N-CSRS 1 d709211dncsrs.htm PRUDENTIAL INVESTMENT PORTFOLIOS 8 Prudential Investment Portfolios 8

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:    811-06677
Exact name of registrant as specified in charter:    Prudential Investment Portfolios 8
Address of principal executive offices:    Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102
Name and address of agent for service:    Deborah A. Docs
   Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102
Registrant’s telephone number, including area code:    800-225-1852
Date of fiscal year end:    9/30/2014
Date of reporting period:    3/31/2014

 

 

 


Item 1 – Reports to Stockholders


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PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

 

PRUDENTIAL STOCK INDEX FUND

 

SEMIANNUAL REPORT · MARCH 31, 2014

 

Fund Type

Large-Cap Stock

 

Objective

Provide investment results that correspond to the price and yield performance of the S&P 500 Index

 

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

 

The views expressed in this report and

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

 

The accompanying financial statements as of March 31, 2014, were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Quantitative Management Associates, LLC (QMA) is a wholly owned subsidiary of Prudential Investment Management, Inc. (PIM). QMA and PIM are registered investment advisers and Prudential Financial companies. © 2014 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

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May 15, 2014

 

Dear Shareholder:

 

We hope you find the semiannual report for the Prudential Stock Index Fund informative and useful. The report covers performance for the six-month period that ended March 31, 2014.

 

We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.

 

Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

 

Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.

 

Thank you for choosing the Prudential Investments family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

Prudential Stock Index Fund

 

*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates LLC, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.

 

Prudential Stock Index Fund     1   


Your Fund’s Performance (Unaudited)

 

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

 

Cumulative Total Returns (Without Sales Charges) as of 3/31/14

  

     Six Months     One Year     Five Years     Ten Years  

Class A

     12.21     21.21     154.82     94.99

Class C

     11.87        20.45        147.03        81.61   

Class I

     12.39        21.58        159.34        101.78   

Class Z

     12.36        21.54        158.65        100.55   

S&P 500 Index

     12.49        21.84        160.89        104.43   

Lipper S&P 500 Index Objective Funds Average

     12.19        21.17        153.84        95.24   
        

Average Annual Total Returns (With Sales Charges) as of 3/31/14

  

           One Year     Five Years     Ten Years  

Class A

             17.27     19.78     6.55

Class C

             19.45        19.83        6.15   

Class I

             21.58        21.00        7.27   

Class Z

             21.54        20.93        7.21   

S&P 500 Index

             21.84        21.14        7.41   

Lipper S&P 500 Index Objective Funds Average

             21.17        20.47        6.91   

 

Source: Prudential Investments LLC and Lipper Inc.

 

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

 

   Class A    Class C    Class I    Class Z

Maximum initial sales charge

   3.25% of the public offering price    None    None    None

Contingent Deferred Sales Charge (CDSC) (as a percentage of the lower of original purchase price or sale proceeds)

   1% on sales of $1 million or more made within 12 months of purchase    1% on sales
made within
12 months
of purchase
   None    None

Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)

   .30%    1%    None    None

 

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Benchmark Definitions

 

S&P 500 Index

The S&P 500 Index is an unmanaged index of 500 stocks of large U.S. public companies. It gives a broad look at how stock prices in the United States have performed.

 

Lipper S&P 500 Index Objective Funds Average

The Lipper S&P 500 Index Objective Funds Average (Lipper Average) represents returns based on the average return of all funds in the Lipper S&P 500 Index Objective Funds category for the periods noted. Funds in the Lipper Average are passively managed, limited expense (management fee no higher than 0.50%) funds designed to replicate the performance of the S&P 500 Index on a reinvested basis.

 

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

 

S&P 500 Index as of 3/31/14

 

LOGO

 

* Sector weightings are subject to change.

 

Source: FactSet.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Prudential Investments LLC, its affiliates, and subsidiaries. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Prudential Investments LLC, its affiliates, and subsidiaries. The Prudential Stock Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.

 

The performance cited does not represent the performance of the Prudential Stock Index Fund. Past performance does not guarantee future results. Investors cannot invest directly in an index or average.

 

Prudential Stock Index Fund     3   


Fees and Expenses (Unaudited)

 

 

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

 

The example is based on an investment of $1,000 invested on October 1, 2013, at the beginning of the period, and held through the six-month period ended March 31, 2014. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

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

 

Hypothetical Example for Comparison Purposes

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

 

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

 

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

 

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

 

Prudential Stock
Index Fund
  Beginning Account
Value
October 1, 2013
    Ending Account
Value
March 31, 2014
    Annualized
Expense Ratio
Based on the
Six-Month Period
    Expenses Paid
During  the
Six-Month Period*
 
         
Class A   Actual   $ 1,000.00      $ 1,122.10        0.50   $ 2.65   
    Hypothetical   $ 1,000.00      $ 1,022.44        0.50   $ 2.52   
         
Class C   Actual   $ 1,000.00      $ 1,118.70        1.14   $ 6.02   
    Hypothetical   $ 1,000.00      $ 1,019.25        1.14   $ 5.74   
         
Class I   Actual   $ 1,000.00      $ 1,123.90        0.19   $ 1.01   
    Hypothetical   $ 1,000.00      $ 1,023.98        0.19   $ 0.96   
         
Class Z   Actual   $ 1,000.00      $ 1,123.60        0.25   $ 1.32   
    Hypothetical   $ 1,000.00      $ 1,023.68        0.25   $ 1.26   

* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 182 days in the six-month period ended March 31, 2014, and divided by the 365 days in the Fund's fiscal year ending September 30, 2014 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

 

Prudential Stock Index Fund     5   


Fees and Expenses (continued)

 

 

The Fund’s annual expense ratios for the period ended March 31, 2014, are as follows:

 

Class    Gross Operating Expenses     Net Operating Expenses  

A

     0.72     0.50

C

     1.36        1.14   

I

     0.41        0.19   

Z

     0.47        0.25   

 

Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.

 

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Portfolio of Investments

 

as of March 31, 2014 (Unaudited)

 

Shares      Description    Value (Note 1)  

LONG-TERM INVESTMENTS    97.2%

  

COMMON STOCKS

  

Aerospace & Defense    2.7%

        
34,984     

Boeing Co. (The)

   $ 4,390,142   
17,212     

General Dynamics Corp.(a)

     1,874,731   
40,015     

Honeywell International, Inc.

     3,711,791   
4,700     

L-3 Communications Holdings, Inc.

     555,305   
13,856     

Lockheed Martin Corp.

     2,261,854   
11,148     

Northrop Grumman Corp.

     1,375,440   
7,400     

Precision Castparts Corp.

     1,870,424   
16,344     

Raytheon Co.

     1,614,624   
6,863     

Rockwell Collins, Inc.(a)

     546,775   
12,634     

Textron, Inc.

     496,390   
43,040     

United Technologies Corp.

     5,028,794   
       

 

 

 
          23,726,270   

Air Freight & Logistics    0.7%

        
7,700     

C.H. Robinson Worldwide, Inc.

     403,403   
10,300     

Expeditors International of Washington, Inc.(a)

     408,189   
15,416     

FedEx Corp.

     2,043,545   
36,800     

United Parcel Service, Inc. (Class B Stock)

     3,583,584   
       

 

 

 
          6,438,721   

Airlines    0.3%

        
41,300     

Delta Air Lines, Inc.

     1,431,045   
35,774     

Southwest Airlines Co.

     844,624   
       

 

 

 
          2,275,669   

Auto Components    0.4%

        
12,600     

BorgWarner, Inc.

     774,522   
13,600     

Delphi Automotive PLC (United Kingdom)

     922,896   
13,771     

Goodyear Tire & Rubber Co. (The)

     359,836   
34,856     

Johnson Controls, Inc.

     1,649,386   
       

 

 

 
          3,706,640   

Automobiles    0.7%

        
205,138     

Ford Motor Co.

     3,200,153   
63,700     

General Motors Co.*

     2,192,554   
10,500     

Harley-Davidson, Inc.

     699,405   
       

 

 

 
          6,092,112   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     7   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Banks    6.1%

        
544,595     

Bank of America Corp.

   $ 9,367,034   
34,458     

BB&T Corp.

     1,384,178   
156,015     

Citigroup, Inc.

     7,426,314   
7,561     

Comerica, Inc.

     391,660   
45,373     

Fifth Third Bancorp

     1,041,310   
44,129     

Huntington Bancshares, Inc.(a)

     439,966   
193,293     

JPMorgan Chase & Co.

     11,734,818   
45,935     

KeyCorp

     654,114   
6,500     

M&T Bank Corp.

     788,450   
27,202     

PNC Financial Services Group, Inc.

     2,366,574   
69,574     

Regions Financial Corp.

     772,967   
25,983     

SunTrust Banks, Inc.

     1,033,864   
93,395     

U.S. Bancorp

     4,002,910   
245,516     

Wells Fargo & Co.

     12,211,966   
10,400     

Zions Bancorp.(a)

     322,192   
       

 

 

 
          53,938,317   

Beverages    2.1%

        
8,608     

Beam, Inc.

     717,046   
8,130     

Brown-Forman Corp. (Class B Stock)

     729,180   
194,864     

Coca-Cola Co. (The)

     7,533,442   
12,300     

Coca-Cola Enterprises, Inc.

     587,448   
8,200     

Constellation Brands, Inc. (Class A Stock)*

     696,754   
9,800     

Dr. Pepper Snapple Group, Inc.

     533,708   
8,394     

Molson Coors Brewing Co. (Class B Stock)

     494,071   
6,900     

Monster Beverage Corp.*

     479,205   
78,951     

PepsiCo, Inc.

     6,592,409   
       

 

 

 
          18,363,263   

Biotechnology    2.3%

        
10,500     

Alexion Pharmaceuticals, Inc.*

     1,597,365   
38,646     

Amgen, Inc.

