NOTES TO FINANCIAL STATEMENTS.

A62

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Singapore — 0.5%
MobileOne Ltd.	390,330	$	402,998
Neptune Orient Lines Ltd.	313,800		246,598
Noble Group Ltd.	908,000		650,366
Singapore Airlines Ltd.	134,266		1,055,994
			2,355,956
South Africa — 0.6%
MTN Group Ltd.	149,680		1,756,656
Naspers Ltd.	60,600		1,089,751
			2,846,407
Spain — 2.1%
Banco Bilbao Vizcaya Argentaria SA	94,800		1,141,184
Banco Santander SA	465,425		4,355,127
Endesa SA	6,660		264,771
Iberdrola Renovables SA(a)	380,804		1,614,473
Inditex SA	36,907		1,607,307
Repsol YPF SA	55,000		1,154,434
Telefonica SA	34,700		764,519
			10,901,815
Sweden — 0.3%
Electrolux AB, Ser. B	83,600		705,658
Nordea Bank AB	45,600		315,419
Volvo AB (Class B Stock)	44,800		243,036
			1,264,113
Switzerland — 5.6%
ABB Ltd. ADR	191,909		2,809,172
Actelion Ltd.(a)	26,972		1,505,273
Adecco SA	13,100		440,380
Baloise Holding AG	12,100		892,423
Ciba Holding AG(a)	11,600		518,777
Clariant AG	103,700		694,678
Credit Suisse Group	72,305		1,936,104
Georg Fischer AG(a)	2,000		450,792
Nestle SA	102,159		3,992,872
Rieter Holding AG	2,200		353,455
Roche Holdings AG	23,799		3,633,520
SGS SA	1,476		1,525,438
Swiss Reinsurance	25,500		1,205,102
Swisscom AG	6,200		1,977,639
Synthes, Inc.	14,667		1,838,284
Verwalt & Privat-Bank AG	2,578		339,341
Zurich Financial Services AG	22,308		4,757,754
			28,871,004
United Arab Emirates — 0.1%
DP World Ltd.	1,342,669		523,641
United Kingdom — 9.7%
Amec PLC	93,814		664,628
Amlin PLC	62,563		321,572
AstraZeneca PLC	71,500		2,885,576
Autonomy Corp. PLC	86,630		1,184,494
Aviva PLC	118,200		662,775
BAE Systems PLC	562,905		3,049,106
Barclays PLC	158,700		350,015
Beazley Group PLC	289,000		563,017
BG Group PLC	220,972		3,040,418

COMMON STOCKS (continued)	Shares	Value (Note 2)
United Kingdom (continued)
BP PLC	472,900	$	3,576,343
Brit Insurance Holdings PLC	227,200		718,646
British Sky Broadcasting PLC	208,609		1,439,655
BT Group PLC	602,100		1,170,387
Capita Group PLC	222,151		2,357,158
Centrica PLC	88,100		336,932
Davis Service Group PLC	24,300		94,942
Drax Group PLC	52,400		422,647
DS Smith PLC	230,900		251,473
GKN PLC	302,000		421,175
GlaxoSmithKline PLC	55,000		1,015,736
HBOS PLC	178,142		176,726
IMI PLC	147,300		575,515
Legal & General Group PLC	624,000		689,017
Lloyds TSB Group PLC	121,900		220,830
Marston’s PLC	289,300		486,652
Northern Foods PLC	211,500		172,568
Old Mutual PLC	527,200		416,891
Petrofac Ltd.	87,510		435,329
Reckitt Benckiser Group PLC	86,922		3,221,786
Rolls Royce Group PLC (Class C Stock)(a)	33,146,599		47,657
Rolls Royce Group PLC(a)	555,395		2,679,036
Rotork PLC	46,943		534,202
Royal & Sun Alliance Insurance Group PLC	300,200		596,058
Royal Bank of Scotland Group PLC (The)	263,527		187,170
Royal Dutch Shell PLC (Class B Stock)	153,500		3,809,195
Spectris PLC	81,000		623,050
Standard Chartered PLC	154,007		1,937,460
Tate & Lyle PLC	113,000		651,083
Tomkins PLC	374,600		662,456
Tullow Oil PLC	198,415		1,881,367
Vedanta Resources PLC	115,387		1,014,466
Vodafone Group PLC	1,858,320		3,713,808
WPP PLC	100,200		579,853
			49,838,870
United States — 47.7%
3M Co.	29,500		1,697,430
ABB Ltd.	49,105		737,066
Air Products & Chemicals, Inc.	25,309		1,272,283
Alcoa, Inc.(b)	58,000		653,080
Altria Group, Inc.	46,800		704,808
Amazon.com, Inc.(a)	8,638		442,957
American Express Co.	42,600		790,230
Ameriprise Financial, Inc.	74,500		1,740,320
Amgen, Inc.(a)(b)	31,750		1,833,563
Apple, Inc.(a)	44,829		3,826,155
AT&T, Inc.	115,700		3,297,450
Avon Products, Inc.	44,000		1,057,320
Baker Hughes, Inc.	64,000		2,052,480
Bank of America Corp.	191,400		2,694,912
Bank of New York Mellon Corp. (The)	33,900		960,387
Boston Scientific Corp.(a)	80,600		623,844

SEE NOTES TO FINANCIAL STATEMENTS.

A63

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
United States (continued)
Cablevision Systems Corp. (Class A Stock)(a)	92,200	$	1,552,648
Cameron International Corp.(a)(b)	36,031		738,636
Chevron Corp.	66,400		4,911,608
Citigroup, Inc.	164,600		1,104,466
Coca-Cola Co. (The)(b)	34,400		1,557,288
Costco Wholesale Corp.(b)	59,306		3,113,565
CVS Caremark Corp.	153,147		4,401,445
Deere & Co.	13,455		515,596
Dell, Inc.(a)	150,300		1,539,072
Devon Energy Corp.	7,581		498,148
E.I. du Pont de Nemours & Co.	54,400		1,376,320
Entergy Corp.	27,800		2,311,014
Exxon Mobil Corp.	71,250		5,687,888
Fifth Third Bancorp	99,300		820,218
Fortune Brands, Inc.	41,900		1,729,632
Genentech, Inc.(a)	107,686		8,928,245
General Dynamics Corp.	85,774		4,939,725
General Electric Co.	221,700		3,591,540
General Motors Corp.(b)	41,700		133,440
Gilead Sciences, Inc.(a)	23,373		1,195,295
Goldman Sachs Group, Inc. (The)	47,326		3,993,841
Google, Inc. (Class A Stock)(a)	5,080		1,562,862
H&R Block, Inc.	101,200		2,299,264
Hartford Financial Services Group, Inc.	23,400		384,228
Hess Corp.	24,526		1,315,575
Home Depot, Inc. (The)	163,400		3,761,468
Honeywell International, Inc.	33,600		1,103,088
ICICI Bank Ltd.(b)	93,009		1,790,423
Illinois Tool Works, Inc.	66,700		2,337,835
Intel Corp.(b)	84,700		1,241,702
International Business Machines Corp.	24,800		2,087,168
International Paper Co.	98,400		1,161,120
Johnson & Johnson	73,935		4,423,531
JPMorgan Chase & Co.	176,973		5,579,959
Kraft Foods, Inc. (Class A Stock)	35,900		963,915
Las Vegas Sands Corp.(a)	330,476		1,959,723
Liberty Media Corp. — Entertainment, Ser. A(a)	51,800		905,464
Liberty Media Corp. — Interactive, Ser. A(a)	58,100		181,272
Lockheed Martin Corp.	80,170		6,740,694
Lowe’s Cos., Inc.	201,797		4,342,671
Marsh & McLennan Cos., Inc.	116,600		2,829,882
Mastercard, Inc. (Class A Stock)	28,650		4,094,945
McDonald’s Corp.	195,141		12,135,818
Merck & Co., Inc.	91,500		2,781,600
Merrill Lynch & Co., Inc.	52,200		607,608
Microsoft Corp.	168,100		3,267,864
Monsanto Co.	76,921		5,411,392
Morgan Stanley(b)	22,500		360,900
Murphy Oil Corp.	46,700		2,071,145
New York Times Co. (The) (Class A Stock)(b)	55,400		406,082
Newell Rubbermaid, Inc.	126,700		1,239,126

COMMON STOCKS (continued)	Shares	Value (Note 2)
United States (continued)
Nike, Inc.(b)	58,392	$	2,977,992
NiSource, Inc.	66,900		733,893
Norfolk Southern Corp.(b)	64,458		3,032,749
Oracle Corp.(a)	30,494		540,659
Pfizer, Inc.(b)	131,200		2,323,552
Philip Morris International, Inc.	17,500		761,425
Pinnacle West Capital Corp.	44,300		1,423,359
Praxair, Inc.	91,780		5,448,061
QUALCOMM, Inc.	83,887		3,005,671
Qwest Communications International, Inc.(a)(b)	152,500		555,100
Raytheon Co.	28,750		1,467,400
Schering-Plough Corp.	148,006		2,520,542
Schlumberger Ltd.	43,034		1,821,629
Southwest Airlines Co.	212,500		1,831,750
Spectra Energy Corp.	73,400		1,155,316
Sprint Nextel Corp.(b)	342,300		626,409
St. Joe Co. (The)	44,600		1,084,672
State Street Corp.	45,700		1,797,381
Sunoco, Inc.(b)	32,250		1,401,585
Target Corp.(b)	51,232		1,769,041
Time Warner Cable, Inc.(a)	30,400		652,080
Time Warner, Inc.(b)	300,400		3,022,024
Transocean Ltd.(a)	62,621		2,958,842
U.S. Bancorp	207,300		5,184,573
Union Pacific Corp.(b)	144,278		6,896,487
Verizon Communications, Inc.	39,800		1,349,220
Viacom, Inc. (Class B Stock)(a)	23,300		444,098
Visa, Inc. (Class A Stock)(b)	82,201		4,311,443
Wal-Mart Stores, Inc.	87,162		4,886,302
Walt Disney Co. (The)	24,149		547,941
Waste Management, Inc.	53,800		1,782,932
Wells Fargo & Co.	226,617		6,680,669
Western Union Co.	80,000		1,147,200
Weyerhaeuser Co.	19,000		581,590
Wyeth	67,700		2,539,427
Wynn Resorts Ltd.(a)(b)	66,547		2,812,276
Yum! Brands, Inc.(b)	132,140		4,162,410
			244,609,939
TOTAL COMMON STOCKS (cost $645,139,791)			497,223,460
PREFERRED STOCKS — 0.2%
United States
Merrill Lynch Restricted Convertible (Private Placement) (cost $739,980; purchased 7/29/08-10/31/08)(e)	26,728		295,558
Wachovia Corp.	23,475		515,511
TOTAL PREFERRED STOCKS (cost $1,191,183)			811,069

SEE NOTES TO FINANCIAL STATEMENTS.

A64

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

RIGHTS
	Units		Value (Note 2)
Belgium
Fortis (cost $0)		37,600	$	0
TOTAL LONG-TERM INVESTMENTS (cost $646,330,974)				498,034,529
	Shares
SHORT-TERM INVESTMENTS — 10.6%
Affiliated Money Market Mutual Fund — 10.5%
Dryden Core Investment Fund — Taxable Money Market Series (cost $54,051,456; includes $41,794,833 of cash collateral received for securities on loan) (Note 4)(c)(d)		54,051,456		54,051,456
	Principal Amount (000)
U.S. Government Obligation — 0.1%
US Treasury Bills, 0.02%, 4/16/2009(f) (cost $499,972)	$	500		499,889
TOTAL SHORT-TERM INVESTMENTS (cost $54,551,428)				54,551,345
TOTAL INVESTMENTS(g) 107.8% (cost $700,882,402)				552,585,874
LIABILITIES IN EXCESS OF OTHER ASSETS(h) (7.8)%				(39,853,851	)
NET ASSETS 100.0%			$	512,732,023

The following abbreviations are used in portfolio descriptions:

ADR	American Depositary Receipt
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.

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $40,783,895; cash collateral of $41,794,833 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund — Taxable Money Market Series.

(e) Indicates a security that has been deemed illiquid.

(f) Rate quoted represents yield-to-maturity at purchase date.

(g) As of December 31, 2008, 78 securities valued at $64,946,582 and representing 12.7% of the net assets were fair valued in accordance with policies adopted by the Board of Trustees.

(h) Liabilities in excess of other assets include net unrealized depreciation on forward foreign currency contracts as follows:

Open forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount	Payable at Settlement Date		Value at December 31, 2008		Unrealized Depreciation
Japanese Yen, Expiring 3/17/09	JPY  99,598,000	$	1,112,019	$	1,100,478	$	(11,541	)
Sales Contracts	Notional Amount	Receivable at Settlement Date		Value at December 31, 2008		Unrealized Depreciation
Japanese Yen, expiring 3/17/09	JPY  48,394,000	$	522,022	$	534,715	$	(12,693	)
Japanese Yen, expiring 3/17/09	JPY  51,204,000		558,477		565,763		(7,286	)
							(19,979	)
						$	(31,520	)

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	487,139,404		—
Level 2—Other Significant Observable Inputs		65,048,060	$	(31,520	)
Level 3—Significant Unobservable Inputs		398,410		—
Total	$	552,585,874	$	(31,520	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A65

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)	$	(1,481,223	)
Net purchases (sales)		1,879,633
Transfers in and/or out of Level 3		—
Balance as of 12/31/08	$	398,410

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (including 8.1% of collateral received for securities on loan)	10.5	%
Oil, Gas & Consumable Fuels	9.0
Commercial Banks	7.2
Pharmaceuticals	7.0
Insurance	4.6
Aerospace & Defense	4.4
Hotels Restaurants & Leisure	4.2
Chemicals	4.1
Food & Staples Retailing	4.1
Diversified Telecommunication	3.1
Media	2.9
Biotechnology	2.6
Capital Markets	2.6
Energy Equipment & Services	2.4
IT Services	2.4
Diversified Financial Services	2.3
Road & Rail	2.3
Specialty Retail	2.1
Wireless Telecommunication Services	2.0
Electric Utilities	1.9
Household Durables	1.7
Industrial Conglomerates	1.7
Software	1.7
Computers & Peripherals	1.5
Metals & Mining	1.5
Food Products	1.4
Electrical Equipment	1.3
Healthcare Equipment & Supplies	1.2
Airlines	1.1
Automobiles	1.1
Machinery	0.9
Electronic Equipment & Instruments	0.8
Professional Services	0.8
Multi-Utilities	0.7
Trading Companies & Distributors	0.7
Auto Components	0.6
Communications Equipment	0.6
Personal Products	0.6
Textiles, Apparel & Luxury Goods	0.6
Beverages	0.5
Commercial Services & Supplies	0.5
Diversified Consumer Services	0.5
Independent Power Producers & Energy Traders	0.4
Real Estate Management & Development	0.4
Building Products	0.3
Internet Software & Services	0.3

Life Sciences Tools & Services	0.3
Multiline Retail	0.3
Office Electronics	0.3
Paper & Forest Products	0.3
Tobacco	0.3
Construction & Engineering	0.2
Consumer Finance	0.2
Semiconductors & Semiconductor Equipment	0.2
Construction Materials	0.1
Containers & Packaging	0.1
Internet & Catalog Retail	0.1
Marine	0.1
Transportation Infrastructure	0.1
U.S. Government Obligation	0.1
	107.8
Liabilities in excess of other assets	(7.8	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A66

GLOBAL PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $40,783,895:
Unaffiliated investments (cost $646,830,946)	$	498,534,418
Affiliated investments (cost $54,051,456)		54,051,456
Foreign currency, at value (cost $1,093,416)		1,071,199
Receivable for investments sold		2,767,830
Dividends and interest receivable		793,246
Foreign tax reclaim receivable		787,129
Receivable for Series shares sold		33,811
Due from broker—variation margin		15,792
Prepaid expenses		10,187
Total Assets		558,065,068
LIABILITIES
Collateral for securities on loan		41,794,833
Payable for investments purchased		2,155,535
Payable to custodian		493,894
Payable for Series shares repurchased		354,048
Management fee payable		315,587
Accrued expenses and other liabilities		186,839
Unrealized depreciation on forward foreign currency exchange contracts		31,520
Affiliated transfer agent fee payable		789
Total Liabilities		45,333,045
NET ASSETS	$	512,732,023
Net assets were comprised of:
Paid-in capital	$	750,248,303
Retained earnings		(237,516,280	)
Net assets, December 31, 2008	$	512,732,023
Net asset value and redemption price per share, $512,732,023 / 39,222,762 outstanding shares of beneficial interest	$	13.07

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $929,030)	$	20,232,460
Affiliated dividend income		1,053,583
Affiliated income from securities loaned, net		653,468
Interest		37,995
		21,977,506
EXPENSES
Management fee		5,774,376
Custodian’s fees and expenses		318,000
Shareholders’ reports		286,000
Audit fee		25,000
Trustees’ fees		19,000
Insurance expenses		11,000
Legal fees and expenses		8,000
Interest expense (Note 8)		5,872
Transfer agent’s fees and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Commitment fee on syndicated credit agreement		2,000
Miscellaneous		47,071
Total expenses		6,500,319
NET INVESTMENT INCOME		15,477,187
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(100,792,830	)
Futures transactions		(221,846	)
Foreign currency transactions		(981,548	)
		(101,996,224	)
Net change in unrealized appreciation (depreciation) on:
Investments		(316,117,734	)
Foreign currencies		(208,538	)
		(316,326,272	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(418,322,496	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(402,845,309	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	15,477,187		$	14,020,422
Net realized gain (loss) on investment, futures and foreign currency transactions		(101,996,224	)		63,900,215
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(316,326,272	)		17,964,927
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(402,845,309	)		95,885,564
DISTRIBUTIONS		(61,349,073	)		(10,692,295	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,400,663 and 1,809,090 shares, respectively]		27,172,912			43,514,915
Series shares issued in reinvestment of distributions [2,931,155 and 435,886 shares, respectively]		61,349,073			10,692,295
Series shares repurchased [5,123,305 and 3,630,416 shares, respectively]		(96,604,973	)		(87,249,982	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(8,082,988	)		(33,042,772	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(472,277,370	)		52,150,497
NET ASSETS:
Beginning of year		985,009,393			932,858,896
End of year	$	512,732,023		$	985,009,393

SEE NOTES TO FINANCIAL STATEMENTS.

A67

	GOVERNMENT INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 93.3%	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Asset Backed Securities — 2.4%
Citibank Credit Card Issuance Trust,
Series 2007-A8, Class A8	5.65%	09/20/19	$	1,500	$	1,224,738
Small Business Administration Participation Certificates,
Series 1996-20J, Class 1	7.20%	10/01/16		2,319		2,440,992
Series 1997-20A, Class 1	7.15%	01/01/17		2,361		2,479,221
Series 1997-20G, Class 1	6.85%	07/01/17		837		861,948
Series 1998-20I, Class 1	6.00%	09/01/18		1,894		1,950,338
						8,957,237
Collateralized Mortgage Obligations — 6.0%
Federal Home Loan Mortgage Corp.,
Series 2496, Class PM	5.50%	09/15/17		2,819		2,903,795
Series 2501, Class MC	5.50%	09/15/17		1,457		1,507,798
Series 2513, Class HC	5.00%	10/15/17		2,339		2,365,728
Series 2518, Class PV	5.50%	06/15/19		1,920		1,982,436
Federal National Mortgage Association,
Series 2002-18, Class PC	5.50%	04/25/17		5,000		5,135,163
Series 2002-57, Class ND	5.50%	09/25/17		1,648		1,702,746
Series 2002-94, Class HQ	4.50%	01/25/18		6,419		6,442,950
Merrill Lynch Mortgage Investors, Inc.,
Series 2003-E, Class A1(a)	.781%	10/25/28		124		86,951
Structured Adjustable Rate Mortgage Loan,
Series 2004-1, Class 4A-3(a)	5.365%	02/25/34		446		276,893
						22,404,460
Commercial Mortgage Backed Securities — 6.2%
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2004-T16, Class A5	4.60%	02/13/46		4,200		3,362,143
Series 2006-PW11, Class A4(a)	5.456%	03/11/39		860		733,872
Series 2006-T22, Class A4(a)	5.464%	04/12/38		2,700		2,308,903
Commercial Mortgage Load Trust,
Series 2008-LS1, Class A2(a)	6.020%	12/10/49		1,230		971,139
CW Capital Cobalt Ltd.,
Series 2007-C3, Class A3(a)	5.82%	05/15/46		1,300		852,042
GS Mortgage Securities Corp. II,
Series 2003-C1, Class A3	4.608%	01/10/40		6,800		5,991,103
Merrill Lynch Mortgage Trust,
Series 2006-C1, Class ASB(a)	5.657%	05/12/39		1,500		1,172,269
Morgan Stanley Capital I,
Series 2005-IQ9, Class AAB	4.51%	07/15/56		2,500		2,104,880
Series 2005-T19, Class AAB	4.852%	06/12/47		1,375		1,101,484
Series 2006-IQ11, Class A4(a)	5.772%	10/15/42		2,800		2,298,257
Wachovia Bank Commercial Mortgage Trust,
Series 2007-C33, Class A3(a)	5.903%	02/15/51		3,000		1,947,987
						22,844,079
Corporate Bonds — 0.3%
DEPFA ACS Bank, 144A	5.125%	03/16/37		1,520		1,100,667
Mortgage Backed Securities — 48.8%
Federal Home Loan Mortgage Corp.(a)	3.537%	05/01/34		1,395		1,390,847
Federal Home Loan Mortgage Corp.	5.00%	06/01/33-05/01/34		9,041		9,257,175
Federal Home Loan Mortgage Corp.	5.50%	05/01/37-05/01/38		4,915		5,036,248
Federal Home Loan Mortgage Corp.	5.50%	TBA 30 YR		9,000		9,210,941
Federal Home Loan Mortgage Corp.	6.00%	09/01/34		577		596,102
Federal Home Loan Mortgage Corp.	6.50%	02/01/09-09/01/32		531		552,321
Federal Home Loan Mortgage Corp.	7.00%	08/01/11-10/01/32		253		261,258
Federal National Mortgage Association(a)	3.677%	07/01/33		3,693		3,519,435
Federal National Mortgage Association(a)	3.769%	04/01/34		526		526,935
Federal National Mortgage Association(a)	4.056%	08/01/33		2,488		2,472,778

SEE NOTES TO FINANCIAL STATEMENTS.

A68

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Mortgage Backed Securities (continued)
Federal National Mortgage Association	4.50%		TBA 15 YR	$	7,000	$	7,153,124
Federal National Mortgage Association(a)	4.514%		06/01/34		1,052		1,039,323
Federal National Mortgage Association(a)	4.735%		04/01/34		1,177		1,183,353
Federal National Mortgage Association	5.00%		07/01/18-05/01/36		11,278		11,598,396
Federal National Mortgage Association	5.00%		TBA 30 YR		14,500		14,803,600
Federal National Mortgage Association	5.50%		01/01/17-05/01/37		37,559		38,561,171
Federal National Mortgage Association	5.50%		TBA 15 YR		4,500		4,633,596
Federal National Mortgage Association	5.50%		TBA 30 YR		19,500		19,987,499
Federal National Mortgage Association	6.00%		11/01/14-05/01/36		13,160		13,579,945
Federal National Mortgage Association	6.00%		TBA 30 YR		5,000		5,146,875
Federal National Mortgage Association	6.26%		03/01/11		1,128		1,175,081
Federal National Mortgage Association	6.50%		11/01/09-10/01/37		6,184		6,441,847
Federal National Mortgage Association	7.00%		02/01/12-01/01/36		1,341		1,410,057
Federal National Mortgage Association	7.50%		11/01/09-10/01/12		96		100,181
Federal National Mortgage Association	8.00%		03/01/22-02/01/26		33		35,069
Federal National Mortgage Association	9.00%		02/01/25-04/01/25		190		207,933
Government National Mortgage Association	5.00%		07/15/33-04/15/34		3,507		3,610,755
Government National Mortgage Association	5.50%		03/15/34-03/15/36		3,562		3,678,409
Government National Mortgage Association	6.00%		TBA 30 YR		10,000		10,315,619
Government National Mortgage Association	6.50%		07/15/32-08/15/32		708		744,007
Government National Mortgage Association	7.00%		03/15/23-08/15/28		1,616		1,712,894
Government National Mortgage Association	7.50%		12/15/25-02/15/26		324		343,935
Government National Mortgage Association	8.50%		09/15/24-04/15/25		457		489,247
							180,775,956
Municipal Bonds — 0.5%
Connecticut St. Hlth. & Ed. Facs. Auth. Rev., Yale Univ.	5.05%		07/01/42		1,800		1,791,342
U.S. Government Agency Obligations — 14.8%
Federal Farm Credit Bank	3.875%		10/07/13		3,855		4,097,302
Federal Farm Credit Bank	4.875%		01/17/17		980		1,104,412
Federal Farm Credit Bank	5.125%		08/25/16		2,060		2,357,242
Federal Home Loan Bank	5.00%		11/17/17		1,285		1,473,251
Federal Home Loan Bank	5.625%		06/11/21		2,015		2,321,794
Federal Home Loan Mortgage Corp.	4.875%		11/15/13		12,460		13,902,045
Federal National Mortgage Association	4.875%		05/18/12		6,805		7,410,441
Federal National Mortgage Association	5.00%		05/11/17		4,370		4,982,757
FICO Strip Principal	3.23%	(d)	05/11/18		4,000		2,971,200
General Electric Cap Corp.	3.00%		12/09/11		12,420		12,840,417
Tennessee Valley Authority	4.50%		04/01/18		805		888,075
Tennessee Valley Authority	5.50%		06/15/38		465		588,439
							54,937,375
U.S. Government Securities — 14.3%
United States Treasury Bonds(c)	4.375%		02/15/38		40		53,575
United States Treasury Bonds	4.50%		05/15/38		1,290		1,760,649
United States Treasury Bonds	4.75%		02/15/37		280		390,163
United States Treasury Bonds	5.00%		05/15/37		75		108,668
United States Treasury Bonds	6.00%		02/15/26		245		341,928
United States Treasury Bonds	6.125%		08/15/29		210		308,241
United States Treasury Bonds(c)	6.25%		08/15/23		18,400		25,095,870
United States Treasury Bonds	7.875%		02/15/21		585		869,456
United States Treasury Bonds(b)	8.75%		08/15/20		505		788,352
United States Treasury Inflation Index	1.375%		07/15/18		2,793		2,612,066
United States Treasury Inflation Index(c)	1.875%		07/15/13		1,893		1,782,427
United States Treasury Inflation Index(c)	2.00%		01/15/14		5,716		5,415,758
United States Treasury Notes	.88%		12/31/10		370		370,810
United States Treasury Notes	1.50%		12/31/13		1,920		1,915,649
United States Treasury Strips(b)	3.36%	(d)	05/15/21		6,880		4,553,975

SEE NOTES TO FINANCIAL STATEMENTS.

A69

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Government Securities (continued)
United States Treasury Strips(c)	3.94%	(d)	05/15/20	$	3,220	$	2,214,272
United States Treasury Strips(c)	4.21%	(d)	11/15/21		3,840		2,489,614
United States Treasury Strips	4.25%	(d)	08/15/29		3,320		1,757,253
							52,828,726
TOTAL LONG-TERM INVESTMENTS (cost $338,442,008)							345,639,842
				Shares
SHORT-TERM INVESTMENTS — 35.0%
AFFILIATED MUTUAL FUNDS — 35.0%
Dryden Core Investment Fund — Short-Term Bond Series (cost $52,702,668) (Note 4)(f)					5,329,243		39,223,226
Dryden Core Investment Fund — Taxable Money Market Series (cost $90,360,512; includes $35,682,480 of cash collateral received for securities on loan) (Note 4)(e)(f)					90,360,512		90,360,512
TOTAL AFFILIATED MUTUAL FUNDS (cost $143,063,180)							129,583,738
				Contracts
OUTSTANDING OPTIONS PURCHASED
Put Options
Euro, expiring 03/17/09 @ $124.50 (cost $49,981)					347,600		5
TOTAL SHORT-TERM INVESTMENTS (cost $143,113,161)							129,583,743
TOTAL INVESTMENTS — 128.3% (cost $481,555,169)							475,223,585
LIABILITIES IN EXCESS OF OTHER ASSETS(g) — (28.3)%							(104,710,132	)
NET ASSETS — 100.0%						$	370,513,453

The following abbreviations are used in portfolio descriptions:

144A	Securities were 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.
FICO	Financing Corporation
TBA	To be announced

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

(a) Indicates a variable rate security. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(b) Security segregated as collateral for futures contracts.

(c) All or portion of security is on loan. The aggregate market value of such securities is $34,323,716; cash collateral of $35,682,480 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(d) Represents zero coupon bond. Rate shown reflects the effective yield at reporting date.

(e) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(f) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund — Short-Term Bond Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A70

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(g) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on financial future contracts, forward foreign currency contracts and interest rate swap agreements as follows:

Open future contracts outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at December 31, 2008		Value at Trade Date		Unrealized Appreciation (Depreciation)
Long Positions:
7	U.S. Treasury 5 Yr. Notes	Mar. 09	$	833,383	$	835,087	$	(1,704	)
114	U.S. Treasury 10 Yr. Notes	Mar. 09		14,335,500		13,418,293		917,207
								915,503
Short Positions:
6	U.S. Treasury 2 Yr. Notes	Mar. 09		1,308,375		1,303,297		(5,078	)
105	U.S. Long Bond	Mar. 09		14,494,922		13,798,649		(696,273	)
								(701,351	)
							$	214,152

Open forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts:	Notional Amount (000)	Payable at Statement Date		Value at December 31, 2008		Unrealized Depreciation
Pound Sterling expiring 1/23/09	GBP  38,370	$	57,458	$	55,129	$	(2,329	)
Iceland Krona expiring 5/29/09	ISK  5,513,175		68,700		44,058		(24,642	)
Iceland Krona expiring 5/29/09	ISK  5,803,413		67,900		46,377		(21,523	)
						$	(48,494	)

Sales Contracts:	Notional Amount (000)	Receivable at Statement Date		Value at December 31, 2008		Unrealized Depreciation
Iceland Krona expiring 5/29/09	ISK  11,316,588	$	50,747	$	90,435	$	(39,688	)
						$	(88,182	)

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)		Fixed Rate	Floating Rate	Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(1)	8/15/15	$	2,255	3.71198%	3 month LIBOR	$	(188,936	)
Merrill Lynch Capital Services(1)	5/15/16		3,335	4.39706%	3 month LIBOR		(448,346	)
Deutsche Bank AG(1)	5/15/16		1,465	4.49000%	3 month LIBOR		(206,217	)
Royal Bank of Scotland(2)	10/21/13		7,000	3.88272%	3 month LIBOR		540,837
Royal Bank of Scotland(1)	10/24/13		7,000	3.52959%	3 month LIBOR		(435,885	)
Royal Bank of Scotland(2)	10/31/13		7,000	3.77203%	3 month LIBOR		518,565
Royal Bank of Scotland(1)	10/31/13		7,000	3.76805%	3 month LIBOR		(517,233	)
Merrill Lynch Capital Services(2)	10/10/13		3,335	3.78448%	3 month LIBOR		242,926
Citigroup(2)	10/20/13		3,335	4.05924%	3 month LIBOR		285,419
						$	(208,870	)

LIBOR London Interbank Offered Rate

(1) Portfolio pays the fixed rate and receives the floating rate.

(2) Portfolio pays the floating rate and receives the fixed rate.

GBP	British Pound
ISK	Iceland Krona

SEE NOTES TO FINANCIAL STATEMENTS.

A71

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	129,583,738	$	214,152
Level 2—Other Significant Observable Inputs		345,639,847		(297,052	)
Level 3—Significant Unobservable Inputs		—		—
Total	$	475,223,585	$	(82,900	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable input (Level 3) in determining the valuation of investments.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

Mortgage Backed Securities	48.8	%
Affiliated Money Market Mutual Funds (including 9.6% of collateral received for securities on loan)	35.0
U.S. Government Agency Obligations	14.8
U.S. Government Treasury Securities	14.3
Commercial Mortgage Backed Securities	6.2
Collateralized Mortgage Obligations	6.0
Asset Backed Securities	2.4
Municipal Bonds	0.5
Corporate Bonds	0.3
	128.3
Liabilities in excess of other assets	(28.3	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A72

GOVERNMENT INCOME PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $34,323,716:
Unaffiliated investments (cost $338,491,989)	$	345,639,847
Affiliated investments (cost $143,063,180)		129,583,738
Receivable for investments sold		46,550,320
Dividends and interest receivable		2,095,820
Unrealized appreciation on swaps		1,587,747
Due from broker—variation margin		161,800
Receivable for Series shares sold		49,876
Prepaid expenses		4,198
Total Assets		525,673,346
LIABILITIES
Payable for investments purchased		117,272,372
Collateral for securities on loan		35,682,480
Unrealized depreciation on swaps		1,796,617
Management fee payable		124,762
Accrued expenses and other liabilities		118,102
Unrealized depreciation on forward currency contracts		88,182
Payable for Series shares repurchased		67,577
Payable to custodian		6,313
Deferred trustees’ fees		2,859
Affiliated transfer agent fee payable		629
Total Liabilities		155,159,893
NET ASSETS	$	370,513,453
Net assets were comprised of:
Paid-in capital	$	375,032,293
Retained earnings		(4,518,840	)
Net assets, December 31, 2008	$	370,513,453
Net asset value and redemption price per share, $370,513,453 / 32,488,713 outstanding shares of beneficial interest	$	11.40

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated interest income	$	12,343,455
Affiliated dividend income		3,076,191
Affiliated income from securities loaned, net		310,267
		15,729,913
EXPENSES
Management fee		1,397,986
Shareholders’ reports		144,000
Interest expense (Note 8)		115,988
Custodian’s fees and expenses		102,000
Audit fee		28,000
Trustees’ fees		12,000
Legal fees and expenses		6,000
Insurance expenses		4,000
Transfer agent’s fees and expenses (including affiliated expense of $3,600) (Note 4)		4,000
Miscellaneous		9,072
Total expenses		1,823,046
NET INVESTMENT INCOME		13,906,867
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		5,203,908
Foreign currency transactions		27,197
Futures transactions		1,679,784
Short sale transactions		(609,778	)
Swap transactions		1,879,723
		8,180,834
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $(10,914,076))		(6,622,115	)
Foreign currencies		(95,038	)
Futures		328,929
Swaps		(848,867	)
		(7,237,091	)
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		943,743
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	14,850,610

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	13,906,867		$	15,840,887
Net realized gain (loss) on investments and foreign currency transactions		8,180,834			(618,671	)
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(7,237,091	)		3,580,948
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		14,850,610			18,803,164
DISTRIBUTIONS		(14,159,429	)		(15,181,670	)
SERIES SHARE TRANSACTIONS:
Series shares sold [3,779,508 and 722,847 shares, respectively]		43,082,961			8,166,048
Series shares issued in reinvestment of distributions [1,259,137 and 1,353,614 shares, respectively]		14,159,429			15,181,670
Series shares repurchased [2,453,088 and 3,624,503 shares, respectively]		(27,727,532	)		(40,920,583	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		29,514,858			(17,572,865	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		30,206,039			(13,951,371	)
NET ASSETS:
Beginning of year		340,307,414			354,258,785
End of year	$	370,513,453		$	340,307,414

SEE NOTES TO FINANCIAL STATEMENTS.

A73

	HIGH YIELD BOND PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 89.7% CORPORATE BONDS — 89.6%	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)			Value (Note 2)
Aerospace/Defense — 3.3%
BE Aerospace, Inc., Sr. Unsec’d. Notes	Ba3	8.50%	07/01/18	$	2,900		$	2,610,000
DRS Technologies, Inc., Gtd. Notes	A3	6.625%	02/01/16		4,600			4,600,000
DRS Technologies, Inc., Gtd. Notes	Baa1	6.875%	11/01/13		2,000			1,990,000
DRS Technologies, Inc., Gtd. Notes	Baa1	7.625%	02/01/18		6,775			6,775,000
Esterline Technologies Corp., Gtd. Notes	Ba2	6.625%	03/01/17		750			637,500
Esterline Technologies Corp., Gtd. Notes	B1	7.75%	06/15/13		4,500			3,915,000
L-3 Communications Corp., Gtd. Notes	Ba3	6.125%	01/15/14		1,180			1,070,850
L-3 Communications Corp., Gtd. Notes	Ba3	7.625%	06/15/12		6,800			6,647,000
L-3 Communications Corp., Gtd. Notes, Ser. B	Ba3	6.375%	10/15/15		4,875			4,558,125
Moog, Inc., Sr. Sub. Notes	Ba3	6.25%	01/15/15		2,000			1,600,000
Moog, Inc., Sr. Sub. Notes, 144A	Ba3	7.25%	06/15/18		3,500			2,800,000
TransDigm, Inc., Gtd. Notes	B3	7.75%	07/15/14		4,350			3,567,000
								40,770,475
Airlines — 0.2%
AMR Corp., Sr. Unsec’d. Notes, MTN	CCC+(g)	10.40%	03/10/11		1,000			481,250
AMR Corp., Sr. Unsec’d. Notes, MTN	CCC+(g)	10.40%	03/15/11		1,000			481,250
AMR Corp., Sr. Unsec’d. Notes, MTN	NR	10.55%	03/12/21		1,425			564,656
Continental Airlines, Inc., Pass-thru Certs., Ser. 98-1, Class B(b)	Ba2	6.748%	03/15/17		985			689,169
Ser. 99-2, Class B	Ba2	7.566%	03/15/20		448			291,393
								2,507,718
Automotive — 1.9%
Ford Motor Co., Bank Loan(f)	B2	5.00%	12/15/13		12,740			5,111,925
Ford Motor Credit Co., Sr. Unsec’d. Notes(b)	Caa1	7.25%	10/25/11		8,780			6,413,869
Ford Motor Credit Co., Sr. Unsec’d. Notes(b)	Caa1	7.875%	06/15/10		5,300			4,240,954
Ford Motor Credit Co., Sr. Unsec’d. Notes(b)	Caa1	9.875%	08/10/11		2,250			1,659,870
Lear Corp., Gtd. Notes, Ser. B	B3	8.75%	12/01/16		2,175			630,750
TRW Automotive, Inc., Bank Loan(f)	Ba1	5.211%	02/09/14		2,187			1,434,606
TRW Automotive, Inc., Gtd. Notes, 144A(b)	B2	7.25%	03/15/17		6,900			3,519,000
Visteon Corp., Sr. Unsec’d. Notes	Caa3	7.00%	03/10/14		2,595			389,250
								23,400,224
Banking — 0.4%
Halyk Savings Bank of Kazakhstan, Sr. Unsec’d. Notes (Kazakhstan), 144A	Baa3	8.125%	10/07/09		1,305			1,207,125
HSBK Europe BV, Gtd. Notes (Netherlands), 144A	Baa3	7.25%	05/03/17		3,500			1,890,000
Kazkommerts International BV, Gtd. Notes (Netherlands), 144A	Ba1	7.00%	11/03/09		1,685			1,449,100
								4,546,225
Building Materials & Construction — 0.6%
D.R. Horton, Inc., Gtd. Notes	Ba3	8.00%	02/01/09		6,350			6,283,377
Nortek, Inc., Sr. Sub. Notes	Caa1	8.50%	09/01/14		3,445			792,350
Toll Corp., Gtd. Notes	Ba2	8.25%	02/01/11		800			736,000
								7,811,727
Cable — 4.3%
AT&T Broadband LLC, Gtd. Notes	Baa2	8.375%	03/15/13		100	(i)		103
CCH I LLC, Gtd. Notes	Caa3	11.125%	01/15/14		1,515			77,644
CCH I LLC, Gtd. Notes	Caa3	13.50%	01/15/14		50			2,562
CCH I LLC, Gtd. Notes(b)	Caa3	10.00%	05/15/14		2,517			100,680
CCH I/CCH I CP, Sr. Sec’d. Notes	NR	11.00%	10/01/15		3,265			506,075
CCH I/CCH I CP, Sr. Sec’d. Notes	Caa3	11.00%	10/01/15		828			144,900
CCH II LLC / CCH II Capital Corp., Gtd. Notes, 144A	Caa2	10.25%	10/01/13		2,100			714,000
CCH II/ CCH II CP, Gtd. Notes(b)	NR	10.25%	10/01/13		1,683			605,880
Charter Communications Operating LLC, BK Ln B Refi., Bank Loan(f)	B1	5.064%	09/06/14		8,415			6,142,950
CSC Holdings, BK Ln A1, Bank Loan(f)	Ba1	2.195%	02/24/12		3,669			3,188,308
CSC Holdings, Inc., Sr. Unsec’d. Notes(b)	B1	7.625%	07/15/18		2,500			1,950,000

SEE NOTES TO FINANCIAL STATEMENTS.

A74

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Cable (continued)
CSC Holdings, Inc., Sr. Unsec’d. Notes	B1	7.875%	02/15/18	$	800	$	628,000
CSC Holdings, Inc., Sr. Unsec’d. Notes, 144A	B1	8.50%	06/15/15		7,000		6,159,999
CSC Holdings, Inc., Sr. Unsec’d. Notes, Ser. B	B1	7.625%	04/01/11		4,600		4,335,500
CSC Holdings, Inc., Sr. Unsec’d. Notes, Ser. B(b)	B1	8.125%	07/15/09		2,410		2,397,950
CSC Holdings, Inc., Sr. Unsec’d. Notes, Ser. B	B1	8.125%	08/15/09		5,450		5,422,750
Mediacom Broadband LLC, Sr. Unsec’d. Notes	B3	8.50%	10/15/15		1,975		1,286,219
Mediacom LLC, Sr. Unsec’d. Notes(b)	B3	9.50%	01/15/13		1,925		1,453,375
Shaw Communications, Inc., Sr. Unsec’d. Notes (Canada)	Ba1	7.20%	12/15/11		3,300		3,118,500
UPC Broadband Holding BV, Bank Loan(f)	Ba3	3.181%	12/31/14		7,000		4,648,000
Videotron Ltee, Gtd. Notes (Canada)	Ba2	6.375%	12/15/15		3,450		2,708,250
Videotron Ltee, Gtd. Notes (Canada)	Ba2	6.875%	01/15/14		4,020		3,557,700
Videotron Ltee, Gtd. Notes (Canada), 144A(b)	Ba2	9.125%	04/15/18		3,850		3,580,500
Virgin Media Finance PLC, Gtd. Notes (United Kingdom)(b)	B2	9.125%	08/15/16		1,275		943,500
							53,673,345
Capital Goods — 10.2%
Actuant Corp., Gtd. Notes	Ba2	6.875%	06/15/17		3,375		2,539,688
ALH Finance LLC, Gtd. Notes(b)	B3	8.50%	01/15/13		6,900		5,313,000
Allied Waste North America, Inc., Sr. Sec’d. Notes	BBB(g)	7.125%	05/15/16		550		500,500
Allied Waste North America, Inc., Sr. Sec’d. Notes	BBB(g)	7.875%	04/15/13		675		641,250
Allied Waste North America, Inc., Sr. Sec’d. Notes(b)	Baa3	6.125%	02/15/14		1,000		905,000
Allied Waste North America, Inc., Sr. Sec’d. Notes(b)	BBB(g)	7.25%	03/15/15		4,400		4,092,000
Allied Waste North America, Inc., Sr. Sec’d. Notes, Ser. B(b)	BBB(g)	5.75%	02/15/11		5,320		4,987,500
Ashtead Capital, Inc., Sr. Sec’d. Notes, 144A	B1	9.00%	08/15/16		9,545		4,915,675
Ashtead Holdings PLC, Sr. Sec’d. Notes (United Kingdom), 144A	B1	8.625%	08/01/15		5,325		2,795,625
Baldor Electric Co., Gtd. Notes(b)	B3	8.625%	02/15/17		7,535		5,613,575
Blount, Inc., Gtd. Notes	B2	8.875%	08/01/12		9,790		9,055,750
Capital Safety Group Ltd., Bank Loan(f)	B2	2.711%	07/20/15		2,728		2,100,810
Capital Safety Group Ltd., Bank Loan(f)	B2	3.211%	07/20/16		7,272		5,599,190
Columbus Mckinnon Corp., Gtd. Notes	B1	8.875%	11/01/13		7,300		6,132,000
GrafTech Finance, Inc., Gtd. Notes	Ba3	10.25%	02/15/12		937		852,670
Hertz Corp., Gtd. Notes	B1	8.875%	01/01/14		17,736		10,907,639
Hertz Corp., Gtd. Notes(b)	B2	10.50%	01/01/16		950		433,438
Interline Brands, Inc., Gtd. Notes	B3	8.125%	06/15/14		3,315		2,618,850
Johnsondiversey Holdings, Inc., Disc. Notes	Caa1	10.67%	05/15/13		7,281		5,096,700
Johnsondiversey, Inc., Gtd. Notes, Ser. B(b)	B2	9.625%	05/15/12		3,710		3,042,200
Mobile Mini, Inc., Gtd. Notes	B2	6.875%	05/01/15		3,732		2,537,760
RBS Global, Inc. and Rexnord Corp., Gtd. Notes(b)	B3	9.50%	08/01/14		8,205		6,112,725
Rental Service Corp., Gtd. Notes(b)	Caa1	9.50%	12/01/14		10,095		5,552,250
SPX Corp., Sr. Unsec’d. Notes, 144A	Ba2	7.625%	12/15/14		9,130		7,943,100
Stena AB, Sr. Unsec’d. Notes (Sweden)	Ba2	7.00%	12/01/16		250		160,000
Stena AB, Sr. Unsec’d. Notes (Sweden)	Ba2	7.50%	11/01/13		7,175		4,744,469
Terex Corp., Gtd. Notes	Ba1	7.375%	01/15/14		4,790		4,167,300
Terex Corp., Sr. Sub. Notes(b)	Ba3	8.00%	11/15/17		6,000		5,100,000
United Rentals North America, Inc., Gtd. Notes	B1	6.50%	02/15/12		7,035		5,557,650
United Rentals North America, Inc., Gtd. Notes(b)	B2	7.75%	11/15/13		2,785		1,810,250
Valmont Industries, Inc., Gtd. Notes	Ba2	6.875%	05/01/14		4,920		4,182,000
							126,010,564
Chemicals — 2.5%
Huntsman International LLC, Sec’d. Notes	Ba1	11.625%	10/15/10		15,136		13,244,000
ISP Chemco, Inc., Bank Loan(f)	Ba3	3.327%	06/04/14		5,486		3,675,671
Koppers, Inc., Sr. Sec’d. Notes(b)	Ba3	9.875%	10/15/13		8,180		7,525,600
Momentive Performance Materials, Inc., Gtd. Notes(b)	B3	9.75%	12/01/14		4,910		2,086,750
Momentive Performance Materials, Inc., Gtd. Notes(b)	Caa2	11.50%	12/01/16		1,299		383,205
Mosaic Co., Sr. Unsec’d. Notes, 144A	Baa3	7.375%	12/01/14		2,375		1,947,500

SEE NOTES TO FINANCIAL STATEMENTS.

A75

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Chemicals (continued)
Mosaic Co., Sr. Unsec’d. Notes, 144A	Baa3	7.625%	12/01/16	$	825	$	660,000
Nalco Co., Gtd. Notes	B3	8.875%	11/15/13		1,720		1,453,400
							30,976,126
Consumer — 2.1%
Levi Strauss & Co., Sr. Unsec’d. Notes(b)	B2	9.75%	01/15/15		2,500		1,850,000
Mac-Gray Corp., Gtd. Notes	B3	7.625%	08/15/15		2,950		2,714,000
Realogy Corp., Gtd. Notes	Ca	10.50%	04/15/14		15,375		2,652,188
Realogy Corp., Gtd. Notes, PIK	Ca	11.00%	04/15/14		6,006		690,699
Service Corp. International, Sr. Unsec’d. Notes(b)	B1	6.75%	04/01/15		1,475		1,165,250
Service Corp. International, Sr. Unsec’d. Notes	B1	6.75%	04/01/16		5,725		4,351,000
Service Corp. International, Sr. Unsec’d. Notes	B1	7.00%	06/15/17		5,323		3,992,250
Service Corp. International, Sr. Unsec’d. Notes(b)	B1	7.375%	10/01/14		1,425		1,211,250
Service Corp. International, Sr. Unsec’d. Notes	B1	7.875%	02/01/13		2,000		1,782,500
Stewart Enterprises, Inc., Gtd. Notes	Ba3	6.25%	02/15/13		5,025		3,894,375
Ticketmaster, Gtd. Notes, 144A	Ba3	10.75%	08/01/16		3,775		2,038,500
							26,342,012
Electric — 9.6%
AES Corp., Sr. Sec’d. Notes, 144A	Ba3	8.75%	05/15/13		5,620		5,395,200
AES Corp., Sr. Unsec’d. Notes	B1	7.75%	03/01/14		3,650		3,212,000
AES Corp., Sr. Unsec’d. Notes	B1	7.75%	10/15/15		2,050		1,722,000
AES Corp., Sr. Unsec’d. Notes	B1	8.00%	10/15/17		2,725		2,234,500
AES Eastern Energy LP, Pass-thru-Certs., Ser. 99-A	Ba1	9.00%	01/02/17		5,657		5,028,952
Ser. 99-B(f)	Ba1	9.67%	01/02/29		2,000		1,620,000
CMS Energy Corp., Sr. Unsec’d. Notes	Ba1	6.55%	07/17/17		3,350		2,696,844
Dynegy Holdings, Inc., Sr. Unsec’d. Notes	B2	7.50%	06/01/15		1,900		1,330,000
Dynegy Roseton/Danskammer, Pass-thru Certs., Ser. B	Ba3	7.67%	11/08/16		10,335		7,344,258
Energy Future Holdings Corp., Gtd. Notes, 144A, PIK	B3	11.25%	11/01/17		7,175		3,479,875
Mirant Americas Generation LLC, Sr. Unsec’d. Notes	B3	8.30%	05/01/11		4,325		4,195,250
Mirant Americas Generation LLC, Sr. Unsec’d. Notes	B3	8.50%	10/01/21		850		646,000
Mirant Corp., Sr. Notes, 144A(c)(f)	NR	7.40%	07/15/49		1,825		1,825
Mirant Mid Atlantic LLC, Pass-thru Certs., Ser. B	Ba1	9.125%	06/30/17		2,728		2,458,889
Mirant North America LLC, Gtd. Notes(b)	B1	7.375%	12/31/13		7,400		7,104,000
Nevada Power Co., Gen Ref. Mtge. Notes, Ser. A	Baa3	8.25%	06/01/11		1,675		1,709,523
NRG Energy, Inc., Gtd. Notes	B1	7.25%	02/01/14		6,550		6,124,250
NRG Energy, Inc., Gtd. Notes	B1	7.375%	02/01/16		845		785,850
Orion Power Holdings, Inc., Sr. Unsec’d. Notes	Ba3	12.00%	05/01/10		9,976		9,976,000
PSEG Energy Holdings LLC, Sr. Unsec’d. Notes	Ba3	8.50%	06/15/11		9,675		9,119,810
Reliant Energy Mid-Atlantic Power Holdings LLC, Pass-thru Certs., Ser. B(f)	Ba1	9.237%	07/02/17		4,231		3,849,963
Reliant Energy Mid-Atlantic Power Holdings LLC, Pass-thru Certs., Ser. C	Ba1	9.681%	07/02/26		250		200,000
Reliant Energy, Inc., Sr. Sec’d. Notes	Ba3	6.75%	12/15/14		1,300		1,170,000
Sithe/Independence Funding Corp., Sr. Sec’d. Notes	Ba2	9.00%	12/30/13		2,443		2,076,021
Tenaska Alabama Partners LP, Sr. Sec’d. Notes, 144A (original cost $2,944,975; purchased 5/2/08)(k)	Ba2	7.00%	06/30/21		3,108		2,437,839
Texas Competitive Electric Holdings Co. LLC, Bank Loan(f)	Ba3	5.36%	10/10/14		31,047		21,461,003
Texas Competitive Electric Holdings Co. LLC, Bank Loan(f)	Ba3	5.364%	10/10/14		1,991		1,376,243
Texas Competitive Electric Holdings Co. LLC, Bank Loan(f)	Ba3	5.582%	10/10/14		4,602		3,180,892
Texas Competitive Electric Holdings Co. LLC, Gtd. Notes, 144A(b)	B3	10.50%	11/01/15		5,500		3,905,000
Texas Competitive Electric Holdings Co. LLC, Gtd. Notes, 144A(b)	B3	10.50%	11/01/15		4,650		3,301,500
							119,143,487
Energy - Integrated — 0.1%
TNK-BP Finance SA, Gtd. Notes (Luxembourg), 144A	Baa2	7.50%	07/18/16		3,000		1,560,000

SEE NOTES TO FINANCIAL STATEMENTS.

A76

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Energy - Other — 5.4%
Cie Generale Geophysique-Veritas, Gtd. Notes (France)	Ba3	7.75%	05/15/17	$	1,750	$	1,015,000
Compagnie Generale De Geophysique Veritas, Gtd. Notes (France)	Ba3	7.50%	05/15/15		780		483,600
McMoRan Exploration Co., Gtd. Notes	Caa1	11.875%	11/15/14		8,250		5,857,500
Newfield Exploration Co., Sr. Sub. Notes	Ba3	6.625%	04/15/16		8,050		6,399,750
Newfield Exploration Co., Sr. Sub. Notes	Ba3	7.125%	05/15/18		3,725		2,942,750
OPTI Canada, Inc., Sec’d. Notes (Canada)	B2	7.875%	12/15/14		8,525		4,347,750
OPTI Canada, Inc., Sec’d. Notes (Canada)	B2	8.25%	12/15/14		3,400		1,836,000
Parker Drilling Co., Gtd. Notes	B2	9.625%	10/01/13		1,365		1,057,875
PetroHawk Energy Corp., Gtd. Notes	B3	9.125%	07/15/13		5,100		4,131,000
PetroHawk Energy Corp., Gtd. Notes, 144A	B3	7.875%	06/01/15		5,625		4,162,500
Petroplus Finance Ltd., Gtd. Notes (Bermuda), 144A(b)	B1	6.75%	05/01/14		12,600		8,001,000
Petroplus Finance Ltd., Gtd. Notes (Bermuda), 144A(b)	B1	7.00%	05/01/17		4,225		2,577,250
Pioneer Natural Resources Co., Gtd. Notes	Ba1	5.875%	07/15/16		1,950		1,352,892
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.65%	03/15/17		7,730		5,516,136
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%	05/01/18		4,865		3,402,591
Plains Exploration & Production Co., Gtd. Notes	B1	7.625%	06/01/18		2,150		1,472,750
Plains Exploration & Production Co., Gtd. Notes	B1	7.75%	06/15/15		8,545		6,451,475
SandRidge Energy, Inc., Sr. Unsec’d. Notes, 144A	B3	8.00%	06/01/18		9,400		5,217,000
							66,224,819
Foods — 1.9%
Ahold Finance USA, Inc., Gtd. Notes	Baa3	8.25%	07/15/10		1,120		1,113,928
Albertson’s LLC, Sr. Unsec’d. Notes	B1	8.70%	05/01/30		1,235		796,575
Aramark Corp., Gtd. Notes(b)	B3	8.50%	02/01/15		4,650		4,208,250
Aramark Corp., Gtd. Notes(h)	B3	6.692%	02/01/15		2,600		1,963,000
Carrols Corp., Gtd. Notes	B3	9.00%	01/15/13		500		337,500
Del Monte Corp., Gtd. Notes	B2	8.625%	12/15/12		3,100		3,007,000
Dole Food Co., Inc., Gtd. Notes	Caa2	7.25%	06/15/10		3,700		2,580,750
National Beef Packing Co., LLC, Sr. Unsec’d. Notes	Caa1	10.50%	08/01/11		4,284		2,998,800
Smithfield Foods, Inc., Sr. Unsec’d. Notes	B3	7.00%	08/01/11		2,040		1,448,400
Smithfield Foods, Inc., Sr. Unsec’d. Notes, Ser. B	B3	7.75%	05/15/13		1,650		1,060,125
Stater Brothers Holdings, Gtd. Notes	B2	7.75%	04/15/15		3,150		2,646,000
Stater Brothers Holdings, Gtd. Notes	B2	8.125%	06/15/12		1,890		1,710,450
							23,870,778
Gaming — 4.1%
CCM Merger, Inc., Notes, 144A (original cost $14,420,250; purchased 7/14/05-8/21/08)(k)	Caa2	8.00%	08/01/13		15,340		7,900,100
Downstream Development Authority of the Quapaw Tribe of Oklahoma, Sr. Sec’d. Notes, 144A	Caa1	12.00%	10/15/15		2,800		1,540,000
Fontainebleau Las Vegas Holdings LLC, Mortgage Backed, 144A (original cost $7,797,031; purchased 5/24/07-07/02/07)(b)(f)(k)	Caa3	11.00%	06/15/15		7,750		755,625
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.50%	07/01/10		3,000		1,905,000
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.625%	06/01/15		2,637		448,290
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	6.50%	06/01/16		515		79,825
Harrah’s Operating Co., Inc., Gtd. Notes, 144A	B(g)	10.00%	12/15/18		4,813		1,756,745
Harrah’s Operating Co., Inc., Gtd. Notes, 144A	Caa2	10.75%	02/01/16		18,198		5,186,430
Isle of Capri Casinos, Inc., Gtd. Notes	Caa1	7.00%	03/01/14		6,795		2,887,875
Mandalay Resort Group, Gtd. Notes	B2	9.375%	02/15/10		581		424,130
MGM Mirage, Inc., Gtd. Notes	Ba3	6.00%	10/01/09		2,740		2,616,700
MGM Mirage, Inc., Gtd. Notes	Ba3	6.875%	04/01/16		2,000		1,265,000
MGM Mirage, Inc., Gtd. Notes	Ba3	8.50%	09/15/10		700		588,000
MGM Mirage, Sr. Sec’d. Notes, 144A(b)	Ba1	13.00%	11/15/13		6,050		5,762,625
Mohegan Tribal Gaming Authority, Gtd. Notes	Ba3	6.125%	02/15/13		3,750		2,362,500
Mohegan Tribal Gaming Authority, Sr. Sub. Notes	B3	8.00%	04/01/12		4,345		2,650,450
Mohegan Tribal Gaming Authority, Sr. Sub. Notes	B3	8.375%	07/01/11		400		326,000
Park Place Entertainment Corp., Gtd. Notes	Caa3	8.125%	05/15/11		4,430		2,170,700
Pokagon Gaming Authority, Sr. Notes, 144A	B2	10.375%	06/15/14		1,800		1,548,000

SEE NOTES TO FINANCIAL STATEMENTS.

A77

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Gaming (continued)
River Rock Entertainment Authority (The), Sr. Sec’d. Notes	B2	9.75%	11/01/11	$	1,750	$	1,452,500
Seneca Gaming Corp., Sr. Unsec’d. Notes, Ser. B	Ba2	7.25%	05/01/12		5,125		4,125,625
Shingle Springs Tribal Gaming Authority, Sr. Notes, 144A(b)	B3	9.375%	06/15/15		5,523		2,761,500
Station Casinos, Inc., Sr. Sub. Notes	Ca	6.50%	02/01/14		3,650		209,875
Station Casinos, Inc., Sr. Sub. Notes(b)	Ca	6.625%	03/15/18		2,200		126,500
Station Casinos, Inc., Sr. Unsec’d. Notes(b)	Caa3	6.00%	04/01/12		2,251		450,270
							51,300,265
Healthcare & Pharmaceutical — 13.8%
Accellent, Inc., Gtd. Notes	Caa3	10.50%	12/01/13		16,858		11,547,730
Alliance Imaging, Inc., Sr. Sub. Notes, Ser. B	B3	7.25%	12/15/12		1,325		1,126,250
Biomet, Inc., Gtd. Notes(b)	B3	10.375%	10/15/17		7,275		5,747,250
Biomet, Inc., Gtd. Notes	Caa1	11.625%	10/15/17		15,815		13,521,825
Bio-Rad Laboratories, Inc., Sr. Sub. Notes	Ba3	7.50%	08/15/13		3,650		3,239,375
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba2	6.25%	11/15/15		6,850		5,754,000
Catalent Pharma Solutions, Inc., Gtd. Notes, PIK(b)	Caa1	9.50%	04/15/15		7,325		2,783,500
Columbia/HCA Healthcare Corp. Sr. Unsec’d. Notes, MTN	Caa1	8.70%	02/10/10		1,800		1,715,697
Columbia/HCA Healthcare Corp., Debs.	Caa1	7.50%	12/15/23		600		281,791
Columbia/HCA Healthcare Corp., Notes, MTN	Caa1	9.00%	12/15/14		4,365		2,797,288
Community Health Systems, Inc., Bank Loan(f)	Ba3	3.404%	07/25/14		600		464,918
Community Health Systems, Inc., Bank Loan(f)	Ba3	4.445%	07/25/14		11,726		9,090,496
Community Health Systems, Inc., Gtd. Notes(b)	B3	8.875%	07/15/15		2,720		2,502,400
Concentra, Inc., Bank Loan(f)	Caa1	6.96%	06/25/15		2,000		400,000
Elan Finance PLC, Gtd. Notes (Ireland)	B3	7.75%	11/15/11		1,780		1,050,200
Elan Finance PLC, Gtd. Notes (Ireland)	B3	8.875%	12/01/13		850		442,000
FMC Finance III SA, Gtd. Notes (Luxembourg)	Ba2	6.875%	07/15/17		1,500		1,402,500
HCA, Inc., Bank Loan(f)	Ba3	2.959%	11/17/12		16,651		13,987,823
HCA, Inc., Bank Loan(f)	Ba3	3.709%	11/17/13		9,520		7,443,789
HCA, Inc., Sr. Sec’d. Notes	B2	9.125%	11/15/14		1,775		1,646,313
HCA, Inc., Sr. Sec’d. Notes, PIK(b)	B2	9.625%	11/15/16		10,310		8,041,800
HCA, Inc., Sr. Unsec’d. Notes	Caa1	6.25%	02/15/13		2,500		1,562,500
HCA, Inc., Sr. Unsec’d. Notes	Caa1	8.75%	09/01/10		708		679,680
Omega Healthcare Investors, Inc., Gtd. Notes	Ba3	7.00%	04/01/14		4,475		3,624,750
Omega Healthcare Investors, Inc., Gtd. Notes	Ba3	7.00%	01/15/16		7,955		5,966,250
PTS Acquisition Corp., Bank Loan(f)	Ba3	3.709%	04/10/14		6,895		4,102,525
Res-Care, Inc., Gtd. Notes	B1	7.75%	10/15/13		8,900		7,253,500
Royalty Pharma Finance Trust, Bank Loan(f)	Baa3	6.569%	05/15/15		11,250		9,881,246
Select Medical Corp., Gtd. Notes(b)	B3	7.625%	02/01/15		1,925		1,020,250
Senior Housing Properties Trust, Sr. Unsec’d. Notes	Ba1	7.875%	04/15/15		3,125		2,500,000
Senior Housing Properties Trust, Sr. Unsec’d. Notes	Ba1	8.625%	01/15/12		10,841		9,323,260
Skilled Healthcare Group, Inc., Gtd. Notes	Caa1	11.00%	01/15/14		9,819		9,229,860
Skilled Healthcare, Inc., Bank Loan(f)	B1	4.441%	06/15/12		3,969		3,115,784
Sun Healthcare Group, Inc., Gtd. Notes	B3	9.125%	04/15/15		7,500		6,562,500
Surgical Care Affiliates, Inc., Sr. Sub. Notes, 144A(f)	Caa1	10.00%	07/15/17		4,300		2,236,000
Ventas Realty LP, Gtd. Notes	Ba1	9.00%	05/01/12		2,887		2,569,430
Viant Holdings, Inc., Gtd Notes, 144A(f)	Caa1	10.125%	07/15/17		18,439		6,084,870
							170,699,350
Healthcare Insurance
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		1,000		594,135
Lodging — 1.1%
Felcor Lodging LP, Gtd. Notes(b)	Ba3	8.50%	06/01/11		5,170		3,825,800
Host Marriott LP, Sr. Sec’d. Notes	Ba1	6.75%	06/01/16		475		346,750
Host Marriott LP, Sr. Sec’d. Notes	BBB-(g)	6.875%	11/01/14		925		712,250
Host Marriott LP, Sr. Sec’d. Notes	Ba1	7.125%	11/01/13		4,215		3,393,075
Host Marriott LP, Sr. Sec’d. Notes, Ser. M(b)	Ba1	7.00%	08/15/12		6,400		5,424,000
							13,701,875

SEE NOTES TO FINANCIAL STATEMENTS.

A78

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Media & Entertainment — 2.7%
AMC Entertainment, Inc., Gtd. Notes(b)	B2	11.00%	02/01/16	$	2,465	$	1,722,419
AMC Entertainment, Inc., Gtd. Notes, Ser. B	Ba3	8.625%	08/15/12		2,125		1,700,000
AMC Entertainment, Inc., Sr. Sub. Notes(b)	B2	8.00%	03/01/14		675		415,125
Cinemark, Inc., Sr. Disc. Notes(j)	B3	4.12%	03/15/14		1,855		1,500,231
Clear Channel Communications, Inc., Sr. Unsec’d. Notes	Caa1	5.50%	09/15/14		1,735		208,200
Clear Channel Communications, Inc., Sr. Unsec’d. Notes	Caa1	5.75%	01/15/13		4,725		685,125
Clear Channel Communications, Inc., Sr. Unsec’d. Notes	Caa1	6.875%	06/15/18		625		75,000
CMP Susquehanna Corp., Gtd. Notes	Ca	9.875%	05/15/14		2,550		102,000
Dex Media West LLC, Sr. Sub. Notes, Ser. B	B2	9.875%	08/15/13		10,578		2,512,275
Dex Media, Inc., Sr. Unsec’d. Notes(b)	B3	8.00%	11/15/13		2,825		522,625
DirecTV Holdings LLC, Gtd. Notes	Ba3	8.375%	03/15/13		1,125		1,119,375
DirecTV Holdings LLC/DirecTV Financing Co., Gtd. Notes	Ba3	7.625%	05/15/16		3,400		3,298,000
Echostar DBS Corp., Gtd. Notes	Ba3	7.125%	02/01/16		2,545		2,125,075
Echostar DBS Corp., Gtd. Notes	Ba3	7.75%	05/31/15		500		425,000
Echostar DBS Corp., Gtd. Notes(b)	Ba3	7.00%	10/01/13		1,075		932,563
Idearc, Inc., Bank Loan(f)	B2	1.97%	11/17/13		7,000		2,275,000
Idearc, Inc., Bank Loan(f)	B2	3.575%	11/17/14		1,214		370,274
Idearc, Inc., Gtd. Notes	Caa2	8.00%	11/15/16		5,115		383,625
LIN Television Corp., Gtd. Notes(b)	B3	6.50%	05/15/13		5,750		2,745,625
Medianews Group, Inc., Sr. Sub. Notes	Ca	6.375%	04/01/14		625		39,844
Medianews Group, Inc., Sr. Sub. Notes	Ca	6.875%	10/01/13		1,375		87,656
Morris Publishing Group LLC, Gtd. Notes	Ca	7.00%	08/01/13		1,050		94,500
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)	B2	7.75%	03/15/16		2,550		1,721,250
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)	B2	7.75%	03/15/16		2,930		1,977,750
R.H. Donnelley Corp., Sr. Disc. Notes, Ser. A-1	Caa1	6.875%	01/15/13		1,300		175,500
R.H. Donnelley Corp., Sr. Disc. Notes, Ser. A-2(b)	Caa1	6.875%	01/15/13		7,700		1,039,500
R.H. Donnelley Corp., Sr. Unsec’d. Notes	Caa1	8.875%	10/15/17		2,000		300,000
R.H. Donnelley Corp., Sr. Unsec’d. Notes, Ser. A-3	Caa1	8.875%	01/15/16		1,310		196,500
Rainbow National Services LLC, Gtd. Notes, 144A	B1	8.75%	09/01/12		2,000		1,800,000
Rainbow National Services LLC, Gtd. Notes, 144A	B2	10.375%	09/01/14		205		182,450
Universal City Florida Holding Co. I/II, Sr. Notes(b)	B3	8.375%	05/01/10		3,625		1,649,375
Univision Communications, Inc., Gtd. Notes, PIK, 144A	Caa2	9.75%	03/15/15		7,535		941,875
							33,323,737
Metals — 5.1%
Aleris International, Inc., Gtd. Notes, PIK	Caa2	9.00%	12/15/14		2,200		132,000
Century Aluminum Co., Gtd. Notes	B3	7.50%	08/15/14		2,222		1,277,650
FMG Finance Pty Ltd., Sr. Sec’d. Notes (Australia), 144A	B1	10.00%	09/01/13		1,150		678,500
FMG Finance Pty Ltd., Sr. Sec’d. Notes (Australia), 144A	B1	10.625%	09/01/16		11,675		6,771,500
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d Notes(h)	Ba2	7.084%	04/01/15		4,500		2,970,000
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes	Ba2	8.375%	04/01/17		12,010		9,848,200
Gerdau AmeriSteel Corp., Gtd. Notes (Canada)	Ba1	10.375%	07/15/11		11,870		11,988,700
Ispat Inland ULC, Gtd. Notes (Canada)	Baa2	9.75%	04/01/14		17,308		14,814,297
Metals USA, Inc., Sr, Sec’d. Notes	B3	11.125%	12/01/15		9,975		5,885,250
Novelis, Inc., Gtd. Notes (Canada)	B3	7.25%	02/15/15		2,615		1,516,700
Ryerson, Inc., Sr. Sec’d. Notes, 144A (original cost $195,000; purchased 10/3/07-10/26/07)(k)	Caa1	12.25%	11/01/15		195		120,413
Southern Copper Corp., Sr. Unsec’d. Notes	Baa2	7.50%	07/27/35		3,550		2,656,110
United States Steel Corp., Sr. Unsec’d. Notes	Baa3	7.00%	02/01/18		6,540		4,457,272
							63,116,592
Non Captive Finance — 0.7%
Lender Processing Services, Inc., Gtd. Notes	Ba2	8.125%	07/01/16		9,561		8,521,241
Packaging — 3.0%
Ball Corp., Gtd. Notes	Ba1	6.625%	03/15/18		5,205		4,658,475
Berry Plastics Holding Corp., Sec’d. Notes(h)	Caa1	5.871%	09/15/14		2,025		688,500
Berry Plastics Holding Corp., Sr. Sec’d. Notes(b)	Caa1	8.875%	09/15/14		7,550		3,284,250
Crown Americas LLC, Gtd. Notes(b)	B1	7.625%	11/15/13		8,375		8,291,250

SEE NOTES TO FINANCIAL STATEMENTS.

A79

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Packaging (continued)
Exopack Holding Corp., Gtd. Notes	B3	11.25%	02/01/14	$	6,565	$	3,840,525
Graham Packaging Co., Inc., Gtd. Notes	Caa1	8.50%	10/15/12		1,605		1,143,563
Graham Packaging Co., Inc., Gtd. Notes(b)	Caa1	9.875%	10/15/14		2,650		1,629,750
Greif Brothers Corp., Gtd. Notes	Ba2	6.75%	02/01/17		7,075		6,261,375
Owens Brockway Glass Container, Inc., Gtd. Notes	Ba3	8.25%	05/15/13		4,425		4,358,625
Silgan Holdings, Inc., Sr. Sub. Notes	B1	6.75%	11/15/13		3,250		2,795,000
							36,951,313
Paper — 2.4%
Cascades, Inc., Gtd. Notes (Canada)	Ba3	7.25%	02/15/13		5,025		2,562,750
Catalyst Paper Corp., Gtd. Notes, Ser. D (Canada)	B2	8.625%	06/15/11		417		183,480
Cellu Tissue Holdings, Inc., Sec’d. Notes(f)	B2	9.75%	03/15/10		2,500		2,000,000
Domtar Corp., Gtd. Notes (Canada)	Ba3	5.375%	12/01/13		1,200		744,000
Domtar Corp., Gtd. Notes (Canada)	Ba3	7.875%	10/15/11		6,125		5,206,250
Georgia Pacific, Bank Loan(f)	Ba2	3.903%	12/20/10		3,722		3,287,533
Georgia-Pacific, Corp., Gtd. Notes, 144A (original cost $5,475,180; purchased 12/13/06-7/18/08)(k)	Ba3	7.125%	01/15/17		5,526		4,641,840
Glatfelter, Gtd. Notes	Ba2	7.125%	05/01/16		320		278,400
Graphic Packaging International Corp., Gtd. Notes(b)	B3	8.50%	08/15/11		7,188		6,001,980
Jefferson Smurfit Corp., Sr. Unsec’d. Notes	Caa1	8.25%	10/01/12		3,270		555,900
Millar Western Forest Products Ltd., Sr. Notes (Canada)	B2	7.75%	11/15/13		375		187,500
Norampac, Inc., Gtd. Notes (Canada)	Ba3	6.75%	06/01/13		1,130		508,500
Smurfit-Stone Container Enterprises, Inc., Sr. Unsec’d. Notes	Caa1	8.375%	07/01/12		3,800		627,000
Verso Paper Holdings LLC, Gtd. Notes, Ser. B(b)	B3	11.375%	08/01/16		7,475		2,242,500
							29,027,633
Pipelines & Others — 1.9%
AmeriGas Partners LP, Sr. Unsec’d. Notes	Ba3	7.125%	05/20/16		3,600		2,880,000
Inergy LP/Inergy Finance Corp., Gtd. Notes	B1	8.25%	03/01/16		1,125		877,500
MarkWest Energy Partners LP / MarkWest Energy Finance Corp., Gtd. Notes	B2	8.75%	04/15/18		3,850		2,387,000
Pacific Energy Partners LP, Gtd. Notes	Baa3	7.125%	06/15/14		1,475		1,288,318
Sonat, Inc., Sr. Unsec’d. Notes	Ba3	7.625%	07/15/11		1,840		1,677,598
Targa Resources, Inc., Gtd. Notes	B3	8.50%	11/01/13		6,175		3,334,500
Targa Resources Partners LP, Sr. Notes, 144A	B2	8.25%	07/01/16		3,400		2,108,000
Williams Cos., Inc., Sr. Unsec’d. Notes	Baa3	7.125%	09/01/11		1,175		1,081,000
Williams Cos., Inc., Sr. Unsec’d. Notes	Baa3	8.125%	03/15/12		7,916		7,292,615
Williams Partners LP/Williams Partners Finance Corp., Sr. Unsec’d. Notes	Ba2	7.50%	06/15/11		1,125		967,500
							23,894,031
Railroads — 0.1%
Kansas City Southern Railway, Gtd. Notes	B2	7.50%	06/15/09		1,540		1,543,850
Retailers — 0.8%
GSC Holdings Corp., Gtd. Notes	Ba1	8.00%	10/01/12		1,020		948,600
Neiman-Marcus Group, Inc., Gtd. Notes, PIK	B3	9.00%	10/15/15		5,500		2,420,000
Susser Holdings LLC, Gtd. Notes	B3	10.625%	12/15/13		7,730		6,763,750
							10,132,350
Technology — 6.6%
Affiliated Computer Services, Inc., Sr. Unsec’d. Notes	Ba2	4.70%	06/01/10		18,850		17,530,501
Ampex Corp. (original cost $772,815; purchased 10/8/08)(f)(k)	NR	12.00%	09/30/09		416		163,675
Avago Technologies, Gtd. Notes (Singapore)	B1	10.125%	12/01/13		14,728		11,211,691
Avago Technologies, Gtd. Notes (Singapore)	B3	11.875%	12/01/15		3,000		2,085,000
First Data Corp., Bank Loan(f)	Ba3	3.211%	09/24/14		4,938		3,158,237
First Data Corp., Bank Loan(f)	Ba3	3.211%	09/24/14		4,938		3,158,237
First Data Corp., Gtd. Notes(b)	B3	9.875%	09/24/15		1,850		1,119,250
Flextronics International Ltd., Bank Loan (Singapore)(f)	Ba1	6.155%	10/01/14		4,602		2,884,207
Flextronics International Ltd., Bank Loan (Singapore)(f)	Ba1	7.069%	10/01/14		1,323		828,795

SEE NOTES TO FINANCIAL STATEMENTS.

A80

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Rating† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Technology (continued)
Flextronics International Ltd., Sr. Sub. Notes (Singapore)	Ba2	6.25%	11/15/14	$	1,000	$	745,000
Freescale Semiconductor, Inc., Gtd. Notes, PIK	B2	9.125%	12/15/14		16,800		3,864,000
Iron Mountain, Inc., Gtd. Notes	B2	8.00%	06/15/20		3,950		3,169,875
Iron Mountain, Inc., Gtd. Notes	B2	8.625%	04/01/13		6,600		6,204,000
Nortel Networks Ltd., Gtd. Notes, (Canada)	Caa2	10.125%	07/15/13		3,050		808,250
Open Solutions, Inc., Gtd. Notes, 144A	Caa2	9.75%	02/01/15		1,700		255,000
Seagate Technology HDD Holdings, Gtd. Notes (Cayman Islands)	Ba1	6.375%	10/01/11		4,600		3,174,000
Sensata Technologies BV, Gtd. Notes (Netherlands)	Caa1	8.00%	05/01/14		8,523		3,835,350
Sensata Technologies, Bank Loan(f)	B1	5.258%	04/27/13		4,071		2,035,318
Serena Software, Inc., Gtd. Notes	Caa1	10.375%	03/15/16		8,840		4,486,300
STATS ChipPAC Ltd., Gtd. Notes (Singapore)	Ba1	6.75%	11/15/11		4,110		3,051,675
Sungard Data Systems, Inc., Sr. Unsec’d. Notes, 144A	Caa1	10.625%	05/15/15		8,050		6,882,750
Unisys Corp., Sr. Unsec’d. Notes	B2	8.00%	10/15/12		330		92,400
Xerox Corp., Gtd. Notes	Baa2	6.875%	08/15/11		1,350		1,166,949
							81,910,460
Telecommunications — 4.8%
Alltel Communications, Inc., Bank Loan(f)	Ba3	3.939%	05/15/15		4,987		4,882,285
American Tower Corp., Sr. Unsec’d. Notes	Ba1	7.125%	10/15/12		855		842,175
Centennial Cellular Operating Co., Gtd Notes	B2	10.125%	06/15/13		8,225		8,307,250
Citizens Communications Co., Sr. Unsec’d. Notes	Ba2	9.00%	08/15/31		3,135		1,975,050
Citizens Communications Co., Sr. Unsec’d. Notes	Ba2	9.25%	05/15/11		1,475		1,401,250
Citizens Communications Co., Sr. Unsec’d. Notes(b)	Ba2	6.25%	01/15/13		1,590		1,351,500
Fairpoint Communications, Inc., Sr. Unsec’d. Notes, 144A	B3	13.125%	04/01/18		7,000		3,360,000
Hawaiian Telcom Communications, Inc., Gtd. Notes, Ser. B(c)(f)	Ca	8.765%	05/01/13		4,550		238,875
Hawaiian Telcom Communications, Inc., Gtd. Notes, Ser. B(c)(f)	C	12.50%	05/01/15		1,950		9,750
Level 3 Financing, Inc., Gtd. Notes	Caa1	12.25%	03/15/13		8,950		5,414,750
Qwest Communications International, Inc., Gtd. Notes, Ser. B	Ba3	7.50%	02/15/14		3,150		2,252,250
Qwest Corp., Sr. Unsec’d. Notes	Ba1	7.625%	06/15/15		5,115		4,194,300
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.875%	03/15/12		650		601,250
Qwest Corp., Sr. Unsec’d. Notes(b)	Ba1	7.50%	10/01/14		6,325		5,249,750
Sprint Capital Corp., Gtd. Notes	Ba2	7.625%	01/30/11		2,500		2,087,500
Sprint Capital Corp., Gtd. Notes	Ba2	8.375%	03/15/12		2,000		1,600,000
Sprint Capital Corp., Gtd. Notes	Ba2	8.75%	03/15/32		2,750		1,856,250
Time Warner Telecom Holdings, Inc., Gtd. Notes	B3	9.25%	02/15/14		6,225		5,104,500
Windstream Corp., Gtd. Notes	Ba3	8.125%	08/01/13		3,500		3,220,000
Windstream Corp., Gtd. Notes	Ba3	8.625%	08/01/16		5,950		5,265,750
							59,214,435
TOTAL CORPORATE BONDS (cost $1,538,953,588)							1,110,768,767
				Shares
COMMON STOCKS — 0.1%
Cable
Adelphia Recovery Trust(a)(f)					500,000		500
Electric
Mirant Corp.(a)					2,240		42,269
Media
Virgin Media, Inc.					8,521		42,520
Technology — 0.1%
Xerox Corp.					137,561		1,096,360
Telecommunications
Netia SA (Poland)(a)					238,168		192,914
TOTAL COMMON STOCKS (cost $2,249,158)							1,374,563

SEE NOTES TO FINANCIAL STATEMENTS.

A81

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

PREFERRED STOCKS		Shares	Value (Note 2)
Building Materials & Construction
New Millenium Homes LLC (original cost $0; purchased 7/28/05)(a)(f)(k)		3,000	$	471,000
Cable
Adelphia Communications Corp., PIK, 13.00%(a)(f)		5,000		5
PTV, Inc., Ser. A, 10.00%		13		12
				17
TOTAL PREFERRED STOCKS (cost $4,765)				471,017
WARRANTS(a)(f)	Expiration Date	Units
Cable
TVN Entertainment (original cost $1,215,008; purchased 3/30/01-3/15/04)(k)	8/21/11	9,347		5,421
Consumer
ICON Fitness Corp.	9/27/09	18,093		181
Media
Sirius XM Radio, Inc., 144A	3/15/10	5,005		5
Technology
Viasystems Group, Inc.	1/31/10	45,109		5
Telecommunications
GT Group Telecommunications, Inc. (Canada), 144A	2/1/10	3,050		3
TOTAL WARRANTS (cost $4,213,593)				5,615
TOTAL LONG-TERM INVESTMENTS (cost $1,545,421,104)				1,112,619,962
		Shares
SHORT-TERM INVESTMENTS — 18.0%
AFFILIATED MUTUAL FUNDS
Dryden Core Investment Fund — Short-Term Bond Series (Note 4)(e)		2,246,922		16,537,347
Dryden Core Investment Fund — Taxable Money Market Series (cost $205,669,464 includes $128,094,292 of cash collateral received for securities on loan) (Note 4)(d)(e)		205,669,464		205,669,464
TOTAL SHORT-TERM INVESTMENTS (cost $227,969,329)				222,206,811
TOTAL INVESTMENTS(l) — 107.7% (cost $1,773,390,433)				1,334,826,773
LIABILITIES IN EXCESS OF OTHER ASSETS(m) — (7.7)%				(94,963,170	)
NET ASSETS — 100.0%			$	1,239,863,603

The following abbreviations are used in portfolio descriptions:

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.
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
PIK	Payment-in-kind

† The rating reflected is as of December 31, 2008. Rating of certain bonds may have changed subsequent to that date.

(a) Non-income producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $125,217,703; cash collateral of $128,094,292 (included in liabilities) was received with which the portfolio purchased highly liquid short-term investments.

(c) Represents issuer in default on interest payments and/or principal repayment; non-income producing security.

(d) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

SEE NOTES TO FINANCIAL STATEMENTS.

A82

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(e) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Short-Term Bond Series and the Dryden Core Investment Fund—Taxable Money Market Series.

(f) Indicates a security that has been deemed illiquid.

(g) Standard & Poor’s rating.

(h) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(i) Amount is actual; not rounded to thousands.

(j) Represents zero coupon or step bond. Rate shown reflects the effective yield at reporting date.

(k) Indicates a restricted security; the aggregate cost of such securities is $32,820,259. The aggregate value of $16,495,913 is approximately 1.3% of net assets.

(l) As of December 31, 2008, 8 securities representing $642,612 and 0.05% of the net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(m) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on credit default swap agreements as follows:

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation/ (Depreciation)
Buy protection(1):
JPMorgan Chase Bank	6/20/2013	$	5,000	6.65%	Tenet Healthcare Corp., 7.375%, 2/01/13	$	750,009
Deutsche Bank AG	12/20/2013		3,000	2.00%	Allied Waste North America, Inc., 7.375%, 4/15/14		(63,478	)
Deutsche Bank AG	12/20/2013		5,000	3.12%	Alltel Corp., 7.875%, 07/01/32		(488,580	)
JPMorgan Chase Bank	12/20/2013		4,000	3.90%	JC Penney Co., Inc., 6.375%, 10/15/36		167,090
Merrill Lynch Capital Services	12/20/2013		5,000	2.50%	Alltel Corp., 7.875%, 7/01/32		(342,290	)
Merrill Lynch Capital Services	12/20/2013		5,000	3.40%	Windstream Corp., 8.125%, 8/01/13		(109,108	)
Merrill Lynch Capital Services	12/20/2013		5,000	4.35%	Ryland Group, Inc., 5.375%, 1/15/15		350,282
Merrill Lynch Capital Services	12/20/2013		5,000	4.60%	KB Home, 6.25%, 6/15/15		381,385
						$	645,310

Counterparty	Termination Date	Implied Credit Spread at December 31, 2008(3)	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Received			Unrealized Appreciation/ (Depreciation)
Credit default swaps on corporate issues-Sell Protection(2):
Barclays Bank PLC	3/20/2009	16.949%	$	5,000	0.00%	MGM Mirage, Inc., 5.875%, 2/27/14	$	(180,157	)	$	(166,608	)	$	(13,549	)
Barclays Bank PLC	3/20/2009	12.966%		5,000	0.00%	Texas Competitive Electric Holdings Co., 10.50%, 11/1/2015		(138,832	)		(118,680	)		(20,152	)
JPMorgan Chase Bank	6/20/2009	31.384%		3,250	5.00%	Harrah’s Operating Co., Inc., 5.625%, 6/01/15		(368,379	)		(82,084	)		(286,295	)
Merrill Lynch Capital Services	9/20/2009	180.386%		2,000	4.65%	General Motors Corp., 7.125%, 7/15/13		(1,350,470	)		—			(1,350,470	)
Morgan Stanley Capital Services, Inc.	9/20/2010	39.041%		2,500	4.20%	Lear Corp., 8.11%, 5/15/09		(1,040,099	)		—			(1,040,099	)
Barclays Bank PLC	6/20/2013	87.734%		1,615	5.00%	Station Casino’s, Inc., 6.00%, 4/01/12		(1,262,280	)		(251,229	)		(1,011,051	)
Goldman Sachs International	3/20/2016	5.983%		3,150	4.10%	NRG Energy, Inc., 7.25%, 2/01/14		(288,190	)		—			(288,190	)
							$	(4,628,407	)	$	(618,601	)		(4,009,806	)
													$	(3,364,496	)

The Portfolio entered into credit default swaps as the protection seller on corporate issues to take an active short position with respect to the likelihood of a particular issuer’s default.

SEE NOTES TO FINANCIAL STATEMENTS.

A83

	HIGH YIELD BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

(4) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	223,580,895	$	—
Level 2—Other Significant Observable Inputs		1,110,603,266		(3,364,496	)
Level 3—Significant Unobservable Inputs		642,612		—
Total	$	1,334,826,773	$	(3,364,496	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities			Other Financial Instruments
Balance as of 12/31/07	$	1,109,740		$	150,060
Change in unrealized appreciation (depreciation)		(467,128	)		(158,637	)
Transfers in and/or out of Level 3		—			8,577
Balance as of 12/31/08	$	642,612			—

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

Affiliated Mutual Funds (including 10.3% of collateral received for securities on loan)	18.0	%
Healthcare & Pharmaceutical	13.8
Capital Goods	10.2
Electric	9.6
Technology	6.7
Energy – Other	5.4
Metals	5.1
Telecommunications	4.8
Cable	4.3
Gaming	4.1
Aerospace/Defense	3.3
Packaging	3.0
Media & Entertainment	2.7
Chemicals	2.5
Paper	2.4

Consumer	2.1	%
Automotive	1.9
Foods	1.9
Pipelines & Other	1.9
Lodging	1.1
Retailers	0.8
Non Captive Finance	0.7
Building Materials & Construction	0.6
Banking	0.4
Airlines	0.2
Energy – Integrated	0.1
Railroads	0.1
	107.7
Liabilities in excess of other assets	(7.7	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A84

HIGH YIELD BOND PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $125,217,703:
Unaffiliated investments (cost $1,545,421,104)	$	1,112,619,962
Affiliated investments (cost $227,969,329)		222,206,811
Cash		5,172,519
Foreign currency, at value (cost $1,364,268)		1,113,909
Dividends and interest receivable		31,842,815
Receivable for investments sold		25,645,546
Unrealized appreciation on swaps		1,648,766
Receivable for Series shares sold		176,666
Prepaid expenses		20,018
Premium for swaps purchased		6,372
Total Assets		1,400,453,384
LIABILITIES
Collateral for securities on loan		128,094,292
Payable for investments purchased		25,999,141
Unrealized depreciation on swaps		5,013,262
Premium for swaps written		618,601
Management fee payable		552,942
Payable for Series shares repurchased		182,441
Accrued expenses and other liabilities		124,143
Deferred trustees’ fees		4,250
Affiliated transfer agent fee payable		709
Total Liabilities		160,589,781
NET ASSETS	$	1,239,863,603
Net assets were comprised of:
Paid-in capital	$	2,032,348,073
Retained earnings		(792,484,470	)
Net assets, December 31, 2008	$	1,239,863,603
Net asset value and redemption price per share, $1,239,863,603/ 343,606,619 outstanding shares of beneficial interest	$	3.61

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest	$	139,925,252
Unaffiliated dividend income		24,769
Affiliated dividend income		2,360,403
Affiliated income from securities loaned, net		1,222,904
Total income		143,533,328
EXPENSES
Management fee		8,430,421
Custodian’s fees and expenses		226,000
Shareholders’ reports		151,000
Insurance expenses		29,000
Trustees’ fees		28,000
Audit fee		23,000
Interest expense (Note 8)		14,904
Legal fees and expenses		13,000
Commitment fee on syndicated credit agreement		8,000
Transfer agent’s fee and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Miscellaneous		18,800
Total expenses		8,946,125
NET INVESTMENT INCOME		134,587,203
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(1,337,868))		(109,180,129	)
Swap transactions		3,400,401
Foreign currency transactions		45,596
		(105,734,132	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $(3,962,807))		(385,233,829	)
Swaps		(3,514,556	)
Foreign currencies		(433,225	)
		(389,181,610	)
NET LOSS ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		(494,915,742	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(360,328,539	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	134,587,203		$	128,014,209
Net realized gain (loss) on investment, swap and foreign currency transactions		(105,734,132	)		8,684,076
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(389,181,610	)		(93,222,925	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(360,328,539	)		43,475,360
DISTRIBUTIONS:		(133,562,726	)		(121,240,261	)
SERIES SHARES TRANSACTIONS:
Series shares sold (1,247,295 and 8,066,804 shares, respectively)		5,374,155			42,674,086
Series shares issued in reinvestment of dividends (30,575,224 and 23,224,719 shares, respectively)		133,562,726			121,240,261
Series shares repurchased (17,244,757 and 25,105,500 shares, respectively)		(79,147,876	)		(133,249,807	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARES TRANSACTIONS		59,789,005			30,664,540
TOTAL DECREASE IN NET ASSETS		(434,102,260	)		(47,100,361	)
NET ASSETS:
Beginning of year		1,673,965,863			1,721,066,224
End of year	$	1,239,863,603		$	1,673,965,863

SEE NOTES TO FINANCIAL STATEMENTS.

A85

	JENNISON PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.2%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace & Defense — 3.1%
Lockheed Martin Corp.	217,500	$	18,287,400
Raytheon Co.	352,900		18,012,016
			36,299,416
Beverages — 4.1%
Coca-Cola Co.(The)(b)	543,300		24,595,191
PepsiCo, Inc.	425,900		23,326,543
			47,921,734
Biotechnology — 14.0%
Celgene Corp.(a)	500,100		27,645,528
Genentech, Inc.(a)	595,800		49,397,778
Genzyme Corp.(a)	119,100		7,904,667
Gilead Sciences, Inc.(a)	1,516,200		77,538,467
			162,486,440
Capital Markets — 3.0%
Charles Schwab Corp.(The)	1,636,500		26,462,205
Goldman Sachs Group, Inc.(The)	83,100		7,012,809
Lazard Ltd. (Class A Stock)	52,100		1,549,454
			35,024,468
Chemicals — 2.4%
Monsanto Co.	401,400		28,238,490
Communications Equipment — 8.6%
Cisco Systems, Inc.(a)	1,710,600		27,882,780
QUALCOMM, Inc.	1,234,200		44,221,386
Research In Motion Ltd.(a)(b)	666,700		27,054,686
			99,158,852
Computers & Peripherals — 6.5%
Apple, Inc.(a)	304,137		25,958,093
Hewlett-Packard Co.	973,500		35,328,315
International Business Machines Corp.	164,000		13,802,240
			75,088,648
Energy Equipment & Services — 2.2%
Schlumberger Ltd.	596,700		25,258,311
Food & Staples Retailing — 7.9%
Costco Wholesale Corp.(b)	370,900		19,472,250
CVS/Caremark Corp.	981,900		28,219,806
Wal-Mart Stores, Inc.	790,000		44,287,400
			91,979,456
Food Products — 0.5%
Cadbury PLC (United Kingdom)	659,500		5,741,338
Health Care Equipment & Supplies — 6.0%
Alcon, Inc.	353,900		31,564,341
Baxter International, Inc.	716,300		38,386,517
			69,950,858
Health Care Providers & Services — 2.7%
Medco Health Solutions, Inc.(a)	588,400		24,659,844
UnitedHealth Group, Inc.	244,600		6,506,360
			31,166,204

COMMON STOCKS (continued)	Shares	Value (Note 2)
Household Products — 3.3%
Colgate-Palmolive Co.	556,800	$	38,163,072
Internet & Catalog Retail — 2.4%
Amazon.com, Inc.(a)(b)	538,100		27,593,768
Internet Software & Services — 4.5%
Google, Inc.(Class A Stock)(a)	169,100		52,023,615
IT Services — 4.3%
Infosys Technologies Ltd., ADR (India)(b)	513,600		12,619,152
Visa, Inc. (Class A Stock)	699,800		36,704,510
			49,323,662
Life Sciences, Tools & Services — 1.9%
Thermo Fisher Scientfic, Inc.(a)	663,700		22,612,259
Media — 1.6%
Walt Disney Co. (The)	828,900		18,807,741
Multiline Retail — 0.3%
Target Corp.	97,600		3,370,128
Oil, Gas & Consumable Fuels — 3.7%
Occidental Petroleum Corp.	323,100		19,382,769
Southwestern Energy Co.(a)	495,600		14,357,532
XTO Energy, Inc.	249,000		8,782,230
			42,522,531
Pharmaceuticals — 9.7%
Abbott Laboratories	654,200		34,914,654
Mylan, Inc.(a)(b)	706,500		6,987,285
Roche Holding Group, ADR (Switzerland)(b)	123,100		9,423,305
Shire PLC, ADR (United Kingdom)	273,470		12,245,987
Teva Pharmaceutical Industries Ltd., ADR (Israel)(b)	820,900		34,945,713
Wyeth	369,000		13,841,190
			112,358,134
Road & Rail — 0.3%
Union Pacific Corp.(b)	70,300		3,360,340
Semiconductors & Semiconductor Equipment — 0.4%
NVIDIA Corp.(a)	547,600		4,419,132
Software — 4.1%
Adobe Systems, Inc.(a)	903,100		19,226,999
Microsoft Corp.	848,200		16,489,008
Oracle Corp.(a)	667,800		11,840,094
			47,556,101
Textiles, Apparel & Luxury Goods — 1.7%
NIKE, Inc.(Class B Stock)(b)	394,400		20,114,400
TOTAL LONG-TERM INVESTMENTS (cost $1,120,119,588)			1,150,539,098

SEE NOTES TO FINANCIAL STATEMENTS.

