N-CSRS 1 d910481dncsrs.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: 9/30/2015
Date of reporting period: 3/31/2015

 

 

 


Item 1

– Reports to Stockholders


LOGO

 

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

 

PRUDENTIAL STOCK INDEX FUND

 

SEMIANNUAL REPORT · MARCH 31, 2015

 

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, 2015, 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. © 2015 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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  LOGO


 

May 15, 2015

 

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, 2015.

 

Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.

 

Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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

 

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 3/31/15

  

    Six Months     One Year     Five Years     Ten Years  

Class A

    5.64     12.14     91.72     106.02

Class C

    5.33        11.46        86.04        92.23   

Class I

    5.83        12.56        95.08        113.40   

Class Z

    5.82        12.47        94.57        112.04   

S&P 500 Index

    5.92        12.71        96.40        115.97   

Lipper S&P 500 Index Objective Funds Average

    5.53        12.01        90.97        105.77   
       

Average Annual Total Returns (With Sales Charges) as of 3/31/15

  

          One Year     Five Years     Ten Years  

Class A

            8.50     13.15     7.14

Class C

            10.46        13.22        6.75   

Class I

            12.56        14.30        7.87   

Class Z

            12.47        14.24        7.81   

S&P 500 Index

            12.71        14.45        8.00   

Lipper S&P 500 Index Objective Funds Average

            12.01        13.81        7.48   

 

Source: Prudential Investments LLC and Lipper Inc.

 

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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

 

Benchmark Definitions

 

S&P 500 Index

The S&P 500 Index is an unmanaged index of 500 stocks of large US 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.

 

Prudential Stock Index Fund     3   


Your Fund’s Performance (continued)

 

 

S&P 500 Index as of 3/31/15

 

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, or 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.

 

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Fees and Expenses (Unaudited)

 

 

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

 

The example is based on an investment of $1,000 invested on October 1, 2014, at the beginning of the period, and held through the six-month period ended March 31, 2015. 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

 

Prudential Stock Index Fund     5   


Fees and Expenses (continued)

 

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, 2014
    Ending Account
Value
March 31, 2015
    Annualized
Expense Ratio
Based on the
Six-Month Period
    Expenses Paid
During  the
Six-Month Period*
 
         
Class A   Actual   $ 1,000.00      $ 1,056.40        0.53   $ 2.72   
    Hypothetical   $ 1,000.00      $ 1,022.29        0.53   $ 2.67   
         
Class C   Actual   $ 1,000.00      $ 1,053.30        1.16   $ 5.94   
    Hypothetical   $ 1,000.00      $ 1,019.15        1.16   $ 5.84   
         
Class I   Actual   $ 1,000.00      $ 1,058.30        0.20   $ 1.03   
    Hypothetical   $ 1,000.00      $ 1,023.93        0.20   $ 1.01   
         
Class Z   Actual   $ 1,000.00      $ 1,058.20        0.26   $ 1.33   
    Hypothetical   $ 1,000.00      $ 1,023.64        0.26   $ 1.31   

*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, 2015, and divided by the 365 days in the Fund’s fiscal year ending September 30, 2015 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

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The Fund’s annual expense ratios for the six-month period ended March 31, 2015, are as follows:

 

Class    Gross Operating Expenses     Net Operating Expenses  

A

     0.60     0.53

C

     1.23        1.16   

I

     0.27        0.20   

Z

     0.33        0.26   

 

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.

 

Prudential Stock Index Fund     7   


Portfolio of Investments

 

as of March 31, 2015 (Unaudited)

 

Description    Shares      Value (Note 1)  

LONG-TERM INVESTMENTS    94.9%

     

COMMON STOCKS    94.3%

     

Aerospace & Defense    2.6%

                 

Boeing Co. (The)

     35,184       $ 5,280,415   

General Dynamics Corp.

     16,712         2,268,320   

Honeywell International, Inc.

     41,515         4,330,429   

L-3 Communications Holdings, Inc.

     4,600         578,634   

Lockheed Martin Corp.

     14,456         2,933,990   

Northrop Grumman Corp.

     10,748         1,729,998   

Precision Castparts Corp.

     7,580         1,591,800   

Raytheon Co.

     16,444         1,796,507   

Rockwell Collins, Inc.

     7,463         720,553   

Textron, Inc.

     14,134         626,560   

United Technologies Corp.

     44,740         5,243,528   
     

 

 

 
        27,100,734   

Air Freight & Logistics    0.7%

                 

C.H. Robinson Worldwide, Inc.(a)

     7,700         563,794   

Expeditors International of Washington, Inc.

     10,500         505,890   

FedEx Corp.

     14,116         2,335,492   

United Parcel Service, Inc. (Class B Stock)

     37,100         3,596,474   
     

 

 

 
        7,001,650   

Airlines    0.5%

                 

American Airlines Group, Inc.

     36,900         1,947,582   

Delta Air Lines, Inc.

     44,800         2,014,208   

Southwest Airlines Co.

     36,474         1,615,798   
     

 

 

 
        5,577,588   

Auto Components    0.4%

                 

BorgWarner, Inc.

     11,900         719,712   

Delphi Automotive PLC (United Kingdom)

     16,100         1,283,814   

Goodyear Tire & Rubber Co. (The)

     13,771         372,919   

Johnson Controls, Inc.

     35,556         1,793,444   
     

 

 

 
        4,169,889   

Automobiles    0.6%

                 

Ford Motor Co.

     208,738         3,369,031   

General Motors Co.

     71,900         2,696,250   

Harley-Davidson, Inc.

     11,300         686,362   
     

 

 

 
        6,751,643   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     9   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Banks    5.4%

                 

Bank of America Corp.

     560,995       $ 8,633,713   

BB&T Corp.

     38,258         1,491,679   

Citigroup, Inc.

     162,415         8,367,621   

Comerica, Inc.(a)

     9,261         417,949   

Fifth Third Bancorp

     42,673         804,386   

Huntington Bancshares, Inc.

     39,829         440,110   

JPMorgan Chase & Co.

     199,593         12,091,344   

KeyCorp

     45,035         637,696   

M&T Bank Corp.(a)

     7,200         914,400   

PNC Financial Services Group, Inc. (The)

     28,302         2,638,879   

Regions Financial Corp.

     71,574         676,374   

SunTrust Banks, Inc.

     27,683         1,137,495   

U.S. Bancorp

     94,895         4,144,065   

Wells Fargo & Co.

     250,516         13,628,070   

Zions Bancorporation

     9,000         243,000   
     

 

 

 
        56,266,781   

Beverages    2.0%

                 

Brown-Forman Corp. (Class B Stock)

     8,530         770,685   

Coca-Cola Co. (The)

     210,364         8,530,260   

Coca-Cola Enterprises, Inc.

     11,200         495,040   

Constellation Brands, Inc. (Class A Stock)*

     9,100         1,057,511   

Dr. Pepper Snapple Group, Inc.

     10,400         816,192   

Molson Coors Brewing Co. (Class B Stock)

     8,894         662,158   

Monster Beverage Corp.*

     8,050         1,114,080   

PepsiCo, Inc.

     79,451         7,597,105   
     

 

 

 
        21,043,031   

Biotechnology    2.9%

                 

Alexion Pharmaceuticals, Inc.*

     11,000         1,906,300   

Amgen, Inc.

     40,846         6,529,233   

Biogen, Inc.*

     12,570         5,307,557   

Celgene Corp.*

     42,900         4,945,512   

Gilead Sciences, Inc.*

     80,100         7,860,213   

Regeneron Pharmaceuticals, Inc.*

     4,050         1,828,494   

Vertex Pharmaceuticals, Inc.*

     13,100         1,545,407   
     

 

 

 
        29,922,716   

 

See Notes to Financial Statements.

 

10  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Building Products    0.1%

                 

Allegion PLC

     5,233       $ 320,103   

Masco Corp.

     18,426         491,974   
     

 

 

 
        812,077   

Capital Markets    2.1%

                 

Affiliated Managers Group, Inc.*

     3,200         687,296   

Ameriprise Financial, Inc.

     9,971         1,304,606   

Bank of New York Mellon Corp. (The)

     59,838         2,407,881   

BlackRock, Inc.

     6,900         2,524,296   

Charles Schwab Corp. (The)

     60,911         1,854,131   

E*TRADE Financial Corp.*

     13,720         391,775   

Franklin Resources, Inc.

     21,142         1,085,007   

Goldman Sachs Group, Inc. (The)

     21,800         4,097,746   

Invesco Ltd.

     22,900         908,901   

Legg Mason, Inc.

     5,300         292,560   

Morgan Stanley

     81,536         2,910,020   

Northern Trust Corp.

     11,962         833,153   

State Street Corp.

     22,462         1,651,631   

T. Rowe Price Group, Inc.

     13,600         1,101,328   
     

 

 

 
        22,050,331   

Chemicals    2.3%

                 

Air Products & Chemicals, Inc.

     10,232         1,547,897   

Airgas, Inc.

     3,900         413,829   

CF Industries Holdings, Inc.