     4,766,598   
12,220     

Biogen Idec, Inc.

     3,737,731   
21,100     

Celgene Corp.*

     2,945,560   
79,200     

Gilead Sciences, Inc.*

     5,612,112   
3,950     

Regeneron Pharmaceuticals, Inc.*

     1,186,106   
12,400     

Vertex Pharmaceuticals, Inc.*

     876,928   
       

 

 

 
          20,722,400   

 

See Notes to Financial Statements.

 

8  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Building Products    0.1%

        
5,033     

Allegion PLC

   $ 262,572   
19,726     

Masco Corp.

     438,114   
       

 

 

 
          700,686   

Capital Markets    2.1%

        
9,971     

Ameriprise Financial, Inc.

     1,097,508   
58,538     

Bank of New York Mellon Corp. (The)

     2,065,806   
6,700     

BlackRock, Inc.

     2,107,016   
58,911     

Charles Schwab Corp. (The)

     1,610,038   
11,720     

E*Trade Financial Corp.*

     269,794   
21,642     

Franklin Resources, Inc.

     1,172,563   
21,400     

Goldman Sachs Group, Inc. (The)

     3,506,390   
22,800     

Invesco Ltd.

     843,600   
6,400     

Legg Mason, Inc.(a)

     313,856   
68,936     

Morgan Stanley

     2,148,735   
11,962     

Northern Trust Corp.

     784,229   
21,862     

State Street Corp.

     1,520,502   
13,100     

T. Rowe Price Group, Inc.

     1,078,785   
       

 

 

 
          18,518,822   

Chemicals    2.5%

        
10,632     

Air Products & Chemicals, Inc.

     1,265,634   
3,800     

Airgas, Inc.

     404,738   
2,900     

CF Industries Holdings, Inc.

     755,856   
61,036     

Dow Chemical Co. (The)

     2,965,739   
46,744     

E.I. du Pont de Nemours & Co.(a)

     3,136,523   
8,386     

Eastman Chemical Co.

     722,957   
13,682     

Ecolab, Inc.

     1,477,519   
5,900     

FMC Corp.

     451,704   
4,575     

International Flavors & Fragrances, Inc.

     437,690   
21,900     

LyondellBasell Industries NV (Class A Stock)

     1,947,786   
26,384     

Monsanto Co.

     3,001,708   
17,100     

Mosaic Co. (The)

     855,000   
7,474     

PPG Industries, Inc.

     1,445,920   
14,558     

Praxair, Inc.

     1,906,661   
4,416     

Sherwin-Williams Co. (The)

     870,526   
5,032     

Sigma-Aldrich Corp.

     469,888   
       

 

 

 
          22,115,849   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     9   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Commercial Services & Supplies    0.4%

        
10,800     

ADT Corp. (The)(a)

   $ 323,460   
5,400     

Cintas Corp.

     321,894   
7,372     

Iron Mountain, Inc.

     203,246   
11,725     

Pitney Bowes, Inc.(a)

     304,733   
12,475     

Republic Services, Inc.

     426,146   
4,500     

Stericycle, Inc.*

     511,290   
24,400     

Tyco International Ltd.

     1,034,560   
21,613     

Waste Management, Inc.

     909,259   
       

 

 

 
          4,034,588   

Communications Equipment    1.7%

        
269,344     

Cisco Systems, Inc.

     6,035,999   
4,300     

F5 Networks, Inc.*

     458,509   
5,700     

Harris Corp.

     417,012   
27,700     

Juniper Networks, Inc.*

     713,552   
12,316     

Motorola Solutions, Inc.

     791,796   
87,300     

QUALCOMM, Inc.

     6,884,478   
       

 

 

 
          15,301,346   

Construction & Engineering    0.2%

        
8,874     

Fluor Corp.

     689,776   
7,400     

Jacobs Engineering Group, Inc.*(a)

     469,900   
10,700     

Quanta Services, Inc.*

     394,830   
       

 

 

 
          1,554,506   

Construction Materials

        
6,500     

Vulcan Materials Co.

     431,925   

Consumer Finance    1.0%

        
47,359     

American Express Co.

     4,263,731   
30,166     

Capital One Financial Corp.

     2,327,609   
24,118     

Discover Financial Services

     1,403,426   
21,292     

SLM Corp.

     521,228   
       

 

 

 
          8,515,994   

Containers & Packaging    0.2%

        
5,668     

Avery Dennison Corp.

     287,198   
8,264     

Ball Corp.

     452,950   
5,310     

Bemis Co., Inc.

     208,364   
9,435     

MeadWestvaco Corp.

     355,134   

 

See Notes to Financial Statements.

 

10  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Containers & Packaging (cont’d.)

        
9,800     

Owens-Illinois, Inc.

   $ 331,534   
9,336     

Sealed Air Corp.

     306,874   
       

 

 

 
          1,942,054   

Distributors    0.1%

        
8,299     

Genuine Parts Co.

     720,768   

Diversified Consumer Services    0.1%

        
200     

Graham Holdings Co.

     140,750   
13,620     

H&R Block, Inc.

     411,188   
       

 

 

 
          551,938   

Diversified Financial Services    1.9%

        
92,000     

Berkshire Hathaway, Inc. (Class B Stock)*

     11,497,240   
16,700     

CME Group, Inc.

     1,235,967   
6,088     

IntercontinentalExchange Group, Inc.

     1,204,389   
13,700     

Leucadia National Corp.

     383,600   
14,600     

McGraw-Hill Financial, Inc.

     1,113,980   
9,376     

Moody’s Corp.

     743,704   
6,400     

NASDAQ OMX Group, Inc. (The)

     236,416   
       

 

 

 
          16,415,296   

Diversified Telecommunication Services    2.4%

        
270,431     

AT&T, Inc.

     9,484,015   
30,708     

CenturyLink, Inc.(a)

     1,008,451   
52,460     

Frontier Communications Corp.

     299,022   
210,733     

Verizon Communications, Inc.

     10,024,569   
27,577     

Windstream Holdings, Inc.

     227,234   
       

 

 

 
          21,043,291   

Electric Utilities    1.7%

        
24,891     

American Electric Power Co., Inc.

     1,260,978   
36,639     

Duke Energy Corp.

     2,609,429   
17,162     

Edison International

     971,541   
9,415     

Entergy Corp.

     629,393   
44,412     

Exelon Corp.

     1,490,467   
22,377     

FirstEnergy Corp.(a)

     761,489   
22,372     

NextEra Energy, Inc.

     2,139,211   
14,400     

Northeast Utilities

     655,200   
11,600     

Pepco Holdings, Inc.(a)

     237,568   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     11   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Electric Utilities (cont’d.)

        
6,000     

Pinnacle West Capital Corp.(a)

   $ 327,960   
32,652     

PPL Corp.

     1,082,087   
43,915     

Southern Co. (The)(a)

     1,929,625   
24,383     

Xcel Energy, Inc.

     740,268   
       

 

 

 
          14,835,216   

Electrical Equipment    0.7%

        
12,000     

AMETEK, Inc.

     617,880   
24,893     

Eaton Corp. PLC

     1,869,962   
36,250     

Emerson Electric Co.

     2,421,500   
7,163     

Rockwell Automation, Inc.

     892,152   
4,700     

Roper Industries, Inc.

     627,497   
       

 

 

 
          6,428,991   

Electronic Equipment, Instruments & Components    0.4%

        
8,600     

Amphenol Corp. (Class A Stock)

     788,190   
69,997     

Corning, Inc.(a)

     1,457,338   
8,400     

FLIR Systems, Inc.

     302,400   
10,400     

Jabil Circuit, Inc.

     187,200   
21,600     

TE Connectivity Ltd. (Switzerland)

     1,300,536   
       

 

 

 
          4,035,664   

Energy Equipment & Services    1.9%

        
22,945     

Baker Hughes, Inc.

     1,491,884   
10,100     

Cameron International Corp.*

     623,877   
3,600     

Diamond Offshore Drilling, Inc.(a)

     175,536   
11,500     

Ensco PLC (Class A Stock)

     606,970   
10,100     

FMC Technologies, Inc.*

     528,129   
42,722     

Halliburton Co.

     2,515,899   
5,800     

Helmerich & Payne, Inc.(a)

     623,848   
14,400     

Nabors Industries Ltd.

     354,960   
22,600     

National Oilwell Varco, Inc.

     1,759,862   
13,500     

Noble Corp PLC(a)

     441,990   
5,110     

Rowan Cos. PLC (Class A Stock)*

     172,105   
67,741     

Schlumberger Ltd.

     6,604,747   
17,000     

Transocean Ltd.(a)

     702,780   
       

 

 

 
          16,602,587   

 

See Notes to Financial Statements.

 

12  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Food & Staples Retailing    2.3%

        
22,408     

Costco Wholesale Corp.

   $ 2,502,526   
61,899     

CVS Caremark Corp.

     4,633,759   
27,434     

Kroger Co. (The)

     1,197,494   
12,700     

Safeway, Inc.

     469,138   
28,780     

Sysco Corp.

     1,039,822   
83,626     

Wal-Mart Stores, Inc.

     6,391,535   
45,078     

Walgreen Co.

     2,976,500   
18,600     

Whole Foods Market, Inc.

     943,206   
       

 

 

 
          20,153,980   

Food Products    1.6%

        
33,459     

Archer-Daniels-Midland Co.

     1,451,786   
9,647     

Campbell Soup Co.(a)

     432,957   
21,543     

ConAgra Foods, Inc.

     668,479   
32,144     

General Mills, Inc.

     1,665,702   
8,016     

Hershey Co. (The)

     836,871   
7,600     

Hormel Foods Corp.