A86

	JENNISON PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

SHORT-TERM INVESTMENT — 8.5%
	Shares	Value (Note 2)
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $98,410,347; includes $84,689,288 of cash collateral received for securities on loan)(c)(d)	98,410,347	$	98,410,347
TOTAL INVESTMENTS — 107.7% (cost $1,218,529,935)			1,248,949,445
LIABILITIES IN EXCESS OF OTHER ASSETS — (7.7)%			(88,778,063	)
NET ASSETS 100.0%		$	1,160,171,382

The following abbreviation is used in portfolio descriptions:

ADR American Depositary Receipt

(a) Non-income producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $83,984,880; cash collateral of $84,689,288 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	1,248,949,445	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	1,248,949,445	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the valuation of investments.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Biotechnology	14.0	%
Pharmaceuticals	9.7
Communications Equipment	8.6
Affiliated Money Market Mutual Fund (including 7.3% of collateral received for securities on loan)	8.5
Food & Staples Retailing	7.9
Computers & Peripherals	6.5
Health Care Equipment & Supplies	6.0
Internet Software & Services	4.5
IT Services	4.3
Beverages	4.1
Software	4.1
Oil, Gas & Consumable Fuels	3.7
Household Products	3.3
Aerospace & Defense	3.1
Capital Markets	3.0
Health Care Providers & Services	2.7
Chemicals	2.4
Internet & Catalog Retail	2.4
Energy Equipment & Services	2.2
Life Sciences, Tools & Services	1.9
Textiles, Apparel & Luxury Goods	1.7
Media	1.6
Food Products	0.5
Semiconductors & Semiconductor Equipment	0.4
Multiline Retail	0.3
Road & Rail	0.3
	107.7
Liabilities in excess of other assets	(7.7	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A87

JENNISON PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $83,984,880:
Unaffiliated investments (cost $1,120,119,588)	$	1,150,539,098
Affiliated investments (cost $98,410,347)		98,410,347
Cash		32,624
Dividends receivable		1,701,319
Foreign tax reclaim receivable		450,648
Receivable for Series shares sold		249,695
Prepaid expenses		22,226
Receivable for investments sold		3,000
Total Assets		1,251,408,957
LIABILITIES
Collateral for securities on loan		84,689,288
Payable for investments purchased		5,295,845
Management fee payable		574,457
Payable for Series shares repurchased		507,141
Accrued expenses and other liabilities		165,177
Distribution fee payable		2,522
Affiliated transfer agent fee payable		1,632
Administration fee payable		1,513
Total Liabilities		91,237,575
NET ASSETS	$	1,160,171,382
Net assets were comprised of:
Paid-in capital		2,122,181,439
Retained earnings		(962,010,057	)
Net assets, December 31, 2008	$	1,160,171,382
Class I:
Net asset value and redemption price per share, $1,147,982,288 / 78,171,850 outstanding shares of beneficial interest	$	14.69
Class II:
Net asset value and redemption price per share, $12,189,094 / 842,874 outstanding shares of beneficial interest	$	14.46

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $413,184)	$	17,033,551
Affiliated income from securities loaned, net		1,482,532
Affiliated dividend income		769,369
		19,285,452
EXPENSES
Management fee		10,069,788
Distribution fee—Class II		42,903
Administration fee—Class II		25,742
Shareholders’ reports		215,000
Custodian’s fees and expenses		185,000
Trustees’ fees		30,000
Audit fee		17,000
Insurance expenses		17,000
Legal fees and expenses		15,000
Transfer agent’s fees and expenses (including affiliated expense of $9,000) (Note 4)		9,000
Commitment fee on syndicated credit agreement		7,000
Interest expense (Note 8)		5,108
Miscellaneous		16,980
Total expenses		10,655,521
NET INVESTMENT INCOME		8,629,931
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(196,810,023	)
Foreign currency transactions		(47,426	)
		(196,857,449	)
Net change in unrealized appreciation (depreciation) on:
Investments		(549,975,863	)
Foreign currencies		(1,842	)
		(549,977,705	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(746,835,154	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(738,205,223	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net investment income	$	8,629,931		$	8,658,027
Net realized gain (loss) on investment and foreign currency transactions		(196,857,449	)		134,749,640
Net change in unrealized appreciation (depreciation) on investments		(549,977,705	)		94,375,405
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(738,205,223	)		237,783,072
DISTRIBUTIONS:
Class I		(8,646,693	)		(6,070,485	)
Class II		(11,569	)		—
TOTAL DISTRIBUTIONS		(8,658,262	)		(6,070,485	)
SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold [3,216,559 and 4,033,362 shares, respectively]		60,259,927			91,274,690
Series shares issued in reinvestment of distributions [390,535 and 259,312 shares, respectively]		8,658,027			6,070,485
Series shares repurchased [14,819,273 and 13,603,127 shares, respectively]		(284,240,992	)		(303,588,872	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(215,323,038	)		(206,243,697	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(962,186,523	)		25,468,890
NET ASSETS:
Beginning of year		2,122,357,905			2,096,889,015
End of year	$	1,160,171,382		$	2,122,357,905

SEE NOTES TO FINANCIAL STATEMENTS.

A88

	MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Certificates of Deposit — 21.9%
Australia & New Zealand Banking	2.050%	02/19/09	$	15,000	$	14,999,986
BNP Paribas	2.070%	01/14/09		25,413		25,413,000
BNP Paribas	2.080%	01/26/09		44,009		44,009,000
Credit Suisse (NY Branch)	2.150%	01/21/09		39,310		39,310,000
Royal Bank of Scotland/New York	2.110%	02/02/09		50,000		50,000,000
Royal Bank of Scotland/New York	1.200%	02/17/09		20,000		20,000,000
Toronto Dominion Bank (The)	2.420%	06/15/09		17,692		17,692,801
Toronto Dominion Bank (The)	1.970%	09/24/09		50,000		50,000,000
US Bank NA	1.000%	03/30/09		65,000		65,000,000
						326,424,787
Commercial Paper — 57.3%
Australia & New Zealand Banking, 144A(a)(c)	2.601%	10/02/09		40,000		40,000,000
Bank of America Corp.(d)	2.000%	01/05/09		10,000		9,997,778
Bank of Ireland 144A(a)(c)	2.701%	09/04/09		41,000		41,000,000
BASF AG, 144A(c)(d)	1.860%	01/14/09		15,000		14,989,925
Calyon North America, Inc.(d)	0.490%	01/22/09		60,000		59,982,850
CBA (Delaware) Finance(d)	2.000%	03/03/09		10,000		9,966,111
Citigroup Funding, Inc.(d)	1.000%	02/10/09		29,161		29,128,599
Conocophillips CPP Fdg., 144A(c)(d)	1.250%	01/27/09		20,500		20,481,493
Credit Suisse (NY Branch)(d)	1.950%	01/16/09		10,000		9,991,875
E.ON AG, 144A(c)(d)	2.300%	01/09/09		22,000		21,988,756
GDF Suez, 144A(c)(d)	2.290%	01/28/09		18,000		17,969,085
HSBC USA, Inc.(d)	2.000%	02/05/09		60,000		59,883,333
Lloyds TSB Bank PLC(d)	1.080%	02/17/09		65,000		64,908,350
Long Lane Master Trust IV, 144A(c)(d)	0.050%	01/02/09		33,000		32,999,954
Merrill Lynch & Co., Inc.(d)	2.250%	01/15/09		70,000		69,938,749
National Australia Funding Delaware, 144A(c)(d)	1.900%	02/02/09		50,000		49,915,556
New York Life Capital Corp., 144A(c)(d)	1.650%	01/09/09		20,000		19,992,667
Nordea Bank AB(d)	2.000%	01/16/09		15,000		14,987,500
Old Line Funding LLC, 144A(c)(d)	1.400%	01/14/09		37,155		37,136,216
Old Line Funding LLC, 144A(c)(d)	0.500%	01/15/09		19,565		19,561,196
Reckitt Benckiser TSY, 144A(c)(d)	2.050%	01/27/09		10,000		9,985,194
San Paolo IMI US Financial Co.(d)	2.050%	02/02/09		27,000		26,950,800
San Paolo IMI US Financial Co.(d)	1.320%	03/02/09		12,000		11,973,600
Santander Central Hispano Finance(d)	2.000%	01/20/09		50,000		49,947,222
Societe Generale North America, Inc.(d)	0.680%	03/02/09		40,000		39,954,667
UBS Finance (Delaware) LLC(d)	0.300%	01/22/09		20,000		19,996,500
UBS Finance (Delaware) LLC(d)	1.170%	02/18/09		20,000		19,968,800
Westpac Securities NZ LT, 144A(a)(c)	3.069%	01/28/09		30,000		30,000,000
						853,596,776
Other Corporate Obligations — 8.0%
Bank of America Corp., Sr. Unsec’d. Notes(a)	2.906%	08/06/09		30,000		30,000,000
General Electric Capital Corp., Sr. Unsec’d. Notes, M.T.N.(a)	4.247%	01/05/09		10,000		10,001,923
MetLife Insurance Co. of Connecticut(a)(b)(e) (original cost $6,000,000; purchased 7/07/08)	4.739%	07/07/09		6,000		6,000,000
Metropolitan Life Insurance Co. (a)(b)(e) (original cost $8,000,000; purchased 2/01/08)	3.442%	02/02/09		8,000		8,000,000
Nordea Bank AB, M.T.N., 144A(a)(c)	3.891%	09/24/09		40,000		40,000,000
Wells Fargo & Co., Sr. Unsec’d. Notes, M.T.N.(a)	1.668%	09/23/09		25,000		25,011,414
						119,013,337
Time Deposit — 0.5%
Royal Bank of Canada	0.030%	01/02/09		7,670		7,670,000
U.S. Government Agency — 12.3%
Federal Home Loan Bank(a)	0.861%	02/17/09		10,000		10,000,000
Federal Home Loan Bank(a)	0.240%	02/19/09		25,000		25,000,000
Federal Home Loan Bank(a)	0.270%	02/23/09		25,000		25,000,000
Federal Home Loan Bank(a)	0.315%	02/27/09		33,000		33,000,000

SEE NOTES TO FINANCIAL STATEMENTS.

A89

	MONEY MARKET PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Government Agency (continued)
Federal Home Loan Bank(a)	0.350%	03/27/09	$	25,000	$	25,000,000
Goldman Sachs Promissory Notes Gtd.(b)(f)	2.250%	03/09/09		65,000		65,000,000
						183,000,000
TOTAL INVESTMENTS — 100.0% (amortized cost $1,489,704,900)(g)						1,489,704,900
OTHER ASSETS IN EXCESS OF LIABILITIES						52,853
NET ASSETS — 100.0%					$	1,489,757,753

The following abbreviation is used in portfolio descriptions:

M.T.N. Medium Term Notes

(a) Indicates a variable rate security. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2008.

(b) Indicates an illiquid security.

(c) Securities were 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.

(d) Rate quoted represents yield-to-maturity as of purchase date.

(e) Indicates a restricted security; the aggregate original cost of such securities is $14,000,000. The aggregate value of $14,000,000 is approximately 0.9% of net assets.

(f) FDIC—Guaranteed issued under temporary liquidity guarantee program.

(g) The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	—	—
Level 2—Other Significant Observable Inputs		1,489,704,900	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	1,489,704,900	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable input (Level 3) in determining the valuation of investments.

The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of December 31, 2008 was as follows:

Foreign Banks	33.6	%
Commercial Banks	22.7
Assets Backed Securities	15.9
Security Broker & Dealers	9.1
Finance Services	6.6
Non Captive Finance	4.7
Energy	4.1
Insurance	2.3
Chemicals	1.0
	100.0
Other assets in excess of liabilities	—
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A90

MONEY MARKET PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value (amortized cost $1,489,704,900)	$	1,489,704,900
Interest receivable		1,586,810
Receivable for Series shares sold		603,668
Prepaid expenses		16,456
Total Assets		1,491,911,834
LIABILITIES
Payable for Series shares repurchased		1,479,213
Management fee payable		507,226
Accrued expenses and other liabilities		145,817
Payable to custodian		20,864
Affiliated transfer agent fee payable		961
Total Liabilities		2,154,081
NET ASSETS	$	1,489,757,753
Net assets were comprised of:
Paid-in capital	$	1,489,757,753
Net assets, December 31, 2008	$	1,489,757,753
Net asset value and redemption price per share, $1,489,757,753 / 148,975,774 outstanding shares of beneficial interest	$	10.00

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest	$	41,813,349
EXPENSES
Management fee		5,547,767
Shareholders’ reports		165,000
Custodian’s fees and expenses		137,000
Trustees’ fees		23,000
Audit fee		16,000
Insurance expenses		14,000
Legal fees and expenses		11,000
Transfer agent’s fee and expenses (including affiliated expense of $4,700) (Note 4)		6,000
Miscellaneous		9,216
Total expenses		5,928,983
NET INVESTMENT INCOME		35,884,366
NET REALIZED GAIN ON INVESTMENT TRANSACTIONS		74,311
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	35,958,677

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	35,884,366		$	62,090,264
Net realized gain on investment transactions		74,311			25,015
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		35,958,677			62,115,279
DISTRIBUTIONS:		(35,958,677	)		(62,115,279	)
SERIES SHARE TRANSACTIONS:
Series shares sold [41,282,769 and 70,927,906 shares, respectively]		412,827,618			709,279,065
Series shares issued in reinvestment of distributions [3,595,860 and 6,211,703 shares, respectively]		35,958,677			62,117,029
Series shares repurchased [24,895,819 and 54,199,025 shares, respectively]		(248,958,192	)		(541,990,247	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		199,828,103			229,405,847
TOTAL INCREASE IN NET ASSETS		199,828,103			229,405,847
NET ASSETS:
Beginning of year		1,289,929,650			1,060,523,803
End of year	$	1,489,757,753		$	1,289,929,650

SEE NOTES TO FINANCIAL STATEMENTS.

A91

	NATURAL RESOURCES PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.6%
COMMON STOCKS — 99.0%	Shares	Value (Note 2)
All Other Basic Metals — 1.1%
Cameco Corp. (Canada)	466,800	$	7,959,611
Platmin Ltd., 144A (South Africa)(a)(f)	276,900		116,637
			8,076,248
Aluminum — 0.8%
Century Aluminum Co.(a)(b)	581,200		5,812,000
Coal — 0.5%
Patriot Coal Corp.(a)(b)	568,300		3,551,875
Copper — 2.5%
First Quantum Minerals Ltd. (Canada)	259,500		3,701,738
Freeport-McMoRan Copper & Gold, Inc. (Class B)(b)	396,019		9,678,704
Southern Copper Corp.(b)	290,700		4,668,642
			18,049,084
Diversified Exploration & Production — 19.7%
Cabot Oil And Gas Corp. (Class A)(b)	361,700		9,404,200
Cairn Energy PLC (United Kingdom)(a)	398,000		11,530,344
Concho Resources, Inc.(a)	474,700		10,832,654
Denbury Resources, Inc.(a)	884,900		9,663,108
Devon Energy Corp.	246,100		16,171,231
EOG Resources, Inc.	201,900		13,442,502
Newfield Exploration Co.(a)	337,600		6,667,600
OGX Petroleo e Gas Participacoes SA (Brazil)(a)	55,913		12,611,834
Noble Energy, Inc.	245,000		12,058,900
Oil Search Ltd. (Papua New Guinea)	1,882,841		6,165,386
Pacific Rubiales Energy Corp. (Canada)(a)	1,691,300		3,000,362
Pioneer Natural Resources Co.(b)	289,000		4,676,020
St. Mary Land & Exploration Co.	166,500		3,381,615
Talisman Energy, Inc.	1,143,900		11,427,561
Woodside Petroleum Ltd. (Australia)	420,462		10,880,423
			141,913,740
Diversified Metals & Mining — 3.0%
African Rainbow Minerals Ltd. (South Africa)	545,850		6,553,742
First Uranium Corp. (South Africa)(a)	390,800		579,315
First Uranium Corp., 144A (South Africa)(a)(f)	400,000		592,953
FNX Mining Co., Inc. (Canada)(a)	351,100		864,596
FNX Mining Co., Inc., 144A (Canada)(a)	56,300		138,641
Northern Dynasty Minerals Ltd.(a)(b)	859,700		3,163,696
Rio Tinto PLC ADR (United Kingdom)(b)	43,400		3,858,694
Sterlite Industries India Ltd., ADR (India)	1,009,700		5,573,544
			21,325,181
Diversified Resources — 0.3%
Edp Renovaveis SA., 144A (Spain)(a)	285,700		1,986,874

COMMON STOCKS (continued)	Shares	Value (Note 2)
Drillers — 2.7%
Helmerich & Payne, Inc.	254,500	$	5,789,875
Noble Corp.	291,600		6,441,444
Transocean Inc.(a)	120,503		5,693,767
Vantage Drilling Co.(a)	1,457,800		1,603,580
			19,528,666
Energy Services — 11.1%
Cameron International Corp.(a)(b)	603,200		12,365,600
Complete Production Services, Inc.(a)	527,000		4,295,050
DRIL-QUIP, Inc.(a)	244,900		5,022,899
Exterran Holdings, Inc.(a)(b)	181,000		3,855,300
Halliburton Co.	568,100		10,328,058
Integra Group Holdings, GDR(a)	1,236,950		1,397,754
National-Oilwell Varco, Inc.(a)	475,700		11,626,108
Schlumberger Ltd.	317,100		13,422,843
Superior Energy Services, Inc.(a)	408,300		6,504,219
Tenaris SA, ADR (Luxembourg)(b)	525,800		11,031,284
			79,849,115
Food — 0.6%
Agrenco Ltd., 144A (Brazil)(a)	1,166,700		110,066
Cosan Ltd., (Class A)(a)	1,274,400		4,409,424
			4,519,490
Gold — 21.9%
AGNICO-EAGLE Mines Ltd.(b)	305,900		15,701,847
AXMIN, Inc. (Canada)(a)	4,338,700		263,590
Barrick Gold Corp.(b)	356,994		13,126,669
Centerra Gold, Inc. (Canada)(a)	597,600		2,149,327
Cia de Minas Buenaventura SA, ADR (Peru)	652,000		12,987,840
Eldorado Gold Corp. (Canada)(a)	2,048,000		16,009,073
European Goldfields Ltd. (Canada)(a)	2,382,600		6,253,239
Gabriel Resources Ltd. (Canada)(a)	1,758,800		2,165,554
Gold Reserve, Inc.(a)	596,000		560,240
Gold Reserve, Inc. (Canada)(a)	131,900		125,009
Goldcorp, Inc.	414,277		13,062,154
Highland Gold Mining Ltd. (United Kingdom)(a)	427,900		221,477
Kinross Gold Corp.(b)	1,089,800		20,074,115
Lihir Gold Ltd., 144A (Papua New Guinea)(a)	2,344,983		5,055,179
Lihir Gold Ltd., ADR (Papua New Guinea)(a)(b)	462,300		10,138,239
Nevsun Resources Ltd. (Canada)(a)	1,782,900		1,372,017
Newcrest Mining Ltd. (Australia)	575,799		13,705,660
Newcrest Mining Ltd., 144A (Australia)	127,627		3,037,887
Newmont Mining Corp.	391,700		15,942,190
Seabridge Gold, Inc.(a)(b)	97,300		1,272,684
SEMAFO, Inc. (Canada)(a)	1,302,800		1,266,391
SEMAFO, Inc., 144A (Canada)(a)(f)	3,216,300		3,126,416
			157,616,797

SEE NOTES TO FINANCIAL STATEMENTS.

A92

	NATURAL RESOURCES PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Integrated Oil/Domestic — 4.1%
Hess Corp.	208,400	$	11,178,576
Occidental Petroleum Corp.	300,500		18,026,995
			29,205,571
Integrated Oil/International — 6.6%
BG Group PLC (United Kingdom)	1,060,900		14,597,232
Petroleo Brasileiro SA, ADR (Brazil)	428,200		10,486,618
Reliance Industries Ltd., GDR 144A (India)	141,400		7,155,618
Sasol Ltd., ADR (South Africa)(b)	493,200		14,958,756
			47,198,224
Iron & Steel — 1.3%
Cliffs Natural Resources, Inc.	314,700		8,059,467
MMX Mineracao e Metalicos SA (Brazil)(a)	1,384,000		1,643,945
			9,703,412
Mineral Sands — 2.2%
OPTI Canada, Inc. (Canada)(a)	1,416,448		2,065,295
Suncor Energy, Inc.	640,100		12,481,950
UTS Energy Corp. (Canada)(a)	2,296,900		1,488,473
			16,035,718
Natural Gas Production — 13.9%
Bill Barrett Corp.(a)(b)	288,300		6,091,779
BPI Energy Holdings, Inc.(a)	2,800,000		28,000
Equitable Resources, Inc.	275,100		9,229,605
Linc Energy Ltd., 144A (Australia)(a)(f)	2,820,000		3,965,919
Petrohawk Energy Corp.(a)	475,100		7,425,813
Range Resources Corp.	438,050		15,064,540
SandRidge Energy, Inc.(a)	733,400		4,510,410
Southwestern Energy Co.(a)	778,800		22,561,835
Trident Resources Corp.(Canada)(Private) (cost $4,402,178; purchased 12/4/03)(a)(f)(g)	412,657		1,754,920
Ultra Petroleum Corp.(a)	299,000		10,318,490
XTO Energy, Inc.	450,325		15,882,963
Zodiac Exploration Corp. (Canada)(Private) (cost $3,757,486; purchased 8/08/08)(a)(f)(g)	8,000,000		3,110,571
			99,944,845
Non-Natural Resources — 1.5%
NRG Energy, Inc.(a)(b)	451,600		10,535,828
Oil & Gas Storage & Transportation — 1.6%
LLX Logistica SA (Brazil)(a)	1,384,000		896,158
Williams Cos., Inc.	744,800		10,784,704
			11,680,862
Platinum — 1.0%
Impala Platinum Holdings Ltd., ADR (South Africa)	494,100		7,263,270
Silver — 2.6%
Hecla Mining Co.(a)(b)	1,506,100		4,217,080
Pan American Silver Corp. (Canada)(a)	130,458		2,220,269

COMMON STOCKS (continued)	Shares		Value (Note 2)
Silver (continued)
Pan American Silver Corp.(a)(b)		419,600	$	7,162,572
Silver Wheaton Corp.(a)(b)		738,000		4,789,620
				18,389,541
TOTAL COMMON STOCKS (cost $959,386,442)				712,186,341
	Principal Amount (000)#
CORPORATE BOND — 0.6%
Natural Gas Production — 0.6%
Trident Subordinated Unsecured Note, PIK, 7.9712%, due 8/12/12 (cost $16,237,615; purchased 8/20/07-12/29/08) (Canada)(Private) (f)(g)	CAD	17,086		4,671,234
	Units
WARRANTS(a)
Gold
Crystallex International Corp. Warrant, expiring 8/11/09 (Canada)(Private) (cost $0; purchased 2/08/08)(f)(g)		221,350		1
Natural Gas Production
Trident Warrant, expiring 1/01/15 (Canada)(Private) (cost $0; purchased 8/20/07)(f)(g)		1,455,868		118
Zodiac Exploration Corp. Warrant, expiring 2/10/12 (Canada)(Private) (cost $0; purchased 8/08/08)(f)(g)		8,000,000		—	(e)
				118
TOTAL WARRANTS (cost $0)				119
TOTAL LONG TERM INVESTMENTS (cost $975,624,057)				716,857,694
	Shares
SHORT-TERM INVESTMENT — 10.7%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $76,873,018; includes $76,873,017 of cash collateral received for securities on loan)(Note 4)(c)(d)		76,873,018		76,873,018
TOTAL INVESTMENTS(h) — 110.3% (cost $1,052,497,075)				793,730,712
LIABILITIES IN EXCESS OF OTHER ASSETS — (10.3)%				(74,011,175	)
NET ASSETS — 100.0%			$	719,719,537

SEE NOTES TO FINANCIAL STATEMENTS.

A93

	NATURAL RESOURCES PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following abbreviations are used in portfolio descriptions:

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
CAD	Canadian Dollar
GDR	Global Depositary Receipt
PIK	Payment in Kind

# Principal amount shown in U.S. Dollars unless otherwise stated.

(a) Non-income producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $75,071,460; cash collateral of $76,873,017 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or portion thereof, purchased with cash collateral for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(e) Less than $0.50.

(f) Indicates illiquid securities.

(g) Indicates a security restricted to resale. The aggregate cost of such securities was $24,397,279. The aggregate value of $9,536,844 is approximately 1.3% of the net assets.

(h) As of December 31, 2008, 11 securities representing $52,347,298 and 7.3% of the net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	741,383,414	—
Level 2—Other Significant Observable Inputs		42,810,454	—
Level 3—Significant Unobservable Inputs		9,536,844	—
Total	$	793,730,712	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	33,530,418
Realized gain (loss)		7,953
Change in unrealized appreciation (depreciation)		(15,601,253	)
Net purchases (sales)		5,201,731
Transfers in and/or out of Level 3		(13,602,005	)
Balance as of 12/31/08	$	9,536,844

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

Gold	21.9	%
Diversified Exploration & Production	19.7
Natural Gas Production	14.5
Energy Services	11.1
Affiliated Money Market Mutual Fund (including 10.7% of collateral received for securities on loan)	10.7
Integrated Oil/International	6.6
Integrated Oil/Domestic	4.1
Diversified Metals & Mining	3.0
Drillers	2.7
Silver	2.6
Copper	2.5
Mineral Sands	2.2
Oil & Gas Storage & Transportation	1.6
Non-Natural Resources	1.5
Iron & Steel	1.3
All Other Basic Metals	1.1
Platinum	1.0
Aluminum	0.8
Food	0.6
Coal	0.5
Diversified Resources	0.3
	110.3
Liabilities in excess of other assets	(10.3	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A94

NATURAL RESOURCES PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value, including securities on loan of $75,071,460:
Unaffiliated investments (cost $975,624,057)	$	716,857,694
Affiliated investments (cost $76,873,018)		76,873,018
Cash		248,784
Foreign currency, at value (cost $60)		61
Receivable for investments sold		3,207,132
Dividends and interest receivable		713,841
Receivable for Series shares sold		197,867
Tax reclaims receivable		70,516
Prepaid expenses		24,847
Total Assets		798,193,760
LIABILITIES
Collateral for securities on loan		76,873,017
Loan payable		583,000
Payable for Series shares repurchased		567,529
Management fee payable		252,741
Accrued expenses and other liabilities		183,758
Distribution fee payable		8,077
Administration fee payable		4,849
Affiliated transfer agent fee payable		1,252
Total Liabilities		78,474,223
NET ASSETS	$	719,719,537
Net assets were comprised of:
Paid-in capital	$	881,483,740
Retained earnings		(161,764,203	)
Net assets, December 31, 2008	$	719,719,537
Class I:
Net asset value and redemption price per share, $677,458,263 / 28,586,203 outstanding shares of beneficial interest	$	23.70
Class II:
Net asset value and redemption price per share, $42,261,274 / 1,795,313 outstanding shares of beneficial interest	$	23.54

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $291,005)	$	10,287,404
Affiliated income from securities loaned, net		1,801,625
Interest		1,564,234
Affiliated dividend income		386,765
		14,040,028
EXPENSES
Management fee		6,505,593
Distribution fee—Class II		134,288
Administration fee—Class II		80,573
Custodian’s fees and expenses		350,000
Shareholders’ reports		196,000
Transfer agent’s fee and expenses (including affiliated expense of $7,000) (Note 4)		76,000
Trustees’ fees		29,000
Loan interest expense (Note 8)		20,833
Audit fee		17,000
Insurance expenses		15,000
Legal fees and expenses		15,000
Interest expense		14,964
Commitment fee on syndicated credit agreement		7,000
Miscellaneous		34,944
Total expenses		7,496,195
NET INVESTMENT INCOME		6,543,833
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		113,761,782
Foreign currency transactions		(933,037	)
		112,828,745
Net change in unrealized appreciation (depreciation) on:
Investments		(971,071,204	)
Foreign currencies		(96	)
		(971,071,300	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(858,242,555	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(851,698,722	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	6,543,833		$	11,099,863
Net realized gain on investments and foreign currency transactions		112,828,745			192,336,330
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(971,071,300	)		354,652,375
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(851,698,722	)		558,088,568
DISTRIBUTIONS:
Class I		(195,367,433	)		(269,445,554	)
Class II		(8,068,760	)		(7,597,067	)
TOTAL DISTRIBUTIONS		(203,436,193	)		(277,042,621	)
SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold [2,490,421 and 2,086,590 shares, respectively]		121,940,234			120,995,195
Series shares issued in reinvestment of dividends and distributions [3,456,316 and 5,163,802 shares, respectively]		203,436,193			277,042,621
Series shares repurchased [6,091,987 and 3,216,652 shares, respectively]		(268,319,139	)		(171,222,869	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		57,057,288			226,814,947
TOTAL INCREASE (DECREASE) IN NET ASSETS		(998,077,627	)		507,860,894
NET ASSETS:
Beginning of year		1,717,797,164			1,209,936,270
End of year	$	719,719,537		$	1,717,797,164

SEE NOTES TO FINANCIAL STATEMENTS.

A95

	SMALL CAPITALIZATION STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.3%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace & Defense — 3.1%
AAR Corp.(a)	50,552	$	930,662
Applied Signal Technology, Inc.	16,696		299,526
Axsys Technologies, Inc.(a)(b)	12,000		658,320
Ceradyne, Inc.(a)	34,365		697,953
Cubic Corp.	20,209		549,685
Curtiss-Wright Corp.	58,766		1,962,197
Esterline Technologies Corp.(a)(b)	38,688		1,465,888
GenCorp, Inc.(a)	63,874		235,056
Moog, Inc. (Class A Stock)(a)(b)	55,845		2,042,252
Orbital Sciences Corp.(a)	76,759		1,499,103
Teledyne Technologies, Inc.(a)(b)	46,883		2,088,639
Triumph Group, Inc.	21,722		922,316
			13,351,597
Air Freight & Logistics — 0.5%
Forward Air Corp.	37,758		916,387
HUB Group, Inc. (Class A Stock)(a)	49,142		1,303,737
			2,220,124
Airlines — 0.3%
SkyWest, Inc.	74,497		1,385,644
Auto Components — 0.2%
Drew Industries, Inc.(a)(b)	25,237		302,844
Spartan Motors, Inc.	42,613		201,559
Standard Motor Products, Inc.	15,614		54,024
Superior Industries International, Inc.	30,283		318,578
			877,005
Automobiles — 0.1%
Winnebago Industries, Inc.(b)	37,959		228,893
Beverages — 0.1%
Boston Beer Co., Inc. (Class A Stock)(a)	13,165		373,886
Biotechnology — 1.2%
ArQule, Inc.(a)	36,859		155,545
Cubist Pharmaceuticals, Inc.(a)(b)	74,446		1,798,614
Martek Biosciences Corp.	43,276		1,311,696
Regeneron Pharmaceuticals, Inc.(a)(b)	82,138		1,508,054
Savient Pharmaceuticals, Inc.(a)(b)	61,715		357,330
			5,131,239
Building Products — 1.4%
Apogee Enterprises, Inc.	36,318		376,254
Gibraltar Industries, Inc.(b)	35,192		420,192
Griffon Corp.(a)	63,294		590,533
Lennox International, Inc.	61,415		1,983,091
NCI Building Systems, Inc.(a)(b)	25,736		419,497
Quanex Building Products Corp.	49,155		460,582
Simpson Manufacturing Co., Inc.	48,941		1,358,602
Universal Forest Products, Inc.	21,905		589,464
			6,198,215
Capital Markets — 1.7%
Greenhill & Co., Inc.(b)	23,765		1,658,084
Investment Technology Group, Inc.(a)	56,426		1,281,999

COMMON STOCKS (continued)	Shares	Value (Note 2)
Capital Markets (continued)
LaBranche & Co., Inc.(a)	68,514	$	328,182
OptionsXpress Holdings, Inc.	55,516		741,694
Piper Jaffray Cos., Inc.(a)	19,661		781,721
Stifel Financial Corp.(a)(b)	33,509		1,536,388
SWS Group, Inc.	35,874		679,812
TradeStation Group, Inc.(a)	41,672		268,784
			7,276,664
Chemicals — 1.7%
A. Schulman, Inc.	34,108		579,836
Arch Chemicals, Inc.	32,525		847,927
Balchem Corp.	23,726		591,015
Calgon Carbon Corp.(a)	70,528		1,083,310
Georgia Gulf Corp.(b)	39,107		41,844
H.B. Fuller Co.(b)	63,173		1,017,717
New Market Corp.	16,042		560,026
OM Group, Inc.(a)	39,770		839,545
Penford Corp.	14,667		148,430
PolyOne Corp.(a)	120,772		380,432
Quaker Chemical Corp.	14,127		232,389
Stepan Co.	9,400		441,706
Zep, Inc.(b)	28,265		545,797
			7,309,974
Commercial Banks — 8.2%
Boston Private Financial Holdings, Inc.(b)	83,166		568,855
Cascade Bancorp(b)	36,586		246,956
Central Pacific Financial Corp.	37,441		375,908
Columbia Banking Systems, Inc.	23,646		282,097
Community Bank System, Inc.	42,606		1,039,160
East West Bancorp, Inc.(b)	83,140		1,327,746
First BanCorp/Puerto Rico	98,997		1,102,827
First Commonwealth Financial Corp.	95,872		1,186,895
First Financial Bancorp.	41,583		515,213
First Financial Bankshares, Inc.	27,149		1,498,896
First Midwest Bancorp, Inc.	63,450		1,267,097
Frontier Financial Corp.(b)	61,318		267,346
Glacier Bancorp, Inc.	78,189		1,487,155
Hancock Holding Co.	31,085		1,413,124
Hanmi Financial Corp.	48,533		99,978
Home Bancshares, Inc./Conway AR	17,399		468,903
Independent Bank Corp./MI	24,842		53,659
Independent Bank Corp./Rockland MA	21,200		554,592
Irwin Financial Corp.	24,808		32,002
Nara Bancorp, Inc.	29,028		285,345
National Penn Bancshares, Inc.(b)	104,565		1,517,238
Old National Bancorp/IN(b)	86,568		1,572,075
PrivateBancorp, Inc.(b)	35,958		1,167,197
Prosperity Bancshares, Inc.	53,520		1,583,657
Provident Bankshares Corp.(b)	43,760		422,722
S&T Bancorp, Inc.	30,660		1,088,430
Signature Bank(a)	45,974		1,318,994
South Financial Group, Inc. (The)(b)	96,440		416,621

SEE NOTES TO FINANCIAL STATEMENTS.

A96

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Commercial Banks (continued)
Sterling Bancorp.	23,539	$	330,252
Sterling Bancshares, Inc.(b)	95,596		581,224
Sterling Financial Corp.(b)	68,027		598,638
Susquehanna Bancshares, Inc.	112,448		1,789,048
Tompkins Financial Corp.	8,700		504,165
UCBH Holdings, Inc.	144,997		997,579
UMB Financial Corp.	38,493		1,891,545
Umpqua Holdings Corp.	78,531		1,136,344
United Bankshares, Inc.(b)	49,226		1,635,288
United Community Banks, Inc.(b)	53,252		723,162
Whitney Holding Corp.	83,582		1,336,476
Wilshire Bancorp, Inc.	25,277		229,515
Wintrust Financial Corp.(b)	31,001		637,691
			35,551,615
Commercial Services & Supplies — 2.4%
ABM Industries, Inc.	57,740		1,099,947
ATC Technology Corp.(a)	26,451		386,978
Bowne & Co., Inc.	35,216		207,070
Consolidated Graphics, Inc.(a)	14,548		329,367
G&K Services, Inc. (Class A Stock)	24,725		499,940
Geo Group, Inc. (The)(a)	66,760		1,203,683
Healthcare Services Group, Inc.	56,141		894,326
Interface, Inc. (Class A Stock)	73,268		339,964
Mobile Mini, Inc.(a)	45,459		655,519
Standard Register Co. (The)	16,442		146,827
Sykes Enterprises, Inc.(a)	43,579		833,230
Tetra Tech, Inc.(a)	78,167		1,887,733
United Stationers, Inc.(a)	30,766		1,030,353
Viad Corp.	26,733		661,374
			10,176,311
Communications Equipment — 2.0%
Arris Group, Inc.(a)	160,324		1,274,577
Bel Fuse, Inc. (Class B Stock)	15,092		319,950
Black Box Corp.	22,904		598,252
Blue Coat Systems, Inc.(a)	50,922		427,745
Comtech Telecommunications Corp.(a)	32,370		1,483,194
Digi International, Inc.(a)	33,140		268,765
EMS Technologies, Inc.(a)	19,801		512,252
Harmonic, Inc.(a)	124,023		695,769
NETGEAR, Inc.(a)	46,057		525,510
Network Equipment Technologies, Inc.(a)	38,277		110,238
PC-Tel, Inc.	23,786		156,274
Symmetricom, Inc.(a)	58,053		229,309
Tekelec, Inc.(a)	86,273		1,150,882
Tollgrade Communications, Inc.(a)	17,191		82,173
ViaSat, Inc.(a)	35,476		854,262
			8,689,152
Computers & Peripherals — 0.8%
Adaptec, Inc.(a)(b)	159,093		525,007
Avid Technology, Inc.(a)	39,665		432,745
Hutchinson Technology, Inc.(a)(b)	29,913		104,097
Intermec, Inc.(a)	64,100		851,248

COMMON STOCKS (continued)	Shares	Value (Note 2)
Computers & Peripherals (continued)
Intevac, Inc.(a)(b)	28,380	$	143,887
Novatel Wireless, Inc.(a)	39,545		183,489
Stratasys, Inc.(a)	26,388		283,671
Synaptics, Inc.(a)(b)	44,140		730,958
			3,255,102
Construction & Engineering — 0.6%
EMCOR Group, Inc.(a)	85,517		1,918,147
Insituform Technologies, Inc.(a)	36,505		718,783
			2,636,930
Construction Materials — 0.6%
Eagle Materials, Inc.	56,817		1,046,001
Headwaters, Inc.(a)(b)	55,093		371,878
Texas Industries, Inc.(b)	36,010		1,242,345
			2,660,224
Consumer Finance — 0.5%
Cash America International, Inc.	37,921		1,037,139
First Cash Financial Services, Inc.(a)	33,593		640,283
Rewards Network, Inc.(a)	35,176		91,106
World Acceptance Corp.(a)(b)	21,108		417,094
			2,185,622
Containers & Packaging — 0.5%
Myers Industries, Inc.	36,773		294,184
Rock-Tenn Co. (Class A Stock)(b)	49,909		1,705,890
			2,000,074
Distributors
Audiovox Corp.(a)	24,177		121,127
Diversified Consumer Services — 0.9%
Capella Education Co.(a)(b)	18,500		1,087,060
Coinstar, Inc.(a)	36,909		720,095
Hillenbrand, Inc.	80,670		1,345,576
Pre-Paid Legal Services, Inc.(a)(b)	9,860		367,679
Universal Technical Institute, Inc.(a)(b)	28,138		483,129
			4,003,539
Diversified Financial Services — 0.3%
Financial Federal Corp.	33,565		781,057
Portfolio Recovery Associates, Inc.(a)(b)	20,015		677,308
			1,458,365
Diversified Telecommunication Services — 0.2%
Fairpoint Communications, Inc.	116,161		381,008
General Communication, Inc. (Class A Stock)(a)	57,672		466,567
			847,575
Electric Utilities — 1.5%
ALLETE, Inc.	34,696		1,119,640
Central Vermont Public Services Corp.	14,998		357,852
Cleco Corp.(b)	78,621		1,794,918
El Paso Electric Co.(a)	58,560		1,059,350

SEE NOTES TO FINANCIAL STATEMENTS.

A97

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Electric Utilities (continued)
UIL Holdings Corp.(b)	32,957	$	989,699
Unisource Energy Corp.	46,391		1,362,040
			6,683,499
Electrical Equipment — 2.1%
A.O. Smith Corp.	29,490		870,545
Acuity Brands, Inc.	52,696		1,839,618
Baldor Electric Co.(b)	60,418		1,078,461
Belden, Inc.	60,730		1,268,042
Brady Corp. (Class A Stock)	68,318		1,636,216
C&D Technologies, Inc.(a)(b)	34,176		106,971
II-VI, Inc.(a)	31,655		604,294
Magnetek, Inc.(a)	39,979		95,950
Regal Beloit Corp.	42,175		1,602,228
Vicor Corp.	25,538		168,806
			9,271,131
Electronic Equipment & Instruments — 3.3%
Agilysys, Inc.	29,655		127,220
Anixter International, Inc.(a)(b)	39,181		1,180,132
Benchmark Electronics, Inc.(a)(b)	84,967		1,085,029
Brightpoint, Inc.(a)	67,154		292,120
Checkpoint Systems, Inc.(a)(b)	50,492		496,841
Cognex Corp.	51,617		763,932
CTS Corp.	43,938		242,098
Daktronics, Inc.(b)	44,568		417,156
Electro Scientific Industries, Inc.(a)	35,247		239,327
FARO Technologies, Inc.(a)	21,745		366,621
Gerber Scientific, Inc.(a)	31,454		160,730
Insight Enterprises, Inc.(a)(b)	59,428		410,053
Itron, Inc.(a)(b)	45,010		2,868,936
Keithley Instruments, Inc.	17,855		65,171
Littelfuse, Inc.(a)	28,329		470,261
LoJack Corp.(a)	22,631		93,240
Mercury Computer Systems, Inc.(a)(b)	29,577		186,631
Methode Electronics, Inc. (Class A Stock)(b)	49,328		332,471
MTS Systems Corp.	22,161		590,369
Newport Corp.(a)	46,975		318,491
Park Electrochemical Corp.	26,724		506,687
Plexus Corp.(a)(b)	51,312		869,738
Radisys Corp.(a)(b)	29,781		164,689
Rogers Corp.(a)(b)	23,573		654,622
Scansource, Inc.(a)(b)	34,525		665,297
SYNNEX Corp.(a)	24,379		276,214
Technitrol, Inc.	53,518		186,243
TTM Technologies, Inc.(a)	55,851		290,984
			14,321,303
Energy Equipment & Services — 2.5%
Atwood Oceanics, Inc.(a)(b)	72,693		1,110,749
Basic Energy Services, Inc.(a)	30,275		394,786
Bristow Group, Inc.(a)	37,979		1,017,457
CARBO Ceramics, Inc.	26,556		943,535
Drill-Quip, Inc.(a)(b)	39,225		804,505
Gulf Island Fabrication, Inc.(b)	18,657		268,847

COMMON STOCKS (continued)	Shares	Value (Note 2)
Energy Equipment & Services (continued)
Hornbeck Offshore Services, Inc.(a)	30,041	$	490,870
ION Geophysical Corp.(a)	116,747		400,442
Lufkin Industries, Inc.	19,414		669,783
Matrix Service Co.(a)(b)	34,042		261,102
NATCO Group, Inc.(a)	26,376		400,388
Oil States International, Inc.(a)	65,000		1,214,850
Pioneer Drilling Co.(a)(b)	65,198		363,153
SEACOR Holdings, Inc.(a)(b)	26,157		1,743,364
Superior Well Services, Inc.(a)	21,475		214,750
Tetra Technologies, Inc.(a)	97,955		476,061
			10,774,642
Exchange Traded Fund — 0.1%
iShares S&P SmallCap 600 Index	6,319		278,036
Food & Staples Retailing — 1.1%
Andersons, Inc. (The)	23,799		392,208
Casey’s General Stores, Inc.	66,395		1,511,814
Great Atlantic & Pacific Tea Co.(a)	39,363		246,806
Nash-Finch Co.	16,718		750,471
Spartan Stores, Inc.	28,836		670,437
United Natural Foods, Inc.(a)(b)	56,005		998,009
			4,569,745
Food Products — 1.6%
Cal-Maine Foods, Inc.	16,450		472,115
Darling International, Inc.(a)	106,823		586,458
Diamond Foods, Inc.	21,381		430,827
Green Mountain Coffee Roasters, Inc.(a)(b)	22,833		883,637
Hain Celestial Group, Inc.(a)(b)	52,766		1,007,303
J&J Snack Foods Corp.	18,227		653,985
Lance, Inc.	41,199		945,105
Sanderson Farms, Inc.	22,782		787,346
TreeHouse Foods, Inc.(a)(b)	41,219		1,122,806
			6,889,582
Gas Utilities — 3.2%
Atmos Energy Corp.	118,984		2,819,921
Laclede Group, Inc. (The)	28,949		1,355,971
New Jersey Resources Corp.	55,022		2,165,116
Northwest Natural Gas Co.(b)	34,608		1,530,712
Piedmont Natural Gas Co., Inc.	95,650		3,029,235
South Jersey Industries, Inc.(b)	38,824		1,547,136
Southwest Gas Corp.	57,300		1,445,106
			13,893,197
Healthcare Equipment & Supplies — 4.7%
Abaxis, Inc.(a)	28,614		458,682
American Medical Systems Holdings, Inc.(a)(b)	95,681		860,172
Analogic Corp.	17,266		471,016
Arthrocare Corp.(a)(b)	34,746		165,738
CONMED Corp.(a)	37,923		907,877
Cooper Cos., Inc. (The)	58,751		963,516
CryoLife, Inc.(a)(b)	36,696		356,318
Cyberonics, Inc.(a)(b)	30,235		500,994
Datascope Corp.	17,458		912,006

SEE NOTES TO FINANCIAL STATEMENTS.

A98

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies (continued)
Greatbatch, Inc.(a)	29,904	$	791,260
Haemonetics Corp.(a)	33,021		1,865,687
ICU Medical, Inc.(a)	16,484		546,280
Immucor, Inc.(a)(b)	92,057		2,446,876
Integra LifeSciences Holdings Corp.(a)(b)	25,623		911,410
Invacare Corp.	41,992		651,716
Kensey Nash Corp.(a)	15,120		293,479
Mentor Corp.	44,128		1,364,879
Meridian Bioscience, Inc.(b)	52,653		1,341,072
Merit Medical Systems, Inc.(a)	36,585		655,969
Natus Medical, Inc.(a)(b)	36,519		472,921
Osteotech, Inc.(a)	23,390		39,529
Palomar Medical Technologies, Inc.(a)(b)	23,625		272,396
SurModics, Inc.(a)(b)	19,794		500,194
Symmetry Medical, Inc.(a)	46,783		372,861
Theragenics Corp.(a)	43,335		50,702
West Pharmaceutical Services, Inc.(b)	42,757		1,614,932
Zoll Medical Corp.(a)	27,454		518,606
			20,307,088
Healthcare Providers & Services — 5.9%
Air Methods Corp.(a)	13,917		222,533
Amedisys, Inc.(a)	35,240		1,456,822
AMERIGROUP Corp.(a)	69,170		2,041,898
AMN Healthcare Services, Inc.(a)	42,489		359,457
AmSurg Corp.(a)	41,061		958,364
Catalyst Health Solutions, Inc.(a)(b)	50,057		1,218,888
Centene Corp.(a)(b)	55,987		1,103,504
Chemed Corp.	29,248		1,163,193
Corvel Corp.(a)	10,313		226,680
Cross Country Healthcare, Inc.(a)	40,106		352,532
Gentiva Health Services, Inc.(a)	37,651		1,101,668
Healthspring, Inc.(a)	64,962		1,297,291
Healthways, Inc.(a)	43,882		503,765
HMS Holdings Corp.(a)	32,864		1,035,873
inVentiv Health, Inc.(a)	43,430		501,182
Landauer, Inc	12,213		895,213
LCA-Vision, Inc.(b)	24,140		99,215
LHC Group, Inc.(a)	19,323		695,628
Magellan Health Services, Inc.(a)(b)	52,832		2,068,900
Medcath Corp.(a)	25,552		266,763
Pediatrix Medical Group.(a)	59,608		1,889,574
Molina Healthcare, Inc.(a)(b)	18,291		322,105
MWI Veterinary Supply, Inc.(a)(b)	15,793		425,779
Odyssey Healthcare, Inc.(a)	42,800		395,900
Owens & Minor, Inc.	54,034		2,034,380
PharMerica Corp.(a)	39,745		622,804
PSS World Medical, Inc.(a)(b)	78,958		1,485,990
RehabCare Group, Inc.(a)	23,538		356,836
Res-Care, Inc.(a)	33,441		502,284
			25,605,021

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Technology — 0.5%
Eclipsys Corp.(a)(b)	71,368	$	1,012,711
Omnicell, Inc.(a)	40,833		498,571
Phase Forward, Inc.(a)	55,930		700,244
			2,211,526
Hotels, Restaurants & Leisure — 3.4%
Buffalo Wild Wings, Inc.(a)(b)	23,247		596,286
California Pizza Kitchen, Inc.(a)	31,436		336,994
CEC Entertainment, Inc.(a)(b)	29,674		719,595
CKE Restaurants, Inc.	71,278		618,693
Cracker Barrel Old Country Store, Inc.	29,233		601,907
DineEquity, Inc.(b)	20,065		231,951
Interval Leisure Group, Inc.(a)	51,320		276,615
Jack in the Box, Inc.(a)	74,163		1,638,261
Landry’s Restaurants, Inc.(b)	16,146		187,294
Marcus Corp.	27,516		446,585
Monarch Casino & Resort, Inc.(a)	14,929		173,923
Multimedia Games, Inc.(a)	30,198		71,871
O’Charleys, Inc.	27,781		55,562
P.F. Chang’s China Bistro, Inc.(a)(b)	31,075		650,711
Panera Bread Co. (Class A Stock)(a)(b)	40,045		2,091,950
Papa John’s International, Inc.(a)(b)	28,054		517,035
Peet’s Coffee & Tea, Inc.(a)	15,615		363,049
Pinnacle Entertainment, Inc.(a)	78,262		601,052
Red Robin Gourmet Burgers, Inc.(a)(b)	20,230		340,471
Ruby Tuesday, Inc.(a)(b)	68,802		107,331
Ruth’s Hospitality Group, Inc.(a)	25,214		34,795
Shuffle Master, Inc.(a)	72,510		359,650
Sonic Corp.(a)(b)	78,885		960,030
Steak N Shake Co. (The)(a)	37,371		222,357
Texas Roadhouse, Inc. (Class A Stock)(a)(b)	66,740		517,235
WMS Industries, Inc.(a)(b)	65,329		1,757,350
			14,478,553
Household Durables — 0.6%
Bassett Furniture Industries, Inc.	14,957		50,106
Champion Enterprises, Inc.(a)	101,479		56,828
Ethan Allen Interiors, Inc.	37,465		538,373
La-Z-Boy, Inc.(b)	67,189		145,800
M/I Homes, Inc.	18,302		192,903
Meritage Home Corp.(a)(b)	40,016		486,995
National Presto Industries, Inc.	6,265		482,405
Russ Berrie & Co., Inc.(a)	21,886		65,001
Skyline Corp.	8,919		178,291
Standard Pacific Corp.(a)	120,462		214,422
Universal Electronics, Inc.(a)	18,206		295,301
			2,706,425
Household Products — 0.3%
Central Garden & Pet Co. (Class A Stock)(a)	92,887		548,033
WD-40 Co.	21,515		608,660
			1,156,693

SEE NOTES TO FINANCIAL STATEMENTS.

A99

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Industrial Conglomerates — 0.2%
Standex International Corp.	16,365	$	324,682
Tredegar Corp.	25,248		459,008
			783,690
Insurance — 3.3%
American Physicians Capital, Inc.	10,500		505,050
Amerisafe, Inc.(a)	24,600		505,038
Delphi Financial Group, Inc.	53,845		992,902
Infinity Property & Casualty Corp.	18,770		877,122
National Financial Partners Corp.(b)	51,740		157,290
Navigators Group, Inc.(a)	17,303		950,108
Presidential Life Corp.	28,127		278,176
ProAssurance Corp.(a)	43,737		2,308,439
RLI Corp.	23,250		1,421,970
Safety Insurance Group, Inc.	21,318		811,363
Selective Insurance Group.	68,924		1,580,427
Stewart Information Services Corp.(b)	23,717		557,112
Tower Group, Inc.	26,477		746,916
United Fire & Casualty Co.	29,312		910,724
Zenith National Insurance Corp.	48,631		1,535,281
			14,137,918
Internet & Catalog Retail — 0.6%
Blue Nile, Inc.(a)(b)	18,960		464,330
HSN, Inc.(a)	51,371		373,467
NutriSystem, Inc.(b)	38,654		563,962
PetMed Express, Inc.(a)(b)	30,671		540,730
Stamps.com, Inc.(a)(b)	18,493		181,786
Ticketmaster Entertainment, Inc.(a)	52,233		335,336
			2,459,611
Internet Software & Services — 1.3%
Bankrate, Inc.(a)(b)	18,200		691,600
DealerTrack Holdings, Inc.(a)	51,985		618,102
Infospace, Inc.	45,114		340,611
Interwoven, Inc.(a)	60,180		758,268
j2 Global Communications, Inc.(a)	57,312		1,148,532
Knot, Inc. (The)(a)(b)	37,472		311,767
Perficient, Inc.(a)	42,263		202,017
United Online, Inc.	106,981		649,375
Websense, Inc.(a)(b)	58,787		880,041
			5,600,313
IT Services — 1.6%
CACI International, Inc. (Class A Stock)(a)(b)	39,026		1,759,681
Ciber, Inc.(a)	69,777		335,627
CSG Systems International, Inc.(a)	45,689		798,187
Cybersource Corp.(a)(b)	90,774		1,088,380
Forrester Research, Inc.(a)(b)	20,000		564,200
Gevity HR, Inc.	32,172		48,580
Heartland Payment Systems, Inc.(b)	31,949		559,108
Integral Systems, Inc.(a)	22,323		268,992
MAXIMUS, Inc.	23,950		840,885
Startek, Inc.(a)	15,037		66,915
Wright Express Corp.(a)(b)	50,558		637,031
			6,967,586

COMMON STOCKS (continued)	Shares	Value (Note 2)
Leisure Equipment & Products — 0.9%
Arctic Cat, Inc.	15,544	$	74,456
Brunswick Corp.	114,406		481,649
JAKKS Pacific, Inc.(a)(b)	35,911		740,844
Nautilus, Inc.(a)	29,098		64,307
Polaris Industries, Inc.(b)	42,313		1,212,266
Pool Corp.(b)	62,545		1,123,934
RC2 Corp.(a)	22,458		239,627
Sturm Ruger & Co., Inc.(a)	25,339		151,274
			4,088,357
Life Sciences Tools & Services — 0.6%
Cambrex Corp.(a)	38,016		175,634
Dionex Corp.(a)(b)	23,537		1,055,634
Enzo Biochem, Inc.(a)	42,399		207,331
Kendle International, Inc.(a)	17,436		448,454
Parexel International Corp.(a)	72,145		700,528
			2,587,581
Machinery — 4.2%
Actuant Corp. (Class A Stock)	73,300		1,394,166
Albany International Corp.	34,656		444,983
Astec Industries, Inc. (Class A Stock)(a)	25,723		805,902
Barnes Group, Inc.	56,029		812,421
Briggs & Stratton Corp.(b)	65,012		1,143,561
Cascade Corp.	11,033		329,445
Circor International, Inc.	22,400		616,000
CLARCOR, Inc.(b)	66,276		2,199,038
EnPro Industries, Inc.(a)	26,520		571,241
Gardner Denver, Inc.(a)	67,591		1,577,574
John Bean Technologies Corp.	35,929		293,540
Kaydon Corp.	44,707		1,535,685
Lindsay Corp.(b)	15,994		508,449
Lydall, Inc.(a)	21,704		124,798
Mueller Industries, Inc.	48,550		1,217,634
Robbins & Myers, Inc.	45,337		733,099
Toro Co.	46,419		1,531,827
Valmont Industries, Inc.	22,929		1,406,923
Wabash National Corp.(b)	40,023		180,104
Watts Water Technologies, Inc. (Class A Stock)	38,158		952,805
			18,379,195
Marine — 0.4%
Kirby Corp.(a)	69,779		1,909,153
Media — 0.3%
4Kids Entertainment, Inc.(a)	15,512		30,404
A.H. Belo Corp. (Class A Stock)	22,933		49,994
Arbitron, Inc.	34,379		456,553
E.W. Scripps Co. (Class A Stock)	37,945		83,858
Live Nation, Inc.(a)(b)	102,018		585,583
			1,206,392
Metals & Mining — 0.5%
A.M. Castle & Co.	21,512		232,975
AMCOL International Corp.(b)	29,383		615,574
Brush Engineered Materials, Inc.(a)	26,494		337,004
Century Aluminum Co.(a)(b)	47,959		479,590

SEE NOTES TO FINANCIAL STATEMENTS.

A100

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Metals & Mining (continued)
Olympic Steel, Inc.	11,727	$	238,879
RTI International Metals, Inc.(a)(b)	30,036		429,815
			2,333,837
Multiline Retail — 0.1%
Fred’s, Inc. (Class A Stock)	52,137		560,994
Tuesday Morning Corp.(b)	40,002		65,203
			626,197
Multi-Utilities — 0.6%
Avista Corp.(b)	71,086		1,377,646
CH Energy Group, Inc.	20,604		1,058,840
			2,436,486
Oil, Gas & Consumable Fuels — 1.7%
Holly Corp.	53,180		969,471
Penn Virginia Corp.(b)	54,654		1,419,911
Petroleum Development Corp.(a)	19,362		466,043
Petroquest Energy, Inc.(a)(b)	56,600		382,616
St. Mary Land & Exploration Co.	81,176		1,648,685
Stone Energy Corp.(a)	45,262		498,787
Swift Energy Co.(a)	40,244		676,502
World Fuel Services Corp.	38,266		1,415,842
			7,477,857
Paper & Forest Products — 0.5%
Buckeye Technologies, Inc.(a)(b)	50,398		183,449
Clearwater Paper Corp.(a)	14,700		123,333
Deltic Timber Corp.	13,816		632,082
Neenah Paper, Inc.	18,959		167,598
Schweitzer-Mauduit International, Inc.	20,102		402,442
Wausau Paper Corp.(b)	63,666		728,338
			2,237,242
Personal Products — 0.4%
Chattem, Inc.(a)	24,747		1,770,153
Mannatech, Inc.	20,358		49,877
			1,820,030
Pharmaceuticals — 0.7%
Noven Pharmaceuticals, Inc.(a)	32,488		357,368
Par Pharmaceutical Cos., Inc.(a)	45,032		603,879
Salix Pharmaceuticals, Ltd.(a)(b)	62,671		553,385
ViroPharma, Inc.(a)(b)	102,671		1,336,776
			2,851,408
Professional Services — 1.3%
Administaff, Inc.	28,808		624,557
CDI Corp.	16,784		217,185
Heidrick & Struggles International, Inc.(b)	21,341		459,685
On Assignment, Inc.(a)	46,557		263,978
School Specialty, Inc.(a)(b)	20,805		397,792
Spherion Corp.(a)	67,179		148,466
TrueBlue, Inc.(a)	56,554		541,222
Volt Information Sciences, Inc.(a)	16,660		120,452
Watson Wyatt Worldwide, Inc. (Class A Stock)	55,616		2,659,557
			5,432,894

COMMON STOCKS (continued)	Shares	Value (Note 2)
Real Estate Investment Trusts (REITs) — 6.1%
Acadia Realty Trust	42,210	$	602,337
Biomed Realty Trust, Inc.	104,824		1,228,537
Cedar Shopping Centers, Inc.(b)	58,081		411,213
Colonial Properties Trust	62,630		521,708
Diamondrock Hospitality Co.(b)	117,482		595,634
EastGroup Properties, Inc.(b)	32,758		1,165,530
Entertainment Properties Trust	42,956		1,280,089
Extra Space Storage, Inc.	111,612		1,151,836
Franklin Street Properties Corp.	76,900		1,134,275
Home Properties, Inc.(b)	42,182		1,712,589
Inland Real Estate Corp.	75,341		977,926
Kilroy Realty Corp.(b)	43,197		1,445,372
Kite Realty Group Trust(b)	44,384		246,775
LaSalle Hotel Properties(b)	53,510		591,286
Lexington Realty Trust(b)	95,641		478,205
LTC Properties, Inc.(b)	30,251		613,490
Medical Properties Trust, Inc.	86,582		546,332
Mid-America Apartment Communities, Inc.	36,873		1,370,201
National Retail Properties, Inc.(b)	102,359		1,759,551
Parkway Properties, Inc.	19,999		359,982
Pennsylvania Real Estate Invest Trust(b)	51,380		382,781
Post Properties, Inc.(b)	57,645		951,143
PS Business Parks, Inc.	19,562		873,639
Senior Housing Properties Trust(b)	149,491		2,678,878
Sovran Self Storage, Inc.(b)	28,707		1,033,452
Tanger Factory Outlet Centers(b)	41,373		1,556,452
Urstadt Biddle Properties, Inc. (Class A Stock)	27,855		443,730
			26,112,943
Real Estate Management & Development — 0.1%
Forestar Real Estate Group, Inc.(a)(b)	46,605		443,680
Road & Rail — 1.6%
Arkansas Best Corp.	32,988		993,269
Heartland Express, Inc.	72,764		1,146,761
Knight Transportation, Inc.(b)	74,639		1,203,181
Landstar System, Inc.(b)	68,452		2,630,609
Old Dominion Freight Line, Inc.(a)(b)	35,993		1,024,361
			6,998,181
Semiconductors & Semiconductor Equipment — 3.7%
Actel Corp.(a)	33,577		393,522
Advanced Energy Industries, Inc.(a)	42,530		423,174
ATMI, Inc.(a)(b)	41,964		647,505
Axcelis Technologies, Inc.(a)	134,464		68,577
Brooks Automation, Inc.(a)(b)	82,990		482,172
Cabot Microelectronics Corp.(a)(b)	30,336		790,860
Cohu, Inc.	30,383		369,153
Cymer, Inc.(a)(b)	38,667		847,194
Cypress Semiconductor Corp.(a)	189,060		845,098
Diodes, Inc.(a)(b)	42,318		256,447
DSP Group, Inc.(a)	34,976		280,508

SEE NOTES TO FINANCIAL STATEMENTS.

A101

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Semiconductors & Semiconductor Equipment (continued)
Exar Corp.(a)	55,920	$	372,986
FEI Co.(a)	48,434		913,465
Hittite Microwave Corp.(a)	25,100		739,446
Kopin Corp.(a)	88,473		180,485
Kulicke & Soffa Industries, Inc.(a)	69,977		118,961
Micrel, Inc.	62,713		458,432
Microsemi Corp.(a)(b)	105,798		1,337,286
MKS Instruments, Inc.(a)	64,139		948,616
Pericom Semiconductor Corp.(a)(b)	33,291		182,435
Rudolph Technologies, Inc.(a)(b)	39,973		141,105
Skyworks Solutions, Inc.(a)	216,356		1,198,611
Standard Microsystems Corp.(a)(b)	29,040		474,514
Supertex, Inc.(a)(b)	16,818		403,800
TriQuint Semiconductor, Inc.(a)(b)	190,339		654,766
Ultratech, Inc.(a)	30,635		366,395
Varian Semiconductor Equipment Associates, Inc.(a)(b)	94,780		1,717,413
Veeco Instruments, Inc.(a)	41,934		265,862
			15,878,788
Software — 3.0%
Blackbaud, Inc.(b)	56,497		762,710
Catapult Communications Corp.(a)	10,437		68,571
Concur Technologies, Inc.(a)(b)	55,435		1,819,377
Epicor Software Corp.(a)	78,196		375,341
EPIQ Systems, Inc.(a)(b)	46,449		776,163
Informatica Corp.(a)(b)	114,438		1,571,234
JDA Software Group, Inc.(a)	35,709		468,859
Manhattan Associates, Inc.(a)(b)	31,328		495,296
MICROS Systems, Inc.(a)(b)	104,967		1,713,061
Phoenix Technologies Ltd.(a)	37,546		131,411
Progress Software Corp.(a)	52,034		1,002,175
Quality Systems, Inc.(b)	23,694		1,033,532
Radiant Systems, Inc.(a)	35,992		121,293
Smith Micro Software, Inc.(a)	36,283		201,733
Sonic Solutions, Inc.(a)(b)	34,618		60,928
SPSS, Inc.(a)(b)	23,726		639,653
Take-Two Interactive Software, Inc.	101,241		765,382
Taleo Corp. (Class A Stock)(a)	39,894		312,370
THQ, Inc.(a)(b)	87,512		366,675
Tyler Technologies, Inc.(a)(b)	38,428		460,367
			13,146,131
Specialty Retail — 3.5%
Aaron Rents, Inc.	69,848		1,859,353
Big 5 Sporting Goods Corp.	28,089		146,344
Brown Shoe Co., Inc.	55,210		467,629
Buckle, Inc. (The)	30,713		670,158
Cabela’s, Inc.(a)(b)	51,363		299,446
Cato Corp. (The) (Class A Stock)	38,337		578,889
Charlotte Russe Holdings, Inc.(a)	27,310		177,242
Children’s Place Retail Stores, Inc. (The)(a)(b)	31,429		681,381
Christopher & Banks Corp.	46,329		259,442
Dress Barn, Inc.(a)(b)	58,725		630,707
Finish Line, Inc. (Class A Stock)	71,639		401,176
Genesco, Inc.(a)	25,095		424,607

COMMON STOCKS (continued)	Shares	Value (Note 2)
Specialty Retail (continued)
Group 1 Automotive, Inc.(b)	30,364	$	327,020
Gymboree Corp.(a)(b)	37,868		987,976
Haverty Furniture Cos., Inc.(b)	24,175		225,553
Hibbett Sports, Inc.(a)	37,202		584,443
Hot Topic, Inc.(a)	57,176		530,022
Jo-Ann Stores, Inc.(a)	33,072		512,285
Jos. A. Bank Clothiers, Inc.(a)(b)	23,811		622,658
Lithia Motors, Inc. (Class A Stock)	21,615		70,465
MarineMax, Inc.(a)	23,957		81,214
Men’s Wearhouse, Inc.	67,494		913,869
Midas, Inc.(a)(b)	18,291		191,873
OfficeMax, Inc.	99,110		757,200
Pep Boys-Manny, Moe & Jack	58,148		240,151
Sonic Automotive, Inc. (Class A Stock)	36,573		145,561
Stage Stores, Inc.	49,535		408,664
Stein Mart, Inc.	33,102		37,405
Tractor Supply Co.(a)(b)	41,652		1,505,303
Tween Brands, Inc.(a)(b)	32,256		139,346
Zale Corp.(a)(b)	41,624		138,608
Zumiez, Inc.(a)	26,254		195,592
			15,211,582
Textiles, Apparel & Luxury Goods — 2.2%
Carter’s, Inc.(a)(b)	73,565		1,416,862
Crocs, Inc.(a)(b)	108,369		134,378
Deckers Outdoor Corp.(a)	17,101		1,365,857
Fossil, Inc.(a)(b)	58,250		972,775
Iconix Brand Group, Inc.(a)(b)	76,087		744,131
K-Swiss, Inc. (Class A Stock)	34,968		398,635
Liz Claiborne, Inc.(b)	123,560		321,256
Maidenform Brands, Inc.(a)	24,426		247,924
Movado Group, Inc.	23,539		221,031
Oxford Industries, Inc.	17,699		155,220
Perry Ellis International, Inc.(a)(b)	15,322		97,141
Quiksilver, Inc.(a)(b)	165,776		305,028
Skechers USA, Inc. (Class A Stock)(a)	43,367		555,965
True Religion Apparel, Inc.(a)(b)	23,955		298,000
Unifirst Corp.	18,647		553,629
Volcom, Inc.(a)(b)	20,675		225,358
Wolverine World Wide, Inc.	63,921		1,344,898
			9,358,088
Thrifts & Mortgage Finance — 0.8%
Anchor Bancorp Wisconsin, Inc.	23,548		64,992
Bank Mutual Corp.	63,017		727,216
BankAtlantic Bancorp, Inc. (Class A Stock)	10,639		61,706
Brookline Bancorp, Inc.	76,166		811,168
Corus Bankshares, Inc.(b)	40,657		45,129
Dime Community Bancshares	34,297		456,150
Flagstar Bancorp, Inc.	76,383		54,232
Guaranty Financial Group, Inc.(a)(b)	142,180		371,090
TrustCo Bank Corp.	99,015		941,634
			3,533,317

SEE NOTES TO FINANCIAL STATEMENTS.

A102

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Tobacco — 0.1%
Alliance One International, Inc.(a)	116,092	$	341,310
Trading Companies & Distributors — 0.7%
Applied Industrial Technologies, Inc.	47,535		899,362
Kaman Corp. (Class A Stock)	33,250		602,823
Lawson Products	5,428		124,030
Watsco, Inc.(b)	36,978		1,419,955
			3,046,170
Water Utilites — 0.2%
American States Water Co.	22,552		743,765
TOTAL LONG-TERM INVESTMENTS (cost $519,833,326)			429,235,020
SHORT-TERM INVESTMENTS — 30.0%
Affiliated Money Market Mutual Fund — 29.8%
Dryden Core Investment Fund — Taxable Money Market Series (cost $128,952,727; includes $121,818,806 of cash collateral received for securities on loan)(c)(d)	128,952,727		128,952,727

SHORT-TERM INVESTMENTS (continued)	Principal Amount 000		Value (Note 2)
U.S. Government Obligation — 0.2%
U.S. Treasury Bills, 0.10%, 6/11/2009(e)(f) (cost $899,665)	$	900	$	899,472
TOTAL SHORT-TERM INVESTMENTS (cost $129,852,392)				129,852,199
TOTAL INVESTMENTS — 129.3% (cost $649,685,718)				559,087,219
LIABILITIES IN EXCESS OF OTHER ASSETS(g) — (29.3)%				(126,576,762	)
NET ASSETS — 100.0%			$	432,510,457

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $118,910,338; cash collateral of $121,818,806 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(e) Security segregated as collateral for futures contracts.

(f) Rate quoted represents yield-to-maturity as of purchase date.

(g) Liabilities in excess of other assets include net unrealized appreciation on financial futures as follows:

Open future contracts outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at December 31, 2008		Value at Trade Date		Unrealized Appreciation
Long Position:
68	Russell 2000	Mar. 09	$	3,385,720	$	3,230,357	$	155,363

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	558,187,747	$	155,363
Level 2—Other Significant Observable Inputs		899,472		—
Level 3—Significant Unobservable Inputs		—		—
Total	$	559,087,219	$	155,363

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any Significant Unobservable Inputs (Level 3) in determining the valuation of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A103

	SMALL CAPITALIZATION STOCK PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (including 28.2% of collateral received for securities on loan)	29.8	%
Commercial Banks	8.2
Real Estate Investment Trusts (REITs)	6.1
Healthcare Providers & Services	5.9
Healthcare Equipment & Supplies	4.7
Machinery	4.2
Semiconductors & Semiconductor Equipment	3.7
Specialty Retail	3.5
Hotels, Restaurants & Leisure	3.4
Electronic Equipment & Instruments	3.3
Insurance	3.3
Gas Utilities	3.2
Aerospace & Defense	3.1
Software	3.0
Energy Equipment & Services	2.5
Commercial Services & Supplies	2.4
Textiles, Apparel & Luxury Goods	2.2
Electrical Equipment	2.1
Communications Equipment	2.0
Capital Markets	1.7
Chemicals	1.7
Oil, Gas & Consumable Fuels	1.7
Food Products	1.6
IT Services	1.6
Road & Rail	1.6
Electric Utilities	1.5
Building Products	1.4
Internet Software & Services	1.3
Professional Services	1.3
Biotechnology	1.2
Food & Staples Retailing	1.1
Diversified Consumer Services	0.9
Leisure Equipment & Products	0.9
Computers & Peripherals	0.8

Thrifts & Mortgage Finance	0.8	%
Pharmaceuticals	0.7
Trading Companies & Distributors	0.7
Construction & Engineering	0.6
Construction Materials	0.6
Household Durables	0.6
Internet & Catalog Retail	0.6
Life Sciences Tools & Services	0.6
Multi-Utilities	0.6
Air Freight & Logistics	0.5
Consumer Finance	0.5
Containers & Packaging	0.5
Healthcare Technology	0.5
Metals & Mining	0.5
Paper & Forest Products	0.5
Marine	0.4
Personal Products	0.4
Airlines	0.3
Diversified Financial Services	0.3
Household Products	0.3
Media	0.3
Auto Components	0.2
Diversified Telecommunication Services	0.2
Industrial Conglomerates	0.2
U.S. Government Obligation	0.2
Water Utilities	0.2
Automobiles	0.1
Beverages	0.1
Exchange Traded Fund	0.1
Multiline Retail	0.1
Real Estate Management & Development	0.1
Tobacco	0.1
	129.3
Liabilities in excess of other assets	(29.3	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A104

SMALL CAPITALIZATION STOCK PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $118,910,338:
Unaffiliated investments (cost $520,732,991)	$	430,134,492
Affiliated investments (cost $128,952,727)		128,952,727
Dividends and interest receivable		806,605
Due from broker—variation margin		153,701
Receivable for investments sold		121,591
Receivable for Series shares sold		45,566
Prepaid expenses		7,556
Total Assets		560,222,238
LIABILITIES
Collateral for securities on loan		121,818,806
Payable for investments purchased		4,946,150
Payable for Series shares repurchased		429,961
Payable to custodian		258,103
Management fee payable		137,680
Accrued expenses and other liabilities		120,459
Affiliated transfer agent fee payable		622
Total Liabilities		127,711,781
NET ASSETS	$	432,510,457
Net assets were comprised of:
Paid-in capital	$	481,522,142
Retained earnings		(49,011,685	)
Net assets, December 31, 2008	$	432,510,457
Net asset value and redemption price per share, $432,510,457 / 34,557,171 outstanding shares of beneficial interest	$	12.52

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $2,772)	$	7,377,862
Affiliated income from securities loaned, net		3,055,964
Affiliated dividend income		73,761
Interest		9,373
		10,516,960
EXPENSES
Management fee		2,341,790
Shareholders’ reports		153,000
Custodian’s fees and expenses		98,000
Audit fee		17,000
Trustees’ fees		17,000
Insurance expenses		9,000
Legal fees and expenses		9,000
Interest expense (Note 8)		8,854
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		4,000
Commitment fee on syndicated credit agreement		3,000
Miscellaneous		69,831
Total expenses		2,730,475
NET INVESTMENT INCOME		7,786,485
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions		46,344,588
Futures transactions		(4,084,893	)
		42,259,695
Net change in unrealized appreciation (depreciation) on:
Investments		(254,737,869	)
Futures		216,443
		(254,521,426	)
NET LOSS ON INVESTMENTS		(212,261,731	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(204,475,246	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
DECREASE IN NET ASSETS OPERATIONS:
Net investment income	$	7,786,485		$	6,742,973
Net realized gain on investment transactions		42,259,695			90,008,243
Net change in unrealized depreciation on investments		(254,521,426	)		(96,841,969	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS		(204,475,246	)		(90,753	)
DISTRIBUTIONS:		(96,751,216	)		(55,581,459	)
SERIES SHARE TRANSACTIONS:
Series shares sold [776,306 and 1,460,342 shares, respectively]		13,229,598			34,590,005
Series shares issued in reinvestment of dividends and distributions [5,411,142 and 2,642,961 shares, respectively]		96,751,216			55,581,459
Series shares repurchased [4,453,912 and 4,643,527 shares, respectively]		(75,813,375	)		(112,066,691	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		34,167,439			(21,895,227	)
TOTAL DECREASE IN NET ASSETS		(267,059,023	)		(77,567,439	)
NET ASSETS:
Beginning of year		699,569,480			777,136,919
End of year	$	432,510,457		$	699,569,480

SEE NOTES TO FINANCIAL STATEMENTS.

A105

	STOCK INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 97.9%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace/Defense — 2.8%
Boeing Co.(b)	167,036	$	7,127,426
General Dynamics Corp.	92,900		5,350,111
Goodrich Corp.	28,600		1,058,772
Honeywell International, Inc.	164,750		5,408,743
L-3 Communications Holdings, Inc.	27,400		2,021,572
Lockheed Martin Corp.	76,598		6,440,360
Northrop Grumman Corp.	79,426		3,577,347
Precision Castparts Corp.	30,800		1,831,984
Raytheon Co.	98,118		5,007,943
Rockwell Collins, Inc.	33,300		1,301,697
United Technologies Corp.	214,300		11,486,480
			50,612,435
Air Freight & Logistics — 1.2%
C.H. Robinson Worldwide, Inc.	38,200		2,102,146
Expeditors International Washington, Inc.(b)	48,200		1,603,614
FedEx Corp.	70,440		4,518,726
United Parcel Service, Inc. (Class B Stock)	226,400		12,488,224
			20,712,710
Airlines — 0.1%
Southwest Airlines Co.	164,137		1,414,861
Auto Components — 0.2%
Goodyear Tire & Rubber Co. (The)(a)	37,200		222,084
Johnson Controls, Inc.	138,300		2,511,528
			2,733,612
Automobiles — 0.1%
Ford Motor Co.(a)(b)	480,959		1,101,396
General Motors Corp.(b)	110,100		352,320
Harley-Davidson, Inc.(b)	52,600		892,622
			2,346,338
Beverages — 2.5%
Brown-Forman Corp. (Class B)	21,500		1,107,035
Coca-Cola Co. (The)(b)	448,600		20,308,122
Coca-Cola Enterprises, Inc.	74,800		899,844
Constellation Brands, Inc. (Class A Stock)(a)	38,200		602,414
DR Pepper Snapple Group Inc (a)	57,400		932,750
Molson Coors Brewing Co. (Class B Stock)	34,100		1,668,172
Pepsi Bottling Group, Inc.	33,600		756,336
PepsiCo, Inc.	353,340		19,352,432
			45,627,105
Biotechnology — 2.1%
Amgen, Inc.(a)	242,164		13,984,971
Biogen Idec, Inc.(a)	68,925		3,282,898
Celgene Corp.(a)(b)	100,000		5,528,000
Cephalon, Inc.(a)(b)	14,400		1,109,376
Genzyme Corp.(a)	60,300		4,002,111
Gilead Sciences, Inc.(a)(b)	206,200		10,545,068
			38,452,424

COMMON STOCKS (continued)	Shares	Value (Note 2)
Building Products — 0.1%
Masco Corp.	81,300	$	904,869
Capital Markets — 2.4%
American Capital Strategies Ltd.(b)	46,900		151,956
Ameriprise Financial, Inc.	58,200		1,359,552
Bank of New York Mellon Corp.(The)	261,189		7,399,484
Charles Schwab Corp.	216,600		3,502,422
E*Trade Financial Corp.(a)(b)	72,800		83,720
Federated Investors, Inc. (Class B Stock)	22,600		383,296
Franklin Resources, Inc.	36,800		2,347,104
Goldman Sachs Group, Inc. (The)	99,000		8,354,610
Invesco Limited	81,400		1,175,416
Janus Capital Group, Inc.	39,000		313,170
Legg Mason, Inc.	32,600		714,266
Merrill Lynch & Co., Inc.	344,500		4,009,980
Morgan Stanley (b)	257,810		4,135,272
Northern Trust Corp.	50,000		2,607,000
State Street Corp.	96,100		3,779,613
T. Rowe Price Group, Inc.(b)	60,600		2,147,664
			42,464,525
Chemicals — 1.7%
Air Products & Chemicals, Inc.	48,200		2,423,014
CF Industries Holding Inc	11,900		585,004
Dow Chemical Co. (The)	212,861		3,212,072
E.I. du Pont de Nemours & Co.	200,191		5,064,832
Eastman Chemical Co.	19,600		621,516
Ecolab, Inc.	36,300		1,275,945
International Flavors & Fragrances, Inc.	16,100		478,492
Monsanto Co.	122,296		8,603,524
PPG Industries, Inc.	35,800		1,518,994
Praxair, Inc.	71,300		4,232,368
Rohm & Haas Co.	25,600		1,581,824
Sigma-Aldrich Corp.(b)	27,600		1,165,824
			30,763,409
Commercial Banks — 3.1%
BB&T Corp.(b)	128,300		3,523,118
Comerica, Inc.	36,450		723,533
Fifth Third Bancorp	132,849		1,097,333
First Horizon National Corp.(b)	46,479		491,283
Huntington Bancshares, Inc.(b)	114,775		879,177
KeyCorp.(b)	109,000		928,680
M&T Bank Corp.(b)	17,600		1,010,416
Marshall & Ilsley Corp.(b)	58,698		800,641
National City Corp.	443,700		803,097
PNC Financial Services Group, Inc.(b)	80,000		3,920,000
Regions Financial Corp.	176,212		1,402,648
SunTrust Banks, Inc.	81,900		2,419,326
US Bancorp	399,481		9,991,020
Wachovia Corp.	471,455		2,611,861
Wells Fargo & Co.(b)	852,220		25,123,446
Zions Bancorporation(b)	30,300		742,653
			56,468,232

SEE NOTES TO FINANCIAL STATEMENTS.

A106

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Commercial Services & Supplies — 0.5%
Avery Dennison Corp.	25,400	$	831,342
Cintas Corp.	28,500		662,055
Pitney Bowes, Inc.	47,900		1,220,492
Republic Services, Inc.	64,410		1,596,724
R.R. Donnelley & Sons Co.	54,200		736,036
Stericycle, Inc.(a)	19,300		1,005,144
Waste Management, Inc.	113,330		3,755,756
			9,807,549
Communications Equipment — 2.4%
Ciena Corp.(a)	10,657		71,402
Cisco Systems, Inc.(a)	1,334,400		21,750,720
Corning, Inc.	368,400		3,510,852
Harris Corp.	30,400		1,156,720
JDS Uniphase Corp.(a)	45,587		166,393
Juniper Networks, Inc.(a)(b)	120,900		2,116,959
Motorola, Inc.	480,595		2,129,036
QUALCOMM, Inc.	367,400		13,163,942
Tellabs, Inc.(a)	88,000		362,560
			44,428,584
Computers & Peripherals — 4.2%
Apple, Inc.(a)	198,600		16,950,510
Dell, Inc.(a)	410,200		4,200,448
EMC Corp.(a)(b)	475,074		4,974,025
Hewlett-Packard Co.	558,916		20,283,062
International Business Machines Corp.(b)	306,200		25,769,792
Lexmark International, Inc. (Class A Stock)(a)(b)	23,614		635,217
Netapp, Inc.(a)(b)	79,400		1,109,218
QLogic Corp.(a)(b)	36,100		485,184
SanDisk Corp.(a)	47,800		458,880
Sun Microsystems, Inc.(a)	178,950		683,589
Teradata Corp.(a)	46,300		686,629
			76,236,554
Construction & Engineering — 0.2%
Fluor Corp.	41,400		1,857,618
Jacobs Engineering Group, Inc.(a)	28,500		1,370,850
			3,228,468
Construction Materials — 0.1%
Vulcan Materials Co.(b)	21,900		1,523,802
Consumer Finance — 0.5%
American Express Co.(b)	268,200		4,975,110
Capital One Financial Corp.(b)	88,569		2,824,465
Discover Financial Services	120,505		1,148,413
SLM Corp.(a)(b)	99,000		881,100
			9,829,088
Containers & Packaging — 0.2%
Ball Corp.	23,400		973,206
Bemis Co., Inc.	21,300		504,384
Pactiv Corp.(a)	26,300		654,344
Sealed Air Corp.	39,820		594,911
			2,726,845

COMMON STOCKS (continued)	Shares	Value (Note 2)
Distributors — 0.1%
Genuine Parts Co.	37,325	$	1,413,125
Diversified Consumer Services — 0.2%
Apollo Group, Inc. (Class A Stock)(a)	25,700		1,969,134
H&R Block, Inc.	79,500		1,806,240
			3,775,374
Diversified Financial Services — 3.3%
Bank of America Corp.(b)	1,130,235		15,913,709
CIT Group, Inc.(b)	77,300		350,942
Citigroup, Inc.	1,237,476		8,303,464
CME Group, Inc.	14,670		3,052,974
IntercontinentalExchange, Inc.(a)	15,100		1,244,844
JPMorgan Chase & Co.	839,845		26,480,313
Leucadia National Corp.(b)	38,900		770,220
Moody’s Corp.(b)	46,620		936,596
Nasdaq Stock Market (The), Inc.(a)	25,700		635,047
NYSE Euronext	56,700		1,552,446
			59,240,555
Diversified Telecommunication Services — 3.6%
AT&T, Inc.	1,333,711		38,010,763
CenturyTel, Inc.	22,200		606,726
Embarq Corp.	35,176		1,264,929
Frontier Communications Corp.	84,200		735,908
Qwest Communications International, Inc.(b)	341,747		1,243,959
Verizon Communications, Inc.	641,638		21,751,528
Windstream Corp.	117,565		1,081,598
			64,695,411
Electric Utilities — 2.4%
Allegheny Energy, Inc.	36,000		1,218,960
American Electric Power Co., Inc.	94,140		3,132,979
Duke Energy Corp.	285,382		4,283,584
Edison International	78,300		2,514,996
Entergy Corp.	43,000		3,574,590
Exelon Corp.	148,050		8,233,061
FirstEnergy Corp.	70,336		3,416,923
FPL Group, Inc.	92,500		4,655,525
Pepco Holdings, Inc.	47,400		841,824
Pinnacle West Capital Corp.	24,200		777,546
PPL Corp.	84,800		2,602,512
Progress Energy, Inc.	58,414		2,327,798
Southern Co.	170,300		6,301,100
			43,881,398
Electrical Equipment — 0.5%
Cooper Industries, Ltd. (Class A Stock)	40,500		1,183,815
Emerson Electric Co.	175,600		6,428,716
Rockwell Automation, Inc.	32,500		1,047,800
			8,660,331
Electronic Equipment & Instruments — 0.3%
Agilent Technologies, Inc.(a)	85,582		1,337,647
Amphenol Corp., (Class A Stock)	33,000		791,340
Jabil Circuit, Inc.	44,000		297,000

SEE NOTES TO FINANCIAL STATEMENTS.

A107

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Electronic Equipment & Instruments (continued)
Molex, Inc.	26,600	$	385,434
Tyco Electronics Ltd. (Bermuda)	114,460		1,855,397
			4,666,818
Energy Equipment & Services — 1.5%
Baker Hughes, Inc.	68,530		2,197,757
BJ Services Co.	67,500		787,725
Cameron International Corp.(a)	49,500		1,014,750
ENSCO International, Inc.	32,200		914,158
Halliburton Co.	195,400		3,552,372
Nabors Industries Ltd.(a)	54,000		646,380
National-Oilwell Varco, Inc.(a)	89,200		2,180,048
Noble Corp.	60,600		1,338,654
Rowan Cos., Inc.	24,100		383,190
Schlumberger Ltd.	271,500		11,492,595
Smith International, Inc.	43,200		988,848
Weatherford International Ltd.(a)	152,000		1,644,640
			27,141,117
Food & Staples Retailing — 3.2%
Costco Wholesale Corp.	99,132		5,204,430
CVS Caremark Corp.	322,838		9,278,364
Kroger Co. (The)	145,900		3,853,219
Safeway, Inc.	103,900		2,469,703
SUPERVALU, Inc.	50,508		737,417
Sysco Corp.	137,200		3,147,368
Walgreen Co.(b)	217,300		5,360,791
Wal-Mart Stores, Inc.	506,700		28,405,601
Whole Foods Market, Inc.(b)	28,300		267,152
			58,724,045
Food Products — 1.8%
Archer-Daniels-Midland Co.(b)	148,338		4,276,585
Campbell Soup Co.(b)	48,800		1,464,488
ConAgra Food, Inc.	114,000		1,881,000
Dean Foods Co.(a)	31,800		571,446
General Mills, Inc.	76,900		4,671,675
H.J. Heinz Co.	71,150		2,675,240
Hershey Co. (The)	37,700		1,309,698
J.M. Smucker Co. (The)	25,700		1,114,352
Kellogg Co.	55,200		2,420,520
Kraft Foods, Inc. (Class A Stock)	339,811		9,123,925
McCormick & Co., Inc.	31,300		997,218
Sara Lee Corp.	168,000		1,644,720
Tyson Foods, Inc. (Class A Stock)	59,900		524,724
			32,675,591
Gas Utilities — 0.1%
Equitable Resources, Inc.(b)	21,600		724,680
Nicor, Inc.	10,200		354,348
Questar Corp.(b)	39,800		1,301,062
			2,380,090
Healthcare Equipment & Supplies — 2.2%
Baxter International, Inc.	142,600		7,641,934
Becton Dickinson & Co.	57,700		3,946,103
Boston Scientific Corp.(a)	339,999		2,631,592
C.R. Bard, Inc.	23,400		1,971,684
Covidien Ltd. (Bermuda)	113,960		4,129,910

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies (continued)
Densply International, Inc.	33,600	$	948,864
Hospira, Inc.(a)	37,220		998,240
Intuitive Surgical, Inc.(a)(b)	8,800		1,117,512
Medtronic, Inc.	259,300		8,147,206
St. Jude Medical, Inc.(a)	79,300		2,613,728
Stryker Corp.	56,000		2,237,200
Varian Medical Systems, Inc.(a)(b)	28,100		984,624
Zimmer Holdings, Inc.(a)	53,886		2,178,072
			39,546,669
Healthcare Providers & Services — 2.1%
Aetna, Inc.	110,348		3,144,918
AmerisourceBergen Corp.	38,300		1,365,778
Cardinal Health, Inc.	80,175		2,763,632
CIGNA Corp.	69,600		1,172,760
Coventry Health Care, Inc.(a)	35,650		530,472
Davita Inc.(a)	23,600		1,169,852
Express Scripts, Inc.(a)	59,900		3,293,302
Humana, Inc.(a)	40,800		1,521,024
Laboratory Corp. of America Holdings(a)(b)	23,300		1,500,753
McKesson Corp.	64,107		2,482,864
Medco Health Solutions, Inc.(a)	113,092		4,739,686
Patterson Cos., Inc.(a)	19,100		358,125
Quest Diagnostics, Inc.	38,300		1,988,153
Tenet Healthcare Corp.(a)	90,000		103,500
UnitedHealth Group, Inc.	272,200		7,240,520
Wellpoint, Inc.(a)(b)	118,600		4,996,618
			38,371,957
Healthcare Technology
IMS Health, Inc.	47,420		718,887
Hotels, Restaurants & Leisure — 1.5%
Carnival Corp.	96,100		2,337,152
Darden Restaurants, Inc.	35,550		1,001,799
International Game Technology	59,000		701,510
Marriott International, Inc. (Class A Stock)	63,600		1,237,020
McDonald’s Corp.	253,500		15,765,165
Starbucks Corp.(a)	159,100		1,505,086
Starwood Hotels & Resorts Worldwide, Inc.	43,000		769,700
Wynn Resorts Ltd. (a)	9,900		418,374
Wyndham Worldwide Corp.(b)	44,763		293,198
Yum! Brands, Inc.	107,100		3,373,650
			27,402,654
Household Durables — 0.4%
Black & Decker Corp.(b)	11,400		476,634
Centex Corp.	24,600		261,744
D.R. Horton, Inc.	55,200		390,264
Fortune Brands, Inc.	33,800		1,395,264
Harman International Industries, Inc.(b)	14,100		235,893
KB Home.(b)	17,232		234,700
Leggett & Platt, Inc.	44,300		672,917
Lennar Corp. (Class A Stock)(b)	29,000		251,430

SEE NOTES TO FINANCIAL STATEMENTS.

A108

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Household Durables (continued)
Newell Rubbermaid, Inc.	64,649	$	632,267
Pulte Homes, Inc.	35,700		390,201
Snap-On, Inc.	12,300		484,374
Stanley Works (The)	19,100		651,310
Whirlpool Corp.(b)	17,507		723,914
			6,800,912
Household Products — 3.1%
Clorox Co.	31,300		1,739,028
Colgate-Palmolive Co.	117,400		8,046,596
Kimberly-Clark Corp.	95,788		5,051,859
Procter & Gamble Co.	677,981		41,912,784
			56,750,267
Independent Power Producers & Energy Traders — 0.1%
AES Corp. (The)(a)(b)	159,700		1,315,928
Constellation Energy Group, Inc.	34,850		874,387
Dynegy, Inc. (Class A Stock)(a)	92,800		185,600
			2,375,915
Industrial Conglomerates — 2.8%
3M Co.	157,200		9,045,288
General Electric Co.	2,365,700		38,324,339
Textron, Inc.	57,800		801,686
Tyco International Ltd. (Bermuda)	115,160		2,487,456
			50,658,769
Insurance — 2.5%
AFLAC, Inc.(b)	108,700		4,982,808
Allstate Corp. (The)	123,488		4,045,467
American International Group, Inc.(b)	536,587		842,442
Aon Corp.	63,925		2,920,094
Assurant, Inc.(b)	24,500		735,000
Chubb Corp.	83,200		4,243,200
Cincinnati Financial Corp.	41,528		1,207,219
Genworth Financial, Inc. (Class A Stock)	112,300		317,809
Hartford Financial Services Group, Inc.	74,800		1,228,216
Lincoln National Corp.	62,963		1,186,223
Loews Corp.	79,426		2,243,785
Marsh & McLennan Co., Inc.	117,100		2,842,017
MBIA, Inc.(b)	36,550		148,759
MetLife, Inc.	176,700		6,159,762
Principal Financial Group, Inc.(b)	61,300		1,383,541
Progressive Corp. (The)	148,100		2,193,361
Torchmark Corp.	21,900		978,930
Travelers Cos., Inc. (The)	136,798		6,183,270
Unum Group	86,456		1,608,082
XL Capital Ltd. (Class A Stock)	74,300		274,910
			45,724,895
Internet & Catalog Retail — 0.2%
Amazon.Com, Inc.(a)(b)	68,700		3,522,936
Expedia, Inc.(a)	44,900		369,976
			3,892,912
Internet Software & Services — 1.4%
Akamai Technologies, Inc.(a)	36,100		544,749
eBay, Inc.(a)	254,600		3,554,216

COMMON STOCKS (continued)	Shares	Value (Note 2)
Internet Software & Services (continued)
Google, Inc. (Class A Stock)(a)	54,050	$	16,628,483
VeriSign, Inc.(a)	44,500		849,060
Yahoo!, Inc.(a)(b)	302,600		3,691,720
			25,268,228
IT Services — 0.9%
Affiliated Computer Services, Inc. (Class A Stock)(a)	22,500		1,033,875
Automatic Data Processing, Inc.	117,400		4,618,516
Cognizant Technology Solutions Corp. (Class A Stock)(a)	58,600		1,058,316
Computer Sciences Corp.(a)	36,700		1,289,638
Convergys Corp.(a)	32,200		206,402
Fidelity National Information Services, Inc.	37,900		616,633
Fiserv, Inc.(a)	34,700		1,262,039
Mastercard Inc (Class A Stock)	15,200		2,172,536
Paychex, Inc.(b)	71,250		1,872,450
Total System Services, Inc.	41,593		582,302
Western Union Co. (The)	166,704		2,390,535
			17,103,242
Leisure Equipment & Products — 0.1%
Eastman Kodak Co.(b)	61,000		401,380
Hasbro, Inc.	31,550		920,314
Mattel, Inc.	78,181		1,250,896
			2,572,590
Life Sciences, Tools & Services — 0.3%
Life Technologies Corp Com (a)	38,930		907,458
Millipore Corp.(a)	12,500		644,000
PerkinElmer, Inc.	18,000		250,380
Thermo Fisher Scientific, Inc.(a)	89,100		3,035,637
Waters Corp.(a)	23,000		842,950
			5,680,425
Machinery — 1.6%
Caterpillar, Inc.(b)	132,100		5,900,907
Cummins, Inc.	42,600		1,138,698
Danaher Corp.	55,200		3,124,872
Deere & Co.	97,300		3,728,536
Dover Corp.	43,500		1,432,020
Eaton Corp.	36,500		1,814,415
Flowserve Corp.	12,000		618,000
Illinois Tool Works, Inc.	90,500		3,172,025
Ingersoll-Rand Co. Ltd. (Class A Stock)	70,247		1,218,785
ITT Corp.(b)	41,500		1,908,585
Manitowoc Co., Inc.(The)	22,600		195,716
PACCAR, Inc.(b)	84,028		2,403,201
Pall Corp.	26,200		744,866
Parker Hannifin Corp.	39,687		1,688,285
			29,088,911
Media — 2.5%
CBS Corp. (Class B Stock)(b)	168,768		1,382,210
Comcast Corp. (Class A Stock)	650,446		10,979,528
DIRECTV Group, Inc. (The)(a)(b)	124,200		2,845,422
Gannett Co., Inc.(b)	56,300		450,400

SEE NOTES TO FINANCIAL STATEMENTS.

A109

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Media (continued)
Interpublic Group of Cos., Inc.(a)(b)	96,000	$	380,160
McGraw-Hill Cos., Inc. (The)	72,900		1,690,551
Meredith Corp.(b)	7,200		123,264
New York Times Co. (The) (Class A Stock)(b)	23,500		172,255
News Corp. (Class A Stock)	515,000		4,681,350
Omnicom Group, Inc.	71,500		1,924,780
Scripps Networks Interactive, Inc. (Class A Stock)	20,300		446,600
Time Warner, Inc.(b)	814,820		8,197,089
Viacom, Inc. (Class B Stock)(a)	137,168		2,614,422
Walt Disney Co. (The)	428,201		9,715,881
Washington Post Co. (The) (Class B Stock)	1,200		468,300
			46,072,212
Metals & Mining — 0.8%
AK Steel Holding Corp	23,900		222,748
Alcoa, Inc.(b)	189,476		2,133,500
Allegheny Technologies, Inc.	23,240		593,317
Freeport-McMoRan Copper & Gold, Inc.	88,006		2,150,867
Newmont Mining Corp.	106,103		4,318,392
Nucor Corp.	72,800		3,363,360
Titanium Metals Corp.(b)	8,000		70,480
United States Steel Corp.(b)	27,740		1,031,928
			13,884,592
Multiline Retail — 0.7%
Big Lots, Inc.(a)(b)	16,900		244,881
Family Dollar Stores, Inc.	34,400		896,808
J.C. Penney Co., Inc.	48,000		945,600
Kohl’s Corp.(a)	63,200		2,287,840
Macy’s, Inc.(b)	91,720		949,302
Nordstrom, Inc.(b)	36,500		485,815
Sears Holdings Corp.(a)(b)	12,312		478,567
Target Corp.(b)	170,268		5,879,354
			12,168,167
Multi-Utilities — 1.4%
Ameren Corp.	48,500		1,613,110
CenterPoint Energy, Inc.	79,010		997,106
CMS Energy Corp.(b)	58,500		591,435
Consolidated Edison, Inc.	62,800		2,444,804
Dominion Resources, Inc.	132,584		4,751,811
DTE Energy Co.	36,900		1,316,223
Integrys Energy Group, Inc.	17,750		762,895
NiSource, Inc.	65,900		722,923
PG&E Corp.	79,600		3,081,316
Public Service Enterprise Group, Inc.	112,900		3,293,293
Sempra Energy	54,454		2,321,374
TECO Energy, Inc.	42,100		519,935
Wisconsin Energy Corp.	24,500		1,028,510
Xcel Energy, Inc.	101,295		1,879,022
			25,323,757

COMMON STOCKS (continued)	Shares	Value (Note 2)
Office Electronics — 0.1%
Xerox Corp.	220,692	$	1,758,915
Oil, Gas & Consumable Fuels — 11.5%
Anadarko Petroleum Corp.	105,626		4,071,882
Apache Corp.	75,250		5,608,383
Cabot Oil & Gas Corporation	19,000		494,000
Chesapeake Energy Corp.	114,900		1,857,933
Chevron Corp.	459,692		34,003,416
ConocoPhillips	341,379		17,683,432
Consol Energy, Inc.	42,700		1,220,366
Devon Energy Corp.	100,200		6,584,142
El Paso Corp.(b)	158,811		1,243,490
EOG Resources, Inc.	56,900		3,788,402
Exxon Mobil Corp.	1,152,270		91,985,713
Hess Corp.	63,800		3,422,232
Marathon Oil Corp.	158,194		4,328,188
Massey Energy Co.	17,500		241,325
Murphy Oil Corp.	44,600		1,978,010
Noble Energy, Inc.	36,900		1,816,218
Occidental Petroleum Corp.	181,400		10,882,186
Peabody Energy Corp.	60,700		1,380,925
Pioneer Natural Resources Co.	27,100		438,478
Range Resources Corp.	32,200		1,107,358
Southwestern Energy Co.(a)	78,100		2,262,557
Spectra Energy Corp.	142,142		2,237,315
Sunoco, Inc.(b)	27,000		1,173,420
Tesoro Petroleum Corporation	29,500		388,515
Valero Energy Corp.	120,900		2,616,276
Williams Cos., Inc.	131,900		1,909,912
XTO Energy, Inc.	123,600		4,359,372
			209,083,446
Paper & Forest Products — 0.2%
International Paper Co.	96,267		1,135,951
MeadWestvaco Corp.	42,489		475,452
Weyerhaeuser Co.	45,400		1,389,694
			3,001,097
Personal Products — 0.2%
Avon Products, Inc.	95,900		2,304,477
Estee Lauder Cos., Inc. (The) (Class A Stock)(b)	21,000		650,160
			2,954,637
Pharmaceuticals — 7.8%
Abbott Laboratories	348,900		18,620,793
Allergan, Inc.	68,800		2,774,016
Bristol-Myers Squibb Co.	447,460		10,403,445
Eli Lilly & Co.	229,200		9,229,884
Forest Laboratories, Inc.(a)	71,400		1,818,558
Johnson & Johnson	630,171		37,703,130
King Pharmaceuticals, Inc.(a)	70,733		751,184
Merck & Co., Inc.	484,700		14,734,880
Mylan, Inc.(a)(b)	62,500		618,125
Pfizer, Inc.(b)	1,533,708		27,161,968
Schering-Plough Corp.	364,600		6,209,138
Teva Pharmaceutical Industries Ltd., ADR (Israel)(a)	1		39

SEE NOTES TO FINANCIAL STATEMENTS.