     2,700         765,936   

Dow Chemical Co. (The)

     58,736         2,818,153   

E.I. du Pont de Nemours & Co.

     48,144         3,440,852   

Eastman Chemical Co.

     7,686         532,332   

Ecolab, Inc.

     14,582         1,667,889   

FMC Corp.

     6,700         383,575   

International Flavors & Fragrances, Inc.

     4,675         548,845   

LyondellBasell Industries NV (Class A Stock)

     22,100         1,940,380   

Monsanto Co.

     25,684         2,890,477   

Mosaic Co. (The)

     17,000         783,020   

PPG Industries, Inc.

     7,274         1,640,578   

Praxair, Inc.

     15,608         1,884,510   

Sherwin-Williams Co. (The)

     4,516         1,284,802   

Sigma-Aldrich Corp.

     6,582         909,962   
     

 

 

 
        23,453,037   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     11   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Commercial Services & Supplies    0.4%

                 

ADT Corp. (The)(a)

     8,300       $ 344,616   

Cintas Corp.

     5,400         440,802   

Pitney Bowes, Inc.

     9,625         224,455   

Republic Services, Inc.

     13,775         558,714   

Stericycle, Inc.*

     4,500         631,935   

Tyco International PLC

     22,000         947,320   

Waste Management, Inc.

     22,713         1,231,726   
     

 

 

 
        4,379,568   

Communications Equipment    1.5%

                 

Cisco Systems, Inc.

     271,344         7,468,743   

F5 Networks, Inc.*

     4,200         482,748   

Harris Corp.

     5,700         448,932   

Juniper Networks, Inc.(a)

     22,100         499,018   

Motorola Solutions, Inc.

     11,416         761,105   

QUALCOMM, Inc.

     88,200         6,115,788   
     

 

 

 
        15,776,334   

Construction & Engineering    0.1%

                 

Fluor Corp.

     8,074         461,510   

Jacobs Engineering Group, Inc.*(a)

     6,700         302,572   

Quanta Services, Inc.*

     10,700         305,271   
     

 

 

 
        1,069,353   

Construction Materials    0.1%

                 

Martin Marietta Materials, Inc.

     3,600         503,280   

Vulcan Materials Co.

     6,900         581,670   
     

 

 

 
        1,084,950   

Consumer Finance    0.8%

                 

American Express Co.

     47,659         3,723,121   

Capital One Financial Corp.

     29,866         2,354,038   

Discover Financial Services

     24,018         1,353,414   

Navient Corp.

     21,792         443,032   
     

 

 

 
        7,873,605   

Containers & Packaging    0.2%

                 

Avery Dennison Corp.

     4,768         252,275   

Ball Corp.

     7,264         513,129   

MeadWestvaco Corp.

     8,735         435,615   

 

See Notes to Financial Statements.

 

12  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Containers & Packaging (cont’d.)

                 

Owens-Illinois, Inc.*

     8,600       $ 200,552   

Sealed Air Corp.

     11,036         502,800   
     

 

 

 
        1,904,371   

Distributors    0.1%

                 

Genuine Parts Co.

     8,199         764,065   

Diversified Consumer Services

                 

H&R Block, Inc.

     13,620         436,793   

Diversified Financial Services    2.0%

                 

Berkshire Hathaway, Inc. (Class B Stock)*

     97,700         14,100,064   

CME Group, Inc.

     17,200         1,629,012   

Intercontinental Exchange, Inc.

     6,188         1,443,475   

Leucadia National Corp.

     14,900         332,121   

McGraw Hill Financial, Inc.

     14,700         1,519,980   

Moody’s Corp.

     9,676         1,004,369   

NASDAQ OMX Group, Inc. (The)

     5,900         300,546   
     

 

 

 
        20,329,567   

Diversified Telecommunication Services    2.1%

                 

AT&T, Inc.

     277,831         9,071,182   

CenturyLink, Inc.

     30,208         1,043,686   

Frontier Communications Corp.

     47,260         333,183   

Level 3 Communications, Inc.*

     14,400         775,296   

Verizon Communications, Inc.

     221,433         10,768,287   

Windstream Holdings, Inc.

     27,577         204,070   
     

 

 

 
        22,195,704   

Electric Utilities    1.6%

                 

American Electric Power Co., Inc.

     26,391         1,484,494   

Duke Energy Corp.

     37,939         2,912,957   

Edison International

     17,162         1,072,110   

Entergy Corp.

     10,015         776,062   

Eversource Energy

     17,300         873,996   

Exelon Corp.

     44,612         1,499,409   

FirstEnergy Corp.

     22,577         791,550   

NextEra Energy, Inc.

     23,272         2,421,452   

Pepco Holdings, Inc.

     11,600         311,228   

Pinnacle West Capital Corp.

     5,700         363,375   

PPL Corp.

     35,652         1,200,046   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     13   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Electric Utilities (cont’d.)

                 

Southern Co. (The)

     47,815       $ 2,117,248   

Xcel Energy, Inc.

     25,683         894,025   
     

 

 

 
        16,717,952   

Electrical Equipment    0.5%

                 

AMETEK, Inc.

     12,800         672,512   

Eaton Corp. PLC

     25,093         1,704,819   

Emerson Electric Co.(a)

     37,250         2,109,095   

Rockwell Automation, Inc.(a)

     7,163         830,836   
     

 

 

 
        5,317,262   

Electronic Equipment, Instruments & Components    0.4%

                 

Amphenol Corp. (Class A Stock)

     16,900         995,917   

Corning, Inc.

     67,997         1,542,172   

FLIR Systems, Inc.

     6,300         197,064   

TE Connectivity Ltd. (Switzerland)

     21,400         1,532,668   
     

 

 

 
        4,267,821   

Energy Equipment & Services    1.2%

                 

Baker Hughes, Inc.

     23,045         1,465,201   

Cameron International Corp.*

     10,100         455,712   

Diamond Offshore Drilling, Inc.(a)

     2,800         75,012   

Ensco PLC (Class A Stock)

     11,500         242,305   

FMC Technologies, Inc.*

     12,100         447,821   

Halliburton Co.

     44,522         1,953,626   

Helmerich & Payne, Inc.(a)

     5,500         374,385   

National Oilwell Varco, Inc.

     22,400         1,119,776   

Noble Corp. PLC(a)

     13,600         194,208   

Schlumberger Ltd.

     68,341         5,702,373   

Transocean Ltd.(a)

     17,000         249,390   
     

 

 

 
        12,279,809   

Food & Staples Retailing    2.4%

                 

Costco Wholesale Corp.

     23,508         3,561,345   

CVS Health Corp.

     60,899         6,285,386   

Kroger Co. (The)

     26,034         1,995,766   

Sysco Corp.

     30,880         1,165,102   

Wal-Mart Stores, Inc.

     84,626         6,960,489   

Walgreens Boots Alliance, Inc.

     46,578         3,944,225   

Whole Foods Market, Inc.

     19,200         999,936   
     

 

 

 
        24,912,249   

 

See Notes to Financial Statements.

 

14  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Food Products    1.6%

                 

Archer-Daniels-Midland Co.

     34,659       $ 1,642,837   

Campbell Soup Co.

     9,647         449,068   

ConAgra Foods, Inc.

     22,843         834,455   

General Mills, Inc.

     32,144         1,819,350   

Hershey Co. (The)

     7,916         798,804   

Hormel Foods Corp.

     7,500         426,375   

J.M. Smucker Co. (The)

     5,500         636,515   

Kellogg Co.

     13,670         901,536   

Keurig Green Mountain, Inc.

     6,700         748,591   

Kraft Foods Group, Inc.

     31,455         2,740,202   

McCormick & Co., Inc.

     7,000         539,770   

Mead Johnson Nutrition Co.

     10,865         1,092,258   

Mondelez International, Inc. (Class A Stock)

     89,266         3,221,610   

Tyson Foods, Inc. (Class A Stock)

     14,800         566,840   
     

 

 

 
        16,418,211   

Gas Utilities

                 

AGL Resources, Inc.

     6,430         319,250   

Health Care Equipment & Supplies    2.1%

                 

Abbott Laboratories

     80,274         3,719,094   

Baxter International, Inc.

     28,574         1,957,319   

Becton, Dickinson and Co.

     11,081         1,591,121   

Boston Scientific Corp.*

     69,172         1,227,803   

C.R. Bard, Inc.

     4,412         738,348   

DENTSPLY International, Inc.

     7,200         366,408   

Edwards Lifesciences Corp.*

     5,800         826,268   

Intuitive Surgical, Inc.*

     2,050         1,035,311   

Medtronic PLC

     76,615         5,975,204   

St. Jude Medical, Inc.

     15,164         991,726   

Stryker Corp.

     16,100         1,485,225   

Varian Medical Systems, Inc.*

     5,200         489,268   

Zimmer Holdings, Inc.

     9,011         1,058,973   
     

 

 

 
        21,462,068   

Health Care Providers & Services    2.7%

                 

Aetna, Inc.

