Prudential Variable Contract Account 11 NCSR Certified annual shareholder report (management investment company)

Prudential Variable Contract Account 11 N-CSRCertified 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:		12/31/2013

Date of reporting period:		12/31/2013

Item 1 – Reports to Stockholders

LOGO

The MEDLEY Program

ANNUAL REPORT Ÿ DECEMBER 31, 2013

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.

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

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

Please note that this document may include prospectus supplements that are separate from and not a part of this report.

The Prudential MEDLEY Program

Table of Contents

Annual Report

December 31, 2013

LETTER TO PARTICIPANTS

VCA-10 CAPITAL GROWTH ACCOUNT

Financial Statements

VCA-11 MONEY MARKET ACCOUNT

Financial Statements

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, 2013

DEAR PARTICIPANT:

At Prudential, our primary objective is to help investors achieve and maintain long-term financial success. This MEDLEY Program annual report outlines our efforts to achieve this goal. We hope you find it informative and useful.

Prudential has been building on a heritage of success for more than 135 years. The quality of our businesses and risk diversification has enabled us to manage effectively through volatile markets over time. 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 the best resource to help you make the most informed investment decisions. Together, you can build a diversified investment portfolio that aligns with your long-term financial goals. Please keep in mind that diversification and asset allocation strategies do 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,



Stuart Parker		Robert F. O’Donnell
President,		President,
The Prudential Variable Contract Accounts 10 & 11		The Prudential Series Fund

January 31, 2014

Prudential Variable Contract Account-10 (VCA-10) & Variable Contract

Account-24 (VCA-24)

Presentation of Portfolio Holdings — unaudited

December 31, 2013


Conservative Balanced
Five Largest Holdings	(% of Net Assets	)
Apple, Inc.	1.6%
Exxon Mobil Corp.	1.4%
Google, Inc. (Class A Stock)	1.0%
General Electric Co.	0.9%
Microsoft Corp.	0.9%


Diversified Bond
Issuer	(% of Net Assets	)
Credit Suisse Commercial Mortgage Trust	0.9%
MBNA Credit Card Master Note Trust	0.8%
JPMorgan Chase Commercial Mortgage Securities Trust	0.8%
Verizon Communications, Inc.	0.7%
General Electric Capital Corp.	0.6%


Equity
Five Largest Holdings	(% of Net Assets	)
MasterCard, Inc. (Class A Stock)	3.2%
Google, Inc. (Class A Stock)	2.9%
Goldman Sachs Group, Inc. (The)	2.5%
Amazon.com, Inc.	2.3%
Apple, Inc.	2.0%


Flexible Managed
Five Largest Holdings	(% of Net Assets	)
Apple, Inc.	2.0%
Exxon Mobil Corp.	1.7%
Google, Inc.	1.5%
Johnson & Johnson	1.4%
Chevron Corp.	1.2%


Global
Top Five Countries	(% of Net Assets	)
United States	49.5%
United Kingdom	9.2%
Japan	9.2%
France	4.7%
Germany	3.6%


Government Income
Allocation	(% of Net Assets	)
U.S. Government Agency Obligations	48.8%
U.S. Treasury Obligations	27.9%
Commercial Mortgage-Backed Securities	17.3%
Corporate Bonds	1.9%
Municipal Bonds	1.8%


Stock Index
Five Largest Holdings	(% of Net Assets	)
Apple, Inc.	3.0%
Exxon Mobil Corp.	2.6%
Google, Inc., (Class A Stock)	1.9%
Microsoft Corp.	1.7%
General Electric Co.	1.7%


VCA-10
Five Largest Holdings	(% of Net Assets	)
JPMorgan Chase & Co.	2.5%
MasterCard, Inc. (Class A Stock)	2.3%
Goldman Sachs Group, Inc. (The)	2.1%
Wells Fargo & Co.	2.0%
Flextronics International Ltd. (Singapore)	1.9%

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

December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year			Since Inception
Capital Growth Account (VCA-10)¹—Standard Contract		30.81	%		17.53	%		7.19	%		—
Capital Growth Account (VCA-10)¹—0.50% Contract		31.46			18.11			7.73			—
Capital Growth Account (VCA-10)¹—0.45% Contract		31.53			—			—			12.77	%
S&P 500 Index		32.37			17.93			7.40			—

Past performance does not guarantee future returns. Account 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.

0.45% Contract inception: 4/1/2011. Unless noted otherwise, Index since inception returns reflect performance beginning the closest month-end date to the Account’s inception of the 0.45% contract.

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the value of the standard contract for the Prudential Variable Contract Account 10 (“VCA-10” or the “Account”) gained 30.81%, the value of a contract with annual expenses of 0.50% gained 31.46%, and the value of a contract with annual expenses of 0.45% gained 31.53%.

The Account’s investment objective is long-term growth of capital. It is subadvised by Jennison Associates LLC (Jennison).

The U.S. equity markets, as measured by the broad market indexes, realized substantial gains for the year. The S&P 500 Index (the index) rose 32.37%, with double-digit gains in all sectors. Consumer discretionary, healthcare, and industrials had the strongest returns; those in telecommunication services and utilities were more modest. The Account performed in line with the Index.

Stock selection in information technology, financials, and industrials and an overweight position in consumer discretionary contributed most to relative returns. LinkedIn, Mastercard, Google, and Microsoft were key contributors in information technology. Morgan Stanley and MetLife led contributors in financials while Boeing led in industrials. LinkedIn is a leading global online professional network that provides what Jennison considers unique access to a large database of active and passive job candidates. Adjacent growth opportunities in marketing services and professional publishing are added potential drivers in early phases of development. MasterCard, the No. 2 payment system in the U.S., is likely to continue to benefit from the long-term shift from cash to electronic credit/debit transactions.

During the period, Morgan Stanley continued to make progress on several fronts; it announced an unexpected share buyback, anticipates being compliant with the Basel III supplementary leverage ratios by 2015, enjoyed steady growth in its wealth management division, and reported that it is on track to achieve expense reduction targets. Boeing reported several strong successive quarters, putting behind it a rocky start to the year as a result of 787 battery problems. Margins have been particularly strong as a result of higher production rates in high margin legacy programs and lower than expected research and development costs. Costs of 787 production also have continued to decline and free cash flow has consistently exceeded expectations.

Individual stock selection in materials and consumer discretionary was most detrimental to relative performance. An underweight in industrials and an overweight in energy also detracted. In materials, the gold-mining companies Kinross Gold and Goldcorp were the source of weakness, due largely to declining gold prices. Those mining companies that can get their costs under control now — and Jennison believes Goldcorp has demonstrated that it is able to — will most likely benefit from significant operating leverage when gold prices finally rise again.

JCPenney was the key detractor in consumer discretionary. JCPenney has been in the midst of a turnaround and began to show signs that it had reached a turning point late in the period, in Jennison’s view. Shares probably declined on profit taking as positive indicators accumulated.

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

The Account performance results are after the deduction of all expenses and contract charges, but not including the effect of any sales charges. The standard VCA-10 contract has total annual expenses (as a percentage of net assets) of 1.00%. Certain VCA-10 contracts include reduced administrative fees and have total annual expenses of either 0.50% or 0.45%. Performance of the VCA-10 contracts with reduced expenses will be higher than the performance of the standard VCA-10 contract. All total returns are for the periods indicated and are calculated based on changes in unit values.

The graph is based on the performance of the Standard Contract. Performance of the 0.50% Contract and the 0.45% Contract will be higher due to differences in the fee structure. All the Contracts include total annual expenses (as a percentage of net assets) of 1.00%, 0.50%, and 0.45%, respectively, which are reflected in the performance.

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.

Jennison Associates LLC is a registered investment adviser and a Prudential Financial Company.

FINANCIAL STATEMENTS OF VCA-10


		*STATEMENT OF NET ASSETS*

December 31, 2013


LONG-TERM INVESTMENTS — 99.0%
COMMON STOCKS	Shares		��	Value (Note 2)
Aerospace & Defense — 1.6%
Boeing Co. (The)		20,636		$	2,816,608

Airlines — 2.0%
American Airlines Group, Inc.(a)		50,003			1,262,576
United Continental Holdings, Inc.(a)		61,818			2,338,575

					3,601,151

Auto Components — 1.3%
Lear Corp.		27,842			2,254,367

Automobiles — 2.2%
General Motors Co.(a)		49,267			2,013,542
Tesla Motors, Inc.(a)		12,227			1,838,696

					3,852,238

Biotechnology — 2.8%
Biogen Idec, Inc.(a)		10,015			2,801,696
BioMarin Pharmaceutical, Inc.(a)		30,327			2,131,078

					4,932,774

Capital Markets — 3.9%
Goldman Sachs Group, Inc. (The)		20,818			3,690,199
Morgan Stanley		98,708			3,095,483

					6,785,682

Chemicals — 1.4%
Monsanto Co.		21,810			2,541,955

Commercial Banks — 3.3%
PNC Financial Services Group, Inc.		29,839			2,314,910
Wells Fargo & Co.		78,249			3,552,505

					5,867,415

Communications Equipment — 1.0%
JDS Uniphase Corp.(a)		140,567			1,824,560

Computers & Peripherals — 1.2%
Apple, Inc.		3,799			2,131,657

Consumer Finance — 1.1%
Capital One Financial Corp.		26,251			2,011,089

Diversified Financial Services — 5.4%
Citigroup, Inc.		53,921			2,809,823
ING US, Inc.		64,455			2,265,593
JPMorgan Chase & Co.		74,505			4,357,052

					9,432,468

Diversified Telecommunication Services — 1.0%
CenturyLink, Inc.		52,301			1,665,787

Electronic Equipment & Instruments — 1.9%
Flextronics International Ltd. (Singapore)(a)		437,786			3,401,597

Energy Equipment & Services — 1.4%
Halliburton Co.		47,016			2,386,062

Food Products — 3.2%
Bunge Ltd.		36,146			2,967,948
Mondelez International, Inc. (Class A Stock)		74,173			2,618,307

					5,586,255


COMMON STOCKS (continued)	Shares		Value (Note 2)
Healthcare Providers & Services — 4.4%
Cigna Corp.		26,456	$	2,314,371
Express Scripts Holding Co. (Class A Stock)(a)		46,243		3,248,108
HCA Holdings, Inc.(a)		47,356		2,259,355

				7,821,834

Hotels, Restaurants & Leisure — 4.1%
Carnival Corp.		69,997		2,811,779
Hilton Worldwide Holdings, Inc.(a)		16,947		377,071
Hyatt Hotels Corp.(a)		38,515		1,904,952
International Game Technology		119,870		2,176,839

				7,270,641

Independent Power Producers & Energy Traders — 1.7%
Calpine Corp.(a)		150,801		2,942,128

Industrial Conglomerates — 1.0%
Siemans AG, ADR (Germany)		12,555		1,738,993

Insurance — 1.9%
MetLife, Inc.		62,615		3,376,201

Internet & Catalog Retail — 3.8%
Amazon.com, Inc.(a)		8,123		3,239,371
priceline.com, Inc.(a)		2,912		3,384,909

				6,624,280

Internet Software & Services — 4.6%
Facebook, Inc.(Class A Stock)(a)		44,040		2,407,226
Google, Inc.(Class A Stock)(a)		2,811		3,150,316
LinkedIn Corp.(a)		11,375		2,466,441

				8,023,983

IT Services — 2.3%
MasterCard, Inc. (Class A Stock)		4,936		4,123,831

Life Sciences Tools & Services — 1.2%
Illumina, Inc.(a)		19,200		2,123,904

Machinery — 1.5%
SPX Corp.		26,566		2,646,239

Media — 3.0%
Comcast Corp. (Class A Stock)		42,469		2,206,902
Liberty Global PLC (Series C) (United Kingdom)(a)		36,590		3,085,269

				5,292,171

Metals & Mining — 1.6%
Goldcorp, Inc. (Canada)		113,410		2,457,595
Kinross Gold Corp. (Canada)		59,922		262,458

				2,720,053

Multiline Retail — 1.0%
J.C. Penney Co., Inc.(a)		190,064		1,739,086

Oil, Gas & Consumable Fuels — 11.9%
Anadarko Petroleum Corp.		29,238		2,319,158
EOG Resources, Inc.		16,935		2,842,370
Hess Corp.		19,003		1,577,249
Marathon Oil Corp.		89,714		3,166,904
Marathon Petroleum Corp.		9,554		876,388

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10


		*STATEMENT OF NET ASSETS*

December 31, 2013


COMMON STOCKS (continued)	Shares		Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Noble Energy, Inc.		46,965	$	3,198,786
Occidental Petroleum Corp.		24,112		2,293,051
Suncor Energy, Inc. (Canada)		67,359		2,360,933
Williams Cos., Inc. (The)		59,820		2,307,257

				20,942,096

Personal Products — 1.3%
Avon Products, Inc.		130,761		2,251,704

Pharmaceuticals — 6.9%
Actavis, Inc.(a)		15,811		2,656,248
Allergan, Inc.		14,319		1,590,555
Bayer AG, ADR (Germany)		14,752		2,094,784
Bristol-Myers Squibb Co.		40,039		2,128,073
Merck & Co., Inc.		33,402		1,671,770
Shire PLC, ADR (Ireland)		13,999		1,977,919

				12,119,349

Road & Rail — 2.7%
Canadian Pacific Railway Ltd. (Canada)		11,219		1,697,659
Hertz Global Holdings, Inc.(a)		109,487		3,133,518

				4,831,177

Semiconductors & Semiconductor Equipment — 0.8%
Intel Corp.		53,989		1,401,554

Software — 2.7%
Microsoft Corp.		59,187		2,215,369
Salesforce.com, Inc.(a)		44,810		2,473,064

				4,688,433

Specialty Retail — 3.0%
Inditex SA, ADR (Spain)		82,749		2,732,372
TJX Cos. Inc. (The)		39,322		2,505,991

				5,238,363

Textiles, Apparel & Luxury Goods — 2.7%
Michael Kors Holdings Ltd. (Hong Kong)(a)		33,187		2,694,453
Nike, Inc. (Class B Stock)		26,837		2,110,462

				4,804,915


COMMON STOCKS (continued)	Shares			Value (Note 2)
Wireless Telecommunication Services — 0.2%
NII Holdings, Inc.(a)		122,713		$	337,461

TOTAL COMMON STOCKS (cost $129,482,757)					174,150,061


	Units
RIGHTS
Oil, Gas & Consumable Fuels
Trident Resources Corp., CVR, Private Placement, (Canada), expiring 6/30/15 (original cost $0; purchased 6/30/10)(a)(b)(c)		1,512			—

TOTAL LONG-TERM INVESTMENTS (cost: $129,482,757)					174,150,061


	Shares
SHORT-TERM INVESTMENT — 2.0%
Affiliated Money Market Mutual Fund
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $3,517,020)(d)		3,517,020			3,517,020

TOTAL INVESTMENTS — 101.0% (cost $132,999,777)			��		177,667,081

LESS LIABILITIES, OTHER ASSETS — (1.0)%
Receivable for Securities Sold					340,358
Interest and Dividends Receivable					96,018
Payable for Pending Capital Transactions					(181,389	)
Payable for Securities Purchased					(1,980,183	)

LIABILITIES IN EXCESS OF OTHER ASSETS					(1,725,196	)

NET ASSETS — 100%				$	175,941,885

NET ASSETS, representing:
Equity of Participants —				$	175,955,237
Equity of The Prudential Insurance Company of America					(13,352	)

				$	175,941,885

The following abbreviations are used in the portfolio descriptions:


ADR		American Depositary Receipt
CVR		Contingent Value Rights

(a)	Non-income producing security.

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

(c)	Indicates a security restricted to resale.

(d)	Prudential Investments LLC, the Manager of the Account, also serves as Manager of the Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10


		*STATEMENT OF NET ASSETS*

December 31, 2013

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 generally in active markets for identical securities.

Level 2—other

significant observable inputs including, but not limited to, quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates, and amortized cost.

Level 3—significant

unobservable inputs for securities valued in accordance with the Account’s Committee approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


Investments in Securities	Level 1		Level 2		Level 3
Common Stocks	$	174,150,061	$	—	$	—
Rights		—		—		—
Affiliated Money Market Mutual Fund		3,517,020		—		—

Total	$	177,667,081	$	—	$	—

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


	Common Stock
Balance as of 12/31/2012	$	1,503,733
Realized gain (loss)		(1,590,888	)
Change in unrealized appreciation (depreciation)		135,959
Purchases		—
Sales		(48,804	)
Transfers into Level 3		—
Transfers out of Level 3		—

Balance as of 12/31/2013	$	—

Included in the table above, under Level 3 securities, are equity rights, that were fair valued in accordance with the Account’s Committee approved fair valuation procedures. Such rights were acquired through a private placement and the valuation was based on unobservable inputs.

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


Oil, Gas & Consumable Fuels	11.9	%
Pharmaceuticals	6.9
Diversified Financial Services	5.4
Internet Software & Services	4.6
Healthcare Providers & Services	4.4
Hotels, Restaurants & Leisure	4.1
Capital Markets	3.9
Internet & Catalog Retail	3.8
Commercial Banks	3.3
Food Products	3.2
Media	3.0
Specialty Retail	3.0
Biotechnology	2.8
Road & Rail	2.7
Software	2.7
Textiles, Apparel & Luxury Goods	2.7
IT Services	2.3
Automobiles	2.2
Affiliated Money Market Mutual Fund	2.0
Airlines	2.0
Electronic Equipment & Instruments	1.9
Insurance	1.9


Independent Power Producers & Energy Traders	1.7	%
Aerospace & Defense	1.6
Metals & Mining	1.6
Machinery	1.5
Chemicals	1.4
Energy Equipment & Services	1.4
Auto Components	1.3
Personal Products	1.3
Computers & Peripherals	1.2
Life Sciences Tools & Services	1.2
Consumer Finance	1.1
Communications Equipment	1.0
Diversified Telecommunication Services	1.0
Industrial Conglomerates	1.0
Multiline Retail	1.0
Semiconductors & Semiconductor Equipment	0.8
Wireless Telecommunication Services	0.2

	101.0
Liabilities in excess of other assets	(1.0	)

	100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10


		*STATEMENT OF NET ASSETS*

December 31, 2013

The Account invested in derivative instruments (rights offerings) during the reporting period. The primary type of risk associated with derivative instruments is equity risk. The effect of such derivative instruments on the Account’s financial position and financial performance as reflected in the Statement of Net Assets and Statement of Operations is presented in the summary below.

At December 31, 2013, the Account held derivatives not accounted for as hedging instruments. These equity contracts have a fair value at December 31, 2013 of $0 and are presented in the Statement of Net Assets as such.

For the year ended December 31, 2013, the Account did not have any realized gain or (loss) or change in unrealized appreciation or (depreciation) on derivatives recognized in income on the Statement of Operations.

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-10


		*STATEMENT OF OPERATIONS*

Year Ended December 31, 2013



INVESTMENT INCOME
Unaffiliated Dividend Income (net of $87,516 foreign withholding tax)	$	2,435,763
Affiliated Dividend Income		2,406
Total Income		2,438,169
EXPENSES
Fees Charged to Participants for Investment Management Services		(418,601	)
Fees Charged to Participants for Administrative Expenses:
Standard Contract		(1,133,249	)
0.50% Contract		(7,079	)
0.45% Contract		(21,738	)
Total Expenses .		(1,580,667	)
NET INVESTMENT INCOME		857,502
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on Investment Transactions		24,415,833
Net Change in Unrealized Appreciation (Depreciation) on Investments		19,029,731
NET GAIN ON INVESTMENTS		43,445,564
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	44,303,066


		*STATEMENT OF CHANGES IN NET ASSETS*


	Year Ended December 31,
	2013			2012
OPERATIONS
Net Investment Income	$	857,502		$	1,300,945
Net Realized Gain on Investment Transactions		24,415,833			6,057,458
Net Change In Unrealized Appreciation (Depreciation) on Investments		19,029,731			11,319,558
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		44,303,066			18,677,961
CAPITAL TRANSACTIONS
Purchase Payments and Transfers In		23,423,935			2,973,827
Withdrawals and Transfers Out		(43,223,694	)		(26,372,849	)
NET DECREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS		(19,799,759	)		(23,399,022	)
NET DECREASE IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS		(2,471	)		(61,443	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		24,500,836			(4,782,504	)
NET ASSETS
Beginning of year		151,441,049			156,223,553
End of year	$	175,941,885		$	151,441,049


Accumulation Unit Values and Equity of Participants as of December 31, 2013
Standard Contract:
Accumulation Unit Value and Equity of Participants, $161,297,796 / 11,720,247 outstanding Accumulation Units	$	13.7623


0.50% Contract:
Accumulation Unit Value and Equity of Participants, $3,367,521 / 224,201 outstanding Accumulation Units	$	15.0201


0.45% Contract:
Accumulation Unit Value and Equity of Participants, $11,289,920 / 750,561 outstanding Accumulation Units	$	15.0420

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, 2013									Year Ended December 31, 2012
	Standard Contract			0.50% Contract			0.45% Contract			Standard Contract			0.50% Contract			0.45% Contract
Investment Income	$	.1792		$	.1950		$	.1952		$	.1825		$	.1975		$	.1976
Expenses
Investment management fee		(.0303	)		(.0330	)		(.0330	)		(.0251	)		(.0272	)		(.0272	)
Administrative expenses		(.0906	)		(.0330	)		(.0264	)		(.0752	)		(.0272	)		(.0218	)
Net Investment Income		.0583			.1290			.1358			.0822			.1431			.1486
Capital Changes
Net realized and unrealized gain (loss) on investment transactions		3.1834			3.4658			3.4700			1.0786			1.1677			1.1686
Net Increase (Decrease) in Accumulation Unit Value		3.2417			3.5948			3.6058			1.1608			1.3108			1.3172
Accumulation Unit Value
Beginning of year		10.5206			11.4253			11.4362			9.3598			10.1145			10.1190
End of year	$	13.7623		$	15.0201		$	15.0420		$	10.5206		$	11.4253		$	11.4362
Total Return**		30.81	%		31.46	%		31.53	%		12.40	%		12.96	%		13.02	%
Ratio of Expenses To Average Net Assets***		1.00	%		.50	%		.45	%		1.00	%		.50	%		.45	%
Ratio of Net Investment Income To Average Net Assets***		.48	%		.98	%		1.03	%		.82	%		1.32	%		1.37	%
Portfolio Turnover Rate		69	%		69	%		69	%		44	%		44	%		44	%
Number of Accumulation Units Outstanding For Participants at end of period (000’s omitted)		11,720			224			751			13,204			205			891


	Year/Period Ended December 31, 2011									Year Ended December 31,
	Standard Contract			0.50% Contract			0.45% Contract†			2010			2009
Investment Income	$	.1448		$	.1559		$	.1203		$	.1531		$	.1215
Expenses
Investment management fee		(.0250	)		(.0270	)		(.0200	)		(.0227	)		(.0186	)
Administrative expenses		(.0749	)		(.0270	)		(.0160	)		(.0678	)		(.0557	)
Net Investment Income		.0449			.1019			.0843			.0626			.0472
Capital Changes
Net realized and unrealized gain (loss) on investment transactions		(.7945	)		(.8579	)		(1.5558	)		.9846			2.8854
Net Increase (Decrease) in Accumulation Unit Value		(.7496	)		(.7560	)		(1.4715	)		1.0472			2.9326
Accumulation Unit Value
Beginning of period		10.1094			10.8705			11.5905			9.0708			6.1382
End of period	$	9.3598		$	10.1145		$	10.1190		$	10.1180		$	9.0708
Total Return**		(7.41	)%		(6.95	)%		(12.70	)%		11.54	%		47.78	%
Ratio of Expenses To Average Net Assets***		1.00	%		.50	%		.45	%††		1.00	%		1.00	%
Ratio of Net Investment Income To Average Net Assets***		.44	%		.94	%		1.03	%††		.69	%		1.00	%
Portfolio Turnover Rate		56	%		56	%		56	%†††		70	%		62	%
Number of Accumulation Units Outstanding For Participants at end of year (000’s omitted)		15,386			205			1,001			18,330			20,072

*	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 period reported. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods of less than one full year are not annualized.

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

†	Inception Date — April 1, 2011.

††	Annualized.

†††	Not Annualized.

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 (“1940 Act”), 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.

PICA issues standard VCA-10 contracts (the “Standard Contracts”), with total annual expenses of 1.00% (as a percentage of net assets). It also issues contracts with lower administrative expenses where warranted by economies of scale and the expense characteristics of the Contract-holder’s retirement arrangement. Prior to January 1, 2011, PICA issued standard contracts and contracts with annual expenses of 0.50% (as a percentage of net assets) (the “0.50% contracts”). The Accumulation Units Values were previously shown on a combined basis. During 2011, PICA issued VCA-10 contract with annual expenses of 0.45% (as a percentage of net assets) (the “0.45% contracts”). The financial statements now show separate Accumulation Units Values for each type of contract.

Note 2:

Accounting Policies

The following accounting policies conform to U.S. generally accepted accounting principles. The Account consistently follows such policies in the preparation of its financial statements.

Security Valuation: The Account holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Account’s Committee Members (the “Committee”) have adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Account to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not representative of fair value. A record of the Valuation Committee’s actions is subject to the Committee’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

Various inputs determine how the Account’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Schedule of Investments.

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

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

Common stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable and considered to be significant to the valuation.

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

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

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

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

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

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

Restricted and Illiquid Securities: The Account may hold up to 15% of its net assets in illiquid securities, including those that are restricted as to disposition under securities law (“restricted securities”). Restricted securities, sometimes referred to as private placements are valued pursuant to the valuation procedures noted above.

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 subadviser’s 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.

VCA-10 is subject to fees for investment management and administration 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.

Standard contracts have an effective annual rate of up to 1.00% of the current value of the Participant’s equity of which 0.75% is paid to PICA for administrative expenses not provided by the annual account charge, and 0.25% is paid to PI, is for investment management services. The 0.50% contracts have an effective annual rate of up to 0.50% of the current value of the Participant’s equity of which 0.25% is paid to PICA for administrative expenses not provided by the annual account charge, and 0.25% is paid to PI, is for investment management services. The 0.45% contracts have an effective annual rate of up to 0.45% of the current value of the Participant’s equity of which 0.20% is paid to PICA for administrative expenses not provided by the annual account charge, and 0.25% is paid to PI, is for investment management services.

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 year ended by cancelling Units.

Note 4:

Other Transactions with Affiliates

During the year ended December 31, 2013, the Account invested in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act, as amended, and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.

Note 5:

Purchases and Sales of Portfolio Securities

For the year ended December 31, 2013, the aggregate cost of purchases and the proceeds from sales of securities, excluding short-term investments, were $111,739,911 and $129,676,925, respectively.

Note 6:

Unit Transactions

The number of Accumulation Units issued and redeemed for the years ended December 31, 2013 and December 31, 2012, respectively, are as follows:


Standard Contracts	Units			Amount
Year ended December 31, 2013:
Account units issued		1,756,379		$	23,105,504
Account units redeemed		(3,240,015	)		(41,295,579	)

Net increase (decrease) in units outstanding		(1,483,636	)	$	(18,190,075	)

Year ended December 31, 2012:
Account units issued		277,286		$	2,811,067
Account units redeemed		(2,459,701	)		(25,011,387	)

Net increase (decrease) in units outstanding		(2,182,415	)	$	(22,200,320	)


0.50% Contracts
Year ended December 31, 2013:
Account units issued		23,969		$	318,431
Account units redeemed		(4,812	)		(61,635	)

Net increase (decrease) in units outstanding		19,157		$	256,796

Year ended December 31, 2012:
Account units issued		14,985		$	162,760
Account units redeemed		(14,614	)		(156,993	)

Net increase (decrease) in units outstanding		371		$	5,767


0.45% Contracts	Units			Amount
Year ended December 31, 2013:
Account units issued		—		$	—
Account units redeemed		(140,775	)		(1,866,480	)

Net increase (decrease) in units outstanding		(140,775	)	$	(1,866,480	)

Year ended December 31, 2012:
Account units issued		—		$	—
Account units redeemed		(109,575	)		(1,204,469	)

Net increase (decrease) in units outstanding		(109,575	)	$	(1,204,469	)

Note 7:

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 8:

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. 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.

For the year ended December 31, 2013, $185,603 in participant loans were withdrawn from VCA-10 and $107,576 of principal and interest was repaid to VCA-10. For the year ended December 31, 2012, $157,895 in participant loans were withdrawn from VCA-10 and $118,358 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, 2013, PICA has advised the Account that it received $1,784 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.

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 (hereafter referred to as the “Account”) as of December 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the 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, 2013, 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, 2013, 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.

LOGO

New York, New York

February 21, 2014


The Prudential MEDLEY Program — VCA-11 Money Market Account		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	7-Day Current Net Yield			1-Year			5-Year			10-Year			Since Inception
VCA-11 Money Market Account¹— Standard Contract		-0.84	%		-0.81	%		-0.67	%		0.99	%		—
VCA-11 Money Market Account— 0.50% Contract		-0.34			-0.31			-0.17			1.49			—
VCA-11 Money Market Account— 0.45% Contract		-0.29			-0.26			—			—			-0.24	%
Citigroup 3-Month Treasury Bill Index		—			0.05			0.10			1.59			—

The yield quotation more closely reflects the current earnings of the Account than the total return quotation. 0.45% contract inception: 4/1/2011. Unless noted otherwise, Index since inception returns reflect performance beginning the closest month-end date to the Account’s inception of the 0.45% contract.

MONEY MARKET ACCOUNT

ONE-YEAR TOTAL RETURN FOR THE

PAST 10 YEARS²

LOGO

For the year ended December 31, 2013, the value of the standard contract for the Prudential Variable Contract Account 11 (“VCA-11” or the “Account”) declined -0.81%, the value of a contract with annual expenses of 0.50% declined -0.31%, and the value of a contract with annual expenses of 0.45% declined -0.26%.

The Account’s investment objective is to seek high current income and maintain high levels of liquidity. The Account is subadvised by Prudential Investment Management, Inc.

The seven-day current yield and total return of the Account remained near zero during the period. Throughout the year, the yields on all money market funds in the United States stayed at historically low levels, as the Federal Reserve (Fed) maintained its efforts to keep rates low in hopes of fueling economic growth. In mid-spring, comments by Fed Chairman Ben Bernanke suggesting the Fed might begin winding down its bond-buying program sooner rather than later, drove longer term rates higher. Overall, the markets remained volatile in anticipation of Fed tapering and in response to fiscal gridlock in Washington, D.C., which emerged early in the fourth quarter.

During the reporting period, the three-month LIBOR (the interest rate at which banks borrow funds from other banks) declined from 0.30% to 0.25% as it was evident that global efforts to support the banking system would continue. The Federal Funds effective rate ended the year at 0.07%

On average, the Account’s weighted average maturity was well within its permitted limits as a flat yield curve and scarce supply provided few investment opportunities. Corporations took advantage of low interest rates to issue debt with maturities of longer than one year. At the same time, demand was strong for a limited number of shorter-term issues. As corporate spreads (the difference in yield between corporate bonds and government bonds of similar maturities) narrowed, the Account focused on increasing its exposure to government securities. In the latter part of the year, fiscal policy antics in Washington, D.C. disrupted the short end of the U.S. Treasury market. U.S. treasuries maturing in October and November rose in yield, as investors avoided holding any security likely to defer payment, temporarily creating a buying opportunity for the Account.

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

The Account performance results are after the deduction of all expenses and contract charges, but not including the effect of any sales charges. The standard VCA-11 contract has total annual expenses (as a percentage of net assets) of 1.00%. Certain VCA-11 contracts include reduced administrative fees and have total annual expenses of either 0.50% or 0.45%. Performance of the VCA-11 contracts with reduced expenses will be higher than the performance of the standard VCA-11 contract. All total returns are for the periods indicated and are calculated based on changes in unit values.

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. Investors cannot invest directly in an index.

London Interbank Offered Rate (LIBOR). The LIBOR is an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers’ Association.

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.

Prudential Investment Management, Inc. is a registered investment adviser and a Prudential Financial Company.

FINANCIAL STATEMENTS OF VCA-11


		*STATEMENT OF NET ASSETS*

December 31, 2013


SHORT-TERM INVESTMENTS — 101.1%	Principal Amount (000)		Value (Note 2)
Certificates of Deposit — 15.8%
Bank of Montreal 0.243%, 06/18/2014(b)	$	400	$	400,000
Bank of Nova Scotia 0.244%, 6/19/2014(b)		500		500,000
Bank of Nova Scotia Houston 0.788%, 01/27/2014(b)		300		300,109
Bank of Tokyo-Mitsubishi UFJ Ltd. 0.210%, 01/10/2014		400		400,000
Citibank NA 0.219%, 06/05/2014(b)		300		300,000
Deutsche Bank AG 0.230%, 02/28/2014		300		300,000
JPMorgan Chase Bank NA
0.289%, 07/31/2014(b)		500		500,000
0.330%, 02/18/2014		300		300,000
Norinchchukin Bank (NY Branch) 0.190%, 01/22/2014		300		300,000
Royal Bank of Canada (NY Branch) 0.264%, 10/17/2014(b)		300		300,000
Sumitomo Mitsui Banking Corp. (NY Branch) 0.230%, 01/13/2014		500		500,000
Toronto-Dominion Bank 0.235%, 07/26/2014(b)		400		400,000
Wells Fargo Bank NA 0.238%, 12/09/2014(b)		350		350,000

				4,850,109

Commercial Paper — 21.3%
BHP Billiton Finance (USA) Ltd., 144A 0.150%, 01/23/2014(a)		375		374,966
Caisse Centrale Desjardins du Quebec, 144A 0.258%, 10/23/2014(a)		300		300,000
CPPIB Capital, Inc. 144A 0.125%, 01/16/2014(a)		750		749,961
DNB Bank ASA, 144A 0.190%, 01/15/2014(a)		402		401,970
0.321%, 01/22/2014(b)		300		300,000
Electricite de France, 144A 0.200%, 01/10/2014(a)		500		499,975
HSBC Bank PLC, 144A 0.319%, 01/31/2014(b)		400		400,000
ING (U.S.) Funding LLC, 0.220%, 02/24/2014(a)		300		299,901
International Bank Reconstruction & Development
0.100%, 01/16/2014(a)		500		499,979
0.100%, 02/05/2014(a)		250		249,976
International Finance Corp. 0.110%, 02/19/2014(a)		300		299,955
Monsanto Corp., 144A 0.270%, 01/17/2014(a)		500		499,940
PNC Bank NA 0.300%, 08/25/2014(a)		400		399,213
Skandinaviska Enskilda Banken AB, 144A 0.210%, 01/03/2014(a)		400		399,995


SHORT-TERM INVESTMENTS (continued)	Principal Amount (000)		Value (Note 2)
Commercial Paper (continued)
State Street Corp. 0.160%, 02/25/2014(a)	$	500	$	499,878
Toyota Motor Credit Corp. 0.150%, 02/12/2014(a)		345		344,940

				6,520,649

Other Instruments – Corporate Bonds — 12.0%
Credit Suisse Group (NY Branch) Sr. Unsec’d. Notes, MTN 1.204%, 01/14/2014(b)		500		500,181
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN 2.100%, 01/07/2014		182		182,053
HSBC Bank PLC., Sr. Unsec’d. Notes, 144A 1.044%, 01/17/2014(b)		395		395,123
Nordea Bank AB, Sr. Unsec’d Notes, 144A 2.125%, 01/14/2014		250		250,166
Principal Life Global Funding II, Sec’d. Notes, 144A 0.868%, 07/09/2014(b)		712		714,363
Rabobank Nederland, Bank Gtd. Notes 1.850%, 01/10/2014		320		320,131
Total Capital Canada Ltd., Sr. Unsec’d. Notes, MTN 0.624%, 01/17/2014(b)		300		300,055
Toyota Motor Credit Corp., Sr. Unsec’d. Notes, MTN 0.253%, 04/07/2014(b)		300		300,000
Westpac Banking Corp., Sr. Unsec’d. Notes, 144A 0.977%, 03/31/2014(b)		700		701,206

				3,663,278

Time Deposit — 2.6%
U.S. Bank National Association 0.150%, 01/02/2014		794		794,000

U.S. Government Agency Obligations — 26.1%
Federal Farm Credit Bank 0.147%, 08/15/2014(b)		560		560,073
Federal Home Loan Bank
0.005%, 07/10/2014(a)		350		349,991
0.035%, 01/03/2014(a)		500		499,999
0.050%, 01/06/2014(a)		500		499,997
0.060%, 01/24/2014(a)		556		555,979
0.064%, 01/02/2014(a)		1,000		999,998
0.075%, 01/29/2014(a)		300		299,983
0.080%, 02/12/2014(a)		500		499,954
0.084%, 01/17/2014(b)		300		299,999
0.109%, 06/12/2014(b)		500		499,977
0.109%, 08/12/2014(b)		500		499,985
0.111%, 08/19/2014(b)		500		500,000
0.112%, 03/21/2014(a)		250		249,940
0.112%, 08/20/2014(b)		500		500,000
0.113%, 12/08/2014(b)		400		399,990
0.115%, 12/18/2014(b)		300		299,970
0.129%, 12/09/2014(b)		300		300,000

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-11


		*STATEMENT OF NET ASSETS*

December 31, 2013


SHORT-TERM INVESTMENTS (continued)	Principal Amount (000)		Value (Note 2)
U.S. Government Agency Obligations (continued)
Federal Home Loan Mortgage Corp. 1.375%, 02/25/2014	$	180	$	180,326

				7,996,161

U.S. Treasury Obligations — 16.9%
U.S. Treasury Bills
0.045%, 01/30/2014(a)		1,000		999,964
0.050%, 02/06/2014(a)		365		364,982
0.070%, 02/13/2014(a)		300		299,975
0.083%, 02/20/2014(a)		500		499,943
U.S. Treasury Notes 0.250%, 02/28/2014		300		300,048
0.250%, 03/31/2014		900		900,394
1.250%, 02/15/2014		500		500,709
1.250%, 03/15/2014		800		801,850
1.750%, 01/31/2014		500		500,694

				5,168,559

Repurchase Agreements(c) — 6.4%
Deutsche Bank Securities, Inc. 0.030%, dated 12/31/2013, due 01/02/2014 in the amount of $1,051,002 (cost $1,051,000)		1,051		1,051,000
Morgan Stanley & Co., Inc. 0.040%, dated 12/30/2013, due 01/06/2014 in the amount of $895,007 (cost $895,000)		895		895,000

				1,946,000


SHORT-TERM INVESTMENTS (continued)	Value (Note 2)
TOTAL INVESTMENTS — 101.1% (cost $30,938,756)	$	30,938,756

LIABILITIES LESS, OTHER ASSETS — (1.1)%
Interest Receivable	$	24,598
Cash		207
Payable for Pending Capital Transactions		(23,073	)
Payable for Securities Purchased		(349,991	)

LIABILITIES IN EXCESS OF OTHER ASSETS		(348,259	)

NET ASSETS — 100%	$	30,590,497

NET ASSETS, representing:
Equity of Participants	$	30,590,239
Equity of The Prudential Insurance Company of America		258

	$	30,590,497

The following abbreviations are used in the portfolio descriptions:


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.
FHLMC		Federal Home Loan Mortgage Corporation
MTN		Medium Term Note

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

(b)	Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.

(c)	Repurchase agreements are collaterized by FHLMC (coupon rate 3.50%, maturity date 07/01/2042) and U.S. Treasury Security (coupon rate 1.75%, maturity date 05/15/2023), with the aggregate value, including accrued interest, of $1,984,931.

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 generally in active markets for identical securities.

Level 2—

other significant observable inputs including, but not limited to, quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates, and amortized cost.

Level 3—

significant unobservable inputs for securities valued in accordance with the Account’s Committee approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1		Level 2		Level 3
Investments in Securities
Certificates of Deposit	$	—	$	4,850,109	$	—
Commercial Paper		—		6,520,649		—
Other Instruments – Corporate Bonds		—		3,663,278		—
Time Deposit		—		794,000		—
U.S. Government Agency Obligations		—		7,996,161		—
U.S. Treasury Obligations		—		5,168,559		—
Repurchase Agreements		—		1,946,000

Total	$	—	$	30,938,756	$	—

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-11


		*STATEMENT OF NET ASSETS*

December 31, 2013

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage on net assets as of December 31, 2013 was as follows:


U.S. Government Agency Obligations	26.1	%
Commercial Paper	21.3
U.S. Treasury Obligations	16.9
Certificates of Deposit	15.8
Other Instruments – Corporate Bonds	12.0


Repurchase Agreements	6.4	%
Time Deposit	2.6

	101.1
Liabilities in excess of other assets	(1.1	)

	100.0	%

The Account invested in financial instruments during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting as well as instruments subject to collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.

Offsetting of financial instrument assets and liabilities


Description	Gross Amounts Recognized		Gross Amounts not subject to netting	Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Repurchase Agreements	$	1,946,000	$ —	$	—	$	1,946,000
		Collateral Amounts Pledged/(Received):
		Repurchase Agreements					(1,946,000	)

		Net Amount				$	—

SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS OF VCA-11


		*STATEMENT OF OPERATIONS*

Year Ended December 31, 2013



INVESTMENT INCOME
Unaffiliated Interest Income	$	58,953
EXPENSES
Fees Charged to Participants for Investment Management Services		(80,037	)
Fees Charged to Participants for Administrative Expenses:
Standard Contract		(216,379	)
0.50% Contract		(4,333	)
0.45% Contract		(2,862	)
Total Expenses		(303,611	)
NET INVESTMENT LOSS		(244,658	)
Realized Gain on Investment Transactions		629
NET DECREASE IN NET ASSETS FROM OPERATIONS	$	(244,029	)


		*STATEMENT OF CHANGES IN NET ASSETS*


	Year Ended December 31,
	2013			2012
OPERATIONS
Net Investment Loss	$	(244,658	)	$	(258,446	)
Net Realized Gain on Investment Transactions		629			1,006
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS		(244,029	)		(257,440	)
CAPITAL TRANSACTIONS
Purchase Payments and Transfers In		4,925,495			3,107,940
Withdrawals and Transfers Out		(8,285,654	)		(7,172,202	)
NET DECREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS		(3,360,159	)		(4,064,262	)
NET DECREASE IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS		(89	)		(18,000	)
TOTAL DECREASE IN NET ASSETS		(3,604,277	)		(4,339,702	)
NET ASSETS
Beginning of year		34,194,774			38,534,476
End of year	$	30,590,497		$	34,194,774

Accumulation Unit Values and Equity of Participants as of December 31, 2013


Standard Contract:
Accumulation Unit Value and Equity of Participants, $27,440,360 / 8,445,827 outstanding Accumulation Units	$	3.2490


0.50% Contract:
Accumulation Unit Value and Equity of Participants, $1,764,543 / 501,838 outstanding Accumulation Units	$	3.5162


0.45% Contract:
Accumulation Unit Value and Equity of Participants, $1,385,336 / 393,417 outstanding Accumulation Units	$	3.5213

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, 2013									Year Ended December 31, 2012
	Standard Contract			0.50% Contract			0.45% Contract			Standard Contract			0.50% Contract			0.45% Contract
Investment Income	$	.0060		$	.0063		$	.0064		$	.0081		$	.0085		$	.0086
Expenses
Investment management fee		(.0081	)		(.0087	)		(.0087	)		(.0083	)		(.0088	)		(.0088	)
Administrative expenses		(.0244	)		(.0087	)		(.0071	)		(.0246	)		(.0088	)		(.0071	)
Net Investment Loss		(.0265	)		(.0111	)		(.0094	)		(.0248	)		(.0091	)		(.0073	)
Capital Changes
Net realized gain (loss) on investment transactions		.0001			.0001			.0001			.0001			.0001			.0001
Net Decrease in Accumulation Unit Value		(.0264	)		(.0110	)		(.0093	)		(.0247	)		(.0090	)		(.0072	)
Accumulation Unit Value
Beginning of year		3.2754			3.5272			3.5306			3.3001			3.5362			3.5378
End of year	$	3.2490		$	3.5162		$	3.5213		$	3.2754		$	3.5272		$	3.5306
Total Return**		(.81	)%		(.31	)%		(.26	)%		(.75	)%		(.25	)%		(.20	)%
Ratio of Expenses To Average Net Assets***		1.00	%		.50	%		.45	%		1.00	%		.50	%		.45	%
Ratio of Net Investment Loss To Average Net Assets***		(.81	)%		(.32	)%		(.27	)%		(.75	)%		(.26	)%		(.21	)%
Number of Accumulation Units Outstanding For Participants at end of period (000’s omitted)		8,446			502			393			9,435			500			433


	Year/Period Ended December 31, 2011									Year Ended December 31,
	Standard Contract			0.50% Contract			0.45% Contract†			2010			2009
Investment Income	$	.0070		$	.0073		$	.0051		$	.0136		$	.0239
Expenses
Investment management fee		(.0083	)		(.0088	)		(.0067	)		(.0083	)		(.0084	)
Administrative expenses		(.0248	)		(.0088	)		(.0053	)		(.0249	)		(.0251	)
Net Investment Income (Loss)		(.0261	)		(.0103	)		(.0069	)		(.0196	)		(.0096	)
Capital Changes
Net realized gain (loss) on investment transactions		.0001			.0001			.0000	††		—			—
Net Increase (Decrease) in Accumulation Unit Value		(.0260	)		(.0102	)		(.0069	)		(.0196	)		(.0096	)
Accumulation Unit Value
Beginning of period		3.3261			3.5464			3.5447			3.3520			3.3616
End of period	$	3.3001		$	3.5362		$	3.5378		$	3.3324		$	3.3520
Total Return**		(.78	)%		(.29	)%		(.19	)%		(.58	)%		(.29	)%
Ratio of Expenses To Average Net Assets***		1.00	%		.50	%		.45	%†††		1.00	%		1.00	%
Ratio of Net Investment Income (Loss) To Average Net Assets***		(.79	)%		(.29	)%		(.23	)%†††		(.71	)%		(.30	)%
Number of Accumulation Units Outstanding For Participants at end of year (000’s omitted)		10,650			495			458			12,886			14,777

*	Calculated by accumulating the actual per unit amounts daily.

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

†	Inception Date — April 1, 2011.

††	Less than $.00005.

†††	Annualized.

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.

PICA issues standard VCA-11 contracts (the “Standard Contracts”), with total annual expenses of 1.00% (as a percentage of net assets). It also issues contracts with lower administrative expenses where warranted by economies of scale and the expense characteristics of the Contract-holder’s retirement arrangement. Prior to January 1, 2011, PICA issued standard contracts and contracts with annual expenses of 0.50% (as a percentage of net assets) (the “0.50% contracts”). The Accumulation Units Values were previously shown on a combined basis. During 2011, PICA issued VCA-11 contract with annual expenses of 0.45% (as a percentage of net assets) (the “0.45% contracts”). The financial statements now show separate Accumulation Units Values for each type of contract.

Note 2:

Accounting Policies

The following accounting policies conform to U.S. generally accepted accounting principles. The Account consistently follows such policies in the preparation of its financial statements.

The Account values all of its securities of sufficient credit quality, 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 assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy. 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.

The Account may hold up to 5% of its net assets in illiquid securities, including those that are restricted as to disposition under securities law (“restricted securities”). Restricted securities, sometimes referred to as 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 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.

Master Netting Arrangements: The Account may be subject to various Master Agreements, or netting arrangements, with select counterparties. A master netting arrangement between the Account and the counterparty permits the Account to offset amounts payable by the Account to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Account to cover the Account’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforcable. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right to set-off is enforceable by law. During the reporting period, there were no instances where the right of set-off existed and management has not elected to offset.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from security transactions are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required, 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.

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.

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 subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with management of the Account. PI pays for the services of PIM.

VCA-11 is subject to fees for investment management and administration 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 PIM are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 4:

Unit Transactions

The number of Accumulation Units issued and redeemed for the years ended December 31, 2013 and December 31, 2012, respectively, are as follows:


Standard Contract	Units			Amount
Year ended December 31, 2013:
Account units issued		1,450,518		$	4,724,481
Account units redeemed		(2,439,487	)		(7,952,323	)

Net increase (decrease) in units outstanding		(988,969	)	$	(3,227,842	)

Year ended December 31, 2012:
Account units issued		887,322		$	2,918,023
Account units redeemed		(2,102,783	)		(6,912,097	)

Net increase (decrease) in units outstanding		(1,215,461	)	$	(3,994,074	)


0.50% Contract
Year ended December 31, 2013:
Account units issued		57,072		$	201,014
Account units redeemed		(54,758	)		(192,943	)

Net increase (decrease) in units outstanding		2,314		$	8,071

Year ended December 31, 2012:
Account units issued		53,782		$	189,917
Account units redeemed		(49,096	)		(173,383	)

Net increase (decrease) in units outstanding		4,686		$	16,534


0.45% Contract
Year ended December 31, 2013:
Account units issued		—		$	—
Account units redeemed		(39,796	)		(140,388	)

Net increase (decrease) in units outstanding		(39,796	)	$	(140,388	)

Year ended December 31, 2012:
Account units issued		—		$	—
Account units redeemed		(24,532	)		(86,722	)

Net increase (decrease) in units outstanding		(24,532	)	$	(86,722	)

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. 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.

For the year ended December 31, 2013, $70,867 in participant loans were withdrawn from VCA-11 and $138,908 of principal and interest was repaid to VCA-11. For the year ended December 31, 2012, $81,187 in participant loans were withdrawn from VCA-11 and $105,887 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, 2013, PICA has advised the Account that it received $859 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.

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 (hereafter referred to as the “Account”) as of December 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

LOGO

New York, New York

February 21, 2014

THE VCA 10 & 11 COMMITTEES AND OFFICERS

MANAGEMENT OF VCA 10 & 11 (Unaudited)

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

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


Independent Committee Members⁽¹⁾
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Ellen S. Alberding (55) Committee Member Portfolios Overseen: 66	President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).	None.
Kevin J. Bannon (61) Committee Member Portfolios Overseen: 66	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 (61) Committee Member Portfolios Overseen: 66	President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co (broker-dealer).	Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).
Keith F. Hartstein (57) Committee Member Portfolios Overseen: 66	Formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).	None.
Michael S. Hyland, CFA (68) Committee Member Portfolios Overseen: 66	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 of Salomon Brothers Asset Management (1989-1999).	None.
Douglas H. McCorkindale (74) Committee Member Portfolios Overseen: 66	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 Lockheed Martin Corp. (aerospace and defense) (since May 2001).
Stephen P. Munn (71) Committee Member Portfolios Overseen: 66	Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).	Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).
James E. Quinn (61) Committee Member Portfolios Overseen: 66	Formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1984).	Director of Deckers Outdoor Corporation (footwear manufacturer) (since 2011).
Richard A. Redeker (70) Committee Member & Independent Chair Portfolios Overseen: 66	Retired Mutual Fund Senior Executive (44 years); Management Consultant; Independent Directors Council (organization of 2,800 Independent Mutual Fund Directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.	None.
Robin B. Smith (74) Committee Member Portfolios Overseen: 66	Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); Member of the Board of Directors of ADLPartner (marketing) (since December 2010); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House.	Formerly Director of BellSouth Corporation (telecommunications) (1992-2006).


Independent Committee Members⁽¹⁾
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Stephen G. Stoneburn (70) Committee Member Portfolios Overseen: 66	Chairman, (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).	None.
Interested Committee Members⁽¹⁾
Name, Address, Age Position(s) Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Stuart S. Parker (50) Committee Member & President Portfolios Overseen: 66	President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).	None.
Scott E. Benjamin (40) Committee Member & Vice President Portfolios Overseen: 66	Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).	None.

⁽¹⁾ The year that each Committee Member joined the Committee is as follows: Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2008; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Douglas H. McCorkindale, 2008; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 2008; Robin B. Smith, 2008; Stephen G. Stoneburn, 2008; Scott E. Benjamin, Committee Member since 2010 and Vice President since 2009.


VCA 10 & 11 Officers^(a)(1)
Name, Address and Age Position with VCA 2		Principal Occupation(s) During Past Five Years
Stuart S. Parker (50) President		President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005-December 2011).
Raymond A. O’Hara (58) Chief Legal Officer		Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988-August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).
Deborah A. Docs (56) Secretary		Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Jonathan D. Shain (55) Assistant Secretary		Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Claudia DiGiacomo (39) Assistant Secretary		Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown Wood LLP (1999-2004).
Andrew R. French (51) Assistant Secretary		Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.
Amanda S. Ryan (36) Assistant Secretary		Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray (2008-2012).
Bruce Karpati (44) Chief Compliance Officer		Chief Compliance Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, the Prudential Series Fund and Prudential’s Gibraltar Fund, Inc. (May 2013-Present); formerly National Chief (May 2012-May 2013) and Co-Chief (January 2010-May 2012) of the Asset Management Unit, Division of Enforcement, of the U.S. Securities & Exchange Commission; Assistant Regional Director (January 2005-January 2010) of the U.S. Securities & Exchange Commission.
Theresa C. Thompson (51) Deputy Chief Compliance Officer		Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).


VCA 10 & 11 Officers^(a)(1)
Name, Address and Age Position with VCA 2		Principal Occupation(s) During Past Five Years
Richard W. Kinville (45) Anti-Money Laundering Compliance Officer		Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009 ).
Grace C. Torres (54) Treasurer and Principal Financial and Accounting Officer		Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of Prudential Investments LLC; 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 (50) Assistant Treasurer		Vice President (since 2005) of Prudential Investments LLC.
Peter Parrella (55) 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 Mr. Parker and Mr. Benjamin, Interested Committee Members who also serve as President and Vice President, respectively.

⁽¹⁾ The year in which each individual became an Officer of VCA 10 & 11 is as follows: Stuart S. Parker, 2012; Raymond A. O’Hara, 2012; Deborah A. Docs, 2005; Jonathan D. Shain, 2005; Claudia DiGiacomo, 2005; Andrew R. French, 2006; Amanda S. Ryan, 2012; Bruce Karpati, 2013; Theresa C. Thompson, 2008; Richard W. Kinville, 2011; Grace C. Torres, 1997; Peter Parrella, 2007; M. Sadiq Peshimam, 2006.

Explanatory Notes to Tables:

Committee 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 Committee Members 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 Committee Members or Officers. The Independent Committee Members have adopted a retirement policy, which calls for the retirement of Committee Members on December 31 of the year in which they reach the age of 78, provided that the Committee may extend the retirement age on a year-by-year basis for a Committee Member.

“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 (PI) and/or AST Investment Services, Inc. (ASTI) (collectively, the Manager) that are overseen by the Trustee. The investment companies for which PI and/or ASTI serves as Manager include The Prudential Variable Contract Accounts, The Prudential Series Fund, Advanced Series Trust, Prudential’s Gibraltar Fund, Inc., Prudential Short Duration High Yield Fund, Inc. and Prudential Global Short Duration High Yield Fund, Inc.

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 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

December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		16.15	%		12.63	%		6.43	%
Blended Index		14.31			10.88			5.95
S&P 500 Index		32.37			17.93			7.40

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.

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.

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the Conservative Balanced Portfolio returned 16.15%.

The Portfolio is subadvised by Prudential Investment Management Inc. and Quantitative Management Associates LLC. The Portfolio’s investment objective is total investment return consistent with a conservatively managed diversified portfolio.

Historically strong equity market gains drove the Portfolio’s gain, despite a weak year for fixed income markets. The Portfolio topped its benchmark due to the tactical asset allocation decision to overweight stocks all year combined with solid active returns in equities and fixed income. In addition, cutting bond allocations and adding to cash helped returns in the second half of 2013 as bond yields rose, prices fell, and bonds slipped to negative returns.

Despite repeated calls by some for a correction in equity prices throughout 2013, as well as periodic chaos in Washington, the S&P 500 went nearly straight up in 2013, providing a total return over 30% without a single 5% pullback. Evidence mounted through the year that the U.S. economy was finally gaining some traction and breaking out of its weak 2% average annual Gross Domestic Product (GDP) growth pattern that had prevailed since 2009. By the third quarter, a reduced fiscal drag, recovery in housing, autos and other consumer goods, a highly stimulative Federal Reserve policy, contributions from a revived U.S. energy sector, and inventory accumulation resulted in a strong 4.1% GDP growth. Although there is no guarantee that growth will continue at this robust pace, consensus expectations have been rising closer to the 3%-plus average of the post-war period after wallowing for years at 2% or worse.

Equity returns were driven by rising Price-Earnings (P/E) multiples in 2013, since market returns were far above the more modest 6% earnings growth rate. Investors cannot count on multiples increasing indefinitely, but today’s levels are roughly in line with historical averages, and well below levels that led to bear markets. Returns in 2014 and over the next few years are more likely to come from sales and earnings growth rather than the rocket fuel of higher P/E ratios. But if the economy continues to recover and drive growth, returns in the vicinity of the historical average of around 10% may not be unreasonable.

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 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 three 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.

Prudential Investment Management, Inc., and Quantitative Management Associates LLC are registered investment advisers and Prudential Financial companies.


The Prudential Series Fund, Diversified Bond Portfolio		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		-0.71	%		9.50	%		6.28	%
Barclays U.S. Aggregate Bond Index		-2.02			4.44			4.55

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the Diversified Bond Portfolio declined by 0.71%.

The Portfolio is subadvised by Prudential Investment Management, Inc. The Portfolio’s investment objective is a high level of income over a longer term while providing reasonable safety of capital.

For the most part, the fixed-income markets were a challenging place to be in 2013, particularly the most rate-sensitive sectors. U.S. Treasury yields began a steep ascent in mid-May, after the Federal Reserve (Fed) indicated that it could begin to scale back its massive quantitative easing (QE) program later in the year, if warranted by the economic data. The rise in yields was briefly interrupted in September, after the Fed surprised the markets by postponing action on QE. However, improving economic data brought consideration of tapering QE back to the front burner late in the year, and the Fed finally pulled the trigger in December, announcing a $10 billion-per-month reduction of its bond-buying campaign. Consequently, Treasury yields finished the year near their highs, and government bond prices struggled, especially those with longer maturities. The yield of the bellwether 10-year Treasury note ended the year at 3.14%, versus just 1.78% on the final day of 2012. However, other fixed-income sectors, such as high-yield corporate bonds, short-term investment-grade corporates, and bank loans, finished the year with positive returns.

The Portfolio outperformed its benchmark, the Barclays U.S. Aggregate Bond Index (the Index), which declined by 2.02%. Security selection was the largest contributor to performance, adding value in all but the second quarter. The most notable successes here were in subprime non-agency mortgage backed securities (MBS), high-yield and investment-grade corporates, and emerging markets (EM) bonds.

Sector allocation was also a contributor to performance. The fund benefited from positions in a number of non-benchmark sectors — most notably, high-yield bonds and bank loans, both of which delivered positive returns — and from an underweighting in U.S. Treasury securities. An allocation to EM debt detracted from performance for the year overall, although a stronger second half of the year partially offset losses in the first half for this group.

Non-dollar exposure detracted from performance results for the full year, most notably from January through early July, when there was a strong rally in the U.S. dollar. Subsequently, the dollar reversed its strengthening trend due to the postponement of the anticipated QE taper and expectations of successful budget and debt ceiling negotiations around the end of the third quarter.

Duration and curve positioning detracted from performance. The Portfolio’s longer-duration bias had a negative impact for much of the May through August period, when rates climbed steadily, but contributed in September and October, after the Fed made its no-taper call, and was a positive contributor for the third quarter as a whole.

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

Barclays 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		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio: Class I		33.53	%		17.77	%		7.77	%
Portfolio: Class II		32.99			17.30			7.34
Russell 1000^® Index		33.11			18.59			7.78
S&P 500 Index		32.37			17.93			7.40

$10,000 INVESTED OVER 10 YEARS¹

LOGO

The Russell 1000^® Index is a trademark/service mark of the Frank Russell Company. Russell^® is a trademark of the Frank Russell Company.

For the year ended December 31, 2013, the Equity Portfolio Class I shares returned 33.53% and Class II shares returned 32.99%.

The Portfolio’s investment objective is long-term growth of capital. It is subadvised by Jennison Associates LLC (Jennison).

The U.S. equity markets, as measured by the broad market indexes, realized substantial gains for the year. The S&P 500 Index (the “Index”) rose 32.37%, with double-digit gains in all sectors. Consumer discretionary, healthcare, and industrials had the strongest returns; those in telecommunication services and utilities were more modest. The Portfolio performed in line with the Index.

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

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 an unmanaged 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.

Jennison Associates LLC is a registered investment adviser and a Prudential Financial company.


The Prudential Series Fund, Flexible Managed Portfolio		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		20.15	%		13.82	%		7.05	%
Blended Index		17.67			12.46			6.38
S&P 500 Index		32.37			17.93			7.40

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ending December 31, 2013, the Flexible Managed Portfolio returned a 20.15%.

Historically strong equity market gains drove the Portfolio’s gain, despite a weak year for fixed income markets. The Portfolio topped its benchmark with the tactical asset allocation decision to overweight stocks all year combining with solid active returns in equities and fixed income to deliver value-added to the portfolio. In addition, cutting bond allocations and adding to cash helped returns in the second half of 2013 as bond yields rose, prices fell, and bonds slipped to negative returns.

Despite repeated calls by some in the media for a correction in equity prices throughout 2013 and despite periodic chaos in Washington, the S&P 500 went nearly straight up in 2013, providing a total return over 30% without even one 5% pullback. The evidence mounted throughout the year that the U.S. economy was finally gaining some traction and breaking out of its weak, 2% average annual GDP growth pattern that prevailed since 2009. By Q3, a reduced fiscal drag, recovery in housing, autos and other consumer goods, a highly stimulative Federal Reserve policy, contributions from a revived U.S. energy sector and inventory accumulation resulted in a strong 4.1% GDP growth. Although there is no guarantee that growth will continue at this robust pace, consensus expectations have been rising closer to the 3%+ average of the post-war period after wallowing for years at 2% or worse.

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 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 three 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		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		27.29	%		15.57	%		7.06	%
MSCI World Index (GD)		27.37			15.68			7.56

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the Global Portfolio rose 27.29%.

The Portfolio seeks long-term growth of capital by investing in stocks, with about half of its assets invested in companies in the United States and half in companies located abroad. The Portfolio is co-managed by five subadvisers: Brown Advisory (Brown), LLC, (U.S. growth stocks), T. Rowe Price Associates, Inc. (U.S. value stocks), William Blair & Company LLC (international growth stocks), LSV Asset Management (international value stocks), and Quantitative Management Associates LLC. Brown replaced Marsico Capital Management, LLC early in 2013.

The MSCI World Index (GD) (the Index) rose 27.37%. Over the course of the year, investors came to realize that the economies of developed countries were in a sustained, albeit slow, recovery and that of these the United States was growing most rapidly. Nonetheless, the U.S. Federal Reserve was not going to allow interest rates to rise sharply and choke off the recovery. This set the stage for very strong domestic stock markets and sound international markets. The broad U.S. stock market, represented by the Russell 3000 Index, returned 33.55%, while the MSCI EAFE Index of other developed countries was about 10 percentage points lower, still a very good return.

The LSV International Value segment was the top contributor to the Portfolio’s performance relative to the Index due to strong stock selection in the financials, materials, and energy sectors. The Portfolio was also helped by an overweight in France compared with the Index, but hurt by an underweight in Japan, both of which had above-average returns for the international developed country markets.

The international growth segment of the Portfolio, managed by William Blair & Company, underperformed its target, primarily because of poor stock selection in the healthcare, consumer staples, and energy sectors. This was partially offset by good stock selection within the technology and consumer discretionary sectors.

None of the four subadvisers use derivative instruments as a principal investment strategy. The types of derivatives employed most often are stock futures contracts (to help manage cash flows in the Portfolio) and currency forwards and futures contracts (to hedge a portion of the Portfolio’s currency exposure).

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. Russell 3000 Index, an unmanaged market cap-weighted index that measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. MSCI EAFE (Morgan Stanley Capital International Europe, Australasia, Far East) Index, an unmanaged capitalization-weighted index generally accepted as a benchmark for major overseas markets. 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		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		-2.34	%		4.65	%		4.26	%
Barclays Government Bond Index		-2.60			2.26			4.14

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the Government Income Portfolio returned -2.34%.

The Portfolio is subadvised by Prudential Investment Management, Inc., and its investment objective is a high level of income over the long term consistent with the preservation of capital.

U.S. Treasury yields began a steep ascent in mid-May, after the Federal Reserve (Fed) indicated that it could begin to scale back its massive quantitative easing (QE) program later in the year, if warranted by the economic data. The rise in yields was briefly interrupted in September, after the Fed surprised the markets by postponing action on QE. However, improving economic data brought consideration of tapering QE back to the front burner late in the year, and the Fed finally pulled the trigger in December, announcing a $10 billion-per-month reduction of its bond-buying campaign. Consequently, Treasury yields finished the year near their highs, and government bond prices struggled, especially those with longer maturities. The yield of the bellwether 10-year Treasury note ended the year at 3.14%, versus just 1.78% on the final day of 2012.

The Portfolio outperformed its benchmark, the Barclays Government Bond Index (the Index). Sector allocation was the primary driver of performance. U.S. Treasuries were outperformed by most other high-quality fixed-income sectors, including commercial mortgage-backed securities (CMBS) and agency mortgages. Consequently, the Portfolio’s overweights in these high-quality sectors and its underweighting in Treasuries contributed to performance versus the index.

Security selection also contributed to performance, most notably within mortgage-backed securities. The Portfolio was overweight in CMBS and agency mortgages. Investment grade corporate bonds were an out-of-benchmark position.

The Portfolio’s exposure to the Prudential Core Short-Term Bond Fund was a key contributor to performance, as this Fund’s net asset value rose throughout much of the year.

These positive factors were modestly offset by security selection within the CMBS and MBS sectors, as the Portfolio had a higher-quality bias at a time when securities of lower credit quality performed best.

Tactical duration strategies and yield curve positioning that were partially implemented via interest rate swaps (derivatives) modestly benefited performance. (Duration measures the approximate price change of a bond portfolio for a given change in interest rates.)