A110

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Pharmaceuticals (continued)
Watson Pharmaceuticals, Inc.(a)(b)	25,900	$	688,163
Wyeth	304,900		11,436,799
			142,150,122
Professional Services — 0.1%
Equifax, Inc.	31,100		824,772
Robert Half International, Inc.(b)	32,500		676,650
Monster Worldwide, Inc.(a)(b)	25,200		304,668
Dun & Bradstreet Corp	10,200		787,440
			2,593,530
Real Estate Investment Trusts — 0.9%
Apartment Investment & Management Co. (Class A Stock)	25,487		294,375
AvalonBay Communities, Inc.	16,400		993,512
Boston Properties, Inc.(b)	27,600		1,518,000
Developers Diversified Realty Corp.(b)	26,400		128,832
Equity Residential Properties Trust	57,500		1,714,650
HCP, Inc.(b)	57,000		1,582,890
Host Hotels & Resorts, Inc.(b)	129,000		976,530
Kimco Realty Corp.(b)	55,700		1,018,196
Plum Creek Timber Co., Inc.(b)	35,000		1,215,900
ProLogis(b)	63,000		875,070
Public Storage, Inc.	27,300		2,170,350
Simon Property Group, Inc.(b)	51,800		2,752,134
Vornado Realty Trust	31,000		1,870,850
			17,111,289
Real Estate Management & Development
CB Richard Ellis Group, Inc., (Class A Stock)(a)	51,100		220,752
Road & Rail — 1.0%
Burlington Northern Santa Fe Corp.(b)	63,026		4,771,698
CSX Corp.	85,024		2,760,729
Norfolk Southern Corp.(b)	87,100		4,098,055
Ryder System, Inc.	12,800		496,384
Union Pacific Corp.(b)	116,200		5,554,360
			17,681,226
Semiconductors & Semiconductor Equipment — 2.1%
Advanced Micro Devices, Inc.(a)(b)	106,900		230,904
Altera Corp.(b)	68,300		1,141,293
Analog Devices, Inc.	66,900		1,272,438
Applied Materials, Inc.	291,500		2,952,895
Broadcom Corp., (Class A Stock)(a)	104,550		1,774,214
Intel Corp.(b)	1,269,400		18,609,404
KLA-Tencor Corp.(b)	33,400		727,786
Linear Technology Corp.(b)	48,700		1,077,244
LSI Corp.(a)	156,900		516,201
MEMC Electronic Materials, Inc.(a)	46,700		666,876
Microchip Technology, Inc.(b)	38,900		759,717
Micron Technology, Inc.(a)(b)	154,900		408,936
National Semiconductor Corp.	48,900		492,423

COMMON STOCKS (continued)	Shares	Value (Note 2)
Semiconductors & Semiconductor Equipment (continued)
Novellus Systems, Inc.(a)	22,400	$	276,416
NVIDIA Corp.(a)	109,850		886,490
Teradyne, Inc.(a)	24,000		101,280
Texas Instruments, Inc.	303,000		4,702,560
Xilinx, Inc.	64,200		1,144,044
			37,741,121
Software — 3.6%
Adobe Systems, Inc.(a)	121,400		2,584,606
Autodesk, Inc.(a)	48,200		947,130
BMC Software, Inc.(a)	44,400		1,194,804
CA, Inc.	85,873		1,591,227
Citrix Systems, Inc.(a)	41,900		987,583
Compuware Corp.(a)	71,300		481,275
Electronic Arts, Inc.(a)	63,700		1,021,748
Intuit, Inc.(a)(b)	72,900		1,734,291
Mcafee INC.(a)	28,500		985,245
Microsoft Corp.	1,743,400		33,891,695
Novell, Inc.(a)	73,100		284,359
Oracle Corp.(a)	877,820		15,563,749
Salesforce.com Inc.(a)(b)	18,600		595,386
Symantec Corp.(a)	203,011		2,744,709
			64,607,807
Specialty Retail — 1.7%
Abercrombie & Fitch Co. (Class A Stock)(b)	15,500		357,585
AutoNation, Inc.(a)(b)	35,789		353,595
AutoZone, Inc.(a)	8,700		1,213,389
Bed Bath & Beyond, Inc.(a)(b)	55,900		1,420,978
Best Buy Co., Inc.	74,225		2,086,465
GameStop Corp. (Class A Stock)(a)(b)	37,000		801,420
Gap, Inc. (The)	110,587		1,480,760
Home Depot, Inc.	377,919		8,699,695
Limited Brands, Inc.	64,396		646,536
Lowe’s Cos., Inc.	326,300		7,021,976
Office Depot, Inc.(a)	30,000		89,400
RadioShack Corp.	31,760		379,214
Sherwin-Williams Co. (The)(b)	21,600		1,290,600
Staples, Inc.(b)	149,900		2,686,208
Tiffany & Co.	22,300		526,949
TJX Cos., Inc.(b)	95,500		1,964,435
			31,019,205
Textiles, Apparel & Luxury Goods — 0.4%
Coach, Inc.(a)	84,200		1,748,834
Jones Apparel Group, Inc.	28,000		164,080
NIKE, Inc., (Class B Stock).(b)	85,800		4,375,800
Polo Ralph Lauren Corp.	13,200		599,412
V.F. Corp.	20,136		1,102,849
			7,990,975
Thrifts & Mortgage Finance — 0.2%
Hudson City Bancorp, Inc.	123,500		1,971,060
People’s United Financial Inc	74,300		1,324,769
Sovereign Bancorp, Inc.	113,405		337,947
			3,633,776

SEE NOTES TO FINANCIAL STATEMENTS.

A111

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Tobacco — 1.8%
Altria Group, Inc.	477,100	$	7,185,126
Lorillard Inc.	39,331		2,216,302
Philip Morris International, Inc.	457,800		19,918,878
Reynolds American, Inc.	43,400		1,749,454
UST, Inc.(b)	32,400		2,247,912
			33,317,672
Trading Companies & Distributors — 0.1%
Fastenal Co.(b)	29,200		1,017,620
W.W. Grainger, Inc.	14,800		1,166,832
			2,184,452
Wireless Telecommunication Services — 0.2%
American Tower Corp. (Class A Stock)(a)	84,200		2,468,744
Sprint Nextel Corp.(b)	667,322		1,221,199
			3,689,943
TOTAL LONG-TERM INVESTMENTS (cost $1,466,421,113)
			1,777,681,191
SHORT-TERM INVESTMENTS — 15.7%
Affiliated Money Market Mutual Fund — 15.5%
Dryden Core Investment Fund —Taxable Money Market Series (cost $280,621,328; includes $251,874,485 of cash collateral received for securities on loan) (Note 4)(c)(f) (cost $280,621,328)	280,621,328		280,621,328

SHORT-TERM INVESTMENTS (continued)	Principal Amount (000)		Value (Note 2)
U.S. Government Obligations(d)(e) — 0.2%
United States Treasury Bill 6/11/2009	$	4,300	$	4,297,476
United States Treasury Bill 3/19/2009		250		249,975
TOTAL U.S. TREASURY OBLIGATIONS (cost $4,548,573)				4,547,451
TOTAL SHORT-TERM INVESTMENTS (cost $285,169,901)				285,168,779
TOTAL INVESTMENTS — 113.6% (cost $1,751,591,014)				2,062,849,970
LIABILITIES IN EXCESS OF OTHER ASSETS — (13.6)%				(247,052,555	)
NET ASSETS — 100.0%			$	1,815,797,415

(a) Non income-producing security.

(b) All or portion of security is on loan. The aggregate market value of such securities is $245,048,950 cash collateral of $ 251,874,485 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.

(d) Security segregated as collateral for futures contracts.

(e) Rate quoted represents yield-to-maturity at purchase date.

(f) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund – Taxable Money Market Series.

Open futures contract outstanding at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at December 31, 2008		Value at Trade Date		Unrealized Appreciation
Long Position:
167	S&P 500 Index	March 2009	$	37,579,176	$	37,019,169	$	560,007

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	2,058,302,519	$	560,007
Level 2—Other Significant Observable Inputs		4,547,451		—
Level 3—Significant Unobservable Inputs		—		—
Total	$	2,062,849,970	$	560,007

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the valuation of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A112

STOCK INDEX PORTFOLIO (continued)

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (including 13.5% of collateral received for securities on loan)	15.5	%
Oil, Gas & Consumable Fuels	11.5
Pharmaceuticals	7.8
Computers & Peripherals	4.2
Diversified Telecommunication Services	3.6
Software	3.6
Diversified Financial Services	3.3
Food & Staples Retailing	3.2
Commercial Banks	3.1
Household Products	3.1
Aerospace/Defense	2.8
Industrial Conglomerates	2.8
Beverages	2.5
Insurance	2.5
Media	2.5
Capital Markets	2.4
Communications Equipment	2.4
Electric Utilities	2.4
Healthcare Equipment & Supplies	2.2
Biotechnology	2.1
Healthcare Providers & Services	2.1
Semiconductors & Semiconductor Equipment	2.1
Food Products	1.8
Tobacco	1.8
Chemicals	1.7
Specialty Retail	1.7
Machinery	1.6
Energy Equipment & Services	1.5
Hotels, Restaurants & Leisure	1.5
Internet Software & Services	1.4
Multi-Utilities	1.4
Air Freight & Logistics	1.2
Road & Rail	1.0

IT Services	0.9	%
Real Estate Investment Trusts	0.9
Metals & Mining	0.8
Multiline Retail	0.7
Commercial Services & Supplies	0.5
Consumer Finance	0.5
Electrical Equipment	0.5
Household Durables	0.4
Textiles, Apparel & Luxury Goods	0.4
Electronic Equipment & Instruments	0.3
Life Sciences, Tools & Services	0.3
Auto Components	0.2
Construction & Engineering	0.2
Containers & Packaging	0.2
Diversified Consumer Services	0.2
Internet & Catalog Retail	0.2
Paper & Forest Products	0.2
Personal Products	0.2
Thrifts & Mortgage Finance	0.2
U.S. Government Obligations	0.2
Wireless Telecommunication Services	0.2
Airlines	0.1
Automobiles	0.1
Building Products	0.1
Construction Materials	0.1
Distributors	0.1
Gas Utilities	0.1
Independent Power Producers & Energy Traders	0.1
Leisure Equipment & Products	0.1
Office Electronics	0.1
Professional Services	0.1
Trading Companies & Distributors	0.1
	113.6
Liabilities in excess of other assets	(13.6	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A113

STOCK INDEX PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $245,048,950:
Unaffiliated investments (cost $1,470,969,686)	$	1,782,228,642
Affiliated investments (cost $280,621,328)		280,621,328
Dividends receivable		4,322,800
Receivable for investments sold		2,692,243
Due from broker-variation margin		496,825
Prepaid expenses		32,384
Receivable for Series shares sold		24,968
Total Assets		2,070,419,190
LIABILITIES
Collateral for securities on loan		251,874,485
Payable for Series shares repurchased		919,436
Payable for investments purchased		911,958
Management fee payable		524,672
Accrued expenses		273,025
Payable to custodian		117,477
Affiliated transfer agent fee payable		722
Total Liabilities		254,621,775
NET ASSETS	$	1,815,797,415
Net assets were comprised of:
Paid-in capital	$	1,541,029,019
Retained earnings		274,768,396
Net assets, December 31, 2008	$	1,815,797,415
Net asset value and redemption price per share, $1,815,797,415 / 79,762,788 outstanding shares of beneficial interest	$	22.76

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $1,491)	$	57,169,351
Affiliated income from securities loaned, net		2,547,481
Affiliated dividend income		1,151,120
Interest		41,086
		60,909,038
EXPENSES
Management fee		8,836,203
Custodian’s fees and expenses		268,000
Shareholders’ reports		50,000
Trustees’ fees		45,000
Insurance expenses		36,000
Legal fees and expenses		18,000
Audit fee		17,000
Commitment fee on syndicated credit agreement		12,000
Transfer agent’s fee and expenses (including affiliated expense of $3,400) (Note 4)		4,000
Miscellaneous		18,504
Total expenses		9,304,707
NET INVESTMENT INCOME		51,604,331
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on:
Investment transactions		(7,230,635	)
Futures transactions		(21,544,516	)
		(28,775,151	)
Net change in unrealized appreciation (depreciation) on:
Investments		(1,123,576,060	)
Futures		34,957
		(1,123,541,103	)
NET LOSS ON INVESTMENTS		(1,152,316,254	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(1,100,711,923	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	51,604,331		$	56,959,943
Net realized gain (loss) on investment transactions		(28,775,151	)		76,759,365
Net change in unrealized appreciation (depreciation) on investments		(1,123,541,103	)		34,602,331
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(1,100,711,923	)		168,321,639
DISTRIBUTIONS		(56,959,943	)		(51,529,141	)
SERIES SHARE TRANSACTIONS:
Series shares sold [2,142,562 and 1,884,280 shares, respectively]		63,864,986			70,200,353
Series shares issued in reinvestment of distributions [1,689,203 and 1,400,248 shares, respectively]		56,959,943			51,529,141
Series shares repurchased [8,835,363 and 11,303,103 shares, respectively]		(269,751,865	)		(422,534,751	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(148,926,936	)		(300,805,257	)
TOTAL DECREASE IN NET ASSETS		(1,306,598,802	)		(184,012,759	)
NET ASSETS:
Beginning of year		3,122,396,217			3,306,408,976
End of year	$	1,815,797,415		$	3,122,396,217

SEE NOTES TO FINANCIAL STATEMENTS.

A114

	VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 95.7%
COMMON STOCKS — 94.1%	Shares	Value (Note 2)
Auto Components — 0.6%
Goodyear Tire & Rubber Co. (The)(a)(b)	943,400	$	5,632,098
Capital Markets — 6.7%
Bank of New York Mellon Corp. (The)	640,895		18,156,555
Goldman Sachs Group, Inc. (The)	239,700		20,228,283
Morgan Stanley(b)	859,300		13,783,172
TD Ameritrade Holding Corp.(a)	711,100		10,133,175
			62,301,185
Commercial Banks — 0.4%
SunTrust Banks, Inc.	127,700		3,772,258
Commercial Services & Supplies — 2.4%
Waste Management, Inc.	687,600		22,787,064
Communications Equipment — 1.1%
QUALCOMM, Inc.	276,800		9,917,744
Consumer Finance — 1.5%
SLM Corp.(a)(b)	1,601,900		14,256,910
Diversified Consumer Services — 4.2%
Career Education Corp.(a)(b)	711,800		12,769,692
H&R Block, Inc.	1,153,700		26,212,064
			38,981,756
Diversified Financial Services — 0.8%
JPMorgan Chase & Co.	231,200		7,289,736
Electric Utilities — 1.6%
Entergy Corp.	177,400		14,747,262
Energy Equipment & Services — 1.1%
National Oilwell Varco, Inc.(a)	404,500		9,885,980
Food & Staples Retailing — 6.7%
CVS Caremark Corp.	800,900		23,017,866
Kroger Co. (The)	765,600		20,219,496
Wal-Mart Stores, Inc.	340,500		19,088,430
			62,325,792
Food Products — 6.3%
Cadbury PLC, ADR (United Kingdom)	557,272		19,877,892
ConAgra Foods, Inc.	1,158,800		19,120,200
Tyson Foods, Inc. (Class A Stock)	2,322,100		20,341,596
			59,339,688
Healthcare Providers & Services — 4.8%
Aetna, Inc.	571,300		16,282,050
Omnicare, Inc.(b)	692,000		19,209,920
UnitedHealth Group, Inc.	346,600		9,219,560
			44,711,530
Household Products — 1.9%
Kimberly-Clark Corp.	344,300		18,158,382
Independent Power Producers & Energy Traders — 2.4%
NRG Energy, Inc.(a)(b)	982,900		22,931,057
Insurance — 5.7%
Allstate Corp. (The)	340,600		11,158,056
Axis Capital Holdings Ltd.	444,000		12,929,280

COMMON STOCKS (continued)	Shares	Value (Note 2)
Insurance (continued)
Berkshire Hathaway, Inc. (Class B Stock)(a)	3,064	$	9,847,696
Loews Corp.	469,900		13,274,675
XL Capital Ltd. (Class A Stock)(Bermuda)	1,767,773		6,540,760
			53,750,467
Internet & Catalog Retail — 1.4%
HSN, Inc.(a)	402,280		2,924,576
Ticketmaster Entertainment, Inc.(a)	1,524,640		9,788,188
			12,712,764
Internet Software & Services — 2.9%
IAC/InterActiveCorp.(a)(b)	1,709,200		26,885,716
Media — 6.3%
Comcast Corp. (Class A Stock)	1,707,200		28,817,536
Discovery Communications, Inc. (Class A Stock)(a)	667,000		9,444,720
Liberty Global, Inc. (Class C Stock)(a)(b)	1,193,735		18,120,897
Sirius XM Radio, Inc.(a)(b)	20,337,100		2,440,452
			58,823,605
Multi-Utilities — 2.2%
Sempra Energy	475,000		20,249,250
Office Electronics — 1.4%
Xerox Corp.	1,621,500		12,923,355
Oil, Gas & Consumable Fuels — 13.7%
Apache Corp.	122,500		9,129,925
Devon Energy Corp.	243,000		15,967,530
EOG Resources, Inc.	217,500		14,481,150
Hess Corp.	171,600		9,204,624
Occidental Petroleum Corp.	314,800		18,884,852
Petroleo Brasileiro SA, ADR (Brazil)	392,700		9,617,223
Suncor Energy, Inc.(b)	445,600		8,689,200
Trident Resources Corp. (Canada), Private Placement(a)(f)(g) (original cost $16,980,633; purchased 3/11/05-1/05/06)	404,537		1,720,388
Williams Cos., Inc.	1,209,500		17,513,560
XTO Energy, Inc.	649,500		22,907,865
			128,116,317
Paper & Forest Products — 0.6%
Domtar Corp.(a)	3,239,600		5,410,132
Pharmaceuticals — 5.3%
Mylan, Inc.(a)(b)	1,198,800		11,856,132
Schering-Plough Corp.	1,163,600		19,816,108
Wyeth	489,500		18,361,145
			50,033,385
Semiconductors & Semiconductor Equipment — 1.3%
Marvell Technology Group Ltd.(a)	1,721,700		11,483,739
Spansion, Inc. (Class A Stock)(a)	3,307,200		626,053
			12,109,792

SEE NOTES TO FINANCIAL STATEMENTS.

A115

	VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Software — 7.3%
CA, Inc.(b)	1,555,000	$	28,814,150
Microsoft Corp.	566,500		11,012,760
Symantec Corp.(a)	2,140,700		28,942,264
			68,769,174
Thrifts & Mortgage Finance — 1.0%
People’s United Financial, Inc.	517,060		9,219,180
Wireless Telecommunication Services — 2.5%
NII Holdings, Inc.(a)	947,100		17,218,278
Sprint Nextel Corp.	2,403,236		4,397,922
Virgin Mobile USA, Inc. (Class A Stock)(a)(b)	2,181,000		1,832,040
			23,448,240
TOTAL COMMON STOCKS (cost $1,215,162,296)			879,489,819
CONVERTIBLE PREFERRED STOCKS(a) — 1.2%
Consumer Finance — 0.4%
SLM Corp.	9,540		4,391,978
Pharmaceuticals — 0.8%
Mylan, Inc.	11,040		7,275,691
TOTAL CONVERTIBLE PREFERRED STOCKS (cost $10,782,770)			11,667,669
	Principal Amount (000)
CORPORATE BOND — 0.4%
Oil, Gas & Consumable Fuels
Trident Resources Corp. (Canada), Private Placement, PIK, 7.9712%, due 8/12/12(f)(g) (original cost $11,640,318; purchased 8/20/07-12/29/08)	CAD  12,250		3,349,256
	Units
WARRANT
Oil, Gas & Consumable Fuels
Trident Resources Corp. (Canada), Private Placement, expiring 1/01/15(a)(f)(g) (original cost $0; purchased 8/20/07)	1,043,852		85
TOTAL LONG -TERM INVESTMENTS (cost $1,237,585,384)			894,506,829

SHORT-TERM INVESTMENT — 17.2%
	Shares	Value (Note 2)
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $160,600,574; includes $124,170,983 of cash collateral for securities on loan) (Note 4)(c)(d)	160,600,574	$	160,600,574
TOTAL INVESTMENTS(e) — 112.9% (cost $1,398,185,958)			1,055,107,403
LIABILITIES IN EXCESS OF OTHER ASSETS — (12.9)%			(120,336,763	)
NET ASSETS — 100.0%		$	934,770,640

The following abbreviations are used in portfolio descriptions:

ADR	American Depositary Receipt
CAD	Canadian Dollar
PIK	Payment in Kind

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $104,916,950; cash collateral of $124,170,983 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the Manager of the Portfolio, also serves as Manager of the Dryden Core Investment Fund – Taxable Money Market Series.

(e) As of December 31, 2008, three securities valued at $5,069,729 and representing 0.5% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(f) Indicates an illiquid security.

(g) Indicates a security restricted to resale. The aggregate cost of such securities was $28,620,951. The aggregate value of $5,069,729 is approximately 0.5% of net assets.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

SEE NOTES TO FINANCIAL STATEMENTS.

A116

	VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	1,050,037,674	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		5,069,729	—
Total	$	1,055,107,403	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	31,877,059
Realized gain (loss)		(18,065,534	)
Change in unrealized appreciation (depreciation)		(5,206,967	)
Net purchases (sales)		(3,534,829	)
Transfers in and/or out of Level 3		—
Balance as of 12/31/08	$	5,069,729

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follows:

Affiliated Money Market Mutual Fund (including 13.3% of collateral received for securities on loan)	17.2	%
Oil, Gas & Consumable Fuels	14.1
Software	7.3
Capital Markets	6.7
Food & Staples Retailing	6.7
Food Products	6.3
Media	6.3
Pharmaceuticals	6.1
Insurance	5.7
Healthcare Providers & Services	4.8
Diversified Consumer Services	4.2
Internet Software & Services	2.9
Wireless Telecommunication Services	2.5
Commercial Services & Supplies	2.4
Independent Power Producers & Energy Traders	2.4
Multi-Utilities	2.2
Consumer Finance	1.9
Household Products	1.9
Electric Utilities	1.6
Internet & Catalog Retail	1.4
Office Electronics	1.4
Semiconductors & Semiconductor Equipment	1.3
Communications Equipment	1.1
Energy Equipment & Services	1.1
Thrifts & Mortgage Finance	1.0
Diversified Financial Services	0.8
Auto Components	0.6
Paper & Forest Products	0.6
Commercial Banks	0.4
	112.9
Liabilities in excess of other assets	(12.9	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A117

VALUE PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $104,916,950:
Unaffiliated investments (cost $1,237,585,384)	$	894,506,829
Affiliated investments (cost $160,600,574)		160,600,574
Cash		518,463
Foreign currency, at value (cost $8)		8
Receivable for investments sold		2,423,907
Dividends and interest receivable		1,508,942
Foreign tax reclaim receivable		261,649
Prepaid expenses		19,496
Receivable for Series shares sold		4,795
Total Assets		1,059,844,663
LIABILITIES
Collateral for securities on loan		124,170,983
Payable for Series shares repurchased		420,276
Management fee payable		302,680
Accrued expenses and other liabilities		178,374
Affiliated transfer agent fee payable		1,166
Distribution fee payable		340
Administration fee payable		204
Total Liabilities		125,074,023
NET ASSETS	$	934,770,640
Net assets were comprised of:
Paid-in capital	$	1,489,740,394
Retained earnings		(554,969,754	)
Net assets, December 31, 2008	$	934,770,640
Class I:
Net asset value and redemption price per share, $933,063,706 / 85,888,673 outstanding shares of beneficial interest	$	10.86
Class II:
Net asset value and redemption price per share, $1,706,934 / 156,481 outstanding shares of beneficial interest	$	10.91

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $178,187)	$	23,477,278
Affiliated income from securities loaned, net		1,565,040
Interest		1,333,979
Affiliated dividend income		796,666
		27,172,963
EXPENSES
Management fee		5,732,527
Distribution fee—Class II		5,523
Administration fee—Class II		3,314
Shareholders’ reports		165,000
Custodian’s fees and expenses		152,000
Trustees’ fees		29,000
Insurance expenses		22,000
Audit fee		17,000
Legal fees and expenses		12,000
Interest expense (Note 8)		11,019
Transfer agent’s fee and expenses (including affiliated expense of $6,700) (Note 4)		7,000
Commitment fee on syndicated credit agreement		4,000
Miscellaneous		30,351
Total expenses		6,190,734
NET INVESTMENT INCOME		20,982,229
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(205,279,699	)
Foreign currency transactions		(142,035	)
		(205,421,734	)
Net change in unrealized appreciation (depreciation) on:
Investments		(533,239,551	)
Foreign currencies		(79	)
		(533,239,630	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(738,661,364	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(717,679,135	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net investment income	$	20,982,229		$	26,611,582
Net realized gain (loss) on investment and foreign currency transactions		(205,421,734	)		305,443,018
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(533,239,630	)		(265,627,465	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(717,679,135	)		66,427,135
DISTRIBUTIONS:
Class I		(331,218,021	)		(242,165,135	)
Class II		(495,826	)		(373,906	)
TOTAL DISTRIBUTIONS		(331,713,847	)		(242,539,041	)
SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold [1,045,728 and 1,101,337 shares, respectively]		17,037,608			29,566,166
Series shares issued in reinvestment of distributions [18,008,178 and 10,431,739 shares, respectively]		331,713,847			242,539,041
Series shares repurchased [10,971,164 and 9,083,303 shares, respectively]		(192,551,116	)		(246,981,367	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		156,200,339			25,123,840
TOTAL DECREASE IN NET ASSETS		(893,192,643	)		(150,988,066	)
NET ASSETS:
Beginning of year		1,827,963,283			1,978,951,349
End of year	$	934,770,640		$	1,827,963,283

SEE NOTES TO FINANCIAL STATEMENTS.

A118

NOTES TO THE FINANCIAL STATEMENTS OF

THE PRUDENTIAL SERIES FUND

Note 1: General

The Prudential Series Fund (“Series Fund”), organized as a Delaware statutory trust, is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended. On January 2, 2006, each Portfolio of the Series Fund changed its federal income tax status from a regulated investment company to a partnership. As a result of that conversion, the Series Fund was reorganized from a Maryland corporation to a Delaware statutory trust. Pursuant to this reorganization, the Series Fund has been renamed “The Prudential Series Fund.” The Series Fund is composed of twenty-eight Portfolios (“Portfolio” or “Portfolios”), each with separate series shares. The information presented in these financial statements pertains to thirteen Portfolios: Conservative Balanced Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed Portfolio, Global Portfolio, Government Income Portfolio, High Yield Bond Portfolio, Jennison Portfolio, Money Market Portfolio, Natural Resources Portfolio, Small Capitalization Stock Portfolio, Stock Index Portfolio and Value Portfolio.

The Portfolios of the Series Fund have the following as investment objectives:

Conservative Balanced Portfolio:    Total investment return consistent with a conservatively managed diversified portfolio by investing in a mix of equity-related securities, debt obligations and money market instruments.

Diversified Bond Portfolio:    High level of income over a longer term while providing reasonable safety of capital by investing in intermediate and long-term debt obligations that are rated investment grade and high quality money market instruments. The types of debt obligations in which the Portfolio can invest include U.S. government securities, mortgage-related securities and corporate bonds.

Equity Portfolio:    Capital appreciation by investing primarily in stocks of major, established corporations as well as small companies.

Flexible Managed Portfolio:    High total return consistent with an aggressively managed diversified portfolio by investing in a mix of equity and equity-related securities, debt obligations and money market instruments.

Global Portfolio:    Long-term growth of capital by investing primarily in equity and equity-related securities of foreign and U.S. companies.

Government Income Portfolio:    High level of income over the long-term consistent with the preservation of capital by investing primarily in intermediate and long-term U.S. government securities, including U.S. treasuries, government agency and mortgage-related securities.

High Yield Bond Portfolio:    High total return by investing primarily in medium to lower rated debt securities.

Jennison Portfolio:    Long-term growth of capital by investing primarily in equity securities of established companies that the Portfolio manager believes offer above-average growth prospects.

Money Market Portfolio:    Maximum current income consistent with the stability of capital and maintenance of liquidity by investing in high quality short-term money market securities issued by the U.S. government and its agencies, as well as commercial paper, asset backed securities, certificates of deposit and other obligations issued by banks, corporations and other companies, that generally mature in 13 months or less.

Natural Resources Portfolio:    Long-term growth of capital by investing primarily in stocks of companies that operate within, or do business with, the natural resources sector of the economy.

Small Capitalization Stock Portfolio:    Long-term growth of capital that corresponds to the price and yield performance of the Standard & Poor’s Small Capitalization Stock Index (the “S&P 600 SmallCap Index”) by investing primarily in stocks of the S&P 600 SmallCap Index.

Stock Index Portfolio:    Investment results that generally correspond to the price and yield performance of the S&P 500 Index by investing primarily in stocks in the S&P 500 Index.

Value Portfolio:    Capital appreciation by investing in equity and equity-related securities that are considered to be undervalued.

B1

The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government) held by the Portfolios to meet their obligations may be affected by the economic or political developments in a specific industry, region or country.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.

Note 2: Accounting Policies

The following is a summary of significant accounting policies followed by the Series Fund and the Portfolios in preparation of their financial statements.

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the official closing price provided by NASDAQ. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisors, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange, or at the last bid price in the absence of an asked price. Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Series Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees approved fair valuation procedures. When determining the fair value of securities, some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment advisor 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 mutual funds to calculate their net asset values.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

The Money Market Portfolio values all of its securities at amortized cost. The Conservative Balanced and Flexible Managed Portfolios use amortized cost to value their short-term debt securities. Short-term debt securities that are held in the other Portfolios which mature in more than 60 days are valued at current market quotations and those short-term debt securities which mature in 60 days or less are valued at amortized cost which approximates market value. The amortized cost method involves valuing a security at its cost at the time of purchase and thereafter assumes a constant amortization to maturity of any discount or premium.

The Diversified Bond, High Yield Bond and Natural Resources Portfolios may hold up to 15% of their net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities, including private placements, are valued pursuant to the valuation procedures noted above.

Repurchase Agreements:    In connection with transactions in repurchase agreements with United States financial institutions, it is the Series Fund’s policy that its custodian or designated subcustodians, as the case

B2

may be, under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked to market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines, or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Series Fund may by delayed or limited.

Foreign Currency Translation:    The books and records of the Series Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i)  market value of investment securities, other assets and liabilities at the current daily rates of exchange.

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

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

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

Forward Currency Contracts:    A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Certain Portfolios of the Series Fund may enter into forward currency contracts in order to hedge their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in the assets and liabilities in the financial statements. 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 foreign currency transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Short Sales:    Certain Portfolios of the Series Fund may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When a Portfolio makes a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The Portfolio may have to pay a fee to borrow the particular security and may be obligated to remit any interest or dividends received on such borrowed securities. Dividends declared on short positions open are recorded on the ex-date and interest payable is accrued daily on fixed income securities sold short, both of which are recorded as an expense. A gain, limited to the price at which the Portfolio sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received.

Loan Participations:    The High Yield Bond and Money Market Portfolios may invest in loan participations. When the Portfolio purchases a loan participation, the Portfolio typically enters into a contractual relationship with the lender or third party selling such participations (“Selling Participant”), but not the borrower. As a result, the Portfolio assumes the credit risk of the borrower and any other persons interpositioned between the Portfolio and the borrower. The Portfolio may not directly benefit from the collateral supporting the senior loan in which it has purchased the loan participation.

B3

Options:    Certain Portfolios of the Series Fund may either purchase or write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates or currencies with respect to securities which the Portfolio currently owns or intends to purchase. The Portfolio’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 Portfolio purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Portfolio 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 Portfolio realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost basis of the purchase, in determining whether the Portfolio has realized a gain (loss). The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain (loss). Gains (losses) on purchased options are included in net realized gains (losses) on investment transactions. Gains (losses) on written options are presented separately as net realized gains (losses) on written option transactions.

The Portfolio, as writer of an option, may have no control over whether the contract may be exercised. As a result, the Portfolio bears the market risk of an unfavorable change in the price of the security underlying the written option. The Portfolio, as purchaser of an over-the-counter option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

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 Portfolio 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 Portfolio each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures transactions.

The Portfolio invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Portfolio intends to purchase, against fluctuations in value caused by changes in prevailing rates or market conditions. Under a variety of circumstances, the Portfolio 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 and the underlying hedged assets.

Swap Agreements:    The Portfolios may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. In connection with these agreements, securities may be identified as collateral 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 serve as a recourse in the event of default or bankruptcy/insolvency of either party.

Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period.

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

A Portfolio may use credit default swaps to provide a measure of protection against defaults of the issuers or to take an active long or short position with respect to the likelihood of a particular issuer’s default. A Portfolio may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect.

As a seller of protection on credit default swap agreements, a Portfolio will generally receive from the buyer of protection an agreed upon payment throughout the term of the swap provided that there is no credit event. As the seller, a Portfolio would effectively increase investment risk to its portfolio because, in addition to its total net assets, a Portfolio may be subject to investment exposure on the notional amount of the swap.

B4

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

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

Some Portfolios may enter into total return swaps to manage their exposure to a security, commodity or an index. In a total return swap, one party would receive payments based on the market value of the security or the commodity involved, or total return of a specific referenced asset, such as an equity, index or bond, and in return pay a fixed amount.

These swap agreements involve, to varying degrees, elements of credit risk, market risk and documentation risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates. The swaps are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments. Payments received or paid by the Portfolio are recorded as realized gains or losses upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed in the footnotes to the Schedule of Investments.

Forward currency contracts, written options, short sales, swaps and financial futures contracts may involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

Securities Lending:    Each Portfolio of the Series Fund may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Portfolio. Upon termination of the loan, the borrower will return to the Portfolio securities identical to the loaned securities. Should the borrower of the securities fail financially, the Portfolio has the right to repurchase the securities using the collateral in the open market. The Portfolio 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 Portfolio also continues to receive interest and dividends or amounts equivalent thereto on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

As a result of the bankruptcy filing by Lehman Brothers Holdings Inc., which was the parent company to the Portfolios’ Securities Lending Counter Party, Lehman Brothers Inc. (Lehman), the Portfolios’ Securities Lending Agent utilized collateral held on behalf of the Portfolios for securities out on loan to compensate the Portfolios for the failure of Lehman to return the securities. Any excess collateral was returned to Lehman.

Dollar Rolls:    Certain Portfolios of the Series Fund enter into mortgage dollar rolls in which the Portfolio sells mortgage securities for delivery in the current month, realizing a gain (loss), and simultaneously contracts to repurchase somewhat similar (same type, coupon and maturity) securities on a specified future date. During the roll period, the Portfolio forgoes principal and interest paid on the securities. The Portfolio is compensated by the interest earned on the cash proceeds of the initial sale and by the lower repurchase price at the future

B5

date. The difference between the sales proceeds and the lower repurchase price is recorded as a realized gain. The Portfolio maintains a segregated account, the dollar value of which is a least equal to its obligations, with respect to dollar rolls.

When-Issued/Delayed Delivery Securities:    Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Portfolio enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income, which is comprised of four elements: stated coupon, original issue discount, market discount and market premium, is recorded on the accrual basis. Expenses are recorded on the accrual basis. The Series Fund’s expenses are allocated to the respective Portfolios on the basis of relative net assets except for Portfolio specific expenses which are attributable directly to a Portfolio or class level.

For Portfolios with multiple classes of shares, net investment income (loss) (other than administration and distribution fees, which are charged to the respective class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Taxes:    For federal income tax purposes, each Portfolio in the Series Fund is treated as a separate taxpaying entity. The Portfolios are treated as partnerships for tax purposes. No provision has been made in the financial statements for U.S. federal, state, or local taxes, as any tax liability arising from operations of the Portfolios is the responsibility of their partners. The Portfolios are not generally subject to entity-level taxation. Partners of each Portfolio are subject to taxes on their distributive share of partnership items.

Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Series Fund’s understanding of the applicable country’s tax rules and regulations.

Distributions:    Distributions from each Portfolio are made in cash and automatically reinvested in additional shares of the same Portfolio. The Money Market Portfolio declares and reinvests distributions daily. The Diversified Bond, Government Income and High Yield Bond Portfolios make distributions, if any, quarterly. All other Portfolios’ distributions are generally made on an annual basis. Distributions are recorded on the ex-date.

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 these estimates.

Note 3: Agreements

The Series Fund has a management agreement with PI. Pursuant to this agreement PI has responsibility for all investment advisory services and supervises the subadvisors performance of such services. PI has entered into subadvisory agreements with Prudential Investment Management, Inc. (“PIM”), Jennison Associates LLC (“Jennison”), LSV Asset Management (“LSV”), Marsico Capital Management, LLC (“Marsico”), Quantitative Management Associates LLC (“QMA”), ClearBridge Advisors LLC (“ClearBridge”), T. Rowe Price Associates, Inc. (“T. Rowe”) and William Blair & Company, L.L.C. (“William Blair”) (collectively, the “Subadvisors”), under which each provides investment advisory services for certain Portfolios of the Series Fund. PI pays for the services of the Subadvisors, compensation of officers of the Series Fund, occupancy and certain clerical and administrative expenses of the Series Fund. The Portfolios bear all other costs and expenses.

B6

The management fee paid to PI is computed daily and payable monthly, at the annual rates specified below, of the value of each of the Portfolio’s average daily net assets.

Portfolio	Management Fee	Effective Management Fee
Conservative Balanced Portfolio	0.55%	0.55	%
Diversified Bond Portfolio	0.40	0.40
Equity Portfolio	0.45	0.45
Flexible Managed Portfolio	0.60	0.60
Global Portfolio	0.75	0.75
Government Income Portfolio	0.40	0.40
High Yield Bond Portfolio	0.55	0.55
Jennison Portfolio	0.60	0.60
Money Market Portfolio	0.40	0.40
Natural Resources Portfolio	0.45	0.45
Small Capitalization Stock Portfolio	0.40	0.40
Stock Index Portfolio	0.35% up to $4 billion 0.30% over $4 billion	0.35
Value Portfolio	0.40	0.40

At December 31, 2008, the Subadvisors that provide investment advisory services to the Portfolios are as follows. Where more than one Subadvisor is listed, each Subadvisor provides services to a segment of the Portfolio:

Portfolio	Subadvisor(s)
Conservative Balanced Portfolio	PIM, QMA
Diversified Bond Portfolio	PIM
Equity Portfolio	ClearBridge, Jennison
Flexible Managed Portfolio	PIM, QMA
Global Portfolio	LSV, Marsico, QMA, T. Rowe & William Blair
Government Income Portfolio	PIM
High Yield Bond Portfolio	PIM
Jennison Portfolio	Jennison
Money Market Portfolio	PIM
Natural Resources Portfolio	Jennison
Small Capitalization Stock Portfolio	QMA
Stock Index Portfolio	QMA
Value Portfolio	Jennison

The Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class I and Class II shares of the Series Fund. The Series Fund compensates PIMS for distributing and servicing the Series Fund’s Class II shares pursuant to a plan of distribution (the “Class II Plan”), 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 I shares of the Series Fund. Pursuant to the Class II Plan, the Class II shares of each Portfolio compensate PIMS for distribution-related activities at an annual rate of 0.25% of the average daily net assets of the Class II shares.

The Series Fund has an administration agreement with PI, which acts as the administrator of the Class II shares of the Series Fund. The administration fee paid to PI is accrued daily and payable monthly, at the annual rate of 0.15% of the average daily net assets of the Class II shares.

PI has agreed to reimburse each of the following Portfolios the portion of the management fee for that Portfolio equal to the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, and brokerage commissions) exceed the percentage stated below.

Portfolio	Class I Expense Limit		Class II Expense Limit
Government Income Portfolio	0.75	%	N/A
Stock Index Portfolio	0.75		N/A
Value Portfolio	0.75	*	1.15	%*

B7

N/A—Not applicable—There are no Class II shares outstanding for this Portfolio.

*  Effective July 1, 2008, the expense limitation was removed.

PIMS, PI, PIM, QMA and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 4: Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series 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.

PIM also serves as the Series Fund’s security lending agent. For the year ended December 31, 2008, PIM was compensated as follows for these services by the Series Fund Portfolios:

Portfolio	PIM
Conservative Balanced Portfolio	$	762,370
Diversified Bond Portfolio		224,842
Equity Portfolio		1,469,114
Flexible Managed Portfolio		974,060
Global Portfolio		280,180
Government Income Portfolio		133,190
High Yield Bond Portfolio		524,043
Jennison Portfolio		635,667
Natural Resources Portfolio		772,567
Small Capitalization Stock Portfolio		1,307,997
Stock Index Portfolio		1,092,434
Value Portfolio		668,162

For the year ended December 31, 2008, Wachovia Securities, LLC (“Wachovia”), an affiliate of PI, earned brokerage commissions from transactions executed on behalf of the Series Fund Portfolios as follows:

Portfolio	Wachovia
Value Portfolio	$	28,680

Certain Portfolios invest in the Short-Term Bond Series, pursuant to an exemptive order received from the Securities and Exchange Commission and in the Taxable Money Market Series, each a portfolio of the Dryden Core Investment Fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 5: Portfolio Securities

The aggregate cost of purchases and the proceeds from the sales of securities (excluding government securities and short-term issues) for the year ended December 31, 2008 were as follows:

Cost of Purchases:

Portfolio
Conservative Balanced Portfolio	$	5,942,568,925
Diversified Bond Portfolio		6,720,369,157
Equity Portfolio		2,399,413,777
Flexible Managed Portfolio		8,473,448,070
Global Portfolio		477,906,846
Government Income Portfolio		6,040,966,942
High Yield Bond Portfolio		938,594,664
Jennison Portfolio		1,240,532,846
Natural Resources Portfolio		573,934,032
Small Capitalization Stock Portfolio		146,225,578
Stock Index Portfolio		99,418,753
Value Portfolio		1,004,102,637

B8

Proceeds from Sales:

Portfolio
Conservative Balanced Portfolio	$	5,961,870,658
Diversified Bond Portfolio		6,728,811,349
Equity Portfolio		2,602,171,168
Flexible Managed Portfolio		8,516,295,674
Global Portfolio		511,509,388
Government Income Portfolio		6,054,312,877
High Yield Bond Portfolio		869,133,075
Jennison Portfolio		1,459,621,224
Natural Resources Portfolio		678,582,147
Small Capitalization Stock Portfolio		198,919,719
Stock Index Portfolio		257,258,949
Value Portfolio		1,140,740,339

Note 6: Tax Information

After January 2, 2006, all Portfolios are treated as partnerships for tax purposes. The character of the cash distributions made by the partnerships is generally classified as return of capital nontaxable distributions. After each fiscal year each partner will receive information regarding their distributive allocable share of the partnership’s income, gains, losses and deductions.

Prior to January 2, 2006, each Portfolio, which was incorporated as of that date, qualified as a regulated investment company under the Internal Revenue Code and distributed all of its taxable income, including any net realized gains on investments, to shareholders.

With respect to the Portfolios, book cost of assets differs from tax cost of assets as a result of each Portfolio’s adoption of a mark to market method of accounting for tax purposes. Under this method, tax cost of assets will approximate its fair market value.

Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2008, no provision for income tax would be required in the Portfolios’ financial statements. The Portfolios’ federal and state income 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.

Note 7: Capital

The Series Fund offers Class I and Class II shares. Neither Class I nor Class II shares of a Portfolio are subject to any sales charge or redemption charge and are sold at the net asset value of the Portfolio. Class I shares are sold only to certain separate accounts of Prudential to fund benefits under certain variable life insurance and variable annuity contracts (“contracts”). Class II shares are sold only to separate accounts of non-Prudential insurance companies as investment options under certain contracts. The separate accounts invest in shares of the Series Fund through subaccounts that correspond to the Portfolios. The separate accounts will redeem shares of the Series Fund to the extent necessary to provide benefits under the contracts or for such other purposes as may be consistent with the contracts. As of December 31, 2008, the Equity, Jennison, Natural Resources and Value Portfolios have Class II shares outstanding.

B9

Transactions in shares of beneficial interest of the Equity, Jennison, Natural Resources and Value Portfolios were as follows:

Equity Portfolio:
Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	1,436,949		$	31,146,917
Series shares issued in reinvestment of distributions	17,082,227			436,963,357
Series shares repurchased	(13,934,724	)		(328,218,745	)
Net increase (decrease) in shares outstanding	4,584,452		$	139,891,529
Year ended December 31, 2007:
Series shares sold	1,031,862		$	29,740,507
Series shares issued in reinvestment of distributions	1,691,265			49,976,890
Series shares repurchased	(14,024,490	)		(407,692,362	)
Net increase (decrease) in shares outstanding	(11,301,363	)	$	(327,974,965	)
Class II
Year ended December 31, 2008:
Series shares sold	3,868		$	88,780
Series shares issued in reinvestment of distributions	2,468			63,526
Series shares repurchased	(26,501	)		(699,940	)
Net increase (decrease) in shares outstanding	(20,165	)	$	(547,634	)
Year ended December 31, 2007:
Series shares sold	2,870		$	85,699
Series shares issued in reinvestment of distributions	322			9,549
Series shares repurchased	(29,757	)		(885,730	)
Net increase (decrease) in shares outstanding	(26,565	)	$	(790,482	)
Jennison Portfolio:
Class I
Year ended December 31, 2008:
Series shares sold	3,086,340		$	57,779,660
Series shares issued in reinvestment of distributions	390,007			8,646,458
Series shares repurchased	(14,586,269	)		(279,799,118	)
Net increase (decrease) in shares outstanding	(11,109,922	)	$	(213,373,000	)
Year ended December 31, 2007:
Series shares sold	3,875,996		$	87,806,461
Series shares issued in reinvestment of distributions	259,312			6,070,485
Series shares repurchased	(13,447,590	)		(300,176,044	)
Net increase (decrease) in shares outstanding	(9,312,282	)	$	(206,299,098	)
Class II
Year ended December 31, 2008:
Series shares sold	130,219		$	2,480,267
Series shares issued in reinvestment of distributions	528			11,569
Series shares repurchased	(233,004	)		(4,441,874	)
Net increase (decrease) in shares outstanding	(102,257	)	$	(1,950,038	)
Year ended December 31, 2007:
Series shares sold	157,366		$	3,468,229
Series shares repurchased	(155,537	)		(3,412,828	)
Net increase (decrease) in shares outstanding	1,829		$	55,401

B10

Natural Resources Portfolio:
Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	1,084,549		$	57,023,489
Series shares issued in reinvestment of distributions	3,318,624			195,367,433
Series shares repurchased	(5,486,770	)		(239,959,723	)
Net increase (decrease) in shares outstanding	(1,083,597	)	$	12,431,199
Year ended December 31, 2007:
Series shares sold	1,540,804		$	90,988,390
Series shares issued in reinvestment of distributions	5,021,348			269,445,554
Series shares repurchased	(3,014,255	)		(159,841,129	)
Net increase (decrease) in shares outstanding	3,547,897		$	200,592,815
Class II
Year ended December 31, 2008:
Series shares sold	1,405,872		$	64,916,745
Series shares issued in reinvestment of distributions	137,692			8,068,760
Series shares repurchased	(605,217	)		(28,359,416	)
Net increase (decrease) in shares outstanding	938,347		$	44,626,089
Year ended December 31, 2007:
Series shares sold	545,786		$	30,006,805
Series shares issued in reinvestment of distributions	142,454			7,597,067
Series shares repurchased	(202,397	)		(11,381,740	)
Net increase (decrease) in shares outstanding	485,843		$	26,222,132
Value Portfolio:
Class I
Year ended December 31, 2008:
Series shares sold	1,009,709		$	16,588,714
Series shares issued in reinvestment of distributions	17,981,434			331,218,021
Series shares repurchased	(10,948,900	)		(192,163,813	)
Net increase (decrease) in shares outstanding	8,042,243		$	155,642,922
Year ended December 31, 2007:
Series shares sold	1,095,975		$	29,415,525
Series shares issued in reinvestment of distributions	10,415,705			242,165,135
Series shares repurchased	(9,054,986	)		(246,234,280	)
Net increase (decrease) in shares outstanding	2,456,694		$	25,346,380
Class II
Year ended December 31, 2008:
Series shares sold	36,019		$	448,894
Series shares issued in reinvestment of distributions	26,744			495,826
Series shares repurchased	(22,264	)		(387,303	)
Net increase (decrease) in shares outstanding	40,499		$	557,417
Year ended December 31, 2007:
Series shares sold	5,362		$	150,641
Series shares issued in reinvestment of distributions	16,034			373,906
Series shares repurchased	(28,317	)		(747,087	)
Net increase (decrease) in shares outstanding	(6,921	)	$	(222,540	)

B11

Note 8: Borrowings and Overdrafts

The Portfolios (excluding the Money Market Portfolio), along with other affiliated registered investment companies (the “Funds”), are a party to a Syndicated Credit Agreement (“SCA”) with two banks. The SCA provides for a commitment of $500 million. Interest on any borrowings under the SCA is incurred at contracted market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. Effective October 24, 2008, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Funds pay a commitment fee of .13 of 1% of the unused portion of the renewed SCA. The expiration date of the renewed SCA will be October 23, 2009. For the period from October 26, 2007 through October 23, 2008, the Funds paid a commitment fee of .06 of 1% of the unused portion of the agreement. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions.

The following Portfolios utilized the line of credit during year ended December 31, 2008. The average balance outstanding is for the number of days the Portfolio had utilized the credit facility.

Portfolio	Approximate Average Balance Outstanding		Number of Days Outstanding	Weighted Average Interest Rates		Amount Outstanding at December 31, 2008
Global Portfolio	$	3,257,000	1	2.36	%		—
Jennison Portfolio		2,783,556	9	2.43			—
Natural Resources Portfolio		4,876,908	66	2.33		$	583,000
Small Capitalization Stock Portfolio		581,939	33	2.44			—
Value Portfolio		1,061,500	6	2.40			—

The amount of interest on temporary overdrawn balances paid to the custodian during the year ended December 31, 2008 was as follows:

Portfolio	Approximate Average Balance Outstanding		Weighted Average Interest Rates
Conservative Balanced Portfolio	$	5,050,826	1.89	%
Diversified Bond Portfolio		3,299,536	3.46
Flexible Managed Portfolio		4,579,319	3.97
Global Portfolio		879,293	4.28
Government Income Portfolio		6,651,253	4.44
High Yield Bond Portfolio		1,087,857	2.67
Jennison Portfolio		1,292,881	1.33
Money Market Portfolio		327,557	3.83
Natural Resources Portfolio		3,332,493	3.82
Small Capitalization Stock Portfolio		2,880,260	4.00
Value Portfolio		2,229,511	3.77

Note 9: Ownership and Affiliates

As of December 31, 2008, all of Class I shares of each Portfolio were owned of record by the Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

Note 10: New Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

B12

Financial Highlights

	Conservative Balanced Portfolio
	Year Ended December 31,
	2008			2007(c)			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	16.69		$	16.21		$	15.09		$	15.10		$	14.34
Income (Loss) From Investment Operations:
Net investment income		.50			.50			.48			.38			.34
Net realized and unrealized gain (loss) on investments		(3.98	)		.49			1.06			.11			.78
Total from investment operations		(3.48	)		.99			1.54			.49			1.12
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.35	)		(.28	)
Distributions from net realized gains		—			—			—			(.15	)		(.08	)
Distributions		(.52	)		(.51	)		(.42	)		—			—
Total dividends and distributions		(.52	)		(.51	)		(.42	)		(.50	)		(.36	)
Net Asset Value, end of year	$	12.69		$	16.69		$	16.21		$	15.09		$	15.10
Total Return(a)		(21.41	)%		6.12	%		10.44	%		3.43	%		8.04	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,957.5		$	2,721.9		$	2,770.6		$	2,749.8		$	2,893.6
Ratios to average net assets(b):
Expenses		.59	%		.59	%		.57	%		.58	%		.59	%
Net investment income		3.12	%		2.95	%		2.97	%		2.45	%		2.27	%
Portfolio turnover rate		336	%		178	%		114	%		110	%		153	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

(c) Calculated based upon average shares outstanding during the year.

	Diversified Bond Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	10.90		$	10.85		$	10.96		$	11.28		$	11.17
Income (Loss) From Investment Operations:
Net investment income		.54			.58			.57			.55			.52
Net realized and unrealized gain (loss) on investments		(.90	)		.02			(.05	)		(.20	)		.09
Total from investment operations		(.36	)		.60			.52			.35			.61
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.59	)		(.50	)
Distributions from net realized gains		—			—			—			(.08	)		—
Distributions		(.65	)		(.55	)		(.63	)		—			—
Total dividends and distributions		(.65	)		(.55	)		(.63	)		(.67	)		(.50	)
Net Asset Value, end of year	$	9.89		$	10.90		$	10.85		$	10.96		$	11.28
Total Return(a)		(3.46	)%		5.71	%		4.98	%		3.28	%		5.59	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,134.8		$	1,218.3		$	1,150.4		$	1,230.6		$	1,283.7
Ratios to average net assets(b):
Expenses		.44	%		.44	%		.45	%		.45	%		.45	%
Net investment income		5.07	%		5.39	%		5.18	%		4.81	%		4.57	%
Portfolio turnover rate		723	%		476	%		393	%		278	%		382	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C1

Financial Highlights

	Equity Portfolio
	Class I
	Year Ended December 31,
	2008(c)			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	29.67		$	27.45		$	24.64		$	22.31		$	20.55
Income (Loss) From Investment Operations:
Net investment income		.29			.35			.30			.24			.28
Net realized and unrealized gain (loss) on investments		(10.52	)		2.21			2.80			2.32			1.75
Total from investment operations		(10.23	)		2.56			3.10			2.56			2.03
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.23	)		(.27	)
Distributions		(3.04	)		(.34	)		(.29	)		—			—
Total dividends and distributions		(3.04	)		(.34	)		(.29	)		(.23	)		(.27	)
Net Asset Value, end of year	$	16.40		$	29.67		$	27.45		$	24.64		$	22.31
Total Return(a)		(38.16	)%		9.32	%		12.57	%		11.47	%		9.93	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,521.0		$	4,423.9		$	4,402.7		$	4,283.9		$	4,135.7
Ratios to average net assets(b):
Expenses		.48	%		.47	%		.47	%		.47	%		.48	%
Net investment income		1.21	%		1.16	%		1.10	%		1.01	%		1.29	%
Portfolio turnover rate		67	%		57	%		60	%		77	%		50	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculation based on average shares outstanding during the year.

	Equity Portfolio
	Class II
	Year Ended December 31,
	2008(c)			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	29.81		$	27.52		$	24.69		$	22.34		$	20.58
Income (Loss) From Investment Operations:
Net investment income		.19			.28			.19			.12			.20
Net realized and unrealized gain (loss) on investments		(10.61	)		2.20			2.80			2.35			1.74
Total from investment operations		(10.42	)		2.48			2.99			2.47			1.94
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.12	)		(.18	)
Distributions		(2.92	)		(.19	)		(.16	)		—			—
Total dividends and distributions		(2.92	)		(.19	)		(.16	)		(.12	)		(.18	)
Net Asset Value, end of year	$	16.47		$	29.81		$	27.52		$	24.69		$	22.34
Total Return(a)		(38.47	)%		8.91	%		12.13	%		11.04	%		9.51	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	0.4		$	1.3		$	1.9		$	2.1		$	1.1
Ratios to average net assets(b):
Expenses		.88	%		.87	%		.87	%		.87	%		.88	%
Net investment income		.78	%		.74	%		.71	%		.64	%		.91	%
Portfolio turnover rate		67	%		57	%		60	%		77	%		50	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculation based on average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

C2

Financial Highlights

	Flexible Managed Portfolio
	Year Ended December 31,
	2008			2007			2006			2005(c)			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	18.30		$	18.36		$	16.92		$	16.58		$	15.19
Income (Loss) From Investment Operations:
Net investment income		.45			.50			.44			.32			.29
Net realized and unrealized gain (loss) on investments		(4.62	)		.65			1.59			.34			1.32
Total from investment operations		(4.17	)		1.15			2.03			.66			1.61
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.32	)		(.22	)
Distributions		(1.79	)		(1.21	)		(.59	)		—			—
Total dividends and distributions		(1.79	)		(1.21	)		(.59	)		(.32	)		(.22	)
Net Asset Value, end of year	$	12.34		$	18.30		$	18.36		$	16.92		$	16.58
Total Return(a)		(24.82	)%		6.30	%		12.17	%		4.16	%		10.74	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,621.6		$	3,716.3		$	3,723.6		$	3,543.9		$	3,883.5
Ratios to average net assets(b):
Expenses		.64	%		.63	%		.62	%		.63	%		.62	%
Net investment income		2.85	%		2.53	%		2.48	%		1.95	%		1.83	%
Portfolio turnover rate		321	%		212	%		153	%		126	%		150	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

(c) Calculated based upon average shares outstanding during the year.

	Global Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	24.62		$	22.53		$	18.96		$	16.43		$	15.14
Income (Loss) From Investment Operations:
Net investment income		.40			.36			.26			.13			.11
Net realized and unrealized gain (loss) on investments		(10.38	)		2.00			3.44			2.50			1.33
Total from investment operations		(9.98	)		2.36			3.70			2.63			1.44
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.10	)		(.15	)
Distributions		(1.57	)		(.27	)		(.13	)		—			—
Total dividends and distributions		(1.57	)		(.27	)		(.13	)		(.10	)		(.15	)
Net Asset Value, end of year	$	13.07		$	24.62		$	22.53		$	18.96		$	16.43
Total Return(a)		(42.92	)%		10.48	%		19.65	%		16.06	%		9.59	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	512.7		$	985.0		$	932.9		$	814.1		$	691.1
Ratios to average net assets(b):
Expenses		.84	%		.81	%		.84	%		.82	%		.84	%
Net investment income		2.01	%		1.43	%		1.24	%		.77	%		.67	%
Portfolio turnover rate		65	%		48	%		50	%		155	%		128	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C3

Financial Highlights

	Government Income Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.38		$	11.26		$	11.40		$	11.65		$	11.92
Income From Investment Operations:
Net investment income		.45			.53			.54			.49			.49
Net realized and unrealized gain (loss) on investments		.03			.10			(.13	)		(.20	)		(.13	)
Total from investment operations		.48			.63			.41			.29			.36
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.54	)		(.44	)
Distributions from net realized gains		—			—			—			—			(.19	)
Distributions		(.46	)		(.51	)		(.55	)		—			—
Total dividends and distributions		(.46	)		(.51	)		(.55	)		(.54	)		(.63	)
Net Asset Value, end of year	$	11.40		$	11.38		$	11.26		$	11.40		$	11.65
Total Return(a)		4.30	%		5.70	%		3.74	%		2.51	%		3.12	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	370.5		$	340.3		$	354.3		$	378.2		$	420.2
Ratios to average net assets(b):
Expenses		.52	%(c)		.52	%		.50	%		.47	%		.47	%
Net investment income		3.98	%(c)		4.62	%		4.75	%		4.16	%		4.07	%
Portfolio turnover rate		2707	%		2377	%		734	%		507	%		617	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

(c) Includes interest expense of 0.03%.

	High Yield Bond Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	5.09		$	5.33		$	5.23		$	5.42		$	5.29
Income (Loss) From Investment Operations:
Net investment income		.41			.40			.39			.38			.39
Net realized and unrealized gain (loss) on investments		(1.48	)		(.26	)		.13			(.20	)		.13
Total from investment operations		(1.07	)		.14			.52			.18			.52
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.37	)		(.39	)
Distributions		(.41	)		(.38	)		(.42	)		—			—
Total dividends and distributions		(.41	)		(.38	)		(.42	)		(.37	)		(.39	)
Net Asset Value, end of year	$	3.61		$	5.09		$	5.33		$	5.23		$	5.42
Total Return(a):		(22.28	)%		2.62	%		10.25	%		3.41	%		10.30	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,239.9		$	1,674.0		$	1,721.1		$	1,635.7		$	1,595.7
Ratios to average net assets(b):
Expenses		.58	%		.58	%		.58	%		.58	%		.59	%
Net investment income		8.78	%		7.49	%		7.39	%		7.14	%		7.42	%
Portfolio turnover rate		61	%		58	%		49	%		56	%		65	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C4

Financial Highlights

	Jennison Portfolio
	Class I
	Year Ended December 31,
	2008(c)			2007			2006(c)			2005(c)			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	23.53		$	21.07		$	20.76		$	18.14		$	16.62
Income (Loss) From Investment Operations:
Net investment income		.10			.10			.06			.02			.08
Net realized and unrealized gain (loss) on investments		(8.84	)		2.43			.31			2.62			1.52
Total from investment operations		(8.74	)		2.53			.37			2.64			1.60
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.02	)		(.08	)
Distributions		(.10	)		(.07	)		(.06	)		—			—
Total dividends and distributions		(.10	)		(.07	)		(.06	)		(.02	)		(.08	)
Net Asset Value, end of year	$	14.69		$	23.53		$	21.07		$	20.76		$	18.14
Total Return(a)		(37.28	)%		12.00	%		1.79	%		14.55	%		9.63	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,148.0		$	2,100.5		$	2,077.3		$	2,297.0		$	2,044.1
Ratios to average net assets(b):
Expenses		.63	%		.62	%		.63	%		.63	%		.64	%
Net investment income		.52	%		.42	%		.29	%		.10	%		.50	%
Portfolio turnover rate		74	%		69	%		67	%		57	%		74	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculated based upon average shares outstanding during the year.

	Jennison Portfolio
	Class II
	Year Ended December 31,
	2008(d)			2007			2006(d)			2005(d)			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	23.17		$	20.77		$	20.49		$	17.97		$	16.46
Income (Loss) From Investment Operations:
Net investment income (loss)		.02			—	(c)		(.02	)		(.05	)		.02
Net realized and unrealized gain (loss) on investments		(8.72	)		2.40			.30			2.57			1.50
Total from investment operations		(8.70	)		2.40			.28			2.52			1.52
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(.01	)
Distributions		(.01	)		—			—			—			—
Total dividends and distributions		(.01	)		—			—			—			(.01	)
Net Asset Value, end of year	$	14.46		$	23.17		$	20.77		$	20.49		$	17.97
Total Return(a)		(37.55	)%		11.56	%		1.37	%		14.02	%		9.22	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	12.2		$	21.9		$	19.6		$	18.2		$	84.9
Ratios to average net assets(b):
Expenses		1.03	%		1.02	%		1.03	%		1.03	%		1.04	%
Net investment income (loss)		.12	%		.02	%		(.12	)%		(.27	)%		.11	%
Portfolio turnover rate		74	%		69	%		67	%		57	%		74	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Less than $.005 per share.

(d) Calculated based upon average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

C5

Financial Highlights

	Money Market Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	10.00		$	10.00		$	10.00		$	10.00		$	10.00
Income From Investment Operations:
Net investment income and realized gains		.26			.49			.46			.28			.10
Dividends and distributions		—			—			—			(.28	)		(.10	)
Distributions		(.26	)		(.49	)		(.46	)		—			—
Net Asset Value, end of year	$	10.00		$	10.00		$	10.00		$	10.00		$	10.00
Total Return(a)		2.65	%		5.06	%		4.74	%		2.85	%		1.01	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,489.8		$	1,289.9		$	1,060.5		$	851.9		$	885.4
Ratios to average net assets:
Expenses		.43	%		.43	%		.43	%		.45	%		.45	%
Net investment income		2.59	%		4.94	%		4.68	%		2.86	%		1.01	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absense of fee waivers and /or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

SEE NOTES TO FINANCIAL STATEMENTS.

C6

Financial Highlights

	Natural Resources Portfolio
	Class I
	Year Ended December 31,
	2008(a)			2007(a)			2006(a)			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	56.28		$	45.67		$	45.46		$	31.88		$	27.49
Income (Loss) From Investment Operations:
Net investment income		.22			.43			.35			.33			.19
Net realized and unrealized gain (loss) on investments		(25.97	)		21.09			8.65			16.27			6.28
Total from investment operations		(25.75	)		21.52			9.00			16.60			6.47
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—	(c)		(1.00	)
Distributions from net realized gains		—			—			—			(3.02	)		(1.08	)
Distributions		(6.83	)		(10.91	)		(8.79	)		—			—
Total dividends and distributions		(6.83	)		(10.91	)		(8.79	)		(3.02	)		(2.08	)
Net Asset Value, end of year	$	23.70		$	56.28		$	45.67		$	45.46		$	31.88
Total Return(d)		(53.00	)%		48.30	%		22.20	%		55.91	%		25.17	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	677.4		$	1,669.9		$	1,193.0		$	1,016.3		$	622.6
Ratios to average net assets(b):
Expenses		.50	%		.48	%		.49	%		.49	%		.51	%
Net investment income		.47	%		.80	%		.78	%		.66	%		.49	%
Portfolio turnover rate		40	%		39	%		58	%		59	%		24	%

(a) Calculated based upon average shares outstanding during the year.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Amount is less than $0.005 per share.

(d) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

	Natural Resources Portfolio
	Class II
	Year Ended December 31,									April 28, 2005(c) through December 31, 2005
	2008(a)			2007(a)			2006(a)
Per Share Operating Performance:
Net Asset Value, beginning of period	$	55.92		$	45.55		$	45.32		$	30.10
Income (Loss) From Investment Operations:
Net investment income		.05			.28			.18			.05
Net realized and unrealized gain (loss) on investments		(25.86	)		20.92			8.64			15.17
Total from investment operations		(25.81	)		21.20			8.82			15.22
Less Distributions:
Distributions		(6.57	)		(10.83	)		(8.59	)		—
Net Asset Value, end of period	$	23.54		$	55.92		$	45.55		$	45.32
Total Return(d)		(53.19	)%		47.70	%		21.72	%		50.56	%(f)
Ratios/Supplemental Data:
Net assets, end of period (in millions)	$	42.3		$	47.9		$	16.9		$	5.1
Ratios to average net assets(b):
Expenses		.90	%		.88	%		.89	%		.89	%(e)
Net investment income		.12	%		.51	%		.40	%		.33	%(e)
Portfolio turnover rate		40	%		39	%		58	%		59	%(f)

(a) Calculated based upon average shares outstanding during the year.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Commencement of offering of Class II shares.

(d) 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 and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. 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) Annualized.

(f) Not annualized.

SEE NOTES TO FINANCIAL STATEMENTS.

C7

Financial Highlights

	Small Capitalization Stock Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	21.31		$	23.29		$	21.38		$	21.33		$	17.64
Income (Loss) From Investment Operations:
Net investment income		.24			.21			.14			.13			.12
Net realized and unrealized gain (loss) on investments		(5.92	)		(.36	)		2.95			1.30			3.75
Total from investment operations		(5.68	)		(.15	)		3.09			1.43			3.87
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.13	)		(.11	)
Distributions from net realized gains		—			—			—			(1.25	)		(.07	)
Distributions		(3.11	)		(1.83	)		(1.18	)		—			—
Total dividends and distributions		(3.11	)		(1.83	)		(1.18	)		(1.38	)		(.18	)
Net Asset Value, end of year	$	12.52		$	21.31		$	23.29		$	21.38		$	21.33
Total Return(a)		(31.04	)%		(.53	)%		14.67	%		7.26	%		22.04	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	432.5		$	699.6		$	777.1		$	738.3		$	743.2
Ratios to average net assets(b):
Expenses		.47	%		.46	%		.45	%		.46	%		.47	%
Net investment income		1.33	%		.86	%		.59	%		.62	%		.62	%
Portfolio turnover rate		25	%		16	%		12	%		16	%		18	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

	Stock Index Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	36.84		$	35.64		$	31.41		$	31.29		$	29.29
Income (Loss) From Investment Operations:
Net investment income		.64			.68			.56			.48			.50
Net realized and unrealized gain (loss) on investments		(14.02	)		1.14			4.31			.88			2.50
Total from investment operations		(13.38	)		1.82			4.87			1.36			3.00
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.47	)		(.49	)
Distributions from net realized gains		—			—			—			(.77	)		(.51	)
Distributions		(.70	)		(.62	)		(.64	)		—			—
Total dividends and distributions		(.70	)		(.62	)		(.64	)		(1.24	)		(1.00	)
Net Asset Value, end of year	$	22.76		$	36.84		$	35.64		$	31.41		$	31.29
Total Return(a)		(36.94	)%		5.10	%		15.54	%		4.54	%		10.45	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,815.8		$	3,122.4		$	3,306.4		$	3,212.7		$	3,094.7
Ratios to average net assets(b):
Expenses		.37	%		.37	%		.37	%		.38	%		.38	%
Net investment income		2.04	%		1.73	%		1.61	%		1.52	%		1.64	%
Portfolio turnover rate		4	%		3	%		3	%		7	%		3	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C8

Financial Highlights

	Value Portfolio
	Class I
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	23.44		$	26.21		$	22.95		$	19.93		$	17.36
Income (Loss) From Investment Operations:
Net investment income		.30			.39			.36			.29			.28
Net realized and unrealized gain (loss) on investments		(8.36	)		.42			4.11			3.03			2.55
Total from investment operations		(8.06	)		.81			4.47			3.32			2.83
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.30	)		(.26	)
Distributions		(4.52	)		(3.58	)		(1.21	)		—			—
Total dividends and distributions		(4.52	)		(3.58	)		(1.21	)		(.30	)		(.26	)
Net Asset Value, end of year	$	10.86		$	23.44		$	26.21		$	22.95		$	19.93
Total Return(a)		(42.29	)%		3.19	%		19.94	%		16.66	%		16.31	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	933.1		$	1,824.9		$	1,975.7		$	1,750.1		$	1,595.6
Ratios to average net assets(b):
Expenses		.43	%		.43	%		.43	%		.43	%		.44	%
Net investment income		1.46	%		1.35	%		1.45	%		1.35	%		1.48	%
Portfolio turnover rate		71	%		52	%		49	%		56	%		52	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

	Value Portfolio
	Class II
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	23.51		$	26.26		$	22.98		$	19.94		$	17.37
Income (Loss) From Investment Operations:
Net investment income		.21			.29			.27			.21			.20
Net realized and unrealized gain (loss) on investments		(8.38	)		.42			4.11			3.01			2.55
Total from investment operations		(8.17	)		.71			4.38			3.22			2.75
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.18	)		(.18	)
Distributions		(4.43	)		(3.46	)		(1.10	)		—			—
Total dividends and distributions		(4.43	)		(3.46	)		(1.10	)		(.18	)		(.18	)
Net Asset Value, end of year	$	10.91		$	23.51		$	26.26		$	22.98		$	19.94
Total Return(a)		(42.56	)%		2.82	%		19.43	%		16.21	%		15.83	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1.7		$	2.7		$	3.2		$	3.1		$	3.0
Ratios to average net assets(b):
Expenses		.83	%		.83	%		.83	%		.83	%		.84	%
Net investment income		1.08	%		.96	%		1.04	%		.95	%		1.08	%
Portfolio turnover rate		71	%		52	%		49	%		56	%		52	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE BOARD OF TRUSTEES AND SHAREHOLDERS THE PRUDENTIAL SERIES FUND:

We have audited the accompanying statements of assets and liabilities of The Prudential Series Fund (comprised of Conservative Balanced Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed Portfolio, Global Portfolio, Government Income Portfolio, High Yield Bond Portfolio, Jennison Portfolio, Money Market Portfolio, Natural Resources Portfolio, Small Capitalization Stock Portfolio, Stock Index Portfolio and Value Portfolio, hereafter referred to as the “Funds”), including the portfolios of investments, as of December 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of December 31, 2008, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 18, 2009

D1

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)

Information about the Trustees and the Officers of the Fund is set forth below. Trustees who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Fund are referred to as “Interested Trustees.” The Trustees 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.

Independent Trustees (1)
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Saul K. Fenster, Ph.D. (75) No. of Portfolios Overseen: 86	Currently President Emeritus of New Jersey Institute of Technology (since 2002); formerly President (1978-2002) of New Jersey Institute of Technology; Commissioner (1998-2002) of the Middle States Association Commission on Higher Education; Commissioner (1985-2002) of the New Jersey Commission on Science and Technology; formerly Director (1998-2005) of Society of Manufacturing Engineering Education Foundation; formerly Director of Prosperity New Jersey; formerly a director or trustee of Liberty Science Center, Research and Development Council of New Jersey, New Jersey State Chamber of Commerce, and National Action Council for Minorities in Engineering.	Member (since 2006), Board of The Ridgefield Foundation and The Leir Foundation.
Delayne Dedrick Gold (70) No. of Portfolios Overseen: 86	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.
W. Scott McDonald, Jr. (71) No. of Portfolios Overseen: 86	Formerly Management Consultant (1997-2004) and of Counsel (2004-2005) at Kaludis Consulting Group, Inc. (company serving higher education); Formerly principal (1995-1997), Scott McDonald Associates; Chief Operating Officer (1991-1995), Fairleigh Dickinson University; Executive Vice President and Chief Operating Officer (1975-1991), Drew University; interim President (1988-1990), Drew University; formerly Director of School, College and University Underwriters Ltd.
Thomas T. Mooney (67) No. of Portfolios Overseen: 86	Formerly Chief Executive Officer, Excell Partners, Inc.; formerly President of the Greater Rochester Metro Chamber of Commerce, Rochester City Manager; formerly Deputy Monroe County Executive.
Thomas M. O’Brien (58) No. of Portfolios Overseen: 86	President and COO (since November 2006) and CEO (since April 2007) of State Bancorp, Inc. and State Bank; Vice Chairman (January 1997-April 2000) of North Fork Bank; President and Chief Executive Officer (December 1984-December 1996) of North Side Savings Bank; formerly President and Chief Executive Officer (May 2000-June 2006) Atlantic Bank of New York.	Formerly Director (December 1996-May 2000) of North Fork Bancorporation, Inc.; Formerly Director (May 2000-April 2006) of Atlantic Bank of New York; Director (since November 2006) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
F. Don Schwartz (73) No. of Portfolios Overseen: 86	Management Consultant (since April 1985).
Interested Trustee (1)
Robert F. Gunia (62) No. of Portfolios Overseen: 148	Chief Administrative Officer (since September 1999) and Executive Vice President (since December 1996) of Prudential Investments LLC; President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (since December 2008) of Prudential Investment Management Services LLC; Executive Vice President (since March 1999) and Treasurer (since May 2000) of Prudential Mutual Fund Services LLC; Chief Administrative Officer, Executive Vice President and Director (since May 2003) of AST Investment Services, Inc.	Director (since May 1989) of The Asia Pacific Fund, Inc.

¹ The year that each Trustee joined the Fund’s Board is as follows: Saul K. Fenster, 1983; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr., 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; F. Don Schwartz, 2003.

E1

Fund Officers (a)(1)
Name, Address and Age	Principal Occupation(s) During the Past Five Years
Position with the Fund
Steve Pelletier (55) President and Principal Executive Officer	President of Prudential Annuities (since September 2008); Chairman and CEO, International Investments, Prudential Financial (since January 1998).
Kathryn L. Quirk (56) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC (PI) and Prudential Mutual Fund Services LLC (PMFS); Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (51) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (50) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (34) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (37) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (46) Assistant Secretary	Director and Corporate Counsel (since May 2006) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (49) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc.(PIM) (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (50) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (46) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001 - 2004).
Noreen M. Fierro (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (49) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (45) Assistant Treasurer	Vice President (since 2005) and Director (2000-2005) within Prudential Mutual Fund Administration.
Peter Parrella (50) 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).
Alan Fu (51) Assistant Treasurer	Vice President – Tax, The Prudential Insurance Company of America (1999 to October 2003); Vice President and Corporate Counsel – Tax, Prudential Financial, Inc. (since October 2003).

^(a) Excludes interested Board Members who also serve as President or Vice President.

¹ The year in which each individual became an Officer of the Fund is as follows: Stephen Pelletier, 2008; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Valerie M. Simpson, 2007; Theresa C. Thompson, 2008; Noreen M. Fierro, 2006; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006; Alan Fu, 2006.

Explanatory Notes to Tables:

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

Unless otherwise noted, the address of all Trustees and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.

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

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

“No. of Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which PI serves as manager include the JennisonDryden Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts, The Target Portfolio Trust, The Prudential Series Fund, Advanced Series Trust, The High Yield Income Fund, Inc., The High Yield Plus Fund, Inc., Nicholas-Applegate Fund, Inc. and Prudential’s Gibraltar Fund, Inc.

E2

Annuities are issued by Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992, and Prudential Annuities Life Assurance Corporation, located at One Corporate Drive, Shelton, CT, 06484. Variable annuities are distributed by Prudential Annuities Distributors, Inc., also located in Shelton, CT. Prudential Annuities is a business unit of Prudential Financial.

Variable life insurance is issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102-3777, Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992. Pruco Life Insurance Company is not licensed to do business in New York. Variable life insurance is offered through Pruco Securities LLC, 751 Broad Street, Newark, NJ 07102-3777.

All are Prudential Financial companies and each is solely responsible for its financial condition and contractual obligations.

Life insurance and annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with costs and complete details. Contract guarantees are based on the claims-paying ability of the issuing company.

The 2008 Audited Financial Statements of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and The Prudential Insurance Company of America are available. You may call 888-778-2888 to obtain a free copy of the audited financial statements of the insurance company that issued your contract.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household (“householding”) in lieu of sending a copy to each Contract Owner who resides in the household. You should be aware that by calling 877-778-5008, you can revoke or “opt out” of householding at any time.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock”, the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

The Prudential Insurance Company of America

751 Broad Street

Newark, NJ 07102-3777

PRST STD POSTAGES & FEES PAID VON HOFFMANN CORPORATION

IFS-A114446    PSF-AR-A    Ed.2/2009

ANNUAL REPORT December 31, 2008

The Prudential Series Fund

n SP Aggressive Growth Asset Allocation Portfolio

n SP Balanced Asset Allocation Portfolio

n SP Conservative Asset Allocation Portfolio

n SP Davis Value Portfolio

n SP Growth Asset Allocation Portfolio

n SP International Growth Portfolio

n SP International Value Portfolio

n SP Mid Cap Growth Portfolio

n SP PIMCO High Yield Portfolio

n SP PIMCO Total Return Portfolio

n SP Prudential U.S. Emerging Growth Portfolio

n SP Small Cap Value Portfolio

n SP Strategic Partners Focused Growth Portfolio

Please note that inside is a Prospectus Supplement dated January 21, 2009.

This document is separate from and not part of the annual report.

IFS-A114669

This report is one of several that provide financial information about certain investment choices available on variable life insurance and variable annuity contracts. Based on the variable contract you own or the portfolios you invested in, you may receive additional reports that provide financial information on those investment choices. Please refer to your variable life insurance or variable annuity contract prospectus to determine which portfolios are available to you.

This report must be preceded or accompanied by the current prospectuses for the Prudential Series Fund portfolios and the applicable variable life or annuity contract. The prospectuses contain information on the investment objectives, risks, and charges and expenses of the portfolios and the contract and should be read carefully.

The contract’s prospectus contains hypothetical performance illustrations that show the effect of various assumptions regarding the cost of insurance protection. You may also obtain a personalized illustration of historical performance that reflects the cost of your contract’s insurance protection.

A description of the Fund’s proxy voting policies and procedures is available, without charge, upon request. Owners of variable annuity contracts should call 888-778-2888 and owners of variable life insurance contracts should call 800-778-2255 to obtain descriptions of the Fund’s proxy voting policies and procedures. The description is also available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. 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 website of the Commission at www.sec.gov and on the Fund’s website.

The Fund files with the Commission a complete listing of portfolio holdings as of its first and third quarter-ends on Form N-Q. Form N-Q is available on the Commission’s website at www.sec.gov or by visiting the Commission’s Public Reference Room. For more information on the Commission’s Public Reference Room, please visit the Commission’s website or call 800-SEC-0330. Form N-Q is also available on the Fund’s website at www.prudential.com or by calling the telephone numbers referenced above.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge upon request by calling 888-778-2888.

This report may include financial information pertaining to certain portfolios that are not available through the variable life insurance policy or variable annuity contract that you have chosen. Please refer to your variable life insurance or variable annuity prospectus to determine which portfolios are available to you.

The Prudential Series Fund Annual Report December 31, 2008

Table of Contents

n LETTER TO CONTRACT OWNERS

n MANAGEMENT REVIEW

n PORTFOLIO COMPOSITION

n FEES AND EXPENSES TABLE

n FINANCIAL REPORTS

A1 Schedule of Investments and Financial Statements

B1 Notes to Financial Statements

C1 Financial Highlights

D1 Report of Independent Registered Public Accounting Firm

E1 Information About Trustees and Officers

This report may include financial information pertaining to certain portfolios that are not available through the variable life insurance policy or variable annuity contract that you have chosen. Please refer to your variable life insurance or variable annuity prospectus to determine which portfolios are available to you.

The Prudential Series Fund Letter to Contract Owners Annual Report December 31, 2008

n DEAR CONTRACT OWNER

Our objective at Prudential is very simple — we strive to help our clients achieve and maintain financial success. Our Prudential Series Fund annual report details this commitment to you as we focus on ways to help you with your financial security. We hope you find it both informative and useful.

While 2008 presented unprecedented challenges to investors, it also proved that Prudential’s strategies around growing and protecting our clients’ wealth have never been more important.

Your financial professional is the best resource to help you understand how market changes affect your investments. Together, you can develop a diversified mix of investments that works best for you and review it periodically to ensure your financial objectives remain on target.

Thank you for selecting Prudential as one of your financial partners. We value your trust and appreciate the opportunity to help you reach your financial goals.

Sincerely,

Steve Pelletier

President,

The Prudential Series Fund January 30, 2009

PRESIDENT

STEVE PELLETIER

The Prudential Series Fund, SP Aggressive Growth Asset Allocation Portfolio Subadvised by: Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-42.18	%	-1.77	%	-3.82	%
S&P 500 Index	-36.99		-2.19		-3.76
Blended Index	-38.43		-1.11		-2.69

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Aggressive Growth Asset Allocation Portfolio underperformed its custom blended index.

In equities, a modest investment in energy hurt relative performance, as the sector declined heavily during 2008. This negative return was further amplified by the Portfolio’s holdings of large-cap versus small-cap stocks, as small companies held up better than expected.

Only five out of the Portfolio’s eleven constituents matched or outperformed their respective style benchmarks in 2008. Asset class selection by managers detracted from performance during the period. Active managers, in general, had a difficult time outperforming benchmarks in 2008. Often managers perform well during periods of rising volatility, where uncertainty leads to greater variation in stock returns, providing opportunities for active management selection. The past year was different, however, because the systemic shocks from the financial crisis increased correlations (price movements) between stocks to all-time highs, reducing the opportunities in actively managed portfolios. During the year, broad economic factors and deleveraging (selling positions to reduce debt) drove market activity rather than more traditional factors such as valuation and company-specific fundamentals. It was a difficult environment for most investment strategies. At some point, we expect the historically high correlations between stocks to subside and valuation and fundamentals to drive performance, providing opportunities for skilled managers to outperform their benchmark indexes.

Against this backdrop, the largest detractors from relative return were the Advanced Series Trust (AST) Large Cap Value Portfolio, AST Marsico Capital Growth Portfolio, and the Prudential Series Fund (PSF) SP International Growth Portfolio. The largest contributor to relative return was the PSF Jennison Portfolio.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of Russell 3000 Index (80%), a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market, and MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) (20%), an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Balanced Asset Allocation Portfolio Subadvised by: Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-28.55	%	0.67	%	0.47	%
S&P 500 Index	-36.99		-2.19		-3.76
Blended Index	-23.05		1.41		1.08

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Balanced Asset Allocation Portfolio underperformed its custom blended benchmark index (the Index).

An underweight position in fixed income versus equity contributed negatively to relative return, since bonds, as measured by the Barclays Capital U.S. Aggregate Bond Index, significantly outperformed stocks and the Russell 3000^® fell into negative territory for the year. Regarding equity performance, a modest position in the energy sector hurt performance.

In the Portfolio’s fixed income component, moderate cash holdings hampered relative performance, since U.S. Treasurys outperformed investment-grade bonds. In addition, a modest, non-benchmark investment in high yield bonds also contributed negatively to relative return. In the risk-averse environment during the year, high yield bonds underperformed investment-grade bonds by a wide margin.

Active managers, in general, had a difficult time outperforming benchmarks in 2008. Often managers perform well during periods of rising volatility, where uncertainty leads to greater variation in stock returns, providing opportunities for active stock selection. The past year was different, however, because the systemic shocks from the financial crisis increased correlations (price movements) between stocks to all-time highs, reducing opportunities in actively managed portfolios. During the year, broad economic factors and deleveraging (selling positions to reduce debt) drove market activity rather than more traditional factors such as valuation and company-specific fundamentals. It was a difficult environment for most investment strategies. At some point, we expect the historically high correlations between stocks to subside and valuation and fundamentals to drive performance, providing opportunities for skilled managers to outperform their benchmark indexes.

In the fixed income market, risk sectors underperformed significantly. Government bonds gained, as investors flocked to liquidity and safety. High quality mortgage-backed securities (MBS) posted gains for the reporting period, while investment-grade credit declined moderately. High yield bonds ended the year with double-digit declines.

Against this highly challenging investment backdrop, the largest detractors from the Portfolio’s relative return were the Prudential Series Fund (PSF) SP PIMCO Total Return Portfolio, Advanced Series Trust (AST) Large Cap Value Portfolio, AST Marsico Capital Growth Portfolio, and the PSF SP International Growth Portfolio. The largest positive contributor to relative performance was the PSF Jennison Portfolio.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of Russell 3000 Index (48%), a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market, Barclays Capital U.S. Aggregate Bond Index (40%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) (12%), an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Conservative Asset Allocation Portfolio Subadvised by: Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-20.21	%	1.81	%	2.29	%
S&P 500 Index	-36.99		-2.19		-3.76
Blended Index (GD)	-14.35		2.56		2.84

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Conservative Asset Allocation Portfolio underperformed its custom blended index.

In equities, a modest investment in energy hurt relative performance, as the sector declined heavily during 2008. This negative return was further amplified by the Portfolio’s holdings of large-cap versus small-cap stocks, as small companies held up better than expected. An underweight position in fixed income versus equities contributed negatively to relative performance, since bonds, as measured by the Barclays Capital U.S. Aggregate Bond Index, significantly outperformed stocks in 2008.

In the Portfolio’s fixed income holdings, a moderate exposure to U.S. Treasury bills, which are very short term, gained less than the broader U.S. investment–grade bond market. A modest position in high yield corporate (“junk”) bonds, which are not in the benchmark, negatively affected returns. High yield bonds declined sharply for the year, as these below-investment-grade bonds fell out of favor in the risk-averse environment.

Only five out of the Portfolio’s 14 constituents matched or outperformed their respective style benchmarks in 2008. Asset class selection by managers detracted from performance during the period. Active managers, in general, had a difficult time outperforming benchmarks in 2008. Often managers perform well during periods of rising volatility, where uncertainty leads to greater variation in stock returns, providing opportunities for active management selection. The past year was different, however, because the systemic shocks from the financial crisis increased correlations (price movements) between stocks to all-time highs, reducing opportunities in actively managed portfolios. During the year, broad economic factors and deleveraging (selling positions to reduce debt) drove market activity rather than more traditional factors such as valuation and company-specific fundamentals. It was a difficult environment for most investment strategies. At some point, we expect the historically high correlations between stocks to subside and valuation and fundamentals to drive performance, providing opportunities for skilled managers to outperform their benchmark indexes.

Against this backdrop, the largest detractors from relative return were the Prudential Series Fund (PSF) SP PIMCO Total Return Portfolio, AST Large Cap Value Portfolio, AST Marsico Capital Growth Portfolio, and the PSF SP International Growth Portfolio. The largest contributor to relative performance was the PSF Jennison Portfolio.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of Russell 3000 Index (32%), a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market, Barclays Capital U.S. Aggregate Bond Index (60%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) (8%), an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Davis Value Portfolio Subadvised by: Davis Advisors December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-39.88	%	-2.28	%	-1.46	%
S&P 500 Index	-36.99		-2.19		-3.76
Russell 1000® Value Index	-36.85		-0.79		0.39

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. The Russell 1000^® Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Davis Value Portfolio underperformed its benchmark, the Russell 1000^® Value Index (the Index).

Davis follows a bottom-up/top-down investment approach that is solidly grounded in a value discipline. The top-down analysis consists of attempting to discover those industries/sectors that are likely to benefit from specific economic developments. The bottom-up components of the analysis involve identifying good quality but currently out-of-favor securities that are able to sustain growth over full market cycles. Security selection is driven by a combination of relative and intrinsic valuation of individual companies.

Virtually all sectors showed negative returns for the reporting period. The Portfolio’s holdings in specific sectors detracted from relative performance. Specifically, the Portfolio’s relative performance was hurt by an overweight in financials, energy, and consumer services sectors, in addition to underweight positions in the telecommunications and healthcare sectors. An overweight in the consumer cyclicals sector contributed positively to relative performance.

Overall, risk factors hampered the Portfolio’s relative performance for the year. The Portfolio’s overexposure to momentum stocks (stocks experiencing recent price strength) and its underweight holdings in dividend-paying stocks combined to weaken relative performance. Conversely, the Portfolio was underweight in value-oriented stocks in relation to the Index, which helped.

The subadviser’s stock selection in the financials, consumer services, and healthcare sectors contributed positively for the year. Conversely, assets held in the consumer staples and technology sectors were not rewarded.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000 Value Index is a market cap-weighted index that measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Growth Asset Allocation Portfolio Subadvised by: Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-36.36	%	-0.63	%	-1.72	%
S&P 500 Index	-36.99		-2.19		-3.76
Blended Index	-31.06		0.19		-0.77

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Growth Asset Allocation Portfolio underperformed its custom blended index (the Index).

In the Portfolio’s fixed income holdings, a moderate exposure to U.S. Treasury bills, which are very short term, gained less than the broader U.S. investment–grade bond market. A modest position in high yield corporate (“junk”) bonds, which are not in the Index, negatively affected returns. High yield bonds declined sharply for the year, as these below-investment-grade bonds fell out of favor in the risk-averse environment.

Active managers, in general, had a difficult time outperforming benchmarks in 2008. Often managers perform well during periods of rising volatility, where uncertainty leads to greater variation in stock returns, providing opportunities for active stock selection. The past year was different, however, because the systemic shocks from the financial crisis increased correlations (price movements) between stocks to all-time highs, reducing opportunities in actively managed portfolios. During the year, broad economic factors and deleveraging (selling positions to reduce debt) drove market activity rather than more traditional factors such as valuation and company-specific fundamentals. It was a difficult environment for most investment strategies. At some point, we expect the historically high correlations between stocks to subside and valuation and fundamentals to drive performance, providing opportunities for skilled managers to outperform their benchmark indexes.

Against this backdrop, the largest detractors from relative return were the Prudential Series Fund (PSF) SP PIMCO Total Return Portfolio, Advanced Series Trust (AST) Large Cap Value Portfolio, AST Marsico Capital Growth Portfolio, and the PSF SP International Growth Portfolio. The largest contributor to relative performance was the PSF Jennison Portfolio.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of Russell 3000 Index (64%), a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market, Barclays Capital U.S. Aggregate Bond Index (20%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) (16%), an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP International Growth Portfolio Subadvised by: Marsico Capital Management, LLC, William Blair & Company LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio: Class I	-50.30	%	-0.49	%	-6.44	%
Portfolio: Class II	-50.49		-0.92		-6.60
MSCI EAFE® Index (GD)	-43.06		2.10		-0.01

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION¹

Portfolio (Class I) inception: 9/22/2000. Portfolio (Class II) inception: 10/4/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class I). Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP International Growth Portfolio underperformed the MSCI EAFE Index (GD) (the Index).

Stock selection detracted from overall returns for the year. Specifically, the industrial and energy holdings of both managers declined significantly, as many of the stocks that were linked to the emerging markets infrastructure expansion declined when global growth slowed more than originally expected.

Risk factors negatively affected performance. Historically, both subadvisers have been overweight in stocks with high volatility and earnings growth versus the Index. These positions detracted from performance. Given the climate of risk aversion, most investors favored more stable stocks with lower volatility. Furthermore, companies with higher earnings growth rates declined as investors started to doubt that these growth rates were sustainable, given the global economic slowdown.

Holdings in specific countries detracted from returns. An underweight in Japan and overweights to emerging market countries such as Brazil and China negatively affected performance. For years, both subadvisers have underweighted Japan, as higher growth opportunities have been difficult to find. This underweight particularly hurt relative performance, as the Japanese Yen advanced versus other world currencies during the flight to quality, in which investors sought safer securities such as U.S. Treasurys.

Sector-specific holdings mitigated negative performance. Specifically, an underweight in the financials sector and overweight positions in telecommunications and consumer staples helped performance. Since investments in sectors are byproducts of the subadvisers’ bottom up stock selection, not as much emphasis was placed on the returns resulting from them.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15% respectively of the average daily net assets of the Class II shares.

MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) is an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP International Value Portfolio Subadvised by: LSV Asset Management, Thornburg Investment Management Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-44.06	%	2.36	%	-1.59	%
MSCI EAFE® Index (GD)	-43.06		2.10		-0.01

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP International Value Portfolio declined more than its benchmark, the MSCI EAFE Index (GD).

LSV Asset Management and Thornburg Investment Management subadvised the Portfolio. LSV is a deep value manager that employs an active quantitative investment strategy based on research into value investing and studies of investor behavior. Thornburg is a relative value manager that uses quantitative screening to initially identify attractively valued stocks. The most attractive stocks are then evaluated using fundamental research analysis.

The bursting of the credit and housing bubbles in 2008 depressed stock and bond prices. Risk-averse investors increasingly fled to U.S. Treasury bonds and the U.S. dollar, pushing up the prices of both. The dollar appreciated relative to other currencies, with the exception of the Japanese yen. The broad international stock market lagged the broad domestic stock market.

Both subadvisers underperformed the benchmark. The global credit crunch that began in August 2007 intensified in September 2008 following the failure of Lehman Brothers and the $85 billion Federal Reserve bailout of AIG. Financial turmoil spread to international markets. The period was characterized by heightened stock market volatility and greater correlation among stocks on a global basis. Active managers in the international arena found it difficult to outperform the MSCI EAFE Index because macro trends, not stock-specific fundamentals, drove returns.

Both LSV and Thornburg struggled from a stock selection standpoint, although LSV’s deep value focus was more out of favor than Thornburg’s relative value approach. Holdings in the financial, energy, and consumer discretionary sectors detracted the most, followed by positions in utilities and consumer staples.

Sector allocations contributed positively to performance. Allocations within Thornburg’s sleeve, specifically an underweight to the financial and an overweight to the telecommunications sectors, were a positive. Detracting from performance was LSV’s underweight in utilities that resulted when the subadviser’s quantitative models indicated a negative outlook for the sector.

Exposure to non-benchmark countries detracted from performance, with investments in the BRIC countries of China, Russia, and Brazil being the most detrimental. The allocation to emerging countries is attributable to the Thornburg sleeve as LSV does not take significant country bets or invest in emerging markets. An underweight to Japan also hurt performance as the Japanese market fell significantly less than the broad EAFE benchmark. Assets held in Japan, France, and the U.K. detracted but were partially offset by good stock selection in China.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index (GD) is an unmanaged, capitalization-weighted index generally accepted as a benchmark for major overseas markets. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Mid Cap Growth Portfolio Subadvised by: Neuberger Berman Management, Inc. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-42.56	%	-3.81	%	-8.52	%
Russell Midcap® Index	-41.46		-0.71		0.37
Russell Midcap® Growth Index	-44.32		-2.33		-6.70

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. The Russell Midcap^® and Midcap^® Growth Indexes are trademarks/service marks of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Mid Cap Growth Portfolio outperformed its style benchmark, the Russell Midcap^® Growth Index.

The SP Mid Cap Growth Portfolio is subadvised by Neuberger Berman (“Neuberger”). Neuberger’s mid cap growth strategy utilizes a top-down/bottom-up investment process that seeks to outperform, on a risk-adjusted basis, the Russell Midcap^® Growth Index (the Index) over a full market cycle (four to six years).

A more conservative risk posture proved to be the primary source of relative return in 2008. The Portfolio’s subdued sensitivity to market movements mitigated its negative absolute and relative return, particularly in September, October, and early November, when stocks abruptly declined in value.