     18,944         2,018,104   

AmerisourceBergen Corp.

     11,100         1,261,737   

Anthem, Inc.

     14,400         2,223,504   

Cardinal Health, Inc.

     17,673         1,595,342   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     15   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Health Care Providers & Services (cont’d.)

                 

Cigna Corp.

     14,291       $ 1,849,827   

DaVita HealthCare Partners, Inc.*

     9,100         739,648   

Express Scripts Holding Co.*

     39,270         3,407,458   

HCA Holdings, Inc.*

     16,300         1,226,249   

Henry Schein, Inc.*

     4,300         600,366   

Humana, Inc.

     8,410         1,497,148   

Laboratory Corp. of America Holdings*

     5,600         706,104   

McKesson Corp.

     12,476         2,822,071   

Patterson Cos., Inc.(a)

     4,400         214,676   

Quest Diagnostics, Inc.

     7,700         591,745   

Tenet Healthcare Corp.*(a)

     4,743         234,826   

UnitedHealth Group, Inc.

     51,148         6,050,297   

Universal Health Services, Inc. (Class B Stock)

     5,000         588,550   
     

 

 

 
        27,627,652   

Health Care Technology    0.1%

                 

Cerner Corp.*

     16,000         1,172,160   

Hotels, Restaurants & Leisure    1.6%

                 

Carnival Corp.

     23,900         1,143,376   

Chipotle Mexican Grill, Inc.*

     1,660         1,079,897   

Darden Restaurants, Inc.

     6,753         468,253   

Marriott International, Inc. (Class A Stock)

     11,170         897,174   

McDonald’s Corp.

     51,930         5,060,059   

Royal Caribbean Cruises Ltd.

     9,200         753,020   

Starbucks Corp.

     39,600         3,750,120   

Starwood Hotels & Resorts Worldwide, Inc.

     9,600         801,600   

Wyndham Worldwide Corp.

     6,651         601,716   

Wynn Resorts Ltd.

     4,600         579,048   

Yum! Brands, Inc.

     23,664         1,862,830   
     

 

 

 
        16,997,093   

Household Durables    0.4%

                 

D.R. Horton, Inc.

     17,800         506,944   

Garmin Ltd.(a)

     6,200         294,624   

Harman International Industries, Inc.

     3,700         494,431   

Leggett & Platt, Inc.

     7,400         341,066   

Lennar Corp. (Class A Stock)(a)

     9,100         471,471   

Mohawk Industries, Inc.*

     3,300         612,975   

Newell Rubbermaid, Inc.

     13,627         532,407   

 

See Notes to Financial Statements.

 

16  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Household Durables (cont’d.)

                 

PulteGroup, Inc.

     15,711       $ 349,256   

Whirlpool Corp.

     4,185         845,621   
     

 

 

 
        4,448,795   

Household Products    1.7%

                 

Clorox Co. (The)

     7,432         820,418   

Colgate-Palmolive Co.

     45,360         3,145,262   

Kimberly-Clark Corp.

     20,016         2,143,914   

Procter & Gamble Co. (The)

     144,623         11,850,409   
     

 

 

 
        17,960,003   

Independent Power & Renewable Electricity Producers    0.1%

                 

AES Corp.

     34,800         447,180   

NRG Energy, Inc.

     17,000         428,230   
     

 

 

 
        875,410   

Industrial Conglomerates    2.2%

                 

3M Co.

     34,198         5,640,960   

Danaher Corp.

     32,600         2,767,740   

General Electric Co.

     537,572         13,337,161   

Roper Industries, Inc.

     5,400         928,800   
     

 

 

 
        22,674,661   

Insurance    2.5%

                 

ACE Ltd.

     17,900         1,995,671   

Aflac, Inc.

     23,900         1,529,839   

Allstate Corp. (The)

     22,308         1,587,660   

American International Group, Inc.

     74,301         4,070,952   

Aon PLC

     15,089         1,450,355   

Assurant, Inc.

     3,900         239,499   

Chubb Corp. (The)

     12,768         1,290,845   

Cincinnati Financial Corp.

     7,507         399,973   

Genworth Financial, Inc. (Class A Stock)*

     23,300         170,323   

Hartford Financial Services Group, Inc. (The)

     22,753         951,531   

Lincoln National Corp.

     14,151         813,116   

Loews Corp.

     15,117         617,227   

Marsh & McLennan Cos., Inc.

     28,640         1,606,418   

MetLife, Inc.

     60,700         3,068,385   

Principal Financial Group, Inc.

     14,100         724,317   

Progressive Corp. (The)

     27,716         753,875   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     17   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Insurance (cont’d.)

                 

Prudential Financial, Inc.(b)

     24,500       $ 1,967,595   

Torchmark Corp.

     6,933         380,760   

Travelers Cos., Inc. (The)

     17,511         1,893,464   

Unum Group

     12,626         425,875   

XL Group PLC (Ireland)

     13,100         482,080   
     

 

 

 
        26,419,760   

Internet & Catalog Retail    1.3%

                 

Amazon.com, Inc.*

     20,260         7,538,746   

Expedia, Inc.

     5,300         498,889   

Netflix, Inc.*

     3,200         1,333,408   

Priceline Group, Inc. (The)*

     2,800         3,259,620   

TripAdvisor, Inc.*

     6,300         523,971   
     

 

 

 
        13,154,634   

Internet Software & Services    3.2%

                 

Akamai Technologies, Inc.*

     9,900         703,346   

eBay, Inc.*

     59,800         3,449,264   

Equinix, Inc.

     3,000         698,550   

Facebook, Inc. (Class A Stock)*

     112,100         9,216,301   

Google, Inc. (Class A Stock)*

     15,280         8,475,816   

Google, Inc. (Class C Stock)*

     15,240         8,351,520   

VeriSign, Inc.*(a)

     5,700         381,729   

Yahoo!, Inc.*

     48,100         2,137,324   
     

 

 

 
        33,413,850   

IT Services    3.2%

                 

Accenture PLC (Class A Stock)

     33,200         3,110,508   

Alliance Data Systems Corp.*

     3,410         1,010,213   

Automatic Data Processing, Inc.

     25,778         2,207,628   

Cognizant Technology Solutions Corp. (Class A Stock)*

     32,800         2,046,392   

Computer Sciences Corp.

     7,251         473,345   

Fidelity National Information Services, Inc.

     15,400         1,048,124   

Fiserv, Inc.*

     12,900         1,024,260   

International Business Machines Corp.

     49,134         7,886,007   

MasterCard, Inc. (Class A Stock)

     52,200         4,509,558   

Paychex, Inc.(a)

     17,625         874,464   

Teradata Corp.*(a)

     7,600         335,464   

Total System Services, Inc.

     7,971         304,094   

Visa, Inc. (Class A Stock)(a)

     104,120         6,810,489   

 

See Notes to Financial Statements.

 

18  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

IT Services (cont’d.)

                 

Western Union Co. (The)(a)

     25,452       $ 529,656   

Xerox Corp.

     54,600         701,610   
     

 

 

 
        32,871,812   

Leisure Products    0.1%

                 

Hasbro, Inc.

     5,954         376,531   

Mattel, Inc.

     17,013         388,747   
     

 

 

 
        765,278   

Life Sciences Tools & Services    0.4%

                 

Agilent Technologies, Inc.

     18,098         751,972   

PerkinElmer, Inc.

     6,170         315,534   

Thermo Fisher Scientific, Inc.

     21,702         2,915,446   

Waters Corp.*

     4,500         559,440   
     

 

 

 
        4,542,392   

Machinery    1.4%

                 

Caterpillar, Inc.

     32,056         2,565,442   

Cummins, Inc.

     9,016         1,249,978   

Deere & Co.

     18,680         1,638,049   

Dover Corp.(a)

     9,162         633,277   

Flowserve Corp.

     6,900         389,781   

Illinois Tool Works, Inc.

     19,336         1,878,299   

Ingersoll-Rand PLC

     13,800         939,504   

Joy Global, Inc.

     5,300         207,654   

PACCAR, Inc.

     18,664         1,178,445   

Pall Corp.

     5,604         562,586   

Parker-Hannifin Corp.

     7,938         942,876   

Pentair PLC (United Kingdom)(a)

     9,946         625,504   

Snap-on, Inc.

     3,242         476,768   

Stanley Black & Decker, Inc.

     8,188         780,808   

Xylem, Inc.

     9,300         325,686   
     

 

 

 
        14,394,657   

Media    3.3%

                 

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

     9,700         177,510   

CBS Corp. (Class B Stock)

     25,576         1,550,673   

Comcast Corp. (Class A Stock)

     136,685         7,718,602   

DIRECTV*(a)

     27,200         2,314,720   

Discovery Communications, Inc. (Class A Stock)*(a)

     7,400         227,624   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     19   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Media (cont’d.)

                 

Discovery Communications, Inc. (Class C Stock)*

     13,900       $ 409,702   

Gannett Co., Inc.