     374,452   
5,600     

J.M. Smucker Co. (The)

     544,544   
13,470     

Kellogg Co.

     844,704   
5,600     

Keurig Green Mountain, Inc.

     591,304   
29,855     

Kraft Foods Group, Inc.

     1,674,866   
7,000     

McCormick & Co., Inc.

     502,180   
10,665     

Mead Johnson Nutrition Co.

     886,688   
88,166     

Mondelez International, Inc. (Class A Stock)

     3,046,135   
13,600     

Tyson Foods, Inc. (Class A Stock)

     598,536   
       

 

 

 
          14,119,204   

Gas Utilities

        
6,430     

AGL Resources, Inc.

     314,813   

Health Care Equipment & Supplies    2.1%

        
78,474     

Abbott Laboratories

     3,022,034   
28,474     

Baxter International, Inc.

     2,095,117   
10,212     

Becton, Dickinson and Co.

     1,195,621   
69,472     

Boston Scientific Corp.*

     939,261   
4,112     

C.R. Bard, Inc.

     608,494   
11,086     

CareFusion Corp.*

     445,879   
23,400     

Covidien PLC

     1,723,644   
8,100     

DENTSPLY International, Inc.

     372,924   
6,000     

Edwards Lifesciences Corp.*(a)

     445,020   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     13   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Health Care Equipment & Supplies (cont’d.)

        
1,800     

Intuitive Surgical, Inc.*

   $ 788,382   
51,758     

Medtronic, Inc.

     3,185,187   
15,064     

St. Jude Medical, Inc.

     985,035   
15,200     

Stryker Corp.

     1,238,344   
5,800     

Varian Medical Systems, Inc.*(a)

     487,142   
8,911     

Zimmer Holdings, Inc.

     842,802   
       

 

 

 
          18,374,886   

Health Care Providers & Services    2.0%

        
18,144     

Aetna, Inc.

     1,360,256   
11,800     

AmerisourceBergen Corp.

     773,962   
17,173     

Cardinal Health, Inc.

     1,201,767   
14,391     

CIGNA Corp.

     1,204,958   
9,200     

DaVita HealthCare Partners, Inc.*

     633,420   
40,870     

Express Scripts Holding Co.*

     3,068,928   
7,610     

Humana, Inc.

     857,799   
4,900     

Laboratory Corp. of America Holdings*(a)

     481,229   
11,476     

McKesson Corp.

     2,026,317   
4,600     

Patterson Cos., Inc.

     192,096   
7,000     

Quest Diagnostics, Inc.(a)

     405,440   
5,443     

Tenet Healthcare Corp.*(a)

     233,015   
50,848     

UnitedHealth Group, Inc.

     4,169,028   
15,100     

WellPoint, Inc.

     1,503,205   
       

 

 

 
          18,111,420   

Health Care Technology    0.1%

        
15,800     

Cerner Corp.*

     888,750   

Hotels, Restaurants & Leisure    1.7%

        
20,700     

Carnival Corp.

     783,702   
1,510     

Chipotle Mexican Grill, Inc.*

     857,756   
6,753     

Darden Restaurants, Inc.(a)

     342,782   
12,300     

International Game Technology(a)

     172,938   
11,870     

Marriott International, Inc. (Class A Stock)(a)

     664,957   
51,630     

McDonald’s Corp.

     5,061,289   
39,000     

Starbucks Corp.

     2,861,820   
10,200     

Starwood Hotels & Resorts Worldwide, Inc.

     811,920   
7,151     

Wyndham Worldwide Corp.

     523,668   
4,200     

Wynn Resorts Ltd.

     933,030   
23,964     

Yum! Brands, Inc.

     1,806,646   
       

 

 

 
          14,820,508   

 

See Notes to Financial Statements.

 

14  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Household Durables    0.4%

        
15,200     

D.R. Horton, Inc.(a)

   $ 329,080   
4,900     

Garmin Ltd.(a)

     270,774   
4,000     

Harman International Industries, Inc.(a)

     425,600   
7,200     

Leggett & Platt, Inc.

     235,008   
8,200     

Lennar Corp. (Class A Stock)(a)

     324,884   
2,500     

Mohawk Industries, Inc.*

     339,950   
15,727     

Newell Rubbermaid, Inc.

     470,237   
17,211     

PulteGroup, Inc.

     330,279   
4,485     

Whirlpool Corp.

     670,328   
       

 

 

 
          3,396,140   

Household Products    1.9%

        
6,232     

Clorox Co. (The)(a)

     548,478   
45,460     

Colgate-Palmolive Co.

     2,948,990   
19,816     

Kimberly-Clark Corp.

     2,184,714   
138,723     

Procter & Gamble Co. (The)

     11,181,074   
       

 

 

 
          16,863,256   

Independent Power and Renewable Electricity Producers    0.1%

        
31,200     

AES Corp. (The)

     445,536   
15,600     

NRG Energy, Inc.

     496,080   
       

 

 

 
          941,616   

Industrial Conglomerates    2.3%

        
32,998     

3M Co.

     4,476,509   
31,000     

Danaher Corp.

     2,325,000   
518,472     

General Electric Co.

     13,423,240   
       

 

 

 
          20,224,749   

Insurance    2.8%

        
17,700     

ACE Ltd.

     1,753,362   
23,900     

Aflac, Inc.

     1,506,656   
23,408     

Allstate Corp. (The)(a)

     1,324,425   
75,501     

American International Group, Inc.

     3,775,805   
15,189     

Aon PLC (United Kingdom)

     1,280,129   
3,900     

Assurant, Inc.

     253,344   
12,768     

Chubb Corp. (The)

     1,140,182   
8,507     

Cincinnati Financial Corp.

     413,951   
28,100     

Genworth Financial, Inc. (Class A Stock)*

     498,213   
23,353     

Hartford Financial Services Group, Inc. (The)

     823,660   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     15   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Insurance (cont’d.)

        
13,251     

Lincoln National Corp.(a)

   $ 671,428   
16,117     

Loews Corp.

     709,954   
27,940     

Marsh & McLennan Cos., Inc.

     1,377,442   
56,900     

MetLife, Inc.

     3,004,320   
12,900     

Principal Financial Group, Inc.

     593,271   
28,116     

Progressive Corp. (The)

     680,970   
22,700     

Prudential Financial, Inc.(b)

     1,921,555   
4,622     

Torchmark Corp.

     363,751   
17,911     

Travelers Cos., Inc. (The)

     1,524,226   
13,326     

Unum Group

     470,541   
14,400     

XL Group PLC (Ireland)

     450,000   
       

 

 

 
          24,537,185   

Internet & Catalog Retail    1.3%

        
19,100     

Amazon.com, Inc.*

     6,427,532   
4,800     

Expedia, Inc.

     348,000   
3,100     

Netflix, Inc.*

     1,091,293   
2,690     

Priceline Group, Inc. (The)*

     3,206,184   
5,000     

TripAdvisor, Inc.*(a)

     452,950   
       

 

 

 
          11,525,959   

Internet Software & Services    3.1%

        
9,100     

Akamai Technologies, Inc.*

     529,711   
59,500     

eBay, Inc.*

     3,286,780   
86,700     

Facebook, Inc. (Class A Stock)*

     5,222,808   
14,500     

Google, Inc. (Class A Stock)*

     16,160,395   
6,100     

VeriSign, Inc.*(a)

     328,851   
47,300     

Yahoo!, Inc.

     1,698,070   
       

 

 

 
          27,226,615   

IT Services    3.5%

        
32,200     

Accenture PLC (Class A Stock)

     2,566,984   
2,340     

Alliance Data Systems Corp.*(a)

     637,533   
24,778     

Automatic Data Processing, Inc.

     1,914,348   
31,800     

Cognizant Technology Solutions Corp. (Class A Stock)*

     1,609,398   
7,751     

Computer Sciences Corp.

     471,416   
14,600     

Fidelity National Information Services, Inc.

     780,370   
13,800     

Fiserv, Inc.*

     782,322   
50,334     

International Business Machines Corp.

     9,688,791   
52,700     

MasterCard, Inc. (Class A Stock)

     3,936,690   

 

See Notes to Financial Statements.

 

16  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

IT Services (cont’d.)

        
17,725     

Paychex, Inc.(a)

   $ 755,085   
8,600     

Teradata Corp.*(a)

     423,034   
9,271     

Total System Services, Inc.

     281,931   
26,180     

Visa, Inc. (Class A Stock)

     5,651,215   
28,052     

Western Union Co. (The)(a)

     458,931   
55,300     

Xerox Corp.

     624,890   
       

 

 

 
          30,582,938   

Leisure Products    0.1%

        
6,354     

Hasbro, Inc.(a)

     353,410   
15,813     

Mattel, Inc.(a)

     634,259   
       

 

 

 
          987,669   

Life Sciences Tools & Services    0.5%

        
16,798     

Agilent Technologies, Inc.

     939,344   
5,170     

PerkinElmer, Inc.(a)

     232,960   
20,002     

Thermo Fisher Scientific, Inc.

     2,405,041   
4,500     

Waters Corp.*

     487,845   
       

 

 

 
          4,065,190   

Machinery    1.7%

        
32,356     

Caterpillar, Inc.

     3,215,216   
8,716     

Cummins, Inc.

     1,298,597   
19,880     

Deere & Co.

     1,805,104   
8,962     

Dover Corp.

     732,643   
6,900     

Flowserve Corp.

     540,546   
20,436     

Illinois Tool Works, Inc.

     1,662,060   
12,600     

Ingersoll-Rand PLC

     721,224   
5,300     

Joy Global, Inc.(a)

     307,400   
18,564     

PACCAR, Inc.

     1,251,956   
5,804     

Pall Corp.(a)

     519,284   
7,938     

Parker Hannifin Corp.