Stock-specific factors hurt relative results. Assets held within the alcohol, medical products, semiconductor, and defense/aerospace industries detracted from relative performance. These weak returns were partially offset by strong stock picks in the energy reserves and industrial services industries.

Style factors detracted from relative performance. The Portfolio’s overexposure to stocks exhibiting momentum characteristics (i.e., recent price strength) and stocks with above-market asset and earnings growth rates hurt performance. Conversely, an underexposure to companies with leveraged balance sheets, high earnings variability, and above-index-average market capitalizations partially offset negative results.

Positions in specific sectors hurt results relative to the Index. The Portfolio’s underexposure to the consumer services and basic materials sectors proved detrimental, as these were two of the stronger performing sectors in the Index. Conversely, an overexposure to the commercial services sector was favorable for performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Russell Midcap Growth Index is a market cap-weighted index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. Russell Midcap Index is a market cap-weighted index that measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 25% of the total market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP PIMCO High Yield Portfolio Subadvised by: Pacific Investment Management Company LLC (PIMCO) December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-25.50	%	-0.75	%	2.75	%
Barclays Capital Intermediate BB Corp. Index	-16.81		0.76		3.58
Merrill Lynch U.S. High Yield Master II BB-B Rated Index	-23.71		-0.30		2.36
Merrill Lynch U.S. High Yield Master II Constrained Index	-26.11		-0.89		2.78

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP PIMCO High Yield Portfolio declined 25.50%.

A burst housing bubble in the United States had led to a collapse in the subprime mortgage market that escalated into a credit crisis in which financial institutions continued to take massive write-downs and losses in 2008. The U.S. economy, mired in one of its worst recessions since the Great Depression, shed some 2.5 million jobs in 2008. The Federal Reserve (the Fed) tried to boost growth by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December. The Fed and the U.S. Department of the Treasury employed unconventional measures to encourage commercial banks and finance firms to lend, yet it remained difficult for businesses and individuals to borrow money.

The worsening credit crisis led investors to avoid risky assets such as high yield bonds, which are called “junk” bonds because they are rated below investment grade. There was concern weak economic conditions will leave many firms unable to make interest and principal payments on their high yield bonds. The high yield market ended 2008 in the red, though the Fed rate cut in December and stated intention to use all available tools to lift the U.S. economy out of recession helped bond prices rally that month.

Some aspects of PIMCO’s sector allocation strategy caused the Portfolio to trail its benchmark index. The consumer non-cyclical sector outperformed the high yield market as demand for products such as food, beverages, and tobacco tends to remain solid during economic downturns. The Portfolio had a smaller exposure than its benchmark index to bonds of consumer non-cyclicals, which detracted from its relative performance. The financial institutions sector was really hard hit by the credit crisis, and the Portfolio’s emphasis on that sector hurt its performance. But the negative impact was lessened as financial bond prices gained in December on the Fed’s stated resolve to end the economic downturn. Poor security selection in the telecommunications sector in the first half of 2008 was another negative for the Portfolio, which favored bonds of integrated service and fixed-line providers that underperformed wireless telecom firms.

Some of PIMCO’s sector-allocation decisions worked well. Compared to its benchmark index, the Portfolio benefited from having a smaller exposure to the gaming sector, which was plagued by weak earnings, high levels of borrowed money, and declining consumer travel. The Portfolio’s relative performance also benefited from its larger exposure than its benchmark index to the healthcare sector, which outperformed the broader high yield market.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital Intermediate BB Corporate Bond Index is an unmanaged index comprised of various fixed income securities rated BB. Merrill Lynch U.S. High Yield Master II BB-B Rated Index is a broad high yield index including high yield bonds across the maturity spectrum, within the BB-B rated credit quality spectrum, included in the below-investment-grade universe. Merrill Lynch U.S. High Yield Master II Constrained Index is a market value-weighted index of all domestic and yankee high-yield bonds, including deferred interest bonds and payment-in-kind bonds and securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB/Baa3, but are not in default. The Merrill Lynch U.S. High Yield Master II Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP PIMCO Total Return Portfolio Subadvised by: Pacific Investment Management Company LLC (PIMCO) December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-0.20	%	4.07	%	5.97	%
Barclays Capital U.S. Aggregate Bond Index	5.24		4.65		6.09

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP PIMCO Total Return Portfolio underperformed its benchmark index, the Barclays Capital U.S. Aggregate Bond Index (the Index), which posted a gain.

A burst housing bubble in the United States had led to a collapse in the subprime mortgage market that escalated into a full-scale credit crisis in which financial institutions continued to take massive write-downs and losses in 2008. The U.S. economy, mired in one of its worst recessions since the Great Depression, shed some 2.5 million jobs in 2008. The Federal Reserve (the Fed) tried to boost growth by cutting its target for the overnight bank lending rate from 4.25% in January to a range of zero to 0.25% in December. The Fed and the U.S. Department of the Treasury employed unconventional measures to encourage commercial banks and finance firms to lend, yet it remained difficult for businesses and individuals to borrow money.

Preservation of capital became a top priority of investors who fled to super safe U.S. Treasury securities, enabling that market to post a gain for 2008 that outperformed all other U.S. bond markets. Some aspects of PIMCO’s allocation strategy caused the Portfolio to underperform “the Index”. Most notably, the Portfolio had a larger exposure than “the Index” to mortgage-backed securities of federal agencies, one of the markets that underperformed the U.S. Treasury market. As the financial system deleveraged — sold positions to pay off debt — large financial institutions shed their most liquid assets to raise cash. In most cases, these assets were mortgage-backed securities of federal agencies.

The Portfolio benefited from having a smaller exposure than “the Index” to investment-grade corporate bonds, a market that dramatically underperformed the U.S. Treasury market in 2008. However, security selection among investment-grade corporate bonds did not work well because PIMCO emphasized bonds of financial companies. This was one of the worst performing areas of the investment-grade corporate bond market as many commercial banks, a major Wall Street firm, and some other financial institutions collapsed in 2008.

Finally, the Portfolio was positioned to benefit from an anticipated normalization in the market for interest rate swaps, agreements between two parties to exchange one stream of interest payments for another over a set period of time. But market conditions deteriorated in November, detracting from its performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital U.S. Aggregate Bond Index is an unmanaged index comprised of more than 5,000 government and corporate bonds. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Prudential U.S. Emerging Growth Portfolio Subadvised by: Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio: Class I	-36.23	%	3.14	%	-3.03	%
Portfolio: Class II	-36.24		2.84		0.02
S&P Midcap 400 Index	-36.23		-0.08		1.20
Russell Midcap® Growth Index	-44.32		-2.33		-6.70

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION¹

Portfolio (Class I) inception: 9/22/2000. Portfolio (Class II) inception: 7/9/2001. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class I). The Russell Midcap^® Growth Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Prudential U.S. Emerging Growth Portfolio outperformed the Russell Midcap^® Growth Index (the Index).

For the year, Jennison successfully avoided some of the worst performing technology companies in the Index, thus enhancing relative returns. In addition, individual holdings declined less than the Index. One of the top performers was a real estate investment trust (REIT), that owns, manages, and finances a portfolio of mortgage-backed securities (MBS) guaranteed by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Its stock price increased significantly since the Portfolio initiated the position in August. Despite the volatile environment, the company announced solid financial results for the third quarter and kept its leverage low relative to historical levels. This company also benefited from widening spreads in the MBS market. The company avoids assuming credit risk by investing in government-insured mortgages and profits from an increase in the spread between long- and short-term rates.

The Portfolio’s conservative risk posture mitigated negative returns. More recently, the subadviser has been finding opportunities in more “conservative” stocks with lower beta factors. (Beta measures a stock’s volatility to the degree in which its price fluctuates in relation to the overall market). In 2008, a year that saw large negative returns across the board, lower beta stocks generally declined less than more aggressive stocks. Subsequently, an overexposure to more conservative stocks benefited the portfolio.

As the flight to quality intensified throughout the year, the subadviser’s overexposure to leverage (measures of a company’s debt to capital) detracted from returns. On the positive side, an underexposure to earnings variation (a measure of the volatility in a company’s earnings and cash flow) helped performance.

Certain sector weightings affected performance. An overweight in the healthcare sector, specifically the medical services industry, contributed negatively to performance for the year; however, an overweight in technology and an underweight in the consumer services sector helped pare losses. Within the technology sector, an overweight to the Internet industry contributed positively to relative performance.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15% respectively of the average daily net assets of the Class II shares.

S&P Midcap 400 Index is a widely accepted, unmanaged total return index of 400 domestic stocks measuring the performance of the midsize company segment of the U.S. stock market. Russell Midcap Growth Index is a market cap-weighted index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Small Cap Value Portfolio Subadvised by: ClearBridge Advisors, LLC, Goldman Sachs Asset Management L.P. December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-30.50	%	-0.63	%	2.91	%
Russell 2500™ Index	-36.79		-0.98		1.28
Russell 2000® Value Index	-28.92		0.27		0.78

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 9/22/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. The Russell 2000^® Value and Russell 2500^TM Index are trademark/service marks of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Small Cap Value Portfolio produced a total return that was slightly below its style benchmark, the Russell 2000^® Value Index (the Index).

The Portfolio is subadvised by Goldman Sachs and ClearBridge Advisors. The Goldman portion follows a traditional small-cap value strategy with an emphasis on quality, purchasing well-positioned businesses at attractive valuations. ClearBridge follows a relative value approach that seeks “undiscovered” companies at lower valuations compared to peers.

Overall, the Portfolio’s performance lagged the Index due to stock- and sector-specific factors. The Portfolio was less sensitive to overall market movements, which mitigated its negative return, particularly in June, September, October, and early November, when stocks abruptly declined in value.

Stock-specific factors detracted from relative results. Holdings in the energy reserves, restaurants, and banks industries performed weakly and detracted from relative performance. However, asset selection in the oil services and financial services industries fared well.

Certain sector-specific positions also were not rewarded. The Portfolio’s underexposure to the financial sector and overexposure to the energy and technology sectors hurt performance relative to the Index. Conversely, an underexposure to consumer services augmented returns, which partially offset positions that underperformed.

The Portfolio’s relatively low beta means that it is less sensitive to price fluctuations in the broad market. (Beta measures a stock’s volatility to the degree in which its price fluctuates in relation to the overall market). In 2008, this more conservative risk posture served as a strong tailwind, propping up performance during the significant downturn in the broad market.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Russell 2500 Index is a market cap-weighted index that measures the performance of the 2,500 smallest companies in the Russell 3000 Index, which represents approximately 17% of the total market capitalization of the Russell 3000 Index. Russell 2000 Value Index is an unmanaged index that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, SP Strategic Partners Focused Growth Portfolio Subadvised by: AllianceBernstein LP, Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio: Class I	-38.42	%	-2.13	%	-6.59	%
Portfolio: Class II	-38.54		-2.53		-5.24
S&P 500 Index	-36.99		-2.19		-3.76
Russell 1000® Growth Index	-38.44		-3.42		-8.24

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION¹

Portfolio (Class I) inception: 9/22/2000. Portfolio (Class II) inception: 1/12/2001. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class I). The Russell 1000^® Growth Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the SP Strategic Partners Focused Growth Portfolio performed in line with the style-appropriate Russell 1000^® Growth Index (the Index).

The SP Strategic Partners Focused Growth Portfolio is subadvised by Jennison Associates and AllianceBernstein LP. Jennison Associates uses a bottom-up approach to identify attractive growth companies. AllianceBernstein LP is an “earnings driven” investor, focusing on the early recognition of change on the premise that value is created through the dynamics of changing company, industry, and economic fundamentals.

Generally, risk exposures posed the greatest challenge to the Portfolio’s relative performance. Active managers faced difficulty in outperforming benchmarks during the year. In 2008, markets were driven by broad economic factors and deleveraging (selling positions to reduce debt) rather than valuation and company fundamentals. The systemic shocks from the financial crisis increased correlations (price movements between stocks) to all-time highs. Often managers perform well in periods of rising volatility, in which uncertainty leads to greater variation in stock returns. At some point it is expected that the historical correlations between stocks will subside and valuation and fundamentals will drive performance, providing opportunities for skilled managers to outperform.

Specifically, risk factors that detracted included an overexposure to momentum stocks (companies experiencing recent price strength). Other exposures that hurt relative performance included a bias toward stocks with larger market capitalizations and lower earnings yield, in addition to companies that have a greater variability of earnings (earnings variation) than the Index.

For both subadvisers, stock selection in basic materials, industrials, healthcare, and financials helped drive performance.

Individual companies that helped performance were in biotechnology, chemicals, electronic equipment/telecommunications, and financial services. Positions detracting from relative results included a medical supplier, a pharmaceutical manufacturer, and a well-known Internet search engine.

Sector exposure in the Portfolio proved to be neutral. An underweight in energy hurt performance for the period, while an overweight in healthcare helped.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15% respectively of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000 Growth Index is a market cap-weighted index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

Prudential Series Fund Presentation of Portfolio Holdings — unaudited December 31, 2008

SP Aggressive Growth Asset Allocation
Five Largest Holdings     (% of Net Assets)
Advanced Series Trust-Large- Cap Value Portfolio	36.4%
PSF-Jennison Portfolio (Class I)	18.3%
Advanced Series Trust-Marsico Capital Growth Portfolio	18.3%
PSF-SP International Growth Portfolio (Class I)	8.5%
PSF-SP International Value Portfolio	8.4%

SP Balanced Asset Allocation
Five Largest Holdings     (% of Net Assets)
PSF-SP PIMCO Total Return Portfolio	30.4%
Advanced Series Trust-AST Large-Cap Value Portfolio	22.0%
Advanced Series Trust-AST Marsico Capital Growth Portfolio	11.1%
PSF-Jennison Portfolio (Class I)	11.1%
Advanced Series Trust-AST Western Asset Core Plus Bond Portfolio	7.5%

SP Conservative Asset Allocation
Five Largest Holdings     (% of Net Assets)
PSF-SP PIMCO Total Return Portfolio	46.9%
Advanced Series Trust-Large Cap Value Portfolio	14.7%
Advanced Series Trust-Western Asset Core Plus Bond Portfolio	11.5%
Advanced Series Trust-Marisco Capital Growth Portfolio	7.5%
PSF-Jennison Portfolio (Class I)	7.5%

SP Davis Value
Five Largest Holdings     (% of Net Assets)
Costco Wholesale Corp.	5.1%
Berkshire Hathaway, Inc. (Class A Stock)	5.0%
Wells Fargo & Co.	4.4%
JPMorgan Chase & Co.	4.3%
ConocoPhillips	4.3%

SP Growth Asset Allocation
Five Largest Holdings     (% of Net Assets)
Advanced Series Trust-Large Cap Value Portfolio	29.3%
Advanced Series Trust-Marisco Capital Growth Portfolio	14.8%
PSF-SP PIMCO Total Return Portfolio	14.8%
PSF-Jennison Portfolio (Class I)	14.8%
PSF-SP International Growth Portfolio (Class I)	7.6%

SP International Growth
Five Largest Holdings     (% of Net Assets)
Teva Pharmaceutical Industries Ltd., ADR (Israel)	3.5%
Nintendo Co. Ltd. (Japan)	3.4%
Nestle SA (Switzerland)	3.2%
Roche Holding AG (Switzerland)	3.1%
BG Group PLC (United Kingdom)	2.3%

SP International Value
Five Largest Holdings    (% of Net Assets)
Teva Pharmaceutical Industries Ltd., ADR (Israel)	2.7%
Nestle SA (Switzerland)	2.6%
Novo Nordisk A/S (Class B Stock) (Denmark)	2.4%
Roche Holding AG (Switzerland)	2.3%
Rogers Communications, Inc. (Class B Stock) (Canada)	1.9%

SP Mid Cap Growth
Five Largest Holdings     (% of Net Assets)
DeVry, Inc.	2.3%
Strayer Education, Inc.	2.2%
Stericycle, Inc.	2.0%
Myriad Genetics, Inc.	1.9%
WMS Industries, Inc.	1.8%

SP PIMCO High Yield
Allocation     (% of Net Assets)
Corporate Bonds	80.0%
Bank Notes	6.0%
U.S. Government Mortgage-Backed Obligations	3.1%
Municipal Bonds	2.5%
Collateralized Mortgage Obligations	1.4%

SP PIMCO Total Return
Allocation    (% of Net Assets)
U.S. Government Mortgage-Backed Obligations	73.1%
Corporate Bonds	41.6%
U.S Treasury Obligations	36.3%
Municipal Bonds	6.8%
Collateralized Mortgage Obligations	6.7%

SP Prudential U.S. Emerging Growth
Five Largest Holdings     (% of Net Assets)
Annaly Capital Management, Inc.	4.0%
Southwestern Energy Co.	3.4%
NII Holdings, Inc.	3.0%
DaVita, Inc.	3.0%
Iron Mountain, Inc.	2.4%

SP Small Cap Value
Five Largest Holdings     (% of Net Assets)
iShares Russell 2000 Value Index Fund	2.0%
Meadowbrook Insurance Group, Inc.	1.2%
Lawson Software, Inc.	1.1%
El Paso Electric Co.	1.1%
Allied World Assurance Holdings Ltd. (Bermuda)	1.0%

SP Strategic Partners Focused Growth
Five Largest Holdings     (% of Net Assets)
Gilead Sciences, Inc.	7.1%
QUALCOMM, Inc.	6.3%
Google, Inc. (Class A Stock)	6.3%
Genentech, Inc.	5.3%
Cisco Systems, Inc.	4.7%

For a complete list of holdings, please refer to the Schedule of Investments section of this report. Holdings reflect only long-term investments. Holdings/Issues/Sectors are subject to change.

The Prudential Series Fund Fees and Expenses — unaudited December 31, 2008

As a contract owner investing in Portfolios of the Fund through a variable annuity or variable life contract, you incur ongoing costs, including management fees, and other Portfolio expenses. 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 investment options. This example does not reflect fees and charges under your variable annuity or variable life contract. If contract charges were included, the costs shown below would be higher. Please consult the prospectus for your contract for more information about contract fees and charges.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2008 through December 31, 2008.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the Portfolio expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six-Month Period” to estimate the Portfolio expenses you paid on your account during this period. As noted above, the table does not reflect variable contract fees and charges.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio and other investment options. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other investment options.

Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any contract fees and charges, such as sales charges (loads), insurance charges or administrative charges. Therefore the second line of the table is useful to compare ongoing investment option costs only, and will not help you determine the relative total costs of owning different contracts. In addition, if these contract fee and charges were included, your costs would have been higher.

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio Based on the Six-Month period		Expenses Paid During the Six-Month Period
SP Aggressive Growth Asset Allocation (Class I)	Actual	$	1,000.00	$	657.60	1.03	%	$	4.29
	Hypothetical	$	1,000.00	$	1,019.96	1.03	%	$	5.23
SP Balanced Asset Allocation (Class I)	Actual	$	1,000.00	$	772.70	1.12	%	$	4.99
	Hypothetical	$	1,000.00	$	1,019.51	1.12	%	$	5.69
SP Conservative Asset Allocation (Class I)	Actual	$	1,000.00	$	839.50	1.22	%	$	5.64
	Hypothetical	$	1,000.00	$	1,019.00	1.22	%	$	6.19
SP Davis Value (Class I)	Actual	$	1,000.00	$	676.70	0.82	%	$	3.46
	Hypothetical	$	1,000.00	$	1,021.01	0.82	%	$	4.17
SP Growth Asset Allocation (Class I)	Actual	$	1,000.00	$	708.20	1.02	%	$	4.38
	Hypothetical	$	1,000.00	$	1,020.01	1.02	%	$	5.18
SP International Growth (Class I)	Actual	$	1,000.00	$	563.70	1.01	%	$	3.97
	Hypothetical	$	1,000.00	$	1,020.06	1.01	%	$	5.13
SP International Growth (Class II)	Actual	$	1,000.00	$	563.50	1.41	%	$	5.54
	Hypothetical	$	1,000.00	$	1,018.05	1.41	%	$	7.15
SP International Value (Class I)	Actual	$	1,000.00	$	650.50	1.04	%	$	4.31
	Hypothetical	$	1,000.00	$	1,019.91	1.04	%	$	5.28
SP Mid Cap Growth (Class I)	Actual	$	1,000.00	$	642.30	0.90	%	$	3.72
	Hypothetical	$	1,000.00	$	1,020.61	0.90	%	$	4.57
SP PIMCO High Yield (Class I)	Actual	$	1,000.00	$	759.00	0.77	%	$	3.40
	Hypothetical	$	1,000.00	$	1,021.27	0.77	%	$	3.91
SP PIMCO Total Return (Class I)	Actual	$	1,000.00	$	995.80	2.47	%	$	12.39
	Hypothetical	$	1,000.00	$	1,012.72	2.47	%	$	12.50
SP Prudential U.S. Emerging Growth (Class I)	Actual	$	1,000.00	$	664.70	0.69	%	$	2.89
	Hypothetical	$	1,000.00	$	1,021.67	0.69	%	$	3.51

The Prudential Series Fund Fees and Expenses — unaudited (continued) December 31, 2008

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio Based on the Six-Month period		Expenses Paid During the Six-Month Period
SP Prudential U.S. Emerging Growth (Class II)	Actual	$	1,000.00	$	664.70	1.09	%	$	4.56
	Hypothetical	$	1,000.00	$	1,019.66	1.09	%	$	5.53
SP Small Cap Value (Class I)	Actual	$	1,000.00	$	757.70	0.99	%	$	4.37
	Hypothetical	$	1,000.00	$	1,020.16	0.99	%	$	5.03
SP Strategic Partners Focused Growth (Class I)	Actual	$	1,000.00	$	657.50	1.30	%	$	5.42
	Hypothetical	$	1,000.00	$	1,018.60	1.30	%	$	6.60
SP Strategic Partners Focused Growth (Class II)	Actual	$	1,000.00	$	656.70	1.70	%	$	7.08
	Hypothetical	$	1,000.00	$	1,016.59	1.70	%	$	8.62

* Portfolio 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 December 31, 2008, and divided by the 366 days in the Portfolio’s fiscal year ended December 31, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.

	SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.0%	Shares	Value (Note 2)
Affiliated Mutual Funds
Advanced Series Trust —
Global Real Estate Portfolio(a)	220,612	$	1,153,801
Large-Cap Value Portfolio	3,812,326		39,114,462
Marsico Capital Growth Portfolio	1,559,885		19,732,540
Small-Cap Growth Portfolio(a)	313,499		3,511,187
The Prudential Series Fund —
Jennison Portfolio (Class I)	1,343,294		19,732,990
Money Market Portfolio	202		2,022
Natural Resources Portfolio (Class I)	52,055		1,233,705
SP International Growth Portfolio (Class I)	2,651,258		9,146,840
SP International Value Portfolio	1,824,920		9,033,354
SP Small Cap Value Portfolio	508,154		3,861,972
TOTAL LONG-TERM INVESTMENTS (cost $149,241,079)			106,522,873
SHORT-TERM INVESTMENT — 1.1%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $1,140,231) (Note 4)	1,140,231		1,140,231
TOTAL INVESTMENTS — 100.1% (cost $150,381,310)(b)			107,663,104
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.1)%			(77,509	)
NET ASSETS — 100.0%		$	107,585,595

(a) Non-income producing security.

(b) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the underlying portfolios in which the Portfolio invests.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	107,663,104	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	107,663,104	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The investment allocation of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Investment Type
Large/Mid-Cap Growth	36.6	%
Large/Mid-Cap Value	36.4
International Growth	8.5
International Value	8.4
Small-Cap Value	3.6
Small-Cap Growth	3.3
Sector	2.2
Money Market	—	(c)
	99.0
Short-Term Investment	1.1
Liabilities in excess of other assets	(0.1	)
	100.0	%

(c) Less than 0.05%.

SEE NOTES TO FINANCIAL STATEMENTS.

A1

SP AGGRESSIVE GROWTH ASSET ALLOCATION PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Affiliated investments, at value (cost $150,381,310)	$	107,663,104
Cash		6,809
Receivable for Series shares sold		51,105
Prepaid expenses		2,119
Dividends receivable		377
Total Assets		107,723,514
LIABILITIES
Payable for investments purchased		70,000
Accrued expenses and other liabilities		41,987
Payable for Series shares repurchased		20,361
Management fee payable		4,394
Deferred trustees’ fees		670
Affiliated transfer agent fee payable		507
Total Liabilities		137,919
NET ASSETS	$	107,585,595
Net assets were comprised of:
Paid-in capital	$	150,938,716
Retained earnings		(43,353,121	)
Net assets, December 31, 2008	$	107,585,595
Net asset value and redemption price per share, $107,585,595 / 19,309,062 outstanding shares of beneficial interest	$	5.57

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Affiliated dividend income	$	1,805,854
EXPENSES
Management fee		79,763
Custodian’s fees and expenses		60,000
Shareholders’ reports		49,000
Audit fee		17,000
Trustees’ fees		8,000
Legal fees and expenses		7,000
Transfer agent’s fee and expenses (including affiliated expense of $3,000) (Note 4)		3,000
Insurance expenses		2,000
Miscellaneous		10,596
Total expenses		236,359
NET INVESTMENT INCOME		1,569,495
NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATED INVESTMENTS
Net realized loss on investment transactions		(12,562,397	)
Net capital gain distributions received		10,642,207
		(1,920,190	)
Net change in unrealized appreciation (depreciation) on investments		(81,110,463	)
NET LOSS ON INVESTMENTS		(83,030,653	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(81,461,158	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	1,569,495		$	1,717,713
Net realized gain (loss) on investment transactions		(1,920,190	)		17,039,733
Net change in unrealized appreciation (depreciation) on investments		(81,110,463	)		(738,074	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(81,461,158	)		18,019,372
DISTRIBUTIONS:		(18,757,446	)		(11,080,580	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,381,549 and 1,251,048 shares, respectively]		11,065,156			13,719,809
Series shares issued in reinvestment of distributions [2,114,706 and 1,036,537 shares, respectively]		18,757,446			11,080,580
Series shares repurchased [3,291,598 and 2,543,081 shares, respectively]		(27,308,057	)		(28,055,738	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		2,514,545			(3,255,349	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(97,704,059	)		3,683,443
NET ASSETS:
Beginning of year		205,289,654			201,606,211
End of year	$	107,585,595		$	205,289,654

SEE NOTES TO FINANCIAL STATEMENTS.

A2

	SP BALANCED ASSET ALLOCATION PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.5%	Shares	Value (Note 2)
AFFILIATED MUTUAL FUNDS
Advanced Series Trust —
Global Real Estate Portfolio(a)	1,168,844	$	6,113,054
Large-Cap Value Portfolio	18,116,975		185,880,161
Marsico Capital Growth Portfolio	7,433,798		94,037,544
Small-Cap Growth Portfolio(a)	1,487,869		16,664,130
Western Asset Core Plus Bond Portfolio	6,688,692		63,275,031
The Prudential Series Fund —
Jennison Portfolio (Class I)	6,386,268		93,814,281
Money Market Portfolio	3,555		35,553
Natural Resources Portfolio (Class I)	262,458		6,220,258
SP International Growth Portfolio (Class I)	14,044,654		48,454,056
SP International Value Portfolio	9,490,607		46,978,503
SP PIMCO High Yield Portfolio	697,673		4,674,412
SP PIMCO Total Return Portfolio	23,244,337		257,082,365
SP Small Cap Value Portfolio	2,332,865		17,729,776
TOTAL LONG-TERM INVESTMENTS (cost $1,054,248,010)			840,959,124
SHORT-TERM INVESTMENT — 0.5%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $3,895,359) (Note 4)	3,895,359		3,895,359
TOTAL INVESTMENTS — 100.0% (cost $1,058,143,369)(b)			844,854,483
OTHER ASSETS IN EXCESS OF LIABILITIES			168,309
NET ASSETS — 100.0%		$	845,022,792

(a) Non-income producing security.

(b) Prudential Investments LLC, the manager of the Portfolio, also serves as manager/co-manager of the underlying portfolios in which the Portfolio invests.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	844,854,483	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	844,854,483	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the valuation of investments.

The investment allocation of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of December 31, 2008 were as follows:

Investment Type
Core Bonds	37.9	%
Large/Mid-Cap Growth	22.2
Large/Mid-Cap Value	22.0
International Growth	5.7
International Value	5.6
Small-Cap Value	2.1
Small-Cap Growth	2.0
Sector	1.4
High Yield	0.6
Money Market	—	(c)
	99.5
Short-Term Investment	0.5
Other assets in excess of liabilities	—	(c)
	100.0	%

(c) Less than 0.05%.

SEE NOTES TO FINANCIAL STATEMENTS.

A3

SP BALANCED ASSET ALLOCATION PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Affiliated investments, at value (cost $1,058,143,369)	$	844,854,483
Cash		6,438
Receivable for investments sold		1,700,017
Prepaid expenses		14,866
Dividends receivable		1,461
Receivable for Series shares sold		1,180
Total Assets		846,578,445
LIABILITIES
Payable for investments purchased		1,300,001
Payable for Series shares repurchased		177,979
Accrued expenses and other liabilities		41,729
Management fee payable		34,651
Deferred trustees’ fees		825
Transfer agent fee payable		468
Total Liabilities		1,555,653
NET ASSETS	$	845,022,792
Net assets were comprised of:
Paid-in capital	$	1,028,087,844
Retained earnings		(183,065,052	)
Net assets, December 31, 2008	$	845,022,792
Net asset value and redemption price per share, $845,022,792 / 108,103,476 outstanding shares of beneficial interest	$	7.82

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Affiliated dividend income	$	25,762,393
EXPENSES
Management fee		571,785
Shareholders’ reports		68,000
Custodian’s fees and expenses		57,000
Audit fee		17,000
Insurance expenses		15,000
Trustees’ fees		8,000
Legal fees and expenses		7,000
Commitment fee on syndicated credit agreement		5,000
Transfer agent’s fee and expenses (including affiliated expense of $2,700) (Note 4)		3,000
Miscellaneous		7,367
Total expenses		759,152
NET INVESTMENT INCOME		25,003,241
NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATED INVESTMENTS
Net realized loss on investment transactions		(40,204,556	)
Net capital gain distributions received		46,843,031
		6,638,475
Net change in unrealized appreciation (depreciation) on investments		(399,640,992	)
NET LOSS ON INVESTMENTS		(393,002,517	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(367,999,276	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	25,003,241		$	28,163,670
Net realized gain (loss) on investments		6,638,475			85,374,112
Net change in unrealized appreciation (depreciation) on investments		(399,640,992	)		12,573,441
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(367,999,276	)		126,111,223
DISTRIBUTIONS		(113,537,782	)		(69,161,551	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,614,224 and 2,822,407 shares, respectively]		16,097,836			33,772,326
Series shares issued in reinvestment of distributions [10,927,602 and 5,792,424 shares, respectively]		113,537,782			69,161,551
Series shares repurchased [19,930,907 and 14,463,180 shares, respectively]		(194,105,168	)		(175,165,503	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(64,469,550	)		(72,231,626	)
TOTAL DECREASE IN NET ASSETS		(546,006,608	)		(15,281,954	)
NET ASSETS:
Beginning of year		1,391,029,400			1,406,311,354
End of year	$	845,022,792		$	1,391,029,400

SEE NOTES TO FINANCIAL STATEMENTS.

A4

	SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.6%	Shares	Value (Note 2)
Affiliated Mutual Funds
Advanced Series Trust —
Global Real Estate Portfolio(a)	360,396	$	1,884,871
Large Cap Value	6,048,930		62,062,022
Marsico Capital Growth Portfolio	2,508,071		31,727,103
Small Cap Growth Portfolio(a)	505,308		5,659,453
Western Asset Core Plus Bond Portfolio	5,146,262		48,683,640
The Prudential Series Fund —
Jennison Portfolio (Class I)	2,146,612		31,533,731
Money Market Portfolio	23,699		236,993
Natural Resources Portfolio (Class I)	78,883		1,869,532
SP International Growth Portfolio (Class I)	4,557,686		15,724,016
SP International Value Portfolio	3,021,872		14,958,265
SP PIMCO High Yield Portfolio	330,386		2,213,588
SP PIMCO Total Return Portfolio	17,880,398		197,757,203
SP Small Cap Value Portfolio	775,793		5,896,027
TOTAL LONG-TERM INVESTMENTS (cost $486,999,609)			420,206,444
SHORT-TERM INVESTMENT — 0.4%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $1,687,981) (Note 4)	1,687,981		1,687,981
TOTAL INVESTMENTS — 100.0% (cost $488,687,590)(b)			421,894,425
LIABILITIES IN EXCESS OF OTHER ASSETS			(94,087	)
NET ASSETS — 100.0%		$	421,800,338

(a) Non-income producing security.

(b) Prudential Investments LLC, the manager of the Portfolio, also serves as manager/co-manager of the underlying portfolios in which the Portfolio invests.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	421,894,425	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	421,894,425	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the valuation of investments.

The investment allocation of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Investment Type
Core Bonds	58.4	%
Large/Mid-Cap Growth	15.0
Large/Mid-Cap Value	14.7
International Growth	3.7
International Value	3.6
Small-Cap Value	1.4
Small-Cap Growth	1.3
Sector	0.9
High Yield	0.5
Money Market	0.1
	99.6
Short-Term Investment	0.4
Liabilities in excess of other assets	—	(c)
	100.0	%

(c) Less than 0.05%.

SEE NOTES TO FINANCIAL STATEMENTS.

A5

SP CONSERVATIVE ASSET ALLOCATION PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Affiliated investments, at value (cost $488,687,590)	$	421,894,425
Cash		6,465
Receivable for investments sold		800,086
Prepaid expenses and other assets		6,849
Receivable for Series shares sold		3,935
Dividends receivable		627
Total Assets		422,712,387
LIABILITIES
Payable for Series shares repurchased		454,210
Payable for investments purchased		400,008
Accrued expenses and other liabilities		39,195
Management fee payable		17,392
Deferred trustees’ fees		769
Affiliated transfer agent fee payable		475
Total Liabilities		912,049
NET ASSETS	$	421,800,338
Net assets were comprised of:
Paid-in capital	$	477,462,031
Retained earnings		(55,661,693	)
Net assets, December 31, 2008	$	421,800,338
Net asset value and redemption price per share, $421,800,338 / 47,458,627 outstanding shares of beneficial interest	$	8.89

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Affiliated dividend income	$	15,228,385
EXPENSES
Management fee		268,064
Custodian’s fees and expenses		56,000
Shareholders’ reports		48,000
Audit fee		17,000
Legal fees and expenses		8,000
Trustees’ fees		8,000
Insurance expenses		7,000
Commitment fee on syndicated credit agreement		3,000
Transfer agent’s fees and expenses (including affiliated expense of $2,700) (Note 4)		3,000
Miscellaneous		8,471
Total expenses		426,535
NET INVESTMENT INCOME		14,801,850
NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATED INVESTMENTS
Net realized loss on investments		(17,419,708	)
Net capital gain distributions received		14,441,790
		(2,977,918	)
Net change in unrealized appreciation (depreciation) on investments		(129,232,252	)
NET LOSS ON INVESTMENTS		(132,210,170	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(117,408,320	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	14,801,850		$	16,780,695
Net realized gain (loss) on investments		(2,977,918	)		27,871,601
Net change in unrealized appreciation (depreciation) on investments		(129,232,252	)		11,875,158
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(117,408,320	)		56,527,454
DISTRIBUTIONS:		(44,652,296	)		(32,125,621	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,279,452 and 1,460,726 shares, respectively]		14,143,074			17,545,432
Series shares issued in reinvestment of distributions [4,149,842 and 2,686,089 shares, respectively]		44,652,296			32,125,621
Series shares repurchased [9,358,699 and 7,029,208 shares, respectively]		(96,271,253	)		(85,525,482	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(37,475,883	)		(35,854,429	)
TOTAL DECREASE IN NET ASSETS		(199,536,499	)		(11,452,596	)
NET ASSETS:
Beginning of year		621,336,837			632,789,433
End of year	$	421,800,338		$	621,336,837

SEE NOTES TO FINANCIAL STATEMENTS.

A6

	SP DAVIS VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 95.9%
COMMON STOCKS — 95.8%	Shares	Value (Note 2)
Automobile Retailers — 0.4%
CarMax, Inc.*(a)	81,600	$	643,008
Beverages — 2.3%
Diageo PLC, ADR (United Kingdom)	42,800		2,428,472
Heineken Holding NV (Netherlands)	51,206		1,452,758
			3,881,230
Broadcasting — 1.1%
Grupo Televisa SA, ADR (Mexico)	117,000		1,747,980
Business Services — 1.8%
Iron Mountain, Inc.*(a)	120,300		2,975,019
Chemicals — 0.5%
Monsanto Co.	11,500		809,025
Commercial Banks — 1.9%
Bank of New York Mellon Corp. (The)	111,800		3,167,294
Computers — 1.4%
Dell, Inc.*	52,600		538,624
Hewlett-Packard Co.	51,200		1,858,048
			2,396,672
Containers & Packaging — 1.6%
Sealed Air Corp.	177,810		2,656,481
Cosmetics & Toiletries — 0.3%
Avon Products, Inc.	20,800		499,824
Diversified Financial Services — 0.8%
E*Trade Financial Corp.*(a)	16,200		18,630
Goldman Sachs Group, Inc. (The)	6,620		558,662
Merrill Lynch & Co., Inc.	61,462		715,417
			1,292,709
Diversified Metals — 0.5%
BHP Billiton PLC (United Kingdom)	30,300		563,717
Rio Tinto PLC (United Kingdom)	10,800		231,363
			795,080
Electric — 0.2%
AES Corp. (The)*	42,800		352,672
Electrical Equipment — 0.1%
ABB Ltd., ADR (Switzerland)	15,750		236,408
Electronic Equipment & Instruments — 1.2%
Agilent Technologies, Inc.*	78,740		1,230,706
Tyco Electronics Ltd.(a)	46,378		751,788
			1,982,494
Entertainment & Leisure — 0.8%
Harley-Davidson, Inc.(a)	74,900		1,271,053
Environmental Control — 0.4%
Sino-Forest Corp. (Canada)*(g)	92,200		737,152
Financial – Bank & Trust — 0.2%
Wachovia Corp.	56,407		312,495
Financial Services — 10.0%
American Express Co.(a)	214,860		3,985,653
Ameriprise Financial, Inc.	38,160		891,418
Discover Financial Services	12,000		114,360
H&R Block, Inc.	116,800		2,653,696
Moody’s Corp.(a)	50,900		1,022,581
State Street Corp.	6,180		243,059
Visa, Inc. (Class A Stock)	6,590		345,646
Wells Fargo & Co.(a)	247,500		7,296,300
			16,552,713

COMMON STOCKS (continued)	Shares	Value (Note 2)
Food & Staples Retailing — 0.1%
Whole Foods Market, Inc.(a)	15,600	$	147,264
Foods — 0.3%
Hershey Co. (The)	11,960		415,490
Healthcare Providers & Services — 2.6%
Cardinal Health, Inc.	36,400		1,254,708
Express Scripts, Inc.*	28,000		1,539,440
UnitedHealth Group, Inc.	54,900		1,460,340
			4,254,488
Household Durables — 0.3%
Garmin Ltd. (Cayman Islands)	11,000		210,870
Hunter Douglas NV (Netherlands)	8,453		276,127
			486,997
Household Products — 1.7%
Procter & Gamble Co.	45,030		2,783,755
Industrial Conglomerates — 1.1%
Siemens AG (Germany)	10,200		746,922
Tyco International Ltd. (Bermuda)	46,228		998,525
			1,745,447
Insurance — 12.1%
American International Group, Inc.(a)	191,320		300,372
Berkshire Hathaway, Inc. (Class A Stock)*	86		8,307,600
Hartford Financial Service Group, Inc. (The)(a)	34,400		564,848
Loews Corp.	131,400		3,712,050
Markel Corp.*(a)	534		159,666
MBIA, Inc.*(a)	12,900		52,503
NIPPONKOA Insurance Co. Ltd. (Japan)	171,800		1,336,570
Principal Financial Group, Inc.(a)	15,200		343,064
Progressive Corp. (The)(a)	229,000		3,391,490
Sun Life Financial, Inc. (Canada)	9,100		210,574
Transatlantic Holdings, Inc.	39,075		1,565,345
			19,944,082
Internet & Catalog Retail — 0.1%
Liberty Media Holding Corp. — Interactive (Class A Stock)*	38,925		121,446
Internet Services — 0.9%
eBay, Inc.*(a)	23,400		326,664
Google, Inc. (Class A Stock)*	3,950		1,215,218
			1,541,882
Internet Software & Services — 0.5%
Amazon.com, Inc.*(a)	15,700		805,096
Investment Firms — 4.6%
Citigroup, Inc.(a)	53,270		357,442
JPMorgan Chase & Co.	224,516		7,078,989
Morgan Stanley(a)	8,000		128,320
			7,564,751
Machinery — 0.3%
PACCAR, Inc.(a)	18,820		538,252
Materials — 1.2%
Martin Marietta Materials, Inc.(a)	21,100		2,048,388

SEE NOTES TO FINANCIAL STATEMENTS.

A7

	SP DAVIS VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Media — 3.9%
Comcast Corp. (Special Class A Stock)	247,870	$	4,003,101
Liberty Media Corp. — Entertainment (Class A Stock)*	31,100		543,628
News Corp. (Class A Stock)	211,300		1,920,717
			6,467,446
Media & Entertainment
WPP PLC, ADR (United Kingdom)	1,300		38,467
Metals & Mining — 0.6%
China Coal Energy Co. (Class H Stock) (Hong Kong)	1,140,700		921,863
Mining — 0.9%
Vulcan Materials Co.(a)	21,100		1,468,138
Multi-Line Retail — 0.1%
Sears Holdings Corp.*(a)	2,550		99,119
Oil, Gas & Consumable Fuels — 16.7%
Canadian Natural Resources Ltd. (Canada)(a)	60,600		2,422,788
ConocoPhillips	136,468		7,069,043
Devon Energy Corp.	83,640		5,495,984
EOG Resources, Inc.	71,170		4,738,499
Occidental Petroleum Corp.	113,900		6,832,861
OGX Petroleo E Gas Participacoes SA (Brazil)*	800		180,449
Transocean Ltd.*(a)	18,808		888,678
			27,628,302
Pharmaceuticals — 1.8%
Johnson & Johnson	17,500		1,047,025
Schering-Plough Corp.	116,600		1,985,698
			3,032,723
Real Estate Investment Trust — 0.5%
Brookfield Asset Management, Inc. (Canada)(a)	54,400		830,688
Real Estate Operation & Development — 0.4%
Hang Lung Group Ltd. (Hong Kong)	240,000		733,163

COMMON STOCKS (continued)	Shares	Value (Note 2)
Retail & Merchandising — 8.1%
Bed Bath & Beyond, Inc.*(a)	59,000	$	1,499,780
Costco Wholesale Corp.	159,900		8,394,750
CVS Caremark Corp.	119,910		3,446,213
			13,340,743
Semiconductors & Semiconductor Equipment — 1.4%
Texas Instruments, Inc.	146,400		2,272,128
Software — 3.3%
Dun & Bradstreet Corp. (The)(a)	28,600		2,207,920
Microsoft Corp.	168,280		3,271,363
			5,479,283
Specialty Retail — 0.6%
Lowe’s Cos., Inc.	42,800		921,056
Telecommunications — 0.7%
Cisco Systems, Inc.*	56,400		919,320
Sprint Nextel Corp.*	158,000		289,140
			1,208,460
Tobacco — 3.3%
Altria Group, Inc.	6,300		94,878
Philip Morris International, Inc.	123,665		5,380,664
			5,475,542
Transportation — 2.2%
China Merchants Holdings International Co. Ltd. (Hong Kong)	606,359		1,184,178
China Shipping Development Co. Ltd. (Class H Stock) (Hong Kong)	426,000		429,286
COSCO Pacific Ltd. (Hong Kong)	409,200		420,725
Kuehne & Nagel International AG (Switzerland)	11,745		745,408
United Parcel Service, Inc. (Class B Stock)	16,800		926,688
			3,706,285
TOTAL COMMON STOCKS (cost $176,783,037)			158,330,053

	Interest Rate	Maturity Date	Moody’s Ratings† (Unaudited)	Principal Amount (000)#
CONVERTIBLE BOND — 0.1%
Environmental Control
Sino-Forest Corp. (Canada) (cost $357,000)	5.00%	08/01/13	Ba2	$	357		253,470
TOTAL LONG-TERM INVESTMENTS (cost $177,140,037)							158,583,523
				Shares
SHORT-TERM INVESTMENT — 20.4%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $33,614,237; includes $27,227,346 of cash collateral for securities on loan)(b)(w) (Note 4)					33,614,237		33,614,237
TOTAL INVESTMENTS(o) — 116.3% (cost $210,754,274)							192,197,760
LIABILITIES IN EXCESS OF OTHER ASSETS — (16.3)%							(26,886,488	)
NET ASSETS — 100.0%						$	165,311,272

SEE NOTES TO FINANCIAL STATEMENTS.

A8

	SP DAVIS VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following abbreviation is used in the Portfolio descriptions:

ADR American Depositary Receipt

† The rating reflected is as of December 31, 2008. Rating of certain bonds may have changed subsequent to that date.

* 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 is $26,902,847; cash collateral of $27,227,346 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments. Cash collateral is less than 102% of the market value of securities loaned due to significant market increases on December 31, 2008. Collateral was subsequently received on January 2, 2009 and the Portfolio remained in compliance.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(g) Indicates a security that has been deemed illiquid.

(o) As of December 31, 2008, 6 securities representing $5,025,786 and 3.0% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities	Other Financial Instruments*
Level 1—Quoted Prices	186,918,504	—
Level 2—Other Significant Observable Inputs	5,279,256	—
Level 3—Significant Unobservable Inputs	—	—
Total	192,197,760	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (16.5% represents investments purchased with collateral from securities on loan)	20.4	%
Oil, Gas & Consumable Fuels	16.7
Insurance	12.1
Financial Services	10.0
Retail & Merchandising	8.1
Investment Firms	4.6
Media	3.9
Software	3.3
Tobacco	3.3
Healthcare Providers & Services	2.6
Beverages	2.3
Transportation	2.2
Commercial Banks	1.9
Pharmaceuticals	1.8
Business Services	1.8
Household Products	1.7
Containers & Packaging	1.6
Computers	1.4
Semiconductors & Semiconductor Equipment	1.4
Materials	1.2
Electronic Equipment & Instruments	1.2
Broadcasting	1.1
Industrial Conglomerates	1.1
Internet Services	0.9
Mining	0.9
Diversified Financial Services	0.8
Entertainment & Leisure	0.8
Telecommunications	0.7
Metals & Mining	0.6
Specialty Retail	0.6
Real Estate Investment Trusts	0.5
Chemicals	0.5
Internet Software & Services	0.5
Diversified Metals	0.5
Environmental Control	0.5
Real Estate Operation & Development	0.4
Automobile Retailers	0.4
Machinery	0.3
Cosmetics & Toiletries	0.3
Household Durables	0.3
Foods	0.3
Electric	0.2
Financial – Bank & Trust	0.2
Electrical Equipment	0.1
Food & Staples Retailing	0.1
Internet & Catalog Retail	0.1
Multi-Line Retail	0.1
	116.3
Liabilities in excess of other assets	(16.3	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A9

SP DAVIS VALUE PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value, including securities on loan of $26,902,847:
Unaffiliated investments (cost $177,140,037)	$	158,583,523
Affiliated investments (cost $33,614,237)		33,614,237
Cash		114,724
Receivable for investments sold		203,826
Dividends and interest receivable		203,357
Tax reclaim receivable		34,199
Prepaid expenses		2,368
Receivable for Series shares sold		1,328
Total Assets		192,757,562
LIABILITIES
Collateral for securities on loan		27,227,346
Management fee payable		102,032
Payable for Series shares repurchased		67,008
Accrued expenses and other liabilities		46,838
Deferred trustees’ fees		2,250
Transfer agent fees payable		816
Total Liabilities		27,446,290
NET ASSETS	$	165,311,272
Net assets were comprised of:
Paid-in capital	$	185,513,425
Retained earnings		(20,202,153	)
Net assets, December 31, 2008	$	165,311,272
Net asset value and redemption price per share, $165,311,272 / 24,598,906 outstanding shares of beneficial interest	$	6.72

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $43,669 foreign withholding tax)	$	4,198,328
Affiliated income from securities lending, net		447,060
Affiliated dividend income		113,666
Interest income		7,486
		4,766,540
EXPENSES
Management fee		1,833,940
Custodian’s fees and expenses		85,000
Shareholders’ reports		30,000
Audit fee		17,000
Trustees’ fees		12,000
Legal fees and expenses		7,000
Insurance expenses		5,000
Transfer agent’s fees and expenses (including affiliated expense of $2,000) (Note 4)		2,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		8,567
Total expenses		2,001,507
NET INVESTMENT INCOME		2,765,033
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(4,163,184	)
Foreign currency transactions		(27,509	)
		(4,190,693	)
Net change in unrealized appreciation (depreciation) on:
Investments		(113,461,211	)
Foreign currencies		1,942
		(113,459,269	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(117,649,962	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(114,884,929	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,765,033		$	3,606,228
Net realized gain (loss) on investment and foreign currency transactions		(4,190,693	)		15,360,261
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(113,459,269	)		(4,117,172	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(114,884,929	)		14,849,317
DISTRIBUTIONS		(18,966,489	)		(13,230,456	)
SERIES SHARE TRANSACTIONS:
Series shares sold [892,207 and 1,130,984 shares, respectively]		8,010,655			13,913,747
Series shares issued in reinvestment of distributions [1,787,605 and 1,113,675 shares, respectively]		18,966,489			13,230,457
Series shares repurchased [3,833,951 and 3,844,986 shares, respectively]		(36,829,057	)		(47,719,907	)
DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(9,851,913	)		(20,575,703	)
TOTAL DECREASE IN NET ASSETS		(143,703,331	)		(18,956,842	)
NET ASSETS:
Beginning of year		309,014,603			327,971,445
End of year	$	165,311,272		$	309,014,603

SEE NOTES TO FINANCIAL STATEMENTS.

A10

	SP GROWTH ASSET ALLOCATION PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 99.6%
	Shares	Value (Note 2)
Affiliated Mutual Funds
Advanced Series Trust
Global Real Estate Portfolio(a)	1,203,008	$	6,291,734
Large Cap Value Portfolio	19,824,506		203,399,430
Marsico Capital Growth Portfolio	8,153,753		103,144,973
Small Cap Growth Portfolio(a)	1,603,756		17,962,065
Western Asset Core Plus Bond Portfolio	2,585,528		24,459,091
The Prudential Series Fund
Jennison Portfolio (Class I)	6,988,920		102,667,240
Money Market Portfolio	6,423		64,228
Natural Resources Portfolio (Class I)	290,144		6,876,413
SP International Growth Portfolio (Class I)	15,288,545		52,745,480
SP International Value Portfolio	10,427,601		51,616,627
SP PIMCO High Yield Portfolio	275,898		1,848,517
SP PIMCO Total Return Portfolio	9,286,852		102,712,579
SP Small Cap Value Portfolio	2,379,302		18,082,692
TOTAL LONG-TERM INVESTMENTS (cost $938,360,270)			691,871,069
SHORT-TERM INVESTMENT — 0.5%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund —Taxable Money Market Series (cost $3,379,366) (Note 4)	3,379,366		3,379,366
TOTAL INVESTMENTS — 100.1% (cost $941,739,636)(b)			695,250,435
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.1)%			(410,578	)
NET ASSETS — 100.0%		$	694,839,857

(a) Non-income producing security.

(b) Prudential Investments LLC, the manager of the Portfolio, also serves as manager/co-manager of the underlying portfolios in which the Portfolio invests.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	695,250,435	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	695,250,435	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the valuation of investments.

The investment allocation of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Investment Type
Large/Mid-Cap Growth	29.6	%
Large/Mid-Cap Value	29.3
Core Bonds	18.3
International Growth	7.6
International Value	7.4
Small-Cap Growth	2.6
Small-Cap Value	2.6
Sector	1.9
High Yield	0.3
	99.6
Short-Term Investment	0.5
Liabilities in excess of other assets	(0.1	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A11

SP GROWTH ASSET ALLOCATION PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Affiliated investments, at value (cost $941,739,636)	$	695,250,435
Cash		6,315
Receivable for investments sold		2,000,027
Receivable for Series shares sold		29,255
Prepaid expenses		13,018
Dividends receivable		1,426
Total Assets		697,300,476
LIABILITIES
Payable for investments purchased		2,000,002
Payable for Series shares repurchased		393,599
Accrued expenses and other liabilities		37,273
Management fee payable		28,465
Deferred trustees’ fees		804
Affiliated transfer agent fee payable		476
Total Liabilities		2,460,619
NET ASSETS	$	694,839,857
Net assets were comprised of:
Paid-in capital	$	916,931,814
Retained earnings		(222,091,957	)
Net assets, December 31, 2008	$	694,839,857
Net asset value and redemption price per share, $694,839,857 / 105,306,279 outstanding shares of beneficial interest	$	6.60

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Affiliated dividend income	$	16,220,538
EXPENSES
Management fee		496,428
Shareholders’ reports		64,000
Custodian’s fees and expenses		55,000
Audit fee		17,000
Insurance expenses		14,000
Trustees’ fees		8,000
Legal fees and expenses		6,000
Commitment fee on syndicated credit agreement		3,000
Transfer agent’s fee and expenses (including affiliated expense of $2,000) (Note 4)		2,000
Miscellaneous		8,507
Total expenses		673,935
NET INVESTMENT INCOME		15,546,603
NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATED INVESTMENTS
Net realized loss on investment transactions		(44,164,900	)
Net capital gain distributions received		54,332,235
		10,167,335
Net change in unrealized appreciation (depreciation) on investments		(450,725,970	)
NET LOSS ON INVESTMENTS		(440,558,635	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(425,012,032	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	15,546,603		$	16,936,925
Net realized gain on investment transactions		10,167,335			99,207,694
Net change in unrealized appreciation (depreciation) on investments		(450,725,970	)		(1,774,234	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(425,012,032	)		114,370,385
DISTRIBUTIONS		(116,144,619	)		(62,515,434	)
SERIES SHARE TRANSACTIONS:
Series shares sold [3,093,662 and 4,149,530 shares, respectively]		27,735,159			48,388,069
Series shares issued in reinvestment of distributions [11,998,411 and 5,426,687 shares, respectively]		116,144,619			62,515,434
Series shares repurchased [17,822,457 and 16,523,123 shares, respectively]		(160,542,195	)		(193,998,790	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(16,662,417	)		(83,095,287	)
TOTAL DECREASE IN NET ASSETS		(557,819,068	)		(31,240,336	)
NET ASSETS:
Beginning of year		1,252,658,925			1,283,899,261
End of year	$	694,839,857		$	1,252,658,925

SEE NOTES TO FINANCIAL STATEMENTS.

A12

	SP INTERNATIONAL GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 95.4%
COMMON STOCKS	Shares	Value (Note 2)
Australia — 4.9%
BHP Billiton Ltd., ADR(a)	28,830	$	1,236,807
CSL Ltd.	87,397		2,060,982
Macquarie Group Ltd.	44,245		897,967
QBE Insurance Group Ltd.	157,434		2,845,354
Woolworths Ltd.	172,668		3,219,603
WorleyParsons Ltd.	47,711		475,963
			10,736,676
Bermuda — 0.4%
Credicorp Ltd.	18,700		934,252
Brazil — 3.0%
BM&FBOVESPA SA	243,526		628,656
Gafisa SA	101,400		456,126
LLX Logistica SA*	50,700		32,829
MMX Mineracao e Metalicos SA*	62,800		74,595
Petroleo Brasileiro SA (PRFC Shares)	121,100		1,186,074
Petroleo Brasileiro SA, ADR	85,438		2,092,377
Unibanco — Uniao de Bancos Brasileiros SA, GDR	24,862		1,606,582
Weg SA	90,900		487,243
			6,564,482
Canada — 4.4%
Canadian National Railway Co.(a)	61,319		2,254,086
Research In Motion Ltd.*	5,798		235,283
Rogers Communications, Inc. (Class B Stock)	144,876		4,294,057
Shoppers Drug Mart Corp.	73,300		2,853,029
			9,636,455
Chile
Centros Comerciales Sudamericanos SA, ADR, 144A*	1,578		33,616
China — 2.3%
China Life Insurance Co. Ltd. (Class H Stock)	666,000		2,046,273
China Merchants Bank Co. Ltd. (Class H Stock)	705,000		1,319,107
China Oilfield Services Ltd. (Class H Stock)	1,214,000		991,141
Industrial & Commercial Bank of China Ltd. (Class H Stock)	1,148,000		609,492
			4,966,013
Czech Republic — 0.6%
CEZ A/S	32,746		1,330,713
Denmark — 3.3%
Novo Nordisk A/S (Class B Stock)	81,611		4,130,350
Vestas Wind Systems A/S*	54,508		3,089,498
			7,219,848
Finland — 0.5%
Nokia Oyj	63,977		987,135
France — 6.6%
Accor SA	27,305		1,332,608
Alstom SA	59,186		3,453,751

COMMON STOCKS (continued)	Shares	Value (Note 2)
France (continued)
AXA SA	104,852	$	2,309,397
BNP Paribas	21,745		914,354
Cie Generale de Geophysique-Veritas*	34,194		503,832
Eurazeo	17,690		824,992
Iliad SA	17,775		1,531,902
JC Decaux SA	29,652		506,771
Veolia Environnement	94,373		2,912,261
			14,289,868
Germany — 3.5%
Bayerische Motoren Werke AG	20,957		629,526
Beiersdorf AG	39,984		2,334,345
E.ON AG	72,436		2,863,608
Linde AG	20,050		1,668,046
			7,495,525
Hong Kong — 2.0%
Cheung Kong Holdings Ltd.	78,000		744,091
CNOOC Ltd.	2,141,800		2,037,227
Esprit Holdings Ltd.	152,000		866,158
Noble Group Ltd.	1,012,000		724,857
			4,372,333
India — 2.7%
ICICI Bank Ltd., ADR(a)	147,254		2,834,639
Infosys Technologies Ltd., ADR	72,746		1,787,369
Vedanta Resources PLC	141,654		1,245,402
			5,867,410
Indonesia — 0.4%
Bank Rakyat Indonesia	2,282,000		970,424
Ireland — 0.3%
Ryanair Holdings PLC, ADR*(a)	25,917		753,666
Israel — 3.5%
Teva Pharmaceutical Industries Ltd., ADR(a)	176,513		7,514,158
Italy — 1.3%
Saipem SpA	168,361		2,766,232
Japan — 9.5%
Aeon Mall Co. Ltd.	61,500		1,188,896
Daikin Industries Ltd.	28,200		741,618
Daiwa Securities Group, Inc.	140,000		840,465
Fast Retailing Co. Ltd.	8,300		1,217,883
Honda Motor Co. Ltd.	32,200		685,818
Jupiter Telecommunications Co. Ltd.	3,478		3,620,044
Marubeni Corp.	290,000		1,110,282
Mizuho Financial Group, Inc.	264		761,640
Nintendo Co. Ltd.	19,500		7,451,958
Panasonic Corp.	17,000		208,968
Sumitomo Realty & Development Co. Ltd.	10,000		150,321
Suruga Bank Ltd.	81,000		804,704
Terumo Corp.	40,200		1,883,187
			20,665,784

SEE NOTES TO FINANCIAL STATEMENTS.

A13

	SP INTERNATIONAL GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Mexico — 1.6%
Cemex SAB de CV, ADR*(a)	147,575	$	1,348,836
Wal-Mart de Mexico SAB de CV (Class V Stock)	760,300		2,031,346
			3,380,182
Netherlands — 1.6%
Heineken NV	58,539		1,782,046
Qaigen NV*	94,777		1,629,680
			3,411,726
Singapore — 0.2%
CapitaLand Ltd.	76,000		165,827
Singapore Airlines Ltd.	41,000		322,462
			488,289
South Africa — 1.6%
MTN Group Ltd.	183,434		2,152,795
Naspers Ltd. (Class N Stock)	75,400		1,355,895
			3,508,690
Spain — 4.3%
Banco Santander SA	259,782		2,437,488
Gamesa Corp. Tecnologica SA	78,928		1,397,752
Iberdrola Renovables SA*	482,500		2,045,628
Industria de Diseno Textil SA	45,235		1,969,992
Telefonica SA	64,037		1,410,879
			9,261,739
Sweden — 0.2%
Hennes & Mauritz AB (Class B Stock)	8,664		334,708
Switzerland — 16.3%
ABB Ltd.*	280,942		4,112,441
Actelion Ltd.*	45,696		2,550,235
Compagnie Financiere Richemont SA (Class A stock)	17,358		330,737
Credit Suisse Group AG	133,020		3,561,864
Julius Baer Holding AG	27,054		1,016,225
Lonza Group AG	23,674		2,169,774
Nestle SA	176,926		6,915,133
Roche Holding AG	44,220		6,751,303
SGS SA	1,816		1,876,826
Synthes, Inc.	17,976		2,253,017
Zurich Financial Services AG	17,408		3,712,703
			35,250,258
Taiwan — 1.4%
Hon Hai Precision Industry Co. Ltd.	491,750		969,613
Taiwan Semiconductor Manufacturing Co. Ltd., ADR	257,950		2,037,805
			3,007,418
United Arab Emirates — 0.3%
DP World Ltd.	1,682,540		656,191
United Kingdom — 18.0%
AMEC PLC	120,040		850,427
Amlin PLC	74,836		384,654
Autonomy Corp. PLC*	107,510		1,469,987
BAE Systems PLC	698,868		3,785,581

COMMON STOCKS (continued)	Shares	Value (Note 2)
United Kingdom (continued)
BG Group PLC	361,895	$	4,979,419
BP PLC	161,294		1,219,799
British Sky Broadcasting Group PLC	256,854		1,772,604
Capita Group PLC (The)	272,907		2,895,711
HSBC Holdings PLC	68,439		651,397
Petrofac Ltd.	104,948		522,077
Reckitt Benckiser Group PLC	132,645		4,916,521
Rolls-Royce Group PLC*	687,777		3,317,602
Rolls-Royce Group PLC (Class C Stock)	37,316,822		53,652
Rotork PLC	56,400		641,821
Standard Chartered PLC	187,885		2,363,656
Tesco PLC	381,216		1,973,139
Tullow Oil PLC	243,894		2,312,598
Vodafone Group PLC	2,433,038		4,862,368
			38,973,013
United States — 0.7%
Las Vegas Sands Corp.*	104,338		618,725
Transocean Ltd.*	21,057		994,943
			1,613,668
TOTAL LONG-TERM INVESTMENTS (cost $251,783,107)			206,990,472
SHORT-TERM INVESTMENT — 9.7%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund —Taxable Money Market Series (cost $21,057,735; includes $10,455,867 of cash collateral for securities on loan)(b)(w)(Note 4)	21,057,735		21,057,735
TOTAL INVESTMENTS(o) — 105.1% (cost $272,840,842)			228,048,207
LIABILITIES IN EXCESS OF OTHER ASSETS(x) — (5.1)%			(11,148,317	)
NET ASSETS — 100.0%		$	216,899,890

The following abbreviations are used in Portfolio descriptions:

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
GDR	Global Depositary Receipt
PRFC	Preference Shares

* Non-income producing security.

SEE NOTES TO FINANCIAL STATEMENTS.

A14

	SP INTERNATIONAL GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(a) All or a portion of security is on loan. The aggregate market value of such securities is $10,185,581; cash collateral of $10,455,867 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(o) As of December 31, 2008, 30 securities representing $41,932,325 and 19.3% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the underlying portfolios in which the Portfolio invests.

(x) Liabilities in excess of other assets includes net unrealized depreciation on forward foreign currency exchange contracts as follows:

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount (000)	Value at Settlement Date Payable		Current Value		Unrealized Depreciation
Japanese Yen, Expiring 03/17/09	JPY  117,955	$	1,316,977	$	1,303,308	$	(13,669	)

Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Depreciation
Japanese Yen, Expiring 03/17/09	JPY  117,955	$	1,279,650	$	1,303,308	$	(23,658	)

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	186,115,882		—
Level 2—Other Significant Observable Inputs		41,170,685	$	(37,327	)
Level 3—Significant Unobservable Inputs		761,640		—
Total	$	228,048,207	$	(37,327	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	—
Accrued discounts/premiums		—
Realized gain (loss)		(270,576	)
Change in unrealized appreciation (depreciation)		(406,848	)
Net purchases (sales)		1,439,064
Transfers in and/or out of Level 3		—
Balance as of 12/31/08	$	761,640

SEE NOTES TO FINANCIAL STATEMENTS.

A15

	SP INTERNATIONAL GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Pharmaceuticals	11.4	%
Oil, Gas & Consumable Fuels	11.0
Affiliated Money Market Mutual Fund (4.8% represents investments purchased with collateral from securities on loan)	9.7
Financial Services	8.5
Foods	5.6
Insurance	5.2
Media	4.3
Entertainment & Leisure	3.6
Retail & Merchandising	3.4
Commercial Banks	2.7
Computers	2.3
Consumer Products & Services	2.3
Utilities	2.2
Wireless Telecommunication Services	2.2
Commercial Services	2.2
Telecommunications	2.2
Automobile Manufacturers	2.1
Medical Supplies & Equipment	2.1
Aerospace	1.8
Diversified Machinery	1.6
Real Estate Investment Trusts	1.5
Electronic Components & Equipment	1.4
Water	1.4
Diversified Resources	1.0
Construction	1.0
Chemicals	1.0
Engineering/Construction	1.0
Semiconductors	0.9
Hotels, Restaurants & Leisure	0.9
Healthcare Products	0.9
Beverages	0.8
Broadcasting	0.8
Equipment Services	0.7
Metals & Mining	0.6
Electric – Generation	0.6
Mineral Resources	0.6
Clothing & Apparel	0.6
Conglomerates	0.5
Computer Hardware	0.5
Airlines	0.4
Building Products	0.3
Transportation	0.3
Instruments – Controls	0.3
Advertising	0.2
Machinery	0.2
Building & Construction	0.2
Electronic Components	0.1
	105.1
Liabilities in excess of other assets	(5.1	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A16

SP INTERNATIONAL GROWTH PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value, including securities on loan of $10,185,581:
Unaffiliated investments (cost $251,783,107)	$	206,990,472
Affiliated investments (cost $21,057,735)		21,057,735
Foreign currency, at value (cost $1,467,321)		1,402,412
Tax reclaim receivable		1,064,764
Receivable for investments sold		293,108
Dividends and interest receivable		271,305
Receivable for Series shares sold		172,119
Prepaid expenses		6,183
Total Assets		231,258,098
LIABILITIES
Collateral for securities on loan		10,455,867
Payable to custodian		2,790,105
Payable for investments purchased		745,031
Accrued expenses and other liabilities		149,673
Management fee payable		149,193
Unrealized depreciation on foreign currency forward contracts		37,327
Payable for Series shares repurchased		26,718
Distribution fee payable		1,844
Affiliated transfer agent fees payable		1,343
Administration fee payable		1,107
Total Liabilities		14,358,208
NET ASSETS	$	216,899,890
Net assets were comprised of:
Paid-in capital	$	339,057,305
Retained earnings		(122,157,415	)
Net assets, December 31, 2008	$	216,899,890
Class I:
Net asset value and redemption price per share, $207,484,424 / 60,096,744 outstanding shares of beneficial interest	$	3.45
Class II:
Net asset value and redemption price per share, $9,415,466 / 2,791,749 outstanding shares of beneficial interest	$	3.37

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $626,489 foreign withholding tax)	$	8,057,626
Affiliated dividend income		433,692
Affiliated income from securities lending, net		84,356
		8,575,674
EXPENSES
Management fee		3,093,178
Distribution fee—Class II		57,681
Administration fee—Class II		34,608
Custodian’s fees and expenses		341,000
Shareholders’ reports		54,000
Audit fee		23,000
Trustees’ fees		15,000
Loan interest expense (Note 8)		12,390
Transfer agent’s fees and expenses (including affiliated expense of $7,600) (Note 4)		8,000
Legal fees and expenses		8,000
Insurance expenses		4,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		29,174
Total expenses		3,681,031
NET INVESTMENT INCOME		4,894,643
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(73,182,868	)
Foreign currency transactions		(818,127	)
		(74,000,995	)
Net change in unrealized appreciation (depreciation) on:
Investments		(161,029,792	)
Foreign currencies		(165,228	)
		(161,195,020	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(235,196,015	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(230,301,372	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	4,894,643		$	5,658,929
Net realized gain (loss) on investment and foreign currency transactions		(74,000,995	)		70,009,392
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(161,195,020	)		14,904,679
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(230,301,372	)		90,573,000
DISTRIBUTIONS
Class I		(70,133,161	)		(69,883,162	)
Class II		(5,535,160	)		(4,307,436	)
TOTAL DISTRIBUTIONS		(75,668,321	)		(74,190,598	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold		53,349,858			100,653,807
Series shares issued in reinvestment of distributions		75,668,321			74,190,598
Series shares repurchased		(137,692,011	)		(139,468,986	)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(8,673,832	)		35,375,419
TOTAL INCREASE (DECREASE) IN NET ASSETS		(314,643,525	)		51,757,821
NET ASSETS:
Beginning of year		531,543,415			479,785,594
End of year	$	216,899,890		$	531,543,415

SEE NOTES TO FINANCIAL STATEMENTS.

A17

	SP INTERNATIONAL VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 90.9%
COMMON STOCKS — 90.9%	Shares	Value (Note 2)
Australia — 1.4%
Amcor Ltd.	93,400	$	379,559
AWB Ltd.	227,800		406,048
BlueScope Steel Ltd.	104,200		256,009
Centennial Coal Co. Ltd.	149,800		350,981
Foster’s Group Ltd.	50,700		194,996
Gloucester Coal Ltd.	38,900		106,506
Goodman Fielder Ltd.	193,500		179,879
National Australia Bank Ltd.	20,000		294,033
OZ Minerals Ltd.	148,479		52,795
Pacific Brands Ltd.	231,100		69,679
Qantas Airways Ltd.	393,600		725,131
Tabcorp Holdings Ltd.	62,000		303,341
			3,318,957
Austria — 0.1%
Voestalpine AG	12,200		255,057
Belgium — 0.1%
AGFA-Gevaert NV*	39,400		101,868
Dexia NV/SA	24,800		110,314
Fortis	22,100		28,539
			240,721
Brazil — 1.1%
Empresa Brasileira de Aeronautica SA, ADR	78,300		1,269,243
Redecard SA	113,600		1,251,938
			2,521,181
Canada — 4.6%
Canadian National Railway Co.	71,000		2,575,439
Canadian Natural Resources Ltd.	52,200		2,061,361
Canadian Oil Sands Trust	29,200		499,085
Potash Corp. of Saskatchewan, Inc.	18,700		1,369,214
Rogers Communications, Inc. (Class B Stock)	152,100		4,508,172
			11,013,271
China — 2.7%
China Life Insurance Co. Ltd. (Class H Stock)	1,378,000		4,233,880
China Merchants Bank Co. Ltd. (Class H Stock)	1,177,553		2,203,288
			6,437,168
Denmark — 3.7%
Danske Bank A/S	28,900		280,653
H. Lundbeck A/S	36,900		758,033
Novo Nordisk A/S (Class B Stock)	110,300		5,582,307
Vestas Wind Systems A/S*	37,664		2,134,784
			8,755,777
Finland — 2.8%
Fortum Oyj	81,029		1,715,418
Nokia Oyj	275,500		4,250,834
Rautaruukki Oyj	17,900		302,563
TietoEnator Oyj	35,600		384,504
			6,653,319

COMMON STOCKS (continued)	Shares	Value (Note 2)
France — 10.7%
Air Liquide	16,744	$	1,523,345
Arkema	130		2,214
AXA SA	162,300		3,574,706
BNP Paribas	74,200		3,120,030
Ciments Francais SA	3,000		251,543
Compagnie Generale des Establissements Michelin (Class B Stock)	9,700		506,573
Credit Agricole SA	31,300		348,068
France Telecom SA	139,117		3,859,849
Groupe Danone	59,200		3,553,317
LVMH Moet Hennessy Louis Vuitton SA	50,535		3,355,653
Natixis SA	30,000		52,127
Peugeot SA	10,900		184,091
Rallye SA	7,300		163,372
Renault SA	6,600		170,183
Safran SA	26,600		356,220
Sanofi-Aventis SA	28,800		1,817,515
Societe Generale	3,300		165,138
Thales SA	8,600		356,600
THOMSON*	61,800		82,469
Total SA	17,200		930,292
Valeo SA	15,000		221,330
Vivendi	29,500		954,014
			25,548,649
Germany — 5.8%
BASF SE	37,800		1,457,039
Daimler AG	15,600		578,983
Deutsche Bank AG	20,200		781,437
Deutsche Lufthansa AG	35,500		552,189
E.ON AG	92,273		3,647,823
Hannover Rueckversicherung AG	9,300		290,867
Heidelberger Druckmaschinen AG	21,100		177,447
MTU Aero Engines Holding AG	19,800		538,899
Muenchener Rueckversicherungs AG	10,200		1,573,812
SAP AG	92,602		3,248,922
ThyssenKrupp AG*	42,100		1,109,558
			13,956,976
Greece — 1.1%
National Bank of Greece SA	89,960		1,650,642
OPAP SA	33,896		974,381
			2,625,023
Guernsey — 0.7%
Amdocs Ltd.*	94,700		1,732,063
Hong Kong — 2.6%
Chaoda Modern Agriculture Holdings Ltd.	567,462		364,657
China Mobile Ltd.	347,565		3,526,435
CITIC Pacific Ltd.	109,000		119,084
Hong Kong Exchanges and Clearing Ltd.	184,677		1,773,072
Noble Group Ltd.	60,000		42,976

SEE NOTES TO FINANCIAL STATEMENTS.

A18

	SP INTERNATIONAL VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Hong Kong (continued)
Orient Overseas International Ltd.	117,392	$	263,227
Solomon Systech International Ltd.	525,000		12,158
			6,101,609
Ireland — 0.1%
Allied Irish Banks PLC	51,100		122,955
Bank of Ireland	61,500		71,297
Irish Life & Permanent PLC	45,500		99,298
			293,550
Israel — 2.7%
Teva Pharmaceutical Industries Ltd., ADR	150,400		6,402,528
Italy — 1.6%
Banche Popolari Unite ScpA	26,200		374,754
Banco Popolare SC	23,700		163,073
ENI SpA	63,100		1,468,299
Finmeccanica SpA	14,200		214,954
Fondiaria-Sai SpA	17,000		302,474
Indesit Co. SpA	27,500		163,991
Intesa Sanpaolo SpA	81,700		288,176
Telecom Italia SpA	588,300		940,430
			3,916,151
Japan — 12.4%
Alpine Electronics, Inc.	45,300		363,636
Alps Electric Co. Ltd.	51,800		255,479
Asahi Glass Co. Ltd.	66,000		376,220
Asahi Kasei Corp.	161,000		710,663
Astellas Pharma, Inc.	14,700		601,705
Cosmo Oil Co. Ltd.	31,000		96,507
Daiichi Sankyo Co Ltd	8,700		205,741
Denki Kagaku Kogyo Kabushiki Kaisha	133,000		327,517
Fanuc Ltd.	43,800		3,139,225
Fuji Heavy Industries Ltd.	100		275
Hitachi Information Systems Ltd.	21,800		450,456
Honda Motor Co. Ltd.	61,400		1,307,740
Komatsu Ltd.	122,521		1,562,941
Kurabo Industries Ltd.	145,000		242,011
Kyoei Steel Ltd.	300		6,025
Kyowa Exeo Corp.	33,000		354,830
Marubeni Corp.	100,083		383,174
Matsushita Electric Industrial Co. Ltd.	45,000		553,150
Mitsui & Co. Ltd.	19,000		195,327
Mizuho Financial Group, Inc.	119		343,315
Nifco, Inc.	28,200		285,977
Nintendo Co. Ltd.	11,210		4,283,920
Nippon Light Metal Co. Ltd.	245,000		248,826
Nippon Oil Corp.	73,000		370,137
Nippon Shokubai Co. Ltd.	101,000		778,307
Nippon Telegraph & Telephone Corp.	240		1,306,079
Nissan Motor Co. Ltd.	230,200		828,175
Nissan Shatai Co. Ltd.	10,000		60,881
NTT DoCoMo, Inc.	716		1,409,314
Omron Corp.	38,500		517,280
Ricoh Co. Ltd.	69,000		884,354
Sanwa Holdings Corp.	136,000		523,089

COMMON STOCKS (continued)	Shares	Value (Note 2)
Japan (continued)
Seiko Epson Corp.	2,300	$	36,597
Sumitomo Corp.	75,000		665,196
Sumitomo Electric Industries Ltd.	34,800		269,394
Sumitomo Mitsui Financial Group, Inc.	70		283,500
Sumitomo Trust & Banking Co. Ltd. (The)	25,000		147,781
Suzuken Co. Ltd.	6,500		193,779
Takeda Pharmaceutical Co. Ltd.	8,100		422,191
Tokyo Steel Manufacturing Co. Ltd.	26,200		274,901
Toyota Motor Corp.	115,500		3,818,237
UNY Co. Ltd.	3,000		33,198
Yokogawa Electric Corp.	16,200		106,609
Yokohama Rubber Co. Ltd. (The)	78,700		394,937
			29,618,596
Liechtenstein — 0.2%
Verwaltungs und Privat Bank AG	2,900		381,726
Mexico — 1.9%
America Movil SAB de CV (Class L Stock), ADR	72,453		2,245,319
Wal-Mart de Mexico SAB de CV (Class V Stock)	824,200		2,202,072
			4,447,391
Netherlands — 1.6%
Aegon NV	48,400		304,434
CSM NV	11,500		183,834
ING Groep NV, ADR	64,800		660,250
Koninklijke DSM NV	23,600		601,154
Koninklijke Philips Electronics NV	17,600		338,349
OCE NV	58,900		257,084
Royal Dutch Shell PLC (Class A Stock)	1,300		33,882
Schlumberger Ltd.	34,470		1,459,115
			3,838,102
New Zealand — 0.1%
Air New Zealand Ltd.	580,000		325,889
Norway — 0.3%
DnB NOR ASA	63,900		246,398
Norsk Hydro ASA	24,400		96,874
StatoilHydro ASA	21,037		342,199
			685,471
Portugal — 0.3%
Banco Espirito Santo SA	32,000		297,581
Portugal Telecom SGPS SA	58,500		493,599
			791,180
Russia — 0.3%
Gazprom OAO, ADR	51,700		736,725
Singapore — 0.6%
MobileOne Ltd.	293,000		302,509
Neptune Orient Lines Ltd.	264,000		207,463
Singapore Airlines Ltd.	104,100		818,741
			1,328,713

SEE NOTES TO FINANCIAL STATEMENTS.

A19

	SP INTERNATIONAL VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Spain — 3.2%
Banco Bilbao Vizcaya Argentaria SA	60,500	$	728,288
Banco Santander SA	159,700		1,498,436
Endesa SA	3,200		127,217
Repsol YPF SA	42,100		883,667
Telefonica SA	200,100		4,408,653
			7,646,261
Sweden — 1.9%
Electrolux AB (Class B Stock)	59,500		502,232
Hennes & Mauritz AB (Class B Stock)	89,247		3,447,791
Nordea Bank AB	42,800		296,051
Volvo AB (Class B Stock)	34,600		187,702
			4,433,776
Switzerland — 11.7%
Baloise Holding AG	7,000		516,278
Clariant AG*	61,900		414,663
Credit Suisse Group AG	35,500		950,580
Georg Fischer AG*	1,400		315,554
Givaudan SA	2,492		1,944,479
Julius Baer Holding AG	23,735		891,554
Logitech International SA*	108,480		1,668,453
Nestle SA	160,100		6,257,490
Novartis AG	68,616		3,397,438
Rieter Holding AG	1,400		224,926
Roche Holding AG	35,185		5,371,882
Swiss Reinsurance	74,247		3,508,831
Swisscom AG	3,500		1,116,409
Zurich Financial Services AG	5,800		1,236,999
			27,815,536
Turkey — 0.8%
Turkcell Iletisim Hizmet A/S	358,100		2,030,045
United Kingdom — 13.8%
ARM Holdings PLC	887,500		1,103,745
AstraZeneca PLC	41,900		1,690,988
Aviva PLC	73,000		409,328
Banco Santander SA*	13,933		127,308
Barclays PLC	150,400		331,709
Beazley Group PLC	166,000		323,394
BP PLC	316,500		2,393,556
Brit Insurance Holdings PLC	129,500		409,616
BT Group PLC	482,800		938,487
Carnival PLC	148,546		3,222,807
Centrica PLC	109,200		417,627
Dairy Crest Group PLC	40,400		123,721
Drax Group PLC	46,611		375,955
DS Smith PLC	158,000		172,077
GKN PLC	203,300		283,526
GlaxoSmithKline PLC	47,500		877,227
HBOS PLC	147,459		146,287
IMI PLC	82,400		321,944
Legal & General Group PLC	430,100		474,914
Lloyds TSB Group PLC	96,900		175,541
Marston’s PLC	89,100		149,881
NEXT PLC	17,923		278,561
Northern Foods PLC	162,900		132,914
Old Mutual PLC	230,800		182,508

COMMON STOCKS (continued)	Shares	Value (Note 2)
United Kingdom (continued)
Reckitt Benckiser Group PLC	111,776	$	4,143,006
Royal & Sun Alliance Insurance Group PLC	195,300		387,775
Royal Bank of Scotland Group PLC	174,353		123,834
Royal Dutch Shell PLC (Class B Stock)	103,100		2,558,489
SABMiller PLC	108,900		1,820,924
Smith & Nephew PLC	329,600		2,077,978
Spectris PLC	4,700		36,152
Standard Chartered PLC	184,142		2,316,565
Tate & Lyle PLC	65,200		375,669
Tomkins PLC	125,800		222,469
TT Electronics PLC	127,500		64,160
Vodafone Group PLC	268,600		536,791
Vodafone Group PLC, ADR	159,000		3,249,960
			32,977,393
TOTAL COMMON STOCKS (cost $307,486,411)			216,828,804
	Units
RIGHTS*
Belgium
Fortis, expiring 03/09/09	22,900		—
United Kingdom
HBOS, expiring 01/09/09	204,069		—
Lloyds TSB, expiring 01/09/09	42,122		—
			—
TOTAL RIGHTS (cost $0)			—
TOTAL LONG-TERM INVESTMENTS (cost $307,486,411)			216,828,804
	Shares
SHORT-TERM INVESTMENT — 6.1%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $14,563,840)(w) (Note 4)	14,563,840		14,563,840
TOTAL INVESTMENTS(o) — 97.0% (cost $322,050,251)			231,392,644
OTHER ASSETS IN EXCESS OF LIABILITIES(x) — 3.0%			7,120,565
NET ASSETS — 100.0%		$	238,513,209

The following abbreviation is used in the Portfolio descriptions:

ADR	American Depositary Receipt
EUR	Euro
GBP	British Pound
MXN	Mexican Peso

* Non-income producing security.

(o) As of December 31, 2008, 69 securities representing $47,078,137 and 19.7% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A20

	SP INTERNATIONAL VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(x) Other assets in excess of liabilities includes net unrealized appreciation (depreciation) on forward foreign currency exchange contracts as follows:

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount (000)	Value at Settlement Date Payable		Current Value		Unrealized Appreciation
Euro, Expiring 06/16/09	EUR  4,942	$	6,761,150	$	6,838,034	$	76,884

Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
British Pound, Expiring 06/16/09	GBP  1,771	$	2,714,147	$	2,541,436	$	172,711
Euro, Expiring 06/16/09	EUR   8,814		11,747,927		12,195,555		(447,628	)
Mexican Pesos, Expiring 05/29/09	MXN  44,250		3,109,081		3,075,021		34,060
		$	17,571,155	$	17,812,012	$	(240,857	)

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	184,314,507		—
Level 2—Other Significant Observable Inputs		45,092,448	$	(163,973	)
Level 3—Significant Unobservable Inputs		1,985,689		—
Total	$	231,392,644	$	(163,973	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	—
Accrued discounts/premiums		—
Realized gain (loss)	$	36,874
Change in unrealized appreciation (depreciation)		(29,585,194	)
Net purchases (sales)		29,545,637
Transfers in and/or out of Level 3		1,988,372
Balance as of 12/31/08	$	1,985,689

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of December 31, 2008 were as follows:

Telecommunications	15.3	%
Pharmaceuticals	11.6

Financial – Bank & Trust	8.1	%
Insurance	7.7
Affiliated Money Market Mutual Fund	6.1
Oil, Gas & Consumable Fuels	5.8
Food	4.6
Chemicals	3.8
Entertainment & Leisure	3.6
Automobile Manufacturers	2.9
Retail	2.6
Electric	2.3
Machinery & Equipment	2.3
Consumer Products & Services	1.7
Diversified Operations	1.5
Software	1.4
Electronic Components	1.3
Transportation	1.3
Diversified Financial Services	1.2
Aerospace/defense	1.2
Computers	1.1
Airlines	1.0
Beverages	1.0
Medical Supplies & Equipment	0.9
Iron/Steel	0.7
Automotive Parts	0.6
Office Equipment	0.5
Home Furnishings	0.5
Building Materials	0.5
Distribution/Wholesale	0.5
Metals & Mining	0.4
Semiconductors	0.4
Media	0.4
Auto Parts & Equipment	0.3
Miscellaneous Manufacturing	0.2
Furniture	0.2
Environmental Services	0.2
Gas Distribution	0.2
Agriculture	0.2
Containers & Packaging	0.2
Farming & Agriculture	0.2
Engineering/Construction	0.2
Independent Power Producers & Energy Traders	0.1
Textiles	0.1
Paper & Forest Products	0.1
	97.0
Other assets in excess of liabilities	3.0
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A21

SP INTERNATIONAL VALUE PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value:
Unaffiliated investments (cost $307,486,411)	$	216,828,804
Affiliated investments (cost $14,563,840)		14,563,840
Cash		3,115,307
Foreign currency, at value (cost $1,369,421)		1,422,663
Receivable for Series shares sold		2,021,893
Tax reclaim receivable		1,414,661
Unrealized appreciation on foreign currency forward contracts		283,655
Dividends and interest receivable		224,552
Receivable for investments sold		72,768
Prepaid expenses		4,962
Total Assets		239,953,105
LIABILITIES
Payable for investments purchased		607,534
Unrealized depreciation on foreign currency forward contracts		447,628
Accrued expenses and other liabilities		182,455
Management fee payable		173,847
Payable for Series shares repurchased		27,722
Transfer agent fees payable		710
Total Liabilities		1,439,896
NET ASSETS	$	238,513,209
Net assets were comprised of:
Paid-in capital	$	338,926,315
Retained earnings		(100,413,106	)
Net assets, December 31, 2008	$	238,513,209
Net asset value and redemption price per share, $238,513,209 / 48,227,480 outstanding shares of beneficial interest	$	4.95

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $1,192,938 foreign withholding tax)	$	11,264,985
Affiliated dividend income		169,598
Interest income		2,328
		11,436,911
EXPENSES
Management fee		3,086,690
Custodian’s fees and expenses		266,452
Shareholders’ reports		50,000
Audit fee		23,000
Trustees’ fees		14,000
Loan interest expense (Note 8)		9,642
Legal fees and expenses		8,000
Transfer agent’s fees and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Insurance expenses		4,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		21,765
Total expenses		3,488,549
NET INVESTMENT INCOME		7,948,362
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		(18,763,216	)
Foreign currency transactions		1,629,121
		(17,134,095	)
Net change in unrealized appreciation (depreciation) on:
Investments		(178,523,176	)
Foreign currencies		335,443
		(178,187,733	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(195,321,828	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(187,373,466	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	7,948,362		$	9,309,748
Net realized gain (loss) on investment and foreign currency transactions		(17,134,095	)		53,972,399
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(178,187,733	)		24,169,653
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(187,373,466	)		87,451,800
DISTRIBUTIONS		(63,282,147	)		(103,097,386	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold [5,480,269 and 3,727,566 shares, respectively]		30,802,427			45,503,186
Series shares issued in reinvestment of distributions [8,000,271 and 9,781,536, respectively]		63,282,147			103,097,386
Series shares repurchased [11,702,481 and 9,807,700 shares, respectively]		(98,546,520	)		(126,710,224	)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(4,461,946	)		21,890,348
TOTAL INCREASE (DECREASE) IN NET ASSETS		(255,117,559	)		6,244,762
NET ASSETS:
Beginning of year		493,630,768			487,386,006
End of year	$	238,513,209		$	493,630,768

SEE NOTES TO FINANCIAL STATEMENTS.

A22

	SP MID CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 98.4%
COMMON STOCKS	Shares	Value (Note 2)
Air Freight & Logistics — 1.4%
C.H. Robinson Worldwide, Inc.(a)	17,100	$	941,013
Banks — 1.2%
Northern Trust Corp.	16,000		834,240
Beverages — 0.3%
Central European Distribution Corp.*	9,000		177,300
Biotechnology — 1.4%
Alexion Pharmaceuticals, Inc.*	12,000		434,280
Illumina, Inc.*(a)	20,500		534,025
			968,305
Building & Construction — 0.3%
Martin Marietta Materials, Inc.(a)	2,150		208,722
Business Services — 0.6%
MasterCard, Inc. (Class A Stock)(a)	3,000		428,790
Capital Markets — 1.6%
Lazard Ltd. (Class A Stock) (Bermuda)	36,000		1,070,640
Chemicals — 3.5%
Airgas, Inc.	28,500		1,111,215
Ecolab, Inc.	34,900		1,226,735
			2,337,950
Commercial Services — 5.6%
Alliance Data Systems Corp.*	20,750		965,498
CoStar Group, Inc.*(a)	16,500		543,510
FTI Consulting, Inc.*	14,000		625,520
Iron Mountain, Inc.*	47,000		1,162,310
VistaPrint Ltd. (Bermuda)*	24,500		455,945
			3,752,783
Commercial Services & Supplies — 2.3%
Corrections Corp. of America*	40,000		654,400
HMS Holdings Corp.*	7,500		236,400
SAIC, Inc.*	32,500		633,100
			1,523,900
Computer Hardware — 1.1%
Cognizant Technology Solutions Corp. (Class A Stock)*	40,000		722,400
Computer Services & Software — 1.9%
IHS, Inc. (Class A Stock)*	20,400		763,368
salesforce.com*(a)	15,500		496,155
			1,259,523
Construction — 1.2%
Jacobs Engineering Group, Inc.*	17,000		817,700
Consumer Products & Services — 1.3%
Chattem, Inc.*(a)	5,000		357,650
Church & Dwight Co., Inc.	9,500		533,140
			890,790
Containers & Packaging — 0.6%
Pactiv Corp.*	17,000		422,960
Distribution/Wholesale — 1.2%
Fastenal Co.(a)	24,000		836,400

COMMON STOCKS (continued)	Shares	Value (Note 2)
Diversified Financial Services — 0.8%
IntercontinentalExchange, Inc.*	7,000	$	577,080
Education — 5.0%
American Public Education, Inc.*	9,000		334,710
DeVry, Inc.	27,000		1,550,070
Strayer Education, Inc.	7,000		1,500,870
			3,385,650
Electronic Components — 5.2%
Activision Blizzard, Inc.*	90,000		777,600
AMETEK, Inc.	27,500		830,775
Dolby Laboratories, Inc. (Class A Stock)*(a)	35,500		1,162,980
Trimble Navigation Ltd.*	36,000		777,960
			3,549,315
Electronic Equipment & Instruments — 0.4%
Mettler-Toledo International, Inc.*(a)	4,000		269,600
Electronics — 1.8%
FLIR Systems, Inc.*(a)	28,000		859,040
National Instruments Corp.	14,500		353,220
			1,212,260
Energy – Alternate Sources — 1.1%
Covanta Holding Corp.*	33,500		735,660
Entertainment & Leisure — 2.6%
Penn National Gaming, Inc.*	24,500		523,810
WMS Industries, Inc.*(a)	46,000		1,237,400
			1,761,210
Environmental Control — 3.5%
Clean Harbors, Inc.*	8,000		507,520
Stericycle, Inc.*	26,000		1,354,080
Waste Connections, Inc.*	15,000		473,550
			2,335,150
Financial Services — 1.3%
BlackRock, Inc.(a)	4,500		603,675
NASDAQ OMX Group (The)*	12,500		308,875
			912,550
Food & Drug Retailers — 1.7%
Perrigo Co.	36,000		1,163,160
Food — 1.4%
Ralcorp Holdings, Inc.*	16,000		934,400
Healthcare Equipment & Supplies — 1.0%
Intuitive Surgical, Inc.*(a)	5,500		698,445
Healthcare Products — 5.5%
C.R. Bard, Inc.	12,500		1,053,250
Gen-Probe, Inc.*	19,700		843,948
IDEXX Laboratories, Inc.*(a)	15,500		559,240
Myriad Genetics, Inc.*(a)	19,000		1,258,940
			3,715,378
Healthcare Services — 0.8%
Psychiatric Solutions, Inc.*(a)	18,500		515,225
Hotels & Motels — 0.6%
Wynn Resorts Ltd.*(a)	9,000		380,340

SEE NOTES TO FINANCIAL STATEMENTS.

A23

	SP MID CAP GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Insurance — 1.6%
Aon Corp.	12,500	$	571,000
Everest Re Group Ltd. (Bermuda)(a)	2,000		152,280
Fidelity National Financial, Inc. (Class A Stock)	11,000		195,250
W.R. Berkley Corp.	6,000		186,000
			1,104,530
Internet — 0.8%
Equinix, Inc.*(a)	10,000		531,900
Manufacturing — 1.3%
Danaher Corp.	15,000		849,150
Medical Supplies & Equipment — 2.8%
Masimo Corp.*(a)	18,500		551,855
NuVasive, Inc.*	11,000		381,150
Wright Medical Group, Inc.*	45,500		929,565
			1,862,570
Metals & Mining — 1.5%
Agnico-Eagle Mines Ltd. (Canada)	6,000		307,980
Precision Castparts Corp.	11,500		684,020
			992,000
Oil & Gas — 0.4%
Continental Resources, Inc.*(a)	12,500		258,875
Oil & Gas Services — 1.5%
CARBO Ceramics, Inc.	18,000		639,540
Core Laboratories NV (Netherlands)(a)	6,750		404,055
			1,043,595
Oil, Gas & Consumable Fuels — 4.0%
Concho Resources, Inc.*	35,000		798,700
Range Resources Corp.	18,500		636,215
Southwestern Energy Co.*(a)	23,500		680,795
XTO Energy, Inc.	17,500		617,225
			2,732,935
Pharmaceuticals — 4.5%
Cephalon, Inc.*(a)	9,000		693,360
Express Scripts, Inc.*	19,000		1,044,620
United Therapeutics Corp.*(a)	5,500		344,025
VCA Antech, Inc.*	29,300		582,484
Vertex Pharmaceuticals, Inc.*	12,500		379,750
			3,044,239
Retail & Merchandising — 6.0%
BJ’s Wholesale Club, Inc.*(a)	15,000		513,900
GameStop Corp. (Class A Stock)*(a)	25,000		541,500
Kohl’s Corp.*(a)	10,500		380,100
Ross Stores, Inc.	31,000		921,630
Shoppers Drug Mart Corp. (Canada)	30,000		1,167,679
Staples, Inc.	13,500		241,920
TJX Co., Inc.(a)	13,000		267,410
			4,034,139
Retail – Auto Parts — 0.4%
Copart, Inc.*	10,000		271,900
Retail Apparel — 0.4%
Gap, Inc. (The)	19,000		254,410

COMMON STOCKS (continued)	Shares	Value (Note 2)
Semiconductors — 2.5%
Itron, Inc.*(a)	9,000	$	573,660
Lam Research Corp.*(a)	12,500		266,000
Microchip Technology, Inc.(a)	26,500		517,545
Microsemi Corp.*(a)	26,000		328,640
			1,685,845
Semiconductors & Semiconductor Equipment — 0.5%
Silicon Laboratories, Inc.*(a)	14,500		359,310
Software — 2.0%
ANSYS, Inc.*	33,500		934,315
Blackboard, Inc.*(a)	15,000		393,450
			1,327,765
Specialty Retail — 1.0%
Urban Outfitters, Inc.*(a)	46,500		696,570
Telecommunications — 7.1%
American Tower Corp. (Class A Stock)*	37,100		1,087,772
Harris Corp.	27,500		1,046,375
Juniper Networks, Inc.*(a)	40,100		702,151
MetroPCS Communications, Inc.*	13,500		200,475
NII Holdings, Inc.*	42,500		772,650
SBA Communications Corp. (Class A Stock)*	60,500		987,360
			4,796,783
Transportation — 1.9%
Expeditors International of Washington, Inc.	20,500		682,035
J.B. Hunt Transport Services, Inc.(a)	22,500		591,075
			1,273,110
TOTAL LONG-TERM INVESTMENTS (cost $86,444,479)			66,458,465
SHORT-TERM INVESTMENT — 29.6%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $19,948,665; includes $18,913,997 of cash collateral for securities on loan)(b)(w)(Note 4)	19,948,665		19,948,665

TOTAL SHORT-TERM INVESTMENTS (cost $19,948,665)		19,948,665
TOTAL INVESTMENTS — 128.0% (cost $106,393,144)		86,407,130
LIABILITIES IN EXCESS OF OTHER ASSETS — (28.0)%		(18,888,975	)
NET ASSETS — 100.0%	$	67,518,155

* Non-income producing security.