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

Barclays Government Bond Index is a weighted unmanaged index comprised of securities issued or backed by the U.S. Government, its agencies, and instrumentalities with a remaining maturity of one to 30 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		December 31, 2013

Investment Manager’s Report - As of December 31, 2013


Average Annual Total Returns	1-Year			5-Year			10-Year
Portfolio		31.89	%		17.58	%		7.11	%
S&P 500 Index		32.37			17.93			7.40

$10,000 INVESTED OVER 10 YEARS

LOGO

For the year ended December 31, 2013, the Prudential Stock Index Portfolio returned 31.89%.

Quantitative Management Associates LLC subadvises the Portfolio which is an index fund that uses a risk-controlled quantitative approach that seeks to effectively track the performance of its benchmark, the S&P 500 Index (the “Index”). While Prudential is one of the components of the S&P 500, the Portfolio cannot hold shares of Prudential Financial, Inc. because of compliance restrictions. The Portfolio’s investment objective is to achieve investment results that generally correspond to the performance of publicly traded common stocks.

Potential tracking error differences, brokerage costs, as well as other costs and expenses of the Portfolio, may cause its return to be lower than that of the Index. In 2013, the Portfolio modestly underperformed the Index which returned 32.37%.

U.S. market performance was strong in 2013. The market was buoyed by steady, albeit moderate, growth in the U.S. economy, positive news on the employment front, a more conciliatory environment in Washington regarding the budget, and a Federal Reserve that continues to be accommodative although a measured tapering of its bond-buying program was announced shortly before the period ended. In this environment, investors were willing to hold riskier assets in their portfolio in lieu of more defensive, stable, high quality assets.

All sectors in the Index finished the year firmly in positive territory. Cyclical sectors outperformed led by consumer discretionary, healthcare and industrials. Interest rate sensitive sectors including utilities and telecommunication services trailed although both posted double-digit returns. Lower quality stocks outperformed higher quality as investors became more comfortable with holding riskier assets. Small-capitalization stocks outperformed mid- and large-capitalization stocks. Often during a recovery, stocks of smaller firms, and particularly rapidly growing smaller firms, lead the markets.

The Portfolio uses derivative instruments, though not as a principal investment strategy. It had a small position in futures contracts on the S&P 500 Index to help enhance the Portfolio’s liquidity. This exposure did not have a material impact on performance.

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, 2013

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, 2013 through December 31, 2013.

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, 2013		Ending Account Value December 31, 2013		Annualized Expense Ratio based on the Six-Month period			Expenses Paid During the Six-Month period*
Conservative Balanced (Class I)	Actual	$	1,000.00	$	1,093.80		0.59	%	$	3.11
	Hypothetical	$	1,000.00	$	1,022.23		0.59	%	$	3.01
Diversified Bond (Class I)	Actual	$	1,000.00	$	1,019.10		0.45	%	$	2.29
	Hypothetical	$	1,000.00	$	1,022.94		0.45	%	$	2.29
Equity (Class I)	Actual	$	1,000.00	$	1,197.70		0.48	%	$	2.66
	Hypothetical	$	1,000.00	$	1,022.79		0.48	%	$	2.45
Equity (Class II)	Actual	$	1,000.00	$	1,195.40		0.88	%	$	4.87
	Hypothetical	$	1,000.00	$	1,020.77		0.88	%	$	4.48
Flexible Managed (Class I)	Actual	$	1,000.00	$	1,113.70		0.63	%	$	3.36
	Hypothetical	$	1,000.00	$	1,022.03		0.63	%	$	3.21
Global (Class I)	Actual	$	1,000.00	$	1,168.40		0.83	%	$	4.54
	Hypothetical	$	1,000.00	$	1,021.02		0.83	%	$	4.23
Government Income (Class I)	Actual	$	1,000.00	$	998.80		0.49	%	$	2.47
	Hypothetical	$	1,000.00	$	1,022.74		0.49	%	$	2.50
Stock Index (Class I)	Actual	$	1,000.00	$	1,160.70		0.32	%	$	1.74
	Hypothetical	$	1,000.00	$	1,023.59		0.32	%	$	1.63

* 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, 2013, and divided by the 365 days in the Portfolio’s fiscal year ended December 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Portfolio may invest.


LONG-TERM INVESTMENTS — 84.7%
COMMON STOCKS — 58.0%	Shares		Value (Note 2)
Aerospace & Defense — 1.5%
BAE Systems PLC (United Kingdom)		2,343	$	16,869
Boeing Co. (The)		53,700		7,329,513
General Dynamics Corp.		26,000		2,484,300
Honeywell International, Inc.		59,912		5,474,159
L-3 Communications Holdings, Inc.		6,700		715,962
Lockheed Martin Corp.		20,800		3,092,128
Northrop Grumman Corp.		17,062		1,955,476
Precision Castparts Corp.		11,400		3,070,020
Raytheon Co.		24,200		2,194,940
Rockwell Collins, Inc.		10,800		798,336
Safran SA (France)		16,951		1,178,582
Textron, Inc.		23,100		849,156
Thales SA (France)		15,336		988,310
United Technologies Corp.		65,400		7,442,520

				37,590,271

Air Freight & Logistics — 0.4%
C.H. Robinson Worldwide, Inc.		13,200		770,088
Deutsche Post AG (Germany)		16,244		593,314
Expeditors International of Washington, Inc.		15,000		663,750
FedEx Corp.		23,000		3,306,710
TNT Express NV (Netherlands)		1,542		14,343
United Parcel Service, Inc. (Class B Stock)		55,400		5,821,432

				11,169,637

Airlines — 0.2%
Delta Air Lines, Inc.		66,600		1,829,502
easyJet PLC (United Kingdom)		40,771		1,039,136
International Consolidated Airlines Group SA (United Kingdom)*		11,917		79,383
Southwest Airlines Co.		59,700		1,124,748

				4,072,769

Auto Components — 0.3%
Aisin Seiki Co. Ltd. (Japan)		2,500		101,640
BorgWarner, Inc.		17,400		972,834
Bridgestone Corp. (Japan)		3,300		125,027
Continental AG (Germany)		58		12,742
Delphi Automotive PLC (United Kingdom)		23,300		1,401,029
Denso Corp. (Japan)		22,900		1,209,777
Goodyear Tire & Rubber Co. (The)		18,000		429,300
Johnson Controls, Inc.		52,200		2,677,860
NGK Spark Plug Co. Ltd. (Japan)		2,000		47,401
Toyota Industries Corp. (Japan)		2,100		94,930
Valeo SA (France)		8,878		983,876

				8,056,416

Automobiles — 0.7%
Bayerische Motoren Werke AG (Germany)		2,802		329,048
Daimler AG (Germany)		23,282		2,020,524
Fiat SpA (Italy)*		113,220		926,701
Ford Motor Co.		310,085		4,784,612
Fuji Heavy Industries Ltd. (Japan)		38,300		1,100,702
General Motors Co.*		79,500		3,249,165
Harley-Davidson, Inc.		18,400		1,274,016


COMMON STOCKS (continued)	Shares		Value (Note 2)
Automobiles (continued)
Honda Motor Co. Ltd. (Japan)		1,200	$	49,533
Toyota Motor Corp. (Japan)		36,000		2,195,103
Suzuki Motor Corp. (Japan)		3,400		91,619
Volkswagen AG (Germany)		1,884		511,542

				16,532,565

Beverages — 1.3%
Anheuser-Busch InBev NV (Belgium)		17,161		1,824,843
Asahi Group Holdings Ltd. (Japan)		4,900		138,276
Beam, Inc.		12,100		823,526
Brown-Forman Corp. (Class B Stock)		13,650		1,031,531
Coca-Cola Co. (The)		295,200		12,194,712
Coca-Cola Enterprises, Inc.		21,400		944,382
Coca-Cola West Co. Ltd. (Japan)		800		16,944
Constellation Brands, Inc. (Class A Stock)*		13,000		914,940
Diageo PLC (United Kingdom)		30,203		1,000,889
Dr. Pepper Snapple Group, Inc.		15,000		730,800
Heineken Holding NV (Netherlands)		5,808		367,646
Heineken NV (Netherlands)		966		65,289
Kirin Holdings Co. Ltd. (Japan)		11,000		158,416
Molson Coors Brewing Co. (Class B Stock)		13,300		746,795
Monster Beverage Corp.*		11,200		759,024
PepsiCo, Inc.		119,407		9,903,617
SABMiller PLC (United Kingdom)		18,473		950,904

				32,572,534

Biotechnology — 1.3%
Actelion Ltd. (Switzerland)		4,003		339,538
Alexion Pharmaceuticals, Inc.*		15,700		2,089,042
Amgen, Inc.		58,287		6,654,044
Biogen Idec, Inc.*		18,490		5,172,578
Celgene Corp.*		31,500		5,322,240
Gilead Sciences, Inc.*		118,500		8,905,275
Regeneron Pharmaceuticals, Inc.*(a)		5,800		1,596,392
Vertex Pharmaceuticals, Inc.*		17,900		1,329,970

				31,409,079

Building Products — 0.1%
Allegion PLC*		7,433		328,479
Assa Abloy AB (Sweden) (Class B Stock)		6,545		346,519
Daikin Industries Ltd. (Japan)		3,000		187,208
LIXIL Group Corp. (Japan)		3,500		96,083
Masco Corp.		29,500		671,715
TOTO Ltd. (Japan)		63,000		999,252

				2,629,256

Capital Markets — 1.3%
Aberdeen Asset Management PLC (United Kingdom)		119,405		992,937
Ameriprise Financial, Inc.		16,320		1,877,616
Bank of New York Mellon Corp. (The)		88,658		3,097,711
BlackRock, Inc.		9,800		3,101,406
Charles Schwab Corp. (The)		86,750		2,255,500
Daiwa Securities Group, Inc. (Japan)		81,000		811,259
ETRADE Financial Corp.		25,520		501,213
Franklin Resources, Inc.		30,100		1,737,673

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Capital Markets (continued)
Goldman Sachs Group, Inc. (The)		32,200	$	5,707,772
Invesco Ltd. (Bermuda)		36,600		1,332,240
Investec PLC (United Kingdom)		96,704		702,343
Legg Mason, Inc.(a)		10,200		443,496
Macquarie Group Ltd.		19,708		967,319
Morgan Stanley		107,380		3,367,437
Northern Trust Corp.		17,000		1,052,130
State Street Corp.		33,900		2,487,921
T. Rowe Price Group, Inc.		21,500		1,801,055
UBS AG (Switzerland)		1,832		35,078

				32,272,106

Chemicals — 1.5%
Air Products & Chemicals, Inc.		15,400		1,721,412
Air Water, Inc. (Japan)		2,000		27,106
Airgas, Inc.		4,600		514,510
Asahi Kasei Corp. (Japan)		128,000		1,004,009
BASF SE (Germany)		12,682		1,353,605
CF Industries Holdings, Inc.		4,600		1,071,984
Daicel Corp. (Japan)		58,000		472,689
Dow Chemical Co. (The)		91,331		4,055,096
E.I. du Pont de Nemours & Co.		72,720		4,724,618
Eastman Chemical Co.		12,700		1,024,890
Ecolab, Inc.		20,400		2,127,108
EMS-Chemie Holding AG (Switzerland)		1,818		648,251
FMC Corp.		11,500		867,790
International Flavors & Fragrances, Inc.		6,500		558,870
K+S AG (Germany)(a)		18,030		555,554
Kaneka Corp. (Japan)		4,000		26,265
Kuraray Co. Ltd. (Japan)		1,800		21,486
LyondellBasell Industries NV (Netherlands) (Class A Stock)		34,300		2,753,604
Mitsubishi Chemical Holdings Corp. (Japan)		3,500		16,197
Monsanto Co.		40,994		4,777,851
Mosaic Co. (The)		26,100		1,233,747
Nippon Paint Co. Ltd. (Japan)		2,000		33,276
Orica Ltd. (Australia)		4,786		102,342
PPG Industries, Inc.		10,700		2,029,362
Praxair, Inc.		22,600		2,938,678
Sherwin-Williams Co. (The)		7,200		1,321,200
Sigma-Aldrich Corp.		8,900		836,689
Yara International ASA (Norway)		22,944		989,534

				37,807,723

Commercial Banks — 2.4%
Australia & New Zealand Banking Group Ltd. (Australia)		66,078		1,907,548
Banco Bilbao Vizcaya Argentaria SA (Spain)		34,992		432,872
Banco Santander SA (Spain)		161,684		1,453,949
Bank Hapoalim BM (Israel)		171,951		963,458
Bank of East Asia Ltd. (Hong Kong)		77,200		327,717
Bank of Yokohama Ltd. (The) (Japan)		15,000		83,688
BB&T Corp.		56,400		2,104,848
BNP Paribas SA (France)		1,175		91,659
BOC Hong Kong Holdings Ltd. (China)		49,000		157,371


COMMON STOCKS (continued)	Shares		Value (Note 2)
Commercial Banks (continued)
Comerica, Inc.		15,300	$	727,362
Commonwealth Bank of Australia (Australia)		32,517		2,265,683
DNB ASA (Norway)		62,590		1,123,375
Fifth Third Bancorp		63,521		1,335,847
Fukuoka Financial Group, Inc. (Japan)		10,000		43,894
Hang Seng Bank Ltd. (Hong Kong)		56,000		909,527
HSBC Holdings PLC (United Kingdom)		323,929		3,554,864
Huntington Bancshares, Inc.		68,536		661,372
Iyo Bank Ltd. (The) (Japan)		3,400		33,357
Joyo Bank Ltd. (The) (Japan)		9,000		46,019
KBC Groep NV (Belgium)		12,755		725,195
KeyCorp		76,800		1,030,656
Lloyds Banking Group PLC (United Kingdom)*		337,815		443,279
M&T Bank Corp.		10,700		1,245,694
Mitsubishi UFJ Financial Group, Inc. (Japan)		299,100		1,985,844
Mizrahi Tefahot Bank Ltd. (Israel)		1,636		21,414
Mizuho Financial Group, Inc. (Japan)		297,400		645,665
National Australia Bank Ltd. (Australia)		5,195		162,146
Nishi-Nippon City Bank Ltd. (The) (Japan)		9,000		24,245
PNC Financial Services Group, Inc.		41,133		3,191,098
Regions Financial Corp.		115,103		1,138,369
Resona Holdings, Inc. (Japan)		97,800		499,021
Skandinaviska Enskilda Banken AB (Sweden) (Class A Stock)		91,124		1,203,864
Sumitomo Mitsui Financial Group, Inc. (Japan)		33,700		1,752,514
Sumitomo Mitsui Trust Holdings, Inc. (Japan)		42,000		222,231
SunTrust Banks, Inc.		40,900		1,505,529
Suruga Bank Ltd. (Japan)		1,000		17,957
Swedbank AB (Sweden) (Class A Stock)		14,776		416,230
UniCredit SpA (Italy)		55,966		412,843
US Bancorp		140,685		5,683,674
Wells Fargo & Co.		374,064		16,982,506
Westpac Banking Corp. (Australia)		63,233		1,833,035
Yamaguchi Financial Group, Inc. (Japan)		3,000		27,820
Zions Bancorporation(a)		15,550		465,878

				59,861,117

Commercial Services & Supplies — 0.3%
ADT Corp. (The)(a)		15,700		635,379
Babcock International Group PLC (United Kingdom)		14,357		322,604
Cintas Corp.(a)		8,900		530,351
Dai Nippon Printing Co. Ltd. (Japan)		7,000		74,355
Iron Mountain, Inc.		14,685		445,690
Pitney Bowes, Inc.(a)		15,400		358,820
Republic Services, Inc.		22,065		732,558
Secom Co. Ltd. (Japan)		2,700		162,904
Stericycle, Inc.*		6,900		801,573
Toppan Printing Co. Ltd. (Japan)		7,000		56,032

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares			Value (Note 2)
Commercial Services & Supplies (continued)
Tyco International Ltd. (Switzerland)		32,900		$	1,350,216
Waste Management, Inc.		31,342			1,406,316

					6,876,798

Communications Equipment — 0.9%
Cisco Systems, Inc.		416,100			9,341,445
F5 Networks, Inc.*(a)		7,000			636,020
Harris Corp.		9,400			656,214
Juniper Networks, Inc.*		38,200			862,174
Motorola Solutions, Inc.		18,489			1,248,008
Nokia OYJ (Finland)*		49,587			400,665
QUALCOMM, Inc.		132,800			9,860,400

					23,004,926

Computers & Peripherals — 2.1%
Apple, Inc.		70,120			39,345,033
EMC Corp.		161,350			4,057,953
Hewlett-Packard Co.		146,448			4,097,615
NetApp, Inc.		26,300			1,081,982
SanDisk Corp.(a)		18,600			1,312,044
Seagate Technology PLC (Ireland)		25,600			1,437,696
Western Digital Corp.		15,600			1,308,840

					52,641,163

Construction & Engineering — 0.2%			��
ACS Actividades de Construccion y Servicios SA (Spain)		20,329			700,773
Bouygues SA (France)		25,831			976,824
Fluor Corp.		12,600			1,011,654
Hochtief AG (Germany)		402			34,404
Jacobs Engineering Group, Inc.*		11,300			711,787
JGC Corp. (Japan)		1,000			39,244
Leighton Holdings Ltd. (Australia)		2,199			31,757
Quanta Services, Inc.*		16,700			527,052
Vinci SA (France)		7,842			515,467

					4,548,962

Construction Materials
Imerys SA (France)		2,771			241,211
Vulcan Materials Co.		11,600			689,272

					930,483

Consumer Finance — 0.5%
American Express Co.		71,400			6,478,122
Capital One Financial Corp.		45,261			3,467,445
Discover Financial Services		35,840			2,005,248
SLM Corp.		34,100			896,148

					12,846,963

Containers & Packaging — 0.1%
Avery Dennison Corp.		7,600			381,444
Ball Corp.		9,700			501,102
Bemis Co., Inc.		7,800			319,488
MeadWestvaco Corp.		12,614			465,835
Owens-Illinois, Inc.*		13,500			483,030
Sealed Air Corp.		17,100			582,255

					2,733,154

Distributors
Genuine Parts Co.		11,900			989,961


COMMON STOCKS (continued)	Shares		Value (Note 2)
Diversified Consumer Services
Graham Holdings Co. (Class B Stock)		400	$	265,328
H&R Block, Inc.		19,800		574,992

				840,320

Diversified Financial Services — 2.7%
Bank of America Corp.		836,821		13,029,303
Berkshire Hathaway, Inc. (Class B Stock)*		139,400		16,527,264
Citigroup, Inc.		236,485		12,323,233
CME Group, Inc.		23,200		1,820,272
Exor SpA (Italy)		2,394		95,152
IntercontinentalExchange, Inc.		9,071		2,040,249
Investor AB (Sweden) (Class B Stock)		32,438		1,117,929
JPMorgan Chase & Co.		293,345		17,154,816
Leucadia National Corp.		23,400		663,156
McGraw-Hill Financial, Inc.		22,700		1,775,140
Moody’s Corp.		16,000		1,255,520
NASDAQ OMX Group, Inc. (The)		7,600		302,480
ORIX Corp. (Japan)		16,700		293,450
Pohjola Bank PLC (Finland) (Class A Stock)		1,826		36,613

				68,434,577

Diversified Telecommunication Services — 1.3%
AT&T, Inc.		412,268		14,495,343
Bezeq the Israeli Telecommunication Corp. Ltd. (Israel)		57,945		98,267
BT Group PLC (United Kingdom)		240,642		1,517,482
CenturyLink, Inc.		47,436		1,510,837
Deutsche Telekom AG (Germany)		15,432		265,897
Frontier Communications Corp.		78,990		367,304
Nippon Telegraph & Telephone Corp. (Japan)		21,400		1,152,613
Swisscom AG (Switzerland)		1,898		1,003,081
Telefonica SA (Spain)		1,049		17,152
Telenor ASA (Norway)		27,902		666,679
TeliaSonera AB (Sweden)		137,343		1,145,497
Telstra Corp. Ltd. (Australia)		56,587		265,596
Verizon Communications, Inc.		221,576		10,888,245
Windstream Holdings, Inc.(a)		57,357		457,709

				33,851,702

Electric Utilities — 0.9%
American Electric Power Co., Inc.		38,860		1,816,316
Cheung Kong Infrastructure Holdings Ltd. (Hong Kong)		8,000		50,569
Chubu Electric Power Co., Inc. (Japan)		8,100		104,715
Chugoku Electric Power Co., Inc. (The) (Japan)		3,800		59,167
Duke Energy Corp.		54,661		3,772,156
Edison International		25,200		1,166,760
EDP – Energias de Portugal SA (Portugal)		226,263		831,088
Electricite de France SA (France)		23,622		835,682
Entergy Corp.(a)		13,200		835,164
Exelon Corp.(a)		63,313		1,734,143
FirstEnergy Corp.		31,906		1,052,260

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Electric Utilities (continued)
Hokkaido Electric Power Co., Inc. (Japan)*		2,400	$	27,618
Hokuriku Electric Power Co. (Japan)		2,200		29,877
Iberdrola SA (Spain)		25,090		160,119
Kansai Electric Power Co., Inc. (The) (Japan)*		8,900		102,433
Kyushu Electric Power Co., Inc. (Japan)*		5,500		70,245
NextEra Energy, Inc.		32,700		2,799,774
Northeast Utilities		23,700		1,004,643
Pepco Holdings, Inc.		22,600		432,338
Pinnacle West Capital Corp.		8,100		428,652
PPL Corp.		49,500		1,489,455
Shikoku Electric Power Co., Inc. (Japan)*		2,300		34,492
Southern Co. (The)		67,200		2,762,592
SSE PLC (United Kingdom)		1,118		25,406
Tohoku Electric Power Co., Inc. (Japan)*		5,900		66,465
Tokyo Electric Power Co., Inc. (Japan)*		18,900		93,122
Xcel Energy, Inc.		41,110		1,148,613

				22,933,864

Electrical Equipment — 0.4%
ABB Ltd. (Switzerland)		12,675		335,127
AMETEK, Inc.		19,100		1,005,997
Eaton Corp., PLC (Ireland)		36,237		2,758,360
Emerson Electric Co.		56,200		3,944,116
Fuji Electric Co. Ltd. (Japan)		7,000		32,798
Nidec Corp. (Japan)		1,200		118,218
OSRAM Licht AG (Germany)*		5,509		310,729
Rockwell Automation, Inc.		11,500		1,358,840
Roper Industries, Inc.		8,200		1,137,176

				11,001,361

Electronic Equipment & Instruments
Murata Manufacturing Co. Ltd. (Japan)		12,400		1,102,773

Electronic Equipment, Instruments & Components — 0.3%
Amphenol Corp. (Class A Stock)		12,100		1,079,078
Citizen Holdings Co. Ltd. (Japan)		3,400		28,686
Corning, Inc.		108,200		1,928,124
FLIR Systems, Inc.		11,600		349,160
FUJIFILM Holdings Corp. (Japan)		40,500		1,149,594
Hirose Electric Co. Ltd. (Japan)		400		57,021
Hitachi Ltd. (Japan)		120,000		909,858
Hoya Corp. (Japan)		5,600		155,747
Jabil Circuit, Inc.		13,900		242,416
Keyence Corp. (Japan)		600		256,911
Nippon Electric Glass Co. Ltd. (Japan)		5,000		26,266
Omron Corp. (Japan)		2,700		119,322
TE Connectivity Ltd. (Switzerland)		30,100		1,658,811

				7,960,994

Energy Equipment & Services — 1.0%
Baker Hughes, Inc.		35,598		1,967,145
Cameron International Corp.*		17,200		1,023,916
Diamond Offshore Drilling, Inc.		6,000		341,520
Ensco PLC (Class A Stock)		19,300		1,103,574


COMMON STOCKS (continued)	Shares		Value (Note 2)
Energy Equipment & Services (continued)
FMC Technologies, Inc.*		18,000	$	939,780
Halliburton Co.		65,800		3,339,350
Helmerich & Payne, Inc.(a)		7,600		639,008
Nabors Industries Ltd. (Bermuda)		19,900		338,101
National Oilwell Varco, Inc.		32,800		2,608,584
Noble Corp. PLC		20,900		783,123
Rowan Cos. PLC (United Kingdom) (Class A Stock)*		9,600		339,456
Schlumberger Ltd.		102,418		9,228,886
Seadrill Ltd. (Norway)		6,396		262,137
Transocean Ltd.		4,638		226,982
Transocean Ltd.(a)		25,000		1,235,500

				24,377,062

Food & Staples Retailing — 1.4%
Aeon Co. Ltd. (Japan) (Class A Stock)		7,800		105,742
Carrefour SA (France)		6,514		258,563
Casino Guichard Perrachon SA (France)		8,392		968,323
Costco Wholesale Corp.		33,800		4,022,538
CVS Caremark Corp.		93,648		6,702,387
FamilyMart Co. Ltd. (Japan)		800		36,549
J Sainsbury PLC (United Kingdom)		150,742		912,329
Koninklijke Ahold NV (Netherlands)		60,632		1,089,630
Kroger Co. (The)		37,746		1,492,099
Safeway, Inc.		19,900		648,143
Sysco Corp.		48,600		1,754,460
Wal-Mart Stores, Inc.		126,000		9,914,940
Walgreen Co.		67,300		3,865,712
Wesfarmers Ltd. (Australia)		2,014		79,297
Whole Foods Market, Inc.		29,600		1,711,768
WM Morrison Supermarkets PLC (United Kingdom)		227,272		983,823
Woolworths Ltd. (Australia)		8,760		265,264

				34,811,567

Food Products — 1.0%
Ajinomoto Co., Inc. (Japan)		4,000		57,907
Archer-Daniels-Midland Co.		49,426		2,145,088
Campbell Soup Co.(a)		15,000		649,200
ConAgra Foods, Inc.		31,800		1,071,660
General Mills, Inc.		48,900		2,440,599
Golden Agri-Resources Ltd. (Singapore)		49,000		21,212
Hershey Co. (The)		11,600		1,127,868
Hormel Foods Corp.		8,900		402,013
J.M. Smucker Co. (The)		8,500		880,770
Kellogg Co.		19,700		1,203,079
Kraft Foods Group, Inc.		45,217		2,438,101
Lindt & Spruengli AG (Switzerland)		11		593,128
Lindt & Spruengli AG (Switzerland)		11		49,584
McCormick & Co., Inc.		11,400		785,688
Mead Johnson Nutrition Co.		16,667		1,396,028
Mondelez International, Inc. (Class A Stock)		138,253		4,880,331
Nestle SA (Switzerland)		27,827		2,039,443
Nippon Meat Packers, Inc. (Japan)		2,000		34,375
Suedzucker AG (Germany)		33,768		912,246
Tate & Lyle PLC (United Kingdom)		3,668		49,204

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Food Products (continued)
Tyson Foods, Inc. (Class A Stock)		23,000	$	769,580
Unilever NV (Netherlands)		16,469		662,144
Wilmar International Ltd. (Singapore)		339,000		920,820

				25,530,068

Gas Utilities — 0.1%
AGL Resources, Inc.		8,939		422,189
ONEOK, Inc.		16,000		994,880

				1,417,069

Healthcare Equipment & Supplies — 1.1%
Abbott Laboratories		121,000		4,637,930
Baxter International, Inc.		41,700		2,900,235
Becton Dickinson and Co.		15,300		1,690,497
Boston Scientific Corp.*		113,067		1,359,065
C.R. Bard, Inc.		5,800		776,852
CareFusion Corp.*		17,675		703,819
Covidien PLC (Ireland)		34,800		2,369,880
DENTSPLY International, Inc.		11,200		542,976
Edwards Lifesciences Corp.*		8,800		578,688
Intuitive Surgical, Inc.*		3,300		1,267,464
Medtronic, Inc.		78,700		4,516,593
Smith & Nephew PLC (United Kingdom)		6,315		90,196
St. Jude Medical, Inc.		23,400		1,449,630
Stryker Corp.		21,600		1,623,024
Varian Medical Systems, Inc.*		8,900		691,441
Zimmer Holdings, Inc.		12,900		1,202,151

				26,400,441

Healthcare Providers & Services — 1.1%
Aetna, Inc.		27,469		1,884,099
Alfresa Holdings Corp. (Japan)		500		24,817
AmerisourceBergen Corp.		17,900		1,258,549
Cardinal Health, Inc.		24,750		1,653,548
CIGNA Corp.		21,500		1,880,820
DaVita HealthCare Partners, Inc.*		14,600		925,202
Express Scripts Holding Co.*		63,749		4,477,730
Fresenius SE & Co. KGaA (Germany)		7,042		1,082,885
Humana, Inc.		12,600		1,300,572
Laboratory Corp. of America Holdings*(a)		7,400		676,138
McKesson Corp.		17,530		2,829,342
Medipal Holdings Corp. (Japan)		53,300		703,638
Patterson Cos., Inc.		9,000		370,800
Quest Diagnostics, Inc.(a)		11,000		588,940
Sonic Healthcare Ltd. (Australia)		30,814		457,293
Tenet Healthcare Corp.*(a)		6,850		288,522
UnitedHealth Group, Inc.		78,700		5,926,110
WellPoint, Inc.		22,300		2,060,297

				28,389,302

Healthcare Technology — 0.1%
Cerner Corp.*		24,400		1,360,056

Hotels, Restaurants & Leisure — 1.0%
Carnival Corp.		34,400		1,381,848
Chipotle Mexican Grill, Inc.*		2,450		1,305,311
Darden Restaurants, Inc.(a)		10,750		584,478
Flight Centre Ltd. (Australia)		718		30,579


COMMON STOCKS (continued)	Shares		Value (Note 2)
Hotels, Restaurants & Leisure (continued)
Galaxy Entertainment Group Ltd. (Hong Kong)*		117,000	$	1,053,382
International Game Technology		17,600		319,616
Marriott International, Inc. (Class A Stock)		17,428		860,246
McDonald’s Corp.		77,400		7,510,122
MGM China Holdings Ltd. (Hong Kong)		144,800		619,725
Oriental Land Co. Ltd. (Japan)		700		100,950
SJM Holdings Ltd. (Hong Kong)		19,000		63,868
Starbucks Corp.		58,200		4,562,298
Starwood Hotels & Resorts Worldwide, Inc.		16,100		1,279,145
TUI Travel PLC (United Kingdom)		96,450		661,112
Wyndham Worldwide Corp.		12,320		907,861
Wynn Resorts Ltd.(a)		6,100		1,184,681
Yum! Brands, Inc.		33,900		2,563,179

				24,988,401

Household Durables — 0.3%
D.R. Horton, Inc.*(a)		22,400		499,968
Garmin Ltd.(a)		8,900		411,358
Harman International Industries, Inc.		4,300		351,955
Iida Group Holdings Co. Ltd. (Japan)*		1,900		37,924
Leggett & Platt, Inc.(a)		11,700		361,998
Lennar Corp. (Class A Stock)(a)		13,900		549,884
Mohawk Industries, Inc.*		2,200		327,580
Newell Rubbermaid, Inc.		23,814		771,812
Panasonic Corp. (Japan)		116,600		1,359,231
Persimmon PLC (United Kingdom)		39,050		802,841
PulteGroup, Inc.		26,822		546,364
Sekisui Chemical Co. Ltd. (Japan)		50,000		613,576
Whirlpool Corp.		6,426		1,007,982

				7,642,473

Household Products — 1.1%
Clorox Co. (The)(a)		10,800		1,001,808
Colgate-Palmolive Co.		69,500		4,532,095
Kimberly-Clark Corp.		29,700		3,102,462
Procter & Gamble Co. (The)		212,025		17,260,955
Reckitt Benckiser Group PLC (United Kingdom)		9,058		719,534
Svenska Cellulosa AB (Sweden) (Class B Stock)		20,055		617,852

				27,234,706

Independent Power Producers & Energy Traders — 0.1%
AES Corp.		44,500		645,695
Electric Power Development Co. Ltd. (Japan)		1,500		43,735
NRG Energy, Inc.		22,100		634,712

				1,324,142

Industrial Conglomerates — 1.4%
3M Co.		50,500		7,082,625
Danaher Corp.		46,300		3,574,360
General Electric Co.		785,200		22,009,156
Hutchison Whampoa Ltd. (Hong Kong)		97,000		1,321,699
Siemens AG (Germany)		2,536		347,734

				34,335,574

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Insurance — 1.9%
ACE Ltd. (Switzerland)		28,100	$	2,909,193
Aegon NV (Netherlands)		57,261		542,638
Aflac, Inc.		38,400		2,565,120
Ageas (Belgium)		13,350		569,294
Allianz SE (Germany)		6,006		1,080,638
Allstate Corp. (The)		38,300		2,088,882
American International Group, Inc.		114,339		5,837,006
Aon PLC		25,400		2,130,806
Assurant, Inc.		8,400		557,508
AXA SA (France)		47,516		1,323,213
Baloise Holding AG (Switzerland)		622		79,314
Chubb Corp. (The)		21,300		2,058,219
Cincinnati Financial Corp.(a)		11,237		588,482
Genworth Financial, Inc. (Class A Stock)*		47,000		729,910
Hannover Rueckversicherung AG (Germany)		10,975		943,533
Hartford Financial Services Group, Inc. (The)		34,600		1,253,558
Insurance Australia Group Ltd. (Australia)		28,725		149,560
Legal & General Group PLC (United Kingdom)		328,047		1,212,618
Lincoln National Corp.		20,118		1,038,491
Loews Corp.		23,275		1,122,786
Marsh & McLennan Cos., Inc.		45,400		2,195,544
MetLife, Inc.		86,700		4,674,864
Muenchener Rueckversicherungs AG (Germany)		6,195		1,366,436
NKSJ Holdings, Inc. (Japan)		1,300		36,184
Principal Financial Group, Inc.		23,600		1,163,716
Progressive Corp. (The)		42,000		1,145,340
Prudential PLC (United Kingdom)		28,777		642,997
Sampo OYJ (Finland) (Class A Stock)		18,369		902,888
Swiss Re AG (Switzerland)		14,137		1,303,268
Torchmark Corp.		9,750		761,963
Travelers Cos., Inc. (The)		29,235		2,646,937
Unum Group		25,410		891,383
XL Group PLC (Ireland)		21,700		690,928
Zurich Insurance Group AG (Switzerland)		1,129		327,482

				47,530,699

Internet & Catalog Retail — 0.8%
Amazon.com, Inc.*		28,700		11,445,273
Expedia, Inc.		8,150		567,729
Netflix, Inc.*		4,700		1,730,399
priceline.com, Inc.*		3,900		4,533,360
TripAdvisor, Inc.*(a)		8,250		683,348

				18,960,109

Internet Software & Services — 1.6%
Akamai Technologies, Inc.*(a)		14,700		693,546
eBay, Inc.*		88,700		4,868,743
Facebook, Inc. (Class A Stock)*		124,900		6,827,034
Google, Inc. (Class A Stock)*		21,690		24,308,200
United Internet AG (Germany)		18,292		779,792
VeriSign, Inc.*(a)		9,600		573,888
Yahoo!, Inc.*		72,500		2,931,900

				40,983,103


COMMON STOCKS (continued)	Shares		Value (Note 2)
IT Services — 1.9%
Accenture PLC (Ireland) (Class A Stock)		50,300	$	4,135,666
Alliance Data Systems Corp.*(a)		2,300		604,739
Amadeus IT Holding SA (Spain) (Class A Stock)		13,276		568,684
Automatic Data Processing, Inc.		37,200		3,006,132
Cap Gemini SA (France)		15,225		1,030,514
Cognizant Technology Solutions Corp. (Class A Stock)*		22,700		2,292,248
Computer Sciences Corp.		12,500		698,500
Computershare Ltd. (Australia)		2,348		23,927
Fidelity National Information Services, Inc.		24,100		1,293,688
Fiserv, Inc.*		21,400		1,263,670
International Business Machines Corp.		79,700		14,949,329
MasterCard, Inc. (Class A Stock)		7,950		6,641,907
Otsuka Corp. (Japan)		1,300		166,080
Paychex, Inc.		24,500		1,115,485
Teradata Corp.*(a)		11,400		518,586
Total System Services, Inc.		15,596		519,035
Visa, Inc. (Class A Stock)		40,000		8,907,200
Western Union Co. (The)		45,210		779,873

				48,515,263

Leisure Equipment & Products — 0.1%
Hasbro, Inc.(a)		9,900		544,599
Mattel, Inc.		27,151		1,291,845
Namco Bandai Holdings, Inc. (Japan)		2,300		51,066

				1,887,510

Life Sciences Tools & Services — 0.3%
Agilent Technologies, Inc.		27,314		1,562,088
Life Technologies Corp.*		14,301		1,084,016
PerkinElmer, Inc.		10,100		416,423
Thermo Fisher Scientific, Inc.(a)		27,700		3,084,395
Waters Corp.*		7,300		730,000

				6,876,922

Machinery — 1.0%
Atlas Copco AB (Sweden) (Class A Stock)		6,382		177,203
Atlas Copco AB (Sweden) (Class B Stock)		5,174		131,530
Caterpillar, Inc.		49,900		4,531,419
Cummins, Inc.		12,800		1,804,416
Deere & Co.		29,100		2,657,703
Dover Corp.		13,500		1,303,290
Flowserve Corp.		10,600		835,598
GEA Group AG (Germany)		4,399		209,769
Hino Motors Ltd. (Japan)		60,000		945,165
IHI Corp. (Japan)		17,000		73,519
Illinois Tool Works, Inc.		31,400		2,640,112
Ingersoll-Rand PLC (Ireland)		22,300		1,373,680
Joy Global, Inc.(a)		6,600		386,034
Kone OYJ (Finland) (Class B Stock)		524		23,632
Kubota Corp. (Japan)		14,000		232,221
Mitsubishi Heavy Industries Ltd. (Japan)		40,000		247,743
PACCAR, Inc.		25,543		1,511,379

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Machinery (continued)
Pall Corp.		9,600	$	819,360
Parker Hannifin Corp.		11,065		1,423,402
Pentair Ltd. (Switzerland)		16,277		1,264,235
Snap-on, Inc.		4,800		525,696
Stanley Black & Decker, Inc.		12,897		1,040,659
Xylem, Inc.		15,200		525,920
Yangzijiang Shipbuilding Holdings Ltd. (China)		897,000		844,231

				25,527,916

Marine
A.P. Moeller – Maersk A/S (Denmark) (Class A Stock)		7		72,107
A.P. Moeller – Maersk A/S (Denmark) (Class B Stock)		86		930,688

				1,002,795

Media — 2.0%
Cablevision Systems Corp. (Class A Stock)(a)		14,900		267,157
CBS Corp. (Class B Stock)		42,934		2,736,613
Comcast Corp. (Class A Stock)		202,490		10,522,393
Dentsu, Inc. (Japan)		2,900		118,606
DIRECTV*		38,900		2,687,601
Discovery Communications, Inc. (Class A Stock)*		19,000		1,717,980
Gannett Co., Inc.		16,800		496,944
Interpublic Group of Cos., Inc. (The)		37,731		667,839
ITV PLC (United Kingdom)		329,701		1,061,031
JCDecaux SA (France)		22,701		937,173
News Corp. (Class A Stock)*		33,075		596,012
Omnicom Group, Inc.		20,200		1,502,274
REA Group Ltd.		12,355		417,321
RTL Group SA (Germany)		504		65,235
Scripps Networks Interactive, Inc. (Class A Stock)		9,200		794,972
Time Warner Cable, Inc.		21,914		2,969,347
Time Warner, Inc.		71,566		4,989,582
Twenty-First Century Fox, Inc. (Class A Stock)		151,500		5,329,770
Viacom, Inc. (Class B Stock)		32,434		2,832,786
Walt Disney Co. (The)		128,600		9,825,040

				50,535,676

Metals & Mining — 0.6%
Alcoa, Inc.(a)		90,540		962,440
Allegheny Technologies, Inc.		9,900		352,737
Anglo American PLC (United Kingdom)		57,926		1,267,735
BHP Billiton Ltd. (Australia)		45,477		1,550,440
BHP Billiton PLC (United Kingdom)		56,068		1,739,794
Cliffs Natural Resources, Inc.(a)		12,700		332,867
Fortescue Metals Group Ltd. (Australia)		187,552		979,736
Freeport-McMoRan Copper & Gold, Inc.		81,988		3,094,227
JFE Holdings, Inc. (Japan)		6,300		150,129
Kobe Steel Ltd. (Japan)*		32,000		54,860
Mitsubishi Materials Corp. (Japan)		82,000		303,109


COMMON STOCKS (continued)	Shares		Value (Note 2)
Metals & Mining (continued)
Newmont Mining Corp.		37,600	$	865,928
Nippon Steel & Sumitomo Metal Corp. (Japan)		98,000		328,673
Nucor Corp.		24,800		1,323,824
Rio Tinto PLC (United Kingdom)		444		25,090
Sumitomo Metal Mining Co. Ltd. (Japan)		41,000		537,235
United States Steel Corp.(a)		14,700		433,650
Voestalpine AG (Austria)		19,359		930,287

				15,232,761

Multi-Utilities — 0.7%
Ameren Corp.		20,000		723,200
CenterPoint Energy, Inc.		33,400		774,212
Centrica PLC (United Kingdom)		95,788		552,376
CMS Energy Corp.		23,000		615,710
Consolidated Edison, Inc.		24,200		1,337,776
Dominion Resources, Inc.		44,732		2,893,713
DTE Energy Co.		13,100		869,709
E.ON AG (Germany)		69,549		1,285,820
GDF Suez (France)		26,655		626,913
Integrys Energy Group, Inc.		6,620		360,194
National Grid PLC (United Kingdom)		116,087		1,518,334
NiSource, Inc.		24,800		815,424
PG&E Corp.		33,900		1,365,492
Public Service Enterprise Group, Inc.		39,400		1,262,376
SCANA Corp.		11,500		539,695
Sempra Energy		18,019		1,617,385
TECO Energy, Inc.(a)		20,500		353,420
Wisconsin Energy Corp.(a)		18,800		777,192

				18,288,941

Multiline Retail — 0.4%
Dollar General Corp.*		22,800		1,375,296
Dollar Tree, Inc.*(a)		16,800		947,856
Family Dollar Stores, Inc.		7,600		493,772
Kohl’s Corp.		16,900		959,075
Macy’s, Inc.		29,174		1,557,892
Next PLC (United Kingdom)		6,385		577,153
Nordstrom, Inc.(a)		12,400		766,320
Takashimaya Co. Ltd. (Japan)		3,000		29,933
Target Corp.		48,900		3,093,903

				9,801,200

Office Electronics — 0.1%
Konica Minolta Holdings, Inc. (Japan)		18,500		184,876
Ricoh Co. Ltd. (Japan)		25,000		265,870
Xerox Corp.		95,663		1,164,219

				1,614,965

Oil, Gas & Consumable Fuels — 4.8%
Anadarko Petroleum Corp.		39,354		3,121,559
Apache Corp.		31,014		2,665,343
BG Group PLC (United Kingdom)		2,059		44,307
BP PLC (United Kingdom)		367,497		2,978,253
Cabot Oil & Gas Corp.		33,700		1,306,212
Chesapeake Energy Corp.(a)		41,800		1,134,452
Chevron Corp.		149,822		18,714,266
ConocoPhillips		94,677		6,688,930

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
CONSOL Energy, Inc.(a)		19,500	$	741,780
Delek Group Ltd. (Israel)		1,515		578,709
Denbury Resources, Inc.*		26,700		438,681
Devon Energy Corp.		28,100		1,738,547
ENI SpA (Italy)		24,463		591,118
EOG Resources, Inc.		21,000		3,524,640
EQT Corp.		11,500		1,032,470
Exxon Mobil Corp.		338,899		34,296,579
Hess Corp.		21,200		1,759,600
Kinder Morgan, Inc.		51,598		1,857,528
Marathon Oil Corp.		52,782		1,863,205
Marathon Petroleum Corp.		24,341		2,232,800
Murphy Oil Corp.		13,700		888,856
Newfield Exploration Co.*		13,900		342,357
Noble Energy, Inc.		28,700		1,954,757
Occidental Petroleum Corp.		62,100		5,905,710
OMV AG (Austria)		19,182		918,065
Peabody Energy Corp.		23,300		455,049
Phillips 66		47,238		3,643,467
Pioneer Natural Resources Co.		10,300		1,895,921
QEP Resources, Inc.		15,500		475,075
Range Resources Corp.		12,100		1,020,151
Repsol SA (Spain)		8,195		206,786
Royal Dutch Shell PLC (United Kingdom) (Class A Stock)		19,046		682,579
Royal Dutch Shell PLC (United Kingdom) (Class B Stock)		57,558		2,171,109
Showa Shell Sekiyu KK (Japan)		76,600		778,630
Southwestern Energy Co.*		29,000		1,140,570
Spectra Energy Corp.		49,162		1,751,150
Tesoro Corp.		11,200		655,200
Total SA (France)		41,433		2,543,145
Valero Energy Corp.		43,300		2,182,320
Williams Cos., Inc. (The)		50,300		1,940,071
Woodside Petroleum Ltd. (Australia)		8,681		302,345
WPX Energy, Inc.*(a)		20,033		408,273

				119,570,565

Paper & Forest Products — 0.1%
International Paper Co.		32,173		1,577,442
OJI Holdings Corp. (Japan)		11,000		56,424

				1,633,866

Personal Products — 0.1%
Avon Products, Inc.		39,200		675,024
Estee Lauder Cos., Inc. (The) (Class A Stock)		18,300		1,378,356

				2,053,380

Pharmaceuticals — 3.6%
AbbVie, Inc.		122,100		6,448,101
Actavis, Inc.*		13,000		2,184,000
Allergan, Inc.		22,300		2,477,084
AstraZeneca PLC (United Kingdom)		6,732		399,391
Bayer AG (Germany)		3,151		442,436
Bristol-Myers Squibb Co.		127,470		6,775,031
Eli Lilly & Co.		76,800		3,916,800
Forest Laboratories, Inc.*		17,600		1,056,528


COMMON STOCKS (continued)	Shares		Value (Note 2)
Pharmaceuticals (continued)
GlaxoSmithKline PLC (United Kingdom)		96,215	$	2,570,636
Hospira, Inc.*(a)		14,860		613,421
Johnson & Johnson		219,148		20,071,765
Merck & Co., Inc.		226,633		11,342,982
Merck KGaA (Germany)		3,822		685,776
Mylan, Inc.*		31,500		1,367,100
Novartis AG (Switzerland)		30,072		2,410,252
Novo Nordisk A/S (Denmark) (Class B Stock)		2,242		410,963
Otsuka Holdings Co. Ltd. (Japan)		35,600		1,027,912
Perrigo Co. PLC		8,300		1,273,718
Pfizer, Inc.		509,570		15,608,129
Roche Holding AG (Switzerland)		12,043		3,373,561
Sanofi (France)		10,170		1,086,108
Shionogi & Co. Ltd. (Japan)		35,600		772,865
Shire PLC (United Kingdom)		13,613		641,546
Taisho Pharmaceutical Holdings Co. Ltd. (Japan)		400		27,495
Teva Pharmaceutical Industries Ltd. (Israel)		19,370		775,021
Zoetis, Inc.		41,300		1,350,097

				89,108,718

Professional Services — 0.1%
Adecco SA (Switzerland)		4,289		340,490
Capita PLC (United Kingdom)		42,072		724,198
Dun & Bradstreet Corp. (The)		2,900		355,975
Equifax, Inc.		10,100		697,809
Nielsen Holdings NV		17,600		807,664
Randstad Holding NV (Netherlands)		3,477		225,634
Robert Half International, Inc.		11,200		470,288

				3,622,058

Real Estate Investment Trusts — 1.0%
American Tower Corp.		29,900		2,386,618
Apartment Investment & Management Co. (Class A Stock)		13,033		337,685
AvalonBay Communities, Inc.		10,075		1,191,167
Boston Properties, Inc.		12,600		1,264,662
CapitaCommercial Trust (Singapore)		501,000		576,973
CapitaMall Trust (Singapore)		32,000		48,427
Dexus Property Group (Australia)		61,408		55,229
Equity Residential(a)		24,100		1,250,067
General Growth Properties, Inc.(a)		35,000		702,450
HCP, Inc.		36,600		1,329,312
Health Care REIT, Inc.(a)		20,200		1,082,114
Host Hotels & Resorts, Inc.(a)		61,982		1,204,930
Japan Retail Fund Investment Corp. (Japan)		30		61,041
Kimco Realty Corp.		33,800		667,550
Link REIT (The) (Hong Kong)		200,500		972,437
Macerich Co. (The)		9,500		559,455
Nippon Building Fund, Inc. (Japan)		18		104,584
Plum Creek Timber Co., Inc.(a)		12,700		590,677
Prologis, Inc.		39,977		1,477,150
Public Storage		10,600		1,595,512
Simon Property Group, Inc.		24,243		3,688,815

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Real Estate Investment Trusts (continued)
Unibail-Rodamco SE (Netherlands)		4,547	$	1,165,216
Ventas, Inc.		21,918		1,255,463
Vornado Realty Trust		14,225		1,263,038
Westfield Retail Trust (Australia)		39,307		104,424
Weyerhaeuser Co.		42,398		1,338,505

				26,273,501

Real Estate Management & Development — 0.1%
CBRE Group, Inc. (Class A Stock)*		24,300		639,090
Daiwa House Industry Co. Ltd. (Japan)		8,000		155,002
Henderson Land Development Co. Ltd. (Hong Kong)		5,000		28,585
Hysan Development Co. Ltd. (Hong Kong)		196,000		846,082
Keppel Land Ltd. (Singapore)		9,000		23,890
Sino Land Co. Ltd. (Hong Kong)		36,000		49,370
Swire Pacific Ltd. (Hong Kong) (Class A Stock)		9,000		105,747
Swiss Prime Site AG (Switzerland)		4,583		354,902
Wheelock & Co. Ltd. (Hong Kong)		15,000		69,103

				2,271,771

Road & Rail — 0.5%
ComfortDelGro Corp. Ltd. (Singapore)		26,000		41,574
CSX Corp.		76,300		2,195,151
East Japan Railway Co. (Japan)		4,300		342,529
Kansas City Southern		9,000		1,114,470
Nippon Express Co. Ltd. (Japan)		10,000		48,406
Norfolk Southern Corp.		23,400		2,172,222
Ryder System, Inc.		4,900		361,522
Union Pacific Corp.		35,900		6,031,200
West Japan Railway Co. (Japan)		7,600		329,296

				12,636,370

Semiconductors & Semiconductor Equipment — 1.0%
Altera Corp.		23,800		774,214
Analog Devices, Inc.		25,700		1,308,901
Applied Materials, Inc.		87,500		1,547,875
Broadcom Corp. (Class A Stock)		45,450		1,347,593
First Solar, Inc.*(a)		5,400		295,056
Intel Corp.		385,800		10,015,368
KLA-Tencor Corp.		11,400		734,844
Lam Research Corp.*		11,650		634,343
Linear Technology Corp.(a)		15,400		701,470
LSI Corp.		44,200		487,084
Microchip Technology, Inc.(a)		16,600		742,850
Micron Technology, Inc.*		81,800		1,779,968
NVIDIA Corp.(a)		47,750		764,955
Rohm Co. Ltd. (Japan)		1,200		58,532
Texas Instruments, Inc.		85,800		3,767,478
Xilinx, Inc.		22,000		1,010,240

				25,970,771

Software — 1.8%
Adobe Systems, Inc.*		35,000		2,095,800
Autodesk, Inc.*		14,900		749,917
CA, Inc.		25,164		846,769
Citrix Systems, Inc.*		15,100		955,075


COMMON STOCKS (continued)	Shares		Value (Note 2)
Software (continued)
Electronic Arts, Inc.*(a)		26,400	$	605,616
Intuit, Inc.(a)		23,500		1,793,520
Microsoft Corp.		586,900		21,967,667
Oracle Corp.		276,900		10,594,194
Red Hat, Inc.*		12,700		711,708
Salesforce.com, Inc.*(a)		43,300		2,389,727
SAP AG (Germany)		367		31,827
Symantec Corp.		57,678		1,360,047
Trend Micro, Inc. (Japan)		1,000		35,043

				44,136,910

Specialty Retail — 1.2%
ABC-Mart, Inc. (Japan)		300		13,107
AutoNation, Inc.*		3,874		192,499
AutoZone, Inc.*(a)		2,750		1,314,335
Bed Bath & Beyond, Inc.*(a)		18,000		1,445,400
Best Buy Co., Inc.		22,025		878,357
CarMax, Inc.*(a)		18,500		869,870
GameStop Corp. (Class A Stock)		9,100		448,266
Gap, Inc. (The)		18,700		730,796
Hennes & Mauritz AB (Sweden) (Class B Stock)		10,994		506,345
Home Depot, Inc. (The)		109,450		9,012,113
L Brands, Inc.		20,306		1,255,926
Lowe’s Cos., Inc.		82,600		4,092,830
O’Reilly Automotive, Inc.*(a)		8,200		1,055,422
PetSmart, Inc.(a)		8,600		625,650
Ross Stores, Inc.		17,700		1,326,261
Staples, Inc.		56,449		896,975
Tiffany & Co.		8,300		770,074
TJX Cos., Inc. (The)		55,400		3,530,642
Urban Outfitters, Inc.*		6,900		255,990
USS Co. Ltd. (Japan)		1,200		16,460

				29,237,318

Textiles, Apparel & Luxury Goods — 0.5%
Asics Corp. (Japan)		3,500		59,823
Christian Dior SA (France)		3,895		737,253
Cie Financiere Richemont SA (Switzerland)		1,881		187,907
Coach, Inc.		22,100		1,240,473
Fossil Group, Inc.*		3,000		359,820
Michael Kors Holdings Ltd.*		13,900		1,128,541
NIKE, Inc. (Class B Stock)		59,000		4,639,760
PVH Corp.		6,500		884,130
Ralph Lauren Corp.		5,100		900,507
Swatch Group AG (The) (Switzerland)		556		62,674
VF Corp.		25,600		1,595,904
Yue Yuen Industrial Holdings Ltd. (Hong Kong)		7,500		25,078

				11,821,870

Thrifts & Mortgage Finance
Hudson City Bancorp, Inc.		34,300		323,449
People’s United Financial, Inc.		26,300		397,656

				721,105

SEE NOTES TO FINANCIAL STATEMENTS.


COMMON STOCKS (continued)	Shares		Value (Note 2)
Tobacco — 0.9%
Altria Group, Inc.		154,100	$	5,915,899
British American Tobacco (United Kingdom)		23,704		1,272,298
Imperial Tobacco Group PLC (United Kingdom)		709		27,487
Japan Tobacco, Inc. (Japan)		38,000		1,236,473
Lorillard, Inc.		26,841		1,360,302
Philip Morris International, Inc.		125,300		10,917,389
Reynolds American, Inc.		24,100		1,204,759

				21,934,607

Trading Companies & Distributors — 0.2%
Fastenal Co.		21,500		1,021,465
ITOCHU Corp. (Japan)		17,000		210,165
Marubeni Corp. (Japan)		53,000		381,551
Mitsubishi Corp. (Japan)		61,700		1,184,512
Mitsui & Co. Ltd. (Japan)		22,400		312,282
Sojitz Corp. (Japan)		465,900		829,497
Travis Perkins PLC (United Kingdom)		24,026		746,348
W.W. Grainger, Inc.		4,700		1,200,474

				5,886,294

Transportation Infrastructure — 0.1%
Abertis Infraestructuras SA (Spain)		23,314		518,572
Atlantia SpA (Italy)		43,713		979,168
Auckland International Airport Ltd. (New Zealand)		18,452		53,588
Sydney Airport (Australia)		20,874		70,943

				1,622,271


COMMON STOCKS (continued)	Shares		Value (Note 2)
Wireless Telecommunication Services — 0.2%
Crown Castle International Corp.*		24,300	$	1,784,349
KDDI Corp. (Japan)		21,200		1,306,244
Millicom International Cellular SA, SDR		865		86,194
NTT DOCOMO, Inc. (Japan)		20,900		344,145
Softbank Corp. (Japan)		1,300		114,076
Vodafone Group PLC (United Kingdom)		357,973		1,409,416

				5,044,424

TOTAL COMMON STOCKS (cost $706,859,563)				1,452,785,994

EXCHANGE TRADED FUND — 0.1%
iShares MSCI EAFE Index Fund (cost $2,398,561)		39,150		2,625,399

PREFERRED STOCKS — 0.1%
Automobiles
Bayerische Motoren Werke AG (Germany) (PRFC)		697		59,602
Volkswagen AG (Germany) (PRFC)		168		47,279

				106,881

Banking
Citigroup Capital XIII, 7.875%, (Capital Security, fixed to floating preferred)(b)		20,000		545,000

Media — 0.1%
ProSiebenSat.1 Media AG (Germany)		19,323		959,505

TOTAL PREFERRED STOCKS (cost $1,437,193)				1,611,386

SEE NOTES TO FINANCIAL STATEMENTS.

A10


ASSET-BACKED SECURITIES — 1.9%	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Collateralized Debt Obligations
Cent CDO XI Ltd. (Cayman Islands), Series 2006-11A, Class A1, 144A		0.498%	(b)	04/25/19		419	$	413,522

Collateralized Loan Obligations — 1.1%
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class A, 144A		1.422%	(b)	04/20/25		2,100		2,064,702
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class B2, 144A		3.360%		04/20/25		250		245,150
Anchorage Capital CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.466%	(b)	07/13/25		2,400		2,359,259
Ares Enhanced Loan Investment Strategy Ltd. (Cayman Islands), Series 2005-2A, Class A2, 144A		0.498%	(b)	01/26/20		600		594,016
Benefit Street Partners CLO Ltd. (Cayman Islands), Series 2013-IIA, Class A1, 144A		1.475%	(b)	07/15/24		1,000		978,771
Brookside Mill CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.394%	(b)	04/17/25		2,200		2,150,165
Carlyle Daytona CLO Ltd. (Cayman Islands), Series 2007-1A, Class A1L, 144A		0.488%	(b)	04/27/21		2,662		2,616,470
Four Corners CLO Ltd. (Cayman Islands), Series 2006-3A, Class A, 144A		0.491%	(b)	07/22/20		395		390,276
Fraser Sullivan CLO Ltd. (Cayman Islands), Series 2006-1A, Class B, 144A		0.713%	(b)	03/15/20		1,000		972,313
ING Investment Management CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.384%	(b)	04/15/24		1,500		1,472,041
Lafayette CLO Ltd. (Cayman Islands), Series 2012-1A, Class A, 144A		1.642%	(b)	09/06/22		179		179,240
LCM CLO LP (Cayman Islands), Series 2005-3A, Class A, 144A		0.499%	(b)	06/01/17		120		119,533
LightPoint CLO Ltd., Series 2005-3A, Class A1A, 144A		0.503%	(b)	09/15/17		335		331,568
Magnetite VI Ltd. (Cayman Islands), Series 2012-6A, Class A, 144A		1.743%	(b)	09/15/23		300		299,301
Marine Park CLO Ltd. (Cayman Islands), Series 2012-1A, Class A1A, 144A		1.708%	(b)	05/18/23		1,100		1,095,989
Mayport CLO Ltd. (Cayman Islands), Series 2006-1A, Class A1L, 144A		0.488%	(b)	02/22/20		161		159,685
Mountain Capital CLO IV Ltd. (Cayman Islands), Series 2005-4A, Class A1L, 144A		0.493%	(b)	03/15/18		58		57,484
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class A2, 144A		1.718%	(b)	11/22/23		1,000		997,431
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class B, 144A		2.438%	(b)	11/22/23		900		883,435
OHA Intrepid Leveraged Loan Fund CLO Ltd. (Cayman Islands), Series 2011-1AR, Class AR, 144A		1.162%	(b)	04/20/21		1,486		1,475,603
OZLM Funding IV Ltd. (Cayman Islands), Series 2013-4A, Class A1, 144A		1.467%	(b)	07/22/25		1,000		981,102
Sheridan Square CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.294%	(b)	04/15/25		2,600		2,541,234
Slater Mill Loan Fund LP (Cayman Islands), Series 2012-1A, Class B, 144A		2.888%	(b)	08/17/22		500		494,836
Sound Point CLO Ltd. (Cayman Islands), Series 2012-1A, Class B, 144A		2.942%	(b)	10/20/23		900		905,341
Trimaran CLO VI Ltd. (Cayman Islands), Series 2006-2A, Class A1L, 144A		0.492%	(b)	11/01/18		912		902,570
Tyron Park CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.393%	(b)	07/15/25		2,200		2,155,550

								27,423,065

Non-Residential Mortgage-Backed Securities — 0.4%
American Express Credit Account Master Trust, Series 2012-4, Class C, 144A		0.967%	(b)	05/15/20		2,700		2,706,737
Citibank Credit Card Issuance Trust, Series 2005-C2, Class C2		0.634%	(b)	03/24/17		1,000		998,143
GE Capital Credit Card Master Note Trust, Series 2012-4, Class B		1.017%	(b)	06/15/18		4,500		4,484,093
MBNA Credit Card Master Note Trust, Series 2004-C2, Class C2		1.067%	(b)	11/15/16		1,000		1,002,195
SVO VOI Mortgage Corp., Series 2012-AA, Class A, 144A		2.000%		09/20/29		1,290		1,286,294

								10,477,462

SEE NOTES TO FINANCIAL STATEMENTS.

A11


ASSET-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Residential Mortgage-Backed Securities — 0.4%
CDC Mortgage Capital Trust, Series 2002-HE3, Class M1		1.816%	(b)	03/25/33		372	$	348,934
Countrywide Asset-Backed Certificates, Series 2004-1, Class M1		0.916%	(b)	03/25/34		3,240		3,058,145
Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB6, Class A3		4.499%		07/25/35		375		360,095
Equity One Mortgage Pass-Through Trust, Series 2004-3, Class M1		5.141%		07/25/34		506		481,144
Fremont Home Loan Trust, Series 2004-2, Class M1		1.021%	(b)	07/25/34		506		433,216
Long Beach Mortgage Loan Trust, Series 2004-2, Class M1		0.696%	(b)	06/25/34		774		727,219
Morgan Stanley ABS Capital I, Inc. Trust, Series 2003-HE1, Class M1		1.366%	(b)	05/25/33		190		176,484
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-NC1, Class M1		1.216%	(b)	12/27/33		1,070		1,027,765
Morgan Stanley Dean Witter Capital I, Series 2002-HE1, Class M1		1.066%	(b)	07/25/32		500		455,788
Morgan Stanley Dean Witter Capital I, Series 2002-NC4, Class M1		1.441%	(b)	09/25/32		708		655,613
Securitized Asset-Backed Receivables LLC Trust, Series 2004-OP1, Class M1		0.930%	(b)	02/25/34		1,112		1,020,012

								8,744,415

TOTAL ASSET-BACKED SECURITIES (cost $46,605,626)								47,058,464

BANK LOANS(b) — 0.3%
Automotive
Schaeffler AG (Germany)		4.250%		01/27/17		600		604,500

Cable
Virgin Media Investment Holdings Ltd. (United Kingdom)		3.500%		06/08/20		1,000		1,001,250

Foods — 0.1%
ARAMARK Corp.		4.000%		09/09/19		900		903,750
Del Monte Foods Co.		4.000%		03/08/18		958		959,051

								1,862,801

Healthcare & Pharmaceutical — 0.1%
CHS/Community Health Systems, Inc.		2.987%		10/25/16		440		440,205
HCA, Inc.		2.997%		05/01/18		369		368,583
HCA, Inc.		2.998%		03/31/17		884		884,244
RPI Finance Trust		4.000%		09/11/18		892		892,269
Universal Health Services, Inc.		1.675%		08/15/16		85		85,299

								2,670,600

Technology — 0.1%
First Data Corp.		4.164%		03/24/17		156		156,105
First Data Corp.		4.164%		03/26/18		2,055		2,055,955
Sensata Technologies BV (Netherlands)		3.750%		05/12/18		152		152,330

								2,364,390

TOTAL BANK LOANS (cost $8,427,655)								8,503,541

COMMERCIAL MORTGAGE-BACKED SECURITIES — 3.5%
Banc of America Commercial Mortgage Trust, Series 2006-6, Class A3		5.369%		10/10/45		3,400		3,474,280
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A1A		5.742%	(b)	04/10/49		3,886		4,226,649
Banc of America Commercial Mortgage Trust, Series 2007-3, Class A2		5.797%	(b)	06/10/49		318		318,177
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class A4		5.894%	(b)	12/10/49		800		894,707
Citigroup Commercial Mortgage Trust, Series 2013-GC11, Class A3		2.815%		04/10/46		900		835,325
Commercial Mortgage Pass Through Certificates, Series 2012-CR3, Class A2		1.765%		10/15/45		2,600		2,577,515
Commercial Mortgage Pass-Through Certificates, Series 2012-CR5, Class A3		2.540%		12/10/45		1,000		916,381

SEE NOTES TO FINANCIAL STATEMENTS.

