Prudential Investment Portfolios 12 N-CSR Certified annual shareholder report (management investment company)

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:	811-08565
Exact name of registrant as specified in charter:	Prudential Investment Portfolios 12
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:	3/31/2015
Date of reporting period:	3/31/2015

Item 1 – Reports to Stockholders

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

PRUDENTIAL GLOBAL REAL ESTATE FUND

ANNUAL REPORT ^· MARCH 31, 2015

Objective

Capital appreciation and income

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

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

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Prudential Real Estate Investors, also known as PREI, is a unit of Prudential Investment Management, Inc. (PIM), a registered investment adviser. PIMS and PIM are Prudential Financial companies. ^© 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, PREI, 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.

May 15, 2015

Dear Shareholder:

We hope you find the annual report for the Prudential Global Real Estate Fund informative and useful. The report covers performance for the 12-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,

Stuart S. Parker, President

Prudential Global Real Estate Fund

Prudential Global Real Estate 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
	One Year			Five Years			Ten Years			Since Inception
Class A		15.26	%		70.40	%		111.22	%	—
Class B		14.44			64.62			96.57		—
Class C		14.49			64.62			96.58		—
Class Q		15.82			N/A			N/A		23.47% (8/23/13)
Class R		15.03			68.76			N/A		42.33    (6/16/08)
Class Z		15.60			72.99			117.22		—
S&P Developed Property Net Index		15.31			74.31			97.99		—
FTSE EPRA/NAREIT Developed Real Estate Net Index		15.18			70.70			99.97		—
S&P 500 Index		12.71			96.40			115.97		—
Lipper Global Real Estate Funds Average		14.84			66.92			85.81		—
Average Annual Total Returns (With Sales Charges) as of 3/31/15
	One Year			Five Years			Ten Years			Since Inception
Class A		8.93	%		10.00	%		7.16	%	—
Class B		9.44			10.35			6.99		—
Class C		13.49			10.48			6.99		—
Class Q		15.82			N/A			N/A		14.12% (8/23/13)
Class R		15.03			11.03			N/A		5.34    (6/16/08)
Class Z		15.60			11.58			8.07		—
S&P Developed Property Net Index		15.31			11.75			7.07		—
FTSE EPRA/NAREIT Developed Real Estate Net Index		15.18			11.29			7.18		—
S&P 500 Index		12.71			14.45			8.00		—
Lipper Global Real Estate Funds Average		14.84			10.75			6.26		—

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Average Annual Total Returns (Without Sales Charges) as of 3/31/15
	One Year			Five Years			Ten Years			Since Inception
Class A		15.26	%		11.25	%		7.76	%	—
Class B		14.44			10.48			6.99		—
Class C		14.49			10.48			6.99		—
Class Q		15.82			N/A			N/A		14.12% (8/23/13)
Class R		15.03			11.03			N/A		5.34    (6/16/08)
Class Z		15.60			11.58			8.07		—

Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential Global Real Estate Fund (Class A shares) with a similar investment in the S&P Developed Property Net Index and S&P 500 Index by portraying the initial account values at the beginning of the 10-year period for Class A shares (March 31, 2005) and the account values at the end of the current fiscal year (March 31, 2015) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, and in the following paragraphs, performance for Class B, Class C, Class Q, Class R, and Class Z shares will vary due to the differing charges and expenses applicable to each share class. Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods

Prudential Global Real Estate Fund 3

Your Fund’s Performance (continued)

shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: Prudential Investments LLC and Lipper Inc.

Inception returns are provided for any share class with less than 10 calendar years of returns.

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

	Class A	Class B*	Class C	Class Q	Class R	Class Z
Maximum initial sales charge	5.50% of the public offering price	None	None	None	None	None
Contingent Deferred Sales Charge (CDSC) (as a percentage of the lower of original purchase price or sale proceeds)	1% on sales of $1 million or more made within 12 months of purchase	5%(Yr.1) 4%(Yr.2) 3%(Yr.3) 2%(Yr.4) 1%(Yr.5) 1%(Yr.6) 0%(Yr.7)	1% on sales made within 12 months of purchase	None	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	.30%	1%	1%	None	.75% (.50% currently)	None

*Class B shares are closed to all purchase activity and no additional Class B shares may be purchased or acquired except by exchange from Class B shares of another Fund or through dividend or capital gains reinvestment.

Benchmark Definitions

S&P Developed Property Net Index

The S&P Developed Property Net Index is an unmanaged, weighted index that measures the investable universe of publicly traded property companies domiciled in developed markets. The cumulative total returns for the S&P Developed Property Net Index measured from the month-end closest to inception date for Class Q shares through 3/31/15 are 26.04% and 49.98% for Class R. The average annual total returns for the S&P Developed Property Net Index measured from the month-end closest to the inception date through 3/31/15 are 15.74% for Class Q and 6.19% for Class R.

FTSE EPRA/NAREIT Developed Real Estate Net Index

The FTSE EPRA/NAREIT Developed Real Estate Net Index reflects the stock performance of companies engaged in specific aspects of the major real estate markets/regions of the world. The cumulative total returns for the FTSE EPRA/NAREIT Developed Real Estate Index measured from the month-end closest to inception date

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through 3/31/15 are 25.56% for Class Q shares and 46.55% for Class R. The average annual total returns for the FTSE EPRA/NAREIT Developed Real Estate Index measured from the month-end closest to the inception date through 3/31/15 are 15.46% for Class Q and 5.83% for Class R.

S&P 500 Index

The S&P 500 Index is an unmanaged index of 500 stocks of large U.S. public companies. It gives a broad look at how US stock prices have performed. The cumulative total returns for the S&P 500 Index measured from the month-end closest to inception date through 3/31/15 are 30.77% for Class Q shares and 87.23% for Class R. The average annual total returns for the S&P 500 Index measured from the month-end closest to the inception date through 3/31/15 are 18.46% for Class Q and 9.74% for Class R.

Lipper Global Real Estate Funds Average

The Lipper Global Real Estate Funds Average (Lipper Average) is based on the average return for all funds in the Lipper Global Real Estate Funds category for the periods noted. Funds in the Lipper Average invest at least 25% but less than 75% of their equity portfolios in shares of companies engaged in the real estate industry that are strictly outside of the US or whose securities are principally traded outside of the U.S. The cumulative total returns for the Lipper Global Real Estate Funds Average measured from the month-end closest to inception date for Class Q shares through 3/31/15 are 25.91% and 48.50% for Class R. The average annual total returns for the Lipper Global Real Estate Funds Average measured from the month-end closest to the inception date through 3/31/15 are 15.65% for Class Q and 6.00% for Class R.

Investors cannot invest directly in an index or average. The securities in the Indexes may be very different from those in the Fund. Index returns do not include the effect of sales charges and operating expenses of a mutual fund or taxes and would be lower if they did. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to inception date, and not from the class’s actual inception date.

Five Largest Holdings expressed as a percentage of net assets as of 3/31/15
Simon Property Group, Inc., REIT, Retail REITs	4.5	%
Mitsui Fudosan Co. Ltd., Diversified Real Estate Activities	3.8
Mitsubishi Estate Co. Ltd., Diversified Real Estate Activities	2.9
Sun Hung Kai Properties Ltd., Diversified Real Estate Activities	2.6
Health Care REIT, Inc., REIT, Health Care REITs	2.2

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

Five Largest Industries expressed as a percentage of net assets as of 3/31/15
Retail REITs	20.6	%
Diversified Real Estate Activities	16.2
Office REITs	12.0
Diversified REITs	11.4
Residential REITs	9.7

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

Prudential Global Real Estate Fund 5

Strategy and Performance Overview

How did the Fund perform?

For the 12-month reporting period ended March 31, 2015, the Prudential Global Real Estate Fund’s (the Fund) Class A shares gained 15.26%, slightly underperforming the 15.31% return of the S&P Developed Property Net Index (the Index). However, during the same period, the Fund outperformed the 15.18% return of the FTSE EPRA/NAREIT Developed Real Estate Net Index, the 14.84% return of the Lipper Global Real Estate Funds Average and the 12.71% return of the S&P 500 Index.

What were conditions like in the global real estate securities market?

In the US, the economic backdrop remained favorable for real estate investment trust (REIT) fundamentals, with occupancies and rental rates continuing to improve. However, lower oil prices weighed on demand and kept many private real estate investors on the sidelines. In energy-dependent cities, such as Houston, hotel revenue growth flattened and even turned downward. Supply was generally muted across most markets and property types, with the exception of apartment, industrial, and some hotel markets.

In Europe, equity markets rallied in the run-up to and following the European Central Bank’s (ECB) announcement of quantitative easing. The ECB’s loosening of credit and monetary policy, implemented to combat deflationary trends, pushed asset prices higher, drove core government bond yields lower, and intensified investors’ search for yield.

In Asia, equity market performance was driven by two key themes—monetary policy easing and corporate activity. From Australia to Japan, as central banks eased monetary policy, interest rates trended downward, driving up interest-rate sensitive stocks such as Australian and Japanese REITs. Meanwhile, corporate activity was focused mainly in large diversified Hong Kong companies.

Which holdings or related groups of holdings made the largest positive and negative contributions to the Fund’s return?

• Investments in North America added significantly to relative performance, as the Fund benefited from stock selection across most sectors, including health care, retail, industrial, and triple net. A triple net refers to a type of lease agreement in which the tenant is responsible for paying the building’s property taxes, insurance, and maintenance.

• In addition, within North America, the Fund’s underweight position versus the Index in the triple net sector and its overweight positions in the hotel and office sectors enhanced relative results.

• Conversely, the Fund was hurt in the US by stock selection in the residential and hotel sectors. An underweight position in the residential and health care sectors also dragged down relative returns.

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• In Europe, the Fund was helped by stock choices in the UK and to a lesser extent, Austria. An overweight position in Ireland and stock selection in Sweden detracted modestly from relative performance.

• In Asia, stock selection in Japan dampened relative results, offsetting effective stock picks in Singapore and Hong Kong. An overweight position in Hong Kong added slightly to Fund returns.

Did any tactical shifts in portfolio risk characteristics, including significant sales and purchases, affect the Fund?

• The most meaningful tactical shift in weightings during the period was within Asia, where the Fund’s allocation to Hong Kong was decreased to an underweight position relative to the Index. The Fund’s weightings in Japan and Singapore were also increased.

• In Europe, the most notable tactical shifts were an increase in the Fund’s allocation to the UK and Ireland and a decrease in its allocation to France.

• Within North America, the Fund’s overall relative weight in the US decreased because of reduced allocations to the storage and office sectors. In addition, the Fund’s allocation to the health care sector was increased.

What is the outlook for the global real estate securities markets?

At the end of the reporting period, as uncertainty remained around the direction of interest rates and global economic growth, Prudential Real Estate Investors (PREI), the Fund’s Subadviser, maintained its focus on companies with strong relative cash flow growth and on certain re-development and/or development opportunities that trade at reasonable valuations relative to their private market value.

In the US, REITs continue to improve operating fundamentals and PREI believes that REITs can deliver double-digit dividend growth and high single-digit cash flow growth in 2015. Given economic concerns, however, volatility spikes remain likely. PREI expects mergers and acquisitions as well as privatization activity to heat up. Employment centers that focus on technology, health care, and media/entertainment are expected to deliver relatively strong jobs growth. Markets that are dependent on the government and financial sectors are being monitored for signs of improvement. At the same time, PREI is finding value in B-quality apartment companies, which continue to be relatively insulated from new supply. Other opportunities have been identified among certain service hotels as revenue trends remain favorable. Also, at the end of the period, the Fund was underweight energy-related markets as lower oil prices continued to dampen investor sentiment.

Prudential Global Real Estate Fund 7

Strategy and Performance Overview (continued)

In Europe, real estate fundamentals remain solid, but due to the strong performance of European stocks during the period, PREI is cautious overall about the region. The ECB’s large-scale quantitative easing asset purchases, combined with substantial foreign and domestic capital seeking real estate yield, are expected to compress implied capitalization rate spreads across the Eurozone. (The implied capitalization rate is the rate of return on a real estate investment property based on the expected income that the property will generate.) In addition, no one knows how long it will take for the ECB’s asset purchases to boost European economic growth. PREI is also sensitive to macroeconomic and political risks in the region, especially Greek debt renegotiations and the Eurozone’s relations with Russia, that could lead to short-term market volatility. That said, PREI plans to take advantage of potential market declines to add to key portfolio positions.

In Asia, PREI favors Japan and Australia. Both Japan and Australia continue to attract foreign capital, while competition for quality assets has already led to tighter implied capitalization rate spreads. In Japan, PREI believes REITs are backed by improving vacancies and rental levels, as well as continued compression in implied capitalization rate spreads. In Australia, yields remain attractive, while the cost of borrowing has trended down in the wake of the central bank’s interest-rate cut during February. PREI expects rates to be lowered further, perhaps in the middle of 2015, due to economic uncertainty and to keep inflation at bay.

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Comments on Largest Holdings

4.5% Simon Property Group, Inc., REIT, Retail REITs

Simon Property Group, Inc. is a self-administered and self-managed US-based real estate investment trust. The company owns, develops, and manages retail real estate properties, including regional malls, outlet centers, community/lifestyle centers, and international properties.

3.8% Mitsui Fudosan Co., Ltd., Diversified Real Estate Activities

Mitsui Fudosan Co., Ltd. is a Japan-based real estate company that has multiple business segments.

2.9% Mitsubishi Estate Co. Ltd., Diversified Real Estate Activities

Mitsubishi Estate Co. Ltd. engages in real estate activities, primarily in Japan, the US, and internationally. It operates in eight segments: building business, residential business, urban development and investment management, international business, architectural design and engineering, custom-built housing, hotels business, and real estate services.

2.6% Sun Hung Kai Properties Ltd., Diversified Real Estate Activities

Sun Hung Kai Properties Ltd., through its subsidiaries, develops and invests in properties. The Hong Kong-based company also operates hotels, manages properties, car parking, and transportation infrastructure. In addition, Sun Hung Kai operates a logistics business, construction, financial services, telecommunication, Internet infrastructure, and other services.

2.2% Health Care REIT, Inc., REIT, Healthcare REITs

Health Care REIT, Inc. is a US-based real estate investment trust that invests in senior housing and health care real estate. The company also provides an extensive array of property management and development services. Health Care REIT owns interests in nursing homes, retirement centers, assisted living facilities, and specialty care hospitals.

Prudential Global Real Estate Fund 9

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

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Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period 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 Global Real Estate 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	$	1,113.10		1.31	%	$	6.90
	Hypothetical	$	1,000.00	$	1,018.40		1.31	%	$	6.59
Class B	Actual	$	1,000.00	$	1,109.50		2.01	%	$	10.57
	Hypothetical	$	1,000.00	$	1,014.91		2.01	%	$	10.10
Class C	Actual	$	1,000.00	$	1,109.50		2.01	%	$	10.57
	Hypothetical	$	1,000.00	$	1,014.91		2.01	%	$	10.10
Class Q	Actual	$	1,000.00	$	1,116.10		0.81	%	$	4.27
	Hypothetical	$	1,000.00	$	1,020.89		0.81	%	$	4.08
Class R	Actual	$	1,000.00	$	1,112.20		1.51	%	$	7.95
	Hypothetical	$	1,000.00	$	1,017.40		1.51	%	$	7.59
Class Z	Actual	$	1,000.00	$	1,115.20		1.01	%	$	5.33
	Hypothetical	$	1,000.00	$	1,019.90		1.01	%	$	5.09

*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 ended March 31, 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.

Prudential Global Real Estate Fund 11

Fees and Expenses (continued)

The Fund’s annualized expense ratios for the 12-month period ended March 31, 2015, are as follows:

Class	Gross Operating Expenses			Net Operating Expenses
A		1.27	%		1.27	%
B		1.97			1.97
C		1.97			1.97
Q		0.81			0.81
R		1.72			1.47
Z		0.97			0.97

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

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Portfolio of Investments

as of March 31, 2015

Description	Shares		Value (Note 1)
LONG-TERM INVESTMENTS    99.3%
COMMON STOCKS
Australia    6.1%
Charter Hall Office, REIT (Escrow Shares)*		590,800	$	—
Dexus Property Group, REIT		5,727,731		32,974,947
Federation Centres Ltd., REIT		7,309,450		16,872,546
Goodman Group, REIT		7,136,785		34,364,679
Investa Office Fund, REIT		3,755,455		11,128,110
Lend Lease Group		2,083,699		26,318,326
Mirvac Group, REIT		16,416,356		25,066,345
Novion Property Group Pty Ltd., REIT		7,723,650		14,713,302
Scentre Group, REIT		8,178,436		23,233,588
Stockland, REIT		3,933,525		13,439,219
Westfield Corp., REIT		6,563,739		47,568,141
				245,679,203
Austria    0.4%
CA Immobilien Anlagen AG*		774,431		14,497,858
Canada    1.7%
Boardwalk Real Estate Investment Trust, REIT		289,038		13,452,915
Brookfield Canada Office Properties, REIT		519,806		11,778,794
Canadian Apartment Properties, REIT		394,185		9,087,839
Chartwell Retirement Residences, REIT		2,039,342		19,901,518
RioCan Real Estate Investment Trust, REIT		552,137		12,629,118
				66,850,184
China    0.5%
Evergrande Real Estate Group Ltd.		19,085,000		9,620,325
Guangzhou R&F Properties Co. Ltd.		9,363,600		9,622,149
				19,242,474
France    3.3%
Fonciere des Regions, REIT*		17,431		1,682,149
Fonciere des Regions, REIT		253,490		25,101,443
Klepierre, REIT		713,762		35,049,955
Unibail-Rodamco SE, REIT		267,599		72,261,116
				134,094,663

See Notes to Financial Statements.

Prudential Global Real Estate Fund 13

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Germany    1.9%
Alstria Office REIT AG, REIT*		1,028,697	$	14,458,793
Deutsche Annington Immobilien SE		775,715		26,139,658
LEG Immobilien AG*		189,999		15,071,633
TLG Immobilien AG*		768,263		12,064,774
Westgrund AG*		1,612,158		8,910,015
				76,644,873
Hong Kong    7.6%
CK Hutchison Holdings Ltd.		1,998,776		40,836,039
Hang Lung Properties Ltd.		1,454,469		4,086,330
Henderson Land Development Co. Ltd.		4,435,300		31,158,272
Hongkong Land Holdings Ltd.		5,878,000		44,378,900
Hysan Development Co. Ltd.		2,076,000		9,099,725
Kerry Properties Ltd.		2,707,500		9,398,419
Link REIT (The), REIT		3,545,000		21,869,754
Sino Land Co. Ltd.		11,369,800		18,539,971
Sun Hung Kai Properties Ltd.		6,851,935		105,653,344
Wharf Holdings Ltd. (The)		3,218,000		22,464,364
				307,485,118
Ireland    1.2%
Green REIT PLC, REIT		9,825,914		17,284,784
Hibernia REIT PLC, REIT		14,608,968		18,378,629
Irish Residential Properties REIT PLC, REIT		9,950,530		10,752,761
				46,416,174
Japan    14.6%
Activia Properties, Inc., REIT		2,811		24,559,044
AEON REIT Investment Corp., REIT		10,170		14,579,739
Daito Trust Construction Co. Ltd.		241,400		26,956,111
Daiwa House Industry Co. Ltd.		1,975,400		38,935,656
Daiwa House REIT Investment Corp., REIT		3,288		14,410,412
GLP J-REIT, REIT		13,491		13,967,653
Japan Retail Fund Investment Corp., REIT		8,974		17,832,073
Mitsubishi Estate Co. Ltd.		4,995,780		115,861,965
Mitsui Fudosan Co. Ltd.		5,182,339		152,195,009
Nippon Building Fund, Inc., REIT		6,689		32,859,859
Nippon Prologis REIT, Inc., REIT		10,191		22,434,161
Nomura Real Estate Master Fund, Inc., REIT		16,531		20,540,990
Sumitomo Realty & Development Co. Ltd.		1,901,952		68,472,877

See Notes to Financial Statements.

14

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Japan (cont’d.)
Tokyu Fudosan Holdings Corp.		2,314,200	$	15,784,159
United Urban Investment Corp., REIT		6,954		10,840,698
				590,230,406
Mexico    0.3%
Prologis Property Mexico SA de CV, REIT*		5,600,457		10,060,152
Netherlands    0.7%
Eurocommercial Properties NV, REIT		327,683		15,018,869
Wereldhave NV, REIT		221,375		14,875,716
				29,894,585
Singapore    3.9%
Ascendas Real Estate Investment Trust, REIT		10,324,000		19,473,463
Cache Logistics Trust, REIT		14,889,800		12,733,771
CapitaLand Ltd.		7,347,000		19,150,489
Keppel REIT, REIT		37,039,800		32,396,107
Mapletree Commercial Trust, REIT		24,063,000		28,055,107
Mapletree Industrial Trust, REIT		14,629,800		16,828,849
Suntec Real Estate Investment Trust, REIT		22,672,000		30,619,747
				159,257,533
Sweden    1.0%
Atrium Ljungberg AB (Class B Stock)		942,975		14,376,505
Fabege AB		996,238		14,275,571
Hufvudstaden AB (Class A Stock)		936,416		12,841,086
				41,493,162
Switzerland    0.5%
PSP Swiss Property AG*		206,878		19,497,797
United Kingdom    6.8%
Big Yellow Group PLC, REIT		1,636,834		15,721,745
British Land Co. PLC (The), REIT		4,111,133		50,669,042
Capital & Counties Properties PLC		1,721,029		10,214,211
Derwent London PLC, REIT		326,570		16,549,850
Empiric Student Property PLC		5,800,053		8,872,628
Great Portland Estates PLC, REIT		2,318,967		27,862,062
Hammerson PLC, REIT		3,666,020		36,103,404
Land Securities Group PLC, REIT		3,125,404		58,023,735
Segro PLC, REIT		3,308,790		20,432,349

See Notes to Financial Statements.

Prudential Global Real Estate Fund 15

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
United Kingdom (cont’d.)
Shaftesbury PLC, REIT		1,218,942	$	14,992,959
Tritax Big Box REIT PLC, REIT		8,349,152		14,397,132
				273,839,117
United States    48.8%
Alexandria Real Estate Equities, Inc., REIT		358,278		35,125,575
American Campus Communities, Inc., REIT		750,507		32,174,235
Apartment Investment & Management Co., REIT (Class A Stock)		1,054,315		41,497,838
AvalonBay Communities, Inc., REIT		356,624		62,141,732
Boston Properties, Inc., REIT		524,132		73,630,063
Camden Property Trust, REIT		772,018		60,317,766
Cedar Realty Trust, Inc., REIT		2,503,134		18,748,474
Chatham Lodging Trust, REIT		453,371		13,333,641
Chesapeake Lodging Trust, REIT		825,364		27,922,064
Columbia Property Trust, Inc., REIT		1,243,626		33,602,775
DDR Corp., REIT		1,488,946		27,724,175
Empire State Realty Trust, Inc., REIT (Class A Stock)		2,245,091		42,230,162
Equity One, Inc., REIT		1,365,493		36,445,008
Excel Trust, Inc., REIT		377,535		5,293,041
First Industrial Realty Trust, Inc., REIT		1,823,445		39,076,426
First Potomac Realty Trust, REIT		2,647,626		31,480,273
General Growth Properties, Inc., REIT		2,276,943		67,283,666
HCP, Inc., REIT		1,189,528		51,399,505
Health Care REIT, Inc., REIT		1,146,351		88,681,713
Healthcare Trust of America, Inc., REIT (Class A Stock)		1,159,349		32,299,463
Hilton Worldwide Holdings, Inc.*		1,015,383		30,075,645
Home Properties, Inc., REIT		535,380		37,096,480
Hudson Pacific Properties, Inc., REIT		1,243,137		41,259,717
Kilroy Realty Corp., REIT		548,736		41,797,221
La Quinta Holdings, Inc.*		1,633,638		38,684,548
Macerich Co. (The), REIT		420,688		35,476,619
Medical Properties Trust, Inc., REIT		1,803,416		26,582,352
Physicians Realty Trust, REIT		2,299,898		40,501,204
Piedmont Office Realty Trust, Inc., REIT (Class A Stock)		1,632,056		30,372,562
Post Properties, Inc., REIT		1,029,832		58,628,336
ProLogis, Inc., REIT		2,009,950		87,553,422
Public Storage, REIT		202,206		39,862,891
Regency Centers Corp., REIT		553,400		37,653,336
RLJ Lodging Trust, REIT		1,012,698		31,707,574
Sabra Health Care REIT, Inc.		435,646		14,441,665

See Notes to Financial Statements.

16

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
United States (cont’d.)
Simon Property Group, Inc., REIT		938,128	$	183,535,362
SL Green Realty Corp., REIT		150,601		19,334,156
Sovran Self Storage, Inc., REIT		313,165		29,418,720
Spirit Realty Capital, Inc., REIT		2,653,164		32,050,221
STORE Capital Corp., REIT		970,170		22,653,470
Strategic Hotels & Resorts, Inc., REIT*		3,498,698		43,488,816
Sunstone Hotel Investors, Inc., REIT		2,116,213		35,277,271
Taubman Centers, Inc., REIT		496,510		38,295,816
UDR, Inc., REIT		1,714,830		58,355,665
Urban Edge Properties, REIT		1,074,372		25,462,616
Ventas, Inc., REIT		533,162		38,931,489
Vornado Realty Trust, REIT		287,044		32,148,928
				1,971,053,697
TOTAL LONG-TERM INVESTMENTS (cost $3,389,275,158)				4,006,236,996
SHORT-TERM INVESTMENT    0.7%
AFFILIATED MONEY MARKET MUTUAL FUND
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund (cost $28,424,587)(Note 3)(a)		28,424,587	$	28,424,587
TOTAL INVESTMENTS    100.0% (cost $3,417,699,745; Note 5)				4,034,661,583
Other assets in excess of liabilities				358,243
NET ASSETS    100.0%			$	4,035,019,826

The following abbreviations are used in the portfolio descriptions:

REIT—Real Estate Investment Trust

* Non-income producing security.

(a) Prudential Investments LLC, the manager of the Fund also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.

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.

See Notes to Financial Statements.

Prudential Global Real Estate Fund 17

Portfolio of Investments

as of March 31, 2015 continued

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
Australia	$	—	$	245,679,203	$	—
Austria		—		14,497,858		—
Canada		66,850,184		—		—
China		—		19,242,474		—
France		—		134,094,663		—
Germany		20,974,789		55,670,084		—
Hong Kong		44,378,900		263,106,218		—
Ireland		46,416,174		—		—
Japan		—		590,230,406		—
Mexico		10,060,152		—		—
Netherlands		—		29,894,585		—
Singapore		—		159,257,533		—
Sweden		14,376,505		27,116,657		—
Switzerland		—		19,497,797		—
United Kingdom		24,594,373		249,244,744		—
United States		1,971,053,697		—		—
Affiliated Money Market Mutual Fund		28,424,587		—		—
Total	$	2,227,129,361	$	1,807,532,222	$	—

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

Retail REITs	20.6	%
Diversified Real Estate Activities	16.2
Office REITs	12.0
Diversified REITs	11.4
Residential REITs	9.7
Health Care REITs	7.9
Industrial REITs	7.2
Real Estate Operating Companies	4.7
Hotel & Resort REITs	3.8	%
Specialized REITs	2.1
Real Estate Development	2.0
Hotels, Resorts & Cruise Lines	1.7
Affiliated Money Market Mutual Fund	0.7
	100.0
Other assets in excess of liabilities	—	*
	100.0	%

* Less than 0.05%

See Notes to Financial Statements.

18

The Portfolio invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk.

At March 31, 2015, the Portfolio did not have any derivative instruments in the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year 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	Rights(1)	Warrants(1)		Total
Equity contracts	$104,363	$	1,648,283	$1,752,646

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

See Notes to Financial Statements.