(a) All or a portion of security is on loan. The aggregate market value of such securities is $18,520,098; cash collateral of $18,913,997 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A24

	SP MID CAP GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities	Other Financial Instruments*
Level 1—Quoted Prices	86,407,130	—
Level 2—Other Significant Observable Inputs	—	—
Level 3—Significant Unobservable Inputs	—	—
Total	86,407,130	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (28.0% represents investments purchased with collateral from securities on loan)	29.6	%
Telecommunications	7.1
Retail & Merchandising	6.0
Commercial Services	5.6
Healthcare Products	5.5
Electronic Components	5.2
Education	5.0
Pharmaceuticals	4.5
Oil, Gas & Consumable Fuels	4.0
Chemicals	3.5
Environmental Control	3.5
Medical Supplies & Equipment	2.8
Entertainment & Leisure	2.6
Semiconductors	2.5
Commercial Services & Supplies	2.3
Software	2.0
Transportation	1.9
Computer Services & Software	1.9

Electronics	1.8	%
Food & Drug Retailers	1.7
Insurance	1.6
Capital Markets	1.6
Oil & Gas Services	1.5
Metals & Mining	1.5
Biotechnology	1.4
Air Freight & Logistics	1.4
Foods	1.4
Financial Services	1.3
Consumer Products & Services	1.3
Manufacturing	1.3
Distribution/Wholesale	1.2
Banks	1.2
Construction	1.2
Energy – Alternate Sources	1.1
Computer Hardware	1.1
Healthcare Equipment & Supplies	1.0
Specialty Retail	1.0
Diversified Financial Services	0.8
Internet	0.8
Healthcare Services	0.8
Business Services	0.6
Containers & Packaging	0.6
Hotels & Motels	0.6
Semiconductors & Semiconductor Equipment	0.5
Retail – Auto Parts	0.4
Electronic Equipment & Instruments	0.4
Oil & Gas	0.4
Retail Apparel	0.4
Building & Construction	0.3
Beverages	0.3
	128.0
Liabilities in excess of other assets	(28.0	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A25

SP MID CAP GROWTH PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value, including securities on loan of $18,520,098:
Unaffiliated investments (cost $86,444,479)	$	66,458,465
Affiliated investments (cost $19,948,665)		19,948,665
Cash		18,606
Receivable for investments sold		305,568
Dividends and interest receivable		45,710
Receivable for Series shares sold		20,014
Prepaid expenses		1,875
Total Assets		86,798,903
LIABILITIES
Collateral for securities on loan		18,913,997
Payable for investments purchased		256,552
Accrued expenses and other liabilities		58,872
Management fee payable		44,085
Deferred trustees’ fees		3,561
Payable for Series shares repurchased		3,285
Transfer agent fees payable		396
Total Liabilities		19,280,748
NET ASSETS	$	67,518,155
Net assets were comprised of:
Paid-in capital	$	112,258,453
Retained earnings		(44,740,298	)
Net assets, December 31, 2008	$	67,518,155
Net asset value and redemption price per share, $67,518,155 / 19,669,600 outstanding shares of beneficial interest	$	3.43

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $6,733 foreign withholding tax)	$	324,911
Affiliated income from securities lending, net		213,926
Affiliated dividend income		127,901
		666,738
EXPENSES
Management fee		815,525
Custodian’s fees and expenses		50,000
Audit fee		17,000
Trustees’ fees		10,000
Legal fees and expenses		5,000
Transfer agent’s fees and expenses (including affiliated expense of $2,000) (Note 4)		2,000
Insurance expenses		2,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		3,740
Total expenses		906,265
NET INVESTMENT LOSS		(239,527	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions		(24,414,486	)
Net change in unrealized appreciation (depreciation) on investments		(28,331,776	)
NET LOSS ON INVESTMENTS		(52,746,262	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(52,985,789	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment loss	$	(239,527	)	$	(408,265	)
Net realized gain (loss) on investment transactions		(24,414,486	)		24,789,919
Net change in unrealized appreciation (depreciation) on investments		(28,331,776	)		(4,065,241	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(52,985,789	)		20,316,413
DISTRIBUTIONS		(24,381,654	)		(11,224,860	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,083,638 and 1,258,734 shares, respectively]		5,887,530			9,512,072
Series shares issued in reinvestment of distributions [4,377,317 and 1,502,659, respectively]		24,381,654			11,224,860
Series shares repurchased [3,700,399 and 3,690,457 shares, respectively]		(20,213,722	)		(28,108,838	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		10,055,462			(7,371,906	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(67,311,981	)		1,719,647
NET ASSETS:
Beginning of year		134,830,136			133,110,489
End of year	$	67,518,155		$	134,830,136

SEE NOTES TO FINANCIAL STATEMENTS.

A26

	SP PIMCO HIGH YIELD PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 95.6% BANK NOTES(c) — 6.0%	Moody’s Ratings† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Chrysler Financial, Term, 144A (original cost $1,876,250; purchased 07/31/07, 11/28/07)(f)(g)	Caa	6.00%	08/03/14	$	1,975	$	994,553
Community Health System, Term B (original cost $11,601; purchased 12/29/08)(f)(g)	Ba	3.40%	07/02/14		12		8,994
Community Health System, Term B (original cost $23,202; purchased 06/28/07)(f)(g)	Ba	4.00%	07/02/14		23		17,987
Community Health System, Term B (original cost $83,047; purchased 06/03/08)(f)(g)	Ba	4.44%	07/25/14		83		64,382
Community Health System, Term B (original cost $597,448; purchased 06/28/07, 12/18/07)(f)(g)	Ba	4.45%	07/02/14		597		463,171
Ford Motor Corp., (original cost $1,657,429; purchased 12/12/06-05/21/08)(f)(g)	B(d)	5.00%	11/29/13		1,724		691,877
HCA, Inc., Term B (original cost $735,000; purchased 11/14/06)(f)(g)	Ba-	3.71%	11/14/13		735		574,678
Idearc, Inc., Term B (original cost $55,928; purchased 03/27/08, 04/02/08)(f)(g)	Ba	2.47%	11/17/14		64		19,458
Idearc, Inc., Term B (original cost $1,170,393; purchased 02/07/08)(f)(g)	Ba	3.46%	11/17/14		1,421		433,421
Nordic Telephone (Denmark) (original cost $356,445; purchased 04/19/06)(f)(g)	Ba+	5.45%	11/30/13		EUR  354		427,204
Nordic Telephone (Denmark) (original cost $429,723; purchased 04/19/06)(f)(g)	Ba+	5.70%	11/30/14		EUR  427		496,041
Quicksilver (original cost $458,224; purchased 08/05/08)(f)(g)	Ba-	7.75%	08/05/13		468		301,586
Roundy’s, Inc., Term B (original cost $390,510; purchased 11/04/08)(f)(g)	Ba-	4.19%	10/27/11		391		268,476
Roundy’s, Inc., Term B (original cost $43,313; purchased 12/31/08)(f)(g)	Ba-	4.19%	10/27/11		43		29,777
Roundy’s, Inc., Term B (original cost $443,958; purchased 11/01/05-11/12/07)(f)(g)	Ba-	4.63%	10/27/11		444		305,221
Thomson Learning, Term B (original cost $978,683; purchased 06/27/07, 07/02/08)(f)(g)	B+(d)	2.96%	06/27/14		988		638,035
Tribune Co., Term B (original cost $448,824; purchased 06/18/08)(f)(g)	Ba	5.25%	06/04/14		593		107,639
Tribune Co., Term X (original cost $119,467; purchased 05/17/07)(f)(g)(i)	D	7.08%	05/30/09		119		32,734
Univision Communications, Inc., Term B (original cost $939,597; purchased 03/16/07)(f)(g)	B(d)	2.71%	09/15/14		940		374,273
Univision Communications, Inc., Term DD (original cost $60,403; purchased 10/12/07, 05/08/08)(f)(g)	B+(d)	2.71%	09/15/14		60		24,060
VNU/Nielsen Finance LLC, Term B (original cost $502,303; purchased 11/10/08)(f)(g)	B+(d)	3.83%	08/08/13		502		338,113
VNU/Nielsen Finance LLC, Term B (original cost $1,446,561; purchased 08/08/06,05/21/08)(f)(g)	B+(d)	4.39%	08/08/13		1,453		977,858
Wind Acquisitions Finance SA, Term B (original cost $368,855; purchased 12/07/06-09/02/08)(f)(g)	B-(d)	11.75%	12/21/11		369		303,691
TOTAL BANK NOTES (cost $13,442,129)							7,893,229
CONVERTIBLE BONDS — 1.1%
Oil & Gas Exploration/Production — 0.3%
Chesapeake Energy Corp., Gtd. Notes	Ba3	2.25%	12/15/38		725		325,344
Chesapeake Energy Corp., Gtd. Notes	BB(d)	2.50%	05/15/37		150		87,562
							412,906
Pharmaceuticals — 0.2%
Mylan, Inc., Gtd. Notes	B+(d)	1.25%	03/15/12		325		238,875
Semiconductors — 0.1%
Advanced Micro Devices, Inc., Sr. Unsec`d. Notes	B(d)	6.00%	05/01/15		350		99,750
Telecommunications — 0.3%
Nortel Networks Corp., Gtd. Notes (Canada)(i)	Caa2	2.125%	04/15/14		400		56,000
Qwest Communications International, Inc., Sr. Unsec`d. Notes	B1	3.50%	11/15/25		400		336,500
							392,500

SEE NOTES TO FINANCIAL STATEMENTS.

A27

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CONVERTIBLE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Utilities — 0.2%
CMS Energy Corp., Sr. Unsec`d. Notes	Ba1	2.875%		12/01/24	$	325	$	281,531
TOTAL CONVERTIBLE BONDS (cost $2,628,527)								1,425,562
CORPORATE BONDS — 80.0%
Advertising — 0.4%
R.H. Donnelley Corp., Sr. Disc. Notes	Caa1	6.875%		01/15/13		175		23,625
R.H. Donnelley Corp., Sr. Unsec`d. Notes	Caa1	8.875%		01/15/16		1,925		288,750
R.H. Donnelley Corp., Sr. Unsec`d. Notes	Caa1	8.875%		10/15/17		950		142,500
R.H. Donnelley, Inc., Gtd. Notes, 144A (original cost $37,500; purchased 09/02/08)(f)(g)	B1	11.75%		05/15/15		50		12,250
								467,125
Airlines — 0.1%
United AirLines, Inc., Series 01-1, Pass-Through Cerificates	Ba2	6.201%		03/01/10		94		87,907
United AirLines, Inc., Series 01-1, Pass-Through Cerificates	Ba2	6.602%		09/01/13		56		52,197
								140,104
Automotive — 2.7%
Allison Transmission, Inc., Gtd. Notes, 144A (original cost $814,281; purchased 10/11/07-05/09/08)(f)(g)	Caa1	11.00%		11/01/15		850		416,500
ArvinMeritor, Inc., Gtd. Notes	B3	8.125%		09/15/15		655		294,750
ArvinMeritor, Inc., Gtd. Notes	B3	8.75%		03/01/12		1,030		556,200
Cooper-Standard Automotive, Inc., Gtd. Notes	Caa1	7.00%		12/15/12		570		171,000
Ford Motor Co., Sr. Unsec`d. Notes	Ca	9.215%		09/15/21		100		23,000
General Motors Corp., Sr. Unsec`d. Notes	C	7.40%		09/01/25		50		8,250
General Motors Corp., Sr. Unsec`d. Notes	C	7.70%		04/15/16		1,550		286,750
General Motors Corp., Sr. Unsec`d. Notes	C	8.25%		07/15/23		400		66,000
Goodyear Tire & Rubber Co. (The), Gtd. Notes	B1	6.318%	(c)	12/01/09		225		204,750
Goodyear Tire & Rubber Co. (The), Gtd. Notes	B1	9.00%		07/01/15		450		362,250
Tenneco, Inc., Gtd. Notes	B2	8.125%		11/15/15		615		282,900
Tenneco, Inc., Sr. Sec`d. Notes	Ba3	10.25%		07/15/13		351		217,620
TRW Automotive, Inc., Gtd. Notes, 144A (original cost $245,938; purchased 03/21/07)(f)(g)	B2	7.00%		03/15/14		250		132,500
TRW Automotive, Inc., Gtd. Notes, 144A (original cost $1,081,300; purchased 03/14/07-02/25/08)(f)(g)	B2	7.25%		03/15/17		1,125		573,750
								3,596,220
Banks — 0.5%
ANZ National International Ltd., Bank Gtd. Notes, 144A (New Zealand) (original cost $699,342; purchased 07/09/08)(f)(g)	Aa2	6.20%		07/19/13		700		677,292
Business Services — 0.8%
NSG Holdings LLC / NSG Holdings, Inc., Sr. Sec`d. Notes, 144A (original cost $798,500; purchased 03/06/07-05/20/08)(f)(g)	Ba2	7.75%		12/15/25		800		624,000
Petroplus Finance Ltd., Gtd. Notes, 144A (Bermuda) (original cost $175,000; purchased 04/25/07)(f)(g)	B1	6.75%		05/01/14		175		111,125
Petroplus Finance Ltd., Gtd. Notes, 144A (Bermuda) (original cost $175,000; purchased 04/25/07)(f)(g)	B1	7.00%		05/01/17		175		106,750
TransCapitalInvest Ltd., Sec`d. Notes (Ireland)	A3	6.103%		06/27/12		325		248,284
								1,090,159
Cable — 0.4%
CCO Holdings LLC / CCO Holdings Capital Corp., Sr. Unsec`d. Notes	Caa1	8.75%		11/15/13		895		563,850
Capital Goods — 0.6%
Allied Waste North America, Inc., Sr. Sec`d. Notes	Baa3	7.125%		05/15/16		625		568,750
Allied Waste North America, Inc., Sr. Sec`d. Notes	Baa3	7.25%		03/15/15		250		232,500
								801,250

SEE NOTES TO FINANCIAL STATEMENTS.

A28

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Chemicals — 1.1%
Ineos Group Holdings PLC, Sec`d. Notes, 144A (United Kingdom) (original cost $1,389,169; purchased 06/08/06-05/02/08)(f)(g)	Caa2	8.50%		02/15/16	$	1,525	$	137,250
Nalco Co., Gtd. Notes	B3	8.875%		11/15/13		560		473,200
Rockwood Specialties Group, Inc., Gtd. Notes	B3	7.50%		11/15/14		1,025		789,250
								1,399,700
Commercial Services — 1.2%
ARAMARK Corp., Gtd. Notes	B3	8.50%		02/01/15		605		547,525
United Rentals North America, Inc., Gtd. Notes	B1	6.50%		02/15/12		1,255		991,450
								1,538,975
Computer Services & Software — 2.1%
First Data Corp., Gtd. Notes, 144A	B3	9.875%		09/24/15		2,650		1,603,250
Seagate Technology HDD Holdings, Gtd. Notes (Cayman Islands)	Ba1	2.275%	(c)	10/01/09		825		754,875
Seagate Technology HDD Holdings, Gtd. Notes (Cayman Islands)	Ba1	6.375%		10/01/11		600		414,000
								2,772,125
Containers & Packaging — 1.0%
Berry Plastics Holding Corp., Sr. Sec`d. Notes	Caa1	8.875%		09/15/14		875		380,625
Crown Americas LLC / Crown Americas Capital Corp., Gtd. Notes	B1	7.625%		11/15/13		200		198,000
Crown Americas LLC / Crown Americas Capital Corp., Gtd. Notes	B1	7.75%		11/15/15		700		696,500
								1,275,125
Diversified Financial Services — 12.3%
AES Red Oak LLC, Sr. Sec`d. Notes	B1	8.54%		11/30/19		656		577,443
American Express Co., Sr. Sec`d. Notes	A2	7.00%		03/19/18		1,750		1,769,502
Bank of America Corp., Jr. Sub. Notes	A2	8.00%	(c)	12/29/49		2,425		1,744,273
Chukchansi Economic Development Authority, Sr. Unsec`d. Notes, 144A (original cost $350,000; purchased 10/31/05)(f)(g)	B2	8.00%		11/15/13		350		161,875
CIT Group Funding Co. of Canada, Gtd. Notes (Canada)	Baa1	5.60%		11/02/11		75		61,153
CIT Group, Inc., Sr. Unsec`d. Notes	Baa1	2.219%	(c)	03/12/10		125		115,916
CIT Group, Inc., Sr. Unsec`d. Notes	Baa1	5.20%		11/03/10		475		411,636
CIT Group, Inc., Sr. Unsec`d. Notes	Baa1	5.60%		04/27/11		130		109,758
CIT Group, Inc., Sr. Unsec`d. Notes	Baa1	5.80%		07/28/11		100		83,796
CIT Group, Inc., Sr. Unsec`d. Notes, MTN	Baa1	4.75%		12/15/10		550		484,146
Citigroup, Inc., Jr. Sub. Notes	Baa2	8.40%	(c)	04/29/49		2,900		1,914,841
Citigroup, Inc., Sr. Unsec`d. Notes	A2	5.50%		04/11/13		5		4,868
El Paso Performance-Linked Trust, Sr. Unsec`d. Notes, 144A (original cost $2,139,438; purchased 04/08/08, 07/18/08)(f)(g)	Ba3	7.75%		07/15/11		2,100		1,818,075
Ford Motor Credit Co. LLC, Sr. Unsec`d. Notes	Caa1	5.70%		01/15/10		130		110,478
Ford Motor Credit Co. LLC, Sr. Unsec`d. Notes	Caa1	7.80%		06/01/12		2,540		1,781,998
Ford Motor Credit Co. LLC, Sr. Unsec`d. Notes	Caa1	8.00%		12/15/16		400		260,547
Goldman Sachs Group, Inc. (The), Sr. Unsec`d. Notes	A1	5.95%		01/18/18		400		379,269
Goldman Sachs Group, Inc. (The), Sr. Unsec`d. Notes	A1	6.15%		04/01/18		375		360,360
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.75%		10/01/37		1,200		974,242
JET Equipment Trust Equipment Trust, 144A (original cost $122,211; purchased 03/04/02)(f)(g)(i)	NR	10.00%		06/15/12		132		92,321
JET Equipment Trust Sr. Unsec`d. Notes, 144A (original cost $11,899; purchased 10/18/01)(f)(g)	NR	7.63%		08/15/12		11		41
KRATON Polymers LLC / KRATON Polymers Capital Corp., Gtd. Notes	Caa1	8.125%		01/15/14		675		270,000
Lehman Brothers Holdings, Inc., Sr. Unsec`d. Notes(i)	NR	6.625%		01/18/12		50		4,750
Lehman Brothers Holdings, Inc., Sr. Unsec`d. Notes, MTN(i)	NR	5.625%		01/24/13		775		73,625
Lehman Brothers Holdings, Inc., Sub. Notes(i)	NR	7.50%		05/11/38		450		45
Lehman Brothers Holdings, Inc., Sub. Notes, MTN(i)	NR	6.75%		12/28/17		200		20
Merrill Lynch & Co., Inc., Sr. Unsec`d. Notes, MTN	Aa3	4.485%	(c)	05/12/10		400		385,420
SLM Corp., Sr. Unsec`d. Notes, MTN	Baa2	3.695%	(c)	07/26/10		150		128,022
SLM Corp., Sr. Unsec`d. Notes, MTN	Baa2	4.75%		03/17/14		1,000		806,227
SLM Corp., Sr. Unsec`d. Notes, MTN	Baa2	5.00%		10/01/13		475		339,872

SEE NOTES TO FINANCIAL STATEMENTS.

A29

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Diversified Financial Services (continued)
SMFG Preferred Capital USD 3 Ltd., Sr. Sub. Notes, 144A (Cayman Islands) (original cost $205,690; purchased 08/27/08)(f)(g)	A2	9.50%	(c)	07/25/49	$	200	$	183,246
Smurfit Kappa Funding PLC, Sr. Sub. Notes (Ireland)	B2	7.75%		04/01/15		100		54,500
TNK-BP Finance SA, Gtd. Notes, 144A (Luxembourg) (original cost $297,603; purchased 03/13/07)(f)(g)	Baa2	6.625%		03/20/17		300		144,000
TNK-BP Finance SA, Gtd. Notes, 144A (Luxembourg) (original cost $398,504; purchased 07/13/06)(f)(g)	Baa2	7.50%		07/18/16		400		208,000
Universal City Florida Holding Co. I/II, Sr. Notes	B3	7.943%	(c)	05/01/10		50		21,500
Universal City Florida Holding Co. I/II, Sr. Notes	B3	8.375%		05/01/10		950		432,250
								16,268,015
Diversified Manufacturing — 0.6%
Actuant Corp., Gtd. Notes	Ba2	6.875%		06/15/17		345		259,613
Bombardier, Inc., Sr. Unsec`d. Notes, 144A (Canada) (original cost $1,221,645; purchased 11/10/06)(f)(g)	Ba2	7.25%		11/15/16		EUR  700		583,820
								843,433
Electric — 4.0%
AES Corp. (The), Sr. Unsec`d. Notes	B1	7.75%		03/01/14		300		264,000
AES Corp. (The), Sr. Unsec`d. Notes	B1	8.00%		10/15/17		625		512,500
AES Corp. (The), Sr. Unsec`d. Notes, 144A (original cost $100,000; purchased 05/14/08)(f)(g)	B1	8.00%		06/01/20		100		77,500
Energy Future Holdings Corp., Gtd. Notes, 144A (original cost $3,168,588; purchased 11/07/07-05/13/08)(f)(g)	B3	10.875%		11/01/17		3,150		2,236,500
Energy Future Holdings Corp., Gtd. Notes, PIK, 144A (original cost $130,813; purchased 04/23/08-04/29/08)(f)(g)	B3	11.25%		11/01/17		125		60,625
Intergen NV, Sr. Sec`d. Notes, 144A (Netherlands) (original cost $844,625; purchased 04/14/08-06/06/08)(f)(g)	Ba3	9.00%		06/30/17		800		656,000
Ipalco Enterprises, Inc., Sr. Sec`d. Notes, 144A (original cost $644,042; purchased 04/02/08-04/25/08)(f)(g)	Ba1	7.25%		04/01/16		645		528,900
Texas Competitive Electric Holdings Co. LLC, Gtd. Notes, 144A (original cost $1,171,000; purchased 04/04/08, 07/09/08)(f)(g)	B3	10.25%		11/01/15		1,150		816,500
Texas Competitive Electric Holdings Co. LLC, Gtd. Notes, PIK, 144A (original cost $177,188; purchased 04/16/08)(f)(g)	B3	10.50%		11/01/16		175		87,500
								5,240,025
Electronic Components — 0.8%
Celestica, Inc., Sr. Sub. Notes (Canada)	B3	7.625%		07/01/13		330		267,300
Celestica, Inc., Sr. Sub. Notes (Canada)	B3	7.875%		07/01/11		400		364,000
Legrand France SA, Unsub. Notes (France)	Baa3	8.50%		02/15/25		500		437,365
								1,068,665
Environmental Services — 0.2%
Cie Generale de Geophysique-Veritas, Gtd. Notes (France)	Ba3	7.75%		05/15/17		550		319,000
Financial – Bank & Trust — 6.3%
American Express Bank FSB, Sr. Unsec`d. Notes	A1	5.50%		04/16/13		900		852,516
Barclays Bank PLC, Jr. Sub. Notes, 144A (United Kingdom) (original cost $1,191,045; purchased 12/13/07, 12/19/07)(f)(g)	Aa3	7.434%	(c)	09/29/49		1,150		581,417
Barclays Bank PLC, Sr. Sub. Notes, 144A (United Kingdom) (original cost $496,635; purchased 12/07/07)(f)(g)	Aa2	6.05%		12/04/17		500		441,097
Barclays Bank PLC, Sub. Notes, 144A (United Kingdom) (original cost $421,670; purchased 04/18/08, 06/25/08)(f)(g)	Aa2	7.70%	(c)	04/29/49		425		281,036
C8 Capital SPV Ltd., Notes, 144A (British Virgin Islands) (original cost $800,000; purchased 02/06/07)(f)(g)	BB+(d)	6.64%	(c)	12/29/49		800		405,600
HBOS PLC, Sr. Sub. Notes, 144A (United Kingdom) (original cost $398,336; purchased 05/15/08)(f)(g)	Aa3	6.75%		05/21/18		400		352,040
HSBC Holdings PLC, Sub. Notes (United Kingdom)	Aa3	6.50%		09/15/37		1,100		1,117,143
Royal Bank of Scotland Group PLC, Jr. Sub. Notes, 144A (United Kingdom) (original cost $453,906; purchased 06/06/08-06/11/08)(f)(g)	A1	6.99%	(c)	10/29/49		500		233,768

SEE NOTES TO FINANCIAL STATEMENTS.

A30

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Financial – Bank & Trust (continued)
Royal Bank of Scotland Group PLC, Jr. Sub. Notes, MTN (United Kingdom)	A1	7.64%	(c)	03/31/49	$	1,300	$	517,769
Santander Perpetual SA Unipersonal, Bank Gtd. Notes, 144A (Spain) (original cost $496,712; purchased 10/18/07, 12/13/07)(f)(g)	Aa2	6.671%	(c)	10/29/49		500		318,020
UBS AG / Stamford Branch, Sr. Unsec`d. Notes, MTN (Switzerland)	Aa2	5.75%		04/25/18		1,200		1,089,114
UBS Preferred Funding Trust V, Gtd. Notes	A1	6.243%	(c)	05/29/49		250		136,531
Wells Fargo Capital XIII, Gtd. Notes	A1	7.70%	(c)	12/29/49		300		247,593
Wells Fargo Capital XV, Jr. Sub. Notes	Aa2	9.75%	(c)	12/29/49		1,750		1,767,500
								8,341,144
Foods — 0.9%
American Stores Co., Sr. Unsec`d. Notes	Ba3	8.00%		06/01/26		400		250,000
New Albertsons, Inc., Sr. Unsec`d. Notes	Ba3	7.45%		08/01/29		610		359,900
New Albertsons, Inc., Sr. Unsec`d. Notes	Ba3	7.75%		06/15/26		630		384,300
New Albertsons, Inc., Sr. Unsec`d. Notes, MTN	Ba3	6.57%		02/23/28		300		141,000
								1,135,200
Forest & Paper Products — 3.1%
Cascades, Inc., Gtd. Notes (Canada)	Ba3	7.25%		02/15/13		900		468,000
Georgia Pacific LLC, Gtd. Notes, 144A (original cost $674,125; purchased 12/28/07-03/12/08)(f)(g)	Ba3	7.00%		01/15/15		700		595,000
Georgia Pacific LLC, Gtd. Notes, 144A (original cost $1,309,188; purchased 07/19/07-08/21/08)(f)(g)	Ba3	7.125%		01/15/17		1,375		1,155,000
Georgia Pacific LLC, Sr. Unsec`d. Notes	B2	7.375%		12/01/25		1,350		864,000
Georgia Pacific LLC, Sr. Unsec`d. Notes	B2	8.00%		01/15/24		100		67,500
Georgia Pacific LLC, Sr. Unsec`d. Notes	B2	8.125%		05/15/11		200		188,000
Smurfit Kappa Treasury Funding Ltd., Gtd. Notes (Ireland)	Ba2	7.50%		11/20/25		700		413,000
Verso Paper Holdings LLC / Verson Paper, Inc., Sr. Sec`d. Notes	B2	9.125%		08/01/14		825		325,875
								4,076,375
Gaming — 0.8%
Harrah’s Operating Co., Inc., Gtd. Notes, 144A (original cost $678,875; purchased 05/09/08)(f)(g)	Caa2	10.75%		02/01/16		1,125		320,625
Mirage Resorts, Inc., Gtd. Notes	Ba3	7.25%		08/01/17		500		302,500
Wynn Las Vegas Capital Corp., First Mortgage	Ba2	6.625%		12/01/14		620		468,100
								1,091,225
Healthcare Products — 2.5%
Biomet, Inc., Gtd. Notes	B3	10.00%		10/15/17		500		480,000
Biomet, Inc., Gtd. Notes	Caa1	11.625%		10/15/17		3,245		2,774,475
Biomet, Inc., Gtd. Notes, PIK	B3	10.375%		10/15/17		50		39,500
								3,293,975
Healthcare Services — 1.4%
CHS / Community Health Systems, Inc., Gtd. Notes	B3	8.875%		07/15/15		1,465		1,347,800
Health Management Associates, Inc., Sr. Unsec`d. Notes	BB-(d)	6.125%		04/15/16		175		108,500
Service Corp. International, Sr. Unsec`d. Notes	B1	7.625%		10/01/18		500		370,000
								1,826,300
Hospitals/Hospital Management — 3.9%
DaVita, Inc., Gtd. Notes	B1	6.625%		03/15/13		150		142,500
DaVita, Inc., Gtd. Notes	B2	7.25%		03/15/15		605		574,750
HCA, Inc., Sr. Sec`d. Notes	B2	9.25%		11/15/16		4,870		4,468,225
								5,185,475
Insurance — 1.7%
American International Group, Inc., Jr. Sub. Debs, 144A (original cost $426,332; purchased 05/13/08, 05/14/08)(f)(g)	Baa1	8.175%	(c)	05/15/68		425		165,336
American International Group, Inc., Jr. Sub. Notes(g)	Baa1	8.625%	(c)	05/22/68		250		107,831
American International Group, Inc., Sr. Unsec`d. Notes	A3	1.193%	(c)	10/18/11		100		71,895

SEE NOTES TO FINANCIAL STATEMENTS.

A31

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance (continued)
American International Group, Inc., Sr. Unsec`d. Notes, 144A (original cost $1,856,500; purchased 08/13/08, 11/25/08)(f)(g)	A3	8.25%		08/15/18	$	2,025	$	1,482,136
American International Group, Inc., Sr. Unsec`d. Notes, MTN	A3	5.85%		01/16/18		650		435,685
								2,262,883
Machinery & Equipment — 0.3%
Chart Industries, Inc., Sr. Sub. Notes	B3	9.125%		10/15/15		500		375,000
Media — 5.9%
CSC Holdings, Inc., Sr. Unsec`d. Notes	B1	6.75%		04/15/12		100		91,500
CSC Holdings, Inc., Sr. Unsec`d. Notes	B1	7.625%		04/01/11		1,600		1,508,000
CSC Holdings, Inc., Sr. Unsec`d. Notes	B1	7.625%		07/15/18		450		351,000
Dex Media West LLC / Dex Media Finance Co., Sr. Sub. Notes	B2	9.875%		08/15/13		50		11,875
Dex Media West LLC / Dex Media Finance Co., Sr. Unsec`d. Notes	B1	8.50%		08/15/10		830		502,150
Dex Media, Inc., Sr. Unsec`d. Notes	B3	8.00%		11/15/13		225		41,625
Echostar DBS Corp., Gtd. Notes	Ba3	7.00%		10/01/13		475		412,062
Echostar DBS Corp., Gtd. Notes	Ba3	7.125%		02/01/16		2,020		1,686,700
Lighthouse International Co. SA, Sr. Sec`d. Notes, 144A (Luxembourg) (original cost $550,750; purchased 04/08/04 - 07/06/08)(f)(g)	B3	8.00%		04/30/14		EUR  745		491,903
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)	B2	7.75%		03/15/16		1,225		826,875
Unity Media GmbH, Sr. Sec`d. Notes, 144A (Germany) (original cost $450,000; purchased 07/11/05)(f)(g)	Caa1	10.375%		02/15/15		450		349,875
UPC Holding BV, Sr. Sec`d. Notes (Netherlands)	B3	7.75%		01/15/14		EUR  675		717,786
UPC Holding BV, Sr. Sec`d. Notes (Netherlands)	B3	8.625%		01/15/14		EUR  300		325,271
Videotron Ltee, Gtd. Notes, 144A (Canada) (original cost $536,250; purchased 04/28/08)(f)(g)	Ba2	9.125%		04/15/18		500		465,000
								7,781,622
Metals & Mining — 0.7%
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec`d. Notes	Ba2	7.084%	(c)	04/01/15		460		303,600
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec`d. Notes	Ba2	8.375%		04/01/17		800		656,000
								959,600
Oil & Gas Exploration/Production — 1.7%
Chesapeake Energy Corp., Gtd. Notes	Ba3	6.25%		01/15/17		125		104,253
Chesapeake Energy Corp., Gtd. Notes	Ba3	6.875%		01/15/16		125		100,000
Chesapeake Energy Corp., Gtd. Notes	Ba3	7.00%		08/15/14		375		311,250
Chesapeake Energy Corp., Gtd. Notes	Ba3	7.50%		06/15/14		425		359,125
Citic Resources Finance Ltd., Gtd. Notes, 144A (Bermuda) (original cost $24,932; purchased 05/14/07)(f)(g)	Ba2	6.75%		05/15/14		25		16,250
El Paso Corp., Sr. Unsec`d. Notes	Ba3	7.00%		06/15/17		385		301,303
El Paso Corp., Sr. Unsec`d. Notes	Ba3	8.05%		10/15/30		200		130,323
SemGroup LP, Sr. Notes, 144A (original cost $1,338,192; purchased 11/04/05 - 05/21/08)(f)(g)(i)	NR	8.75%		11/15/15		1,350		47,250
Sonat, Inc., Sr. Unsec`d. Notes	Ba3	7.625%		07/15/11		650		592,630
Williams Cos., Inc., Sr. Unsec`d. Notes	Baa3	7.875%		09/01/21		300		229,500
								2,191,884
Oil, Gas & Consumable Fuels — 1.4%
Enterprise Products Operating LLC, Gtd. Notes	Ba1	7.034%	(c)	01/15/68		300		141,000
Enterprise Products Operating LLC, Gtd. Notes	Ba1	8.375%	(c)	08/01/66		510		280,500
Newfield Exploration Co., Sr. Sub. Notes	Ba3	7.125%		05/15/18		100		79,000
OPTI Canada, Inc., Sec`d. Notes (Canada)	B2	8.25%		12/15/14		480		259,200
Petrohawk Energy Corp., Gtd. Notes, 144A (original cost $74,063; purchased 06/20/08)(f)(g)	B3	7.875%		06/01/15		75		55,500
SandRidge Energy, Inc., Gtd. Notes, 144A	B3	8.625%		04/01/15		2,000		1,050,000
								1,865,200
Paper & Forest Products — 0.3%
Berry Plastics Corp., Sr. Sec`d. Notes	B1	5.844%	(c)	02/15/15		525		362,250

SEE NOTES TO FINANCIAL STATEMENTS.

A32

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Pipelines & Other — 2.2%
Dynegy Roseton / Danskammer Pass-Through Trust, Series A, Pass-Through Cerificates	Ba3	7.27%		11/08/10	$	1,150	$	1,092,310
Dynegy Roseton / Danskammer Pass-Through Trust, Series B, Pass-Through Cerificates	Ba3	7.67%		11/08/16		375		266,485
Kinder Morgan Finance Co. ULC, Gtd. Notes (Canada)	Ba1	5.70%		01/05/16		1,225		912,625
Knight, Inc., Sr. Unsec`d. Notes	Ba1	5.15%		03/01/15		100		74,500
NGPL PipeCo. LLC, Sr. Unsec`d. Notes, 144A (original cost $625,000; purchased 12/14/07)(f)(g)	Baa3	7.119%		12/15/17		625		562,621
								2,908,541
Real Estate Investment Trusts — 0.6%
Ventas Realty LP / Ventas Capital Corp., Gtd. Notes	Ba1	6.75%		04/01/17		825		627,000
Ventas Realty LP / Ventas Capital Corp., Gtd. Notes	Ba1	7.125%		06/01/15		250		195,625
								822,625
Retail — 2.0%
AmeriGas Partners LP, Sr. Unsec`d. Notes	Ba3	7.25%		05/20/15		1,500		1,222,500
Ferrellgas Escrow LLC / Ferrellgas Finance Escrow Corp., Sr. Unsec`d. Notes	Ba3	6.75%		05/01/14		805		555,450
Ferrellgas Partners LP / Ferrellgas Partners Finance Corp., Sr. Unsec`d. Notes	B2	8.75%		06/15/12		610		427,000
Suburban Propane Partners LP / Suburban Energy Finance Corp., Sr. Unsec`d. Notes	B1	6.875%		12/15/13		495		405,900
								2,610,850
Semiconductors — 1.0%
Freescale Semiconductor, Inc., Gtd. Notes	B2	8.875%		12/15/14		1,000		440,000
Freescale Semiconductor, Inc., Gtd. Notes, PIK	B2	9.125%		12/15/14		425		97,750
Sensata Technologies BV, Gtd. Notes (Netherlands)	Caa1	8.00%		05/01/14		1,650		742,500
								1,280,250
Services Cyclical – Rental Equipment — 0.5%
Hertz Corp. (The), Gtd. Notes	B1	8.875%		01/01/14		1,095		673,425
Technology — 0.7%
Sanmina-SCI Corp., Gtd. Notes	B3	8.125%		03/01/16		450		175,500
SunGard Data Systems, Inc., Gtd. Notes	Caa1	9.125%		08/15/13		800		692,000
								867,500
Telecommunications — 7.3%
Cincinnati Bell, Inc., Gtd. Notes	Ba3	7.25%		07/15/13		125		110,000
Frontier Communications Corp., Sr. Unsec`d. Notes	Ba2	6.625%		03/15/15		200		146,000
Frontier Communications Corp., Sr. Unsec`d. Notes	Ba2	7.125%		03/15/19		470		314,900
Frontier Communications Corp., Sr. Unsec`d. Notes	Ba2	7.875%		01/15/27		725		420,500
Hawaiian Telecom Communications, Inc., Gtd. Notes(i)	Ca	9.75%		05/01/13		700		52,500
Nordic Telephone Co. Holdings ApS, Sr. Sec`d. Notes, 144A (Denmark) (original cost $250,000; purchased 04/26/06)(f)(g)	B2	8.875%		05/01/16		250		175,000
Nortel Networks Ltd., Gtd. Notes (Canada)(i)	Caa2	10.125%		07/15/13		2,030		537,950
Northwestern Bell Telephone, Sr. Unsec`d. Notes	Ba1	7.75%		05/01/30		750		446,250
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.25%		02/15/11		500		420,000
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.90%		08/15/10		775		705,250
Qwest Communications International, Inc., Gtd. Notes	Ba3	7.50%		02/15/14		1,730		1,236,950
Qwest Corp., Sr. Unsec`d. Notes	Ba1	5.246%	(c)	06/15/13		325		242,125
Sprint Capital Corp., Gtd. Notes	Ba2	6.375%		05/01/09		250		248,437
Sprint Capital Corp., Gtd. Notes	Ba2	6.90%		05/01/19		1,650		1,171,500
Sprint Capital Corp., Gtd. Notes	Ba2	8.75%		03/15/32		200		135,000
Sprint Nextel Corp., Sr. Unsec`d. Notes	Ba2	6.00%		12/01/16		820		578,100
Telesat Canada / Telesat LLC, Sr. Sub. Notes, 144A (original cost $199,000; purchased 06/27/08)(f)(g)	Caa1	12.50%		11/01/17		200		120,000

SEE NOTES TO FINANCIAL STATEMENTS.

A33

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Telecommunications (continued)
Telesat Canada / Telesat LLC, Sr. Unsec`d. Notes, 144A (original cost $474,625; purchased 06/27/08, 07/09/08)(f)(g)	Caa1	11.00%		11/01/15	$	520	$	371,800
Time Warner Telecom Holdings, Inc., Gtd. Notes	B3	9.25%		02/15/14		400		328,000
West Corp., Gtd. Notes	Caa1	9.50%		10/15/14		950		522,500
Wind Acquisition Finance SA, Sr. Sec`d. Notes, 144A (Luxembourg) (original cost $600,000; purchased 11/22/05)(f)(g)	B2	10.75%		12/01/15		600		516,000
Windstream Corp., Gtd. Notes	Ba3	8.125%		08/01/13		100		92,000
Windstream Corp., Gtd. Notes	Ba3	8.625%		08/01/16		890		787,650
								9,678,412
Utilities — 6.0%
Edison Mission Energy, Sr. Unsec`d. Notes	B1	7.20%		05/15/19		850		697,000
Homer City Funding LLC, Sr. Sec`d. Notes	Ba2	8.734%		10/01/26		1,444		1,328,250
IPALCO Enterprises, Inc., Sr. Sec`d. Notes	Ba1	8.625%		11/14/11		175		163,625
NRG Energy, Inc., Gtd. Notes	B1	7.25%		02/01/14		210		196,350
NRG Energy, Inc., Gtd. Notes	B1	7.375%		02/01/16		2,950		2,743,500
NRG Energy, Inc., Gtd. Notes	B1	7.375%		01/15/17		100		92,000
PSE&G Energy Holdings LLC, Sr. Unsec`d. Notes	Ba3	8.50%		06/15/11		1,000		942,616
Reliant Energy Mid-Atlantic Power Holdings LLC, Series B, Pass-Through Cerificates	Ba1	9.237%		07/02/17		318		289,652
Reliant Energy, Inc., Sr. Sec`d. Notes	Ba3	6.75%		12/15/14		1,000		900,000
Tenaska Alabama Partners LP, Sr. Sec`d. Notes, 144A (original cost $747,066; purchased 06/13/05, 08/01/05)(f)(g)	Ba2	7.00%		06/30/21		733		574,633
								7,927,626
TOTAL CORPORATE BONDS (cost $148,793,071)								105,578,425
MUNICIPAL BONDS — 2.5%
Texas — 2.5%
Comal Texas Independent School District, General Obligation Unlimited Bond	Aaa	5.00%		02/01/36		3,000		2,921,700
Transition Communication Mobility, State of Texas, General Obligation Unlimited Bond	Aa1	5.00%		04/01/37		400		388,192
TOTAL MUNICIPAL BONDS (cost $3,377,986)								3,309,892
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATION — 3.1%
Federal National Mortgage Assoc. (cost $4,071,875)		6.00%		TBA		4,000		4,117,500
COLLATERALIZED MORTGAGE OBLIGATIONS — 1.4%
American Home Mortgage Assets, Series 2006-1, Class 2A1	Aaa	0.661%	(c)	05/25/46		55		21,670
American Home Mortgage Assets, Series 2006-4, Class 1A12	Aaa	0.681%	(c)	10/25/46		77		26,828
American Home Mortgage Assets, Series 2006-5, Class A1	Aaa	3.176%	(c)	11/25/46		574		195,276
American Home Mortgage Assets, Series 2007-3, Class 22A1	Aaa	6.25%		06/25/37		263		118,151
American Home Mortgage Investment Trust, Series 2005-2, Class 4A1	Aa1	5.66%	(c)	09/25/45		49		23,319
Bear Stearns Adjustable Rate Mortgage Trust, Series 2007-3, Class 1A1	AAA(d)	5.472%	(c)	05/25/47		87		50,183
Citigroup Mortgage Loan Trust, Inc., Series 2007-10, Class 22AA	AAA(d)	6.012%	(c)	09/25/37		179		94,910
Countrywide Alternative Loan Trust, Series 2005-59, Class 1A1	Aaa	0.838%	(c)	11/20/35		54		26,849
Countrywide Alternative Loan Trust, Series 2005-62, Class 2A1	Aaa	3.256%	(c)	12/25/35		42		20,807
Countrywide Alternative Loan Trust, Series 2006-HY13, Class 4A1	AAA(d)	5.894%	(c)	02/25/37		77		41,772
Countrywide Alternative Loan Trust, Series 2006-OA9, Class 2A1A	Aaa	0.718%	(c)	07/20/46		69		28,049
Countrywide Alternative Loan Trust, Series 2006-OA11, Class A1B	Aaa	0.661%	(c)	09/25/46		89		34,576
Countrywide Alternative Loan Trust, Series 2006-OA17, Class 1A1A	Aaa	0.703%	(c)	12/20/46		152		65,976
Harborview Mortgage Loan Trust, Series 2006-5, Class 2A1A	Aaa	0.761%	(c)	07/19/46		71		28,647
Harborview Mortgage Loan Trust, Series 2006-7, Class 2A1B	Aaa	0.831%	(c)	09/19/46		623		142,664
Indymac Index Mortgage Loan Trust, Series 2006-AR12, Class A1	Aaa	0.661%	(c)	09/25/46		68		27,350
Mastr Adjustable Rate Mortgages Trust, Series 2006-OA1, Class 1A1	Aaa	0.681%	(c)	04/25/46		47		18,280
Residential Accredit Loans, Inc., Series 2007-QS4, Class 2A1	Aaa	0.801%	(c)	03/25/37		312		91,964

SEE NOTES TO FINANCIAL STATEMENTS.

A34

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COLLATERALIZED MORTGAGE OBLIGATIONS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Structured Asset Mortgage Investments, Inc., Series 2006-AR6, Class 2A1	Aaa	0.661%	(c)	07/25/46	$	79	$	34,409
Structured Asset Securities Corp., Series 2005-9XS, Class 2A1	Aaa	0.771%	(c)	06/25/35		643		355,594
Suntrust Alternative Loan Trust, Series 2006-1F, Class 3A	B1	0.821%	(c)	04/25/36		263		109,129
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 1A1	AA(d)	5.706%	(c)	02/25/37		79		43,333
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 2A3	BB(d)	5.863%	(c)	02/25/37		78		54,951
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 4A1	AAA(d)	5.449%	(c)	02/25/37		83		49,375
WaMu Mortgage Pass-Through Certificates, Series 2007-HY2, Class 1A1	AAA(d)	5.606%	(c)	12/25/36		82		40,845
WaMu Mortgage Pass-Through Certificates, Series 2007-OA1, Class A1A	Aaa	2.956%	(c)	02/25/47		74		27,444
WaMu Mortgage Pass-Through Certificates, Series 2007-OA2, Class 1A	Aaa	2.956%	(c)	03/25/47		77		28,883
WaMu Mortgage Pass-Through Certificates, Series 2007-OA3, Class 2A1A	Aaa	3.016%	(c)	04/25/47		79		34,915
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $2,757,963)								1,836,149
ASSET-BACKED SECURITIES — 0.2%
Morgan Stanley Mortgage Loan Trust, Series 2006-12XS, Class A6A (cost $396,740)	Aaa	5.726%	(c)	10/25/36		500		330,998
					Shares
PREFERRED STOCKS — 1.3%
Automotive — 0.1%
General Motors Corp., 5.25%, CVT						22,000		75,680
Diversified Financial Services — 1.1%
Bank of America Corp., 7.25%, CVT						2,200		1,430,000
Citigroup, Inc., 6.50%, CVT						3,850		107,761
								1,537,761
Insurance
American International Group, Inc., 8.50%, CVT						2,900		24,650
Metals & Mining — 0.1%
Freeport-McMoRan Copper & Gold, Inc., 6.75%, CVT						1,900		90,155
TOTAL PREFERRED STOCKS (cost $2,938,578)								1,728,246
TOTAL LONG-TERM INVESTMENTS (cost $178,406,869)								126,220,001
SHORT-TERM INVESTMENTS — 12.8%					Principal Amount (000)#
U.S. TREASURY OBLIGATIONS(n) — 3.4%
U.S. Cash Management Bill		0.22%		04/29/09	$	1,600		1,599,646
U.S. Treasury Bill		0.025%		04/09/09		280		279,917
U.S. Treasury Bill		0.10%		02/26/09		800		799,971
U.S. Treasury Bill		0.23%		01/29/09		730		729,979
U.S. Treasury Bill		0.27%		01/02/09		550		550,000
U.S. Treasury Bill		1.10%		01/29/09		550		550,000
TOTAL U.S. TREASURY OBLIGATIONS (cost $4,508,663)								4,509,513
					Shares
AFFILIATED MONEY MARKET MUTUAL FUND — 3.1%
Dryden Core Investment Fund — Taxable Money Market Series (cost $4,110,142) (Note 4)(w)						4,110,142		4,110,142

SEE NOTES TO FINANCIAL STATEMENTS.

A35

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMERCIAL PAPER(n) — 0.6%	Moody’s Ratings† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Morgan Stanley (cost $748,021)	A1	3.80%	01/26/09	$	750	$	747,198
OPTIONS PURCHASED * — 5.7%				Contracts/ Notional Amounts (000)#
Call Options — 5.7%
Interest Rate Swap Options, expiring 07/06/2009 @ 4.25%					62,000		3,049,180
expiring 07/06/2009 @ 4.25%					23,000		1,136,066
expiring 09/08/2009 @ 4.75%					60,000		3,418,046
TOTAL OPTIONS PURCHASED (cost $1,350,170)							7,603,292
TOTAL SHORT-TERM INVESTMENTS (cost $10,716,996)							16,970,145
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN(o) — 108.4% (cost $189,123,865)							143,190,146
OPTIONS WRITTEN — (5.9)%
Call Options — (5.9)%
Interest Rate Swap Options, expiring 07/06/2009 @ 4.90%					7,700		(1,198,190	)
expiring 07/06/2009 @ 4.90%					20,700		(3,221,109	)
expiring 09/08/2009 @ 5.15%					20,000		(3,364,539	)
TOTAL OPTIONS WRITTEN (premium received $1,316,570)							(7,783,838	)
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN — 102.5%
(cost $187,807,295)							135,406,308
OTHER LIABILITIES IN EXCESS OF OTHER ASSETS(x) — (2.5)%							(3,366,672	)
NET ASSETS — 100.0%						$	132,039,636

The following abbreviations are used in Portfolio descriptions:

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.
CVT	Convertible Security
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
PIK	Payment-in-kind
TBA	To Be Announced
BRL	Brazilian Real
EUR	Euro
GBP	British Pound
MXN	Mexican Peso
MYR	Malaysian Ringgit
PHP	Philippine Peso
RUB	Russian Ruble
SGD	Singapore Dollar

* Non-income producing security.

† The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes.

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

(c) Indicates a variable rate security.

(d) Standard & Poor’s rating.

(f) Private Placement restricted as to resale and does not have a readily available market. The aggregate original cost of such securities is $44,669,642. The aggregate value of $28,416,456 is approximately 21.5% of net assets.

SEE NOTES TO FINANCIAL STATEMENTS.

A36

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(g) Indicates a security that has been deemed illiquid.

(i) Represents issuer in default on interest payments. Non-income producing security.

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

(o) As of December 31, 2008, 2 securities representing $92,362 and 0.1% of net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(w) Prudential Investments LLC, the manager of the Portfolio also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(x) Other liabilities in excess of other assets include unrealized appreciation (depreciation) on futures contracts, forward foreign currency exchange contracts, interest rate and credit default swap agreements as follows:

Futures contracts open at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at Trade Date	Value at December 31, 2008	Unrealized Appreciation
Long Position:
1	90 Day Euro Dollar	Jun 09	241,550	247,175	$	5,625	(1)

⁽¹⁾ Cash of $163,700 has been segregated with the broker to cover requirements for open futures contracts at December 31, 2008

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount (000)	Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
Brazilian Real, Expiring 02/03/09	BRL  4,639	$	2,114,086	$	1,961,951	$	(152,135	)
British Pound, Expiring 01/13/09	GBP  98		150,758		140,846		(9,912	)
Mexican Pesos, Expiring 05/19/09	MXN  57		4,172		3,962		(210	)
Malaysian Ringgit, Expiring 02/12/09	MYR  2,166		615,481		625,137		9,656
Expiring 04/14/09	MYR  1,235		350,000		356,384		6,384
Philippines Peso, Expiring 02/06/09	PHP  19,811		430,932		414,816		(16,116	)
Expiring 05/06/09	PHP  9,682		200,000		201,439		1,439
Expiring 12/23/10	PHP  500		11,171		9,681		(1,490	)
Russian Ruble, Expiring 05/06/09	RUB  59,763		2,452,933		1,733,101		(719,832	)
Singapore Dollar, Expiring 04/14/09	SGD  1,276		870,000		884,627		14,627
Expiring 07/30/09	SGD  217		150,000		150,301		301
		$	7,349,533	$	6,482,245	$	(867,288	)

Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Brazilian Real, Expiring 02/03/09	BRL  4,639	$	1,923,857	$	1,961,951	$	(38,094	)
British Pound, Expiring 01/13/09	GBP  561		830,928		806,273		24,655
Euro, Expiring 01/13/09	EUR  2,973		3,776,306		4,130,125		(353,819	)
Mexican Pesos, Expiring 05/19/09	MXN  57		4,181		3,962		219
Malaysian Ringgit, Expiring 02/12/09	MYR  2,166		602,000		625,137		(23,137	)
Expiring 04/14/09	MYR  1,235		353,546		356,384		(2,838	)
Philippines Peso, Expiring 02/06/09	PHP  19,811		391,859		414,816		(22,957	)
Expiring 05/06/09	PHP  9,682		187,674		201,439		(13,765	)
Expiring 12/23/10	PHP  500		10,346		9,681		665
Russian Ruble, Expiring 05/06/09	RUB  59,763		2,130,921		1,733,101		397,820
Singapore Dollar, Expiring 04/14/09	SGD  1,276		863,097		884,627		(21,530	)
Expiring 07/30/09	SGD  217		151,312		150,301		1,011
		$	11,226,027	$	11,277,797	$	(51,770	)

SEE NOTES TO FINANCIAL STATEMENTS.

A37

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)		Fixed Rate	Floating Rate	Unrealized Appreciation (Depreciation)
Barclays Bank PLC(1)	06/17/10	$	6,400	4.00%	3 month LIBOR	$	30,902
Barclays Bank PLC(1)	06/17/16		120	4.00%	3 month LIBOR		2,184
Barclays Bank PLC(2)	12/17/28		900	5.00%	3 month LIBOR		(303,201	)
Citigroup(2)	12/17/28		4,400	5.00%	3 month LIBOR		(1,501,423	)
Citigroup(2)	12/17/38		2,700	5.00%	3 month LIBOR		(1,227,194	)
Credit Suisse International, Ltd.(1)	06/17/14		4,200	4.00%	3 month LIBOR		160,472
Credit Suisse International, Ltd.(2)	06/17/24		1,000	4.00%	3 month LIBOR		(18,841	)
Deutsche Bank(1)	09/17/11		22,200	4.00%	3 month LIBOR		342,922
Merrill Lynch & Co.(2)	12/17/38		1,700	5.00%	3 month LIBOR		(809,323	)
Morgan Stanley Capital Services, Inc.(2)	12/17/38		2,400	5.00%	3 month LIBOR		(1,105,745	)
Barclays Bank PLC(1)	01/02/12		BRL  11,800	10.68%	Brazilian interbank lending rate		(194,090	)
Goldman Sachs(1)	01/02/12		BRL  1,700	10.15%	Brazilian interbank lending rate		(37,778	)
Merrill Lynch & Co.(1)	01/02/12		BRL  1,000	14.77%	Brazilian interbank lending rate		13,842
Morgan Stanley Capital Services, Inc.(1)	01/02/12		BRL  16,500	10.12%	Brazilian interbank lending rate		(426,899	)
						$	(5,074,172	)

(1) Portfolio pays the floating rate and receives the fixed rate.

(2) Portfolio pays the fixed rate and receives the floating rate.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)(2)		Fixed Rate	Reference Entity/Obligation	Fair Value(4)			Upfront Premiums Paid (Received)		Unrealized (Depreciation)
Credit default swaps on credit indices—Sell Protection(1)
Morgan Stanley Capital Services, Inc.	12/20/10	$	294	1.55%	Dow Jones CDX HY-9 Index	$	(3,655	)	$	—	$	(3,655	)

Counterparty	Termination Date	Notional Amount# (000)(2)		Fixed Rate	Reference Entity/Obligation	Implied Credit Spread at December 31, 2008(3)	Fair Value			Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
Credit default swaps on Corporate and/or Sovereign Issues—Sell Protection(1)
Goldman Sachs	09/20/13	$	400	4.50%	Aramark Services, Inc., 8.50%, due 02/01/15	6.329%	$	(26,495	)	$	—		$	(26,495	)
Merrill Lynch & Co.	09/20/13		3,000	5.00%	GMAC LLC, 6.875%, due 08/28/12	8.063%		(327,833	)		(710,024	)		382,191
Goldman Sachs	09/20/13		100	4.20%	NRG Energy, Inc., 7.25%, due 02/01/14	5.538%		(5,098	)		—			(5,098	)
Barclays Bank PLC	03/20/09		500	0.74%	OJSC Russian Agricultural Bank, 6.875%, due 11/29/10	11.299%		(10,452	)		—			(10,452	)
Barclays Bank PLC	02/20/09		1,000	0.76%	OJSC Russian Agricultural Bank, 6.875%, due 11/29/10	11.292%		(12,190	)		—			(12,190	)
Credit Suisse International, LTD.	09/20/12		150	4.22%	Sanmina-SCI Corp., 8.125%, due 03/01/16	16.332%		(42,461	)		—			(42,461	)
Barclays Bank PLC	06/20/09		500	7.15%	Sprint Nextel Corp., 6.00%, due 12/01/16	13.737%		(13,642	)		—			(13,642	)
Deutsche Bank	09/20/13		850	4.50%	Sungard Data Systems, Inc., 9.125%, due 08/15/13	8.418%		(110,143	)		—			(110,143	)
							$	(548,314	)	$	(710,024	)	$	161,710

The Portfolio entered into credit default swap agreements on corporate issues, sovereign issues and credit indices as the protection seller to provide a measure of protection against the current portfolio of investments’ exposure to market conditions, or to take an active position with respect to the likelihood of a particular issuer’s default or the referenced entity’s credit soundness.

SEE NOTES TO FINANCIAL STATEMENTS.

A38

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008 (continued):

(1) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) Notional amount represents the maximum potential amount the Portfolio could be required to make as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(3) Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

(4) The fair values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement been closed/sold as of the reporting date.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities			Other Financial Instruments*
Level 1—Quoted Prices	$	5,838,389		$	5,625
Level 2—Other Significant Observable Inputs-Long		137,259,395			(5,835,175	)
Level 2—Other Significant Observable Inputs-Short		(7,783,838	)		—
Level 3—Significant Unobservable Inputs		92,362			—
Total	$	135,406,308		$	(5,829,550	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities
Balance as of 12/31/07	$	6,339
Accrued discounts/premiums		679
Realized gain (loss)		(1,081	)
Change in unrealized appreciation (depreciation)		(27,062	)
Net purchases (sales)		(27,951	)
Transfers in and/or out of Level 3		141,438
Balance as of 12/31/08	$	92,362

SEE NOTES TO FINANCIAL STATEMENTS.

A39

	SP PIMCO HIGH YIELD PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of investments and other liabilities in excess of other assets shown as a percentage of net assets as December 31, 2008 were as follows:

Industry
Diversified Financial Services	13.4	%
Telecommunications	7.3
Financial – Bank & Trust	6.3
Utilities	6.0
Bank Notes	6.0
Media	5.9
Options Purchased	5.7
Electric	4.0
Hospitals/Hospital Management	3.9
U.S. Treasury Obligations	3.4
U.S. Government Mortgage-Backed Obligations	3.1
Affiliated Money Market Mutual Fund	3.1
Forest & Paper Products	3.1
Automotive	2.8
Municipal Bonds	2.5
Healthcare Products	2.5
Pipelines & Other	2.2
Computer Services & Software	2.1
Retail	2.0
Insurance	1.7
Oil & Gas Exploration/Production	1.7
Oil, Gas & Consumable Fuels	1.4
Collateralized Mortgage Obligations	1.4
Healthcare Services	1.4
Commercial Services	1.2
Convertible Bonds	1.1
Chemicals	1.1
Semiconductors	1.0
Containers & Packaging	1.0
Foods	0.9
Gaming	0.8
Business Services	0.8
Electronic Components	0.8
Metals & Mining	0.8
Technology	0.7
Real Estate Investment Trusts	0.6
Capital Goods	0.6
Commercial Paper	0.6
Diversified Manufacturing	0.6
Banks	0.5
Services Cyclical – Rental Equipment	0.5
Cable	0.4
Advertising	0.4
Machinery & Equipment	0.3
Paper & Forest Products	0.3
Asset-Backed Securities	0.2
Environmental Services	0.2
Airlines	0.1
	108.4
Options Written	(5.9	)
Other liabilities in excess of other assets	(2.5	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A40

SP PIMCO HIGH YIELD PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value:
Unaffiliated investments (cost $185,013,723)	$	139,080,004
Affiliated investments (cost $4,110,142)		4,110,142
Cash		2,492,243
Foreign currency, at value (cost $34,403)		33,010
Receivable for investments sold		44,960,140
Dividends and interest receivable		3,338,528
Unrealized appreciation on swap agreements		932,513
Unrealized appreciation on foreign currency forward contracts		456,777
Payments made for swap agreements		164,204
Receivable for Series shares sold		54,997
Prepaid expenses		1,794
Total Assets		195,624,352
LIABILITIES
Payable for investments purchased		48,411,037
Written options outstanding, at value (premium received $1,316,570)		7,783,838
Unrealized depreciation on swap agreements		5,848,630
Unrealized depreciation on foreign currency forward contracts		1,375,835
Accrued expenses and other liabilities		98,516
Management fee payable		62,421
Deferred trustees’ fees		1,875
Payments received for swap agreements		1,073
Transfer agent fees payable		773
Payable for Series shares repurchased		630
Due to broker-variation margin		88
Total Liabilities		63,584,716
NET ASSETS	$	132,039,636
Net assets were comprised of:
Paid-in capital	$	197,755,636
Retained earnings		(65,716,000	)
Net assets, December 31, 2008	$	132,039,636
Net asset value and redemption price per share, $132,039,636 / 19,720,185 outstanding shares of beneficial interest	$	6.70

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest income	$	15,255,066
Unaffiliated dividend income		173,838
Affiliated dividend income		27,860
		15,456,764
EXPENSES
Management fee		1,075,118
Custodian’s fees and expenses		126,500
Audit fee		44,000
Shareholders’ reports		30,500
Trustees’ fees		13,000
Legal fees and expenses		7,000
Transfer agent’s fees and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Insurance expenses		3,000
Commitment fee on syndicated credit agreement		2,000
Miscellaneous		14,736
Total expenses		1,319,854
NET INVESTMENT INCOME		14,136,910
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		(8,601,628	)
Futures transactions		415,723
Options written transactions		1,174,980
Swap agreement transactions		(1,224,538	)
Foreign currency transactions		143,127
		(8,092,336	)
Net change in unrealized appreciation (depreciation) on:
Investments		(45,079,113	)
Futures		(159,825	)
Options written		(5,080,549	)
Swap agreements		(3,668,779	)
Foreign currencies		(1,062,084	)
		(55,050,350	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(63,142,686	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(49,005,776	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	14,136,910		$	16,906,097
Net realized gain (loss) on investments and foreign currency transactions		(8,092,336	)		193,278
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(55,050,350	)		(8,467,395	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(49,005,776	)		8,631,980
DISTRIBUTIONS		(14,819,386	)		(19,316,825	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,389,047 and 974,027 shares, respectively]		13,052,609			10,047,357
Series shares issued in reinvestment of distributions [1,796,984 and 1,921,263 shares, respectively]		14,819,386			19,316,825
Series shares repurchased [4,415,455 and 8,500,462 shares, respectively]		(38,000,243	)		(87,117,703	)
DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(10,128,248	)		(57,753,521	)
TOTAL DECREASE IN NET ASSETS		(73,953,410	)		(68,438,366	)
NET ASSETS:
Beginning of year		205,993,046			274,431,412
End of year	$	132,039,636		$	205,993,046

SEE NOTES TO FINANCIAL STATEMENTS.

A41

	SP PIMCO TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 174.2% ASSET-BACKED SECURITIES(c) — 1.0%	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#			Value (Note 2)
Asset Backed Securities Corp. Home Equity, Series 2004-HE6, Class A1	Aaa	0.746%		09/25/34	$	614		$	480,651
Aurum CLO 2002-1 Ltd./Aurum CLO 2002-1 Corp., Series 2002-1A, Class A1, 144A (original cost $1,475,206; purchased 12/05/08)(g)(l)	Aaa	5.183%		04/15/14		1,731			1,633,245
Countrywide Asset-Backed Certificates, Series 2006-SD1, Class A1, 144A (original cost $467,348; purchased 02/17/06)(g)(l)	AAA(d)	0.631%		02/25/36		467			436,173
MBNA Credit Card Master Note Trust, Series 2004-A7, Class A7	Aaa	1.295%		12/15/11		2,000			1,942,909
Merrill Lynch Mortgage Investors, Inc., Series 2006-FF1, Class A2A	Aaa	0.541%		08/25/36		1,435			1,351,696
Morgan Stanley IXIS Real Estate Capital Trust, Series 2006-2, Class A1	Aaa	0.521%		11/25/36		491			459,641
Soundview Home Equity Loan Trust, Series 2007-OPT5, Class 2A1	Aaa	1.271%		10/25/37		1,348			1,201,698
Structured Asset Securities Corp., Series 2006-BC3, Class A2	Aaa	0.521%		10/25/36		3,337			3,084,162
TOTAL ASSET-BACKED SECURITIES (cost $10,739,644)									10,590,175
BANK NOTES(c) — 2.7%
Chrysler Financial, Term, 144A (original cost $27,956,125; purchased 07/31/07, 11/28/07)(g)(l)	CAA(d)	6.00%		08/03/14		29,427			14,818,836
CSC Holdings, Inc., Term B (original cost $1,777,939; purchased 02/11/08, 02/12/08)(g)(l)	BAA-(d)	2.95%		02/24/13		1,980			1,681,872
First Data Corp., Term B2 (original cost $53,087; purchased 02/13/08)(g)(l)	BA-(d)	3.21%		09/24/14		59			37,771
First Data Corp., Term B2 (original cost $884,124; purchased 02/13/08)(g)(l)	BA-(d)	3.21%		09/24/14		931			596,166
HCA, Inc., Term B (original cost $7,767,218; purchased 07/24/07, 02/12/08)(g)(l)	BA-(d)	3.71%		11/14/13		8,082			6,319,388
Metro Goldwyn, Term B1 (original cost $3,930,000; purchased 03/14/07)(g)(l)	BA-(d)	4.71%		04/08/12		3,930			1,611,300
NRG Energy, Inc., Term B (original cost $4; purchased 02/11/08, 02/12/08)(g)(l)	BA+(d)	2.96%		02/01/13		—	(r)		4
TXU Corp., Term B3 (original cost $20,551; purchased 08/28/08)(g)(l)	BA-(d)	3.96%		10/10/14		21			14,206
TXU Corp., Term B3 (original cost $3,934,368; purchased 01/15/08-08/28/08)(g)(l)	BA-(d)	5.37%		10/10/14		4,038			2,791,507
TOTAL BANK NOTES (cost $46,680,462)									27,871,050
COLLATERALIZED MORTGAGE OBLIGATIONS — 6.7%
Asset Backed Funding Certificates, Series 2006-OPT3, Class A3A	Aaa	0.531%	(c)	11/25/36		493			468,436
Banc of America Mortgage Securities, Inc., Series 2004-2, Class 5A1	Aaa	6.50%		10/25/31		127			117,224
Bear Stearns Adjustable Rate Mortgage Trust, Series 2002-11, Class 1A1	Aaa	5.605%	(c)	02/25/33		361			290,326
Bear Stearns Adjustable Rate Mortgage Trust, Series 2005-2, Class A2	Aaa	4.125%	(c)	03/25/35		4,125			3,212,241
Bear Stearns Adjustable Rate Mortgage Trust, Series 2005-4, Class 23A2	Aaa	5.366%	(c)	05/25/35		2,634			1,819,493
Bear Stearns Alt-A Trust, Series 2006-2, Class 23A1	Aaa	5.85%	(c)	03/25/36		766			352,354
Brazos Student Finance Corp., Series 1998-A, Class A2	NR	2.70%	(c)	06/01/23		21			20,251
Citigroup Mortgage Loan Trust, Inc., Series 2005-10, Class 1A2A	Aaa	5.345%	(c)	12/25/35		653			360,156
Countrywide Alternative Loan Trust, Series 2005-63, Class 3A1	Aaa	5.889%		11/25/35		734			351,104
Countrywide Alternative Loan Trust, Series 2007-OA7, Class A1A	Aaa	0.651%	(c)	05/25/47		4,220			1,732,302
Countrywide Alternative Loan Trust, Series 2006-OA16, Class A3	Aaa	0.721%	(c)	10/25/46		632			131,867
Countrywide Alternative Loan Trust, Series 2006-OA19, Class A1	Aaa	0.688%	(c)	02/20/47		5,659			2,321,241
Countrywide Alternative Loan Trust, Series 2006-OA3, Class 2A2	Baa1	0.741%	(c)	05/25/36		618			163,027
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2005-HYB6, Class 5A1	Aaa	5.367%	(c)	10/20/35		821			424,591
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2006-3, Class 2A2	Aaa	0.811%	(c)	03/25/36		1,009			248,318

SEE NOTES TO FINANCIAL STATEMENTS.

A42

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COLLATERALIZED MORTGAGE OBLIGATIONS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2006-3, Class 3A2	Baa3	0.821%	(c)	02/25/36	$	573	$	129,402
Countrywide Home Loan Mortgage Pass-Through Trust, Series 2006-HYB3, Class 3A1B	Aaa	5.764%	(c)	05/20/36		1,662		829,653
Deutsche Alt-A Securities, Inc. Alternate Loan Trust, Series 2006-AB3, Class A5B	Aaa	6.30%		07/25/36		900		496,164
Downey Savings & Loan Association Mortgage Loan Trust, Series 2005-AR3, Class 2A2	A2	0.901%	(c)	07/19/45		624		186,152
Fannie Mae, Series 2001-29, Class Z	Aaa	6.50%		07/25/31		216		223,724
FHLMC Structured Pass-Through Securities, Series T-61, Class 1A1	Aaa	3.655%	(c)	07/25/44		2,121		1,912,651
FHLMC Structured Pass-Through Securities, Series T-62, Class 1A1	Aaa	3.455%	(c)	10/25/44		1,394		1,335,695
Freddie Mac, Series 3346, Class FA	Aaa	1.425%	(c)	02/15/19		8,826		8,478,000
Government Lease Trust, Series 1999-C1A, Class B2, 144A (original cost $1,346,953; purchased 02/14/03)(g)(l)	AAA(d)	4.00%		05/18/11		1,500		1,463,164
Government National Mortgage Assoc., Series 2000-14, Class F	Aaa	1.699%	(c)	02/16/30		16		15,673
Greenpoint Mortgage Funding Trust, Series 2006-AR3, Class 4A2	Aaa	0.741%	(c)	04/25/36		850		273,218
Greenpoint Mortgage Funding Trust, Series 2006-AR6, Class A1A	Aaa	0.551%	(c)	10/25/46		2,546		2,043,900
GSR Mortgage Loan Trust, Series 2005-AR6, Class 2A1	AAA(d)	4.54%	(c)	09/25/35		5,020		3,700,637
Harborview Mortgage Loan Trust, Series 2006-7, Class 2A1B	Aaa	0.831%	(c)	09/19/46		810		185,463
Harborview Mortgage Loan Trust, Series 2006-12, Class 2A11	Aaa	0.671%	(c)	01/19/38		891		797,460
Homebanc Mortgage Trust, Series 2006-2, Class A1	Aaa	0.651%	(c)	12/25/36		970		377,497
Impac Secured Assets CMN Owner Trust, Series 2006-4, Class A2A	Aa2	0.551%	(c)	01/25/37		161		150,026
Indymac Adjustable Rate Mortgage Trust, Series 2001-H2, Class A1	Aaa	4.446%	(c)	01/25/32		4		4,236
Indymac Index Mortgage Loan Trust, Series 2005-AR7, Class 4A1	Aaa	5.279%	(c)	06/25/35		691		394,384
Indymac Index Mortgage Loan Trust, Series 2005-AR15, Class A2	Aaa	5.099%		09/25/35		696		334,057
Lehman XS Trust, Series 2006-14N, Class 1A2(i)	Aaa	0.711%	(c)	09/25/46		938		206,208
Lehman XS Trust, Series 2006-16N, Class A4B(i)	Aaa	0.711%	(c)	11/25/46		902		194,079
Lehman XS Trust, Series 2006-GP2, Class 3A2(i)	Aaa	0.701%	(c)	06/25/46		828		200,595
Master Asset Securitization Trust, Series 2003-7, Class 1A2	AAA(d)	5.50%		09/25/33		2,332		2,204,006
Mastr Reperforming Loan Trust, Series 2006-1, Class 1A4, 144A (original cost $1,285,444; purchased 12/05/08)(g)(l)	Aaa	8.00%		07/25/35		1,330		1,476,559
Merrill Lynch Alternative Note Asset, Series 2007-A2, Class A3C	B3	0.771%	(c)	03/25/37		1,000		275,179
Merrill Lynch Floating Trust, Series 2006-1, Class A1, 144A (original cost $1,440,298; purchased 10/31/06)(g)(l)	Aaa	1.265%	(c)	06/15/22		1,440		1,092,546
Merrill Lynch Mortgage Backed Securities Trust, Series 2007-1, Class 2A1	AA(d)	5.849%	(c)	04/25/37		1,783		1,273,534
Merrill Lynch Mortgage Investors, Inc., Series 2005-A10, Class A	Aaa	0.681%	(c)	02/25/36		2,237		1,190,186
Morgan Stanley Mortgage Loan Trust, Series 2006-12XS, Class A6A	Aaa	5.726%		10/25/36		600		397,198
Morgan Stanley Mortgage Loan Trust, Series 2007-7AX, Class 2A3	Ba3	0.831%	(c)	04/25/37		1,800		653,708
Nomura Asset Acceptance Corp., Series 2007-1, Class 1A4	Aa3	6.138%		03/25/47		700		331,781
Nomura Asset Acceptance Corp., Series 2007-1, Class 1A6	Aa3	5.82%		03/25/47		700		476,475
Opteum Mortgage Acceptance Corp., Series 2005-3, Class A1B	Aaa	0.731%	(c)	07/25/35		782		646,369
Residential Accredit Loans, Inc., Series 2007-QH4, Class A2	Aaa	0.701%	(c)	05/25/37		1,225		263,061
Residential Funding Mortgage Securities I, Series 2003-S9, Class A1	Aaa	6.50%		03/25/32		370		355,011
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-1, Class 8A1	A(d)	5.95%	(c)	02/25/36		682		323,506
Structured Asset Mortgage Investments, Inc., Series 2006-AR5, Class 1A2	Aaa	0.731%	(c)	05/25/46		615		165,445
Structured Asset Mortgage Investments, Inc., Series 2006-AR5, Class 2A2	Aaa	0.731%	(c)	05/25/46		809		236,418
Structured Asset Mortgage Investments, Inc., Series 2006-AR7, Class A1BG	Aaa	0.591%	(c)	08/25/36		4,976		1,990,147
Thornburg Mortgage Securities Trust, Series 2003-2, Class A1	Aaa	1.151%	(c)	04/25/43		336		292,478
WaMu Mortgage Pass-Through Certificates, Series 2002-AR17, Class 1A	Aaa	3.456%	(c)	11/25/42		512		421,803
WaMu Mortgage Pass-Through Certificates, Series 2003-AR9, Class 2A	Aaa	4.493%	(c)	09/25/33		536		461,319

SEE NOTES TO FINANCIAL STATEMENTS.

A43

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COLLATERALIZED MORTGAGE OBLIGATIONS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
WaMu Mortgage Pass-Through Certificates, Series 2003-R1, Class A1	Aaa	1.011%	(c)	12/25/27	$	8,279	$	6,855,427
WaMu Mortgage Pass-Through Certificates, Series 2004-AR13, Class A1B2	Aaa	0.865%	(c)	11/25/34		1,559		521,472
WaMu Mortgage Pass-Through Certificates, Series 2005-AR13, Class A1A1	Aaa	0.761%	(c)	10/25/45		2,760		1,507,207
WaMu Mortgage Pass-Through Certificates, Series 2005-AR15, Class A1B2	Aaa	0.881%	(c)	11/25/45		700		160,690
WaMu Mortgage Pass-Through Certificates, Series 2005-AR17, Class A1B2	Aaa	0.881%	(c)	12/25/45		700		137,775
WaMu Mortgage Pass-Through Certificates, Series 2006-AR10, Class 1A1	AAA(d)	5.917%	(c)	09/25/36		1,033		597,469
WaMu Mortgage Pass-Through Certificates, Series 2006-AR16, Class 1A1	AAA(d)	5.594%	(c)	12/25/36		293		169,222
WaMu Mortgage Pass-Through Certificates, Series 2006-AR17, Class 1A	Aaa	3.076%	(c)	12/25/46		1,683		632,348
WaMu Mortgage Pass-Through Certificates, Series 2006-AR17, Class 1A1A	Aaa	3.066%	(c)	12/25/46		2,049		874,416
WaMu Mortgage Pass-Through Certificates, Series 2006-AR17, Class 2A	Aaa	4.625%	(c)	12/25/46		563		259,014
WaMu Mortgage Pass-Through Certificates, Series 2006-AR18, Class 1A1	A(d)	5.324%	(c)	01/25/37		1,271		715,773
WaMu Mortgage Pass-Through Certificates, Series 2007-HY4, Class 1A1	BBB(d)	5.503%	(c)	04/25/37		3,914		2,062,734
Washington Mutual Alternative Mortgage Pass-Through Certificates, Series 2006-AR3, Class A1A	Aaa	3.226%	(c)	05/25/46		3,909		1,671,931
Washington Mutual Mortgage Pass-Through Certificates, Series 2003-AR1, Class 2A	Aaa	5.813%	(c)	02/25/33		35		28,024
Washington Mutual MSC Mortgage Pass-Through Certifiecates, Series 2004-RA4, Class 2A	AAA	6.50%		08/25/34		2,924		2,598,222
Washington Mutual, Inc., Series 2002-AR2, Class A	Aaa	4.375%	(c)	02/27/34		892		722,797
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $97,760,825)								69,986,219
CORPORATE BONDS — 41.6%
Aerospace — 0.2%
Goodrich Corp., Sr. Unsec’d. Notes(g)	Baa2	6.29%		07/01/16		2,200		2,186,470
Airlines
United AirLines, Inc., Pass-Through Certificates(g)(i)	NR	9.21%		01/21/17		81		65
Automobile Manufacturers — 0.6%
DaimlerChrysler NA Holding Corp., Gtd. Notes	A3	2.426%	(c)	03/13/09		3,500		3,374,560
DaimlerChrysler NA Holding Corp., Gtd. Notes, MTN	A3	5.75%		09/08/11		3,400		2,871,433
								6,245,993
Biotechnology — 0.1%
Amgen, Inc., Sr. Unsec’d. Notes	A3	5.85%		06/01/17		1,100		1,136,017
Building Materials — 0.4%
Lennar Corp., Gtd. Notes	Ba3	5.95%		10/17/11		5,000		3,825,000
Diversified — 1.9%
C10 Capital SPV Ltd., Debs., 144A (original cost $2,500,000; purchased 12/11/06)(g)(l)	BB+(d)	6.722%	(c)	12/31/49		2,500		1,189,575
General Electric Co., Sr. Unsec’d. Notes	Aaa	5.25%		12/06/17		3,800		3,788,399
iStar Financial, Inc., Sr. Unsec’d. Notes(g)	Ba3	5.80%		03/15/11		1,000		350,000
Siemens Financieringsmaatschappij NV, Gtd. Notes, 144A (Netherlands) (original cost $14,700,000; purchased 08/09/06)(g)(l)	A1	2.183%	(c)	08/14/09		14,700		14,713,068
								20,041,042

SEE NOTES TO FINANCIAL STATEMENTS.

A44

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Financial – Bank & Trust — 15.3%
American Express Bank FSB, Sr. Unsec’d. Notes	A1	5.50%		04/16/13	$	6,000	$	5,683,440
ANZ National International Ltd., Bank Gtd. Notes, 144A (New Zealand) (original cost $12,987,780; purchased 07/09/08)(g)(l)	Aa2	6.20%		07/19/13		13,000		12,578,280
Bank of America Corp., Jr. Sub. Notes	A2	8.125%	(c)	12/29/49		8,000		5,984,000
Bank of America Corp., Sr. Unsec’d. Notes	A1	5.65%		05/01/18		1,500		1,508,901
Barclays Bank PLC, Sub. Notes, 144A (United Kingdom) (original cost $13,900,000; purchased 04/18/08)(g)(l)	Aa2	7.70%	(c)	04/29/49		13,900		9,191,514
Citigroup, Inc., Jr. Sub. Notes	Baa3	8.40%	(c)	04/29/49		17,300		11,423,017
Credit Suisse / New York NY, Sr. Unsec’d. Notes, MTN (Switzerland)	Aa1	5.00%		05/15/13		21,200		20,403,537
Deutsche Bank AG, Sr. Unsec’d. Notes (Germany)	Aa1	4.875%		05/20/13		18,400		18,064,936
Deutsche Bank AG, Sr. Unsec’d. Notes (Germany)	Aa1	6.00%		09/01/17		5,400		5,729,686
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	6.25%		09/01/17		5,600		5,429,962
National Australia Bank Ltd., Bonds, 144A (Australia) (original cost $7,600,000; purchased 02/01/08)(g)(l)	Aa1	2.838%	(c)	02/08/10		7,600		7,605,092
Norddeutsche Landesbank Girozentrale AG, Pfandriefe, MTN (Germany)	Aaa	0.45%		01/19/09		JPY2,456,000		27,088,203
PNC Funding Corp., FDIC Gtd.	Aaa	2.30%		06/22/12		5,300		5,352,942
Rabobank Nederland, Sr. Notes, 144A (Netherlands) (original cost $6,700,000; purchased 01/17/06)(g)(l)	NR	4.773%	(c)	01/15/09		6,700		6,705,588
Santander US Debt SA Unipersonal, Bank Gtd. Notes, 144A (Spain) (original cost $15,495,645; purchased 01/13/06)(g)(l)	Aa1	2.766%	(c)	02/06/09		15,500		15,494,916
UBS AG, Sr. Unsec’d. Notes (Switzerland)	Aa2	5.875%		12/20/17		200		183,729
Vornado Realty LP, Sr. Unsec’d. Notes	Baa2	5.60%		02/15/11		1,000		903,806
								159,331,549
Financial Services — 15.7%
American Express Co., Sr. Unsec’d. Notes	A2	7.00%		03/19/18		13,000		13,144,872
American Express Credit Corp., Sr. Unsec’d. Notes, MTN	A1	5.875%		05/02/13		4,500		4,319,883
Bank of America Corp., Jr. Sub. Notes	A2	8.00%	(c)	12/29/49		40,600		29,203,093
CitiFinancial, Inc., Sr. Unsec’d. Notes(g)	A2	6.625%		06/01/15		600		556,394
Citigroup Capital XXI, Gtd. Notes	A3	8.30%	(c)	12/21/57		11,000		8,483,607
Citigroup, Inc., Sr. Unsec’d. Notes	A2	3.505%	(c)	01/30/09		1,900		1,900,600
Citigroup, Inc., Sr. Unsec’d. Notes	A2	5.50%		04/11/13		8,900		8,665,788
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aaa	5.875%		01/14/38		15,800		15,465,988
General Electric Capital Corp., Sub. Notes, 144A (original cost $14,999,395; purchased 08/30/07)(g)(l)	Aa1	6.50%	(c)	09/15/67		GBP  7,500		6,804,164
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes	C	6.75%		12/01/14		10,500		7,178,283
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes	C	6.875%		08/28/12		10,800		8,189,359
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes	C	8.00%		11/01/31		600		351,059
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.35%		01/15/16		1,300		1,187,195
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.75%		10/01/16		6,000		5,622,372
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.75%		10/01/37		8,200		6,657,318
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(i)	NR	5.625%		01/24/13		16,800		1,596,000
Merrill Lynch & Co., Inc., Notes, MTN	A1	6.875%		04/25/18		14,000		14,644,364
Morgan Stanley, Sr. Unsec’d. Notes	A2	6.75%		04/15/11		2,000		1,967,852
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	2.498%	(c)	02/09/09		15,400		15,323,277
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	6.625%		04/01/18		12,100		10,615,209
Pemex Project Funding Master Trust, Gtd. Notes	Baa1	9.125%		10/13/10		430		452,575
Petroleum Export Ltd., Sr. Sec’d. Notes, 144A (Cayman Islands) (original cost $1,511,499; purchased 07/14/05)(g)(l)	Baa1	5.265%		06/15/11		1,512		1,403,033
								163,732,285
Healthcare – Services — 0.1%
Cardinal Health, Inc., Sr. Unsec’d. Notes	Baa2	6.00%		06/15/17		1,100		1,003,234
HCA, Inc., Sr. Sec’d. Notes	B2	9.25%		11/15/16		200		183,500
								1,186,734

SEE NOTES TO FINANCIAL STATEMENTS.

A45

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance — 2.4%
American International Group, Inc., Jr. Sub. Debs., 144A (original cost $14,000,000; purchased 05/13/08)(g)(l)	Baa1	8.175%	(c)	05/15/58	14,000		$	5,446,350
American International Group, Inc., Sr. Unsec’d. Notes, 144A (original cost $11,000,000; purchased 08/13/08)(g)(l)	A3	8.25%		08/15/18	11,000			8,051,109
American International Group, Inc., Sr. Unsec’d. Notes, MTN	A3	2.628%	(c)	07/19/13	EUR  3,100			2,388,913
ASIF III Jersey Ltd., Sr. Sec’d. Notes, MTN (Japan)	Aa3	0.95%		07/15/09	JPY  875,000			8,921,429
								24,807,801
Oil, Gas & Consumable Fuels — 0.1%
El Paso Corp., Sr. Unsec’d. Notes	Ba3	7.00%		05/15/11	200			181,957
El Paso Corp., Sr. Unsec’d. Notes, MTN	Ba3	7.80%		08/01/31	850			553,777
								735,734
Paper & Forest Products — 0.4%
Georgia-Pacific LLC, Gtd. Notes, 144A (original cost $900,000; purchased 12/31/06)(g)(l)	Ba3	7.00%		01/15/15	900			765,000
Georgia-Pacific LLC, Gtd. Notes, 144A (original cost $1,300,000; purchased 12/13/06)(g)(l)	Ba3	7.125%		01/15/17	1,300			1,092,000
Georgia-Pacific LLC, Sr. Unsec’d. Notes	B2	7.75%		11/15/29	3,000			1,890,000
								3,747,000
Retail & Merchandising — 0.6%
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.75%		08/15/11	3,700			3,712,794
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	5.80%		02/15/18	2,200			2,434,410
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	6.50%		08/15/37	400			474,926
								6,622,130
Telecommunications — 1.4%
Embarq Corp., Sr. Unsec’d. Notes	Baa3	7.082%		06/01/16	6,000			4,620,000
Qwest Corp., Sr. Unsec’d. Notes	Ba1	7.625%		06/15/15	7,000			5,740,000
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.875%		03/15/12	1,650			1,526,250
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	5.85%		09/15/35	2,500			2,487,375
								14,373,625
Tobacco — 0.3%
Reynolds American, Inc., Sr. Sec’d. Notes	Baa3	7.625%		06/01/16	4,000			3,331,252
Utilities — 2.1%
Edison Mission Energy, Sr. Unsec’d. Notes	B1	7.625%		05/15/27	4,700			3,642,500
Illinois Power Co., Sr. Sec’d. Notes	Baa3	6.25%		04/01/18	14,300			12,771,316
Virginia Electric and Power Co., Sr. Unsec’d. Notes	Baa1	8.875%		11/15/38	4,500			5,695,033
								22,108,849
TOTAL CORPORATE BONDS (cost $504,325,670)								433,411,546
FOREIGN GOVERNMENT BONDS — 2.8%
Bundesrepublik Deutschland, Bonds (Germany)	Aaa	4.25%		07/04/39	EUR  10,000			15,787,045
France Government, Bonds (France)	Aaa	4.00%		04/25/55	EUR  1,400			2,096,896
Republic of Brazil, Sr. Unsec’d. Notes (Brazil)	Ba1	12.50%		01/05/22	BRL  18,300			8,121,998
United Kingdom Gilt, Bonds (United Kingdom)	AAA(d)	4.50%		12/07/42	GBP  2,200			3,598,608
TOTAL FOREIGN GOVERNMENT BONDS (cost $28,098,170)								29,604,547
MUNICIPAL BONDS — 6.8%
Arizona — 0.1%
Salt River Project Agricultural Improvement & Power District, Revenue Bonds	Aa1	4.75%		01/01/32	1,000	(f)		936,210
Salt River Project Agricultural Improvement & Power District, Series B, Revenue Bonds (original cost $516,495; purchased 04/29/05)(g)(l)	AA(d)	7.72%	(c)	01/01/32	500			436,210
								1,372,420

SEE NOTES TO FINANCIAL STATEMENTS.

A46

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

MUNICIPAL BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#			Value (Note 2)
California — 0.1%
State of California, General Obligation Bonds	A1	4.50%		08/01/28	$	100		$	80,967
University of California, Revenue Bonds	Aa2	5.00%		05/15/37		500			456,255
									537,222
Georgia — 0.1%
Georgia State Road & Tollway Authority, Revenue Bonds	Aaa	5.00%		03/01/21		700			710,388
Hawaii — 0.3%
Honolulu Hawaii City & County, Series 1115, General Obligation Bonds	Aa2	5.00%		07/01/23		3,075	(f)		3,100,738
Illinois — 3.0%
Chicago Illinois Transit Authority, Revenue Bonds	Aa3	6.899%		12/01/40		16,600			16,382,540
Illinois Finance Authority, Revenue Bonds	Aa1	5.75%		07/01/33		4,900			4,989,572
Illinois State, General Obligation Bond	Aa3	5.00%		11/01/22		300			302,106
Illinois State, General Obligation, Unlimited Notes	MIG2	4.50%		06/24/09		8,500			8,574,035
Regional Transportation Authority, Series A, Revenue Bonds	Aa2	5.00%		07/01/25		1,600			1,597,328
									31,845,581
Massachusetts — 1.9%
Massachusetts Health & Educational Facilities Authority, Revenue Bonds	Aaa	5.50%		07/01/36		5,100			5,279,010
Massachusetts Health & Educational Facilities Authority, Revenue Bonds	Aaa	6.00%		07/01/36		5,100			5,469,546
Massachusetts Health & Educational Facilities Authority, Series A, Revenue Bonds	Aaa	5.50%		11/15/36		6,500			6,734,715
Massachusetts Water Resources Authority, Series J, Revenue Bonds	Aa2	5.00%		08/01/32		2,500	(f)		2,367,400
									19,850,671
New York — 0.9%
New York City Municipal Water Finance Authority, Revenue Bonds	Aa3	5.75%		06/15/40		300			302,160
Port Authority of New York & New Jersey, Revenue Bonds	Aa3	4.75%		07/15/33		10,000			8,934,500
									9,236,660
Rhode Island — 0.1%
Tobacco Settlement Financing Corp., Revenue Bonds	Baa3	6.125%		06/01/32		1,205			851,140
Tobacco Settlement Financing Corp., Revenue Bonds	Baa3	6.25%		06/01/42		400			250,132
									1,101,272
Washington — 0.3%
Pierce County School District No. 3, General Obligation Bonds	Aa1	5.00%		12/01/23		3,000	(f)		3,022,800
TOTAL MUNICIPAL BONDS (cost $70,484,893)									70,777,752
U.S. GOVERNMENT AGENCY OBLIGATIONS — 2.9%
Federal Home Loan Mortgage Corp., Notes (cost $28,255,032)	Aaa	4.875%		06/13/18		26,300			30,226,327
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS — 73.1%
Federal Home Loan Mortgage Corp.		4.00%		09/01/18		556			570,577
Federal Home Loan Mortgage Corp.		5.00%		TBA		47,100			48,130,312
Federal Home Loan Mortgage Corp.		5.50%		02/01/38		1,840			1,885,465
Federal Home Loan Mortgage Corp.		5.50%		TBA		34,000			34,796,892
Federal National Mortgage Assoc.		4.00%		07/01/18-03/01/20		53,733			54,689,447
Federal National Mortgage Assoc.		4.00%		TBA		25,000			25,257,800
Federal National Mortgage Assoc.		4.42%	(c)	05/01/36		69			68,675
Federal National Mortgage Assoc.		4.50%		02/01/23-08/01/35		70,734			72,168,017

SEE NOTES TO FINANCIAL STATEMENTS.

A47

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Federal National Mortgage Assoc.(k)	4.50%		08/01/35	$	2,437	$	2,473,298
Federal National Mortgage Assoc.	4.987%	(c)	06/01/35		1,157		1,169,544
Federal National Mortgage Assoc.	5.00%		12/01/18-11/01/33		93,662		95,878,795
Federal National Mortgage Assoc.	5.00%		TBA		97,100		99,133,080
Federal National Mortgage Assoc.	5.131%	(c)	12/01/36		1,589		1,588,483
Federal National Mortgage Assoc.	5.50%		09/01/32-08/01/37		140,253		144,049,277
Federal National Mortgage Assoc.(k)	5.50%		09/01/35		6,792		6,970,194
Federal National Mortgage Assoc.	5.50%		TBA		43,500		44,587,500
Federal National Mortgage Assoc.	6.00%		04/01/16-08/01/35		2,254		2,334,642
Government National Mortgage Assoc.	4.50%		09/15/33		34		34,919
Government National Mortgage Assoc.	4.625%	(c)	08/20/24-08/20/27		134		132,735
Government National Mortgage Assoc.	5.00%		TBA		6,000		6,150,000
Government National Mortgage Assoc.	5.00%		TBA		37,000		37,751,544
Government National Mortgage Assoc.	5.375%	(c)	04/20/25-05/20/25		39		39,384
Government National Mortgage Assoc.	5.50%		TBA		13,300		13,694,850
Government National Mortgage Assoc.	6.00%		06/15/37-10/15/38		7,577		7,830,746
Government National Mortgage Assoc.	6.00%		TBA		4,000		4,126,248
Government National Mortgage Assoc.	6.50%		12/15/33-10/15/38		38,838		40,456,366
Government National Mortgage Assoc.	6.50%		TBA		14,000		14,555,632
Government National Mortgage Assoc.	9.00%		07/15/30-08/15/30		2		2,449
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (cost $738,661,155)							760,526,871
U.S. TREASURY OBLIGATIONS — 36.3%
U.S. Treasury Bonds	5.375%		02/15/31		125,800		172,856,999
U.S. Treasury Bonds	6.75%		08/15/26		17,900		26,998,230
U.S. Treasury Bonds	8.75%		08/15/20		13,500		21,074,769
U.S. Treasury Inflationary Indexed Bonds, TIPS	1.75%		01/15/28		1,100		1,050,627
U.S. Treasury Inflationary Indexed Bonds, TIPS	2.375%		01/15/25		14,697		16,595,879
U.S. Treasury Inflationary Indexed Bonds, TIPS	3.625%		04/15/28		4,800		7,657,018
U.S. Treasury Notes	3.125%		04/30/13		28,400		30,740,785
U.S. Treasury Notes	4.00%		08/15/18		4,500		5,196,447
U.S. Treasury Notes	4.75%		05/15/14		400		470,719
U.S. Treasury Strips	7.25%		02/15/22		23,000		14,800,155
U.S. Treasury Strips	7.875%		02/15/21		17,100		11,389,045
U.S. Treasury Strips	8.00%		11/15/21		6,700		4,335,624
U.S. Treasury Strips	8.125%		05/15/21		21,700		14,339,099
U.S. Treasury Strips	8.125%		08/15/21		18,900		12,328,035
U.S. Treasury Strips	6.00%		02/15/26		13,700		8,104,057
U.S. Treasury Strips	6.75%		08/15/26		10,900		6,362,886
U.S. Treasury Strips	7.25%		08/15/22		37,500		23,868,975
TOTAL U.S. TREASURY OBLIGATIONS (cost $333,290,454)							378,169,349
				Shares
PREFERRED STOCKS — 0.3%
Business Services
Bank of America Corp., 7.25%, CVT (cost $4,200,000)					4,200		2,730,000
TOTAL LONG-TERM INVESTMENTS (cost $1,862,496,305)							1,813,893,836
SHORT-TERM INVESTMENTS — 16.2% REPURCHASE AGREEMENTS(m) — 12.8%				Principal Amount (000)#
Goldman Sachs & Co. (The), 0.00%, dated 12/29/08, due 01/05/09 in the amount of $83,529,411 (cost $83,529,411; the value of collateral plus accrued interest was $83,803,125)(p)				$	83,529		83,529,411
JPMorgan Chase Bank, 0.00%, dated 12/08/08, due 01/12/09 in the amount of $5,006,250 (cost $5,006,250; the value of collateral plus accrued interest was $5,274,141)(s)					5,006		5,006,250

SEE NOTES TO FINANCIAL STATEMENTS.