A12


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Commercial Mortgage Pass-Through Certificates, Series 2013-CR12, Class A3		3.765%		10/10/46		1,000	$	984,352
Commercial Mortgage Pass-Through Certificates, Series 2013-CR7, Class A3		2.929%		03/10/46		1,400		1,313,766
Commercial Mortgage Pass-Through Certificates, Series 2013-CR9, Class A3		4.022%		07/10/45		1,100		1,115,083
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class A4		5.609%	(b)	02/15/39		2,810		3,027,497
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class AM		5.643%	(b)	02/15/39		530		566,327
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C2, Class A4		4.832%		04/15/37		900		933,833
CW Capital Cobalt Ltd., Series 2006-C1, Class A4		5.223%		08/15/48		1,020		1,100,572
FHLMC Multifamily Structured Pass-Through Certificates, Series K017, Class A2		2.873%		12/25/21		3,500		3,423,315
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class A2		2.373%		05/25/22		1,000		932,991
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class X1, I/O		1.609%	(b)	05/25/22		21,268		2,000,063
FHLMC Multifamily Structured Pass-Through Certificates, Series K021, Class X1, I/O		1.645%	(b)	06/25/22		5,867		575,889
FHLMC Multifamily Structured Pass-Through Certificates, Series K029, Class A2		3.320%	(b)	02/25/23		5,300		5,241,960
FHLMC Multifamily Structured Pass-Through Certificates, Series K034, Class A2		3.531%	(b)	07/25/23		1,800		1,800,187
FHLMC Multifamily Structured Pass-Through Certificates, Series K501, Class X1A, I/O		1.875%	(b)	08/25/16		6,084		189,710
FHLMC Multifamily Structured Pass-Through Certificates, Series K710, Class X1, I/O		1.913%	(b)	05/25/19		16,891		1,359,394
FHLMC Multifamily Structured Pass-Through Certificates, Series K711, Class X1, I/O		1.832%	(b)	07/25/19		17,434		1,370,736
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A5		5.224%	(b)	04/10/37		1,400		1,476,409
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A2		5.381%		03/10/39		2,044		2,089,942
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP1, Class ASB		4.853%	(b)	03/15/46		544		549,994
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class A3		4.697%		07/15/42		156		158,125
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class AM		4.780%		07/15/42		1,000		1,045,511
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class ASB		4.659%		07/15/42		1,212		1,229,969
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP4, Class AM		4.999%	(b)	10/15/42		1,170		1,239,159
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class ASB		5.523%		05/12/45		1,063		1,107,451
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LD11, Class A2		5.987%	(b)	06/15/49		803		809,071
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-CBX, Class A3		3.139%		06/15/45		1,800		1,813,788
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-LC9, Class A4		2.611%		12/15/47		1,500		1,377,134
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class A4		2.875%		12/15/47		3,200		2,986,832
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C16, Class A2		3.070%		12/15/46		1,700		1,745,645
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-LC11, Class A4		2.694%		04/15/46		1,100		1,006,949
LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A5		4.739%		07/15/30		628		652,990
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class AM		5.263%	(b)	11/15/40		1,390		1,489,851

SEE NOTES TO FINANCIAL STATEMENTS.

A13


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Merrill Lynch Mortgage Trust, Series 2006-C1, Class AM		5.866%	(b)	05/12/39		780	$	840,789
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-1, Class AM		5.703%	(b)	02/12/39		440		475,984
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4		6.081%	(b)	06/12/46		2,210		2,413,948
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-5, Class A3		5.364%		08/12/48		225		225,263
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-6, Class A2		5.331%		03/12/51		1,992		1,994,840
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C8, Class A3		2.863%		12/15/48		1,200		1,123,854
Morgan Stanley Capital I Trust, Series 2006-IQ11, Class A4		5.839%	(b)	10/15/42		2,265		2,428,827
Morgan Stanley Capital I Trust, Series 2007-HQ11, Class AAB		5.444%		02/12/44		2,716		2,789,542
Morgan Stanley Capital I Trust, Series 2007-T27, Class AAB		5.814%	(b)	06/11/42		356		363,270
UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A4		2.792%		12/10/45		1,400		1,305,017
UBS-Barclays Commercial Mortgage Trust, Series 2013-C5, Class A3		2.920%		03/10/46		3,200		2,998,598
UBS-Barclays Commercial Mortgage Trust, Series 2013-C6, Class A3		2.971%		04/10/46		1,500		1,408,757
Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A4		5.909%	(b)	05/15/43		3,688		3,978,624
Wachovia Bank Commercial Mortgage Trust, Series 2007-C34, Class A1A		5.608%	(b)	05/15/46		4,240		4,655,967

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $87,299,036)								86,960,809

CORPORATE BONDS — 8.1%
Aerospace & Defense
Bombardier, Inc. (Canada), Sr. Unsec’d. Notes, 144A		6.300%		05/01/14		900		913,500

Airlines — 0.2%
Continental Airlines, Inc. 1998-1 Class A Pass-Through Trust, Pass-Through Certificates, Series 1998-1		6.648%		09/15/17		139		146,335
Continental Airlines, Inc. 2001-1 Class A-1 Pass-Through Trust, Pass-Through Certificates, Series 2001-1		6.703%		06/15/21(c)		126		135,579
Continental Airlines, Inc. 2009-2 Class A Pass-Through Trust, Pass-Through Certificates		7.250%		11/10/19		599		685,747
Continental Airlines, Inc. 2010-1 Class A Pass-Through Trust, Pass-Through Certificates, Series 2010-1		4.750%		01/12/21(a)		656		696,670
Continental Airlines, Inc. 2012-2 Class A Pass-Through Trust, Pass-Through Certificates, Series 2012-2		4.000%		10/29/24		405		402,975
Delta Air Lines 2007-1 Pass-Through Trust, Pass-Through Certificates, Series 2007-1, Class A		6.821%		08/10/22		336		379,263
Delta Air Lines 2010-2 Pass-Through Trust, Pass-Through Certificates, Series 2010-2, Class A		4.950%		05/23/19(a)		538		579,821
Delta Air Lines 2011-1 Pass-Through Trust, Pass-Through Certificates, Series 2011-1, Class A		5.300%		04/15/19(a)		870		947,814

								3,974,204

Automotive — 0.2%
Cummins, Inc., Sr. Unsec’d. Notes		4.875%		10/01/43		70		70,104
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes		4.207%		04/15/16		1,890		2,013,867
General Motors Co., Sr. Unsec’d. Notes, 144A		4.875%		10/02/23(a)		755		764,438
General Motors Co., Sr. Unsec’d. Notes, 144A		6.250%		10/02/43		1,065		1,106,269
Harley-Davidson Financial Services, Inc., Gtd. Notes, 144A		2.700%		03/15/17		380		389,555
Johnson Controls, Inc., Sr. Unsec’d. Notes		5.500%		01/15/16		235		255,265

								4,599,498

Banking — 2.2%
Banco Santander Chile (Chile), Sr. Unsec’d. Notes, 144A		3.875%		09/20/22		530		499,880
Bank of America Corp., Jr. Sub. Notes, Series K		8.000%	(b)	12/29/49(a)		2,100		2,326,800
Bank of America Corp., Sr. Unsec’d. Notes, MTN		3.300%		01/11/23		360		340,656

SEE NOTES TO FINANCIAL STATEMENTS.

A14


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Banking (continued)
Bank of America Corp., Sr. Unsec’d. Notes		4.500%		04/01/15		185	$	193,543
Bank of America Corp., Sr. Unsec’d. Notes, MTN		5.650%		05/01/18		105		119,518
Bank of America Corp., Sr. Unsec’d. Notes		5.700%		01/24/22		1,290		1,460,093
Bank of America Corp., Sr. Unsec’d. Notes		6.000%		09/01/17		1,330		1,518,583
Bank of America NA, Sub. Notes		5.300%		03/15/17		850		936,889
Bank of America NA, Sub. Notes		6.000%		10/15/36		805		923,865
Bank of Nova Scotia (Canada), Covered Bonds, 144A		1.650%		10/29/15		1,265		1,289,794
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		5.300%		10/30/15		550		593,242
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		6.400%		10/02/17		270		313,351
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		7.250%		02/01/18		1,135		1,359,016
Citigroup, Inc., Sr. Unsec’d. Notes		3.875%		10/25/23		1,730		1,700,690
Citigroup, Inc., Sr. Unsec’d. Notes		4.500%		01/14/22(a)		1,125		1,192,176
Citigroup, Inc., Sr. Unsec’d. Notes		6.875%		03/05/38		103		126,659
Citigroup, Inc., Sr. Unsec’d. Notes		8.125%		07/15/39		850		1,192,285
Citigroup, Inc., Sr. Unsec’d. Notes		8.500%		05/22/19		1,195		1,531,499
Citigroup, Inc., Sub. Notes		6.125%		08/25/36		725		772,973
Depfa ACS Bank (Ireland), Covered Bonds, 144A		5.125%		03/16/37		500		423,125
Discover Bank, Sub. Notes		7.000%		04/15/20		485		564,049
Discover Financial Services, Sr. Unsec’d. Notes		3.850%		11/21/22		900		853,353
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		5.250%		07/27/21		2,305		2,523,611
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		5.750%		01/24/22		1,250		1,407,110
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.250%		02/01/41		220		253,528
Goldman Sachs Group, Inc. (The), Sub. Notes		5.625%		01/15/17		765		842,983
Goldman Sachs Group, Inc. (The), Sub. Notes		6.450%		05/01/36		1,020		1,092,336
Goldman Sachs Group, Inc. (The), Sub. Notes		6.750%		10/01/37		113		125,718
HSBC Holdings PLC (United Kingdom), Sr. Unsec’d. Notes		4.875%		01/14/22		1,230		1,327,318
HSBC Holdings PLC (United Kingdom), Sr. Unsec’d. Notes		5.100%		04/05/21		920		1,022,533
Huntington Bancshares, Inc., Sub. Notes		7.000%		12/15/20(a)		150		173,946
Intesa Sanpaolo SpA (Italy), Sr. Unsec’d. Notes		3.125%		01/15/16		1,145		1,166,826
JPMorgan Chase & Co., Jr. Sub. Notes		7.900%	(b)	04/24/49(a)		2,000		2,205,000
JPMorgan Chase & Co., Sr. Unsec’d. Notes		4.250%		10/15/20		1,660		1,759,661
JPMorgan Chase & Co., Sub. Notes		5.625%		08/16/43		185		195,503
Lloyds TSB Bank PLC (United Kingdom), Bank Gtd. Notes, MTN, 144A		5.800%		01/13/20		1,770		2,029,250
Morgan Stanley, Notes, MTN		5.450%		01/09/17		1,530		1,696,772
Morgan Stanley, Notes, MTN		6.625%		04/01/18		100		117,009
Morgan Stanley, Sr. Unsec’d. Notes, MTN		5.500%		07/28/21		1,535		1,715,298
Morgan Stanley, Sr. Unsec’d. Notes, MTN		5.625%		09/23/19		2,110		2,398,407
Morgan Stanley, Sr. Unsec’d. Notes		6.375%		07/24/42		640		749,620
MUFG Capital Finance 1 Ltd. (Cayman Islands), Gtd. Notes		6.346%	(b)	07/29/49		800		866,594
Northern Trust Corp., Sub. Notes		3.950%		10/30/25		750		730,871
People’s United Financial, Inc., Sr. Unsec’d. Notes		3.650%		12/06/22		1,195		1,129,763
PNC Bank NA, Sub. Notes		3.800%		07/25/23		480		465,522
PNC Funding Corp., Gtd. Notes		6.700%		06/10/19		390		468,458
Royal Bank of Canada (Canada), Covered Bonds		2.000%		10/01/18		3,260		3,243,081
Santander Holdings USA, Inc., Sr. Unsec’d. Notes		3.000%		09/24/15		780		805,466
US Bancorp, Sub. Notes, MTN		2.950%		07/15/22		915		850,150
Westpac Banking Corp. (Australia), Covered Bonds, 144A		1.850%		11/26/18		4,640		4,556,944

								56,151,317

Brokerage — 0.1%
Jefferies Group LLC, Sr. Unsec’d. Notes		6.500%		01/20/43		465		461,087
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes(d)		6.875%		02/06/12		1,850		393,125
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes(d)		6.875%		05/02/18		700		151,375
Nomura Holdings, Inc. (Japan), Sr. Unsec’d. Notes, MTN		2.000%		09/13/16		680		685,622

								1,691,209

Building Materials & Construction — 0.1%
D.R. Horton, Inc., Gtd. Notes		3.625%		02/15/18		900		913,500
Odebrecht Finance Ltd. (Brazil), Gtd. Notes, 144A		5.125%		06/26/22(a)		500		489,375

								1,402,875

SEE NOTES TO FINANCIAL STATEMENTS.

A15


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Cable — 0.3%
Cablevision Systems Corp., Sr. Unsec’d. Notes		8.625%	09/15/17(a)		900	$	1,048,500
Comcast Cable Holdings LLC, Gtd. Notes		9.875%	06/15/22		1,440		1,918,260
Comcast Corp., Gtd. Notes		6.400%	05/15/38		310		357,972
Comcast Corp., Gtd. Notes		6.950%	08/15/37		290		356,497
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.500%	03/01/16		605		635,062
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.550%	03/15/15		165		170,439
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		5.150%	03/15/42		520		467,013
Time Warner Cable, Inc., Gtd. Notes		5.850%	05/01/17		1,240		1,352,466
Time Warner Cable, Inc., Gtd. Notes		7.500%	04/01/14		345		350,728
Videotron Ltd. (Canada), Gtd. Notes		5.000%	07/15/22		850		830,875

							7,487,812

Capital Goods — 0.3%
Actuant Corp., Gtd. Notes		5.625%	06/15/22		1,040		1,053,000
Case New Holland, Inc., Gtd. Notes		7.875%	12/01/17		1,100		1,298,000
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $1,195,904; purchased 10/10/07)		6.375%	10/15/17(c)(e)		1,198		1,386,305
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $386,623; purchased 10/10/07)		7.000%	10/15/37(c)(e)		390		461,535
General Electric Co., Sr. Unsec’d. Notes		4.125%	10/09/42		455		420,355
Penske Truck Leasing Co. LP/PTL Finance Corp., Sr. Unsec’d. Notes, 144A (original cost $319,875; purchased 07/10/12)		2.500%	07/11/14(c)(e)		320		322,604
Penske Truck Leasing Co. LP/PTL Finance Corp., Unsec’d. Notes, 144A (original cost $419,593; purchased 05/08/12)		3.125%	05/11/15(c)(e)		420		431,962
Xylem, Inc., Sr. Unsec’d. Notes		4.875%	10/01/21		1,060		1,104,985

							6,478,746

Chemicals — 0.1%
Dow Chemical Co. (The), Sr. Unsec’d. Notes		9.400%	05/15/39(a)		35		52,287
LyondellBasell Industries NV, Sr. Unsec’d. Notes		5.000%	04/15/19		800		888,497
Mosaic Co. (The), Sr. Unsec’d. Notes		5.450%	11/15/33		370		376,974
Mosaic Co. (The), Sr. Unsec’d. Notes		5.625%	11/15/43		775		786,224
Rhodia SA (France), Sr. Unsec’d. Notes, 144A		6.875%	09/15/20		950		1,051,612
Union Carbide Corp., Sr. Unsec’d. Notes		7.500%	06/01/25		500		579,012

							3,734,606

Consumer — 0.1%
Newell Rubbermaid, Inc., Sr. Unsec’d. Notes		6.250%	04/15/18		1,600		1,811,864

Electric — 0.4%
Arizona Public Service Co., Sr. Unsec’d. Notes		6.250%	08/01/16		170		190,734
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes		6.350%	10/01/36		530		622,910
Calpine Corp., Sr. Sec’d. Notes, 144A		7.500%	02/15/21		741		808,616
CenterPoint Energy Houston Electric LLC, Gen. Ref. Mtge., Series K2		6.950%	03/15/33		300		385,403
Consolidated Edison Co. of New York, Inc., Sr. Unsec’d. Notes, Series 09-C		5.500%	12/01/39		145		160,070
Dominion Gas Holdings LLC, Sr. Unsec’d. Notes, 144A		4.800%	11/01/43		45		43,508
Duke Energy Carolinas LLC, First Mtge. Bonds		6.050%	04/15/38		530		629,053
El Paso Electric Co., Sr. Unsec’d. Notes		6.000%	05/15/35		845		876,565
Empresa Nacional de Electricidad SA (Chile), Sr. Unsec’d. Notes		8.625%	08/01/15		1,160		1,277,904
Energy East Corp. (Spain), Gtd. Notes		6.750%	09/15/33		140		147,935
Exelon Corp., Sr. Unsec’d. Notes		4.900%	06/15/15(a)		195		205,589
Exelon Generation Co. LLC, Sr. Unsec’d. Notes		6.250%	10/01/39		1,375		1,393,407
Florida Power & Light Co., First Mtge. Bonds		5.950%	10/01/33		380		447,429
MidAmerican Energy Holdings Co., Sr. Unsec’d. Notes		5.950%	05/15/37		325		355,636
Niagara Mohawk Power Corp. (United Kingdom), Sr. Unsec’d. Notes, 144A		4.881%	08/15/19		545		602,472
NSTAR LLC, Sr. Unsec’d. Notes		4.500%	11/15/19		605		656,649
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes		6.375%	01/15/15		465		490,578

SEE NOTES TO FINANCIAL STATEMENTS.

A16


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Electric (continued)
Public Service Co. of New Mexico, Sr. Unsec’d. Notes		7.950%	05/15/18		135	$	160,470
Public Service Electric & Gas Co, Sr. Sec’d. Notes, MTN		5.800%	05/01/37		515		591,129
Xcel Energy, Inc., Sr. Unsec’d. Notes		4.800%	09/15/41		480		467,418
Xcel Energy, Inc., Sr. Unsec’d. Notes		5.613%	04/01/17		263		289,767

							10,803,242

Energy – Integrated
Reliance Holdings USA, Inc. (India), Gtd. Notes, 144A		5.400%	02/14/22		650		657,372

Energy – Other — 0.2%
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.450%	09/15/36		305		342,495
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.950%	06/15/19		225		267,802
Anadarko Petroleum Corp., Sr. Unsec’d. Notes(f)		7.936%	10/10/36		1,000		357,090
Nabors Industries, Inc., Gtd. Notes		4.625%	09/15/21		890		891,043
Pacific Rubiales Energy Corp. (Colombia), Gtd. Notes, 144A		5.375%	01/26/19		350		352,625
Pemex Project Funding Master Trust (Mexico), Gtd. Notes		6.625%	06/15/35		513		539,933
Phillips 66, Gtd. Notes		2.950%	05/01/17		415		431,762
Pioneer Natural Resources Co., Sr. Unsec’d. Notes		6.875%	05/01/18		1,450		1,697,821
Transocean, Inc., Gtd. Notes		2.500%	10/15/17(a)		755		762,998
Weatherford International Ltd., Gtd. Notes		5.125%	09/15/20(a)		685		735,867
Weatherford International Ltd., Gtd. Notes		6.500%	08/01/36		25		26,075

							6,405,511

Foods — 0.3%
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Gtd. Notes		8.000%	11/15/39		1,160		1,671,791
Bunge Ltd. Finance Corp., Gtd. Notes		5.350%	04/15/14		1,000		1,012,710
Bunge Ltd. Finance Corp., Gtd. Notes		8.500%	06/15/19		860		1,056,495
Darling International, Inc., Gtd. Notes		8.500%	12/15/18		1,000		1,102,500
Delhaize Group SA (Belgium), Gtd. Notes		6.500%	06/15/17		460		516,622
TreeHouse Foods, Inc., Gtd. Notes		7.750%	03/01/18		1,200		1,257,000
Tyson Foods, Inc., Gtd. Notes		6.600%	04/01/16		785		876,262

							7,493,380

Healthcare & Pharmaceutical — 0.3%
Actavis PLC, Sr. Unsec’d. Notes		4.625%	10/01/42		460		418,508
Actavis, Inc., Sr. Unsec’d. Notes		6.125%	08/15/19		440		507,226
Amgen, Inc., Sr. Unsec’d. Notes		5.150%	11/15/41		1,365		1,359,930
AstraZeneca PLC (United Kingdom), Sr. Unsec’d. Notes		6.450%	09/15/37		480		573,168
CHS/Community Health Systems, Inc., Sr. Sec’d. Notes		5.125%	08/15/18		900		929,250
Gilead Sciences, Inc., Sr. Unsec’d. Notes		5.650%	12/01/41(a)		140		155,853
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes		3.750%	08/23/22(a)		150		145,296
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes		5.625%	12/15/15		560		608,025
Merck Sharp & Dohme Corp., Gtd. Notes		5.950%	12/01/28		205		239,081
Mylan, Inc., Gtd. Notes, 144A		1.800%	06/24/16		355		361,907
Thermo Fisher Scientific, Inc., Sr. Unsec’d. Notes		4.150%	02/01/24		925		916,211
Valeant Pharmaceuticals International, Inc., Gtd. Notes, 144A		6.500%	07/15/16(a)		822		848,715
Zoetis, Inc., Sr. Unsec’d. Notes		4.700%	02/01/43		155		144,872

							7,208,042

Healthcare Insurance — 0.2%
Aetna, Inc., Sr. Unsec’d. Notes		6.625%	06/15/36		480		573,927
Cigna Corp., Sr. Unsec’d. Notes		5.875%	03/15/41		540		595,648
Cigna Corp., Sr. Unsec’d. Notes		6.150%	11/15/36		640		721,199
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.000%	06/15/17		115		131,975
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.500%	06/15/37		400		474,553
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.625%	11/15/37		410		496,041
WellPoint, Inc., Sr. Unsec’d. Notes		4.625%	05/15/42		330		304,991
WellPoint, Inc., Sr. Unsec’d. Notes		4.650%	01/15/43		775		717,497

							4,015,831

SEE NOTES TO FINANCIAL STATEMENTS.

A17


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance — 0.7%
Allied World Assurance Co. Ltd., Gtd. Notes		5.500%		11/15/20		480	$	519,122
Allstate Corp. (The), Sr. Unsec’d. Notes		4.500%		06/15/43		125		118,272
American International Group, Inc., Sr. Unsec’d. Notes		6.400%		12/15/20		910		1,075,494
American International Group, Inc., Sr. Unsec’d. Notes		8.250%		08/15/18		900		1,125,792
Axis Specialty Finance LLC, Gtd. Notes		5.875%		06/01/20		990		1,086,038
Chubb Corp. (The), Jr. Sub. Notes		6.375%	(b)	03/29/67		1,260		1,363,950
Hartford Financial Services Group, Inc., Sr. Unsec’d. Notes		5.125%		04/15/22		635		691,649
Liberty Mutual Group, Inc., Gtd. Notes, 144A		6.500%		05/01/42		215		235,952
Liberty Mutual Group, Inc., Sr. Unsec’d. Notes, 144A		7.000%		03/15/34		910		1,039,449
Lincoln National Corp., Jr. Sub. Notes		6.050%	(b)	04/20/67		250		248,125
Lincoln National Corp., Sr. Unsec’d. Notes		6.300%		10/09/37		476		547,284
Lincoln National Corp., Sr. Unsec’d. Notes		7.000%		06/15/40		660		826,896
Lincoln National Corp., Sr. Unsec’d. Notes		8.750%		07/01/19		505		650,014
Markel Corp., Sr. Unsec’d. Notes		5.000%		03/30/43		165		154,307
MetLife, Inc., Sr. Unsec’d. Notes		5.700%		06/15/35		960		1,048,456
MetLife, Inc., Sr. Unsec’d. Notes		6.375%		06/15/34		85		100,527
MetLife, Inc., Sr. Unsec’d. Notes		6.750%		06/01/16		270		306,998
New York Life Insurance Co., Sub. Notes, 144A		6.750%		11/15/39(a)		650		792,888
Northwestern Mutual Life Insurance Co. (The), Sub.Notes, 144A		6.063%		03/30/40		350		393,229
Ohio National Financial Services, Inc., Sr. Notes, 144A		6.375%		04/30/20		640		709,610
Pacific Life Insurance Co., Sub. Notes, 144A		9.250%		06/15/39		870		1,208,179
Principal Financial Group, Inc., Gtd. Notes		4.625%		09/15/42		105		98,648
Progressive Corp. (The), Jr. Sub. Notes		6.700%	(b)	06/15/37		715		772,200
Teachers Insurance & Annuity Association of America, Sub. Notes, 144A		6.850%		12/16/39		1,430		1,765,176
Unum Group, Sr. Unsec’d. Notes		5.625%		09/15/20		315		345,286
W.R. Berkley Corp., Sr. Unsec’d. Notes		5.600%		05/15/15		705		744,201
W.R. Berkley Corp., Sr. Unsec’d. Notes		6.150%		08/15/19		575		647,811
XL Group PLC (Ireland), Sr. Unsec’d. Notes		5.250%		09/15/14		110		113,377

								18,728,930

Lodging — 0.3%
Choice Hotels International, Inc., Gtd. Notes		5.750%		07/01/22		955		996,781
Marriott International, Inc., Sr. Unsec’d. Notes		3.000%		03/01/19		490		493,433
Marriott International, Inc., Sr. Unsec’d. Notes		3.250%		09/15/22		805		750,510
Starwood Hotels & Resorts Worldwide, Inc.,Sr.Unsec’d.Notes		6.750%		05/15/18		2,700		3,125,015
Wyndham Worldwide Corp., Sr. Unsec’d. Notes		2.500%		03/01/18		405		403,625
Wyndham Worldwide Corp., Sr. Unsec’d. Notes		4.250%		03/01/22		890		868,615

								6,637,979

Media & Entertainment — 0.2%
Belo Corp., Gtd. Notes		8.000%		11/15/16		1,000		1,042,500
CBS Corp., Gtd. Notes (original cost $355,252; purchased 07/16/12)		4.850%		07/01/42(c)(e)		340		306,357
Historic TW, Inc., Gtd. Notes		9.150%		02/01/23		625		828,801
News America, Inc., Gtd. Notes		6.150%		03/01/37		250		274,772
News America, Inc., Gtd. Notes		6.900%		08/15/39		35		41,715
News America, Inc., Gtd. Notes		7.625%		11/30/28		1,265		1,569,033
Time Warner, Inc., Gtd. Notes		6.200%		03/15/40(a)		175		192,791
Time Warner, Inc., Gtd. Notes		6.250%		03/29/41		495		549,689
Time Warner, Inc., Gtd. Notes		7.625%		04/15/31		155		196,163
Viacom, Inc., Sr. Unsec’d. Notes		4.500%		02/27/42		50		42,658
Viacom, Inc., Sr. Unsec’d. Notes		5.850%		09/01/43		460		483,562

								5,528,041

Metals — 0.1%
BHP Billiton Finance USA Ltd. (Australia), Gtd. Notes		5.000%		09/30/43		700		711,719
Newmont Mining Corp., Gtd. Notes		6.250%		10/01/39		15		13,268
Peabody Energy Corp., Gtd. Notes		6.000%		11/15/18		575		612,375
Southern Copper Corp., Sr. Unsec’d. Notes		7.500%		07/27/35		370		385,566

SEE NOTES TO FINANCIAL STATEMENTS.

A18


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Metals (continued)
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.050%	10/23/15		905	$	916,518
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.850%	11/10/14		995		1,008,811

							3,648,257

Non-Captive Finance — 0.3%
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		5.875%	01/14/38		970		1,104,941
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		6.000%	08/07/19		3,010		3,531,669
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		6.875%	01/10/39		730		938,485
International Lease Finance Corp., Sr. Unsec’d. Notes		5.750%	05/15/16		230		246,388
SLM Corp., Sr. Unsec’d. Notes, MTN		6.250%	01/25/16		365		394,200
SLM Corp., Sr. Unsec’d. Notes, MTN		8.450%	06/15/18		295		343,675

							6,559,358

Packaging — 0.1%
Ball Corp., Gtd. Notes		4.000%	11/15/23		1,710		1,530,450
Crown Americas LLC/Crown Americas Capital Corp. IV		4.500%	01/15/23(a)		1,000		935,000

							2,465,450

Paper — 0.1%
Georgia-Pacific LLC, Gtd. Notes, 144A (original cost $273,386; purchased 10/27/10)		5.400%	11/01/20(c)(e)		275		307,258
International Paper Co., Sr. Unsec’d. Notes		6.000%	11/15/41		1,270		1,379,164
International Paper Co., Sr. Unsec’d. Notes		7.950%	06/15/18		460		558,758
Rock-Tenn Co., Gtd. Notes		4.000%	03/01/23		360		343,833
Rock-Tenn Co., Gtd. Notes		4.900%	03/01/22		675		694,823

							3,283,836

Pipelines & Other — 0.1%
Energy Transfer Partners LP, Sr. Unsec’d. Notes		4.650%	06/01/21		610		627,472
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes		5.950%	02/15/18		530		602,289
NiSource Finance Corp., Gtd. Notes		5.450%	09/15/20		500		555,996
ONEOK Partners LP, Gtd. Notes		6.650%	10/01/36		130		143,061

							1,928,818

Railroads — 0.1%
Burlington Northern Santa Fe LLC, Sr. Unsec’d. Notes		6.700%	08/01/28		735		847,827
CSX Corp., Sr. Unsec’d. Notes		6.150%	05/01/37		690		770,431
Norfolk Southern Corp., Sr. Unsec’d. Notes		5.590%	05/17/25		120		131,136

							1,749,394

Real Estate Investment Trusts — 0.2%
Felcor Lodging LP, Sr. Sec’d. Notes		10.000%	10/01/14		369		390,218
HCP, Inc., Sr. Unsec’d. Notes		2.700%	02/01/14		670		671,046
Mack-Cali Realty Corp., Sr. Unsec’d. Notes		7.750%	08/15/19		685		821,184
ProLogis LP, Gtd. Notes		6.875%	03/15/20		68		80,091
Simon Property Group LP, Sr. Unsec’d. Notes		2.800%	01/30/17(a)		235		243,062
Simon Property Group LP, Sr. Unsec’d. Notes		3.375%	03/15/22		190		185,190
Simon Property Group LP, Sr. Unsec’d. Notes		6.125%	05/30/18		2,925		3,386,606

							5,777,397

Retailers — 0.1%
CVS Caremark Corp., Sr. Unsec’d. Notes		5.300%	12/05/43		170		175,808
CVS Caremark Corp., Sr. Unsec’d. Notes		5.750%	05/15/41		130		141,878
CVS Caremark Corp., Sr. Unsec’d. Notes		6.125%	09/15/39		335		379,930
Lowe’s Cos, Inc., Sr. Unsec’d. Notes		6.500%	03/15/29		345		409,189
Ltd. Brands, Inc., Gtd. Notes		5.625%	02/15/22		1,300		1,329,250
Macy’s Retail Holdings, Inc., Gtd. Notes		3.875%	01/15/22		300		295,703

							2,731,758

SEE NOTES TO FINANCIAL STATEMENTS.

A19


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Technology
Arrow Electronics, Inc., Sr. Unsec’d. Notes		3.375%	11/01/15		370	$	382,907
Seagate HDD Cayman, Gtd. Notes, 144A		3.750%	11/15/18		455		460,119

							843,026

Telecommunications — 0.6%
America Movil SAB de CV (Mexico), Gtd. Notes		6.125%	03/30/40		400		423,246
AT&T Corp., Gtd. Notes		8.000%	11/15/31		18		23,957
AT&T, Inc., Sr. Unsec’d. Notes		5.350%	09/01/40		1,378		1,363,437
British Telecommunications PLC (United Kingdom), Sr. Unsec’d. Notes		9.625%	12/15/30		350		522,285
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec’d. Notes		8.500%	11/15/18		1,830		2,317,023
Embarq Corp., Sr. Unsec’d. Notes (original cost $367,380; purchased 05/04/11-05/11/11)		7.082%	06/01/16(c)(e)		325		363,155
Embarq Corp., Sr. Unsec’d. Notes (original cost $644,955; purchased 05/12/06)		7.995%	06/01/36(c)(e)		645		653,024
Qwest Corp., Sr. Unsec’d. Notes		7.500%	10/01/14		880		923,681
Sprint Communications, Inc., Sr. Unsec’d. Notes		6.000%	12/01/16(a)		950		1,036,688
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.400%	09/15/33		1,285		1,477,905
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.550%	09/15/43		4,190		4,902,128
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.400%	02/15/38		55		61,763

							14,068,292

Tobacco — 0.2%
Altria Group, Inc., Gtd. Notes		4.000%	01/31/24		1,585		1,549,201
Altria Group, Inc., Gtd. Notes		9.700%	11/10/18		354		465,295
Altria Group, Inc., Gtd. Notes		9.950%	11/10/38		42		64,067
Altria Group, Inc., Gtd. Notes		10.200%	02/06/39		274		427,499
Imperial Tobacco Finance PLC (United Kingdom), Gtd. Notes, 144A		2.050%	02/11/18		1,680		1,661,218
Lorillard Tobacco Co., Gtd. Notes		8.125%	06/23/19(a)		290		353,262
Reynolds American, Inc., Gtd. Notes		4.750%	11/01/42		290		257,758

							4,778,300

TOTAL CORPORATE BONDS (cost $191,254,448)							203,557,845

MUNICIPAL BONDS — 0.5%
California — 0.2%
Bay Area Toll Authority, Revenue Bonds, BABs		6.263%	04/01/49		1,305		1,565,230
State of California, GO, BABs		7.300%	10/01/39		1,250		1,571,988
State of California, GO, BABs		7.500%	04/01/34		350		445,382
State of California, GO, BABs		7.550%	04/01/39		245		317,518
State of California, GO, BABs		7.625%	03/01/40		205		269,899

							4,170,017

Colorado
Regional Transportation District, Revenue Bonds, Series 2010B, BABs		5.844%	11/01/50		625		721,550

Illinois — 0.1%
Chicago O’Hare International Airport, Revenue Bonds, BABs		6.395%	01/01/40		970		1,082,103
State of Illinois, GO, Taxable Series		4.421%	01/01/15		630		650,173

							1,732,276

New Jersey — 0.1%
New Jersey State Turnpike Authority, Revenue Bonds, Series F, BABs		7.414%	01/01/40		1,000		1,332,450

New York — 0.1%
New York City Transitional Finance Authority, Revenue Bonds, BABs		5.767%	08/01/36		1,100		1,247,697

SEE NOTES TO FINANCIAL STATEMENTS.

A20


MUNICIPAL BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Ohio
Ohio State University (The), Revenue Bonds, BABs		4.910%		06/01/40		415	$	415,822
Ohio State Water Development Authority, Revenue Bonds, BABs		4.879%		12/01/34		275		278,930

								694,752

Oregon
Oregon State Department of Transportation Highway, Revenue Bonds, Series A, BABs		5.834%		11/15/34		425		489,247

Pennsylvania
Pennsylvania Turnpike Commission, Revenue Bonds, Series B, BABs		5.511%		12/01/45		505		535,861

Tennessee
Metropolitan Government of Nashville & Davidson County Convention Center Authority, Revenue Bonds, BABs		6.731%		07/01/43		945		1,047,514

Texas
Texas State Transportation Commission, Revenue Bonds, Series B, BABs		5.028%		04/01/26		305		328,064

TOTAL MUNICIPAL BONDS (cost $10,711,348)								12,299,428

NON-CORPORATE FOREIGN AGENCIES — 0.7%
Comision Federal de Electricidad (Mexico), Sr. Unsec’d. Notes, 144A		4.875%		01/15/24		490		486,325
Commonwealth Bank of Australia (Australia), Gov’t. Gtd. Notes, 144A		2.700%		11/25/14(a)		7,220		7,373,208
Export-Import Bank of Korea (South Korea), Sr. Unsec’d. Notes		5.125%		06/29/20		365		401,034
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, 144A		9.250%		04/23/19		695		854,850
Kommunalbanken AS (Norway), Sr. Unsec’d Notes, 144A		1.125%		05/23/18		2,634		2,558,668
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A		6.250%		06/17/14		800		818,538
Pemex Project Funding Master Trust (Mexico), Gtd. Notes		8.625%		12/01/23		350		426,125
Petrobras Global Finance BV (Brazil), Gtd. Notes		2.000%		05/20/16		1,400		1,398,893
Petroleos Mexicanos (Mexico), Gtd. Notes		3.500%		01/30/23(a)		795		728,419
Petroleos Mexicanos (Mexico), Gtd. Notes		4.875%		01/18/24		425		425,000
Petroleos Mexicanos (Mexico), Gtd. Notes		5.500%		01/21/21		2,240		2,408,000
RSHB Capital SA For OJSC Russian Agricultural Bank (Russia), Sr. Unsec’d. Notes, 144A		6.299%		05/15/17		760		810,350

TOTAL NON-CORPORATE FOREIGN AGENCIES (cost $18,703,657)								18,689,410

NON-CORPORATE SOVEREIGNS — 0.2%
Brazilian Government International Bond (Brazil), Sr. Unsec’d.		4.250%		01/07/25		970		923,925
Colombia Government International Bond (Colombia), Sr. Unsec’d. Notes		4.000%		02/26/24		1,120		1,079,680
Indonesia Government International Bond (Indonesia), Sr. Unsec’d., 144A		5.875%		03/13/20(a)		870		919,590
Indonesia Government International Bond (Indonesia), Sr. Unsec’d. Notes, 144A		6.875%		01/17/18		845		945,133
Mexico Government International Bond (Mexico), Sr. Unsec’d. Notes		3.625%		03/15/22		600		600,000
Mexico Government International Bond (Mexico), Sr. Unsec’d. Notes, MTN		4.750%		03/08/44(a)		846		762,458
Panama Government International Bond (Panama), Sr. Unsec’d.		5.200%		01/30/20		475		517,156

TOTAL NON-CORPORATE SOVEREIGNS (cost $5,911,434)								5,747,942

RESIDENTIAL MORTGAGE-BACKED SECURITIES — 0.2%
Banc of America Alternative Loan Trust, Series 2005-12, Class 3CB1		6.000%		01/25/36		1,865		1,453,239
Banc of America Mortgage Trust, Series 2005-A, Class 2A1		2.945%	(b)	02/25/35		407		403,489
Banc of America Mortgage Trust, Series 2005-B, Class 2A1		2.879%	(b)	03/25/35		463		427,313
Chase Mortgage Finance Trust Series, Series 2007-A1, Class 1A5		2.740%	(b)	02/25/37		994		985,420

SEE NOTES TO FINANCIAL STATEMENTS.

A21


RESIDENTIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Countrywide Alternative Loan Trust, Series 2004-18CB, Class 3A1		5.250%		09/25/19		473	$	482,563
JPMorgan Mortgage Trust, Series 2007-A1, Class 4A1		2.737%	(b)	07/25/35		560		556,074
MASTR Alternative Loan Trust, Series 2004-4, Class 4A1		5.000%		04/25/19		125		128,043
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-1, Class 4A3		1.840%	(b)	02/25/34		570		570,304
Washington Mutual Mortgage Pass-Through Certificates, Series 2005-1, Class 3A		5.000%		03/25/20		341		348,054

TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (cost $5,780,157)								5,354,499

U.S. GOVERNMENT AGENCY OBLIGATIONS — 8.1%
Federal Home Loan Bank		0.375%		08/28/15		375		375,232
Federal Home Loan Bank		5.500%		07/15/36(g)		950		1,098,995
Federal Home Loan Mortgage Corp.		0.750%		01/12/18		455		442,836
Federal Home Loan Mortgage Corp.		1.375%		05/01/20(a)		3,535		3,314,112
Federal Home Loan Mortgage Corp.		2.375%		01/13/22(a)		6,555		6,266,351
Federal Home Loan Mortgage Corp.		2.384%	(b)	06/01/36		366		386,849
Federal Home Loan Mortgage Corp.		2.572%	(b)	12/01/35		363		388,083
Federal Home Loan Mortgage Corp.		3.000%		10/01/42		1,485		1,408,305
Federal Home Loan Mortgage Corp.		3.500%		TBA		1,000		1,042,500
Federal Home Loan Mortgage Corp.		3.500%		TBA		5,000		4,960,938
Federal Home Loan Mortgage Corp.		4.000%		TBA		4,500		4,621,289
Federal Home Loan Mortgage Corp.		4.000%		06/01/26-12/01/40		5,703		5,962,929
Federal Home Loan Mortgage Corp.		4.500%		02/01/19-10/01/41		14,455		15,325,582
Federal Home Loan Mortgage Corp.		5.000%		07/01/18-05/01/39		5,388		5,785,896
Federal Home Loan Mortgage Corp.		5.500%		12/01/33-07/01/38		4,669		5,102,030
Federal Home Loan Mortgage Corp.		6.000%		03/01/32-08/01/39		1,750		1,951,432
Federal Home Loan Mortgage Corp.		6.500%		12/01/14-09/01/16		15		15,304
Federal Home Loan Mortgage Corp.		7.000%		05/01/31-10/01/31		380		425,432
Federal National Mortgage Assoc.		1.625%		11/27/18(a)		4,205		4,169,922
Federal National Mortgage Assoc.		2.014%	(b)	07/01/33		480		505,391
Federal National Mortgage Assoc.		2.058%	(b)	06/01/37		75		78,820
Federal National Mortgage Assoc.		2.166%	(b)	07/01/37		586		619,472
Federal National Mortgage Assoc.		2.500%		TBA		4,500		4,453,594
Federal National Mortgage Assoc.		2.500%		01/01/28		1,959		1,941,202
Federal National Mortgage Assoc.		3.000%		TBA		2,500		2,551,270
Federal National Mortgage Assoc.		3.000%		TBA		12,500		11,866,211
Federal National Mortgage Assoc.		3.500%		TBA		5,000		5,228,711
Federal National Mortgage Assoc.		3.500%		06/01/39-03/01/43		21,152		21,036,893
Federal National Mortgage Assoc.		4.000%		TBA		10,000		10,293,750
Federal National Mortgage Assoc.		4.500%		TBA		4,000		4,238,281
Federal National Mortgage Assoc.		4.500%		11/01/18-03/01/41		10,609		11,279,007
Federal National Mortgage Assoc.		5.000%		TBA		2,000		2,165,781
Federal National Mortgage Assoc.		5.000%		10/01/18-05/01/36		3,715		4,029,113
Federal National Mortgage Assoc.		5.500%		03/01/16-04/01/37		6,798		7,462,786
Federal National Mortgage Assoc.		6.000%		05/01/14-06/01/38		7,542		8,422,001
Federal National Mortgage Assoc.		6.500%		07/01/17-01/01/37		2,769		3,081,365
Federal National Mortgage Assoc.		7.000%		02/01/32-07/01/32		292		329,939
Federal National Mortgage Assoc.		7.500%		05/01/32		61		69,215
Government National Mortgage Assoc.		3.000%		TBA		2,000		1,931,406
Government National Mortgage Assoc.		3.000%		TBA		2,000		1,932,344
Government National Mortgage Assoc.		3.500%		TBA		8,000		8,062,813
Government National Mortgage Assoc.		4.000%		TBA		12,000		12,476,719
Government National Mortgage Assoc.		4.000%		06/15/40-05/20/41		1,743		1,813,590
Government National Mortgage Assoc.		4.500%		TBA		1,000		1,066,953
Government National Mortgage Assoc.		4.500%		01/20/41-02/20/41		4,972		5,337,383
Government National Mortgage Assoc.		5.500%		08/15/33-04/15/36		3,172		3,541,776
Government National Mortgage Assoc.		6.000%		11/15/23-07/15/34		1,087		1,229,474
Government National Mortgage Assoc.		6.500%		10/15/23-09/15/36		2,136		2,417,545
Government National Mortgage Assoc.		8.000%		01/15/24-07/15/24		41		46,391

SEE NOTES TO FINANCIAL STATEMENTS.

A22


U.S. GOVERNMENT AGENCY OBLIGATIONS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Tennessee Valley Authority, Sr. Unsecured Notes		5.880%		04/01/36		85	$	98,466

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $199,817,132)								202,651,679

U.S. TREASURY OBLIGATIONS — 3.0%
U.S. Treasury Bonds		3.625%		08/15/43(a)		1,625		1,534,609
U.S. Treasury Bonds		3.750%		11/15/43(h)		5,765		5,572,230
U.S. Treasury Inflation Indexed Bonds, TIPS		0.125%		04/15/18		3,673		3,746,011
U.S. Treasury Inflation Indexed Bonds, TIPS		0.375%		07/15/23		2,424		2,337,632
U.S. Treasury Inflation Indexed Bonds, TIPS		0.625%		02/15/43		711		546,792
U.S. Treasury Inflation Indexed Bonds, TIPS		1.375%		01/15/20		9,316		10,003,541
U.S. Treasury Notes		0.625%		04/30/18		1,430		1,379,056
U.S. Treasury Notes		0.875%		07/31/19		4,980		4,689,372
U.S. Treasury Notes		1.250%		11/30/18(a)		11,705		11,454,443
U.S. Treasury Notes		1.500%		12/31/18		10,760		10,638,950
U.S. Treasury Notes		2.375%		12/31/20		19,985		19,906,939
U.S. Treasury Notes		2.750%		11/15/23(a)		20		19,566
U.S. Treasury Strips Principal		7.187%	(f)	05/15/43(a)		7,040		2,067,219
U.S. Treasury Strips Principal		7.928%	(f)	02/15/43		730		216,554

TOTAL U.S. TREASURY OBLIGATIONS (cost $73,976,593)								74,112,914

TOTAL LONG-TERM INVESTMENTS (cost $1,359,182,403)								2,121,959,310

SHORT-TERM INVESTMENTS — 21.8%
U.S. TREASURY OBLIGATION — 0.1%
U.S. Treasury Bills (cost $3,699,566)		0.060%	(k)	03/20/14(g)		3,700		3,699,526


					Shares
AFFILIATED MUTUAL FUNDS — 21.7%
Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund (cost $98,578,461) (Note 4)(i)						10,287,849		95,779,870
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $446,488,086; includes $91,648,093 of cash collateral received for securities on loan) (Note 4)(i)(j)						446,488,086		446,488,086

TOTAL AFFILIATED MUTUAL FUNDS (cost $545,066,547)								542,267,956


				Counterparty	Notional Amount (000)#
OPTIONS PURCHASED*
Call Options
Interest Rate Swap Options,
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Barclays Capital Group		22,670		229
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Citibank Global Markets		27,775		280
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Citibank Global Markets		27,775		280

TOTAL OPTIONS PURCHASED (cost $82,826)								789

TOTAL SHORT-TERM INVESTMENTS (cost $548,848,939)								545,968,271

TOTAL INVESTMENTS, BEFORE SECURITY SOLD SHORT — 106.5% (cost $1,908,031,342)								2,667,927,581

SEE NOTES TO FINANCIAL STATEMENTS.

A23


	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
SECURITY SOLD SHORT — (0.1)%
U.S. GOVERNMENT AGENCY OBLIGATION
Federal National Mortgage Assoc. (proceeds received $3,468,281)		3.500%	01/15/42		3,500	$	(3,476,758	)

TOTAL INVESTMENTS, NET OF SECURITY SOLD SHORT — 106.4% (cost $1,904,563,061)							2,664,450,823
LIABILITIES IN EXCESS OF OTHER ASSETS(l) — (6.4)%							(160,052,513	)

NET ASSETS — 100.0%						$	2,504,398,310

The following abbreviations are used in the Portfolio descriptions:


144A		Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
ABS		Asset-Backed Security
BABs		Build America Bonds
CDO		Collateralized Debt Obligation
CDX		Credit Derivative Index
CLO		Collateralized Loan Obligation
EAFE		Europe, Australasia and Far East
FHLMC		Federal Home Loan Mortgage Corp.
GO		General Obligation
I/O		Interest Only
LIBOR		London Interbank Offered Rate
MTN		Medium Term Note
MSCI		Morgan Stanley Capital International
PRFC		Preference Shares
REIT		Real Estate Investment Trust
SDR		Swedish Depositary Receipt
TBA		To Be Announced
TIPS		Treasury Inflation Protected Securities

*	Non-income producing security.

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

(a)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $89,513,399; cash collateral of $91,648,093 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b)	Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.

(c)	Indicates a security or securities that have been deemed illiquid.

(d)	Represents issuer in default on interest payments and/or principal repayment; non-income producing security. Such securities may be post maturity.

(e)	Indicates a restricted security; the aggregate original cost of the restricted securities is $3,962,968. The aggregate value of $4,232,200, is approximately 0.2% of net assets.

(f)	Represents zero coupon bond or principal only securities. Rate represents yield to maturity at purchase date.

(g)	Represents security, or a portion thereof, segregated as collateral for futures contracts.

(h)	Represents security, or a portion thereof, segregated as collateral for swap agreements.

(i)	Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund and the Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund.

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

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

SEE NOTES TO FINANCIAL STATEMENTS.

A24

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

Futures contracts outstanding at December 31, 2013:


Number of Contracts	Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation (Depreciation)
Long Positions:
132	90 Day Euro Dollar		Sept. 2016	$	32,420,825	$	32,321,850	$	(98,975	)
839	5 Year U.S. Treasury Notes		Mar. 2014		100,801,381		100,103,188		(698,193	)
167	10 Year U.S. Treasury Notes		Mar. 2014		20,733,733		20,548,828		(184,905	)
297	S&P 500 E-mini Futures		Mar. 2014		26,413,014		27,340,335		927,321
96	S&P 500 Index Futures		Mar. 2014		42,507,812		44,186,400		1,678,588

									1,623,836

Short Positions:
132	90 Day Euro Dollar		Sept. 2015		32,727,720		32,712,900		14,820
151	U.S. Long Bond		Mar. 2014		19,633,487		19,375,188		258,299
56	U.S. Ultra Bond		Mar. 2014		7,723,137		7,630,000		93,137

									366,256

								$	1,990,092

Interest rate swap agreements outstanding at December 31, 2013:


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
	Over-the-counter swap agreements:
	1,900		09/14/16		1.206%	3 month LIBOR(2)	$	(30,560	)	$	—	$	(30,560	)	Deutsche Bank
	11,150		02/28/17		0.680%	3 month LIBOR(1)		(69,174	)		—		(69,174	)	Citigroup Global Markets
	6,325		08/31/17		0.751%	3 Month LIBOR(2)		83,959			—		83,959		Bank of Nova Scotia
	2,634		05/17/18		0.989%	3 month LIBOR(2)		56,942			—		56,942		Credit Suisse First Boston Corp.

							$	41,167		$	—	$	41,167


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Value at Trade Date		Value at December 31, 2013			Unrealized Appreciation (Depreciation)
	Exchange-traded swap agreements:
	8,655		02/28/18		1.649%	3 month LIBOR(2)	$	189	$	(79,330	)	$	(79,519	)
	4,205		11/27/18		1.592%	3 month LIBOR(2)		169		32,061			31,892
	6,400		08/31/20		2.085%	3 month LIBOR(2)		188		118,335			118,147
	7,625		08/31/20		2.219%	3 month LIBOR(2)		196		76,034			75,838
	5,965		08/31/20		2.220%	3 month LIBOR(2)		186		59,115			58,929
	1,385		08/31/20		2.490%	3 month LIBOR(2)		158		(10,099	)		(10,257	)
	1,360		01/22/22		2.785%	3 month LIBOR(2)		158		(4,606	)		(4,764	)
	2,155		01/31/22		2.505%	3 month LIBOR(2)		163		38,560			38,397
	15,350		08/05/23		0.238%	3 month LIBOR(1)		—		(213,315	)		(213,315	)
	6,140		08/06/23		4.210%	3 month LIBOR(1)		—		(82,802	)		(82,802	)
	5,905		10/28/23		4.220%	3 month LIBOR(1)		177		(138,782	)		(138,959	)

							$	1,584	$	(204,829	)	$	(206,413	)

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

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

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

SEE NOTES TO FINANCIAL STATEMENTS.

A25

Credit default swap agreements outstanding at December 31, 2013:


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Value at Trade Date			Value at December 31, 2013			Unrealized Appreciation (Depreciation)
Exchange-Traded credit default swaps on credit indices—Buy Protection(1):
CDX.NA.IG.21.V1		12/20/18		1.000%	$	46,250	$	(467,199	)	$	(827,490	)	$	(360,291	)


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
Over-the-counter credit default swaps on corporate issues—Buy Protection(1):
Bunge Ltd. Finance Corp.		06/20/14		0.650%		1,110	$	(2,905	)	$	—	$	(2,905	)	JPMorgan Chase
Newell Rubbermaid, Inc.		06/20/18		1.000%		1,600		(41,402	)		—		(41,402	)	Morgan Stanley
Simon Property Group LP		06/20/18		0.970%		2,700		(62,630	)		—		(62,630	)	Morgan Stanley

							$	(106,937	)	$	—	$	(106,937	)


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Fair Value(4)		Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)		Counterparty
Over-the-counter credit default swaps on credit indices—Sell Protection(2):
CDX.NA.HY.17.V5		12/20/16		5.000%		1,200	$	112,179	$	50,007	$	62,172	Credit Suisse First Boston Corp.
CDX.NA.HY.17.V5		12/20/16		5.000%		3,120		291,665		133,918		157,747	Deutsche Bank
CDX.NA.HY.17.V5		12/20/16		5.000%		4,320		403,844		189,300		214,544	Deutsche Bank

							$	807,688	$	373,225	$	434,463

The Portfolio entered into credit default swaps as the protection seller on credit indices to take an active short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness.

(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 of (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)	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)

The fair value of credit default swap agreements on credit indices serves 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 occurring 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 generally in active markets for identical securities.

Level 2—

Level 3—

significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

SEE NOTES TO FINANCIAL STATEMENTS.

A26

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1			Level 2			Level 3
Investments in Securities
Common Stocks	$	1,285,156,020		$	167,629,974		$	—
Exchange Traded Fund		2,625,399			—			—
Preferred Stocks		545,000			1,066,386			—
Asset-Backed Securities
Collateralized Debt Obligations		—			413,522			—
Collateralized Loan Obligations		—			27,423,065			—
Non-Residential Mortgage-Backed Securities		—			10,477,462			—
Residential Mortgage-Backed Securities		—			8,744,415			—
Bank Loans		—			8,503,541			—
Commercial Mortgage-Backed Securities		—			86,960,809			—
Corporate Bonds		—			199,583,641			3,974,204
Municipal Bonds		—			12,299,428			—
Non-Corporate Foreign Agencies		—			18,689,410			—
Non-Corporate Sovereigns		—			5,747,942			—
Residential Mortgage-Backed Securities		—			5,354,499			—
U.S. Government Agency Obligations		—			202,651,679			—
U.S. Treasury Obligations		—			77,812,440			—
Affiliated Mutual Funds		542,267,956			—			—
Options Purchased		—			789			—
U.S. Government Agency Obligation Security Sold Short		—			(3,476,758	)		—
Other Financial Instruments*
Futures Contracts		1,990,092			—			—
Interest Rate Swaps Agreements		(206,413	)		41,167			—
Credit Default Swap Agreements		(360,291	)		327,526			—

Total	$	1,832,017,763		$	830,250,937		$	3,974,204

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

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


Affiliated Mutual Funds (including 3.7% of collateral received for securities on loan)	21.7	%
U.S. Government Agency Obligations	8.1
Oil, Gas & Consumable Fuels	4.8
Pharmaceuticals	3.6
Commercial Mortgage-Backed Securities	3.5
U.S. Treasury Obligations	3.1
Diversified Financial Services	2.7
Insurance	2.6
Commercial Banks	2.4
Banking	2.2
Computers & Peripherals	2.1
Media	2.1
IT Services	1.9
Software	1.8
Chemicals	1.6
Internet Software & Services	1.6
Aerospace & Defense	1.5
Food & Staples Retailing	1.4
Industrial Conglomerates	1.4
Diversified Telecommunication Services	1.3
Beverages	1.3
Capital Markets	1.3
Biotechnology	1.3
Real Estate Investment Trusts	1.2
Specialty Retail	1.2


Healthcare Providers & Services	1.1	%
Collateralized Loan Obligations	1.1
Household Products	1.1
Tobacco	1.1
Healthcare Equipment & Supplies	1.1
Semiconductors & Semiconductor Equipment	1.0
Food Products	1.0
Machinery	1.0
Hotels, Restaurants & Leisure	1.0
Energy Equipment & Services	1.0
Communications Equipment	0.9
Electric Utilities	0.9
Internet & Catalog Retail	0.8
Non-Corporate Foreign Agencies	0.7
Multi-Utilities	0.7
Automobiles	0.7
Metals & Mining	0.6
Residential Mortgage-Backed Securities	0.6
Telecommunications	0.6
Consumer Finance	0.5
Road & Rail	0.5
Municipal Bonds	0.5
Textiles, Apparel & Luxury Goods	0.5
Air Freight & Logistics	0.4
Electrical Equipment	0.4
Electric	0.4

SEE NOTES TO FINANCIAL STATEMENTS.

A27


Industry table (cont.)
Non-Residential Mortgage-Backed Securities	0.4	%
Healthcare & Pharmaceutical	0.4
Multiline Retail	0.4
Foods	0.4
Airlines	0.4
Cable	0.3
Auto Components	0.3
Electronic Equipment, Instruments & Components	0.3
Household Durables	0.3
Life Sciences Tools & Services	0.3
Commercial Services & Supplies	0.3
Lodging	0.3
Non-Captive Finance	0.3
Capital Goods	0.3
Energy – Other	0.2
Trading Companies & Distributors	0.2
Non-Corporate Sovereigns	0.2
Media & Entertainment	0.2
Automotive	0.2
Wireless Telecommunication Services	0.2
Construction & Engineering	0.2
Healthcare Insurance	0.2
Metals	0.1
Professional Services	0.1
Paper	0.1


Industry table (cont.)
Technology	0.1	%
Containers & Packaging	0.1
Retailers	0.1
Building Products	0.1
Exchange Traded Fund	0.1
Packaging	0.1
Real Estate Management & Development	0.1
Personal Products	0.1
Pipelines & Other	0.1
Leisure Equipment & Products	0.1
Consumer	0.1
Railroads	0.1
Brokerage	0.1
Paper & Forest Products	0.1
Transportation Infrastructure	0.1
Office Electronics	0.1
Gas Utilities	0.1
Building Materials & Construction	0.1
Healthcare Technology	0.1
Independent Power Producers & Energy Traders	0.1

	106.5
Short Sales – U.S. Government Agency Obligation	(0.1	)
Liabilities in excess of other assets	(6.4	)

	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit risk, equity 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, 2013 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	Premiums paid for swap agreements	$	373,225		—	$	—
Credit contracts	Unrealized appreciation on over-the-counter swap agreements		434,463		Unrealized depreciation on over-the-counter swap agreements		106,937
Credit contracts	—		—		Due from broker — variation margin		360,291	*
Equity contracts	Due from broker — variation margin		2,605,909	*	—		—
Interest rate contracts	Unaffiliated investments		789		—		—
Interest rate contracts	Unrealized appreciation on over-the-counter swap agreements		140,901		Unrealized depreciation on over-the-counter swap agreements		99,734
Interest rate contracts	Due from broker — variation margin		689,459	*	Due from broker — variation margin		1,511,689	*

Total		$	4,244,746			$	2,078,651

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

SEE NOTES TO FINANCIAL STATEMENTS.

A28

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Rights*		Options Purchased*			Options Written		Futures			Swaps			Total
Credit contracts	$	—	$	—		$	—	$	—		$	(280,315	)	$	(280,315	)
Equity contracts		8,191		—			—		11,121,860			—			11,130,051
Interest rate contracts		—		(212,653	)		18,490		(1,412,757	)		544,224			(1,062,696	)

Total	$	8,191	$	(212,653	)	$	18,490	$	9,709,103		$	263,909		$	9,787,040

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



Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Rights**			Options Purchased**			Futures			Swaps			Total
Credit contracts	$	—		$	—		$	—		$	(29,662	)	$	(29,662	)
Equity contracts		(690	)		—			2,955,956			—			2,955,266
Interest rate contracts		—			(82,037	)		(930,865	)		389,775			(623,127	)

Total	$	(690	)	$	(82,037	)	$	2,025,091		$	360,113		$	2,302,477

**	Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the year ended December 31, 2013, the Portfolio’s average volume of derivative activities is as follows:


Options Purchased (Cost)	Options Written (Premiums Received)	Futures Long Position (Value at Trade Date)	Futures Short Position (Value at Trade Date)
$104,487	$10,250	$169,940,310	$32,994,674


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))
$111,858	$43,738	$6,912

The Portfolio invested in financial instruments and derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting as well as instruments subject to collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.

Offsetting of financial instrument and derivative assets and liabilities:


Description	Gross Amounts Recognized			Gross Amounts not subject to netting			Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	89,513,399		$	—		$	—	$	89,513,399
Exchange-traded and cleared derivatives		237,238			—			—		237,238
Over-the-counter derivatives*		576,153			(789	)		—		575,364

										90,326,001

Liabilities:
Securities sold short		(3,476,758	)		3,476,758			—		—
Exchange-traded and cleared derivatives		—			—			—		—
Over-the-counter derivatives*		(206,671	)		—			—		(206,671	)

										(206,671	)

Collateral Amounts Pledged/(Received):
Securities on loan										(89,513,399	)
Exchange-traded and cleared derivatives										—
Over-the-counter derivatives										(341,731	)

Net Amount									$	264,200

Over-the-counter derivatives may consist of forward foreign currency exchange contracts, options contracts and swap agreements. The amounts disclosed above represent the exposure to one or more counterparties. For further detail on individual derivative contracts and the corresponding unrealized appreciation (depreciation) by counterparty, see the Schedule of Investments.

SEE NOTES TO FINANCIAL STATEMENTS.

A29


		*CONSERVATIVE BALANCED PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $89,513,399:
Unaffiliated investments (cost $1,362,964,795)	$	2,125,659,625
Affiliated investments (cost $545,066,547)		542,267,956
Cash		64,981
Foreign currency, at value (cost $453,660)		456,645
Receivable for investments sold		15,914,100
Dividends and interest receivable		6,360,474
Unrealized appreciation on swap agreements		575,364
Premiums paid for swap agreements		373,225
Due from broker-variation margin		237,238
Tax reclaim receivable		142,816
Prepaid expenses		22,127
Receivable for Series shares sold		11,178

Total Assets		2,692,085,729

LIABILITIES
Collateral for securities on loan		91,648,093
Payable for investments purchased		90,484,272
Securities sold short, at value (proceeds received $3,468,281)		3,476,758
Management fee payable		1,157,066
Payable for Series shares repurchased		416,840
Accrued expenses and other liabilities		296,793
Unrealized depreciation on swap agreements		206,671
Affiliated transfer agent fee payable		926

Total Liabilities		187,687,419

NET ASSETS	$	2,504,398,310

Net assets were comprised of:
Paid-in capital	$	1,580,090,082
Retained earnings		924,308,228

Net assets, December 31, 2013	$	2,504,398,310

Net asset value and redemption price per share, $2,504,398,310 / 121,368,729 outstanding shares of beneficial interest	$	20.63

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $185,692)	$	29,587,703
Interest income		26,581,239
Affiliated dividend income		1,888,130
Affiliated income from securities loaned, net		195,590

		58,252,662

EXPENSES
Management fee		13,206,907
Custodian’s fees and expenses		386,000
Shareholders’ reports		260,000
Audit fee		37,000
Trustees’ fees		32,000
Insurance expenses		29,000
Legal fees and expenses		14,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Commitment fee on syndicated credit agreement		4,000
Miscellaneous		52,521

Total expenses		14,033,428

NET INVESTMENT INCOME		44,219,234

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		89,090,519
Futures transactions		9,709,103
Swap agreement transactions		263,909
Written options		18,490
Foreign currency transactions		(61,119	)

		99,020,902

Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $3,105,162)		212,207,613
Securities sold short		(821	)
Futures		2,025,091
Swap agreements		360,113
Foreign currencies		9,181

		214,601,177

NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		313,622,079

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	357,841,313

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	44,219,234		$	48,100,637
Net realized gain on investment and foreign currency transactions		99,020,902			40,776,625
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		214,601,177			152,480,681

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		357,841,313			241,357,943

DISTRIBUTIONS		—			(47,221,872	)

SERIES SHARE TRANSACTIONS:
Series shares sold [937,002 and 580,731 shares, respectively]		18,092,234			10,042,436
Series shares issued in reinvestment of distributions [0 and 2,817,534 shares, respectively]		—			47,221,872
Series shares repurchased [8,251,336 and 8,997,150 shares, respectively]		(158,563,701	)		(155,986,711	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(140,471,467	)		(98,722,403	)

TOTAL INCREASE IN NET ASSETS		217,369,846			95,413,668
NET ASSETS:
Beginning of year		2,287,028,464			2,191,614,796

End of year	$	2,504,398,310		$	2,287,028,464

SEE NOTES TO FINANCIAL STATEMENTS.

A30


LONG-TERM INVESTMENTS — 89.5% ASSET-BACKED SECURITIES — 11.6%	Interest Rate			Maturity Date	Principal Amount (000)#			Value (Note 2)
Collateralized Debt Obligations
Eaton Vance CDO IX Ltd. (Cayman Islands), Series 2007-9A, Class A1A, 144A		0.452%	(a)	04/20/19(b)			444	$	442,479

Collateralized Loan Obligations — 4.5%
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class A, 144A		1.422%	(a)	04/20/25			3,300		3,244,532
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class B2, 144A		3.360%		04/20/25			500		490,299
Battalion CLO Ltd. (Cayman Islands), Series 2013-4A, Class A1, 144A		1.689%	(a)	10/22/25			1,300		1,283,741
Benefit Street Partners CLO Ltd. (Cayman Islands), Series 2013-IIA, Class A1, 144A		1.472%	(a)	07/15/24			900		880,893
Black Diamond CLO Delaware Corp. (Cayman Islands), Series 2005-1A, Class A1, 144A		0.515%	(a)	06/20/17			1,618		1,609,928
Blue Hill CLO Ltd. (Cayman Islands), Series 2013-1A, Class A, 144A		1.767%	(a)	01/15/26			700		697,262
Brookside Mill CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.394%	(a)	04/17/25			2,600		2,541,105
Carlyle Daytona CLO Ltd. (Cayman Islands), Series 2007-1A, Class A1L, 144A		0.488%	(a)	04/27/21	��		416		408,823
Flagship CLO (Cayman Islands), Series 2013-7A, Class A1, 144A		1.714%	(a)	01/20/26			2,500		2,490,000
Flatiron CLO Ltd., Series 2013-1A, Class A1, 144A		1.641%	(a)	01/17/26			3,750		3,720,076
Four Corners CLO Ltd. (Cayman Islands), Series 2006-3A, Class A, 144A		0.491%	(a)	07/22/20			987		975,689
Fraser Sullivan CLO Ltd. (Cayman Islands), Series 2006-1A, Class B, 144A		0.713%	(a)	03/15/20			1,500		1,458,469
ING Investment Management CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.384%	(a)	04/15/24			4,200		4,121,715
LCM CLO LP (Cayman Islands), Series 2005-3A, Class A, 144A		0.499%	(a)	06/01/17			150		149,416
LightPoint CLO Ltd., Series 2005-3A, Class A1A, 144A		0.503%	(a)	09/15/17			1,302		1,289,429
Mountain Capital CLO IV Ltd. (Cayman Islands), Series 2005-4A, Class A1L, 144A		0.493%	(a)	03/15/18			433		431,129
North Westerly CLO BV (Netherlands), Series II-A, Class A, 144A		0.721%		09/14/19		EUR	2,671		3,616,071
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class A2, 144A		1.718%	(a)	11/22/23			2,800		2,792,807
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class B, 144A		2.438%	(a)	11/22/23			2,700		2,650,304
OCP CLO Ltd. (Cayman Islands), Series 2013-4A, Class A2, 144A		2.052%	(a)	10/24/25			2,200		2,164,078
OHA Intrepid Leveraged Loan Fund CLO Ltd. (Cayman Islands), Series 2011-1AR, Class AR, 144A		1.162%	(a)	04/20/21			4,128		4,098,899
Shackleton CLO Ltd. (Cayman Islands), Series 2013-3A, Class B2, 144A		3.440%		04/15/25			700		689,749
Sheridan Square CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.294%	(a)	04/15/25			7,300		7,135,003
Trimaran CLO VI Ltd. (Cayman Islands), Series 2006-2A, Class A1L, 144A		0.492%	(a)	11/01/18			1,414		1,398,983
Tyron Park CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.393%	(a)	07/15/25			300		293,939
Wind River CLO Ltd. (Cayman Islands), Series 2013-2A, Class A1, 144A		1.694%	(a)	01/18/26			3,300		3,281,766

									53,914,105

Non-Residential Mortgage-Backed Securities — 1.6%
Bank One Issuance Trust, Series 2004-C2, Class C2		0.967%	(a)	02/15/17			2,100		2,102,119
Citibank Credit Card Issuance Trust, Series 2005-C2, Class C2		0.634%	(a)	03/24/17			2,320		2,315,692
GE Business Loan Trust, Series 2006-1A, Class D, 144A		1.167%	(a)	05/15/34			184		131,229

SEE NOTES TO FINANCIAL STATEMENTS.