     11,589         429,720   

Interpublic Group of Cos., Inc. (The)

     20,088         444,347   

News Corp. (Class A Stock)*

     24,375         390,244   

Omnicom Group, Inc.(a)

     13,034         1,016,391   

Scripps Networks Interactive, Inc. (Class A Stock)(a)

     5,200         356,512   

Time Warner Cable, Inc.

     15,081         2,260,340   

Time Warner, Inc.

     44,774         3,780,716   

Twenty-First Century Fox, Inc. (Class A Stock)

     98,400         3,329,856   

Viacom, Inc. (Class B Stock)

     19,476         1,330,211   

Walt Disney Co. (The)

     83,713         8,780,657   
     

 

 

 
        34,517,825   

Metals & Mining    0.3%

                 

Alcoa, Inc.

     65,444         845,537   

Allegheny Technologies, Inc.

     5,218         156,592   

Freeport-McMoRan, Inc.

     54,192         1,026,938   

Newmont Mining Corp.

     24,997         542,685   

Nucor Corp.

     16,712         794,321   
     

 

 

 
        3,366,073   

Multi-Utilities    1.1%

                 

Ameren Corp.

     12,469         526,192   

CenterPoint Energy, Inc.

     22,179         452,673   

CMS Energy Corp.

     14,300         499,213   

Consolidated Edison, Inc.

     15,751         960,811   

Dominion Resources, Inc.

     31,304         2,218,515   

DTE Energy Co.

     9,287         749,368   

Integrys Energy Group, Inc.

     4,108         295,858   

NiSource, Inc.

     16,900         746,304   

PG&E Corp.

     26,153         1,387,940   

Public Service Enterprise Group, Inc.

     26,894         1,127,396   

SCANA Corp.

     7,200         395,928   

Sempra Energy

     12,198         1,329,826   

TECO Energy, Inc.

     10,800         209,520   

Wisconsin Energy Corp.

     11,500         569,250   
     

 

 

 
        11,468,794   

Multiline Retail    0.8%

                 

Dollar General Corp.*

     16,000         1,206,080   

 

See Notes to Financial Statements.

 

20  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Multiline Retail (cont’d.)

                 

Dollar Tree, Inc.*

     10,800       $ 876,366   

Family Dollar Stores, Inc.

     5,000         396,200   

Kohl’s Corp.

     11,000         860,750   

Macy’s, Inc.(a)

     18,282         1,186,684   

Nordstrom, Inc.

     7,300         586,336   

Target Corp.

     34,182         2,805,317   
     

 

 

 
        7,917,733   

Oil, Gas & Consumable Fuels    6.4%

                 

Anadarko Petroleum Corp.

     27,136         2,247,132   

Apache Corp.

     20,348         1,227,595   

Cabot Oil & Gas Corp.

     20,800         614,224   

Chesapeake Energy Corp.(a)

     26,100         369,576   

Chevron Corp.

     100,792         10,581,144   

Cimarex Energy Co.

     4,900         563,941   

ConocoPhillips

     65,557         4,081,579   

CONSOL Energy, Inc.

     11,200         312,368   

Devon Energy Corp.

     20,800         1,254,448   

EOG Resources, Inc.

     29,300         2,686,517   

EQT Corp.

     7,900         654,673   

Exxon Mobil Corp.

     225,052         19,129,420   

Hess Corp.

     13,334         904,979   

Kinder Morgan, Inc.

     90,180         3,792,971   

Marathon Oil Corp.

     35,778         934,163   

Marathon Petroleum Corp.

     14,989         1,534,724   

Murphy Oil Corp.

     8,600         400,760   

Newfield Exploration Co.*

     8,500         298,265   

Noble Energy, Inc.

     20,500         1,002,450   

Occidental Petroleum Corp.

     40,976         2,991,248   

ONEOK, Inc.

     11,100         535,464   

Phillips 66

     29,228         2,297,321   

Pioneer Natural Resources Co.

     8,000         1,308,080   

QEP Resources, Inc.

     9,200         191,820   

Range Resources Corp.

     8,400         437,136   

Southwestern Energy Co.*(a)

     18,800         435,972   

Spectra Energy Corp.

     35,284         1,276,222   

Tesoro Corp.

     6,800         620,772   

Valero Energy Corp.

     27,700         1,762,274   

Williams Cos., Inc. (The)

     35,692         1,805,658   
     

 

 

 
        66,252,896   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     21   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Paper & Forest Products    0.1%

                 

International Paper Co.

     22,284       $ 1,236,539   

Personal Products    0.1%

                 

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

     12,300         1,022,868   

Pharmaceuticals    6.0%

                 

AbbVie, Inc.

     84,574         4,950,962   

Actavis PLC*

     20,875         6,212,817   

Bristol-Myers Squibb Co.

     88,979         5,739,146   

Eli Lilly & Co.

     52,497         3,813,907   

Endo International PLC*(a)

     8,800         789,360   

Hospira, Inc.*

     9,307         817,527   

Johnson & Johnson

     149,069         14,996,341   

Mallinckrodt PLC*

     6,300         797,895   

Merck & Co., Inc.

     151,333         8,698,621   

Mylan NV*

     19,900         1,181,065   

Perrigo Co. PLC

     7,700         1,274,735   

Pfizer, Inc.

     329,823         11,474,542   

Zoetis, Inc.

     26,300         1,217,427   
     

 

 

 
        61,964,345   

Professional Services    0.2%

                 

Dun & Bradstreet Corp. (The)

     1,900         243,884   

Equifax, Inc.

     6,530         607,290   

Nielsen NV

     16,500         735,405   

Robert Half International, Inc.

     6,900         417,588   
     

 

 

 
        2,004,167   

Real Estate Investment Trusts (REITs)    2.4%

                 

American Tower Corp.

     22,300         2,099,545   

Apartment Investment & Management Co. (Class A Stock)

     8,180         321,965   

AvalonBay Communities, Inc.

     7,111         1,239,092   

Boston Properties, Inc.

     8,400         1,180,032   

Crown Castle International Corp.

     17,800         1,469,212   

Equity Residential

     19,600         1,526,056   

Essex Property Trust, Inc.

     3,400         781,660   

General Growth Properties, Inc.

     33,300         984,015   

HCP, Inc.

     24,000         1,037,040   

Health Care REIT, Inc.

     18,300         1,415,688   

Host Hotels & Resorts, Inc.

     39,036         787,746   

 

See Notes to Financial Statements.

 

22  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Real Estate Investment Trusts (REITs) (cont’d.)

                 

Iron Mountain, Inc.

     9,805       $ 357,686   

Kimco Realty Corp.(a)

     20,700         555,795   

Macerich Co. (The)

     7,400         624,042   

Plum Creek Timber Co., Inc.

     8,800         382,360   

Prologis, Inc.

     26,937         1,173,376   

Public Storage

     7,700         1,517,978   

Simon Property Group, Inc.

     16,589         3,245,472   

SL Green Realty Corp.

     4,600         590,548   

Ventas, Inc.

     17,333         1,265,656   

Vornado Realty Trust

     9,384         1,051,008   

Weyerhaeuser Co.

     27,359         906,951   
     

 

 

 
        24,512,923   

Real Estate Management & Development    0.1%

                 

CBRE Group, Inc. (Class A Stock)*

     14,600         565,166   

Road & Rail    0.9%

                 

CSX Corp.

     52,218         1,729,460   

Kansas City Southern

     6,200         632,896   

Norfolk Southern Corp.(a)

     16,711         1,719,896   

Ryder System, Inc.

     2,821         267,685   

Union Pacific Corp.

     47,216         5,113,965   
     

 

 

 
        9,463,902   

Semiconductors & Semiconductor Equipment    2.3%

                 

Altera Corp.

     15,300         656,523   

Analog Devices, Inc.

     16,500         1,039,500   

Applied Materials, Inc.

     62,888         1,418,753   

Avago Technologies Ltd. (Singapore)

     14,000         1,777,720   

Broadcom Corp. (Class A Stock)

     29,200         1,264,214   

First Solar, Inc.*

     3,800         227,202   

Intel Corp.

     255,788         7,998,491   

KLA-Tencor Corp.

     8,420         490,802   

Lam Research Corp.

     8,862         622,422   

Linear Technology Corp.

     12,700         594,360   

Microchip Technology, Inc.

     10,700         523,230   

Micron Technology, Inc.*(a)

     57,616         1,563,122   

NVIDIA Corp.(a)

     26,800         560,790   

Skyworks Solutions, Inc.

     10,300         1,012,387   

Texas Instruments, Inc.

     56,052         3,205,334   

Xilinx, Inc.

     13,500         571,050   
     

 

 

 
        23,525,900   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     23   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Software    3.4%

                 

Adobe Systems, Inc.*

     25,240       $ 1,866,246   

Autodesk, Inc.*

     12,120         710,717   

CA, Inc.

     17,158         559,522   

Citrix Systems, Inc.*

     8,200         523,734   

Electronic Arts, Inc.*

     16,400         964,566   

Intuit, Inc.

     15,500         1,502,880   

Microsoft Corp.

     439,312         17,860,229   

Oracle Corp.