Prudential Global Real Estate Fund 19

Statement of Assets & Liabilities

as of March 31, 2015

Assets
Investments at value:
Unaffiliated investments (cost $3,389,275,158)	$	4,006,236,996
Affiliated investments (cost $28,424,587)		28,424,587
Receivable for investments sold		39,061,260
Receivable for Fund shares sold		12,023,784
Dividends and interest receivable		11,883,045
Tax reclaim receivable		2,044,136
Prepaid expenses		15,689
Total assets		4,099,689,497
Liabilities
Payable for investments purchased		48,772,821
Payable for Fund shares reacquired		11,878,657
Management fee payable		2,548,664
Accrued expenses and other liabilities		837,345
Distribution fee payable		438,464
Loan interest payable (Note 7)		748
Affiliated transfer agent fee payable		192,972
Total liabilities		64,669,671
Net Assets	$	4,035,019,826
Net assets were comprised of:
Shares of beneficial interest, at par	$	158,843
Paid-in capital in excess of par		3,498,949,946
		3,499,108,789
Distributions in excess of net investment income		(29,965,432	)
Accumulated net realized loss on investment and foreign currency transactions		(50,745,826	)
Net unrealized appreciation on investments and foreign currencies		616,622,295
Net assets, March 31, 2015	$	4,035,019,826

See Notes to Financial Statements.

20

Class A
Net asset value and redemption price per share, ($990,773,734 ÷ 39,070,655 shares of beneficial interest issued and outstanding)	$	25.36
Maximum sales charge (5.50% of offering price)		1.48
Maximum offering price to public	$	26.84
Class B
Net asset value, offering price and redemption price per share, ($17,232,998 ÷ 691,348 shares of beneficial interest issued and outstanding)	$	24.93
Class C
Net asset value, offering price and redemption price per share, ($191,917,383 ÷ 7,700,013 shares of beneficial interest issued and outstanding)	$	24.92
Class Q
Net asset value, offering price and redemption price per share, ($237,692,327 ÷ 9,337,750 shares of beneficial interest issued and outstanding)	$	25.45
Class R
Net asset value, offering price and redemption price per share, ($24,002,345 ÷ 948,464 shares of beneficial interest issued and outstanding)	$	25.31
Class Z
Net asset value, offering price and redemption price per share, ($2,573,401,039 ÷ 101,094,404 shares of beneficial interest issued and outstanding)	$	25.46

See Notes to Financial Statements.

Prudential Global Real Estate Fund 21

Statement of Operations

Year Ended March 31, 2015

Net Investment Income
Income
Unaffiliated dividend income (net of $3,807,882 foreign withholding tax)	$	99,267,445
Affiliated income from securities lending, net		110,136
Affiliated dividend income		52,607
Total income		99,430,188
Expenses
Management fee		27,397,146
Distribution fee—Class A		2,946,096
Distribution fee—Class B		175,168
Distribution fee—Class C		1,781,766
Distribution fee—Class R		142,505
Transfer agent’s fees and expenses (including affiliated expense of $964,900)		5,867,000
Custodian and accounting fees		713,000
Reports to shareholders		578,000
Registration fees		148,000
Trustees’ fees		88,000
Legal fees and expenses		43,000
Insurance fees		31,000
Audit fee		26,000
Loan interest expense		3,565
Commitment fees		3,000
Miscellaneous		195,890
Total expenses		40,139,136
Less: Distribution fee waiver—Class R		(47,502	)
Net expenses		40,091,634
Net investment income		59,338,554
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions		137,482,612
Foreign currency transactions		(1,377,895	)
		136,104,717
Net change in unrealized appreciation (depreciation) on:
Investments		313,363,798
Foreign currencies		(348,324	)
		313,015,474
Net gain on investments		449,120,191
Net Increase In Net Assets Resulting From Operations	$	508,458,745

See Notes to Financial Statements.

22

Statement of Changes in Net Assets

		Year Ended March 31,
		2015			2014
Increase (Decrease) in Net Assets
Operations
Net investment income		$	59,338,554		$	42,196,209
Net realized gain on investment and foreign currency transactions			136,104,717			8,184,770
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions			313,015,474			(22,296,738	)
Net increase in net assets resulting from operations			508,458,745			28,084,241
Dividends from net investment income (Note 1)
Class A			(25,473,520	)		(14,750,509	)
Class B			(348,114	)		(316,264	)
Class C			(3,775,204	)		(2,579,891	)
Class Q	��		(5,345,681	)		(402,552	)
Class R			(482,924	)		(259,759	)
Class Z			(70,432,085	)		(33,737,431	)
			(105,857,528	)		(52,046,406	)
Fund share transactions (Net of share conversions) (Note 6):
Net proceeds from shares sold			1,395,993,612			1,963,434,765
Net asset value of shares issued in reinvestment of dividends and distributions			73,076,454			35,243,399
Cost of shares reacquired			(966,875,419	)		(796,801,321	)
Net increase in net assets from Fund share transactions			502,194,647			1,201,876,843
Total increase in net assets			904,795,864			1,177,914,678
Net Assets:
Beginning of year			3,130,223,962			1,952,309,284
End of year		$	4,035,019,826		$	3,130,223,962

See Notes to Financial Statements.

Prudential Global Real Estate Fund 23

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (the “1940 Act”). The Trust currently consists of four funds: Prudential Global Real Estate Fund (the “Fund”), Prudential US Real Estate Fund, Prudential Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund. These financial statements relate only to Prudential Global Real Estate Fund. The financial statements of the other portfolios are not presented herein. The Trust was established as a Delaware business trust on October 24, 1997. The investment objective of the Fund is capital appreciation and income. It seeks to achieve this objective by investing primarily in equity securities of real estate companies.

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.

24

Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, 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 not valued using such model prices 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 Global Real Estate Fund 25

Notes to Financial Statements

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.

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

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

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

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the

26

market prices of long-term portfolio securities sold during the period. Accordingly, these realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.

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

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

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 of set-off existed and management has not elected to offset.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investments 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 the accrual basis. Expenses are recorded on the accrual basis, which may require the use of certain estimates by management that may differ from actual.

Prudential Global Real Estate Fund 27

Notes to Financial Statements

continued

Net investment income or loss (other than distribution fees which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share class) and unrealized and realized gains and 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.

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

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

Dividends and Distributions: The Fund expects to pay dividends of net investment income quarterly and distributions of net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations, 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 distributions in excess of net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.

28

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 income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign interest are recorded, net of reclaimable amounts, at the time the related income is earned.

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

Note 2. Agreements

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Real Estate Investors (“PREI”), which is a business unit of Prudential Investment Management (“PIM”). The subadvisory agreement provides that each subadviser furnishes investment advisory services in connection with the management of the Fund. In connection therewith, each subadviser is obligated to keep certain books and records of the Fund. PI pays for the services of the subadvisers, 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 .75% of the Fund’s average daily net assets. The effective management fee rate was .75% for the year ended March 31, 2015.

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C, Class R, Class Q and Class Z shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B, Class C and Class R shares, pursuant to plans of distribution (the “Class A, B, C and R 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 Q and Class Z shares of the Fund.

Pursuant to the Class A, B, C and R Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30%, 1%, 1% and .75% of the average daily net assets of the Class A, B, C and R shares, respectively. PIMS has contractually

Prudential Global Real Estate Fund 29

Notes to Financial Statements

continued

agreed to limit such fees to .50% of the average daily net assets of the Class R shares through July 31, 2016.

PIMS has advised the Fund that it has received $571,390 in front-end sales charges resulting from sales of Class A during the year ended March 31, 2015. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that it has received $35,314, $24,647 and $17,237 in contingent deferred sales charges imposed upon certain redemptions by Class A, Class B and Class C shareholders, respectively, during the year ended March 31, 2015.

PI and PIMS 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 also include certain out-of-pocket expenses paid to non-affiliates, where applicable.

Prudential Investment Management, Inc. (“PIM”), an indirect, wholly-owned subsidiary of Prudential, is the 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 year ended March 31, 2015, PIM was compensated approximately $32,700 for these services.

The Fund invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of 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 year ended March 31, 2015, were $2,378,530,838 and $1,913,398,323, respectively.

30

Note 5. Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. In order to present distributions in excess of net investment income, accumulated net realized loss on investment and foreign currency transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to distributions in excess of net investment income and accumulated net realized loss on investment and foreign currency transactions. For the year ended March 31, 2015, the adjustments were to decrease distributions in excess of net investment income and increase accumulated net realized loss on investment and foreign currency transactions by $38,471,867 due to differences in the treatment for book and tax purposes of certain transactions involving foreign securities and currencies, investments in passive foreign investment companies and other book to tax differences. Net investment income, net realized gain (loss) on investments and foreign currency transactions and net assets were not affected by this change.

For the years ended March 31, 2015 and March 31, 2014, the tax character of dividends paid by the Fund were $105,857,528 and $52,046,406 of ordinary income, respectively.

As of March 31, 2015, the accumulated undistributed earnings on a tax basis was $22,443,574 from ordinary income. This differs from the amount on the Statement of Assets and Liabilities primarily due to cumulative timing differences.

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

Tax Basis	Appreciation	Depreciation	Net Unrealized Appreciation	Other cost Basis Adjustments	Total Net Unrealized Appreciation
$3,491,026,891	$595,462,193	$(51,827,501)	$543,634,692	$(339,543)	$543,295,149

The difference between book basis and tax basis is primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies. Other cost basis adjustments are attributable to net depreciation on foreign currency transactions.

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), the Fund is permitted to carryforward capital losses realized on or after April 1, 2011 (“post-enactment losses”) for an unlimited period. Post-enactment losses are required

Prudential Global Real Estate Fund 31

Notes to Financial Statements

continued

to be utilized before the utilization of losses incurred prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before March 31, 2012 (“pre-enactment losses”) may have an increased likelihood to expire unused. The Fund utilized approximately $77,477,000 of its pre-enactment losses to offset net taxable gains realized in the fiscal year ended March 31, 2015. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of March 31, 2015, the pre and post-enactment losses were approximately:

Post-Enactment Losses:	$	0
Pre-Enactment Losses:
Expiring 2018		28,028,000
Expiring 2019		1,800,000
	$	29,828,000

Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Note 6. Capital

The Fund offers Class A, Class B, Class C, Class Q, Class R and Class Z shares. Class A shares are sold with a front-end sales charge of up to 5.5%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a CDSC which declines from 5% to zero depending on the period of time the shares are held. Class C shares are sold with a CDSC of 1% during the first 12 months. Class B shares automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class B shares are closed to new purchases. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class R, Class Q 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.

32

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.

At March 31, 2015, Prudential through its affiliates owned 485 Class Q shares of the Fund.

The Trust has authorized an unlimited number of shares of beneficial interest, $.001 par value per share, divided into six classes, designated Class A, Class B, Class C, Class Q, Class R and Class Z.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended March 31, 2015:
Shares sold		12,966,154		$	316,542,363
Shares issued in reinvestment of dividends and distributions		963,240			23,359,198
Shares reacquired		(11,659,586	)		(284,914,719	)
Net increase (decrease) in shares outstanding before conversion		2,269,808			54,986,842
Shares issued upon conversion from Class B, Class C and Class Z		289,497			7,084,155
Shares reacquired upon conversion into Class Z		(4,483,116	)		(110,631,370	)
Net increase (decrease) in shares outstanding		(1,923,811	)	$	(48,560,373	)
Year ended March 31, 2014:
Shares sold		22,218,572		$	496,714,341
Shares issued in reinvestment of dividends and distributions		623,153			13,137,208
Shares reacquired		(11,409,413	)		(254,092,121	)
Net increase (decrease) in shares outstanding before conversion		11,432,312			255,759,428
Shares issued upon conversion from Class B, Class C and Class Z		237,565			5,327,415
Shares reacquired upon conversion into Class Z		(422,774	)		(9,498,759	)
Net increase (decrease) in shares outstanding		11,247,103		$	251,588,084
Class B
Year ended March 31, 2015:
Shares sold		88,270		$	2,098,258
Shares issued in reinvestment of dividends and distributions		11,796			282,370
Shares reacquired		(78,780	)		(1,887,471	)
Net increase (decrease) in shares outstanding before conversion		21,286			493,157
Shares reacquired upon conversion into Class A		(88,455	)		(2,112,643	)
Net increase (decrease) in shares outstanding		(67,169	)	$	(1,619,486	)
Year ended March 31, 2014:
Shares sold		256,969		$	5,768,885
Shares issued in reinvestment of dividends and distributions		12,857			266,845
Shares reacquired		(171,547	)		(3,758,755	)
Net increase (decrease) in shares outstanding before conversion		98,279			2,276,975
Shares reacquired upon conversion into Class A		(79,304	)		(1,711,913	)
Net increase (decrease) in shares outstanding		18,975		$	565,062

Prudential Global Real Estate Fund 33

Notes to Financial Statements

continued

Class C	Shares			Amount
Year ended March 31, 2015:
Shares sold		2,058,000		$	49,259,580
Shares issued in reinvestment of dividends and distributions		125,340			2,999,406
Shares reacquired		(1,073,612	)		(25,751,267	)
Net increase (decrease) in shares outstanding before conversion		1,109,728			26,507,719
Shares reacquired upon conversion into Class A and Class Z		(234,772	)		(5,643,856	)
Net increase (decrease) in shares outstanding		874,956		$	20,863,863
Year ended March 31, 2014:
Shares sold		2,471,770		$	55,293,810
Shares issued in reinvestment of dividends and distributions		94,903			1,971,076
Shares reacquired		(1,277,101	)		(27,935,864	)
Net increase (decrease) in shares outstanding before conversion		1,289,572			29,329,022
Shares reacquired upon conversion into Class A and Class Z		(148,926	)		(3,283,564	)
Net increase (decrease) in shares outstanding		1,140,646		$	26,045,458
Class Q*
Year ended March 31, 2015:
Shares sold		6,589,766		$	163,744,981
Shares issued in reinvestment of dividends and distributions		219,335			5,345,681
Shares reacquired		(1,128,400	)		(28,587,525	)
Net increase (decrease) in shares outstanding before conversion		5,680,701			140,503,137
Shares issued upon conversion from Class Z		1,266,853			32,318,414
Net increase (decrease) in shares outstanding		6,947,554		$	172,821,551
Period ended March 31, 2014:
Shares sold		1,557,812		$	34,575,839
Shares issued in reinvestment of dividends and distributions		18,508			402,552
Shares reacquired		(43,529	)		(976,758	)
Net increase (decrease) in shares outstanding before conversion		1,532,791			34,001,633
Shares issued upon conversion from Class Z		857,405			18,399,911
Net increase (decrease) in shares outstanding		2,390,196		$	52,401,544

34

Class R	Shares			Amount
Year ended March 31, 2015
Shares sold		623,726		$	15,285,878
Shares issued in reinvestment of dividends and distributions		17,493			423,774
Shares reacquired		(314,215	)		(7,703,919	)
Net increase (decrease) in shares outstanding		327,004		$	8,005,733
Year ended March 31, 2014:
Shares sold		460,601		$	10,318,292
Shares issued in reinvestment of dividends and distributions		9,972			209,198
Shares reacquired		(422,226	)		(9,308,285	)
Net increase (decrease) in shares outstanding		48,347		$	1,219,205
Class Z
Year ended March 31, 2015:
Shares sold		34,491,176		$	849,062,552
Shares issued in reinvestment of dividends and distributions		1,669,934			40,666,025
Shares reacquired		(25,000,650	)		(618,030,518	)
Net increase (decrease) in shares outstanding before conversion		11,160,460			271,698,059
Shares issued upon conversion from Class A and Class C		4,686,825			116,101,843
Shares reacquired upon conversion into Class A and Class Q		(1,461,003	)		(37,116,543	)
Net increase (decrease) in shares outstanding		14,386,282		$	350,683,359
Year ended March 31, 2014:
Shares sold		60,109,236		$	1,360,763,598
Shares issued in reinvestment of dividends and distributions		907,537			19,256,520
Shares reacquired		(22,470,809	)		(500,729,538	)
Net increase (decrease) in shares outstanding before conversion		38,545,964			879,290,580
Shares issued upon conversion from Class A and Class C		564,326			12,717,240
Shares reacquired upon conversion into Class A and Class Q		(1,013,249	)		(21,950,330	)
Net increase (decrease) in shares outstanding		38,097,041		$	870,057,490

* Commencement of offering was August 26, 2013.

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% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.08% 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.

Prudential Global Real Estate Fund 35

Notes to Financial Statements

continued

The Fund utilized the SCA during the year ended March 31, 2015. The average daily balance for the 9 days that the Fund had loans outstanding during the period was $10,045,444 borrowed at a weighted average interest rate of 1.42%. The maximum loan outstanding amount during the period was $18,195,000. At March 31, 2015, the Fund did not have an outstanding loan amount.

Note 8. New Accounting Pronouncement

In May 2015, the Financial Accounting Standards Board (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.

36

Financial Highlights

Class A Shares
	Year Ended March 31,
	2015			2014			2013			2012			2011
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$22.59			$22.84			$19.79			$19.43			$16.83
Income (loss) from investment operations
Net investment income		.36			.33			.33			.33			.35
Net realized and unrealized gain (loss) on investment transactions		3.06			(.15	)		3.39			.37			2.75
Total from investment operations		3.42			.18			3.72			.70			3.10
Less Dividends:
Dividends from net investment income		(.65	)		(.43	)		(.67	)		(.34	)		(.50	)
Net asset value, end of year		$25.36			$22.59			$22.84			$19.79			$19.43
Total Return(a)		15.26%			.92%			19.07%			3.75%			18.57%
Ratios/Supplemental Data:
Net assets, end of year (000)		$990,774			$926,156			$679,524			$368,183			$281,427
Average net assets (000)		$982,032			$806,577			$470,031			$302,768			$214,086
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.27%			1.26%			1.27%			1.27%			1.30%
Expenses before waivers and/or expense reimbursement		1.27%			1.26%			1.27%			1.27%			1.30%
Net investment income		1.47%			1.47%			1.59%			1.77%			1.92%
Portfolio turnover		53%			32%			20%			20%			29%

(a) 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 year reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

See Notes to Financial Statements.

Prudential Global Real Estate Fund 37

Financial Highlights

continued

Class B Shares
	Year Ended March 31,
	2015			2014			2013			2012			2011
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$22.24			$22.61			$19.62			$19.29			$16.70
Income (loss) from investment operations
Net investment income		.18			.18			.19			.21			.24
Net realized and unrealized gain (loss) on investment transactions		3.01			(.16	)		3.36			.34			2.70
Total from investment operations		3.19			.02			3.55			.55			2.94
Less Dividends:
Dividends from net investment income		(.50	)		(.39	)		(.56	)		(.22	)		(.35	)
Net asset value, end of year		$24.93			$22.24			$22.61			$19.62			$19.29
Total Return(a)		14.44%			.24%			18.30%			2.97%			17.74%
Ratios/Supplemental Data:
Net assets, end of year (000)		$17,233			$16,866			$16,721			$12,671			$14,451
Average net assets (000)		$17,517			$17,712			$13,595			$13,320			$13,028
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.97%			1.96%			1.97%			1.97%			2.00%
Expenses before waivers and/or expense reimbursement		1.97%			1.96%			1.97%			1.97%			2.00%
Net investment income		.77%			.80%			.94%			1.11%			1.33%
Portfolio turnover		53%			32%			20%			20%			29%

(a) 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 year reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

See Notes to Financial Statements.

38

Class C Shares
	Year Ended March 31,
	2015			2014			2013			2012			2011
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$22.23			$22.61			$19.62			$19.29			$16.69
Income (loss) from investment operations
Net investment income		.18			.17			.19			.20			.20
Net realized and unrealized gain (loss) on investment transactions		3.01			(.16	)		3.36			.35			2.75
Total from investment operations		3.19			.01			3.55			.55			2.95
Less Dividends:
Dividends from net investment income		(.50	)		(.39	)		(.56	)		(.22	)		(.35	)
Net asset value, end of year		$24.92			$22.23			$22.61			$19.62			$19.29
Total Return(a)		14.45%			.19%			18.30%			2.97%			17.81%
Ratios/Supplemental Data:
Net assets, end of year (000)		$191,917			$151,751			$128,517			$86,546			$68,703
Average net assets (000)		$178,177			$146,043			$99,523			$78,213			$47,954
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.97%			1.96%			1.97%			1.97%			2.00%
Expenses before waivers and/or expense reimbursement		1.97%			1.96%			1.97%			1.97%			2.00%
Net investment income		.75%			.79%			.92%			1.06%			1.14%
Portfolio turnover		53%			32%			20%			20%			29%

(a) 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 year reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

See Notes to Financial Statements.

Prudential Global Real Estate Fund 39

Financial Highlights

continued

Class Q Shares
	Year Ended March 31, 2015			August 26, 2013(d) through March 31, 2014
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$22.69			$21.46
Income (loss) from investment operations
Net investment income		.46			.26
Net realized and unrealized gain on investment transactions		3.08			1.15
Total from investment operations		3.54			1.41
Less Dividends:
Dividends from net investment income		(.78	)		(.18	)
Net asset value, end of period		$25.45			$22.69
Total Return(a)		15.77%			6.60%
Ratios/Supplemental Data:
Net assets, end of period (000)		$237,692			$54,236
Average net assets (000)		$140,024			$39,266
Ratios to average net assets(e):
Expenses after waivers and/or expense reimbursement		.81%			.83%	(c)
Expenses before waivers and/or expense reimbursement		.81%			.83%	(c)
Net investment income		1.84%			1.93%	(c)
Portfolio turnover		53%			32%	(f)

(a) 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 for periods of less than one full year are not annualized. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

(c) Annualized.

(d) Commencement of operations.

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

(f) Not annualized.

See Notes to Financial Statements.

40

Class R Shares
	Year Ended March 31,
	2015			2014			2013			2012			2011
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$22.55			$22.82			$19.77			$19.42			$16.81
Income (loss) from investment operations
Net investment income		.30			.29			.29			.28			.30
Net realized and unrealized gain (loss) on investment transactions		3.06			(.16	)		3.39			.37			2.76
Total from investment operations		3.36			.13			3.68			.65			3.06
Less Dividends:
Dividends from net investment income		(.60	)		(.40	)		(.63	)		(.30	)		(.45	)
Net asset value, end of year		$25.31			$22.55			$22.82			$19.77			$19.42
Total Return(a)		15.03%			.72%			18.89%			3.50%			18.37%
Ratios/Supplemental Data:
Net assets, end of year (000)		$24,002			$14,014			$13,078			$5,523			$3,032
Average net assets (000)		$19,001			$14,324			$8,527			$4,203			$1,823
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		1.47%			1.46%			1.47%			1.47%			1.50%
Expenses before waivers and/or expense reimbursement		1.72%			1.71%			1.72%			1.72%			1.75%
Net investment income		1.22%			1.31%			1.36%			1.52%			1.64%
Portfolio turnover		53%			32%			20%			20%			29%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

See Notes to Financial Statements.

Prudential Global Real Estate Fund 41

Financial Highlights

continued

Class Z Shares
	Year Ended March 31,
	2015			2014			2013			2012			2011
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$22.69			$22.93			$19.85			$19.50			$16.89
Income (loss) from investment operations
Net investment income		.43			.39			.39			.38			.37
Net realized and unrealized gain (loss) on investment transactions		3.07			(.15	)		3.42			.36			2.80
Total from investment operations		3.50			.24			3.81			.74			3.17
Less Dividends:
Dividends from net investment income		(.73	)		(.48	)		(.73	)		(.39	)		(.56	)
Net asset value, end of year		$25.46			$22.69			$22.93			$19.85			$19.50
Total Return(a)		15.60%			1.22%			19.50%			3.99%			18.97%
Ratios/Supplemental Data:
Net assets, end of year (000)		$2,573,401			$1,967,200			$1,114,469			$517,935			$324,886
Average net assets (000)		$2,316,203			$1,626,256			$723,880			$406,631			$191,320
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursement		.97%			.96%			.97%			.97%			1.00%
Expenses before waivers and/or expense reimbursement		.97%			.96%			.97%			.97%			1.00%
Net investment income		1.75%			1.75%			1.86%			2.03%			2.01%
Portfolio turnover		53%			32%			20%			20%			29%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

See Notes to Financial Statements.

42

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

We have audited the accompanying statement of assets and liabilities of Prudential Global Real Estate Fund (hereafter referred to as the “Fund”), a series of Prudential Investment Portfolios 12, including the portfolio of investments, as of March 31, 2015, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of March 31, 2015, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 15, 2015

Prudential Global Real Estate Fund 43

Federal Income Tax Information

(Unaudited)

For the year ended March 31, 2015, the Fund reports the maximum amount allowable, but not less than 24.02% of the ordinary income dividends paid during the year as qualified dividend income in accordance with Section 854 of the Internal Revenue Code.

In January 2016, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the dividends received by you in calendar year 2015.

44

Results of Proxy Voting

(Unaudited)

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential Investment Portfolios, Inc. 12 which is comprised of Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Short Duration Muni High Income Fund and Prudential Long-Short Equity Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:

To elect twelve Directors:

	SHARES VOTED		% OF VOTED		% OF TOTAL
(a) Ellen S. Alberding;
FOR		130,451,075.265		99.405		82.566
WITHHELD		782,095.872		0.595		0.495
(b) Kevin J. Bannon;
FOR		130,464,262.065		99.415		82.575
WITHHELD		768,909.072		0.585		0.486
(c) Linda W. Bynoe;
FOR		130,450,136.572		99.404		82.566
WITHHELD		783,034.565		0.596		0.495
(d) Keith F. Hartstein;
FOR		130,418,994.870		99.380		82.546
WITHHELD		814,176.267		0.620		0.515
(e) Michael S. Hyland;
FOR		130,411,843.871		99.375		82.542
WITHHELD		821,327.266		0.625		0.519
(f) Stephen P. Munn;
FOR		130,356,575.651		99.333		82.507
WITHHELD		876,595.486		0.667		0.554
(g) James E. Quinn;
FOR		130,446,726.994		99.401		82.564
WITHHELD		786,444.143		0.599		0.497
(h) Richard A. Redeker;
FOR		130,311,471.503		99.298		82.478
WITHHELD		921,699.634		0.702		0.583
(i) Stephen G. Stoneburn;
FOR		130,356,065.699		99.332		82.506
WITHHELD		877,105.438		0.668		0.555
(j) Stuart S. Parker;
FOR		130,468,581.093		99.418		82.578
WITHHELD		764,590.044		0.582		0.483

Prudential Global Real Estate Fund 45

Results of Proxy Voting

(Unaudited) continued

	SHARES VOTED		% OF VOTED		% OF TOTAL
(k) Scott E. Benjamin; and
FOR		130,474,677.168		99.423		82.581
WITHHELD		758,493.969		0.577		0.480
(l) Grace C. Torres.
FOR		130,486,922.341		99.432		82.589
WITHHELD		746,248.796		0.568		0.472

The special meeting of shareholders of the Prudential Global Real Estate Fund (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 proposal 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 proposal:

Proposal: 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		61,047,160.007		49.765			40.963
AGAINST		868,898.605		0.709			0.583
ABSTAIN		556,855.670		0.453			0.373
BROKER NON-VOTE		60,200,188.789		49.073			40.394
TOTAL		122,673,103.071		100.000	%		82.313

46

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

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

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (57) Board Member Portfolios Overseen: 62	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (62) Board Member Portfolios Overseen: 62	Managing Director (since April 2008) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (62) Board Member Portfolios Overseen: 62	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Prudential Global Real Estate Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Keith F. Hartstein (58) Board Member Portfolios Overseen: 62	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Michael S. Hyland, CFA (69) Board Member Portfolios Overseen: 62	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.
Stephen P. Munn (72) Board Member Portfolios Overseen: 62	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).
James E. Quinn (63) Board Member Portfolios Overseen: 62	Retired; formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1994).	Director of Deckers Outdoor Corporation (footwear manufacturer) (since 2011).
Richard A. Redeker (71) Board Member & Independent Chair Portfolios Overseen: 62	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.

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Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stephen G. Stoneburn (71) Board Member Portfolios Overseen: 62	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (52) Board Member & President Portfolios Overseen: 62	President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).	None.
Scott E. Benjamin (42) Board Member & Vice President Portfolios Overseen: 62	Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (55) Board Member Portfolios Overseen: 60	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of Prudential Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	None.

* Note: Prior to her retirement in 2014, Ms. Torres was employed by Prudential Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a non-management Interested Board Member.