A31


ASSET-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Non-Residential Mortgage-Backed Securities (continued)
Marriott Vacation Club Owner Trust, Series 2010-1A, Class A, 144A		3.540%		10/20/32		2,967	$	3,062,447
MBNA Credit Card Master Note Trust, Series 2004-C2, Class C2		1.067%	(a)	11/15/16		9,800		9,821,511
SVO VOI Mortgage Corp., Series 2012-AA, Class A, 144A		2.000%		09/20/29		1,765		1,760,192

								19,193,190

Residential Mortgage-Backed Securities — 5.5%
ABFC Trust, Series 2004-OPT1, Class M1		1.215%	(a)	08/25/33		1,600		1,499,967
ACE Securities Corp. Home Equity Loan Trust, Series 2004-FM1, Class M1		1.065%	(a)	09/25/33		1,521		1,411,670
Alternative Loan Trust, Series 2004-18CB, Class 3A1		5.250%		09/25/19		585		596,855
Ameriquest Mortgage Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2004-R8, Class M1		1.125%	(a)	09/25/34		950		915,689
Argent Securities, Inc., Series 2003-W2, Class M4		5.790%	(a)	09/25/33		2,400		2,231,467
Argent Securities, Inc., Series 2004-W10, Class A2		0.945%	(a)	10/25/34		1,802		1,711,689
Argent Securities, Inc., Series 2004-W6, Class M1		0.715%	(a)	05/25/34		2,159		2,106,663
Asset-Backed Securities Corp. Home Equity Loan Trust, Series 2003-HE3, Class M1		1.412%	(a)	06/15/33		1,368		1,291,041
Asset-Backed Securities Corp. Home Equity Loan Trust, Series 2004-HE1, Class M1		1.217%	(a)	01/15/34		235		225,485
Asset-Backed Securities Corp. Home Equity Loan Trust, Series 2004-HE5, Class M1		1.065%	(a)	08/25/34		2,081		1,996,694
Bear Stearns Asset-Backed Securities Trust, Series 2004-HE2, Class M1		1.066%	(a)	03/25/34		4,784		4,453,453
Bear Stearns Asset-Backed Securities Trust, Series 2004-HE3, Class M2		1.890%	(a)	04/25/34		1,935		1,698,509
CDC Mortgage Capital Trust, Series 2002-HE3, Class M2		3.541%	(a)	03/25/33		224		23,527
Centex Home Equity Loan Trust, Series 2004-B, Class AF6		4.686%		03/25/34		1,216		1,217,123
Credit Suisse First Boston Mortgage Securities Corp., Series 2002-HE4, Class M2		2.416%	(a)	08/25/32		78		66,890
Equity One Mortgage Pass-Through Trust, Series 2004-3, Class M1		5.121%		07/25/34		641		608,676
FBR Securitization Trust, Series 2005-2, Class M1		0.886%	(a)	09/25/35		3,600		3,382,085
Floating Rate Mortgage Pass-Through Certificates, Series 2001-2, Class M3		3.090%	(a)	10/25/31		492		386,874
Fremont Home Loan Trust, Series 2003-B, Class M1		1.215%	(a)	12/25/33		243		228,651
GSAMP Trust, Series 2004-FM1, Class M1		1.140%	(a)	11/25/33		2,391		2,319,012
HSBC Home Equity Loan Trust, Series 2006-1, Class M1		0.447%	(a)	01/20/36		583		558,814
HSBC Home Equity Loan Trust, Series 2006-2, Class A1		0.317%	(a)	03/20/36		156		152,041
HSBC Home Equity Loan Trust, Series 2006-2, Class A2		0.347%	(a)	03/20/36		189		184,244
Long Beach Mortgage Loan Trust, Series 2004-1, Class M1		0.915%	(a)	02/25/34		4,250		3,957,753
MASTR Alternative Loan Trust, Series 2004-4, Class 4A1		5.000%		04/25/19		125		128,042
MASTR Asset-Backed Securities Trust, Series 2004-WMC1, Class M1		0.945%	(a)	02/25/34		2,381		2,349,087
Merrill Lynch Mortgage Investors Trust, Series 2004-HE2, Class M1		0.965%	(a)	08/25/35		776		686,896
Merrill Lynch Mortgage Investors Trust, Series 2004-OPT1, Class A1A		0.686%	(a)	06/25/35		2,154		2,019,000
Morgan Stanley ABS Capital I, Inc. Trust, Series 2003-HE1, Class M1		1.365%	(a)	05/25/33		1,412		1,314,802
Morgan Stanley ABS Capital I, Inc. Trust, Series 2003-HE3, Class M1		1.185%	(a)	10/25/33		1,090		1,006,222
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-NC1, Class M1		1.215%	(a)	12/25/33		869		835,059
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-OP1, Class M1		1.035%	(a)	11/25/34		3,688		3,257,144
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-WMC1, Class M1		1.095%	(a)	06/25/34		2,415		2,243,820

SEE NOTES TO FINANCIAL STATEMENTS.

A32


ASSET-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#			Value (Note 2)
Residential Mortgage-Backed Securities (continued)
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-WMC2, Class M1		1.080%	(a)	07/25/34			1,908	$	1,808,872
New Century Home Equity Loan Trust, Series 2003-4, Class M1		1.290%	(a)	10/25/33			3,219		3,104,922
New Century Home Equity Loan Trust, Series 2004-4, Class M1		0.930%	(a)	02/25/35			3,048		2,716,185
Residential Asset Mortgage Products, Inc., Series 2004-RS12, Class MII2		1.365%	(a)	12/25/34			477		468,480
Residential Asset Securities Corp., Series 2004-KS1, Class AI5		5.221%		02/25/34			1,000		1,058,562
Saxon Asset Securities Trust, Series 2002-3, Class M1		1.290%	(a)	12/25/32			199		181,427
Securitized Asset-Backed Receivables LLC Trust, Series 2004-NC1, Class M1		0.945%	(a)	02/25/34			3,601		3,220,716
Specialty Underwriting & Residential Finance Trust, Series 2004-BC1, Class M1		0.930%	(a)	02/25/35			76		71,913
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-1, Class 4A3		2.906%	(a)	02/25/34			1,596		1,596,851
Structured Asset Investment Loan Trust, Series 2004-2, Class A4		0.870%	(a)	03/25/34			2,297		2,153,416
Structured Asset Investment Loan Trust, Series 2004-7, Class A8		1.365%	(a)	08/25/34			1,400		1,258,698
Structured Asset Securities Corp. Mortgage Pass-Through Certificates, Series 2002-HF2, Class M3		3.165%	(a)	07/25/32			996		924,644
Washington Mutual Mortgage Pass-Through Certificates, Series 2005-1, Class 3A		5.000%		03/25/20			524		533,946

									66,163,576

TOTAL ASSET-BACKED SECURITIES (cost $130,656,086)									139,713,350

BANK LOANS(a) — 3.1%
Automotive — 0.1%
Chrysler Group LLC		3.750%		05/24/17			1,356		1,361,760

Banking — 0.2%
AA Group (United Kingdom)		3.264%		07/31/18		GBP	1,212		1,993,684

Cable
Cequel Communication LLC		3.500%		02/14/19			295		295,951

Capital Goods — 0.1%
Gardner Denver, Inc. (original cost $1,375,306; purchased 07/24/13)		4.750%		07/30/20(b)(c)		EUR	1,047		1,447,483

Chemicals — 0.1%
Ceramtec GmbH (Germany)		4.750%		08/30/20		EUR	690		960,841
Ceramtec GmbH (Germany)		4.750%		08/30/20		EUR	210		292,254

									1,253,095

Electric — 0.1%
Calpine Corp.		4.000%		04/01/18			821		825,261

Financials — 0.2%
Scandlines GmbH (Germany)		4.691%		12/03/20		EUR	2,000		2,785,803

Gaming — 0.2%
CCM Merger, Inc.		5.000%		03/01/17			2,469		2,490,321

Healthcare & Pharmaceutical — 0.7%
Alere, Inc.		3.198%		06/30/16			468		466,329
DaVita, Inc.		4.000%		11/01/19			1,036		1,041,235
HCA, Inc.		2.919%		03/31/17			1,105		1,105,305
HCA, Inc.		2.997%		05/01/18			461		460,728
Quintiles Transnational Corp.		4.000%		06/08/18			1,473		1,471,390
RPI Finance Trust (Luxembourg)		3.250%		09/05/18			3,861		3,864,383

									8,409,370

SEE NOTES TO FINANCIAL STATEMENTS.

A33


BANK LOANS(a) (continued)	Interest Rate			Maturity Date	Principal Amount (000)#			Value (Note 2)
Media & Entertainment — 0.4%
ProSiebenSat 1 Media AG (Germany)		2.970%		07/03/18		EUR	2,805	$	3,859,791

Non-Captive Finance — 0.1%
RBS WorldPay, Inc. (United Kingdom)		5.750%		11/29/19		GBP	900		1,498,878

Retailers — 0.3%
Alliance Boots Holdings Ltd. (United Kingdom)		3.970%		07/09/17		GBP	2,000		3,303,636

Technology — 0.4%
First Data Corp.		4.164%		03/24/17			183		183,123
First Data Corp.		4.164%		03/26/18			2,411		2,411,793
Freescale Semiconductor, Inc.		5.000%		02/28/20			1,737		1,754,244
Sensata Technologies BV, Inc. (Netherlands)		3.250%		12/05/19			437		439,347

									4,788,507

Transportation — 0.2%
RAC PLC (original cost $2,404,536; purchased 10/24/12)		5.344%		10/29/19(b)(c)		GBP	1,500		2,505,672

TOTAL BANK LOANS (cost $35,335,529)									36,819,212

COMMERCIAL MORTGAGE-BACKED SECURITIES — 13.3%
Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4		5.889%	(a)	07/10/44			1,591		1,730,866
Banc of America Commercial Mortgage Trust, Series 2006-5, Class A2		5.317%		09/10/47			2,204		2,216,466
Banc of America Commercial Mortgage Trust, Series 2006-6, Class A2		5.309%		10/10/45			385		385,349
Banc of America Commercial Mortgage Trust, Series 2006-6, Class A4		5.356%		10/10/45			800		861,267
Banc of America Commercial Mortgage Trust, Series 2007-1, Class A3		5.449%		01/15/49			654		653,609
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A1A		5.572%	(a)	04/10/49			1,762		1,916,081
Banc of America Commercial Mortgage Trust, Series 2007-4, Class A3		5.813%	(a)	02/10/51			3,749		3,821,904
Banc of America Commercial Mortgage Trust, Series 2007-5, Class A3		5.620%		02/10/51			2,390		2,399,218
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A2		4.735%		09/11/42			11		10,969
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class A4		5.705%	(a)	12/10/49			1,590		1,778,231
Citigroup Commercial Mortgage Trust, Series 2013-GC11, Class A3		2.815%		04/10/46			2,800		2,598,789
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2006-CD2, Class AAB		5.334%	(a)	01/15/46			1,154		1,167,718
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD4, Class A3		5.293%		12/11/49			2,515		2,561,394
Commercial Mortgage Pass-Through Certificates, Series 2012-CR5, Class A3		2.540%		12/10/45			2,000		1,832,762
Commercial Mortgage Pass-Through Certificates, Series 2013-CR11, Class A3		3.983%		10/10/46			3,600		3,608,341
Commercial Mortgage Pass-Through Certificates, Series 2013-CR12, Class A3		3.765%		10/10/46			6,500		6,398,288
Commercial Mortgage Trust, Series 2005-GG3, Class AJ		4.859%	(a)	08/10/42			1,700		1,757,307
Commercial Mortgage Trust, Series 2006-C7, Class A4		5.752%	(a)	06/10/46			4,000		4,349,628
Commercial Mortgage Trust, Series 2007-GG9, Class A2		5.381%		03/10/39			2,560		2,617,652
Commercial Mortgage Trust, Series 2013-CR7, Class A3		2.929%		03/10/46			3,900		3,659,776
Credit Suisse Commercial Mortgage Trust, Series 2007-C4, Class A2		5.760%	(a)	09/15/39			266		265,724

SEE NOTES TO FINANCIAL STATEMENTS.

A34


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date		Principal Amount (000)#		Value (Note 2)
Credit Suisse Commercial Mortgage Trust, Series 2007-C4, Class A3		5.760%	(a)	09/15/39			10,550	$	10,638,225
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class AM		5.465%	(a)	02/15/39			970		1,036,486
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class X1, I/O		1.473%	(a)	05/25/22			29,181		2,744,273
FHLMC Multifamily Structured Pass-Through Certificates, Series K021, Class X1, I/O		1.512%	(a)	06/25/22			16,607		1,630,060
FHLMC Multifamily Structured Pass-Through Certificates, Series K501, Class X1A, I/O		1.751%	(a)	08/25/16			11,883		370,527
FHLMC Multifamily Structured Pass-Through Certificates, Series K710, Class X1, I/O		1.783%	(a)	05/25/19			23,349		1,879,163
FHLMC Multifamily Structured Pass-Through Certificates, Series K711, Class X1, I/O		1.710%	(a)	07/25/19			27,895		2,193,178
GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A2		5.417%		12/10/49			4,979		4,976,488
GS Mortgage Securities Trust, Series 2006-GG6, Class A4		5.553%	(a)	04/10/38			6,700		7,214,594
GS Mortgage Securities Trust, Series 2013-GC12, Class A3		2.860%		06/10/46			4,600		4,272,291
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP4, Class AM		4.999%	(a)	10/15/42			1,820		1,927,580
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LD11, Class A2		5.791%	(a)	06/15/49			4,252		4,284,029
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LD12, Class A3		5.927%	(a)	02/15/51			9,174		9,256,667
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2012-LC9, Class A4		2.611%		12/15/47			2,000		1,836,178
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class A4		2.875%		12/15/47			4,600		4,293,571
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-LC11, Class A4		2.694%		04/15/46			4,600		4,210,877
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class AM		5.263%	(a)	11/15/40			2,100		2,250,854
LB-UBS Commercial Mortgage Trust, Series 2006-C7, Class A2		5.300%		11/15/38			880		912,269
Merrill Lynch Mortgage Trust, Series 2007-C1, Class A3		5.859%	(a)	06/12/50			526		541,654
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-4, Class A2		5.112%		12/12/49			483		483,100
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-9, Class A2		5.590%		09/12/49			777		777,822
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C10, Class A3		3.968%	(a)	07/15/46	��		4,800		4,882,800
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C12, Class A3		3.973%		10/15/46			3,600		3,641,947
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C8, Class A3		2.863%		12/15/48			1,700		1,592,127
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C9, Class A3		2.834%		05/15/46			2,300		2,131,716
Morgan Stanley Capital I Trust, Series 2006-T23, Class A3		5.807%	(a)	08/12/41			1,318		1,324,661
Morgan Stanley Capital I Trust, Series 2007-IQ14, Class AAB		5.654%	(a)	04/15/49			4,150		4,305,069
UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A4		2.792%		12/10/45			2,300		2,143,957
UBS-Barclays Commercial Mortgage Trust, Series 2013-C5, Class A3		2.920%		03/10/46			4,600		4,310,485
UBS-Barclays Commercial Mortgage Trust, Series 2013-C6, Class A3		2.971%		04/10/46			3,800		3,568,850
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX		5.179%	(a)	07/15/42			3,145		3,337,518
Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A2		5.500%		10/15/48			69		69,439

SEE NOTES TO FINANCIAL STATEMENTS.

A35


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Wachovia Bank Commercial Mortgage Trust, Series 2007-C31, Class A4		5.509%		04/15/47(d)		5,150	$	5,620,896
Wachovia Bank Commercial Mortgage Trust, Series 2007-C32, Class A1A		5.733%	(a)	06/15/49		2,716		2,997,077
Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class A3		5.925%	(a)	02/15/51		3,421		3,463,912
Wachovia Bank Commercial Mortgage Trust, Series 2007-C34, Class A2		5.569%		05/15/46		1,973		1,969,559

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $163,670,068)								159,681,238

CORPORATE BONDS — 46.8%
Aerospace & Defense — 0.2%
Textron, Inc., Sr. Unsec’d. Notes		7.250%		10/01/19		2,350		2,720,546

Airlines — 0.5%
Continental Airlines, Inc. Pass-Through Trust, Pass-Through Certificates, Ser. 2001-1, Class A-1		6.703%		06/15/21(b)		2		2,558
Continental Airlines, Inc. Pass-Through Trust, Pass-Through Certificates, Series 2001-1, Class B		7.373%		12/15/15		394		420,489
Continental Airlines, Inc. Pass-Through Trust, Pass-Through Certificates, Series 2007-2, Class A		5.983%		04/19/22		1,591		1,738,097
Continental Airlines, Inc. Pass-Through Trust, Pass-Through Certificates, Series 2010-1, Class A		4.750%		01/12/21(d)		500		530,797
Delta Air Lines Pass-Through Trust, Pass-Through Certificates, Series 2007-1, Class A		6.821%		08/10/22		1,248		1,407,064
Delta Air Lines Pass-Through Trust, Pass-Through Certificates, Series 2010-2, Class A		4.950%		05/23/19(d)		623		671,591
Delta Air Lines Pass-Through Trust, Pass-Through Certificates, Series 2011-1, Class A		5.300%		04/15/19		648		706,704
United Airlines Pass-Through Trust, Pass-Through Certificates, Series 071A, Class A		6.636%		07/02/22		931		986,931

								6,464,231

Automotive — 1.2%
Cummins, Inc., Sr. Unsec’d. Notes		4.875%		10/01/43		125		125,186
Delphi Corp., Gtd. Notes		5.875%		05/15/19		1,400		1,480,500
Ford Motor Co., Sr. Unsec’d. Notes		4.750%		01/15/43		750		676,406
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes		2.375%		01/16/18		2,225		2,247,161
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes		3.984%		06/15/16		375		398,775
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes		4.207%		04/15/16		4,630		4,933,441
General Motors Co., Sr. Unsec’d. Notes, 144A		4.875%		10/02/23		1,350		1,366,875
General Motors Co., Sr. Unsec’d. Notes, 144A		6.250%		10/02/43		1,885		1,958,044
Harley-Davidson Funding Corp., Gtd. Notes, MTN, 144A		5.750%		12/15/14		660		689,282

								13,875,670

Banking — 10.5%
American Express Co., Sr. Unsec’d. Notes		2.650%		12/02/22		3,202		2,970,412
Bangkok Bank PCL (Thailand), Sr. Unsec’d. Notes, 144A		3.875%		09/27/22(d)		1,730		1,607,955
Bank of America Corp., Jr. Sub. Notes, Series K		8.000%	(a)	12/29/49(d)		3,500		3,878,000
Bank of America Corp., Sr. Unsec’d. Notes, MTN		3.300%		01/11/23		4,275		4,045,291
Bank of America Corp., Sr. Unsec’d. Notes		5.700%		01/24/22		1,775		2,009,043
Bank of America Corp., Sr. Unsec’d. Notes		6.000%		09/01/17		4,590		5,240,825
Bank of America Corp., Sr. Unsec’d. Notes, Series 1		3.750%		07/12/16		1,340		1,424,577
Bank of America NA, Sub. Notes		5.300%		03/15/17		790		870,755
Barclays Bank PLC, Sr. Unsec’d. Notes		6.750%		05/22/19(d)		1,610		1,940,486
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		7.250%		02/01/18		1,575		1,885,859
Capital One Financial Corp., Sr. Unsec’d. Notes		5.250%		02/21/17		2,460		2,659,796
Capital One Financial Corp., Sub. Notes		6.150%		09/01/16		700		782,937
Citigroup, Inc., Sr. Unsec’d. Notes		6.125%		11/21/17		2,050		2,363,053

SEE NOTES TO FINANCIAL STATEMENTS.

A36


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Banking (continued)
Citigroup, Inc., Sr. Unsec’d. Notes		6.125%		05/15/18(d)		2,500	$	2,893,223
Citigroup, Inc., Sr. Unsec’d. Notes		8.125%		07/15/39(d)		4,120		5,779,075
Citigroup, Inc., Sr. Unsec’d. Notes		8.500%		05/22/19		1,375		1,762,185
Discover Bank, Sub. Notes		7.000%		04/15/20		2,005		2,331,789
Euasian Development Bank (Supranational Bank), Sr. Unsec’d. Notes, 144A		5.000%		09/26/20		1,600		1,628,000
Fifth Third Bank, Sr. Unsec’d. Notes		1.450%		02/28/18		3,275		3,191,203
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		5.750%		01/24/22		4,200		4,727,890
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.000%		06/15/20		2,420		2,774,716
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.150%		04/01/18		1,355		1,553,747
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.250%		09/01/17		3,195		3,657,828
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.250%		02/01/41		2,195		2,529,518
Goldman Sachs Group, Inc. (The), Sub. Notes		6.750%		10/01/37		440		489,520
HSBC Holdings PLC (United Kingdom), Sub. Notes		6.500%		09/15/37		1,625		1,921,946
Huntington Bancshares, Inc., Sub. Notes		7.000%		12/15/20(d)		260		301,506
ICICI Bank Ltd. (India), Jr. Sub. Notes, 144A		7.250%	(a)	08/29/49		2,380		2,225,300
ING Bank NV (Netherlands), Unsec’d. Notes, 144A		2.000%		09/25/15		770		782,757
Intesa Sanpaolo SpA, Sr. Unsec’d. Notes		3.125%		01/15/16		1,625		1,655,976
JPMorgan Chase & Co., Jr. Sub. Notes		7.900%	(a)	04/29/49(d)		6,130		6,758,325
JPMorgan Chase & Co., Sr. Unsec’d. Notes		3.150%		07/05/16		2,245		2,353,618
JPMorgan Chase & Co., Sr. Unsec’d. Notes		3.250%		09/23/22		500		479,161
JPMorgan Chase & Co., Sr. Unsec’d. Notes		4.250%		10/15/20		600		636,022
JPMorgan Chase & Co., Sr. Unsec’d. Notes		4.400%		07/22/20		5,100		5,482,291
JPMorgan Chase & Co., Sub. Notes		5.625%		08/16/43		675		713,322
KeyCorp, Sr. Unsec’d. Notes, MTN		5.100%		03/24/21(d)		1,155		1,262,315
Krung Thai Bank PCL (Thailand), Bank Gtd. Notes		7.378%	(a)	10/29/49		1,590		1,613,799
Lloyds TSB Bank PLC (United Kingdom), Bank Gtd. Notes, MTN, 144A		5.800%		01/13/20		2,650		3,038,143
Mizuho Bank Ltd. (Japan), Gtd. Notes, 144A		1.850%		03/21/18(d)		1,125		1,096,504
Morgan Stanley, Notes, GMTN		5.450%		01/09/17		4,035		4,474,819
Morgan Stanley, Sr. Unsec’d. Notes, GMTN		5.500%		07/28/21		3,830		4,279,864
Morgan Stanley, Sr. Unsec’d. Notes, MTN		5.625%		09/23/19		2,635		2,995,168
Morgan Stanley, Sr. Unsec’d. Notes		5.750%		01/25/21		1,920		2,172,027
Northern Trust Corp., Sub. Notes		3.950%		10/30/25(d)		3,025		2,947,847
People’s United Financial, Inc., Sr. Unsec’d. Notes		3.650%		12/06/22		1,675		1,583,558
Royal Bank of Scotland Group PLC (The) (United Kingdom), Sr. Unsec’d. Notes		2.550%		09/18/15		625		639,223
Santander Holdings USA, Inc., Sr. Unsec’d. Notes		3.000%		09/24/15		950		981,017
Santander Holdings USA, Inc., Sr. Unsec’d. Notes		4.625%		04/19/16		525		559,835
State Street Corp., Jr. Sub. Debs		4.956%		03/15/18		3,025		3,281,823
Sumitomo Mitsui Banking Corp. (Japan), Bank Gtd. Notes		3.000%		01/18/23(d)		2,250		2,087,838
US Bancorp, Jr. Sub. Notes		3.442%		02/01/16		4,120		4,297,518

								125,619,205

Brokerage — 0.2%
Jefferies Group LLC, Sr. Unsec’d. Notes		6.500%		01/20/43		650		644,531
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes(j)		6.875%		05/02/18		2,740		592,525
Nomura Holdings, Inc. (Japan), Sr. Unsec’d. Notes, MTN		2.000%		09/13/16		950		957,854

								2,194,910

Building Materials & Construction — 1.1%
Building Materials Corp. of America, Gtd. Notes, 144A (original cost $1,800,725; purchased 05/09/13)		7.500%		03/15/20(c)		1,615		1,744,200
Cemex Espana Luxembourg, Sr. Sec’d. Notes		9.875%		04/30/19		1,000		1,142,500
Cemex Finance LLC, Sr. Sec’d. Notes, 144A		9.875%		04/30/19(d)		1,360		1,553,800
Mohawk Industries, Inc., Sr. Unsec’d. Notes		3.850%		02/01/23		594		564,300
Odebrecht Finance Ltd. (Brazil), Gtd. Notes, 144A		5.125%		06/26/22(d)		2,000		1,957,500
Odebrecht Finance Ltd. (Brazil), Gtd. Notes, 144A		7.125%		06/26/42		1,540		1,422,575
Toll Brothers Finance Corp., Gtd. Notes		5.150%		05/15/15		4,695		4,900,406

								13,285,281

SEE NOTES TO FINANCIAL STATEMENTS.

A37


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Cable — 1.9%
Columbus International, Inc. (Barbados), Sr. Sec’d. Notes, 144A (original cost $410,238; purchased 09/13/12)		11.500%	11/20/14(b)(c)		370	$	398,675
CSC Holdings LLC, Sr. Unsec’d. Notes		6.750%	11/15/21(d)		2,225		2,397,438
CSC Holdings LLC, Sr. Unsec’d. Notes		8.625%	02/15/19		1,610		1,887,725
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.500%	03/01/16		2,825		2,965,371
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.550%	03/15/15		275		284,066
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		5.150%	03/15/42		1,375		1,234,890
DISH DBS Corp., Gtd. Notes		6.625%	10/01/14		1,400		1,456,000
Nara Cable Funding Ltd. (Spain), Sr. Sec’d. Notes, RegS		8.875%	12/01/18	EUR	800		1,193,099
NBCUniversal Media LLC, Gtd. Notes		4.375%	04/01/21		1,350		1,428,870
NBCUniversal Media LLC, Gtd. Notes		4.450%	01/15/43(d)		2,675		2,396,329
TCI Communications, Inc., Sr. Unsec’d. Notes		7.875%	02/15/26		750		971,611
Time Warner Cable, Inc., Gtd. Notes		6.750%	07/01/18(d)		2,620		2,938,168
Videotron Ltd. (Canada), Gtd. Notes		9.125%	04/15/18		953		998,268
Virgin Media Secured Finance PLC (United Kingdom), Sr. Sec’d. Notes, 144A		6.000%	04/15/21	GBP	1,050		1,786,572

							22,337,082

Capital Goods — 1.4%
Ashtead Capital, Inc. (United Kingdom), Sec’d. Notes, 144A		6.500%	07/15/22		1,375		1,466,094
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $1,098,609; purchased 05/30/13)		6.700%	06/01/34(b)(c)		920		1,021,209
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $996,365; purchased 05/14/13)		7.000%	10/15/37(b)(c)		770		911,236
General Electric Co., Sr. Unsec’d. Notes		4.125%	10/09/42		1,275		1,177,919
Hertz Corp. (The), Gtd. Notes		6.750%	04/15/19(d)		1,500		1,616,250
Ingersoll-Rand Global Holding Co. Ltd., Gtd. Notes, 144A		5.750%	06/15/43		425		431,363
Penske Truck Leasing Co. LP/PTL Finance Corp., Sr. Unsec’d. Notes, 144A (original cost $474,815; purchased 07/10/12)		2.500%	07/11/14(b)(c)		475		478,866
Penske Truck Leasing Co. LP/PTL Finance Corp., Sr. Unsec’d. Notes, 144A (original cost $2,022,003; purchased 09/24/12)		2.500%	03/15/16(b)(c)		2,025		2,074,647
Penske Truck Leasing Co. LP/PTL Finance Corp., Unsec’d. Notes, 144A (original cost $674,345; purchased 05/08/12)		3.125%	05/11/15(b)(c)		675		694,224
Pentair Finance SA, Gtd. Notes		1.875%	09/15/17		625		617,459
Rockwell Automation, Inc., Sr. Unsec’d. Notes		5.200%	01/15/98		1,100		945,700
United Rentals North America, Inc., Gtd. Notes		7.625%	04/15/22		1,700		1,889,125
United Technologies Corp., Sr. Unsec’d. Notes		4.500%	06/01/42		1,675		1,626,571
Xylem, Inc., Sr. Unsec’d. Notes		4.875%	10/01/21		1,960		2,043,180

							16,993,843

Chemicals — 1.5%
Agrium, Inc. (Canada), Sr. Unsec’d. Notes		4.900%	06/01/43(d)		1,300		1,203,804
Agrium, Inc. (Canada), Sr. Unsec’d. Notes		6.125%	01/15/41		450		484,350
Ashland, Inc., Gtd. Notes		4.750%	08/15/22(d)		875		831,250
CF Industries, Inc., Gtd. Notes		4.950%	06/01/43(d)		675		614,322
CF Industries, Inc., Gtd. Notes		6.875%	05/01/18		380		440,729
CF Industries, Inc., Gtd. Notes		7.125%	05/01/20		300		351,643
Dow Chemical Co. (The), Sr. Unsec’d. Notes		9.400%	05/15/39(d)		1,252		1,870,374
LyondellBasell Industries NV, Sr. Unsec’d. Notes		6.000%	11/15/21		3,550		4,082,898
Mexichem SAB de CV, Sr. Unsec’d. Notes, 144A		4.875%	09/19/22		850		833,000
Mosaic Co. (The), Sr. Unsec’d. Notes		5.450%	11/15/33		655		667,345
Mosaic Co. (The), Sr. Unsec’d. Notes		5.625%	11/15/43		1,395		1,415,202
Sibur Securities Ltd. (Russia), Gtd. Notes, 144A		3.914%	01/31/18		1,050		1,025,063
Union Carbide Corp., Sr. Unsec’d. Notes		7.875%	04/01/23		3,058		3,643,136

							17,463,116

SEE NOTES TO FINANCIAL STATEMENTS.

A38


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Consumer — 0.2%
Service Corp. International, Sr. Unsec’d. Notes		7.625%		10/01/18		2,000	$	2,300,000

Electric — 3.2%
AES Corp. (The), Sr. Unsec’d. Notes		8.000%		10/15/17		4,000		4,700,000
AES Corp. (The), Sr. Unsec’d. Notes		9.750%		04/15/16(d)		775		912,563
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes		3.350%		07/01/23		550		528,058
Calpine Corp., Sr. Sec’d. Notes, 144A		7.500%		02/15/21		1,108		1,209,105
Covanta Holding Corp., Sr. Unsec’d. Notes		7.250%		12/01/20		2,500		2,729,235
Duke Energy Corp., Sr. Unsec’d. Notes		2.100%		06/15/18(d)		3,775		3,753,328
El Paso Electric Co., Sr. Unsec’d. Notes		6.000%		05/15/35		2,325		2,411,850
Enel Finance International NV (Netherlands), Gtd. Notes, 144A		6.000%		10/07/39		1,450		1,390,746
Enersis SA (Chile), Sr. Unsec’d. Notes		7.375%		01/15/14		1,700		1,703,237
Exelon Corp., Sr. Unsec’d. Notes		4.900%		06/15/15(d)		500		527,152
Exelon Generation Co. LLC, Sr. Unsec’d. Notes		6.200%		10/01/17(d)		1,930		2,180,989
Exelon Generation Co. LLC, Sr. Unsec’d. Notes		6.250%		10/01/39(d)		1,900		1,925,435
FirstEnergy Corp., Sr. Unsec’d. Notes		2.750%		03/15/18		1,800		1,768,626
Iberdrola International BV (Spain), Gtd. Notes		6.750%		09/15/33		1,150		1,215,176
NRG Energy, Inc., Gtd. Notes		6.625%		03/15/23(d)		2,750		2,770,625
Pacific Gas & Electric Co., Sr. Unsec’d. Notes		4.600%		06/15/43(d)		1,950		1,860,754
South Carolina Electric & Gas Co., First Mortgage		4.600%		06/15/43		2,025		1,978,658
TransAlta Corp. (Canada), Sr. Unsec’d. Notes		6.650%		05/15/18		1,953		2,205,398
Westar Energy, Inc., First Mortgage		4.100%		04/01/43		475		430,277
Xcel Energy, Inc., Sr. Unsec’d. Notes		5.613%		04/01/17		1,947		2,145,156

								38,346,368

Energy – Integrated — 1.0%
Cenovus Energy, Inc., Sr. Unsec’d. Notes		4.450%		09/15/42		1,825		1,643,321
LUKOIL international Finance BV (Netherlands), Gtd. Notes, 144A		7.250%		11/05/19		1,300		1,501,500
Pacific Rubiales Energy Corp. (Colombia), Gtd. Notes, 144A		5.375%		01/26/19		870		876,525
Pacific Rubiales Energy Corp. (Colombia), Gtd. Notes, 144A		7.250%		12/12/21(d)		1,340		1,420,400
Pacific Rubiales Energy Corp. (Colombia), Notes		7.250%		12/12/21		340		360,400
Reliance Holdings USA, Inc. (India), Gtd. Notes, RegS		5.400%		02/14/22		500		505,671
Reliance Holdings USA, Inc. (India), Gtd. Notes, 144A		5.400%		02/14/22		1,860		1,881,096
Rosneft Finance SA (Russia), Gtd. Notes, 144A		6.625%		03/20/17		585		646,425
Sasol Financing International PLC (South Africa), Gtd. Notes		4.500%		11/14/22		2,725		2,534,250

								11,369,588

Energy – Other — 1.5%
Afren PLC (United Kingdom), Sr. Sec’d. Notes, RegS		11.500%		02/01/16		600		687,000
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.375%		09/15/17		3,265		3,748,445
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.450%		09/15/36		1,450		1,628,256
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.950%		06/15/19		250		297,558
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		7.936%	(e)	10/10/36		2,000		714,180
Cameron International Corp., Sr. Unsec’d. Notes		7.000%		07/15/38		450		544,108
Nabors Industries, Inc., Gtd. Notes		4.625%		09/15/21		1,650		1,651,934
Noble Energy Inc, Sr. Unsec’d. Notes		5.250%		11/15/43		430		429,649
Noble Energy, Inc., Sr. Unsec’d. Notes		6.000%		03/01/41		1,530		1,635,992
Pioneer Natural Resources Co., Sr. Unsec’d. Notes		6.875%		05/01/18		1,750		2,049,094
Precision Drilling Corp. (Canada), Gtd. Notes		6.625%		11/15/20		1,000		1,067,500
Transocean, Inc., Gtd. Notes		2.500%		10/15/17(d)		1,075		1,086,389
Weatherford International Ltd., Gtd. Notes		5.125%		09/15/20		1,165		1,251,511
Weatherford International Ltd., Gtd. Notes		5.950%		04/15/42		1,550		1,553,007

								18,344,623

Foods — 1.4%
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Gtd. Notes(f)		7.750%		01/15/19		1,640		2,047,801
ARAMARK Corp., Gtd. Notes, 144A		5.750%		03/15/20(d)		1,350		1,410,750

SEE NOTES TO FINANCIAL STATEMENTS.

A39


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Foods (continued)
BRF SA (Brazil), Sr. Unsec’d. Notes, 144A		3.950%	05/22/23		275	$	237,875
Coca-Cola Icecek A/S (Turkey), Sr. Unsec’d. Notes, 144A		4.750%	10/01/18(d)		375		381,608
Corp. Pesquera Inca SAC, Gtd. Notes, 144A		9.000%	02/10/17		1,000		995,000
Cott Beverages, Inc., Gtd. Notes		8.125%	09/01/18		3,356		3,624,480
JBS USA LLC/JBS USA Finance, Inc. (Brazil), Gtd. Notes, 144A (original cost $1,226,925; purchased 12/08/11)		7.250%	06/01/21(b)(c)(d)		1,330		1,386,525
Kraft Foods Group, Inc., Sr. Unsec’d. Notes		5.000%	06/04/42		900		887,213
Minerva Luxembourg SA (Brazil), Gtd. Notes, 144A		12.250%	02/10/22		725		833,750
Sigma Alimentos SA de CV, Gtd. Notes		5.625%	04/14/18		950		1,026,000
Stater Brothers Holdings, Inc., Gtd. Notes		7.750%	04/15/15		2,200		2,205,544
Tyson Foods, Inc., Gtd. Notes		6.600%	04/01/16		1,000		1,116,257

							16,152,803

Gaming — 0.1%
Pinnacle Entertainment, Inc., Gtd. Notes		7.500%	04/15/21		1,550		1,681,750

Healthcare & Pharmaceutical — 2.1%
AbbVie, Inc., Sr. Unsec’d. Notes		4.400%	11/06/42		850		792,773
Actavis PLC, Sr. Unsec’d. Notes		4.625%	10/01/42		700		636,860
Amgen, Inc., Sr. Unsec’d. Notes		5.150%	11/15/41		2,515		2,505,659
Amgen, Inc., Sr. Unsec’d. Notes		5.375%	05/15/43		115		118,072
CHS/Community Health Systems, Inc., Gtd. Notes		8.000%	11/15/19		2,500		2,712,500
Express Scripts Holding Co., Gtd. Notes		2.750%	11/21/14		3,750		3,822,319
Gilead Sciences, Inc., Sr. Unsec’d. Notes		5.650%	12/01/41(d)		250		278,309
HCA, Inc., Gtd. Notes		8.000%	10/01/18(d)		2,250		2,657,813
HCA, Inc., Sr. Unsec’d. Notes		6.375%	01/15/15		1,000		1,050,000
HCA, Inc., Sr. Unsec’d. Notes, MTN		9.000%	12/15/14		320		342,400
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes		3.750%	08/23/22		225		217,944
LifePoint Hospitals, Inc., Gtd. Notes		6.625%	10/01/20		1,000		1,065,000
Merck & Co, Inc., Sr. Unsec’d. Notes		4.150%	05/18/43(d)		2,075		1,895,699
Pfizer, Inc., Sr. Unsec’d. Notes		4.300%	06/15/43(d)		1,550		1,457,543
Valeant Pharmaceuticals International, Gtd. Notes, 144A		6.875%	12/01/18		1,500		1,605,000
Valeant Pharmaceuticals International, Inc., Sr. Unsec’d. Notes, 144A		6.750%	08/15/18(d)		2,000		2,197,500
Zoetis, Inc., Sr. Unsec’d. Notes, 144A		4.700%	02/01/43		1,525		1,425,355

							24,780,746

Healthcare Insurance — 1.2%
Aetna, Inc., Sr. Unsec’d. Notes		6.750%	12/15/37		1,900		2,317,099
Cigna Corp., Sr. Unsec’d. Notes		4.375%	12/15/20		745		792,646
Cigna Corp., Sr. Unsec’d. Notes		5.375%	03/15/17		2,125		2,354,815
Cigna Corp., Sr. Unsec’d. Notes		5.875%	03/15/41		750		827,289
Coventry Health Care, Inc., Sr. Unsec’d. Notes		6.125%	01/15/15		4,025		4,250,545
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		4.250%	03/15/43		1,200		1,076,916
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.500%	06/15/37		760		901,650
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.625%	11/15/37		195		235,922
WellPoint, Inc., Sr. Unsec’d. Notes		4.625%	05/15/42		525		485,212
WellPoint, Inc., Sr. Unsec’d. Notes		4.650%	01/15/43		1,225		1,134,107

							14,376,201

Insurance — 3.3%
Allied World Assurance Co. Ltd., Gtd. Notes		5.500%	11/15/20		430		465,047
Allied World Assurance Co. Ltd., Gtd. Notes		7.500%	08/01/16		2,475		2,841,295
Allstate Corp. (The), Sr. Unsec’d. Notes		4.500%	06/15/43		375		354,815
American International Group, Inc., Sr. Unsec’d. Notes		5.050%	10/01/15		315		337,379
American International Group, Inc., Sr. Unsec’d. Notes, MTN		5.850%	01/16/18		3,700		4,244,085
American International Group, Inc., Sr. Unsec’d. Notes(f)		6.400%	12/15/20		950		1,122,768
American International Group, Inc., Sr. Unsec’d. Notes		8.250%	08/15/18		2,005		2,508,014
Axis Capital Holdings Ltd., Sr. Unsec’d. Notes		5.750%	12/01/14		3,350		3,500,241

SEE NOTES TO FINANCIAL STATEMENTS.

A40


CORPORATE BONDS (continued)	Interest Rate	Maturity Date	Principal Amount (000)#		Value (Note 2)
Insurance (continued)
Berkshire Hathaway, Inc., Sr. Unsec’d. Notes(f)	3.000%	02/11/23		1,850	$	1,747,083
Berkshire Hathaway, Inc., Sr. Unsec’d. Notes	4.500%	02/11/43(d)		1,350		1,248,002
Chubb Corp. (The), Jr. Sub. Notes	6.375%(a)	03/29/67(d)		1,775		1,921,438
Endurance Specialty Holdings Ltd., Sr. Unsec’d. Notes	7.000%	07/15/34		1,350		1,492,001
Hartford Financial Services Group, Inc., Sr. Unsec’d. Notes	5.125%	04/15/22		500		544,606
Liberty Mutual Group, Inc., Sr. Unsec’d. Notes, 144A	6.500%	03/15/35(d)		1,030		1,124,525
Lincoln National Corp., Jr. Sub. Notes	6.050%(a)	04/20/67		350		347,375
Lincoln National Corp., Sr. Unsec’d. Notes	7.000%	06/15/40		1,265		1,584,884
Lincoln National Corp., Sr. Unsec’d. Notes	8.750%	07/01/19		1,265		1,628,252
Markel Corp., Sr. Unsec’d. Notes	5.000%	03/30/43		350		327,318
Massachusetts Mutual Life Insurance Co., Sub. Notes, 144A	8.875%	06/01/39		1,200		1,719,674
Nippon Life Insurance Co. (Japan), Sub. Notes, 144A	5.000%(a)	10/18/42		850		877,625
Northwestern Mutual Life Insurance Co. (The), Sub. Notes, 144A	6.063%	03/30/40		500		561,755
Ohio National Financial Services, Inc., Sr. Notes, 144A	6.375%	04/30/20		850		942,451
Principal Financial Group, Inc., Gtd. Notes	4.625%	09/15/42		150		140,926
Progressive Corp. (The), Jr. Sub. Notes	6.700%(a)	06/15/37		1,015		1,096,200
Teachers Insurance & Annuity Association of America, Sub. Notes, 144A	6.850%	12/16/39		2,310		2,851,439
Unum Group, Sr. Unsec’d. Notes	5.625%	09/15/20		500		548,073
Willis Group Holdings PLC, Gtd. Notes	4.125%	03/15/16		1,280		1,340,076
XL Group PLC (Ireland), Jr. Sub. Notes	6.500%(a)	12/31/49(d)		1,880		1,849,450
XL Group PLC (Ireland), Sr. Unsec’d. Notes	5.250%	09/15/14		140		144,298

						39,411,095

Lodging — 0.3%
Marriott International, Inc., Sr. Unsec’d. Notes	3.250%	09/15/22		1,325		1,235,311
Wyndham Worldwide Corp., Sr. Unsec’d. Notes	2.950%	03/01/17		2,420		2,454,483

						3,689,794

Media & Entertainment — 2.4%
British Sky Broadcasting Group PLC, Gtd. Notes, 144A	6.100%	02/15/18		210		239,074
CBS Corp., Gtd. Notes (original cost $1,253,820; purchased 09/21/12)	4.850%	07/01/42(b)(c)		1,200		1,081,261
Cedar Fair LP/Canada’s Wonderland Co./Magnum Management Corp., Gtd. Notes	9.125%	08/01/18		2,300		2,495,500
Historic TW, Inc., Gtd. Notes	6.625%	05/15/29		1,837		2,108,384
Liberty Interactive LLC, Sr. Unsec’d. Notes	8.250%	02/01/30(d)		2,250		2,396,250
Myriad International Holdings BV (South Africa), Gtd. Notes, 144A	6.000%	07/18/20		775		829,250
News America, Inc., Gtd. Notes	6.150%	03/01/37		460		505,581
News America, Inc., Gtd. Notes	6.150%	02/15/41(d)		1,430		1,593,771
News America, Inc., Gtd. Notes	6.900%	08/15/39		65		77,470
News America, Inc., Gtd. Notes	7.625%	11/30/28		1,415		1,755,084
RR Donnelley & Sons Co., Sr. Unsec’d. Notes	4.950%	04/01/14		7,000		7,070,000
RR Donnelley & Sons Co., Sr. Unsec’d. Notes	8.600%	08/15/16		4,750		5,498,125
Time Warner Cos., Inc., Gtd. Notes	6.950%	01/15/28		532		627,672
Time Warner Cos., Inc., Gtd. Notes	7.250%	10/15/17		1,440		1,716,633
Viacom, Inc., Sr. Unsec’d. Notes	4.500%	02/27/42(d)		95		81,051
Viacom, Inc., Sr. Unsec’d. Notes	4.875%	06/15/43		275		248,773
Viacom, Inc., Sr. Unsec’d. Notes	5.850%	09/01/43		625		657,014

						28,980,893

Metals — 1.0%
Berau Capital Resources Pte Ltd., Sr. Sec’d. Notes, RegS	12.500%	07/08/15		1,600		1,688,000
BHP Billiton Finance USA Ltd. (Australia), Gtd. Notes	5.000%	09/30/43		1,250		1,270,926
Newmont Mining Corp., Gtd. Notes	6.250%	10/01/39		75		66,339
Peabody Energy Corp., Gtd. Notes	6.000%	11/15/18(d)		4,075		4,339,875
PT Adaro Indonesia (Indonesia), Sr. Unsec’d. Notes, RegS	7.625%	10/22/19		745		785,975
Southern Copper Corp., Sr. Unsec’d. Notes	6.750%	04/16/40		990		958,580

SEE NOTES TO FINANCIAL STATEMENTS.

A41


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Metals (continued)
Southern Copper Corp., Sr. Unsec’d. Notes		7.500%		07/27/35		550	$	573,138
Vedanta Resources PLC, Sr. Notes, 144A		6.000%		01/31/19		1,050		1,015,875
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.850%		11/10/14		1,825		1,850,331

								12,549,039

Non-Captive Finance — 2.8%
CIT Group, Inc., Sr. Unsec’d. Notes		5.000%		08/15/22		1,350		1,316,250
CIT Group, Inc., Sr. Unsec’d. Notes, 144A		5.500%		02/15/19(d)		4,000		4,290,000
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		5.875%		01/14/38(d)		675		768,902
General Electric Capital Corp., Sr. Unsec’d. Notes, GMTN(f)		6.000%		08/07/19		6,315		7,409,465
General Electric Capital Corp., Sub. Notes		5.300%		02/11/21(d)		1,185		1,325,565
HSBC Finance Corp., Sub. Notes		6.676%		01/15/21		295		338,966
International Lease Finance Corp., Sr. Sec’d. Notes, 144A		6.500%		09/01/14		2,875		2,972,031
International Lease Finance Corp., Sr. Unsec’d. Notes		5.750%		05/15/16		1,125		1,205,156
International Lease Finance Corp., Sr. Unsec’d. Notes		6.250%		05/15/19		1,400		1,515,500
Nelnet, Inc., Jr. Sub. Notes		3.622%	(a)	09/29/36		3,775		2,765,188
Preferred Term Securities X Ltd./Preferred Term Securities X, Inc. (Cayman Islands), Sr. Sec’d. Notes, 144A		0.970%	(a)	07/03/33(b)		1,171		974,365
Schahin II Finance Co. SPV Ltd. (Brazil), Sr. Sec’d. Notes, 144A		5.875%		09/25/22(d)		1,820		1,738,291
SLM Corp., Sr. Unsec’d. Notes, MTN		5.050%		11/14/14		4,150		4,284,875
SLM Corp., Sr. Unsec’d. Notes, MTN		6.000%		01/25/17		1,075		1,163,688
Springleaf Finance Corp., Sr. Unsec’d. Notes, MTN		6.900%		12/15/17(d)		1,000		1,093,000

								33,161,242

Packaging — 0.4%
Ball Corp., Gtd. Notes		6.750%		09/15/20(d)		345		375,188
Greif Luxembourg Finance, Notes, MTN, 144A		7.375%		07/15/21	EUR	1,470		2,376,187
Greif, Inc., Sr. Unsec’d. Notes		7.750%		08/01/19		1,815		2,060,025

								4,811,400

Paper — 0.9%
International Paper Co., Sr. Unsec’d. Notes		6.000%		11/15/41		675		733,020
International Paper Co., Sr. Unsec’d. Notes		7.300%		11/15/39		1,000		1,234,722
International Paper Co., Sr. Unsec’d. Notes		7.950%		06/15/18		1,640		1,992,095
MeadWestvaco Corp., Sr. Unsec’d. Notes		7.375%		09/01/19		4,400		5,222,202
Rock-Tenn Co., Gtd. Notes		4.450%		03/01/19(d)		1,165		1,228,842

								10,410,881

Pipelines & Other — 0.9%
AGL Capital Corp., Gtd. Notes		4.400%		06/01/43		1,050		946,742
Buckeye Partners LP, Sr. Unsec’d. Notes		4.150%		07/01/23(d)		1,760		1,692,312
Dominion Gas Holdings LLC, Sr. Unsec’d. Notes, 144a		4.800%		11/01/43		75		72,512
Enterprise Products Operating LLC, Gtd. Notes		5.700%		02/15/42		900		948,875
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes		5.000%		08/15/42		550		507,958
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes		7.300%		08/15/33		1,550		1,825,212
NiSource Finance Corp., Gtd. Notes		4.800%		02/15/44		300		270,680
NiSource Finance Corp., Gtd. Notes		5.450%		09/15/20		1,345		1,495,628
ONEOK Partners LP, Gtd. Notes		2.000%		10/01/17		750		746,335
Sempra Energy, Sr. Unsec’d. Notes		6.500%		06/01/16		2,275		2,559,837

								11,066,091

Real Estate Investment Trusts — 0.6%
Felcor Lodging LP, Sr. Sec’d. Notes		10.000%		10/01/14		1,921		2,031,458
Hospitality Properties Trust, Sr. Unsec’d. Notes		7.875%		08/15/14		2,900		2,923,539
ProLogis LP, Gtd. Notes		6.875%		03/15/20		8		9,422
Simon Property Group LP, Sr. Unsec’d. Notes		2.800%		01/30/17(d)		45		46,544
Simon Property Group LP, Sr. Unsec’d. Notes		3.375%		03/15/22		325		316,772
Simon Property Group LP, Sr. Unsec’d. Notes		6.125%		05/30/18		40		46,313
Simon Property Group LP, Sr. Unsec’d. Notes		10.350%		04/01/19		1,685		2,280,095

								7,654,143

SEE NOTES TO FINANCIAL STATEMENTS.

A42


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Retailers — 0.6%
CVS Caremark Corp., Sr. Unsec’d. Notes		5.300%	12/05/43		125	$	129,270
CVS Caremark Corp., Sr. Unsec’d. Notes		6.125%	09/15/39(d)		2,000		2,268,238
Home Depot, Inc. (The), Sr. Unsec’d. Notes		4.200%	04/01/43		1,025		934,080
Ltd. Brands, Inc., Gtd. Notes		5.625%	02/15/22		2,200		2,249,500
Wal-Mart Stores, Inc., Sr. Unsec’d. Notes		5.625%	04/15/41		1,190		1,351,214

							6,932,302

Technology — 1.2%
Arrow Electronics, Inc., Sr. Unsec’d. Notes		3.375%	11/01/15		600		620,930
Avaya, Inc., Sec’d. Notes, 144A		10.500%	03/01/21(d)		2,200		2,101,000
CDW LLC/CDW Finance Corp., Gtd. Notes		12.535%	10/12/17		843		880,935
Fiserv, Inc., Gtd. Notes		3.125%	10/01/15		195		201,892
NXP BV/NXP Funding LLC (Netherlands), Gtd. Notes, 144A		3.750%	06/01/18		1,925		1,939,438
Seagate HDD Cayman, Gtd. Notes		6.875%	05/01/20		2,875		3,108,594
SunGard Data Systems, Inc., Gtd. Notes		7.625%	11/15/20(d)		1,700		1,853,000
TransUnion LLC/TransUnion Financing Corp., Gtd. Notes		11.375%	06/15/18		1,850		2,016,500
Xerox Corp., Sr. Unsec’d. Notes		4.250%	02/15/15		2,000		2,074,856

							14,797,145

Telecommunications — 2.2%
America Movil SAB de CV (Mexico), Gtd. Notes		6.125%	03/30/40		655		693,066
AT&T Corp., Gtd. Notes		8.000%	11/15/31		103		137,086
AT&T, Inc., Sr. Unsec’d. Notes		5.350%	09/01/40		483		477,896
Bharti Airtel International Netherlands BV (India), Gtd. Notes, 144A		5.125%	03/11/23		1,305		1,198,512
British Telecommunications PLC (United Kingdom), Sr. Unsec’d. Notes		9.625%	12/15/30		328		489,456
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec’d. Notes		8.500%	11/15/18		2,255		2,855,130
Eileme 2 AB (Sweden), Sr. Sec’d. Notes, RegS		11.750%	01/31/20	EUR	1,400		2,320,814
Embarq Corp., Sr. Unsec’d. Notes (original cost ($1,303,800, purchased 04/22/10)		7.995%	06/01/36(b)(c)		1,250		1,265,550
MetroPCS Wireless, Inc., Gtd. Notes		7.875%	09/01/18		775		832,156
SK Telecom Co. Ltd. (South Korea), Sr. Unsec’d. Notes, MTN, 144A		2.125%	05/01/18		675		655,300
Sprint Capital Corp., Gtd. Notes		6.900%	05/01/19(d)		1,300		1,420,250
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.400%	09/15/33		2,250		2,587,772
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.550%	09/15/43		7,400		8,657,697
Verizon Communications, Inc., Sr. Unsec’d. Notes		4.750%	11/01/41		745		696,460
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC, Sr. Unsec’d. Notes, 144A		7.748%	02/02/21		1,300		1,412,125
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC, Sr. Unsec’d. Notes, 144A		9.125%	04/30/18(b)		200		234,500
Wind Acquisition Finance SA, Sec’d. Notes, 144A (original cost $492,804; purchased 11/30/11)		11.750%	07/15/17(c)	EUR	450		657,833

							26,591,603

Tobacco — 1.0%
Altria Group, Inc., Gtd. Notes		4.000%	01/31/24		4,300		4,202,880
Altria Group, Inc., Gtd. Notes		9.950%	11/10/38		873		1,331,675
Imperial Tobacco Finance PLC (United Kingdom), Gtd. Notes, 144A		2.050%	02/11/18		2,375		2,348,448
Lorillard Tobacco Co., Gtd. Notes		3.500%	08/04/16		515		541,906
Lorillard Tobacco Co., Gtd. Notes		3.750%	05/20/23(d)		825		751,054
Lorillard Tobacco Co., Gtd. Notes		8.125%	06/23/19(d)		895		1,090,241
Philip Morris International, Inc., Sr. Unsec’d. Notes		4.875%	11/15/43		2100		2,080,323

							12,346,527

TOTAL CORPORATE BONDS (cost $533,343,171)							560,708,118

SEE NOTES TO FINANCIAL STATEMENTS.

A43


COVERED BOND — 0.1%	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Depfa ACS Bank (Ireland), Covered Bonds, 144A (cost $1,377,446)		5.125%	03/16/37		1,400	$	1,184,750

FOREIGN AGENCIES — 3.3%
CNOOC Finance 2013 Ltd. (China), Gtd. Notes		3.000%	05/09/23(d)		750		669,887
Comision Federal de Electricidad (Mexico), Sr. Unsec’d. Notes, 144A		4.875%	01/15/24		875		868,438
Dolphin Energy Ltd. (United Arab Emirates), Sr. Sec’d. Notes, 144A		5.888%	06/15/19		2,190		2,390,229
Export Credit Bank of Turkey (Turkey), Sr. Unsec’d. Notes, 144A		5.375%	11/04/16		265		272,235
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, RegS		9.250%	04/23/19		1,080		1,328,400
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, 144A		4.950%	05/23/16(d)		1,950		2,069,925
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, 144A		6.510%	03/07/22		975		1,046,906
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, 144A		9.250%	04/23/19		2,845		3,499,350
KazMunayGas National Co. JSC (Kazakhstan), Sr. Unsec’d. Notes, MTN, 144A		5.750%	04/30/43		1,075		927,403
KazMunayGas National Co. JSC (Kazakhstan), Sr. Unsec’d. Notes, MTN, 144A		9.125%	07/02/18		935		1,133,688
KazMunayGas National Co. JSC (Kazakhstan), Sr. Unsec’d. Notes, MTN, 144A		11.750%	01/23/15		1,475		1,618,813
Korea Finance Corp. (South Korea), Sr. Unsec’d. Notes		4.625%	11/16/21		600		633,550
Korea Gas Corp. (South Korea), Sr. Unsec’d. Notes, RegS		4.250%	11/02/20(d)		1,750		1,817,648
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A		3.000%	09/19/22		1,450		1,331,509
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A		4.750%	07/13/21		1,650		1,733,485
Majapahit Holding BV (Indonesia), Gtd. Notes, RegS		7.750%	10/17/16		2,500		2,746,875
Pertamina Persero PT (Indonesia), Sr. Unsec’d. Notes, MTN, 144A		4.300%	05/20/23		650		565,500
Petrobras International Finance Co. (Brazil), Gtd. Notes		5.375%	01/27/21(d)		2,925		2,902,735
Petroleos de Venezuela SA (Venezuela), Sr. Unsec’d. Notes		4.900%	10/28/14		3,435		3,134,438
Petroleos Mexicanos (Mexico), Gtd. Notes		3.500%	01/30/23(d)		1,125		1,030,781
Petroleos Mexicanos (Mexico), Gtd. Notes		4.875%	01/24/22		2,100		2,157,750
Petroleos Mexicanos (Mexico), Gtd. Notes		5.500%	06/27/44		2,180		1,989,250
Petroleos Mexicanos (Mexico), Gtd. Notes		6.500%	06/02/41		745		778,525
Power Sector Assets & Liabilities Management Corp. (Philippines), Gov’t. Gtd. Notes, RegS		7.390%	12/02/24		1,750		2,135,000
State Bank of India (India), Sr. Unsec’d. Notes, 144A		4.125%	08/01/17		250		252,818

TOTAL FOREIGN AGENCIES (cost $39,340,565)							39,035,138

MUNICIPAL BONDS — 2.0%
California — 0.6%
Bay Area Toll Authority, Revenue Bonds, BABs		6.907%	10/01/50		1,125		1,363,129
State of California, General Obligation Unlimited, BABs		7.300%	10/01/39		2,280		2,867,305
State of California, General Obligation Unlimited, BABs		7.625%	03/01/40		725		954,520
University of California, Revenue Bonds, BABs		5.770%	05/15/43		1,400		1,553,384

							6,738,338

Colorado — 0.1%
Regional Transportation District, Revenue Bonds, Series 2010B, BABs		5.844%	11/01/50		1,000		1,154,480

SEE NOTES TO FINANCIAL STATEMENTS.

A44


MUNICIPAL BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Illinois — 0.6%
Chicago O’Hare International Airport, Revenue Bonds, BABs		6.395%	01/01/40		1,380	$	1,539,487
State of Illinois, GO		4.421%	01/01/15		5,030		5,191,061

							6,730,548

New Jersey — 0.3%
New Jersey State Turnpike Authority, Revenue Bonds, Series 2010, BABs		7.102%	01/01/41		1,175		1,504,540
New Jersey State Turnpike Authority, Revenue Bonds, Series F, BABs		7.414%	01/01/40		2,050		2,731,522

							4,236,062

Ohio — 0.1%
Ohio State University (The), Revenue Bonds, BABs		4.910%	06/01/40		695		696,376
Ohio State Water Development Authority, Revenue Bonds, BABs		4.879%	12/01/34		450		456,431

							1,152,807

Oregon — 0.1%
Oregon State Department of Transportation, Revenue Bonds, Series A, BABs		5.834%	11/15/34		615		707,970

Pennsylvania — 0.1%
Pennsylvania Turnpike Commission, Revenue Bonds, Series B, BABs		5.511%	12/01/45		800		848,888

Tennessee — 0.1%
Metropolitan Government of Nashville & Davidson County Convention Center Authority, Revenue Bonds, BABs		6.731%	07/01/43		1,375		1,524,160

Texas
Texas State Transportation Commission, Revenue Bonds, Series B, BABs		5.028%	04/01/26		425		457,138

TOTAL MUNICIPAL BONDS (cost $20,666,380)							23,550,391

SOVEREIGNS — 5.6%
Brazilian Government International Bond (Brazil), Sr. Unsec’d. Notes		5.625%	01/07/41(d)		1,000		970,000
Colombia Government International Bond (Colombia), Sr. Unsec’d. Notes		4.000%	02/26/24		2,000		1,928,000
Hellenic Republic Government Bond (Greece), Sr. Unsec’d. Notes, Series PSI		2.000%	02/24/23	EUR	2,245		2,078,186
Hellenic Republic Government Bond (Greece), Sr. Unsec’d. Notes, Series 9BR		5.800%	07/14/15	JPY	76,200		665,692
Hellenic Republic Government Bond (Greece), Sr. Unsec’d. Notes, Series 9RG		5.800%	07/14/15	JPY	107,100		935,638
Hungary Government International Bond (Hungary), Sr. Unsec’d. Notes		6.375%	03/29/21		776		832,260
Hungary Government International Bond (Hungary), Sr. Unsec’d. Notes		4.125%	02/19/18		1,370		1,385,070
Hungary Government International Bond (Hungary), Sr. Unsec’d. Notes		5.750%	11/22/23		650		653,250
Hungary Government International Bond (Hungary), Sr. Unsec’d. Notes		6.000%	01/11/19	EUR	715		1,077,074
Indonesia Government International Bond (Indonesia), Sr. Unsec’d. Notes		5.875%	03/13/20		2,245		2,372,965
Ireland Government Bond (Ireland), Sr. Unsec’d. Notes		4.400%	06/18/19	EUR	2,880		4,347,837
Italy Buoni Poliennali del Tesoro (Italy), Sr. Unsec’d. Notes		6.500%	11/01/27	EUR	3,545		5,899,594
Italy Government International Bond (Italy), Sr. Unsec’d. Notes, RegS		3.450%	03/24/17	JPY	170,000		1,653,310
Italy Government International Bond (Italy), Sr. Unsec’d. Notes, RegS		4.500%	06/08/15	JPY	130,000		1,282,509

SEE NOTES TO FINANCIAL STATEMENTS.

