Prudential Variable Contract Account 11 N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number:	811-03422
Exact name of registrant as specified in charter:	The Prudential Variable Contract Account-11
Address of principal executive offices:	Gateway Center 3, 100 Mulberry Street, Newark, New Jersey 07102
Name and address of agent for service:	Deborah A. Docs Gateway Center 3, 100 Mulberry Street, Newark, New Jersey 07102
Registrant’s telephone number, including area code:	973-367-7521
Date of fiscal year end:	12/31/2009
Date of reporting period:	12/31/2009

Item 1 – Reports to Stockholders

Prudential

MEDLEY Program

Annual report to participants

December 31, 2009

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus for The MEDLEY Program. Investors should consider the contract and the underlying portfolios’ investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectuses that can be obtained from your financial professional. You should read the prospectuses carefully before investing.

The report is for the information of persons participating in The Prudential Variable Contract Account-10 (VCA-10), The Prudential Variable Contract Account-11 (VCA-11), and The Prudential Variable Contract Account-24 (VCA-24) (Collectively known as the “Accounts”) of The MEDLEY Program. VCA-10, VCA-11, and VCA-24 are group annuity insurance products issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102-3777, and is distributed by Prudential Investment Management Services LLC (PIMS), member SIPC, Three Gateway Center, 14th Floor, Newark, NJ 07102-4077. Both are Prudential Financial companies.

All are Prudential Financial companies and each is solely responsible for its financial condition and contractual obligations.

Pru, Prudential, Prudential Financial, Rock Solid, “The Rock”, the Rock Logo and the Rock Prudential Logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

This report includes the financial statements of VCA-10, VCA-11, and the portfolios of The Prudential Series Fund (the “Funds”) available through VCA-24.

This report does not include separate account financials for the VCA-24 Subaccounts. If you would like separate account financial statements as of December 31, 2008, please call the telephone number on the inside back cover of this report.

Annuity contracts contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your plan sponsor or licensed financial professional can provide you with costs and complete details. Contract guarantees are based on the claims-paying ability of the issuing company.

A description of the Account’s proxy voting policies and procedures is available without charge, upon request. MEDLEY participants should call 888-778-2888 to obtain a description of the Account’s proxy voting policies and procedures. The description is also available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. Information regarding how the Account’s voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the website of the Commission at www.sec.gov and on the Account’s website.

The Accounts Statement of Additional Information contains additional information about the Account’s Committee Members and is available without charge upon request by calling 800-458-6333.

Each Account files with the Commission a complete listing of portfolio holdings as of the end of the first and third quarters on Form N-Q. Form N-Q is available on the Commission’s website at www.sec.gov or by visiting the Commission’s Public Reference Room. For more information on the Commission’s Public Reference Room, please visit the Commission’s website or call 1-800-732-0330. MEDLEY participants may obtain copies of Form N-Q filings by calling 800-458-6333.

The Prudential MEDLEY Program Table of Contents Annual Report December 31, 2009

n LETTER TO PARTICIPANTS

n VCA-10 CAPITAL GROWTH ACCOUNT

Financial Statements

n VCA-11 MONEY MARKET ACCOUNT

Financial Statements

n VCA-24 THE PRUDENTIAL SERIES FUND PORTFOLIOS

Conservative Balanced Portfolio

Diversified Bond Portfolio

Equity Portfolio

Flexible Managed Portfolio

Global Portfolio

Government Income Portfolio

Stock Index Portfolio

The Prudential MEDLEY Program Letter to Participants December 31, 2009

n DEAR PARTICIPANT:

Our primary focus at Prudential is to help investors achieve and maintain long-term financial success. MEDLEY Program annual report outlines our efforts to reach this goal. We hope you find it informative and useful.

Prudential has been building on a heritage of success for more than 130 years, and the quality of our businesses and risk diversification has enabled us to manage effectively through volatile markets. We believe the array of our products provides a highly attractive value proposition to clients like you who are focused on financial security.

Your financial professional is your best resource to make the most informed investment decisions to help meet your needs. Together, you can build a diversified investment portfolio that aligns with your long-term financial goals. Diversification does not assure a profit or protect against loss in declining markets.

Thank you for selecting Prudential as one of your financial partners. We value your trust and appreciate the opportunity to help you achieve financial security.

Sincerely,

Stephen Pelletier President, The Prudential Series Fund	Judy A. Rice, President, Variable Contract Accounts 10 & 11

January 29, 2010

Prudential Variable Contract Account-10 (VCA-10) & Variable Contract Account-24 (VCA-24) Presentation of Portfolio Holdings — unaudited December 31, 2009

Conservative Balanced
Five Largest Holdings     (% of Net Assets)
Exxon Mobil Corp.	1.6%
Federal National Mortgage Association, 6.000%, TBA 30 YR	1.5%
U.S. Treasury Notes, 2.625%, 12/31/14	1.5%
Microsoft Corp.	1.2%
Apple, Inc.	0.9%

Diversified Bond
Allocation     (% of Net Assets)
Corporate Bonds	47.2%
Commercial Mortgage-Backed Securities	15.6%
U.S. Government Mortgage-Backed Securities	12.7%
Asset-Backed Securities	5.2%
Residential Mortgage-Backed Securities	3.7%

Equity
Five Largest Holdings     (% of Net Assets)
Occidental Petroleum Corp.	2.9%
Google, Inc. (Class A Stock)	2.9%
Goldman Sachs Group, Inc. (The)	2.7%
Apple, Inc.	2.7%
Amazon.com, Inc.	2.4%

Flexible Managed
Five Largest Holdings     (% of Net Assets)
Exxon Mobil Corp.	2.1%
Apple, Inc.	1.4%
Microsoft Corp.	1.3%
Procter & Gamble Co. (The)	1.3%
JPMorgan Chase & Co.	1.3%

Global
Top Five Countries     (% of Net Assets)
United States	41.5%
United Kingdom	9.5%
Japan	8.1%
France	5.1%
Switzerland	4.5%

Government Income
Allocation     (% of Net Assets)
Mortgage-Backed Securities	42.5%
U.S. Treasury Securities	28.7%
U.S. Government Agency Obligations	8.8%
Commercial Mortgage-Backed Securities	8.5%
Collateralized Mortgage Obligations	3.7%

Stock Index
Five Largest Holdings     (% of Net Assets)
Exxon Mobil Corp.	3.2%
Microsoft Corp.	2.3%
Apple, Inc.	1.9%
Johnson & Johnson	1.8%
Procter & Gamble Co. (The)	1.8%

VCA-10
Five Largest Holdings    (% of Net Assets)
Occidental Petroleum Corp.	2.6%
Advanced Micro Devices, Inc.	2.4%
H & R Block, Inc.	2.3%
Google, Inc. Cl. A	2.3%
NII Holdings, Inc.	2.2%

For a complete listing of holdings, refer to the Schedule of Investments section of this report. Holdings reflect only long-term investments. Holdings/Issues/Industries/Sectors are subject to change.

The Prudential MEDLEY Program — VCA-10 Capital Growth Account Subadvised by: Jennison Associates LLC December 31, 2009

Investment Managers’ Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Capital Growth Acct. (VCA-10)1	47.75	%	3.80	%	2.88	%
S&P 500 Index2	26.47		0.42		-0.95

Capital Growth Account inception: 5/13/1983.

Past performance does not guarantee future returns. Portfolio performance is net of investment fees and fund expenses. 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.

$10,000 INVESTED OVER 10 YEARS

For the year ended December 31, 2009, the VCA-10 Capital Growth Account rose 47.75%.

Every sector in the benchmark, the S&P 500 Index (the Index), had positive returns for the year ended December 31, 2009. Likewise, every sector in the VCA-10 Account (the Portfolio) advanced. Stock selection across the board, with the one exception of industrials, benefited the Portfolio’s relative return. The Portfolio significantly outperformed the Index.

Energy positions made the most meaningful positive impact on relative performance. Jennison prefers energy companies that are best positioned to gain from rising oil and gas prices. Jennison remains bullish on the long-term supply/demand imbalances for copper and gold, which should result in higher prices for these commodities and ultimately the Portfolio’s copper and gold mining stocks. Industrialization of the developing world and difficulty in increasing supply will most likely create upward pressure on prices. Growth in global money supply should also push up gold prices. Security selection and an underweight stance in financials made a sizable contribution to relative performance.

From the depths of their March lows, equity markets have posted impressive rebounds, with most indexes gaining 50% or more through year-end. Corporate profits, which have been much better than were thought possible at the beginning of 2009, largely due to workforce and inventory reductions, have provided much of the fuel for this recovery in equities. Favorable interest rate and liquidity conditions have been instrumental in spurring the rally, as well. With these tailwinds in place, there is reason to be optimistic that further gains lie ahead in 2010. Yet significant challenges remain, including high unemployment, still-weak housing markets, and probable increases in tax rates. Against this backdrop, Jennison remains cautiously optimistic.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Account.

^1. The Account performance results are after the deduction of all expenses and contract charges, including investment management and administrative fees but not including the effect of any sales charges. All total returns are for the periods indicated and are calculated based on changes in unit values.

^2. The S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. Investors cannot invest directly in an index.

For a complete list of holdings please see the Statement of Net Assets sections of this report.

FINANCIAL STATEMENTS OF VCA-10

STATEMENT OF NET ASSETS

December 31, 2009

LONG-TERM INVESTMENTS — 98.7%
COMMON STOCKS — 97.3%	Shares	Value (Note 2)
Aerospace & Defense — 1.1%
Precision Castparts Corp.	17,800	$	1,964,230
Auto Components — 2.0%
Goodyear Tire & Rubber Co. (The)(a)	172,100		2,426,610
Lear Corp.(a)	18,200		1,231,048
			3,657,658
Biotechnology — 2.3%
Celgene Corp.(a)	43,400		2,416,512
Gilead Sciences, Inc.(a)	41,100		1,778,808
			4,195,320
Capital Markets — 5.1%
Bank of New York Mellon Corp. (The)	54,200		1,515,974
Goldman, Sachs Group, Inc. (The)	17,400		2,937,816
Morgan Stanley	89,100		2,637,360
TD Ameritrade Holding Corp.(a)	114,700		2,222,886
			9,314,036
Chemicals — 1.4%
Dow Chemical Co. (The)	94,600		2,613,798
Commercial Banks — 0.8%
Keycorp	247,800		1,375,290
Commercial Services & Supplies — 1.7%
Waste Management, Inc.	92,900		3,140,949
Communications Equipment — 1.6%
QUALCOMM, Inc.	62,300		2,881,998
Computers & Peripherals — 1.1%
Apple, Inc.(a)	9,900		2,087,514
Consumer Finance — 1.7%
SLM Corp.(a)	277,600		3,128,552
Diversified Consumer Services — 3.7%
Career Education Corp.(a)	110,500		2,575,755
H & R Block, Inc.	187,400		4,238,988
			6,814,743
Diversified Financial Services — 1.0%
JPMorgan Chase & Co.	42,800		1,783,476
Electric Utilities — 1.2%
Entergy Corp.	27,500		2,250,600
Electronic Equipment & Instruments — 1.2%
Flextronics International, Ltd.(a)	287,900		2,104,549
Energy Equipment & Services — 1.1%
National Oilwell Varco, Inc.	44,500		1,962,005
Food & Staples Retailing — 3.9%
CVS Caremark Corp.	60,300		1,942,263
Kroger Co. (The)	137,100		2,814,663
Wal-Mart Stores, Inc.	42,500		2,271,625
			7,028,551

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Food Products — 4.4%
Bunge, Ltd.	39,400	$	2,514,902
ConAgra Foods, Inc.	130,800		3,014,940
Tyson Foods, Inc. Cl. A	207,100		2,541,117
			8,070,959
Health Care Equipment & Supplies — 1.5%
Alcon, Inc.	16,800		2,761,080
Health Care Providers & Services — 6.0%
Aetna, Inc.	37,200		1,179,240
Medco Health Solutions, Inc.(a)	48,600		3,106,026
Omnicare, Inc.	150,600		3,643,014
Wellpoint, Inc.(a)	52,300		3,048,567
			10,976,847
Hotels, Restaurants & Leisure — 1.0%
Yum Brands, Inc,	51,000		1,783,470
Independent Power Producers & Energy Traders — 1.4%
NRG Energy, Inc.(a)	104,100		2,457,801
Insurance — 2.2%
Arch Capital Group, Ltd.(a)	3,900		279,045
Axis Capital Holdings, Ltd.	65,900		1,872,219
Travelers Cos., Inc. (The)	35,400		1,765,044
			3,916,308
Internet Software & Services — 4.3%
Google, Inc. Cl. A(a)	6,800		4,215,864
IAC/InterActiveCorp.(a)	175,850		3,601,408
			7,817,272
Media — 3.2%
Comcast Corp.	177,800		2,997,708
Liberty Global, Inc. Ser. C (a)	125,405		2,740,099
			5,737,807
Metals & Mining — 3.1%
Freeport-McMoRan Copper & Gold, Inc.(a)	37,200		2,986,788
Kinross Gold Corp.	145,600		2,679,040
			5,665,828
Multi-Utilities — 1.9%
Sempra Energy	62,800		3,515,544
Oil, Gas & Consumable Fuels — 17.8%
Anadarko Petroleum Corp.	41,200		2,571,704
Apache Corp.	33,400		3,445,878
Canadian Natural Resources, Ltd.	40,800		2,935,560
EOG Resources, Inc.	33,200		3,230,360
Hess Corp.	19,000		1,149,500
Noble Energy, Inc.	29,000		2,065,380
Occidental Petroleum Corp.	58,700		4,775,245
Petroleo Brasileiro SA ADR (Brazil)	78,100		3,723,808
Suncor Energy, Inc.	94,200		3,326,202
Williams Cos, Inc.	164,200		3,461,336
XTO Energy, Inc.	39,100		1,819,323
			32,504,296

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10

STATEMENT OF NET ASSETS

December 31, 2009

COMMON STOCKS
(continued)	Shares	Value (Note 2)
Pharmaceuticals — 6.5%
Mylan, Inc.(a)	103,300	$	1,903,819
Novartis AG ADR (Switzerland)	46,900		2,552,767
Pfizer, Inc.	119,200		2,168,248
Sanofi-Aventis SA ADR (France)	69,200		2,717,484
Shire PLC ADR (Ireland)	41,800		2,453,660
			11,795,978
Road & Rail — 1.5%
Union Pacific Corp.	43,600		2,786,040
Semiconductors & Semiconductor Equipment — 2.4%
Advanced Micro Devices, Inc.(a)	446,800		4,325,024
Software — 6.3%
Adobe Systems, Inc.(a)	71,600		2,633,448
CA, Inc.	159,073		3,572,780
Nuance Communications, Inc.(a)	118,000		1,833,720
Symantec Corp.(a)	193,500		3,461,715
			11,501,663
Thrifts & Mortgage Finance — 0.7%
People's United Financial, Inc.	73,130		1,221,271
Wireless Telecommunication Services — 2.2%
NII Holdings, Inc.(a)	117,299		3,938,900
TOTAL COMMON STOCKS (Cost: $141,600,057)			177,079,357
PREFERRED STOCK — 1.4%
Diversified Financial Services
Bank of America Corp. (cost $2,535,759)	168,700		2,517,004
CORPORATE BOND — 0.7%
	Principal Amount (000)
Oil, Gas & Consumable Fuels
Trident Resources., Unsec'd Note, (Canada), Private Placement, due 8/12/12(a)(b)(c)(f) (Cost: $3,588,714; purchased 8/20/07)	CAD  3,589		—

WARRANT
	Units	Value (Note 2)
Oil, Gas & Consumable Fuels
Trident Resources Corp. (Canada), Expiring 1/01/15(a)(b)(c)(f) (Cost: $0; purchased 8/20/07)	309,661	$	—
TOTAL LONG-TERM INVESTMENTS (Cost: $147,724,530)		$	179,596,361
SHORT-TERM INVESTMENTS — 1.2%
	Shares
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund- Taxable Money Market Series(e) (Cost: $2,335,845)	2,335,845		2,335,845
TOTAL INVESTMENTS(d) — 99.9% (Cost: $150,060,375)		$	181,932,206
OTHER ASSETS, LESS LIABILITIES
Receivable for Securities Sold		$	1,728,353
Dividends Receivable			174,379
Payable for Pending Capital Transactions			(218,896	)
Payable for Securities Purchased			(1,596,670	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.1%			87,166
NET ASSETS — 100%		$	182,019,372
NET ASSETS, representing:
Equity of Participants — 20,072,004 Accumulation Units at an Accumulation Unit Value of $9.0708		$	182,069,260
Equity of The Prudential Insurance Company of America			(49,888	)
		$	182,019,372

(a) Non-income producing security.

(b) Indicates an illiquid security.

(c) Indicates a security restricted to resale. The aggregate cost of such securities is $3,588,714. The aggregate value of $0 is approximately 0% of net assets.

(d) As of December 31, 2009, two securities valued at $0 and representing 0% of the total market value of the portfolio were fair valued in accordance with the policies adopted by the Committee Members.

(e) The Prudential Investments LLC, the Manager of the Account, also serves as Manager of the Dryden Core Investment Fund—Taxable Money Market Series.

(f) The issuer has filed for bankruptcy and has defaulted in the payment of interest on the debt Security. The Security has been fair valued at zero.

ADR	American Depository Receipt
CAD	Canadian Dollar

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10

STATEMENT OF NET ASSETS

December 31, 2009

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Account's assets carried at fair value:

Investments in Securities	Level 1		Level 2		Level 3
Common Stocks	$	177,079,357	$	—	$	—
Corporate Bond		—		—		—
Preferred Stocks		2,517,004		—		—
Warrants		—		—		—
Affiliated Mutual Funds		2,335,845		—		—
		181,932,206		—		—
Other Financial Instruments*		—		—		—
Total	$	181,932,206	$	—	$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Corporate Bond
Balance as of 12/31/08	$	993,565
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)		(1,140,133	)
Earned amortization/accretion		—
Net purchases (sales)		146,568
Transfers in and/or out of Level 3		—
Balance as of 12/31/09	$	—

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10

STATEMENT OF NET ASSETS

December 31, 2009

The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of December 31, 2009 were as follows:

Oil, Gas & Consumable Fuels	17.8	%
Pharmaceuticals	6.5
Software	6.3
Health Care Providers & Services	6.0
Capital Markets	5.1
Food Products	4.4
Internet Software & Services	4.3
Food & Staples Retailing	3.9
Diversified Consumer Services	3.7
Media	3.2
Metals & Mining	3.1
Diversified Financial Services	2.4
Semiconductors & Semiconductor Equipment	2.4
Biotechnology	2.3
Insurance	2.2
Wireless Telecommunication Services	2.2
Auto Components	2.0
Multi-Utilities	1.9
Commercial Services & Supplies	1.7
Consumer Finance	1.7
Communications Equipment	1.6
Road & Rail	1.5
Health Care Equipment & Supplies	1.5
Chemicals	1.4
Independent Power Producers & Energy Traders	1.4
Affiliated Money Market Mutual Fund	1.2
Electric Utilities	1.2
Electronic Equipment & Instruments	1.2
Aerospace & Defense	1.1
Computers and Peripherals	1.1
Energy Equipment & Services	1.1
Hotels, Restaurants & Leisure	1.0
Commercial Banks	0.8
Thrifts & Mortgage Finance	0.7
	99.9
Other Assets in Excess of Liabilities	0.1
	100.0	%

The Account invested in derivative instruments during the reporting period. The primary types of risk associated with derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Account’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 December 31, 2009 as presented in the Statement of Assets and Liabilities: (Unaudited)

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Equity contracts	Unaffiliated investments	$	—	*	—	$	—

* Includes one security with a fair value of $0.

For the year ended December 31, 2009, the Account did not have any realized gain or (loss) on derivatives recognized in income.

For the year ended December 31, 2009, the Account did not have any unrealized appreciation or (depreciation) on derivatives recognized in income.

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated Dividend Income (net of $20,294 foreign withholding tax)	$	2,359,024
Affiliated Dividend Income		11,625
Unaffiliated Interest Income		144,592
Total Income		2,515,241
EXPENSES
Fees Charged to Participants for Investment Management Services		(387,308	)
Fees Charged to Participants for Administrative Expenses		(1,150,503	)
Total Expenses .		(1,537,811	)
NET INVESTMENT INCOME		977,430
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net Realized Loss on Investment Transactions		(17,836,135	)
Net Change in Unrealized Appreciation (Depreciation) on Investments		77,235,232
NET GAIN ON INVESTMENTS		59,399,097
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	60,376,527

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
OPERATIONS
Net Investment Income	$	977,430		$	1,695,945
Net Realized Loss on Investment Transactions		(17,836,135	)		(34,268,066	)
Net Change In Unrealized Appreciation (Depreciation) on Investments		77,235,232			(78,535,921	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		60,376,527			(111,108,042	)
CAPITAL TRANSACTIONS
Purchase Payments and Transfers In		5,901,161			8,918,960
Withdrawals and Transfers Out		(16,978,866	)		(37,777,985	)
Annual Account Charges Deducted from Participants’ Accounts		(28,544	)		(32,968	)
NET DECREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS		(11,106,249	)		(28,891,993	)
NET DECREASE IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS		(111,802	)		(145,649	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		49,158,476			(140,145,684	)
NET ASSETS
Beginning of year		132,860,896			273,006,580
End of year	$	182,019,372		$	132,860,896

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL HIGHLIGHTS FOR VCA-10

INCOME AND CAPITAL CHANGES PER ACCUMULATION UNIT*

(For an Accumulation Unit outstanding throughout the year)

	Year Ended December 31,
	2009			2008			2007			2006			2005
Investment Income	$	.1215		$	.1628		$	.1753		$	.1539		$	.1061
Expenses
Investment management fee		(.0186	)		(.0226	)		(.0274	)		(.0237	)		(.0193	)
Administrative expenses		(.0557	)		(.0677	)		(.0821	)		(.0710	)		(.0600	)
Net Investment Income		.0472			.0725			.0658			.0592			.0268
Capital Changes
Net realized gain (loss) on investment transactions		(.8411	)		(1.5104	)		1.8696			1.6855			.8647
Net change in unrealized appreciation (depreciation) on investments		3.7265			(3.3558	)		(1.3347	)		(.4319	)		.6037
Net Increase (Decrease) in Accumulation Unit Value		2.9326			(4.7937	)		.6007			1.3128			1.4952
Accumulation Unit Value
Beginning of year		6.1382			10.9319			10.3312			9.0184			7.5232
End of year	$	9.0708		$	6.1382		$	10.9319		$	10.3312		$	9.0184
Total Return**		47.78	%		(43.85	)%		5.81	%		14.56	%		19.87	%
Ratio of Expenses To Average Net Assets***		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%
Ratio of Net Investment Income To Average Net Assets***		1.00	%		1.01	%		.60	%		.62	%		.32	%
Portfolio Turnover Rate		62	%		81	%		65	%		60	%		51	%
Number of Accumulation Units Outstanding For Participants at end of year (000’s omitted)		20,072			21,633			24,945			27,921			33,107

* Calculated by accumulating the actual per unit amounts daily.

** Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported. Total returns may reflect adjustments to conform to generally accepted accounting principles.

*** These calculations exclude PICA’s equity in VCA-10.

The above table does not reflect the annual administration charge, which does not affect the Accumulation Unit Value. This charge is made by reducing Participants’ Accumulation Accounts by a number of Accumulation Units equal in value to the charge.

SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO THE FINANCIAL STATEMENTS OF

VCA-10

Note 1: General

The Prudential Variable Contract Account-10 (“VCA-10” or the “Account”) was established on March 1, 1982 by The Prudential Insurance Company of America (“PICA”) under the laws of the State of New Jersey and is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended. VCA-10 has been designed for use by employers (“Contract-holders”) in making retirement arrangements on behalf of their employees (“Participants”). The investment objective of the Account is long-term growth of capital. The Account’s investments are composed primarily of common stocks. Although variable annuity payments differ according to the investment performance of the Account, they are not affected by mortality or expense experience because PICA assumes the expense risk and the mortality risk under the contracts.

Note 2: Summary of Significant Accounting Policies

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and ask prices, or at the last bid price on such day in the absence of an asked price. Securities traded via Nasdaq are valued at the official closing price provided by Nasdaq. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”), in consultation with the subadviser(s), to be over-the-counter, are valued by an independent pricing agent or principal market maker. Securities for which market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Account’s normal pricing time, are valued at fair value in accordance with the Accounts’ Committee Members approved fair valuation procedures. When determining the fair valuation 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 issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term investments which mature in more than 60 days are valued based on current market quotations. Short-term investments having maturities of 60 days or less and of sufficient credit quality are valued at amortized cost which approximates fair value. Amortized cost is computed using the cost on the date of purchase, adjusted for constant accretion of discount or amortization of premium to maturity.

Warrants and Rights:    The Account may hold warrants and rights acquired either through a direct purchase, including as part of private placement, or pursuant to corporate actions. Warrants and rights entitle the holder to buy a proportionate amount of common stock at a specific price and time through the expiration dates. Such warrants and rights are held as long positions by the Account until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Committee Members’ approved fair valuation procedures.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized and unrealized gains or losses on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Net investment income and realized and unrealized gain or losses (other than administrative fees) are allocated to the Participants and PICA on a daily basis in proportion to their respective ownership in VCA-10.

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

Federal Income Taxes:    The operations of VCA-10 are part of, and are taxed with, the operations of PICA. Under the current provisions of the Internal Revenue Code, PICA does not expect to incur federal income taxes on earnings of VCA-10 to the extent the earnings are credited under the Contracts. As a result, the Unit Value of VCA-10 has not been reduced by federal income taxes.

Note 3: Investment Management Agreement and Charges

The Account has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. PI has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Account. PI pays for the services of Jennison.

A daily charge, at an effective annual rate of up to 1.00% of the current value of the Participant’s equity in VCA-10, is charged to the Account. Up to three quarters of the charge (0.75%) paid to PICA, is for administrative expenses not provided by the annual account charge, and one quarter (0.25%), paid to PI, is for investment management services. PICA may impose a reduced Administrative Fee where warranted by economies of scale and the expense characteristics of the employer, association or trust to which Prudential has issued a Contract.

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

An annual account charge of not more than $30 is deducted from the account of each Participant, if applicable, at the time of withdrawal of the value of all of the Participant’s accounts or at the end of the fiscal year by canceling Units.

A deferred sales charge is imposed upon that portion of certain withdrawals which represents a return of contributions. The charge is designed to compensate PICA for sales and other marketing expenses. The maximum deferred sales charge is 7% on contributions withdrawn from an account during the first year of participation. After the first year of participation, the maximum deferred sales charge declines by 1% in each subsequent year until it reaches 0% after seven years. No deferred sales charge is imposed upon contributions withdrawn for any reason after seven years. Effective October 1, 2009, there is no longer a deferred sales charge on this Account. For the years ended December 31, 2009 and December 31, 2008, PICA has advised the Account that it has received deferred sales charges of $552 and $2,060 respectively, imposed upon certain withdrawals from the Account.

Note 4: Purchases and Sales of Portfolio Securities

For the year ended December 31, 2009, the aggregate cost of purchases and the proceeds from sales of securities, excluding short-term investments, were $93,556,918 and $128,230,455, respectively.

Investment in the Core Fund:    The Account invests in the Taxable Money Market Series (the “Series”), a portfolio of Dryden Core Investment Fund. The Series is a money market mutual fund registered under the Investment Company Act of 1940, as amended, and managed by PI. During the year ended December 31, 2009, the Account earned $11,625, by investing its excess cash in the Series.

Note 5: Unit Transactions

The number of Accumulation Units issued and redeemed for the years ended December 31, 2009 and December 31, 2008, respectively, are as follows:

	Year Ended December 31,
	2009		2008
Units issued	785,793		979,281
Units redeemed	(2,346,692	)	(4,291,698	)
Net decrease	(1,560,899	)	(3,312,417	)

Note 6: Net Increase (Decrease) In Net Assets Resulting from Surplus Transfers

The increase (decrease) in net assets resulting from surplus transfers represents the net increase to/(reductions from) PICA’s investment in the Account. This increase (decrease) includes reserve adjustments for mortality and expense risks assumed by PICA.

Note 7: Participant Loans

Loans are considered to be withdrawals from the Account from which the loan amount was deducted, though they are not considered a withdrawal from the MEDLEY Program. Therefore, no deferred sales charge is imposed upon them. The principal portion of any loan repayment, however, will be treated as a contribution to the receiving Account for purposes of calculating any deferred sales charge imposed upon any subsequent withdrawal. If the Participant defaults on the loan, for example by failing to make required payments, the outstanding balance of the loan will be treated as a withdrawal for purposes of the deferred sales charge. The deferred sales charge will be withdrawn from the same Accumulation Accounts, and in the same proportions, as the loan amount was withdrawn. If sufficient funds do not remain in those Accumulation Accounts, the deferred sales charge will be withdrawn from the Participant’s other Accumulation Accounts as well.

Withdrawals, transfers and loans from VCA-10 are considered to be withdrawals of contributions until all of the Participant’s contributions to the Account have been withdrawn, transferred or borrowed. No deferred sales charge is imposed upon withdrawals of any amount in excess of contributions.

For the year ended December 31, 2009, $231,953 in participant loans were withdrawn from VCA-10 and $218,403 of principal and interest was repaid to VCA-10. For the year ended December 31, 2008, $215,460 in participant loans were withdrawn from VCA-10 and $260,400 of principal and interest was repaid to VCA-10. Loan repayments are invested in Participant’s account(s) as chosen by the Participant, which may not necessarily be VCA-10. The initial loan proceeds which are being repaid may not necessarily have originated solely from VCA-10. During the year ended December 31, 2009, PICA has advised the Account that it received $2,578 in loan origination fees. The participant loan principal and interest repayments are included in purchase payments and transfers in within the Statement of Changes in Net Assets.

Note 8: New Accounting Pronouncement

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”. ASU 2010-06 will require reporting entities to make new disclosures about amount and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements, which are effective for interim and annual reporting periods beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.

Note 9: Subsequent Events

Management has evaluated the impact of all subsequent events on the Fund through February 25, 2010, the date the financial statements were issued, and has been determined that, except for the following, there were no subsequent events requiring recognition or disclosure in the financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE COMMITTEE AND PARTICIPANTS OF THE PRUDENTIAL VARIABLE CONTRACT ACCOUNT-10:

We have audited the accompanying statement of net assets of The Prudential Variable Contract Account-10 (the “Account”) as of December 31, 2009, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Account as of December 31, 2009, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 25, 2010

The Prudential MEDLEY Program — VCA-11 Money Market Account Subadvised by: Prudential Investment Management December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	7-Day Current Net Yield		1-Year		5-Year		10-Year
VCA-11 Money Market Acct.1	-0.64	%	-0.29	%	2.52	%	2.33	%
Citigroup 3-Month Treasury Bill Index2	N/A		0.16		2.88		2.84

Portfolio inception: 5/13/1983.

Past performance does not guarantee future returns. Portfolio performance is net of investment fees and fund expenses. 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.

MONEY MARKET ACCOUNT

ONE-YEAR TOTAL RETURN FOR THE

PAST 10 YEARS

The yield quotation more closely reflects the current earnings of the Portfolio than the total return quotation.

For the year ended December 31, 2009, VCA-11 Money Market Account (the Account) declined 0.29%.

The U.S. government and the Federal Reserve took steps to steady the nation’s financial system and stimulate the economy. Both had been hurt by a protracted credit crisis. Improvement in the financial system began slowly, then accelerated as liquidity returned to the markets, boosting investor confidence. Meanwhile, key initiatives aimed at stimulating consumer spending aided the economic recovery.

Money market yields declined to historically low levels in 2009 as the Federal Open Market Committee kept its target for the overnight bank lending rate at a record low range of zero to 0.25%, and reiterated its desire for short-term rates to remain low for an extended period of time to boost economic growth. The decline in money market yields was further exacerbated by an enormous amount of cash that needed to be invested at a time when issuers were decreasing their reliance on short-term financing and issuing fewer eligible money market securities.

The Account underperformed the Citigroup Three-Month Treasury Bill Index in 2009. The unit value of the Account declined reflecting primarily the impact of fees, which are deducted directly from the assets of the Account. The 7-day current net yield more closely reflects the current earnings of the Account than the total return. On December 29, 2009, the Account’s 7-day current net yield was -0.64%, down from 0.42% on December 30, 2008.

Due to the uncertainty in the credit markets, the Account continued to employ a conservative strategy. It invested primarily in money market securities of highly rated corporate issuers, highly rated banks, and government agencies. Additionally, the Account also invested in overnight repurchase agreements, contracts in which a seller of securities agrees to buy them back the next day at a specified price. This prudent approach resulted in a high level of liquidity in the Account.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Account.

^1. The Account performance results are after the deduction of all expenses and contract charges, including investment management and administrative fees but not including the effect of any sales charges. All total returns are for the periods indicated and are calculated based on changes in unit values.

^2. The Citigroup 3-Month Treasury Bill Index is an index whereby equal dollar amounts of three-month Treasury bills are purchased at the beginning of each of three consecutive months. As each bill matures, all proceeds are rolled over and reinvested in a new three-month bill. The income used to calculate the monthly return is derived by subtracting the original amount invested from the maturity value.

For current yields on the Money Market Account, please call (800) 458-6333. An investment in the Account is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. It is possible to lose money by investing in the Account.

For a complete list of holdings, refer to the Statement of Net Assets section of this report.

FINANCIAL STATEMENTS OF VCA-11

STATEMENT OF NET ASSETS

December 31, 2009

SHORT TERM INVESTMENTS — 100.0%	Principal Amount (000)		Value (Note 2)
Certificates of Deposit — 31.3%
Bank of America, NA 0.35%, 1/28/2010	$	2,000	$	2,000,000
Bank of Tokyo-Mitsubishi UFJ, Ltd. 0.24%, 2/17/2010		2,000		2,000,000
BNP Paribas 0.24%, 1/15/2010		1,000		1,000,000
0.71%, 3/18/2010		1,000		1,000,000
Chase Bank USA, NA 0.19%, 2/10/2010		2,000		2,000,000
Royal Bank of Scotland 0.833%, 1/19/2010(b)		1,500		1,500,000
State Street Bank & Trust Co. 0.21%, 2/12/2010		2,000		2,000,000
Sumitomo Mitsui Banking Corp./New York 0.21%, 1/15/2010		2,000		2,000,000
UBS AG 0.66%, 1/29/2010		2,000		2,000,000
				15,500,000
Commercial Paper — 43.2%
Banco Bilbao Vizcaya Argentaria SA, 144A(a) 0.35%, 5/20/2010		1,000		998,648
BPCE SA, 144A(a) 0.27%, 2/16/2010		2,000		1,999,310
DNB Norbank ASA, 144A(a) 0.33%, 3/10/2010		2,172		2,170,646
E.ON AG, 144A(a) 0.25%, 1/12/2010		1,000		999,924
0.27%, 1/19/2010		1,000		999,865
GDF Suez, 144A(a) 0.20%, 1/13/2010		1,000		999,937
Prudential PLC, 144A(a) 0.25%, 2/1/2010		1,000		999,785
RaboBank USA Financial Corp.(a) 0.31%, 2/18/2010		2,500		2,498,967
Societe Generale North America, Inc.(a) 0.24%, 2/5/2010		1,250		1,249,708
0.25%, 4/1/2010		1,000		999,375
Straight-A Funding LLC, 144A(a) 0.20%, 2/1/2010		1,000		999,828
0.20%, 2/8/2010		1,000		999,789
SwedBank AB, 144A(a) (Guaranteed by the Kingdom of Sweden) 0.85%, 2/11/2010		1,500		1,498,548
0.82%, 2/17/2010		1,000		998,929
Total Capital Canada, Ltd., 144A(a) 0.00%, 1/14/2010		1,000		999,928
Unicredit Delaware, Inc., 144A(a) 0.32%, 1/14/2010		1,000		999,884
US Bancorp(a) 0.17%, 3/22/2010		1,000		999,622
				21,412,693

SHORT TERM INVESTMENTS (continued)	Principal Amount (000)	Value (Note 2)
Other Corporate Obligations — 14.1%
Bank of America NA Gtd.(b)(c) 0.331%, 1/29/2010	1,000		1,000,000
Barclays Bank PLC NY 0.482%, 1/19/2010(b)	1,000		1,000,000
Citigroup Funding Inc.,MTN(b)(c) 0.381%, 1/29/2010	1,000		1,000,000
Goldman Sachs Group, MTN 0.40%, 2/3/2010	1,000		1,000,000
Morgan Stanley, MTN 0.374%, 1/15/2010(b)	1,129		1,128,989
4.00%, 1/15/2010	1,000		1,001,360
National Australia Bank, Ltd., MTN, 144A(b) 0.725%, 2/8/2010	300		300,000
Westpac Banking Corp., MTN, 144A(b) 0.532%, 1/25/2010	565		565,000
			6,995,349
US Government Agencies — 10.1%
Fannie Mae 0.174%, 1/13/2010(b)	2,000		1,999,287
Federal Home Loan Bank 0.183%, 1/19/2010(b)	1,000		999,901
Freddie Mac 0.242%, 2/24/2010(b)	1,000		999,875
0.219%, 3/24/2010(b)	1,000		999,855
			4,998,918
Repurchase Agreement(d) — 1.3%
Bank of America Securities, LLC 0.03%, dated 12/31/2009, due 1/4/2010 in the amount of $643,002 (cost $643,000; the value of the collateral including accrued interest was $655,861)	643		643,000
TOTAL INVESTMENTS — 100.0% (Cost: $49,549,960)		$	49,549,960
OTHER ASSETS, LESS LIABILITIES
Interest Receivable		$	36,892
Cash			17
Payable for Pending Capital Transactions			(26,985	)
OTHER LIABILITIES IN EXCESS OF ASSETS			9,924
NET ASSETS — 100%		$	49,559,884
NET ASSETS, representing:
Equity of Participants — 14,777,411 Accumulation Units at an Accumulation Value of 3.3520		$	49,534,614
Equity of The Prudential Insurance Company of America			25,270
		$	49,559,884

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-11

STATEMENT OF NET ASSETS

December 31, 2009

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

(a) Percentage quoted represents yield-to-maturity as of the purchase date.

(b) Indicates a variable rate instrument. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect is as of December 31, 2009.

(c) FDIC-Guarantee issued under temporary liquidity guarantee program.

(d) Repurchase agreement is collateralized by federal agency obligations.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Account's own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Account’s assets carried at fair value:

Investments in Securities	Level 1		Level 2		Level 3
Certificates of Deposit	$	—	$	15,500,000	$	—
Commercial Paper		—		21,412,693		—
Other Corporate Obligations		—		6,995,349		—
Repurchase Agreements		—		643,000		—
US Government Agencies		—		4,998,918		—
		—		49,549,960		—
Other Financial Instruments*		—		—		—
Total	$	—	$	49,549,960	$	—

* Other financial instruments are derivative instruments not reflected in the Statement of Net Assets, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2008 and December 31, 2009, the Account did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage on net assets as of December 31, 2009 were as follows:

Commercial Paper	43.2	%
Certificates of Deposit	31.3
Other Corporate Obligations	14.1
US Government Agencies	10.1
Repurchase Agreement	1.3
	100.0
Other assets in excess of liabilities	0.0
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-11

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated Interest Income	$	379,366
Total		379,366
EXPENSES
Fees Charged to Participants for Investment Management Services		(131,382	)
Fees Charged to Participants for Administrative Expenses		(397,372	)
Total Expenses		(528,754	)
NET INVESTMENT LOSS		(149,388	)
Realized Gain on Investment Transactions		3,705
NET DECREASE IN NET ASSETS FROM OPERATIONS	$	(145,683	)

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
OPERATIONS
Net Investment Income (Loss)	$	(149,388	)	$	1,134,677
Net Realized Gain on Investment Transactions		3,705			4,786
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(145,683	)		1,139,463
CAPITAL TRANSACTIONS
Purchase Payments and Transfers In		7,058,635			12,925,119
Withdrawals and Transfers Out		(13,612,962	)		(12,465,465	)
Annual Account Charges Deducted from Participants’ Accounts		(24,191	)		(27,772	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS		(6,578,518	)		431,882
NET DECREASE IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS		(48,332	)		(648,067	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(6,772,533	)		923,278
NET ASSETS
Beginning of year		56,332,417			55,409,139
End of year	$	49,559,884		$	56,332,417

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL HIGHLIGHTS FOR VCA-11

INCOME PER ACCUMULATION UNIT*

(For an Accumulation Unit outstanding throughout the year)

	Year Ended December 31,
	2009			2008			2007			2006			2005
Investment Income	$	.0239		$	.1010		$	.1735		$	.1561		$	.0985
Expenses
Investment management fee		(.0084	)		(.0083	)		(.0080	)		(.0077	)		(.0071	)
Administrative expenses		(.0251	)		(.0250	)		(.0235	)		(.0228	)		(.0223	)
Net Increase (Decrease) in Accumulation Unit Value		(.0096	)		.0677			.1420			.1256			.0691
Accumulation Unit Value
Beginning of year		3.3616			3.2939			3.1519			3.0263			2.9572
End of year	$	3.3520		$	3.3616		$	3.2939		$	3.1519		$	3.0263
Total Return**		(.29	)%		2.06	%		4.51	%		4.15	%		2.33	%
Ratio Of Expenses To Average Net Assets***		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%
Ratio Of Net Investment Income (Loss) To Average Net Assets***		(.30	)%		2.00	%		4.39	%		4.06	%		2.30	%
Number of Accumulation Units Outstanding For Participants at end of year (000’s omitted)		14,777			16,736			16,560			18,183			20,822

* Calculated by accumulating the actual per unit amounts daily.

** Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported. Total returns may reflect adjustments to conform to generally accepted accounting principles.

*** These calculations exclude PICA’s equity in VCA-11.

The above table does not reflect the annual administration charge, which does not affect the Accumulation Unit Value. This charge is made by reducing Participants’ Accumulation Accounts by a number of Units equal in value to the charge.

SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO THE FINANCIAL STATEMENTS OF

VCA-11

Note 1: General

The Prudential Variable Contract Account-11 (VCA-11 or the Account) was established on March 1, 1982 by The Prudential Insurance Company of America (“PICA”) under the laws of the State of New Jersey and is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended. VCA-11 has been designed for use by employers (Contract-holders) in making retirement arrangements on behalf of their employees (Participants). The investment objective of the Account is to realize a high level of current income as is consistent with the preservation of capital and liquidity. Its investments are primarily composed of short-term securities. The ability of the issuers of the securities held by the Account to meet their obligations may be affected by economic developments in a specific state, industry or region. Although variable annuity payments differ according to the investment performance of the Account, they are not affected by mortality or expense experience because PICA assumes the expense risk and the mortality risk under the contracts.

Note 2: Summary of Significant Accounting Policies

Securities Valuation:    Portfolio securities of VCA-11 are valued at amortized cost, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. If the amortized cost method is determined not to represent fair value, the fair value shall be determined by or under the direction of the Accounts’ Committee Members.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains or losses from security transactions are calculated on the identified cost basis. Interest income is recorded on the accrual basis. Net investment income (other than administration fees) is allocated to the Participants and PICA on a daily basis in proportion to their respective ownership or investment in VCA-11.

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

Federal Income Taxes:    The operations of VCA-11 are part of, and are taxed with, the operations of PICA. Under the current provisions of the Internal Revenue Code, PICA does not expect to incur federal income taxes on earnings of VCA-11 to the extent the earnings are credited under the Contracts. As a result, the Unit Value of VCA-11 has not been reduced by federal income taxes.

Repurchase Agreements:    In connection with transactions in repurchase agreements with United States financial institutions, it is the Account’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 transaction, including accrued interest. To the extent that any repurchase agreement exceeds one business day, the value of collateral is marked-to-market on a daily basis to ensure 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 Account may be delayed or limited.

Note 3: Investment Management Agreement and Charges

The Account has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisers’ performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with management of the Account. PI pays for the services of PIM.

A daily charge, at an effective annual rate of up to 1.00% of the current value of the Participant’s equity in VCA-11, is charged to the Account. Up to three quarters of the charge (0.75%), paid to PICA, is for administrative expenses not provided by the annual account charge, and one quarter (0.25%), paid to PI, is for investment management services. PICA may impose a reduced Administrative Fee where warranted by

economies of scale and the expense characteristics of the employer, association or trust to which PICA has issued a contract.

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

An annual account charge of not more than $30 is deducted from the account of each Participant, if applicable, at the time of withdrawal of the value of all of the Participant’s accounts or at the end of the fiscal year by cancelling Units.

A deferred sales charge is imposed upon that portion of certain withdrawals which represents a return of contributions. The charge is designed to compensate PICA for sales and other marketing expenses. The maximum deferred sales charge is 7% on contributions withdrawn from an account during the first year of participation. After the first year of participation, the maximum deferred sales charge declines by 1% in each subsequent year until it reaches 0% after seven years. No deferred sales charge is imposed upon contributions withdrawn for any reason after seven years. Effective October 1, 2009, there is no longer a deferred sales charge on this Account. For the years ended December 31, 2009 and December 31, 2008, PICA has advised the Account that it received deferred sales charges of $862 and $2,484, respectively, imposed upon certain withdrawals from the Account, respectively.

Note 4: Unit Transactions

The number of Accumulation Units issued and redeemed for the years ended December 31, 2009 and December 31, 2008, are as follows:

	Year Ended December 31,
	2009		2008
Units issued	2,100,106		3,923,407
Units redeemed	(4,058,934	)	(3,746,725	)
Net Increase (Decrease)	(1,958,828	)	176,682

Note 5: Net Increase (Decrease) In Net Assets Resulting From Surplus Transfers

The increase (decrease) in net assets from surplus transfers represents the net increases to/(reductions from) PICA’s investment in the Account. This increase (decrease) includes reserve adjustments for mortality and expense risks assumed by PICA.

Note 6: Participant Loans

Loans are considered to be withdrawals from the Account from which the loan amount was deducted, though they are not considered a withdrawal from the MEDLEY Program. Therefore, no deferred sales charge is imposed upon them. The principal portion of any loan repayment, however, will be treated as a contribution to the receiving Account for purposes of calculating any deferred sales charge imposed upon any subsequent withdrawal. If the Participant defaults on the loan, for example by failing to make required payments, the outstanding balance of the loan will be treated as a withdrawal for purposes of the deferred sales charge. The deferred sales charge will be withdrawn from the same Accumulation Accounts, and in the same proportions, as the loan amount was withdrawn. If sufficient funds do not remain in those Accumulation Accounts, the deferred sales charge will be withdrawn from the Participant’s other Accumulation Accounts as well.

Withdrawals, transfers and loans from VCA-11 are considered to be withdrawals of contributions until all of the Participant’s contributions to the Account have been withdrawn, transferred or borrowed. No deferred sales charge is imposed upon withdrawals of any amount in excess of contributions.

For the year ended December 31, 2009, $195,772 in participant loans were withdrawn from VCA-11 and $128,388 of principal and interest was repaid to VCA-11. For the year ended December 31, 2008, $267,555 in participant loans were withdrawn from VCA-11 and $118,451 of principal and interest was repaid to VCA-11. Loan repayments are invested in Participant’s account(s) as chosen by the Participant, which may not necessarily be VCA-11. The initial loan proceeds which are being repaid may not necessarily have originated solely from VCA-11. During the year ended December 31, 2009, PICA has advised the Account that it received $3,006 in loan origination fees. The participant loan principal and interest repayments are included in purchase payments and transfers in within the Statement of Changes in Net Assets.

Note 7: New Accounting Pronouncement

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”. ASU 2010-06 will require reporting entities to make new disclosures about amount and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements, which are effective for interim and annual reporting periods beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.

Note 8: Subsequent Events

Management has evaluated the impact of all subsequent events on the Fund through February 25, 2010, the date the financial statements were issued, and has been determined that, except for the following, there were no subsequent events requiring recognition or disclosure in the financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE COMMITTEE AND PARTICIPANTS OF THE PRUDENTIAL VARIABLE CONTRACT ACCOUNT-11:

We have audited the accompanying statement of net assets of The Prudential Variable Contract Account-11 (the “Account”) as of December 31, 2009, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Account as of December 31, 2009, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 25, 2010

MANAGEMENT OF VCA 10 AND VCA 11 (Unaudited)

VCA 10 and VCA 11 are managed by The Prudential Variable Contract Account 10 Committee and The Prudential Variable Contract Account 11 Committees (the VCA Committees). The members of the VCA Committees are elected by the persons having voting rights in respect of the VCA 10 Account and the VCA 11 Account. The affairs of the Accounts are conducted in accordance with the Rules and Regulations of the Accounts.

Information pertaining to the Committee Members of VCA 10 and VCA 11 (hereafter referred to as Board Members) is set forth below. Board Members who are not deemed to be “interested persons” of VCA 10 and VCA 11 as defined in the 1940 Act, as amended (the Investment Company Act or the 1940 Act) are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of VCA 10 and VCA 11 are referred to as “Interested Board Members.” “Fund Complex” consists of VCA 10 and VCA 11 and any other investment companies managed by PI. VCA 10 and VCA 11 are also referred to as “Funds.”

Independent Board Members (1)
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Kevin J. Bannon (57) Board Member Portfolios Overseen: 57	Managing Director (since April 2008) and Chief Investment Officer (since October 2008) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.	Director of Urstadt Biddle Properties (since September 2008).
Linda W. Bynoe (57) Board Member Portfolios Overseen: 57	President and Chief Executive Officer (since March 1995) of Telemat Ltd. (management consulting); formerly Vice President at Morgan Stanley & Co (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (since May 2003); Anixter International (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Director of Equity Residential (residential real estate) (since December 2009); formerly Director of Dynegy Inc. (power generation) (September 2002-May 2006), CitiStreet Funds, Inc (mutual funds) (May 1993-February 2005), AM- CH, Inc. (restaurant holding company) (November 2004-February 2005).
Michael S. Hyland, CFA (64) Board Member Portfolios Overseen: 57	Independent Consultant (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President Salomon Brothers Asset Management (1989-1999).	None.
Douglas H. McCorkindale (70) Board Member Portfolios Overseen: 57	Formerly Chairman (February 2001-June 2006), Chief Executive Officer (June 2000-July 2005), President (September 1997-July 2005) and Vice Chairman (March 1984-May 2000) of Gannett Co. Inc. (publishing and media).	Director of Continental Airlines, Inc. (since May 1993); Director of Lockheed Martin Corp. (aerospace and defense) (since May 2001).
Stephen P. Munn (67) Board Member Portfolios Overseen: 57	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	None.
Richard A. Redeker (66) Board Member Portfolios Overseen: 57	Retired Mutual Fund Executive (36 years); Management Consultant; Director of Penn Tank Lines, Inc. (since 1999).	None.
Robin B. Smith (70) Board Member & Independent Chair Portfolios Overseen: 57	Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House.	Formerly Director of BellSouth Corporation (telecommunications) (1992-2006).
Stephen G. Stoneburn (66) Board Member Portfolios Overseen: 57	President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995- June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc (1975-1989).	None.

Interested Board Member (1)
Judy A. Rice (62) Board Member & President Portfolios Overseen: 57	President, Chief Executive Officer, Chief Operating Officer and Officer-In-Charge (since February 2003) of Prudential Investments LLC; President, Chief Executive Officer and Officer-In-Charge (since April 2003) of Prudential Mutual Fund Services LLC; Executive Vice President (since December 2008) of Prudential Investment Management Services LLC; formerly Vice President (February 1999- April 2006) of Prudential Investment Management Services LLC; formerly President, Chief Executive Officer, Chief Operating Officer and Officer-In-Charge (May 2003-June 2005) and Director (May 2003-March 2006) and Executive Vice President (June 2005-March 2006) of AST Investment Services, Inc.; Member of Board of Governors of the Investment Company Institute.	None.

⁽¹⁾ The year in which each individual joined the Fund’s Board is as follows: Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Michael S. Hyland, 2008; Douglas H. McCorkindale, 2003, Stephen P. Munn, 2008; Richard A. Redeker, 2003; Robin B. Smith, 2003; Stephen G. Stoneburn, 2003; Kevin J. Bannon, 2008; Michael S. Hyland, 2008; Stephen P. Munn, 2008; Judy A. Rice, Board Member and President since 2003.

Fund Officers (a)(1)
Name, Address and Age Position with Fund	Principal Occupation(s) During Past Five Years
Scott E. Benjamin (36) Vice President	Executive Vice President (since June 2009) of Prudential Investments LLC and Prudential Investment Management Services LLC; Senior Vice President Product Development and Marketing, Prudential Investments (since February 2006); Vice President Product Development and Product Management, Prudential Investments (2003-2006).
Kathryn L. Quirk (57) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of PI and Prudential Mutual Fund Services LLC; Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (52) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (51) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (35) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (38) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (47) Assistant Secretary	Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (51) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc. (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (51) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (47) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001-2004).
Noreen M. Fierro (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (50) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (46) Assistant Treasurer	Vice President (since 2005) of Prudential Investments LLC.
Peter Parrella (51) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).

^(a) Excludes Ms. Rice, an interested Board Member who also serves as President.

⁽¹⁾ The year that each individual became a Fund officer is as follows: Scott E. Benjamin, 2009; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Grace C. Torres, 1997; Valerie Simpson, 2007; Peter Parrella, 2007, M. Sadiq Peshimam, 2006; Noreen M. Fierro, 2006; Theresa C. Thompson, 2008.

Explanatory Notes to Tables:

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

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

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

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

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

The Prudential Series Fund

The following pages represent information on the Prudential Series Fund Portfolios. Returns are at the Portfolio level, not at the Subaccount level.

Each Subaccount of VCA-24 will invest in the corresponding portfolio of the Prudential Series Fund (the “Fund”). Of the portfolios comprising the Fund, seven portfolios are presently available to The MEDLEY Program. The Diversified Bond Subaccount invests in the Diversified Bond Portfolio, the Government Income Subaccount in the Government Income Portfolio, the Conservative Balanced Subaccount in the Conservative Balanced Portfolio, the Flexible Managed Subaccount in the Flexible Managed Portfolio, the Stock Index Subaccount in the Stock Index Portfolio, the Equity Subaccount invests in the Equity Portfolio, and the Global Subaccount in the Global Portfolio.

There is no assurance that the investment objective of the portfolios will be attained, nor is there any guarantee that the amount available to a Participant will equal or exceed the total contributions made on that Participant’s behalf. The value of the investments held in each account may fluctuate daily and is subject to the risks of both changing economic conditions and the selection of investments necessary to meet the Subaccounts’ or Portfolios’ objectives.

Important Note

This information supplements the financial statements and other information included in this Report to Participants in The MEDLEY Program. It highlights the investment performance of the seven portfolios of the Prudential Series Fund which are available through the Prudential Variable Contract Account-24. The rates of return quoted on the following pages reflect deduction of investment management fees and portfolio expenses, but not product charges. They reflect the reinvestment of dividend and capital gains distributions. They are not an estimate or a guarantee of future performance.

Contract unit values increase or decrease based on the performance of the portfolio and when redeemed, may be worth more or less than original cost. Changes in contract values depend not only on the investment performance of the Portfolio but also on the insurance, administrative charges and applicable sales charges, if any, under a contract. These contract charges effectively reduce the dollar amount of any net gains and increase the dollar amount of any net losses.

The Prudential Series Fund, Conservative Balanced Portfolio Subadvised by:  Prudential Investment Management, Inc., Quantitative Management Associates LLC December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	20.01	%	2.72	%	2.68	%
Blended Index	15.72		2.77		2.63
S&P 500 Index	26.47		0.42		-0.95

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Conservative Balanced Portfolio rose 20.01%.

Quantitative Management Associates, LLC runs the Portfolio whose objective is total return consistent with a conservatively managed diversified portfolio. The Portfolio is diversified across a combination of equity and equity-related securities, debt obligations, and money market instruments.

A scorching broad-based rally in global equity markets began in March 2009 and continued during the year as global economic conditions improved. Developed market equities outperformed the U.S. stock market partially due to a weakening greenback. In the United States, mid-cap stocks and the growth style of investing led gains. Emerging market stocks were the stars, returning nearly 79% overall in U.S. dollar terms as investors increasingly sought riskier assets in pursuit of higher returns.

In the fixed-income markets, yield-hungry investors favored riskier debt securities encouraged by improving global economic conditions and the low interest-rate environment, among other factors. This preference for riskier assets, supply pressures that emerged as a flood of U.S. Treasury securities were issued to fund the federal deficit and stimulus programs, and renewed inflation fears pressured the U.S. Treasury market, which ended the year in the red.

The Portfolio outperformed the blended index because it maintained a slightly larger exposure to equities than the guideline weight of 50%. The Portfolio also benefited from a fixed-income strategy that emphasized investment-grade corporate bonds, commercial mortgage-backed securities, emerging market bonds, and certain other types of debt securities that carry greater credit risk than ultra safe U.S. Treasuries, which are backed by the federal government. These riskier bond markets posted strong gains in 2009 that easily outperformed the Barclays Capital U.S. Aggregate Bond Index.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Blended Index consists of S&P 500 Index (50%), Barclays Capital U.S. Aggregate Bond Index (40%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and 3-Month T-Bill Index (10%), an unmanaged market value-weighted index of investment grade fixed rate public obligations of the U.S. Treasury with maturities of 3 months, excluding zero coupon strips. S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Diversified Bond Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	20.51	%	5.92	%	6.64	%
Barclays Capital U.S. Aggregate Bond Index	5.93		4.97		6.33

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Diversified Bond Portfolio rose 20.51%.

The U.S. government and the Federal Reserve took steps to steady the nation’s financial system and stimulate the economy. Both had been hurt by a protracted credit crisis. The financial system began to heal in 2009 and the economy began to tentatively emerge from the so-called “Great Recession,” even though job losses continued to climb. The favorable developments boosted investor confidence in bonds with greater credit risk than U.S. Treasury securities. Riskier bonds were also sought for their attractive yields in the low interest-rate environment. Most notably, prices soared on high yield corporate “junk” bonds, while the Treasury market ended 2009 in the red.

Prudential Fixed Income, which is part of Prudential Investment Management, Inc., runs the Portfolio, which outperformed the Barclays Capital U.S. Aggregate Bond Index (the Index) primarily because it had a larger exposure than the Index to investment-grade corporate bonds, commercial mortgage-backed securities, and asset-backed securities. Each of these markets beat the Index in 2009. In addition to support provided by generally improving economic conditions, corporate bonds gained as many firms strengthened their balance sheets. One initiative that aided the financial system was the Term Asset Backed Securities Loan Facility (TALF), which provides loans on favorable terms to investors who buy high-quality bonds backed by cash flows from credit cards, commercial mortgages, or certain other types of loans and leases. Sales of these bonds help keep credit flowing to businesses and consumers. TALF and a related initiative encouraged a rally in asset-backed securities, residential mortgage-backed securities not guaranteed by federal agencies, and commercial mortgage-backed securities.

The Portfolio had smaller exposures than the Index to Treasury securities, federal agency debt securities, and mortgage-backed securities guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac. This worked well because each of these markets trailed the Index in 2009. The Portfolio had a larger exposure than the Index to emerging market bonds, which also worked well as this market outperformed the Index.

The Portfolio benefited from its exposure to two riskier markets not included in the Index. It held high yield corporate bonds and leveraged bank loans, both of which beat the Index. Leveraged bank loans are generally considered a more conservative type of investment than high yield bonds because, in most cases, a bankrupt firm will pay off its leveraged loan before it pays off its high yield bonds.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital U.S. Aggregate Bond Index is an unmanaged index comprised of more than 5,000 government and corporate bonds. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Equity Portfolio Subadvised by:  Jennison Associates LLC December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio: Class I	38.17	%	3.23	%	1.91	%
Portfolio: Class II	37.58		2.82		1.50
Russell 1000® Index	28.43		0.79		-0.49
S&P 500 Index	26.47		0.42		-0.95

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS¹

Portfolio (Class I) inception: 5/13/1983. Portfolio (Class II) inception: 5/4/1999. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted.

The Russell 1000^® Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Equity Portfolio Class I shares rose 38.17%, while the Class II shares rose 37.58%, significantly outperforming the S&P 500 Index (the Index). The investment objective of this Portfolio is long-term growth of capital.

Every sector was a source of positive relative performance, and stock selection nearly across the board drove the Portfolio’s strong performance. The top 10 contributors came from seven different sectors.

Positions in information technology benefited absolute performance most. An overweight stance in the sector was the primary driver of outperformance. Energy positions also bolstered overall performance. Jennison remains bullish on the long-term supply/demand imbalances for oil and natural gas, and prefers exploration and production companies with organic production and reserve growth because they have the highest leverage to rising oil/gas prices. The investment team also seeks exploration and production companies with low per-barrel operating costs. The Portfolio substantially outperformed in financials and its underweight stance also added to performance relative to its benchmark, the S&P 500 Index.

Industrials was the one sector that detracted from absolute return. However, the Portfolio’s smaller exposure to the sector resulted in positive relative performance.

From the depths of their March lows, equity markets have posted impressive rebounds, with most indexes gaining 50% or more through year-end. Corporate profits, which have been much better than were thought possible at the beginning of 2009, largely due to workforce and inventory reductions, have provided much of the fuel for this recovery in equities. Favorable interest rate and liquidity conditions have been instrumental in spurring the rally, as well. With these tailwinds in place, there is reason to be optimistic that further gains lie ahead in 2010. Yet significant challenges remain, including high unemployment, still-weak housing markets, and probable increases in tax rates. Against this backdrop, Jennison remains cautiously optimistic.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

¹ The graph is based on the performance of Class I shares. Performance of Class II shares will be lower due to differences in the fee structure. Class II shares have associated 12b-1 and administrative fees at an annual rate of 0.25% and 0.15%, respectively, of the average daily net assets of the Class II shares.

Russell 1000^® Index is a market cap-weighted index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market. S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Flexible Managed Portfolio Subadvised by:  Prudential Investment Management, Inc., Quantitative Management Associates, LLC December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	19.95	%	2.30	%	2.22	%
Blended Index	18.08		2.42		2.07
S&P 500 Index	26.47		0.42		-0.95

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/13/1983. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Flexible Managed Portfolio rose 19.95%.

Quantitative Management Associates, LLC runs the Portfolio whose objective is total return consistent with an aggressively managed diversified portfolio. The Portfolio is diversified across a combination of equity and equity-related securities, debt obligations, and money market instruments.

A scorching broad-based rally in global equity markets began in March 2009 and continued during the year as global economic conditions improved. Developed market equities outperformed the U.S. stock market partially due to a weakening greenback. In the United States, mid-cap stocks and the growth style of investing led gains. Emerging market stocks were the stars, returning nearly 79% overall in U.S. dollar terms as investors increasingly sought riskier assets in pursuit of higher returns.