Prudential Global Real Estate Fund

⁽¹⁾  The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 2003; Stephen G. Stoneburn, 2001;Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (59) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (39) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of Prudential Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Investments Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006–December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (57) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (56) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (40) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005
Andrew R. French (52) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006

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Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Amanda S. Ryan (37) Assistant Secretary	Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray LLP (2008-2012).	Since 2012
Theresa C. Thompson (52) Deputy Chief Compliance Officer	Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).	Since 2008
Richard W. Kinville (46) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).	Since 2011
M. Sadiq Peshimam (51) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of Prudential Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (56) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (47) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (53) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (46) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a)  Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Prudential Global Real Estate Fund

Explanatory Notes to Tables:

• Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC.

• Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

• There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

• “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

• “Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which Prudential Investments LLC serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

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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 • Kelley A. Coyne, Assistant Treasurer

MANAGER	Prudential Investments LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
INVESTMENT SUBADVISER	Prudential Real Estate Investors	7 Giralda Farms Madison, NJ 07940
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 Global Real Estate 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.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

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

PRUDENTIAL GLOBAL REAL ESTATE FUND

SHARE CLASS	A	B	C	Q	R	Z
NASDAQ	PURAX	PURBX	PURCX	PGRQX	PURRX	PURZX
CUSIP	744336108	744336207	744336306	744336876	744336405	744336504

MF182E    0277388-00001-00

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

PRUDENTIAL US REAL ESTATE FUND

ANNUAL REPORT ^· MARCH 31, 2015

Objective

Capital appreciation and income

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

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

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Prudential Real Estate Investors, also known as PREI, is a unit of Prudential Investment Management, Inc. (PIM), a registered investment adviser. PIMS and PIM are Prudential Financial companies. ^© 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, PREI, 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.

May 15, 2015

Dear Shareholder:

We hope you find the annual report for the Prudential US Real Estate Fund informative and useful. The report covers performance for the 12-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,

Stuart S. Parker, President

Prudential US Real Estate Fund

Prudential US Real Estate 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
	One Year			Since Inception
Class A		23.06	%		71.73% (12/21/10)
Class B		22.05			66.54    (12/21/10)
Class C		22.09			66.34    (12/21/10)
Class Z		23.35			73.62    (12/21/10)
FTSE NAREIT Equity REITs Index		23.95			78.59
S&P 500 Index		12.71			79.85
Lipper Equity Real Estate Funds Average		22.21			72.36
Average Annual Total Returns (With Sales Charges) as of 3/31/15
	One Year			Since Inception
Class A		16.29	%		11.99% (12/21/10)
Class B		17.05			12.51    (12/21/10)
Class C		21.09			12.64    (12/21/10)
Class Z		23.35			13.77    (12/21/10)
FTSE NAREIT Equity REITs Index		23.95			14.62
S&P 500 Index		12.71			14.81
Lipper Equity Real Estate Funds Average		22.21			13.62
Average Annual Total Returns (Without Sales Charges) as of 3/31/15
	One Year			Since Inception
Class A		23.06	%		13.48% (12/21/10)
Class B		22.05			12.67    (12/21/10)
Class C		22.09			12.64    (12/21/10)
Class Z		23.35			13.77    (12/21/10)

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential US Real Estate Fund (Class A shares) with a similar investment in the FTSE NAREIT Equity REITs Index, by portraying the initial account values at the commencement of operations for Class A shares (December 21, 2010) and the account values at the end of the current fiscal year (March 31, 2015) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class B, Class C, and Class Z shares will vary due to the differing charges and expenses applicable to each share class (as explained in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: Prudential Investments LLC and Lipper Inc.

Inception date: 12/21/10.

Prudential US Real Estate Fund 3

Your Fund’s Performance (continued)

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

	Class A	Class B*	Class C	Class Z
Maximum initial sales charge	5.50% 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	5% (Yr.1) 4% (Yr.2) 3% (Yr.3) 2% (Yr.4) 1% (Yr.5&6) 0% (Yr.7)	1% on sales made within 12 months of purchase	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	.30% (.25% currently)	1%	1%	None

*Class B shares are closed to all purchase activity and no additional Class B shares may be purchased or acquired except by exchange from Class B shares of another Fund or through dividend or capital gains reinvestment.

Benchmark Definitions

FTSE NAREIT Equity REITs Index

The Financial Times Stock Exchange National Association of Real Estate Investment Trusts (FTSE NAREIT) Equity REITs Index is an unmanaged index which measures the performance of all real estate investment trusts listed on the New York Stock Exchange, the NASDAQ National Market, and the NYSE Amex Equities. The index is designed to reflect the performance of all publically-traded equity REITs as a whole.

S&P 500 Index

The S&P 500 Index is an unmanaged index of 500 stocks of large U.S. public companies. It is a broad representation of how U.S. stock prices have performed.

Lipper Equity Real Estate Funds Average

The Lipper Equity Real Estate Funds Average (Lipper Average) is based on an average return of all funds in the Lipper Equity Real Estate Funds category for the periods noted. Funds in the Lipper Average invest their portfolios primarily in shares of domestic companies engaged in the real estate industry.

Investors cannot invest directly in an index or average. The securities in the Indexes may be very different from those in the Fund. Index returns do not include the effect of sales charges and operating expenses of a mutual fund or taxes and would be lower if they did. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to inception date, and not from the Fund’s actual inception date.

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Five Largest Holdings expressed as a percentage of net assets as of 3/31/15
Simon Property Group, Inc., Retail REITs	9.8	%
Health Care REIT, Inc., Health Care REITs	4.8
Prologis, Inc., Industrial REITs	4.4
Boston Properties, Inc., Office REITs	4.0
AvalonBay Communities, Inc., Residential REITs	3.2

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

Five Largest Industries expressed as a percentage of net assets as of 3/31/15
Retail REITs	24.6	%
Residential REITs	17.3
Health Care REITs	15.3
Office REITs	14.9
Hotel & Resort REITs	8.2

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

Prudential US Real Estate Fund 5

Strategy and Performance Overview

How did the Fund perform?

For the 12-month reporting period ended March 31, 2015, the Prudential US Real Estate Fund’s (the Fund) Class A shares gained 23.06%, underperforming the 23.95% return of the FTSE NAREIT Equity REITs Index (the Index). However, during the same period, the Fund outperformed the 22.21% return of the Lipper Equity Real Estate Funds Average and the 12.71% return of the S&P 500 Index.

What were the conditions like in the US real estate stock market?

During the reporting period, the economic backdrop remained favorable for US real estate investment trust (REIT) fundamentals, with occupancies and rental rates continuing to improve. However, lower oil prices weighed on demand and kept many private real estate investors on the sidelines. In energy-dependent cities, such as Houston, hotel revenue growth flattened and even turned downward. Supply was generally muted across most markets and property types, with the exception of apartment, industrial, and some hotel markets.

Which holdings or related groups of holdings made the largest positive and negative contribution to the Fund’s return?

• Stock selection added most to relative performance during the reporting period. More specifically, the Fund benefited from its investments in the health care, retail, industrial, and triple net sectors. A triple net refers to a type of lease agreement in which the tenant is responsible for paying the building’s property taxes, insurance, and maintenance.

• An underweight position in the triple net sector versus the Index also enhanced relative results.

• Offsetting some of these gains was stock selection in the residential and hotel sectors.

• In addition, Fund performance was dampened by overweight positions in the hotels and industrials sectors and underweight positions in the health care, specialty, and residential sectors.

Did any tactical shifts in portfolio risk characteristics, including significant sales and purchases, affect the Fund?

• The largest tactical shift during the period was an increase in the Fund’s allocation to the health care sector. More specifically, the Fund was moved from an underweight position relative to the Index to an overweight position.

• In addition, the Fund’s allocation to the storage sector was decreased from an overweight to an underweight.

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• The Fund was also shifted from an overweight allocation to the office sector to an underweight allocation.

What is the outlook for the US real estate securities markets?

In the U.S., REITs continue to improve operating fundamentals and Prudential Real Estate Investors (PREI), the Fund’s Subadviser, believes there are strong opportunities in 2015. Given economic concerns, however, volatility spikes remain likely. PREI expects mergers and acquisitions as well as privatization activity to heat up.

Employment centers that focus on technology, health care, and media/entertainment are expected to deliver relatively strong jobs growth. Markets that are dependent on the government and financial sectors are being monitored for signs of improvement. At the end of the reporting period, as uncertainty remained around the direction of interest rates and global economic growth, PREI maintained its focus on companies with strong relative cash flow growth, and on certain re-development and/or development opportunities, that trade at reasonable valuations relative to their private market value. At the same time, PREI is finding value in B-quality apartment companies, which continue to be relatively insulated from new supply. Other opportunities have been identified among certain service hotels as revenue trends remain favorable. Also, at the end of the period, the Fund was underweight in energy-related markets as lower oil prices continued to dampen investor sentiment.

Prudential US Real Estate Fund 7

Comments on Largest Holdings

9.8% Simon Property Group, Inc., Retail REITs

Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust. The company owns, develops, and manages retail real estate properties, including regional malls, outlet centers, community/lifestyle centers, and international properties.

4.8% Health Care REIT, Inc., Health Care REITs

Health Care REIT, Inc. is a real estate investment trust that invests in senior housing and health care real estate. The company also provides an extensive array of property management and development services. Health Care REIT owns interests in nursing homes, retirement centers, assisted living facilities, and specialty care hospitals.

4.4% Prologis, Inc., Industrial REITs

Prologis, Inc. is an owner, operator, and developer of industrial real estate, focusing on global and regional markets across the Americas, Europe, and Asia. The company also leases modern distribution facilities to customers, including manufacturers, retailers, transportation companies, third-party logistics providers, and other enterprises.

4.0% Boston Properties, Inc., Office REITs

Boston Properties, Inc. is a real estate investment trust that owns, manages, and develops office properties in the US, with a significant presence in Boston, Washington, D.C., midtown Manhattan, and San Francisco.

3.2% AvalonBay Communities, Inc., Residential REITs

AvalonBay Communities, Inc. is a real estate investment trust that develops, redevelops, acquires, owns, and operates multifamily communities in the US.

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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 US Real Estate Fund 9

Fees and Expenses (continued)

Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period 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 US Real Estate 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	$	1,186.70		1.60	%	$	8.72
	Hypothetical	$	1,000.00	$	1,016.95		1.60	%	$	8.05
Class B	Actual	$	1,000.00	$	1,182.20		2.35	%	$	12.79
	Hypothetical	$	1,000.00	$	1,013.21		2.35	%	$	11.80
Class C	Actual	$	1,000.00	$	1,182.50		2.35	%	$	12.79
	Hypothetical	$	1,000.00	$	1,013.21		2.35	%	$	11.80
Class Z	Actual	$	1,000.00	$	1,188.90		1.35	%	$	7.37
	Hypothetical	$	1,000.00	$	1,018.20		1.35	%	$	6.79

*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 ended March 31, 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 annualized expense ratios for the 12-month period ended March 31, 2015, are as follows:

Class	Gross Operating Expenses			Net Operating Expenses
A		1.85	%		1.60	%
B		2.55			2.35
C		2.55			2.35
Z		1.55			1.35

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 US Real Estate Fund 11

Portfolio of Investments

as of March 31, 2015

Description	Shares		Value (Note 1)
LONG-TERM INVESTMENTS    98.3%
COMMON STOCKS
Diversified REITs    5.9%
Empire State Realty Trust, Inc. (Class A Stock)		46,500	$	874,665
First Potomac Realty Trust		55,618		661,298
Spirit Realty Capital, Inc.		56,051		677,096
Store Capital Corp.		20,612		481,290
				2,694,349
Health Care REITs    15.3%
Chartwell Retirement Residences (Canada)		11,487		112,099
HCP, Inc.		26,625		1,150,466
Health Care REIT, Inc.		27,879		2,156,719
Healthcare Trust of America, Inc. (Class A Stock)		26,155		728,678
Medical Properties Trust, Inc.		40,354		594,818
Physicians Realty Trust		56,145		988,714
Sabra Health Care REIT, Inc.		11,724		388,651
Ventas, Inc.		11,435		834,984
				6,955,129
Hotel & Resort REITs    8.2%
Chatham Lodging Trust		14,496		426,327
Chesapeake Lodging Trust		15,807		534,751
RLJ Lodging Trust		27,595		863,999
Strategic Hotels & Resorts, Inc.*		77,576		964,270
Sunstone Hotel Investors, Inc.		54,344		905,915
				3,695,262
Hotels, Resorts & Cruise Lines    3.4%
Hilton Worldwide Holdings, Inc.*		22,467		665,472
La Quinta Holdings, Inc.*		36,450		863,136
				1,528,608
Industrial REITs    6.6%
First Industrial Realty Trust, Inc.		45,871		983,015
Prologis, Inc.		46,150		2,010,294
				2,993,309
Office REITs    14.9%
Alexandria Real Estate Equities, Inc.		7,912		775,692
Boston Properties, Inc.		12,748		1,790,839

See Notes to Financial Statements.

Prudential US Real Estate Fund 13

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Office REITs (cont’d.)
Brookfield Canada Office Properties (Canada)		10,386	$	235,347
Columbia Property Trust, Inc.		27,488		742,726
Hudson Pacific Properties, Inc.		32,640		1,083,322
Kilroy Realty Corp.		13,383		1,019,383
Piedmont Office Realty Trust, Inc. (Class A Stock)		31,458		585,433
SL Green Realty Corp.		4,031		517,500
				6,750,242
Residential REITs    17.3%
American Campus Communities, Inc.		16,045		687,849
Apartment Investment & Management Co. (Class A Stock)		23,313		917,600
AvalonBay Communities, Inc.		8,235		1,434,949
Camden Property Trust		17,249		1,347,664
Home Properties, Inc.		12,662		877,350
Post Properties, Inc.		22,750		1,295,158
UDR, Inc.		37,406		1,272,926
				7,833,496
Retail REITs    24.6%
Cedar Realty Trust, Inc.		56,637		424,211
DDR Corp.		33,923		631,646
Equity One, Inc.		29,365		783,752
Excel Trust, Inc.		8,247		115,623
General Growth Properties, Inc.		43,893		1,297,038
Macerich Co. (The)		10,343		872,225
Regency Centers Corp.		13,596		925,072
Simon Property Group, Inc.		22,718		4,444,550
Slate Retail Reit (Canada)		11,484		115,697
Taubman Centers, Inc.		11,079		854,523
Urban Edge Properties		28,297		670,639
				11,134,976
Specialized REITs    2.1%
Public Storage		1,569		309,313
Sovran Self Storage, Inc.		6,982		655,889
				965,202
TOTAL LONG-TERM INVESTMENTS (cost $36,255,401)				44,550,573

See Notes to Financial Statements.

14

Description	Shares		Value (Note 1)
SHORT-TERM INVESTMENT
AFFILIATED MONEY MARKET MUTUAL FUND
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund (cost $5,301) (Note 3)(a)		5,301	$	5,301
TOTAL INVESTMENTS    98.3% (cost $36,260,702; Note 5)				44,555,874
Other assets in excess of liabilities    1.7%				748,199
NET ASSETS    100.0%			$	45,304,073

The following abbreviation is used in the portfolio descriptions:

REIT—Real Estate Investment Trust

* Non-income producing security.

(a) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.

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.

See Notes to Financial Statements.

Prudential US Real Estate Fund 15

Portfolio of Investments

as of March 31, 2015 continued

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
Diversified REITs	$	2,694,349	$	—	$	—
Health Care REITs		6,955,129		—		—
Hotel & Resort REITs		3,695,262		—		—
Hotels, Resorts & Cruise Lines		1,528,608		—		—
Industrial REITs		2,993,309		—		—
Office REITs		6,750,242		—		—
Residential REITs		7,833,496		—		—
Retail REITs		11,134,976		—		—
Specialized REITs		965,202		—		—
Affiliated Money Market Mutual Fund		5,301		—		—
Total	$	44,555,874	$	—	$	—

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

Retail REITs	24.6	%
Residential REITs	17.3
Health Care REITs	15.3
Office REITs	14.9
Hotel & Resort REITs	8.2
Industrial REITs	6.6
Diversified REITs	5.9
Hotels, Resorts & Cruise Lines	3.4	%
Specialized REITs	2.1
	98.3
Other assets in excess of liabilities	1.7
	100.0	%

See Notes to Financial Statements.

16

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

FINANCIAL STATEMENTS

ANNUAL REPORT ^· MARCH 31, 2015

Prudential US Real Estate Fund

Statement of Assets & Liabilities

as of March 31, 2015

Assets
Investments at value:
Unaffiliated investments (cost $36,255,401)	$	44,550,573
Affiliated investments (cost $5,301)		5,301
Receivable for investments sold		1,311,928
Receivable for Fund shares sold		151,719
Dividends receivable		118,449
Prepaid expenses		282
Total assets		46,138,252
Liabilities
Payable for investments purchased		695,847
Accrued expenses		72,557
Payable for Fund shares reacquired		36,498
Management fee payable		22,794
Distribution fee payable		4,373
Affiliated transfer agent fee payable		1,995
Loan interest payable		115
Total liabilities		834,179
Net Assets	$	45,304,073
Net assets were comprised of:
Shares of beneficial interest, at par	$	3,063
Paid-in capital in excess of par		35,093,531
		35,096,594
Undistributed net investment income		94,534
Accumulated net realized gain on investment transactions and foreign currency transactions		1,818,060
Net unrealized appreciation on investments and foreign currencies		8,294,885
Net assets, March 31, 2015	$	45,304,073

See Notes to Financial Statements.

18

Class A
Net asset value and redemption price per share,
($6,502,409 ÷ 439,280 shares of beneficial interest issued and outstanding)	$	14.80
Maximum sales charge (5.50% of offering price)		0.86
Maximum offering price to public	$	15.66
Class B
Net asset value, offering price and redemption price per share,
($1,814,191 ÷ 124,072 shares of beneficial interest issued and outstanding)	$	14.62
Class C
Net asset value, offering price and redemption price per share,
($1,768,986 ÷ 121,166 shares of beneficial interest issued and outstanding)	$	14.60
Class Z
Net asset value, offering price and redemption price per share,
($35,218,487 ÷ 2,378,965 shares of beneficial interest issued and outstanding)	$	14.80

See Notes to Financial Statements.

Prudential US Real Estate Fund 19

Statement of Operations

Year Ended March 31, 2015

Net Investment Income
Income
Unaffiliated dividend income (net of foreign withholding taxes of $1,509)	$	1,004,493
Affiliated dividend income		712
Total income		1,005,205
Expenses
Management fee		336,873
Distribution fee—Class A		14,183
Distribution fee—Class B		14,804
Distribution fee—Class C		12,438
Registration fees		67,000
Custodian and accounting fees		62,000
Audit fee		24,000
Reports to shareholders		23,000
Legal fees and expenses		21,000
Transfer agent’s fees and expenses (including affiliated expense of $7,800)		17,000
Trustees’ fees		14,000
Insurance fees		1,000
Loan interest expense		598
Miscellaneous		14,815
Total expenses		622,711
Less: Management fee waiver and/or expense reimbursement		(75,378	)
Distribution fee waiver—Class A		(2,364	)
Net expenses		544,969
Net investment income		460,236
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions		3,895,464
Foreign currency transactions		(1,221	)
		3,894,243
Net change in unrealized appreciation (depreciation) on:
Investments		3,444,551
Foreign currencies		(287	)
		3,444,264
Net gain on investments		7,338,507
Net Increase In Net Assets Resulting From Operations	$	7,798,743

See Notes to Financial Statements.

20

Statement of Changes in Net Assets

	Year Ended March 31,
	2015			2014
Increase (Decrease) in Net Assets
Operations
Net investment income	$	460,236		$	260,238
Net realized gain on investment and foreign currency transactions		3,894,243			667,503
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		3,444,264			336,525
Net increase in net assets resulting from operations		7,798,743			1,264,266
Dividends and Distributions (Note 1)
Dividends from net investment income:
Class A		(44,609	)		(20,811	)
Class B		(5,672	)		(3,653	)
Class C		(4,820	)		(2,953	)
Class Z		(348,278	)		(216,354	)
		(403,379	)		(243,771	)
Distributions from net realized gains:
Class A		(250,972	)		(100,339	)
Class B		(80,873	)		(38,251	)
Class C		(68,723	)		(30,927	)
Class Z		(1,611,724	)		(741,545	)
		(2,012,292	)		(911,062	)
Fund share transactions (Net of share conversions) (Note 6)
Net proceeds from shares sold		12,126,539			11,968,995
Net asset value of shares issued in reinvestment of dividends and distributions		2,370,051			1,148,193
Cost of shares reacquired		(7,613,897	)		(7,033,947	)
Net increase in net assets from Fund share transactions		6,882,693			6,083,241
Total increase		12,265,765			6,192,674
Net Assets:
Beginning of year		33,038,308			26,845,634
End of year(a)	$	45,304,073		$	33,038,308
(a) Includes undistributed net investment income of:	$	94,534		$	38,880

See Notes to Financial Statements.

Prudential US Real Estate Fund 21

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”). The Trust currently consists of four funds: Prudential Global Real Estate Fund, Prudential US Real Estate Fund (the “Fund”), Prudential Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund. These financial statements relate only to Prudential US Real Estate Fund. The Fund commenced investment operations on December 21, 2010. The financial statements of the other portfolios are not presented herein. The Trust was established as a Delaware business trust on October 24, 1997. The investment objective of the Fund is capital appreciation and income. It seeks to achieve this objective by investing primarily in equity securities of real estate companies operating in the United States.

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.

22

Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, 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 US Real Estate Fund 23

Notes to Financial Statements

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.

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

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

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

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the

24

market prices of long-term portfolio securities sold during the period. Accordingly, these realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.

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

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

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investments 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 the accrual basis. Expenses are recorded on the 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 and 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.

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 a return of capital and recorded accordingly. These estimates are adjusted when the actual source of distributions is disclosed by the REITs.

Dividends and Distributions: The Fund expects to pay dividends of net investment income quarterly and distributions of net realized capital and currency gains, if any,

Prudential US Real Estate Fund 25

Notes to Financial Statements

continued

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: 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 are recorded net of reclaimable amounts, at the time the related income is earned.

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

Note 2. Agreements

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all the investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Real Estate Investors (“PREI”), which is a business unit of Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that the subadviser furnish investment advisory services in connection with the management of the Fund. In connection therewith, the subadviser is obligated to keep certain books and records of the Fund. PI pays for the services of the subadviser, 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 .90% of the average daily net assets. The effective management fee rate, net of waivers and/or expense reimbursement, was ..70%.

For the year ended March 31, 2015, PI has contractually agreed to limit net annual Fund operating expenses (exclusive of distribution and service (12b-1) fees, interest, dividend and interest expense on short sales, brokerage, taxes, extraordinary and certain other expenses) of each class of shares to 1.35% of the Fund’s average daily net assets.

26

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

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30%, 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively. For the year ended March 31, 2015, PIMS contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares.

PIMS has advised the Fund that it has received $62,484 in front-end sales charges resulting from sales of Class A shares during the year ended March 31, 2015. From these fees, PIMS paid such sales charges to broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended March 31, 2015, it has received $2,393 and $125 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively.

PI, PIMS, and PIM 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 invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of 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 year ended March 31, 2015, were $41,377,783 and $36,388,202 respectively.

Prudential US Real Estate Fund 27

Notes to Financial Statements

continued

Note 5. Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. In order to present undistributed net investment income, accumulated net realized gain on investment and foreign currency transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income and accumulated net realized gain on investment and foreign currency transactions. For the year ended March 31, 2015, the adjustments were to decrease undistributed net investment income and increase accumulated net realized gain on investment and foreign currency transactions by $1,203, due to differences in the treatment for book and tax purposes of certain transactions involving foreign securities and currencies and investments in passive foreign investment companies. Net investment income, net realized gain on investment and foreign currency transactions and net assets were not affected by this change.

For the year ended March 31, 2015, the tax character of dividends paid by the Fund were $1,046,567 from ordinary income and $1,369,104 from long-term capital gains. For the year ended March 31, 2014, the tax character of dividends paid by the Fund were $405,192 from ordinary income and $749,641 from long-term capital gains.

As of March 31, 2015, the accumulated undistributed earnings on a tax basis were $431,412 of ordinary income and $1,626,857 of long-term capital gains. This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing differences between financial and tax reporting.

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

Tax Basis	Appreciation	Depreciation	Net Unrealized Appreciation	Other Cost Basis Adjustments	Total Net Unrealized Appreciation
$36,406,377	$8,424,488	$(274,991)	$8,149,497	$(287)	$8,149,210

The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales and other book to tax differences. The other cost basis adjustments are primarily attributable to appreciation (depreciation) of foreign currencies and mark-to-market of receivables and payables.

28

Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Note 6. Capital

The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are sold with front-end sales charge of up to 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a CDSC which declines from 5% to zero depending upon the period of time the shares are held. Class B shares automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class B shares are closed to new purchases. Class C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months of purchase. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value per share.

As of March 31, 2015, Prudential owned 997,482 Class Z shares of the Fund.

Prudential US Real Estate Fund 29

Notes to Financial Statements

continued

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended March 31, 2015:
Shares sold		313,666		$	4,485,704
Shares issued in reinvestment of dividends and distributions		18,345			256,094
Shares reacquired		(130,361	)		(1,880,814	)
Net increase (decrease) in shares outstanding before conversion		201,650			2,860,984
Shares issued upon conversion from Class B		1,818			25,486
Shares reacquired upon conversion into Class Z		(5,072	)		(70,876	)
Net increase (decrease) in shares outstanding		198,396		$	2,815,594
Year ended March 31, 2014:
Shares sold		232,289		$	2,888,997
Shares issued in reinvestment of dividends and distributions		9,798			115,272
Shares reacquired		(159,727	)		(1,961,754	)
Net increase (decrease) in shares outstanding before conversion		82,360			1,042,515
Shares issued upon conversion from Class B		1,067			13,443
Shares reacquired upon conversion into Class Z		(163	)		(2,225	)
Net increase (decrease) in shares outstanding		83,264		$	1,053,733
Class B
Year ended March 31, 2015:
Shares sold		49,244		$	676,908
Shares issued in reinvestment of dividends and distributions		6,117			84,415
Shares reacquired		(13,715	)		(188,024	)
Net increase (decrease) in shares outstanding before conversion		41,646			573,299
Shares reacquired upon conversion into Class A		(1,839	)		(25,486	)
Net increase (decrease) in shares outstanding		39,807		$	547,813
Year ended March 31, 2014:
Shares sold		40,156		$	514,634
Shares issued in reinvestment of dividends and distributions		3,572			41,577
Shares reacquired		(66,379	)		(832,708	)
Net increase (decrease) in shares outstanding before conversion		(22,651	)		(276,497	)
Shares reacquired upon conversion into Class A		(1,075	)		(13,443	)
Net increase (decrease) in shares outstanding		(23,726	)	$	(289,940	)

30

Class C	Shares			Amount
Year ended March 31, 2015:
Shares sold		68,039		$	966,130
Shares issued in reinvestment of dividends and distributions		5,051			69,600
Shares reacquired		(19,468	)		(273,093	)
Net increase (decrease) in shares outstanding		53,622		$	762,637
Year ended March 31, 2014:
Shares sold		32,168		$	410,796
Shares issued in reinvestment of dividends and distributions		2,878			33,444
Shares reacquired		(21,556	)		(269,243	)
Net increase (decrease) in shares outstanding		13,490		$	174,997
Class Z
Year ended March 31, 2015:
Shares sold		423,139		$	5,997,797
Shares issued in reinvestment of dividends and distributions		140,493			1,959,942
Shares reacquired		(382,549	)		(5,271,966	)
Net increase (decrease) in shares outstanding before conversion		181,083			2,685,773
Shares issued upon conversion from Class A		5,069			70,876
Net increase (decrease) in shares outstanding		186,152		$	2,756,649
Year ended March 31, 2014:
Shares sold		660,233		$	8,154,568
Shares issued in reinvestment of dividends and distributions		81,151			957,900
Shares reacquired		(317,864	)		(3,970,242	)
Net increase (decrease) in shares outstanding before conversion		423,520			5,142,226
Shares issued upon conversion from Class A		163			2,225
Net increase (decrease) in shares outstanding		423,683		$	5,144,451

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% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the 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.

Prudential US Real Estate Fund 31

Notes to Financial Statements

continued

The Fund utilized the SCA during the year ended March 31, 2015. The average daily balance for the 27 days that the Fund had loans outstanding during the period was $566,963, borrowed at a weighted average interest rate of 1.41%. The maximum amount borrowed during the period was $2,677,000. At March 31, 2015, the Fund did not have an outstanding loan amount.