A45


SOVEREIGNS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Mexico Government International Bond (Mexico), Sr. Unsec’d. Notes, MTN		4.750%		03/08/44(d)		2,500	$	2,253,125
Panama Government International Bond (Panama), Sr. Unsec’d.		5.200%		01/30/20		1,115		1,213,956
Peru Enhanced Pass-Through Finance Ltd. (Peru), Pass-Through Certificates, 144A		4.841%	(e)	05/31/18		889		822,100
Portugal Obrigacoes do Tesouro OT (Portugal), Sr. Unsec’d. Notes, RegS, 144A		4.450%		06/15/18	EUR	950		1,283,918
Portugal Obrigacoes do Tesouro OT (Portugal), Sr. Unsec’d. Notes, 144A		4.750%		06/14/19	EUR	4,480		5,954,844
Qatar Government International Bond (Qatar), Sr. Unsec’d. Notes, 144A		5.750%		01/20/42		900		945,000
Republic of Brazil (Brazil), Sr. Unsec’d. Notes		7.125%		01/20/37		900		1,030,500
Republic of Brazil (Brazil), Sr. Unsec’d. Notes		8.250%		01/20/34		510		651,525
Republic of Brazil (Brazil), Unsec’d. Notes		11.000%		06/26/17	EUR	2,200		3,901,224
Republic of Colombia (Colombia), Sr. Unsec’d. Notes		7.375%		09/18/37		900		1,104,750
Republic of Indonesia (Indonesia), Sr. Unsec’d. Notes, RegS		4.875%		05/05/21		1,600		1,584,000
Republic of Indonesia (Indonesia), Sr. Unsec’d. Notes, MTN, 144A		4.625%		04/15/43(d)		1,450		1,161,813
Republic of Philippines (Philippines), Sr. Unsec’d. Notes		6.250%		03/15/16	EUR	850		1,265,762
Republic of Portugal (Portugal), Sr. Unsec’d. Notes, RegS		3.500%		03/25/15		2,130		2,151,436
Republic of Turkey (Turkey), Sr. Unsec’d. Notes		8.000%		02/14/34		845		940,063
Russian Foreign Bond — Eurobond (Russia), Sr. Unsec’d. Notes, 144A		7.500%		03/31/30		872		1,016,404
Slovenia Government International Bond (Slovenia), Sr. Unsec’d Notes., RegS		4.750%		05/10/18		1,300		1,332,500
Spain Government Bond (Spain), Sr. Unsec’d. Notes		4.250%		10/31/16	EUR	1,940		2,837,540
Spain Government International Bond (Spain), Sr. Unsec’d. Notes, RegS		4.000%		03/06/18		3,000		3,049,500
Spain Government International Bond (Spain), Sr. Unsec’d. Notes, MTN, 144A		4.000%		03/06/18		1,500		1,524,750
Turkey Government International Bond (Turkey), Sr. Unsec’d. Notes		7.000%		06/05/20		1,510		1,648,165
United Mexican States (Mexico), Sr. Unsec’d. Notes		2.750%		04/22/23	EUR	2,350		3,117,815

TOTAL SOVEREIGNS (cost $65,585,729)								66,872,075

U.S. GOVERNMENT AGENCY OBLIGATIONS — 2.9%
Federal Home Loan Mortgage Corp.		3.500%		TBA		500		496,094
Federal Home Loan Mortgage Corp.		4.000%		TBA		2,000		2,053,906
Federal Home Loan Mortgage Corp.		5.000%		07/01/19		179		190,016
Federal Home Loan Mortgage Corp.		5.500%		10/01/33-06/01/34		1,836		2,045,441
Federal Home Loan Mortgage Corp.		6.000%		11/01/33-06/01/34		1,382		1,545,396
Federal Home Loan Mortgage Corp.		6.500%		07/01/32-09/01/32		1,046		1,175,661
Federal Home Loan Mortgage Corp.		7.000%		10/01/32		161		181,283
Federal National Mortgage Assoc.(g)		1.625%		11/27/18(d)		5,945		5,895,407
Federal National Mortgage Assoc.		4.000%		05/01/19		115		121,913
Federal National Mortgage Assoc.		4.500%		TBA		500		529,785
Federal National Mortgage Assoc.		4.500%		12/01/18-02/01/35		972		1,034,679
Federal National Mortgage Assoc.		5.500%		03/01/17-06/01/34		3,490		3,775,162
Federal National Mortgage Assoc.		6.000%		09/01/17-11/01/36		2,712		3,032,310
Federal National Mortgage Assoc.		6.500%		12/01/14-11/01/33		2,026		2,260,924
Federal National Mortgage Assoc.		7.000%		05/01/32-06/01/32		184		206,926
Government National Mortgage Assoc.		3.500%		TBA		2,000		2,015,703
Government National Mortgage Assoc.		5.500%		01/15/33-07/15/35		2,549		2,827,361
Government National Mortgage Assoc.		6.000%		12/15/32-11/15/34		2,707		3,069,115
Government National Mortgage Assoc.		6.500%		09/15/32-11/15/33		2,117		2,364,071

SEE NOTES TO FINANCIAL STATEMENTS.

A46


U.S. GOVERNMENT AGENCY OBLIGATIONS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#			Value (Note 2)
Government National Mortgage Assoc.		7.500%	10/15/25-02/15/26			64	$	71,815

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $33,026,809)								34,892,968

U.S. TREASURY OBLIGATIONS — 0.7%
U.S. Treasury Bonds		3.625%	08/15/43			1,280		1,208,800
U.S. Treasury Notes		1.250%	11/30/18(d)			2,730		2,671,562
U.S. Treasury Notes		1.500%	12/31/18			425		420,219
U.S. Treasury Notes(f)		2.375%	02/28/15			4,000		4,100,156

TOTAL U.S. TREASURY OBLIGATIONS (cost $8,439,447)								8,400,737


					Shares
PREFERRED STOCK — 0.1%
Banking — 0.1%
Citigroup Capital XIII, 7.875%, (Capital Security, fixed to floating preferred)(a) (cost $1,125,000)						45,000		1,226,250

TOTAL LONG-TERM INVESTMENTS (cost $1,032,566,230)								1,072,084,227

SHORT-TERM INVESTMENTS — 17.8%
AFFILIATED MUTUAL FUNDS
Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund (cost $119,729,540) (Note 4)(h)						12,203,390		113,613,561
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $99,097,020; includes $93,280,167 of cash collateral for securities on loan) (Note 4)(h)(i)						99,097,020		99,097,020

TOTAL SHORT-TERM INVESTMENTS (cost $218,826,560)								212,710,581

TOTAL INVESTMENTS — 107.3% (cost $1,251,392,790)								1,284,794,808
LIABILITIES IN EXCESS OF OTHER ASSETS(k) — (7.3)%								(87,288,729	)

NET ASSETS — 100.0%							$	1,197,506,079

The following abbreviations are used in the portfolio descriptions:


144A		Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
RegS		Regulation S. Security was purchased pursuant to Regulation S and may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
ABS		Asset-Backed Security
BABs		Build America Bonds
BBR		New Zealand Bank Bill Rate
bps		Basis Points
BUBOR		Budapest Interbank Offered Rate
CDO		Collateralized Debt Obligation
CDX		Credit Derivative Index
CLO		Collateralized Loan Obligation
COLIBOR		Columbia Interbank Offered Rate
EURIBOR		Euro Interbank Offered Rate
FHLMC		Federal Home Loan Mortgage Corp.
GMTN		Global Medium Term Note
GO		General Obligation
I/O		Interest Only
JIBAR		Johannesburg Interbank Agreed Rate
LIBOR		London Interbank Offered Rate
MIBOR		Mumbai Interbank Offered Rate

SEE NOTES TO FINANCIAL STATEMENTS.

A47


MOSPRIME		Moscow Prime Offered Rate
MTN		Medium Term Note
TBA		To Be Announced
TELBOR		Tel Aviv Interbank Offered Rate
WIBOR		Warsaw Interbank Offered Rate
AUD		Australian Dollar
BRL		Brazilian Real
CAD		Canadian Dollar
CHF		Swiss Franc
CNY		Chinese Yuan Renminbi
COP		Colombian Peso
CZK		Czech Koruna
EUR		Euro
GBP		British Pound
HUF		Hungarian Forint
ILS		Israel New Shekel
INR		Indian Rupee
JPY		Japanese Yen
KRW		South Korean Won
MXN		Mexican Peso
MYR		Malaysian Ringgit
NOK		Norwegian Krone
NZD		New Zealand Dollar
PEN		Peruvian Nuevo Sol
PHP		Philippine Peso
PLN		Polish Zloty
RON		Romanian Leu
RUB		Russian Ruble
SEK		Swedish Krona
SGD		Singapore Dollar
TRY		Turkish Lira
ZAR		South African Rand

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

(a)	Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.

(b)	Indicates a security or securities that have been deemed illiquid.

(c)	Indicates a restricted security; the aggregate original cost of the restricted securities is $15,534,291. The aggregate value, $15,667,381, is approximately 1.3% of net assets.

(d)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $90,924,537; cash collateral of $93,280,167 (included with liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(e)	Represents zero coupon bond or step coupon bond. Rate quoted represents yield to maturity at purchase date.

(f)	Represents security, or a portion thereof, segregated as collateral for swap agreements.

(g)	Represents security, or a portion thereof, segregated as collateral for futures contracts.

(h)	Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund and the Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund.

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

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

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

Open futures contracts outstanding at December 31, 2013:


Number of Contracts	Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation (Depreciation)
Long Positions:
395	5 Year U.S. Treasury Notes		Mar. 2014	$	47,388,717	$	47,128,438		$ (260,279	)
2,916	10 Year U.S. Treasury Notes		Mar. 2014		364,484,184		358,804,688		(5,679,496	)

									(5,939,775	)

SEE NOTES TO FINANCIAL STATEMENTS.

A48

Open futures contracts outstanding at December 31, 2013 (continued):


Number of Contracts	Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation (Depreciation)
Short Positions:
73	Euro-Bobl		Mar. 2014	$	12,625,508	$	12,496,066	$	129,442
40	Euro-Bond		Mar. 2014		7,775,990		7,658,275		117,715
12	U.S. Ultra Bond		Mar. 2014		1,651,858		1,635,000		16,858

									264,015

								$	(5,675,760	)

Forward foreign currency exchange contracts outstanding at December 31, 2013:


Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
Australian Dollar,
Expiring 01/23/14	Citigroup Global Markets	AUD	9,729	$	9,307,938	$	8,673,223	$	(634,715	)
Expiring 01/23/14	Goldman Sachs & Co.	AUD	133		120,700		118,317		(2,383	)
Expiring 01/23/14	JPMorgan Chase & Co.	AUD	3,239		3,038,100		2,887,303		(150,797	)
Expiring 01/23/14	JPMorgan Chase & Co.	AUD	1,306		1,233,000		1,164,501		(68,499	)
Brazilian Real,
Expiring 01/17/14	Citigroup Global Markets	BRL	2,700		1,210,500		1,139,177		(71,323	)
Expiring 01/22/14	Citigroup Global Markets	BRL	5,682		2,536,760		2,394,758		(142,002	)
Expiring 01/22/14	Citigroup Global Markets	BRL	1,438		602,500		605,972		3,472
British Pound,
Expiring 01/27/14	Barclays Bank PLC	GBP	1,118		1,819,900		1,850,304		30,404
Expiring 01/27/14	Citigroup Global Markets	GBP	1,841		3,014,700		3,048,001		33,301
Expiring 01/27/14	Citigroup Global Markets	GBP	1,099		1,801,100		1,819,781		18,681
Expiring 01/27/14	Goldman Sachs & Co.	GBP	2,220		3,633,400		3,675,517		42,117
Expiring 01/27/14	JPMorgan Chase & Co.	GBP	2,579		4,213,800		4,270,708		56,908
Expiring 01/27/14	JPMorgan Chase & Co.	GBP	1,503		2,415,800		2,487,950		72,150
Expiring 01/27/14	JPMorgan Chase & Co.	GBP	701		1,147,078		1,160,109		13,031
Canadian Dollar,
Expiring 01/22/14	Barclays Bank PLC	CAD	2,581		2,466,000		2,427,996		(38,004	)
Expiring 01/22/14	Citigroup Global Markets	CAD	4,330		4,199,733		4,074,071		(125,662	)
Expiring 01/22/14	Citigroup Global Markets	CAD	1,929		1,845,200		1,815,128		(30,072	)
Expiring 01/22/14	Citigroup Global Markets	CAD	1,909		1,825,000		1,796,270		(28,730	)
Expiring 01/22/14	Deutsche Bank	CAD	4,330		4,198,418		4,074,071		(124,347	)
Expiring 01/22/14	Goldman Sachs & Co.	CAD	1,911		1,830,600		1,797,767		(32,833	)
Expiring 01/22/14	JPMorgan Chase & Co.	CAD	1,931		1,849,500		1,817,001		(32,499	)
Expiring 01/22/14	JPMorgan Chase & Co.	CAD	1,919		1,827,100		1,806,002		(21,098	)
Chinese Yuan Renminbi,
Expiring 01/15/14	Citigroup Global Markets	CNY	35,935		5,864,296		5,930,230		65,934
Expiring 01/15/14	Citigroup Global Markets	CNY	22,523		3,696,400		3,716,945		20,545
Expiring 01/15/14	HSBC Securities, Inc.	CNY	18,798		3,067,935		3,102,100		34,165
Expiring 01/15/14	JPMorgan Chase & Co.	CNY	19,597		3,197,995		3,233,978		35,983
Expiring 01/15/14	UBS AG	CNY	22,584		3,684,635		3,727,005		42,370
Colombian Peso,
Expiring 01/22/14	Citigroup Global Markets	COP	2,301,384		1,214,707		1,191,859		(22,848	)
Expiring 01/22/14	Citigroup Global Markets	COP	1,409,658		739,590		730,045		(9,545	)
Czech Koruna,
Expiring 01/24/14	Barclays Bank PLC	CZK	34,421		1,848,200		1,733,662		(114,538	)
Euro,
Expiring 01/27/14	Barclays Bank PLC	EUR	2,212		3,027,704		3,042,924		15,220
Expiring 01/27/14	Barclays Bank PLC	EUR	1,346		1,842,417		1,851,676		9,259
Expiring 01/27/14	Citigroup Global Markets	EUR	1,940		2,673,298		2,668,580		(4,718	)
Expiring 01/27/14	Citigroup Global Markets	EUR	1,346		1,855,070		1,852,226		(2,844	)
Expiring 01/27/14	Citigroup Global Markets	EUR	210		284,778		288,238		3,460
Expiring 01/27/14	Credit Suisse	EUR	4,258		5,869,684		5,858,080		(11,604	)

SEE NOTES TO FINANCIAL STATEMENTS.

A49

Forward foreign currency exchange contracts outstanding at December 31, 2013 (continued):


Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
Euro (continued),
Expiring 01/27/14	Goldman Sachs & Co.	EUR	4,034	$	5,435,500	$	5,548,998	$	113,498
Expiring 01/27/14	Goldman Sachs & Co.	EUR	1,799		2,411,600		2,474,757		63,157
Expiring 01/27/14	Goldman Sachs & Co.	EUR	1,776		2,449,700		2,443,533		(6,167	)
Expiring 01/27/14	JPMorgan Chase & Co.	EUR	1,786		2,426,600		2,457,494		30,894
Hungarian Forint,
Expiring 01/24/14	UBS AG	HUF	389,529		1,787,200		1,800,150		12,950
Expiring 01/24/14	Citigroup Global Markets	HUF	394,721		1,828,800		1,824,143		(4,657	)
Expiring 01/24/14	Citigroup Global Markets	HUF	134,864		614,278		623,255		8,977
Expiring 01/24/14	Citigroup Global Markets	HUF	134,864		614,446		623,255		8,809
Expiring 01/24/14	Deutsche Bank	HUF	788,013		3,642,137		3,641,683		(454	)
Expiring 01/24/14	HSBC Securities, Inc.	HUF	788,013		3,667,735		3,641,683		(26,052	)
Indian Rupee,
Expiring 02/03/14	Citigroup Global Markets	INR	76,063		1,209,500		1,229,699		20,199
Expiring 02/03/14	UBS AG	INR	263,466		4,183,656		4,223,774		40,118
Expiring 02/03/14	UBS AG	INR	397,774		6,249,645		6,376,953		127,308
Japanese Yen,
Expiring 01/27/14	Citigroup Global Markets	JPY	34,014		339,546		323,036		(16,510	)
Expiring 01/27/14	Goldman Sachs & Co.	JPY	170,160		1,726,200		1,616,015		(110,185	)
Malaysian Ringgit,
Expiring 01/16/14	UBS AG	MYR	3,922		1,214,200		1,196,254		(17,946	)
Expiring 01/22/14	UBS AG	MYR	5,796		1,817,500		1,766,933		(50,567	)
Expiring 01/22/14	Citigroup Global Markets	MYR	5,833		1,849,500		1,778,309		(71,191	)
Expiring 01/22/14	Citigroup Global Markets	MYR	5,799		1,822,900		1,767,848		(55,052	)
Mexican Peso,
Expiring 01/22/14	UBS AG	MXN	23,719		1,813,200		1,813,170		(30	)
Expiring 01/22/14	Barclays Bank PLC	MXN	23,888		1,808,700		1,826,135		17,435
Expiring 01/22/14	Citigroup Global Markets	MXN	39,817		3,075,800		3,043,842		(31,958	)
Expiring 01/22/14	Citigroup Global Markets	MXN	31,301		2,407,900		2,392,811		(15,089	)
Expiring 01/22/14	Citigroup Global Markets	MXN	23,969		1,849,500		1,832,320		(17,180	)
Expiring 01/22/14	Citigroup Global Markets	MXN	23,274		1,805,400		1,779,204		(26,196	)
Expiring 01/22/14	JPMorgan Chase & Co.	MXN	108,206		8,384,694		8,271,839		(112,855	)
Expiring 01/22/14	Morgan Stanley & Co.	MXN	23,924		1,845,500		1,828,885		(16,615	)
New Zealand Dollar,
Expiring 01/23/14	Citigroup Global Markets	NZD	10,977		9,134,774		9,012,265		(122,509	)
Expiring 01/23/14	JPMorgan Chase & Co.	NZD	1,499		1,230,100		1,231,010		910
Expiring 10/23/14	Goldman Sachs & Co.	NZD	3,824		3,082,500		3,063,790		(18,710	)
Norwegian Krone,
Expiring 01/24/14	UBS AG	NOK	10,933		1,848,200		1,800,827		(47,373	)
Expiring 01/24/14	Barclays Bank PLC	NOK	14,461		2,438,300		2,382,023		(56,277	)
Expiring 01/24/14	Barclays Bank PLC	NOK	11,119		1,811,800		1,831,563		19,763
Expiring 01/24/14	Barclays Bank PLC	NOK	11,065		1,808,800		1,822,552		13,752
Expiring 01/24/14	Citigroup Global Markets	NOK	11,102		1,805,800		1,828,731		22,931
Expiring 01/24/14	Credit Suisse	NOK	17,999		3,026,566		2,964,867		(61,699	)
Expiring 01/24/14	Deutsche Bank	NOK	10,915		1,795,700		1,797,883		2,183
Expiring 01/24/14	Goldman Sachs & Co.	NOK	14,848		2,422,300		2,445,727		23,427
Expiring 01/24/14	JPMorgan Chase & Co.	NOK	17,999		3,026,764		2,964,867		(61,897	)
Expiring 01/24/14	Morgan Stanley & Co.	NOK	10,896		1,849,500		1,794,850		(54,650	)
Peruvian Nuevo Sol,
Expiring 02/04/14	Citigroup Global Markets	PEN	6,714		2,407,085		2,386,287		(20,798	)
Philippine Peso,
Expiring 01/17/14	UBS AG	PHP	184,909		4,240,961		4,167,330		(73,631	)
Polish Zloty,
Expiring 01/24/14	Citigroup Global Markets	PLN	5,638		1,811,800		1,863,258		51,458
Expiring 01/24/14	Goldman Sachs & Co.	PLN	9,225		3,009,800		3,048,732		38,932
Expiring 01/24/14	JPMorgan Chase & Co.	PLN	30,792		10,065,887		10,176,494		110,607

SEE NOTES TO FINANCIAL STATEMENTS.

A50

Forward foreign currency exchange contracts outstanding at December 31, 2013 (continued):


Purchase Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Payable		Current Value		Unrealized Appreciation (Depreciation)
Romanian Leu,
Expiring 01/24/14	Barclays Bank PLC	RON	10,053	$	3,084,801	$	3,089,690	$	4,889
Expiring 01/24/14	Citigroup Global Markets	RON	10,053		3,087,170		3,089,690		2,520
Expiring 01/24/14	Deutsche Bank	RON	5,968		1,849,500		1,834,180		(15,320	)
Russian Ruble,
Expiring 01/17/14	Citigroup Global Markets	RUB	39,610		1,210,500		1,200,683		(9,817	)
Expiring 01/22/14	Citigroup Global Markets	RUB	39,374		1,219,200		1,192,461		(26,739	)
Expiring 01/22/14	Citigroup Global Markets	RUB	39,173		1,182,879		1,186,367		3,488
Expiring 01/22/14	Credit Suisse	RUB	39,603		1,232,100		1,199,388		(32,712	)
Singapore Dollar,
Expiring 01/17/14	Credit Suisse	SGD	5,715		4,597,291		4,529,019		(68,272	)
Expiring 01/17/14	Deutsche Bank	SGD	5,715		4,599,049		4,529,020		(70,029	)
South African Rand,
Expiring 01/30/14	Barclays Bank PLC	ZAR	23,730		2,376,596		2,252,133		(124,463	)
Expiring 01/30/14	Barclays Bank PLC	ZAR	369		35,132		35,063		(69	)
Expiring 01/30/14	Citigroup Global Markets	ZAR	12,331		1,213,000		1,170,287		(42,713	)
South Korean Won,
Expiring 01/17/14	UBS AG	KRW	5,514,677		5,088,044		5,225,448		137,404
Expiring 01/17/14	UBS AG	KRW	1,944,514		1,811,800		1,840,259		28,459
Expiring 01/17/14	UBS AG	KRW	1,286,414		1,207,900		1,217,443		9,543
Swedish Krona,
Expiring 01/24/14	UBS AG	SEK	15,952		2,450,400		2,479,121		28,721
Expiring 01/24/14	Barclays Bank PLC	SEK	15,875		2,421,300		2,467,139		45,839
Expiring 01/24/14	Barclays Bank PLC	SEK	11,932		1,811,300		1,854,379		43,079
Expiring 01/24/14	Barclays Bank PLC	SEK	11,841		1,808,800		1,840,160		31,360
Expiring 01/24/14	Credit Suisse	SEK	49,669		7,765,224		7,719,039		(46,185	)
Expiring 01/24/14	Deutsche Bank	SEK	15,389		2,394,300		2,391,614		(2,686	)
Expiring 01/24/14	Deutsche Bank	SEK	11,701		1,845,500		1,818,458		(27,042	)
Swiss Franc,
Expiring 01/24/14	Credit Suisse	CHF	2,730		3,062,100		3,060,425		(1,675	)
Expiring 01/24/14	Deutsche Bank	CHF	1,637		1,837,300		1,835,166		(2,134	)
Turkish Lira,
Expiring 01/30/14	Citigroup Global Markets	TRY	3,723		1,817,500		1,721,193		(96,307	)
Expiring 01/30/14	Citigroup Global Markets	TRY	3,714		1,822,900		1,717,287		(105,613	)
Expiring 01/30/14	Citigroup Global Markets	TRY	2,462		1,213,000		1,138,362		(74,638	)
Expiring 01/30/14	Goldman Sachs & Co.	TRY	500		241,600		231,134		(10,466	)
Expiring 01/30/14	JPMorgan Chase & Co.	TRY	3,724		1,811,800		1,721,755		(90,045	)

				$	286,199,496	$	284,146,872	$	(2,052,624	)


Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Australian Dollar,
Expiring 01/23/14	Citigroup Global Markets	AUD	1,466	$	1,383,363	$	1,307,022	$	76,341
Expiring 01/23/14	Goldman Sachs & Co.	AUD	1,700		1,583,500		1,515,263		68,237
Expiring 01/23/14	Goldman Sachs & Co.	AUD	2,585		2,433,300		2,304,523		128,777
Expiring 01/23/14	Goldman Sachs & Co.	AUD	3,288		3,020,100		2,931,554		88,546
Expiring 01/23/14	JPMorgan Chase & Co.	AUD	5,164		4,928,500		4,603,465		325,035
Brazilian Real,
Expiring 01/22/14	Citigroup Global Markets	BRL	3,415		1,470,300		1,439,117		31,183
Expiring 01/22/14	Citigroup Global Markets	BRL	2,762		1,232,100		1,164,168		67,932
British Pound,
Expiring 01/27/14	Citigroup Global Markets	GBP	398		637,678		658,288		(20,610	)
Expiring 01/27/14	Citigroup Global Markets	GBP	3,899		6,300,914		6,455,679		(154,765	)
Expiring 01/27/14	Credit Suisse	GBP	1,877		3,042,172		3,108,078		(65,906	)
Expiring 01/27/14	JPMorgan Chase & Co.	GBP	1,144		1,848,200		1,894,287		(46,087	)
Expiring 01/27/14	JPMorgan Chase & Co.	GBP	2,558		4,170,100		4,234,640		(64,540	)

SEE NOTES TO FINANCIAL STATEMENTS.

A51

Forward foreign currency exchange contracts outstanding at December 31, 2013 (continued):


Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Canadian Dollar,
Expiring 01/22/14	UBS AG	CAD	5,704	$	5,435,500	$	5,366,491	$	69,009
Expiring 01/22/14	Citigroup Global Markets	CAD	3,174		3,020,100		2,986,403		33,697
Expiring 01/22/14	Goldman Sachs & Co.	CAD	4,843		4,654,400		4,556,377		98,023
Expiring 01/22/14	JPMorgan Chase & Co.	CAD	3,185		3,018,900		2,996,527		22,373
Expiring 01/22/14	JPMorgan Chase & Co.	CAD	3,823		3,674,600		3,596,506		78,094
Colombian Peso,
Expiring 01/22/14	Citigroup Global Markets	COP	1,410,432		744,410		730,446		13,964
Expiring 01/22/14	Citigroup Global Markets	COP	2,322,778		1,224,900		1,202,939		21,961
Czech Koruna,
Expiring 01/24/14	Deutsche Bank	CZK	35,093		1,849,500		1,767,526		81,974
Euro,
Expiring 01/27/14	Barclays Bank PLC	EUR	94		128,954		128,895		59
Expiring 01/27/14	Credit Suisse	EUR	1,932		2,653,444		2,657,532		(4,088	)
Expiring 01/27/14	Goldman Sachs & Co.	EUR	4,898		6,658,200		6,737,531		(79,331	)
Hungarian Forint,
Expiring 01/24/14	UBS AG	HUF	1,636,048		7,380,700		7,560,751		(180,051	)
Expiring 01/24/14	Barclays Bank PLC	HUF	380,693		1,694,900		1,759,316		(64,416	)
Expiring 01/24/14	Citigroup Global Markets	HUF	268,840		1,211,100		1,242,405		(31,305	)
Indian Rupee,
Expiring 03/04/14	UBS AG	INR	112,373		1,937,300		1,789,995		147,305
Expiring 03/04/14	UBS AG	INR	112,966		1,944,500		1,799,435		145,065
Expiring 03/04/14	UBS AG	INR	133,937		2,325,300		2,133,492		191,808
Expiring 03/04/14	UBS AG	INR	151,938		2,591,700		2,420,232		171,468
Expiring 03/04/14	Citigroup Global Markets	INR	69,996		1,093,000		1,114,964		(21,964	)
Expiring 03/04/14	Citigroup Global Markets	INR	70,391		1,123,200		1,121,260		1,940
Expiring 03/04/14	Citigroup Global Markets	INR	87,301		1,330,000		1,390,624		(60,624	)
Japanese Yen,
Expiring 01/27/14	Barclays Bank PLC	JPY	96,429		991,783		915,793		75,990
Expiring 01/27/14	Credit Suisse	JPY	182,354		1,849,500		1,731,824		117,676
Malaysian Ringgit,
Expiring 01/16/14	Citigroup Global Markets	MYR	3,922		1,219,750		1,196,254		23,496
Expiring 01/22/14	UBS AG	MYR	7,842		2,407,800		2,390,723		17,077
Expiring 01/22/14	UBS AG	MYR	9,471		2,911,900		2,887,254		24,646
Mexican Peso,
Expiring 01/22/14	UBS AG	MXN	15,939		1,213,300		1,218,467		(5,167	)
Expiring 01/22/14	Citigroup Global Markets	MXN	32,236		2,464,199		2,464,261		(62	)
Expiring 01/22/14	Citigroup Global Markets	MXN	84,383		6,416,100		6,450,688		(34,588	)
Expiring 01/22/14	Credit Suisse	MXN	48,253		3,722,400		3,688,711		33,689
Expiring 01/22/14	JPMorgan Chase & Co.	MXN	32,353		2,450,400		2,473,219		(22,819	)
Expiring 01/22/14	Morgan Stanley & Co.	MXN	39,901		3,062,100		3,050,245		11,855
New Zealand Dollar,
Expiring 01/23/14	Goldman Sachs & Co.	NZD	1,485		1,232,100		1,219,371		12,729
Expiring 01/23/14	Goldman Sachs & Co.	NZD	2,234		1,845,500		1,834,417		11,083
Expiring 01/23/14	Goldman Sachs & Co.	NZD	3,582		2,952,700		2,941,021		11,679
Expiring 01/23/14	JPMorgan Chase & Co.	NZD	5,056		4,105,700		4,150,623		(44,923	)
Expiring 01/23/14	Morgan Stanley & Co.	NZD	3,675		3,062,100		3,017,426		44,674
Norwegian Krone,
Expiring 01/24/14	Citigroup Global Markets	NOK	11,141		1,815,900		1,835,164		(19,264	)
Expiring 01/24/14	Citigroup Global Markets	NOK	36,784		6,126,100		6,059,015		67,085
Expiring 01/24/14	Goldman Sachs & Co.	NOK	14,844		2,422,300		2,445,025		(22,725	)
Expiring 01/24/14	Morgan Stanley & Co.	NOK	17,328		2,801,600		2,854,213		(52,613	)
Expiring 01/24/14	Morgan Stanley & Co.	NOK	18,392		3,041,700		3,029,470		12,230
Peruvian Nuevo Sol,
Expiring 02/04/14	Citigroup Global Markets	PEN	6,861		2,426,100		2,438,508		(12,408	)
Philippine Peso,
Expiring 03/17/14	Citigroup Global Markets	PHP	185,239		4,231,900		4,178,207		53,693

SEE NOTES TO FINANCIAL STATEMENTS.

A52

Forward foreign currency exchange contracts outstanding at December 31, 2013 (continued):


Sale Contracts	Counterparty	Notional Amount (000)		Value at Settlement Date Receivable		Current Value		Unrealized Appreciation (Depreciation)
Polish Zloty,
Expiring 01/24/14	Morgan Stanley & Co.	PLN	24,657	$	7,872,800	$	8,148,955	$	(276,155	)
Romanian Leu,
Expiring 01/24/14	JPMorgan Chase & Co.	RON	14,402		4,351,800		4,426,054		(74,254	)
Russian Ruble,
Expiring 01/22/14	Citigroup Global Markets	RUB	52,139		1,602,800		1,579,056		23,744
Expiring 01/22/14	Citigroup Global Markets	RUB	109,032		3,288,800		3,302,082		(13,282	)
Singapore Dollar,
Expiring 01/17/14	UBS AG	SGD	4,529		3,627,400		3,588,886		38,514
Expiring 01/17/14	Goldman Sachs & Co.	SGD	2,266		1,811,300		1,795,259		16,041
Expiring 01/17/14	Goldman Sachs & Co.	SGD	4,552		3,631,700		3,607,165		24,535
South African Rand,
Expiring 01/30/14	Citigroup Global Markets	ZAR	11,289		1,092,000		1,071,410		20,590
Expiring 01/30/14	JPMorgan Chase & Co.	ZAR	25,356		2,460,200		2,406,475		53,725
South Korean Won,
Expiring 01/17/14	UBS AG	KRW	3,520,871		3,264,600		3,332,100		(67,500	)
Expiring 01/17/14	Citigroup Global Markets	KRW	1,956,620		1,813,700		1,851,715		(38,015	)
Swedish Krona,
Expiring 01/24/14	UBS AG	SEK	11,890		1,849,500		1,847,884		1,616
Expiring 01/24/14	UBS AG	SEK	43,134		6,621,600		6,703,381		(81,781	)
Expiring 01/24/14	UBS AG	SEK	50,363		7,767,900		7,826,813		(58,913	)
Expiring 01/24/14	Barclays Bank PLC	SEK	15,344		2,314,400		2,384,530		(70,130	)
Swiss Franc,
Expiring 01/24/14	Brown Brothers Harriman & Co.	CHF	2,205		2,462,799		2,472,257		(9,458	)
Expiring 01/24/14	Credit Suisse	CHF	2,161		2,405,420		2,423,333		(17,913	)
Turkish Lira,
Expiring 01/30/14	Citigroup Global Markets	TRY	56,614		28,157,039		26,174,666		1,982,373
Expiring 01/30/14	Deutsche Bank	TRY	1,734		862,500		801,556		60,944
Expiring 01/30/14	Deutsche Bank	TRY	6,180		3,026,500		2,857,161		169,339
Expiring 01/30/14	Goldman Sachs & Co.	TRY	7,458		3,639,900		3,447,988		191,912

				$	246,442,425	$	243,194,356	$	3,248,069

								$	1,195,445

Cross currency exchange contracts outstanding at December 31, 2013:


Settlement	Type	Notional Amount (000)		In Exchange for (000)		Unrealized Appreciation (Depreciation)			Counterparty
01/24/14	BUY	EUR	1,805	PLN	7,630	$	(39,109	)	Goldman Sachs & Co.
01/24/14	BUY	SEK	15,921	EUR	1,793		8,310		Deutsche Bank
01/27/14	BUY	EUR	1,767	GBP	1,477		(13,936	)	JPMorgan Chase & Co.
01/27/14	BUY	EUR	3,952	GBP	3,334		(82,258	)	Goldman Sachs & Co.
01/30/14	BUY	TRY	753	EUR	273		(28,016	)	Goldman Sachs & Co.

						$	(155,009	)

Interest rate swap agreements outstanding at December 31, 2013:


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
	Over-the-counter swap agreements:
	15,385		12/14/14		0.351%	3 month LIBOR(2)	$	7,775		$	—	$	7,775		Citigroup Global Markets
	19,220		01/25/16		0.503%	3 month LIBOR(1)		(32,718	)		—		(32,718	)	Citigroup Global Markets
	59,295		08/31/16		0.934%	3 month LIBOR(2)		510,484			—		510,484		Credit Suisse First Boston Corp.
	17,550		08/31/17		0.751%	3 month LIBOR(2)		232,961			—		232,961		Bank of Nova Scotia
	870		04/18/18		0.986%	6 month LIBOR(1)		20,577			—		20,577		Citigroup Global Markets

SEE NOTES TO FINANCIAL STATEMENTS.

A53

Interest rate swap agreements outstanding at December 31, 2013 (continued):


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
	Over-the-counter swap agreements (continued):
	25,690		11/15/19		1.334%	3 month LIBOR(1)	$	1,113,375		$	—	$	1,113,375		Citigroup Global Markets
	2,225		04/19/20		1.441%	6 month LIBOR(1)		119,241			—		119,241		Citigroup Global Markets
	2,090		12/13/27		2.200%	3 month LIBOR(2)		(320,499	)		—		(320,499	)	Barclays Capital Group
AUD	1,270		12/19/32		4.423%	6 month Australian Bank Bill Rate(2)		(77,511	)		—		(77,511	)	Citigroup Global Markets
AUD	1,620		12/20/32		4.420%	6 month Australian Bank Bill Rate(2)		(99,727	)		—		(99,727	)	Citigroup Global Markets
BRL	7,942		01/01/17		0.00%	1 day Brazil Interbank Rate(2)		(373,321	)		—		(373,321	)	Citigroup Global Markets
BRL	13,135		01/01/17		9.130%	1 day Brazil Interbank Rate(2)		(421,934	)		—		(421,934	)	Barclays Bank Group
BRL	37,393		01/02/17		10.580%	1 day Brazil Interbank Rate(2)		(632,137	)		—		(632,137	)	HSBC Bank USA NA
COP	1,935,000		11/19/18		0.00%	1 day COLIBOR OIS(2)		12,020			—		12,020		HSBC Bank USA, NA
COP	1,935,000		11/20/18		0.00%	1 day COLIBOR OIS(2)		7,844			—		7,844		Deutsche Bank AG
EUR	13,985		12/14/14		0.349%	6 month EURIBOR(1)		8,261			—		8,261		Citigroup Global Markets
EUR	16,020		01/25/16		0.695%	6 month EURIBOR(2)		201,648			—		201,648		Citigroup Global Markets
EUR	1,640		12/13/27		2.065%	6 month EURIBOR(1)		124,541			—		124,541		Barclays Capital Group
ILS	40,700		11/20/18		2.163%	3 month TELBOR(2)		(63,836	)		—		(63,836	)	Barclays Bank, PLC
MXN	65,000		12/02/15		5.080%	28 day Mexican Interbank Rate(2)		83,720			—		83,720		Morgan Stanley Capital Services
MXN	76,000		06/20/18		6.020%	28 day Mexican Interbank Rate(2)		166,926			—		166,926		Credit Suisse International Corp.
MXN	73,100		11/09/18		5.410%	28 day Mexican Interbank Rate(2)		(21,357	)		—		(21,357	)	Deutsche Bank AG
MXN	48,200		05/25/22		6.370%	28 day Mexican Interbank Rate(2)		(42,696	)		—		(42,696	)	Morgan Stanley & Co., Inc.
MXN	20,100		04/28/23		5.100%	28 day Mexican Interbank Rate(2)		(191,497	)		—		(191,497	)	Barclays Bank PLC
MXN	43,400		10/20/23		6.540%	28 day Mexican Interbank Rate(2)		(72,533	)		—		(72,533	)	Deutsche Bank
NZD	13,400		08/18/16		4.173%	3 month BBR(2)		163,332			—		163,332		Citigroup Global Markets
NZD	4,320		03/26/17		3.810%	3 month BBR(2)		(15,172	)		—		(15,172	)	HSBC Bank USA NA
NZD	325		08/12/18		4.143%	3 month BBR(2)		(2,065	)		—		(2,065	)	Citigroup Global Markets
NZD	245		08/13/18		4.160%	3 month BBR(2)		(1,402	)		—		(1,402	)	Citigroup Global Markets
NZD	245		08/13/18		4.218%	3 month BBR(2)		(876	)		—		(876	)	Barclays Capital Group
NZD	1,960		09/25/22		3.790%	3 month BBR(2)		(141,967	)		—		(141,967	)	Citigroup Global Markets
NZD	330		08/12/23		4.648%	3 month BBR(2)		(8,228	)		—		(8,228	)	Citigroup Global Markets
NZD	240		08/13/23		4.668%	3 month BBR(2)		(5,678	)		—		(5,678	)	Citigroup Global Markets
NZD	240		08/13/23		4.730%	3 month BBR(2)		(4,697	)		—		(4,697	)	Barclays Capital Group
PLN	31,900		06/28/18		3.736%	6 month WIBOR(2)		260,195			—		260,195		Citigroup Global Markets
RUB	95,000		05/17/23		7.250%	3 month MOSPRIME(2)		36,289			—		36,289		Credit Suisse International
RUB	95,000		05/20/23		7.250%	3 month MOSPRIME(2)		35,227			—		35,227		Credit Suisse International
ZAR	63,400		06/25/18		7.420%	3 month JIBAR(2)		51,580			—		51,580		Barclays Bank PLC
ZAR	10,000		09/03/33		8.970%	3 month JIBAR(2)		16,936			—		16,936		HSBC Bank USA NA

							$	643,081		$	—	$	643,081


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate		Value at Trade Date		Value at December 31, 2013			Unrealized Appreciation (Depreciation)
	Exchange-traded swap agreements:
	24,320		08/29/15		0.740%	3 month LIBOR(1)		$	174	$	(63,653	)	$	(63,827	)
	5,945		11/27/18		1.592%	3 month LIBOR(2)			177		44,439			44,262
	22,775		08/31/20		2.085%	3 month LIBOR(2)			286		419,949			419,663
	18,000		08/31/20		2.160%	3 month LIBOR(1)			258		245,464			245,206
	19,625		08/31/20		2.219%	3 month LIBOR(2)			268		194,640			194,372
	21,315		08/31/20		2.220%	3 month LIBOR(2)			278		210,091			209,813
	19,125		08/31/20		2.278%	3 month LIBOR(1)	��		265		117,793			117,528
	250		05/09/23		1.955%	3 month LIBOR(2)			—		(21,937	)		(21,937	)
	30,450		08/07/23		4.248%	3 month LIBOR(2)			287		(375,726	)		(376,013	)
	13,270		08/08/23		4.283%	3 month LIBOR(2)			210		(144,586	)		(144,796	)
	13,270		08/09/23		4.231%	3 month LIBOR(2)			210		(173,695	)		(173,905	)
EUR	43,700		09/11/15		0.565%	6 month EURIBOR(1)			352		(79,970	)		(80,322	)
GBP	3,800		11/21/23		2.761%	6 month GBP LIBOR(2)			292		(119,662	)		(119,954	)

SEE NOTES TO FINANCIAL STATEMENTS.

A54


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Value at Trade Date		Value at December 31, 2013			Unrealized Appreciation (Depreciation)
	Exchange-traded swap agreements (continued):
HUF	1,380,000		11/18/18		4.340%	6 month BUBOR(2)	$	29	$	74,951		$	74,922
HUF	209,900		09/02/23		6.085%	6 month BUBOR(2)		8		68,270			68,262
HUF	400,000		09/03/23		5.940%	6 month BUBOR(2)		14		109,412			109,398
NZD	32,430		09/01/15		3.858%	3 month NZD LIBOR(2)		142		(56,973	)		(57,115	)
PLN	25,000		09/03/18		3.985%	6 month WIBOR(2)		81		123,874			123,793
PLN	10,000		11/18/23		4.020%	6 month WIBOR(2)		74		(50,512	)		(50,586	)
ZAR	20,000		10/22/23		7.625%	3 month JIBAR(2)		32		(76,595	)		(76,627	)
ZAR	38,300		11/14/23		8.190%	3 month JIBAR(2)		45		(7,006	)		(7,051	)

							$	3,482	$	438,568		$	435,086

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

(2)	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, 2013:


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(4)		Fair Value			Upfront Premiums Paid (Received)			Unrealized Depreciation			Counterparty
Over-the-counter credit default swaps on corporate issues—Buy Protection(1):
American International Group, Inc.		03/20/18		3.700%		3,700	$	(483,059	)	$	—		$	(483,059	)	Deutsche Bank AG
Centex Corp.		06/20/14		1.000%		2,500		(11,854	)		(1,623	)		(10,231	)	Credit Suisse International
Duke Energy Corp.		03/20/14		0.700%		3,400		(5,934	)		—			(5,934	)	Goldman Sachs & Co.
R.R. Donnelley & Sons Co.		06/20/14		1.000%		7,000		(31,797	)		52,540			(84,337	)	Deutsche Bank AG
R.R. Donnelley & Sons Co.		09/20/16		1.000%		4,750		(21,026	)		229,661			(250,687	)	JPMorgan Chase
SLM Corp.		06/20/14		5.000%		4,150		(98,773	)		75,432			(174,205	)	JPMorgan Chase
Toll Brothers Financial Corp.		03/20/15		1.000%		4,695		(47,941	)		8,900			(56,841	)	Credit Suisse First Boston Corp.
Westvaco Corp.		09/20/19		1.000%		4,400		18,373			49,517			(31,144	)	JPMorgan Chase

							$	(682,011	)	$	414,427		$	(1,096,438	)


Over-the-counter credit default swaps on credit indices—Buy Protection(1):
iTRAXX.EUR.18.V1		12/20/17		1.000%		EUR23,000		(595,166	)		212,651			(807,817	)	Bank of America
iTRAXX.EUR.18.V1		12/20/17		1.000%		EUR23,000		(595,166	)		351,134			(946,300	)	Deutsche Bank

							$	(1,190,332	)	$	563,785		$	(1,754,117	)


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(4)		Fair Value(3)		Upfront Premiums Paid (Received)		Unrealized Appreciation		Counterparty
Over-the-counter credit default swaps on credit indices—Sell Protection(2):
CDX.NA.HY.17.V5		12/20/16		5.000%		6,720	$	628,203	$	281,867	$	346,336	Credit Suisse First Boston Corp.
CDX.NA.HY.17.V5		12/20/16		5.000%		12,960		1,211,533		592,200		619,333	Deutsche Bank
CDX.NA.HY.17.V5		12/20/16		5.000%		18,720		1,749,992		808,600		941,392	Deutsche Bank
CDX.NA.HY.17.V5		12/20/16		5.000%		12,000		1,121,790		525,833		595,957	Deutsche Bank

							$	4,711,518	$	2,208,500	$	2,503,018


Reference Entity/Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(4)		Value at Trade Date			Value at December 31, 2013			Unrealized Depreciation
Exchange-traded credit default swap on credit indices—Buy Protection(1):
CDX.NA.IG.21.V1		12/20/18		1.000%		175,250	$	(1,760,176	)	$	(3,154,990	)	$	(1,394,814	)

The Portfolio entered into credit default swaps as the protection seller on credit indices and sovereign issues to take an active short position with respect to the likelihood of a particular issuer’s default or the referenced entity’s credit soundness.

(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.

A55

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 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 obligation 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)

(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.

Currency swap agreements outstanding at December 31, 2013:


Notional Amount (000)#		Fund Receives		Notional Amount (000)#		Fund Pays	Counterparty	Termination Date		Fair Value			Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
	Over-the-counter swap agreements:
	22,206		3 month LIBOR	EUR	16,740	3 month EURIBOR minus 26.25 bps	Barclays Bank PLC		01/25/15	$	(760,021	)	$	—		$	(760,021	)
	3,494		3 month LIBOR	EUR	2,700	3 month EURIBOR minus 28.25 bps	Barclays Bank PLC		10/17/14		(210,883	)		—			(210,883	)
	2,143		3 month LIBOR	EUR	1,650	3 month EURIBOR minus 30.50 bps	Barclays Bank PLC		12/04/14		(121,252	)		—			(121,252	)
	502		3 month LIBOR	JPY	50,000	3 month EURIBOR minus 54.00 bps	Barclays Bank PLC		10/12/16		30,763			—			30,763
	18,547		3 month LIBOR	EUR	13,940	3 month EURIBOR minus 26.00 bps	Citigroup Global Markets		01/25/15		(577,610	)		—			(577,610	)
	956		3 month LIBOR	JPY	93,235	3 month EURIBOR minus 32.75 bps	Citigroup Global Markets		05/02/15		73,733			—			73,733
	1,541		3 month LIBOR	JPY	120,000	3.450%	Citigroup Global Markets		03/24/17		459,102			7,475			451,627
	384		3 month LIBOR	JPY	30,000	4.500%	Citigroup Global Markets		06/08/15		99,350			(15,095	)		114,445
	1,284		3 month LIBOR	JPY	100,000	4.500%	Citigroup Global Markets		06/08/15		310,227			(56,202	)		366,429
	1,157		3 month LIBOR	EUR	900	3 month EURIBOR minus 31.75 bps	HSBC		09/28/17		(71,182	)		—			(71,182	)
	1,040		3 month LIBOR	EUR	780	3 month EURIBOR minus 25.75 bps	HSBC Bank USA NA		01/17/15		(30,426	)		—			(30,426	)
	8,894		3 month LIBOR	EUR	6,770	3 month EURIBOR minus 26.00 bps	HSBC Bank USA NA		01/25/15		(304,271	)		—			(304,271	)
	TRY5,590		7.700%		2,904	3 month LIBOR	Barclays Capital Group		07/22/18		(368,938	)		—			(368,938	)
	TRY5,900		7.710%		3,068	3 month LIBOR	Barclays Capital Group		07/23/18		(392,195	)		—			(392,195	)
	TRY20,000		8.680%		9,749	3 month LIBOR	HSBC Bank USA NA		09/05/15		(246,622	)		—			(246,622	)
	TRY23,640		8.690%		11,376	3 month LIBOR	HSBC Bank USA NA		09/09/15		(151,788	)		—			(151,788	)

										$	(2,262,013	)	$	(63,822	)	$	(2,198,191	)

#	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 generally in active markets for identical securities.

Level 2—other

Level 3—significant

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

SEE NOTES TO FINANCIAL STATEMENTS.

A56

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1			Level 2			Level 3
Investments in Securities
Asset-Backed Securities
Collateralized Debt Obligations	$	—		$	442,479		$	—
Collateralized Loan Obligations		—			51,424,105			2,490,000
Non-Residential Mortgage-Backed Securities		—			19,193,190			—
Residential Mortgage-Backed Securities		—			66,163,576			—
Bank Loans		—			33,515,576			3,303,636
Commercial Mortgage-Backed Securities		—			159,681,238			—
Corporate Bonds		—			553,269,522			7,438,596
Covered Bond		—			1,184,750			—
Foreign Agencies		—			39,035,138			—
Municipal Bonds		—			23,550,391			—
Sovereigns		—			66,872,075			—
U.S. Government Agency Obligations		—			34,892,968			—
U.S. Treasury Obligations		—			8,400,737			—
Preferred Stock		1,226,250			—			—
Affiliated Mutual Funds		212,710,581			—			—
Other Financial Instruments*
Futures Contracts		(5,675,760	)		—			—
Forward Foreign Currency Exchange Contracts		—			1,040,436			—
Interest Rate Swaps		435,086			643,081			—
Credit Default Swap Agreements		(1,394,814	)		(341,603	)		(5,934	)
Currency Swap Agreements		—			(2,198,191	)		—

Total	$	207,301,343		$	1,056,769,468		$	13,226,298

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


	Collateralized Loan Obligations		Non-Residential Mortgage Backed Securities			Bank Loans			Corporate Bonds			Sovereigns			Credit Default Swaps
Balance as of 12/31/12	$	—	$	199,293		$	195,353		$	6,948,002		$	978,284		$	(27,303	)
Realized gain (loss)		—		130			(3,741	)		—			—			—	**
Change in unrealized appreciation (depreciation)***		—		(481	)		235,276			55,381			—			21,369
Purchases		2,490,000		—			3,034,472			—			—			—
Sales		—		(198,972	)		(193,678	)		(802,861	)		—			—
Accrued discount/premium		—		30			35,954			(733	)		—			—
Transfers into Level 3		—		—			—			1,238,807			—			—
Transfers out of Level 3		—		—			—			—			(978,284	)		—

Balance as of 12/31/13	$	2,490,000	$	—		$	3,303,636		$	7,438,596		$	—		$	(5,934	)

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

**	The realized loss incurred during the period for other financial instruments was $(24,131).

***	Of which, $(289,139) was included in Net Assets relating to securities held at the reporting period end.

It is the Portfolio’s policy to recognize transfers in and transfers out at the far value as of the beginning of period. At the reporting period end, 1 Sovereign transferred out of Level 3 as a result of being valued by an independent pricing source and 1 Corporate Bond transferred into level 3 as a result of using fixed income securities valuation model.

Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by the Board of Trustees, which contain unobservable inputs. Such methodologies include, but are not limited to, using prices provided by a single broker/dealer, the cost of the investment and prices of any recent transactions or bids/offers for such securities or any comparable securities.

SEE NOTES TO FINANCIAL STATEMENTS.

A57

Included in the table above, under Level 3, are securities that were fair valued using pricing methodologies approved by the Board of Trustees, which contain unobservable inputs. Such methodologies include, but not limited to, using prices provided by a single broker/dealer, the cost of the investment, and prices of any recent transactions or bids/offers for such securities or any comparable securities.

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


Affiliated Mutual Funds (including 7.8% of collateral received for securities on loan)	17.8	%
Commercial Mortgage-Backed Securities	13.3
Banking	10.8
Sovereigns	5.6
Residential Mortgage-Backed Securities	5.5
Collateralized Loan Obligations	4.5
Electric	3.3
Insurance	3.3
Foreign Agencies	3.3
U.S. Government Agency Obligations	2.9
Non-Captive Finance	2.9
Healthcare & Pharmaceutical	2.8
Media & Entertainment	2.8
Telecommunications	2.2
Municipal Bonds	2.0
Cable	1.9
Technology	1.6
Non-Residential Mortgage-Backed Securities	1.6
Chemicals	1.6
Capital Goods	1.5
Energy – Other	1.5
Foods	1.4
Automotive	1.3


Healthcare Insurance	1.2	%
Building Materials & Construction	1.1
Metals	1.0
Energy – Integrated	1.0
Tobacco	1.0
Pipelines & Other	0.9
Paper	0.9
Retailers	0.9
U.S. Treasury Obligations	0.7
Real Estate Investment Trusts	0.6
Airlines	0.5
Packaging	0.4
Gaming	0.3
Lodging	0.3
Financials	0.2
Aerospace & Defense	0.2
Consumer	0.2
Brokerage	0.2
Transportation	0.2
Covered Bond	0.1

	107.3
Liabilities in excess of other assets	(7.3	)

	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit 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, 2013 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	—	$	—		Due to broker — variation margin	$	1,394,814	*
Credit contracts	Premiums paid for swap agreements		3,188,335		Premiums received for swap agreements		1,623
Credit contracts	Unrealized appreciation on swap agreements		2,503,018		Unrealized depreciation on swap agreements		2,850,555
Foreign exchange contracts	Unrealized appreciation on forward currency contracts		6,661,272		Unrealized depreciation on forward currency contracts		5,620,836
Interest rate contracts	Due to broker — variation margin		1,871,234	*	Due to broker — variation margin		7,111,908	*
Interest rate contracts	Premiums paid for swap agreements		7,475		Premiums received for swap agreements		71,297
Interest rate contracts	Unrealized appreciation on swap agreements		4,209,929		Unrealized depreciation on swap agreements		5,765,039

Total		$	18,441,263			$	22,816,072

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

SEE NOTES TO FINANCIAL STATEMENTS.

A58

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Options Purchased(1)			Options Written			Futures			Forward Currency Contracts(2)			Swaps			Total
Credit contracts	$	—		$	—		$	—		$	—		$	(5,008,175	)	$	(5,008,175	)
Foreign exchange contracts		—			—			—			(7,118,438	)		—			(7,118,438	)
Interest rate contracts		(331,159	)		(39,440	)		(11,500,957	)		—			3,736,851			(8,134,705	)

Total	$	(331,159	)	$	(39,440	)	$	(11,500,957	)	$	(7,118,438	)	$	(1,271,324	)	$	(20,261,318	)


Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Futures			Forward Currency Contracts(3)		Swaps			Total
Credit contracts	$	—		$	—	$	(116,363	)	$	(116,363	)
Foreign exchange contracts		—			1,603,474		—			1,603,474
Interest rate contracts		(4,927,631	)		—		(2,622,504	)		(7,550,135	)

Total	$	(4,927,631	)	$	1,603,474	$	(2,738,867	)	$	(6,063,024	)

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

(2)	Included in net realized gain (loss) on foreign currency transactions in the Statement of Operations.

(3)	Included in net change in unrealized appreciation (depreciation) on foreign currencies in the Statement of Operations.

For the year ended December 31, 2013, the Portfolio’s average volume of derivative activities is as follows:


Options Purchased (Cost)	Options Written (Premium)	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)
$167,002	$14,256	$394,507,888	$45,413,351	$346,500,036	$279,646,490


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))	Currency Swaps (Notional Amount in USD (000))
$498,637	$253,297	$45,270	$61,617

Offsetting of financial instrument and derivative assets and liabilities:


Description	Gross Amounts Recognized			Gross Amounts not subject to netting		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	90,924,537		$	—	$	—	$	90,924,537
Exchange-traded and cleared derivatives		—			—		—		—
Over-the-counter derivatives*		13,374,219			—		—		13,374,219

									104,298,756

Liabilities:
Exchange-traded and cleared derivatives		(445,591	)		—		—		(445,591	)
Over-the-counter derivatives*		(14,236,430	)		—		—		(14,236,430	)

									(14,682,021	)

Collateral Amounts Pledged/(Received):
Exchange-traded and cleared derivatives									445,591
Securities on loan									(90,924,537	)
Over-the-counter derivatives									203,389

Net Amount								$	(658,822	)

SEE NOTES TO FINANCIAL STATEMENTS.

A59


		*DIVERSIFIED BOND PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $90,924,537:
Unaffiliated investments (cost $1,032,566,230)	$	1,072,084,227
Affiliated investments (cost $218,826,560)		212,710,581
Foreign currency, at value (cost $1,207,874)		1,212,699
Cash		145,583
Dividends and interest receivable		12,100,543
Receivable for investments sold		6,985,959
Unrealized appreciation on over-the-counter swap agreements		6,712,947
Unrealized appreciation on forward foreign currency exchange contracts		6,661,272
Premium paid for swap agreements		3,195,810
Receivable for Series shares sold		54,414
Prepaid expenses		11,506
Tax reclaim receivable		2,556

Total Assets		1,321,878,097

LIABILITIES
Collateral for securities on loan		93,280,167
Payable for investments purchased		15,549,952
Unrealized depreciation on over-the-counter swap agreements		8,615,594
Unrealized depreciation on forward foreign currency exchange contracts		5,620,836
Due to broker-variation margin		445,591
Management fee payable		408,378
Accrued expenses and other liabilities		222,250
Payable for Series shares reacquired		152,267
Premium received for swap agreements		72,920
Deferred trustees’ fees		3,137
Affiliated transfer agent fee payable		926

Total Liabilities		124,372,018

NET ASSETS	$	1,197,506,079

Net assets were comprised of:
Paid-in capital	$	1,161,237,542
Retained earnings		36,268,537

Net assets, December 31, 2013	$	1,197,506,079

Net asset value and redemption price per share, $1,197,506,079 / 108,774,003 outstanding shares of beneficial interest	$	11.01

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INCOME
Interest income	$	54,884,539
Affiliated dividend income		1,625,449
Affiliated income from securities loaned, net		141,843
Unaffiliated dividend income		88,594

		56,740,425

EXPENSES
Management fee		4,996,206
Custodian’s fees and expenses		258,000
Shareholders’ reports		147,000
Audit fee		41,000
Trustees’ fees		23,000
Insurance expenses		16,000
Legal fees and expenses		14,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Commitment fee on syndicated credit agreement		3,000
Miscellaneous		17,197

Total expenses		5,527,403

NET INVESTMENT INCOME		51,213,022

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: $(387,513))		10,285,340
Futures transactions		(11,500,957	)
Swap agreement transactions		(1,271,324	)
Foreign currency transactions		(7,055,751	)
Options written transactions		(39,440	)

		(9,582,132	)

Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $1,383,530)		(45,562,822	)
Futures		(4,927,631	)
Swap agreements		(2,738,867	)
Foreign currencies		1,563,151

		(51,666,169	)

NET LOSS ON INVESTMENTS AND FOREIGN CURRENCIES		(61,248,301	)

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(10,035,279	)

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	51,213,022		$	63,489,896
Net realized gain (loss) on investments and foreign currency transactions		(9,582,132	)		35,260,830
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		(51,666,169	)		44,689,412

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(10,035,279	)		143,440,138

DISTRIBUTIONS		(84,677,590	)		(119,592,407	)

SERIES SHARE TRANSACTIONS:
Series shares sold [2,523,548 and 10,761,927 shares, respectively]		29,114,479			126,405,304
Series shares issued in reinvestment of distributions [7,523,922 and 10,330,307 shares, respectively]		84,677,590			119,592,407
Series shares repurchased [11,154,465 and 43,877,359 shares, respectively]		(127,474,174	)		(520,843,578	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(13,682,105	)		(274,845,867	)

TOTAL DECREASE IN NET ASSETS		(108,394,974	)		(250,998,136	)
NET ASSETS:
Beginning of year		1,305,901,053			1,556,899,189

End of year	$	1,197,506,079		$	1,305,901,053

SEE NOTES TO FINANCIAL STATEMENTS.

A60


LONG-TERM INVESTMENTS — 97.0%
COMMON STOCKS	Shares		Value (Note 2)
Aerospace & Defense — 1.0%
Boeing Co. (The)		279,739	$	38,181,576

Airlines — 1.3%
American Airlines Group, Inc.*(a)		565,178		14,270,745
United Continental Holdings, Inc.*		967,039		36,583,085

				50,853,830

Auto Components — 1.1%
Lear Corp.		546,354		44,238,283

Automobiles — 0.6%
General Motors Co.*		558,559		22,828,306

Biotechnology — 6.1%
Alexion Pharmaceuticals, Inc.*(a)		335,413		44,630,054
Biogen Idec, Inc.*		246,895		69,068,876
BioMarin Pharmaceutical, Inc.*		775,348		54,483,704
Celgene Corp.*		219,581		37,100,406
Gilead Sciences, Inc.*		500,828		37,637,224

				242,920,264

Capital Markets — 3.7%
Goldman Sachs Group, Inc. (The)		554,372		98,267,981
Morgan Stanley		1,607,439		50,409,287

				148,677,268

Chemicals — 1.7%
Monsanto Co.		565,126		65,865,435

Commercial Banks — 2.4%
PNC Financial Services Group, Inc.		515,210		39,969,992
Wells Fargo & Co.		1,202,108		54,575,703

				94,545,695

Communications Equipment — 0.8%
JDS Uniphase Corp.*		2,528,247		32,816,646

Computers & Peripherals — 2.5%
Apple, Inc.		145,139		81,438,944
Stratasys Ltd.*(a)		138,890		18,708,483

				100,147,427

Consumer Finance — 0.9%
Capital One Financial Corp.		465,073		35,629,243

Diversified Financial Services — 3.3%
Citigroup, Inc.		975,066		50,810,689
ING US, Inc.		811,451		28,522,503
JPMorgan Chase & Co.		869,336		50,838,769

				130,171,961

Diversified Telecommunication Services — 2.0%
CenturyLink, Inc.(a)		1,182,988		37,678,168
Vivendi SA (France)		1,628,411		42,953,423

				80,631,591

Electronic Equipment, Instruments & Components — 1.3%
Flextronics International Ltd. (Singapore)*		6,579,992		51,126,538

Energy Equipment & Services — 2.1%
Halliburton Co.		887,495		45,040,371
Schlumberger Ltd.		417,537		37,624,259

				82,664,630


COMMON STOCKS (continued)	Shares		Value (Note 2)
Food & Staples Retailing — 2.1%
Costco Wholesale Corp.		352,567	$	41,958,999
Whole Foods Market, Inc.		723,898		41,863,021

				83,822,020

Food Products — 2.5%
Bunge Ltd.		566,789		46,539,045
Mondelez International, Inc. (Class A Stock)		1,491,419		52,647,091

				99,186,136

Health Care Providers & Services — 3.1%
Cigna Corp.		393,094		34,387,863
Express Scripts Holding Co.*		723,433		50,813,934
HCA Holdings, Inc.*		794,308		37,896,435

				123,098,232

Hotels, Restaurants & Leisure — 2.9%
Carnival Corp.		1,158,647		46,542,850
Dunkin’ Brands Group, Inc.(a)		615,443		29,664,352
Starbucks Corp.		496,233		38,899,705

				115,106,907

Independent Power Producers & Energy Traders — 0.9%
Calpine Corp.*		1,905,320		37,172,793

Industrial Conglomerates — 0.7%
Siemens AG, ADR (Germany)		214,034		29,645,849

Insurance — 1.3%
MetLife, Inc.		973,474		52,489,718

Internet & Catalog Retail — 5.1%
Amazon.com, Inc.*		230,052		91,742,437
ASOS PLC 144A (United Kingdom)*		385,268		39,254,434
priceline.com, Inc.*		60,863		70,747,151

				201,744,022

Internet Software & Services — 6.0%
Facebook, Inc. (Class A Stock)*		1,243,207		67,953,695
Google, Inc. (Class A Stock)*		102,852		115,267,265
LinkedIn Corp. (Class A Stock)*		199,805		43,323,718
Twitter, Inc.*(a)		166,909		10,623,758

				237,168,436

IT Services — 3.7%
FleetCor Technologies, Inc.*		162,916		19,088,868
MasterCard, Inc. (Class A Stock)		153,424		128,179,615

				147,268,483

Machinery — 1.1%
SPX Corp.		429,182		42,750,819

Media — 3.8%
Comcast Corp. (Class A Stock)		852,659		44,308,425
Liberty Global PLC (Class C Stock) (United Kingdom)*		583,464		49,197,684
Walt Disney Co. (The)		756,470		57,794,308

				151,300,417

Metals & Mining — 1.1%
Goldcorp, Inc. (Canada)		1,871,346		40,552,068
Kinross Gold Corp. (Canada)		927,185		4,061,070

				44,613,138

SEE NOTES TO FINANCIAL STATEMENTS.

A61


COMMON STOCKS (continued)	Shares		Value (Note 2)
Multiline Retail — 0.6%
J.C. Penney Co., Inc.*(a)		2,782,059	$	25,455,840

Oil, Gas & Consumable Fuels — 7.4%
Anadarko Petroleum Corp.		513,970		40,768,100
Hess Corp.		304,234		25,251,422
Marathon Oil Corp.		1,254,756		44,292,887
Marathon Petroleum Corp.		110,097		10,099,198
Noble Energy, Inc.		719,852		49,029,120
Occidental Petroleum Corp.		475,069		45,179,062
Suncor Energy, Inc. (Canada)		1,144,960		40,139,619
Williams Cos., Inc. (The)		989,883		38,179,787

				292,939,195

Personal Products — 1.9%
Avon Products, Inc.		1,977,645		34,055,047
Estee Lauder Cos., Inc. (The) (Class A Stock)		573,338		43,183,818

				77,238,865

Pharmaceuticals — 8.0%
Actavis PLC*		204,805		34,407,240
Allergan, Inc.		356,434		39,592,689
Bayer AG, ADR (Germany)		186,367		26,464,114
Bristol-Myers Squibb Co.		977,721		51,965,871
Merck & Co., Inc.		972,336		48,665,417
Novo Nordisk A/S, ADR (Denmark)		226,876		41,917,610
Sanofi, ADR (France)		660,780		35,437,631
Shire PLC, ADR (Ireland)		172,854		24,422,542
Teva Pharmaceutical Industries Ltd., ADR (Israel)		356,831		14,301,786

				317,174,900

Road & Rail — 1.2%
Canadian Pacific Railway Ltd. (Canada)		325,192		49,208,053

Semiconductors & Semiconductor Equipment — 0.4%
Intel Corp.		603,857		15,676,128

Software — 5.0%
Microsoft Corp.		1,071,705		40,113,918
Red Hat, Inc.*		540,496		30,289,396
Salesforce.com, Inc.*(a)		866,268		47,809,331
Splunk, Inc.*		360,750		24,772,703
VMware, Inc. (Class A Stock)*(a)		381,011		34,180,497
Workday, Inc. (Class A Stock)*(a)		270,408		22,487,129

				199,652,974

Specialty Retail — 3.1%
Bed Bath & Beyond, Inc.*(a)		108,132		8,683,000
Inditex SA, ADR (Spain)		1,520,948		50,221,703
TJX Cos., Inc. (The)		980,937		62,515,115

				121,419,818

Textiles, Apparel & Luxury Goods — 4.1%
Burberry Group PLC (United Kingdom)		829,444		20,898,198
Michael Kors Holdings Ltd.*		743,842		60,392,532
NIKE, Inc. (Class B Stock)		753,280		59,237,939
Ralph Lauren Corp.		128,264		22,647,575

				163,176,244


COMMON STOCKS (continued)	Shares		Value (Note 2)
Wireless Telecommunication Services — 0.2%
NII Holdings, Inc.*		2,377,019	$	6,536,802

TOTAL LONG-TERM INVESTMENTS (cost $2,569,869,570)				3,855,144,482

SHORT-TERM INVESTMENT — 5.9%
AFFILIATED MONEY MARKET MUTUAL FUND
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $234,213,027; includes $128,902,801 of cash collateral for securities on loan) (Note 4)(b)(w)		234,213,027		234,213,027

TOTAL INVESTMENTS — 102.9% (cost $2,804,082,597)				4,089,357,509
LIABILITIES IN EXCESS OF OTHER ASSETS — (2.9)%				(116,113,013	)

NET ASSETS — 100.0%			$	3,973,244,496

The following abbreviation is used in the Portfolio description:


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.
ADR		American Depositary Receipt

*	Non-income producing security.