In the fixed-income markets, yield-hungry investors snapped up riskier debt securities encouraged by improving global economic conditions and the low interest-rate environment, among other factors. This preference for riskier assets, supply pressures that emerged as a flood of U.S. Treasuries were issued, and renewed inflation fears pressured the U.S. Treasury market, which ended the year in the red.

The Portfolio outperformed the blended index because it maintained a slightly larger exposure to equities than the guideline weight of 60%. The Portfolio also benefited from a fixed-income strategy that emphasized investment-grade corporate bonds, commercial mortgage-backed securities, emerging market bonds, and certain other types of debt securities that carry greater credit risk than ultra-safe U.S. Treasury securities, which are backed by the federal government. These riskier bond markets posted strong gains in 2009 that easily outperformed the Barclays Capital U.S. Aggregate Bond Index.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Blended Index consists of S&P 500 Index (60%), Barclays Capital U.S. Aggregate Bond Index (35%), an unmanaged index comprised of more than 5,000 government and corporate bonds, and 3-Month T-Bill Index (5%), an unmanaged market value-weighted index of investment grade fixed rate public obligations of the U.S. Treasury with maturities of 3 months, excluding zero coupon strips. S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Global Portfolio Subadvised by:  LSV Asset Management, Marsico Capital Management, LLC, Quantitative Management Associates LLC, T. Rowe Price
Associates, Inc., William Blair & Company LLC December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	31.39	%	2.85	%	-1.52	%
MSCI World Index (GD)	30.79		2.57		0.23

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 9/19/1988. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Global Portfolio rose 31.39%.

The Portfolio is co-managed by four specialist firms: Marsico Capital Management (Marsico), T. Rowe Price Associates, Inc. (T. Rowe Price), William Blair & Company, LLC (William Blair), and LSV Asset Management (LSV). The Portfolio seeks growth of capital over the long term by investing in growth and value stocks of large companies in the United States and abroad.

A scorching broad-based rally in global equity markets began in March 2009 and continued during the year as global economic conditions improved. Developed market equities outperformed the U.S. stock market due partially to a weakening greenback. In the United States, mid-cap stocks and the growth style of investing led gains. Emerging market stocks were the stars, returning nearly 79% overall in U.S. dollar terms as investors increasingly sought riskier assets in pursuit of higher returns.

The Portfolio outperformed the MSCI World Index due to the strong relative performances of three of its portions versus their respective style-specific benchmark indexes. The U.S. large-cap value portion managed by T. Rowe Price outperformed its style-specific benchmark index driven by stock selection in the financials and industrials sectors. The T. Rowe Price portion also benefited from an overweight in the technology sector. An overweight in consumer discretionary and an underweight in utilities also aided relative results.

The LSV portion, which invests in international large-cap value stocks, outperformed its style-specific benchmark index largely because the attributes of its “deep value” investment style, including low price-to-earnings (P/E) and price-to-book (P/B) ratios and high dividend-yield stocks, were rewarded in 2009. The LSV portion also benefitted from strong stock selection in the industrials, consumer discretionary, and technology sectors.

The portion managed by William Blair, which invests in international mid- and large-cap growth stocks, outperformed its style-specific benchmark index largely due to country allocations. Exposure to emerging markets nations Brazil and South Africa boosted performance as they returned more than 100% and 50% respectively in U.S. dollar terms. An underweight in Japanese stocks also benefited performance as Japan was the worst performing developed market.

The Marsico portion, which invests in U.S. large-cap growth stocks, was the only one that underperformed its style-specific benchmark index. Most of its underperformance was driven by sector exposures, notably an overweight position in the financials sector, banks in particular, and an underweight to technology.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

MSCI World Index (GD) - The Morgan Stanley Capital International World Index is an unmanaged capitalization weighted index which includes the equity markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, United Kingdom and United States. The GD version does not reflect the impact of withholding taxes on reinvested dividends. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings, refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Government Income Portfolio Subadvised by:  Prudential Investment Management, Inc. December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	7.71	%	4.78	%	6.18	%
Barclays Capital Government Bond Index	-2.20		4.87		6.17

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 5/1/1989. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Government Income Portfolio rose 7.71%.

The U.S. government and the Federal Reserve took steps to steady the nation’s financial system and stimulate the economy. Both had been hurt by a protracted credit crisis. The financial system began to heal in 2009 and the economy began to tentatively emerge from the so-called “Great Recession,” even though job losses continued to climb. The favorable developments boosted investor confidence in bonds with greater credit risk than U.S. Treasury securities. Riskier bonds were also sought for their attractive yields in the low interest-rate environment. Therefore, prices climbed on debt securities such as corporate bonds, while the U.S. Treasury market ended 2009 in the red.

Prudential Fixed Income which is part of Prudential Investment Management, Inc., runs the Portfolio, which outperformed the Barclays Capital U.S. Government Bond Index (the Index) because it had exposure to commercial mortgage-backed securities as well as good security selection within that market, which easily outperformed the Index in 2009. Commercial mortgage-backed securities gained sharply after the Fed launched the Term Asset Backed Securities Loan Facility (TALF), which provides loans at favorable terms to investors who buy high-quality bonds backed by cash flows from pools of credit cards, auto loans, commercial mortgages, or certain other types of loans. Sales of these debt securities help keep credit flowing to businesses and consumers.

The Portfolio also benefited from taking advantage of pricing inefficiencies within in the U.S. Treasury market between STRIPS (Separate Trading of Registered Interest and Principal of Securities) and TIPS (Treasury Inflation Protected Securities) and between newly issued Treasury securities and those issued earlier with higher coupons.

Another positive was the Portfolio’s favorable security selection among residential mortgage-backed securities guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac. The Portfolio emphasized mortgage-backed securities with higher coupons that benefited from a decrease in the rate of expected prepayments on the securities and from a program in which the Fed purchased the securities to help support the housing market and mortgage industry. Additionally, the Portfolio held shares of the Dryden Core Investment Fund—Short Term Bond Series, which gained in value amid the environment that favored riskier assets.

On a negative note, the Portfolio’s strategies for managing its duration (sensitivity to changes in the level of interest rates) and its positioning on the yield curve subtracted slightly from its performance in 2009.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

Barclays Capital Government Bond Index is a weighted index comprised of securities issued or backed by the U.S. Government, its agencies and instrumentalities with a remaining maturity of one to thirty years. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund, Stock Index Portfolio Subadvised by:  Quantitative Management Associates LLC December 31, 2009

Investment Manager’s Report - As of December 31, 2009

Average Annual Total Return Percentages

	1-Year		5-Year		10-Year
Portfolio	26.07	%	0.18	%	-1.16	%
S&P 500 Index	26.47		0.42		-0.95

Past performance does not guarantee future returns. 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.

$10,000 INVESTED OVER 10 YEARS

Portfolio inception: 10/19/1987. Portfolio performance is net of investment fees and fund expenses, but not product charges, which, if included, would significantly lower the performance quoted. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

For the year ended December 31, 2009, the Stock Index Portfolio rose 26.07%.

Quantitative Management Associates, LLC runs the Portfolio, which is an index fund that uses a quantitative approach to approximate the holdings and weights of the S&P 500 Index, except for shares of Prudential Financial, Inc. The Portfolio cannot hold these shares because of compliance restrictions.

The Portfolio performed in line with the S&P 500 Index in 2009. Income the Portfolio earned from lending its securities to others offset the negative impact from the restriction on holding shares of Prudential Financial.

The U.S. government and the Federal Reserve took steps to steady the nation’s financial system and stimulate the economy. Both had been hurt by a protracted credit crisis. The financial system began to heal in 2009 and the economy began to tentatively emerge from the so-called “Great Recession,” even though job losses continued to climb. The favorable developments helped boost investor confidence in stocks and a powerful rally in the U.S. stock market that began in March 2009 continued during the year.

All sectors of the S&P 500 Index benefited from the rally. The largest contributions came from more economically sensitive stocks, the cyclicals, including top contributors information technology, materials and consumer discretionary, which stand to benefit from a global economic rebound. Information technology benefited from strong balance sheets and the anticipation that companies would upgrade their technology in order to increase efficiencies. The materials sector was attractive for its exposure to companies tied to commodities. Consumer discretionary scored attractive returns based on stronger-than-anticipated consumer spending in light of tighter credit conditions and higher unemployment. The less economically sensitive utilities and telecommunications services sectors posted the worst, although still positive, returns of any sectors.

Prudential Investments LLC (PI), an indirect, wholly owned subsidiary of Prudential Financial, Inc., serves as the investment manager for the Fund.

S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market. These returns do not include the effect of any investment management expenses. These returns would have been lower if they included the effect of these expenses. Investors cannot invest directly in a market index. For a complete list of holdings refer to the Schedule of Investments section of this report.

The Prudential Series Fund Fees and Expenses — unaudited December 31, 2009

As a contract owner investing in Portfolios of the Fund through a variable annuity or variable life contract, you incur ongoing costs, including management fees, and other Portfolio expenses. 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 investment options. This example does not reflect fees and charges under your variable annuity or variable life contract. If contract charges were included, the costs shown below would be higher. Please consult the prospectus for your contract for more information about contract fees and charges.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the Portfolio expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the Portfolio expenses you paid on your account during this period. As noted above, the table does not reflect variable contract fees and charges.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio and other investment options. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other investment options.

Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any contract fees and charges, such as sales charges (loads), insurance charges or administrative charges. Therefore the second line of the table is useful to compare ongoing investment option costs only, and will not help you determine the relative total costs of owning different contracts. In addition, if these contract fee and charges were included, your costs would have been higher.

The Prudential Series Fund Portfolios		Beginning Account Value July 1, 2009		Ending Account Value December 31, 2009		Annualized Expense Ratio based on the Six-Month period		Expenses Paid During the Six-Month period
Conservative Balanced (Class I)	Actual	$	1,000.00	$	1,150.80	0.57	%	$	3.09
	Hypothetical	$	1,000.00	$	1,022.33	0.57	%	$	2.91
Diversified Bond (Class I)	Actual	$	1,000.00	$	1,112.40	0.42	%	$	2.24
	Hypothetical	$	1,000.00	$	1,023.09	0.42	%	$	2.14
Equity (Class I)	Actual	$	1,000.00	$	1,241.00	0.48	%	$	2.71
	Hypothetical	$	1,000.00	$	1,022.79	0.48	%	$	2.45
Equity (Class II)	Actual	$	1,000.00	$	1,238.10	0.88	%	$	4.96
	Hypothetical	$	1,000.00	$	1,020.77	0.88	%	$	4.48
Flexible Managed (Class I)	Actual	$	1,000.00	$	1,161.90	0.62	%	$	3.38
	Hypothetical	$	1,000.00	$	1,022.08	0.62	%	$	3.16
Global (Class I)	Actual	$	1,000.00	$	1,222.90	0.83	%	$	4.65
	Hypothetical	$	1,000.00	$	1,021.02	0.83	%	$	4.23
Government Income (Class I)	Actual	$	1,000.00	$	1,046.90	0.46	%	$	2.37
	Hypothetical	$	1,000.00	$	1,022.89	0.46	%	$	2.35
Stock Index (Class I)	Actual	$	1,000.00	$	1,223.20	0.36	%	$	2.02
	Hypothetical	$	1,000.00	$	1,023.39	0.36	%	$	1.84

Portfolio expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended December 31, 2009, and divided by the 365 days in the Portfolio’s fiscal year ended December 31, 2009 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.

	CONSERVATIVE BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 91.2%
COMMON STOCKS — 49.5%	Shares	Value (Note 2)
Aerospace & Defense — 1.4%
Boeing Co. (The)	77,000	$	4,168,010
General Dynamics Corp.	41,500		2,829,055
Goodrich Corp.	13,700		880,225
Honeywell International, Inc.	80,912		3,171,750
ITT Corp.	20,100		999,774
L-3 Communications Holdings, Inc.	11,900		1,034,705
Lockheed Martin Corp.	34,100		2,569,435
Northrop Grumman Corp.	33,662		1,880,023
Precision Castparts Corp.	13,900		1,533,865
Raytheon Co.	41,800		2,153,536
Rockwell Collins, Inc.	16,600		918,976
United Technologies Corp.	100,900		7,003,469
			29,142,823
Air Freight & Logistics — 0.5%
C.H. Robinson Worldwide, Inc.	18,800		1,104,124
Expeditors International of Washington, Inc.	22,700		788,371
FedEx Corp.	33,900		2,828,955
United Parcel Service, Inc. (Class B Stock)	107,000		6,138,590
			10,860,040
Airlines
Southwest Airlines Co.	79,300		906,399
Auto Components — 0.1%
Goodyear Tire & Rubber Co. (The)(a)	25,600		360,960
Johnson Controls, Inc.	70,600		1,923,144
			2,284,104
Automobiles — 0.2%
Ford Motor Co.(a)(b)	347,685		3,476,850
Harley-Davidson, Inc.	25,000		630,000
			4,106,850
Beverages — 1.3%
Brown-Forman Corp. (Class B Stock)	11,900		637,483
Coca-Cola Co. (The)	245,600		13,999,200
Coca-Cola Enterprises, Inc.	35,100		744,120
Constellation Brands, Inc. (Class A Stock)(a)	19,400		309,042
Dr Pepper Snapple Group, Inc.	27,800		786,740
Molson Coors Brewing Co. (Class B Stock)	17,100		772,236
Pepsi Bottling Group, Inc.	15,000		562,500
PepsiCo, Inc.	167,230		10,167,584
			27,978,905
Biotechnology — 0.8%
Amgen, Inc.(a)	108,920		6,161,604
Biogen Idec, Inc.(a)(b)	30,390		1,625,865
Celgene Corp.(a)	48,400		2,694,912
Cephalon, Inc.(a)	8,600		536,726
Genzyme Corp.(a)	26,400		1,293,864
Gilead Sciences, Inc.(a)	96,400		4,172,192
			16,485,163
Building Products
Masco Corp.	35,500		490,255

COMMON STOCKS (continued)	Shares	Value (Note 2)
Capital Markets — 1.4%
Ameriprise Financial, Inc.	28,720	$	1,114,911
Bank of New York Mellon Corp. (The)	130,058		3,637,722
Charles Schwab Corp. (The)	100,150		1,884,823
E*Trade Financial Corp.(a)	127,000		222,250
Federated Investors, Inc. (Class B Stock)(b)	10,800		297,000
Franklin Resources, Inc.	16,400		1,727,740
Goldman Sachs Group, Inc. (The)	55,700		9,404,388
Invesco Ltd.	48,300		1,134,567
Janus Capital Group, Inc.(b)	18,600		250,170
Legg Mason, Inc.	17,800		536,848
Morgan Stanley	146,980		4,350,608
Northern Trust Corp.	26,200		1,372,880
State Street Corp.	53,700		2,338,098
T. Rowe Price Group, Inc.(b)	27,800		1,480,350
			29,752,355
Chemicals — 1.0%
Air Products & Chemicals, Inc.	22,800		1,848,168
Airgas, Inc.	7,600		361,760
CF Industries Holdings, Inc.	5,700		517,446
Dow Chemical Co. (The)	121,731		3,363,428
E.I. du Pont de Nemours & Co.	95,320		3,209,424
Eastman Chemical Co.	7,800		469,872
Ecolab, Inc.	25,800		1,150,164
FMC Corp.	8,100		451,656
International Flavors & Fragrances, Inc.	9,600		394,944
Monsanto Co.	57,194		4,675,609
PPG Industries, Inc.	18,200		1,065,428
Praxair, Inc.	32,200		2,585,982
Sigma-Aldrich Corp.	12,200		616,466
			20,710,347
Commercial Banks — 1.4%
BB&T Corp.(b)	72,500		1,839,325
Comerica, Inc.	19,200		567,744
Fifth Third Bancorp	89,021		867,955
First Horizon National Corp.(a)	26,880		360,192
Huntington Bancshares, Inc.	77,936		284,466
KeyCorp	92,300		512,265
M&T Bank Corp.(b)	9,000		602,010
Marshall & Ilsley Corp.	48,500		264,325
PNC Financial Services Group, Inc.	50,033		2,641,242
Regions Financial Corp.	129,603		685,600
SunTrust Banks, Inc.	57,100		1,158,559
U.S. Bancorp	206,385		4,645,726
Wells Fargo & Co.	537,864		14,516,949
Zions Bancorporation(b)	13,550		173,847
			29,120,205
Commercial Services & Supplies — 0.3%
Avery Dennison Corp.	11,500		419,635
Cintas Corp.	14,600		380,330
Iron Mountain, Inc.(a)(b)	20,800		473,408
Matsuda Sangyo Co. Ltd. (Japan)	30		516
Pitney Bowes, Inc.	20,700		471,132
Republic Services, Inc. (Class A Stock)	35,065		992,690

SEE NOTES TO FINANCIAL STATEMENTS.

A1

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Commercial Services & Supplies (continued)
RR Donnelley & Sons Co.	21,400	$	476,578
Stericycle, Inc.(a)(b)	8,800		485,496
Waste Management, Inc.(b)	51,642		1,746,016
			5,445,801
Communications Equipment — 1.3%
Cisco Systems, Inc.(a)	617,600		14,785,344
Harris Corp.	14,200		675,210
JDS Uniphase Corp.(a)	21,475		177,169
Juniper Networks, Inc.(a)(b)	58,000		1,546,860
Motorola, Inc.	248,425		1,927,778
QUALCOMM, Inc.	175,600		8,123,256
Tellabs, Inc.(a)	45,800		260,144
			27,495,761
Computers & Peripherals — 3.0%
Apple, Inc.(a)	96,300		20,305,818
Dell, Inc.(a)	182,500		2,620,700
EMC Corp.(a)	218,950		3,825,057
Hewlett-Packard Co.	253,648		13,065,408
International Business Machines Corp.	140,700		18,417,630
Lexmark International, Inc. (Class A Stock)(a)	9,833		255,461
NetApp, Inc.(a)	35,700		1,227,723
QLogic Corp.(a)(b)	12,100		228,327
SanDisk Corp.(a)(b)	24,500		710,255
Sun Microsystems, Inc.(a)	79,275		742,807
Teradata Corp.(a)	19,300		606,599
Western Digital Corp.(a)	26,400		1,165,560
			63,171,345
Construction & Engineering — 0.1%
Fluor Corp.	19,100		860,264
Jacobs Engineering Group, Inc.(a)(b)	12,700		477,647
Quanta Services, Inc.(a)	20,100		418,884
			1,756,795
Construction Materials
Vulcan Materials Co.	13,400		705,778
Consumer Finance — 0.4%
American Express Co.	129,100		5,231,132
Capital One Financial Corp.	49,161		1,884,833
Discover Financial Services	60,540		890,543
SLM Corp.(a)	60,200		678,454
			8,684,962
Containers & Packaging — 0.1%
Ball Corp.	10,100		522,170
Bemis Co., Inc.	11,300		335,045
Owens-Illinois, Inc.(a)	17,500		575,225
Pactiv Corp.(a)	15,100		364,514
Sealed Air Corp.	17,100		373,806
			2,170,760
Distributors
Genuine Parts Co.	17,700		671,892
Diversified Consumer Services — 0.1%
Apollo Group, Inc. (Class A Stock)(a)(b)	13,500		817,830

COMMON STOCKS (continued)	Shares	Value (Note 2)
Diversified Consumer Services (continued)
DeVry, Inc.	6,300	$	357,399
H&R Block, Inc.	35,600		805,272
			1,980,501
Diversified Financial Services — 2.1%
Bank of America Corp.	1,061,121		15,980,482
Citigroup, Inc.	2,040,458		6,753,916
CME Group, Inc. (Class A Stock)	7,240		2,432,278
IntercontinentalExchange, Inc.(a)(b)	8,800		988,240
JPMorgan Chase & Co.	423,745		17,657,454
Leucadia National Corp.(a)	19,700		468,663
Moody’s Corp.(b)	23,600		632,480
Nasdaq OMX Group, Inc. (The)(a)	16,600		329,012
NYSE Euronext	30,500		771,650
			46,014,175
Diversified Telecommunication Services — 1.4%
AT&T, Inc.	632,368		17,725,275
CenturyTel, Inc.(b)	32,007		1,158,974
Frontier Communications Corp.	32,100		250,701
Qwest Communications International, Inc.	174,057		732,780
Verizon Communications, Inc.	305,476		10,120,420
Windstream Corp.	46,057		506,166
			30,494,316
Electric Utilities — 1.0%
Allegheny Energy, Inc.	16,800		394,464
American Electric Power Co., Inc.	51,860		1,804,209
Duke Energy Corp.	140,424		2,416,697
Edison International	36,400		1,265,992
Entergy Corp.	20,900		1,710,456
Exelon Corp.	70,574		3,448,951
FirstEnergy Corp.	32,601		1,514,317
FPL Group, Inc.	44,500		2,350,490
Northeast Utilities	18,200		469,378
Pepco Holdings, Inc.	23,800		401,030
Pinnacle West Capital Corp.	9,600		351,168
PPL Corp.	38,600		1,247,166
Progress Energy, Inc.	29,683		1,217,300
Southern Co.	84,500		2,815,540
			21,407,158
Electrical Equipment — 0.2%
Emerson Electric Co.	81,700		3,480,420
First Solar, Inc.(a)(b)	4,700		636,380
Rockwell Automation, Inc.	15,300		718,794
Roper Industries, Inc.	6,700		350,879
			5,186,473
Electronic Equipment & Instruments — 0.3%
Agilent Technologies, Inc.(a)(b)	35,614		1,106,527
Amphenol Corp. (Class A Stock)	18,700		863,566
Corning, Inc.	169,000		3,263,390
FLIR Systems, Inc.(a)	14,900		487,528
Jabil Circuit, Inc.	23,600		409,932
Molex, Inc.	15,000		323,250
			6,454,193

SEE NOTES TO FINANCIAL STATEMENTS.

A2

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Energy Equipment & Services — 0.9%
Baker Hughes, Inc.(b)	33,650	$	1,362,152
BJ Services Co.	28,600		531,960
Cameron International Corp.(a)	24,600		1,028,280
Diamond Offshore Drilling, Inc.	7,800		767,676
FMC Technologies, Inc.(a)	13,500		780,840
Halliburton Co.	95,200		2,864,568
Nabors Industries Ltd. (Bermuda)(a)	27,700		606,353
National Oilwell Varco, Inc.	45,500		2,006,095
Rowan Cos., Inc.(a)	13,200		298,848
Schlumberger Ltd.	128,300		8,351,047
Smith International, Inc.	23,600		641,212
			19,239,031
Food & Staples Retailing — 1.3%
Costco Wholesale Corp.	46,600		2,757,322
CVS Caremark Corp.	146,748		4,726,753
Kroger Co. (The)	65,746		1,349,766
Safeway, Inc.	45,400		966,566
SUPERVALU, Inc.	22,310		283,560
SYSCO Corp.	64,200		1,793,748
Walgreen Co.	105,500		3,873,960
Wal-Mart Stores, Inc.	229,700		12,277,465
Whole Foods Market, Inc.(a)(b)	16,200		444,690
			28,473,830
Food Products — 0.8%
Archer-Daniels-Midland Co.	69,426		2,173,728
Campbell Soup Co.	20,400		689,520
ConAgra Foods, Inc.	45,100		1,039,555
Dean Foods Co.(a)(b)	20,800		375,232
General Mills, Inc.	34,700		2,457,107
H.J. Heinz Co.	34,300		1,466,668
Hershey Co. (The)(b)	17,600		629,904
Hormel Foods Corp.	8,600		330,670
J.M. Smucker Co. (The)	12,500		771,875
Kellogg Co.	27,100		1,441,720
Kraft Foods, Inc. (Class A Stock)	156,353		4,249,675
McCormick & Co., Inc.	12,800		462,464
Sara Lee Corp.	75,800		923,244
Tyson Foods, Inc. (Class A Stock)	33,400		409,818
			17,421,180
Gas Utilities — 0.1%
EQT Corp.	13,700		601,704
Nicor, Inc.	4,700		197,870
Questar Corp.	16,800		698,376
			1,497,950
Healthcare Equipment & Supplies — 1.0%
Baxter International, Inc.	64,000		3,755,520
Becton Dickinson And Co.	24,600		1,939,956
Boston Scientific Corp.(a)	160,467		1,444,203
C.R. Bard, Inc.	10,800		841,320
Carefusion Corp.(a)	19,475		487,070
DENTSPLY International, Inc.	16,200		569,754
Hospira, Inc.(a)	17,460		890,460
Intuitive Surgical, Inc.(a)	4,100		1,243,612
Medtronic, Inc.	117,600		5,172,048
St. Jude Medical, Inc.(a)	36,000		1,324,080

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies (continued)
Stryker Corp.	29,200	$	1,470,804
Varian Medical Systems, Inc.(a)(b)	13,100		613,735
Zimmer Holdings, Inc.(a)	23,000		1,359,530
			21,112,092
Healthcare Providers & Services — 1.1%
Aetna, Inc.	45,400		1,439,180
AmerisourceBergen Corp. (Class A Stock)	33,700		878,559
Cardinal Health, Inc.	37,750		1,217,060
CIGNA Corp.	28,400		1,001,668
Coventry Health Care, Inc.(a)	17,050		414,145
DaVita, Inc.(a)	10,600		622,644
Express Scripts, Inc.(a)	28,900		2,498,405
Humana, Inc.(a)	16,700		732,963
Laboratory Corp. of America Holdings(a)(b)	11,400		853,176
McKesson Corp.	28,230		1,764,375
Medco Health Solutions, Inc.(a)	50,698		3,240,109
Patterson Cos., Inc.(a)(b)	9,000		251,820
Quest Diagnostics, Inc.	17,300		1,044,574
Tenet Healthcare Corp.(a)	44,600		240,394
UnitedHealth Group, Inc.	123,700		3,770,376
WellPoint, Inc.(a)	51,500		3,001,935
			22,971,383
Healthcare Technology
IMS Health, Inc.	21,800		459,108
Hotels, Restaurants & Leisure — 0.7%
Carnival Corp.(a)	46,300		1,467,247
Darden Restaurants, Inc.	13,950		489,227
International Game Technology	28,200		529,314
Marriott International, Inc. (Class A Stock)	25,228		687,463
McDonald’s Corp.	116,000		7,243,040
Starbucks Corp.(a)(b)	79,300		1,828,658
Starwood Hotels & Resorts Worldwide, Inc.(b)	18,200		665,574
Wyndham Worldwide Corp.	21,520		434,058
Wynn Resorts Ltd.	6,700		390,141
Yum! Brands, Inc.	50,200		1,755,494
			15,490,216
Household Durables — 0.2%
Black & Decker Corp.	6,900		447,327
D.R. Horton, Inc.	31,100		338,057
Fortune Brands, Inc.	16,600		717,120
Harman International Industries, Inc.	6,400		225,792
Leggett & Platt, Inc.	18,400		375,360
Lennar Corp. (Class A Stock)	17,200		219,644
Newell Rubbermaid, Inc.	32,914		494,039
Pulte Homes, Inc.(b)	35,522		355,220
Whirlpool Corp.(b)	7,926		639,311
			3,811,870
Household Products — 1.3%
Clorox Co.(b)	15,200		927,200
Colgate-Palmolive Co.	53,000		4,353,950
Kimberly-Clark Corp.	43,500		2,771,385

SEE NOTES TO FINANCIAL STATEMENTS.

A3

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Household Products (continued)
Procter & Gamble Co. (The)	312,225	$	18,930,202
			26,982,737
Independent Power Producers & Energy Traders — 0.1%
AES Corp. (The)(a)	74,500		991,595
Constellation Energy Group, Inc.	21,200		745,604
			1,737,199
Industrial Conglomerates — 1.1%
3M Co.	75,600		6,249,852
General Electric Co.	1,131,000		17,112,030
Textron, Inc.	26,300		494,703
			23,856,585
Insurance — 1.1%
Aflac, Inc.	50,800		2,349,500
Allstate Corp. (The)	58,300		1,751,332
American International Group, Inc.(a)(b)	15,339		459,863
AON Corp.	30,100		1,154,034
Assurant, Inc.	15,600		459,888
Chubb Corp.	38,300		1,883,594
Cincinnati Financial Corp.	19,737		517,899
Genworth Financial, Inc. (Class A Stock)(a)	51,200		581,120
Hartford Financial Services Group, Inc.	41,000		953,660
Lincoln National Corp.	32,018		796,608
Loews Corp.	39,275		1,427,646
Marsh & McLennan Cos., Inc.	56,800		1,254,144
MetLife, Inc.	89,000		3,146,150
Principal Financial Group, Inc.	35,800		860,632
Progressive Corp. (The)(a)	74,100		1,333,059
Torchmark Corp.	10,000		439,500
Travelers Cos., Inc. (The)	61,135		3,048,191
Unum Group	39,010		761,475
XL Capital Ltd. (Class A Stock)	42,200		773,526
			23,951,821
Internet & Catalog Retail — 0.3%
Amazon.com, Inc.(a)	35,600		4,788,912
Expedia, Inc.(a)	23,300		599,043
priceline.com, Inc.(a)	4,200		917,700
			6,305,655
Internet Software & Services — 1.0%
Akamai Technologies, Inc.(a)(b)	18,300		463,539
eBay, Inc.(a)	119,300		2,808,322
Google, Inc. (Class A Stock)(a)	25,750		15,964,485
Verisign, Inc.(a)(b)	19,800		479,952
Yahoo!, Inc.(a)	128,000		2,147,840
			21,864,138
IT Services — 0.8%
Affiliated Computer Services, Inc. (Class A Stock)(a)	9,800		584,962
Automatic Data Processing, Inc.	53,400		2,286,588
Cognizant Technology Solutions Corp. (Class A Stock)(a)	30,200		1,368,060
Computer Sciences Corp.(a)	16,400		943,492

COMMON STOCKS (continued)	Shares	Value (Note 2)
IT Services (continued)
Fidelity National Information Services, Inc.	34,000	$	796,960
Fiserv, Inc.(a)	17,000		824,160
Mastercard, Inc. (Class A Stock)	10,100		2,585,398
Paychex, Inc.	33,100		1,014,184
SAIC, Inc.(a)	22,700		429,938
Total System Services, Inc.	19,096		329,788
Visa, Inc. (Class A Stock)	46,600		4,075,636
Western Union Co. (The)	76,010		1,432,788
			16,671,954
Leisure Equipment & Products — 0.1%
Eastman Kodak Co.(a)(b)	20,000		84,400
Hasbro, Inc.	12,200		391,132
Mattel, Inc.	38,251		764,255
			1,239,787
Life Sciences Tools & Services — 0.2%
Life Technologies Corp.(a)(b)	18,201		950,638
Millipore Corp.(a)	6,100		441,335
PerkinElmer, Inc.	12,600		259,434
Thermo Fisher Scientific, Inc.(a)	45,900		2,188,971
Waters Corp.(a)(b)	11,100		687,756
			4,528,134
Machinery — 0.8%
Caterpillar, Inc.(b)	65,900		3,755,641
Cummins, Inc.	22,400		1,027,264
Danaher Corp.	27,700		2,083,040
Deere & Co.	45,300		2,450,277
Dover Corp.	19,800		823,878
Eaton Corp.	18,400		1,170,608
Flowserve Corp.	6,500		614,445
Illinois Tool Works, Inc.	40,600		1,948,394
PACCAR, Inc.	36,943		1,339,923
Pall Corp.	12,000		434,400
Parker Hannifin Corp.	17,265		930,238
Snap-On, Inc.	7,000		295,820
Stanley Works (The)(b)	8,100		417,231
			17,291,159
Media — 1.4%
CBS Corp. (Class B Stock)	73,734		1,035,963
Comcast Corp. (Class A Stock)	308,690		5,204,513
DIRECTV (Class A Stock)(a)	98,300		3,278,305
Gannett Co., Inc.	22,500		334,125
Interpublic Group of Cos., Inc.(a)	49,500		365,310
McGraw-Hill Cos., Inc. (The)	34,600		1,159,446
Meredith Corp.	4,000		123,400
New York Times Co. (The) (Class A Stock)(a)	10,000		123,600
News Corp. (Class A Stock)(b)	241,100		3,300,659
Omnicom Group, Inc.	32,200		1,260,630
Scripps Networks Interactive, Inc. (Class A Stock)	9,600		398,400
Time Warner Cable, Inc.	37,314		1,544,427
Time Warner, Inc.	126,766		3,693,961
Viacom, Inc. (Class B Stock)(a)	65,934		1,960,218
Walt Disney Co. (The)	198,400		6,398,400

SEE NOTES TO FINANCIAL STATEMENTS.

A4

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Media (continued)
Washington Post Co. (The) (Class B Stock)	600	$	263,760
			30,445,117
Metals & Mining — 0.5%
AK Steel Holding Corp.	11,900		254,065
Alcoa, Inc.	102,240		1,648,109
Allegheny Technologies, Inc.	10,200		456,654
Cliffs Natural Resources, Inc.	10,000		460,900
Freeport-McMoRan Copper & Gold, Inc.(a)	44,794		3,596,510
Newmont Mining Corp.	52,800		2,497,968
Nucor Corp.	34,000		1,586,100
Titanium Metals Corp.(a)	4,000		50,080
United States Steel Corp.	15,600		859,872
			11,410,258
Multiline Retail — 0.4%
Big Lots, Inc.(a)(b)	9,200		266,616
Family Dollar Stores, Inc.	14,300		397,969
J.C. Penney Co., Inc.	23,800		633,318
Kohl’s Corp.(a)	31,900		1,720,367
Macy’s, Inc.	44,874		752,088
Nordstrom, Inc.(b)	15,800		593,764
Sears Holdings Corp.(a)(b)	5,042		420,755
Target Corp.	80,000		3,869,600
			8,654,477
Multi-Utilities — 0.7%
Ameren Corp.	24,500		684,775
CenterPoint Energy, Inc.	41,800		606,518
CMS Energy Corp.(b)	28,800		451,008
Consolidated Edison, Inc.	29,100		1,322,013
Dominion Resources, Inc.	62,932		2,449,313
DTE Energy Co.	16,600		723,594
Integrys Energy Group, Inc.	8,120		340,959
NiSource, Inc.	28,000		430,640
PG&E Corp.	38,600		1,723,490
Public Service Enterprise Group, Inc.	53,400		1,775,550
SCANA Corp.	11,300		425,784
Sempra Energy	25,619		1,434,152
TECO Energy, Inc.	20,500		332,510
Wisconsin Energy Corp.	12,300		612,909
Xcel Energy, Inc.	49,310		1,046,358
			14,359,573
Office Electronics
Xerox Corp.	97,300		823,158
Oil, Gas & Consumable Fuels — 4.8%
Anadarko Petroleum Corp.	52,654		3,286,663
Apache Corp.	36,014		3,715,564
Cabot Oil & Gas Corp.	11,500		501,285
Chesapeake Energy Corp.	68,300		1,767,604
Chevron Corp.	214,922		16,546,845
ConocoPhillips	159,177		8,129,169
Consol Energy, Inc.	18,600		926,280
Denbury Resources, Inc.(a)(b)	25,500		377,400
Devon Energy Corp.	48,300		3,550,050
El Paso Corp.	75,136		738,587

COMMON STOCKS (continued)	Shares	Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
EOG Resources, Inc.	27,200	$	2,646,560
Exxon Mobil Corp.	506,940		34,568,238
Hess Corp.	30,900		1,869,450
Marathon Oil Corp.	76,982		2,403,378
Massey Energy Co.	8,800		369,688
Murphy Oil Corp.	19,900		1,078,580
Noble Energy, Inc.	18,600		1,324,692
Occidental Petroleum Corp.	86,200		7,012,370
Peabody Energy Corp.	27,900		1,261,359
Pioneer Natural Resources Co.	11,000		529,870
Range Resources Corp.	16,900		842,465
Southwestern Energy Co.(a)	37,000		1,783,400
Spectra Energy Corp.	70,962		1,455,431
Sunoco, Inc.	10,300		268,830
Tesoro Corp.(b)	15,000		203,250
Valero Energy Corp.	61,400		1,028,450
Williams Cos., Inc. (The)	63,600		1,340,688
XTO Energy, Inc.	62,241		2,896,074
			102,422,220
Paper & Forest Products — 0.1%
International Paper Co.	46,973		1,257,937
MeadWestvaco Corp.	16,514		472,796
Weyerhaeuser Co.	23,000		992,220
			2,722,953
Personal Products — 0.1%
Avon Products, Inc.	45,700		1,439,550
Estee Lauder Cos., Inc. (The) (Class A Stock)	12,500		604,500
Mead Johnson Nutrition Co. (Class A Stock)	17,867		780,788
			2,824,838
Pharmaceuticals — 3.2%
Abbott Laboratories	166,100		8,967,739
Allergan, Inc.	33,500		2,110,835
Bristol-Myers Squibb Co.(b)	186,270		4,703,317
Eli Lilly & Co.	107,100		3,824,541
Forest Laboratories, Inc.(a)	31,100		998,621
Johnson & Johnson	295,348		19,023,365
King Pharmaceuticals, Inc.(a)	23,866		292,836
Merck & Co., Inc.	327,333		11,960,748
Mylan, Inc.(a)(b)	30,900		569,487
Pfizer, Inc.	864,670		15,728,347
Watson Pharmaceuticals, Inc.(a)(b)	12,400		491,164
			68,671,000
Professional Services — 0.1%
Dun & Bradstreet Corp.	5,800		489,346
Equifax, Inc.	12,700		392,303
Monster Worldwide, Inc.(a)	16,200		281,880
Robert Half International, Inc.(b)	15,700		419,661
			1,583,190
Real Estate Investment Trusts — 0.6%
Apartment Investment & Management Co. (Class A Stock)	15,633		248,877
AvalonBay Communities, Inc.(b)	9,675		794,414
Boston Properties, Inc.	15,100		1,012,757

SEE NOTES TO FINANCIAL STATEMENTS.

A5

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Real Estate Investment Trusts (continued)
Equity Residential(b)	31,000	$	1,047,180
HCP, Inc.	31,500		962,010
Health Care REIT, Inc.	13,300		589,456
Host Hotels & Resorts, Inc.(b)	66,782		779,346
Kimco Realty Corp.(b)	39,000		527,670
Plum Creek Timber Co., Inc.(b)	19,400		732,544
ProLogis(b)	48,600		665,334
Public Storage	14,400		1,172,880
Simon Property Group, Inc.(b)	30,643		2,445,311
Ventas, Inc.	17,200		752,328
Vornado Realty Trust(b)	18,025		1,260,669
			12,990,776
Real Estate Management & Development
CB Richard Ellis Group, Inc. (Class A Stock)(a)(b)	28,100		381,317
Road & Rail — 0.5%
Burlington Northern Santa Fe Corp.	28,200		2,781,084
CSX Corp.	42,600		2,065,674
Norfolk Southern Corp.	38,500		2,018,170
Ryder System, Inc.	4,900		201,733
Union Pacific Corp.	53,200		3,399,480
			10,466,141
Semiconductors & Semiconductor Equipment — 1.3%
Advanced Micro Devices, Inc.(a)	68,800		665,984
Altera Corp.(b)	30,800		697,004
Analog Devices, Inc.	29,700		937,926
Applied Materials, Inc.	145,000		2,021,300
Broadcom Corp. (Class A Stock)(a)	46,450		1,460,853
Intel Corp.	596,100		12,160,440
KLA-Tencor Corp.	19,100		690,656
Linear Technology Corp.	23,300		711,582
LSI Corp.(a)	72,800		437,528
MEMC Electronic Materials, Inc.(a)(b)	25,400		345,948
Microchip Technology, Inc.	19,700		572,482
Micron Technology, Inc.(a)(b)	89,600		946,176
National Semiconductor Corp.	21,700		333,312
Novellus Systems, Inc.(a)	10,400		242,736
NVIDIA Corp.(a)(b)	58,450		1,091,846
Teradyne, Inc.(a)(b)	23,500		252,155
Texas Instruments, Inc.	138,000		3,596,280
Xilinx, Inc.(b)	27,900		699,174
			27,863,382
Software — 2.2%
Adobe Systems, Inc.(a)	56,300		2,070,714
Autodesk, Inc.(a)(b)	23,700		602,217
BMC Software, Inc.(a)	19,900		797,990
CA, Inc.	43,364		973,956
Citrix Systems, Inc.(a)(b)	20,500		853,005
Compuware Corp.(a)	21,200		153,276
Electronic Arts, Inc.(a)(b)	33,000		585,750
Intuit, Inc.(a)	35,500		1,090,205
McAfee, Inc.(a)(b)	16,400		665,348
Microsoft Corp.	825,300		25,163,397
Novell, Inc.(a)	35,200		146,080
Oracle Corp.	417,300		10,240,542
Red Hat, Inc.(a)	18,800		580,920

COMMON STOCKS (continued)	Shares	Value (Note 2)
Software (continued)
Salesforce.com, Inc.(a)	10,800	$	796,716
Symantec Corp.(a)	88,978		1,591,816
			46,311,932
Specialty Retail — 1.0%
Abercrombie & Fitch Co. (Class A Stock)	8,700		303,195
AutoNation, Inc.(a)(b)	11,474		219,727
AutoZone, Inc.(a)(b)	3,300		521,631
Bed Bath & Beyond, Inc.(a)(b)	28,800		1,112,544
Best Buy Co., Inc.	35,925		1,417,600
GameStop Corp. (Class A Stock)(a)(b)	19,400		425,636
Gap, Inc. (The)	53,800		1,127,110
Home Depot, Inc. (The)	180,650		5,226,205
Limited Brands, Inc.	31,106		598,479
Lowe’s Cos., Inc.	157,400		3,681,586
Office Depot, Inc.(a)	27,800		179,310
O’Reilly Automotive, Inc.(a)	11,200		426,944
RadioShack Corp.	11,900		232,050
Ross Stores, Inc.	8,300		354,493
Sherwin-Williams Co. (The)(b)	10,300		634,995
Staples, Inc.	77,849		1,914,307
Tiffany & Co.	14,400		619,200
TJX Cos., Inc.	45,000		1,644,750
			20,639,762
Textiles, Apparel & Luxury Goods — 0.2%
Coach, Inc.	35,500		1,296,815
NIKE, Inc. (Class B Stock)	41,700		2,755,119
Polo Ralph Lauren Corp. (Class A Stock)	6,500		526,370
VF Corp.	9,200		673,808
			5,252,112
Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.(b)	58,500		803,205
People’s United Financial, Inc.	42,300		706,410
			1,509,615
Tobacco — 0.8%
Altria Group, Inc.	219,500		4,308,785
Lorillard, Inc.	17,047		1,367,681
Philip Morris International, Inc.	205,300		9,893,407
Reynolds American, Inc.	17,800		942,866
			16,512,739
Trading Companies & Distributors — 0.1%
Fastenal Co.(b)	14,700		612,108
W.W. Grainger, Inc.	6,900		668,127
			1,280,235
Wireless Telecommunication Services — 0.1%
American Tower Corp. (Class A Stock)(a)	43,100		1,862,351
MetroPCS Communications, Inc.(a)	26,000		198,380
Sprint Nextel Corp.(a)	312,277		1,142,934
			3,203,665
	��
TOTAL COMMON STOCKS (cost $824,429,851)			1,058,711,645

SEE NOTES TO FINANCIAL STATEMENTS.

A6

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

ASSET-BACKED SECURITIES — 0.7%	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
ARES CLO Funds (Cayman Islands), Ser. 2003-7AW, Class A1A, 144A(d)	A2	0.625%	05/08/15	$	2,460	$	2,318,943
Ballyrock CDO Ltd. (Cayman Islands), Ser. 2003-2A, Class A, 144A(d)	Aa2	0.799%	11/20/15		2,771		2,577,114
Bank of America Credit Card Trust, Ser. 2006-C5, Class C5(d)	Baa1	0.633%	01/15/16		4,159		3,584,655
Chatham Light CLO Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(d)	Aa1	0.531%	08/03/19		495		450,560
Citibank Credit Card Issuance Trust, Ser. 2006-C1, Class C1(d)	Baa2	0.633%	02/20/15		1,500		1,371,253
Granite Ventures Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(d)	Aaa	0.544%	12/15/17		3,200		2,992,000
Mountain Capital CLO Ltd. (Cayman Islands), Ser. 2004-3A, Class A1LA, 144A(d)	Aaa	0.688%	02/15/16		2,336		2,219,029
SVO VOI Mortgage Corp., Ser. 2005-AA, Class A, 144A	Aaa	5.250%	02/20/21		477		440,041
TOTAL ASSET-BACKED SECURITIES (cost $16,652,160)							15,953,595
BANK LOANS — 0.7%
Automotive
Oshkosh Truck Corp.(d)(e)	B2	6.269%	12/06/13		211		210,446
Cable
Insight Midwest Holding LLC(d)(e)	B1	1.790%	10/06/13		1,005		943,627
Consumer
Pilot Travel Centers LLC(d)(e)	Ba2	TBA	12/31/15		300		301,197
Electric — 0.1%
NRG Energy(d)(e)	Baa3	0.151%	02/01/13		177		168,299
NRG Energy(d)(e)	Baa3	1.996%	02/01/13		301		285,544
Texas Competitive Electric Holdings Co. LLC(d)(e)	B1	3.735%	10/10/14		978		794,219
							1,248,062
Healthcare & Pharmaceutical — 0.3%
DaVita, Inc.(d)(e)	Ba1	1.748%	10/05/12		1,200		1,161,667
HCA, Inc.(d)(e)	Ba3	2.501%	11/18/13		1,481		1,412,592
Health Management Associates, Inc. Term B(d)(e)	B1	2.001%	02/28/14		1,104		1,026,794
Warner Chilcott Corp.(d)(e)	B1	5.500%	10/30/14		979		979,572
Warner Chilcott Corp.(d)(e)	B1	5.750%	04/30/15		1,077		1,077,530
Warner Chilcott Corp.(d)(e)	B1	5.750%	04/30/15		489		489,786
							6,147,941
Media & Entertainment — 0.1%
Discovery Communications, Inc.(d)(e)	Baa3	5.250%	05/14/14		953		960,541
Paper
Domtar, Inc.(d)(e)	Baa3	1.608%	03/05/14		523		507,854
Pipelines & Other
Enterprise GP Holdings LP(d)(e)	Ba2	2.514%	11/08/14		980		934,675
Technology — 0.2%
Fidelity National Information Services, Inc.(d)(e)	Ba1	4.481%	01/18/12		119		118,711
First Data Corp.(d)(e)	B1	2.983%	09/24/14		1,075		952,492
First Data Corp.(d)(e)	B1	2.999%	09/24/14		1,466		1,296,715
Flextronics International Ltd. (Singapore)(d)(e)	Ba1	2.514%	10/01/14		759		701,727
Flextronics International Ltd. (Singapore)(d)(e)	Ba1	2.534%	10/01/14		218		201,646
Sensata Technologies (Netherlands)(d)(e)	B2	2.031%	04/27/13		335		297,216
							3,568,507
TOTAL BANK LOANS (cost $15,512,638)							14,822,850
COLLATERALIZED MORTGAGE OBLIGATIONS — 0.5%
Banc of America Alternative Loan Trust, Ser. 2005-12, Class 3CB1	B3	6.000%	01/25/36		3,139		2,382,756
Banc of America Mortgage Securities, Inc., Ser. 2005-A, Class 2A1(d)	Ba1	4.439%	02/25/35		848		651,136

SEE NOTES TO FINANCIAL STATEMENTS.

A7

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COLLATERALIZED MORTGAGE OBLIGATIONS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Banc of America Mortgage Securities, Inc., Ser. 2005-B, Class 2A1(d)	Ba2	4.375%	03/25/35	$	834	$	660,569
Chase Mortgage Finance Corp., Ser. 2007-A1, Class 1A5(d)	Ba2	3.899%	02/25/37		2,347		2,168,044
Countrywide Alternative Loan Trust, Ser. 2004-18CB, Class 3A1	A1	5.250%	09/25/19		1,289		1,247,205
JPMorgan Mortgage Trust, Ser. 2007-A1, Class 4A1(d)	B1	4.067%	07/25/35		1,483		1,333,000
Master Alternative Loans Trust, Ser. 2004-4, Class 4A1	Aaa	5.000%	04/25/19		351		331,413
Structured Adjustable Rate Mortgage Loan Trust, Ser. 2004-1, Class 4A3(d)	A1	3.586%	02/25/34		822		680,196
Washington Mutual Alternative Mortgage Pass-Thru Certificates, Ser. 2005-1, Class 3A	AAA(f)	5.000%	03/25/20		841		644,645
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $11,907,535)							10,098,964
COMMERCIAL MORTGAGE-BACKED SECURITIES — 4.8%
Banc of America Commercial Mortgage, Inc., Ser. 2004-2, Class A4	Aaa	4.153%	11/10/38		3,680		3,666,890
Banc of America Commercial Mortgage, Inc., Ser. 2005-1, Class ASB(d)	AAA(f)	4.965%	11/10/42		834		856,127
Banc of America Commercial Mortgage, Inc., Ser. 2006-4, Class A3A	Aaa	5.600%	07/10/46		2,000		2,031,327
Banc of America Commercial Mortgage, Inc., Ser. 2007-3, Class A2(d)	Aaa	5.658%	06/10/49		5,730		5,829,967
Bear Stearns Commercial Mortgage Securities, Ser. 2005-T18, Class AAB(d)	Aaa	4.823%	02/13/42		2,250		2,271,335
Bear Stearns Commercial Mortgage Securities, Ser. 2005-T20, Class AAB(d)	Aaa	5.133%	10/12/42		3,000		3,076,364
Bear Stearns Commercial Mortgage Securities, Ser. 2006-PW11, Class A4(d)	AAA(f)	5.456%	03/11/39		1,200		1,172,916
Commercial Mortgage Acceptance Corp., Ser. 1998-C2, Class F, 144A(d)	A-(f)	5.440%	09/15/30		890		847,827
Commercial Mortgage Loan Trust, Ser. 2008-LS1, Class A2(d)	Aaa	6.019%	12/10/49		2,100		2,154,120
Commercial Mortgage Pass-Thru Certificates, Ser. 2006-C7, Class A4(d)	AAA(f)	5.768%	06/10/46		4,000		3,922,356
Commercial Mortgage Pass-Thru Certificate, Ser. 2004-LB2A, Class X2, I/O, 144A(d)	AAA(f)	0.862%	03/10/39		10,893		97,658
Commercial Mortgage Pass-Thru Certificate, Ser. 2006-C8, Class A2B	Aaa	5.248%	12/10/46		3,740		3,755,383
Credit Suisse Mortgage Capital Certificates, Ser. 2006-C1, Class A4(d)	AAA(f)	5.548%	02/15/39		4,330		4,265,238
CS First Boston Mortgage Securities Corp., Ser. 2004-C4, Class A4	Aaa	4.283%	10/15/39		1,500		1,501,399
CS First Boston Mortgage Securities Corp., Ser. 2005-C5, Class A4(d)	AAA(f)	5.100%	08/15/38		3,000		2,890,196
CW Capital Cobalt Ltd., Ser. 2007-C3, Class A3(d)	AAA(f)	5.820%	05/15/46		2,100		2,033,124
DLJ Commercial Mortgage Corp., Ser. 2000-CF1, Class A1B	AAA(f)	7.620%	06/10/33		674		675,487
GE Commercial Mortgage Corp., Ser. 2004-C2, Class X2, I/O, 144A(d)	Aaa	0.598%	03/10/40		20,836		148,871
GMAC Commercial Mortgage Securities, Inc., Ser. 2005-C1, Class A5	AAA(f)	4.697%	05/10/43		2,610		2,546,133
Greenwich Capital Commercial Funding Corp., Ser. 2005-GG5, Class A5(d)	Aaa	5.224%	04/10/37		1,400		1,326,094
Greenwich Capital Commercial Funding Corp., Ser. 2007-GG9, Class A2	Aaa	5.381%	03/10/39		4,000		4,052,193
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP1, Class ASB(d)	Aaa	4.853%	03/15/46		3,571		3,628,680
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP2, Class ASB	Aaa	4.659%	07/15/42		6,380		6,446,264
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP5, Class A4(d)	Aaa	5.179%	12/15/44		3,630		3,593,597
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-CB16, Class ASB	Aaa	5.523%	05/12/45		2,000		1,979,266
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP6, Class A4(d)	Aaa	5.475%	04/15/43		2,436		2,343,960

SEE NOTES TO FINANCIAL STATEMENTS.

A8

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†		Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP6, Class X2, I/O(d)	Aaa	��	0.066%	04/15/43	$	131,659	$	388,025
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD11, Class A2(d)	Aaa		5.803%	06/15/49		2,000		2,053,856
LB-UBS Commercial Mortgage Trust, Ser. 2004-C6, Class A5(d)	AAA(f)		4.826%	08/15/29		5,000		4,771,222
LB-UBS Commercial Mortgage Trust, Ser. 2005-C3, Class A5	Aaa		4.739%	07/15/30		695		672,340
LB-UBS Commercial Mortgage Trust, Ser. 2006-C6, Class AAB	Aaa		5.341%	09/15/39		4,280		4,219,426
Merrill Lynch Mortgage Trust, Ser. 2004-KEY2, Class A3	Aaa		4.615%	08/12/39		1,900		1,867,012
Merrill Lynch Mortgage Trust, Ser. 2006-C1, Class A4(d)	AAA(f)		5.656%	05/12/39		3,400		3,322,772
Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2006-2, Class A4(d)	Aaa		5.909%	06/12/46		2,210		2,169,588
Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2007-5, Class A3	Aaa		5.364%	08/12/48		440		405,514
Morgan Stanley Capital I, Ser. 2006-IQ11, Class A4(d)	AAA(f)		5.770%	10/15/42		2,600		2,572,110
Morgan Stanley Capital I, Ser. 2007-HQ11, Class AAB	Aaa		5.444%	02/12/44		4,400		4,249,671
Morgan Stanley Capital I, Ser. 2007-T27, Class AAB(d)	AAA(f)		5.650%	06/11/42		1,040		1,037,485
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C25, Class A3(d)	Aaa		5.705%	05/15/43		2,000		2,012,176
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C25, Class A4(d)	Aaa		5.740%	05/15/43		5,188		5,111,173
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $98,363,723)								101,965,142
CORPORATE BONDS — 13.5%
Aerospace & Defense — 0.2%
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2		4.750%	08/15/10		2,000		2,030,348
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2		6.375%	06/01/19		600		645,401
Boeing Capital Corp., Sr. Unsec’d. Notes	A2		6.100%	03/01/11		975		1,030,604
Goodrich Corp., Sr. Unsec’d. Notes	Baa2		6.800%	07/01/36		711		762,265
								4,468,618
Airlines — 0.2%
American Airlines Pass-Through Trust 2001-01, Pass-Thru Certs., Ser. 01-1	B2		6.817%	05/23/11		2,420		2,323,200
Continental Airlines, Inc., Pass-Thru Certs., Ser. 981A	Baa2		6.648%	09/15/17		245		236,752
Continental Airlines, Inc., Pass-Thru Certs., Ser. 01A1(e)	Baa2		6.703%	06/15/21		142		131,982
Continental Airlines, Inc., Pass-Thru Certs., Ser. A(b)	Baa2		7.250%	11/10/19		725		737,687
Delta Air Lines, Inc., Pass-thru Certs., Ser. 071A	Baa1		6.821%	08/10/22		438		417,981
Southwest Airlines Co., Sr. Unsec’d. Notes	Baa3		6.500%	03/01/12		965		1,026,828
								4,874,430
Automotive
Harley-Davidson Funding Corp., Gtd. Notes, 144A, MTN	Baa1		5.750%	12/15/14		495		502,558
Johnson Controls, Inc., Sr. Unsec’d. Notes	Baa2		5.500%	01/15/16		235		239,012
								741,570
Banking — 2.7%
American Express Co., Sr. Unsec’d. Notes	A3		8.125%	05/20/19		4,015		4,758,020
Banco Bradesco SA (Cayman Islands), Sub. Notes	A2		8.750%	10/24/13		1,690		1,977,300
Bank of America Corp., Jr. Sub. Notes(d)	Ba3		8.000%	12/29/49		2,100		2,021,754
Bank of America Corp., Sr. Unsec’d. Notes	A2		7.625%	06/01/19		1,400		1,619,586
Bank of America NA, Sub. Notes	A1		5.300%	03/15/17		850		833,076
Bank of America NA, Sub. Notes	A1		6.000%	10/15/36		1,300		1,256,222
Bank One Corp., Sub. Notes	A1		7.875%	08/01/10		2,500		2,606,475
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa3		5.300%	10/30/15		550		581,712
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa3		6.400%	10/02/17		270		294,322
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa3		7.250%	02/01/18		1,135		1,302,813
Capital One Bank Corp., Sub. Notes	A3		6.500%	06/13/13		10		10,750
Capital One Capital V, Gtd. Notes	Baa2		10.250%	08/15/39		555		645,188
Capital One Capital VI, Gtd. Notes	Baa2		8.875%	05/15/40		1,130		1,203,450

SEE NOTES TO FINANCIAL STATEMENTS.

A9

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Banking (continued)
Capital One Financial Corp., Sr. Unsec’d. Notes, MTN	Baa1	5.700%	09/15/11	$	570	$	598,711
Citigroup, Inc., Sub. Notes	Baa1	5.625%	08/27/12		1,900		1,954,281
Citigroup, Inc., Sub. Notes	Baa1	6.125%	08/25/36		725		621,756
Citigroup, Inc., Sr. Unsec’d. Notes	A3	6.875%	03/05/38		790		788,434
Citigroup, Inc., Sr. Unsec’d. Notes(b)	A3	8.125%	07/15/39		415		468,389
Citigroup, Inc., Unsec’d. Notes	A3	8.500%	05/22/19		600		692,852
Countrywide Financial Corp., Gtd. Notes, MTN	A2	5.800%	06/07/12		1,160		1,231,353
DEPFA ACS Bank (Ireland), Covered Notes, 144A	Aa2	5.125%	03/16/37		1,325		973,849
Discover Bank/Greenwood DE, Sub. Notes	Ba1	8.700%	11/18/19		900		964,219
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.450%	11/01/12		580		623,604
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	5.625%	01/15/17		765		781,340
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.450%	05/01/36		1,770		1,743,356
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.750%	10/01/37		113		116,151
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes(b)	A1	7.500%	02/15/19		2,400		2,797,927
ICICI Bank Ltd. (India), Bonds, 144A(d)	Baa2	0.824%	01/12/10		1,880		1,876,302
ICICI Bank Ltd. (Singapore), Notes, 144A	Baa2	5.750%	11/16/10		1,670		1,705,280
JPMorgan Chase & Co., Jr. Sub. Notes, Ser. 1(d)	Baa1	7.900%	04/29/49		2,000		2,062,920
JPMorgan Chase & Co., Sr. Unsec’d. Notes	Aa3	4.600%	01/17/11		175		181,052
JPMorgan Chase Capital XXVI(Capital Security, fixed to floating preferred)	A2	8.000%	05/15/48		28		752,080
JPMorgan Chase Capital XXVII, Gtd. Notes, Ser. AA(b)	A2	7.000%	11/01/39		1,500		1,512,770
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, Ser. C, MTN	A2	4.250%	02/08/10		1,470		1,475,085
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes	A2	4.790%	08/04/10		375		382,750
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, Ser. C, MTN	A2	5.000%	01/15/15		190		193,235
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, MTN	A2	5.770%	07/25/11		355		375,284
Merrill Lynch & Co., Inc., Notes, MTN	A2	6.875%	04/25/18		1,230		1,325,249
Morgan Stanley, Sr. Unsec’d. Notes	A2	5.300%	03/01/13		30		31,620
Morgan Stanley, Sr. Unsec’d. Notes, Ser. E	A2	5.450%	01/09/17		2,530		2,557,111
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.625%	09/23/19		2,110		2,125,424
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.950%	12/28/17		600		618,864
MUFG Capital Finance Corp. Ltd. (Cayman Islands), Gtd. Notes.(d)	A2	6.346%	07/25/49		800		728,117
PNC Funding Corp., Gtd. Notes.(b)	A3	6.700%	06/10/19		885		990,294
Royal Bank of Scotland Group PLC (United Kingdom), Sr. Unsec’d. Notes, MTN	A1	6.400%	10/21/19		1,775		1,769,302
Santander Central Hispano Issuances Ltd. (Cayman Islands), Gtd. Notes.	Aa3	7.625%	09/14/10		805		843,848
USB Capital XIII Trust, Gtd. Notes	A2	6.625%	12/15/39		755		767,337
Wells Fargo Bank NA, Sub. Notes	Aa3	6.450%	02/01/11		90		95,044
Wells Fargo Capital XIII, Gtd. Notes, Ser. G, MTN(d)	Ba1	7.700%	12/29/49		1,000		970,000
							56,805,858
Brokerage
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(h)	NR	5.250%	02/06/12		1,850		360,750
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(h)	NR	6.875%	05/02/18		700		145,250
							506,000
Building Materials & Construction — 0.1%
Hanson Ltd. (United Kingdom), Gtd. Notes(b)	B1	7.875%	09/27/10		1,270		1,316,012
Lafarge SA (France), Sr. Unsec’d. Notes	Baa3	6.150%	07/15/11		1,100		1,146,291
							2,462,303
Cable — 0.5%
Comcast Cable Communications Holdings, Inc., Gtd. Notes	Baa1	9.455%	11/15/22		115		147,907
Comcast Cable Holdings LLC, Sr. Unsec’d. Notes	Baa1	9.875%	06/15/22		1,440		1,754,313
Comcast Corp., Gtd. Notes	Baa1	6.400%	05/15/38		310		318,998
Comcast Corp., Gtd. Notes	Baa1	6.950%	08/15/37		290		316,069
COX Communications, Inc., Sr. Unsec’d. Notes	Baa3	6.750%	03/15/11		1,195		1,256,475
DIRECTV Holdings LLC / DIRECTV Financing Co., Inc., Gtd. Notes, 144A	Ba2	4.750%	10/01/14		1,940		1,977,512

SEE NOTES TO FINANCIAL STATEMENTS.

A10

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Cable (continued)
DISH DBS Corp., Gtd. Notes	Ba3	6.375%	10/01/11	$	1,000	$	1,032,500
Time Warner Cable, Inc., Gtd. Notes	Baa2	5.400%	07/02/12		2,410		2,574,914
Time Warner Cable, Inc., Gtd. Notes(b)	Baa2	6.750%	06/15/39		1,340		1,403,389
							10,782,077
Capital Goods — 0.2%
Erac USA Finance Co., Gtd. Notes, 144A (original cost $459,646; purchased 10/10/07)(e)(i)	Baa2	5.800%	10/15/12		460		482,332
Erac USA Finance Co., Gtd. Notes, 144A (original cost $1,195,904; purchased 10/10/07)(e)(i)	Baa2	6.375%	10/15/17		1,198		1,210,060
Erac USA Finance Co., Gtd. Notes, 144A (original cost $386,623; purchased 10/10/07)(e)(i)	Baa2	7.000%	10/15/37		390		381,735
FedEx Corp., Gtd. Notes	Baa2	7.250%	02/15/11		480		508,389
General Electric Co., Sr. Unsec’d. Notes	Aa2	5.250%	12/06/17		320		326,997
Trane US, Inc., Gtd. Notes(b)	BBB+(f)	7.625%	02/15/10		1,000		1,006,004
United Technologies Corp., Sr. Unsec’d. Notes	A2	5.375%	12/15/17		515		548,809
							4,464,326
Chemicals — 0.3%
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	6.125%	02/01/11		690		719,303
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	7.600%	05/15/14		1,600		1,820,627
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	8.550%	05/15/19		1,000		1,193,145
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	9.400%	05/15/39		40		52,886
ICI Wilmington, Inc., Gtd. Notes	Baa1	5.625%	12/01/13		780		814,118
PPG Industries, Inc., Sr. Unsec’d. Notes	Baa1	5.750%	03/15/13		1,500		1,601,533
Union Carbide Corp., Sr. Unsec’d. Notes	Ba2	7.500%	06/01/25		500		459,719
							6,661,331
Consumer — 0.3%
Avon Products, Inc., Sr. Unsec’d. Notes	A2	5.750%	03/01/18		1,400		1,502,431
Fortune Brands, Inc., Sr. Unsec’d. Notes(b)	Baa3	6.375%	06/15/14		2,190		2,345,391
Newell Rubbermaid, Inc., Sr. Unsec’d. Notes	Baa3	6.250%	04/15/18		1,600		1,580,965
Whirlpool Corp., Sr. Unsec’d. Notes	Baa3	6.125%	06/15/11		1,045		1,086,092
							6,514,879
Electric — 1.2%
Appalachian Power Co., Sr. Unsec’d. Notes, Ser. J	Baa2	4.400%	06/01/10		790		798,840
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2	6.250%	08/01/16		170		179,731
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2	6.375%	10/15/11		1,250		1,338,110
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes	Baa2	6.350%	10/01/36		530		544,395
Carolina Power & Light Co., First Mtge. Bonds	A1	5.250%	12/15/15		660		721,722
CenterPoint Energy Houston Electric LLC, Genl. Ref. Mtge., Ser. J2	Baa1	5.700%	03/15/13		1,070		1,137,349
CenterPoint Energy Houston Electric LLC, Genl. Ref. Mtge., Ser. K2	Baa1	6.950%	03/15/33		300		331,749
Consolidated Edison Co. of NY, Inc., Sr. Unsec’d. Notes, Ser. 05-C	A3	5.375%	12/15/15		820		886,148
Consolidated Edison Co. of NY, Inc., Sr. Unsec’d. Notes, Ser. 08-B(b)	A3	6.750%	04/01/38		130		148,211
Consumers Energy Co., First Mtge. Bonds, Ser. D	A3	5.375%	04/15/13		435		467,075
Duke Energy Carolinas LLC, First Mtge. Bonds	A1	6.050%	04/15/38		530		564,305
Duke Energy Carolinas LLC, Sr. Unsec’d. Notes	A3	6.100%	06/01/37		920		965,270
E.ON International Finance BV (Netherlands), Gtd. Notes, 144A	A2	6.650%	04/30/38		930		1,057,495
El Paso Electric Co., Sr. Unsec’d. Notes	Baa2	6.000%	05/15/35		845		759,902
Empresa Nacional de Electricidad S.A. (Chile), Unsub. Notes	Baa3	8.625%	08/01/15		1,160		1,374,969
ENEL Finance International SA (Luxembourg), Gtd. Notes, 144A	A2	6.000%	10/07/39		1,260		1,266,669
Energy East Corp., Sr. Unsec’d. Notes	A3	6.750%	09/15/33		140		146,075
Exelon Corp., Sr. Unsec’d. Notes	Baa1	4.900%	06/15/15		195		201,162
Exelon Generation Co. LLC, Sr. Unsec’d. Notes	A3	6.250%	10/01/39		1,375		1,400,893
FirstEnergy Solutions Corp., Gtd. Notes	Baa2	6.050%	08/15/21		620		625,460
Florida Power & Light Co., First Mtge. Bonds	Aa2	5.950%	10/01/33		380		397,770
Georgia Power Co., Sr. Unsec’d. Notes, Ser. B	A2	5.700%	06/01/17		470		509,987
Indiana Michigan Power Co., Sr. Unsec’d. Notes, Ser. INDF	Baa2	5.050%	11/15/14		575		596,427

SEE NOTES TO FINANCIAL STATEMENTS.

A11

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Electric (continued)
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A(b)	A2	6.250%	06/17/14	$	1,555	$	1,696,674
Midamerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.750%	04/01/18		210		221,334
Midamerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.950%	05/15/37		325		325,364
Nevada Power Co., Genl. Ref. Mtge., Ser. O	Baa3	6.500%	05/15/18		1,210		1,294,871
Niagara Mohawk Power Corp., Sr. Unsec’d. Notes, 144A	A3	4.881%	08/15/19		545		540,358
NiSource Finance Corp., Gtd. Notes	Baa3	5.450%	09/15/20		500		484,850
NSTAR	A2	4.500%	11/15/19		605		591,634
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes	Baa1	6.375%	01/15/15		465		507,240
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes	Baa1	7.000%	09/01/22		545		605,958
Pacific Gas & Electric Co., Sr. Unsec’d. Notes	A3	6.050%	03/01/34		1,610		1,680,895
Public Service Co. of New Mexico, Sr. Unsec’d. Notes	Baa3	7.950%	05/15/18		135		141,318
Public Service Electric & Gas Co., Sec’d. Notes, MTN	A2	5.800%	05/01/37		515		529,936
Southern California Edison Co., Ser. 04-F	A1	4.650%	04/01/15		610		644,973
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	5.613%	04/01/17		263		271,168
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	6.500%	07/01/36		445		468,777
							26,425,064
Energy – Integrated — 0.2%
Cenovus Energy, Inc. (Canada), Sr. Notes, 144A	Baa2	6.750%	11/15/39		975		1,062,803
Hess Corp., Sr. Unsec’d. Notes	Baa2	6.000%	01/15/40		390		386,196
Husky Energy, Inc. (Canada), Sr. Unsec’d. Notes	Baa2	7.250%	12/15/19		300		346,680
TNK-BP Finance SA (Luxembourg), Gtd. Notes, 144A	Baa2	7.500%	07/18/16		1,365		1,399,125
							3,194,804
Energy – Other — 0.3%
Devon Financing Corp. ULC (Canada), Gtd. Notes	Baa1	7.875%	09/30/31		280		350,815
Dolphin Energy Ltd. (United Arab Emirates), Sr. Sec’d. Notes, 144A	Aa3	5.888%	06/15/19		843		851,915
Halliburton Co., Sr. Unsec’d. Notes	A2	5.500%	10/15/10		200		208,137
Nexen, Inc. (Canada), Sr. Unsec’d. Notes	Baa3	6.400%	05/15/37		195		196,466
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%	05/01/18		1,450		1,434,659
Questar Market Resources, Inc., Sr. Unsec’d. Notes(b)	Baa3	6.800%	03/01/20		735		766,094
Valero Energy Corp., Gtd. Notes	Baa2	6.625%	06/15/37		250		234,583
Weatherford International Ltd. (Bermuda), Gtd. Notes	Baa1	6.500%	08/01/36		25		23,876
Woodside Finance Ltd. (Australia), Gtd. Notes, 144A	Baa1	5.000%	11/15/13		1,660		1,698,271
XTO Energy, Inc., Sr. Unsec’d. Notes	Baa2	6.250%	08/01/17		565		639,770
							6,404,586
Foods — 0.7%
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	5.375%	01/15/20		1,100		1,122,285
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	6.875%	11/15/19		1,100		1,228,022
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	8.000%	11/15/39		1,160		1,444,103
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	8.200%	01/15/39		230		290,835
Bunge Ltd. Finance Corp., Gtd. Notes(b)	Baa2	5.350%	04/15/14		1,000		1,022,270
Bunge Ltd. Finance Corp., Gtd. Notes	Baa2	8.500%	06/15/19		860		980,320
Cargill, Inc., Sr. Unsec’d. Notes, 144A (original cost $646,913; purchased 11/19/07)(e)(i)	A2	6.000%	11/27/17		650		692,792
ConAgra Foods, Inc., Sr. Unsec’d. Notes	Baa2	7.875%	09/15/10		62		64,904
Delhaize America, Inc., Gtd. Notes	Baa3	9.000%	04/15/31		660		844,999
Delhaize Group (Belgium), Gtd. Notes	Baa3	6.500%	06/15/17		460		499,575
General Mills, Inc., Sr. Unsec’d. Notes	Baa1	6.000%	02/15/12		975		1,052,684
H.J. Heinz Finance Co., Gtd. Notes, 144A	Baa2	7.125%	08/01/39		405		457,868
Kroger Co. (The), Gtd. Notes	Baa2	6.750%	04/15/12		215		234,824
Kroger Co. (The), Gtd. Notes	Baa2	6.800%	04/01/11		575		610,586
McDonald’s Corp., Sr. Unsec’d. Notes, MTN	A3	6.300%	03/01/38		1,140		1,257,485
Ralcorp Holdings, Inc., Sr. Notes, 144A	Baa3	6.625%	08/15/39		800		780,194
Tyson Foods, Inc., Gtd. Notes	Ba3	7.850%	04/01/16		785		804,625
Yum! Brands, Inc., Sr. Unsec’d. Notes	Baa3	8.875%	04/15/11		235		254,287
							13,642,658

SEE NOTES TO FINANCIAL STATEMENTS.

A12

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Healthcare & Pharmaceutical — 0.7%
Abbott Laboratories, Sr. Unsec’d. Notes	A1	5.875%	05/15/16	$	1,100	$	1,213,288
AmerisourceBergen Corp., Gtd. Notes	Baa3	5.625%	09/15/12		915		974,249
AstraZeneca PLC (United Kingdom), Sr. Unsec’d. Notes	A1	6.450%	09/15/37		480		540,621
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba1	4.500%	01/15/15		885		886,806
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba1	6.000%	01/15/20		570		582,413
CareFusion Corp., Sr. Unsec’d. Notes, 144A	Baa3	6.375%	08/01/19		320		342,567
Genentech, Inc., Sr. Unsec’d. Notes	AA-(f)	4.750%	07/15/15		270		288,974
GlaxoSmithKline Capital, Inc., Gtd. Notes	A1	6.375%	05/15/38		840		930,616
HCA, Inc., Sec’d. Notes	B2	9.250%	11/15/16		1,925		2,066,969
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes	Baa3	5.625%	12/15/15		560		585,503
Merck & Co., Inc., Gtd. Notes	Aa3	6.000%	09/15/17		842		935,247
Merck & Co., Inc., Gtd. Notes	Aa3	6.550%	09/15/37		330		374,783
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.750%	11/15/36		280		286,957
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.950%	12/01/28		205		216,034
Watson Pharmaceuticals, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	08/15/19		440		453,989
Wyeth, Gtd. Notes	A1	5.500%	03/15/13		1,165		1,266,690
Wyeth, Gtd. Notes	A1	5.950%	04/01/37		1,645		1,715,370
Wyeth, Gtd. Notes	A1	6.450%	02/01/24		60		66,842
							13,727,918
Healthcare Insurance — 0.3%
Aetna, Inc., Sr. Unsec’d. Notes	A3	5.750%	06/15/11		430		450,944
Aetna, Inc., Sr. Unsec’d. Notes	A3	6.625%	06/15/36		480		492,191
CIGNA Corp., Sr. Unsec’d. Notes	Baa2	6.150%	11/15/36		640		571,727
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		1,200		1,146,252
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	5.250%	03/15/11		1,470		1,523,226
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.000%	06/15/17		115		120,355
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.500%	06/15/37		400		394,439
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.625%	11/15/37		410		410,734
WellPoint, Inc., Sr. Unsec’d. Notes(b)	Baa1	5.000%	12/15/14		1,085		1,128,746
WellPoint, Inc., Sr. Unsec’d. Notes	Baa1	5.250%	01/15/16		335		338,156
							6,576,770
Insurance — 0.5%
American International Group, Inc., Sr. Unsec’d. Notes	A3	4.250%	05/15/13		655		605,028
AXA SA (France), Sub. Notes	A3	8.600%	12/15/30		230		267,274
Berkshire Hathaway Finance Corp., Gtd. Notes	Aa2	4.750%	05/15/12		425		453,078
Liberty Mutual Group, Inc., Bonds, 144A	Baa2	7.000%	03/15/34		910		779,726
Lincoln National Corp., Sr. Unsec’d. Notes	Baa2	6.300%	10/09/37		476		435,926
Lincoln National Corp., Sr. Unsec’d. Notes	Baa2	8.750%	07/01/19		505		577,015
Marsh & McLennan Cos., Inc., Sr. Unsec’d. Notes	Baa2	5.150%	09/15/10		335		343,427
MetLife, Inc., Sr. Unsec’d. Notes	A3	5.700%	06/15/35		1,185		1,170,281
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.125%	12/01/11		435		467,637
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.375%	06/15/34		85		90,834
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.750%	06/01/16		270		302,357
New York Life Insurance Co., Sub. Notes, 144A	Aa2	6.750%	11/15/39		650		664,736
Pacific Life Insurance Co., Sub. Notes, 144A (original cost $869,582; purchased 06/16/09)(i)	A3	9.250%	06/15/39		870		1,004,620
Teachers Insurance & Annuity Association of America, Notes, 144A	Aa2	6.850%	12/16/39		1,430		1,478,246
Travelers Cos., Inc. (The), Sr. Unsec’d. Notes	A2	6.750%	06/20/36		740		816,821
W.R. Berkley Corp., Sr. Unsec’d. Notes	Baa2	5.600%	05/15/15		705		697,311
W.R. Berkley Corp., Sr. Unsec’d. Notes	Baa2	6.150%	08/15/19		575		545,791
XL Capital Ltd. (Cayman Islands), Sr. Unsec’d. Notes	Baa2	5.250%	09/15/14		110		107,725
							10,807,833
Lodging — 0.2%
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes(b)	Ba1	6.250%	02/15/13		1,585		1,634,531
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes(b)	Ba1	6.750%	05/15/18		2,700		2,706,750
							4,341,281

SEE NOTES TO FINANCIAL STATEMENTS.

A13

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Media & Entertainment — 0.4%
Gannett Co., Inc., Sr. Unsec’d. Notes	Ba2	6.375%	04/01/12	$	2,500	$	2,500,000
News America, Inc., Gtd. Notes	Baa1	7.625%	11/30/28		1,265		1,351,983
News America, Inc., Gtd. Notes, 144A(b)	Baa1	6.900%	08/15/39		325		354,534
Time Warner, Inc., Gtd. Notes	Baa2	6.750%	04/15/11		725		768,138
Time Warner, Inc., Gtd. Notes	Baa2	7.250%	10/15/17		745		834,342
Time Warner, Inc., Sr. Unsec’d. Notes	Baa2	9.150%	02/01/23		625		754,271
Viacom, Inc., Sr. Unsec’d. Notes(b)	Baa2	6.750%	10/05/37		420		433,304
Viacom, Inc., Sr. Unsec’d. Notes	Baa2	6.875%	04/30/36		620		670,410
							7,666,982
Metals — 0.3%
ArcelorMittal USA Partnership (Canada), Gtd. Notes	Baa3	9.750%	04/01/14		1,720		1,806,000
Newmont Mining Corp., Gtd. Notes	Baa2	6.250%	10/01/39		865		866,034
Rio Tinto Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB+(f)	4.500%	05/15/13		255		261,840
Rio Tinto Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB+(f)	5.000%	06/01/15		755		775,124
Rio Tinto Finance USA Ltd. (Australia), Gtd. Notes	Baa1	5.875%	07/15/13		500		539,518
Southern Copper Corp., Sr. Unsec’d. Notes	Baa3	7.500%	07/27/35		120		118,901
United States Steel Corp., Sr. Unsec’d. Notes	Ba3	5.650%	06/01/13		2,540		2,527,320
							6,894,737
Non Captive Finance — 0.5%
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN(c).	Aa2	5.550%	05/04/20		1,555		1,541,216
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aa2	5.875%	01/14/38		970		898,107
General Electric Capital Corp., Sr. Unsec’d. Notes, Ser. G, MTN(c)	Aa2	6.000%	08/07/19		3,010		3,124,443
HSBC Finance Corp., Sr. Unsec’d. Notes	A3	5.700%	06/01/11		585		611,158
International Lease Finance Corp., Sr. Unsec’d. Notes	B1	6.375%	03/25/13		1,750		1,438,815
SLM Corp., Sr. Unsec’d. Notes, MTN	Ba1	8.450%	06/15/18		2,825		2,787,577
							10,401,316
Packaging
Sealed Air Corp., Sr. Unsec’d. Notes, 144A	Baa3	6.875%	07/15/33		450		423,363
Paper — 0.1%
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.300%	11/15/39		1,080		1,145,730
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.500%	08/15/21		460		515,417
							1,661,147
Pipelines & Other — 0.3%
DCP Midstream LLC, Sr. Unsec’d. Notes	Baa2	7.875%	08/16/10		1,830		1,902,512
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes(b)	Baa2	6.500%	09/01/39		650		655,077
ONEOK Partners LP, Gtd. Notes	Baa2	6.650%	10/01/36		405		413,069
Sempra Energy, Sr. Unsec’d. Notes	Baa1	6.000%	02/01/13		80		85,307
Spectra Energy Capital LLC, Gtd. Notes	Baa2	6.200%	04/15/18		3,310		3,515,266
Spectra Energy Capital LLC, Sr. Unsec’d. Notes	Baa2	6.250%	02/15/13		205		220,418
							6,791,649
Railroads — 0.1%
Burlington Northern Santa Fe Corp., Sr. Unsec’d. Notes	Baa1	6.700%	08/01/28		735		787,815
CSX Corp., Sr. Unsec’d. Notes(b)	Baa3	6.150%	05/01/37		690		699,094
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	5.590%	05/17/25		630		612,441
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	7.800%	05/15/27		24		28,850
Union Pacific Corp., Sr. Unsec’d. Notes	Baa2	6.650%	01/15/11		760		801,627
							2,929,827
Real Estate Investment Trusts — 0.3%
Brandywine Operating Partnership LP, Gtd. Notes	Baa3	5.750%	04/01/12		391		398,545
Mack-Cali Realty LP, Sr. Unsec’d. Notes	Baa2	7.750%	08/15/19		685		708,807
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	5.450%	06/01/12		545		540,774
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	6.300%	06/01/13		650		646,260
Simon Property Group LP, Sr. Unsec’d. Notes	A3	5.750%	05/01/12		1,625		1,707,056
Simon Property Group LP, Sr. Unsec’d. Notes	A3	6.125%	05/30/18		2,700		2,743,168
							6,744,610

SEE NOTES TO FINANCIAL STATEMENTS.

A14

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Retailers — 0.8%
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.750%	08/15/11	$	1,240	$	1,320,445
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.750%	06/01/17		1,580		1,667,554
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	6.125%	09/15/39		725		718,547
GameStop Corp./GameStop, Inc., Gtd. Notes	Ba1	8.000%	10/01/12		980		1,015,525
Home Depot, Inc. (The) Sr. Unsec’d. Notes	Baa1	5.875%	12/16/36		315		304,056
Kohl’s Corp., Sr. Unsec’d. Notes	Baa1	6.875%	12/15/37		1,000		1,134,152
Lowe’s Cos., Inc., Sr. Unsec’d. Notes	A1	6.500%	03/15/29		345		379,391
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.350%	03/15/12		330		337,013
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.875%	01/15/13		2,000		2,055,000
Nordstrom, Inc., Sr. Unsec’d. Notes(b)	Baa2	6.250%	01/15/18		4,500		4,871,115
Target Corp., Sr. Unsec’d. Notes	A2	7.000%	01/15/38		1,655		1,930,968
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	5.250%	09/01/35		235		231,080
							15,964,846
Technology — 0.5%
Cisco Systems, Inc., Sr. Unsec’d. Notes	A1	4.450%	01/15/20		1,665		1,633,338
Computer Sciences Corp., Sr. Unsec’d. Notes, Ser. WI	Baa1	6.500%	03/15/18		1,700		1,855,207
Electronic Data Systems Corp., Sr. Unsec’d. Notes	A2	7.450%	10/15/29		120		141,996
Fiserv, Inc., Gtd. Notes	Baa2	6.125%	11/20/12		960		1,045,316
Intuit, Inc., Sr. Unsec’d. Notes	Baa2	5.400%	03/15/12		575		610,882
Motorola, Inc., Sr. Unsec’d. Notes	Baa3	8.000%	11/01/11		48		51,335
Oracle Corp., Sr. Unsec’d. Notes(b)	A2	6.125%	07/08/39		1,085		1,139,288
Seagate Technology HDD Holdings (Cayman Islands), Gtd. Notes	Ba3	6.375%	10/01/11		985		1,002,238
Xerox Corp., Sr. Unsec’d. Notes(b)	Baa2	4.250%	02/15/15		2,650		2,631,527
							10,111,127
Telecommunications — 1.3%
America Movil SAB de CV (Mexico), Gtd. Notes(b)	A3	6.375%	03/01/35		630		650,341
AT&T Corp., Gtd. Notes	A2	8.000%	11/15/31		505		616,362
AT&T, Inc., Sr. Unsec’d. Notes	A2	5.300%	11/15/10		1,180		1,226,661
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec’d. Notes	A2	8.500%	11/15/18		2,400		2,976,917
Deutsche Telekom International Finance BV (Netherlands), Gtd. Notes	Baa1	8.750%	06/15/30		345		443,708
Embarq Corp., Sr. Unsec’d. Notes (original cost $349,979; purchased date 05/12/06)(e)(i)	Baa3	7.082%	06/01/16		350		386,602
Embarq Corp., Sr. Unsec’d. Notes (original cost $1,667,844; purchased date 05/12/06-04/01/07)(e)(i)	Baa3	7.995%	06/01/36		1,645		1,769,523
France Telecom SA (France), Sr. Unsec’d. Notes	A3	8.500%	03/01/31		360		479,093
Koninklijke (Royal) KPN NV (Netherlands), Sr. Unsec’d. Notes	Baa2	8.000%	10/01/10		645		677,250
New Cingular Wireless Services, Inc., Gtd. Notes	A2	8.125%	05/01/12		800		903,946
New Cingular Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.750%	03/01/31		1,235		1,596,002
PCCW HKT Capital Ltd. (U.S. Virgin Islands), Gtd. Notes, 144A	Baa2	8.000%	11/15/11		2,275		2,452,222
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.250%	02/15/11		720		730,800
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.875%	03/15/12		2,000		2,150,000
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	5.250%	11/15/13		170		178,804
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	7.175%	06/18/19		3,405		3,796,109
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	5.877%	07/15/19		640		685,971
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	7.045%	06/20/36		210		239,799
Telefonos de Mexico SAB de CV (Mexico), Sr. Unsec’d. Notes, 144A(b)	A3	5.500%	11/15/19		255		248,309
TELUS Corp. (Canada), Sr. Unsec’d. Notes	Baa1	8.000%	06/01/11		1,041		1,126,990
US Cellular Corp., Sr. Unsec’d. Notes	Baa2	6.700%	12/15/33		255		250,779
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	6.100%	04/15/18		3,500		3,804,181
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	6.400%	02/15/38		105		109,768
Vodafone Group PLC (United Kingdom), Sr. Unsec’d. Notes	Baa1	7.750%	02/15/10		950		957,581
							28,457,718

SEE NOTES TO FINANCIAL STATEMENTS.

A15

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Tobacco — 0.3%
Altria Group, Inc., Gtd. Notes	Baa1	9.250%	08/06/19	$	1,995	$	2,431,163
Altria Group, Inc., Gtd. Notes(b)	Baa1	9.700%	11/10/18		900		1,112,550
Altria Group, Inc., Gtd. Notes	Baa1	9.950%	11/10/38		130		169,456
Altria Group, Inc., Gtd. Notes	Baa1	10.200%	02/06/39		850		1,133,932
Lorillard Tobacco Co., Sr. Unsec’d. Notes(b)	Baa2	8.125%	06/23/19		670		736,589
Philip Morris International, Inc., Sr. Unsec’d. Notes	A2	4.875%	05/16/13		830		876,195
Reynolds American, Inc., Gtd. Notes	Baa3	7.250%	06/15/37		285		287,017
							6,746,902
TOTAL CORPORATE BONDS (cost $279,108,374)							288,196,530
FOREIGN AGENCIES — 0.4%
Commonwealth Bank of Australia (Australia), 144A	Aaa	2.700%	11/25/14		7,220		7,076,040
Pemex Project Funding Master Trust, Gtd. Notes	Baa1	8.625%	12/01/23		350		422,625
RSHB Capital SA For OJSC Russian Agricultural Bank (Luxembourg), Sr. Sec’d. Notes, 144A	Baa1	6.299%	05/15/17		2,100		2,114,700
TOTAL FOREIGN AGENCIES (cost $9,724,479)							9,613,365
FOREIGN LOCAL GOVERNMENT
Qatar Government International Bond (Qatar), 144A (cost $728,430)(b)	Aa2	6.400%	01/20/40		730		733,650
MORTGAGE-BACKED SECURITIES — 13.7%
Federal Home Loan Mortgage Corp.		4.500%	02/01/19-07/01/20		5,097		5,293,808
Federal Home Loan Mortgage Corp.		4.500%	TBA 15 YR		1,400		1,438,500
Federal Home Loan Mortgage Corp.		4.500%	TBA 30 YR		2,000		1,995,000
Federal Home Loan Mortgage Corp.		5.000%	07/01/18-05/01/34		9,584		10,016,475
Federal Home Loan Mortgage Corp.		5.000%	TBA 30 YR		8,000		8,202,496
Federal Home Loan Mortgage Corp.(d)		5.214%	12/01/35		2,570		2,703,669
Federal Home Loan Mortgage Corp.		5.500%	12/01/33-05/01/38		10,718		11,267,331
Federal Home Loan Mortgage Corp.(d)		5.548%	06/01/36		1,980		2,086,992
Federal Home Loan Mortgage Corp.		6.000%	03/01/32-12/01/33		2,266		2,436,973
Federal Home Loan Mortgage Corp.		6.500%	12/01/14-09/01/16		257		276,185
Federal Home Loan Mortgage Corp.		7.000%	05/01/31-09/01/33		3,987		4,390,792
Federal Home Loan Mortgage Corp.		5.500%	TBA 30 YR		13,500		14,141,250
Federal National Mortgage Association(d)		3.233%	07/01/33		903		930,416
Federal National Mortgage Association		4.000%	06/01/19		1,828		1,868,235
Federal National Mortgage Association		4.000%	TBA 15 YR		7,000		7,016,408
Federal National Mortgage Association		4.500%	11/01/18-01/01/35		11,780		12,073,425
Federal National Mortgage Association		4.500%	TBA 30 YR		16,000		15,970,000
Federal National Mortgage Association		5.000%	10/01/18-05/01/36		14,879		15,363,504
Federal National Mortgage Association		5.000%	TBA 30 YR		9,500		9,747,893
Federal National Mortgage Association		5.500%	03/01/16-01/01/38		46,713		49,118,521
Federal National Mortgage Association		5.500%	TBA 15 YR		3,000		3,172,500
Federal National Mortgage Association		5.500%	TBA 30 YR		10,750		11,252,229
Federal National Mortgage Association(d)		5.904%	07/01/37		3,972		4,223,324
Federal National Mortgage Association(d)		5.921%	06/01/37		4,162		4,425,781
Federal National Mortgage Association		6.000%	04/01/13-06/01/38		25,917		27,643,791
Federal National Mortgage Association		6.000%	TBA 30 YR		30,500		32,301,391
Federal National Mortgage Association		6.500%	07/01/17-01/01/37		9,377		10,090,440
Federal National Mortgage Association		7.000%	08/01/11-07/01/32		767		851,320
Federal National Mortgage Association		7.500%	05/01/12-05/01/32		423		463,783
Government National Mortgage Association		4.500%	TBA 30 YR		6,000		6,052,697
Government National Mortgage Association		5.500%	08/15/33-04/15/36		7,882		8,306,009
Government National Mortgage Association		6.000%	11/15/23-07/15/34		2,540		2,705,582
Government National Mortgage Association		6.500%	10/15/23-09/15/36		4,922		5,279,363

SEE NOTES TO FINANCIAL STATEMENTS.

A16

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
Government National Mortgage Association		7.000%	09/15/31	$	110	$	122,463
Government National Mortgage Association		8.000%	01/15/24- 04/15/25		79		90,427
TOTAL MORTGAGE-BACKED SECURITIES (cost $285,605,910)							293,318,973
MUNICIPAL BONDS — 0.2%
Bay Area Toll Authority	Aa3	6.263%	04/01/49		1,305		1,251,508
New Jersey State Turnpike Authority, BABs	A3	7.414%	01/01/40		395		445,244
New York City Transitional Finance Authority	Aa2	5.767%	08/01/36		1,100		1,066,087
State of California	Baa1	7.300%	10/01/39		1,250		1,181,350
State of California, BABs(b)	Baa1	7.550%	04/01/39		245		240,708
State of Washington	Aa1	5.481%	08/01/39		345		333,760
TOTAL MUNICIPAL BONDS (cost $4,653,616)							4,518,657
RESIDENTIAL MORTGAGE-BACKED SECURITIES — 0.5%
CDC Mortgage Capital Trust, Ser. 2002-HE3, Class M1(d)	Baa2	1.881%	03/25/33		690		440,466
CDC Mortgage Capital Trust, Ser. 2003-HE1, Class M2(d)	Baa2	3.156%	08/25/33		53		19,415
Centex Home Equity, Ser. 2005-A, Class M2(d)	Aa3	0.731%	01/25/35		2,250		1,687,112
Credit-Based Asset Servicing And Securitization LLC, Ser. 2005-CB6, Class A3	A3	5.120%	07/25/35		667		557,365
Equity One ABS, Inc., Ser. 2004-3, Class M1	Aa2	5.700%	07/25/34		1,028		782,090
First Franklin Mortgage Loan Trust, Ser. 2005-FFH1, Class M2(d)	Ba3	0.751%	06/25/36		1,800		195,370
HFC Home Equity Loan Trust, Ser. 2005-2, Class M2(d)	Aa1	0.723%	01/20/35		523		431,430
Long Beach Mortgage Loan Trust, Ser. 2004-2, Class M1(d)	Aa2	0.761%	06/25/34		1,250		864,264
Morgan Stanley ABS Capital I, Ser. 2004-NC1, Class M1(d)	Aa2	0.931%	12/25/33		1,468		1,082,074
Morgan Stanley Dean Witter Capital I, Ser. 2002-HE1, Class M1(d)	B3	1.131%	07/25/32		1,156		772,714
Morgan Stanley Dean Witter Capital I, Ser. 2002-NC4, Class M1(d)	A2	1.506%	09/25/32		1,156		824,596
Saxon Asset Securities Trust, Ser. 2005-2, Class M2(d)	A2	0.671%	10/25/35		1,480		427,849
Securitized Asset Backed Receivables LLC, Ser. 2004-OP1, Class M1(d)	Aa2	0.996%	02/25/34		1,660		1,247,911
Securitized Asset Backed Receivables LLC, Ser. 2006-FR3, Class A3(d)	Caa1	0.481%	05/25/36		1,400		463,740
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (cost $15,737,981)							9,796,396
U.S. GOVERNMENT AGENCY OBLIGATIONS — 1.0%
Western Corporate Federal Credit Union, Gtd. Notes.		1.750%	11/02/12		4,550		4,529,570
Federal Farm Credit Bank(b)		4.875%	01/17/17		845		899,186
Federal Home Loan Banks		5.000%	11/17/17		420		454,322
Federal Home Loan Banks		5.625%	06/11/21		2,320		2,525,499
Federal Home Loan Mortgage Corp.(b)		3.750%	03/27/19		3,040		2,980,480
Federal National Mortgage Association(b)		2.625%	11/20/14		2,620		2,599,684
Federal National Mortgage Association		5.000%	02/13/17		1,955		2,122,147
Federal National Mortgage Association(b)		6.625%	11/15/30		2,010		2,415,634
Resolution Funding Corp. Interest Strip(j)		4.980%	04/15/18		2,645		1,864,569
Tennessee Valley Authority		4.500%	04/01/18		1,390		1,414,532
Tennessee Valley Authority		5.880%	04/01/36		85		90,792
Tennessee Valley Authority, Ser. E		6.250%	12/15/17		360		410,616
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $22,486,354)							22,307,031
U.S. TREASURY SECURITIES — 5.7%
U.S. Treasury Bonds(b)		4.500%	08/15/39		2,595		2,536,208
U.S. Treasury Bonds		4.500%	02/15/36		3,070		3,023,950
U.S. Treasury Bonds		6.250%	08/15/23		6,140		7,333,463
U.S. Treasury Inflation Index		1.625%	01/15/15		13,857		14,411,307

SEE NOTES TO FINANCIAL STATEMENTS.

A17

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

U.S. TREASURY SECURITIES (continued)	Interest Rate	Maturity Date	Principal Amount (000)		Value (Note 2)
U.S. Treasury Inflation Index	3.500%	01/15/11	$	3,832	$	3,974,485
U.S. Treasury Notes(b)	0.750%	11/30/11		2,500		2,483,693
U.S. Treasury Notes(b)	2.125%	11/30/14		16,875		16,475,569
U.S. Treasury Notes	2.625%	12/31/14		31,530		31,438,878
U.S. Treasury Notes(b)	3.375%	11/15/19		1,645		1,582,293
U.S. Treasury Strips Coupon(m)	4.830%	11/15/24		14,565		7,108,419
U.S. Treasury Strips Coupon(m)	4.840%	05/15/24		3,985		2,004,403
U.S. Treasury Strips Coupon(m)	4.860%	08/15/24		12,545		6,218,105
U.S. Treasury Strips Coupon(m)	5.270%	05/15/20		9,010		5,794,763
U.S. Treasury Strips Coupon(m)	7.450%	05/15/26		5,000		2,234,300
U.S. Treasury Strips Principal(b)(m)	4.750%	08/15/23		6,000		3,186,918
U.S. Treasury Strips Principal(b)(m)	4.800%	11/15/24		5,000		2,468,395
U.S. Treasury Strips Principal(m)	6.260%	02/15/23		16,780		9,151,443
TOTAL U.S. TREASURY SECURITIES (cost $122,702,297)						121,426,592
TOTAL LONG-TERM INVESTMENTS (cost $1,707,613,348)						1,951,463,390
SHORT-TERM INVESTMENTS — 19.5%
U.S. TREASURY SECURITIES — 0.4%
U.S. Treasury Bill(g)	0.040%	03/18/10		3,000		2,999,697
U.S. Treasury Bill(g)	0.157%	06/17/10		4,700		4,695,996
TOTAL U.S. TREASURY SECURITIES (cost $7,696,367)						7,695,693
			Shares
AFFILIATED MUTUAL FUNDS — 19.1%
Dryden Core Investment Fund — Short-Term Bond Series (Note 4)(k)				15,417,258		131,971,730
Dryden Core Investment Fund — Taxable Money Market Series (includes $122,857,073 of cash collateral received for securities on loan)(Note 4)(k)(l)				277,211,474		277,211,474
TOTAL AFFILIATED MUTUAL FUNDS (cost $427,520,895)						409,183,204
TOTAL SHORT-TERM INVESTMENTS (cost $435,217,262)						416,878,897
TOTAL INVESTMENTS(n) — 110.7% (cost $2,142,830,610)						2,368,342,287
LIABILITIES IN EXCESS OF OTHER ASSETS(o) — (10.7)%						(229,610,222	)
NET ASSETS — 100.0%					$	2,138,732,065

The following abbreviations are used in portfolio descriptions:

144A	Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
BABs	Build America Bonds
I/O	Interest Only
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
TBA	To Be Announced
ULC	Unlimited Liability Corporation

† The ratings reflected are as of December 31, 2009. Ratings of certain bonds may have changed subsequent to that date.

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $118,672,517; cash collateral of $122,857,073 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Security segregated as collateral for futures contracts.

(d) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2009.

SEE NOTES TO FINANCIAL STATEMENTS.

A18

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

(e) Indicates a security that has been deemed illiquid.

(f) Standard & Poor’s Rating

(g) Rate quoted represents yield-to-maturity as of purchase date.

(h) Represents issuer in default on interest payments and/or principal repayment; non-income producing security.

(i) Indicates a restricted security; the aggregate original cost of such securities is $5,576,491. The aggregate value of $5,927,664 is approximately 0.3% of net assets.

(j) Represents zero coupon bond. Rate shown reflects the effective yield at December 31, 2009.

(k) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

(l) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(m) Rate shown reflects the effective yield at December 31, 2009.

(n) As of December 31, 2009, 2 securities representing $2,219,545 and 0.1% of the net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

(o) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on financial futures contracts, interest rate and credit default swap agreements as follows:

Open futures contracts outstanding at December 31, 2009:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2009		Unrealized Appreciation/ (Depreciation)
Long Positions:
419	U.S. Treasury 2 Yr. Notes	Mar. 2010	$	91,079,553	$	90,615,297	$	(464,256	)
796	U.S. Treasury 5 Yr. Notes	Mar. 2010		92,172,583		91,048,719		(1,123,864	)
246	S&P 500 Index	Mar. 2010		67,377,913		68,308,050		930,137
								(657,983	)
Short Positions:
67	U.S. Treasury 10 Yr. Notes	Mar. 2010		8,026,839		7,735,359		291,480
309	U.S. Long Bond	Mar. 2010		37,163,452		35,650,875		1,512,577
								1,804,057
							$	1,146,074

Interest rate swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Fair Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(a)	05/31/2014	$	11,895	2.355%	3 month LIBOR	$	(253,855	)	$	—	$	(253,855	)
Morgan Stanley Capital Services, Inc.(b)	02/15/2036		2,985	4.128%	3 month LIBOR		167,792			—		167,792
						$	(86,063	)	$	—	$	(86,063	)

(a) Portfolio pays the floating rate and receives the fixed rate.

(b) Portfolio pays the fixed rate and receives the floating rate.

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

Credit default swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Corporate Issues—Buy Protection(1):
Barclays Bank PLC	09/20/2012	$	2,800	0.595%	Fortune Brands, Inc., 5.375%, 01/15/16	$	12,830		$	—	$	12,830
Barclays Bank PLC	03/20/2018		1,700	1.220%	Computer Sciences Corp., 5.000%, 02/15/13		(75,690	)		—		(75,690	)
Citibank NA	09/20/2012		3,200	0.320%	Altria Group, Inc., 7.000%, 11/04/13		35,999			—		35,999
Credit Suisse International	06/20/2018		3,500	0.970%	Verizon Communications, Inc., 4.900%, 09/15/15		(33,357	)		—		(33,357	)

SEE NOTES TO FINANCIAL STATEMENTS.

A19

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Corporate Issues—Buy Protection(1) (continued):
Deutsche Bank AG	09/20/2011	$	1,000	1.000%	Dish DBS Corp., 6.625%, 10/01/14	$	(404	)	$	13,678		$	(14,082	)
Deutsche Bank AG	03/20/2012		2,000	5.000%	Gannett Co., Inc., 6.375%, 04/01/12		(128,921	)		(48,739	)		(80,182	)
Deutsche Bank AG	12/20/2012		2,000	1.000%	Macys Retail Holdings, Inc., 8.000%, 07/15/12		22,348			74,480			(52,132	)
Deutsche Bank AG	06/20/2013		1,750	2.000%	International Lease Finance Corp., 4.150%, 01/20/15		320,259			—			320,259
Deutsche Bank AG	06/20/2013		2,000	1.000%	United States Steel Corp., 6.650%, 06/01/37		86,634			113,706			(27,072	)
Deutsche Bank AG	03/20/2014		1,585	7.050%	Starwood Hotels & Resorts Worldwide, Inc., 7.875%, 05/01/12		(360,821	)		—			(360,821	)
Deutsche Bank AG	03/20/2018		4,500	0.990%	Nordstrom, Inc., 6.950%, 03/15/28		29,111			—			29,111
Deutsche Bank AG	06/20/2018		2,800	1.150%	Spectra Energy Capital LLC, 6.250%, 02/15/13		(74,782	)		—			(74,782	)
JPMorgan Chase Bank	06/20/2014		1,110	0.650%	Bunge Ltd. Finance Corp., 5.350%, 04/15/14		24,937			—			24,937
Merrill Lynch Capital Services, Inc.	09/20/2016		785	1.730%	Tyson Foods, Inc., 7.850%, 04/01/16		33,442			—			33,442
Merrill Lynch Capital Services, Inc.	06/20/2018		1,800	3.050%	SLM Corp., 5.125%, 08/27/12		210,897			—			210,897
Merrill Lynch Capital Services, Inc.	06/20/2018		2,700	1.450%	Starwood Hotels & Resorts Worldwide, Inc., 6.750, 05/15/18		69,820			—			69,820
Morgan Stanley Capital Services, Inc.	03/20/2012		500	5.000%	Gannett Co., Inc., 6.375%, 04/01/12		(32,230	)		(17,617	)		(14,613	)
Morgan Stanley Capital Services, Inc.	03/20/2018		1,400	0.700%	Avon Products, Inc., 6.500%, 03/01/19		(28,252	)		—			(28,252	)
Morgan Stanley Capital Services, Inc.	06/20/2018		1,600	1.000%	Newell Rubbermaid, Inc., 0.000%, 07/15/28		43,146			—			43,146
Morgan Stanley Capital Services, Inc.	06/20/2018		2,700	0.970%	Simon Property Group LP, 5.250%, 12/01/16		101,340			—			101,340
						$	256,306		$	135,508		$	120,798
Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Asset-Backed Issues—Buy Protection(1):
Merrill Lynch Capital Services, Inc.	03/25/2036	$	842	3.720%	AmeriQuest Mortgage Securities, Inc., 2.731%, 03/25/36	$	814,732		$	—		$	814,732
Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value(3)			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Asset-Backed Issues—Sell Protection(2):
Merrill Lynch Capital Services, Inc.	03/25/2036	$	842	9.000%	AmeriQuest Mortgage Securities, Inc., 2.731%, 03/25/36	$	(790,816	)	$	—		$	(790,816	)

The Portfolio entered into credit default swaps as the protection seller on asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make delivery

SEE NOTES TO FINANCIAL STATEMENTS.

A20

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date. Increasing fair value in absolute terms, represents a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occuring as defined under the terms of the agreement.

(4) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

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

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

	Level 1		Level 2		Level 3
Investments in Securities
Asset-Backed Securities	$	—	$	13,734,566	$	2,219,029
Bank Loans		—		14,822,850		—
Collateralized Mortgage Obligations		—		10,098,964		—
Commercial Mortgage-Backed Securities		—		101,965,142		—
Corporate Bonds		—		288,196,530		—
Common Stocks		1,058,711,129		516		—
Foreign Agencies		—		9,613,365		—
Foreign Local Government		—		733,650		—
Mortgage-Backed Securities		—		293,318,973		—
Municipal Bonds		—		4,518,657		—
Residential Mortgage-Backed Securities		—		9,796,396		—
U.S. Government Agency Obligations		—		22,307,031		—
U.S. Treasury Securities		—		129,122,285		—
Affiliated Mutual Funds		409,183,204		—		—
		1,467,894,333		898,228,925		2,219,029
Other Financial Instruments*		1,146,074		34,735		23,916
Total	$	1,469,040,407	$	898,263,660	$	2,242,945

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Asset-Backed Security			Other Financial Instruments*
Balance as of 12/31/08	$	—		$	1,511,232
Realized gain (loss)		—			—	**
Change in unrealized appreciation (depreciation)		(933	)		(1,487,316	)
Earned accretion/amortization		933			—
Net purchases (sales)		2,219,029			—
Transfers in and/or out of Level 3		—			—
Balance as of 12/31/09	$	2,219,029		$	23,916

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

** The realized gain earned during the period for other financial instruments was $1,580,515.

SEE NOTES TO FINANCIAL STATEMENTS.

A21

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Affiliated Mutual Fund (including 5.7% of collateral received for securities on loan)	19.1	%
Mortgage-Backed Securities	13.7
U.S. Treasury Securities	6.1
Commercial Mortgage-Backed Securities	4.8
Oil, Gas & Consumable Fuels	4.8
Pharmaceuticals	3.2
Computers & Peripherals	3.0
Banking	2.7
Software	2.2
Diversified Financial Services	2.1
Aerospace & Defense	1.6
Insurance	1.6
Capital Markets	1.4
Commercial Banks	1.4
Diversified Telecommunication Services	1.4
Media	1.4
Beverages	1.3
Chemicals	1.3
Communications Equipment	1.3
Electric	1.3
Food & Staples Retailing	1.3
Household Products	1.3
Semiconductors & Semiconductor Equipment	1.3
Telecommunications	1.3
Healthcare Providers & Services	1.1
Industrial Conglomerates	1.1
Tobacco	1.1
Electric Utilities	1.0
Healthcare & Pharmaceutical	1.0
Healthcare Equipment & Supplies	1.0
Internet Software & Services	1.0
Specialty Retail	1.0
U.S. Government Agency Obligations	1.0
Energy Equipment & Services	0.9
Real Estate Investment Trusts	0.9
Biotechnology	0.8
Food Products	0.8
IT Services	0.8
Machinery	0.8
Retailers	0.8
Asset-Backed Securities	0.7
Foods	0.7
Hotels, Restaurants & Leisure	0.7
Multi-Utilities	0.7
Technology	0.7

Air Freight & Logistics	0.5	%
Cable	0.5
Collateralized Mortgage Obligations	0.5
Media & Entertainment	0.5
Metals & Mining	0.5
Non Captive Finance	0.5
Residential Mortgage-Backed Securities	0.5
Road & Rail	0.5
Consumer Finance	0.4
Foreign Agencies	0.4
Multiline Retail	0.4
Commercial Services & Supplies	0.3
Consumer	0.3
Electronic Equipment & Instruments	0.3
Energy – Other	0.3
Healthcare Insurance	0.3
Internet & Catalog Retail	0.3
Metals	0.3
Pipelines & Other	0.3
Airlines	0.2
Automobiles	0.2
Capital Goods	0.2
Electrical Equipment	0.2
Energy – Integrated	0.2
Household Durables	0.2
Life Sciences Tools & Services	0.2
Lodging	0.2
Municipal Bonds	0.2
Textiles, Apparel & Luxury Goods	0.2
Auto Components	0.1
Building Materials & Construction	0.1
Construction & Engineering	0.1
Containers & Packaging	0.1
Diversified Consumer Services	0.1
Gas Utilities	0.1
Independent Power Producers & Energy Traders	0.1
Leisure Equipment & Products	0.1
Paper	0.1
Paper & Forest Products	0.1
Personal Products	0.1
Professional Services	0.1
Railroads	0.1
Thrifts & Mortgage Finance	0.1
Trading Companies & Distributors	0.1
Wireless Telecommunication Services	0.1
	110.7
Liabilities in excess of other assets	(10.7	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A22

	CONSERVATIVE BALANCED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative Instruments as of December 31, 2009 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Credit contracts	Premium paid for swaps agreements	$	201,864		Premium received for swaps agreements	$	66,356
Credit contracts	Unrealized appreciation on swaps		1,696,513		Unrealized depreciation on swaps		1,551,799
Equity contracts	Due to broker—variation margin		930,137	*	—		—
Interest rate contracts	Due to broker—variation margin		1,804,057	*	Due to broker—variation margin		1,588,120	*
Interest rate contracts	Unrealized appreciation on swaps		167,792		Unrealized depreciation on swaps		253,855
Total		$	4,800,363			$	3,460,130

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures		Swaps		Purchased Options			Written Options		Total
Credit contracts	$	—	$	916,506	$	—		$	—	$	916,506
Equity contracts		16,217,169		—		—			—		16,217,169
Interest rate contracts		5,098,976		192,226		(113,446	)		39,538		5,217,294
Total	$	21,316,145	$	1,108,732	$	(113,446	)	$	39,538	$	22,350,969

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures			Swaps			Total
Credit contracts	$	—		$	(5,614,260	)	$	(5,614,260	)
Equity contracts		619,788			—			619,788
Interest rate contracts		(2,547,298	)		20,922			(2,526,376	)
Total	$	(1,927,510	)	$	(5,593,338	)	$	(7,520,848	)

For the year ended December 31, 2009, the Portfolio’s average volume of derivative activities is as follows:

Purchased Options (Cost)	Written Options (Premium Received)	Futures Long Position (Value at Trade Date)	Futures Short Position (Value at Trade Date)
$7,100	$2,899	$193,146,186	$14,597,723

Interest Rate Swaps (Notional Amount in USD (000))	Credit Default Swaps as Buyer (Notional Amount in USD (000))	Credit Default Swaps as Writer (Notional Amount in USD (000))
$11,697	$38,723	$968

SEE NOTES TO FINANCIAL STATEMENTS.

A23

CONSERVATIVE BALANCED PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES December 31, 2009

ASSETS
Investments, at value including securities on loan of $118,672,517:
Unaffiliated investments (cost $1,715,309,715)	$	1,959,159,083
Affiliated investments (cost $427,520,895)		409,183,204
Foreign currency, at value (cost $9,325)		9,323
Receivable for investments sold		53,436,700
Dividends and interest receivable		7,981,069
Unrealized appreciation on swaps		1,864,305
Foreign tax reclaim receivable		318,199
Premium paid for swaps agreements		201,864
Receivable for Series shares sold		34,088
Prepaid expenses		22,474
Total Assets		2,432,210,309
LIABILITIES
Payable for investments purchased		139,648,338
Collateral for securities on loan		122,857,073
Payable to custodian		26,943,962
Unrealized depreciation on swaps		1,805,654
Management fee payable		1,000,526
Due to broker-variation margin		769,898
Accrued expenses and other liabilities		268,240
Payable for Series shares repurchased		117,602
Premium received for swaps agreements		66,356
Affiliated transfer agent fee payable		595
Total Liabilities		293,478,244
NET ASSETS	$	2,138,732,065
Net assets were comprised of:
Paid-in capital	$	2,004,241,267
Retained earnings		134,490,798
Net assets, December 31, 2009	$	2,138,732,065
Net asset value and redemption price per share, $2,138,732,065 / 145,958,929 outstanding shares of beneficial interest	$	14.65

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Interest	$	37,092,927
Unaffiliated dividend income (net of foreign withholding taxes of $124)		22,885,291
Affiliated dividend income		3,023,297
Affiliated income from securities loaned, net		1,252,718
		64,254,233
EXPENSES
Management fee		10,805,389
Shareholders’ reports		280,000
Custodian’s fees and expenses		267,000
Audit fee		41,000
Insurance expenses		41,000
Trustees’ fees		36,000
Commitment fee on syndicated credit agreement		15,000
Legal fees and expenses		15,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Miscellaneous		20,859
Total expenses		11,531,248
NET INVESTMENT INCOME		52,722,985
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(2,250,188))		(63,813,497	)
Futures transactions		21,316,145
Swap agreement transactions		1,108,732
Foreign currency transactions		1,626
Written options transactions		39,538
		(41,347,456	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $19,799,375)		360,490,601
Futures		(1,927,510	)
Swaps		(5,593,338	)
Foreign currencies		8,220
		352,977,973
NET GAIN ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		311,630,517
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	364,353,502

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	52,722,985		$	74,151,854
Net realized loss on investments, swaps and foreign currencies		(41,347,456	)		(65,065,328	)
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		352,977,973			(563,716,770	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		364,353,502			(554,630,244	)
DISTRIBUTIONS		(74,120,351	)		(81,811,715	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,049,111 and 1,194,754 shares, respectively]		13,537,729			16,824,187
Series shares issued in reinvestment of dividends and distributions [5,781,619 and 5,295,257 shares, respectively]		74,120,351			81,811,715
Series shares repurchased [15,167,586 and 15,304,061 shares, respectively]		(196,684,797	)		(226,520,392	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(109,026,717	)		(127,884,490	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		181,206,434			(764,326,449	)
NET ASSETS:
Beginning of year		1,957,525,631			2,721,852,080
End of year	$	2,138,732,065		$	1,957,525,631

SEE NOTES TO FINANCIAL STATEMENTS.

A24

	DIVERSIFIED BOND PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 91.7% ASSET-BACKED SECURITIES — 5.2%	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Alfa Diversified Payment Rights Finance Co. (Russia), Ser. 1A, Class A, 144A(a)	Ba1	1.854%	03/15/11	$	954	$	858,375
Ballyrock Cdo Ltd. (Cayman Islands), Ser. 2003-2A, Class A, 144A(a)	Aa2	0.799%	11/20/15		5,542		5,154,228
Bank of America Credit Card Trust Ser. 2006-C5, Class C5(a)	Baa1	0.633%	01/15/16		5,750		4,955,943
Ser. 2007-A3, Class A3(a)	Aaa	0.253%	11/15/16		1,000		954,474
Bank One Issuance Trust Ser. 2004-A3, Class A3(a)	Aaa	0.403%	02/15/17		5,100		4,976,066
Ser. 2004-C2, Class C2(a)	Baa2	1.033%	02/15/17		2,100		1,946,647
Chase Issuance Trust, Ser. 2008-A13, Class A13(a)	Aaa	1.754%	09/15/15		1,000		1,029,390
Chatham Light CLO Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(a)	Aa1	0.531%	08/03/19		4,951		4,505,602
Citibank Credit Card Issuance Trust Ser. 2003-C4, Class C4	Baa2	5.000%	06/10/15		6,500		6,387,152
Ser. 2005-C3, Class C3(a)	Baa2	0.643%	07/15/14		3,780		3,523,873
Ser. 2006-A7, Class A7(a)	Aaa	0.314%	12/15/18		6,000		5,651,543
Ser. 2006-C1, Class C1(a)	Baa2	0.633%	02/20/15		2,200		2,011,170
Ford Credit Auto Owner Trust, Ser. 2006-B, Class C	Aaa	5.680%	06/15/12		2,100		2,192,933
Granite Ventures Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(a)	Aaa	0.544%	12/15/17		4,200		3,927,000
Katonah Ltd., Ser. 2005-7A, Class A2, 144A(a)	A2	0.533%	11/15/17		3,385		3,088,410
MBNA Credit Card Master Note Trust Ser. 2002-C3, Class C3(a)	Baa1	1.583%	10/15/14		1,900		1,782,933
Ser. 2004-C2, Class C2(a)	Baa1	1.133%	11/15/16		1,500		1,274,295
Ser. 2005-A10, Class A10(a)	Aaa	0.293%	11/15/15		2,400		2,322,634
Ser. 2005-A2, Class A2(a)	Aaa	0.313%	10/15/14		2,100		2,057,307
Ser. 2006-A2, Class A2(a)	Aaa	0.293%	06/15/15		1,000		972,096
Ser. 2006-A5, Class A5(a)	Aaa	0.293%	10/15/15		1,250		1,210,882
Ser. 2006-C1, Class C1(a)	Baa1	0.653%	07/15/15		5,000		4,446,850
Mountain Capital CLO Ltd. (Cayman Islands), Ser. 2004-3A, Class A1LA, 144A(a)	Aaa	0.688%	02/15/16		3,550		3,372,924
Railcar Leasing LLC, Ser. 1997-1, Class A2, 144A	Aa2	7.125%	01/15/13		2,332		2,410,407
TOTAL ASSET-BACKED SECURITIES (cost $66,290,504)							71,013,134
BANK LOANS — 2.8%
Automotive — 0.1%
Oshkosh Truck Corp.(a)(b)	B2	6.269%	12/06/13		1,144		1,141,009
Cable — 0.3%
Discovery Communications, Inc.(a)(b)	Baa3	5.250%	05/14/14		1,302		1,312,740
Insight Midwest Holding LLC(a)(b)	B1	1.790%	10/06/13		2,653		2,490,126
							3,802,866
Capital Goods — 0.1%
Capital Safety Group Ltd.(a)(b)	B2	2.723%	07/20/15		409		339,676
Capital Safety Group Ltd.(a)(b)	B2	2.981%	07/20/16		1,091		905,324
							1,245,000
Consumer — 0.1%
Huish Detergents, Inc.(a)(b)	Ba2	2.010%	04/26/14		206		192,471
Pilot Travel Centers LLC(b)	Ba2	TBA	12/31/15		1,125		1,129,489
							1,321,960
Electric — 0.3%
NRG Energy, Inc.(a)(b)	Baa3	0.151%	02/01/13		1,171		1,112,508
NRG Energy, Inc.(a)(b)	Baa3	1.996%	02/01/13		1,991		1,891,124
Texas Competitive Electric Holdings Co. LLC(a)(b)	B1	3.735%	10/10/14		1,955		1,588,438
							4,592,070
Gaming — 0.1%
MotorCity Casino Hotel(b)	B3	8.500%	07/13/12		1,641		1,595,558

SEE NOTES TO FINANCIAL STATEMENTS.

A25

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

BANK LOANS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Healthcare & Pharmaceutical — 1.3%
HCA, Inc.(a)(b)	Ba3	2.501%	11/18/13	$	1,851	$	1,765,740
Health Management Associates Term B(a)(b)	B1	2.001%	02/28/14		1,880		1,748,650
Inverness Medical Innovations(a)(b)	Ba2	3.131%	06/26/14		2,925		2,756,812
PTS Acquisitions Corp.(a)(b)	Ba3	2.481%	04/10/14		3,803		3,220,242
Royalty Pharma Finance Trust(b)	Baa3	7.750%	05/15/15		4,000		3,720,000
Warner Chilcott Corp.(a)(b)	B1	5.500%	10/30/14		1,544		1,545,689
Warner Chilcott Corp.(a)(b)	B1	5.750%	04/30/15		1,699		1,700,257
Warner Chilcott Corp.(a)(b)	B1	5.750%	04/30/15		772		772,844
							17,230,234
Paper
Domtar, Inc.(a)(b)	Baa3	1.608%	03/05/14		840		816,375
Pipelines & Other — 0.1%
Enterprise GP Holdings LP(a)(b)	Ba2	2.514%	11/08/14		1,504		1,434,726
Technology — 0.4%
Fidelity National Information Services, Inc.(b)	Ba1	4.481%	01/18/12		298		296,779
First Data Corp.(a)(b)	B1	2.983%	09/24/14		1,026		909,197
First Data Corp.(a)(b)	B1	2.999%	09/24/14		1,955		1,728,953
Flextronics International Ltd. (Singapore)(a)(b)	Ba1	2.514%	10/01/14		2,278		2,105,182
Flextronics International Ltd. (Singapore)(a)(b)	Ba1	2.534%	10/01/14		655		604,938
							5,645,049
TOTAL BANK LOANS (cost $41,352,990)							38,824,847
COLLATERALIZED MORTGAGE OBLIGATIONS — 0.4%
Countrywide Alternative Loan Trust, Ser. 2004-18CB, Class 3A1	A1	5.250%	09/25/19		1,594		1,542,596
Master Alternative Loans Trust, Ser. 2004-4, Class 4A1	Aaa	5.000%	04/25/19		351		331,412
Structured Adjustable Rate Mortgage Loan Trust, Ser. 2004-1, Class 4A3(a)	A1	3.586%	02/25/34		2,302		1,904,549
Washington Mutual Alternative Mortgage Pass-Through Certificates, Ser. 2005-1, Class 3A	AAA(c)	5.000%	03/25/20		1,291		988,944
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $5,593,458)							4,767,501
COMMERCIAL MORTGAGE-BACKED SECURITIES — 15.6%
Banc of America Commercial Mortgage, Inc. Ser. 2005-1, Class ASB(a)	AAA(c)	4.965%	11/10/42		4,512		4,630,871
Ser. 2007-1, Class A2	Aaa	5.381%	01/15/49		5,000		5,093,416
Ser. 2007-4, Class A3(a)	AAA(c)	5.811%	02/10/51		6,460		6,338,273
Ser. 2007-5, Class A3	AAA(c)	5.620%	02/10/51		2,445		2,372,995
Bear Stearns Commercial Mortgage Securities Ser. 2005-T18, Class AAB(a)	Aaa	4.823%	02/13/42		2,475		2,498,469
Ser. 2005-T20, Class AAB(a)	Aaa	5.134%	10/12/42		3,400		3,486,546
Ser. 2006-PW11, Class A4(a)	AAA(c)	5.456%	03/11/39		2,000		1,954,859
Ser. 2006-PW13, Class A3	AAA(c)	5.518%	09/11/41		4,024		4,015,491
Citigroup Commercial Mortgage Trust Ser. 2006-C5, Class A2	Aaa	5.378%	10/15/49		7,000		7,112,874
Ser. 2008-C7, Class A2A	Aaa	6.034%	12/10/49		3,620		3,769,770
Citigroup/Deutsche Bank Commercial Mortgage Trust, Ser. 2006-CD2, Class AAB(a)	Aaa	5.393%	01/15/46		3,000		3,035,411
Commercial Mortgage Loan Trust, Ser. 2008-LS1, Class A2(a)	Aaa	6.019%	12/10/49		3,000		3,077,314
Commercial Mortgage Loan Trust, Pass-Through Certificates, Ser. 2006-C7, Class A3(a)	AAA(c)	5.706%	06/10/46		1,598		1,605,750
Credit Suisse First Boston Mortgage Securities Corp., Ser. 2001-CP4, Class B	AAA(c)	6.330%	12/15/35		1,400		1,432,952
Credit Suisse Mortgage Capital Certificates Ser. 2006-C1, Class A4(a)	AAA(c)	5.548%	02/15/39		4,400		4,334,191
Ser. 2006-C4, Class A2	Aaa	5.361%	09/15/39		460		466,342

SEE NOTES TO FINANCIAL STATEMENTS.

A26

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Ser. 2006-C5, Class A2	Aaa	5.246%		12/15/39	$	3,810	$	3,877,044
Ser. 2007-C1, Class A2	Aaa	5.268%		02/15/40		7,430		7,473,817
CS First Boston Mortgage Securities Corp. Ser. 2005-C3, Class A3	Aaa	4.645%		07/15/37		3,950		3,965,086
Ser. 2005-C5, Class A4(a)	AAA(c)	5.100%		08/15/38		2,400		2,312,157
GE Capital Commercial Mortgage Corp., Ser. 2006-C1, Class A4(a)	AAA(c)	5.336%		03/10/44		4,300		4,101,564
Greenwich Capital Commercial Funding Corp. Ser. 2005-GG5, Class A5(a)	Aaa	5.224%		04/10/37		4,900		4,641,329
Ser. 2007-GG9, Class A2	Aaa	5.381%		03/10/39		6,010		6,088,420
GS Mortgage Securities Corp. II, Ser. 2007-GG10, Class A2(a)	Aaa	5.778%		08/10/45		6,920		7,087,677
JPMorgan Chase Commercial Mortgage Securities Corp. Ser. 2005-LDP2, Class ASB	Aaa	4.659%		07/15/42		9,300		9,396,592
Ser. 2006-CB14, Class A4(a)	Aaa	5.481%		12/12/44		5,000		4,816,066
Ser. 2006-LDP6, Class A4(a)	Aaa	5.475%		04/15/43		900		865,995
Ser. 2006-LDP7, Class A2(a)	Aaa	5.861%		04/15/45		4,500		4,612,079
Ser. 2006-LDP9, Class A2	Aaa	5.134%		05/15/47		2,435		2,328,443
Ser. 2007-CB19, Class A2(a)	Aaa	5.746%		02/12/49		656		673,152
Ser. 2007-LD11, Class A2(a)	Aaa	5.803%		06/15/49		4,190		4,302,828
Ser. 2007-LDPX, Class A2	Aaa	5.434%		01/15/49		4,285		4,003,031
LB-UBS Commercial Mortgage Trust Ser. 2004-C8, Class A6(a)	Aaa	4.799%		12/15/29		4,200		3,882,842
Ser. 2006-C6, Class AAB	Aaa	5.341%		09/15/39		7,126		7,025,147
Ser. 2007-C1, Class A2	AAA(c)	5.318%		02/15/40		6,000		6,109,477
Merrill Lynch Mortgage Trust Ser. 2005-CIP1, Class A4(a)	Aaa	5.047%		07/12/38		3,100		3,012,781
Ser. 2006-C1, Class A4(a)	AAA(c)	5.656%		05/12/39		7,920		7,740,105
Merrill Lynch/Countrywide Commercial Mortgage Trust Ser. 2006-2, Class A4(a)	Aaa	5.909%		06/12/46		2,625		2,576,999
Ser. 2006-3, Class ASB(a)	Aaa	5.382%		07/12/46		2,095		2,065,439
Ser. 2007-7, Class A2(a)	Aaa	5.693%		06/12/50		347		355,508
Ser. 2007-8, Class A2(a)	AAA(c)	5.920%		08/12/49		4,400		4,310,061
Ser. 2007-9, Class A2	AAA(c)	5.590%		09/12/49		5,415		5,472,896
Morgan Stanley Capital Group, Inc. Ser. 2006-IQ12, Class AAB	AAA(c)	5.325%		12/15/43		1,400		1,395,121
Ser. 2006-T23, Class A3(a)	AAA(c)	5.807%		08/12/41		1,318		1,335,215
Ser. 2006-T23, Class A4(a)	AAA(c)	5.810%		08/12/41		6,100		6,146,798
Morgan Stanley Capital I, Ser. 2006-IQ12, Class ANM	AAA(c)	5.310%		12/15/43		5,500		5,575,506
Wachovia Bank Commercial Mortgage Trust Ser. 2003-C9, Class A3	AAA(c)	4.608%	��	12/15/35		3,991		4,076,101
Ser. 2005-C18, Class APB	Aaa	4.807%		04/15/42		1,500		1,513,945
Ser. 2005-C22, Class A3(a)	Aaa	5.285%		12/15/44		2,800		2,812,914
Ser. 2006-C24, Class A3(a)	Aaa	5.558%		03/15/45		2,050		2,003,723
Ser. 2006-C25, Class A4(a)	Aaa	5.740%		05/15/43		6,000		5,911,719
Ser. 2006-C27, Class A2	Aaa	5.624%		07/15/45		5,000		5,118,811
Ser. 2007-C33, Class A2(a)	Aaa	5.857%		02/15/51		5,000		5,117,400
Ser. 2007-C34, Class A2	Aaa	5.569%		05/15/46		3,600		3,668,610
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $191,573,107)								212,997,922
CORPORATE BONDS — 47.2%
Aerospace & Defense — 0.1%
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2	6.375%		06/01/19		1,350		1,452,153
Airlines — 1.2%
American Airlines Pass-Through Trust 2001-01, Pass-thru Certs., Ser. 01-1(d)	B2	6.817%		05/23/11		2,750		2,640,000
Continental Airlines, Inc., Pass-thru Certs. Ser. 2000-1, Class A-1(b)	Baa2	7.487%		10/02/10		7,954		7,914,230
Ser. 2000-1, Class A-1(b)	Baa2	6.703%		06/15/21		3		2,490

SEE NOTES TO FINANCIAL STATEMENTS.

A27

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Airlines (continued)
Ser. 2001-1, Class A-1	Ba1	7.373%	12/15/15	$	1,022	$	904,634
Ser. A(d)	Baa1	5.983%	04/19/22		1,850		1,785,250
Delta Air Lines, Inc., Pass-thru Certs., Ser. 071A	Baa1	6.821%	08/10/22		1,624		1,550,708
United Airlines, Inc., Pass-thru Certs., Ser. 2007-1, Class A(d)	Ba1	6.636%	07/02/22		1,183		1,005,827
							15,803,139
Automotive — 0.5%
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes	B3	7.875%	06/15/10		5,615		5,699,826
Harley-Davidson Funding Corp., Gtd. Notes, 144A, MTN	Baa1	5.750%	12/15/14		660		670,077
							6,369,903
Banking — 6.5%
Alfa MTN Markets Ltd. for ABH Financial Ltd. (Cyprus), Notes, 144A, MTN	Ba1	8.200%	06/25/12		1,500		1,500,000
American Express Co., Sr. Unsec’d. Notes	A3	8.125%	05/20/19		2,785		3,300,395
Bank of America, Sub. Notes	A1	5.300%	03/15/17		790		774,271
Bank of America Corp., Jr. Sub. Notes(a)	Ba3	8.000%	12/29/49		3,500		3,369,590
Bank of America Corp., Sr. Unsec’d. Notes	A2	6.000%	09/01/17		1,495		1,551,696
Barclays Bank PLC (United Kingdom), Sr. Unsec’d. Notes(d)	Aa3	6.750%	05/22/19		1,600		1,784,691
Bear Stearns Cos., Inc. (The), Sr. Unsec’d. Notes	Aa3	7.250%	02/01/18		1,575		1,807,868
Capital One Financial Corp., Sub. Notes	Baa2	6.150%	09/01/16		700		703,161
Chuo Mitsui Trust & Banking Co. Ltd. (Japan), Jr. Sub. Notes, 144A(a)	A2	5.506%	12/29/49		3,050		2,799,653
Citigroup, Inc., Sr. Unsec’d. Notes	A3	6.125%	11/21/17		2,050		2,066,349
Citigroup, Inc., Sr. Unsec’d. Notes(d)	A3	8.125%	07/15/39		4,120		4,650,026
Citigroup, Inc.	A3	8.500%	05/22/19		1,375		1,587,785
Countrywide Financial Corp., Gtd. Notes, MTN	A2	5.800%	06/07/12		3,670		3,895,745
Depfa ACS Bank (Ireland), Covered Notes, 144A	Aa2	5.125%	03/16/37		3,065		2,252,714
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.950%	01/18/18		1,550		1,636,758
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes(d)	A1	6.150%	04/01/18		1,900		2,033,948
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	6.250%	09/01/17		3,195		3,426,363
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.750%	10/01/37		440		452,270
HSBC Holdings PLC (United Kingdom), Sub. Notes	A1	6.500%	05/02/36		995		1,043,580
HSBC Holdings PLC (United Kingdom), Sub. Notes	A1	6.500%	09/15/37		2,255		2,356,006
HSBC Holdings PLC (United Kingdom), Sub. Notes	A1	6.800%	06/01/38		2,035		2,208,526
HSBK Europe BV (Netherlands), Gtd. Notes., 144A	Ba2	7.250%	05/03/17		2,230		2,029,300
ICICI Bank Ltd. (India), Jr. Sub. Notes, 144A(a)	Ba1	7.250%	08/29/49		2,380		1,995,861
ICICI Bank Ltd. (Singapore), Notes, 144A	Baa2	5.750%	11/16/10		2,500		2,552,815
JPMorgan Chase & Co., Jr. Sub. Notes, Ser. 1(a)	Baa1	7.900%	04/29/49		2,180		2,248,583
JPMorgan Chase & Co., Sr. Unsec’d. Notes(e)	Aa3	6.300%	04/23/19		3,250		3,575,250
KBC Bank Funding Trust III, Gtd. Notes, 144A(a)	Caa1	4.331%	11/29/49		5,000		3,350,000
Krung Thai Bank PCL (Thailand), Sub. Notes(a)	Baa3	7.378%	10/29/49		1,590		1,393,357
Merrill Lynch & Co., Inc., Notes, MTN	A2	6.875%	04/25/18		2,860		3,081,472
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes	A2	6.050%	08/15/12		1,500		1,606,848
Merrill Lynch & Co., Inc., Sub. Notes	A3	6.110%	01/29/37		1,785		1,645,631
Morgan Stanley, Sr. Unsec’d. Notes, Ser. E	A2	5.450%	01/09/17		4,035		4,078,239
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.625%	09/23/19		2,635		2,654,262
Royal Bank of Scotland Group PLC (United Kingdom), Sr. Unsec’d. Notes, MTN	A1	6.400%	10/21/19		1,525		1,520,105
Sumitomo Mitsui Banking Corp. (Japan), Sub. Notes, 144A(a)	Aa3	5.625%	07/29/49		6,380		6,081,831
USB Capital Xiii Trust, Gtd. Notes	A2	6.625%	12/15/39		1,975		2,007,272
Wachovia Bank NA, Sub. Notes(d)	Aa3	6.600%	01/15/38		1,300		1,372,123
Woori Bank (South Korea), Notes, 144A(d)	A2	7.000%	02/02/15		1,965		2,153,508
							88,547,852
Brokerage — 0.1%
Blackstone Holdings Finance Co. LLC, Gtd. Notes, 144A	A(c)	6.625%	08/15/19		1,360		1,331,127
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(f)	NR	6.875%	05/02/18		2,740		568,550
							1,899,677

SEE NOTES TO FINANCIAL STATEMENTS.

A28

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Building Materials & Construction — 1.1%
Centex Corp., Sr. Unsec’d. Notes	B1	5.700%	05/15/14	$	2,500	$	2,550,000
Interline Brands, Inc., Gtd. Notes	B3	8.125%	06/15/14		1,685		1,693,425
KB Home, Gtd. Notes	B1	6.375%	08/15/11		447		447,000
Lennar Corp., Gtd. Notes, Ser. B	B3	5.950%	10/17/11		3,060		3,082,950
Masco Corp., Sr. Unsec’d. Notes	Ba2	7.125%	08/15/13		2,600		2,706,262
Toll Brothers Finance Corp., Gtd. Notes	Ba1	5.150%	05/15/15		4,695		4,492,448
							14,972,085
Cable — 1.5%
Comcast Cable Communications Holdings, Inc., Gtd. Notes	Baa1	9.455%	11/15/22		1,065		1,369,744
British Sky Broadcasting Group PLC (United Kingdom), Gtd. Notes, 144A	Baa1	6.100%	02/15/18		210		222,461
Cablevision Systems Corp., Sr. Notes, 144A	B1	8.625%	09/15/17		3,175		3,305,969
COX Communications, Inc., Sr. Unsec’d. Notes, 144A (original cost $1,892,647; purchased date 02/12/09)(g)	Baa3	8.375%	03/01/39		1,900		2,365,840
DIRECTV Holdings LLC / DIRECTV Financing Co., Inc., Gtd. Notes, 144A	Ba2	4.750%	10/01/14		3,100		3,159,942
TCI Communications, Inc., Sr. Unsec’d. Notes	Baa1	7.875%	02/15/26		750		840,707
Time Warner Cable, Inc., Gtd. Notes	Baa2	5.850%	05/01/17		1,420		1,491,957
Time Warner Cable, Inc., Gtd. Notes	Baa2	6.750%	07/01/18		5,520		6,064,068
Time Warner Cable, Inc., Gtd. Notes	Baa2	8.250%	02/14/14		1,115		1,303,151
							20,123,839
Capital Goods — 1.7%
Ashtead Holdings PLC (United Kingdom), Sec’d. Notes, 144A(d)	B2	8.625%	08/01/15		1,300		1,306,500
Hutchison Whampoa International 09/16 Ltd. (Cayman Islands), Gtd. Notes, 144A(d)	A3	4.625%	09/11/15		4,960		5,004,590
Noble Group Ltd. (Bermuda), Sr. Unsec’d. Notes, 144A	Baa3	6.750%	01/29/20		2,860		2,935,075
Rockwell Automation, Inc., Sr. Unsec’d. Notes	A3	5.200%	01/15/98		6,500		4,874,200
Textron, Inc., Sr. Unsec’d. Notes	Baa3	7.250%	10/01/19		2,350		2,432,415
Trane U.S., Inc., Gtd. Notes	BBB+(c)	7.625%	02/15/10		3,800		3,822,813
Waste Management, Inc., Sr. Unsec’d. Notes	Baa3	7.650%	03/15/11		2,100		2,224,977
							22,600,570
Chemicals — 0.9%
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	5.900%	02/15/15		750		805,932
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	7.600%	05/15/14		2,050		2,332,679
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	8.550%	05/15/19		2,450		2,923,205
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3	9.400%	05/15/39		1,450		1,917,119
Nova Chemicals Corp. (Canada), Sr. Unsec’d. Notes	B1	6.500%	01/15/12		1,440		1,447,200
Union Carbide Chemical & Plastics Co., Gtd. Notes	Ba2	7.875%	04/01/23		3,058		2,730,922
							12,157,057
Consumer — 0.3%
Realogy Corp., Gtd. Notes, PIK	Ca	11.000%	04/15/14		2,374		1,958,232
Visant Holding Corp., Sr. Notes	B3	8.750%	12/01/13		2,445		2,512,237
							4,470,469
Electric — 4.1%
AES Corp. (The), Sr. Sec’d. Notes, 144A	Ba3	8.750%	05/15/13		5,007		5,132,175
CenterPoint Energy Houston Electric LLC, Genl. Ref. Mtge., Ser. J2	Baa1	5.700%	03/15/13		2,950		3,135,682
Consumers Energy Co., First Mtge. Bonds, Ser. D	A3	5.375%	04/15/13		1,000		1,073,736
Duke Energy Corp., Sr. Unsec’d. Notes	Baa2	6.300%	02/01/14		3,400		3,738,705
EDP Finance BV (Netherlands), Sr. Unsec’d. Notes, 144A	A3	6.000%	02/02/18		600		640,945
El Paso Electric Co., Sr. Unsec’d. Notes	Baa2	6.000%	05/15/35		2,325		2,090,854
Empresa Nacional de Electricidad SA (Chile), Unsub. Notes(d)	Baa3	8.350%	08/01/13		625		723,517
ENEL Finance International SA (Luxembourg), Gtd. Notes, 144A	A2	6.000%	10/07/39		3,200		3,216,938
Energy East Corp., Sr. Unsec’d. Notes	A3	6.750%	06/15/12		750		819,709
Energy East Corp., Sr. Unsec’d. Notes	A3	6.750%	09/15/33		1,150		1,199,902
Enersis SA (Chile), Sr. Unsec’d. Notes	Baa3	7.375%	01/15/14		3,700		4,124,593

SEE NOTES TO FINANCIAL STATEMENTS.

A29

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Electric (continued)
Exelon Corp., Sr. Unsec’d. Notes	Baa1	4.900%	06/15/15	$	500	$	515,800
Exelon Generation Co. LLC, Sr. Unsec’d. Notes	A3	6.200%	10/01/17		1,930		2,068,844
Exelon Generation Co. LLC, Sr. Unsec’d. Notes	A3	6.250%	10/01/39		1,900		1,935,779
FirstEnergy Solutions Corp., Gtd. Notes	Baa2	6.050%	08/15/21		1,750		1,765,411
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A(d)	A2	6.250%	06/17/14		5,295		5,777,422
Mirant Americas Generation LLC, Sr. Unsec’d. Notes	B3	8.300%	05/01/11		2,655		2,721,375
Mirant MID Atlantic Pass-Through Trust A, Pass-thru Certs., Ser. A	Ba1	8.625%	06/30/12		2,770		2,828,380
NiSource Finance Corp., Gtd. Notes	Baa3	5.450%	09/15/20		1,345		1,304,248
North American Energy Alliance LLC / North American Energy Alliance Finance Corp., Sr. Sec’d. Notes, 144A (original cost $1,563,824; purchased date 09/22/09)(g)	Ba3	10.875%	06/01/16		1,600		1,700,000
Oncor Electric Delivery Co. LLC, First Mtge. Bonds	Baa1	6.800%	09/01/18		1,460		1,621,737
Orion Power Holdings, Inc., Sr. Unsec’d. Notes	Ba3	12.000%	05/01/10		3,535		3,623,375
Transalta Corp. (Canada), Sr. Unsec’d. Notes(d)	Baa2	6.650%	05/15/18		1,953		2,036,210
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	5.613%	04/01/17		1,947		2,007,470
							55,802,807
Energy - Integrated — 0.5%
Cenovus Energy, Inc. (Canada), Sr. Notes, 144A(d)	Baa2	6.750%	11/15/39		3,325		3,624,430
Hess Corp., Sr. Unsec’d. Notes	Baa2	6.000%	01/15/40		615		609,002
Hess Corp., Sr. Unsec’d. Notes(d)	Baa2	8.125%	02/15/19		500		602,978
Western Oil Sand, Inc. (Canada), Gtd. Notes	Baa1	8.375%	05/01/12		1,900		2,126,767
							6,963,177
Energy - Other — 1.1%
Dolphin Energy Ltd. (Uae), Sr. Sec’d. Notes, 144A	Aa3	5.888%	06/15/19		3,846		3,884,612
GS Caltex Corp. (South Korea), Sr. Unsec’d. Notes, 144A	Baa2	7.750%	07/25/11		3,000		3,186,432
Halliburton Co., Sr. Unsec’d. Notes	A2	7.450%	09/15/39		1,500		1,855,882
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%	05/01/18		1,750		1,731,485
XTO Energy, Inc., Sr. Unsec’d. Notes	Baa2	6.250%	04/15/13		4,107		4,523,302
							15,181,713
Foods — 1.7%
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	4.125%	01/15/15		2,975		3,020,669
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	6.875%	11/15/19		2,200		2,456,045
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	7.750%	01/15/19		1,640		1,920,104
Constellation Brands, Inc., Gtd. Notes, Ser. B(d)	B2	8.125%	01/15/12		2,678		2,688,043
Kraft Foods, Inc., Sr. Unsec’d. Notes	Baa2	6.125%	02/01/18		2,770		2,912,771
Mead Johnson Nutrition Co., Gtd. Notes, 144A	Baa1	3.500%	11/01/14		1,285		1,270,355
Ralcorp Holdings, Inc., Sr. Notes, 144A	Baa3	6.625%	08/15/39		2,825		2,755,062
Stater Brothers Holdings, Gtd. Notes	B2	8.125%	06/15/12		1,250		1,262,500
Tyson Foods, Inc., Gtd. Notes	Ba3	7.850%	04/01/16		1,000		1,025,000
Tyson Foods, Inc., Sr. Unsec’d. Notes	B2	8.250%	10/01/11		2,050		2,193,500
Yum! Brands, Inc., Sr. Unsec’d. Notes	Baa3	8.875%	04/15/11		1,705		1,844,934
							23,348,983
Gaming — 0.3%
MGM Mirage, Sr. Sec’d. Notes, 144A	B1	10.375%	05/15/14		1,115		1,209,775
MGM Mirage, Sr. Sec’d. Notes, 144A	B1	11.125%	11/15/17		1,115		1,234,863
Peninsula Gaming LLC, Sr. Sec’d. Notes, 144A	Ba2	8.375%	08/15/15		945		942,637
Peninsula Gaming LLC, Sr. Unsec’d. Notes, 144A	B3	10.750%	08/15/17		945		949,725
							4,337,000
Healthcare & Pharmaceutical — 1.3%
Apria Healthcare Group, Inc., Sr. Sec’d. Notes, 144A	B1	12.375%	11/01/14		1,650		1,815,000
Carefusion Corp., Sr. Unsec’d. Notes, 144A	Baa3	6.375%	08/01/19		1,525		1,632,545
Express Scripts, Inc., Gtd. Notes	Baa3	6.250%	06/15/14		3,450		3,764,398
HCA, Inc., Sr. Unsec’d. Notes, MTN	Caa1	8.700%	02/10/10		1,700		1,703,683
Hospira, Inc., Sr. Unsec’d. Notes	Baa3	5.550%	03/30/12		2,500		2,664,665

SEE NOTES TO FINANCIAL STATEMENTS.

A30

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Healthcare & Pharmaceutical (continued)
McKesson Corp., Sr. Unsec’d. Notes	Baa3	6.500%	02/15/14	$	2,800	$	3,097,259
Senior Housing Properties Trust, Sr. Unsec’d. Notes	Ba1	8.625%	01/15/12		2,500		2,587,500
							17,265,050
Healthcare Insurance — 1.0%
Aetna, Inc., Sr. Unsec’d. Notes	A3	6.750%	12/15/37		1,900		1,981,185
Cigna Corp., Sr. Unsec’d. Notes	Baa2	5.375%	03/15/17		2,125		2,045,281
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		4,025		3,844,720
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.000%	06/15/17		2,610		2,731,540
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.500%	06/15/37		760		749,434
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.625%	11/15/37		195		195,349
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.875%	02/15/38		2,000		2,067,102
							13,614,611
Insurance — 2.0%
Allied World Assurance Co. Holdings Ltd. (Bermuda), Sr. Unsec’d. Notes	Baa1	7.500%	08/01/16		2,475		2,642,911
American International Group, Inc., Sr. Unsec’d. Notes	A3	4.250%	05/15/13		1,820		1,681,147
American International Group, Inc., Sr. Unsec’d. Notes	A3	5.050%	10/01/15		315		262,790
American International Group, Inc., Sr. Unsec’d. Notes, MTN	A3	5.850%	01/16/18		3,700		3,035,957
Axis Capital Holdings Ltd. (Bermuda), Sr. Unsec’d. Notes	Baa1	5.750%	12/01/14		3,350		3,372,077
Lincoln National Corp., Sr. Unsec’d. Notes	Baa2	8.750%	07/01/19		1,265		1,445,394
Massachusetts Mutual Life Insurance Co., Sub. Notes, 144A	A1	8.875%	06/01/39		1,200		1,471,739
MetLife, Inc., Sr. Unsec’d. Notes(d)	A3	7.717%	02/15/19		2,000		2,350,270
Teachers Insurance & Annuity Association of America, Notes, 144A	Aa2	6.850%	12/16/39		2,310		2,387,935
XL Capital Finance Europe PLC (United Kingdom), Gtd. Notes	Baa2	6.500%	01/15/12		6,820		7,057,704
XL Capital Ltd. (Cayman Islands), Jr. Sub. Notes, Ser. E(a)	Ba1	6.500%	12/31/49		1,880		1,419,400
XL Capital Ltd. (Cayman Islands), Sr. Unsec’d. Notes	Baa2	5.250%	09/15/14		140		137,105
							27,264,429
Lodging — 0.5%
Felcor Lodging LP, Sr. Sec’d. Notes, 144A(d)	B2	10.000%	10/01/14		2,350		2,370,563
Starwood Hotels & Resorts Worldwide, Inc., Gtd. Notes	Ba1	7.875%	05/01/12		3,060		3,300,975
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes(d)	Ba1	6.250%	02/15/13		980		1,010,625
							6,682,163
Media & Entertainment — 2.6%
CBS Corp., Gtd. Notes(d)	Baa3	8.200%	05/15/14		4,800		5,456,726
Gannett Co., Inc., Sr. Unsec’d. Notes(d)	Ba2	5.750%	06/01/11		2,240		2,245,600
Gannett Co., Inc., Sr. Unsec’d. Notes	Ba2	6.375%	04/01/12		1,100		1,100,000
Historic TW, Inc., Gtd. Notes	Baa2	6.625%	05/15/29		225		234,608
News America, Inc., Gtd. Notes, 144A(d)	Baa1	6.900%	08/15/39		600		654,524
News America, Inc., Gtd. Notes	Baa1	7.625%	11/30/28		1,415		1,512,297
RR Donnelley & Sons Co., Sr. Unsec’d. Notes	Baa3	4.950%	04/01/14		7,000		7,002,121
RR Donnelley & Sons Co., Sr. Unsec’d. Notes	Baa3	8.600%	08/15/16		4,750		5,170,893
Time Warner Cos., Inc., Gtd. Notes	Baa2	6.950%	01/15/28		2,153		2,316,746
Time Warner Cos., Inc., Gtd. Notes	Baa2	7.250%	10/15/17		1,440		1,612,688
Viacom, Inc., Sr. Unsec’d. Notes	Baa2	4.250%	09/15/15		2,795		2,816,938
Viacom, Inc., Sr. Unsec’d. Notes	Baa2	4.375%	09/15/14		860		886,884
Viacom, Inc., Sr. Unsec’d. Notes(d)	Baa2	6.750%	10/05/37		1,240		1,279,278
Viacom, Inc., Sr. Unsec’d. Notes	Baa2	6.875%	04/30/36		580		627,158
Vivendi SA (France), Sr. Unsec’d. Notes, 144A	Baa2	5.750%	04/04/13		2,000		2,102,694
							35,019,155
Metals — 2.0%
AK Steel Corp., Gtd. Notes(d)	Ba3	7.750%	06/15/12		4,195		4,236,950
Arcelormittal (Luxembourg), Sr. Unsec’d. Notes(d)	Baa3	6.125%	06/01/18		1,550		1,599,346
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes	Ba2	8.375%	04/01/17		2,095		2,294,025
Newmont Mining Corp., Gtd. Notes	Baa2	6.250%	10/01/39		2,025		2,027,420
Rio Tinto Finance USA Ltd. (Australia), Gtd. Notes(d)	Baa1	9.000%	05/01/19		5,785		7,321,427
Teck Resources Ltd. (Canada), Sr. Sec’d. Notes	Ba2	10.250%	05/15/16		500		582,500

SEE NOTES TO FINANCIAL STATEMENTS.

A31

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Metals (continued)
Teck Resources Ltd. (Canada), Sr. Sec’d. Notes	Ba2	10.750%	05/15/19	$	1,800	$	2,151,000
United States Steel Corp., Sr. Unsec’d. Notes(d)	Ba3	7.000%	02/01/18		2,000		1,958,988
Vale Overseas Ltd. (Cayman Islands), Gtd. Notes	Baa2	6.875%	11/21/36		815		814,316
Vale Overseas Ltd. (Cayman Islands), Gtd. Notes	Baa2	6.875%	11/10/39		1,275		1,283,573
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A	Baa2	5.500%	11/16/11		3,430		3,600,059
							27,869,604
Non-Captive Finance — 2.6%
Block Financial LLC, Gtd. Notes	Baa1	7.875%	01/15/13		5,700		6,350,005
Bosphorus Financial Services Ltd. (Cayman Islands), Sr. Sec’d. Notes, MTN(a)(b)	A3	2.073%	02/15/12		1,252		1,194,366
GATX Corp., Sr. Unsec’d. Notes	Baa1	4.750%	10/01/12		1,500		1,531,707
General Electric Capital Australia Funding Pty Ltd. (Australia), Gtd. Notes, MTN	Aa2	6.000%	04/15/15		AUD  4,440		3,689,394
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aa2	5.875%	01/14/38		1,675		1,550,854
General Electric Capital Corp., Sr. Unsec’d. Notes, Ser. G, MTN(e)(h)	Aa2	6.000%	08/07/19		7,275		7,551,603
Nelnet, Inc., Jr. Sub. Notes(a)	Ba2	7.400%	09/29/36		6,500		4,734,022
Preferred Term Securities X (Cayman Islands), Sr. Sec’d. Notes, 144A(a)(b)	A2	1.003%	07/03/33		3,102		1,504,523
SLM Corp., Sr. Unsec’d. Notes, MTN	Ba1	5.050%	11/14/14		4,150		3,743,213
SLM Corp., Sr. Unsec’d. Notes, MTN	Ba1	8.450%	06/15/18		3,200		3,157,609
							35,007,296
Packaging — 1.0%
Ball Corp., Gtd. Notes(d)	Ba1	7.125%	09/01/16		1,320		1,353,000
Greif, Inc., Sr. Unsec’d. Notes	Ba2	7.750%	08/01/19		3,505		3,575,100
Reynolds Group Issuer, Inc. , Sr. Sec’d. Notes, 144A	B1	7.750%	10/15/16		1,600		1,636,000
Sealed Air Corp., Sr. Unsec’d. Notes, 144A(d)	Baa3	5.625%	07/15/13		6,600		6,978,589
							13,542,689
Paper — 1.3%
Cascades, Inc. (Canada), Sr. Notes, 144A	Ba3	7.750%	12/15/17		2,150		2,171,500
Georgia-Pacific LLC, Sr. Unsec’d. Notes(d)	B2	8.125%	05/15/11		3,965		4,163,250
Graphic Packaging International, Inc., Gtd. Notes	B3	9.500%	06/15/17		1,750		1,855,000
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.300%	11/15/39		1,000		1,060,861
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.500%	08/15/21		1,650		1,848,777
MeadWestvaco Corp., Sr. Unsec’d. Notes	Ba1	7.375%	09/01/19		4,400		4,833,383
Rock-Tenn Co., Sr. Sec’d. Notes	Ba2	8.200%	08/15/11		2,000		2,122,500
							18,055,271
Pipelines & Other — 0.6%
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes(d)	Baa2	6.500%	09/01/39		1,545		1,557,068
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes	Baa2	7.300%	08/15/33		1,550		1,690,542
Sempra Energy, Sr. Unsec’d. Notes(d)	Baa1	6.500%	06/01/16		2,275		2,467,258
Sonat, Inc., Sr. Unsec’d. Notes	Ba3	7.625%	07/15/11		2,240		2,308,770
							8,023,638
Railroads — 0.1%
Union Pacific Corp., Sr. Unsec’d. Notes(d)	Baa2	5.750%	11/15/17		1,450		1,529,889
Real Estate Investment Trusts — 1.4%
Country Garden Holdings Co. (Cayman Islands), Sr. Notes, 144A	Ba3	11.750%	09/10/14		1,220		1,220,000
Hospitality Properties Trust, Sr. Unsec’d. Notes	Baa2	7.875%	08/15/14		2,900		2,993,867
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	5.450%	06/01/12		2,300		2,282,166
ProLogis, Sr. Unsec’d. Notes	Baa2	7.375%	10/30/19		1,650		1,627,568
Realty Income Corp., Sr. Unsec’d. Notes(d)	Baa1	6.750%	08/15/19		1,545		1,512,887
Simon Property Group LP, Sr. Unsec’d. Notes	A3	5.300%	05/30/13		3,400		3,508,137
Simon Property Group LP, Sr. Unsec’d. Notes	A3	10.350%	04/01/19		1,685		2,116,473
WEA Finance LLC , Gtd. Notes, 144A	A2	5.750%	09/02/15		4,000		4,217,760
							19,478,858

SEE NOTES TO FINANCIAL STATEMENTS.

A32

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#	Value (Note 2)
Retailers — 1.4%
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	6.125%	09/15/39	AUD  3,350	$	3,320,182
GameStop Corp., Gtd. Notes	Ba1	8.000%	10/01/12	$  3,325		3,445,531
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.350%	03/15/12	1,800		1,838,250
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.875%	01/15/13	7,800		8,014,500
Target Corp., Sr. Unsec’d. Notes	A2	6.500%	10/15/37	800		877,228
Target Corp., Sr. Unsec’d. Notes	A2	7.000%	01/15/38	1,870		2,181,819
						19,677,510
Structured Notes — 1.3%
Dow Jones CDX North America High Yield, Pass-thru Certs., 144A Ser. 5-T3	Caa3	8.250%	12/29/10	7,488		7,834,398
Ser. 6-T1	Caa3	8.625%	06/29/11	8,570		9,426,450
						17,260,848
Technology — 2.6%
Advanced Micro Devices, Inc., Sr. Unsec’d. Notes, 144A(d)	B2	8.125%	12/15/17	1,530		1,524,263
Affiliated Computer Services, Inc., Sr. Unsec’d. Notes	Ba2	4.700%	06/01/10	5,785		5,835,619
Amphenol Corp., Sr. Unsec’d. Notes	Baa3	4.750%	11/15/14	2,475		2,475,869
Arrow Electronics, Inc., Sr. Unsec’d. Notes	Baa3	6.000%	04/01/20	3,400		3,363,834
Cisco Systems, Inc., Sr. Unsec’d. Notes	A1	4.450%	01/15/20	4,650		4,561,576
FISERV, Inc., Gtd. Notes	Baa2	6.125%	11/20/12	1,600		1,742,194
Motorola, Inc., Sr. Unsec’d. Notes	Baa3	8.000%	11/01/11	121		129,408
Oracle Corp., Sr. Unsec’d. Notes(d)	A2	6.125%	07/08/39	1,100		1,155,038
Seagate Technology HDD Holdings (Cayman Islands), Gtd. Notes	Ba3	6.375%	10/01/11	2,115		2,152,012
Sensata Technologies BV (Netherlands), Gtd. Notes	Caa2	8.000%	05/01/14	4,370		4,282,600
Stats ChipPAC Ltd. (Singapore), Gtd. Notes	Ba1	6.750%	11/15/11	2,500		2,515,625
SunGard Data Systems, Inc., Gtd. Notes(d)	Caa1	10.250%	08/15/15	2,610		2,779,650
Xerox Corp., Sr. Unsec’d. Notes	Baa2	4.250%	02/15/15	2,000		1,986,058
Xerox Corp., Sr. Unsec’d. Notes	Baa2	5.500%	05/15/12	870		919,433
						35,423,179
Telecommunications — 3.2%
AT&T Corp., Gtd. Notes	A2	8.000%	11/15/31	3,915		4,778,328
British Telecommunications PLC (United Kingdom), Sr. Unsec’d. Notes	Baa2	9.625%	12/15/30	328		417,943
CC Holdings GS V LLC, Sr. Sec’d. Notes, 144A	Baa3	7.750%	05/01/17	3,000		3,195,000
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec’d. Notes	A2	8.500%	11/15/18	2,960		3,671,531
CenturyTel, Inc., Sr. Unsec’d. Notes, Ser. P(d)	Baa3	7.600%	09/15/39	1,250		1,281,046
Embarq Corp., Sr. Unsec’d. Notes (original cost $8,523,664; purchased date 05/12/06-01/12/09)(b)(g)	Baa3	7.082%	06/01/16	9,000		9,941,202
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.250%	02/15/11	1,925		1,953,875
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.375%	05/01/16	1,100		1,179,750
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.875%	03/15/12	3,300		3,547,500
Sprint Capital Corp., Gtd. Notes(d)	Ba3	7.625%	01/30/11	5,235		5,359,331
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	4.875%	10/01/10	3,400		3,479,890
Telefonica Emisiones Sau (Spain), Gtd. Notes	Baa1	7.045%	06/20/36	5		5,709
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	6.350%	04/01/19	900		992,907
Windstream Corp., Gtd. Notes, 144A	Ba3	7.875%	11/01/17	3,750		3,703,125
						43,507,137
Tobacco — 0.7%
Altria Group, Inc., Gtd. Notes(e)	Baa1	9.950%	11/10/38	6,005		7,827,578
Lorillard Tobacco Co., Sr. Unsec’d. Notes(d)	Baa2	8.125%	06/23/19	2,075		2,281,226
						10,108,804
TOTAL CORPORATE BONDS (cost $622,143,084)						643,360,555
FOREIGN AGENCIES — 1.7%
DP World Ltd. (United Arab Emirates), Sr. Unsec’d. Notes, MTN, Reg.- S.	Ba1	6.850%	07/02/37	4,470		3,352,500

SEE NOTES TO FINANCIAL STATEMENTS.

A33

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

FOREIGN AGENCIES (continued)	Moody’s Rating (Unaudited)†		Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
DP World Ltd. (United Arab Emirates), Sr. Unsec’d. Notes, 144A	Ba1		6.850%	07/02/37	$	190	$	146,152
Export-Import Bank of Korea (South Korea)	A2		5.875%	01/14/15		2,230		2,393,040
Export-Import Bank of Korea (South Korea)	A2		8.125%	01/21/14		820		951,928
GAZ Capital SA (Luxembourg), Sr. Unsec’d. Notes, 144A	Baa1		6.510%	03/07/22		4,740		4,348,950
GAZ Capital SA (Luxembourg), Sr. Unsec’d. Notes, 144A	Baa1		8.125%	07/31/14		2,810		2,978,600
GAZ Capital SA (Luxembourg), Sr. Unsec’d. Notes, Reg. - S.	Baa1		9.250%	04/23/19		2,055		2,291,325
GAZ Capital SA For Gazprom (Luxembourg), Sr. Unsec’d. Notes, Reg. - S.	Baa1		8.125%	07/31/14		600		640,500
Gazprom International SA (Luxembourg), Gtd. Notes, 144A	BBB+(c)		7.201%	02/01/20		1,671		1,702,697
Korea Expressway Corp. (South Korea), 144A	A2		4.500%	03/23/15		2,825		2,878,336
National Power Corp. (Philippines), Gtd. Notes., 144A(a)	BB-(c)		4.517%	08/23/11		1,530		1,591,200
TOTAL FOREIGN AGENCIES (cost $21,684,839)								23,275,228
MUNICIPAL BONDS — 0.7%
New Jersey State Turnpike Authority, Build America Bonds	A3		7.414%	01/01/40		2,050		2,310,760
State of California, Buid America Bonds	Baa1	��	7.300%	10/01/39		3,500		3,307,780
State of California, Build America Bonds(d)	Baa1		7.550%	04/01/39		2,205		2,166,368
University of California Rev., Build America Bonds	Aa1		5.770%	05/15/43		1,400		1,367,492
TOTAL MUNICIPAL BONDS (cost $9,020,462)								9,152,400
RESIDENTIAL MORTGAGE-BACKED SECURITIES — 3.7%
ACE Securities Corp., Ser. 2004-FM1, Class M1(a)	Aa2		1.131%	09/25/33		2,267		1,777,488
Ameriquest Mortgage Securities, Inc. Ser. 2001-2, Class M3(a)	Baa2		3.156%	10/25/31		702		399,457
Ser. 2003-AR3, Class M6(a)(b)	Ba3		5.380%	10/25/33		1,600		205,536
Ser. 2004-R8, Class M1(a)	Aa1		0.871%	09/25/34		950		697,341
Amortizing Residential Collateral Trust, Ser. 2002-BC7, Class M2(a)	CC(c)		1.581%	10/25/32		134		10,211
Argent Securities, Inc., Ser. 2003-W2, Class M4(a)	Baa1		5.169%	09/25/33		2,400		1,157,494
Asset Backed Funding Certificates, Ser. 2004-OPT1, Class M1(a)	Aa2		1.281%	08/25/33		2,592		1,895,056
Asset Backed Securities Corp. Home Equity, Ser. 2003-HE3, Class M1(a)	Aa3		1.478%	06/15/33		1,994		1,497,424
CDC Mortgage Capital Trust, Ser. 2002-HE3, Class M2(a)	Ca		3.606%	03/25/33		348		23,714
Centex Home Equity, Ser. 2004-B, Class AF6	Aaa		4.186%	03/25/34		1,300		1,150,044
Citigroup Mortgage Loan Trust, Inc., Ser. 2004-RES1, Class M3(a)	A3		1.311%	11/25/34		239		106,018
Countrywide Asset-Backed Certificates, Ser. 2004-12, Class MV3(a)	Aa3		0.891%	03/25/35		2,670		1,679,610
CS First Boston Mortgage Securities Corp., Ser. 2002-HE4, Class M2(a)	B2		2.481%	08/25/32		159		28,423
Equity One ABS, Inc., Ser. 2004-3, Class M1	Aa2		5.700%	07/25/34		1,300		989,391
FBR Securitization Trust, Ser. 2005-2, Class M1(a)	A1		0.711%	09/25/35		3,600		2,469,547
First Franklin Mortgage Loan Asset Backed Certificates, Ser. 2005-FF6, Class M2(a)	A1		0.671%	05/25/36		2,575		855,882
Fremont Home Loan Trust, Ser. 2003-B, Class M1(a)	Aa3		1.281%	12/25/33		382		283,038
GSAMP Trust, Ser. 2004-FM1, Class M1(a)	Aaa		1.206%	11/25/33		4,075		3,341,532
HFC Home Equity Loan Asset Backed Certificates Ser. 2004-1, Class A(a)	Aaa		0.583%	09/20/33		2,114		1,884,176
Ser. 2004-1, Class M(a)	Aa2		0.753%	09/20/33		1,916		1,637,328
Ser. 2006-1, Class M1(a)	Aa1		0.513%	01/20/36		1,227		1,054,245
Ser. 2006-2, Class A1(a)	Aaa		0.383%	03/20/36		340		299,019
Ser. 2006-2, Class A2(a)	Aaa		0.413%	03/20/36		413		363,705
IXIS Real Estate Capital Trust, Ser. 2006-HE1, Class A4(a)	Caa2		0.531%	03/25/36		3,200		1,066,212
Long Beach Mortgage Loan Trust, Ser. 2004-1, Class M1(a)	Aa1		0.731%	02/25/34		4,250		2,999,566
Merrill Lynch Mortgage Investors, Inc., Ser. 2004-OPT1, Class A1A(a)	AAA(c)		0.491%	06/25/35		3,249		2,538,626
Morgan Stanley ABS Capital I Ser. 2002-NC6, Class M2(a)	B3		3.381%	11/25/32		174		36,801
Ser. 2003-HE1, Class M1(a)	Aa2		1.431%	05/25/33		2,141		1,639,566
Ser. 2004-NC1, Class M1(a)	Aa2		0.931%	12/25/33		1,193		879,185
Ser. 2004-OP1, Class M1(a)	Aa1		0.811%	11/25/34		3,688		2,817,759

SEE NOTES TO FINANCIAL STATEMENTS.

A34

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

RESIDENTIAL��MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Ser. 2004-WMC1, Class M1(a)	Aa1	1.161%	06/25/34	$	3,176	$	2,251,742
Ser. 2004-WMC2, Class M1(a)	Aa1	1.146%	07/25/34		3,299		2,504,376
New Century Home Equity Loan Trust Ser. 2003-4, Class M1(a)	Aa2	1.356%	10/25/33		5,016		3,716,162
Ser. 2004-4, Class M1(a)	Aa1	0.741%	02/25/35		3,524		3,103,478
Residential Asset Mortgage Products, Inc., Ser. 2004-RS12, Class MII2(a)(b)	Aa3	1.031%	12/25/34		1,546		1,411,189
Residential Asset Securities Corp., Ser. 2004-KS1, Class AI5	Aaa	5.221%	02/25/34		1,000		753,782
Saxon Asset Securities Trust, Ser. 2002-3, Class M1(a)	Aaa	1.356%	12/25/32		849		680,655
Securitized Asset Backed Receivables LLC Trust, Ser. 2006-FR1, Class M1(a)	Caa1	0.631%	11/25/35		2,000		111,957
Structured Asset Securities Corp., Ser. 2002-HF2, Class M3(a)(b)	CC(c)	3.231%	07/25/32		1,345		658,838
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (cost $62,613,783)							50,975,573
SOVEREIGNS — 1.1%
Government of Hungary (Hungary), Ser. 15/A	Baa1	8.000%	02/12/15		HUF  693,400		3,720,364
Government of Jamaica (Jamaica)	Caa1	11.000%	07/27/12		EUR         620		799,920
Peru Government International Bond (Cayman Islands), Sr. Sec’d. Notes, 144A(i)	Ba1	6.350%	05/31/18		1,647		1,257,692
Poland Government International Bond (Poland)	A2	6.375%	07/15/19		1,550		1,685,909
Qatar Government International Bond (Qatar), 144A(d)	Aa2	6.400%	01/20/40		2,445		2,457,225
Republic of Poland (Poland), Ser. 1015	A2	6.250%	10/24/15		PLN       9,910		3,506,060
South Africa Government International Bond (South Africa)	A3	7.375%	04/25/12		600		658,500
Ukraine Government International Bond (Ukraine)	B2	6.385%	06/26/12		1,340		1,139,000
TOTAL SOVEREIGNS (cost $15,455,016)							15,224,670
U.S. GOVERNMENT AGENCY OBLIGATION — 0.1%
Federal National Mortgage Association (cost $1,332,952)(d)		2.625%	11/20/14		1,340		1,329,610
U.S. GOVERNMENT MORTGAGE-BACKED SECURITIES — 12.7%
Federal Home Loan Mortgage Corporation		4.500%	02/01/19		1,287		1,340,508
Federal Home Loan Mortgage Corporation		5.000%	07/01/19-12/01/19		3,001		3,162,119
Federal Home Loan Mortgage Corporation		5.500%	10/01/33-06/01/34		4,008		4,255,662
Federal Home Loan Mortgage Corporation		5.500%	TBA 30 YR		23,000		24,092,500
Federal Home Loan Mortgage Corporation		6.000%	11/01/33-06/01/34		4,548		4,857,367
Federal Home Loan Mortgage Corporation		6.500%	07/01/32-09/01/32		2,140		2,311,162
Federal Home Loan Mortgage Corporation		7.000%	10/01/32-11/01/33		3,850		4,238,653
Federal National Mortgage Association		4.000%	05/01/19		960		980,658
Federal National Mortgage Association		4.500%	06/01/18-02/01/35		10,417		10,841,873
Federal National Mortgage Association		5.000%	01/01/19-01/01/20		5,759		6,064,903
Federal National Mortgage Association(a)		5.198%	10/01/37		8,332		8,742,220
Federal National Mortgage Association		5.500%	12/01/16-09/01/34		18,004		19,012,184
Federal National Mortgage Association		6.000%	09/01/17-03/01/38		16,532		17,674,615
Federal National Mortgage Association		6.000%	TBA 30 YR		25,500		27,006,081
Federal National Mortgage Association		6.500%	12/01/14-10/01/37		17,231		18,521,831
Federal National Mortgage Association		7.000%	05/01/32-06/01/32		415		458,304
Government National Mortgage Association		5.500%	01/15/33-01/15/36		7,461		7,869,918
Government National Mortgage Association		6.000%	12/15/32-11/15/34		6,304		6,722,953
Government National Mortgage Association		6.500%	09/15/32-11/15/33		4,050		4,351,102
Government National Mortgage Association		7.500%	10/15/25-02/15/26		140		157,180
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED SECURITIES (cost $167,680,884)							172,661,793

SEE NOTES TO FINANCIAL STATEMENTS.

A35

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

U.S. GOVERNMENT TREASURY SECURITIES — 0.5%	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Treasury Notes(d)	0.750%	11/30/11	$	3,000	$	2,980,431
U.S. Treasury Notes(d)	3.375%	11/15/19		2,860		2,750,977
U.S. Treasury Strips Coupon(i)	4.860%	08/15/24		1,000		495,664
TOTAL U.S. GOVERNMENT TREASURY SECURITIES (cost $6,356,338)						6,227,072
TOTAL LONG-TERM INVESTMENTS (cost $1,211,097,417)						1,249,810,305
			Shares
SHORT-TERM INVESTMENTS — 16.2%
AFFILIATED MUTUAL FUNDS
Dryden Core Investment Fund — Short-Term Bond Series(j) (cost $164,700,915)				16,649,555		142,520,193
Dryden Core Investment Fund — Taxable Money Market Series(j)(k) (cost $78,783,202; includes $67,999,531 of cash collateral received for securities on loan)				78,783,202		78,783,202
TOTAL SHORT-TERM INVESTMENTS (cost $243,484,117)						221,303,395
TOTAL INVESTMENTS (l) — 107.9% (cost $1,454,581,534)						1,471,113,700
LIABILITIES IN EXCESS OF OTHER ASSETS(m) (7.9)%						(107,644,681	)
NET ASSETS — 100.0%					$	1,363,469,019

The following abbreviations are used in portfolio descriptions:

144A	Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
AUD	Australian Dollar
CAD	Canadian Dollar
EUR	Euro
GBP	British Pound
HUF	Hungarian Forint
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
NOK	Norwegian Krone
NZD	New Zealand Dollar
PIK	Payment in Kind
PLN	Polish Zloty
SEK	Swedish Krona
TBA	To Be Announced

† The ratings reflected are as of December 31, 2009. Ratings of certain bonds may have changed subsequent to that date.

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

(a) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2009.

(b) Indicates a security that has been deemed illiquid.

(c) Standard & Poor’s Rating

(d) All or a portion of security is on loan. The aggregate market value of such securities is $66,383,884; cash collateral of $67,999,531 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(e) Security segregated as collateral for swap contracts.

(f) Represents issuer in default on interest payments and/or principal repayment; non-income producing security.

(g) Indicates a restricted security; the aggregate original cost of such securities is $11,980,135. The aggregate value of $14,007,042 is approximately 1.0% of net assets.

(h) Security segregated as collateral for futures contracts.

SEE NOTES TO FINANCIAL STATEMENTS.

A36

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

(i) Represents zero coupon bond. Rate shown reflects the effective yield at December 31, 2009.

(j) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

(k) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(l) As of December 31, 2009, 1 security representing $3,372,924 and 0.2% of the net assets was fair valued in accordance with the policies adopted by the Board of Trustees.

(m) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on futures contracts, forward foreign currency exchange contracts, interest rate and credit default swap agreements as follows:

Open futures contracts outstanding at December 31, 2009:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2009		Unrealized Appreciation/ (Depreciation)
Long Positions:
11	Euro 10 Yrs. Bonds	Mar. 2010	$	1,941,065	$	1,911,048	$	(30,017	)
235	U.S. Treasury 10 Yrs. Notes	Mar. 2010		27,209,692		27,131,484		(78,208	)
340	U.S. Treasury 2 Yrs. Notes	Mar. 2010		73,777,543		73,530,313		(247,230	)
425	U.S. Treasury 5 Yrs. Notes	Mar. 2010		48,643,413		48,612,695		(30,718	)
507	U.S. Long Bonds	Mar. 2010		59,445,617		58,495,125		(950,492	)
								(1,336,665	)
Short Position:
20	Australian 10 Yrs. Bonds	Mar. 2010		1,855,897		1,828,925		26,972
							$	(1,309,693	)

Forward foreign currency exchange contracts outstanding at December 31, 2009:

Foreign Currency Contract	Counterparty	Notional Amount (000)	Payable at Settlement Date		Value at December 31, 2009		Unrealized Appreciation/ (Depreciation)
Purchased:
Australian Dollar expiring 01/20/10	JPMorgan Chase & Co.	AUD  759	$	680,900	$	681,027	$	127
British Pound expiring 01/22/10	Citibank N.A.	GBP  841		1,363,700		1,357,669		(6,031	)
Canadian Dollar expiring 01/19/10	Morgan Stanley	CAD  2,785		2,623,615		2,662,905		39,290
Euro expiring 01/22/10	Citibank N.A.	EUR  119		170,383		170,146		(237	)
Hungarian Forint expiring 01/21/10	JPMorgan Chase & Co.	HUF  129,681		680,900		687,718		6,818
Hungarian Forint expiring 01/21/10	Citibank N.A.	HUF  257,125		1,363,700		1,363,570		(130	)
New Zealand Dollar expiring 01/21/10	Deutsche Bank Securities Corp.	NZD  1,666		1,198,424		1,207,874		9,450
New Zealand Dollar expiring 01/21/10	JPMorgan Chase & Co.	NZD  1,326		953,300		961,132		7,832
New Zealand Dollar expiring 01/21/10	JPMorgan Chase & Co.	NZD  1,879		1,363,700		1,362,259		(1,441	)
Norwegian Krone expiring 01/21/10	Morgan Stanley	NOK  18,708		3,170,775		3,228,149		57,374
Swedish Krona expiring 01/21/10	Morgan Stanley	SEK  13,844		1,893,905		1,935,232		41,327
Swedish Krona expiring 01/21/10	Citibank N.A.	SEK  4,876		680,900		681,629		729
Swedish Krona expiring 01/21/10	Citibank N.A.	SEK  9,716		1,363,700		1,358,116		(5,584	)
			$	17,507,902	$	17,657,426		149,524

SEE NOTES TO FINANCIAL STATEMENTS.

A37

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

Foreign Currency Contract	Counterparty	Notional Amount (000)	Payable at Settlement Date		Value at December 31, 2009		Unrealized Appreciation/ (Depreciation)
Sold:
Australian Dollar expiring 01/20/10	JPMorgan Chase & Co.	AUD  1,556	$	1,395,378	$	1,394,706	$	672
Australian Dollar expiring 01/20/10	JPMorgan Chase & Co.	AUD  1,289		1,156,900		1,155,856		1,044
Australian Dollar expiring 01/20/10	Citibank N.A.	AUD  1,288		1,137,100		1,154,288		(17,188	)
British Pound expiring 01/22/10	Citibank N.A.	GBP  2		3,088		3,096		(8	)
Hungarian Forint expiring 01/21/10	Citibank N.A.	HUF  212,185		1,088,800		1,125,247		(36,447	)
Hungarian Forint expiring 01/21/10	Citibank N.A.	HUF  549,626		2,819,752		2,914,741		(94,989	)
New Zealand Dollar expiring 01/21/10	UBS Securities LLC	NZD  1,958		1,365,800		1,419,260		(53,460	)
Norwegian Krone expiring 01/21/10	JPMorgan Chase & Co.	NOK  9,607		1,634,700		1,657,736		(23,036	)
Swedish Krona expiring 01/21/10	JPMorgan Chase & Co.	SEK  13,712		1,905,500		1,916,761		(11,261	)
Polish Zloty expiring 01/21/10	Citibank N.A.	PLN  4,170		1,417,249		1,454,304		(37,055	)
			$	13,924,267	$	14,195,995		(271,728	)
							$	(122,204	)

Interest rate swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Fair Value			Upfront Premiums Paid/ (Received)		Unrealized Depreciation
Deutsche Bank, AG(a)	5/31/2014	$	33,230	2.355%	3 month LIBOR	$	(709,172	)	$	—	$	(709,172	)

(a) Portfolio pays the floating rate and receives the fixed rate.

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

Credit default swap agreements outstanding as of December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Credit default swaps on Corporate Issues—Buy Protections(1):
Barclays Bank PLC	6/20/2011	$	2,240	5.000%	Gannett Co., Inc. 6.375%, due 04/01/2012	$	(111,953	)	$	(51,117	)	$	(60,836	)
Citibank, N.A.	3/20/2012		6,900	5.000%	XL Capital Ltd. 5.250%, due 09/15/2014		(656,264	)		(310,054	)		(346,210	)
Citibank, N.A.	6/20/2014		5,000	0.700%	United Parcel Service, Inc. 8.375%, due 04/1/2030		(84,951	)		—			(84,951	)
Citibank, N.A.	6/20/2014		4,800	1.000%	CBS Corp. 4.625%, due 05/15/2018		4,038			337,097			(333,059	)
Credit Suisse International	12/20/2012		1,500	1.000%	Gatx Corp. 5.500%, due 2/15/2012		(13,068	)		14,931			(27,999	)
Credit Suisse International	6/20/2014		2,500	1.000%	Centex Corp. 5.250%, due 06/15/2015		(11,196	)		(15,568	)		4,372
Credit Suisse International	3/20/2015		4,695	1.000%	Toll Brothers Financial Corp. 5.150%, due 05/15/2015		97,460			38,252			59,208
Deutsche Bank, AG	3/20/2012		1,100	5.000%	Gannett Co., Inc. 6.375%, due 04/01/2012		(70,906	)		(26,806	)		(44,100	)
Deutsche Bank, AG	6/20/2012		3,060	5.000%	Starwood Hotels & Resorts Holdings, Inc. 7.875%, due 05/01/2012		(308,811	)		(80,523	)		(228,288	)
Deutsche Bank, AG	12/20/2012		4,400	1.000%	Block Financial LLC 5.125%, due 10/30/2014		(79,315	)		(50,272	)		(29,043	)

SEE NOTES TO FINANCIAL STATEMENTS.

A38

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Deutsche Bank, AG	12/20/2012	$	7,800	1.000%	Macy’s Retail Holdings, Inc. 8.000%, due 07/15/2012	$	87,158		$	293,476		$	(206,318	)
Deutsche Bank, AG	6/20/2013		6,600	1.000%	Sealed Air Corp. 5.625%, due 07/15/2013		(60,653	)		97,851			(158,504	)
Deutsche Bank, AG	9/20/2013		2,600	1.000%	Masco Corp. 6.125%, due 10/03/2016		60,759			91,457			(30,698	)
Deutsche Bank, AG	3/20/2014		980	7.050%	Starwood Hotels & Resorts Holdings, Inc. 7.875%, due 05/01/2012		(223,095	)		—			(223,095	)
Deutsche Bank, AG	6/20/2014		7,000	1.000%	R.R. Donnelley & Sons Co. 4.950%, due 04/01/2014		123,313			504,077			(380,764	)
Deutsche Bank, AG	3/20/2018		3,700	3.700%	American International Group, Inc. 6.250%, due 05/01/2036		425,861			—			425,861
Goldman Sachs International, Inc.	12/20/2011		3,060	1.000%	Lennar Corp. 6.500%, due 04/15/2016		74,717			110,642			(35,925	)
Goldman Sachs International, Inc.	3/20/2014		3,400	6.600%	Simon Propery Group L.P. 5.250%, due 12/01/2016		(733,686	)		—			(733,686	)
Goldman Sachs International, Inc.	3/20/2014		3,400	0.700%	Duke Energy Corp. 5.650%, due 06/15/2013		(48,971	)		—			(48,971	)
JPMorgan Chase Bank	6/20/2014		4,150	5.000%	SLM Corp. 5.125%, due 08/27/2012		2,467			723,700			(721,233	)
JPMorgan Chase Bank	6/20/2016		3,400	1.500%	Embarq Holdings Co. LLC 7.082%, due 06/01/2016		(150,541	)		—			(150,541	)
JPMorgan Chase Bank	9/20/2016		4,750	1.000%	R.R. Donnelley & Sons Co. 4.950%, due 04/01/2014		212,873			567,562			(354,689	)
JPMorgan Chase Bank	9/20/2019		4,400	1.000%	MeadWestvaco Corp. 7.950%, due 02/15/2031		137,144			84,164			52,980
Merrill Lynch Capital Services, Inc.	9/20/2016		1,000	1.730%	Tyson Foods, Inc. 7.850%, due 04/01/2016		42,602			—			42,602
Morgan Stanley Capital Services, Inc.	6/20/2013		3,700	1.650%	Itraxx Euro zero, due 06/20/2013		(174,401	)		(117,396	)		(57,005	)
Morgan Stanley Capital Services, Inc.	12/20/2019		3,400	1.000%	Arrow Electronics, Inc. 6.875%, due 06/01/2018		47,483			(27,003	)		74,486
						$	(1,411,936	)	$	2,184,470		$	(3,596,406	)

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Fair Value		Upfront Premiums Paid/ (Received)		Unrealized Appreciation
Credit default swaps on Asset-Backed Issues—Buy Protections(1):
Merrill Lynch Capital Services, Inc.	3/25/2036	$	842	3.720%	AmeriQuest Mortgage Securities, Inc. Ser. 2006-R1, Class M9, 2.731%, due 03/25/2036	$	814,732	$	—	$	814,732

Counterparty	Termination Date	Implied Credit Spread at December 31, 2009(4)	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Fair Value		Upfront Premiums Paid/ (Received)			Unrealized Appreciation
Credit default swaps on Corporate Issues—Sell Protections(2):
Deutsche Bank, AG	3/20/2010	0.275%	$	2,500	5.000%	Arcelor Mittal Co. 6.125%, due 06/01/2018	$	30,059	$	(115,762	)	$	145,821

Counterparty	Termination Date	Notional Amount (000)#(3)		Fixed Rate	Reference Entity/Obligation	Fair Value(5)			Upfront Premiums Paid/ (Received)		Unrealized Depreciation
Credit default swaps on Asset-Backed Issues—Sell Protections(2):
Merrill Lynch Capital Services, Inc.	3/25/2036	$	842	9.000%	AmeriQuest Mortgage Securities, Inc. Ser. 2006-R1, Class M9, 2.731%, due 03/25/2036	$	(790,816	)	$	—	$	(790,816	)

SEE NOTES TO FINANCIAL STATEMENTS.

A39

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The Portfolio entered into credit default swaps as the protection seller on corporate issues and asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount up to the notional amount of the swap and make delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities up to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(4) Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of the reporting date serve as an indicator of the current status of the payment/performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

(5) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represents the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date. Increasing fair value in absolute terms, represents a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occuring as defined under the terms of the agreement.

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

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

	Level 1			Level 2			Level 3
Investments in Securities
Asset-Backed Securities	$	—		$	67,640,210		$	3,372,924
Bank Loans		—			38,824,847			—
Collateralized Mortgage Obligations		—			4,767,501			—
Commercial Mortgage-Backed Securities		—			212,997,922			—
Corporate Bonds		—			643,360,555			—
Foreign Agencies		—			23,275,228			—
Municipal Bonds		—			9,152,400			—
Residential Mortgage-Backed Securities		—			50,975,573			—
Sovereigns		—			15,224,670			—
U.S. Government Agency Obligation		—			1,329,610			—
U.S. Government Mortgage-Backed Securities		—			172,661,793			—
U.S. Government Treasury Securities		—			6,227,072			—
Affiliated Mutual Funds		221,303,395			—			—
		221,303,395			1,246,437,381			3,372,924
Other Financial Instruments*		(1,309,693	)		(4,281,961	)		23,916
Total	$	219,993,702		$	1,242,155,420		$	3,396,840

SEE NOTES TO FINANCIAL STATEMENTS.

A40

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Corporate Bonds			Asset-Backed Securities			Other Financial Instruments*
Balance as of 12/31/08	$	2,023,560		$	—		$	2,641,021
Realized gain (loss)		(1,642,574	)		—			—	**
Change in unrealized appreciation (depreciation)		578,234			(1,418	)		(2,617,105	)
Earned amortization/accretion		—			1,418			—
Net purchases (sales)		(959,220	)		3,372,924			—
Transfers in and/or out of Level 3		—			—			—
Balance as of 12/31/09	$	—		$	3,372,924		$	23,916

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

** The realized gain earned during the period for other financial instruments was $2,612,480.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Affiliated Mutual Funds (including 5.0% of collateral received for securities on loan)	16.2	%
Commercial Mortgage-Backed Securities	15.6
U.S. Government Mortgage-Backed Securities	12.7
Banking	6.5
Asset-Backed Securities	5.2
Electric	4.4
Residential Mortgage-Backed Securities	3.7
Telecommunications	3.2
Technology	3.0
Healthcare & Pharmaceutical	2.6
Media & Entertainment	2.6
Non-Captive Finance	2.6
Insurance	2.0
Metals	2.0
Capital Goods	1.8
Cable	1.8
Foods	1.7
Foreign Agencies	1.7
Real Estate Investment Trusts	1.4
Retailers	1.4
Paper	1.3
Structured Notes	1.3
Airlines	1.2
Energy – Other	1.1
Sovereigns	1.1
Building Materials & Construction	1.1
Healthcare Insurance	1.0
Packaging	1.0
Chemicals	0.9
Municipal Bonds	0.7
Pipelines & Other	0.7
Tobacco	0.7
Automotive	0.6
Energy – Integrated	0.5
Lodging	0.5
U.S. Government Treasury Securities	0.5
Collateralized Mortgage Obligations	0.4
Consumer	0.4
Gaming	0.4
Aerospace & Defense	0.1
Brokerage	0.1
Railroads	0.1
U.S. Government Agency Obligation	0.1
	107.9
Liabilities in excess of other assets	(7.9	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A41

	DIVERSIFIED BOND PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative Instruments as of December 31, 2009 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Credit contracts	Premium paid for swaps agreements	$	2,863,209		Premium received for swaps agreements	$	794,501
Credit contracts	Unrealized appreciation on swaps		1,620,062		Unrealized depreciation on swaps		5,046,731
Foreign exchange contracts	Unrealized appreciation on forward foreign currency exchange contracts		164,663		Unrealized depreciation on forward foreign currency exchange contracts		286,867
Interest rate contracts	Due to broker—variation margin		26,972	*	Due to broker—variation margin		1,336,665	*
Interest rate contracts	—		—		Unrealized depreciation on swaps		709,172
Total		$	4,674,906			$	8,173,936

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures		Forward Contracts			Swaps			Purchased Options			Written Options			Total
Credit contracts	$	—	$	—		$	644,799		$	—		$	—		$	644,799
Foreign exchange contracts		—		(452,416	)		—			—			—			(452,416	)
Interest rate contracts		5,789,315		—			1,809,990			(187,350	)		79,190			7,491,145
Total	$	5,789,315	$	(452,416	)	$	2,454,789		$	(187,350	)	$	79,190		$	7,683,528
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value						Futures			Forward Contracts			Swaps			Total
Credit contracts						$	—		$	—		$	(4,777,247	)	$	(4,777,247	)
Foreign exchange contracts							—			(293,111	)		—			(293,111	)
Interest rate contracts							(7,834,730	)		—			(449,477	)		(8,284,207	)
Total						$	(7,834,730	)	$	(293,111	)	$	(5,226,724	)	$	(13,354,565	)

For the year ended December 31, 2009, the Portfolio’s average volume of derivative activities is as follows:

Purchased Options (Cost)	Written Options (Premium Received)	Futures Long Position (Value at Trade Date)		Futures Short Position (Value at Trade Date)		Forward Currency Contracts—Purchased (Value at Settlement Date Payable)		Forward Currency Contracts—Sold (Value at Settlement Date Receivable)
$9,203	$3,757	$	161,547,212	$	28,971,015	$	8,255,159	$	11,426,539

Interest Rate Swaps (Notional Amount in USD (000))	Credit Default Swaps as Buyer (Notional Amount in USD (000))	Credit Default Swaps as Writer (Notional Amount in USD (000))
$52,763	$54,719	$	7,724

SEE NOTES TO FINANCIAL STATEMENTS.

A42

DIVERSIFIED BOND PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2009

ASSETS
Investments, at value including securities on loan of $66,383,884:
Unaffiliated investments (cost $1,211,097,417)	$	1,249,810,305
Affiliated investments (cost $243,484,117)		221,303,395
Cash		1,301,596
Receivable for investments sold		23,624,548
Dividends and interest receivable		13,658,667
Premium paid for swaps agreements		2,863,209
Unrealized appreciation on swaps		1,620,062
Unrealized appreciation on forward foreign currency exchange contracts		164,663
Receivable for Series shares sold		40,810
Prepaid expenses		13,633
Total Assets		1,514,400,888
LIABILITIES
Payable for investments purchased		74,976,408
Collateral for securities on loan		67,999,531
Unrealized depreciation on swaps		5,755,903
Premium received for swaps agreements		794,501
Management fee payable		462,592
Due to broker—variation margin		407,874
Unrealized depreciation on forward foreign currency exchange contracts		286,867
Accrued expenses and other liabilities		132,384
Payable for Series shares repurchased		108,981
Deferred trustees’ fees		6,233
Affiliated transfer agent fee payable		595
Total Liabilities		150,931,869
NET ASSETS	$	1,363,469,019
Net assets were comprised of:
Paid-in capital	$	1,329,937,441
Retained earnings		33,531,578
Net assets, December 31, 2009	$	1,363,469,019
Net asset value and redemption price per share, $1,363,469,019 / 122,149,049 outstanding shares of beneficial interest	$	11.16

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Interest	$	60,004,476
Affiliated dividend income		2,659,194
Affiliated income from securities loaned, net		197,592
		62,861,262
EXPENSES
Management fee		4,808,368
Custodian’s fees and expenses		190,000
Shareholders’ reports		120,000
Audit fee		33,000
Trustees’ fees		22,000
Insurance expenses		21,000
Commitment fee on syndicated credit agreement		10,000
Legal fees and expenses		10,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Loan interest expense (Note 8)		21
Miscellaneous		11,811
Total expenses		5,236,200
NET INVESTMENT INCOME		57,625,062
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(72,467))		9,716,123
Futures transactions		5,789,315
Swap agreement transactions		2,454,789
Foreign currency transactions		270,625
Written options transactions		79,190
		18,310,042
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $20,049,476)		161,506,328
Futures		(7,834,730	)
Swaps		(5,226,724	)
Foreign currencies		(265,100	)
		148,179,774
NET GAIN ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		166,489,816
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	224,114,878

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net investment income	$	57,625,062		$	60,447,814
Net realized gain on investments, swaps and foreign currencies		18,310,042			20,953,008
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		148,179,774			(123,991,687	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		224,114,878			(42,590,865	)
DISTRIBUTIONS		(77,854,926	)		(72,614,494	)
SERIES SHARE TRANSACTIONS:
Series shares sold [10,352,324 and 9,801,318 shares, respectively]		113,677,834			102,899,591
Series shares issued in reinvestment of dividends and distributions [7,526,024 and 7,018,378 shares, respectively]		77,854,926			72,614,494
Series shares repurchased [10,529,843 and 13,831,055 shares, respectively]		(109,159,405	)		(143,763,704	)
NET INCREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		82,373,355			31,750,381
TOTAL INCREASE (DECREASE) IN NET ASSETS		228,633,307			(83,454,978	)
NET ASSETS:
Beginning of year		1,134,835,712			1,218,290,690
End of year	$	1,363,469,019		$	1,134,835,712

SEE NOTES TO FINANCIAL STATEMENTS.

A43

	EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 98.2%
COMMON STOCKS — 97.5%	Shares	Value (Note 2)
Aerospace & Defense — 1.1%
Precision Castparts Corp.	192,000	$	21,187,200
United Technologies Corp.	191,800		13,312,838
			34,500,038
Auto Components — 0.9%
Goodyear Tire & Rubber Co. (The)*	1,936,800		27,308,880
Beverages — 0.7%
PepsiCo, Inc.	378,358		23,004,166
Biotechnology — 2.1%
Celgene Corp.*	545,320		30,363,418
Gilead Sciences, Inc.*	842,400		36,459,072
			66,822,490
Capital Markets — 5.9%
Bank of New York Mellon Corp. (The)	814,878		22,792,138
Charles Schwab Corp. (The)	1,506,530		28,352,894
Goldman Sachs Group, Inc. (The)	516,231		87,160,442
Morgan Stanley	1,056,700		31,278,320
TD Ameritrade Holding Corp.*(a)	1,000,100		19,381,938
			188,965,732
Chemicals — 1.0%
Dow Chemical Co. (The)	1,123,600		31,045,068
Commercial Banks — 0.6%
KeyCorp	3,305,300		18,344,415
Commercial Services & Supplies — 1.2%
Waste Management, Inc.	1,131,800		38,266,158
Communications Equipment — 3.5%
Cisco Systems, Inc.*	1,572,569		37,647,302
Juniper Networks, Inc.*(a)	481,400		12,838,938
QUALCOMM, Inc.	1,331,170		61,579,924
			112,066,164
Computers & Peripherals — 5.6%
Apple, Inc.*	412,466		86,972,581
Hewlett-Packard Co.	1,047,760		53,970,117
NetApp, Inc.*(a)	1,116,600		38,399,874
			179,342,572
Consumer Finance — 1.1%
SLM Corp.*	3,138,700		35,373,149
Diversified Consumer Services — 2.4%
Career Education Corp.*(a)	1,301,400		30,335,634
H&R Block, Inc.	1,981,200		44,814,744
			75,150,378
Diversified Financial Services — 1.3%
Bank of America Corp.	1,604,400		24,162,264
JPMorgan Chase & Co.	450,900		18,789,003
			42,951,267
Electronic Components — 0.6%
Flextronics International Ltd. (Singapore)*	2,521,342		18,431,010

COMMON STOCKS (continued)	Shares	Value (Note 2)
Energy Equipment & Services — 2.3%
National Oilwell Varco, Inc.	584,090	$	25,752,528
Schlumberger Ltd. (Netherlands)	749,400		48,778,446
			74,530,974
Food & Staples Retailing — 2.6%
Costco Wholesale Corp.	486,200		28,768,454
CVS Caremark Corp.	774,900		24,959,529
Kroger Co. (The)	1,420,500		29,162,865
			82,890,848
Food Products — 4.0%
Bunge Ltd. (Bermuda)(a)	493,500		31,500,105
ConAgra Foods, Inc.	1,409,500		32,488,975
Tyson Foods, Inc. (Class A Stock)	2,664,600		32,694,642
Unilever PLC (United Kingdom)	928,700		29,769,757
			126,453,479
Healthcare Equipment & Supplies — 2.9%
Alcon, Inc. (Switzerland)(a)	357,000		58,672,950
Baxter International, Inc.	572,300		33,582,564
			92,255,514
Healthcare Providers & Services — 5.1%
Aetna, Inc.	707,800		22,437,260
Express Scripts, Inc.*	66,700		5,766,215
Medco Health Solutions, Inc.*	904,300		57,793,813
Omnicare, Inc.	1,590,900		38,467,962
WellPoint, Inc.*	663,300		38,663,757
			163,129,007
Hotels, Restaurants & Leisure — 0.6%
Yum! Brands, Inc.	550,600		19,254,482
Household Products — 0.7%
Colgate-Palmolive Co.	290,800		23,889,220
Independent Power Producers & Energy Traders — 0.9%
NRG Energy, Inc.*(a)	1,248,800		29,484,168
Insurance — 0.7%
Travelers Cos., Inc. (The)	464,400		23,154,984
Internet & Catalog Retail — 2.4%
Amazon.com, Inc.*	575,500		77,416,260
Internet Software & Services — 4.8%
Baidu, Inc., ADR (Cayman Islands)*(a)	54,732		22,507,440
Google, Inc. (Class A Stock)*	149,900		92,935,002
IAC/InterActiveCorp*(a)	1,824,050		37,356,544
			152,798,986
IT Services — 3.2%
MasterCard, Inc. (Class A Stock)(a)	177,100		45,334,058
Visa, Inc. (Class A Stock)(a)	637,230		55,732,136
			101,066,194
Media — 3.4%
Comcast Corp. (Class A Stock)	2,299,820		38,774,965
Liberty Global, Inc. (Class C Stock)*(a)	1,386,250		30,289,563
Walt Disney Co. (The)	1,244,180		40,124,805
			109,189,333

SEE NOTES TO FINANCIAL STATEMENTS.

A44

	EQUITY PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Metals & Mining — 2.1%
Freeport-McMoRan Copper & Gold, Inc.*	420,360	$	33,750,705
Kinross Gold Corp. (Canada)(a)	1,846,600		33,977,440
			67,728,145
Multi-Line Retail — 0.9%
Kohl’s Corp.*	513,700		27,703,841
Multi-Utilities — 1.1%
Sempra Energy	629,986		35,266,616
Oil, Gas & Consumable Fuels — 11.7%
Apache Corp.	467,100		48,190,707
Canadian Natural Resources Ltd. (Canada)	469,500		33,780,525
EOG Resources, Inc.	342,900		33,364,170
Hess Corp.	166,600		10,079,300
Noble Energy, Inc.	307,100		21,871,662
Occidental Petroleum Corp.	1,146,900		93,300,315
Petroleo Brasileiro SA, ADR (Brazil)	964,000		45,963,520
Suncor Energy, Inc. (XNYS) (Canada)	157,500		5,561,325
Suncor Energy, Inc. (XTSE) (Canada)	922,547		32,823,038
Williams Cos., Inc. (The)	1,607,100		33,877,668
XTO Energy, Inc.	341,478		15,888,971
			374,701,201
Pharmaceuticals — 5.2%
Abbott Laboratories	460,305		24,851,867
Novartis AG, ADR (Switzerland)(a)	546,400		29,740,552
Pfizer, Inc.	1,304,400		23,727,036
Sanofi-Aventis SA, ADR (France)(a)	828,400		32,531,268
Shire PLC, ADR (United Kingdom)(a)	335,500		19,693,850
Teva Pharmaceutical Industries Ltd., ADR (Israel)	611,700		34,365,306
			164,909,879
Road & Rail — 1.9%
Union Pacific Corp.	933,900		59,676,210
Semiconductors & Semiconductor Equipment — 2.4%
Advanced Micro Devices, Inc.*(a)	5,177,400		50,117,232
Intel Corp.	1,346,900		27,476,760
			77,593,992
Software — 7.6%
Adobe Systems, Inc.*	1,359,400		49,998,732
CA, Inc.	2,123,100		47,684,826
Microsoft Corp.	2,275,600		69,383,044
Symantec Corp.*	2,860,400		51,172,556
VMware, Inc. (Class A Stock)*(a)	611,700		25,923,846
			244,163,004
Textiles, Apparel & Luxury Goods — 1.9%
Coach, Inc.	699,100		25,538,123
NIKE, Inc. (Class B Stock)(a)	533,030		35,217,292
			60,755,415

COMMON STOCKS (continued)	Shares	Value (Note 2)
Wireless Telecommunication Services — 1.1%
NII Holdings, Inc.*	1,045,985	$	35,124,176
TOTAL COMMON STOCKS (cost $2,367,080,432)			3,114,707,415
PREFERRED STOCK — 0.7%
Diversified Financial Services
Bank of America Corp. Common Equivalent Securities, 10.00%, CVT (cost $22,599,752)	1,502,000		22,409,840
TOTAL LONG-TERM INVESTMENTS (cost $2,389,680,184)			3,137,117,255
SHORT-TERM INVESTMENT — 10.4%
AFFILIATED MONEY MARKET MUTUAL FUND
Dryden Core Investment Fund — Taxable Money Market Series (cost $332,803,820; includes $256,064,708 of cash collateral for securities on loan)(b)(w) (Note 4)	332,803,820		332,803,820
TOTAL INVESTMENTS(o) — 108.6% (cost $2,722,484,004)			3,469,921,075
LIABILITIES IN EXCESS OF OTHER ASSETS — (8.6)%			(274,381,071	)
NET ASSETS — 100.0%		$	3,195,540,004

The following abbreviations are used in Portfolio descriptions:

ADR	American Depositary Receipt
CVT	Convertible Security
XNYS	New York Stock Exchange
XTSE	Toronto Stock Exchange

* Non-income producing security.

(a) All or a portion of security is on loan. The aggregate market value of such securities is $248,151,005; cash collateral of $256,064,708 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(o) As of December 31, 2009, one security representing $29,769,757 and 0.9% of net assets was fair valued in accordance with the policies adopted by the Board of Trustees.

(w) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A45

	EQUITY PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

Investments in Securities	Level 1		Level 2		Level 3
Common Stocks	$	3,084,937,658	$	29,769,757	$	—
Preferred Stock		22,409,840		—		—
Affiliated Money Market Mutual Fund		332,803,820		—		—
		3,440,151,318		29,769,757		—
Other Financial Instruments*		—		—		—
Total	$	3,440,151,318	$	29,769,757	$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2009 and 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 were as follows:

Oil, Gas & Consumable Fuels	11.7	%
Affiliated Money Market Mutual Fund (8.0% represents investments purchased with collateral from securities on loan)	10.4
Software	7.6
Capital Markets	5.9
Computers & Peripherals	5.6
Pharmaceuticals	5.2
Healthcare Providers & Services	5.1
Internet Software & Services	4.8
Food Products	4.0
Communications Equipment	3.5
Media	3.4
IT Services	3.2
Healthcare Equipment & Supplies	2.9
Food & Staples Retailing	2.6
Semiconductors & Semiconductor Equipment	2.4
Internet & Catalog Retail	2.4
Diversified Consumer Services	2.4
Energy Equipment & Services	2.3
Metals & Mining	2.1
Biotechnology	2.1
Diversified Financial Services	2.0
Textiles, Apparel & Luxury Goods	1.9
Road & Rail	1.9
Commercial Services & Supplies	1.2
Consumer Finance	1.1
Multi-Utilities	1.1
Wireless Telecommunication Services	1.1
Aerospace & Defense	1.1
Chemicals	1.0
Independent Power Producers & Energy Traders	0.9

Multi-Line Retail	0.9	%
Auto Components	0.9
Household Products	0.7
Insurance	0.7
Beverages	0.7
Hotels, Restaurants & Leisure	0.6
Electronic Components	0.6
Commercial Banks	0.6
	108.6
Liabilities in excess of other assets	(8.6	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A46

EQUITY PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES December 31, 2009

ASSETS
Investments at value, including securities on loan of $248,151,005:
Unaffiliated investments (cost $2,389,680,184)	$	3,137,117,255
Affiliated investments (cost $332,803,820)		332,803,820
Cash		5,231,674
Receivable for investments sold		39,648,244
Dividends receivable		3,072,746
Receivable for Series shares sold		24,929
Prepaid expenses		26,956
Total Assets		3,517,925,624
LIABILITIES
Collateral for securities on loan		256,064,708
Payable for investments purchased		64,415,500
Management fee payable		1,209,469
Payable for Series shares repurchased		367,292
Accrued expenses and other liabilities		313,161
Payable to custodian		13,177
Deferred trustees’ fees		1,577
Affiliated transfer agent fees payable		595
Distribution fee payable		88
Administration fee payable		53
Total Liabilities		322,385,620
NET ASSETS	$	3,195,540,004
Net assets were comprised of:
Paid-in capital	$	3,238,063,916
Retained earnings		(42,523,912	)
Net assets, December 31, 2009	$	3,195,540,004
Class I:
Net asset value and redemption price per share, $3,195,121,901 / 143,295,948 outstanding shares of beneficial interest	$	22.30
Class II:
Net asset value and redemption price per share, $418,103 / 18,616 outstanding shares of beneficial interest	$	22.46

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated dividend income (net of $958,775 foreign withholding tax)	$	35,882,300
Affiliated income from securities lending, net		1,212,345
Affiliated dividend income		398,941
		37,493,586
EXPENSES
Management fee		12,194,789
Distribution fee—Class II		891
Administration fee—Class II		535
Custodian’s fees and expenses		397,000
Shareholders’ reports		310,000
Insurance expenses		55,000
Trustees’ fees		43,000
Commitment fee on syndicated credit agreement		22,000
Audit fee		20,000
Legal fees and expenses		19,000
Transfer agent’s fees and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Miscellaneous		18,793
Total expenses		13,091,008
NET INVESTMENT INCOME		24,402,578
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized loss on:
Investment transactions		(316,965,250	)
Foreign currency transactions		(169,716	)
		(317,134,966	)
Net change in unrealized appreciation (depreciation) on:
Investments		1,193,076,920
Foreign currencies		(9,550	)
		1,193,067,370
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		875,932,404
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	900,334,982

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	24,402,578		$	43,413,611
Net realized loss on investment and foreign currency transactions		(317,134,966	)		(413,360,852	)
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		1,193,067,370			(1,236,215,453	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		900,334,982			(1,606,162,694	)
DISTRIBUTIONS
Class I		(43,394,722	)		(436,963,357	)
Class II		(3,037	)		(63,526	)
TOTAL DISTRIBUTIONS		(43,397,759	)		(437,026,883	)
SERIES SHARE TRANSACTIONS (NOTE 7):
Series shares sold		26,713,318			31,235,697
Series shares issued in reinvestment of distributions		43,397,759			437,026,883
Series shares repurchased		(252,864,006	)		(328,918,685	)
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(182,752,929	)		139,343,895
TOTAL INCREASE (DECREASE) IN NET ASSETS		674,184,294			(1,903,845,682	)
NET ASSETS:
Beginning of year		2,521,355,710			4,425,201,392
End of year	$	3,195,540,004		$	2,521,355,710

SEE NOTES TO FINANCIAL STATEMENTS.

A47

	FLEXIBLE MANAGED PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 93.6%
COMMON STOCKS — 62.3%	Shares	Value (Note 2)
Aerospace & Defense — 2.2%
Alliant Techsystems, Inc.(a)(b)	53,700	$	4,740,099
Dyncorp International, Inc. (Class A Stock)(b)	11,900		170,765
General Dynamics Corp.	210,300		14,336,151
ITT Corp.	32,800		1,631,472
L-3 Communications Holdings, Inc.	67,600		5,877,820
Lockheed Martin Corp.	37,600		2,833,160
Northrop Grumman Corp.	235,400		13,147,090
Raytheon Co.	267,600		13,786,752
United Technologies Corp.	94,800		6,580,068
			63,103,377
Air Freight & Logistics — 1.0%
C.H. Robinson Worldwide, Inc.	126,600		7,435,218
FedEx Corp.	108,500		9,054,325
United Parcel Service, Inc. (Class B Stock)	240,900		13,820,433
			30,309,976
Airlines
Alaska Air Group, Inc.(b)	32,200		1,112,832
Auto Components — 0.3%
Cooper Tire & Rubber Co.	40,100		804,005
Johnson Controls, Inc.	89,300		2,432,532
TRW Automotive Holdings Corp.(a)(b)	197,300		4,711,524
			7,948,061
Automobiles — 0.5%
Ford Motor Co.(a)(b)	1,377,100		13,771,000
Thor Industries, Inc.	14,700		461,580
			14,232,580
Beverages — 1.5%
Coca-Cola Co. (The)(a)	275,100		15,680,700
Coca-Cola Enterprises, Inc.	261,500		5,543,800
Dr. Pepper Snapple Group, Inc.	113,700		3,217,710
Molson Coors Brewing Co. (Class B Stock)	24,900		1,124,484
PepsiCo, Inc.	304,920		18,539,136
			44,105,830
Biotechnology — 0.7%
Amgen, Inc.(b)	253,008		14,312,663
Biogen Idec, Inc.(a)(b)	95,200		5,093,200
Gilead Sciences, Inc.(b)	35,600		1,540,768
			20,946,631
Building Products — 0.1%
Owens Corning(b)	57,100		1,464,044
Capital Markets — 1.7%
Ameriprise Financial, Inc.	45,400		1,762,428
Bank of New York Mellon Corp. (The)	109,700		3,068,309
Franklin Resources, Inc.	17,700		1,864,695
Goldman Sachs Group, Inc. (The)	142,300		24,025,932
Invesco Ltd.	58,900		1,383,561
Morgan Stanley	261,890		7,751,944
State Street Corp.	95,300		4,149,362
T. Rowe Price Group, Inc.(a)	94,100		5,010,825
			49,017,056

COMMON STOCKS (continued)	Shares	Value (Note 2)
Chemicals — 0.8%
Air Products & Chemicals, Inc.	39,500	$	3,201,870
E.I. du Pont de Nemours & Co.	158,600		5,340,062
Ecolab, Inc.	129,500		5,773,110
Koppers Holdings, Inc.	18,600		566,184
Lubrizol Corp.	32,200		2,348,990
Nalco Holding Co.	21,000		535,710
NewMarket Corp.	26,100		2,995,497
Praxair, Inc.	29,100		2,337,021
Scotts Miracle-Gro Co. (The) (Class A Stock)	17,500		687,925
			23,786,369
Commercial Banks — 1.3%
Community Bank System, Inc.	43,400		838,054
FNB Corp.	30,000		203,700
Fulton Financial Corp.	86,200		751,664
Huntington Bancshares, Inc.	910,000		3,321,500
International Bancshares Corp.(a)	20,100		380,493
KeyCorp	141,200		783,660
Regions Financial Corp.	1,067,600		5,647,604
Susquehanna Bancshares, Inc.(a)	176,000		1,036,640
U.S. Bancorp	145,332		3,271,423
Webster Financial Corp.	28,200		334,734
Wells Fargo & Co.	757,612		20,447,948
			37,017,420
Commercial Services & Supplies — 0.2%
Avery Dennison Corp.	100,200		3,656,298
RR Donnelley & Sons Co.	78,300		1,743,741
Waste Management, Inc.(a)	42,800		1,447,068
			6,847,107
Communications Equipment — 1.2%
Arris Group, Inc.(b)	37,100		424,053
Cisco Systems, Inc.(b)	1,176,700		28,170,198
Harris Corp.	14,600		694,230
JDS Uniphase Corp.(b)	34,400		283,800
Juniper Networks, Inc.(a)(b)	56,000		1,493,520
QUALCOMM, Inc.	93,500		4,325,310
			35,391,111
Computers & Peripherals — 4.2%
Apple, Inc.(b)	197,400		41,623,764
Dell, Inc.(b)	259,300		3,723,548
EMC Corp.(b)	405,900		7,091,073
Hewlett-Packard Co.	443,465		22,842,882
International Business Machines Corp.	234,600		30,709,140
Novatel Wireless, Inc.(a)(b)	12,100		96,437
Seagate Technology(a)	273,300		4,971,327
Teradata Corp.(b)	21,600		678,888
Western Digital Corp.(b)	210,100		9,275,915
			121,012,974
Consumer Finance — 0.9%
American Express Co.	319,400		12,942,088
Capital One Financial Corp.(a)	296,100		11,352,474
First Cash Financial Services, Inc.(a)(b)	16,700		370,573
			24,665,135

SEE NOTES TO FINANCIAL STATEMENTS.

A48

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Containers & Packaging — 0.3%
Owens-Illinois, Inc.(b)	96,200	$	3,162,094
Pactiv Corp.(b)	214,500		5,178,030
Rock-Tenn Co. (Class A Stock)	6,200		312,542
			8,652,666
Distributors
Genuine Parts Co.	10,900		413,764
Diversified Consumer Services — 0.1%
DeVry, Inc.	23,900		1,355,847
Regis Corp.	23,500		365,895
Strayer Education, Inc.	2,000		424,980
			2,146,722
Diversified Financial Services — 3.1%
Bank of America Corp.	2,418,182		36,417,821
Citigroup, Inc.	3,776,900		12,501,539
CME Group, Inc.	6,400		2,150,080
JPMorgan Chase & Co.	909,694		37,906,949
NASDAQ OMX Group, Inc. (The)(b)	40,700		806,674
NYSE Euronext	26,600		672,980
			90,456,043
Diversified Telecommunication Services — 2.2%
AT&T, Inc.	1,239,647		34,747,305
CenturyTel, Inc.(a)	66,800		2,418,828
Verizon Communications, Inc.	838,288		27,772,482
			64,938,615
Electrical Equipment — 0.1%
A.O. Smith Corp.	9,700		420,883
Emerson Electric Co.	74,500		3,173,700
			3,594,583
Electrical Utilities — 0.8%
Allegheny Energy, Inc.	98,800		2,319,824
American Electric Power Co., Inc.	82,300		2,863,217
DPL, Inc.	34,300		946,680
Edison International	144,300		5,018,754
Exelon Corp.	17,600		860,112
FPL Group, Inc.	220,400		11,641,528
NV Energy, Inc.	32,200		398,636
			24,048,751
Electronic Equipment & Instruments — 0.5%
Corning, Inc.	473,500		9,143,285
Jabil Circuit, Inc.	296,200		5,144,994
Tech Data Corp.(b)	15,800		737,228
			15,025,507
Energy Equipment & Services — 0.7%
Cal Dive International, Inc.(b)	197,900		1,496,124
CARBO Ceramics, Inc.(a)	3,300		224,961
Dresser-Rand Group, Inc.(b)	62,300		1,969,303
FMC Technologies, Inc.(b)	98,800		5,714,592
Helix Energy Solutions Group, Inc.(b)	75,800		890,650
Schlumberger Ltd.	146,100		9,509,649
			19,805,279

COMMON STOCKS (continued)	Shares	Value (Note 2)
Food & Staples Retailing — 1.2%
Costco Wholesale Corp.	88,700	$	5,248,379
SUPERVALU, Inc.	76,800		976,128
Wal-Mart Stores, Inc.	493,400		26,372,230
Whole Foods Market, Inc.(a)(b)	102,200		2,805,390
			35,402,127
Food Products — 1.1%
Archer-Daniels-Midland Co.	256,000		8,015,360
Chiquita Brands International, Inc.(a)(b)	43,300		781,132
Dean Foods Co.(a)(b)	107,400		1,937,496
General Mills, Inc.	8,300		587,723
Kellogg Co.	83,300		4,431,560
Kraft Foods, Inc. (Class A Stock)	425,300		11,559,654
Lancaster Colony Corp.	13,800		685,860
Sanderson Farms, Inc.	54,400		2,293,504
Tyson Foods, Inc. (Class A Stock)	190,700		2,339,889
			32,632,178
Gas Utilities — 0.1%
AGL Resources, Inc.	10,000		364,700
UGI Corp.	53,700		1,299,003
			1,663,703
Healthcare Equipment & Supplies — 1.5%
American Medical Systems Holdings, Inc.(a)(b)	109,200		2,106,468
Baxter International, Inc.	123,700		7,258,716
Carefusion Corp.(b)	206,800		5,172,068
Hospira, Inc.(b)	74,700		3,809,700
Intuitive Surgical, Inc.(a)(b)	36,800		11,162,176
Medtronic, Inc.	321,900		14,157,162
Meridian Bioscience, Inc.	24,000		517,200
Quidel Corp.(b)	54,100		745,498
Sirona Dental Systems, Inc.(b)	9,000		285,660
			45,214,648
Healthcare Providers & Services — 1.2%
Laboratory Corp. of America Holdings(a)(b)	33,500		2,507,140
Medco Health Solutions, Inc.(b)	83,000		5,304,530
Quest Diagnostics, Inc.	140,500		8,483,390
UnitedHealth Group, Inc.	67,900		2,069,592
WellPoint, Inc.(b)	260,700		15,196,203
			33,560,855
Hotels, Restaurants & Leisure — 0.5%
McDonald’s Corp.	132,100		8,248,324
Texas Roadhouse, Inc. (Class A Stock)(a)(b)	48,900		549,147
Yum! Brands, Inc.	201,300		7,039,461
			15,836,932
Household Durables — 0.4%
American Greetings Corp. (Class A Stock)	25,200		549,108
Leggett & Platt, Inc.	251,500		5,130,600
Newell Rubbermaid, Inc.	182,400		2,737,824
Tempur-Pedic International, Inc.(b)	79,100		1,869,133

SEE NOTES TO FINANCIAL STATEMENTS.

A49

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Household Durables (continued)
Tupperware Brands Corp.	9,900	$	461,043
Whirlpool Corp.	26,200		2,113,292
			12,861,000
Household Products — 1.8%
Clorox Co.(a)	40,000		2,440,000
Colgate-Palmolive Co.	58,600		4,813,990
Kimberly-Clark Corp.	118,100		7,524,151
Procter & Gamble Co. (The)	635,005		38,500,353
			53,278,494
Independent Power Producers & Energy Traders — 0.3%
AES Corp. (The)(b)	9,500		126,445
Constellation Energy Group, Inc.	234,300		8,240,331
Mirant Corp.(b)	98,700		1,507,149
			9,873,925
Industrial Conglomerates — 1.4%
3M Co.	218,700		18,079,929
General Electric Co.	1,398,300		21,156,279
McDermott International, Inc. (Panama)(b)	24,300		583,443
			39,819,651
Insurance — 1.0%
Aflac, Inc.,	99,500		4,601,875
Allied World Assurance Co. Holdings, Ltd. (Bermuda)	39,500		1,819,765
Argo Group International Holdings Ltd. (Bermuda)(b)	15,200		442,928
Axis Capital Holdings Ltd.	14,600		414,786
Chubb Corp. (The)	74,500		3,663,910
Endurance Specialty Holdings Ltd. (Bermuda)	95,100		3,540,573
Lincoln National Corp.	92,300		2,296,424
MetLife, Inc.	154,200		5,450,970
PartnerRe Ltd. (Bermuda)	18,800		1,403,608
Travelers Cos., Inc. (The)	70,800		3,530,088
Unum Group	167,300		3,265,696
			30,430,623
Internet & Catalog Retail
PetMed Express, Inc.(a)	45,800		807,454
Internet Software & Services — 1.1%
DealerTrack Holdings, Inc.(a)(b)	10,200		191,658
EarthLink, Inc.	42,900		356,499
Google, Inc. (Class A Stock)(b)	46,100		28,581,078
IAC/InterActiveCorp(b)	88,100		1,804,288
j2 Global Communications, Inc.(b)	16,000		325,600
			31,259,123
IT Services — 1.2%
Convergys Corp.(b)	37,800		406,350
DST Systems, Inc.(b)	14,800		644,540
Fidelity National Information Services, Inc.	113,500		2,660,440
Fiserv, Inc.(b)	16,600		804,768
Mastercard, Inc. (Class A Stock)(a)	20,200		5,170,796
Visa, Inc. (Class A Stock)	156,800		13,713,728
Western Union Co. (The)	532,100		10,030,085
			33,430,707

COMMON STOCKS (continued)	Shares	Value (Note 2)
Leisure Equipment & Products — 0.1%
Hasbro, Inc.	49,700	$	1,593,382
Smith & Wesson Holding Corp.(a)(b)	132,700		542,743
			2,136,125
Life Sciences Tools & Services — 0.7%
Bruker Corp.(b)	37,900		457,074
Mettler-Toledo International, Inc.(b)	20,300		2,131,297
Millipore Corp.(b)	59,000		4,268,650
Thermo Fisher Scientific, Inc.(b)	248,900		11,870,041
Waters Corp.(a)(b)	23,400		1,449,864
			20,176,926
Machinery — 0.7%
Dover Corp.	80,200		3,337,122
Flowserve Corp.	30,600		2,892,618
Illinois Tool Works, Inc.	134,000		6,430,660
Joy Global, Inc.	46,400		2,393,776
Oshkosh Corp.	98,700		3,654,861
Toro Co.	17,700		740,037
			19,449,074
Media — 1.6%
Comcast Corp. (Class A Stock)	1,100,973		18,562,405
Gannett Co., Inc.	471,700		7,004,745
Scholastic Corp.	7,800		232,674
Time Warner Cable, Inc.	20,000		827,800
Time Warner, Inc.	198,366		5,780,385
Viacom, Inc. (Class B Stock)(b)	320,500		9,528,465
Walt Disney Co. (The)	162,800		5,250,300
			47,186,774
Metals & Mining — 0.9%
Freeport-McMoRan Copper & Gold, Inc.(b)	203,900		16,371,131
Nucor Corp.	98,400		4,590,360
Southern Copper Corp.(a)	163,200		5,370,912
Walter Energy, Inc.	4,600		346,426
			26,678,829
Multiline Retail — 0.8%
99 Cents Only Stores(b)	34,400		449,608
Dollar Tree, Inc.(b)	25,800		1,246,140
Family Dollar Stores, Inc.	179,000		4,981,570
Target Corp.	342,100		16,547,377
			23,224,695
Multi-Utilities — 0.6%
Dominion Resources, Inc.	117,700		4,580,884
Public Service Enterprise Group, Inc.	214,100		7,118,825
Sempra Energy	92,900		5,200,542
TECO Energy, Inc.	27,300		442,806
Xcel Energy, Inc.	49,000		1,039,780
			18,382,837
Office Electronics — 0.1%
Xerox Corp.	313,600		2,653,056
Oil, Gas & Consumable Fuels — 6.1%
Anadarko Petroleum Corp.	92,900		5,798,818
Apache Corp.	22,300		2,300,691

SEE NOTES TO FINANCIAL STATEMENTS.

A50

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Chesapeake Energy Corp.	193,700	$	5,012,956
Chevron Corp.	484,056		37,267,472
ConocoPhillips	405,434		20,705,514
Devon Energy Corp.	120,100		8,827,350
El Paso Corp.	159,900		1,571,817
Exxon Mobil Corp.	880,416		60,035,567
Hess Corp.	9,000		544,500
Marathon Oil Corp.	313,500		9,787,470
Murphy Oil Corp.	111,600		6,048,720
Occidental Petroleum Corp.	124,500		10,128,075
Spectra Energy Corp.	339,700		6,967,247
Stone Energy Corp.(a)(b)	10,200		184,110
Western Refining, Inc.(a)(b)	83,800		394,698
World Fuel Services Corp.	12,700		340,233
			175,915,238
Personal Products
Avon Products, Inc.	32,900		1,036,350
Pharmaceuticals — 4.2%
Abbott Laboratories	178,500		9,637,215
Allergan, Inc.	160,500		10,113,105
Bristol-Myers Squibb Co.(a)	696,100		17,576,525
Eli Lilly & Co.	249,700		8,916,787
ENDO Pharmaceuticals Holdings, Inc.(b)	17,200		352,772
Johnson & Johnson	526,998		33,943,941
Merck & Co., Inc.	332,400		12,145,896
Par Pharmaceutical Cos., Inc.(b)	34,800		941,688
Perrigo Co.	7,800		310,752
Pfizer, Inc.	1,326,797		24,134,438
Valeant Pharmaceuticals International(a)(b)	102,700		3,264,833
			121,337,952
Professional Services — 0.3%
Equifax, Inc.	175,800		5,430,462
Robert Half International, Inc.(a)	29,600		791,208
Watson Wyatt Worldwide, Inc. (Class A Stock)	30,900		1,468,368
			7,690,038
Real Estate Investment Trusts — 0.5%
Annaly Capital Management, Inc.	437,800		7,595,830
Anworth Mortgage Asset Corp.	86,500		605,500
Brandywine Realty Trust(a)	50,100		571,140
CBL & Associates Properties, Inc.	101,700		983,439
Chimera Investment Corp.	546,900		2,121,972
MFA Financial, Inc.	552,900		4,063,815
			15,941,696
Road & Rail — 0.3%
Avis Budget Group, Inc.(b)	163,300		2,142,496
CSX Corp.	35,300		1,711,697
Dollar Thrifty Automotive Group, Inc.(b)	50,700		1,298,427
Ryder System, Inc.	79,100		3,256,547
Werner Enterprises, Inc.	11,500		227,585
			8,636,752

COMMON STOCKS (continued)	Shares	Value (Note 2)
Semiconductors & Semiconductor Equipment — 2.1%
Broadcom Corp. (Class A Stock)(a)(b)	164,600	$	5,176,670
Intel Corp.	1,484,000		30,273,600
LSI Corp.(b)	203,800		1,224,838
Marvell Technology Group Ltd.(b)	49,600		1,029,200
Micron Technology, Inc.(b)	356,100		3,760,416
National Semiconductor Corp.	103,900		1,595,904
PMC — Sierra, Inc.(b)	71,200		616,592
Semtech Corp.(b)	32,600		554,526
Texas Instruments, Inc.	619,000		16,131,140
Zoran Corp.(b)	21,300		235,365
			60,598,251
Software — 2.6%
Adobe Systems, Inc.(b)	161,700		5,947,326
BMC Software, Inc.(b)	68,300		2,738,830
CA, Inc.	34,900		783,854
Intuit, Inc.(b)	96,700		2,969,657
McAfee, Inc.(a)(b)	132,000		5,355,240
Microsoft Corp.	1,264,400		38,551,556
Novell, Inc.(b)	93,100		386,365
Oracle Corp.	302,900		7,433,166
Pegasystems, Inc.	20,000		680,000
Symantec Corp.(b)	517,700		9,261,653
			74,107,647
Specialty Retail — 1.5%
AutoNation, Inc.(a)(b)	17,600		337,040
Best Buy Co., Inc.	255,000		10,062,300
Chico’s FAS, Inc.(b)	465,400		6,538,870
Gap, Inc. (The)	208,200		4,361,790
Home Depot, Inc. (The)	118,250		3,420,972
Rent-A-Center, Inc. (Class A Stock)(b)	10,000		177,200
Ross Stores, Inc.	194,200		8,294,282
Sally Beauty Holdings, Inc.(a)(b)	85,600		654,840
Sonic Automotive, Inc. (Class A Stock)(b)	113,600		1,180,304
TJX Cos., Inc.	227,500		8,315,125
			43,342,723
Textiles, Apparel & Luxury Goods — 0.6%
Carter’s, Inc.(b)	30,900		811,125
Coach, Inc.	360,700		13,176,371
Jones Apparel Group, Inc.	85,400		1,371,524
Phillips-Van Heusen Corp.	27,600		1,122,768
			16,481,788
Tobacco — 1.1%
Altria Group, Inc.	504,700		9,907,261
Lorillard, Inc.	6,800		545,564
Philip Morris International, Inc. (Switzerland)	284,400		13,705,236
Reynolds American, Inc.	142,600		7,553,522
			31,711,583
Trading Companies & Distributors — 0.2%
W.W. Grainger, Inc.(a)	70,000		6,778,100
Wireless Telecommunication Services — 0.1%
Sprint Nextel Corp.(b)	482,800		1,767,048
TOTAL COMMON STOCKS (cost $1,512,480,744)			1,811,347,335

SEE NOTES TO FINANCIAL STATEMENTS.

A51

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

ASSET-BACKED SECURITIES — 0.5%	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
ARES CLO Funds (Cayman Islands), Ser. 2003-7AW, Class A1A, 144A(c)	A2	0.625%	05/08/15	$	2,498	$	2,354,674
Ballyrock CDO Ltd. (Cayman Islands), Ser. 2003-2A, Class A, 144A(c)	Aa2	0.799%	11/20/15		2,771		2,577,114
Bank of America Credit Card Trust, Ser. 2006-C5, Class C5(c)	Baa1	0.633%	01/15/16		3,209		2,765,847
Chatham Light CLO Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(c)	Aa1	0.531%	08/03/19		495		450,560
Citibank Credit Card Issuance Trust, Ser. 2006-C1, Class C1(c)	Baa2	0.633%	02/20/15		1,350		1,234,127
Granite Ventures Ltd. (Cayman Islands), Ser. 2005-2A, Class A1, 144A(c)	Aaa	0.544%	12/15/17		3,200		2,992,000
Mountain Capital CLO Ltd. (Cayman Islands), Ser. 2004-3A, Class A1LA, 144A(c)	Aaa	0.688%	02/15/16		2,336		2,219,029
SVO VOI Mortgage Corp., Ser. 2005-AA, Class A, 144A	Aaa	5.250%	02/20/21		382		352,033
TOTAL ASSET-BACKED SECURITIES (cost $15,492,437)							14,945,384
BANK LOANS — 0.5%
Automotive
Oshkosh Truck Corp.(c)(d)	B2	6.269%	12/06/13		211		210,446
Cable
Insight Midwest Holdings LLC(c)(d)	B1	1.790%	10/06/13		1,005		943,627
Consumer
Pilot Travel Centers LLC(c)(d)	Ba2	TBA	12/31/15		300		301,197
Electric — 0.1%
NRG Energy, Inc.(c)(d)	Baa3	0.151%	02/01/13		177		168,299
NRG Energy, Inc.(c)(d)	Baa3	1.996%	02/01/13		301		285,544
Texas Competitive Electric Holdings Co. LLC(c)(d)	B1	3.735%	10/10/14		978		794,219
							1,248,062
Healthcare & Pharmaceutical — 0.2%
DaVita, Inc.(c)(d)	Ba1	1.748%	10/05/12		1,200		1,161,667
HCA, Inc.(c)(d)	Ba3	2.501%	11/18/13		1,481		1,412,592
Health Management Association(c)(d)	B1	2.001%	02/28/14		1,104		1,026,794
Warner Chilcott Corp.(c)(d)	B1	5.500%	10/30/14		979		979,572
Warner Chilcott Corp.(c)(d)	B1	5.750%	04/30/15		1,077		1,077,530
Warner Chilcott Corp.(c)(d)	B1	5.750%	04/30/15		489		489,786
							6,147,941
Media & Entertainment — 0.1%
Discovery Communications, Inc.(c)(d)	Baa3	5.250%	05/14/14		1,056		1,064,600
Paper
Domtar Corp.(c)(d)	Baa3	1.608%	03/05/14		523		507,854
Pipelines & Other
Enterprise GP Holdings LP(c)(d)	Ba2	2.514%	11/08/14		980		934,675
Technology — 0.1%
Fidelity National Information Services, Inc.(c)(d)	Ba1	4.481%	01/18/12		119		118,712
First Data Corp.(c)(d)	B1	2.983%	09/24/14		1,173		1,039,082
First Data Corp.(c)(d)	B1	2.999%	09/24/14		1,466		1,296,715
Flextronics International Ltd. (Singapore)(c)(d)	Ba1	2.514%	10/01/14		987		912,245
Flextronics International Ltd. (Singapore)(c)(d)	Ba1	2.534%	10/01/14		284		262,139
Sensata Technologies (Netherlands)(c)(d)	B2	2.031%	04/27/13		335		297,216
							3,926,109
TOTAL BANK LOANS (cost $16,000,310)							15,284,511
COLLATERALIZED MORTGAGE OBLIGATIONS — 0.4%
Banc of America Alternative Loan Trust, Ser. 2005-12, Class 3CB1	B3	6.000%	01/25/36		3,767		2,859,307
Banc of America Mortgage Securities, Inc., Ser. 2005-A, Class 2A1(c)	Ba1	4.439%	02/25/35		928		711,909

SEE NOTES TO FINANCIAL STATEMENTS.

A52

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COLLATERALIZED MORTGAGE OBLIGATIONS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Banc of America Mortgage Securities, Inc., Ser. 2005-B, Class 2A1(c)	Ba2	4.375%	03/25/35	$	689	$	546,071
Chase Mortgage Finance Corp., Ser. 2007-A1, Class 1A5(c)	Ba2	3.899%	02/25/37		2,431		2,245,474
Countrywide Alternative Loan Trust, Ser. 2004-18CB, Class 3A1	A1	5.250%	09/25/19		1,018		984,636
JPMorgan Mortgage Trust, Ser. 2007-A1, Class 4A1(c)	B1	4.067%	07/25/35		1,601		1,438,720
Master Alternative Loans Trust, Ser. 2004-4, Class 4A1	Aaa	5.000%	04/25/19		351		331,412
Structured Adjustable Rate Mortgage Loan Trust, Ser. 2004-1, Class 4A3(c)	A1	3.586%	02/25/34		658		544,157
Washington Mutual Alternative Mortgage Pass-Through Certificates, Ser. 2005-1, Class 3A	AAA(e)	5.000%	03/25/20		430		329,648
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $11,505,565)							9,991,334
COMMERCIAL MORTGAGE-BACKED SECURITIES — 3.8%
Banc of America Commercial Mortgage, Inc., Ser. 2004-2, Class A4	Aaa	4.153%	11/10/38		2,800		2,790,025
Banc of America Commercial Mortgage, Inc., Ser. 2005-1, Class ASB(c)	AAA(e)	4.965%	11/10/42		683		700,468
Banc of America Commercial Mortgage, Inc., Ser. 2006-4, Class A3A	Aaa	5.600%	07/10/46		3,700		3,757,954
Banc of America Commercial Mortgage, Inc., Ser. 2007-3, Class A2(c)	Aaa	5.658%	06/10/49		5,900		6,002,933
Banc of America Commercial Mortgage, Inc., Ser. 2007-5, Class A3	AAA(e)	5.620%	02/10/51		1,920		1,863,457
Bear Stearns Commercial Mortgage Securities, Ser. 2005-T18, Class AAB(c)	Aaa	4.823%	02/13/42		1,775		1,791,832
Bear Stearns Commercial Mortgage Securities, Ser. 2005-T20, Class AAB(c)	Aaa	5.134%	10/12/42		2,400		2,461,091
Commercial Mortgage Acceptance Corp., Ser. 1998-C2, Class F, 144A(c)	A-(e)	5.440%	09/15/30		890		847,827
Commercial Mortgage Loan Trust, Ser. 2008-LS1, Class A2(c)	Aaa	6.019%	12/10/49		2,200		2,256,697
Commercial Mortgage Pass-Through Certificates, Ser. 2004-LB2A, Class X2, I/O, 144A(c)	AAA(e)	0.862%	03/10/39		8,370		75,040
Commercial Mortgage Pass-Through Certificates, Ser. 2006-C8, Class A2B	Aaa	5.248%	12/10/46		1,000		1,004,113
Commercial Mortgage Pass-Thru Certificates, Ser. 2006-C7, Class A4(c)	AAA(e)	5.768%	06/10/46		1,500		1,470,883
CS First Boston Mortgage Securities Corp., Ser. 2004-C3, Class A4	Aaa	4.835%	07/15/36		880		881,729
CS First Boston Mortgage Securities Corp., Ser. 2004-C4, Class A4	Aaa	4.283%	10/15/39		1,400		1,401,306
CS First Boston Mortgage Securities Corp., Ser. 2005-C5, Class A4(c)	AAA(e)	5.100%	08/15/38		6,800		6,551,110
CS Mortgage Capital Certificate Corp., Ser. 2006-C1, Class A4(c)	AAA(e)	5.548%	02/15/39		2,700		2,659,617
CW Capital Cobalt Ltd., Ser. 2007-C2, Class A2	Aaa	5.334%	04/15/47		750		754,020
CW Capital Cobalt Ltd., Ser. 2007-C3, Class A3(c)	AAA(e)	5.820%	05/15/46		2,200		2,129,939
DLJ Commercial Mortgage Corp., Ser. 2000-CF1, Class A1B	AAA(e)	7.620%	06/10/33		571		572,053
GE Capital Commercial Mortgage Corp., Ser. 2004-C2, Class X2, I/O, 144A(c)	Aaa	0.597%	03/10/40		16,209		115,815
GMAC Commercial Mortgage Securities, Inc., Ser. 2005-C1, Class A5	AAA(e)	4.697%	05/10/43		2,720		2,653,441
Greenwich Capital Commercial Funding Corp., Ser. 2005-GG5, Class A5(c)	Aaa	5.224%	04/10/37		8,050		7,625,041
Greenwich Capital Commercial Funding Corp., Ser. 2007-GG9, Class A2	Aaa	5.381%	03/10/39		4,000		4,052,193
GS Mortgage Securities Corp. II, Ser. 2006-GG6, Class AAB(c)	AAA(e)	5.587%	04/10/38		6,650		6,613,854
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP1, Class ASB(c)	Aaa	4.853%	03/15/46		3,749		3,810,114
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2005-LDP2, Class ASB	Aaa	4.659%	07/15/42		6,350		6,415,952
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-CB16, Class ASB	Aaa	5.523%	05/12/45		3,900		3,859,570
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP6, Class X2, I/O(c)	Aaa	0.066%	04/15/43		119,690		352,750

SEE NOTES TO FINANCIAL STATEMENTS.

A53

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP7, Class A3A(c)	Aaa	5.875%	04/15/45	$	563	$	561,446
JPMorgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD12, Class A2	Aaa	5.827%	02/15/51		2,050		2,101,978
LB-UBS Commercial Mortgage Trust, Ser. 2004-C6, Class A5(c)	AAA(e)	4.826%	08/15/29		3,910		3,731,096
LB-UBS Commercial Mortgage Trust, Ser. 2006-C6, Class AAB	Aaa	5.341%	09/15/39		3,580		3,529,333
Merrill Lynch Mortgage Trust, Ser. 2004-KEY2, Class A3	Aaa	4.615%	08/12/39		2,000		1,965,275
Merrill Lynch Mortgage Trust, Ser. 2008-C1, Class A2	Aaa	5.425%	02/12/51		150		149,783
Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2006-2, Class A4(c)	Aaa	5.909%	06/12/46		1,795		1,762,177
Morgan Stanley Capital I, Ser. 2006-IQ11, Class A4(c)	AAA(e)	5.770%	10/15/42		2,600		2,572,110
Morgan Stanley Capital I, Ser. 2007-HQ11, Class AAB	Aaa	5.444%	02/12/44		4,600		4,442,838
Morgan Stanley Capital I, Ser. 2007-T27, Class AAB(c)	AAA(e)	5.650%	06/11/42		1,105		1,102,328
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C23, Class A4(c)	Aaa	5.418%	01/15/45		2,500		2,394,716
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C25, Class A3(c)	Aaa	5.705%	05/15/43		5,000		5,030,440
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C25, Class A4(c)	Aaa	5.740%	05/15/43		1,000		985,286
Wachovia Bank Commercial Mortgage Trust, Ser. 2006-C27, Class A2	Aaa	5.624%	07/15/45		3,000		3,071,287
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $105,476,171)							108,870,917
CORPORATE BONDS — 9.6%
Aerospace & Defense — 0.2%
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2	4.750%	08/15/10		2,150		2,182,624
BAE Systems Holdings, Inc., Gtd. Notes, 144A	Baa2	6.375%	06/01/19		725		779,860
Boeing Capital Corp., Sr. Unsec’d. Notes	A2	6.100%	03/01/11		925		977,753
Goodrich Corp., Sr. Unsec’d. Notes	Baa2	6.800%	07/01/36		743		796,572
							4,736,809
Airlines — 0.2%
American Airlines, Inc., Pass-thru Certs., Ser. 01-1	B2	6.817%	05/23/11		2,520		2,419,200
Continental Airlines, Inc., Pass-thru Certs., Ser. 981A	Baa2	6.648%	09/15/17		269		259,421
Continental Airlines, Inc., Pass-thru Certs., Ser. A(a)	Baa2	7.250%	11/10/19		790		803,825
Delta Air Lines, Inc., Pass-thru Certs., Ser. 071A(a)	Baa1	6.821%	08/10/22		455		434,700
Southwest Airlines Co., Sr. Unsec’d. Notes	Baa3	6.500%	03/01/12		1,005		1,069,390
							4,986,536
Automotive
Harley-Davidson Funding Corp., Gtd. Notes, 144A, MTN	Baa1	5.750%	12/15/14		500		507,634
Johnson Controls, Inc., Sr. Unsec’d. Notes	Baa2	5.500%	01/15/16		245		249,183
							756,817
Banking — 1.9%
American Express Co., Sr. Unsec’d. Notes	A3	8.125%	05/20/19		1,925		2,281,242
Banco Bradesco SA (Cayman Islands), Sub. Notes	A2	8.750%	10/24/13		1,760		2,059,200
Bank of America Corp., Sub. Notes	A3	5.750%	08/15/16		1,775		1,786,582
Bank of America Corp., Jr. Sub. Notes(c)	Ba3	8.000%	12/29/49		2,200		2,118,028
Bank of America NA, Sub. Notes	A1	5.300%	03/15/17		930		911,484
Bank of America NA, Sub. Notes	A1	6.000%	10/15/36		410		396,193
Bank One Corp., Sub. Notes	A1	7.875%	08/01/10		2,250		2,345,828
Bear Stearns Cos. LLC (The), Sr. Unsec’d. Notes	Aa3	5.300%	10/30/15		515		544,694
Bear Stearns Cos. LLC (The), Sr. Unsec’d. Notes	Aa3	6.400%	10/02/17		330		359,727
Bear Stearns Cos. LLC (The), Sr. Unsec’d. Notes	Aa3	7.250%	02/01/18		1,175		1,348,727
Capital One Bank USA NA., Sub. Notes	A3	6.500%	06/13/13		20		21,501
Capital One Capital V, Gtd. Notes	Baa2	10.250%	08/15/39		620		720,750
Capital One Capital VI, Gtd. Notes	Baa2	8.875%	05/15/40		1,080		1,150,200

SEE NOTES TO FINANCIAL STATEMENTS.

A54

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Banking (continued)
Capital One Financial Corp., Sr. Unsec’d. Notes, MTN	Baa1	5.700%	09/15/11	$	600	$	630,223
Citigroup, Inc., Sub. Notes	Baa1	5.000%	09/15/14		454		437,667
Citigroup, Inc., Sub. Notes	Baa1	5.625%	08/27/12		2,800		2,879,993
Citigroup, Inc., Sub. Notes	Baa1	6.125%	08/25/36		570		488,829
Citigroup, Inc., Sr. Unsec’d. Notes	A3	6.875%	03/05/38		520		518,969
Citigroup, Inc., Sr. Unsec’d. Notes(a)	A3	8.125%	07/15/39		430		485,318
Citigroup, Inc., Unsec’d. Notes	A3	8.500%	05/22/19		975		1,125,884
Countrywide Financial Corp., Gtd. Notes, MTN	A2	5.800%	06/07/12		1,190		1,263,198
DEPFA ACS Bank (Ireland), Covered Notes, 144A	Aa2	5.125%	03/16/37		1,380		1,014,272
Discover Bank, Sub. Notes	Ba1	8.700%	11/18/19		900		964,219
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes	A1	5.450%	11/01/12		600		645,107
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	5.625%	01/15/17		1,190		1,215,418
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.450%	05/01/36		1,615		1,590,689
Goldman Sachs Group, Inc. (The), Sub. Notes	A2	6.750%	10/01/37		104		106,900
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes(a)	A1	7.500%	02/15/19		1,500		1,748,705
ICICI Bank Ltd. (India), Bonds, 144A(c)	Baa2	0.824%	01/12/10		2,385		2,380,308
ICICI Bank, Ltd. (Singapore), Notes, 144A	Baa2	5.750%	11/16/10		1,410		1,439,788
JPMorgan Chase & Co., Jr. Sub. Notes, Ser. 1(c)	Baa1	7.900%	04/29/49		2,000		2,062,920
JPMorgan Chase Capital XXVI (Capital Security, fixed to floating preferred)(c)	A2	8.000%	05/15/48		28		752,080
JPMorgan Chase Capital XXVII, Gtd. Notes, Ser. AA	A2	7.000%	11/01/39		1,500		1,512,770
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, Ser. C, MTN	A2	4.250%	02/08/10		1,170		1,174,048
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes	A2	4.790%	08/04/10		295		301,096
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, Ser. C, MTN	A2	5.000%	01/15/15		615		625,472
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, MTN	A2	5.770%	07/25/11		520		549,712
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes	A2	6.400%	08/28/17		35		36,833
Merrill Lynch & Co., Inc., Notes, MTN	A2	6.875%	04/25/18		980		1,055,889
Morgan Stanley, Sr. Unsec’d. Notes	A2	5.300%	03/01/13		265		279,309
Morgan Stanley, Sr. Unsec’d. Notes, Ser. E	A2	5.450%	01/09/17		2,345		2,370,129
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.625%	09/23/19		1,415		1,425,344
Morgan Stanley, Sr. Unsec’d. Notes, MTN	A2	5.950%	12/28/17		620		639,493
MUFG Capital Finance 1 Ltd. (Cayman Islands), Gtd. Notes.(c)	A2	6.346%	07/25/49		800		728,117
PNC Funding Corp., Gtd. Notes.(a)	A3	6.700%	06/10/19		1,000		1,118,976
Royal Bank of Scotland Group PLC (United Kingdom), Sr. Unsec’d. Notes, MTN	A1	6.400%	10/21/19		1,775		1,769,302
Santander Central Hispano Issuances Ltd. (Cayman Islands), Gtd. Notes.	Aa3	7.625%	09/14/10		695		728,539
USB Capital XIII Trust, Gtd. Notes	A2	6.625%	12/15/39		775		787,664
Wachovia Bank NA, Sub. Notes(a)	Aa3	7.800%	08/18/10		2,100		2,191,291
Wells Fargo Bank NA, Sub. Notes, Ser. AI	Aa3	4.750%	02/09/15		585		596,520
Wells Fargo Bank NA, Sub. Notes	Aa3	6.450%	02/01/11		65		68,643
Wells Fargo Capital XIII, Gtd. Notes, Ser. G, MTN(c)	Ba1	7.700%	12/29/49		1,000		970,000
							56,723,790
Brokerage
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(f)	NR	5.250%	02/06/12		1,715		334,425
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes, MTN(f)	NR	6.875%	05/02/18		700		145,250
							479,675
Building Materials & Construction — 0.1%
Hanson Ltd. (United Kingdom), Gtd. Notes	B1	7.875%	09/27/10		1,000		1,036,230
Lafarge SA (France), Sr. Unsec’d. Notes	Baa3	6.150%	07/15/11		910		948,296
							1,984,526
Cable — 0.4%
Comcast Cable Communications Holdings, Inc., Gtd. Notes	Baa1	9.455%	11/15/22		255		327,967
Comcast Corp., Gtd. Notes	Baa1	6.400%	05/15/38		570		586,546
Comcast Corp., Gtd. Notes	Baa1	6.450%	03/15/37		155		159,816

SEE NOTES TO FINANCIAL STATEMENTS.

A55

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†		Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Cable (continued)
Comcast Corp., Gtd. Notes	Baa1		6.500%	11/15/35	$	450	$	466,587
Comcast Corp., Gtd. Notes	Baa1		6.950%	08/15/37		605		659,385
Cox Communications, Inc., Sr. Unsec’d. Notes	Baa3		6.750%	03/15/11		950		998,872
DIRECTV Holdings LLC / DIRECTV Financing Co., Inc., Gtd. Notes, 144A	Ba2		4.750%	10/01/14		1,940		1,977,512
DISH DBS Corp., Gtd. Notes	Ba3		6.375%	10/01/11		1,000		1,032,500
Time Warner Cable, Inc., Gtd. Notes	Baa2		5.400%	07/02/12		2,510		2,681,757
Time Warner Cable, Inc., Gtd. Notes(a)	Baa2		6.750%	06/15/39		1,575		1,649,505
								10,540,447
Capital Goods — 0.1%
ERAC USA Finance Co., Gtd. Notes, 144A (original cost $459,646; purchased 10/10/07)(d)(g)	Baa2		5.800%	10/15/12		460		482,332
ERAC USA Finance Co., Gtd. Notes, 144A (original cost $1,299,722; purchased 10/10/07)(d)(g)	Baa2		6.375%	10/15/17		1,302		1,315,107
ERAC USA Finance Co., Gtd. Notes, 144A (original cost $376,709; purchased 10/10/07)(d)(g)	Baa2		7.000%	10/15/37		380		371,947
FedEx Corp., Gtd. Notes	Baa2		7.250%	02/15/11		400		423,657
General Electric Co., Sr. Unsec’d. Notes	Aa2		5.250%	12/06/17		200		204,373
Trane US, Inc., Gtd. Notes(a)	BBB+	(e)	7.625%	02/15/10		770		774,623
								3,572,039
Chemicals — 0.2%
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3		6.125%	02/01/11		685		714,091
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3		7.600%	05/15/14		1,800		2,048,206
Dow Chemical Co. (The), Sr. Unsec’d. Notes	Baa3		9.400%	05/15/39		500		661,075
ICI Wilmington, Inc., Gtd. Notes	Baa1		5.625%	12/01/13		720		751,494
PPG Industries, Inc., Sr. Unsec’d. Notes	Baa1		5.750%	03/15/13		1,500		1,601,533
Union Carbide Corp., Sr. Unsec’d. Notes	Ba2		7.500%	06/01/25		460		422,941
								6,199,340
Consumer — 0.2%
Avon Products, Inc., Sr. Unsec’d. Notes	A2		5.750%	03/01/18		1,500		1,609,747
Fortune Brands, Inc., Sr. Unsec’d. Notes(a)	Baa3		6.375%	06/15/14		2,250		2,409,649
Newell Rubbermaid, Inc., Sr. Unsec’d. Notes	Baa3		6.250%	04/15/18		1,700		1,679,775
Whirlpool Corp., Sr. Unsec’d. Notes	Baa3		6.125%	06/15/11		965		1,002,946
								6,702,117
Electric — 0.9%
Appalachian Power Co., Sr. Unsec’d. Notes, Ser. J	Baa2		4.400%	06/01/10		620		626,938
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2		6.250%	08/01/16		175		185,018
Arizona Public Service Co., Sr. Unsec’d. Notes	Baa2		6.375%	10/15/11		1,305		1,396,987
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes	Baa2		6.350%	10/01/36		550		564,938
Carolina Power & Light Co., First Mtge. Bonds	A1		5.250%	12/15/15		525		574,097
CenterPoint Energy Houston Electric LLC, Genl. Ref. Mtge., Ser. J2	Baa1		5.700%	03/15/13		740		786,578
CenterPoint Energy Houston Electric LLC, Genl. Ref. Mtge., Ser. K2	Baa1		6.950%	03/15/33		590		652,440
Consolidated Edison Co. of New York, Inc., Sr. Unsec’d. Notes, Ser. 05-C	A3		5.375%	12/15/15		730		788,888
Consolidated Edison Co. of New York, Inc., Sr. Unsec’d. Notes, Ser. 08-B(a)	A3		6.750%	04/01/38		200		228,017
Consumers Energy Co., First Mtge. Bonds, Ser. D	A3		5.375%	04/15/13		325		348,964
Duke Energy Carolinas LLC, First Mtge. Bonds	A1		6.050%	04/15/38		550		585,600
Duke Energy Carolinas LLC, Sr. Unsec’d. Notes	A3		6.100%	06/01/37		960		1,007,239
E.ON International Finance BV (Netherlands), Gtd. Notes, 144A	A2		6.650%	04/30/38		890		1,012,011
El Paso Electric Co., Sr. Unsec’d. Notes	Baa2		6.000%	05/15/35		670		602,526
Empresa Nacional de Electricidad S.A. (Chile), Unsub. Notes	Baa3		8.625%	08/01/15		1,295		1,534,987
ENEL Finance International SA (Luxembourg), Gtd. Notes, 144A(a)	A2		6.000%	10/07/39		1,280		1,286,775
Energy East Corp., Sr. Unsec’d. Notes	A3		6.750%	09/15/33		145		151,292
Exelon Corp., Sr. Unsec’d. Notes	Baa1		4.900%	06/15/15		155		159,898

SEE NOTES TO FINANCIAL STATEMENTS.

A56

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Electric (continued)
Exelon Generation Co. LLC, Sr. Unsec’d. Notes	A3	6.250%		10/01/39	$	1,425	$	1,451,834
FirstEnergy Solutions Corp., Gtd. Notes	Baa2	6.050%		08/15/21		695		701,120
Florida Power & Light Co., First Mtge. Bonds	Aa2	5.950%		10/01/33		295		308,795
Georgia Power Co., Sr. Unsec’d. Notes, Ser. B	A2	5.700%		06/01/17		495		537,114
Indiana Michigan Power Co., Sr. Unsec’d. Notes, Ser. INDF	Baa2	5.050%		11/15/14		460		477,141
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A(a)	A2	6.250%		06/17/14		1,770		1,931,263
Midamerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.750%		04/01/18		205		216,064
Midamerican Energy Holdings Co., Sr. Unsec’d. Notes	Baa1	5.950%		05/15/37		300		300,336
National Rural Utilities Cooperative Finance Corp., Sr. Unsec’d. Notes, Ser. C, MTN	A2	7.250%		03/01/12		90		98,931
Nevada Power Co., Genl. Ref. Mtge., Ser. O	Baa3	6.500%		05/15/18		1,260		1,348,378
Niagara Mohawk Power Corp., Sr. Unsec’d. Notes, 144A	A3	4.881%		08/15/19		610		604,805
NiSource Finance Corp., Gtd. Notes	Baa3	5.250%		09/15/17		245		240,976
NiSource Finance Corp., Gtd. Notes	Baa3	5.450%		09/15/20		350		339,395
NSTAR	A2	4.500%		11/15/19		615		601,413
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes	Baa1	6.375%		01/15/15		345		376,339
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes	Baa1	7.000%		09/01/22		475		528,128
Pacific Gas & Electric Co., Sr. Unsec’d. Notes	A3	6.050%		03/01/34		1,550		1,618,253
Public Service Co. of New Mexico, Sr. Unsec’d. Notes	Baa3	7.950%		05/15/18		140		146,552
Public Service Electric & Gas Co., Sec’d. Notes, MTN	A2	5.800%		05/01/37		535		550,516
Southern California Edison Co., Ser. 04-F	A1	4.650%		04/01/15		470		496,946
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	5.613%		04/01/17		199		205,181
Xcel Energy, Inc., Sr. Unsec’d. Notes	Baa1	6.500%		07/01/36		445		468,777
								26,041,450
Energy – Integrated — 0.1%
Cenovus Energy, Inc. (Canada), Sr. Notes, 144A	Baa2	6.750%		11/15/39		975		1,062,802
Hess Corp., Sr. Unsec’d. Notes	Baa2	6.000%		01/15/40		400		396,099
Marathon Oil Canada Corp. (Canada), Gtd. Notes	Baa1	8.375%		05/01/12		360		402,966
Husky Energy, Inc. (Canada), Sr. Unsec’d. Notes	Baa2	7.250%		12/15/19		325		375,570
TNK-BP Finance SA (Luxembourg), Gtd. Notes, 144A	Baa2	7.500%		07/18/16		1,425		1,460,625
								3,698,062
Energy – Other — 0.2%
Devon Financing Corp. ULC (Canada), Gtd. Notes	Baa1	7.875%		09/30/31		225		281,905
Dolphin Energy Ltd. (United Arab Emirates), Sr. Sec’d. Notes, 144A	Aa3	5.888%		06/15/19		936		944,906
Halliburton Co., Sr. Unsec’d. Notes	A2	5.500%	��	10/15/10		150		156,103
Nexen, Inc. (Canada), Sr. Unsec’d. Notes	Baa3	6.400%		05/15/37		200		201,503
Pioneer Natural Resources Co., Sr. Unsec’d. Notes	Ba1	6.875%		05/01/18		1,500		1,484,130
Questar Market Resources, Inc., Sr. Unsec’d. Notes(a)	Baa3	6.800%		03/01/20		745		776,517
Valero Energy Corp., Gtd. Notes	Baa2	6.625%		06/15/37		255		239,275
Woodside Finance Ltd. (Australia), Gtd. Notes, 144A	Baa1	5.000%		11/15/13		1,315		1,345,317
XTO Energy, Inc., Sr. Unsec’d. Notes	Baa2	6.250%		08/01/17		585		662,417
								6,092,073
Foods — 0.4%
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	5.375%		01/15/20		1,800		1,836,466
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	8.000%		11/15/39		1,285		1,599,717
Anheuser-Busch InBev Worldwide, Inc., Gtd. Notes, 144A	Baa2	8.200%		01/15/39		250		316,125
Bunge Ltd. Finance Corp., Gtd. Notes(a)	Baa2	5.350%		04/15/14		1,040		1,063,161
Bunge Ltd. Finance Corp., Gtd. Notes	Baa2	8.500%		06/15/19		985		1,122,809
Cargill, Inc., Sr. Unsec’d. Notes, 144A (original cost $666,818; purchased 11/19/07)(d)(g)	A2	6.000%		11/27/17		670		714,108
ConAgra Foods, Inc., Sr. Unsec’d. Notes	Baa2	7.875%		09/15/10		46		48,154
Delhaize America, Inc., Gtd. Notes	Baa3	9.000%		04/15/31		752		962,787
Delhaize Group SA (Belgium), Gtd. Notes	Baa3	6.500%		06/15/17		480		521,295
General Mills, Inc., Sr. Unsec’d. Notes	Baa1	6.000%		02/15/12		1,050		1,133,660

SEE NOTES TO FINANCIAL STATEMENTS.

A57

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Foods (continued)
H.J. Heinz Finance Co., Gtd. Notes, 144A	Baa2	7.125%	08/01/39	$	450	$	508,742
Kroger Co. (The), Gtd. Notes	Baa2	6.750%	04/15/12		45		49,149
Kroger Co. (The), Gtd. Notes	Baa2	6.800%	04/01/11		670		711,466
McDonald’s Corp., Sr. Unsec’d. Notes, MTN	A3	6.300%	03/01/38		685		755,594
Ralcorp Holdings, Inc., Sr. Notes, 144A	Baa3	6.625%	08/15/39		875		853,338
Tyson Foods, Inc., Gtd. Notes	Ba3	7.850%	04/01/16		735		753,375
Yum! Brands, Inc., Sr. Unsec’d. Notes	Baa3	8.875%	04/15/11		180		194,773
							13,144,719
Healthcare & Pharmaceutical — 0.5%
Abbott Laboratories, Sr. Unsec’d. Notes	A1	5.875%	05/15/16		1,145		1,262,922
AmerisourceBergen Corp., Gtd. Notes	Baa3	5.625%	09/15/12		915		974,249
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba1	4.500%	01/15/15		910		911,857
Boston Scientific Corp., Sr. Unsec’d. Notes	Ba1	6.000%	01/15/20		565		577,304
Carefusion Corp., Sr. Unsec’d. Notes, 144A	Baa3	6.375%	08/01/19		355		380,035
Genentech, Inc., Sr. Unsec’d. Notes	AA-(e)	4.750%	07/15/15		280		299,676
GlaxoSmithKline Capital, Inc., Gtd. Notes	A1	6.375%	05/15/38		870		963,852
HCA, Inc., Sec’d. Notes	B2	9.250%	11/15/16		1,925		2,066,969
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes	Baa3	5.625%	12/15/15		580		606,414
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.750%	11/15/36		110		112,733
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.850%	06/30/39		265		278,879
Merck & Co., Inc., Sr. Unsec’d. Notes	Aa3	5.950%	12/01/28		165		173,881
Schering-Plough Corp., Gtd. Notes(a)	Aa3	6.000%	09/15/17		884		981,899
Schering-Plough Corp., Gtd. Notes	Aa3	6.550%	09/15/37		340		386,140
Watson Pharmaceuticals, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	08/15/19		445		459,148
Wyeth, Gtd. Notes	A1	5.500%	03/15/13		1,210		1,315,619
Wyeth, Gtd. Notes	A1	5.950%	04/01/37		1,715		1,788,364
Wyeth, Gtd. Notes	A1	6.450%	02/01/24		60		66,843
							13,606,784
Healthcare Insurance — 0.2%
Aetna, Inc., Sr. Unsec’d. Notes	A3	5.750%	06/15/11		390		408,995
Aetna, Inc., Sr. Unsec’d. Notes	A3	6.625%	06/15/36		515		528,080
Cigna Corp., Sr. Unsec’d. Notes	Baa2	6.150%	11/15/36		670		598,527
Coventry Health Care, Inc., Sr. Unsec’d. Notes	Ba1	6.125%	01/15/15		1,290		1,232,221
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	5.250%	03/15/11		1,350		1,398,881
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.000%	06/15/17		195		204,081
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.500%	06/15/37		420		414,161
UnitedHealth Group, Inc., Sr. Unsec’d. Notes	Baa1	6.625%	11/15/37		420		420,751
WellPoint, Inc., Sr. Unsec’d. Notes(a)	Baa1	5.000%	12/15/14		860		894,674
							6,100,371
Insurance — 0.4%
American International Group, Inc., Sr. Unsec’d. Notes	A3	4.250%	05/15/13		580		535,750
AXA SA (France), Sub. Notes	A3	8.600%	12/15/30		155		180,119
Berkshire Hathaway Finance Corp., Gtd. Notes	Aa2	4.750%	05/15/12		440		469,069
Liberty Mutual Group, Inc., Bonds, 144A	Baa2	7.000%	03/15/34		850		728,316
Lincoln National Corp., Sr. Unsec’d. Notes	Baa2	6.300%	10/09/37		492		450,579
Lincoln National Corp., Sr. Unsec’d. Notes	Baa2	8.750%	07/01/19		605		691,276
Marsh & McLennan Cos., Inc., Sr. Unsec’d. Notes	Baa2	5.150%	09/15/10		265		271,666
MetLife, Inc., Sr. Unsec’d. Notes	A3	5.700%	06/15/35		1,020		1,007,331
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.125%	12/01/11		335		360,134
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.375%	06/15/34		400		427,454
MetLife, Inc., Sr. Unsec’d. Notes	A3	6.750%	06/01/16		430		481,532
New York Life Insurance Co., Sub. Notes, 144A	Aa2	6.750%	11/15/39		660		674,962
Pacific Life Insurance Co., Sub. Notes, 144A (original cost $994,522; purchased 6/16/09)(g)	A3	9.250%	06/15/39		995		1,148,962
Teachers Insurance & Annuity Association of America, Notes, 144A	Aa2	6.850%	12/16/39		1,450		1,498,920

SEE NOTES TO FINANCIAL STATEMENTS.

A58

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance (continued)
Travelers Cos., Inc. (The), Sr. Unsec’d. Notes	A2	6.750%	06/20/36	$	685	$	756,111
W.R. Berkley Corp., Sr. Unsec’d. Notes	Baa2	5.600%	05/15/15		555		548,947
W.R. Berkley Corp., Sr. Unsec’d. Notes	Baa2	6.150%	08/15/19		460		436,633
XL Capital Ltd. (Cayman Islands), Sr. Unsec’d. Notes	Baa2	5.250%	09/15/14		85		83,242
							10,751,003
Lodging — 0.2%
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes	Ba1	6.250%	02/15/13		1,645		1,696,406
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes(a)	Ba1	6.750%	05/15/18		2,800		2,807,000
							4,503,406
Media & Entertainment — 0.2%
Gannett Co., Inc., Sr. Unsec’d. Notes	Ba2	6.375%	04/01/12		2,500		2,500,000
Historic TW, Inc., Sr. Unsec’d. Notes	Baa2	9.150%	02/01/23		505		609,451
News America, Inc., Gtd. Notes, 144A(a)	Baa1	6.900%	08/15/39		800		872,699
Time Warner, Inc., Gtd. Notes	Baa2	6.750%	04/15/11		640		678,081
Time Warner Cos., Inc., Gtd. Notes	Baa2	7.250%	10/15/17		790		884,738
Viacom, Inc., Sr. Unsec’d. Notes(a)	Baa2	6.750%	10/05/37		430		443,621
Viacom, Inc., Sr. Unsec’d. Notes	Baa2	6.875%	04/30/36		625		675,816
							6,664,406
Metals — 0.2%
Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB+(e)	4.500%	05/15/13		115		118,084
Alcan, Inc. (Canada), Sr. Unsec’d. Notes	BBB+(e)	5.000%	06/01/15		600		615,993
Ispat Inland ULC (Canada), Gtd. Notes	Baa3	9.750%	04/01/14		1,745		1,832,250
Newmont Mining Corp., Gtd. Notes	Baa2	6.250%	10/01/39		880		881,052
Rio Tinto Finance USA Ltd. (Australia), Gtd. Notes	Baa1	5.875%	07/15/13		1,000		1,079,037
Southern Copper Corp., Sr. Unsec’d. Notes	Baa3	7.500%	07/27/35		125		123,855
United States Steel Corp., Sr. Unsec’d. Notes	Ba3	5.650%	06/01/13		2,580		2,567,121
							7,217,392
Non-Captive Finance — 0.4%
General Electric Capital Corp., Notes, MTN(a)	Aa2	3.500%	08/13/12		1,990		2,031,062
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aa2	5.550%	05/04/20		985		976,269
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN	Aa2	5.875%	01/14/38		1,060		981,436
General Electric Capital Corp., Sr. Unsec’d. Notes, Ser. A, MTN	Aa2	6.125%	02/22/11		950		1,003,863
General Electric Capital Corp., Sr. Unsec’d. Notes, Ser. G, MTN	Aa2	6.000%	08/07/19		920		954,979
HSBC Finance Corp., Sr. Unsec’d. Notes	A3	5.700%	06/01/11		440		459,674
International Lease Finance Corp., Sr. Unsec’d. Notes	B1	6.375%	03/25/13		1,850		1,521,033
SLM Corp., Sr. Unsec’d. Notes, MTN	Ba1	8.450%	06/15/18		2,870		2,831,981
							10,760,297
Packaging
Sealed Air Corp., Sr. Unsec’d. Notes, 144A	Baa3	6.875%	07/15/33		515		484,516
Paper — 0.1%
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.300%	11/15/39		1,080		1,145,730
International Paper Co., Sr. Unsec’d. Notes	Baa3	7.500%	08/15/21		510		571,440
							1,717,170
Pipelines & Other — 0.2%
DCP Midstream LLC, Sr. Unsec’d. Notes	Baa2	7.875%	08/16/10		1,760		1,829,738
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes(a)	Baa2	6.500%	09/01/39		675		680,272
Oneok Partners LP, Gtd. Notes	Baa2	6.650%	10/01/36		420		428,368
Sempra Energy, Sr. Unsec’d. Notes	Baa1	6.000%	02/01/13		90		95,970
Spectra Energy Capital LLC, Gtd. Notes	Baa2	6.200%	04/15/18		3,190		3,387,825
Spectra Energy Capital LLC, Sr. Unsec’d. Notes	Baa2	6.250%	02/15/13		235		252,675
							6,674,848

SEE NOTES TO FINANCIAL STATEMENTS.

A59

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Railroads — 0.1%
Burlington Northern Santa Fe Corp., Sr. Unsec’d. Notes	Baa1	6.700%	08/01/28	$	670	$	718,144
CSX Corp., Sr. Unsec’d. Notes(a)	Baa3	6.150%	05/01/37		715		724,423
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	5.590%	05/17/25		525		510,367
Norfolk Southern Corp., Sr. Unsec’d. Notes	Baa1	7.800%	05/15/27		18		21,638
Union Pacific Corp., Sr. Unsec’d. Notes	Baa2	6.650%	01/15/11		750		791,080
							2,765,652
Real Estate Investment Trusts — 0.2%
Brandywine Operating Partnership LP, Gtd. Notes	Baa3	5.750%	04/01/12		361		367,966
Mack-Cali Realty LP, Sr. Unsec’d. Notes	Baa2	7.750%	08/15/19		765		791,588
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	5.450%	06/01/12		435		431,627
Post Apartment Homes LP, Sr. Unsec’d. Notes	Baa3	6.300%	06/01/13		660		656,202
Simon Property Group LP, Sr. Unsec’d. Notes	A3	5.750%	05/01/12		1,500		1,575,744
Simon Property Group LP, Sr. Unsec’d. Notes	A3	6.125%	05/30/18		2,800		2,844,766
							6,667,893
Retailers — 0.6%
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.750%	08/15/11		1,000		1,064,875
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	5.750%	06/01/17		1,640		1,730,879
CVS Caremark Corp., Sr. Unsec’d. Notes	Baa2	6.125%	09/15/39		750		743,324
Gamestop Corp. / Gamestop, Inc., Gtd. Notes	Ba1	8.000%	10/01/12		1,115		1,155,419
Home Depot, Inc. (The), Sr. Unsec’d. Notes	Baa1	5.875%	12/16/36		325		313,709
Kohl’s Corp., Sr. Unsec’d. Notes	Baa1	6.875%	12/15/37		1,015		1,151,164
Lowe’s Cos., Inc., Sr. Unsec’d. Notes	A1	6.500%	03/15/29		385		423,379
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.350%	03/15/12		390		398,287
Macy’s Retail Holdings, Inc., Gtd. Notes	Ba2	5.875%	01/15/13		2,000		2,055,000
Nordstrom, Inc., Sr. Unsec’d. Notes(a)	Baa2	6.250%	01/15/18		4,500		4,871,115
Target Corp., Sr. Unsec’d. Notes	A2	7.000%	01/15/38		1,835		2,140,983
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	5.250%	09/01/35		245		240,913
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes	Aa2	6.200%	04/15/38		500		551,397
							16,840,444
Technology — 0.4%
Cisco Systems, Inc., Sr. Unsec’d. Notes	A1	4.450%	01/15/20		1,690		1,657,863
Computer Sciences Corp., Sr. Unsec’d. Notes, Ser. WI	Baa1	6.500%	03/15/18		1,800		1,964,336
Electronic Data Systems LLC., Sr. Unsec’d. Notes	A2	7.450%	10/15/29		120		141,996
Fiserv, Inc., Gtd. Notes	Baa2	6.125%	11/20/12		1,000		1,088,871
Intuit, Inc., Sr. Unsec’d. Notes	Baa2	5.400%	03/15/12		600		637,442
Motorola, Inc., Sr. Unsec’d. Notes	Baa3	8.000%	11/01/11		49		52,405
Oracle Corp., Sr. Unsec’d. Notes	A2	6.125%	07/08/39		1,215		1,275,793
Seagate Technology HDD Holdings (Cayman Islands), Gtd. Notes	Ba3	6.375%	10/01/11		1,000		1,017,500
Xerox Corp., Sr. Unsec’d. Notes(a)	Baa2	4.250%	02/15/15		2,720		2,701,039
							10,537,245
Telecommunications — 0.8%
America Movil SAB de CV (Mexico), Gtd. Notes(a)	A3	6.375%	03/01/35		580		598,726
AT&T Corp., Gtd. Notes	A2	8.000%	11/15/31		260		317,335
AT&T, Inc., Sr. Unsec’d. Notes	A2	5.300%	11/15/10		1,260		1,309,824
AT&T Mobility LLC, Sr. Unsec’d. Notes	A2	7.125%	12/15/31		505		564,429
Deutsche Telekom International Finance BV (Netherlands), Gtd. Notes	Baa1	8.750%	06/15/30		295		379,402
Embarq Corp., Sr. Unsec’d. Notes (original cost $349,979; purchased 05/12/06)(d)(g)	Baa3	7.082%	06/01/16		350		386,602
Embarq Corp., Sr. Unsec’d. Notes (original cost $1,626,279; purchased 05/12/06-04/10/07)(d)(g)	Baa3	7.995%	06/01/36		1,600		1,721,117
France Telecom SA (France), Sr. Unsec’d. Notes	A3	8.500%	03/01/31		375		499,055
Koninklijke KPN NV (Netherlands), Sr. Unsec’d. Notes	Baa2	8.000%	10/01/10		530		556,500
New Cingular Wireless Services, Inc., Gtd. Notes	A2	8.125%	05/01/12		640		723,157
New Cingular Wireless Services, Inc., Sr. Unsec’d. Notes	A2	8.750%	03/01/31		1,339		1,730,402

SEE NOTES TO FINANCIAL STATEMENTS.

A60

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

CORPORATE BONDS (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Telecommunications (continued)
PCCW-HKT Capital Ltd. (Virgin Islands (US)), Gtd. Notes, 144A	Baa2	8.000%	11/15/11	$	2,370	$	2,554,623
Qwest Capital Funding, Inc., Gtd. Notes	B1	7.250%	02/15/11		700		710,500
Qwest Corp., Sr. Unsec’d. Notes	Ba1	8.875%	03/15/12		2,000		2,150,000
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	5.250%	11/15/13		320		336,573
Telecom Italia Capital SA (Luxembourg), Gtd. Notes	Baa2	7.175%	06/18/19		2,095		2,335,638
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	5.877%	07/15/19		780		836,027
Telefonica Emisiones SAU (Spain), Gtd. Notes	Baa1	7.045%	06/20/36		210		239,799
Telefonos de Mexico SAB de CV (Mexico), Sr. Unsec’d. Notes, 144A(a)	A3	5.500%	11/15/19		255		248,309
TELUS Corp. (Canada), Sr. Unsec’d. Notes	Baa1	8.000%	06/01/11		899		973,260
United States Cellular Corp., Sr. Unsec’d. Notes	Baa2	6.700%	12/15/33		275		270,449
Verizon Communications, Inc., Sr. Unsec’d. Notes	A3	6.100%	04/15/18		3,400		3,695,491
Vodafone Group PLC (United Kingdom), Sr. Unsec’d. Notes	Baa1	7.750%	02/15/10		800		806,384
							23,943,602
Tobacco — 0.2%
Altria Group, Inc., Gtd. Notes	Baa1	9.250%	08/06/19		215		262,005
Altria Group, Inc., Gtd. Notes(a)	Baa1	9.700%	11/10/18		985		1,217,625
Altria Group, Inc., Gtd. Notes	Baa1	9.950%	11/10/38		140		182,491
Altria Group, Inc., Gtd. Notes	Baa1	10.200%	02/06/39		790		1,053,890
Lorillard Tobacco Co., Sr. Unsec’d. Notes(a)	Baa2	8.125%	06/23/19		765		841,030
Philip Morris International, Inc., Sr. Unsec’d. Notes	A2	4.875%	05/16/13		860		907,864
Reynolds American, Inc., Gtd. Notes	Baa3	7.250%	06/15/37		320		322,265
							4,787,170
TOTAL CORPORATE BONDS (cost $270,471,604)							279,680,599
MORTGAGE-BACKED SECURITIES — 10.6%
Federal Home Loan Mortgage Corporation		4.500%	02/01/19-07/01/20		4,342		4,508,231
Federal Home Loan Mortgage Corporation		5.000%	07/01/18-05/01/34		7,762		8,110,347
Federal Home Loan Mortgage Corporation		5.000%	TBA 30 YR		5,000		5,126,560
Federal Home Loan Mortgage Corporation(c)		5.214%	12/01/35		2,387		2,511,410
Federal Home Loan Mortgage Corporation		5.500%	12/01/33-05/01/38		10,490		11,024,532
Federal Home Loan Mortgage Corporation		5.500%	TBA 30 YR		18,000		18,855,000
Federal Home Loan Mortgage Corporation(c)		5.548%	06/01/36		2,970		3,130,489
Federal Home Loan Mortgage Corporation		6.000%	03/01/32-12/01/33		2,266		2,436,973
Federal Home Loan Mortgage Corporation		6.500%	12/01/14		194		208,892
Federal Home Loan Mortgage Corporation		7.000%	01/01/31-11/01/33		2,850		3,138,417
Federal National Mortgage Association(c)		3.233%	07/01/33		740		762,375
Federal National Mortgage Association		4.000%	06/01/19		1,371		1,401,176
Federal National Mortgage Association		4.000%	TBA 15 YR		6,000		6,014,064
Federal National Mortgage Association		4.500%	11/01/18-01/01/35		10,774		11,062,329
Federal National Mortgage Association		4.500%	TBA 30 YR		10,000		9,981,250
Federal National Mortgage Association		5.000%	10/01/18-05/01/36		29,419		30,315,867
Federal National Mortgage Association		5.000%	TBA 30 YR		2,000		2,052,188
Federal National Mortgage Association		5.500%	03/01/16-06/01/38		46,704		49,100,986
Federal National Mortgage Association		5.500%	TBA 15 YR		6,000		6,345,000
Federal National Mortgage Association		5.500%	TBA 30 YR		25,250		26,429,655
Federal National Mortgage Association(c)		5.921%	06/01/37		7,740		8,230,697
Federal National Mortgage Association		6.000%	04/01/13-08/01/38		25,264		26,923,258
Federal National Mortgage Association		6.000%	TBA 30 YR		30,500		32,301,391
Federal National Mortgage Association		6.500%	07/01/17-09/01/37		10,131		10,891,434
Federal National Mortgage Association		7.000%	08/01/11-07/01/32		714		793,668
Federal National Mortgage Association		7.500%	06/01/12-05/01/32		315		344,769
Government National Mortgage Association		4.500%	TBA 30 YR		8,000		8,070,284

SEE NOTES TO FINANCIAL STATEMENTS.

A61

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

MORTGAGE-BACKED SECURITIES (continued)	Moody’s Rating (Unaudited)†	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Government National Mortgage Association		5.500%	11/15/32-02/15/36	$	9,603	$	10,123,962
Government National Mortgage Association		6.000%	02/15/33-10/15/34		3,885		4,138,827
Government National Mortgage Association		6.500%	10/15/23-07/15/35		4,231		4,540,112
Government National Mortgage Association		8.000%	01/15/24-04/15/25		98		112,188
TOTAL MORTGAGE-BACKED SECURITIES (cost $301,109,630)							308,986,331
MUNICIPAL BONDS — 0.2%
Bay Area Toll Authority, BABs	Aa3	6.263%	04/01/49		1,325		1,270,689
New Jersey State Turnpike Authority, BABs	A3	7.414%	01/01/40		450		507,240
New York City Transitional Finance Authority, BABs	Aa2	5.767%	08/01/36		1,130		1,095,162
State of California, BABs	Baa1	7.300%	10/01/39		1,270		1,200,252
State of California, BABs(a)	Baa1	7.550%	04/01/39		245		240,707
State of Washington, BABs	Aa1	5.481%	08/01/39		355		343,434
TOTAL MUNICIPAL BONDS (cost $4,788,780)							4,657,484
NON-CORPORATE FOREIGN AGENCIES — 0.3%
Commonwealth Bank of Australia (Australia), 144A	Aaa	2.700%	11/25/14		7,435		7,286,754
Pemex Project Funding Master Trust, Gtd. Notes	Baa1	8.625%	12/01/23		350		422,625
RSHB Capital SA For OJSC Russian Agricultural Bank (Luxembourg), Sr. Sec’d. Notes, 144A	Baa1	6.299%	05/15/17		2,190		2,205,330
TOTAL NON-CORPORATE FOREIGN AGENCIES (cost $10,029,329)							9,914,709
NON-CORPORATE SOVEREIGN
Qatar Government International Bond (Qatar), 144A (cost $738,409)(a)	Aa2	6.400%	01/20/40		740		743,700
RESIDENTIAL MORTGAGE-BACKED SECURITIES —0.3%
Amortizing Residential Collateral Trust, Ser. 2002-BC7, Class M2(c)	CC(e)	1.581%	10/25/32		107		8,139
CDC Mortgage Capital Trust, Ser. 2002-HE3, Class M1(c)	Baa2	1.881%	03/25/33		547		349,620
Centex Home Equity, Ser. 2005-A, Class M2(c)	Aa3	0.731%	01/25/35		1,790		1,342,191
Credit-Based Asset Servicing And Securitization LLC, Ser. 2005-CB6, Class A3	A3	5.120%	07/25/35		536		448,455
Equity One ABS, Inc., Ser. 2004-3, Class M1	Aa2	5.700%	07/25/34		793		603,058
First Franklin Mortgage Loan Trust, Ser. 2005-FFH1, Class M2(c)	Ba3	0.751%	06/25/36		1,450		157,382
HFC Home Equity Loan, Ser. 2005-2, Class M2(c)	Aa1	0.723%	01/20/35		422		348,462
Long Beach Mortgage Loan Trust, Ser. 2004-2, Class M1(c)	Aa2	0.761%	06/25/34		1,250		864,264
Morgan Stanley ABS Capital I, Ser. 2004-NC1, Class M1(c)	Aa2	0.931%	12/25/33		1,193		879,185
Morgan Stanley Dean Witter Capital I, Ser. 2002-HE1, Class M1(c)	B3	1.131%	07/25/32		1,065		711,711
Morgan Stanley Dean Witter Capital I, Ser. 2002-NC4, Class M1(c)	A2	1.506%	09/25/32		881		628,263
Morgan Stanley Dean Witter Capital I, Ser. 2002-NC2, Class M2, 144A(c)	NR	2.556%	04/25/32		351		104,888
Saxon Asset Securities Trust, Ser. 2005-2, Class M2(c)	A2	0.671%	10/25/35		1,170		338,232
Securitized Asset Backed Receivables LLC Trust, Ser. 2004-OP1, Class M1(c)	Aa2	0.996%	02/25/34		1,325		995,484
Securitized Asset Backed Receivables LLC Trust, Ser. 2006-FR3, Class A3(c)	Caa1	0.481%	05/25/36		1,100		364,367
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (cost $13,221,757)							8,143,701

SEE NOTES TO FINANCIAL STATEMENTS.

A62

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

U.S. GOVERNMENT AGENCY OBLIGATIONS — 0.8%	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Western Corporate Federal Credit Union, US Gov’t. Gtd. Notes	1.750%	11/02/12	$	2,610	$	2,598,281
Federal Farm Credit Bank(a)	4.875%	01/17/17		855		909,828
Federal Home Loan Bank	5.000%	11/17/17		635		686,892
Federal Home Loan Bank	5.625%	06/11/21		2,390		2,601,699
Federal Home Loan Mortgage Corporation(a)	3.750%	03/27/19		4,835		4,740,335
Federal National Mortgage Association	0.875%	01/12/12		115		114,114
Federal National Mortgage Association(a)	2.625%	11/20/14		2,640		2,619,529
Federal National Mortgage Association	5.000%	02/13/17		3,070		3,332,476
Federal National Mortgage Association(a)	6.625%	11/15/30		2,245		2,698,059
Resolution Funding Corp. Interest Strip(h)	4.980%	04/15/18		2,615		1,843,421
Tennessee Valley Authority	4.500%	04/01/18		1,445		1,470,503
Tennessee Valley Authority, Ser. E	6.250%	12/15/17		560		638,735
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $24,465,153)						24,253,872
U.S. GOVERNMENT TREASURY OBLIGATIONS — 4.3%
U.S. Treasury Bonds	4.500%	02/15/36		3,150		3,102,750
U.S. Treasury Bonds(a)	4.500%	08/15/39		2,470		2,414,040
U.S. Treasury Bonds	6.250%	08/15/23		10,495		12,534,966
U.S. Treasury Bonds	7.125%	02/15/23		8,200		10,516,500
U.S. Treasury Bonds(i)	8.875%	08/15/17		5,505		7,504,003
U.S. Treasury Inflation Index Notes	1.625%	01/15/15		19,087		19,850,869
U.S. Treasury Inflation Index Notes	3.500%	01/15/11		5,279		5,475,385
U.S. Treasury Notes(a)	0.750%	11/30/11		3,155		3,134,420
U.S. Treasury Notes(a)	2.125%	11/30/14		3,835		3,744,225
U.S. Treasury Notes	2.625%	12/31/14		10,560		10,529,482
U.S. Treasury Notes(a)	3.375%	11/15/19		9,110		8,762,727
U.S. Treasury Strips Coupon(n)	3.980%	11/15/18		1,230		864,437
U.S. Treasury Strips Coupon(n)	4.830%	11/15/24		10,880		5,309,962
U.S. Treasury Strips Coupon(n)	4.840%	05/15/24		4,045		2,034,582
U.S. Treasury Strips Coupon(n)	4.860%	08/15/24		6,980		3,459,735
U.S. Treasury Strips Coupon(n)	5.270%	05/15/20		4,565		2,935,971
U.S. Treasury Strips Coupon(n)	7.140%	05/15/25		9,500		4,493,500
U.S. Treasury Strips Coupon(n)	7.450%	05/15/26		5,000		2,234,300
U.S. Treasury Strips Principal(a)(h)	4.070%	02/15/19		4,295		2,984,110
U.S. Treasury Strips Principal(a)(h)	4.800%	11/15/24		13,500		6,664,666
U.S. Treasury Strips Principal(h)	6.260%	02/15/23		10,900		5,944,620
TOTAL U.S. GOVERNMENT TREASURY OBLIGATIONS (cost $124,995,757)						124,495,250
TOTAL LONG-TERM INVESTMENTS (cost $2,410,775,646)						2,721,315,127
SHORT-TERM INVESTMENTS — 15.6%
U.S. GOVERNMENT TREASURY OBLIGATION — 0.2%
U.S. Treasury Bill (cost $4,396,836)(j)	0.157%	06/17/10		4,400		4,396,251
			Shares
AFFILIATED MUTUAL FUNDS — 15.4%
Dryden Core Investment Fund — Short-Term Bond Series (cost $167,366,748) (Note 4)(k)				16,901,556		144,677,318
Dryden Core Investment Fund — Taxable Money Market Series (cost $302,386,487; includes $156,084,644 of cash collateral received for securities on loan) (Note 4)(k)(l)				302,386,487		302,386,487
TOTAL AFFILIATED MUTUAL FUNDS (cost $469,753,234)						447,063,805
TOTAL SHORT-TERM INVESTMENTS (cost $474,150,070)						451,460,056
TOTAL INVESTMENTS(m) — 109.2% (cost $2,884,925,716)						3,172,775,183
LIABILITIES IN EXCESS OF OTHER ASSETS(o) — (9.2)%						(266,782,405	)
NET ASSETS — 100.0%					$	2,905,992,778

SEE NOTES TO FINANCIAL STATEMENTS.

A63

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The following abbreviations are used in portfolio descriptions:

144A	Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
BABs	Build America Bonds
CDO	Collateralized Debt Obligation
I/O	Interest Only
MTN	Medium Term Note
NR	Not Rated by Moody’s or Standard & Poor’s
TBA	To Be Announced
ULC	Unlimited Liability Corporation

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

† The rating reflected is as of December 31, 2009. Ratings of certain bonds may have changed subsequent to that date.

(a) All or a portion of security is on loan. The aggregate market value of such securities is $149,443,792; cash collateral of $156,084,644 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b) Non-income producing security.

(c) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2009.

(d) Indicates a security that has been deemed illiquid.

(e) Standard & Poor’s Rating.

(f) Represents issuer in default on interest payments and/or principal repayment; non-income producing security.

(g) Indicates a restricted security; the aggregate original cost of such securities is $5,773,675. The aggregate value of $6,140,175 is approximately 0.2% of net assets.

(h) Represents zero-coupon bond. Rate shown reflects the effective yield at December 31, 2009.

(i) Security segregated as collateral for futures contracts.

(j) Rate quoted represents yield-to-maturity as of purchase date.

(k) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

(l) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(m) As of December 31, 2009, one security representing $2,219,029 and 0.08% of net assets was fair valued in accordance with the policies adopted by the Board of Trustees.

(n) Rate shown reflects the effective yield at December 31, 2009.

(o) Liabilities in excess of other assets includes net unrealized appreciation (depreciation) on futures contracts, interest rate and credit default swap agreements as follows:

Open futures contracts outstanding at December 31, 2009:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2009		Unrealized Appreciation (Depreciation)
Long Positions:
123	U.S. Treasury 10 Yr. Notes	Mar. 2010	$	14,262,634	$	14,200,735	$	(61,899	)
365	U.S. Treasury 2 Yr. Notes	Mar. 2010		79,336,237		78,936,953		(399,284	)
805	U.S. Treasury 5 Yr. Notes	Mar. 2010		93,365,192		92,078,164		(1,287,028	)
175	S&P 500 Index	Mar. 2010		47,801,762		48,593,125		791,363
							$	(956,848	)
Short Position:
378	U.S. Long Bond	Mar. 2010		45,507,295		43,611,750		1,895,545
							$	938,697

SEE NOTES TO FINANCIAL STATEMENTS.

A64

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

Interest rate swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#		Fixed Rate	Floating Rate	Fair Value			Upfront Premiums Paid/(Received)		Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(b)	5/31/2014	$	12,200	2.355%	3 Month LIBOR	$	(260,364	)	$	—	$	(260,364	)
Morgan Stanley Capital Services, Inc.(a)	2/15/2036		3,060	4.128%	3 Month LIBOR		172,008			—		172,008
						$	(88,356	)	$	—	$	(88,356	)

(a) Portfolio pays the fixed rate and receives the floating rate.

(b) Portfolio pays the floating rate and receives the fixed rate.

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

Credit default swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Corporate Issues—Buy protection(1)
Barclays Bank PLC	9/20/2012	$	2,900	0.595%	Fortune Brands, Inc., 5.375%, 01/15/16	$	13,288		$	—		$	13,288
Barclays Bank PLC	3/20/2018		1,800	1.220%	Computer Sciences Corp., 5.000%, 02/15/13		(80,143	)		—			(80,143	)
Citibank NA	9/20/2012		3,200	0.320%	Altria Group, Inc., 7.000%, 11/04/13		35,999			—			35,999
Credit Suisse International	6/20/2018		3,400	0.970%	Verizon Communications, Inc., 4.900%, 09/15/15		(32,404	)		—			(32,404	)
Deutsche Bank AG	9/20/2011		1,000	1.000%	Dish DBS Corp., 6.625%, 10/01/14		(405	)		11,828			(12,233	)
Deutsche Bank AG	3/20/2012		2,000	5.000%	Gannett Co., Inc., 6.375%, 4/01/12		(128,921	)		(68,315	)		(60,606	)
Deutsche Bank AG	12/20/2012		2,000	1.000%	Macy’s Retail Holdings, Inc., 8.000%, 7/15/12		22,348			70,988			(48,640	)
Deutsche Bank AG	6/20/2013		1,850	2.000%	International Lease Finance Corp., 4.150%, 01/20/15		338,559			—			338,559
Deutsche Bank AG	6/20/2013		2,000	1.000%	US Steel Corp., 6.650%, 6/01/37		86,635			109,913			(23,278	)
Deutsche Bank AG	3/20/2014		1,645	7.050%	Starwood Hotels & Resorts Worldwide, 7.875%, 05/01/12		(374,480	)		—			(374,480	)
Deutsche Bank AG	3/20/2018		4,500	0.990%	Nordstrom, Inc., 6.950%, 03/15/28		29,111			—			29,111
Deutsche Bank AG	6/20/2018		2,200	1.150%	Spectra Energy Capital LLC, 6.250%, 02/15/13		(58,757	)		—			(58,757	)
JPMorgan Chase Bank	6/20/2014		1,150	0.650%	Bunge Ltd. Finance Corp., 5.350%, 04/15/14		25,835			—			25,835
Merrill Lynch Capital Services, Inc.	9/20/2016		735	1.730%	Tyson Foods, Inc., 7.850%, 04/01/16		31,312			—			31,312
Merrill Lynch Capital Services, Inc.	6/20/2018		1,800	3.050%	SLM Corp., 5.125%, 08/27/12		210,897			—			210,897
Merrill Lynch Capital Services, Inc.	6/20/2018		500	1.130%	Spectra Energy Capital LLC, 6.250%, 02/15/13		(12,623	)		—			(12,623	)
Merrill Lynch Capital Services, Inc.	6/20/2018		2,800	1.450%	Starwood Hotels & Resorts Worldwide, Inc., 6.750%, 05/15/18		72,406			—			72,406
Morgan Stanley Capital Services, Inc.	3/20/2012		500	5.000%	Gannett Co., Inc., 6.375%, 04/01/12		(32,230	)		(17,617	)		(14,613	)
Morgan Stanley Capital Services, Inc.	3/20/2018		1,500	0.700%	Avon Products, Inc., 6.500%, 03/01/19		(30,270	)		—			(30,270	)

SEE NOTES TO FINANCIAL STATEMENTS.

A65

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

Credit default swap agreements outstanding at December 31, 2009 (continued):

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value		Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Credit Default Swaps on Corporate Issues—Buy protection(1) (continued)
Morgan Stanley Capital Services, Inc.	6/20/2018	$	1,700	1.000%	Newell Rubbermaid, Inc., 0.000%, 07/15/28	$	45,843	$	—	$	45,843
Morgan Stanley Capital Services, Inc.	6/20/2018		2,800	0.970%	Simon Property Group L.P., 5.250%, 12/01/16		105,094		—		105,094
						$	267,094	$	106,797	$	160,297

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value		Upfront Premiums Paid/ (Received)		Unrealized Appreciation
Credit Default Swaps on Asset-Backed Issues—Buy protection(1)
Merrill Lynch Capital Services, Inc.	3/25/2036	$	842	3.720%	Ameriquest Mortgage Securities, Inc., Ser. 2006-R1, Class M9, 2.731%, 03/25/36	$	814,732	$	—	$	814,732

Counterparty	Termination Date	Notional Amount (000)#(4)		Fixed Rate	Reference Entity/Obligation	Fair Value(3)			Upfront Premiums Paid/ (Received)		Unrealized Depreciation
Credit Default Swaps on Asset-Backed Issues—Sell protection(2)
Merrill Lynch Capital Services, Inc.	3/25/2036	$	842	9.000%	Ameriquest Mortgage Securities, Inc., Ser. 2006-R1, Class M9, 2.731%, 03/25/36	$	(790,816	)	$	—	$	(790,816	)

The Portfolio entered into credit default swaps as the protection seller on asset-backed issues to take an active short position with respect to the likelihood of a particular issuer’s default.

(1) If the Portfolio is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) If the Portfolio is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(3) The fair value of credit default swap agreements on asset-backed securities serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date.

(4) Notional amount represents the maximum potential amount the Portfolio could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

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

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

SEE NOTES TO FINANCIAL STATEMENTS.

A66

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

	Level 1		Level 2		Level 3
Investments in Securities
Asset-Backed Securities	$	—	$	12,726,355	$	2,219,029
Bank Loans		—		15,284,511		—
Collateralized Mortgage Obligations		—		9,991,334		—
Commercial Mortgage-Backed Securities		—		108,870,917		—
Corporate Bonds		—		279,680,599		—
Common Stocks		1,811,347,335		—		—
Mortgage-Backed Securities		—		308,986,331		—
Municipal Bonds		—		4,657,484		—
Non-Corporate Foreign Agencies		—		9,914,709		—
Non-Corporate Sovereign		—		743,700		—
Residential Mortgage-Backed Securities		—		8,143,701		—
U.S. Government Agency Obligations		—		24,253,872		—
U.S. Government Treasury Obligations		—		128,891,501		—
Affiliated Mutual Funds		447,063,805		—		—
		2,258,411,140		912,145,014		2,219,029
Other Financial Instruments*		938,697		71,941		23,916
Total	$	2,259,349,837	$	912,216,955	$	2,242,945

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Asset-Backed Securities			Other Financial Instruments*
Balance as of 12/31/08	$	—		$	1,511,232
Realized gain (loss)		—			—	**
Change in unrealized appreciation (depreciation)		(933	)		(1,487,316	)
Earned accretion/amortization		933			—
Net purchases (sales)		2,219,029			—
Transfers in and/or out of Level 3		—			—
Balance as of 12/31/09	$	2,219,029		$	23,916

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

** The realized gain earned during the period for other financial instruments was $1,580,082.

SEE NOTES TO FINANCIAL STATEMENTS.

A67

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Affiliated Mutual Funds (including 5.4% of collateral received for securities on loan)	15.4	%
Mortgage-Backed Securities	10.6
Oil, Gas & Consumable Fuels	6.1
U.S. Government Treasury Obligations	4.5
Computers & Peripherals	4.2
Pharmaceuticals	4.2
Commercial Mortgage-Backed Securities	3.8
Diversified Financial Services	3.1
Software	2.6
Aerospace & Defense	2.4
Diversified Telecommunication Services	2.2
Semiconductors & Semiconductor Equipment	2.1
Banking	1.9
Household Products	1.8
Capital Markets	1.7
Media	1.6
Beverages	1.5
Healthcare Equipment & Supplies	1.5
Specialty Retail	1.5
Industrial Conglomerates	1.4
Insurance	1.4
Commercial Banks	1.3
Tobacco	1.3
Communications Equipment	1.2
Food & Staples Retailing	1.2
Healthcare Providers & Services	1.2
IT Services	1.2
Food Products	1.1
Internet Software & Services	1.1
Air Freight & Logistics	1.0
Chemicals	1.0
Electric	1.0
Consumer Finance	0.9
Metals & Mining	0.9
Electrical Utilities	0.8
Multiline Retail	0.8
Telecommunications	0.8
U.S. Government Agency Obligations	0.8
Biotechnology	0.7
Energy Equipment & Services	0.7
Healthcare & Pharmaceutical	0.7
Life Sciences Tools & Services	0.7
Machinery	0.7
Real Estate Investment Trusts	0.7

Multi-Utilities	0.6	%
Retailers	0.6
Textiles, Apparel & Luxury Goods	0.6
Asset-Backed Securities	0.5
Automobiles	0.5
Electronic Equipment & Instruments	0.5
Hotels, Restaurants & Leisure	0.5
Technology	0.5
Cable	0.4
Collateralized Mortgage Obligations	0.4
Foods	0.4
Household Durables	0.4
Non-Captive Finance	0.4
Auto Components	0.3
Containers & Packaging	0.3
Independent Power Producers & Energy Traders	0.3
Media & Entertainment	0.3
Non-Corporate Foreign Agencies	0.3
Professional Services	0.3
Residential Mortgage-Backed Securities	0.3
Road & Rail	0.3
Airlines	0.2
Commercial Services & Supplies	0.2
Consumer	0.2
Energy – Other	0.2
Healthcare Insurance	0.2
Lodging	0.2
Metals	0.2
Municipal Bonds	0.2
Pipelines & Other	0.2
Trading Companies & Distributors	0.2
Building Materials & Construction	0.1
Building Products	0.1
Capital Goods	0.1
Diversified Consumer Services	0.1
Electrical Equipment	0.1
Energy – Integrated	0.1
Gas Utilities	0.1
Leisure Equipment & Products	0.1
Office Electronics	0.1
Paper	0.1
Railroads	0.1
Wireless Telecommunication Services	0.1
	109.2
Liabilities in excess of other assets	(9.2	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A68

	FLEXIBLE MANAGED PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative Instruments as of December 31, 2009 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Credit contracts	Premium paid for swap agreements	$	192,729		Premium received for swap agreements	$	85,932
Credit contracts	Unrealized appreciation on swaps		1,723,076		Unrealized depreciation on swaps		1,538,863
Equity contracts	Due to broker—variation margin		791,363	*	—		—
Interest rate contracts	Due to broker—variation margin		1,895,545	*	Due to broker—variation margin		1,748,211	*
Interest rate contracts	Unrealized appreciation on swaps		172,008		Unrealized depreciation on swaps		260,364
Total		$	4,774,721			$	3,633,370

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures		Swaps	Purchased Options			Written Options		Total
Credit contracts	$	—	$   882,749	$	—		$	—	$	882,749
Equity contracts		9,211,850	—		—			—		9,211,850
Interest rate contracts		4,606,026	270,773		(119,911	)		43,436		4,800,324
Total	$	13,817,876	$1,153,522	$	(119,911	)	$	43,436	$	14,894,923

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures			Swaps			Total
Credit contracts	$	—		$	(5,660,170	)	$	(5,660,170	)
Equity contracts		708,263			—			708,263
Interest rate contracts		(2,524,923	)		27,961			(2,496,962	)
Total	$	(1,816,660	)	$	(5,632,209	)	$	(7,448,869	)

For the year ended December 31, 2009, the Portfolio’s average volume of derivative activities is as follows:

Purchased Options (Cost)	Written Options (Premium Received)	Futures Long Position (Value at Trade Date)	Futures Short Position (Value at Trade Date)
$7,889	$3,221	$165,681,351	$10,767,010

Interest Rate Swaps (Notional Amount in USD (000))	Credit Default Swaps as Buyer (Notional Amount in USD (000))	Credit Default Swaps as Writer (Notional Amount in USD (000))
$12,686	$39,281	$968

SEE NOTES TO FINANCIAL STATEMENTS.

A69

FLEXIBLE MANAGED PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2009

ASSETS
Investments, at value including securities on loan of $149,443,792:
Unaffiliated investments (cost $2,415,172,482)	$	2,725,711,378
Affiliated investments (cost $469,753,234)		447,063,805
Receivable for investments sold		110,554,208
Dividends and interest receivable		10,181,644
Unrealized appreciation on swaps		1,895,084
Foreign tax reclaim receivable		512,246
Premium paid for swap agreements		192,729
Receivable for Series shares sold		1,735
Prepaid expenses		36,816
Total Assets		3,296,149,645
LIABILITIES
Payable for investments purchased		224,009,915
Collateral for securities on loan		156,084,644
Payable to custodian		5,636,062
Unrealized depreciation on swaps		1,799,227
Management fee payable		1,478,287
Due to broker-variation margin		594,568
Accrued expenses and other liabilities		265,490
Payable for Series shares repurchased		202,147
Premium received for swap agreements		85,932
Affiliated transfer agent fee payable		595
Total Liabilities		390,156,867
NET ASSETS	$	2,905,992,778
Net assets were comprised of:
Paid-in capital	$	3,135,070,544
Retained earnings		(229,077,766	)
Net assets, December 31, 2009	$	2,905,992,778
Net asset value and redemption price per share, $2,905,992,778 / 203,489,907 outstanding shares of beneficial interest	$	14.28

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $253)	$	39,107,636
Unaffiliated interest		38,949,481
Affiliated dividend income		3,332,189
Affiliated income from securities loaned, net		936,691
		82,325,997
EXPENSES
Management fee		15,765,657
Shareholders’ reports		295,000
Custodian’s fees and expenses		280,000
Insurance expenses		49,000
Trustees’ fees		43,000
Audit fee		41,000
Commitment fee on syndicated credit agreement		22,000
Legal fees and expenses		18,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Miscellaneous		23,669
Total expenses		16,547,326
NET INVESTMENT INCOME		65,778,671
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(1,632,891))		(222,070,573	)
Futures transactions		13,817,876
Swap agreement transactions		1,153,522
Foreign currency transactions		1,607
Written options transactions		43,436
		(207,054,132	)
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $21,958,534)		636,736,075
Futures		(1,816,660	)
Swaps		(5,632,209	)
Foreign currencies		13,970
		629,301,176
NET GAIN ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		422,247,044
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	488,025,715

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	65,778,671		$	91,569,165
Net realized loss on investments, swaps and foreign currencies		(207,054,132	)		(353,630,781	)
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		629,301,176			(627,558,587	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		488,025,715			(889,620,203	)
DISTRIBUTIONS		(91,535,531	)		(353,573,797	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,203,125 and 1,347,523 shares, respectively]		15,189,643			19,045,784
Series shares issued in reinvestment of dividends and distributions [7,405,787 and 22,635,967 shares, respectively]		91,535,531			353,573,797
Series shares repurchased [17,489,813 and 14,641,462 shares, respectively]		(218,829,963	)		(224,142,062	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(112,104,789	)		148,477,519
TOTAL INCREASE (DECREASE) IN NET ASSETS		284,385,395			(1,094,716,481	)
NET ASSETS:
Beginning of year		2,621,607,383			3,716,323,864
End of year	$	2,905,992,778		$	2,621,607,383

SEE NOTES TO FINANCIAL STATEMENTS.

A70

	GLOBAL PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 96.6%
COMMON STOCKS — 96.5%	Shares	Value (Note 2)
Australia — 2.9%
Amcor Ltd.	182,500	$	1,016,039
AWB Ltd.(a)	543,000		547,789
BHP Billiton Ltd., ADR(b)	22,684		1,737,141
BHP Billiton PLC, ADR	59,100		3,773,535
BlueScope Steel Ltd.	218,400		601,772
Challenger Financial Services Group, Ltd.	343,900		1,294,419
Downer EDI Ltd.	215,400		1,793,865
Goodman Fielder Ltd.	443,900		646,407
Macquarie Group Ltd.	21,200		908,338
Metcash Ltd.	216,600		868,512
Pacific Brands Ltd.(a)	460,600		464,618
Qantas Airways Ltd.(a)	308,500		823,107
TABCORP Holdings Ltd.	119,400		740,797
Woolworths Ltd.	52,868		1,325,970
WorleyParsons Ltd.	53,665		1,393,439
			17,935,748
Austria — 0.1%
Voestalpine AG	9,500		347,068
Belgium — 1.0%
AGFA-Gevaert NV(a)	62,200		400,949
Anheuser-Busch InBev NV	80,028		4,142,818
Delhaize Group SA	18,500		1,415,236
			5,959,003
Brazil — 2.1%
BM&F Bovespa SA	276,812		1,947,701
Itau Unibanco Holding SA, ADR(a)	119,800		2,736,232
Petroleo Brasileiro SA	98,036		2,066,020
Petroleo Brasileiro SA, ADR	108,798		5,187,489
Weg SA	117,200		1,238,645
			13,176,087
Canada — 1.9%
Brookfield Asset Management, Inc. (Class A Stock)	74,206		1,645,889
Canadian National Railway Co.	49,574		2,694,843
Goldcorp, Inc.	46,087		1,813,063
Potash Corp. of Saskatchewan, Inc.	16,880		1,831,480
Research In Motion Ltd.(a)	16,862		1,138,860
Royal Bank of Canada	30,230		1,630,226
Tim Hortons, Inc.	31,032		953,347
			11,707,708
China — 2.0%
Baidu, Inc., ADR(a)	9,599		3,947,397
China Life Insurance Co. Ltd. (Class H Stock)	407,000		1,991,563
China Overseas Land & Investment Ltd.	754,000		1,579,846
China Railway Construction Corp. Ltd. (Class H Stock)	1,081,500		1,378,105
CNOOC Ltd.	1,170,000		1,822,792
Li Ning Co. Ltd.	442,000		1,675,982
			12,395,685

COMMON STOCKS (continued)	Shares	Value (Note 2)
Denmark — 0.7%
Danisco A/S	14,500	$	967,431
Danske Bank A/S(a)	23,900		536,541
H Lundbeck A/S	49,400		892,519
Novo Nordisk A/S (Class B Stock)	33,566		2,142,911
			4,539,402
Finland — 0.5%
Nokia Oyj	83,800		1,083,532
Rautaruukki Oyj	22,300		515,833
Tieto Oyj	56,200		1,167,707
			2,767,072
France — 5.1%
Alstom SA	34,180		2,390,405
AXA SA	107,610		2,526,571
BNP Paribas	19,800		1,570,496
Casino Guichard Perrachon SA	14,200		1,265,150
Credit Agricole SA	29,400		515,965
France Telecom SA	42,900		1,071,996
Iliad SA	14,445		1,726,234
Lagardere SCA	14,000		566,798
Rallye SA	13,400		468,098
Safran SA	72,500		1,416,598
Sanofi-Aventis SA	43,600		3,428,824
Schneider Electric SA	19,669		2,286,965
SCOR SE	28,000		703,417
Thales SA	22,500		1,156,393
Total SA	27,900		1,792,014
Total SA, ADR(a)	68,700		4,399,548
Vinci SA	39,660		2,231,709
Vivendi SA	65,800		1,952,924
			31,470,105
Germany — 3.5%
Aurubis AG	10,300		441,075
BASF SE	32,400		2,018,176
Deutsche Bank AG	11,600		822,891
Deutsche Lufthansa AG	51,700		874,106
E.ON AG	110,270		4,609,475
Hannover Rueckversicherung AG(a)	11,800		553,322
MAN SE	22,984		1,781,084
MTU Aero Engines Holding AG	28,100		1,522,921
Muenchener Rueckversicherungs AG	12,000		1,872,555
Rheinmetall AG	11,800		744,144
RWE AG	9,300		906,079
SAP AG	47,182		2,254,765
Suedzucker AG	21,000		437,846
Thomas Cook Group PLC	164,000		605,845
ThyssenKrupp AG	45,900		1,737,248
Vossloh AG	4,300		427,493
			21,609,025
Greece
Alpha Bank A.E.(a)	13,000		151,700
Hong Kong — 1.0%
Chaoda Modern Agriculture Holdings Ltd.	966,070		1,028,374
Li & Fung Ltd.	432,000		1,786,077
Noble Group Ltd.	1,586,000		3,637,890
			6,452,341

SEE NOTES TO FINANCIAL STATEMENTS.

A71

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
India — 1.0%
HDFC Bank, Ltd., ADR(b)	7,809	$	1,015,795
Infosys Technologies Ltd., ADR	43,025		2,377,992
Vedanta Resources PLC	60,069		2,512,433
			5,906,220
Indonesia — 0.2%
Bank Rakyat Indonesia	1,825,000		1,466,813
Ireland — 0.8%
Allied Irish Banks PLC(a)	42,100		72,030
Bank of Ireland (Governor & Co.)(a)	83,300		157,650
CRH PLC(a)	82,774		2,250,575
Irish Life & Permanent PLC(a)	51,300		225,878
Ryanair Holdings PLC, ADR(a)	73,855		1,980,791
			4,686,924
Israel — 0.6%
Teva Pharmaceutical Industries Ltd., ADR(a)	66,065		3,711,532
Italy — 1.4%
Banco Popolare SC(a)	38,200		286,163
Ciments Francais SA	5,200		550,929
Enel SpA	184,700		1,069,299
ENI SpA	89,300		2,274,094
Finmeccanica SpA	20,900		334,627
Fondiaria-Sai SpA	19,900		316,358
Saipem SpA	80,132		2,765,388
Telecom Italia SpA	796,300		1,242,184
			8,839,042
Japan — 8.3%
Aeon Credit Service Co. Ltd.	16,100		155,430
Alpine Electronics, Inc.(a)	41,600		441,189
Aoyama Trading Co. Ltd.	52,100		665,023
Astellas Pharma, Inc.	41,200		1,537,125
Canon, Inc.	58,100		2,471,485
Circle K Sunkus Co. Ltd.	46,900		578,546
COMSYS Holdings Corp.	72,800		765,831
Daikin Industries Ltd.	41,400		1,635,185
Fast Retailing Co. Ltd.	7,200		1,353,164
Fukuoka Financial Group, Inc.	158,000		550,630
Hitachi Capital Corp.	49,400		600,621
Honda Motor Co. Ltd.	79,400		2,693,938
Hoya Corp.	64,100		1,710,350
Itochu Techno-Solutions Corp.	26,200		703,561
Jupiter Telecommunications Co. Ltd.	1,674		1,656,465
KDDI Corp.	200		1,059,343
Keihin Corp.	78,900		1,179,469
Keyence Corp.	10,400		2,158,454
Konami Corp.	10,300		183,900
Kurabo Industries Ltd.	173,100		263,779
Kurita Water Industries Ltd.	69,400		2,180,377
Kyoei Steel Ltd.	42,800		788,790
Kyowa Exeo Corp.	56,000		476,489
Marubeni Corp.	271,000		1,496,998
Mitsubishi Corp.	135,400		3,372,623
Mitsui & Co. Ltd.	66,000		936,284
Mizuho Financial Group, Inc.	198,100		356,244
Nifco, Inc.	31,000		619,261

COMMON STOCKS (continued)	Shares	Value (Note 2)
Japan (continued)
Nippon Electric Glass Co., Ltd.	107,000	$	1,472,735
Nippon Express Co. Ltd.	160,000		660,761
Nippon Light Metal Co. Ltd.(a)	195,000		168,094
Nippon Oil Corp.	240,600		1,115,448
Nippon Shokubai Co. Ltd.	161,000		1,384,011
Nippon Telegraph & Telephone Corp.	37,000		1,461,614
Nissan Motor Co. Ltd.(a)	53,400		469,275
NTT DoCoMo, Inc.	1,100		1,535,037
Ricoh Co. Ltd.	52,000		745,096
Sankyu, Inc.	210,000		1,080,201
Sanwa Holdings Corp.	281,000		720,042
Seiko Epson Corp.,	17,100		276,343
Seino Holdings Corp.	65,000		412,586
Shimachu Co. Ltd.	30,700		605,048
Sumitomo Corp.	115,400		1,175,089
Sumitomo Mitsui Financial Group, Inc.	59,300		1,701,636
Sumitomo Trust & Banking Co. Ltd. (The)	67,000		328,972
Takeda Pharmaceutical Co. Ltd.	39,900		1,643,930
Terumo Corp.	27,500		1,657,422
Yokohama Rubber Co. Ltd. (The)	59,600		263,481
			51,467,375
Liechtenstein
Verwaltungs- und Privat-Bank AG	2,578		253,289
Mexico — 0.1%
Wal-Mart de Mexico SAB de CV, Ser. V	90,700		404,205
Netherlands — 2.5%
Aegon NV(a)	56,800		363,724
ASM Pacific Technology Ltd.	85,900		812,155
Brit Insurance Holdings NV	227,200		717,535
CSM	32,790		861,283
European Aeronautic Defence and Space Co. NV	41,900		842,237
ING Groep NV(a)	62,700		603,825
Koninklijke DSM NV	31,100		1,528,050
Nutreco Holding NV	9,400		528,376
OCE NV(a)	53,300		653,473
QIAGEN NV(a)	76,936		1,731,528
Royal Dutch Shell PLC, ADR(b)	35,150		2,112,866
Royal Dutch Shell PLC (Class B Stock)	162,200		4,723,777
			15,478,829
New Zealand — 0.1%
Air New Zealand Ltd.	737,900		647,599
Fisher & Paykel Appliances Holdings Ltd.	85,100		35,706
			683,305
Norway — 0.4%
DnB NOR ASA(a)	67,200		725,473
Norsk Hydro ASA(a)	54,500		457,823
Statoil ASA	45,100		1,124,777
			2,308,073
Portugal — 0.2%
Banco Espirito Santo SA	43,600		283,966
Portugal Telecom SGPS SA	89,600		1,093,306
			1,377,272

SEE NOTES TO FINANCIAL STATEMENTS.

A72

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Singapore — 0.7%
CapitaLand Ltd.	666,000	$	1,975,730
MobileOne Ltd.	390,330		524,738
Singapore Airlines Ltd.(a)	72,000		762,550
Wilmar International Ltd.	183,000		832,103
			4,095,121
South Africa — 0.4%
Naspers Ltd. (Class N Stock)	60,800		2,460,586
Spain — 2.8%
Banco Bilbao Vizcaya Argentaria SA	114,000		2,077,651
Banco Espanol de Credito SA	71,978		881,738
Banco Santander SA	371,208		6,134,083
Inditex SA	40,797		2,547,872
Repsol YPF SA	66,100		1,773,765
Telefonica SA	144,788		4,052,474
			17,467,583
Sweden — 0.3%
Svenska Handelsbanken AB (Class A Stock)	73,200		2,085,454
Switzerland — 4.5%
ABB Ltd.(a)	102,769		1,980,290
Actelion Ltd.(a)	28,971		1,547,353
Baloise-Holding AG	14,600		1,212,199
Clariant AG(a)	103,700		1,226,264
Credit Suisse Group AG	86,887		4,304,501
Georg Fischer AG(a)	2,000		499,077
Julius Baer Group Ltd.	25,075		881,849
Nestle SA	45,532		2,209,833
Novartis AG	36,200		1,976,855
Philip Morris International, Inc.	22,500		1,084,275
Rieter Holding AG(a)	2,200		496,916
Roche Holding AG	16,639		2,845,483
Sonova Holding AG	7,442		901,599
Swiss Reinsurance Co. Ltd.	18,700		895,817
Swisscom AG	6,200		2,367,858
Zurich Financial Services AG	17,068		3,731,470
			28,161,639
Taiwan — 0.5%
MediaTek, Inc.	95,190		1,653,884
Taiwan Semiconductor Manufacturing Co. Ltd.	769,294		1,550,493
			3,204,377
Turkey — 0.2%
Turkiye Garanti Bankasi AS	341,048		1,452,833
United Kingdom — 9.5%
AMEC PLC	93,814		1,195,234
Amlin PLC	139,217		803,852
AstraZeneca PLC	71,500		3,360,296
Autonomy Corp. PLC(a)	88,272		2,143,630
Aviva PLC	118,200		751,886
Barclays PLC	753,129		3,318,626
Beazley PLC	360,794		580,742
BG Group PLC	178,982		3,231,744
BP PLC	472,900		4,566,397
British Sky Broadcasting Group PLC	317,999		2,872,420

COMMON STOCKS (continued)	Shares	Value (Note 2)
United Kingdom (continued)
BT Group PLC	602,100	$	1,311,269
Cairn Energy PLC(a)	257,990		1,381,093
Capita Group PLC (The)	124,631		1,506,973
Centrica PLC	88,100		399,052
Davis Service Group PLC	24,300		155,882
Drax Group PLC	94,500		630,015
DS Smith PLC	230,900		472,265
Experian PLC	130,380		1,287,853
GlaxoSmithKline PLC	118,600		2,515,014
HSBC Holdings PLC	142,465		1,620,531
HSBC Holdings PLC, ADR	52,000		2,968,680
IMI PLC	145,600		1,214,492
Legal & General Group PLC	624,000		802,758
Lloyds Banking Group PLC(a)	381,679		307,090
Marston’s PLC	339,130		480,020
Meggitt PLC	216,200		905,082
Northern Foods PLC	211,500		226,859
Old Mutual PLC(a)	527,200		923,229
Petrofac Ltd.	84,242		1,410,203
Reckitt Benckiser Group PLC	55,975		3,029,927
Rolls-Royce Group PLC(a)	332,964		2,592,927
Rolls-Royce Group PLC (Class C Stock)(a)	19,241,880		31,079
Rotork PLC	43,573		832,595
Royal Bank of Scotland Group PLC(a)	263,527		122,332
RSA Insurance Group PLC	300,200		583,222
Spectris PLC	98,200		1,168,025
Standard Chartered PLC	70,424		1,777,914
Tate & Lyle PLC	127,900		889,597
Tomkins PLC	201,400		625,855
Tullow Oil PLC	92,806		1,947,106
Vodafone Group PLC	751,500		1,740,254
			58,684,020
United States — 41.2%
3M Co.	30,050		2,484,234
Abbott Laboratories	92,880		5,014,591
Adobe Systems, Inc.(a)	47,969		1,764,300
Alcoa, Inc.	45,800		738,296
Altria Group, Inc.	48,100		944,203
Amazon.com, Inc.(a)	24,679		3,319,819
American Express Co.	123,225		4,993,077
American Tower Corp. (Class A Stock)(a)	59,275		2,561,273
Ameriprise Financial, Inc.	52,800		2,049,696
Amgen, Inc.(a)	25,750		1,456,677
Analog Devices, Inc.,	41,500		1,310,570
Apple, Inc.(a)(b)	33,504		7,064,653
AT&T, Inc.	143,900		4,033,517
Avon Products, Inc.	23,900		752,850
Baker Hughes, Inc.(b)	55,450		2,244,616
Bank of America Corp.	304,400		4,584,264
Bank of New York Mellon Corp. (The)	29,800		833,506
Cablevision Systems Corp. (Class A Stock)	95,300		2,460,646
CenterPoint Energy, Inc.	35,400		513,654
Chevron Corp.	58,150		4,476,969

SEE NOTES TO FINANCIAL STATEMENTS.

A73

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
United States (continued)
Citigroup, Inc.	172,200	$	569,982
Coca-Cola Co. (The)(b)	12,850		732,450
Covidien PLC	49,500		2,370,555
Dell, Inc.(a)	125,600		1,803,616
DIRECTV (Class A Stock)(a)	36,374		1,213,073
Dow Chemical Co. (The)	193,073		5,334,607
E.I. du Pont de Nemours & Co.,	47,200		1,589,224
Eli Lilly & Co.	10,600		378,526
Entergy Corp.	26,950		2,205,588
EOG Resources, Inc.,	28,079		2,732,087
Exxon Mobil Corp.	61,800		4,214,142
Fifth Third Bancorp	93,900		915,525
Fortune Brands, Inc.	42,350		1,829,520
General Dynamics Corp.,	79,103		5,392,452
General Electric Co.	192,200		2,907,986
Gilead Sciences, Inc.(a)	67,568		2,924,343
Goldman Sachs Group, Inc. (The)	35,559		6,003,781
Google, Inc. (Class A Stock)(a)	12,466		7,728,671
H&R Block, Inc.	62,200		1,406,964
Home Depot, Inc.	123,800		3,581,534
Honeywell International, Inc.	31,900		1,250,480
Illinois Tool Works, Inc.	52,650		2,526,674
International Business Machines Corp.	57,718		7,555,286
International Paper Co.	85,300		2,284,334
Johnson & Johnson	97,263		6,264,710
JPMorgan Chase & Co.	218,723		9,114,187
KeyCorp,	189,600		1,052,280
Kraft Foods, Inc. (Class A Stock)	31,500		856,170
Liberty Media Corp. — Starz, Ser. Z(a)	15,750		726,863
Lockheed Martin Corp.	11,100		836,385
Marsh & McLennan Cos., Inc.	99,400		2,194,752
Mastercard, Inc. (Class A Stock)	16,353		4,186,041
McDonald’s Corp.	93,280		5,824,403
Merck & Co., Inc.	206,017		7,527,861
Microsoft Corp.	148,200		4,518,618
Morgan Stanley	39,100		1,157,360
Murphy Oil Corp.	40,750		2,208,650
National Oilwell Varco, Inc.(a)	38,010		1,675,861
Newell Rubbermaid, Inc.	87,100		1,307,371
NiSource, Inc.,	64,600		993,548
Nordstrom, Inc.,(b)	27,195		1,021,988
Norfolk Southern Corp.	33,515		1,756,856
NRG Energy, Inc.(a)	30,300		715,383
Pfizer, Inc.	153,300		2,788,527
Pinnacle West Capital Corp.	25,000		914,500
PPG Industries, Inc.	38,166		2,234,238
Praxair, Inc.	56,606		4,546,028
priceline.com, Inc.(a)	5,011		1,094,904
Procter & Gamble Co. (The)	27,150		1,646,104
QUALCOMM, Inc.	98,758		4,568,545
Qwest Communications International, Inc.	133,800		563,298
Raytheon Co.	34,050		1,754,256
Schlumberger Ltd.	12,300		800,607
SLM Corp.(a)	102,000		1,149,540
Southwest Airlines Co.	273,800		3,129,534

COMMON STOCKS (continued)	Shares	Value (Note 2)
United States (continued)
Spectra Energy Corp.	101,400	$	2,079,714
Sprint Nextel Corp.,(a)	340,900		1,247,694
St Joe Co. (The)(a)(b)	48,500		1,401,165
State Street Corp.	43,400		1,889,636
Sunoco, Inc.	26,600		694,260
Time Warner Cable, Inc.	36,800		1,523,152
Time Warner, Inc.	89,700		2,613,858
Transocean Ltd.(a)	68,376		5,661,533
Tyco Electronics Ltd.	76,600		1,880,530
Tyco International Ltd.	48,200		1,719,776
U.S. Bancorp	179,359		4,037,371
Union Pacific Corp.	116,691		7,456,555
Verizon Communications, Inc.	27,100		897,823
Visa, Inc. (Class A Stock)(b)	47,922		4,191,258
Wal-Mart Stores, Inc.	39,350		2,103,257
Waste Management, Inc.(b)	39,300		1,328,733
Wells Fargo & Co.	189,948		5,126,697
Western Union Co. (The)	89,700		1,690,845
Weyerhaeuser Co.	55,150		2,379,171
Wynn Resorts Ltd.(a)	30,288		1,763,670
Yahoo!, Inc.(a)	85,202		1,429,689
			255,298,566
TOTAL COMMON STOCKS (cost $542,348,854)			598,004,002
PREFERRED STOCKS — 0.1%
United States
Bank of America Corp	8,300		123,836
Wells Fargo & Co.	23,175		595,598
TOTAL PREFERRED STOCKS (cost $569,801)			719,434
TOTAL LONG-TERM INVESTMENTS (cost $542,918,655)			598,723,436
SHORT-TERM INVESTMENT — 6.3%
Affiliated Money Market Mutual Fund
Dryden Core Investment Fund — Taxable Money Market Series (cost $38,613,062; includes $23,197,723 of cash collateral received for securities on loan) (Note 4)(c)(d)	38,613,062		38,613,062
TOTAL INVESTMENTS(e) — 102.9% (cost $581,531,717)			637,336,498
LIABILITIES IN EXCESS OF OTHER ASSETS — (2.9)%			(17,805,028	)
NET ASSETS — 100.0%		$	619,531,470

The following abbreviation is used in portfolio descriptions:

ADR American Depositary Receipt

SEE NOTES TO FINANCIAL STATEMENTS.

A74

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $22,543,645; cash collateral of $23,197,723 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(e) As of December 31, 2009, 215 securities representing $287,394,956 and 46.4% of the net assets were fair valued in accordance with the policies adopted by the Board of Trustees.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

Investments in Securities	Level 1		Level 2		Level 3
Common Stocks
Australia	$	5,510,676	$	12,425,072	$	—
Austria		—		347,068		—
Belgium		—		5,959,003		—
Brazil		13,176,087		—		—
Canada		11,707,708		—		—
China		3,947,397		8,448,288		—
Denmark		—		4,539,402		—
Finland		—		2,767,072		—
France		4,399,548		27,070,557		—
Germany		—		21,609,025		—
Greece		—		151,700		—
Hong Kong		—		6,452,341		—
India		3,393,787		2,512,433		—
Indonesia		—		1,466,813		—
Ireland		1,980,791		2,706,133		—
Israel		3,711,532		—		—
Italy		—		8,839,042		—
Japan		—		51,467,375		—
Liechtenstein		—		253,289		—
Mexico		404,205		—		—
Netherlands		2,112,866		13,365,963		—
New Zealand		—		683,305		—
Norway		—		2,308,073		—
Portugal		—		1,377,272		—
Singapore		—		4,095,121		—
South Africa		—		2,460,586		—
Spain		—		17,467,583		—
Sweden		—		2,085,454		—
Switzerland		1,966,124		26,195,515		—
Taiwan		—		3,204,377		—
Turkey		—		1,452,833		—
United Kingdom		2,968,680		55,715,340		—
United States		255,298,566		—		—
Preferred Stock
United States		719,434		—		—
Affiliated Money Market Mutual Fund		38,613,062		—		—
		349,910,463		287,426,035		—
Other Financial Instruments*		—		—		—
Total	$	349,910,463	$	287,426,035	$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A75

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock			Preferred Stock
Balance as of 12/31/08	$	102,852		$	295,558
Realized gain (loss)		—			—
Change in unrealized appreciation (depreciation)		—			—
Net purchases (sales)		—			—
Transfers in and/or out of Level 3		(102,852	)		(295,558	)
Balance as of 12/31/09	$	—		$	—

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Oil, Gas & Consumable Fuels	9.0	%
Commercial Banks	7.7
Pharmaceuticals	7.4
Affiliated Money Market Mutual Fund (including 3.7% of collateral received for securities on loan)	6.2
Chemicals	3.6
Insurance	3.5
Diversified Telecommunication	3.2
Capital Markets	3.1
Diversified Financial Services	3.1
Aerospace & Defense	2.9
Media	2.9
Energy Equipment & Services	2.8
Computers & Peripherals	2.7
IT Services	2.3
Road & Rail	2.3
Metals & Mining	2.2
Internet Software & Services	2.1
Food Products	1.7
Hotels, Restaurants & Leisure	1.7
Software	1.7
Trading Companies & Distributors	1.7
Machinery	1.6
Electronic Equipment & Instruments	1.5
Electric Utilities	1.4
Industrial Conglomerates	1.4
Wireless Telecommunication Services	1.4
Airlines	1.3
Food & Staples Retailing	1.3
Specialty Retail	1.3
Communications Equipment	1.1
Consumer Finance	1.1

Electrical Equipment	1.1	%
Real Estate Management & Development	1.1
Biotechnology	1.0
Semiconductors & Semiconductor Equipment	0.9
Beverages	0.8
Construction & Engineering	0.8
Healthcare Equipment & Supplies	0.8
Household Products	0.8
Commercial Services & Supplies	0.7
Internet & Catalog Retail	0.7
Paper & Forest Products	0.7
Household Durables	0.6
Office Electronics	0.6
Automobiles	0.5
Building Products	0.5
Multi-Utilities	0.5
Construction Materials	0.4
Distributors	0.4
Auto Components	0.3
Gold	0.3
Life Sciences Tools & Services	0.3
Textiles, Apparel & Luxury Goods	0.3
Tobacco	0.3
Containers & Packaging	0.2
Diversified Consumer Services	0.2
Independent Power Producers & Energy Traders	0.2
Multiline Retail	0.2
Professional Services	0.2
Healthcare Technology	0.1
Personal Products	0.1
	102.8
Liabilities in excess of other assets	(2.8	)
	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A76

	GLOBAL PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The Portfolio invested in various derivative instruments during the reporting period. The primary types of risk associated with derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

The Portfolio did not hold any derivative instruments as of December 31, 2009, accordingly no derivative positions were presented in the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Warrant		Rights			Forward Contracts		Futures		Total
Foreign exchange contracts	$	—	$	—		$	139,834	$	—	$	139,834
Equity contracts		14,588		(1,962,957	)		—		65,736		(1,882,633	)
Total	$	14,588	$	(1,962,957	)	$	139,834	$	65,736	$	(1,742,799	)

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Forward Contracts
Foreign exchange contracts	$	31,520

For the year ended December 31, 2009, the Portfolio’s average value at settlement date payable for forward foreign currency exchange purchase contracts was $2,313,902 and the average value at settlement date receivable for forward foreign currency exchange sale contracts was $2,310,645.

SEE NOTES TO FINANCIAL STATEMENTS.

A77

GLOBAL PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2009

ASSETS
Investments, at value including securities on loan of $22,543,645:
Unaffiliated investments (cost $542,918,655)	$	598,723,436
Affiliated investments (cost $38,613,062)		38,613,062
Foreign currency, at value (cost $5,010,415)		4,937,937
Cash		7,020
Receivable for investments sold		1,550,569
Foreign tax reclaim receivable		1,153,373
Dividends and interest receivable		545,529
Prepaid expenses		6,078
Receivable for Series shares sold		29
Total Assets		645,537,033
LIABILITIES
Collateral for securities on loan		23,197,723
Payable for investments purchased		2,041,960
Management fee payable		393,904
Payable for Series shares repurchased		200,300
Accrued expenses and other liabilities		171,081
Affiliated transfer agent fee payable		595
Total Liabilities		26,005,563
NET ASSETS	$	619,531,470
Net assets were comprised of:
Paid-in capital	$	723,324,781
Retained earnings		(103,793,311	)
Net assets, December 31, 2009	$	619,531,470
Net asset value and redemption price per share, $619,531,470 / 37,149,452 outstanding shares of beneficial interest	$	16.68

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $724,051)	$	13,689,206
Affiliated income from securities loaned, net		227,558
Affiliated dividend income		88,164
Interest		5,442
		14,010,370
EXPENSES
Management fee		4,006,515
Custodian’s fees and expenses		238,000
Shareholders’ reports		152,000
Audit fee		36,000
Trustees’ fees		15,000
Insurance expenses		13,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Legal fees and expenses		9,000
Commitment fee on syndicated credit agreement		2,000
Miscellaneous		47,866
Total expenses		4,529,381
NET INVESTMENT INCOME		9,480,989
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		(62,900,316	)
Futures transactions		65,736
Foreign currency transactions		(1,578,682	)
		(64,413,262	)
Net change in unrealized appreciation (depreciation) on:
Investments		204,101,309
Foreign currencies		27,225
		204,128,534
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		139,715,272
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	149,196,261

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	9,480,989		$	15,477,187
Net realized loss on investments and foreign currencies		(64,413,262	)		(101,996,224	)
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		204,128,534			(316,326,272	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		149,196,261			(402,845,309	)
DISTRIBUTIONS		(15,473,292	)		(61,349,073	)
SERIES SHARE TRANSACTIONS:
Series shares sold [944,130 and 1,400,663 shares, respectively]		13,276,492			27,172,912
Series shares issued in reinvestment of dividends and distributions [1,100,519 and 2,931,155 shares, respectively]		15,473,292			61,349,073
Series shares repurchased [4,117,959 and 5,123,305 shares, respectively]		(55,673,306	)		(96,604,973	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(26,923,522	)		(8,082,988	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		106,799,447			(472,277,370	)
NET ASSETS:
Beginning of year		512,732,023			985,009,393
End of year	$	619,531,470		$	512,732,023

SEE NOTES TO FINANCIAL STATEMENTS.

A78

	GOVERNMENT INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 94.8%	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Asset-Backed Securities — 2.1%
Citibank Credit Card Issuance Trust,
Ser. 2007-A8, Class A8	5.650%	09/20/19	$	1,500	$	1,624,771
Small Business Administration Participation Certificates,
Ser. 1996-20J, Class 1	7.200%	10/01/16		1,895		2,053,713
Ser. 1997-20A, Class 1	7.150%	01/01/17		1,512		1,649,675
Ser. 1997-20G, Class 1	6.850%	07/01/17		677		721,576
Ser. 1998-20I, Class 1	6.000%	09/01/18		1,529		1,639,058
						7,688,793
Collateralized Mortgage Obligations — 3.7%
Federal Home Loan Mortgage Corp.,
Ser. 2002-2496, Class PM	5.500%	09/15/17		2,775		2,938,133
Ser. 2002-2501, Class MC	5.500%	09/15/17		1,076		1,144,635
Ser. 2002-2513, Class HC	5.000%	10/15/17		2,339		2,476,624
Ser. 2002-2518, Class PV	5.500%	06/15/19		1,920		2,028,261
Federal National Mortgage Association,
Ser. 2002-18, Class PC	5.500%	04/25/17		3,487		3,673,382
Ser. 2002-57, Class ND	5.500%	09/25/17		1,178		1,251,461
Merrill Lynch Mortgage Investors, Inc.,
Ser. 2003-E, Class A1(a)	0.541%	10/25/28		112		96,085
Structured Adjustable Rate Mortgage Loan Trust,
Ser. 2004-1, Class 4A3(a)	3.586%	02/25/34		378		312,890
						13,921,471
Commercial Mortgage-Backed Securities — 8.5%
Bear Stearns Commercial Mortgage Securities, Inc.,
Ser. 2004-T16, Class A5	4.600%	02/13/46		4,200		4,096,276
Ser. 2006-PW11, Class A4(a)	5.456%	03/11/39		860		840,589
Ser. 2006-T22, Class A4(a)	5.463%	04/12/38		2,825		2,844,214
Commercial Mortgage Loan Trust,
Ser. 2008-LS1, Class A2(a)	6.019%	12/10/49		1,230		1,261,699
CW Capital Cobalt Ltd.,
Ser. 2007-C3, Class A3(a)	5.820%	05/15/46		1,300		1,258,600
Greenwich Capital Commercial Funding Corp.,
Ser. 2007-GG9, Class A2	5.381%	03/10/39		2,415		2,446,512
Merrill Lynch Mortgage Trust,
Ser. 2006-C1, Class ASB(a)	5.656%	05/12/39		1,500		1,504,155
Merrill Lynch/Countrywide Commercial Mortgage Trust,
Ser. 2007-9, Class A2	5.590%	09/12/49		3,000		3,032,075
Morgan Stanley Capital I,
Ser. 2005-IQ9, Class AAB	4.510%	07/15/56		2,500		2,523,433
Ser. 2005-T19, Class AAB	4.852%	06/12/47		1,375		1,393,552
Ser. 2006-IQ11, Class A4(a)	5.770%	10/15/42		2,800		2,769,964
Wachovia Bank Commercial Mortgage Trust,
Ser. 2006-C25, Class A4(a)	5.740%	05/15/43		2,000		1,970,573
Ser. 2006-C27, Class A2	5.624%	07/15/45		3,000		3,071,287
Ser. 2007-C33, Class A3(a)	5.902%	02/15/51		3,000		2,950,483
						31,963,412
Corporate Bond — 0.3%
DEPFA ACS Bank (Ireland), Covered Notes, 144A	5.125%	03/16/37		1,520		1,117,170
Mortgage-Backed Securities — 42.5%
Federal Home Loan Mortgage Corp.(a)	2.761%	05/01/34		1,046		1,072,362
Federal Home Loan Mortgage Corp.(h)	4.500%	TBA 15 Year		3,500		3,596,250
Federal Home Loan Mortgage Corp.	5.000%	06/01/33-05/01/34		7,725		7,949,480
Federal Home Loan Mortgage Corp.(h)	5.000%	TBA 30 Year		9,500		9,740,464
Federal Home Loan Mortgage Corp.	5.500%	05/01/37-05/01/38		3,816		4,002,669
Federal Home Loan Mortgage Corp.(h)	5.500%	TBA 30 Year		9,000		9,427,500

SEE NOTES TO FINANCIAL STATEMENTS.

A79

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Mortgage-Backed Securities (continued)
Federal Home Loan Mortgage Corp.	6.000%	09/01/34	$	498	$	531,593
Federal Home Loan Mortgage Corp.	6.500%	01/01/11-09/01/32		355		379,153
Federal Home Loan Mortgage Corp.	7.000%	08/01/11-10/01/32		142		151,763
Federal National Mortgage Association(a)	2.602%	07/01/33		2,920		3,000,816
Federal National Mortgage Association(a)	2.764%	06/01/34		907		929,779
Federal National Mortgage Association(a)	3.673%	04/01/34		842		871,392
Federal National Mortgage Association(a)	3.680%	04/01/34		384		397,096
Federal National Mortgage Association(h)	4.000%	TBA 15 Year		500		501,172
Federal National Mortgage Association(h)	4.000%	TBA 30 Year		2,000		1,930,624
Federal National Mortgage Association(a)	4.029%	08/01/33		1,868		1,900,612
Federal National Mortgage Association(h)	4.500%	TBA 30 Year		2,000		1,996,250
Federal National Mortgage Association	5.000%	07/01/18-05/01/36		12,554		13,055,092
Federal National Mortgage Association(h)	5.000%	TBA 30 Year		13,000		13,339,222
Federal National Mortgage Association	5.500%	01/01/17-05/01/37		29,053		30,536,409
Federal National Mortgage Association(h)	5.500%	TBA 15 Year		4,500		4,758,750
Federal National Mortgage Association	6.000%	11/01/14-05/01/38		11,234		11,951,070
Federal National Mortgage Association(h)	6.000%	TBA 30 Year		14,000		14,826,868
Federal National Mortgage Association	6.260%	03/01/11		1,108		1,149,048
Federal National Mortgage Association	6.500%	01/01/15-10/01/37		5,177		5,576,501
Federal National Mortgage Association	7.000%	02/01/12-01/01/36		1,073		1,180,286
Federal National Mortgage Association	7.500%	05/01/10-10/01/12		50		52,910
Federal National Mortgage Association	8.000%	03/01/22-02/01/26		31		35,234
Federal National Mortgage Association	9.000%	02/01/25-04/01/25		165		191,019
Government National Mortgage Association(h)	4.500%	TBA 30 Year		3,500		3,496,727
Government National Mortgage Association	5.000%	07/15/33-04/15/34		3,082		3,193,397
Government National Mortgage Association	5.500%	03/15/34-03/15/36		2,729		2,875,030
Government National Mortgage Association(h)	6.000%	TBA 30 Year		2,000		2,113,124
Government National Mortgage Association	6.500%	07/15/32-08/15/32		616		663,642
Government National Mortgage Association	7.000%	03/15/23-08/15/28		1,394		1,545,736
Government National Mortgage Association	7.500%	12/15/25-02/15/26		267		300,467
Government National Mortgage Association	8.500%	09/15/24-04/15/25		285		328,699
						159,548,206
Municipal Bond — 0.2%
State of Utah, Build America Bonds, Ser. D	4.554%	07/01/24		630		616,581
U.S. Government Agency Obligations — 8.8%
Federal Farm Credit Bank(c)	4.875%	01/17/17		980		1,042,843
Federal Home Loan Banks(b)	5.000%	11/17/17		1,285		1,390,009
Federal Home Loan Banks	5.625%	06/11/21		2,015		2,193,483
Federal Home Loan Mortgage Corp.(c)	3.750%	03/27/19		1,950		1,911,821
Federal National Mortgage Association(c)	2.625%	11/20/14		3,005		2,981,699
Federal National Mortgage Association(c)	5.000%	05/11/17		4,370		4,746,698
Federal National Mortgage Association(c)	6.625%	11/15/30		1,230		1,478,224
Financing Corp. FICO,
Ser. 1P(d)	4.570%	05/11/18		4,000		2,753,748
Ser. 2P(d)	5.190%	11/30/17		2,940		2,075,081
Ser. 3P(d)	5.190%	11/30/17		3,640		2,569,149
Tennessee Valley Authority	4.500%	04/01/18		805		819,207
Tennessee Valley Authority	5.250%	09/15/39		870		862,044
Tennessee Valley Authority	5.500%	06/15/38		465		472,314
GMAC, Inc., FDIC Gtd. Notes	1.750%	10/30/12		4,415		4,386,258
Western Corporate Federal Credit Union, Gtd. Notes.	1.750%	11/02/12		3,405		3,389,712
						33,072,290
U.S. Treasury Securities — 28.7%
U.S. Treasury Bonds	3.500%	02/15/39		690		565,153
U.S. Treasury Bonds(c)	4.375%	11/15/39		4,545		4,350,419
U.S. Treasury Bonds	4.500%	02/15/36		2,510		2,472,350
U.S. Treasury Bonds(c)	4.500%	08/15/39		11,015		10,765,444

SEE NOTES TO FINANCIAL STATEMENTS.

A80

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. Treasury Securities (continued)
U.S. Treasury Bonds	6.250%	08/15/23	$	9,555	$	11,412,253
U.S. Treasury Bonds	6.875%	08/15/25		15,000		19,038,285
U.S. Treasury Bonds	7.125%	02/15/23		630		807,975
U.S. Treasury Bonds	8.875%	08/15/17		9,900		13,494,938
U.S. Treasury Notes	2.375%	08/31/14		40,560		40,262,127
U.S. Treasury Strips Coupon(g)	4.830%	11/15/24		890		434,363
U.S. Treasury Strips Coupon(g)	4.860%	08/15/24		1,095		542,752
U.S. Treasury Strips Coupon(g)	5.270%	05/15/20		1,055		678,521
U.S. Treasury Strips Principal(g)	6.260%	02/15/23		5,540		3,021,394
						107,845,974
TOTAL LONG-TERM INVESTMENTS (cost $349,490,039)						355,773,897
			Shares
SHORT-TERM INVESTMENTS — 26.4%
AFFILIATED MUTUAL FUNDS
Dryden Core Investment Fund — Short-Term Bond Series (Note 4)(e) (cost $52,856,631)				5,353,208		45,823,462
Dryden Core Investment Fund — Taxable Money Market Series (cost $53,269,210; includes $15,593,648 of cash collateral received for securities on loan)(Note 4)(e)(f)				53,269,210		53,269,210
TOTAL AFFILIATED MUTUAL FUNDS (cost $106,125,841)						99,092,672
TOTAL INVESTMENTS, BEFORE SECURITY SOLD SHORT —121.2% (cost $455,615,880)						454,866,569
			Principal Amount (000)#
SECURITY SOLD SHORT — (1.7)%
Mortgage-Backed Security
Federal National Mortgage Association (proceeds $6,332,852)	5.500%	TBA 30 Year	$	6,000		(6,280,314	)
TOTAL INVESTMENTS, NET OF SECURITY SOLD SHORT — 119.5% (cost $449,283,028)						448,586,255
LIABILITIES IN EXCESS OF OTHER ASSETS(i) — (19.5)%						(73,195,863	)
NET ASSETS — 100.0%					$	375,390,392

The following abbreviations are used in portfolio descriptions:

144A	Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
FDIC	Federal Deposit Insurance Corporation
FICO	Financing Corporation
TBA	To Be Announced

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

(a) Indicates a variable rate security. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at December 31, 2009.

(b) Security segregated as collateral for futures contracts.

(c) All or a portion of security is on loan. The aggregate market value of such securities is $15,162,729; cash collateral of $15,593,648 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(d) Represents zero coupon bond. Rate shown reflects the effective yield at December 31, 2009.

(e) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and the Dryden Core Investment Fund—Short-Term Bond Series.

SEE NOTES TO FINANCIAL STATEMENTS.

A81

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

(f) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(g) Rate shown reflects the effective yield at December 31, 2009.

(h) All or partial principal amount totaling $57,500,000 represents to-be-announced (“TBA”) securities acquired under mortgage dollar roll agreement.

(i) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on financial futures contracts and interest rate swap agreements as follows:

Open futures contracts outstanding at December 31, 2009:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2009		Unrealized Appreciation (Depreciation)
Long Positions:
96	U.S. Treasury 10 Yr. Notes	Mar. 2010	$	11,076,868	$	11,083,500	$	6,632
232	U.S. Treasury 2 Yr. Notes	Mar. 2010		50,442,160		50,173,625		(268,535	)
17	U.S. Treasury 5 Yr. Notes	Mar. 2010		1,948,115		1,944,508		(3,607	)
								(265,510	)
Short Position:
334	U.S. Long Bond	Mar. 2010		39,305,840		38,535,250		770,590
							$	505,080

Interest rate swap agreements outstanding at December 31, 2009:

Counterparty	Termination Date	Notional Amount (000)		Fixed Rate	Floating Rate	Fair value			Upfront Premium Paid/ (Receivable)		Unrealized Appreciation/ (Depreciation)
Deutsche Bank AG(a)	5/31/2014	$	4,660	2.355%	3 month LIBOR	$	(99,451	)	$	—	$	(99,451	)
Morgan Stanley Capital Services(b)	2/15/2036		2,445	4.128%	3 month LIBOR		137,438			—		137,438
						$	37,987		$	—	$	37,987

LIBOR—London Interbank Offered Rate

(a) Portfolio pays the floating rate and receives the fixed rate.

(b) Portfolio pays the fixed rate and receives the floating rate.

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

Investments in Securities	Level 1		Level 2			Level 3
Asset-Backed Securities	$	—	$	7,688,793		$	—
Collateralized Mortgage Obligations		—		13,921,471			—
Commercial Mortgage-Backed Securities		—		31,963,412			—
Corporate Bond		—		1,117,170			—
Mortgage-Backed Securities		—		159,548,206			—
Municipal Bond		—		616,581			—
U.S. Government Agency Obligations		—		33,072,290			—
U.S. Treasury Securities		—		107,845,974			—
Affiliated Mutual Funds		99,092,672		—			—
Security Sold Short		—		(6,280,314	)		—
		99,092,672		349,493,583			—
Other Financial Instruments*		505,080		37,987			—
Total	$	99,597,752	$	349,531,570		$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2009 and 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A82

	GOVERNMENT INCOME PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Mortgage-Backed Securities	42.5	%
U.S. Treasury Securities	28.7
Affiliated Mutual Funds (including 4.2% of collateral received for securities on loan)	26.4
U.S. Government Agency Obligations	8.8
Commercial Mortgage-Backed Securities	8.5
Collateralized Mortgage Obligations	3.7
Asset-Backed Securities	2.1
Corporate Bond	0.3
Municipal Bond	0.2
	121.2
Security Sold Short	(1.7	)
Liabilities in excess of other assets	(19.5	)
	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative Instruments as of December 31, 2009 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Interest rate contracts	Due from broker—variation margin	$	777,222	*	Due from broker—variation margin	$	272,142	*
Interest rate contracts	Unrealized appreciation on swaps		137,438		Unrealized depreciation on swaps		99,451
Total		$	914,660			$	371,593

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures		Forward Contracts			Swaps		Purchased Options			Written Options		Total
Foreign exchange contracts	$	—	$	(90,336	)	$	—	$	(49,981	)	$	—	$	(140,317	)
Interest rate contracts		3,982,348		—			287,251		(66,398	)		12,250		4,215,451
Total	$	3,982,348	$	(90,336	)	$	287,251	$	(116,379	)	$	12,250	$	4,075,134
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value						Futures		Forward Contracts			Swaps		Total
Foreign exchange contracts						$	—	$	88,182		$	—	$	—
Interest rate contracts							290,928		—			246,857		625,967
Total						$	290,928	$	88,182		$	246,857	$	625,967

For the year ended December 31, 2009, the Portfolio’s average volume of derivative activities is as follows:

Purchased Options (Cost)	Written Options (Premium Received)		Futures Long Position (Value at Trade Date)		Futures Short Position (Value at Trade Date)		Forward Currency Contracts—Purchased (Value at Settlement Date Payable)		Forward Currency Contracts—Sold (Value at Settlement Date Receivable)		Interest Rate Swaps (Notional Amount in USD (000))
$12,889	$	1,181	$	40,653,521	$	26,139,070	$	66,132	$	20,299	$	25,467

SEE NOTES TO FINANCIAL STATEMENTS.

A83

GOVERNMENT INCOME PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2009

ASSETS
Investments, at value including securities on loan of $15,162,729:
Unaffiliated investments (cost $349,490,039)	$	355,773,897
Affiliated investments (cost $106,125,841)		99,092,672
Cash		24,343
Receivable for investments sold		41,909,015
Dividends and interest receivable		2,649,138
Unrealized appreciation on swaps		137,438
Due from broker—variation margin		126,924
Receivable for Series shares sold		83,315
Prepaid expenses		4,292
Total Assets		499,801,034
LIABILITIES
Payable for investments purchased		102,146,806
Collateral for securities on loan		15,593,648
Securities sold short, at value (proceeds received $6,332,852)		6,280,314
Management fee payable		128,816
Unrealized depreciation on swaps		99,451
Accrued expenses and other liabilities		94,726
Payable for Series shares repurchased		65,312
Deferred trustees’ fees		974
Affiliated transfer agent fee payable		595
Total Liabilities		124,410,642
NET ASSETS	$	375,390,392
Net assets were comprised of:
Paid-in capital	$	365,116,986
Retained earnings		10,273,406
Net assets, December 31, 2009	$	375,390,392
Net asset value and redemption price per share, $375,390,392 / 31,642,071 outstanding shares of beneficial interest	$	11.86

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Interest	$	12,196,732
Affiliated dividend income		1,067,749
Affiliated income from securities loaned, net		118,955
		13,383,436
EXPENSES
Management fee		1,493,853
Shareholders’ reports		115,000
Custodian’s fees and expenses		76,000
Audit fee		28,000
Trustees’ fees		12,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Interest expense (Note 8)		7,925
Insurance expenses		6,000
Legal fees and expenses		6,000
Commitment fee on syndicated credit agreement		4,000
Miscellaneous		7,628
Total expenses		1,766,406
NET INVESTMENT INCOME		11,617,030
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(23,213))		5,653,782
Short sale transactions		(55,859	)
Futures transactions		3,982,348
Swap agreement transactions		287,251
Foreign currency transactions		(90,591	)
Written options transactions		12,250
		9,789,181
Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $6,446,272)		5,582,273
Securities sold short		52,538
Futures		290,928
Swaps		246,857
Foreign currencies		88,182
		6,260,778
NET GAIN ON INVESTMENTS, SWAPS AND FOREIGN CURRENCIES		16,049,959
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	27,666,989

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	11,617,030		$	13,906,867
Net realized gain on investments, swaps and foreign currencies		9,789,181			8,180,834
Net change in unrealized appreciation (depreciation) on investments, swaps and foreign currencies		6,260,778			(7,237,091	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		27,666,989			14,850,610
DISTRIBUTIONS		(12,874,743	)		(14,159,429	)
SERIES SHARE TRANSACTIONS:
Series shares sold [1,335,219 and 3,779,508 shares, respectively]		15,539,947			43,082,961
Series shares issued in reinvestment of dividends and distributions [1,112,755 and 1,259,137 shares, respectively]		12,874,743			14,159,429
Series shares repurchased [3,294,616 and 2,453,088 shares, respectively]		(38,329,997	)		(27,727,532	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(9,915,307	)		29,514,858
TOTAL INCREASE IN NET ASSETS		4,876,939			30,206,039
NET ASSETS:
Beginning of year		370,513,453			340,307,414
End of year	$	375,390,392		$	370,513,453

SEE NOTES TO FINANCIAL STATEMENTS.

A84

	STOCK INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS		December 31, 2009

LONG-TERM INVESTMENTS — 98.5%
COMMON STOCKS — 98.5%	Shares	Value (Note 2)
Aerospace & Defense — 2.7%
Boeing Co. (The)	148,836	$	8,056,493
General Dynamics Corp.	82,800		5,644,476
Goodrich Corp.	22,900		1,471,325
Honeywell International, Inc.	156,650		6,140,680
ITT Corp.	37,600		1,870,224
L-3 Communications Holdings, Inc.	24,600		2,138,970
Lockheed Martin Corp.	68,598		5,168,859
Northrop Grumman Corp.	70,826		3,955,632
Precision Castparts Corp.	28,000		3,089,800
Raytheon Co.	85,718		4,416,191
Rockwell Collins, Inc.	30,600		1,694,016
United Technologies Corp.	196,100		13,611,301
			57,257,967
Air Freight & Logistics — 1.0%
C.H. Robinson Worldwide, Inc.	38,200		2,243,486
Expeditors International of Washington, Inc.	41,600		1,444,768
FedEx Corp.	64,740		5,402,553
United Parcel Service, Inc. (Class B Stock)	209,400		12,013,278
			21,104,085
Airlines — 0.1%
Southwest Airlines Co.	164,137		1,876,086
Auto Components — 0.2%
Goodyear Tire & Rubber Co. (The)(a)	49,600		699,360
Johnson Controls, Inc.	141,300		3,849,012
			4,548,372
Automobiles — 0.4%
Ford Motor Co.(a)(b)	670,659		6,706,590
Harley-Davidson, Inc.	48,300		1,217,160
			7,923,750
Beverages — 2.6%
Brown-Forman Corp. (Class B Stock)	20,500		1,098,185
Coca-Cola Co. (The)(b)	482,400		27,496,800
Coca-Cola Enterprises, Inc.	69,000		1,462,800
Constellation Brands, Inc. (Class A Stock)(a)	43,200		688,176
Dr. Pepper Snapple Group, Inc.	50,600		1,431,980
Molson Coors Brewing Co. (Class B Stock)	31,100		1,404,476
Pepsi Bottling Group, Inc.	28,600		1,072,500
PepsiCo, Inc.	323,640		19,677,312
			54,332,229
Biotechnology — 1.5%
Amgen, Inc.(a)	211,364		11,956,861
Biogen Idec, Inc.(a)(b)	61,225		3,275,538
Celgene Corp.(a)	92,900		5,172,672
Cephalon, Inc.(a)	15,400		961,114
Genzyme Corp.(a)	51,900		2,543,619
Gilead Sciences, Inc.(a)	189,600		8,205,888
			32,115,692
Building Products — 0.1%
Masco Corp.	81,300		1,122,753

COMMON STOCKS (continued)	Shares	Value (Note 2)
Capital Markets — 2.8%
Ameriprise Financial, Inc.	51,600	$	2,003,112
Bank of New York Mellon Corp. (The)	254,989		7,132,042
Charles Schwab Corp. (The)	196,600		3,700,012
E*Trade Financial Corp.(a)(b)	252,400		441,700
Federated Investors, Inc. (Class B Stock)(b)	22,600		621,500
Franklin Resources, Inc.	33,100		3,487,085
Goldman Sachs Group, Inc. (The)	108,500		18,319,140
Invesco Ltd.	91,400		2,146,986
Janus Capital Group, Inc.(b)	39,000		524,550
Legg Mason, Inc.	32,600		983,216
Morgan Stanley	288,110		8,528,056
Northern Trust Corp.	51,000		2,672,400
State Street Corp.	104,900		4,567,346
T. Rowe Price Group, Inc.(b)	57,000		3,035,250
			58,162,395
Chemicals — 1.9%
Air Products & Chemicals, Inc.	44,700		3,623,382
Airgas, Inc.	14,400		685,440
CF Industries Holdings, Inc.,	10,000		907,800
Dow Chemical Co. (The)	232,061		6,411,845
E.I. du Pont de Nemours & Co.	184,391		6,208,445
Eastman Chemical Co.	15,800		951,792
Ecolab, Inc.	50,000		2,229,000
FMC Corp.	15,300		853,128
International Flavors & Fragrances, Inc.	16,100		662,354
Monsanto Co.	111,596		9,122,973
PPG Industries, Inc.	35,800		2,095,732
Praxair, Inc.	64,300		5,163,933
Sigma-Aldrich Corp.	25,700		1,298,621
			40,214,445
Commercial Banks — 2.7%
BB&T Corp.(b)	142,200		3,607,614
Comerica, Inc.	36,450		1,077,827
Fifth Third Bancorp	163,649		1,595,578
First Horizon National Corp.(a)	49,979		669,721
Huntington Bancshares, Inc.	130,775		477,329
KeyCorp	174,700		969,585
M&T Bank Corp.(b)	16,300		1,090,307
Marshall & Ilsley Corp.	105,998		577,689
PNC Financial Services Group, Inc.	98,993		5,225,840
Regions Financial Corp.	252,212		1,334,202
SunTrust Banks, Inc.	103,000		2,089,870
U.S. Bancorp	407,481		9,172,397
Wells Fargo & Co.	1,058,686		28,573,935
Zions Bancorporation(b)	30,300		388,749
			56,850,643
Commercial Services & Supplies — 0.5%
Avery Dennison Corp.	25,400		926,846
Cintas Corp.	26,500		690,325
Iron Mountain, Inc.(a)	39,200		892,192
Pitney Bowes, Inc.	43,500		990,060
Republic Services, Inc.	65,410		1,851,757

SEE NOTES TO FINANCIAL STATEMENTS.

A85

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Commercial Services & Supplies (continued)
RR Donnelley & Sons Co.	46,600	$	1,037,782
Stericycle, Inc.(a)(b)	19,300		1,064,781
Waste Management, Inc.(b)	103,530		3,500,349
			10,954,092
Communications Equipment — 2.6%
Cisco Systems, Inc.(a)	1,207,500		28,907,550
Harris Corp.	28,200		1,340,910
JDS Uniphase Corp.(a)	45,587		376,093
Juniper Networks, Inc.(a)(b)	111,200		2,965,704
Motorola, Inc.(a)	487,795		3,785,289
QUALCOMM, Inc.	342,800		15,857,928
Tellabs, Inc.(a)	88,000		499,840
			53,733,314
Computers & Peripherals — 5.9%
Apple, Inc.(a)(b)	188,700		39,789,282
Dell, Inc.(a)	365,900		5,254,324
EMC Corp.(a)(b)	434,874		7,597,249
Hewlett-Packard Co.	496,316		25,565,237
International Business Machines Corp.	274,600		35,945,140
Lexmark International, Inc., (Class A Stock)(a)	15,514		403,054
NetApp, Inc.(a)	72,000		2,476,080
QLogic Corp.(a)(b)	27,700		522,699
SanDisk Corp.(a)(b)	47,900		1,388,621
Sun Microsystems, Inc.(a)	155,950		1,461,251
Teradata Corp.(a)	38,200		1,200,626
Western Digital Corp.(a)	45,900		2,026,485
			123,630,048
Construction & Engineering — 0.2%
Fluor Corp.	38,000		1,711,520
Jacobs Engineering Group, Inc.(a)(b)	25,700		966,577
Quanta Services, Inc.(a)	38,000		791,920
			3,470,017
Construction Materials — 0.1%
Vulcan Materials Co.	23,700		1,248,279
Consumer Finance — 0.8%
American Express Co.	252,100		10,215,092
Capital One Financial Corp.	96,169		3,687,119
Discover Financial Services	120,505		1,772,629
SLM Corp.(a)	99,000		1,115,730
			16,790,570
Containers & Packaging — 0.2%
Ball Corp.	20,400		1,054,680
Bemis Co., Inc.	21,300		631,545
Owens-Illinois, Inc.(a)	37,100		1,219,477
Pactiv Corp.(a)	29,300		707,302
Sealed Air Corp.	33,020		721,817
			4,334,821
Distributors — 0.1%
Genuine Parts Co.	33,025		1,253,629

COMMON STOCKS (continued)	Shares	Value (Note 2)
Diversified Consumer Services — 0.2%
Apollo Group, Inc. (Class A Stock)(a)(b)	26,900	$	1,629,602
DeVry, Inc.	13,700		777,201
H&R Block, Inc.	71,000		1,606,020
			4,012,823
Diversified Financial Services — 4.3%
Bank of America Corp.(b)	2,076,232		31,268,054
Citigroup, Inc.	4,020,676		13,308,438
CME Group, Inc.	14,070		4,726,816
IntercontinentalExchange, Inc.(a)(b)	16,000		1,796,800
JPMorgan Chase & Co.	827,545		34,483,800
Leucadia National Corp.(a)	38,900		925,431
Moody’s Corp.(b)	42,120		1,128,816
Nasdaq OMX Group, Inc. (The)(a)	25,700		509,374
NYSE Euronext	56,700		1,434,510
			89,582,039
Diversified Telecommunication Services — 2.9%
AT&T, Inc.	1,237,811		34,695,842
CenturyTel, Inc.(b)	63,130		2,285,937
Frontier Communications Corp.	77,200		602,932
Qwest Communications International, Inc.	322,047		1,355,818
Verizon Communications, Inc.	600,838		19,905,763
Windstream Corp.	90,665		996,409
			59,842,701
Electric Utilities — 2.0%
Allegheny Energy, Inc.	32,600		765,448
American Electric Power Co., Inc.	98,140		3,414,291
Duke Energy Corp.	272,082		4,682,531
Edison International	68,100		2,368,518
Entergy Corp.	38,800		3,175,392
Exelon Corp.	135,950		6,643,877
FirstEnergy Corp.	61,336		2,849,057
FPL Group, Inc.	86,300		4,558,366
Northeast Utilities	31,100		802,069
Pepco Holdings, Inc.	47,400		798,690
Pinnacle West Capital Corp.	20,900		764,522
PPL Corp.	78,500		2,536,335
Progress Energy, Inc.	58,414		2,395,558
Southern Co.	164,100		5,467,812
			41,222,466
Electrical Equipment — 0.5%
Emerson Electric Co.	159,600		6,798,960
First Solar, Inc.(a)(b)	8,500		1,150,900
Rockwell Automation, Inc.	30,300		1,423,494
Roper Industries, Inc.	14,900		780,313
			10,153,667
Electronic Equipment & Instruments — 0.6%
Agilent Technologies, Inc.(a)(b)	71,582		2,224,053
Amphenol Corp. (Class A Stock)	33,100		1,528,558
Corning, Inc.	326,500		6,304,715
FLIR Systems, Inc.(a)	30,700		1,004,504
Jabil Circuit, Inc.	44,000		764,280
Molex, Inc.	26,600		573,230
			12,399,340

SEE NOTES TO FINANCIAL STATEMENTS.

A86

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Energy Equipment & Services — 1.8%
Baker Hughes, Inc.(b)	61,130	$	2,474,542
BJ Services Co.	54,300		1,009,980
Cameron International Corp.(a)	48,100		2,010,580
Diamond Offshore Drilling, Inc.	13,600		1,338,512
FMC Technologies, Inc.(a)	24,500		1,417,080
Halliburton Co.	183,000		5,506,470
Nabors Industries Ltd. (Bermuda)(a)	60,800		1,330,912
National Oilwell Varco, Inc.	88,200		3,888,738
Rowan Cos., Inc.(a)	24,100		545,624
Schlumberger Ltd.	250,600		16,311,554
Smith International, Inc.	44,200		1,200,914
			37,034,906
Food & Staples Retailing — 2.6%
Costco Wholesale Corp.	88,232		5,220,687
CVS Caremark Corp.	289,238		9,316,356
Kroger Co. (The)	138,700		2,847,511
Safeway, Inc.	88,100		1,875,649
SUPERVALU, Inc.	47,508		603,827
Sysco Corp.	123,700		3,456,178
Walgreen Co.	206,400		7,579,008
Wal-Mart Stores, Inc.	441,500		23,598,175
Whole Foods Market, Inc.(a)(b)	28,300		776,835
			55,274,226
Food Products — 1.6%
Archer-Daniels-Midland Co.	135,238		4,234,302
Campbell Soup Co.	39,300		1,328,340
ConAgra Foods, Inc.	94,500		2,178,225
Dean Foods Co.(a)(b)	38,800		699,952
General Mills, Inc.	69,000		4,885,890
H.J. Heinz Co.	65,950		2,820,022
Hershey Co. (The)(b)	35,800		1,281,282
Hormel Foods Corp.	15,500		595,975
J.M. Smucker Co. (The)	25,700		1,586,975
Kellogg Co.	54,200		2,883,440
Kraft Foods, Inc. (Class A Stock)	308,311		8,379,893
McCormick & Co., Inc.	27,600		997,188
Sara Lee Corp.	151,100		1,840,398
Tyson Foods, Inc. (Class A Stock)	66,600		817,182
			34,529,064
Gas Utilities — 0.1%
EQT Corp.	25,100		1,102,392
Nicor, Inc.	10,200		429,420
Questar Corp.	33,200		1,380,124
			2,911,936
Healthcare Equipment & Supplies — 2.0%
Baxter International, Inc.	126,400		7,417,152
Becton, Dickinson & Co.	49,400		3,895,684
Boston Scientific Corp.(a)	313,199		2,818,791
C.R. Bard, Inc.	21,000		1,635,900
CareFusion Corp.(a)	36,237		906,287
DENTSPLY International, Inc.	31,700		1,114,889
Hospira, Inc.(a)	35,420		1,806,420
Intuitive Surgical, Inc.(a)	8,100		2,456,892
Medtronic, Inc.	231,900		10,198,962
St. Jude Medical, Inc.(a)	68,800		2,530,464

COMMON STOCKS (continued)	Shares	Value (Note 2)
Healthcare Equipment & Supplies (continued)
Stryker Corp.	59,500	$	2,997,015
Varian Medical Systems, Inc.(a)(b)	23,300		1,091,605
Zimmer Holdings, Inc.(a)	43,986		2,600,013
			41,470,074
Healthcare Providers & Services — 2.1%
Aetna, Inc.	91,748		2,908,412
AmerisourceBergen Corp.	61,300		1,598,091
Cardinal Health, Inc.	72,475		2,336,594
CIGNA Corp.	59,200		2,087,984
Coventry Health Care, Inc.(a)	32,750		795,497
DaVita, Inc.(a)	22,100		1,298,154
Express Scripts, Inc.(a)	55,800		4,823,910
Humana, Inc.(a)	36,100		1,584,429
Laboratory Corp. of America Holdings(a)(b)	22,300		1,668,932
McKesson Corp.	55,707		3,481,687
Medco Health Solutions, Inc.(a)	98,992		6,326,579
Patterson Cos., Inc.(a)(b)	17,100		478,458
Quest Diagnostics, Inc.	34,800		2,101,224
Tenet Healthcare Corp.(a)	90,000		485,100
UnitedHealth Group, Inc.	238,000		7,254,240
WellPoint, Inc.(a)	100,400		5,852,316
			45,081,607
Healthcare Technology
IMS Health, Inc.	36,820		775,429
Hotels, Restaurants & Leisure — 1.4%
Carnival Corp.(a)	89,100		2,823,579
Darden Restaurants, Inc.(b)	30,850		1,081,909
International Game Technology	56,700		1,064,259
Marriott International, Inc. (Class A Stock)(b)	48,703		1,327,157
McDonald’s Corp.	222,900		13,917,876
Starbucks Corp.(a)(b)	151,100		3,484,366
Starwood Hotels & Resorts Worldwide, Inc.(b)	36,000		1,316,520
Wyndham Worldwide Corp.	41,363		834,292
Wynn Resorts Ltd.	12,000		698,760
Yum! Brands, Inc.	99,300		3,472,521
			30,021,239
Household Durables — 0.3%
Black & Decker Corp. (The)	11,400		739,062
D.R. Horton, Inc.	55,200		600,024
Fortune Brands, Inc.	31,900		1,378,080
Harman International Industries, Inc.	14,100		497,448
Leggett & Platt, Inc.	36,800		750,720
Lennar Corp. (Class A Stock)	25,500		325,635
Newell Rubbermaid, Inc.	64,649		970,381
Pulte Homes, Inc.(a)(b)	53,485		534,850
Whirlpool Corp.(b)	14,607		1,178,201
			6,974,401
Household Products — 2.5%
Clorox Co.(b)	28,700		1,750,700
Colgate-Palmolive Co.	104,500		8,584,675
Kimberly-Clark Corp.	87,988		5,605,716
Procter & Gamble Co. (The)	610,981		37,043,778
			52,984,869

SEE NOTES TO FINANCIAL STATEMENTS.

A87

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Independent Power Producers & Energy Traders — 0.2%
AES Corp. (The)(a)	145,300	$	1,933,943
Constellation Energy Group, Inc.	43,950		1,545,722
			3,479,665
Industrial Conglomerates — 2.2%
3M Co.	147,600		12,202,092
General Electric Co.	2,214,000		33,497,820
Textron, Inc.	48,400		910,404
			46,610,316
Insurance — 2.2%
Aflac, Inc.	101,900		4,712,875
Allstate Corp. (The)	118,388		3,556,376
American International Group, Inc.(a)(b)	25,229		756,365
Aon Corp.	57,125		2,190,173
Assurant, Inc.	24,500		722,260
Chubb Corp. (The),	75,000		3,688,500
Cincinnati Financial Corp.	39,028		1,024,095
Genworth Financial, Inc. (Class A Stock)(a)	105,200		1,194,020
Hartford Financial Services Group, Inc.	79,000		1,837,540
Lincoln National Corp.	62,963		1,566,519
Loews Corp.	73,226		2,661,765
Marsh & McLennan Cos., Inc.	114,700		2,532,576
MetLife, Inc.	175,000		6,186,250
Principal Financial Group, Inc.	65,500		1,574,620
Progressive Corp. (The)(a)	134,000		2,410,660
Torchmark Corp.	21,300		936,135
Travelers Cos., Inc. (The)	119,498		5,958,170
Unum Group	75,756		1,478,757
XL Capital Ltd. (Class A Stock)	74,300		1,361,919
			46,349,575
Internet & Catalog Retail — 0.6%
Amazon.com, Inc.(a)	69,300		9,322,236
Expedia, Inc.(a)(b)	44,900		1,154,379
priceline.com, Inc.(a)	8,700		1,900,950
			12,377,565
Internet Software & Services — 2.0%
Akamai Technologies, Inc.(a)(b)	36,100		914,413
eBay, Inc.(a)	229,900		5,411,846
Google, Inc. (Class A Stock)(a)	50,600		31,370,988
VeriSign, Inc.(a)(b)	41,300		1,001,112
Yahoo!, Inc.(a)	248,200		4,164,796
			42,863,155
IT Services — 1.6%
Affiliated Computer Services, Inc. (Class A Stock)(a)	19,700		1,175,893
Automatic Data Processing, Inc.	106,000		4,538,920
Cognizant Technology Solutions Corp. (Class A Stock)(a)	58,400		2,645,520
Computer Sciences Corp.(a)	31,900		1,835,207
Fidelity National Information Services, Inc.	63,600		1,490,784
Fiserv, Inc.(a)	33,000		1,599,840

COMMON STOCKS (continued)	Shares	Value (Note 2)
IT Services (continued)
Mastercard, Inc. (Class A Stock)(b)	20,200	$	5,170,796
Paychex, Inc.	63,250		1,937,980
SAIC, Inc.(a)	50,600		958,364
Total System Services, Inc.	41,593		718,311
Visa, Inc. (Class A Stock)	92,000		8,046,320
Western Union Co. (The)	153,704		2,897,321
			33,015,256
Leisure Equipment & Products — 0.1%
Eastman Kodak Co.(a)(b)	30,000		126,600
Hasbro, Inc.	27,150		870,429
Mattel, Inc.	73,281		1,464,154
			2,461,183
Life Sciences Tools & Services — 0.4%
Life Technologies Corp.(a)(b)	37,430		1,954,969
Millipore Corp.(a)	12,500		904,375
PerkinElmer, Inc.	27,200		560,048
Thermo Fisher Scientific, Inc.(a)	89,100		4,249,179
Waters Corp.(a)(b)	20,000		1,239,200
			8,907,771
Machinery — 1.6%
Caterpillar, Inc.(b)	128,600		7,328,914
Cummins, Inc.	40,600		1,861,916
Danaher Corp.	55,500		4,173,600
Deere & Co.	85,800		4,640,922
Dover Corp.	39,400		1,639,434
Eaton Corp.	34,500		2,194,890
Flowserve Corp.	12,000		1,134,360
Illinois Tool Works, Inc.	82,400		3,954,376
PACCAR, Inc.	73,328		2,659,607
Pall Corp.	26,200		948,440
Parker Hannifin Corp.	31,487		1,696,519
Snap-On, Inc.	12,700		536,702
Stanley Works (The)(b)	17,500		901,425
			33,671,105
Media — 2.8%
CBS Corp. (Class B Stock)	146,668		2,060,685
Comcast Corp. (Class A Stock)	600,846		10,130,264
DIRECTV (Class A Stock)(a)	192,700		6,426,545
Gannett Co., Inc.	56,300		836,055
Interpublic Group of Cos., Inc.(a)	90,900		670,842
McGraw-Hill Cos., Inc. (The)	67,800		2,271,978
Meredith Corp.	7,200		222,120
New York Times Co. (The) (Class A Stock)(a)	13,200		163,152
News Corp. (Class A Stock)(b)	465,800		6,376,802
Omnicom Group, Inc.	67,200		2,630,880
Scripps Networks Interactive, Inc. (Class A Stock)	20,300		842,450
Time Warner Cable, Inc.	75,826		3,138,438
Time Warner, Inc.	245,840		7,163,778
Viacom, Inc. (Class B Stock)(a)	128,568		3,822,327
Walt Disney Co. (The)	383,701		12,374,357
Washington Post Co. (The) (Class B Stock)	1,200		527,520
			59,658,193

SEE NOTES TO FINANCIAL STATEMENTS.

A88

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Metals & Mining — 1.1%
AK Steel Holding Corp.	23,900	$	510,265
Alcoa, Inc.	204,576		3,297,765
Allegheny Technologies, Inc.	18,440		825,559
Cliffs Natural Resources, Inc.	22,200		1,023,198
Freeport-McMoRan Copper & Gold, Inc.(a)	88,806		7,130,233
Newmont Mining Corp.	102,003		4,825,762
Nucor Corp.	65,000		3,032,250
Titanium Metals Corp.(a)	6,000		75,120
United States Steel Corp.(b)	27,340		1,506,981
			22,227,133
Multiline Retail — 0.8%
Big Lots, Inc.(a)(b)	16,900		489,762
Family Dollar Stores, Inc.	27,100		754,193
J.C. Penney Co., Inc.	48,900		1,301,229
Kohl’s Corp.(a)	64,900		3,500,057
Macy’s, Inc.	91,720		1,537,227
Nordstrom Inc.(b)	35,700		1,341,606
Sears Holdings Corp.(a)(b)	8,312		693,637
Target Corp.	162,568		7,863,414
			17,481,125
Multi-Utilities — 1.4%
Ameren Corp.	48,500		1,355,575
CenterPoint Energy, Inc.	79,010		1,146,435
CMS Energy Corp.(b)	48,100		753,246
Consolidated Edison, Inc.(b)	59,600		2,707,628
Dominion Resources, Inc.	126,084		4,907,189
DTE Energy Co.	35,600		1,551,804
Integrys Energy Group, Inc.	17,750		745,323
NiSource, Inc.	57,000		876,660
PG&E Corp.	78,800		3,518,420
Public Service Enterprise Group, Inc.	110,600		3,677,450
SCANA Corp.	22,200		836,496
Sempra Energy	52,554		2,941,973
TECO Energy, Inc.	48,200		781,804
Wisconsin Energy Corp.	22,600		1,126,158
Xcel Energy, Inc.	96,695		2,051,868
			28,978,029
Office Electronics — 0.1%
Xerox Corp.	191,692		1,621,714
Oil, Gas & Consumable Fuels — 9.5%
Anadarko Petroleum Corp.	102,726		6,412,157
Apache Corp.	70,750		7,299,278
Cabot Oil & Gas Corp.	19,000		828,210
Chesapeake Energy Corp.	134,000		3,467,920
Chevron Corp.	421,392		32,442,970
ConocoPhillips	311,679		15,917,447
Consol Energy, Inc.	37,300		1,857,540
Denbury Resources, Inc.(a)(b)	43,900		649,720
Devon Energy Corp.	94,000		6,909,000
El Paso Corp.	150,911		1,483,455
EOG Resources, Inc.	51,900		5,049,870
Exxon Mobil Corp.	989,370		67,465,140
Hess Corp.	62,000		3,751,000
Marathon Oil Corp.	150,494		4,698,423

COMMON STOCKS (continued)	Shares	Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Massey Energy Co.	17,500	$	735,175
Murphy Oil Corp.	40,600		2,200,520
Noble Energy, Inc.	35,900		2,556,798
Occidental Petroleum Corp.	168,100		13,674,935
Peabody Energy Corp.	56,400		2,549,844
Pioneer Natural Resources Co.	21,600		1,040,472
Range Resources Corp.	32,200		1,605,170
Southwestern Energy Co.(a)	72,500		3,494,500
Spectra Energy Corp.	137,542		2,820,986
Sunoco, Inc.	27,000		704,700
Tesoro Corp.(b)	31,500		426,825
Valero Energy Corp.	112,600		1,886,050
Williams Cos., Inc. (The)	124,400		2,622,352
XTO Energy, Inc.	121,800		5,667,354
			200,217,811
Paper & Forest Products — 0.3%
International Paper Co.	87,867		2,353,078
MeadWestvaco Corp.	38,689		1,107,666
Weyerhaeuser Co.	45,400		1,958,556
			5,419,300
Personal Products — 0.3%
Avon Products, Inc.	91,000		2,866,500
Estee Lauder Cos., Inc. (The) (Class A Stock)	22,900		1,107,444
Mead Johnson Nutrition Co., Inc. (Class A Stock)	34,493		1,507,344
			5,481,288
Pharmaceuticals — 6.4%
Abbott Laboratories	320,100		17,282,199
Allergan, Inc.	64,900		4,089,349
Bristol-Myers Squibb Co.(b)	366,540		9,255,135
Eli Lilly & Co.	213,300		7,616,943
Forest Laboratories, Inc.(a)	64,300		2,064,673
Johnson & Johnson	578,171		37,239,994
King Pharmaceuticals, Inc. (a)	45,233		555,009
Merck & Co., Inc.	636,104		23,243,234
Mylan, Inc.(a)(b)	59,200		1,091,056
Pfizer, Inc.	1,685,273		30,655,116
Watson Pharmaceuticals, Inc.(a)(b)	20,400		808,044
			133,900,752
Professional Services — 0.1%
Dun & Bradstreet Corp.	11,300		953,381
Equifax, Inc.	29,100		898,899
Monster Worldwide, Inc.(a)(b)	25,200		438,480
Robert Half International, Inc.(b)	32,500		868,725
			3,159,485
Real Estate Investment Trusts — 1.2%
Apartment Investment & Management Co., REIT (Class A Stock)(b)	34,974		556,786
AvalonBay Communities, Inc.(b)	16,918		1,389,137
Boston Properties, Inc.	28,100		1,884,667
Equity Residential(b)	57,500		1,942,350
HCP, Inc.	57,600		1,759,104
Health Care REIT, Inc.(b)	22,900		1,014,928

SEE NOTES TO FINANCIAL STATEMENTS.

A89

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

COMMON STOCKS (continued)	Shares	Value (Note 2)
Real Estate Investment Trusts (continued)
Host Hotels & Resorts, Inc.(a)(b)	131,726	$	1,537,242
Kimco Realty Corp.(b)	76,400		1,033,692
Plum Creek Timber Co., Inc.(b)	35,000		1,321,600
ProLogis(b)	91,500		1,252,635
Public Storage	27,600		2,248,020
Simon Property Group, Inc.(b)	59,001		4,708,280
Ventas, Inc.	32,600		1,425,924
Vornado Realty Trust(b)	33,557		2,346,977
			24,421,342
Real Estate Management & Development
CB Richard Ellis Group, Inc. (Class A Stock)(a)(b)	51,100		693,427
Road & Rail — 1.0%
Burlington Northern Santa Fe Corp.	54,626		5,387,216
CSX Corp.	82,424		3,996,740
Norfolk Southern Corp.	76,300		3,999,646
Ryder System, Inc.	12,800		526,976
Union Pacific Corp.	104,800		6,696,720
			20,607,298
Semiconductors & Semiconductor Equipment — 2.6%
Advanced Micro Devices, Inc.(a)	115,600		1,119,008
Altera Corp.(b)	62,500		1,414,375
Analog Devices, Inc.	61,900		1,954,802
Applied Materials, Inc.	270,100		3,765,194
Broadcom Corp. (Class A Stock)(a)(b)	92,450		2,907,552
Intel Corp.	1,160,600		23,676,240
KLA-Tencor Corp.	32,000		1,157,120
Linear Technology Corp.	48,700		1,487,298
LSI Corp.(a)	141,700		851,617
MEMC Electronic Materials, Inc.(a)(b)	39,700		540,714
Microchip Technology, Inc.	38,900		1,130,434
Micron Technology, Inc.(a)(b)	167,700		1,770,912
National Semiconductor Corp.	40,500		622,080
Novellus Systems, Inc.(a)(b)	22,400		522,816
NVIDIA Corp.(a)(b)	116,650		2,179,022
Teradyne, Inc.(a)(b)	31,800		341,214
Texas Instruments, Inc.	270,200		7,041,412
Xilinx, Inc.(b)	54,900		1,375,794
			53,857,604
Software — 4.3%
Adobe Systems, Inc.(a)	108,200		3,979,596
Autodesk, Inc.(a)(b)	48,200		1,224,762
BMC Software, Inc.(a)	40,100		1,608,010
CA, Inc.	85,873		1,928,707
Citrix Systems, Inc.(a)	37,300		1,552,053
Compuware Corp.(a)	57,500		415,725
Electronic Arts, Inc.(a)(b)	58,700		1,041,925
Intuit, Inc.(a)	66,900		2,054,499
McAfee, Inc.(a)	34,200		1,387,494
Microsoft Corp.	1,612,000		49,149,880
Novell, Inc.(a)	73,100		303,365
Oracle Corp.	809,620		19,868,075
Red Hat, Inc.(a)	36,400		1,124,760

COMMON STOCKS (continued)	Shares	Value (Note 2)
Software (continued)
Salesforce.com, Inc.(a)	21,000	$	1,549,170
Symantec Corp.(a)(b)	178,311		3,189,984
			90,378,005
Specialty Retail — 1.9%
Abercrombie & Fitch Co. (Class A Stock)	15,500		540,175
AutoNation, Inc.(a)(b)	20,489		392,364
AutoZone, Inc.(a)	6,800		1,074,876
Bed Bath & Beyond, Inc.(a)(b)	52,900		2,043,527
Best Buy Co., Inc.	72,225		2,849,998
GameStop Corp. (Class A Stock)(a)(b)	33,800		741,572
Gap, Inc. (The),	101,187		2,119,868
Home Depot, Inc.	353,519		10,227,305
Limited Brands, Inc.	59,796		1,150,475
Lowe’s Cos., Inc.	301,400		7,049,746
Office Depot, Inc.(a)	44,900		289,605
O’Reilly Automotive, Inc.(a)	25,400		968,248
RadioShack Corp.	26,560		517,920
Ross Stores, Inc.	26,000		1,110,460
Sherwin-Williams Co. (The)(b)	18,400		1,134,360
Staples, Inc.	151,400		3,722,926
Tiffany & Co.	25,800		1,109,400
TJX Cos., Inc.	89,800		3,282,190
			40,325,015
Textiles, Apparel & Luxury Goods — 0.5%
Coach, Inc.	72,100		2,633,813
NIKE, Inc. (Class B Stock)	78,900		5,212,923
Polo Ralph Lauren Corp. (Class A Stock)	10,500		850,290
V.F. Corp.	19,336		1,416,169
			10,113,195
Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.(b)	113,600		1,559,728
People’s United Financial, Inc.	71,900		1,200,730
			2,760,458
Tobacco — 1.5%
Altria Group, Inc.	424,900		8,340,787
Lorillard, Inc.	32,431		2,601,939
Philip Morris International, Inc. (Switzerland)	402,600		19,401,294
Reynolds American, Inc.	38,100		2,018,157
			32,362,177
Trading Companies & Distributors — 0.1%
Fastenal Co.(b)	24,200		1,007,688
W.W. Grainger, Inc.(b)	12,400		1,200,692
			2,208,380
Wireless Telecommunication Services — 0.3%
American Tower Corp. (Class A Stock)(a)	79,500		3,435,195
MetroPCS Communications, Inc.(a)	39,500		301,385
Sprint Nextel Corp.(a)	610,722		2,235,243
			5,971,823
TOTAL LONG-TERM INVESTMENTS (cost $1,341,165,006)			2,066,773,119

SEE NOTES TO FINANCIAL STATEMENTS.

A90

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

SHORT-TERM INVESTMENTS — 8.7%	Shares	Value (Note 2)
Affiliated Money Market Mutual Fund — 8.5%
Dryden Core Investment Fund — Taxable Money Market Series (cost $177,953,852; includes $155,266,293 of cash collateral received for securities on loan) (Note 4)(c)(d)	177,953,832	$	177,953,832

	Principal Amount (000)		Value (Note 2)
U.S. Government Obligation — 0.2%
U.S. Treasury Bill, 0.04%, 03/18/2010 (cost $4,699,603)	$	4,700	$	4,699,525
TOTAL SHORT-TERM INVESTMENTS (cost $182,653,435)				182,653,357
TOTAL INVESTMENTS — 107.2% (cost $1,523,818,441)				2,249,426,476
LIABILITIES IN EXCESS OF OTHER ASSETS(e) — (7.2)%				(151,367,182	)
NET ASSETS — 100.0%			$	2,098,059,294

The following abbreviations are used in portfolio descriptions:

(a) Non-income producing security.

(b) All or a portion of security is on loan. The aggregate market value of such securities is $149,549,726; cash collateral of $155,266,293 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.

(d) Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Dryden Core Investment Fund-Taxable Money Market Series.

(e) Liabilities in excess of other assets include net unrealized appreciation (depreciation) on financial futures contracts as follows:

Open futures contracts outstanding at December 31, 2009:

Number of Contracts	Type	Expiration Date	Value at Trade Date		Value at December 31, 2009		Unrealized Appreciation
Long Position:
109	S&P 500 Index	Mar. 2010	$	30,086,386	$	30,266,575	$	180,189

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

Level 1—quoted prices in active markets for identical securities

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of December 31, 2009 in valuing the Portfolio’s assets carried at fair value:

	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks	$	2,066,773,119	$	—	$	—
U.S. Government Obligations		—		4,699,525		—
Affiliated Money Market Mutual Fund		177,953,832		—		—
		2,244,726,951		4,699,525		—
Other Financial Instruments*		180,189		—		—
Total	$	2,244,907,140	$	4,699,525	$	—

* Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

As of December 31, 2009 and 2008, the Portfolio did not use any significant unobservable inputs (Level 3) in determining the value of investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A91

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2009 was as follows:

Oil, Gas & Consumable Fuels	9.5	%
Affiliated Money Market Mutual Fund (including 7.4% of collateral received for securities on loan)	8.5
Pharmaceuticals	6.4
Computers & Peripherals	5.9
Diversified Financial Services	4.3
Software	4.3
Diversified Telecommunication Services	2.9
Capital Markets	2.8
Media	2.8
Aerospace & Defense	2.7
Commercial Banks	2.7
Beverages	2.6
Communications Equipment	2.6
Food & Staples Retailing	2.6
Semiconductors & Semiconductor Equipment	2.6
Household Products	2.5
Industrial Conglomerates	2.2
Insurance	2.2
Healthcare Providers & Services	2.1
Electric Utilities	2.0
Healthcare Equipment & Supplies	2.0
Internet Software & Services	2.0
Chemicals	1.9
Specialty Retail	1.9
Energy Equipment & Services	1.8
Food Products	1.6
IT Services	1.6
Machinery	1.6
Biotechnology	1.5
Tobacco	1.5
Hotels, Restaurants & Leisure	1.4
Multi-Utilities	1.4

Real Estate Investment Trusts	1.2	%
Metals & Mining	1.1
Air Freight & Logistics	1.0
Road & Rail	1.0
Consumer Finance	0.8
Multiline Retail	0.8
Electronic Equipment & Instruments	0.6
Internet & Catalog Retail	0.6
Commercial Services & Supplies	0.5
Electrical Equipment	0.5
Textiles, Apparel & Luxury Goods	0.5
Automobiles	0.4
Life Sciences Tools & Services	0.4
Household Durables	0.3
Paper & Forest Products	0.3
Personal Products	0.3
Wireless Telecommunication Services	0.3
Auto Components	0.2
Construction & Engineering	0.2
Containers & Packaging	0.2
Diversified Consumer Services	0.2
Independent Power Producers & Energy Traders	0.2
U.S. Government Obligation	0.2
Airlines	0.1
Building Products	0.1
Construction Materials	0.1
Distributors	0.1
Gas Utilities	0.1
Leisure Equipment & Products	0.1
Office Electronics	0.1
Professional Services	0.1
Thrifts & Mortgage Finance	0.1
Trading Companies & Distributors	0.1
	107.2
Liabilities in excess of other assets	(7.2	)
	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with derivative instruments are commodity risk, credit risk, equity risk, foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Portfolio’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of December 31, 2009 as presented in the Statement of Assets and Liabilities:

Derivatives not designated as hedging instruments, carried at fair value	Asset Derivatives				Liability Derivatives
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Equity contracts	Due to broker—variation margin	$	180,189	*	—	$	—

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

SEE NOTES TO FINANCIAL STATEMENTS.

A92

	STOCK INDEX PORTFOLIO (continued)
SCHEDULE OF INVESTMENTS		December 31, 2009

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2009 are as follows:

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures
Equity contracts	$	10,307,032

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures
Equity contracts	$	(379,818	)

For the year ended December 31, 2009, the average value at trade date for futures long position was $36,988,610.

SEE NOTES TO FINANCIAL STATEMENTS.

A93

STOCK INDEX PORTFOLIO (continued)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2009

ASSETS
Investments, at value including securities on loan of $149,549,726:
Unaffiliated investments (cost $1,345,864,609)	$	2,071,472,644
Affiliated investments (cost $177,953,832)		177,953,832
Cash		49,130
Receivable for investments sold		6,314,127
Dividends and interest receivable		2,854,527
Receivable for Series shares sold		78,019
Prepaid expenses		20,750
Total Assets		2,258,743,029
LIABILITIES
Collateral for securities on loan		155,266,293
Payable for investments purchased		4,066,123
Management fee payable		622,119
Due to broker-variation margin		310,650
Payable for Series shares repurchased		277,366
Accrued expenses and other liabilities		140,589
Affiliated transfer agent fee payable		595
Total Liabilities		160,683,735
NET ASSETS	$	2,098,059,294
Net assets were comprised of:
Paid-in capital	$	1,435,013,755
Retained earnings		663,045,539
Net assets, December 31, 2009	$	2,098,059,294
Net asset value and redemption price per share, $2,098,059,294 / 75,231,986 outstanding shares of beneficial interest	$	27.89

STATEMENT OF OPERATIONS

Year Ended December 31, 2009

INVESTMENT INCOME
Unaffiliated dividend income	$	42,565,351
Affiliated income from securities loaned, net		1,769,831
Affiliated dividend income		174,319
Interest		4,546
		44,514,047
EXPENSES
Management fee		6,408,612
Custodian’s fees and expenses		163,000
Shareholders’ reports		50,000
Insurance expenses		43,000
Trustees’ fees		33,000
Audit fee		17,000
Legal fees and expenses		15,000
Commitment fee on syndicated credit agreement		12,000
Transfer agent’s fee and expenses (including affiliated expense of $3,600) (Note 4)		10,000
Miscellaneous		15,956
Total expenses		6,767,568
NET INVESTMENT INCOME		37,746,479
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions		(22,151,368	)
Futures transactions		10,307,032
		(11,844,336	)
Net change in unrealized appreciation (depreciation) on:
Investments		414,349,079
Futures		(379,818	)
		413,969,261
NET GAIN ON INVESTMENTS		402,124,925
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	439,871,404

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,
	2009			2008
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net investment income	$	37,746,479		$	51,604,331
Net realized loss on investments		(11,844,336	)		(28,775,151	)
Net change in unrealized appreciation (depreciation) on investments		413,969,261			(1,123,541,103	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		439,871,404			(1,100,711,923	)
DISTRIBUTIONS		(51,594,261	)		(56,959,943	)
SERIES SHARE TRANSACTIONS:
Series shares sold [2,119,324 and 2,142,562 shares, respectively]		48,926,542			63,864,986
Series shares issued in reinvestment of dividends and distributions [2,201,121 and 1,689,203 shares, respectively]		51,594,261			56,959,943
Series shares repurchased [8,851,247 and 8,835,363 shares, respectively]		(206,536,067	)		(269,751,865	)
NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(106,015,264	)		(148,926,936	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		282,261,879			(1,306,598,802	)
NET ASSETS:
Beginning of year		1,815,797,415			3,122,396,217
End of year	$	2,098,059,294		$	1,815,797,415

SEE NOTES TO FINANCIAL STATEMENTS.

A94

NOTES TO THE FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND

Note 1: General

The Prudential Series Fund (“Series Fund”), organized as a Delaware statutory trust, is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended. On January 2, 2006, each Portfolio of the Series Fund changed its federal income tax status from a regulated investment company to a partnership. As a result of that conversion, the Series Fund was reorganized from a Maryland corporation to a Delaware statutory trust. Pursuant to this reorganization, the Series Fund has been renamed “The Prudential Series Fund.” The Series Fund is composed of twenty-two Portfolios (“Portfolio” or “Portfolios”), each with separate series shares. The information presented in these financial statements pertains to seven Portfolios which are listed below along with each Portfolio’s investment objective.

Conservative Balanced Portfolio:    Total investment return consistent with a conservatively managed diversified portfolio by investing in a mix of equity-related securities, debt obligations and money market instruments.

Diversified Bond Portfolio:    High level of income over a longer term while providing reasonable safety of capital by investing in intermediate and long-term debt obligations that are rated investment grade and high quality money market instruments. The types of debt obligations in which the Portfolio can invest include U.S. government securities, mortgage-related securities and corporate bonds.

Equity Portfolio:    Capital appreciation by investing primarily in stocks of major, established corporations as well as small companies.

Flexible Managed Portfolio:    High total return consistent with an aggressively managed diversified portfolio by investing in a mix of equity and equity-related securities, debt obligations and money market instruments.

Global Portfolio:    Long-term growth of capital by investing primarily in equity and equity-related securities of foreign and U.S. companies.

Government Income Portfolio:    High level of income over the long-term consistent with the preservation of capital by investing primarily in intermediate and long-term U.S. government securities, including U.S. treasuries, government agency and mortgage-related securities.

Stock Index Portfolio:    Investment results that generally correspond to the price and yield performance of the S&P 500 Index by investing primarily in stocks in the S&P 500 Index.

The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government) held by the Portfolios to meet their obligations may be affected by the economic or political developments in a specific industry, region or country.

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

Note 2: Accounting Policies

The following is a summary of significant accounting policies followed by the Series Fund and the Portfolios in preparation of their financial statements.

Securities Valuation:    Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the NASDAQ official closing price (“NOCP”) on the day of valuation, or if there was no NOCP, at the last sale price. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisors, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at the last sale price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange, or at the last bid price in the absence of an asked price. Futures contracts and options thereon traded on a

B1

commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Series Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees approved fair valuation procedures. When determining the fair value of securities, some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment advisor regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities that are held in the Portfolios which mature in more than 60 days are valued at fair value and those short-term debt securities of sufficient credit quality which mature in 60 days or less are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost at the time of purchase and thereafter assumes a constant amortization to maturity of any discount or premium.

Each Portfolio may hold up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities, including private placements, are valued pursuant to the valuation procedures noted above.

Repurchase Agreements:    In connection with transactions in repurchase agreements with United States financial institutions, it is the Series Fund’s policy that its custodian or designated subcustodians, as the case may be, under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, 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 Series Fund may by delayed or limited.

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

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

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

Although the net assets of the Series Fund are presented at the foreign exchange rates and market values at the close of the period, the Series Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at the end of the period. Similarly, the Series Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period. Accordingly, these realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the holding of foreign currencies, currency gains (losses) realized between the trade date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets

B2

and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on investments and foreign currencies.

Forward Currency Contracts:    A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate between two parties. Certain Portfolios of the Series Fund entered into forward currency contracts in order to hedge their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings or specific receivables and payables denominated in a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current exchange rates and any unrealized gain or loss is included in net unrealized appreciation or depreciation on foreign currencies. Gain or loss is realized on the settlement date of the contract equal to the difference between the settlement value of the original and renegotiated forward contracts. This gain or loss, if any, is included in net realized gain (loss) on foreign currency transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks from currency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Portfolio’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from the counterparty at the end of the contract’s life. This risk may be mitigated by having a master netting arrangement between the Portfolio and the counterparty which may permit the Portfolio to offset amounts payable by the Portfolio to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Portfolio to cover the Portfolio’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.

Short Sales:    Certain Portfolios of the Series Fund may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When a Portfolio makes a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the transaction. The Portfolio may have to pay a fee to borrow the particular security and may be obligated to remit any interest or dividends received on such borrowed securities. Dividends declared on short positions open are recorded on the ex-date and interest payable is accrued daily on fixed income securities sold short, both of which are recorded as an expense. A gain, limited to the price at which the Portfolio sold the security short, or a loss, unlimited in magnitude, will be recognized upon the termination of a short sale if the market price at termination is less than or greater than, respectively, the proceeds originally received.

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

Certain Portfolios of the Series Fund entered into financial futures contracts in order to hedge their existing portfolio securities, or securities the Portfolio intends to purchase, against fluctuations in value caused by changes in prevailing interest rates and to manage yield curve duration. Certain Portfolios entered into equity index futures contracts to gain market exposure. The Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Financial futures contracts involve elements of risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

Options:    Certain Portfolios of the Series Fund purchased or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates and foreign currency exchange rates, with respect to securities which the Portfolio currently owns or intends to purchase. Certain Portfolios also used purchased options to gain exposure to certain securities and foreign currencies. The Portfolios’ principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Portfolio purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Portfolio writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is

B3

adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Portfolio realizes a gain or loss to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Portfolio has realized a gain or loss. The difference between the premium and the amount received or paid on at a closing purchase or sale transaction is also treated as a realized gain or loss. Gain or loss on purchased options is included in net realized gain or loss on investment transactions. Gain or loss on written options is presented separately as net realized gain or loss on options written. The Portfolio, as writer of an option, may have no control over whether the underlying securities may be sold (called) or purchased (put). As a result, the Portfolio bears the market risk of an unfavorable change in the price of the security underlying the written option. The Portfolio, as purchaser of an over-the-counter option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

With exchange-traded futures and options contracts, there is minimal counterparty credit risk to the Portfolio since the exchanges’ clearinghouse acts as counterparty to all exchange traded futures and options, and guarantees the futures and options contracts against default.

Swap Agreements:    Certain Portfolios of the Series Fund may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments. Payments received or paid by the Portfolio are recorded as realized gains or losses upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statements 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 agreements 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 Portfolio is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Certain Portfolios used interest rate swaps to generate steady cash flow by receiving a stream of fixed rate payments and to increase exposure to prevailing market rates by receiving floating rate payments. The Portfolio’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life. This risk may be mitigated by having a master netting arrangement between the Portfolio and the counterparty which may permit the Portfolio to offset amounts payable by the Portfolio to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Portfolio to cover the Portfolio’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.

Credit Default Swaps:    Credit default swaps involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (“credit event”) for the referenced party, typically corporate issues or sovereign issues of an emerging country, on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.

The Portfolio is subject to credit risk in the normal course of pursuing its investment objectives. Certain Portfolios purchased credit default swaps to provide a measure of protection against defaults of the issuers. Certain Portfolios in the Series Fund used credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Certain Portfolios took an active short position with respect to the likelihood of particular issuer’s default by selling credit default swaps. The Portfolios’ maximum risk of loss from counterparty credit risk for purchased credit default swaps is the notional value of a credit default swap agreement. A master netting arrangement between the Portfolio and the counterparty that permits the Portfolio to offset amounts payable by the Portfolio to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Portfolio to cover the Portfolio’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.

As a seller of protection on credit default swap agreements, a Portfolio will generally receive from the buyer of protection an agreed upon payment throughout the term of the swap provided that there is no credit event. As the seller, a Portfolio would effectively increase investment risk to its portfolio because, in addition to its total net assets, a Portfolio may be subject to investment exposure on the notional amount of the swap.

B4

The maximum amount of the payment that a Portfolio as a seller of protection could be required to make under a credit default swap agreement would be equal the notional amount of the underlying security or index contract as a result of a credit event. These potential amounts will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Portfolio for the same referenced entity or index. As a buyer of protection, the Portfolio generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Schedules of Investments and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. For credit default swap agreements on asset- backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment and/or performance risk. Wider credit spreads and increasing market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

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 there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates. In connection with these agreements, securities in the portfolio may be identified as collateral 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 serve as recourse in the event of default or bankruptcy/insolvency of either party. Such over-the-counter 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 December 31, 2009, none of the Portfolios have met conditions under such agreements, which give the counterparty the right to call for an early termination.

Forward currency contracts, written options, short sales, swaps and financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

Securities Lending:    Each Portfolio of the Series Fund may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Portfolio. Upon termination of the loan, the borrower will return to the Portfolio securities identical to the loaned securities. Should the borrower of the securities fail financially, the Portfolio has the right to repurchase the securities using the collateral in the open market. The Portfolio recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The Portfolio also continues to receive interest and dividends or amounts equivalent thereto on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

Dollar Rolls:    Certain Portfolios of the Series Fund enter into mortgage dollar rolls in which the Portfolio sells mortgage securities for delivery in the current month, realizing a gain (loss), and simultaneously contracts to repurchase somewhat similar (same type, coupon and maturity) securities on a specified future date. During the roll period, the Portfolio forgoes principal and interest paid on the securities. The Portfolio is compensated by the interest earned on the cash proceeds of the initial sale and by the lower repurchase price at the future date. The difference between the sales proceeds and the lower repurchase price is recorded as a realized gain. The Portfolio maintains a segregated account, the dollar value of which is at least equal to its obligations, with respect to dollar rolls.

When-Issued/Delayed Delivery Securities:    Securities purchased or sold on a when-issued or delayed delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement

B5

date. At the time a Portfolio enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.

Securities Transactions and Net Investment Income:    Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date; interest income, which is comprised of four elements: stated coupon, original issue discount, market discount and market premium, is recorded on the accrual basis. Expenses are recorded on the accrual basis. The Series Fund’s expenses are allocated to the respective Portfolios on the basis of relative net assets except for Portfolio specific expenses which are attributable directly to a Portfolio or class level.

For Portfolios with multiple classes of shares, net investment income (loss) (other than administration and distribution fees, which are charged to the respective class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Taxes:    For federal income tax purposes, each Portfolio in the Series Fund is treated as a separate taxpaying entity. The Portfolios are treated as partnerships for tax purposes. No provision has been made in the financial statements for U.S. federal, state, or local taxes, as any tax liability arising from operations of the Portfolios is the responsibility of their partners. The Portfolios are not generally subject to entity-level taxation. Partners of each Portfolio are subject to taxes on their distributive share of partnership items.

Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Series Fund’s understanding of the applicable country’s tax rules and regulations.

Distributions:    Distributions from each Portfolio are made in cash and automatically reinvested in additional shares of the same Portfolio. The Diversified Bond and Government Income Portfolios make distributions, if any, quarterly. All other Portfolios’ distributions are generally made on an annual basis. Distributions are recorded on the ex-date.

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 these estimates.

Note 3: Agreements

The Series Fund has a management agreement with PI. Pursuant to this agreement PI has responsibility for all investment advisory services and supervises the subadvisors performance of such services. PI has entered into subadvisory agreements with Prudential Investment Management, Inc. (“PIM”), Jennison Associates LLC (“Jennison”), LSV Asset Management (“LSV”), Marsico Capital Management, LLC (“Marsico”), Quantitative Management Associates LLC (“QMA”), T. Rowe Price Associates, Inc. (“T. Rowe”) and William Blair & Company, L.L.C. (“William Blair”) (collectively, the “Subadvisors”), under which each provides investment advisory services for certain Portfolios of the Series Fund. PI pays for the services of the Subadvisors, compensation of officers of the Series Fund, occupancy and certain clerical and administrative expenses of the Series Fund. The Portfolios bear all other costs and expenses.

The management fee paid to PI is computed daily and payable monthly, at the annual rates specified below, of the value of each of the Portfolio’s average daily net assets.

Portfolio	Management Fee	Effective Management Fee
Conservative Balanced Portfolio	0.55%	0.55	%
Diversified Bond Portfolio	0.40	0.40
Equity Portfolio	0.45	0.45
Flexible Managed Portfolio	0.60	0.60
Global Portfolio	0.75	0.75
Government Income Portfolio	0.40	0.40
Stock Index Portfolio	0.35% up to $4 billion
	0.30% over $4 billion	0.35

B6

At December 31, 2009, the Subadvisors that provide investment advisory services to the Portfolios are as follows.

Where more than one Subadvisor is listed, each Subadvisor provides services to a segment of the Portfolio:

Portfolio	Subadvisor(s)
Conservative Balanced Portfolio	PIM, QMA
Diversified Bond Portfolio	PIM
Equity Portfolio	Jennison
Flexible Managed Portfolio	PIM, QMA
Global Portfolio	LSV, Marsico, QMA, T. Rowe & William Blair
Government Income Portfolio	PIM
Stock Index Portfolio	QMA

The Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class I and Class II shares of the Series Fund. The Series Fund compensates PIMS for distributing and servicing the Series Fund’s Class II shares pursuant to a plan of distribution (the “Class II Plan”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class I shares of the Series Fund. Pursuant to the Class II Plan, the Class II shares of each Portfolio compensate PIMS for distribution-related activities at an annual rate of 0.25% of the average daily net assets of the Class II shares.

The Series Fund has an administration agreement with PI, which acts as the administrator of the Class II shares of the Series Fund. The administration fee paid to PI is accrued daily and payable monthly, at the annual rate of 0.15% of the average daily net assets of the Class II shares.

PI has voluntarily agreed to reimburse each of the following Portfolios the portion of the management fee for that Portfolio equal to the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, and brokerage commissions) exceed the percentage stated below.

Portfolio	Class I Expense Limit		Class II Expense Limit
Government Income Portfolio	0.75	*%	N/A
Stock Index Portfolio	0.75	**	N/A

*  Effective July 1, 2009, the expense limitation has been removed.

**  Effective July 1, 2009, the expense limitation has been renewed.

N/A—Not applicable—There are no Class II shares outstanding for this Portfolio.

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

Note 4: Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series 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. PIM also serves as the Series Fund’s security lending agent. For the year ended December 31, 2009, PIM was compensated as follows for these services by the Series Fund Portfolios:

Portfolio	PIM
Conservative Balanced Portfolio	$	517,880
Diversified Bond Portfolio		81,331
Equity Portfolio		498,901
Flexible Managed Portfolio		389,114
Global Portfolio		95,348
Government Income Portfolio		49,525
Stock Index Portfolio		730,418

B7

For the year ended December 31, 2009, Wells Fargo Advisors, LLC (“Wells Fargo”), an affiliate of PI, earned brokerage commissions from transactions executed on behalf of the Series Fund Portfolios as follows:

Portfolio	Wells Fargo
Equity Portfolio	$	25,193

Certain Portfolios invest in the Short-Term Bond Series, pursuant to an exemptive order received from the Securities and Exchange Commission and in the Taxable Money Market Series, each a portfolio of the Dryden Core Investment Fund registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 5: Portfolio Securities

The aggregate cost of purchases and the proceeds from the sales of securities (excluding government securities and short-term issues) for the year ended December 31, 2009 were as follows:

Portfolio	Cost of Purchases		Proceeds from Sales
Conservative Balanced Portfolio	$	3,472,864,979	$	3,622,098,710
Diversified Bond Portfolio		3,416,474,438		3,397,509,296
Equity Portfolio		2,585,967,605		2,784,347,808
Flexible Managed Portfolio		5,094,802,384		5,231,291,236
Global Portfolio		255,890,614		296,331,457
Government Income Portfolio		2,562,157,425		2,619,410,508
Stock Index Portfolio		86,802,275		185,978,605

The Conservative Balanced, Diversified Bond, Flexible Managed and Government Income Portfolios’ written options activity for the year ended December 31, 2009 were as follows:

Conservative Balanced Portfolio
	Contracts		Premiums
Balance as of December 31, 2008	—		$	—
Options written	134			94,675
Options terminated in closing purchase transactions	(134	)		(94,675	)
Options expired	—			—
Balance as of December 31, 2009	—		$	—
Diversified Bond Portfolio
	Contracts		Premiums
Balance as of December 31, 2008	—		$	—
Options written	243			209,267
Options terminated in closing purchase transactions	(243	)		(209,267	)
Options expired	—			—
Balance as of December 31, 2009	—		$	—
Flexible Managed Portfolio
	Contracts		Premiums
Balance as of December 31, 2008	—		$	—
Options written	149			105,195
Options terminated in closing purchase transactions	(149	)		(105,195	)
Options expired	—			—
Balance as of December 31, 2009	—		$	—

B8

Government Income Portfolio
	Contracts/ Notional Amount		Premiums
Balance as of December 31, 2008	—		$	—
Options written	17,400,080			791,853
Options terminated in closing purchase transactions	(17,400,080	)		(791,853	)
Options expired	—			—
Balance as of December 31, 2009	—		$	—

Note 6: Tax Information

After January 2, 2006, all Portfolios are treated as partnerships for tax purposes. The character of the cash distributions made by the partnerships is generally classified as return of capital nontaxable distributions. After each fiscal year each partner will receive information regarding their distributive allocable share of the partnership’s income, gains, losses and deductions.

Prior to January 2, 2006, each Portfolio, which was incorporated as of that date, qualified as a regulated investment company under the Internal Revenue Code and distributed all of its taxable income, including any net realized gains on investments, to shareholders.

With respect to the Portfolios, book cost of assets differs from tax cost of assets as a result of each Portfolio’s adoption of a mark to market method of accounting for tax purposes. Under this method, tax cost of assets will approximate its fair market value.

Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2009, no provision for income tax would be required in the Portfolios’ financial statements. The Portfolios’ federal and state income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Note 7: Capital

The Series Fund offers Class I and Class II shares. Neither Class I nor Class II shares of a Portfolio are subject to any sales charge or redemption charge and are sold at the net asset value of the Portfolio. Class I shares are sold only to certain separate accounts of Prudential to fund benefits under certain variable life insurance and variable annuity contracts (“contracts”). Class II shares are sold only to separate accounts of non-Prudential insurance companies as investment options under certain contracts. The separate accounts invest in shares of the Series Fund through subaccounts that correspond to the Portfolios. The separate accounts will redeem shares of the Series Fund to the extent necessary to provide benefits under the contracts or for such other purposes as may be consistent with the contracts. As of December 31, 2009, the Equity Portfolio has Class II shares outstanding.

Transactions in shares of beneficial interest of the Equity Portfolio were as follows:

Equity Portfolio:
Class I		Shares		Amount
Year ended December 31, 2009:
Series shares sold		1,441,609		$	26,628,310
Series shares issued in reinvestment of distributions		2,358,409			43,394,722
Series shares repurchased		(14,177,442	)		(252,716,612	)
Net increase (decrease) in shares outstanding		(10,377,424	)	$	(182,693,580	)
Year ended December 31, 2008:
Series shares sold		1,436,949		$	31,146,917
Series shares issued in reinvestment of distributions		17,082,227			436,963,357
Series shares repurchased		(13,934,724	)		(328,218,745	)
Net increase (decrease) in shares outstanding	��	4,584,452		$	139,891,529

B9

Class II	Shares		Amount
Year ended December 31, 2009:
Series shares sold	4,210		$	85,008
Series shares issued in reinvestment of distributions	164			3,037
Series shares repurchased	(8,224	)		(147,394	)
Net increase (decrease) in shares outstanding	(3,850	)	$	(59,349	)
Year ended December 31, 2008:
Series shares sold	3,868		$	88,780
Series shares issued in reinvestment of distributions	2,468			63,526
Series shares repurchased	(26,501	)		(699,940	)
Net increase (decrease) in shares outstanding	(20,165	)	$	(547,634	)

Note 8: Borrowings and Overdrafts

The Portfolios, along with other affiliated registered investment companies (the “Funds”), are a party to a Syndicated Credit Agreement (“SCA”) with two banks. The SCA provides for a commitment of $500 million. Interest on any borrowings under the SCA is incurred at contracted market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. Effective October 22, 2009, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Funds pay a commitment fee of .15 of 1% of the unused portion of the renewed SCA. For the period from October 24, 2008 through October 21, 2009, the Portfolios paid a commitment fee of .13 of 1% of the unused portion of the agreement. The expiration date of the renewed SCA will be October 20, 2010. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions.

The following Portfolio utilized the line of credit during the year ended December 31, 2009. The average balance outstanding is for the number of days the Portfolio had utilized the credit facility.

Portfolio	Approximate Average Balance Outstanding		Number of Days Outstanding	Weighted Average Interest Rates		Amount Outstanding at December 31, 2009
Diversified Bond Portfolio	$	648,000	1	1.19	%	$	—

The average balance and weighted average interest rate on temporary overdrawn balances during the year ended December 31, 2009 were as follows:

Portfolio	Approximate Average Balance Outstanding		Weighted Average Interest Rates
Government Income Portfolio	$	3,964,644	2.25	%

Note 9: Ownership and Affiliates

As of December 31, 2009, all of Class I shares of each Portfolio were owned of record by the Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

Note 10: New Accounting Pronouncement

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”. ASU 2010-06 will require reporting entities to make new disclosures about amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements, which are effective for interim and annual reporting periods beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.

B10

Note 11: Subsequent Events

Management has evaluated the impact of all subsequent events on the Portfolios through February 16, 2010, the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

B11

Financial Highlights

	Conservative Balanced Portfolio
	Year Ended December 31,
	2009			2008			2007(a)			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.69		$	16.69		$	16.21		$	15.09		$	15.10
Income (Loss) From Investment Operations:
Net investment income		0.39			0.50			0.50			0.48			0.38
Net realized and unrealized gain (loss) on investments		2.08			(3.98	)		0.49			1.06			0.11
Total from investment operations		2.47			(3.48	)		0.99			1.54			0.49
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(0.35	)
Distributions from net realized gains		—			—			—			—			(0.15	)
Distributions		(0.51	)		(0.52	)		(0.51	)		(0.42	)		—
Total dividends and distributions		(0.51	)		(0.52	)		(0.51	)		(0.42	)		(0.50	)
Net Asset Value, end of year	$	14.65		$	12.69		$	16.69		$	16.21		$	15.09
Total Return(b):		20.01	%		(21.41	)%		6.12	%		10.44	%		3.43	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,138.7		$	1,957.5		$	2,721.9		$	2,770.6		$	2,749.8
Ratios to average net assets(c):
Expenses		0.59	%		0.59	%		0.59	%		0.57	%		0.58	%
Net investment income		2.68	%		3.12	%		2.95	%		2.97	%		2.45	%
Portfolio turnover rate		250	%		336	%		178	%		114	%		110	%

(a) Calculated based upon average shares outstanding during the year.

(b) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(c) Does not include expenses of the underlying portfolios in which the Portfolio invests.

	Diversified Bond Portfolio
	Year Ended December 31,
	2009			2008			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	9.89		$	10.90		$	10.85		$	10.96		$	11.28
Income (Loss) From Investment Operations:
Net investment income		0.50			0.54			0.58			0.57			0.55
Net realized and unrealized gain (loss) on investments		1.46			(0.90	)		0.02			(0.05	)		(0.20	)
Total from investment operations		1.96			(0.36	)		0.60			0.52			0.35
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(0.59	)
Distributions from net realized gains		—			—			—			—			(0.08	)
Distributions		(0.69	)		(0.65	)		(0.55	)		(0.63	)		—
Total dividends and distributions		(0.69	)		(0.65	)		(0.55	)		(0.63	)		(0.67	)
Net Asset Value, end of year	$	11.16		$	9.89		$	10.90		$	10.85		$	10.96
Total Return(a):		20.51	%		(3.46	)%		5.71	%		4.98	%		3.28	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,363.5		$	1,134.8		$	1,218.3		$	1,150.4		$	1,230.6
Ratios to average net assets(b):
Expenses		0.44	%		0.44	%		0.44	%		0.45	%		0.45	%
Net investment income		4.79	%		5.07	%		5.39	%		5.18	%		4.81	%
Portfolio turnover rate		401	%		723	%		476	%		393	%		278	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C1

Financial Highlights

	Equity Portfolio
	Class I
	Year Ended December 31,
	2009			2008(c)			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	16.40		$	29.67		$	27.45		$	24.64		$	22.31
Income (Loss) From Investment Operations:
Net investment income		.16			.29			.35			.30			.24
Net realized and unrealized gain (loss) on investments		6.04			(10.52	)		2.21			2.80			2.32
Total from investment operations		6.20			(10.23	)		2.56			3.10			2.56
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(.23	)
Distributions		(.30	)		(3.04	)		(.34	)		(.29	)		—
Total dividends and distributions		(.30	)		(3.04	)		(.34	)		(.29	)		(.23	)
Net Asset Value, end of year	$	22.30		$	16.40		$	29.67		$	27.45		$	24.64
Total Return(a)		38.17	%		(38.16	)%		9.32	%		12.57	%		11.47	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	3,195.1		$	2,521.0		$	4,423.9		$	4,402.7		$	4,283.9
Ratios to average net assets(b):
Expenses		.48	%		.48	%		.47	%		.47	%		.47	%
Net investment income		.90	%		1.21	%		1.16	%		1.10	%		1.01	%
Portfolio turnover rate		98	%		67	%		57	%		60	%		77	%
	Equity Portfolio
	Class II
	Year Ended December 31,
	2009			2008(c)			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	16.47		$	29.81		$	27.52		$	24.69		$	22.34
Income (Loss) From Investment Operations:
Net investment income		.09			.19			.28			.19			.12
Net realized and unrealized gain (loss) on investments		6.07			(10.61	)		2.20			2.80			2.35
Total from investment operations		6.16			(10.42	)		2.48			2.99			2.47
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(.12	)
Distributions		(.17	)		(2.92	)		(.19	)		(.16	)		—
Total dividends and distributions		(.17	)		(2.92	)		(.19	)		(.16	)		(.12	)
Net Asset Value, end of year	$	22.46		$	16.47		$	29.81		$	27.52		$	24.69
Total Return(a)		37.58	%		(38.47	)%		8.91	%		12.13	%		11.04	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	0.4		$	0.4		$	1.3		$	1.9		$	2.1
Ratios to average net assets(b):
Expenses		.88	%		.88	%		.87	%		.87	%		.87	%
Net investment income		.52	%		.78	%		.74	%		.71	%		.64	%
Portfolio turnover rate		98	%		67	%		57	%		60	%		77	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolio in which the Portfolio invests.

(c) Calculation based on average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

C2

Financial Highlights

	Flexible Managed Portfolio
	Year Ended December 31,
	2009			2008			2007			2006			2005(a)
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.34		$	18.30		$	18.36		$	16.92		$	16.58
Income (Loss) From Investment Operations:
Net investment income		0.34			0.45			0.50			0.44			0.32
Net realized and unrealized gain (loss) on investments		2.05			(4.62	)		0.65			1.59			0.34
Total from investment operations		2.39			(4.17	)		1.15			2.03			0.66
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(0.32	)
Distributions		(0.45	)		(1.79	)		(1.21	)		(0.59	)		—
Total dividends and distributions		(0.45	)		(1.79	)		(1.21	)		(0.59	)		(0.32	)
Net Asset Value, end of year	$	14.28		$	12.34		$	18.30		$	18.36		$	16.92
Total Return(b):		19.95	%		(24.82	)%		6.30	%		12.17	%		4.16	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,906.0		$	2,621.6		$	3,716.3		$	3,723.6		$	3,543.9
Ratios to average net assets(c):
Expenses		0.63	%		0.64	%		0.63	%		0.62	%		0.63	%
Net investment income		2.50	%		2.85	%		2.53	%		2.48	%		1.95	%
Portfolio turnover rate		248	%		321	%		212	%		153	%		126	%

(a) Calculated based upon average shares outstanding during the year.

(b) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(c) Does not include expenses of the underlying portfolios in which the Portfolio invests.

	Global Portfolio
	Year Ended December 31,
	2009			2008			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	13.07		$	24.62		$	22.53		$	18.96		$	16.43
Income (Loss) From Investment Operations:
Net investment income		0.28			0.40			0.36			0.26			0.13
Net realized and unrealized gain (loss) on investments		3.75			(10.38	)		2.00			3.44			2.50
Total from investment operations		4.03			(9.98	)		2.36			3.70			2.63
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(0.10	)
Distributions		(0.42	)		(1.57	)		(0.27	)		(0.13	)		—
Total dividends and distributions		(0.42	)		(1.57	)		(0.27	)		(0.13	)		(0.10	)
Net Asset Value, end of year	$	16.68		$	13.07		$	24.62		$	22.53		$	18.96
Total Return(a):		31.39	%		(42.92	)%		10.48	%		19.65	%		16.06	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	619.5		$	512.7		$	985.0		$	932.9		$	814.1
Ratios to average net assets(b):
Expenses		0.85	%		0.84	%		0.81	%		0.84	%		0.82	%
Net investment income		1.77	%		2.01	%		1.43	%		1.24	%		0.77	%
Portfolio turnover rate		50	%		65	%		48	%		50	%		155	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C3

Financial Highlights

	Government Income Portfolio
	Year Ended December 31,
	2009				2008			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.40			$	11.38		$	11.26		$	11.40		$	11.65
Income (Loss) From Investment Operations:
Net investment income		0.37		��		0.45			0.53			0.54			0.49
Net realized and unrealized gain (loss) on investments		0.49				0.03			0.10			(0.13	)		(0.20	)
Total from investment operations		0.86				0.48			0.63			0.41			0.29
Less Dividends and Distributions:
Dividends from net investment income		—				—			—			—			(0.54	)
Distributions		(0.40	)			(0.46	)		(0.51	)		(0.55	)		—
Total dividends and distributions		(0.40	)			(0.46	)		(0.51	)		(0.55	)		(0.54	)
Net Asset Value, end of year	$	11.86			$	11.40		$	11.38		$	11.26		$	11.40
Total Return(a):		7.71	%			4.30	%		5.70	%		3.74	%		2.51	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	375.4			$	370.5		$	340.3		$	354.3		$	378.2
Ratios to average net assets(b):
Expenses		0.47	%			0.52	%(c)		0.52	%		0.50	%		0.47	%
Net investment income		3.11	%			3.98	%(c)		4.62	%		4.75	%		4.16	%
Portfolio turnover rate		1179	%			2707	%		2377	%		734	%		507	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

(c) Includes interest expense of 0.03%.

	Stock Index Portfolio
	Year Ended December 31,
	2009			2008			2007			2006			2005
Per Share Operating Performance:
Net Asset Value, beginning of year	$	22.76		$	36.84		$	35.64		$	31.41		$	31.29
Income (Loss) From Investment Operations:
Net investment income		0.49			0.64			0.68			0.56			0.48
Net realized and unrealized gain (loss) on investments		5.32			(14.02	)		1.14			4.31			0.88
Total from investment operations		5.81			(13.38	)		1.82			4.87			1.36
Less Dividends and Distributions:
Dividends from net investment income		—			—			—			—			(0.47	)
Distributions from net realized gains		—			—			—			—			(0.77	)
Distributions		(0.68	)		(0.70	)		(0.62	)		(0.64	)		—
Total dividends and distributions		(0.68	)		(0.70	)		(0.62	)		(0.64	)		(1.24	)
Net Asset Value, end of year	$	27.89		$	22.76		$	36.84		$	35.64		$	31.41
Total Return(a):		26.07	%		(36.94	)%		5.10	%		15.54	%		4.54	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,098.1		$	1,815.8		$	3,122.4		$	3,306.4		$	3,212.7
Ratios to average net assets(b):
Expenses		0.37	%		0.37	%		0.37	%		0.37	%		0.38	%
Net investment income		2.06	%		2.04	%		1.73	%		1.61	%		1.52	%
Portfolio turnover rate		5	%		4	%		3	%		3	%		7	%

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions and does not reflect the effect of insurance contract charges. Total return does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all years shown. Performance figures may reflect voluntary fee waivers and/or expense reimbursements. In the absence of voluntary fee waivers and/or expense reimbursements, the total return would be lower. Past performance is no guarantee of future results. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(b) Does not include expenses of the underlying portfolios in which the Portfolio invests.

SEE NOTES TO FINANCIAL STATEMENTS.

C4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE BOARD OF TRUSTEES AND SHAREHOLDERS

THE PRUDENTIAL SERIES FUND:

We have audited the accompanying statements of assets and liabilities of The Prudential Series Fund (comprised of Conservative Balanced Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed Portfolio, Global Portfolio, Government Income Portfolio, and Stock Index Portfolio), hereafter referred to as the “Funds”, including the portfolios of investments, as of December 31, 2009, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of December 31, 2009, and the results of their operations, the changes in their net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 16, 2010

D1

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)

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

Independent Trustees (1)
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Saul K. Fenster, Ph.D. (76) No. of Portfolios Overseen: 83	Currently President Emeritus of New Jersey Institute of Technology (since 2002); formerly President (1978-2002) of New Jersey Institute of Technology; Commissioner (1998-2002) of the Middle States Association Commission on Higher Education; Commissioner (1985-2002) of the New Jersey Commission on Science and Technology; formerly Director (1998-2005) of Society of Manufacturing Engineering Education Foundation; formerly Director of Prosperity New Jersey; formerly a director or trustee of Liberty Science Center, Research and Development Council of New Jersey, New Jersey State Chamber of Commerce, and National Action Council for Minorities in Engineering.	Member (since 2006), Board of The Ridgefield Foundation and The Leir Foundation.
Delayne Dedrick Gold (71) No. of Portfolios Overseen: 83	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.	None
W. Scott McDonald, Jr. (72) No. of Portfolios Overseen: 83	Formerly Management Consultant (1997-2004) and of Counsel (2004-2005) at Kaludis Consulting Group, Inc. (company serving higher education); Formerly principal (1995-1997), Scott McDonald Associates; Chief Operating Officer (1991-1995), Fairleigh Dickinson University; Executive Vice President and Chief Operating Officer (1975-1991), Drew University; interim President (1988-1990), Drew University; formerly Director of School, College and University Underwriters Ltd.	None
Thomas T. Mooney (68) No. of Portfolios Overseen: 83	Formerly Chief Executive Officer, Excell Partners, Inc.; formerly President of the Greater Rochester Metro Chamber of Commerce, Rochester City Manager; formerly Deputy Monroe County Executive.	None
Thomas M. O’Brien (59) No. of Portfolios Overseen: 83	President and COO (since November 2006) and CEO (since April 2007) of State Bancorp, Inc. and State Bank; Vice Chairman (January 1997-April 2000) of North Fork Bank; President and Chief Executive Officer (December 1984-December 1996) of North Side Savings Bank; formerly President and Chief Executive Officer (May 2000-June 2006) Atlantic Bank of New York.	Formerly Director (December 1996-May 2000) of North Fork Bancorporation, Inc.; Formerly Director (May 2000-April 2006) of Atlantic Bank of New York; Director (since November 2006) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
F. Don Schwartz (74) No. of Portfolios Overseen: 83	Management Consultant (since April 1985).	None

Interested Trustee (1)
Robert F. Gunia (63) No. of Portfolios Overseen: 83	Independent Consultant; formerly Chief Administrative Officer (September 1999-September 2009) and Executive Vice President (December 1996-September 2009) of Prudential Investments LLC; Executive Vice President (March 1999-September 2009) and Treasurer (May 2000-September 2009) of Prudential Mutual Fund Services LLC; President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (December 2008- December 2009) of Prudential Investment Management Services LLC; Chief Administrative Officer, Executive Vice President and Director (May 2003-September 2009) of AST Investment Services, Inc.	Director (since May 1989) of The Asia Pacific Fund, Inc.

¹ The year that each Trustee joined the Fund’s Board is as follows: Saul K. Fenster, 1983; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr., 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; F. Don Schwartz, 2003.

E1

Fund Officers 1
Name, Address and Age Position with the Fund	Principal Occupation(s) During the Past Five Years
Steve Pelletier (56) President and Principal Executive Officer	President of Prudential Annuities (since September 2008); Chairman and CEO, International Investments, Prudential Financial (since January 1998).
Timothy S. Cronin (44) Vice President	Chief Investment Officer and Strategist of Prudential Annuities (since January 2004); Director of Investment & Research Strategy (since February 1998); President of AST Investment Services, Inc. (since June 2005).
Kathryn L. Quirk (57) Chief Legal Officer	Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC (PI) and Prudential Mutual Fund Services LLC (PMFS); Vice President and Corporate Counsel (since June 2005) and Secretary (since February 2006) of AST Investment Services, Inc.; formerly Senior Vice President and Assistant Secretary (November 2004-August 2005) of PI; formerly Assistant Secretary (June 2005-February 2006) of AST Investment Services, Inc.; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.
Deborah A. Docs (52) Secretary	Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (51) Assistant Secretary	Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (35) Assistant Secretary	Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).
John P. Schwartz (38) Assistant Secretary	Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1997-2005).
Andrew R. French (47) Assistant Secretary	Director and Corporate Counsel (since May 2006) of Prudential; Vice President and Assistant Secretary (since January 2007) of PI; Vice President and Assistant Secretary (since January 2007) of PMFS; formerly Senior Legal Analyst of Prudential Mutual Fund Law Department (1997-2006).
Timothy J. Knierim (51) Chief Compliance Officer	Chief Compliance Officer of Prudential Investment Management, Inc.(PIM) (since July 2007); formerly Chief Risk Officer of PIM and PI (2002-2007) and formerly Chief Ethics Officer of PIM and PI (2006-2007).
Valerie M. Simpson (51) Deputy Chief Compliance Officer	Chief Compliance Officer (since April 2007) of PI and AST Investment Services, Inc.; formerly Vice President-Financial Reporting (June 1999-March 2006) for Prudential Life and Annuities Finance.
Theresa C. Thompson (47) Deputy Chief Compliance Officer	Vice President, Compliance, PI (since April 2004); and Director, Compliance, PI (2001 - 2004).
Noreen M. Fierro (45) Anti-Money Laundering Compliance Officer	Vice President, Corporate Compliance (since May 2006) of Prudential; formerly Corporate Vice President, Associate General Counsel (April 2002-May 2005) of UBS Financial Services, Inc., in their Money Laundering Prevention Group; Senior Manager (May 2005-May 2006) of Deloitte Financial Advisory Services, LLP, in their Forensic and Dispute Services, Anti-Money Laundering Group.
Grace C. Torres (50) Treasurer and Principal Financial and Accounting Officer	Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.
M. Sadiq Peshimam (46) Assistant Treasurer	Vice President (since 2005) of Prudential Investments LLC.
Peter Parrella (51) Assistant Treasurer	Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).
Alan Fu (52) Assistant Treasurer	Vice President and Corporate Counsel - Tax, Prudential Financial, Inc. (since October 2003).

¹ The year in which each individual became an Officer of the Fund is as follows: Stephen Pelletier, 2008; Timothy S. Cronin, 2009; Kathryn L. Quirk, 2005; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; John P. Schwartz, 2006; Andrew R. French, 2006; Timothy J. Knierim, 2007; Valerie M. Simpson, 2007; Theresa C. Thompson, 2008; Noreen M. Fierro, 2006; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006; Alan Fu, 2006.

Explanatory Notes to Tables:

Trustees are deemed to be “Interested”, as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC. Robert F. Gunia will be considered an Interested Trustee for at least two years after his retirement from employment by the Manager and its affiliates (which was on or about October 21, 2009). He will also be an Interested Trustee as long as he holds a beneficial interest in securities issued by the Manager or its affiliates.

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

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

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

“No. of Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which PI serves as manager include the Prudential Investments Funds, The Prudential Variable Contract Accounts, The Target Portfolio Trust, The Prudential Series Fund, Advanced Series Trust and Prudential’s Gibraltar Fund, Inc.

E2

The toll-free number shown below can be used to make transfers and reallocations, review how your premiums are being allocated, and receive current investment option values in your contract. Unit values for each investment option are available to all participants from the toll-free number. The phone lines are open each business day during the hours shown. Please be sure to have your contract number available when you call.

800-458-6333

8 a.m. — 8 p.m. Eastern time

The Prudential Insurance Company of America

751 Broad Street

Newark NJ 07102-3777

Presorted

Standard

U.S. Postage

PAID

Prudential

In the past, participants who held several variable contracts at the same address received multiple copies of annual and semiannual reports. In an effort to lessen waste and reduce expenses of postage and printing, we will attempt to mail only one copy of this report, based on our current records for participants with the same last name and same address. No action on your part is necessary. Upon request, we will furnish you with additional reports. The toll-free number listed on the inside back cover should be used to request additional copies. Proxy material and tax information will continue to be sent for each account of record.

Prudential Retirement, Prudential Financial, PRU, Prudential and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ and its affiliates.

0172931-00001-00        MD.RS.011        

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

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

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 973-367-7521, and ask for a copy of the Section 406 Standards for Investment
Companies – Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

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

Item 4 – Principal Accountant Fees and Services –

(a) Audit Fees

For the fiscal years ended December 31, 2009 and December 31, 2008, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $16,745 and $16,745, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

None.

(c) Tax Fees

None.

(d) All Other Fees

None.

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

THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent Accountants

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

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

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

• periodic meetings with the accounting firm.

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

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

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

Audit Services

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

• Annual Fund financial statement audits

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

• SEC and regulatory filings and consents

Audit-related Services

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

• Accounting consultations

• Fund merger support services

• Agreed Upon Procedure Reports

• Attestation Reports

• Other Internal Control Reports

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

Tax Services

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

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

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

• Sales and use tax compliance

• Timely RIC qualification reviews

• Tax distribution analysis and planning

• Tax authority examination services

• Tax appeals support services

• Accounting methods studies

• Fund merger support services

• Tax consulting services and related projects

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

Other Non-audit Services

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

Proscribed Services

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

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

• Financial information systems design and implementation

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

• Actuarial services

• Internal audit outsourcing services

• Management functions or human resources

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

• Legal services and expert services unrelated to the audit

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

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

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

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

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

Not applicable.

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.

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

(g) Non-Audit Fees

Not applicable to Registrant for the fiscal years 2009 and 2008. The aggregate non-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years 2009 and 2008 was $0 and $0, respectively.

(h) Principal Accountant’s Independence

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

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.

Item 11 – Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits

(a) (1) Code of Ethics – Attached hereto as Exhibit EX-99.CODE-ETH

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.

(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.

SIGNATURES

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

(Registrant) The Prudential Variable Contract Account-11
By (Signature and Title)*	/S/    DEBORAH A. DOCS
	Deborah A. Docs
	Secretary
Date February 22, 2010

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 (Signature and Title)*	/S/    JUDY A. RICE
	Judy A. Rice
	President and Principal Executive Officer
Date February 22, 2010
By (Signature and Title)*	/S/    GRACE C. TORRES
	Grace C. Torres
	Treasurer and Principal Financial Officer
Date February 22, 2010

* Print the name and title of each signing officer under his or her signature.