As filed with the Securities and Exchange Commission on August 18, 2014
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
o PRE-EFFECTIVE AMENDMENT NO.
o POST-EFFECTIVE AMENDMENT NO.
PRUDENTIAL WORLD FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Gateway Center Three, 4 th Floor
100 Mulberry Street
Newark, New Jersey 07102
(Address of Principal Executive Offices)
(973) 367-7521
(Registrants Telephone Number)
Deborah A. Docs, Esq.
Gateway Center Three, 4 th Floor
100 Mulberry Street
Newark, New Jersey 07102
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering : As soon as practicable after this Registration Statement becomes effective under the Securities Act of 1933, as amended.
Title of the securities being registered: Shares of common stock, par value $0.01 per share of Prudential International Equity Fund, a series of the Registrant.
It is proposed that this filing become effective on [September 17], 2014, pursuant to Rule 488(a) under the Securities Act of 1933, as amended.
No filing fee is due because the Registrant is relying on Section 24(f) of the Investment Company Act of 1940, as amended.
PRUDENTIAL INTERNATIONAL VALUE FUND
A SERIES OF PRUDENTIAL WORLD FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
IMPORTANT PROXY MATERIALS
PLEASE VOTE NOW
[September 17], 2014
Dear Shareholder:
I am writing to ask you to vote on an important proposal (the Proposal) whereby all of the assets of Prudential International Value Fund (Value Fund) would be acquired by Prudential International Equity Fund (Equity Fund, and together with Value Fund, the Funds) and the Equity Fund would assume all of the liabilities of the Value Fund (the Reorganization). Each Fund is a series of Prudential World Fund, Inc., a Maryland corporation (World Fund). The shareholders meeting (the Meeting) is scheduled for Wednesday, December 10, 2014 at 10:30 a.m. Eastern time.
The Board of Directors of Value Fund has reviewed and approved the Proposal and recommended that the Proposal be presented to shareholders of Value Fund for their consideration. Although the Directors have determined that the Proposal is in your best interest, the final decision to approve the Proposal is up to you.
Remember, your vote is extremely important, no matter how large or small your holdings. By voting now, you can help avoid additional costs that would be incurred with follow-up letters and calls.
If approved, combining the Funds would give you the opportunity to participate in a fund with an investment objective and investment policies similar to those of Value Fund, and will allow you to enjoy a substantially larger asset base over which expenses may be spread.
The accompanying combined proxy statement and prospectus includes a detailed description of the Proposal. Please read the enclosed materials carefully and cast your vote.
To vote, you may use any of the following methods:
· By Mail. Please complete, date and sign your proxy card before mailing it in the enclosed postage paid envelope. Proxy cards must be received by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.
· By Internet. Have your proxy card available. Go to the web site: www.proxyvote.com . Enter your 12-digit control number from your proxy card. Follow the simple instructions found on the web site. Votes must be entered by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.
· By Telephone. If your fund shares are held in your own name, call 1-800-690-6903 toll-free. If your fund shares are held on your behalf in a brokerage account, call 1-800-454-8683 toll-free. Enter your 12-digit control number from your proxy card. Follow the simple instructions. Votes must be entered by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.
Special Note for Systematic Investment Plans (e.g., Automatic Investment Plan, Systematic Exchange, etc.). Shareholders in systematic investment plans must contact their financial adviser or call our customer service division, toll free, at 1-800-225-1852 to change their investment options. Otherwise, if the proposed transaction is approved, starting on the day following the closing of the proposed transaction (which is expected to occur as soon as reasonably practicable after the Meeting), future purchases will automatically be made in shares of the Equity Fund.
If you have any questions before you vote, please call D. F. King & Co., Inc., at 1-866-828-6929 toll-free. They will be happy to help you understand the proposal and assist you in voting.
Stuart Parker
President
PRUDENTIAL INTERNATIONAL VALUE FUND
A SERIES OF PRUDENTIAL WORLD FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Our Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the Meeting) of Prudential International Value Fund (Value Fund), a series of Prudential World Fund, Inc., a Maryland corporation (the World Fund or the Company), will be held at 100 Mulberry Street, Gateway Center Three, 4th Floor, Newark, New Jersey 07102, on Wednesday, December 10, 2014, at 10:30 a.m. Eastern time.
The purpose of the Meeting is as follows:
1. To approve a Plan of Reorganization of the Company (the Plan) on behalf of Value Fund and Prudential International Equity Fund (Equity Fund). As described in more detail below, the Plan provides for the transfer of all of Value Funds assets to Equity Fund in exchange for the Equity Funds assumption of all of Value Funds liabilities and Value Funds dissolution (the Reorganization). In connection with this proposed transfer and dissolution, each whole and fractional share of each class of Value Fund will be exchanged for whole and fractional shares of equal dollar value of the same class of Equity Fund and outstanding shares of Value Fund will be cancelled. The Board of Directors of World Fund (the Board), on behalf of Value Fund, unanimously recommends that you vote in favor of the proposal.
2. To transact such other business as may properly come before the Meeting or any adjournments of the Meeting.
The matters referred to above are discussed in detail in the Prospectus/Proxy Statement attached to this Notice. The Board has fixed the close of business on September 12, 2014 as the record date for the determination of the shareholders of Value Fund entitled to notice of, and to vote at, the Meeting and any adjournments of the Meeting.
A copy of the Plan is included in Exhibit A to the Prospectus/Proxy Statement attached to this Notice.
Deborah A. Docs
Secretary
Dated: [September 17], 2014
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO COMPLETE THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE BY TELEPHONE OR OVER THE INTERNET AS DESCRIBED IN THE MATERIALS PROVIDED TO YOU. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK FOR YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. A COPY OF THIS COMBINED PROSPECTUS AND PROXY STATEMENT IS AVAILABLE AT THE FUNDS WEBSITE AT WWW.PRUDENTIALFUNDS.COM/FUNDCHANGES.
Your vote is important.
Please return your proxy card promptly
or vote by telephone or over the internet.
INSTRUCTIONS FOR EXECUTING YOUR PROXY CARD
The following general rules for executing proxy cards may be of assistance to you and may help avoid the time and expense involved in validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears on the account registration shown on the proxy card.
2. JOINT ACCOUNTS: Both owners must sign and the signatures should conform exactly to the names shown on the account registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing. This can be shown either in the form of account registration or by the individual executing the proxy card. For example:
VALID SIGNATURE |
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A. |
1. |
XYZ Corporation |
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John Smith, President |
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2. |
XYZ Corporation |
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John Smith, President |
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B. |
1. |
ABC Company Profit Sharing Plan |
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Jane Doe, Trustee |
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2. |
Jones Family Trust |
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Charles Jones, Trustee |
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3. |
Sarah Clark, Trustee |
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Sarah Clark, Trustee |
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C. |
1. |
Thomas Wilson, Custodian |
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Thomas Wilson, Custodian |
The information in this Prospectus/Proxy Statement is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectus/Proxy Statement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS/PROXY STATEMENT
PROXY STATEMENT
for
PRUDENTIAL INTERNATIONAL VALUE FUND, A SERIES OF PRUDENTIAL WORLD FUND, INC.
and
PROSPECTUS
for
PRUDENTIAL INTERNATIONAL EQUITY FUND, A SERIES OF PRUDENTIAL WORLD FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
(973) 367-7521
Dated [September 17], 2014
Reorganization of Prudential International Value Fund
into Prudential International Equity Fund
This combined Proxy Statement and Prospectus (Prospectus/Proxy Statement) is being furnished to the shareholders of Prudential International Value Fund (Value Fund), a series of Prudential World Fund, Inc., a Maryland corporation (World Fund), in connection with the solicitation of proxies by the Board of Directors of World Fund (the Board or the Directors) for use at a special meeting of shareholders of Value Fund and at any adjournments or postponements thereof (the Meeting).
The Meeting will be held at Gateway Center Three, 100 Mulberry Street, 4th Floor, Newark, New Jersey 07102 on Wednesday, December 10, 2014 at 10:30 a.m. Eastern time. This Prospectus/Proxy Statement first will be sent to shareholders on or about October 1, 2014.
The purpose of the Meeting is for shareholders of Value Fund to vote on a Plan of Reorganization (the Plan) under which Value Fund will transfer substantially all of its assets to, and substantially all of its liabilities will be assumed by, Prudential International Equity Fund (Equity Fund, and together with Value Fund, the Funds), also a series of World Fund, in exchange for shares of Equity Fund, which will be distributed to shareholders of Value Fund, and the subsequent cancellation of shares of Value Fund and its liquidation and dissolution (the Reorganization).
If the shareholders of Value Fund approve the Plan, they will become shareholders of Equity Fund.
The investment objectives of the Funds are similar. The investment objective of Value Fund is to seek long-term growth of capital through investment in equity securities of foreign issuers, while the investment objective of Equity Fund is to seek long-term growth of capital. The investment policies of the Funds are also similar. Value Fund invests, under normal circumstances, at least 65% of its total assets in common stock and preferred stock of foreign (non-U.S. based) companies of all sizes. Equity seeks to achieve its objectives by investing at least 80% of investable assets in equity and equity-related securities of foreign (non-U.S. based) companies.
This Prospectus/Proxy Statement sets forth concisely the information about the proposed Reorganization and the issuance of shares of Equity Fund that you should know about before voting. You should retain it for future reference. Additional information about Equity Fund and the proposed Reorganization has been filed with the Securities and Exchange Commission (SEC) and can be found in the following documents, which are incorporated by reference into this Prospectus/Proxy Statement:
· The Prospectus for Equity Fund, dated December 27, 2013, which is enclosed and incorporated by reference into this Prospectus/Proxy Statement;
· The Statement of Additional Information (SAI) for Equity Fund, dated December 27, 2013, which has been filed with the SEC and is incorporated by reference into this Prospectus/Proxy Statement.
· An SAI, dated [September 17], 2014, relating to this Prospectus/Proxy Statement, which has been filed with the SEC and is incorporated by reference into this Prospectus/Proxy Statement.
· An Annual Report to Shareholders for Equity Fund for the fiscal year ended October 31, 2013, which is enclosed and incorporated by reference into this Prospectus/Proxy Statement.
· A Semi-Annual Report to Shareholders for Equity Fund for the fiscal period ended April 30, 2014, which is enclosed and incorporated by reference into this Prospectus/Proxy Statement.
You may request a free copy of these documents by calling 1-800-225-1852 or by writing to Equity Fund at the above address.
The SEC has not approved or disapproved these securities or passed upon the adequacy of this Prospectus/Proxy Statement. Any representation to the contrary is a criminal offense.
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed by, any bank, and are not insured by the Federal Deposit Insurance Corporation or any other U.S. government agency. Mutual fund shares involve investment risks, including the possible loss of principal.
SUMMARY
The following is a summary of certain information contained elsewhere in this Prospectus/Proxy Statement, including the Plan. You should read the more complete information in the rest of this Prospectus/Proxy Statement, including the Plan for Value Fund (attached as Exhibit A ), the Prospectus for Equity Fund ( Exhibit B to this Prospectus/Proxy Statement, which is enclosed), Equity Funds Annual Report to shareholders for its fiscal year ended October 31, 2013 ( Exhibit C to this Prospectus/Proxy Statement, which is enclosed), Equity Funds Semi-Annual Report to shareholders for the period ended April 30, 2014 (Exhibit D to this Prospectus/Proxy Statement, which is enclosed), and the SAI relating to this Prospectus/Proxy Statement. This Prospectus/Proxy Statement is qualified in its entirety by reference to these documents. You should read these materials for more complete information.
The Proposal
You are being asked to consider and approve a Plan that will have the effect of combining Value Fund and Equity Fund into a single mutual fund. The consummation of the Reorganization is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under the Internal Revenue Code of 1986, as amended (the Code). It is expected that the shareholders of Value Fund will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of all of their shares of Value Fund solely for shares of Equity Fund, as described in this Prospectus/Proxy Statement and the Plan.
Value Fund and Equity Fund are each a series of Prudential World Fund, Inc., an open-end investment company that is organized as a Maryland corporation.
If the shareholders of Value Fund vote to approve the Plan, the assets of Value Fund will be transferred to, and all of the liabilities of Value Fund will be assumed by, Equity Fund in exchange for an equal dollar value of shares of the Equity Fund. Shareholders of Value Fund will have their shares exchanged for shares of Equity Fund of equal dollar value based upon the value of the shares at the time Value Funds assets are transferred to Equity Fund. After the transfer of assets and exchange of shares has been completed, Value Fund will be liquidated and dissolved. If shareholders approve the Plan, you will cease to be a shareholder of Value Fund and will become a shareholder of Equity Fund.
For the reasons set forth in the Reasons for the Reorganization section, the Board has determined that the proposed Reorganization of Value Fund is in the best interests of each of Value Fund and Equity Fund, and has also concluded that the shareholders of the Funds would not be subject to any dilution in value as a result of the consummation of the Reorganization.
The Board, on behalf of Value Fund, has approved the Plan and unanimously recommends that you vote to approve the Plan.
Shareholder Voting
Shareholders who own shares of Value Fund at the close of business on September 12, 2014 (the Record Date) will be entitled to vote at the Meeting and any adjournments thereof, and will be entitled to one vote for each full share and a fractional vote for each fractional share that they hold of Value Fund. The approval of the Plan requires the affirmative vote of the holders of a majority (as defined under the Investment Company Act of 1940 (the 1940 Act)) of the total number of shares of capital stock of the Value Fund outstanding and entitled to vote thereon.
Giving effect to the 1940 Act, this means that approval of the Plan requires the vote of the lesser of (i) 67% or more of the voting shares of the Value Fund represented at the meeting at which more than 50% of the outstanding voting shares of Value Fund are present in person or represented by proxy or (ii) more than 50% of the outstanding voting shares of the Value Fund.
Please vote your shares as soon as you receive this Prospectus/Proxy Statement. You may vote by completing and signing the enclosed ballot (proxy card) or over the Internet or by phone. If you vote by any of these methods, your votes will be officially cast at the Meeting for you by persons appointed as proxies. If you own shares in multiple accounts, you will receive multiple proxy cards. Each proxy card must be voted for all of your shares to be voted.
You can revoke or change your voting instructions at any time until the vote is taken at the Meeting. For more details about shareholder voting, see the Voting Information section of this Prospectus/Proxy Statement.
COMPARISON OF IMPORTANT FEATURES
The Investment Objectives, Policies and Principal Risks of the Funds
This section describes the investment objectives and policies of the Funds and the differences between them. For a complete description of the investment policies and risks for Equity Fund, you should read the Prospectus (enclosed as Exhibit B ) for Equity Fund, which is incorporated by reference into this Prospectus/Proxy Statement. Additional information is included in Equity Funds SAI.
The investment objectives of the Funds are similar. The investment objective of Value Fund is to seek long-term growth of capital through investment in equity securities of foreign issuers. The investment objective of Equity Fund is to seek long-term growth of capital. The investment policies of the Funds are also similar. Value Fund invests, under normal circumstances, at least 65% of its total assets in common stock and preferred stock of foreign (non-U.S. based) companies of all sizes. Equity Fund seeks to achieve its objective by investing at least 80% of investable assets in equity and equity-related securities of foreign (non-U.S. based) companies.
Each Fund pursues its investment objective through various investment strategies that are employed by each Funds subadviser. The investment policies and strategies of each Fund are similar, as is further discussed below. Due to the similarity of investment policies and strategies followed by the Funds, investments in the Funds are exposed to a similar set of principal risks, which are also discussed in more detail below.
Value Fund
Principal Investment Strategies. The subadvisers to Value Fund look for investments that they think will increase in value over a period of years. To achieve its objective, Value Fund invests primarily in the common stock and preferred stock of foreign (non-U.S. based) companies of all sizes. Under normal circumstances, Value Fund invests at least 65% of its total assets in common stock and preferred stock of foreign companies in at least three different countries, without limit as to the amount of Value Fund assets that may be invested in any single country. Value Fund may invest anywhere in the world, including North America, Western Europe, the United Kingdom and the Pacific Basin, but generally not in the U.S.
Value Funds assets are managed by two subadvisers. Each subadviser uses a value investment style when deciding which securities to buy for Value Fund. That is, each subadviser invests in stocks that it believes are undervalued, given the issuers financial and business outlook. When a security is no longer undervalued, or the subadviser believes it cannot maintain its current price, the subadviser considers selling that security.
Principal Risks of Investing in Value Fund. All investments have risks to some degree. Please remember that an investment in Value Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks, including possible loss of your original investment.
Market Capitalization Risk. Value Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and medium-sized companies are less stable than the prices of large company stocks and may present greater risks. In exchange for the potentially lower risks of investing in large capitalization companies, Value Funds value may not rise as much as the value of funds that emphasize smaller capitalization companies. Large capitalization companies as a group could fall out of favor with the market, causing Value Fund to underperform compared to investments that focus on smaller capitalized companies.
Market Events. The global financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities and unprecedented volatility in the markets. In response to the crisis, the U.S. government and the Federal Reserve, as well as certain foreign governments and their central banks have taken steps to support financial markets, including keeping interest rates low. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities.
This environment could make identifying investment risks and opportunities especially difficult for the subadviser, and whether or not Value Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of Value Funds investments may be negatively affected. In addition, policy and legislative changes in the United States and other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time.
Risk of Increase in Expenses. Your actual cost of investing in Value Fund may be higher than the expenses shown in the expense table for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Value Fund expense ratios are more likely to increase when markets are volatile.
Equity Securities Risk. The price of a particular stock Value Fund owns could go down and you could lose money. In addition to an individual stock losing value, the value of the equity markets or a sector of them in which Value Fund invests could go down. Different sectors of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Market Risk. The securities markets are volatile and the market prices of Value Funds securities may decline. Securities fluctuate in price based on changes in an issuers financial condition and overall market and economic conditions. If the market prices of the securities owned by Value Fund fall, the value of your investment in Value Fund will decline.
Foreign Securities Risk. Value Funds investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which Value Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of Value Funds investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Investments in foreign securities may be subject to non-U.S. withholding and other taxes.
Value Fund may invest in the securities of foreign issuers in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Value Fund may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.
Currency Risk. Value Funds net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Value Style Risk. Since Value Fund follows a value investment style, there is the risk that the value style may be out of favor for a period of time, that the market will not recognize a securitys intrinsic value for a long time or that a stock judged to be undervalued may actually be appropriately priced.
Geographic Concentration Risk. Value Funds performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which Value Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Management Risk. The value of your investment may decrease if judgments by the subadvisers about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements are incorrect.
Equity Fund
Principal Investment Strategies. The subadviser to Equity Fund looks for investments that it thinks will increase in value over time. Equity Fund seeks to achieve its objective through investment in equity and equity-related securities of foreign (non-U.S. based) companies. Under normal circumstances, Equity Fund invests at least 80% of its investable assets (net assets plus borrowings made for investment purposes) in common stock and preferred stock of foreign companies. Equity Fund will provide 60 days prior written notice to shareholders of a change in this non-fundamental policy. Equity Fund may invest anywhere in the world, including North America, Western Europe, the United Kingdom and the Pacific Basin, but generally not in the U.S. Equity Fund invests in securities of the issuers of any market capitalization size.
Equity Funds portfolio includes both growth and value stocks and seeks to outperform the general international equity market. Under Equity Funds core equity style of investing, selection of securities for Equity Funds portfolio will utilize a combination of active stock selection and risk management based on a number of different factors and criteria, including growth potential, valuation, liquidity and investment risk. Equity Fund may invest a large portion of its assets in a single country or region.
Principal Risks of Investing in Equity Fund. All investments have risks to some degree. Please remember that an investment in Equity Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks, including possible loss of your original investment.
Emerging Markets Risk. The risks of non-U.S. investments are greater for investments in emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by foreigners, or that prevent foreign investors from withdrawing their money at will.
Market Events. The global financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities and unprecedented volatility in the markets. In response to the crisis, the U.S. government and the Federal Reserve, as well as certain foreign
governments and their central banks have taken steps to support financial markets, including keeping interest rates low. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities.
This environment could make identifying investment risks and opportunities especially difficult for the subadviser, and whether or not Equity Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of Equity Funds investments may be negatively affected. In addition, policy and legislative changes in the United States and other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time.
Risk of Increase in Expenses. Your actual cost of investing in Equity Fund may be higher than the expenses shown in the expense table for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.
Equity and Equity-Related Securities Risks. The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which Equity Fund invests could go down. Equity Funds holdings can vary significantly from broad market indexes and the performance of Equity Fund can deviate from the performance of these indexes. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.
Equity Fund may invest in companies that reinvest their earnings rather than distribute them to shareholders. To the extent Equity Fund does invest in such companies, Equity Fund is not likely to receive significant dividend income on its portfolio securities.
Foreign Securities Risk. Equity Funds investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which Equity Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of Equity Funds investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Investments in foreign securities may be subject to non-U.S. withholding and other taxes.
Equity Fund may invest in the securities of foreign issuers in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Equity Fund may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.
Currency Risk. Equity Funds net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Core Style Risk. The portion of the portfolio that makes investments pursuant to a growth strategy may be subject to above-average fluctuations as a result of seeking higher than average capital growth. The portion of the portfolio that makes investments pursuant to a value strategy may be subject to the risk that the market may not recognize a securitys intrinsic value for a long time or that a stock judged to be undervalued may actually be appropriately priced. Historically, growth stocks have performed best during later stages of economic expansion and value stocks have performed best during periods of economic recovery. Therefore, both styles may over time go in and out of favor with the markets. At times when a style is out of favor, that portion of the portfolio may lag the other portion of the portfolio, which may cause Equity Fund to underperform the market in general, its benchmark and other mutual funds. Growth and value stocks have historically produced similar long-term results, though each category has periods when it outperforms the other.
Geographic Concentration Risk. Equity Funds performance may be closely tied to the market, economic, political, regulatory or other conditions in the countries or regions in which Equity Fund invests. This can result in more pronounced risks based upon conditions that impact one or more countries or regions more or less than other countries or regions.
Illiquid Securities Risk. Equity Fund may invest to a greater degree in instruments that trade in lower volumes and may make investments that may be less liquid than other investments. Equity Fund may make investments that may become less liquid in response to market developments or adverse investor perceptions. When there is no willing buyer and investments cannot be readily sold at the desired time or price, Equity Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect Equity Funds value or prevent Equity Fund from being able to take advantage of other investment opportunities.
Market Capitalization Risk. Equity Fund may invest in companies of any market capitalization. Generally, the stock prices of small- and medium-sized companies are less stable than the prices of large company stocks and may present greater risks. In exchange for the potentially lower risks of investing in large capitalization companies, Equity Funds value may not rise as much as the value of funds that emphasize
smaller capitalization companies. Large capitalization companies as a group could fall out of favor with the market, causing Equity Fund to underperform compared to investments that focus on smaller capitalized companies.
Comparison of Other Policies
Diversification
Both Funds are diversified investment companies under the 1940 Act. As diversified investment companies, with respect to 75% of the value of each Funds total assets, the Fund may not purchase a security of any issuer (other than obligations of the U.S. Government, its agencies or instrumentalities, or securities of other investment companies) if, as a result, more than 5% of total assets of the Fund will be invested in the securities of a single issuer or more than 10% of any single issuers outstanding voting securities would be held by the Fund.
Foreign Securities
Both Funds may invest in foreign securities. Value Fund seeks to achieve its investment objective through investment in equity securities of foreign issuers, and under normal conditions invests at least 65% of its total assets in common stock and preferred stock foreign companies in at least three different countries, without limit as to the amount of Fund assets that may be invested in any single country. Value Fund may invest up to 100% of its total assets in U.S. equities on a temporary basis. Equity Fund seeks to achieve its objective through investment in equity and equity-related securities of foreign companies, and under normal conditions invests at least 80% of its investable assets (net assets plus borrowings made for investment purposes) in common stock and preferred stock of foreign companies. Equity Fund may invest up to 100% of its investable assets in foreign securities and/or equity and equity-related securities, and invests in securities of the issuers of any market capitalization size. The principal types of equity and equity-related securities in which Equity Fund invests are common stock and preferred stock. In addition to common stock and preferred stock, Equity Fund may invest in other equity-related securities that include, but are not limited to, rights that can be exercised to obtain stock, warrants and debt securities or preferred stock convertible into or exchangeable for common or preferred stock, and master limited partnerships. Equity Fund may also invest in American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and Indian Depositary Receipts (IDRs). Equity Fund considers ADRs, GDRs, and IDRs to be equity-related securities, but does not consider ADRs and other similar receipts or shares traded in the U.S. markets in which Equity Fund may invest to be foreign securities. Equity Fund may invest up to 40% of its investable assets in emerging market securities. Both Funds may invest anywhere in the world, including North America, Western Europe, the United Kingdom, and the Pacfic Basin, but generally not in the U.S.
Securities Denominated in Foreign Currencies
Both Funds may invest in securities denominated in foreign currencies and may therefore need to engage in foreign currency exchange transactions. Such transactions may occur on a spot basis at the exchange rate prevailing at the time of the transaction. Alternatively, a Fund may enter into forward foreign currency exchange contracts. A forward contract involves an obligation to purchase or sell a specified currency at a specified future date at a price set at the time of the contract.
Fixed-Income Securities
Both Funds may invest in fixed-income securities. Value Fund may invest up to 35% of its total assets in investment-grade bonds and up to 5% of its total assets in high yield junk bonds. Equity Fund may invest up to 20% of its investable assets in investment-grade bonds. Fixed-income securities include bonds and notes. Notes are typically issued with two-, three-, five- or ten-year terms to maturity, whereas bonds are longer-term investments issued with terms to maturity of 10 years or more. Investment-grade obligations are rated in one of the top four long-term quality ratings by a major rating services (such as Baa or BBB or better by Moodys Investors Service, Inc., or Standard & Poors Ratings Services, respectively). High yield debt obligations or junk bonds are, at the time of investment, rated below investment grade by a nationally recognized statistical rating organization or are unrated but judged to be of comparable quality by the Funds subadviser. Junk bonds tend to offer higher yields, but also offer greater credit risks than higher-rated securities.
Money Market Instruments
Both Funds may invest in money market instruments, which include commercial paper of U.S. or foreign companies, foreign government securities, certificates of deposit, bankers acceptances, time deposits of foreign and U.S. banks, and obligations issued by the U.S. government or its agencies. Money market instruments typically have a maturity of one year or less as measured from the date of purchase.
Rule 144A Securities
Each of the Funds may purchase restricted securities that can be offered and sold to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended (1933 Act). The Board of World Fund, on behalf of Value Fund and Equity Fund, has adopted guidelines and delegated to Prudential Investments LLC (PI), the investment manager for each Fund, the daily function of determining and monitoring liquidity of such restricted securities.
Exchange-Traded Funds (ETFs)
Equity Fund may invest in ETFs. ETFs are a type of investment company bought and sold on a securities exchange. An ETF represents a fixed portfolio of securities designed to track a particular market index.
Real Estate Investment Trusts (REITs)
Value Fund may invest in REITs. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended.
Repurchase Agreements
The Funds may use repurchase agreements, where a party agrees to sell a security to a fund and then repurchases it at an agreed-upon price at a stated time. This creates a fixed return for that fund, and is, in effect, a loan by the fund. Repurchase agreements are income producing investments. Value Fund uses repurchase agreements for cash management purposes only.
Warrants and Rights
The Funds may invest in warrants and rights. Warrants and rights are securities permitting, but not obligating, the warrant holder to subscribe for other securities. Buying a warrant does not make either Fund a shareholder of the underlying stock. The warrant holder has no right to dividends or votes on the underlying stock.
Derivative Instruments
Each Fund may utilize various derivative instruments. Generally, with derivatives, the subadviser is trying to predict whether the underlying investmenta security, market index, currency, interest rate or some other asset, rate or indexwill go up or down at some future date. Each Fund may use derivatives to try to reduce risk or to increase return, taking into account the Funds overall investment objective. Derivative instruments include futures, options, options on futures, foreign currency forward contracts and swaps. Because both Funds are global funds and invest in securities denominated in foreign currencies, the Funds may use currency derivative positions. Derivatives involve costs and can be volatile. Derivatives that involve leverage could magnify losses. When using certain derivative strategies, each Fund may need to segregate cash or other liquid securities. Each Funds investments in derivative instruments is limited to a maximum of 25% of each Funds net assets. The Funds cannot guarantee these derivative strategies will work, that the instruments necessary to implement these strategies will be available or that the Funds will not lose money.
Borrowing & Loans
The Funds may borrow money from banks. Each Fund may borrow up to 33 1/3% of the value of its total assets. Each Funds borrowings are limited so that immediately after such borrowing the value of its assets (including borrowings) less its liabilities (not including borrowings) is at least three times the amount of the borrowings. Borrowing by a Fund creates an opportunity for increased net income but, at the same time, creates risks, including the fact that leverage may exaggerate rate changes in the net asset value of such Funds shares and in the yield on the Fund. Each Fund may make loans, including loans of portfolio securities of that Fund.
Temporary Defensive Investments
Although the Funds do not expect to do so ordinarily, during periods of adverse market, economic or political conditions, each Fund may take a temporary defensive position and invest up to 100% of its assets in money market instruments, including short-term obligations of, or securities guaranteed by, the U.S. government, its agencies or instrumentalities or in high-quality obligations of domestic or foreign banks and corporations, and may hold up to 100% of its assets in cash or cash equivalents. While a Fund is in a defensive position, the opportunity to achieve its investment objective will be limited.
Lending of Portfolio Securities
Consistent with the applicable regulatory requirements, each Fund may lend its portfolio securities if the outstanding loans by a Fund do not exceed 33 1/3% of the value of the lending Funds assets and the loans are callable at any time by the Fund.
Illiquid Securities
Each Fund may invest up to 15% of its net assets in illiquid securities. Net assets refers to a Funds assets minus its liabilities. The Funds may be unable to dispose of such holdings quickly or at prices that represent true market value. Certain derivative instruments held by the Funds may also be considered illiquid.
U.S. Government Securities
The Funds may invest in U.S. Government Securities. U.S. Government Securities include (to the extent consistent with the 1940 Act) securities for which the payment of principal and interest is backed by an irrevocable letter of credit issued by the U.S. government, or its
agencies, instrumentalities or sponsored enterprises. U.S. Government Securities also include (to the extent consistent with the 1940 Act) participations in loans made to foreign governments or their agencies that are guaranteed as to principal and interest by the U.S. government or its agencies, instrumentalities or sponsored enterprises. The secondary market for certain of these participations is extremely limited. In the absence of a suitable secondary market, such participations are regarded as illiquid.
Investment Restrictions
Neither Fund may change a fundamental investment restriction without the prior approval of its shareholders. Except as noted, each Fund has adopted fundamental investment restrictions, whereby it shall not: .
1. Issue senior securities or borrow money or pledge its assets, except as permitted by the 1940 Act, and the rules and regulations promulgated thereunder, as each may be amended from time to time except to the extent that the Fund may be permitted to do so by exemptive order, SEC release, no-action letter or similar relief or interpretations (collectively, the 1940 Act Laws, Interpretations and Exemptions). For purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, reverse repurchase agreements, dollar rolls, short sales, derivative and hedging transactions such as interest rate swap transactions, and collateral arrangements with respect thereto, and transactions similar to any of the foregoing and collateral arrangements with respect thereto, and obligations of the Fund to Directors pursuant to deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security.
2. The Funds may not purchase the securities of any issuer if, as a result, the Fund would fail to be a diversified company within the meaning of the 1940 Act Laws, Interpretations and Exemptions.
3. Purchase any security if as a result 25% or more of the Funds total assets would be invested in the securities of issuers having their principal business activities in the same industry, except (i) for temporary defensive purposes, and (ii) for securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
4. Buy or sell physical commodities or contracts involving physical commodities. The Fund may purchase and sell (a) derivative, hedging and similar instruments such as financial futures contracts and options thereon, and (b) securities or instruments backed by, or the return from which is linked to, physical commodities or currencies, such as forward currency exchange contracts, and the Fund may exercise rights relating to such instruments, including the right to enforce security interests and to hold physical commodities and contracts involving physical commodities acquired as a result of the Funds ownership of instruments supported or secured thereby until they can be liquidated in an orderly manner.
5. Buy or sell real estate, except that investment in securities of issuers that invest in real estate and investments in mortgage-backed securities, mortgage participations or other instruments supported or secured by interests in real estate are not subject to this limitation, and except that the Fund may exercise rights relating to the securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.
6. Act as underwriter except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws.
For the purposes of Investment Restriction 1, the 1940 Act Laws, Interpretations and Exemptions permit the Funds to borrow or pledge up to 33 1/3% of the value of its total assets.
The Funds may make loans, including loans of assets of the Fund, repurchase agreements, trade claims, loan participations or similar investments, or as permitted by the 1940 Act Laws, Interpretations and Exemptions. The acquisition of bonds, debentures, other debt securities or instruments, or participations or other interests therein and investments in government obligations, commercial paper, certificates of deposit, bankers acceptances or instruments similar to any of the foregoing will not be considered the making of a loan, and is permitted if consistent with each Funds investment objective.
Whenever any fundamental investment policy or investment restriction states a maximum percentage of each Funds assets, it is intended that, if the percentage limitation is met at the time the investment is made, a later change in percentage resulting from changing total asset values will not be considered a violation of such policy. However, if a Funds asset coverage for borrowings permitted by Investment Restriction 1 falls below 300%, the Fund will take prompt action to reduce its borrowings, as required by the 1940 Act Laws, Interpretations and Exemptions.
For purposes of Investment Restriction 2, the Funds will currently not purchase any security (other than obligations of the U.S. Government, its agencies or instrumentalities) if as a result, with respect to 75% of the Funds total assets, (a) more than 5% of the Funds total assets (determined at the time of investment) would be invested in securities of a single issuer and (b) the Fund would own more than 10% of the outstanding voting securities of any single issuer.
Although not fundamental, the Funds have the following investment restrictions.
Each Fund may not invest in securities of other investment companies, except as permitted under the 1940 Act and the rules thereunder, as amended from time to time, or by any exemptive relief granted by the SEC.
The Funds may not make investments for the purpose of exercising control or management.
In addition, notwithstanding anything to the contrary, Equity Fund may not acquire securities of other investment companies or registered unit investment trusts in reliance on subparagraph (F) or (G) of Section 12(d)(1) of the 1940 Act so long as it is a fund in which one or more of the Prudential Asset Allocation Funds (which are series of The Prudential Investment Portfolios, Inc., Registration Nos. 33-61997, 811-7343) may invest.
Federal Income Tax Considerations
Each Fund is treated as a separate entity for federal income tax purposes. Each Fund has qualified and elected to be treated as a regulated investment company under Subchapter M of the Code, and intends to continue to so qualify in the future. As a regulated investment company, a Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to certain loans of stock and securities, gains from the sale or other disposition of stock, securities or foreign currency and other income (including but not limited to gains from options, futures, and forward contracts) derived with respect to its business of investing in such stock, securities or foreign currency; and (b) diversify its holdings so that, at the end of each quarter of its taxable year, (i) at least 50% of the value of the Funds total assets is represented by cash, cash items, U.S. Government securities, securities of other regulated investment companies, and other securities limited, in respect of any one issuer, to an amount not greater than 5% of the Funds total assets, and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities of any one issuer (other than U.S. government securities or securities of other regulated investment companies) or two or more issuers that are controlled by the Fund and are determined, pursuant to Department of Treasury regulations, to be in the same, similar or related trades or businesses. As a regulated investment company, a Fund (as opposed to its shareholders) will not be subject to federal income taxes on the net investment income and capital gain that it distributes to its shareholders, provided that at least 90% of its net investment income and realized net short-term capital gain in excess of net long-term capital loss for the taxable year is distributed in accordance with the Codes distribution requirements.
The Reorganization may lead to various tax consequences, which are discussed under the caption Certain Federal Tax Consequences of the Reorganization.
Organizational Structure of the Funds
Description Of Shares And Organization.
Value Fund and Equity Fund are separate series of World Fund. World Fund is authorized to issue 4.2 billion shares of common stock, $0.01 per share, which are currently divided into seven portfolios or series, including Value Fund and Equity Fund. Each series of World Fund includes more than one class of shares. Each class of shares represents an interest in the same assets of each Fund and is identical in all respects except that (1) each class is subject to different sales charges and distribution and/or service fees (except for Class Z shares, which are not subject to any sales charges and distribution and/or service fees), which may affect performance, (2) each class has exclusive voting rights on any matter submitted to shareholders that relates solely to its arrangement and has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class, (3) each class has a different exchange privilege, (4) only Class B shares have a conversion feature and (5) Class Z shares are offered exclusively for sale to a limited group of investors.
The charter provides that nothing in it shall be construed to protect any Board Member or officer of the World Fund against liability to the World Fund or its shareholders that may arise from his or her own bad faith, willful misfeasance, gross negligence or reckless disregard of his or her duties. Under its Bylaws, World Fund shall indemnify its present and former directors and officers to the fullest extent permitted or required by Maryland law, and World Fund may indemnify its employees and agents to the extent authorized by the Board, the charter, or the Bylaws and permitted by law.
Pursuant to the charter, the Board may authorize the creation of additional series of shares (the proceeds of which would be invested in separate, independently managed portfolios with distinct investment objectives and policies and share purchase, redemption and net asset value procedures) with such preferences, privileges, limitations and voting and dividend rights as the Board may determine. All consideration received by the World Fund for shares of any additional series, and all assets in which such consideration is invested, belongs to that series (subject only to the rights of creditors of that series) and is subject to the liabilities related thereto. Pursuant to the 1940 Act, shareholders of any additional series of shares would normally have to approve the adoption of any advisory contract relating to such series and of any changes in the investment policies related thereto. The Board has no intention of authorizing additional series at the present time.