     950,258   
9,946     

Pentair Ltd.

     789,116   
3,442     

Snap-on, Inc.

     390,598   
8,188     

Stanley Black & Decker, Inc.

     665,193   
9,300     

Xylem, Inc.

     338,706   
       

 

 

 
          15,187,901   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     17   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Media    3.5%

        
10,900     

Cablevision Systems Corp. (Class A Stock)(a)

   $ 183,883   
27,776     

CBS Corp. (Class B Stock)

     1,716,557   
133,285     

Comcast Corp. (Class A Stock)

     6,666,916   
25,600     

DIRECTV*

     1,956,352   
11,400     

Discovery Communications, Inc. (Class A Stock)*

     942,780   
11,689     

Gannett Co., Inc.

     322,616   
23,688     

Interpublic Group of Cos., Inc. (The)

     406,012   
26,775     

News Corp. (Class A Stock)*

     461,066   
14,034     

Omnicom Group, Inc.

     1,018,868   
5,000     

Scripps Networks Interactive, Inc. (Class A Stock)

     379,550   
14,281     

Time Warner Cable, Inc.

     1,959,068   
45,474     

Time Warner, Inc.

     2,970,816   
100,700     

Twenty-First Century Fox, Inc.

     3,219,379   
20,976     

Viacom, Inc. (Class B Stock)

     1,782,750   
83,913     

Walt Disney Co. (The)

     6,718,914   
       

 

 

 
          30,705,527   

Metals & Mining    0.5%

        
57,544     

Alcoa, Inc.

     740,591   
5,218     

Allegheny Technologies, Inc.

     196,614   
6,000     

Cliffs Natural Resources, Inc.(a)

     122,760   
53,792     

Freeport-McMoRan Copper & Gold, Inc.

     1,778,901   
27,397     

Newmont Mining Corp.

     642,186   
16,712     

Nucor Corp.

     844,625   
7,909     

United States Steel Corp.(a)

     218,368   
       

 

 

 
          4,544,045   

Multi-Utilities    1.1%

        
12,469     

Ameren Corp.

     513,723   
20,279     

CenterPoint Energy, Inc.

     480,410   
14,500     

CMS Energy Corp.

     424,560   
15,651     

Consolidated Edison, Inc.(a)

     839,676   
29,304     

Dominion Resources, Inc.(a)

     2,080,291   
9,387     

DTE Energy Co.

     697,360   
4,408     

Integrys Energy Group, Inc.

     262,937   
15,700     

NiSource, Inc.

     557,821   
22,552     

PG&E Corp.

     974,246   
24,294     

Public Service Enterprise Group, Inc.

     926,573   
7,600     

SCANA Corp.

     390,032   
10,998     

Sempra Energy

     1,064,167   

 

See Notes to Financial Statements.

 

18  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Multi-Utilities (cont’d.)

        
11,900     

TECO Energy, Inc.(a)

   $ 204,085   
12,400     

Wisconsin Energy Corp.(a)

     577,220   
       

 

 

 
          9,993,101   

Multiline Retail    0.6%

        
14,300     

Dollar General Corp.*

     793,364   
10,200     

Dollar Tree, Inc.*

     532,236   
5,000     

Family Dollar Stores, Inc.

     290,050   
10,400     

Kohl’s Corp.

     590,720   
19,182     

Macy’s, Inc.

     1,137,301   
8,000     

Nordstrom, Inc.

     499,600   
32,382     

Target Corp.

     1,959,435   
       

 

 

 
          5,802,706   

Oil, Gas & Consumable Fuels    8.0%

        
26,236     

Anadarko Petroleum Corp.

     2,223,763   
20,648     

Apache Corp.

     1,712,752   
23,000     

Cabot Oil & Gas Corp.

     779,240   
25,600     

Chesapeake Energy Corp.

     655,872   
98,892     

Chevron Corp.

     11,759,248   
62,957     

ConocoPhillips

     4,429,025   
12,900     

CONSOL Energy, Inc.(a)

     515,355   
17,800     

Denbury Resources, Inc.

     291,920   
19,800     

Devon Energy Corp.

     1,325,214   
14,100     

EOG Resources, Inc.

     2,765,997   
7,900     

EQT Corp.

     766,063   
223,152     

Exxon Mobil Corp.

     21,797,487   
14,434     

Hess Corp.

     1,196,290   
35,580     

Kinder Morgan, Inc.

     1,155,994   
36,178     

Marathon Oil Corp.

     1,285,043   
15,789     

Marathon Petroleum Corp.

     1,374,274   
8,600     

Murphy Oil Corp.

     540,596   
7,900     

Newfield Exploration Co.*

     247,744   
19,000     

Noble Energy, Inc.

     1,349,760   
41,176     

Occidental Petroleum Corp.

     3,923,661   
10,200     

ONEOK, Inc.

     604,350   
14,500     

Peabody Energy Corp.(a)

     236,930   
30,628     

Phillips 66

     2,360,194   
7,100     

Pioneer Natural Resources Co.

     1,328,694   
9,600     

QEP Resources, Inc.

     282,624   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     19   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Oil, Gas & Consumable Fuels (cont’d.)

        
8,900     

Range Resources Corp.

   $ 738,433   
17,800     

Southwestern Energy Co.*

     818,978   
33,784     

Spectra Energy Corp.

     1,247,981   
7,600     

Tesoro Corp.

     384,484   
28,500     

Valero Energy Corp.

     1,513,350   
34,892     

Williams Cos., Inc. (The)

     1,415,917   
       

 

 

 
          71,027,233   

Paper & Forest Products    0.1%

        
21,984     

International Paper Co.

     1,008,626   

Personal Products    0.1%

        
24,244     

Avon Products, Inc.

     354,932   
12,400     

Estee Lauder Cos., Inc. (The) (Class A Stock)

     829,312   
       

 

 

 
          1,184,244   

Pharmaceuticals    6.0%

        
80,474     

AbbVie, Inc.

     4,136,364   
9,000     

Actavis PLC*

     1,852,650   
15,464     

Allergan, Inc.

     1,919,082   
84,079     

Bristol-Myers Squibb Co.

     4,367,904   
51,497     

Eli Lilly & Co.

     3,031,113   
12,200     

Forest Laboratories, Inc.*

     1,125,694   
9,507     

Hospira, Inc.*

     411,178   
145,269     

Johnson & Johnson

     14,269,774   
151,033     

Merck & Co., Inc.

     8,574,143   
19,900     

Mylan, Inc.*

     971,717   
6,300     

Perrigo Co PLC

     974,358   
330,923     

Pfizer, Inc.

     10,629,247   
25,100     

Zoetis, Inc.

     726,394   
       

 

 

 
          52,989,618   

Professional Services    0.2%

        
1,700     

Dun & Bradstreet Corp. (The)

     168,895   
5,930     

Equifax, Inc.

     403,418   
13,500     

Nielsen Holdings NV

     602,505   
7,900     

Robert Half International, Inc.

     331,405   
       

 

 

 
          1,506,223   

 

See Notes to Financial Statements.

 

20  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Real Estate Investment Trusts (REITs)    2.0%

        
19,600     

American Tower Corp.

   $ 1,604,652   
6,880     

Apartment Investment & Management Co. (Class A Stock)

     207,913   
6,011     

AvalonBay Communities, Inc.

     789,364   
8,200     

Boston Properties, Inc.

     939,146   
16,500     

Crown Castle International Corp.

     1,217,370   
17,300     

Equity Residential

     1,003,227   
26,000     

General Growth Properties, Inc.

     572,000   
24,400     

HCP, Inc.

     946,476   
14,500     

Health Care REIT, Inc.

     864,200   
39,036     

Host Hotels & Resorts, Inc.

     790,089   
22,700     

Kimco Realty Corp.

     496,676   
7,500     

Macerich Co. (The)

     467,475   
6,700     

Plum Creek Timber Co., Inc.

     281,668   
25,737     

Prologis, Inc.

     1,050,842   
6,900     

Public Storage

     1,162,581   
15,989     

Simon Property Group, Inc.

     2,622,196   
15,733     

Ventas, Inc.

     952,948   
8,384     

Vornado Realty Trust

     826,327   
29,459     

Weyerhaeuser Co.

     864,622   
       

 

 

 
          17,659,772   

Real Estate Management & Development

        
14,700     

CBRE Group, Inc. (Class A Stock)*

     403,221   

Road & Rail    0.9%

        
53,318     

CSX Corp.

     1,544,623   
5,000     

Kansas City Southern

     510,300   
16,311     

Norfolk Southern Corp.

     1,584,940   
2,821     

Ryder System, Inc.

     225,454   
23,458     

Union Pacific Corp.

     4,402,128   
       

 

 

 
          8,267,445   

Semiconductors & Semiconductor Equipment    2.0%

        
16,500     

Altera Corp.

     597,960   
16,400     

Analog Devices, Inc.

     871,496   
61,288     

Applied Materials, Inc.

     1,251,501   
26,800     

Broadcom Corp. (Class A Stock)

     843,664   
2,600     

First Solar, Inc.(a)

     181,454   
253,788     

Intel Corp.

     6,550,268   
9,120     

KLA-Tencor Corp.

     630,557   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     21   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Semiconductors & Semiconductor Equipment (cont’d.)

        
8,962     

Lam Research Corp.*

   $ 492,910   
11,600     

Linear Technology Corp.(a)

     564,804   
31,844     

LSI Corp.

     352,513   
9,700     

Microchip Technology, Inc.(a)

     463,272   
52,416     

Micron Technology, Inc.*(a)

     1,240,162   
30,100     

NVIDIA Corp.

     539,091   
56,052     

Texas Instruments, Inc.

     2,642,852   
14,500     

Xilinx, Inc.

     786,915   
       

 

 

 
          18,009,419   

Software    3.5%

        
23,040     

Adobe Systems, Inc.*

     1,514,650   
10,620     

Autodesk, Inc.*

     522,292   
17,458     

CA, Inc.

     540,674   
9,900     

Citrix Systems, Inc.*

     568,557   
13,900     

Electronic Arts, Inc.*

     403,239   
14,900     

Intuit, Inc.

     1,158,177   
390,212     

Microsoft Corp.

     15,994,790   
180,240     

Oracle Corp.

     7,373,618   
10,400     

Red Hat, Inc.*

     550,992   
26,800     

Salesforce.com, Inc.*(a)

     1,530,012   
35,217     

Symantec Corp.

     703,283   
       

 

 

 
          30,860,284   

Specialty Retail    2.1%

        
2,423     

AutoNation, Inc.*

     128,976   
1,630     

AutoZone, Inc.*(a)

     875,473   
11,200     

Bed Bath & Beyond, Inc.*(a)

     770,560   
14,500     

Best Buy Co., Inc.

     382,945   
10,500     

CarMax, Inc.*(a)

     491,400   
6,300     

GameStop Corp. (Class A Stock)

     258,930   
12,613     

Gap, Inc. (The)

     505,277   
72,084     

Home Depot, Inc. (The)

     5,704,007   
12,622     

L Brands, Inc.

     716,551   
53,396     

Lowe’s Cos., Inc.

     2,611,064   
5,400     

O’Reilly Automotive, Inc.*(a)

     801,306   
5,800     

PetSmart, Inc.(a)

     399,562   
11,300     

Ross Stores, Inc.

     808,515   
36,725     

Staples, Inc.

     416,461   
6,000     

Tiffany & Co.

     516,900   

 

See Notes to Financial Statements.

 

22  


Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Specialty Retail (cont’d.)

        
36,464     

TJX Cos., Inc. (The)

   $ 2,211,542   
6,000     

Tractor Supply Co.

     423,780   
5,900     

Urban Outfitters, Inc.*

     215,173   
       

 

 

 
          18,238,422   

Technology Hardware, Storage & Peripherals    3.9%

        
46,084     

Apple, Inc.

     24,735,126   
104,304     

EMC Corp.

     2,858,972   
100,702     

Hewlett-Packard Co.

     3,258,717   
17,100     

NetApp, Inc.

     630,990   
11,300     

SanDisk Corp.

     917,447   
16,400     

Seagate Technology PLC(a)

     921,024   
11,400     

Western Digital Corp.

     1,046,748   
       

 

 

 
          34,369,024   

Textiles, Apparel & Luxury Goods    0.8%

        
15,000     

Coach, Inc.

     744,900   
2,100     

Fossil Group, Inc.*

     244,881   
9,000     

Michael Kors Holdings Ltd.*

     839,430   
37,852     

NIKE, Inc. (Class B Stock)

     2,795,749   
3,800     

PVH Corp.

     474,126   
3,200     

Ralph Lauren Corp.

     514,976   
18,536     

VF Corp.

     1,147,007   
       

 

 

 
          6,761,069   

Thrifts & Mortgage Finance    0.1%

        
26,800     

Hudson City Bancorp, Inc.

     263,444   
15,000     

People’s United Financial, Inc.(a)

     223,050   
       

 

 

 
          486,494   

Tobacco    1.4%

        
102,779     

Altria Group, Inc.

     3,847,018   
18,980     

Lorillard, Inc.

     1,026,438   
81,879     

Philip Morris International, Inc.

     6,703,434   
13,900     

Reynolds American, Inc.

     742,538   
       

 

 

 
          12,319,428   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     23   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Shares      Description    Value (Note 1)  

COMMON STOCKS (Continued)

  

Trading Companies & Distributors    0.2%

        
13,100     

Fastenal Co.(a)

   $ 646,092   
3,174     

W.W. Grainger, Inc.

     801,943   
       

 

 

 
          1,448,035   
       

 

 

 
    

TOTAL LONG-TERM INVESTMENTS
(cost $295,888,137)

     858,919,628   
       

 

 

 

SHORT-TERM INVESTMENTS    7.1%

  

AFFILIATED MONEY MARKET MUTUAL FUND    6.9%

  
61,403,542     

Prudential Investment Portfolios 2 - Prudential Core Taxable
Money Market Fund
(cost $61,403,542; includes $39,252,811 of cash
collateral received for securities on loan)(c)(d)

     61,403,542   
       

 

 

 

Principal
Amount (000)#

             

U.S. TREASURY OBLIGATION    0.2%

  
           1,400     

U.S. Treasury Bill, 0.020%, 06/19/14
(cost $1,399,846)(e)(f)

     1,399,931   
       

 

 

 
    

TOTAL SHORT-TERM INVESTMENTS
(cost $62,803,388)

     62,803,473   
       

 

 

 
    

TOTAL INVESTMENTS    104.3%
(cost $358,691,525; Note 5)

     921,723,101   
    

Liabilities in excess of other assets(g)    (4.3)%

     (38,159,328
       

 

 

 
    

NET ASSETS    100.0%

   $ 883,563,773   
       

 

 

 

 

The following abbreviation is used in the portfolio descriptions:

REIT—Real Estate Investment Trust

* Non-income producing security.
# Principal amount shown in U.S. dollars unless otherwise stated.
(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $38,723,807; cash collateral of $39,252,811 (included with liabilities) was received with which the Fund purchased highly liquid short-term investments. Cash collateral is less than 102% of the market value of securities loaned due to significant market increases on last business day of the reporting period. Collateral was subsequently received on the following business day and the Fund remained in compliance.
(b) An affiliated security.
(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.
(d) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.

 

See Notes to Financial Statements.

 

24  


(e) Rate quoted represents yield-to-maturity as of purchase date.
(f) Represents security, or a portion thereof, segregated as collateral for futures contracts.
(g) Liabilities in excess of other assets includes net unrealized appreciation on futures contracts as follows:

 

Futures contracts outstanding at March 31, 2014:

 

Number of
Contracts
    Type   Expiration
Date
    Value at
Trade Date
    Value at
March 31,
2014
    Unrealized
Appreciation
 
  Long Positions:        
  139      S&P 500 E-Mini     Jun. 2014      $ 12,867,522      $ 12,958,970      $ 91,448   
  24      S&P 500 Index     Jun. 2014        11,122,596        11,187,600        65,004   
         

 

 

 
          $ 156,452   
         

 

 

 

 

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

 

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

 

Level 2—other 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 3—significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

 

The following is a summary of the inputs used as of March 31, 2014 in valuing such portfolio securities:

 

        Level 1             Level 2             Level 3      

Investments in Securities

     

Common Stocks

     

Aerospace & Defense

  $ 23,726,270      $   —      $   —   

Air Freight & Logistics

    6,438,721                 

Airlines

    2,275,669                 

Auto Components

    3,706,640                 

Automobiles

    6,092,112                 

Banks

    53,938,317                 

Beverages

    18,363,263         —         —   

Biotechnology

    20,722,400                 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     25   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

        Level 1             Level 2             Level 3      

Common Stocks (continued)

  

 

Building Products

  $ 700,686      $   —      $   —   

Capital Markets

    18,518,822                 

Chemicals

    22,115,849                 

Commercial Services & Supplies

    4,034,588                 

Communications Equipment

    15,301,346                 

Construction & Engineering

    1,554,506                 

Construction Materials

    431,925                 

Consumer Finance

    8,515,994                 

Containers & Packaging

    1,942,054                 

Distributors

    720,768                 

Diversified Consumer Services

    551,938                 

Diversified Financial Services

    16,415,296                 

Diversified Telecommunication Services

    21,043,291                 

Electric Utilities

    14,835,216                 

Electrical Equipment

    6,428,991                 

Electronic Equipment, Instruments & Components

    4,035,664                 

Energy Equipment & Services

    16,602,587                 

Food & Staples Retailing

    20,153,980                 

Food Products

    14,119,204                 

Gas Utilities

    314,813                 

Health Care Equipment & Supplies

    18,374,886                 

Health Care Providers & Services

    18,111,420                 

Health Care Technology

    888,750                 

Hotels, Restaurants & Leisure

    14,820,508                 

Household Durables

    3,396,140                 

Household Products

    16,863,256                 

Independent Power and Renewable Electricity Producers

    941,616                 

Industrial Conglomerates

    20,224,749                 

Insurance

    24,537,185                 

Internet & Catalog Retail

    11,525,959                 

Internet Software & Services

    27,226,615                 

IT Services

    30,582,938                 

Leisure Products

    987,669                 

Life Sciences Tools & Services

    4,065,190                 

Machinery

    15,187,901                 

Media

    30,705,527                 

Metals & Mining

    4,544,045                 

Multi-Utilities

    9,993,101                 

Multiline Retail

    5,802,706                 

Oil, Gas & Consumable Fuels

    71,027,233                 

Paper & Forest Products

    1,008,626                 

Personal Products

    1,184,244                 

 

See Notes to Financial Statements.

 

26  


        Level 1             Level 2             Level 3      

Common Stocks (continued)

  

 

Pharmaceuticals

  $ 52,989,618      $      $   —   

Professional Services

    1,506,223                 

Real Estate Investment Trusts (REITs)

    17,659,772                 

Real Estate Management & Development

    403,221                 

Road & Rail

    8,267,445                 

Semiconductors & Semiconductor Equipment

    18,009,419                 

Software

    30,860,284                 

Specialty Retail

    18,238,422                 

Technology Hardware, Storage & Peripherals

    34,369,024                 

Textiles, Apparel & Luxury Goods

    6,761,069                 

Thrifts & Mortgage Finance

    486,494                 

Tobacco

    12,319,428                 

Trading Companies & Distributors

    1,448,035                 

Affiliated Money Market Mutual Fund

    61,403,542                 

U.S. Treasury Obligation

           1,399,931          

Other Financial Instruments*

     

Futures Contracts

    156,452                 
 

 

 

   

 

 

   

 

 

 

Total

  $ 920,479,622      $ 1,399,931      $   
 

 

 

   

 

 

   

 

 

 

 

* 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.

 

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of March 31, 2014 was as follows:

 

Oil, Gas & Consumable Fuels

    8.0

Affiliated Money Market Mutual Fund (including 4.4% of collateral received for securities on loan)

    6.9   

Banks

    6.1   

Pharmaceuticals

    6.0   

Technology Hardware, Storage & Peripherals

    3.9   

Software

    3.5   

Media

    3.5   

IT Services

    3.5   

Internet Software & Services

    3.1   

Insurance

    2.8   

Aerospace & Defense

    2.7   

Chemicals

    2.5   

Diversified Telecommunication Services

    2.4   

Biotechnology

    2.3   

Industrial Conglomerates

    2.3

Food & Staples Retailing

    2.3   

Capital Markets

    2.1   

Health Care Equipment & Supplies

    2.1   

Beverages

    2.1   

Specialty Retail

    2.1   

Health Care Providers & Services

    2.0   

Semiconductors & Semiconductor Equipment

    2.0   

Real Estate Investment Trusts (REITs)

    2.0   

Household Products

    1.9   

Energy Equipment & Services

    1.9   

Diversified Financial Services

    1.9   

Communications Equipment

    1.7   

Machinery

    1.7   

Electric Utilities

    1.7   

Hotels, Restaurants & Leisure

    1.7   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     27   


 

Portfolio of Investments

 

as of March 31, 2014 (Unaudited) continued

 

Industry (cont’d.)

 

Food Products

    1.6

Tobacco

    1.4   

Internet & Catalog Retail

    1.3   

Multi-Utilities

    1.1   

Consumer Finance

    1.0   

Road & Rail

    0.9   

Textiles, Apparel & Luxury Goods

    0.8   

Air Freight & Logistics

    0.7   

Electrical Equipment

    0.7   

Automobiles

    0.7   

Multiline Retail

    0.6   

Metals & Mining

    0.5   

Life Sciences Tools & Services

    0.5   

Electronic Equipment, Instruments & Components

    0.4   

Commercial Services & Supplies

    0.4   

Auto Components

    0.4   

Household Durables

    0.4   

Airlines

    0.3

Containers & Packaging

    0.2   

Construction & Engineering

    0.2   

Professional Services

    0.2   

Trading Companies & Distributors

    0.2   

U.S. Treasury Obligation

    0.2   

Personal Products

    0.1   

Paper & Forest Products

    0.1   

Leisure Products

    0.1   

Independent Power and Renewable Electricity Producers

    0.1   

Health Care Technology

    0.1   

Distributors

    0.1   

Building Products

    0.1   

Diversified Consumer Services

    0.1   

Thrifts & Mortgage Finance

    0.1   
 

 

 

 
    104.3   

Liabilities in excess of other assets

    (4.3
 

 

 

 
    100.0
 

 

 

 

 

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

 

Fair values of derivative instruments as of March 31, 2014 as presented in the Statement of Assets and Liabilities:

 

Derivatives not accounted for
as hedging instruments,
carried at fair value

  

Asset Derivatives

   

Liability Derivatives

 
  

Balance
Sheet Location

   Fair
Value
   

Balance
Sheet Location

   Fair
Value
 
Equity contracts    Due from broker—variation margin    $ 156,452  

   $   —   
     

 

 

      

 

 

 

 

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

 

See Notes to Financial Statements.

 

28  


The effects of derivative instruments on the Statement of Operations for the period ended March 31, 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  

Equity contracts

     $ 2,479,933   
    

 

 

 

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income

 

Derivatives not accounted for as hedging instruments, carried at fair value

     Futures  

Equity contracts

     $ 427,225   
    

 

 

 

 

For the period ended March 31, 2014, the Fund’s average value at trade date for futures long positions was $25,929,898.

 

The Fund invested in financial instruments and 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 as well as instruments subject to collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.

 

Offsetting of financial instrument and derivative assets and liabilities:

 

Description

  Gross Amounts
Recognized
    Gross Amounts
not subject to
netting
    Gross Amounts
Offset in the
Statement of
Financial Position
    Net Amounts
Presented in the
Statement of
Financial Position
 

Assets:

       

Securities on loan

  $ 38,723,807      $   —      $   —      $ 38,723,807   

Exchange-traded and cleared derivatives

    183,890                      183,890   
       

 

 

 
          38,907,697   
       

 

 

 

Collateral Amounts Pledged/(Received):

  

     

Securities on loan

  

    (38,723,807
       

 

 

 

Net Amount

  

  $ 183,890   
       

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     29   


 

Statement of Assets and Liabilities

 

as of March 31, 2014 (Unaudited)

 

Assets

        

Investments at value, including securities on loan of $38,723,807:

  

Unaffiliated Investments (cost $296,586,619)

   $ 858,398,004   

Affiliated Investments (cost $62,104,906)

     63,325,097   

Receivable for Fund shares sold

     4,377,221   

Dividends receivable

     996,363   

Due from broker—variation margin

     183,890   

Prepaid expenses

     4,070   
  

 

 

 

Total assets

     927,284,645   
  

 

 

 

Liabilities

        

Payable to broker for collateral for securities on loan

     39,252,811   

Payable for Fund shares reacquired

     4,183,677   

Accrued expenses

     123,543   

Distribution fee payable

     75,749   

Management fee payable

     59,601   

Affiliated transfer agent fee payable

     25,491   
  

 

 

 

Total liabilities

     43,720,872   
  

 

 

 

Net Assets

   $ 883,563,773   
  

 

 

 
          

Net assets were comprised of:

  

Shares of beneficial interest, at par

   $ 21,299   

Paid-in capital in excess of par

     297,921,883   
  

 

 

 
     297,943,182   

Undistributed net investment income

     6,271,117   

Accumulated net realized gain on investment transactions

     16,161,446   

Net unrealized appreciation on investments

     563,188,028   
  

 

 

 

Net assets, March 31, 2014

   $ 883,563,773   
  

 

 

 

 

See Notes to Financial Statements.

 

30  


 

 

Class A

        

Net asset value and redemption price per share
($184,981,433 ÷ 4,464,683 shares of beneficial interest issued and outstanding)

   $ 41.43   

Maximum sales charge (3.25% of offering price)

     1.39   
  

 

 

 

Maximum offering price to public

   $ 42.82   
  

 

 

 

Class C

        

Net asset value, offering price and redemption price per share
($34,557,391 ÷ 837,883 shares of beneficial interest issued and outstanding)

   $ 41.24   
  

 

 

 

Class I

        

Net asset value, offering price and redemption price per share
($240,571,840 ÷ 5,795,623 shares of beneficial interest issued and outstanding)

   $ 41.51   
  

 

 

 

Class Z

        

Net asset value, offering price and redemption price per share
($423,453,109 ÷ 10,201,235 shares of beneficial interest issued and outstanding)

   $ 41.51   
  

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     31   


 

Statement of Operations

 

Six Months Ended March 31, 2014 (Unaudited)

 

Net Investment Income

        

Income

  

Unaffiliated dividend income (net of foreign withholding taxes of $606)

   $ 8,691,207   

Affiliated dividend income

     39,773   

Affiliated income from securities loaned, net

     22,628   

Interest income

     248   
  

 

 

 

Total income

     8,753,856   
  

 

 

 

Expenses

  

Management fee

     1,289,097   

Distribution fee—Class A

     263,918   

Distribution fee—Class C

     160,732   

Custodian’s fees and expenses

     48,000   

Transfer agent fee—Class A (including affiliated expense of $41,900)

     72,000   

Transfer agent fee—Class C (including affiliated expense of $1,400)

     3,000   

Transfer agent fee—Class I (including affiliated expense of $80,000)

     80,000   

Transfer agent fee—Class Z (including affiliated expense of $274,000)

     274,000   

Registration fees

     27,000   

Shareholders’ reports

     27,000   

Legal fees and expenses

     13,000   

Trustees’ fees

     13,000   

Audit fee

     11,000   

Insurance expenses

     6,000   

Commitment fee on syndicated credit agreement

     1,000   

Miscellaneous

     26,301   
  

 

 

 

Total expenses

     2,315,048   

Less: Management fee waiver

     (945,338
  

 

 

 

Net expenses

     1,369,710   
  

 

 

 

Net investment income

     7,384,146   
  

 

 

 

Realized And Unrealized Gain On Investments

        

Net realized gain on:

  

Investment transactions (including affiliated $93,381)

     23,515,153   

Futures transactions

     2,479,933   
  

 

 

 
     25,995,086   
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated $67,622)

     65,903,439   

Futures

     427,225   
  

 

 

 
     66,330,664   
  

 

 

 

Net gain on investment transactions

     92,325,750   
  

 

 

 

Net Increase In Net Assets Resulting From Operations

   $ 99,709,896   
  

 

 

 

 

See Notes to Financial Statements.