Note 8. New Accounting Pronouncement

In May 2015, the Financial Accounting Standards Board (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.

32

Financial Highlights

Class A Shares
	Year Ended March 31,												December 21, 2010(e) through March 31, 2011
	2015			2014			2013			2012
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$12.78			$12.86			$11.75			$10.79			$10.00
Income (loss) from investment operations:
Net investment income (loss)		.15			.10			.07			.06			(.02	)
Net realized and unrealized gain on investments		2.74			.39			1.39			1.02			.81
Total from investment operations		2.89			.49			1.46			1.08			.79
Less Dividends and Distributions:
Dividends from net investment income		(.13	)		(.10	)		(.06	)		(.09	)		-	(c)
Distributions from net realized gains		(.74	)		(.47	)		(.29	)		(.03	)		-
Total dividends and distributions		(.87	)		(.57	)		(.35	)		(.12	)		-	(c)
Net Asset Value, end of period		$14.80			$12.78			$12.86			$11.75			$10.79
Total Return(a):		23.06%			4.20%			12.70%			10.09%			7.94%
Ratios/Supplemental Data:
Net assets, end of period (000)		$6,502			$3,080			$2,027			$727			$262
Average net assets (000)		$4,728			$2,687			$1,234			$445			$104
Ratios to average net assets(d):
Expense After Waivers and/or Expense Reimbursement		1.60%			1.60%			1.60%			1.60%			1.60%	(f)
Expense Before Waivers and/or Expense Reimbursement		1.85%			2.05%			1.96%			2.30%			7.06%	(f)
Net investment income (loss)		1.06%			.79%			.61%			.60%			(.66)%	(f)
Portfolio turnover rate		98%			66%			53%			51%			4%	(g)

(a) 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 returns for periods less than one full year are not annualized.

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

(c) Less than $0.005.

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

(e) Commencement of operations.

(f) Annualized.

(g) Not annualized.

See Notes to Financial Statements.

Prudential US Real Estate Fund 33

Financial Highlights

continued

Class B Shares
	Year Ended March 31,												December 21, 2010(d) through March 31, 2011
	2015			2014			2013			2012
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$12.67			$12.78			$11.72			$10.77			$10.00
Income (loss) from investment operations:
Net investment income (loss)		.05			.03			(.02	)		(.05	)		(.06	)
Net realized and unrealized gain on investments		2.69			.37			1.38			1.06			.83
Total from investment operations		2.74			.40			1.36			1.01			.77
Less Dividends and Distributions:
Dividends from net investment income		(.05	)		(.04	)		(.01	)		(.03	)		-
Distributions from net realized gains		(.74	)		(.47	)		(.29	)		(.03	)		-
Total dividends and distributions		(.79	)		(.51	)		(.30	)		(.06	)		-
Net Asset Value, end of period		$14.62			$12.67			$12.78			$11.72			$10.77
Total Return(a):		22.05%			3.53%			11.80%			9.46%			7.70%
Ratios/Supplemental Data:
Net assets, end of period (000)		$1,814			$1,067			$1,380			$450			$41
Average net assets (000)		$1,480			$1,244			$950			$125			$10
Ratios to average net assets(c):
Expense After Waivers and/or Expense Reimbursement		2.35%			2.35%			2.35%			2.35%			2.35%	(e)
Expense Before Waivers and/or Expense Reimbursement		2.55%			2.73%			2.66%			2.77%			7.76%	(e)
Net investment income (loss)		.35%			.21%			(.13)%			(.46)%			(2.13)%	(e)
Portfolio turnover rate		98%			66%			53%			51%			4%	(f)

(a) 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 returns for periods less than one full year are not annualized.

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

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

(d) Commencement of operations.

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

34

Class C Shares
	Year Ended March 31,												December 21, 2010(d) through March 31, 2011
	2015			2014			2013			2012
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$12.65			$12.76			$11.70			$10.77			$10.00
Income (loss) from investment operations:
Net investment income (loss)		.04			.02			(.01	)		(.04	)		(.05	)
Net realized and unrealized gain on investments		2.70			.38			1.37			1.03			.82
Total from investment operations		2.74			.40			1.36			.99			.77
Less Dividends and Distributions:
Dividends from net investment income		(.05	)		(.04	)		(.01	)		(.03	)		-
Distributions from net realized gains		(.74	)		(.47	)		(.29	)		(.03	)		-
Total dividends and distributions		(.79	)		(.51	)		(.30	)		(.06	)		-
Net Asset Value, end of period		$14.60			$12.65			$12.76			$11.70			$10.77
Total Return(a):		22.09%			3.54%			11.82%			9.28%			7.70%
Ratios/Supplemental Data:
Net assets, end of period (000)		$1,769			$854			$690			$107			$29
Average net assets (000)		$1,244			$824			$401			$72			$7
Ratios to average net assets(c):
Expense After Waivers and/or Expense Reimbursement		2.35%			2.35%			2.35%			2.35%			2.35%	(e)
Expense Before Waivers and/or Expense Reimbursement		2.55%			2.75%			2.65%			3.02%			7.76%	(e)
Net investment income (loss)		.31%			.12%			(.12)%			(.33)%			(1.83)%	(e)
Portfolio turnover rate		98%			66%			53%			51%			4%	(f)

(a) 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 returns for periods less than one full year are not annualized.

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

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

(d) Commencement of operations.

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

Prudential US Real Estate Fund 35

Financial Highlights

continued

Class Z Shares
	Year Ended March 31,												December 21, 2010(d) through March 31, 2011
	2015			2014			2013			2012
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$12.79			$12.86			$11.75			$10.79			$10.00
Income (loss) from investment operations:
Net investment income		.19			.14			.11			.10			.02
Net realized and unrealized gain on investments		2.72			.39			1.38			1.00			.78
Total from investment operations		2.91			.53			1.49			1.10			.80
Less Dividends and Distributions:
Dividends from net investment income		(.16	)		(.13	)		(.09	)		(.11	)		(.01	)
Distributions from net realized gains		(.74	)		(.47	)		(.29	)		(.03	)		-
Total dividends and distributions		(.90	)		(.60	)		(.38	)		(.14	)		(.01	)
Net Asset Value, end of period		$14.80			$12.79			$12.86			$11.75			$10.79
Total Return(a):		23.27%			4.55%			12.96%			10.36%			8.00%
Ratios/Supplemental Data:
Net assets, end of period (000)		$35,218			$28,037			$22,749			$18,843			$14,359
Average net assets (000)		$29,979			$21,876			$20,014			$15,035			$13,065
Ratios to average net assets(c):
Expense After Waivers and/or Expense Reimbursement		1.35%			1.35%			1.35%			1.35%			1.35%	(e)
Expense Before Waivers and/or Expense Reimbursement		1.55%			1.74%			1.69%			2.08%			6.76%	(e)
Net investment income		1.34%			1.08%			.90%			.89%			.78%	(e)
Portfolio turnover rate		98%			66%			53%			51%			4%	(f)

(a) 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 returns for periods less than one full year are not annualized.

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

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

(d) Commencement of operations.

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

36

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

We have audited the accompanying statement of assets and liabilities of Prudential US Real Estate Fund (hereafter referred to as the “Fund”), a series of Prudential Investment Portfolios 12, including the portfolio of investments, as of March 31, 2015, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the four-year period then ended and for the period December 21, 2010 (commencement of operations) through March 31, 2011. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of March 31, 2015, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 15, 2015

Prudential US Real Estate Fund 37

Federal Income Tax Information

(Unaudited)

We are advising you that during the fiscal year ended March 31, 2015, the Fund reported the maximum amount allowed per share but not less than $0.51 per share for Class A, B, C and Z shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.

For the fiscal year ended March 31, 2015, the Fund reports the maximum amount allowable but not less than 90.21% of ordinary income dividends paid during the year as short-term capital gain distributions in accordance with Section 871(k)(2) and 881(e)(2) of the Internal Revenue Code. Short-term capital gain distributions do not include any distributions paid by a fund with respect to Fund tax years beginning after March 31, 2015. Consequently, the provision expires with respect to such distributions paid after the Fund’s fiscal year end.

In January 2016, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2015.

38

Results of Proxy Voting

(Unaudited)

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential Investment Portfolios, Inc. 12 which is comprised of Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Short Duration Muni High Income Fund and Prudential Long-Short Equity Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:

To elect twelve Directors:

	SHARES VOTED		% OF VOTED		% OF TOTAL
(a) Ellen S. Alberding;
FOR		130,451,075.265		99.405		82.566
WITHHELD		782,095.872		0.595		0.495
(b) Kevin J. Bannon;
FOR		130,464,262.065		99.415		82.575
WITHHELD		768,909.072		0.585		0.486
(c) Linda W. Bynoe;
FOR		130,450,136.572		99.404		82.566
WITHHELD		783,034.565		0.596		0.495
(d) Keith F. Hartstein;
FOR		130,418,994.870		99.380		82.546
WITHHELD		814,176.267		0.620		0.515
(e) Michael S. Hyland;
FOR		130,411,843.871		99.375		82.542
WITHHELD		821,327.266		0.625		0.519
(f) Stephen P. Munn;
FOR		130,356,575.651		99.333		82.507
WITHHELD		876,595.486		0.667		0.554
(g) James E. Quinn;
FOR		130,446,726.994		99.401		82.564
WITHHELD		786,444.143		0.599		0.497
(h) Richard A. Redeker;
FOR		130,311,471.503		99.298		82.478
WITHHELD		921,699.634		0.702		0.583
(i) Stephen G. Stoneburn;
FOR		130,356,065.699		99.332		82.506
WITHHELD		877,105.438		0.668		0.555
(j) Stuart S. Parker;
FOR		130,468,581.093		99.418		82.578
WITHHELD		764,590.044		0.582		0.483
(k) Scott E. Benjamin; and
FOR		130,474,677.168		99.423		82.581
WITHHELD		758,493.969		0.577		0.480
(l) Grace C. Torres.
FOR		130,486,922.341		99.432		82.578
WITHHELD		746,248.796		0.568		0.472

Prudential US Real Estate Fund 39

Results of Proxy Voting

(Unaudited) continued

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential US Real Estate Fund (the “Fund”), approved the following proposal:

Proposal: 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; and

	SHARES VOTED		% OF VOTED			% OF TOTAL
FOR		2,047,464.755		88.377			81.100
AGAINST		3,498.064		0.151			0.138
ABSTAIN		4,447.960		0.192			0.176
BROKER NON-VOTE		261,345.065		11.280			10.352
TOTAL		2,316,755.844		100.000	%		91.766	%

40

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

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

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (57) Board Member Portfolios Overseen: 62	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (62) Board Member Portfolios Overseen: 62	Managing Director (since April 2008) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (62) Board Member Portfolios Overseen: 62	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Prudential US Real Estate Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Keith F. Hartstein (58) Board Member Portfolios Overseen: 62	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Michael S. Hyland, CFA (69) Board Member Portfolios Overseen: 62	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.
Stephen P. Munn (72) Board Member Portfolios Overseen: 62	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).
James E. Quinn (63) Board Member Portfolios Overseen: 62	Retired; formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1994).	Director of Deckers Outdoor Corporation (footwear manufacturer) (since 2011).
Richard A. Redeker (71) Board Member & Independent Chair Portfolios Overseen: 62	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.

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Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stephen G. Stoneburn (71) Board Member Portfolios Overseen: 62	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (52) Board Member & President Portfolios Overseen: 62	President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).	None.
Scott E. Benjamin (42) Board Member & Vice President Portfolios Overseen: 62	Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (55) Board Member Portfolios Overseen: 60	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of Prudential Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	None.

* Note: Prior to her retirement in 2014, Ms. Torres was employed by Prudential Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a non-management Interested Board Member.

Prudential US Real Estate Fund

⁽¹⁾  The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 2003; Stephen G. Stoneburn, 2001;Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (59) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (39) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of Prudential Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Investments Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006–December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (57) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (56) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (40) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005
Andrew R. French (52) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006

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Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Amanda S. Ryan (37) Assistant Secretary	Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray LLP (2008-2012).	Since 2012
Theresa C. Thompson (52) Deputy Chief Compliance Officer	Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).	Since 2008
Richard W. Kinville (46) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).	Since 2011
M. Sadiq Peshimam (51) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of Prudential Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (56) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (47) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (53) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (46) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a)  Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Prudential US Real Estate Fund

Explanatory Notes to Tables:

• Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC.

• Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

• There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

• “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

• “Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which Prudential Investments LLC serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

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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	Prudential Real Estate Investors	7 Giralda Farms Madison, NJ 07940
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 US Real Estate 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.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

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

PRUDENTIAL US REAL ESTATE FUND

SHARE CLASS	A	B	C	Z
NASDAQ	PJEAX	PJEBX	PJECX	PJEZX
CUSIP	744336603	744336702	744336801	744336884

MF209E    0277389-00001-00

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

PRUDENTIAL SHORT DURATION MUNI HIGH INCOME FUND

ANNUAL REPORT ^· MARCH 31, 2015

Objective

Maximum amount of income that is eligible for exclusion from federal income taxes

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

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

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Prudential Fixed Income is a unit of Prudential Investment Management, Inc. (PIM), a registered investment adviser. PIMS and PIM are 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.

May 15, 2015

Dear Shareholder:

We hope you find the annual report for the Prudential Short Duration Muni High Income Fund informative and useful. The report covers performance since the Fund’s inception on May 29, 2014 until 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,

Stuart S. Parker, President

Prudential Short Duration Muni High Income Fund

Prudential Short Duration Muni High Income 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
	Since Inception
Class A	3.43% (5/29/14)
Class C	2.69    (5/29/14)
Class Z	3.65    (5/29/14)
Barclays Short Duration Muni 50% HG / 50% HY Index	2.45
Lipper High Yield Municipal Debt Funds Average	6.09
Average Annual Total Returns (With Sales Charges) as of 3/31/15
	Since Inception
Class A	N/A (5/29/14)
Class C	N/A (5/29/14)
Class Z	N/A (5/29/14)
Barclays Short Duration Muni 50% HG / 50% HY Index	N/A
Lipper High Yield Municipal Debt Funds Average	N/A
Average Annual Total Returns (Without Sales Charges) as of 3/31/15
	Since Inception
Class A	N/A (5/29/14)
Class C	N/A (5/29/14)
Class Z	N/A (5/29/14)

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential Short Duration Muni High Income Fund (Class A shares) with a similar investment in the Barclays Short Duration Muni 50% HG/50% HY Index, by portraying the initial account values at the commencement of operations for Class A shares (May 29, 2014) and the account values at the end of the current fiscal year (March 31, 2015) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class C and Class Z shares will vary due to the differing charges and expenses applicable to each share class (as explained in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: Prudential Investments LLC and Lipper Inc.

Inception returns are provided for any share class with less than 10 calendar years.

Prudential Short Duration Muni High Income Fund 3

Your Fund’s Performance (continued)

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

	Class A	Class C	Class Z
Maximum initial sales charge	3.25% of the public offering price	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
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	.25%	1%	None

Benchmark Definitions

Barclays Short Duration Muni 50% HG / 50% HY Index

The Barclays Short Duration Muni 50% HG / 50% HY Index consists of the Barclays Municipal Bond 1-8 Year Index (50%), which is an unmanaged index that includes all benchmark eligible investment grade municipal bonds with maturities from 1 to 8 years and the Barclays Municipal High Yield 1-8 Year Index (50%), which is an unmanaged index that includes all benchmark-eligible Ba1 or lower rated and non-rated municipal bonds with maturities from 1 to 8 years. An investment cannot be made directly in an index.

Lipper High Yield Municipal Debt Funds Average

The Lipper High Yield Municipal Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper Loan Participation Funds category for the periods noted. The Lipper High Yield Municipal Debt Funds Average consist of Funds that typically invest 50% or more of their assets in municipal debt issues rated BBB or less.

Investors cannot invest directly in an index. 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. The Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date, and not from the Fund’s actual inception date.

Five Largest Holdings expressed as a percentage of net assets as of 3/31/15
Golden State Tobacco Securitization Corp., Revenue, Asset-Backed, Series A-1, Rfdg, 4.500%, 06/01/27	3.0	%
Port Authority of New York & New Jersey, Revenue, JFK International Air Terminal, 5.000%, 12/01/20	2.5
Tobacco Settlement Finance Corp., Revenue, Series 1A, Rfdg, 4.500%, 06/01/23	2.1
Arizona Health Facilities Authority, Revenue, Banner Health, Series B, 0.981%, 01/01/37	2.0
Iowa Finance Authority, Revenue, Iowa Fertilizer Co. Project, Rfdg, 5.000%, 12/01/19	1.7

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

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Distributions and Yields as of 3/31/15
	Total Distributions Paid for Period* ended 3/31/15		30-Day SEC Yield
Class A		$0.17		2.19	%
Class C		0.10		1.51
Class Z		0.19		2.50

* Commencement of operations was May 29, 2014

Credit Quality expressed as a percentage of total investments as of 3/31/15
AA	9.58	%
A	14.64
BBB	34.29
BB	18.07
B	11.03
Not Rated	12.26
Cash/Cash Equivalents	0.13
Total Investments	100.0	%

Source: PIM.

Credit ratings reflect the highest rating assigned by Moody’s, S&P or Fitch. Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, Moody’s ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. The Not Rated category consists of securities that have not been rated by Moody’s, S&P or Fitch. Credit ratings are subject to change.

Prudential Short Duration Muni High Income Fund 5

Strategy and Performance Overview

How did the Fund perform?

The Prudential Short Duration Muni High Income Fund’s Class A shares returned 3.43% from the Fund’s inception on May 29, 2014 through March 31, 2015, outperforming the 2.45% return of the Barclays Short Duration Muni 50% HG/50% HY Index (the Index) but underperforming the 6.09% return of the Lipper High Yield Municipal Debt Funds Average.

What were conditions like in the municipal bond market?

• Municipal securities exhibited solid performance during the reporting period. Mutual fund cash flows were steadily positive throughout the reporting period while supply remained manageable. When a fund receives large flows of cash, it can be negatively affected by a higher than normal cash balance. If the market is performing well, the fund could miss out on the strong overall market performance, due to the time it takes to add suitable investments.

• Interest rates predominantly declined during the reporting period. Federal Reserve policy remained accommodative in the face of soft employment data, muted inflation expectations, and ongoing geopolitical concerns. During the latter part of the reporting period, the market began to price in eventual interest rate hikes.

• Despite favorable technical attributes, municipal bonds underperformed Treasuries, as the municipal market was unable to keep pace with a strong Treasury rally.

• The low absolute level of interest rates, which has persisted for several years, caused an exhaustion of much of the would-be refunding supply during the early part of the reporting period. However, a further decline in interest rates later on drove a resurgence in refunding volume. In a refunding deal, an issuer reduces its interest expense by redeeming outstanding bonds and issuing new bonds at a lower interest rate.

• Investors continued to react to the headlines coming from Puerto Rico, enduring multiple credit rating agency downgrades for debt associated with the Commonwealth and its public corporations. The municipal market continued to treat these issues as non-systemic, and was still able to rally.

• In general, state and local governments continued to generate higher revenues through increased tax receipts, which provided for timely balanced budgets. Unfunded retiree obligations remain a broader long-term issue, with the states of Illinois and New Jersey, and the city of Chicago, at the forefront of this concern.

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What factors contributed positively to the Fund’s performance?

• The Fund’s overweight in intermediate-term municipal bonds, versus those in the Index, added to performance as spreads (the difference in yields) between intermediate-term municipal bonds and shorter-term maturities compressed.

• The Fund benefited from its overweight relative to the Index in tobacco settlement bonds, as this was among the top performing sectors over the period. Tobacco bonds are backed by payments from tobacco companies participating in the Master Settlement Agreement.

• An overweight versus the Index in health care bonds, which outperformed during the reporting period, contributed favorably to performance.

What factors contributed negatively to performance?

• The Fund’s underweight in Puerto Rico credits had a negative impact. The Fund had no exposure to the Puerto Rico Electric Power Authority, which rallied considerably.

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

• The Fund held futures contracts on US Treasuries to shorten the portfolio’s duration, which reduced its sensitivity to changes in the level of rates. Overall, this strategy had a negative impact on performance as interest rates declined during the reporting period.

Prudential Short Duration Muni High Income Fund 7

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

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amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period 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 Short  Duration Muni High Income 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	$	1,023.30		0.85	%	$	4.29
	Hypothetical	$	1,000.00	$	1,020.69		0.85	%	$	4.28
Class C	Actual	$	1,000.00	$	1,019.40		1.60	%	$	8.06
	Hypothetical	$	1,000.00	$	1,016.95		1.60	%	$	8.05
Class Z	Actual	$	1,000.00	$	1,024.50		0.60	%	$	3.03
	Hypothetical	$	1,000.00	$	1,021.94		0.60	%	$	3.02

*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 period ended March 31, 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.

Prudential Short Duration Muni High Income Fund 9

Fees and Expenses (continued)

The Fund’s annualized expense ratios for the period May 29, 2014 through March 31, 2015, are as follows:

Class	Gross Operating Expenses			Net Operating Expenses
A		1.40	%		0.85	%
C		2.19			1.60
Z		1.23			0.60

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

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Portfolio of Investments

as of March 31, 2015

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS    98.4%
Arizona    3.7%
Arizona Health Facilities Authority, Revenue, Banner Health, Series B	0.981%(a)		01/01/37		1,500	$	1,359,030
Industrial Development Authority of the City of Phoenix, Revenue, Basis School, Rfdg	3.000%		07/01/20		500		502,165
Industrial Development Authority of the City of Phoenix, Revenue, Great Hearts Academies Project	3.750%		07/01/24		500		508,990
Salt Verde Financial Corp., Revenue	5.250%		12/01/21		145		170,706
							2,540,891
California    8.0%
California Statewide Communities Development Authority, Revenue, St. Joseph, AGM	4.500%		07/01/18		645		681,758
City of Fontana Sierra Hills, Specialty Tax, Rfdg	4.000%		09/01/19		385		425,283
City of Fresno Airport, Revenue, Series B, AMT, Rfdg	5.000%		07/01/23		250		291,362
City of La Verne Brethren Hillcrest Homes, Revenue, Certificate of Participation	4.000%		05/15/18		225		239,701
Golden State Tobacco Securitization Corp., Revenue, Asset-Backed, Series A-1, Rfdg	4.500%		06/01/27		2,175		2,109,424
Lake Elsinore Public Financing Authority, Specialty Tax, Rfdg	5.000%		09/01/22		155		177,466
Long Beach Bond Finance Authority, Natural Gas, Revenue, LIBOR Index, Series B	1.623%(a)		11/15/27		700		660,492
Long Beach Bond Finance Authority, Natural Gas, Revenue, Series A	5.000%		11/15/17		150		163,002
Los Angeles County Regional Financing Authority, California Mortgage Insurance, Revenue, Montecedro, Inc., Series B-1	3.000%		11/15/21		200		202,528
San Jose Redevelopment Agency, Tax Allocation, Series C, NATL, Rfdg	3.750%		08/01/28		80		81,827
Southern California Public Power Authority Natural Gas Project, Revenue, LIBOR Project No.1, Series A	1.641%(a)		11/01/38		500		444,825
Tobacco Securitization Authority of Northern California, Revenue, Series A	4.750%		06/01/23		30		29,998
							5,507,666

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 11

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Colorado    2.8%
Colorado Educational & Cultural Facilities Authority, Revenue, Rfdg	4.000%		11/01/24		540	$	549,898
Colorado Health Facilities Authority, Revenue, Catholic Health Initiative, Series A, Rfdg	5.000%		07/01/19		100		114,935
Colorado Health Facilities Authority, Revenue, National Jewish Health Initiatives, Rfdg	5.000%		01/01/20		695		745,568
Colorado Health Facilities Authority, Revenue, Retirement Communities, Series A, Rfdg	4.000%		12/01/19		515		557,153
							1,967,554
District of Columbia    1.3%
District of Columbia Friendship Public Charter School, Revenue	3.550%		06/01/22		795		827,412
District of Columbia Friendship Public Charter School, Revenue, Manifold Capital Corp.	5.000%		06/01/26		100		101,523
							928,935
Florida    6.1%
Florida Higher Educational Facilities Financial Authority, Revenue, Nova Southeastern University, Rfdg	4.000%		04/01/21		40		43,383
Greater Orlando Aviation Authority, Revenue, Jet Blue Airways Corp., AMT, Rfdg	5.000%		11/15/26		500		522,015
Lakewood Ranch Stewardship District, Special Assessment	4.250%		05/01/25		500		494,330
Martin County Industrial Development Authority, Revenue, AMT, Rfdg	3.950%		12/15/21		250		261,113
Miami Beach Health Facilities Authority, Revenue, Mt. Sinai Medical Center, Rfdg	5.000%		11/15/21		400		464,384
Orange County Health Facilities Authority, Revenue, NATL, Series C, Rfdg	6.250%		10/01/21		100		116,647
Palm Beach County Health Facilities Authority, Revenue, Sinai Residences, Rfdg	6.000%		06/01/21		790		864,702
Palm Beach County Health Facilities Authority, Revenue, Sinai Residences, Series A, Rfdg	6.750%		06/01/24		300		343,902
Village Community Development District No. 6, Special Assessment, Rfdg	3.000%		05/01/20		50		49,211

See Notes to Financial Statements.

12

Description	Interest Rate	Maturity Date		Principal Amount (000)#			Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Florida (cont’d.)
Village Community Development District No.10, Special Assessment	4.500%		05/01/23		250		$	279,002
Village Community Development District No.11, Special Assessment	3.250%		05/01/19		750			756,277
								4,194,966
Georgia    1.3%
Coffee County Hospital Authority/Coffee Regional Medical Center, Revenue, Series PJ, Rfdg	5.000%		12/01/15		250			249,063
Municipal Electric Authority of Georgia, Revenue, Unrefunded Balances, Series Z, Rfdg	5.500%		01/01/20		70			75,481
Private Colleges & Universities Authority, Revenue, Savannah College of Art & Design	5.000%		04/01/22		500			582,005
								906,549
Guam    0.7%
Guam Government Waterworks Authority, Revenue, Series A, Rfdg	5.000%		07/01/20		400			455,448
Hawaii    1.1%
State of Hawaii Department of Budget & Finance, Revenue, Electric Co. & Subsidiaries, Series A, AMT, FGIC, Rfdg	4.800%		01/01/25		750			752,280
Illinois    6.3%
Chicago Board of Education, Dedicated Revenues, Series B, GO, AMBAC, Rfdg	5.000%		12/01/18		100			106,973
Chicago Board of Education, Series D, GO, AGM, Rfdg	4.000%		12/01/16		200			209,162
Chicago Board of Education, NATL, Series A, GO, Rfdg	5.000%		12/01/18		160			174,805
City of Chicago, Project & Rfdg, Series A, GO, AMBAC	5.000%		01/01/20		270	��		278,335
City of Chicago Waterworks, Revenue, Rfdg	4.000%		11/01/19		200			219,112
Illinois Finance Authority, Revenue, Advocate Healthcare Network, Series D	5.500%		11/01/18		60			68,041
Illinois Finance Authority, Revenue, Advocate Healthcare, Series A-2, Rfdg (Mandatory Put Date 02/12/20)	5.000%		11/01/30		350			404,523

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 13

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Illinois (cont’d.)
Illinois Finance Authority, Revenue, Institute of Technology, Series A, Rfdg	5.000%		04/01/31		500	$	500,580
Illinois Finance Authority, Revenue, Resurrection Health, Series B, AGM, Rfdg	4.500%		05/15/20		175		184,600
Illinois Finance Authority, Revenue, Silver Cross Hospital, Rfdg	6.000%		08/15/23		600		669,018
Illinois Finance Authority, Revenue, Silver Cross Hospital, Series C, Rfdg	5.000%		08/15/19		110		122,966
Illinois Finance Authority, Revenue, Student Housing, Series B, Rfdg	5.000%		05/01/25		200		207,154
State of Illinois, GO, Series 2010, AGM, Rfdg	5.000%		01/01/20		170		190,699
State of Illinois, GO, Series A	5.000%		04/01/20		60		66,548
State of Illinois, GO, Series A, AGM	4.000%		09/01/22		150		156,337
State of Illinois, Revenue, GO, AGM, Rfdg	4.000%		01/01/20		500		538,495
State of Illinois, Revenue, GO, Rfdg	5.000%		02/01/20		210		232,359
							4,329,707
Indiana    3.0%
Gary Chicago International Airport Authority, Revenue, AMT	5.000%		02/01/20		835		909,407
Indiana Finance Authority, Revenue, United States Steel Corp., Rfdg	6.000%		12/01/19		420		471,164
Indiana Finance Authority, Revenue, United States Steel Corp., Rfdg	6.000%		12/01/26		640		702,522
							2,083,093
Iowa    3.0%
Iowa Finance Authority, Revenue, Iowa Fertilizer Co. Project, Rfdg	5.000%		12/01/19		1,080		1,171,066
Iowa Finance Authority, Revenue, Iowa Fertilizer Co. Project, Rfdg	5.500%		12/01/22		415		443,203
Iowa Higher Education Loan Authority, Revenue, Wartburg College Project, Rfdg	2.500%		10/01/20		500		495,175
							2,109,444
							��
Kentucky    1.1%
Kentucky Economic Development Finance Authority, Revenue, Owensboro Medical Health Systems, Series A	5.250%		06/01/20		500		578,445

See Notes to Financial Statements.