A48

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

REPURCHASE AGREEMENTS(m) (continued)			Principal Amount (000)#		Value (Note 2)
JPMorgan Chase Bank, 0.00%, dated 12/09/08, due 01/14/09 in the amount of $30,814,000 (cost $30,814,000; the value of collateral plus accrued interest was $30,879,239)(p)			$	30,814	$	30,814,000
JPMorgan Chase Bank, 0.00%, dated 12/09/08, due 01/14/09 in the amount of $469,000 (cost $469,000; the value of collateral plus accrued interest was $473,164)(s)				469		469,000
JPMorgan Chase Bank, 0.01%, dated 12/05/08, due 01/09/09 in the amount of $13,222,618 (cost $13,222,500; the value of collateral plus accrued interest was $13,490,095)				13,223		13,222,500
TOTAL REPURCHASE AGREEMENTS (cost $133,041,161)						133,041,161
	Interest Rate	Maturity Date
U.S. TREASURY OBLIGATIONS(n) — 1.9%
Cash Management Bill	0.98%	05/15/09		460		459,849
U.S. Treasury Bills	0.009%	03/19/09		440		439,956
U.S. Treasury Bills	0.052%	03/05/09		870		869,855
U.S. Treasury Bills	0.054%	03/05/09		400		399,933
U.S. Treasury Bills	0.059%	03/05/09		3,010		3,009,497
U.S. Treasury Bills	0.117%	01/22/09		2,210		2,209,961
U.S. Treasury Bills	0.149%	02/12/09		270		269,992
U.S. Treasury Bills	0.153%	02/19/09		1,020		1,019,987
U.S. Treasury Bills	0.156%	02/19/09		570		569,993
U.S. Treasury Bills	0.18%	02/12/09		490		489,986
U.S. Treasury Bills	0.745%	01/15/09		2,130		2,129,992
U.S. Treasury Bills	0.80%	03/05/09		3,330		3,329,444
U.S. Treasury Bills	0.80%	06/04/09		1,650		1,649,271
U.S. Treasury Bills	0.889%	01/15/09		660		659,995
U.S. Treasury Bills	1.743%	01/15/09		2,600		2,599,990
TOTAL U.S. TREASURY OBLIGATIONS (cost $20,107,861)						20,107,701
			Shares
AFFILIATED MONEY MARKET MUTUAL FUND — 1.3%
Dryden Core Investment Fund — Taxable Money Market Series (cost $13,192,057)(Note 4)(w)				13,192,057		13,192,057
			Notional Amount (000)
OPTIONS PURCHASED* — 0.2%
Call Options — 0.1%
2 Year Euro-Schatz Futures, expiring 01/23/2009, Strike Price $116.00				EUR  65,100		4,525
2 Year U.S. Treasury Note Futures, expiring 01/23/2009, Strike Price $111.00				23,400		1,828
5 Year Euro-Bobl Futures, expiring 02/20/2009, Strike Price $135.00				EUR  58,200		4,045
5 Year U.S. Treasury Note Futures, expiring 01/23/2009, Strike Price $126.00				314,400		24,563
10 Year Euro-Bund Futures, expiring 02/20/2009, Strike Price $145.00				EUR  20,800		2,891
Currency Option, on EUR vs USD, expiring 05/19/2010 @ FX Rate 1.37				EUR   8,400		1,123,596
GNMA, expiring 01/14/2009, Strike Price $111.00				40,700		—
U.S. Treasury Bond Futures, expiring 01/23/2009, Strike Price $173.00				20,500		3,203
expiring 02/20/2009, Strike Price $173.00				52,500		8,203
U.S. Treasury Note Futures, expiring 01/23/2009, Strike Price $142.00				30,500		4,766
expiring 03/13/2009, Strike Price $112.00				37,600		3,760
expiring 03/13/2009, Strike Price $113.00				39,400		8,668
expiring 04/17/2009, Strike Price $119.00				28,400		1,988
						1,192,036
Put Options — 0.1%
2 Year U.S. Treasury Note Futures, expiring 02/20/2009, Strike Price $84.00				22,000		1,719
5 Year U.S. Treasury Note Futures, expiring 02/20/2009, Strike Price $85.00				29,900		2,336
Currency Option, on EUR vs USD, expiring 05/19/2010 @ FX Rate 1.37				8,400		947,820

SEE NOTES TO FINANCIAL STATEMENTS.

A49

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

OPTIONS PURCHASED* (continued)			Notional Amount (000)		Value (Note 2)
Put Options (continued)
FNMA Gold, expiring 01/06/2009, Strike Price $73.00				EUR    8,000	$	—
expiring 02/05/2009, Strike Price $45.00				20,000		—
expiring 02/05/2009, Strike Price $50.00				15,000		—
expiring 02/05/2009, Strike Price $71.25				12,000		—
FNMA, expiring 01/06/2009, Strike Price $43.00				129,000		—
expiring 01/06/2009, Strike Price $56.25				20,000		—
expiring 01/06/2009, Strike Price $58.00				32,000		—
expiring 01/13/2009, Strike Price $50.00				15,000		—
expiring 02/05/2009, Strike Price $47.00				23,000		—
expiring 02/05/2009, Strike Price $52.00				5,800		—
expiring 02/05/2009, Strike Price $55.00				7,500		—
expiring 02/05/2009, Strike Price $75.50				27,000		—
GNMA, expiring 01/14/2009, Strike Price $45.00				37,000		—
expiring 01/14/2009, Strike Price $55.00				85,000		—
expiring 01/14/2009, Strike Price $55.00				148,000		—
expiring 01/14/2009, Strike Price $60.00				39,000		—
expiring 02/12/2009, Strike Price $50.00				7,000		—
expiring 02/12/2009, Strike Price $74.25				17,000		—
Interest Rate Swap Option, expiring 12/15/2009 @ 3.65%				700		14,388
U.S. Treasury Bond Futures, expiring 02/20/2009, Strike Price $66.00				50,000		7,813
expiring 02/20/2009, Strike Price $70.00				117,500		18,359
U.S. Treasury Inflationary, expiring 01/05/2009, Strike Price $65.00				4,800		—
expiring 01/05/2009, Strike Price $65.00				15,900		—
expiring 04/17/2009, Strike Price $80.00				6,500		130
U.S. Treasury Note Futures, expiring 03/13/2009, Strike Price $90.00				7,000		—
						992,565
TOTAL OPTIONS PURCHASED (cost $1,359,726)						2,184,601
TOTAL SHORT-TERM INVESTMENTS (cost $167,700,805)						168,525,520
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN AND SECURITIES SOLD SHORT—190.4% (cost $2,030,197,110)					$	1,982,419,356
OPTIONS WRITTEN*			Contracts/ Notional Amounts (000)#
Put Options
Interest Rate Swap Option, expiring 12/15/2009 @ 2.95%				2,800		(7,911	)
expiring 12/15/2009 @ 2.95%				300		(847	)
TOTAL OPTIONS WRITTEN (premium received $19,400)						(8,758	)
SECURITIES SOLD SHORT — (29.9)%	Interest Rate	Maturity Date	Principal Amount (000)#
Federal National Mortgage Association — (4.0)%
Federal National Mortgage Assoc.	4.50%	TBA	$	11,000		(11,147,818	)
Federal National Mortgage Assoc.	4.50%	TBA		15,000		(15,135,930	)
Federal National Mortgage Assoc.	5.50%	TBA		14,200		(14,621,570	)
Federal National Mortgage Assoc.	6.00%	TBA		900		(926,437	)
						(41,831,755	)

SEE NOTES TO FINANCIAL STATEMENTS.

A50

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

SECURITIES SOLD SHORT (continued)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Treasury Obligations — (25.9)%
U.S. Treasury Bonds	6.75%	08/15/26	$	17,900	$	(26,998,230	)
U.S. Treasury Bonds	8.75%	08/15/20		13,500		(21,074,769	)
U.S. Treasury Notes	3.125%	04/30/13		28,400		(30,740,785	)
U.S. Treasury Notes	4.00%	08/15/18		4,500		(5,196,447	)
U.S. Treasury Notes	4.75%	05/15/14		400		(470,718	)
U.S. Treasury Notes	4.875%	07/31/11		12,000		(13,244,064	)
U.S. Treasury Notes	5.375%	02/15/31		125,400		(172,307,375	)
						(270,032,388	)
TOTAL SECURITIES SOLD SHORT (proceeds received $313,159,343)						(311,864,143	)
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN AND SECURITIES SOLD SHORT — 160.5% (cost $1,717,018,367)						1,670,546,455
OTHER LIABILITIES IN EXCESS OF OTHER ASSETS(x) — 60.5%						(629,465,337	)
NET ASSETS — 100.0%					$	1,041,081,118

The following abbreviations are used in portfolio descriptions:

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.
CVT	Convertible Security
FDIC	Federal Deposit Insurance Corp.
FHLMC	Federal Home Loan Mortgage Corp.
FNMA	Federal National Mortgage Association
GNMA	Government National Mortgage Assoc.
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
TBA	To Be Announced
TIPS	Treasury Inflation Protected Securities
BRL	Brazilian Real
CAD	Canadian Dollar
CNY	Chinese Yuan
EUR	Euro
GBP	British Pound
INR	Indian Rupee
JPY	Japanese Yen
MXN	Mexican Peso
MYR	Malaysian Ringgit
RUB	Russian Ruble
USD	United States Dollar

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

* Non-income producing security.

† The rating reflected is as of December 31, 2008. Rating of certain bonds may have changed subsequent to that date.

(c) Indicates a variable rate security.

(d) Standard & Poor’s rating.

(f) Represents all or partial amount utilized in the Municipal Tender Option Bond transaction. The aggregated principal amount of the inverse floaters and the floating rate notes (included in liabilities) are $4,787,500 and $4,787,500, respectively.

(i) Represents issuer in default on interest payments. Non-income producing security.

(g) Indicates a security that has been deemed illiquid.

(k) Securities segregated as collateral for futures contracts.

(l) Private Placement restricted as to resale and does not have a readily available market. The aggregate original cost of such securities is $170,449,479. The aggregate value of $125,448,636 is approximately 12.0% of net assets.

(m) Repurchase agreement is collateralized by United States Treasuries or federal agency obligations.

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

SEE NOTES TO FINANCIAL STATEMENTS.

A51

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(p) Security segregated as collateral to cover short contracts.

(r) Less than $1,000 par.

(s) Security segregated as collateral to cover sell trades.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(x) Liabilities in excess of other assets includes net unrealized appreciation on futures contracts, forward foreign currency exchange contracts, interest rate and credit default swaps and reverse repurchase agreements as follows:

Future contracts open at December 31, 2008.

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2008		Unrealized Appreciation (Depreciation)
Long Positions:
327	90 Day Euro Dollar	Mar 09	$	80,159,963	$	80,883,450	$	723,487
395	90 Day Euro Dollar	Jun 09		98,745,063		97,634,125		(1,110,938	)
104	90 Day Euro Dollar	Sep 09		25,145,900		25,673,700		527,800
1,209	90 Day Euro Dollar	Mar 10		290,740,987		297,625,575		6,884,588
292	90 Day Euro EURIBOR	Mar 09		96,516,787		99,210,592		2,693,805
356	90 Day Euro EURIBOR	Jun 09		117,991,482		121,270,851		3,279,369
116	90 Day Euro EURIBOR	Dec 09		38,473,172		39,406,380		933,208
12	90 Day Sterling	Mar 09		2,098,672		2,118,564		19,892
375	90 Day Sterling	Sep 09		63,746,461		66,218,612		2,472,151
81	90 Day Sterling	Dec 09		13,790,077		14,249,358		459,281
160	90 Day Sterling	Jun 10		27,248,303		27,962,848		714,545
221	5 Year U.S. Treasury Notes	Mar 09		26,179,867		26,311,086		131,219
								17,728,407
Short Position:
559	5 Year Euro-Bobl	Mar 09		89,574,238		90,299,402		(725,164	)
							$	17,003,243	(1)

⁽¹⁾ Cash of $4,316,900 and securities with a market value of $9,443,492 have been segregated with the broker to cover requirements for open futures contracts at December 31, 2008

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount (000)	Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
British Pound Expiring 01/13/09	GBP  7,925	$	11,998,309	$	11,391,867	$	(606,442	)
Canadian Dollar Expiring 01/14/09	CAD  536		433,072		434,080		1,008
Chinese Yuan,
Expiring 05/06/09	CNY  90,741		13,109,098		13,096,994		(12,104	)
Expiring 07/15/09	CNY  110,290		16,187,056		15,877,036		(310,020	)
Expiring 09/08/09	CNY  44,263		6,420,000		6,362,139		(57,861	)
Euro, Expiring 01/13/098	EUR  7,854		11,269,588		10,910,866		(358,722	)
Indian Rupee, Expiring 04/09/09	INR  610,602		12,165,957		12,431,997		266,040
Malaysian Ringgit,
Expiring 02/12/09	MYR  8,012		2,267,457		2,312,178		44,721
Expiring 04/14/09	MYR  6,351		1,800,000		1,832,397		32,397
Russian Ruble, Expiring 05/06/09	RUB  335,129		12,397,725		9,718,562		(2,679,163	)
		$	88,048,262	$	84,368,116	$	(3,680,146	)

Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Brazilian Real, Expiring 02/03/09	BRL  3,880	$	1,762,711	$	1,640,708	$	122,003
British Pound, Expiring 01/13/09	GBP  12,295		18,392,661		17,670,462		722,199
Chinese Yuan, Expiring 07/15/09	CNY  204,746		29,417,000		29,474,665		(57,665	)
Euro Expiring 01/13/09	EUR  6,309		7,982,981		8,764,534		(781,553	)
Japanese Yen, Expiring 01/08/09	JPY  3,249,828		34,145,977		35,856,304		(1,710,327	)

SEE NOTES TO FINANCIAL STATEMENTS.

A52

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Forward foreign currency exchange contracts outstanding at December 31, 2008 (continued):

Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Mexican Pesos Expiring 05/19/09	MXN  314	$	24,024	$	21,866	$	2,158
Russian Ruble, Expiring 05/06/09	RUB  335,129		10,392,188		9,718,562		673,626
		$	102,117,542	$	103,147,101	$	(1,029,559	)

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)		Fixed Rate	Floating Rate	Unrealized Appreciation (Depreciation)
Bank of America Securities LLC(2)	12/17/28	$	29,000	5.00%	3 month LIBOR	$	(8,470,124	)
Bank of America Securities LLC(2)	12/17/23		10,900	5.00%	3 month LIBOR		(3,060,481	)
Barclays Capital(1)	12/17/13		192,500	4.00%	3 month LIBOR		20,109,507
Barclays Capital(1)	06/17/14		40,000	4.00%	3 month LIBOR		3,230,774
Barclays Capital(2)	12/17/23		23,000	5.00%	3 month LIBOR		(5,201,138	)
Barclays Capital(2)	12/17/18		10,600	5.00%	3 month LIBOR		(1,825,302	)
Barclays Capital(2)	12/17/28		8,400	5.00%	3 month LIBOR		(2,812,567	)
Citigroup(2)	12/17/28		113,700	5.00%	3 month LIBOR		(33,443,069	)
Credit Suisse International, Ltd.(2)	06/17/24		10,400	4.00%	3 month LIBOR		(184,235	)
Credit Suisse International, Ltd.(1)	06/17/14		500,000	3.00%	3 month LIBOR		22,266,376
Deutsche Bank(2)	12/17/28		7,600	5.00%	3 month LIBOR		(2,649,512	)
Goldman Sachs(2)	12/17/23		25,600	5.00%	3 month LIBOR		(5,617,834	)
Merrill Lynch & Co.(1)	06/17/14		5,900	4.00%	3 month LIBOR		468,772
Merrill Lynch & Co.(2)	12/17/23		164,300	5.00%	3 month LIBOR		(45,870,713	)
Merrill Lynch & Co.(2)	12/17/28		13,700	5.00%	3 month LIBOR		(4,385,622	)
Morgan Stanley Capital Services, Inc.(1)	12/17/13		431,900	4.00%	3 month LIBOR		45,801,071
Morgan Stanley Capital Services, Inc.(2)	06/17/19		11,900	4.00%	3 month LIBOR		84,596
Royal Bank of Scotland PLC(2)	12/17/28		30,000	5.00%	3 month LIBOR		(8,771,573	)
Royal Bank of Scotland PLC(2)	12/17/23		9,600	5.00%	3 month LIBOR		(2,773,242	)
Royal Bank of Scotland PLC(2)	06/17/24		6,500	4.00%	3 month LIBOR		(114,611	)
Merrill Lynch & Co.(2)	01/23/09		2,300	4.50%	ICAP CMM FRA Fixing Rate		(135,159	)
HSBC Bank USA, N.A.(1)	01/02/12		BRL  2,200	14.77%	Brazilian interbank lending rate		31,272
Merrill Lynch & Co.(1)	01/02/12		BRL   6,000	14.77%	Brazilian interbank lending rate		95,363
Morgan Stanley Capital Services, Inc.(1)	01/02/12		BRL  29,700	12.54%	Brazilian interbank lending rate		205,149
Morgan Stanley Capital Services, Inc.(1)	01/02/12		BRL  72,800	10.12%	Brazilian interbank lending rate		1,582,764
UBS AG(1)	01/02/12		BRL  39,600	10.58%	Brazilian interbank lending rate		(593,367	)
UBS AG(1)	01/02/12		BRL  13,400	12.54%	Brazilian interbank lending rate		88,319
Barclays Capital(2)	03/18/39		EUR  10,000	5.00%	6 month EURIBOR		(2,872,632	)
UBS AG(1)	10/15/10		EUR  1,400	2.15%	FRC-Excluding Tobacco-Non-Revised Consumer Price Index		74,265
Barclays Capital(2)	12/07/42		GBP  2,300	4.34%	6 month LIBOR		(691,093	)
Barclays Capital(2)	06/15/37		GBP  2,500	4.00%	6 month LIBOR		(268,125	)
Deutsche Bank(2)	06/15/37		GBP  9,500	4.25%	6 month LIBOR		(1,066,776	)
Goldman Sachs(2)	06/15/37		GBP  2,800	4.00%	6 month LIBOR		(295,213	)
HSBC Bank USA, N.A.(2)	06/15/37		GBP  10,000	4.25%	6 month LIBOR		(1,170,822	)
Morgan Stanley Capital Services, Inc.(2)	06/15/37		GBP  2,500	4.25%	6 month LIBOR		(277,277	)
Royal Bank of Scotland PLC(2)	06/17/18		JPY  350,000	1.50%	6 month LIBOR		(29,483	)
UBS AG(2)	06/17/18		JPY  830,000	1.50%	6 month LIBOR		(93,623	)
Citigroup(1)	05/14/09		MXN  525,000	7.91%	28 day Mexican interbank rate		(38,802	)
						$	(38,674,167	)

(1) Portfolio pays the floating rate and receives the fixed rate.

(2) Portfolio pays the fixed rate and receives the floating rate.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

SEE NOTES TO FINANCIAL STATEMENTS.

A53

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Fair Value(5)			Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
Credit default swaps on credit indices—Sell Protection(1)
Credit Suisse International, LTD.	05/25/46	$	1,200	0.11%	ABX.HE.AAA.06-2 Index	$	(606,938	)	$	(253,795	)	$	(353,143	)
Bear Stearns International Ltd.	05/25/46		13,200	0.11%	ABX.HE.AAA.06-2 Index		(6,676,278	)		(2,904,709	)		(3,771,569	)
Credit Suisse International, LTD.	08/25/37		11,900	0.09%	ABX.HE.AAA.07-1 Index		(7,181,471	)		(4,751,011	)		(2,430,460	)
Credit Suisse International, LTD.	08/25/37		19,900	0.15%	ABX.HE.AAA.07-1 Index		(18,805,002	)		(13,532,924	)		(5,272,078	)
Citigroup	01/25/38		14,700	0.76%	ABX.HE.AAA.07-2 Index		(8,959,568	)		(4,837,004	)		(4,122,564	)
Citigroup	06/20/12		2,700	2.18%	Dow Jones CDX HY-8 Index		(456,426	)		—			(456,426	)
Citigroup	06/20/12		10,700	2.14%	Dow Jones CDX HY-8 Index		(1,820,392	)		—			(1,820,392	)
Merrill Lynch & Co.	06/20/12		15,400	2.08%	Dow Jones CDX HY-8 Index		(2,648,604	)		—			(2,648,604	)
Citigroup	06/20/12		28,200	2.11%	Dow Jones CDX HY-8 Index		(4,831,712	)		—			(4,831,712	)
Citigroup	06/20/12		83,277	0.47%	Dow Jones CDX HY-8 Index		(5,204,127	)		—			(5,204,127	)
Deutsche Bank	12/20/13		5,700	1.50%	Dow Jones CDX IG11 5Y Index		(111,464	)		(34,113	)		(77,351	)
Merrill Lynch & Co.	12/20/13		23,700	1.50%	Dow Jones CDX IG11 5Y Index		(463,454	)		(121,692	)		(341,762	)
Morgan Stanley & Co.	12/20/15		8,140	0.46%	Dow Jones CDX IG5 Index		(2,194,870	)		—			(2,194,870	)
Morgan Stanley & Co.	12/20/15		19,000	0.46%	Dow Jones CDX IG5 Index		(5,117,952	)		—			(5,117,952	)
Barclays Bank PLC	06/20/17		17,958	0.60%	Dow Jones CDX IG8 Index		(1,187,335	)		(271,421	)		(915,914	)
Deutsche Bank	12/20/12		13,029	0.82%	Dow Jones CDX IG9 5Y Index		145,195			—			145,195
Barclays Bank PLC	12/20/12		23,335	0.82%	Dow Jones CDX IG9 5Y Index		215,935			—			215,935
						$	(65,904,463	)	$	(26,706,669	)	$	(39,197,794	)

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Implied Credit Spread at December 31, 2008(4)	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
Credit default swaps on Corporate and/or Sovereign Issues—Sell Protection(1)
Barclays Bank PLC	09/20/13	$	2,500	1.75%	John Deere Capital Corp., 5.00%, due 02/15/09	1.724%	$	4,160		$	—	$	4,160
Merrill Lynch & Co.	02/25/34		1,028	2.25%	Long Beach Mortgage Loan Trust 2004-1, 6.71%, due 02/25/34(6)	60.700%		(738,756	)		—		(738,756	)
							$	(734,596	)	$	—	$	(734,596	)

The Portfolio entered into credit default swap agreements on corporate issues, sovereign issues and credit indices as the protection seller to provide a measure of protection against the current portfolio of investments’ exposure to market conditions, or to take an active position with respect to the likelihood of a particular issuer’s default or the referenced entity’s credit soundness.

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation (Depreciation)
Credit default swaps—Buy Protection(2)
Goldman Sachs	03/20/12	$	2,300	0.40%	AutoZone, Inc., 5.875%, due 10/15/12	$	76,382
Barclays Bank PLC	06/20/12		1,300	0.15%	Baker Hughes, Inc., 6.00%, due 02/15/09		42,479
Barclays Bank PLC	09/20/13		4,700	0.35%	Baxter International, Inc., 6.625%, due 02/15/28		29,648
UBS AG	09/20/13		1,800	0.35%	Campbell Soup Co., 4.875%, due 10/01/13		7,068
Barclays Bank PLC	09/20/13		2,500	0.35%	Campbell Soup Co., 4.875%, due 10/01/13		9,817
UBS AG	06/20/17		1,100	0.56%	Cardinal Health, Inc., 6.00%, due 06/15/17		18,038

SEE NOTES TO FINANCIAL STATEMENTS.

A54

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008 (continued):

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation (Depreciation)
Barclays Bank PLC	06/20/15	$	700	0.15%	CitiFinancial, 6.625%, due 06/01/15	$	66,833
Morgan Stanley & Co.	09/20/11		3,800	0.24%	CVS Corp., 5.75%, due 08/15/11		70,851
Barclays Bank PLC	09/20/11		3,400	0.58%	DaimlerChrysler NA, 5.75%, due 09/08/11		381,375
Royal Bank of Scotland PLC	12/20/13		8,200	1.45%	Deutsche Bank AG, 4.875%, due 05/20/13		(59,098	)
Barclays Bank PLC	06/20/13		6,500	5.00%	Dow Jones CDX HY-10 100 Index		889,376
UBS AG	06/20/13		6,500	5.00%	Dow Jones CDX HY-10 100 Index		892,957
Merrill Lynch & Co.	12/20/11		2,500	0.00%	Dow Jones CDX HY-7 Index		964,841
Bank of America Securities LLC	06/20/12		15,876	2.75%	Dow Jones CDX HY-8 Index		2,131,905
UBS AG	06/20/12		27,048	2.75%	Dow Jones CDX HY-8 Index		3,664,650
Merrill Lynch & Co.	06/20/12		27,636	2.75%	Dow Jones CDX HY-8 Index		4,203,111
Deutsche Bank	06/20/18		27,230	1.50%	Dow Jones CDX IG10 10Y Index		450,603
Goldman Sachs	06/20/18		43,139	1.50%	Dow Jones CDX IG10 10Y Index		1,257,822
Morgan Stanley & Co.	06/20/18		45,774	1.50%	Dow Jones CDX IG10 10Y Index		1,176,727
Goldman Sachs	06/20/13		4,685	1.55%	Dow Jones CDX IG10 5Y Index		151,244
Credit Suisse International, LTD.	06/20/13		13,078	1.55%	Dow Jones CDX IG10 5Y Index		319,887
Deutsche Bank	06/20/13		24,205	1.55%	Dow Jones CDX IG10 5Y Index		645,265
Morgan Stanley & Co.	12/20/12		11,400	0.14%	Dow Jones CDX IG5 Index		2,151,265
Morgan Stanley & Co.	12/20/12		26,700	0.14%	Dow Jones CDX IG5 Index		5,038,490
Barclays Bank PLC	12/20/11		1,000	0.75%	Dow Jones CDX IG7 Index		114,667
Bank of America Securities LLC	06/20/12		139,470	0.35%	Dow Jones CDX IG8 Index		7,823,057
Royal Bank of Scotland PLC	12/20/17		3,221	0.80%	Dow Jones CDX IG9 10Y Index		119,802
Barclays Bank PLC	12/20/17		8,686	0.80%	Dow Jones CDX IG9 10Y Index		339,117
Goldman Sachs	12/20/17		11,126	0.80%	Dow Jones CDX IG9 10Y Index		390,985
Morgan Stanley & Co.	12/20/17		33,086	0.80%	Dow Jones CDX IG9 10Y Index		928,543
Barclays Bank PLC	06/20/12		1,300	0.09%	Duke Energy, 7.375%, due 03/01/10		29,611
Barclays Bank PLC	09/20/13		2,300	0.50%	General Mills, Inc., 5.70%, due 02/15/17		28,869
Deutsche Bank	09/20/16		2,400	0.51%	Goodrich Corp., 6.29%, due 07/01/16		86,295
Barclays Bank PLC	03/20/12		1,500	0.17%	International Lease Finance Corp., 5.40%, due 02/15/12		341,243
Barclays Bank PLC	03/20/11		1,000	0.37%	iStar Financial, Inc., 5.80%, due 03/15/11		592,112
UBS AG	09/20/13		2,500	0.63%	John Deere Capital Corp., 6.00%, due 02/15/09		117,860
Morgan Stanley & Co.	03/20/13		5,000	0.56%	Kroger Co., 5.50%, due 02/01/13		78,971
Bear Stearns International Ltd.	03/20/16		3,100	0.28%	Loews Corp., 5.25%, due 03/15/16		118,414
Barclays Bank PLC	06/20/12		1,300	0.12%	Loews Corp., 8.875%, due 04/15/11		25,636
Goldman Sachs	02/25/34		1,028	2.00%	Long Beach Mortgage Loan Trust 2004-1, 6.71%, due 02/25/34(6)		741,904
Bear Stearns International Ltd.	10/13/46		4,774	1.40%	Mercury CDO, Ltd., 4.19%, due 07/27/48(6)		4,673,092
UBS AG	06/20/17		800	0.48%	Newell Rubbermaid, Inc., 6.75%, due 03/15/12		71,923
Goldman Sachs	03/20/12		2,300	0.26%	Newell Rubbermaid, Inc., 6.75%, due 03/15/12		95,069
Merrill Lynch & Co.	04/15/20		1,800	1.95%	Race Point CLO, 7.01%, due 04/15/20		1,197,342

SEE NOTES TO FINANCIAL STATEMENTS.

A55

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008 (continued):

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation (Depreciation)
Merrill Lynch & Co.	04/15/20	$	2,500	4.03%	Race Point CLO, 9.61%, due 04/15/20	$	2,067,005
Barclays Bank PLC	09/20/13		4,100	0.48%	Raytheon Co., 7.20%, due 08/15/27		32,422
Citigroup	03/20/12		2,300	0.34%	Safeway, Inc. 5.80%, 08/15/12		35,651
Barclays Bank PLC	12/20/12		3,000	0.35%	Safeway, Inc. 5.80%, 08/15/12		62,635
Merrill Lynch & Co.	12/15/19		1,600	1.88%	Saratoga CLO, Ltd., 6.84%, due 12/15/19		966,707
Merrill Lynch & Co.	12/15/19		2,500	3.78%	Saratoga CLO, Ltd., 8.81%, due 12/15/19		1,636,819
Barclays Bank PLC	06/20/12		1,300	0.12%	Schlumberger Limited, 1.50%, due 06/01/23		97,660
Morgan Stanley & Co.	09/20/13		1,600	0.58%	Sealed Air Corp., 5.625%, due 07/15/13		268,383
Citigroup	09/20/13		10,000	0.67%	Sempra Energy, 6.00%, due 02/01/13		208,443
Bank of America Securities LLC	12/20/12		2,200	0.30%	Sherwin-Williams, 7.375%, due 02/01/27		97,633
Barclays Bank PLC	12/20/12		3,000	0.44%	Sherwin-Williams, 7.375%, due 02/01/27		117,414
Morgan Stanley & Co.	06/20/12		5,000	0.11%	Target Corp., 5.875%, 03/01/12		276,492
Morgan Stanley & Co.	12/20/12		2,100	0.33%	TJX Cos., Inc., 7.45%, due 12/15/09		68,921
Bear Stearns International Ltd.	03/20/11		1,000	0.33%	Vornado Realty, 5.60%, due 02/15/11		137,594
Morgan Stanley & Co.	06/20/17		4,900	0.15%	Wal-Mart Stores, Inc., 5.75%, due 12/19/30		319,015
Goldman Sachs	12/20/12		5,300	0.24%	Wal-Mart Stores, Inc., 5.75%, due 12/19/30		159,715
Barclays Bank PLC	09/20/13		500	0.39%	Wyeth, 5.25%, due 03/15/13		6,499
Barclays Bank PLC	03/20/12		1,300	0.21%	XL Cap Europe PLC, 6.50%, due 01/15/12		306,542
						$	49,361,598

(1) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Notional amount represents the maximum potential amount the Portfolio could be required to make as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(4) Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

SEE NOTES TO FINANCIAL STATEMENTS.

A56

	SP PIMCO TOTAL RETURN PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(5) The fair values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement been closed/sold as of the reporting date.

(6) Variable rate, displayed rate is as of 12/31/08.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

Reverse repurchase agreements outstanding at December 31, 2008:

Broker	Interest Rate		Trade Date	Value at December 31, 2008		Maturity Date	Cost
Barclays Bank PLC	2.00	%	12/15/08	$	21,000,000	01/21/09	$	21,000,000

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities			Other Financial Instruments*
Level 1—Quoted Prices	$	15,922,057		$	17,003,243
Level 2—Other Significant Observable Inputs-Long		1,964,864,053			(44,569,894	)
Level 2—Other Significant Observable Inputs-Short		(332,872,901	)		—
Level 3—Significant Unobservable Inputs		1,633,246			10,615,230
Total	$	1,649,546,455		$	(16,951,421	)

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities			Other Financial Instruments
Balance as of 12/31/07	$	204			—
Accrued discounts/premiums		—			—
Realized gain (loss)		31			—
Change in unrealized appreciation (depreciation)		77,433		$	6,042,750
Net purchases (sales)		1,555,644			—
Transfers in and/or out of Level 3		(66	)		4,572,480
Balance as of 12/31/08	$	1,633,246		$	10,615,230

The industry classification of investments and other liabilities in excess of other assets shown as a percentage of net assets as December 31, 2008 were as follows:

U.S. Government Mortgage-Backed Obligations	73.1	%
U.S. Treasury Obligations	38.2
Financial Services	15.7
Financial – Bank & Trust	15.3
Repurchase Agreements	12.8
Municipal Bonds	6.8
Collateralized Mortgage Obligations	6.7
U.S. Government Agency Obligations	2.9
Foreign Government Bonds	2.8
Bank Notes	2.7
Insurance	2.4
Utilities	2.1
Diversified	1.9
Telecommunications	1.4
Affiliated Money Market Mutual Fund	1.3

Asset-Backed Securities	1.0	%
Retail & Merchandising	0.6
Automobile Manufacturers	0.6
Building Materials	0.4
Paper & Forest Products	0.4
Tobacco	0.3
Business Services	0.3
Aerospace	0.2
Options Purchased	0.2
Healthcare – Services	0.1
Biotechnology	0.1
Oil, Gas & Consumable Fuels	0.1
	190.4
Options Written and Securities Sold Short	(29.9	)
Other liabilities in excess of other assets	(60.5	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A57

SP PIMCO TOTAL RETURN PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value:
Unaffiliated investments (cost $2,017,005,053)	$	1,969,227,299
Affiliated investments (cost $13,192,057)		13,192,057
Foreign currency, at value (cost $7,014,457)		6,851,440
Deposit with broker		4,316,900
Receivable for investments sold		1,879,901,468
Unrealized appreciation on swap agreements		143,824,214
Dividends and interest receivable		14,046,182
Unrealized appreciation on foreign currency forward contracts		1,864,152
Due from broker		99,007
Receivable for Series shares sold		63,297
Prepaid expenses		12,025
Total Assets		4,033,398,041
LIABILITIES
Payable for investments purchased		2,392,836,596
Securities sold short, at value (proceeds received $313,159,343)		311,864,143
Payments received for swap agreements		59,356,317
Unrealized depreciation on swap agreements		173,069,173
Reverse repurchase agreement		21,000,000
Payable to custodian		11,821,419
Unrealized depreciation on foreign currency forward contracts		6,573,857
Payable for Series shares repurchased		5,130,740
Payable for floating rate issued		4,787,500
Interest payable on investments sold short		4,092,468
Due to broker		1,030,000
Management fee payable		520,018
Accrued expenses and other liabilities		223,156
Written options outstanding, at value (premium received $19,400)		8,758
Deferred trustees’ fees		2,154
Transfer agent fees payable		624
Total Liabilities		2,992,316,923
NET ASSETS	$	1,041,081,118
Net assets were comprised of:
Paid-in capital	$	1,063,499,529
Retained earnings		(22,418,411	)
Net assets, December 31, 2008	$	1,041,081,118
Net asset value and redemption price per share, $1,041,081,118 / 94,094,239 outstanding shares of beneficial interest	$	11.06

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest income	$	84,832,857
Unaffiliated dividend income (net of $354 foreign withholding tax)		304,992
Affiliated dividend income		164,518
		85,302,367
EXPENSES
Interest expense (Note 2)		10,461,970
Management fee		7,672,309
Custodian’s fees and expenses		603,000
Audit fee		60,000
Shareholders’ reports		39,000
Trustees’ fees		25,000
Legal fees and expenses		12,000
Insurance expenses		10,000
Commitment fee on syndicated credit agreement		6,000
Transfer agent’s fees and expenses (including affiliated expense of $3,600) (Note 4)		4,000
Miscellaneous		19,326
Total expenses		18,912,605
NET INVESTMENT INCOME		66,389,762
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		67,235,225
Futures transactions		(45,143,808	)
Options written transactions		12,342,499
Swap agreement transactions		38,939,206
Short sale transactions		(52,697,036	)
Foreign currency transactions		8,880,770
		29,556,856
Net change in unrealized appreciation (depreciation) on:
Investments		(76,714,280	)
Futures		9,338,206
Options written		9,383,548
Swap agreements		(36,242,687	)
Short sales		5,274,880
Foreign currencies		(11,784,702	)
		(100,745,035	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(71,188,179	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(4,798,417	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net investment income	$	66,389,762		$	68,649,473
Net realized gain (loss) on investments and foreign currencies		29,556,856			22,421,387
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(100,745,035	)		42,033,956
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(4,798,417	)		133,104,816
DISTRIBUTIONS		(63,508,390	)		(62,651,148	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold [11,356,258 and 19,086,017 shares, respectively]		129,682,479			215,233,306
Series shares issued in reinvestment of distributions [5,631,269 and 5,569,936 shares, respectively]		63,508,390			62,651,148
Series shares repurchased [45,007,508 and 45,249,342 shares, respectively]		(508,584,957	)		(513,850,170	)
DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(315,394,088	)		(235,965,716	)
TOTAL DECREASE IN NET ASSETS		(383,700,895	)		(165,512,048	)
NET ASSETS:
Beginning of year		1,424,782,013			1,590,294,061
End of year	$	1,041,081,118		$	1,424,782,013

SEE NOTES TO FINANCIAL STATEMENTS.

A58

	SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 98.4%
COMMON STOCKS — 98.4%	Shares	Value (Note 2)
Air Freight & Logistics — 2.1%
C.H. Robinson Worldwide, Inc.(b)	14,800	$	814,444
Expeditors International of Washington, Inc.(b)	47,200		1,570,344
			2,384,788
Capital Markets — 2.9%
Eaton Vance Corp.	68,800		1,445,488
TD Ameritrade Holdings Corp.(a)	130,300		1,856,775
			3,302,263
Chemicals — 2.3%
Ecolab, Inc.	74,000		2,601,100
Commercial Services & Supplies — 3.2%
Iron Mountain, Inc.(a)(b)	109,000		2,695,570
Stericycle, Inc.(a)	17,400		906,192
			3,601,762
Communications Equipment — 0.6%
Juniper Networks, Inc.(a)(b)	37,400		654,874
Computers & Peripherals — 0.5%
NetApp, Inc.(a)	40,900		571,373
Construction & Engineering — 1.8%
Chicago Bridge & Iron Co., N.V.	99,000		994,950
Fluor Corp.	22,700		1,018,549
			2,013,499
Consumer Finance — 0.8%
Alliance Data Systems Corp.(a)(b)	18,500		860,805
Diversified Consumer Services — 0.7%
Weight Watchers International, Inc.	26,800		788,456
Electrical Equipment — 4.1%
Ametek, Inc.	75,400		2,277,834
Roper Industries, Inc.	54,600		2,370,186
			4,648,020
Electronic Equipment & Instruments — 2.7%
Amphenol Corp. (Class A Stock)	42,100		1,009,558
Anixter International, Inc.(a)(b)	33,800		1,018,056
Avnet, Inc.(a)	57,600		1,048,896
			3,076,510
Energy Equipment & Services — 1.9%
Cameron International Corp.(a)(b)	65,400		1,340,700
Pride International, Inc.(a)	52,700		842,146
			2,182,846
Food & Staples Retailing — 0.5%
Whole Foods Market, Inc.(b)	58,200		549,408
Food Products — 3.8%
ConAgra Foods, Inc.	99,800		1,646,700
Dean Foods Co.(a)	145,200		2,609,244
			4,255,944
Healthcare Equipment & Supplies — 2.8%
Bard (C.R.), Inc.(b)	15,000		1,263,900
DENTSPLY International, Inc.	45,600		1,287,744
ResMed, Inc.(a)	15,100		565,948
			3,117,592

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Providers & Services — 11.3%
Community Health Systems, Inc.(a)(b)	83,600	$	1,218,888
DaVita, Inc.(a)(b)	67,100		3,326,147
Express Scripts, Inc.(a)(b)	22,100		1,215,058
Henry Schein, Inc.(a)(b)	41,800		1,533,642
Laboratory Corp. of America Holdings(a)(b)	33,400		2,151,294
Patterson Cos., Inc.(a)	53,900		1,010,625
Quest Diagnostics, Inc.	44,600		2,315,186
			12,770,840
Hotels, Restaurants & Leisure — 2.6%
Tim Hortons, Inc.(b)	41,800		1,205,512
Yum! Brands, Inc.(b)	55,700		1,754,550
			2,960,062
Household Products — 1.0%
Church & Dwight Co., Inc.	19,900		1,116,788
Independent Power Producers & Energy Traders — 1.2%
AES Corp. (The)(a)(b)	158,700		1,307,688
Insurance — 3.1%
White Mountains Insurance Group, Ltd.	4,800		1,282,128
W.R. Berkley Corp.	71,000		2,201,000
			3,483,128
Internet Software & Services — 1.0%
VeriSign, Inc.(a)	59,900		1,142,892
IT Services — 1.2%
Paychex, Inc.(b)	50,600		1,329,768
Leisure Equipment & Products — 0.5%
Electronic Arts, Inc.(a)	33,800		542,152
Life Sciences, Tools & Services — 2.5%
Charles River Laboratories International, Inc.(a)(b)	52,500		1,375,500
Thermo Fisher Scientific, Inc.(a)	43,400		1,478,638
			2,854,138
Machinery — 6.0%
Danaher Corp.	35,600		2,015,316
IDEX Corp.	98,400		2,376,360
ITT Corp.(b)	50,700		2,331,693
			6,723,369
Media — 2.1%
Regal Entertainment Group (Class A Stock)	231,000		2,358,510
Metals & Mining — 0.6%
Goldcorp, Inc.(b)	20,100		633,753
Oil, Gas & Consumable Fuels — 8.4%
Denbury Resources, Inc.(a)	76,100		831,012
Newfield Exploration Co.(a)	45,500		898,625
Range Resources Corp.	29,300		1,007,627
Southwestern Energy Co.(a)	133,800		3,876,186
Ultra Petroleum Corp.(a)	28,120		970,421
XTO Energy, Inc.	51,675		1,822,577
			9,406,448

SEE NOTES TO FINANCIAL STATEMENTS.

A59

	SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Personal Products — 1.1%
Avon Products, Inc.	52,300	$	1,256,769
Pharmaceuticals — 1.1%
Mylan, Inc.(a)(b)	128,200		1,267,898
Professional Services — 1.1%
Corporate Executive Board Co. (The)	26,204		578,060
Robert Half International, Inc.(b)	29,000		603,780
			1,181,840
Real Estate Investment Trusts — 4.0%
Annaly Capital Management, Inc.	284,700		4,518,189
Semiconductors & Semiconductor Equipment — 2.3%
Broadcom Corp. (Class A Stock)(a)	90,450		1,534,937
Maxim Integrated Products, Inc.(b)	88,600		1,011,812
			2,546,749
Software — 4.7%
Amdocs Ltd.(a)	86,000		1,572,940
Check Point Software Technologies(a)	120,300		2,284,497
Mcafee Inc.(a)(b)	39,700		1,372,429
			5,229,866
Specialty Retail — 2.4%
Abercrombie & Fitch Co. (Class “A” Stock)(b)	19,900		459,093
GameStop Corp.(a)(b)	63,900		1,384,074
Ross Stores, Inc.(b)	30,100		894,873
			2,738,040
Textiles, Apparel & Luxury Goods — 1.1%
Phillips-Van Heusen Corp.	58,800		1,183,644
Trading Companies & Distributors — 1.0%
Fastenal Co.(b)	32,300		1,125,655
Wireless Telecommunication Services — 7.4%
American Tower Corp. (Class A Stock)(a)	86,400		2,533,248
Crown Castle International Corp.(a)(b)	133,700		2,350,446
NII Holdings, Inc.(a)(b)	186,600		3,392,388
			8,276,082
TOTAL LONG-TERM INVESTMENTS (cost $137,552,544)			110,563,508
SHORT-TERM INVESTMENT — 32.1%
Affiliated Money Market Mutual Fund — 32.1%
Dryden Core Investment Fund — Taxable Money Market Series (cost $36,133,759 includes $34,496,493 of cash collateral received for securities on loan)(c)(d)(Note 4)	36,133,759		36,133,759
TOTAL INVESTMENTS — 130.5% (cost $173,686,303)			146,697,267
LIABILITIES IN EXCESS OF OTHER ASSETS — (30.5)%			(34,243,101	)
NET ASSETS — 100.0%		$	112,454,166

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $33,758,199; cash collateral of $34,496,493 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	146,697,267	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	146,697,267	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any Significant Unobservable Inputs (Level 3) in determining the valuation of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A60

	SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund ( including 30.7% of collateral received for securities on loan)	32.1	%
Healthcare Providers & Services	11.3
Oil, Gas & Consumable Fuels	8.4
Wireless Telecommunication Services	7.4
Machinery	6.0
Software	4.7
Electrical Equipment	4.1
Real Estate Investment Trusts (REITs)	4.0
Food Products	3.8
Commercial Services & Supplies	3.2
Insurance	3.1
Capital Markets	2.9
Healthcare Equipment & Supplies	2.8
Electronic Equipment & Instruments	2.7
Hotels, Restaurants & Leisure	2.6
Life Sciences, Tools & Services	2.5
Specialty Retail	2.4
Chemicals	2.3
Semiconductors & Semiconductor Equipment	2.3
Air Freight & Logistics	2.1
Media	2.1
Energy Equipment & Services	1.9
Construction & Engineering	1.8
Independent Power Producers & Energy Traders	1.2
IT Services	1.2
Personal Products	1.1
Pharmaceuticals	1.1
Professional Services	1.1
Textiles, Apparel & Luxury Goods	1.1
Household Products	1.0
Internet Software & Services	1.0
Trading Companies & Distributors	1.0
Consumer Finance	0.8
Diversified Consumer Services	0.7
Communications Equipment	0.6
Metals & Mining	0.6
Computers & Peripherals	0.5
Food & Staples Retailing	0.5
Leisure Equipment & Products	0.5
	130.5
Liabilities in excess of other assets	(30.5	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A61

SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $33,758,199:
Unaffiliated investments (cost $137,552,544)	$	110,563,508
Affiliated investments (cost $36,133,759)		36,133,759
Cash		1,375
Receivable for investments sold		261,465
Dividends and interest receivable		218,235
Prepaid expenses		2,251
Receivable for Series shares sold		348
Total Assets		147,180,941
LIABILITIES
Collateral for securities on loan		34,496,493
Payable for Series shares repurchased		97,128
Accrued expenses and other liabilities		77,749
Management fee payable		54,704
Affiliated transfer agent fee payable		632
Distribution fee payable		43
Administration fee payable		26
Total Liabilities		34,726,775
NET ASSETS	$	112,454,166
Net assets were comprised of:
Paid-in capital	$	144,855,699
Retained earnings		(32,401,533	)
Net assets, December 31, 2008	$	112,454,166
Class I:
Net asset value and redemption price per share, $112,241,266 / 24,494,765 outstanding shares of beneficial interest	$	4.58
Class II:
Net asset value and redemption price per share, $212,900 / 48,004 outstanding shares of beneficial interest	$	4.44

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $2,035)	$	1,578,804
Affiliated income from securities loaned, net		322,563
Affiliated dividend income		125,245
		2,026,612
EXPENSES
Management fee		991,044
Distribution fee—Class II		781
Administration fee—Class II		468
Custodian’s fees and expenses		48,000
Shareholders’ reports		30,000
Audit fee		17,000
Trustees’ fees		11,000
Legal fees and expenses		6,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		4,000
Insurance expenses		2,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		10,480
Total expenses		1,121,773
NET INVESTMENT INCOME		904,839
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions		(5,949,806	)
Net change in unrealized appreciation (depreciation) on investments		(63,167,616	)
NET LOSS ON INVESTMENTS		(69,117,422	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(68,212,583	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	904,839		$	493,880
Net realized gain (loss) on investments		(5,949,806	)		27,633,621
Net change in unrealized appreciation (depreciation) on investments		(63,167,616	)		4,131,011
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(68,212,583	)		32,258,512
DISTRIBUTIONS:
Class I		(28,074,791	)		(20,193,651	)
Class II		(52,710	)		(36,860	)
TOTAL DISTRIBUTIONS		(28,127,501	)		(20,230,511	)
SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold		6,076,143			13,349,237
Series shares issued in reinvestment of distributions		28,127,501			20,230,511
Series shares repurchased		(31,617,051	)		(42,334,740	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		2,586,593			(8,754,992	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(93,753,491	)		3,273,009
NET ASSETS:
Beginning of year		206,207,657			202,934,648
End of year	$	112,454,166		$	206,207,657

SEE NOTES TO FINANCIAL STATEMENTS.

A62

	SP SMALL CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 97.8%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace & Defense — 1.7%
AAR Corp.*(a)	33,661	$	619,699
Heico Corp. (Class A Stock)	47,530		1,376,469
Limco-Piedmont, Inc.*	71,813		217,593
Orbital Sciences Corp.*	49,700		970,641
Spirit Aerosystems Holdings, Inc. (Class A Stock)*	29,120		296,151
			3,480,553
Air Freight & Logistics — 0.3%
Pacer International, Inc.	56,990		594,406
Airlines — 0.7%
AirTran Holdings, Inc.*(a)	332,250		1,475,190
Auto Components — 0.4%
Cooper Tire & Rubber Co.	87,480		538,877
WABCO Holdings, Inc.	16,460		259,903
			798,780
Automobile Manufacturers — 0.2%
Wabash National Corp.(a)	81,543		366,943
Automotive Parts — 0.5%
Advance Auto Parts, Inc.	11,700		393,705
Asbury Automotive Group, Inc.	84,902		388,002
Tenneco, Inc.*	62,147		183,334
			965,041
Banks — 2.0%
Bridge Capital Holdings*(a)	11,748		44,642
Dime Community Bancshares	15,328		203,863
East West Bancorp, Inc.(a)	44,201		705,890
Hancock Holding Co.	24,766		1,125,862
Pinnacle Financial Partners, Inc.*(a)	15,375		458,329
Sterling Bancshares, Inc.	25,177		153,076
Sterling Financial Corp.	22,500		198,000
Trico Bancshares	13,158		328,555
UMB Financial Corp.	14,898		732,088
			3,950,305
Building Materials — 0.8%
Comfort Systems USA, Inc.	96,391		1,021,744
Universal Forest Products, Inc.	23,993		645,652
			1,667,396
Building Products — 1.2%
Gibraltar Industries, Inc.(a)	103,830		1,239,730
Patrick Industries, Inc.*	90,900		55,267
Simpson Manufacturing Co., Inc.	40,950		1,136,772
			2,431,769
Business Services — 0.2%
Resources Connection, Inc.*	25,214		413,005
Capital Markets — 0.7%
GAMCO Investment, Inc. (Class A Stock)	23,570		643,932
Raymond James Financial, Inc.	34,250		586,702
Thomas Weisel Partners Group, Inc.*	21,190		100,017
			1,330,651

COMMON STOCKS (continued)	Shares	Value (Note 2)
Chemicals — 1.6%
Ferro Corp.	26,740	$	188,517
Fuller (H.B.) Co.(a)	60,262		970,821
KMG Chemicals, Inc.	46,774		232,467
Koppers Holdings, Inc.	12,070		260,953
Minerals Technologies, Inc.	17,596		719,676
PolyOne Corp.*(a)	245,602		773,646
			3,146,080
Clothing & Apparel — 0.4%
Gymboree Corp.*(a)	17,012		443,843
K-Swiss, Inc. (Class A Stock)	27,391		312,257
			756,100
Commercial Banks — 7.7%
Bancorp, Inc. (The)*	6,441		24,154
Cascade Financial Corp.	129,495		701,863
Central Pacific Financial Corp.	61,480		617,259
City Bank/Lynnwood WA	44,330		230,516
City Holding Co.(a)	14,360		499,441
City National Corp.	14,380		700,306
CoBiz Financial, Inc.(a)	127,669		1,243,496
Cullen/Frost Bankers, Inc.	39,420		1,997,806
First Security Group, Inc.	202,160		933,979
FNB Corp.	61,178		807,550
IBERIABANK Corp.	33,126		1,590,048
PAB Bankshares, Inc.	18,470		81,268
South Financial Group, Inc. (The)(a)	36,200		156,384
SVB Financial Group*(a)	26,150		685,914
Synovus Financial Corp.	97,040		805,432
Tompkins Trustco, Inc.	11,590		671,640
UCBH Holdings, Inc.	135,780		934,166
Umpqua Holdings Corp.	98,470		1,424,861
Webster Financial Corp.	31,400		432,692
Wintrust Financial Corp.(a)	51,810		1,065,732
			15,604,507
Commercial Services — 0.1%
On Assignment, Inc.*	47,451		269,047
Commercial Services & Supplies — 0.6%
Hillenbrand, Inc.	22,870		381,472
Watson Wyatt Worldwide, Inc. (Class A Stock)	16,300		779,466
			1,160,938
Communication Equipment — 1.8%
Bel Fuse, Inc. (Class B Stock)	16,360		346,832
Black Box Corp.	38,420		1,003,530
Digi International, Inc.*	70,300		570,133
Plantronics, Inc.(a)	129,985		1,715,802
			3,636,297
Computer Hardware — 0.7%
Electronics for Imaging, Inc.*(a)	88,238		843,555
MTS Systems Corp.	20,435		544,389
			1,387,944
Computer Services & Software — 1.6%
Avid Technology, Inc.*	54,104		590,275
Factset Research Systems, Inc.(a)	10,429		461,379
JDA Software Group, Inc.*(a)	36,464		478,772

SEE NOTES TO FINANCIAL STATEMENTS.

A63

	SP SMALL CAP VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Computer Services & Software (continued)
Monotype Imaging Holdings, Inc.*	36,668	$	212,674
Parametric Technology Corp.*	66,168		837,025
Progress Software Corp.*	15,941		307,024
Solera Holdings, Inc.*(a)	14,190		341,979
			3,229,128
Computers & Peripherals — 0.2%
Rimage Corp.*	26,020		348,928
Construction — 0.7%
MDC Holdings, Inc.(a)	8,845		268,004
Ryland Group, Inc.	63,863		1,128,459
			1,396,463
Construction & Engineering — 1.0%
Dycom Industries, Inc.*	19,980		164,236
EMCOR Group, Inc.*	45,450		1,019,443
Perini Corp.*(a)	32,830		767,565
			1,951,244
Construction Materials — 0.1%
Vulcan Materials Co.(a)	1,919		133,524
Consumer Finance — 0.2%
First Cash Financial Services, Inc.*	21,794		415,394
Consumer Products & Services — 1.0%
Elizabeth Arden, Inc.*(a)	61,648		777,382
Fossil, Inc.*	43,016		718,367
Prestige Brands Holdings, Inc.*	57,251		603,998
			2,099,747
Containers & Packaging — 0.5%
AptarGroup, Inc.	30,850		1,087,154
Distribution/Wholesale — 0.6%
Watsco, Inc.(a)	32,946		1,265,126
Diversified Consumer Services — 0.5%
Steiner Leisure Ltd. (Bahamas)*	36,060		1,064,491
Diversified Financial Services — 1.4%
Boston Private Financial Holdings, Inc.	37,180		254,311
Financial Federal Corp.	86,422		2,011,040
KBW, Inc.*(a)	22,445		516,235
			2,781,586
Electric Utilities — 1.6%
MGE Energy, Inc.	21,927		723,591
NV Energy, Inc.	204,828		2,025,749
Portland General Electric Co.	24,250		472,147
			3,221,487
Electrical Equipment — 1.0%
Hubbell, Inc. (Class B Stock)	14,300		467,324
Regal-Beloit Corp.	43,800		1,663,962
			2,131,286
Electronic Components — 0.2%
Empire District Electric Co. (The)	26,321		463,250

COMMON STOCKS (continued)	Shares	Value (Note 2)
Energy Equipment & Services — 0.9%
Dril-Quip, Inc.*	34,210	$	701,647
ION Geophysical Corp.*(a)	102,080		350,135
National Oilwell Varco, Inc.*	18,880		461,427
Superior Well Services, Inc.*	21,290		212,900
			1,726,109
Environmental Services — 0.5%
Waste Connections, Inc.*	30,734		970,272
Exchange Traded Funds — 2.7%
iShares NASDAQ Biotechnology Index Fund(a)	18,400		1,307,320
iShares Russell 2000 Value Index Fund	83,781		4,119,512
			5,426,832
Financial – Bank & Trust — 4.9%
Bank of Hawaii Corp.	5,040		227,657
Bank of the Ozarks, Inc.	32,413		960,721
First Financial Bankshares, Inc.(a)	29,557		1,631,842
Glacier Bancorp, Inc.	69,549		1,322,822
NewAlliance Bancshares, Inc.(a)	47,981		631,910
PacWest Bancorp	17,457		469,593
Prosperity Bancshares, Inc.	42,738		1,264,617
Provident Financial Services, Inc.	17,680		270,504
SCBT Financial Corp.	10,598		365,631
Seacoast Banking Corp. of Florida(a)	27,718		182,939
Signature Bank / New York*(a)	51,272		1,470,994
Southcoast Financial Corp.*	14,765		61,718
Sterling Bancorp	16,462		230,962
Summit State Bank	10,981		50,513
Texas Capital Bancshares, Inc.*(a)	27,889		372,597
United Community Banks, Inc.(a)	9,918		134,688
WSFS Financial Corp.(a)	5,745		275,702
			9,925,410
Financial – Brokerage — 0.2%
Compass Diversified Holdings	39,819		447,964
Financial – Securities/Asset Management — 0.1%
Gladstone Capital Corp.	20,764		167,981
Financial Services — 2.1%
Ares Capital Corp.	29,696		187,976
Berkshire Hills Bancorp, Inc.	12,594		388,651
BGC Partners, Inc. (Class A Stock)	39,496		109,009
Brookline Bancorp, Inc.(a)	54,437		579,754
Highland Distressed Opportunities, Inc.	18,944		40,730
Home BancShares, Inc.(a)	8,548		230,369
Interactive Data Corp.	31,958		788,084
Knight Capital Group, Inc. (Class A Stock)*(a)	40,673		656,869
PennantPark Investment Corp.	53,527		193,232
RSC Holdings, Inc.*(a)	123,436		1,051,675
			4,226,349
Food & Staples Retailing — 1.2%
Casey’s General Stores, Inc.(a)	78,855		1,795,528
Weis Markets, Inc.	21,370		718,673
			2,514,201

SEE NOTES TO FINANCIAL STATEMENTS.

A64

	SP SMALL CAP VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Food Products — 2.3%
Del Monte Foods Co.	241,500	$	1,724,310
Nash-Finch Co.	8,671		389,241
Ralcorp Holdings, Inc.*	15,390		898,776
Sensient Technologies Corp.	50,722		1,211,242
Smithfield Foods, Inc.*(a)	33,260		467,968
			4,691,537
Gas Utilities — 0.9%
New Jersey Resources Corp.	19,380		762,603
Northwest Natural Gas Co.(a)	24,840		1,098,673
			1,861,276
Healthcare – Services — 0.1%
Hill-Rom Holdings, Inc.(a)	17,472		287,589
Healthcare Equipment & Supplies — 0.2%
National Dentex Corp.*	75,610		344,025
Healthcare Products — 0.4%
American Medical Systems Holdings, Inc.*	65,345		587,451
Kinetic Concepts, Inc.*(a)	8,470		162,455
			749,906
Healthcare Providers & Services — 1.9%
Cross Country Healthcare, Inc.*	81,340		714,979
Healthways, Inc.*	22,559		258,977
LifePoint Hospitals, Inc.*(a)	49,720		1,135,605
Lincare Holdings, Inc.*(a)	18,900		508,977
RehabCare Group, Inc.*	76,080		1,153,373
			3,771,911
Healthcare Technology
MedQuist, Inc.	23,170		47,499
Hotels, Restaurants & Leisure — 0.4%
Brinker International, Inc.	18,330		193,198
Cheesecake Factory, Inc. (The)*	27,339		276,124
Choice Hotels International, Inc.	10,972		329,818
			799,140
Household Durables — 1.1%
Ethan Allen Interiors, Inc.(a)	9,220		132,491
Snap-on, Inc.	27,550		1,084,919
Tupperware Brands Corp.	45,958		1,043,247
			2,260,657
Household Products — 0.5%
Central Garden & Pet Co. (Class A Stock)*(a)	157,000		926,300
Information Technology Services — 0.7%
Perot Systems Corp. (Class A Stock)*(a)	108,570		1,484,152
Insurance — 8.6%
Allied World Assurance Holdings Ltd. (Bermuda)	51,050		2,072,630
AMBAC Financial Group, Inc.(a)	79,110		102,843
American Equity Investment Life Holding Co.	140,507		983,549
Arch Capital Group Ltd. (Bermuda)*	10,270		719,927

COMMON STOCKS (continued)	Shares	Value (Note 2)
Insurance (continued)
Aspen Insurance Holdings Ltd. (Bermuda)	47,359	$	1,148,456
Assured Guaranty Ltd. (Bermuda)(a)	13,970		159,258
CNA Surety Corp.*(a)	67,842		1,302,566
Donegal Group, Inc.	23,142		388,091
EMC Insurance Group, Inc.(a)	31,540		809,001
Max Capital Group Ltd. (Bermuda)	86,512		1,531,262
Meadowbrook Insurance Group, Inc.	389,329		2,507,279
MGIC Investment Corp.	33,408		116,260
Navigators Group, Inc.*	8,057		442,410
ProAssurance Corp.*	31,165		1,644,889
RLI Corp.	14,996		917,155
Tower Group, Inc.(a)	27,800		784,238
Willis Group Holdings Ltd. (United Kingdom)	30,640		762,323
Zenith National Insurance Corp.	32,280		1,019,080
			17,411,217
Internet Services — 0.4%
Ariba, Inc.*(a)	59,889		431,800
F5 Networks, Inc.*(a)	16,640		380,390
			812,190
Iron/Steel — 0.2%
Olympic Steel, Inc.	16,000		325,920
Leisure Equipment & Products — 0.1%
Callaway Golf Co.	28,525		264,997
Life Science Tools & Services — 0.1%
Enzo Biochem, Inc.*	52,000		254,280
Machinery — 3.2%
Albany International Corp. (Class A Stock)	55,000		704,000
IDEX Corp.	24,590		593,849
Kaydon Corp.	35,870		1,232,134
Kennametal, Inc.	52,490		1,164,753
RBC Bearings, Inc.*(a)	53,000		1,074,840
Sauer-Danfoss, Inc.	50,390		440,913
Wabtec Corp.	33,220		1,320,495
			6,530,984
Machinery & Equipment — 1.6%
Actuant Corp. (Class A Stock)	64,391		1,224,717
Applied Industrial Technologies, Inc.	57,686		1,091,419
Franklin Electric Co., Inc.(a)	11,313		318,009
Tennant Co.	38,256		589,142
			3,223,287
Marine — 0.5%
Kirby Corp.*	36,110		987,970
Medical Supplies & Equipment — 1.6%
Cardiac Science Corp.*(a)	103,462		775,965
Edwards Lifesciences Corp.*(a)	10,574		581,041
Orthofix International NV (Netherlands)*(a)	24,528		376,014
PSS World Medical, Inc.*(a)	37,312		702,212
Symmetry Medical, Inc.*	88,140		702,476
			3,137,708

SEE NOTES TO FINANCIAL STATEMENTS.

A65

	SP SMALL CAP VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Metals & Mining — 2.2%
Carpenter Technology Corp.	21,470	$	440,994
Cliffs Natural Resources, Inc.(a)	9,540		244,319
Commercial Metals Co.	31,780		377,229
Haynes International, Inc.*	25,170		619,685
Kaiser Aluminum Corp.	40,839		919,694
Mueller Industries, Inc.	66,415		1,665,688
Schnitzer Steel Industries, Inc. (Class A Stock)	5,861		220,667
			4,488,276
Oil, Gas & Consumable Fuels — 2.3%
Cabot Oil & Gas Corp.	20,060		521,560
Core Laboratories NV (Netherlands)(a)	14,019		839,177
Denbury Resources, Inc.*(a)	44,200		482,664
Goodrich Petroleum Corp.*	10,080		301,896
Petroleum Development Corp.*	31,967		769,446
Southwest Gas Corp.	25,807		650,853
St. Mary Land & Exploration Co.	11,090		225,238
XTO Energy, Inc.	24,945		879,810
			4,670,644
Paper & Forest Products — 0.1%
Caraustar Industries, Inc.*	143,281		65,909
Louisiana-Pacific Corp.	68,500		106,860
			172,769
Pharmaceuticals — 0.4%
Charles River Laboratories International, Inc.*	12,500		327,500
Medarex, Inc.*	74,612		416,335
			743,835
Professional Services — 0.8%
Korn/Ferry International*	19,980		228,172
TrueBlue, Inc.*	72,670		695,452
United Stationers, Inc.*(a)	21,840		731,421
			1,655,045
Real Estate Investment Trusts — 6.9%
Acadia Realty Trust	44,841		639,881
American Campus Communities, Inc.	61,329		1,256,018
American Land Lease, Inc.	30,090		415,844
BioMed Realty Trust, Inc.(a)	135,389		1,586,759
Cogdell Spencer, Inc.	27,235		254,920
Corporate Office Properties Trust	7,480		229,636
Cousins Properties, Inc.(a)	48,410		670,478
Digital Realty Trust, Inc.(a)	38,723		1,272,050
iStar Financial, Inc.	40,990		91,408
LaSalle Hotel Properties(a)	42,700		471,835
MFA Mortgage Investments, Inc.	230,166		1,355,678
Mid-America Apartment Communities, Inc.(a)	37,490		1,393,128
National Retail Properties, Inc.(a)	79,161		1,360,778
Omega Healthcare Investors, Inc.	75,442		1,204,809
Parkway Properties, Inc.	52,267		940,806
Saul Centers, Inc.	7,360		290,720
U-Store-It Trust	56,713		252,373

COMMON STOCKS (continued)	Shares	Value (Note 2)
Real Estate Investment Trusts (continued)
Washington Real Estate Investment Trust	9,170	$	259,511
			13,946,632
Restaurants — 0.4%
California Pizza Kitchen, Inc.*	49,964		535,614
CEC Entertainment, Inc.*	14,831		359,652
			895,266
Retail & Merchandising — 1.3%
Aaron Rents, Inc.	63,309		1,685,285
Big Lots, Inc.*(a)	36,157		523,915
School Specialty, Inc.*(a)	18,065		345,403
			2,554,603
Road & Rail — 0.2%
J.B. Hunt Transport Services, Inc.(a)	18,720		491,775
Semiconductors & Semiconductor Equipment — 3.8%
Atmel Corp.*	137,556		430,550
ATMI, Inc.*	10,480		161,706
Emulex Corp.*	68,960		481,341
Entegris, Inc.*	248,770		544,806
Exar Corp.*(a)	218,480		1,457,262
Fairchild Semiconductor International, Inc.*	129,200		631,788
FormFactor, Inc.*	24,016		350,634
MKS Instruments, Inc.*(a)	28,540		422,107
Omnivision Technologies, Inc.*	89,720		471,030
ON Semiconductor Corp.*(a)	302,853		1,029,700
Semtech Corp.*	55,599		626,601
Verigy Ltd. (Singapore)*	114,600		1,102,452
			7,709,977
Software — 2.8%
Citrix Systems, Inc.*	49,140		1,158,230
EPIQ Systems, Inc.*(a)	55,148		921,523
Lawson Software, Inc.*(a)	481,713		2,283,320
McAfee, Inc.*(a)	39,620		1,369,663
			5,732,736
Specialty Retail — 1.2%
Aeropostale, Inc.*	26,807		431,593
Buckle, Inc. (The)(a)	11,175		243,838
Cato Corp. (The) (Class A Stock)	77,360		1,168,136
Penske Auto Group, Inc.(a)	31,060		238,541
Williams-Sonoma, Inc.(a)	30,850		242,481
			2,324,589
Telecommunications — 1.2%
ADC Telecommunications, Inc.*(a)	64,685		353,827
Alaska Communications Systems Group, Inc.	13,283		124,595
Anixter International, Inc.*(a)	17,299		521,046
Polycom, Inc.*(a)	19,201		259,406
Premiere Global Services, Inc.*	35,586		306,395
RCN Corp.*	9,468		55,861
Syniverse Holdings, Inc.*(a)	34,113		407,309
Tekelec*(a)	28,377		378,549
			2,406,988

SEE NOTES TO FINANCIAL STATEMENTS.

A66

	SP SMALL CAP VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Textiles — 0.3%
G & K Services, Inc. (Class A Stock)	33,171	$	670,718
Textiles, Apparel & Luxury Goods — 0.5%
Movado Group, Inc.	4,210		39,532
Timberland Co. (Class A Stock)*	76,080		878,724
			918,256
Thrifts & Mortgage Finance — 0.3%
Westfield Financial, Inc.	65,530		676,270
Transportation — 0.8%
Aegean Marine Petroleum Network, Inc. (Greece)	44,716		758,383
Forward Air Corp.(a)	8,685		210,785
Heartland Express, Inc.	37,811		595,901
			1,565,069
Utilities — 2.7%
Cleco Corp.(a)	57,860		1,320,944
CMS Energy Corp.(a)	72,840		735,684
El Paso Electric Co.*	122,693		2,219,516
Unisource Energy Corp.	7,378		216,618
Westar Energy, Inc.	45,104		925,083
			5,417,845
TOTAL LONG-TERM INVESTMENTS (cost $261,009,568)			197,642,716
SHORT-TERM INVESTMENT — 22.9%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $46,308,253; includes $41,797,395 of cash collateral for securities on loan)(Note 4)(b)(w)	46,308,253		46,308,253
TOTAL INVESTMENTS — 120.7% (cost $307,317,821)			243,950,969
LIABILITIES IN EXCESS OF OTHER ASSETS — (20.7)%			(41,793,471	)
NET ASSETS — 100.0%		$	202,157,498

* Non-income producing security.

(a) All or a portion of security is on loan. The aggregate market value of such securities is $40,668,921; cash collateral of $41,797,395 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	243,950,969	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	243,950,969	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A67

	SP SMALL CAP VALUE PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Affiliated Money Market Mutual Fund (20.7% represents investments purchased with collateral from securities on loan)	22.9	%
Insurance	8.6
Commercial Banks	7.7
Real Estate Investment Trusts	6.9
Financial – Bank & Trust	4.9
Semiconductors & Semiconductor Equipment	3.8
Machinery	3.2
Software	2.8
Exchange Traded Funds	2.7
Utilities	2.7
Food Products	2.3
Oil, Gas & Consumable Fuels	2.3
Metals & Mining	2.2
Financial Services	2.1
Banks	2.0
Healthcare Providers & Services	1.9
Communication Equipment	1.8
Aerospace & Defense	1.7
Computer Services & Software	1.6
Machinery & Equipment	1.6
Chemicals	1.6
Medical Supplies & Equipment	1.6
Electric Utilities	1.6
Diversified Financial Services	1.4
Retail & Merchandising	1.3
Food & Staples Retailing	1.2
Building Products	1.2
Telecommunications	1.2
Specialty Retail	1.2
Household Durables	1.1
Electrical Equipment	1.0
Consumer Products & Services	1.0
Construction & Engineering	1.0
Gas Utilities	0.9
Energy Equipment & Services	0.9
Professional Services	0.8
Building Materials	0.8
Transportation	0.8
Information Technology Services	0.7

Airlines	0.7	%
Construction	0.7
Computer Hardware	0.7
Capital Markets	0.7
Distribution/Wholesale	0.6
Commercial Service & Supplies	0.6
Containers & Packaging	0.5
Diversified Consumer Services	0.5
Marine	0.5
Environmental Services	0.5
Automotive Parts	0.5
Household Products	0.5
Textiles, Apparel & Luxury Goods	0.5
Restaurants	0.4
Internet Services	0.4
Hotels, Restaurants & Leisure	0.4
Auto Components	0.4
Clothing & Apparel	0.4
Healthcare Products	0.4
Pharmaceuticals	0.4
Thrifts & Mortgage Finance	0.3
Textiles	0.3
Air Freight & Logistics	0.3
Road & Rail	0.2
Electronic Components	0.2
Financial – Brokerage	0.2
Consumer Finance	0.2
Business Services	0.2
Automobile Manufacturers	0.2
Computers & Peripherals	0.2
Healthcare Equipment & Supplies	0.2
Iron/Steel	0.2
Healthcare – Services	0.1
Commercial Services	0.1
Leisure Equipment & Products	0.1
Life Science Tools & Services	0.1
Paper & Forest Products	0.1
Financial – Securities/Asset Management	0.1
Construction Materials	0.1
	120.7
Liabilities in excess of other assets	(20.7	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A68

SP SMALL CAP VALUE PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value, including securities on loan of $40,668,921:
Unaffiliated investments (cost $261,009,568)	$	197,642,716
Affiliated investments (cost $46,308,253)		46,308,253
Cash		68,329
Receivable for investments sold		922,008
Dividends and interest receivable		404,111
Prepaid expenses		4,975
Receivable for Series shares sold		158
Total Assets		245,350,550
LIABILITIES
Collateral for securities on loan		41,797,395
Payable for investments purchased		1,077,864
Management fee payable		144,916
Accrued expenses and other liabilities		101,118
Payable for Series shares repurchased		69,083
Deferred trustees’ fees		1,966
Transfer agent fees payable		710
Total Liabilities		43,193,052
NET ASSETS	$	202,157,498
Net assets were comprised of:
Paid-in capital	$	285,629,054
Retained earnings		(83,471,556	)
Net assets, December 31, 2008	$	202,157,498
Net asset value and redemption price per share, $202,157,498 / 26,598,661 outstanding shares of beneficial interest	$	7.60

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $162 foreign withholding tax)	$	4,426,563
Affiliated income from securities lending, net		885,828
Affiliated dividend income		266,576
		5,578,967
EXPENSES
Management fee		2,331,875
Custodian’s fees and expenses		123,000
Shareholders’ reports		35,000
Audit fee		20,000
Trustees’ fees		12,000
Legal fees and expenses		8,000
Insurance expenses		4,000
Transfer agent’s fees and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		9,294
Total expenses		2,548,169
NET INVESTMENT INCOME		3,030,798
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions		(22,100,237	)
Net change in unrealized appreciation (depreciation) on investments		(63,567,798	)
NET LOSS ON INVESTMENTS		(85,668,035	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(82,637,237	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,030,798		$	2,856,776
Net realized gain (loss) on investment transactions		(22,100,237	)		27,343,333
Net change in unrealized appreciation (depreciation) on investments		(63,567,798	)		(38,692,595	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS		(82,637,237	)		(8,492,486	)
DISTRIBUTIONS		(30,200,109	)		(22,383,872	)
SERIES SHARE TRANSACTIONS:
Series shares sold [4,858,589 and 2,115,636 shares, respectively]		41,844,195			29,174,651
Series shares issued in reinvestment of distributions [2,801,494 and 1,854,505 shares, respectively]		30,200,109			22,383,872
Series shares repurchased [6,373,598 and 5,621,968 shares, respectively]		(66,485,501	)		(80,228,555	)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		5,558,803			(28,670,032	)
TOTAL DECREASE IN NET ASSETS		(107,278,543	)		(59,546,390	)
NET ASSETS:
Beginning of year		309,436,041			368,982,431
End of year	$	202,157,498		$	309,436,041

SEE NOTES TO FINANCIAL STATEMENTS.

A69

	SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 97.3%
COMMON STOCKS	Shares	Value (Note 2)
Aerospace & Defense — 0.5%
Lockheed Martin Corp.	2,000	$	168,160
Beverages — 2.5%
PepsiCo, Inc.	14,400		788,688
Biotechnology — 16.9%
Celgene Corp.*	25,625		1,416,550
Genentech, Inc.*	20,600		1,707,946
Gilead Sciences, Inc.*	44,675		2,284,679
			5,409,175
Capital Markets — 3.1%
Schwab, (Charles) Corp. (The)	61,300		991,221
Chemicals — 3.2%
Monsanto Co.	14,750		1,037,663
Commercial Services & Supplies — 0.3%
Apollo Group, Inc. (Class A Stock)*	1,300		99,606
Communication Equipment — 13.9%
Cisco Systems, Inc.*	93,350		1,521,605
QUALCOMM, Inc.	56,400		2,020,812
Research In Motion Ltd. (Canada)*	22,600		917,108
			4,459,525
Computers & Peripherals — 7.5%
Apple, Inc.*	16,937		1,445,573
Hewlett-Packard Co.	26,200		950,798
			2,396,371
Diversified Consumer Services — 3.7%
Visa, Inc. (Class A Stock)	22,900		1,201,105
Diversified Financial Services — 0.8%
JPMorgan Chase & Co.	8,500		268,005
Diversified Financials — 1.6%
CME Group, Inc.	2,505		521,316
Electronic Components & Equipment — 0.7%
Emerson Electric Co.	5,900		215,999
Energy Equipment & Services — 1.7%
Schlumberger Ltd. (Netherlands)	12,700		537,591
Financial – Bank & Trust — 0.5%
Blackstone Group LP (The)	24,048		157,033
Financials — 1.3%
Goldman Sachs Group, Inc. (The)	5,025		424,060
Food & Staples Retailing — 3.8%
Costco Wholesale Corp.	5,950		312,375
CVS/Caremark Corp.	31,400		902,436
			1,214,811
Healthcare Equipment & Supplies — 4.2%
Baxter International, Inc.	24,900		1,334,391
Healthcare Providers & Services — 0.8%
Medco Health Solutions, Inc.*	6,400		268,224
Household Products — 3.0%
Colgate-Palmolive Co.	13,800		945,852
Internet & Catalog Retail — 2.9%
Amazon.com, Inc.*	18,400		943,552

COMMON STOCKS (continued)	Shares	Value (Note 2)
Internet Software & Services — 6.3%
Google, Inc. (Class A Stock)*	6,545	$	2,013,569
Media — 0.6%
Walt Disney Co. (The)	8,650		196,269
Multi-Line Retail — 1.0%
Kohl’s Corp.*	8,700		314,940
Oil, Gas and Consumable Fuels — 4.0%
EOG Resources, Inc.	4,175		277,971
Occidental Petroleum Corp.	8,400		503,916
XTO Energy, Inc.	13,900		490,253
			1,272,140
Pharmaceuticals — 8.4%
Abbott Laboratories	6,350		338,899
Alcon, Inc. (Switzerland)	11,700		1,043,523
Teva Pharmaceutical Industries Ltd., ADR (Israel)	31,000		1,319,670
			2,702,092
Restaurants — 1.2%
McDonald’s Corp.	6,300		391,797
Semiconductors & Semiconductor Equipment — 0.7%
Intel Corp.	14,600		214,036
Software — 1.6%
Adobe Systems, Inc.*	23,800		506,702
Telecommunications
Nortel Networks Corp. (Canada)*	25		7
Tobacco — 0.6%
Philip Morris International, Inc.	4,400		191,444
TOTAL LONG-TERM INVESTMENTS (cost $34,149,728)			31,185,344
SHORT-TERM INVESTMENT — 2.9%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $942,438)(w) (Note 4)	942,438		942,438
TOTAL INVESTMENTS — 100.2% (cost $35,092,166)			32,127,782
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%			(69,363	)
NET ASSETS — 100.0%		$	32,058,419

The following abbreviation is used in Portfolio descriptions:

ADR American Depositary Receipt

* Non-income producing security.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A70

	SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	32,127,782	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	32,127,782	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 were as follows:

Biotechnology	16.9	%
Communication Equipment	13.9
Pharmaceuticals	8.4
Computers & Peripherals	7.5
Internet Software & Services	6.3
Healthcare Equipment & Supplies	4.2
Oil, Gas and Consumable Fuels	4.0
Food & Staples Retailing	3.8
Diversified Consumer Services	3.7
Chemicals	3.2
Capital Markets	3.1
Household Products	3.0
Internet & Catalog Retail	2.9
Affiliated Money Market Mutual Fund	2.9
Beverages	2.5
Energy Equipment & Services	1.7
Diversified Financials	1.6
Software	1.6
Financials	1.3
Restaurants	1.2
Multi-Line Retail	1.0
Healthcare Providers & Services	0.8
Diversified Financial Services	0.8
Electronic Components & Equipment	0.7
Semiconductors & Semiconductor Equipment	0.7
Media	0.6
Tobacco	0.6
Aerospace & Defense	0.5
Financial – Bank & Trust	0.5
Commercial Services & Supplies	0.3
	100.2
Liabilities in excess of other assets	(0.2	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A71

SP STRATEGIC PARTNERS FOCUSED GROWTH PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value:
Unaffiliated investments (cost $34,149,728)	$	31,185,344
Affiliated investments (cost $942,438)		942,438
Receivable for Series shares sold		36,997
Cash		17,169
Dividends and interest receivable		35,200
Prepaid expenses		930
Total Assets		32,218,078
LIABILITIES
Payable for investments purchased		80,879
Accrued expenses and other liabilities		48,162
Management fee payable		23,778
Distribution fee payable		2,139
Deferred trustees’ fees		1,792
Administration fee payable		1,284
Shareholder servicing fees payable		879
Transfer agent fees payable		618
Payable for Series shares repurchased		128
Total Liabilities		159,659
NET ASSETS	$	32,058,419
Net assets were comprised of:
Paid-in capital	$	42,768,717
Retained earnings		(10,710,298	)
Net assets, December 31, 2008	$	32,058,419
Class I:
Net asset value and redemption price per share, $21,617,006 / 4,520,760 outstanding shares of beneficial interest	$	4.78
Class II:
Net asset value and redemption price per share, $10,441,413 / 2,266,908 outstanding shares of beneficial interest	$	4.61

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of $16,351 foreign withholding tax)	$	446,514
Affiliated dividend income		29,187
		475,701
EXPENSES
Management fee		459,441
Distribution fee—Class II		49,054
Administration fee—Class II		29,432
Custodian’s fees and expenses		66,000
Shareholders’ reports		55,000
Audit fee		20,000
Trustees’ fees		9,000
Legal fees and expenses		6,000
Transfer agent’s fees and expenses (including affiliated expense of $4,000) (Note 4)		4,000
Insurance expenses		1,000
Miscellaneous		7,382
Total expenses		706,309
NET INVESTMENT LOSS		(230,608	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions		(5,291,643	)
Net change in unrealized depreciation on investments		(17,178,750	)
NET LOSS ON INVESTMENTS		(22,470,393	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(22,701,001	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment loss	$	(230,608	)	$	(403,753	)
Net realized gain (loss) on investment transactions		(5,291,643	)		4,363,534
Net change in unrealized appreciation (depreciation) on investments		(17,178,750	)		5,320,010
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(22,701,001	)		9,279,791
DISTRIBUTIONS:
Class I		(2,371,440	)		(1,477,681	)
Class II		(1,588,341	)		(1,087,456	)
TOTAL DISTRIBUTIONS		(3,959,781	)		(2,565,137	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold		6,604,302			4,576,719
Series shares issued in reinvestment of distributions		3,959,781			2,565,137
Series shares repurchased		(17,551,936	)		(18,165,307	)
DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(6,987,853	)		(11,023,451	)
TOTAL DECREASE IN NET ASSETS		(33,648,635	)		(4,308,797	)
NET ASSETS:
Beginning of year		65,707,054			70,015,851
End of year	$	32,058,419		$	65,707,054

SEE NOTES TO FINANCIAL STATEMENTS.

A72

NOTES TO THE FINANCIAL STATEMENTS OF

THE PRUDENTIAL SERIES FUND

Note 1: General

The Prudential Series Fund (“Series Fund”), organized as a Delaware statutory trust, is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended. On January 2, 2006, each Portfolio of the Series Fund changed its federal income tax status from a regulated investment company to a partnership. As a result of that conversion, the Series Fund was reorganized from a Maryland corporation to a Delaware statutory trust. Pursuant to this reorganization, the Series Fund has been renamed “The Prudential Series Fund.” The Series Fund is composed of twenty-eight Portfolios (“Portfolio” or “Portfolios”), each with a separate series shares. The information presented in these financial statements pertains to thirteen Portfolios: SP Aggressive Growth Asset Allocation Portfolio, SP Balanced Asset Allocation Portfolio, SP Conservative Asset Allocation Portfolio, SP Davis Value Portfolio, SP Growth Asset Allocation Portfolio, SP International Growth Portfolio, SP International Value Portfolio, SP Mid Cap Growth Portfolio, SP PIMCO High Yield Portfolio, SP PIMCO Total Return Portfolio, SP Prudential U.S. Emerging Growth Portfolio, SP Small Cap Value Portfolio and SP Strategic Partners Focused Growth Portfolio.

The Portfolios of the Series Fund have the following as investment objectives:

SP Aggressive Growth Asset Allocation Portfolio:    Capital appreciation by investing primarily in large cap equity portfolios, international portfolios, and small/mid cap equity portfolios. The Portfolio will achieve this by investing in certain other Series Fund Portfolios and Advanced Series Trust Portfolios.

SP Balanced Asset Allocation Portfolio:    Provide a balance between current income and growth of capital by investing in fixed income portfolios, large cap equity portfolios, small/mid cap equity portfolios, and international equity portfolios. The Portfolio will achieve this by investing in certain other Series Fund Portfolios and Advanced Series Trust Portfolios.

SP Conservative Asset Allocation Portfolio:    Provide current income with low to moderate capital appreciation by investing in fixed income portfolios, large cap equity portfolios, and small/mid cap equity portfolios. The Portfolio will achieve this by investing in certain other Series Fund and Advanced Series Trust Portfolios.

SP Davis Value Portfolio:    Capital growth through investments primarily in common stock of U.S. companies with market capitalization of at least $5 billion.

SP Growth Asset Allocation Portfolio:    Provide long-term growth of capital with consideration also given to current income by investing in large-cap equity portfolios, fixed income portfolios, international equity portfolios and small/mid-cap equity portfolios. The Portfolio will achieve this by investing in certain other Series Fund Portfolios and Advanced Series Trust Portfolios.

SP International Growth Portfolio:    Long-term growth of capital by investing primarily in equity-related securities of foreign issuers.

SP International Value Portfolio:    Long-term capital appreciation by investing primarily in the stocks and other equity securities of companies in developed countries outside the United States.

SP Mid Cap Growth Portfolio:    Long-term growth of capital by investing primarily in common stocks and related securities, such as preferred stocks, convertible securities and depository receipts for those securities.

SP PIMCO High Yield Portfolio:    Maximum total return, consistent with preservation of capital and prudent investment management by investing primarily in a diversified portfolio of high yield/high risk securities rated below investment grade but rated at least B by Moody’s or S&P, or, if unrated, determined by Pacific Investment Management Company LLC (“PIMCO”) to be of comparable quality.

SP PIMCO Total Return Portfolio:    Maximum total return, consistent with preservation of capital and prudent investment management by investing primarily in a diversified portfolio of fixed income instruments of varying maturities.

SP Prudential U.S. Emerging Growth Portfolio:    Long-term capital appreciation by investing primarily in equity securities of small and medium-sized U.S. companies that the Portfolio manager believes have the potential for above-average growth.

B1

SP Small Cap Value Portfolio:    Long-term growth of capital by investing primarily in common stocks of companies with small to medium market capitalization.

SP Strategic Partners Focused Growth Portfolio:    Long-term capital growth by investing primarily in equity-related securities of U.S. companies that the Portfolio manager believes to have strong capital appreciation potential.

The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government) held by the Portfolios to meet their obligations may be affected by the economic or political developments in a specific industry, region or country.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.

Note 2: Accounting Policies

The following is a summary of significant accounting policies followed by the Series Fund and the Portfolios in preparation of their financial statements.

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the official closing price provided by NASDAQ. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisors, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange or at the last bid price in absence of an asked price. Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Series Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees’ approved fair valuation procedures. When determining the fair valuation of securities, some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser 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 mutual funds to calculate their net asset values.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities that are held in the Portfolios which mature in more than 60 days are valued at current market quotations and those short-term debt securities which mature in 60 days or less are valued at amortized cost which approximates market value. The amortized cost method values a security at its cost at the time of purchase and thereafter assumes a constant amortization to maturity of any discount or premium.

The SP PIMCO High Yield Portfolio and the SP PIMCO Total Return Portfolio may hold up to 15% of their net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities, including private placements, are valued pursuant to the valuation procedures noted above.

B2

Repurchase Agreements:    In connection with transactions in repurchase agreements with United States financial institutions, it is the Series Fund’s policy that its custodian or designated subcustodians, as the case may be, under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked to market on a daily basis to ensure the adequacy of the collateral. If the seller defaults or the value of the collateral declines, or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Series Fund may by delayed or limited.

Foreign Currency Translation:    The books and records of the Series Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i)  market value of investment securities, other assets and liabilities—at the current daily rates of exchange.

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

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

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

Forward Currency Contracts:    A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Certain Portfolios of the Series Fund may enter into forward currency contracts in order to hedge their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in the assets and liabilities in the financial statements. 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 foreign currency transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Short Sales:    Certain Portfolios of the Series Fund may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When a Portfolio makes a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The Portfolio may have to pay a fee to borrow the particular security and may be obligated to remit any interest or dividends received on such borrowed securities. Dividends declared on short positions open are recorded on the ex-date and interest payable is accrued daily on fixed income securities sold short, both of which are recorded as an expense. A gain, limited to the price at which the Portfolio sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received.

Loan Participations:    The SP PIMCO High Yield Portfolio may invest in loan participations. When the Portfolio purchases a loan participation, the Portfolio typically enters into a contractual relationship with the lender or third party selling such participations (“Selling Participant”), but not the borrower. As a result, the Portfolio assumes the credit risk of the borrower, the Selling Participant and any other persons interpositioned between the Portfolio and the borrower. The Portfolio may not directly benefit from the collateral supporting the senior loan in which it has purchased the loan participant.

B3

Options:    Certain Portfolios of the Series Fund may either purchase or write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates or currencies with respect to securities which the Portfolio currently owns or intends to purchase. The Portfolio’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 Portfolio purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Portfolio 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 Portfolio realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost basis of the purchase in determining whether the Portfolio has realized a gain (loss). The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain (loss). Gains (losses) on purchased options are included in net realized gains (losses) on investment transactions. Gains (losses) on written options are presented separately as net realized gain (loss) on written option transactions.

The Portfolio, as writer of an option, may have no control over whether the contract may be exercised. As a result, the Portfolio bears the market risk of an unfavorable change in the price of the security underlying the written option. The Portfolio, as purchaser of an option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

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 Portfolio 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 Portfolio each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts.

The Portfolio invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Portfolio intends to purchase, against fluctuations in value caused by changes in prevailing rates or market conditions. Under a variety of circumstances, the Portfolio 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 and the underlying hedged assets.

Swap Agreements:    The Portfolios may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. In connection with these agreements, securities may be identified as collateral 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 serve as a recourse in the event of default or bankruptcy/insolvency of either party.

Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period.

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

A Portfolio may use credit default swaps to provide a measure of protection against defaults of the issuers or to take an active long or short position with respect to the likelihood of a particular issuer’s default. A Portfolio may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect.

As a seller of protection on credit default swap agreements, a Portfolio will generally receive from the buyer of protection an agreed upon payment throughout the term of the swap provided that there is no credit event. As

B4

the seller, a Portfolio would effectively increase investment risk to its portfolio because, in addition to its total net assets, a Portfolio may be subject to investment exposure on the notional amount of the swap.

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

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

Some Portfolios may enter into total return swaps to manage their exposure to a security, commodity or an index. In a total return swap, one party would receive payments based on the market value of the security or the commodity involved, or total return of a specific referenced asset, such as an equity, index or bond, and in return pay a fixed amount.

These swap agreements involve, to varying degrees, elements of credit, market risk and documentation risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates. The swaps are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments. Payments received or paid by the Portfolio are recorded as realized gains or losses upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed in the footnotes to the Schedule of Investments.

Certain Portfolios have entered into over-the-counter derivative agreements. Such 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 to early terminate the contract(s) may impact the amounts reported on the financial statements. As of December 31, 2008, the SP PIMCO High Yield and SP PIMCO Total Return Portfolios have met conditions under such agreements that give the counterparty the right to call for an early termination. However, as of the date of issuance of these financial statements no notice of early termination was received.

Forward currency contracts, 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.

Floating-Rate Notes Issued in Conjunction with Securities Held:    The Portfolios invest in inverse floating rate securities (“inverse floaters”) that pay interest at a rate that varies inversely with short-term interest rates. Certain of these securities may be leveraged, whereby the interest rate varies inversely at a multiple of the change in short-term rates. As interest rates rise, inverse floaters provide less current income. The price of such securities is more volatile than comparable fixed rate securities.

When the Portfolios enter into agreements to create inverse floaters and floater note securities (also known as Tender Option Bond Transactions), the Portfolios transfer a fixed rate bond to a broker for cash. At the same time the Portfolios buy (receive) a residual interest in a trust (the “trust”) set up by the broker, often referred to as an inverse floating rate obligation (inverse floaters). Generally, the broker deposits a fixed rate bond (the “fixed rate bond”) into the trust with the same CUSIP number as the fixed rate bond sold to the broker by the Portfolio. The trust also issues floating rate notes (“floating rate notes”) which are sold to third parties. The

B5

floating rate notes have interest rates that reset weekly. The inverse floater held by the Portfolio gives the Portfolio the right (1) to cause the holders of the floating rate notes to tender their notes at par, and (2) to have the broker transfer the fixed rate bond held by the trust to the Portfolio thereby collapsing the trust. In accordance with FAS Statement No. 140, the Portfolios account for the transaction described above as funded leverage by including the fixed rate bond in its Portfolio of Investments, and accounts for the floating rate notes as a liability under the caption “payable for floating rate notes issued” in the Portfolio’s “Statement of Assets and Liabilities.”

The Portfolio’s investment policies and restrictions permit investments in inverse floating rate securities. Inverse floaters held by the Portfolio are securities exempt from registration under Rules 144A of the Securities Act of 1933.

Securities Lending:    Each Portfolio of the Series Fund may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Portfolio. Upon termination of the loan, the borrower will return to the Portfolio securities identical to the loaned securities. Should the borrower of the securities fail financially, the Portfolio has the right to repurchase the securities using the collateral in the open market. The Portfolio 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 Portfolio also continues to receive interest and dividends or amounts equivalent thereto on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

As a result of the bankruptcy filing by Lehman Brothers Holdings Inc., which was the parent company to the Portfolios’ Securities Lending Counter Party, Lehman Brothers Inc. (Lehman), the Portfolios’ Securities Lending Agent utilized collateral held on behalf of the Portfolios for securities out on loan to compensate the Portfolios for the failure of Lehman to return the securities. Any excess collateral was returned to Lehman.

When-Issued/Delayed Delivery Securities:    Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Portfolio enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.

Dollar Rolls:    Certain Portfolios of the Series Fund enter into mortgage dollar rolls in which the Portfolio sells mortgage securities for delivery in the current month, realizing a gain (loss), and simultaneously contracts to repurchase somewhat similar (same type, coupon and maturity) securities on a specified future date. During the roll period, the Portfolio forgoes principal and interest paid on the securities. The Portfolio is compensated by the interest earned on the cash proceeds of the initial sale and by the lower repurchase price at the future date. The difference between the sales proceeds and the lower repurchase price is recorded as a realized gain. The Fund maintains a segregated account, the dollar value of which is at least equal to its obligations, with respect to dollar rolls.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income, which is comprised of four elements: stated coupon, original issue discount, market discount and market premium, is recorded on the accrual basis. Expenses are recorded on the accrual basis. The Series Fund’s expenses are allocated to the respective Portfolios on the basis of relative net assets except for Portfolio specific expenses which are attributable directly to a Portfolio or class level.

For Portfolios with multiple classes of shares, net investment income (loss) (other than administration and distribution fees, which are charged to the respective class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Custody Fee Credits:    The Series Fund has an arrangement with its custodian bank, whereby uninvested monies earn credits which reduce the fees charged by the custodian. Such custody fee credits are presented as a reduction of gross expenses in the accompanying Statements of Operations.

Taxes:    For federal income tax purposes, each Portfolio in the Series Fund is treated as a separate taxpaying entity. The Portfolios are treated as partnerships for tax purposes. No provision has been made in the financial

B6

statements for U.S. Federal, state, or local taxes, as any tax liability arising from operations of the Portfolios is the responsibility of their partners. The Portfolios are not generally subject to entity-level taxation. Partners of each Portfolio are subject to taxes on their distributive share of partnership items.

Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Series Fund’s understanding of the applicable country’s tax rules and regulations.

Distributions:    Distributions from each Portfolio are made in cash and automatically reinvested in additional shares of the same Portfolio. The SP PIMCO High Yield and SP PIMCO Total Return Portfolios make distributions, if any, quarterly. All other Portfolios’ distributions are generally made on an annual basis. Distributions are recorded on the ex-date.

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 these estimates.

Note 3: Agreements

The Series Fund has a management agreement with PI. Pursuant to this agreement PI has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. PI has entered into subadvisory agreements with Jennison Associates LLC (“Jennison”), AllianceBernstein LP (“AllianceBernstein”), Davis Selected Advisers, LP (“Davis”), Goldman Sachs Asset Management, L.P. (“GSAM”), LSV Asset Management (“LSV”), Marsico (“Marsico”), Neuberger Berman Management, Inc. (“Neuberger Berman”), Quantitative Management Associates LLC (“QMA”), William Blair & Company LLC (“William Blair”), Pacific Investment Management Company LLC (“PIMCO”), Thornburg Investment Management Inc. (“Thornburg”), and ClearBridge Advisors LLC (“ClearBridge”) (collectively, the “Subadvisers”), under which each provides investment advisory services for certain Portfolios of the Series Fund. PI pays for the services of the Subadvisers, compensation of officers of the Series Fund, occupancy and certain clerical and administrative expenses of the Series Fund. The Portfolios bear all other costs and expenses.

The management fee paid to PI is computed daily and payable monthly, at the annual rates specified below, of the value of each of the Portfolio’s average daily net assets.

Portfolio	Management Fee		Effective Management Fee
SP Aggressive Growth Asset Allocation Portfolio	0.05	%	0.05	%
SP Balanced Asset Allocation Portfolio	0.05		0.05
SP Conservative Asset Allocation Portfolio	0.05		0.05
SP Davis Value Portfolio	0.75		0.75
SP Growth Asset Allocation Portfolio	0.05		0.05
SP International Growth Portfolio	0.85		0.85
SP International Value Portfolio	0.90		0.90
SP Mid Cap Growth Portfolio	0.80		0.80
SP PIMCO High Yield Portfolio	0.60		0.60
SP PIMCO Total Return Portfolio	0.60		0.60
SP Prudential U.S. Emerging Growth Portfolio	0.60		0.60
SP Small Cap Value Portfolio	0.90		0.90
SP Strategic Partners Focused Growth Portfolio	0.90		0.90

At December 31, 2008 the Subadvisers that provide investment advisory services to the Portfolios are as follows. Where more than one Subadviser is listed, each Subadviser provides services to a segment of the Portfolio:

Portfolio	Subadviser(s)
SP Aggressive Growth Asset Allocation Portfolio	QMA
SP Balanced Asset Allocation Portfolio	QMA
SP Conservation Asset Allocation Portfolio	QMA
SP Davis Value Portfolio	Davis
SP Growth Asset Allocation Portfolio	QMA
SP International Growth Portfolio	William Blair, Marsico
SP International Value Portfolio	LSV, Thornburg

B7

Portfolio	Subadviser(s)
SP Mid Cap Growth Portfolio	Neuberger Berman
SP PIMCO High Yield Portfolio	PIMCO
SP PIMCO Total Return Portfolio	PIMCO
SP Prudential U.S. Emerging Growth Portfolio	Jennison
SP Small Cap Value Portfolio	GSAM, ClearBridge
SP Strategic Partners Focused Growth Portfolio	AllianceBernstein, Jennison

The Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) which acts as the distributor of the Class I and Class II shares of the Series Fund. The Series Fund compensates PIMS for distributing and servicing the Series Fund’s Class II shares pursuant to a plan of distribution (the “Class II Plan”), 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 I shares of the Series Fund. Pursuant to the Class II Plan, the Class II shares of each Portfolio compensate PIMS for distribution-related activities at an annual rate of 0.25% of the average daily net assets of the Class II shares.