 

32  


 

Statement of Changes in Net Assets

 

(Unaudited)

 

 

     Six Months
Ended
March 31, 2014
     Year
Ended
September 30, 2013
 

Increase (Decrease) in Net Assets

                 

Operations

     

Net investment income

   $ 7,384,146       $ 14,518,487   

Net realized gain on investment transactions

     25,995,086         21,530,799   

Net change in unrealized appreciation (depreciation) on investments

     66,330,664         96,216,868   
  

 

 

    

 

 

 

Net increase in net assets resulting from operations

     99,709,896         132,266,154   
  

 

 

    

 

 

 

Dividends and Distributions (Note 1)

     

Dividends from net investment income

     

Class A

     (2,095,357      (2,357,155

Class C

     (198,743      (249,255

Class I

     (3,431,791      (3,437,440

Class Z

     (6,202,457      (7,015,339
  

 

 

    

 

 

 
     (11,928,348      (13,059,189
  

 

 

    

 

 

 

Distributions from net realized gains

     

Class A

     (381,468        

Class C

     (69,520        

Class I

     (495,263        

Class Z

     (928,809        
  

 

 

    

 

 

 
     (1,875,060        
  

 

 

    

 

 

 

Fund share transactions (Net of share conversions) (Note 6)

     

Net proceeds from shares sold

     86,180,436         178,974,200   

Net asset value of shares issued in reinvestment of dividends

     13,641,211         12,833,316   

Cost of shares reacquired

     (122,575,141      (217,929,434
  

 

 

    

 

 

 

Net decrease in net assets from Fund share transactions

     (22,753,494      (26,121,918
  

 

 

    

 

 

 

Total increase

     63,152,994         93,085,047   

Net Assets:

                 

Beginning of period

     820,410,779         727,325,732   
  

 

 

    

 

 

 

End of period(a)

   $ 883,563,773       $ 820,410,779   
  

 

 

    

 

 

 

(a) Includes undistributed net investment income of:

   $ 6,271,117       $ 10,815,319   
  

 

 

    

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     33   


 

Notes to Financial Statements

 

(Unaudited)

 

Prudential Investment Portfolios 8 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”). The Trust was established as a Delaware business trust on May 11, 1992 and currently consists of one fund, which is the Prudential Stock Index Fund (the “Fund”). The Fund’s investment objective is to provide investment results that correspond to the price and yield performance of the Standard & Poor’s 500 Composite Stock Price Index.

 

Note 1. Accounting Policies

 

The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.

 

Securities Valuation: The Fund holds securities and other assets 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 Trustees (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 Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

 

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

 

34  


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 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.

 

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.

 

Prudential Stock Index Fund     35   


 

Notes to Financial Statements

 

(Unaudited) continued

 

 

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

 

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

 

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

 

Master Netting Arrangements: The Fund is subject to various Master Agreements, or netting arrangements, with select counterparties. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable

 

36  


by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there were no instances where the right to set-off existed and management has not elected to offset.

 

Financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.

 

Securities Lending: The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in a highly liquid short-term money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities, and any interest on the investment of cash received as collateral. The Fund also continues to receive interest and dividends or amounts equivalent thereto, on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

 

REITs: The Fund invests in real estate investment trusts (“REITs”), which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. These estimates are adjusted periodically when the actual sources of distributions are disclosed by the REITs.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and

 

Prudential Stock Index Fund     37   


 

Notes to Financial Statements

 

(Unaudited) continued

 

accretion of discount on debt securities, as required, is recorded on an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.

 

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

 

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

 

Taxes: For federal income tax purposes, the Fund is treated as a separate taxpaying entity. It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

 

Withholding taxes on foreign dividends, interest and capital gains are recorded, net of reclaimable amounts, at the time the related income is earned.

 

Estimates: The preparation of the 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.

 

Note 2. Agreements

 

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Quantitative Management Associates LLC (“QMA”). The subadvisory agreement

 

38  


provides that QMA will furnish investment advisory services in connection with the management of the Fund. PI pays for the services of QMA, the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

 

The management fee paid to PI is accrued daily and payable monthly, at an annual rate of .30% of the Fund’s average daily net assets up to and including $1 billion and .25% of such average daily net assets in excess of $1 billion. Effective April 1, 2014, the management fee was reduced to an annual rate of .15% of the Fund’s average daily net assets up to and including $1 billion and .10% of such average daily net assets in excess of $1 billion. Effective June 1, 2007 to January 31, 2015, the Fund’s manager has agreed to contractually waive a portion of its management fee, so that the effective management fee for the Fund will be .08% of the average daily net assets of Fund. The effective management fee rate was .08% of the average daily net assets for the six months ended March 31, 2014.

 

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

 

Pursuant to the Class A and C Plans, the Fund compensates PIMS for distribution-related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively.

 

PIMS has advised the Fund that it has received $73,835 in front-end sales charges resulting from sales of Class A shares during the six months ended March 31, 2014. From these fees, PIMS paid such sales charges to affiliated broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

 

PIMS has advised the Fund that for the six months ended March 31, 2014, it received $441 and $1,077 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholder, respectively.

 

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

 

Note 3. Other Transactions with Affiliates

 

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

 

Prudential Stock Index Fund     39   


 

Notes to Financial Statements

 

(Unaudited) continued

 

agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable. The Fund’s Class I and Class Z shares are subject to a transfer agent fee of .07% and .13% of the average daily net assets of the Class I and Class Z shares, respectively. Classes A and C each compensate PMFS for its services as they are incurred.

 

Prudential Investment Management Inc. (“PIM”), an indirect, wholly-owned subsidiary of Prudential, is the Fund’s security lending agent. For the six months ended March 31, 2014, PIM has been compensated approximately $6,800 for these services.

 

The Fund invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.

 

Note 4. Portfolio Securities

 

Purchases and sales of portfolio securities, other than short-term investments, for the six months ended March 31, 2014, were $19,302,834 and $44,632,268, respectively.

 

Note 5. Tax Information

 

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of March 31, 2014 were as follows:

 

Tax Basis

   $ 368,688,060   
  

 

 

 

Appreciation

     556,888,975   

Depreciation

     (3,853,934
  

 

 

 

Net Unrealized Appreciation

   $ 553,035,041   
  

 

 

 

 

The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales, Lehman Brothers securities adjustments and other tax adjustments.

 

Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The

 

40  


Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

 

Note 6. Capital

 

The Fund offers Class A, Class C, Class I and Class Z shares. Class A shares are sold with a front-end sales charge of up to 3.25%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a 1% contingent deferred sales charge (“CDSC”), although they are not subject to an initial sales charge. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Class C shares are sold with a CDSC of 1% during the first year.

 

Class I and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors. The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value, currently of one series, divided into four classes, designated Class A, Class C, Class I and Class Z. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

 

Transactions in shares of beneficial interest were as follows:

 

Class A

     Shares      Amount  

Six months ended March 31, 2014:

       

Shares sold

       591,198       $ 23,556,284   

Shares issued in reinvestment of dividends and distributions

       61,893         2,421,271   

Shares reacquired

       (525,582      (21,007,113
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       127,509         4,970,442   

Shares reacquired upon conversion into Class Z

       (3,593      (135,770
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       123,916       $ 4,834,672   
    

 

 

    

 

 

 

Year ended September 30, 2013:

       

Shares sold

       1,177,526       $ 40,497,854   

Shares issued in reinvestment of dividends and distributions

       71,208         2,170,398   

Shares reacquired

       (1,421,832      (49,183,007
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (173,098      (6,514,755

Shares issued upon conversion from Class Z

       238         8,874   

Shares reacquired upon conversion into Class Z

       (307      (11,076
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (173,167    $ (6,516,957
    

 

 

    

 

 

 

 

Prudential Stock Index Fund     41   


 

Notes to Financial Statements

 

(Unaudited) continued

 

Class C

     Shares      Amount  

Six months ended March 31, 2014:

       

Shares sold

       93,659       $ 3,704,183   

Shares issued in reinvestment of dividends and distributions

       6,625         258,525   

Shares reacquired

       (45,419      (1,793,993
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       54,865         2,168,715   

Shares reacquired upon conversion into Class Z

       (677      (26,702
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       54,188       $ 2,142,013   
    

 

 

    

 

 

 

Year ended September 30, 2013:

       

Shares sold

       132,606       $ 4,654,096   

Shares issued in reinvestment of dividends and distributions

       7,778         236,622   

Shares reacquired

       (106,901      (3,621,594
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       33,483         1,269,124   

Shares reacquired upon conversion into Class Z

       (481      (17,428
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       33,002       $ 1,251,696   
    

 

 

    

 

 

 

Class I

               

Six months ended March 31, 2014:

       

Shares sold

       427,514       $ 17,247,417   

Shares issued in reinvestment of dividends and distributions

       98,424         3,853,305   

Shares reacquired

       (665,815      (26,543,031
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (139,877    $ (5,442,309
    

 

 

    

 

 

 

Year ended September 30, 2013:

       

Shares sold

       1,411,124       $ 50,148,795   

Shares issued in reinvestment of dividends and distributions

       112,570         3,432,246   

Shares reacquired

       (1,056,017      (36,289,579
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       467,677       $ 17,291,462   
    

 

 

    

 

 

 

 

42  


Class Z

     Shares      Amount  

Six months ended March 31, 2014:

       

Shares sold

       1,038,482       $ 41,672,552   

Shares issued in reinvestment of dividends and distributions

       181,468         7,108,110   

Shares reacquired

       (1,822,995      (73,231,004
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (603,045      (24,450,342

Shares issued upon conversion from Class A and Class C

       4,256         162,472   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (598,789    $ (24,287,870
    

 

 

    

 

 

 

Year ended September 30, 2013:

       

Shares sold

       2,440,931       $ 83,673,455   

Shares issued in reinvestment of dividends and distributions

       229,313         6,994,050   

Shares reacquired

       (3,753,807      (128,835,254
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (1,083,563      (38,167,749

Shares issued upon conversion from Class A and Class C

       783         28,504   

Shares reacquired upon conversion into Class A

       (237      (8,874
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (1,083,017    $ (38,148,119
    

 

 

    

 

 

 

 

Note 7. Borrowings

 

The Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 5, 2013 through November 4, 2014. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 5, 2013, the Funds had another SCA with substantially similar terms. Interest on any borrowings under the SCA is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly.

