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
(This Form N-CSR relates solely to the Registrant’s: Prudential QMA Long-Short Equity Fund, Prudential QMA Large-Cap Core Equity PLUS Fund, Prudential Short Duration Muni High Income Fund and Prudential US Real Estate Fund)
Address of principal executive offices:	655 Broad Street, 17th Floor
	Newark, New Jersey 07102
Name and address of agent for service:	Deborah A. Docs
	655 Broad Street, 17th Floor
	Newark, New Jersey 07102
Registrant’s telephone number, including area code:	800-225-1852
Date of fiscal year end:	3/31/2018
Date of reporting period:	3/31/2018

Item 1 – Reports to Stockholders

PRUDENTIAL US REAL ESTATE FUND

ANNUAL REPORT

MARCH 31, 2018

To enroll in e-delivery, go to pgiminvestments.com/edelivery

Objective: Capital appreciation and income

Highlights

PRUDENTIAL US REAL ESTATE FUND

• For the trailing 12 months, much worked in the Fund’s favor. The majority of sectors outperformed relative to the benchmark. Stock selection was positive, and asset allocation had a neutral effect on results.

• The healthcare sector was the best performer, as stock selection was strong. Security selection was also favorable in the residential and specialty housing sectors, significantly contributing to performance relative to the benchmark. To a lesser degree, the diversified, industrial, office, and shopping center sectors also contributed to the Fund’s outperformance.

• The only detractor for the period was the mall sector. Stock selection was negative among mall names, but the Fund’s underweight position in the sector had a small positive impact on results.

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), member SIPC. PGIM Real Estate is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. ^© 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on June 11, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

- Not part of the Annual Report -

Prudential US Real Estate Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

- Not part of the Annual Report -

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

- Not part of the Annual Report -

Prudential US Real Estate Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	9
Strategy and Performance Overview	12
Fees and Expenses	16
Holdings and Financial Statements	19

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Letter from the President

Dear Shareholder:

We hope you find the annual report for Prudential US Real Estate Fund informative and useful. The report covers performance for the 12-month period ended March 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds will be renamed from Prudential to PGIM Funds. Renaming our funds is part of our ongoing effort to further build our reputation

and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name is changing. Your Fund’s management and operation, along with the Fund’s symbols, will remain the same.*

Over the reporting period, global economic growth continued its positive momentum, and central banks gradually tightened monetary policy. The US economy experienced moderate expansion and robust employment levels.

Equity returns were solid, due to healthy earnings expectations and the anticipated impact from tax reform. Global equities, including emerging markets, generally posted strong returns. US equities soared on new regulatory policy and revised corporate tax legislation. However, late in the period volatility arose on jitters over inflation and rising interest rates, tariffs, and a potential trade war.

In bond markets, US Treasury yields rose across both short and longer maturities. European bonds followed and often led during the period. In Japan, the policy stance kept yields considerably lower. US corporate bonds handily outpaced Treasuries. Although most bond market sectors delivered positive returns, a great deal of gains were erased at the end of the period. In March, the Federal Reserve hiked interest rates for the sixth time since 2015, based on confidence in the economy.

Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart Parker, President

Prudential US Real Estate Fund

May 15, 2018

*Note: The Prudential Day One Funds will not be changing their names.

Prudential US Real Estate Fund 7

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.pgiminvestments.com or by calling (800) 225-1852.

	Average Annual Total Returns as of 3/31/18 (with sales charges)
	One Year (%)	Five Years (%)	Since Inception (%)
Class A	–7.73	3.89	6.86 (12/21/10)
Class B	–7.69	4.15	6.91 (12/21/10)
Class C	–4.03	4.28	6.89 (12/21/10)
Class Z	–2.09	5.35	7.97 (12/21/10)
Class Q	N/A	N/A	–3.31* (5/25/17)
FTSE NAREIT Equity REITs Index
	–4.51	5.92	8.81
S&P 500 Index
	13.98	13.29	13.12
Lipper Equity Real Estate Funds Average
	–2.13	5.49	8.17

	Average Annual Total Returns as of 3/31/18 (without Sales Charges)
	One Year (%)	Five Years (%)	Since Inception (%)
Class A	–2.36	5.07	7.70 (12/21/10)
Class B	–3.11	4.29	6.91 (12/21/10)
Class C	–3.11	4.28	6.89 (12/21/10)
Class Z	–2.09	5.35	7.97 (12/21/10)
Class Q	N/A	N/A	–3.31* (5/25/17)
FTSE NAREIT Equity REITs Index
	–4.51	5.92	8.81
S&P 500 Index
	13.98	13.29	13.12
Lipper Equity Real Estate Funds Average
	–2.13	5.49	8.17

*Not annualized

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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 Z 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 Z shares (December 21, 2010) and the account values at the end of the current fiscal year (March 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class C, and Class Q 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: PGIM Investments LLC and Lipper Inc.

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the class’ inception date.

Prudential US Real Estate Fund 9

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**	Class Q***
Maximum initial sales charge	5.50% of the public offering price	None	None	None	None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	5.00% (Yr.1) 4.00% (Yr.2) 3.00% (Yr.3) 2.00% (Yr.4) 1.00% (Yr.5&6) 0.00% (Yr.7)	1.00% on sales made within 12 months of purchase	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.30% (0.25% currently)	1.00%	1.00%	None	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.

**Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” in the front of this report for more information.

***Class Q shares will be renamed as Class R6 shares effective on June 11, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 3 of this report for more information.

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 REITs listed on the New York Stock Exchange, the NASDAQ National Market, and the NYSE MKT LLC. The Index is designed to reflect the performance of all publicly-traded equity REITs as a whole.

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.

Lipper Equity Real Estate Funds Average—The Lipper Equity Real Estate Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Equity Real Estate Funds universe 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 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.

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Presentation of Fund Holdings

Five Largest Holdings expressed as a percentage of net assets as of 3/31/18 (%)
AvalonBay Communities, Inc., Residential REITs	4.8
Simon Property Group, Inc., Retail REITs	4.7
Welltower, Inc., Healthcare REITs	4.7
Equinix, Inc., Specialized REITs	4.2
Equity LifeStyle Properties, Inc., Residential REITs	3.7

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

Five Largest Industries expressed as a percentage of net assets as of 3/31/18 (%)
Residential REITs	22.3
Specialized REITs	14.9
Industrial REITs	13.6
Office REITs	12.7
Healthcare REITs	10.8

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

Prudential US Real Estate Fund 11

Strategy and Performance Overview

How did the Fund perform?

The Prudential US Real Estate Fund’s Class Z shares lost –2.09% for the 12-month period that ended March 31, 2018. Over the same period, the FTSE NAREIT Equity REITs Index (the Index) returned –4.51%, and the Lipper Equity Real Estate Funds Average returned –2.13%. The S&P 500 Index returned 13.98%.

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

• From a relative valuation perspective, real estate investments trust (REITs) ended the trailing 12 months trading approximately 10% below net asset value (NAV), compared to a 2.4% premium historically.¹ Core real estate traded at a 16% discount to NAV, with certain sectors trading at very wide discounts relative to their historical levels. The office sector was at a 21% discount versus a 2% historical premium. The apartment sector traded at a 15.4% discount versus a 1% historical premium.

• Implied cap rate spreads of REITs relative to the 10-year US Treasury remained wide at roughly 320 bps.² It is important to note that, during the last peak in 2007, this spread turned negative, with REIT implied cap rates below the 10-year Treasury yield. The current level of spread provided REITs with a cushion if interest rates increase, as spreads could contract without any deterioration in real estate value. Additionally, REIT cash flow multiple spreads widened to three times below the S&P 500 earnings multiple—the most attractive level relative to the S&P 500 since the credit crisis in 2009.

What worked?

• For the trailing 12 months, much worked in the Fund’s favor. The majority of sectors outperformed relative to the benchmark. Stock selection was positive, and asset allocation had a neutral effect on results.

• The healthcare sector was the best performer, as stock selection was strong. Security selection was also favorable in the residential and specialty housing sectors, significantly contributing to performance relative to the benchmark. To a lesser degree, the diversified, industrial, office, and shopping center sectors also contributed to the Fund’s outperformance.

What didn’t work?

• The only detractor for the period was the mall sector. Stock selection was negative among mall names, but the Fund’s underweight position in the sector had a small positive impact on results.

¹  ISI, as of March 31, 2018

²  Citigroup, as of March 31, 2018

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The percentage points shown in the tables identify each security’s positive or negative contribution to the Fund’s return, which is the sum of all contributions by individual holdings.

Top Contributors (%)		Top Detractors (%)
Rexford Industrial Realty, Inc.	0.53	Simon Property Group, Inc.	–0.35
Prologis, Inc.	0.46	DDR Corp.	–0.36
Equity LifeStyle Properties, Inc.	0.41	Physicians Realty Trust	–0.36
Camden Property Trust	0.36	Macerich Company	–0.48
Essex Property Trust, Inc.	0.35	Welltower, Inc.	–0.78

Current outlook

• REITs should experience continued improvement in operating fundamentals and are expected to deliver high single dividends and 5% to 7% cash flow growth in the next 12 months.

• The level of job growth continues to create ample real estate demand to absorb vacancies and continue pricing power in most property types and markets. New supply growth remains well below historical averages of 2% and near historical lows at 1.4% of existing supply. Supply additions for long lease duration properties remain well below long-term averages. Supply additions for shorter lease duration properties like apartments, hotels and self storage are more in line with long-term historical averages. In many apartment and hotel markets, however, supply is anticipated to moderate in the second half of 2018.

• Continued tight commercial real estate lending, combined with increasing construction costs and a tightening construction labor market, should keep supply well below previous periods of economic expansion. Construction costs are expected to rise 5% in 2018 and have been rising at an annual rate above 4% since 2013. New construction starts are down 14% from the post-crisis peak in early 2016.

• REIT aggregate occupancy held firm near a record level of 95% at the end of 2017, above the 15-year historical average of 93.6%.³ Same-store Net Operating Income (NOI) grew approximately 3.6% in 2017, above the long-term historical average of 2.8%. PGIM Real Estate would estimate a deceleration in same-store NOI to between 3.00% and 3.25%, with much of the increase coming from rent growth offset by increasing operating expenses, particularly property taxes and labor. The impact of tax reform on gross domestic product (GDP) growth may provide some upside to this estimate. Additionally, REITs received pass-through treatment in the new tax law, which lowers the top marginal tax rate on REIT dividends to approximately 29.6% versus bond income and corporate dividends, which will be at 37%. However, this lower rate is not available to Fund shareholders, only to direct REIT shareholders.

Prudential US Real Estate Fund 13

Strategy and Performance Overview (continued)

• Taxable investors should now consider REITs based on their after-tax dividend yield versus other income alternatives. Institutions globally remain below their target real estate allocations by approximately 120 basis points. There is an estimated $249 billion pipeline of capital to be invested in commercial real estate globally⁴. This embedded demand for real estate from institutions should provide support for cap rates to remain stable in a gradually rising interest rate environment and for real estate prices to improve based on cash flow growth.

• Employment centers that focus on technology, healthcare, education and media/entertainment are expected to continue to deliver relatively strong job growth. We should also get more clarity shortly on where Amazon will locate its second headquarters (HQ2). HQ2 may be a game changer for commercial and residential real estate demand for the selected city. Amazon has narrowed the list to 20 finalists, with Washington DC/Northern VA emerging as the favorite among analysts, brokers, and investors.

• With a dividend yield of 4.6% and estimated earnings growth of 5% to 7% in the next 12 months, REITs are poised to deliver a consensus return of approximately 10%, assuming no expansion or contraction in the earnings multiple. However, given continued economic and government policy concerns, volatility spikes remain likely.

³  Citi, as of March 31, 2018

⁴  Hodes Weill & Associates and Cornell University, fifth annual real estate allocation monitor

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Comments on Largest Holdings

4.8% AvalonBay Communities, Inc., Residential REITs

This REIT buys, develops, renovates, and operates multifamily properties in the US. It specializes in upscale properties in high barrier-to-entry markets such as Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. By providing luxury living in high-demand areas where apartment-zoned land is in low supply, AvalonBay can also charge premium rent. The REIT owns about 180 apartment communities with more than 53,000 units. It also has more than 30 properties under construction or redevelopment, and owns rights to develop more than 30 additional ones.

4.7% Simon Property Group, Inc., Retail REITs

This self-administered, self-managed REIT owns, develops, and manages retail real estate properties, including regional malls, outlet centers, community/lifestyle centers, and international properties.

4.7% Welltower, Inc., Healthcare REITs

Welltower Inc. invests in senior housing and healthcare real estate properties. It serves customers in the US.

4.2% Equinix, Inc., Specialized REITs

Equinix invests in interconnected data centers. It focuses on developing network and cloud-neutral data center platforms for cloud and information technology, enterprise, network, and mobile services providers, as well as for financial companies.

3.7% Equity LifeStyle Properties, Inc., Residential REITs

This REIT owns an interest in communities in the US and western Canada. It acquires properties such as camping grounds and seasonal resort communities.

Prudential US Real Estate Fund 15

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 held through the six-month period ended March 31, 2018. 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 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

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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, 2017		Ending  Account Value March 31, 2018		Annualized Expense Ratio Based on the Six-Month Period			Expenses  Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	941.40		1.25	%	$	6.05
	Hypothetical	$	1,000.00	$	1,018.70		1.25	%	$	6.29
Class B	Actual	$	1,000.00	$	937.70		2.00	%	$	9.66
	Hypothetical	$	1,000.00	$	1,014.96		2.00	%	$	10.05
Class C	Actual	$	1,000.00	$	937.60		2.00	%	$	9.66
	Hypothetical	$	1,000.00	$	1,014.96		2.00	%	$	10.05
Class Z	Actual	$	1,000.00	$	942.70		1.00	%	$	4.84
	Hypothetical	$	1,000.00	$	1,019.95		1.00	%	$	5.04
Class Q	Actual	$	1,000.00	$	941.80		1.00	%	$	4.84
	Hypothetical	$	1,000.00	$	1,019.95		1.00	%	$	5.04

* 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, 2018, and divided by the 365 days in the Fund’s fiscal year ended March 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

Prudential US Real Estate Fund 17

Schedule of Investments

as of March 31, 2018

Description	Shares		Value
LONG-TERM INVESTMENTS    99.0%
COMMON STOCKS
Diversified REITs    6.1%
American Assets Trust, Inc.		9,672	$	323,142
Empire State Realty Trust, Inc., (Class A Stock)		20,714		347,788
Forest City Realty Trust, Inc., (Class A Stock)		29,954		606,868
				1,277,798
Health Care REITs    10.8%
Community Healthcare Trust, Inc.		13,917		358,224
MedEquities Realty Trust, Inc.		20,608		216,590
Medical Properties Trust, Inc.		33,615		436,995
Sabra Health Care REIT, Inc.		15,993		282,276
Welltower, Inc.		18,057		982,843
				2,276,928
Hotel & Resort REITs    7.8%
DiamondRock Hospitality Co.		51,823		541,032
MGM Growth Properties LLC, (Class A Stock)		12,671		336,289
Park Hotels & Resorts, Inc.		14,615		394,897
Sunstone Hotel Investors, Inc.		25,027		380,911
				1,653,129
Hotels, Resorts & Cruise Lines    0.8%
Hyatt Hotels Corp., (Class A Stock)		2,128		162,281
Industrial REITs    13.6%
Americold Realty Trust		12,529		239,054
Duke Realty Corp.		27,929		739,560
First Industrial Realty Trust, Inc.		13,405		391,828
Prologis, Inc.		7,291		459,260
Rexford Industrial Realty, Inc.		18,761		540,129
STAG Industrial, Inc.		20,898		499,880
				2,869,711
Office REITs    12.7%
Alexandria Real Estate Equities, Inc.		2,896		361,681
Brandywine Realty Trust		19,817		314,694
Columbia Property Trust, Inc.		5,222		106,842
Highwoods Properties, Inc.		5,879		257,618
Hudson Pacific Properties, Inc.		21,505		699,558
JBG SMITH Properties		11,585		390,530
Kilroy Realty Corp.		5,732		406,743
Piedmont Office Realty Trust, Inc., (Class A Stock)		8,224		144,660
				2,682,326

See Notes to Financial Statements.

Prudential US Real Estate Fund 19

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Residential REITs    22.3%
American Campus Communities, Inc.		5,835	$	225,348
American Homes 4 Rent, (Class A Stock)		22,296		447,704
AvalonBay Communities, Inc.		6,158		1,012,744
Camden Property Trust		7,220		607,779
Education Realty Trust, Inc.		11,972		392,083
Equity LifeStyle Properties, Inc.		8,882		779,573
Equity Residential		11,303		696,491
Invitation Homes, Inc.		10,760		245,651
Mid-America Apartment Communities, Inc.		3,242		295,800
				4,703,173
Retail REITs    10.0%
Federal Realty Investment Trust		3,197		371,204
Macerich Co. (The)		7,226		404,800
Realty Income Corp.		2,651		137,136
Regency Centers Corp.		3,271		192,924
Simon Property Group, Inc.		6,469		998,490
				2,104,554
Specialized REITs    14.9%
CoreSite Realty Corp.		3,079		308,701
Crown Castle International Corp.		1,379		151,152
CubeSmart		3,965		111,813
Digital Realty Trust, Inc.		5,260		554,299
Equinix, Inc.		2,128		889,802
Extra Space Storage, Inc.		3,177		277,543
Four Corners Property Trust, Inc.		21,215		489,854
Public Storage		1,821		364,910
				3,148,074
TOTAL LONG-TERM INVESTMENTS (cost $19,571,518)				20,877,974
SHORT-TERM INVESTMENT    1.9%
AFFILIATED MUTUAL FUND
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund (cost $390,119)(w)		390,119		390,119
TOTAL INVESTMENTS    100.9% (cost $19,961,637)				21,268,093
Liabilities in excess of other assets    (0.9)%				(180,014	)
NET ASSETS    100.0%			$	21,088,079

See Notes to Financial Statements.

20

The following abbreviations are used in the annual report:

LIBOR—London Interbank Offered Rate

REIT(s)—Real Estate Investment Trust(s)

(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund.

Fair Value Measurements:

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—unadjusted 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, 2018 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Diversified REITs	$	1,277,798	$	—	$	—
Health Care REITs		2,276,928		—		—
Hotel & Resort REITs		1,653,129		—		—
Hotels, Resorts & Cruise Lines		162,281		—		—
Industrial REITs		2,869,711		—		—
Office REITs		2,682,326		—		—
Residential REITs		4,703,173		—		—
Retail REITs		2,104,554		—		—
Specialized REITs		3,148,074		—		—
Affiliated Mutual Fund		390,119		—		—
Total	$	21,268,093	$	—	$	—

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

See Notes to Financial Statements.

Prudential US Real Estate Fund 21

Schedule of Investments (continued)

as of March 31, 2018

Industry Classification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of March 31, 2018 were as follows (unaudited):

Residential REITs	22.3	%
Specialized REITs	14.9
Industrial REITs	13.6
Office REITs	12.7
Health Care REITs	10.8
Retail REITs	10.0
Hotel & Resort REITs	7.8
Diversified REITs	6.1
Affiliated Mutual Fund	1.9	%
Hotels, Resorts & Cruise Lines	0.8
	100.9
Liabilities in excess of other assets	(0.9	)
	100.0	%

See Notes to Financial Statements.

22

This Page Intentionally Left Blank

Statement of Assets & Liabilities

as of March 31, 2018

Assets
Investments at value:
Unaffiliated investments (cost $19,571,518)	$	20,877,974
Affiliated investments (cost $390,119)		390,119
Cash		8,373
Receivable for investments sold		206,572
Dividends receivable		84,093
Due from Manager		11,178
Receivable for Fund shares sold		2,078
Prepaid expenses		373
Tax reclaim receivable		177
Total assets		21,580,937
Liabilities
Payable for investments purchased		453,303
Accrued expenses and other liabilities		18,000
Custodian and accounting fees payable		15,208
Payable for Fund shares reacquired		2,364
Distribution fee payable		2,277
Affiliated transfer agent fee payable		1,706
Total liabilities		492,858
Net Assets	$	21,088,079
Net assets were comprised of:
Shares of beneficial interest, at par	$	1,910
Paid-in capital in excess of par		20,217,644
		20,219,554
Undistributed net investment income		93,559
Accumulated net realized loss on investment and foreign currency transactions		(531,495	)
Net unrealized appreciation on investments and foreign currencies		1,306,461
Net assets, March 31, 2018	$	21,088,079

See Notes to Financial Statements.

24

Class A
Net asset value and redemption price per share, ($3,938,495 ÷ 356,490 shares of beneficial interest issued and outstanding)	$	11.05
Maximum sales charge (5.50% of offering price)		0.64
Maximum offering price to public	$	11.69
Class B
Net asset value, offering price and redemption price per share, ($768,431 ÷ 70,941 shares of beneficial interest issued and outstanding)	$	10.83
Class C
Net asset value, offering price and redemption price per share, ($949,228 ÷ 87,812 shares of beneficial interest issued and outstanding)	$	10.81
Class Z
Net asset value, offering price and redemption price per share, ($15,422,254 ÷ 1,393,650 shares of beneficial interest issued and outstanding)	$	11.07
Class Q
Net asset value, offering price and redemption price per share, ($9,671 ÷ 874 shares of beneficial interest issued and outstanding)	$	11.06

See Notes to Financial Statements.

Prudential US Real Estate Fund 25

Statement of Operations

Year Ended March 31, 2018

Net Investment Income (Loss)
Income
Unaffiliated dividend income (net of foreign withholding taxes of $146)	$	634,563
Affiliated dividend income		2,822
Total income		637,385
Expenses
Management fee		173,733
Distribution fee(a)		36,171
Registration fees(a)		84,891
Custodian and accounting fees		59,723
Shareholders’ reports		26,919
Audit fee		24,616
Legal fees and expenses		22,269
Transfer agent’s fees and expenses (including affiliated expense of $11,666)(a)		21,679
Trustees’ fees		10,940
Miscellaneous		15,033
Total expenses		475,974
Less: Fee waiver and/or expense reimbursement(a)		(208,158	)
Distribution fee waiver(a)		(2,233	)
Net expenses		265,583
Net investment income (loss)		371,802
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions		122,984
Foreign currency transactions		38
		123,022
Net change in unrealized appreciation (depreciation) on:
Investments		(927,644	)
Foreign currencies		5
		(927,639	)
Net gain (loss) on investment and foreign currency transactions		(804,617	)
Net Increase (Decrease) In Net Assets Resulting From Operations	$	(432,815	)

(a) Class specific expenses and waivers were as follows (see Note 1):

	Class A			Class B			Class C			Class Z			Class Q
Distribution fee		13,476			9,755			12,940			—			—
Transfer agent’s fees and expenses		6,368			1,395			1,651			12,257			8
Registration fees		15,407			6,131			6,993			46,622			9,738
Fee waiver and/or expense reimbursement		(41,403	)		(11,756	)		(14,222	)		(130,993	)		(9,784	)
Distribution fee waiver		(2,233	)		—			—			—			—

See Notes to Financial Statements.

26

Statements of Changes in Net Assets

	Year Ended March 31,
	2018			2017
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	371,802		$	152,232
Net realized gain (loss) on investment and foreign currency transactions		123,022			4,878,391
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(927,639	)		(4,182,478	)
Net increase (decrease) in net assets resulting from operations		(432,815	)		848,145
Dividends and Distributions
Dividends from net investment income
Class A		(49,977	)		(110,959	)
Class B		(5,635	)		(16,856	)
Class C		(7,078	)		(22,161	)
Class Z		(215,378	)		(560,715	)
Class Q		(133	)		—
		(278,201	)		(710,691	)
Distributions from net realized gains
Class A		(210,157	)		(651,917	)
Class B		(45,310	)		(145,776	)
Class C		(55,167	)		(200,183	)
Class Z		(794,247	)		(2,153,241	)
Class Q		(493	)		—
		(1,105,374	)		(3,151,117	)
Fund share transactions (Net of share conversions)
Net proceeds from shares sold		640,396			6,896,382
Net asset value of shares issued in reinvestment of dividends and distributions		1,378,664			3,832,323
Cost of shares reacquired		(3,001,058	)		(27,548,452	)
Net increase (decrease) in net assets from share transactions		(981,998	)		(16,819,747	)
Total increase (decrease)		(2,798,388	)		(19,833,410	)
Net Assets:
Beginning of year		23,886,467			43,719,877
End of year(a)	$	21,088,079		$	23,886,467
(a) Includes undistributed net investment income of:	$	93,559		$	—

See Notes to Financial Statements.

Prudential US Real Estate Fund 27

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on October 24, 1997. The Trust currently consists of the following five series: Prudential QMA Large-Cap Core Equity PLUS Fund, Prudential QMA Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund, each of which are diversified funds and Prudential Global Real Estate Fund and Prudential US Real Estate Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the Prudential US Real Estate Fund (the “Fund”).

The investment objective of the Fund is capital appreciation and income.

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 and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may

28

occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are 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.

Foreign equities traded on foreign securities exchanges are generally 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. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies 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.

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

Prudential US Real Estate Fund 29

Notes to Financial Statements (continued)

reliable by the Manager 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 unaffiliated mutual funds to calculate their net asset values.

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Trustees of the Trust. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.

30

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (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 (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.

Equity and Mortgage Real Estate Investment Trusts (REITs): The Fund invests in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the equity REITs.

Concentration of Risk for REITs: Real estate securities are subject to similar risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of default or of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. The value of these securities will rise and fall in response to many factors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management of the underlying properties.

In addition, investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (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.

Prudential US Real Estate Fund 31

Notes to Financial Statements (continued)

Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, and effective January 1, 2018, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements. Prior to January 1, 2018 transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements were not designated as class specific expenses and were 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.

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, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects to pay dividends from net investment income quarterly. Distributions from net realized capital and currency gains, if any, are declared and paid 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-date. Permanent book/tax differences relating to income and gain(loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

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

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Fund’s custodian (the Custodian), and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the

32

management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

PGIM Investments has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its PGIM Real Estate unit. The subadvisory agreement provides that PGIM Real Estate will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PGIM Real Estate is obligated to keep certain books and records of the Fund. PGIM Investments pays for the services of PGIM Real Estate, 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 PGIM Investments is accrued daily and payable monthly at an annual rate 0.75% of the Fund’s average daily net assets up to and including $1 billion, 0.73% on the next $2 billion of average daily net assets, 0.71% on the next $2 billion of average daily net assets, 0.70% on the next $5 billion of average daily net assets and 0.69% on the average daily net assets in excess of $10 billion. The effective management fee rate, before any waivers and/or expense reimbursements was 0.75% for the year ended March 31, 2018.

PGIM Investments has contractually agreed through July 31, 2018 to limit the net annual operating expenses (exclusive of distribution and service (12b-1) fees, taxes (such as income and foreign withholdings taxes, stamp duty and deferred tax expenses), interest, acquired fund fees and expenses, brokerage, extraordinary and certain other expenses such as dividend, broker charges and interest expense on short sales) of each class of shares of the Fund to 1.00% of the Fund’s average daily net assets. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The management fee waiver and/or expense reimbursement exceeded the management fee for the year ended March 31, 2018.

The Trust, on behalf of 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 Z and Class Q shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B and Class C shares, pursuant to the 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 of the Class Z or Class Q shares of the Fund.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1% and 1% of the average daily net assets of the Class A, Class B and Class C shares, respectively. PIMS has contractually agreed through July 31, 2018 to limit such fees to 0.25% of the average daily net assets of the Class A shares.

PIMS has advised the Fund that it has received $12,115 in front-end sales charges resulting from sales of Class A shares during the year ended March 31, 2018. From these

Prudential US Real Estate Fund 33

Notes to Financial Statements (continued)

fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to sales persons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended March 31, 2018, it received $811 and $49 in contingent deferred sales charges imposed upon redemptions by certain Class B and Class C shareholders, respectively.

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

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliated of PGIM Investments 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 may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended March 31, 2018 no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the Prudential Core Ultra Short Bond Fund (the “Core Fund”), a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended March 31, 2018, were $21,040,770 and $22,688,530, respectively.

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-date. In order to present undistributed net investment income,

34

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 undistributed net investment income and accumulated net realized loss on investment and foreign currency transactions. For the year ended March 31, 2018, the adjustments were to decrease undistributed net investment income and decrease accumulated net realized loss on investment and foreign currency transactions by $42, due to differences in the treatment for book and tax purposes of certain transactions involving foreign securities and currencies and reclassification of dividends. Net investment income, net realized gain (loss) on investment and foreign currency transactions and net assets were not affected by this change.

For the year ended March 31, 2018, the tax character of dividends paid by the Fund were $282,994 from ordinary income and $1,100,581 from long-term capital gains. For the year ended March 31, 2017, the tax character of dividends paid by the Fund were $1,571,120 from ordinary income and $2,290,688 from long-term capital gains.

As of March 31, 2018, the accumulated undistributed earnings on a tax basis was $93,559 of ordinary income.

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of March 31, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$20,281,204	$2,137,319	$(1,150,430)	$986,889

The differences between book basis and tax basis were primarily attributable to deferred losses on wash sales.

The Fund elected to treat post-October capital losses of approximately $212,000 as having been incurred in the following fiscal year (March 31, 2019).

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.

6. Capital and Ownership

The Fund offers Class A, Class B, Class C, Class Z and Class Q shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial

Prudential US Real Estate Fund 35

Notes to Financial Statements (continued)

sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. 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 B shares will 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 sales made within 12 months of purchase. Class Z and Class Q 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 $0.001 par value per share.

As of March 31, 2018, Prudential, through its affiliate entities, owned 1,342,788 Class Z shares and 874 shares of Class Q shares of the Fund. At reporting period end, two shareholders of record held 77% of the Fund’s outstanding shares on behalf of multiple beneficial owners, of which 70% were held by an affiliate of Prudential.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended March 31, 2018:
Shares sold		31,313		$	377,933
Shares issued in reinvestment of dividends and distributions		21,380			257,483
Shares reacquired		(100,575	)		(1,218,634	)
Net increase (decrease) in shares outstanding before conversion		(47,882	)		(583,218	)
Shares issued upon conversion from other share class(es)		1,086			12,656
Shares reacquired upon conversion into other share class(es)		(1,756	)		(20,301	)
Net increase (decrease) in shares outstanding		(48,552	)	$	(590,863	)
Year ended March 31, 2017:
Shares sold		240,777		$	3,125,192
Shares issued in reinvestment of dividends and distributions		60,264			740,909
Shares reacquired		(231,518	)		(2,981,968	)
Net increase (decrease) in shares outstanding before conversion		69,523			884,133
Shares issued upon conversion from other share class(es)		9,235			120,751
Shares reacquired upon conversion into other share class(es)		(39,225	)		(478,117	)
Net increase (decrease) in shares outstanding		39,533		$	526,767

36

Class B	Shares			Amount
Year ended March 31, 2018:
Shares sold		854		$	10,394
Shares issued in reinvestment of dividends and distributions		4,216			49,811
Shares reacquired		(25,271	)		(298,628	)
Net increase (decrease) in shares outstanding before conversion		(20,201	)		(238,423	)
Shares reacquired upon conversion into other share class(es)		(1,106	)		(12,656	)
Net increase (decrease) in shares outstanding		(21,307	)	$	(251,079	)
Year ended March 31, 2017:
Shares sold		13,597		$	185,880
Shares issued in reinvestment of dividends and distributions		13,185			159,841
Shares reacquired		(24,618	)		(311,930	)
Net increase (decrease) in shares outstanding before conversion		2,164			33,791
Shares reacquired upon conversion into other share class(es)		(4,312	)		(55,371	)
Net increase (decrease) in shares outstanding		(2,148	)	$	(21,580	)
Class C
Year ended March 31, 2018:
Shares sold		6,558		$	78,894
Shares issued in reinvestment of dividends and distributions		5,236			61,754
Shares reacquired		(51,214	)		(608,394	)
Net increase (decrease) in shares outstanding before conversion		(39,420	)		(467,746	)
Shares reacquired upon conversion into other share class(es)		(3,122	)		(38,594	)
Net increase (decrease) in shares outstanding		(42,542	)	$	(506,340	)
Year ended March 31, 2017:
Shares sold		45,835		$	611,002
Shares issued in reinvestment of dividends and distributions		18,301			220,410
Shares reacquired		(39,224	)		(484,354	)
Net increase (decrease) in shares outstanding before conversion		24,912			347,058
Shares reacquired upon conversion into other share class(es)		(5,061	)		(65,380	)
Net increase (decrease) in shares outstanding		19,851		$	281,678
Class Z
Year ended March 31, 2018:
Shares sold		13,610		$	163,175
Shares issued in reinvestment of dividends and distributions		83,673			1,008,990
Shares reacquired		(73,051	)		(875,402	)
Net increase (decrease) in shares outstanding before conversion		24,232			296,763
Shares issued upon conversion from other share class(es)		4,806			58,895
Net increase (decrease) in shares outstanding		29,038		$	355,658
Year ended March 31, 2017:
Shares sold		211,906		$	2,974,308
Shares issued in reinvestment of dividends and distributions		215,187			2,711,163
Shares reacquired		(1,720,388	)		(23,770,200	)
Net increase (decrease) in shares outstanding before conversion		(1,293,295	)		(18,084,729	)
Shares issued upon conversion from other share class(es)		39,195			478,117
Net increase (decrease) in shares outstanding		(1,254,100	)	$	(17,606,612	)

Prudential US Real Estate Fund 37

Notes to Financial Statements (continued)

Class Q	Shares		Amount
Period ended March 31, 2018*:
Shares sold		822	$	10,000
Shares issued in reinvestment of dividends and distributions		52		626
Net increase (decrease) in shares outstanding		874	$	10,626

* Commencement of offering was May 25, 2017.

7. Borrowings

The Trust, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the year ended March 31, 2018.