The Series Fund has an administration agreement with PI which acts as the administrator of the Class II shares of the Series Fund. The administration fee paid to PI is accrued daily and payable monthly, at the annual rate of 0.15% of the average daily net assets of the Class II shares.

PI has agreed to waive management fees and/or reimburse expenses of each of the following Portfolios for the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, and brokerage commissions) exceeded the percentage stated below, of the Portfolio’s average daily net assets.

Portfolio	Class I Expense Limit		Class II Expense Limit
SP International Growth Portfolio	1.24	*%	1.64	*%
SP Mid Cap Growth Portfolio	1.00	*	N/A
SP Small Cap Value Portfolio	1.05	*	N/A
SP Strategic Partners Focused Growth Portfolio	1.25	*	1.65	*

N/A—Not applicable—Portfolio does not currently have Class II shares.

*  Effective July 1, 2008, the expense limitation was removed.

PIMS, PI and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 4: Other Transactions with Affiliates

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

Prudential Investment Management, Inc. (“PIM”), an indirect, wholly-owned subsidiary of Prudential, is the Series Fund’s security lending agent. For the year ended December 31, 2008, PIM was compensated as follows for these services by the Series Fund Portfolios:

	PIM
SP Davis Value Portfolio	$	190,975
SP International Growth Portfolio		36,151
SP Mid Cap Growth Portfolio		91,610
SP Prudential U.S. Emerging Growth Portfolio		138,424
SP Small Cap Value Portfolio		377,573

For the year ended December 31, 2008, Wachovia Securities, LLC (Wachovia), an affiliate of PI, earned brokerage commissions from transactions executed on behalf of the Series Fund Portfolios as follows:

Portfolio	Wachovia
SP Davis Value Portfolio	$	54
SP Prudential U.S. Emerging Growth Portfolio		1,861

Certain Portfolios invest in the Taxable Money Market Series, a portfolio of Dryden Core Investment Fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

B8

Note 5: Portfolio Securities

The aggregate cost of purchases and the proceeds from the sales of securities (excluding government securities and short-term issues) for the year ended December 31, 2008 were as follows:

Cost of Purchases:

Portfolio
SP Aggressive Growth Asset Allocation Portfolio	$	51,326,380
SP Balanced Asset Allocation Portfolio		325,100,439
SP Conservative Asset Allocation Portfolio		167,444,593
SP Davis Value Portfolio		45,225,066
SP Growth Asset Allocation Portfolio		287,712,350
SP International Growth Portfolio		358,160,245
SP International Value Portfolio		113,980,618
SP Mid Cap Growth Portfolio		65,533,237
SP PIMCO High Yield Portfolio		456,919,599
SP PIMCO Total Return Portfolio		10,729,475,180
SP Prudential U.S. Emerging Growth Portfolio		96,114,619
SP Small Cap Value Portfolio		141,744,519
SP Strategic Partners Focused Growth Portfolio		58,013,490

Proceeds from Sales:

Portfolio
SP Aggressive Growth Asset Allocation Portfolio	$	55,125,001
SP Balanced Asset Allocation Portfolio		429,050,252
SP Conservative Asset Allocation Portfolio		219,300,086
SP Davis Value Portfolio		75,426,753
SP Growth Asset Allocation Portfolio		347,700,027
SP International Growth Portfolio		419,749,724
SP International Value Portfolio		185,712,723
SP Mid Cap Growth Portfolio		73,589,687
SP PIMCO High Yield Portfolio		476,115,826
SP PIMCO Total Return Portfolio		10,809,985,373
SP Prudential U.S. Emerging Growth Portfolio		116,124,006
SP Small Cap Value Portfolio		150,232,605
SP Strategic Partners Focused Growth Portfolio		69,519,874

The SP PIMCO High Yield and SP PIMCO Total Return Portfolios’ written options activity for the year ended December 31, 2008 were as follows:

	SP PIMCO High Yield Bond					SP PIMCO Total Return Bond
	Number of Contracts/ Swap Notional Amount		Premium			Number of Contracts/ Swap Notional Amount		Premium
Balance at beginning of year	77,700,000		$	1,944,180		406,200,000		$	7,189,460
Written options	60,120,000			991,503		234,500,000			17,745,502
Expired options	(32,320,000	)		(314,573	)	(106,500,000	)		(1,106,973	)
Closed options	(57,100,000	)		(1,304,540	)	(531,100,000	)		(23,808,589	)
Balance at end of year	48,400,000		$	1,316,570		3,100,000		$	19,400

Note 6: Tax Information

After January 2, 2006, all Portfolios are treated as partnerships for tax purposes. The character of the cash distributions made by the partnerships is generally classified as return of capital nontaxable distributions. After each fiscal year each partner will receive information regarding their distributive allocable share of the partnership’s income, gains, losses and deductions.

B9

Prior to January 2, 2006, each Portfolio, which was incorporated as of that date, qualified as a regulated investment company under the Internal Revenue Code and distributed all of its taxable income, including any net realized gains on investments, to shareholders.

With respect to the Portfolios, book cost of assets differs from tax cost of assets as a result of each Portfolio’s adoption of a mark to market method of accounting for tax purposes. Under this method, tax cost of assets will approximate its fair market value.

Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2008, no provision for income tax would be required in the Portfolios’ financial statements. The Portfolios’ federal and state income 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.

Note 7: Capital

The Series Fund offers Class I and Class II shares. Neither Class I nor Class II shares of a Portfolio are subject to any sales charge or redemption charge and are sold at the net asset value of the Portfolio. Class I shares are sold only to certain separate accounts of Prudential to fund benefits under certain variable life insurance and variable annuity contracts (“contracts”). Class II shares are sold only to separate accounts of non-Prudential insurance companies as investment options under certain contracts. The separate accounts invest in shares of the Series Fund through subaccounts that correspond to the Portfolios. The separate accounts will redeem shares of the Series Fund to the extent necessary to provide benefits under the contracts or for such other purposes as may be consistent with the contracts. As of December 31, 2008, the SP Prudential U.S. Emerging Growth, SP Strategic Partners Focused Growth and SP International Growth Portfolios have Class II shares outstanding.

Transactions in shares of beneficial interest of the SP Prudential U.S. Emerging Growth, SP International Growth Portfolios and SP Strategic Partners Focused Growth were as follows:

SP Prudential U.S. Emerging Growth Portfolio:
Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	951,155		$	6,074,026
Series shares issued in reinvestment of distributions	3,888,475			28,074,791
Series shares repurchased	(4,826,937	)		(31,576,609	)
Net increase (decrease) in shares outstanding	12,693		$	2,572,208
Year ended December 31, 2007:
Series shares sold	1,555,189		$	13,349,158
Series shares issued in reinvestment of distributions	2,441,796			20,193,651
Series shares repurchased	(4,874,848	)		(42,326,327	)
Net increase (decrease) in shares outstanding	(877,863	)	$	(8,783,518	)
Class II
Year ended December 31, 2008:
Series shares sold	516		$	2,117
Series shares issued in reinvestment of distributions	7,530			52,710
Series shares repurchased	(6,498	)		(40,442	)
Net increase (decrease) in shares outstanding	1,548		$	14,385
Year ended December 31, 2007:
Series shares sold	10		$	79
Series shares issued in reinvestment of distributions	4,585			36,860
Series shares repurchased	(984	)		(8,413	)
Net increase (decrease) in shares outstanding	3,611		$	28,526

B10

SP International Growth Portfolio:
Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	7,707,426		$	42,123,871
Series shares issued in reinvestment of distributions	11,132,248			70,133,161
Series shares repurchased	(17,448,954	)		(118,140,650	)
Net increase (decrease) in shares outstanding	1,390,720		$	(5,883,618	)
Year ended December 31, 2007:
Series shares sold	10,087,889		$	91,575,100
Series shares issued in reinvestment of distributions	8,319,424			69,883,161
Series shares repurchased	(14,648,601	)		(134,103,634	)
Net increase (decrease) in shares outstanding	3,758,712		$	27,354,627
Class II
Year ended December 31, 2008:
Series shares sold	1,647,667		$	11,225,987
Series shares issued in reinvestment of distributions	897,109			5,535,160
Series shares repurchased	(3,525,674	)		(19,551,361	)
Net increase (decrease) in shares outstanding	(980,898	)	$	(2,790,214	)
Year ended December 31, 2007:
Series shares sold	952,660		$	9,078,707
Series shares issued in reinvestment of distributions	522,747			4,307,437
Series shares repurchased	(618,021	)		(5,365,352	)
Net increase (decrease) in shares outstanding	857,386		$	8,020,792

SP Strategic Partners Focused Growth Portfolio:
Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	421,146		$	2,929,158
Series shares issued in reinvestment of distributions	314,098			2,371,440
Series shares repurchased	(847,025	)		(5,562,995	)
Net increase (decrease) in shares outstanding	(111,781	)	$	(262,397	)
Year ended December 31, 2007:
Series shares sold	311,072		$	2,472,505
Series shares issued in reinvestment of distributions	179,113			1,477,681
Series shares repurchased	(1,023,282	)		(8,046,092	)
Net increase (decrease) in shares outstanding	(533,097	)	$	(4,095,906	)
Class II
Year ended December 31, 2008:
Series shares sold	517,775		$	3,675,144
Series shares issued in reinvestment of distributions	217,879			1,588,341
Series shares repurchased	(1,859,584	)		(11,988,941	)
Net increase (decrease) in shares outstanding	(1,123,930	)	$	(6,725,456	)
Year ended December 31, 2007:
Series shares sold	269,076		$	2,104,214
Series shares issued in reinvestment of distributions	135,932			1,087,456
Series shares repurchased	(1,307,927	)		(10,119,215	)
Net increase (decrease) in shares outstanding	(902,919	)	$	(6,927,545	)

B11

Note 8: Borrowings

The Portfolios, along with other affiliated registered investment companies (the “Funds”), are a party to a Syndicated Credit Agreement (“SCA”) with two banks. The SCA provides for a commitment of $500 million. Interest on any borrowings under the SCA is incurred at contracted market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. Effective October 24, 2008, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Funds pay a commitment fee of .13 of 1% of the unused portion of the renewed SCA. The expiration date of the renewed SCA will be October 23, 2009. For the period from October 26, 2007 through October 23, 2008, the Funds paid a commitment fee of .06 of 1% of the unused portion of the agreement. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions.

The following Portfolios utilized the line of credit during the year ended December 31, 2008. The average balance is for the number of days the Portfolios had utilized the credit facility.

Portfolio	Approximate Average Balance Outstanding		Number of Days Outstanding	Weighted Average Interest Rates		Amount Outstanding at December 31, 2008
SP Balanced Asset Allocation	$	429,000	2	1.22	%	—
SP International Growth		2,443,870	54	3.38		—
SP International Value		2,019,529	51	3.37		—
SP Prudential U.S. Emerging Growth		485,000	1	1.31		—

Note 9: Ownership and Affiliates

As of December 31, 2008, all of Class I shares of each Portfolio were owned of record by The Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

Note 10: New Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

B12

Financial Highlights

	SP Aggressive Growth Asset Allocation Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	10.75		$	10.41		$	9.50		$	8.98		$	7.83
Income (Loss) From Investment Operations:
Net investment income		.09			.10			.10			.18			.02
Net realized and unrealized gain (loss) on investments		(4.24	)		.85			1.22			.71			1.13
Total from investment operations		(4.15	)		.95			1.32			.89			1.15
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.02	)		—	(c)
Distributions from net realized gains		—			—			—			(.35	)		—
Distributions		(1.03	)		(.61	)		(.41	)		—			—
Total dividends and distributions		(1.03	)		(.61	)		(.41	)		(.37	)		—
Net Asset Value, end of year	$	5.57		$	10.75		$	10.41		$	9.50		$	8.98
Total Return(a)		(42.18	)%		9.20	%		14.27	%		10.48	%		14.76	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	107.6		$	205.3		$	201.6		$	188.2		$	136.9
Ratios to average net assets(b):
Expenses		.15	%		.11	%		.05	%		.05	%		.05	%
Net investment income		.98	%		.83	%		1.00	%		2.29	%		.27	%
Portfolio turnover rate		32	%		18	%		28	%		26	%		60	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

(c) Less than $0.005 per share.

	SP Balanced Asset Allocation Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.04		$	11.59		$	10.92		$	10.63		$	9.66
Income From Investment Operations:
Net investment income		.25			.27			.25			.27			.09
Net realized and unrealized gain (loss) on investments		(3.43	)		.81			.89			.49			.97
Total from investment operations		(3.18	)		1.08			1.14			.76			1.06
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.10	)		(.08	)
Distributions from net realized gains		—			—			—			(.37	)		(.01	)
Distributions		(1.04	)		(.63	)		(.47	)		—			—
Total dividends and distributions		(1.04	)		(.63	)		(.47	)		(.47	)		(.09	)
Net Asset Value, end of year	$	7.82		$	12.04		$	11.59		$	10.92		$	10.63
Total Return(a)		(28.55	)%		9.35	%		10.69	%		7.60	%		11.09	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	845.0		$	1,391.0		$	1,406.3		$	1,372.0		$	837.0
Ratios to average net assets(b):
Expenses		.07	%		.06	%		.05	%		.05	%		.05	%
Net investment income		2.19	%		2.01	%		2.23	%		3.40	%		1.37	%
Portfolio turnover rate		28	%		26	%		27	%		21	%		48	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C1

Financial Highlights

	SP Conservative Asset Allocation Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.09		$	11.66		$	11.28		$	11.20		$	10.48
Income (Loss) From Investment Operations:
Net investment income		.33			.36			.35			.38			.14
Net realized and unrealized gain (loss) on investments		(2.61	)		.73			.59			.25			.77
Total from investment operations		(2.28	)		1.09			.94			.63			.91
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.16	)		(.16	)
Distributions from net realized gains		—			—			—			(.39	)		(.03	)
Distributions		(.92	)		(.66	)		(.56	)		—			—
Total dividends and distributions		(.92	)		(.66	)		(.56	)		(.55	)		(.19	)
Net Asset Value, end of year	$	8.89		$	12.09		$	11.66		$	11.28		$	11.20
Total Return(a)		(20.21	)%		9.39	%		8.67	%		5.91	%		8.89	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	421.8		$	621.3		$	632.8		$	642.0		$	459.9
Ratios to average net assets(b):
Expenses		.08	%		.07	%		.05	%		.05	%		.05	%
Net investment income		2.76	%		2.67	%		2.94	%		4.10	%		1.86	%
Portfolio turnover rate		31	%		31	%		33	%		24	%		47	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

	SP Davis Value Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.00		$	11.99		$	10.68		$	10.98		$	9.80
Income (Loss) From Investment Operations:
Net investment income		.12			.15			.09			.09			.10
Net realized and unrealized gain (loss) on investments		(4.62	)		.39			1.49			.82			1.12
Total from investment operations		(4.50	)		.54			1.58			.91			1.22
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.10	)		(.04	)
Distributions from net realized gains		—			—			—			(1.11	)		—
Distributions		(.78	)		(.53	)		(.27	)		—			—
Total dividends and distributions		(.78	)		(.53	)		(.27	)		(1.21	)		(.04	)
Net Asset Value, end of year	$	6.72		$	12.00		$	11.99		$	10.68		$	10.98
Total Return(a)		(39.88	)%		4.58	%		15.02	%		9.52	%		12.53	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	165.3		$	309.0		$	328.0		$	311.7		$	285.5
Ratios to average net assets(b):
Expenses		.82	%		.80	%		.81	%		.82	%		.82	%
Net investment income		1.13	%		1.11	%		.81	%		.87	%		.89	%
Portfolio turnover rate		19	%		9	%		14	%		14	%		34	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C2

Financial Highlights

	SP Growth Asset Allocation Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.59		$	11.17		$	10.23		$	9.80		$	8.71
Income (Loss) From Investment Operations:
Net investment income		.16			.18			.16			.19			.06
Net realized and unrealized gain (loss) on investments		(4.01	)		.85			1.13			.66			1.07
Total from investment operations		(3.85	)		1.03			1.29			.85			1.13
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.06	)		(.04	)
Distributions from net realized gains		—			—			—			(.36	)		—
Distributions		(1.14	)		(.61	)		(.35	)		—			—
Total dividends and distributions		(1.14	)		(.61	)		(.35	)		(.42	)		(.04	)
Net Asset Value, end of year	$	6.60		$	11.59		$	11.17		$	10.23		$	9.80
Total Return(a)		(36.36	)%		9.23	%		12.88	%		9.24	%		13.05	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	694.8		$	1,252.7		$	1,283.9		$	1,212.0		$	662.7
Ratios to average net assets(b):
Expenses		.07	%		.06	%		.05	%		.05	%		.05	%
Net investment income		1.57	%		1.32	%		1.50	%		2.65	%		.94	%
Portfolio turnover rate		29	%		21	%		25	%		18	%		53	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C3

Financial Highlights

	SP International Growth Portfolio
	Class I
	Year Ended December 31,
	2008			2007(c)			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.52		$	8.30		$	7.55		$	6.85		$	5.89
Income (Loss) From Investment Operations:
Net investment income		.10			.10			.05			.04			.02
Net realized and unrealized gain (loss) on investments		(3.74	)		1.50			1.45			1.01			.95
Total from investment operations		(3.64	)		1.60			1.50			1.05			.97
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.04	)		(.01	)
Distributions from net realized gains		—			—			—			(.31	)		—
Distributions		(1.43	)		(1.38	)		(.75	)		—			—
Total dividends and distributions		(1.43	)		(1.38	)		(.75	)		(.35	)		(.01	)
Net Asset Value, end of year	$	3.45		$	8.52		$	8.30		$	7.55		$	6.85
Total Return(a)		(50.30	)%		19.55	%		21.05	%		16.39	%		16.54	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	207.5		$	500.0		$	456.0		$	453.6		$	249.1
Ratios to average net assets(b):
Expenses		.99	%		.94	%		.97	%		.98	%		1.02	%
Net investment income		1.36	%		1.14	%		.69	%		.64	%		.50	%
Portfolio turnover rate		101	%		81	%		111	%		99	%		137	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculation based on average shares outstanding during the year.

	SP International Growth Portfolio
	Class II
	Year Ended December 31,
	2008			2007(c)			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.36		$	8.17		$	7.45		$	6.77		$	5.83
Income (Loss) From Investment Operations:
Net investment income		.07			.07			.02			.03			.01
Net realized and unrealized gain (loss) on investments		(3.65	)		1.47			1.42			.98			.93
Total from investment operations		(3.58	)		1.54			1.44			1.01			.94
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.02	)		—
Distributions from net realized gains		—			—			—			(.31	)		—
Distributions		(1.41	)		(1.35	)		(.72	)		—			—
Total dividends and distributions		(1.41	)		(1.35	)		(.72	)		(.33	)		—
Net Asset Value, end of year	$	3.37		$	8.36		$	8.17		$	7.45		$	6.77
Total Return(a)		(50.49	)%		19.12	%		20.42	%		15.79	%		16.12	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	9.4		$	31.5		$	23.8		$	23.1		$	139.0
Ratios to average net assets(b):
Expenses		1.39	%		1.34	%		1.37	%		1.38	%		1.41	%
Net investment income (loss)		1.10	%		.70	%		.28	%		.56	%		.21	%
Portfolio turnover rate		101	%		81	%		111	%		99	%		137	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculation based on average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

C4

Financial Highlights

	SP International Value Portfolio
	Year Ended December 31,
	2008(d)			2007			2006			2005(d)			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	10.63		$	11.40		$	9.08		$	8.84		$	7.67
Income (Loss) From Investment Operations:
Net investment income		.18			.24			.24			.17			.04
Net realized and unrealized gain (loss) on investments		(4.27	)		1.79			2.35			.94			1.17
Total from investment operations		(4.09	)		2.03			2.59			1.11			1.21
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.04	)		(.04	)
Distributions from net realized gains		—			—			—			(.83	)		—
Distributions		(1.59	)		(2.80	)		(.27	)		—			—
Total dividends and distributions		(1.59	)		(2.80	)		(.27	)		(.87	)		(.04	)
Net Asset Value, end of year	$	4.95		$	10.63		$	11.40		$	9.08		$	8.84
Total Return(a)		(44.06	)%		18.08	%		29.09	%		13.77	%		15.80	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	238.5		$	493.6		$	487.4		$	389.3		$	240.7
Ratios to average net assets(b):
Expenses		1.02	%		.99	%		.99	%		1.06	%		1.10	%(c)
Net investment income		2.32	%		1.80	%		2.28	%		2.08	%		.69	%(c)
Portfolio turnover rate		34	%		46	%		113	%		18	%		159	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Net of expense reimbursement. If the investment advisor had not reimbursed expenses, the annual expense and net investment income ratios would have been 1.23% and .55%, respectively, for the year ended December 31, 2004.

(d) Calculated based upon average shares outstanding during the year.

	SP Mid Cap Growth Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	7.53		$	7.07		$	7.21		$	6.85		$	5.73
Income (Loss) From Investment Operations:
Net investment income (loss)		(.01	)		(.02	)		.02			(.03	)		(.03	)
Net realized and unrealized gain (loss) on investments		(2.64	)		1.16			(.16	)		.39			1.15
Total from investment operations		(2.65	)		1.14			(.14	)		.36			1.12
Less Distributions:
Distributions		(1.45	)		(.68	)		—			—			—
Net Asset Value, end of year	$	3.43		$	7.53		$	7.07		$	7.21		$	6.85
Total Return(a)		(42.56	)%		16.21	%		(1.94	)%		5.26	%		19.55	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	67.5		$	134.8		$	133.1		$	152.9		$	107.5
Ratios to average net assets(b):
Expenses		.89	%		.87	%		.91	%		1.00	%(c)		1.00	%(c)
Net investment income (loss)		(.23	)%		(.30	)%		.20	%		(.56	)%(c)		(.68	)%(c)
Portfolio turnover rate		66	%		156	%		107	%		94	%		79	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Net of expense reimbursement. If the investment advisor had not reimbursed expenses, the annual expense and net investment loss ratios would have been 1.02% and (.58)%, respectively, for the year ended December 31, 2005 and 1.07% and (.75)%, respectively, for the year ended December 31, 2004.

SEE NOTES TO FINANCIAL STATEMENTS.

C5

Financial Highlights

	SP PIMCO High Yield Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	9.83		$	10.33		$	10.25		$	10.67		$	10.53
Income From Investment Operations:
Net investment income		.71			.77			.75			.68			.69
Net realized and unrealized gain (loss) on investments		(3.10	)		(.39	)		.18			(.27	)		.25
Total from investment operations		(2.39	)		.38			.93			.41			.94
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.68	)		(.70	)
Distributions from net realized gains		—			—			—			(.15	)		(.10	)
Distributions		(.74	)		(.88	)		(.85	)		—			—
Total dividends and distributions		(.74	)		(.88	)		(.85	)		(.83	)		(.80	)
Net Asset Value, end of year	$	6.70		$	9.83		$	10.33		$	10.25		$	10.67
Total Return(a)		(25.50	)%		3.77	%		9.51	%		4.03	%		9.32	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	132.0		$	206.0		$	274.4		$	368.6		$	312.5
Ratios to average net assets(b):
Expenses		.74	%		.69	%		.70	%		.67	%		.68	%
Net investment income		7.89	%		7.14	%		6.95	%		6.65	%		6.68	%
Portfolio turnover rate		235	%		98	%		59	%		89	%		53	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

	SP PIMCO Total Return Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.67		$	11.14		$	11.21		$	11.68		$	11.54
Income From Investment Operations:
Net investment income		.64			.55			.45			.37			.22
Net realized and unrealized gain (loss) on investments		(.66	)		.48			(.05	)		(.10	)		.36
Total from investment operations		(.02	)		1.03			.40			.27			.58
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.54	)		(.23	)
Distributions from net realized gains		—			—			—			(.20	)		(.21	)
Distributions		(.59	)		(.50	)		(.47	)		—			—
Total dividends and distributions		(.59	)		(.50	)		(.47	)		(.74	)		(.44	)
Net Asset Value, end of year	$	11.06		$	11.67		$	11.14		$	11.21		$	11.68
Total Return(a)		(.20	)%		9.44	%		3.68	%		2.39	%		5.28	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,041.1		$	1,424.8		$	1,590.3		$	1,538.2		$	1,099.0
Ratios to average net assets(b):
Expenses		1.48	%(c)		.67	%(c)		.66	%(c)		.62	%		.65	%
Net investment income		5.19	%		4.65	%		4.16	%		3.62	%		2.01	%
Portfolio turnover rate		939	%		656	%		539	%		590	%		590	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) The expense ratio reflects the interest and fee expenses related to the interest expenses on investments sold short and liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest and fees is .66%, .64% and .64% for the years ended December 31, 2008, 2007 and 2006, respectively.

SEE NOTES TO FINANCIAL STATEMENTS.

C6

Financial Highlights

	SP Prudential U.S. Emerging Growth Portfolio
	Class I
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.41		$	7.99		$	7.87		$	8.07		$	6.65
Income (Loss) From Investment Operations:
Net investment income (loss)		.04			.02			.03			(.02	)		(.05	)
Net realized and unrealized gain (loss) on investments		(2.64	)		1.31			.71			1.16			1.47
Total from investment operations		(2.60	)		1.33			.74			1.14			1.42
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—	(c)		—
Distributions from net realized gains		—			—			—			(1.34	)		—	(c)
Distributions		(1.23	)		(.91	)		(.62	)		—			—
Total dividends and distributions		(1.23	)		(.91	)		(.62	)		(1.34	)		—	(c)
Net Asset Value, end of year	$	4.58		$	8.41		$	7.99		$	7.87		$	8.07
Total Return(a)		(36.23	)%		16.82	%		9.59	%		17.77	%		21.39	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	112.3		$	205.8		$	202.6		$	194.8		$	128.3
Ratios to average net assets(b):
Expenses		.68	%		.65	%		.67	%		.80	%		.78	%
Net investment income (loss)		.55	%		.24	%		.32	%		(.28	)%		(.53	)%
Portfolio turnover rate		59	%		54	%		70	%		142	%		212	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Less than $0.005 per share.

	SP Prudential U.S. Emerging Growth Portfolio
	Class II
	December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.17		$	7.79		$	7.72		$	7.96		$	6.58
Income (Loss) From Investment Operations:
Net investment income (loss)		.01			(.01	)		(.01	)		(.05	)		(.07	)
Net realized and unrealized gain (loss) on investments		(2.53	)		1.27			.70			1.15			1.45
Total from investment operations		(2.52	)		1.26			.69			1.10			1.38
Less Dividends and Distributions:
Distributions from net realized gains		—			—			—			(1.34	)		—	(c)
Distributions		(1.21	)		(.88	)		(.62	)		—			—
Total dividends and distributions		(1.21	)		(.88	)		(.62	)		(1.34	)		—	(c)
Net Asset Value, end of year	$	4.44		$	8.17		$	7.79		$	7.72		$	7.96
Total Return(a):		(36.24	)%		16.34	%		9.10	%		17.47	%		21.01	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	0.2		$	0.4		$	0.3		$	0.3		$	0.4
Ratios to average net assets(b):
Expenses		1.08	%		1.05	%		1.07	%		1.20	%		1.18	%
Net investment income (loss)		.15	%		(.16	)%		(.04	)%		(.70	)%		(.94	)%
Portfolio turnover rate		59	%		54	%		70	%		142	%		212	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Less than $0.005 per share.

SEE NOTES TO FINANCIAL STATEMENTS.

C7

Financial Highlights

	SP Small Cap Value Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.22		$	13.68		$	14.27		$	15.51		$	12.88
Income (Loss) From Investment Operations:
Net investment income		.12			.13			.10			.07			.08
Net realized and unrealized gain (loss) on investments		(3.47	)		(.64	)		1.78			.52			2.57
Total from investment operations		(3.35	)		(.51	)		1.88			.59			2.65
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.08	)		(.02	)
Distributions from net realized gains		—			—			—			(1.75	)		—	(c)
Distributions		(1.27	)		(.95	)		(2.47	)		—			—
Total dividends and distributions		(1.27	)		(.95	)		(2.47	)		(1.83	)		(.02	)
Net Asset Value, end of year	$	7.60		$	12.22		$	13.68		$	14.27		$	15.51
Total Return(a)		(30.50	)%		(3.63	)%		14.60	%		4.61	%		20.69	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	202.2		$	309.4		$	369.0		$	350.7		$	393.3
Ratios to average net assets(b):
Expenses		.98	%		.96	%		.96	%		.97	%		.96	%
Net investment income		1.17	%		.81	%		.71	%		.49	%		.69	%
Portfolio turnover rate		56	%		45	%		55	%		119	%		127	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Less than $.005 per share.

SEE NOTES TO FINANCIAL STATEMENTS.

C8

Financial Highlights

	SP Strategic Partners Focused Growth Portfolio
	Class I
	Year Ended December 31,
	2008(e)			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.30		$	7.49		$	8.07		$	7.00		$	6.33
Income (Loss) From Investment Operations:
Net investment loss		(.02	)		(.04	)		(.04	)		(.03	)		—	(c)
Net realized and unrealized gain (loss) on investments		(2.98	)		1.18			(.02	)		1.10			.67
Total from investment operations		(3.00	)		1.14			(.06	)		1.07			.67
Less Distributions:
Distributions		(.52	)		(.33	)		(.52	)		—			—
Net Asset Value, end of year	$	4.78		$	8.30		$	7.49		$	8.07		$	7.00
Total Return(a)		(38.42	)%		15.24	%		(.66	)%		15.29	%		10.58	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	21.6		$	38.4		$	38.7		$	38.3		$	30.1
Ratios to average net assets(b):
Expenses		1.23	%		1.15	%		1.15	%		1.07	%(d)		1.01	%(d)
Net investment loss		(.30	)%		(.43	)%		(.47	)%		(.44	)%(d)		(.01	)%(d)
Portfolio turnover rate		62	%		120	%		142	%		110	%		84	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Less than $.005 per share.

(d) Net of expense reimbursement. If the investment advisor had not reimbursed expenses, the annual expense and net investment loss ratios would have been 1.14% and (.51)%, respectively, for the year ended December 31, 2005 and 1.28% and (.28)%, respectively, for the year ended December 31, 2004.

(e) Calculated based on average shares outstanding during the year.

	SP Strategic Partners Focused Growth Portfolio
	Class II
	Year Ended December 31,
	2008(e)			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	8.04		$	7.30		$	7.91		$	6.88		$	6.26
Income (Loss) From Investment Operations:
Net investment loss		(.05	)		(.10	)		(.08	)		(.06	)		(.01	)
Net realized and unrealized gain (loss) on investments		(2.86	)		1.17			(.01	)		1.09			.63
Total from investment operations		(2.91	)		1.07			(.09	)		1.03			.62
Less Distributions:
Distributions		(.52	)		(.33	)		(.52	)		—			—
Net Asset Value, end of year	$	4.61		$	8.04		$	7.30		$	7.91		$	6.88
Total Return(a)		(38.54	)%		14.68	%		(1.07	)%		14.97	%		9.90	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	10.4		$	27.3		$	31.3		$	42.8		$	32.1
Ratios to average net assets(b):
Expenses		1.63	%		1.55	%		1.55	%		1.47	% (c)		1.41	%(c)
Net investment loss		(.70	)%		(.83	)%		(.88	)%		(.84	)%(c)		(.34	)%(c)
Portfolio turnover rate		62	%		120	%		142	%		110	%		84	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Net of expense reimbursement. If the investment advisor had not reimbursed expenses, the annual expense and net investment loss ratios would have been 1.54% and (.91)%, respectively, for the year ended December 31, 2005 and 1.68% and (.61)%, respectively, for the year ended December 31, 2004.

(e) Calculated based on average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

C9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE BOARD OF TRUSTEES AND SHAREHOLDERS

THE PRUDENTIAL SERIES FUND:

We have audited the accompanying statements of assets and liabilities of The Prudential Series Fund (comprised of SP Aggressive Growth Asset Allocation Portfolio, SP Balanced Asset Allocation Portfolio, SP Conservative Asset Allocation Portfolio, SP Davis Value Portfolio, SP Growth Asset Allocation Portfolio, SP International Growth Portfolio, SP International Value Portfolio, SP Mid Cap Growth Portfolio, SP PIMCO High Yield Portfolio, SP PIMCO Total Return Portfolio, SP Prudential U.S. Emerging Growth Portfolio, SP Small Cap Value Portfolio and SP Strategic Partners Focused Growth Portfolio, hereafter referred to as the “Funds”), including the portfolios of investments, as of December 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of December 31, 2008, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 26, 2009

D1

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)

Information about the Trustees and the Officers of the Fund is set forth below. Trustees who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Fund are referred to as “Interested Trustees.” The Trustees 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.

Independent Trustees (1)
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Saul K. Fenster, Ph.D. (75) No. of Portfolios Overseen: 86	Currently President Emeritus of New Jersey Institute of Technology (since 2002); formerly President (1978-2002) of New Jersey Institute of Technology; Commissioner (1998-2002) of the Middle States Association Commission on Higher Education; Commissioner (1985-2002) of the New Jersey Commission on Science and Technology; formerly Director (1998-2005) of Society of Manufacturing Engineering Education Foundation; formerly Director of Prosperity New Jersey; formerly a director or trustee of Liberty Science Center, Research and Development Council of New Jersey, New Jersey State Chamber of Commerce, and National Action Council for Minorities in Engineering.	Member (since 2006), Board of The Ridgefield Foundation and The Leir Foundation.
Delayne Dedrick Gold (70) No. of Portfolios Overseen: 86	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.
W. Scott McDonald, Jr. (71) No. of Portfolios Overseen: 86	Formerly Management Consultant (1997-2004) and of Counsel (2004-2005) at Kaludis Consulting Group, Inc. (company serving higher education); Formerly principal (1995-1997), Scott McDonald Associates; Chief Operating Officer (1991-1995), Fairleigh Dickinson University; Executive Vice President and Chief Operating Officer (1975-1991), Drew University; interim President (1988-1990), Drew University; formerly Director of School, College and University Underwriters Ltd.
Thomas T. Mooney (67) No. of Portfolios Overseen: 86	Formerly Chief Executive Officer, Excell Partners, Inc.; formerly President of the Greater Rochester Metro Chamber of Commerce, Rochester City Manager; formerly Deputy Monroe County Executive.
Thomas M. O’Brien (58) No. of Portfolios Overseen: 86	President and COO (since November 2006) and CEO (since April 2007) of State Bancorp, Inc. and State Bank; Vice Chairman (January 1997-April 2000) of North Fork Bank; President and Chief Executive Officer (December 1984-December 1996) of North Side Savings Bank; formerly President and Chief Executive Officer (May 2000-June 2006) Atlantic Bank of New York.	Formerly Director (December 1996-May 2000) of North Fork Bancorporation, Inc.; Formerly Director (May 2000-April 2006) of Atlantic Bank of New York; Director (since November 2006) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
F. Don Schwartz (73) No. of Portfolios Overseen: 86	Management Consultant (since April 1985).
Interested Trustee (1)
Robert F. Gunia (62) No. of Portfolios Overseen: 148	Chief Administrative Officer (since September 1999) and Executive Vice President (since December 1996) of Prudential Investments LLC; President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (since December 2008) of Prudential Investment Management Services LLC; Executive Vice President (since March 1999) and Treasurer (since May 2000) of Prudential Mutual Fund Services LLC; Chief Administrative Officer, Executive Vice President and Director (since May 2003) of AST Investment Services, Inc.	Director (since May 1989) of The Asia Pacific Fund, Inc.

¹ The year that each Trustee joined the Fund’s Board is as follows: Saul K. Fenster, 1983; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr., 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; F. Don Schwartz, 2003.

E1

Fund Officers (a)(1)
Name, Address and Age	Principal Occupation(s) During the Past Five Years
Position with the Fund
Steve Pelletier (55) President and Principal Executive Officer	President of Prudential Annuities (since September 2008); Chairman and CEO, International Investments, Prudential Financial (since January 1998).
Kathryn L. Quirk (56) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC (PI) and Prudential Mutual Fund Services LLC (PMFS); Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (51) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (50) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (34) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (37) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (46) Assistant Secretary	Director and Corporate Counsel (since May 2006) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (49) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc.(PIM) (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (50) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (46) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001 - 2004).
Noreen M. Fierro (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (49) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (45) Assistant Treasurer	Vice President (since 2005) and Director (2000-2005) within Prudential Mutual Fund Administration.
Peter Parrella (50) 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).
Alan Fu (51) Assistant Treasurer	Vice President – Tax, The Prudential Insurance Company of America (1999 to October 2003); Vice President and Corporate Counsel – Tax, Prudential Financial, Inc. (since October 2003).

^(a) Excludes interested Board Members who also serve as President or Vice President.

¹ The year in which each individual became an Officer of the Fund is as follows: Stephen Pelletier, 2008; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Valerie M. Simpson, 2007; Theresa C. Thompson, 2008; Noreen M. Fierro, 2006; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006; Alan Fu, 2006.

Explanatory Notes to Tables:

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

Unless otherwise noted, the address of all Trustees and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.

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

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

“No. of Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which PI serves as manager include the JennisonDryden Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts, The Target Portfolio Trust, The Prudential Series Fund, Advanced Series Trust, The High Yield Income Fund, Inc., The High Yield Plus Fund, Inc., Nicholas-Applegate Fund, Inc. and Prudential’s Gibraltar Fund, Inc.

E2

Annuities are issued by Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992, and Prudential Annuities Life Assurance Corporation, located at One Corporate Drive, Shelton, CT, 06484. Variable annuities are distributed by Prudential Annuities Distributors, Inc., also located in Shelton, CT. Prudential Annuities is a business unit of Prudential Financial.

Variable life insurance is issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102-3777, Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992. Pruco Life Insurance Company is not licensed to do business in New York. Variable life insurance is offered through Pruco Securities LLC, 751 Broad Street, Newark, NJ 07102-3777.

All are Prudential Financial companies and each is solely responsible for its financial condition and contractual obligations.

Life insurance and annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with costs and complete details. Contract guarantees are based on the claims-paying ability of the issuing company.

The 2008 Audited Financial Statements of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and The Prudential Insurance Company of America are available. You may call 888-778-2888 to obtain a free copy of the audited financial statements of the insurance company that issued your contract.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household (“householding”) in lieu of sending a copy to each Contract Owner who resides in the household. You should be aware that by calling 877-778-5008, you can revoke or “opt out” of householding at any time.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock,” the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

The Prudential Insurance Company of America

751 Broad Street

Newark, NJ 07102-3777

PRST STD POSTAGES & FEES PAID VON HOFFMANN CORPORATION

IFS-A114669    PSF-AR-B    Ed.2/2009

ANNUAL REPORT December 31, 2008

The Prudential Series Fund

n Diversified Conservative Growth Portfolio

Please note that inside is a Prospectus Supplement dated January 21, 2009. This document is separate from and not part of the annual report.

IFS-A114743

This report is one of several that provide financial information about certain investment choices available on variable life insurance and variable annuity contracts. Based on the variable contract you own or the portfolios you invested in, you may receive additional reports that provide financial information on those investment choices. Please refer to your variable life insurance or variable annuity contract prospectus to determine which portfolios are available to you.

This report must be preceded or accompanied by the current prospectuses for the Prudential Series Fund portfolios and the applicable variable life or annuity contract. The prospectuses contains information on the investment objectives, risks, and charges and expenses of the portfolios and the contract and should be read carefully.

The contract’s prospectus contains hypothetical performance illustrations that show the effect of various assumptions regarding the cost of insurance protection. You may also obtain a personalized illustration of historical performance that reflects the cost of your contract’s insurance protection.

A description of the Fund’s proxy voting policies and procedures is available, without charge, upon request. Owners of variable annuity contracts should call 888-778-2888 and owners of variable life insurance contracts should call 800-778-2255 to obtain descriptions of the Fund’s proxy voting policies and procedures. The description is also available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. 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 website of the Commission at www.sec.gov and on the Fund’s website.

The Fund files with the Commission a complete listing of portfolio holdings as of its first and third quarter-end on Form N-Q. Form N-Q is available on the Commission’s website at www.sec.gov or by visiting the Commission’s Public Reference Room. For more information on the Commission’s Public Reference Room, please visit the Commission’s website or call 800-SEC-0330. Form N-Q is also available on the Fund’s website at www.prudential.com or by calling the telephone numbers referenced above.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge upon request by calling 888-778-2888.

This report may include financial information pertaining to certain portfolios that are not available through the variable life insurance policy or variable annuity contract that you have chosen. Please refer to your variable life insurance or variable annuity prospectus to determine which portfolios are available to you.

The Prudential Series Fund Letter to Contract Owners Annual Report December 31, 2008

n DEAR CONTRACT OWNER

Our objective at Prudential is very simple — we strive to help our clients achieve and maintain financial success. Our Prudential Series Fund annual report details this commitment to you as we focus on ways to help you with your financial security. We hope you find it both informative and useful.

While 2008 presented unprecedented challenges to investors, it also proved that Prudential’s strategies around growing and protecting our clients’ wealth have never been more important.

Your financial professional is the best resource to help you understand how market changes affect your investments. Together, you can develop a diversified mix of investments that works best for you and review it periodically to ensure your financial objectives remain on target.

Thank you for selecting Prudential as one of your financial partners. We value your trust and appreciate the opportunity to help you reach your financial goals.

Sincerely,

Steve Pelletier

President,

The Prudential Series Fund January 30, 2009

PRESIDENT

STEVE PELLETIER

The Prudential Series Fund, Diversified Conservative Growth Portfolio Subadvised by: Eagle Asset Management, EARNEST Partners LLC, Jennison Associates LLC, Pacific Investment Management Company LLC
(PIMCO), Prudential Investment Management, Inc., Quantitative Management Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio	-21.56	%	0.82	%	2.87	%
S&P 500 Index	-36.99		-2.19		-2.31
Blended Index	-13.76		2.20		3.14

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION

Portfolio inception: 5/3/1999. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Diversified Conservative Growth Portfolio (the Portfolio) declined more than its custom blended benchmark (the Custom Index).

The subadvisers for the Portfolio and the approximate allocation to each are as follows: Jennison Large Cap Growth (15%), Jennison Large Cap Value (15%), Eagle Small Cap Growth (5%), EARNEST Partners Small Cap Value (5%), PIMCO Total Return Fixed Income (40%), and Prudential Fixed Income Management High Yield Fixed Income (20%).

Differences in asset allocation between the Portfolio and the Custom Index detracted most from the Portfolio’s relative performance. Specifically, the Portfolio had exposure to high yield corporate (“junk”) bonds, which are rated below investment grade, and an underweight position in investment-grade bonds. Both detracted from its return as high yield bonds underperformed the Custom Index in the risk-averse investment environment, while investment-grade bonds outperformed the Custom Index.

The PIMCO Total Return Fixed Income portion underperformed the Barclays Capital U.S. Aggregate Bond Index (the Index). PIMCO Total Return Bond had a larger exposure than the Index to mortgage pass-through securities of federal agencies, which lagged the U.S. Treasury market in 2008. As the financial system deleveraged—sold positions to pay off debt—large financial institutions shed their most liquid assets (mostly government agency mortgage-backed securities). The PIMCO portion also held financial sector bonds in Lehman Brothers Holdings, which further detracted. Finally, PIMCO Total Return Bond was positioned to benefit from an anticipated normalization in the market for interest rate swaps, which are agreements between two parties to exchange one stream of interest payments for another over a set period of time. But market conditions deteriorated in November, detracting from performance.

The Jennison Large Cap Value portion also hurt performance, mainly due to its holdings in the energy, telecommunications, and consumer discretionary sectors. An underweight in financials benefited relative return. Investors favored companies with more stable balance sheets and consistent earnings. Jennison Large Cap Value’s aggressive risk posture, its overweight in leveraged stocks (companies with above-market debt-to-asset ratios) and high earnings variability (a measure of volatility in corporate earnings and cash flow) combined to negatively affect performance. Stock selection was helpful in healthcare, particularly in a medical services company. The value portion also outperformed in the consumer staples, industrials, and information technology sectors. A smaller exposure to materials was also positive.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Blended Index consists of the Russell 3000 Index (40%), a market cap-weighted index that measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market, and Barclays Capital U.S. Aggregate Bond Index (60%), an unmanaged index comprised of more than 5,000 government and corporate bonds. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index or average. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund Presentation of Portfolio Holdings — unaudited December 31, 2008

Diversified Conservative Growth
Five Largest Holdings    (% of Net Assets)
Federal Home Loan Mortgage Corp. 5.50%, TBA	6.1%
Federal National Mortgage Assoc. 4.50%, TBA	5.1%
Federal National Mortgage Assoc. 5.00%, TBA	4.9%
Government National Mortgage Assoc. 6.00%, TBA	4.7%
Government National Mortgage Assoc. 6.50%, TBA	3.7%

For a complete list of holdings, please refer to the Schedule of Investments section of this report. Holdings/Issues/Sectors/Industries are subject to change.

The Prudential Series Fund Fees and Expenses — unaudited December 31, 2008

As a contract owner investing in Portfolios of the Fund through a variable annuity or variable life contract, you incur ongoing costs, including management fees, and other Portfolio expenses. 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 investment options. This example does not reflect fees and charges under your variable annuity or variable life contract. If contract charges were included, the costs shown below would be higher. Please consult the prospectus for your contract for more information about contract fees and charges.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2008 through December 31, 2008.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the Portfolio expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six-Month Period” to estimate the Portfolio expenses you paid on your account during this period. As noted above, the table does not reflect variable contract fees and charges.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio and other investment options. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other investment options.

Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any contract fees and charges, such as sales charges (loads), insurance charges or administrative charges. Therefore the second line of the table is useful to compare ongoing investment option costs only, and will not help you determine the relative total costs of owning different contracts. In addition, if these contract fee and charges were included, your costs would have been higher.

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio based on the Six-Month period		Expenses Paid During the Six-Month period
Diversified Conservative Growth (Class I)	Actual	$	1,000.00	$	816.50	1.25	%	$	5.71
	Hypothetical	$	1,000.00	$	1,018.85	1.25	%	$	6.34

Portfolio 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 December 31, 2008, and divided by the 366 days in the Portfolio's fiscal year ended December 31, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 130.4%
COMMON STOCKS — 38.9%	Shares	Value (Note 2)
Aerospace & Defense — 0.8%
AAR Corp.*	3,500	$	64,435
Lockheed Martin Corp.	2,200		184,976
Moog, Inc. (Class A Stock)*	2,575		94,168
Raytheon Co.	3,909		199,515
Teledyne Technologies, Inc.*	1,900		84,645
			627,739
Auto Components — 0.1%
Goodyear Tire & Rubber Co. (The)*	13,200		78,804
Banks — 0.2%
Pacific Capital Bancorp	3,300		55,704
United Bankshares, Inc.	2,700		89,694
			145,398
Beverages — 0.6%
Coca-Cola Co. (The)	5,900		267,093
PepsiCo, Inc.	4,700		257,419
			524,512
Biotechnology — 2.2%
Celgene Corp.*	5,400		298,512
Cubist Pharmaceuticals, Inc.*	2,890		69,822
Genentech, Inc.*	6,500		538,915
Genzyme Corp.*	1,300		86,281
Gilead Sciences, Inc.*	16,200		828,468
Myriad Genetics, Inc.*	595		39,425
			1,861,423
Building & Construction — 0.1%
Watsco, Inc.	1,400		53,760
Business Services — 0.2%
ICON PLC, ADR (Ireland)*	4,450		87,620
URS Corp.*	2,600		106,002
			193,622
Capital Markets — 1.5%
Bank of New York Mellon Corp. (The)	8,526		241,541
Goldman Sachs Group, Inc. (The)	4,300		362,877
Jefferies Group, Inc.	4,800		67,488
Lazard Ltd. (Class A Stock) (Bermuda)	290		8,625
Morgan Stanley	11,800		189,272
Schwab, (Charles) Corp. (The)	17,700		286,209
TD Ameritrade Holding Corp.*	9,300		132,525
			1,288,537
Chemicals — 0.7%
Huntsman Corp.	15,530		53,423
Intrepid Potash, Inc.*	3,295		68,437
Monsanto Co.	4,300		302,505
Quaker Chemical Corp.	1,670		27,472
Scotts Miracle-Gro Co. (The) (Class A Stock)	2,500		74,300
Terra Industries, Inc.	2,790		46,509
Valspar Corp. (The)	2,700		48,843
			621,489
Commercial Banks — 0.3%
Astoria Financial Corp.	4,350		71,688
East West Bancorp, Inc.	4,500		71,865

COMMON STOCKS (continued)	Shares	Value (Note 2)
Commercial Banks (continued)
First Commonwealth Financial Corp.	3,420	$	42,340
SunTrust Banks, Inc.	1,700		50,218
			236,111
Commercial Services — 0.4%
American Public Education, Inc.*	1,085		40,351
Corrections Corp. of America*	4,230		69,203
FTI Consulting, Inc.*	2,470		110,359
GEO Group, Inc. (The)*	4,590		82,758
			302,671
Commercial Services & Supplies — 0.7%
Global Payments, Inc.	3,300		108,207
Monster Worldwide, Inc.*	3,470		41,952
Waste Connections, Inc.*	3,570		112,705
Waste Management, Inc.	9,600		318,144
			581,008
Communication Equipment — 1.6%
Cisco Systems, Inc.*	18,500		301,550
EMS Technologies, Inc.*	6,150		159,100
QUALCOMM, Inc.	17,100		612,693
Research In Motion Ltd. (Canada)*	7,200		292,176
			1,365,519
Computer Services & Software — 0.4%
ANSYS, Inc.*	4,115		114,768
Compellent Technologies, Inc.*	8,660		84,262
Hansen Medical, Inc.*	1,310		9,458
Netezza Corp.*	6,905		45,849
SRA International, Inc. (Class A Stock)*	3,900		67,275
			321,612
Computers & Peripherals — 1.0%
Apple, Inc.*	3,301		281,740
Hewlett-Packard Co.	10,500		381,045
International Business Machines Corp.	1,700		143,072
			805,857
Construction — 0.2%
Granite Construction, Inc.	1,900		83,467
Texas Industries, Inc.	1,445		49,852
			133,319
Consumer Products & Services — 0.1%
Toro Co.	2,500		82,500
Distribution/Wholesale
MWI Veterinary Supply, Inc.*	720		19,411
Diversified Consumer Services — 0.6%
Career Education Corp.*	10,000		179,400
H&R Block, Inc.	15,700		356,704
			536,104
Diversified Financial Services — 0.6%
Eaton Vance Corp.	4,000		84,040
JPMorgan Chase & Co.	3,200		100,896
Raymond James Financial, Inc.	5,075		86,935
SLM Corp.*	21,800		194,020
Sterling Financial Corp.	2,900		25,520
Student Loan Corp. (The)	500		20,500
			511,911

SEE NOTES TO FINANCIAL STATEMENTS.

A1

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Diversified Manufacturing — 0.1%
Ameron International Corp.	925	$	58,201
Education
K12, Inc.*	1,070		20,063
Electric Utilities — 0.2%
Entergy Corp.	2,500		207,825
Electronic Components — 0.1%
Universal Electronics, Inc.*	5,720		92,778
Electronic Equipment & Instruments — 0.3%
Checkpoint Systems, Inc.*	3,700		36,408
Coherent, Inc.*	4,050		86,913
FLIR Systems, Inc.*	5,300		162,604
			285,925
Electronics — 0.1%
Dolby Laboratories, Inc. (Class A Stock)*	1,395		45,700
Energy Equipment & Services — 0.5%
National Oilwell Varco, Inc.*	5,700		139,308
Schlumberger Ltd. (Netherlands)	6,400		270,912
			410,220
Energy-Other — 0.1%
Headwaters, Inc.*	3,469		23,416
McMoRan Exploration Co.*	2,585		25,333
Swift Energy Co.*	3,400		57,154
			105,903
Entertainment & Leisure — 0.3%
Bally Technologies, Inc.*	4,770		114,623
Life Time Fitness, Inc.*	3,400		44,030
Shuffle Master, Inc.*	10,800		53,568
WMS Industries, Inc.*	2,635		70,882
			283,103
Environmental Control — 0.1%
Republic Services, Inc.	3,375		83,666
Financial Services — 0.1%
Investment Technology Group, Inc.*	2,240		50,893
Lender Processing Services, Inc.	1,280		37,696
			88,589
Food & Staples Retailing — 2.2%
Costco Wholesale Corp.	4,100		215,250
CVS Caremark Corp.	21,400		615,036
Kroger Co. (The)	10,700		282,587
Wal-Mart Stores, Inc.	13,100		734,386
			1,847,259
Food Products — 1.1%
Cadbury PLC (United Kingdom)	7,100		61,810
Cadbury PLC, ADR (United Kingdom)	7,712		275,087
ConAgra Foods, Inc.	16,500		272,250
Tyson Foods, Inc. (Class A Stock)	31,600		276,816
			885,963
Healthcare Equipment & Supplies — 1.3%
Alcon, Inc. (Switzerland)	3,900		347,841
Baxter International, Inc.	7,900		423,361

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies (continued)
Cutera, Inc.*	5,135	$	45,547
SurModics, Inc.*	1,860		47,002
Thoratec Corp.*	6,330		205,662
			1,069,413
Healthcare Providers & Services — 2.2%
Aetna, Inc.	7,800		222,300
Amedisys, Inc.*	2,835		117,199
AMERIGROUP Corp.*	3,400		100,368
Centene Corp.*	4,845		95,495
Covance, Inc.*	2,000		92,060
Eclipsys Corp.*	10,590		150,272
Healthways, Inc.*	4,000		45,920
Lincare Holdings, Inc.*	2,025		54,533
Medco Health Solutions, Inc.*	6,300		264,033
Omnicare, Inc.	9,400		260,944
Pediatrix Medical Group, Inc.*	2,200		69,740
Pharmaceutical Product Development, Inc.	4,800		139,248
UnitedHealth Group, Inc.	7,400		196,840
			1,808,952
Hotels, Restaurants & Leisure — 0.1%
Brinker International, Inc.	3,100		32,674
Sonic Corp.*	3,900		47,463
			80,137
Household Durables — 0.1%
Meritage Homes Corp.*	2,100		25,557
Snap-on, Inc.	2,100		82,698
			108,255
Household Products — 0.8%
Colgate-Palmolive Co.	6,100		418,094
Kimberly-Clark Corp.	4,700		247,878
			665,972
Independent Power Producers & Energy Traders — 0.4%
NRG Energy, Inc.*	13,400		312,622
Insurance — 1.1%
Allstate Corp. (The)	4,600		150,696
AXIS Capital Holdings Ltd. (Bermuda)	5,900		171,808
Berkshire Hathaway, Inc. (Class B Stock)*	38		122,132
Delphi Financial Group, Inc. (Class A Stock)	3,325		61,313
Loews Corp.	6,600		186,450
Protective Life Corp.	2,000		28,700
State Auto Financial Corp.	2,800		84,168
United Fire & Casualty Co.	1,600		49,712
XL Capital Ltd. (Class A Stock) (Cayman Islands)	24,800		91,760
			946,739
Internet — 0.1%
Digital River, Inc.*	2,300		57,040
Internet & Catalog Retail — 0.6%
Amazon.com, Inc.*	5,900		302,552
HSN, Inc.*	3,940		28,644

SEE NOTES TO FINANCIAL STATEMENTS.

A2

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Internet & Catalog Retail (continued)
Ticketmaster*	21,490	$	137,966
			469,162
Internet Software & Services — 1.2%
Google, Inc. (Class A Stock)*	1,800		553,770
InterActiveCorp*	22,650		356,284
Internet Capital Group, Inc.*	2,385		12,998
TIBCO Software, Inc.*	17,720		91,967
US Auto Parts Network, Inc.*	1,640		2,280
			1,017,299
IT Services — 0.6%
Infosys Technologies Ltd., ADR (India)	5,500		135,135
Visa, Inc. (Class A Stock)	7,700		403,865
			539,000
Life Science Tools & Services — 0.3%
Thermo Fisher Scientific, Inc.*	7,000		238,490
Machinery & Equipment — 0.1%
Bucyrus International, Inc. (Class A Stock)	4,000		74,080
Manufacturing — 0.2%
Harsco Corp.	2,900		80,272
Hexcel Corp.*	7,000		51,730
			132,002
Media — 1.3%
Comcast Corp. (Class A Stock)	23,650		399,212
Discovery Communications, Inc., (Class A Stock)*	8,900		126,024
Liberty Global, Inc. (Class C Stock)*	15,983		242,622
Lions Gate Entertainment Corp. (Canada)*	9,470		52,085
Sirius XM Radio, Inc.*	282,320		33,879
Walt Disney Co. (The)	8,700		197,403
Wiley, (John) & Sons, Inc. (Class A Stock)	1,935		68,847
			1,120,072
Medical Supplies & Equipment — 0.3%
Quality Systems, Inc.	3,100		135,222
ResMed, Inc.*	1,150		43,102
Vital Images, Inc.*	2,555		35,540
			213,864
Metals & Mining — 0.2%
Northwest Pipe Co.*	2,370		100,986
Timken Co.	3,900		76,557
			177,543
Multi-Line Retail
Target Corp.	900		31,077
Multi-Utilities — 0.3%
Sempra Energy	6,500		277,095
Office Electronics — 0.2%
Xerox Corp.	22,500		179,325
Office Equipment — 0.1%
School Specialty, Inc.*	4,305		82,312

COMMON STOCKS (continued)	Shares	Value (Note 2)
Oil & Gas Exploration/Production — 0.1%
Core Laboratories NV (Netherlands)	1,210	$	72,431
Oil, Gas & Consumable Fuels — 3.1%
Apache Corp.	1,700		126,701
Cabot Oil & Gas Corp.	4,600		119,600
Denbury Resources, Inc.*	2,935		32,050
Devon Energy Corp.	3,000		197,130
EOG Resources, Inc.	2,900		193,082
Hess Corp.	2,300		123,372
Lufkin Industries, Inc.	2,555		88,148
Occidental Petroleum Corp.	7,900		473,921
Petroleo Brasileiro SA, ADR (Brazil)	5,500		134,695
Petroleum Development Corp.*	705		16,969
Southwestern Energy Co.*	5,400		156,438
St. Mary Land & Exploration Co.	3,300		67,023
Suncor Energy, Inc. (Canada)	6,000		117,000
WGL Holdings, Inc.	2,500		81,725
Williams Cos., Inc.	16,300		236,024
XTO Energy, Inc.	11,300		398,551
			2,562,429
Paper & Forest Products — 0.1%
Domtar Corp. (Canada)*	43,000		71,810
Pharmaceuticals — 2.5%
Abbott Laboratories	7,200		384,264
American Medical Systems Holdings, Inc.*	9,355		84,101
BioMarin Pharmaceutical, Inc.*	2,430		43,254
Herbalife Ltd. (Cayman Islands)	2,000		43,360
Mylan, Inc.*	23,600		233,404
Onyx Pharmaceuticals, Inc.*	595		20,325
Roche Holding AG, ADR (Switzerland)	1,300		99,515
Schering-Plough Corp.	16,100		274,183
Shire PLC, ADR (United Kingdom)	2,890		129,414
Teva Pharmaceutical Industries Ltd., ADR (Israel)	8,700		370,359
Wyeth	11,109		416,699
			2,098,878
Real Estate Investment Trust
Hovnanian Enterprises, Inc. (Class A Stock)*	3,700		6,364
Restaurants — 0.1%
BJ’s Restaurants, Inc.*	4,665		50,242
Retail & Merchandising — 0.3%
Cash America International, Inc.	5,423		148,319
Genesco, Inc.*	6,295		106,511
			254,830
Road & Rail — 0.1%
Union Pacific Corp.	1,000		47,800
Semiconductors — 0.1%
Macrovision Solutions Corp.*	5,270		66,666
OYO Geospace Corp.*	2,745		47,955
			114,621
Semiconductors & Semiconductor Equipment — 0.4%
Advanced Energy Industries, Inc.*	4,265		42,437
Itron, Inc.*	1,760		112,183

SEE NOTES TO FINANCIAL STATEMENTS.

A3

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

COMMON STOCKS (continued)	Shares	Value (Note 2)
Semiconductors & Semiconductor Equipment (continued)
Marvell Technology Group Ltd. (Bermuda)*	23,900	$	159,413
NVIDIA Corp.*	5,800		46,806
Spansion, Inc. (Class A Stock)*	40,900		7,742
			368,581
Software — 1.8%
Adobe Systems, Inc.*	9,700		206,513
CA, Inc.	21,400		396,542
Factset Research Systems, Inc.	1,740		76,978
Microsoft Corp.	16,900		328,536
Oracle Corp.*	7,200		127,656
Symantec Corp.*	29,200		394,784
			1,531,009
Specialty Retail — 0.2%
Aaron Rents, Inc.	2,900		77,198
CarMax, Inc.*	8,700		68,556
			145,754
Technology
Sanmina-SCI Corp.*	18,200		8,554
Telecommunications — 0.1%
Arris Group, Inc.*	9,300		73,935
Textiles, Apparel & Luxury Goods — 0.3%
NIKE, Inc. (Class B Stock)	4,200		214,200
Phillips-Van Heusen Corp.	2,800		56,364
			270,564

COMMON STOCKS (continued)	Shares	Value (Note 2)
Thrifts & Mortgage Finance — 0.2%
People’s United Financial, Inc.	7,250	$	129,267
Utilities — 0.1%
ONEOK, Inc.	2,300		66,976
Wireless Telecommunication Services — 0.4%
NII Holdings, Inc.*	13,100		238,158
Sprint Nextel Corp.*	30,226		55,314
Virgin Mobile USA, Inc. (Class A Stock)*	23,100		19,404
			312,876
TOTAL COMMON STOCKS (cost $34,385,688)			32,493,874
PREFERRED STOCKS — 0.2%
Diversified Financial Services — 0.1%
SLM Corp., Series C, 7.25%	130		59,881
Pharmaceuticals — 0.1%
Mylan, Inc., 6.5%, CVT	150		98,855
TOTAL PREFERRED STOCKS (cost $150,358)			158,736
WARRANT*	Units
Telecom
Sirius XM Radio, Inc., expiring 03/15/10(g) (cost $0)	100		—

CORPORATE BONDS — 33.6%	Moody’s Ratings† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#
Aerospace & Defense — 1.0%
BE Aerospace, Inc., Sr. Unsec’d. Notes	Ba3	8.50%	07/01/18	$	100	90,000
DRS Technologies, Inc., Gtd. Notes	A3	6.625%	02/01/16		75	75,000
DRS Technologies, Inc., Gtd. Notes	Baa1	7.625%	02/01/18		130	130,000
Esterline Technologies Corp., Gtd. Notes	B1	7.75%	06/15/13		125	108,750
L-3 Communications Corp., Gtd. Notes	Ba3	5.875%	01/15/15		50	45,000
L-3 Communications Corp., Gtd. Notes	Ba3	6.375%	10/15/15		100	93,500
L-3 Communications Corp., Gtd. Notes	Ba3	7.625%	06/15/12		100	97,750
Moog, Inc., Sr. Sub. Notes	Ba3	6.25%	01/15/15		150	120,000
Moog, Inc., Sr. Sub. Notes, 144A	Ba3	7.25%	06/15/18		75	60,000
TransDigm, Inc., Gtd. Notes	B3	7.75%	07/15/14		75	61,500
						881,500
Airlines — 0.1%
AMR Corp., Sr. Unsec’d. Notes	CCC+(d)	10.40%	03/10/11		100	48,125
Continental Airlines, Inc., Pass-Through Certificates	Ba2	6.748%	03/15/17		22	15,315
						63,440
Automobile Manufacturers — 0.1%
DaimlerChrysler NA Holding Corp., Gtd. Notes, MTN	A3	5.75%	09/08/11		100	84,454
Automotive — 0.3%
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes	Caa1	7.25%	10/25/11		140	102,271
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes	Caa1	7.875%	06/15/10		80	64,015
Lear Corp., Gtd. Notes	Caa2	8.75%	12/01/16		30	8,700
TRW Automotive, Inc., Gtd. Notes, 144A	B2	7.25%	03/15/17		75	38,250
Visteon Corp., Sr. Unsec’d. Notes	Caa3	7.00%	03/10/14		40	6,000
						219,236

SEE NOTES TO FINANCIAL STATEMENTS.

A4

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Cable — 0.7%
CCH II LLC/CCH II Capital Corp., Gtd. Notes, 144A	Caa2	10.25%	10/01/13	$	50	$	17,000
CSC Holdings, Inc., Sr. Unsec’d. Notes	B1	6.75%	04/15/12		150		137,250
CSC Holdings, Inc., Sr. Unsec’d. Notes	B1	8.125%	07/15/09		75		74,625
CSC Holdings, Inc., Sr. Unsec’d. Notes	B1	8.125%	08/15/09		50		49,750
Mediacom Broadband LLC, Sr. Unsec’d. Notes	B3	8.50%	10/15/15		25		16,281
Shaw Communications, Inc., Sr. Unsec’d. Notes (Canada)	Ba1	7.20%	12/15/11		59		55,755
Shaw Communications, Inc., Sr. Unsec’d. Notes (Canada)	Ba1	8.25%	04/11/10		100		98,500
Videotron Ltee, Gtd. Notes, 144A (Canada)	Ba2	9.125%	04/15/18		125		116,250
							565,411
Capital Goods — 2.7%
Actuant Corp., Gtd. Notes	Ba2	6.875%	06/15/17		50		37,625
ALH Finance LLC, Gtd. Notes	B3	8.50%	01/15/13		75		57,750
Allied Waste North America, Inc., Sr. Sec’d. Notes	NR	5.75%	02/15/11		60		56,250
Allied Waste North America, Inc., Sr. Sec’d. Notes	BBB(d)	6.125%	02/15/14		125		113,125
Allied Waste North America, Inc., Sr. Sec’d. Notes	NR	6.875%	06/01/17		75		69,750
Allied Waste North America, Inc., Sr. Sec’d. Notes	NR	7.125%	05/15/16		50		45,500
Allied Waste North America, Inc., Sr. Sec’d. Notes	NR	7.875%	04/15/13		50		47,500
Ashtead Capital, Inc., Sec’d. Notes, 144A	B1	9.00%	08/15/16		100		51,500
Ashtead Holdings PLC, Sec’d. Notes, 144A (United Kingdom)	B1	8.625%	08/01/15		75		39,375
Baldor Electric Co., Gtd. Notes	B3	8.625%	02/15/17		120		89,400
Blount, Inc., Gtd. Notes	B2	8.875%	08/01/12		125		115,625
Columbus Mckinnon Corp., Gtd. Notes	B1	8.875%	11/01/13		200		168,000
GrafTech Finance, Inc., Gtd. Notes	Ba3	10.25%	02/15/12		10		9,100
Hertz Corp. (The), Gtd. Notes	B1	8.875%	01/01/14		270		166,050
Interline Brand, Inc., Gtd. Notes	B3	8.125%	06/15/14		75		59,250
JohnsonDiversey Holdings, Inc., Disc. Notes	Caa1	10.67%	05/15/13		75		52,500
JohnsonDiversey, Inc., Gtd. Notes	B2	9.625%	05/15/12		75		61,500
Mobile Mini, Inc., Gtd. Notes	B2	6.875%	05/01/15		45		30,600
RBS Global, Inc./Rexnord Corp., Gtd. Notes	B3	9.50%	08/01/14		110		81,950
Rental Service Corp., Gtd. Notes	Caa1	9.50%	12/01/14		110		60,500
SPX Corp., Sr. Unsec’d. Notes, 144A	Ba2	7.625%	12/15/14		250		217,500
Stena AB, Sr. Unsec’d. Notes (Sweden)	Ba2	7.50%	11/01/13		150		99,187
Terex Corp., Gtd. Notes	Ba1	7.375%	01/15/14		125		108,750
Terex Corp., Sr. Sub. Notes	Ba3	8.00%	11/15/17		125		106,250
United Rentals North America, Inc., Gtd. Notes	B1	6.50%	02/15/12		135		106,650
Valmont Industries, Inc., Gtd. Notes	Ba2	6.875%	05/01/14		225		191,250
							2,242,437
Capital Markets — 0.9%
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	6.25%	09/01/17		300		290,891
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.75%	10/18/16		500		420,136
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	6.00%	04/28/15		100		86,273
							797,300
Chemicals — 0.6%
Huntsman LLC, Sec’d. Notes	Ba1	11.625%	10/15/10		250		218,750
Koppers, Inc., Sr. Sec’d. Notes	Ba3	9.875%	10/15/13		152		139,840
Momentive Performance Materials, Inc., Gtd. Notes	B3	9.75%	12/01/14		50		21,250
Momentive Performance Materials, Inc., Gtd. Notes	Caa2	11.50%	12/01/16		25		7,375
Mosaic Co. (The), Sr. Unsec’d. Notes, 144A	Baa3	7.375%	12/01/14		25		20,500
Mosaic Co. (The), Sr. Unsec’d. Notes, 144A	Baa3	7.625%	12/01/16		25		20,000
Nalco Co., Gtd. Notes	B1	7.75%	11/15/11		75		72,000
							499,715
Commercial Banks — 0.6%
SunTrust Bank/Atlanta GA, FDIC Gtd. Notes	Aaa	3.00%	11/16/11		500		517,052

SEE NOTES TO FINANCIAL STATEMENTS.

A5

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Consumer — 0.4%
Mac-Gray Corp., Gtd. Notes	B3	7.625%		08/15/15	$	50	$	46,000
Realogy Corp., Gtd. Notes	Ca	10.50%		04/15/14		175		30,188
Realogy Corp., Gtd. Notes, PIK	Ca	11.00%		04/15/14		37		4,226
Service Corp. International, Sr. Unsec’d. Notes	B1	6.75%		04/01/15		50		39,500
Service Corp. International, Sr. Unsec’d. Notes	B1	6.75%		04/01/16		50		38,000
Service Corp. International, Sr. Unsec’d. Notes	B1	7.00%		06/15/17		50		37,500
Service Corp. International, Sr. Unsec’d. Notes	B1	7.375%		10/01/14		50		42,500
Stewart Enterprises, Inc., Gtd. Notes	Ba3	6.25%		02/15/13		75		58,125
Ticketmaster, Gtd. Notes, 144A	Ba3	10.75%		08/01/16		50		27,000
								323,039
Diversified Financial Services — 1.2%
Citigroup, Inc., Jr. Sub. Notes	Baa2	8.40%	(c)	04/29/49		600		396,174
Merrill Lynch & Co., Inc., Notes, MTN	Aa3	6.875%		04/25/18		500		523,013
Petroleum Export Ltd., Sr. Notes, 144A (Cayman Islands) (original cost $33,333; purchased 07/14/05)(f)(g)	Baa1	4.623%		06/15/10		33		32,805
Petroleum Export Ltd., Sr. Notes, 144A (Cayman Islands) (original cost $66,666; purchased 07/14/05)(f)(g)	Baa1	4.633%		06/15/10		67		65,616
								1,017,608
Electric — 1.9%
AES Corp. (The), Sr. Unsec’d. Notes	B1	7.75%		03/01/14		25		22,000
AES Corp. (The), Sr. Unsec’d. Notes	B1	8.00%		10/15/17		125		102,500
AES Eastern Energy LP, Pass-Through Certificates	Ba1	9.00%		01/02/17		115		101,889
Dynegy Holdings, Inc., Sr. Unsec’d. Notes	B2	7.50%		06/01/15		125		87,500
Dynegy Roseton / Danskammer Pass-Through Trust, Series B, Pass-Through Certificates	Ba3	7.67%		11/08/16		25		17,766
Energy Future Holdings Corp., Gtd. Notes, PIK, 144A	B3	11.25%		11/01/17		75		36,375
Illinois Power Co., Sr. Sec’d. Notes	Baa3	6.25%		04/01/18		500		446,550
NRG Energy, Inc., Gtd. Notes	B1	7.25%		02/01/14		50		46,750
NRG Energy, Inc., Gtd. Notes	B1	7.375%		02/01/16		85		79,050
Orion Power Holdings, Inc., Sr. Unsec’d. Notes	Ba3	12.00%		05/01/10		140		140,000
PSE&G Energy Holdings LLC, Sr. Unsec’d. Notes	Ba3	8.50%		06/15/11		125		117,827
Reliant Energy Mid-Atlantic Power Holdings LLC, Series B, Pass-Through Certificates(g)	Ba1	9.237%		07/02/17		53		48,275
Sithe/Independence Funding Corp., Sr. Sec’d. Notes	Ba2	9.00%		12/30/13		84		71,587
Tenaska Alabama Partners LP, Sr. Sec’d. Notes, 144A	Ba2	7.00%		06/30/21		89		69,652
Texas Competitive Electric Holdings Co. LLC, Gtd. Notes, 144A	B3	10.50%		11/01/15		325		230,750
								1,618,471
Energy – Other — 0.9%
Cie Generale de Geophysique-Veritas, Gtd. Notes (France)	Ba3	7.50%		05/15/15		25		15,500
McMoRan Exploration Co., Gtd. Notes	Caa1	11.875%		11/15/14		100		71,000
Newfield Exploration Co., Sr. Sub. Notes	Ba3	6.625%		04/15/16		50		39,750
Newfield Exploration Co., Sr. Sub. Notes	Ba3	7.125%		05/15/18		100		79,000
OPTI Canada, Inc., Sec’d. Notes (Canada)	B2	7.875%		12/15/14		100		51,000
OPTI Canada, Inc., Sec’d. Notes (Canada)	B2	8.25%		12/15/14		50		27,000
Petrohawk Energy Corp., Gtd. Notes	B3	9.125%		07/15/13		50		40,500
Petrohawk Energy Corp., Gtd. Notes, 144A	B3	7.875%		06/01/15		75		55,500
Petroplus Finance Ltd., Gtd. Notes, 144A (Bermuda)	B1	6.75%		05/01/14		75		47,625
Petroplus Finance Ltd., Gtd. Notes, 144A (Bermuda)	B1	7.00%		05/01/17		75		45,750
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.65%		03/15/17		95		67,792
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%		05/01/18		100		69,940
Plains Exploration & Production Co., Gtd. Notes	B1	7.00%		03/15/17		65		44,525
Plains Exploration & Production Co., Gtd. Notes	B1	7.625%		06/01/18		50		34,250
SandRidge Energy, Inc., Gtd. Notes, 144A	B3	8.00%		06/01/18		100		55,500
Swift Energy Co., Gtd. Notes	B1	7.125%		06/01/17		50		28,250
								772,882

SEE NOTES TO FINANCIAL STATEMENTS.

A6

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Financial – Bank & Trust — 4.9%
American Express Bank FSB, Sr. Unsec’d. Notes	A1	5.50%		04/16/13	$	1,000	$	947,240
ANZ National International Ltd., Bank Gtd. Notes, 144A (New Zealand) (original cost $499,530; purchased 07/09/08)(f)(g)	Aa2	6.20%		07/19/13		500		483,780
Barclays Bank PLC, Sub. Notes, 144A (United Kingdom) (original cost $500,000; purchased 04/18/08)(f)(g)	Aa2	7.70%	(c)	04/29/49		500		330,630
Deutsche Bank AG, Sr. Unsec’d. Notes (Germany)	Aa1	4.875%		05/20/13		900		883,611
Regions Bank, FDIC Gtd. Notes	Aaa	3.25%		12/09/11		500		520,180
UBS AG, Sr. Unsec’d. Notes (Switzerland)	Aa2	5.875%		12/20/17		500		459,322
UBS AG, Sr. Unsec’d. Notes, MTN (Switzerland)	Aa2	5.75%		04/25/18		500		453,798
								4,078,561
Financial Services — 4.4%
American Express Co., Sr. Unsec’d. Notes	A2	7.00%		03/19/18		200		202,229
Bank of America Corp., Jr. Sub. Notes	A2	8.00%	(c)	12/29/49		1,500		1,078,932
Bank of America Corp., Jr. Sub. Notes	A2	8.125%	(c)	12/29/49		300		224,400
Bank of America Corp., Sr. Unsec’d. Notes	Aa3	1.42%	(c)	10/14/16		400		286,064
Bear Stearns Co., Inc., Sr. Unsec’d. Notes	Aa2	7.25%		02/01/18		500		547,928
CitiFinancial, Inc., Sr. Unsec’d. Notes	A2	6.625%		06/01/15		100		92,732
Credit Suisse/New York NY, Sr. Unsec’d. Notes, MTN (Switzerland)	Aa1	5.00%		05/15/13		700		673,702
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aaa	5.875%		01/14/38		100		97,886
General Electric Capital Corp., Sub. Notes, 144A (original cost $297,708; purchased 08/30/07)(f)(g)	Aa1	6.50%	(c)	09/15/67		GBP300		272,167
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(i)	NR	5.625%		01/24/13		600		57,000
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(i)	NR	6.875%		05/02/18		200		19,000
Lender Processing Services, Inc., Gtd. Notes	Ba2	8.125%		07/01/16		150		133,687
								3,685,727
Food — 0.3%
ARAMARK Corp., Gtd. Notes	B3	6.693%	(c)	02/01/15		50		37,750
ARAMARK Corp., Gtd. Notes	B3	8.50%		02/01/15		75		67,875
Del Monte Corp., Gtd. Notes	B2	8.625%		12/15/12		25		24,250
Dole Foods Co., Inc., Gtd. Notes	Caa2	7.25%		06/15/10		25		17,438
National Beef Packaging Co. LLC, Sr. Unsec’d. Notes	Caa1	10.50%		08/01/11		50		35,000
New Albertson’s, Inc., Sr. Unsec’d. Notes	Ba3	8.70%		05/01/30		15		9,675
Stater Brothers Holdings, Gtd. Notes	B2	7.75%		04/15/15		50		42,000
Stater Brothers Holdings, Gtd. Notes	B2	8.125%		06/15/12		25		22,625
								256,613
Gaming — 0.4%
CCM Merger, Inc., Notes, 144A	Caa2	8.00%		08/01/13		125		64,375
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	5.50%		07/01/10		50		31,750
Harrah’s Operating Co., Inc., Gtd. Notes, 144A	Caa2	10.75%		02/01/16		151		43,035
Harrah’s Operating Co., Inc., Sr. Sec’d. Notes, 144A	B(d)	10.00%		12/15/18		37		13,505
Harrah’s Operating Co., Inc., Gtd. Notes	Caa3	6.50%		06/01/16		17		2,635
MGM Mirage, Sr. Sec’d Notes, 144A	Ba1	13.00%		11/15/13		100		95,250
Mohegan Tribal Gaming Authority, Sr. Sub. Notes	B3	8.00%		04/01/12		70		42,700
Park Place Entertainment Corp., Gtd. Notes	Caa3	8.125%		05/15/11		30		14,700
Shingle Springs Tribal Gaming Authority, Sr. Notes, 144A	B3	9.375%		06/15/15		75		37,500
Station Casinos, Inc., Sr. Sub. Notes	Ca	6.50%		02/01/14		50		2,875
Station Casinos, Inc., Sr. Sub. Notes	Ca	6.875%		03/01/16		50		2,875
Station Casinos, Inc., Sr. Unsec’d. Notes	Caa3	6.00%		04/01/12		50		10,000
								361,200
Healthcare & Pharmaceuticals — 2.0%
Accellent, Inc., Gtd. Notes	Caa3	10.50%		12/01/13		200		137,000
Bio-Rad Laboratories, Inc., Sr. Sub. Notes	Ba3	7.50%		08/15/13		25		22,188
Biomet, Inc., Gtd. Notes	Caa1	11.625%		10/15/17		50		42,750
Biomet, Inc., Gtd. Notes, PIK	B3	10.375%		10/15/17		225		177,750
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba2	6.25%		11/15/15		75		63,000

SEE NOTES TO FINANCIAL STATEMENTS.

A7

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Healthcare & Pharmaceuticals (continued)
Catalent Pharma Solutions, Inc., Gtd. Notes	Caa1	9.50%		04/15/15	$	100	$	38,000
Community Health Systems, Inc., Gtd. Notes	B3	8.875%		07/15/15		190		174,800
Elan Finance PLC, Gtd. Notes (Ireland)	B3	7.75%		11/15/11		15		8,850
HCA, Inc., Notes, MTN	Caa1	9.00%		12/15/14		50		32,042
HCA, Inc., Sr. Sec’d. Notes	B2	9.25%		11/15/16		200		183,500
HCA, Inc., Sr. Sec’d. Notes, PIK	B2	9.625%		11/15/16		450		351,000
HCA, Inc., Sr. Unsec’d. Notes	Caa1	6.25%		02/15/13		125		78,125
Res-Care, Inc., Gtd. Notes	B1	7.75%		10/15/13		100		81,500
Select Medical Corp., Gtd. Notes	B3	7.625%		02/01/15		20		10,600
Skilled HealthCare Group, Gtd. Notes	Caa1	11.00%		01/15/14		103		96,820
Sun Healthcare Group, Inc., Gtd. Notes	B3	9.125%		04/15/15		75		65,625
Surgical Care Affiliates, Inc., Sr. Sub. Notes, 144A(g)	Caa1	10.00%		07/15/17		75		39,000
Viant Holdings, Inc., Gtd. Notes, 144A(g)	Caa1	10.125%		07/15/17		218		71,940
								1,674,490
Insurance — 1.1%
American International Group, Inc., Sr. Unsec’d. Notes, 144A (original cost $400,000; purchased 08/13/08)(f)(g)	A3	8.25%		08/15/18		400		292,768
ASIF III Jersey Ltd., Sr. Sec’d. Notes, MTN (Japan)	Aa3	0.95%		07/15/09		JPY  60,000		611,755
								904,523
Lodging —
Royal Caribbean Cruises Ltd., Sr. Unsec’d. Notes (Liberia)	Ba1	8.00%		05/15/10		50		42,750
Media & Entertainment — 1.6%
AMC Entertainment, Inc., Gtd. Notes	Ba3	8.625%		08/15/12		75		60,000
AMC Entertainment, Inc., Gtd. Notes	B2	11.00%		02/01/16		35		24,456
Cinemark, Inc., Sr. Discount Notes, Zero coupon (until 03/15/09)	B3	2.826%	(t)	03/15/14		25		20,219
Clear Channel Communications, Inc., Sr. Unsec’d. Notes	Caa1	5.75%		01/15/13		75		10,875
Clear Channel Communications, Inc., Sr. Unsec’d. Notes	Caa1	6.875%		06/15/18		25		3,000
Dex Media West LLC / Dex Media Finance Co., Sr. Sub. Notes	B2	9.875%		08/15/13		134		31,825
Dex Media West LLC / Dex Media Finance Co., Sr. Unsec’d. Notes	B3	8.00%		11/15/13		70		12,950
DirecTV Holdings LLC / DirecTV Financing Co., Gtd. Notes	Ba3	8.375%		03/15/13		50		49,750
Echostar DBS Corp., Gtd. Notes	Ba3	7.125%		02/01/16		60		50,100
Idearc, Inc., Gtd. Notes	Caa2	8.00%		11/15/16		115		8,625
Lamar Media Corp., Gtd. Notes	Ba3	6.625%		08/15/15		125		90,312
LIN Television Corp., Gtd. Notes	B3	6.50%		05/15/13		125		59,187
Medianews Group, Inc., Sr. Sub. Notes	Ca	6.875%		10/01/13		50		3,188
Morris Publishing Group LLC, Gtd. Notes	Ca	7.00%		08/01/13		25		2,250
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)	B2	7.75%		03/15/16		175		118,125
R.H. Donnelley Corp., Sr. Unsec’d. Notes	Caa1	8.875%		01/15/16		25		3,750
R.H. Donnelley Corp., Sr. Unsec’d. Notes	Caa1	8.875%		10/15/17		50		7,500
Sun Media Corp., Gtd. Notes (Canada)	Ba2	7.625%		02/15/13		30		24,150
Time Warner, Inc., Gtd. Notes	Baa2	2.405%	(c)	11/13/09		800		770,020
Univision Communications, Inc., Gtd. Notes, PIK, 144A	Caa2	9.75%		03/15/15		95		11,875
								1,362,157
Metals — 1.0%
Aleris International, Inc., Gtd. Notes, PIK	Caa2	9.00%		12/15/14		25		1,500
Century Aluminum Co., Gtd. Notes	B3	7.50%		08/15/14		25		14,375
FMG Finance Pty Ltd., Sr. Sec’d. Notes, 144A (Australia)	B1	10.625%		09/01/16		150		87,000
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes	Ba2	7.084%	(c)	04/01/15		50		33,000
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes	Ba2	8.375%		04/01/17		140		114,800
Gerdau Ameristeel Corp. / Gusap Partners, Gtd. Notes (Canada)	Ba1	10.375%		07/15/11		145		146,450
Ispat Inland ULC, Gtd. Notes (Canada)	Baa2	9.75%		04/01/14		334		285,878
Metals USA, Inc., Sr. Sec’d. Notes	B3	11.125%		12/01/15		125		73,750
United States Steel Corp., Sr. Unsec’d. Notes	Baa3	7.00%		02/01/18		90		61,339
								818,092

SEE NOTES TO FINANCIAL STATEMENTS.

A8

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Non Captive Finance — 0.2%
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes	C	6.75%	12/01/14	$	300	$	205,094
Packaging — 0.9%
Ball Corp., Gtd. Notes	Ba1	6.625%	03/15/18		100		89,500
Berry Plastics Holding Corp., Sr. Sec’d. Notes	Caa1	8.875%	09/15/14		125		54,375
BWAY Corp., Gtd. Notes	B3	10.00%	10/15/10		55		46,750
Crown Americas LLC/Crown Americas Capital Corp., Gtd. Notes	B1	7.625%	11/15/13		100		99,000
Crown Americas LLC/Crown Americas Capital Corp., Gtd. Notes	B1	7.75%	11/15/15		75		74,625
Exopac Holding Corp., Gtd. Notes	B3	11.25%	02/01/14		75		43,875
Graham Packaging Co., Inc., Gtd. Notes	Caa1	8.50%	10/15/12		30		21,375
Graham Packaging Co., Inc., Gtd. Notes	Caa1	9.875%	10/15/14		25		15,375
Greif, Inc., Gtd. Notes	Ba2	6.75%	02/01/17		175		154,875
Owens-Brockway Glass Container, Inc., Gtd. Notes	Ba3	8.25%	05/15/13		50		49,250
Silgan Holdings, Inc., Sr. Sub. Notes	B1	6.75%	11/15/13		90		77,400
							726,400
Paper — 0.2%
Domtar Corp., Gtd. Notes	Ba3	7.875%	10/15/11		75		63,750
Graphic Packaging International Corp., Gtd. Notes	B3	8.50%	08/15/11		50		41,750
Norampac Industries, Inc., Gtd. Notes (Canada)	Ba3	6.75%	06/01/13		30		13,500
Verso Paper Holdings LLC / Verso Paper, Inc., Gtd. Notes	B3	11.375%	08/01/16		75		22,500
							141,500
Pipelines & Other — 1.0%
El Paso Corp., Sr. Unsec’d. Notes	Ba3	7.00%	05/15/11		250		227,446
El Paso Corp., Sr. Unsec’d. Notes, MTN	Ba3	7.80%	08/01/31		100		65,150
Inergy LP Inergy Finance Corp., Gtd. Notes	B1	8.25%	03/01/16		25		19,500
Markwest Energy Partners LP / Markwest Energy Finance Corp., Gtd. Notes	B2	8.75%	04/15/18		45		27,900
Targa Resources, Inc., Gtd. Notes	B3	8.50%	11/01/13		125		67,500
Williams Cos., Inc., Sr. Unsec’d. Notes	Baa3	8.125%	03/15/12		100		92,125
Williams Cos., Inc., Sr. Unsec’d. Notes, 144A (original cost $350,000; purchased 09/08/05)(f)(g)	Baa3	6.375%	10/01/10		350		326,281
							825,902
Real Estate Investment Trusts — 0.7%
Felcor Lodging LP, Gtd. Notes	Ba3	8.50%	06/01/11		50		37,000
Host Marriott LP, Gtd. Notes	Ba1	7.00%	08/15/12		100		84,750
iStar Financial, Inc., Sr. Unsec’d. Notes	Ba3	5.80%	03/15/11		100		35,000
Nationwide Health Properties, Inc., Sr. Unsec’d. Notes	Baa3	6.50%	07/15/11		100		90,772
Omega Healthcare Investors, Inc., Gtd. Notes	Ba3	7.00%	04/01/14		75		60,750
Omega Healthcare Investors, Inc., Gtd. Notes	Ba3	7.00%	01/15/16		100		75,000
Senior Housing Properties Trust, Sr. Unsec’d. Notes	Ba1	8.625%	01/15/12		208		178,880
							562,152
Retailers — 0.2%
Neiman Marcus Group, Inc. (The), Gtd. Notes, PIK	B3	9.00%	10/15/15		70		30,800
Susser Holdings LLC, Gtd. Notes	B3	10.625%	12/15/13		126		110,250
							141,050
Technology — 1.2%
Affiliated Computer Services, Inc., Sr. Unsec’d. Notes	Ba2	4.70%	06/01/10		255		237,150
Avago Technologies Finance, Gtd. Notes (Singapore)	B1	10.125%	12/01/13		160		121,800
Avago Technologies Finance, Gtd. Notes (Singapore)	B3	11.875%	12/01/15		50		34,750
First Data Corp., Gtd. Notes	B3	9.875%	09/24/15		25		15,125
Freescale Semiconductor, Inc., Gtd. Notes, PIK	B2	9.125%	12/15/14		225		51,750
Iron Mountain, Inc., Gtd. Notes	B2	8.625%	04/01/13		145		136,300
Seagate Technology HDD Holdings, Gtd. Notes (Cayman Islands)	Ba1	6.375%	10/01/11		50		34,500
Seagate Technology HDD Holdings, Gtd. Notes (Cayman Islands)	Ba1	6.80%	10/01/16		75		39,000
Sensata Technologies BV, Gtd. Notes (Netherlands)	Caa1	8.00%	05/01/14		150		67,500
Serena Software, Inc., Gtd. Notes	Caa1	10.375%	03/15/16		95		48,213

SEE NOTES TO FINANCIAL STATEMENTS.

A9

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

CORPORATE BONDS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Technology (continued)
STATS ChipPAC Ltd., Gtd. Notes (Singapore)	Ba1	6.75%		11/15/11	$	50	$	37,125
STATS ChipPAC Ltd., Gtd. Notes (Singapore)	Ba1	7.50%		07/19/10		75		61,687
Sungard Data Systems, Inc., Sr. Unsec’d. Notes, 144A	Caa1	10.625%		05/15/15		100		85,500
								970,400
Telecom — 2.1%
American Tower Corp., Sr. Unsec’d. Notes	Ba1	7.125%		10/15/12		75		73,875
Centennial Cellular Operating Co., Gtd. Notes	B2	10.125%		06/15/13		25		25,250
FairPoint Communications, Inc., Sr. Unsec’d. Notes, 144A	B3	13.125%		04/01/18		100		48,000
Frontier Communications Corp., Sr. Unsec’d. Notes	Ba2	9.00%		08/15/31		15		9,450
Frontier Communications Corp., Sr. Unsec’d. Notes	Ba2	9.25%		05/15/11		75		71,250
Hawaiian Telcom Communications, Inc., Gtd. Notes(g)(i)	C	12.50%		05/01/15		75		375
Level 3 Financing, Inc., Gtd. Notes	Caa1	12.25%		03/15/13		125		75,625
Qwest Corp., Sr. Unsec’d. Notes	Ba1	7.50%		10/01/14		75		62,250
Qwest Corp., Sr. Unsec’d. Notes	Ba1	7.625%		06/15/15		500		410,000
Sprint Capital Corp., Gtd. Notes	Ba2	8.375%		03/15/12		1,000		800,000
Sprint Capital Corp., Gtd. Notes	Ba2	8.75%		03/15/32		100		67,500
Time Warner Telecom Holdings, Inc., Gtd. Notes	B3	9.25%		02/15/14		25		20,500
Windstream Corp., Gtd. Notes	Ba3	8.625%		08/01/16		100		88,500
								1,752,575
TOTAL CORPORATE BONDS (cost $35,401,686)								28,111,731
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS — 39.7%
Federal Home Loan Mortgage Corp.		5.00%		TBA		2,000		2,043,750
Federal Home Loan Mortgage Corp.		5.50%		04/01/38		854		875,182
Federal Home Loan Mortgage Corp.		5.50%		TBA		5,000		5,117,190
Federal National Mortgage Assoc.		4.00%		06/01/19-03/01/20		1,867		1,915,121
Federal National Mortgage Assoc.		4.488%	(c)	05/01/36		138		137,351
Federal National Mortgage Assoc.		4.50%		03/01/35-09/01/35		1,244		1,263,883
Federal National Mortgage Assoc.		4.50%		TBA		4,200		4,291,875
Federal National Mortgage Assoc.		5.00%		01/01/19-08/01/37		435		445,978
Federal National Mortgage Assoc.		5.00%		TBA		4,000		4,083,752
Federal National Mortgage Assoc.		5.00%		TBA		1,000		1,017,812
Federal National Mortgage Assoc.		5.192%	(c)	02/01/36		175		176,446
Federal National Mortgage Assoc.		5.50%		TBA		200		205,000
Federal National Mortgage Assoc.		6.00%		11/01/32		6		6,094
Federal National Mortgage Assoc.		6.259%	(c)	08/01/29		25		24,458
Federal National Mortgage Assoc.		6.50%		06/01/18-10/01/32		248		260,164
Federal National Mortgage Assoc.		6.50%		TBA		500		519,219
Government National Mortgage Assoc.		4.625%	(c)	08/20/24		5		5,048
Government National Mortgage Assoc.		5.00%		TBA		900		922,500
Government National Mortgage Assoc.		5.125%	(c)	10/20/27-11/20/29		38		37,629
Government National Mortgage Assoc.		5.375%	(c)	04/20/27		48		48,252
Government National Mortgage Assoc.		5.50%		11/15/28-09/15/33		77		79,905
Government National Mortgage Assoc.		5.50%		TBA		2,600		2,677,189
Government National Mortgage Assoc.		6.00%		TBA		3,800		3,919,936
Government National Mortgage Assoc.		6.50%		TBA		3,000		3,119,064
Government National Mortgage Assoc.		8.00%		08/20/31		3		3,399
Government National Mortgage Assoc.		8.50%		02/20/26-04/20/31		27		29,658
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (cost $32,608,478)								33,225,855
U.S. TREASURY OBLIGATIONS — 7.3%
U.S. Treasury Bonds		4.50%		05/15/38		100		136,484
U.S. Treasury Inflationary Indexed Bonds, TIPS		2.375%		01/15/25		400		451,681
U.S. Treasury Notes		2.00%		11/30/13		800		820,750
U.S. Treasury Notes		4.625%		02/15/17		1,400		1,655,718

SEE NOTES TO FINANCIAL STATEMENTS.

A10

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

U.S. TREASURY OBLIGATIONS (continued)	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Treasury Notes		8.125%		08/15/19	$	300	$	443,391
U.S. Treasury Strips, PO		4.50%		08/15/21		300		196,633
U.S. Treasury Strips, PO		8.125%		05/15/21		2,200		1,456,213
U.S. Treasury Strips, PO		8.00%		11/15/21		1,100		713,171
U.S. Treasury Strips, PO		8.00%		11/15/21		300		194,132
TOTAL U.S. TREASURY OBLIGATIONS (cost $5,569,375)								6,068,173
U.S. GOVERNMENT AGENCY OBLIGATIONS — 0.4%
Federal National Mortgage Assoc.		6.318%		06/15/27		200		219,369
Small Business Administration Participation Certificates, Series 2000-20A, Class 1		7.59%		01/01/20		108		114,165
Small Business Administration Participation Certificates, Series 2000-P10A, Class 1		8.017%		02/10/10		43		44,193
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $360,088)								377,727
COLLATERALIZED MORTGAGE OBLIGATIONS — 4.7%
Bear Stearns Adjustable Rate Mortgage Trust, Series 2005-5, Class A1	Aaa	2.74%	(c)	08/25/35		286		239,670
Bear Stearns Alt-A Trust, Series 2005-4, Class 23A2	Aaa	5.360%	(c)	05/25/35		125		86,643
Countrywide Alternative Loan Trust, Series 2006-HY13, Class 4A1	AAA(d)	5.894%	(c)	02/25/37		195		105,265
Countrywide Alternative Loan Trust, Series 2006-OA11, Class A1B	Aaa	0.661%	(c)	09/25/46		194		75,721
Countrywide Alternative Loan Trust, Series 2007-OA7, Class A1A	Aaa	0.651%	(c)	05/25/47		159		65,370
FHLMC Structured Pass-Through Securities, Series T-61, Class 1A1	Aaa	3.655%	(c)	07/25/44		370		333,283
Freddie Mac, Series 2266, Class F	Aaa	1.645%	(c)	11/15/30		11		10,407
Freddie Mac, Series 2888, Class ZG	Aaa	4.50%		11/15/19		120		113,166
Freddie Mac, Series 3010, Class WB	Aaa	4.50%		07/15/20		1,000		990,537
Government National Mortgage Assoc., Series 2000-15, Class Z	Aaa	7.50%		02/20/30		195		211,165
Greenpoint Mortgage Funding Trust, Series 2006-AR6, Class A1A	Aaa	0.551%	(c)	10/25/46		116		92,905
Harborview Mortgage Loan Trust, Series 2006-5, Class 2A1A	Aaa	0.761%	(c)	07/19/46		197		79,925
Impac Secured Assets CMN Owner Trust, Series 2006-4, Class A2A	Aa2	0.551%	(c)	01/25/37		65		60,010
Merrill Lynch Floating Trust, Series 2006-1, Class A1, 144A (original cost $144,030; purchased 10/31/06)(f)(g)	Aaa	1.265%	(c)	06/15/22		144		109,255
Merrill Lynch Mortgage Investors, Inc., Series 2005-A10, Class A	Aaa	0.681%	(c)	02/25/36		92		48,912
Structured Asset Mortgage Investments, Inc., Series 2005-AR8, Class A1A	Aaa	0.751%	(c)	02/25/36		390		185,481
Thornburg Mortgage Securities Trust, Series 2006-2, Class A1C	A3	0.591%	(c)	03/25/46		200		198,072
WaMu Mortgage Pass-Through Certificates, Series 2002-AR17, Class 1A	Aaa	3.456%	(c)	11/25/42		57		46,867
WaMu Mortgage Pass-Through Certificates, Series 2003-R1, Class A1	Aaa	1.011%	(c)	12/25/27		490		406,070
WaMu Mortgage Pass-Through Certificates, Series 2005-AR13, Class A1A1	Aaa	0.761%	(c)	10/25/45		102		55,822
WaMu Mortgage Pass-Through Certificates, Series 2006-AR17, Class 1A1A	Aaa	3.066%	(c)	12/25/46		141		60,305
WaMu Mortgage Pass-Through Certificates, Series 2006-AR17, Class 2A	Aaa	4.625%	(c)	12/25/46		159		73,065
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 2A3	BB(d)	5.863%	(c)	02/25/37		198		139,025
WaMu Mortgage Pass-Through Certificates, Series 2007-HY2, Class 1A1	AAA(d)	5.606%	(c)	12/25/36		197		97,620
WaMu Mortgage Pass-Through Certificates, Series 2007-OA3, Class 2A1A	Aaa	3.016%	(c)	04/25/47		197		86,588
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $4,894,617)								3,971,149
FOREIGN GOVERNMENT BONDS — 3.2%
Bundesrepublik Deutschland, (Germany)	Aaa	4.25%		07/04/39		EUR  300		473,611
Bundesrepublik Deutschland, (Germany)	Aaa	6.25%		01/04/30		EUR  100		186,068
Development Bank of Japan, (Japan)	Aaa	1.75%		06/21/10		JPY  10,000		112,028
France Government Bond, (France)	Aaa	5.75%		10/25/32		EUR  100		177,134
United Kingdom Gilt, (United Kingdom)	Aaa	4.25%		03/07/11		GBP  300		453,845
United Kingdom Gilt, (United Kingdom)	AAA(d)	5.00%		03/07/12		GBP  100		155,743
United Kingdom Gilt, (United Kingdom)	Aaa	5.00%		09/07/14		GBP    700		1,123,434
TOTAL FOREIGN GOVERNMENT BONDS (cost $2,850,763)								2,681,863

SEE NOTES TO FINANCIAL STATEMENTS.