 

The Fund did not utilize the SCA during the six months ended March 31, 2014.

 

Prudential Stock Index Fund     43   


 

Financial Highlights

 

(Unaudited)

 

Class A Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2014          2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $37.45            $32.09        $25.16        $25.34        $23.48        $26.17   
Income (loss) from investment operations:                                                    
Net investment income     .30            .58        .47        .40        .37        .42   
Net realized and unrealized gain (loss) on investment transactions     4.24            5.30        6.90        (.20     1.88        (2.51
Total from investment operations     4.54            5.88        7.37        .20        2.25        (2.09
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.47         (.52     (.44     (.38     (.39     (.60
Distributions from net realized gains     (.09         -        -        -        -        -   
Total dividends and distributions     (.56         (.52     (.44     (.38     (.39     (.60
Net asset value, end of period     $41.43            $37.45        $32.09        $25.16        $25.34        $23.48   
Total Return(b):     12.21%            18.71%        29.60%        .74%        9.63%        (7.22)%   
Ratios/Supplemental Data:  
Net assets, end of period (000)     $184,982            $162,557        $144,851        $118,691        $114,403        $91,654   
Average net assets (000)     $176,428            $153,755        $135,485        $131,565        $104,488        $74,427   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .50% (d)          .54%        .55%        .55%        .56%        .61%   
Expenses before waivers and/or expense reimbursement     .72% (d)          .76%        .77%        .77%        .78%        .83%   
Net investment income     1.54% (d)          1.69%        1.61%        1.43%        1.50%        2.10%   
Portfolio turnover rate     2% (e)          3%        4%        5%        5%        6%   

 

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

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

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

(d) Annualized.

(e) Not annualized.

 

See Notes to Financial Statements.

 

44  


 

 

 

Class C Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2014          2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $37.18            $31.87        $24.99        $25.18        $23.33        $25.90   
Income (loss) from investment operations:                                                    
Net investment income     .18            .36        .29        .23        .21        .26   
Net realized and unrealized gain (loss) on investment and transactions     4.22            5.29        6.86        (.19     1.87        (2.45
Total from investment operations     4.40            5.65        7.15        .04        2.08        (2.19
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.25         (.34     (.27     (.23     (.23     (.38
Distributions from net realized gains     (.09         -        -        -        -        -   
Total dividends and distributions     (.34         (.34     (.27     (.23     (.23     (.38
Net asset value, end of period     $41.24            $37.18        $31.87        $24.99        $25.18        $23.33   
Total Return(b):     11.87%            17.96%        28.78%        .14%        8.96%        (7.98)%   
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $34,557            $29,139        $23,924        $20,351        $22,615        $23,032   
Average net assets (000)     $32,235            $25,730        $23,103        $23,884        $23,196        $20,821   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     1.14% (d)          1.16%        1.17%        1.17%        1.19%        1.41%   
Expenses before waivers and/or expense reimbursement     1.36% (d)          1.38%        1.39%        1.39%        1.41%        1.63%   
Net investment income     .90% (d)          1.06%        .99%        .81%        .86%        1.33%   
Portfolio turnover rate     2% (e)          3%        4%        5%        5%        6%   

 

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

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

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

(d) Annualized.

(e) Not annualized.

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     45   


 

Financial Highlights

 

(Unaudited) continued

 

Class I Shares                
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2014          2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $37.57            $32.20        $25.25        $25.43        $23.55        $26.26   
Income (loss) from investment operations:                                                    
Net investment income     .37            .70        .55        .50        .46        .51   
Net realized and unrealized gain (loss) on investment and transactions     4.26            5.30        6.94        (.21     1.89        (2.54
Total from investment operations     4.63            6.00        7.49        .29        2.35        (2.03
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.60         (.63     (.54     (.47     (.47     (.68
Distributions from net realized gains     (.09         -        -        -        -        -   
Total dividends and distributions     (.69         (.63     (.54     (.47     (.47     (.68
Net asset value, end of period     $41.51            $37.57        $32.20        $25.25        $25.43        $23.55   
Total Return(b):     12.42%            19.09%        30.06%        1.08%        10.08%        (6.85)%   
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $240,572            $222,993        $176,040        $331,595        $322,850        $325,476   
Average net assets (000)     $230,716            $193,507        $214,339        $376,719        $321,048        $288,944   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .19% (d)          .19%        .19%        .19%        .20%        .21%   
Expenses before waivers and/or expense reimbursement     .41% (d)          .41%        .41%        .41%        .42%        .43%   
Net investment income     1.85% (d)          2.03%        2.00%        1.79%        1.85%        2.53%   
Portfolio turnover rate     2% (e)          3%        4%        5%        5%        6%   

 

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

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

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

(d) Annualized.

(e) Not annualized.

 

See Notes to Financial Statements.

 

46  


 

 

 

Class Z Shares         
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2014          2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $37.57            $32.19        $25.25        $25.42        $23.54        $26.25   
Income (loss) from investment operations:                                                    
Net investment income     .36            .68        .56        .48        .44        .50   
Net realized and unrealized gain (loss) on investment transactions     4.25            5.31        6.90        (.20     1.90        (2.54
Total from investment operations     4.61            5.99        7.46        .28        2.34        (2.04
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.58         (.61     (.52     (.45     (.46     (.67
Distributions from net realized gains     (.09         -        -        -        -        -   
Total dividends and distributions     (.67         (.61     (.52     (.45     (.46     (.67
Net asset value, end of period     $41.51            $37.57        $32.19        $25.25        $25.42        $23.54   
Total Return(b):     12.36%            19.06%        29.94%        1.06%        10.03%        (6.93)%   
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $423,453            $405,721        $382,510        $336,727        $352,470        $393,887   
Average net assets (000)     $422,380            $390,330        $373,819        $381,784        $383,488        $351,797   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .25% (d)          .25%        .25%        .25%        .26%        .26%   
Expenses before waivers and/or expense reimbursement     .47% (d)          .47%        .47%        .47%        .48%        .48%   
Net investment income     1.79% (d)          1.98%        1.91%        1.73%        1.79%        2.48%   
Portfolio turnover rate     2% (e)          3%        4%        5%        5%        6%   

 

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

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

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

(d) Annualized.

(e) Not annualized.

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     47   


n    MAIL   n    TELEPHONE   n    WEBSITE

Gateway Center Three

100 Mulberry Street

Newark, NJ 07102

  (800) 225-1852   www.prudentialfunds.com

 

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

 

TRUSTEES
Ellen S. Alberding Kevin J. Bannon Scott E. Benjamin Linda W. Bynoe Keith F. Hartstein  Michael S. Hyland  Douglas H. McCorkindale Stephen P. Munn Stuart S. Parker James E. Quinn Richard A. Redeker Robin B. Smith Stephen G. Stoneburn

 

OFFICERS
Stuart S. Parker, President Scott E. Benjamin, Vice President M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer Raymond A. O’Hara, Chief Legal Officer Deborah A. Docs, Secretary Lee D. Augsburger, Chief Compliance Officer Theresa C. Thompson, Deputy Chief Compliance Officer Richard W. Kinville, Anti-Money Laundering Compliance Officer Jonathan D. Shain, Assistant Secretary Claudia DiGiacomo, Assistant Secretary Amanda S. Ryan, Assistant Secretary Andrew R. French, Assistant Secretary Peter Parrella, Assistant Treasurer Lana Lomuti, Assistant Treasurer Linda McMullin, Assistant Treasurer

 

MANAGER   Prudential Investments LLC    Gateway Center Three

100 Mulberry Street
Newark, NJ 07102

 

INVESTMENT SUBADVISER   Quantitative Management

Associates LLC

   Gateway Center Two

100 Mulberry Street
Newark, NJ 07102

 

DISTRIBUTOR   Prudential Investment
Management Services LLC
   Gateway Center Three

100 Mulberry Street
Newark, NJ 07102

 

CUSTODIAN   The Bank of New York Mellon    One Wall Street
New York, NY 10286

 

TRANSFER AGENT   Prudential Mutual Fund
Services LLC
   PO Box 9658

Providence, RI 02940

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   KPMG LLP    345 Park Avenue

New York, NY 10154

 

FUND COUNSEL   Willkie Farr & Gallagher LLP    787 Seventh Avenue

New York, NY 10019


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

 

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

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Prudential Stock Index Fund, Prudential Investments, Attn: Board of Trustees, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO SCHEDULE
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month.

 

Mutual Funds:

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


LOGO

 

 

PRUDENTIAL STOCK INDEX FUND

 

    SHARE CLASS   A   C   I   Z
  NASDAQ   PSIAX   PSICX   PDSIX   PSIFX
  CUSIP   74441F108   74441F306   74441F405   74441F504

 

MF174E2    0261527-00001-00


Item 2 –   Code of Ethics – Not required, as this is not an annual filing.
Item 3 –   Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4 –   Principal Accountant Fees and Services – Not required, as this is not an annual filing.
Item 5 –   Audit Committee of Listed Registrants – Not applicable.
Item 6 –   Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 –   Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 –   Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 –   Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 –   Submission of Matters to a Vote of Security Holders – Not applicable.
Item 11 –   Controls and Procedures
(a)   It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b)   There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 –   Exhibits
(a)   (1) Code of Ethics – Not required, as this is not an annual filing.
  (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.
  (3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
(b)   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.


SIGNATURES

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

Registrant: Prudential Investment Portfolios 8

By:  

/s/ Deborah A. Docs

  Deborah A. Docs
  Secretary
Date:   May 20, 2014

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

 

By:  

/s/ Stuart S. Parker

  Stuart S. Parker
  President and Principal Executive Officer
Date:   May 20, 2014
By:  

/s/ M. Sadiq Peshimam

  M. Sadiq Peshimam
  Treasurer and Principal Financial and Accounting Officer
Date:   May 20, 2014