(a)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $126,169,077; cash collateral of $128,902,801 (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.

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

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

Level 1—quoted

prices generally in active markets for identical securities.

Level 2—other

Level 3—significant

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

SEE NOTES TO FINANCIAL STATEMENTS.

A62

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks	$	3,752,038,427	$	103,106,055	$	—
Affiliated Money Market Mutual Fund		234,213,027		—		—

Total	$	3,986,251,454	$	103,106,055	$	—

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 were as follows:


Pharmaceuticals	8.0	%
Oil, Gas & Consumable Fuels	7.4
Biotechnology	6.1
Internet Software & Services	6.0
Affiliated Money Market Mutual Fund (3.2% represents investments purchased with collateral from securities on loan)	5.9
Internet & Catalog Retail	5.1
Software	5.0
Textiles, Apparel & Luxury Goods	4.1
Media	3.8
Capital Markets	3.7
IT Services	3.7
Diversified Financial Services	3.3
Health Care Providers & Services	3.1


Specialty Retail	3.1	%
Hotels, Restaurants & Leisure	2.9
Computers & Peripherals	2.5
Food Products	2.5
Commercial Banks	2.4
Food & Staples Retailing	2.1
Energy Equipment & Services	2.1
Diversified Telecommunication Services	2.0
Personal Products	1.9
Chemicals	1.7
Insurance	1.3
Electronic Equipment, Instruments & Components	1.3
Airlines	1.3
Road & Rail	1.2
Metals & Mining	1.1
Auto Components	1.1
Machinery	1.1
Aerospace & Defense	1.0
Independent Power Producers & Energy Traders	0.9
Consumer Finance	0.9
Communications Equipment	0.8
Industrial Conglomerates	0.7
Multiline Retail	0.6
Automobiles	0.6
Semiconductors & Semiconductor Equipment	0.4
Wireless Telecommunication Services	0.2

	102.9
Liabilities in excess of other assets	(2.9	)

	100.0	%

The Portfolio invested in financial instruments during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting as well as instruments subject to collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.

Offsetting of financial instrument assets and liabilities


Description	Gross Amounts Recognized		Gross Amounts not subject to netting		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on Loan	$	126,169,077	$	—	$	—	$	126,169,077

Collateral Amounts Pledged/(Received):
Securities on Loan								(126,169,077	)

Net Amount							$	—

SEE NOTES TO FINANCIAL STATEMENTS.

A63


		*EQUITY PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments at value, including securities on loan of $126,169,077:
Unaffiliated investments (cost $2,569,869,570)	$	3,855,144,482
Affiliated investments (cost $234,213,027)		234,213,027
Cash		989,742
Foreign currency, at value (cost $54,065)		53,893
Receivable for investments sold		36,234,924
Dividends receivable		3,220,257
Tax reclaim receivable		1,313,777
Receivable for Series shares sold		14,720
Prepaid expenses		29,665

Total Assets		4,131,214,487

LIABILITIES
Collateral for securities on loan		128,902,801
Payable for investments purchased		26,584,648
Management fee payable		1,488,528
Payable for Series shares repurchased		691,433
Accrued expenses and other liabilities		300,402
Affiliated transfer agent fees payable		926
Deferred trustees’ fees		792
Distribution fee payable		461

Total Liabilities		157,969,991

NET ASSETS	$	3,973,244,496

Net assets were comprised of:
Paid-in capital	$	2,400,979,118
Retained earnings		1,572,265,378

Net assets, December 31, 2013	$	3,973,244,496

Class I:
Net asset value and redemption price per share, $3,970,925,750 / 110,899,705 outstanding shares of beneficial interest	$	35.81

Class II:
Net asset value and redemption price per share, $2,318,746 / 64,328 outstanding shares of beneficial interest	$	36.05

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INVESTMENT INCOME
Unaffiliated dividend income (net of $1,410,737 foreign withholding tax)	$	46,732,042
Affiliated income from securities lending, net		519,974
Affiliated dividend income		103,723

		47,355,739

EXPENSES
Management fee		15,969,567
Distribution fee—Class II		4,988
Administration fee—Class II		2,993
Custodian’s fees and expenses		431,000
Shareholders’ reports		264,000
Insurance expenses		41,000
Trustees’ fees		41,000
Audit fee		24,000
Legal fees and expenses		19,000
Transfer agent’s fees and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Commitment fee on syndicated credit agreement		5,000
Miscellaneous		24,876

Total expenses		16,839,424

NET INVESTMENT INCOME		30,516,315

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		417,663,494
Foreign currency transactions		(52,774	)

		417,610,720

Net change in unrealized appreciation (depreciation) on:
Investments		579,350,926
Foreign currencies		55,066

		579,405,992

NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		997,016,712

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,027,533,027

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	30,516,315		$	32,977,472
Net realized gain on investment and foreign currency transactions		417,610,720			160,093,957
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		579,405,992			208,970,300

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		1,027,533,027			402,041,729

DISTRIBUTIONS
Class I		—			(18,817,932	)
Class II		—			(4,233	)

TOTAL DISTRIBUTIONS		—			(18,822,165	)

SERIES SHARE TRANSACTIONS (Note 7):
Series shares sold		15,823,185			17,165,247
Series shares issued in reinvestment of distributions		—			18,822,165
Series shares repurchased		(238,940,216	)		(249,839,713	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(223,117,031	)		(213,852,301	)

TOTAL INCREASE IN NET ASSETS		804,415,996			169,367,263
NET ASSETS:
Beginning of year		3,168,828,500			2,999,461,237

End of year	$	3,973,244,496		$	3,168,828,500

SEE NOTES TO FINANCIAL STATEMENTS.

A64


LONG-TERM INVESTMENTS — 94.1%
COMMON STOCKS — 70.7%	Shares		Value (Note 2)
Aerospace & Defense — 2.3%
Boeing Co. (The)		61,500	$	8,394,135
General Dynamics Corp.		188,400		18,001,620
Honeywell International, Inc.		72,500		6,624,325
L-3 Communications Holdings, Inc.		87,600		9,360,936
Northrop Grumman Corp.		184,100		21,099,701
Raytheon Co.		152,700		13,849,890
Safran SA (France)		13,345		927,861
Spirit Aerosystems Holdings, Inc. (Class A Stock)*		126,500		4,311,120
Teledyne Technologies, Inc.*		8,300		762,438
Thales SA (France)		12,074		778,095
United Technologies Corp.		5,600		637,280

				84,747,401

Air Freight & Logistics — 0.6%
Deutsche Post AG (Germany)		17,271		630,826
FedEx Corp.		8,500		1,222,045
United Parcel Service, Inc. (Class B Stock)		187,100		19,660,468

				21,513,339

Airlines — 0.1%
Alaska Air Group, Inc.		20,200		1,482,074
easyJet PLC (United Kingdom)		32,099		818,112
International Consolidated Airlines Group SA (United Kingdom)*		9,383		62,503
Japan Airlines Co. Ltd. (Japan)		600		29,599

				2,392,288

Auto Components — 0.3%
Aisin Seiki Co. Ltd. (Japan)		2,000		81,312
BorgWarner, Inc.		75,200		4,204,432
Bridgestone Corp. (Japan)		3,100		117,449
Continental AG (Germany)		121		26,583
Denso Corp. (Japan)		18,100		956,199
Johnson Controls, Inc.		73,900		3,791,070
NGK Spark Plug Co. Ltd. (Japan)		2,000		47,401
Toyota Industries Corp. (Japan)		1,700		76,848
Valeo SA (France)		6,990		774,644

				10,075,938

Automobiles — 0.7%
Bayerische Motoren Werke AG (Germany)		2,757		323,763
Daimler AG (Germany)		18,334		1,591,113
Fiat SpA (Italy)*		89,138		729,591
Ford Motor Co.		1,319,300		20,356,799
Fuji Heavy Industries Ltd. (Japan)		30,100		865,043
Honda Motor Co. Ltd. (Japan)		1,000		41,277
Suzuki Motor Corp. (Japan)		1,300		35,031
Thor Industries, Inc.		35,500		1,960,665
Toyota Motor Corp. (Japan)		28,400		1,731,693
Volkswagen AG (Germany)		1,024		278,035

				27,913,010

Beverages — 1.6%
Anheuser-Busch InBev NV (Belgium)		12,791		1,360,152
Asahi Group Holdings Ltd. (Japan)		3,900		110,057
Coca-Cola Co. (The)		329,100		13,595,121


COMMON STOCKS (continued)	Shares		Value (Note 2)
Beverages (continued)
Coca-Cola Enterprises, Inc.		162,900	$	7,188,777
Coca-Cola West Co. Ltd. (Japan)		600		12,708
Diageo PLC (United Kingdom)		28,158		933,121
Dr. Pepper Snapple Group, Inc.		41,800		2,036,496
Heineken Holding NV (Netherlands)		5,294		335,110
Heineken NV (Netherlands)		752		50,825
Kirin Holdings Co. Ltd. (Japan)		11,000		158,416
PepsiCo, Inc.		384,320		31,875,501
SABMiller PLC (United Kingdom)		17,121		881,309
Treasury Wine Estates Ltd. (Australia)		4,908		21,168

				58,558,761

Biotechnology — 1.7%
Actelion Ltd. (Switzerland)		1,021		86,602
Alexion Pharmaceuticals, Inc.*		85,100		11,323,406
Amgen, Inc.		120,308		13,734,361
Biogen Idec, Inc.*		84,800		23,722,800
Celgene Corp.*		40,600		6,859,776
Gilead Sciences, Inc.*		115,700		8,694,855

				64,421,800

Building Products — 0.4%
AO Smith Corp.		30,300		1,634,382
Armstrong World Industries, Inc.*		20,600		1,186,766
Assa Abloy AB (Sweden) (Class B Stock)		9,334		494,180
Daikin Industries Ltd. (Japan)		2,400		149,767
Lennox International, Inc.		20,000		1,701,200
LIXIL Group Corp. (Japan)		2,600		71,376
Masco Corp.		429,100		9,770,607
TOTO Ltd. (Japan)		50,000		793,057

				15,801,335

Capital Markets — 1.9%
Aberdeen Asset Management PLC (United Kingdom)		97,456		810,416
BlackRock, Inc.		25,100		7,943,397
Daiwa Securities Group, Inc. (Japan)		74,000		741,151
ETRADE Financial Corp.		35,900		705,076
Franklin Resources, Inc.		284,800		16,441,504
Goldman Sachs Group, Inc. (The)		152,000		26,943,520
Invesco Ltd.		11,300		411,320
Investec PLC (United Kingdom)		59,886		434,941
Macquarie Group Ltd.		11,893		583,739
Morgan Stanley		107,500		3,371,200
Raymond James Financial, Inc., Common Stock		51,100		2,666,909
State Street Corp.		97,600		7,162,864
T. Rowe Price Group, Inc.		15,200		1,273,304
UBS AG (Switzerland)		1,443		27,630

				69,516,971

Chemicals — 1.4%
Air Water, Inc. (Japan)		2,000		27,106
Asahi Kasei Corp. (Japan)		100,000		784,382
BASF SE (Germany)		9,457		1,009,387
Daicel Corp. (Japan)		43,000		350,442
Dow Chemical Co. (The)		65,000		2,886,000

SEE NOTES TO FINANCIAL STATEMENTS.

A65


COMMON STOCKS (continued)	Shares		Value (Note 2)
Chemicals (continued)
Eastman Chemical Co.		14,200	$	1,145,940
EMS-Chemie Holding AG (Switzerland)		1,874		668,219
International Flavors & Fragrances, Inc.		53,100		4,565,538
Israel Chemicals Ltd. (Israel)		2,783		23,213
K+S AG (Germany)(a)		12,469		384,204
Kaneka Corp. (Japan)		3,000		19,698
LyondellBasell Industries NV (Netherlands) (Class A Stock)		209,100		16,786,548
Mitsubishi Chemical Holdings Corp. (Japan)		3,000		13,883
Nippon Paint Co. Ltd. (Japan)		2,000		33,276
Orica Ltd. (Australia)		3,768		80,574
PPG Industries, Inc.		88,300		16,746,978
Westlake Chemical Corp.		59,300		7,238,751
Yara International ASA (Norway)		18,067		779,198

				53,543,337

Commercial Banks — 2.8%
Australia & New Zealand Banking Group Ltd. (Australia)		51,642		1,490,808
Banco Bilbao Vizcaya Argentaria SA (Spain)		36,909		456,586
Banco Santander SA (Spain)		114,583		1,030,392
Bank Hapoalim BM (Israel)		135,378		758,536
Bank of East Asia Ltd. (Hong Kong)		50,400		213,950
Bank of Yokohama Ltd. (The) (Japan)		2,000		11,158
BNP Paribas SA (France)		983		76,681
BOC Hong Kong Holdings Ltd. (Hong Kong)		38,500		123,649
Commonwealth Bank of Australia (Australia)		25,601		1,783,798
DNB ASA (Norway)		49,292		884,701
Fifth Third Bancorp		539,400		11,343,582
Fukuoka Financial Group, Inc. (Japan)		8,000		35,116
Hang Seng Bank Ltd. (Hong Kong)		47,800		776,347
HSBC Holdings PLC (United Kingdom)		255,106		2,799,586
Huntington Bancshares, Inc.		950,400		9,171,360
Iyo Bank Ltd. (The) (Japan)		2,700		26,490
Joyo Bank Ltd. (The) (Japan)		7,000		35,792
KBC Groep NV (Belgium)		10,115		575,096
KeyCorp		1,056,900		14,183,598
Lloyds Banking Group PLC (United Kingdom)*		171,247		224,709
Mitsubishi UFJ Financial Group, Inc. (Japan)		235,500		1,563,578
Mizrahi Tefahot Bank Ltd. (Israel)		1,129		14,778
Mizuho Financial Group, Inc. (Japan)		234,100		508,238
National Australia Bank Ltd. (Australia)		4,091		127,688
Nishi-Nippon City Bank Ltd. (The) (Japan)		7,000		18,858
PNC Financial Services Group, Inc.		85,000		6,594,300


COMMON STOCKS (continued)	Shares		Value (Note 2)
Commercial Banks (continued)
Regions Financial Corp.		32,100	$	317,469
Resona Holdings, Inc. (Japan)		91,200		465,345
Skandinaviska Enskilda Banken AB (Sweden) (Class A Stock)		71,742		947,803
Sumitomo Mitsui Financial Group, Inc. (Japan)		26,500		1,378,090
Sumitomo Mitsui Trust Holdings, Inc. (Japan)		33,000		174,610
Suruga Bank Ltd. (Japan)		1,000		17,957
Swedbank AB (Sweden) (Class A Stock)		10,777		303,581
UniCredit SpA (Italy)		48,503		357,791
US Bancorp		13,900		561,560
Wells Fargo & Co.		966,812		43,893,265
Westpac Banking Corp. (Australia)		50,107		1,452,531

				104,699,377

Commercial Services & Supplies — 0.1%
Dai Nippon Printing Co. Ltd. (Japan)		6,000		63,733
Pitney Bowes, Inc.(a)		15,400		358,820
Secom Co. Ltd. (Japan)		2,100		126,703
Steelcase, Inc. (Class A Stock)		25,100		398,086
Toppan Printing Co. Ltd. (Japan)		3,000		24,014
UniFirst Corp.		9,500		1,016,500

				1,987,856

Communications Equipment — 1.7%
Cisco Systems, Inc.		1,209,900		27,162,255
Harris Corp.		52,300		3,651,063
Juniper Networks, Inc.*		118,300		2,670,031
Nokia OYJ (Finland)*		42,763		345,526
QUALCOMM, Inc.		400,700		29,751,975

				63,580,850

Computers & Peripherals — 3.1%
Apple, Inc.		136,000		76,310,960
EMC Corp.		498,500		12,537,275
Hewlett-Packard Co.		741,900		20,758,362
NetApp, Inc.		73,700		3,032,018
Western Digital Corp.		53,800		4,513,820

				117,152,435

Construction & Engineering — 0.4%
ACS Actividades de Construccion y Servicios SA (Spain)		18,409		634,588
AECOM Technology Corp.*		82,200		2,419,146
Bouygues SA (France)		15,365		581,042
Jacobs Engineering Group, Inc.*		106,800		6,727,332
JGC Corp. (Japan)		1,000		39,244
Quanta Services, Inc.*		177,400		5,598,744
Vinci SA (France)		5,872		385,975

				16,386,071

Construction Materials
Imerys SA (France)		2,182		189,939

Consumer Finance — 0.3%
Capital One Financial Corp.		33,400		2,558,774
Discover Financial Services		185,800		10,395,510

				12,954,284

SEE NOTES TO FINANCIAL STATEMENTS.

A66


COMMON STOCKS (continued)	Shares		Value (Note 2)
Containers & Packaging
Packaging Corp. of America		13,600	$	860,608
Toyo Seikan Group Holdings Ltd. (Japan)		1,300		27,987

				888,595

Diversified Consumer Services — 0.1%
Graham Holdings Co. (Class B Stock)		8,400		5,571,888

Diversified Financial Services — 3.1%
Bank of America Corp.		1,462,982		22,778,630
Berkshire Hathaway, Inc. (Class B Stock)*		133,500		15,827,760
Citigroup, Inc.		574,950		29,960,645
Exor SpA (Italy)		1,054		41,892
Industrivarden AB (Sweden) (Class C Stock)		1,250		23,784
Investor AB (Sweden) (Class B Stock)		25,544		880,337
JPMorgan Chase & Co.		637,594		37,286,497
McGraw-Hill Financial, Inc.		87,000		6,803,400
ORIX Corp. (Japan)		13,200		231,949
Pohjola Bank PLC (Finland) (Class A Stock)		9,806		196,618

				114,031,512

Diversified Telecommunication Services — 1.5%
AT&T, Inc.		816,647		28,713,309
Bezeq the Israeli Telecommunication Corp. Ltd. (Israel)		158,628		269,011
BT Group PLC (United Kingdom)		189,488		1,194,906
CenturyLink, Inc.		270,200		8,605,870
Deutsche Telekom AG (Germany)		2,378		40,974
Nippon Telegraph & Telephone Corp. (Japan)		16,900		910,241
Swisscom AG (Switzerland)		1,495		790,098
Telefonica SA (Spain)		826		13,506
Telenor ASA (Norway)		21,612		516,388
TeliaSonera AB (Sweden)		98,920		825,033
Telstra Corp. Ltd. (Australia)		44,551		209,104
Verizon Communications, Inc.		261,188		12,834,778

				54,923,218

Electric Utilities — 1.0%
Cheung Kong Infrastructure Holdings Ltd. (Hong Kong)		10,000		63,212
Chubu Electric Power Co., Inc. (Japan)		6,300		81,445
Chugoku Electric Power Co., Inc. (The) (Japan)		3,000		46,711
Duke Energy Corp.		131,400		9,067,914
EDP—Energias de Portugal SA (Portugal)		116,565		428,156
Electricite de France SA (France)		21,129		747,487
Exelon Corp.(a)		239,300		6,554,427
Hokkaido Electric Power Co., Inc. (Japan)*		1,900		21,865
Hokuriku Electric Power Co. (Japan)		1,700		23,087
Iberdrola SA (Spain)		22,892		146,092
Kansai Electric Power Co., Inc. (The) (Japan)*		7,000		80,565


COMMON STOCKS (continued)	Shares		Value (Note 2)
Electric Utilities (continued)
Kyushu Electric Power Co., Inc. (Japan)*		4,400	$	56,196
Power Assets Holdings Ltd. (Hong Kong)		4,000		31,842
PPL Corp.		508,500		15,300,765
Shikoku Electric Power Co., Inc. (Japan)*		1,800		26,994
SSE PLC (United Kingdom)		1,588		36,086
Tohoku Electric Power Co., Inc. (Japan)*		4,600		51,820
Tokyo Electric Power Co., Inc. (Japan)*		14,900		73,414
Xcel Energy, Inc.		170,900		4,774,946

				37,613,024

Electrical Equipment — 0.6%
ABB Ltd. (Switzerland)		6,548		173,129
AMETEK, Inc.		31,400		1,653,838
Emerson Electric Co.		182,100		12,779,778
Fuji Electric Co. Ltd. (Japan)		34,000		159,305
Nidec Corp. (Japan)		800		78,812
OSRAM Licht AG (Germany)*		2,395		135,087
Rockwell Automation, Inc.		49,500		5,848,920

				20,828,869

Electronic Equipment & Instruments
Murata Manufacturing Co. Ltd. (Japan)		9,000		800,400

Electronic Equipment, Instruments & Components — 0.5%
Arrow Electronics, Inc.*		74,200		4,025,350
Avnet, Inc.		83,300		3,674,363
Citizen Holdings Co. Ltd. (Japan)		2,700		22,780
FUJIFILM Holdings Corp. (Japan)		31,900		905,483
Hirose Electric Co. Ltd. (Japan)		300		42,765
Hitachi Ltd. (Japan)		102,000		773,380
Hoya Corp. (Japan)		4,400		122,372
Ingram Micro, Inc. (Class A Stock)*		119,300		2,798,778
Jabil Circuit, Inc.		93,800		1,635,872
Keyence Corp. (Japan)		500		214,093
Nippon Electric Glass Co. Ltd. (Japan)		5,000		26,266
Omron Corp. (Japan)		2,100		92,806
ScanSource, Inc.*		7,200		305,496
SYNNEX Corp.*		12,500		842,500
TE Connectivity Ltd. (Switzerland)		61,400		3,383,754

				18,866,058

Energy Equipment & Services — 1.3%
Baker Hughes, Inc.		167,700		9,267,102
Ensco PLC (Class A Stock)		138,200		7,902,276
Schlumberger Ltd.		340,000		30,637,400
Seadrill Ltd. (Bermuda)		5,252		215,250
Transocean Ltd.		3,652		178,728

				48,200,756

Food & Staples Retailing — 2.0%
Aeon Co. Ltd. (Japan) (Class A Stock)		6,100		82,696
Carrefour SA (France)		5,277		209,463

SEE NOTES TO FINANCIAL STATEMENTS.

A67


COMMON STOCKS (continued)	Shares		Value (Note 2)
Food & Staples Retailing (continued)
Casino Guichard Perrachon SA (France)		6,608	$	762,474
CVS Caremark Corp.		354,300		25,357,251
FamilyMart Co. Ltd. (Japan)		400		18,275
J Sainsbury PLC (United Kingdom)		118,715		718,494
Koninklijke Ahold NV (Netherlands)		47,423		852,249
Kroger Co. (The)		370,100		14,630,053
Wal-Mart Stores, Inc.		384,000		30,216,960
Wesfarmers Ltd. (Australia)		2,344		92,290
WM Morrison Supermarkets PLC (United Kingdom)		178,985		774,797
Woolworths Ltd. (Australia)		6,058		183,444

				73,898,446

Food Products — 0.8%
Ajinomoto Co., Inc. (Japan)		4,000		57,907
Archer-Daniels-Midland Co.		362,900		15,749,860
Chiquita Brands International, Inc.*		51,900		607,230
Darling International, Inc.*		66,300		1,384,344
Dean Foods Co.*		149,400		2,568,186
Golden Agri-Resources Ltd. (Singapore)		38,000		16,450
J.M. Smucker Co. (The)		7,600		787,512
Kraft Foods Group, Inc.		17,400		938,208
Lindt & Spruengli AG (Switzerland)		9		485,287
Lindt & Spruengli AG (Switzerland) (Class C Stock)		9		40,568
Nestle SA (Switzerland)		21,912		1,605,932
Nippon Meat Packers, Inc. (Japan)		2,000		34,375
Suedzucker AG (Germany)		26,593		718,412
Tyson Foods, Inc. (Class A Stock)		104,200		3,486,532
Unilever NV (Netherlands)		11,485		461,760
Wilmar International Ltd. (Singapore)		267,000		725,247

				29,667,810

Gas Utilities — 0.1%
AGL Resources, Inc.		21,500		1,015,445
Gas Natural SDG SA (Spain)		2,445		62,933
New Jersey Resources Corp.		24,300		1,123,632
Snam SpA (Italy)		20,849		116,533
UGI Corp.		39,300		1,629,378

				3,947,921

Healthcare Equipment & Supplies — 1.4%
Abbott Laboratories		567,800		21,763,774
Baxter International, Inc.		55,900		3,887,845
Becton Dickinson and Co.		40,900		4,519,041
CareFusion Corp.*		78,100		3,109,942
Covidien PLC (Ireland)		34,900		2,376,690
Hill-Rom Holdings, Inc.(a)		26,700		1,103,778
Medtronic, Inc.		81,300		4,665,807
Smith & Nephew PLC (United Kingdom)		4,238		60,530
St. Jude Medical, Inc.		124,300		7,700,385
Stryker Corp.		44,000		3,306,160

				52,493,952

Healthcare Providers & Services — 1.0%
Alfresa Holdings Corp. (Japan)		400		19,854
CIGNA Corp.		121,000		10,585,080


COMMON STOCKS (continued)	Shares		Value (Note 2)
Healthcare Providers & Services (continued)
Fresenius SE & Co. KGaA (Germany)		4,960	$	762,725
Medipal Holdings Corp. (Japan)		49,200		649,512
Sonic Healthcare Ltd. (Australia)		34,327		509,427
UnitedHealth Group, Inc.(a)		152,900		11,513,370
WellPoint, Inc.		131,800		12,177,002

				36,216,970

Healthcare Technology — 0.1%
Cerner Corp.*		53,800		2,998,812

Hotels, Restaurants & Leisure — 1.1%
Flight Centre Ltd. (Australia)		565		24,063
Galaxy Entertainment Group Ltd. (Hong Kong)*		90,000		810,294
Jack in the Box, Inc.*		65,500		3,276,310
Marriott Vacations Worldwide Corp.*		34,400		1,814,944
McDonald’s Corp.		258,300		25,062,849
MGM China Holdings Ltd. (Macau)		114,800		491,329
Oriental Land Co. Ltd. (Japan)		500		72,107
SJM Holdings Ltd. (Hong Kong)		20,000		67,229
TUI Travel PLC (United Kingdom)		75,224		515,619
Wyndham Worldwide Corp.		101,700		7,494,273

				39,629,017

Household Durables — 0.4%
Iida Group Holdings Co. Ltd. (Japan)*		1,500		29,940
Panasonic Corp. (Japan)		91,800		1,070,132
Persimmon PLC (United Kingdom)		29,201		600,352
Sekisui Chemical Co. Ltd. (Japan)		42,000		515,404
Whirlpool Corp.		93,700		14,697,782

				16,913,610

Household Products — 1.4%
Colgate-Palmolive Co.		177,400		11,568,254
Kimberly-Clark Corp.		18,000		1,880,280
Procter & Gamble Co. (The)		460,905		37,522,276
Reckitt Benckiser Group PLC (United Kingdom)		7,066		561,297
Svenska Cellulosa AB (Sweden) (Class B Stock)		15,224		469,019

				52,001,126

Independent Power Producers & Energy Traders — 0.3%
AES Corp.		663,000		9,620,130
Electric Power Development Co. Ltd. (Japan)		1,200		34,988

				9,655,118

Industrial Conglomerates — 1.3%
3M Co.		114,200		16,016,550
General Electric Co.		1,088,000		30,496,640
Hutchison Whampoa Ltd. (Hong Kong)		75,000		1,021,932
Koninklijke Philips NV (Netherlands)		2,292		84,395
Siemens AG (Germany)		1,997		273,827

				47,893,344

Insurance — 1.8%
Aegon NV (Netherlands)		36,913		349,808

SEE NOTES TO FINANCIAL STATEMENTS.

A68


COMMON STOCKS (continued)	Shares		Value (Note 2)
Insurance (continued)
Ageas (Belgium)		10,422	$	444,433
Allianz SE (Germany)		4,730		851,052
Allstate Corp. (The)		19,400		1,058,076
American Financial Group, Inc.		55,300		3,191,916
American International Group, Inc.		200,500		10,235,525
Aspen Insurance Holdings Ltd.		25,100		1,036,881
AXA SA (France)		39,231		1,092,494
Axis Capital Holdings Ltd. (Bermuda)		49,200		2,340,444
Baloise Holding AG (Switzerland)		1,350		172,144
Chubb Corp. (The)		61,300		5,923,419
Everest Re Group Ltd.		16,500		2,571,855
Hannover Rueckversicherung AG (Germany)		8,590		738,492
Insurance Australia Group Ltd. (Australia)		22,622		117,784
Legal & General Group PLC (United Kingdom)		258,272		954,697
MetLife, Inc.		22,700		1,223,984
Muenchener Rueckversicherungs AG (Germany)		4,879		1,076,165
PartnerRe Ltd.		114,300		12,050,649
ProAssurance Corp.		13,400		649,632
Prudential PLC (United Kingdom)		32,159		718,565
Reinsurance Group of America, Inc.		17,700		1,370,157
Sampo OYJ (Finland) (Class A Stock)		9,661		474,865
Swiss Re AG (Switzerland)		11,132		1,026,242
Travelers Cos., Inc. (The)		169,600		15,355,584
Tryg A/S (Denmark)		1,496		144,663
XL Group PLC (Ireland)		32,500		1,034,800
Zurich Insurance Group AG (Switzerland)		378		109,644

				66,313,970

Internet & Catalog Retail — 0.5%
Amazon.com, Inc.*		18,500		7,377,615
Expedia, Inc.		118,400		8,247,744
HSN, Inc.		54,400		3,389,120
Overstock.com Inc*(a)		23,800		732,802

				19,747,281

Internet Software & Services — 1.6%
Akamai Technologies, Inc.*(a)		22,600		1,066,268
Facebook, Inc. (Class A Stock)*		101,900		5,569,854
Google, Inc. (Class A Stock)*		48,500		54,354,435
United Internet AG (Germany)		15,308		652,583

				61,643,140

IT Services — 1.9%
Accenture PLC (Ireland) (Class A Stock)		107,700		8,855,094
Amadeus IT Holding SA (Spain) (Class A Stock)		7,243		310,257
Amdocs Ltd.		8,100		334,044
Broadridge Financial Solutions, Inc.		14,400		569,088
Cap Gemini SA (France)		11,987		811,348
Cognizant Technology Solutions Corp. (Class A Stock)*		98,900		9,986,922
CoreLogic, Inc.*		102,900		3,656,037


COMMON STOCKS (continued)	Shares		Value (Note 2)
IT Services (continued)
DST Systems, Inc.		52,900	$	4,800,146
Fiserv, Inc.*		100,800		5,952,240
iGATE Corp.*		58,000		2,329,280
International Business Machines Corp.		99,800		18,719,486
MasterCard, Inc. (Class A Stock)		6,900		5,764,674
NeuStar, Inc.*		4,600		229,356
Otsuka Corp. (Japan)		200		25,551
Syntel, Inc.*		22,700		2,064,565
Total System Services, Inc.		120,300		4,003,584
Visa, Inc. (Class A Stock)(a)		11,200		2,494,016

				70,905,688

Leisure Equipment & Products — 0.2%
Namco Bandai Holdings, Inc. (Japan)		1,800		39,964
Polaris Industries, Inc.(a)		53,300		7,762,612
Smith & Wesson Holding Corp.*(a)		50,900		686,641

				8,489,217

Life Sciences Tools & Services
PerkinElmer, Inc.		13,600		560,728
Techne Corp.		3,100		293,477

				854,205

Machinery — 1.1%
Atlas Copco AB (Sweden) (Class B Stock)		4,073		103,541
Deere & Co.		102,800		9,388,724
Dover Corp.		75,500		7,288,770
GEA Group AG (Germany)		3,065		146,157
Hino Motors Ltd. (Japan)		47,000		740,379
Illinois Tool Works, Inc.		57,000		4,792,560
Kone OYJ (Finland) (Class B Stock)		2,717		122,533
Kubota Corp. (Japan)		11,000		182,460
Lincoln Electric Holdings, Inc.		27,600		1,968,984
Mitsubishi Heavy Industries Ltd. (Japan)		31,000		192,001
Mueller Industries, Inc.		9,800		617,498
Oshkosh Corp.		184,700		9,305,186
SMC Corp. (Japan)		400		100,955
Valmont Industries, Inc. (Class B Stock)		26,400		3,936,768
WABCO Holdings, Inc.*		22,100		2,064,361
Yangzijiang Shipbuilding Holdings Ltd. (Singapore)		718,000		675,762

				41,626,639

Marine — 0.1%
A.P. Moeller-Maersk A/S (Denmark) (Class A Stock)		6		61,806
A.P. Moeller-Maersk A/S (Denmark) (Class B Stock)		69		746,715
Matson, Inc.		43,400		1,133,174
Nippon Yusen K.K. (Japan)		10,000		31,974

				1,973,669

Media — 1.9%
AMC Networks, Inc. (Class A Stock)*		14,600		994,406
CBS Corp. (Class B Stock)		103,400		6,590,716

SEE NOTES TO FINANCIAL STATEMENTS.

A69


COMMON STOCKS (continued)	Shares		Value (Note 2)
Media (continued)
Cinemark Holdings, Inc.		17,100	$	569,943
Comcast Corp. (Class A Stock)		643,373		33,432,878
Dentsu, Inc. (Japan)		2,300		94,067
DIRECTV*		103,600		7,157,724
ITV PLC (United Kingdom)		259,625		835,515
JCDecaux SA (France)		17,875		737,940
ProSiebenSat.1 Media AG (Germany) (Germany)		15,213		755,418
REA Group Ltd.		9,730		328,655
RTL Group SA (Germany)		397		51,385
Scripps Networks Interactive, Inc. (Class A Stock)		47,800		4,130,398
Twenty-First Century Fox, Inc. (Class A Stock)		94,500		3,324,510
Viacom, Inc. (Class B Stock)		65,700		5,738,238
Walt Disney Co. (The)		102,400		7,823,360

				72,565,153

Metals & Mining — 1.0%
Anglo American PLC (United Kingdom)		45,619		998,391
BHP Billiton Ltd. (Australia)		33,444		1,140,201
BHP Billiton PLC (United Kingdom)		44,156		1,370,164
Cliffs Natural Resources, Inc.(a)		10,600		277,826
Fortescue Metals Group Ltd. (Australia)		147,704		771,578
Freeport-McMoRan Copper & Gold, Inc.		512,900		19,356,846
JFE Holdings, Inc. (Japan)		5,000		119,150
Kobe Steel Ltd. (Japan)*		25,000		42,860
Mitsubishi Materials Corp. (Japan)		51,000		188,519
Newmont Mining Corp.		321,900		7,413,357
Nippon Steel & Sumitomo Metal Corp. (Japan)		77,000		258,243
Rio Tinto PLC (United Kingdom)		350		19,778
Southern Copper Corp. (British Virgin Islands)		166,900		4,791,699
Sumitomo Metal Mining Co. Ltd. (Japan)		37,000		484,822
Voestalpine AG (Austria)		15,244		732,543

				37,965,977

Multi-Utilities — 0.4%
Centrica PLC (United Kingdom)		62,579		360,871
E.ON AG (Germany)		54,767		1,012,531
GDF Suez (France)		18,553		436,358
National Grid PLC (United Kingdom)		91,396		1,195,393
PG&E Corp.		161,600		6,509,248
SCANA Corp.		82,900		3,890,497

				13,404,898

Multiline Retail — 1.0%
Dillard’s, Inc. (Class A Stock)		62,400		6,065,904
Dollar General Corp.*		173,900		10,489,648
Macy’s, Inc.		316,200		16,885,080
Next PLC (United Kingdom)		6,447		582,757
Takashimaya Co. Ltd. (Japan)		3,000		29,933
Target Corp.		44,300		2,802,861

				36,856,183


COMMON STOCKS (continued)	Shares		Value (Note 2)
Office Electronics
Konica Minolta Holdings, Inc. (Japan)		12,500	$	124,916
Ricoh Co. Ltd. (Japan)		33,000		350,949

				475,865

Oil, Gas & Consumable Fuels — 6.4%
Anadarko Petroleum Corp.		228,500		18,124,620
Apache Corp.		112,700		9,685,438
BG Group PLC (United Kingdom)		1,621		34,881
BP PLC (United Kingdom)		289,331		2,344,783
Chevron Corp.		359,756		44,937,122
ConocoPhillips		328,434		23,203,862
Delek Group Ltd. (Israel)		311		118,798
Devon Energy Corp.		162,500		10,053,875
ENI SpA (Italy)		22,763		550,040
EOG Resources, Inc.		47,300		7,938,832
Exxon Mobil Corp.		607,516		61,480,619
Idemitsu Kosan Co. Ltd. (Japan)		800		18,213
Kinder Morgan, Inc.		470,800		16,948,800
Marathon Oil Corp.		255,200		9,008,560
Marathon Petroleum Corp.		91,500		8,393,295
OMV AG (Austria)		15,102		722,793
Phillips 66		256,100		19,752,993
Repsol SA (Spain)		9,167		231,313
Royal Dutch Shell PLC (Netherlands) (Class A Stock)		18,928		678,350
Royal Dutch Shell PLC (Netherlands) (Class B Stock)		45,316		1,709,336
Showa Shell Sekiyu KK (Japan)		61,400		624,124
Total SA (France)		32,891		2,018,840
Woodside Petroleum Ltd. (Australia)		6,835		238,052

				238,817,539

Paper & Forest Products — 0.1%
Clearwater Paper Corp.*		19,700		1,034,250
OJI Holdings Corp. (Japan)		8,000		41,035
Schweitzer-Mauduit International, Inc.		15,400		792,638

				1,867,923

Personal Products — 0.2%
Avon Products, Inc.		250,300		4,310,166
Medifast, Inc.*		9,400		245,622
Nu Skin Enterprises, Inc. (Class A Stock)		13,800		1,907,436

				6,463,224

Pharmaceuticals — 5.2%
AbbVie, Inc.		16,500		871,365
Allergan, Inc.		172,800		19,194,624
AstraZeneca PLC (United Kingdom)		7,252		430,241
Bayer AG (Germany)		2,481		348,360
Eli Lilly & Co.		383,200		19,543,200
Express Scripts Holding Co.*		307,400		21,591,776
Forest Laboratories, Inc.*		142,200		8,536,266
GlaxoSmithKline PLC (United Kingdom)		67,970		1,815,997
Jazz Pharmaceuticals PLC*		31,800		4,024,608
Johnson & Johnson		561,098		51,390,966

SEE NOTES TO FINANCIAL STATEMENTS.

A70


COMMON STOCKS (continued)	Shares		Value (Note 2)
Pharmaceuticals (continued)
Merck & Co., Inc.		416,800	$	20,860,840
Merck KGaA (Germany)		4,541		814,785
Novartis AG (Switzerland)		25,469		2,041,325
Novo Nordisk A/S (Denmark) (Class B Stock)		1,467		268,904
Otsuka Holdings Co. Ltd. (Japan)		28,100		811,357
Pfizer, Inc.		1,163,597		35,640,976
Roche Holding AG (Switzerland)		9,623		2,695,655
Sanofi (France)		8,009		855,324
Shionogi & Co. Ltd. (Japan)		15,200		329,987
Shire PLC (United Kingdom)		13,635		642,583
Taisho Pharmaceutical Holdings Co. Ltd. (Japan)		300		20,622
Teva Pharmaceutical Industries Ltd. (Israel)		18,357		734,489
Zoetis, Inc.		9,300		304,017

				193,768,267

Professional Services
Adecco SA (Switzerland)		3,998		317,388
Capita PLC (United Kingdom)		33,038		568,693
Randstad Holding NV (Netherlands)		3,093		200,715

				1,086,796

Real Estate Investment Trusts — 1.0%
American Capital Agency Corp.		158,800		3,063,252
American Capital Mortgage Investment Corp.		69,200		1,208,232
Annaly Capital Management, Inc.		966,000		9,631,020
CapitaCommercial Trust (Singapore)		347,000		399,620
CapitaMall Trust (Singapore)		25,000		37,833
Dexus Property Group (Australia)		236,762		212,939
Franklin Street Properties Corp.		75,100		897,445
Hospitality Properties Trust		16,000		432,480
Japan Retail Fund Investment Corp. (Japan)		24		48,833
Link REIT (The) (Hong Kong)		158,000		766,309
Resource Capital Corp.		126,900		752,517
RLJ Lodging Trust		139,700		3,397,504
Simon Property Group, Inc.		36,800		5,599,488
Starwood Property Trust, Inc.		54,600		1,512,420
Unibail-Rodamco SE (France)		3,580		917,412
Ventas, Inc.		117,800		6,747,584
Westfield Retail Trust (Australia)		30,952		82,228

				35,707,116

Real Estate Management & Development — 0.5%
CBRE Group, Inc. (Class A Stock)*		544,700		14,325,610
Daiwa House Industry Co. Ltd. (Japan)		6,000		116,251
Henderson Land Development Co. Ltd. (Hong Kong)		8,000		45,736
Hulic Co. Ltd. (Japan)		800		11,839
Hysan Development Co. Ltd. (Hong Kong)		153,000		660,462
Jones Lang LaSalle, Inc.		48,500		4,965,915
Keppel Land Ltd. (Singapore)		7,000		18,581
Swire Pacific Ltd. (Hong Kong) (Class A Stock)		4,000		46,999


COMMON STOCKS (continued)	Shares		Value (Note 2)
Real Estate Management & Development (continued)
Swiss Prime Site AG (Switzerland)		4,182	$	323,849
Wheelock & Co. Ltd. (Hong Kong)		13,000		59,889

				20,575,131

Road & Rail — 1.1%
ComfortDelGro Corp. Ltd. (Singapore)		21,000		33,579
CSX Corp.		404,200		11,628,834
East Japan Railway Co. (Japan)		3,400		270,837
Nippon Express Co. Ltd. (Japan)		5,000		24,203
Norfolk Southern Corp.		51,700		4,799,311
Union Pacific Corp.		147,000		24,696,000
West Japan Railway Co. (Japan)		3,700		160,315

				41,613,079

Semiconductors & Semiconductor Equipment — 0.9%
Cabot Microelectronics Corp.*		11,900		543,830
Infineon Technologies AG (Germany)		3,769		40,259
Intel Corp.		846,900		21,985,524
Intersil Corp.		89,600		1,027,712
LSI Corp.		801,000		8,827,020
Rohm Co. Ltd. (Japan)		1,000		48,777
Skyworks Solutions, Inc.*		98,600		2,816,016

				35,289,138

Software — 2.9%
ANSYS, Inc.*		22,200		1,935,840
CA, Inc.		81,700		2,749,205
Citrix Systems, Inc.*(a)		112,500		7,115,625
Genpact Ltd. (Bermuda)		83,900		1,541,243
Manhattan Associates, Inc.*		12,000		1,409,760
Microsoft Corp.		919,600		34,420,628
Oracle Corp.		949,800		36,339,348
Red Hat, Inc.*		28,500		1,597,140
SAP AG (Germany)		342		29,659
Symantec Corp.		478,900		11,292,462
Trend Micro, Inc. (Japan)		1,100		38,547
VMware, Inc. (Class A Stock)*(a)		108,600		9,742,506

				108,211,963

Specialty Retail — 1.8%
ABC-Mart, Inc. (Japan)		200		8,738
Express, Inc.*		34,700		647,849
GameStop Corp. (Class A Stock)		125,500		6,182,130
Gap, Inc. (The)		319,800		12,497,784
Hennes & Mauritz AB (Sweden) (Class B Stock)		6,041		278,227
Home Depot, Inc. (The)		236,450		19,469,293
Lowe’s Cos., Inc.		106,100		5,257,255
PetSmart, Inc.(a)		14,100		1,025,775
Ross Stores, Inc.		122,100		9,148,953
TJX Cos., Inc. (The)		203,100		12,943,563

				67,459,567

Textiles, Apparel & Luxury Goods — 0.6%
Asics Corp. (Japan)		2,200		37,603
Christian Dior SA (France)		3,231		611,569
Cie Financiere Richemont SA (Switzerland)		1,265		126,370

SEE NOTES TO FINANCIAL STATEMENTS.

A71


COMMON STOCKS (continued)	Shares		Value (Note 2)
Textiles, Apparel & Luxury Goods (continued)
Michael Kors Holdings Ltd. (Hong Kong)*		114,700	$	9,312,493
NIKE, Inc. (Class B Stock)		135,200		10,632,128
Swatch Group AG (The) (Switzerland)		438		49,373
Yue Yuen Industrial Holdings Ltd. (Bermuda)		7,500		25,078

				20,794,614

Tobacco — 0.6%
Altria Group, Inc.		301,800		11,586,102
British American Tobacco (United Kingdom)		15,216		816,709
Japan Tobacco, Inc. (Japan)		29,900		972,909
Philip Morris International, Inc.		103,500		9,017,955

				22,393,675

Trading Companies & Distributors — 0.3%
ITOCHU Corp. (Japan)		13,700		169,368
Marubeni Corp. (Japan)		41,000		295,162
Mitsubishi Corp. (Japan)		48,600		933,019
Mitsui & Co. Ltd. (Japan)		17,600		245,364
MRC Global, Inc.*		89,600		2,890,496
Sojitz Corp. (Japan)		354,800		631,693
Travis Perkins PLC (United Kingdom)		19,684		611,467
W.W. Grainger, Inc.		29,300		7,483,806

				13,260,375

Transportation Infrastructure
Abertis Infraestructuras SA (Spain)		14,496		322,434
Atlantia SpA (Italy)		34,421		771,028
Auckland International Airport Ltd. (New Zealand)		10,889		31,624


COMMON STOCKS (continued)	Shares		Value (Note 2)
Transportation Infrastructure (continued)
Sydney Airport (Australia)		12,602	$	42,830

				1,167,916

Water Utilities — 0.1%
American Water Works Co., Inc.		78,500		3,317,410

Wireless Telecommunication Services — 0.1%
KDDI Corp. (Japan)		15,500		955,037
Millicom International Cellular SA, (Luxembourg) SDR		681		67,859
NTT DOCOMO, Inc. (Japan)		15,700		258,521
Softbank Corp. (Japan)		2,000		175,502
Vodafone Group PLC (United Kingdom)		281,877		1,109,810

				2,566,729

TOTAL COMMON STOCKS (cost $1,937,865,727)				2,639,657,785

EXCHANGE TRADED FUND — 0.1%
iShares MSCI EAFE Index Fund (cost $1,861,747)		30,800		2,065,448

PREFERRED STOCKS
Automobiles
Bayerische Motoren Werke AG (Germany)		548		46,861
Volkswagen AG (Germany)		372		104,688

				151,549

Banking
Citigroup Capital XIII, 7.875%, (Capital Security, fixed to floating preferred)(b)		22,000		599,500

TOTAL PREFERRED STOCKS (cost $682,706)				751,049


ASSET-BACKED SECURITIES — 1.5%	Interest Rate			Maturity Date	Principal Amount (000)#
Collateralized Loan Obligations — 1.3%
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class A, 144A		1.422%	(b)	04/20/25		2,550	2,507,139
ACAS CLO Ltd. (Cayman Islands), Series 2013-1A, Class B2, 144A		3.360%		04/20/25		500	490,299
American Express Credit Account Master Trust, Series 2012-4, Class C, 144A		0.967%	(b)	05/15/20		3,900	3,909,731
Anchorage Capital CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.466%	(b)	07/13/25		2,700	2,654,166
Ares Enhanced Loan Investment Strategy Ltd. (Cayman Islands), Series 2005-2A, Class A2, 144A		0.498%	(b)	01/26/20		729	721,306
Benefit Street Partners CLO Ltd. (Cayman Islands), Series 2013-IIA, Class A1, 144A		1.472%	(b)	07/15/24		1,200	1,174,525
Brookside Mill CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.394%	(b)	04/17/25		2,100	2,052,431
Carlyle Daytona CLO Ltd. (Cayman Islands), Series 2007-1A, Class A1L, 144A		0.488%	(b)	04/27/21		3,410	3,352,352
Cent CDO XI Ltd. (Cayman Islands), Series 2006-11A, Class A1, 144A		0.498%	(b)	04/25/19		502	496,226
Chatham Light CLO Ltd. (Cayman Islands), Series 2005-2A, Class A1, 144A		0.492%	(b)	08/03/19		189	187,326
Citibank Credit Card Issuance Trust, Series 2005-C2, Class C2		0.634%	(b)	03/24/17		2,200	2,195,915

SEE NOTES TO FINANCIAL STATEMENTS.

A72


ASSET-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Collateralized Loan Obligations (continued)
Flagship CLO (Cayman Islands), Series 2013-7A, Class A1, 144A		1.715%		01/20/26		2,300	$	2,290,800
Four Corners CLO Ltd. (Cayman Islands), Series 2006-3A, Class A, 144A		0.491%	(b)	07/22/20		592		585,413
Fraser Sullivan CLO Ltd. (Cayman Islands), Series 2006-1A, Class B, 144A		0.713%	(b)	03/15/20		1,000		972,313
GE Capital Credit Card Master Note Trust, Series 2012-4, Class B		1.017%	(b)	06/15/18		5,500		5,480,558
ING Investment Management CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.384%	(b)	04/15/24		1,850		1,815,517
Lafayette CLO Ltd. (Cayman Islands), Series 2012-1A, Class A, 144A		1.642%	(b)	09/06/22		287		286,783
LCM CLO LP (Cayman Islands), Series 2005-3A, Class A, 144A		0.499%	(b)	06/01/17		144		143,440
LightPoint CLO Ltd., Series 2005-3A, Class A1A, 144A		0.503%	(b)	09/15/17		409		405,249
Marine Park CLO Ltd. (Cayman Islands), Series 2012-1A, Class A1A, 144A		1.708%	(b)	05/18/23		1,350		1,345,078
Mayport CLO Ltd. (Cayman Islands), Series 2006-1A, Class A1L, 144A		0.488%	(b)	02/22/20		202		199,606
Mountain Capital CLO IV Ltd. (Cayman Islands), Series 2005-4A, Class A1L, 144A		0.493%	(b)	03/15/18		87		86,226
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class A2, 144A		1.718%	(b)	11/22/23		1,200		1,196,917
OCP CLO Ltd. (Cayman Islands), Series 2012-2A, Class B, 144A		2.438%	(b)	11/22/23		1,200		1,177,913
OHA Intrepid Leveraged Loan Fund CLO Ltd. (Cayman Islands), Series 2011-1AR, Class AR, 144A		1.162%	(b)	04/20/21		1,816		1,803,515
OZLM Funding IV Ltd. (Cayman Islands), Series 2013-4A, Class A1, 144A		1.467%	(b)	07/22/25		1,200		1,177,323
Sheridan Square CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.294%	(b)	04/15/25		3,200		3,127,673
Slater Mill Loan Fund LP (Cayman Islands), Series 2012-1A, Class B, 144A		2.888%	(b)	08/17/22		500		494,836
Sound Point CLO Ltd. (Cayman Islands), Series 2012-1A, Class B, 144A		2.942%	(b)	10/20/23		1,100		1,106,528
SVO VOI Mortgage Corp., Series 2012-AA, Class A, 144A		2.000%		09/20/29		1,562		1,557,093
Trimaran CLO VI Ltd. (Cayman Islands), Series 2006-2A, Class A1L, 144A		0.492%	(b)	11/01/18		1,095		1,083,084
Tyron Park CLO Ltd. (Cayman Islands), Series 2013-1A, Class A1, 144A		1.393%	(b)	07/15/25		2,700		2,645,448

								48,722,729

Residential Mortgage-Backed Securities — 0.2%
CDC Mortgage Capital Trust, Series 2002-HE3, Class M1		1.815%	(b)	03/25/33		296		276,966
Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB6, Class A3		4.465%	(b)	07/25/35		302		289,731
Equity One Mortgage Pass-Through Trust, Series 2004-3, Class M1		5.121%	(b)	07/25/34		390		371,003
GSAMP Trust, Series 2004-HE2, Class A3C		0.745%	(b)	09/25/34		674		653,387
Long Beach Mortgage Loan Trust, Series 2004-2, Class M1		0.695%	(b)	06/25/34		774		727,219
Morgan Stanley ABS Capital I, Inc. Trust, Series 2003-HE1, Class M1		1.365%	(b)	05/25/33		474		441,209
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-HE5, Class M1		1.110%	(b)	06/25/34		989		920,127
Morgan Stanley ABS Capital I, Inc. Trust, Series 2004-NC1, Class M1		1.215%	(b)	12/27/33		869		835,059
Morgan Stanley Dean Witter Capital I, Series 2002-HE1, Class M1		1.065%	(b)	07/25/32		460		419,805
Morgan Stanley Dean Witter Capital I, Series 2002-NC4, Class M1		1.440%	(b)	09/25/32		539		499,515
Securitized Asset-Backed Receivables LLC Trust, Series 2004-OP1, Class M1		0.930%	(b)	02/25/34		887		813,685

								6,247,706

TOTAL ASSET-BACKED SECURITIES (cost $54,801,126)								54,970,435

BANK LOANS(b) — 0.2%
Automotive
Schaeffler AG (Germany)		4.250%		01/27/17		750		755,625

Cable
Virgin Media Investment Holdings Ltd. (United Kingdom)		3.500%		06/08/20		1,000		1,001,250

SEE NOTES TO FINANCIAL STATEMENTS.

A73


BANK LOANS(b) (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Foods
ARAMARK Corp.		4.000%		08/22/19		1,100	$	1,104,584
Del Monte Foods Co.		4.000%		03/08/18		1,065		1,066,129

								2,170,713

Healthcare & Pharmaceutical — 0.1%
CHS/Community Health Systems, Inc.		2.987%		10/25/16		440		440,205
HCA, Inc.		2.919%		03/31/17		884		883,797
HCA, Inc.		2.997%		05/01/18		369		368,583
RPI Finance Trust		3.250%		11/09/18		1,058		1,057,504

								2,750,089

Technology — 0.1%
First Data Corp.		4.164%		03/24/17		162		162,109
First Data Corp.		4.164%		03/26/18		2,134		2,135,030
Sensata Technologies BV (Netherlands)		3.250%		05/12/19		150		150,599

								2,447,738

TOTAL BANK LOANS (cost $9,041,951)								9,125,415

COLLATERALIZED MORTGAGE OBLIGATIONS — 0.1%
Banc of America Alternative Loan Trust, Series 2005-12, Class 3CB1		6.000%		01/25/36		2,238		1,743,887
Banc of America Mortgage Trust, Series 2005-A, Class 2A1		2.944%	(b)	02/25/35		445		441,148
Banc of America Mortgage Trust, Series 2005-B, Class 2A1		2.843%	(b)	03/25/35		383		353,245
Chase Mortgage Finance Trust Series, Series 2007-A1, Class 1A5		2.722%	(b)	02/25/37		1,029		1,020,614
Countrywide Alternative Loan Trust, Series 2004-18CB, Class 3A1		5.250%		09/25/19		374		380,971
JPMorgan Mortgage Trust, Series 2007-A1, Class 4A1		2.737%	(b)	07/25/35		604		600,176
MASTR Alternative Loan Trust, Series 2004-4, Class 4A1		5.000%		04/25/19		125		128,042
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-1, Class 4A3		2.906%	(b)	02/25/34		456		456,243
Washington Mutual Mortgage Pass-Through Certificates, Series 2005-1, Class 3A		5.000%		03/25/20		175		177,982

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (cost $5,632,433)								5,302,308

COMMERCIAL MORTGAGE-BACKED SECURITIES — 3.2%
Banc of America Commercial Mortgage Trust, Series 2006-6, Class A3		5.369%		10/10/45		3,900		3,985,203
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A1A		5.572%	(b)	04/10/49		6,839		7,438,902
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A3		5.596%	(b)	04/10/49		1,500		1,534,082
Banc of America Commercial Mortgage Trust, Series 2007-3, Class A2		5.649%	(b)	06/10/49		328		327,617
Banc of America Commercial Mortgage Trust, Series 2007-5, Class A3		5.620%		02/10/51		1,877		1,884,048
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class A4		5.705%	(b)	12/10/49		1,000		1,118,384
Citigroup Commercial Mortgage Trust, Series 2013-GC11, Class A3		2.815%		04/10/46		1,100		1,020,953
Commercial Mortgage Pass Through Certificates, Series 2012-CR3, Class A2		1.765%		10/15/45		3,100		3,073,191
Commercial Mortgage Pass-Through Certificates, Series 2012-CR5, Class A3		2.540%		12/10/45		1,000		916,381
Commercial Mortgage Pass-Through Certificates, Series 2013-CR12, Class A3		3.765%		10/10/46		1,300		1,279,658
Commercial Mortgage Pass-Through Certificates, Series 2013-CR7, Class A3		2.929%		03/10/46		1,700		1,595,287
Commercial Mortgage Pass-Through Certificates, Series 2013-CR9, Class A3		4.022%		07/10/45		1,400		1,419,197
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class A4		5.465%	(b)	02/15/39		2,700		2,908,983
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class AM		5.465%	(b)	02/15/39		640		683,867
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C2, Class A4		4.832%		04/15/37		1,900		1,971,425
CW Capital Cobalt Ltd., Series 2006-C1, Class A4		5.223%		08/15/48		1,230		1,327,160
FHLMC Multifamily Structured Pass-Through Certificates, Series K017, Class A2		2.873%		12/25/21		3,500		3,423,315

SEE NOTES TO FINANCIAL STATEMENTS.

A74


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class A2		2.373%		05/25/22		2,000	$	1,865,982
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class X1, I/O		1.473%	(b)	05/25/22		25,719		2,418,681
FHLMC Multifamily Structured Pass-Through Certificates, Series K021, Class X1, I/O		1.512%	(b)	06/25/22		7,259		712,541
FHLMC Multifamily Structured Pass-Through Certificates, Series K029, Class A2		3.320%		02/25/23		5,800		5,736,484
FHLMC Multifamily Structured Pass-Through Certificates, Series K034, Class A2		3.531%		07/25/23		2,400		2,400,250
FHLMC Multifamily Structured Pass-Through Certificates, Series K501, Class X1A, I/O		1.751%	(b)	08/25/16		7,510		234,173
FHLMC Multifamily Structured Pass-Through Certificates, Series K710, Class X1, I/O		1.783%	(b)	05/25/19		19,872		1,599,287
FHLMC Multifamily Structured Pass-Through Certificates, Series K711, Class X1, I/O		1.710%	(b)	07/25/19		20,921		1,644,884
GE Capital Commercial Mortgage Corp., Series 2005-C4, Class A4		5.310%	(b)	11/10/45		2,585		2,747,312
GE Capital Commercial Mortgage Corp., Series 2006-C1, Class A4		5.280%	(b)	03/10/44		2,060		2,206,301
Greenwich Capital Commercial Funding Corp., Series 2005-GG3, Class A3		4.569%		08/10/42		131		131,099
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A5		5.224%	(b)	04/10/37		8,050		8,489,353
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A2		5.381%		03/10/39		2,044		2,089,942
GS Mortgage Securities Trust, Series 2006-GG6, Class AAB		5.587%		04/10/38		3,076		3,148,109
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A3A		5.863%	(b)	04/15/45		38		37,736
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP1, Class ASB		4.853%		03/15/46		571		577,494
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class A3		4.697%		07/15/42		187		189,750
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class AM		4.780%		07/15/42		1,000		1,045,511
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class ASB		4.659%		07/15/42		1,206		1,224,185
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP4, Class AM		4.999%	(b)	10/15/42		1,270		1,345,070
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class ASB		5.523%		05/12/45		2,074		2,159,530
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-CBX, Class A3		3.139%		06/15/45		2,100		2,116,086
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2012-LC9, Class A4		2.611%		12/15/47		1,700		1,560,751
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class A4		2.875%		12/15/47		3,900		3,640,202
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C16, Class A2		3.070%		12/15/46		2,700		2,772,495
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-LC11, Class A4		2.694%		04/15/46		1,400		1,281,571
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class AM		5.263%	(b)	11/15/40		1,510		1,618,471
Merrill Lynch Mortgage Trust, Series 2006-C1, Class AM		5.676%	(b)	05/12/39		930		1,002,479
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-1, Class AM		5.518%	(b)	02/12/39		530		573,344
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4		5.886%	(b)	06/12/46		1,795		1,960,650
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-6, Class A2		5.331%		03/12/51		2,213		2,216,489
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C8, Class A3		2.863%		12/15/48		1,500		1,404,818

SEE NOTES TO FINANCIAL STATEMENTS.

A75


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Morgan Stanley Capital I Trust, Series 2006-IQ11, Class A4		5.668%	(b)	10/15/42		2,265	$	2,428,827
Morgan Stanley Capital I Trust, Series 2007-HQ11, Class A31		5.439%		02/12/44		649		655,542
Morgan Stanley Capital I Trust, Series 2007-HQ11, Class AAB		5.444%		02/12/44		2,839		2,916,339
Morgan Stanley Capital I Trust, Series 2007-T27, Class AAB		5.648%	(b)	06/11/42		379		385,974
UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A4		2.792%		12/10/45		1,700		1,584,664
UBS-Barclays Commercial Mortgage Trust, Series 2013-C5, Class A3		2.920%		03/10/46		3,900		3,654,542
UBS-Barclays Commercial Mortgage Trust, Series 2013-C6, Class A3		2.971%		04/10/46		1,800		1,690,508
Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A4		5.724%	(b)	05/15/43		700		755,264
Wachovia Bank Commercial Mortgage Trust, Series 2007-C31, Class A4(a)		5.509%		04/15/47		4,500		4,911,462
Wachovia Bank Commercial Mortgage Trust, Series 2007-C34, Class A1A		5.608%	(b)	05/15/46		1,330		1,460,696

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $119,287,302)								118,502,501

CORPORATE BONDS — 7.0%
Aerospace & Defense
Bombardier, Inc. (Canada), Sr. Unsec’d. Notes, 144A		6.300%		05/01/14		1,075		1,091,125

Airlines — 0.1%
Continental Airlines, Inc. 1998-1 Class A Pass-Through Trust, Pass-Through Certificates		6.648%		09/15/17		153		160,346
Continental Airlines, Inc. 2010-1 Class A Pass-Through Trust, Pass-Through Certificates(a)		4.750%		01/12/21		763		810,413
Continental Airlines, Inc. 2012-2 Class A Pass-Through Trust, Pass-Through Certificates		4.000%		10/29/24		705		701,475
Continental Airlines, Inc., 2009-2 Class A Pass-Through Trust, Pass-Through Certificates, Series 2009-2		7.250%		11/10/19		653		747,228
Delta Air Lines 2007-1, Class A Pass-Through Trust, Pass-Through Certificates		6.821%		08/10/22		350		394,433
Delta Air Lines 2010-2, Class A Pass-Through Trust, Pass-Through Certificates(a)		4.950%		05/23/19		592		638,220
Delta Air Lines 2011-1, Class A Pass-Through Trust, Pass-Through Certificates		5.300%		04/15/19		1,133		1,234,653

								4,686,768

Automotive — 0.1%
Cummins, Inc., Sr. Unsec’d. Notes		4.875%		10/01/43		90		90,134
Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes		4.207%		04/15/16		2,090		2,226,974
General Motors Co., Sr. Unsec’d. Notes, 144A(a)		4.875%		10/02/23		995		1,007,438
General Motors Co., Sr. Unsec’d. Notes, 144A		6.250%		10/02/43		1,395		1,449,056
Harley-Davidson Financial Services, Inc., Gtd. Notes, 144A		2.700%		03/15/17		450		461,315
Johnson Controls, Inc., Sr. Unsec’d. Notes		5.500%		01/15/16		245		266,127

								5,501,044

Banking — 1.9%
American Express Co., Sr. Unsec’d. Notes		2.650%		12/02/22		2,213		2,052,943
Banco Santander Chile (Chile), Sr. Unsec’d. Notes, 144A		3.875%		09/20/22		645		608,345
Bank of America Corp., Jr. Sub. Notes, Series K(a)		8.000%	(b)	12/29/49		2,200		2,437,600
Bank of America Corp., Sr. Unsec’d. Notes, MTN		3.300%		01/11/23		780		738,088
Bank of America Corp., Sr. Unsec’d. Notes		4.500%		04/01/15		595		622,475
Bank of America Corp., Sr. Unsec’d. Notes, MTN		5.000%		05/13/21		630		688,447
Bank of America Corp., Sr. Unsec’d. Notes		5.700%		01/24/22		1,770		2,003,383
Bank of America Corp., Sr. Unsec’d. Notes		6.000%		09/01/17		1,075		1,227,426
Bank of America Corp., Sr. Unsec’d. Notes, Series 1		3.750%		07/12/16		870		924,912
Bank of America Corp., Sub. Notes		5.750%		08/15/16		1,775		1,957,488
Bank of America NA, Sub. Notes		5.300%		03/15/17		930		1,025,066
Bank of America NA, Sub. Notes		6.000%		10/15/36		410		470,540
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		5.300%		10/30/15		515		555,490
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		6.400%		10/02/17		330		382,985
Bear Stearns Cos. LLC, Sr. Unsec’d. Notes		7.250%		02/01/18		1,175		1,406,911
Capital One Bank USA NA, Sub. Notes(a)		3.375%		02/15/23		1,560		1,450,301
Citigroup, Inc., Sr. Unsec’d. Notes		3.875%		10/25/23		1,900		1,867,810

SEE NOTES TO FINANCIAL STATEMENTS.