     171,640         7,406,266   

Red Hat, Inc.*

     10,400         787,800   

salesforce.com, inc.*

     31,400         2,097,834   

Symantec Corp.

     35,017         818,172   
     

 

 

 
        35,097,966   

Specialty Retail    2.3%

                 

AutoNation, Inc.*

     3,923         252,367   

AutoZone, Inc.*

     1,790         1,221,066   

Bed Bath & Beyond, Inc.*

     10,500         806,138   

Best Buy Co., Inc.

     15,800         597,082   

CarMax, Inc.*

     11,700         807,417   

GameStop Corp. (Class A Stock)(a)

     5,600         212,576   

Gap, Inc. (The)

     13,713         594,184   

Home Depot, Inc. (The)

     69,984         7,950,882   

L. Brands, Inc.

     13,222         1,246,702   

Lowe’s Cos., Inc.

     52,296         3,890,300   

O’Reilly Automotive, Inc.*

     5,400         1,167,696   

Ross Stores, Inc.

     11,200         1,180,032   

Staples, Inc.

     33,925         552,469   

Tiffany & Co.

     5,900         519,259   

TJX Cos., Inc. (The)

     36,564         2,561,308   

Tractor Supply Co.

     7,200         612,432   

Urban Outfitters, Inc.*

     5,300         241,945   
     

 

 

 
        24,413,855   

Technology Hardware, Storage & Peripherals    4.6%

                 

Apple, Inc.

     311,938         38,814,446   

EMC Corp.

     106,604         2,724,798   

Hewlett-Packard Co.

     98,102         3,056,858   

NetApp, Inc.

     16,300         577,998   

SanDisk Corp.

     11,800         750,716   

Seagate Technology PLC(a)

     17,200         894,916   

 

See Notes to Financial Statements.

 

24  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Technology Hardware, Storage & Peripherals (cont’d.)

                 

Western Digital Corp.

     11,600       $ 1,055,716   
     

 

 

 
        47,875,448   

Textiles, Apparel & Luxury Goods    0.9%

                 

Coach, Inc.(a)

     14,000         580,020   

Fossil Group, Inc.*(a)

     2,500         206,125   

Hanesbrands, Inc.

     20,200         676,902   

Michael Kors Holdings Ltd.*

     10,900         716,675   

NIKE, Inc. (Class B Stock)

     37,052         3,717,427   

PVH Corp.

     4,600         490,176   

Ralph Lauren Corp.

     3,300         433,950   

Under Armour, Inc. (Class A Stock)*(a)

     8,800         710,600   

VF Corp.

     18,736         1,411,008   
     

 

 

 
        8,942,883   

Thrifts & Mortgage Finance

                 

Hudson City Bancorp, Inc.

     22,600         236,848   

People’s United Financial, Inc.(a)

     15,000         228,000   
     

 

 

 
        464,848   

Tobacco    1.3%

                 

Altria Group, Inc.

     105,679         5,286,064   

Lorillard, Inc.

     19,480         1,273,018   

Philip Morris International, Inc.

     82,479         6,213,143   

Reynolds American, Inc.

     16,500         1,137,015   
     

 

 

 
        13,909,240   

Trading Companies & Distributors    0.2%

                 

Fastenal Co.(a)

     14,000         580,090   

United Rentals, Inc.*(a)

     5,400         492,264   

W.W. Grainger, Inc.(a)

     3,474         819,204   
     

 

 

 
        1,891,558   
     

 

 

 

TOTAL COMMON STOCKS
(cost $358,239,010)

        979,391,495   
     

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     25   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Description    Shares      Value (Note 1)  

EXCHANGE TRADED FUND    0.6%

     

iShares Core S&P 500 ETF
(cost $6,766,407)

     32,400       $ 6,733,692   
     

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $365,005,417)

        986,125,187   
     

 

 

 

SHORT-TERM INVESTMENTS    6.5%

     

AFFILIATED MONEY MARKET MUTUAL FUND    6.3%

     

Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund
(cost $65,728,419; includes $23,697,962 of cash collateral for securities on loan)(Note 3)(c)(d)

     65,728,419         65,728,419   
     

 

 

 
    

Principal
Amount (000)#

        

U.S. TREASURY OBLIGATION    0.2%

     

U.S. Treasury Bill, 0.152%, 09/17/15
(cost $1,998,592)(e)(f)

     2,000         1,999,062   
     

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(cost $67,727,011)

        67,727,481   
     

 

 

 

TOTAL INVESTMENTS    101.4%
(cost $432,732,428; Note 5)

        1,053,852,668   

Liabilities in excess of other assets(g)    (1.4)%

        (15,015,374
     

 

 

 

NET ASSETS    100.0%

      $ 1,038,837,294   
     

 

 

 

 

The following abbreviation is used in the portfolio descriptions:

ETF—Exchange Traded Fund

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 $23,063,559; cash collateral of $23,697,962 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. Securities on loan are subject to contractual netting arrangements.
(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.
(e) Rate quoted represents yield-to-maturity as of purchase date.
(f) Represents security, or a portion thereof, segregated as collateral for futures contracts.

 

See Notes to Financial Statements.

 

26  


(g) Liabilities in excess of other assets includes net unrealized appreciation (depreciation) on futures contracts as follows:

 

Futures contracts outstanding at March 31, 2015:

 

Number of
Contracts
    Type   Expiration
Date
    Value at
Trade Date
    Value at
March 31,
2015
    Unrealized
Appreciation
(Depreciation)(1)
 
  Long Positions:        
  112      S&P 500 E-Mini     Jun. 2015      $ 11,520,286      $ 11,540,480      $ 20,194   
  50      S&P 500 Index     Jun. 2015        25,806,160        25,760,000        (46,160
         

 

 

 
          $ (25,966
         

 

 

 

 

(1) A U.S. Treasury Obligation with a market value of $1,999,062 has been segregated with UBS AG to cover requirements for open contracts at March 31, 2015.

 

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

 

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

 

The following is a summary of the inputs used as of March 31, 2015 in valuing such portfolio securities:

 

        Level 1             Level 2             Level 3      

Investments in Securities

     

Common Stocks

     

Aerospace & Defense

  $ 27,100,734      $   —      $   —   

Air Freight & Logistics

    7,001,650                 

Airlines

    5,577,588                 

Auto Components

    4,169,889                 

Automobiles

    6,751,643                 

Banks

    56,266,781                 

Beverages

    21,043,031                 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     27   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

        Level 1             Level 2             Level 3      

Common Stocks (continued)

     

Biotechnology

  $ 29,922,716      $   —      $   —   

Building Products

    812,077                 

Capital Markets

    22,050,331                 

Chemicals

    23,453,037                 

Commercial Services & Supplies

    4,379,568                 

Communications Equipment

    15,776,334                 

Construction & Engineering

    1,069,353                 

Construction Materials

    1,084,950                 

Consumer Finance

    7,873,605                 

Containers & Packaging

    1,904,371                 

Distributors

    764,065                 

Diversified Consumer Services

    436,793                 

Diversified Financial Services

    20,329,567                 

Diversified Telecommunication Services

    22,195,704                 

Electric Utilities

    16,717,952                 

Electrical Equipment

    5,317,262                 

Electronic Equipment, Instruments & Components

    4,267,821                 

Energy Equipment & Services

    12,279,809                 

Food & Staples Retailing

    24,912,249                 

Food Products

    16,418,211                 

Gas Utilities

    319,250                 

Health Care Equipment & Supplies

    21,462,068                 

Health Care Providers & Services

    27,627,652                 

Health Care Technology

    1,172,160                 

Hotels, Restaurants & Leisure

    16,997,093                 

Household Durables

    4,448,795                 

Household Products

    17,960,003                 

Independent Power & Renewable Electricity Producers

    875,410                 

Industrial Conglomerates

    22,674,661                 

Insurance

    26,419,760                 

Internet & Catalog Retail

    13,154,634                 

Internet Software & Services

    33,413,850                 

IT Services

    32,871,812                 

Leisure Products

    765,278                 

Life Sciences Tools & Services

    4,542,392                 

Machinery

    14,394,657                 

Media

    34,517,825                 

Metals & Mining

    3,366,073                 

Multi-Utilities

    11,468,794                 

Multiline Retail

    7,917,733                 

Oil, Gas & Consumable Fuels

    66,252,896                 

Paper & Forest Products

    1,236,539                 

 

See Notes to Financial Statements.

 

28  


        Level 1             Level 2             Level 3      

Common Stocks (continued)

     

Personal Products

  $ 1,022,868      $      $   —   

Pharmaceuticals

    61,964,345                 

Professional Services

    2,004,167                 

Real Estate Investment Trusts (REITs)

    24,512,923                 

Real Estate Management & Development

    565,166                 

Road & Rail

    9,463,902                 

Semiconductors & Semiconductor Equipment

    23,525,900                 

Software

    35,097,966                 

Specialty Retail

    24,413,855                 

Technology Hardware, Storage & Peripherals

    47,875,448                 

Textiles, Apparel & Luxury Goods

    8,942,883                 

Thrifts & Mortgage Finance

    464,848                 

Tobacco

    13,909,240                 

Trading Companies & Distributors

    1,891,558                 

Exchange Traded Fund

    6,733,692                 

Affiliated Money Market Mutual Fund

    65,728,419                 

U.S. Treasury Obligation

           1,999,062          

Other Financial Instruments*

     

Futures Contracts

    (25,966              
 

 

 

   

 

 

   

 

 

 

Total

  $ 1,051,827,640      $ 1,999,062      $   
 

 

 

   

 

 

   

 

 

 

 

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and exchange-traded swap contracts, which are recorded at the unrealized appreciation/depreciation on the instrument, and over-the-counter swap contracts which are recorded at fair value.

 

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of March 31, 2015 was as follows:

 

Oil, Gas & Consumable Fuels

    6.4 

Affiliated Money Market Mutual Fund (including 2.3% of collateral for securities on loan)

    6.3   

Pharmaceuticals

    6.0   

Banks

    5.4   

Technology Hardware, Storage & Peripherals

    4.6   

Software

    3.4   

Media

    3.3   

Internet Software & Services

    3.2   

IT Services

    3.2   

Biotechnology

    2.9   

Health Care Providers & Services

    2.7   

Aerospace & Defense

    2.6   

Insurance

    2.5   

Food & Staples Retailing

    2.4

Real Estate Investment Trusts (REITs)

    2.4   

Specialty Retail

    2.3   

Semiconductors & Semiconductor Equipment

    2.3   

Chemicals

    2.3   

Industrial Conglomerates

    2.2   

Diversified Telecommunication Services

    2.1   

Capital Markets

    2.1   

Health Care Equipment & Supplies

    2.1   

Beverages

    2.0   

Diversified Financial Services

    2.0   

Household Products

    1.7   

Hotels, Restaurants & Leisure

    1.6   

Electric Utilities

    1.6   

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     29   


 

Portfolio of Investments

 

as of March 31, 2015 (Unaudited) continued

 

Food Products

    1.6

Communications Equipment

    1.5   

Machinery

    1.4   

Tobacco

    1.3   

Internet & Catalog Retail

    1.3   

Energy Equipment & Services

    1.2   

Multi-Utilities

    1.1   

Road & Rail

    0.9   

Textiles, Apparel & Luxury Goods

    0.9   

Multiline Retail

    0.8   

Consumer Finance

    0.8   

Air Freight & Logistics

    0.7   

Automobiles

    0.6   

Exchange Traded Fund

    0.6   

Airlines

    0.5   

Electrical Equipment

    0.5   

Life Sciences Tools & Services

    0.4   

Household Durables

    0.4   

Commercial Services & Supplies

    0.4   

Electronic Equipment, Instruments & Components

    0.4   

Auto Components

    0.4

Metals & Mining

    0.3   

Professional Services

    0.2   

U.S. Treasury Obligation

    0.2   

Containers & Packaging

    0.2   

Trading Companies & Distributors

    0.2   

Paper & Forest Products

    0.1   

Health Care Technology

    0.1   

Construction Materials

    0.1   

Construction & Engineering

    0.1   

Personal Products

    0.1   

Independent Power & Renewable Electricity Producers

    0.1   

Building Products

    0.1   

Leisure Products

    0.1   

Distributors

    0.1   

Real Estate Management & Development

    0.1   
 

 

 

 
    101.4   

Liabilities in excess of other assets

    (1.4
 

 

 

 
    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, 2015 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/to broker—
variation margin futures
   $ 25,966
     

 

 

       

 

 

 

 

* 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.

 

30  


The effects of derivative instruments on the Statement of Operations for the six months ended March 31, 2015 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

  $ 1,738,184   
 

 

 

 

 

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

  $ 140,835   
 

 

 

 

 

For the six months ended March 31, 2015, the Fund’s average value at trade date for futures long positions was $34,427,544.

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     31   


 

Statement of Assets and Liabilities

 

as of March 31, 2015 (Unaudited)

 

Assets

        

Investments at value, including securities on loan of $23,063,559:

  

Unaffiliated Investments (cost $366,155,113)

   $ 986,156,654   

Affiliated Investments (cost $66,577,315)

     67,696,014   

Receivable for Fund shares sold

     15,063,387   

Dividends receivable

     1,226,001   

Prepaid expenses

     4,001   
  

 

 

 

Total assets

     1,070,146,057   
  

 

 

 

Liabilities

        

Payable to broker for collateral for securities on loan

     23,697,962   

Payable for investments purchased

     5,698,677   

Payable for Fund shares reacquired

     1,241,088   

Due to broker—variation margin futures

     264,180   

Accrued expenses

     125,289   

Affiliated transfer agent fee payable

     98,894   

Distribution fee payable

     95,062   

Management fee payable

     68,828   

Payable to custodian

     18,783   
  

 

 

 

Total liabilities

     31,308,763   
  

 

 

 

Net Assets

   $ 1,038,837,294   
  

 

 

 
          

Net assets were comprised of:

  

Shares of beneficial interest, at par

   $ 23,738   

Paid-in capital in excess of par

     405,223,543   
  

 

 

 
     405,247,281   

Undistributed net investment income

     7,077,902   

Accumulated net realized gain on investment transactions

     5,417,837   

Net unrealized appreciation on investments

     621,094,274   
  

 

 

 

Net assets, March 31, 2015

   $ 1,038,837,294   
  

 

 

 

 

See Notes to Financial Statements.

 

32  


 

 

Class A

        

Net asset value and redemption price per share
($215,168,569 ÷ 4,924,539 shares of beneficial interest issued and outstanding)

   $ 43.69   

Maximum sales charge (3.25% of offering price)

     1.47   
  

 

 

 

Maximum offering price to public

   $ 45.16   
  

 

 

 

Class C

        

Net asset value, offering price and redemption price per share

  

($47,519,820 ÷ 1,093,359 shares of beneficial interest issued and outstanding)

   $ 43.46   
  

 

 

 

Class I

        

Net asset value, offering price and redemption price per share

  

($317,076,533 ÷ 7,239,192 shares of beneficial interest issued and outstanding)

   $ 43.80   
  

 

 

 

Class Z

        

Net asset value, offering price and redemption price per share

  

($459,072,372 ÷ 10,481,273 shares of beneficial interest issued and outstanding)

   $ 43.80   
  

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     33   


 

Statement of Operations

 

Six Months Ended March 31, 2015 (Unaudited)

 

Net Investment Income

        

Income

  

Unaffiliated dividend income (net of foreign withholding taxes of $1,215)

   $ 9,860,265   

Affiliated dividend income

     54,585   

Affiliated income from securities lending, net

     34,396   

Interest income

     482   
  

 

 

 

Total income

     9,949,728   
  

 

 

 

Expenses

  

Management fee

     722,575   

Distribution fee—Class A

     306,426   

Distribution fee—Class C

     213,945   

Custodian and accounting fees

     57,000   

Transfer agent fee—Class A (including affiliated expense of $61,000)

     105,000   

Transfer agent fee—Class C (including affiliated expense of $2,000)

     6,000   

Transfer agent fee—Class I (including affiliated expense of $94,000)

     94,000   

Transfer agent fee—Class Z (including affiliated expense of $291,000)

     291,000   

Shareholders’ reports

     96,000   

Registration fees

     40,000   

Trustees’ fees

     16,000   

Legal fees and expenses

     14,000   

Audit fee

     11,000   

Insurance expenses

     6,000   

Commitment fee on syndicated credit agreement

     1,000   

Miscellaneous

     8,559   
  

 

 

 

Total expenses

     1,988,505   

Less: Management fee waiver

     (337,202
  

 

 

 

Net expenses

     1,651,303   
  

 

 

 

Net investment income

     8,298,425   
  

 

 

 

Realized And Unrealized Gain On Investments

        

Net realized gain on:

  

Investment transactions

     12,536,765   

Futures transactions

     1,738,184   
  

 

 

 
     14,274,949   
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated ($182,870))

     30,457,981   

Futures

     140,835   
  

 

 

 
     30,598,816   
  

 

 

 

Net gain on investment transactions

     44,873,765   
  

 

 

 

Net Increase In Net Assets Resulting From Operations

   $ 53,172,190   
  

 

 

 

 

See Notes to Financial Statements.