The Board has the power to alter the number and the terms of office of the Board, provided that always at least a majority of the Board Members have been elected by the shareholders of the World Fund. The voting rights of shareholders are not cumulative, so that holders of
a plurality of the shares voting can, assuming a quorum, elect all Board members being elected, while the holders of the remaining the holders of shares are unable to elect any Board Members.
Shareholder Meetings
Place of Meeting. World Fund may hold shareholder meetings at any place set by the Board or the Board may determine that the meeting not be held at any place but instead be held by means of remote communication unless a shareholder requests the the Board provide a place for the shareholder meeting.
Record Date. The Board has the sole power to set a record date, which must be at or after the close of business on the day the record date is fixed, and may not be more than 90 or fewer than 10 days prior to the applicable meeting of shareholders.
Annual Meetings. World Fund is not required to hold annual meetings of its shareholders in any year in which the election of directors is not required to be acted upon under the 1940 Act.
Quorum. In general, the presence, in person or by proxy, of shares entitled to cast a majority of all the votes entitled to be cast at the meeting constitutes a quorum.
Adjournments. Whether or not a quorum is present, a meeting of shareholders may, without further notice, be adjourned from time to time to a date not more than 120 days after the original record date for the meeting.
Amendments to Charter
Amendments to World Funds charter generally require the approval of World Funds Board and at least a majority of the votes entitled to be cast by shareholders. However, the Board may amend the charter to change the name of World Fund, or change the designation or par value of shares, without shareholder approval. Under Maryland law, World Funds Board is also authorized to increase or decrease authorized capital stock, and classify and reclassify shares, without shareholder approval.
Amendment of By-Laws
World Funds By-Laws can be amended by the affirmative vote of a majority of all votes entitled to be cast by the shareholders or by the affirmative vote of not less than two-thirds of the Board.
Board of Directors
Number of Members. World Fund may change the number of Directors to any number from three to 20, inclusive.
Removal of Board Members. World Funds shareholders may remove a Board member, with or without cause, by the affirmative vote of two-thirds of all votes entitled to be cast generally in the election of Board members.
Board Vacancies. A vacancy on World Funds Board may be filled by a majority of the remaining members of the Board, even if the remaining directors do not constitute a quorum.
Limitation on Liability of Directors and Officers. Maryland law provides that the charter of a Maryland corporation may limit the liability of its directors and officers to the corporation or its shareholders for monetary damages except for liability resulting from (a) actual receipt of an improper personal benefit or profit in the form of money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action; provided that no director or officer will be protected from any liability to which he or she would otherwise be subject by reason of willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. The World Fund charter does not include such a provision, but it could be amended to include one.
Indemnification of Directors, Officers, Employees and Agents. World Funds Bylaws provide for indemnification of directors and officers to the fullest extent required or permitted by law. The Bylaws also permit World Fund to indemnify employees and agents to the extent authorized by World Funds Board, charter, or Bylaws and as permitted by law. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, a corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses.
Liability of Shareholders
Under Maryland law, World Fund shareholders generally have no personal liability for the debts or obligations of World Fund as a result of their status as shareholders.
Termination and Dissolution
Any vote of shareholders authorizing dissolution of World Fund requires the approval of the holders of a majority of the outstanding shares of all classes. However, under Maryland law, World Fund may transfer all or any part of the assets of a series or class without shareholder approval, and can redeem outstanding shares at net asset value under certain circumstances.
Management of the Funds
Under investment management agreements with World Fund on behalf of the Funds (each a Management Agreement and together, the Management Agreements), Prudential Investments LLC (PI), located at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102, manages the Funds investment operations and administers their business affairs and is responsible for supervising LSV Asset Management (LSV) and Thornburg Investment Management, Inc. (Thornburg) as the subadvisers for Value Fund (the Value Fund Subadvisers) and Quantitiative Management Associates LLC (QMA) as the subadviser for Equity Fund. Pursuant to the Management Agreements, PI is responsible for conducting the initial review of prospective investment subadvisers for each Fund, subject to the Boards supervision. In evaluating a prospective investment subadviser, PI considers many factors, including the firms experience, investment philosophy and historical performance.
PI and its predecessors have served as manager or administrator to investment companies since 1987. PI is a wholly owned subsidiary of Prudential Financial, Inc. (Prudential). Founded in 1875, Prudential is a publicly held financial services company primarily engaged in providing life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services through its wholly-owned subsidiaries.
Subadvisers and Portfolio Managers
Value Fund
LSV Asset Management (LSV) was formed in 1994. LSV is a quantitative value equity manager providing active asset management for institutional clients through the application of proprietary models. As of October 31, 2013, LSV had approximately $79.9 billion in assets under management. LSVs address is 155 North Wacker Drive, 46th Floor, Chicago, Illinois 60606.
The LSV segment of the Fund is co-managed by Josef Lakonishok, Menno Vermeulen, CFA, Puneet Mansharamani, CFA, Greg Sleight, and Guy Lakonishok, CFA.
Josef Lakonishok has served as CEO, CIO, Partner and Portfolio Manager for LSV since its founding in 1994. He has 36 years of investment and research experience.
Menno Vermeulen has served as a Portfolio Manager and Senior Quantitative Analyst of LSV since 1995 and a Portfolio Manager and Partner since 1998. He has 22 years of investment experience.
Puneet Mansharamani has served as a Senior Quantitative Analyst of LSV since 2000, and a Portfolio Manager and Partner since 2006. He has 15 years of investment experience.
Greg Sleight has served as a Quantitative Analyst of LSV since 2006, a Partner since 2012, and a Portfolio Manager since 2014. He has more than 8 years of investment experience.
Guy Lakonishok has served as a Quantitative Analyst of LSV since 2009, a Partner since 2013, and a Portfolio Manager since 2014. He has more than 13 years of investment experience.
Thornburg Investment Management, Inc. (Thornburg) is an independent, employee-owned investment management firm located in Santa Fe, New Mexico. The firm was founded in 1982 and began providing investment management services to clients in 1984. Thornburg uses a fundamental, bottom-up approach to investing which centers on the intrinsic value of each investment. As of October 31, 2013, Thornburg had approximately $93.8 billion in assets under management. Thornburgs address is 2300 North Ridgetop Road, Santa Fe, NM 87506.
Thornburg Managing Director Wendy Trevisani is the portfolio manager for the strategy.
Before joining Thornburg in March 1999, Ms. Trevisani served as an institutional sales representative for Salomon Smith Barney in both New York City and London. Ms. Trevisani holds an MBA degree with a concentration in Finance from Columbia University, and a BA in International Relations from Bucknell University.
Equity Fund
Quantitative Management Associates LLC (QMA) is a wholly-owned subsidiary of Prudential Investment Management, Inc. QMA manages equity and asset allocation portfolios for institutional and retail clients. As of June 30, 2014, QMA managed approximately $114 billion in assets. The address of QMA is Gateway Center Two, 100 Mulberry Street, Newark, New Jersey 07102.
QMA typically follows a team approach in the management of its portfolios. QMA uses a disciplined investment process based on fundamental data, driven by its quantitative investment models. QMA incorporates into its investment process insights gained from its original research and the seasoned judgment of its portfolio managers and analysts. The members of QMAs portfolio management team with primary responsibility for Fund management are listed below.
Jacob Pozharny, PhD, is a Managing Director for QMA, as well as Head of Research and Portfolio Management for Non-US Core Equity. Jacob was previously a Managing Director and head of International Quantitative Equity at the TIAA-CREF organization and Teachers Advisors, Inc., where he was responsible for quantitative stock selection and portfolio construction for the international portfolios. Earlier in his career, Jacob held positions at the University of California, Nicholas-Applegate Capital Management and the Federal Reserve. He earned a BA in Economics, an MS in Statistics, an MS in Finance and Applied Economics, and a PhD in Applied Statistics from the University of California.
John Van Belle, PhD, is a Managing Director for QMA, where he manages QMAs global and non-US portfolios. John has also been a Vice President in Currency Management Consulting Groups at both Bankers Trust and Citibank. He began his career in the research department of the Federal Reserve Bank of New York. He has taught Economics and Finance at the University of Virginia and Rutgers Graduate School of Management and has published numerous articles in the fields of Economics and Finance. John earned a BS in Economics from St. Josephs College and holds a PhD in Economics from the University of Virginia.
Wen Jin, PhD, CFA, is a Principal and Portfolio Manager for QMA, working with the Non-US Core Equity team. His responsibilities include portfolio management, analysis and research. Prior to joining QMA, he was a Portfolio Manager and Director of Quantitative Strategy and Trading at Aristeia Capital Management, where he oversaw derivatives valuation, quantitative trading strategy development and portfolio management. Prior to that, Wen was a Quantitative Strategist in the options trading group at Citadel Investment Group. He earned a BS in Physics from University of Sciences and Technology of China, an MA and PhD in Physics from Columbia University and holds the Chartered Financial Analyst (CFA) designation.
Ping Wang, PhD, is a Managing Director and Portfolio Manager for QMA, working with the Non-US Core Equity team. His responsibilities include portfolio management, analysis and research. Most recently, Ping worked at TIAA-CREF Asset Management, where he performed extensive research in portfolio construction and stock selection in international equity, and also served as portfolio manager on a variety of innovative international products. Previously, he was a Senior Quantitative Analyst at Allstate Investments, where he was responsible for designing and implementing credit analysis for a credit derivatives strategy. Earlier in his career, Ping held positions at Fusion Technology Institute and National Laboratories. He earned a BS in Physics from Beijing Normal University, a MS in Atomic and Molecular Physics from University of Science and Technology of China, and a PhD in Physics from the University of Wisconsin-Madison.
Investment Management Agreements and Fees
The Management Agreements for Value Fund and Equity Fund each provide that PI will not be liable for any error of judgment by PI or for any loss suffered by the Fund in connection with the matters to which the Management Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence or reckless disregard of duties. Each Management Agreement provides that it will terminate automatically, if assigned (as defined in the 1940 Act), and that it may be terminated without penalty by either PI or the Fund by the Board or by vote of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act), upon not more than 60 days nor less than 30 days written notice. Each Management Agreement will continue in effect for a period of more than two years from the date of execution only so long as such continuance is specifically approved at least annually in accordance with the requirements of the 1940 Act.
Fees payable under each Management Agreement are computed daily and paid monthly. The investment management fee rate payable to PI for each Fund, as well as the investment management fees paid by each Fund to PI for the past three fiscal years, are set forth below.
Value Fund
Management Fee Rate: 1.00% to $300 million; 0.95% on next $700 million; 0.90% on $1 billion and above.
Fees Paid to PI:
Fiscal year ended October 31, 2013 |
|
$ |
1,002,438 |
|
Fiscal year ended October 31, 2012 |
|
$ |
949,215 |
|
Fiscal year ended October 31, 2011 |
|
$ |
1,330,603 |
|
Equity Fund
Management Fee Rate: 0.85% to $300 million; 0.75% on next $1.2 billion; 0.70% over $1.5 billion.
Fees Paid to PI:
Fiscal year ended October 31, 2013 |
|
$ |
2,603,835 |
|
Fiscal year ended October 31, 2012 |
|
$ |
2,411,834 |
|
Fiscal year ended October 31, 2011 |
|
$ |
2,884,387 |
|
If the Reorganization is approved, shareholders of Value Fund may experience decreased management fees.
Distribution Plan
Prudential Investment Management Services LLC (PIMS) serves as the principal underwriter and distributor for both Funds. World Fund has adopted a Distribution and Service Plan (commonly known as a 12b-1 Plan) for each class of shares (other than Class Z shares) to compensate PIMS for its services and expenses in distributing shares and servicing shareholder accounts. Under the 12b-1 Plan for each share class, each Fund is authorized to pay PIMS at the following annual rates for assets attributable to the indicated share class:
Share |
|
Rate |
Class A |
|
0.30% of the Funds average daily net assets attributable to Class A shares |
Class B |
|
1.00% of the Funds average daily net assets attributable to Class B shares |
Class C |
|
1.00% of the Funds average daily net assets attributable to Class C shares |
Class Z |
|
None |
· PIMS has contractually agreed until February 28, 2015 to reduce its distribution and service (12b-1) fees for Class A shares to .25% of the average daily net assets of the Class A shares of Value Fund. This waiver may not be terminated by the distributor prior to February 28, 2015 without the approval of the Value Funds Board of Directors.
· Class Z shares are not subject to any distribution or service fees.
Because these fees are paid out of each Funds assets on an ongoing basis, these fees may, over time, increase the cost of an investment in that Fund and may be more costly than other types of sales charges.
PIMS may use distribution and service fees received under the 12b-1 Plan to compensate qualified brokers for services provided in connection with the sale of shares and the maintenance of shareholder accounts.
Valuation
The share value of a mutual fundknown as the net asset value or NAV is determined by a simple calculation: its the total value of the Fund (assets minus liabilities) divided by the total number of shares outstanding. For example, if the value of the investments held by Fund XYZ (minus its liabilities) is $1,000 and there are 100 shares of Fund XYZ owned by shareholders, the value of one share of the Fundor the NAVis $10 ($1,000 divided by 100). The NAV of mutual fund shares changes every day because the value of a funds portfolio changes constantly. For example, if Fund XYZ holds ACME Corp. bonds in its portfolio and the price of ACME bonds goes up, while the value of the Funds other holdings remains the same and expenses dont change, the NAV of Fund XYZ will increase.
The price an investor pays for a Fund share is based on the share value. The share valueknown as the net asset value per share or NAVis determined by subtracting Fund liabilities from the value of Fund assets and dividing the remainder by the number of outstanding shares. NAV is calculated separately for each class. The Fund will compute their NAV once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. Eastern time. For purposes of computing NAV, the Fund will value futures contracts generally 15 minutes after the close of regular trading on the NYSE. The Fund may not compute their NAV on days on which no orders to purchase, sell or exchange shares of the Fund have been received or on days on which changes in the value of the Funds portfolio securities do not materially affect NAV. Please see the NYSE website (www.nyse.com) for a specific list of the holidays on which the NYSE is closed.
In accordance with procedures adopted by the Board, the value of investments listed on a securities exchange and NASDAQ System securities (other than options on stock and stock indices) are valued at the last sale price on the day of valuation or, if there was no sale on such day, the mean between the last bid and asked prices on such day, or at the bid price on such day in the absence of an asked price, as provided by a pricing service or principal market marker. Securities included on the NASDAQ Market are valued at the NASDAQ Official Closing Price (NOCP) on the day of valuation, or if there was no NOCP, at the last sale price. NASDAQ Market Securities for which there was no NOCP or last sale price are valued at the mean between the last bid and asked prices on the day of valuation, or the last bid price in the absence of an asked price. Corporate bonds (other than convertible debt securities) and US Government securities that are actively traded in the OTC market, including listed securities for which the primary market is believed by the Manager in consultation with the subadviser to be over-the-counter, are valued on the basis of valuations provided by an independent pricing agent which uses information with respect to transactions in bonds, quotations from bond dealers, agency ratings, market transactions in comparable securities and various relationships between securities in determining value. Convertible debt securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by the Manager in consultation with the subadviser to be OTC, are valued at the mean between the last reported bid and asked prices provided by principal market makers.
OTC options on stock and stock indices traded on an exchange are valued at the mean between the most recently quoted bid and asked prices on the respective exchange and futures contracts and options thereon are valued at their last sale prices as of the close of trading on the applicable commodities exchange or if there was no sale on the applicable commodities exchange on such day, 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. Quotations of foreign securities in a foreign currency are converted to US dollar equivalents at the current rate obtained from a recognized bank, dealer or independent service, and forward currency exchange contracts are valued at the current cost of covering or offsetting such contacts. Should an extraordinary event, which is likely to affect the value of the security, occur after the close of an exchange on which a portfolio security is traded, such security will be valued at fair value considering factors determined in good faith by the subadviser or Manager under procedures established by and under the general supervision of the Funds Board.
Under the 1940 Act, the Board is responsible for determining in good faith the fair value of securities of the Fund. Portfolio securities for which reliable market quotations are not readily available or for which the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Manager or subadviser (or Valuation Committee or Board) does not represent fair value (Fair Value Securities), are valued by the Valuation Committee or Board in consultation with the subadviser or Manager, as applicable, including, as applicable, their portfolio managers, traders, research and credit analysts, and legal and compliance personnel, on the basis of the following factors: the nature of any restrictions on disposition of the securities; assessment of the general liquidity/illiquidity of the securities; the issuers financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst, media or other reports or information deemed reliable by the Manager or subadviser regarding the issuer or the markets or industry in which it operates; other analytical data; consistency with valuation of similar securities held by other Prudential Investments mutual funds; and such other factors as may be determined by the subadviser, Manager, Board or Valuation Committee to materially affect the value of the security. Fair Value Securities may include, but are not limited to, the following: certain private placements and restricted securities that do not have an active trading market; securities whose trading has been suspended or for which market quotes are no longer available; debt securities that have recently gone into default and for which there is no current market; securities whose prices are stale; securities affected by significant events; and securities that the subadviser or Manager believes were priced incorrectly.
A significant event (which includes, but is not limited to, an extraordinary political or market event) is an event that the subadviser or Manager believes with a reasonably high degree of certainty has caused the closing market prices of portfolio securities to no longer reflect their value at the time of the NAV calculation. On a day that the Manager determines that one or more portfolio securities constitute Fair Value Securities, the Managers Fair Valuation Committee may determine the fair value of these securities if the fair valuation of each security results in a change of less than $0.01 to the Funds NAV and/or the fair valuation of the securities in the aggregate results in a change of less than one half of one percent of the Funds daily net assets and the Fair Valuation Committee presents these valuations to the Board for its ratification. In the event that the fair valuation of a security results in a NAV change of $0.01 or more per share and/or in the aggregate results in a change of one half of one percent or more of the daily NAV, the Board shall promptly be notified, in detail, of the fair valuation, and the fair valuation will be reported on and presented for ratification at the next regularly scheduled Board meeting. Also, the Board receives, on an interim basis, minutes of the meetings of the Valuation Committee that occur between regularly scheduled Board meetings.
In addition, the Fund use a service provided by a pricing vendor to fair value Foreign Fair Value Securities, which are securities that are primarily traded in non-US markets and subject to a valuation adjustment upon the reaching of a valuation trigger determined by the Board. The fair value prices of Foreign Fair Value Securities reflect an adjustment to closing market prices that is intended to reflect the causal link between movements in the US market and the non-US market on which the securities trade.
The use of fair value pricing procedures involves subjective judgments and it is possible that the fair value determined for a security may be materially different from the value that could be realized upon the sale of that security. Accordingly, there can be no assurance that the Fund could obtain the fair value assigned to a security if the security were sold at approximately the same time at which the NAV per share is determined.
Short-term debt securities are valued at cost, with interest accrued of discount amortized to the date of maturity, if their original maturity was 60 days or less, unless this is determined by the Board not to represent fair value. Short-term debt securities with remaining maturities of more than 60 days for which market quotations are readily available are valued at their current market quotations as supplied by an independent pricing agent or more than one principal market maker (if available, otherwise a primary market maker).
Securities for which reliable market quotations are not available or for which the pricing agent or principal market maker does not provide a valuation or provides a valuation that, in the judgment of the Manager, does not present fair value, shall be valued in accordance with the following procedures: At the time of purchase, the duration of the security is to be determined. A Treasury issue (or similar security or index for which market quotes are readily available) (the Proxy) of similar duration will then be selected to serve as a Proxy for the price movements of the security. The price of the security will fluctuate exactly as does the Proxy while maintaining the initial price spread constant. The duration of the security will be reviewed once a month by one or more of the portfolio managers, and at any other time that a portfolio manager believes that there may have been a material change in the duration of the security. Should the duration change, another security or index of similar duration will be chosen to serve as Proxy, at which point the price spread will be determined. In addition, the validity of the pricing methodology will be monitored by (1) comparing the actual sales proceeds of the security to its price reported by the Fund at the time of the sale and (2) periodically obtaining actual market quotes for the security.
Generally, we will value the Funds futures contracts at the close of trading for those contracts (normally 15 minutes after the close of regular trading on the NYSE). If, in the judgment of the subadviser or Manager, the closing price of a contract is materially different from the contract price at the NYSE close, a fair value price for the contract will be determined.
If dividends are declared daily, the NAV of each class of shares will generally be the same. It is expected, however, that the dividends, if any, will differ by approximately the amount of the distribution and/or service fee expense accrual differential among the classes.
Frequent Purchases and Redemptions of Fund Shares
Each Fund seeks to prevent patterns of frequent purchases and redemptions of Fund shares by its shareholders. Frequent purchases and sales of shares of the Fund may adversely affect Fund performance and the interests of long-term investors. When a shareholder engages in frequent or short-term trading, the Fund may have to sell portfolio securities to have the cash necessary to redeem the shareholders shares. This can happen when it is not advantageous to sell any securities, so the Funds performance may be hurt. When large dollar amounts are involved, frequent trading can also make it difficult to use long-term investment strategies because the Fund cannot predict how much cash it will have to invest. In addition, if the Fund is forced to liquidate investments due to short-term trading activity, it may incur increased brokerage and tax costs. Similarly, the Fund may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading.
Moreover, frequent or short-term trading by certain shareholders may cause dilution in the value of Fund shares held by other shareholders. Funds that invest in foreign securities may be particularly susceptible to frequent trading because time zone differences among international stock markets can allow a shareholder engaging in frequent trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the Fund calculates its own share price. Funds that invest in certain fixed-income securities, such as high-yield bonds or certain asset-backed securities, may also constitute an effective vehicle for a shareholders frequent trading strategy.
Each Fund does not knowingly accommodate or permit frequent trading, and the Board of each Fund has adopted policies and procedures designed to discourage or prevent frequent trading activities by Fund shareholders. In an effort to prevent such practices, the Funds transfer agent monitors trading activity on a daily basis. The Funds have implemented a trading policy that limits the number of times a shareholder may purchase Fund shares or exchange into the Fund and then sell those shares within a specified period of time (a round-trip transaction) as established by the Funds Chief Compliance Officer (CCO). The CCO is authorized to set and modify the parameters of the trading policy at any time as required to prevent the adverse impact of frequent trading on Fund shareholders.
The CCO has defined frequent trading as one or more round-trip transactions in shares of the Fund within a 30-day period. If this occurs, the shareholders account will be subject to a 60-day warning period. If a second round-trip occurs before the conclusion of the 60-day warning period, a trading suspension will be placed on the account by the Funds transfer agent, that will remain in effect for 90 days. The trading suspension will relate to purchases and exchange purchases (but not redemptions) in the Fund in which the frequent trading occurred. Exceptions to the trading policy will not normally be granted.
Transactions in the Prudential Investments money market funds are excluded from this policy. In addition, transactions by the Prudential Asset Allocation Funds and the Prudential Real Assets Fund, which are structured as funds-of-funds, and invest primarily in other mutual funds within the Prudential Investments fund family are not subject to the limitations of the trading policy and are not considered frequent or short-term trading.
Each Fund reserves the right to reject or cancel, without prior notice, all additional purchases or exchanges into the Fund by a shareholder. Moreover, the Fund may direct a broker-dealer or other intermediary to block a shareholder account from future trading in the Fund. The Transfer Agent will monitor trading activity over $25,000 per account on a daily basis for a rolling 90-day period. If a purchase into the Fund is rejected or canceled, the shareholder will receive a return of the purchase amount.
If a Fund is offered to qualified plans on an omnibus basis or if Fund shares may be purchased through other omnibus arrangements, such as through a financial intermediary such as a broker-dealer, a bank, an insurance company separate account, an investment adviser, or an administrator or trustee of a retirement plan (Intermediaries) that holds your shares in an account under its name, Intermediaries maintain the individual beneficial owner records and submit to the Fund only aggregate orders combining the transactions of many beneficial owners. Each Fund itself generally cannot monitor trading by particular beneficial owners. Each Fund has notified Intermediaries in writing that it expects the Intermediaries to impose restrictions on transfers by beneficial owners. Intermediaries may impose different or stricter restrictions on transfers by beneficial owners. Consistent with the restrictions described above, investments in a Fund through retirement programs administered by Prudential Retirement will be similarly identified for frequent purchases and redemptions and appropriately restricted.
The Transfer Agent also reviews the aggregate net flows in excess of $1 million. In those cases, the trade detail is reviewed to determine if any of the activity relates to potential offenders. In cases of omnibus orders, the Intermediary may be contacted by the Transfer Agent to obtain additional information. The Transfer Agent has the authority to cancel all or a portion of the trade if the information reveals that the activity relates to potential offenders. Where appropriate, the Transfer Agent may request that the Intermediary block a financial adviser or client from accessing a Fund. If necessary, the Fund may be removed from a particular Intermediarys platform.
Shareholders seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Fund to prevent such trading, there is no guarantee that the Funds, the Transfer Agent or Intermediaries will be able to identify these shareholders or curtail their trading practices. Each Fund does not have any arrangements intended to permit trading of its shares in contravention of the policies described above.
Purchases, Redemptions, Exchanges and Distributions
The purchase policies for each Fund are identical. The offering price is the NAV per share plus any initial sales charge that applies. Class A shares of each Fund are sold at NAV plus an initial sales charge that varies depending on the amount of your investment. In certain circumstances, Class A shares are subject to a contingent deferred sales charge (CDSC). Class C shares of each Fund are sold at NAV per share without an initial sales charge. In addition, if Class C shares are redeemed within 12 calendar months of their purchase, a CDSC of 1.00% will be deducted from the redemption proceeds. Class Z shares are sold at NAV without an initial sales charge and are not subject to a CDSC.
The redemption policies for the Funds are identical. Your shares will be sold at the next NAV per share determined after your order to sell is received, less any applicable CDSC imposed and less such redemption fee or deferred sales charges as may be set by the relevant Funds Board from time to time. Refer to each Funds Prospectus for more information regarding how to sell shares.
Shares of each Fund may be exchanged for shares of the same class of other funds in the mutual fund complex, including those of World Fund, at NAV per share at the time of exchange without a sales charge. If you exchange such shares for the same class of shares of another Fund, any applicable CDSC and the conversion of Class B shares to Class A shares will be calculated based on the date on which you acquired the original shares. After an exchange, at redemption, the CDSC will be calculated from the first day of the month after initial purchase, excluding any time shares were held in a money market fund. The Fund may change the terms of any exchange privilege after giving you 60 days notice. Exchanges of shares involve redemption of the shares of the Fund you own and a purchase of shares of another Fund. Shares are normally redeemed and purchased in the exchange transaction on the business day on which the transfer agent receives an exchange request that is in proper form, if the request is received by the close of the NYSE that day.
Frequent trading of Fund shares in response to short-term fluctuations in the marketalso known as market timingmay make it very difficult to manage a Funds investments. When market timing occurs, the Funds may have to sell portfolio securities to have the cash necessary to redeem the market timers shares. This can happen at a time when it is not advantageous to sell any securities, so the Funds performance may be hurt. When large dollar amounts are involved, market timing can also make it difficult to use long-term investment strategies because we cannot predict how much cash a Fund will have to invest. When, in the opinion of PI, such activity would have a disruptive effect on portfolio management, the Funds reserve the right to refuse purchase orders and exchanges into the Funds by any person, group or commonly controlled account. The decision may be based on dollar amount, volume, or frequency of trading. A Fund will notify a market timer of a rejection of an exchange or purchase order. There can be no assurance that a Funds procedures will be effective in limiting the practice of market timing in all cases.
Each Fund will distribute substantially all of its income and capital gains to shareholders each year. Each Fund will declare dividends, if any, annually.
FEES AND EXPENSES
The following tables describe the fees and expenses that shareholders may pay if they hold shares of the Funds, as well as the unaudited pro forma fees and expenses of the Equity Fund that will continue in effect after consummation of the Reorganization if the Plan is approved. The holding period for shares held by investors in the Funds will be counted in computing the holding period of shares subsequently held in Equity Fund after the Reorganization for purposes of determining any applicable CDSCs. The fees and expenses below of the pro forma Equity Fund after the Reorganization are based on estimated expenses of the Fund during the twelve months ended April 30, 2014.
Certain Expenses are defined herein as taxes, interest, distribution (12b-1) fees and certain extraordinary expenses.
Shareholder Fees and Operating Expenses
Class A Shares (for the twelve months ended April 30, 2014)
Shareholder Fees (fees paid directly from your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Maximum sales charge (load) on purchases |
|
5.50 |
% |
5.50 |
% |
5.50 |
% | |||
Maximum contingent deferred sales charge (load) |
|
1 |
% |
1 |
% |
1 |
% | |||
Redemption Fee |
|
None |
|
None |
|
None |
| |||
Exchange Fee |
|
None |
|
None |
|
None |
| |||
Small account maintenance fee |
|
$ |
15 |
|
$ |
15 |
|
$ |
15 |
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Management Fees |
|
1.00 |
% |
0.85 |
% |
0.82 |
% | |||
+ Distribution (12b-1) Fees |
|
0.30 |
% |
0.30 |
% |
0.30 |
% | |||
+ Other Expenses |
|
0.55 |
% |
0.42 |
% |
0.40 |
% | |||
|
|
|
|
|
|
|
| |||
= Total annual fund operating expenses |
|
1.85 |
% |
1.57 |
% |
1.52 |
% | |||
Fee waiver and/or expense reimbursement |
|
(0.05 |
)% |
0.00 |
% |
0.00 |
% | |||
|
|
|
|
|
|
|
| |||
= Net annual fund operating expenses (including Certain Expenses) |
|
1.80 |
% |
1.57 |
% |
1.52 |
% |
Class B Shares (for the twelve months ended April 30, 2014)
Shareholder Fees (fees paid directly from your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Maximum sales charge (load) on purchases |
|
None |
|
None |
|
None |
| |||
Maximum contingent deferred sales charge (load) |
|
5 |
% |
5 |
% |
5 |
% | |||
Redemption Fee |
|
None |
|
None |
|
None |
| |||
Exchange Fee |
|
None |
|
None |
|
None |
| |||
Small account maintenance fee |
|
$ |
15 |
|
$ |
15 |
|
$ |
15 |
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Management Fees |
|
1.00 |
% |
0.85 |
% |
0.82 |
% | |||
+ Distribution (12b-1) Fees |
|
1.00 |
% |
1.00 |
% |
1.00 |
% | |||
+ Other Expenses |
|
0.55 |
% |
0.42 |
% |
0.40 |
% | |||
|
|
|
|
|
|
|
| |||
= Total annual fund operating expenses |
|
2.55 |
% |
2.27 |
% |
2.22 |
% | |||
Fee waiver and/or expense reimbursement |
|
0.00 |
% |
0.00 |
% |
0.00 |
% | |||
|
|
|
|
|
|
|
| |||
= Net annual fund operating expenses (including Certain Expenses) |
|
2.55 |
% |
2.27 |
% |
2.22 |
% |
Class C Shares (for the twelve months ended April 30, 2014)
Shareholder Fees (fees paid directly from your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Maximum sales charge (load) on purchases |
|
None |
|
None |
|
None |
| |||
Maximum contingent deferred sales charge (load) |
|
1 |
% |
1 |
% |
1 |
% | |||
Redemption Fee |
|
None |
|
None |
|
None |
| |||
Exchange Fee |
|
None |
|
None |
|
None |
| |||
Small account maintenance fee |
|
$ |
15 |
|
$ |
15 |
|
$ |
15 |
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Management Fees |
|
1.00 |
% |
0.85 |
% |
0.82 |
% | |||
+ Distribution (12b-1) Fees |
|
1.00 |
% |
1.00 |
% |
1.00 |
% | |||
+ Other Expenses |
|
0.55 |
% |
0.42 |
% |
0.40 |
% | |||
|
|
|
|
|
|
|
| |||
= Total annual fund operating expenses |
|
2.55 |
% |
2.27 |
% |
2.22 |
% | |||
Fee waiver and/or expense reimbursement |
|
0.00 |
% |
0.00 |
% |
0.00 |
% | |||
|
|
|
|
|
|
|
| |||
= Net annual fund operating expenses (including Certain Expenses) |
|
2.55 |
% |
2.27 |
% |
2.22 |
% |
Class Z Shares (for the twelve months ended April 30, 2014)
Shareholder Fees (fees paid directly from your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Maximum sales charge (load) on purchases |
|
None |
|
None |
|
None |
| |||
Maximum contingent deferred sales charge (load) |
|
None |
|
None |
|
None |
| |||
Redemption Fee |
|
None |
|
None |
|
None |
| |||
Exchange Fee |
|
None |
|
None |
|
None |
| |||
Small account maintenance fee |
|
None |
|
None |
|
None |
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
| |||
Management Fees |
|
1.00 |
% |
0.85 |
% |
0.82 |
% | |||
+ Distribution (12b-1) Fees |
|
0.00 |
% |
0.00 |
% |
0.00 |
% | |||
+ Other Expenses |
|
0.55 |
% |
0.42 |
% |
0.40 |
% | |||
|
|
|
|
|
|
|
| |||
= Total annual fund operating expenses |
|
1.55 |
% |
1.27 |
% |
1.22 |
% | |||
Fee waiver and/or expense reimbursement |
|
0.00 |
% |
0.00 |
% |
0.00 |
% | |||
|
|
|
|
|
|
|
| |||
= Net annual fund operating expenses (including Certain Expenses) |
|
1.55 |
% |
1.27 |
% |
1.22 |
% |
Expense Examples
These examples are intended to help you compare the cost of investing in each Fund before the Reorganization with the cost of investing in the Equity Fund after consummation of the Reorganization. They assume that you invest $10,000 in a Fund for the time periods indicated, that your investment has a 5% return each year and that each Funds operating expenses remain the same, except for any contractual and service (12b-1) fee waivers and overall expense limitations that may be in effect during the one year period. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis.
Full Redemption Although your actual costs may be higher or lower, based on the above assumptions you would pay the following expenses if you redeemed your shares at the end of each period:
Class A Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
723 |
|
$ |
1,095 |
|
$ |
1,491 |
|
$ |
2,596 |
|
Equity Fund |
|
$ |
701 |
|
$ |
1,018 |
|
$ |
1,358 |
|
$ |
2,315 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
696 |
|
$ |
1,004 |
|
$ |
1,333 |
|
$ |
2,263 |
|
Class B Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
758 |
|
$ |
1,093 |
|
$ |
1,455 |
|
$ |
2,634 |
|
Equity Fund |
|
$ |
730 |
|
$ |
1,009 |
|
$ |
1,315 |
|
$ |
2,347 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
725 |
|
$ |
994 |
|
$ |
1,290 |
|
$ |
2,295 |
|
Class C Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
358 |
|
$ |
793 |
|
$ |
1,355 |
|
$ |
2,885 |
|
Equity Fund |
|
$ |
330 |
|
$ |
709 |
|
$ |
1,215 |
|
$ |
2,605 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
325 |
|
$ |
694 |
|
$ |
1,190 |
|
$ |
2,554 |
|
|
|
|
|
|
|
|
|
|
|
Class Z Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
158 |
|
$ |
490 |
|
$ |
845 |
|
$ |
1,845 |
|
Equity Fund |
|
$ |
129 |
|
$ |
403 |
|
$ |
697 |
|
$ |
1,534 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
124 |
|
$ |
387 |
|
$ |
670 |
|
$ |
1,477 |
|
No Redemption Although your actual costs may be higher or lower, you would pay the following expenses on the same investment if you did not redeem your shares at the end of each period:
Class A Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
723 |
|
$ |
1,095 |
|
$ |
1,491 |
|
$ |
2,596 |
|
Equity Fund |
|
$ |
701 |
|
$ |
1,018 |
|
$ |
1,358 |
|
$ |
2,315 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
696 |
|
$ |
1,004 |
|
$ |
1,333 |
|
$ |
2,263 |
|
Class B Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
258 |
|
$ |
793 |
|
$ |
1,355 |
|
$ |
2,634 |
|
Equity Fund |
|
$ |
230 |
|
$ |
709 |
|
$ |
1,215 |
|
$ |
2,347 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
225 |
|
$ |
694 |
|
$ |
1,190 |
|
$ |
2,295 |
|
Class C Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
258 |
|
$ |
793 |
|
$ |
1,355 |
|
$ |
2,885 |
|
Equity Fund |
|
$ |
230 |
|
$ |
709 |
|
$ |
1,215 |
|
$ |
2,605 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
225 |
|
$ |
694 |
|
$ |
1,190 |
|
$ |
2,554 |
|
Class Z Shares |
|
One Year |
|
Three Years |
|
Five Years |
|
Ten Years |
| ||||
Value Fund |
|
$ |
158 |
|
$ |
490 |
|
$ |
845 |
|
$ |
1,845 |
|
Equity Fund |
|
$ |
129 |
|
$ |
403 |
|
$ |
697 |
|
$ |
1,534 |
|
Pro Forma Equity Fund After Reorganization |
|
$ |
124 |
|
$ |
387 |
|
$ |
670 |
|
$ |
1,477 |
|
These examples assume that all dividends and other distributions are reinvested and that the percentage amounts listed under Total annual fund operating expenses remain the same in the years shown. These examples illustrate the effect of expenses, but are not meant to suggest actual or expected expenses, which may vary. The assumed return of 5% is not a prediction of, and does not represent, actual or expected performance of any Fund.