38

Financial Highlights

Class A Shares
	Year Ended March 31,
	2018			2017			2016			2015			2014
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$12.01			$13.71			$14.80			$12.78			$12.86
Income (loss) from investment operations:
Net investment income (loss)		0.18			0.06			0.21			0.15			0.10
Net realized and unrealized gain (loss) on investments		(0.41	)		0.07			(0.11	)		2.74			0.39
Total from investment operations		(0.23	)		0.13			0.10			2.89			0.49
Less Dividends and Distributions:
Dividends from net investment income		(0.13	)		(0.27	)		(0.14	)		(0.13	)		(0.10	)
Distributions from net realized gains		(0.60	)		(1.56	)		(1.05	)		(0.74	)		(0.47	)
Total dividends and distributions		(0.73	)		(1.83	)		(1.19	)		(0.87	)		(0.57	)
Net asset value, end of year		$11.05			$12.01			$13.71			$14.80			$12.78
Total Return(a):		(2.36)%			1.01%			1.28%			23.06%			4.20%
Ratios/Supplemental Data:
Net assets, end of year (000)		$3,938			$4,863			$5,013			$6,502			$3,080
Average net assets (000)		$4,492			$5,555			$4,850			$4,728			$2,687
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		1.25%			1.34%			1.61%	(d)		1.60%			1.60%
Expense before waivers and/or expense reimbursement		2.22%			1.92%			1.73%	(d)		1.85%			2.05%
Net investment income (loss)		1.49%			0.43%			1.53%			1.06%			0.79%
Portfolio turnover rate		92%			122%			156%			98%			66%

(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 year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

(d) Includes 0.01% of loan interest expense.

See Notes to Financial Statements.

Prudential US Real Estate Fund 39

Financial Highlights (continued)

Class B Shares
	Year Ended March 31,
	2018			2017			2016			2015			2014
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$11.81			$13.51			$14.62			$12.67			$12.78
Income (loss) from investment operations:
Net investment income (loss)		0.08			(0.04	)		0.11			0.05			0.03
Net realized and unrealized gain (loss) on investments		(0.39	)		0.07			(0.11	)		2.69			0.37
Total from investment operations		(0.31	)		0.03			-			2.74			0.40
Less Dividends and Distributions:
Dividends from net investment income		(0.07	)		(0.17	)		(0.06	)		(0.05	)		(0.04	)
Distributions from net realized gains		(0.60	)		(1.56	)		(1.05	)		(0.74	)		(0.47	)
Total dividends and distributions		(0.67	)		(1.73	)		(1.11	)		(0.79	)		(0.51	)
Net asset value, end of year		$10.83			$11.81			$13.51			$14.62			$12.67
Total Return(a):		(3.11)%			0.26%			0.52%			22.05%			3.53%
Ratios/Supplemental Data:
Net assets, end of year (000)		$768			$1,089			$1,276			$1,814			$1,067
Average net assets (000)		$975			$1,240			$1,443			$1,480			$1,244
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		2.00%			2.09%			2.36%	(d)		2.35%			2.35%
Expense before waivers and/or expense reimbursement		3.21%			2.61%			2.43%	(d)		2.55%			2.73%
Net investment income (loss)		0.72%			(0.35)%			0.80%			0.35%			0.21%
Portfolio turnover rate		92%			122%			156%			98%			66%

(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 year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

(d) Includes 0.01% of loan interest expense.

See Notes to Financial Statements.

40

Class C Shares
	Year Ended March 31,
	2018			2017			2016			2015			2014
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$11.79			$13.49			$14.60			$12.65			$12.76
Income (loss) from investment operations:
Net investment income (loss)		0.08			(0.05	)		0.11			0.04			0.02
Net realized and unrealized gain (loss) on investments		(0.39	)		0.08			(0.11	)		2.70			0.38
Total from investment operations		(0.31	)		0.03			-			2.74			0.40
Less Dividends and Distributions:
Dividends from net investment income		(0.07	)		(0.17	)		(0.06	)		(0.05	)		(0.04	)
Distributions from net realized gains		(0.60	)		(1.56	)		(1.05	)		(0.74	)		(0.47	)
Total dividends and distributions		(0.67	)		(1.73	)		(1.11	)		(0.79	)		(0.51	)
Net asset value, end of year		$10.81			$11.79			$13.49			$14.60			$12.65
Total Return(a):		(3.11)%			0.26%			0.53%			22.09%			3.54%
Ratios/Supplemental Data:
Net assets, end of year (000)		$949			$1,536			$1,491			$1,769			$854
Average net assets (000)		$1,294			$1,669			$1,543			$1,244			$824
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		2.00%			2.08%			2.36%	(d)		2.35%			2.35%
Expense before waivers and/or expense reimbursement		3.10%			2.62%			2.43%	(d)		2.55%			2.75%
Net investment income (loss)		0.69%			(0.39)%			0.80%			0.31%			0.12%
Portfolio turnover rate		92%			122%			156%			98%			66%

(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 year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

(d) Includes 0.01% of loan interest expense.

See Notes to Financial Statements.

Prudential US Real Estate Fund 41

Financial Highlights (continued)

Class Z Shares
	Year Ended March 31,
	2018			2017			2016			2015			2014
Per Share Operating Performance(b):
Net Asset Value, Beginning of Year		$12.02			$13.72			$14.80			$12.79			$12.86
Income (loss) from investment operations:
Net investment income (loss)		0.21			0.08			0.26			0.19			0.14
Net realized and unrealized gain (loss) on investments		(0.40	)		0.09			(0.12	)		2.72			0.39
Total from investment operations		(0.19	)		0.17			0.14			2.91			0.53
Less Dividends and Distributions:
Dividends from net investment income		(0.16	)		(0.31	)		(0.17	)		(0.16	)		(0.13	)
Distributions from net realized gains		(0.60	)		(1.56	)		(1.05	)		(0.74	)		(0.47	)
Total dividends and distributions		(0.76	)		(1.87	)		(1.22	)		(0.90	)		(0.60	)
Net asset value, end of year		$11.07			$12.02			$13.72			$14.80			$12.79
Total Return(a):		(2.09)%			1.26%			1.56%			23.27%			4.55%
Ratios/Supplemental Data:
Net assets, end of year (000)		$15,422			$16,397			$35,941			$35,218			$28,037
Average net assets (000)		$16,394			$22,153			$36,976			$29,979			$21,876
Ratios to average net assets(c):
Expense after waivers and/or expense reimbursement		1.00%			1.13%			1.36%	(d)		1.35%			1.35%
Expense before waivers and/or expense reimbursement		1.80%			1.56%			1.43%	(d)		1.55%			1.74%
Net investment income (loss)		1.76%			0.63%			1.90%			1.34%			1.08%
Portfolio turnover rate		92%			122%			156%			98%			66%

(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, if any. Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

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

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

(d) Includes 0.01% of loan interest expense.

See Notes to Financial Statements.

42

Class Q Shares
	May 25, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$12.16
Income (loss) from investment operations:
Net investment income (loss)		0.20
Net realized and unrealized gain (loss) on investments		(0.54	)
Total from investment operations		(0.34	)
Less Dividends and Distributions:
Dividends from net investment income		(0.16	)
Distributions from net realized gains		(0.60	)
Total dividends and distributions		(0.76	)
Net asset value, end of period		$11.06
Total Return(c):		(3.31)%
Ratios/Supplemental Data:
Net assets, end of period (000)		$10
Average net assets (000)		$10
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement		1.00%	(e)
Expenses before waivers and/or expense reimbursement		115.13%	(e)
Net investment income (loss)		1.93%	(e)
Portfolio turnover rate		92%	(f)

(a) Commencement of offering.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

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

(e) Annualized.

(f) Not annualized.

See Notes to Financial Statements.

Prudential US Real Estate Fund 43

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Prudential US Real Estate Fund (the “Fund”), a series of Prudential Investment Portfolios 12, including the schedule of investments, as of March 31, 2018, 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 related notes (collectively, the “financial statements”) and the financial highlights for each of the years or periods in the five-year period then ended. 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, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2018, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Prudential Retail investment companies since 2003.

New York, New York

May 15, 2018

44

Federal Income Tax Information (unaudited)

We are advising you that during the fiscal year ended March 31, 2018, the Fund reported the maximum amount allowed per share but not less than $0.59 per share for Class A, B, C, Q and Z shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.

In January 2019, 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 2018.

Prudential US Real Estate 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
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 90	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (65) Board Member Portfolios Overseen: 90	Retired; Managing Director (April 2008-May 2015) 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).	Since July 2008
Linda W. Bynoe (65) Board Member Portfolios Overseen: 90	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 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).	Since March 2005

Prudential US Real Estate Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 90	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.	Since September 2013

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Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).	Since September 2017
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 90	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.	Since July 2008
Richard A. Redeker (74) Board Member Portfolios Overseen: 90	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

Prudential US Real Estate Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 89	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 90	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (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.	Since July 2003

 ±Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

# Mr. Reid joined the Board effective as of March 1, 2018.

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Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 90	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen:90	Executive Vice President (since June 2009) of PGIM 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, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010

Prudential US Real Estate Fund

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Grace C. Torres* (58) Board Member Portfolios Overseen: 89	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential 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 PGIM 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.	Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM 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.

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 (62) 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 PGIM 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 June 2012

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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
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential 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 September 2014
Dino Capasso (43) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Deborah A. Docs (60) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since May 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM 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 May 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Andrew R. French (55) 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 PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since October 2006

Prudential US Real Estate Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
M. Sadiq Peshimam (54) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since February 2006
Peter Parrella (59) 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 June 2007
Lana Lomuti (50) 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 April 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 2015

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

Explanatory Notes to Tables:

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

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ 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 PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, 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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∎ MAIL	∎ TELEPHONE	∎ WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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	PGIM Investments LLC	655 Broad Street Newark, NJ 07102
INVESTMENT SUBADVISER	PGIM Real Estate	7 Giralda Farms Madison, NJ 07940
DISTRIBUTOR	Prudential Investment Management Services LLC	655 Broad Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, 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 no sooner than 15 days after the end of the 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	Q
NASDAQ	PJEAX	PJEBX	PJECX	PJEZX	PJEQX
CUSIP	744336603	744336702	744336801	744336884	744336751

MF209E    

PRUDENTIAL QMA LONG-SHORT EQUITY FUND

ANNUAL REPORT

MARCH 31, 2018

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Objective: Long-term capital appreciation

Highlights

PRUDENTIAL QMA LONG-SHORT EQUITY FUND

• The Fund achieved solid positive returns using a bottom-up stock selection strategy that has a 20-80% net market exposure range. Net exposure is the percentage difference between a fund’s long and short exposure. The Fund bought stocks with sound earnings potential, high quality, and better valuation than industry peers. Subsequently, the Fund shorted stocks with the opposite characteristics.

• Over the reporting period, taking long and short positions in stocks based on growth and quality helped performance the most. Stocks that were good quality and had improving growth prospect outperformed those that had poor quality and deteriorating growth.

• The Fund’s short positions underperformed its long positions, which was a benefit because the Fund focuses on capturing the spread return between its long and short positions. Since longs outperformed shorts, the spread return was positive.

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 and member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company. ^© 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on June 11, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

- Not part of the Annual Report -

Prudential QMA Long-Short Equity Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

- Not part of the Annual Report -

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

- Not part of the Annual Report -

Prudential QMA Long-Short Equity Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	9
Strategy and Performance Overview	12
Fees and Expenses	15
Holdings and Financial Statements	17

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Letter from the President

Dear Shareholder:

We hope you find the annual report for Prudential QMA Long-Short Equity Fund informative and useful. The report covers performance for the 12-month period ended March 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds will be renamed from Prudential to PGIM Funds. Renaming our funds is part of our ongoing effort to further build our reputation

and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name is changing. Your Fund’s management and operation, along with the Fund’s symbols, will remain the same.*

Over the reporting period, global economic growth continued its positive momentum, and central banks gradually tightened monetary policy. The US economy experienced moderate expansion and robust employment levels.

Equity returns were solid, due to healthy earnings expectations and the anticipated impact from tax reform. Global equities, including emerging markets, generally posted strong returns. US equities soared on new regulatory policy and revised corporate tax legislation. However, late in the period volatility arose on jitters over inflation and rising interest rates, tariffs, and a potential trade war.

In bond markets, US Treasury yields rose across both short and longer maturities. European bonds followed and often led during the period. In Japan, the policy stance kept yields considerably lower. US corporate bonds handily outpaced Treasuries. Although most bond market sectors delivered positive returns, a great deal of gains were erased at the end of the period. In March, the Federal Reserve hiked interest rates for the sixth time since 2015, based on confidence in the economy.

Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart Parker, President

Prudential QMA Long-Short Equity Fund

May 15, 2018

*Note: The Prudential Day One Funds will not be changing their names.

Prudential QMA Long-Short Equity Fund 7

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.pgiminvestments.com or by calling (800) 225-1852.

	Average Annual Total Returns as of 3/31/18 (with sales charges)
	One Year (%)		Since Inception (%)
Class A		0.08		5.31 (5/29/14)
Class C		4.08		6.07 (5/29/14)
Class Z		6.11		7.13 (5/29/14)
Class Q		N/A		5.84* (5/25/17)
S&P 500 Index
		13.98		10.88
Customized Blend Index
		7.44		5.65
Lipper Alternative Long/Short Equity Funds Average
		5.92		3.82
	Average Annual Total Returns as of 3/31/18 (without sales charges)
	One Year  (%)		Since  Inception (%)
Class A		5.90		6.87 (5/29/14)
Class C		5.08		6.07 (5/29/14)
Class Z		6.11		7.13 (5/29/14)
Class Q		N/A		5.84* (5/25/17)
S&P 500 Index
		13.98		10.88
Customized Blend Index
		7.44		5.65
Lipper Alternative Long/Short Equity Funds Average
		5.92		3.82

*Not annualized

Source: PGIM Investments LLC and Lipper Inc.

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the class’ inception date.

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Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential QMA Long-Short Equity Fund (Class Z 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 Z shares (May 29, 2014) and the account values at the end of the current fiscal year (March 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class C and Class Q 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 reimbursement, if any, the Fund’s 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.

Prudential QMA Long-Short Equity Fund 9

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*	Class Q**
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 net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	1.00% on sales made within 12 months of purchase	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.30% (0.25% currently)	1.00%	None	None

*Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” in the front of this report for more information.

**Class Q shares will be renamed as Class R6 shares effective on June 11, 2018. Please see the “PRUDENTIAL FUNDS UPDATE” on page 3 of this report for more information.

Benchmark Definitions

Customized Blend Index—The Customized Blend Index (the Index) is a model portfolio consisting of the S&P 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.

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.

Lipper Alternative Long/Short Equity Funds Average—The Lipper Alternative Long/Short Equity Funds Average (Lipper Average) is based on an average return of all funds in the Lipper Alternative Long/Short Equity Funds universe for the periods noted. Funds in the Lipper Alternative Long/Short Equity Funds universe 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 or average. 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 of a mutual fund, but not sales charges or taxes.

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Presentation of Fund Holdings

Five Largest Holdings—Long Positions*
expressed as a percentage of net assets
as of 3/31/18 (%)

Facebook, Inc., Internet Software & Services	1.9
Alphabet, Inc., Internet Software & Services	1.7
AT&T, Inc., Diversified Telecommunication Services	1.5
Visa, Inc., IT Services	1.5
Adobe Systems, Inc., Software	1.5

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 3/31/18 (%)

Square, Inc., IT Services	(1.3)
Splunk, Inc., Software	(1.1)
Workday, Inc., Software	(1.1)
Parsley Energy, Inc., Oil, Gas & Consumable Fuels	(1.0)
Expedia Group, Inc., Internet & Direct Marketing Retail	(1.0)

Five Largest Industries expressed as a percentage of net assets as of 3/31/18 (%)
Oil, Gas & Consumable Fuels	3.9
Internet Software & Services	3.6
Semiconductors & Semiconductor Equipment	3.6
Health Care Equipment & Supplies	3.3
Health Care Providers & Services	3.2

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

*A long position is defined as buying shares of stock with the expectation of profiting when the share price appreciates.

**A short position is defined as borrowing shares and then selling those shares with the expectation of profiting when the share price depreciates and those shares can be bought back at a cheaper price. Short positions in the Fund are expressed as a negative percentage of net assets.

Prudential QMA Long-Short Equity Fund 11

Strategy and Performance Overview

How did the Fund perform?

The Prudential QMA Long-Short Equity Fund’s Class Z shares returned 6.11% for the 12-month period that ended March 31, 2018, underperforming the 7.44% return of its Customized Blend Index (the Index) and the 13.98% return of the S&P 500 Index. The Fund outperformed the 5.92% return of the Lipper Alternative Long/Short Equity Funds Average.

What were market conditions?

• Equity returns were strong during the reporting period, as global gross domestic production (GDP) advanced at a healthy pace, long-term interest rates remained close to historical lows, and central banks tightened monetary policy prudently and gradually in light of subdued inflation.

• In the US, solid economic fundamentals included stable and moderate economic expansion, robust employment, accelerating corporate profit growth, accumulating cash on company balance sheets, and rising consumer and business confidence. Global equities, including emerging markets, generally posted strong returns.

• Reduced regulatory activity and pressures, as well as revised corporate tax legislation likewise contributed to market performance.

• Market volatility late in the period reflected concerns that inflation expectations would rise and monetary tightening would ensue, and that the likely stimulative effect of tax legislation could be weakened by the negative effect of possible new tariffs and other trade restrictions.

What worked?

• QMA’s quantitative stock selection model evaluates companies based on relative value, growth, and quality criteria. QMA buys stocks of companies that have good value and quality along with solid growth prospects, and it avoids or short companies with the opposite characteristics. During the reporting period, buying stocks with good quality and growth and shorting stocks with poor quality and deteriorating growth was a profitable strategy across most sectors.

• The Fund’s long positions outperformed the market, and its short positions underperformed. This was a benefit because the Fund focuses on capturing the spread return between its long and short positions. Since longs outperformed shorts, there was a positive spread return.

• Risk control through diversification served the Fund well over the reporting period. The Fund holds hundreds of stocks long and short, which limits any one company’s stock having a big negative impact on performance. In addition, the Fund keeps sector and industry allocations similar to the S&P 500 Index, which further reduces risk.

12 Visit our website at pgiminvestments.com

What didn’t work?

• QMA favors stocks that are inexpensive relative to industry peers and shorts expensive stocks. Over the full reporting period, this relative value strategy was not profitable. In general, stocks that were more expensive based on measures like forward price-to-earnings, price-to-book, and price-to-sales ratios lagged those that were more reasonably priced.

• QMA’s stock selection in the Technology sector lagged the S&P 500 Index, driven primarily by short positions in companies that had strong returns. QMA avoided these companies because, despite their prospects for reasonable growth, they were very expensive relative to peers and exhibited poor quality. Those expensive stocks continued to do well through the year; and the Fund held several of them short, which had a negative impact on performance.

• A key benefit of the Fund’s short positions is to hedge equity risk and deliver a smoother return over time. When the market falls, short positions typically generate a positive return, buffering the generally negative return of the long positions. Over the reporting period, the Fund was positioned more defensively, with about 37% net exposure to the market. This held back returns during a period when broad market returns were very strong.

The percentage points shown in the tables identify each security’s positive or negative contribution to the Fund’s return, which is the sum of all contributions by individual holdings.

Top Contributors (%)		Top Detractors (%)
Adobe Systems Incorporated	0.72	Square, Inc. Class A	–1.11
Applied Materials, Inc.	0.54	PayPal Holdings Inc	–0.54
Intuit Inc.	0.46	Workday, Inc. Class A	–0.49
AbbVie, Inc.	0.46	Splunk Inc.	–0.48
NVR, Inc.	0.42	ServiceNow, Inc.	–0.46

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

The Fund held futures contracts on the S&P 500 Index. QMA uses these instruments primarily to manage daily cash flows, provide liquidity, and equitize cash, and not as a means of adding value above the market return. Subsequently, the effect on performance was minimal relative to the broad market.

Current outlook

• QMA’s stock selection strategy is designed to do well in most market conditions. It takes many positions, long and short, in both growth and value stocks across the market capitalization spectrum. This diversification ensures that the Fund is not overexposed to

Prudential QMA Long-Short Equity Fund 13

Strategy and Performance Overview (continued)

any one company—or market segment—but will potentially benefit from exposure to attractive stocks across the market that are expected to perform well. QMA expects this strategy to potentially drive positive results this year.

• QMA expects the volatility we have seen so far in 2018 will continue over the next year, and that its strategy should benefit the Fund. Volatility can produce mispricing that is advantageous to quantitative strategies. In addition, the combination of both long and short positions provides 20% to 80% exposure to the market. In QMA’s view, this means the Fund should fall less than the market when there is downside volatility because it is less than 100% exposed to the market.

14 Visit our website at pgiminvestments.com

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 held through the six-month period ended March 31, 2018. 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 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

Prudential QMA Long-Short Equity Fund 15

Fees and Expenses (continued)

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 QMA Long-Short Equity Fund		Beginning  Account Value October 1, 2017		Ending  Account Value March 31, 2018		Annualized Expense Ratio Based on the Six-Month Period			Expenses  Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,016.20		2.24	%	$	11.26
	Hypothetical	$	1,000.00	$	1,013.76		2.24	%	$	11.25
Class C	Actual	$	1,000.00	$	1,012.40		2.99	%	$	15.00
	Hypothetical	$	1,000.00	$	1,010.02		2.99	%	$	14.98
Class Z	Actual	$	1,000.00	$	1,017.70		1.99	%	$	10.01
	Hypothetical	$	1,000.00	$	1,015.01		1.99	%	$	10.00
Class Q	Actual	$	1,000.00	$	1,017.70		1.98	%	$	9.96
	Hypothetical	$	1,000.00	$	1,015.06		1.98	%	$	9.95

* 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, 2018, and divided by the 365 days in the Fund’s fiscal year ended March 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

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Schedule of Investments

as of March 31, 2018

Description	Shares		Value
LONG-TERM INVESTMENTS    98.7%
COMMON STOCKS
Aerospace & Defense    3.5%
Arconic, Inc.		44,700	$	1,029,888
BWX Technologies, Inc.		7,000		444,710
Curtiss-Wright Corp.		2,200		297,154
Ducommun, Inc.*		3,800		115,444
Harris Corp.		28,900		4,660,992
Huntington Ingalls Industries, Inc.		10,300		2,654,928
Lockheed Martin Corp.		10,900		3,683,437
Moog, Inc., (Class A Stock)*		5,700		469,737
Spirit AeroSystems Holdings, Inc., (Class A Stock)		45,100		3,774,870
Wesco Aircraft Holdings, Inc.*		10,200		104,550
				17,235,710
Airlines    0.5%
Southwest Airlines Co.		47,400		2,715,072
Auto Components    0.6%
Cooper-Standard Holdings, Inc.*		11,100		1,363,191
Lear Corp.		8,100		1,507,329
Tenneco, Inc.		5,800		318,246
				3,188,766
Automobiles    0.1%
Thor Industries, Inc.		5,300		610,401
Banks    2.5%
Bank of America Corp.		233,500		7,002,665
JPMorgan Chase & Co.		46,300		5,091,611
QCR Holdings, Inc.		3,100		139,035
				12,233,311
Beverages    1.2%
National Beverage Corp.		12,400		1,103,848
PepsiCo, Inc.		45,300		4,944,495
				6,048,343
Biotechnology    2.9%
AbbVie, Inc.		56,000		5,300,400
Amgen, Inc.		24,180		4,122,206
Biogen, Inc.*		1,680		460,018
BioSpecifics Technologies Corp.*		4,700		208,398

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 17

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Biotechnology (cont’d.)
Celgene Corp.*		34,000	$	3,033,140
Emergent BioSolutions, Inc.*		8,600		452,790
Enanta Pharmaceuticals, Inc.*		2,200		178,002
Halozyme Therapeutics, Inc.*		35,000		685,650
				14,440,604
Building Products    1.0%
Builders FirstSource, Inc.*		8,100		160,704
Continental Building Products, Inc.*		67,600		1,929,980
NCI Building Systems, Inc.*		76,000		1,345,200
Patrick Industries, Inc.*		15,450		955,582
Universal Forest Products, Inc.		17,100		554,895
				4,946,361
Capital Markets    2.5%
Ameriprise Financial, Inc.		11,500		1,701,310
Evercore, Inc., (Class A Stock)		3,600		313,920
Franklin Resources, Inc.		46,200		1,602,216
LPL Financial Holdings, Inc.		8,800		537,416
Raymond James Financial, Inc.		4,100		366,581
S&P Global, Inc.		27,300		5,215,938
Stifel Financial Corp.		5,900		349,457
TD Ameritrade Holding Corp.		38,600		2,286,278
				12,373,116
Chemicals    1.8%
Chemours Co. (The)		75,700		3,687,347
Huntsman Corp.		32,800		959,400
Ingevity Corp.*		12,200		899,018
Koppers Holdings, Inc.*		20,900		858,990
LyondellBasell Industries NV, (Class A Stock)		6,600		697,488
Trinseo SA		4,300		318,415
Westlake Chemical Corp.		14,900		1,656,135
				9,076,793
Commercial Services & Supplies    0.1%
Quad/Graphics, Inc.		20,000		507,000
Steelcase, Inc., (Class A Stock)		11,600		157,760
				664,760

See Notes to Financial Statements.

18

Description	Shares		Value
COMMON STOCKS (Continued)
Communications Equipment    1.0%
CommScope Holding Co., Inc.*		17,000	$	679,490
F5 Networks, Inc.*		22,400		3,239,264
Plantronics, Inc.		19,500		1,177,215
				5,095,969
Construction & Engineering    0.9%
EMCOR Group, Inc.		21,900		1,706,667
MasTec, Inc.*		61,700		2,902,985
				4,609,652
Consumer Finance    0.9%
Capital One Financial Corp.		23,300		2,232,606
Green Dot Corp., (Class A Stock)*		4,400		282,304
Navient Corp.		106,100		1,392,032
OneMain Holdings, Inc.*		10,800		323,352
Santander Consumer USA Holdings, Inc.		8,400		136,920
				4,367,214
Containers & Packaging    0.6%
Greif, Inc., (Class A Stock)		35,000		1,828,750
Owens-Illinois, Inc.*		59,600		1,290,936
				3,119,686
Distributors    0.3%
LKQ Corp.*		43,000		1,631,850
Diversified Consumer Services    0.1%
Grand Canyon Education, Inc.*		5,000		524,600
Diversified Telecommunication Services    2.9%
AT&T, Inc.		209,100		7,454,415
Verizon Communications, Inc.		149,800		7,163,436
				14,617,851
Electric Utilities    1.1%
Exelon Corp.		141,500		5,519,915
Electrical Equipment    0.1%
Atkore International Group, Inc.*		12,000		238,200
Electronic Equipment, Instruments & Components    1.8%
Anixter International, Inc.*		5,300		401,475
Arrow Electronics, Inc.*		14,200		1,093,684

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 19

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Electronic Equipment, Instruments & Components (cont’d.)
CDW Corp.		10,300	$	724,193
Insight Enterprises, Inc.*		3,800		132,734
IPG Photonics Corp.*		10,000		2,333,800
Itron, Inc.*		41,500		2,969,325
PC Connection, Inc.		7,700		192,500
SYNNEX Corp.		10,600		1,255,040
				9,102,751
Energy Equipment & Services    0.0%
Archrock, Inc.		23,400		204,750
Equity Real Estate Investment Trusts (REITs)    2.6%
Brixmor Property Group, Inc.		78,000		1,189,500
Chesapeake Lodging Trust		13,100		364,311
CoreCivic, Inc.		10,900		212,768
DDR Corp.		22,800		167,124
DiamondRock Hospitality Co.		25,600		267,264
Franklin Street Properties Corp.		68,400		575,244
GEO Group, Inc. (The)		106,200		2,173,914
Hospitality Properties Trust		74,000		1,875,160
InfraREIT, Inc.		9,000		174,870
Ryman Hospitality Properties, Inc.		4,300		333,035
Spirit Realty Capital, Inc.		189,800		1,472,848
VEREIT, Inc.		254,400		1,770,624
WP Carey, Inc.		13,000		805,870
Xenia Hotels & Resorts, Inc.		68,800		1,356,736
				12,739,268
Food & Staples Retailing    0.8%
Kroger Co. (The)		170,300		4,076,982
Food Products    1.7%
Conagra Brands, Inc.		48,100		1,773,928
J.M. Smucker Co. (The)		14,100		1,748,541
Pilgrim’s Pride Corp.*		11,500		283,015
Tyson Foods, Inc., (Class A Stock)		61,000		4,464,590
				8,270,074
Gas Utilities    0.9%
Atmos Energy Corp.		26,800		2,257,632
UGI Corp.		55,000		2,443,100
				4,700,732

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Health Care Equipment & Supplies    5.6%
Abbott Laboratories		28,200	$	1,689,744
Align Technology, Inc.*		20,800		5,223,504
Baxter International, Inc.		31,200		2,029,248
Danaher Corp.		41,000		4,014,310
DENTSPLY SIRONA, Inc.		53,000		2,666,430
Edwards Lifesciences Corp.*		14,000		1,953,280
Hill-Rom Holdings, Inc.		14,100		1,226,700
IDEXX Laboratories, Inc.*		18,000		3,445,020
Inogen, Inc.*		4,600		565,064
Masimo Corp.*		40,200		3,535,590
STERIS PLC		2,000		186,720
Zimmer Biomet Holdings, Inc.		15,300		1,668,312
				28,203,922
Health Care Providers & Services    3.8%
Anthem, Inc.		7,600		1,669,720
Centene Corp.*		4,100		438,167
Express Scripts Holding Co.*		69,800		4,821,784
Magellan Health, Inc.*		9,700		1,038,870
MEDNAX, Inc.*		8,300		461,729
UnitedHealth Group, Inc.		31,400		6,719,600
WellCare Health Plans, Inc.*		20,400		3,950,052
				19,099,922
Health Care Technology    0.2%
athenahealth, Inc.*		4,700		672,241
Cerner Corp.*		8,000		464,000
				1,136,241
Hotels, Restaurants & Leisure    1.2%
Bloomin’ Brands, Inc.		48,600		1,180,008
Hilton Grand Vacations, Inc.*		16,600		714,132
Hilton Worldwide Holdings, Inc.		23,500		1,850,860
Las Vegas Sands Corp.		19,500		1,402,050
Ruth’s Hospitality Group, Inc.		11,700		286,065
Texas Roadhouse, Inc.		5,700		329,346
				5,762,461
Household Durables    1.0%
La-Z-Boy, Inc.		37,600		1,126,120
NVR, Inc.*		790		2,212,000
Taylor Morrison Home Corp., (Class A Stock)*		62,500		1,455,000
				4,793,120

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 21

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Independent Power & Renewable Electricity Producers    1.2%
AES Corp.		130,600	$	1,484,922
NRG Energy, Inc.		140,700		4,295,571
				5,780,493
Industrial Conglomerates    0.6%
Honeywell International, Inc.		22,300		3,222,573
Insurance    0.6%					��
American Equity Investment Life Holding Co.		24,300		713,448
American International Group, Inc.		8,700		473,454
Hanover Insurance Group, Inc. (The)		3,300		389,037
Old Republic International Corp.		17,800		381,810
Unum Group		18,600		885,546
				2,843,295
Internet & Direct Marketing Retail    0.9%
1-800-Flowers.com, Inc., (Class A Stock)*		52,500		619,500
FTD Cos., Inc.*		9,100		33,124
Groupon, Inc.*		245,900		1,067,206
Liberty Interactive Corp. QVC Group, (Class A Stock)*		36,200		911,154
Liberty TripAdvisor Holdings, Inc., (Class A Stock)*		17,400		187,050
Netflix, Inc.*		2,000		590,700
Nutrisystem, Inc.		38,100		1,026,795
				4,435,529
Internet Software & Services    5.1%
Akamai Technologies, Inc.*		20,100		1,426,698
Alphabet, Inc., (Class A Stock)*		3,300		3,422,562
Alphabet, Inc., (Class C Stock)*(u)		8,362		8,627,828
Blucora, Inc.*		25,200		619,920
Envestnet, Inc.*		7,900		452,670
Etsy, Inc.*		56,300		1,579,778
Facebook, Inc., (Class A Stock)*(u)		58,900		9,411,631
				25,541,087
IT Services    4.4%
Automatic Data Processing, Inc.		18,100		2,053,988
Booz Allen Hamilton Holding Corp.		30,700		1,188,704
CACI International, Inc., (Class A Stock)*		7,700		1,165,395
Cognizant Technology Solutions Corp., (Class A Stock)		66,900		5,385,450
CSG Systems International, Inc.		12,100		548,009
EPAM Systems, Inc.*		1,800		206,136

See Notes to Financial Statements.

22

Description	Shares		Value
COMMON STOCKS (Continued)
IT Services (cont’d.)
ExlService Holdings, Inc.*		6,900	$	384,813
Hackett Group, Inc. (The)		25,100		403,106
Leidos Holdings, Inc.		19,200		1,255,680
MAXIMUS, Inc.		4,500		300,330
Science Applications International Corp.		6,200		488,560
Travelport Worldwide Ltd.		41,500		678,110
Visa, Inc., (Class A Stock)(u)		62,000		7,416,440
Western Union Co. (The)		20,200		388,446
				21,863,167
Leisure Products    0.1%
Vista Outdoor, Inc.*		21,500		350,880
Life Sciences Tools & Services    1.2%
Bruker Corp.		47,300		1,415,216
Illumina, Inc.*		18,700		4,421,054
				5,836,270
Machinery    4.6%
Caterpillar, Inc.		40,200		5,924,676
Crane Co.		8,300		769,742
Cummins, Inc.		32,900		5,332,761
Dover Corp.		16,100		1,581,342
Global Brass & Copper Holdings, Inc.		16,000		535,200
Harsco Corp.*		19,200		396,480
IDEX Corp.		5,100		726,801
Lydall, Inc.*		3,200		154,400
Mueller Industries, Inc.		1,100		28,776
Oshkosh Corp.		48,800		3,770,776
SPX Corp.*		46,200		1,500,576
SPX FLOW, Inc.*		5,600		275,464
Wabash National Corp.		86,100		1,791,741
				22,788,735
Media    0.2%
News Corp., (Class A Stock)		53,400		843,720
Metals & Mining    2.5%
Freeport-McMoRan, Inc.*		301,000		5,288,570
Reliance Steel & Aluminum Co.		5,100		437,274
Southern Copper Corp. (Peru)		55,600		3,012,408
Steel Dynamics, Inc.		68,800		3,042,336
Worthington Industries, Inc.		20,700		888,444
				12,669,032

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 23

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Mortgage Real Estate Investment Trusts (REITs)    0.3%
Chimera Investment Corp.		78,500	$	1,366,685
Ladder Capital Corp.		16,100		242,788
Western Asset Mortgage Capital Corp.		11,000		106,590
				1,716,063
Multi-Utilities    0.7%
CenterPoint Energy, Inc.		15,200		416,480
MDU Resources Group, Inc.		112,600		3,170,816
				3,587,296
Multiline Retail    2.0%
Kohl’s Corp.		69,000		4,520,190
Macy’s, Inc.		180,500		5,368,070
				9,888,260
Oil, Gas & Consumable Fuels    6.6%
Anadarko Petroleum Corp.		91,100		5,503,351
Andeavor		19,200		1,930,752
ConocoPhillips		93,700		5,555,473
Continental Resources, Inc.*		26,500		1,562,175
CVR Energy, Inc.		15,400		465,388
Devon Energy Corp.		136,000		4,323,440
Laredo Petroleum, Inc.*		224,300		1,953,653
Marathon Petroleum Corp.		73,200		5,351,652
Newfield Exploration Co.*		15,000		366,300
Phillips 66		16,900		1,621,048
Pioneer Natural Resources Co.		15,600		2,679,768
Valero Energy Corp.		18,800		1,744,076
				33,057,076
Personal Products    0.0%
Avon Products, Inc. (United Kingdom)*		9,500		26,980
Pharmaceuticals    1.0%
Allergan PLC		400		67,316
Mallinckrodt PLC*		50,500		731,240
Zoetis, Inc.		52,800		4,409,328
				5,207,884
Professional Services    0.7%
Insperity, Inc.		53,500		3,720,925

See Notes to Financial Statements.

24

Description	Shares		Value
COMMON STOCKS (Continued)
Real Estate Management & Development    0.9%
CBRE Group, Inc., (Class A Stock)*		79,000	$	3,730,380
Marcus & Millichap, Inc.*		8,500		306,510
RMR Group, Inc. (The), (Class A Stock)		8,800		615,560
				4,652,450
Road & Rail    0.3%
Norfolk Southern Corp.		5,800		787,524
Old Dominion Freight Line, Inc.		6,000		881,820
				1,669,344
Semiconductors & Semiconductor Equipment    4.8%
Advanced Energy Industries, Inc.*		51,600		3,297,240
Alpha & Omega Semiconductor Ltd.*		15,200		234,840
Amkor Technology, Inc.*		14,100		142,833
Applied Materials, Inc.		75,200		4,181,872
Broadcom Ltd.		17,200		4,053,180
Entegris, Inc.		16,800		584,640
MKS Instruments, Inc.		28,800		3,330,720
NVE Corp.		2,000		166,220
NVIDIA Corp.		29,000		6,716,110
ON Semiconductor Corp.*		34,300		838,978
SMART Global Holdings, Inc.*		4,600		229,264
				23,775,897
Software    7.0%
Activision Blizzard, Inc.		69,200		4,668,232
Adobe Systems, Inc.*(u)		34,100		7,368,328
ANSYS, Inc.*		6,400		1,002,816
CA, Inc.		29,700		1,006,830
Dell Technologies, Inc., (Class V Stock)*		67,200		4,919,712
Fortinet, Inc.*		36,200		1,939,596
Intuit, Inc.		30,100		5,217,835
Microsoft Corp.		3,200		292,064
Oracle Corp.		101,600		4,648,200
Progress Software Corp.		8,200		315,290
PTC, Inc.*		9,800		764,498
Synopsys, Inc.*		34,300		2,855,132
				34,998,533
Specialty Retail    2.9%
Asbury Automotive Group, Inc.*		19,600		1,323,000
AutoNation, Inc.*		9,800		458,444
Burlington Stores, Inc.*		31,800		4,234,170
Dick’s Sporting Goods, Inc.		30,600		1,072,530

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 25

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Specialty Retail (cont’d.)
Gap, Inc. (The)		87,000	$	2,714,400
Genesco, Inc.*		9,400		381,640
Michaels Cos., Inc. (The)*		14,800		291,708
RH*		12,700		1,210,056
Ross Stores, Inc.		34,400		2,682,512
				14,368,460
Technology Hardware, Storage & Peripherals    3.3%
Apple, Inc.		13,000		2,181,140
Hewlett Packard Enterprise Co.		299,900		5,260,246
HP, Inc.		174,800		3,831,616
Western Digital Corp.		57,300		5,287,071
				16,560,073
Textiles, Apparel & Luxury Goods    1.5%
Carter’s, Inc.		9,000		936,900
Lululemon Athletica, Inc.*		38,000		3,386,560
PVH Corp.		7,300		1,105,439
Skechers U.S.A., Inc., (Class A Stock)*		43,200		1,680,048
Wolverine World Wide, Inc.		11,900		343,910
				7,452,857
Thrifts & Mortgage Finance    0.2%
Radian Group, Inc.		39,100		744,464
Trading Companies & Distributors    0.7%
Applied Industrial Technologies, Inc.		21,400		1,560,060
BMC Stock Holdings, Inc.*		9,100		177,905
MSC Industrial Direct Co., Inc., (Class A Stock)		6,700		614,457
Univar, Inc.*		9,400		260,850
Veritiv Corp.*		7,600		297,920
WESCO International, Inc.*		13,200		819,060
				3,730,252
Water Utilities    0.1%
SJW Group		8,300		437,493
Wireless Telecommunication Services    0.1%
Telephone & Data Systems, Inc.		8,700		243,861
United States Cellular Corp.*		4,200		168,798
				412,659
TOTAL LONG-TERM INVESTMENTS (cost $421,800,945)				493,530,144

See Notes to Financial Statements.

26

Description						Shares		Value
SHORT-TERM INVESTMENTS     0.9%
AFFILIATED MUTUAL FUND    0.8%
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund (cost $4,065,366)(w)							4,065,366	$	4,065,366
	Interest Rate			Maturity Date		Principal Amount (000)#
U.S. TREASURY OBLIGATIONS(k)(n)    0.1%
U.S. Treasury Bills		1.510	%		06/14/18		700		697,647
U.S. Treasury Bills		1.567	%		06/14/18		100		99,664
TOTAL U.S. TREASURY OBLIGATIONS (cost $797,539)									797,311
TOTAL SHORT-TERM INVESTMENTS (cost $4,862,905)									4,862,677
TOTAL INVESTMENTS, BEFORE SECURITIES SOLD SHORT    99.6% (cost $426,663,850)									498,392,821
						Shares
SECURITIES SOLD SHORT    (48.5)%
COMMON STOCKS
Aerospace & Defense    (0.4)%
Cubic Corp.							7,000		(445,200	)
Mercury Systems, Inc.*							30,100		(1,454,432	)
									(1,899,632	)
Automobiles    (0.7)%
Tesla, Inc.*							13,600		(3,619,368	)
Banks    (0.6)%
Bank of Hawaii Corp.							2,800		(232,680	)
Community Bank System, Inc.							7,000		(374,920	)
CVB Financial Corp.							27,200		(615,808	)
First Republic Bank							3,200		(296,352	)
Glacier Bancorp, Inc.							6,400		(245,632	)
Prosperity Bancshares, Inc.							8,900		(646,407	)
Texas Capital Bancshares, Inc.*							6,300		(566,370	)
									(2,978,169	)

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 27

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Biotechnology    (3.4)%
Agios Pharmaceuticals, Inc.*		5,100	$	(417,078	)
Amicus Therapeutics, Inc.*		117,100		(1,761,184	)
Arena Pharmaceuticals, Inc.*		17,900		(707,050	)
Array BioPharma, Inc.*		105,100		(1,715,232	)
BioCryst Pharmaceuticals, Inc.*		52,300		(249,471	)
BioMarin Pharmaceutical, Inc.*		12,600		(1,021,482	)
Bluebird Bio, Inc.*		7,100		(1,212,325	)
Clovis Oncology, Inc.*		34,200		(1,805,760	)
Exact Sciences Corp.*		24,600		(992,118	)
Heron Therapeutics, Inc.*		30,100		(830,760	)
Insmed, Inc.*		14,100		(317,532	)
Ironwood Pharmaceuticals, Inc.*		60,500		(933,515	)
Portola Pharmaceuticals, Inc.*		6,200		(202,492	)
Sarepta Therapeutics, Inc.*		41,700		(3,089,553	)
Spark Therapeutics, Inc.*		26,100		(1,737,999	)
				(16,993,551	)
Capital Markets    (0.4)%
FactSet Research Systems, Inc.		7,100		(1,415,882	)
MarketAxess Holdings, Inc.		2,800		(608,832	)
				(2,024,714	)
Chemicals    (1.0)%
Ashland Global Holdings, Inc.		24,800		(1,730,792	)
DowDuPont, Inc.		39,300		(2,503,803	)
Rayonier Advanced Materials, Inc.		9,600		(206,112	)
Sensient Technologies Corp.		7,400		(522,292	)
				(4,962,999	)
Commercial Services & Supplies    (0.9)%
ABM Industries, Inc.		22,300		(746,604	)
Covanta Holding Corp.		31,300		(453,850	)
Healthcare Services Group, Inc.		46,100		(2,004,428	)
Republic Services, Inc.		6,200		(410,626	)
Rollins, Inc.		12,200		(622,566	)
Team, Inc.*		19,400		(266,750	)
				(4,504,824	)
Communications Equipment    (0.8)%
CalAmp Corp.*		9,100		(208,208	)
Finisar Corp.*		83,000		(1,312,230	)
ViaSat, Inc.*		34,400		(2,260,768	)
				(3,781,206	)

See Notes to Financial Statements.

28

Description	Shares		Value
COMMON STOCKS (Continued)
Construction & Engineering    (0.2)%
Dycom Industries, Inc.*		5,800	$	(624,254	)
NV5 Global, Inc.*		6,700		(373,525	)
				(997,779	)
Construction Materials    (0.5)%
Martin Marietta Materials, Inc.		13,100		(2,715,630	)
Containers & Packaging    (0.6)%
Ball Corp.		79,200		(3,145,032	)
Diversified Consumer Services    (0.1)%
Chegg, Inc.*		27,200		(561,952	)
Diversified Financial Services    (0.4)%
Voya Financial, Inc.		36,600		(1,848,300	)
Electric Utilities    (0.3)%
Alliant Energy Corp.		38,300		(1,564,938	)
Electronic Equipment, Instruments & Components    (0.6)%
Fabrinet (Thailand)*		19,400		(608,772	)
II-VI, Inc.*		15,200		(621,680	)
Mesa Laboratories, Inc.		2,400		(356,256	)
Universal Display Corp.		15,600		(1,575,600	)
				(3,162,308	)
Energy Equipment & Services    (1.3)%
Baker Hughes a GE Co.		164,100		(4,557,057	)
Dril-Quip, Inc.*		2,800		(125,440	)
Patterson-UTI Energy, Inc.		110,100		(1,927,851	)
				(6,610,348	)
Equity Real Estate Investment Trusts (REITs)    (3.2)%
Alexandria Real Estate Equities, Inc.		23,800		(2,972,382	)
CoreSite Realty Corp.		7,200		(721,872	)
CyrusOne, Inc.		48,300		(2,473,443	)
Healthcare Realty Trust, Inc.		13,600		(376,856	)
Kilroy Realty Corp.		20,200		(1,433,392	)
National Retail Properties, Inc.		44,300		(1,739,218	)
Public Storage		15,000		(3,005,850	)
Realty Income Corp.		51,100		(2,643,403	)
Retail Opportunity Investments Corp.		29,100		(514,197	)
				(15,880,613	)

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 29

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Food Products    (0.2)%
Pinnacle Foods, Inc.		16,100	$	(871,010	)
Health Care Equipment & Supplies    (2.3)%
AxoGen, Inc.*		12,400		(452,600	)
DexCom, Inc.*		54,900		(4,071,384	)
GenMark Diagnostics, Inc.*		35,600		(193,664	)
ICU Medical, Inc.*		1,100		(277,640	)
iRhythm Technologies, Inc.*		5,400		(339,930	)
Natus Medical, Inc.*		6,000		(201,900	)
Nevro Corp.*		19,200		(1,664,064	)
NuVasive, Inc.*		36,200		(1,890,002	)
Penumbra, Inc.*		9,000		(1,040,850	)
Quidel Corp.*		13,600		(704,616	)
Wright Medical Group NV*		23,200		(460,288	)
				(11,296,938	)
Health Care Providers & Services    (0.6)%
Acadia Healthcare Co., Inc.*		13,800		(540,684	)
BioTelemetry, Inc.*		18,000		(558,900	)
Capital Senior Living Corp.*		19,700		(211,775	)
Cross Country Healthcare, Inc.*		17,900		(198,869	)
Premier, Inc., (Class A Stock)*		10,600		(331,886	)
Tivity Health, Inc.*		25,600		(1,015,040	)
				(2,857,154	)
Health Care Technology    (0.5)%
Evolent Health, Inc., (Class A Stock)*		31,200		(444,600	)
Tabula Rasa HealthCare, Inc.*		4,400		(170,720	)
Teladoc, Inc.*		33,600		(1,354,080	)
Vocera Communications, Inc.*		12,700		(297,434	)
				(2,266,834	)
Hotels, Restaurants & Leisure    (1.5)%
Papa John’s International, Inc.		19,700		(1,128,810	)
Six Flags Entertainment Corp.		39,000		(2,428,140	)
Vail Resorts, Inc.		16,000		(3,547,200	)
Wingstop, Inc.		5,300		(250,319	)
				(7,354,469	)
Household Durables    (0.7)%
Garmin Ltd.		6,800		(400,724	)
Installed Building Products, Inc.*		3,300		(198,165	)
iRobot Corp.*		18,700		(1,200,353	)

See Notes to Financial Statements.

30

Description	Shares		Value
COMMON STOCKS (Continued)
Household Durables (cont’d.)
Leggett & Platt, Inc.		23,700	$	(1,051,332	)
Universal Electronics, Inc.*		8,100		(421,605	)
				(3,272,179	)
Household Products    (0.1)%
WD-40 Co.		3,700		(487,290	)
Independent Power & Renewable Electricity Producers    (0.2)%
Ormat Technologies, Inc.		2,600		(146,588	)
Pattern Energy Group, Inc., (Class A Stock)		42,300		(731,367	)
				(877,955	)
Internet & Direct Marketing Retail    (1.0)%
Expedia Group, Inc.		45,300		(5,001,573	)
Internet Software & Services    (1.5)%
2U, Inc.*		14,500		(1,218,435	)
Alteryx, Inc., (Class A Stock)*		13,700		(467,718	)
Box, Inc., (Class A Stock)*		77,300		(1,588,515	)
Cornerstone OnDemand, Inc.*		6,500		(254,215	)
Coupa Software, Inc.*		8,900		(406,018	)
GoDaddy, Inc., (Class A Stock)*		35,000		(2,149,700	)
GTT Communications, Inc.*		20,400		(1,156,680	)
Instructure, Inc.*		6,300		(265,545	)
Okta, Inc.*		6,100		(243,085	)
				(7,749,911	)
IT Services    (4.1)%
DXC Technology Co.		41,400		(4,161,942	)
Euronet Worldwide, Inc.*		7,000		(552,440	)
Gartner, Inc.*		22,900		(2,693,498	)
PayPal Holdings, Inc.*		47,200		(3,581,064	)
Square, Inc., (Class A Stock)*		135,600		(6,671,520	)
WEX, Inc.*		19,500		(3,054,090	)
				(20,714,554	)
Leisure Products    (0.1)%
Hasbro, Inc.		8,100		(682,830	)
Life Sciences Tools & Services    (0.5)%
Cambrex Corp.*		3,200		(167,360	)
Luminex Corp.		12,300		(259,161	)
PerkinElmer, Inc.		14,200		(1,075,224	)
Syneos Health, Inc.*		32,300		(1,146,650	)
				(2,648,395	)

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 31

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Machinery    (2.5)%
Actuant Corp., (Class A Stock)		32,000	$	(744,000	)
Chart Industries, Inc.*		10,600		(625,718	)
CIRCOR International, Inc.		10,400		(443,664	)
Evoqua Water Technologies Corp.*		10,500		(223,545	)
Flowserve Corp.		73,000		(3,163,090	)
John Bean Technologies Corp.		4,400		(498,960	)
Snap-on, Inc.		5,600		(826,224	)
Sun Hydraulics Corp.		8,300		(444,548	)
Trinity Industries, Inc.		42,100		(1,373,723	)
Wabtec Corp.		52,300		(4,257,220	)
				(12,600,692	)
Media    (0.7)%
EW Scripps Co. (The), (Class A Stock)		12,800		(153,472	)
GCI Liberty, Inc., (Class A Stock)*		40,080		(2,118,629	)
IMAX Corp.*		42,200		(810,240	)
New York Times Co. (The), (Class A Stock)		23,100		(556,710	)
				(3,639,051	)
Metals & Mining    (0.4)%
Allegheny Technologies, Inc.*		17,800		(421,504	)
Coeur Mining, Inc.*		29,500		(236,000	)
Compass Minerals International, Inc.		15,500		(934,650	)
Haynes International, Inc.		6,900		(256,059	)
				(1,848,213	)
Mortgage Real Estate Investment Trusts (REITs)    (0.2)%
Apollo Commercial Real Estate Finance, Inc.		12,100		(217,558	)
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		31,700		(618,150	)
				(835,708	)
Multi-Utilities    (1.4)%
Dominion Energy, Inc.		30,600		(2,063,358	)
Sempra Energy		43,300		(4,815,826	)
				(6,879,184	)
Oil, Gas & Consumable Fuels    (2.7)%
Callon Petroleum Co.*		133,200		(1,763,568	)
Centennial Resource Development, Inc., (Class A Stock)*		18,200		(333,970	)
CNX Resources Corp.*		46,600		(719,038	)
EQT Corp.		72,900		(3,463,479	)
Extraction Oil & Gas, Inc.*		25,400		(291,084	)

See Notes to Financial Statements.

32

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
Golar LNG Ltd. (Bermuda)		14,000	$	(383,040	)
Green Plains, Inc.		22,100		(371,280	)
Jagged Peak Energy, Inc.*		18,700		(264,231	)
Parsley Energy, Inc., (Class A Stock)*		174,500		(5,058,755	)
SemGroup Corp., (Class A Stock)		21,700		(464,380	)
SRC Energy, Inc.*		65,900		(621,437	)
				(13,734,262	)
Pharmaceuticals    (0.4)%
Impax Laboratories, Inc.*		47,700		(927,765	)
Medicines Co. (The)*		34,800		(1,146,312	)
				(2,074,077	)
Professional Services    (1.8)%
IHS Markit Ltd.*		78,200		(3,772,368	)
Nielsen Holdings PLC		122,300		(3,887,917	)
WageWorks, Inc.*		25,800		(1,166,160	)
				(8,826,445	)
Real Estate Management & Development    (0.7)%
Howard Hughes Corp. (The)*		26,200		(3,645,206	)
Road & Rail    (0.6)%
Knight-Swift Transportation Holdings, Inc.		65,600		(3,018,256	)
Semiconductors & Semiconductor Equipment    (1.2)%
Cree, Inc.*		46,300		(1,866,353	)
Ichor Holdings Ltd.*		21,700		(525,357	)
Inphi Corp.*		33,500		(1,008,350	)
Integrated Device Technology, Inc.*		9,600		(293,376	)
MACOM Technology Solutions Holdings, Inc.*		41,700		(692,220	)
MaxLinear, Inc.*		43,300		(985,075	)
PDF Solutions, Inc.*		21,000		(244,860	)
Veeco Instruments, Inc.*		33,800		(574,600	)
				(6,190,191	)
Software    (4.4)%
Blackline, Inc.*		34,100		(1,337,061	)
Ebix, Inc.		2,100		(156,450	)
Proofpoint, Inc.*		26,400		(3,000,360	)
PROS Holdings, Inc.*		13,200		(435,732	)
ServiceNow, Inc.*		29,100		(4,814,595	)
Splunk, Inc.*		57,300		(5,637,747	)

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 33

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Software (cont’d.)
Tableau Software, Inc., (Class A Stock)*		11,300	$	(913,266	)
Workday, Inc., (Class A Stock)*		43,700		(5,554,707	)
				(21,849,918	)
Specialty Retail    (1.2)%
Camping World Holdings, Inc., (Class A Stock)		14,700		(474,075	)
Floor & Decor Holdings, Inc., (Class A Stock)*		25,400		(1,323,848	)
Lowe’s Cos., Inc.		48,200		(4,229,550	)
				(6,027,473	)
Technology Hardware, Storage & Peripherals    (0.1)%
Electronics For Imaging, Inc.*		24,700		(675,051	)
Textiles, Apparel & Luxury Goods    (0.2)%
Hanesbrands, Inc.		53,000		(976,260	)
Trading Companies & Distributors    (0.5)%
Air Lease Corp.		28,200		(1,201,884	)
SiteOne Landscape Supply, Inc.*		15,100		(1,163,304	)
				(2,365,188	)
Wireless Telecommunication Services    (0.8)%
T-Mobile U.S., Inc.*		68,300		(4,169,032	)
TOTAL SECURITIES SOLD SHORT (proceeds received $223,976,655)				(242,686,662	)
TOTAL INVESTMENTS, NET OF SECURITIES SOLD SHORT    51.1% (cost $202,687,195)				255,706,159
Other assets in excess of liabilities(z)    48.9%				244,281,086
NET ASSETS    100.0%			$	499,987,245

The following abbreviations are used in the annual report:

LIBOR—London Interbank Offered Rate

REITs—Real Estate Investment Trusts

* Non-income producing security.

(k) Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(n) Rates shown reflects yield to maturity at purchase date.

(u) Represents security, or a portion thereof, segregated as collateral for short sales.

(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund.

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

See Notes to Financial Statements.

34

Futures contracts outstanding at March 31, 2018:

Number of Contracts		Type	Expiration Date		Value at Trade Date		Current Notional Amount		Value / Unrealized Appreciation (Depreciation)
	Long Position:
	40	S&P 500 E-Mini Index		Jun. 2018	$	5,266,694	$	5,286,000	$	19,306

Securities with a combined market value of $797,311 have been segregated with Goldman Sachs & Co. to cover requirements for open futures contracts at March 31, 2018.

Fair Value Measurements:

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—unadjusted 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, 2018 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Aerospace & Defense	$	17,235,710	$	—	$	—
Airlines		2,715,072		—		—
Auto Components		3,188,766		—		—
Automobiles		610,401		—		—
Banks		12,233,311		—		—
Beverages		6,048,343		—		—
Biotechnology		14,440,604		—		—
Building Products		4,946,361		—		—
Capital Markets		12,373,116		—		—
Chemicals		9,076,793		—		—
Commercial Services & Supplies		664,760		—		—
Communications Equipment		5,095,969		—		—
Construction & Engineering		4,609,652		—		—

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 35

Schedule of Investments (continued)

as of March 31, 2018

	Level 1		Level 2		Level 3
Investments in Securities (continued)
Common Stocks (continued)
Consumer Finance	$	4,367,214	$	—	$	—
Containers & Packaging		3,119,686		—		—
Distributors		1,631,850		—		—
Diversified Consumer Services		524,600		—		—
Diversified Telecommunication Services		14,617,851		—		—
Electric Utilities		5,519,915		—		—
Electrical Equipment		238,200		—		—
Electronic Equipment, Instruments & Components		9,102,751		—		—
Energy Equipment & Services		204,750		—		—
Equity Real Estate Investment Trusts (REITs)		12,739,268		—		—
Food & Staples Retailing		4,076,982		—		—
Food Products		8,270,074		—		—
Gas Utilities		4,700,732		—		—
Health Care Equipment & Supplies		28,203,922		—		—
Health Care Providers & Services		19,099,922		—		—
Health Care Technology		1,136,241		—		—
Hotels, Restaurants & Leisure		5,762,461		—		—
Household Durables		4,793,120		—		—
Independent Power & Renewable Electricity Producers		5,780,493		—		—
Industrial Conglomerates		3,222,573		—		—
Insurance		2,843,295		—		—
Internet & Direct Marketing Retail		4,435,529		—		—
Internet Software & Services		25,541,087		—		—
IT Services		21,863,167		—		—
Leisure Products		350,880		—		—
Life Sciences Tools & Services		5,836,270		—		—
Machinery		22,788,735		—		—
Media		843,720		—		—
Metals & Mining		12,669,032		—		—
Mortgage Real Estate Investment Trusts (REITs)		1,716,063		—		—
Multi-Utilities		3,587,296		—		—
Multiline Retail		9,888,260		—		—
Oil, Gas & Consumable Fuels		33,057,076		—		—
Personal Products		26,980		—		—
Pharmaceuticals		5,207,884		—		—
Professional Services		3,720,925		—		—
Real Estate Management & Development		4,652,450		—		—
Road & Rail		1,669,344		—		—
Semiconductors & Semiconductor Equipment		23,775,897		—		—
Software		34,998,533		—		—
Specialty Retail		14,368,460		—		—
Technology Hardware, Storage & Peripherals		16,560,073		—		—
Textiles, Apparel & Luxury Goods		7,452,857		—		—
Thrifts & Mortgage Finance		744,464		—		—

See Notes to Financial Statements.

36

	Level 1			Level 2		Level 3
Investments in Securities (continued)
Common Stocks (continued)
Trading Companies & Distributors	$	3,730,252		$	—	$	—
Water Utilities		437,493			—		—
Wireless Telecommunication Services		412,659			—		—
Affiliated Mutual Fund		4,065,366			—		—
U.S. Treasury Obligations		—			797,311		—
Common Stocks-Short
Aerospace & Defense		(1,899,632	)		—		—
Automobiles		(3,619,368	)		—		—
Banks		(2,978,169	)		—		—
Biotechnology		(16,993,551	)		—		—
Capital Markets		(2,024,714	)		—		—
Chemicals		(4,962,999	)		—		—
Commercial Services & Supplies		(4,504,824	)		—		—
Communications Equipment		(3,781,206	)		—		—
Construction & Engineering		(997,779	)		—		—
Construction Materials		(2,715,630	)		—		—
Containers & Packaging		(3,145,032	)		—		—
Diversified Consumer Services		(561,952	)		—		—
Diversified Financial Services		(1,848,300	)		—		—
Electric Utilities		(1,564,938	)		—		—
Electronic Equipment, Instruments & Components		(3,162,308	)		—		—
Energy Equipment & Services		(6,610,348	)		—		—
Equity Real Estate Investment Trusts (REITs)		(15,880,613	)		—		—
Food Products		(871,010	)		—		—
Health Care Equipment & Supplies		(11,296,938	)		—		—
Health Care Providers & Services		(2,857,154	)		—		—
Health Care Technology		(2,266,834	)		—		—
Hotels, Restaurants & Leisure		(7,354,469	)		—		—
Household Durables		(3,272,179	)		—		—
Household Products		(487,290	)		—		—
Independent Power & Renewable Electricity Producers		(877,955	)		—		—
Internet & Direct Marketing Retail		(5,001,573	)		—		—
Internet Software & Services		(7,749,911	)		—		—
IT Services		(20,714,554	)		—		—
Leisure Products		(682,830	)		—		—
Life Sciences Tools & Services		(2,648,395	)		—		—
Machinery		(12,600,692	)		—		—
Media		(3,639,051	)		—		—
Metals & Mining		(1,848,213	)		—		—
Mortgage Real Estate Investment Trusts (REITs)		(835,708	)		—		—
Multi-Utilities		(6,879,184	)		—		—
Oil, Gas & Consumable Fuels		(13,734,262	)		—		—
Pharmaceuticals		(2,074,077	)		—		—
Professional Services		(8,826,445	)		—		—

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 37

Schedule of Investments (continued)

as of March 31, 2018

	Level 1			Level 2		Level 3
Investments in Securities (continued)
Common Stocks-Short (continued)
Real Estate Management & Development	$	(3,645,206	)	$	—	$	—
Road & Rail		(3,018,256	)		—		—
Semiconductors & Semiconductor Equipment		(6,190,191	)		—		—
Software		(21,849,918	)		—		—
Specialty Retail		(6,027,473	)		—		—
Technology Hardware, Storage & Peripherals		(675,051	)		—		—
Textiles, Apparel & Luxury Goods		(976,260	)		—		—
Trading Companies & Distributors		(2,365,188	)		—		—
Wireless Telecommunication Services		(4,169,032	)		—		—
Other Financial Instruments*
Futures Contracts		19,306			—		—
Total	$	254,928,154		$	797,311	$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value.

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Industry Classification:

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of March 31, 2018 were as follows (unaudited):

Software	7.0	%
Oil, Gas & Consumable Fuels	6.6
Health Care Equipment & Supplies	5.6
Internet Software & Services	5.1
Semiconductors & Semiconductor Equipment	4.8
Machinery	4.6
IT Services	4.4
Health Care Providers & Services	3.8
Aerospace & Defense	3.5
Technology Hardware, Storage & Peripherals	3.3
Diversified Telecommunication Services	2.9
Biotechnology	2.9
Specialty Retail	2.9
Equity Real Estate Investment Trusts (REITs)	2.6
Metals & Mining	2.5
Capital Markets	2.5
Banks	2.5
Multiline Retail	2.0
Electronic Equipment, Instruments & Components	1.8
Chemicals	1.8	%
Food Products	1.7
Textiles, Apparel & Luxury Goods	1.5
Beverages	1.2
Life Sciences Tools & Services	1.2
Independent Power & Renewable Electricity Producers	1.2
Hotels, Restaurants & Leisure	1.2
Electric Utilities	1.1
Pharmaceuticals	1.0
Communications Equipment	1.0
Building Products	1.0
Household Durables	1.0
Gas Utilities	0.9
Real Estate Management & Development	0.9
Construction & Engineering	0.9
Internet & Direct Marketing Retail	0.9
Consumer Finance	0.9
Food & Staples Retailing	0.8
Affiliated Mutual Fund	0.8

See Notes to Financial Statements.

38

Industry (cont’d.)
Trading Companies & Distributors	0.7	%
Professional Services	0.7
Multi-Utilities	0.7
Industrial Conglomerates	0.6
Auto Components	0.6
Containers & Packaging	0.6
Insurance	0.6
Airlines	0.5
Mortgage Real Estate Investment Trusts (REITs)	0.3
Road & Rail	0.3
Distributors	0.3
Health Care Technology	0.2
Media	0.2
Thrifts & Mortgage Finance	0.2
U.S. Treasury Obligations	0.1
Commercial Services & Supplies	0.1
Automobiles	0.1
Diversified Consumer Services	0.1
Water Utilities	0.1
Wireless Telecommunication Services	0.1
Leisure Products	0.1
Electrical Equipment	0.1
Energy Equipment & Services	0.0	*
Personal Products	0.0	*
Securities Sold Short
Household Products	(0.1	)
Diversified Consumer Services	(0.1	)
Technology Hardware, Storage & Peripherals	(0.1	)
Leisure Products	(0.1	)
Mortgage Real Estate Investment Trusts (REITs)	(0.2	)
Food Products	(0.2	)
Independent Power & Renewable Electricity Producers	(0.2	)
Textiles, Apparel & Luxury Goods	(0.2	)
Construction & Engineering	(0.2	)
Electric Utilities	(0.3	)
Metals & Mining	(0.4	)
Diversified Financial Services	(0.4	)
Aerospace & Defense	(0.4	)
Capital Markets	(0.4	)%
Pharmaceuticals	(0.4	)
Health Care Technology	(0.5	)
Trading Companies & Distributors	(0.5	)
Life Sciences Tools & Services	(0.5	)
Construction Materials	(0.5	)
Health Care Providers & Services	(0.6	)
Banks	(0.6	)
Road & Rail	(0.6	)
Containers & Packaging	(0.6	)
Electronic Equipment, Instruments & Components	(0.6	)
Household Durables	(0.7	)
Automobiles	(0.7	)
Media	(0.7	)
Real Estate Management & Development	(0.7	)
Communications Equipment	(0.8	)
Wireless Telecommunication Services	(0.8	)
Commercial Services & Supplies	(0.9	)
Chemicals	(1.0	)
Internet & Direct Marketing Retail	(1.0	)
Specialty Retail	(1.2	)
Semiconductors & Semiconductor Equipment	(1.2	)
Energy Equipment & Services	(1.3	)
Multi-Utilities	(1.4	)
Hotels, Restaurants & Leisure	(1.5	)
Internet Software & Services	(1.5	)
Professional Services	(1.8	)
Health Care Equipment & Supplies	(2.3	)
Machinery	(2.5	)
Oil, Gas & Consumable Fuels	(2.7	)
Equity Real Estate Investment Trusts (REITs)	(3.2	)
Biotechnology	(3.4	)
IT Services	(4.1	)
Software	(4.4	)
	51.1
Other assets in excess of liabilities	48.9
	100.0	%

* Less than +/- 0.05%

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

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

Prudential QMA Long-Short Equity Fund 39

Schedule of Investments (continued)

as of March 31, 2018

Fair values of derivative instruments as of March 31, 2018 as presented in the Statement of Assets and Liabilities:

Derivatives not accounted for as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Equity contracts	Due from/to broker—variation margin futures	$	19,306	*	—	$	—

* Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap 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 year ended March 31, 2018 are as follows:

Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Equity contracts	$	971,708

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Equity contracts	$	19,306

For the year ended March 31, 2018, the Fund’s average volume of derivative activities is as follows:

Futures Contracts— Long Positions(1)
$	4,627,666

(1) Value at Trade Date.

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable

See Notes to Financial Statements.

40

master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.

Offsetting of financial instrument/transaction assets and liabilities:

Description	Counterparty	Gross Market Value of Recognized Assets/(Liabilities)			Collateral Pledged/(Received)(1)		Net Amount
Securities Sold Short	Barclays Capital Group	$	(242,686,662	)	$	242,686,662	$	—

(1) Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions.

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 41

Statement of Assets & Liabilities

as of March 31, 2018

Assets
Investments at value:
Unaffiliated investments (cost $422,598,484)	$	494,327,455
Affiliated investments (cost $4,065,366)		4,065,366
Cash		195,371
Deposit with Broker for securities sold short		259,775,771
Receivable for investments sold		43,142,356
Receivable for Fund shares sold		1,484,536
Dividends and interest receivable		755,209
Prepaid expenses		1,408
Total assets		803,747,472
Liabilities
Securities sold short, at value (proceeds received $223,976,655)		242,686,662
Payable for investments purchased		59,041,746
Payable for Fund shares reacquired		1,154,045
Management fee payable		430,958
Dividends and interest payable on securities sold short		292,654
Accrued expenses and other liabilities		103,697
Distribution fee payable		42,200
Affiliated transfer agent fee payable		8,265
Total liabilities		303,760,227
Net Assets	$	499,987,245
Net assets were comprised of:
Shares of beneficial interest, at par	$	39,570
Paid-in capital in excess of par		456,623,187
		456,662,757
Accumulated net investment loss		(1,893	)
Accumulated net realized loss on investment transactions		(9,711,889	)
Net unrealized appreciation on investments		53,038,270
Net assets, March 31, 2018	$	499,987,245

See Notes to Financial Statements.

42

Class A
Net asset value and redemption price per share, ($51,585,341 ÷ 4,107,079 shares of beneficial interest issued and outstanding)	$	12.56
Maximum sales charge (5.50% of offering price)		0.73
Maximum offering price to public	$	13.29
Class C
Net asset value, offering price and redemption price per share,
($36,902,709 ÷ 3,024,889 shares of beneficial interest issued and outstanding)	$	12.20
Class Z
Net asset value, offering price and redemption price per share,
($395,409,018 ÷ 31,169,384 shares of beneficial interest issued and outstanding)	$	12.69
Class Q
Net asset value, offering price and redemption price per share,
($16,090,177 ÷ 1,268,528 shares of beneficial interest issued and outstanding)	$	12.68

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 43

Statement of Operations

Year Ended March 31, 2018

Net Investment Income (Loss)
Income
Unaffiliated dividend income (net of foreign withholding taxes of $1,550)	$	5,352,004
Interest income		2,949,522
Affiliated dividend income		59,654
Total income		8,361,180
Expenses
Management fee		4,601,707
Distribution fee(a)		460,960
Dividend expense on short sales		2,935,191
Broker fees and expenses on short sales		851,629
Transfer agent’s fees and expenses (including affiliated expense of $60,834)(a)		385,336
Registration fees(a)		108,728
Custodian and accounting fees		76,559
Shareholders’ reports		46,717
Audit fee		31,351
Legal fees and expenses		24,113
Trustees’ fees		17,280
Miscellaneous		17,329
Total expenses		9,556,900
Less: Fee waiver and/or expense reimbursement(a)		(307,176	)
Distribution fee waiver(a)		(19,722	)
Net expenses		9,230,002
Net investment income (loss)		(868,822	)
Realized And Unrealized Gain (Loss) On Investments
Net realized gain (loss) on:
Investment transactions		24,941,773
Futures transactions		971,708
Short sales transactions		(26,291,700	)
		(378,219	)
Net change in unrealized appreciation (depreciation) on:
Investments		22,888,330
Futures		19,306
Short sales		(1,666,470	)
		21,241,166
Net gain (loss) on investment transactions		20,862,947
Net Increase (Decrease) In Net Assets Resulting From Operations	$	19,994,125

(a) Class specific expenses and waivers were as follows (see Note 1):

	Class A			Class C			Class Z			Class Q
Distribution fee		118,332			342,628			—			—
Transfer Agent’s fees and expenses		38,626			35,031			311,644			35
Registration fees		17,091			16,422			61,818			13,397
Fee waiver and/or expense reimbursement		(37,375	)		(35,046	)		(225,918	)		(8,837	)
Distribution fee waiver		(19,722	)		—			—			—

See Notes to Financial Statements.

44

Statements of Changes in Net Assets

	Year Ended March 31,
	2018			2017
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	(868,822	)	$	(1,407,964	)
Net realized gain (loss) on investment transactions		(378,219	)		(9,258,682	)
Net change in unrealized appreciation (depreciation) on investments		21,241,166			28,964,056
Net increase (decrease) in net assets resulting from operations		19,994,125			18,297,410
Distributions from net realized gains
Class A		—			(1,182,158	)
Class C		—			(505,840	)
Class Z		—			(3,297,761	)
		—			(4,985,759	)
Fund share transactions (Net of share conversions)
Net proceeds from shares sold		260,353,113			250,036,034
Net asset value of shares issued in reinvestment of dividends and distributions		—			4,818,740
Cost of shares reacquired		(121,385,509	)		(196,509,743	)
Net increase (decrease) in net assets from share transactions		138,967,604			58,345,031
Total increase (decrease)		158,961,729			71,656,682
Net Assets:
Beginning of year		341,025,516			269,368,834
End of year(a)	$	499,987,245		$	341,025,516
(a) Includes (accumulated net investment loss) of:	$	(1,893	)	$	(556,443	)

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 45

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on October 24, 1997. The Trust currently consists of the following five series: Prudential QMA Large-Cap Core Equity PLUS Fund, Prudential QMA Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund, each of which are diversified funds and Prudential Global Real Estate Fund and Prudential US Real Estate Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the Prudential QMA Long-Short Equity Fund (the “Fund”).

The investment objective of the Fund is long-term capital appreciation.

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 and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of

46

some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are 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.

Foreign equities traded on foreign securities exchanges are generally 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. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies 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.

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 Manager 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 unaffiliated mutual funds to calculate their net asset values.

Prudential QMA Long-Short Equity Fund 47

Notes to Financial Statements (continued)

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Trustees of the Trust. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (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

48

paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the 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 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 value of equities. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Short Sales: 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 must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The 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. Dividends declared on open short positions are recorded on the ex-date and the interest payable is accrued daily on fixed income securities sold short, both of which are recorded as an expense. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received.

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

Master Netting Arrangements: The Fund is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser 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

Prudential QMA Long-Short Equity Fund 49

Notes to Financial Statements (continued)

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. In addition to master netting arrangements, 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 was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.

Equity and Mortgage Real Estate Investment Trusts (REITs): The Fund invests in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the equity REITs.

Concentration of Risk for REITs: Real estate securities are subject to similar risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of default or of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. The value of these securities will rise and fall in response to many factors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management of the underlying properties.

In addition, investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.

Concentration of Risk: 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.

50

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (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.

Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, and effective January 1, 2018, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements. Prior to January 1, 2018 transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements were not designated as class specific expenses and were 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.

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, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects to pay dividends from net investment income and distributions from net realized capital 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-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

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

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments

Prudential QMA Long-Short Equity Fund 51

Notes to Financial Statements (continued)

administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Fund’s custodian (the Custodian), and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

PGIM Investments has entered into a subadvisory agreement with Quantitative Management Associates, LLC (“QMA”). The subadvisory agreement provides that QMA will furnish investment advisory services in connection with the management of the Fund. In connection therewith, QMA is obligated to keep certain books and records of the Fund. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly at an annual rate of 1.15% on average daily net assets up to and including $5 billion and 1.13% on the average daily net assets in excess of $5 billion. The management fee rate before any waivers and/or expense reimbursements, was 1.15% for the year ended March 31, 2018.

PGIM Investments has contractually agreed through July 31, 2018 to limit the net annual operating expenses (exclusive of distribution and service (12b-1) fees, taxes (such as income and foreign withholdings taxes, stamp duty and deferred tax expenses), interest, acquired fund fees and expenses, brokerage, extraordinary and certain other expenses such as dividend, broker charges and interest expense on short sales) of each class of shares of the Fund to 1.25% of the Fund’s average daily net assets. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements, was 1.07% for the year ended March 31, 2018.

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

52

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.30% and 1% of the average daily net assets of the Class A and C shares, respectively. PIMS has contractually agreed through July 31, 2018 to limit such fees to 0.25% of the average daily net assets of the Class A shares.

PIMS has advised the Fund that it has received $135,825 in front-end sales charges resulting from sales of Class A shares during the year ended March 31, 2018. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to sales persons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended March 31, 2018, it received $4,276 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.

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

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliated of PGIM Investments 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 may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended March 31, 2018 no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the Prudential Core Ultra Short Bond Fund (the “Core Fund”), a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended March 31, 2018, were $660,307,274 and $530,693,897, respectively.

Prudential QMA Long-Short Equity Fund 53

Notes to Financial Statements (continued)

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-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 year ended March 31, 2018, the adjustments were to decrease accumulated net investment loss by $1,423,372, increase accumulated net realized loss on investment transactions by $7,351 and decrease paid-in capital in excess of par by $1,416,021 due to net operating losses and other book to tax differences. Net investment loss, net realized gain (loss) on investment transactions and net assets were not affected by this change.

For the year ended March 31, 2018, there were no distributions paid by the Fund. For the year ended March 31, 2017, the tax character of dividends paid by the Fund were $4,919,396 of ordinary income and $66,363 of long-term capital gains.

As of March 31, 2018, 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, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$203,849,886	$95,568,847	$(43,693,268)	$51,875,579

The difference between book basis and tax basis is primarily attributable to wash sales and other book to tax differences.

For federal income tax purposes, the Fund had a capital loss carryforward of approximately $8,549,000 which can be carried forward for an unlimited period. No future capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

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.

54

6. Capital and Ownership

The Fund offers Class A, Class C, Class Z and Class Q shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class Q 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 $0.001 par value per share.

As of March 31, 2018, Prudential, through its affiliate entities, owned 1,263,577 Class Q shares of the Fund. At reporting period end, four shareholders of record held 67% of the Fund’s outstanding shares on behalf of multiple beneficial owners.

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended March 31, 2018:
Shares sold		2,037,622		$	25,503,997
Shares reacquired		(519,201	)		(6,398,830	)
Net increase (decrease) in shares outstanding before conversion		1,518,421			19,105,167
Shares issued upon conversion from other share class(es)		14,593			183,701
Shares reacquired upon conversion into other share class(es)		(256,174	)		(3,154,920	)
Net increase (decrease) in shares outstanding		1,276,840		$	16,133,948
Year ended March 31, 2017:
Shares sold		4,237,336		$	48,395,427
Shares issued in reinvestment of dividends and distributions		90,732			1,064,284
Shares reacquired		(5,151,643	)		(58,274,301	)
Net increase (decrease) in shares outstanding before conversion		(823,575	)		(8,814,590	)
Shares issued upon conversion from other share class(es)		9,869			116,906
Shares reacquired upon conversion into other share class(es)		(3,720,431	)		(42,965,310	)
Net increase (decrease) in shares outstanding		(4,534,137	)	$	(51,662,994	)

Prudential QMA Long-Short Equity Fund 55

Notes to Financial Statements (continued)

Class C	Shares			Amount
Year ended March 31, 2018:
Shares sold		941,979		$	11,404,623
Shares reacquired		(708,299	)		(8,481,594	)
Net increase (decrease) in shares outstanding before conversion		233,680			2,923,029
Shares reacquired upon conversion into other share class(es)		(32,158	)		(386,607	)
Net increase (decrease) in shares outstanding		201,522		$	2,536,422
Year ended March 31, 2017:
Shares sold		1,316,213		$	14,777,584
Shares issued in reinvestment of dividends and distributions		43,280			498,149
Shares reacquired		(494,708	)		(5,573,358	)
Net increase (decrease) in shares outstanding before conversion		864,785			9,702,375
Shares reacquired upon conversion into other share class(es)		(20,929	)		(238,054	)
Net increase (decrease) in shares outstanding		843,856		$	9,464,321
Class Z
Year ended March 31, 2018:
Shares sold		17,698,176		$	222,718,426
Shares reacquired		(8,485,111	)		(105,491,893	)
Net increase (decrease) in shares outstanding before conversion		9,213,065			117,226,533
Shares issued upon conversion from other share class(es)		283,997			3,528,375
Shares reacquired upon conversion into other share class(es)		(1,304,854	)		(15,642,084	)
Net increase (decrease) in shares outstanding		8,192,208		$	105,112,824
Year ended March 31, 2017:
Shares sold		16,198,292		$	186,863,023
Shares issued in reinvestment of dividends and distributions		275,724			3,256,307
Shares reacquired		(11,543,219	)		(132,662,084	)
Net increase (decrease) in shares outstanding before conversion		4,930,797			57,457,246
Shares issued upon conversion from other share class(es)		3,706,245			43,088,895
Shares reacquired upon conversion into other share class(es)		(207	)		(2,437	)
Net increase (decrease) in shares outstanding		8,636,835		$	100,543,704
Class Q
Period ended March 31, 2018*:
Shares sold		57,883		$	726,067
Shares reacquired		(80,802	)		(1,013,192	)
Net increase (decrease) in shares outstanding before conversion		(22,919	)		(287,125	)
Shares issued upon conversion from other share class(es)		1,291,447			15,471,535
Net increase (decrease) in shares outstanding		1,268,528		$	15,184,410

* Commencement of offering was May 25, 2017.

56

7. Borrowings

The Trust, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the reporting period ended March 31, 2018.

Prudential QMA Long-Short Equity Fund 57

Financial Highlights

Class A Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018			2017			2016			2015
Per Share Operating Performance(c):
Net Asset Value, Beginning of Period		$11.86			$11.35			$11.00			$10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)		(0.07	)		(0.01	)		(0.05	)
Net realized and unrealized gain (loss) on investments		0.74			0.77			0.41			1.12
Total from investment operations		0.70			0.70			0.40			1.07
Less Distributions:
Distributions from net realized gains		-			(0.19	)		(0.05	)		(0.07	)
Net asset value, end of period		$12.56			$11.86			$11.35			$11.00
Total Return(a):		5.90%			6.17%			3.67%			10.73%
Ratios/Supplemental Data:
Net assets, end of period (000)		$51,585			$33,579			$83,612			$306
Average net assets (000)		$39,444			$69,722			$28,971			$93
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		2.44%			2.30%			2.45%			2.41%	(e)
Expenses before waivers and/or expense reimbursement(g)		2.59%			2.44%			2.64%			3.61%	(e)
Net investment income (loss)		(0.35)%			(0.59)%			(0.07)%			(0.61)%	(e)
Portfolio turnover rate		83%			83%			160%			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, if any. 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 funds 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 0.94%, 0.72%, 0.70% and 0.63%, for the years ended March 31, 2018, March 31, 2017, March 31, 2016 and the period ended March 31, 2015, respectively.

See Notes to Financial Statements.

58

Class C Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018			2017			2016			2015
Per Share Operating Performance(c):
Net Asset Value, Beginning of Period		$11.61			$11.20			$10.93			$10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.14	)		(0.15	)		(0.08	)		(0.12	)
Net realized and unrealized gain (loss) on investments		0.73			0.75			0.40			1.12
Total from investment operations		0.59			0.60			0.32			1.00
Less Distributions:
Distributions from net realized gains		-			(0.19	)		(0.05	)		(0.07	)
Net asset value, end of period		$12.20			$11.61			$11.20			$10.93
Total Return(a):		5.08%			5.35%			2.96%			10.03%
Ratios/Supplemental Data:
Net assets, end of period (000)		$36,903			$32,783			$22,165			$214
Average net assets (000)		$34,263			$29,401			$5,719			$56
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		3.21%			3.08%			3.22%			3.16%	(e)
Expenses before waivers and/or expense reimbursement(g)		3.31%			3.19%			3.37%			4.32%	(e)
Net investment income (loss)		(1.12)%			(1.31)%			(0.74)%			(1.38)%	(e)
Portfolio turnover rate		83%			83%			160%			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, if any. 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 funds 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 0.96%, 0.77%, 0.71% and 0.65%, for the years ended March 31, 2018, March 31, 2017, March 31, 2016 and the period ended March 31, 2015, respectively.

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 59

Financial Highlights (continued)

Class Z Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018			2017			2016			2015
Per Share Operating Performance(c):
Net Asset Value, Beginning of Period		$11.95			$11.41			$11.03			$10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.04	)		(0.01	)		(0.04	)
Net realized and unrealized gain (loss) on investments		0.75			0.77			0.44			1.14
Total from investment operations		0.74			0.73			0.43			1.10
Less Distributions:
Distributions from net realized gains		-			(0.19	)		(0.05	)		(0.07	)
Net asset value, end of period		$12.69			$11.95			$11.41			$11.03
Total Return(a):		6.19%			6.40%			3.93%			11.03%
Ratios/Supplemental Data:
Net assets, end of period (000)		$395,409			$274,663			$163,592			$38,825
Average net assets (000)		$312,993			$199,471			$67,895			$23,245
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		2.19%			2.08%			2.18%			2.12%	(e)
Expenses before waivers and/or expense reimbursement(g)		2.27%			2.19%			2.40%			3.27%	(e)
Net investment income (loss)		(0.11)%			(0.31)%			(0.07)%			(0.44)%	(e)
Portfolio turnover rate		83%			83%			160%			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, if any. 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 funds 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 0.94%, 0.78%, 0.68% and 0.62%, for the years ended March 31, 2018, March 31, 2017, March 31, 2016 and the period ended March 31, 2015, respectively.

See Notes to Financial Statements.

60

Class Q Shares
	May 25, 2017(a) through March 31,
	2018
Per Share Operating Performance(c):
Net Asset Value, Beginning of Period		$11.98
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)
Net realized and unrealized gain (loss) on investments		0.71
Total from investment operations		0.70
Net asset value, end of period		$12.68
Total Return(b):		5.84%
Ratios/Supplemental Data:
Net assets, end of period (000)		$16,090
Average net assets (000)		$15,834
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		2.24%	(e)
Expenses before waivers and/or expense reimbursement(g)		2.30%	(e)
Net investment income (loss)		(0.05)%	(e)
Portfolio turnover rate		83%	(f)

(a) Commencement of offering.

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

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

(d) Does not include expenses of the underlying funds 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 0.99%, for the period ended March 31, 2018.

See Notes to Financial Statements.

Prudential QMA Long-Short Equity Fund 61

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 QMA Long-Short Equity Fund (the “Fund”), a series of Prudential Investment Portfolios 12, including the schedule of investments, as of March 31, 2018, 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 related notes (collectively, the “financial statements”) and the financial highlights for each of the years or periods in the four-year period then ended. 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, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the four-year period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2018, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Prudential Retail investment companies since 2003.

New York, New York

May 15, 2018

62

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
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 90	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (65) Board Member Portfolios Overseen: 90	Retired; Managing Director (April 2008-May 2015) 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).	Since July 2008
Linda W. Bynoe (65) Board Member Portfolios Overseen: 90	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 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).	Since March 2005

Prudential QMA Long-Short Equity Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 90	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.	Since September 2013

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Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).	Since September 2017
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 90	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.	Since July 2008
Richard A. Redeker (74) Board Member Portfolios Overseen: 90	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

Prudential QMA Long-Short Equity Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 89	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 90	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (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.	Since July 2003

 ±Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

# Mr. Reid joined the Board effective as of March 1, 2018.

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Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 90	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen:90	Executive Vice President (since June 2009) of PGIM 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, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010

Prudential QMA Long-Short Equity Fund

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Grace C. Torres* (58) Board Member Portfolios Overseen: 89	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential 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 PGIM 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.	Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM 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.

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 (62) 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 PGIM 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 June 2012

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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
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential 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 September 2014
Dino Capasso (43) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Deborah A. Docs (60) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since May 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM 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 May 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Andrew R. French (55) 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 PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since October 2006

Prudential QMA Long-Short Equity Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
M. Sadiq Peshimam (54) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since February 2006
Peter Parrella (59) 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 June 2007
Lana Lomuti (50) 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 April 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 2015

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

Explanatory Notes to Tables:

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

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ 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 PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, 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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∎ MAIL	∎ TELEPHONE	∎ WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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	PGIM Investments LLC	655 Broad 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	655 Broad Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	225 Liberty 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.pgiminvestments.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.pgiminvestments.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 QMA Long-Short Equity Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 QMA LONG-SHORT EQUITY FUND

SHARE CLASS	A	C	Z	Q
NASDAQ	PLHAX	PLHCX	PLHZX	PLHQX
CUSIP	744336868	744336850	744336843	744336736

MF221E    

PRUDENTIAL SHORT DURATION MUNI HIGH INCOME FUND

ANNUAL REPORT

MARCH 31, 2018

To enroll in e-delivery, go to pgiminvestments.com/edelivery

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

Highlights

PRUDENTIAL SHORT DURATION MUNI HIGH INCOME FUND

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

• The Fund benefited from its overweight, relative to the Bloomberg Barclays Municipal Bond Index (the Index), in tobacco settlement bonds as these were among the top-performing sectors over the period. Tobacco bonds are backed by payments from tobacco companies participating in the Master Settlement Agreement.

• The Fund’s longer duration versus the Index detracted from performance as yields rose on the front end of the curve during the reporting period. Duration is a measure of a bond’s price sensitivity to changes in interest rate levels.

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), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. ^© 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on June 11, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

- Not part of the Annual Report -

Prudential Short Duration Muni High Income Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

- Not part of the Annual Report -

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

- Not part of the Annual Report -

Prudential Short Duration Muni High Income Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	9
Strategy and Performance Overview	12
Fees and Expenses	14
Holdings and Financial Statements	17

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Letter from the President

Dear Shareholder:

We hope you find the annual report for Prudential Short Duration Muni High Income Fund informative and useful. The report covers performance for the 12-month period ended March 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds will be renamed from Prudential to PGIM Funds. Renaming our funds is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name is changing. Your Fund’s management and operation, along with the Fund’s symbols, will remain the same.*

Over the reporting period, global economic growth continued its positive momentum, and central banks gradually tightened monetary policy. The US economy experienced moderate expansion and robust employment levels.

Equity returns were solid, due to healthy earnings expectations and the anticipated impact from tax reform. Global equities, including emerging markets, generally posted strong returns. US equities soared on new regulatory policy and revised corporate tax legislation. However, late in the period volatility arose on jitters over inflation and rising interest rates, tariffs, and a potential trade war.

In bond markets, US Treasury yields rose across both short and longer maturities. European bonds followed and often led during the period. In Japan, the policy stance kept yields considerably lower. US corporate bonds handily outpaced Treasuries. Although most bond market sectors delivered positive returns, a great deal of gains were erased at the end of the period. In March, the Federal Reserve hiked interest rates for the sixth time since 2015, based on confidence in the economy.

Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart Parker, President

Prudential Short Duration Muni High Income Fund

May 15, 2018

*Note: The Prudential Day One Funds will not be changing their names.

Prudential Short Duration Muni High Income Fund 7

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.pgiminvestments.com or by calling (800) 225-1852.

	Average Annual Total Returns as of 3/31/18 (with sales charges)
	One Year  (%)	Since  Inception (%)
Class A	–0.47		1.49 (5/29/14)
Class C	1.11		1.58 (5/29/14)
Class Z	3.13		2.60 (5/29/14)
Class Q	N/A		1.58* (5/25/17)
Bloomberg Barclays Short Duration Muni 50% HG / 50% HY Index
	2.36		0.73
Bloomberg Barclays Municipal Bond Index
	2.66		2.81
Lipper High Yield Municipal Debt Funds Average
	5.03		4.47
	Average Annual Total Returns as of 3/31/18 (without Sales Charges)
	One Year  (%)	Since  Inception (%)
Class A	2.88		2.37 (5/29/14)
Class C	2.11		1.58 (5/29/14)
Class Z	3.13		2.60 (5/29/14)
Class Q	N/A		1.58* (5/25/17)
Bloomberg Barclays Short Duration Muni 50% HG / 50% HY Index
	2.36		0.73
Bloomberg Barclays Municipal Bond Index
	2.66		2.81
Lipper High Yield Municipal Debt Funds Average
	5.03		4.47

*Not annualized

Source: PGIM Investments LLC, Lipper Inc. and Bloomberg Barclays

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the class’ inception date.

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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 Z shares) with a similar investment in the Bloomberg Barclays Short Duration Muni 50% HG/50% HY Index, by portraying the initial account values at the commencement of operations for Class Z shares (May 29, 2014) and the account values at the end of the current fiscal year (March 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class C and Class Q 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 Fund’s 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.

Prudential Short Duration Muni High Income Fund 9

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*	Class Q**
Maximum initial sales charge	3.25% of the public offering price	None	None	None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	1.00% on sales made within 12 months of purchase	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.25%	1.00%	None	None

*Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” in the front of this report for more information.

**Class Q shares will be renamed as Class R6 shares effective on June 11, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 3 of this report for more information.

Benchmark Definitions

Bloomberg Barclays Short Duration Muni 50% HG / 50% HY Index—The Bloomberg Barclays Short Duration Muni 50% HG / 50% HY Index consists of the Bloomberg 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 Bloomberg 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.

Bloomberg Barclays Municipal Bond Index—The Bloomberg Barclays Municipal Bond Index is an unmanaged index of long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.

Lipper High Yield Municipal Debt Funds Average—The Lipper High Yield Municipal Debt Funds Average (Lipper Average) is based on the average return of all funds in the Lipper High Yield Municipal Debt Funds universe for the periods noted. The Lipper High Yield Municipal Debt Funds Average consists of funds that typically invest 50% or more of their assets in municipal debt issues rated BBB or lower.

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.

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Distributions and Yields as of 3/31/18
	Total Distributions Paid for 12 Months ($)	SEC 30-Day Subsidized Yield* (%)	Taxable Equivalent 30-Day Subsidized Yield*** at Federal Tax Rates of		SEC 30-Day Unsubsidized Yield** (%)	Taxable Equivalent 30-Day Unsubsidized Yield*** at Federal Tax Rates of
			37.00%	40.80%		37.00%	40.80%
Class A	0.21	2.10	3.33	3.55	1.82	2.89	3.07
Class C	0.13	1.42	2.25	2.40	1.02	1.62	1.72
Class Z	0.23	2.42	3.84	4.09	2.43	3.86	4.10
Class Q	0.20	2.40	3.81	4.05	–168.89****	–268.08****	–285.29****

*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements).

**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses.

***The taxable equivalent yield is the yield an investor would have to earn on a taxable investment in order to equal the yield provided by a tax-exempt municipal bond. Some investors may be subject to the federal alternative minimum tax (AMT). Taxable equivalent yields reflect federal tax rates.

****Please note that this share class is currently displaying negative SEC 30-Day Unsubsidized Yields due to its lower asset base. A share class with a lower asset base may have gross expenses that exceed income earned over the prior 30-day period, which is captured in the calculation for SEC 30-Day Unsubsidized Yields. The SEC 30-Day Unsubsidized Yield reflects the income earned during a 30-day period, after the deduction of the share class’ gross expense, excluding any expense waivers or reimbursements.

Credit Quality expressed as a percentage of total investments as of 3/31/18 (%)
AAA	1.9
AA	15.5
A	27.4
BBB	30.7
BB	11.3
B	4.2
Not Rated	8.1
Cash/Cash Equivalents	0.8
Total Investments	100.0

Source: PGIM Fixed Income

Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investor Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by a NRSRO. Credit ratings are subject to change. Values may not sum to 100.0% due to rounding.

Prudential Short Duration Muni High Income Fund 11

Strategy and Performance Overview

How did the Fund perform?

The Prudential Short Duration Muni High Income Fund’s Class Z shares returned 3.13% for the 12-month period that ended March 31, 2018. It outperformed the 2.66% return of the Index as well as the 2.36% of the Bloomberg Barclays Short Duration Muni 50% HG /50% HY Index but underperformed the 5.03% 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 much of the reporting period as mutual funds experienced steady inflows. The passage of the Tax Cuts and Jobs Act of 2017 during the reporting period drove a surge in refunding supply, as the legislation eliminated the prospective ability of municipal entities to refund their debt in advance beginning in 2018. This policy shift accelerated a significant amount of issuance midway through the reporting period, effectively leading to a supply reduction in the latter part of the reporting period. While this supply reduction provided a strong technical tailwind for the municipal market, higher interest rates across the curve diminished performance toward the end of the period. For the full period, municipal bonds outperformed US Treasury bonds across the yield curve.

• During the reporting period, the Federal Reserve raised rates by 25 basis points three times—in June, December, and March. The continued path to higher rates is expected to be gradual. The municipal yield curve flattened during the period as front-end rates rose while yields declined on the long end.

• The low-rate environment, coupled with the new tax law’s elimination of advanced refunding eligibility, resulted in refunding volume outpacing new money issuance. In a refunding deal, an issuer reduces its interest expense by redeeming outstanding bonds and issuing new bonds at a lower interest rate.

• On the credit front, volatility continued as investors absorbed the news midway through the reporting period that Puerto Rico was devastated by Hurricane Maria. The storm caused widespread damage and placed substantial strain on an already dire fiscal situation. By the end of the period, updated fiscal plans were being developed, although significant uncertainty exists as negotiations between creditors and the Commonwealth continue under the watchful eye of the courts. The municipal market continued to view the Puerto Rico crises as non-systemic.

• 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 investors mostly concerned about Illinois and New Jersey.

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What worked?

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

• The Fund benefited from its overweight, relative to the Index, in tobacco settlement bonds as these were 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 healthcare bonds, which outperformed during the reporting period, contributed favorably to performance. The Fund’s overweight in education and prepay gas credits also contributed favorably.

What didn’t work?

• The Fund’s longer duration versus the Index detracted from performance as yields rose on the front end of the curve during the reporting period. Duration is a measure of a bond’s price sensitivity to changes in interest rate levels.

• The Fund’s underweight in Puerto Rico credits detracted from performance as spreads narrowed during the reporting period.

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

The Fund held futures contracts on U.S. Treasuries to shorten the portfolio’s duration, which reduced its sensitivity to changes in the level of rates. Overall, this strategy had a neutral impact on performance during the reporting period.

Current outlook

Looking ahead, while municipal market technicals (supply and demand) typically weaken at the start of the second quarter, the market is better positioned this year as supply is expected to remain manageable given heavy issuance in late 2017 ahead of tax reform. For 2018, significant negative net supply is expected where interest and principal payments outpace issuance. A stable rate environment should support mutual fund flows. The problem credits that have dominated the municipal market headlines in recent years have not been resolved. However, PGIM Fixed Income continues to believe that these credit stories, regardless of the outcomes, do not pose a systemic risk to the broader municipal market.

Prudential Short Duration Muni High Income Fund 13

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 held through the six-month period ended March 31, 2018. 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 funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account

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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, 2017		Ending  Account Value March 31, 2018		Annualized Expense Ratio Based on the Six-Month Period			Expenses  Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,000.50		0.85	%	$	4.24
	Hypothetical	$	1,000.00	$	1,020.69		0.85	%	$	4.28
Class C	Actual	$	1,000.00	$	996.70		1.60	%	$	7.96
	Hypothetical	$	1,000.00	$	1,016.95		1.60	%	$	8.05
Class Z	Actual	$	1,000.00	$	1,001.70		0.60	%	$	2.99
	Hypothetical	$	1,000.00	$	1,021.94		0.60	%	$	3.02
Class Q	Actual	$	1,000.00	$	1,001.70		0.60	%	$	2.99
	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, 2018, and divided by the 365 days in the Fund’s fiscal year ended March 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

Prudential Short Duration Muni High Income Fund 15

Schedule of Investments

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS    99.4%
Alabama    0.7%
Black Belt Energy Gas District, Revenue, Series B-1, (Mandatory Put Date 12/01/23), 1 Month LIBOR + 0.900%		2.051	%(c)		12/01/48		1,000	$	1,000,000
Alaska    0.8%
Alaska Industrial Development & Export Authority, Revenue, Snettisham Hydro Project, AMT, Rfdg		5.000			01/01/22		535		586,927
Alaska Industrial Development & Export Authority, Revenue, Snettisham Hydroelectric, AMT, Rfdg		5.000			01/01/23		250		279,690
City of Valdez, Revenue, ExxonMobil International Holdings, Inc., Rfdg, (Mandatory Put Date 04/01/18), FRDD		1.690	(cc)		12/01/29		200		200,000
									1,066,617
Arizona    4.5%
Arizona Health Facilities Authority, Revenue, Banner Health, Series B, 3 Month LIBOR + 0.810%		1.945	(c)		01/01/37		2,005		1,849,673
Arizona Industrial Development Authority, Revenue, Basis School Project, Series A, Rfdg, 144A		5.000			07/01/26		255		273,485
Arizona Industrial Development Authority, Revenue, Basis School Project, Series D, Rfdg, 144A		4.000			07/01/27		255		253,623
Industrial Development Authority of the City of Phoenix, Revenue, Great Hearts Academies Project		3.750			07/01/24		640		664,902
La Paz County Industrial Development Authority, Revenue, Cosmos Foundation, Inc., Series A, 144A		5.000			02/15/26		750		811,732
Maricopa County Industrial Development Authority, Revenue, Horizon Community Learning Center, Rfdg		4.000			07/01/26		1,000		990,250
Maricopa County Industrial Development Authority, Revenue, Paradise School Project, Rfdg, 144A		4.000			07/01/26		500		501,720
Maricopa County Industrial Development Authority, Revenue, Reid Traditional Schools Project		4.000			07/01/26		500		511,625
Salt Verde Finance Corp., National Gas Utility, Revenue		5.250			12/01/21		505		557,005
									6,414,015
California    5.8%
California Municipal Finance Authority, Revenue, American Heritage Foundation, Series A, Rfdg		4.000			06/01/26		500		530,720
California Pollution Control Financing Authority, Revenue, Green Bonds Project, AMT, 144A		7.000			07/01/22		250		252,700
California School Finance Authority, Revenue, Alliance College Ready Public Schools, Series A, 144A		4.000			07/01/21		400		420,108
California School Finance Authority, Revenue, Alliance College Ready Public Schools, Series A, Rfdg, 144A		4.000			07/01/24		270		290,037

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 17

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
California (cont’d.)
California School Finance Authority, Revenue, Alliance College Ready Public Schools, Series A, Rfdg, 144A		4.000	%		07/01/25		285	$	307,082
California School Finance Authority, Revenue, Green Dot Public School Project, Series A, 144A		4.000			08/01/25		330		346,672
California School Finance Authority, Revenue, KIPP LA Project, Series A, Rfdg, 144A		3.625			07/01/25		625		645,300
Chula Vista Municipal Financing Authority, Specialty Tax, Rfdg		5.000			09/01/21		755		822,791
City of Fontana Sierra Hills, Specialty Tax, Series 22, Rfdg		4.000			09/01/19		385		395,603
City of Los Angeles, Verne Brethren Hillcrest Homes, Revenue, Certificate of Participation, Rfdg		4.000			05/15/18		225		225,614
City of Roseville, Westpark Community Facility District No.1, Specialty Tax, Rfdg		5.000			09/01/22		225		251,543
Golden State Tobacco Securitization Corp., Revenue, Series A-1, Rfdg		5.000			06/01/26		1,000		1,147,690
Long Beach Bond Finance Authority, Natural Gas, Revenue, Series B, 3 Month LIBOR + 1.450%		2.682	(c)		11/15/27		700		704,417
Palomar Health, Revenue, Rfdg		5.000			11/01/24		545		606,520
Southern California Public Power Authority Natural Gas Project, Revenue, Project No.1, Series A-1, 3 Month LIBOR + 1.470%		2.658	(c)		11/01/38		1,360		1,231,534
Tobacco Securitization Authority of Northern California, Revenue, Series A-1, Rfdg		4.750			06/01/23		30		30,005
									8,208,336
Colorado    3.6%
City & County of Denver, Revenue, United Airlines, Inc., AMT, Rfdg		5.000			10/01/32		500		540,565
Colorado Educational & Cultural Facilities Authority, Revenue, Lighthouse Building Corp. Stem Project, Rfdg		4.000			11/01/24		505		508,474
Colorado Health Facilities Authority, Revenue, Catholic Health Initiative, Series 2009A, Rfdg		5.000			07/01/19		100		103,440
Colorado Health Facilities Authority, Revenue, Christian Living Neighborhood, Rfdg		4.000			01/01/22		300		313,356
Colorado Health Facilities Authority, Revenue, National Jewish Health Initiatives, Rfdg		5.000			01/01/20		695		721,070
Colorado Health Facilities Authority, Revenue, National Jewish Health Initiatives, Rfdg		5.000			01/01/22		125		132,875
Colorado Health Facilities Authority, Revenue, National Jewish Health Initiatives, Rfdg		5.000			01/01/24		300		313,716

See Notes to Financial Statements.

18

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Colorado (cont’d.)
Colorado Health Facilities Authority, Revenue, Retirement Communities, Series A, Rfdg		4.000	%		12/01/19		515	$	532,247
E-470 Public Highway Authority, Revenue, Series A, Rfdg		5.000			09/01/20		650		696,937
Park Creek Metropolitan District, Revenue, Series A, Rfdg		5.000			12/01/23		1,100		1,240,569
									5,103,249
Connecticut    1.5%
Harbor Point Infrastructure Improvement District, Rfdg, 144A		5.000			04/01/22		900		967,635
State of Connecticut Special Tax, Revenue, Transportation Infrastructure		5.000			01/01/27		1,000		1,151,950
									2,119,585
Delaware    1.0%
Delaware State Economic Development Authority, Revenue, Aspira Charter School, Series A		3.250			06/01/26		800		743,712
Delaware State Economic Development Authority, Revenue, Newark Charter School, Series A, Rfdg		2.800			09/01/26		480		463,517
Delaware State Health Facilities Authority, Revenue, Nanticoke Memorial Hospital, Rfdg		4.000			07/01/22		100		103,954
Delaware State Health Facilities Authority, Revenue, Nanticoke Memorial Hospital, Rfdg		5.000			07/01/23		100		108,723
									1,419,906
District of Columbia    0.8%
District of Columbia Friendship Public Charter School, Revenue		3.550			06/01/22		795		812,585
District of Columbia KIPP Charter School, Revenue, Rfdg (Escrowed to Maturity date 07/01/23)(ee)		5.000			07/01/23		275		304,332
									1,116,917
Florida    7.1%
City of Tallahassee, Revenue, Memorial Healthcare, Inc., Project, Series A		5.000			12/01/23		150		167,576
City of Tallahassee, Revenue, Memorial Healthcare, Inc., Project, Series A		5.000			12/01/25		400		453,208
Cityplace Community Development District, Special Assessment, Rfdg		5.000			05/01/20		740		785,725
County of Broward Airport System, Revenue, AMT		5.000			10/01/25		250		287,132
Florida Higher Educational Facilities Financial Authority, Revenue, Nova Southeastern University, Rfdg		4.000			04/01/21		40		41,921

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 19

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Florida (cont’d.)
Greater Orlando Aviation Authority, Revenue, Jet Blue Airways Corp., AMT, Rfdg		5.000	%		11/15/26		500	$	530,030
Lakewood Ranch Stewardship District, Special Assessment		4.000			05/01/21		400		404,452
Lakewood Ranch Stewardship District, Special Assessment		4.250			05/01/25		400		405,168
Lakewood Ranch Stewardship District, Special Assessment		4.250			05/01/26		250		254,743
Lakewood Ranch Stewardship District, Special Assessment		4.625			05/01/27		500		517,400
Martin County Industrial Development Authority, Revenue, Indiantown Co-Generation LP, AMT, Rfdg, 144A		3.950			12/15/21		250		255,762
Myrtle Creek Improvement District, Special Assessment, Series A, BAM, Rfdg		4.000			05/01/27		1,000		1,053,360
Orange County Health Facilities Authority, Revenue, Regional Healthcare, NATL, Series C, Rfdg (Escrowed to Maturity date 10/01/21)(ee)		6.250			10/01/21		80		86,866
Palm Beach County Health Facilities Authority, Revenue, Sinai Residences, Series A, Rfdg		6.750			06/01/24		450		519,444
Village Community Development District No. 4, Special Assessment, Revenue, Rfdg		4.125			05/01/21		95		99,934
Village Community Development District No. 5, Phase I, Special Assessment, Revenue, Rfdg		3.000			05/01/21		160		163,195
Village Community Development District No. 6, Special Assessment, Revenue, Rfdg		3.000			05/01/20		150		153,191
Village Community Development District No. 6, Special Assessment, Revenue, Rfdg		3.000			05/01/21		170		174,024
Village Community Development District No. 6, Special Assessment, Revenue, Rfdg		4.000			05/01/26		250		262,135
Village Community Development District No. 7, Special Assessment, Revenue, Rfdg		4.000			05/01/21		480		506,304
Village Community Development District No. 7, Special Assessment, Revenue, Rfdg		4.000			05/01/24		870		940,087
Village Community Development District No. 7, Special Assessment, Revenue, Rfdg		4.000			05/01/25		240		259,332
Village Community Development District No. 7, Special Assessment, Revenue, Rfdg		4.000			05/01/26		285		305,112
Village Community Development District No. 10, Special Assessment, Revenue		4.500			05/01/23		315		336,247
Village Community Development District No. 11, Special Assessment, Revenue		3.250			05/01/19		380		383,880
Village Community Development District No. 12, Special Assessment, Revenue		2.875			05/01/21		500		505,950
Village Community Development District No. 12, Special Assessment, Revenue, 144A		3.250			05/01/23		250		250,473
									10,102,651

See Notes to Financial Statements.

20

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Georgia    1.5%
Burke County Development Authority, Revenue, Variable Oglethorpe Power Corp., Series V, Rfdg, (Mandatory Put Date 02/03/25)		3.250	%(cc)		11/01/45		500	$	493,945
Main Street Natural Gas, Inc., Revenue, Series B, (Mandatory Put Date 09/01/23), 1 Month LIBOR + 0.750%		1.865	(c)		04/01/48		1,000		993,480
Private Colleges & Universities Authority, Revenue, Savannah College of Art & Design		5.000			04/01/22		625		687,794
									2,175,219
Guam    1.3%
Guam Government Waterworks Authority, Revenue, Series A, Rfdg		5.000			07/01/20		400		420,960
Territory of Guam, Revenue, Series A		5.000			01/01/23		250		265,385
Territory of Guam, Revenue, Series D, Rfdg		5.000			11/15/21		1,100		1,181,906
									1,868,251
Idaho    1.5%
County of Nez Perce, Revenue, Rfdg		2.750			10/01/24		1,000		985,350
Idaho Health Facilities Authority, Madison Memorial Hospital, Revenue, Rfdg		5.000			09/01/22		1,000		1,073,050
									2,058,400
Illinois    20.7%
Chicago Board of Education, Dedicated Revenues, GO, Rfdg		4.250			12/01/18		375		378,180
Chicago Board of Education, Dedicated Revenues, Series B, GO, AMBAC, Rfdg		5.000			12/01/18		350		354,672
Chicago Board of Education, GO, Rfdg		5.000			12/01/18		1,815		1,839,230
Chicago Board of Education, Series, GO, Rfdg (Escrowed to Maturity date 12/01/19)(ee)		5.000			12/01/19		70		73,683
Chicago Board of Education, Series A, GO, AMBAC, Rfdg		5.500			12/01/23		315		346,806
Chicago Board of Education, Series A, NATL, GO, Rfdg		5.000			12/01/18		160		162,306
Chicago Board of Education, Series F, GO, Rfdg		5.000			12/01/19		280		288,263
Chicago Board of Education, Series F, GO, Rfdg		5.000			12/01/22		1,000		1,059,530
Chicago O’Hare International Airport, Revenue, General Senior Lien, Series D, AMT		5.000			01/01/26		300		342,288
Chicago O’Hare International Airport, Revenue, Series C, AMT, Rfdg		5.000			01/01/23		200		222,420
Chicago Transit Authority, Revenue, Federal Transit Administration Section 530, AGM, Rfdg		5.000			06/01/22		1,630		1,761,329
City of Chicago, Series A, GO		4.000			12/01/18		250		252,850

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 21

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Illinois (cont’d.)
City of Chicago, Series A, GO		5.000	%		01/01/20		200	$	206,878
City of Chicago, Series A, GO, Rfdg (Pre-refunded date 01/01/20)(ee)		5.000			01/01/24		335		342,501
City of Chicago, Series B, GO, Rfdg		5.000			01/01/19		750		763,882
City of Chicago, Series B, GO, Rfdg		5.000			01/01/23		370		392,056
City of Chicago, Series C, GO, Rfdg		5.000			01/01/20		250		257,693
City of Chicago, Series C, GO, Rfdg		5.000			01/01/22		780		824,897
City of Chicago Wastewater Transmission, Revenue, Second Lien		4.000			01/01/20		1,120		1,154,675
City of Chicago Wastewater Transmission, Revenue, Second Lien, Rfdg		5.000			01/01/25		350		379,382
City of Chicago Wastewater Transmission, Revenue, Second Lien, Series C, Rfdg		5.000			01/01/22		990		1,075,694
City of Chicago Waterworks, Revenue, Second Lien		4.000			11/01/24		110		115,632
City of Chicago Waterworks, Revenue, Second Lien Project		4.000			11/01/21		375		395,580
City of Chicago Waterworks, Revenue, Second Lien, AGM, Rfdg		4.250			11/01/18		300		304,254
City of Chicago Waterworks, Revenue, Second Lien, Rfdg		4.000			11/01/19		490		504,754
City of Chicago Waterworks, Revenue, Second Lien, Rfdg		4.000			11/01/20		1,065		1,113,319
City of Chicago Waterworks, Revenue, Second Lien, Rfdg		5.000			11/01/20		385		411,064
City of Chicago Waterworks, Revenue, Second Lien, Rfdg		5.000			11/01/22		195		214,984
City of Chicago Waterworks, Revenue, Second Lien, Rfdg		5.000			11/01/24		600		675,714
City of Chicago Waterworks, Revenue, Second Lien, Series 2017-2, Rfdg		5.000			11/01/24		270		304,071
City of Springfield Electric, Revenue, Senior Lien, Rfdg		5.000			03/01/22		275		301,320
County of Cook, Series A, GO, Rfdg		5.000			11/15/23		1,000		1,131,340
Illinois Finance Authority, Presbyterian Homes, Revenue, Series B, Rfdg (Mandatory Put Date 05/01/21), 1 Month LIBOR + 1.350%		2.515	(c)		05/01/36		500		502,440
Illinois Finance Authority, Revenue, Advocate Healthcare Network, Series D		5.500			11/01/18		30		30,658
Illinois Finance Authority, Revenue, Advocate Healthcare, Series A-2, Rfdg (Mandatory Put Date 02/12/20)		5.000	(cc)		11/01/30		350		369,579
Illinois Finance Authority, Revenue, Resurrection Health, Series B, AGM, Rfdg (Pre-refunded date 05/15/18)(ee)		4.500			05/15/20		5		5,018
Illinois Finance Authority, Revenue, Resurrection Health, Series B, AGM, Rfdg (Pre-refunded date 05/15/18)(ee)		4.500			05/15/20		170		170,597
Illinois Finance Authority, Revenue, Silver Cross Hospital, Rfdg		6.000			08/15/23		600		605,946
Illinois Finance Authority, Revenue, Silver Cross Hospital, Series C, Rfdg		5.000			08/15/19		155		160,042

See Notes to Financial Statements.

22

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Illinois (cont’d.)
Railsplitter Tobacco Settlement Authority, Revenue		5.000	%		06/01/24		500	$	564,855
Railsplitter Tobacco Settlement Authority, Revenue		5.375			06/01/21		680		745,124
Regional Transportation Authority, Revenue, Series A, Rfdg		5.500			07/01/25		760		901,337
State of Illinois, GO		5.000			02/01/22		200		207,742
State of Illinois, GO, Rfdg		5.000			08/01/18		75		75,614
State of Illinois, GO, Rfdg		5.000			02/01/24		500		521,510
State of Illinois, Series 2010, GO, AGM, Rfdg		5.000			01/01/20		200		209,070
State of Illinois, Series A, GO		4.000			01/01/23		360		362,473
State of Illinois, Series A, GO		5.000			04/01/20		130		134,385
State of Illinois, Series A, GO, AGM		4.000			09/01/22		150		151,176
State of Illinois, Series B, GO, Rfdg		5.250			01/01/21		715		747,432
State of Illinois, Series D, GO		5.000			11/01/23		1,500		1,568,175
State of Illinois, Revenue		5.000			06/15/24		505		561,757
State of Illinois, Revenue, GO, AGM, Rfdg		4.000			01/01/20		525		539,889
State of Illinois, Revenue, Junior Series D, BAM, Rfdg		5.000			06/15/25		1,325		1,513,826
State of Illinois, Revenue, Series A, GO		4.000			06/15/19		150		153,644
University of Illinois, Revenue, Series A, Rfdg		5.000			04/01/26		425		472,604
									29,226,140
Indiana    0.6%
Gary Chicago International Airport Authority, Revenue, AMT		5.000			02/01/20		835		875,255
Iowa    0.7%
Iowa Finance Authority, Revenue, Iowa Fertilizer Co. Project, Rfdg		5.000			12/01/19		540		556,643
Iowa Finance Authority, Revenue, Iowa Fertilizer Co. Project, Rfdg		5.500			12/01/22		415		420,818
									977,461
Kentucky    1.2%
Kentucky Economic Development Finance Authority, Revenue, Owensboro Medical Health Systems, Series A		5.000			06/01/18		120		120,467
Kentucky Economic Development Finance Authority, Revenue, Owensboro Medical Health Systems, Series A		5.250			06/01/20		500		525,605
Kentucky Public Energy Authority, Revenue, Series A, (Mandatory Put Date 04/01/24)		4.000	(cc)		04/01/48		1,000		1,064,660
									1,710,732

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 23

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Louisiana    1.9%
City of New Orleans, GO, Rfdg		5.000	%		12/01/22		100	$	111,632
City of New Orleans, GO, Rfdg		5.000			12/01/23		150		169,592
City of New Orleans Sewerage Service, Revenue		5.000			06/01/23		300		336,249
City of New Orleans Sewerage Service, Revenue		5.000			06/01/24		200		228,994
Louisiana Public Facilities Authority, Revenue, Ochsner Clinic Foundation, Rfdg		5.000			05/15/22		265		292,944
Louisiana State Citizens Property Insurance Corp., Revenue, AGM, Rfdg		5.000			06/01/21		750		820,260
New Orleans Sewerage Service, Revenue, Rfdg		5.000			06/01/19		400		414,352
New Orleans Sewerage Service, Revenue, Rfdg		5.000			06/01/20		350		372,242
									2,746,265
Maryland    0.7%
City of Westminster, Revenue, Project Carroll Lutheran Village, Rfdg		5.000			07/01/18		400		402,856
Frederick County Special Obligation, Urbana Community Development Authorization, Specialty Tax, Series A, Rfdg		5.000			07/01/20		100		107,763
Frederick County Special Obligation, Urbana Community Development Authorization, Specialty Tax, Series A, Rfdg		5.000			07/01/21		100		107,971
Maryland Economic Development Corp., Revenue, Transportation Project, Series A, Rfdg		5.000			06/01/24		350		392,227
									1,010,817
Massachusetts    0.2%
Massachusetts Development Finance Agency, Revenue, International Charter School, Rfdg		4.000			04/15/20		325		333,691
Michigan    0.9%
Michigan Finance Authority, Revenue, Local Government Loan Program, Series B, Rfdg		4.000			07/01/18		640		643,859
Michigan Finance Authority, Revenue, Local Government Loan Program, Series D-1, Rfdg		5.000			07/01/22		400		442,568
Oakland County Economic Development Corp., Revenue, Roman Catholic Archdiocese of Detroit, Rfdg		6.500			12/01/20		160		164,205
									1,250,632
Minnesota    0.9%
City of Hugo, Revenue, Charter School Noble Academy Project, Series A		4.000			07/01/22		480		494,530

See Notes to Financial Statements.

24

Description	Interest Rate			Maturity Date			Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Minnesota (cont’d.)
City of St. Paul Housing & Redevelopment Authority, Revenue, Healtheast Care System Project (Escrowed to Maturity date 11/15/20)(ee)		5.000	%		11/15/20			500	$	539,640
Shakopee Healthcare Facility, Revenue, St. Francis Regional Medical Center, Rfdg		5.000			09/01/19			185		192,050
										1,226,220
Mississippi    0.7%
Mississippi Business Finance Corp., Revenue, Variable Chevron Corp., Series E, (Mandatory Put Date 04/01/18), FRDD		1.700	(cc)		12/01/30			1,000		1,000,000
Missouri    0.4%
Health & Educational Facilities Authority of the State of Missouri, Revenue, Lutheran Senior Services, Rfdg		2.150			02/01/19			500		500,400
Health & Educational Facilities Authority of the State of Missouri, Revenue, St. Louis College of Pharmacy Project, Rfdg		5.000			05/01/19			125		129,728
						��
										630,128
Nevada    1.1%
Clark County Airport Department of Aviation, Revenue, Jet Aviation Fuel Tax, Series A, AMT, Rfdg		5.000			07/01/21			500		544,740
County of Washoe, Sierra Pacific Power Co., Revenue, Series B, Rfdg (Mandatory Put Date 06/01/22)		3.000	(cc)		03/01/36			1,000		1,020,020
										1,564,760
New Jersey    6.5%
Casino Reinvestment Development Authority, Revenue, Rfdg		4.000			11/01/19			500		513,245
New Jersey Building Authority, Revenue, Series A, Rfdg		5.000			06/15/21			625		666,781
New Jersey Building Authority, Revenue, Series A, Rfdg (Escrowed to Maturity date 06/15/21)(ee)		5.000			06/15/21			60		65,727
New Jersey Economic Development Authority, Revenue, Police Barracks Project		4.750			06/15/19			245		252,291
New Jersey Economic Development Authority, Revenue, Port Newark Container, AMT, Rfdg		5.000			10/01/21			500		540,185
New Jersey Economic Development Authority, Revenue, Provident Group-Rowan Properties LLC, Series A		5.000			01/01/23			500		546,905
New Jersey Economic Development Authority, Revenue, School Facilities Construction, Series EE, Rfdg		5.000			09/01/18			85		86,008

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 25

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
New Jersey (cont’d.)
New Jersey Economic Development Authority, Revenue, School Facilities Construction, Series NN, Rfdg (Escrowed to Maturity date 03/01/19)(ee)		5.000	%		03/01/19		150	$	154,427
New Jersey Economic Development Authority, Revenue, Series XX, Rfdg		5.000			06/15/22		800		861,024
New Jersey Economic Development Authority, Revenue, Transit Project Sublease, Series A, Rfdg		5.000			05/01/19		275		283,123
New Jersey Economic Development Authority, Revenue, United Airlines, Series A, AMT		4.875			09/15/19		990		1,015,572
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center		4.500			07/01/20		310		324,269
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center, Rfdg		4.250			07/01/19		150		153,378
New Jersey Health Care Facilities Financing Authority, Revenue, Holy Name Medical Center, Rfdg		5.000			07/01/19		235		242,438
New Jersey Health Care Facilities Financing Authority, Revenue, University Hospital, Series A, AGM, Rfdg		5.000			07/01/23		500		563,950
New Jersey Health Care Facilities Financing Authority, Revenue, Virtua Health, Rfdg		5.000			07/01/21		125		136,844
New Jersey Transportation Trust Fund Authority, Revenue, Series AA		5.000			06/15/19		100		103,271
New Jersey Transportation Trust Fund Authority, Revenue, Series B, AGM, Rfdg		5.500			12/15/21		175		193,111
New Jersey Transportation Trust Fund Authority, Revenue, Series B, NATL, Rfdg		5.500			12/15/20		200		215,672
New Jersey Transportation Trust Fund Authority, Revenue, Series B, Rfdg		5.250			12/15/19		440		461,652
New Jersey Transportation Trust Fund Authority, Revenue, Transportation Project, Series AA		5.000			06/15/22		315		339,028
New Jersey Turnpike Authority, Revenue, Variable, Series D-1, Rfdg, 1 Month LIBOR + 0.700%		1.865	(c)		01/01/24		1,000		998,090
South Jersey Transportation Authority LLC, Revenue, Series A, Rfdg		5.000			11/01/20		100		107,552
South Jersey Transportation Authority LLC, Revenue, Series A, Rfdg		5.000			11/01/21		350		384,167
									9,208,710
New York    4.5%
New York State Dormitory Authority, Revenue, Orange Regional Medical Center, 144A		5.000			12/01/21		500		538,365
New York State Energy Research & Development Authority, Revenue, Series B, Rfdg (Mandatory Put Date 05/01/20)		2.000	(cc)		02/01/29		500		498,885

See Notes to Financial Statements.

26

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
New York (cont’d.)
New York Transportation Development Corp., Revenue, Terminal One Group Association, AMT, Rfdg		5.000	%		01/01/22		1,000	$	1,090,290
New York Transportation Development Corp., Revenue, Terminal One Group Association, AMT, Rfdg		5.000			01/01/23		1,000		1,099,400
Port Authority of New York & New Jersey, Revenue, JFK International Air Terminal		5.000			12/01/20		1,510		1,580,743
Port Authority of New York & New Jersey, Revenue, Series 188, AMT, Rfdg		5.000			05/01/23		325		363,844
Port Authority of New York & New Jersey, Revenue, Series 207, AMT, Rfdg		5.000			09/15/26		1,000		1,161,240
									6,332,767
North Carolina    0.4%
North Carolina Medical Care Commission, Revenue, Pennybyrn at Maryfield		5.000			10/01/20		500		529,920
North Dakota    0.4%
Burleigh County Healthcare, St. Alexius Project, Revenue, Series A, Rfdg (Escrowed to Maturity date 07/01/20)(ee)		4.000			07/01/20		500		522,390
Ohio    3.8%
Buckeye Tobacco Settlement Financing Authority, Revenue, Asset-Backed, Senior Turbo, Series A-2		5.125			06/01/24		3,665		3,587,155
Buckeye Tobacco Settlement Financing Authority, Revenue, Asset-Backed, Senior Turbo, Series A-2		5.875			06/01/30		600		595,578
County of Cuyahoga, Revenue, MetroHealth System, Rfdg		5.000			02/15/25		695		765,244
Ohio Air Quality Development Authority, Revenue, Pratt Paper LLC Project, AMT, 144A		3.750			01/15/28		500		499,570
									5,447,547
Oklahoma    0.5%
Oklahoma Development Finance Authority, Revenue, University of Oklahoma, Medicine Project, Series B		5.000			08/15/25		450		506,835
Tulsa Airports Improvement Trust, Revenue, American Airlines Group, AMT, Rfdg (Mandatory Put Date 06/01/25)		5.000	(cc)		06/01/35		250		269,130
									775,965
Oregon    0.2%
Hospital Facilities Authority of Multnomah County, Revenue, Mirabella at South Water Front, Series A, Rfdg		5.000			10/01/19		215		220,882

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 27

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Pennsylvania    3.9%
Chester County Industrial Development Authority, Revenue, Renaissance Academy Christian School, Rfdg		3.750	%		10/01/24		445	$	452,449
Commonwealth Financing Authority, Revenue, Tobacco Master Settlement Payment		5.000			06/01/25		1,000		1,121,820
East Hempfield Township Industrial Development Authority, Revenue, Willow Valley Community, Rfdg		5.000			12/01/23		500		567,850
Hospitals & Higher Education Facilities Authority (The), Revenue, Temple University Health System, Rfdg		5.000			07/01/26		1,500		1,668,930
Montgomery County Industrial Development Authority, Revenue, Exelon Generation Co., AMT, Rfdg (Mandatory Put Date 04/01/20)		2.700	(cc)		10/01/34		1,000		1,001,930
Moon Industrial Development Authority, Revenue, Baptist Homes Society, Rfdg		5.000			07/01/20		470		484,349
Pennsylvania Economic Development Financing Authority, Revenue, PA Bridges Finco LP, AMT		5.000			12/31/18		250		255,413
									5,552,741
Puerto Rico    0.1%
Puerto Rico Municipal Finance Agency, Revenue, Series C, AGM, Rfdg		5.250			08/01/18		105		105,844
Rhode Island    0.9%
Tobacco Settlement Financing Corp., Revenue, Senior Series 1A, Rfdg		5.000			06/01/24		810		927,426
Tobacco Settlement Financing Corp., Revenue, Series A, Rfdg		5.000			06/01/22		300		333,093
									1,260,519
South Carolina    0.2%
South Carolina Public Service Authority, Revenue, Santee Cooper, Series A, Rfdg		5.000			12/01/24		280		303,621
Tennessee    1.7%
Memphis-shelby County Industrial Development Board, Senior Tax Project, Rfdg		4.750			07/01/27		650		674,590
Tennessee Energy Acquisition Corp., Revenue, Project, Series A, (Mandatory Put Date 05/01/23)		4.000	(cc)		05/01/48		750		801,472
Tennessee Energy Acquisition Corp., Revenue, Series A		5.250			09/01/23		515		581,523
Tennessee Energy Acquisition Corp., Revenue, Series C		5.000			02/01/20		270		284,310
									2,341,895

See Notes to Financial Statements.

28

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Texas    11.0%
Austin Convention Enterprises, Inc., Revenue, First Tier Convention Center, Rfdg		5.000	%		01/01/31		600	$	685,590
Austin Convention Enterprises, Inc., Revenue, Second Tier Convention Center, Rfdg		5.000			01/01/25		650		739,862
Bexar County Health Facilities Development Corp., Revenue, Army Retirement Residence Foundation, Rfdg		5.000			07/15/24		500		552,635
Board of Managers Joint Guadalupe County-City of Seguin Hospital, Revenue, Rfdg		5.000			12/01/21		1,000		1,052,480
Central Texas Regional Mobility Authority, Revenue, Sub Lien, Rfdg		5.000			01/01/21		180		193,046
City of Houston Airport System, Revenue, Sub-Series A, AMT		5.000			07/01/25		1,000		1,142,600
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc.		3.750			08/15/22		420		438,392
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc.		5.000			08/15/18		115		116,464
Clifton Higher Education Finance Corp., Revenue, Idea Academy, Inc. (Pre-refunded date 08/15/21)(ee)		5.500			08/15/31		410		456,912
Clifton Higher Education Finance Corp., Revenue, Idea Public Schools, Series B		4.000			08/15/23		610		658,538
Dallas County Flood Control District No. 1, Revenue, GO, Rfdg, 144A		5.000			04/01/20		750		781,492
Dallas/Fort Worth International Airport, Revenue, Series B, AMT		5.000			11/01/22		450		500,634
Decatur Hospital Authority, Wise Regional Health Systems, Revenue, Series A, Rfdg		4.000			09/01/20		200		206,358
Decatur Hospital Authority, Wise Regional Health Systems, Revenue, Series A, Rfdg		5.000			09/01/22		150		161,984
Decatur Hospital Authority, Wise Regional Health Systems, Revenue, Series A, Rfdg		5.000			09/01/23		150		162,539
Gulf Coast Authority, Revenue, ExxonMobil International Holdings, Inc., Rfdg, (Mandatory Put Date 04/01/18), FRDD		1.690	(cc)		06/01/20		800		800,000
Houston Higher Education Finance Corp., Revenue, Cosmos Foundation, Series A, Rfdg		4.000			02/15/22		75		77,428
Kerrville Health Facilities Development Corp., Revenue, Peterson Regional Medical Center Project, Rfdg		5.000			08/15/22		485		530,852
New Hope Cultural Education Facilities Corp., Revenue, Tarelton St. University Student Housing Project, Series A		4.000			04/01/21		300		316,818
New Hope Cultural Education Facilities Finance Corp., Revenue, Jubilee Academic Center Project, 144A		4.250			08/15/27		500		490,510
New Hope Cultural Education Facilities Finance Corp., Revenue, MRC Crestview, Rfdg		4.000			11/15/26		1,060		1,085,610

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 29

Schedule of Investments (continued)

as of March 31, 2018

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
Texas (cont’d.)
North Texas Tollway Authority, Revenue, Series A, Rfdg		5.000	%		01/01/21		100	$	107,942
Tarrant County Cultural Education Facilities Finance Corp., Revenue, Trinity Terrace Project, Series A-1, Rfdg		5.000			10/01/29		630		684,854
Texas Municipal Gas Acquisition & Supply Corp. I, Revenue, Senior Lien, Series A		5.250			12/15/19		100		105,248
Texas Municipal Gas Acquisition & Supply Corp. I, Revenue, Senior Lien, Series B, 3 Month LIBOR + 0.700%		2.123	(c)		12/15/26		825		818,185
Texas Municipal Gas Acquisition & Supply Corp. I, Revenue, Senior Lien, Series D		6.250			12/15/26		1,005		1,176,795
Texas Municipal Gas Acquisition & Supply Corp. II, Revenue, 3 Month LIBOR + 0.870%		2.293	(c)		09/15/27		1,515		1,510,970
									15,554,738
Utah    0.4%
Salt Lake City Corp. Airport, Revenue, Series A, AMT		5.000			07/01/22		250		275,223
Utah Charter School Finance Authority, Revenue, Spectrum Academy Project, 144A		4.300			04/15/25		240		242,510
									517,733
Vermont    0.1%
Vermont Economic Development Authority, Revenue, Wake Robin Corp. Project, Rfdg		5.000			05/01/21		100		106,351
Virginia    0.9%
Virginia College Building Authority, Revenue, Marymount University Project, Series A, Rfdg, 144A		5.000			07/01/20		525		550,520
Virginia College Building Authority, Revenue, Marymount University Project, Series B, 144A		5.000			07/01/20		500		524,305
Virginia Small Business Financing Authority, Revenue, Express Lanes, AMT		4.250			07/01/22		150		162,329
									1,237,154
Washington    0.6%
Skagit County Public Hospital District No. 1, Revenue, Rfdg		4.000			12/01/22		500		526,255
Washington Health Care Facilities Authority, Revenue, Overlake Medical Center, Rfdg		5.000			07/01/20		300		318,831
									845,086

See Notes to Financial Statements.

30

Description	Interest Rate			Maturity Date		Principal Amount (000)#		Value
LONG-TERM INVESTMENTS (Continued)
West Virginia    0.5%
Monongalia County Commission Special District, Revenue, Series A, Rfdg, 144A		4.500	%		06/01/27		250	$	249,800
West Virginia Economic Development Authority, Revenue, Morgantown Energy Association, AMT, Rfdg		2.875			12/15/26		450		440,190
									689,990
Wisconsin    2.7%
Public Finance Authority, Revenue, Bancroft Neurohealth Project, Series A, Rfdg, 144A		5.000			06/01/23		500		538,780
Public Finance Authority, Revenue, Celanese U.S. Holdings LLC, Series A, AMT, Rfdg		5.000			01/01/24		1,000		1,105,880
Public Finance Authority, Revenue, Series E, AMT, Rfdg		5.000			07/01/23		2,000		2,161,660
									3,806,320
TOTAL INVESTMENTS    99.4% (cost $140,523,610)									140,565,420
Other assets in excess of liabilities    0.6%									815,402
NET ASSETS    100.0%								$	141,380,822

The following abbreviations are used in the annual report:

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

BAM—Build America Mutual

FRDD—Floating Rate Daily Demand Note

GO—General Obligation

IDB—Industrial Development Bond

LIBOR—London Interbank Offered Rate

NATL—National Public Finance Guaranty Corp.

OTC—Over-the-counter

PCR—Pollution Control Revenue

Rfdg—Refunding

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

(c) Variable rate instrument. The interest rate shown reflects the rate in effect at March 31, 2018.

(cc) Variable rate instrument. The rate shown is based on the latest available information as of March 31, 2018. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.

(ee) All or partial escrowed to maturity and pre-refunded issues are secured by escrowed cash, a guaranteed investment contract and/or U.S. guaranteed obligations.

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 31

Schedule of Investments (continued)

as of March 31, 2018

Fair Value Measurements:

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—unadjusted 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, 2018 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Municipal Bonds
Alabama	$	—	$	1,000,000	$	—
Alaska		—		1,066,617		—
Arizona		—		6,414,015		—
California		—		8,208,336		—
Colorado		—		5,103,249		—
Connecticut		—		2,119,585		—
Delaware		—		1,419,906		—
District of Columbia		—		1,116,917		—
Florida		—		10,102,651		—
Georgia		—		2,175,219		—
Guam		—		1,868,251		—
Idaho		—		2,058,400		—
Illinois		—		29,226,140		—
Indiana		—		875,255		—
Iowa		—		977,461		—
Kentucky		—		1,710,732		—
Louisiana		—		2,746,265		—
Maryland		—		1,010,817		—
Massachusetts		—		333,691		—
Michigan		—		1,250,632		—
Minnesota		—		1,226,220		—
Mississippi		—		1,000,000		—
Missouri		—		630,128		—
Nevada		—		1,564,760		—
New Jersey		—		9,208,710		—
New York		—		6,332,767		—
North Carolina		—		529,920		—

See Notes to Financial Statements.

32

	Level 1		Level 2		Level 3
Investments in Securities (continued)
Municipal Bonds (continued)
North Dakota	$	—	$	522,390	$	—
Ohio		—		5,447,547		—
Oklahoma		—		775,965		—
Oregon		—		220,882		—
Pennsylvania		—		5,552,741		—
Puerto Rico		—		105,844		—
Rhode Island		—		1,260,519		—
South Carolina		—		303,621		—
Tennessee		—		2,341,895		—
Texas		—		15,554,738		—
Utah		—		517,733		—
Vermont		—		106,351		—
Virginia		—		1,237,154		—
Washington		—		845,086		—
West Virginia		—		689,990		—
Wisconsin		—		3,806,320		—
Total	$	—	$	140,565,420	$	—

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Industry Classification:

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of March 31, 2018 were as follows (unaudited):

Healthcare	17.5	%
Special Tax/Assessment District	15.0
Corporate Backed IDB & PCR	12.9
Education	11.6
General Obligation	10.1
Pre-pay Gas	7.7
Transportation	6.8
Tobacco	6.4
Water & Sewer	6.3	%
Lease Backed Certificate of Participation	2.6
Power	1.5
Development	1.0
	99.4
Other assets in excess of liabilities	0.6
	100.0	%

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

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

Prudential Short Duration Muni High Income Fund 33

Schedule of Investments (continued)

as of March 31, 2018

The Fund did not hold any derivative instruments as of March 31, 2018, accordingly, no derivative positions were presented in the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended March 31, 2018 are as follows:

Amount of Realized Gain (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Interest rate contracts	$	603

For the year ended March 31, 2018, the Fund did not have any net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the year ended March 31, 2018, the Fund’s average volume of derivative activities is as follows:

Futures Contracts— Short Positions(1)
$	143,784

(1) Value at Trade Date.

See Notes to Financial Statements.

34

This Page Intentionally Left Blank

Statement of Assets & Liabilities

as of March 31, 2018

Assets
Unaffiliated investments (cost $140,523,610)	$	140,565,420
Cash		1,072,663
Interest receivable		1,662,586
Receivable for Fund shares sold		750,068
Receivable for investments sold		100,000
Prepaid expenses		587
Total assets		144,151,324
Liabilities
Payable for investments purchased		1,765,135
Payable for Fund shares reacquired		770,888
Dividends payable		105,373
Accrued expenses and other liabilities		52,692
Management fee payable		49,946
Distribution fee payable		25,743
Affiliated transfer agent fee payable		725
Total liabilities		2,770,502
Net Assets	$	141,380,822
Net assets were comprised of:
Shares of beneficial interest, at par	$	13,998
Paid-in capital in excess of par		142,313,649
		142,327,647
Undistributed net investment income		292,344
Accumulated net realized loss on investment transactions		(1,280,979	)
Net unrealized appreciation on investments		41,810
Net assets, March 31, 2018	$	141,380,822

See Notes to Financial Statements.

36

Class A
Net asset value and redemption price per share, ($40,222,444 ÷ 3,980,803 shares of beneficial interest issued and outstanding)	$	10.10
Maximum sales charge (3.25% of offering price)		0.34
Maximum offering price to public	$	10.44
Class C
Net asset value, offering price and redemption price per share, ($20,309,243 ÷ 2,011,957 shares of beneficial interest issued and outstanding)	$	10.09
Class Z
Net asset value, offering price and redemption price per share, ($80,838,982 ÷ 8,003,909 shares of beneficial interest issued and outstanding)	$	10.10
Class Q
Net asset value, offering price and redemption price per share, ($10,153 ÷ 1,006 shares of beneficial interest issued and outstanding)	$	10.10

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 37

Statement of Operations

Year Ended March 31, 2018

Net Investment Income (Loss)
Income
Interest income	$	4,053,216
Expenses
Management fee		743,667
Distribution fee(a)		311,794
Transfer agent’s fees and expenses (including affiliated expense of $4,847)(a)		106,942
Registration fees(a)		87,590
Custodian and accounting fees		69,243
Audit fee		42,444
Legal fees and expenses		25,575
Shareholders’ reports		23,001
Trustees’ fees		12,830
Miscellaneous		15,773
Total expenses		1,438,859
Less: Fee waiver and/or expense reimbursement(a)		(314,163	)
Custodian fee credit		(1,630	)
Net expenses		1,123,066
Net investment income (loss)		2,930,150
Realized And Unrealized Gain (Loss) On Investments
Net realized gain (loss) on:
Investment transactions		(485,269	)
Futures transactions		603
		(484,666	)
Net change in unrealized appreciation (depreciation) on investments		978,520
Net gain (loss) on investment transactions		493,854
Net Increase (Decrease) In Net Assets Resulting From Operations	$	3,424,004

(a) Class specific expenses were as follows (see Note 1):

	Class A			Class C			Class Z			Class Q
Distribution fee		97,231			214,563			—			—
Transfer agent’s fees and expenses		26,347			15,226			65,359			10
Registration fees		24,146			18,702			32,630			12,112
Fee waiver and/or expense reimbursement		(85,640	)		(53,020	)		(163,376	)		(12,127	)

See Notes to Financial Statements.

38

Statements of Changes in Net Assets

	Year Ended March 31,
	2018			2017
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	2,930,150		$	3,080,913
Net realized gain (loss) on investment transactions		(484,666	)		(314,281	)
Net change in unrealized appreciation (depreciation) on investments		978,520			(3,761,496	)
Net increase (decrease) in net assets resulting from operations		3,424,004			(994,864	)
Dividends from net investment income
Class A		(795,132	)		(1,186,508	)
Class C		(277,358	)		(291,821	)
Class Z		(1,718,832	)		(1,534,137	)
Class Q		(198	)		—
		(2,791,520	)		(3,012,466	)
Fund share transactions
Net proceeds from shares sold		71,917,437			103,590,710
Net asset value of shares issued in reinvestment of dividends and distributions		1,658,596			1,684,964
Cost of shares reacquired		(52,401,883	)		(130,124,793	)
Net increase (decrease) in net assets from Fund share transactions		21,174,150			(24,849,119	)
Total increase (decrease)		21,806,634			(28,856,449	)
Net Assets:
Beginning of year		119,574,188			148,430,637
End of year(a)	$	141,380,822		$	119,574,188
(a) Includes undistributed net investment income of:	$	292,344		$	155,594

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 39

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on October 24, 1997. The Trust currently consists of the following five series: Prudential QMA Large-Cap Core Equity PLUS Fund, Prudential QMA Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund, each of which are diversified funds and Prudential Global Real Estate Fund and Prudential US Real Estate Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the Prudential Short Duration Muni High Income Fund (the “Fund”).

The investment objective of the Fund is to provide the maximum amount of income that is eligible for exclusion from federal income taxes.

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 and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.

40

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 Schedule of Investments.

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.

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 OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on 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. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

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.

Prudential Short Duration Muni High Income Fund 41

Notes to Financial Statements (continued)

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager 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 unaffiliated mutual funds to calculate their net asset values.

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Trustees of the Trust. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

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 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

42

by changes in value of equities. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse 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 their obligations may be affected by the economic or political developments in a specific industry, region or country.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-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 an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (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.

Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, and effective January 1, 2018, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements. Prior to January 1, 2018 transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements were not designated as class specific expenses and were 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.

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, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

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 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

Prudential Short Duration Muni High Income Fund 43

Notes to Financial Statements (continued)

differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

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

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Fund’s custodian (the Custodian), and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

PGIM Investments has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its PGIM Fixed Income unit. The subadvisory agreement provides that PGIM, Inc. will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PGIM, Inc. is obligated to keep certain books and records of the Fund. PGIM Investments pays for the services of PGIM, Inc., 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 PGIM Investments is accrued daily and payable monthly at an annual rate of 0.55% of the Fund’s average daily net assets up to and including $5 billion, 0.525% on the next $5 billion of average daily net assets, and 0.515% of the Fund’s average daily net assets in excess of $10 billion. The management fee rate before any waivers and/or expense reimbursements was 0.55% for the year ended March 31, 2018.

PGIM Investments has contractually agreed through July 31, 2018 to limit the net annual operating expenses (exclusive of distribution and service (12b-1) fees, taxes (such as

44

income and foreign withholdings taxes, stamp duty and deferred tax expenses), interest, underlying funds, brokerage, extraordinary and certain other expenses such as dividend, broker charges and interest expense on short sales) of each class of shares of the Fund to 0.60% of the Fund’s average daily net assets. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements, was 0.32% for the year ended March 31, 2018.

The Trust, on behalf of the Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) who acts as the distributor of the Class A, Class C, Class Z and Class Q 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 of the Class Z or Class Q shares of the Fund.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and Class C shares, respectively.

PIMS has advised the Fund that it has received $34,690 in front-end sales charges resulting from sales of Class A shares during the year ended March 31, 2018. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to sales persons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended March 31, 2018, it received $1,172 and $3,103 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders, respectively.

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

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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 may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a

Prudential Short Duration Muni High Income Fund 45

Notes to Financial Statements (continued)

common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the year ended March 31, 2018, the Fund’s purchases and sales transactions under Rule 17a-7, were $5,301,199 and $13,102,157, respectively. There were no realized gain (losses) associated with these 17a-7 transactions during the reporting period.

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended March 31, 2018, were $116,123,205 and $96,097,699, respectively.

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-date. In order to present undistributed net investment income, 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 undistributed net investment income and accumulated net realized loss on investment transactions. For the year ended March 31, 2018, the adjustments were to decrease undistributed net investment income and decrease accumulated net realized loss on investment transactions by $1,880 due to the difference in the treatment of accreting market discount between financial and tax reporting. Net investment income, net realized gain (loss) on investments and net assets were not affected by this change.

For the year ended March 31, 2018, the tax character of dividends paid was $2,784,156 of tax-exempt income and $7,364 of ordinary income. For the year ended March 31, 2017, the tax character of dividends paid was $2,981,516 of tax-exempt income and $30,950 of ordinary income.

As of March 31, 2018, the components of distributable earnings on a tax basis was $185,786 of tax-exempt income (includes timing difference of $105,373 for dividends payable). This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing differences between financial and tax reporting.

46

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of March 31, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$140,324,764	$1,393,316	$(1,152,660)	$240,656

The differences between book basis and tax basis were primarily attributable to deferred losses on wash sales and other book to tax differences.

For federal income tax purposes, the Fund had a capital loss carryforward of approximately $1,264,000 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

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.

6. Capital and Ownership

The Fund offers Class A, Class C, Class Z and Class Q shares. Class A shares are sold with a maximum front-end sales charge of 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 contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class Q 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 $0.001 par value per share.

As of March 31, 2018, Prudential, through its affiliate entities, owned 1,006 Class Q shares of the Fund. At reporting period end, five shareholders of record held 76% of the Fund’s outstanding shares on behalf of multiple beneficial owners.

Prudential Short Duration Muni High Income Fund 47

Notes to Financial Statements (continued)

Transactions in shares of beneficial interest were as follows:

Class A	Shares			Amount
Year ended March 31, 2018:
Shares sold		1,598,580		$	16,271,516
Shares issued in reinvestment of dividends and distributions		51,589			524,300
Shares reacquired		(1,507,946	)		(15,358,050	)
Net increase (decrease) in shares outstanding before conversion		142,223			1,437,766
Shares issued upon conversion from other share class(es)		5,391			54,730
Shares reacquired upon conversion into other share class(es)		(253,091	)		(2,583,514	)
Net increase (decrease) in shares outstanding		(105,477	)	$	(1,091,018	)
Year ended March 31, 2017:
Shares sold		3,507,919		$	36,045,856
Shares issued in reinvestment of dividends and distributions		65,887			670,297
Shares reacquired		(4,898,635	)		(49,910,553	)
Net increase (decrease) in shares outstanding before conversion		(1,324,829	)		(13,194,400	)
Shares reacquired upon conversion into other share class(es)		(662,387	)		(6,671,325	)
Net increase (decrease) in shares outstanding		(1,987,216	)	$	(19,865,725	)
Class C
Year ended March 31, 2018:
Shares sold		587,792		$	5,965,886
Shares issued in reinvestment of dividends and distributions		14,298			145,175
Shares reacquired		(622,083	)		(6,314,755	)
Net increase (decrease) in shares outstanding before conversion		(19,993	)		(203,694	)
Shares reacquired upon conversion into other share class(es)		(88,455	)		(899,678	)
Net increase (decrease) in shares outstanding		(108,448	)	$	(1,103,372	)
Year ended March 31, 2017:
Shares sold		847,561		$	8,654,619
Shares issued in reinvestment of dividends and distributions		14,682			149,225
Shares reacquired		(740,903	)		(7,478,261	)
Net increase (decrease) in shares outstanding before conversion		121,340			1,325,583
Shares reacquired upon conversion into other share class(es)		(51,795	)		(529,971	)
Net increase (decrease) in shares outstanding		69,545		$	795,612

48

Class Z	Shares			Amount
Year ended March 31, 2018:
Shares sold		4,871,549		$	49,670,035
Shares issued in reinvestment of dividends and distributions		97,362			988,923
Shares reacquired		(3,025,094	)		(30,729,078	)
Net increase (decrease) in shares outstanding before conversion		1,943,817			19,929,880
Shares issued upon conversion from other share class(es)		338,789			3,455,139
Shares reacquired upon conversion into other share class(es)		(2,631	)		(26,677	)
Net increase (decrease) in shares outstanding		2,279,975		$	23,358,342
Year ended March 31, 2017:
Shares sold		5,770,326		$	58,890,235
Shares issued in reinvestment of dividends and distributions		84,897			865,442
Shares reacquired		(7,191,294	)		(72,735,979	)
Net increase (decrease) in shares outstanding before conversion		(1,336,071	)		(12,980,302	)
Shares issued upon conversion from other share class(es)		714,416			7,201,296
Net increase (decrease) in shares outstanding		(621,655	)	$	(5,779,006	)
Class Q
Period ended March 31, 2018*:
Shares sold		986		$	10,000
Shares issued in reinvestment of dividends and distributions		20			198
Net increase (decrease) in shares outstanding		1,006		$	10,198

* Commencement of offering was May 25, 2017.

7. Borrowings

The Trust, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be

Prudential Short Duration Muni High Income Fund 49

Notes to Financial Statements (continued)

possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the period ended March 31, 2018.

50

Financial Highlights

Class A Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018(f)			2017(f)			2016(f)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.03			$10.26			$10.17			$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.22			0.21			0.21			0.17
Net realized and unrealized gain (loss) on investment transactions		0.06			(0.23	)		0.10			0.17
Total from investment operations		0.28			(0.02	)		0.31			0.34
Less Dividends and Distributions:
Dividends from net investment income		(0.21	)		(0.21	)		(0.21	)		(0.17	)
Distributions from net realized gains		-			-			(0.01	)		-	(c)
Total dividends and distributions		(0.21	)		(0.21	)		(0.22	)		(0.17	)
Net asset value, end of period		$10.10			$10.03			$10.26			$10.17
Total Return(a):		2.78%			(0.23)%			3.07%			3.43%
Ratios/Supplemental Data:
Net assets, end of period (000)		$40,222			$40,966			$62,314			$9,062
Average net assets (000)		$38,892			$58,677			$32,591			$5,344
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		0.85%			0.85%			0.85%			0.85%	(d)
Expenses before waivers and/or expense reimbursement		1.07%			1.06%			1.11%			1.40%	(d)
Net investment income (loss)		2.14%			2.07%			2.10%			2.21%	(d)
Portfolio turnover rate		71%			70%			19%			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, if any. 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 $0.005.

(d) Annualized.

(e) Not annualized.

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

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 51

Financial Highlights (continued)

Class C Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018(f)			2017(f)			2016(f)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.02			$10.25			$10.16			$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.14			0.14			0.14			0.11
Net realized and unrealized gain (loss) on investment transactions		0.06			(0.24	)		0.10			0.15
Total from investment operations		0.20			(0.10	)		0.24			0.26
Less Dividends and Distributions:
Dividends from net investment income		(0.13	)		(0.13	)		(0.14	)		(0.10	)
Distributions from net realized gains		-			-			(0.01	)		-	(c)
Total dividends and distributions		(0.13	)		(0.13	)		(0.15	)		(0.10	)
Net asset value, end of period		$10.09			$10.02			$10.25			$10.16
Total Return(a):		2.01%			(0.98)%			2.30%			2.69%
Ratios/Supplemental Data:
Net assets, end of period (000)		$20,309			$21,240			$21,023			$11,962
Average net assets (000)		$21,456			$22,803			$15,743			$5,073
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		1.60%			1.60%			1.60%			1.60%	(d)
Expenses before waivers and/or expense reimbursement		1.85%			1.81%			1.86%			2.19%	(d)
Net investment income (loss)		1.39%			1.33%			1.39%			1.43%	(d)
Portfolio turnover rate		71%			70%			19%			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, if any. 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 $0.005.

(d) Annualized.

(e) Not annualized.

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

See Notes to Financial Statements.

52

Class Z Shares
	Year Ended March 31,									May 29, 2014(b) through March 31,
	2018(f)			2017(f)			2016(f)			2015
Per Share Operating Performance:
Net Asset Value, Beginning of Period		$10.02			$10.26			$10.17			$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.24			0.24			0.24			0.19
Net realized and unrealized gain (loss) on investment transactions		0.07			(0.25	)		0.10			0.17
Total from investment operations		0.31			(0.01	)		0.34			0.36
Less Dividends and Distributions:
Dividends from net investment income		(0.23	)		(0.23	)		(0.24	)		(0.19	)
Distributions from net realized gains		-			-			(0.01	)		-	(c)
Total dividends and distributions		(0.23	)		(0.23	)		(0.25	)		(0.19	)
Net asset value, end of period		$10.10			$10.02			$10.26			$10.17
Total Return(a):		3.13%			(0.08)%			3.33%			3.65%
Ratios/Supplemental Data:
Net assets, end of period (000)		$80,839			$57,368			$65,093			$48,254
Average net assets (000)		$74,855			$67,197			$54,951			$38,695
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		0.60%			0.60%			0.60%			0.60%	(d)
Expenses before waivers and/or expense reimbursement		0.82%			0.81%			0.86%			1.23%	(d)
Net investment income (loss)		2.40%			2.33%			2.39%			2.36%	(d)
Portfolio turnover rate		71%			70%			19%			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, if any. 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 $0.005.

(d) Annualized.

(e) Not annualized.

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

See Notes to Financial Statements.

Prudential Short Duration Muni High Income Fund 53

Financial Highlights (continued)

Class Q Shares
	May 25, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$10.14
Income (loss) from investment operations:
Net investment income (loss)		0.21
Net realized and unrealized gain (loss) on investment transactions		(0.05	)
Total from investment operations		0.16
Less Dividends
Dividends from net investment income		(0.20	)
Net asset value, end of period		$10.10
Total Return(c):		1.58%
Ratios/Supplemental Data:
Net assets, end of period (000)		$10
Average net assets (000)		$10
Ratios to average net assets:
Expenses after waivers and/or expense reimbursement		0.60%	(d)
Expenses before waivers and/or expense reimbursement		141.66%	(d)
Net investment income (loss)		2.42%	(d)
Portfolio turnover rate		71%	(e)

(a) Commencement of offering.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Annualized.

(e) Not annualized.

See Notes to Financial Statements.

54

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Prudential Investment Portfolios 12:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Prudential Short Duration Muni High Income Fund (the “Fund”), a series of Prudential Investment Portfolios 12, including the schedule of investments, as of March 31, 2018, 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 related notes (collectively, the “financial statements”) and the financial highlights for each of the years or periods in the four-year period then ended. 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, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the four-year period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2018, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Prudential Retail investment companies since 2003.

New York, New York

May 16, 2018

Prudential Short Duration Muni High Income Fund 55

Income Tax Information (unaudited)

We are advising you that during the fiscal year ended March 31, 2018, 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		Class Q
Tax-Exempt Dividends	$	.207	$	.131	$	.232	$	.199

In January 2019, 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 2018.

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

56

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
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 90	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (65) Board Member Portfolios Overseen: 90	Retired; Managing Director (April 2008-May 2015) 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).	Since July 2008
Linda W. Bynoe (65) Board Member Portfolios Overseen: 90	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 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).	Since March 2005

Prudential Short Duration Muni High Income Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 90	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.	Since September 2013

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Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).	Since September 2017
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 90	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.	Since July 2008
Richard A. Redeker (74) Board Member Portfolios Overseen: 90	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

Prudential Short Duration Muni High Income Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 89	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 90	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (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.	Since July 2003

 ±Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

# Mr. Reid joined the Board effective as of March 1, 2018.

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Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 90	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen:90	Executive Vice President (since June 2009) of PGIM 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, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010

Prudential Short Duration Muni High Income Fund

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Grace C. Torres* (58) Board Member Portfolios Overseen: 89	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential 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 PGIM 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.	Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM 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.

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 (62) 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 PGIM 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 June 2012

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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
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential 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 September 2014
Dino Capasso (43) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Deborah A. Docs (60) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since May 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM 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 May 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Andrew R. French (55) 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 PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since October 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
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
M. Sadiq Peshimam (54) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since February 2006
Peter Parrella (59) 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 June 2007
Lana Lomuti (50) 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 April 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 2015

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

Explanatory Notes to Tables:

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

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ 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 PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, 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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∎ MAIL	∎ TELEPHONE	∎ WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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	PGIM Investments LLC	655 Broad Street Newark, NJ 07102
INVESTMENT SUBADVISER	PGIM Fixed Income	655 Broad Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, 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 no sooner than 15 days after the end of the 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	Q
NASDAQ	PDSAX	PDSCX	PDSZX	PDSQX
CUSIP	744336835	744336827	744336819	744336744

MF222E    

PRUDENTIAL QMA LARGE-CAP CORE EQUITY PLUS FUND

ANNUAL REPORT

MARCH 31, 2018

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Objective: Long-term capital appreciation

Highlights

PRUDENTIAL QMA LARGE-CAP CORE EQUITY PLUS FUND

• QMA uses a proprietary quantitative stock selection model to evaluate over 3,000 stocks in the US market. This model evaluates stocks with regard to quality, earnings expectations, and relative value. The Fund is comprised of long positions in stocks deemed attractive by the model, and takes short positions in unattractive stocks. The result is an active, diversified core portfolio with a net exposure to the market of about 100% (or a beta of about 1).

• Since the Fund’s inception in mid-September of 2017, favoring companies with improving earnings prospects and good quality was particularly valuable in adding excess return over the S&P 500 Index. This benefit was achieved in nearly all sectors.

• During the period, stocks held long in the Fund outperformed the market, and stocks held short underperformed. This was beneficial because the Fund focuses on capturing the spread return between the long and short positions, and this spread was positive over the reporting period.

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 and member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company. ^© 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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PRUDENTIAL FUNDS — UPDATE

The Board of Directors/Trustees for the Fund has approved renaming the Fund’s Class Q shares as Class R6 shares, effective on June 11, 2018. The renaming of Class Q shares as Class R6 shares will not result in any changes to pricing, eligibility, or shareholder rights and obligations. The renamed Class R6 shares will not be exchangeable with Class R6 shares of the Prudential Day One Funds or the Prudential 60/40 Allocation Fund.

- Not part of the Annual Report -

Prudential QMA Large-Cap Core Equity PLUS Fund 3

PRUDENTIAL FUNDS — UPDATE

Effective on or about June 1, 2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R, and Class Z shares, as applicable, will be closed to investments by new group retirement plans, except as discussed below. Existing group retirement plans as of the Effective Date may keep their investments in their current share class and may continue to make additional purchases or exchanges of that class of shares. As of the Effective Date, all new group retirement plans wishing to add the Fund as a new addition to the plan generally will be into one of the available Class Q shares, Class R2 shares, or Class R4 shares of the Fund.

In addition, on or about the Effective Date, the Class R shares of the Fund will be closed to all new investors, except as discussed below. Due to the closing of the Class R shares to new investors, effective on or about the Effective Date new IRA investors may only purchase Class A, Class C, Class Z, or Class Q shares of the Fund, subject to share class eligibility. Following the Effective Date, no new accounts may be established in the Fund’s Class R shares and no Class R shares may be purchased or acquired by any new Class R shareholder, except as discussed below.

	Class A	Class C	Class Z	Class R
Existing Investors (Group Retirement Plans, IRAs, and all other investors)	No Change	No Change	No Change	No Change
New Group Retirement Plans	Closed to group retirement plans wishing to add the share classes as new additions to plan menus on or about June 1, 2018, subject to certain exceptions below
New IRAs	No Change	No Change	No Change	Closed to all new investors on or about June 1, 2018, subject to certain exceptions below
All Other New Investors	No Change	No Change	No Change

- Not part of the Annual Report -

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However, the following new investors may continue to purchase Class A, Class C, Class R, and Class Z shares of the Fund, as applicable:

• Eligible group retirement plans who are exercising their one-time 90-day repurchase privilege in the Fund will be permitted to purchase such share classes.

• Plan participants in a group retirement plan that offers Class A, Class C, Class R, or Class Z shares of the Fund as of the Effective Date will be permitted to purchase such share classes of the Fund, even if the plan participant did not own shares of that class of the Fund as of the Effective Date.

• Certain new group retirement plans will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan has or is actively negotiating a contractual agreement with the Fund’s distributor or service provider to offer such share classes of the Fund prior to or on the Effective Date.

• New group retirement plans that combine with, replace, or are otherwise affiliated with a current plan that invests in such share classes prior to or on the Effective Date will be permitted to purchase such share classes.

The Fund also reserves the right to refuse any purchase order that might disrupt management of the Fund or to otherwise modify the closure policy at any time on a case-by-case basis.

- Not part of the Annual Report -

Prudential QMA Large-Cap Core Equity PLUS Fund 5

Table of Contents

Letter from the President	7
Your Fund’s Performance	8
Growth of a $10,000 Investment	8
Strategy and Performance Overview	12
Fees and Expenses	15
Holdings and Financial Statements	17

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Letter from the President

Dear Shareholder:

We hope you find the annual report for the Prudential QMA Large-Cap Core Equity PLUS Fund informative and useful. The report covers performance for the period from the inception of the Fund on September 19, 2017 through the end of the fiscal year on March 31, 2018.

We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds will be renamed from Prudential to PGIM Funds. Renaming our funds is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name is changing. Your Fund’s management and operation, along with the Fund’s symbols, will remain the same.*

Over the reporting period, global economic growth continued its positive momentum, and central banks gradually tightened monetary policy. The US economy experienced moderate expansion and robust employment levels.

Equity returns were solid, due to healthy earnings expectations and the anticipated impact from tax reform. Global equities, including emerging markets, generally posted strong returns. US equities soared on new regulatory policy and revised corporate tax legislation. However, late in the period volatility arose on jitters over inflation and rising interest rates, tariffs, and a potential trade war.

In bond markets, US Treasury yields rose across both short and longer maturities. European bonds followed and often led during the period. In Japan, the policy stance kept yields considerably lower. US corporate bonds handily outpaced Treasuries. Although most bond market sectors delivered positive returns, a great deal of gains were erased at the end of the period. In March, the Federal Reserve hiked interest rates for the sixth time since 2015, based on confidence in the economy.

Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

Thank you for choosing our family of funds.

Sincerely,

Stuart S. Parker, President

Prudential QMA Large-Cap Core Equity PLUS Fund

May 15, 2018

*Note: The Prudential Day One Funds will not be changing their names.

Prudential QMA Large-Cap Core Equity PLUS Fund 7

Your Fund’s Performance (unaudited)

Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.

	Total Returns as of 3/31/18 (without sales charges)
	Since Inception (%)
Class A	6.00 (9/19/17)
Class C	5.48 (9/19/17)
Class Z	5.87 (9/19/17)
Class Q	6.07 (9/19/17)
S&P 500 Index
	5.84
Lipper EQ Alternative Active Extension Funds Average
	6.10

Growth of a $10,000 Investment

The graph compares a $10,000 investment in the Prudential QMA Large-Cap Core Equity PLUS Fund (Class Z shares) with a similar investment in the S&P 500 Index by portraying the initial account values at the commencement of operations for Class Z shares (September 19, 2017) and the account values at the end of the current fiscal period (March 31, 2018) as measured on a quarterly basis. For purposes of the graph, and unless

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otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted; and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for Class A, Class C, and Class Q shares will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the Fund’s 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: PGIM Investments LLC and Lipper Inc.

Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.

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*	Class Q**
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 net asset value at redemption)	1.00% on sales of $1 million or more made within 12 months of purchase	1.00% on sales made within 12 months of purchase	None	None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)	0.30% (0.25% currently)	1.00%	None	None

*Certain share classes will be generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 4 of this report for more information.

**Class Q shares will be renamed as Class R6 shares effective on June 11, 2018. Please see the “PRUDENTIAL FUNDS—UPDATE” on page 3 of this report for more information.

Prudential QMA Large-Cap Core Equity PLUS Fund 9

Your Fund’s Performance (continued)

Benchmark Definitions

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.

Lipper EQ Alternative Active Extension Funds Average—The Lipper EQ Alternative Active Extension Funds Average (Lipper Average) is an index of funds that combine long- and short-stock selection to invest in a diversified portfolio of U.S. large-cap equities, with a target net exposure of 100% long. Typical strategies vary between 110% long and 10% short to 160% long and 60% short.

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

Presentation of Fund Holdings

Five Largest Holdings—Long Positions* expressed as a percentage of net assets as of 3/31/18 (%)
Apple, Inc., Technology Hardware, Storage & Peripherals	3.3
Microsoft Corp., Software	2.8
JPMorgan Chase & Co., Banks	2.2
Facebook, Inc., Internet Software & Services	2.1
Amazon.com, Inc., Internet & Direct Marketing Retail	1.9

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 3/31/18 (%)
Splunk, Inc., Software	(0.7)
Square, Inc., IT Services	(0.7)
WEX, Inc., IT Services	(0.7)
GoDaddy, Inc., Internet Software & Services	(0.6)
Penumbra, Inc., Health Care Equipment & Supplies	(0.6)

Five Largest Industries expressed as a percentage of net assets as of 3/31/18 (%)
Software	6.1
Oil, Gas & Consumable Fuels	5.8
Banks	5.6
Internet Software & Services	5.0
Semiconductors & Semiconductor Equipment	5.0

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

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*A long position is defined as buying shares of stock with the expectation of profiting when the share price appreciates.

**A short position is defined as borrowing shares and then selling those shares with the expectation of profiting when the share price depreciates and those shares can be bought back at a cheaper price. Short positions in the Fund are expressed as a negative percentage of net assets.

Prudential QMA Large-Cap Core Equity PLUS Fund 11

Strategy and Performance Overview

How did the Fund perform?

The Prudential QMA Large-Cap Core Equity PLUS Fund’s inception was 9/19/2017. From that date to March 31, 2018, the Fund’s Class Z shares returned 5.87%, which was above the S&P 500 Index’s return of 5.84%. In addition, the Fund underperformed the Lipper EQ Alternative Active Extension Average of 6.10%.

What were market conditions?

• Equity returns were strong during the reporting period, as global gross domestic production (GDP) advanced at a healthy pace, long-term interest rates remained close to historical lows, and central banks tightened monetary policy prudently and gradually in light of subdued inflation.

• In the US, solid economic fundamentals included stable and moderate economic expansion, robust employment, accelerating corporate profit growth, accumulating cash on company balance sheets, and rising consumer and business confidence. Global equities, including emerging markets, generally posted strong returns.

• Reduced regulatory activity and pressures, as well as revised corporate tax legislation likewise contributed to market performance.

• Market volatility late in the period reflected concerns that inflation expectations would rise and monetary tightening would ensue and that the likely stimulative effect of tax legislation could be weakened by the negative effect of possible new tariffs and other trade restrictions.

What worked?

• QMA’s quantitative stock selection model evaluates companies based on relative value, growth, and quality criteria. QMA buys stocks of companies that have good value and quality along with solid growth prospects, and QMA avoids or short companies with the opposite characteristics. During the reporting period, buying stocks with good quality and growth and shorting stocks with poor quality and deteriorating growth was a profitable strategy across most sectors.

• The Fund’s long positions outperformed the market, and its short positions underperformed. This was a benefit because the Fund focuses on capturing the spread return between its long and short positions. Since longs outperformed shorts, there was a positive spread return.

• Risk control through diversification served the Fund well over the reporting period. QMA holds hundreds of stocks long and short, which limits any one company’s stock having a big negative impact on performance. In addition, QMA keeps sector and industry allocations similar to the S&P 500 Index, which further reduces risk.

12 Visit our website at pgiminvestments.com

What didn’t work?

• QMA favors stocks that are inexpensive relative to industry peers and shorts expensive stocks. Over the full reporting period, this relative value strategy was not profitable. In general, stocks that were more expensive based on measures like forward price-to-earnings, price-to-book, and price-to-sales ratios lagged those that were more reasonably priced.

• QMA’s stock selection in the Healthcare sector lagged the S&P 500 Index, driven primarily by short positions in companies that had strong returns. QMA avoided these companies because, despite their prospects for reasonable growth, they were very expensive relative to peers and exhibited poor quality. Those expensive stocks continued to do well through the performance period, and the Fund held several of them short, which had a negative impact on performance.

The percentage points shown in the tables identify each security’s positive or negative contribution to the Fund’s return, which is the sum of all contributions by individual holdings.

Top Contributors (%)		Top Detractors (%)
Amazon.com, Inc.	1.45	Celgene Corp.	–0.38
Intel Corp.	1.46	Mallinckrodt PLC	–0.27
Microsoft Corp.	2.40	Splunk, Inc.	–0.25
Apple, Inc.	3.88	Nutrisystem, Inc.	–0.19
JPMorgan Chase & Co.	2.14	WEX, Inc.	–0.19

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

There were no derivatives used in this fund during the reporting period.

Current outlook

• At eight years, the current US economic expansion is one of the longest in history. At this time, QMA does not see warning signs that a recession is imminent. This bodes well for the US stock market, which can continue to advance on solid earnings growth. QMA does, however, believe the extremely low volatility environment will not persist as various risks, including geopolitical, could disrupt the positive market backdrop. Within equities, the enthusiasm for fast-growing stocks at any price has left an imbalance—and an opportunity—for value stocks to rebound. The timing of such a reversal is notoriously hard to predict.

• Faced with increased uncertainty, the Fund is well positioned—with a balance of both growth and value stocks—to navigate such an environment. This diversification helps ensure stock selection will be effective in different market environments. The Fund also focuses on managing unintended exposures in the portfolio, which can decrease macro

Prudential QMA Large-Cap Core Equity PLUS Fund 13

Strategy and Performance Overview (continued)

exposures and mitigate the impact of external shocks. Overall, uncertainty can produce attractive opportunities for active investors. When uncertainty increases, prices are more likely to become dislocated from fundamentals. The Fund is well placed to exploit such opportunities while simultaneously managing the associated increased risks.

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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 held through the six-month period ended March 31, 2018. 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 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

Prudential QMA Large-Cap Core Equity PLUS Fund 15

Fees and Expenses (continued)

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  QMA Large-Cap Core Equity PLUS Fund		Beginning  Account Value October 1, 2017		Ending  Account Value March 31, 2018		Annualized Expense Ratio Based on the Six-Month Period			Expenses  Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,055.70		1.72	%	$	8.82
	Hypothetical	$	1,000.00	$	1,016.36		1.72	%	$	8.65
Class C	Actual	$	1,000.00	$	1,050.60		2.43	%	$	12.42
	Hypothetical	$	1,000.00	$	1,012.81		2.43	%	$	12.19
Class Z	Actual	$	1,000.00	$	1,053.40		1.42	%	$	7.27
	Hypothetical	$	1,000.00	$	1,017.85		1.42	%	$	7.14
Class Q	Actual	$	1,000.00	$	1,055.40		1.42	%	$	7.28
	Hypothetical	$	1,000.00	$	1,017.85		1.42	%	$	7.14

* 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, 2018, and divided by the 365 days in the Fund’s fiscal year ended March 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.

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Schedule of Investments

as of March 31, 2018

Description	Shares		Value
LONG-TERM INVESTMENTS    129.0%
COMMON STOCKS    128.3%
Aerospace & Defense    2.5%
Arconic, Inc.		1,300	$	29,952
Boeing Co. (The)		150		49,182
Ducommun, Inc.*		2,400		72,912
Harris Corp.		850		137,088
Lockheed Martin Corp.		540		182,482
Spirit AeroSystems Holdings, Inc. (Class A Stock)		800		66,960
				538,576
Air Freight & Logistics    0.1%
FedEx Corp.		50		12,006
Airlines    0.7%
Hawaiian Holdings, Inc.		1,800		69,660
Southwest Airlines Co.		1,500		85,920
				155,580
Auto Components    0.5%
BorgWarner, Inc.		2,200		110,506
Tenneco, Inc.		100		5,487
				115,993
Automobiles    0.7%
General Motors Co.		1,900		69,046
Thor Industries, Inc.		710		81,771
				150,817
Banks    5.9%
Bank of America Corp.(u)		13,100		392,869
BankUnited, Inc.		300		11,994
Citigroup, Inc.(u)		3,900		263,250
JPMorgan Chase & Co.(u)		4,300		472,871
Wells Fargo & Co.		2,400		125,784
				1,266,768
Beverages    1.6%
Coca-Cola Co. (The)		2,300		99,889
PepsiCo, Inc.(u)		2,230		243,405
				343,294

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 17

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Biotechnology    4.6%
AbbVie, Inc.(u)		2,600	$	246,090
Alexion Pharmaceuticals, Inc.*		180		20,063
Amgen, Inc.(u)		1,220		207,985
Celgene Corp.*		1,660		148,089
Eagle Pharmaceuticals, Inc.*		1,500		79,035
Emergent BioSolutions, Inc.*		400		21,060
Enanta Pharmaceuticals, Inc.*		100		8,091
Gilead Sciences, Inc.		2,500		188,475
Halozyme Therapeutics, Inc.*		1,400		27,426
MiMedx Group, Inc.*		3,800		26,486
				972,800
Building Products    0.5%
Builders FirstSource, Inc.*		4,900		97,216
Universal Forest Products, Inc.		540		17,523
				114,739
Capital Markets    3.0%
Affiliated Managers Group, Inc.		230		43,603
Ameriprise Financial, Inc.		720		106,517
BGC Partners, Inc. (Class A Stock)		900		12,105
Invesco Ltd.		1,500		48,015
Morgan Stanley		1,700		91,732
Raymond James Financial, Inc.		400		35,764
S&P Global, Inc.		890		170,044
Stifel Financial Corp.		200		11,846
T. Rowe Price Group, Inc.		1,200		129,564
				649,190
Chemicals    2.5%
Air Products & Chemicals, Inc.		100		15,903
Chemours Co. (The)		1,900		92,549
Ingevity Corp.*		1,700		125,273
Koppers Holdings, Inc.*		2,400		98,640
LyondellBasell Industries NV (Class A Stock)		1,300		137,384
Westlake Chemical Corp.		560		62,244
				531,993
Commercial Services & Supplies    0.9%
Herman Miller, Inc.		2,500		79,875
Quad/Graphics, Inc.		4,400		111,540
				191,415

See Notes to Financial Statements.

18

Description		Shares		Value
COMMON STOCKS (Continued)
Communications Equipment    1.2%
ARRIS International PLC*			2,100	$	55,797
Cisco Systems, Inc.			3,500		150,115
F5 Networks, Inc.*			120		17,353
Juniper Networks, Inc.			300		7,299
Motorola Solutions, Inc.			200		21,060
					251,624
Construction & Engineering    0.6%
EMCOR Group, Inc.			1,200		93,516
Valmont Industries, Inc.			270		39,501
					133,017
Construction Materials    0.1%
United States Lime & Minerals, Inc.			200		14,636
Consumer Finance    1.1%
Capital One Financial Corp.			1,700		162,894
Navient Corp.			3,700		48,544
OneMain Holdings, Inc.*			800		23,952
					235,390
Containers & Packaging    0.4%
Greif, Inc. (Class A Stock)			1,300		67,925
Owens-Illinois, Inc.*			1,200		25,992
					93,917
Distributors    0.4%
LKQ Corp.*			2,400		91,080
Diversified Financial Services    1.6%
Berkshire Hathaway, Inc. (Class B Stock)*(u)			1,490		297,225
Cannae Holdings, Inc.*			1,600		30,176
Leucadia National Corp.			600		13,638
	��
					341,039
Diversified Telecommunication Services    2.7%
AT&T, Inc.(u)			7,800		278,070
Verizon Communications, Inc.(u)			6,000		286,920
					564,990
Electric Utilities    1.1%
Exelon Corp.			3,900		152,139

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 19

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Electric Utilities (cont’d.)
NextEra Energy, Inc.		220	$	35,933
PPL Corp.		1,400		39,606
				227,678
Electrical Equipment    0.6%
AMETEK, Inc.		1,700		129,149
Electronic Equipment, Instruments & Components    0.4%
Avnet, Inc.		400		16,704
CDW Corp.		300		21,093
IPG Photonics Corp.*		150		35,007
Trimble, Inc.*		400		14,352
				87,156
Energy Equipment & Services    0.8%
Halliburton Co.		3,200		150,208
Keane Group, Inc.*		500		7,400
Superior Energy Services, Inc.*		1,200		10,116
				167,724
Equity Real Estate Investment Trusts (REITs)    3.0%
Apple Hospitality REIT, Inc.		1,300		22,841
Brixmor Property Group, Inc.		4,800		73,200
Chesapeake Lodging Trust		1,800		50,058
CoreCivic, Inc.		600		11,712
DDR Corp.		8,400		61,572
DiamondRock Hospitality Co.		2,000		20,880
Franklin Street Properties Corp.		9,700		81,577
Gramercy Property Trust		700		15,211
HCP, Inc.		3,100		72,013
Hospitality Properties Trust		3,000		76,020
Kimco Realty Corp.		2,500		36,000
Spirit Realty Capital, Inc.		11,900		92,344
WP Carey, Inc.		300		18,597
				632,025
Food & Staples Retailing    2.0%
Kroger Co. (The)		4,900		117,306
Performance Food Group Co.*		3,000		89,550
Walmart, Inc.(u)		2,400		213,528
				420,384

See Notes to Financial Statements.

20

Description	Shares		Value
COMMON STOCKS (Continued)
Food Products    1.1%
Conagra Brands, Inc.		400	$	14,752
J.M. Smucker Co. (The)		830		102,928
Tyson Foods, Inc. (Class A Stock)		1,700		124,423
				242,103
Gas Utilities    0.1%
UGI Corp.		400		17,768
Health Care Equipment & Supplies    6.2%
Abbott Laboratories		2,900		173,768
Align Technology, Inc.*		510		128,076
Baxter International, Inc.		1,100		71,544
Boston Scientific Corp.*		3,900		106,548
Danaher Corp.		1,700		166,447
DENTSPLY SIRONA, Inc.		800		40,248
Edwards Lifesciences Corp.*		780		108,826
Hill-Rom Holdings, Inc.		200		17,400
IDEXX Laboratories, Inc.*		450		86,125
Inogen, Inc.*		180		22,111
Intuitive Surgical, Inc.*		30		12,385
Masimo Corp.*		700		61,565
Medtronic PLC		2,400		192,528
Meridian Bioscience, Inc.		6,800		96,560
STERIS PLC		500		46,680
				1,330,811
Health Care Providers & Services    4.2%
Anthem, Inc.		700		153,790
Centene Corp.*		1,200		128,244
Express Scripts Holding Co.*		2,300		158,884
HCA Healthcare, Inc.		300		29,100
Humana, Inc.		130		34,948
MEDNAX, Inc.*		800		44,504
UnitedHealth Group, Inc.(u)		1,410		301,740
WellCare Health Plans, Inc.*		260		50,344
				901,554
Health Care Technology    0.7%
athenahealth, Inc.*		400		57,212
Cotiviti Holdings, Inc.*		2,800		96,432
				153,644

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 21

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Hotels, Restaurants & Leisure    2.4%
Hilton Grand Vacations, Inc.*		2,700	$	116,154
Hilton Worldwide Holdings, Inc.		1,600		126,016
Las Vegas Sands Corp.		800		57,520
McDonald’s Corp.(u)		1,350		211,113
				510,803
Household Durables    0.2%
New Home Co., Inc. (The)*		3,100		34,348
Household Products    0.8%
Kimberly-Clark Corp.		930		102,421
Procter & Gamble Co. (The)		800		63,424
				165,845
Independent Power & Renewable Electricity Producers    1.1%
AES Corp.		9,400		106,878
NRG Energy, Inc.		4,500		137,385
				244,263
Industrial Conglomerates    2.0%
3M Co.(u)		950		208,544
General Electric Co.		600		8,088
Honeywell International, Inc.(u)		1,420		205,204
				421,836
Insurance    2.0%
Allstate Corp. (The)		1,300		123,240
American Equity Investment Life Holding Co.		600		17,616
American Financial Group, Inc.		160		17,955
Genworth Financial, Inc. (Class A Stock)*		1,500		4,245
National General Holdings Corp.		5,600		136,136
Old Republic International Corp.		700		15,015
Unum Group		2,200		104,742
				418,949
Internet & Direct Marketing Retail    3.3%
1-800-Flowers.com, Inc. (Class A Stock)*		4,700		55,460
Amazon.com, Inc.*(u)		283		409,597
FTD Cos., Inc.*		2,100		7,644
Groupon, Inc.*		9,000		39,060
Liberty Interactive Corp. QVC Group (Class A Stock)*		1,900		47,823
Netflix, Inc.*		330		97,466

See Notes to Financial Statements.

22

Description	Shares		Value
COMMON STOCKS (Continued)
Internet & Direct Marketing Retail (cont’d.)
Nutrisystem, Inc.		1,600	$	43,120
				700,170
Internet Software & Services    7.2%
Akamai Technologies, Inc.*		1,200		85,176
Alphabet, Inc. (Class A Stock)*(u)		343		355,739
Alphabet, Inc. (Class C Stock)*(u)		382		394,144
Etsy, Inc.*		5,800		162,748
Facebook, Inc. (Class A Stock)*(u)		2,830		452,205
XO Group, Inc.*		4,100		85,075
				1,535,087
IT Services    4.9%
Accenture PLC (Class A Stock)(u)		1,290		198,015
Automatic Data Processing, Inc.		1,400		158,872
Booz Allen Hamilton Holding Corp.		1,300		50,336
CACI International, Inc. (Class A Stock)*		110		16,649
Cognizant Technology Solutions Corp. (Class A Stock)		2,000		161,000
Fiserv, Inc.*		120		8,557
MAXIMUS, Inc.		300		20,022
Science Applications International Corp.		300		23,640
Total System Services, Inc.		800		69,008
Visa, Inc. (Class A Stock)(u)		2,640		315,797
Western Union Co. (The)		900		17,307
				1,039,203
Leisure Products    0.0%
Vista Outdoor, Inc.*		500		8,160
Life Sciences Tools & Services    0.7%
Bruker Corp.		200		5,984
Illumina, Inc.*		610		144,216
				150,200
Machinery    3.6%
Caterpillar, Inc.		1,270		187,172
Cummins, Inc.		830		134,535
Dover Corp.		500		49,110
Fortive Corp.		500		38,760
Global Brass & Copper Holdings, Inc.		3,100		103,695
Illinois Tool Works, Inc.		560		87,730
Mueller Industries, Inc.		2,900		75,864

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 23

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Machinery (cont’d.)
Oshkosh Corp.		1,300	$	100,451
				777,317
Media    1.8%
Comcast Corp. (Class A Stock)		3,400		116,178
Discovery Communications, Inc. (Class C Stock)*		1,100		21,472
News Corp. (Class A Stock)		2,200		34,760
Saga Communications, Inc. (Class A Stock)		400		14,900
Sinclair Broadcast Group, Inc. (Class A Stock)		2,400		75,120
TEGNA, Inc.		6,400		72,896
Twenty-First Century Fox, Inc. (Class A Stock)		1,200		44,028
				379,354
Metals & Mining    1.1%
Commercial Metals Co.		700		14,322
Freeport-McMoRan, Inc.*		8,700		152,859
Southern Copper Corp. (Peru)		400		21,672
Steel Dynamics, Inc.		1,200		53,064
				241,917
Mortgage Real Estate Investment Trusts (REITs)    0.5%
Ladder Capital Corp.		500		7,540
Western Asset Mortgage Capital Corp.		9,400		91,086
				98,626
Multi-Utilities    0.6%
CenterPoint Energy, Inc.		600		16,440
MDU Resources Group, Inc.		3,600		101,376
				117,816
Multiline Retail    1.2%
Kohl’s Corp.		2,000		131,020
Macy’s, Inc.		4,300		127,882
				258,902
Oil, Gas & Consumable Fuels    8.2%
Anadarko Petroleum Corp.		2,600		157,066
Chevron Corp.		1,030		117,461
ConocoPhillips		3,200		189,728
CVR Energy, Inc.		900		27,198
Devon Energy Corp.		3,300		104,907
Exxon Mobil Corp.(u)		3,000		223,830

See Notes to Financial Statements.

24

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
Kinder Morgan, Inc.		5,500	$	82,830
Marathon Oil Corp.		2,900		46,777
Marathon Petroleum Corp.		2,300		168,153
Murphy Oil Corp.		1,200		31,008
Newfield Exploration Co.*		2,200		53,724
Noble Energy, Inc.		3,300		99,990
Par Pacific Holdings, Inc.*		4,300		73,831
Phillips 66		1,600		153,472
Pioneer Natural Resources Co.		300		51,534
Valero Energy Corp.		1,800		166,986
				1,748,495
Paper & Forest Products    0.4%
Louisiana-Pacific Corp.		2,600		74,802
Personal Products    0.3%
Estee Lauder Cos., Inc. (The) (Class A Stock)		470		70,368
Pharmaceuticals    4.0%
Allergan PLC		80		13,463
Corcept Therapeutics, Inc.*		3,700		60,865
Endo International PLC*		8,800		52,272
Johnson & Johnson(u)		2,070		265,271
Mallinckrodt PLC*		2,900		41,992
Merck & Co., Inc.		1,600		87,152
Perrigo Co. PLC		800		66,672
Pfizer, Inc.		2,900		102,921
Zoetis, Inc.		1,900		158,669
				849,277
Professional Services    0.8%
Insperity, Inc.		2,300		159,965
Real Estate Management & Development    1.2%
CBRE Group, Inc. (Class A Stock)*		3,000		141,660
RMR Group, Inc. (The) (Class A Stock)		1,700		118,915
				260,575
Road & Rail    1.0%
Norfolk Southern Corp.		1,050		142,569
Old Dominion Freight Line, Inc.		360		52,909

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 25

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Road & Rail (cont’d.)
Union Pacific Corp.		60	$	8,066
				203,544
Semiconductors & Semiconductor Equipment    6.4%
Advanced Energy Industries, Inc.*		600		38,340
Applied Materials, Inc.		2,500		139,025
Broadcom Ltd.		780		183,807
Entegris, Inc.		200		6,960
Intel Corp.(u)		6,400		333,312
KLA-Tencor Corp.		130		14,171
Micron Technology, Inc.*		3,400		177,276
MKS Instruments, Inc.		1,100		127,215
NVIDIA Corp.(u)		1,060		245,485
ON Semiconductor Corp.*		1,200		29,352
Skyworks Solutions, Inc.		460		46,120
Texas Instruments, Inc.		200		20,778
				1,361,841
Software    8.7%
Activision Blizzard, Inc.		1,700		114,682
Adobe Systems, Inc.*(u)		1,130		244,170
American Software, Inc. (Class A Stock)		3,300		42,900
ANSYS, Inc.*		250		39,173
CA, Inc.		700		23,730
Cadence Design Systems, Inc.*		1,000		36,770
Dell Technologies, Inc. (Class V Stock)*		1,500		109,815
Fortinet, Inc.*		2,600		139,308
Intuit, Inc.		910		157,748
Microsoft Corp.(u)		6,500		593,255
Oracle Corp.		3,100		141,825
Progress Software Corp.		400		15,380
salesforce.com, Inc.*(u)		1,700		197,710
				1,856,466
Specialty Retail    2.9%
Dick’s Sporting Goods, Inc.		300		10,515
Foot Locker, Inc.		2,900		132,066
Genesco, Inc.*		400		16,240
Group 1 Automotive, Inc.		100		6,534
Home Depot, Inc. (The)		250		44,560
Murphy USA, Inc.*		900		65,520
RH*		800		76,224
Ross Stores, Inc.		1,800		140,364

See Notes to Financial Statements.

26

Description	Shares		Value
COMMON STOCKS (Continued)
Specialty Retail (cont’d.)
Signet Jewelers Ltd.		1,200	$	46,224
Tilly’s, Inc. (Class A Stock)		7,000		79,100
				617,347
Technology Hardware, Storage & Peripherals    5.1%
Apple, Inc.(u)		4,200		704,676
Hewlett Packard Enterprise Co.		7,400		129,796
HP, Inc.		4,300		94,256
Western Digital Corp.		1,600		147,632
				1,076,360
Textiles, Apparel & Luxury Goods    1.6%
Lululemon Athletica, Inc.*		1,700		151,504
Skechers U.S.A., Inc. (Class A Stock)*		3,500		136,115
Wolverine World Wide, Inc.		1,600		46,240
				333,859
Thrifts & Mortgage Finance    0.5%
Radian Group, Inc.		5,100		97,104
Tobacco    1.0%
Altria Group, Inc.		3,300		205,656
Philip Morris International, Inc.		150		14,910
				220,566
Trading Companies & Distributors    1.0%
Applied Industrial Technologies, Inc.		100		7,290
GMS, Inc.*		400		12,224
MSC Industrial Direct Co., Inc. (Class A Stock)		100		9,171
Rush Enterprises, Inc. (Class B Stock)*		700		28,266
Veritiv Corp.*		3,200		125,440
WESCO International, Inc.*		500		31,025
				213,416
TOTAL COMMON STOCKS (cost $26,078,675)				27,325,641
EXCHANGE TRADED FUND    0.7%
SPDR S&P 500 ETF Trust (cost $141,752)		550		144,733
TOTAL LONG-TERM INVESTMENTS (cost $26,220,427)				27,470,374

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 27

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
SHORT-TERM INVESTMENT    0.1%
AFFILIATED MUTUAL FUND
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund (cost $27,836)(w)		27,836	$	27,836
TOTAL INVESTMENTS, BEFORE SECURITIES SOLD SHORT    129.1% (cost $26,248,263)				27,498,210
SECURITIES SOLD SHORT    (29.3)%
COMMON STOCKS
Aerospace & Defense    (0.4)%
Aerojet Rocketdyne Holdings, Inc.*		500		(13,985	)
Aerovironment, Inc.*		200		(9,102	)
Cubic Corp.		900		(57,240	)
Kratos Defense & Security Solutions, Inc.*		700		(7,203	)
				(87,530	)
Auto Components    (0.1)%
Visteon Corp.*		140		(15,434	)
Banks    (0.3)%
First Republic Bank		300		(27,783	)
Prosperity Bancshares, Inc.		400		(29,052	)
				(56,835	)
Biotechnology    (2.7)%
Agios Pharmaceuticals, Inc.*		300		(24,534	)
Amicus Therapeutics, Inc.*		5,700		(85,728	)
Arena Pharmaceuticals, Inc.*		800		(31,600	)
Array BioPharma, Inc.*		1,200		(19,584	)
BioCryst Pharmaceuticals, Inc.*		3,400		(16,218	)
Bluebird Bio, Inc.*		510		(87,082	)
Clovis Oncology, Inc.*		200		(10,560	)
Heron Therapeutics, Inc.*		1,900		(52,440	)
Insmed, Inc.*		2,600		(58,552	)
Ironwood Pharmaceuticals, Inc.*		1,300		(20,059	)
Progenics Pharmaceuticals, Inc.*		2,400		(17,904	)
Sage Therapeutics, Inc.*		100		(16,107	)
Spark Therapeutics, Inc.*		1,200		(79,908	)
Spectrum Pharmaceuticals, Inc.*		2,900		(46,661	)
				(566,937	)

See Notes to Financial Statements.

28

Description	Shares		Value
COMMON STOCKS (Continued)
Chemicals    (0.3)%
Ashland Global Holdings, Inc.		1,000	$	(69,790	)
Commercial Services & Supplies    (0.5)%
ABM Industries, Inc.		600		(20,088	)
Covanta Holding Corp.		1,000		(14,500	)
Healthcare Services Group, Inc.		500		(21,740	)
Rollins, Inc.		700		(35,721	)
Team, Inc.*		1,000		(13,750	)
				(105,799	)
Communications Equipment    (0.5)%
Finisar Corp.*		3,000		(47,430	)
Infinera Corp.*		1,600		(17,376	)
ViaSat, Inc.*		600		(39,432	)
				(104,238	)
Construction & Engineering    (0.1)%
Dycom Industries, Inc.*		60		(6,458	)
NV5 Global, Inc.*		400		(22,300	)
				(28,758	)
Construction Materials    (0.2)%
Martin Marietta Materials, Inc.		220		(45,606	)
Containers & Packaging    (0.2)%
Ball Corp.		1,300		(51,623	)
Diversified Consumer Services    (0.5)%
Adtalem Global Education, Inc.*		600		(28,530	)
Chegg, Inc.*		3,700		(76,442	)
				(104,972	)
Diversified Financial Services    (0.3)%
Voya Financial, Inc.		1,100		(55,550	)
Electric Utilities    (0.1)%
Alliant Energy Corp.		500		(20,430	)
Electronic Equipment, Instruments & Components    (0.2)%
Fabrinet (Thailand)*		300		(9,414	)
II-VI, Inc.*		400		(16,360	)
Rogers Corp.*		60		(7,172	)
				(32,946	)

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 29

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Energy Equipment & Services    (0.7)%
Baker Hughes a GE Co.		3,700	$	(102,749	)
Patterson-UTI Energy, Inc.		2,900		(50,779	)
				(153,528	)
Equity Real Estate Investment Trusts (REITs)    (1.0)%
CareTrust REIT, Inc.		700		(9,380	)
CoreSite Realty Corp.		100		(10,026	)
CyrusOne, Inc.		1,300		(66,573	)
National Storage Affiliates Trust		1,500		(37,620	)
Public Storage		120		(24,047	)
Realty Income Corp.		1,400		(72,422	)
				(220,068	)
Health Care Equipment & Supplies    (2.8)%
AxoGen, Inc.*		1,100		(40,150	)
DexCom, Inc.*		1,600		(118,656	)
Glaukos Corp.*		1,200		(36,996	)
Insulet Corp.*		200		(17,336	)
Nevro Corp.*		1,000		(86,670	)
NuVasive, Inc.*		1,800		(93,978	)
Oxford Immunotec Global PLC*		900		(11,205	)
Penumbra, Inc.*		1,100		(127,215	)
Quidel Corp.*		1,200		(62,172	)
				(594,378	)
Health Care Providers & Services    (0.8)%
Acadia Healthcare Co., Inc.*		400		(15,672	)
BioTelemetry, Inc.*		700		(21,735	)
Capital Senior Living Corp.*		1,000		(10,750	)
Community Health Systems, Inc.*		4,000		(15,840	)
Cross Country Healthcare, Inc.*		1,300		(14,443	)
Diplomat Pharmacy, Inc.*		400		(8,060	)
Tivity Health, Inc.*		1,400		(55,510	)
US Physical Therapy, Inc.		400		(32,520	)
				(174,530	)
Health Care Technology    (0.5)%
Evolent Health, Inc. (Class A Stock)*		2,300		(32,775	)
Teladoc, Inc.*		2,000		(80,600	)
				(113,375	)

See Notes to Financial Statements.

30

Description	Shares		Value
COMMON STOCKS (Continued)
Hotels, Restaurants & Leisure    (1.3)%
Belmond Ltd. (United Kingdom) (Class A Stock)*		3,500	$	(39,025	)
Eldorado Resorts, Inc.*		300		(9,900	)
Lindblad Expeditions Holdings, Inc.*		1,600		(16,432	)
Papa John’s International, Inc.		500		(28,650	)
Six Flags Entertainment Corp.		1,700		(105,842	)
Vail Resorts, Inc.		280		(62,076	)
Wingstop, Inc.		200		(9,446	)
				(271,371	)
Household Durables    (0.4)%
iRobot Corp.*		900		(57,771	)
Leggett & Platt, Inc.		200		(8,872	)
Universal Electronics, Inc.*		500		(26,025	)
				(92,668	)
Independent Power & Renewable Electricity Producers    (0.4)%
Ormat Technologies, Inc.		900		(50,742	)
Pattern Energy Group, Inc. (Class A Stock)		1,500		(25,935	)
				(76,677	)
Insurance    (0.0)%
eHealth, Inc.*		600		(8,586	)
Internet & Direct Marketing Retail    (0.2)%
Expedia Group, Inc.		370		(40,852	)
Liberty Expedia Holdings, Inc. (Class A Stock)*		200		(7,856	)
				(48,708	)
Internet Software & Services    (2.2)%
2U, Inc.*		900		(75,627	)
Alteryx, Inc. (Class A Stock)*		500		(17,070	)
Box, Inc. (Class A Stock)*		3,700		(76,035	)
ChannelAdvisor Corp.*		900		(8,190	)
Cornerstone OnDemand, Inc.*		800		(31,288	)
Coupa Software, Inc.*		300		(13,686	)
GoDaddy, Inc. (Class A Stock)*		2,200		(135,124	)
GrubHub, Inc.*		300		(30,441	)
GTT Communications, Inc.*		300		(17,010	)
Instructure, Inc.*		1,000		(42,150	)
Okta, Inc.*		500		(19,925	)
				(466,546	)

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 31

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
IT Services    (1.8)%
Gartner, Inc.*		790	$	(92,920	)
Square, Inc. (Class A Stock)*		2,900		(142,680	)
WEX, Inc.*		900		(140,958	)
				(376,558	)
Life Sciences Tools & Services    (0.3)%
Codexis, Inc.*		1,700		(18,700	)
PerkinElmer, Inc.		300		(22,716	)
Syneos Health, Inc.*		900		(31,950	)
				(73,366	)
Machinery    (1.2)%
Chart Industries, Inc.*		500		(29,515	)
CIRCOR International, Inc.		600		(25,596	)
John Bean Technologies Corp.		110		(12,474	)
Snap-on, Inc.		220		(32,459	)
Tennant Co.		600		(40,620	)
Trinity Industries, Inc.		400		(13,052	)
Wabtec Corp.		1,300		(105,820	)
				(259,536	)
Metals & Mining    (0.1)%
Coeur Mining, Inc.*		1,000		(8,000	)
Haynes International, Inc.		400		(14,844	)
				(22,844	)
Mortgage Real Estate Investment Trusts (REITs)    (0.1)%
Apollo Commercial Real Estate Finance, Inc.		700		(12,586	)
Multi-Utilities    (0.2)%
Sempra Energy		300		(33,366	)
Oil, Gas & Consumable Fuels    (2.4)%
Callon Petroleum Co.*		7,100		(94,004	)
Centennial Resource Development, Inc. (Class A Stock)*		2,300		(42,205	)
EQT Corp.		1,700		(80,767	)
Extraction Oil & Gas, Inc.*		1,300		(14,898	)
Golar LNG Ltd. (Bermuda)		500		(13,680	)
Green Plains, Inc.		1,400		(23,520	)
Halcon Resources Corp.*		5,200		(25,324	)
Parsley Energy, Inc. (Class A Stock)*		1,800		(52,182	)
PDC Energy, Inc.*		1,200		(58,836	)

See Notes to Financial Statements.

32

Description	Shares		Value
COMMON STOCKS (Continued)
Oil, Gas & Consumable Fuels (cont’d.)
Ring Energy, Inc.*		1,900	$	(27,265	)
SemGroup Corp. (Class A Stock)		1,500		(32,100	)
SRC Energy, Inc.*		1,900		(17,917	)
Stone Energy Corp.*		700		(25,970	)
				(508,668	)
Pharmaceuticals    (0.1)%
Impax Laboratories, Inc.*		1,500		(29,175	)
Professional Services    (1.1)%
IHS Markit Ltd.*		1,800		(86,832	)
Nielsen Holdings PLC		2,900		(92,191	)
WageWorks, Inc.*		1,400		(63,280	)
				(242,303	)
Real Estate Management & Development    (0.6)%
Howard Hughes Corp. (The)*		840		(116,869	)
Semiconductors & Semiconductor Equipment    (1.4)%
Ambarella, Inc.*		900		(44,091	)
Cree, Inc.*		700		(28,217	)
Ichor Holdings Ltd.*		900		(21,789	)
Inphi Corp.*		1,500		(45,150	)
Integrated Device Technology, Inc.*		600		(18,336	)
MACOM Technology Solutions Holdings, Inc.*		2,200		(36,520	)
MaxLinear, Inc.*		2,300		(52,325	)
Microchip Technology, Inc.		200		(18,272	)
PDF Solutions, Inc.*		1,100		(12,826	)
Veeco Instruments, Inc.*		1,700		(28,900	)
				(306,426	)
Software    (2.6)%
Ebix, Inc.		900		(67,050	)
Ellie Mae, Inc.*		200		(18,388	)
Everbridge, Inc.*		200		(7,320	)
FireEye, Inc.*		1,500		(25,395	)
Model N, Inc.*		1,000		(18,050	)
Proofpoint, Inc.*		920		(104,558	)
Splunk, Inc.*		1,500		(147,585	)
Tableau Software, Inc. (Class A Stock)*		300		(24,246	)
Varonis Systems, Inc.*		300		(18,150	)
Workday, Inc. (Class A Stock)*		940		(119,483	)
				(550,225	)

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 33

Schedule of Investments (continued)

as of March 31, 2018

Description	Shares		Value
COMMON STOCKS (Continued)
Specialty Retail    (0.4)%
Camping World Holdings, Inc. (Class A Stock)		900	$	(29,025	)
Floor & Decor Holdings, Inc. (Class A Stock)*		900		(46,908	)
				(75,933	)
Technology Hardware, Storage & Peripherals    (0.2)%
Electronics For Imaging, Inc.*		1,600		(43,728	)
Textiles, Apparel & Luxury Goods    (0.0)%
Hanesbrands, Inc.		400		(7,368	)
Trading Companies & Distributors    (0.1)%
SiteOne Landscape Supply, Inc.*		300		(23,112	)
TOTAL SECURITIES SOLD SHORT (proceeds received $6,076,951)				(6,248,946	)
TOTAL INVESTMENTS, NET OF SECURITIES SOLD SHORT    99.8% (cost $20,171,312)				21,249,264
Other assets in excess of liabilities    0.2%				42,641
NET ASSETS    100.0%			$	21,291,905

The following abbreviations are used in the annual report:

ETF—Exchange Traded Fund

LIBOR—London Interbank Offered Rate

REIT(s)—Real Estate Investment Trust(s)

SPDR—Standard & Poor’s Depository Receipts

* Non-income producing security.

(u) Represents security, or a portion thereof, segregated as collateral for short sales.

(w) PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund.

Fair Value Measurements:

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—unadjusted 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.

34

The following is a summary of the inputs used as of March 31, 2018 in valuing such portfolio securities:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Aerospace & Defense	$	538,576	$	—	$	—
Air Freight & Logistics		12,006		—		—
Airlines		155,580		—		—
Auto Components		115,993		—		—
Automobiles		150,817		—		—
Banks		1,266,768		—		—
Beverages		343,294		—		—
Biotechnology		972,800		—		—
Building Products		114,739		—		—
Capital Markets		649,190		—		—
Chemicals		531,993		—		—
Commercial Services & Supplies		191,415		—		—
Communications Equipment		251,624		—		—
Construction & Engineering		133,017		—		—
Construction Materials		14,636		—		—
Consumer Finance		235,390		—		—
Containers & Packaging		93,917		—		—
Distributors		91,080		—		—
Diversified Financial Services		341,039		—		—
Diversified Telecommunication Services		564,990		—		—
Electric Utilities		227,678		—		—
Electrical Equipment		129,149		—		—
Electronic Equipment, Instruments & Components		87,156		—		—
Energy Equipment & Services		167,724		—		—
Equity Real Estate Investment Trusts (REITs)		632,025		—		—
Food & Staples Retailing		420,384		—		—
Food Products		242,103		—		—
Gas Utilities		17,768		—		—
Health Care Equipment & Supplies		1,330,811		—		—
Health Care Providers & Services		901,554		—		—
Health Care Technology		153,644		—		—
Hotels, Restaurants & Leisure		510,803		—		—
Household Durables		34,348		—		—
Household Products		165,845		—		—
Independent Power & Renewable Electricity Producers		244,263		—		—
Industrial Conglomerates		421,836		—		—
Insurance		418,949		—		—
Internet & Direct Marketing Retail		700,170		—		—
Internet Software & Services		1,535,087		—		—
IT Services		1,039,203		—		—

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 35

Schedule of Investments (continued)

as of March 31, 2018

	Level 1			Level 2		Level 3
Investments in Securities (continued)
Common Stocks (continued)
Leisure Products	$	8,160		$	—	$	—
Life Sciences Tools & Services		150,200			—		—
Machinery		777,317			—		—
Media		379,354			—		—
Metals & Mining		241,917			—		—
Mortgage Real Estate Investment Trusts (REITs)		98,626			—		—
Multi-Utilities		117,816			—		—
Multiline Retail		258,902			—		—
Oil, Gas & Consumable Fuels		1,748,495			—		—
Paper & Forest Products		74,802			—		—
Personal Products		70,368			—		—
Pharmaceuticals		849,277			—		—
Professional Services		159,965			—		—
Real Estate Management & Development		260,575			—		—
Road & Rail		203,544			—		—
Semiconductors & Semiconductor Equipment		1,361,841			—		—
Software		1,856,466			—		—
Specialty Retail		617,347			—		—
Technology Hardware, Storage & Peripherals		1,076,360			—		—
Textiles, Apparel & Luxury Goods		333,859			—		—
Thrifts & Mortgage Finance		97,104			—		—
Tobacco		220,566			—		—
Trading Companies & Distributors		213,416			—		—
Exchange Traded Fund		144,733			—		—
Affiliated Mutual Fund		27,836			—		—
Common Stocks—Short
Aerospace & Defense		(87,530	)		—		—
Auto Components		(15,434	)		—		—
Banks		(56,835	)		—		—
Biotechnology		(566,937	)		—		—
Chemicals		(69,790	)		—		—
Commercial Services & Supplies		(105,799	)		—		—
Communications Equipment		(104,238	)		—		—
Construction & Engineering		(28,758	)		—		—
Construction Materials		(45,606	)		—		—
Containers & Packaging		(51,623	)		—		—
Diversified Consumer Services		(104,972	)		—		—
Diversified Financial Services		(55,550	)		—		—
Electric Utilities		(20,430	)		—		—
Electronic Equipment, Instruments & Components		(32,946	)		—		—
Energy Equipment & Services		(153,528	)		—		—
Equity Real Estate Investment Trusts (REITs)		(220,068	)		—		—
Health Care Equipment & Supplies		(594,378	)		—		—

See Notes to Financial Statements.

36

	Level 1			Level 2		Level 3
Investments in Securities (continued)
Common Stocks—Short (continued)
Health Care Providers & Services	$	(174,530	)	$	—	$	—
Health Care Technology		(113,375	)		—		—
Hotels, Restaurants & Leisure		(271,371	)		—		—
Household Durables		(92,668	)		—		—
Independent Power & Renewable Electricity Producers		(76,677	)		—		—
Insurance		(8,586	)		—		—
Internet & Direct Marketing Retail		(48,708	)		—		—
Internet Software & Services		(466,546	)		—		—
IT Services		(376,558	)		—		—
Life Sciences Tools & Services		(73,366	)		—		—
Machinery		(259,536	)		—		—
Metals & Mining		(22,844	)		—		—
Mortgage Real Estate Investment Trusts (REITs)		(12,586	)		—		—
Multi-Utilities		(33,366	)		—		—
Oil, Gas & Consumable Fuels		(508,668	)		—		—
Pharmaceuticals		(29,175	)		—		—
Professional Services		(242,303	)		—		—
Real Estate Management & Development		(116,869	)		—		—
Semiconductors & Semiconductor Equipment		(306,426	)		—		—
Software		(550,225	)		—		—
Specialty Retail		(75,933	)		—		—
Technology Hardware, Storage & Peripherals		(43,728	)		—		—
Textiles, Apparel & Luxury Goods		(7,368	)		—		—
Trading Companies & Distributors		(23,112	)		—		—
Total	$	21,249,264		$	—	$	—

During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.

Industry Classification:

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of March 31, 2018 were as follows (unaudited):

Software	8.7	%
Oil, Gas & Consumable Fuels	8.2
Internet Software & Services	7.2
Semiconductors & Semiconductor Equipment	6.4
Health Care Equipment & Supplies	6.2
Banks	5.9
Technology Hardware, Storage & Peripherals	5.1
IT Services	4.9
Biotechnology	4.6
Health Care Providers & Services	4.2	%
Pharmaceuticals	4.0
Machinery	3.6
Internet & Direct Marketing Retail	3.3
Capital Markets	3.0
Equity Real Estate Investment Trusts (REITs)	3.0
Specialty Retail	2.9
Diversified Telecommunication Services	2.7
Aerospace & Defense	2.5

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 37

Schedule of Investments (continued)

as of March 31, 2018

Industry (cont’d.)
Chemicals	2.5	%
Hotels, Restaurants & Leisure	2.4
Industrial Conglomerates	2.0
Food & Staples Retailing	2.0
Insurance	2.0
Media	1.8
Beverages	1.6
Diversified Financial Services	1.6
Textiles, Apparel & Luxury Goods	1.6
Real Estate Management & Development	1.2
Multiline Retail	1.2
Communications Equipment	1.2
Independent Power & Renewable Electricity Producers	1.1
Food Products	1.1
Metals & Mining	1.1
Consumer Finance	1.1
Electric Utilities	1.1
Tobacco	1.0
Trading Companies & Distributors	1.0
Road & Rail	1.0
Commercial Services & Supplies	0.9
Energy Equipment & Services	0.8
Household Products	0.8
Professional Services	0.8
Airlines	0.7
Health Care Technology	0.7
Automobiles	0.7
Life Sciences Tools & Services	0.7
Exchange Traded Fund	0.7
Construction & Engineering	0.6
Electrical Equipment	0.6
Multi-Utilities	0.6
Auto Components	0.5
Building Products	0.5
Mortgage Real Estate Investment Trusts (REITs)	0.5
Thrifts & Mortgage Finance	0.5
Containers & Packaging	0.4
Distributors	0.4
Electronic Equipment, Instruments & Components	0.4
Paper & Forest Products	0.4
Personal Products	0.3
Household Durables	0.2
Affiliated Mutual Fund	0.1
Gas Utilities	0.1
Construction Materials	0.1
Air Freight & Logistics	0.1
Leisure Products	0.0	*
Securities Sold Short
Textiles, Apparel & Luxury Goods	(0.0	)%*
Insurance	(0.0	)*
Mortgage Real Estate Investment Trusts (REITs)	(0.1	)
Auto Components	(0.1	)
Electric Utilities	(0.1	)
Metals & Mining	(0.1	)
Trading Companies & Distributors	(0.1	)
Construction & Engineering	(0.1	)
Pharmaceuticals	(0.1	)
Electronic Equipment, Instruments & Components	(0.2	)
Multi-Utilities	(0.2	)
Technology Hardware, Storage & Peripherals	(0.2	)
Construction Materials	(0.2	)
Internet & Direct Marketing Retail	(0.2	)
Containers & Packaging	(0.2	)
Diversified Financial Services	(0.3	)
Banks	(0.3	)
Chemicals	(0.3	)
Life Sciences Tools & Services	(0.3	)
Specialty Retail	(0.4	)
Independent Power & Renewable Electricity Producers	(0.4	)
Aerospace & Defense	(0.4	)
Household Durables	(0.4	)
Communications Equipment	(0.5	)
Diversified Consumer Services	(0.5	)
Commercial Services & Supplies	(0.5	)
Health Care Technology	(0.5	)
Real Estate Management & Development	(0.6	)
Energy Equipment & Services	(0.7	)
Health Care Providers & Services	(0.8	)
Equity Real Estate Investment Trusts (REITs)	(1.0	)
Professional Services	(1.1	)
Machinery	(1.2	)
Hotels, Restaurants & Leisure	(1.3	)
Semiconductors & Semiconductor Equipment	(1.4	)
IT Services	(1.8	)
Internet Software & Services	(2.2	)
Oil, Gas & Consumable Fuels	(2.4	)
Software	(2.6	)
Biotechnology	(2.7	)
Health Care Equipment & Supplies	(2.8	)
	99.8
Other assets in excess of liabilities	0.2
	100.0	%

* Less than +/- 0.05%

See Notes to Financial Statements.

38

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.

Offsetting of financial instrument/transaction assets and liabilities:

Description	Counterparty	Gross Market Value of Recognized Assets/(Liabilities)			Collateral Pledged/ (Received)(1)		Net Amount
Securities Sold Short	Scotia Capital (USA), Inc.	$	(6,248,946	)	$	6,248,946	$	—

(1) Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions.

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 39

Statement of Assets & Liabilities

as of March 31, 2018

Assets
Investments at value:
Unaffiliated investments (cost $26,220,427)	$	27,470,374
Affiliated investments (cost $27,836)		27,836
Cash		6,399
Deposit with Broker for securities sold short		11,906
Due from Manager		27,901
Dividends receivable		27,588
Receivable for Fund shares sold		1,159
Prepaid expenses		450
Total assets		27,573,613
Liabilities
Securities sold short, at value (proceeds received $6,076,951)		6,248,946
Accrued expenses and other liabilities		24,943
Dividends and interest payable on securities sold short		7,781
Affiliated transfer agent fee payable		20
Distribution fee payable		18
Total liabilities		6,281,708
Net Assets	$	21,291,905
Net assets were comprised of:
Shares of beneficial interest, at par	$	2,018
Paid-in capital in excess of par		20,161,806
		20,163,824
Undistributed net investment income		24,654
Accumulated net realized gain on investment transactions		25,475
Net unrealized appreciation on investments		1,077,952
Net assets, March 31, 2018	$	21,291,905

See Notes to Financial Statements.

40

Class A
Net asset value and redemption price per share,
($40,251 ÷ 3,816 shares of beneficial interest issued and outstanding)	$	10.55
Maximum sales charge (5.50% of offering price)		0.61
Maximum offering price to public	$	11.16
Class C
Net asset value, offering price and redemption price per share,
($10,551 ÷ 1,003 shares of beneficial interest issued and outstanding)	$	10.52
Class Z
Net asset value, offering price and redemption price per share,
($14,676 ÷ 1,394 shares of beneficial interest issued and outstanding)	$	10.53
Class Q
Net asset value, offering price and redemption price per share,
($21,226,427 ÷ 2,011,771 shares of beneficial interest issued and outstanding)	$	10.55

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 41

Statement of Operations

Period* Ended March 31, 2018

Net Investment Income (Loss)
Income
Unaffiliated dividend income (net of foreign withholding taxes of $669)	$	236,952
Affiliated dividend income		1,479
Interest income		584
Total income		239,015
Expenses
Management fee		90,814
Distribution fee(a)		83
Registration fees(a)		85,788
Custodian and accounting fees		29,576
Dividend expense on short sales		27,028
Broker fees and expenses on short sales		26,616
Audit fee		22,100
Shareholders’ reports		22,000
Legal fees and expenses		18,601
Trustees’ fees		6,080
Transfer agent’s fees and expenses (including affiliated expense of $60)(a)		153
Miscellaneous		8,999
Total expenses		337,838
Less: Fee waiver and/or expense reimbursement(a)		(176,270	)
Net expenses		161,568
Net investment income (loss)		77,447
Realized And Unrealized Gain (Loss) On Investments
Net realized gain (loss) on:
Investment transactions		414,579
Short sales transactions		(353,726	)
		60,853
Net change in unrealized appreciation (depreciation) on:
Investments		1,249,947
Short sales		(171,995	)
		1,077,952
Net gain (loss) on investment transactions		1,138,805
Net Increase (Decrease) In Net Assets Resulting From Operations	$	1,216,252

* Commencement of operations was September 19, 2017.

(a) Class specific expenses and waivers were as follows (see Note 1):

	Class A			Class C			Class Z			Class Q
Distribution fee		27			56			—			—
Registration fees		21,447			21,447			21,447			21,447
Transfer agent’s fees and expenses		38			33			39			43
Fee waiver and/or expense reimbursement		(21,567	)		(21,524	)		(21,538	)		(111,641	)

See Notes to Financial Statements.

42

Statements of Changes in Net Assets

	September 19, 2017* through March 31,2018
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$	77,447
Net realized gain (loss) on investment transactions		60,853
Net change in unrealized appreciation (depreciation) on investments		1,077,952
Net increase (decrease) in net assets resulting from operations		1,216,252
Dividends and Distributions
Dividends from net investment income
Class A		(34	)
Class C		(11	)
Class Z		(41	)
Class Q		(81,901	)
		(81,987	)
Distributions from net realized gains
Class A		(17	)
Class C		(17	)
Class Z		(17	)
Class Q		(33,945	)
		(33,996	)
Fund share transactions
Net proceeds from shares sold		20,075,653
Net asset value of shares issued in reinvestment of dividends and distributions		115,983
Net increase (decrease) in net assets from share transactions		20,191,636
Total increase (decrease)		21,291,905
Net Assets:
Beginning of period		—
End of period(a)	$	21,291,905
(a) Includes undistributed/(distributions in excess of) net investment income of:	$	24,654

* Commencement of operations.

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 43

Statement of Cash Flows

Period* Ended March 31, 2018

Increase (Decrease) in Cash
Cash flows provided from operating activities:
Dividends and interest received	$	211,427
Operating expenses paid		(110,844	)
Dividends and interest paid on securities sold short		(19,247	)
Broker fees and expense on short sales		(26,616	)
Purchases of long-term portfolio investments		(35,986,280	)
Net purchases and sales of short-term portfolio investments		(27,836	)
Proceeds from disposition of long-term portfolio investments		10,180,432
Net payments to cover securities sold short		(4,454,351	)
Net proceeds received from securities sold short		10,177,576
Increase in deposit with Broker for securities sold short		(11,906	)
Increase in prepaid expenses		(450	)
Net cash used in operating activities		(20,068,095	)
Cash flows from financing activities:
Proceeds from fund share sold		20,074,494
Net cash provided by financing activities		20,074,494
Net change in cash		6,399
Cash at beginning of period		—
Cash at end of period	$	6,399
Reconciliation of Net Increase in Net Assets to Net Cash Used in Operating Activities:
Net increase in net assets resulting from operations	$	1,216,252
Increase in investments		(20,110,459	)
Net realized gain on investments		(60,853	)
Net unrealized appreciation on investments and short sales		(1,077,952	)
Increase in deposit with Broker for securities sold short		(11,906	)
Increase in due from Manager		(27,901	)
Increase in dividends receivable		(27,588	)
Increase in prepaid expenses		(450	)
Increase in dividends and interest payable on securities sold short		7,781
Increase in accrued expenses and other liabilities		24,943
Increase in affiliated transfer agent fee payable		20
Increase in distribution fee payable		18
Total Adjustments		(21,284,347	)
Net cash used in operating activities	$	(20,068,095	)

* Commencement of operations was September 19, 2017.

See Notes to Financial Statements.

44

Notes to Financial Statements

Prudential Investment Portfolios 12 (the “Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust was established as a Delaware business trust on October 24, 1997. The Trust currently consists of the following five series: Prudential QMA Large-Cap Core Equity PLUS Fund, Prudential QMA Long-Short Equity Fund and Prudential Short Duration Muni High Income Fund, each of which are diversified funds and Prudential Global Real Estate Fund and Prudential US Real Estate Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the Prudential QMA Large-Cap Core Equity PLUS Fund (the “Fund”). The Fund commenced investment operations on September 19, 2017.

The investment objective of the Fund is to seek long-term capital appreciation.

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 and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.

Prudential QMA Large-Cap Core Equity PLUS Fund 45

Notes to Financial Statements (continued)

For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

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 Schedule of Investments.

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are 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.

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.

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 Manager 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 unaffiliated mutual funds to calculate their net asset values.

46

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Trustees of the Trust. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

Short Sales: 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 must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The 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. Dividends declared on open short positions are recorded on the ex-date and the interest payable is accrued daily on fixed income securities sold short, both of which are recorded as an expense. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received.

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

Master Netting Arrangements: The Fund is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser 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. In addition to master netting arrangements, 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 was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.

Prudential QMA Large-Cap Core Equity PLUS Fund 47

Notes to Financial Statements (continued)

Equity and Mortgage Real Estate Investment Trusts (REITs): The Fund invests in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the equity REITs.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (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.

Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursement.

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, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects to pay dividends from net investment income and distributions from net realized capital 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-date. Permanent book/tax differences relating to income and gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

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

48

2. Agreements

The Trust, on behalf of the Fund, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Fund. PGIM Investments administers the corporate affairs of the Fund and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Fund’s custodian (the Custodian), and the Fund’s transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Fund. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Fund, including, but not limited to, the custodian, transfer agent, and accounting agent.

PGIM Investments has entered into a subadvisory agreement with Quantitative Management Associates, LLC (“QMA”). The subadvisory agreement provides that QMA will furnish investment advisory services in connection with the management of the Fund. In connection therewith, QMA is obligated to keep certain books and records of the Fund. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly at an annual rate of 0.80% of average daily net assets up to and including $1 billion; 0.78% of average daily net assets between $1 billion and $3 billion; 0.76% of average daily net assets between $3 billion and $5 billion; 0.75% of average daily net assets between $5 billion and $10 billion; 0.74% of average daily net assets over $10 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.80% for the period ended March 31, 2018.

PGIM Investments has contractually agreed, through July 31, 2019, to limit Total annual Fund operating expenses after fee waivers and/or reimbursements to 1.20% of average daily net assets for Class A shares, 1.95% of average daily net assets for Class C shares, 0.95% of average daily net assets for Class Z shares, and 0.95% of average daily net assets for Class Q shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The fee waiver and/or expense reimbursement exceeded the management fee for the period ended March 31, 2018.

Prudential QMA Large-Cap Core Equity PLUS Fund 49

Notes to Financial Statements (continued)

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

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and Class C shares, respectively.

PIMS has advised the Fund that it has not received any front-end sales charges resulting from sales of Class A shares during the period ended March 31, 2018. From these fees, if any, PIMS paid such sales charges to broker-dealers, which in turn pays commissions to sales persons and incurred other distribution costs.

PIMS has advised the Fund that for the period ended March 31, 2018, it did not receive any contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders.

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

3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliated of PGIM Investments 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 may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board. For the reporting period ended March 31, 2018 no such transactions were entered into by the Fund.

The Fund may invest its overnight sweep cash in the Prudential Core Ultra Short Bond Fund (the “Core Fund”), a series of Prudential Investment Portfolios 2, registered under the

50

1940 Act and managed by PGIM Investments. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.

4. Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the period ended March 31, 2018, were $40,440,731 and $20,342,521, respectively.

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-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, 2018, the adjustments were to increase undistributed net investment income by $29,194, decrease accumulated net realized gain on investment transactions by $1,382 and decrease paid-in capital in excess of par by $27,812 due to non-deductible offering costs and other book to tax differences. Net investment income, net realized gain on investment transactions and net assets were not affected by this change.

For the period ended March 31, 2018, the tax character of dividends paid by the Fund was $115,983 of ordinary income.

As of March 31, 2018, the accumulated undistributed earnings on a tax basis were $48,920 of ordinary income and $1,630 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, 2018 were as follows:

Tax Basis	Gross Unrealized Appreciation	Gross Unrealized Depreciation	Net Unrealized Appreciation
$20,171,733	$2,670,196	$(1,592,665)	$1,077,531

The differences between book basis and tax basis were primarily attributable to deferred losses on wash sales.

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

Prudential QMA Large-Cap Core Equity PLUS Fund 51

Notes to Financial Statements (continued)

Fund’s 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.

6. Capital and Ownership

The Fund offers Class A, Class C, Class Z and Class Q shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class Q 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 $0.001 par value per share.

As of March 31, 2018 , Prudential, through its affiliate entities, owned 1,005 Class A shares, 1,003 Class C shares, 1,005 Class Z shares and 2,011,771 Class Q shares of the Fund. At reporting period end, Prudential owned 99.6% of the Fund’s outstanding shares.

Transactions in shares of beneficial interest were as follows:

Class A	Shares		Amount
Period ended March 31, 2018*:
Shares sold		3,811	$	41,337
Shares issued in reinvestment of dividends and distributions		5		51
Net increase (decrease) in shares outstanding		3,816	$	41,388
Class C
Period ended March 31, 2018*:
Shares sold		1,000	$	10,000
Shares issued in reinvestment of dividends and distributions		3		28
Net increase (decrease) in shares outstanding		1,003	$	10,028

52

Class Z	Shares		Amount
Period ended March 31, 2018*:
Shares sold		1,389	$	14,316
Shares issued in reinvestment of dividends and distributions		5		58
Net increase (decrease) in shares outstanding		1,394	$	14,374
Class Q
Period ended March 31, 2018*:
Shares sold		2,001,000	$	20,010,000
Shares issued in reinvestment of dividends and distributions		10,771		115,846
Net increase (decrease) in shares outstanding		2,011,771	$	20,125,846

* Commencement of operations was September 19, 2017.

7. Borrowings

The Trust, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Fund’s portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. Prior to October 5, 2017, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of 0.15% of the unused portion of the SCA. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.

Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.

The Fund did not utilize the SCA during the period ended March 31, 2018.

Prudential QMA Large-Cap Core Equity PLUS Fund 53

Financial Highlights

Class A Shares
	September 19, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.02
Net realized and unrealized gain (loss) on investment transactions		0.58
Total from investment operations		0.60
Less Dividends and Distributions
Dividends from investment income		(0.03	)
Distributions from net realized gains		(0.02	)
Total dividends and distributions		(0.05	)
Net asset value, end of period		$10.55
Total Return(c):		6.00%
Ratios/Supplemental Data:
Net assets, end of period (000)		$40
Average net assets (000)		$20
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		1.72%	(e)
Expenses before waivers and/or expense reimbursement(g)		203.54%	(e)
Net investment income (loss)		0.43%	(e)
Portfolio turnover rate		60%	(f)

(a) Commencement of operations.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying funds 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 0.52% for the period ended March 31, 2018.

See Notes to Financial Statements.

54

Class C Shares
	September 19, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.02	)
Net realized and unrealized gain (loss) on investment transactions		0.57
Total from investment operations		0.55
Less Dividends and Distributions
Dividends from investment income		(0.01	)
Distributions from net realized gains		(0.02	)
Total dividends and distributions		(0.03	)
Net asset value, end of period		$10.52
Total Return(c):		5.48%
Ratios/Supplemental Data:
Net assets, end of period (000)		$11
Average net assets (000)		$11
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		2.43%	(e)
Expenses before waivers and/or expense reimbursement(g)		383.62%	(e)
Net investment income (loss)		(0.32)%	(e)
Portfolio turnover rate		60%	(f)

(a) Commencement of operations.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying funds 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 0.48% for the period ended March 31, 2018.

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 55

Financial Highlights (continued)

Class Z Shares
	September 19, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.04
Net realized and unrealized gain (loss) on investment transactions		0.55
Total from investment operations		0.59
Less Dividends and Distributions
Dividends from investment income		(0.04	)
Distributions from net realized gains		(0.02	)
Total dividends and distributions		(0.06	)
Net asset value, end of period		$10.53
Total Return(c):		5.87%
Ratios/Supplemental Data:
Net assets, end of period (000)		$15
Average net assets (000)		$12
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		1.42%	(e)
Expenses before waivers and/or expense reimbursement(g)		341.63%	(e)
Net investment income (loss)		0.71%	(e)
Portfolio turnover rate		60%	(f)

(a) Commencement of operations.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying funds 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 0.47% for the period ended March 31, 2018.

See Notes to Financial Statements.

56

Class Q Shares
	September 19, 2017(a) through March 31, 2018
Per Share Operating Performance(b):
Net Asset Value, Beginning of Period		$10.00
Income (loss) from investment operations:
Net investment income (loss)		0.04
Net realized and unrealized gain (loss) on investment transactions		0.57
Total from investment operations		0.61
Less Dividends and Distributions
Dividends from investment income		(0.04	)
Distributions from net realized gains		(0.02	)
Total dividends and distributions		(0.06	)
Net asset value, end of period		$10.55
Total Return(c):		6.07%
Ratios/Supplemental Data:
Net assets, end of period (000)		$21,226
Average net assets (000)		$21,315
Ratios to average net assets(d):
Expenses after waivers and/or expense reimbursement(g)		1.42%	(e)
Expenses before waivers and/or expense reimbursement(g)		2.41%	(e)
Net investment income (loss)		0.68%	(e)
Portfolio turnover rate		60%	(f)

(a) Commencement of operations.

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

(c) 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.

(d) Does not include expenses of the underlying funds 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 0.47% for the period ended March 31, 2018.

See Notes to Financial Statements.

Prudential QMA Large-Cap Core Equity PLUS Fund 57

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 QMA Large-Cap Core Equity Plus Fund (the “Fund”), a series of Prudential Investment Portfolios 12, including the schedule of investments, as of March 31, 2018, and the related statement of operations, statement of changes in net assets, statement of cash flows, notes (collectively, the “financial statements”) and financial highlights for the period September 19, 2017 (commencement of operations) through March 31, 2018. 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, 2018, and the results of its operations, the changes in its net assets, cash flows, and its financial highlights for the period described above, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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 are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2018, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures when replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more Prudential Retail investment companies since 2003.

New York, New York

May 15, 2018

58

Federal Income Tax Information (unaudited)

For the period ended March 31, 2018, the Fund reports the maximum amount allowable under Section 854 of the Internal Revenue Code, but not less than, the following percentages of the ordinary income dividends paid as 1) qualified dividend income (QDI); 2) eligible for corporate dividend received deduction (DRD):

	QDI			DRD
Prudential QMA Large-Cap Core Equity PLUS Fund		100.00	%		100.00	%

In January 2019 you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of the distributions received by you in calendar year 2018.

Prudential QMA Large-Cap Core Equity PLUS Fund 59

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
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Ellen S. Alberding (60) Board Member Portfolios Overseen: 90	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (since 2009); Trustee, Loyola University (since 2018).	None.	Since September 2013
Kevin J. Bannon (65) Board Member Portfolios Overseen: 90	Retired; Managing Director (April 2008-May 2015) 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).	Since July 2008
Linda W. Bynoe (65) Board Member Portfolios Overseen: 90	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 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).	Since March 2005

Prudential QMA Large-Cap Core Equity PLUS Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Barry H. Evans (57)± Board Member Portfolios Overseen: 89	Retired; formerly President (2005 – 2016), Global Chief Operating Officer (2014–2016), Chief Investment Officer – Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.	Director, Manulife Trust Company (since 2011); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).	Since September 2017
Keith F. Hartstein (61) Board Member & Independent Chair Portfolios Overseen: 90	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.	Since September 2013

Visit our website at pgiminvestments.com

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Laurie Simon Hodrick (55)± Board Member Portfolios Overseen: 89	A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).	Independent Director, Corporate Capital Trust (since April 2017) (a business development company).	Since September 2017
Michael S. Hyland, CFA (72) Board Member Portfolios Overseen: 90	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.	Since July 2008
Richard A. Redeker (74) Board Member Portfolios Overseen: 90	Retired Mutual Fund Senior Executive (50 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.	Since October 1993

Prudential QMA Large-Cap Core Equity PLUS Fund

Independent Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Brian K. Reid (56)# Board Member Portfolios Overseen: 89	Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).	None.	Since March 2018
Stephen G. Stoneburn (74) Board Member Portfolios Overseen: 90	Chairman (since July 2011), President and Chief Executive Officer (since June 1996) of Frontline Medical Communications (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.	Since July 2003

 ±Mr. Evans and Ms. Hodrick joined the Board effective as of September 1, 2017.

# Mr. Reid joined the Board effective as of March 1, 2018.

Visit our website at pgiminvestments.com

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Stuart S. Parker (55) Board Member & President Portfolios Overseen: 90	President of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).	None.	Since January 2012
Scott E. Benjamin (44) Board Member & Vice President Portfolios Overseen:90	Executive Vice President (since June 2009) of PGIM 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, PGIM Investments (since February 2006); formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).	None.	Since March 2010

Prudential QMA Large-Cap Core Equity PLUS Fund

Interested Board Members
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held During Past Five Years	Length of Board Service
Grace C. Torres* (58) Board Member Portfolios Overseen: 89	Retired; formerly Treasurer and Principal Financial and Accounting Officer of the Prudential 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 PGIM 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.	Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.	Since November 2014

* Note: Prior to her retirement in 2014, Ms. Torres was employed by PGIM 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.

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 (62) 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 PGIM 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 June 2012

Visit our website at pgiminvestments.com

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Chad A. Earnst (42) Chief Compliance Officer	Chief Compliance Officer (September 2014-Present) of PGIM Investments LLC; Chief Compliance Officer (September 2014-Present) of the Prudential 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 September 2014
Dino Capasso (43) Deputy Chief Compliance Officer	Vice President and Deputy Chief Compliance Officer (June 2017-Present) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company LLC.	Since March 2018
Deborah A. Docs (60) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PGIM Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.	Since May 2004
Jonathan D. Shain (59) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM 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 May 2005
Claudia DiGiacomo (43) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PGIM Investments LLC (since December 2005); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).	Since December 2005
Andrew R. French (55) 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 PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.	Since October 2006

Prudential QMA Large-Cap Core Equity PLUS Fund

Fund Officers(a)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years	Length of Service as Fund Officer
Charles H. Smith (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2015) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2016); formerly Global Head of Economic Sanctions Compliance at AIG Property Casualty (February 2007 – December 2014); Assistant Attorney General at the New York State Attorney General’s Office, Division of Public Advocacy. (August 1998 —January 2007).	Since January 2017
M. Sadiq Peshimam (54) Treasurer and Principal Financial and Accounting Officer	Vice President (since 2005) of PGIM Investments LLC; formerly Assistant Treasurer of funds in the Prudential Mutual Fund Complex (2006-2014).	Since February 2006
Peter Parrella (59) 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 June 2007
Lana Lomuti (50) 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 April 2014
Linda McMullin (56) Assistant Treasurer	Vice President (since 2011) and Director (2008-2011) within Prudential Mutual Fund Administration.	Since April 2014
Kelly A. Coyne (49) Assistant Treasurer	Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010).	Since March 2015

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

Explanatory Notes to Tables:

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

∎ Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

∎ 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 PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the Prudential Mutual Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, 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.

Visit our website at pgiminvestments.com

∎ MAIL	∎ TELEPHONE	∎ WEBSITE
655 Broad Street Newark, NJ 07102	(800) 225-1852	www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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	PGIM Investments LLC	655 Broad 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	655 Broad Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon	225 Liberty 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.pgiminvestments.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.pgiminvestments.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 QMA Large-Cap Core Equity PLUS Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 QMA LARGE-CAP CORE EQUITY PLUS FUND

SHARE CLASS	A	C	Z	Q
NASDAQ	PQMAX	PQMCX	PQMZX	PQMQX
CUSIP	744336728	744336710	744336686	744336694

MF237E    

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. Kevin J. Bannon, 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, 2018 and March 31, 2017, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $121,811 and $98,724 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. In addition to the above, $35,000 of audit fees billed by KPMG were paid by The Bank of New York Mellon Corporation and/or its affiliates for the fiscal year ended March 31, 2018.

(b) Audit-Related Fees

For the fiscal years ended March 31, 2018 and March 31, 2017: none.

(c) Tax Fees

For the fiscal years ended March 31, 2018 and March 31, 2017: none.

(d) All Other Fees

For the fiscal years ended March 31, 2018 and March 31, 2017: 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 the 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 non-audit services will not adversely affect the independence of the independent accountants. Such proposed non-audit services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

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

Audit Services

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

Ø Annual Fund financial statement audits

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

Ø SEC and regulatory filings and consents

Audit-related Services

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

Ø Accounting consultations

Ø Fund merger support services

Ø Agreed Upon Procedure Reports

Ø Attestation Reports

Ø Other Internal Control Reports

Individual audit-related services that fall within one of these categories (except for fund merger support services) and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated). Fees related to fund merger support services are subject to a separate authorized pre-approval by the Audit Committee with fees determined on a per occurrence and merger complexity basis.

Tax Services

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

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

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

◾ Sales and use tax compliance

Ø Timely RIC qualification reviews

Ø Tax distribution analysis and planning

Ø Tax authority examination services

Ø Tax appeals support services

Ø Accounting methods studies

Ø Fund merger support services

Ø Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated).

Other Non-Audit Services

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

Proscribed Services

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

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

Ø Financial information systems design and implementation

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

Ø Actuarial services

Ø Internal audit outsourcing services

Ø Management functions or human resources

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

Ø Legal services and expert services unrelated to the audit

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

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

Certain non-audit services provided to PGIM Investments 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 $30,000. 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 PGIM Investments 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 PGIM Investments and its affiliates.

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

For the fiscal years ended March 31, 2018 and March 31, 2017: 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

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 ended March 31, 2018 and March 31, 2017 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 16, 2018

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 16, 2018
By:	/s/ M. Sadiq Peshimam
	M. Sadiq Peshimam
	Treasurer and Principal Financial and Accounting Officer
Date:	May 16, 2018