A76


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Banking (continued)
Citigroup, Inc., Sr. Unsec’d. Notes		3.953%		06/15/16		1,010	$	1,074,541
Citigroup, Inc., Sr. Unsec’d. Notes(a)		4.500%		01/14/22		2,450		2,596,294
Citigroup, Inc., Sr. Unsec’d. Notes		4.750%		05/19/15		2,265		2,383,351
Citigroup, Inc., Sr. Unsec’d. Notes		6.875%		03/05/38		69		84,849
Citigroup, Inc., Sr. Unsec’d. Notes		8.125%		07/15/39		710		995,908
Citigroup, Inc., Sr. Unsec’d. Notes		8.500%		05/22/19		1,895		2,428,611
Citigroup, Inc., Sub. Notes		5.000%		09/15/14		454		466,932
Citigroup, Inc., Sub. Notes		6.125%		08/25/36		570		607,717
Discover Bank, Sub. Notes		7.000%		04/15/20		570		662,903
Discover Financial Services, Sr. Unsec’d. Notes		3.850%		11/21/22		900		853,353
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes(a)		3.625%		02/07/16		2,000		2,098,960
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		5.250%		07/27/21		2,055		2,249,900
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		5.750%		01/24/22		3,620		4,074,991
Goldman Sachs Group, Inc. (The), Sr. Unsec’d. Notes		6.250%		02/01/41		270		311,148
Goldman Sachs Group, Inc. (The), Sub. Notes		5.625%		01/15/17		1,190		1,311,306
Goldman Sachs Group, Inc. (The), Sub. Notes		6.750%		10/01/37		104		115,705
HSBC Holdings PLC (United Kingdom), Sr. Unsec’d. Notes(a)		4.875%		01/14/22		1,910		2,061,119
HSBC Holdings PLC (United Kingdom), Sr. Unsec’d. Notes(a)		5.100%		04/05/21		1,025		1,139,235
Huntington Bancshares, Inc., Sub. Notes(a)		7.000%		12/15/20		170		197,138
Intesa Sanpaolo SpA (Italy), Sr. Unsec’d. Notes		3.125%		01/15/16		1,395		1,421,591
JPMorgan Chase & Co., Jr. Sub. Notes		7.900%	(b)	04/29/49		2,000		2,205,000
JPMorgan Chase & Co., Sr. Unsec’d. Notes		4.250%		10/15/20		2,930		3,105,908
JPMorgan Chase & Co., Sub. Notes		5.625%		08/16/43		490		517,819
Lloyds Bank PLC (United Kingdom), Bank Gtd. Notes(a)		6.375%		01/21/21		1,400		1,650,873
Lloyds TSB Bank PLC (United Kingdom), Bank Gtd. Notes, MTN, 144A		5.800%		01/13/20		1,870		2,143,897
Merrill Lynch & Co., Inc., Sr. Unsec’d. Notes, MTN		6.400%		08/28/17		20		23,058
Morgan Stanley, Notes, MTN(a)		5.450%		01/09/17		1,345		1,491,606
Morgan Stanley, Notes, MTN		6.625%		04/01/18		105		122,860
Morgan Stanley, Sr. Unsec’d. Notes, MTN		5.500%		07/28/21		2,360		2,637,201
Morgan Stanley, Sr. Unsec’d. Notes, MTN		5.625%		09/23/19		1,415		1,608,411
Morgan Stanley, Sr. Unsec’d. Notes		5.750%		01/25/21		1,400		1,583,770
Morgan Stanley, Sr. Unsec’d. Notes		6.375%		07/24/42		780		913,599
MUFG Capital Finance 1 Ltd. (Japan), Gtd. Notes		6.346%	(b)	07/29/49		800		866,594
Northern Trust Corp., Sub. Notes		3.950%		10/30/25		990		964,750
People’s United Financial, Inc., Sr. Unsec’d. Notes		3.650%		12/06/22		1,455		1,375,569
PNC Bank NA, Sub. Notes		3.800%		07/25/23		270		261,856
PNC Funding Corp., Gtd. Notes		6.700%		06/10/19		440		528,517
Royal Bank of Scotland Group PLC (The) (United Kingdom), Sr. Unsec’d. Notes		2.550%		09/18/15		455		465,354
Santander Holdings USA, Inc., Sr. Unsec’d. Notes		3.000%		09/24/15		955		986,180
US Bancorp, Sub. Notes, MTN		2.950%		07/15/22		1,120		1,040,621

								72,049,205

Brokerage — 0.1%
Jefferies Group LLC, Sr. Unsec’d. Notes		6.500%		01/20/43		560		555,288
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes(c)		6.875%		02/06/12		1,715		364,438
Lehman Brothers Holdings, Inc., Sr. Unsec’d. Notes(c)		6.875%		05/02/18		700		151,375
Nomura Holdings, Inc. (Japan), Sr. Unsec’d. Notes, MTN		2.000%		09/13/16		820		826,779

								1,897,880

Building Materials & Construction — 0.1%
D.R. Horton, Inc., Gtd. Notes		3.625%		02/15/18		1,150		1,167,250
Odebrecht Finance Ltd. (Brazil), Gtd. Notes, 144A(a)		5.125%		06/26/22		700		685,125
Owens Corning, Inc., Gtd. Notes		4.200%		12/15/22		775		740,072

								2,592,447

Cable — 0.2%
Cablevision Systems Corp., Sr. Unsec’d. Notes		8.625%		09/15/17		1,000		1,165,000
Comcast Cable Communications Holdings, Inc., Gtd. Notes		9.455%		11/15/22		255		353,194
Comcast Corp., Gtd. Notes		6.400%		05/15/38		570		658,206

SEE NOTES TO FINANCIAL STATEMENTS.

A77


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#			Value (Note 2)
Cable (continued)
Comcast Corp., Gtd. Notes		6.450%		03/15/37		155		$	179,884
Comcast Corp., Gtd. Notes		6.500%		11/15/35		450			524,881
Comcast Corp., Gtd. Notes		6.950%		08/15/37		605			743,727
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.500%		03/01/16		920			965,714
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		3.550%		03/15/15		165			170,439
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Gtd. Notes		5.150%		03/15/42		860			772,368
Time Warner Cable, Inc., Gtd. Notes		5.850%		05/01/17		1,710			1,865,094
Time Warner Cable, Inc., Gtd. Notes		7.500%		04/01/14		345			350,728
Videotron Ltd. (Canada), Gtd. Notes		5.000%		07/15/22		1,040			1,016,600
			��
									8,765,835

Capital Goods — 0.3%
Actuant Corp., Gtd. Notes		5.625%		06/15/22		1,205			1,220,063
Case New Holland, Inc., Gtd. Notes(a)		7.875%		12/01/17		1,255			1,480,900
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $1,299,722; purchased 10/10/07)		6.375%		10/15/17(d)(e)		1,302			1,506,652
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $501,539; purchased 05/30/13)		6.700%		06/01/34(d)(e)		420			466,204
ERAC USA Finance LLC, Gtd. Notes, 144A (original cost $376,709; purchased 10/10/07)		7.000%		10/15/37(d)(e)		380			449,701
General Electric Co., Sr. Unsec’d. Notes(a)		4.125%		10/09/42		485			448,071
Penske Truck Leasing Co. LP/PTL Finance Corp., Sr. Unsec’d. Notes, 144A (original cost $384,850; purchased 07/10/12)		2.500%		07/11/14(d)(e)		385			388,134
Penske Truck Leasing Co. LP/PTL Finance Corp., Sr. Unsec’d. Notes, 144A (original cost $1,887,203; purchased 09/24/12)		2.500%		03/15/16(d)(e)		1,890			1,936,337
Penske Truck Leasing Co. LP/PTL Finance Corp., Unsec’d. Notes, 144A (original cost $499,515; purchased 05/08/12)		3.125%		05/11/15(d)(e)		500			514,240
United Technologies Corp., Sr. Unsec’d. Notes		4.500%		06/01/42		1,445			1,403,221
Xylem, Inc., Sr. Unsec’d. Notes		4.875%		10/01/21		1,260			1,313,473

									11,126,996

Chemicals — 0.1%
Agrium, Inc. (Canada), Sr. Unsec’d. Notes		3.150%		10/01/22		780			714,853
Dow Chemical Co. (The), Sr. Unsec’d. Notes(a)		9.400%		05/15/39		432			645,369
LyondellBasell Industries NV, Sr. Unsec’d. Notes		5.000%		04/15/19		1,000			1,110,621
Mosaic Co. (The), Sr. Unsec’d. Notes		5.450%		11/15/33		485			494,141
Mosaic Co. (The), Sr. Unsec’d. Notes		5.625%		11/15/43		1,020			1,034,772
Rhodia SA (France), Sr. Unsec’d. Notes, 144A		6.875%		09/15/20		1,175			1,300,678
Union Carbide Corp., Sr. Unsec’d. Notes		7.500%		06/01/25		460			532,691

									5,833,125

Consumer — 0.1%
Newell Rubbermaid, Inc., Sr. Unsec’d. Notes		6.250%		04/15/18		1,700			1,925,106
							��
Electric — 0.4%
Arizona Public Service Co., Sr. Unsec’d. Notes		6.250%		08/01/16		175			196,344
Baltimore Gas & Electric Co., Sr. Unsec’d. Notes		6.350%		10/01/36		550			646,416
Calpine Corp., Sr. Sec’d. Notes, 144A		7.500%		02/15/21		871			950,479
CenterPoint Energy Houston Electric LLC, Gen. Ref. Mtge.		6.950%		03/15/33		590			757,958
Comision Federal de Electricidad (Mexico), Sr. Unsec’d. Notes, 144A		4.875%		01/15/24		645			640,163
Consolidated Edison Co. of New York, Inc., Sr. Unsec’d. Notes		5.500%		12/01/39		220			242,864
Dominion Gas Holdings LLC, Sr. Unsec’d. Notes, 144A		4.800%		11/01/43		65			62,845
Duke Energy Carolinas LLC, First Mtge. Bonds		6.050%		04/15/38		550			652,791
Duke Energy Carolinas LLC, First Ref. Mortgage(a)		4.000%		09/30/42		570			514,486
El Paso Electric Co., Sr. Unsec’d. Notes		6.000%		05/15/35		670			695,028
Empresa Nacional de Electricidad SA (Chile), Sr. Unsec’d. Notes(a)		8.625%		08/01/15		1,295			1,426,625
Energy East Corp. (Spain), Gtd. Notes		6.750%		09/15/33		145			153,218
Exelon Corp., Sr. Unsec’d. Notes		4.900%		06/15/15		155			163,417
Exelon Generation Co. LLC, Sr. Unsec’d. Notes(a)		6.250%		10/01/39		1,425			1,444,076

SEE NOTES TO FINANCIAL STATEMENTS.

A78


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Electric (continued)
Florida Power & Light Co., First Mtge. Bonds		5.950%	10/01/33		295	$	347,346
MidAmerican Energy Holdings Co., Sr. Unsec’d. Notes		5.950%	05/15/37		300		328,280
Nevada Power Co., Gen. Ref. Mtge.		6.500%	05/15/18		1,260		1,485,158
Niagara Mohawk Power Corp. (United Kingdom), Sr. Unsec’d. Notes, 144A		4.881%	08/15/19		610		674,327
NSTAR LLC, Sr. Unsec’d. Notes		4.500%	11/15/19		615		667,503
Oncor Electric Delivery Co. LLC, Sr. Sec’d. Notes		6.375%	01/15/15		345		363,977
Public Service Co. of New Mexico, Sr. Unsec’d. Notes		7.950%	05/15/18		140		166,414
Public Service Electric & Gas Co, Sr. Sec’d. Notes, MTN		5.800%	05/01/37		535		614,086
Xcel Energy, Inc., Sr. Unsec’d. Notes		4.800%	09/15/41		480		467,418
Xcel Energy, Inc., Sr. Unsec’d. Notes		5.613%	04/01/17		199		219,253

							13,880,472

Energy – Integrated
Pacific Rubiales Energy Corp. (Colombia), Gtd. Notes, 144A		5.375%	01/26/19		460		463,450
Reliance Holdings USA, Inc. (India), Gtd. Notes, 144A		5.400%	02/14/22		800		809,074

							1,272,524

Energy – Other — 0.3%
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.375%	09/15/17		1,195		1,371,942
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.450%	09/15/36		325		364,954
Anadarko Petroleum Corp., Sr. Unsec’d. Notes		6.950%	06/15/19		250		297,558
Anadarko Petroleum Corp., Sr. Unsec’d. Notes(f)		7.790%	10/10/36		2,000		714,180
Cameron International Corp., Sr. Unsec’d. Notes		4.500%	06/01/21		2,200		2,287,666
Nabors Industries, Inc., Gtd. Notes		4.625%	09/15/21		1,070		1,071,254
Phillips 66, Gtd. Notes		2.950%	05/01/17		490		509,791
Pioneer Natural Resources Co., Sr. Unsec’d. Notes		6.875%	05/01/18		1,500		1,756,367
Transocean, Inc., Gtd. Notes(a)		2.500%	10/15/17		920		929,746
Weatherford International Ltd., Gtd. Notes(a)		5.125%	09/15/20		810		870,149

							10,173,607

Foods — 0.3%
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Gtd. Notes		8.000%	11/15/39		1,285		1,851,941
Anheuser-Busch InBev Worldwide, Inc. (Belgium), Gtd. Notes		8.200%	01/15/39		250		365,640
Bunge Ltd. Finance Corp., Gtd. Notes		5.350%	04/15/14		1,040		1,053,218
Bunge Ltd. Finance Corp., Gtd. Notes		8.500%	06/15/19		985		1,210,056
Constellation Brands, Inc., Gtd. Notes		4.250%	05/01/23		1,400		1,305,500
Darling International, Inc., Gtd. Notes		8.500%	12/15/18		1,200		1,323,000
Delhaize Group SA (Belgium), Gtd. Notes		6.500%	06/15/17		480		539,084
TreeHouse Foods, Inc., Gtd. Notes		7.750%	03/01/18		1,271		1,331,373
Tyson Foods, Inc., Gtd. Notes		6.600%	04/01/16		735		820,449

							9,800,261

Healthcare & Pharmaceutical — 0.2%
Actavis PLC, Sr. Unsec’d. Notes(a)		4.625%	10/01/42		560		509,488
Actavis, Inc., Sr. Unsec’d. Notes		6.125%	08/15/19		445		512,990
Amgen, Inc., Sr. Unsec’d. Notes		5.150%	11/15/41		1,640		1,633,909
CHS/Community Health Systems, Inc., Sr. Sec’d. Notes		5.125%	08/15/18		1,100		1,135,750
Gilead Sciences, Inc., Sr. Unsec’d. Notes(a)		5.650%	12/01/41		185		205,949
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes(a)		3.750%	08/23/22		180		174,356
Laboratory Corp. of America Holdings, Sr. Unsec’d. Notes		5.625%	12/15/15		580		629,740
Merck Sharp & Dohme Corp., Gtd. Notes		5.950%	12/01/28		165		192,431
Mylan, Inc., Gtd. Notes, 144A		1.800%	06/24/16		425		433,269
Thermo Fisher Scientific, Inc., Sr. Unsec’d. Notes		4.150%	02/01/24		1,215		1,203,455
Valeant Pharmaceuticals International, Inc., Gtd. Notes, 144A		6.500%	07/15/16		498		514,185
Wyeth LLC, Gtd. Notes		6.450%	02/01/24		60		71,840
Zoetis, Inc., Sr. Unsec’d. Notes		4.700%	02/01/43		190		177,585

							7,394,947

SEE NOTES TO FINANCIAL STATEMENTS.

A79


CORPORATE BONDS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Healthcare Insurance — 0.2%
Aetna, Inc., Sr. Unsec’d. Notes		6.500%		09/15/18		1,570	$	1,849,361
Aetna, Inc., Sr. Unsec’d. Notes		6.625%		06/15/36		515		615,776
Cigna Corp., Sr. Unsec’d. Notes		5.875%		03/15/41		650		716,984
Cigna Corp., Sr. Unsec’d. Notes		6.150%		11/15/36		670		755,005
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		3.950%		10/15/42		260		220,497
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.000%		06/15/17		195		223,784
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.500%		06/15/37		420		498,280
UnitedHealth Group, Inc., Sr. Unsec’d. Notes		6.625%		11/15/37		420		508,139
WellPoint, Inc., Sr. Unsec’d. Notes		4.625%		05/15/42		390		360,443
WellPoint, Inc., Sr. Unsec’d. Notes		4.650%		01/15/43		995		921,173

								6,669,442

Insurance — 0.6%
Allied World Assurance Co. Ltd., Gtd. Notes		5.500%		11/15/20		525		567,790
Allstate Corp. (The), Sr. Unsec’d. Notes		4.500%		06/15/43		150		141,926
American International Group, Inc., Sr. Unsec’d. Notes		6.400%		12/15/20		2,425		2,866,013
American International Group, Inc., Sr. Unsec’d. Notes		8.250%		08/15/18		990		1,238,371
Aon Corp., Gtd. Notes		3.125%		05/27/16		2,655		2,768,820
Axis Specialty Finance LLC, Gtd. Notes		5.875%		06/01/20		1,030		1,129,918
Chubb Corp. (The), Jr. Sub. Notes(a)		6.375%	(b)	03/29/67		1,300		1,407,250
Hartford Financial Services Group, Inc., Sr. Unsec’d. Notes		5.125%		04/15/22		755		822,354
Liberty Mutual Group, Inc., Gtd. Notes, 144A		6.500%		05/01/42		365		400,570
Liberty Mutual Group, Inc., Sr. Unsec’d. Notes, 144A		7.000%		03/15/34		850		970,914
Lincoln National Corp., Jr. Sub. Notes		6.050%	(b)	04/20/67		260		258,050
Lincoln National Corp., Sr. Unsec’d. Notes		6.300%		10/09/37		492		565,680
Lincoln National Corp., Sr. Unsec’d. Notes		7.000%		06/15/40		705		883,275
Lincoln National Corp., Sr. Unsec’d. Notes		8.750%		07/01/19		605		778,729
Markel Corp., Sr. Unsec’d. Notes		5.000%		03/30/43		200		187,039
MetLife, Inc., Sr. Unsec’d. Notes		5.700%		06/15/35		835		911,939
MetLife, Inc., Sr. Unsec’d. Notes		6.375%		06/15/34		400		473,067
New York Life Insurance Co., Sub. Notes, 144A(a)		6.750%		11/15/39		660		805,086
Northwestern Mutual Life Insurance Co. (The), Sub. Notes, 144A		6.063%		03/30/40		370		415,699
Ohio National Financial Services, Inc., Sr. Notes, 144A		6.375%		04/30/20		680		753,961
Pacific Life Insurance Co., Sub. Notes, 144A		9.250%		06/15/39		995		1,381,767
Principal Financial Group, Inc., Gtd. Notes		4.625%		09/15/42		130		122,136
Progressive Corp. (The), Jr. Sub. Notes		6.700%	(b)	06/15/37		735		793,800
Teachers Insurance & Annuity Association of America, Sub. Notes, 144A		6.850%		12/16/39		1,450		1,789,864
Unum Group, Sr. Unsec’d. Notes		5.625%		09/15/20		350		383,651
W.R. Berkley Corp., Sr. Unsec’d. Notes		5.600%		05/15/15		555		585,860
W.R. Berkley Corp., Sr. Unsec’d. Notes		6.150%		08/15/19		460		518,248
XL Group PLC (Ireland), Sr. Unsec’d. Notes		5.250%		09/15/14		85		87,610

								24,009,387

Lodging — 0.2%
Choice Hotels International, Inc., Gtd. Notes		5.750%		07/01/22		1,000		1,043,750
Marriott International, Inc., Sr. Unsec’d. Notes		3.000%		03/01/19		580		584,063
Marriott International, Inc., Sr. Unsec’d. Notes		3.250%		09/15/22		980		913,664
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec’d. Notes		6.750%		05/15/18		2,800		3,240,756
Wyndham Worldwide Corp., Sr. Unsec’d. Notes		2.500%		03/01/18		490		488,337
Wyndham Worldwide Corp., Sr. Unsec’d. Notes		4.250%		03/01/22		1,055		1,029,650

								7,300,220

Media & Entertainment — 0.2%
Belo Corp., Gtd. Notes		8.000%		11/15/16		1,200		1,251,000
CBS Corp., Gtd. Notes (original cost $417,944; purchased 07/16/12)		4.850%		07/01/42(d)(e)		400		360,420
Historic TW, Inc., Gtd. Notes		9.150%		02/01/23		505		669,671
News America, Inc., Gtd. Notes		6.150%		03/01/37		620		681,435
News America, Inc., Gtd. Notes(a)		6.150%		02/15/41		1,315		1,465,600

SEE NOTES TO FINANCIAL STATEMENTS.

A80


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Media & Entertainment (continued)
News America, Inc., Gtd. Notes		6.900%	08/15/39		90	$	107,267
Time Warner, Inc., Gtd. Notes(a)		6.200%	03/15/40		210		231,349
Time Warner, Inc., Gtd. Notes		6.250%	03/29/41		1,465		1,626,856
Time Warner, Inc., Gtd. Notes		7.625%	04/15/31		180		227,802
Viacom, Inc., Sr. Unsec’d. Notes(a)		4.500%	02/27/42		50		42,658
Viacom, Inc., Sr. Unsec’d. Notes		5.850%	09/01/43		605		635,989

							7,300,047

Metals — 0.1%
BHP Billiton Finance USA Ltd. (Australia), Gtd. Notes		5.000%	09/30/43		920		935,402
Newmont Mining Corp., Gtd. Notes		6.250%	10/01/39		35		30,958
Peabody Energy Corp., Gtd. Notes		6.000%	11/15/18		725		772,125
Southern Copper Corp., Sr. Unsec’d. Notes		7.500%	07/27/35		425		442,879
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.050%	10/23/15		1,110		1,124,127
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.700%	10/25/17		1,220		1,233,848
Xstrata Finance Canada Ltd. (Canada), Gtd. Notes, 144A		2.850%	11/10/14		1,185		1,201,448

							5,740,787

Non-Captive Finance — 0.2%
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN(a)		5.875%	01/14/38		1,750		1,993,450
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		6.000%	08/07/19		920		1,079,447
General Electric Capital Corp., Sr. Unsec’d. Notes, MTN		6.875%	01/10/39		1,625		2,089,094
International Lease Finance Corp., Sr. Unsec’d. Notes		5.750%	05/15/16		375		401,719
SLM Corp., Sr. Unsec’d. Notes, MTN		6.250%	01/25/16		570		615,600
SLM Corp., Sr. Unsec’d. Notes, MTN		8.450%	06/15/18		240		279,600

							6,458,910

Packaging — 0.1%
Ball Corp., Gtd. Notes		4.000%	11/15/23		2,015		1,803,425
Crown Americas LLC/Crown Americas Capital Corp. IV(a)		4.500%	01/15/23		1,100		1,028,500

							2,831,925

Paper — 0.1%
Georgia-Pacific LLC, Gtd. Notes, 144A (original cost $288,298; purchased 10/27/10)		5.400%	11/01/20(d)(e)		290		324,017
International Paper Co., Sr. Unsec’d. Notes(a)		6.000%	11/15/41		1,595		1,732,100
International Paper Co., Sr. Unsec’d. Notes		7.950%	06/15/18		510		619,493
Rock-Tenn Co., Gtd. Notes		4.000%	03/01/23		440		420,240
Rock-Tenn Co., Gtd. Notes		4.900%	03/01/22		800		823,494

							3,919,344

Pipelines & Other — 0.1%
Energy Transfer Partners LP, Sr. Unsec’d. Notes		4.650%	06/01/21		675		694,333
Kinder Morgan Energy Partners LP, Sr. Unsec’d. Notes		5.950%	02/15/18		510		579,561
NiSource Finance Corp., Gtd. Notes		5.250%	09/15/17		245		270,522
NiSource Finance Corp., Gtd. Notes		5.450%	09/15/20		350		389,197
ONEOK Partners LP, Gtd. Notes		6.650%	10/01/36		145		159,569

							2,093,182

Railroads
Burlington Northern Santa Fe LLC, Sr. Unsec’d. Notes		6.700%	08/01/28		670		772,849
CSX Corp., Sr. Unsec’d. Notes		6.150%	05/01/37		715		798,345
Norfolk Southern Corp., Sr. Unsec’d. Notes		5.590%	05/17/25		100		109,280

							1,680,474

Real Estate Investment Trusts — 0.2%
Felcor Lodging LP, Sr. Sec’d. Notes		10.000%	10/01/14		385		407,138
HCP, Inc., Sr. Unsec’d. Notes		2.700%	02/01/14		750		751,171
Mack-Cali Realty Corp., Sr. Unsec’d. Notes		7.750%	08/15/19		765		917,089
ProLogis LP, Gtd. Notes		6.875%	03/15/20		72		84,802

SEE NOTES TO FINANCIAL STATEMENTS.

A81


CORPORATE BONDS (continued)	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Real Estate Investment Trusts (continued)
Simon Property Group LP, Sr. Unsec’d. Notes(a)		2.800%	01/30/17		295	$	305,120
Simon Property Group LP, Sr. Unsec’d. Notes		3.375%	03/15/22		230		224,177
Simon Property Group LP, Sr. Unsec’d. Notes		6.125%	05/30/18		3,080		3,566,067

							6,255,564

Retailers — 0.1%
CVS Caremark Corp., Sr. Unsec’d. Notes		5.300%	12/05/43		225		232,687
CVS Caremark Corp., Sr. Unsec’d. Notes		5.750%	05/15/41		100		109,137
CVS Caremark Corp., Sr. Unsec’d. Notes(a)		6.125%	09/15/39		515		584,071
Lowe’s Cos, Inc., Sr. Unsec’d. Notes		6.500%	03/15/29		385		456,631
Ltd. Brands, Inc., Gtd. Notes		5.625%	02/15/22		1,450		1,482,625
Macy’s Retail Holdings, Inc., Gtd. Notes		3.875%	01/15/22		360		354,844

							3,219,995

Technology — 0.1%
Arrow Electronics, Inc., Sr. Unsec’d. Notes		3.375%	11/01/15		400		413,953
Fidelity National Information Services, Inc., Gtd. Notes		7.875%	07/15/20		1,100		1,200,055
Fiserv, Inc., Gtd. Notes		3.125%	06/15/16		2,410		2,514,849
Seagate HDD Cayman, Gtd. Notes, 144A		3.750%	11/15/18		605		611,806

							4,740,663

Telecommunications — 0.5%
America Movil SAB de CV (Mexico), Gtd. Notes		6.125%	03/30/40		480		507,896
AT&T Corp., Gtd. Notes		8.000%	11/15/31		7		9,317
AT&T, Inc., Sr. Unsec’d. Notes		5.350%	09/01/40		815		806,387
British Telecommunications PLC (United Kingdom), Sr. Unsec’d. Notes		9.625%	12/15/30		400		596,898
Embarq Corp., Sr. Unsec’d. Notes (original cost $367,380; purchased 05/04/11-05/11/11)		7.082%	06/01/16(d)(e)		325		363,155
Embarq Corp., Sr. Unsec’d. Notes (original cost $1,002,520; purchased 05/12/06-04/10/07)		7.995%	06/01/36(d)(e)		1,000		1,012,440
Qwest Corp., Sr. Unsec’d. Notes		7.500%	10/01/14		1,440		1,511,479
Sprint Communications, Inc., Sr. Unsec’d. Notes(a)		6.000%	12/01/16		1,075		1,173,094
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.400%	09/15/33		1,705		1,960,956
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.550%	09/15/43		5,580		6,528,371
Verizon Communications, Inc., Sr. Unsec’d. Notes		6.350%	04/01/19		3,165		3,720,109

							18,190,102

Tobacco — 0.1%
Altria Group, Inc., Gtd. Notes		4.000%	01/31/24		1,500		1,466,121
Altria Group, Inc., Gtd. Notes		9.950%	11/10/38		46		70,168
Altria Group, Inc., Gtd. Notes		10.200%	02/06/39		254		396,295
Imperial Tobacco Finance PLC (United Kingdom), Gtd. Notes, 144A		2.050%	02/11/18		2,050		2,027,081
Lorillard Tobacco Co., Gtd. Notes		3.500%	08/04/16		465		489,294
Lorillard Tobacco Co., Gtd. Notes(a)		8.125%	06/23/19		325		395,897
Reynolds American, Inc., Gtd. Notes		4.750%	11/01/42		330		293,311

							5,138,167

TOTAL CORPORATE BONDS (cost $249,642,900)							263,539,551

COVERED BONDS — 0.4%
Bank Of Nova Scotia (Canada), Covered Bonds, 144A		1.650%	10/29/15		1,535		1,565,086
Depfa ACS Bank (Ireland), Covered Bonds, 144A		5.125%	03/16/37		500		423,125
Royal Bank of Canada (Canada), Covered Bonds		2.000%	10/01/18		4,280		4,257,787
Westpac Banking Corp. (Australia), Covered Bonds, 144A		1.850%	11/26/18		6,500		6,383,650

TOTAL COVERED BONDS (cost $12,820,658)							12,629,648

SEE NOTES TO FINANCIAL STATEMENTS.

A82


FOREIGN AGENCIES — 0.6%	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
Commonwealth Bank of Australia (Australia), Gov’t. Gtd. Notes, 144A		2.700%	11/25/14		7,435	$	7,592,771
Export-Import Bank of Korea (South Korea), Sr. Unsec’d. Notes		5.125%	06/29/20		400		439,490
Gazprom OAO Via Gaz Capital SA (Russia), Sr. Unsec’d. Notes, 144A		9.250%	04/23/19		930		1,143,900
Kommunalbanken AS (Norway), Sr. Unsec’d Notes, 144A		1.125%	05/23/18		3,158		3,067,681
Korea Hydro & Nuclear Power Co. Ltd. (South Korea), Sr. Unsec’d. Notes, 144A		6.250%	06/17/14		1,000		1,023,173
Pemex Project Funding Master Trust (Mexico), Gtd. Notes		6.625%	06/15/35		1,624		1,709,260
Pemex Project Funding Master Trust (Mexico), Gtd. Notes		8.625%	12/01/23		350		426,125
Petrobras Global Finance BV (Brazil), Gtd. Notes		2.000%	05/20/16		1,665		1,663,683
Petroleos Mexicanos (Mexico), Gtd. Notes(a)		3.500%	01/30/23		970		888,763
Petroleos Mexicanos (Mexico), Gtd. Notes		4.875%	01/18/24		510		510,000
Petroleos Mexicanos (Mexico), Gtd. Notes		5.500%	01/21/21		2,730		2,934,750
RSHB Capital SA For OJSC Russian Agricultural Bank (Russia), Sr. Unsec’d. Notes, 144A		6.299%	05/15/17		1,030		1,098,238

TOTAL FOREIGN AGENCIES (cost $22,564,733)							22,497,834

MUNICIPAL BONDS — 0.4%
California — 0.1%
Bay Area Toll Authority, Revenue Bonds, BABs		6.263%	04/01/49		1,325		1,589,218
State of California, GO, BABs		7.300%	10/01/39		1,270		1,597,139
State of California, GO, BABs		7.500%	04/01/34		475		604,447
State of California, GO, BABs		7.550%	04/01/39		245		317,518
State of California, GO, BABs		7.625%	03/01/40		215		283,065

							4,391,387

Colorado
Regional Transportation District, Revenue Bonds, Series 2010B, BABs		5.844%	11/01/50		680		785,046

Illinois — 0.1%
Chicago O’Hare International Airport, Revenue Bonds, BABs		6.395%	01/01/40		1,030		1,149,037
State of Illinois, GO, Taxable Series		4.421%	01/01/15		740		763,695

							1,912,732

New Jersey — 0.1%
New Jersey State Turnpike Authority, Revenue Bonds, Series F, BABs		7.414%	01/01/40		1,070		1,425,722

New York — 0.1%
New York City Transitional Finance Authority, Revenue Bonds, BABs		5.767%	08/01/36		1,130		1,281,725

Ohio
Ohio State University (The), Revenue Bonds, BABs		4.910%	06/01/40		455		455,901
Ohio State Water Development Authority, Revenue Bonds, BABs		4.879%	12/01/34		300		304,287

							760,188

Oregon
Oregon State Department of Transportation Highway, Revenue Bonds, Series A, BABs		5.834%	11/15/34		445		512,271

Pennsylvania
Pennsylvania Turnpike Commission, Revenue Bonds, Series B, BABs		5.511%	12/01/45		550		583,611

Tennessee
Metropolitan Government of Nashville & Davidson County Convention Center Authority, Revenue Bonds, BABs		6.731%	07/01/43		1,000		1,108,480

Texas
Texas State Transportation Commission, Revenue Bonds, Series B, BABs		5.028%	04/01/26		335		360,333

TOTAL MUNICIPAL BONDS (cost $11,435,814)							13,121,495

SEE NOTES TO FINANCIAL STATEMENTS.

A83


SOVEREIGN BONDS — 0.2%	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Brazilian Government International Bond (Brazil), Sr. Unsec’d. Notes		4.250%		01/07/25		1,275	$	1,214,438
Colombia Government International Bond (Colombia), Sr. Unsec’d. Notes		4.000%		02/26/24		1,475		1,421,900
Indonesia Government International Bond (Indonesia), Sr. Unsec’d. Notes, 144A(a)		5.875%		03/13/20		1,135		1,199,695
Indonesia Government International Bond (Indonesia), Sr. Unsec’d. Notes, 144A		6.875%		01/17/18		1,120		1,252,720
Mexico Government International Bond (Mexico), Sr. Unsec’d. Notes		3.625%		03/15/22		700		700,000
Mexico Government International Bond (Mexico), Sr. Unsec’d. Notes, MTN(a)		4.750%		03/08/44		1,006		906,658
Panama Government International Bond (Panama), Sr. Unsec’d. Notes		5.200%		01/30/20		620		675,025

TOTAL SOVEREIGN BONDS (cost $7,570,632)								7,370,436

U.S. GOVERNMENT AGENCY OBLIGATIONS — 7.1%
Federal Home Loan Bank		0.375%		08/28/15		460		460,284
Federal Home Loan Bank		5.500%		07/15/36		1,080		1,249,384
Federal Home Loan Mortgage Corp.(a)		0.750%		01/12/18		685		666,688
Federal Home Loan Mortgage Corp.(a)		1.375%		05/01/20		5,785		5,423,518
Federal Home Loan Mortgage Corp.(a)		2.375%		01/13/22		8,305		7,939,289
Federal Home Loan Mortgage Corp.		2.384%	(b)	06/01/36		549		580,273
Federal Home Loan Mortgage Corp.		2.572%	(b)	12/01/35		337		360,486
Federal Home Loan Mortgage Corp.		3.000%		10/01/42		1,980		1,877,741
Federal Home Loan Mortgage Corp.		3.500%		TBA 30YR		6,500		6,449,219
Federal Home Loan Mortgage Corp.		3.500%		TBA 15 YR		1,500		1,563,750
Federal Home Loan Mortgage Corp.		4.000%		TBA 30 YR		6,500		6,675,195
Federal Home Loan Mortgage Corp.		4.000%		06/01/26-12/01/40		6,524		6,817,090
Federal Home Loan Mortgage Corp.		4.500%		02/01/19-10/01/41		17,294		18,331,442
Federal Home Loan Mortgage Corp.		5.000%		07/01/18-06/01/39		6,401		6,881,435
Federal Home Loan Mortgage Corp.		5.500%		12/01/33-07/01/38		6,855		7,493,256
Federal Home Loan Mortgage Corp.		6.000%		03/01/32-08/01/39		3,028		3,360,694
Federal Home Loan Mortgage Corp.		6.500%		12/01/14		9		9,160
Federal Home Loan Mortgage Corp.		7.000%		01/01/31-10/01/32		431		481,665
Federal National Mortgage Assoc.(a)(g)		1.625%		11/27/18		4,690		4,650,876
Federal National Mortgage Assoc.		2.014%	(b)	07/01/33		393		414,113
Federal National Mortgage Assoc.		2.058%	(b)	06/01/37		139		146,582
Federal National Mortgage Assoc.		2.500%		TBA 15 YR		6,000		5,938,125
Federal National Mortgage Assoc.		2.500%		01/01/28		2,939		2,911,802
Federal National Mortgage Assoc.		3.000%		TBA 15 YR		9,500		9,694,824
Federal National Mortgage Assoc.		3.000%		TBA 30 YR		12,500		11,866,211
Federal National Mortgage Assoc.		3.000%		12/01/42		2,460		2,337,542
Federal National Mortgage Assoc.		3.500%		TBA 15 YR		5,500		5,751,582
Federal National Mortgage Assoc.		3.500%		06/01/39-03/01/43		27,581		27,432,049
Federal National Mortgage Assoc.		4.000%		TBA 30 YR		12,500		12,867,188
Federal National Mortgage Assoc.		4.500%		TBA 30 YR		5,500		5,827,637
Federal National Mortgage Assoc.		4.500%		11/01/18-07/01/42		13,886		14,755,067
Federal National Mortgage Assoc.		5.000%		10/01/18-02/01/36		6,032		6,553,292
Federal National Mortgage Assoc.		5.500%		03/01/16-08/01/37		8,659		9,522,751
Federal National Mortgage Assoc.		6.000%		05/01/14-05/01/38		7,572		8,444,606
Federal National Mortgage Assoc.		6.500%		07/01/17-09/01/37		2,675		2,979,706
Federal National Mortgage Assoc.		7.000%		02/01/32-07/01/32		279		315,316
Federal National Mortgage Assoc.		7.500%		05/01/32		61		69,215
Financing Corp., Strips Principal, Series A-P		1.610%	(f)	10/06/17		1,570		1,479,262
Financing Corp., Strips Principal, Series B-P		1.610%	(f)	10/06/17		2,140		2,016,319
Government National Mortgage Assoc.		3.000%		TBA 30 YR		2,500		2,414,258
Government National Mortgage Assoc.		3.000%		TBA 30 YR		3,000		2,898,516
Government National Mortgage Assoc.		3.500%		TBA 30 YR		11,000		11,086,368
Government National Mortgage Assoc.		4.000%		TBA 30 YR		15,000		15,595,899
Government National Mortgage Assoc.		4.000%		06/15/40-05/20/41		2,994		3,116,904

SEE NOTES TO FINANCIAL STATEMENTS.

A84


U.S. GOVERNMENT AGENCY OBLIGATIONS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Government National Mortgage Assoc.		4.500%		TBA 30 YR		2,000	$	2,133,906
Government National Mortgage Assoc.		4.500%		TBA 30 YR		1,000		1,069,141
Government National Mortgage Assoc.		4.500%		01/20/41-02/20/41		5,564		5,973,314
Government National Mortgage Assoc.		5.500%		11/15/32-02/15/36		3,329		3,683,590
Government National Mortgage Assoc.		6.000%		02/15/33-10/15/34		1,598		1,800,589
Government National Mortgage Assoc.		6.500%		10/15/23-07/15/35		1,915		2,164,699
Government National Mortgage Assoc.		8.000%		01/15/24-04/15/25		61		69,346

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $261,861,937)								264,601,164

U.S. TREASURY OBLIGATIONS — 2.6%
U.S. Treasury Bonds(a)(h)		3.625%		08/15/43		5,300		5,005,188
U.S. Treasury Bonds		3.750%		11/15/43		7,080		6,843,259
U.S. Treasury Inflation Indexed Bonds		0.125%		04/15/18		4,820		4,915,673
U.S. Treasury Inflation Indexed Bonds		0.375%		07/15/23		3,192		3,078,124
U.S. Treasury Inflation Indexed Bonds		0.625%		02/15/43		935		718,641
U.S. Treasury Inflation Indexed Bonds		1.375%		01/15/20		6,005		6,448,660
U.S. Treasury Notes		0.625%		04/30/18		1,875		1,808,203
U.S. Treasury Notes		0.875%		07/31/19		4,145		3,903,102
U.S. Treasury Notes(a)		1.250%		11/30/18		18,330		17,937,628
U.S. Treasury Notes		1.500%		12/31/18		16,020		15,839,775
U.S. Treasury Notes		2.375%		12/31/20		24,390		24,294,733
U.S. Treasury Notes(a)		2.750%		11/15/23		15		14,674
U.S. Treasury Notes		3.500%		02/15/18		4,010		4,353,356
U.S. Treasury Strips Principal(a)		8.020%	(f)	05/15/43		8,120		2,384,349
U.S. Treasury Strips Principal		8.070%	(f)	02/15/43		1,920		569,566

TOTAL U.S. TREASURY OBLIGATIONS (cost $98,536,105)								98,114,931

TOTAL LONG-TERM INVESTMENTS (cost $2,793,605,771)								3,512,250,000

SHORT-TERM INVESTMENTS — 11.4%
U.S. TREASURY OBLIGATION — 0.1%
U.S. Treasury Bonds(g) (cost $1,924,804)		0.047%	(f)	03/20/14		1,925		1,924,754


					Shares
AFFILIATED MUTUAL FUNDS — 11.3%
Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund (cost $131,765,674) (Note 4)(i)						13,390,235		124,663,087
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $296,818,840; includes $108,463,728 of cash collateral for securities on loan) (Note 4)(i)(j)						296,818,840		296,818,840

TOTAL AFFILIATED MUTUAL FUNDS (cost $428,584,514)								421,481,927


				Counterparty	Notional Amount (000)#
OPTIONS PURCHASED*
Call Options
Interest Rate Swap Options,
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Barclays Bank PLC		29,770		300
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Citibank NA		36,480		368
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14				Citibank NA		36,480		368

TOTAL OPTIONS PURCHASED (cost $108,779)								1,036

TOTAL SHORT-TERM INVESTMENTS (cost $430,618,097)								423,407,717

TOTAL INVESTMENTS, BEFORE SECURITY SOLD SHORT — 105.5% (cost $3,224,223,868)								3,935,657,717

SEE NOTES TO FINANCIAL STATEMENTS.

A85


SECURITY SOLD SHORT — (0.2)%	Interest Rate		Maturity Date	Principal Amount (000)#		Value (Note 2)
U.S. GOVERNMENT AGENCY OBLIGATION
Federal National Mortgage Assoc. (proceeds received $5,450,156)		3.500%	01/15/42		5,500	$	(5,463,477	)

TOTAL INVESTMENTS, NET OF SECURITY SOLD SHORT — 105.3% (cost $3,218,773,712)							3,930,194,240
LIABILITIES IN EXCESS OF OTHER ASSETS(k) — (5.3)%							(199,568,459	)

NET ASSETS — 100.0%						$	3,730,625,781

The following abbreviations are used in the portfolio descriptions:


144A		Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to the rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be illiquid.
ABS		Asset-Back Security
BABs		Build America Bonds
CDO		Collateralized Debt Obligation
CDX		Credit Derivative Index
CLO		Collateralized Loan Obligation
EAFE		Europe, Australasia and Far East
FHLMC		Federal Home Loan Mortgage Corp.
GO		General Obligation
I/O		Interest Only
LIBOR		London Interbank Offered Rate
MSCI		Morgan Stanley Capital International
MTN		Medium Term Note
REIT		Real Estate Investment Trust
SDR		Swedish Depositary Receipt
TBA		To Be Announced

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

*	Non-income producing security.

(a)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $105,942,063; cash collateral of $108,463,728 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(b)	Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.

(c)	Represents issuer in default on interest payments. Non-income producing security. Such securities may be post maturity.

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

(e)	Indicates a restricted security; the aggregate original cost of the restricted securities is $7,025,680. The aggregate value, $7,321,300, is approximately 0.2% of net assets.

(f)	Represents zero coupon bond or principal only securities. Rate represents yield to maturity at purchase date.

(g)	Represents security, or a portion thereof, segregated as collateral for futures contracts.

(h)	Represents security, or a portion thereof, segregated as collateral for swap agreements.

(i)	Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund and the Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund.

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

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

SEE NOTES TO FINANCIAL STATEMENTS.

A86

Open futures contracts outstanding at December 31, 2013:


Number of Contracts		Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation (Depreciation)
	Long Positions:
	968	5 Year U.S. Treasury Notes		Mar. 2014	$	116,300,600	$	115,494,500	$	(806,100	)
	196	10 Year U.S. Treasury Notes		Mar. 2014		24,333,384		24,117,188		(216,196	)
	172	90 Day Euro Dollar		Sept. 2016		42,245,330		42,116,350		(128,980	)
	430	S&P 500 E-mini Futures		Mar. 2014		38,277,787		39,583,650		1,305,863

										154,587

	Short Positions:
	172	90 Day Euro Dollar		Sept. 2015		42,645,251		42,625,900		19,351
	164	U.S. Long Bond		Mar. 2014		21,320,899		21,043,250		277,649
	64	U.S. Ultra Bond		Mar. 2014		8,829,843		8,720,000		109,843

										406,843

									$	561,430

Interest rate swap agreements outstanding at December 31, 2013:


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
	Over-the-counter swap agreements:
	2,195		09/14/16		1.206%	3 month LIBOR(2)	$	(35,305	)	$	—	$	(35,305	)	Deutsche Bank AG
	13,615		02/28/17		0.680%	3 month LIBOR(1)		(84,466	)		—		(84,466	)	Citibank Global Markets
	7,580		08/31/17		0.751%	3 Month LIBOR(2)		100,618			—		100,618		Bank of Nova Scotia
	3,158		05/17/18		0.989%	3 month LIBOR(2)		68,269			—		68,269		Credit Suisse First Boston Corp.

							$	49,116		$	—	$	49,116


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Value at Trade Date		Value at December 31, 2013			Unrealized Appreciation (Depreciation)
	Exchange-traded swap agreements:
	11,365		02/28/18		1.649%	3 month LIBOR(2)	$	201	$	(104,169	)	$	(104,370	)
	4,690		11/27/18		1.592%	3 month LIBOR(2)		171		35,758			35,587
	8,370		08/31/20		2.085%	3 month LIBOR(2)		200		154,760			154,560
	10,000		08/31/20		2.219%	3 month LIBOR(2)		210		99,717			99,507
	7,865		08/31/20		2.220%	3 month LIBOR(2)		197		77,944			77,747
	1,815		08/31/20		2.490%	3 month LIBOR(2)		161		(13,235	)		(13,396	)
	1,785		01/22/22		2.785%	3 month LIBOR(2)		161		(6,045	)		(6,206	)
	1,970		01/31/22		2.505%	3 month LIBOR(2)		162		35,249			35,087
	18,450		08/05/23		4.210%	3 month LIBOR(1)		—		(256,396	)		(256,396	)
	7,380		08/06/23		4.220%	3 month LIBOR(1)		—		(99,524	)		(99,524	)
	7,760		10/28/23		4.029%	3 month LIBOR(1)		185		(182,379	)		(182,564	)

							$	1,648	$	(258,320	)	$	(259,968	)

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

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

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

SEE NOTES TO FINANCIAL STATEMENTS.

A87

Credit default swap agreements outstanding at December 31, 2013:


Reference Entity/ Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Value at Trade Date			Value at December 31, 2013			Unrealized Depreciation
Exchange-traded credit default swaps on credit indices—Buy Protection(1):
CDX.NA.IG.21.V1		12/20/18		1.000%		43,000	$	(441,990	)	$	(769,342	)	$	(327,352	)



Reference Entity/ Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Fair Value(4)			Upfront Premiums Paid (Received)		Unrealized Depreciation			Counterparty
Over-the-counter credit default swaps on corporate issues—Buy Protection(1):
Bunge Ltd. Finance Corp.		06/20/14		0.650%		1,150	$	(3,010	)	$	—	$	(3,010	)	JPMorgan Chase Bank
Newell Rubbermaid, Inc.		06/20/18		1.000%		1,700		(43,990	)		—		(43,990	)	Morgan Stanley Capital Services, Inc.
Simon Property Group LP		06/20/18		0.970%		2,800		(64,950	)		—		(64,950	)	Morgan Stanley Capital Services, Inc.

							$	(111,950	)	$	—	$	(111,950	)



Reference Entity/ Obligation	Termination Date		Fixed Rate		Notional Amount (000)#(3)		Fair Value(4)		Upfront Premiums Paid (Received)		Unrealized Appreciation		Counterparty
Over-the-counter credit default swaps on credit indices—Sell Protection(2):
CDX.NA.HY.17.V5		12/20/16		5.000%		1,440	$	134,615	$	60,400	$	74,215	Credit Suisse First Boston Corp.
CDX.NA.HY.17.V5		12/20/16		5.000%		3,840		358,973		165,867		193,106	Deutsche Bank
CDX.NA.HY.17.V5		12/20/16		5.000%		5,280		493,588		231,367		262,221	Deutsche Bank

							$	987,176	$	457,634	$	529,542

(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)

(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)

The fair value of credit default swap agreements on asset-backed securities and credit indices serves 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 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 occurring 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 generally in active markets for identical securities.

Level 2—

Level 3—

significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks	$	2,506,648,590	$	133,009,195	$	—
Exchange Traded Fund		2,065,448		—		—
Preferred Stocks		599,500		151,549		—
Asset-Backed Securities		—		52,679,635		2,290,800
Bank Loans		—		9,125,415		—

SEE NOTES TO FINANCIAL STATEMENTS.

A88


	Level 1			Level 2			Level 3
Collateralized Mortgage Obligations	$	—		$	5,302,308		$	—
Commercial Mortgage-Backed Securities		—			118,502,501			—
Corporate Bonds		—			258,852,783			4,686,768
Covered Bonds		—			12,629,648			—
Foreign Agencies		—			22,497,834			—
Municipal Bonds		—			13,121,495			—
Sovereign Bonds		—			7,370,436			—
U.S. Government Agency Obligations		—			264,601,164			—
U.S. Treasury Obligations		—			100,039,685			—
Affiliated Mutual Funds		421,481,927			—			—
Options Purchased		—			1,036			—
U.S. Government Agency Obligation Sold Short		—			(5,463,477	)		—
Other Financial Instruments*
Futures Contracts		561,430			—			—
Interest Rate Swap Agreements		(259,968	)		49,116			—
Credit Default Swap Agreements		(327,352	)		417,592			—

Total	$	2,930,769,575		$	992,887,915		$	6,977,568

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

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


Affiliated Mutual Funds (including 2.9% of collateral received for securities on loan)	11.3	%
U.S. Government Agency Obligations	7.1
Oil, Gas & Consumable Fuels	6.4
Pharmaceuticals	5.2
Commercial Mortgage-Backed Securities	3.2
Computers & Peripherals	3.1
Diversified Financial Services	3.1
Software	2.9
Commercial Banks	2.8
U.S. Treasury Obligations	2.7
Insurance	2.4
Aerospace & Defense	2.3
Food & Staples Retailing	2.0
Banking	1.9
Media	1.9
IT Services	1.9
Capital Markets	1.9
Specialty Retail	1.8
Biotechnology	1.7
Communications Equipment	1.7
Internet Software & Services	1.6
Beverages	1.6
Chemicals	1.5
Diversified Telecommunication Services	1.5
Healthcare Equipment & Supplies	1.4
Household Products	1.4
Collateralized Loan Obligations	1.3
Energy Equipment & Services	1.3
Industrial Conglomerates	1.3
Real Estate Investment Trusts	1.2
Machinery	1.1
Road & Rail	1.1
Hotels, Restaurants & Leisure	1.1
Metals & Mining	1.0
Electric Utilities	1.0


Multiline Retail	1.0	%
Healthcare Providers & Services	1.0
Semiconductors & Semiconductor Equipment	0.9
Food Products	0.8
Automobiles	0.7
Tobacco	0.7
Foreign Agencies	0.6
Air Freight & Logistics	0.6
Electrical Equipment	0.6
Textiles, Apparel & Luxury Goods	0.6
Real Estate Management & Development	0.5
Internet & Catalog Retail	0.5
Electronic Equipment, Instruments & Components	0.5
Telecommunications	0.5
Household Durables	0.4
Construction & Engineering	0.4
Building Products	0.4
Electric	0.4
Multi-Utilities	0.4
Municipal Bonds	0.4
Covered Bonds	0.4
Trading Companies & Distributors	0.3
Consumer Finance	0.3
Foods	0.3
Capital Goods	0.3
Energy – Other	0.3
Healthcare & Pharmaceutical	0.3
Auto Components	0.3
Independent Power Producers & Energy Traders	0.3
Cable	0.2
Leisure Equipment & Products	0.2
Sovereign Bonds	0.2
Lodging	0.2
Media & Entertainment	0.2
Technology	0.2
Airlines	0.2
Healthcare Insurance	0.2

SEE NOTES TO FINANCIAL STATEMENTS.

A89


Industry table (cont.)
Personal Products	0.2	%
Non-Captive Finance	0.2
Residential Mortgage-Backed Securities	0.2
Automotive	0.1
Metals	0.1
Diversified Consumer Services	0.1
Collateralized Mortgage Obligations	0.1
Gas Utilities	0.1
Paper	0.1
Water Utilities	0.1
Retailers	0.1
Healthcare Technology	0.1
Packaging	0.1


Building Materials & Construction	0.1	%
Wireless Telecommunication Services	0.1
Pipelines & Other	0.1
Exchange Traded Fund	0.1
Commercial Services & Supplies	0.1
Marine	0.1
Consumer	0.1
Brokerage	0.1
Paper & Forest Products	0.1

	105.5
U.S. Government Agency Obligation Sold Short	(0.2	)
Liabilities in excess of other assets	(5.3	)

	100.0	%

Fair values of derivative instruments as of December 31, 2013 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	—		—		Due from broker — variation margin	$	327,352	*
Credit contracts	Premiums paid for swap agreements		457,633		Premiums received for swap agreements		—
Credit contracts	Unrealized appreciation on over-the-counter swap agreements		529,542		Unrealized depreciation on over-the-counter swap agreements		111,950
Equity contracts	Due from broker — variation margin		1,305,863	*	—		—
Interest rate contracts	Due from broker — variation margin		809,331	*	Due from broker — variation margin		1,813,732	*
Interest rate contracts	Unaffiliated investments		1,036		—		—
Interest rate contracts	Unrealized appreciation on over-the-counter swap agreements		168,887		Unrealized depreciation on over-the-counter swap agreements		119,771

Total		$	3,272,292			$	2,372,805

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Rights*		Options Purchased*			Options Written			Futures			Swaps			Total
Credit contracts	$	—		—			—		$	—		$	(297,646	)	$	(297,646	)
Equity contracts		6,811		—			—			3,574,077			—			3,580,888
Interest rate contracts		—		(266,674	)		24,481			(511,258	)		681,686			(71,765	)

Total	$	6,811	$	(266,674	)	$	24,481		$	3,062,819		$	384,040		$	3,211,477

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

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value			Rights**			Options Purchased**			Futures			Swaps			Total
Credit contracts			$	—		$	—		$	—		$	94,627		$	94,627
Equity contracts				(1,409	)		—			1,305,863			—			1,304,454
Interest rate contracts				—			(107,743	)		(1,027,012	)		443,769			(690,986	)

Total			$	(1,409	)	$	(107,743	)	$	278,851		$	538,396		$	708,095

** Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operation.

SEE NOTES TO FINANCIAL STATEMENTS.

A90

For the year ended December 31, 2013, the Portfolio’s average volume of derivative activities is as follows:


Options Purchased (Cost)	Options Written (Premiums Received)	Futures Long Position (Value at Trade Date)	Futures Short Position (Value at Trade Date)
$127,582	$12,391	$164,056,692	$40,674,209


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))
$134,616	$46,170	$8,448

Offsetting of financial instrument and derivative assets and liabilities:


Description	Gross Amounts Recognized			Gross Amounts not subject to netting			Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	105,942,063		$	—		$	—	$	105,942,063
Exchange-traded and cleared derivatives		129,046			—			—		129,046
Over-the-counter derivatives*		699,465			(1,036	)		—		698,429

										106,769,538

Liabilities:
Securities sold short		(5,463,477	)		5,463,477			—		—
Exchange-traded and cleared derivatives		—			—			—		—
Over-the-counter derivatives*		(231,721	)		—			—		(231,721	)

										(231,721	)

Collateral Amounts Pledged/(Received):
Securities on loan										(105,942,063	)
Exchange-traded and cleared derivatives										—
Over-the-counter derivatives										(562,506	)

Net Amount									$	33,248

SEE NOTES TO FINANCIAL STATEMENTS.

A91


		*FLEXIBLE MANAGED PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $105,942,063:
Unaffiliated investments (cost $2,795,639,354)	$	3,514,175,790
Affiliated investments (cost $428,584,514)		421,481,927
Cash		46,358
Foreign currency, at value (cost $376,441)		378,812
Receivable for investments sold		13,290,867
Dividends and interest receivable		9,213,865
Unrealized appreciation on over-the-counter swap agreements		698,429
Premiums paid for swap agreements		457,633
Tax reclaim receivable		157,648
Due from broker—variation margin		129,046
Prepaid expenses		32,289
Receivable for Series shares sold		24,106

Total Assets		3,960,086,770

LIABILITIES
Payable for investments purchased		112,635,908
Collateral for securities on loan		108,463,728
Securities sold short, at value (proceeds received $5,450,156)		5,463,477
Management fee payable		1,872,673
Payable for Series shares repurchased		460,473
Unrealized depreciation on over-the-counter swap agreements		231,721
Accrued expenses and other liabilities		332,083
Affiliated transfer agent fee payable		926

Total Liabilities		229,460,989

NET ASSETS	$	3,730,625,781

Net assets were comprised of:
Paid-in capital	$	2,640,135,796
Retained earnings		1,090,489,985

Net assets, December 31, 2013	$	3,730,625,781

Net asset value and redemption price per share, $3,730,625,781 / 174,773,170 outstanding shares of beneficial interest	$	21.35

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $205,712)	$	53,162,287
Interest income		31,705,324
Affiliated dividend income		2,040,557
Affiliated income from securities loaned, net		212,318

		87,120,486

EXPENSES
Management fee		21,024,924
Custodian’s fees and expenses		511,000
Shareholders’ reports		290,000
Trustees’ fees		42,000
Insurance expenses		41,000
Audit fee		37,000
Legal fees and expenses		16,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Commitment fee on syndicated credit agreement		6,000
Miscellaneous		52,598

Total expenses		22,032,522

NET INVESTMENT INCOME		65,087,964

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions (including affiliated: ($1,156,796))		319,541,367
Futures transactions		3,062,819
Swap agreements transactions		384,040
Foreign currency transactions		(46,123	)
Option written transactions		24,481

		322,966,584

Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $2,310,361)		252,667,911
Securities sold short		(2,794	)
Futures		278,851
Swap agreements		538,396
Foreign currencies		8,239

		253,490,603

NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		576,457,187

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	641,545,151

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	65,087,964		$	65,899,714
Net realized gain on investments and foreign currencies		322,966,584			140,795,570
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		253,490,603			192,663,911

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		641,545,151			399,359,195

DISTRIBUTIONS		—			(61,900,998	)

SERIES SHARE TRANSACTIONS:
Series shares sold [651,459 and 819,611 shares, respectively]		12,747,246			14,077,527
Series shares issued in reinvestment of distributions [0 and 3,735,727 shares, respectively]		—			61,900,998
Series shares repurchased [9,694,842 and 10,708,816 shares, respectively]		(189,432,596	)		(184,472,132	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(176,685,350	)		(108,493,607	)

TOTAL INCREASE IN NET ASSETS		464,859,801			228,964,590
NET ASSETS:
Beginning of year		3,265,765,980			3,036,801,390

End of year	$	3,730,625,781		$	3,265,765,980

SEE NOTES TO FINANCIAL STATEMENTS.

A92


LONG-TERM INVESTMENTS — 96.5%
COMMON STOCKS — 96.5%	Shares		Value (Note 2)
Australia — 1.9%
Arrium Ltd.		447,200	$	702,266
Ausdrill Ltd.		123,200		113,883
Bendigo & Adelaide Bank Ltd.		103,400		1,086,952
Bradken Ltd.		98,900		534,091
Challenger Ltd.		204,200		1,134,079
CSL Ltd.		50,999		3,143,918
Downer EDI Ltd.		182,200		793,980
Fortescue Metals Group Ltd.		99,300		518,724
GrainCorp Ltd.		42,400		321,948
Leighton Holdings Ltd.		37,200		537,232
Lend Lease Group		114,600		1,143,671
Metcash Ltd.		206,000		581,749
Mineral Resources Ltd.		25,500		271,328
National Australia Bank Ltd.		37,600		1,173,569
Pacific Brands Ltd.		460,600		263,974
Qantas Airways Ltd.*		419,500		411,493
Rio Tinto Ltd.		23,400		1,432,244

				14,165,101

Austria — 0.3%
OMV AG		30,300		1,450,182
Voestalpine AG		14,500		696,790

				2,146,972

Belgium — 0.2%
AGFA-Gevaert NV*		86,100		208,469
Delhaize Group SA		21,500		1,279,083

				1,487,552

Bermuda — 0.5%
Genpact Ltd.		195,847		3,597,709

Brazil — 0.3%
Cielo SA		40,200		1,118,631
Kroton Educacional SA		55,900		930,225

				2,048,856

Canada — 0.9%
Brookfield Asset Management, Inc. (Class A Stock)		79,958		3,104,769
Canadian Pacific Railway Ltd.		21,750		3,291,210

				6,395,979

China — 0.8%
Baidu, Inc., ADR*		4,963		882,818
CIMC Enric Holdings Ltd.		526,000		850,259
Poly Property Group Co. Ltd.		846,000		453,389
Shougang Fushan Resources Group Ltd.		1,160,000		407,847
Tencent Holdings Ltd.		54,400		3,483,095

				6,077,408

Denmark — 0.5%
A.P. Moeller – Maersk A/S (Class B Stock)		70		757,537
Coloplast A/S (Class B Stock)		40,249		2,668,331

				3,425,868

Finland — 0.5%
Sampo OYJ (Class A Stock)		63,003		3,096,776
Tieto OYJ		41,300		935,381

				4,032,157


COMMON STOCKS (continued)	Shares		Value (Note 2)
France — 4.7%
Alstom SA		22,200	$	809,560
Arkema SA		7,200		840,662
AXA SA		40,200		1,119,479
BNP Paribas SA		96,941		7,562,134
Bouygues SA		21,900		828,170
Cap Gemini SA		44,649		3,022,097
Cie Generale des Etablissements Michelin		12,000		1,276,814
Credit Agricole SA*		62,500		801,186
Dassault Systemes SA		22,824		2,833,140
Electricite de France SA		24,600		870,281
Renault SA		12,300		989,864
Sanofi		11,900		1,270,864
SCOR SE		22,000		804,686
Societe Generale SA		10,800		628,028
Technip SA		10,740		1,033,844
Thales SA		24,500		1,578,873
Total SA		38,500		2,363,118
Valeo SA		13,300		1,473,930
Vinci SA		55,520		3,649,414
Vivendi SA		59,600		1,572,099

				35,328,243

Germany — 3.6%
Allianz SE		10,300		1,853,242
Aurubis AG		6,200		378,339
BASF SE		8,700		928,589
Bayer AG		5,600		786,303
Bayerische Motoren Werke AG		35,517		4,170,873
Brenntag AG		12,164		2,257,597
Continental AG		6,100		1,340,111
Daimler AG		23,700		2,056,801
Deutsche Bank AG		13,700		658,170
E.ON AG		46,000		850,447
Freenet AG		37,500		1,126,729
Hannover Rueckversicherung AG		8,600		739,352
Lanxess AG		8,100		541,239
Metro AG		17,100		829,009
Muenchener Rueckversicherungs AG		5,700		1,257,254
ProSiebenSat.1 Media AG		36,860		1,830,324
Rational AG		2,512		833,313
Rheinmetall AG		13,300		820,541
RWE AG		18,800		688,816
Stada Arzneimittel AG		14,500		717,897
Volkswagen AG		7,400		2,009,240

				26,674,186

Hong Kong — 1.2%
AIA Group Ltd.		987,800		4,972,079
Cheung Kong Holdings Ltd.		46,000		727,756
First Pacific Co. Ltd.		528,000		602,021
Huabao International Holdings Ltd.		1,286,000		712,959
Kingboard Chemical Holdings Ltd.		216,000		565,341
Singamas Container Holdings Ltd.		2,676,000		629,774
Yue Yuen Industrial Holdings Ltd.		154,000		514,933

				8,724,863

India — 0.3%
Tata Motors Ltd., ADR		81,031		2,495,755

SEE NOTES TO FINANCIAL STATEMENTS.