Performance of the Funds
The following tables show each Funds performance for the indicated share class for each full calendar year of operations or for the last 10 calendar years, whichever is shorter. The Annual Total Returns and Average Annual Total Returns tables demonstrate the risk of investing in each Fund by showing how returns can change from year to year and by showing how the Funds average annual total returns for each share class compare with a broad-based securities market index and a group of similar mutual funds. Past performance (before and after taxes) does not mean that the Fund will achieve similar results in the future.
Value Fund
Annual Total Returns % (Class A shares) (1)
2004 |
|
15.71 |
% |
2005 |
|
15.44 |
% |
2006 |
|
28.11 |
% |
2007 |
|
15.39 |
% |
2008 |
|
-45.48 |
% |
2009 |
|
32.41 |
% |
2010 |
|
10.03 |
% |
2011 |
|
-13.42 |
% |
2012 |
|
15.82 |
% |
2013 |
|
18.91 |
% |
(1) These annual total returns do not include sales loads or account fees, if these amounts were reflected, returns would be less than shown. The return of the Class A shares from 1-1-14 to 6-30-14 was 1.49%.
BEST QUARTER: 26.78% (2nd Quarter 2009) WORST QUARTER: -22.07% (4th Quarter 2008)
Average Annual Total Returns % (with sales charges) (as of December 31, 2013 )
Return Before |
|
ONE |
|
FIVE |
|
TEN |
|
Class B shares |
|
13.02 |
|
10.70 |
|
5.66 |
|
Class C shares |
|
16.98 |
|
10.84 |
|
5.66 |
|
Class Z shares |
|
19.19 |
|
11.97 |
|
6.73 |
|
Class A shares % |
|
|
|
|
|
|
|
Return Before Taxes |
|
12.37 |
|
10.42 |
|
5.86 |
|
Return After Taxes on Distributions |
|
12.09 |
|
10.20 |
|
5.28 |
|
Return After Taxes on Distribution and Sale of Fund Shares |
|
7.22 |
|
8.34 |
|
4.90 |
|
Index % (reflects no deduction for fees, expenses or taxes) |
|
|
|
|
|
|
|
MSCI EAFE® ND Index |
|
22.78 |
|
12.44 |
|
6.91 |
|
Lipper International Multi-Cap Core Funds Average* |
|
19.86 |
|
12.54 |
|
6.57 |
|
Lipper Customized Blend Funds Average* |
|
19.90 |
|
12.31 |
|
6.70 |
|
° After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for other classes will vary due to differing sales charges and expenses.
*The Fund is compared to the Lipper Customized Blend Funds Performance Universe, although Lipper classifies the Fund in the Lipper International Multi-Cap Core Funds Performance Universe. The Lipper Customized Blend Funds Performance Universe is utilized because the Funds manager believes that the funds included in this Universe provide a more appropriate basis for Fund performance comparisons.
Equity Fund
Annual Total Returns % (Class A shares) (1)
2004 |
|
22.95 |
% |
2005 |
|
13.16 |
% |
2006 |
|
25.67 |
% |
2007 |
|
8.74 |
% |
2008 |
|
-47.30 |
% |
2009 |
|
28.30 |
% |
2010 |
|
7.00 |
% |
2011 |
|
-11.64 |
% |
2012 |
|
19.68 |
% |
2013 |
|
20.17 |
% |
(1)These annual total returns do not include sales charges. If sales charges were included, the annual total returns would be lower than those shown. The return of the Class A shares from 1-1-14 to 6-30-14 was 5.95%.
BEST QUARTER: 27.41% (2nd Quarter 2009) WORST QUARTER: -22.15% (3rd Quarter 2008)
Average Annual Total Returns % (with sales charges) (as of December 31, 2013 )
Return Before |
|
ONE |
|
FIVE |
|
TEN |
|
Class B shares |
|
14.29 |
|
10.84 |
|
4.98 |
|
Class C shares |
|
18.29 |
|
10.97 |
|
4.98 |
|
Class Z shares |
|
20.38 |
|
12.01 |
|
5.99 |
|
Class A shares % |
|
|
|
|
|
|
|
Return Before Taxes |
|
13.56 |
|
10.52 |
|
5.15 |
|
Return After Taxes on Distributions |
|
13.03 |
|
10.16 |
|
4.73 |
|
Return After Taxes on Distribution and Sale of Fund Shares |
|
8.07 |
|
8.43 |
|
4.16 |
|
Index % (reflects no deduction for fees, expenses or taxes) |
|
|
|
|
|
|
|
MSCI ACWI Ex-U.S. Index* |
|
15.29 |
|
12.81 |
|
7.57 |
|
MSCI EAFE® ND Index* |
|
22.78 |
|
12.44 |
|
6.91 |
|
Lipper International Multi-Cap Core Funds Average |
|
19.86 |
|
12.54 |
|
6.57 |
|
° After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for other classes will vary due to differing sales charges and expenses.
*The Fund no longer utilizes the MSCI EAFE® ND Index, and instead utilizes the MSCI ACWI Ex-U.S. Index for performance comparisons, because the Funds investment Manager believes that the MSCI ACWI Ex-U.S. Index provides a more appropriate basis for Fund performance comparisons, due to the fact that the Funds investment policies recently changed to permit increased exposure to emerging markets securities, and the MSCI ACWI Ex-U.S. Index includes emerging markets securities while the MSCI EAFE® ND Index does not include emerging markets securities.
REASONS FOR THE REORGANIZATION
The Directors of World Fund, including all of the Directors who are not interested persons of the World Fund (collectively, the Independent Directors), on behalf of Value Fund and Equity Fund, have unanimously determined that the Reorganization would be in the best interests of each of the Funds. The Board concluded that the interests of the shareholders of each Fund would not be diluted as a result of consummation of the Plan.
At a meeting held on August 18, 2014, PI advised the Directors that, as of June 30, 2014, Value Fund had net assets of approximately $59 million, while Equity Fund had assets of approximately $315 million at that date. Accordingly, by merging the Funds, shareholders would enjoy a greater asset base over which fund expenses may be spread.
PI advised the Directors that pro forma expenses based on average annual net assets for the twelve months ending April 30, 2014 and based on net assets as of June 30, 2014 were lower than both Funds expenses at April 30, 2014.
In recommending approval of the Plan, PI advised the Directors that the Funds are both international equity funds with similar investment objectives, similar investment policies, and substantially similar investment restrictions. PI noted that there is overlap in the securities held by Value Fund and Equity Fund. However, to the extent dispositions of Value Fund securities are made in order to facilitate the Reorganization efficiently, such dispositions will result in taxable gains or losses and transaction costs to the Value Fund (if the dispositions are made prior to the Reorganization) or to Equity Fund (if the dispositions are made after the Reorganization). The Directors were also advised that Equity Fund had better investment performance over the one-, three-, and five-year periods ended June 30, 2014 than Value Fund for the same periods.
The Directors also considered that PI would bear the full cost of the Reorganization.
The Directors also considered that it is a condition to the closing of the Reorganization that Value Fund and Equity Fund receive an opinion of counsel substantially to the effect that the exchange of shares pursuant to the Plan would not result in a taxable gain or loss for U.S. federal income tax purposes for shareholders of Value Fund.
Consequently, the Directors approved the Plan on behalf of Value Fund and recommend that shareholders of Value Fund vote to approve the Plan.
For the reasons discussed above, the Board of Directors of World Fund on behalf of Value Fund unanimously recommend that you vote FOR the Plan.
If shareholders of Value Fund do not approve the Plan, the Board, on behalf of Value Fund, will consider other possible courses of action for Value Fund, including, among others, consolidation of Value Fund with one or more affiliated funds other than the Equity Fund, adding one or more new subadvisers or replacing the current subadviser with one or more subadvisers. In the event that the shareholders of Value Fund do not approve the Plan, PI may consider recommending to the Board and shareholders the liquidation of Value Fund in light of its past and anticipated future inability to attract sufficient assets to support long-term viability. Unlike the proposed Reorganization, a liquidation of Value Fund would result in taxable gains or losses for most shareholders of Value Fund.
REORGANIZATION
This is only a summary of the Plan. You should read the actual form of the Plan attached hereto as Exhibit A.
Closing
If the shareholders of Value Fund approve the Plan, the Reorganization will take place after various conditions are satisfied by Value Fund, including the preparation of certain documents. Value Fund will determine a specific date for the actual Reorganization to take place (which is expected to take place in the fourth quarter of 2014 or first quarter of 2015). The date on which the Reorganization will occur is called the closing date. If shareholders of the Value Fund do not approve the Plan, the Reorganization will not take place and the Board, on behalf of Value Fund, will consider alternative courses of actions, as described above.
If the shareholders of Value Fund approve the Plan, World Fund will deliver to Equity Fund all of Value Funds assets and Equity Fund will assume all of the liabilities of Value Fund on the closing date. World Fund will issue to Value Fund shares of Equity Fund of a value equal to the dollar value of the net assets delivered to Equity Fund by Value Fund. Value Fund will then distribute to its shareholders of record as of the close of business on the closing date, Equity Fund shares in the equivalent value and of the equivalent class as such shareholder holds in Value Fund. Value Fund will subsequently terminate and dissolve and Equity Fund will be the surviving fund. The stock transfer books of Value Fund will be permanently closed on the closing date. Requests to transfer or redeem assets allocated to Value Fund may be submitted at any time before the close of the NYSE on the closing date and requests that are received in proper form prior to that time will be effected prior to the closing date.
To the extent permitted by law, Value Fund may amend the Plan without shareholder approval. Value Fund may also agree to terminate and abandon the Plan at any time before or, to the extent permitted by law, after the approval by shareholders of Value Fund.
Expenses Resulting from the Reorganization
The expenses resulting from the Reorganization, including proxy solicitation costs (collectively, Reorganization costs) are further detailed below. PI and/or its affiliates will bear the full amount of the Reorganization costs.
Estimated Reorganization Expenses
Printing of Proxy Statements |
|
$ |
35,000 |
|
Processing/Mailing of Proxy Statements |
|
$ |
35,000 |
|
Solicitation Expenses |
|
$ |
55,000 |
|
Legal Expenses |
|
$ |
80,000 |
|
Audit Fees |
|
$ |
17,000 |
|
|
|
|
| |
Total Estimated Reorganization Expenses |
|
$ |
222,000 |
|
Certain Federal Tax Consequences of the Reorganization
The consummation of the Reorganization is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under the Code. It is a condition to each Funds obligation to complete the Reorganization that the Fund will have received an opinion from Shearman & Sterling LLP, based upon representations made by each Fund, and upon certain assumptions, substantially to the effect that:
· The acquisition by Equity Fund of the assets of Value Fund in exchange solely for voting shares of Equity Fund and the assumption by Equity Fund of the liabilities, if any, of the Value Fund, followed by the distribution of the Equity Fund shares received by Value Fund pro rata to its shareholders, will constitute a reorganization within the meaning of Section 368(a) of the Code, and Equity Fund and Value Fund each will be a party to a reorganization within the meaning of Section 368(b) of the Code;
· The shareholders of Value Fund will not recognize gain or loss upon the exchange of all of their shares of Value Fund solely for shares of Equity Fund, as described in this Prospectus/Proxy Statement and the Plan;
· No gain or loss will be recognized by Value Fund upon the transfer of its assets to Equity Fund in exchange solely for voting shares of Equity Fund and the assumption by Equity Fund of the liabilities, if any, of the Value Fund. In addition, no gain or loss will be recognized by Value Fund on the distribution of such shares to the shareholders of that Fund (in liquidation of Value Fund);
· No gain or loss will be recognized by Equity Fund upon the acquisition of the assets of Value Fund in exchange solely for voting shares of Equity Fund and the assumption of the liabilities, if any, of Value Fund;
· Equity Funds tax basis for the assets acquired from Value Fund will be the same as the tax basis of the assets when held by Value Fund immediately before the transfer, and the holding period of such assets acquired by Equity Fund will include the holding period of such assets when held by Value Fund;
· Value Fund shareholders tax basis for the shares of Equity Fund received by them pursuant to the reorganization will be the same as their tax basis in Value Fund shares exchanged therefor; and
· The holding period of Equity Fund shares received by the shareholders of Value Fund will include the holding period of Value Fund shares exchanged therefor, provided such Fund shares were held as capital assets on the date of the exchange.
An opinion of counsel is not binding on the Internal Revenue Service (the IRS) or the courts. If the Reorganization is consummated but fails to qualify as a reorganization within the meaning of Section 368(a) of the Code, the Reorganization would be treated as a taxable sale of assets by Value Fund to Equity Fund followed by a taxable liquidation of Value Fund, and the shareholders of Value Fund would recognize taxable gains or losses equal to the difference between their adjusted tax basis in the shares of Value Fund and the fair market value of the shares of Equity Fund receive in exchange therefor.
Value Fund has approximate capital loss carryforwards as of October 31, 2013 of $21,492,000 and Equity Fund has approximate capital loss carryforwards as of October 31, 2013 of $223,340,000. Sales by Value Fund of portfolio securities prior to the merger may result in realized gains or losses on such securities. Net realized gains in excess of prior year capital loss carryforward (if any) would be distributed to shareholders of Value Fund prior to the merger. In a tax-free reorganization, the Equity Fund generally succeeds to capital loss carryforwards of the Value Fund on the transfer date pursuant to Section 381 of the Code. There are several rules that may limit the ability of the Equity Fund to utilize either its own capital loss carryforwards or those of the Value Fund after the transfer date. Section 381 limits the amount of gain of the Equity Fund that can be offset by the capital loss carryforwards of the Value Fund in the first taxable year ending after the reorganization. A second rule (pursuant to Sections 382 and 383 of the Code) limits the amount of post-reorganization capital gain of Equity Fund that can be offset annually by Value Funds capital loss carryforwards, in general, to the value of the equity of Value Fund immediately before the reorganization multiplied by the applicable long-term tax-exempt bond rate (as published by the IRS). Additional rules may further limit the utilization of the capital losses. As a result of these limitations, a portion of the capital loss carryforwards of Value Fund may expire before they can be utilized.
Shareholders of Value Fund should consult their tax advisers regarding the tax consequences to them of the Reorganization in light of their individual circumstances. In addition, because the foregoing discussion relates only to the U.S. federal income tax consequences of the Reorganization, shareholders also should consult their tax advisers as to state, local and foreign tax consequences to them, if any, of the Reorganization.
Capitalization
The following table sets forth, as of April 30, 2014, the capitalization of shares of the Funds. The table also shows the unaudited pro forma capitalization of Equity Fund shares as adjusted to give effect to the proposed Reorganization. The capitalization of Equity Fund is likely to be different when the Plan is consummated.
Class A |
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
|
Pro Forma Equity |
| ||||
Net assets |
|
$ |
36,516,668 |
|
$ |
234,298,479 |
|
$ |
|
|
$ |
270,815,147 |
|
Total shares outstanding |
|
1,562,645 |
|
31,034,565 |
|
3,274,000 |
(a) |
35,871,210 |
| ||||
Net asset value per share |
|
$ |
23.37 |
|
$ |
7.55 |
|
|
|
$ |
7.55 |
| |
Class B |
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
|
Pro Forma Equity |
| ||||
Net assets |
|
$ |
1,449,848 |
|
$ |
6,029,642 |
|
$ |
|
|
$ |
7,479,490 |
|
Total shares outstanding |
|
65,072 |
|
830,623 |
|
134,632 |
(a) |
1,030,327 |
| ||||
Net asset value per share |
|
$ |
22.28 |
|
$ |
7.26 |
|
|
|
$ |
7.26 |
| |
Class C |
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
|
Pro Forma Equity |
| ||||
Net assets |
|
$ |
4,912,703 |
|
$ |
19,521,894 |
|
$ |
|
|
$ |
24,434,597 |
|
Total shares outstanding |
|
220,077 |
|
2,690,269 |
|
456,604 |
(a) |
3,366,950 |
| ||||
Net asset value per share |
|
$ |
22.32 |
|
$ |
7.26 |
|
|
|
$ |
7.26 |
| |
Class Z |
|
Value Fund |
|
Equity Fund |
|
Pro Forma |
|
Pro Forma Equity |
| ||||
Net assets |
|
$ |
16,516,881 |
|
$ |
47,505,240 |
|
$ |
|
|
$ |
64,022,121 |
|
Total shares outstanding |
|
702,281 |
|
6,249,630 |
|
1,470,993 |
(a) |
8,422,904 |
| ||||
Net asset value per share |
|
$ |
23.52 |
|
$ |
7.60 |
|
|
|
$ |
7.60 |
| |
(a) Reflects the change in shares of Value Fund upon conversion in Equity Fund.
VOTING INFORMATION
Required Vote
Only shareholders of record of Value Fund on the Record Date will be entitled to vote at the Meeting. On the Record Date, there were [ ] shares of Value Fund issued and outstanding.
The presence in person or by proxy of the holders of a majority of the outstanding shares of Value Fund entitled to be voted at the Meeting is required to constitute a quorum of Value Fund at that Meeting. Shares beneficially held by shareholders present in person or represented by proxy at the Meeting will be counted for the purpose of calculating the votes cast on the issues before the Meeting. If a quorum is present the affirmative vote of the holders of a majority of the total number of shares of capital stock of Value Fund outstanding and entitled to vote thereon is necessary to approve the Plan, subject to the 1940 Act. Giving effect to the 1940 Act, approval of the Plan requires the vote of the lesser of (i) 67% or more of the voting shares of Value Fund represented at a meeting at which more than 50% of the outstanding voting shares of the Value Fund are present in person or represented by proxy or (ii) more than 50% of the outstanding voting shares of the Value Fund. Each shareholder of Value Fund will be entitled to one vote for each full share and a fractional vote for each fractional share of Value Fund held at the close of business on the Record Date.
Shares held by shareholders present in person or represented by proxy at the Meeting will be counted both for the purposes of determining the presence of a quorum and for calculating the votes cast on the issues before the Meeting.
Under existing NYSE rules, brokers, banks and other nominees will not be entitled to vote Value Funds shares with respect to the Plan unless the beneficial owner gives specific instructions for such vote to the broker or other nominee. When a broker executes and returns a proxy card but is unable to cast a vote on a matter without specific instructions, and no specific instructions are given, the result is referred to as a broker non-vote. Value Fund will forward proxy materials to record owners for any beneficial owners that such record owners may represent.
Abstentions and broker non-votes will count towards determining the presence of a quorum at the Meeting. However, shares represented by broker non-votes and abstentions will not be voted for or against the Reorganization or any adjournment. Therefore, since approval of the Plan
requires the affirmative vote of a majority of the total number of shares of Value Fund outstanding at the Record Date, each broker non-vote and abstention would have the effect of a vote AGAINST the Plan or against an adjournment.
In the event that sufficient votes to obtain a quorum have not been obtained by Value Fund, Value Fund may request that one or more brokers submit a specific number of broker non-votes necessary in order to obtain the quorum. Value Fund would only take such actions if Value Fund believed that it would have sufficient shareholder votes to approve the proposal at the Meeting. Therefore, shareholders who are against the proposal for the approval of the Plan should vote AGAINST the Plan or against adjournment since if such shareholders take no action they may be assisting in having the Plan approved.
Shareholders having more than one account in Value Fund generally will receive a single proxy statement and a separate proxy card for each account. It is important to mark, sign, date and return all proxy cards received.
In the event that sufficient votes to approve the Plan are not received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies.
How to Vote
You can vote your shares in any one of four ways:
· By mail, with the enclosed proxy card.
· In person at the Meeting.
· By phone.
· Over the Internet.
If you simply sign and date the proxy but give no voting instructions, your shares will be voted in favor of the Plan and in accordance with the views of management upon any unexpected matters that come before the Meeting or adjournment of the Meeting.
Revocation of Proxies
Proxies, including votes given by telephone or over the Internet, may be revoked at any time before they are voted either (i) by a written revocation received by the Secretary of Value Fund at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102 within a reasonable time prior to the Meeting, (ii) by properly submitting a later-dated proxy that is received by 11:59 p.m. Eastern time on the day prior to the Meeting, or (iii) by attending the Meeting and voting in person. Merely attending the Meeting without voting, however, will not revoke a previously submitted proxy.
Solicitation of Voting Instructions
Voting instructions will be solicited principally by mailing this Prospectus/Proxy Statement and its enclosures, but instructions also may be solicited by telephone, facsimile, through electronic means such as email, or in person by officers or representatives of Value Fund. In addition, Value Fund has engaged D. F. King & Co., Inc., a professional proxy solicitation firm, to assist in the solicitation of proxies. As the Meeting date approaches, you may receive a phone call from a representative of D. F. King & Co., Inc. if Value Fund has not yet received your vote. D. F. King & Co., Inc. may ask you for authority, by telephone, to permit D. F. King & Co., Inc. to execute your voting instructions on your behalf. Proxy solicitation costs are currently estimated to be approximately $55,000. PI and/or its affiliates will pay the full cost of the Reorganization.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS
AND PORTFOLIO HOLDINGS
Portfolio Managers
Set out below is additional information with respect to the portfolio managers for the each of the Funds. Unless noted otherwise, all information is provided as of each Funds most recent fiscal year end.
Value Fund Portfolio Managers: Information About Other Accounts & Ownership of Fund Securities
Set forth below is information about other accounts managed by each portfolio manager and ownership of Fund securities. The information shows, for each portfolio manager, the number of accounts managed and the total assets in such accounts, within each of the indicated categories. For each category, the number of accounts and total assets in the accounts whose fees are based on performance is indicated in italics typeface. The Ownership of Fund Securities column shows the dollar range of equity securities of the Fund beneficially owned by the portfolio manager. Information shown below is as of Value Funds most recently completed fiscal year, unless noted otherwise.
Subadviser |
|
Portfolio |
|
Registered |
|
Other Pooled |
|
Other |
|
Ownership |
|
LSV Asset Management |
|
Josef Lakonishok |
|
29/$11,015,492,000 |
|
46/$13,502,785,000 6/$637,509,200* |
|
405/$55,401,550,900 36/$9,561,936,300 |
|
None |
|
|
|
Menno Vermuelen, CFA |
|
29/$11,015,492,000 |
|
46/$13,502,785,000 6/$637,509,200 |
|
405/$55,401,550,900 36/$9,561,936,300 |
|
None |
|
|
|
Puneet Mansharamani, CFA |
|
29/$11,015,492,000 |
|
46/$13,502,785,000 6/$637,509,200 |
|
405/$55,401,550,900 36/$9,561,936,300 |
|
None |
|
|
|
Greg Sleight |
|
None |
|
None |
|
None |
|
None |
|
Thornburg Investment Management, Inc. |
|
|
|
None |
|
None |
|
None |
|
None |
|
|
|
Wendy Trevisani |
|
14/$33,700,000,000 |
|
18/$6,500,000,000 |
|
58/$9,800,000,000 |
|
None |
|
(a) Accounts are managed on a team basis. If a portfolio manager is a member of a team, any account managed by that team is included in the number of accounts and total assets for such portfolio manager (even if such portfolio manager is not primarily involved in the day-to-day management of the account).
(b) Other Accounts excludes the assets and number of accounts in wrap fee programs that are managed using model portfolios.
*The portfolio manager only manages a portion of the accounts subject to a performance fee. The market value shown reflects the portion of those accounts managed by the portfolio manager. Performance fee accounts are indicated in italics typeface.
Equity Fund Portfolio Managers: Information About Other Accounts & Ownership of Fund Securities
Set forth below is information about other accounts managed by each portfolio manager and ownership of Fund securities. The information shows, for each portfolio manager, the number of accounts managed and the total assets in such accounts, within each of the indicated categories. For each category, the number of accounts and total assets in the accounts whose fees are based on performance is indicated in italics typeface. The Ownership of Fund Securities column shows the dollar range of equity securities of the Fund beneficially owned by the portfolio manager. Information shown below is as of Equity Funds most recently completed fiscal year, unless noted otherwise.
Subadviser |
|
Portfolio |
|
Registered |
|
Other Pooled |
|
Other |
|
Ownership |
|
Quantitative Management Associates LLC (a) |
|
Jacob Pozharny |
|
6/$1,620,677,075 |
|
10/$1,964,508,229 |
|
26/$7,268,502,585 |
|
None |
|
|
|
John Van Belle |
|
6/$1,620,677,075 |
|
10/$1,964,508,229 |
|
26/$7,268,502,585 |
|
None |
|
|
|
Wen Jin |
|
6/$1,620,677,075 |
|
10/$1,964,508,229 |
|
26/$7,268,502,585 |
|
None |
|
|
|
Ping Wang |
|
6/$1,620,677,075 |
|
10/$1,964,508,229 |
|
26/$7,268,502,585 |
|
None |
|
(a) QMA Other Pooled Investment Vehicles includes commingled insurance company separate accounts, commingled trust funds and other commingled investment vehicles. QMA Other Accounts includes single client accounts, managed accounts (which are counted as one account per managed account
platform), asset allocation clients, and accounts of affiliates. The assets in certain accounts have been estimated due to the availability of information only at the end of calendar quarters.
(b) Accounts are managed on a team basis. If a portfolio manager is a member of a team, any account managed by that team is included in the number of accounts and total assets for such portfolio manager (even if such portfolio manager is not primarily involved in the day-to-day management of the account).
(c) Other Accounts excludes the assets and number of accounts in wrap fee programs that are managed using model portfolios.
Additional Information About the Portfolio ManagersCompensation and Conflicts of Interest. Set forth below, for each Portfolio Manager, is an explanation of the structure of, and method(s) used to determine, portfolio manager compensation. Also set forth below, for each Portfolio Manager, is an explanation of any material conflicts of interest that may arise between a Portfolio Managers management of a Portfolios investments and investments in other accounts.
LSV Asset Management (LSV)
PORTFOLIO MANAGER COMPENSATION . LSV Portfolio Managers receive a base salary and bonus which is a function of overall firm profitability. In addition, each portfolio manager is a partner and receives a portion of the firms net income.
POTENTIAL CONFLICTS. The same team of portfolio managers is responsible for the day-to-day management of all of LSVs accounts. A potential conflict of interest could arise in relation to accounts with a performance-based fee relative to other accounts in the same strategy without a performance-based fee and accounts in which employees may be invested. LSV has policies and procedures to monitor for this potential conflict and designed to ensure that investment opportunities are fairly allocated to all clients.
Thornburg Investment Management, Inc. (Thornburg)
COMPENSATION. The compensation of the portfolio manager includes an annual salary, annual bonus, and company-wide profit sharing. The portfolio manager also owns equity shares in the investment manager, Thornburg Investment Management, Inc. (Thornburg) . Both the salary and bonus are reviewed approximately annually for comparability with salaries of other portfolio managers in the industry, using survey data obtained from compensation consultants. The annual bonus is subjective. Criteria that are considered in formulating the bonus include, but are not limited to, the following: revenues available to pay compensation of the portfolio manager; multiple year historical total return of accounts managed by the portfolio manager, relative to market performance and single year historical total return of accounts managed by the portfolio manager.
CONFLICTS OF INTEREST. Most investment advisors and their portfolio managers manage investments for multiple clients, including mutual funds, private accounts, and retirement plans. In any case where a portfolio manager manages the investments of two or more accounts, there is a possibility that conflicts of interest could arise between the portfolio managers management of the funds investments and the managers management of other accounts. These conflicts could include:
|
· |
|
Allocating a favorable investment opportunity to one account but not another. |
|
· |
|
Directing one account to buy a security before purchases through other accounts increase the price of the security in the market place. |
|
· |
|
Giving substantially inconsistent investment directions at the same time to similar accounts, so as to benefit one account over another. |
|
· |
|
Obtaining services from brokers conducting trades for one account, which are used to benefit another account. |
Thornburg has informed the Funds that it has considered the likelihood that any material conflicts of interest could arise between the portfolio managers management of a Funds investments and the portfolio managers management of other accounts. Thornburg has also informed the Funds that it has not identified any such conflicts that may arise, and has concluded that it has implemented policies and procedures to identify and resolve any such conflict if it did arise.
Quantitative Management Associates LLC (QMA)
COMPENSATION. QMAs investment professionals are compensated through a combination of base salary, a performance-based annual cash incentive bonus and an annual long-term incentive grant. QMA regularly benchmarks its compensation program against leading asset management firms to monitor competitiveness.
The salary component is based on market data relative to similar positions within the industry as well as the past performance, years of experience and scope of responsibility of the individual.
An investment professionals incentive compensation, including both the annual cash bonus and long-term incentive grant, is largely driven by a persons contribution to QMAs goal of providing investment performance to clients consistent with portfolio objectives, guidelines and risk parameters. In addition, a persons qualitative contributions would also be considered in determining compensation. An investment professionals long-term incentive grant is currently divided into two components: (i) 80% of the value of the grant is subject to increase or decrease based on the annual performance of certain QMA strategies, and (ii) 20% of the value of the grant consists of stock options and/or restricted stock of Prudential Financial, Inc. (QMAs ultimate parent company). The long-term incentive grants are subject to vesting requirements. The incentive compensation of each investment professional is not based solely or directly on the performance of the Fund (or any other individual account managed by QMA) or the value of the assets of the Fund (or any other individual account managed by QMA).
The size of the annual cash bonus pool available for individual grants is determined quantitatively based on two primary factors: 1) investment performance of composites representing QMAs various investment strategies on a 1-year and 3-year basis relative to appropriate market peer groups and the indices against which our strategies are managed, and 2) business results as measured by QMAs pre-tax income.
The size of the annual long-term incentive pool available for individual grants is determined based on a percentage of the total compensation of QMAs eligible employees for the prior year.
CONFLICTS OF INTEREST. Like other investment advisers, QMA is subject to various conflicts of interest in the ordinary course of its business. QMA strives to identify potential risks, including conflicts of interest, that are inherent in its business, and conducts annual conflict of interest reviews. When actual or potential conflicts of interest are identified, QMA seeks to address such conflicts through one or more of the following methods:
· Elimination of the conflict;
· Disclosure of the conflict; or
· Management of the conflict through the adoption of appropriate policies and procedures.
QMA follows Prudential Financials policies on business ethics, personal securities trading, and information barriers. QMA has adopted a code of ethics, allocation policies and conflicts of interest policies, among others, and has adopted supervisory procedures to monitor compliance with its policies. QMA cannot guarantee, however, that its policies and procedures will detect and prevent, or assure disclosure of, each and every situation in which a conflict may arise.
Side-by-Side Management of Accounts and Related Conflicts of Interest
Side-by-side management of multiple accounts can create incentives for QMA to favor one account over another. Examples are detailed below, followed by a discussion of how QMA addresses these conflicts.
Asset-Based Fees vs. Performance-Based Fees; Other Fee Considerations. QMA manages accounts with asset-based fees alongside accounts with performance-based fees. Asset-based fees are calculated based on the value of a clients portfolio at periodic measurement dates or over specified periods of time. Performance-based fees are generally based on a share of the capital appreciation of a portfolio, and may offer greater upside potential to an investment manager than asset-based fees, depending on how the fees are structured. This side-by-side management can create an incentive for QMA and its investment professionals to favor one account over another. Specifically, QMA has the incentive to favor accounts for which it receives performance fees, and possibly take greater investment risks in those accounts, in order to bolster performance and increase its fees. In addition, since fees are negotiable, one client may be paying a higher fee than another client with similar investment objectives or goals. In negotiating fees, QMA takes into account a number of factors including, but not limited to, the investment strategy, the size of a portfolio being managed, the relationship with the client, and the required level of service. Fees may also differ based on account type. For example, fees for commingled vehicles, including those that QMA subadvises, may differ from fees charged for single client accounts.
Long Only/Long-Short Accounts. QMA manages accounts that only allow it to hold securities long as well as accounts that permit short selling. QMA may, therefore, sell a security short in some client accounts while holding the same security long in other client accounts, creating the possibility that QMA is taking inconsistent positions with respect to a particular security in different client accounts.
Compensation/Benefit Plan Accounts/Other Investments by Investment Professionals. QMA manages certain funds and strategies whose performance is considered in determining long-term incentive plan benefits for certain investment professionals. Investment professionals involved in the management of those accounts in these strategies have an incentive to favor them over other
accounts they manage in order to increase their compensation. Additionally, QMAs investment professionals may have an interest in funds in those strategies if the funds are chosen as options in their 401(k) or deferred compensation plans offered by Prudential or if they otherwise invest in those funds directly.
Affiliated Accounts. QMA manages accounts on behalf of its affiliates as well as unaffiliated accounts.QMA could have an incentive to favor accounts of affiliates over others.
Non-Discretionary Accounts or Models. QMA provides non-discretionary model portfolios to some clients and manages other portfolios on a discretionary basis. The non-discretionary clients may be disadvantaged if QMA delivers the model investment portfolio to them after it initiates trading for the discretionary clients, or vice versa.
Large Accounts. Large accounts typically generate more revenue than do smaller accounts. As a result, a portfolio manager has an incentive when allocating scarce investment opportunities to favor accounts that pay a higher fee or generate more income for QMA.
Securities of the Same Kind or Class. QMA may buy or sell, or may direct or recommend that one client buy or sell, securities of the same kind or class that are purchased or sold for another client, at prices that may be different. QMA may also, at any time, execute trades of securities of the same kind or class in one direction for an account and in the opposite direction for another account, due to differences in investment strategy or client direction. Different strategies effecting trading in the same securities or types of securities may appear as inconsistencies in QMAs management of multiple accounts side-by-side.
How QMA Addresses These Conflicts of Interest
The conflicts of interest described above with respect to different types of side-by-side management could influence QMAs allocation of investment opportunities as well as its timing, aggregation and allocation of trades. QMA has developed policies and procedures designed to address these conflicts of interest.
In keeping with its fiduciary obligations, QMAs policies with respect to allocation and aggregation are to treat all of its accounts fairly and equitably. QMAs investment strategies generally require that QMA invest its clients assets in securities that are publicly traded. QMA generally does not participate in initial public offerings. These factors significantly reduce the risk that QMA could favor one client over another in the allocation of investment opportunities.
QMAs compliance procedures with respect to these policies include independent monitoring by its compliance unit of the timing, allocation and aggregation of trades and the allocation of investment opportunities. These procedures are designed to detect patterns and anomalies in QMAs side-by-side management and trading so that QMA may take measures to correct or improve its processes. QMAs trade management oversight committee, which consists of senior members of its management team, reviews trading patterns on a periodic basis.
QMA rebalances portfolios periodically with frequencies that vary with market conditions and investment objectives and may differ across portfolios in the same strategy based on variations in portfolio characteristics and constraints. QMA may aggregate trades for all portfolios rebalanced on any given day, where appropriate and consistent with its duty of best execution. Orders are generally allocated at the time of the transaction, or as soon as possible thereafter, on a pro rata basis equal to each accounts appetite for the issue when such appetite can be determined. As mentioned above, QMAs compliance unit performs periodic monitoring to determine that all portfolios are rebalanced consistently, over time, within all strategies.
With respect to QMAs management of long-short and long only accounts, the security weightings (positive or negative) in each account are always determined by a quantitative algorithm. An independent review is performed by the compliance unit to assess whether any such positions would represent a departure from the quantitative algorithm used to derive the positions in each portfolio. QMAs review is also intended to identify situations where QMA would seem to have conflicting views of the same security in different portfolios although such views may actually be reasonable due to differing portfolio constraints.
QMAs Relationships with Affiliates and Related Conflicts of Interest
As an indirect wholly-owned subsidiary of Prudential Financial, QMA is part of a diversified, global financial services organization. It is affiliated with many types of financial service providers, including broker-dealers, insurance companies, commodity pool operators and other investment advisers. Some of its employees are officers of some of these affiliates.
Conflicts Related to QMAs Affiliations
Conflicts Arising Out of Legal Restrictions. QMA may be restricted by law, regulation or contract as to how much, if any, of a particular security it may purchase or sell on behalf of a client, and as to the timing of such purchase or sale. These restrictions may apply as a result of QMAs relationship with Prudential Financial and its other affiliates. For example, QMAs holdings of a security on behalf of its clients may, under some SEC rules, be aggregated with the holdings of that security by other Prudential Financial affiliates. These holdings could, on an aggregate basis, exceed certain reporting thresholds for which QMA and Prudential monitor, and QMA and Prudential may restrict purchases to avoid crossing such thresholds. In addition, QMA could receive material, non-public information with respect to a particular issuer from an affiliate and, as a result, be unable to execute purchase or sale transactions in securities of that issuer for our clients. QMA is generally able to avoid receiving material, non-public information from its affiliates by maintaining information barriers to prevent the transfer of information between affiliates.
The Fund may be prohibited from engaging in transactions with its affiliates even when such transactions may be beneficial for the Fund. Certain affiliated transactions are permitted in accordance with procedures adopted by the Fund and reviewed by the independent board members of the Fund.
Conflicts Arising Out of Securities Holdings and Other Financial Interests
QMA, Prudential Financial, Inc., the general account of the Prudential Insurance Company of America (PICA) and accounts of other affiliates of QMA (collectively, affiliated accounts) may, at times, have financial interests in, or relationships with, companies whose securities QMA may hold, purchase or sell in our client accounts. This may occur, for example, because affiliated accounts hold public and private debt and equity securities of a large number of issuers and may invest in some of the same companies as QMAs client accounts. At any time, these interests and relationships could be inconsistent or in potential or actual conflict with positions held or actions taken by us on behalf of QMAs client accounts. For instance, QMA may invest client assets in the equity of companies whose debt is held by an affiliate. QMA may also invest in the securities of one or more clients for the accounts of other clients. While these conflicts cannot be eliminated, QMA has implemented policies and procedures, including adherence to PIMs information barrier policy, that are designed to ensure that investments of clients are managed in their best interests.