A11

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

ASSET-BACKED SECURITIES	Moody’s Ratings† (Unaudited)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Asset Backed Securities Corp. Home Equity, Series 2004-HE6, Class A1 (cost $20,700)	Aaa	0.746%	(c)	09/25/34	$	21	$	16,461
MUNICIPAL BONDS — 0.9%
California — 0.1%
State of California, General Obligation Bonds	A1	4.50%		08/01/28		100		80,967
Louisiana — 0.2%
Tobacco Settlement Financing Corp., Revenue Bonds, Series 2001B	Baa	5.875%		05/15/39		290		181,102
Massachusetts — 0.3%
Massachusetts Water Resources Authority, Revenue Bonds, Series J(l)	Aaa	5.00%	(c)	08/01/32		250		236,740
Ohio — 0.3%
Buckeye Tobacco Settlement Financing Authority, Revenue Bonds, Series A-2	Baa	5.875%		06/01/47		500		281,285
TOTAL MUNICIPAL BONDS (cost $1,047,605)								780,094
CONVERTIBLE BOND — 0.8%
Healthcare & Pharmaceuticals
LifePoint Hospitals, Inc., Sr. Unsec’d. Notes (cost $1,000,000)	B(d)	3.50%		05/15/14		1,000		676,250
BANK NOTE — 0.7%
Chrysler Financial, Term, 144A (original cost $1,031,938; purchased 11/28/07) (cost $1,040,428)(f)(g)	Caa	6.00%	(c)	08/03/14		1,086		547,004
TOTAL LONG-TERM INVESTMENTS (cost $119,329,786)								109,108,917
SHORT-TERM INVESTMENTS — 8.9%
U.S. TREASURY OBLIGATIONS(n) — 1.2%
U.S. Treasury Bills		0.02%		01/02/09		380		380,000
U.S. Treasury Bills		0.04%		03/26/09		250		249,971
U.S. Treasury Bills		0.11%		01/29/09		380		380,000
TOTAL U.S. TREASURY OBLIGATIONS (cost $1,009,982)								1,009,971
OPTIONS PURCHASED* — 0.7%				Contracts/ Notional Amount (000)#
Call Options — 0.7%
2 Year Euro-Schatz, expiring 02/20/2009, Strike Price $120.00						EUR  2,200		153
2 Year U.S. Treasury Note Futures, expiring 01/23/2009, Strike Price $111.00					$	1,400		109
5 Year Euro-BOBL, expiring 02/20/2009, Strike Price $135.00						EUR  4,100		285
5 Year U.S. Treasury Note Futures, expiring 01/23/2009, Strike Price $126.00						2,200		172
expiring 01/23/2009, Strike Price $142.00						4,100		641
Interest Rate Swap Options, expiring 08/03/2009 @ 3.45%						700		23,221
expiring 08/03/2009 @ 3.45%						7,100		235,529
expiring 08/03/2009 @ 3.45%						9,000		298,557
								558,667
Put Options
5 Year U.S. Treasury Note Futures, expiring 02/20/2009, Strike Price $85.00						EUR  3,400		266
10 Year Euro-BUND, expiring 02/20/2009, Strike Price $100.00						800		111

SEE NOTES TO FINANCIAL STATEMENTS.

A12

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

OPTIONS PURCHASED* (continued)	Contracts/ Notional Amount (000)#			Value (Note 2)
FNMA, expiring 02/05/2009, Strike Price $50.00			EUR  500	$	—
expiring 02/05/2009, Strike Price $52.00		$	5,000		—
expiring 02/11/2009, Strike Price $50.00			3,500		—
FNMA Gold, expiring 02/05/2009, Strike Price $71.25			2,000		—
GNMA, expiring 01/14/2009, Strike Price $54.00			2,600		—
expiring 01/14/2009, Strike Price $60.00			1,000		—
expiring 01/14/2009, Strike Price $67.00			2,000		—
expiring 02/12/2009, Strike Price $77.25			3,200		—
					377
TOTAL OPTIONS PURCHASED (cost $201,672)					559,044
	Principal Amount (000)#
REPURCHASE AGREEMENT(m) — 1.0%
JPMorgan Chase, 0.00%, dated 12/05/08, due 01/09/09 in the amount of $812,250 (cost $812,250; the value of collateral plus interest was $822,383)		$	812		812,250
	Shares
AFFILIATED MONEY MARKET MUTUAL FUND — 6.0%
Dryden Core Investment Fund — Taxable Money Market Series (cost $5,033,918) (Note 4)(w)			5,033,918		5,033,918
TOTAL SHORT-TERM INVESTMENTS (cost $7,057,822)					7,415,183
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN AND SECURITIES SOLD SHORT — 139.3% (cost $126,387,608)					116,524,100
	Contracts/ Notional Amounts (000)#
OPTIONS WRITTEN — (0.8)%
Call Options — (0.8)%
Interest Rate Swap Options, expiring 08/03/2009 @ 4.15%		$	300		(26,150	)
expiring 08/03/2009 @ 4.40%			2,400		(297,060	)
expiring 08/03/2009 @ 4.40%			3,000		(371,326	)
					(694,536	)
Put Options
Interest Rate Swap Options, expiring 05/22/2009 @ 2.75%			500		(5,384	)
expiring 05/22/2009 @ 2.75%			500		(5,385	)
					(10,769	)
TOTAL OPTIONS WRITTEN (premiums received $203,446)					(705,305	)

SEE NOTES TO FINANCIAL STATEMENTS.

A13

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

SECURITIES SOLD SHORT — (6.8)%	Interest Rate	Maturity Date	Principal Amount (000)#			Value (Note 2)
U.S. Treasury Notes	2.00%	11/30/13		$	800	$	(820,750	)
U.S. Treasury Notes	4.625%	02/15/17			4,100		(4,848,890	)
TOTAL SECURITIES SOLD SHORT (proceeds received $5,572,062)							(5,669,640	)
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN AND SECURITIES SOLD SHORT — 131.7% (cost $120,612,100)							110,149,155
LIABILITIES IN EXCESS OF OTHER ASSETS(x) — (31.7)%							(26,516,252	)
NET ASSETS — 100.0%						$	83,632,903

The following abbreviations are used in portfolio descriptions:

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
CVT	Convertible Security
FDIC	Federal Deposit Insurance Corp.
FHLMC	Federal Home Loan Mortgage Corp.
FNMA	Federal National Mortgage Association
GNMA	Government National Mortgage Assoc
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
PIK	Payment-in-kind
PO	Principal Only
TBA	To Be Announced
TIPS	Treasury Inflation Protected Securities
BRL	Brazilian Real
CNY	Chinese Yuan
EUR	Euro
GBP	British Pound
INR	Indian Rupee
JPY	Japanese Yen
MYR	Malaysian Ringgit
MXN	Mexican Paso
RUB	Russian Ruble

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

* Non-income producing security.

† The rating reflected is as of December 31, 2008. Rating of certain bonds may have changed subsequent to that date.

(c) Indicates a variable rate security.

(d) Standard & Poor’s rating.

(f) Private Placement restricted as to resale and does not have a readily available market. The aggregate original cost of such securities is $3,323,205. The aggregate value of $2,460,306 is approximately 2.9% of net assets.

(g) Indicates a security that has been deemed illiquid.

(i) Represents issuer in default on interest payments. Non-income producing security.

(l) Represents all or partial amount utilized in the Municipal Tender Option Bond transaction. The aggregated principal amount of the inverse floaters and the floating rate notes (included in Liabilities) are $125,000 and $125,000, respectively.

(m) Repurchase agreement is collateralized by United States Treasuries or federal agency obligations.

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

(t) Interest rate is the effective yield as of December 31, 2008.

(w) Prudential Investments LLC, the manager of the Portfolio also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A14

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

(x) Liabilities in excess of other assets includes net unrealized appreciation (depreciation) on futures contracts, forward foreign currency exchange contracts, interest rate and credit default swaps and reverse repurchase agreements as follows:

Future contracts open at December 31, 2008:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2008		Unrealized Appreciation (Depreciation)
Long Positions:
48	90 Day Euro Dollar	Jun 09	$	11,711,075	$	11,864,400	$	153,325
45	90 Day Euro Dollar	Sep 09		10,816,325		11,108,813		292,488
29	90 Day Euro Dollar	Mar 10		7,000,962		7,139,075		138,113
22	90 Day Euro EURIBOR	Mar 09		7,270,027		7,474,771		204,744
18	90 Day Sterling	Mar 09		3,147,414		3,177,846		30,432
31	90 Day Sterling	Jun 09		5,245,227		5,480,479		235,252
4	90 Day Sterling	Sep 09		677,721		706,332		28,611
33	90 Day Sterling	Dec 09		5,609,845		5,805,294		195,449
44	5 Year U.S. Treasury Note	Mar 09		5,188,375		5,238,406		50,031
8	10 Year Euro-Bund	Mar 09		1,362,358		1,388,268		25,910
1	10 Year UK Gilt	Mar 09		167,498		177,519		10,021
								1,364,376
Short Position:
41	5 Year Euro-Bobl	Mar 09		6,572,595		6,623,033		(50,438	)
							$	1,313,938	(1)

⁽¹⁾ Cash of $451,500 has been segregated with the broker to cover requirements for open futures contracts at December 31, 2008

Forward foreign currency exchange contracts outstanding at December 31, 2008:

Purchase Contracts	Notional Amount (000)	Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
Brazilian Real,
Expiring 02/03/09	BRL  188	$	84,780	$	79,629	$	(5,151	)
Expiring 06/02/09	BRL  445		233,864		181,458		(52,406	)
Chinese Yuan,
Expiring 05/06/09	CNY  3,051		440,754		440,347		(407	)
Expiring 07/15/09	CNY  3,620		531,301		521,125		(10,176	)
Expiring 09/08/09	CNY  1,517		220,000		218,017		(1,983	)
Euro, Expiring 01/13/09	EUR  53		69,610		73,628		4,018
Indian Rupee, Expiring 04/09/09	INR  20,067		399,648		408,571		8,923
Malaysian Ringgit,
Expiring 02/12/09	MYR  271		76,720		78,185		1,465
Expiring 04/14/09	MYR  212		60,000		61,032		1,032
Russian Ruble, Expiring 05/06/09	RUB  16,902		504,547		490,159		(14,388	)
		$	2,621,224	$	2,552,151	$	(69,073	)
Sale Contracts	Notional Amount (000)	Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
British Pound, Expiring 01/13/09	GBP  1,795	$	2,665,583	$	2,579,787	$	85,796
Chinese Yuan, Expiring 07/15/09	CNY  6,877		988,000		989,943		(1,943	)
Euro, Expiring 01/13/09	EUR  24		30,499		33,341		(2,842	)
Japanese Yen, Expiring 01/08/09	JPY  66,161		695,617		729,976		(34,359	)
Russian Ruble, Expiring 05/06/09	RUB  16,902		581,943		490,159		91,784
		$	4,961,642	$	4,823,206	$	138,436

SEE NOTES TO FINANCIAL STATEMENTS.

A15

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Interest rate swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)		Fixed Rate	Floating Rate	Unrealized Appreciation (Depreciation)
Bank of America Securities LLC(2)	12/17/38	$	600	5.00%	3 Month LIBOR	$	(261,365	)
Barclays Capital(1)	06/17/16		1,600	4.00%	3 Month LIBOR		29,117
Credit Suisse International(2)	06/17/24		4,600	4.00%	3 Month LIBOR		(82,109	)
Deutsche Bank(2)	12/17/28		300	5.00%	3 Month LIBOR		(105,204	)
Merrill Lynch & Co.(2)	12/17/38		600	5.00%	3 Month LIBOR		(258,004	)
Merrill Lynch & Co.(2)	12/17/28		300	5.00%	3 Month LIBOR		(96,654	)
Morgan Stanley & Co.(1)	06/17/14		3,300	4.00%	3 Month LIBOR		49,311
Morgan Stanley & Co.(2)	12/17/38		800	5.00%	3 Month LIBOR		(313,784	)
Merrill Lynch & Co.(2)	05/21/09		1,400	5.50%	ICAP CMM FRA Fixing Rate		(237,959	)
Merrill Lynch & Co.(1)	01/02/12		BRL  300	14.77%	Brazilian interbank lending rate		4,828
Morgan Stanley & Co.(1)	01/02/12		BRL  5,100	10.12%	Brazilian interbank lending rate		(9,302	)
Barclays Capital(1)	12/17/10		EUR  100	5.50%	6 Month EURIBOR		6,508
Barclays Capital(1)	06/15/10		EUR  3,200	4.50%	6 Month EURIBOR		75,860
Barclays Capital(2)	09/17/18		EUR  200	5.00%	6 Month EURIBOR		(28,214	)
Barclays Capital(2)	09/17/38		EUR  300	5.00%	6 Month EURIBOR		(95,931	)
Deutsche Bank(1)	09/17/18		EUR  300	5.00%	6 Month EURIBOR		(38,790	)
Deutsche Bank(1)	09/17/10		EUR  1,300	5.00%	6 Month EURIBOR		64,824
Deutsche Bank(1)	06/15/13		EUR  1,500	4.00%	6 Month EURIBOR		74,553
Deutsche Bank(1)	09/15/10		EUR  2,000	5.50%	6 Month EURIBOR		115,618
Goldman Sachs(1)	03/18/10		EUR  700	5.00%	6 Month EURIBOR		26,594
Goldman Sachs(2)	03/18/39		EUR  200	5.00%	6 Month EURIBOR		(60,977	)
Morgan Stanley & Co.(1)	12/17/10		EUR  500	5.50%	6 Month EURIBOR		35,259
UBS AG(1)	10/15/10		EUR  100	2.15%	FRC-Excluding Tobacco-Non-Revised Consumer Price Index		5,299
Barclays Capital(2)	06/15/37		GBP  200	4.00%	6 Month LIBOR		(21,449	)
Goldman Sachs(2)	12/20/17		GBP  400	5.00%	6 Month LIBOR		(90,140	)
Goldman Sachs(2)	06/15/37		GBP  300	4.00%	6 Month LIBOR		(31,629	)
Morgan Stanley & Co.(2)	06/15/37		GBP  400	4.00%	6 Month LIBOR		(42,362	)
UBS AG(2)	06/17/18		JPY  40,000	1.50%	6 Month LIBOR		(4,791	)
Merrill Lynch & Co.(1)	11/04/16		MXN  11,000	8.17%	28 day Mexican interbank rate		(4,691	)
						$	(1,295,584	)

(1) Portfolio pays the floating rate and receives the fixed rate.

(2) Portfolio pays the fixed rate and receives the floating rate.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

Credit default swap agreements outstanding at December 31, 2008:

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation
Credit default swaps—Buy Protection(1)
Barclays Bank PLC	03/20/12	$	100	0.17%	AIG Corp., 5.40%, due 02/15/12	$	22,750
Citigroup	12/20/16		400	0.17%	Bank of America Corp., 5.62%, due 10/14/16		26,842
Barclays Bank PLC	06/20/15		100	0.15%	CitiFinancial, 6.625%, due 06/01/15		9,547
Barclays Bank PLC	09/20/11		100	0.58%	DaimlerChrysler NA Holdings, 5.75%, due 09/08/11		11,217
Barclays Bank PLC	12/20/11		1,200	0.75%	Dow Jones CDX HVOL7 Index		137,629
Barclays Bank PLC	06/20/13		200	5.00%	Dow Jones CDX HY-10 100 Index		27,366
UBS AG	06/20/13		200	5.00%	Dow Jones CDX HY-10 100 Index		27,476
Merrill Lynch & Co.	12/20/11		100	0.00%	Dow Jones CDX HY-7 Index		38,594
Bank of America Securities LLC	06/20/12		392	2.75%	Dow Jones CDX HY-8 Index		52,640
UBS AG	06/20/12		882	2.75%	Dow Jones CDX HY-8 Index		115,879
Morgan Stanley & Co.	06/20/12		1,274	2.75%	Dow Jones CDX HY-8 Index		193,756
Morgan Stanley & Co.	12/20/12		300	0.14%	Dow Jones CDX IG5 Index		56,614

SEE NOTES TO FINANCIAL STATEMENTS.

A16

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Credit default swap agreements outstanding at December 31, 2008—(continued)

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Unrealized Appreciation
Credit default swaps—Buy Protection(1)
Morgan Stanley & Co.	12/20/12	$	1,000	0.14%	Dow Jones CDX IG5 Index	$	188,708
Deutsche Bank	06/20/18		683	1.50%	Dow Jones CDX NA IG 10 10Y		11,305
Goldman Sachs Capital Markets, L.P.	06/20/18		1,171	1.50%	Dow Jones CDX NA IG 10 10Y		22,417
Morgan Stanley & Co.	06/20/18		1,659	1.50%	Dow Jones CDX NA IG 10 10Y		37,744
Deutsche Bank	06/20/13		878	1.55%	Dow Jones CDX NA IG 10 5Y		23,004
Goldman Sachs Capital Markets, L.P.	12/20/17		98	0.80%	Dow Jones CDX NA IG 9 10Y		3,426
Morgan Stanley & Co.	12/20/17		195	0.80%	Dow Jones CDX NA IG 9 10Y		5,746
Barclays Bank PLC	12/20/17		488	0.80%	Dow Jones CDX NA IG 9 10Y		19,303
Barclays Bank PLC	03/20/11		100	0.37%	iStar Financial, Inc., 5.80%, due 03/15/11		59,211
Deutsche Bank	09/20/11		100	0.62%	Nationwide Health, 6.50%, due 07/15/11		16,024
Morgan Stanley & Co.	09/20/13		100	0.58%	Sealed Air Corp., 5.625%, due 07/15/13		16,774
Bear Stearns International Ltd.	03/20/12		1,000	0.55%	Sprint Capital Corp., 8.375%, due 03/15/12		262,514
Bear Stearns International Ltd.	06/20/16		100	0.63%	Whirlpool Corp., 6.50%, due 06/15/16		13,727
Deutsche Bank	12/20/13		400	1.85%	UBS AG, 2.55%, due 04/18/12		3,847
						$	1,404,060

Counterparty	Termination Date	Notional Amount# (000)(3)		Fixed Rate	Reference Entity/Obligation	Fair Value(4)			Upfront Premiums Paid (Received)			Unrealized Depreciation
Credit default swaps on credit indices—Sell Protection(2)
Credit Suisse International	05/25/46	$	1,700	0.11%	ABX.HE.AAA.06-2 Index	$	(859,829	)	$	(359,421	)	$	(500,408	)
Citigroup	06/20/12		2,000	2.09%	Dow Jones CDX HY-8 Index		(343,727	)		—			(343,727	)
Morgan Stanley & Co.	12/20/15		200	0.46%	Dow Jones CDX IG5 Index		(53,928	)		—			(53,928	)
Morgan Stanley & Co.	12/20/15		700	0.46%	Dow Jones CDX IG5 Index		(188,556	)		—			(188,556	)
						$	(1,446,040	)	$	(359,421	)	$	(1,086,619	)

The Portfolio entered into credit default swap agreements on credit indices as the protection seller to provide a measure of protection against the current portfolio of investments’ exposure to market conditions, or to take an active position with respect to the referenced entity’s credit soundness.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(4) The fair value of credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date.

# Notional Amount is shown in U.S. dollars unless otherwise stated.

SEE NOTES TO FINANCIAL STATEMENTS.

A17

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

Reverse Repurchase Agreement outstanding at December 31, 2008:

Broker	Interest Rate	Trade Date	Value at December 31, 2008		Maturity Date	Cost
JPMorgan Chase	0.080%	12/24/08	$	816,000	01/09/09	$	816,000

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities			Other Financial Instruments*
Level 1—Quoted Prices	$	37,686,528		$	1,313,938
Level 2—Other Significant Observable Inputs—Long		78,837,572			(914,079	)
Level 2—Other Significant Observable Inputs—Short		(7,190,945	)		—
Level 3—Significant Unobservable Inputs		—			5,299
Total	$	109,333,155		$	405,158

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Investments in Securities			Other Financial Instruments
Balance as of 12/31/07	$	173,663		$	—
Accrued discounts/premiums		—			—
Realized gain (loss)		—			—
Change in unrealized appreciation (depreciation)		(2,320	)		4,169
Net purchases (sales)		2,320			—
Transfers in and/or out of Level 3		(173,663	)		1,130
Balance as of 12/31/08	$	—		$	5,299

SEE NOTES TO FINANCIAL STATEMENTS.

A18

	DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as December 31, 2008 were as follows:

U.S. Government Mortgage-Backed Obligations	39.7	%
U.S. Treasury Obligations	8.5
Affiliated Money Market Mutual Fund	6.0
Financial – Bank & Trust	4.9
Collateralized Mortgage Obligations	4.7
Financial Services	4.5
Foreign Government Bonds	3.2
Oil, Gas & Consumable Fuels	3.1
Healthcare & Pharmaceuticals	2.8
Capital Goods	2.7
Pharmaceuticals	2.6
Capital Markets	2.4
Biotechnology	2.2
Food & Staples Retailing	2.2
Healthcare Providers & Services	2.2
Insurance	2.2
Telecom	2.1
Diversified Financial Services	1.9
Electric	1.9
Software	1.8
Aerospace & Defense	1.8
Communication Equipment	1.6
Media & Entertainment	1.6
Chemicals	1.3
Healthcare Equipment & Supplies	1.3
Media	1.3
Internet Software & Services	1.2
Technology	1.2
Food Products	1.1
Computers & Peripherals	1.0
Energy-Other	1.0
Metals	1.0
Pipelines & Other	1.0
Repurchase Agreements	1.0
Commercial Banks	0.9
Municipal Bonds	0.9
Packaging	0.9
Household Products	0.8
Bank Notes	0.7
Cable	0.7
Commercial Services & Supplies	0.7
Options Purchased	0.7
Real Estate Investment Trusts	0.7
Beverages	0.6
Diversified Consumer Services	0.6
Internet & Catalog Retail	0.6
IT Services	0.6
Energy Equipment & Services	0.5
Commercial Services	0.4
Computer Services & Software	0.4
Consumer	0.4
Gaming	0.4
Independent Power Producers & Energy Traders	0.4
Semiconductors & Semiconductor Equipment	0.4
U.S. Government Agency Obligations	0.4
Wireless Telecommunication Services	0.4
Automotive	0.3
Electronic Equipment & Instruments	0.3

Entertainment & Leisure	0.3	%
Food	0.3
Life Science Tools & Services	0.3
Medical Supplies & Equipment	0.3
Multi-Utilities	0.3
Retail & Merchandising	0.3
Textiles, Apparel & Luxury Goods	0.3
Banks	0.2
Business Services	0.2
Construction	0.2
Electric Utilities	0.2
Manufacturing	0.2
Metals & Mining	0.2
Non Captive Finance	0.2
Office Electronics	0.2
Paper	0.2
Retailers	0.2
Specialty Retail	0.2
Thrifts & Mortgage Finance	0.2
Airlines	0.1
Auto Components	0.1
Automobile Manufacturers	0.1
Building & Construction	0.1
Consumer Products & Services	0.1
Diversified Manufacturing	0.1
Electronic Components	0.1
Electronics	0.1
Environmental Control	0.1
Hotels, Restaurants & Leisure	0.1
Household Durables	0.1
Internet	0.1
Machinery & Equipment	0.1
Office Equipment	0.1
Oil & Gas Exploration/Production	0.1
Paper & Forest Products	0.1
Restaurants	0.1
Road & Rail	0.1
Semiconductors	0.1
Telecommunications	0.1
Utilities	0.1
	139.3
Options Written and Securities Sold Short	(7.6	)
Liabilities in excess of other assets	(31.7	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A19

DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments at value:
Unaffiliated investments (cost $121,353,690)	$	111,490,182
Affiliated investments (cost $5,033,918)		5,033,918
Cash		668,123
Foreign currency, at value (cost $999,765)		927,294
Deposit with broker		451,500
Receivable for investments sold		27,231,572
Unrealized appreciation on swap agreements		1,891,831
Dividends and interest receivable		761,654
Unrealized appreciation on foreign currency forward contracts		193,018
Prepaid expenses		1,052
Tax reclaim receivable		284
Total Assets		148,650,428
LIABILITIES
Payable for investments purchased		53,598,041
Securities sold short, at value (proceeds received $5,572,062)		5,669,640
Unrealized depreciation on swap agreements		2,869,974
Reverse repurchase agreement		816,000
Payments received for swap agreements		759,546
Written options outstanding, at value (cost $203,446)		705,305
Accrued expenses and other liabilities		182,739
Payable for floating rate notes issued		125,000
Unrealized depreciation on foreign currency forward contracts		123,655
Interest payable on investments sold short		84,535
Management fee payable		51,266
Payable for Series shares repurchased		17,325
Due to broker-variation margin		11,443
Deferred trustees’ fees		2,970
Transfer agent fees payable		86
Total Liabilities		65,017,525
NET ASSETS	$	83,632,903
Net assets were comprised of:
Paid-in capital	$	99,451,220
Retained earnings		(15,818,317	)
Net assets, December 31, 2008	$	83,632,903
Net asset value and redemption price per share, $83,632,903 / 10,055,769 outstanding shares of beneficial interest	$	8.32

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Interest income	$	4,169,583
Unaffiliated dividend income (net of $8,840 foreign withholding tax)		516,707
Affiliated dividend income		190,571
		4,876,861
EXPENSES
Management fee		817,303
Custodian’s fees and expenses		261,000
Interest expense (Note 2)		113,364
Audit fee		63,000
Shareholders’ reports		44,000
Trustees’ fees		10,000
Legal fees and expenses		7,000
Insurance expenses		2,000
Transfer agent’s fees and expenses (including affiliated expense of $1,000) (Note 4)		1,000
Commitment fee on syndicated credit agreement		500
Loan interest expense (Note 8)		136
Miscellaneous		7,624
Total expenses		1,326,927
NET INVESTMENT INCOME		3,549,934
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(8,644,119	)
Futures transactions		(757,209	)
Options written transactions		638,421
Swap agreement transactions		(663,067	)
Foreign currency transactions		1,049,272
		(8,376,702	)
Net change in unrealized appreciation (depreciation) on:
Investments		(20,657,054	)
Futures		1,218,906
Options written		(324,059	)
Swap agreements		(557,943	)
Short sales		203,303
Foreign currencies		(254,510	)
		(20,371,357	)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(28,748,059	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(25,198,125	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,549,934		$	4,249,666
Net realized gain (loss) on investments and foreign currency transactions		(8,376,702	)		7,955,665
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(20,371,357	)		(4,499,934	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(25,198,125	)		7,705,397
DISTRIBUTIONS		(12,205,331	)		(9,328,249	)
SERIES SHARE TRANSACTIONS:
Series shares sold [221,329 and 203,407 shares, respectively]		2,270,341			2,549,068
Series shares issued in reinvestment of dividends [1,174,719 and 795,247 shares, respectively]		12,205,331			9,328,249
Series shares repurchased [2,169,967 and 2,063,447 shares, respectively]		(21,629,998	)		(21,843,596	)
DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(7,154,326	)		(9,966,279	)
TOTAL DECREASE IN NET ASSETS		(44,557,782	)		(11,589,131	)
NET ASSETS:
Beginning of year		128,190,685			139,779,816
End of year	$	83,632,903		$	128,190,685

SEE NOTES TO FINANCIAL STATEMENTS.

A20

NOTES TO THE FINANCIAL STATEMENTS OF

THE PRUDENTIAL SERIES FUND

Note 1: General

The Prudential Series Fund (“Series Fund”), organized as a Delaware statutory trust, is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended. On January 2, 2006, each Portfolio of the Series Fund changed its federal income tax status from a regulated investment company to a partnership. As a result of that conversion, the Series Fund was reorganized from a Maryland corporation to a Delaware statutory trust. Pursuant to this reorganization, the Series Fund has been renamed “The Prudential Series Fund.” The Series Fund is composed of twenty-eight Portfolios (“Portfolio” or “Portfolios”), each with a separate series shares. The information presented in these financial statements pertains to Diversified Conservative Growth Portfolio.

The Portfolio has the following as investment objectives:

Current income and a reasonable level of capital appreciation by investing primarily in a diversified portfolio of debt and equity securities.

The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government) held by the Portfolio to meet their obligations may be affected by the economic or political developments in a specific industry, region or country.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of government supervision and regulation of foreign securities markets.

Note 2: Accounting Policies

The following is a summary of significant accounting policies followed by the Series Fund and the Portfolio in preparation of their financial statements.

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the official closing price provided by NASDAQ. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisers, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange, or at the last bid price in the absence of an asked price. Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Series Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees approved fair valuation procedures. When determining the fair valuation 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 of any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser 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 mutual funds to calculate their net asset values.

B1

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities that are held in the Portfolio which mature in more than 60 days are valued at current market quotations and those short-term debt securities which mature in 60 days or less are valued at amortized cost which approximates market value. The amortized cost method values a security at its cost at the time of purchase and there after assumes a constant amortization to maturity of any discount or premium.

Repurchase Agreements:    In connection with transactions in repurchase agreements with United States financial institutions, it is the Series Fund’s policy that its custodian or designated subcustodians, as the case may be, under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked to market on a daily basis to ensure the adequacy of the collateral. If the seller defaults or the value of the collateral declines, or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Series Fund may by delayed or limited.

Foreign Currency Translation:    The books and records of the Series Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i)  market value of investment securities, other assets and liabilities – at the current daily rates of exchange.

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

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

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

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.

Forward Currency Contracts:    A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Portfolio may enter into forward currency contracts in order to hedge their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in assets and liabilities on the financial statements. 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 foreign currency transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Floating-Rate Notes Issued in Conjunction with Securities Held:    The Portfolio invests in inverse floating rate securities (“inverse floaters”) that pay interest at a rate that varies inversely with short-term interest rates. Certain of these securities may be leveraged, whereby the interest rate varies inversely at a multiple of the change in short-term rates. As interest rates rise, inverse floaters provide less current income. The price of such securities is more volatile than comparable fixed rate securities.

B2

When the Portfolio enters into agreements to create inverse floaters and floater note securities (also known as Tender Option Bond Transactions), the Portfolio transfers a fixed rate bond to a broker for cash. At the same time the Portfolio buys (receives) a residual interest in a trust (the “trust”) set up by the broker, often referred to as an inverse floating rate obligation (inverse floaters). Generally, the broker deposits a fixed rate bond (the “fixed rate bond”) into the trust with the same CUSIP number as the fixed rate bond sold to the broker by the Portfolio. The trust also issues floating rate notes (“floating rate notes”) which sold to third parties. The floating rate notes have interest rates that reset weekly. The inverse floater held by the Portfolio gives the Portfolio the right (1) to cause the holders of the floating rate notes to tender their notes at par, and (2) to have the broker transfer the fixed rate bond held by the trust to the Portfolio thereby collapsing the trust. In accordance with FAS Statement No. 140, the Portfolio’s account for the transaction described above as funded leverage by including the fixed rate bond in its Portfolio of Investments, and accounts for the floating rate notes as a liability under the caption “payable for floating rate notes issued” in the Portfolio’s “Statement of Assets and Liabilities.”

The Portfolio’s investment policies and restrictions permit investments in inverse floating rate securities. Inverse floaters held by the Portfolio are securities exempt from registration under Rules 144A of the Securities Act of 1933.

Short Sales:    The Portfolio may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When a Portfolio makes a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The Portfolio may have to pay a fee to borrow the particular security and may be obligated to remit any interest or dividends received on such borrowed securities. Dividends declared on short positions open on record date are recorded on the ex-date as an expense. A gain, limited to the price at which the Portfolio sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received. The Portfolio maintains a segregated account of securities or other liquid assets, the dollar value of which is at least equal to its obligation with respect to short sales.

Options:    The Portfolio may either purchase or write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates or currencies with respect to securities which the Portfolio currently owns or intends to purchase. The Portfolio’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 Portfolio purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Portfolio 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 Portfolio realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost basis of the purchase in determining whether the Portfolio has realized a gain (loss). The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain (loss). Gains (losses) on purchased options are included in net realized gains (losses) on investment transactions. Gains (losses) on written options are presented separately as net realized gains (losses) on written option transactions.

The Portfolio, as writer of an option, may have no control over whether the contract may be exercised. As a result, the Portfolio bears the market risk of an unfavorable change in the price of the security underlying the written option. The Portfolio, as purchaser of an option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

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 Portfolio 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 Portfolio each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts.

B3

The Portfolio invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Portfolio intends to purchase, against fluctuations in value caused by changes in prevailing rates or market conditions. Under a variety of circumstances, the Portfolio 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 and the underlying hedged assets.

Swap Agreements:    The Portfolios may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument.

Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period.

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

A Portfolio may use credit default swaps to provide a measure of protection against defaults of the issuers or to take an active long or short position with respect to the likelihood of a particular issuer’s default. A Portfolio may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect.

As a seller of protection on credit default swap agreements, a Portfolio will generally receive from the buyer of protection an agreed upon payment throughout the term of the swap provided that there is no credit event. As the seller, a Portfolio would effectively increase investment risk to its portfolio because, in addition to its total net assets, a Portfolio may be subject to investment exposure on the notional amount of the swap.

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

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

The Portfolio may enter into total return swaps to manage its exposure to a security, commodity or an index. In a total return swap, one party would receive payments based on the market value of the security or the commodity involved, or total return of a specific referenced asset, such as an equity, index or bond, and in return pay a fixed amount.

These swap agreements involve, to varying degrees, elements of credit, market risk and documentation risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates. The swaps are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments. Payments received or paid by the Portfolio are recorded as realized gains or losses upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed in the footnotes to the Schedule of Investments.

B4

The Portfolio has entered into over-the-counter derivative agreements. Such 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 to early terminate the contract(s) may impact the amounts reported on the financial statements. As of December 31, 2008, the Portfolio has met conditions under such agreements that give the counterparty the right to call for an early termination. However, as of the date of issuance of these financial statements no notice of early termination was received.

Forward currency contracts, 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.

Securities Lending:    The Portfolio may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Portfolio. Upon termination of the loan, the borrower will return to the lender securities identical to the loaned securities. Should the borrower of the securities fail financially, the Portfolio has the right to repurchase the securities using the collateral in the open market. The Portfolio 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 Portfolio also continues to receive interest and dividends or amounts equivalent thereto on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

As a result of the bankruptcy filing by Lehman Brothers Holdings Inc., which was the parent company to the Portfolios’ Securities Lending Counter Party, Lehman Brothers Inc. (Lehman), the Portfolios’ Securities Lending Agent utilized collateral held on behalf of the Portfolios for securities out on loan to compensate the Portfolios for the failure of Lehman to return the securities. Any excess collateral was returned to Lehman.

When-Issued/Delayed Delivery Securities:    Securities purchased or sold on a when-issued or delayed delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Portfolio enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income, which is comprised of four elements: stated coupon, original issue discount, market discount and market premium, is recorded on the accrual basis. Expenses are recorded on the accrual basis. The Series Fund’s expenses are allocated to the respective Portfolios on the basis of relative net assets except for Portfolio specific expenses which are attributable directly to a Portfolio or class level.

Taxes:    For federal income tax purposes, the Portfolio is treated as a partnership. No provision has been made in the financial statements for U.S. Federal, state, or local taxes, as any tax liability arising from operations of the Portfolio is the responsibility of its partners. The Portfolio is not generally subject to entity-level taxation. Partners of each Portfolio are subject to taxes on their distributive share of partnership items.

Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Series Fund’s understanding of the applicable country’s tax rules and regulations.

Distributions:    Distributions from the Portfolio are made in cash and automatically reinvested in additional shares of the Portfolio. The Portfolio makes distributions, if any, at least annually. Distributions are recorded on the ex-dividend date.

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 these estimates.

Note 3: Agreements

The Series Fund has a management agreement with PI. Pursuant to this agreement PI has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. PI has entered into subadvisory agreements with Prudential Investment Management, Inc. (“PIM”), Jennison Associates LLC (“Jennison”), Eagle Asset Management (“Eagle”), Pacific Investment Management Company

B5

LLC (“PIMCO”), EARNEST Partners LLC (“EARNEST”) and Quantitative Management Associates LLC (“QMA”) (collectively, the “Subadvisers”), under which each provides investment advisory services for certain Portfolios of the Series Fund. PI pays for the services of the Subadvisers, compensation of officers of the Series Fund, occupancy and certain clerical and administrative expenses of the Series Fund. The Portfolio bears all other costs and expenses.

The management fee paid to PI is computed daily and payable monthly, at the annual rate of .75 of 1% of the Portfolio’s average daily net assets.

The Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) which acts as the distributor of the Class I and Class II shares of the Series Fund. The Series Fund compensates PIMS for distributing and servicing the Series Fund’s Class II shares pursuant to a plan of distribution (the “Class II Plan”), 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 I shares of the Series Fund.

PIMS, PI, PIM and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 4: Other Transactions with Affiliates

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

For the year ended December 31, 2008, Wachovia Securities LLC, an affiliate of PI, earned brokerage commissions from transactions executed on behalf of the Diversified Conservative Growth Portfolio in the amount of $6.

The Portfolio invests in the Taxable Money Market Series, a portfolio of the Dryden Core Investment Fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 5: Portfolio Securities

Purchases and sales of portfolio securities (excluding government securities and short-term issues) for the year ended December 31, 2008 were $480,911,382 and $482,341,904 respectively.

The Portfolio’s written options activity for the year ended December 31, 2008 was as follows:

	Number of Contracts/ Swap Notional Amount $		Premium
Balance at beginning of year	17,400,000		$	348,366
Written options	13,200,000			278,646
Expired options	(900,000	)		(5,621	)
Excercised options	—			—
Closed options	(23,000,000	)		(417,945	)
Balance at end of year	6,700,000		$	203,446

Note 6: Tax Information

After January 2, 2006, all Portfolios are treated as partnerships for tax purposes. The character of the cash distributions made by the partnerships is generally classified as return of capital nontaxable distributions. After each fiscal year each partner will receive information regarding their distributive allocable share of the partnership’s income, gains, losses and deductions.

Prior to January 2, 2006, each Portfolio, which was incorporated as of that date, qualified as a regulated investment company under the Internal Revenue Code and distributed all of its taxable income, including any net realized gains on investments, to shareholders.

B6

With respect to the Portfolios, book cost of assets differs from tax cost of assets as a result of each Portfolio’s adoption of a mark to market method of accounting for tax purposes. Under this method, tax cost of assets will approximate its fair market value.

Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2008, no provision for income tax would be required in the Portfolios’ financial statements. The Portfolios’ federal and state income 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.

Note 7: Capital

The Series Fund offers Class I and Class II shares. Neither Class I nor Class II shares of a Portfolio are subject to any sales charge or redemption charge and are sold at the net asset value of the Portfolio. Class I shares are sold only to certain separate accounts of Prudential to fund benefits under certain variable life insurance and variable annuity contracts (“contracts”). Class II shares are sold only to separate accounts of non-Prudential insurance companies as investment options under certain contracts. The separate accounts invest in shares of the Series Fund through subaccounts that correspond to the Portfolios. The separate accounts will redeem shares of the Series Fund to the extent necessary to provide benefits under the contracts or for such other purposes as may be consistent with the contracts.

Note 8: Borrowings

The Portfolio, along with other affiliated registered investment companies (the “Funds”), are a party to a syndicated credit agreement (“SCA”) with two banks. The SCA provides for a commitment of $500 million. Interest on any borrowings under the SCA would be incurred at market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. Effective October 24, 2008, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Funds pay a commitment fee of .13 of 1% of the unused portion of the renewed SCA. The expiration date of the renewed SCA will be October 23, 2009. For the period from October 26, 2007 through October 23, 2008, the Funds paid a commitment fee of .06 of 1% of the unused portion of the agreement. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions.

During the year ended December 31, 2008, the Portfolio utilized the line of credit and had an average balance outstanding of $521,000 with an average interest rate 4.71% for two days.

Note 9: Ownership and Affiliates

As of December 31, 2008, all of Class I shares of the Portfolio were owned of record by the Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

Note 10: New Accounting Pronouncements

In March 2008, Financial Accounting Standards Board (“FASB”) released “Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

B7

Financial Highlights

	Diversified Conservative Growth Portfolio
	Year Ended December 31,
	2008			2007			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.84		$	12.06		$	11.67		$	11.28		$	10.63
Income From Investment Operations:
Net investment income		.38			.45			.39			.34			.26
Net realized and unrealized gain (loss) on investments		(2.69	)		.26			.43			.39			.72
Total from investment operations		(2.31	)		.71			.82			.73			.98
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.34	)		(.33	)
Distributions		(1.21	)		(.93	)		(.43	)		—			—
Total distributions		(1.21	)		(.93	)		(.43	)		(.34	)		(.33	)
Net Asset Value, end of year	$	8.32		$	11.84		$	12.06		$	11.67		$	11.28
Total Return(a)		(21.56	)%		5.91	%		6.92	%		7.04	%		9.56	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	83.6		$	128.2		$	139.8		$	151.4		$	167.0
Ratios to average net assets(b):
Expenses		1.22	%(c)		1.14	%(c)		.99	%(c)		.95	%		.97	%
Net investment income		3.26	%		3.16	%		3.03	%		2.75	%		2.29	%
Portfolio turnover rate		453	%		322	%		286	%		304	%		186	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) The expense ratio reflects the interest and fee expense related to the interest expenses on investments sold short and liability for the floating rate notes issued in conjunction with the inverse floater securities. The total expense ratio excluding interest and fees expense is 1.11%, 1.01% and 0.98% for the years ended December 31, 2008, 2007 and 2006, respectively.

SEE NOTES TO FINANCIAL STATEMENTS.

C1

Report of Independent Registered Public Accounting Firm

THE BOARD OF TRUSTEES AND SHAREHOLDERS

THE PRUDENTIAL SERIES FUND – DIVERSIFIED CONSERVATIVE GROWTH PORTFOLIO:

We have audited the accompanying statement of assets and liabilities of The Prudential Series Fund – Diversified Conservative Growth Portfolio (hereafter referred to as the “Fund”), including the portfolio of investments, as of December 31, 2008, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian, transfer agent, and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of December 31, 2008, and 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 each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 26, 2009

D1

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)

Information about the Trustees and the Officers of the Fund is set forth below. Trustees who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Fund are referred to as “Interested Trustees.” The Trustees 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.

Independent Trustees (1)
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Saul K. Fenster, Ph.D. (75) No. of Portfolios Overseen: 86	Currently President Emeritus of New Jersey Institute of Technology (since 2002); formerly President (1978-2002) of New Jersey Institute of Technology; Commissioner (1998-2002) of the Middle States Association Commission on Higher Education; Commissioner (1985-2002) of the New Jersey Commission on Science and Technology; formerly Director (1998-2005) of Society of Manufacturing Engineering Education Foundation; formerly Director of Prosperity New Jersey; formerly a director or trustee of Liberty Science Center, Research and Development Council of New Jersey, New Jersey State Chamber of Commerce, and National Action Council for Minorities in Engineering.	Member (since 2006), Board of The Ridgefield Foundation and The Leir Foundation.
Delayne Dedrick Gold (70) No. of Portfolios Overseen: 86	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.
W. Scott McDonald, Jr. (71) No. of Portfolios Overseen: 86	Formerly Management Consultant (1997-2004) and of Counsel (2004-2005) at Kaludis Consulting Group, Inc. (company serving higher education); Formerly principal (1995-1997), Scott McDonald Associates; Chief Operating Officer (1991-1995), Fairleigh Dickinson University; Executive Vice President and Chief Operating Officer (1975-1991), Drew University; interim President (1988-1990), Drew University; formerly Director of School, College and University Underwriters Ltd.
Thomas T. Mooney (67) No. of Portfolios Overseen: 86	Formerly Chief Executive Officer, Excell Partners, Inc.; formerly President of the Greater Rochester Metro Chamber of Commerce, Rochester City Manager; formerly Deputy Monroe County Executive.
Thomas M. O’Brien (58) No. of Portfolios Overseen: 86	President and COO (since November 2006) and CEO (since April 2007) of State Bancorp, Inc. and State Bank; Vice Chairman (January 1997-April 2000) of North Fork Bank; President and Chief Executive Officer (December 1984-December 1996) of North Side Savings Bank; formerly President and Chief Executive Officer (May 2000-June 2006) Atlantic Bank of New York.	Formerly Director (December 1996-May 2000) of North Fork Bancorporation, Inc.; Formerly Director (May 2000-April 2006) of Atlantic Bank of New York; Director (since November 2006) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
F. Don Schwartz (73) No. of Portfolios Overseen: 86	Management Consultant (since April 1985).
Interested Trustee (1)
Robert F. Gunia (62) No. of Portfolios Overseen: 148	Chief Administrative Officer (since September 1999) and Executive Vice President (since December 1996) of Prudential Investments LLC; President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (since December 2008) of Prudential Investment Management Services LLC; Executive Vice President (since March 1999) and Treasurer (since May 2000) of Prudential Mutual Fund Services LLC; Chief Administrative Officer, Executive Vice President and Director (since May 2003) of AST Investment Services, Inc.	Director (since May 1989) of The Asia Pacific Fund, Inc.

¹ The year that each Trustee joined the Fund’s Board is as follows: Saul K. Fenster, 1983; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr., 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; F. Don Schwartz, 2003.

E1

Fund Officers (a)(1)
Name, Address and Age	Principal Occupation(s) During the Past Five Years
Position with the Fund
Steve Pelletier (55) President and Principal Executive Officer	President of Prudential Annuities (since September 2008); Chairman and CEO, International Investments, Prudential Financial (since January 1998).
Kathryn L. Quirk (56) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC (PI) and Prudential Mutual Fund Services LLC (PMFS); Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (51) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (50) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (34) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (37) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (46) Assistant Secretary	Director and Corporate Counsel (since May 2006) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (49) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc.(PIM) (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (50) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (46) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001 - 2004).
Noreen M. Fierro (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (49) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (45) Assistant Treasurer	Vice President (since 2005) and Director (2000-2005) within Prudential Mutual Fund Administration.
Peter Parrella (50) 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).
Alan Fu (51) Assistant Treasurer	Vice President – Tax, The Prudential Insurance Company of America (1999 to October 2003); Vice President and Corporate Counsel – Tax, Prudential Financial, Inc. (since October 2003).

^(a) Excludes interested Board Members who also serve as President or Vice President.

¹ The year in which each individual became an Officer of the Fund is as follows: Stephen Pelletier, 2008; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Valerie M. Simpson, 2007; Theresa C. Thompson, 2008; Noreen M. Fierro, 2006; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006; Alan Fu, 2006.

Explanatory Notes to Tables:

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

Unless otherwise noted, the address of all Trustees and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.

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

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

“No. of Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which PI serves as manager include the JennisonDryden Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts, The Target Portfolio Trust, The Prudential Series Fund, Advanced Series Trust, The High Yield Income Fund, Inc., The High Yield Plus Fund, Inc., Nicholas-Applegate Fund, Inc. and Prudential’s Gibraltar Fund, Inc.

E2

The Prudential Series Fund

Diversified Conservative Growth Portfolio

Approval of New Subadvisory Agreement

At a meeting of the Board of Trustees (the Board) held on November 12, 2008, the Board approved a new subadvisory agreement for the Diversified Conservative Growth Portfolio (the Portfolio), as explained below.

Pursuant to a recommendation by Prudential Investments LLC (PI), the Board approved a new subadvisory agreement between PI and Eagle Asset Management (Eagle) and the termination of the existing subadvisory agreement with RS Investment Management Co. LLC (RS).

In approving the new subadvisory agreement, the Board considered PI’s assertion that it was advisable and recommended to approve a new subadvisory agreement with Eagle with respect to the Portfolio based on the long-term underperformance of the sleeve of the Portfolio managed by RS. The Board considered an analysis prepared by PI’s Strategic Investments Research Group (SIRG) and noted SIRG’s recommendation that the Portfolio would be better served in the future by switching subadvisers.

Nature, quality and extent of services

The Board received and considered information regarding the nature and extent of services provided to the Portfolio by RS under the current subadvisory agreement and those that would be provided by Eagle under the new subadvisory agreement, noting that the nature and extent of services under the existing and new agreements were generally similar in that RS and Eagle were each required to provide day-to-day portfolio management services and comply with all Fund policies and applicable rules and regulations.

With respect to the quality of services, the Board considered, among other things, the background and experience of the Eagle management team. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio managers who would be responsible for the day-to-day management of the Portfolio. The Board was also provided with information pertaining to the organizational structure, senior management, investment operations, and other relevant information pertaining to Eagle. The Board noted that it received a favorable compliance reports from the Portfolio’s Chief Compliance Officer (CCO) as to Eagle.

The Board concluded that it was satisfied with the nature, extent and quality of the investment subadvisory services anticipated to be provided to the Portfolio by Eagle and that there was a reasonable basis on which to conclude that the Portfolio would benefit from the subadvisory services to be provided by Eagle under the new subadvisory agreement.

Performance

The Board received and considered information regarding the performance of other investment companies managed by Eagle utilizing investment styles and strategies similar to that proposed for the Portfolio. The Board concluded that it was satisfied with the performance record of Eagle.

Investment Subadvisory Fee Rate

The Board considered the proposed subadvisory fee rates payable by PI to Eagle under the proposed new subadvisory agreement, which are lower than the fee rates under the agreement with RS. The Board noted that PI pays the subadvisory fees, and therefore any change in the proposed subadvisory fee rate would not have any impact on the amount of fees paid by the Portfolio. Instead, the decrease will increase the net fee rates retained by PI.

The Board concluded that the proposed subadvisory fee rate under the new subadvisory agreement was reasonable.

Subadviser’s Profitability

Because the engagement of Eagle is new, there is no historical profitability with regard to its arrangements with the Portfolio. As a result, the Board did not consider this factor. The Board noted that profitability would be reviewed annually in connection with the review of advisory agreements.

Economies of Scale

The Board noted that the proposed subadvisory fee schedule for the Portfolio contained breakpoints that reduce the fee rate on assets above specified levels, but did not consider this as a factor, because, as discussed above, PI pays the subadvisory fees.

Other Benefits to the Subadviser or its Affiliates from Serving as Subadviser

The Board considered potential ancillary benefits that might be received by Eagle and its affiliates as a result of its relationships with the Portfolio. The Board concluded that the potential benefits to be derived by Eagle included the ability to use soft dollar credits, brokerage commissions received by affiliates of Eagle, 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 the reputation. The Board concluded that the benefits to be derived by Eagle were consistent with the types of benefits generally derived by subadvisers to mutual funds.

After full consideration of these factors, the Board concluded that the approval of the agreement was in the best interest of the Portfolio and its shareholders.

Annuities are issued by Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992, and Prudential Annuities Life Assurance Corporation, located at One Corporate Drive, Shelton, CT, 06484. Variable annuities are distributed by Prudential Annuities Distributors, Inc., also located in Shelton, CT. Prudential Annuities is a business unit of Prudential Financial.

Variable life insurance is issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102-3777, Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992. Pruco Life Insurance Company is not licensed to do business in New York. Variable life insurance is offered through Pruco Securities LLC, 751 Broad Street, Newark, NJ 07102-3777.

All are Prudential Financial companies and each is solely responsible for its financial condition and contractual obligations.

Life insurance policies and annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with costs and complete details. Contract guarantees are based on the claims-paying ability of the issuing company.

The Prudential Insurance Company of America

751 Broad Street

Newark, NJ 07102-3777

Presorted

Standard

U.S. Postage

PAID

Prudential

The 2008 Audited Financial Statements of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and The Prudential Insurance Company of America are available. You may call 888-778-2888 to obtain a free copy of the audited financial statements of the insurance company that issued your contract.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household (“householding”) in lieu of sending a copy to each Contract Owner who resides in the household. You should be aware that by calling 877-778-5008, you can revoke or “opt out” of householding at any time.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock,” the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

IFS-A114743    PSF-AR-DCG    Ed.2/2009

ANNUAL REPORT December 31, 2008

The Prudential Series Fund

n Jennison 20/20 Focus Portfolio

IFS-AI05395

This report is only authorized for distribution when preceded or accompanied by a current prospectus. Investors should carefully consider the contract and the underlying portfolios’ investment objectives, risks, and charges and expenses before investing. The contract prospectus and the underlying portfolio prospectuses contain information on the investment objectives, risks, and charges and expenses, as well as other important information. Read them carefully before investing or sending money.

A description of the Fund’s proxy voting policies and procedures is available, without charge, upon request. Owners of variable annuity contracts should call 888-778-2888 and owners of variable life insurance contracts should call 800-778-2255 to obtain descriptions of the Fund’s proxy voting policies and procedures. The description is also available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. 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 website of the Commission at www.sec.gov and on the Fund’s website.

The Fund files with the Commission a complete listing of portfolio holdings as of its first and third quarter-end on Form N-Q. Form N-Q is available on the Commission’s website at www.sec.gov or by visiting the Commission’s Public Reference Room. For more information on the Commission’s Public Reference Room, please visit the Commission’s website or call 1-800-SEC-0330. Form N-Q is also available on the Fund’s website at www.prudential.com or by calling the telephone numbers referenced above.

Life insurance policies and annuity contracts contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your licensed financial professional can provide you with costs and complete details. Contract guarantees are based on the claims-paying ability of the issuing company.

Annuities are issued by Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992, and Prudential Annuities Life Assurance Corporation, located at One Corporate Drive, Shelton, CT, 06484. Variable annuities are distributed by Prudential Annuities Distributors, Inc., also located in Shelton, CT. Prudential Annuities is a business unit of Prudential Financial.

Variable life insurance is issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102- 3777, Pruco Life Insurance Company, or in New York, Pruco Life Insurance Company of New Jersey, both located at 213 Washington Street, Newark, NJ 07102-2992. Pruco Life Insurance Company is not licensed to do business in New York. Variable life insurance is offered through Pruco Securities LLC, 751 Broad Street, Newark, NJ 07102-3777.

All are Prudential Financial companies and each is solely responsible for its financial condition and contractual obligations.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock,” the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

The Prudential Series Fund Class II Portfolio’s are available through life insurance contracts issued by various insurance companies other than The Prudential Insurance Company of America and its affiliates and distributed by Prudential Annuities Distributors, Inc., member SIPC, a Prudential Financial Company. Each company is solely responsible for its own financial condition and contractual obligations.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge upon request by calling 800-778-2255.

The Prudential Series Fund Annual Report December 31, 2008

Table of Contents

n LETTER TO CONTRACT OWNERS

n MANAGEMENT REVIEW

n PORTFOLIO COMPOSITION

n FEES AND EXPENSES TABLE

n FINANCIAL REPORTS

A1 Schedule of Investments and Financial Statements

B1 Notes to Financial Statements

C1 Financial Highlights

D1 Report of Independent Registered Public Accounting Firm

E1 Information About Trustees and Officers

The Prudential Series Fund Letter to Contract Owners Annual Report December 31, 2008

n DEAR CONTRACT OWNER

Our objective at Prudential is very simple — we strive to help our clients achieve and maintain financial success. Our Prudential Series Fund annual report details this commitment to you as we focus on ways to help you with your financial security. We hope you find it both informative and useful.

While 2008 presented unprecedented challenges to investors, it also proved that Prudential’s strategies around growing and protecting our clients’ wealth have never been more important.

Your financial professional is the best resource to help you understand how market changes affect your investments. Together, you can develop a diversified mix of investments that works best for you and review it periodically to ensure your financial objectives remain on target.

Thank you for selecting Prudential as one of your financial partners. We value your trust and appreciate the opportunity to help you reach your financial goals.

Sincerely,

Steve Pelletier

President,

The Prudential Series Fund January 30, 2009

PRESIDENT

STEVE PELLETIER

The Prudential Series Fund, Jennison 20/20 Focus Portfolio Subadvised by:  Jennison Associates LLC December 31, 2008

Investment Manager’s Report - As of December 31, 2008

Average Annual Total Return Percentages

	1-Year		5-Year		Since Inception
Portfolio: Class I	-39.15	%	1.60	%	2.01	%
Portfolio: Class II	-39.40		1.19		0.31
S&P 500 Index	-36.99		-2.19		-2.31
Russell 1000® Index	-37.60		-2.04		-1.96

Past performance does not guarantee future returns. 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.

$10,000 INVESTED SINCE INCEPTION¹

Portfolio Class I inception: 5/3/1999. Portfolio Class II inception: 2/15/2000. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Unless noted otherwise, Index returns reflect performance beginning the closest month-end date to the Portfolio’s inception (Class I). The Russell 1000^® Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2008, the Jennison 20/20 Focus Portfolio underperformed its benchmark index (the Index), the Russell 1000^® Index.

Risk factors had the largest negative impact on relative performance. As investors moved toward less risky investments throughout the year, the subadviser’s overexposure to leveraged stocks (stocks in companies with above-market debt-to-asset ratios) and high earnings variability (earnings variation, a measure of the volatility in a company's earnings and cash flow) detracted from returns.

Stock selection in the energy, materials, and telecommunication services sectors meaningfully detracted from returns versus the Index. A significant position in a digital wireless communications company with operations in Mexico and Brazil fell in share value, despite the consistent delivery of solid financial results and increasing subscriber growth. The company lost value due to rapid deterioration in the exchange rate for the Brazilian and Mexican currencies. The Portfolio also had a lower total return in the consumer staples and consumer discretionary sectors.

On the positive side, an underweight in financials was a significant source of relative gain. Stock selection in the industrials and information technology sectors and overweights in healthcare and utilities also added to relative performance. A bright spot was an industry-leading tax preparation franchise, which is energized and under new leadership.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15%, respectively, of the average daily net assets of the Class II shares.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Russell 1000^® Index is a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund Presentation of Portfolio Holdings — unaudited December 31, 2008

Jennison 20/20 Focus
Five Largest Holdings    (% of Net Assets)
Gilead Sciences, Inc.	3.7%
QUALCOMM, Inc.	3.1%
Google, Inc. (Class A Stock)	3.1%
Baxter International, Inc.	3.1%
Genentech, Inc.	3.0%

For average and index definitions, refer to the Glossary of Benchmark Definitions page. Investors cannot invest directly in an index. For a complete list of holdings, please refer to the Schedule of Investments section of this report. Holdings/Issues/Sectors/Industries are subject to change.

The Prudential Series Fund Fees and Expenses — unaudited December 31, 2008

As a contract owner investing in Portfolios of the Fund through a variable annuity or variable life contract, you incur ongoing costs, including management fees, and other Portfolio expenses. 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 investment options. This example does not reflect fees and charges under your variable annuity or variable life contract. If contract charges were included, the costs shown below would be higher. Please consult the prospectus for your contract for more information about contract fees and charges.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2008 through December 31, 2008.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the Portfolio expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six-Month Period” to estimate the Portfolio expenses you paid on your account during this period. As noted above, the table does not reflect variable contract fees and charges.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio and other investment options. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other investment options.

Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any contract fees and charges, such as sales charges (loads), insurance charges or administrative charges. Therefore the second line of the table is useful to compare ongoing investment option costs only, and will not help you determine the relative total costs of owning different contracts. In addition, if these contract fee and charges were included, your costs would have been higher.

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2008		Ending Account Value December 31, 2008		Annualized Expense Ratio based on the Six-Month period		Expenses Paid During the Six-Month period*
Jennison 20/20 Focus (Class I)	Actual	$	1,000.00	$	611.60	0.82	%	$	3.32
	Hypothetical	$	1,000.00	$	1,021.01	0.82	%	$	4.17
Jennison 20/20 Focus (Class II)	Actual	$	1,000.00	$	610.50	1.22	%	$	4.94
	Hypothetical	$	1,000.00	$	1,019.00	1.22	%	$	6.19

* Portfolio 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 December 31, 2008, and divided by the 366 days in the Portfolio’s fiscal year ended December 31, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.

	JENNISON 20/20 FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2008

LONG-TERM INVESTMENTS — 92.7%
COMMON STOCKS — 92.7%	Shares	Value (Note 2)
Biotechnology — 9.2%
Celgene Corp.(a)	91,600	$	5,063,648
Genentech, Inc.(a)	72,800		6,035,848
Gilead Sciences, Inc.(a)	147,500		7,543,149
			18,642,645
Capital Markets — 4.2%
Charles Schwab Corp. (The)	256,600		4,149,222
Goldman Sachs Group, Inc. (The)	51,900		4,379,841
			8,529,063
Chemicals — 1.7%
Monsanto Co.	48,600		3,419,010
Commercial Services & Supplies — 2.2%
Waste Management, Inc.	134,700		4,463,958
Communications Equipment — 7.5%
Cisco Systems, Inc.(a)	243,200		3,964,160
QUALCOMM, Inc.	178,100		6,381,323
Research In Motion Ltd.(a)	121,100		4,914,238
			15,259,721
Computers & Peripherals — 2.0%
Apple, Inc.(a)	48,410		4,131,794
Consumer Finance — 2.3%
SLM Corp.(a)(b)	527,000		4,690,300
Diversified Consumer Services — 4.5%
Career Education Corp.(a)	200,200		3,591,588
H&R Block, Inc.	241,100		5,477,792
			9,069,380
Food & Staples Retailing — 2.1%
CVS/Caremark Corp.	144,500		4,152,930
Food Products — 4.9%
Cadbury Schweppes PLC, ADR (United Kingdom)	149,956		5,348,931
ConAgra Foods, Inc.	281,500		4,644,750
			9,993,681
Healthcare Equipment & Supplies — 5.3%
Alcon, Inc.	51,300		4,575,447
Baxter International, Inc.	115,900		6,211,081
			10,786,528
Healthcare Providers & Services — 1.3%
Aetna, Inc.	88,010		2,508,285
Household Products — 2.4%
Colgate-Palmolive Co.	71,500		4,900,610
Independent Power Producers & Energy Traders — 0.9%
NRG Energy, Inc.(a)(b)	77,900		1,817,407
Insurance — 0.4%
XL Capital Ltd. (Class A Stock)	189,700		701,890
Internet & Catalog Retail — 2.4%
Amazon.com, Inc.(a)(b)	95,500		4,897,240
Internet Software & Services — 4.8%
Google, Inc. (Class A Stock)(a)	20,300		6,245,295
IAC/InterActiveCorp(a)	227,400		3,577,002
			9,822,297

COMMON STOCKS (continued)	Shares	Value (Note 2)
IT Services — 2.9%
Visa, Inc. (Class A Stock)(b)	111,500	$	5,848,175
Media — 3.0%
Comcast Corp. (Class A Stock)	292,500		4,937,400
Sirius XM Radio, Inc.(a)(b)	9,536,640		1,144,397
			6,081,797
Metals & Mining — 4.7%
Century Aluminum Co.(a)	358,700		3,587,000
Freeport-McMoRan Copper & Gold, Inc.	240,200		5,870,488
			9,457,488
Multi-Utilities — 2.2%
Sempra Energy	105,100		4,480,413
Oil, Gas & Consumable Fuels — 10.8%
Occidental Petroleum Corp.	41,700		2,501,583
Petroleo Brasileiro SA, ADR (Brazil)	109,000		2,669,410
Southwestern Energy Co.(a)	163,300		4,730,801
Suncor Energy, Inc.(b)	241,900		4,717,050
Williams Cos., Inc.	331,400		4,798,672
XTO Energy, Inc.	72,200		2,546,494
			21,964,010
Pharmaceuticals — 4.8%
Schering-Plough Corp.	309,100		5,263,973
Teva Pharmaceutical Industries Ltd., ADR (Israel)(b)	106,100		4,516,677
			9,780,650
Software — 3.8%
Adobe Systems, Inc.(a)	120,000		2,554,800
Symantec Corp.(a)(b)	386,100		5,220,072
			7,774,872
Wireless Telecommunication Services — 2.4%
NII Holdings, Inc.(a)	270,900		4,924,962
TOTAL LONG-TERM INVESTMENTS (cost $219,510,115)			188,099,106
SHORT-TERM INVESTMENT — 22.6%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $45,881,373; includes $35,507,737 of cash collateral received for securities on loan) (Note 4)(c)(d)	45,881,373		45,881,373
TOTAL INVESTMENTS — 115.3% (cost $265,391,488)			233,980,479
LIABILITIES IN EXCESS OF OTHER ASSETS — (15.3%)			(30,963,796	)
NET ASSETS — 100.0%		$	203,016,683

SEE NOTES TO FINANCIAL STATEMENTS.

A1

	JENNISON 20/20 FOCUS PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2008

The following abbreviation is used in the portfolio descriptions:

ADR American Depositary Receipt

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $27,080,997; cash collateral of $35,507,737 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2008 in valuing the Portfolio’s assets carried at fair value:

Valuation inputs	Investments in Securities		Other Financial Instruments*
Level 1—Quoted Prices	$	233,980,479	—
Level 2—Other Significant Observable Inputs		—	—
Level 3—Significant Unobservable Inputs		—	—
Total	$	233,980,479	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2007 and December 31, 2008, the Portfolio did not use any Significant Unobservable Inputs (Level 3) in determining the valuation of investments.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2008 was as follow:

Affiliated Money Market Mutual Fund (including 17.5% of collateral received for securities on loan)	22.6	%
Oil, Gas & Consumable Fuels	10.8
Biotechnology	9.2
Communications Equipment	7.5
Healthcare Equipment & Supplies	5.3
Food Products	4.9
Internet & Software Services	4.8
Pharmaceuticals	4.8
Metals & Mining	4.7
Diversified Consumer Services	4.5
Capital Markets	4.2
Software	3.8
Media	3.0
IT Services	2.9
Household Products	2.4
Internet & Catalog Retail	2.4
Wireless Telecommunication Services	2.4
Consumer Finance	2.3
Commercial Services & Supplies	2.2
Multi-Utilities	2.2
Food & Staples Retailing	2.1
Computers & Peripherals	2.0
Chemicals	1.7
Healthcare Providers & Services	1.3
Independent Power Producers & Energy Traders	0.9
Insurance	0.4
	115.3
Liabilities in excess of other assets	(15.3	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A2

JENNISON 20/20 FOCUS PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008

ASSETS
Investments, at value including securities on loan of $27,080,997:
Unaffiliated investments (cost $219,510,115)	$	188,099,106
Affiliated investments (cost $45,881,373)		45,881,373
Cash		436,656
Receivable for Series shares sold		5,545,066
Receivable for investments sold		3,420,163
Dividends and interest receivable		204,741
Foreign tax reclaim receivable		17,107
Prepaid expenses		5,194
Total Assets		243,609,406
LIABILITIES
Collateral for securities on loan		35,507,737
Payable for investments purchased		4,723,893
Management fee payable		118,840
Payable for Series shares repurchased		118,113
Accrued expenses and other liabilities		74,724
Distribution fee payable		30,130
Administration fee payable		18,078
Affiliated transfer agent fee payable		1,208
Total Liabilities		40,592,723
NET ASSETS	$	203,016,683
Net assets were comprised of:
Paid-in capital	$	300,841,862
Retained earnings		(97,825,179	)
Net assets, December 31, 2008	$	203,016,683
Class I:
Net asset value and redemption price per share, $46,700,694 / 5,088,569 outstanding shares of beneficial interest	$	9.18
Class II:
Net asset value and redemption price per share,
$156,315,989 / 17,245,810 outstanding shares of
beneficial interest	$	9.06

STATEMENT OF OPERATIONS

Year Ended December 31, 2008

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $52,443)	$	3,407,831
Affiliated dividend income		403,910
Affiliated income from securities loaned, net		362,336
Interest		835
		4,174,912
EXPENSES
Management fee		2,578,142
Distribution fee—Class II		683,719
Administration fee—Class II		410,269
Transfer agent’s fee and expenses (including affiliated expense of $6,800) (Note 4)		67,000
Shareholders’ reports		55,000
Custodian’s fees and expenses		50,000
Audit fee		17,000
Trustees’ fees		13,000
Legal fees and expenses		8,000
Insurance expenses		4,000
Commitment fee on syndicated credit agreement		2,000
Miscellaneous		7,894
Total expenses		3,896,024
NET INVESTMENT INCOME		278,888
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions		(66,694,837	)
Net change in unrealized appreciation (depreciation) on investments		(83,136,386	)
NET LOSS ON INVESTMENTS		(149,831,223	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(149,552,335	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	278,888		$	391,558
Net realized gain (loss) on investment transactions		(66,694,837	)		22,867,447
Net change in unrealized appreciation (depreciation) on investments		(83,136,386	)		7,758,740
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(149,552,335	)		31,017,745
DISTRIBUTIONS:
Class I		(4,686,743	)		(8,455,776	)
Class II		(18,572,262	)		(27,025,596	)
TOTAL DISTRIBUTIONS		(23,259,005	)		(35,481,372	)
SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold		160,071,162			129,279,557
Series shares issued in reinvestment of distributions		23,259,005			35,481,372
Series shares repurchased		(187,443,418	)		(91,831,050	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(4,113,251	)		72,929,879
TOTAL INCREASE (DECREASE) IN NET ASSETS		(176,924,591	)		68,466,252
NET ASSETS:
Beginning of year		379,941,274			311,475,022
End of year	$	203,016,683		$	379,941,274

SEE NOTES TO FINANCIAL STATEMENTS.

A3

NOTES TO THE FINANCIAL STATEMENTS OF

THE PRUDENTIAL SERIES FUND

Note 1: General

The Prudential Series Fund (“Series Fund”), organized as a Delaware statutory trust, is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended. On January 2, 2006, each Portfolio of the Series Fund changed its federal income tax status from a regulated investment company to a partnership. As a result of that conversion, the Series Fund was reorganized from a Maryland corporation to a Delaware statutory trust. Pursuant to this reorganization, the Series Fund has been renamed “The Prudential Series Fund.” The Series Fund is composed of twenty-eight Portfolios (“Portfolio” or “Portfolios”), each with separate series shares. The information presented in these financial statements pertains to Jennison 20/20 Focus Portfolio.

The Portfolio has the following as investment objectives:

Long-term growth of capital by investing primarily in up to 40 equity securities of U.S. companies that the Portfolio manager believes to have strong capital appreciation potential.

The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government) held by the Portfolio to meet their obligations may be affected by the economic or political developments in a specific industry, region or country.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.

Note 2: Accounting Policies

The following is a summary of significant accounting policies followed by the Series Fund and the Portfolio in preparation of its financial statements.

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the official closing price provided by NASDAQ. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadviser, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange, or at the last bid price in the absence of an asked price. Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Series Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees approved fair valuation procedures. When determining the fair valuation 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 of any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser 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 mutual funds to calculate their net asset values.

B1

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities that are held in the Portfolio which mature in more than 60 days are valued at current market quotations and those short-term debt securities which mature in 60 days or less are valued at amortized cost which approximates market value. The amortized cost method values a security at its cost at the time of purchase and thereafter assumes a constant amortization to maturity of any discount or premium.

Foreign Currency Translation:    The books and records of the Series Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i)  market value of investment securities, other assets and liabilities — at the current daily rates of exchange.

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

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

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

Financial Futures Contracts:    A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Portfolio 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 Portfolio each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts. The Portfolio invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Series Fund intends to purchase, against fluctuations in value caused by changes in prevailing rates or market conditions. Under a variety of circumstances, the Series 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 and the underlying hedged assets.

Financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

Securities Lending:    The Portfolio may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Portfolio. Upon termination of the loan, the borrower will return to the Portfolio securities identical to the loaned securities. Should the borrower of the securities fail financially, the Portfolio has the right to repurchase the securities using the collateral in the open market. The Portfolio 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 Portfolio also continues to receive interest and dividends or amounts equivalent thereto on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

B2

As a result of the bankruptcy filing by Lehman Brothers Holdings Inc., which was the parent company to the Portfolios’ Securities Lending Counter Party, Lehman Brothers Inc. (Lehman), the Portfolios’ Securities Lending Agent utilized collateral held on behalf of the Portfolios for securities out on loan to compensate the Portfolios for the failure of Lehman to return the securities. Any excess collateral was returned to Lehman.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income, which is comprised of four elements: stated coupon, original issue discount, market discount and market premium, is recorded on the accrual basis. Expenses are recorded on the accrual basis. The Series Fund’s expenses are allocated to the respective Portfolios on the basis of relative net assets except for Portfolio specific expenses which are attributable directly to a Portfolio or class level.

For Portfolios with multiple classes of shares, net investment income (loss) (other than administration and distribution fees, which are charged to the respective class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Taxes:    For federal income tax purposes, each Portfolio in the Series Fund is treated as a separate taxpaying entity. The Portfolios are treated as partnerships for tax purposes. No provision has been made in the financial statements for U.S. Federal, state, or local taxes, as any tax liability arising from operations of the Portfolios is the responsibility of their partners. The Portfolios are not generally subject to entity-level taxation. Partners of each Portfolio are subject to taxes on their distributive share of partnership items.

Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Series Fund’s understanding of the applicable country’s tax rules and regulations.

Distributions:    Distributions from each Portfolio are made in cash and automatically reinvested in additional shares of the same Portfolio. The Jennison 20/20 Focus Portfolio makes distributions, if any, at least annually. Distributions are recorded on the ex-date.

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 these estimates.

Note 3: Agreements

The Series Fund has a management agreement with PI. Pursuant to this agreement PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”) (the “Subadviser”), under which Jennison provides investment advisory services for the Portfolio. PI pays for the services of the Subadviser, compensation of officers of the Series Fund, occupancy and certain clerical and administrative expenses of the Series Fund. The Series Fund bears all other costs and expenses.

The management fee paid to PI is computed daily and payable monthly at an annual rate of .75 of 1% of the Portfolio’s average daily net assets.

The Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class I and Class II shares of the Series Fund. The Series Fund compensates PIMS for distributing and servicing the Series Fund’s Class II shares pursuant to a plan of distribution (the “Class II Plan”), 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 I shares of the Series Fund. Pursuant to the Class II Plan, the Class II shares of each Portfolio compensate PIMS for distribution-related activities at an annual rate of 0.25% of the average daily net assets of the Class II shares.

The Series Fund has an administration agreement with PI, which acts as the administrator of the Class II shares of the Series Fund. The administration fee paid to PI is accrued daily and payable monthly, at the annual rate of 0.15% of the average daily net assets of the Class II shares.

PIMS, PI and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

B3

Note 4: Other Transactions with Affiliates

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

For the year ended December 31, 2008, Wachovia Securities LLC, an affiliate of PI, earned approximately $13,548 in brokerage commissions from transactions executed on behalf of the Portfolio.

Prudential Investment Management, Inc. (“PIM”) an indirect, wholly-owned subsidiary of Prudential, serves as the Series Fund’s security lending agent. For the year ended December 31, 2008, PIM was compensated $155,492 for these services for the Jennison 20/20 Focus Portfolio. The Portfolio invests in the Taxable Money Market Series, a portfolio of Dryden Core Investment Fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 5: Portfolio Securities

The aggregate cost of purchases and the proceeds from the sales of securities (excluding government securities and short-term issues) for the year ended December 31, 2008 were $476,714,683 and $411,585,233, respectively.

Note 6: Tax Information

After January 2, 2006, all Portfolios are treated as partnerships for tax purposes. The character of the cash distributions made by the partnerships is generally classified as return of capital nontaxable distributions. After each fiscal year each partner will receive information regarding their distributive allocable share of the partnership’s income, gains, losses and deductions.

Prior to January 2, 2006, each Portfolio, which was incorporated as of that date, qualified as a regulated investment company under the Internal Revenue Code and distributed all of its taxable income, including any net realized gains on investments, to shareholders.

With respect to the Portfolios, book cost of assets differs from tax cost of assets as a result of each Portfolio’s adoption of a mark to market method of accounting for tax purposes. Under this method, tax cost of assets will approximate its fair market value.

Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2008, no provision for income tax would be required in the Portfolios’ financial statements. The Portfolios’ federal and state income 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.

Note 7: Capital

The Series Fund offers Class I and Class II shares. Neither Class I nor Class II shares of a Portfolio are subject to any sales charge or redemption charge and are sold at the net asset value of the Portfolio. Class I shares are sold only to certain separate accounts of Prudential to fund benefits under certain variable life insurance and variable annuity contracts (“contracts”). Class II shares are sold only to separate accounts of non-Prudential insurance companies as investment options under certain contracts. The separate accounts invest in shares of the Series Fund through subaccounts that correspond to the Portfolios. The separate accounts will redeem shares of the Series Fund to the extent necessary to provide benefits under the contracts or for such other purposes as may be consistent with the contracts.

B4

Transactions in shares of beneficial interest of the Jennison 20/20 Focus were as follows:

Class I	Shares		Amount
Year ended December 31, 2008:
Series shares sold	449,176		$	6,090,576
Series shares issued in reinvestment of distributions	301,592			4,686,743
Series shares repurchased	(1,079,530	)		(14,157,181	)
Net increase (decrease) in shares outstanding	(328,762	)	$	(3,379,862	)
Year ended December 31, 2007:
Series shares sold	165,929		$	2,774,313
Series shares issued in reinvestment of distributions	528,156			8,455,776
Series shares repurchased	(1,091,749	)		(18,624,166	)
Net increase (decrease) in shares outstanding	(397,664	)	$	(7,394,077	)
Class II
Year ended December 31, 2008:
Series shares sold	11,620,427		$	153,980,586
Series shares issued in reinvestment of distributions	1,208,345			18,572,262
Series shares repurchased	(14,165,938	)		(173,286,237	)
Net increase (decrease) in shares outstanding	(1,337,166	)	$	(733,389	)
Year ended December 31, 2007:
Series shares sold	7,494,671		$	126,505,244
Series shares issued in reinvestment of distributions	1,709,399			27,025,596
Series shares repurchased	(4,436,889	)		(73,206,884	)
Net increase (decrease) in shares outstanding	4,767,181		$	80,323,956

Note 8: Borrowings

The Portfolio, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with two banks. The SCA provides for a commitment of $500 million. Interest on any borrowings under the SCA is incurred at contracted market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. Effective October 24, 2008, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Funds pay a commitment fee of .13 of 1% of the unused portion of the renewed SCA. The expiration date of the renewed SCA will be October 23, 2009. For the period from October 26, 2007 through October 23, 2008, the Funds paid a commitment fee of .06 of 1% of the unused portion of the agreement. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The Portfolio did not utilize the line of credit during the year ended December 31, 2008.

Note 9: Ownership and Affiliates

As of December 31, 2008, all of Class I shares of the Portfolio were owned of record by the Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

Note 10: New Accounting Pronouncements

In March 2008, the FASB released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

B5

Financial Highlights

	Jennison 20/20 Focus Portfolio
	Class I
	Year Ended December 31,
	2008			2007(c)			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	15.99		$	16.01		$	15.00		$	12.37		$	10.68
Income From Investment Operations:
Net investment income		.06			.07			.08			.06			.04
Net realized and unrealized gain (loss) on investments		(5.94	)		1.63			1.95			2.60			1.66
Total from investment operations		(5.88	)		1.70			2.03			2.66			1.70
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			(.03	)		(.01	)
Distributions		(.93	)		(1.72	)		(1.02	)		—			—
Total dividends and distributions		(.93	)		(1.72	)		(1.02	)		(.03	)		(.01	)
Net Asset Value, end of year	$	9.18		$	15.99		$	16.01		$	15.00		$	12.37
Total Return(a)		(39.15	)%		10.59	%		14.13	%		21.59	%		15.94	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	46.7		$	86.6		$	93.1		$	83.8		$	68.4
Ratios to average net assets(b):
Expenses		.82	%		.82	%		.82	%		.87	%		.88	%
Net investment income		.41	%		.41	%		.58	%		.43	%		.29	%
Portfolio turnover rate		125	%		115	%		119	%		93	%		87	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the portfolio invests.

(c) Calculated based upon average shares outstanding.

	Jennison 20/20 Focus Portfolio
	Class II
	Year Ended December 31,
	2008			2007(c)			2006			2005			2004
Per Share Operating Performance:
Net Asset Value, beginning of year	$	15.78		$	15.81		$	14.83		$	12.23		$	10.60
Income From Investment Operations:
Net investment income		—	(d)		—	(d)		.03			.01			.01
Net realized and unrealized gain (loss) on investments		(5.87	)		1.60			1.91			2.59			1.62
Total from investment operations		(5.87	)		1.60			1.94			2.60			1.63
Less Distributions:
Distributions		(.85	)		(1.63	)		(.96	)		—			—
Net Asset Value, end of year	$	9.06		$	15.78		$	15.81		$	14.83		$	12.23
Total Return(a)		(39.40	)%		10.12	%		13.61	%		21.26	%		15.38	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	156.3		$	293.3		$	218.4		$	159.3		$	101.0
Ratios to average net assets(b):
Expenses		1.22	%		1.22	%		1.22	%		1.27	%		1.28	%
Net investment income (loss)		—	%(e)		—	%(e)		.19	%		.03	%		(.02	)%
Portfolio turnover rate		125	%		115	%		119	%		93	%		87	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the portfolio invests.

(c) Calculated based upon average shares outstanding.

(d) Less than $.005 per share.

(e) Less than .005%.

SEE NOTES TO FINANCIAL STATEMENTS.

C1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE BOARD OF TRUSTEES AND SHAREHOLDERS

THE PRUDENTIAL SERIES FUND — JENNISON 20/20 FOCUS PORTFOLIO:

We have audited the accompanying statement of assets and liabilities of The Prudential Series Fund – Jennison 20/20 Focus Portfolio (hereafter referred to as the “Fund”), including the schedule of investments, as of December 31, 2008, and the related statements of operations for the year then ended, changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of December 31, 2008, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 18, 2009

D1

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)

Information about the Trustees and the Officers of the Fund is set forth below. Trustees who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Fund are referred to as “Interested Trustees.” The Trustees 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.

Independent Trustees (1)
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Saul K. Fenster, Ph.D. (75) No. of Portfolios Overseen: 86	Currently President Emeritus of New Jersey Institute of Technology (since 2002); formerly President (1978-2002) of New Jersey Institute of Technology; Commissioner (1998-2002) of the Middle States Association Commission on Higher Education; Commissioner (1985-2002) of the New Jersey Commission on Science and Technology; formerly Director (1998-2005) of Society of Manufacturing Engineering Education Foundation; formerly Director of Prosperity New Jersey; formerly a director or trustee of Liberty Science Center, Research and Development Council of New Jersey, New Jersey State Chamber of Commerce, and National Action Council for Minorities in Engineering.	Member (since 2006), Board of The Ridgefield Foundation and The Leir Foundation.
Delayne Dedrick Gold (70) No. of Portfolios Overseen: 86	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.
W. Scott McDonald, Jr. (71) No. of Portfolios Overseen: 86	Formerly Management Consultant (1997-2004) and of Counsel (2004-2005) at Kaludis Consulting Group, Inc. (company serving higher education); Formerly principal (1995-1997), Scott McDonald Associates; Chief Operating Officer (1991-1995), Fairleigh Dickinson University; Executive Vice President and Chief Operating Officer (1975-1991), Drew University; interim President (1988-1990), Drew University; formerly Director of School, College and University Underwriters Ltd.
Thomas T. Mooney (67) No. of Portfolios Overseen: 86	Formerly Chief Executive Officer, Excell Partners, Inc.; formerly President of the Greater Rochester Metro Chamber of Commerce, Rochester City Manager; formerly Deputy Monroe County Executive.
Thomas M. O’Brien (58) No. of Portfolios Overseen: 86	President and COO (since November 2006) and CEO (since April 2007) of State Bancorp, Inc. and State Bank; Vice Chairman (January 1997-April 2000) of North Fork Bank; President and Chief Executive Officer (December 1984-December 1996) of North Side Savings Bank; formerly President and Chief Executive Officer (May 2000-June 2006) Atlantic Bank of New York.	Formerly Director (December 1996-May 2000) of North Fork Bancorporation, Inc.; Formerly Director (May 2000-April 2006) of Atlantic Bank of New York; Director (since November 2006) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
F. Don Schwartz (73) No. of Portfolios Overseen: 86	Management Consultant (since April 1985).
Interested Trustee (1)
Robert F. Gunia (62) No. of Portfolios Overseen: 148	Chief Administrative Officer (since September 1999) and Executive Vice President (since December 1996) of Prudential Investments LLC; President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (since December 2008) of Prudential Investment Management Services LLC; Executive Vice President (since March 1999) and Treasurer (since May 2000) of Prudential Mutual Fund Services LLC; Chief Administrative Officer, Executive Vice President and Director (since May 2003) of AST Investment Services, Inc.	Director (since May 1989) of The Asia Pacific Fund, Inc.

¹ The year that each Trustee joined the Fund’s Board is as follows: Saul K. Fenster, 1983; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr., 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; F. Don Schwartz, 2003.

E1

Fund Officers (a)(1)
Name, Address and Age	Principal Occupation(s) During the Past Five Years
Position with the Fund
Steve Pelletier (55) President and Principal Executive Officer	President of Prudential Annuities (since September 2008); Chairman and CEO, International Investments, Prudential Financial (since January 1998).
Kathryn L. Quirk (56) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC (PI) and Prudential Mutual Fund Services LLC (PMFS); Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (51) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (50) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (34) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (37) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (46) Assistant Secretary	Director and Corporate Counsel (since May 2006) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (49) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc.(PIM) (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (50) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (46) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001 - 2004).
Noreen M. Fierro (44) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (49) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (45) Assistant Treasurer	Vice President (since 2005) and Director (2000-2005) within Prudential Mutual Fund Administration.
Peter Parrella (50) 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).
Alan Fu (51) Assistant Treasurer	Vice President – Tax, The Prudential Insurance Company of America (1999 to October 2003); Vice President and Corporate Counsel – Tax, Prudential Financial, Inc. (since October 2003).

^(a) Excludes interested Board Members who also serve as President or Vice President.

¹ The year in which each individual became an Officer of the Fund is as follows: Stephen Pelletier, 2008; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Valerie M. Simpson, 2007; Theresa C. Thompson, 2008; Noreen M. Fierro, 2006; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006; Alan Fu, 2006.

Explanatory Notes to Tables:

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

Unless otherwise noted, the address of all Trustees and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.

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

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

“No. of Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which PI serves as manager include the JennisonDryden Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts, The Target Portfolio Trust, The Prudential Series Fund, Advanced Series Trust, The High Yield Income Fund, Inc., The High Yield Plus Fund, Inc., Nicholas-Applegate Fund, Inc. and Prudential’s Gibraltar Fund, Inc.

E2

The 2008 Audited Financial Statements of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and The Prudential Insurance Company of America are available. You may call 888-778-2888 to obtain a free copy of the audited financial statements of the insurance company that issued your contract.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household (“householding”) in lieu of sending a copy to each Contract Owner who resides in the household. You should be aware that by calling 877-778-5008, you can revoke or “opt out” of householding at any time.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock,” the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

The Prudential Insurance Company of America

751 Broad Street

Newark, NJ 07102-3777

Presorted

Standard

U.S. Postage

PAID

Prudential

IFS-A105395    PSF-AR J2020F    Ed.2/2009

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 973-367-7521, 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. Thomas M. O’Brien, 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 December 31, 2008 and December 31, 2007, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $688,081 and $653,328, 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

None.

(c) Tax Fees

None.

(d) All Other Fees

Not applicable for the fiscal year ended December 31, 2008. For the fiscal year ended December 31, 2007, KPMG, the Registrant’s principal accountant, billed the Registrant $8,333 for professional services rendered in connection with work performed related to inverse floating rate securities.

(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 any 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 services will not adversely affect the independence of the independent accountants. Proposed 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 and 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 $50,000.

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 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 $50,000.

Other Non-audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any

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

Proscribed Services

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

Ø	Bookkeeping or other services related to the accounting records or financial statements of the Fund
Ø	Financial information systems design and implementation
Ø	Appraisal or valuation services, fairness opinions, or contribution-in-kind reports
Ø	Actuarial services
Ø	Internal audit outsourcing services
Ø	Management functions or human resources
Ø	Broker or dealer, investment adviser, or investment banking services
Ø	Legal services and expert services unrelated to the audit
Ø	Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

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

Certain non-audit services provided to Prudential 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 $50,000. 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 Prudential 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 Prudential Investments and its affiliates.

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

One hundred percent of the services described in Item 4(d) were approved by the audit committee.

(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

Not applicable to Registrant for the fiscal years 2008 and 2007. 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 2008 and 2007 was $0 and $48,867, 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)      The Prudential Series Fund

By (Signature and Title)*	/s/Deborah A. Docs
	Deborah A. Docs
	Secretary

Date                 February 13, 2009

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 (Signature and Title)*	/s/Stephen Pelletier
	Stephen Pelletier
	President and Principal Executive Officer

Date                 February 13, 2009

By (Signature and Title)*	/s/Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer

Date                 February 13, 2009

* Print the name and title of each signing officer under his or her signature.

EX-99.CODE-ETH

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

I. Covered Officers/Purpose of the Code

This code of ethics (the “Code”) is established for the funds listed on Attachment A hereto (each a Fund” and together the “Funds”) pursuant to Section 406 of the Sarbanes-Oxley Act and the rules adopted thereunder by the Securities and Exchange Commission (“SEC”). The Code applies to each Fund’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer or Controller, or senior officers performing similar functions (the “Covered Officers” each of whom are set forth in Exhibit B) for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by a Fund;

• compliance with applicable governmental laws, rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

II. Conflicts of Interest

A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with a Fund.

Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the “1940 Act”) and the Investment Advisers Act of 1940, as amended (the “Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as “affiliated persons” of the Fund. A Fund’s and its investment adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationships between a Fund and the Fund’s investment adviser, principal underwriter, administrator, or other service providers to the Fund (together “Service Providers”), of which the Covered Officers may also be principals or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties

(whether formally for a Fund or for a Service Provider, or for both), be involved in establishing policies and implementing decisions that will have different effects on such Service Providers and a Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationships between a Fund and its Service Providers and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds’ Board of Directors/Trustees (“Boards”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act and the Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund.

Each Covered Officer must:

• not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;

• not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Fund; and

• not retaliate against any other Covered Officer or any employee of a Fund or its affiliated persons for reports of potential violations that are made in good faith.

There are some actual or potential conflict of interest situations that should always be brought to the attention of, and discussed with, the Funds’ Chief Legal Officer or other senior legal officer, if material. Examples of these include:

• service as a director on the board of any public or private company;

• the receipt of any non-nominal gifts;

• the receipt of any entertainment from any company with which a Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

• any ownership interest in (other than insubstantial interests in publicly traded entities), or any consulting or employment relationship with, any of a Fund’s Service Providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; and

• a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

2

III. Disclosure and Compliance

Each Covered Officer:

• should familiarize himself with the disclosure requirements generally applicable to the Funds;

• should not knowingly misrepresent, or cause others to misrepresent, facts about a Fund to others, whether within or outside the Fund, including to the Fund’s Board of Directors/Trustees and its auditors, and to governmental regulators and self-regulatory organizations;

• should, to the extent appropriate within his area of responsibility, consult with other officers and employees of a Fund and its Service Providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and

• is responsible to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

IV. Reporting and Accountability

Each Covered Officer must:

• upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board of Directors/Trustees that he has received, read, and understands the Code;

• annually thereafter affirm to the Board of Directors/Trustees that he has complied with the requirements of the Code; and

• notify the Funds’ Chief Legal Officer promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code.

The Funds’ Chief Legal Officer is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. In such situations, the Chief Legal Officer is authorized to consult, as appropriate, with counsel to the Funds, counsel to the Independent Directors/Trustees, a Board Committee comprised of Independent Directors/Trustees, or the full Board.

The Funds will follow the following procedures in investigating and enforcing this Code:

• the Funds Chief Legal Officer will take all appropriate action to investigate any potential violations reported to her;

• if, after such investigation, the Chief Legal Officer believes that no violation has occurred, the Chief Legal Officer is not required to take any further action;

• any matter that the Chief Legal Officer believes is a violation or that the Chief Legal Officer believes should be reviewed by a Fund’s Board or Board Committee comprised of Independent Directors/Trustees will be reported to the Fund’s Board or Board Committee comprised of Independent Directors/Trustees;

3

• based upon its review of any matter referred to it, a Fund’s Board or Board Committee comprised of Independent Directors/Trustees shall determine whether or not a violation has occurred, whether a grant of waiver is appropriate or whether some other action should be taken. Based upon its determination, the Fund’s Board or Board Committee comprised of Independent Directors/Trustees may take such action as it deems appropriate, which may include without limitation: modifications of applicable policies and procedures; notification to appropriate personnel of the Fund’s investment adviser, principal underwriter or administrator, or their boards; notification to other Funds for which the Covered Officer serves as a Covered Officer; or recommendation to dismiss the Covered Officer; and

• any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of a Fund or its Service Providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds’ and their investment adviser’s and principal underwriter’s code of ethics under Rule 17j-1 under the 1940 Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of Independent Directors/Trustees.

VII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund Board of Directors/Trustees, counsel to the Fund, and counsel to the Fund Independent Directors/Trustees.

VIII. Internal Use

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of a Fund, as to any fact, circumstance, or legal conclusion.

IX. Recordkeeping

A Fund shall keep the information disclosed about waivers and amendments under the Code for the period of time as specified in the rules adopted pursuant to Section 406 of the Sarbanes-Oxley Act, and furnish such information to the SEC or its staff upon request.

Adopted and approved as of September 3, 2003.

4

EXHIBIT A

Funds Covered by this Code of Ethics

The Retail Funds:

Target Asset Allocation Funds

Strategic Partners Style Specific Funds

Dryden California Municipal Fund

Cash Accumulation Trust

Dryden Index Series Fund

The Prudential Investment Portfolios, Inc.

Jennison Small Company Fund, Inc.

Dryden Tax-Managed Funds

Dryden Small-Cap Core Equity Fund, Inc.

Jennison Mid-Cap Growth Fund, Inc.

JennisonDryden Portfolios

Prudential World Fund, Inc.

Dryden Government Securities Trust

Jennison Sector Funds, Inc.

Jennison Blend Fund, Inc.

Dryden Global Total Return Fund, Inc.

Dryden High Yield Fund, Inc.

MoneyMart Assets, Inc.

A-1

Dryden National Municipals Fund, Inc.

Dryden Short-Term Bond Fund, Inc.

Dryden Total Return Bond Fund, Inc.

The Target Portfolio Trust

Jennison 20/20 Focus Fund

Dryden Core Investment Fund

Dryden Government Income Fund, Inc.

JennisonDryden Opportunity Funds

Prudential Institutional Liquidity Portfolio, Inc.

Dryden Global Real Estate Fund

Dryden Municipal Bond Fund

Jennison Natural Resources Fund, Inc.

The High Yield Income Fund, Inc.

Nicholas-Applegate Fund, Inc.—Nicholas-Applegate Growth Equity Fund

The Prudential Variable Contract Account – 2

The Prudential Variable Contract Account – 10

The Prudential Variable Contract Account – 11

Strategic Partners Mutual Funds, Inc.

A-2

The Insurance Funds:

Advanced Series Trust

The Prudential Series Fund

Prudential’s Gibraltar Fund, Inc.

A-3

EXHIBIT B

Persons Covered by this Code of Ethics

Judy A. Rice – President and Chief Executive Officer of the Retail Funds

Stephen Pelletier – President and Chief Executive Officer of the Insurance Funds

Grace C. Torres – Treasurer and Chief Financial Officer for the Retail and Insurance Funds

Robert F. Gunia – President and Chief Executive Officer of Nicholas-Applegate Fund, Inc.—Nicholas-Applegate Growth Equity Fund

EX-99.CERT

Item 12

The Prudential Series Fund

Annual period ending 12/31/08

File No. 811-03623

CERTIFICATIONS

I, Stephen Pelletier, certify that:

1. I have reviewed this report on Form N-CSR of The Prudential Series Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 13, 2009

/s/ Stephen Pelletier

Stephen Pelletier

President and Principal Executive Officer

Item 12

The Prudential Series Fund

Annual period ending 12/31/08

File No. 811-03623

CERTIFICATIONS

I, Grace C. Torres, certify that:

1. I have reviewed this report on Form N-CSR of The Prudential Series Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and;

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 13, 2009

/s/ Grace C. Torres

Grace C. Torres

Treasurer and Principal Financial Officer

EX-99.906CERT

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Name of Issuer: The Prudential Series Fund

In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: February 13, 2009	/s/ Stephen Pelletier
	Stephen Pelletier
	President and Principal Executive Officer
Date: February 13, 2009	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer