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: | 811-09999 | |
Exact name of registrant as specified in charter: | Prudential Investment Portfolios 2 | |
(This Form N-CSR relates solely to the Registrant’s: PGIM Core Short-Term Bond Fund, PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund.) | ||
Address of principal executive offices: | 655 Broad Street, 17th Floor | |
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Andrew R. French | |
655 Broad Street, 17th Floor | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 1/31/2021 | |
Date of reporting period: | 7/31/2020 |
Item 1 – Reports to Stockholders
PGIM CORE SHORT-TERM BOND FUND
PGIM CORE ULTRA SHORT BOND FUND
PGIM INSTITUTIONAL MONEY MARKET FUND
SEMIANNUAL REPORT
JULY 31, 2020
3 | ||||
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7 | ||||
9 | ||||
11 | ||||
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The information about the Funds’ portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of July 31, 2020 were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PGIM is a Prudential Financial company. © 2020 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.
2 | Visit our website at pgim.com/investments |
PGIM Core Short-Term Bond Fund
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 pgim.com/investments.com or by calling (800) 225-1852.
Total Returns as of 7/31/20 | Average Annual Total Returns as of 7/31/20 | |||||||
6 Months* (%) | One Year (%) | Five Years (%) | Ten Years (%) | |||||
PGIM Core Short-Term Bond Fund | ||||||||
0.85 | 2.15 | 2.19 | 2.38 | |||||
Bloomberg Barclays US Short Treasury Index | ||||||||
0.74 | 1.82 | 1.32 | 0.74 | |||||
ICE BofAML US Dollar 3-Month Deposit Offered Rate Constant Maturity Index | ||||||||
0.78 | 1.93 | 1.50 | 0.91 |
*Not annualized
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
Benchmark Definitions
Bloomberg Barclays US Short Treasury Index—The Bloomberg Barclays US Short Treasury Index includes aged U.S. Treasury bills, notes and bonds with a remaining maturity from 1 up to (but not including) 12 months. It excludes zero coupon strips.
ICE BofAML US Dollar 3-Month Deposit Offered Rate Constant Maturity Index—tracks the performance of a basket of synthetic assets paying Libid to a stated maturity. The index purchases a new instrument each day, priced at par, having exactly its stated maturity and with a coupon equal to that day’s fixing rate. All issues are held to maturity. Therefore each day the index is comprised of a basket of securities. The index is not marked to market. The returns of the index represent the accrued income generated by the equally weighted average of all the coupons in the basket for a given day.
Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes.
Distributions and Yields as of 7/31/20 | ||||||
Total Distributions Paid for Six Months ($) | SEC 30-Day Subsidized | SEC 30-Day Unsubsidized | ||||
PGIM Core Short-Term Bond Fund | 0.09 | 1.13 | 1.13 |
Prudential Investment Portfolios 2 | 3 |
PGIM Core Short-Term Bond Fund
Your Fund’s Performance (continued)
*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). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**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 investor experience is represented by the SEC 30-Day Subsidized Yield.
Credit Quality expressed as a percentage of total investments as of 7/31/20 (%) | ||||
AAA | 27.8 | |||
AA | 12.4 | |||
A | 24.8 | |||
BBB | 13.2 | |||
BB | 0.5 | |||
B | 0.2 | |||
CCC | 0.2 | |||
Not Rated | –0.9 | |||
Cash/Cash Equivalents | 21.8 | |||
Total Investments | 100.0 |
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors 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 an NRSRO. Credit ratings are subject to change.
4 | Visit our website at pgim.com/investments |
PGIM Core Ultra Short Bond Fund
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 pgim.com/investments.com or by calling (800) 225-1852.
Total Returns as of 7/31/20 | Average Annual Total Returns as of 7/31/20 | |||||||
6 Months* (%) | One Year (%) | Five Years (%) | Ten Years (%) | |||||
PGIM Core Ultra Short Bond Fund | ||||||||
0.52 | 1.58 | 1.40 | 0.79 | |||||
Bloomberg Barclays 1-3 Month US Treasury Bill Index | ||||||||
0.38 | 1.30 | 1.12 | 0.59 | |||||
iMoneyNet Prime Institutional Funds Average | ||||||||
0.67 | 1.22 | 1.10 | 0.57 |
*Not annualized
The returns in the table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
Benchmark Definition
Bloomberg Barclays 1–3 Month US Treasury Bill Index—The Bloomberg Barclays 1–3 Month US Treasury Bill Index includes all publicly issued zero-coupon US Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
iMoneyNet Prime Institutional Funds Average—The iMoneyNet Prime Institutional Funds Average is based on the average return of all funds in the iMoneyNet Prime Institutional Funds universe for the periods noted. Funds in the iMoneyNet Prime Institutional Funds Average primarily invest in a variety of taxable short-term corporate and bank debt securities.
Distributions and Yields as of 7/31/20 | ||||||
Total Distributions Paid for Six Months ($) | SEC 30-Day Subsidized | SEC 30-Day Unsubsidized | ||||
PGIM Core Ultra Short Bond Fund | 0.01 | 0.31 | 0.31 |
*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). The investor experience is represented by the SEC 30-Day Subsidized Yield.
**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 investor experience is represented by the SEC 30-Day Subsidized Yield.
Prudential Investment Portfolios 2 | 5 |
PGIM Core Ultra Short Bond Fund
Your Fund’s Performance (continued)
Credit Quality expressed as a percentage of total investments as of 7/31/20 (%) | ||||
A-1+/P-1 | 81.2 | |||
A-1/P-1 | 18.8 | |||
Total Investments | 100.0 |
Credit ratings reflect the highest rating assigned by an NRSRO such as Moody’s, S&P and Fitch. Moody’s Investors 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. Credit ratings are subject to change.
6 | Visit our website at pgim.com/investments |
PGIM Institutional Money Market Fund
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 pgim.com/investments.com or by calling (800) 225-1852.
Total Returns as of 7/31/20 | Average Annual Total Returns as of 7/31/20 | |||||
6 Months* (%) | One Year (%) | Since Inception (%) | ||||
PGIM Institutional Money Market Fund | ||||||
0.45 | 1.49 | 1.59 (7/19/16) | ||||
iMoneyNet Prime Institutional Funds Average | ||||||
0.67 | 1.22 | 1.34 |
*Not annualized
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.
Institutional Money Market Fund Yield Comparison
Prudential Investment Portfolios 2 | 7 |
PGIM Institutional Money Market Fund
Your Fund’s Performance (continued)
Weighted Average Maturity* (WAM) Comparison
The graphs portray weekly 7-day current yields and weekly WAMs for PGIM Institutional Money Market Fund and the iMoneyNet Prime Institutional Funds Average every Tuesday from July 30, 2019 to July 28, 2020, the closest dates prior to the beginning and end of the Fund’s reporting period. Note: iMoneyNet, Inc. regularly reports a 7-day current yield and WAM on Tuesdays. As a result, the data portrayed for the Fund at the end of the reporting period in the graphs may not match the data portrayed in the Fund’s performance table as of July 31, 2020.
* Weighted Average Maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding, or redemption provision.
Benchmark Definition
iMoneyNet Prime Institutional Funds Average—The iMoneyNet Prime Institutional Funds Average is based on the average return of all funds in the iMoneyNet Prime Institutional Funds universe for the periods noted. Funds in the iMoneyNet Prime Institutional Funds Average primarily invest in a variety of taxable short-term corporate and bank debt securities.
8 | Visit our website at pgim.com/investments |
As a shareholder of a 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 July 31, 2020. The example is for illustrative purposes only; you should consult the Fund’s Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line 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 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.
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 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 Investment Portfolios 2 | 9 |
Fees and Expenses (continued)
PGIM Core Short-Term Bond Fund | Beginning Account Value February 1, 2020 | Ending Account Value July 31, 2020 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
| Actual | $ | 1,000.00 | $ | 1,008.50 | 0.04 | % | $ | 0.20 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.66 | 0.04 | % | $ | 0.20 |
PGIM Core Ultra Short Bond Fund | Beginning Account Value February 1, 2020 | Ending Account July 31, 2020 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
| Actual | $ | 1,000.00 | $ | 1,005.20 | 0.01 | % | $ | 0.05 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.81 | 0.01 | % | $ | 0.05 |
PGIM Institutional Money Market Fund | Beginning Account Value February 1, 2020 | Ending Account July 31, 2020 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
| Actual | $ | 1,000.00 | $ | 1,004.50 | 0.07 | % | $ | 0.35 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.52 | 0.07 | % | $ | 0.35 |
*Fund expenses (net of fee waivers or subsidies, if any) are equal to the annualized expense ratio (provided in the table), multiplied by the average account value over the period, multiplied by the 182 days in the six-month period ended July 31, 2020, and divided by the 366 days in the Fund’s fiscal year ending January 31, 2021 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
10 | Visit our website at pgim.com/investments |
Glossary
The following abbreviations are used in the Funds’ descriptions:
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.
A—Annual payment frequency for swaps
ABS—Asset-Backed Security
AMBAC—American Municipal Bond Assurance Corp.
FHLMC—Federal Home Loan Mortgage Corporation
FNMA—Federal National Mortgage Association
FRDD—Floating Rate Daily Demand Note
GMTN—Global Medium Term Note
GNMA—Government National Mortgage Association
LIBOR—London Interbank Offered Rate
LP—Limited Partnership
MASTR—Morgan Stanley Structured Asset Security
MTN—Medium Term Note
Q—Quarterly payment frequency for swaps
S—Semiannual payment frequency for swaps
USOIS—United States Overnight Index Swap
11 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
LONG-TERM INVESTMENTS 80.4% |
| |||||||||||||||
ASSET-BACKED SECURITIES 13.7% |
| |||||||||||||||
Automobiles 8.2% |
| |||||||||||||||
Ally Auto Receivables Trust, | ||||||||||||||||
Series 2018-03, Class A3 | 3.000% | 01/17/23 | 9,754 | $ | 9,898,733 | |||||||||||
Series 2019-02, Class A3 | 2.230 | 01/16/24 | 3,700 | 3,778,883 | ||||||||||||
Ally Master Owner Trust, | ||||||||||||||||
Series 2018-02, Class A | 3.290 | 05/15/23 | 9,100 | 9,282,966 | ||||||||||||
Series 2018-04, Class A | 3.300 | 07/17/23 | 10,000 | 10,259,992 | ||||||||||||
Bank of The West Auto Trust, | ||||||||||||||||
Series 2017-01, Class A3, 144A | 2.110 | 01/15/23 | 427 | 429,918 | ||||||||||||
BMW Floorplan Master Owner Trust, | 3.150 | 05/15/23 | 5,000 | 5,083,536 | ||||||||||||
CarMax Auto Owner Trust, | ||||||||||||||||
Series 2017-04, Class A3 | 2.110 | 10/17/22 | 1,074 | 1,081,884 | ||||||||||||
Series 2018-01, Class A3 | 2.480 | 11/15/22 | 1,822 | 1,842,852 | ||||||||||||
Series 2018-02, Class A3 | 2.980 | 01/17/23 | 3,898 | 3,958,749 | ||||||||||||
Series 2018-03, Class A3 | 3.130 | 06/15/23 | 8,473 | 8,658,849 | ||||||||||||
Series 2018-04, Class A3 | 3.360 | 09/15/23 | 9,500 | 9,792,666 | ||||||||||||
Series 2019-01, Class A2A | 3.020 | 07/15/22 | 1,139 | 1,144,126 | ||||||||||||
Series 2019-02, Class A3 | 2.680 | 03/15/24 | 3,500 | 3,610,132 | ||||||||||||
Fifth Third Auto Trust, | 2.640 | 12/15/23 | 2,500 | 2,559,858 | ||||||||||||
Ford Credit Auto Lease Trust, | ||||||||||||||||
Series 2020-B, Class A2A | 0.500 | 12/15/22 | 2,700 | 2,700,515 | ||||||||||||
Series 2020-B, Class A2B, 1 Month LIBOR + 0.260% | 0.439(c) | 12/15/22 | 2,700 | 2,699,545 | ||||||||||||
Ford Credit Auto Owner Trust, | ||||||||||||||||
Series 2016-01, Class A, 144A | 2.310 | 08/15/27 | 3,250 | 3,279,559 | ||||||||||||
Series 2017-01, Class A, 144A | 2.620 | 08/15/28 | 4,600 | 4,740,594 | ||||||||||||
Ford Credit Floorplan Master Owner Trust, | ||||||||||||||||
Series 2017-02, Class A2, 1 Month LIBOR + 0.350% (Cap N/A, Floor 0.000%) | 0.525(c) | 09/15/22 | 7,500 | 7,499,908 | ||||||||||||
Series 2019-01, Class A | 2.840 | 03/15/24 | 8,400 | 8,680,106 | ||||||||||||
Series 2019-03, Class A1 | 2.230 | 09/15/24 | 3,800 | 3,905,223 | ||||||||||||
GM Financial Automobile Leasing Trust, | 2.090 | 10/20/21 | 3,449 | 3,465,073 | ||||||||||||
GM Financial Consumer Automobile Receivables Trust, | ||||||||||||||||
Series 2018-03, Class A3 | 3.020 | 05/16/23 | 3,395 | 3,457,657 | ||||||||||||
Series 2018-04, Class A3 | 3.210 | 10/16/23 | 5,454 | 5,591,774 | ||||||||||||
GMF Floorplan Owner Revolving Trust, | ||||||||||||||||
Series 2018-04, Class A1, 144A | 3.500 | 09/15/23 | 13,100 | 13,482,248 | ||||||||||||
Series 2019-01, Class A, 144A | 2.700 | 04/15/24 | 10,500 | 10,757,227 |
See Notes to Financial Statements.
12 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Automobiles (cont’d.) | ||||||||||||||||
Honda Auto Receivables Owner Trust, | ||||||||||||||||
Series 2018-02, Class A3 | 3.010% | 05/18/22 | 3,265 | $ | 3,308,115 | |||||||||||
Series 2019-02, Class A3 | 2.520 | 06/21/23 | 2,000 | 2,060,052 | ||||||||||||
Hyundai Auto Lease Securitization Trust, | 2.080 | 12/15/21 | 8,950 | 8,999,692 | ||||||||||||
Hyundai Floorplan Master Owner Trust, | 2.680 | 04/15/24 | 4,900 | 5,022,085 | ||||||||||||
Mercedes-Benz Auto Receivables Trust, | 3.030 | 01/17/23 | 3,437 | 3,496,626 | ||||||||||||
Nissan Auto Receivables Owner Trust, | 3.060 | 03/15/23 | 3,973 | 4,050,904 | ||||||||||||
Santander Retail Auto Lease Trust, | ||||||||||||||||
Series 2019-A, Class A2, 144A | 2.720 | 01/20/22 | 8,645 | 8,715,607 | ||||||||||||
Series 2019-C, Class A2A, 144A | 1.890 | 09/20/22 | 13,437 | 13,575,623 | ||||||||||||
Toyota Auto Receivables Owner Trust, | 3.020 | 12/15/22 | 5,300 | 5,402,801 | ||||||||||||
World Omni Auto Receivables Trust, | ||||||||||||||||
Series 2018-C, Class A3 | 3.130 | 11/15/23 | 8,088 | 8,259,523 | ||||||||||||
Series 2018-D, Class A3 | 3.330 | 04/15/24 | 8,400 | 8,645,095 | ||||||||||||
Series 2019-A, Class A3 | 3.040 | 05/15/24 | 1,800 | 1,849,877 | ||||||||||||
World Omni Automobile Lease Securitization Trust, | 2.050 | 07/15/22 | 9,979 | 10,061,101 | ||||||||||||
|
| |||||||||||||||
225,089,674 | ||||||||||||||||
Credit Cards 3.5% | ||||||||||||||||
American Express Credit Account Master Trust, | ||||||||||||||||
Series 2018-06, Class A | 3.060 | 02/15/24 | 7,700 | 7,901,929 | ||||||||||||
Series 2018-08, Class A | 3.180 | 04/15/24 | 7,700 | 7,948,438 | ||||||||||||
Series 2019-01, Class A | 2.870 | 10/15/24 | 15,000 | 15,621,015 | ||||||||||||
Series 2019-02, Class A | 2.670 | 11/15/24 | 6,900 | 7,172,464 | ||||||||||||
Series 2019-03, Class A | 2.000 | 04/15/25 | 14,800 | 15,331,302 | ||||||||||||
BA Credit Card Trust, | ||||||||||||||||
Series 2018-A03, Class A3 | 3.100 | 12/15/23 | 4,500 | 4,620,758 | ||||||||||||
Series 2019-A01, Class A1 | 1.740 | 01/15/25 | 16,600 | 17,067,768 | ||||||||||||
Discover Card Execution Note Trust, Series 2018-A04, Class A4 | 3.110 | 01/16/24 | 7,400 | 7,599,287 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 13 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Credit Cards (cont’d.) | ||||||||||||||||
Discover Card Execution Note Trust, (cont’d.) | ||||||||||||||||
Series 2018-A05, Class A5 | 3.320% | 03/15/24 | 10,100 | $ | 10,439,474 | |||||||||||
Series 2019-A01, Class A1 | 3.040 | 07/15/24 | 1,000 | 1,039,837 | ||||||||||||
|
| |||||||||||||||
94,742,272 | ||||||||||||||||
Home Equity Loans 1.5% | ||||||||||||||||
ABFC Trust, | ||||||||||||||||
Series 2003-AHL01, Class A1 | 4.184 | 03/25/33 | 240 | 243,828 | ||||||||||||
Series 2003-OPT01, Class A3, 1 Month LIBOR + 0.680% (Cap N/A, Floor 0.340%) | 0.852(c) | 04/25/33 | 645 | 592,710 | ||||||||||||
Series 2004-HE01, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.600%) | 1.072(c) | 03/25/34 | 517 | 504,985 | ||||||||||||
Accredited Mortgage Loan Trust, | 0.872(c) | 01/25/35 | 1,022 | 991,261 | ||||||||||||
ACE Securities Corp. Home Equity Loan Trust, | 2.722(c) | 11/25/33 | 19 | 24,011 | ||||||||||||
Ameriquest Mortgage Securities, Inc., Asset-Backed Pass-Through Certificates, | 0.912(c) | 12/25/33 | 217 | 209,472 | ||||||||||||
Argent Securities, Inc., Asset-Backed Pass-Through Certificates, | ||||||||||||||||
Series 2003-W03, Class M2, 1 Month LIBOR + 2.700% (Cap N/A, Floor 1.800%) | 2.872(c) | 09/25/33 | 7,339 | 7,249,003 | ||||||||||||
Series 2003-W04, Class M1, 1 Month LIBOR + 1.200% (Cap N/A, Floor 0.800%) | 1.372(c) | 10/25/33 | 2,042 | 1,990,758 | ||||||||||||
Series 2004-W08, Class A2, 1 Month LIBOR + 0.960% (Cap N/A, Floor 0.480%) | 1.132(c) | 05/25/34 | 21 | 21,109 | ||||||||||||
Asset-Backed Securities Corp. Home Equity Loan Trust, | 0.852(c) | 11/25/33 | 193 | 182,701 | ||||||||||||
Bear Stearns Asset-Backed Securities Trust, | 1.402(c) | 06/25/43 | 468 | 459,081 | ||||||||||||
CDC Mortgage Capital Trust, | 1.222(c) | 11/25/33 | 1,328 | 1,302,494 |
See Notes to Financial Statements.
14 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Home Equity Loans (cont’d.) | ||||||||||||||||
CDC Mortgage Capital Trust, (cont’d.) | ||||||||||||||||
Series 2003-HE04, Class M1, 1 Month LIBOR + 0.975% (Cap N/A, Floor 0.650%) | 1.147 | %(c) | 03/25/34 | 507 | $ | 499,832 | ||||||||||
Equifirst Mortgage Loan Trust, | 3.022 | (c) | 12/25/32 | 55 | 54,993 | |||||||||||
Home Equity Asset Trust, | ||||||||||||||||
Series 2002-03, Class M1, 1 Month LIBOR + 1.350% (Cap N/A, Floor 0.900%) | 1.522 | (c) | 02/25/33 | 459 | 449,467 | |||||||||||
Series 2002-04, Class M1, 1 Month LIBOR + 1.500% (Cap N/A, Floor 1.000%) | 1.672 | (c) | 03/25/33 | 331 | 328,368 | |||||||||||
Series 2003-02, Class M1, 1 Month LIBOR + 1.320% (Cap N/A, Floor 0.880%) | 1.492 | (c) | 08/25/33 | 868 | 849,761 | |||||||||||
Series 2003-03, Class M1, 1 Month LIBOR + 1.290% (Cap N/A, Floor 0.860%) | 1.462 | (c) | 08/25/33 | 769 | 754,848 | |||||||||||
Series 2003-08, Class M1, 1 Month LIBOR + 1.080% (Cap N/A, Floor 0.720%) | 1.252 | (c) | 04/25/34 | 311 | 305,183 | |||||||||||
MASTR Asset-Backed Securities Trust, | 0.872 | (c) | 09/25/34 | 141 | 132,462 | |||||||||||
Merrill Lynch Mortgage Investors Trust, | ||||||||||||||||
Series 2004-HE02, Class A1A, 1 Month LIBOR + 0.800% (Cap N/A, Floor 0.400%) | 0.972 | (c) | 08/25/35 | 51 | 45,647 | |||||||||||
Series 2004-HE02, Class M1, 1 Month LIBOR + 1.200% (Cap N/A, Floor 0.800%) | 1.372 | (c) | 08/25/35 | 285 | 282,049 | |||||||||||
Morgan Stanley ABS Capital I, Inc. Trust, | ||||||||||||||||
Series 2002-NC06, Class M1, 1 Month LIBOR + 1.500% (Cap N/A, Floor 1.000%) | 1.672 | (c) | 11/25/32 | 198 | 196,643 | |||||||||||
Series 2003-NC05, Class M1, 1 Month LIBOR + 1.275% (Cap N/A, Floor 0.850%) | 1.447 | (c) | 04/25/33 | 1,247 | 1,240,569 | |||||||||||
Series 2003-NC05, Class M3, 1 Month LIBOR + 3.450% (Cap N/A, Floor 2.300%) | 3.622 | (c) | 04/25/33 | 88 | 85,878 | |||||||||||
Series 2003-NC08, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor 0.700%) | 1.222 | (c) | 09/25/33 | 939 | 917,628 | |||||||||||
Series 2003-NC08, Class M2, 1 Month LIBOR + 2.625% (Cap N/A, Floor 1.750%) | 2.797 | (c) | 09/25/33 | 13 | 12,080 | |||||||||||
Series 2003-NC10, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 0.680%) | 1.192 | (c) | 10/25/33 | 149 | 147,426 | |||||||||||
Series 2004-HE01, Class A4, 1 Month LIBOR + 0.740% (Cap N/A, Floor 0.370%) | 0.912 | (c) | 01/25/34 | 1,093 | 1,066,921 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 15 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Home Equity Loans (cont’d.) | ||||||||||||||||
Morgan Stanley ABS Capital I, Inc. Trust, (cont’d.) | ||||||||||||||||
Series 2004-HE07, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.600%) | 1.072 | %(c) | 08/25/34 | 2,750 | $ | 2,692,408 | ||||||||||
Morgan Stanley Dean Witter Capital I, Inc., | ||||||||||||||||
Series 2003-NC03, Class M1, 1 Month LIBOR + 1.350% (Cap N/A, Floor 0.900%) | 1.522 | (c) | 03/25/33 | 291 | 289,028 | |||||||||||
New Century Home Equity Loan Trust, | ||||||||||||||||
Series 2003-06, Class M1, 1 Month LIBOR + 1.080% (Cap 12.500%, Floor 0.720%) | 1.252 | (c) | 01/25/34 | 4,491 | 4,402,728 | |||||||||||
Series 2004-01, Class M1, 1 Month LIBOR + 0.885% (Cap 11.500%, Floor 0.590%) | 1.057 | (c) | 05/25/34 | 3,189 | 3,083,618 | |||||||||||
Renaissance Home Equity Loan Trust, Series 2003-01, Class A, 1 Month LIBOR + 0.860% (Cap N/A, Floor 0.430%) | 1.032 | (c) | 06/25/33 | 253 | 237,041 | |||||||||||
Residential Asset Securities Trust, | ||||||||||||||||
Series 2004-KS05, Class AI5 | 4.704 | (cc) | 06/25/34 | 5,248 | 5,362,654 | |||||||||||
Saxon Asset Securities Trust, | ||||||||||||||||
Series 2003-03, Class M2, 1 Month LIBOR + 2.400% (Cap N/A, Floor 1.600%) | 2.572 | (c) | 12/25/33 | 38 | 36,863 | |||||||||||
Securitized Asset-Backed Receivables LLC Trust, | 0.952 | (c) | 02/25/34 | 2,520 | 2,456,953 | |||||||||||
|
| |||||||||||||||
39,702,461 | ||||||||||||||||
Residential Mortgage-Backed Securities 0.5% | ||||||||||||||||
Ameriquest Mortgage Securities, Inc., Asset-Backed Pass-Through Certificates, | 1.042 | (c) | 07/25/34 | 392 | 390,300 | |||||||||||
Amortizing Residential Collateral Trust, | 1.972 | (c) | 07/25/32 | 78 | 77,684 | |||||||||||
Chase Funding Trust, | ||||||||||||||||
Series 2002-02, Class 2A1, 1 Month LIBOR + 0.500% (Cap N/A, Floor 0.250%) | 0.672 | (c) | 05/25/32 | 365 | 356,753 | |||||||||||
Series 2003-01, Class 2A2, 1 Month LIBOR + 0.660% (Cap N/A, Floor 0.330%) | 0.832 | (c) | 11/25/32 | 331 | 326,012 |
See Notes to Financial Statements.
16 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Residential Mortgage-Backed Securities (cont’d.) | ||||||||||||||||
Countrywide Asset-Backed Certificates, | ||||||||||||||||
Series 2003-BC04, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor 0.700%) | 1.222 | %(c) | 07/25/33 | 156 | $ | 153,623 | ||||||||||
Series 2004-01, Class M1, 1 Month LIBOR + 0.750% (Cap N/A, Floor 0.500%) | 0.922 | (c) | 03/25/34 | 235 | 233,535 | |||||||||||
Series 2004-ECC01, Class M1, 1 Month LIBOR + 0.945% (Cap N/A, Floor 0.315%) | 1.117 | (c) | 11/25/34 | 2,214 | 2,164,365 | |||||||||||
Credit-Based Asset Servicing & Securitization LLC, | ||||||||||||||||
Series 2003-CB05, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 0.680%) | 1.192 | (c) | 11/25/33 | 595 | 577,138 | |||||||||||
Equity One Mortgage Pass-Through Trust, | 4.860 | (cc) | 08/25/33 | 60 | 61,738 | |||||||||||
First Franklin Mortgage Loan Trust, | ||||||||||||||||
Series 2004-FF05, Class A1, 1 Month LIBOR + 0.720% (Cap N/A, Floor 0.360%) | 0.892 | (c) | 08/25/34 | 179 | 178,227 | |||||||||||
GSAMP Trust, | ||||||||||||||||
Series 2003-FM01, Class M2, 1 Month LIBOR + 2.775% (Cap N/A, Floor 1.850%) | 2.962 | (c) | 03/20/33 | 32 | 33,008 | |||||||||||
HSI Asset Securitization Corp. Trust, | ||||||||||||||||
Series 2006-OPT04, Class 2A4, 1 Month LIBOR + 0.250% (Cap N/A, Floor 0.250%) | 0.422 | (c) | 03/25/36 | 1,400 | 1,359,751 | |||||||||||
Long Beach Mortgage Loan Trust, | ||||||||||||||||
Series 2003-03, Class M1, 1 Month LIBOR + 1.125% (Cap N/A, Floor 0.750%) | 1.297 | (c) | 07/25/33 | 826 | 809,405 | |||||||||||
Series 2003-04, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 0.680%) | 1.192 | (c) | 08/25/33 | 456 | 450,907 | |||||||||||
Series 2004-02, Class M1, 1 Month LIBOR + 0.795% (Cap N/A, Floor 0.530%) | 0.967 | (c) | 06/25/34 | 2,016 | 1,943,658 | |||||||||||
Series 2004-03, Class M1, 1 Month LIBOR + 0.855% (Cap N/A, Floor 0.570%) | 1.027 | (c) | 07/25/34 | 2,647 | 2,511,401 | |||||||||||
Merrill Lynch Mortgage Investors Trust, | ||||||||||||||||
Series 2003-WMC02, Class M2, 1 Month LIBOR + 2.850% (Cap N/A, Floor 1.900%) | 3.022 | (c) | 02/25/34 | 223 | 218,507 | |||||||||||
Series 2004-WMC01, Class M2, 1 Month LIBOR + 1.650% (Cap N/A, Floor 1.100%) | 1.822 | (c) | 10/25/34 | 776 | 761,493 | |||||||||||
Morgan Stanley ABS Capital I, Inc. Trust, | ||||||||||||||||
Series 2004-NC05, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.600%) | 1.072 | (c) | 05/25/34 | 430 | 422,179 | |||||||||||
Saxon Asset Securities Trust, | ||||||||||||||||
Series 2004-02, Class AF3 | 3.974 | (cc) | 08/25/35 | 41 | 43,700 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 17 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
ASSET-BACKED SECURITIES (Continued) | ||||||||||||||||
Residential Mortgage-Backed Securities (cont’d.) | ||||||||||||||||
Specialty Underwriting & Residential Finance Trust, | 0.972 | %(c) | 10/25/35 | 580 | $ | 563,385 | ||||||||||
Structured Asset Investment Loan Trust, | 0.852 | (c) | 01/25/33 | 102 | 100,472 | |||||||||||
13,737,241 | ||||||||||||||||
Student Loans 0.0% | ||||||||||||||||
Navient Student Loan Trust, | ||||||||||||||||
Series 2018-04A, Class A1, 144A, 1 Month LIBOR + 0.250% (Cap N/A, Floor 0.000%) | 0.422 | (c) | 06/27/67 | 351 | 350,687 | |||||||||||
Series 2019-01A, Class A1, 144A, 1 Month LIBOR + 0.330% (Cap N/A, Floor 0.000%) | 0.502 | (c) | 12/27/67 | 903 | 903,263 | |||||||||||
|
| |||||||||||||||
1,253,950 | ||||||||||||||||
|
| |||||||||||||||
TOTAL ASSET-BACKED SECURITIES | 374,525,598 | |||||||||||||||
|
| |||||||||||||||
CERTIFICATES OF DEPOSIT 1.8% | ||||||||||||||||
Credit Agricole Corporate & Investment Bank, | 0.793 | (c) | 09/13/21 | 10,000 | 10,015,804 | |||||||||||
Nordea Bank Abp, 3 Month LIBOR + 0.200% | 0.624 | (c) | 02/14/22 | 20,000 | 19,931,303 | |||||||||||
Svenska Handelsbanken, 3 Month LIBOR + 0.200% | 0.586 | (c) | 02/18/22 | 20,000 | 20,008,675 | |||||||||||
|
| |||||||||||||||
TOTAL CERTIFICATES OF DEPOSIT | 49,955,782 | |||||||||||||||
|
| |||||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES 15.1% | ||||||||||||||||
BANK, | 1.909 | 06/15/60 | 1,024 | 1,028,403 | ||||||||||||
Barclays Commercial Mortgage Securities Trust, | 0.897 | (c) | 03/15/37 | 37,270 | 36,140,156 | |||||||||||
BX Commercial Mortgage Trust, | ||||||||||||||||
Series 2018-BIOA, Class A, 144A, 1 Month LIBOR + 0.671% (Cap N/A, Floor 0.648%) | 0.846 | (c) | 03/15/37 | 35,000 | 34,562,234 | |||||||||||
Series 2020-BXLP, Class A, 144A, 1 Month LIBOR + 0.800% (Cap N/A, Floor 0.800%) | 0.975 | (c) | 12/15/36 | 5,994 | 5,959,037 |
See Notes to Financial Statements.
18 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||||
BX Trust, | ||||||||||||||||
Series 2018-EXCL, Class A, 144A, 1 Month LIBOR + 1.088% (Cap N/A, Floor 1.088%) | 1.262 | %(c) | 09/15/37 | 9,369 | $ | 8,539,216 | ||||||||||
CAMB Commercial Mortgage Trust, | 1.245 | (c) | 12/15/37 | 9,500 | 9,479,040 | |||||||||||
CD Mortgage Trust, | 2.168 | 11/13/50 | 2,180 | 2,200,044 | ||||||||||||
CGDBB Commercial Mortgage Trust, | 0.965 | (c) | 07/15/32 | 4,568 | 4,557,771 | |||||||||||
Citigroup Commercial Mortgage Trust, | ||||||||||||||||
Series 2016-P04, Class A2 | 2.450 | 07/10/49 | 20,000 | 20,083,712 | ||||||||||||
Commercial Mortgage Trust, | ||||||||||||||||
Series 2014-CR15, Class A2 | 2.928 | 02/10/47 | 997 | 1,006,687 | ||||||||||||
Series 2014-UBS02, Class A2 | 2.820 | 03/10/47 | 31 | 30,825 | ||||||||||||
Series 2014-UBS05, Class A2 | 3.031 | 09/10/47 | 687 | 688,842 | ||||||||||||
Series 2018-HCLV, Class A, 144A, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%) | 1.175 | (c) | 09/15/33 | 11,508 | 11,042,686 | |||||||||||
Credit Suisse Mortgage Capital Certificates, | 1.155 | (c) | 05/15/36 | 35,000 | 34,912,136 | |||||||||||
CSWF, Series 2018-TOP, Class A, 144A, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%) | 1.175 | (c) | 08/15/35 | 12,170 | 11,804,566 | |||||||||||
DBJPM Mortgage Trust, | 1.676 | 05/10/49 | 193 | 193,507 | ||||||||||||
Series 2016-C03, Class A1 | 1.502 | 08/10/49 | 346 | 346,012 | ||||||||||||
GS Mortgage Securities Trust, | ||||||||||||||||
Series 2018-GS09, Class A1 | 2.861 | 03/10/51 | 2,978 | 3,033,511 | ||||||||||||
Series 2018-HART, Class A, 144A, 1 Month LIBOR + | ||||||||||||||||
1.090% (Cap N/A, Floor 1.090%) | 1.265 | (c) | 10/15/31 | 21,300 | 20,781,843 | |||||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, | ||||||||||||||||
Series 2014-C20, Class A3A2, 144A | 3.472 | 07/15/47 | 14,302 | 14,495,448 | ||||||||||||
Series 2017-FL11, Class A, 144A, 1 Month LIBOR + 0.850% (Cap N/A, Floor 0.850%) | 1.025 | (c) | 10/15/32 | 9,977 | 9,548,101 | |||||||||||
Series 2018-WPT, Class AFL, 144A, 1 Month LIBOR + 0.950% (Cap N/A, Floor 0.950%) | 1.114 | (c) | 07/05/33 | 19,358 | 19,025,208 | |||||||||||
Series 2019-BKWD, Class A, 144A, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%) | 1.175 | (c) | 09/15/29 | 4,600 | 4,465,046 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 19 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued) | ||||||||||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, (cont’d.) | ||||||||||||||||
Series 2020-NNN, Class AFL, 144A, 1 Month LIBOR + 0.860% (Cap N/A, Floor 0.860%) | 1.037 | %(c) | 01/16/37 | 2,700 | $ | 2,603,000 | ||||||||||
JPMBB Commercial Mortgage Securities Trust, | ||||||||||||||||
Series 2013-C15, Class ASB | 3.659 | 11/15/45 | 815 | 845,067 | ||||||||||||
Series 2014-C24, Class A3 | 3.098 | 11/15/47 | 19,500 | 19,630,155 | ||||||||||||
Series 2014-C24, Class A4A2, 144A | 3.373 | 11/15/47 | 25,000 | 26,744,730 | ||||||||||||
JPMDB Commercial Mortgage Securities Trust, | 2.215 | 05/13/53 | 25,000 | 26,024,292 | ||||||||||||
Ladder Capital Commercial Mortgage Securities Trust, | 3.128 | 07/12/50 | 4,983 | 5,048,965 | ||||||||||||
LSTAR Commercial Mortgage Trust, | 2.776 | 03/10/50 | 10,675 | 10,844,569 | ||||||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, | ||||||||||||||||
Series 2013-C07, Class A3 | 2.655 | 02/15/46 | 5,848 | 5,995,733 | ||||||||||||
Series 2015-C24, Class A2 | 3.088 | 05/15/48 | 1,765 | 1,764,290 | ||||||||||||
Morgan Stanley Capital I Trust, | ||||||||||||||||
Series 2012-C04, Class A4 | 3.244 | 03/15/45 | 3,450 | 3,514,111 | ||||||||||||
Series 2016-UB12, Class A2 | 2.932 | 12/15/49 | 13,200 | 13,378,439 | ||||||||||||
UBS Commercial Mortgage Trust, | 1.887 | 06/15/50 | 925 | 926,435 | ||||||||||||
UBS-Barclays Commercial Mortgage Trust, | ||||||||||||||||
Series 2012-C03, Class A4 | 3.091 | 08/10/49 | 9,096 | 9,413,905 | ||||||||||||
Series 2012-C04, Class A3 | 2.533 | 12/10/45 | 14,540 | 14,530,251 | ||||||||||||
Series 2012-C04, Class A5 | 2.850 | 12/10/45 | 4,512 | 4,675,003 | ||||||||||||
Wells Fargo Commercial Mortgage Trust, | 4.740 | (cc) | 12/15/48 | 9,800 | 9,904,380 | |||||||||||
WFRBS Commercial Mortgage Trust, | 0.931 | (c) | 03/15/47 | 2,744 | 2,742,587 | |||||||||||
|
| |||||||||||||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES | 412,509,943 | |||||||||||||||
|
|
See Notes to Financial Statements.
20 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS 49.8% | ||||||||||||||
Aerospace & Defense 0.6% | ||||||||||||||
General Dynamics Corp., | ||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.380% | 0.828%(c) | 05/11/21 | 10,675 | $ | 10,696,422 | |||||||||
Lockheed Martin Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 3.350 | 09/15/21 | 5,263 | 5,444,235 | ||||||||||
|
| |||||||||||||
16,140,657 | ||||||||||||||
Airlines 0.7% | ||||||||||||||
Southwest Airlines Co., | ||||||||||||||
Sr. Unsec’d. Notes | 4.750 | 05/04/23 | 17,500 | 18,276,049 | ||||||||||
Apparel 0.6% | ||||||||||||||
VF Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 2.050 | 04/23/22 | 15,000 | 15,395,197 | ||||||||||
Auto Manufacturers 3.4% | ||||||||||||||
American Honda Finance Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.350% | 0.891(c) | 11/05/21 | 3,410 | 3,411,118 | ||||||||||
BMW US Capital LLC (Germany), | ||||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.370% | 0.794(c) | 08/14/20 | 5,000 | 5,000,747 | ||||||||||
Gtd. Notes, 144A | 1.850 | 09/15/21 | 8,000 | 8,081,491 | ||||||||||
Gtd. Notes, 144A | 3.800 | 04/06/23 | 10,000 | 10,789,932 | ||||||||||
Daimler Finance North America LLC (Germany), | ||||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.450% | 0.808(c) | 02/22/21 | 11,000 | 10,986,750 | ||||||||||
Gtd. Notes, 144A | 2.300 | 02/12/21 | 1,670 | 1,682,373 | ||||||||||
Harley-Davidson Financial Services, Inc., | ||||||||||||||
Gtd. Notes, 144A, MTN, 3 Month LIBOR + 0.940% | 1.284(c) | 03/02/21 | 8,000 | 7,964,722 | ||||||||||
Toyota Motor Credit Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, Secured Overnight Financing Rate + 0.400% | 0.490(c) | 10/23/20 | 5,600 | 5,602,123 | ||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.280% | 0.546(c) | 04/13/21 | 10,000 | 10,006,464 | ||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.290% | 0.566(c) | 10/07/21 | 11,000 | 11,010,987 | ||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.690% | 0.956(c) | 01/11/22 | 550 | 553,146 | ||||||||||
Volkswagen Group of America Finance LLC (Germany), | ||||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.770% | 1.204(c) | 11/13/20 | 7,000 | 7,004,087 | ||||||||||
Gtd. Notes, 144A | 2.900 | 05/13/22 | 10,000 | 10,372,344 | ||||||||||
|
| |||||||||||||
92,466,284 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 21 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Banks 13.1% | ||||||||||||||
Australia & New Zealand Banking Group Ltd. (Australia), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN, 3 Month LIBOR + 0.320% | 0.768%(c) | 11/09/20 | 600 | $ | 600,342 | |||||||||
Sr. Unsec’d. Notes, 144A, MTN, 3 Month LIBOR + 0.490% | 0.864(c) | 11/21/22 | 20,434 | 20,517,240 | ||||||||||
Banco Santander SA (Spain), | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 1.560% | 1.826(c) | 04/11/22 | 12,200 | 12,294,214 | ||||||||||
Bank of America Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN | 5.000 | 05/13/21 | 1,225 | 1,269,148 | ||||||||||
Bank of Montreal (Canada), | ||||||||||||||
Sr. Unsec’d. Notes, Series D, MTN, 3 Month LIBOR + 0.460% | 0.726(c) | 04/13/21 | 7,500 | 7,521,109 | ||||||||||
Bank of New York Mellon Corp. (The), | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 1.050% | 1.318(c) | 10/30/23 | 1,927 | 1,954,654 | ||||||||||
Sr. Unsec’d. Notes, MTN | 1.950 | 08/23/22 | 6,700 | 6,919,331 | ||||||||||
Bank of Nova Scotia (The) (Canada), | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.620% | 0.936(c) | 09/19/22 | 1,750 | 1,763,596 | ||||||||||
Sr. Unsec’d. Notes | 1.625 | 05/01/23 | 14,000 | 14,420,517 | ||||||||||
Banque Federative du Credit Mutuel SA (France), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN, 3 Month LIBOR + 0.730% | 1.002(c) | 07/20/22 | 960 | 964,566 | ||||||||||
Barclays Bank PLC (United Kingdom), | ||||||||||||||
Sr. Unsec’d. Notes | 1.700 | 05/12/22 | 11,000 | 11,222,791 | ||||||||||
Canadian Imperial Bank of Commerce (Canada), | ||||||||||||||
Sr. Unsec’d. Notes, Secured Overnight Financing Rate+ 0.800% | 0.900(c) | 03/17/23 | 21,000 | 21,036,146 | ||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.720% | 1.041(c) | 06/16/22 | 2,260 | 2,280,864 | ||||||||||
Citibank NA, | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.600% | 0.977(c) | 05/20/22 | 4,750 | 4,768,085 | ||||||||||
Commonwealth Bank of Australia (Australia), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.700% | 1.010(c) | 03/10/22 | 5,000 | 5,038,619 | ||||||||||
Sr. Unsec’d. Notes, 144A, MTN, 3 Month LIBOR + 0.680% | 0.988(c) | 09/18/22 | 250 | 252,154 | ||||||||||
Cooperatieve Rabobank UA (Netherlands), | ||||||||||||||
Sr. Unsec’d. Notes | 3.125 | 04/26/21 | 8,000 | 8,165,885 | ||||||||||
Sr. Unsec’d. Notes, GMTN | 2.500 | 01/19/21 | 15,000 | 15,139,116 | ||||||||||
Credit Suisse AG (Switzerland), | ||||||||||||||
Sr. Unsec’d. Notes, Secured Overnight Financing Rate + 0.450% | 0.527(c) | 02/04/22 | 18,000 | 17,974,617 |
See Notes to Financial Statements.
22 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||||
Banks (cont’d.) | ||||||||||||||||
Credit Suisse AG (Switzerland), (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 2.100% | 11/12/21 | 9,000 | $ | 9,196,409 | |||||||||||
Federation des Caisses Desjardins du Quebec (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN, 3 Month LIBOR + 0.330% | 0.598(c) | 10/30/20 | 7,000 | 7,004,477 | ||||||||||||
Fifth Third Bank NA, | ||||||||||||||||
Sr. Unsec’d. Notes, MTN | 1.800 | 01/30/23 | 7,000 | 7,209,422 | ||||||||||||
Goldman Sachs Group, Inc. (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.625 | 04/25/21 | 3,200 | 3,245,990 | ||||||||||||
Huntington National Bank (The), | ||||||||||||||||
Sr. Unsec’d. Notes | 1.800 | 02/03/23 | 8,000 | 8,243,207 | ||||||||||||
Intesa Sanpaolo SpA (Italy), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 6.500 | 02/24/21 | 3,084 | 3,165,970 | ||||||||||||
JPMorgan Chase & Co., | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.610% | 0.918(c) | 06/18/22 | 10,734 | 10,771,947 | ||||||||||||
KeyBank NA, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.250 | 03/10/23 | 12,500 | 12,744,167 | ||||||||||||
Lloyds Banking Group PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.800% | 1.106(c) | 06/21/21 | 3,000 | 3,014,934 | ||||||||||||
Mitsubishi UFJ Financial Group, Inc. (Japan), | ||||||||||||||||
Sr. Unsec’d. Notes | 2.623 | 07/18/22 | 20,000 | 20,798,126 | ||||||||||||
Morgan Stanley, | ||||||||||||||||
Sr. Unsec’d. Notes, GMTN, Secured Overnight | ||||||||||||||||
Financing Rate+ 0.700% | 0.800(c) | 01/20/23 | 9,167 | 9,179,407 | ||||||||||||
National Australia Bank Ltd. (Australia), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.890% | 1.163(c) | 01/10/22 | 400 | 403,982 | ||||||||||||
National Securities Clearing Corp., | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 1.200 | 04/23/23 | 5,000 | 5,098,535 | ||||||||||||
PNC Bank NA, | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.325% | 0.685(c) | 02/24/23 | 14,000 | 14,008,249 | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.500% | 0.745(c) | 07/27/22 | 350 | 351,804 | ||||||||||||
Sr. Unsec’d. Notes | 2.150 | 04/29/21 | 1,385 | 1,402,065 | ||||||||||||
Royal Bank of Canada (Canada), | ||||||||||||||||
Sr. Unsec’d. Notes, GMTN, 3 Month LIBOR + 0.390% | 0.658(c) | 04/30/21 | 10,000 | 10,021,593 | ||||||||||||
Sr. Unsec’d. Notes, MTN | 2.150 | 10/26/20 | 12,000 | 12,054,480 | ||||||||||||
Santander UK PLC (United Kingdom), | ||||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.660% | 1.052(c) | 11/15/21 | 9,000 | 9,046,570 | ||||||||||||
Skandinaviska Enskilda Banken AB (Sweden), | ||||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.625 | 11/17/20 | 4,300 | 4,328,817 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 23 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Banks (cont’d.) | ||||||||||||||
Toronto-Dominion Bank (The) (Canada), | ||||||||||||||
Sr. Unsec’d. Notes, MTN, Secured Overnight | ||||||||||||||
Financing Rate+ 0.480% | 0.580%(c) | 01/27/23 | 2,750 | $ | 2,743,485 | |||||||||
Truist Bank, | ||||||||||||||
Sr. Unsec’d. Notes, Secured Overnight Financing Rate+ 0.730% | 0.827(c) | 03/09/23 | 2,750 | 2,756,535 | ||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.590% | 0.976(c) | 05/17/22 | 17,000 | 17,086,194 | ||||||||||
UBS AG (Switzerland), | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 1.750 | 04/21/22 | 12,500 | 12,763,890 | ||||||||||
US Bank NA, | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.440% | 0.800(c) | 05/23/22 | 6,300 | 6,323,804 | ||||||||||
Wells Fargo & Co., | ||||||||||||||
Sr. Unsec’d. Notes | 2.100 | 07/26/21 | 10,000 | 10,167,889 | ||||||||||
Westpac Banking Corp. (Australia), | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.720% | 1.112(c) | 05/15/23 | 175 | 176,642 | ||||||||||
|
| |||||||||||||
357,411,584 | ||||||||||||||
Beverages 0.4% | ||||||||||||||
Keurig Dr. Pepper, Inc., | ||||||||||||||
Gtd. Notes | 3.551 | 05/25/21 | 10,000 | 10,251,006 | ||||||||||
Chemicals 0.9% | ||||||||||||||
DuPont de Nemours, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.710% | 1.102(c) | 11/15/20 | 17,350 | 17,374,876 | ||||||||||
Sr. Unsec’d. Notes | 3.766 | 11/15/20 | 1,000 | 1,009,146 | ||||||||||
Nutrien Ltd. (Canada), | ||||||||||||||
Sr. Unsec’d. Notes | 1.900 | 05/13/23 | 5,000 | 5,169,851 | ||||||||||
|
| |||||||||||||
23,553,873 | ||||||||||||||
Commercial Services 0.5% | ||||||||||||||
PayPal Holdings, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 1.350 | 06/01/23 | 9,000 | 9,225,731 | ||||||||||
Verisk Analytics, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 5.800 | 05/01/21 | 5,000 | 5,187,679 | ||||||||||
|
| |||||||||||||
14,413,410 |
See Notes to Financial Statements.
24 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Computers 1.8% | ||||||||||||||
Apple, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 1.130% | 1.490%(c) | 02/23/21 | 6,524 | $ | 6,564,765 | |||||||||
Sr. Unsec’d. Notes | 1.700 | 09/11/22 | 5,000 | 5,147,049 | ||||||||||
Hewlett Packard Enterprise Co., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.680% | 0.998(c) | 03/12/21 | 5,000 | 4,997,470 | ||||||||||
Sr. Unsec’d. Notes | 3.600 | 10/15/20 | 10,000 | 10,026,706 | ||||||||||
IBM Credit LLC, | ||||||||||||||
Sr. Unsec’d. Notes | 2.650 | 02/05/21 | 3,000 | 3,035,872 | ||||||||||
International Business Machines Corp., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.400% | 0.834(c) | 05/13/21 | 18,800 | 18,840,005 | ||||||||||
|
| |||||||||||||
48,611,867 | ||||||||||||||
Cosmetics/Personal Care 0.2% | ||||||||||||||
Procter & Gamble Co. (The), | ||||||||||||||
Sr. Unsec’d. Notes | 2.150 | 08/11/22 | 6,499 | 6,758,807 | ||||||||||
Diversified Financial Services 1.0% | ||||||||||||||
AIG Global Funding, | ||||||||||||||
Sr. Sec’d. Notes, 144A, 3 Month LIBOR + 0.650% | 0.908(c) | 01/22/21 | 10,000 | 10,021,874 | ||||||||||
American Express Credit Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.700% | 1.037(c) | 03/03/22 | 1,561 | 1,570,698 | ||||||||||
Capital One Bank USA NA, | ||||||||||||||
Sub. Notes | 3.375 | 02/15/23 | 6,000 | 6,344,517 | ||||||||||
Charles Schwab Corp. (The), | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.320% | 0.694(c) | 05/21/21 | 10,500 | 10,519,236 | ||||||||||
|
| |||||||||||||
28,456,325 | ||||||||||||||
Electric 3.5% | ||||||||||||||
American Electric Power Co., Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 2.150 | 11/13/20 | 15,000 | 15,075,303 | ||||||||||
Sr. Unsec’d. Notes, Series I | 3.650 | 12/01/21 | 5,051 | 5,258,308 | ||||||||||
CenterPoint Energy, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.600 | 11/01/21 | 9,250 | 9,628,593 | ||||||||||
Consolidated Edison Co. of New York, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, Series C, 3 Month LIBOR + 0.400% | 0.697(c) | 06/25/21 | 9,000 | 9,025,392 | ||||||||||
Consolidated Edison, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 2.000 | 05/15/21 | 3,500 | 3,541,053 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 25 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Electric (cont’d.) | ||||||||||||||
DTE Energy Co., | ||||||||||||||
Sr. Unsec’d. Notes | 2.250% | 11/01/22 | 27,000 | $ | 27,939,171 | |||||||||
Duke Energy Corp., | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.500% | 0.924(c) | 05/14/21 | 500 | 501,294 | ||||||||||
Duke Energy Florida LLC, | ||||||||||||||
Sr. Unsec’d. Notes, Series A, 3 Month LIBOR + 0.250% | 0.610(c) | 11/26/21 | 345 | 344,763 | ||||||||||
National Rural Utilities Cooperative Finance Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.375% | 0.683(c) | 06/30/21 | 369 | 369,968 | ||||||||||
NextEra Energy Capital Holdings, Inc., | ||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.450% | 0.756(c) | 09/28/20 | 7,000 | 7,001,237 | ||||||||||
Gtd. Notes | 2.900 | 04/01/22 | 17,500 | 18,233,388 | ||||||||||
|
| |||||||||||||
96,918,470 | ||||||||||||||
Foods 2.7% | ||||||||||||||
General Mills, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.540% | 0.811(c) | 04/16/21 | 10,243 | 10,269,408 | ||||||||||
Sr. Unsec’d. Notes | 3.200 | 04/16/21 | 16,500 | 16,831,600 | ||||||||||
Mondelez International Holdings Netherlands BV, | ||||||||||||||
Gtd. Notes, 144A | 2.000 | 10/28/21 | 10,000 | 10,175,280 | ||||||||||
Mondelez International, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 0.625 | 07/01/22 | 21,900 | 22,015,954 | ||||||||||
Nestle Holdings, Inc., | ||||||||||||||
Gtd. Notes, 144A | 3.100 | 09/24/21 | 15,500 | 15,952,084 | ||||||||||
|
| |||||||||||||
75,244,326 | ||||||||||||||
Hand/Machine Tools 0.0% | ||||||||||||||
Stanley Black & Decker, Inc., | ||||||||||||||
Gtd. Notes | 3.400 | 12/01/21 | 1,000 | 1,031,510 | ||||||||||
Healthcare-Products 0.2% | ||||||||||||||
Medtronic, Inc., | ||||||||||||||
Gtd. Notes | 3.150 | 03/15/22 | 2,200 | 2,299,931 | ||||||||||
Stryker Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 2.625 | 03/15/21 | 3,350 | 3,390,204 | ||||||||||
|
| |||||||||||||
5,690,135 |
See Notes to Financial Statements.
26 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Healthcare-Services 0.5% | ||||||||||||||
Anthem, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 2.500% | 11/21/20 | 15,000 | $ | 15,092,642 | |||||||||
Insurance 3.6% | ||||||||||||||
AIA Group Ltd. (Hong Kong), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.520% | 0.826(c) | 09/20/21 | 24,400 | 24,256,788 | ||||||||||
Ambac Assurance Corp., | ||||||||||||||
Sub. Notes, 144A | 5.100 | –(rr) | 11 | 14,544 | ||||||||||
Chubb INA Holdings, Inc., | ||||||||||||||
Gtd. Notes | 2.300 | 11/03/20 | 6,930 | 6,952,622 | ||||||||||
Jackson National Life Global Funding, | ||||||||||||||
Sr. Sec’d. Notes, 144A, 3 Month LIBOR + 0.480% | 0.795(c) | 06/11/21 | 16,800 | 16,845,300 | ||||||||||
Marsh & McLennan Cos., Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.500 | 12/29/20 | 3,485 | 3,529,452 | ||||||||||
Metropolitan Life Global Funding I, | ||||||||||||||
Sec’d. Notes, 144A | 3.450 | 10/09/21 | 9,250 | 9,594,644 | ||||||||||
Sec’d. Notes, 144A, MTN | 3.375 | 01/11/22 | 13,750 | 14,351,187 | ||||||||||
New York Life Global Funding, | ||||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.320% | 0.821(c) | 08/06/21 | 5,500 | 5,516,592 | ||||||||||
Sr. Sec’d. Notes, 144A, 3 Month LIBOR + 0.440% | 0.706(c) | 07/12/22 | 16,760 | 16,822,911 | ||||||||||
Principal Life Global Funding II, | ||||||||||||||
Sr. Sec’d. Notes, 144A | 2.625 | 11/19/20 | 1,750 | 1,761,781 | ||||||||||
|
| |||||||||||||
99,645,821 | ||||||||||||||
Lodging 0.3% | ||||||||||||||
Marriott International, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, Series Y, 3 Month LIBOR + 0.600% | 0.950(c) | 12/01/20 | 8,000 | 7,966,079 | ||||||||||
Machinery-Construction & Mining 0.9% | ||||||||||||||
Caterpillar Financial Services Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 1.700 | 08/09/21 | 1,471 | 1,491,840 | ||||||||||
Sr. Unsec’d. Notes, GMTN, 3 Month LIBOR + 0.290% | 0.621(c) | 09/04/20 | 14,000 | 14,004,492 | ||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.350% | 0.668(c) | 12/07/20 | 9,600 | 9,606,369 | ||||||||||
|
| |||||||||||||
25,102,701 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 27 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Machinery-Diversified 1.4% | ||||||||||||||
John Deere Capital Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.260% | 0.570%(c) | 09/10/21 | 10,600 | $ | 10,616,606 | |||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.490% | 0.803(c) | 06/13/22 | 10,000 | 10,036,854 | ||||||||||
Sr. Unsec’d. Notes, MTN | 3.900 | 07/12/21 | 4,600 | 4,760,765 | ||||||||||
Otis Worldwide Corp., | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.450% | 0.754(c) | 04/05/23 | 13,225 | 13,180,675 | ||||||||||
|
| |||||||||||||
38,594,900 | ||||||||||||||
Media 1.4% | ||||||||||||||
Comcast Corp., | ||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.330% | 0.626(c) | 10/01/20 | 25,000 | 25,013,450 | ||||||||||
TWDC Enterprises 18 Corp., | ||||||||||||||
Gtd. Notes, MTN, 3 Month LIBOR + 0.390% | 0.721(c) | 03/04/22 | 3,750 | 3,751,946 | ||||||||||
Walt Disney Co. (The), | ||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.250% | 0.600(c) | 09/01/21 | 3,000 | 2,998,172 | ||||||||||
Gtd. Notes, 3 Month LIBOR + 0.390% | 0.740(c) | 09/01/22 | 8,000 | 7,989,104 | ||||||||||
|
| |||||||||||||
39,752,672 | ||||||||||||||
Oil & Gas 2.5% | ||||||||||||||
Exxon Mobil Corp., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.370% | 0.688(c) | 03/06/22 | 1,362 | 1,367,021 | ||||||||||
Sr. Unsec’d. Notes | 1.571 | 04/15/23 | 21,000 | 21,656,403 | ||||||||||
Phillips 66, | ||||||||||||||
Gtd. Notes | 3.700 | 04/06/23 | 7,200 | 7,734,861 | ||||||||||
Saudi Arabian Oil Co. (Saudi Arabia), | ||||||||||||||
Sr. Unsec’d. Notes, 144A, MTN | 2.750 | 04/16/22 | 13,020 | 13,379,638 | ||||||||||
Total Capital International SA (France), | ||||||||||||||
Gtd. Notes | 2.218 | 07/12/21 | 11,000 | 11,184,478 | ||||||||||
Valero Energy Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 2.700 | 04/15/23 | 12,000 | 12,510,963 | ||||||||||
|
| |||||||||||||
67,833,364 | ||||||||||||||
Pharmaceuticals 4.1% | ||||||||||||||
AbbVie, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.375 | 11/14/21 | 4,000 | 4,151,526 | ||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.350% | 0.724(c) | 05/21/21 | 11,000 | 11,006,569 | ||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.460% | 0.841(c) | 11/19/21 | 5,000 | 5,006,178 |
See Notes to Financial Statements.
28 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Pharmaceuticals (cont’d.) | ||||||||||||||
AbbVie, Inc., (cont’d.) | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.650% | 1.024%(c) | 11/21/22 | 4,000 | $ | 4,012,162 | |||||||||
AstraZeneca PLC (United Kingdom), | ||||||||||||||
Sr. Unsec’d. Notes | 2.375 | 11/16/20 | 26,000 | 26,148,374 | ||||||||||
Bayer US Finance II LLC (Germany), | ||||||||||||||
Gtd. Notes, 144A | 3.500 | 06/25/21 | 7,500 | 7,672,777 | ||||||||||
Bristol-Myers Squibb Co., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.200% | 0.586(c) | 11/16/20 | 17,800 | 17,807,654 | ||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.380% | 0.766(c) | 05/16/22 | 4,000 | 4,014,304 | ||||||||||
Cigna Corp., | ||||||||||||||
Gtd. Notes | 3.200 | 09/17/20 | 9,936 | 9,971,860 | ||||||||||
GlaxoSmithKline Capital PLC (United Kingdom), | ||||||||||||||
Gtd. Notes | 3.125 | 05/14/21 | 3,550 | 3,626,697 | ||||||||||
McKesson Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 3.650 | 11/30/20 | 2,000 | 2,021,055 | ||||||||||
Pfizer, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 1.950 | 06/03/21 | 9,100 | 9,230,703 | ||||||||||
Sr. Unsec’d. Notes | 5.200 | 08/12/20 | 7,313 | 7,320,573 | ||||||||||
|
| |||||||||||||
111,990,432 | ||||||||||||||
Pipelines 1.5% | ||||||||||||||
Enterprise Products Operating LLC, | ||||||||||||||
Gtd. Notes | 3.500 | 02/01/22 | 19,250 | 20,073,438 | ||||||||||
Kinder Morgan Energy Partners LP, | ||||||||||||||
Gtd. Notes | 3.500 | 03/01/21 | 10,830 | 10,958,119 | ||||||||||
Kinder Morgan, Inc., | ||||||||||||||
Gtd. Notes, 144A | 5.000 | 02/15/21 | 2,604 | 2,655,243 | ||||||||||
MPLX LP, | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.900% | 1.213(c) | 09/09/21 | 7,000 | 6,958,031 | ||||||||||
|
| |||||||||||||
40,644,831 | ||||||||||||||
Retail 1.2% | ||||||||||||||
AutoZone, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.700 | 04/15/22 | 5,730 | 5,992,488 | ||||||||||
Home Depot, Inc. (The), | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.310% | 0.660(c) | 03/01/22 | 2,419 | 2,424,644 | ||||||||||
Sr. Unsec’d. Notes | 2.625 | 06/01/22 | 6,000 | 6,249,764 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 29 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Retail (cont’d.) | ||||||||||||||
McDonald’s Corp., | ||||||||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.430% | 0.677%(c) | 10/28/21 | 3,100 | $ | 3,104,621 | |||||||||
Starbucks Corp., | ||||||||||||||
Sr. Unsec’d. Notes | 1.300 | 05/07/22 | 2,000 | 2,029,334 | ||||||||||
Walmart, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.125 | 06/23/21 | 11,717 | 12,015,103 | ||||||||||
|
| |||||||||||||
31,815,954 | ||||||||||||||
Semiconductors 0.4% | ||||||||||||||
Intel Corp., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.350% | 0.798(c) | 05/11/22 | 10,000 | 10,034,876 | ||||||||||
Software 0.4% | ||||||||||||||
Electronic Arts, Inc., | ||||||||||||||
Sr. Unsec’d. Notes | 3.700 | 03/01/21 | 8,000 | 8,133,803 | ||||||||||
Infor, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, 144A | 1.450 | 07/15/23 | 1,800 | 1,820,338 | ||||||||||
|
| |||||||||||||
9,954,141 | ||||||||||||||
Telecommunications 0.4% | ||||||||||||||
Rogers Communications, Inc. (Canada), | ||||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.600% | 0.906(c) | 03/22/22 | 10,400 | 10,462,380 | ||||||||||
Transportation 0.9% | ||||||||||||||
FedEx Corp., | ||||||||||||||
Gtd. Notes | 3.400 | 01/14/22 | 1,000 | 1,041,111 | ||||||||||
Ryder System, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, MTN | 2.875 | 06/01/22 | 6,000 | 6,228,105 | ||||||||||
United Parcel Service, Inc., | ||||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.450% | 0.746(c) | 04/01/23 | 5,144 | 5,170,626 | ||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.380% | 0.766(c) | 05/16/22 | 11,800 | 11,837,018 | ||||||||||
Sr. Unsec’d. Notes | 3.125 | 01/15/21 | 1,000 | 1,012,767 | ||||||||||
|
| |||||||||||||
25,289,627 |
See Notes to Financial Statements.
30 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
CORPORATE BONDS (Continued) | ||||||||||||||
Trucking & Leasing 0.7% | ||||||||||||||
Aviation Capital Group LLC, | ||||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.950% | 1.300%(c) | 06/01/21 | 19,000 | $ | 18,209,608 | |||||||||
|
| |||||||||||||
TOTAL CORPORATE BONDS | 1,363,009,528 | |||||||||||||
|
| |||||||||||||
TOTAL LONG-TERM INVESTMENTS | 2,200,000,851 | |||||||||||||
|
| |||||||||||||
Shares | ||||||||||||||
SHORT-TERM INVESTMENTS 19.2% | ||||||||||||||
AFFILIATED MUTUAL FUND 11.8% | ||||||||||||||
PGIM Core Ultra Short Bond Fund | 321,687,382 | 321,687,382 | ||||||||||||
|
| |||||||||||||
Interest Rate | Maturity Date | Principal Amount (000)# | ||||||||||||
CERTIFICATES OF DEPOSIT 2.3% | ||||||||||||||
Barclays Bank PLC, 3 Month LIBOR + 0.450% | 0.721%(c) | 10/21/20 | 21,750 | 21,757,107 | ||||||||||
BNP Paribas SA, 3 Month LIBOR + 0.250% | 0.937(c) | 02/01/21 | 12,000 | 11,987,651 | ||||||||||
DNB Bank ASA, 3 Month LIBOR + 0.280% | 0.584(c) | 10/08/20 | 9,500 | 9,505,143 | ||||||||||
Sumitomo Mitsui Banking Corp., | ||||||||||||||
3 Month LIBOR + 0.350% | 0.616(c) | 07/12/21 | 5,000 | 5,002,664 | ||||||||||
3 Month LIBOR + 0.355% | 0.741(c) | 05/13/21 | 16,000 | 16,001,909 | ||||||||||
|
| |||||||||||||
TOTAL CERTIFICATES OF DEPOSIT | 64,254,474 | |||||||||||||
|
| |||||||||||||
COMMERCIAL PAPER 5.1% | ||||||||||||||
Boeing Co. (The), 144A | 2.205(n) | 11/18/20 | 21,000 | 20,910,808 | ||||||||||
Glencore Funding LLC, | ||||||||||||||
144A | 0.510(n) | 08/10/20 | 15,000 | 14,998,359 | ||||||||||
144A | 0.510(n) | 08/12/20 | 5,000 | 4,999,338 | ||||||||||
ING US Funding LLC, 144A, 3 Month LIBOR + 0.170% | 0.475(c) | 09/23/20 | 20,000 | 20,006,109 | ||||||||||
Marriott International, Inc., 144A | 1.847(n) | 09/04/20 | 10,000 | 9,991,367 | ||||||||||
Nissan Motor Acceptance Corp., | ||||||||||||||
144A | 1.942(n) | 12/11/20 | 5,000 | 4,937,804 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 31 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||||
Nissan Motor Acceptance Corp., (cont’d.) | ||||||||||||||
144A | 1.963%(n) | 12/15/20 | $ | 5,000 | 4,935,819 | |||||||||
144A | 1.973(n) | 12/14/20 | 7,500 | 7,404,488 | ||||||||||
PepsiCo, Inc., 144A | 2.281(n) | 10/30/20 | 20,000 | 19,990,850 | ||||||||||
Shell International Finance BV, 144A | 2.635(n) | 10/05/20 | 10,000 | 9,994,757 | ||||||||||
Walgreens Boots Alliance, Inc., | ||||||||||||||
144A | 1.847(n) | 08/28/20 | 2,000 | 1,999,684 | ||||||||||
144A | 2.096(n) | 09/10/20 | 10,000 | 9,995,649 | ||||||||||
144A | 2.097(n) | 09/15/20 | 10,000 | 9,994,288 | ||||||||||
|
| |||||||||||||
TOTAL COMMERCIAL PAPER | 140,159,320 | |||||||||||||
|
| |||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 526,101,176 | |||||||||||||
|
| |||||||||||||
TOTAL INVESTMENTS 99.6% | 2,726,102,027 | |||||||||||||
Other assets in excess of liabilities(z) 0.4% | 10,634,230 | |||||||||||||
|
| |||||||||||||
NET ASSETS 100.0% | $ | 2,736,736,257 | ||||||||||||
|
|
See the Glossary for a list of the abbreviation(s) used in the semiannual report.
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at July 31, 2020. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of July 31, 2020. 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. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(rr) | Perpetual security with no stated maturity date. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund. |
(z) | Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments: |
Interest rate swap agreements outstanding at July 31, 2020:
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at July 31, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements: | ||||||||||||||||||||||||
83,000 | 11/02/20 | 2.806%(S) | 3 Month LIBOR(1)(Q) | $ | (801,961 | ) | $ | (991,253 | ) | $ | (189,292 | ) | ||||||||||||
109,000 | 11/10/20 | 1.943%(S) | 3 Month LIBOR(1)(Q) | 933,590 | (868,101 | ) | (1,801,691 | ) |
See Notes to Financial Statements.
32 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Interest rate swap agreements outstanding at July 31, 2020 (continued):
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at July 31, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally Cleared Interest Rate Swap Agreements (cont’d.): | ||||||||||||||||||||||||
30,943 | 12/21/20 | 3.008%(S) | 3 Month LIBOR(1)(Q) | $ (263,857 | ) | $ (424,792 | ) | $ (160,935 | ) | |||||||||||||||
22,854 | 03/11/21 | 2.850%(S) | 3 Month LIBOR(1)(Q) | (207,181 | ) | (605,158 | ) | (397,977 | ) | |||||||||||||||
173,790 | 05/09/21 | 2.855%(S) | 3 Month LIBOR(1)(Q) | (774,544 | ) | (4,457,494 | ) | (3,682,950 | ) | |||||||||||||||
26,500 | 07/27/21 | 2.929%(S) | 3 Month LIBOR(1)(Q) | (440,672 | ) | (720,861 | ) | (280,189 | ) | |||||||||||||||
95,600 | 10/02/21 | 1.898%(S) | 3 Month LIBOR(1)(Q) | 2,013,686 | (2,469,995 | ) | (4,483,681 | ) | ||||||||||||||||
22,000 | 10/04/21 | 3.046%(S) | 3 Month LIBOR(1)(Q) | (535,710 | ) | (944,805 | ) | (409,095 | ) | |||||||||||||||
33,301 | 01/11/22 | 2.672%(S) | 3 Month LIBOR(1)(Q) | (135,630 | ) | (1,236,394 | ) | (1,100,764 | ) | |||||||||||||||
7,000 | 01/24/22 | 2.426%(S) | 3 Month LIBOR(1)(Q) | — | (234,413 | ) | (234,413 | ) | ||||||||||||||||
24,550 | 04/01/22 | 2.265%(S) | 3 Month LIBOR(1)(Q) | 11,634 | (1,027,227 | ) | (1,038,861 | ) | ||||||||||||||||
49,030 | 04/12/22 | 2.357%(S) | 3 Month LIBOR(1)(Q) | (286,839 | ) | (2,147,067 | ) | (1,860,228 | ) | |||||||||||||||
74,000 | 06/15/22 | 1.873%(S) | 3 Month LIBOR(1)(Q) | (116,415 | ) | (2,485,581 | ) | (2,369,166 | ) | |||||||||||||||
21,900 | 07/02/22 | (0.001)%(A) | 1 Day USOIS(1)(A) | — | 704 | 704 | ||||||||||||||||||
18,500 | 08/22/22 | 1.421%(S) | 3 Month LIBOR(1)(Q) | (17,603 | ) | (575,516 | ) | (557,913 | ) | |||||||||||||||
59,800 | 09/03/22 | 1.919%(S) | 3 Month LIBOR(1)(Q) | (586,731 | ) | (2,614,061 | ) | (2,027,330 | ) | |||||||||||||||
15,000 | 01/30/23 | 1.467%(S) | 3 Month LIBOR(1)(Q) | — | (485,722 | ) | (485,722 | ) | ||||||||||||||||
45,200 | 05/11/23 | 2.250%(A) | 1 Day USOIS(1)(A) | (2,725,373 | ) | (2,954,703 | ) | (229,330 | ) | |||||||||||||||
25,000 | 11/29/24 | 0.090%(A) | 1 Day USOIS(1)(A) | (3,784 | ) | (82,143 | ) | (78,359 | ) | |||||||||||||||
$(3,937,390 | ) | $(25,324,582 | ) | $(21,387,192 | ) |
(1) | The Fund pays the fixed rate and receives the floating rate. |
(2) | The Fund pays the floating rate and receives the fixed rate. |
Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:
Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:
Broker | Cash and/or Foreign Currency | Securities Market Value | ||||||||
Citigroup Global Markets, Inc. | $5,870,000 | $— | ||||||||
|
|
|
|
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.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 33 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
The following is a summary of the inputs used as of July 31, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | |||||||||||||
Investments in Securities | |||||||||||||||
Assets | |||||||||||||||
Asset-Backed Securities | |||||||||||||||
Automobiles | $ | — | $ | 225,089,674 | $ | — | |||||||||
Credit Cards | — | 94,742,272 | — | ||||||||||||
Home Equity Loans | — | 39,702,461 | — | ||||||||||||
Residential Mortgage-Backed Securities | — | 13,737,241 | — | ||||||||||||
Student Loans | — | 1,253,950 | — | ||||||||||||
Certificates of Deposit | — | 114,210,256 | — | ||||||||||||
Commercial Mortgage-Backed Securities | — | 412,509,943 | — | ||||||||||||
Corporate Bonds | — | 1,363,009,528 | — | ||||||||||||
Affiliated Mutual Fund | 321,687,382 | — | — | ||||||||||||
Commercial Paper | — | 140,159,320 | — | ||||||||||||
|
|
|
| ||||||||||||
Total | $ | 321,687,382 | $ | 2,404,414,645 | $— | ||||||||||
|
|
|
| ||||||||||||
Other Financial Instruments* | |||||||||||||||
Assets | |||||||||||||||
Centrally Cleared Interest Rate Swap Agreement | $ | — | $ | 704 | $— | ||||||||||
|
|
|
| ||||||||||||
Liabilities | |||||||||||||||
Centrally Cleared Interest Rate Swap Agreements | $ | — | $ | (21,387,896 | ) | $— | |||||||||
|
|
|
|
* | 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. |
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of July 31, 2020 were as follows:
Commercial Mortgage-Backed Securities | 15.1 | % | ||
Banks | 13.1 | |||
Affiliated Mutual Fund | 11.8 | |||
Automobiles | 8.2 | |||
Commercial Paper | 5.1 | |||
Certificates of Deposit | 4.1 | |||
Pharmaceuticals | 4.1 | |||
Insurance | 3.6 | |||
Electric | 3.5 | |||
Credit Cards | 3.5 | |||
Auto Manufacturers | 3.4 | |||
Foods | 2.7 | |||
Oil & Gas | 2.5 |
Computers | 1.8 | % | ||
Pipelines | 1.5 | |||
Home Equity Loans | 1.5 | |||
Media | 1.4 | |||
Machinery-Diversified | 1.4 | |||
Retail | 1.2 | |||
Diversified Financial Services | 1.0 | |||
Transportation | 0.9 | |||
Machinery-Construction & Mining | 0.9 | |||
Chemicals | 0.9 | |||
Airlines | 0.7 | |||
Trucking & Leasing | 0.7 | |||
Aerospace & Defense | 0.6 |
See Notes to Financial Statements.
34 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Industry Classification (continued):
Apparel | 0.6 | % | ||
Healthcare-Services | 0.5 | |||
Commercial Services | 0.5 | |||
Residential Mortgage-Backed Securities | 0.5 | |||
Telecommunications | 0.4 | |||
Beverages | 0.4 | |||
Semiconductors | 0.4 | |||
Software | 0.4 | |||
Lodging | 0.3 | |||
Cosmetics/Personal Care | 0.2 | |||
Healthcare-Products | 0.2 |
Student Loans | 0.0 | *% | ||
Hand/Machine Tools | 0.0 | * | ||
99.6 | ||||
Other assets in excess of liabilities | 0.4 | |||
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 interest rate contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of July 31, 2020 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for as hedging instruments, carried at fair value | Asset Derivatives | Liability Derivatives | ||||||||||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |||||||||
Interest rate contracts | Due from/to broker-variation margin swaps | $ | 704 | * | Due from/to broker-variation margin swaps | $ | 21,387,896 | * | ||||
|
|
|
|
* | 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 six months ended July 31, 2020 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||
Derivatives not accounted for as hedging instruments, carried at fair value | Swaps | |
Interest rate contracts | $(4,492,232) |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 35 |
PGIM Core Short-Term Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | |||||
Derivatives not accounted for carried at fair value | Swaps | ||||
Interest rate contracts | $ | (8,041,269 | ) | ||
|
|
For the six months ended July 31, 2020, the Fund’s average volume of derivative activities is as follows:
Interest Rate |
$960,403,667 |
(1) | Notional Amount in USD. |
See Notes to Financial Statements.
36 |
PGIM Core Short-Term Bond Fund
Statement of Assets & Liabilities (unaudited)
as of July 31, 2020
Assets | |||||
Investments at value: | |||||
Unaffiliated investments (cost $2,375,525,721) | $ | 2,404,414,645 | |||
Affiliated investments (cost $321,687,382) | 321,687,382 | ||||
Cash | 1,906 | ||||
Dividends and interest receivable | 6,860,924 | ||||
Deposit with broker for centrally cleared/exchange-traded derivatives | 5,870,000 | ||||
Receivable for Fund shares sold | 1,500,000 | ||||
Due from broker—variation margin swaps | 57,464 | ||||
Prepaid expenses and other assets | 10,223 | ||||
|
| ||||
Total Assets | 2,740,402,544 | ||||
|
| ||||
Liabilities | |||||
Dividends payable | 2,017,886 | ||||
Payable for Fund shares reacquired | 1,500,000 | ||||
Accrued expenses and other liabilities | 71,486 | ||||
Management fee payable | 59,379 | ||||
Affiliated transfer agent fee payable | 16,667 | ||||
Trustees’ fees payable | 869 | ||||
|
| ||||
Total Liabilities | 3,666,287 | ||||
|
| ||||
Net Assets | $ | 2,736,736,257 | |||
|
| ||||
Net assets were comprised of: | |||||
Shares of beneficial interest, at par | $ | 297,451 | |||
Paid-in capital in excess of par | 2,765,904,495 | ||||
Total distributable earnings (loss) | (29,465,689 | ) | |||
|
| ||||
Net assets, July 31, 2020 | $ | 2,736,736,257 | |||
|
| ||||
Net asset value and redemption price per share ($2,736,736,257 ÷ 297,450,918 shares of beneficial interest issued and outstanding) | $ | 9.20 | |||
|
|
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 37 |
PGIM Core Short-Term Bond Fund
Statement of Operations (unaudited)
Six Months Ended July 31, 2020
Net Investment Income (Loss) | |||||
Income | |||||
Interest income | $ | 30,573,799 | |||
Affiliated dividend income | 485,737 | ||||
|
| ||||
Total income | 31,059,536 | ||||
|
| ||||
Expenses | |||||
Management fee | 350,199 | ||||
Custodian and accounting fees | 63,921 | ||||
Transfer agent’s fees and expenses (including affiliated expense of $ 49,751) | 49,751 | ||||
Audit fee | 19,219 | ||||
Legal fees and expenses | 7,952 | ||||
Shareholders’ reports | 7,908 | ||||
Trustees’ fees | 5,371 | ||||
Miscellaneous | 19,703 | ||||
|
| ||||
Total expenses | 524,024 | ||||
|
| ||||
Net investment income (loss) | 30,535,512 | ||||
|
| ||||
Realized And Unrealized Gain (Loss) On Investments | |||||
Net realized gain (loss) on: | |||||
Investment transactions | (36,517,518 | ) | |||
Swap agreement transactions | (4,492,232 | ) | |||
|
| ||||
(41,009,750 | ) | ||||
|
| ||||
Net change in unrealized appreciation (depreciation) on: | |||||
Investments | 42,584,082 | ||||
Swap agreements | (8,041,269 | ) | |||
|
| ||||
34,542,813 | |||||
|
| ||||
Net gain (loss) on investment transactions | (6,466,937 | ) | |||
|
| ||||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 24,068,575 | |||
|
|
See Notes to Financial Statements.
38 |
PGIM Core Short-Term Bond Fund
Statements of Changes in Net Assets (unaudited)
Six Months Ended July 31, 2020 | Year Ended January 31, 2020 | |||||||||
Increase (Decrease) in Net Assets |
| |||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 30,535,512 | $ | 83,275,708 | ||||||
Net realized gain (loss) on investment transactions | (41,009,750 | ) | 23,840,046 | |||||||
Net change in unrealized appreciation (depreciation) on investments | 34,542,813 | (16,620,831 | ) | |||||||
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 24,068,575 | 90,494,923 | ||||||||
|
|
|
| |||||||
Dividends and Distributions |
| |||||||||
Distributions from distributable earnings | (25,971,812 | ) | (92,073,145 | ) | ||||||
|
|
|
| |||||||
Fund share transactions |
| |||||||||
Net proceeds from shares sold | 1,717,868,066 | 299,662,161 | ||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 7,466,078 | 30,665,787 | ||||||||
Cost of shares reacquired | (1,698,589,989 | ) | (528,079,289 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in net assets from Fund share transactions | 26,744,155 | (197,751,341 | ) | |||||||
|
|
|
| |||||||
Total increase (decrease) | 24,840,918 | (199,329,563 | ) | |||||||
Net Assets: |
| |||||||||
Beginning of period | 2,711,895,339 | 2,911,224,902 | ||||||||
|
|
|
| |||||||
End of period | $ | 2,736,736,257 | $ | 2,711,895,339 | ||||||
|
|
|
|
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 39 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
SHORT-TERM INVESTMENTS 102.5% | ||||||||||||
CERTIFICATES OF DEPOSIT 21.3% | ||||||||||||
Adventist Health System/Sunbelt Inc. | 1.670% | 04/06/21 | 20,000 | $ | 20,045,262 | |||||||
Bank of America NA, | ||||||||||||
US Federal Funds Effective Rate + 0.180% | 0.280(c) | 11/05/20 | 44,000 | 44,086,949 | ||||||||
3 Month LIBOR + 0.080% | 0.504(c) | 08/14/20 | 15,000 | 15,000,583 | ||||||||
Bank of Montreal, | ||||||||||||
3 Month LIBOR + 0.050% | 0.297(c) | 01/28/21 | 15,200 | 15,198,523 | ||||||||
Secured Overnight Financing Rate + 0.230% | 0.330(c) | 04/27/21 | 25,000 | 24,994,377 | ||||||||
1 Month LIBOR + 0.250% | 0.413(c) | 08/07/20 | 150,000 | 150,007,659 | ||||||||
3 Month LIBOR + 0.050% | 0.606(c) | 02/04/21 | 32,000 | 31,996,768 | ||||||||
Bank of Montreal | 1.400 | 01/04/21 | 85,000 | 85,430,641 | ||||||||
Bank of Montreal | 1.400 | 01/04/21 | 100,000 | 100,506,639 | ||||||||
Bank of Nova Scotia, | ||||||||||||
3 Month LIBOR + 0.080% | 0.350(c) | 07/29/21 | 95,000 | 94,999,997 | ||||||||
3 Month LIBOR + 0.100% | 0.548(c) | 02/08/21 | 64,000 | 64,022,957 | ||||||||
3 Month LIBOR + 0.280% | 0.586(c) | 09/21/20 | 3,500 | 3,501,539 | ||||||||
BGC Financial, L.P. | 1.100 | 10/15/20 | 100,000 | 100,195,933 | ||||||||
BNP Paribas SA, | ||||||||||||
Secured Overnight Financing Rate + 0.200% | 0.300(c) | 02/10/21 | 120,000 | 119,994,150 | ||||||||
1 Month LIBOR + 0.240% | 0.418(c) | 07/13/21 | 100,000 | 100,014,193 | ||||||||
1 Month LIBOR + 0.270% | 0.450(c) | 08/21/20 | 129,000 | 128,990,657 | ||||||||
Canadian Imperial Bank of Commerce | — (p) | 08/03/21 | 179,000 | 179,000,000 | ||||||||
Canadian Imperial Bank of Commerce, | 0.428(c) | 08/06/21 | 50,000 | 50,000,000 | ||||||||
Cooperatieve Rabobank UA, | 0.364(c) | 08/03/20 | 76,000 | 76,001,389 | ||||||||
Credit Agricole Corporate & Investment Bank, | 0.437(c) | 07/08/21 | 115,000 | 115,096,120 | ||||||||
Credit Industriel et Commercial, | ||||||||||||
US Federal Funds Effective Rate + 0.210% | 0.310(c) | 02/04/21 | 50,000 | 50,002,512 | ||||||||
US Federal Funds Effective Rate + 0.210% | 0.310(c) | 02/10/21 | 99,000 | 99,005,107 | ||||||||
3 Month LIBOR + 0.170% | 0.485(c) | 06/11/21 | 275,000 | 275,070,394 | ||||||||
3 Month LIBOR + 0.100% | 0.524(c) | 02/16/21 | 65,000 | 65,013,991 | ||||||||
Credit Suisse AG, | ||||||||||||
Secured Overnight Financing Rate + 0.270% | 0.370(c) | 01/29/21 | 149,000 | 149,057,910 | ||||||||
Secured Overnight Financing Rate + 0.330% | 0.430(c) | 01/15/21 | 14,000 | 13,999,560 | ||||||||
Credit Suisse AG | 1.970 | 11/20/20 | 6,000 | 6,030,582 | ||||||||
DNB Bank ASA, | 0.388(c) | 08/12/20 | 100,000 | 100,007,807 | ||||||||
Goldman Sachs Bank USA, | 0.724(c) | 08/21/20 | 179,000 | 179,026,043 |
See Notes to Financial Statements.
40 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CERTIFICATES OF DEPOSIT (Continued) | ||||||||||||
Goldman Sachs Bank USA, (cont’d.) | ||||||||||||
Secured Overnight Financing Rate + 0.250% (Cap N/A, Floor 0.000%) | 0.813%(c) | 02/16/21 | 71,000 | $ | 71,022,432 | |||||||
Lloyds Bank Corporate Markets PLC, | 0.797(c) | 09/24/20 | 5,000 | 5,003,894 | ||||||||
Mizuho Bank Ltd., | 0.337(c) | 11/20/20 | 50,000 | 49,998,378 | ||||||||
1 Month LIBOR + 0.180% | 0.353(c) | 02/26/21 | 12,000 | 11,997,011 | ||||||||
1 Month LIBOR + 0.200% | 0.366(c) | 01/08/21 | 75,000 | 75,000,477 | ||||||||
1 Month LIBOR + 0.210% | 0.373(c) | 08/07/20 | 5,000 | 5,000,216 | ||||||||
1 Month LIBOR + 0.200% | 0.388(c) | 01/11/21 | 185,000 | 185,000,096 | ||||||||
Mizuho Bank Ltd. | 1.730 | 01/22/21 | 11,000 | 11,077,131 | ||||||||
MUFG Bank Ltd. | 0.230 | 11/12/20 | 50,000 | 50,000,866 | ||||||||
MUFG Bank Ltd. | 0.240 | 10/16/20 | 200,000 | 200,020,088 | ||||||||
MUFG Bank Ltd. | 0.240 | 10/20/20 | 80,000 | 80,007,553 | ||||||||
MUFG Bank Ltd., | 1.016(c) | 02/04/21 | 32,000 | 32,037,896 | ||||||||
Natixis SA, | ||||||||||||
Secured Overnight Financing Rate + 0.250% | 0.350(c) | 02/12/21 | 80,000 | 80,027,337 | ||||||||
3 Month LIBOR + 0.150% | 0.421(c) | 07/21/21 | 50,000 | 49,999,996 | ||||||||
1 Month LIBOR + 0.300% | 0.466(c) | 08/10/20 | 142,000 | 142,012,338 | ||||||||
Natixis SA | 0.600 | 02/01/21 | 67,000 | 67,124,707 | ||||||||
Nordea Bank Abp, | 0.428(c) | 12/07/20 | 16,000 | 16,006,022 | ||||||||
3 Month LIBOR + 0.100% | 0.477(c) | 05/21/21 | 32,000 | 32,012,734 | ||||||||
3 Month LIBOR + 0.290% | 0.725(c) | 02/12/21 | 26,000 | 26,034,266 | ||||||||
Norinchukin Bank | 0.280 | 10/16/20 | 88,800 | 88,810,247 | ||||||||
Norinchukin Bank, | 0.336(c) | 01/29/21 | 151,000 | 150,982,177 | ||||||||
Norinchukin Bank | 0.340 | 01/21/21 | 130,000 | 130,010,018 | ||||||||
Northern Trust Co. (The) | 1.080 | 11/16/20 | 115,000 | 115,296,956 | ||||||||
Northern Trust Co. (The) | 1.100 | 12/16/20 | 135,000 | 135,440,076 | ||||||||
Royal Bank of Canada, | ||||||||||||
Secured Overnight Financing Rate + 0.190% | 0.290(c) | 03/19/21 | 100,000 | 99,969,207 | ||||||||
1 Month LIBOR + 0.230% | 0.418(c) | 08/10/20 | 207,000 | 207,007,889 | ||||||||
3 Month LIBOR + 0.140% | 0.463(c) | 07/30/21 | 100,000 | 99,999,998 | ||||||||
1 Month LIBOR + 0.760% | 0.935(c) | 01/15/21 | 150,000 | 150,570,090 | ||||||||
Royal Bank of Canada | — (p) | 08/02/21 | 100,000 | 99,960,000 | ||||||||
Skandinaviska Enskilda Banken AB, | 0.283(c) | 12/07/20 | 11,000 | 11,001,903 | ||||||||
3 Month LIBOR + 0.170% | 0.441(c) | 10/16/20 | 90,000 | 90,034,650 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 41 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CERTIFICATES OF DEPOSIT (Continued) | ||||||||||||
Skandinaviska Enskilda Banken AB, (cont’d.) | 0.441%(c) | 10/21/20 | 35,000 | $ | 35,014,398 | |||||||
Skandinaviska Enskilda Banken AB | 1.050 | 11/16/20 | 185,000 | 185,475,770 | ||||||||
Sumitomo Mitsui Banking Corp., | 0.352(c) | 02/03/21 | 71,000 | 70,991,868 | ||||||||
1 Month LIBOR + 0.190% (Cap N/A, Floor 0.000%) | 0.367(c) | 01/19/21 | 150,000 | 149,999,484 | ||||||||
1 Month LIBOR + 0.200% | 0.380(c) | 02/22/21 | 149,000 | 148,998,118 | ||||||||
Sumitomo Mitsui Banking Ltd., | ||||||||||||
Secured Overnight Financing Rate + 0.140% | 0.240(c) | 08/28/20 | 24,000 | 24,001,454 | ||||||||
3 Month LIBOR + 0.070% | 0.434(c) | 11/30/20 | 65,000 | 65,004,181 | ||||||||
Svenska Handelsbanken AB, | 0.424(c) | 07/06/21 | 174,000 | 174,064,241 | ||||||||
3 Month LIBOR + 0.110% | 0.447(c) | 12/03/20 | 75,000 | 75,027,475 | ||||||||
Toronto-Dominion Bank (The), | 0.395(c) | 08/20/21 | 50,000 | 50,000,002 | ||||||||
3 Month LIBOR + 0.200% | 0.447(c) | 01/28/21 | 86,500 | 86,575,610 | ||||||||
3 Month LIBOR + 0.190% | 0.466(c) | 10/07/20 | 9,000 | 9,004,125 | ||||||||
UBS AG | 1.350 | 01/14/21 | 274,000 | 275,331,234 | ||||||||
Wells Fargo Bank NA, | 0.415(c) | 08/14/20 | 175,000 | 175,009,336 | ||||||||
3 Month LIBOR + 0.150% | 0.466(c) | 01/15/21 | 25,000 | 25,014,945 | ||||||||
Westpac Banking Corp. | — (p) | 08/03/21 | 50,000 | 50,000,000 | ||||||||
Westpac Banking Corp., | 0.465(c) | 02/12/21 | 70,000 | 70,020,600 | ||||||||
|
| |||||||||||
TOTAL CERTIFICATES OF DEPOSIT | 6,694,297,732 | |||||||||||
|
| |||||||||||
COMMERCIAL PAPER 25.2% | ||||||||||||
Bank of Nova Scotia, | ||||||||||||
144A, US Federal Funds Effective Rate + 0.340% | 0.440(c) | 08/07/20 | 100,000 | 100,001,915 | ||||||||
144A, 3 Month LIBOR + 0.090% | 0.476(c) | 02/16/21 | 90,000 | 90,029,065 | ||||||||
BPCE SA, 144A | 1.609(n) | 08/10/20 | 25,000 | 24,999,306 | ||||||||
144A | 1.612(n) | 09/16/20 | 50,000 | 49,992,428 | ||||||||
144A | 1.613(n) | 09/30/20 | 22,000 | 21,995,452 | ||||||||
CDP Financial, Inc., 144A | 0.401(n) | 01/26/21 | 15,000 | 14,989,633 | ||||||||
144A | 0.552(n) | 01/21/21 | 25,000 | 24,983,808 | ||||||||
144A | 0.603(n) | 01/19/21 | 50,000 | 49,968,466 | ||||||||
144A | 0.653(n) | 01/15/21 | 25,000 | 24,985,067 | ||||||||
144A | 0.753(n) | 10/14/20 | 25,000 | 24,991,406 |
See Notes to Financial Statements.
42 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
CDP Financial, Inc., (cont’d.) | 0.805%(n) | 01/11/21 | 25,000 | $ | 24,985,878 | |||||||
144A | 0.904(n) | 10/13/20 | 25,000 | 24,991,521 | ||||||||
144A | 0.904(n) | 10/16/20 | 25,000 | 24,991,124 | ||||||||
144A | 1.004(n) | 09/11/20 | 50,000 | 49,993,000 | ||||||||
144A | 1.014(n) | 09/14/20 | 50,000 | 49,992,500 | ||||||||
144A | 1.358(n) | 09/01/20 | 100,000 | 99,989,333 | ||||||||
144A | 1.653(n) | 08/04/20 | 50,000 | 49,999,611 | ||||||||
Chevron Corp., | 1.615(n) | 09/17/20 | 108,030 | 108,012,427 | ||||||||
144A | 1.615(n) | 09/18/20 | 50,000 | 49,991,629 | ||||||||
144A | 2.268(n) | 08/03/20 | 95,000 | 94,999,209 | ||||||||
Citigroup Global Markets Inc., | 0.720(n) | 12/01/20 | 169,000 | 168,934,752 | ||||||||
144A | 0.863(n) | 08/04/20 | 125,000 | 124,998,750 | ||||||||
144A | 1.155(n) | 09/03/20 | 112,000 | 111,986,777 | ||||||||
144A | 1.510(n) | 09/02/20 | 70,000 | 69,992,043 | ||||||||
144A | 1.670(n) | 11/02/20 | 78,200 | 78,182,644 | ||||||||
144A | 1.686(n) | 09/01/20 | 91,500 | 91,489,996 | ||||||||
Commonwealth Bank of Australia, | 0.412(c) | 09/09/20 | 8,800 | 8,802,552 | ||||||||
144A, 3 Month LIBOR + 0.120% | 0.457(c) | 12/03/20 | 26,000 | 26,008,658 | ||||||||
DNB Bank ASA, | 0.220(n) | 10/16/20 | 225,000 | 224,924,443 | ||||||||
144A, 3 Month LIBOR + 0.080% | 0.336(c) | 07/20/21 | 18,000 | 18,001,731 | ||||||||
144A, 3 Month LIBOR + 0.040% | 0.581(c) | 02/05/21 | 95,000 | 95,040,850 | ||||||||
Eli Lilly and Company, | 1.611(n) | 09/01/20 | 161,000 | 160,915,707 | ||||||||
European Investment Bank, | 0.140(n) | 08/17/20 | 62,000 | 61,997,365 | ||||||||
European Investment Bank | 0.331(n) | 11/02/20 | 98,000 | 97,971,852 | ||||||||
Federation Des Caisses Desjardins, | 0.150(n) | 08/27/20 | 30,000 | 29,997,300 | ||||||||
144A | 0.180(n) | 10/21/20 | 10,000 | 9,996,082 | ||||||||
144A | 0.300(n) | 01/15/21 | 40,000 | 39,960,800 | ||||||||
144A, 1 Month LIBOR + 0.250% | 0.425(c) | 08/14/20 | 53,000 | 53,005,551 | ||||||||
FMS Wertmanagement, | 0.240(n) | 11/05/20 | 70,000 | 69,969,257 | ||||||||
144A | 0.250(n) | 01/15/21 | 6,000 | 5,994,344 | ||||||||
HSBC Bank PLC, | 0.410(c) | 11/25/20 | 187,000 | 187,029,320 | ||||||||
144A, 3 Month LIBOR + 0.230% | 0.496(c) | 10/13/20 | 6,000 | 6,002,915 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 43 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
HSBC Bank PLC, (cont’d.) | 0.591%(c) | 06/03/21 | 165,000 | $ | 165,082,272 | |||||||
Hydro-Quebec, | 0.170(n) | 11/04/20 | 50,000 | 49,978,266 | ||||||||
144A | 0.411(n) | 10/20/20 | 125,000 | 124,957,531 | ||||||||
144A | 0.486(n) | 10/19/20 | 125,000 | 124,958,334 | ||||||||
ING US Funding LLC, | 0.475(c) | 09/23/20 | 114,000 | 114,034,818 | ||||||||
JPMorgan Securities LLC, | 0.297(c) | 11/30/20 | 100,000 | 99,977,266 | ||||||||
144A, 3 Month LIBOR + 0.100% | 0.410(c) | 06/09/21 | 70,000 | 69,999,994 | ||||||||
144A, 1 Month LIBOR + 0.270% | 0.434(c) | 01/06/21 | 128,000 | 128,071,860 | ||||||||
144A, 3 Month LIBOR + 0.160% | 0.546(c) | 11/16/20 | 42,000 | 42,003,335 | ||||||||
Kingdom of Denmark | 0.200(n) | 10/13/20 | 55,000 | 54,985,303 | ||||||||
Kingdom of Denmark | 0.200(n) | 10/14/20 | 100,000 | 99,972,917 | ||||||||
Kingdom of Denmark | 0.331(n) | 10/28/20 | 92,000 | 91,970,432 | ||||||||
Kingdom of Denmark | 0.441(n) | 10/20/20 | 145,000 | 144,957,587 | ||||||||
LVMH Moet Hennessy Louis Vuitton SE, | 0.229(n) | 11/17/20 | 117,200 | 117,112,351 | ||||||||
144A | 0.230(n) | 11/12/20 | 100,000 | 99,928,356 | ||||||||
144A | 0.230(n) | 11/18/20 | 50,000 | 49,962,264 | ||||||||
144A | 0.230(n) | 11/19/20 | 50,000 | 49,961,921 | ||||||||
144A | 0.240(n) | 11/03/20 | 40,000 | 39,973,717 | ||||||||
144A | 0.240(n) | 11/16/20 | 18,000 | 17,986,662 | ||||||||
144A | 0.250(n) | 09/24/20 | 48,000 | 47,982,913 | ||||||||
144A | 0.380(n) | 08/20/20 | 80,000 | 79,994,534 | ||||||||
Michigan State University Board of Trustee | 0.240 | 08/11/20 | 21,470 | 21,470,429 | ||||||||
Michigan State University Board of Trustee | 0.240 | 09/23/20 | 18,400 | 18,400,817 | ||||||||
Mitsubishi International Corp. | 0.200(n) | 10/29/20 | 45,000 | 44,975,250 | ||||||||
Mitsubishi International Corp. | 0.220(n) | 11/10/20 | 61,000 | 60,959,903 | ||||||||
Mizuho Bank Ltd., | 0.250(n) | 11/13/20 | 50,000 | 49,972,583 | ||||||||
Nestle Capital Corp., | 0.843(n) | 10/13/20 | 100,000 | 99,976,772 | ||||||||
144A | 0.905(n) | 11/12/20 | 41,000 | 40,985,313 | ||||||||
Nestle Finance International Ltd., | 0.905(n) | 11/12/20 | 25,000 | 24,990,611 | ||||||||
Novartis Finance Corp., | 1.632(n) | 09/14/20 | 20,000 | 19,997,750 | ||||||||
144A | 1.708(n) | 08/10/20 | 90,000 | 89,995,225 | ||||||||
144A | 1.963(n) | 08/03/20 | 55,000 | 54,999,574 |
See Notes to Financial Statements.
44 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
Novartis Finance Corp., (cont’d.) | 1.994%(n) | 11/02/20 | 20,000 | $ | 19,991,540 | |||||||
OMERS Finance Trust, | 0.240(n) | 01/20/21 | 11,511 | 11,498,111 | ||||||||
Ontario Teachers’ Finance Trust, | 0.437(c) | 09/16/20 | 30,000 | 30,009,292 | ||||||||
144A, 1 Month LIBOR + 0.280% | 0.446(c) | 09/22/20 | 50,000 | 50,018,655 | ||||||||
144A | 0.501(n) | 10/27/20 | 15,000 | 14,994,207 | ||||||||
144A | 0.601(n) | 08/04/20 | 15,000 | 14,999,785 | ||||||||
144A | 0.704(n) | 01/08/21 | 50,000 | 49,955,054 | ||||||||
144A | 0.904(n) | 10/26/20 | 50,000 | 49,981,029 | ||||||||
144A | 1.542(n) | 10/19/20 | 35,000 | 34,988,333 | ||||||||
144A | 1.760(n) | 09/03/20 | 10,000 | 9,999,008 | ||||||||
PepsiCo, Inc., | 1.873(n) | 12/01/20 | 43,000 | 42,971,645 | ||||||||
Port Authority of New York and New Jersey | 0.420 | 10/08/20 | 14,670 | 14,671,103 | ||||||||
Port Authority of New York and New Jersey | 0.550 | 09/03/20 | 4,300 | 4,300,399 | ||||||||
Port Authority of New York and New Jersey | 0.700 | 08/17/20 | 8,115 | 8,115,375 | ||||||||
Province of British Columbia | 0.401(n) | 01/22/21 | 145,000 | 144,859,028 | ||||||||
Province of British Columbia | 0.481(n) | 10/20/20 | 61,000 | 60,976,530 | ||||||||
Province of Ontario | 0.497(n) | 10/19/20 | 200,000 | 199,963,112 | ||||||||
PSP Capital, Inc., | 0.185(n) | 10/20/20 | 36,150 | 36,136,498 | ||||||||
144A, Secured Overnight Financing Rate + 0.140% | 0.240(c) | 11/06/20 | 50,000 | 50,006,108 | ||||||||
144A, Secured Overnight Financing Rate + 0.250% | 0.350(c) | 08/07/20 | 55,000 | 55,002,352 | ||||||||
144A | 0.351(n) | 10/27/20 | 50,000 | 49,980,322 | ||||||||
144A | 0.351(n) | 10/28/20 | 25,000 | 24,990,049 | ||||||||
144A | 0.421(n) | 10/23/20 | 205,000 | 204,921,553 | ||||||||
Royal Bank of Canada, | 0.310(c) | 01/22/21 | 76,000 | 76,023,229 | ||||||||
Shell International Finance BV, | 2.635(n) | 10/05/20 | 156,000 | 155,918,205 | ||||||||
State of the Netherlands, | 0.330(n) | 08/31/20 | 75,000 | 74,985,727 | ||||||||
Svenska Handelsbanken AB, | 0.406(c) | 06/30/21 | 44,000 | 44,015,954 | ||||||||
144A, 1 Month LIBOR + 0.250% | 0.423(c) | 12/31/20 | 10,000 | 10,008,750 | ||||||||
Swedbank AB | 0.245(n) | 12/14/20 | 50,000 | 49,962,034 | ||||||||
Swedbank AB | 0.245(n) | 12/15/20 | 50,000 | 49,961,754 | ||||||||
Toronto-Dominion Bank (The), | 0.432(c) | 07/02/21 | 260,000 | 260,281,320 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 45 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
Total Capital Canada Ltd., | 0.200%(n) | 10/22/20 | 50,000 | $ | 49,978,904 | |||||||
144A | 0.220(n) | 10/14/20 | 75,000 | 74,972,656 | ||||||||
144A | 0.240(n) | 10/06/20 | 109,000 | 108,966,122 | ||||||||
144A | 0.240(n) | 10/07/20 | 14,000 | 13,995,557 | ||||||||
144A | 0.481(n) | 11/02/20 | 67,000 | 66,967,110 | ||||||||
Toyota Credit Canada, Inc. | 0.321(n) | 01/07/21 | 50,000 | 49,915,556 | ||||||||
Toyota Finance Australia Ltd., | 0.327(c) | 10/23/20 | 38,000 | 38,010,298 | ||||||||
Toyota Finance Australia Ltd. | 0.381(n) | 12/16/20 | 79,000 | 78,919,446 | ||||||||
Toyota Motor Credit Corp. | 0.250(n) | 11/25/20 | 24,000 | 23,980,110 | ||||||||
Toyota Motor Finance (Netherlands) BV | 0.381(n) | 12/14/20 | 130,000 | 129,842,844 | ||||||||
UBS AG, | ||||||||||||
144A, 3 Month LIBOR + 0.170% | 0.436(c) | 07/12/21 | 100,000 | 99,999,989 | ||||||||
144A, 3 Month LIBOR + 0.200% | 0.544(c) | 11/30/20 | 111,000 | 111,013,389 | ||||||||
Westpac Banking Corp., | ||||||||||||
144A, 3 Month LIBOR + 0.090% | 0.421(c) | 05/28/21 | 10,000 | 10,002,445 | ||||||||
144A, 3 Month LIBOR + 0.090% | 0.427(c) | 05/28/21 | 90,000 | 90,022,009 | ||||||||
|
| |||||||||||
TOTAL COMMERCIAL PAPER | 7,937,735,823 | |||||||||||
|
| |||||||||||
CORPORATE BONDS 1.0% | ||||||||||||
Auto Manufacturers 0.2% | ||||||||||||
BMW US Capital LLC, | ||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.370% | 0.794(c) | 08/14/20 | 49,839 | 49,846,447 | ||||||||
Gtd. Notes, 144A | 3.250 | 08/14/20 | 10,000 | 10,008,113 | ||||||||
Toyota Motor Credit Corp., | 0.490(c) | 10/23/20 | 15,000 | 15,005,687 | ||||||||
|
| |||||||||||
74,860,247 | ||||||||||||
Banks 0.7% | ||||||||||||
Canadian Imperial Bank of Commerce (Canada), | ||||||||||||
Sr. Unsec’d. Notes | 2.100 | 10/05/20 | 40,000 | 40,132,003 | ||||||||
Citibank NA, | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.300% | 0.572(c) | 10/20/20 | 11,710 | 11,716,556 | ||||||||
Sr. Unsec’d. Notes | 2.125 | 10/20/20 | 40,000 | 40,094,174 | ||||||||
Federation des Caisses Desjardins du Quebec (Canada), | 2.250 | 10/30/20 | 20,000 | 20,096,613 |
See Notes to Financial Statements.
46 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CORPORATE BONDS (Continued) | ||||||||||||
Banks (cont’d.) | ||||||||||||
Svenska Handelsbanken AB (Sweden), | ||||||||||||
Gtd. Notes, MTN | 2.450% | 03/30/21 | 25,000 | $ | 25,356,132 | |||||||
Wells Fargo Bank NA, | ||||||||||||
Sr. Unsec’d. Notes | 2.600 | 01/15/21 | 62,900 | 63,592,902 | ||||||||
|
| |||||||||||
200,988,380 | ||||||||||||
Insurance 0.1% | ||||||||||||
New York Life Global Funding, | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.160% | 0.456(c) | 10/01/20 | 27,560 | 27,568,953 | ||||||||
Principal Life Global Funding II, | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.330% | 0.674(c) | 03/02/21 | 13,000 | 13,014,001 | ||||||||
|
| |||||||||||
40,582,954 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS | 316,431,581 | |||||||||||
|
| |||||||||||
MUNICIPAL BOND 0.1% | ||||||||||||
Texas | ||||||||||||
University of Texas System (The), Taxable Revenue Bond, Sub Series, Refunding, FRDD, | ||||||||||||
(cost $24,990,000) | 0.140(cc) | 08/01/45 | 24,990 | 24,990,000 | ||||||||
|
| |||||||||||
REPURCHASE AGREEMENTS(m) 14.1% | ||||||||||||
Amherst Pierpont Securities LLC, | ||||||||||||
0.09%, dated 07/29/20, due 08/05/20 in the amount of $245,004,288 | 245,000 | 245,000,000 | ||||||||||
0.09%, dated 07/30/20, due 08/06/20 in the amount of $245,004,288 | 245,000 | 245,000,000 | ||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $500,004,167 | 500,000 | 500,000,000 | ||||||||||
Bank of America Securities, Inc., | ||||||||||||
0.09%, dated 07/31/20, due 08/03/20 in the amount of $150,001,125 | 150,000 | 150,000,000 | ||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $145,258,210 | 145,257 | 145,257,000 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 47 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Principal Amount (000)# | Value | ||||||||||
REPURCHASE AGREEMENTS (Continued) | ||||||||||||
BNP Paribas SA, | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $284,735,373 | 284,733 | $ | 284,733,000 | |||||||||
Canadian Imperial Bank of Commerce, | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $200,001,667 | 200,000 | 200,000,000 | ||||||||||
CF Secured LLC, | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $1,000,008,333 | 1,000,000 | 1,000,000,000 | ||||||||||
Credit Agricole Corporate & Investment Bank, | ||||||||||||
0.10%, dated 07/27/20, due 08/03/20 in the amount of $210,004,083 | 210,000 | 210,000,000 | ||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $173,185,443 | 173,184 | 173,184,000 | ||||||||||
Nomura Securities International, Inc., | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $550,004,583 | 550,000 | 550,000,000 | ||||||||||
RBC Dominion Securities, Inc., | ||||||||||||
0.08%, dated 07/31/20, due 08/03/20 in the amount of $500,003,333 | 500,000 | 500,000,000 | ||||||||||
TD Securities LLC, | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $230,001,917 | 230,000 | 230,000,000 | ||||||||||
|
| |||||||||||
TOTAL REPURCHASE AGREEMENTS | 4,433,174,000 | |||||||||||
|
| |||||||||||
Interest Rate | Maturity Date | |||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS 2.4% | ||||||||||||
Federal Farm Credit Bank, Secured Overnight Financing Rate + 0.040% (Cap N/A, Floor 0.000%) | 0.140%(c) | 02/09/21 | 21,000 | 20,994,180 | ||||||||
Federal Farm Credit Bank, 1 Month LIBOR + (0.010)% (Cap N/A, Floor 0.000%) | 0.152(c) | 06/02/21 | 21,000 | 20,993,868 | ||||||||
Federal Farm Credit Bank, Secured Overnight Financing Rate + 0.110% (Cap N/A, Floor 0.000%) | 0.210(c) | 07/08/21 | 36,700 | 36,691,940 | ||||||||
Federal Farm Credit Bank, US Treasury 3 Month Bill Money Market Yield + 0.110% (Cap N/A, Floor 0.000%) | 0.215(c) | 08/04/20 | 100,000 | 100,000,000 | ||||||||
Federal Home Loan Bank | 0.105(n) | 09/10/20 | 60,000 | 59,994,300 | ||||||||
Federal Home Loan Bank | 0.140(n) | 10/14/20 | 112,000 | 111,979,840 |
See Notes to Financial Statements.
48 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued) | ||||||||||||
Federal Home Loan Bank, 1 Month LIBOR + 0.000% (Cap N/A, Floor 0.000%) | 0.179%(c) | 09/28/21 | 140,000 | $ | 139,967,757 | |||||||
Federal Home Loan Bank, 1 Month LIBOR + 0.000% (Cap N/A, Floor 0.000%) | 0.188(c) | 05/10/21 | 225,000 | 224,946,005 | ||||||||
Federal Home Loan Bank, Secured Overnight Financing Rate + 0.130% (Cap N/A, Floor 0.000%) | 0.230(c) | 10/16/20 | 27,000 | 27,002,723 | ||||||||
|
| |||||||||||
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS | 742,570,613 | |||||||||||
|
| |||||||||||
U.S. TREASURY OBLIGATIONS(n) 38.4% | ||||||||||||
U.S. Cash Management Bill | 0.066 | 11/17/20 | 376,000 | 375,933,572 | ||||||||
U.S. Cash Management Bill | 0.115 | 10/27/20 | 275,000 | 274,941,461 | ||||||||
U.S. Cash Management Bill | 0.124 | 11/03/20 | 385,000 | 384,901,609 | ||||||||
U.S. Cash Management Bill | 0.125 | 10/06/20 | 758,000 | 757,885,459 | ||||||||
U.S. Cash Management Bill | 0.127 | 10/20/20 | 650,000 | 649,880,289 | ||||||||
U.S. Cash Management Bill | 0.165 | 12/01/20 | 95,000 | 94,971,500 | ||||||||
U.S. Cash Management Bill | 0.175 | 11/10/20 | 289,000 | 288,940,394 | ||||||||
U.S. Treasury Bills | 0.086 | 09/29/20 | 279,000 | 278,959,138 | ||||||||
U.S. Treasury Bills | 0.109 | 08/20/20 | 386,000 | 385,984,050 | ||||||||
U.S. Treasury Bills | 0.112 | 10/29/20 | 720,000 | 719,843,429 | ||||||||
U.S. Treasury Bills | 0.115 | 11/12/20 | 150,000 | 149,958,969 | ||||||||
U.S. Treasury Bills | 0.120 | 11/19/20 | 153,000 | 152,956,395 | ||||||||
U.S. Treasury Bills | 0.130 | 10/22/20 | 1,355,000 | 1,354,721,466 | ||||||||
U.S. Treasury Bills | 0.131 | 08/27/20 | 630,000 | 629,962,200 | ||||||||
U.S. Treasury Bills | 0.133 | 09/08/20 | 312,000 | 311,973,480 | ||||||||
U.S. Treasury Bills | 0.135 | 08/25/20 | 405,000 | 404,980,200 | ||||||||
U.S. Treasury Bills | 0.142 | 10/01/20 | 1,505,000 | 1,504,774,927 | ||||||||
U.S. Treasury Bills | 0.144 | 08/04/20 | 200,000 | 199,999,584 | ||||||||
U.S. Treasury Bills | 0.145 | 09/03/20 | 883,000 | 882,929,669 | ||||||||
U.S. Treasury Bills | 0.151 | 10/08/20 | 719,000 | 718,879,718 | ||||||||
U.S. Treasury Bills | 0.160 | 08/11/20 | 155,000 | 154,996,987 | ||||||||
U.S. Treasury Bills | 0.161 | 09/24/20 | 224,000 | 223,970,071 | ||||||||
U.S. Treasury Bills | 0.162 | 10/15/20 | 300,000 | 299,943,729 | ||||||||
U.S. Treasury Bills | 0.164 | 09/10/20 | 299,000 | 298,973,174 | ||||||||
U.S. Treasury Bills | 0.173 | 09/17/20 | 152,000 | 151,983,137 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 49 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
U.S. TREASURY OBLIGATIONS (Continued) | ||||||||||||
U.S. Treasury Bills | 0.177% | 09/15/20 | 413,000 | $ | 412,954,368 | |||||||
|
| |||||||||||
TOTAL U.S. TREASURY OBLIGATIONS | 12,066,198,975 | |||||||||||
|
| |||||||||||
TOTAL INVESTMENTS 102.5% | 32,215,398,724 | |||||||||||
Liabilities in excess of other assets (2.5)% | (791,282,370 | ) | ||||||||||
|
| |||||||||||
NET ASSETS 100.0% | $ | 31,424,116,354 | ||||||||||
|
|
See the Glossary for a list of the abbreviation(s) used in the semiannual report.
# | Principal amount is shown in U.S. dollars unless otherwise stated. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at July 31, 2020. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of July 31, 2020. 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. |
(m) | Repurchase agreements are collateralized by FHLMC (coupon rates 2.000%-6.500%, maturity dates 05/01/21-08/01/50), FNMA (coupon rates 1.500%-5.000%, maturity dates 09/01/22-08/01/51), GNMA (coupon rates 1.265%-6.000%, maturity dates 12/15/25-03/20/70), and U.S. Treasury Securities (coupon rates 0.000%-4.375%, maturity dates 09/24/20-02/15/50), with the aggregate value, including accrued interest, of $4,521,865,595. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(p) | Interest rate not available as of July 31, 2020. |
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 July 31, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | |||||||||||||
Investments in Securities | |||||||||||||||
Assets | |||||||||||||||
Certificates of Deposit | $ | — | $ | 6,694,297,732 | $ | — | |||||||||
Commercial Paper | — | 7,937,735,823 | — |
See Notes to Financial Statements.
50 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Level 1 | Level 2 | Level 3 | |||||||||||||
Investments in Securities (continued) | |||||||||||||||
Assets (continued) | |||||||||||||||
Corporate Bonds | $— | $ | 316,431,581 | $— | |||||||||||
Municipal Bond | — | 24,990,000 | — | ||||||||||||
Repurchase Agreements | — | 4,433,174,000 | — | ||||||||||||
U.S. Government Agency Obligations | — | 742,570,613 | — | ||||||||||||
U.S. Treasury Obligations | — | 12,066,198,975 | — | ||||||||||||
|
| ||||||||||||||
Total | $— | $ | 32,215,398,724 | $— | |||||||||||
|
|
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of July 31, 2020 were as follows:
U.S. Treasury Obligations | 38.4 | % | ||
Commercial Paper | 25.2 | |||
Certificates of Deposit | 21.3 | |||
Repurchase Agreements | 14.1 | |||
U.S. Government Agency Obligations | 2.4 | |||
Corporate Bonds | 1.0 |
Municipal Bond | 0.1 | % | ||
102.5 | ||||
Liabilities in excess of other assets | (2.5 | ) | ||
100.0 | % |
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 | ||||||||||
Repurchase Agreements | Amherst Pierpont Securities LLC | $ 990,000,000 | $ (990,000,000) | $— | ||||||||||
Repurchase Agreements | Bank of America Securities, Inc. | 295,257,000 | (295,257,000) | — | ||||||||||
Repurchase Agreements | BNP Paribas SA | 284,733,000 | (284,733,000) | — | ||||||||||
Repurchase Agreements | Canadian Imperial Bank of Commerce | 200,000,000 | (200,000,000) | — | ||||||||||
Repurchase Agreements | CF Secured LLC | 1,000,000,000 | (1,000,000,000) | — |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 51 |
PGIM Core Ultra Short Bond Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Counterparty | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | ||||||||||
Repurchase Agreements | Credit Agricole Corporate & Investment Bank | $383,184,000 | $(383,184,000) | $— | ||||||||||
Repurchase Agreements | Nomura Securities International, Inc. | 550,000,000 | (550,000,000) | — | ||||||||||
Repurchase Agreements | RBC Dominion Securities, Inc. | 500,000,000 | (500,000,000) | — | ||||||||||
Repurchase Agreements | TD Securities LLC | 230,000,000 | (230,000,000) | — | ||||||||||
$4,433,174,000 |
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
52 |
PGIM Core Ultra Short Bond Fund
Statement of Assets & Liabilities (unaudited)
as of July 31, 2020
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $27,768,962,105) | $27,782,224,724 | |||
Repurchase Agreements (cost $4,433,174,000) | 4,433,174,000 | |||
Cash | 68,814 | |||
Interest receivable | 8,737,711 | |||
Total Assets | 32,224,205,249 | |||
Liabilities | ||||
Payable for investments purchased | 799,905,424 | |||
Management fee payable | 100,062 | |||
Accrued expenses and other liabilities | 65,366 | |||
Affiliated transfer agent fee payable | 16,667 | |||
Trustees’ fees payable | 852 | |||
Dividends payable | 524 | |||
Total Liabilities | 800,088,895 | |||
Net Assets | $31,424,116,354 | |||
Net assets were comprised of: | ||||
Shares of beneficial interest, at par | $ 31,409,074 | |||
Paid-in capital in excess of par | 31,378,745,933 | |||
Total distributable earnings (loss) | 13,961,347 | |||
Net assets, July 31, 2020 | $31,424,116,354 | |||
Net asset value and redemption price per share ($31,424,116,354 ÷ 31,409,073,700 shares of beneficial interest issued and outstanding) | $ 1.00 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 53 |
PGIM Core Ultra Short Bond Fund
Statement of Operations (unaudited)
Six Months Ended July 31, 2020
Net Investment Income (Loss) | ||||
Interest income | $131,422,000 | |||
Expenses | ||||
Management fee | 625,633 | |||
Custodian and accounting fees | 73,885 | |||
Transfer agent’s fees and expenses (including affiliated expense of $ 50,000) | 50,496 | |||
Audit fee | 12,431 | |||
Legal fees and expenses | 7,790 | |||
Shareholders’ reports | 5,452 | |||
Trustees’ fees | 5,381 | |||
Miscellaneous | 34,140 | |||
Total expenses | 815,208 | |||
Net investment income (loss) | 130,606,792 | |||
Realized And Unrealized Gain (Loss) On Investments | ||||
Net realized gain (loss) on investment transactions | 1,376,644 | |||
Net change in unrealized appreciation (depreciation) on investments | 8,914,943 | |||
Net gain (loss) on investment transactions | 10,291,587 | |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $140,898,379 |
See Notes to Financial Statements.
54 |
PGIM Core Ultra Short Bond Fund
Statements of Changes in Net Assets (unaudited)
Six Months Ended July 31, 2020 | Year Ended January 31, 2020 | |||||||||
Increase (Decrease) in Net Assets |
| |||||||||
Operations |
| |||||||||
Net investment income (loss) | $ | 130,606,792 | $ | 491,489,284 | ||||||
Net realized gain (loss) on investment transactions | 1,376,644 | 3,554,827 | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 8,914,943 | 1,313,758 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 140,898,379 | 496,357,869 | ||||||||
|
|
|
| |||||||
Dividends and Distributions |
| |||||||||
Distributions from distributable earnings | (132,616,437 | ) | (493,766,222 | ) | ||||||
|
|
|
| |||||||
Fund share transactions |
| |||||||||
Net proceeds from shares sold | 185,896,964,656 | 157,423,011,107 | ||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 129,993,205 | 491,271,324 | ||||||||
Cost of shares reacquired | (174,826,460,323 | ) | (158,676,910,303 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in net assets from Fund share transactions | 11,200,497,538 | (762,627,872 | ) | |||||||
|
|
|
| |||||||
Total increase (decrease) | 11,208,779,480 | (760,036,225 | ) | |||||||
Net Assets: |
| |||||||||
Beginning of period | 20,215,336,874 | 20,975,373,099 | ||||||||
|
|
|
| |||||||
End of period | $ | 31,424,116,354 | $ | 20,215,336,874 | ||||||
|
|
|
|
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Ultra Short Bond Fund | 55 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
SHORT-TERM INVESTMENTS 101.6% | ||||||||||||
CERTIFICATES OF DEPOSIT 35.6% | ||||||||||||
Bank of America NA, | ||||||||||||
3 Month LIBOR + 0.080% | 0.504%(c) | 08/14/20 | 120,000 | $ | 120,004,662 | |||||||
US Federal Funds Effective Rate + 0.180% | 0.280(c) | 11/05/20 | 145,000 | 145,286,537 | ||||||||
Bank of Montreal, | ||||||||||||
1 Month LIBOR + 0.250% | 0.413(c) | 08/07/20 | 45,000 | 45,002,298 | ||||||||
3 Month LIBOR + 0.050% | 0.297(c) | 01/28/21 | 62,000 | 61,993,977 | ||||||||
3 Month LIBOR + 0.050% | 0.606(c) | 02/04/21 | 117,150 | 117,138,168 | ||||||||
Secured Overnight Financing Rate + 0.230% | 0.330(c) | 04/27/21 | 25,000 | 24,994,377 | ||||||||
1 Month LIBOR + 0.300% | 0.483(c) | 10/09/20 | 138,000 | 138,070,788 | ||||||||
Bank of Montreal | 1.400 | 01/04/21 | 60,000 | 60,303,982 | ||||||||
Bank of Montreal | 1.400 | 01/04/21 | 100,000 | 100,506,639 | ||||||||
Bank of Nova Scotia, | ||||||||||||
3 Month LIBOR + 0.280% | 0.586(c) | 09/21/20 | 5,500 | 5,502,418 | ||||||||
3 Month LIBOR + 0.400% | 0.956(c) | 05/04/21 | 20,000 | 20,050,733 | ||||||||
3 Month LIBOR + 0.130% | 0.516(c) | 11/18/20 | 80,000 | 80,030,021 | ||||||||
3 Month LIBOR + 0.100% | 0.548(c) | 02/08/21 | 60,000 | 60,021,523 | ||||||||
3 Month LIBOR + 0.080% | 0.350(c) | 07/29/21 | 140,000 | 139,999,996 | ||||||||
BNP Paribas Fortis SA, | ||||||||||||
3 Month LIBOR + 0.200% | 0.464(c) | 10/26/20 | 36,000 | 36,018,248 | ||||||||
BNP Paribas SA, | ||||||||||||
Secured Overnight Financing Rate + 0.200% | 0.300(c) | 02/10/21 | 72,000 | 71,996,490 | ||||||||
3 Month LIBOR + 0.200% | 0.468(c) | 10/09/20 | 8,470 | 8,473,414 | ||||||||
1 Month LIBOR + 0.240% | 0.418(c) | 07/13/21 | 100,000 | 100,014,193 | ||||||||
3 Month LIBOR + 0.160% | 0.584(c) | 05/14/21 | 234,000 | 234,199,883 | ||||||||
Canadian Imperial Bank of Commerce, | ||||||||||||
Secured Overnight Financing Rate + 0.250% | 0.350(c) | 03/03/21 | 160,000 | 160,031,454 | ||||||||
3 Month LIBOR + 0.160% | 0.594(c) | 05/12/21 | 175,000 | 175,080,932 | ||||||||
3 Month LIBOR + 0.160% | 0.428(c) | 08/06/21 | 50,000 | 50,000,000 | ||||||||
Canadian Imperial Bank of Commerce | — (p) | 08/03/21 | 168,500 | 168,500,000 | ||||||||
Cooperatieve Rabobank UA, | ||||||||||||
1 Month LIBOR + 0.200% | 0.364(c) | 08/03/20 | 58,000 | 58,001,060 | ||||||||
Credit Agricole Corporate & Investment Bank, | ||||||||||||
3 Month LIBOR + 0.400% | 0.697(c) | 09/24/20 | 5,000 | 5,003,142 | ||||||||
3 Month LIBOR + 0.270% | 0.957(c) | 02/01/21 | 4,000 | 4,005,023 | ||||||||
3 Month LIBOR + 0.160% | 0.437(c) | 07/08/21 | 135,000 | 135,112,837 | ||||||||
Credit Agricole Corporate & Investment Bank | 1.760 | 01/25/21 | 8,110 | 8,170,832 | ||||||||
Credit Industriel et Commercial, | ||||||||||||
US Federal Funds Effective Rate + 0.440% | 0.540(c) | 10/23/20 | 100,000 | 100,062,176 | ||||||||
US Federal Funds Effective Rate + 0.400% | 0.500(c) | 08/13/20 | 141,000 | 141,009,860 | ||||||||
US Federal Funds Effective Rate + 0.210% | 0.310(c) | 02/04/21 | 49,000 | 49,002,461 | ||||||||
US Federal Funds Effective Rate + 0.210% | 0.310(c) | 02/10/21 | 120,000 | 120,006,191 |
See Notes to Financial Statements.
56 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CERTIFICATES OF DEPOSIT (Continued) | ||||||||||||
Credit Industriel et Commercial, (cont’d.) | ||||||||||||
3 Month LIBOR + 0.170% | 0.485%(c) | 06/11/21 | 75,000 | $ | 75,019,198 | |||||||
3 Month LIBOR + 0.100% | 0.524(c) | 02/16/21 | 119,100 | 119,125,635 | ||||||||
Credit Industriel et Commercial | 0.210 | 01/28/21 | 20,000 | 19,998,895 | ||||||||
Credit Suisse AG, | ||||||||||||
Secured Overnight Financing Rate + 0.480% | 0.580(c) | 10/02/20 | 150,000 | 150,099,157 | ||||||||
Secured Overnight Financing Rate + 0.270% | 0.370(c) | 01/29/21 | 48,000 | 48,018,656 | ||||||||
3 Month LIBOR + 0.260% | 0.557(c) | 02/05/21 | 7,000 | 7,005,717 | ||||||||
Secured Overnight Financing Rate + 0.210% | 0.310(c) | 11/18/20 | 5,000 | 5,001,266 | ||||||||
Secured Overnight Financing Rate + 0.370% | 0.470(c) | 03/31/21 | 118,000 | 118,067,569 | ||||||||
Credit Suisse AG | 1.260 | 01/21/21 | 76,000 | 76,426,294 | ||||||||
Credit Suisse AG | 1.970 | 11/20/20 | 10,000 | 10,050,970 | ||||||||
DNB Bank ASA, | ||||||||||||
3 Month LIBOR + 0.280% | 0.584(c) | 10/08/20 | 20,000 | 20,010,827 | ||||||||
1 Month LIBOR + 0.210% | 0.388(c) | 08/12/20 | 95,000 | 95,007,417 | ||||||||
Goldman Sachs Bank USA, | ||||||||||||
Secured Overnight Financing Rate + 0.280% (Cap N/A, Floor 0.000%) | 0.724(c) | 08/21/20 | 50,000 | 50,007,275 | ||||||||
Secured Overnight Financing Rate + 0.250% (Cap N/A, Floor 0.000%) | 0.813(c) | 02/16/21 | 55,000 | 55,017,377 | ||||||||
Lloyds Bank Corporate Markets PLC, | ||||||||||||
3 Month LIBOR + 0.500% | 0.797(c) | 09/24/20 | 5,000 | 5,003,894 | ||||||||
3 Month LIBOR + 0.140% | 0.452(c) | 01/08/21 | 200,000 | 200,034,612 | ||||||||
Mitsubishi UFJ Trust & Banking Corp. | 0.330 | 10/29/20 | 145,000 | 145,039,830 | ||||||||
Mitsubishi UFJ Trust & Banking Corp. | 0.330 | 11/04/20 | 50,000 | 50,013,850 | ||||||||
Mizuho Bank Ltd., | ||||||||||||
1 Month LIBOR + 0.210% | 0.373(c) | 08/07/20 | 5,000 | 5,000,216 | ||||||||
1 Month LIBOR + 0.200% | 0.366(c) | 01/08/21 | 75,000 | 75,000,477 | ||||||||
1 Month LIBOR + 0.200% | 0.388(c) | 01/11/21 | 160,000 | 160,000,083 | ||||||||
1 Month LIBOR + 0.150% | 0.337(c) | 11/20/20 | 49,000 | 48,998,410 | ||||||||
3 Month LIBOR + 0.080% | 0.351(c) | 01/15/21 | 75,000 | 75,003,369 | ||||||||
1 Month LIBOR + 0.180% | 0.353(c) | 02/26/21 | 185,500 | 185,453,798 | ||||||||
MUFG Bank Ltd. | 2.060 | 08/18/20 | 29,300 | 29,328,776 | ||||||||
MUFG Bank Ltd. | 1.150 | 10/19/20 | 35,000 | 35,074,038 | ||||||||
MUFG Bank Ltd. | 1.070 | 10/21/20 | 135,000 | 135,267,528 | ||||||||
MUFG Bank Ltd. | 0.540 | 10/28/20 | 50,000 | 50,040,858 | ||||||||
MUFG Bank Ltd. | 0.380 | 11/25/20 | 75,000 | 75,034,786 | ||||||||
MUFG Bank Ltd. | 0.240 | 10/16/20 | 50,000 | 50,005,022 | ||||||||
MUFG Bank Ltd. | 0.240 | 10/20/20 | 166,000 | 166,015,672 | ||||||||
MUFG Bank Ltd. | 0.230 | 11/12/20 | 48,000 | 48,000,831 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 57 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CERTIFICATES OF DEPOSIT (Continued) | ||||||||||||
Natixis SA, | ||||||||||||
1 Month LIBOR + 0.300% | 0.466%(c) | 08/10/20 | 25,000 | $ | 25,002,172 | |||||||
3 Month LIBOR + 0.200% | 0.634(c) | 11/13/20 | 200,000 | 200,137,424 | ||||||||
3 Month LIBOR + 0.100% | 0.372(c) | 01/20/21 | 129,000 | 129,084,714 | ||||||||
Secured Overnight Financing Rate + 0.250% | 0.350(c) | 02/12/21 | 76,000 | 76,025,970 | ||||||||
Natixis SA | 0.600 | 02/01/21 | 47,000 | 47,087,481 | ||||||||
Natixis SA | 1.100 | 11/16/20 | 62,000 | 62,167,927 | ||||||||
Natixis SA | 1.770 | 01/22/21 | 6,200 | 6,246,359 | ||||||||
Nordea Bank Abp, | ||||||||||||
3 Month LIBOR + 0.290% | 0.725(c) | 02/12/21 | 25,000 | 25,032,948 | ||||||||
3 Month LIBOR + 0.320% | 0.861(c) | 05/05/21 | 148,170 | 148,470,704 | ||||||||
3 Month LIBOR + 0.110% | 0.428(c) | 12/07/20 | 16,000 | 16,006,022 | ||||||||
3 Month LIBOR + 0.090% | 0.514(c) | 05/17/21 | 147,000 | 147,046,145 | ||||||||
3 Month LIBOR + 0.100% | 0.477(c) | 05/21/21 | 187,500 | 187,574,612 | ||||||||
Norinchukin Bank, | ||||||||||||
1 Month LIBOR + 0.170% | 0.336(c) | 01/29/21 | 167,000 | 166,980,289 | ||||||||
1 Month LIBOR + 0.070% | 0.242(c) | 08/27/20 | 24,000 | 24,000,443 | ||||||||
Norinchukin Bank | 0.280 | 10/16/20 | 158,200 | 158,218,255 | ||||||||
Norinchukin Bank | 0.300 | 09/25/20 | 25,000 | 25,003,146 | ||||||||
Norinchukin Bank | 0.310 | 10/01/20 | 90,000 | 90,013,779 | ||||||||
Norinchukin Bank | 0.340 | 01/21/21 | 115,000 | 115,008,862 | ||||||||
Norinchukin Bank | 0.970 | 09/08/20 | 95,000 | 95,077,802 | ||||||||
Northern Trust Co. (The) | 1.100 | 12/16/20 | 25,000 | 25,081,496 | ||||||||
Northern Trust Co. (The) | 1.080 | 11/16/20 | 26,000 | 26,067,138 | ||||||||
Royal Bank of Canada, | ||||||||||||
1 Month LIBOR + 0.230% | 0.418(c) | 08/10/20 | 192,000 | 192,007,317 | ||||||||
Secured Overnight Financing Rate + 0.190% | 0.290(c) | 03/19/21 | 46,000 | 45,985,835 | ||||||||
3 Month LIBOR + 0.140% | 0.463(c) | 07/30/21 | 200,000 | 199,999,996 | ||||||||
Royal Bank of Canada | — (p) | 08/02/21 | 75,000 | 74,970,000 | ||||||||
Skandinaviska Enskilda Banken AB, | ||||||||||||
1 Month LIBOR + 0.120% | 0.283(c) | 12/07/20 | 25,000 | 25,004,325 | ||||||||
3 Month LIBOR + 0.170% | 0.441(c) | 10/16/20 | 80,000 | 80,030,800 | ||||||||
3 Month LIBOR + 0.170% | 0.441(c) | 10/21/20 | 30,000 | 30,012,341 | ||||||||
3 Month LIBOR + 0.140% | 0.641(c) | 11/06/20 | 8,000 | 8,002,860 | ||||||||
Skandinaviska Enskilda Banken AB | 1.050 | 11/16/20 | 14,000 | 14,036,004 | ||||||||
Sumitomo Mitsui Banking Corp., | ||||||||||||
3 Month LIBOR + 0.100% | 0.384(c) | 01/06/21 | 170,000 | 170,021,780 | ||||||||
1 Month LIBOR + 0.200% | 0.363(c) | 01/13/21 | 50,000 | 50,003,797 | ||||||||
1 Month LIBOR + 0.190% (Cap N/A, Floor 0.000%) | 0.367(c) | 01/19/21 | 145,000 | 144,999,501 | ||||||||
1 Month LIBOR + 0.200% | 0.380(c) | 02/22/21 | 100,000 | 99,998,737 | ||||||||
1 Month LIBOR + 0.180% | 0.352(c) | 02/03/21 | 50,000 | 49,994,273 |
See Notes to Financial Statements.
58 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CERTIFICATES OF DEPOSIT (Continued) | ||||||||||||
Sumitomo Mitsui Banking Ltd., | ||||||||||||
Secured Overnight Financing Rate + 0.140% | 0.240%(c) | 08/28/20 | 22,000 | $ | 22,001,333 | |||||||
3 Month LIBOR + 0.070% | 0.434(c) | 11/30/20 | 33,000 | 33,002,123 | ||||||||
Secured Overnight Financing Rate + 0.280% | 0.379(c) | 01/25/21 | 50,000 | 49,995,786 | ||||||||
Svenska Handelsbanken AB, | ||||||||||||
3 Month LIBOR + 0.110% | 0.447(c) | 12/03/20 | 108,000 | 108,039,564 | ||||||||
1 Month LIBOR + 0.750% | 0.914(c) | 11/06/20 | 195,000 | 195,358,392 | ||||||||
3 Month LIBOR + 0.120% | 0.441(c) | 06/16/21 | 200,000 | 200,086,770 | ||||||||
3 Month LIBOR + 0.120% | 0.424(c) | 07/06/21 | 76,000 | 76,028,059 | ||||||||
Toronto-Dominion Bank (The), | ||||||||||||
3 Month LIBOR + 0.200% | 0.447(c) | 01/28/21 | 140,500 | 140,622,811 | ||||||||
3 Month LIBOR + 0.140% | 0.480(c) | 07/19/21 | 150,000 | 150,100,680 | ||||||||
3 Month LIBOR + 0.100% | 0.395(c) | 08/20/21 | 125,000 | 125,000,004 | ||||||||
UBS AG | 1.350 | 01/14/21 | 25,000 | 25,121,463 | ||||||||
UBS AG | 1.150 | 12/21/20 | 150,000 | 150,511,270 | ||||||||
Wells Fargo Bank NA, | ||||||||||||
3 Month LIBOR + 0.110% | 0.502(c) | 02/16/21 | 122,000 | 122,026,258 | ||||||||
Westpac Banking Corp. | — (p) | 08/03/21 | 50,000 | 50,000,000 | ||||||||
|
| |||||||||||
TOTAL CERTIFICATES OF DEPOSIT | ||||||||||||
(amortized cost $9,553,621,793) | 9,559,062,385 | |||||||||||
|
| |||||||||||
COMMERCIAL PAPER 27.2% | ||||||||||||
Bank of Nova Scotia, | ||||||||||||
144A, US Federal Funds Effective Rate + 0.340% | 0.440(c) | 08/07/20 | 50,000 | 50,000,957 | ||||||||
BPCE SA, | ||||||||||||
144A | 0.180(n) | 08/10/20 | 25,000 | 24,999,306 | ||||||||
144A | 0.210(n) | 09/16/20 | 50,000 | 49,992,428 | ||||||||
144A | 0.210(n) | 09/30/20 | 78,000 | 77,983,876 | ||||||||
CDP Financial, Inc., | ||||||||||||
144A | 0.270(n) | 01/26/21 | 10,000 | 9,993,089 | ||||||||
Chevron Corp., | ||||||||||||
144A | 0.120(n) | 08/03/20 | 100,000 | 99,999,167 | ||||||||
Citigroup Global Markets Inc., | ||||||||||||
144A | 0.200(n) | 08/04/20 | 71,000 | 70,999,290 | ||||||||
144A | 0.230(n) | 09/01/20 | 50,000 | 49,994,533 | ||||||||
144A | 0.230(n) | 09/02/20 | 70,000 | 69,992,043 | ||||||||
144A | 0.230(n) | 09/03/20 | 37,000 | 36,995,632 | ||||||||
144A | 0.290(n) | 11/02/20 | 45,000 | 44,990,013 | ||||||||
144A | 0.310(n) | 12/01/20 | 151,000 | 150,941,702 | ||||||||
Commonwealth Bank of Australia, | ||||||||||||
144A, 3 Month LIBOR + 0.120% | 0.457(c) | 12/03/20 | 90,000 | 90,029,970 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 59 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
Commonwealth Bank of Australia, (cont’d.) | ||||||||||||
144A, 3 Month LIBOR + 0.015% | 0.447%(c) | 09/24/20 | 20,000 | $ | 20,005,663 | |||||||
144A, 3 Month LIBOR + 0.003% | 0.717(c) | 02/01/21 | 96,000 | 95,990,357 | ||||||||
Credit Industriel et Commercial, | ||||||||||||
144A | 0.270(n) | 01/11/21 | 13,000 | 12,972,935 | ||||||||
DNB Bank ASA, | ||||||||||||
144A | 0.180(n) | 10/16/20 | 217,500 | 217,426,961 | ||||||||
144A, 3 Month LIBOR + 0.001% | 0.548(c) | 05/10/21 | 50,000 | 50,019,136 | ||||||||
144A, 3 Month LIBOR + 0.080% | 0.336(c) | 07/20/21 | 125,000 | 125,012,021 | ||||||||
Eli Lilly and Company, | ||||||||||||
144A | 0.210(n) | 09/01/20 | 122,000 | 121,936,126 | ||||||||
European Investment Bank | 0.160(n) | 11/02/20 | 75,000 | 74,978,458 | ||||||||
European Investment Bank, | ||||||||||||
144A | 0.140(n) | 08/17/20 | 54,500 | 54,497,684 | ||||||||
Exxon Mobil Corp. | 0.170(n) | 08/12/20 | 97,000 | 96,997,155 | ||||||||
Exxon Mobil Corp. | 0.170(n) | 08/17/20 | 40,000 | 39,998,432 | ||||||||
Exxon Mobil Corp. | 0.170(n) | 08/21/20 | 198,000 | 197,989,837 | ||||||||
Federation Des Caisses Desjardins, | ||||||||||||
144A, 1 Month LIBOR + 0.250% | 0.425(c) | 08/14/20 | 110,000 | 110,011,521 | ||||||||
144A | 0.310(n) | 01/15/21 | 35,000 | 34,965,700 | ||||||||
FMS Wertmanagement, | ||||||||||||
144A | 0.240(n) | 11/05/20 | 68,000 | 67,970,135 | ||||||||
144A | 0.260(n) | 12/17/20 | 71,000 | 70,949,559 | ||||||||
144A | 0.260(n) | 01/15/21 | 89,000 | 88,916,102 | ||||||||
144A | 0.250(n) | 01/19/21 | 46,000 | 45,954,946 | ||||||||
GlaxoSmithKline LLC, | ||||||||||||
144A | 1.020(n) | 08/03/20 | 30,000 | 29,999,453 | ||||||||
HSBC Bank PLC, | ||||||||||||
144A, 3 Month LIBOR + 0.230% | 0.496(c) | 10/13/20 | 119,000 | 119,057,805 | ||||||||
144A, 3 Month LIBOR + 0.200% | 0.756(c) | 11/02/20 | 63,000 | 63,031,480 | ||||||||
144A, 3 Month LIBOR + 0.050% | 0.410(c) | 11/25/20 | 75,000 | 75,011,759 | ||||||||
144A, 3 Month LIBOR + 0.260% | 0.591(c) | 06/03/21 | 135,000 | 135,067,314 | ||||||||
Hydro-Quebec, | ||||||||||||
144A | 0.180(n) | 10/20/20 | 100,000 | 99,966,025 | ||||||||
144A | 0.200(n) | 11/04/20 | 40,000 | 39,982,613 | ||||||||
ING US Funding LLC, | ||||||||||||
144A, 1 Month LIBOR + 0.250% | 0.428(c) | 08/13/20 | 160,000 | 160,015,786 | ||||||||
144A, 3 Month LIBOR + 0.170% | 0.475(c) | 09/23/20 | 51,000 | 51,015,576 | ||||||||
3 Month LIBOR + 0.015% | 0.598(c) | 02/01/21 | 60,000 | 60,015,062 | ||||||||
144A | 0.460(n) | 10/20/20 | 144,000 | 143,967,276 |
See Notes to Financial Statements.
60 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
JPMorgan Securities LLC, | ||||||||||||
144A, 3 Month LIBOR + 0.160% | 0.546%(c) | 11/16/20 | 100,000 | $ | 100,007,940 | |||||||
144A, 1 Month LIBOR + 0.270% | 0.434(c) | 01/06/21 | 61,000 | 61,034,246 | ||||||||
144A, 1 Month LIBOR + 0.130% | 0.297(c) | 11/30/20 | 93,000 | 92,978,857 | ||||||||
144A, 3 Month LIBOR + 0.100% | 0.410(c) | 06/09/21 | 60,000 | 59,999,995 | ||||||||
Kingdom of Denmark | 0.200(n) | 10/28/20 | 105,000 | 104,966,254 | ||||||||
Kingdom of Denmark | 0.190(n) | 10/13/20 | 40,000 | 39,989,311 | ||||||||
Kingdom of Denmark | 0.190(n) | 10/14/20 | 100,000 | 99,972,917 | ||||||||
Lloyds Bank Corporate Markets PLC, | ||||||||||||
144A, 3 Month LIBOR + 0.014% | 0.411(c) | 01/21/21 | 38,000 | 38,015,941 | ||||||||
LVMH Moet Hennessy Louis Vuitton SE, | ||||||||||||
144A | 0.190(n) | 08/20/20 | 70,000 | 69,995,217 | ||||||||
144A | 0.220(n) | 09/24/20 | 20,000 | 19,992,881 | ||||||||
144A | 0.240(n) | 11/03/20 | 37,000 | 36,975,688 | ||||||||
144A | 0.250(n) | 11/12/20 | 95,000 | 94,931,938 | ||||||||
144A | 0.250(n) | 11/17/20 | 114,000 | 113,914,744 | ||||||||
144A | 0.250(n) | 11/18/20 | 50,000 | 49,962,264 | ||||||||
144A | 0.270(n) | 12/16/20 | 29,450 | 29,421,325 | ||||||||
Mitsubishi International Corp. | 0.260(n) | 10/29/20 | 40,000 | 39,978,000 | ||||||||
Mizuho Bank Ltd., | ||||||||||||
144A | 0.220(n) | 10/09/20 | 24,600 | 24,589,811 | ||||||||
144A | 0.260(n) | 11/13/20 | 100,000 | 99,945,167 | ||||||||
Nederlandse Waterschapsbank NV, | ||||||||||||
144A | 0.200(n) | 10/01/20 | 222,000 | 221,930,798 | ||||||||
144A | 0.200(n) | 10/02/20 | 145,000 | 144,954,071 | ||||||||
144A | 0.210(n) | 10/23/20 | 130,000 | 129,942,973 | ||||||||
Novartis Finance Corp., | ||||||||||||
144A | 0.140(n) | 08/10/20 | 63,600 | 63,596,625 | ||||||||
144A | 0.170(n) | 09/14/20 | 15,000 | 14,998,313 | ||||||||
144A | 0.140(n) | 08/04/20 | 24,750 | 24,749,706 | ||||||||
144A | 0.140(n) | 08/06/20 | 20,000 | 19,999,547 | ||||||||
Ontario Teachers’ Finance Trust, | ||||||||||||
144A, 1 Month LIBOR + 0.260% | 0.437(c) | 09/16/20 | 50,000 | 50,015,486 | ||||||||
144A, 1 Month LIBOR + 0.280% | 0.446(c) | 09/22/20 | 26,000 | 26,009,701 | ||||||||
144A | 0.210(n) | 09/03/20 | 15,000 | 14,998,512 | ||||||||
144A | 0.290(n) | 01/19/21 | 20,000 | 19,979,742 | ||||||||
PepsiCo, Inc., | ||||||||||||
144A | 0.170(n) | 10/30/20 | 50,000 | 49,977,124 | ||||||||
144A | 0.180(n) | 12/01/20 | 32,000 | 31,978,899 | ||||||||
Port Authority of New York and New Jersey | 0.550 | 09/03/20 | 3,000 | 3,000,278 | ||||||||
Port Authority of New York and New Jersey | 0.450 | 10/02/20 | 7,795 | 7,795,546 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 61 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
Port Authority of New York and New Jersey | 0.450% | 10/19/20 | 15,255 | $ | 15,255,610 | |||||||
Province of Alberta, | ||||||||||||
144A | 0.250(n) | 11/12/20 | 54,000 | 53,973,948 | ||||||||
144A | 0.250(n) | 11/16/20 | 120,000 | 119,939,160 | ||||||||
Province of British Columbia | 0.240(n) | 01/15/21 | 113,000 | 112,894,534 | ||||||||
Province of British Columbia | 0.240(n) | 01/19/21 | 54,000 | 53,948,400 | ||||||||
Province of Ontario | 0.270(n) | 10/19/20 | 160,000 | 159,970,490 | ||||||||
PSP Capital, Inc., | ||||||||||||
144A, Secured Overnight Financing Rate + 0.250% | 0.350(c) | 08/07/20 | 45,000 | 45,001,925 | ||||||||
144A, Secured Overnight Financing Rate + 0.140% | 0.240(c) | 11/06/20 | 50,000 | 50,006,108 | ||||||||
144A | 0.210(n) | 10/28/20 | 25,000 | 24,990,049 | ||||||||
144A | 0.210(n) | 10/20/20 | 30,000 | 29,988,795 | ||||||||
Royal Bank of Canada, | ||||||||||||
144A, Secured Overnight Financing Rate + 0.220% | 0.310(c) | 01/22/21 | 57,000 | 57,017,421 | ||||||||
Shell International Finance BV, | ||||||||||||
144A | 0.230(n) | 10/05/20 | 116,000 | 115,939,178 | ||||||||
State of the Netherlands, | ||||||||||||
144A | 0.280(n) | 08/31/20 | 98,000 | 97,981,350 | ||||||||
Swedbank AB | 0.240(n) | 12/14/20 | 41,800 | 41,768,260 | ||||||||
Swedbank AB | 0.240(n) | 12/15/20 | 17,500 | 17,486,614 | ||||||||
Toronto-Dominion Bank (The), | ||||||||||||
144A, Secured Overnight Financing Rate + 0.025% | 0.350(c) | 03/03/21 | 50,000 | 50,009,819 | ||||||||
Total Capital Canada Ltd., | ||||||||||||
144A | 0.210(n) | 08/11/20 | 60,000 | 59,998,350 | ||||||||
144A | 0.220(n) | 08/19/20 | 87,000 | 86,995,730 | ||||||||
144A | 0.240(n) | 10/06/20 | 100,000 | 99,968,919 | ||||||||
144A | 0.240(n) | 10/14/20 | 70,000 | 69,974,479 | ||||||||
144A | 0.250(n) | 11/02/20 | 50,000 | 49,975,456 | ||||||||
Toyota Credit Canada, Inc. | 0.270(n) | 11/09/20 | 44,000 | 43,965,683 | ||||||||
Toyota Credit Canada, Inc. | 0.320(n) | 01/07/21 | 38,000 | 37,935,822 | ||||||||
Toyota Finance Australia Ltd. | 0.340(n) | 12/16/20 | 71,000 | 70,927,603 | ||||||||
Toyota Motor Credit Corp. | 0.290(n) | 11/25/20 | 25,000 | 24,979,281 | ||||||||
Toyota Motor Finance (Netherlands) BV | 0.330(n) | 12/14/20 | 50,000 | 49,939,556 | ||||||||
UBS AG, | ||||||||||||
144A, 3 Month LIBOR + 0.200% | 0.544(c) | 11/30/20 | 85,000 | 85,010,253 | ||||||||
144A, 3 Month LIBOR + 0.018% | 0.477(c) | 06/23/21 | 75,000 | 75,009,597 | ||||||||
144A, 3 Month LIBOR + 0.170% | 0.436(c) | 07/12/21 | 100,000 | 99,999,989 | ||||||||
Westpac Banking Corp., | ||||||||||||
144A, 3 Month LIBOR + 0.090% | 0.427(c) | 05/28/21 | 70,000 | 70,017,118 |
See Notes to Financial Statements.
62 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
COMMERCIAL PAPER (Continued) | ||||||||||||
Westpac Banking Corp., (cont’d.) | ||||||||||||
144A, 3 Month LIBOR + 0.090% | 0.421%(c) | 05/28/21 | 10,000 | $ | 10,002,445 | |||||||
|
| |||||||||||
TOTAL COMMERCIAL PAPER | ||||||||||||
(amortized cost $7,308,135,576) | 7,312,106,642 | |||||||||||
|
| |||||||||||
CORPORATE BONDS 2.1% | ||||||||||||
Auto Manufacturers 0.2% | ||||||||||||
BMW US Capital LLC (Germany), | ||||||||||||
Gtd. Notes, 144A, 3 Month LIBOR + 0.370% | 0.794(c) | 08/14/20 | 24,000 | 24,003,586 | ||||||||
Gtd. Notes, 144A | 3.250 | 08/14/20 | 9,400 | 9,407,626 | ||||||||
Toyota Motor Credit Corp., | ||||||||||||
Sr. Unsec’d. Notes, MTN, Secured Overnight Financing Rate + 0.400% | 0.490(c) | 10/23/20 | 5,158 | 5,159,956 | ||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.150% | 0.524(c) | 08/21/20 | 15,950 | 15,949,244 | ||||||||
|
| |||||||||||
54,520,412 | ||||||||||||
Banks 1.7% | ||||||||||||
Australia & New Zealand Banking Group Ltd. (Australia), | ||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.460% | 0.846(c) | 05/17/21 | 23,000 | 23,078,619 | ||||||||
Canadian Imperial Bank of Commerce (Canada), | ||||||||||||
Sr. Unsec’d. Notes | 2.100 | 10/05/20 | 50,000 | 50,165,004 | ||||||||
Cooperatieve Rabobank UA (Netherlands), | ||||||||||||
Sr. Unsec’d. Notes, 3 Month LIBOR + 0.430% | 0.675(c) | 04/26/21 | 28,575 | 28,649,031 | ||||||||
Credit Agricole Corporate & Investment Bank (France), | ||||||||||||
Gtd. Notes, 144A, MTN, 3 Month LIBOR + 0.285% | 0.841(c) | 11/02/20 | 30,000 | 30,016,547 | ||||||||
Gtd. Notes, 144A, MTN, 3 Month LIBOR + 0.400% | 0.956(c) | 05/03/21 | 23,000 | 23,053,296 | ||||||||
Royal Bank of Canada (Canada), | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 2.500 | 01/19/21 | 8,000 | 8,080,157 | ||||||||
Sr. Unsec’d. Notes, MTN | 2.150 | 10/26/20 | 35,000 | 35,158,900 | ||||||||
Skandinaviska Enskilda Banken AB (Sweden), | ||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.430% | 0.816(c) | 05/17/21 | 117,010 | 117,313,577 | ||||||||
Svenska Handelsbanken AB (Sweden), | ||||||||||||
Gtd. Notes, 3 Month LIBOR + 0.360% | 0.678(c) | 09/08/20 | 7,000 | 7,002,867 | ||||||||
Gtd. Notes, MTN | 2.450 | 03/30/21 | 25,000 | 25,356,132 | ||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.470% | 0.830(c) | 05/24/21 | 19,500 | 19,562,829 | ||||||||
Toronto-Dominion Bank (The) (Canada), | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 2.550 | 01/25/21 | 20,000 | 20,214,729 | ||||||||
Sr. Unsec’d. Notes, MTN, 3 Month LIBOR + 0.430% | 0.745(c) | 06/11/21 | 9,000 | 9,030,257 | ||||||||
UBS AG (Switzerland), | ||||||||||||
Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 0.480% | 0.830(c) | 12/01/20 | 2,300 | 2,302,650 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 63 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
CORPORATE BONDS (Continued) | ||||||||||||
Banks (Continued) | ||||||||||||
Sr. Unsec’d. Notes, 144A | 2.450% | 12/01/20 | 25,000 | $ | 25,130,060 | |||||||
Wells Fargo Bank NA, | ||||||||||||
Sr. Unsec’d. Notes | 2.600 | 01/15/21 | 32,800 | 33,161,322 | ||||||||
|
| |||||||||||
457,275,977 | ||||||||||||
Insurance 0.2% | ||||||||||||
New York Life Global Funding, | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.160% | 0.456(c) | 10/01/20 | 45,000 | 45,014,618 | ||||||||
Principal Life Global Funding II, | ||||||||||||
Sec’d. Notes, 144A, 3 Month LIBOR + 0.330% | 0.674(c) | 03/02/21 | 12,000 | 12,012,924 | ||||||||
|
| |||||||||||
57,027,542 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS | ||||||||||||
(amortized cost $567,750,542) | 568,823,931 | |||||||||||
|
| |||||||||||
MUNICIPAL BOND 0.1% | ||||||||||||
Texas | ||||||||||||
University of Texas System (The), Taxable Revenue Bond, Sub Series, Refunding, FRDD | ||||||||||||
(amortized cost $19,500,000) | 0.140(cc) | 08/01/45 | 19,500 | 19,500,000 | ||||||||
|
| |||||||||||
REPURCHASE AGREEMENT(m) 0.9% | ||||||||||||
Credit Agricole Corporate & Investment Bank, | ||||||||||||
0.10%, dated 07/31/20, due 08/03/20 in the amount of $259,942,166 | ||||||||||||
(amortized cost $259,940,000) | 259,940 | 259,940,000 | ||||||||||
|
| |||||||||||
Interest Rate | Maturity Date | |||||||||||
TIME DEPOSIT 0.1% | ||||||||||||
Credit Agricole Corporate & Investment Bank | ||||||||||||
(cost $23,211,000) | 0.090% | 08/03/20 | 23,211 | 23,211,000 | ||||||||
|
| |||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS 1.0% | ||||||||||||
Federal Farm Credit Bank, 1 Month LIBOR + (0.010)% (Cap N/A, Floor 0.000%) | 0.152(c) | 06/02/21 | 17,000 | 16,995,036 | ||||||||
Federal Home Loan Bank | 0.140(n) | 10/14/20 | 124,000 | 123,977,680 |
See Notes to Financial Statements.
64 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued) | ||||||||||||
Federal Home Loan Bank, 1 Month LIBOR + 0.000% | ||||||||||||
(Cap N/A, Floor 0.000%) | 0.179%(c) | 09/28/21 | 121,000 | $ | 120,972,133 | |||||||
|
| |||||||||||
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS | ||||||||||||
(amortized cost $261,962,339) | 261,944,849 | |||||||||||
|
| |||||||||||
U.S. TREASURY OBLIGATIONS(n) 34.6% | ||||||||||||
U.S. Cash Management Bills | 0.126 | 10/06/20 | 662,000 | 661,899,965 | ||||||||
U.S. Cash Management Bills | 0.146 | 10/20/20 | 371,000 | 370,931,673 | ||||||||
U.S. Cash Management Bills | 0.165 | 12/01/20 | 92,000 | 91,972,400 | ||||||||
U.S. Cash Management Bills | 0.170 | 11/03/20 | 95,000 | 94,975,722 | ||||||||
U.S. Cash Management Bills | 0.175 | 11/10/20 | 239,000 | 238,950,706 | ||||||||
U.S. Cash Management Bills | 0.191 | 11/17/20 | 108,000 | 107,980,920 | ||||||||
U.S. Treasury Bills | 0.083 | 09/29/20 | 242,000 | 241,964,557 | ||||||||
U.S. Treasury Bills | 0.112 | 08/13/20 | 226,000 | 225,994,820 | ||||||||
U.S. Treasury Bills | 0.115 | 11/12/20 | 134,000 | 133,963,346 | ||||||||
U.S. Treasury Bills | 0.118 | 08/20/20 | 785,000 | 784,967,564 | ||||||||
U.S. Treasury Bills | 0.120 | 11/19/20 | 125,000 | 124,964,375 | ||||||||
U.S. Treasury Bills | 0.130 | 10/22/20 | 1,189,000 | 1,188,755,589 | ||||||||
U.S. Treasury Bills | 0.131 | 08/27/20 | 559,000 | 558,966,460 | ||||||||
U.S. Treasury Bills | 0.131 | 09/08/20 | 259,000 | 258,977,985 | ||||||||
U.S. Treasury Bills | 0.135 | 08/25/20 | 376,000 | 375,981,617 | ||||||||
U.S. Treasury Bills | 0.142 | 10/01/20 | 1,296,000 | 1,295,806,183 | ||||||||
U.S. Treasury Bills | 0.150 | 10/08/20 | 660,000 | 659,889,588 | ||||||||
U.S. Treasury Bills | 0.152 | 09/03/20 | 568,000 | 567,954,759 | ||||||||
U.S. Treasury Bills | 0.160 | 08/11/20 | 130,000 | 129,997,473 | ||||||||
U.S. Treasury Bills | 0.160 | 09/24/20 | 202,000 | 201,973,011 | ||||||||
U.S. Treasury Bills | 0.162 | 10/15/20 | 268,000 | 267,949,731 | ||||||||
U.S. Treasury Bills | 0.164 | 09/10/20 | 238,000 | 237,978,646 | ||||||||
U.S. Treasury Bills | 0.173 | 09/15/20 | 349,000 | 348,961,439 | ||||||||
U.S. Treasury Bills | 0.173 | 09/17/20 | 132,000 | 131,985,356 | ||||||||
|
| |||||||||||
TOTAL U.S. TREASURY OBLIGATIONS | ||||||||||||
(amortized cost $9,302,906,906) | 9,303,743,885 | |||||||||||
|
| |||||||||||
TOTAL INVESTMENTS 101.6% | ||||||||||||
(cost $27,297,028,156) | 27,308,332,692 | |||||||||||
Liabilities in excess of other assets (1.6)% | (438,091,735 | ) | ||||||||||
|
| |||||||||||
NET ASSETS 100.0% | $ | 26,870,240,957 | ||||||||||
|
|
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 65 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
See the Glossary for a list of the abbreviation(s) used in the semiannual report.
# | Principal amount is shown in U.S. dollars unless otherwise stated. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at July 31, 2020. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of July 31, 2020. 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. |
(m) | Repurchase agreements are collateralized by GNMA (coupon rate 4.000%, maturity date 03/20/50), FNMA (coupon rate 4.500%, maturity date 01/01/50) and FHLMC (coupon rate 3.000%, maturity date 10/01/48), with the aggregate value, including accrued interest, of $265,138,800. |
(n) | Rate shown reflects yield to maturity at purchased date. |
(p) | Interest rate not available as of July 31, 2020. |
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 July 31, 2020 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | |||||||||||||
Investments in Securities | |||||||||||||||
Assets | |||||||||||||||
Certificates of Deposit | $— | $ 9,559,062,385 | $— | ||||||||||||
Commercial Paper | — | 7,312,106,642 | — | ||||||||||||
Corporate Bonds | — | 568,823,931 | — | ||||||||||||
Municipal Bond | — | 19,500,000 | — | ||||||||||||
Repurchase Agreement | — | 259,940,000 | — | ||||||||||||
Time Deposit | — | 23,211,000 | — | ||||||||||||
U.S. Government Agency Obligations | — | 261,944,849 | — | ||||||||||||
U.S. Treasury Obligations | — | 9,303,743,885 | — | ||||||||||||
Total | $— | $27,308,332,692 | $— |
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of July 31, 2020 were as follows:
Certificates of Deposit | 35.6 | % | ||
U.S. Treasury Obligations | 34.6 |
Commercial Paper | 27.2 | % | ||
Corporate Bonds | 2.1 |
See Notes to Financial Statements.
66 |
PGIM Institutional Money Market Fund
Schedule of Investments (unaudited) (continued)
as of July 31, 2020
Industry Classification (continued):
U.S. Government Agency Obligations | 1.0 | % | ||
Repurchase Agreement | 0.9 | |||
Time Deposit | 0.1 | |||
Municipal Bond | 0.1 | |||
|
| |||
101.6 | ||||
Liabilities in excess of other assets | (1.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
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 | |||||||||||||
Repurchase Agreement | Credit Agricole Corporate & Investment Bank | $ | 259,940,000 | $ | (259,940,000 | ) | $ | — | |||||||||
|
|
|
|
|
|
(1) | Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 67 |
PGIM Institutional Money Market Fund
Statement of Assets & Liabilities (unaudited)
as of July 31, 2020
Assets | ||||
Investments, at amortized cost which approximates fair value: | ||||
Unaffiliated investments (cost $27,297,028,156) | $27,308,332,692 | |||
Cash | 17,757 | |||
Interest receivable | 11,248,479 | |||
Total Assets | 27,319,598,928 | |||
Liabilities | ||||
Payable for investments purchased | 447,480,101 | |||
Management fee payable | 1,465,604 | |||
Accrued expenses and other liabilities | 394,750 | |||
Affiliated transfer agent fee payable | 16,667 | |||
Trustees’ fees payable | 849 | |||
Total Liabilities | 449,357,971 | |||
Net Assets | $26,870,240,957 | |||
Net assets were comprised of: | ||||
Shares of beneficial interest, at par | $ 26,873,977 | |||
Paid-in capital in excess of par | 26,832,579,353 | |||
Total distributable earnings (loss) | 10,787,627 | |||
Net assets, July 31, 2020 | $26,870,240,957 | |||
Class D | ||||
Net asset value, offering price and redemption price per share, ($26,870,240,957 ÷ 26,873,976,738 shares of beneficial interest issued and outstanding) | $ 0.9999 |
See Notes to Financial Statements.
68 |
PGIM Institutional Money Market Fund
Statement of Operations (unaudited)
Six Months Ended July 31, 2020
Net Investment Income (Loss) | ||||
Interest income | $102,925,394 | |||
Expenses | ||||
Management fee | 16,435,859 | |||
Custodian and accounting fees | 480,530 | |||
Transfer agent’s fees and expenses (including affiliated expense of $ 50,000) | 87,282 | |||
Audit fee | 12,531 | |||
Legal fees and expenses | 7,731 | |||
Shareholders’ reports | 5,698 | |||
Trustees’ fees | 5,381 | |||
Miscellaneous | 8,088 | |||
Total expenses | 17,043,100 | |||
Less: Fee waiver and/or expense reimbursement | (9,373,032 | ) | ||
Net expenses | 7,670,068 | |||
Net investment income (loss) | 95,255,326 | |||
Realized And Unrealized Gain (Loss) On Investments | ||||
Net realized gain (loss) on investment transactions | 306,216 | |||
Net change in unrealized appreciation (depreciation) on investments | 7,649,262 | |||
Net gain (loss) on investment transactions | 7,955,478 | |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $103,210,804 |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 69 |
PGIM Institutional Money Market Fund
Statements of Changes in Net Assets (unaudited)
Six Months Ended July 31, 2020 | Year Ended January 31, 2020 | |||||||||
Increase (Decrease) in Net Assets | ||||||||||
Operations | ||||||||||
Net investment income (loss) | $ | 95,255,326 | $ | 417,017,868 | ||||||
Net realized gain (loss) on investment transactions | 306,216 | 1,011,337 | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 7,649,262 | 384,082 | ||||||||
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 103,210,804 | 418,413,287 | ||||||||
|
|
|
| |||||||
Dividends and Distributions | ||||||||||
Distributions from distributable earnings | (94,473,094 | ) | (419,609,531 | ) | ||||||
|
|
|
| |||||||
Fund share transactions | ||||||||||
Net proceeds from shares sold | 96,035,880,970 | 117,958,548,807 | ||||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 96,037,894 | 417,635,506 | ||||||||
Cost of shares reacquired | (85,762,750,024 | ) | (117,749,769,977 | ) | ||||||
|
|
|
| |||||||
Net increase (decrease) in net assets from Fund share transactions | 10,369,168,840 | 626,414,336 | ||||||||
|
|
|
| |||||||
Total increase (decrease) | 10,377,906,550 | 625,218,092 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 16,492,334,407 | 15,867,116,315 | ||||||||
|
|
|
| |||||||
End of period | $ | 26,870,240,957 | $ | 16,492,334,407 | ||||||
|
|
|
|
See Notes to Financial Statements.
70 |
Notes to Financial Statements (unaudited)
1. Organization
Prudential Investment Portfolios 2 (“PIP2”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. PIP2 consists of eleven separate series: PGIM Core Conservative Bond Fund, PGIM Core Short-Term Bond Fund, PGIM Core Ultra Short Bond Fund, PGIM Institutional Money Market Fund, PGIM Jennison Small-Cap Core Equity Fund, PGIM QMA Emerging Markets Equity Fund, PGIM QMA International Developed Markets Index Fund, PGIM QMA Mid-Cap Core Equity Fund, PGIM QMA US Broad Market Index Fund and PGIM TIPS Fund, each of which are diversified funds for purposes of the 1940 Act, and PGIM QMA Commodity Strategies Fund, which is a non-diversified fund for purposes of the 1940 Act and may invest a greater percentage of its 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 PGIM Core Short-Term Bond Fund, the PGIM Core Ultra Short Bond Fund and the PGIM Institutional Money Market Fund (each, a “Fund” and collectively, the “Funds”). Shares of the Funds are not registered under the Securities Act of 1933, as amended.
The investment objective of each of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund is current income consistent with the preservation of capital and the maintenance of liquidity.
The investment objective of the PGIM Core Short-Term Bond Fund is income consistent with relative stability of principal.
2. Accounting Policies
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Funds consistently follow such policies in the preparation of their financial statements.
Securities Valuation: Each 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. PIP2’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been
71 |
Notes to Financial Statements (unaudited)
(continued)
delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit a 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 some of the Funds’ foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Funds’ 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 and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.
Investments in open-end (other than exchange-traded mutual funds) 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. Each 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.
72 |
OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. Each Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. 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.
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.
Illiquid Securities: Pursuant to Rule 22e-4 under the 1940 Act, the Funds (excluding money market and closed-end funds) have adopted a Board approved Liquidity Risk Management Program (“LRMP”) that requires, among other things, that each Fund limit their illiquid investments that are assets to no more than 15% of net assets. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A Fund may find it difficult to sell illiquid
73 |
Notes to Financial Statements(unaudited)
(continued)
securities at the time considered most advantageous by its subadviser(s) and may incur transaction costs that would not be incurred in the sale of securities that were freely marketable.
Subject to the Board approved LRMP, the PGIM Core Short-Term Bond Fund may invest up to 15% of its net assets in illiquid securities. Separately and subject to guidelines adopted by the Board, the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund may invest up to 5% of their respective net assets in illiquid securities.
Restricted Securities: Securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (“restricted securities”). Such restricted securities are valued pursuant to the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments pursuant to the Funds’ LRMP 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. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be classified higher than “illiquid” under the LRMP (i.e. “moderately liquid” or “less liquid” investments). However, the liquidity of the Funds’ investments in restricted securities could be impaired if trading does not develop or declines.
Repurchase Agreements: Certain Funds entered into repurchase agreements. In connection with transactions in repurchase agreements with United States financial institutions, it is each Fund’s policy that its custodian or designated subcustodians under triparty repurchase agreements, as the case may be, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transactions, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines or, if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
Swap Agreements: The PGIM Core Short-Term Bond Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with a counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation (depreciation) on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. For OTC-traded, upfront
74 |
premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.
Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The PGIM Core Short-Term Bond Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Funds used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments. The Funds’ maximum risk of loss from counterparty credit risk is the discounted net present value of the cash flows to be received from the counterparty over the contract’s remaining life.
Master Netting Arrangements: The Funds are 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 all or a portion of a Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Funds to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Funds’ 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.
PIP 2, on behalf of the PGIM Core Short-Term Bond Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Schedule of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a
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Notes to Financial Statements (unaudited)
(continued)
specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
As of July 31, 2020, the PGIM Core Short-Term Bond Fund has not met conditions under such agreements that give the counterparty the right to call for an early termination.
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, or for certain foreign securities, when the Fund becomes aware of such dividends. 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.
Liquidity Fees and Gates: The PGIM Institutional Money Market Fund has adopted policies and procedures to impose liquidity fees on redemptions and/or temporary redemption gates if the Fund’s weekly liquid assets fall below a designated threshold, subject to the discretion of the Board. If the Fund’s weekly liquid assets fall below 30% of its total assets, the Board, in its discretion, may impose liquidity fees of up to 2% of the value of the shares redeemed and/or impose temporary gates on redemptions. In addition, if the Fund’s weekly liquid assets fall below 10% of its total assets at the end of any business day, the Fund must impose a liquidity fee in the default amount of 1% of the value of shares redeemed unless the Board determines that not doing so is in the best interests of the Fund.
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Taxes: It is each 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 PGIM Institutional Money Market Fund and PGIM Core Ultra Short Bond Fund declare all of their net investment income and net realized short-term capital gains, if any, as dividends daily to their shareholders of record at the time of such declaration and pay monthly to their shareholders of record at the time of such declaration. The PGIM Core Short-Term Bond Fund declares all of its net investment income as dividends daily and pays monthly to its shareholders of record at the time of such declaration. Distributions of net realized capital gains, if any, are made 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 between total distributable earnings (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.
3. Agreements
Under a management agreement with PIP2, PGIM Investments manages each Fund’s investment operations and administers its business affairs. Pursuant to this agreement, the Manager has responsibility for all investment management services and supervises the subadviser’s performance of such services. PGIM Investments has entered into subadvisory agreements with PGIM Limited and PGIM, Inc., which provides subadvisory services to the Funds through its PGIM Fixed Income unit (each a “subadviser”and collectively the “subadvisers”). The subadvisory agreements provide that the subadvisers will furnish investment advisory services in connection with the management of the Funds. In connection therewith, the subadvisers are obligated to keep certain books and records of each Fund. For their services on the PGIM Core Ultra Short Bond Fund and PGIM Core Short-Term Bond Fund, the subadvisers are reimbursed by PGIM Investments for direct costs, excluding profit and overhead, incurred by the subadvisers in furnishing services to PGIM Investments. PGIM Investments pays for the services of the subadvisers on the PGIM Institutional Money Market Fund, the cost of compensation of officers of the Fund, occupancy and certain clerical and administrative expenses of the Fund. The Fund bears all other costs and expenses.
The PGIM Core Ultra Short Bond Fund and PGIM Core Short-Term Bond Fund reimburse PGIM Investments for its costs and expenses incurred in managing each Fund’s investment
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Notes to Financial Statements (unaudited)
(continued)
operations and administering its business affairs. The costs are accrued daily and payable monthly. For the period ended July 31, 2020, such costs were at an effective annual rate of 0.005% for the PGIM Core Ultra Short Bond Fund and 0.026% for the PGIM Core Short-Term Bond Fund. The management fee paid to the Manager by the PGIM Institutional Money Market Fund was accrued daily and payable monthly at an annual rate of 0.15% of the average daily net assets of the Fund. All amounts paid or payable by the Fund to the Manager, under the agreement, are reflected in the Statement of Operations.
The Manager has contractually agreed through May 31, 2021, to limit the total annual operating expenses after fee waivers and/or expense reimbursements to 0.07% of the PGIM Institutional Money Market Fund’s average daily net assets. 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.
PGIM Investments, PGIM Limited, and PGIM, Inc. are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
4. 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 PGIM Core Short-Term Bond Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”). Through the Fund’s investments in the mentioned underlying fund, PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services. In addition to the realized and unrealized gains on investments in the Core Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income”.
The Funds 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 subject to certain conditions, 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,
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and/or common officers. Pursuant to the Rule 17a-7 procedures and consistent with guidance issued by the Securities and Exchange Commission, the Fund’s Chief Compliance Officer (“CCO”) prepares a quarterly summary of all such transactions for submission to the Board, together with the CCO’s written representation that all such 17a-7 transactions were effected in accordance with the Funds’ Rule 17a-7 procedures.
For the reporting period ended July 31, 2020, the Fund’s purchase and sales transactions under Rule 17a-7 and realized gain as a result of 17a-7 sales transactions were as follows:
Purchases | Sales | Realized Gain | ||||||||||
PGIM Core Ultra Short Bond Fund | $ | 8,111,154 | $ | — | $— | |||||||
PGIM Institutional Money Market Fund | 40,930,000 | 17,027,030 | — |
5. 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 reporting period ended July 31, 2020, were as follows:
Fund | Cost of Purchases | Proceeds from Sales | ||||||
PGIM Core Short-Term Bond Fund | $ | 634,825,256 | $ | 786,502,495 | ||||
PGIM Core Ultra Short Bond Fund | 1,042,945,000 | 1,230,555,000 | ||||||
PGIM Institutional Money Market Fund | — | — |
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the reporting period ended July 31, 2020, is presented as follows:
PGIM Core Short-Term Bond Fund:
Value, of Period | Cost of | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Income | |||||||
PGIM Core Ultra Short Bond Fund* | ||||||||||||||
$71,159,645 | $1,072,954,807 | $822,427,070 | $— | $— | $321,687,382 | 321,687,382 | $485,737 |
* | The Fund did not have any capital gain distributions during the reporting period. |
6. Tax Information
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Notes to Financial Statements (unaudited)
(continued)
The United States federal income tax basis of the Funds’ investments and the net unrealized appreciation as of July 31, 2020 were as follows:
Fund | Tax Basis | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation | ||||||||||||||||
PGIM Core Short-Term Bond Fund | $ | 2,697,213,103 | $ | 35,892,050 | $ | (28,390,318 | ) | $ | 7,501,732 | |||||||||||
PGIM Core Ultra Short Bond Fund | 32,202,136,105 | 13,616,589 | (353,970 | ) | 13,262,619 | |||||||||||||||
PGIM Institutional Money Market Fund | 27,297,028,156 | 11,631,558 | (327,022 | ) | 11,304,536 |
The Manager has analyzed the Funds’ 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 Funds’ financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Funds’ U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended January 31, 2020 are subject to such review.
7. Capital and Ownership
Shares of the PGIM Core Short-Term Bond Fund, the PGIM Core Ultra Short Bond Fund and the PGIM Institutional Money Market Fund are available only to investment companies managed by PGIM Investments and, as applicable, certain investment advisory clients of PGIM, Inc.
PIP 2 has authorized an unlimited number of shares of beneficial interest at $0.001 par value per share.
As of July 31, 2020, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned all shares of the Funds.
At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:
Affiliated | Unaffiliated | |||||||
Fund | Number of Shareholders | Percentage of Outstanding Shares | Number of Shareholders | Percentage of Outstanding Shares | ||||
PGIM Core Short-Term Bond Fund | 2 | 95.2% | — | —% | ||||
PGIM Core Ultra Short Bond Fund | 6 | 49.0 | — | — |
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Affiliated | Unaffiliated | |||||||
Fund | Number of Shareholders | Percentage of Outstanding Shares | Number of Shareholders | Percentage of Outstanding Shares | ||||
PGIM Institutional Money Market Fund | 4 | 39.4% | — | —% |
Transactions in shares of beneficial interest were as follows:
PGIM Core Short-Term Bond Fund | PGIM Core Ultra Short Bond Fund | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Six months ended July 31, 2020: | ||||||||||||||||||||
Shares sold | 188,512,930 | $ | 1,717,868,066 | 185,896,964,656 | $ | 185,896,964,656 | ||||||||||||||
Shares issued in reinvestment of dividends and distributions | 816,935 | 7,466,078 | 129,993,205 | 129,993,205 | ||||||||||||||||
Shares reacquired | (186,198,612 | ) | (1,698,589,989 | ) | (174,826,460,323 | ) | (174,826,460,323 | ) | ||||||||||||
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Net increase (decrease) in shares outstanding | 3,131,253 | $ | 26,744,155 | 11,200,497,538 | $ | 11,200,497,538 | ||||||||||||||
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Year ended January 31, 2020: | ||||||||||||||||||||
Shares sold | 32,467,995 | $ | 299,662,161 | 157,423,011,107 | $ | 157,423,011,107 | ||||||||||||||
Shares issued in reinvestment of dividends and distributions | 3,323,434 | 30,665,787 | 491,271,324 | 491,271,324 | ||||||||||||||||
Shares reacquired | (57,215,011 | ) | (528,079,289 | ) | (158,676,910,303 | ) | (158,676,910,303 | ) | ||||||||||||
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| |||||||||||||
Net increase (decrease) in shares outstanding | (21,423,582 | ) | $ | (197,751,341 | ) | (762,627,872 | ) | $ | (762,627,872 | ) | ||||||||||
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PGIM Institutional Money Market Fund | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||
Six months ended July 31, 2020: | ||||||||||||||||||||
Shares sold | 96,091,426,615 | $ | 96,035,880,970 | |||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 96,070,935 | 96,037,894 | ||||||||||||||||||
Shares reacquired | (85,803,715,429 | ) | (85,762,750,024 | ) | ||||||||||||||||
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| |||||||||||||||||
Net increase (decrease) in shares outstanding | 10,383,782,121 | $ | 10,369,168,840 | |||||||||||||||||
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| |||||||||||||||||
Year ended January 31, 2020: | ||||||||||||||||||||
Shares sold | 117,934,244,960 | $ | 117,958,548,807 | |||||||||||||||||
Shares issued in reinvestment of dividends and distributions | 417,550,878 | 417,635,506 | ||||||||||||||||||
Shares reacquired | (117,725,534,369 | ) | (117,749,769,977 | ) | ||||||||||||||||
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|
|
| |||||||||||||||||
Net increase (decrease) in shares outstanding | 626,261,469 | $ | 626,414,336 | |||||||||||||||||
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8. Borrowings
PIP 2, on behalf of the PGIM Core Short-Term Bond Fund, along with other affiliated registered investment companies (the “RICs”), 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 table below provides details of the current SCA in effect at the reporting period-end.
SCA | ||
Term of Commitment | 10/3/2019 – 10/1/2020 | |
Total Commitment | $ 1,222,500,000* |
81 |
Notes to Financial Statements (unaudited)
(continued)
SCA | ||
Annualized Commitment Fee on the Unused Portion of the SCA | 0.15% | |
Annualized Interest Rate on Borrowings | 1.20% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent | |
*Effective March 31, 2020, the SCA’s total commitment was increased from $900,000,000 to $1,162,500,000 and subsequently, effective April 7, 2020 was increased to $1,222,500,000. |
Certain 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 RICs in the SCA equitably.
The PGIM Core Short-Term Bond Fund did not utilize the SCA during the reporting period ended July 31, 2020.
9. Risks of Investing in the Funds
The Funds’ risks include, but are not limited to, some or all of the risks discussed below. For further information on the risks applicable to any given Fund, please refer to the Prospectus and Statement of Additional Information of that Fund.
Bond Obligations Risk: The Funds’ holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed-income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Funds for redemption before it matures and the Funds may not be able to reinvest at the same level and therefore would earn less income.
Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Funds. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Funds will depend on the subadviser’s ability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increase investment losses to the Funds. Other risks
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arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Funds’ derivatives positions. In fact, many OTC derivative instruments will not have liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet its obligations to the Funds.
Interest Rate Risk: The value of an investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Funds may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Funds’ holdings may fall sharply. This is referred to as “extension risk”. The Funds may face a heightened level of interest rate risk as a result of the U.S. Federal Reserve Board’s policies. The Funds’ investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Funds’ shares. There is no requirement that these entities maintain their investment in the Funds. There is a risk that such large shareholders or that the Funds’ shareholders generally may redeem all or a substantial portion of their investments in the Funds in a short period of time, which could have a significant negative impact on the Funds’ NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Funds’ ability to implement its investment strategy. The Funds’ ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Funds may invest a larger portion of its assets in cash or cash equivalents.
LIBOR Risk: Many financial instruments use or may use a floating rate based on the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On July 27, 2017, the Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential impact of a transition away from LIBOR on the Funds or the financial instruments in which the Funds invest cannot yet be determined. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Funds’ performance and/or net asset value. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
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Notes to Financial Statements (unaudited)
(continued)
Liquidity Risk: The Funds may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Funds are difficult to purchase or sell. Liquidity risk includes the risk that the Funds may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be more difficult to value. If a Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Funds may lose money. In addition, when there is no willing buyer and investments may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, the Funds may incur higher transaction costs when executing trade orders of a given size. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Funds’ value or prevent the Funds from being able to take advantage of other investment opportunities.
Market and Credit Risk: Securities markets may be volatile and the market prices of the Funds’ securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Funds fall, the value of an investment in the Funds will decline. Additionally, the Funds may also be exposed to credit risk in the event that an issuer or guarantor fails to perform or that an institution or entity with which the Funds have unsettled or open transactions defaults.
Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally.
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PGIM Core Short-Term Bond Fund
Financial Highlights (unaudited)
Six Months Ended July 31, 2020 | Year Ended January 31, | |||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.21 | $9.22 | $9.28 | $9.27 | $9.28 | $9.33 | ||||||||||||||||||||||
Income (loss) from investment operations: |
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Net investment income (loss) | 0.10 | 0.27 | 0.26 | 0.19 | 0.14 | 0.13 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (0.02 | ) | 0.02 | (0.04 | ) | 0.03 | 0.02 | (0.03 | ) | |||||||||||||||||||
Total from investment operations | 0.08 | 0.29 | 0.22 | 0.22 | 0.16 | 0.10 | ||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.29 | ) | (0.28 | ) | (0.21 | ) | (0.17 | ) | (0.15 | ) | ||||||||||||||||
Distributions from net realized gains | - | (0.01 | ) | - | - | - | - | |||||||||||||||||||||
Total dividends and distributions | (0.09 | ) | (0.30 | ) | (0.28 | ) | (0.21 | ) | (0.17 | ) | (0.15 | ) | ||||||||||||||||
Net asset value, end of period | $9.20 | $9.21 | $9.22 | $9.28 | $9.27 | $9.28 | ||||||||||||||||||||||
Total Return(b): | 0.85 | % | 3.16 | % | 2.42 | % | 2.36 | % | 1.78 | % | 1.04 | % | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $2,736,736 | $2,711,895 | $2,911,225 | $3,119,050 | $3,050,290 | $2,994,467 | ||||||||||||||||||||||
Average net assets (000) | $2,727,069 | $2,860,307 | $2,997,474 | $3,082,883 | $3,021,138 | $3,403,519 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.04 | %(d) | 0.04 | % | 0.03 | % | 0.03 | % | 0.03 | % | 0.03 | % | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.04 | %(d) | 0.04 | % | 0.03 | % | 0.03 | % | 0.03 | % | 0.03 | % | ||||||||||||||||
Net investment income (loss) | 2.25 | %(d) | 2.91 | % | 2.76 | % | 2.04 | % | 1.50 | % | 1.34 | % | ||||||||||||||||
Portfolio turnover rate(e) | 29 | % | 43 | % | 35 | % | 53 | % | 29 | % | 25 | % |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, 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) | Does not include expenses of the underlying funds in which the Fund invests. |
(d) | Annualized. |
(e) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Core Short-Term Bond Fund | 85 |
PGIM Core Ultra Short Bond Fund
Financial Highlights (unaudited)
Six Months Ended July 31, 2020 | Year Ended January 31, | |||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||||
Income (loss) from investment operations: |
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Net investment income (loss) | 0.01 | 0.02 | 0.02 | 0.01 | 0.01 | - | (b) | |||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | - | (b) | - | (b) | - | (b) | - | (b) | - | (b) | - | |||||||||||||||||
Total from investment operations | 0.01 | 0.02 | 0.02 | 0.01 | 0.01 | - | (b) | |||||||||||||||||||||
Less Dividends and Distributions: |
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Dividends from net investment income | (0.01 | ) | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | - | (b) | ||||||||||||||||
Net asset value, end of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||||
Total Return(c): | 0.52 | % | 2.38 | % | 2.17 | % | 1.18 | % | 0.63 | % | 0.21 | % | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $31,424,116 | $20,215,337 | $20,975,373 | $22,510,708 | $25,556,796 | $41,757,809 | ||||||||||||||||||||||
Average net assets (000) | $27,198,613 | $20,937,015 | $21,560,540 | $23,440,098 | $30,480,402 | $41,343,564 | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||||
Net investment income (loss) | 0.97 | %(d) | 2.35 | % | 2.14 | % | 1.17 | % | 0.60 | % | 0.21 | % | ||||||||||||||||
Portfolio turnover rate(e) | 61 | % | 61 | % | 94 | % | 111 | % | 46 | % | - | % |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Less than $0.005 per share. |
(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. |
See Notes to Financial Statements.
86 |
(e) | The Portfolio turnover rate calculation is for the six months ended July 31, 2020, the years ended January 31, 2020, 2019 and 2018 and the period March 30, 2016 through January 31, 2017, respectively, and includes floating rate daily demand notes. Prior to March 30, 2016, the Fund was classified as a money market under Rule 2a-7 of the Investment Company Act of 1940 and disclosure of the Fund’s portfolio turnover was not applicable. |
See Notes to Financial Statements.
Prudential Investment Portfolios 2/PGIM Institutional Money Market Fund | 87 |
PGIM Institutional Money Market Fund
Financial Highlights (unaudited)
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Six Months 2020 | Year Ended January 31, | July 19, 2016(a) 2017 | ||||||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.0001 | $1.0002 | $1.0001 | $1.0002 | $1.0000 | |||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.0043 | 0.0230 | 0.0214 | 0.0114 | 0.0031 | |||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.0003 | (0.0001 | ) | - | (0.0001 | ) | 0.0002 | |||||||||||||||||||||
Total from investment operations | 0.0046 | 0.0229 | 0.0214 | 0.0113 | 0.0033 | |||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.0048 | ) | (0.0230 | ) | (0.0213 | ) | (0.0114 | ) | (0.0031 | ) | ||||||||||||||||||
Net asset value, end of period | $0.9999 | $1.0001 | $1.0002 | $1.0001 | $1.0002 | |||||||||||||||||||||||
Total Return(c): | 0.45 | % | 2.33 | % | 2.16 | % | 1.14 | % | 0.35 | % | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $26,870,241 | $16,492,334 | $15,867,116 | $13,215,520 | $13,438,067 | |||||||||||||||||||||||
Average net assets (000) | $22,034,888 | $18,124,501 | $15,329,904 | $14,177,712 | $12,592,981 | |||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.07 | %(d) | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | %(d) | ||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.16 | %(d) | 0.16 | % | 0.16 | % | 0.16 | % | 0.16 | %(d) | ||||||||||||||||||
Net investment income (loss) | 0.87 | %(d) | 2.30 | % | 2.14 | % | 1.14 | % | 0.61 | %(d) |
(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) | Annualized. |
See Notes to Financial Statements.
88 |
Fund Liquidity Risk Management Program (unaudited)
Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the PGIM Core Short-Term Bond Fund and PGIM Core Ultra Short Bond Fund (“the Funds”) have adopted and implemented a liquidity risk management program (the “LRMP”). The Funds’ LRMP seeks to assess and manage the Funds’ liquidity risk, which is defined as the risk that the Funds are unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Funds. The Trust’s Board of Trustees (the “Board”) has approved PGIM Investments LLC (“PGIM Investments”), the Funds’ investment manager, to serve as the administrator of the Funds’ LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.
The Funds’ LRMP includes a number of processes designed to support the assessment and management of their liquidity risk. In particular, the Funds’ LRMP includes no less than annual assessments of factors that influence the Funds’ liquidity risk; no less than monthly classifications of the Funds’ investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Funds’ assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Funds do not invest primarily in highly liquid investments; and regular reporting to the Funds’ Board.
At a meeting of the Board on March 3-5, 2020, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Funds’ LRMP, including any material changes to the LRMP for the period from the inception of the Funds’ LRMP on December 1, 2018 through December 31, 2019 (“Reporting Period”). The LRMP Report concluded that the Funds’ LRMP was reasonably designed to assess and manage the Funds’ liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Funds’ investment strategies continue to be appropriate given the Funds’ status as open-end funds.
There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Funds, including liquidity risks presented by the Funds’ investment portfolio, is found in the Funds’ Prospectus and Statement of Additional Information.
Prudential Investment Portfolios 2 | 89 |
Approval of Advisory Agreements
PGIM Core Short-Term Bond Fund
PGIM Core Ultra Short Bond Fund
The Board of Trustees
The Board of Trustees (the “Board”) of PGIM Core Short-Term Bond Fund and PGIM Core Ultra Short Bond Fund1 (each, a “Fund,” and collectively, the “Funds”) consists of eleven individuals, nine of whom are not “interested persons” of the Funds, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Funds and their operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established four standing committees: the Audit Committee, the Nominating and Governance Committee, and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.
Annual Approval of the Funds’ Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew each Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and each Fund’s subadvisory agreements with each of PGIM, Limited (“PGIML”) and PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit. In considering the renewal of the agreements, the Board, including all of the Independent Trustees, met on May 27, 2020 and on June 9-11, 2020 and approved the renewal of the agreements through July 31, 2021, after concluding that the renewal of the agreements was in the best interests of each Fund and its shareholders.
In advance of the meeting, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with their consideration. Among other things, the Board considered comparative fee information from PGIM Investments, PGIML and PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadvisers, the performance of each Fund, the profitability of PGIM Investments and its affiliates, expenses
1 | PGIM Core Short-Term Bond Fund and PGIM Ultra Short Bond Fund are both series of Prudential Investment Portfolios 2. |
Prudential Investment Portfolios 2 |
Approval of Advisory Agreements (continued)
and fees, and the potential for economies of scale that may be shared with each Fund and its shareholders as each Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Funds. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on May 27, 2020 and on June 9-11, 2020.
The Trustees determined that the overall arrangements between the Funds and PGIM Investments, which serves as the Funds’ investment manager pursuant to a management agreement, and between PGIM Investments and each of PGIML and PGIM, which serve as each Fund’s subadvisers pursuant to the terms of subadvisory agreements with PGIM Investments, are in the best interests of each Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to each Fund by PGIM Investments, PGIML and PGIM Fixed Income. The Board noted that PGIML and PGIM Fixed Income are affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadvisers for the Funds, as well as the provision of fund recordkeeping, compliance and other services to each Fund, and PGIM Investments’ role as administrator for the Funds’ liquidity risk management program. With respect to PGIM Investments’ oversight of the subadvisers, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadvisers. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Funds who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIML and PGIM Fixed Income, which it noted had been selected by PGIM Investments, including investment research and security selection, as well as adherence to the Funds’ investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreements.
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The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of each Fund, PGIML and PGIM Fixed Income, and also considered the qualifications, backgrounds and responsibilities of the PGIML and PGIM Fixed Income portfolio managers who are responsible for the day-to-day management of each Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’, PGIML’s and PGIM Fixed Income’s organizational structure, senior management, investment operations, and other relevant information pertaining to each of PGIM Investments, PGIML and PGIM Fixed Income. The Board also noted that it received favorable compliance reports from the Trust’s Chief Compliance Officer (“CCO”) as to each of PGIM Investments, PGIML and PGIM Fixed Income.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Funds by PGIML and PGIM Fixed Income, and that there was a reasonable basis on which to conclude that each Fund benefits from the services provided by PGIM Investments, PGIML and PGIM Fixed Income under the management and subadvisory agreements.
Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Funds’ investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. However, the Board considered that the cost of services provided by PGIM Investments to PGIM Core Short-Term Bond Fund during the year ended December 31, 2019 exceeded the benefits gained by PGIM Investments, resulting in an operating loss to PGIM Investments. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board noted that the Funds do not have a traditional management structure, because they are operated at cost. Accordingly, the Board determined that the Funds, which have low expenses, benefit directly from any cost savings experienced by PGIM Investments.
Prudential Investment Portfolios 2 |
Approval of Advisory Agreements (continued)
Other Benefits to PGIM Investments, PGIML and PGIM Fixed Income
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIML, PGIM Fixed Income and their affiliates as a result of their relationship with the Funds. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Funds’ transfer agent (which is affiliated with PGIM Investments), and benefits to its reputation as well as other intangible benefits resulting from PGIM Investments’ association with the Funds. The Board concluded that the potential benefits to be derived by PGIML and PGIM Fixed Income included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments, PGIML and PGIM Fixed Income were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Funds / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Funds for the one-, three-, five-, and ten-year periods ended December 31, 2019. With respect to the fees and expenses of each Fund, because each Fund is operated at cost, the Board did not consider fees and expenses as a meaningful factor in its deliberations.
The mutual funds included in each Fund’s Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed each Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding each Fund’s performance. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual
Visit our website at pgim.com/investments |
management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
PGIM Core Ultra Short Bond Fund | 1 Year | 3 Years | 5 Years | 10 Years | ||||
1st Quartile | 1st Quartile | 1st Quartile | 1st Quartile | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 1st Quartile |
• | The Board noted that the Fund outperformed its benchmark index over all periods. |
• | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
• | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
PGIM Core Short- Term Bond Fund | 1 Year | 3 Years | 5 Years | 10 Years | ||||
1st Quartile | 1st Quartile | 1st Quartile | 1st Quartile | |||||
Actual Management Fees: 1st Quartile | ||||||||
Net Total Expenses: 1st Quartile |
• | The Board noted that the Fund outperformed its benchmark index over the three-, five-, and ten-year periods, though it underperformed over the one-year period. |
• | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements. |
• | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of each Fund and its shareholders.
Prudential Investment Portfolios 2 |
Approval of Advisory Agreements
PGIM Institutional Money Market Fund
The Fund’s Board of Trustees
The Board of Trustees (the “Board”) of PGIM Institutional Money Market Fund (the “Fund”)1 consists of eleven individuals, nine of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established four standing committees: the Audit Committee, the Nominating and Governance Committee, and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.
Annual Approval of the Fund’s Advisory Agreements
As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with each of PGIM, Limited (“PGIML”) and PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit. In considering the renewal of the agreements, the Board, including all of the Independent Trustees, met on May 27, 2020 and on June 9-11, 2020 and approved the renewal of the agreements through July 31, 2021, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments, PGIML and PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.
In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadvisers, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board
1 | PGIM Institutional Money Market Fund is a series of Prudential Investment Portfolios 2. |
Visit our website at pgim.com/investments |
considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on May 27, 2020 and on June 9-11, 2020.
The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and each of PGIML and PGIM, which serve as the Fund���s subadvisers pursuant to the terms of subadvisory agreements with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.
Nature, Quality and Extent of Services
The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments, PGIML and PGIM Fixed Income. The Board noted that PGIML and PGIM Fixed Income are affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadvisers for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadvisers, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadvisers. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIML and PGIM Fixed Income, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreements.
The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund, PGIML and PGIM Fixed Income, and also considered the qualifications, backgrounds and responsibilities of the PGIML and PGIM Fixed Income portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided
Prudential Investment Portfolios 2 |
Approval of Advisory Agreements (continued)
with information pertaining to PGIML’s, PGIM Investments’ and PGIM Fixed Income’s organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments, PGIML and PGIM Fixed Income. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to each of PGIM Investments, PGIML and PGIM Fixed Income.
The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by PGIML and PGIM Fixed Income, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, PGIML and PGIM Fixed Income under the management and subadvisory agreements.
Costs of Services and Profits Realized by PGIM Investments
The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.
Economies of Scale
The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that, while the Fund does not have breakpoints in its management fees, economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.
Visit our website at pgim.com/investments |
The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.
Other Benefits to PGIM Investments, PGIML and PGIM Fixed Income
The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIML, PGIM Fixed Income and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIML and PGIM Fixed Income included those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments, PGIML and PGIM Fixed Income were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.
Performance of the Fund / Fees and Expenses
The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one- and three-year periods ended December 31, 2019. The Board considered that the Fund commenced operations on July 19, 2016 and that longer-term performance was not yet available.
The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended July 31, 2019. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.
The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
Prudential Investment Portfolios 2 |
Approval of Advisory Agreements (continued)
The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.
Net Performance | 1 Year | 3 Years | 5 Years | 10 Years | ||||
1st Quartile | 1st Quartile | N/A | N/A | |||||
Actual Management Fees:1st Quartile | ||||||||
Net Total Expenses:1st Quartile |
• | The Board noted that the Fund outperformed its Peer Universe median over all periods. |
• | The Board considered that the Fund commenced operations on July 19, 2016 and that longer-term performance was not yet available. |
• | The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap, which (exclusive of certain fees and expenses) caps total annual operating expenses at 0.07% through May 31, 2021. |
• | The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to continue to allow the Fund to create a longer-term performance record, and to renew the agreements. |
• | The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided. |
* * *
After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.
Visit our website at pgim.com/investments |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | pgim.com/investments |
PROXY VOTING |
The Board of Trustees of the Funds have delegated to the Funds’ subadvisers the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Funds. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Funds’ website and on the Commission’s website at www.sec.gov. |
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 • Brian K. Reid • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer • Claudia DiGiacomo, Chief Legal Officer • Dino Capasso, Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Andrew R. French, Secretary • Jonathan D. Shain, Assistant Secretary • Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary • Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary • Lana Lomuti, Assistant Treasurer • Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer • Deborah Conway, Assistant Treasurer |
MANAGER | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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SUBADVISERS | PGIM Fixed Income | 655 Broad Street Newark, NJ 07102 | ||
PGIM Limited | Grand Buildings, 1-3 Strand Trafalgar Square London, WC2N 5HR United Kingdom | |||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 240 Greenwich Street New York, NY 10286 | ||
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TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | PricewaterhouseCoopers LLP | 300 Madison Avenue New York, NY 10017 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 | ||
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An investor should consider the investment objectives, risks, charges, and expenses of each Fund carefully before investing. The prospectuses contain this and other information about the Funds. An investor may obtain a prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. Each prospectus should be read carefully before investing. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, c/o PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to that Trustee at the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
PGIM Core Short-Term Bond Fund and PGIM Core Ultra-Short Bond Fund: The Funds’ file their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Funds’ Form N-PORT filings are available on the Commission’s website at sec.gov. PGIM Institutional Money Market Fund: The Fund files a complete schedule of portfolio holdings with the Commission monthly on Form N-MFP. The Commission delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. The Form N-MFP filings (along with the Fund’s annual report filed on Form N-CSR and semi-annual report filed on Form N-CSRS) are available on the Commission’s website at sec.gov. The Fund’s complete holdings are also available on pgim.com/investments. |
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 |
CUSIP | ||
PGIM CORE SHORT-TERM BOND FUND | 74440E102 | |
PGIM CORE ULTRA SHORT BOND FUND | 74440E201 | |
PGIM INSTITUTIONAL MONEY MARKET FUND | 74440E300 |
Item 2 – Code of Ethics – Not required, as this is not an annual filing.
Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.
Item 5 – Audit Committee of Listed Registrants – Not applicable.
Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
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 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 – Controls and Procedures - Disclosure of Securities Lending Activities for Closed-End
Management Investment Companies – Not applicable.
Item 13 – Exhibits
(a) | (1) Code of Ethics – Not required, as this is not an annual filing. | |||
(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 2 | |
By: | /s/ Andrew R. French | |
Andrew R. French | ||
Secretary | ||
Date: | September 18, 2020 |
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: | September 18, 2020 | |
By: | /s/ Christian J. Kelly | |
Christian J. Kelly | ||
Treasurer and Principal Financial and Accounting Officer | ||
Date: | September 18, 2020 |