Certain of QMAs employees may offer and sell securities of, and units in, commingled funds that QMA manages or subadvises. Employees may offer and sell securities in connection with their roles as registered representatives of Prudential Investment Management Services LLC (a broker-dealer affiliate), or as officers, agents, or approved persons of other affiliates. There is an incentive for QMAs employees to offer these securities to investors regardless of whether the investment is appropriate for such investor since increased assets in these vehicles will result in increased advisory fees to QMA. In addition, such sales could result in increased compensation to the employee.
A portion of the long-term incentive grant of some of QMAs investment professionals will increase or decrease based on the annual performance of several of QMAs advised accounts over a defined time period. Consequently, some of QMAs portfolio managers from time to time have financial interests in the accounts they advise. To address potential conflicts related to these financial interests, QMA has procedures, including supervisory review procedures, designed to ensure that each of its accounts is managed in a manner that is consistent with QMAs fiduciary obligations, as well as with the accounts investment objectives, investment strategies and restrictions. Specifically, QMAs Chief Investment Officer will perform a comparison of trading costs between the advised accounts whose performance is considered in connection with the long-term incentive grant and other accounts, to ensure that such costs are consistent with each other or otherwise in line with expectations. The results of the analysis are discussed at a trade management meeting. Additionally, QMAs compliance group will review the performance of these accounts to ensure that it is consistent with the performance of other accounts in the same strategy that are not considered in connection with the grant.
Conflicts of Interest in the Voting Process
Occasionally, a conflict of interest may arise in connection with proxy voting. For example, the issuer of the securities being voted may also be a client of QMA. When QMA identifies an actual or potential conflict of interest between QMA and its clients, QMA votes in accordance with the policy of its proxy voting facilitator rather than its own policy. In that manner, QMA seeks to assure the independence and objectivity of the vote.
PRINCIPAL HOLDERS OF SHARES
As of the Record Date, the table below sets forth each shareholder that owns of record more than 5% of any class of each Fund.
Fund |
|
Beneficial |
|
Address |
|
Class |
|
Shares/% |
|
Value Fund |
|
|
|
|
|
|
|
|
|
Fund |
|
Beneficial |
|
Address |
|
Class |
|
Shares/% |
|
Equity Fund |
|
|
|
|
|
|
|
|
|
* As defined by the SEC, a security is beneficially owned by a person if that person has or shares voting power or investment power with respect to the security.
** As record holder for other beneficial owners.
As of the Record Date, the officers and directors of Prudential World Fund, Inc., as a group, beneficially owned less than 1% of the outstanding voting shares of the Funds.
ADDITIONAL INFORMATION
World Fund is an open-end management investment company registered with the SEC under the 1940 Act. Detailed information about Equity Fund, a series of World Fund, is contained in its prospectus dated December 27, 2013, which is enclosed herewith and incorporated by reference into this Prospectus/Proxy Statement. Additional information about Equity Fund is included in its SAI, dated December 27, 2013 which has been filed with the SEC and is incorporated by reference into this Prospectus/Proxy Statement.
Copies of Equity Funds Annual Report to Shareholders for the fiscal year ended October 31, 2013 and Equity Funds Semi-Annual Report to Shareholders for the period ended April 30, 2014 are enclosed herewith, and may also be obtained by calling 1-800-225-1852, or by writing to Equity Fund at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.
World Fund (on behalf of Equity Fund) files proxy materials, reports and other information with the SEC in accordance with the informational requirements of the Securities Exchange Act of 1934 and the 1940 Act. These materials can be inspected and copied at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Also, copies of such material can be obtained from the SECs Public Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549-6009, upon payment of prescribed fees, or from the SECs Internet address at www.sec.gov.
MISCELLANEOUS
Legal Matters
Certain matters of Maryland law relating to the validity of shares of Equity Fund to be issued pursuant to the Plan will be passed upon by Foley & Lardner LLP, special Maryland counsel to Equity Fund.
Independent Registered Public Accounting Firm
The audited financial statements of Value Fund, incorporated by reference into the SAI, have been audited by KPMG LLP, independent registered public accounting firm, whose report thereon is included in the Annual Report of Value Fund for the fiscal year ended October 31, 2013 (File No. 811-03981).
The audited financial statements of Equity Fund, incorporated by reference into the SAI, have been audited by KPMG LLP, independent registered public accounting firm, whose report thereon is included in the Annual Report of Equity Fund for the fiscal year ended October 31, 2013 (File No. 811-03981).
Notice to Banks, Broker-Dealers and Voting Directors and Their Nominees
Please advise Value Fund, c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, 14th Floor, Newark, New Jersey 07102, whether other persons are beneficial owners of shares for which proxies are being solicited and, if so, the number of copies of this Proxy Statement you wish to receive in order to supply copies to the beneficial owners of the shares.
SHAREHOLDER PROPOSALS
World Fund is not required to hold and will not ordinarily hold annual shareholders meetings in any year in which the election of trustees or directors, respectively, is not required to be acted upon under the 1940 Act. The Board may call special meetings of the shareholders for action by shareholder vote as required by the 1940 Act or World Funds governing documents.
Pursuant to rules adopted by the SEC, a shareholder of either of the Funds may submit a proposal for shareholder action for inclusion in a proxy statement relating to annual and other meetings of the shareholders of the Fund which he or she intends to introduce at such special meetings; provided, among other things, that such proposal is received by the relevant Fund at a reasonable time before a solicitation of proxies is made for such meeting. Timely submission of a proposal does not necessarily mean that the proposal will be included.
The Board intends to bring before the Meeting the matters set forth in the foregoing notice. The Directors do not expect any other business to be brought before the Meeting. If, however, any other matters are properly presented to the Meeting for action, it is intended that the persons named in the enclosed proxy will vote in accordance with their judgment. A shareholder executing and returning a proxy may revoke it at any time prior to its exercise by written notice of such revocation to the Secretary of World Fund by execution of a subsequent proxy, or by voting in person at the Meeting.
EXHIBITS TO PROSPECTUS/PROXY STATEMENT
Exhibits |
|
|
A |
|
Form of Plan of Reorganization (attached). |
|
|
|
B |
|
Prospectus for Equity Fund, dated December 27, 2013 (enclosed). |
|
|
|
C |
|
Equity Funds Annual Report to Shareholders for the fiscal year ended October 31, 2013 (enclosed). |
|
|
|
D |
|
Equity Funds Semi-Annual Report to Shareholders for the period ended April 30, 2014 (enclosed). |
Exhibit A
FORM OF PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the Plan) is made as of this day of , 2014, and has been adopted by the Board of Directors of Prudential World Fund, Inc., a corporation organized under the laws of the State of Maryland with its principal place of business at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102 (the Company) to provide for the reorganization of its Prudential International Value Fund (the Acquired Fund) into its Prudential International Equity Fund (the Acquiring Fund). Together, the Acquiring Fund and the Acquired Fund are referred to as the Funds.
The Plan has been structured with the intention that the transactions contemplated hereby qualify for federal income tax purposes as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code).
The reorganization (hereinafter referred to as the Reorganization) will consist of (i) the acquisition by the Acquiring Fund of all of the property, assets and goodwill of the Acquired Fund and the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund, if any, in exchange solely for full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund (as defined in Section 1(b) as the Acquiring Fund Shares); (ii) the distribution after the Closing Date (as provided in Section 3), of Acquiring Fund Shares to the shareholders of the Acquired Fund according to their respective interests in complete liquidation of the Acquired Fund; and (iii) the dissolution of the Acquired Fund as soon as practicable after the Closing (as defined in Section 3), all upon and subject to the terms and conditions of this Plan hereinafter set forth.
In order to consummate the Plan, the following actions shall be taken by the Company, on behalf of the Acquired Fund and the Acquiring Fund:
1. Sale and Transfer of Assets of the Acquired Fund in Exchange for Shares of the Acquiring Fund and Assumption of the Acquired Funds Liabilities, if any, and Liquidation and Dissolution of the Acquired Fund.
(a) Subject to the terms and conditions of this Plan, the Company, on behalf of the Acquired Fund, shall provide for the conveyance, reallocation, and delivery to the Acquiring Fund of all of the assets and liabilities belonging to the Acquired Fund, and thereupon shall be assets and liabilities belonging to the Acquiring Funds.
(b) Subject to the terms and conditions of this Plan, the Company, on behalf of the Acquiring Fund, shall at the Closing deliver for the benefit of the Acquired Fund the number of shares of a Class of the Acquiring Fund (the Acquiring Fund Shares) determined by dividing the net asset value allocable to a share of such Class of the Acquired Fund by the net asset value allocable to a share of the corresponding Class of the Acquiring Fund, and multiplying the result thereof by the number of outstanding shares of the applicable Class of the Acquired Fund, as of the close of regular trading on the New York Stock Exchange (the NYSE) on the Closing Date, all such values to be determined in the manner and as of the time set forth in Section 2 hereof; and assume all of the Acquired Funds liabilities, if any, as set forth in this Section 1(b). Except as otherwise provided herein, the Acquiring Fund will assume all debts, liabilities, obligations and duties of the Acquired Fund of whatever kind or nature, whether absolute, accrued, contingent or otherwise, whether or not determinable as of the Closing Date and whether or not specifically referred to in this Plan; provided, however, that the Company agrees to utilize its best efforts to discharge all of the known debts, liabilities, obligations and duties of the Acquired Fund prior to the Closing Date.
(c) As soon after the Closing Date as is conveniently practicable, but in any event within 30 days of the Closing Date, the Company, on behalf of the Acquired Fund, shall distribute pro rata to Acquired Fund shareholders of record, determined as of the close of business on the Closing Date, the Acquiring Fund Shares received pursuant to this Section, with each Acquired Fund shareholder receiving shares of the same Class or Classes of the Acquiring Fund as such shareholder holds of the Acquired Fund, and then the Company shall take action to dissolve and terminate the Acquired Fund. Such liquidation and distribution shall be accomplished by the establishment of accounts on the share records of the Acquiring Fund and noting in such accounts the names of the former Acquired Fund shareholders and the types and amounts of Acquiring Fund Shares that former Acquired Fund shareholders are due based on their respective holdings of the Acquired Fund as of the close of business on the Closing Date. Fractional Acquiring Fund Shares shall be carried to the second decimal place. The Company shall not issue certificates representing the Acquiring Fund shares in connection with such exchange. All issued and outstanding shares of the Acquired Fund will be simultaneously cancelled on the books of the Company with respect to the Acquired Fund.
(d) Ownership of Acquiring Fund Shares will be shown on the books of the Companys transfer agent. Acquiring Fund Shares will be issued in the manner described in the Companys then-effective registration statement.
(e) Any transfer taxes payable upon issuance of Acquiring Fund Shares in exchange for shares of the Acquired Fund in a name other than that of the registered holder of the shares being exchanged on the books of the Acquired Fund as of that time shall be paid by the person to whom such shares are to be issued as a condition to the registration of such transfer.
2. Valuation.
(a) The value of the Acquired Funds assets transferred to and liabilities assumed by the Acquiring Fund (such amount, the Net Assets) hereunder shall be computed as of the close of regular trading on the NYSE on the Closing Date (such time and date being hereinafter called the Valuation Time) using the valuation procedures (the Valuation Procedures) set forth in the Companys Charter and currently effective registration statement.
(b) The net asset value of a share of the Acquiring Fund shall be determined to the second decimal point as of the Valuation Time using the valuation procedures set forth in the Companys Charter and currently effective registration statement, which procedures are the Valuation Procedures referenced in the preceding paragraph.
(c) The net asset value of shares of the Acquired Fund shall be determined to the second decimal point as of the Valuation Time using the Valuation Procedures.
3. Closing and Closing Date.
(a) Subject to the terms and conditions set forth herein, the consummation of the transactions contemplated hereby shall take place at the Closing (the Closing). The date of the Closing (the Closing Date) shall be , 2014, or such earlier or later date as agreed to in writing by the parties hereto. The Closing shall take place at the principal office of the Company or at such other place as the parties may agree. The Company, on behalf of the Acquired Fund, shall have provided for delivery, as of the Closing, of the Acquired Funds Net Assets to be transferred to the Acquiring Fund, at the Companys Custodian, The Bank of New York Mellon.
(b) In the event that immediately prior to the Valuation Time (a) the NYSE or other primary exchange is closed to trading or trading thereon is restricted or (b) trading or the reporting of trading on the NYSE or other primary exchange or elsewhere is disrupted so that accurate appraisal of the value of the Net Assets of the Acquired Fund and of the net asset value per share of the Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed until the first business day after the date when such trading shall have been fully resumed and such reporting shall have been restored.
4. Intentions of the Company, on behalf of each of the Acquired Fund and the Acquiring Fund.
(a) The Company intends to operate the businesses of each of the Funds as presently conducted between the date hereof and the Closing Date.
(b) The Company does not intend to acquire any Acquiring Fund Shares for the purpose of making distributions thereof to anyone other than the Acquired Funds shareholders.
(c) The Company intends, if the reorganization is consummated, to liquidate and dissolve the Acquired Fund.
(d) The Company intend that, by the time of Closing, each Funds Federal and other tax returns and reports required by law to be filed on or before such date shall have been filed, and all Federal and other taxes shown as due on said returns and reports shall have been paid.
(e) [At the Closing, the Company intends to have available a copy of the shareholder ledger accounts, certified by the Acquired Funds transfer agent or its President or a Vice-President to the best of its or his or her knowledge and belief, for all the shareholders of record of the Acquired Fund as of the Valuation Time who are to become shareholders of the Acquiring Fund as a result of the transfer of assets and the assumption of liabilities that are the subject of this Plan.]
(f) The Company intends to mail to each shareholder of record of the Acquired Fund entitled to vote at the meeting of its shareholders at which action on this Plan is to be considered, in sufficient time to comply with requirements as to notice thereof, a Combined Proxy Statement and Prospectus that complies in all material respects with the applicable provisions of Section 14(a) of the 1934 Act, and Section 20(a) of the 1940 Act, and the rules and regulations, respectively, thereunder.
(g) The Company, on behalf of the Acquiring Fund, covenants to file with the U.S. Securities and Exchange Commission (the SEC) a registration statement on Form N-14 under the 1933 Act relating to the Acquiring Fund Shares issuable hereunder (including any supplement or amendment thereto, the Registration Statement), and will use its best efforts to provide that the Registration Statement becomes effective as promptly as practicable and remains effective through the time of Closing. At the time the Registration Statement becomes effective, at the time of the meeting of the shareholders of the Acquired Fund, and on the Closing Date, the Proxy Statement of the Acquired Fund, the Prospectus of the Acquiring Fund and the Statement of Additional Information of the Acquiring Fund to be included in the Registration Statement (collectively, Proxy Statement), and the Registration Statement will: (i) comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act, and the rules and regulations promulgated thereunder; and (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein in the light of the circumstances under which they were made, not misleading.
(h) The Company intends to call a meeting of shareholders of the Acquired Fund to consider and act upon this Plan and to use all reasonable efforts to obtain approval of the transactions contemplated hereby (including the determinations of its Board of Directors as set forth in Rule 17a-8(a) under the 1940 Act).
(i) The Company, on behalf of the Acquired Fund, intends that it will, from time to time, execute and deliver or cause to be executed and delivered, all such assignments and other instruments, and will take or cause to be taken such further action, as the Company may deem necessary or desirable in order to vest in and confirm to the Acquiring Fund title to and possession of all the Net Assets to be sold, assigned, transferred and delivered hereunder and otherwise to carry out the intent and purpose of this Plan.
(j) The Company, on behalf of the Acquiring Fund, intends to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act (including the determinations of its Board of Directors as set forth in Rule 17a-8(a) thereunder) and such of the state Blue Sky or securities laws as it may deem appropriate in order to continue its operations after the Closing Date.
(k) The Company, on behalf of the Acquiring Fund, intends that it will, from time to time, execute and deliver or cause to be executed and delivered all such assignments and other instruments, and will take or cause to be taken such further action, as the Company may deem necessary or desirable in order to (i) vest in and confirm to the Acquired Fund title to and possession of all the Acquiring Fund Shares to be transferred to the shareholders of the Acquired Fund pursuant to this Plan; (ii) assume all of the liabilities of the Acquired Fund in accordance with this Plan; and (iii) otherwise to carry out the intent and purpose of this Plan.
5. Conditions Precedent to be Fulfilled by the Company, on behalf of each of the Acquired Fund and the Acquiring Fund.
The consummation of the Plan with respect to the Acquiring Fund and the Acquired Fund shall be subject to the following conditions:
(a) That the form of this Plan shall have been adopted and approved by the appropriate action of the Board of Directors of the Company, on behalf of each of the Acquired Fund and the Acquiring Fund.
(b) That the SEC shall not have issued an unfavorable management report under Section 25(b) of the 1940 Act or instituted or threatened to institute any proceeding seeking to enjoin consummation of the Plan under Section 25(c) of the 1940 Act. And, further, no other legal, administrative or other proceeding shall have been instituted or to the best of the Companys knowledge have been threatened that would materially and adversely affect the business or financial condition of the applicable Fund, would prohibit the transactions contemplated hereby or would adversely affect the ability of the applicable Fund to consummate the transactions contemplated hereby.
(c) That the Plan contemplated hereby shall have been adopted and approved by the appropriate action of the shareholders of the Acquired Fund at an annual or special meeting or any adjournment thereof.
(d) That a distribution or distributions shall have been declared for the Acquired Fund, prior to the Closing Date, that, together with all previous distributions, shall have the effect of distributing to shareholders of the Acquired Fund (i) all of its ordinary income and all of its capital gain net income, if any, for the period from the close of its last fiscal year to the Valuation Time and (ii) any undistributed ordinary income and capital gain net income from any prior period. Capital gain net income has the meaning assigned to such term by Section 1222(9) of the Code.
(e) The Company shall have received on the Closing Date a favorable opinion from Foley & Lardner LLP, special Maryland counsel to the Company, dated as of the Closing Date, based upon customary representations and assumptions and to the effect that:
(1) The Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Maryland with requisite statutory Company power under its Charter, Bylaws and the Maryland General Corporation Law (the Maryland Act) to own all of its properties and assets and to carry on its business in each case as described in its current prospectus, and each of the Acquiring Fund and the Acquired Fund has been established as a series of the Company in accordance with the terms of the Companys Charter, Bylaws and the Maryland Act;
(2) This Plan has been duly authorized and executed by the Company, on behalf of each of the Acquiring Fund and the Acquired Fund, and, assuming delivery of the Plan by the Company, on behalf of the Acquiring Fund, and due authorization, execution and delivery of the Plan by the Company, on behalf of the Acquired Fund, is a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles, provided that such counsel may state that they express no opinion as to the validity or enforceability of any provision regarding the choice of Maryland law to govern this Plan;
(3) When the Acquiring Fund Shares to be distributed to Acquired Fund shareholders under the Plan are issued, sold and delivered, as contemplated by the Plan for the consideration stated in the Plan, they will be validly issued, fully paid and non-assessable, and no shareholder of the Acquiring Fund will have any pre-emptive rights under the Companys Charter, its Bylaws and the Maryland Act to subscribe for or purchase such shares;
(4) All actions required to be taken by the Company to authorize and effect the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company, on behalf of the Acquired Fund;
(5) The execution and delivery of the Plan did not, and the performance of this Plan, by the Company, on behalf of each of the Acquiring Fund and the Acquired Fund, of its obligations hereunder will not, violate any provision of the Companys Charter or by-laws, or result in a default or a breach of (a) the Management Agreement, (b) the Custodian Contract, (c) the Distribution Agreement, and (d) the Transfer Agency and Service Agreement, each as defined in the Companys currently effective registration statement, except where such violation, default or breach would not have a material adverse effect on either of the Acquiring Fund or the Acquired Fund;
(6) To the knowledge of such counsel and without independent inquiry or investigation, no consent, approval, authorization, filing or order of any court or governmental authority is required to be obtained by the Company, on behalf of the Acquiring Fund, under the federal laws of the United States and the laws of the State of Maryland for the consummation by the Company, on behalf of the Acquiring Fund, of the transactions contemplated by the Agreement, except such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required under state securities laws;
(7) The Company has been registered with the SEC as an investment company, and, to the knowledge of such counsel without independent inquiry or investigation, no order has been issued or proceeding instituted to suspend such registration; and
(8) To the knowledge of such counsel and without independent inquiry or investigation, no litigation or government proceeding has been instituted or threatened against the Company, the Acquiring Fund, or the Acquired Fund that would be required to be disclosed in the Companys registration statement on Form N-1A and is not so disclosed.
In giving the opinions set forth above, counsel may state that it is relying on certificates of the officers of the Company with regard to matters of fact, and certain certifications and written statements of governmental officials with respect to the good standing of the Company.
(f) The Company with respect to each of the Funds shall have received, on or before the Closing Date, an opinion of Shearman & Sterling LLP, special tax counsel to the Company, in form and substance satisfactory to the Company, substantially to the effect that, for federal income tax purposes:
(1) The transfer of the assets of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption by Acquiring Fund of the liabilities of the Acquired Fund, if any, as provided for in the Plan, will constitute a reorganization within the meaning of Section 368(a) of the Code, and the Acquired Fund and the Acquiring Fund each will be deemed to be a party to a reorganization within the meaning of Section 368(b) of the Code;
(2) In accordance with Sections 357 and 361 of the Code, no gain or loss will be recognized by the Acquired Fund as a result of the transfer of its assets solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund, if any, or on the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund, as provided for in the Plan;
(3) Under Section 1032 of the Code, no gain or loss will be recognized by the Acquiring Fund on the receipt of the assets of the Acquired Fund in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund, if any, as provided for in the Plan;
(4) In accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by the shareholders of the Acquired Fund on the receipt of Acquiring Fund Shares in exchange for their shares of the Acquired Fund;
(5) In accordance with Section 362(b) of the Code, the tax basis of the Acquiring Fund in the assets of the Acquired Fund will be the same as the tax basis of such assets in the hands of the Acquired Fund immediately prior to the consummation of the transactions contemplated by the Plan;
(6) In accordance with Section 358 of the Code, immediately after the consummation of the transactions contemplated by the Plan, the tax basis of the Acquiring Fund Shares received by the shareholders of the Acquired Fund will be equal, in the aggregate, to the tax basis of their shares of the Acquired Fund surrendered in exchange therefor;
(7) In accordance with Section 1223 of the Code, the holding period for the Acquiring Fund Shares received by the shareholders of the Acquired Fund will be determined by including the period for which such shareholder held their shares of the Acquired Fund exchanged therefor; provided , that the shares of the Acquired Fund Shares were held as capital assets for federal income tax purposes;
(8) In accordance with Section 1223 of the Code, the holding period of the Acquiring Fund with respect to the assets of the Acquired Fund acquired by it in accordance with the Plan will include the period for which such assets were held by the Acquired Fund; and
(9) Pursuant to Section 381(a) of the Code and regulations thereunder, the Acquiring Fund will succeed to and take into account certain tax attributes of the Acquired Fund, such as earnings and profits and method of tax accounting.
In giving the opinions set forth above, counsel may state that it is relying on certificates of the officers of the Company and/or the Company with regard to certain matters.
(g) The Acquiring Fund Shares to be delivered hereunder shall be eligible for such sale by the Acquiring Fund with each state commission or agency with which such eligibility is required in order to permit the Acquiring Fund Shares lawfully to be delivered to each shareholder of the Acquired Fund.
6. Fees and Expenses.
(a) The Company represents and warrants that there are no broker or finders fees payable by it in connection with the transactions provided for herein.
(b) The expenses of entering into and carrying out the provisions of this Plan shall be borne by Prudential Investments LLC, the investment adviser to the Acquired Fund and the Acquiring Fund.
7. Termination; Postponement; Waiver; Order.
(a) Anything contained in this Plan to the contrary notwithstanding, this Plan may be terminated and abandoned at any time (whether before or after approval thereof by the shareholders of the Acquired Fund) prior to the Closing or the Closing may be postponed by either the Company or the Company by resolution of the Board of Directors, if circumstances develop that, in the opinion of the Board, make proceeding with the Plan inadvisable.
(b) In the event of termination of this Plan pursuant to the provisions hereof, the same shall become void and have no further effect with respect to the Acquiring Fund or the Acquired Fund, and none of the Company, the Acquired Fund, the Acquiring Fund, nor the directors, officers, agents or shareholders shall have any liability in respect of this Plan.
(c) At any time prior to the Closing, any of the terms or conditions of this Plan may be waived by the party who is entitled to the benefit thereof by action taken by the Board of Directors if, in the judgment of such Board of Directors, such action or waiver will not have a material adverse effect on the benefits intended under this Plan to its shareholders, on behalf of whom such action is taken.
(d) If any order or orders of the SEC with respect to this Plan shall be issued prior to the Closing and shall impose any terms or conditions that are determined by action of the Board of Directors of the Company, on behalf of each of the Funds, to be acceptable, such terms and conditions shall be binding as if a part of this Plan without further vote or approval of the shareholders of the Acquired Fund, unless such terms and conditions shall result in a change in the method of computing the number of Acquiring Fund Shares to be issued to the Acquired Fund, in which event, unless such terms and conditions shall have been included in the proxy solicitation material furnished to the Acquired Fund shareholders prior to the meeting at which the transactions contemplated by this Plan shall have been approved, this Plan shall not be consummated and shall terminate unless the Company, on behalf of the Acquired Fund, shall promptly call a special meeting of shareholders at which such conditions so imposed shall be submitted for approval.
8. Headings; Counterparts.
(a) The paragraph headings contained in this Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of the Plan.
(b) This Plan may be executed in any number of counterparts, each of which will be deemed an original.
9. Agreement an Obligation Only of the Funds, and Enforceable Only Against Assets of the Funds.
The Company acknowledges that it must look, and agrees that it shall look, solely to the assets of the relevant Fund for the enforcement of any claims arising out of or based on the obligations of the Company hereunder, and in particular that none of the
assets of the Company, other than the portfolio assets of the relevant Fund, may be resorted to for the enforcement of any claim based on the obligations of a Fund hereunder.
10. Entire Plan and Amendments; Survival of Warranties.
This Plan embodies the entire agreement of the Company, on behalf of each of the Acquired Fund and the Acquiring Fund, and there are no agreements, understandings, restrictions, or warranties other than those set forth herein or herein provided for. This Plan may be amended only in a writing signed by the Company, on behalf of the Acquired Fund and the Acquiring Fund.
11. Governing Law.
This Plan shall be governed by and construed in accordance with the laws of the State of Maryland, provided that, in the case of any conflict between such laws and the federal securities laws, the latter shall govern.
IN WITNESS WHEREOF, Prudential World Fund, Inc. on behalf of each of Prudential International Value Fund Prudential International Equity Fund, has executed this Plan by its duly authorized officers, all as of the date and year first-above written.
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PRUDENTIAL WORLD FUND, INC. ON BEHALF OF PRUDENTIAL INTERNATIONAL VALUE FUND |
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Attest: |
By: |
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Name: |
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Title: |
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PRUDENTIAL WORLD FUND, INC. ON BEHALF OF PRUDENTIAL INTERNATIONAL EQUITY FUND |
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Attest: |
By: |
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Name: |
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Title: |
Exhibit B
PROSPECTUS DATED DECEMBER 27, 2013
The Prospectus for the Equity Fund, dated December 27, 2013, is part of this Proxy Statement and will be included in the proxy solicitation mailing to shareholders.
Exhibit C
ANNUAL REPORT FOR THE FISCAL YEAR ENDED OCTOBER 31, 2013
The Annual Report to Shareholders for the Equity Fund for the fiscal year ended October 31, 2013, is incorporated by reference into this Prospectus/Proxy Statement and will be included in the proxy solicitation mailing to shareholders.
Exhibit D
ANNUAL REPORT FOR THE PERIOD ENDED APRIL 30, 2014
The Annual Report to Shareholders for the Equity Fund for the period ended April 30, 2014, is incorporated by reference into this Prospectus/Proxy Statement and will be included in the proxy solicitation mailing to shareholders.
TABLE OF CONTENTS
1 |
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Proposal |
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2 |
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Notice of Special Meeting of Shareholders |
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4 |
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Prospectus/Proxy Statement |
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5 |
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Summary |
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7 |
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Comparison of Important Features |
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7 |
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The Investment Objectives, Policies and Principal Risks of the Funds |
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10 |
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Comparison of Other Policies |
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12 |
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Investment Restrictions |
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13 |
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Federal Income Tax Considerations |
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13 |
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Organizational Structure of the Funds |
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15 |
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Management of the Funds |
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17 |
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Distribution Plan |
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17 |
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Valuation |
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19 |
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Frequent Purchases and Redemptions of Fund Shares |
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20 |
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Purchases, Redemptions, Exchanges and Distributions |
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20 |
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Fees and Expenses |
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21 |
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Shareholder Fees and Operating Expenses |
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23 |
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Expense Examples |
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23 |
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Performance of the Funds |
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25 |
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Reasons for the Reorganization |
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26 |
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Reorganization |
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26 |
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Closing |
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26 |
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Expenses Resulting from the Reorganization |
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27 |
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Certain Federal Tax Consequences of the Reorganization |
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27 |
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Capitalization |
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28 |
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Voting Information |
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28 |
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Required Vote |
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29 |
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How to Vote |
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29 |
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Revocation of Proxies |
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29 |
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Solicitation of Voting Instructions |
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30 |
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Additional Information About the Portfolio Managers and Portfolio Holdings |
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30 |
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Portfolio Managers |
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31 |
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Additional Information about the Portfolio Managers Compensation and Conflicts of Interest |
34 |
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Principal Holders of Shares |
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35 |
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Additional Information |
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35 |
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Miscellaneous |
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35 |
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Shareholder Proposals |
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36 |
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Exhibits to Prospectus/Proxy Statement |
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A-1 |
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Exhibit AForm of Plan of Reorganization (attached) |
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B-1 |
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Exhibit BProspectus dated December 27, 2014 (enclosed) |
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C-1 |
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Exhibit CAnnual Report for the fiscal year ended October 31, 2013 (enclosed) |
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D-1 |
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Exhibit D Semi-Annual Report for the period ended April 30, 2014 (enclosed) |
The information in this Statement of Additional Information is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
FOR
PRUDENTIAL INTERNATIONAL EQUITY FUND,
A SERIES OF PRUDENTIAL WORLD FUND, INC.
Dated September [17], 2014
Reorganization of Prudential International Value Fund
into Prudential International Equity Fund
This Statement of Additional Information (SAI) relates specifically to the proposed delivery of substantially all of the assets of Prudential International Value Fund (Value Fund), and the assumption of the liabilities of Value Fund in exchange for shares of Prudential International Equity Fund (Equity Fund and together with Value Fund, the Funds), each a series of Prudential World Fund, Inc. (the Reorganization).
This SAI consists of this Cover Page and Equity Funds SAI dated December 27, 2013, and the pro forma financial statements of Equity Fund and Value Fund after giving effect to the proposed Reorganization.
This SAI is not a Prospectus; you should read this SAI in conjunction with the Prospectus/Proxy Statement dated September [17], 2014 relating to the above-referenced Reorganization. You can request a copy of the Prospectus/Proxy Statement by calling 1-800-225-1852 or by writing to Equity Fund at Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102.
The Securities and Exchange Commission (SEC) maintains a web site (http://www.sec.gov) that contains the prospectus and statement of additional information of, other materials incorporated by reference herein, and other information regarding Value Fund, Equity Fund and Prudential World Fund, Inc.
TABLE OF CONTENTS
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Page |
SAI Incorporation by Reference |
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S-2 |
Pro Forma Financial Statements for the Reorganization (unaudited) |
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F-1 |
Pro Forma Portfolio of Investments for the Reorganization (unaudited) |
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F-2 |
Pro Forma Statement of Assets and Liabilities for the Reorganization (unaudited) |
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F-20 |
Pro Forma Statement of Operations for the Reorganization (unaudited) |
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F-21 |
Notes to the Pro-Forma Financial Statements for the Reorganization (unaudited) |
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F-22 |
SAI INCORPORATION BY REFERENCE
The SAI of Equity Fund, dated December 27, 2013, is incorporated by reference herein and is part of this SAI and will be provided to all shareholders requesting this SAI.
Pro Forma Financial Statements for the Reorganization (unaudited)
The following tables set forth as of April 30, 2014 the unaudited pro forma Portfolio of Investments, Statement of Assets and Liabilities and Statement of Operations for the Reorganization.
Pro Forma Financial Statements
The unaudited pro forma information provided herein should be read in conjunction with the annual report to shareholders for the fiscal year ended October 31, 2013, and the semi-annual report to shareholders for the period ended April 30, 2014, for each of Equity Fund and Value Fund.
On August 18, 2014, the Board of Directors of Prudential World Fund, Inc. (World Fund), on behalf of Value Fund, approved a Plan of Reorganization (the Plan) whereby Equity Fund will acquire all the assets of, and assume of all of the liabilities of, Value Fund and Value Fund will receive shares of Equity Fund, to be distributed to the shareholders of Value Fund in redemption of all of the outstanding shares of Value Fund, and thereafter terminate Value Fund as a corporation.
The unaudited pro forma information set forth below for the period ended April 30, 2014 is intended to present ratios and supplemental data as if the acquisition of Value Fund by Equity Fund had been consummated at April 30, 2014.
Pro-Forma Portfolio of Investments for the Reorganization (unaudited)
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Prudential International Value Fund |
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Prudential International Equity |
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Pro Forma Prudential International |
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Description |
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Shares |
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Value (Note 1) |
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Shares |
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Value (Note 1) |
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Shares |
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Value (Note 1) |
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LONG-TERM INVESTMENTS |
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97.5%, 99.5%, 99.2% |
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COMMON STOCKS |
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97.5%, 97.5%, 97.5% |
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Australia |
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4.4%, 6.0%, 5.7% |
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Arrium Ltd. |
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87,600 |
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$ |
97,626 |
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87,600 |
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$ |
97,626 |
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Ausdrill Ltd. |
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42,900 |
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37,219 |
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42,900 |
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37,219 |
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Australia & New Zealand Banking Group Ltd. |
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106,220 |
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$ |
3,415,786 |
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106,220 |
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3,415,786 |
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Bendigo & Adelaide Bank Ltd. |
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16,800 |
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180,055 |
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16,800 |
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180,055 |
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BHP Billiton Ltd. |
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51,931 |
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1,828,828 |
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51,931 |
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1,828,828 |
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Bradken Ltd. |
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29,500 |
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116,424 |
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29,500 |
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116,424 |
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Challenger Ltd. |
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32,000 |
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210,536 |
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32,000 |
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210,536 |
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Commonwealth Bank of Australia |
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54,995 |
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4,045,469 |
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54,995 |
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4,045,469 |
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CSL Ltd. |
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3,736 |
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238,171 |
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3,736 |
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238,171 |
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Dexus Property Group |
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84,051 |
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88,919 |
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84,051 |
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88,919 |
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Downer EDI Ltd. |
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35,500 |
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165,725 |
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35,500 |
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165,725 |
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Emeco Holdings Ltd.* |
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166,900 |
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40,652 |
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166,900 |
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40,652 |
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Federation Centres Ltd. |
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27,120 |
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62,953 |
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27,120 |
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62,953 |
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Fortescue Metals Group Ltd. |
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26,500 |
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125,343 |
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415,036 |
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1,963,087 |
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441,536 |
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2,088,430 |
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GrainCorp Ltd. (Class A Stock) |
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27,500 |
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226,804 |
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27,500 |
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226,804 |
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Insurance Australia Group Ltd. |
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323,843 |
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1,730,858 |
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323,843 |
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1,730,858 |
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Leighton Holdings Ltd.(a) |
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7,800 |
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138,701 |
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3,868 |
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68,781 |
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11,668 |
|
207,482 |
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Lend Lease Group |
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26,300 |
|
317,860 |
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|
|
|
|
26,300 |
|
317,860 |
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Metcash Ltd. |
|
42,000 |
|
108,470 |
|
|
|
|
|
42,000 |
|
108,470 |
| |||
|
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Mineral Resources Ltd. |
|
11,000 |
|
119,434 |
|
|
|
|
|
11,000 |
|
119,434 |
| |||
|
|
Mount Gibson Iron Ltd. |
|
|
|
|
|
897,270 |
|
612,768 |
|
897,270 |
|
612,768 |
| |||
|
|
National Australia Bank Ltd. |
|
8,000 |
|
263,418 |
|
|
|
|
|
8,000 |
|
263,418 |
| |||
|
|
Pacific Brands Ltd. |
|
88,300 |
|
41,574 |
|
|
|
|
|
88,300 |
|
41,574 |
| |||
|
|
Ramsay Health Care Ltd. |
|
|
|
|
|
2,367 |
|
98,902 |
|
2,367 |
|
98,902 |
| |||
|
|
REA Group Ltd. |
|
|
|
|
|
1,950 |
|
85,044 |
|
1,950 |
|
85,044 |
| |||
|
|
Rio Tinto Ltd. |
|
4,700 |
|
271,044 |
|
|
|
|
|
4,700 |
|
271,044 |
| |||
|
|
Toll Holdings Ltd. |
|
25,300 |
|
124,794 |
|
|
|
|
|
25,300 |
|
124,794 |
| |||
|
|
Westpac Banking Corp. |
|
|
|
|
|
114,563 |
|
3,752,443 |
|
114,563 |
|
3,752,443 |
| |||
|
|
Woodside Petroleum Ltd. |
|
|
|
|
|
5,581 |
|
212,139 |
|
5,581 |
|
212,139 |
| |||
|
|
Woolworths Ltd. |
|
|
|
|
|
7,641 |
|
265,539 |
|
7,641 |
|
265,539 |
| |||
|
|
|
|
|
|
2,585,679 |
|
|
|
18,469,687 |
|
|
|
21,055,366 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Austria |
|
0.8%, 0.5%, 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
OMV AG |
|
5,800 |
|
271,175 |
|
30,021 |
|
1,403,613 |
|
35,821 |
|
1,674,788 |
| |||
|
|
Voestalpine AG |
|
3,800 |
|
173,582 |
|
1,873 |
|
85,557 |
|
5,673 |
|
259,139 |
| |||
|
|
|
|
|
|
444,757 |
|
|
|
1,489,170 |
|
|
|
1,933,927 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Belgium |
|
1.5%, 0.0%, 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
AGFA-Gevaert NV* |
|
32,700 |
|
125,211 |
|
|
|
|
|
32,700 |
|
125,211 |
| |||
|
|
Anheuser-Busch InBev NV |
|
4,409 |
|
480,562 |
|
|
|
|
|
4,409 |
|
480,562 |
| |||
|
|
Delhaize Group SA |
|
3,800 |
|
282,960 |
|
|
|
|
|
3,800 |
|
282,960 |
| |||
|
|
Dexia SA* |
|
4,935 |
|
281 |
|
|
|
|
|
4,935 |
|
281 |
| |||
|
|
|
|
|
|
889,014 |
|
|
|
|
|
|
|
889,014 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Brazil |
|
0.2%, 1.2%, 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
AMBEV SA |
|
|
|
|
|
190,500 |
|
1,388,328 |
|
190,500 |
|
1,388,328 |
| |||
|
|
Banco do Brasil SA |
|
|
|
|
|
51,100 |
|
538,329 |
|
51,100 |
|
538,329 |
| |||
|
|
Cia de Saneamento Basico do Estado de Sao Paulo |
|
|
|
|
|
6,300 |
|
$ |
59,758 |
|
6,300 |
|
$ |
59,758 |
| |
|
|
Embraer SA , ADR |
|
4,017 |
|
$ |
138,185 |
|
|
|
|
|
4,017 |
|
138,185 |
| ||
|
|
Light SA |
|
|
|
|
|
62,500 |
|
496,132 |
|
62,500 |
|
496,132 |
| |||
|
|
Petroleo Brasileiro SA |
|
|
|
|
|
169,700 |
|
1,184,228 |
|
169,700 |
|
1,184,228 |
| |||
|
|
WEG SA |
|
|
|
|
|
6,370 |
|
76,563 |
|
6,370 |
|
76,563 |
| |||
|
|
|
|
|
|
138,185 |
|
|
|
3,743,338 |
|
|
|
3,881,523 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Canada |
|
0.5%, 7.2%, 6.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Alimentation Couche Tard, Inc. (Class B Stock) |
|
|
|
|
|
6,900 |
|
194,463 |
|
6,900 |
|
194,463 |
| |||
|
|
Bank of Nova Scotia |
|
|
|
|
|
19,300 |
|
1,172,739 |
|
19,300 |
|
1,172,739 |
| |||
|
|
Boardwalk Real Estate Investment Trust |
|
|
|
|
|
2,400 |
|
135,279 |
|
2,400 |
|
135,279 |
| |||
|
|
Canadian Imperial Bank of Commerce |
|
|
|
|
|
23,700 |
|
2,113,009 |
|
23,700 |
|
2,113,009 |
| |||
|
|
Canadian Natural Resources Ltd. |
|
|
|
|
|
41,700 |
|
1,699,121 |
|
41,700 |
|
1,699,121 |
| |||
|
|
Canadian National Railway Co. |
|
5,298 |
|
310,325 |
|
|
|
|
|
5,298 |
|
310,325 |
| |||
|
|
Canadian Tire Corp. Ltd. (Class A Stock) |
|
|
|
|
|
12,800 |
|
1,257,169 |
|
12,800 |
|
1,257,169 |
| |||
|
|
Genworth MI Canada, Inc.(a) |
|
|
|
|
|
30,600 |
|
|
1,073,464 |
|
30,600 |
|
1,073,464 |
| ||
|
|
Imperial Oil Ltd. |
|
|
|
|
|
4,800 |
|
234,383 |
|
4,800 |
|
234,383 |
| |||
|
|
Jean Coutu Group PJC, Inc. (The) (Class A Stock) |
|
|
|
|
|
53,000 |
|
1,068,172 |
|
53,000 |
|
1,068,172 |
| |||
|
|
Loblaw Cos. Ltd. |
|
|
|
|
|
2,732 |
|
118,772 |
|
2,732 |
|
118,772 |
| |||
|
|
Magna International, Inc. |
|
|
|
|
|
24,400 |
|
2,390,468 |
|
24,400 |
|
2,390,468 |
| |||
|
|
Methanex Corp. |
|
|
|
|
|
1,700 |
|
105,299 |
|
1,700 |
|
105,299 |
| |||
|
|
National Bank of Canada |
|
|
|
|
|
5,400 |
|
224,119 |
|
5,400 |
|
224,119 |
| |||
|
|
Peyto Exploration & Development Corp. |
|
|
|
|
|
2,400 |
|
88,485 |
|
2,400 |
|
88,485 |
| |||
|
|
Royal Bank of Canada |
|
|
|
|
|
46,300 |
|
3,090,046 |
|
46,300 |
|
3,090,046 |
| |||
|
|
Saputo, Inc. |
|
|
|
|
|
11,700 |
|
625,644 |
|
11,700 |
|
625,644 |
| |||
|
|
Shaw Communications, Inc. (Class B Stock) |
|
|
|
|
|
6,300 |
|
152,607 |
|
6,300 |
|
152,607 |
| |||
|
|
Suncor Energy, Inc. |
|
|
|
|
|
73,800 |
|
2,846,826 |
|
73,800 |
|
2,846,826 |
| |||
|
|
Toronto-Dominion Bank (The) |
|
|
|
|
|
54,800 |
|
2,636,380 |
|
54,800 |
|
2,636,380 |
| |||
|
|
Vermilion Energy, Inc. |
|
|
|
|
|
1,600 |
|
106,462 |
|
1,600 |
|
106,462 |
| |||
|
|
Western Forest Products, Inc. |
|
|
|
|
|
318,600 |
|
636,590 |
|
318,600 |
|
636,590 |
| |||
|
|
|
|
|
|
310,325 |
|
|
|
21,969,497 |
|
|
|
22,279,822 |
| |||
Chile |
|
0.0%, 0.1%, 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Banco de Credito e Inversiones |
|
|
|
|
|
6,513 |
|
360,131 |
|
6,513 |
|
360,131 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
China |
|
2.6%, 4.3%, 4.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Agricultural Bank of China Ltd. (Class H Stock) |
|
|
|
|
|
359,000 |
|
151,060 |
|
359,000 |
|
151,060 |
| |||
|
|
Anhui Conch Cement Co. Ltd. (Class H Stock) |
|
|
|
|
|
66,500 |
|
248,294 |
|
66,500 |
|
248,294 |
| |||
|
|
Anhui Gujing Distillery Co. Ltd. (Class B Stock) |
|
|
|
|
|
117,200 |
|
248,838 |
|
117,200 |
|
248,838 |
| |||
|
|
Baidu, Inc., ADR* |
|
2,532 |
|
389,548 |
|
|
|
|
|
2,532 |
|
389,548 |
| |||
|
|
Bank of China Ltd. (Class H Stock) |
|
|
|
|
|
4,862,000 |
|
2,142,190 |
|
4,862,000 |
|
2,142,190 |
| |||
|
|
Bank of Communications Co. Ltd. (Class H Stock) |
|
|
|
|
|
681,000 |
|
424,186 |
|
681,000 |
|
424,186 |
| |||
|
|
Beijing Capital Land Ltd. (Class H Stock) |
|
|
|
|
|
858,000 |
|
288,842 |
|
858,000 |
|
288,842 |
| |||
|
|
BOC Hong Kong Holdings Ltd. |
|
|
|
|
|
60,500 |
|
177,517 |
|
60,500 |
|
177,517 |
| |||
|
|
China CITIC Bank Corp. Ltd. (Class H Stock) |
|
|
|
|
|
2,648,000 |
|
1,581,809 |
|
2,648,000 |
|
1,581,809 |
| |||
|
|
China Construction Bank Corp. (Class H Stock) |
|
|
|
|
|
1,190,000 |
|
823,925 |
|
1,190,000 |
|
823,925 |
| |||
|
|
China Lumena New Materials Corp. |
|
|
|
|
|
5,060,000 |
|
818,881 |
|
5,060,000 |
|
818,881 |
| |||
|
|
China Merchants Bank Co. Ltd. (Class H Stock) |
|
|
|
|
|
425,000 |
|
761,507 |
|
425,000 |
|
761,507 |
| |||
|
|
China Mobile Ltd. |
|
48,401 |
|
|
460,704 |
|
|
|
|
|
48,401 |
|
460,704 |
| ||
|
|
China Power International Development Ltd. |
|
|
|
|
|
2,492,000 |
|
897,275 |
|
2,492,000 |
|
897,275 |
| |||
|
|
China Railway Group Ltd. (Class H Stock) |
|
|
|
|
|
132,000 |
|
59,121 |
|
132,000 |
|
59,121 |
| |||
|
|
China Resources Power Holdings Co. Ltd. |
|
|
|
|
|
28,000 |
|
70,374 |
|
28,000 |
|
70,374 |
| |||
|
|
China Unicom Hong Kong Ltd. |
|
|
|
|
|
1,254,000 |
|
1,922,427 |
|
1,254,000 |
|
1,922,427 |
| |||
|
|
CNOOC Ltd. (Class H Stock) |
|
|
|
|
|
257,000 |
|
424,782 |
|
257,000 |
|
424,782 |
| |||
|
|
Huaneng Power International, Inc. (Class H Stock) |
|
|
|
|
|
58,000 |
|
56,775 |
|
58,000 |
|
56,775 |
| |||
|
|
Industrial & Commercial Bank of China Ltd. (Class H Stock) |
|
569,927 |
|
340,542 |
|
2,136,000 |
|
1,276,299 |
|
2,705,927 |
|
1,616,841 |
| |||
|
|
Kaisa Group Holdings Ltd. |
|
|
|
|
|
2,038,000 |
|
648,390 |
|
2,038,000 |
|
648,390 |
| |||
|
|
Shenzhen Expressway Co. Ltd. (Class H Stock) |
|
|
|
|
|
616,000 |
|
|
281,067 |
|
616,000 |
|
281,067 |
| ||
|
|
SINA Corp.* |
|
1,742 |
|
83,268 |
|
|
|
|
|
1,742 |
|
83,268 |
| |||
|
|
Sinopharm Group Co. Ltd. (Class H Stock) |
|
35,487 |
|
93,709 |
|
|
|
|
|
35,487 |
|
93,709 |
| |||
|
|
Tencent Holdings Ltd. |
|
3,259 |
|
205,186 |
|
|
|
|
|
3,259 |
|
205,186 |
| |||
|
|
|
|
|
|
1,572,957 |
|
|
|
13,303,559 |
|
|
|
14,876,516 |
|
Czech Republic |
|
0.0%, 0.5%, 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
CEZ A/S |
|
|
|
|
|
53,531 |
|
$ |
1,610,998 |
|
53,531 |
|
$ |
1,610,998 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Denmark |
|
1.2%, 1.8%, 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
A.P. Moeller - Maersk A/S (Class A Stock) |
|
|
|
|
|
50 |
|
113,594 |
|
50 |
|
113,594 |
| |||
|
|
A.P. Moeller - Maersk A/S (Class B Stock) |
|
|
|
|
|
761 |
|
1,816,704 |
|
761 |
|
1,816,704 |
| |||
|
|
Coloplast A/S (Class B Stock) |
|
|
|
|
|
20,321 |
|
1,706,822 |
|
20,321 |
|
1,706,822 |
| |||
|
|
Novo Nordisk A/S (Class B Stock) |
|
15,754 |
|
$ |
715,011 |
|
32,589 |
|
1,479,085 |
|
48,343 |
|
2,194,096 |
| ||
|
|
Schouw & Co. |
|
|
|
|
|
6,146 |
|
343,070 |
|
6,146 |
|
343,070 |
| |||
|
|
|
|
|
|
715,011 |
|
|
|
5,459,275 |
|
|
|
6,174,286 |
| |||
Egypt |
|
0.0%, 0.4%, 0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Centamin PLC* |
|
|
|
|
|
1,073,303 |
|
1,173,370 |
|
1,073,303 |
|
1,173,370 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Finland |
|
0.9%, 0.9%, 0.9% |
|
|
|
|
|
|
|
|
|
0 |
|
|
| |||
|
|
Kesko OYJ (Class B Stock) |
|
|
|
|
|
14,664 |
|
600,236 |
|
14,664 |
|
600,236 |
| |||
|
|
Kone OYJ (Class B Stock) |
|
6,477 |
|
277,639 |
|
|
|
|
|
6,477 |
|
277,639 |
| |||
|
|
Sampo OYJ (Class A Stock) |
|
|
|
|
|
41,047 |
|
2,040,017 |
|
41,047 |
|
2,040,017 |
| |||
|
|
Tieto OYJ |
|
8,700 |
|
238,078 |
|
|
|
|
|
8,700 |
|
238,078 |
| |||
|
|
|
|
|
|
515,717 |
|
|
|
2,640,253 |
|
|
|
3,155,970 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
France |
|
10.9%, 6.5%, 7.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Accor SA |
|
4,839 |
|
236,915 |
|
2,618 |
|
128,176 |
|
7,457 |
|
365,091 |
| |||
|
|
Air Liquide SA |
|
1,880 |
|
268,967 |
|
|
|
|
|
1,880 |
|
268,967 |
| |||
|
|
Alstom SA |
|
6,000 |
|
247,944 |
|
|
|
|
|
6,000 |
|
247,944 |
| |||
|
|
Alten SA |
|
|
|
|
|
3,908 |
|
199,666 |
|
3,908 |
|
199,666 |
| |||
|
|
AXA SA |
|
9,100 |
|
237,473 |
|
|
|
|
|
9,100 |
|
237,473 |
| |||
|
|
BNP Paribas SA |
|
3,700 |
|
278,034 |
|
|
|
|
|
3,700 |
|
278,034 |
| |||
|
|
Boiron SA |
|
|
|
|
|
4,171 |
|
351,711 |
|
4,171 |
|
351,711 |
| |||
|
|
Cap Gemini SA |
|
|
|
|
|
3,179 |
|
224,608 |
|
3,179 |
|
224,608 |
| |||
|
|
Carrefour SA |
|
|
|
|
|
33,761 |
|
1,316,038 |
|
33,761 |
|
1,316,038 |
| |||
|
|
Casino Guichard Perrachon SA* |
|
|
|
|
|
11,400 |
|
1,452,623 |
|
11,400 |
|
1,452,623 |
| |||
|
|
Cie Generale des Etablissements Michelin |
|
5,333 |
|
653,989 |
|
|
|
|
|
5,333 |
|
653,989 |
| |||
|
|
Ciments Francais SA |
|
2,200 |
|
236,543 |
|
|
|
|
|
2,200 |
|
236,543 |
| |||
|
|
Credit Agricole SA* |
|
12,800 |
|
201,964 |
|
16,449 |
|
259,539 |
|
29,249 |
|
461,503 |
| |||
|
|
Electricite de France SA |
|
5,500 |
|
211,205 |
|
38,030 |
|
1,460,385 |
|
43,530 |
|
1,671,590 |
| |||
|
|
GDF Suez |
|
|
|
|
|
23,770 |
|
599,085 |
|
23,770 |
|
599,085 |
| |||
|
|
Groupe Fnac* |
|
|
|
|
|
3,190 |
|
152,684 |
|
3,190 |
|
152,684 |
| |||
|
|
JCDecaux SA |
|
|
|
|
|
25,759 |
|
1,057,408 |
|
25,759 |
|
1,057,408 |
| |||
|
|
LVMH Moet Hennessy Louis Vuitton SA |
|
3,408 |
|
671,356 |
|
|
|
|
|
3,408 |
|
671,356 |
| |||
|
|
Publicis Groupe SA |
|
6,150 |
|
526,127 |
|
|
|
|
|
6,150 |
|
526,127 |
| |||
|
|
Natixis |
|
|
|
|
|
14,849 |
|
105,408 |
|
14,849 |
|
105,408 |
| |||
|
|
Nexity SA |
|
|
|
|
|
15,410 |
|
691,254 |
|
15,410 |
|
691,254 |
| |||
|
|
Rallye SA |
|
|
|
|
|
9,013 |
|
458,430 |
|
9,013 |
|
458,430 |
| |||
|
|
Renault SA |
|
2,200 |
|
215,093 |
|
|
|
|
|
2,200 |
|
215,093 |
| |||
|
|
Sanofi |
|
3,000 |
|
323,759 |
|
4,639 |
|
500,639 |
|
7,639 |
|
824,398 |
| |||
|
|
SCOR SE |
|
3,900 |
|
142,712 |
|
|
|
|
|
3,900 |
|
142,712 |
| |||
|
|
Societe Generale SA |
|
2,800 |
|
174,376 |
|
11,711 |
|
729,328 |
|
14,511 |
|
903,704 |
| |||
|
|
Sopra Group SA(a) |
|
|
|
|
|
4,741 |
|
545,779 |
|
4,741 |
|
545,779 |
| |||
|
|
Technicolor SA* |
|
|
|
|
|
63,644 |
|
|
475,845 |
|
63,644 |
|
475,845 |
| ||
|
|
Thales SA |
|
5,100 |
|
324,743 |
|
1,511 |
|
96,213 |
|
6,611 |
|
420,956 |
| |||
|
|
Total SA |
|
14,538 |
|
1,040,108 |
|
66,335 |
|
4,745,877 |
|
80,873 |
|
5,785,985 |
| |||
|
|
Valeo SA |
|
2,400 |
|
329,590 |
|
16,590 |
|
2,278,289 |
|
18,990 |
|
2,607,879 |
| |||
|
|
Vinci SA |
|
|
|
|
|
28,267 |
|
2,134,336 |
|
28,267 |
|
2,134,336 |
| |||
|
|
Vivendi SA |
|
5,800 |
|
155,827 |
|
|
|
|
|
5,800 |
|
155,827 |
| |||
|
|
|
|
|
|
6,476,725 |
|
|
|
19,963,321 |
|
|
|
26,440,046 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Germany |
|
7.8%, 7.6%, 7.6% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Adidas AG |
|
4,584 |
|
490,037 |
|
|
|
|
|
4,584 |
|
490,037 |
| |||
|
|
Allianz SE |
|
2,000 |
|
348,059 |
|
7,028 |
|
1,223,080 |
|
9,028 |
|
1,571,139 |
| |||
|
|
Aurubis AG |
|
2,300 |
|
|
122,876 |
|
|
|
|
|
2,300 |
|
122,876 |
| ||
|
|
BASF SE* |
|
1,700 |
|
197,209 |
|
29,034 |
|
3,368,106 |
|
30,734 |
|
3,565,315 |
| |||
|
|
Bayer AG |
|
|
|
|
|
10,328 |
|
1,436,021 |
|
10,328 |
|
1,436,021 |
| |||
|
|
Bayerische Motoren Werke AG |
|
|
|
|
|
5,473 |
|
687,982 |
|
5,473 |
|
687,982 |
| |||
|
|
Daimler AG |
|
4,900 |
|
456,185 |
|
38,462 |
|
3,580,774 |
|
43,362 |
|
4,036,959 |
| |||
|
|
Deutsche Bank AG |
|
12,255 |
|
$ |
539,777 |
|
|
|
|
|
12,255 |
|
$ |
539,777 |
| |
|
|
Deutsche Lufthansa AG |
|
|
|
|
|
60,355 |
|
$ |
1,515,682 |
|
60,355 |
|
1,515,682 |
| ||
|
|
Deutsche Post AG |
|
|
|
|
|
55,386 |
|
2,089,876 |
|
55,386 |
|
2,089,876 |
| |||
|
|
Duerr AG* |
|
|
|
|
|
12,043 |
|
952,910 |
|
12,043 |
|
952,910 |
| |||
|
|
E.ON SE |
|
7,600 |
|
145,577 |
|
|
|
|
|
7,600 |
|
145,577 |
| |||
|
|
Freenet AG |
|
7,800 |
|
270,138 |
|
|
|
|
|
7,800 |
|
270,138 |
| |||
|
|
Fresenius Medical Care AG & Co. KGaA |
|
6,650 |
|
458,168 |
|
|
|
|
|
6,650 |
|
458,168 |
| |||
|
|
Fresenius SE & Co. KGaA |
|
|
|
|
|
2,031 |
|
309,022 |
|
2,031 |
|
309,022 |
| |||
|
|
Hannover Rueck SE |
|
2,000 |
|
186,363 |
|
20,761 |
|
1,934,548 |
|
22,761 |
|
2,120,911 |
| |||
|
|
Henkel AG & Co. KGaA |
|
|
|
|
|
14,872 |
|
1,529,112 |
|
14,872 |
|
1,529,112 |
| |||
|
|
K+S AG(a) |
|
|
|
|
|
50,035 |
|
1,753,230 |
|
50,035 |
|
1,753,230 |
| |||
|
|
Lanxess AG |
|
1,600 |
|
121,842 |
|
|
|
|
|
1,600 |
|
121,842 |
| |||
|
|
Merck KGaA* |
|
|
|
|
|
1,158 |
|
195,752 |
|
1,158 |
|
195,752 |
| |||
|
|
Muenchener Rueckversicherungs AG* |
|
900 |
|
208,043 |
|
9,851 |
|
2,277,144 |
|
10,751 |
|
2,485,187 |
| |||
|
|
Rheinmetall AG |
|
3,000 |
|
199,859 |
|
|
|
|
|
3,000 |
|
199,859 |
| |||
|
|
RTL Group SA |
|
|
|
|
|
693 |
|
77,166 |
|
693 |
|
77,166 |
| |||
|
|
RWE AG |
|
3,700 |
|
141,196 |
|
|
|
|
|
3,700 |
|
141,196 |
| |||
|
|
SAP AG |
|
3,513 |
|
283,945 |
|
|
|
|
|
3,513 |
|
283,945 |
| |||
|
|
Siemens AG |
|
|
|
|
|
1,996 |
|
263,313 |
|
1,996 |
|
263,313 |
| |||
|
|
Stada Arzneimittel AG |
|
2,300 |
|
100,293 |
|
|
|
|
|
2,300 |
|
100,293 |
| |||
|
|
Volkswagen AG |
|
1,300 |
|
348,593 |
|
|
|
|
|
1,300 |
|
348,593 |
| |||
|
|
|
|
|
|
4,618,160 |
|
|
|
23,193,718 |
|
|
|
27,811,878 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Greece |
|
0.0%, 0.4%, 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Hellenic Telecommunications Organization SA* |
|
|
|
|
|
81,166 |
|
1,296,685 |
|
81,166 |
|
1,296,685 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Hong Kong |
|
3.4%, 2.8%, 2.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
AIA Group Ltd. |
|
105,409 |
|
512,667 |
|
|
|
|
|
105,409 |
|
512,667 |
| |||
|
|
Bank of East Asia Ltd. |
|
|
|
|
|
101,400 |
|
418,871 |
|
101,400 |
|
418,871 |
| |||
|
|
Cheung Kong Holdings Ltd. |
|
9,000 |
|
153,696 |
|
23,000 |
|
392,779 |
|
32,000 |
|
546,475 |
| |||
|
|
Cheung Kong Infrastructure Holdings Ltd. |
|
|
|
|
|
11,000 |
|
71,886 |
|
11,000 |
|
71,886 |
| |||
|
|
China Resources Cement Holdings Ltd. |
|
|
|
|
|
84,000 |
|
58,478 |
|
84,000 |
|
58,478 |
| |||
|
|
First Pacific Co. Ltd. |
|
112,000 |
|
124,546 |
|
|
|
|
|
112,000 |
|
124,546 |
| |||
|
|
Galaxy Entertainment Group Ltd.* |
|
|
|
|
|
203,000 |
|
1,602,518 |
|
203,000 |
|
1,602,518 |
| |||
|
|
Hang Seng Bank Ltd. |
|
|
|
|
|
11,500 |
|
187,749 |
|
11,500 |
|
187,749 |
| |||
|
|
Hong Kong Exchanges and Clearing Ltd. |
|
21,437 |
|
385,509 |
|
|
|
|
|
21,437 |
|
385,509 |
| |||
|
|
Huabao International Holdings Ltd. |
|
354,000 |
|
167,675 |
|
1,294,000 |
|
612,913 |
|
1,648,000 |
|
780,588 |
| |||
|
|
Hutchison Whampoa Ltd. |
|
|
|
|
|
135,000 |
|
1,852,133 |
|
135,000 |
|
1,852,133 |
| |||
|
|
Hysan Development Co. Ltd. |
|
|
|
|
|
15,000 |
|
64,333 |
|
15,000 |
|
64,333 |
| |||
|
|
Kingboard Chemical Holdings Ltd. |
|
69,720 |
|
133,248 |
|
|
|
|
|
69,720 |
|
133,248 |
| |||
|
|
Link REIT (The) |
|
|
|
|
|
389,000 |
|
1,936,728 |
|
389,000 |
|
1,936,728 |
| |||
|
|
NWS Holdings Ltd. |
|
|
|
|
|
36,000 |
|
|
61,739 |
|
36,000 |
|
61,739 |
| ||
|
|
Sands China Ltd. |
|
42,999 |
|
315,689 |
|
38,400 |
|
281,924 |
|
81,399 |
|
597,613 |
| |||
|
|
Shimao Property Holdings Ltd. |
|
|
|
|
|
479,500 |
|
950,806 |
|
479,500 |
|
950,806 |
| |||
|
|
SJM Holdings Ltd. |
|
|
|
|
|
33,000 |
|
91,804 |
|
33,000 |
|
91,804 |
| |||
|
|
TCC International Holdings Ltd. |
|
|
|
|
|
164,000 |
|
80,433 |
|
164,000 |
|
80,433 |
| |||
|
|
Yue Yuen Industrial Holdings Ltd. |
|
68,200 |
|
211,286 |
|
|
|
|
|
68,200 |
|
211,286 |
| |||
|
|
|
|
|
|
2,004,316 |
|
|
|
8,665,094 |
|
|
|
10,669,410 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
India |
|
0.0%, 1.0%, 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Tata Motors Ltd., ADR(a) |
|
|
|
|
|
56,500 |
|
2,114,230 |
|
56,500 |
|
2,114,230 |
| |||
|
|
Wipro Ltd., ADR(a) |
|
|
|
|
|
86,000 |
|
1,028,560 |
|
86,000 |
|
1,028,560 |
| |||
|
|
|
|
|
|
|
|
|
|
3,142,790 |
|
|
|
3,142,790 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Indonesia |
|
0.0%, 0.2%, 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
PT Bank Mandiri (Persero) Tbk |
|
|
|
|
|
153,000 |
|
130,726 |
|
153,000 |
|
130,726 |
| |||
|
|
PT Bank Negara Indonesia (Persero) Tbk |
|
|
|
|
|
138,000 |
|
57,676 |
|
138,000 |
|
57,676 |
| |||
|
|
PT Bank Rakyat Indonesia (Persero) Tbk |
|
|
|
|
|
186,100 |
|
159,815 |
|
186,100 |
|
159,815 |
| |||
|
|
PT Indofood Sukses Makmur Tbk |
|
|
|
|
|
104,000 |
|
63,620 |
|
104,000 |
|
63,620 |
| |||
|
|
PT United Tractors Tbk |
|
|
|
|
|
32,500 |
|
61,104 |
|
32,500 |
|
61,104 |
| |||
|
|
|
|
|
|
|
|
|
|
472,941 |
|
|
|
472,941 |
|
Ireland |
|
0.4%, 0.5%, 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Greencore Group PLC |
|
|
|
|
|
242,291 |
|
$ |
1,070,135 |
|
242,291 |
|
$ |
1,070,135 |
| |
|
|
Permanent TSB Group Holdings PLC* |
|
15,600 |
|
$ |
2,057 |
|
|
|
|
|
15,600 |
|
2,057 |
| ||
|
|
Shire PLC |
|
|
|
|
|
9,860 |
|
563,910 |
|
9,860 |
|
563,910 |
| |||
|
|
Smurfit Kappa Group PLC |
|
9,500 |
|
211,638 |
|
|
|
|
|
9,500 |
|
211,638 |
| |||
|
|
|
|
|
|
213,695 |
|
|
|
1,634,045 |
|
|
|
1,847,740 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Israel |
|
0.7%, 1.2%, 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Bank Hapoalim BM |
|
21,500 |
|
121,453 |
|
|
|
|
|
21,500 |
|
121,453 |
| |||
|
|
Cellcom Israel Ltd. |
|
|
|
|
|
19,521 |
|
247,490 |
|
19,521 |
|
247,490 |
| |||
|
|
Delek Group Ltd. |
|
|
|
|
|
3,139 |
|
1,272,207 |
|
3,139 |
|
1,272,207 |
| |||
|
|
Elbit Systems Ltd. |
|
2,300 |
|
135,770 |
|
|
|
|
|
2,300 |
|
135,770 |
| |||
|
|
Teva Pharmaceutical Industries Ltd. |
|
3,700 |
|
181,374 |
|
45,052 |
|
2,208,448 |
|
48,752 |
|
2,389,822 |
| |||
|
|
|
|
|
|
438,597 |
|
|
|
3,728,145 |
|
|
|
4,166,742 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Italy |
|
2.0%, 1.5%, 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Azimut Holding SpA |
|
|
|
|
|
33,128 |
|
1,034,181 |
|
33,128 |
|
1,034,181 |
| |||
|
|
Banco Popolare SC* |
|
1,440 |
|
|
29,759 |
|
|
|
|
|
1,440 |
|
29,759 |
| ||
|
|
Enel SpA |
|
52,200 |
|
295,657 |
|
|
|
|
|
52,200 |
|
295,657 |
| |||
|
|
Eni SpA |
|
14,200 |
|
367,770 |
|
41,062 |
|
1,063,477 |
|
55,262 |
|
1,431,247 |
| |||
|
|
Fiat SpA* |
|
|
|
|
|
13,913 |
|
167,968 |
|
13,913 |
|
167,968 |
| |||
|
|
Intesa Sanpaolo SpA |
|
106,979 |
|
366,085 |
|
|
|
|
|
106,979 |
|
366,085 |
| |||
|
|
Snam SpA |
|
|
|
|
|
33,349 |
|
200,592 |
|
33,349 |
|
200,592 |
| |||
|
|
Telecom Italia SpA |
|
112,600 |
|
144,694 |
|
511,844 |
|
508,759 |
|
624,444 |
|
653,453 |
| |||
|
|
UnipolSai SpA* |
|
|
|
|
|
409,449 |
|
1,506,591 |
|
409,449 |
|
1,506,591 |
| |||
|
|
|
|
|
|
1,203,965 |
|
|
|
4,481,568 |
|
|
|
5,685,533 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Japan |
|
17.2%, 14.3%, 14.7% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Alpine Electronics, Inc. |
|
8,373 |
|
99,827 |
|
|
|
|
|
8,373 |
|
99,827 |
| |||
|
|
Aoyama Trading Co. Ltd. |
|
8,400 |
|
208,445 |
|
2,200 |
|
|
54,593 |
|
10,600 |
|
263,038 |
| ||
|
|
Asahi Kasei Corp. |
|
|
|
|
|
21,000 |
|
142,775 |
|
21,000 |
|
142,775 |
| |||
|
|
Bridgestone Corp. |
|
8,692 |
|
311,222 |
|
52,000 |
|
1,861,886 |
|
60,692 |
|
2,173,108 |
| |||
|
|
Daicel Corp. |
|
|
|
|
|
7,000 |
|
58,624 |
|
7,000 |
|
58,624 |
| |||
|
|
Daikin Industries Ltd. |
|
|
|
|
|
28,700 |
|
1,660,127 |
|
28,700 |
|
1,660,127 |
| |||
|
|
Daiwa Securities Group, Inc. |
|
|
|
|
|
32,000 |
|
239,950 |
|
32,000 |
|
239,950 |
| |||
|
|
Dentsu, Inc. |
|
|
|
|
|
3,100 |
|
127,139 |
|
3,100 |
|
127,139 |
| |||
|
|
FANUC Corp. |
|
2,166 |
|
390,824 |
|
3,100 |
|
559,351 |
|
5,266 |
|
950,175 |
| |||
|
|
Fuji Electric Co. Ltd. |
|
|
|
|
|
14,000 |
|
63,536 |
|
14,000 |
|
63,536 |
| |||
|
|
Fuji Heavy Industries Ltd. |
|
|
|
|
|
82,000 |
|
2,156,164 |
|
82,000 |
|
2,156,164 |
| |||
|
|
FUJIFILM Holdings Corp. |
|
|
|
|
|
29,900 |
|
772,379 |
|
29,900 |
|
772,379 |
| |||
|
|
Fujitsu Ltd. |
|
|
|
|
|
278,000 |
|
1,634,704 |
|
278,000 |
|
1,634,704 |
| |||
|
|
Fukuoka Financial Group, Inc. |
|
39,000 |
|
159,276 |
|
|
|
|
|
39,000 |
|
159,276 |
| |||
|
|
Fuyo General Lease Co. Ltd. |
|
4,300 |
|
147,966 |
|
|
|
|
|
4,300 |
|
147,966 |
| |||
|
|
Heiwa Corp. |
|
17,600 |
|
292,863 |
|
|
|
|
|
17,600 |
|
292,863 |
| |||
|
|
Hino Motors Ltd. |
|
|
|
|
|
4,200 |
|
55,331 |
|
4,200 |
|
55,331 |
| |||
|
|
Hirose Electric Co. Ltd. |
|
|
|
|
|
500 |
|
70,577 |
|
500 |
|
70,577 |
| |||
|
|
Hitachi Ltd. |
|
|
|
|
|
81,000 |
|
577,444 |
|
81,000 |
|
577,444 |
| |||
|
|
Japan Exchange Group, Inc. |
|
|
|
|
|
4,000 |
|
79,144 |
|
4,000 |
|
79,144 |
| |||
|
|
Japan Tobacco, Inc. |
|
9,584 |
|
315,012 |
|
46,300 |
|
1,521,815 |
|
55,884 |
|
1,836,827 |
| |||
|
|
JGC Corp. |
|
|
|
|
|
3,000 |
|
97,144 |
|
3,000 |
|
97,144 |
| |||
|
|
JX Holdings, Inc. |
|
23,900 |
|
124,180 |
|
|
|
|
|
23,900 |
|
124,180 |
| |||
|
|
KDDI Corp. |
|
4,500 |
|
239,993 |
|
36,700 |
|
1,957,273 |
|
41,200 |
|
2,197,266 |
| |||
|
|
Keihin Corp. |
|
9,400 |
|
136,417 |
|
|
|
|
|
9,400 |
|
136,417 |
| |||
|
|
Keyence Corp. |
|
|
|
|
|
700 |
|
270,033 |
|
700 |
|
270,033 |
| |||
|
|
Kubota Corp. |
|
21,590 |
|
278,263 |
|
|
|
|
|
21,590 |
|
278,263 |
| |||
|
|
KYORIN Holdings, Inc. |
|
5,300 |
|
102,158 |
|
|
|
|
|
5,300 |
|
102,158 |
| |||
|
|
Kyowa Exeo Corp. |
|
16,200 |
|
209,558 |
|
|
|
|
|
16,200 |
|
209,558 |
| |||
|
|
LIXIL Group Corp. |
|
|
|
|
|
4,500 |
|
119,250 |
|
4,500 |
|
119,250 |
| |||
|
|
Marubeni Corp. |
|
29,000 |
|
193,790 |
|
46,000 |
|
307,391 |
|
75,000 |
|
501,181 |
| |||
|
|
Medipal Holdings Corp. |
|
|
|
|
|
109,400 |
|
1,538,761 |
|
109,400 |
|
1,538,761 |
| |||
|
|
Miraca Holdings, Inc. |
|
2,400 |
|
104,034 |
|
|
|
|
|
2,400 |
|
104,034 |
| |||
|
|
Mitsubishi Corp. |
|
5,900 |
|
105,653 |
|
111,000 |
|
1,987,712 |
|
116,900 |
|
2,093,365 |
| |||
|
|
Mitsubishi Electric Corp. |
|
|
|
|
|
31,000 |
|
352,992 |
|
31,000 |
|
352,992 |
| |||
|
|
Mitsubishi Estate Co. Ltd. |
|
13,249 |
|
$ |
300,625 |
|
|
|
|
|
13,249 |
|
$ |
300,625 |
| |
|
|
Mitsubishi UFJ Financial Group, Inc. |
|
125,538 |
|
667,799 |
|
540,100 |
|
$ |
2,873,061 |
|
665,638 |
|
3,540,860 |
| ||
|
|
Mitsui & Co. Ltd. |
|
18,800 |
|
266,629 |
|
129,500 |
|
1,836,618 |
|
148,300 |
|
2,103,247 |
| |||
|
|
Mizuho Financial Group, Inc. |
|
186,800 |
|
365,868 |
|
1,190,300 |
|
2,331,331 |
|
1,377,100 |
|
2,697,199 |
| |||
|
|
Morinaga Milk Industry Co. Ltd. |
|
66,000 |
|
246,365 |
|
|
|
|
|
66,000 |
|
246,365 |
| |||
|
|
Murata Manufacturing Co. Ltd. |
|
|
|
|
|
3,300 |
|
275,101 |
|
3,300 |
|
275,101 |
| |||
|
|
Namco Bandai Holdings, Inc. |
|
|
|
|
|
2,800 |
|
60,494 |
|
2,800 |
|
60,494 |
| |||
|
|
Nichii Gakkan Co. |
|
13,800 |
|
121,722 |
|
|
|
|
|
13,800 |
|
121,722 |
| |||
|
|
Nidec Corp. |
|
|
|
|
|
10,800 |
|
610,583 |
|
10,800 |
|
610,583 |
| |||
|
|
Nippon Flour Mills Co. Ltd. |
|
|
|
|
|
88,000 |
|
490,985 |
|
88,000 |
|
490,985 |
| |||
|
|
Nippon Paint Co. Ltd. |
|
|
|
|
|
4,000 |
|
61,885 |
|
4,000 |
|
61,885 |
| |||
|
|
Nippon Steel & Sumitomo Metal Corp. |
|
|
|
|
|
216,000 |
|
566,706 |
|
216,000 |
|
566,706 |
| |||
|
|
Nippon Telegraph & Telephone Corp. |
|
8,000 |
|
443,942 |
|
44,000 |
|
2,441,682 |
|
52,000 |
|
2,885,624 |
| |||
|
|
Nippon Yusen K.K. |
|
|
|
|
|
27,000 |
|
73,184 |
|
27,000 |
|
73,184 |
| |||
|
|
Nishi-Nippon City Bank Ltd. (The) |
|
48,000 |
|
109,181 |
|
|
|
|
|
48,000 |
|
109,181 |
| |||
|
|
Nitto Denko Corp. |
|
|
|
|
|
2,700 |
|
116,900 |
|
2,700 |
|
116,900 |
| |||
|
|
NKSJ Holdings, Inc. |
|
|
|
|
|
14,800 |
|
369,243 |
|
14,800 |
|
369,243 |
| |||
|
|
NSK Ltd. |
|
|
|
|
|
8,000 |
|
84,102 |
|
8,000 |
|
84,102 |
| |||
|
|
NTT DoCoMo, Inc. |
|
16,200 |
|
258,399 |
|
|
|
|
|
16,200 |
|
258,399 |
| |||
|
|
Oji Holdings Corp. |
|
|
|
|
|
14,000 |
|
58,821 |
|
14,000 |
|
58,821 |
| |||
|
|
Omron Corp. |
|
|
|
|
|
3,600 |
|
|
127,492 |
|
3,600 |
|
127,492 |
| ||
|
|
Otsuka Holdings Co. Ltd. |
|
5,800 |
|
167,085 |
|
65,900 |
|
1,898,434 |
|
71,700 |
|
2,065,519 |
| |||
|
|
Panasonic Corp. |
|
|
|
|
|
180,600 |
|
1,968,552 |
|
180,600 |
|
1,968,552 |
| |||
|
|
Resona Holdings, Inc. |
|
65,400 |
|
334,390 |
|
32,800 |
|
167,707 |
|
98,200 |
|
502,097 |
| |||
|
|
Rohm Co. Ltd. |
|
|
|
|
|
1,600 |
|
76,515 |
|
1,600 |
|
76,515 |
| |||
|
|
Sankyu, Inc. |
|
49,800 |
|
189,829 |
|
|
|
|
|
49,800 |
|
189,829 |
| |||
|
|
Seiko Epson Corp. |
|
|
|
|
|
56,300 |
|
1,536,428 |
|
56,300 |
|
1,536,428 |
| |||
|
|
Seino Holdings Co. Ltd. |
|
12,000 |
|
118,605 |
|
|
|
|
|
12,000 |
|
118,605 |
| |||
|
|
Sekisui Chemical Co. Ltd. |
|
|
|
|
|
142,000 |
|
1,439,057 |
|
142,000 |
|
1,439,057 |
| |||
|
|
Shimachu Co. Ltd. |
|
6,200 |
|
136,230 |
|
|
|
|
|
6,200 |
|
136,230 |
| |||
|
|
Shionogi & Co. Ltd. |
|
|
|
|
|
5,000 |
|
87,642 |
|
5,000 |
|
87,642 |
| |||
|
|
Shizuoka Gas Co. Ltd. |
|
25,400 |
|
152,838 |
|
|
|
|
|
25,400 |
|
152,838 |
| |||
|
|
Showa Shell Sekiyu K.K. |
|
|
|
|
|
9,700 |
|
98,401 |
|
9,700 |
|
98,401 |
| |||
|
|
SoftBank Corp. |
|
4,986 |
|
|
371,347 |
|
|
|
|
|
4,986 |
|
371,347 |
| ||
|
|
Sumitomo Corp. |
|
15,100 |
|
196,005 |
|
18,500 |
|
240,139 |
|
33,600 |
|
436,144 |
| |||
|
|
Sumitomo Metal Mining Co. Ltd. |
|
9,000 |
|
135,941 |
|
9,000 |
|
135,941 |
|
18,000 |
|
271,882 |
| |||
|
|
Sumitomo Mitsui Financial Group, Inc. |
|
9,900 |
|
391,350 |
|
63,100 |
|
2,494,363 |
|
73,000 |
|
2,885,713 |
| |||
|
|
Sumitomo Mitsui Trust Holdings, Inc. |
|
101,998 |
|
420,303 |
|
|
|
|
|
101,998 |
|
420,303 |
| |||
|
|
Suzuki Motor Corp. |
|
|
|
|
|
5,900 |
|
152,220 |
|
5,900 |
|
152,220 |
| |||
|
|
Takata Corp. |
|
|
|
|
|
6,100 |
|
143,728 |
|
6,100 |
|
143,728 |
| |||
|
|
Toagosei Co. Ltd. |
|
33,000 |
|
138,088 |
|
|
|
|
|
33,000 |
|
138,088 |
| |||
|
|
Toppan Forms Co. Ltd. |
|
16,700 |
|
153,444 |
|
|
|
|
|
16,700 |
|
153,444 |
| |||
|
|
TOTO Ltd. |
|
|
|
|
|
130,000 |
|
1,838,897 |
|
130,000 |
|
1,838,897 |
| |||
|
|
Toyota Motor Corp. |
|
11,054 |
|
597,227 |
|
18,134 |
|
979,747 |
|
29,188 |
|
1,576,974 |
| |||
|
|
Tsumura & Co. |
|
4,300 |
|
102,207 |
|
|
|
|
|
4,300 |
|
102,207 |
| |||
|
|
West Japan Railway Co. |
|
3,900 |
|
158,156 |
|
|
|
|
|
3,900 |
|
158,156 |
| |||
|
|
Yokohama Rubber Co. Ltd. (The) |
|
31,000 |
|
276,893 |
|
|
|
|
|
31,000 |
|
276,893 |
| |||
|
|
|
|
|
|
10,239,949 |
|
|
|
43,902,054 |
|
|
|
54,142,003 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Liechtenstein |
|
0.2%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
VP Bank AG |
|
1,400 |
|
139,507 |
|
|
|
|
|
1,400 |
|
139,507 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Luxembourg |
|
0.0%, 0.0%,0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Millicom International Cellular SA, SDR |
|
|
|
|
|
1,180 |
|
116,956 |
|
1,180 |
|
116,956 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Macau |
|
0.0%, 0.3%,0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
MGM China Holdings Ltd. |
|
|
|
|
|
15,600 |
|
54,509 |
|
15,600 |
|
54,509 |
| |||
|
|
Wynn Macau Ltd. |
|
|
|
|
|
218,800 |
|
865,917 |
|
218,800 |
|
865,917 |
| |||
|
|
|
|
|
|
|
|
|
|
920,426 |
|
|
|
920,426 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Malaysia |
|
0.0%, 0.2%, 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Kossan Rubber Industries |
|
|
|
|
|
84,100 |
|
105,615 |
|
84,100 |
|
105,615 |
| |||
|
|
Malayan Banking Bhd |
|
|
|
|
|
72,200 |
|
219,163 |
|
72,200 |
|
219,163 |
|
|
|
MISC Bhd* |
|
|
|
|
|
27,500 |
|
$ |
54,943 |
|
27,500 |
|
$ |
54,943 |
| |
|
|
Sunway Bhd |
|
|
|
|
|
329,400 |
|
313,437 |
|
329,400 |
|
313,437 |
| |||
|
|
|
|
|
|
|
|
|
|
693,158 |
|
|
|
693,158 |
| |||
Mexico |
|
0.0%, 0.3%, 0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
America Movil SAB de CV (Class L Stock) |
|
|
|
|
|
975,100 |
|
983,094 |
|
975,100 |
|
983,094 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Netherlands |
|
4.1%, 2.0%, 2.4% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Aegon NV |
|
18,800 |
|
$ |
172,328 |
|
141,218 |
|
1,294,461 |
|
160,018 |
|
1,466,789 |
| ||
|
|
ASML Holding NV |
|
3,610 |
|
294,627 |
|
|
|
|
|
3,610 |
|
294,627 |
| |||
|
|
ING Groep NV, CVA* |
|
53,454 |
|
764,116 |
|
|
|
|
|
53,454 |
|
764,116 |
| |||
|
|
Koninklijke Ahold NV |
|
15,415 |
|
298,008 |
|
15,244 |
|
294,695 |
|
30,659 |
|
592,703 |
| |||
|
|
Royal Dutch Shell PLC (Class A Stock) |
|
|
|
|
|
39,954 |
|
1,579,542 |
|
39,954 |
|
1,579,542 |
| |||
|
|
Royal Dutch Shell PLC (Class B Stock) |
|
21,700 |
|
921,399 |
|
43,225 |
|
|
1,835,367 |
|
64,925 |
|
2,756,766 |
| ||
|
|
Unilever NV, CVA |
|
|
|
|
|
29,178 |
|
1,251,184 |
|
29,178 |
|
1,251,184 |
| |||
|
|
|
|
|
|
2,450,478 |
|
|
|
6,255,249 |
|
|
|
8,705,727 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
New Zealand |
|
0.6%, 0.6%, 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Air New Zealand Ltd. |
|
185,600 |
|
336,319 |
|
424,002 |
|
768,319 |
|
609,602 |
|
1,104,638 |
| |||
|
|
Auckland International Airport Ltd. |
|
|
|
|
|
301,428 |
|
1,032,367 |
|
301,428 |
|
1,032,367 |
| |||
|
|
|
|
|
|
336,319 |
|
|
|
1,800,686 |
|
|
|
2,137,005 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Norway |
|
1.1%, 1.4%, 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Austevoll Seafood ASA |
|
|
|
|
|
18,428 |
|
119,370 |
|
18,428 |
|
119,370 |
| |||
|
|
DNB ASA |
|
10,900 |
|
193,208 |
|
113,082 |
|
2,004,439 |
|
123,982 |
|
2,197,647 |
| |||
|
|
Gjensidige Forsikring ASA |
|
|
|
|
|
3,313 |
|
61,085 |
|
3,313 |
|
61,085 |
| |||
|
|
Leroy Seafood Group ASA |
|
|
|
|
|
8,953 |
|
317,098 |
|
8,953 |
|
317,098 |
| |||
|
|
Marine Harvest ASA |
|
|
|
|
|
87,190 |
|
1,069,386 |
|
87,190 |
|
1,069,386 |
| |||
|
|
Statoil ASA |
|
8,300 |
|
253,029 |
|
18,541 |
|
565,230 |
|
26,841 |
|
818,259 |
| |||
|
|
Yara International ASA |
|
4,500 |
|
212,722 |
|
2,979 |
|
140,822 |
|
7,479 |
|
353,544 |
| |||
|
|
|
|
|
|
658,959 |
|
|
|
4,277,430 |
|
|
|
4,936,389 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Philippines |
|
0.0%, 0.2%, 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Alliance Global Group, Inc. |
|
|
|
|
|
91,300 |
|
63,943 |
|
91,300 |
|
63,943 |
| |||
|
|
First Gen Corp. |
|
|
|
|
|
501,700 |
|
213,880 |
|
501,700 |
|
213,880 |
| |||
|
|
Manila Water Co., Inc. |
|
|
|
|
|
281,100 |
|
168,262 |
|
281,100 |
|
168,262 |
| |||
|
|
|
|
|
|
|
|
|
|
446,085 |
|
|
|
446,085 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Poland |
|
0.0%, 0.3%, 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Bank Pekao SA |
|
|
|
|
|
2,348 |
|
150,696 |
|
2,348 |
|
150,696 |
| |||
|
|
KGHM Polska Miedz SA |
|
|
|
|
|
2,269 |
|
82,156 |
|
2,269 |
|
82,156 |
| |||
|
|
Powszechny Zaklad Ubezpieczen SA |
|
|
|
|
|
4,865 |
|
690,105 |
|
4,865 |
|
690,105 |
| |||
|
|
|
|
|
|
|
|
|
|
922,957 |
|
|
|
922,957 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Portugal |
|
0.0%, 0.8%, 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
EDP-Energias de Portugal SA |
|
|
|
|
|
474,875 |
|
2,306,779 |
|
474,875 |
|
2,306,779 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Russia |
|
0.0%, 1.0%, 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Gazprom OAO, ADR |
|
|
|
|
|
97,208 |
|
701,064 |
|
97,208 |
|
701,064 |
| |||
|
|
Lukoil OAO, ADR |
|
|
|
|
|
32,896 |
|
1,738,554 |
|
32,896 |
|
1,738,554 |
| |||
|
|
Magnit OJSC, GDR, RegS |
|
|
|
|
|
4,186 |
|
196,951 |
|
4,186 |
|
196,951 |
| |||
|
|
NOVATEK OAO, GDR, RegS |
|
|
|
|
|
1,634 |
|
168,792 |
|
1,634 |
|
168,792 |
| |||
|
|
Sberbank of Russia, ADR* |
|
|
|
|
|
46,643 |
|
390,962 |
|
46,643 |
|
390,962 |
| |||
|
|
|
|
|
|
|
|
|
|
3,196,323 |
|
|
|
3,196,323 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Singapore |
|
0.0%, 0.7%, 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
CapitaCommercial Trust |
|
|
|
|
|
57,000 |
|
72,945 |
|
57,000 |
|
72,945 |
| |||
|
|
Mapletree Industrial Trust |
|
|
|
|
|
255,000 |
|
293,434 |
|
255,000 |
|
293,434 |
| |||
|
|
United Overseas Bank Ltd. |
|
|
|
|
|
7,000 |
|
121,836 |
|
7,000 |
|
121,836 |
| |||
|
|
Wilmar International Ltd. |
|
|
|
|
|
639,000 |
|
1,736,684 |
|
639,000 |
|
1,736,684 |
| |||
|
|
|
|
|
|
|
|
|
|
2,224,899 |
|
|
|
2,224,899 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
South Africa |
|
0.0%, 2.6%, 2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Assore Ltd. |
|
|
|
|
|
4,002 |
|
154,899 |
|
4,002 |
|
154,899 |
| |||
|
|
AVI Ltd. |
|
|
|
|
|
82,208 |
|
$ |
453,599 |
|
82,208 |
|
$ |
453,599 |
| |
|
|
Capital Property Fund |
|
|
|
|
|
271,265 |
|
273,503 |
|
271,265 |
|
273,503 |
| |||
|
|
FirstRand Ltd. |
|
|
|
|
|
430,012 |
|
1,582,182 |
|
430,012 |
|
1,582,182 |
| |||
|
|
Kumba Iron Ore Ltd., ADR |
|
|
|
|
|
23,145 |
|
824,304 |
|
23,145 |
|
824,304 |
| |||
|
|
Liberty Holdings Ltd. |
|
|
|
|
|
5,338 |
|
64,030 |
|
5,338 |
|
64,030 |
| |||
|
|
Resilient Property Income Fund Ltd. |
|
|
|
|
|
50,357 |
|
275,848 |
|
50,357 |
|
275,848 |
| |||
|
|
Sasol Ltd. |
|
|
|
|
|
43,181 |
|
2,420,050 |
|
43,181 |
|
2,420,050 |
| |||
|
|
Sibanye Gold Ltd. |
|
|
|
|
|
416,169 |
|
1,074,978 |
|
416,169 |
|
1,074,978 |
| |||
|
|
Telkom SA SOC Ltd.* |
|
|
|
|
|
225,072 |
|
805,334 |
|
225,072 |
|
805,334 |
| |||
|
|
|
|
|
|
|
|
|
|
7,928,727 |
|
|
|
7,928,727 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
South Korea |
|
0.0%, 2.3%, 1.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Chongkundang Holdings Corp. |
|
|
|
|
|
16,163 |
|
780,443 |
|
16,163 |
|
780,443 |
| |||
|
|
Cosmax BTI, Inc. |
|
|
|
|
|
20,930 |
|
856,718 |
|
20,930 |
|
856,718 |
| |||
|
|
Coway Co. Ltd. |
|
|
|
|
|
877 |
|
69,320 |
|
877 |
|
69,320 |
| |||
|
|
Dongsuh Co., Inc. |
|
|
|
|
|
4,126 |
|
63,253 |
|
4,126 |
|
63,253 |
| |||
|
|
Hanil Cement Co. Ltd. |
|
|
|
|
|
1,109 |
|
128,055 |
|
1,109 |
|
128,055 |
| |||
|
|
Hyundai Hysco Co. Ltd. |
|
|
|
|
|
20,137 |
|
1,071,939 |
|
20,137 |
|
1,071,939 |
| |||
|
|
Hyundai Steel Co. |
|
|
|
|
|
1,181 |
|
77,384 |
|
1,181 |
|
77,384 |
| |||
|
|
KT&G Corp. |
|
|
|
|
|
1,955 |
|
156,657 |
|
1,955 |
|
156,657 |
| |||
|
|
LF Corp. |
|
|
|
|
|
11,400 |
|
296,395 |
|
11,400 |
|
296,395 |
| |||
|
|
LG Electronics, Inc. |
|
|
|
|
|
2,223 |
|
148,065 |
|
2,223 |
|
148,065 |
| |||
|
|
POSCO |
|
|
|
|
|
212 |
|
62,631 |
|
212 |
|
62,631 |
| |||
|
|
Samsung Electronics Co. Ltd. |
|
|
|
|
|
749 |
|
976,667 |
|
749 |
|
976,667 |
| |||
|
|
SeAH Steel Corp. |
|
|
|
|
|
2,680 |
|
319,364 |
|
2,680 |
|
319,364 |
| |||
|
|
SK Hynix, Inc.* |
|
|
|
|
|
50,050 |
|
1,951,624 |
|
50,050 |
|
1,951,624 |
| |||
|
|
SK Telecom Co. Ltd. |
|
|
|
|
|
308 |
|
63,773 |
|
308 |
|
63,773 |
| |||
|
|
|
|
|
|
|
|
|
|
7,022,288 |
|
|
|
7,022,288 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Spain |
|
2.7%, 1.6%, 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Abertis Infraestructuras SA |
|
|
|
|
|
6,244 |
|
140,549 |
|
6,244 |
|
140,549 |
| |||
|
|
ACS Actividades de Construccion y Servicios SA |
|
|
|
|
|
43,527 |
|
1,868,367 |
|
43,527 |
|
1,868,367 |
| |||
|
|
Amadeus IT Holding SA (Class A Stock) |
|
7,638 |
|
$ |
317,668 |
|
22,755 |
|
946,391 |
|
30,393 |
|
1,264,059 |
| ||
|
|
Banco Bilbao Vizcaya Argentaria SA |
|
33,538 |
|
413,112 |
|
|
|
|
|
33,538 |
|
413,112 |
| |||
|
|
Banco Santander SA |
|
29,000 |
|
288,424 |
|
20,005 |
|
198,963 |
|
49,005 |
|
487,387 |
| |||
|
|
Red Electrica Corp. SA |
|
|
|
|
|
1,939 |
|
159,611 |
|
1,939 |
|
159,611 |
| |||
|
|
Repsol SA |
|
17,300 |
|
465,792 |
|
|
|
|
|
17,300 |
|
465,792 |
| |||
|
|
Telefonica SA |
|
8,000 |
|
134,257 |
|
88,689 |
|
1,488,387 |
|
96,689 |
|
1,622,644 |
| |||
|
|
|
|
|
|
1,619,253 |
|
|
|
4,802,268 |
|
|
|
6,421,521 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Sweden |
|
2.4%, 1.9%, 2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Alfa Laval AB |
|
|
|
|
|
5,075 |
|
135,215 |
|
5,075 |
|
135,215 |
| |||
|
|
Atlas Copco AB (Class B Stock) |
|
|
|
|
|
6,412 |
|
174,889 |
|
6,412 |
|
174,889 |
| |||
|
|
Axfood AB |
|
|
|
|
|
8,715 |
|
463,347 |
|
8,715 |
|
463,347 |
| |||
|
|
Boliden AB |
|
8,600 |
|
131,342 |
|
|
|
|
|
8,600 |
|
131,342 |
| |||
|
|
Hennes & Mauritz AB (Class B Stock) |
|
9,229 |
|
377,770 |
|
|
|
|
|
9,229 |
|
377,770 |
| |||
|
|
Investor AB (Class B Stock)* |
|
|
|
|
|
61,231 |
|
2,371,834 |
|
61,231 |
|
2,371,834 |
| |||
|
|
NCC AB (Class B Stock) |
|
3,400 |
|
119,121 |
|
|
|
|
|
3,400 |
|
119,121 |
| |||
|
|
Oriflame Cosmetics SA, SDR |
|
5,700 |
|
145,960 |
|
|
|
|
|
5,700 |
|
145,960 |
| |||
|
|
Securitas AB (Class B Stock) |
|
12,600 |
|
152,317 |
|
|
|
|
|
12,600 |
|
152,317 |
| |||
|
|
Skandinaviska Enskilda Banken AB (Class A Stock) |
|
|
|
|
|
171,861 |
|
2,373,903 |
|
171,861 |
|
2,373,903 |
| |||
|
|
Swedbank AB (Class A Stock) |
|
8,900 |
|
238,181 |
|
14,919 |
|
399,261 |
|
23,819 |
|
637,442 |
| |||
|
|
TeliaSonera AB |
|
33,900 |
|
246,760 |
|
|
|
|
|
33,900 |
|
246,760 |
| |||
|
|
|
|
|
|
1,411,451 |
|
|
|
5,918,449 |
|
|
|
7,329,900 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Switzerland |
|
8.8%, 5.5%, 6.1% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Actelion Ltd.* |
|
|
|
|
|
1,834 |
|
180,564 |
|
1,834 |
|
180,564 |
| |||
|
|
Autoneum Holding AG |
|
|
|
|
|
657 |
|
139,383 |
|
657 |
|
139,383 |
| |||
|
|
Baloise Holding AG |
|
2,200 |
|
267,902 |
|
|
|
|
|
2,200 |
|
267,902 |
| |||
|
|
Bucher Industries AG |
|
|
|
|
|
996 |
|
324,423 |
|
996 |
|
324,423 |
| |||
|
|
Credit Suisse Group AG* |
|
8,200 |
|
259,962 |
|
|
|
|
|
8,200 |
|
259,962 |
| |||
|
|
EMS-Chemie Holding AG |
|
|
|
|
|
186 |
|
72,577 |
|
186 |
|
72,577 |
| |||
|
|
Geberit AG |
|
|
|
|
|
5,321 |
|
1,777,162 |
|
5,321 |
|
1,777,162 |
| |||
|
|
Georg Fischer AG* |
|
400 |
|
$ |
317,322 |
|
|
|
|
|
400 |
|
$ |
317,322 |
| |
|
|
Julius Baer Group Ltd.* |
|
6,789 |
|
318,000 |
|
|
|
|
|
6,789 |
|
318,000 |
| |||
|
|
Lonza Group AG* |
|
1,100 |
|
115,127 |
|
|
|
|
|
1,100 |
|
115,127 |
| |||
|
|
Nestle SA |
|
9,030 |
|
697,877 |
|
33,008 |
|
$ |
2,551,000 |
|
42,038 |
|
3,248,877 |
| ||
|
|
Novartis AG |
|
12,537 |
|
1,089,874 |
|
61,916 |
|
5,382,517 |
|
74,453 |
|
6,472,391 |
| |||
|
|
Roche Holding AG |
|
2,687 |
|
788,221 |
|
14,373 |
|
4,216,266 |
|
17,060 |
|
5,004,487 |
| |||
|
|
Swiss Life Holding AG* |
|
1,100 |
|
271,013 |
|
|
|
|
|
1,100 |
|
271,013 |
| |||
|
|
Swiss Re AG |
|
4,200 |
|
367,252 |
|
24,119 |
|
2,108,991 |
|
28,319 |
|
2,476,243 |
| |||
|
|
Swisscom AG |
|
|
|
|
|
384 |
|
233,618 |
|
384 |
|
233,618 |
| |||
|
|
UBS AG* |
|
21,951 |
|
459,081 |
|
|
|
|
|
21,951 |
|
459,081 |
| |||
|
|
Zurich Insurance Group AG* |
|
1,000 |
|
286,759 |
|
|
|
|
|
1,000 |
|
286,759 |
| |||
|
|
|
|
|
|
5,238,390 |
|
|
|
16,986,501 |
|
|
|
22,224,891 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Taiwan |
|
0.7%, 3.5%, 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Advanced Semiconductor Engineering, Inc. |
|
|
|
|
|
108,000 |
|
125,762 |
|
108,000 |
|
125,762 |
| |||
|
|
Asia Cement China Holdings Corp. |
|
|
|
|
|
76,500 |
|
55,619 |
|
76,500 |
|
55,619 |
| |||
|
|
Asustek Computer, Inc. |
|
|
|
|
|
12,000 |
|
124,068 |
|
12,000 |
|
124,068 |
| |||
|
|
Catcher Technology Co. Ltd. |
|
|
|
|
|
272,000 |
|
2,296,651 |
|
272,000 |
|
2,296,651 |
| |||
|
|
Cathay Financial Holding Co. Ltd. |
|
|
|
|
|
43,184 |
|
61,062 |
|
43,184 |
|
61,062 |
| |||
|
|
Chimei Materials Technology Corp. |
|
|
|
|
|
1,196,000 |
|
1,392,960 |
|
1,196,000 |
|
1,392,960 |
| |||
|
|
CTBC Financial Holding Co. Ltd. |
|
|
|
|
|
110,210 |
|
65,572 |
|
110,210 |
|
65,572 |
| |||
|
|
Everlight Electronics Co. Ltd. |
|
|
|
|
|
635,000 |
|
1,488,047 |
|
635,000 |
|
1,488,047 |
| |||
|
|
Fubon Financial Holding Co. Ltd. |
|
|
|
|
|
48,000 |
|
62,125 |
|
48,000 |
|
62,125 |
| |||
|
|
Grape King Bio Ltd. |
|
|
|
|
|
140,000 |
|
|
627,762 |
|
140,000 |
|
627,762 |
| ||
|
|
Hey Song Corp. |
|
|
|
|
|
94,000 |
|
98,742 |
|
94,000 |
|
98,742 |
| |||
|
|
Hon Hai Precision Industry Co. Ltd. |
|
|
|
|
|
812,000 |
|
2,332,033 |
|
812,000 |
|
2,332,033 |
| |||
|
|
King Yuan Electronics Co. Ltd. |
|
|
|
|
|
611,000 |
|
466,584 |
|
611,000 |
|
466,584 |
| |||
|
|
Largan Precision Co. Ltd. |
|
|
|
|
|
2,000 |
|
125,218 |
|
2,000 |
|
125,218 |
| |||
|
|
MediaTek, Inc. |
|
|
|
|
|
49,000 |
|
767,830 |
|
49,000 |
|
767,830 |
| |||
|
|
Mega Financial Holding Co. Ltd. |
|
|
|
|
|
79,891 |
|
61,163 |
|
79,891 |
|
61,163 |
| |||
|
|
Merry Electronics Co. Ltd. |
|
|
|
|
|
31,000 |
|
168,553 |
|
31,000 |
|
168,553 |
| |||
|
|
Namchow Chemical Industrial Co. Ltd. |
|
|
|
|
|
179,000 |
|
345,157 |
|
179,000 |
|
345,157 |
| |||
|
|
Taiwan Semiconductor Manufacturing Co. Ltd., ADR |
|
20,492 |
|
411,889 |
|
|
|
|
|
20,492 |
|
411,889 |
| |||
|
|
|
|
|
|
411,889 |
|
|
|
10,664,908 |
|
|
|
11,076,797 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Thailand |
|
0.0%,0.9%, 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Airports of Thailand PCL |
|
|
|
|
|
10,100 |
|
60,997 |
|
10,100 |
|
60,997 |
| |||
|
|
GFPT PCL |
|
|
|
|
|
2,366,800 |
|
1,031,269 |
|
2,366,800 |
|
1,031,269 |
| |||
|
|
PTT Exploration & Production PCL |
|
|
|
|
|
25,600 |
|
126,356 |
|
25,600 |
|
126,356 |
| |||
|
|
PTT Global Chemical PCL |
|
|
|
|
|
703,800 |
|
1,343,005 |
|
703,800 |
|
1,343,005 |
| |||
|
|
Thai Vegetable Oil PCL |
|
|
|
|
|
368,400 |
|
272,088 |
|
368,400 |
|
272,088 |
| |||
|
|
|
|
|
|
|
|
|
|
2,833,715 |
|
|
|
2,833,715 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Turkey |
|
0.0%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Enka Insaat ve Sanayi A/S |
|
|
|
|
|
14,929 |
|
45,381 |
|
14,929 |
|
45,381 |
| |||
|
|
KOC Holding A/S |
|
|
|
|
|
10,705 |
|
47,971 |
|
10,705 |
|
47,971 |
| |||
|
|
Koza Altin Isletmeleri A/S |
|
|
|
|
|
3,540 |
|
35,498 |
|
3,540 |
|
35,498 |
| |||
|
|
|
|
|
|
|
|
|
|
128,850 |
|
|
|
128,850 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
United Kingdom |
|
17.3%, 12.4%, 13.2% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Alent PLC |
|
16,900 |
|
90,738 |
|
|
|
|
|
16,900 |
|
90,738 |
| |||
|
|
AMEC PLC |
|
8,800 |
|
183,789 |
|
|
|
|
|
8,800 |
|
183,789 |
| |||
|
|
Anglo American PLC |
|
8,700 |
|
232,577 |
|
|
|
|
|
8,700 |
|
232,577 |
| |||
|
|
ARM Holdings PLC |
|
5,477 |
|
82,895 |
|
|
|
|
|
5,477 |
|
82,895 |
| |||
|
|
Ashtead Group PLC |
|
|
|
|
|
66,770 |
|
989,272 |
|
66,770 |
|
989,272 |
| |||
|
|
AstraZeneca PLC |
|
8,200 |
|
647,261 |
|
|
|
|
|
8,200 |
|
647,261 |
| |||
|
|
Aviva PLC |
|
54,262 |
|
483,569 |
|
|
|
|
|
54,262 |
|
483,569 |
| |||
|
|
BAE Systems PLC |
|
63,500 |
|
429,606 |
|
|
|
|
|
63,500 |
|
429,606 |
| |||
|
|
Barclays PLC |
|
56,600 |
|
241,683 |
|
|
|
|
|
56,600 |
|
241,683 |
| |||
|
|
Beazley PLC |
|
31,500 |
|
130,673 |
|
|
|
|
|
31,500 |
|
130,673 |
| |||
|
|
BHP Billiton PLC |
|
|
|
|
|
99,765 |
|
3,238,792 |
|
99,765 |
|
3,238,792 |
| |||
|
|
BP PLC |
|
76,000 |
|
641,674 |
|
559,688 |
|
4,725,486 |
|
635,688 |
|
5,367,160 |
| |||
|
|
British American Tobacco PLC |
|
|
|
|
|
20,344 |
|
1,174,758 |
|
20,344 |
|
1,174,758 |
|
|
|
BT Group PLC |
|
42,700 |
|
$ |
266,560 |
|
436,747 |
|
$ |
2,726,443 |
|
479,447 |
|
$ |
2,993,003 |
|
|
|
Burberry Group PLC |
|
12,458 |
|
312,872 |
|
|
|
|
|
12,458 |
|
312,872 |
| |||
|
|
Cable & Wireless Communications PLC |
|
|
|
|
|
590,698 |
|
527,505 |
|
590,698 |
|
527,505 |
| |||
|
|
Capita PLC |
|
|
|
|
|
93,959 |
|
1,722,959 |
|
93,959 |
|
1,722,959 |
| |||
|
|
Centrica PLC |
|
49,700 |
|
|
277,177 |
|
|
|
|
|
49,700 |
|
277,177 |
| ||
|
|
Compass Group PLC |
|
17,110 |
|
272,543 |
|
|
|
|
|
17,110 |
|
272,543 |
| |||
|
|
Diageo PLC |
|
|
|
|
|
35,768 |
|
1,095,919 |
|
35,768 |
|
1,095,919 |
| |||
|
|
Dairy Crest Group PLC |
|
24,700 |
|
192,711 |
|
|
|
|
|
24,700 |
|
192,711 |
| |||
|
|
easyJet PLC |
|
|
|
|
|
74,087 |
|
2,049,951 |
|
74,087 |
|
2,049,951 |
| |||
|
|
Experian PLC |
|
19,625 |
|
377,328 |
|
|
|
|
|
19,625 |
|
377,328 |
| |||
|
|
Ferrexpo PLC |
|
|
|
|
|
397,144 |
|
979,581 |
|
397,144 |
|
979,581 |
| |||
|
|
GlaxoSmithKline PLC |
|
8,900 |
|
245,911 |
|
51,641 |
|
1,426,862 |
|
60,541 |
|
1,672,773 |
| |||
|
|
Hammerson PLC, REIT |
|
|
|
|
|
20,996 |
|
202,633 |
|
20,996 |
|
202,633 |
| |||
|
|
Home Retail Group PLC |
|
40,400 |
|
139,594 |
|
300,617 |
|
1,038,720 |
|
341,017 |
|
1,178,314 |
| |||
|
|
HSBC Holdings PLC |
|
26,155 |
|
267,458 |
|
307,386 |
|
3,140,737 |
|
333,541 |
|
3,408,195 |
| |||
|
|
Intermediate Capital Group PLC |
|
25,000 |
|
187,644 |
|
|
|
|
|
25,000 |
|
187,644 |
| |||
|
|
International Consolidated Airlines Group SA* |
|
|
|
|
|
17,020 |
|
|
116,468 |
|
17,020 |
|
116,468 |
| ||
|
|
ITV PLC |
|
|
|
|
|
683,609 |
|
2,102,840 |
|
683,609 |
|
2,102,840 |
| |||
|
|
J. Sainsbury PLC |
|
53,500 |
|
303,493 |
|
322,768 |
|
1,830,990 |
|
376,268 |
|
2,134,483 |
| |||
|
|
Kingfisher PLC |
|
87,708 |
|
620,652 |
|
|
|
|
|
87,708 |
|
620,652 |
| |||
|
|
Legal & General Group PLC |
|
34,000 |
|
121,711 |
|
99,216 |
|
355,166 |
|
133,216 |
|
476,877 |
| |||
|
|
Liberty Global PLC (Class A Stock)* |
|
715 |
|
28,471 |
|
|
|
|
|
715 |
|
28,471 |
| |||
|
|
Marstons PLC |
|
48,900 |
|
121,588 |
|
|
|
|
|
48,900 |
|
121,588 |
| |||
|
|
Mondi PLC |
|
6,900 |
|
114,704 |
|
|
|
|
|
6,900 |
|
114,704 |
| |||
|
|
National Grid PLC |
|
|
|
|
|
60,597 |
|
861,277 |
|
60,597 |
|
861,277 |
| |||
|
|
Next PLC |
|
|
|
|
|
2,581 |
|
284,739 |
|
2,581 |
|
284,739 |
| |||
|
|
Old Mutual PLC |
|
65,800 |
|
222,409 |
|
|
|
|
|
65,800 |
|
222,409 |
| |||
|
|
Pearson PLC |
|
12,496 |
|
234,323 |
|
|
|
|
|
12,496 |
|
234,323 |
| |||
|
|
Prudential PLC |
|
|
|
|
|
109,331 |
|
2,513,411 |
|
109,331 |
|
2,513,411 |
| |||
|
|
Reckitt Benckiser Group PLC |
|
7,116 |
|
574,443 |
|
10,487 |
|
846,569 |
|
17,603 |
|
1,421,012 |
| |||
|
|
Rio Tinto PLC |
|
|
|
|
|
20,940 |
|
1,138,454 |
|
20,940 |
|
1,138,454 |
| |||
|
|
Rolls-Royce Holdings PLC* |
|
12,935 |
|
229,757 |
|
|
|
|
|
12,935 |
|
229,757 |
| |||
|
|
RSA Insurance Group PLC |
|
71,100 |
|
117,824 |
|
|
|
|
|
71,100 |
|
117,824 |
| |||
|
|
SABMiller PLC |
|
6,948 |
|
378,323 |
|
|
|
|
|
6,948 |
|
378,323 |
| |||
|
|
Schroders PLC |
|
|
|
|
|
26,515 |
|
1,146,661 |
|
26,515 |
|
1,146,661 |
| |||
|
|
Standard Chartered PLC |
|
14,678 |
|
317,883 |
|
|
|
|
|
14,678 |
|
317,883 |
| |||
|
|
Tesco PLC |
|
51,800 |
|
256,612 |
|
|
|
|
|
51,800 |
|
256,612 |
| |||
|
|
TUI Travel PLC |
|
|
|
|
|
8,247 |
|
59,652 |
|
8,247 |
|
59,652 |
| |||
|
|
Tullett Prebon PLC |
|
37,100 |
|
199,416 |
|
|
|
|
|
37,100 |
|
199,416 |
| |||
|
|
Unilever PLC |
|
|
|
|
|
20,954 |
|
937,332 |
|
20,954 |
|
937,332 |
| |||
|
|
Vesuvius PLC |
|
14,800 |
|
104,392 |
|
|
|
|
|
14,800 |
|
104,392 |
| |||
|
|
Vodafone Group PLC |
|
|
|
|
|
230,088 |
|
873,550 |
|
230,088 |
|
873,550 |
| |||
|
|
WM Morrison Supermarkets PLC |
|
88,600 |
|
300,766 |
|
|
|
|
|
88,600 |
|
300,766 |
| |||
|
|
WPP PLC |
|
14,886 |
|
320,964 |
|
|
|
|
|
14,886 |
|
320,964 |
| |||
|
|
|
|
|
|
10,271,994 |
|
|
|
38,106,727 |
|
|
|
48,378,721 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
United States |
|
5.1%, 0.1%, 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Accenture PLC (Class A Stock) |
|
4,991 |
|
400,378 |
|
|
|
|
|
4,991 |
|
400,378 |
| |||
|
|
Actavis, Inc. |
|
1,957 |
|
399,874 |
|
|
|
|
|
1,957 |
|
399,874 |
| |||
|
|
Carnival PLC |
|
9,163 |
|
366,037 |
|
|
|
|
|
9,163 |
|
366,037 |
| |||
|
|
Catamaran Corp.* |
|
|
|
|
|
3,700 |
|
140,566 |
|
3,700 |
|
140,566 |
| |||
|
|
Liberty Global PLC (Class C Stock) |
|
8,750 |
|
336,262 |
|
|
|
|
|
8,750 |
|
336,262 |
| |||
|
|
Lululemon Athletica, Inc.* |
|
6,289 |
|
288,854 |
|
|
|
|
|
6,289 |
|
288,854 |
| |||
|
|
MasterCard, Inc. (Class A Stock) |
|
5,000 |
|
367,750 |
|
|
|
|
|
5,000 |
|
367,750 |
| |||
|
|
Schlumberger Ltd. |
|
4,758 |
|
483,175 |
|
|
|
|
|
4,758 |
|
483,175 |
| |||
|
|
Transocean Ltd. |
|
|
|
|
|
5,771 |
|
246,531 |
|
5,771 |
|
246,531 |
| |||
|
|
Yum! Brands, Inc. |
|
4,803 |
|
369,783 |
|
|
|
|
|
4,803 |
|
369,783 |
| |||
|
|
|
|
|
|
3,012,113 |
|
|
|
387,097 |
|
|
|
3,399,210 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
TOTAL COMMON STOCKS |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
(cost $45,604,766, $252,009,601, $297,614,367) |
|
|
|
57,917,405 |
|
|
|
299,623,211 |
|
|
|
357,540,616 |
|
EXCHANGE TRADED FUNDS |
|
0.0%, 0.9%, 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
United States |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
iShares MSCI EAFE Index Fund(a) |
|
|
|
|
|
32,500 |
|
$ |
2,220,400 |
|
32,500 |
|
$ |
2,220,400 |
| |
|
|
iShares MSCI Emerging Markets Index Fund |
|
|
|
|
|
15,100 |
|
624,083 |
|
15,100 |
|
624,083 |
| |||
|
|
TOTAL EXCHANGE TRADED FUNDS (cost $0, $2,378,451, $2,378,451) |
|
|
|
|
|
|
|
2,844,483 |
|
|
|
2,844,483 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
PREFERRED STOCKS |
|
0.0%, 1.1%, 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Brazil |
|
0.0%, 1.0% ,0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Banco ABC Brasil SA (PRFC) |
|
|
|
|
|
18,100 |
|
105,934 |
|
18,100 |
|
105,934 |
| |||
|
|
Banco Bradesco SA (PRFC) |
|
|
|
|
|
33,600 |
|
498,782 |
|
33,600 |
|
498,782 |
| |||
|
|
Braskem SA (PRFC) |
|
|
|
|
|
30,600 |
|
208,460 |
|
30,600 |
|
208,460 |
| |||
|
|
Cia Paranaense de Energia (PRFC) |
|
|
|
|
|
145,500 |
|
2,082,906 |
|
145,500 |
|
2,082,906 |
| |||
|
|
Petroleo Brasileiro SA (PRFC) |
|
|
|
|
|
28,000 |
|
206,570 |
|
28,000 |
|
206,570 |
| |||
|
|
|
|
|
|
|
|
|
|
3,102,652 |
|
|
|
3,102,652 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Germany |
|
0.0%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Bayerische Motoren Werke AG (PRFC) |
|
|
|
|
|
967 |
|
|
95,322 |
|
967 |
|
95,322 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
South Korea |
|
0.0%, 0.1%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Samsung Electronics Co. Ltd. (PRFC) |
|
|
|
|
|
131 |
|
131,731 |
|
131 |
|
131,731 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
United Kingdom |
|
0.0%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Rolls-Royce Holdings PLC (PRFC C)*(c) (cost $3,253) |
|
1,933,352 |
|
$ |
3,264 |
|
|
|
|
|
1,933,352 |
|
3,264 |
| ||
|
|
TOTAL PREFERRED STOCKS (cost $3,253, $2,905,846, $2,909,099) |
|
|
|
3,264 |
|
|
|
3,329,705 |
|
|
|
3,332,969 |
| |||
|
|
|
|
|
|
|
|
Units |
|
|
|
Units |
|
|
|
RIGHTS* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
0.0%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMBEV SA, expiring 05/29/14 |
|
|
|
|
|
266 |
|
30 |
|
266 |
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Africa |
|
0.0%, 0.0%, 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resilient Property Income Fund Ltd., expiring 05/29/14 |
|
|
|
|
|
3,301 |
|
1,522 |
|
3,301 |
|
1,522 |
|
|
|
TOTAL RIGHTS (cost $0, $0, $0) |
|
|
|
|
|
|
|
1,552 |
|
|
|
1,552 |
|
|
|
TOTAL LONG-TERM INVESTMENTS (cost $45,608,019, $257,293,898, $302,901,917) |
|
|
|
|
|
|
|
305,798,951 |
|
|
|
363,719,620 |
|
SHORT-TERM INVESTMENT |
|
1.5%, 2.7%, 2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFILIATED MONEY MARKET MUTUAL FUND
|
|
|
|
|
|
|
|
Shares |
|
|
|
Shares |
|
|
| |||
|
|
Prudential Investment Portfolios 2 - Prudential Core Taxable |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
Money Market Fund (cost $880,849, $8,351,091; includes $6,934,657 of cash collateral for securities on loan, $9,231,940; includes $6,934,657 of cash collateral for securities on loan.) (b) |
|
880,849 |
|
880,849 |
|
8,351,091 |
|
8,351,091 |
|
9,231,940 |
|
9,231,940 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TOTAL INVESTMENTS |
|
99.0%, 102.2%, 101.7% (cost $46,488,868, $265,644,989, $312,133,857;) |
|
|
|
58,801,518 |
|
|
|
314,150,042 |
|
|
|
372,951,560 |
| |||
|
|
Other assets in excess of liabilities/Liabilities in excess of other assets (d) (1.0%, (2.2%), (1.7%)) |
|
|
|
594,582 |
|
|
|
(6,794,787 |
) |
|
|
(6,200,205 |
) | |||
|
|
NET ASSETS 100.0%, 100.0%, 100.0% |
|
|
|
$ |
59,396,100 |
|
|
|
$ |
307,355,255 |
|
|
|
$ |
366,751,355 |
|
The following abbreviations are used in the portfolio descriptions:
RegSRegulation S. Security was purchased pursuant to Regulation S and may not be offered, sold or delivered
within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
ADRAmerican Depositary Receipt
CVACertificate Van Aandelen (Bearer)
EAFEEurope, Australasia and Far East
GDRGlobal Depositary Receipt
MSCIMorgan Stanley Capital International
PRFCPreference Shares
REITReal Estate Investment Trust
SDRSwedish Depositary Receipt
EUR- Euro
JPY- Japanese Yen
* Non-income producing security.
(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $6,801,516; cash collateral of $6,934,657 (included with liabilities) was received with which the Series purchased highly liquid short-term investments. Securities on loan are subject to contractual netting arrangements.
(b) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.
(c) Indicates a security or securities that have been deemed illiquid.
(d) Includes net unrealized appreciation (depreciation) on the following derivative contracts held at the reporting period end:
(e) All of the securities in the Pro Forma Prudential International Equity Fund after Reorganization are in alignment with the investment objective of the Acquiring Fund. However, securities may be transitioned at the discretion of the Portfolio Manager.
Prudential International Value Fund
Forward foreign currency exchange contracts outstanding at April 30, 2014:
|
|
|
|
|
|
Value at |
|
|
|
|
| ||||
|
|
|
|
Notional |
|
Settlement |
|
|
|
|
| ||||
|
|
|
|
Amount |
|
Date |
|
Current |
|
Unrealized |
| ||||
Purchase Contracts |
|
Counterparty |
|
(000) |
|
Payable |
|
Value |
|
Depreciation |
| ||||
Japanese Yen, |
|
|
|
|
|
|
|
|
|
|
| ||||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
92,231 |
|
$ |
911,905 |
|
$ |
902,518 |
|
$ |
(9,387 |
) |
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
152,265 |
|
1,496,359 |
|
1,489,975 |
|
(6,384 |
) | |||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
28,936 |
|
283,396 |
|
283,151 |
|
(245 |
) | |||
|
|
|
|
|
|
$ |
2,691,660 |
|
$ |
2,675,644 |
|
$ |
(16,016 |
) | |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
Value at |
|
|
|
|
| ||||
|
|
|
|
Notional |
|
Settlement |
|
|
|
|
| ||||
|
|
|
|
Amount |
|
Date |
|
Current |
|
Unrealized |
| ||||
Sales Contracts |
|
Counterparty |
|
(000) |
|
Receivable |
|
Value |
|
Depreciation |
| ||||
Euro, |
|
|
|
|
|
|
|
|
|
|
| ||||
Expiring 10/28/14 |
|
State Street Bank |
|
EUR |
1,209 |
|
$ |
1,669,226 |
|
$ |
1,676,597 |
|
$ |
(7,371 |
) |
Japanese Yen, |
|
|
|
|
|
|
|
|
|
|
|
| |||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
460,612 |
|
4,397,757 |
|
4,507,278 |
|
$ |
(109,521 |
) | ||
|
|
|
|
|
|
$ |
6,066,983 |
|
$ |
6,183,875 |
|
$ |
(116,892 |
) |
Prudential International Equity did not hold any forward foreign currency exchange contracts outstanding at April 30, 2014.
Pro Forma Prudential International Equity Fund after Reorganization
Forward foreign currency exchange contracts outstanding at April 30, 2014:
|
|
|
|
|
|
Value at |
|
|
|
|
| ||||
|
|
|
|
Notional |
|
Settlement |
|
|
|
|
| ||||
|
|
|
|
Amount |
|
Date |
|
Current |
|
Unrealized |
| ||||
Purchase Contracts |
|
Counterparty |
|
(000) |
|
Payable |
|
Value |
|
Depreciation |
| ||||
Japanese Yen, |
|
|
|
|
|
|
|
|
|
|
| ||||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
92,231 |
|
$ |
911,905 |
|
$ |
902,518 |
|
$ |
(9,387 |
) |
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
152,265 |
|
1,496,359 |
|
1,489,975 |
|
(6,384 |
) | |||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
28,936 |
|
283,396 |
|
283,151 |
|
(245 |
) | |||
|
|
|
|
|
|
$ |
2,691,660 |
|
$ |
2,675,644 |
|
$ |
(16,016 |
) |
|
|
|
|
|
|
Value at |
|
|
|
|
| ||||
|
|
|
|
Notional |
|
Settlement |
|
|
|
|
| ||||
|
|
|
|
Amount |
|
Date |
|
Current |
|
Unrealized |
| ||||
Sales Contracts |
|
Counterparty |
|
(000) |
|
Receivable |
|
Value |
|
Depreciation |
| ||||
Euro, |
|
|
|
|
|
|
|
|
|
|
| ||||
Expiring 10/28/14 |
|
State Street Bank |
|
EUR |
1,209 |
|
$ |
1,669,226 |
|
$ |
1,676,597 |
|
$ |
(7,371 |
) |
Japanese Yen, |
|
|
|
|
|
|
|
|
|
|
|
| |||
Expiring 7/07/14 |
|
State Street Bank |
|
JPY |
460,612 |
|
4,397,757 |
|
4,507,278 |
|
$ |
(109,521 |
) | ||
|
|
|
|
|
|
$ |
6,066,983 |
|
$ |
6,183,875 |
|
$ |
(116,892 |
) |
Various inputs are used in determining the value of the Funds investments. These inputs are summarized in the three broad levels listed below.
Level 1quoted prices generally in active markets for identical securities.
Level 2other significant observable inputs including, but not limited to, quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates, and amortized cost.
Level 3significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
Prudential International Value Fund
The following is a summary of the inputs used as of April 30, 2014 in valuing such portfolio securities:
Investments in Securities |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| |||
Common Stocks |
|
|
|
|
|
|
| |||
Australia |
|
$ |
108,470 |
|
$ |
2,477,209 |
|
$ |
|
|
Austria |
|
|
|
444,757 |
|
|
| |||
Belgium |
|
125,492 |
|
763,522 |
|
|
| |||
Brazil |
|
138,185 |
|
|
|
|
| |||
Canada |
|
310,325 |
|
|
|
|
| |||
China |
|
472,816 |
|
1,100,141 |
|
|
| |||
Denmark |
|
|
|
715,011 |
|
|
| |||
Finland |
|
|
|
515,717 |
|
|
| |||
France |
|
236,543 |
|
6,240,182 |
|
|
| |||
Germany |
|
|
|
4,618,160 |
|
|
| |||
Hong Kong |
|
|
|
2,004,316 |
|
|
| |||
Ireland |
|
2,057 |
|
211,638 |
|
|
| |||
Israel |
|
|
|
438,597 |
|
|
| |||
Italy |
|
|
|
1,203,965 |
|
|
| |||
Japan |
|
|
|
10,239,949 |
|
|
| |||
Liechtenstein |
|
139,507 |
|
|
|
|
| |||
Netherlands |
|
|
|
2,450,478 |
|
|
| |||
New Zealand |
|
|
|
336,319 |
|
|
| |||
Norway |
|
|
|
658,959 |
|
|
| |||
Spain |
|
|
|
1,619,253 |
|
|
| |||
Sweden |
|
|
|
1,411,451 |
|
|
| |||
Switzerland |
|
|
|
5,238,390 |
|
|
| |||
Taiwan |
|
411,889 |
|
|
|
|
| |||
United Kingdom |
|
237,033 |
|
10,034,961 |
|
|
| |||
United States |
|
3,012,113 |
|
|
|
|
| |||
Preferred Stock |
|
|
|
|
|
|
| |||
United Kingdom |
|
|
|
3,264 |
|
|
| |||
Affiliated Money Market Mutual Fund |
|
880,849 |
|
|
|
|
| |||
Other Financial Instruments* |
|
|
|
|
|
|
| |||
Forward Foreign Currency Exchange Contracts |
|
|
|
(132,908 |
) |
|
| |||
Total |
|
$ |
6,075,279 |
|
$ |
52,593,331 |
|
$ |
|
|
* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swaps contracts, which are recorded at the unrealized appreciation/depreciation of the instrument.
Prudential International Equity Fund
The following is a summary of the inputs used as of April 30, 2014 in valuing such portfolio securities:
Prudential International Equity Fund
Investments in Securities |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| |||
Common Stocks |
|
|
|
|
|
|
| |||
Australia |
|
$ |
|
|
$ |
18,469,687 |
|
$ |
|
|
Austria |
|
|
|
1,489,170 |
|
|
| |||
Brazil |
|
3,743,338 |
|
|
|
|
| ||
Canada |
|
21,969,497 |
|
|
|
|
| ||
Chile |
|
360,131 |
|
|
|
|
| ||
China |
|
288,842 |
|
12,195,836 |
|
818,881 |
| ||
Czech Republic |
|
|
|
1,610,998 |
|
|
| ||
Denmark |
|
|
|
5,459,275 |
|
|
| ||
Egypt |
|
1,173,370 |
|
|
|
|
| ||
Finland |
|
|
|
2,640,253 |
|
|
| ||
France |
|
504,395 |
|
19,458,926 |
|
|
| ||
Germany |
|
|
|
23,193,718 |
|
|
| ||
Greece |
|
|
|
1,296,685 |
|
|
| ||
Hong Kong |
|
|
|
8,665,094 |
|
|
| ||
India |
|
3,142,790 |
|
|
|
|
| ||
Indonesia |
|
|
|
472,941 |
|
|
| ||
Ireland |
|
|
|
1,634,045 |
|
|
| ||
Israel |
|
|
|
3,728,145 |
|
|
| ||
Italy |
|
|
|
4,481,568 |
|
|
| ||
Japan |
|
|
|
43,902,054 |
|
|
| ||
Luxembourg |
|
|
|
116,956 |
|
|
| ||
Macau |
|
|
|
920,426 |
|
|
| ||
Malaysia |
|
|
|
693,158 |
|
|
| ||
Mexico |
|
983,094 |
|
|
|
|
| ||
Netherlands |
|
|
|
6,255,249 |
|
|
| ||
New Zealand |
|
|
|
1,800,686 |
|
|
| ||
Norway |
|
61,085 |
|
4,216,345 |
|
|
| ||
Philippines |
|
|
|
446,085 |
|
|
| ||
Poland |
|
|
|
922,957 |
|
|
| ||
Portugal |
|
|
|
2,306,779 |
|
|
| ||
Russia |
|
3,196,323 |
|
|
|
|
| ||
Singapore |
|
|
|
2,224,899 |
|
|
| ||
South Africa |
|
|
|
7,928,727 |
|
|
| ||
South Korea |
|
156,657 |
|
6,865,631 |
|
|
| ||
Spain |
|
|
|
4,802,268 |
|
|
| ||
Sweden |
|
463,347 |
|
5,455,102 |
|
|
| ||
Switzerland |
|
|
|
16,986,501 |
|
|
| ||
Taiwan |
|
|
|
10,664,908 |
|
|
| ||
Thailand |
|
1,343,005 |
|
1,490,710 |
|
|
| ||
Turkey |
|
|
|
128,850 |
|
|
| ||
United Kingdom |
|
|
|
38,106,727 |
|
|
| ||
United States |
|
140,566 |
|
246,531 |
|
|
| ||
Exchange Traded Funds |
|
|
|
|
|
|
| ||
United States |
|
2,844,483 |
|
|
|
|
| ||
Preferred Stocks |
|
|
|
|
|
|
| ||
Brazil |
|
3,102,652 |
|
|
|
|
| ||
Germany |
|
|
|
95,322 |
|
|
| ||
South Korea |
|
|
|
131,731 |
|
|
| ||
Rights |
|
|
|
|
|
|
| ||
Brazil |
|
30 |
|
|
|
|
| ||
South Africa |
|
1,522 |
|
|
|
|
| ||
Affiliated Money Market Mutual Fund |
|
8,351,091 |
|
|
|
|
| ||
Total |
|
$ |
51,826,218 |
|
$ |
261,504,943 |
|
818,881 |
|
Pro Forma Prudential International Equity Fund after Reorganization
The following is a summary of the inputs used as of April 30, 2014 in valuing such portfolio securities:
Prudential International Equity Fund
Investments in Securities |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| |||
Common Stocks |
|
|
|
|
|
|
| |||
Australia |
|
$ |
108,470 |
|
$ |
20,946,896 |
|
$ |
|
|
Austria |
|
|
|
1,933,927 |
|
|
| |||
Belgium |
|
125,492 |
|
763,522 |
|
|
| |||
Brazil |
|
3,881,523 |
|
|
|
|
| |||
Canada |
|
22,279,822 |
|
|
|
|
| |||
Chile |
|
360,131 |
|
|
|
|
| |||
China |
|
761,658 |
|
13,295,977 |
|
818,881 |
| |||
Czech Republic |
|
|
|
1,610,998 |
|
|
| |||
Denmark |
|
|
|
6,174,286 |
|
|
| |||
Egypt |
|
1,173,370 |
|
|
|
|
| |||
Finland |
|
|
|
3,155,970 |
|
|
| |||
France |
|
740,938 |
|
25,699,108 |
|
|
| |||
Germany |
|
|
|
27,811,878 |
|
|
| |||
Greece |
|
|
|
1,296,685 |
|
|
| |||
Hong Kong |
|
|
|
10,669,410 |
|
|
| |||
India |
|
3,142,790 |
|
|
|
|
| |||
Indonesia |
|
|
|
472,941 |
|
|
| |||
Ireland |
|
2,057 |
|
1,845,683 |
|
|
| |||
Israel |
|
|
|
4,166,742 |
|
|
| |||
Italy |
|
|
|
5,685,533 |
|
|
| |||
Japan |
|
|
|
54,142,003 |
|
|
| |||
Liechtenstein |
|
139,507 |
|
|
|
|
| |||
Luxembourg |
|
|
|
116,956 |
|
|
| |||
Macau |
|
|
|
920,426 |
|
|
| |||
Malaysia |
|
|
|
693,158 |
|
|
| |||
Mexico |
|
983,094 |
|
|
|
|
| |||
Netherlands |
|
|
|
8,705,727 |
|
|
| |||
New Zealand |
|
|
|
2,137,005 |
|
|
| |||
Norway |
|
61,085 |
|
4,875,304 |
|
|
| |||
Philippines |
|
|
|
446,085 |
|
|
| |||
Poland |
|
|
|
922,957 |
|
|
| |||
Portugal |
|
|
|
2,306,779 |
|
|
| |||
Russia |
|
3,196,323 |
|
|
|
|
| |||
Singapore |
|
|
|
2,224,899 |
|
|
| |||
South Africa |
|
|
|
7,928,727 |
|
|
| |||
South Korea |
|
156,657 |
|
6,865,631 |
|
|
| |||
Spain |
|
|
|
6,421,521 |
|
|
| |||
Sweden |
|
463,347 |
|
6,866,553 |
|
|
| |||
Switzerland |
|
|
|
22,224,891 |
|
|
| |||
Taiwan |
|
411,889 |
|
10,664,908 |
|
|
| |||
Thailand |
|
1,343,005 |
|
1,490,710 |
|
|
| |||
Turkey |
|
|
|
128,850 |
|
|
| |||
United Kingdom |
|
237,033 |
|
48,141,688 |
|
|
| |||
United States |
|
3,152,679 |
|
246,531 |
|
|
| |||
Exchange Traded Funds |
|
|
|
|
|
|
| |||
United States |
|
2,844,483 |
|
|
|
|
| |||
Preferred Stocks |
|
|
|
|
|
|
| |||
Brazil |
|
3,102,652 |
|
|
|
|
| |||
Germany |
|
|
|
95,322 |
|
|
| |||
South Korea |
|
|
|
131,731 |
|
|
| |||
United Kingdom |
|
|
|
3,264 |
|
|
| |||
Rights |
|
|
|
|
|
|
| |||
Brazil |
|
30 |
|
|
|
|
| |||
South Africa |
|
1,522 |
|
|
|
|
| |||
Other Financial Instruments* |
|
|
|
|
|
|
| |||
Forward Foreign Currency Exchange Contracts |
|
|
|
(132,908 |
) |
|
| |||
Affiliated Money Market Mutual Fund |
|
9,231,940 |
|
|
|
|
| |||
Total |
|
$ |
57,901,497 |
|
$ |
314,098,274 |
|
$ |
818,881 |
|
* Other financial instruments are derivative instruments not reflected in the Portfolio of investments, such as futures, forwards and swaps contracts, which are recorded at the unrealized appreciation/depreciation of the instrument.
Prudential International Value Fund
The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Series financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of April 30, 2014 as presented in the Statement of Assets and Liabilities:
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||
Derivatives not designated as hedging |
|
Balance Sheet |
|
Fair |
|
Balance Sheet |
|
Fair |
| ||
instruments, carried at fair value |
|
Location |
|
Value |
|
Location |
|
Value |
| ||
Foreign exchange contracts |
|
|
|
$ |
|
|
Unrealized depreciation on forward foreign currency contracts |
|
$ |
132,908 |
|
The effects of derivative instruments on the Statement of Operations for the twelve months ended April 30, 2014 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
|
Foreign exchange |
|
|
| |||
instruments, carried at fair value |
|
Rights* |
|
contracts ** |
|
Total |
| |||
Foreign exchange contracts |
|
$ |
|
|
$ |
126,354 |
|
$ |
126,354 |
|
Equity contracts |
|
(48,128 |
) |
|
|
(48,128 |
) | |||
Total |
|
$ |
(48,128 |
) |
$ |
126,354 |
|
$ |
78,226 |
|
* Included in net realized gain (loss) on investment transactions in the Statement of Operations.
** Included in net realized gain (loss) on foreign currency transactions in the Statement of Operations.
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
| |
instruments, carried at fair value |
|
Foreign exchange contracts *** |
| |
|
|
|
| |
Foreign exchange contracts |
|
$ |
(79,581 |
) |
*** Included in net change in unrealized appreciation (depreciation) on foreign currencies in the Statement of Operations.
For the twelve months ended April 30, 2014, the average value at settlement date payable for forward foreign currency exchange purchase contracts was $2,429,450 and the average value at settlement date receivable for forward foreign currency exchange sale contracts was $8,697,662.
Offsetting of over-the-counter (OTC) derivative assets and liabilities:
The Fund invested in OTC derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives, where the legal right to set-off exists, is presented in the summary below.
|
|
Gross Amounts of |
|
Gross Amounts |
|
Collateral |
|
|
| ||||
Counterparty |
|
Recognized Assets(1) |
|
Available for Offset |
|
Received(3) |
|
Net Amount |
| ||||
State Street Bank |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
Gross Amounts of |
|
Gross Amounts |
|
Collateral |
|
|
| ||||
Counterparty |
|
Recognized Liabilities(2) |
|
Available for Offset |
|
Pledged(3) |
|
Net Amount |
| ||||
State Street Bank |
|
$ |
(132,908 |
) |
$ |
|
|
$ |
|
|
$ |
(132,908 |
) |
(1) Includes unrealized appreciation on swaps and forwards, premiums paid on swap agreements and market value of purchased options.
(2) Includes unrealized depreciation on swaps and forwards, premiums received on swap agreements and market value of written options.
(3) Amounts shown reflect actual collateral received or pledged by the Fund. Such amounts are applied up to 100% of the Funds OTC derivative exposure by counterparty.
Prudential International Equity Fund
The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Series financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of April 30, 2014 as presented in the Statement of Assets and Liabilities:
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||
Derivatives not designated as hedging |
|
Balance Sheet |
|
Fair |
|
Balance Sheet |
|
Fair |
| ||
instruments, carried at fair value |
|
Location |
|
Value |
|
Location |
|
Value |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Equity contracts |
|
Unaffiliated investments |
|
$ |
1,552 |
|
|
|
$ |
|
|
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2014 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
| |||||||
instruments, carried at fair value |
|
Futures |
|
Rights* |
|
Total |
| |||
Equity contracts |
|
$ |
38,288 |
|
$ |
454 |
|
$ |
38,742 |
|
* Included in net realized gain (loss) on investment transactions in the Statement of Operations.
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
| |||||||
instruments, carried at fair value |
|
Futures |
|
Rights** |
|
Total |
| |||
Equity contracts |
|
$ |
(40,773 |
) |
$ |
762 |
|
$ |
(40,011 |
) |
** Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.
For the twelve months ended April 30, 2014, the average value at trade date for futures long positions was $1,040,529.
Pro Forma Prudential International Equity Fund after the Reorganization
The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Funds financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of April 30, 2014 as presented in the Statement of Assets and Liabilities:
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||||
Derivatives not designated as hedging |
|
Balance Sheet |
|
Fair |
|
Balance Sheet |
|
Fair |
| ||||
instruments, carried at fair value |
|
Location |
|
Value |
|
Location |
|
Value |
| ||||
Equity contracts |
|
Unaffiliated investments |
|
$ |
1,552 |
|
|
|
$ |
|
| ||
Foreign exchange contracts |
|
|
|
|
|
Unrealized depreciation on forward foreign currency contracts |
|
132,908 |
| ||||
Total |
|
$ |
|
|
$ |
1,552 |
|
$ |
|
|
$ |
132,908 |
|
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2014 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
| ||||||||||
instruments, carried at fair value |
|
Futures |
|
Rights* |
|
Foreign exchange contracts ** |
|
Total |
| ||||
Equity contracts |
|
$ |
38,288 |
|
$ |
(47,674 |
) |
$ |
|
|
$ |
(9,386 |
) |
Foreign exchange contracts |
|
|
|
|
|
126,354 |
|
126,354 |
| ||||
|
|
|
|
|
|
$ |
126,354 |
|
116,968 |
| |||
* Included in net realized gain (loss) on investment transactions in the Statement of Operations.
** Included in net realized gain (loss) on foreign currency transactions in the Statement of Operations.
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging |
|
|
| ||||||||||
instruments, carried at fair value |
|
Futures |
|
Rights*** |
|
Foreign exchange contracts **** |
|
Total |
| ||||
Equity contracts |
|
$ |
(40,773 |
) |
$ |
762 |
|
$ |
|
|
$ |
(40,011 |
) |
Foreign exchange contracts |
|
|
|
|
|
(79,581 |
) |
(79,581 |
) | ||||
|
|
$ |
(40,773 |
) |
$ |
762 |
|
$ |
(79,581 |
) |
$ |
(119,592 |
) |
*** Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.
**** Included in net change in unrealized appreciation (depreciation) on foreign currencies in the Statement of Operations.
For the twelve months ended April 30, 2014, the average value at settlement date payable for forward foreign currency exchange purchase contracts was $2,429,450 and the average value at settlement date receivable for forward foreign currency exchange sale contracts was $8,697,662.
Offsetting of over-the-counter (OTC) derivative assets and liabilities:
The Fund invested in OTC derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives, where the legal right to set-off exists, is presented in the summary below.
|
|
Gross Amounts of |
|
Gross Amounts |
|
Collateral |
|
|
| ||||
Counterparty |
|
Recognized Assets(1) |
|
Available for Offset |
|
Received(3) |
|
Net Amount |
| ||||
State Street Bank |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
Gross Amounts of |
|
Gross Amounts |
|
Collateral |
|
|
| ||||
Counterparty |
|
Recognized Liabilities(2) |
|
Available for Offset |
|
Pledged(3) |
|
Net Amount |
| ||||
State Street Bank |
|
$ |
(132,908 |
) |
$ |
|
|
$ |
|
|
$ |
(132,908 |
) |
(1) Includes unrealized appreciation on swaps and forwards, premiums paid on swap agreements and market value of purchased options.
(2) Includes unrealized depreciation on swaps and forwards, premiums received on swap agreements and market value of written options.
(3) Amounts shown reflect actual collateral received or pledged by the Fund. Such amounts are applied up to 100% of the Funds OTC derivative exposure by counterparty.
Pro-Forma Statement of Assets and Liabilities for the Reorganization (unaudited)
Prudential International Equity Fund after Reorganization
Pro Forma Statement of Assets and Liabilities
as of April 30, 2014 (Unaudited)
|
|
|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
Prudential International |
| ||||
|
|
Prudential International |
|
Prudential International |
|
Pro Forma |
|
Equity Fund After |
| ||||
|
|
Value Fund |
|
Equity Fund |
|
Adjustments |
|
Reorganization |
| ||||
Assets |
|
|
|
|
|
|
|
|
| ||||
Unaffiliated investments at value (A) |
|
$ |
57,920,669 |
|
$ |
305,798,951 |
|
|
|
$ |
363,719,620 |
| |
Affiliated Investments at value |
|
880,849 |
|
8,351,091 |
|
|
|
9,231,940 |
| ||||
Foreign currency, at value (cost $ 389,561 , $612,937 and $1,002,498) |
|
394,272 |
|
615,012 |
|
|
|
1,009,284 |
| ||||
Cash |
|
|
|
392,588 |
|
|
|
392,588 |
| ||||
Dividends and interest receivable |
|
305,490 |
|
1,217,737 |
|
|
|
1,523,227 |
| ||||
Receivable for investments sold |
|
453,399 |
|
1,214,032 |
|
|
|
1,667,431 |
| ||||
Receivable for Fund shares sold |
|
11,251 |
|
95,751 |
|
|
|
107,002 |
| ||||
Tax Reclaim receivable |
|
272,386 |
|
840,057 |
|
|
|
1,112,443 |
| ||||
Prepaid expenses |
|
361 |
|
1,159 |
|
|
|
1,520 |
| ||||
Total assets |
|
60,238,677 |
|
318,526,378 |
|
|
|
378,765,055 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Liabilities |
|
|
|
|
|
|
|
|
| ||||
Payable to broker for collateral for securities on loan |
|
|
|
6,934,657 |
|
|
|
6,934,657 |
| ||||
Payable for investments purchased |
|
499,549 |
|
3,020,375 |
|
|
|
3,519,924 |
| ||||
Unrealized depreciation on forward foreign currency exchange contracts |
|
132,908 |
|
|
|
|
|
132,908 |
| ||||
Payable for Fund shares reacquired |
|
32,157 |
|
586,616 |
|
|
|
618,773 |
| ||||
Accrued expenses |
|
105,838 |
|
272,165 |
|
|
|
|
378,003 |
| |||
Management fee payable |
|
48,352 |
|
213,502 |
|
|
|
261,854 |
| ||||
Distribution fee payable |
|
12,626 |
|
78,341 |
|
|
|
90,967 |
| ||||
Affiliated transfer agent fee payable |
|
11,147 |
|
65,467 |
|
|
|
76,614 |
| ||||
Total liabilities |
|
842,577 |
|
11,171,123 |
|
|
|
12,013,700 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net Assets |
|
$ |
59,396,100 |
|
$ |
307,355,255 |
|
|
|
|
$ |
366,751,355 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net assets were comprised of: |
|
|
|
|
|
|
|
|
| ||||
Common stock, at par |
|
$ |
25,501 |
|
$ |
408,051 |
|
53,362 |
(a) |
$ |
486,914 |
| |
Paid-in capital in excess of par |
|
56,878,042 |
|
456,338,497 |
|
(53,362 |
)(a) |
513,163,177 |
| ||||
|
|
56,903,543 |
|
456,746,548 |
|
|
|
513,650,091 |
| ||||
Undistributed net investment income (Accumulated loss) |
|
94,107 |
|
1,475,327 |
|
|
|
1,569,434 |
| ||||
Accumulated net realized loss on investments and foreign currency transactions |
|
(9,812,139 |
) |
(199,400,508 |
) |
|
|
(209,212,647 |
) | ||||
Net unrealized appreciation on investments and foreign currencies |
|
12,210,589 |
|
48,533,888 |
|
|
|
60,744,477 |
| ||||
Net assets, April 30, 2014 |
|
$ |
59,396,100 |
|
$ |
307,355,255 |
|
$ |
|
|
$ |
366,751,355 |
|
|
|
|
|
|
|
|
|
|
| ||||
(A) Unaffiliated investments at cost |
|
$ |
880,849 |
|
$ |
8,351,091 |
|
|
|
$ |
9,231,940 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Net Asset Value |
|
|
|
|
|
|
|
|
| ||||
Class A |
|
|
|
|
|
|
|
|
| ||||
Net assets |
|
$ |
36,516,668 |
|
$ |
234,298,479 |
|
$ |
|
|
$ |
270,815,147 |
|
Shares of common stock issued and outstanding |
|
1,562,645 |
|
31,034,565 |
|
3,274,000 |
(b) |
35,871,210 |
| ||||
Net asset value and redemption price per share |
|
$ |
23.37 |
|
$ |
7.55 |
|
|
|
$ |
7.55 |
| |
Maximum sales charge (5.50% of offering price) |
|
1.36 |
|
0.44 |
|
|
|
0.44 |
| ||||
Maximum offering price to public |
|
$ |
24.73 |
|
$ |
7.99 |
|
|
|
$ |
7.99 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Class B |
|
|
|
|
|
|
|
|
| ||||
Net assets |
|
$ |
1,449,848 |
|
$ |
6,029,642 |
|
$ |
|
|
$ |
7,479,490 |
|
Shares of common stock issued and outstanding |
|
65,072 |
|
830,623 |
|
134,632 |
(b) |
1,030,327 |
| ||||
Net asset value, offering price and redemption price per share |
|
$ |
22.28 |
|
$ |
7.26 |
|
|
|
$ |
7.26 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Class C |
|
|
|
|
|
|
|
|
| ||||
Net assets |
|
$ |
4,912,703 |
|
$ |
19,521,894 |
|
$ |
|
|
$ |
24,434,597 |
|
Shares of common stock issued and outstanding |
|
220,077 |
|
2,690,269 |
|
456,604 |
(b) |
3,366,950 |
| ||||
Net asset value, offering price and redemption price per share |
|
$ |
22.32 |
|
$ |
7.26 |
|
|
|
$ |
7.26 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Class Z |
|
|
|
|
|
|
|
|
| ||||
Net assets |
|
$ |
16,516,881 |
|
$ |
47,505,240 |
|
$ |
|
(a) |
$ |
64,022,121 |
|
Shares of common stock issued and outstanding |
|
702,281 |
|
6,249,630 |
|
1,470,993 |
(b) |
8,422,904 |
| ||||
Net asset value, offering price and redemption price per share |
|
$ |
23.52 |
|
$ |
7.60 |
|
|
|
$ |
7.60 |
|
(a) Change in consolidated par amount due to Reorganization.