 

34  


 

Statement of Changes in Net Assets

 

(Unaudited)

 

 

 

    

Six Months

Ended

March 31, 2015

     Year
Ended
September 30, 2014
 

Increase (Decrease) in Net Assets

                 

Operations

     

Net investment income

   $ 8,298,425       $ 14,788,529   

Net realized gain on investment transactions

     14,274,949         46,273,904   

Net change in unrealized appreciation (depreciation) on investments

     30,598,816         93,638,094   
  

 

 

    

 

 

 

Net increase in net assets resulting from operations

     53,172,190         154,700,527   
  

 

 

    

 

 

 

Dividends and Distributions (Note 1)

     

Dividends from net investment income

     

Class A

     (2,772,211      (2,095,357

Class C

     (336,055      (198,743

Class I

     (4,457,273      (3,431,791

Class Z

     (7,305,498      (6,202,457
  

 

 

    

 

 

 
     (14,871,037      (11,928,348
  

 

 

    

 

 

 

Distributions from net realized gains

     

Class A

     (9,526,261      (381,468

Class C

     (1,988,380      (69,520

Class I

     (12,540,604      (495,263

Class Z

     (21,267,117      (928,809
  

 

 

    

 

 

 
     (45,322,362      (1,875,060
  

 

 

    

 

 

 

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

     

Net proceeds from shares sold

     175,007,444         170,437,276   

Net asset value of shares issued in reinvestment of dividends and distributions

     59,793,539         13,641,211   

Cost of shares reacquired

     (105,450,207      (228,878,658
  

 

 

    

 

 

 

Net increase (decrease) in net assets from Fund share transactions

     129,350,776         (44,800,171
  

 

 

    

 

 

 

Total increase

     122,329,567         96,096,948   

Net Assets:

                 

Beginning of period

     916,507,727         820,410,779   
  

 

 

    

 

 

 

End of period(a)

   $ 1,038,837,294       $ 916,507,727   
  

 

 

    

 

 

 

(a) Includes undistributed net investment income of:

   $ 7,077,902       $ 13,650,514   
  

 

 

    

 

 

 

 

See Notes to Financial Statements.

 

Prudential Stock Index Fund     35   


 

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

 

Securities Valuation: The Fund holds securities and other assets 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 and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options that are traded on a national securities exchange are

 

36  


valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

 

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

 

Common and preferred 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. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.

 

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

 

Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.

 

Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.

 

Prudential Stock Index Fund     37   


 

Notes to Financial Statements

 

(Unaudited) continued

 

 

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

 

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

 

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment 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 its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates.

 

38  


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. These are agreements which a sub-adviser may have negotiated and entered into on behalf of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. 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.

 

Prudential Stock Index Fund     39   


 

Notes to Financial Statements

 

(Unaudited) continued

 

 

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 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.

 

40  


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 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 .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. 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 through January 31, 2016. The effective management fee rate before any waivers and/or expense reimbursement was .15% of the average daily net assets for the six months ended March 31, 2015. The effective management fee rate, net of waivers and/or expense reimbursement, was .08%.

 

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 $68,701 in front-end sales charges resulting from sales of Class A shares during the six months ended March 31, 2015. From these fees, PIMS paid such sales charges to affiliated broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

 

Prudential Stock Index Fund     41   


Notes to Financial Statements

 

(Unaudited) continued

 

 

PIMS has advised the Fund that for the six months ended March 31, 2015, it received $15 and $3,157 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 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 securities lending agent. Earnings from securities lending are disclosed on the Statement of Operations as “Affiliated income from securities lending, net”. For the six months ended March 31, 2015, PIM was compensated approximately $10,300 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, 2015, were $81,344,279 and $20,093,970, respectively.

 

42  


Note 5. Tax Information

 

The United States federal income tax basis of investments and net unrealized appreciation as of March 31, 2015 were as follows:

 

Tax Basis

   $ 441,560,822   
  

 

 

 

Appreciation

     617,745,285   

Depreciation

     (5,453,439
  

 

 

 

Net Unrealized Appreciation

   $ 612,291,846   
  

 

 

 

 

The book basis may differ from tax basis due to certain tax related adjustments.

 

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

 

Prudential Stock Index Fund     43   


Notes to Financial Statements

 

(Unaudited) continued

 

 

Transactions in shares of beneficial interest were as follows:

 

Class A

     Shares      Amount  

Six months ended March 31, 2015:

       

Shares sold

       830,549       $ 36,507,330   

Shares issued in reinvestment of dividends and distributions

       276,458         12,089,501   

Shares reacquired

       (660,885      (29,135,845
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       446,122         19,460,986   

Shares issued upon conversion from Class Z

       141         6,187   

Shares reacquired upon conversion into Class I and Class Z

       (7,235      (328,265
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       439,028       $ 19,138,908   
    

 

 

    

 

 

 

Year ended September 30, 2014:

       

Shares sold

       1,057,138       $ 43,682,829   

Shares issued in reinvestment of dividends and distributions

       61,893         2,421,271   

Shares reacquired

       (970,302      (40,179,359
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       148,729         5,924,741   

Shares issued upon conversion from Class C

       593         26,095   

Shares reacquired upon conversion into Class Z

       (4,578      (178,608
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       144,744       $ 5,772,228   
    

 

 

    

 

 

 

Class C

               

Six months ended March 31, 2015:

       

Shares sold

       229,544       $ 10,009,665   

Shares issued in reinvestment of dividends and distributions

       51,764         2,255,861   

Shares reacquired

       (75,623      (3,286,486
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       205,685         8,979,040   

Shares reacquired upon conversion into Class Z

       (232      (10,218
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       205,453       $ 8,968,822   
    

 

 

    

 

 

 

Year ended September 30, 2014:

       

Shares sold

       188,195       $ 7,775,012   

Shares issued in reinvestment of dividends and distributions

       6,625         258,525   

Shares reacquired

       (88,143      (3,615,900
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       106,677         4,417,637   

Shares reacquired upon conversion into Class A, Class I and Class Z

       (2,466      (103,367
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       104,211       $ 4,314,270   
    

 

 

    

 

 

 

 

44  


Class I

     Shares      Amount  

Six months ended March 31, 2015:

       

Shares sold

       1,464,497       $ 64,204,507   

Shares issued in reinvestment of dividends and distributions

       387,419         16,968,958   

Shares reacquired

       (408,060      (17,988,690
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       1,443,856         63,184,775   

Shares issued upon conversion from Class A

       6,201         283,452   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       1,450,057       $ 63,468,227   
    

 

 

    

 

 

 

Year ended September 30, 2014:

       

Shares sold

       880,960       $ 36,923,342   

Shares issued in reinvestment of dividends and distributions

       98,424         3,853,305   

Shares reacquired

       (1,126,200      (46,740,710
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (146,816      (5,964,063

Shares issued upon conversion from Class C

       451         20,041   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (146,365    $ (5,944,022
    

 

 

    

 

 

 

Class Z

               

Six months ended March 31, 2015:

       

Shares sold

       1,447,507       $ 64,285,942   

Shares issued in reinvestment of dividends and distributions

       650,062         28,479,219   

Shares reacquired

       (1,249,514      (55,039,186
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       848,055         37,725,975   

Shares issued upon conversion from Class A and Class C

       1,235         55,031   

Shares reacquired upon conversion into Class A

       (141      (6,187
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       849,149       $ 37,774,819   
    

 

 

    

 

 

 

Year ended September 30, 2014:

       

Shares sold

       1,976,752       $ 82,056,093   

Shares issued in reinvestment of dividends and distributions

       181,468         7,108,110   

Shares reacquired

       (3,332,087      (138,342,689
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (1,173,867      (49,178,486

Shares issued upon conversion from Class A and Class C

       5,967         235,839   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (1,167,900    $ (48,942,647
    

 

 

    

 

 

 

 

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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% on the unused portion of the SCA. Prior to October 9, 2014 the Funds had another SCA that provided a commitment fee of $900 million and the

 

Prudential Stock Index Fund     45   


Notes to Financial Statements

 

(Unaudited) continued

 

Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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, 2015.

 

Note 8. New Accounting Pronouncement

 

In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.

 

46  


 

Financial Highlights

 

(Unaudited)

 

 

Class A Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2015          2014     2013     2012     2011     2010  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $43.97            $37.45        $32.09        $25.16        $25.34        $23.48   
Income (loss) from investment operations:                                                    
Net investment income     .34            .61        .58        .47        .40        .37   
Net realized and unrealized gain (loss) on investment transactions     2.16            6.47        5.30        6.90        (.20     1.88   
Total from investment operations     2.50            7.08        5.88        7.37        .20        2.25   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.63         (.47     (.52     (.44     (.38     (.39
Distributions from net realized gains     (2.15         (.09     -        -        -        -   
Total dividends and distributions     (2.78         (.56     (.52     (.44     (.38     (.39
Net asset value, end of period     $43.69            $43.97        $37.45        $32.09        $25.16        $25.34   
Total Return(b):     5.67%            19.09%        18.71%        29.60%        .74%        9.63%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $215,169            $197,250        $162,557        $144,851        $118,691        $114,403   
Average net assets (000)     $204,845            $184,199        $153,755        $135,485        $131,565        $104,488   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .53% (d)          .53%        .54%        .55%        .55%        .56%   
Expenses before waivers and/or expense reimbursement     .60% (d)          .67%        .76%        .77%        .77%        .78%   
Net investment income     1.53% (d)          1.47%        1.69%        1.61%        1.43%        1.50%   
Portfolio turnover rate     2% (e)          4%        3%        4%        5%        5%   

 

(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     47   


 

Financial Highlights

 

(Unaudited) continued

 