14

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Kentucky (cont’d.)
Warren County Hospital Facility, Revenue, Community Hospital Project, Series A, Rfdg	5.000%		08/01/21		150	$	162,330
							740,775
Louisiana    1.2%
New Orleans Sewerage Service, Revenue, Rfdg	5.000%		06/01/19		400		454,108
New Orleans Sewerage Service, Revenue, Rfdg	5.000%		06/01/20		350		404,548
							858,656
Maryland    1.0%
City of Westminster, Revenue, Project Carroll Lutheran Village, Rfdg	5.000%		07/01/18		400		429,328
Frederick County Special Obligation, Urbana Community Development Authorization, Specialty Tax, Series A, Rfdg	5.000%		07/01/20		100		114,557
Frederick County Special Obligation, Urbana Community Development Authorization, Specialty Tax, Series A, Rfdg	5.000%		07/01/21		100		113,917
							657,802
Michigan    1.0%
Michigan Finance Authority, Revenue, Local Government Loan Program, Series B, Rfdg	4.000%		07/01/18		500		537,350
Michigan Finance Authority, Revenue, Series E	2.850%		08/20/15		125		125,499
							662,849
Minnesota    1.0%
City of Hugo, Revenue, Charter School Noble Academy Project, Series A	4.000%		07/01/22		480		504,336
Shakopee Healthcare Facility, Revenue, St. Francis Regional Medical Center, Rfdg	5.000%		09/01/19		185		212,167
							716,503
Mississippi    1.4%
County of Lowndes, Revenue, Weyerhaeuser Co. Project, Series A, Rfdg	6.800%		04/01/22		740		937,203

Prudential Short Duration Muni High Income Fund 15

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Missouri    1.8%
Health & Educational Facilities Authority of the State of Missouri, Revenue, Lutheran Senior Services, Rfdg	2.150%		02/01/19		500	$	504,895
Health & Educational Facilities Authority of the State of Missouri, Revenue, St. Louis College of Pharmacy Project, Rfdg	5.000%		05/01/19		125		139,720
Joplin Industrial Development Authority, Revenue, Freeman Health System, Rfdg	5.000%		02/15/22		500		575,530
							1,220,145
Nevada    0.8%
Clark County Airport Department of Aviation, Revenue, Jet Aviation Fuel Tax, Series A, AMT, Rfdg	5.000%		07/01/21		500		582,125
New Hampshire    0.7%
New Hampshire Business Finance Authority, Revenue, Casella Waste Systems Inc., AMT, (Mandatory Put Date 10/01/19)	4.000%		04/01/29		500		505,960
New Jersey    9.4%
Casino Reinvestment Development Authority, Revenue, Rfdg	4.000%		11/01/19		500		528,120
New Jersey Economic Development Authority, Revenue, Lions Gate Project, Rfdg	3.625%		01/01/19		405		411,059
New Jersey Economic Development Authority, Revenue, School Facilities Construction, Series EE, Rfdg	5.000%		09/01/18		330		361,188
New Jersey Economic Development Authority, Revenue, School Facilities Construction, Series NN, Rfdg	5.000%		03/01/19		150		164,870
New Jersey Economic Development Authority, Revenue, United Airlines, Series A, AMT	4.875%		09/15/19		780		821,574
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center	4.500%		07/01/20		140		153,044
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center, Rfdg	4.250%		07/01/19		110		118,774

See Notes to Financial Statements.

16

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
New Jersey (cont’d.)
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center, Rfdg	5.000%		07/01/19		150	$	166,497
New Jersey Transportation Trust Fund Authority, Revenue, Series B, AGM, Rfdg	5.500%		12/15/21		175		207,898
New Jersey Transportation Trust Fund Authority, Revenue, Series B, NATL, Rfdg	5.500%		12/15/20		200		234,122
Salem County Pollution Control Financing Authority, Revenue, Chambers Project, Series A, AMT, Rfdg	5.000%		12/01/23		1,000		1,141,340
South Jersey Transportation Authority LLC, Revenue, Series A, Rfdg	5.000%		11/01/20		100		113,069
South Jersey Transportation Authority LLC, Revenue, Series A, Rfdg	5.000%		11/01/21		350		397,372
Tobacco Settlement Finance Corp., Revenue, Series 1A, Rfdg	4.500%		06/01/23		1,460		1,463,504
Tobacco Settlement Finance Corp., Revenue, Series 1A, Rfdg	4.625%		06/01/26		250		239,557
							6,521,988
New Mexico    0.4%
New Mexico Municipal Energy Acquisition Authority, Revenue, Series B, Rfdg (Mandatory Put Date 08/01/19)	0.865%(a)		11/01/39		250		251,120
New York    6.8%
Build NYC Resource Corp., Revenue, Pratt Paper Inc. Project, AMT, Rfdg	3.750%		01/01/20		1,000		1,041,950
New York City Industrial Development Agency Revenue, Jetblue Airways Corp. Project, AMT	5.125%		05/15/30		565		565,192
New York City Industrial Development Agency, Revenue, American Airlines Group, Series A, AMT	7.750%		08/01/31		350		381,626
New York State Environmental Facilities Corp., Revenue, Casella Waste Systems, Inc., AMT, (Mandatory Put Date 12/02/19)	3.750%		12/01/44		500		504,140
Port Authority of New York & New Jersey, Revenue, JFK International Air Terminal	5.000%		12/01/20		1,500		1,727,310
TSASC, Inc., Revenue, Series 1, Rfdg	5.000%		06/01/26		500		502,855
							4,723,073

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 17

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
North Dakota    0.8%
Burleigh County Healthcare St. Alexius, Revenue, Series A, Rfdg	4.000%		07/01/20		500	$	546,205
Ohio    4.1%
Buckeye Tobacco Settlement Financing Authority, Revenue, Asset-Backed, Senior Turbo, Series A-2	5.125%		06/01/24		750		639,585
County of Hamilton, Revenue, Christ Hospital Project	5.000%		06/01/20		400		460,844
County of Hamilton, Revenue, Christ Hospital Project	5.250%		06/01/23		100		118,245
County of Hamilton, Revenue, Christ Hospital Project	5.250%		06/01/24		100		117,627
Ohio State Water Development Authority, Revenue, First Energy Nuclear, Series B, Rfdg (Mandatory Put Date 06/03/19)	4.000%		12/01/33		785		837,846
Ohio State Water Development Authority, Revenue, First Energy, Series B, Rfdg (Mandatory Put Date 04/01/20)	3.625%		10/01/33		300		315,771
Southeastern Ohio Port Authority, Revenue, Memorial Health Systems, Rfdg	5.000%		12/01/19		350		378,987
							2,868,905
Oregon    0.8%
Hospital Facilities Authority of Multnomah County, Revenue, Mirabella at South Water Front, Series A, Rfdg	5.000%		10/01/19		500		544,880
Pennsylvania    7.9%
Allegheny County Industrial Development Authority, Revenue, United States Steel Corp., Rfdg	5.500%		11/01/16		175		183,236
Allegheny County Industrial Development Authority, Revenue, United States Steel Corp., Rfdg	6.750%		11/01/24		385		441,938
Beaver County Industrial Development Authority, Revenue, First Energy, Series B, Rfdg (Mandatory Put Date 06/01/20)	3.500%		12/01/35		500		518,960

18

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Pennsylvania (cont’d.)
Chester County Industrial Development Authority, Revenue, Renaissance Academy Christian School, Rfdg	3.750%		10/01/24		550	$	558,360
Montgomery County Industrial Development Authority, Revenue, Whitemarsh, Rfdg	4.000%		01/01/25		1,000		988,020
Pennsylvania Economic Development Financing Authority, Revenue, Colver Project, Series F, AMBAC, AMT, Rfdg	4.625%		12/01/18		190		194,326
Pennsylvania Economic Development Financing Authority, Revenue, PA Bridges FINCO LP, AMT	5.000%		06/30/22		1,000		1,156,220
Philadelphia Hospitals & Higher Education Facilities Authority, Revenue, Temple University Health Systems, Series A, Rfdg	5.500%		07/01/30		750		771,487
Philadelphia Hospitals & Higher Education Facilities Authority, Revenue, Temple University Health Systems, Series B, Rfdg	5.500%		07/01/26		340		356,677
Philadelphia Hospitals & Higher Education Facilities Authority, Revenue, Temple University Health Systems, Series B, Rfdg	6.250%		07/01/23		300		321,924
							5,491,148
Puerto Rico    2.7%
Puerto Rico Commonwealth, Series A, GO, AGM, Rfdg	5.000%		07/01/16		200		206,008
Puerto Rico Commonwealth, Series B, GO, AGM	5.250%		07/01/17		40		41,074
Puerto Rico Highways & Transportation Authority, Revenue, Unrefunded, Series X, Rfdg	5.500%		07/01/15		450		443,547
Puerto Rico Municipal Finance Agency, Revenue, Assurance North America, Inc., Series B, AGM, Rfdg	4.100%		07/01/15		175		175,245
Puerto Rico Municipal Finance Agency, Revenue, Series A, AGM	4.000%		08/01/15		50		50,095
Puerto Rico Municipal Finance Agency, Revenue, Series A, AGM	5.000%		08/01/18		210		210,809
Puerto Rico Municipal Finance Agency, Revenue, Series B, AGM, Rfdg	5.250%		07/01/16		500		509,045
Puerto Rico Municipal Finance Agency, Revenue, Series C, AGM, Rfdg	5.250%		08/01/17		100		103,316

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 19

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Puerto Rico (cont’d.)
Puerto Rico Municipal Finance Agency, Revenue, Series C, AGM, Rfdg	5.250%		08/01/18		105	$	109,887
Puerto Rico Public Buildings Authority, Revenue, FGIC, Series H, Rfdg	5.250%		07/01/15		45		44,668
							1,893,694
Tennessee    1.7%
Tennessee Energy Acquisition Corp., Revenue, Series A	5.250%		09/01/20		775		889,522
Tennessee Energy Acquisition Corp., Revenue, Series C	5.000%		02/01/20		270		302,764
							1,192,286
Texas    10.1%
Austin Convention Enterprises, Inc., Revenue, First Tier, Series A, XLCA, Rfdg	5.250%		01/01/24		105		108,585
Central Texas Regional Mobility Authority, Revenue, Sub Lien, Rfdg	5.000%		01/01/21		180		201,650
Central Texas Turnpike System, Revenue, Series C, Rfdg	5.000%		08/15/22		150		176,154
City of Houston TX Airport System, Revenue, United Airlines Inc., Series C, AMT, Rfdg	5.000%		07/15/20		500		534,930
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc.	3.750%		08/15/22		500		532,115
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc.	5.000%		08/15/17		200		216,738
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc.	5.500%		08/15/31		410		459,438
Decatur Hospital Authority Wise Regional Health Systems, Revenue, Series A, Rfdg	4.000%		09/01/20		200		218,606
Decatur Hospital Authority Wise Regional Health Systems, Revenue, Series A, Rfdg	5.000%		09/01/22		150		168,857
Decatur Hospital Authority Wise Regional Health Systems, Revenue, Series A, Rfdg	5.000%		09/01/23		150		168,369
Gregg County Health Facilities Development Corp., Revenue, Good Sheperd Health Systems, Series A, Rfdg (Mandatory Put Date 03/01/17)	4.020%(a)		10/01/29		400		406,476

See Notes to Financial Statements.

20

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Texas (cont’d.)
Houston Airport System United Airlines, Inc., Revenue, Series E, AMT, Rfdg	4.500%		07/01/20		1,000	$	1,078,570
Love Field Airport Modernization Corp., Revenue, Southwest Airlines Co. Project, AMT	5.000%		11/01/22		280		326,603
Love Field Airport Modernization Corp., Revenue, Southwest Airlines Co. Project, Series 2012, AMT	5.000%		11/01/21		90		104,526
New Hope Cultural Education Facilities Corp., Revenue, Series A	4.250%		04/01/22		100		108,365
New Hope Cultural Education Facilities Corp., Revenue, Tarelton St. University Student Housing Project, Series A	4.000%		04/01/21		300		323,022
New Hope Cultural Education Facilities Corp., Revenue, Texas A&M University Student Housing Project, Series A, AGM	4.000%		04/01/20		60		65,399
Tarrant County Cultural Education Facilities Finance Corp., Revenue, Trinity Terrace Project, Series A-1, Rfdg	5.000%		10/01/29		600		661,494
Texas Municipal Gas Acquisition & Supply Corp I, Revenue, Series A	5.250%		12/15/21		180		209,425
Texas Municipal Gas Acquisition & Supply Corp I, Revenue, Sr. Lien, Series B	0.881%(a)		12/15/26		500		462,920
Texas Municipal Gas Acquisition & Supply Corp II, Revenue	1.051%(a)		09/15/27		500		476,420
							7,008,662
Utah
County of Utah, Revenue, United States Steel Corp. Project, Rfdg	5.375%		11/01/15		30		30,514
Virgin Islands    1.7%
Virgin Islands Public Finance Authority, Revenue, Matching Fund, Series A-1	4.300%		10/01/19		300		327,453
Virgin Islands Public Finance Authority, Revenue, Matching Fund, Series B, Rfdg	5.000%		10/01/19		250		280,345
Virgin Islands Public Finance Authority, Revenue, Series A	5.000%		10/01/24		500		586,640
							1,194,438

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 21

Portfolio of Investments

as of March 31, 2015 continued

Description	Interest Rate	Maturity Date		Principal Amount (000)#		Value (Note 1)
LONG-TERM INVESTMENTS (Continued)
Virginia    0.5%
Virginia College Building Authority, Revenue, Marymount University Project, Series A	5.000%		07/01/20		250	$	277,960
Virginia Small Business Financing Authority, Revenue, Express Lanes, AMT	4.250%		07/01/22		50		54,213
							332,173
Washington    2.6%
Skagit County Public Hospital District No. 1, Revenue	5.750%		12/01/28		310		339,525
Skagit County Public Hospital District No. 1, Revenue, Series A, Rfdg	5.000%		12/01/22		775		883,314
Skagit County Public Hospital District No. 1, Revenue, Series A, Rfdg	5.000%		12/01/23		190		217,981
Washington Health Care Facilities Authority, Revenue, Overlake Medical Center, Rfdg	5.000%		07/01/20		300		350,010
							1,790,830
Wisconsin 1.6%
Public Finance Authority Senior Living, Revenue, Rose Villa Project, Series B-3	3.750%		11/15/19		570	$	575,797
Public Finance Authority, Revenue, Church Home of Hartford, Series A, Rfdg, 144A	4.000%		09/01/20		515		536,717
							1,112,514
TOTAL INVESTMENTS    98.4% (cost $67,290,052; Note 5)							68,160,981
Other assets in excess of liabilities(b)    1.6%							1,116,780
NET ASSETS    100.0%						$	69,277,761

See Notes to Financial Statements.

22

The following abbreviations are used in the portfolio descriptions:

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

AGM—Assured Guaranty Municipal Corp.

AMBAC—American Municipal Bond Assurance Corp.

AMT—Alternative Minimum Tax

FGIC—Financial Guaranty Insurance Co.

GO—General Obligation

IDB—Industrial Development Bond

LIBOR—London Interbank Offered Rate

NATL—National Public Finance Guaranty Corp.

PCR—Pollution Control Revenue

RFDG—Refunding

XLCA—XL Capital Assurance

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

(a) Variable rate instrument. The interest rate shown reflects the rate in effect at March 31, 2015.

(b) Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end:

Futures contracts outstanding at March 31, 2015:

Number of Contracts		Type	Expiration Date		Value at Trade Date		Value at March 31, 2015		Unrealized Depreciation(1)
		Short Positions:
	14	10 Year U.S. Treasury Notes		Jun. 2015	$	1,791,149	$	1,804,688	$	(13,539	)

(1) Cash of $30,000 has been segregated with Citigroup Global Markets, Inc., to cover requirement for open futures contracts as of 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.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 23

Portfolio of Investments

as of March 31, 2015 continued

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
Municipal Bonds	$	—		$	68,160,981	$	—
Other Financial Instruments*
Futures Contracts		(13,539	)		—		—
Total	$	(13,539	)	$	68,160,981	$	—

* 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 other assets in excess of liabilities shown as a percentage of net assets as of March 31, 2015 was as follows (Unaudited):

Healthcare	28.5	%
Corporate Backed IDB & PCR	21.4
Education	12.0
Special Tax/Assessment District	8.3
Tobacco	7.1
Pre-pay Gas	5.9
General Obligation	4.8
Transportation	4.6
Water & Sewer	2.2
Solid Waste/Resource Recovery	2.0
Lease Backed Certificate of Participation	0.6
Power	0.5
Other	0.5
	98.4
Other assets in excess of liabilities	1.6
	100.0	%

The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with this derivative instrument is interest rate risk.

The effect of such derivative instruments on the Fund's financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

See Notes to Financial Statements.

24

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
Interest rate contracts	Due from/to broker— variation margin futures	$	—	*	Due from/to broker— variation margin futures	$	13,539	*

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

The effects of derivative instruments on the Statement of Operations for the period* 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
Interest rate contracts	$	(48,748	)

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Interest rate contracts	$	(13,539	)

For the period* ended March 31, 2015, the Fund’s average value at trade date for futures short position was $1,076,438.

* Commencement of operations was May 29, 2014.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 25

Statement of Assets and Liabilities

as of March 31, 2015

Assets
Investments at value:
Unaffiliated investments (cost $67,290,052)	$	68,160,981
Cash		1,967,405
Deposit with broker		30,000
Interest receivable		784,649
Receivable for Fund shares sold		482,367
Due from manager		35,516
Prepaid expenses		270
Total assets		71,461,188
Liabilities
Payable for investments purchased		1,813,464
Payable for Fund shares reacquired		244,556
Accrued expenses and other liabilities		88,206
Dividends payable		20,905
Distribution fee payable		11,683
Due to broker—variation margin futures		4,375
Affiliated transfer agent fee payable		238
Total liabilities		2,183,427
Net Assets	$	69,277,761
Net assets were comprised of:
Shares of beneficial interest, at par	$	6,811
Paid-in capital in excess of par		68,308,570
		68,315,381
Undistributed net investment income		45,116
Accumulated net realized gain on investment transactions		59,874
Net unrealized appreciation (depreciation) on investments		857,390
Net assets, March 31, 2015	$	69,277,761

See Notes to Financial Statements.

26

Class A
Net asset value and redemption price per share, ($9,061,649 ÷ 890,628 shares of beneficial interest issued and outstanding)	$	10.17
Maximum sales charge (3.25% of offering price)		0.34
Maximum offering price to public	$	10.51
Class C
Net asset value, offering price and redemption price per share, ($11,962,391 ÷ 1,176,876 shares of beneficial interest issued and outstanding)	$	10.16
Class Z
Net asset value, offering price and redemption price per share, ($48,253,721 ÷ 4,743,949 shares of beneficial interest issued and outstanding)	$	10.17

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 27

Statement of Operations

For the period May 29, 2014* through March 31, 2015

Net Investment Income
Income
Interest income	$	1,229,690
Expenses
Management fee		227,192
Distribution fee—Class A		11,236
Distribution fee—Class C		42,666
Registration fees		88,000
Custodian and accounting fees		42,000
Audit fee		40,000
Reports to shareholders		36,000
Transfer agent’s fees and expenses (including affiliated expense of $700)		24,000
Legal fees and expenses		22,000
Trustees’ fees		11,000
Miscellaneous		12,574
Total expenses		556,668
Less: Management fee waiver and/or expense reimbursement		(254,918	)
Net expenses		301,750
Net investment income		927,940
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on:
Investment transactions		132,128
Futures transactions		(48,748	)
		83,380
Net change in unrealized appreciation (depreciation) on:
Investments		870,929
Futures		(13,539	)
		857,390
Net gain on investments		940,770
Net Increase In Net Assets Resulting From Operations	$	1,868,710

* Commencement of operations.

See Notes to Financial Statements.

28

Statement of Changes in Net Assets

	May 29, 2014* through March 31, 2015
Increase (Decrease) in Net Assets
Operations
Net investment income	$	927,940
Net realized gain on investment transactions		83,380
Net change in unrealized appreciation (depreciation) on investments		857,390
Net increase in net assets resulting from operations		1,868,710
Dividends and Distributions (Note 1)
Dividends from net investment income
Class A		(94,981	)
Class C		(57,240	)
Class Z		(736,927	)
		(889,148	)
Distributions from net realized gains
Class A		(2,817	)
Class C		(2,822	)
Class Z		(19,533	)
		(25,172	)
Fund share transactions (Net of share conversions) (Note 6)
Net proceeds from shares sold		77,410,504
Net asset value of shares issued in reinvestment of dividends and distributions		834,087
Cost of shares reacquired		(9,921,220	)
Net increase in net assets from Fund share transactions		68,323,371
Total increase		69,277,761
Net Assets:
Beginning of period		—
End of period(a)	$	69,277,761
(a) Includes undistributed net investment income of:	$	45,116

* Commencement of operations.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 29

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”). The Trust currently consists of four funds: Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund (the “Fund”). These financial statements relate only to Prudential Short Duration Muni High Income Fund. The financial statements of the other portfolios are not presented herein. The Fund commenced investment operations on May 29, 2014. The Trust was established as a Delaware business trust on October 24, 1997. The investment objective of the Fund is to provide the maximum amount of income that is eligible for exclusion from federal income taxes.

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.

30

Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, 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 Short Duration Muni High Income Fund 31

Notes to Financial Statements

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. Should interest rates move unexpectedly, the Fund may not achieve the anticipated

32

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.

Concentration of Risk: The ability of debt securities issuers (other than those issued or guaranteed by the U.S. Government) held by the Fund to meet its obligations may be affected by the economic or political developments in a specific industry, region or country. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. companies as a result of, among other factors, the possibility of political or economic instability or the level of governmental supervision and regulation of foreign securities markets.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investments 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 the accrual basis. Expenses are recorded on the 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 and 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.

Custody Fee Credits: The Fund has an arrangement with its custodian bank, whereby uninvested monies earn credits which reduce the fees charged by the custodian. Such custody fee credits, if any, are presented as a reduction of gross expenses in the accompanying Statement of Operations.

Dividends and Distributions: The Fund expects to declare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid 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.

Prudential Short Duration Muni High Income Fund 33

Notes to Financial Statements

continued

Taxes: It is the Fund’s policy 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.

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 the investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, 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 .55% of the Fund’s average daily net assets. For the period ended March 31, 2015, waivers and/or expense reimbursements exceeded the management fee rate.

For the period ended March 31, 2015, PI has contractually agreed to limit net annual Fund operating expenses (exclusive of distribution and service (12b-1) fees, acquired fund fees and expenses, extraordinary and certain other expenses, including taxes and deferred tax expenses, interest and brokerage commissions) of each class of shares to .60% of the Fund’s average daily net assets.

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

34

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .25% 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 $36,965 in front-end sales charges resulting from sales of Class A shares during the period ended March 31, 2015. From these fees, PIMS paid such sales charges to broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the period ended March 31, 2015, it received $2,000 and $548 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders, respectively.

PI, PIMS and PIM 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.

Note 4. Portfolio Securities

Purchases and sales of portfolio securities, other than short-term investments, for the period ended March 31, 2015, were $81,761,057 and $14,234,820, respectively.

Note 5. Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. In order to present undistributed net investment income, accumulated net realized gain on investment transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income, accumulated net realized gain on investment transactions and paid-in capital in excess of par. For the period ended March 31, 2015, the adjustments were to increase undistributed net investment income by $6,324, increase accumulated net realized gain on investment transactions by

Prudential Short Duration Muni High Income Fund 35

Notes to Financial Statements

continued

$1,666, and decrease paid-in capital in excess of par by $7,990 due to the difference in the treatment of accreting market discount between financial and tax reporting and differences in the treatment for book and tax purposes of non-deductible stock issuance costs. Net investment income, net realized gain on investments and net assets were not affected by these changes.

For the period ended March 31, 2015, the tax character of dividends paid was $875,500 of tax-exempt income and $38,820 of ordinary income.

As of March 31, 2015, the components of distributable earnings on a tax basis were $43,812 of tax-exempt income (includes timing difference of $20,905 for dividends payable) and $59,039 of ordinary income. This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing differences between financial and tax reporting.

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

Tax Basis	Appreciation	Depreciation	Net Unrealized Appreciation
$67,275,428	$972,102	$(86,549)	$885,553

The difference between book basis and tax basis is primarily attributable to the difference in the treatment of accreting market discount for book and tax purposes and wash sales.

Management has analyzed the Fund’s tax positions and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period.

Note 6. Capital

The Fund offers Class A, Class C, and Class Z shares. Class A shares are sold with 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”), but are not subject to an initial sales charge. The Class A CDSC is waived for purchases by certain retirement or benefit

36

plans. Class C shares redeemed within 12 months of purchase are subject to a 1% CDSC. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value per share.

As of March 31, 2015, Prudential through its affiliates owned 1,017 Class A shares, 1,011 Class C shares and 2,549,053 Class Z shares of the Fund.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Period ended March 31, 2015:*
Shares sold		1,337,886		$	13,481,303
Shares issued in reinvestment of dividends and distributions		9,150			92,796
Shares reacquired		(456,113	)		(4,630,289	)
Net increase (decrease) in shares outstanding before conversion		890,923			8,943,810
Shares reacquired upon conversion into Class Z		(295	)		(3,008	)
Net increase (decrease) in shares outstanding		890,628		$	8,940,802
Class C
Period ended March 31, 2015:*
Shares sold		1,259,666		$	12,692,347
Shares issued in reinvestment of dividends and distributions		2,456			24,860
Shares reacquired		(85,246	)		(865,517	)
Net increase (decrease) in shares outstanding		1,176,876		$	11,851,690
Class Z
Period ended March 31, 2015:*
Shares sold		5,109,832		$	51,236,854
Shares issued in reinvestment of dividends and distributions		70,918			716,431
Shares reacquired		(437,096	)		(4,425,414	)
Net increase (decrease) in shares outstanding before conversion		4,743,654			47,527,871
Shares issued upon conversion from Class A		295			3,008
Net increase (decrease) in shares outstanding		4,743,949		$	47,530,879

* Commencement of offering was May 29, 2014.

Prudential Short Duration Muni High Income Fund 37

Notes to Financial Statements

continued

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% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the 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 period 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.

38

Financial Highlights

Class A Shares
	May 29, 2014(b) through March 31, 2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.00
Income from investment operations:
Net investment income		.17
Net realized and unrealized gain on investments		.17
Total from investment operations		.34
Less Dividends and Distributions:
Dividends from net investment income		(.17	)
Distributions from net realized gains		-	(c)
Total dividends and distributions		(.17	)
Net Asset Value, end of period		$10.17
Total Return(a):		3.43%
Ratios/Supplemental Data:
Net assets, end of period (000)		$9,062
Average net assets (000)		$5,344
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		.85%	(d)
Expenses before waivers and/or expense reimbursement		1.40%	(d)
Net investment income		2.21%	(d)
Portfolio turnover rate		31%	(e)

(a) 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

(c) Less than $.005.

(d) Annualized.

(e) Not annualized.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 39

Financial Highlights

continued

Class C Shares
	May 29, 2014(b) through March 31, 2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.00
Income from investment operations:
Net investment income		.11
Net realized and unrealized gain on investments		.15
Total from investment operations		.26
Less Dividends and Distributions:
Dividends from net investment income		(.10	)
Distributions from net realized gains		-	(c)
Total dividends and distributions		(.10	)
Net Asset Value, end of period		$10.16
Total Return(a):		2.69%
Ratios/Supplemental Data:
Net assets, end of period (000)		$11,962
Average net assets (000)		$5,073
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		1.60%	(d)
Expenses before waivers and/or expense reimbursement		2.19%	(d)
Net investment income		1.43%	(d)
Portfolio turnover rate		31%	(e)

(a) 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

(c) Less than $.005.

(d) Annualized.

(e) Not annualized.

See Notes to Financial Statements.

40

Class Z Shares
	May 29, 2014(b) through March 31, 2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.00
Income from investment operations:
Net investment income		.19
Net realized and unrealized gain on investments		.17
Total from investment operations		.36
Less Dividends and Distributions:
Dividends from net investment income		(.19	)
Distributions from net realized gains		-	(c)
Total dividends and distributions		(.19	)
Net Asset Value, end of period		$10.17
Total Return(a):		3.65%
Ratios/Supplemental Data:
Net assets, end of period (000)		$48,254
Average net assets (000)		$38,695
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		.60%	(d)
Expenses before waivers and/or expense reimbursement		1.23%	(d)
Net investment income		2.36%	(d)
Portfolio turnover rate		31%	(e)

(a) 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

(c) Less than $.005.

(d) Annualized.

(e) Not annualized.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 41

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

We have audited the accompanying statement of assets and liabilities of Prudential Short Duration Muni High Income Fund (hereafter referred to as the “Fund”), a series of Prudential Investment Portfolios 12, including the portfolio of investments, as of March 31, 2015, the related statement of operations, the statement of changes in net assets and financial highlights for the period May 29, 2014 (commencement of operations) through March 31, 2015. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of March 31, 2015, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 15, 2015

42

Federal Income Tax Information

(Unaudited)

We are advising you that during the fiscal period ended March 31, 2015, the Fund designates the maximum amount allowable per share but not less than the following amounts as exempt-interest dividends in accordance with Section 852(b)(5) of the Internal Revenue Code.

	Per Share
	Class A		Class C		Class Z
Tax-Exempt Dividends	$	.163	$	.101	$	.184

In January 2016, you will be advised on IRS Form 1099-DIV and/or 1099-INT, if applicable, or substitute forms as to the federal tax status of the dividends received in calendar year 2015.

For more detailed information regarding your state and local taxes, you should contact your tax adviser or the state/local taxing authorities.

Prudential Short Duration Muni High Income Fund 43

Results of Proxy Voting

(Unaudited)

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential Investment Portfolios, Inc. 12 which is comprised of Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Short Duration Muni High Income Fund and Prudential Long-Short Equity Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:

To elect twelve Directors:

	SHARES VOTED		% OF VOTED		% OF TOTAL
(a) Ellen S. Alberding;
FOR		130,451,075.265		99.405		82.566
WITHHELD		782,095.872		0.595		0.495
(b) Kevin J. Bannon;
FOR		130,464,262.065		99.415		82.575
WITHHELD		768,909.072		0.585		0.486
(c) Linda W. Bynoe;
FOR		130,450,136.572		99.404		82.566
WITHHELD		783,034.565		0.596		0.495
(d) Keith F. Hartstein;
FOR		130,418,994.870		99.380		82.546
WITHHELD		814,176.267		0.620		0.515
(e) Michael S. Hyland;
FOR		130,411,843.871		99.375		82.542
WITHHELD		821,327.266		0.625		0.519
(f) Stephen P. Munn;
FOR		130,356,575.651		99.333		82.507
WITHHELD		876,595.486		0.667		0.554
(g) James E. Quinn;
FOR		130,446,726.994		99.401		82.564
WITHHELD		786,444.143		0.599		0.497
(h) Richard A. Redeker;
FOR		130,311,471.503		99.298		82.478
WITHHELD		921,699.634		0.702		0.583
(i) Stephen G. Stoneburn;
FOR		130,356,065.699		99.332		82.506
WITHHELD		877,105.438		0.668		0.555
(j) Stuart S. Parker;
FOR		130,468,581.093		99.418		82.578
WITHHELD		764,590.044		0.582		0.483

44

	SHARES VOTED		% OF VOTED		% OF TOTAL
(k) Scott E. Benjamin; and
FOR		130,474,677.168		99.423		82.581
WITHHELD		758,493.969		0.577		0.480
(l) Grace C. Torres.
FOR		130,486,922.341		99.432		82.589
WITHHELD		746,248.796		0.568		0.472

Prudential Short Duration Muni High Income Fund 45

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

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

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (57) Board Member Portfolios Overseen: 62	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (62) Board Member Portfolios Overseen: 62	Managing Director (since April 2008) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (62) Board Member Portfolios Overseen: 62	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Visit our website at www.prudentialfunds.com

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Keith F. Hartstein (58) Board Member Portfolios Overseen: 62	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Michael S. Hyland, CFA (69) Board Member Portfolios Overseen: 62	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.
Stephen P. Munn (72) Board Member Portfolios Overseen: 62	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).
James E. Quinn (63) Board Member Portfolios Overseen: 62	Retired; formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1994).	Director of Deckers Outdoor Corporation (footwear manufacturer) (since 2011).
Richard A. Redeker (71) Board Member & Independent Chair Portfolios Overseen: 62	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.

Prudential Short Duration Muni High Income Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stephen G. Stoneburn (71) Board Member Portfolios Overseen: 62	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (52) Board Member & President Portfolios Overseen: 62	President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).	None.
Scott E. Benjamin (42) Board Member & Vice President Portfolios Overseen: 62	Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (55) Board Member Portfolios Overseen: 60	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of Prudential Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	None.

* Note: Prior to her retirement in 2014, Ms. Torres was employed by Prudential Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a non-management Interested Board Member.

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⁽¹⁾  The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 2003; Stephen G. Stoneburn, 2001;Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (59) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (39) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of Prudential Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Investments Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006–December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (57) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (56) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (40) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005
Andrew R. French (52) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006

Prudential Short Duration Muni High Income Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Amanda S. Ryan (37) Assistant Secretary	Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray LLP (2008-2012).	Since 2012
Theresa C. Thompson (52) Deputy Chief Compliance Officer	Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).	Since 2008
Richard W. Kinville (46) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).	Since 2011
M. Sadiq Peshimam (51) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of Prudential Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (56) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (47) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (53) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (46) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a)  Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

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Explanatory Notes to Tables:

• Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC.

• Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

• There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

• “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

• “Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which Prudential Investments LLC serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

Prudential Short Duration Muni High Income Fund

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	Prudential Investment Management, Inc.	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 Short Duration Muni High Income Fund, Prudential Investments, Attn: Board of Trustees, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director 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.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

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

PRUDENTIAL SHORT DURATION MUNI HIGH INCOME FUND

SHARE CLASS	A	C	Z
NASDAQ	PDSAX	PDSCX	PDSZX
CUSIP	744336835	744336827	744336819

MF222E    0277391-00001-00

PRUDENTIAL INVESTMENTS»MUTUAL FUNDS

PRUDENTIAL LONG-SHORT EQUITY FUND

ANNUAL REPORT ^· MARCH 31, 2015

Objective

Long-term capital appreciation

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

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

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. 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.

May 15, 2015

Dear Shareholder:

We hope you find the annual report for the Prudential Long-Short Equity Fund informative and useful. The report covers performance since the Fund’s inception on May 29, 2014 until 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,

Stuart S. Parker, President

Prudential Long-Short Equity Fund

Prudential Long-Short Equity 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
	Since Inception
Class A	10.73% (5/29/14)
Class C	10.03    (5/29/14)
Class Z	11.03    (5/29/14)
S&P 500 Index	9.33
Customized Blend Index	4.67
Lipper Alternative Long/Short Equity Funds Average	3.14
Average Annual Total Returns (With Sales Charges) as of 3/31/15
	Since Inception
Class A	N/A (5/29/14)
Class C	N/A (5/29/14)
Class Z	N/A (5/29/14)
S&P 500 Index	N/A
Customized Blend Index	N/A
Lipper Alternative Long/Short Equity Funds Average	N/A
Average Annual Total Returns (Without Sales Charges) as of 3/31/15
	Since Inception
Class A	N/A (5/29/14)
Class C	N/A (5/29/14)
Class Z	N/A (5/29/14)

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential Long-Short Equity Fund (Class A shares) with a similar investment in the S&P 500 Index and the Customized Blend Index, by portraying the initial account values at the commencement of operations for Class A shares (May 29, 2014) and the account values at the end of the current fiscal year (March 31, 2015) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class C and Class Z shares will vary due to the differing charges and expenses applicable to each share class (as explained in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Source: Prudential Investments LLC and Lipper Inc.

Prudential Long-Short Equity Fund 3

Your Fund’s Performance (continued)

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

	Class A	Class C	Class Z
Maximum initial sales charge	5.50% of the public offering price	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
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	.30% (.25% currently)	1%	None

Benchmark Definitions

Customized Blend Index

The Customized Blend Index is a model portfolio consisting of the S&P (Standard & Poor’s) 500 Index (50%) which is unmanaged and provides a broad indicator of stock price movements, and the Citigroup 3-Month Treasury Bill Index (50%) which is unmanaged and represents monthly return equivalents of yield averages of the last three month Treasury Bill issues.

Lipper Alternative Long/Short Equity Funds Average

The Lipper Alternative Long/Short Equity Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper Alternative Long/Short Equity Funds category for the periods noted. Funds in the Lipper Alternative Long/Short Equity Funds employ portfolio strategies combining long holdings of equities with short sales of equity, equity options, or equity index options.

Investors cannot invest directly in an index. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Indexes and Lipper Average are measured from the closest month-end to the Fund’s inception date, and not from the Fund’s actual inception date.

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Five Largest Holdings—Long Positions expressed as a percentage of net assets as of 3/31/15
Microsoft Corp., Software	1.8	%
Johnson & Johnson, Pharmaceuticals	1.4
Amgen, Inc., Biotechnology	1.3
Google, Inc. (Class C Stock), Internet Software & Services	1.3
Wal-Mart Stores, Inc., Food & Staples Retailing	1.3

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

Five Largest Holdings—Short Positions expressed as a percentage of net assets as of 3/31/15
SunEdison, Inc., Semiconductors & Semiconductor Equipment	–1.0	%
B/E Aerospace, Inc., Aerospace & Defense	–1.0
Owens Corning, Textiles, Building Products	–1.0
Alliance Data Systems Corp., IT Services	–1.0
Workday, Inc. (Class A Stock), Software	–1.0

Five Largest Industries expressed as a percentage of net assets as of 3/31/15
Oil, Gas & Consumable Fuels	7.7	%
Biotechnology	7.0
Pharmaceuticals	6.0
Semiconductors & Semiconductor Equipment	5.7
Software	5.7

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

Prudential Long-Short Equity Fund 5

Strategy and Performance Overview

How did the Fund perform?

The Prudential Long-Short Equity Fund’s Class A shares returned 10.73% since the Fund’s inception on May 29, 2014, through March 31, 2015, outperforming the 9.33% return of the S&P 500 Index, and outperforming the 4.67% return of its Customized Blend Index. The Fund outperformed the 3.14% return of the Lipper Alternative Long/Short Equity Funds Average.

What were market conditions?

• The US economy experienced steady labor market gains. Consumer confidence and spending were up, but housing was still muddled. The US dollar gained significantly against other currencies, as Europe and parts of Asia attempted to jumpstart stalled economies.

• The US Federal Reserve (the Fed) ended its Quantitative Easing (QE) asset purchase program in October 2014. The Fed assured the markets that interest rates would stay low for a “considerable time.” The European Central Bank (ECB) announced it would create new stimulus plans.

• Despite tensions in the Middle East and Ukraine, equity markets were more responsive to improving economic growth in the United States and to easing monetary policy in Japan, Europe, and China.

• Volatility rattled markets later in the period. Concerns about global economic growth, the health of emerging markets, geopolitical tensions in the Middle East and Ukraine, and plunging oil prices had investors on edge, as the energy sector collapsed.

• More turbulence hit the markets late in the period, as the tech sector was hit hard, a strong dollar took its toll on corporate profits generated abroad, and investor anxiety increased over a possible rise in interest rates.

What were the main drivers of performance over the period?

Over the period, strong stock selection across most sectors had positive contributions to performance. QMA buys stocks that have good earnings potential, high quality, and better valuation than industry peers. The Fund shorts stocks that have the opposite characteristics.

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Since the Fund’s inception in May 2014, stocks that had high quality and good earnings prospects handily outperformed those with poor quality and negative earnings prospects. This was the primary driver of good returns. Favoring stocks with better valuation metrics had little impact on performance.

What were the best and worst performing sectors and what drove the performance?

The strongest positive contribution to portfolio returns came in the information technology, health care and industrial sectors. Positions in utilities had a slightly negative contribution to return.

• In information technology, companies that had positive estimate revisions were up over 26% versus the 13% average return for the sector as a whole during the period. The Fund was long on stocks such as Skyworks Solutions (+128%), Apple (+39%), and Integrated Devices (+51%), based on positive estimate revisions by analysts through the period. The Fund’s short positions were focused on stocks that had poor quality by QMA’s measures. These stocks were up as well in a strong market, but less than half as much as the sector as a whole. Short positions in stocks such as E2open and Maxwell Technologies fell by over 50%.

• In the health care sector as well, companies that had positive estimate revisions were up almost 34% versus a 24% average return for the sector as a whole during the period. The Fund was long on stocks such as Biogen (+32%), Pharmacyclics (+56%), and United Therapeutics (+78%), based on positive estimate revisions. Among short positions that had negative estimate revisions, Volcano (-37%) and Arrowhead Research (-61%) were among the biggest losers and added value.

• Stock selection in the industrials sector also added significant value. Most of the value added came from long positions in companies with positive estimate revisions. Airline holdings such as Southwest Airlines (+69%) and United Continental (+51%) were among the biggest outperformers.

• In the utility sector, where the portfolio lost value, long holdings underperformed both the average stock in the sector as well as short positions. Quality stocks were challenging and detracted from performance. For example, being long on AGL Resources (-14%), among the high quality stocks in the sector, hurt performance, as did a short position in a low quality stock such as TECO Energy, which was up 15%.

Prudential Long-Short Equity Fund 7

Strategy and Performance Overview (continued)

How did the Fund’s adjustments to market exposure over the period affect performance?

An adjustment for the Long-Short strategy is the increase or decrease of market exposure relative to risk. The portfolio had been positioned with below 50% of its market exposure to varying degrees, with an average exposure of 40%. This reduced volatility relative to the overall market, and the adjustments had a neutral effect on performance relative to QMA’s long term beta (a measure of risk) expectation of 50%. The positioning reflected concerns about modestly higher valuations, increased market volatility, perceived investor complacency toward company-level earnings risk, and geopolitical risk. The short positions were primarily in specific equities, but occasionally, short positions in exchange traded index futures were established to temporarily reduce net equity exposure.

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

The exchange traded futures, mentioned above, were used to temporarily reduce the exposure to equities. These positions were converted to securities. The exchange traded futures, mentioned above, were used to temporarily reduce the exposure to equities. These positions were converted to securities. Futures detracted slightly from performance.

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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 Long-Short Equity Fund 9

Fees and Expenses (continued)

Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period 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 Long-Short Equity 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	$	1,076.10		2.40	%	$	12.42
	Hypothetical	$	1,000.00	$	1,012.96		2.40	%	$	12.04
Class C	Actual	$	1,000.00	$	1,072.40		3.17	%	$	16.38
	Hypothetical	$	1,000.00	$	1,009.12		3.17	%	$	15.88
Class Z	Actual	$	1,000.00	$	1,079.00		2.14	%	$	11.09
	Hypothetical	$	1,000.00	$	1,014.26		2.14	%	$	10.75

*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 period ended March 31, 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.

10 Visit our website at www.prudentialfunds.com

The Fund’s annualized expense ratios for the period May 29, 2014 through March 31, 2015, are as follows:

Class	Gross Operating Expenses			Net Operating Expenses
A		3.61	%		2.41	%
C		4.32			3.16
Z		3.27			2.12

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 Long-Short Equity Fund 11

Portfolio of Investments

as of March 31, 2015

Description	Shares		Value (Note 1)
LONG-TERM INVESTMENTS    99.5%
COMMON STOCKS
Aerospace & Defense    3.2%
General Dynamics Corp.		2,900	$	393,617
Huntington Ingalls Industries, Inc.		2,700		378,405
Northrop Grumman Corp.		2,400		386,304
Spirit Aerosystems Holdings, Inc. (Class A Stock)*		2,300		120,083
				1,278,409
Air Freight & Logistics    1.7%
FedEx Corp.		1,520		251,484
United Parcel Service, Inc. (Class B Stock)(a)		4,500		436,230
				687,714
Airlines    1.7%
Republic Airways Holdings, Inc.*		5,200		71,500
Southwest Airlines Co.(a)		9,500		420,850
United Continental Holdings, Inc.*		2,400		161,400
				��
				653,750
Auto Components    1.4%
Johnson Controls, Inc.		4,200		211,848
Lear Corp.		2,200		243,804
Tenneco, Inc.*		1,500		86,130
				541,782
Automobiles    0.5%
Thor Industries, Inc.		2,900		183,309
Banks    1.5%
Fulton Financial Corp.		3,700		45,658
Great Western Bancorp, Inc.		1,000		22,010
KeyCorp		25,300		358,248
Regions Financial Corp.		10,800		102,060
WesBanco, Inc.		700		22,806
Wilshire Bancorp, Inc.		2,100		20,937
				571,719
Beverages    2.1%
Coca-Cola Enterprises, Inc.		2,300		101,660
Monster Beverage Corp.*(a)		3,100		429,025

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 13

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Beverages (cont’d.)
PepsiCo, Inc.		3,300	$	315,546
				846,231
Biotechnology    7.0%
Alexion Pharmaceuticals, Inc.*		1,260		218,358
Amgen, Inc.(a)		3,280		524,308
Biogen Idec, Inc.*(a)		1,180		498,243
Celgene Corp.*		2,500		288,200
Gilead Sciences, Inc.*(a)		5,000		490,650
Hyperion Therapeutics, Inc.*		1,700		78,030
Pharmacyclics, Inc.*(a)		1,760		450,472
United Therapeutics Corp.*		1,100		189,679
				2,737,940
Building Products    1.7%
A.O. Smith Corp.		3,800		249,508
American Woodmark Corp.*		2,700		147,771
Patrick Industries, Inc.*		2,400		149,448
Trex Co., Inc.*		1,900		103,607
Universal Forest Products, Inc.		400		22,192
				672,526
Capital Markets    0.5%
Ameriprise Financial, Inc.		190		24,859
Goldman Sachs Group, Inc. (The)		140		26,316
Lazard Ltd. (Class A Stock)		1,600		84,144
Piper Jaffray Cos.*		1,200		62,952
				198,271
Chemicals    1.7%
Celanese Corp. (Class A Stock)		3,600		201,096
LyondellBasell Industries NV (Class A Stock)		3,100		272,180
Stepan Co.		500		20,830
Tredegar Corp.		1,100		22,121
Westlake Chemical Corp.		2,300		165,462
				681,689
Commercial Services & Supplies    0.3%
MSA Safety, Inc.		1,000		49,880
Performant Financial Corp.*		5,700		19,380

See Notes to Financial Statements.

14

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Commercial Services & Supplies (cont’d.)
West Corp.		1,200	$	40,476
				109,736
Communications Equipment    3.3%
ARRIS Group, Inc.*		2,200		63,569
Cisco Systems, Inc.(a)		18,100		498,203
F5 Networks, Inc.*		360		41,378
Harris Corp.		2,800		220,528
Plantronics, Inc.		2,200		116,490
Polycom, Inc.*		6,600		88,440
QUALCOMM, Inc.		3,500		242,690
ShoreTel, Inc.*		2,000		13,640
				1,284,938
Construction & Engineering    0.2%
MYR Group, Inc.*		2,500		78,350
Construction Materials    0.3%
Headwaters, Inc.*		5,200		95,368
United States Lime & Minerals, Inc.		600		38,700
				134,068
Consumer Finance    0.3%
Nelnet, Inc. (Class A Stock)		2,400		113,568
Diversified Consumer Services    0.1%
American Public Education, Inc.*		800		23,984
Diversified Telecommunication Services    0.4%
Atlantic Tele-Network, Inc.		300		20,766
IDT Corp. (Class B Stock)		900		15,975
Inteliquent, Inc.		6,800		107,032
Intelsat SA*		1,800		21,600
				165,373
Electric Utilities    1.0%
PPL Corp.		12,100		407,286
Electrical Equipment    1.2%
Acuity Brands, Inc.		2,240		376,678

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 15

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Electrical Equipment (cont’d.)
Babcock & Wilcox Co. (The)		3,600	$	115,524
				492,202
Electronic Equipment, Instruments & Components    1.7%
Avnet, Inc.		600		26,700
CDW Corp.		6,900		256,956
CTS Corp.		2,500		44,975
Ingram Micro, Inc. (Class A Stock)*		3,600		90,432
Jabil Circuit, Inc.		1,600		37,408
Methode Electronics, Inc.		1,400		65,856
PC Connection, Inc.		2,400		62,616
Sanmina Corp.*		3,500		84,665
				669,608
Energy Equipment & Services    0.9%
Atwood Oceanics, Inc.		7,100		199,581
Era Group, Inc.*		3,400		70,856
Gulf Island Fabrication, Inc.		1,500		22,290
Matrix Service Co.*		1,700		29,852
Noble Corp. PLC		1,100		15,708
				338,287
Food & Staples Retailing    1.5%
Kroger Co. (The)		1,400		107,324
Wal-Mart Stores, Inc.(a)		6,100		501,725
				609,049
Food Products    2.0%
Bunge Ltd.		1,500		123,540
Cal-Maine Foods, Inc.		2,600		101,556
ConAgra Foods, Inc.		10,800		394,524
John B. Sanfilippo & Son, Inc.		500		21,550
Omega Protein Corp.*		2,200		30,118
Pilgrim’s Pride Corp.		300		6,777
Tyson Foods, Inc. (Class A Stock)		2,600		99,580
				777,645
Gas Utilities    1.6%
AGL Resources, Inc.		2,000		99,300
Atmos Energy Corp.		5,000		276,500

See Notes to Financial Statements.

16

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Gas Utilities (cont’d.)
UGI Corp.		8,100	$	263,979
				639,779
Health Care Equipment & Supplies    2.7%
Atrion Corp.		200		69,102
Boston Scientific Corp.*		8,500		150,875
C.R. Bard, Inc.		1,380		230,943
Edwards Lifesciences Corp.*(a)		3,020		430,229
Exactech, Inc.*		1,400		35,882
Globus Medical, Inc. (Class A Stock)*		900		22,716
Greatbatch, Inc.*		2,100		121,485
				1,061,232
Health Care Providers & Services    2.4%
Aetna, Inc.(a)		4,000		426,120
Almost Family, Inc.*		1,200		53,652
Anthem, Inc.		260		40,147
Cigna Corp.		1,300		168,272
Humana, Inc.		400		71,208
Laboratory Corp. of America Holdings*		200		25,218
UnitedHealth Group, Inc.		900		106,461
Universal Health Services, Inc. (Class B Stock)		300		35,313
				926,391
Health Care Technology    1.1%
Cerner Corp.*(a)		5,700		417,582
Hotels, Restaurants & Leisure    2.8%
Bloomin’ Brands, Inc.		12,400		301,692
Chipotle Mexican Grill, Inc.*		180		117,097
DineEquity, Inc.		1,000		107,010
Hyatt Hotels Corp. (Class A Stock)*		2,700		159,894
Jack in the Box, Inc.		1,000		95,920
Las Vegas Sands Corp.		4,100		225,664
Marriott Vacations Worldwide Corp.		1,200		97,260
				1,104,537
Household Durables    0.7%
Cavco Industries, Inc.*		1,200		90,072
Helen of Troy Ltd.*		1,200		97,788

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 17

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Household Durables (cont’d.)
La-Z-Boy, Inc.		1,300	$	36,543
Skullcandy, Inc.*		2,000		22,600
Universal Electronics, Inc.*		500		28,220
				275,223
Independent Power & Renewable Electricity Producers    1.2%
AES Corp.		4,800		61,680
Calpine Corp.*		17,900		409,373
				471,053
Insurance    0.6%
American Financial Group, Inc.		700		44,905
Assured Guaranty Ltd.		1,800		47,502
Fidelity & Guaranty Life		3,900		82,680
Hallmark Financial Services, Inc.*		2,700		28,620
National Western Life Insurance Co. (Class A Stock)		170		43,231
				246,938
Internet Software & Services    3.6%
Constant Contact, Inc.*		2,200		84,062
Google, Inc. (Class C Stock)*(a)		940		515,120
GrubHub, Inc.*		8,500		385,815
j2 Global, Inc.		1,300		85,384
LogMeIn, Inc.*		2,300		128,777
NIC, Inc.		5,800		102,486
Reis, Inc.		900		23,076
TechTarget, Inc.*		3,200		36,896
XO Group, Inc.*		3,600		63,612
				1,425,228
IT Services    1.8%
Booz Allen Hamilton Holding Corp.		6,300		182,322
Datalink Corp.*		4,300		51,772
DST Systems, Inc.		1,800		199,278
ExlService Holdings, Inc.*		2,000		74,400
MAXIMUS, Inc.		3,100		206,956
				714,728
Leisure Products    0.7%
Nautilus, Inc.*		1,500		22,905

See Notes to Financial Statements.

18

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Leisure Products (cont’d.)
Polaris Industries, Inc.		1,530	$	215,883
Vista Outdoor, Inc.*		480		20,554
				259,342
Life Sciences Tools & Services    0.9%
Agilent Technologies, Inc.		3,900		162,045
Cambrex Corp.*		700		27,741
Charles River Laboratories International, Inc.*		1,900		150,651
				340,437
Machinery    1.0%
Blount International, Inc.*		8,100		104,328
Hillenbrand, Inc.		1,500		46,305
Kadant, Inc.		300		15,783
Lincoln Electric Holdings, Inc.		900		58,851
Parker Hannifin Corp.		280		33,258
Standex International Corp.		300		24,639
Toro Co. (The)		1,600		112,192
				395,356
Media    1.2%
Cinemark Holdings, Inc.		1,400		63,098
Comcast Corp. (Class A Stock)		3,600		203,292
Discovery Communications, Inc. (Class C Stock)*		4,200		123,795
Madison Square Garden Co. (The)*		1,100		93,115
				483,300
Metals & Mining    0.8%
Century Aluminum Co.*		14,600		201,480
Globe Specialty Metals, Inc.		1,700		32,164
Stillwater Mining Co.*		4,800		62,016
				295,660
Multi-Utilities    0.7%
Public Service Enterprise Group, Inc.		2,900		121,568
Vectren Corp.		3,400		150,076
				271,644

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 19

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Multiline Retail    1.1%
Dillard’s, Inc. (Class A Stock)		2,780	$	379,498
Macy’s, Inc.		600		38,946
				418,444
Oil, Gas & Consumable Fuels    7.7%
Adams Resources & Energy, Inc.		500		33,605
EQT Corp.		5,000		414,350
Exxon Mobil Corp.		3,800		323,000
Marathon Petroleum Corp.		4,000		409,560
ONEOK, Inc.		4,800		231,552
PDC Energy, Inc.*(a)		7,500		405,300
Phillips 66(a)		5,600		440,160
Targa Resources Corp.		4,200		402,318
Tesoro Corp.		500		45,645
Valero Energy Corp.		2,000		127,240
World Fuel Services Corp.		3,300		189,684
				3,022,414
Paper & Forest Products    0.1%
Schweitzer-Mauduit International, Inc.		1,100		50,732
Pharmaceuticals    6.0%
AbbVie, Inc.(a)		8,000		468,320
Bristol-Myers Squibb Co.		2,800		180,600
Johnson & Johnson(a)		5,300		533,180
Lannett Co., Inc.*		5,500		372,405
Merck & Co., Inc.		5,600		321,888
Mylan NV*		3,100		183,985
Pfizer, Inc.		7,500		260,925
Sucampo Pharmaceuticals, Inc. (Class A Stock)*		1,900		29,564
				2,350,867
Professional Services    0.3%
ICF International, Inc.*		400		16,340
Resources Connection, Inc.		6,700		117,250
				133,590
Real Estate Investment Trusts (REITs)    3.0%
AG Mortgage Investment Trust, Inc.		4,200		79,128
Annaly Capital Management, Inc.		6,700		69,680

See Notes to Financial Statements.