(b) Represents the difference between total additional shares to be issued (see Pro Forma Financial Statements - Note 2) and current Prudential International Equity Fund shares outstanding.
Pro-Forma Statement of Operations for the Reorganization (unaudited)
Prudential International Equity Fund after Reorganization
Pro Forma Statement of Operations
For the Twelve Months Ended April 30, 2014(Unaudited)
|
|
|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
Prudential International |
| ||||
|
|
Prudential International |
|
Prudential International |
|
Pro Forma |
|
Equity Fund After |
| ||||
Net Investment Income |
|
Value Fund |
|
Equity Fund |
|
Adjustments |
|
Reorganization |
| ||||
Income |
|
|
|
|
|
|
|
|
| ||||
Interest |
|
2,508,305 |
|
10,812,979 |
|
|
|
13,321,284 |
| ||||
Total income |
|
2,508,305 |
|
10,812,979 |
|
|
|
13,321,284 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Expenses |
|
|
|
|
|
|
|
|
| ||||
Management fee |
|
943,390 |
|
2,668,185 |
|
(235,825 |
) |
3,375,750 |
| ||||
Distribution feeClass A |
|
89,641 |
|
683,808 |
|
17,928 |
|
791,377 |
(1) | ||||
Distribution feeClass B |
|
14,859 |
|
59,029 |
|
|
|
73,888 |
| ||||
Distribution feeClass C |
|
48,456 |
|
189,363 |
|
|
|
237,819 |
| ||||
Distribution feeClass F |
|
|
|
1,194 |
|
(1,194 |
) |
|
| ||||
Distribution feeClass X |
|
|
|
2,104 |
|
(2,104 |
) |
|
| ||||
Transfer agents fees and expenses (A) |
|
161,000 |
|
767,000 |
|
(3,000 |
) |
925,000 |
| ||||
Custodians fees and expenses |
|
211,000 |
|
259,000 |
|
(150,000 |
) |
320,000 |
| ||||
Reports to shareholders |
|
37,000 |
|
107,000 |
|
(24,000 |
) |
120,000 |
| ||||
Registration fees |
|
52,000 |
|
62,000 |
|
(35,000 |
) |
79,000 |
| ||||
Audit fee |
|
29,000 |
|
35,000 |
|
(29,000 |
) |
35,000 |
| ||||
Legal fees and expenses |
|
19,000 |
|
21,000 |
|
(18,000 |
) |
22,000 |
| ||||
Directors/Trustees fees |
|
13,000 |
|
17,000 |
|
(8,000 |
) |
22,000 |
| ||||
Interest |
|
111 |
|
3,918 |
|
|
|
4,029 |
| ||||
Commitment |
|
|
|
|
|
|
|
|
| ||||
Insurance |
|
1,800 |
|
4,000 |
|
(300 |
) |
5,500 |
| ||||
Miscellaneous |
|
32,515 |
|
76,480 |
|
(28,995 |
) |
80,000 |
| ||||
Net expenses |
|
1,652,772 |
|
4,956,081 |
|
(517,490 |
) |
6,091,363 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net investment income |
|
855,533 |
|
5,856,898 |
|
517,490 |
|
7,229,921 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Realized And Unrealized Gain (Loss) On Investments |
|
|
|
|
|
|
|
|
| ||||
Net realized gain (loss) on: |
|
|
|
|
|
|
|
|
| ||||
Investment transactions |
|
14,267,194 |
|
42,313,757 |
|
|
|
56,580,951 |
| ||||
Foreign currency transactions |
|
182,807 |
|
359,755 |
|
|
|
542,562 |
| ||||
Financial futures transactions |
|
|
|
(288,126 |
) |
|
|
(288,126 |
) | ||||
|
|
14,450,001 |
|
42,385,386 |
|
|
|
56,835,387 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net change in unrealized appreciation/depreciation on: |
|
|
|
|
|
|
|
|
| ||||
Investments |
|
(4,961,299 |
) |
(13,365,344 |
) |
|
|
(18,326,643 |
) | ||||
Foreign currencies |
|
(203,444 |
) |
7,315 |
|
|
|
(196,129 |
) | ||||
Financial futures contracts |
|
|
|
(11,672 |
) |
|
|
(11,672 |
) | ||||
|
|
(5,164,743 |
) |
(13,369,701 |
) |
|
|
(18,534,444 |
) | ||||
Net gain (loss) on investments |
|
9,285,258 |
|
29,015,685 |
|
|
|
38,300,943 |
| ||||
Net Increase In Net Assets Resulting From Operations |
|
$ |
10,140,791 |
|
$ |
34,872,583 |
|
$ |
517,490 |
|
$ |
45,530,864 |
|
|
|
|
|
|
|
|
|
|
| ||||
(A) Affiliated transfer agents fees and expenses |
|
$ |
96,400 |
|
$ |
286,400 |
|
$ |
|
|
$ |
382,800 |
|
(1) Prudential International Equity Funds distribution and service fee for Class A shares is .30% of the average daily net assets.
Notes to Pro Forma Financial Statements for the Reorganization (unaudited)
1. Basis of CombinationThe Pro Forma Statement of Assets and Liabilities, including the Pro Forma Portfolio of Investments at April 30, 2014 and the related Pro Forma Statement of Operations (Pro Forma Statements) for the period ended April 30, 2014, reflect the accounts of Prudential International Equity Fund (the Acquiring fund) and Prudential International Value Fund (the Target fund), each a Fund.
The Pro Forma Statements give effect to the proposed transfer of all assets and liabilities of the Target fund in exchange for shares of the Acquiring fund. The Pro Forma Statements should be read in conjunction with the historical financial statements of each Fund included in their respective Statement of Additional Information. As of April 30, 2014, all of the securities held by the Target fund would comply with the compliance guidelines and restrictions of the Acquiring fund.
2. Shares of Common StockThe pro forma net asset value per share assumes the issuance of additional Class A, B, C, and Z shares of the Acquiring fund, which would have been issued on April 30, 2014 in connection with the proposed reorganization. Shareholders of the Target fund would become shareholders of the Acquiring fund, receiving shares of the Acquiring fund equal to the value of their holdings in the Target fund. The amount of additional shares assumed to be issued has been calculated based on the April 30, 2014 net assets of the Target fund and the Acquiring fund, the net asset value per share are as follows:
Prudential International Equity Fund
|
|
|
|
Net Assets of Target |
|
Prudential International |
| ||
Additional Shares Issued |
|
|
|
Fund as of 4/30/2014 |
|
Equity Fund Per Share |
| ||
Class A |
|
4,836,645 |
|
$ |
234,298,479 |
|
$ |
7.55 |
|
Class B |
|
199,704 |
|
$ |
6,029,642 |
|
$ |
7.26 |
|
Class C |
|
676,681 |
|
$ |
19,521,894 |
|
$ |
7.26 |
|
Class Z |
|
2,173,274 |
|
$ |
47,505,240 |
|
$ |
7.60 |
|
3. Pro Forma OperationsThe Pro Forma Statement of Operations assumes similar rates of gross investment income for the investments of each Fund. Accordingly, the combined gross investment income is equal to the sum of each Funds gross investment income. Certain expenses have been adjusted to reflect the expected expenses of the combined entity. The pro forma investment management fees and plan of distribution fees of the combined Fund are based on the fee schedule in effect for the Acquiring fund at the combined level of average net assets for the twelve months ended April 30, 2014. The Pro Forma Statement of Operations does not include the effect of any realized gains or losses, or transaction fees incurred in connection with the realignment of the portfolio.
4. Security ValuationThe Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (NYSE) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the Board) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (PI or Manager). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committees actions is subject to the Boards review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
Common stocks, exchange-traded funds, and derivative instruments that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy except for exchange-traded and cleared swaps which are classified as Level 2 in the fair value hierarchy, as the prices marked at the official settle are not public.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and asked prices, or at the last bid price in the absence of an asked price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable and considered to be significant to the valuation.
Common stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable and considered to be significant to the valuation. Securities not valued using such model prices are valued in accordance with exchange-traded common stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that significant unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuers 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 securitys most recent closing price and from the price used by other mutual funds to calculate their net asset values.
The Funds valuation policies are substantially identical and there are no differences in the terms of how each Fund values its portfolio securities.
5. EstimatesThe preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
6. TaxesFor federal income tax purposes, each Fund is treated as a separate taxpaying entity. It is the policy of each Fund to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of their taxable net investment income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The Registrants Bylaws provide for indemnification of directors and officers to the fullest extent required or permitted by law. The Bylaws also permit the Registrant to indemnify employees and agents to the extent authorized by its Board, charter, or Bylaws and as permitted by law. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful, However, a corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. As permitted by Section 17(i) of the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to Section 10 of the Distribution Agreements (Exhibit (e) to the Registration Statement) the Distributors of the Registrant may be indemnified against liabilities which they may incur, except liabilities arising from bad faith, gross negligence, willful misfeasance or reckless disregard of duties.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (Securities Act), may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission (Commission) such indemnification is against public policy as expressed in the 1940 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in connection with the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1940 Act and will be governed by the final adjudication of such issue.
The Registrant has purchased an insurance policy insuring its officers and directors against liabilities, and certain costs of defending claims against such officers and directors, to the extent such officers and directors are not found to have committed conduct constituting willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. The insurance policy also insures the Registrant against the cost of indemnification payments to officers and directors under certain circumstances.
The Management Agreements and the Subadvisory Agreements for the Registrant limit the liability of the Manager and Subadvisers to liabilities arising from willful misfeasance, bad faith or gross negligence in the performance of their respective duties or from reckless disregard by them of their respective obligations and duties under the agreements.
The Registrant hereby undertakes that it will apply the indemnification provisions of its By-Laws and each Distribution Agreement in a manner consistent with Release No. 11330 of the Commission under the 1940 Act so long as the interpretation of Section 17(h) and 17(i) of such Act remains in effect and is consistently applied.
ITEM 16. EXHIBITS.
(1)(a) Restated Articles of Incorporation. Incorporated by reference to Exhibit 1 to Post-Effective Amendment No. 17 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 3, 1995.
(b) Articles Supplementary dated December 27, 1995. Incorporated by reference to Exhibit (a)(ii) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(c) Articles Supplementary dated June 20, 1996. Incorporated by reference to Exhibit 1(b) to Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 24, 1996.
(d) Amendment to Articles of Incorporation. Incorporated by reference to Exhibit 1(c) to Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 24, 1996.
(e) Articles Supplementary dated December 2, 1999. Incorporated by reference to Exhibit (a)(v) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(f) Articles of Amendment dated December 22, 1999. Incorporated by reference to Exhibit (a)(vi) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(g) Articles Supplementary as filed May 29, 2001. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 34 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 30, 2002.
(h) Articles of Amendment as filed June 11, 2003. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 35 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on October 23, 2003.
(i) Articles Supplementary as filed July 29, 2003. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 35 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on October 23, 2003.
(j) Articles of Amendment dated December 8, 2003. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 37 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 29, 2004.
(k) Articles Supplementary creating Class F, Class L, Class M, Class X and New Class X shares. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A (File No.2-89725) filed via EDGAR on December 29, 2006.
(l) Articles Supplementary to create Jennison Global Infrastructure Fund dated August 28, 2008. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 52 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 31, 2008.
(m) Articles Supplementary to create Prudential Emerging Markets Debt Local Currency Fund dated December, 2010. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(n) Articles Supplementary to create Prudential Jennison Global Opportunities Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 63 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 12, 2012.
(o) Articles Supplementary to create Prudential Jennison International Opportunities Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 66 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 1, 2012.
(p) Articles Supplementary dated June 7, 2012. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 68 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 31, 2012.
(q) Articles Supplementary dated August 28, 2013 to create Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(r) Articles Supplementary dated July 16, 2014 to create Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment.
(2) By-Laws of the Registrant, Amended and Restated as of November 16, 2004. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 38 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 10, 2004.
(3) None
(4) Form of Plan of Reorganization for the reorganization on behalf of Prudential International Value Fund and Prudential International Equity Fund, each a series of Prudential World Fund, Inc. Filed herewith as Exhibit A to the combined Prospectus and Proxy Statement contained within this Registration Statement on Form N-14.
(5)(a) Specimen Certificate for shares of Common Stock of the Registrant for Class A Shares. Incorporated by reference to Exhibit 4(a) to Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 7, 1998.
(b) Specimen Certificate for shares of Common Stock of the Registrant for Class B Shares. Incorporated by reference to Exhibit 4(b) to Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 7, 1998.
(c) Specimen Certificate for shares of Common Stock of the Registrant for Class C Shares. Incorporated by reference to Exhibit 4(c) to Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 7, 1998.
(d) Specimen Certificate for shares of Common Stock of the Registrant for Class Z Shares. Incorporated by reference to Exhibit 4(d) to Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 7, 1998.
(e) Instruments defining rights of shareholders. Incorporated by reference to Exhibit 4(e) to Post-Effective Amendment No. 23 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 7, 1998.
(6)(a) Amended and Restated Management Agreement between Registrant and Prudential Investments Fund Management LLC with respect to the International Value Series of the Registrant dated March 28, 2001. Incorporated by reference to Exhibit (d)(3) to Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 28, 2001.
(b) Amended and Restated Management Agreement between Registrant and Prudential Investments Fund Management LLC with respect to the Jennison International Growth Series of the Registrant dated March 28, 2001. Incorporated by reference to Exhibit (d)(5) to Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 28, 2001.
(c) Form of Management Agreement between Registrant and Prudential Investments LLC (PI) with respect to Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(d) Management Fee Waiver and/or Reimbursement for Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(e) Management Agreement between Registrant and Prudential Investments LLC (PI) with respect to the Prudential Jennison Global Opportunities Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 63 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 12, 2012.
(f) Management Fee Waiver and/or Expense Reimbursement for Prudential Jennison Global Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(g) Management Agreement between Registrant and Prudential Investments LLC (PI) with respect to the Prudential Jennison International Opportunities Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 66 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 1, 2012.
(h) Management Fee Waiver and/or Expense Reimbursement for Prudential Jennison International Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(i) Management Agreement between Registrant and Prudential Investments LLC (PI) with respect to the Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(j) Management Fee Waiver and/or Expense Reimbursement for Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(k) Subadvisory Agreement between Prudential Investment Management, Inc. (PIM) and PI with respect to Dryden International Equity Fund (now known as Prudential International Equity Fund), a Series of the Registrant dated December 3, 2003. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 37 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 29, 2004.
(l) Amendment to Subadvisory Agreement between PI and PIM with respect to Prudential International Equity Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 38 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 10, 2004.
(m) Subadvisory Agreement between PI and LSV Asset Management with respect to the International Value Series (now known as Prudential International Value Fund) of the Registrant. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 40 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 24, 2005.
(n) Subadvisory Agreement between PI and Thornburg Investment Management, Inc. with respect to the International Value Series (now known as Prudential International Value Fund) of the Registrant. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 40 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 24, 2005.
(o) Form of Subadvisory Agreement between PI and PIM with respect to Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(p) Subadvisory Agreement between PI and Jennison Associates LLC with respect to the Prudential Jennison Global Opportunities Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 63 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 12, 2012.
(q) Subadvisory Agreement between PI and Jennison Associates LLC with respect to the Prudential Jennison International Opportunities Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 66 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 1, 2012.
(r) Subadvisory Agreement between PI and Jennison Associates LLC with respect to the Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(s) Management Agreement between Registrant and Prudential Investments LLC (PI) with respect to the Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(t) Management Fee Waiver and/or Expense Reimbursement for Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(u) Subadvisory Agreement between PI and Jennison Associates LLC with respect to the Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(7)(a) Amended and Restated Distribution Agreement between the Registrant and Prudential Investment Management Services LLC dated September 16, 2010. Incorporated by reference to Prudential Jennison Small Company Fund, Inc. Post-Effective Amendment No. 50 to the Registration Statement on Form N-1A (File No. 2-68723) filed via EDGAR on September 16, 2010.
(b) Amended Exhibit A for Distribution Agreement dated September 16, 2010. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 65 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 22, 2012.
(c) Form of Dealer Agreement. Incorporated by reference to Exhibit (e)(ii) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(d) Form of Amended and Restated Distribution Agreement between the Registrant and American Skandia Marketing, Inc. with respect to DIEF. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 29, 2006.
(8) Not applicable.
(9)(a) Custodian Agreement between the Registrant and The Bank of New York (BNY). Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 41 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 30, 2005.
(b) Amendment dated June 6, 2005 to Custodian Agreement between the Registrant and BNY. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A (File No. 333-66895) filed on December 30, 2005.
(c) Amendment dated June 30, 2009 to Custodian Agreement between the Registrant and BNY. Incorporated by reference to the Dryden Municipal Bond Fund Post-Effective Amendment No. 31 to the Registration Statement on Form N-1A filed via EDGAR on June 30, 2009 (File No. 33-10649).
(d) Amendment dated December 21, 2010 to Custodian Agreement between the Registrant and BNY dated June 6, 2005. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(e) Form of Custodian Agreement dated July 1, 2005 between the Registrant and PFPC Trust Company (PFPC). Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 41 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 30, 2005.
(f) Amendment dated June 5, 2012 to Custodian Agreement between the Registrant and BNY dated November 7, 2002. . Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 66 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 1, 2012.
(g) Amendment dated August 12, 2013 to Custodian Agreement between the Registrant and BNY dated November 7, 2002. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(10)(a) Distribution and Service Plan for Class A shares of International Stock Series (now known as Prudential International Value Fund). Incorporated by reference to Exhibit 99.m (xii) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on November 2, 1998.
(b) Distribution and Service Plan for Class B shares of Prudential International Value Fund. Incorporated by reference to Exhibit 99.m (xiii) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on November 2, 1998.
(c) Distribution and Service Plan for Class C shares of Prudential International Value Fund. Incorporated by reference to Exhibit 99.m (xiv) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on November 2, 1998.
(d) Distribution and Service Plan for Class A shares of Prudential International Value Fund. Incorporated by reference to Exhibit (m)(xv) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(e) Distribution and Service Plan for Class B shares of Prudential International Equity Fund. Incorporated by reference to Exhibit (m)(xvi) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(f) Distribution and Service Plan for Class C shares of Prudential International Equity Fund. Incorporated by reference to Exhibit (m)(xvii) to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on February 2, 2000.
(g) Distribution and Service Plan for Class F shares of Prudential International Equity Fund. Incorporated by reference to Exhibit (10)(F) to the N-14 Registration Statement.
(h) Distribution and Service Plan for New Class X shares of Prudential International Equity Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 29, 2006.
(i) Distribution and Service Plan for Class A shares of Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(j) Distribution and Service Plan for Class C shares of Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on January 11, 2011.
(k) 12b-1 Fee Waiver for Class A shares of Prudential International Value Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(l) 12b-1 Fee Waiver for Class A shares of Prudential Emerging Markets Debt Local Currency Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(m) Distribution and Service Plan for Class A shares of Prudential Jennison Global Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 61 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGR on December 30, 2011.
(n) Distribution and Service Plan for Class C shares of Prudential Jennison Global Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 61 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGR on December 30, 2011.
(o) 12b-1 Fee Waiver for Class A shares of Prudential Jennison Global Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(p) Distribution and Service Plan for Class A shares of Prudential Jennison International Opportunities Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 65 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 22, 2012.
(q) Distribution and Service Plan for Class C shares of Prudential Jennison International Opportunities Fund. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 65 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on March 22, 2012.
(r) 12b-1 Fee Waiver for Class A shares of Prudential Jennison International Opportunities Fund. Incorporated by reference to Post-Effective Amendment No. 75 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 27, 2013.
(s) Distribution and Service Plan for Class A shares of Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(t) Distribution and Service Plan for Class C shares of Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(u) 12b-1 Fee Waiver for each share class of Prudential Jennison Global Infrastructure Fund. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 74 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on September 23, 2013.
(v) Distribution and Service Plan for Class A shares of Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(w) Distribution and Service Plan for Class C shares of Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(x) 12b-1 Fee Waiver for Class A shares of Prudential Jennison Emerging Markets Equity Fund. To be filed by subsequent amendment to the Registration Statement on Form N-1A (File No. 2-89725).
(11) Opinion and consent of Foley & Lardner LLP as to legality of securities. Filed herewith.
(12) Form of Opinion and consent of Shearman & Sterling LLP supporting tax matters and consequences to shareholders. Filed herewith.
(13)(a) Amended and Restated Transfer Agency and Service Agreement between the Registrant and Prudential Mutual Fund Services, Inc. (PMFS), dated May 29, 2007. Incorporated by reference to the Dryden Municipal Bond Fund Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A filed via EDGAR on June 29, 2007 (File No. 33-10649).
(b) Amendment dated September 2, 2008 to Amended and Restated Transfer Agency and Service Agreement dated May 29, 2007. Incorporated by reference to the Target Portfolio Trust Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A as filed with the Commission on January 30, 2009 (File No. 33-50476).
(c) Amendment dated December 21, 2010 to Amended and Restated Transfer Agency and Service Agreement dated May 29, 2007. Incorporated by reference to the Prudential Investment Portfolios 3 Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A filed via EDGAR on December 30, 2010 (File No. 333-95849).
(d) Amendment dated December 30, 2011 to Amended and Restated Transfer Agency and Service Agreement dated May 29, 2007. Incorporated by reference to corresponding Exhibit to Post-Effective Amendment No. 61 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on December 30, 2011.
(e) Amendment dated June 5, 2012 to Amended and Restated Transfer Agency and Service Agreement dated May 29, 2007. Incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 66 to the Registration Statement on Form N-1A (File No. 2-89725) filed via EDGAR on June 1, 2012.
(14) Consent of Independent Registered Public Accounting Firm, KPMG LLP, of Prudential World Fund, Inc. Filed herewith.
(15) Not applicable.
(16) Power of attorney. Filed herewith.
(17) Form of proxy card for shareholders of Prudential International Value Fund. Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of prospectus which is part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(b) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
(c) The undersigned Registrant undertakes to file, by post-effective amendment, a copy of the opinion of counsel as to certain tax matters, within a reasonable time after receipt of such opinion.
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been signed on behalf of the registrant, in the City of Newark, State of New Jersey on the 18th day of August, 2014.
PRUDENTIAL WORLD FUND, INC.
By: * Stuart S. Parker, President
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
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*Ellen S. Alberding |
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Director |
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*Kevin J. Bannon |
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*Scott E. Benjamin |
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*Linda W. Bynoe |
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*Keith Hartstein |
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*Michael S. Hyland |
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*Douglas H. McCorkindale |
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*Stephen P. Munn |
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* Stuart S. Parker |
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President and Director, Principal Executive Officer |
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*James P. Quinn |
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*Richard A Redeker |
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*Robin B. Smith |
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*Stephen G. Stoneburn |
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Director |
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* M. Sadiq Peshimam |
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Treasurer and Principal Financial and Accounting Officer |
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/s/ Amanda S. Ryan |
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Attorney-in-Fact |
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August 18, 2014 |
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Amanda S. Ryan |
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PRUDENTIAL WORLD FUND, INC.
REGISTRATION STATEMENT ON FORM N-14
EXHIBIT INDEX
Exhibit No. |
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Description |
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(4) |
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Form of Plan of Reorganization for the reorganization on behalf of Prudential International Value Fund and Prudential International Equity Fund, each a series of Prudential World Fund, Inc. Filed herewith as Exhibit A to the combined Prospectus and Proxy Statement contained within this Registration Statement on Form N-14. |
(11) |
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Opinion and consent of Foley & Lardner LLP, counsel to the Registrant. |
(12) |
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Form of Opinion & Consent of Shearman & Sterling LLP, special tax counsel to the Registrant. |
(14) |
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Consent of KPMG LLP, independent registered public accounting firm, for the Registrant. |
(16) |
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Power of attorney. |
(17) |
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Form of proxy card. |
Exhibit 99.(11)
August 18, 2014
PRUDENTIAL WORLD FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
Re: Registration Statement on Form N-14
Ladies and Gentlemen:
We have acted as Maryland counsel to Prudential World Fund, Inc., a Maryland corporation (the Company), in connection with the registration under the Securities Act of 1933, as amended (the Securities Act), pursuant to a Registration Statement on Form N-14 (the Registration Statement) as filed with the Securities and Exchange Commission (the Commission), including the preliminary proxy statement-prospectus included therein (the Prospectus), for the offering by the Company of shares (the Shares), $0.01 par value per share, of common stock (Common Stock), of Prudential International Equity Fund, a separate series of shares of stock of the Company (Equity Fund), to be issued pursuant to the terms of the Plan of Reorganization, in the form attached to the Prospectus as an Exhibit (the Plan), by and between the Company, on behalf of Prudential International Value Fund, a separate series of shares of stock of the Company (Value Fund), and the Company, on behalf of Equity Fund. This opinion is being provided at your request in connection with the filing of the Registration Statement.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the Documents):
1. The charter of the Company (the Charter), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the SDAT);
2. The By-Laws of the Company (the By-Laws), certified as of the date hereof by an Assistant Secretary of the Company;
3. Resolutions of the Board of Directors of the Company, adopted at a meeting held on August 18, 2014, relating to (a) the authorization and approval of the execution, delivery and
performance by the Company of the Plan, (b) the issuance of the Shares pursuant thereto, and (c) the filing of the Registration Statement (collectively, the Board Resolutions), certified as of the date hereof by an Assistant Secretary of the Company;
4. A certificate of the SDAT as to the good standing of the Company, dated as of the date hereof; and
5. A certificate executed by Amanda S. Ryan, an Assistant Secretary of the Company, dated as of the date hereof.
As used herein, the phrase known to us is limited to the actual knowledge, without independent investigation, of the lawyers in this firm who have provided legal services to the Company in connection with the Registration Statement.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such partys obligations (including the Companys) set forth therein are legal, valid and binding.
4. All Documents submitted to us as originals are authentic. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All statements and information contained in the Documents are true and complete. There has been no oral or written modification or amendment to the Documents, or waiver of any provision of the Documents, by action or omission of the parties or otherwise.
5. The number of Shares to be issued from time to time, plus the number of shares of Equity Fund issued and outstanding immediately prior to the issuance of such Shares, will not exceed the number of shares of Equity Fund then authorized to be issued under the Charter.
6. The Company does not intend to issue certificates representing the Shares. The Company will send in writing to each stockholder the information required by the Charter and
the By-Laws and the information as contemplated by Section 2-210(c) of the Maryland General Corporation Law for any Shares to be issued, on request by a stockholder.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that, upon issuance and delivery of the Shares as contemplated by the Board Resolutions, the Shares will be duly authorized, validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the substantive laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with the securities (or blue sky) laws of the State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act.
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Very truly yours, |
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FOLEY & LARDNER LLP |
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/Foley & Lardner LLP/ |
Exhibit 99.(12)
[LETTERHEAD OF SHEARMAN & STERLING LLP]
[ ], 2014
Prudential International Value Fund
a series of Prudential World Fund, Inc.
Prudential International Equity Fund
a series of Prudential World Fund, Inc.
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Ladies and Gentlemen:
We are acting as special tax counsel to Prudential World Fund, Inc. in connection with the proposed transfer of all of the assets of the Prudential International Value Fund, a series of Prudential World Fund, Inc. (the Acquired Fund) to Prudential International Equity Fund, a series of Prudential World Fund, Inc. (the Acquiring Fund), in exchange for shares of the Acquiring Fund and the assumption by the Acquiring Fund of the Acquired Funds liabilities, if any, pursuant to the proposed Plan of Reorganization, filed as an exhibit to the Prospectus (as defined below), by Prudential World Fund, Inc., on behalf of the Acquiring Fund, and Prudential World Fund, Inc., on behalf the Acquired Fund (the Plan). The transactions contemplated by the Plan are referred to herein as the Reorganization. All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. Unless otherwise specifically indicated, all Section references are to the Internal Revenue Code of 1986, as amended and currently in effect (the Code). In connection with the filing by Prudential World Fund, Inc., on behalf of the Acquired Fund and the Acquiring Fund, of the Registration Statement on Form N-14 (the Registration Statement), you have asked for our opinion regarding certain United States federal income tax consequences of the Reorganization.
We have examined the Registration Statement relating to, among other things, the shares of the Acquiring Fund to be offered in exchange for the assets of the Acquired Fund, and containing the Prospectus and Proxy Statement relating to the Reorganization (the Prospectus), filed with the Securities and Exchange Commission (the Commission) on August [ ], 2014, pursuant to the provisions of the Securities Act of 1933, as amended (the Securities Act), and the rules and regulations of the Commission thereunder. In addition, in connection with rendering the opinion expressed herein, we have examined originals or copies of such other documents, records and instruments as we have deemed necessary or appropriate for the purpose of rendering this opinion, including the form of the Plan attached as an exhibit to the Prospectus.
In our examination of the foregoing documents, we have assumed the genuineness of all signatures, the authority of each signatory, the due execution and delivery of all documents by all parties, the authenticity of all agreements, documents, certificates and instruments submitted to us as originals, the conformity of the Plan as executed and delivered by the parties with the form of the Plan attached as an exhibit to the Prospectus, and the conformity with originals of all agreements, documents, certificates and instruments submitted to us as copies.
In connection with rendering our opinion, we have further assumed that the transactions contemplated by the Plan will be consummated in accordance therewith and as described in the Prospectus and that the information in the Prospectus is true, correct and complete in all material respects. We have relied on the representations made on behalf of the Acquiring Fund and the Acquired Fund in an Officers Certificate, dated as of the date hereof, and we have assumed that such representations are, and will continue to be, true, correct and complete in all material respects.
Based upon the foregoing, in reliance thereon and subject thereto, and based upon the Code, the Treasury regulations promulgated thereunder, judicial decisions, revenue rulings and revenue procedures of the Internal Revenue Service (the IRS), and other administrative pronouncements, all as in effect on the date hereof, we are of the opinion that the Reorganization will constitute a reorganization within the meaning of Section 368(a), and that:
1. Each of the Acquiring Fund and the Acquired Fund will be a party to a reorganization within the meaning of Section 368(b);
2. In accordance with Sections 357 and 361, no gain or loss will be recognized by the Acquired Fund as a result of the transfer of the assets of the Acquired Fund solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund, if any, or upon the distribution (whether actual or constructive) of the Acquiring Fund Shares to the Acquired Fund shareholders, as provided for in the Plan;
3. In accordance with Section 1032, no gain or loss will be recognized by the Acquiring Fund upon the receipt of the assets of the Acquired Fund in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund, if any, as provided for in the Plan;
4. In accordance with Section 362(b), the tax basis of the assets of the Acquired Fund in the hands of the Acquiring Fund will be the same as the tax basis of such assets in the hands of the Acquired Fund immediately prior to the consummation of the Reorganization;
5. In accordance with Section 1223, the Acquiring Funds holding period with respect to the assets of the Acquired Fund acquired by it will include the period for which such assets were held by the Acquired Fund;
6. In accordance with Section 354(a)(1), no gain or loss will be recognized by the shareholders of the Acquired Fund upon the receipt (whether actual or constructive) of the Acquiring Fund Shares in exchange for their shares of the Acquired Fund;
7. In accordance with Section 358, immediately after the consummation of the Reorganization, the tax basis of the Acquiring Fund Shares received (whether actually or constructively) by the shareholders of the Acquired Fund in the Reorganization will be equal, in the aggregate, to the tax basis of the shares of the Acquired Fund surrendered in exchange therefor;
8. In accordance with Section 1223, a shareholders holding period for the Acquiring Fund Shares will be determined by including the period for which the shareholder held the shares of the Acquired Fund exchanged therefor, provided that the Acquired Fund shares were held as a capital asset for United States federal income tax purposes at the time of the exchange; and
9. The taxable year of the Acquired Fund will end on the effective date of the Reorganization, and, pursuant to Section 381(a) and the regulations thereunder, the Acquiring Fund will succeed to and take into account, subject to applicable limitations, certain tax attributes of the Acquired Fund, such as earnings and profits, capital loss carryovers and method of accounting.
No opinion is expressed as to any other matter, including the accuracy of the representations or the reasonableness of the assumptions relied upon by us in rendering the opinion set forth above. Our opinion is based on current United States federal income tax law and administrative practice and we do not undertake to advise you as to any future changes in such law or practice that may affect our opinion unless we are specifically retained to do so. Our opinion is not binding upon the IRS or a court and will not preclude the IRS or a court from adopting a contrary conclusion.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name and to any reference to our firm in the Registration Statement or in the Prospectus constituting a part thereof. In giving such consent, we do not hereby admit that we are the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours,
RJB/DK
MBS
Exhibit 99.(14)
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Prudential World Fund, Inc.:
We consent to the use of our reports dated December 20, 2013, incorporated by reference herein and to the references to our firm under the heading Independent Registered Public Accounting Firm in the proxy statement/prospectus.
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New York, New York |
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August 18, 2014 |
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Exhibit-99.(16)
The undersigned Directors and Officers of Prudential World Fund, Inc. hereby constitute, appoint and authorize each of Claudia DiGiacomo, Kathleen DeNicholas, Deborah A. Docs, Andrew R. French, Raymond A. OHara, Amanda Ryan, and Jonathan D. Shain, or any of them, as attorney-in-fact, to sign, execute and deliver on his or her behalf, individually and in each capacity stated below, any Registration Statement on Form N-14 and any amendment thereto (including pre and post-effective amendments) relating to the reorganization and to file the same, with all exhibits thereto, with the Securities and Exchange Commission.
Signature |
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/s/ Ellen S. Alberding |
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Director |
Ellen S. Alberding |
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/s/ Kevin J. Bannon |
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Director |
Kevin J. Bannon |
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/s/ Scott E. Benjamin |
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Director |
Scott E. Benjamin |
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/s/ Linda W. Bynoe |
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Director |
Linda W. Bynoe |
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/s/ Keith Hartstein |
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Director |
Keith Hartstein |
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/s/ Michael S. Hyland |
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Director |
Michael S. Hyland |
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/s/ Douglas H. McCorkindale |
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Director |
Douglas H. McCorkindale |
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/s/ Stephen P. Munn |
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Director |
Stephen P. Munn |
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/s/ Stuart S. Parker |
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Director and President (Principal Executive Officer) |
Stuart S. Parker |
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/s/ James E. Quinn |
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Director |
James E. Quinn |
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/s/ Richard A. Redeker |
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Director |
Richard A. Redeker |
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/s/ Robin B. Smith |
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Director |
Robin B. Smith |
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/s/ Stephen G. Stoneburn |
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Director |
Stephen G. Stoneburn |
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/s/ M. Sadiq Peshimam |
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Treasurer (Principal Financial and Accounting Officer) |
M. Sadiq Peshimam |
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Dated: August 18, 2014 |
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Exhibit 99.(17)
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PRUDENTIAL WORLD FUND, INC. |
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Prudential International Value Fund |
Gateway Center Three, 4th Floor, 100 Mulberry Street Newark, New Jersey 07102-4077
SPECIAL MEETING OF SHAREHOLDERS December 10, 2014
PROXY CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PRUDENTIAL WORLD FUND, INC. (THE WORLD FUND) WITH RESPECT TO PRUDENTIAL INTERNATIONAL VALUE FUND (THE FUND), A SERIES OF THE WORLD FUND. The undersigned hereby appoints Raymond OHara, Claudia DiGiacomo, Amanda Ryan and Jonathan D. Shain as Proxies, each with the power of substitution, and hereby authorizes each of them to represent and to vote, as designated on the reverse side, all of the shares of beneficial interest of the Fund held of record by the undersigned on September 12, 2014, at the Meeting to be held on December 10, 2014 or any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. PLEASE REFER TO THE PROXY STATEMENT DATED SEPTEMBER [17], 2014 FOR DISCUSSION OF THE PROPOSALS. THE PROXY STATEMENT IS AVAILABLE ON THE FUNDS WEBSITE AT WWW.PRUDENTIALFUNDS.COM/FUNDCHANGES.
IF VOTING BY MAIL, PLEASE MARK, SIGN AND DATE THIS PROXY CARD WHERE INDICATED AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Meeting or any adjournment thereof.
This voting card is valid only when signed and dated. If you simply sign and date the proxy card but give no voting instructions, your shares will be voted in favor of the Proposal and in accordance with the views of management upon any unexpected matters that come before the Meeting or adjournment of the Meeting.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
TO VOTE BY INTERNET
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Website www.proxyvote.com
3) Follow the instructions provided on website.
TO VOTE BY TELEPHONE
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Call 1-800-690-6903
3) Follow the instructions.
TO VOTE BY MAIL
1) Read the Proxy Statement.
2) Check the appropriate boxes on the Proxy Card below.
3) Sign and date the Proxy Card.
4) Return the Proxy Card in the envelope provided.
If you vote by Telephone or Internet, you do not have to mail your proxy.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PRUDENTIAL INTERNATIONAL VALUE FUND
Please fill in box as shown using black or blue ink or number 2 pencil. x
PLEASE DO NOT USE FINE POINT PENS.
The Board of Directors of PRUDENTIAL WORLD FUND, INC. recommends voting FOR the Proposals.
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FOR |
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AGAINST |
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ABSTAIN |
Proposal 1 |
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To approve a Plan of Reorganization whereby all of the assets and liabilities of Prudential International Value Fund, a series of Prudential World Fund, Inc., will be transferred to, and assumed by, Prudential International Equity Fund, a series of Prudential World Fund, Inc., in exchange for shares of Prudential International Equity Fund and the cancellation of all of the shares of Prudential International Value Fund, and Prudential International Value Fund will be dissolved. |
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If this proxy card is signed and returned with no choices indicated, the shares will be voted for the proposals.
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Dated: |
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Signature |
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(Sign in the Box) |
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