Class C Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2015          2014     2013     2012     2011     2010  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $43.64            $37.18        $31.87        $24.99        $25.18        $23.33   
Income (loss) from investment operations:                                                    
Net investment income     .20            .35        .36        .29        .23        .21   
Net realized and unrealized gain (loss) on investment and transactions     2.13            6.45        5.29        6.86        (.19     1.87   
Total from investment operations     2.33            6.80        5.65        7.15        .04        2.08   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.36         (.25     (.34     (.27     (.23     (.23
Distributions from net realized gains     (2.15         (.09     -        -        -        -   
Total dividends and distributions     (2.51         (.34     (.34     (.27     (.23     (.23
Net asset value, end of period     $43.46            $43.64        $37.18        $31.87        $24.99        $25.18   
Total Return(b):     5.33%            18.38%        17.96%        28.78%        .14%        8.96%   
             
Ratios/Supplemental Data:  
Net assets, end of period (000)     $47,520            $38,749        $29,139        $23,924        $20,351        $22,615   
Average net assets (000)     $42,906            $34,419        $25,730        $23,103        $23,884        $23,196   
Ratios to average net assets(c):                                                    

Expenses after waivers and/or expense

reimbursement

 

 

1.16%

(d) 

        1.16%        1.16%        1.17%        1.17%        1.19%   
Expenses before waivers and/or expense reimbursement     1.23% (d)          1.30%        1.38%        1.39%        1.39%        1.41%   
Net investment income     .91% (d)          .84%        1.06%        .99%        .81%        .86%   
Portfolio turnover rate     2% (e)          4%        3%        4%        5%        5%   

 

(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.

 

48  


 

 

 

Class I Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2015          2014     2013     2012     2011     2010  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $44.14            $37.57        $32.20        $25.25        $25.43        $23.55   
Income (loss) from investment operations:                                                    
Net investment income     .41            .75        .70        .55        .50        .46   
Net realized and unrealized gain (loss) on investment and transactions     2.16            6.51        5.30        6.94        (.21     1.89   
Total from investment operations     2.57            7.26        6.00        7.49        .29        2.35   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.76         (.60     (.63     (.54     (.47     (.47
Distributions from net realized gains     (2.15         (.09     -        -        -        -   
Total dividends and distributions     (2.91         (.69     (.63     (.54     (.47     (.47
Net asset value, end of period     $43.80            $44.14        $37.57        $32.20        $25.25        $25.43   
Total Return(b):     5.83%            19.54%        19.09%        30.06%        1.08%        10.08%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $317,077            $255,507        $222,993        $176,040        $331,595        $322,850   
Average net assets (000)     $268,984            $241,829        $193,507        $214,339        $376,719        $321,048   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .20% (d)          .19%        .19%        .19%        .19%        .20%   
Expenses before waivers and/or expense reimbursement     .27% (d)          .33%        .41%        .41%        .41%        .42%   
Net investment income     1.86% (d)          1.81%        2.03%        2.00%        1.79%        1.85%   
Portfolio turnover rate     2% (e)          4%        3%        4%        5%        5%   

 

(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     49   


 

Financial Highlights

 

(Unaudited) continued

 

Class Z Shares         
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2015          2014     2013     2012     2011     2010  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning Of Period     $44.12            $37.57        $32.19        $25.25        $25.42        $23.54   
Income (loss) from investment operations:                                                    
Net investment income     .40            .73        .68        .56        .48        .44   
Net realized and unrealized gain (loss) on investment transactions     2.17            6.49        5.31        6.90        (.20     1.90   
Total from investment operations     2.57            7.22        5.99        7.46        .28        2.34   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.74         (.58     (.61     (.52     (.45     (.46
Distributions from net realized gains     (2.15         (.09     -        -        -        -   
Total dividends and distributions     (2.89         (.67     (.61     (.52     (.45     (.46
Net asset value, end of period     $43.80            $44.12        $37.57        $32.19        $25.25        $25.42   
Total Return(b):     5.82%            19.42%        19.06%        29.94%        1.06%        10.03%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $459,072            $425,001        $405,721        $382,510        $336,727        $352,470   
Average net assets (000)     $449,344            $424,209        $390,330        $373,819        $381,784        $383,488   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .26% (d)          .25%        .25%        .25%        .25%        .26%   
Expenses before waivers and/or expense reimbursement     .33% (d)          .39%        .47%        .47%        .47%        .48%   
Net investment income     1.80% (d)          1.75%        1.98%        1.91%        1.73%        1.79%   
Portfolio turnover rate     2% (e)          4%        3%        4%        5%        5%   

 

(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.

 

50  


Results of Proxy Voting

 

(Unaudited)

 

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential Investment Portfolios 8 which is comprised of the Prudential Stock Index Fund (the Fund), approved the following proposal.

 

To elect twelve Directors:

 

    SHARES VOTED     % OF VOTED     % OF TOTAL  

(a) Ellen S. Alberding;

     

FOR

    7,417,823.501        94.964        35.711   

WITHHELD

    393,448.229        5.036        1.894   

(b) Kevin J. Bannon;

     

FOR

    7,414,858.361        94.926        35.697   

WITHHELD

    396,413.369        5.074        1.908   

(c) Linda W. Bynoe;

     

FOR

    7,415,646.370        94.936        35.701   

WITHHELD

    395,625.360        5.064        1.904   

(d) Keith F. Hartstein;

     

FOR

    7,416,178.765        94.943        35.703   

WITHHELD

    395,092.965        5.057        1.904   

(e) Michael S. Hyland;

     

FOR

    7,414,373.569        94.919        35.695   

WITHHELD

    396,898.161        5.081        1.910   

(f) Stephen P. Munn;

     

FOR

    7,404,786.610        94.797        35.649   

WITHHELD

    406,485.120        5.203        1.956   

(g) James E. Quinn;

     

FOR

    7,416,800.629        94.950        35.706   

WITHHELD

    394,471.101        5.050        1.899   

(h) Richard A. Redeker;

     

FOR

    7,403,841.623        94.785        35.644   

WITHHELD

    407,430.107        5.215        1.961   

(i) Stephen G. Stoneburn;

     

FOR

    7,405,831.382        94.810        35.644   

WITHHELD

    405,440.348        5.190        1.951   

(j) Stuart S. Parker;

     

FOR

    7,416,209.875        94.943        35.704   

WITHHELD

    395,061.855        5.057        1.901   

(k) Scott E. Benjamin; and

     

FOR

    7,415,976.459        94.940        35.702   

WITHHELD

    395,295.271        5.060        1.903   

(l) Grace C. Torres.

     

FOR

    7,421,095.327        95.005        35.727   

WITHHELD

    390,176.403        4.995        1.878   

 

Prudential Stock Index Fund     51   


Results of Proxy Voting

 

(Unaudited) continued

 

 

The special meeting of shareholders of the Fund held on November 26, 2014, was adjourned to December 3, 2014, and further adjourned to December 10, 2014, January 9, 2015, and February 9, 2015 to permit further solicitation of proxies on the proposals noted below.

 

An abstention or a broker non-vote is considered present for purposes of determining a quorum but has the effect of a vote against such matters. At the special meeting of shareholders held on February 9, 2015, insufficient votes were obtained to approve the following proposals:

 

Proposal 1: To permit PI to enter into or make material changes to the Fund’s subadvisory agreements with subadvisers that are wholly-owned subsidiaries of PI or a sister company of PI (wholly-owned subadvisers) without shareholder approval.

 

    SHARES VOTED     % OF VOTED     % OF TOTAL  

FOR

    3,717,516.550        47.233        17.897   

AGAINST

    342,613.650        4.353        1.650   

ABSTAIN

    255,104.998        3.241        1.228   

BROKER NON-VOTE

    3,555,488.604        45.173        17.117   

TOTAL

    7,870,723.802        100.000     37.892   

 

Proposal 2: To designate the Fund’s investment objective as a non-fundamental policy of the Fund, meaning that the Fund’s investment objective could be changed with the approval of the Fund’s Board of Directors, but without shareholder approval.

 

    SHARES VOTED     % OF VOTED     % OF TOTAL  

FOR

    3,559,344.718        45.223        17.136   

AGAINST

    474,427.757        6.028        2.284   

ABSTAIN

    281,462.723        3.576        1.355   

BROKER NON-VOTE

    3,555,488.604        45.173        17.117   

TOTAL

    7,870,723.802        100.000     37.892   

 

52  


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  Stephen P. Munn Stuart S. Parker James E. Quinn Richard A. Redeker Stephen G. Stoneburn Grace C. Torres

 

OFFICERS
Stuart S. Parker, President Scott E. Benjamin, Vice President M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer Raymond A. O’Hara, Chief Legal Officer Deborah A. Docs, Secretary Chad A. Earnst, 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 Kelly A. Coyne, 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    0277419-00001-00


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 19, 2015

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 19, 2015
By:

/s/ M. Sadiq Peshimam

M. Sadiq Peshimam
Treasurer and Principal Financial and Accounting Officer
Date: May 19, 2015