20

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Real Estate Investment Trusts (REITs) (cont’d.)
Apollo Residential Mortgage, Inc.		6,000	$	95,700
Ashford Hospitality Prime, Inc.		800		13,416
Chambers Street Properties		12,700		100,076
Chatham Lodging Trust		2,600		76,466
Franklin Street Properties Corp.		5,200		66,664
GEO Group, Inc. (The)		2,200		96,228
Hospitality Properties Trust		6,200		204,538
Invesco Mortgage Capital, Inc.		5,100		79,203
Prologis, Inc.		1,100		47,916
RLJ Lodging Trust		7,700		241,087
Urstadt Biddle Properties, Inc. (Class A Stock)		600		13,836
				1,183,938
Real Estate Management & Development    1.7%
CBRE Group, Inc. (Class A Stock)*		11,100		429,681
Jones Lang LaSalle, Inc.		1,130		192,552
Marcus & Millichap, Inc.*		1,100		41,228
				663,461
Road & Rail    0.8%
CSX Corp.		800		26,496
Old Dominion Freight Line, Inc.*		1,600		123,680
Union Pacific Corp.		1,600		173,296
				323,472
Semiconductors & Semiconductor Equipment    5.7%
Avago Technologies Ltd.(a)		3,500		444,430
Diodes, Inc.*		1,200		34,272
Integrated Device Technology, Inc.*		17,800		356,356
Integrated Silicon Solution, Inc.		1,000		17,890
Intel Corp.		9,000		281,430
Kulicke & Soffa Industries, Inc.* (Singapore)		5,500		85,965
MaxLinear, Inc. (Class A Stock)*		6,100		49,593
Pericom Semiconductor Corp.		3,400		52,598
Qorvo, Inc.*		225		17,932
Skyworks Solutions, Inc.(a)		4,300		422,647
Tessera Technologies, Inc.		4,800		193,344
Texas Instruments, Inc.		5,000		285,925
				2,242,382

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 21

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Software    5.7%
CDK Global, Inc.		5,700	$	266,532
ePlus, Inc.*		400		34,772
Manhattan Associates, Inc.*		3,700		187,257
Microsoft Corp.(a)		17,200		699,266
MicroStrategy, Inc. (Class A Stock)*		800		135,352
NetScout Systems, Inc.*		1,000		43,850
Oracle Corp.		4,600		198,490
Progress Software Corp.*		1,500		40,755
PTC, Inc.*		2,900		104,893
SolarWinds, Inc.*		3,300		169,092
Solera Holdings, Inc.		1,000		51,660
SS&C Technologies Holdings, Inc.		1,400		87,220
Symantec Corp.		5,000		116,825
Synopsys, Inc.*		1,200		55,584
VASCO Data Security International, Inc.*		1,900		40,926
				2,232,474
Specialty Retail    4.2%
AutoNation, Inc.*		5,700		366,681
Build-a-Bear Workshop, Inc.*		1,600		31,440
Dick’s Sporting Goods, Inc.		600		34,194
Express, Inc.*		8,900		147,117
Gap, Inc. (The)		2,600		112,658
Haverty Furniture Cos., Inc.		2,400		59,712
Murphy USA, Inc.*		2,300		166,451
Ross Stores, Inc.		2,600		273,936
Tilly’s, Inc. (Class A Stock)*		1,600		25,040
Ulta Salon Cosmetics & Fragrance, Inc.*		2,640		398,244
Zumiez, Inc.*		1,300		52,325
				1,667,798
Technology Hardware, Storage & Peripherals    1.8%
Apple, Inc.		2,405		299,254
Hewlett-Packard Co.		12,900		401,964
				701,218
Textiles, Apparel & Luxury Goods    1.0%
Michael Kors Holdings Ltd.*		6,000		394,500

See Notes to Financial Statements.

22

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Tobacco    0.2%
Philip Morris International, Inc.		1,200	$	90,397
Trading Companies & Distributors    0.2%
United Rentals, Inc.*		500		45,580
Veritiv Corp.*		600		26,478
				72,058
TOTAL LONG-TERM INVESTMENTS (cost $36,451,006)				39,133,609	��
SHORT-TERM INVESTMENTS    7.5%
AFFILIATED MONEY MARKET MUTUAL FUND    6.8%
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund (cost $2,685,249)(Note 3)(b)		2,685,249		2,685,249

	Interest Rate			Maturity Date		Principal Amount (000)#
U.S. TREASURY OBLIGATIONS    0.7%
U.S. Treasury Bills		0.075	%		09/17/15		175	174,918
U.S. Treasury Bills		0.150	%		09/17/15		125	124,941
TOTAL U.S. TREASURY OBLIGATIONS (cost $299,850)								299,859
TOTAL SHORT-TERM INVESTMENTS (cost $2,985,099)								2,985,108
TOTAL INVESTMENTS, BEFORE SECURITIES SOLD SHORT    107.1% (cost $39,436,105; Note 5)								42,118,717

	Shares
SECURITIES SOLD SHORT(c)    (64.6)%
COMMON STOCKS
Aerospace & Defense    (1.4)%
American Science & Engineering, Inc.		400	(19,544	)
B/E Aerospace, Inc.		6,300	(400,806	)
DigitalGlobe, Inc.*		2,100	(71,547	)
Kratos Defense & Security Solutions, Inc.*		3,300	(18,249	)
LMI Aerospace, Inc.*		3,100	(37,851	)
			(547,997	)

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 23

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Air Freight & Logistics    (0.6)%
UTi Worldwide, Inc.*		4,400	$	(54,120	)
XPO Logistics, Inc.*		4,000		(181,880	)
				(236,000	)
Auto Components    (0.1)%
Motorcar Parts of America, Inc.*		700		(19,453	)
Remy International, Inc.		1,300		(28,873	)
				(48,326	)
Automobiles
Tesla Motors, Inc.*		30		(5,663	)
Banks    (1.4)%
Bank of Hawaii Corp.		900		(55,089	)
Commerce Bancshares, Inc.		3,500		(148,120	)
Home BancShares, Inc.		700		(23,723	)
PacWest Bancorp		2,200		(103,158	)
South State Corp.		700		(47,873	)
State Bank Financial Corp.		1,700		(35,700	)
UMB Financial Corp.		1,200		(63,468	)
United Bankshares, Inc.		2,400		(90,192	)
				(567,323	)
Biotechnology    (4.5)%
Alnylam Pharmaceuticals, Inc.*		3,400		(355,028	)
AMAG Pharmaceuticals, Inc.*		1,900		(103,854	)
Auspex Pharmaceuticals, Inc.*		1,200		(120,324	)
Celldex Therapeutics, Inc.*		6,200		(172,794	)
Cepheid, Inc.*		1,900		(108,110	)
Emergent Biosolutions, Inc.*		1,100		(31,636	)
Esperion Therapeutics, Inc.*		600		(55,560	)
Halozyme Therapeutics, Inc.*		8,800		(125,664	)
KYTHERA Biopharmaceuticals, Inc.*		1,400		(70,210	)
Radius Health, Inc.*		2,200		(90,552	)
Seattle Genetics, Inc.*		8,700		(307,545	)
Vertex Pharmaceuticals, Inc.*		2,020		(238,299	)
				(1,779,576	)
Building Products    (1.8)%
Armstrong World Industries, Inc.*		3,800		(218,386	)

See Notes to Financial Statements.

24

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Building Products (cont’d.)
NCI Building Systems, Inc.*		1,900	$	(32,832	)
Owens Corning		9,100		(394,940	)
Ply Gem Holdings, Inc.*		4,800		(62,400	)
				(708,558	)
Chemicals    (1.4)%
American Vanguard Corp.		3,900		(41,418	)
Balchem Corp.		500		(27,690	)
H.B. Fuller Co.		1,200		(51,444	)
Monsanto Co.		1,690		(190,193	)
Platform Specialty Products Corp.*		7,400		(189,884	)
Sensient Technologies Corp.		900		(61,992	)
				(562,621	)
Commercial Services & Supplies    (1.1)%
Covanta Holding Corp.		5,700		(127,851	)
Healthcare Services Group, Inc.		3,300		(106,029	)
Heritage-Crystal Clean, Inc.*		1,800		(21,060	)
InnerWorkings, Inc.*		7,600		(51,072	)
Mobile Mini, Inc.		1,400		(59,696	)
US Ecology, Inc.		1,400		(69,958	)
				(435,666	)
Communications Equipment    (0.9)%
Applied Optoelectronics, Inc.*		4,300		(59,684	)
Ciena Corp.*		4,700		(90,757	)
Finisar Corp.*		8,100		(172,854	)
ViaSat, Inc.*		800		(47,688	)
				(370,983	)
Construction & Engineering    (1.1)%
AECOM Technology Corp.*		11,400		(351,348	)
Granite Construction, Inc.		2,800		(98,392	)
				(449,740	)
Diversified Consumer Services    (0.9)%
Houghton Mifflin Harcourt Co.*		5,600		(131,488	)
Sotheby’s		5,300		(223,978	)
				(355,466	)

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 25

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Diversified Telecommunication Services    (0.5)%
Frontier Communications Corp.		27,600	$	(194,580	)
Electric Utilities    (0.4)%
NextEra Energy, Inc.		1,300		(135,265	)
Electrical Equipment    (0.1)%
Power Solutions International, Inc.*		400		(25,716	)
PowerSecure International, Inc.*		700		(9,212	)
				(34,928	)
Electronic Equipment, Instruments & Components    (1.5)%
FEI Co.		1,900		(145,046	)
II-VI, Inc.*		1,300		(23,998	)
Knowles Corp.*		6,400		(123,328	)
Maxwell Technologies, Inc.*		4,800		(38,688	)
Trimble Navigation Ltd.*		8,700		(219,240	)
Universal Display Corp.*		600		(28,050	)
				(578,350	)
Energy Equipment & Services    (0.9)%
Basic Energy Services, Inc.*		3,400		(23,562	)
Exterran Holdings, Inc.		400		(13,428	)
Natural Gas Services Group, Inc.*		2,200		(42,284	)
Patterson-UTI Energy, Inc.		11,800		(221,545	)
Rignet, Inc.*		500		(14,295	)
SEACOR Holdings, Inc.*		400		(27,868	)
				(342,982	)
Food & Staples Retailing
Chefs’ Warehouse, Inc. (The)*		500		(11,215	)
Food Products    (3.4)%
B&G Foods, Inc.		1,400		(41,202	)
Darling Ingredients, Inc.*		12,200		(170,922	)
Fresh Del Monte Produce, Inc.		1,800		(70,038	)
Hain Celestial Group, Inc. (The)*		5,800		(371,490	)
Keurig Green Mountain, Inc.		2,600		(290,498	)
Landec Corp.*		4,300		(59,985	)
Post Holdings, Inc.*		2,000		(93,680	)
TreeHouse Foods, Inc.*		2,600		(221,052	)
				(1,318,867	)

See Notes to Financial Statements.

26

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Gas Utilities    (0.3)%
Northwest Natural Gas Co.		2,200	$	(105,490	)
Health Care Equipment & Supplies    (2.2)%
Analogic Corp.		400		(36,360	)
AtriCure, Inc.*		1,100		(22,539	)
Endologix, Inc.*		3,500		(59,745	)
Haemonetics Corp.*		1,500		(67,380	)
Heartware International, Inc.*		900		(78,993	)
Inogen, Inc.*		1,300		(41,587	)
Insulet Corp.*		2,700		(90,045	)
LDR Holding Corp.*		1,700		(62,288	)
Nevro Corp.*		800		(38,344	)
NxStage Medical, Inc.*		1,200		(20,760	)
Quidel Corp.*		1,700		(45,866	)
Spectranetics Corp. (The)*		2,800		(97,328	)
STAAR Surgical Co.*		1,700		(12,631	)
Wright Medical Group, Inc.*		3,600		(92,880	)
Zeltiq Aesthetics, Inc.*		3,400		(104,822	)
				(871,568	)
Health Care Providers & Services    (2.7)%
Air Methods Corp.*		2,200		(102,498	)
BioScrip, Inc.*		13,100		(58,033	)
Capital Senior Living Corp.*		1,200		(31,128	)
ExamWorks Group, Inc.*		3,500		(145,670	)
HealthSouth Corp.		1,200		(53,232	)
Healthways, Inc.*		2,100		(41,370	)
Kindred Healthcare, Inc.		5,300		(126,087	)
PharMerica Corp.*		2,300		(64,837	)
Providence Service Corp. (The)*		1,200		(63,744	)
Tenet Healthcare Corp.*		7,500		(371,325	)
				(1,057,924	)
Health Care Technology    (0.5)%
HMS Holdings Corp.*		5,300		(81,885	)
Medidata Solutions, Inc.*		2,500		(122,600	)
				(204,485	)
Hotels, Restaurants & Leisure    (1.0)%
ClubCorp Holdings, Inc.		1,600		(30,976	)

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 27

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Hotels, Restaurants & Leisure (cont’d.)
Diamond Resorts International, Inc.*		2,400	$	(80,232	)
Jamba, Inc.*		1,300		(19,123	)
Krispy Kreme Doughnuts, Inc.*		1,000		(19,990	)
MGM Resorts International*		5,100		(107,253	)
SeaWorld Entertainment, Inc.		6,600		(127,248	)
				(384,822	)
Household Durables    (0.2)%
M/I Homes, Inc.*		1,000		(23,840	)
William Lyon Homes (Class A Stock)*		2,400		(61,968	)
				(85,808	)
Independent Power & Renewable Electricity Producers    (1.1)%
Dynegy, Inc.*		8,700		(273,441	)
Pattern Energy Group, Inc.		1,300		(36,816	)
TerraForm Power, Inc. (Class A Stock)		3,300		(120,483	)
				(430,740	)
Insurance    (0.3)%
Ambac Financial Group, Inc.*		1,600		(38,720	)
Federated National Holding Co.		500		(15,300	)
RLI Corp.		1,000		(52,410	)
				(106,430	)
Internet & Catalog Retail    (0.3)%
Shutterfly, Inc.*		2,900		(131,196	)
Internet Software & Services    (2.7)%
comScore, Inc.*		3,100		(158,720	)
Cornerstone OnDemand, Inc.*		2,400		(69,336	)
Demandware, Inc.*		2,700		(164,430	)
Marketo, Inc.*		4,000		(102,480	)
Pandora Media, Inc.*		16,100		(260,981	)
Twitter, Inc.*		5,500		(275,440	)
Yelp, Inc.*		800		(37,880	)
				(1,069,267	)
IT Services    (2.6)%
Alliance Data Systems Corp.*		1,290		(382,162	)
Cognizant Technology Solutions Corp. (Class A Stock)*		3,100		(193,409	)

See Notes to Financial Statements.

28

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
IT Services (cont’d.)
FleetCor Technologies, Inc.*		300	$	(45,276	)
Vantiv, Inc. (Class A Stock)*		9,700		(365,690	)
Virtusa Corp.*		500		(20,690	)
				(1,007,227	)
Leisure Products    (0.1)%
Callaway Golf Co.		4,200		(40,026	)
Life Sciences Tools & Services    (0.6)%
Albany Molecular Research, Inc.*		2,500		(44,000	)
Bio-techne Corp.		1,400		(140,406	)
Fluidigm Corp.*		1,500		(63,150	)
				(247,556	)
Machinery    (0.9)%
Colfax Corp.*		1,800		(85,914	)
NN, Inc.		1,500		(37,620	)
Pall Corp.		2,300		(230,897	)
				(354,431	)
Media    (1.7)%
AMC Networks, Inc. (Class A Stock)*		2,500		(191,600	)
Charter Communications, Inc. (Class A Stock)*		1,390		(268,423	)
EW Scripps Co. (Class A Stock)*		2,400		(68,256	)
Media General, Inc.*		3,700		(61,013	)
National CineMedia, Inc.		1,200		(18,120	)
Rentrak Corp.*		1,200		(66,672	)
				(674,084	)
Metals & Mining    (0.6)%
Allegheny Technologies, Inc.		6,600		(198,066	)
Horsehead Holding Corp.*		3,600		(45,576	)
				(243,642	)
Multi-Utilities    (0.8)%
TECO Energy, Inc.		16,400		(318,160	)
Multiline Retail    (0.1)%
Tuesday Morning Corp.*		3,300		(53,130	)

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 29

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels    (3.3)%
Bonanza Creek Energy, Inc.*		3,300	$	(81,378	)
Golar Lng Ltd. (Norway)		7,400		(246,272	)
Parsley Energy, Inc. (Class A Stock)*		10,000		(159,800	)
Rice Energy, Inc.*		10,500		(228,480	)
Scorpio Tankers, Inc.		2,800		(26,376	)
Stone Energy Corp.*		2,000		(29,360	)
W&T Offshore, Inc.		3,000		(15,330	)
Westmoreland Coal Co.*		500		(13,380	)
Whiting Petroleum Corp.*		3,800		(117,420	)
Williams Cos., Inc. (The)		7,400		(374,366	)
				(1,292,162	)
Paper & Forest Products    (0.5)%
Louisiana-Pacific Corp.*		11,000		(181,610	)
Pharmaceuticals    (2.4)%
Aerie Pharmaceuticals, Inc.*		800		(25,072	)
Biodelivery Sciences International, Inc.*		3,900		(40,950	)
Cempra, Inc.*		2,800		(96,068	)
Depomed, Inc.*		4,500		(100,845	)
Endo International PLC*		4,200		(376,740	)
IGI Laboratories, Inc.*		2,000		(16,320	)
Medicines Co. (The)*		5,100		(142,902	)
Nektar Therapeutics*		5,900		(64,900	)
Pernix Therapeutics Holdings, Inc.*		1,600		(17,104	)
Sagent Pharmaceuticals, Inc.*		1,800		(41,850	)
				(922,751	)
Professional Services    (0.5)%
Advisory Board Co. (The)*		2,500		(133,200	)
WageWorks, Inc.*		1,400		(74,662	)
				(207,862	)
Real Estate Investment Trusts (REITs)    (2.0)%
Essex Property Trust, Inc.		390		(89,661	)
Plum Creek Timber Co., Inc.		7,300		(317,185	)
Regency Centers Corp.		5,100		(347,004	)
Washington Real Estate Investment Trust		900		(24,867	)
				(778,717	)

See Notes to Financial Statements.

30

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Road & Rail    (1.2)%
Genesee & Wyoming, Inc. (Class A Stock)*		3,200	$	(308,608	)
Knight Transportation, Inc.		5,400		(174,150	)
				(482,758	)
Semiconductors & Semiconductor Equipment    (2.8)%
Applied Micro Circuits Corp.*		10,800		(55,080	)
Exar Corp.*		8,500		(85,425	)
First Solar, Inc.*		900		(53,811	)
Inphi Corp.*		2,400		(42,792	)
Lattice Semiconductor Corp.*		8,300		(52,622	)
SunEdison, Inc.*		17,200		(412,800	)
Synaptics, Inc.*		2,800		(227,654	)
Ultratech, Inc.*		3,900		(67,626	)
Veeco Instruments, Inc.*		2,800		(85,540	)
				(1,083,350	)
Software    (5.3)%
ACI Worldwide, Inc.*		1,800		(38,988	)
Cadence Design Systems, Inc.*		12,100		(223,124	)
Interactive Intelligence Group, Inc.*		900		(37,062	)
NetSuite, Inc.*		2,500		(231,900	)
Proofpoint, Inc.*		3,000		(177,660	)
PROS Holdings, Inc.*		1,600		(39,536	)
Rally Software Development Corp.*		6,200		(97,278	)
Red Hat, Inc.*		5,000		(378,750	)
Rosetta Stone, Inc.*		6,700		(50,987	)
salesforce.com, Inc.*		5,400		(360,774	)
Silver Spring Networks, Inc.*		8,300		(74,202	)
Workday, Inc. (Class A Stock)*		4,500		(379,845	)
				(2,090,106	)
Specialty Retail    (3.1)%
Advance Auto Parts, Inc.		800		(119,752	)
Boot Barn Holdings, Inc.*		1,700		(40,664	)
Cabela’s, Inc.*		5,500		(307,890	)
Five Below, Inc.*		4,100		(145,837	)
Men’s Wearhouse, Inc. (The)		3,700		(193,140	)
Monro Muffler Brake, Inc.		1,700		(110,585	)
Pep Boys-Manny Moe & Jack (The)*		3,700		(35,594	)

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 31

Portfolio of Investments

as of March 31, 2015 continued

Description	Shares		Value (Note 1)
COMMON STOCKS (Continued)
Specialty Retail (cont’d.)
Restoration Hardware Holdings, Inc.*		2,700	$	(267,813	)
				(1,221,275	)
Technology Hardware, Storage & Peripherals    (0.4)%
Cray, Inc.*		1,900		(53,352	)
Silicon Graphics International Corp.*		11,200		(97,328	)
				(150,680	)
Textiles, Apparel & Luxury Goods    (1.5)%
Crocs, Inc.*		6,000		(70,860	)
Hanesbrands, Inc.		7,960		(266,740	)
Under Armour, Inc. (Class A Stock)*		2,900		(234,175	)
				(571,775	)
Thrifts & Mortgage Finance    (0.1)%
LendingTree, Inc.*		900		(50,409	)
Tobacco    (0.3)%
Vector Group Ltd.		6,100		(134,017	)
Trading Companies & Distributors    (0.5)%
Fastenal Co.		2,500		(103,587	)
TAL International Group, Inc.*		2,200		(89,606	)
				(193,193	)
TOTAL SECURITIES SOLD SHORT (proceeds received $24,981,117)				(25,430,757	)
TOTAL INVESTMENTS, NET OF SECURITIES SOLD SHORT    42.4% (cost $14,454,988)				16,687,960
Other assets in excess of liabilities    57.6%				22,656,363
NET ASSETS    100.0%			$	39,344,323

* Non-income producing security.

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

(a) Represents security, or a portion thereof, segregated as collateral for short sales. The aggregate value of such securities is $9,452,059.

(b) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.

(c) The aggregate value of securities sold short is $25,430,757. Deposit with Barclays Capital Group combined with securities segregated as collateral in an amount of $26,507,324, exceeds the value of securities sold short as of March 31, 2015. Securities sold short are subject to contractual netting arrangements.

See Notes to Financial Statements.

32

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
Long Positions
Common Stocks
Aerospace & Defense	$	1,278,409	$	—	$	—
Air Freight & Logistics		687,714		—		—
Airlines		653,750		—		—
Auto Components		541,782		—		—
Automobiles		183,309		—		—
Banks		571,719		—		—
Beverages		846,231		—		—
Biotechnology		2,737,940		—		—
Building Products		672,526		—		—
Capital Markets		198,271		—		—
Chemicals		681,689		—		—
Commercial Services & Supplies		109,736		—		—
Communications Equipment		1,284,938		—		—
Construction & Engineering		78,350		—		—
Construction Materials		134,068		—		—
Consumer Finance		113,568		—		—
Diversified Consumer Services		23,984		—		—
Diversified Telecommunication Services		165,373		—		—
Electric Utilities		407,286		—		—
Electrical Equipment		492,202		—		—
Electronic Equipment, Instruments & Components		669,608		—		—
Energy Equipment & Services		338,287		—		—
Food & Staples Retailing		609,049		—		—
Food Products		777,645		—		—
Gas Utilities		639,779		—		—
Health Care Equipment & Supplies		1,061,232		—		—
Health Care Providers & Services		926,391		—		—

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 33

Portfolio of Investments

as of March 31, 2015 continued

	Level 1			Level 2		Level 3
Common Stocks (continued):
Health Care Technology	$	417,582		$	—	$	—
Hotels, Restaurants & Leisure		1,104,537			—		—
Household Durables		275,223			—		—
Independent Power & Renewable Electricity Producers		471,053			—		—
Insurance		246,938			—		—
Internet Software & Services		1,425,228			—		—
IT Services		714,728			—		—
Leisure Products		259,342			—		—
Life Sciences Tools & Services		340,437			—		—
Machinery		395,356			—		—
Media		483,300			—		—
Metals & Mining		295,660			—		—
Multi-Utilities		271,644			—		—
Multiline Retail		418,444			—		—
Oil, Gas & Consumable Fuels		3,022,414			—		—
Paper & Forest Products		50,732			—		—
Pharmaceuticals		2,350,867			—		—
Professional Services		133,590			—		—
Real Estate Investment Trusts (REITs)		1,183,938			—		—
Real Estate Management & Development		663,461			—		—
Road & Rail		323,472			—		—
Semiconductors & Semiconductor Equipment		2,242,382			—		—
Software		2,232,474			—		—
Specialty Retail		1,667,798			—		—
Technology Hardware, Storage & Peripherals		701,218			—		—
Textiles, Apparel & Luxury Goods		394,500			—		—
Tobacco		90,397			—		—
Trading Companies & Distributors		72,058			—		—
Affiliated Money Market Mutual Fund		2,685,249			—		—
U.S. Treasury Obligation		—			299,859		—
Securities Sold Short
Common Stocks
Aerospace & Defense		(547,997	)		—		—
Air Freight & Logistics		(236,000	)		—		—
Auto Components		(48,326	)		—		—
Automobiles		(5,663	)		—		—
Banks		(567,323	)		—		—
Biotechnology		(1,779,576	)		—		—
Building Products		(708,558	)		—		—
Chemicals		(562,621	)		—		—
Commercial Services & Supplies		(435,666	)		—		—
Communications Equipment		(370,983	)		—		—
Construction & Engineering		(449,740	)		—		—

See Notes to Financial Statements.

34

	Level 1			Level 2		Level 3
Common Stocks (continued):
Diversified Consumer Services	$	(355,466	)	$	—	$	—
Diversified Telecommunication Services		(194,580	)		—		—
Electric Utilities		(135,265	)		—		—
Electrical Equipment		(34,928	)		—		—
Electronic Equipment, Instruments & Components		(578,350	)		—		—
Energy Equipment & Services		(342,982	)		—		—
Food & Staples Retailing		(11,215	)		—		—
Food Products		(1,318,867	)		—		—
Gas Utilities		(105,490	)		—		—
Health Care Equipment & Supplies		(871,568	)		—		—
Health Care Providers & Services		(1,057,924	)		—		—
Health Care Technology		(204,485	)		—		—
Hotels, Restaurants & Leisure		(384,822	)		—		—
Household Durables		(85,808	)		—		—
Independent Power & Renewable Electricity Producers		(430,740	)		—		—
Insurance		(106,430	)		—		—
Internet & Catalog Retail		(131,196	)		—		—
Internet Software & Services		(1,069,267	)		—		—
IT Services		(1,007,227	)		—		—
Leisure Products		(40,026	)		—		—
Life Sciences Tools & Services		(247,556	)		—		—
Machinery		(354,431	)		—		—
Media		(674,084	)		—		—
Metals & Mining		(243,642	)		—		—
Multi-Utilities		(318,160	)		—		—
Multiline Retail		(53,130	)		—		—
Oil, Gas & Consumable Fuels		(1,292,162	)		—		—
Paper & Forest Products		(181,610	)		—		—
Pharmaceuticals		(922,751	)		—		—
Professional Services		(207,862	)		—		—
Real Estate Investment Trusts (REITs)		(778,717	)		—		—
Road & Rail		(482,758	)		—		—
Semiconductors & Semiconductor Equipment		(1,083,350	)		—		—
Software		(2,090,106	)		—		—
Specialty Retail		(1,221,275	)		—		—
Technology Hardware, Storage & Peripherals		(150,680	)		—		—
Textiles, Apparel & Luxury Goods		(571,775	)		—		—
Thrifts & Mortgage Finance		(50,409	)		—		—
Tobacco		(134,017	)		—		—
Trading Companies & Distributors		(193,193	)		—		—
Total	$	16,388,101		$	299,859	$	—

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 35

Portfolio of Investments

as of March 31, 2015 continued

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

Oil, Gas & Consumable Fuels	7.7	%
Biotechnology	7.0
Affiliated Money Market Mutual Fund	6.8
Pharmaceuticals	6.0
Semiconductors & Semiconductor Equipment	5.7
Software	5.7
Specialty Retail	4.2
Internet Software & Services	3.6
Communications Equipment	3.3
Aerospace & Defense	3.2
Real Estate Investment Trusts (REITs)	3.0
Hotels, Restaurants & Leisure	2.8
Health Care Equipment & Supplies	2.7
Health Care Providers & Services	2.4
Beverages	2.1
Food Products	2.0
IT Services	1.8
Technology Hardware, Storage & Peripherals	1.8
Air Freight & Logistics	1.7
Airlines	1.7
Building Products	1.7
Chemicals	1.7
Electronic Equipment, Instruments & Components	1.7
Real Estate Management & Development	1.7
Gas Utilities	1.6
Banks	1.5
Food & Staples Retailing	1.5
Auto Components	1.4
Electrical Equipment	1.2
Independent Power & Renewable Electricity Producers	1.2
Media	1.2
Health Care Technology	1.1
Multiline Retail	1.1
Electric Utilities	1.0
Machinery	1.0
Textiles, Apparel & Luxury Goods	1.0
Energy Equipment & Services	0.9
Life Sciences Tools & Services	0.9
Metals & Mining	0.8
Road & Rail	0.8
Household Durables	0.7
Leisure Products	0.7
Multi-Utilities	0.7
U.S. Treasury Obligations	0.7
Insurance	0.6
Automobiles	0.5
Capital Markets	0.5
Diversified Telecommunication Services	0.4
Commercial Services & Supplies	0.3
Construction Materials	0.3
Consumer Finance	0.3
Professional Services	0.3
Construction & Engineering	0.2
Tobacco	0.2
Trading Companies & Distributors	0.2
Diversified Consumer Services	0.1
Paper & Forest Products	0.1
Auto Components	(0.1	)
Electrical Equipment	(0.1	)
Leisure Products	(0.1	)
Multiline Retail	(0.1	)
Thrifts & Mortgage Finance	(0.1	)
Household Durables	(0.2	)
Gas Utilities	(0.3	)
Insurance	(0.3	)
Internet & Catalog Retail	(0.3	)
Tobacco	(0.3	)
Electric Utilities	(0.4	)
Technology Hardware, Storage & Peripherals	(0.4	)
Diversified Telecommunication Services	(0.5	)
Health Care Technology	(0.5	)
Paper & Forest Products	(0.5	)
Professional Services	(0.5	)
Trading Companies & Distributors	(0.5	)
Air Freight & Logistics	(0.6	)
Life Sciences Tools & Services	(0.6	)
Metals & Mining	(0.6	)
Multi-Utilities	(0.8	)
Communications Equipment	(0.9	)
Diversified Consumer Services	(0.9	)
Energy Equipment & Services	(0.9	)
Machinery	(0.9	)
Hotels, Restaurants & Leisure	(1.0	)
Commercial Services & Supplies	(1.1	)
Construction & Engineering	(1.1	)
Independent Power & Renewable Electricity Producers	(1.1	)
Road & Rail	(1.2	)

See Notes to Financial Statements.

36

Aerospace & Defense	(1.4	) %
Banks	(1.4	)
Chemicals	(1.4	)
Electronic Equipment, Instruments & Components	(1.5	)
Textiles Apparel & Luxury Goods	(1.5	)
Media	(1.7	)
Building Products	(1.8	)
Real Estate Investment Trusts (REITs)	(2.0	)
Health Care Equipment & Supplies	(2.2	)
Pharmaceuticals	(2.4	)
IT Services	(2.6	)
Health Care Providers & Services	(2.7	)
Internet Software & Services	(2.7	)
Semiconductors & Semiconductor Equipment	(2.8	)
Specialty Retail	(3.1	)
Oil, Gas & Consumable Fuels	(3.3	)
Food Products	(3.4	)
Biotechnology	(4.5	)
Software	(5.3	)
	42.4
Other Assets & Liabilities	57.6
	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary type of risk associated with this derivative instrument is equity risk.

The effect of such derivative instruments on the Portfolio’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.

The Portfolio did not hold any derivative instruments as of March 31, 2015, accordingly, no derivative positions were presented in the Statements of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the period* 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	$	(160,198	)

* Commencement of operations was May 29, 2014.

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 37

Statement of Assets & Liabilities

as of March 31, 2015

Assets
Investments at value:
Unaffiliated investments (cost $36,750,856)	$	39,433,468
Affiliated investments (cost $2,685,249)		2,685,249
Deposit with broker for securities sold short		17,055,265
Receivable for investments sold		8,536,262
Dividends receivable		44,215
Receivable for Fund shares sold		25,000
Prepaid expenses		270
Total assets		67,779,729
Liabilities
Securities sold short, at value (proceeds received $24,981,117)		25,430,757
Payable for investments purchased		2,910,783
Accrued expenses and other liabilities		69,715
Dividends payable on securities sold short		12,981
Management fee payable		10,891
Distribution fee payable		173
Affiliated transfer agent fee payable		106
Total liabilities		28,435,406
Net Assets	$	39,344,323
Net assets were comprised of:
Shares of beneficial interest, at par	$	3,569
Paid-in capital in excess of par		37,138,070
		37,141,639
Accumulated net investment loss		(19,597	)
Accumulated net realized loss on investment transactions		(10,691	)
Net unrealized appreciation on investments		2,232,972
Net assets, March 31, 2015	$	39,344,323

See Notes to Financial Statements.

38

Class A
Net asset value and redemption price per share, ($305,816 ÷ 27,795 shares of beneficial interest issued and outstanding)	$	11.00
Maximum sales charge (5.50% of offering price)		0.64
Maximum offering price to public	$	11.64
Class C
Net asset value, offering price and redemption price per share, ($213,595 ÷ 19,544 shares of beneficial interest issued and outstanding)	$	10.93
Class Z
Net asset value, offering price and redemption price per share, ($38,824,912 ÷ 3,521,438 shares of beneficial interest issued and outstanding)	$	11.03

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 39

Statement of Operations

For the period May 29, 2014* through March 31, 2015

Net Investment Loss
Income
Unaffiliated dividend income (net of foreign withholding taxes of $13)	$	329,074
Affiliated dividend income		2,208
Interest income		45
Total income		331,327
Expenses
Management fee		275,469
Distribution fee—Class A		234
Distribution fee—Class C		473
Dividend expense on short sales		91,681
Registration fees		82,000
Custodian and accounting fees		45,000
Reports to shareholders		36,000
Legal fees and expenses		30,000
Broker fees and expenses on short sales		30,110
Audit fee		30,000
Trustees’ fees		10,000
Transfer agent’s fees and expenses (including affiliated expense of $277)		1,000
Miscellaneous		12,433
Total expenses		644,400
Less: Management fee waiver and/or expense reimbursement		(226,757	)
Distribution fee waiver-Class A		(39	)
Net expenses		417,604
Net investment loss		(86,277	)
Realized And Unrealized Gain (Loss) On Investments
Net realized gain (loss) on:
Investment transactions		102,166
Futures transactions		(160,198	)
Short sales transactions		248,095
		190,063
Net change in unrealized appreciation (depreciation) on:
Investments		2,682,612
Short sales		(449,640	)
		2,232,972
Net gain on investments		2,423,035
Net Increase In Net Assets Resulting From Operations	$	2,336,758

* Commencement of operations.

See Notes to Financial Statements.

40

Statement of Changes in Net Assets

	May 29, 2014* through March 31, 2015
Increase (Decrease) In Net Assets
Operations
Net investment loss	$	(86,277	)
Net realized gain on investment transactions		190,063
Net change in unrealized appreciation (depreciation) on investments		2,232,972
Net increase in net assets resulting from operations		2,336,758
Distributions from net realized gains (Note 1)
Class A		(894	)
Class C		(552	)
Class Z		(147,116	)
		(148,562	)
Fund share transactions (Net of share conversions) (Note 6)
Net proceeds from shares sold		37,229,289
Net asset value of shares issued in reinvestment of dividends and distributions		148,562
Cost of shares reacquired		(221,724	)
Net increase in net assets from Fund share transactions		37,156,127
Total increase		39,344,323
Net Assets:
Beginning of period		—
End of period	$	39,344,323

* Commencement of operations.

Prudential Long-Short Equity Fund 41

Statement of Cash Flows

For Period May 29, 2014* through March 31, 2015

Increase (Decrease) In Cash
Cash flows used in operating activities:
Interest and dividends received	$	287,078
Operating expenses paid		(245,038	)
Dividends paid on securities sold short		(78,700	)
Purchases of long-term portfolio investments		(47,310,117	)
Purchases of short-term portfolio investments		(2,985,084	)
Proceeds from disposition of long-term portfolio investments		5,329,480
Net proceeds received from short sales		25,235,549
Net payment for future transactions		(160,198	)
Increase in other assets		(17,055,535	)
Net cash used in operating activities		(36,982,565	)
Cash flows from financing activities(1):
Proceeds from shares sold		37,204,289
Payment of shares redeemed		(221,724	)
Net cash provided by financing activities		36,982,565
Net change in cash		—
Cash at beginning of period		—
Cash at end of period	$	—
Reconciliation of Net Increase In Net Assets to Net Cash Used in Operating Activities
Net increase in net assets resulting from operations	$	2,336,758
Increase in investments		(14,645,051	)
Net realized gain on investment transactions		190,063
Increase in net unrealized appreciation on investments		(2,232,972	)
Increase in interest and dividends receivable		(44,215	)
Increase in net deposit with broker		(17,055,265	)
Increase in receivable for investments sold		(8,536,262	)
Increase in payable for investments purchased		2,910,783
Increase in prepaid assets		(270	)
Increase in dividends payable for securities sold short		12,981
Increase in accrued expenses and other liabilities		80,885
Total adjustments		(39,319,323	)
Net cash used in operating activities	$	(36,982,565	)

* Commencement of operations.

⁽¹⁾  Noncash financing activities not included herein consist of reinvestment of dividends and distributions of $148,562

See Notes to Financial Statements.

42

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”). The Trust currently consists of four funds: Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Long-Short Equity Fund (the “Fund”) and Prudential Short Duration Muni High Income Fund. These financial statements relate only to Prudential Long-Short Equity Fund. The Fund commenced investment operations on May 29, 2014. The Trust was established as a Delaware business trust on October 24, 1997. The investment objective of the Fund is to seek long-term capital appreciation.

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.

Prudential Long-Short Equity Fund 43

Notes to Financial Statements

continued

Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures and options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

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

44

indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.

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.

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

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

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

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly,

Prudential Long-Short Equity Fund 45

Notes to Financial Statements

continued

these realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.

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

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

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. 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-

46

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.

Short Sales: The Fund engages in short sales of securities as a method of hedging potential price declines in similar securities owned. The Fund may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When the Fund makes a short sale, it will borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow the particular security and may be obligated to return any interest or dividends received on such borrowed securities. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than the proceeds originally received, respectively, and is presented in the Statement of Operations as net realized gain or loss on short sales. The Fund maintains a segregated account of securities or other liquid assets, the dollar value of which is at least equal to its obligation with respect to short sales.

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 is disclosed by the REITs.

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 Portfolio. 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 of set-off existed and management has not elected to offset.

Prudential Long-Short Equity Fund 47

Notes to Financial Statements

continued

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investments 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 the accrual basis. Expenses are recorded on the 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 and 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 of net investment income and distributions of net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-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: It is the Fund’s policy 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 are recorded net of reclaimable amounts, at the time the related income is earned.

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

48

Note 2. Agreements

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all the investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Quantitative Management Association LLC (“QMA”). The subadvisory agreement provides that the subadviser furnish investment advisory services in connection with the management of the Fund. In connection therewith, QMA is obligated to keep certain books and records of the Fund. 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 1.40% of the average daily net assets of the Fund. The effective management fee rate was .25% for the period ended March 31, 2015.

For the period ended March 31, 2015, PI has contractually agreed to limit net annual Fund operating expenses (exclusive of distribution and service (12b-1) fees, interest, dividend and interest expense on short sales, brokerage, taxes, extraordinary and certain other expenses) of each class of shares to 1.50% of the Fund’s average daily net assets.

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

Pursuant to the Distribution 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. For the period ended March 31, 2015, PIMS contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares.

PIMS has advised the Fund that it has received $7,920 in front-end sales charges resulting from sales of Class A shares during the period ended March 31, 2015. From these fees, PIMS paid such sales charges to broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

Prudential Long-Short Equity Fund 49

Notes to Financial Statements

continued

PIMS has advised the Fund that for the period ended March 31, 2015, there were no contingent deferred sales charges imposed.

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 invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of 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, excluding short-term investments, for the period ended March 31, 2015, were $50,220,900 and $13,870,134, respectively. Portfolio securities short sales and purchases to cover were $35,627,360 and $10,391,811, respectively.

Note 5. Distributions and Tax Information

Distributions to shareholders 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. In order to present accumulated net investment loss, accumulated net realized loss on investment transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to accumulated net investment loss, accumulated net realized loss on investment transactions and paid-in capital in excess of par. For the period ended March 31, 2015, the adjustments were to decrease accumulated net investment loss by $66,680, increase accumulated net realized loss on investment transactions by $52,192 and decrease paid-in capital in excess of par by $14,488 due to differences in the treatment for book and tax purposes of non-deductible stock issuance costs, net operating losses, overdistribution, investments in partnerships and other book to tax differences. Net investment loss, net realized gain (loss) on investment transactions and net assets were not affected by these adjustments.

50

For the period ended March 31, 2015, the tax character of dividends paid by the Fund was $148,562 of ordinary income.

As of March 31, 2015, there were no accumulated undistributed earnings on a tax basis.

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

Tax Basis	Appreciation	Depreciation	Net Unrealized Appreciation
$39,434,022	$3,428,845	$(744,150)	$2,684,695

The difference between book basis and tax basis is primarily attributable to investments in partnerships.

The Fund elected to treat post-October capital losses of approximately $13,000 and certain late-year ordinary income losses of approximately $17,000 as having been incurred in the following fiscal year (March 31, 2016).

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 provisions for income tax are 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, and Class Z shares. Class A shares are sold with front-end sales charge of up to 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months of purchase. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value per share.

Prudential Long-Short Equity Fund 51

Notes to Financial Statements

continued

As of March 31, 2015, Prudential through its affiliates owned 1,007 Class A, 1,007 Class C shares and 2,014,246 Class Z shares of the Fund.

Transaction in shares of beneficial interest were as follows:

Class A	Shares			Amount
Period ended March 31, 2015*:
Shares sold		40,205		$	426,500
Shares issued in reinvestment of dividends and distributions		84			894
Shares reacquired		(12,050	)		(124,714	)
Net increase (decrease) in shares outstanding before conversion		28,239			302,680
Shares reacquired upon conversion into Class Z		(444	)		(4,885	)
Net increase (decrease) in shares outstanding		27,795		$	297,795
Class C
Period ended March 31, 2015*:
Shares sold		19,492		$	208,495
Shares issued in reinvestment of dividends and distributions		52			552
Net increase (decrease) in shares outstanding		19,544		$	209,047
Class Z
Period ended March 31, 2015*:
Shares sold		3,516,128		$	36,594,294
Shares issued in reinvestment of dividends and distributions		13,813			147,116
Shares reacquired		(8,946	)		(97,010	)
Net increase (decrease) in shares outstanding before conversion		3,520,995			36,644,400
Shares issued upon conversion from Class A		443			4,885
Net increase (decrease) in shares outstanding		3,521,438		$	36,649,285

* Commencement of operations on May 29, 2014.

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% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the

52

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 period 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.

Prudential Long-Short Equity Fund 53

Financial Highlights

Class A Shares
	May 29, 2014(b) through March 31, 2015(c)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$10.00
Income (loss) from investment operations:
Net investment loss		(.05	)
Net realized and unrealized gain on investments		1.12
Total from investment operations		1.07
Less Dividends and Distributions:
Distributions from net realized gains		(.07	)
Net asset value, end of period		$11.00
Total Return(a):		10.73%
Ratios/Supplemental Data:
Net assets, end of period (000)		$306
Average net assets (000)		$93
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		2.41%	(e)(g)
Expenses before waivers and/or expense reimbursement		3.61%	(e)(g)
Net investment loss		(.61)%	(e)
Portfolio turnover rate		131%	(f)

(a) Total return does not consider the effect of sales load. 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

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

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

(e) Annualized.

(f) Not annualized.

(g) The expense ratio includes dividend expense and broker fees and expenses on short sales of 0.63% for the period ended March 31, 2015.

See Notes to Financial Statements.

54

Class C Shares
	May 29, 2014(b) through March 31, 2015(c)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$10.00
Income (loss) from investment operations:
Net investment loss		(.12	)
Net realized and unrealized gain on investments		1.12
Total from investment operations		1.00
Less Dividends and Distributions:
Distributions from net realized gains		(.07	)
Net asset value, end of period		$10.93
Total Return(a):		10.03%
Ratios/Supplemental Data:
Net assets, end of period (000)		$214
Average net assets (000)		$56
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		3.16%	(e)(g)
Expenses before waivers and/or expense reimbursement		4.32%	(e)(g)
Net investment loss		(1.38)%	(e)
Portfolio turnover rate		131%	(f)

(a) Total return does not consider the effect of sales load. 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

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

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

(e) Annualized.

(f) Not annualized.

(g) The expense ratio includes dividend expense and broker fees and expenses on short sales of 0.65% for the period ended March 31, 2015.

See Notes to Financial Statements.

Prudential Long-Short Equity Fund 55

Financial Highlights

continued

Class Z Shares
	May 29, 2014(b) through March 31, 2015(c)
Per Share Operating Performance:
Net Asset Value, Beginning Of Period		$10.00
Income (loss) from investment operations:
Net investment loss		(.04	)
Net realized and unrealized gain on investments		1.14
Total from investment operations		1.10
Less Dividends and Distributions:
Distributions from net realized gains		(.07	)
Net asset value, end of period		$11.03
Total Return(a):		11.03%
Ratios/Supplemental Data:
Net assets, end of period (000)		$38,825
Average net assets (000)		$23,245
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		2.12%	(e)(g)
Expenses before waivers and/or expense reimbursement		3.27%	(e)(g)
Net investment loss		(.44)%	(e)
Portfolio turnover rate		131%	(f)

(a) 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 returns for periods less than one full year are not annualized.

(b) Commencement of operations.

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

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

(e) Annualized.

(f) Not annualized.

(g) The expense ratio includes dividend expense and broker fees and expenses on short sales of 0.62% for the period ended March 31, 2015.

See Notes to Financial Statements.

56

Report of Independent Registered Public

Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

We have audited the accompanying statement of assets and liabilities of Prudential Long-Short Equity Fund (hereafter referred to as the “Fund”), a series of Prudential Investment Portfolios 12, including the portfolio of investments, as of March 31, 2015, the related statement of operations, the statement of changes in net assets, statement of cash flows and financial highlights for the period May 29, 2014 (commencement of operations) through March 31, 2015. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of March 31, 2015, and the results of its operations, the changes in its net assets, its cash flows and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

May 15, 2015

Prudential Long-Short Equity Fund 57

Federal Income Tax Information

(Unaudited)

For the period ended March 31, 2015, the Fund reports, in accordance with Section 854 of the Internal Revenue Code, the following percentages of the ordinary income dividends paid as 1) qualified dividend income (QDI); and 2) eligible for corporate dividends received deduction (DRD):

	QDI			DRD
Prudential Long-Short Equity Fund		100	%		100	%

For the fiscal period ended March 31, 2015, the Fund reports the maximum amount allowable but not less than 100% as short-term capital gain distributions in accordance with Section 871(k)(2) and 881(e)(2) of the Internal Revenue Code. Short-term capital gain distributions do not include any distributions paid by a fund with respect to Fund tax years beginning after March 31, 2015. Consequently, the provision expires with respect to such distributions paid after the Fund’s fiscal year end.

In January 2016, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the federal tax status of distributions received by you in calendar year 2015.

58

Results of Proxy Voting

(Unaudited)

At the special meeting of shareholders held on November 26, 2014, shareholders of the Prudential Investment Portfolios, Inc. 12 which is comprised of Prudential Global Real Estate Fund, Prudential US Real Estate Fund, Prudential Short Duration Muni High Income Fund and Prudential Long-Short Equity Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:

To elect twelve Directors:

	SHARES VOTED		% OF VOTED		% OF TOTAL
(a) Ellen S. Alberding;
FOR		130,451,075.265		99.405		82.566
WITHHELD		782,095.872		0.595		0.495
(b) Kevin J. Bannon;
FOR		130,464,262.065		99.415		82.575
WITHHELD		768,909.072		0.585		0.486
(c) Linda W. Bynoe;
FOR		130,450,136.572		99.404		82.566
WITHHELD		783,034.565		0.596		0.495
(d) Keith F. Hartstein;
FOR		130,418,994.870		99.380		82.546
WITHHELD		814,176.267		0.620		0.515
(e) Michael S. Hyland;
FOR		130,411,843.871		99.375		82.542
WITHHELD		821,327.266		0.625		0.519
(f) Stephen P. Munn;
FOR		130,356,575.651		99.333		82.507
WITHHELD		876,595.486		0.667		0.554
(g) James E. Quinn;
FOR		130,446,726.994		99.401		82.564
WITHHELD		786,444.143		0.599		0.497
(h) Richard A. Redeker;
FOR		130,311,471.503		99.298		82.478
WITHHELD		921,699.634		0.702		0.583
(i) Stephen G. Stoneburn;
FOR		130,356,065.699		99.332		82.506
WITHHELD		877,105.438		0.668		0.555
(j) Stuart S. Parker;
FOR		130,468,581.093		99.418		82.578
WITHHELD		764,590.044		0.582		0.483

Prudential Long-Short Equity Fund 59

Results of Proxy Voting

(Unaudited) continued

	SHARES VOTED		% OF VOTED		% OF TOTAL
(k) Scott E. Benjamin; and
FOR		130,474,677.168		99.423		82.581
WITHHELD		758,493.969		0.577		0.480
(l) Grace C. Torres.
FOR		130,486,922.341		99.432		82.589
WITHHELD		746,248.796		0.568		0.472

60 Visit our website at www.prudentialfunds.com

INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

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

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Ellen S. Alberding (57) Board Member Portfolios Overseen: 62	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (62) Board Member Portfolios Overseen: 62	Managing Director (since April 2008) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).
Linda W. Bynoe (62) Board Member Portfolios Overseen: 62	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

Prudential Long-Short Equity Fund

Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Keith F. Hartstein (58) Board Member Portfolios Overseen: 62	Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Michael S. Hyland, CFA (69) Board Member Portfolios Overseen: 62	Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).	None.
Stephen P. Munn (72) Board Member Portfolios Overseen: 62	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).
James E. Quinn (63) Board Member Portfolios Overseen: 62	Retired; formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1994).	Director of Deckers Outdoor Corporation (footwear manufacturer) (since 2011).
Richard A. Redeker (71) Board Member & Independent Chair Portfolios Overseen: 62	Retired Mutual Fund Senior Executive (47 years); Management Consultant; Director, Mutual Fund Directors Forum (since 2014); Independent Directors Council (organization of independent mutual fund directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.

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Independent Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stephen G. Stoneburn (71) Board Member Portfolios Overseen: 62	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.

Interested Board Members(1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years
Stuart S. Parker (52) Board Member & President Portfolios Overseen: 62	President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).	None.
Scott E. Benjamin (42) Board Member & Vice President Portfolios Overseen: 62	Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.
Grace C. Torres* (55) Board Member Portfolios Overseen: 60	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of Prudential Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.	None.

* Note: Prior to her retirement in 2014, Ms. Torres was employed by Prudential Investments LLC. Due to her prior employment, she is considered to be an “interested person” under the 1940 Act. Ms. Torres is a non-management Interested Board Member.

Prudential Long-Short Equity Fund

⁽¹⁾  The year that each Board Member joined the Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 2003; Stephen G. Stoneburn, 2001;Grace C. Torres, 2014; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Raymond A. O’Hara (59) Chief Legal Officer	Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).	Since 2012
Chad A. Earnst (39) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of Prudential Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential Investments Funds, Target Funds, Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., Prudential Global Short Duration High Yield Income Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Jennison MLP Income Fund, Inc.; formerly Assistant Director (March 2010-August 2014) of the Asset Management Unit, Division of Enforcement, US Securities & Exchange Commission; Assistant Regional Director (January 2010-August 2014), Branch Chief (June 2006–December 2009) and Senior Counsel (April 2003-May 2006) of the Miami Regional Office, Division of Enforcement, US Securities & Exchange Commission.	Since 2014
Deborah A. Docs (57) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2004
Jonathan D. Shain (56) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since 2005
Claudia DiGiacomo (40) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since 2005
Andrew R. French (52) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since 2006

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Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Amanda S. Ryan (37) Assistant Secretary	Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray LLP (2008-2012).	Since 2012
Theresa C. Thompson (52) Deputy Chief Compliance Officer	Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).	Since 2008
Richard W. Kinville (46) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).	Since 2011
M. Sadiq Peshimam (51) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of Prudential Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since 2006
Peter Parrella (56) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).	Since 2007
Lana Lomuti (47) Assistant Treasurer	Vice President (since 2007) and Director (2005-2007), within Prudential Mutual Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.	Since 2014
Linda McMullin (53) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since 2014
Kelly A. Coyne (46) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since 2015

^(a)  Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Prudential Long-Short Equity Fund

Explanatory Notes to Tables:

• Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC.

• Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

• There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

• “Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

• “Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which Prudential Investments LLC serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

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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 Long-Short Equity Fund, Prudential Investments, Attn: Board of Trustees, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director 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.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

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

PRUDENTIAL LONG-SHORT EQUITY FUND

SHARE CLASS	A	C	Z
NASDAQ	PLHAX	PLHCX	PLHZX
CUSIP	744336868	744336850	744336843

MF221E    0277392-00001-00

Item 2 – Code of Ethics — See Exhibit (a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

The registrant’s Board has determined that Mr. Stephen P. Munn, member of the Board’s Audit Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.

Item 4 – Principal Accountant Fees and Services –

(a) Audit Fees

For the fiscal years ended March 31, 2015 and March 31, 2014, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $119,720 and $49,720, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

None.

(c) Tax Fees

None.

(d) All Other Fees

None.

(e) (1) Audit Committee Pre-Approval Policies and Procedures

THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent Accountants

The Audit Committee of each Prudential Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

• a review of the nature of the professional services expected to be provided,

• a review of the safeguards put into place by the accounting firm to safeguard independence, and

• periodic meetings with the accounting firm.

Policy for Audit and Non-Audit Services Provided to the Funds

On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services. Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants. Proposed services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider for pre-approval.

Audit Services

The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:

• Annual Fund financial statement audits

• Seed audits (related to new product filings, as required)

• SEC and regulatory filings and consents

Audit-related Services

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:

• Accounting consultations

• Fund merger support services

• Agreed Upon Procedure Reports

• Attestation Reports

• Other Internal Control Reports

Individual audit-related services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Tax Services

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:

• Tax compliance services related to the filing or amendment of the following:

• Federal, state and local income tax compliance; and,

• Sales and use tax compliance

• Timely RIC qualification reviews

• Tax distribution analysis and planning

• Tax authority examination services

• Tax appeals support services

• Accounting methods studies

• Fund merger support services

• Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Other Non-audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Proscribed Services

The Fund’s independent accountants will not render services in the following categories of non-audit services:

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

• Financial information systems design and implementation

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

• Actuarial services

• Internal audit outsourcing services

• Management functions or human resources

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

• Legal services and expert services unrelated to the audit

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

Pre-approval of Non-Audit Services Provided to Other Entities Within the Prudential Fund Complex

Certain non-audit services provided to Prudential Investments LLC or any of its affiliates that also provide ongoing services to the Prudential Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds. Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Although the Audit Committee will not pre-approve all services provided to Prudential Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to Prudential Investments and its affiliates.

(e) (2) Percentage of services referred to in 4(b) – 4(d) that were approved by the audit committee –

None.

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater

than 50%.

The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

(g) Non-Audit Fees

Not applicable to Registrant for the fiscal years 2015 and 2014. The aggregate non-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years 2015 and 2014 was $0 and $0, respectively.

(h) Principal Accountant’s Independence

Not applicable as KPMG has not provided non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

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

SIGNATURES

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

Registrant:	Prudential Investment Portfolios 12
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