A93


COMMON STOCKS (continued)	Shares		Value (Note 2)
Indonesia — 0.2%
PT Bank Rakyat Indonesia (Persero) Tbk		2,638,000	$	1,576,787

Ireland — 1.4%
Accenture PLC (Class A Stock)		58,910		4,843,580
Allegion PLC*		7,000		309,330
Irish Life & Permanent Group Holdings PLC*		51,300		3,176
Ryanair Holdings PLC, ADR*		45,755		2,147,282
Smurfit Kappa Group PLC		43,000		1,055,272
XL Group PLC		66,902		2,130,160

				10,488,800

Israel — 0.7%
Bank Hapoalim BM		128,000		717,196
Check Point Software Technologies Ltd.*(a)		41,249		2,661,385
Elbit Systems Ltd.		11,400		688,528
Teva Pharmaceutical Industries Ltd.		20,500		820,234

				4,887,343

Italy — 0.6%
Banco Popolare Scarl*		38,200		73,158
Enel SpA		323,000		1,409,383
ENI SpA		70,800		1,710,794
Finmeccanica SpA*		79,000		599,655
Telecom Italia SpA		626,400		624,621

				4,417,611

Japan — 9.2%
Alpine Electronics, Inc.		22,700		318,108
Aoyama Trading Co. Ltd.		39,100		1,057,431
Aozora Bank Ltd.		278,000		787,821
Astellas Pharma, Inc.		29,400		1,743,033
Autobacs Seven Co. Ltd.		42,000		654,203
Bank of Yokohama Ltd. (The)		96,000		535,606
Coca-Cola West Co. Ltd.		21,900		463,838
Daikin Industries Ltd.		50,600		3,157,578
Denso Corp.		65,000		3,433,865
Fuji Heavy Industries Ltd.		119,574		3,436,432
Fukuoka Financial Group, Inc.		129,000		566,239
Hogy Medical Co. Ltd.		11,400		600,319
Hoya Corp.		37,600		1,045,727
ITOCHU Corp.		76,300		943,269
JX Holdings, Inc.		101,400		522,154
KDDI Corp.		27,600		1,700,581
Keihin Corp.		24,500		380,403
Keyence Corp.		7,800		3,339,846
KYORIN Holdings, Inc.		37,400		801,332
Kyowa Exeo Corp.		81,900		1,083,068
Lawson, Inc.		30,400		2,275,013
Marubeni Corp.		146,000		1,051,065
MISUMI Group, Inc.		53,800		1,691,501
Mitsubishi Corp.		50,200		963,736
Mitsubishi UFJ Financial Group, Inc.		243,500		1,616,693
Mitsui & Co. Ltd.		99,700		1,389,932
Mizuho Financial Group, Inc.		703,200		1,526,669
Nichii Gakkan Co.		40,300		323,200
Nichirei Corp.		118,000		601,820
Nippon Telegraph & Telephone Corp.		37,000		1,992,835


COMMON STOCKS (continued)	Shares		Value (Note 2)
Japan (continued)
Nishi-Nippon City Bank Ltd. (The)		167,000	$	449,888
Nissan Motor Co. Ltd.		71,300		597,495
NTT DOCOMO, Inc.		90,000		1,481,966
ORIX Corp.		261,500		4,595,044
Resona Holdings, Inc.		235,900		1,203,672
Sankyu, Inc.		210,000		819,489
Secom Co. Ltd.		49,600		2,992,615
Seino Holdings Co. Ltd.		65,000		684,039
Shimachu Co. Ltd.		30,700		726,872
Shin-Etsu Chemical Co. Ltd.		35,100		2,052,974
Start Today Co. Ltd.		23,100		574,393
Sumitomo Corp.		88,900		1,117,307
Sumitomo Metal Mining Co. Ltd.		21,200		277,790
Sumitomo Mitsui Financial Group, Inc.		121,686		6,328,084
Toagosei Co. Ltd.		147,000		629,177
Toho Holdings Co. Ltd.		53,300		855,585
Tsumura & Co.		22,900		606,847
UNY Group Holdings Co. Ltd.		75,600		463,769
West Japan Railway Co.		18,000		779,912
Yokohama Rubber Co. Ltd. (The)		100,000		983,352

				68,223,587

Liechtenstein
Verwaltungs- und Privat-Bank AG		2,100		229,527

Macau — 0.4%
MGM China Holdings Ltd.		744,800		3,187,647

Netherlands — 2.1%
Aegon NV		104,300		988,406
Core Laboratories NV(a)		31,803		6,072,783
ING Groep NV, CVA*		83,900		1,171,965
Koninklijke Ahold NV		85,000		1,527,553
Royal Dutch Shell PLC (Class B Stock)		106,900		4,032,308
Royal Dutch Shell PLC, ADR		25,550		1,820,949

				15,613,964

New Zealand — 0.1%
Air New Zealand Ltd.		737,900		996,448

Norway — 0.8%
DNB ASA		54,100		970,995
Fred Olsen Energy ASA		17,100		697,775
Statoil ASA		36,100		877,826
Telenor ASA		91,857		2,194,794
Yara International ASA		23,200		1,000,575

				5,741,965

Singapore — 0.3%
DBS Group Holdings Ltd.		119,000		1,617,182
Golden Agri-Resources Ltd.		1,127,400		488,051

				2,105,233

South Africa — 0.8%
Aspen Pharmacare Holdings Ltd.		58,686		1,505,128
Bidvest Group Ltd.		77,813		1,993,440
Discovery Ltd.		276,604		2,230,949

				5,729,517

SEE NOTES TO FINANCIAL STATEMENTS.

A94


COMMON STOCKS (continued)	Shares		Value (Note 2)
South Korea — 0.2%
Samsung Electronics Co. Ltd.		1,175	$	1,531,081

Spain — 1.1%
Amadeus IT Holding SA (Class A Stock)		12,685		543,368
Banco Santander SA		148,213		1,332,810
Gas Natural SDG SA		51,600		1,328,155
Inditex SA		20,449		3,376,371
Repsol SA		57,200		1,443,340
Telefonica SA		25,100		410,406

				8,434,450

Sweden — 0.7%
Boliden AB		45,100		691,453
NCC AB (Class B Stock)		15,700		512,764
Nordea Bank AB		72,500		977,503
Oriflame Cosmetics SA, SDR		13,600		418,112
Swedbank AB (Class A Stock)		50,400		1,419,733
TeliaSonera AB		154,700		1,290,261

				5,309,826

Switzerland — 3.5%
Baloise Holding AG		11,400		1,453,661
Cie Financiere Richemont SA		36,358		3,632,072
Credit Suisse Group AG		50,297		1,552,335
Geberit AG		9,067		2,750,756
Georg Fischer AG		2,000		1,408,068
Novartis AG		18,000		1,442,689
Partners Group Holding AG		9,959		2,655,957
Roche Holding AG		21,188		5,935,316
Swiss Life Holding AG*		7,800		1,621,618
Swiss Re AG		19,300		1,779,237
Zurich Insurance Group AG		5,800		1,682,372

				25,914,081

United Kingdom — 9.2%
Alent PLC		46,600		273,945
AMEC PLC		35,900		648,170
ARM Holdings PLC		103,749		1,886,465
AstraZeneca PLC		51,200		3,037,555
Aviva PLC		144,400		1,080,327
Babcock International Group PLC		111,587		2,507,377
BAE Systems PLC		256,400		1,849,883
Barclays PLC		287,100		1,298,239
Beazley PLC		175,100		790,459
Berkeley Group Holdings PLC		66,221		2,919,582
BG Group PLC		103,891		2,235,575
BP PLC		351,100		2,845,369
BT Group PLC		348,600		2,198,262
Carillion PLC		145,900		799,917
Centrica PLC		160,065		923,039
Compass Group PLC		285,661		4,586,275
Debenhams PLC		301,400		365,115
Diageo PLC		50,901		1,686,795
Experian PLC		81,751		1,510,141
GlaxoSmithKline PLC		23,400		625,192
Home Retail Group PLC		107,200		341,449
HSBC Holdings PLC (XLON)		90,500		993,166
HSBC Holdings PLC (XHKG)		306,599		3,342,333
IMI PLC		82,974		2,101,240


COMMON STOCKS (continued)	Shares		Value (Note 2)
United Kingdom (continued)
InterContinental Hotels Group PLC		84,230	$	2,809,621
Intermediate Capital Group PLC		108,800		758,617
J Sainsbury PLC		259,000		1,567,535
Johnson Matthey PLC		49,169		2,675,441
Legal & General Group PLC		366,900		1,356,238
Meggitt PLC		296,248		2,593,794
Mondi PLC		26,600		461,739
Old Mutual PLC		214,100		671,765
Premier Foods PLC*		152,560		315,791
Rolls-Royce Holdings PLC		99,673		2,108,232
RSA Insurance Group PLC		300,200		454,366
St. James’s Place PLC		230,337		2,784,069
TESCO PLC		233,500		1,296,711
Tullow Oil PLC		110,584		1,569,482
Vesuvius PLC		81,100		685,764
Vodafone Group PLC		295,900		1,165,021
WM Morrison Supermarkets PLC		320,700		1,388,258
WPP PLC		134,277		3,075,489

				68,583,803

United States — 49.5%
3M Co.		30,725		4,309,181
AES Corp.		166,850		2,420,994
Allstate Corp. (The)		49,500		2,699,730
American Express Co.		33,100		3,003,163
Ameriprise Financial, Inc.		17,350		1,996,118
Amgen, Inc.		19,450		2,220,412
Amphenol Corp. (Class A Stock)		65,481		5,839,596
Anadarko Petroleum Corp.		7,950		630,594
ANSYS, Inc.*		38,934		3,395,045
Apache Corp.		39,250		3,373,145
Apple, Inc.		14,616		8,201,184
AT&T, Inc.		108,450		3,813,102
Avon Products, Inc.		71,900		1,238,118
Baker Hughes, Inc.		31,250		1,726,875
Bank of America Corp.		260,850		4,061,435
Boeing Co. (The)		15,200		2,074,648
Carnival Corp.		60,400		2,426,268
Celanese Corp., Series A		73,600		4,070,816
Charles Schwab Corp. (The)		352,435		9,163,310
Chevron Corp.		38,550		4,815,281
Cisco Systems, Inc.		116,500		2,615,425
Cognizant Technology Solutions Corp. (Class A Stock)*		37,197		3,756,153
Comcast Corp. (Class A Stock)		25,700		1,335,501
Comcast Corp. (Special Class A Stock)		18,300		912,804
CONSOL Energy, Inc.(a)		35,300		1,342,812
Costco Wholesale Corp.		42,477		5,055,188
Covance, Inc.*		50,556		4,451,961
Covidien PLC		32,300		2,199,630
Danaher Corp.		88,816		6,856,595
DaVita HealthCare Partners, Inc.*		81,022		5,134,364
Ecolab, Inc.		55,333		5,769,572
Emerson Electric Co.		19,400		1,361,492
Entergy Corp.(a)		33,650		2,129,036
EQT Corp.		21,950		1,970,671
Estee Lauder Cos., Inc. (The) (Class A Stock)		87,307		6,575,963

SEE NOTES TO FINANCIAL STATEMENTS.

A95


COMMON STOCKS (continued)	Shares		Value (Note 2)
United States (continued)
Exelon Corp.(a)		59,700	$	1,635,183
Express Scripts Holding Co.*		118,242		8,305,318
Exxon Mobil Corp.		48,600		4,918,320
Fifth Third Bancorp		87,500		1,840,125
Fluor Corp.		98,335		7,895,317
FMC Technologies, Inc.*		99,821		5,211,654
Fossil Group, Inc.*		34,946		4,191,423
General Electric Co.		155,550		4,360,067
General Motors Co.*		91,050		3,721,214
Gilead Sciences, Inc.*		63,401		4,764,585
Goldman Sachs Group, Inc. (The)		4,975		881,869
Google, Inc. (Class A Stock)*		8,411		9,426,292
Hess Corp.		26,250		2,178,750
Honeywell International, Inc.		25,950		2,371,052
Illinois Tool Works, Inc.		21,650		1,820,332
Ingersoll-Rand PLC		21,000		1,293,600
International Paper Co.		69,500		3,407,585
Intuitive Surgical, Inc.*		17,233		6,618,851
Invesco Ltd.		47,100		1,714,440
Johnson & Johnson		41,950		3,842,201
JPMorgan Chase & Co.		111,000		6,491,280
Kellogg Co.		22,800		1,392,396
Kohl’s Corp.		51,450		2,919,788
Liberty Media Corp. (Class A Stock)*		4,000		585,800
Lockheed Martin Corp.		7,450		1,107,517
Lowe’s Cos., Inc.		72,900		3,612,195
Mallinckrodt PLC*		3,843		200,835
Marsh & McLennan Cos., Inc.		80,500		3,892,980
Mead Johnson Nutrition Co.		79,959		6,697,366
Merck & Co., Inc.		90,800		4,544,540
MetLife, Inc.		41,650		2,245,768
Microsoft Corp.		105,200		3,937,636
Morgan Stanley		125,650		3,940,384
Murphy Oil Corp.		2,550		165,444
National Instruments Corp.		105,386		3,374,460
NetApp, Inc.		104,666		4,305,959
Newfield Exploration Co.*		15,400		379,302
NRG Energy, Inc.		115,750		3,324,340
PepsiCo, Inc.		27,500		2,280,850
Pfizer, Inc.		192,700		5,902,401
PG&E Corp.		53,450		2,152,966
PNC Financial Services Group, Inc.		21,500		1,667,970
Procter & Gamble Co. (The)		41,200		3,354,092
QUALCOMM, Inc.		104,197		7,736,627
Raytheon Co.		22,650		2,054,355
Roper Industries, Inc.		40,260		5,583,257
Salesforce.com, Inc.*(a)		92,781		5,120,583
Schlumberger Ltd.		80,999		7,298,820
SLM Corp.		63,550		1,670,094
Southwest Airlines Co.		229,500		4,323,780
Spectra Energy Corp.		46,050		1,640,301
St. Joe Co. (The)*(a)		40,150		770,479
Starbucks Corp.		89,639		7,026,801
Stericycle, Inc.*		49,276		5,724,393
TE Connectivity Ltd.		31,100		1,713,921
Texas Instruments, Inc.		39,500		1,734,445
Thermo Fisher Scientific, Inc.(a)		31,500		3,507,525
Time Warner Cable, Inc.		26,000		3,523,000
Time Warner, Inc.		53,200		3,709,104


COMMON STOCKS (continued)	Shares		Value (Note 2)
United States (continued)
Union Pacific Corp.		17,500	$	2,940,000
United Technologies Corp.		31,350		3,567,630
U.S. Bancorp		78,300		3,163,320
Visa, Inc. (Class A Stock)		40,500		9,018,540
Vulcan Materials Co.		21,050		1,250,791
Wal-Mart Stores, Inc.		18,750		1,475,438
Wells Fargo & Co.		49,000		2,224,600
Western Union Co. (The)		75,750		1,306,688
Weyerhaeuser Co.		94,750		2,991,258
Whole Foods Market, Inc.		102,678		5,937,863

				368,834,242

TOTAL COMMON STOCKS (cost $554,692,628)				718,406,561


RIGHTS*	Units
Spain
Repsol SA (Spain), expiring 01/09/14 (cost $37,373)		57,200		39,030

TOTAL LONG-TERM INVESTMENTS (cost $554,730,001)				718,445,591

SHORT-TERM INVESTMENT — 5.0%
AFFILIATED MONEY MARKET MUTUAL FUND
Prudential Investment Portfolios 2 —Prudential Core Taxable Money Market Fund (cost $36,997,610; includes $18,518,249 of cash collateral received for securities on loan) (b)(c) (Note 4)		36,997,610		36,997,610

TOTAL INVESTMENTS — 101.5% (cost $591,727,611)				755,443,201
LIABILITIES IN EXCESS OF OTHER ASSETS — (1.5)%				(10,899,473	)

NET ASSETS — 100.0%			$	744,543,728

The following abbreviations are used in the Portfolio descriptions:


ADR		American Depositary Receipt
CVA		Certificate Van Anadelen (Bearer)
SDR		Swedish Depositary Receipt
XHKG		Hong Kong Stock Exchange
XLON		London Stock Exchange

*	Non-income producing security.

(a)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $18,125,648; cash collateral of $18,518,249 (included in 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.

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

SEE NOTES TO FINANCIAL STATEMENTS.

A96

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 generally in active markets for identical securities.

Level 2—other

Level 3—significant

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

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks
Australia	$	—	$	14,165,101	$	—
Austria		1,450,182		696,790		—
Belgium		208,469		1,279,083		—
Bermuda		3,597,709		—		—
Brazil		2,048,856		—		—
Canada		6,395,979		—		—
China		882,818		5,194,590		—
Denmark		—		3,425,868		—
Finland		—		4,032,157		—
France		2,833,140		32,495,103		—


	Level 1		Level 2		Level 3
Germany	$	—	$	26,674,186	$	—
Hong Kong		—		8,724,863		—
India		2,495,755		—		—
Indonesia		—		1,576,787		—
Ireland		9,430,352		1,058,448		—
Israel		2,661,385		2,225,958		—
Italy		—		4,417,611		—
Japan		—		68,223,587		—
Liechtenstein		229,527		—		—
Macau		—		3,187,647		—
Netherlands		7,893,732		7,720,232		—
New Zealand		—		996,448		—
Norway		—		5,741,965		—
Singapore		—		2,105,233		—
South Africa		—		5,729,517		—
South Korea		—		1,531,081		—
Spain		—		8,434,450		—
Sweden		—		5,309,826		—
Switzerland		2,655,957		23,258,124		—
United Kingdom		1,044,102		67,539,701		—
United States		368,834,242		—		—
Rights:
Spain		39,030		—		—
Affiliated Money Market Mutual Fund		36,997,610		—		—

Total	$	449,698,845	$	305,744,356	$	—

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 were as follows:


Commercial Banks	6.3	%
Oil, Gas & Consumable Fuels	5.8
Insurance	5.5
Affiliated Money Market Mutual Fund (including 2.5% of collateral received for securities on loan)	5.0
Pharmaceuticals	4.5
IT Services	3.9
Food & Staples Retailing	3.3
Capital Markets	3.1
Energy Equipment & Services	3.0
Aerospace & Defense	2.7
Chemicals	2.7
Automobiles	2.7
Hotels, Restaurants & Leisure	2.6
Industrial Conglomerates	2.5
Software	2.5
Diversified Financial Services	2.4
Electronic Equipment, Instruments & Components	2.1
Construction & Engineering	2.1
Media	2.0
Health Care Providers & Services	1.9
Diversified Telecommunication Services	1.9
Internet Software & Services	1.8
Computers & Peripherals	1.7
Health Care Equipment & Supplies	1.7
Commercial Services & Supplies	1.6
Machinery	1.4
Communications Equipment	1.3
Biotechnology	1.3
Food Products	1.3
Auto Components	1.3
Specialty Retail	1.2
Trading Companies & Distributors	1.2


Road & Rail		1.2	%
Textiles, Apparel & Luxury Goods		1.2
Personal Products		1.2
Life Sciences Tools & Services		1.1
Airlines		1.1
Electrical Equipment		1.0
Real Estate Management & Development		0.9
Building Products		0.8
Electric Utilities		0.8
Metals & Mining		0.8
Independent Power Producers & Energy Traders		0.7
Wireless Telecommunication Services		0.7
Semiconductors & Semiconductor Equipment		0.7
Consumer Finance		0.6
Multi-Utilities		0.6
Beverages		0.6
Paper & Forest Products		0.6
Multiline Retail		0.5
Household Products		0.4
Household Durables		0.4
Real Estate Investment Trusts		0.4
Professional Services		0.2
Construction Materials		0.2
Gas Utilities	��	0.1
Containers & Packaging		0.1
Diversified Consumer Services		0.1
Internet & Catalog Retail		0.1
Marine		0.1

		101.5
Liabilities in excess of other assets		(1.5	)

		100.0	%

SEE NOTES TO FINANCIAL STATEMENTS.

A97

The Portfolio invested in derivative instruments during the reporting period. The primary types of risk associated with derivative instruments are equity risk and foreign exchange 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, 2013 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 contract

Unaffiliated investments

39,030

—

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Rights*		Forward Currency Contracts**		Total
Equity contracts	$	140,674	$	—	$	140,674
Foreign exchange contracts		—		80,622		80,622

	$	140,674	$	80,622	$	221,296

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

**	Included in net realized gain (loss) on foreign currency transactions in the Statement of Operations.



Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Rights*
Equity contracts	$	(33,225	)

*	Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the year ended December 31, 2013, the Portfolio’s average volume of derivative activities is as follows:

Forward Currency

Contracts—Purchased

(Value at Settlement Date Payable)

Forward Currency

Contracts—Sold
(Value at Settlement Date Receivable)

$8,292,287

$8,265,368

Offsetting of financial instrument assets and liabilities:


Description	Gross Amounts Recognized		Gross Amounts not subject to netting		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	18,125,648	$	—	$	—	$	18,125,648
Collateral Amounts Pledged/(Received):
Securities on loan								(18,125,648	)

Net Amount							$	—

SEE NOTES TO FINANCIAL STATEMENTS.

A98


		*GLOBAL PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $18,125,648:
Unaffiliated investments (cost $554,730,001)	$	718,445,591
Affiliated investments (cost $36,997,610)		36,997,610
Foreign currency, at value (cost $2,389,637)		2,422,736
Cash		130,344
Receivable for investments sold		4,855,793
Tax reclaim receivable		1,098,309
Dividends and interest receivable		632,374
Receivable for Series shares sold		16,296
Prepaid expenses		6,105

Total Assets		764,605,158

LIABILITIES
Collateral for securities on loan		18,518,249
Payable for investments purchased		823,971
Management fee payable		456,123
Accrued expenses and other liabilities		187,381
Payable for Series shares reacquired		74,780
Affiliated transfer agent fee payable		926

Total Liabilities		20,061,430

NET ASSETS	$	744,543,728

Net assets were comprised of:
Paid-in capital	$	587,649,712
Retained earnings		156,894,016

Net assets, December 31, 2013	$	744,543,728

Net asset value and redemption price per share, $744,543,728 / 29,886,074 outstanding shares of beneficial interest	$	24.91

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $754,924)	$	14,312,116
Affiliated income from securities loaned, net		32,555
Affiliated dividend income		28,295
Interest		2,478

		14,375,444

EXPENSES
Management fee		5,060,139
Custodian’s fees and expenses		385,000
Shareholders’ reports		120,000
Audit fee		26,000
Trustees’ fees		17,000
Legal fees and expenses		13,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Insurance expenses		8,000
Commitment fee on syndicated credit agreement		3,000
Miscellaneous		42,621

Total expenses		5,686,760
Less: Management fee waiver (Note 3)		(35,273	)

Net expenses		5,651,487

NET INVESTMENT INCOME		8,723,957

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions		65,696,798
Foreign currency transactions		(301,772	)

		65,395,026

Net change in unrealized appreciation (depreciation) on:
Investments		88,703,634
Foreign currencies		75,117

		88,778,751

NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES		154,173,777

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	162,897,734

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income	$	8,723,957		$	10,856,377
Net realized gain on investment and foreign currency transactions		65,395,026			16,017,924
Net change in unrealized appreciation (depreciation) on investments and foreign currencies		88,778,751			68,607,745

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		162,897,734			95,482,046

DISTRIBUTIONS		—			(9,580,386	)

SERIES SHARE TRANSACTIONS:
Series shares sold [782,060 and 392,325 shares, respectively]		17,649,736			7,205,788
Series shares issued in reinvestment of distributions [0 and 555,063 shares, respectively]		—			9,580,386
Series shares repurchased [2,132,268 and 3,015,270 shares, respectively]		(47,193,527	)		(55,676,472	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(29,543,791	)		(38,890,298	)

TOTAL INCREASE IN NET ASSETS		133,353,943			47,011,362
NET ASSETS:
Beginning of year		611,189,785			564,178,423

End of year	$	744,543,728		$	611,189,785

SEE NOTES TO FINANCIAL STATEMENTS.

A99


LONG-TERM INVESTMENTS — 99.4% ASSET-BACKED SECURITIES — 1.7%	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Collateralized Mortgage Obligations — 0.7%
Federal Home Loan Mortgage Corp., REMICS, Series, 2002-2496, Class PM		5.500%		09/15/17		533	$	567,985
Federal Home Loan Mortgage Corp., REMICS, Series, 2002-2501, Class MC		5.500%		09/15/17		185		195,353
Federal Home Loan Mortgage Corp., REMICS, Series, 2002-2513, Class HC		5.000%		10/15/17		1,049		1,110,538
Federal National Mortgage Assoc., REMICS, Series, 2002-57, Class ND		5.500%		09/25/17		216		228,380
Federal National Mortgage Assoc., REMICS, Series, 2002-18, Class PC		5.500%		04/25/17		5		4,545
Merrill Lynch Mortgage Investors, Inc., Series 2003-E, Class A1		0.785%	(a)	10/25/28		63		61,322
Structured Adjustable Rate Mortgage Loan Trust, Series 2004-1, Class 4A3		2.906%	(a)	02/25/34		262		262,341

								2,430,464

Non-Residential Mortgage-Backed Securities — 1.0%
Citibank Credit Card Issuance Trust, Series 2007-A8, Class A8		5.650%		09/20/19		1,500		1,718,018
Small Business Administration Participation Certificates, Series 1996-20J, Class 1		7.200%		10/01/16		458		479,236
Small Business Administration Participation Certificates, Series 1997-20A, Class 1		7.150%		01/01/17		359		376,467
Small Business Administration Participation Certificates, Series 1997-20G, Class 1		6.850%		07/01/17		177		186,251
Small Business Administration Participation Certificates, Series 1998-20I, Class 1		6.000%		09/01/18		478		509,092

								3,269,064

TOTAL ASSET-BACKED SECURITIES (cost $5,275,131)								5,699,528

COMMERCIAL MORTGAGE-BACKED SECURITIES — 17.3%
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD4, Class A3		5.293%		12/11/49		1,800		1,833,205
Commercial Mortgage Pass-Through Certificates, Series 2012-CR5, Class A3		2.540%		12/10/45		1,000		916,381
Credit Suisse Commercial Mortgage Trust, Series 2006-C1, Class AM		5.465%	(a)	02/15/39		200		213,708
CW Capital Cobalt Ltd., Series 2006-C1, Class A4		5.223%		08/15/48		2,000		2,157,984
Federal National Mortgage Assoc., Series 2012-M13, Class A2		2.377%		05/25/22		1,850		1,721,122
Federal National Mortgage Assoc., Series 2012-M2, Class A2		2.717%		02/25/22		200		192,443
FHLMC Multifamily Structured Pass-Through Certificates, Series K003, Class A5		5.085%		03/25/19		250		282,053
FHLMC Multifamily Structured Pass-Through Certificates, Series K004, Class A2		4.186%		08/25/19		4,825		5,240,669
FHLMC Multifamily Structured Pass-Through Certificates, Series K005, Class A2		4.317%		11/25/19		1,100		1,201,071
FHLMC Multifamily Structured Pass-Through Certificates, Series K010, Class A2		4.333%		10/25/20		3,600		3,895,423
FHLMC Multifamily Structured Pass-Through Certificates, Series K013, Class A2		3.974%	(a)	01/25/21		3,525		3,726,394
FHLMC Multifamily Structured Pass-Through Certificates, Series K016, Class A2		2.968%		10/25/21		2,800		2,763,863
FHLMC Multifamily Structured Pass-Through Certificates, Series K020, Class X1, I/O		1.473%	(a)	05/25/22		9,397		883,749
FHLMC Multifamily Structured Pass-Through Certificates, Series K021, Class X1, I/O		1.512%	(a)	06/25/22		9,944		976,084
FHLMC Multifamily Structured Pass-Through Certificates, Series K024, Class A2		2.573%		09/25/22		2,000		1,879,968
FHLMC Multifamily Structured Pass-Through Certificates, Series K026, Class A2		2.510%		11/25/22		3,600		3,355,524
FHLMC Multifamily Structured Pass-Through Certificates, Series K029, Class A2		3.320%	(a)	02/25/23		3,600		3,560,576
FHLMC Multifamily Structured Pass-Through Certificates, Series K033, Class A2(b)		3.060%	(a)	07/25/23		3,600		3,467,120
FHLMC Multifamily Structured Pass-Through Certificates, Series K034, Class A2		3.531%	(a)	07/25/23		3,200		3,200,333
FHLMC Multifamily Structured Pass-Through Certificates, Series K501, Class X1A, I/O		1.751%	(a)	08/25/16		4,088		127,461

SEE NOTES TO FINANCIAL STATEMENTS.

A100


COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)		Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
FHLMC Multifamily Structured Pass-Through Certificates, Series K710, Class X1, I/O			1.783%	(a)	05/25/19		8,446	$	679,697
FHLMC Multifamily Structured Pass-Through Certificates, Series K711, Class X1, I/O			1.710%	(a)	07/25/19		7,970		626,622
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A2			5.381%		03/10/39		1,234		1,261,803
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2007-LD11, Class A3			5.806%	(a)	06/15/49		1,000		1,018,912
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-4, Class A3			5.172%		12/12/49		2,000		2,168,314
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2007-9, Class A2			5.590%		09/12/49		430		430,926
Morgan Stanley Capital I Trust, Series 2005-IQ10, Class A4B			5.284%	(a)	09/15/42		800		842,966
NCUA Guaranteed Notes, Series 2010-C1, Class A2			2.900%		10/29/20		2,600		2,685,693
UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A4			2.792%		12/10/45		1,300		1,211,802
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A5			5.416%	(a)	01/15/45		1,500		1,615,854
Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A5			5.724%	(a)	05/15/43		2,000		2,186,732
Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A3			5.765%	(a)	07/15/45		2,532		2,719,124

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (cost $60,511,992)									59,043,576

CORPORATE BONDS — 1.9%
Asian Development Bank, Sr. Unsec’d. Notes, GMTN			1.750%		09/11/18		3,705		3,705,611
Depfa ACS Bank, Covered Bonds, 144A			5.125%		03/16/37		600		507,750
Westpac Banking Corp., Covered Bonds, 144A (original cost $2,177,297; purchased 11/18/13)(c)			1.850%		11/26/18		2,180		2,140,978

TOTAL CORPORATE BONDS (cost $6,452,476)									6,354,339

MUNICIPAL BONDS — 1.8%
New York City Transitional Finance Authority , Series A1, Sub-Future Tax Secured Revenue			5.000%		11/01/42		620		637,422
New York City Water & Sewer System, Series EE, Revenue Bonds			5.000%		06/15/47		1,600		1,635,904
Ohio State Turnpike Commission, Series A-1, Revenue Bonds			5.000%		02/15/48		825		810,983
Pennsylvania Turnpike Commission, Series C, Revenue Bonds			5.000%		12/01/43		1,055		1,051,708
State of California, GO, Refunding Notes			5.000%		11/01/43		600		609,282
State of Utah, BABs, Series D			4.554%		07/01/24		630		669,236
Utility Debt Securitization Utility Authority, Restructuring Bonds, Series TE			5.000%		12/15/41		650		681,155

TOTAL MUNICIPAL BONDS (cost $6,070,143)									6,095,690

U.S. GOVERNMENT AGENCY OBLIGATIONS — 48.8%
Federal Home Loan Mortgage Corp.(b)			0.750%		01/12/18		1,380		1,343,108
Federal Home Loan Mortgage Corp.(b)			1.375%		05/01/20		2,950		2,765,666
Federal Home Loan Mortgage Corp.			2.354%	(a)	05/01/34		486		515,656
Federal Home Loan Mortgage Corp.(b)			2.375%		01/13/22		17,335		16,571,653
Federal Home Loan Mortgage Corp.(d)			3.000%		TBA		5,500		5,209,531
Federal Home Loan Mortgage Corp.(d)			3.500%		TBA		1,000		1,042,500
Federal Home Loan Mortgage Corp.(d)			3.500%		TBA		3,000		2,976,563
Federal Home Loan Mortgage Corp.(d)			4.000%		TBA		4,500		4,621,289
Federal Home Loan Mortgage Corp.			4.000%		06/01/26-12/01/40		2,174		2,266,802
Federal Home Loan Mortgage Corp.			4.500%		09/01/39		4,330		4,586,029
Federal Home Loan Mortgage Corp.			5.000%		06/01/33-05/01/34		2,199		2,382,866
Federal Home Loan Mortgage Corp.			5.500%		05/01/37-05/01/38		1,538		1,675,979
Federal Home Loan Mortgage Corp.	��		6.000%		09/01/34-08/01/39		1,040		1,151,293
Federal Home Loan Mortgage Corp.			6.500%		09/01/32		125		138,755
Federal National Mortgage Assoc.			0.875%		05/21/18		580		561,041
Federal National Mortgage Assoc.(b)			1.625%		11/27/18		2,145		2,127,106
Federal National Mortgage Assoc.			2.165%	(a)	07/01/33		1,453		1,540,808
Federal National Mortgage Assoc.			2.248%	(a)	06/01/34		400		425,027
Federal National Mortgage Assoc.			2.255%	(a)	04/01/34		197		209,241

SEE NOTES TO FINANCIAL STATEMENTS.

A101


U.S. GOVERNMENT AGENCY OBLIGATIONS (continued)	Interest Rate			Maturity Date	Principal Amount (000)#		Value (Note 2)
Federal National Mortgage Assoc.		2.373%	(a)	04/01/34		348	$	368,001
Federal National Mortgage Assoc.		2.392%	(a)	08/01/33		873		917,430
Federal National Mortgage Assoc.(d)		2.500%		TBA		2,500		2,474,219
Federal National Mortgage Assoc.(d)		3.000%		TBA		13,500		13,776,855
Federal National Mortgage Assoc.(d)		3.000%		TBA		7,000		6,645,078
Federal National Mortgage Assoc.(d)		3.500%		TBA		11,000		11,503,164
Federal National Mortgage Assoc.(d)		3.500%		TBA		2,000		1,986,719
Federal National Mortgage Assoc.		3.500%		06/01/39		624		621,063
Federal National Mortgage Assoc.(d)		4.000%		TBA		12,000		12,352,500
Federal National Mortgage Assoc.(d)		4.500%		TBA		5,000		5,297,852
Federal National Mortgage Assoc.		4.500%		05/01/40		5,416		5,749,814
Federal National Mortgage Assoc.(d)		5.000%		TBA		2,000		2,165,781
Federal National Mortgage Assoc.		5.000%		07/01/18-05/01/36		3,853		4,160,160
Federal National Mortgage Assoc.		5.500%		01/01/17-11/01/35		8,744		9,688,368
Federal National Mortgage Assoc.		6.000%		11/01/14-05/01/38		2,000		2,219,089
Federal National Mortgage Assoc.		6.500%		01/01/15-10/01/37		1,949		2,187,114
Federal National Mortgage Assoc.		7.000%		12/01/31-01/01/36		349		390,614
Federal National Mortgage Assoc.		8.000%		03/01/22-02/01/26		17		16,618
Federal National Mortgage Assoc.		9.000%		02/01/25-04/01/25		40		46,514
Financing Corp. Strips Principal, Series 4-P		1.398%	(e)	10/06/17		2,700		2,543,954
Financing Corp. Strips Principal, Series D-P		2.224%	(e)	09/26/19		1,370		1,182,900
Government National Mortgage Assoc.(d)		3.000%		TBA		3,000		2,897,109
Government National Mortgage Assoc.(d)		3.500%		TBA		5,000		5,043,946
Government National Mortgage Assoc.(d)		3.500%		TBA		3,500		3,527,481
Government National Mortgage Assoc.(d)		4.000%		TBA		4,500		4,678,770
Government National Mortgage Assoc.		4.000%		06/15/40		745		775,438
Government National Mortgage Assoc.(d)		4.500%		TBA		1,500		1,603,711
Government National Mortgage Assoc.(d)		4.500%		TBA		3,000		3,200,859
Government National Mortgage Assoc.		4.500%		02/20/41		1,917		2,057,755
Government National Mortgage Assoc.		5.000%		07/15/33-04/15/34		1,062		1,161,029
Government National Mortgage Assoc.		5.500%		03/15/34-03/15/36		903		999,182
Government National Mortgage Assoc.		6.500%		07/15/32-08/15/32		291		332,884
Government National Mortgage Assoc.		7.000%		03/15/23-08/15/28		630		700,477
Government National Mortgage Assoc.		7.500%		12/15/25-02/15/26		116		130,762
Government National Mortgage Assoc.		8.500%		09/15/24-04/15/25		192		220,813
Hashemite Kingdom of Jordan USAID Bond (Jordan), U.S. Gov’t. Gtd. Notes		2.503%		10/30/20		835		817,836

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $164,765,001)								166,552,772

U.S. TREASURY OBLIGATIONS — 27.9%
U.S. Treasury Bonds		3.750%		11/15/43		860		831,243
U.S. Treasury Inflation Indexed Bonds, TIPS		0.125%		04/15/18		10,695		10,908,259
U.S. Treasury Inflation Indexed Bonds, TIPS		0.375%		07/15/23		2,499		2,410,229
U.S. Treasury Inflation Indexed Bonds, TIPS		0.625%		02/15/43		726		558,509
U.S. Treasury Notes		0.250%		10/31/15		1,535		1,532,842
U.S. Treasury Notes		0.625%		04/30/18		4,160		4,011,800
U.S. Treasury Notes(f)		0.875%		07/31/19		2,610		2,457,683
U.S. Treasury Notes(b)		1.250%		11/30/18		4,050		3,963,306
U.S. Treasury Notes		1.500%		12/31/18		25,730		25,440,538
U.S. Treasury Notes		2.375%		12/31/20		14,060		14,005,082
U.S. Treasury Notes		4.500%		05/15/17		11,525		12,861,185
U.S. Treasury Strips Principal(b)		7.892%	(e)	02/15/43		7,375		2,187,786
U.S. Treasury Strips Coupon(g)		2.450%	(e)	08/15/21		3,370		2,737,040
U.S. Treasury Strips Coupon		2.019%	(e)	02/15/22-05/15/22		11,100		8,726,792
U.S. Treasury Strips Coupon		7.476%	(e)	02/15/42		5,000		1,548,585
U.S. Treasury Strips Principal(b)		7.910%	(e)	08/15/43		3,580		1,038,720

TOTAL U.S. TREASURY OBLIGATIONS (cost $96,574,213)								95,219,599

TOTAL LONG-TERM INVESTMENTS (cost $339,648,956)								338,965,504

SEE NOTES TO FINANCIAL STATEMENTS.

A102


SHORT-TERM INVESTMENTS — 36.7%		Shares		Value (Note 2)
AFFILIATED MUTUAL FUNDS — 36.7%
Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund (cost $54,574,955) (Note 4)(h)			5,541,811	$	51,594,262
Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund (cost $73,670,753; includes $34,046,284 of cash collateral for securities on loan) (Note 4)(h)(i)			73,670,753		73,670,753

TOTAL AFFILIATED MUTUAL FUNDS (cost $128,245,708)					125,265,015


	Counterparty	Notional Amount (000)#
OPTIONS PURCHASED*
Call Options
Interest Rate Swap Options,
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14	Barclays Bank PLC		23,230		234
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14	Citibank NA		28,475		287
Receive a fixed rate of 2.00% and pay a floating rate based on 3-month LIBOR, expiring 04/24/14	Citibank NA		28,475		287

TOTAL OPTIONS PURCHASED (cost $84,901)					808

TOTAL SHORT-TERM INVESTMENTS (cost $128,330,609)					125,265,823

TOTAL INVESTMENTS — 136.1% (cost $467,979,565)					464,231,327
LIABILITIES IN EXCESS OF OTHER ASSETS(j) — (36.1)%					(123,152,219	)

NET ASSETS — 100.0%				$	341,079,108

The following abbreviations are used in the Portfolio descriptions:


144A		Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
BABs		Build America Bonds
FHLMC		Federal Home Loan Mortgage Corp.
GMTN		Global Medium Term Note
GO		General Obligation
I/O		Interest Only
LIBOR		London Interbank Offered Rate
REMICS		Real Estate Mortgage Investment Conduit Security
TBA		To Be Announced
TIPS		Treasury Inflation Protected Securities
USAID		United States Agency for International Development

*	Non-income producing security.

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

(a)	Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.

(b)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $32,915,005; cash collateral of $34,046,284 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments.

(c)	Indicates a restricted security; the aggregated original cost of such security was $2,177,297. The aggregated market value of $2,140,978 is approximately 0.6% of net assets.

(d)	All or a partial principal amount of $89,500,000 represents a to-be announced (“TBA”) securities acquired under mortgage dollar roll agreement.

(e)	Represents zero coupon bond or principal only securities. Rate represents yield to maturity at purchase date.

(f)	Represents security, or a portion thereof, segregated as collateral for swap agreements.

(g)	Represents security, or a portion thereof, segregated as collateral for futures contracts.

(h)	Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Prudential Investment Portfolios 2 — Prudential Core Taxable Money Market Fund and the Prudential Investment Portfolios 2 — Prudential Core Short-Term Bond Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

A103

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

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

Open futures contracts outstanding at December 31, 2013:


Number of Contracts	Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation (Depreciation)
Long Positions:
664	5 Year U.S. Treasury Notes		Mar. 2014	$	79,798,361	$	79,223,500	$	(574,861	)
161	10 Year U.S. Treasury Notes		Mar. 2014		20,031,838		19,810,547		(221,291	)
133	90 Day Euro Dollar		Sept. 2016		32,671,643		32,566,713		(104,930	)
8	U.S. Ultra Bond		Mar. 2014		1,093,761		1,090,000		(3,761	)

									(904,843	)

Short Positions:
133	90 Day Euro Dollar		Sept. 2015		32,975,345		32,960,725		14,620
34	U.S. Long Bond		Mar. 2014		4,417,812		4,362,625		55,187

									69,807

								$	(835,036	)

Interest rate swap agreements outstanding at December 31, 2013:


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Fair Value			Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Counterparty
	Over-the-counter swap agreements:
	880		09/14/16		1.206%	3 month LIBOR(1)	$	(14,154	)	$	—	$	(14,154	)	Deutsche Bank
	1,360		11/30/16		0.945%	3 month LIBOR(1)		(5,294	)		—		(5,294	)	Citigroup Global Markets
	9,525		02/28/17		0.680%	3 month LIBOR(2)		(59,093	)		—		(59,093	)	Citigroup Global Markets
	5,055		08/31/17		0.751%	3 month LIBOR(1)		67,101			—		67,101		Bank of Nova Scotia
	4,700		02/15/19		1.656%	3 month LIBOR(1)		15,546			—		15,546		Citigroup Global Markets
	4,700		02/15/19		1.794%	3 month LIBOR(2)		19,176			—		19,176		JPMorgan Chase
	20,975		01/28/23		1.895%	3 month LIBOR(1)		1,664,602			—		1,664,602		Morgan Stanley

							$	1,687,884		$	—	$	1,687,884


Notional Amount (000)#		Termination Date		Fixed Rate		Floating Rate	Value at Trade Date			Value at December 31, 2013			Unrealized Appreciation (Depreciation)
	Exchange-traded swap agreements:
	8,980		02/28/18		1.649%	3 month LIBOR(1)	$	190		$	(82,309	)	$	(82,499	)
	22,000		02/28/18		1.820%	3 month LIBOR(1)		249			(357,618	)		(357,867	)
	2,145		11/27/18		1.592%	3 month LIBOR(1)		160			16,354			16,194
	6,525		08/31/20		2.085%	3 month LIBOR(1)		189			120,646			120,457
	7,875		08/31/20		2.219%	3 month LIBOR(1)		197			78,527			78,330
	6,215		08/31/20		2.220%	3 month LIBOR(1)		187			61,592			61,405
	1,435		08/31/20		2.490%	3 month LIBOR(1)		159			(10,464	)		(10,623	)
	14,000		08/31/20		2.655%	3 month LIBOR(1)		234			(248,278	)		(248,512	)
	5,100		01/13/22		2.351%	3 month LIBOR(1)		181			146,057			145,876
	1,585		01/13/22		2.457%	3 month LIBOR(1)		160			32,784			32,624
	4,850		01/13/22		2.480%	3 month LIBOR(1)		179			91,963			91,784
	1,710		01/22/22		3.497%	3 month LIBOR(1)		160			35,049			34,889
	1,410		01/22/22		2.785%	3 month LIBOR(1)		158			(4,775	)		(4,933	)
	825		01/31/22		2.505%	3 month LIBOR(1)		155			14,762			14,607
	12,550		08/05/23		4.210%	3 month LIBOR(2)		—			(174,405	)		(174,405	)
	5,020		08/06/23		4.220%	3 month LIBOR(2)		(173	)		(67,698	)		(67,525	)
	6,070		10/28/23		4.029%	3 month LIBOR(2)		177			(142,660	)		(142,837	)
	8,720		12/20/23		2.932%	3 month LIBOR(1)		220			121,373			121,153

							$	2,782		$	(369,100	)	$	(371,882	)

(1)	The Portfolio pays the fixed rate and receives the floating rate.

(2)	The Portfolio pays the floating rate and receives the fixed rate.

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

SEE NOTES TO FINANCIAL STATEMENTS.

A104

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 generally in active markets for identical securities.

Level 2—

Level 3—

significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1			Level 2		Level 3
Investments in Securities
Asset-Backed Securities
Collateralized Mortgage Obligations	$	—		$	2,430,464	$	—
Non-Residential Mortgage-Backed Securities		—			3,269,064		—
Commercial Mortgage-Backed Securities		—			59,043,576		—
Corporate Bonds		—			6,354,339		—
Municipal Bonds		—			6,095,690		—
U.S. Government Agency Obligations		—			166,552,772		—
U.S. Treasury Obligations		—			95,219,599		—
Affiliated Mutual Funds		125,265,015			—		—
Options Purchased		—			808		—
Other Financial Instruments*
Futures Contracts		(835,036	)		—		—
Interest Rate Swaps		(371,882	)		1,687,884		—

Total	$	124,058,097		$	340,654,196	$	—

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

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


U.S. Government Agency Obligations	48.8	%
Affiliated Mutual Funds (including 10.0% of collateral received for securities on loan)	36.7
U.S. Treasury Obligations	27.9
Commercial Mortgage-Backed Securities	17.3
Corporate Bonds	1.9
Municipal Bonds	1.8


Non-Residential Mortgage-Backed Securities	1.0	%
Collateralized Mortgage Obligations	0.7

	136.1
Liabilities in excess of other assets	(36.1	)

	100.0	%

The Portfolio invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is 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, 2013 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	$	787,126	*	Due from broker — variation margin	$	1,994,044	*
Interest rate contracts	Unrealized appreciation on swap agreements		1,766,425		Unrealized depreciation on swap agreements		78,541
Interest rate contracts	Unaffiliated investments		808		—		—

Total		$	2,554,359			$	2,072,585

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

SEE NOTES TO FINANCIAL STATEMENTS.

A105

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Options Purchased			Options Written		Futures		Swaps		Total
Interest rate contracts	$	(191,609	)	$	19,678	$	1,092,082	$	267,504	$	1,187,655



Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments, carried at fair value	Options Purchased			Futures			Swaps		Total
Interest rate contracts	$	(84,093	)	$	(1,180,447	)	$	1,739,529	$	474,989

For the year ended December 31, 2013, the Portfolio’s average volume of derivative activities is as follows:


Options Purchased (Cost)	Options Written (Premium Received)	Futures Long Position (Value at Trade Date)
$87,039	$8,266	$64,953,777


Futures Short Position (Value at Trade Date)		Interest Rate Swaps (Notional Amount in USD (000))
$26,427,336		$140,767

Offsetting of financial instrument and derivative assets and liabilities:


Description	Gross Amounts Recognized			Gross Amounts not subject to netting			Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	32,915,005		$	—		$	—	$	32,915,005
Exchange-traded and cleared derivatives		124,926			—			—		124,926
Over-the-counter derivatives*		1,767,233			(808	)		—		1,766,425

										34,806,356

Liabilities:
Exchange-traded and cleared derivatives		—			—			—		—
Over-the-counter derivatives*		(78,541	)		—			—		(78,541	)

										(78,541	)

Collateral Amounts Pledged/(Received):
Securities on loan										(32,915,005	)
Exchange-traded and cleared derivatives										—
Over-the-counter derivatives										(1,417,293	)

Net Amount									$	395,517

SEE NOTES TO FINANCIAL STATEMENTS.

A106


		*GOVERNMENT INCOME PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $32,915,005:
Unaffiliated investments (cost $339,733,857)	$	338,966,312
Affiliated investments (cost $128,245,708)		125,265,015
Cash		3,262
Receivable for investments sold		56,164,032
Unrealized appreciation on over-the-counter swap agreements		1,766,425
Dividends and interest receivable		1,076,016
Due from broker—variation margin		124,926
Receivable for Series shares sold		9,638
Prepaid expenses		3,361

Total Assets		523,378,987

LIABILITIES
Payable for investments purchased		147,819,654
Collateral for securities on loan		34,046,284
Accrued expenses and other liabilities		132,487
Management fee payable		116,863
Payable for Series shares reacquired		105,083
Unrealized depreciation on over-the-counter swap agreements		78,541
Affiliated transfer agent fee payable		926
Deferred trustees’ fees		41

Total Liabilities		182,299,879

NET ASSETS	$	341,079,108

Net assets were comprised of:
Paid-in capital	$	346,347,355
Retained earnings		(5,268,247	)

Net assets, December 31, 2013	$	341,079,108

Net asset value and redemption price per share, $341,079,108 / 30,179,139 outstanding shares of beneficial interest	$	11.30

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INCOME
Interest Income (net of foreign withholding taxes of $246)	$	7,333,126
Affiliated dividend income		776,394
Affiliated income from securities loaned, net		60,720

		8,170,240

EXPENSES
Management fee		1,443,755
Shareholders’ reports		142,000
Custodian’s fees and expenses		88,000
Audit fee		30,000
Trustees’ fees		14,000
Legal fees and expenses		11,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		11,000
Insurance expenses		5,000
Commitment fee on syndicated credit agreement		1,000
Miscellaneous		11,113

Total expenses		1,756,868

NET INVESTMENT INCOME		6,413,372

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions		(3,778,983	)
Futures transactions		1,092,082
Swap agreement transactions		267,504
Options written transactions		19,678

		(2,399,719	)

Net change in unrealized appreciation (depreciation) on:
Investments (including affiliated: $437,794)		(12,979,924	)
Futures		(1,180,447	)
Swap agreements		1,739,529

		(12,420,842	)

NET LOSS ON INVESTMENTS		(14,820,561	)

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(8,407,189	)

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	6,413,372		$	7,739,864
Net realized gain (loss) on investment transactions		(2,399,719	)		11,047,414
Net change in unrealized appreciation (depreciation) on investments		(12,420,842	)		(4,769,310	)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(8,407,189	)		14,017,968

DISTRIBUTIONS		(17,437,795	)		(20,654,654	)

SERIES SHARE TRANSACTIONS:
Series shares sold [353,311 and 775,380 shares, respectively]		4,141,803			9,542,642
Series shares issued in reinvestment of distributions [1,506,594 and 1,707,009 shares, respectively]		17,437,795			20,654,654
Series shares repurchased [3,202,620 and 4,651,275 shares, respectively]		(37,560,842	)		(57,309,200	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(15,981,244	)		(27,111,904	)

TOTAL DECREASE IN NET ASSETS		(41,826,228	)		(33,748,590	)
NET ASSETS:
Beginning of year		382,905,336			416,653,926

End of year	$	341,079,108		$	382,905,336

SEE NOTES TO FINANCIAL STATEMENTS.

A107


LONG-TERM INVESTMENTS — 97.6%
COMMON STOCKS	Shares		Value (Note 2)
Aerospace & Defense — 2.7%
Boeing Co. (The)		118,936	$	16,233,575
General Dynamics Corp.		56,500		5,398,575
Honeywell International, Inc.		134,750		12,312,108
L-3 Communications Holdings, Inc.		15,300		1,634,958
Lockheed Martin Corp.		46,698		6,942,125
Northrop Grumman Corp.		38,926		4,461,309
Precision Castparts Corp.		25,100		6,759,430
Raytheon Co.		54,718		4,962,923
Rockwell Collins, Inc.		23,300		1,722,336
Textron, Inc.		44,900		1,650,524
United Technologies Corp.		144,900		16,489,620

				78,567,483

Air Freight & Logistics — 0.8%
C.H. Robinson Worldwide, Inc.		26,100		1,522,674
Expeditors International of Washington, Inc.		35,600		1,575,300
FedEx Corp.		51,540		7,409,906
United Parcel Service, Inc. (Class B Stock)		124,400		13,071,952

				23,579,832

Airlines — 0.2%
Delta Air Lines, Inc.		137,500		3,777,125
Southwest Airlines Co.		123,437		2,325,553

				6,102,678

Auto Components — 0.4%
BorgWarner, Inc.		37,400		2,091,034
Delphi Automotive PLC		48,100		2,892,253
Goodyear Tire & Rubber Co. (The)		38,600		920,610
Johnson Controls, Inc.		120,000		6,156,000

				12,059,897

Automobiles — 0.7%
Ford Motor Co.		686,559		10,593,605
General Motors Co.*		181,600		7,421,992
Harley-Davidson, Inc.		36,000		2,492,640

				20,508,237

Beverages — 2.1%
Beam, Inc.		24,900		1,694,694
Brown-Forman Corp. (Class B Stock)		26,350		1,991,270
Coca-Cola Co. (The)		649,250		26,820,518
Coca-Cola Enterprises, Inc.		43,800		1,932,894
Constellation Brands, Inc. (Class A Stock)*		26,900		1,893,222
Dr. Pepper Snapple Group, Inc.		36,800		1,792,896
Molson Coors Brewing Co. (Class B Stock)		27,500		1,544,125
Monster Beverage Corp.*		23,600		1,599,372
PepsiCo, Inc.		265,214		21,996,849

				61,265,840

Biotechnology — 2.4%
Alexion Pharmaceuticals, Inc.*		33,900		4,510,734
Amgen, Inc.		129,794		14,817,283
Biogen Idec, Inc.*		41,125		11,504,719
Celgene Corp.*		71,000		11,996,160
Gilead Sciences, Inc.*		263,600		19,809,540


COMMON STOCKS (continued)	Shares		Value (Note 2)
Biotechnology (continued)
Regeneron Pharmaceuticals, Inc.*(a)		12,900	$	3,550,596
Vertex Pharmaceuticals, Inc.*		37,100		2,756,530

				68,945,562

Building Products — 0.1%
Allegion PLC*		15,433		681,999
Masco Corp.		54,800		1,247,796

				1,929,795

Capital Markets — 2.2%
Ameriprise Financial, Inc.		33,400		3,842,670
Bank of New York Mellon Corp. (The)		197,889		6,914,242
BlackRock, Inc.		22,000		6,962,340
Charles Schwab Corp. (The)		192,300		4,999,800
ETRADE Financial Corp.		38,710		760,264
Franklin Resources, Inc.		71,300		4,116,149
Goldman Sachs Group, Inc. (The)		71,700		12,709,542
Invesco Ltd.		79,300		2,886,520
Legg Mason, Inc.(a)		19,800		860,904
Morgan Stanley		240,010		7,526,714
Northern Trust Corp.		38,600		2,388,954
State Street Corp.		75,325		5,528,102
T. Rowe Price Group, Inc.		44,200		3,702,634

				63,198,835

Chemicals — 2.5%
Air Products & Chemicals, Inc.		36,300		4,057,614
Airgas, Inc.		10,300		1,152,055
CF Industries Holdings, Inc.		10,000		2,330,400
Dow Chemical Co. (The)		205,211		9,111,368
E.I. du Pont de Nemours & Co.		159,191		10,342,639
Eastman Chemical Co.		27,100		2,186,970
Ecolab, Inc.		44,600		4,650,442
FMC Corp.		21,200		1,599,752
International Flavors & Fragrances, Inc.		15,300		1,315,494
LyondellBasell Industries NV (Class A Stock)		75,200		6,037,056
Monsanto Co.		90,896		10,593,929
Mosaic Co. (The)		52,500		2,481,675
PPG Industries, Inc.		24,700		4,684,602
Praxair, Inc.		50,900		6,618,527
Sherwin-Williams Co. (The)		14,800		2,715,800
Sigma-Aldrich Corp.		20,700		1,946,007

				71,824,330

Commercial Banks — 2.7%
BB&T Corp.		121,500		4,534,380
Comerica, Inc.		29,650		1,409,561
Fifth Third Bancorp		153,949		3,237,547
Huntington Bancshares, Inc.		144,675		1,396,114
KeyCorp		159,900		2,145,858
M&T Bank Corp.		21,600		2,514,672
PNC Financial Services Group, Inc.		90,293		7,004,931
Regions Financial Corp.		249,312		2,465,696
SunTrust Banks, Inc.		94,600		3,482,226
US Bancorp		315,181		12,733,312
Wells Fargo & Co.		820,736		37,261,414
Zions Bancorporation(a)		30,000		898,800

				79,084,511

SEE NOTES TO FINANCIAL STATEMENTS.

A108


COMMON STOCKS (continued)	Shares		Value (Note 2)
Commercial Services & Supplies — 0.5%
ADT Corp. (The)(a)		33,700	$	1,363,839
Cintas Corp.(a)		17,200		1,024,948
Iron Mountain, Inc.		31,817		965,646
Pitney Bowes, Inc.(a)		34,700		808,510
Republic Services, Inc.		42,635		1,415,482
Stericycle, Inc.*		13,900		1,614,763
Tyco International Ltd.		81,800		3,357,072
Waste Management, Inc.		75,830		3,402,492

				13,952,752

Communications Equipment — 1.7%
Cisco Systems, Inc.		916,475		20,574,864
F5 Networks, Inc.*(a)		14,500		1,317,470
Harris Corp.		19,500		1,361,295
Juniper Networks, Inc.*		89,600		2,022,272
Motorola Solutions, Inc.		36,327		2,452,073
QUALCOMM, Inc.		290,550		21,573,338

				49,301,312

Computers & Peripherals — 4.0%
Apple, Inc.		154,015		86,419,357
EMC Corp.		356,374		8,962,806
Hewlett-Packard Co.		324,866		9,089,751
NetApp, Inc.		59,900		2,464,286
SanDisk Corp.(a)		39,700		2,800,438
Seagate Technology PLC		54,800		3,077,568
Western Digital Corp.		33,900		2,844,210

				115,658,416

Construction & Engineering — 0.2%
Fluor Corp.		28,200		2,264,178
Jacobs Engineering Group, Inc.*		22,200		1,398,378
Quanta Services, Inc.*		33,000		1,041,480

				4,704,036

Construction Materials
Vulcan Materials Co.		22,300		1,325,066

Consumer Finance — 1.0%
American Express Co.		157,300		14,271,829
Capital One Financial Corp.		100,269		7,681,608
Discover Financial Services		83,505		4,672,105
SLM Corp.		77,000		2,023,560

				28,649,102

Containers & Packaging — 0.2%
Avery Dennison Corp.		16,900		848,211
Ball Corp.		24,300		1,255,338
Bemis Co., Inc.		17,900		733,184
MeadWestvaco Corp.		31,689		1,170,275
Owens-Illinois, Inc.*		30,400		1,087,712
Sealed Air Corp.		31,620		1,076,661

				6,171,381

Distributors — 0.1%
Genuine Parts Co.		24,825		2,065,192

Diversified Consumer Services — 0.1%
Graham Holdings Co. (Class B Stock)		700		464,324
H&R Block, Inc.		47,600		1,382,304

				1,846,628


COMMON STOCKS (continued)	Shares		Value (Note 2)
Diversified Financial Services — 5.1%
Bank of America Corp.		1,825,182	$	28,418,084
Berkshire Hathaway, Inc. (Class B Stock)*		306,400		36,326,784
Citigroup, Inc.		520,022		27,098,346
CME Group, Inc.		54,800		4,299,608
IntercontinentalExchange, Inc.		19,399		4,363,132
JPMorgan Chase & Co.		644,045		37,663,752
Leucadia National Corp.		45,200		1,280,968
McGraw-Hill Financial, Inc.		47,800		3,737,960
Moody’s Corp.		30,020		2,355,669
NASDAQ OMX Group, Inc. (The)		20,700		823,860

				146,368,163

Diversified Telecommunication Services — 2.1%
AT&T, Inc.		903,211		31,756,899
CenturyLink, Inc.		106,485		3,391,547
Frontier Communications Corp.		164,916		766,859
Verizon Communications, Inc.		491,738		24,164,005
Windstream Holdings, Inc.(a)		93,065		742,659

				60,821,969

Electric Utilities — 1.6%
American Electric Power Co., Inc.		83,040		3,881,290
Duke Energy Corp.		121,548		8,388,027
Edison International		58,500		2,708,550
Entergy Corp.(a)		31,700		2,005,659
Exelon Corp.(a)		149,373		4,091,326
FirstEnergy Corp.		74,180		2,446,456
NextEra Energy, Inc.		71,175		6,094,004
Northeast Utilities		56,600		2,399,274
Pepco Holdings, Inc.		35,700		682,941
Pinnacle West Capital Corp.		18,500		979,020
PPL Corp.		105,100		3,162,459
Southern Co. (The)		152,100		6,252,831
Xcel Energy, Inc.		86,495		2,416,670

				45,508,507

Electrical Equipment — 0.8%
AMETEK, Inc.		36,600		1,927,722
Eaton Corp., PLC		79,761		6,071,407
Emerson Electric Co.		120,600		8,463,708
Rockwell Automation, Inc.		24,400		2,883,104
Roper Industries, Inc.		17,100		2,371,428

				21,717,369

Electronic Equipment, Instruments & Components — 0.4%
Amphenol Corp. (Class A Stock)		27,700		2,470,286
Corning, Inc.		247,600		4,412,232
FLIR Systems, Inc.		23,500		707,350
Jabil Circuit, Inc.		34,100		594,704
TE Connectivity Ltd.		70,500		3,885,255

				12,069,827

Energy Equipment & Services — 1.8%
Baker Hughes, Inc.		77,948		4,307,406
Cameron International Corp.*		40,800		2,428,824
Diamond Offshore Drilling, Inc.		12,500		711,500
Ensco PLC (Class A Stock)		39,700		2,270,046
FMC Technologies, Inc.*		38,300		1,999,643
Halliburton Co.		143,700		7,292,775

SEE NOTES TO FINANCIAL STATEMENTS.

A109


COMMON STOCKS (continued)	Shares		Value (Note 2)
Energy Equipment & Services (continued)
Helmerich & Payne, Inc.		18,400	$	1,547,072
Nabors Industries Ltd.		45,700		776,443
National Oilwell Varco, Inc.		74,000		5,885,220
Noble Corp. PLC		45,300		1,697,391
Rowan Cos. PLC (Class A Stock)*		20,500		724,880
Schlumberger Ltd.		225,572		20,326,293
Transocean Ltd.(a)		53,400		2,639,028

				52,606,521

Food & Staples Retailing — 2.3%
Costco Wholesale Corp.		75,722		9,011,675
CVS Caremark Corp.		205,538		14,710,355
Kroger Co. (The)		91,000		3,597,230
Safeway, Inc.		40,200		1,309,314
Sysco Corp.		101,500		3,664,150
Wal-Mart Stores, Inc.		276,900		21,789,261
Walgreen Co.		149,000		8,558,560
Whole Foods Market, Inc.		59,800		3,458,234

				66,098,779

Food Products — 1.5%
Archer-Daniels-Midland Co.		115,138		4,996,989
Campbell Soup Co.(a)		30,100		1,302,728
ConAgra Foods, Inc.		70,300		2,369,110
General Mills, Inc.		109,400		5,460,154
Hershey Co. (The)		25,700		2,498,811
Hormel Foods Corp.		23,600		1,066,012
J.M. Smucker Co. (The)		18,200		1,885,884
Kellogg Co.		42,900		2,619,903
Kraft Foods Group, Inc.		102,037		5,501,835
McCormick & Co., Inc.		23,100		1,592,052
Mead Johnson Nutrition Co.		34,993		2,931,014
Mondelez International, Inc. (Class A Stock)		302,811		10,689,228
Tyson Foods, Inc. (Class A Stock)		50,100		1,676,346

				44,590,066

Gas Utilities — 0.1%
AGL Resources, Inc.		19,837		936,902
ONEOK, Inc.		36,240		2,253,403

				3,190,305

Health Care Equipment & Supplies — 2.0%
Abbott Laboratories		266,350		10,209,196
Baxter International, Inc.		93,200		6,482,060
Becton Dickinson and Co.		33,800		3,734,562
Boston Scientific Corp.*		225,299		2,708,094
C.R. Bard, Inc.		13,000		1,741,220
CareFusion Corp.*		35,837		1,427,029
Covidien PLC		79,000		5,379,900
DENTSPLY International, Inc.		22,500		1,090,800
Edwards Lifesciences Corp.*		20,200		1,328,352
Intuitive Surgical, Inc.*		6,550		2,515,724
Medtronic, Inc.		172,800		9,916,992
St. Jude Medical, Inc.		50,300		3,116,085
Stryker Corp.		49,600		3,726,944
Varian Medical Systems, Inc.*		19,300		1,499,417
Zimmer Holdings, Inc.		29,486		2,747,800

				57,624,175


COMMON STOCKS (continued)	Shares		Value (Note 2)
Health Care Providers & Services — 2.0%
Aetna, Inc.		62,257	$	4,270,208
AmerisourceBergen Corp.		39,900		2,805,369
Cardinal Health, Inc.		58,975		3,940,120
CIGNA Corp.		48,400		4,234,032
DaVita HealthCare Partners, Inc.*		30,600		1,939,122
Express Scripts Holding Co.*		137,826		9,680,898
Humana, Inc.		26,300		2,714,686
Laboratory Corp. of America Holdings*(a)		15,500		1,416,235
McKesson Corp.		38,807		6,263,450
Patterson Cos., Inc.		15,900		655,080
Quest Diagnostics, Inc.(a)		26,300		1,408,102
Tenet Healthcare Corp.*(a)		17,800		749,736
UnitedHealth Group, Inc.		171,500		12,913,950
WellPoint, Inc.		51,500		4,758,085

				57,749,073

Health Care Technology — 0.1%
Cerner Corp.*		49,800		2,775,852

Hotels, Restaurants & Leisure — 1.7%
Carnival Corp.		76,100		3,056,937
Chipotle Mexican Grill, Inc.*		5,300		2,823,734
Darden Restaurants, Inc.(a)		23,350		1,269,540
International Game Technology		50,300		913,448
Marriott International, Inc. (Class A Stock)		39,303		1,939,996
McDonald’s Corp.		171,000		16,592,130
Starbucks Corp.		130,000		10,190,700
Starwood Hotels & Resorts Worldwide, Inc.		32,800		2,605,960
Wyndham Worldwide Corp.		22,863		1,684,774
Wynn Resorts Ltd.(a)		12,500		2,427,625
Yum! Brands, Inc.		74,600		5,640,506

				49,145,350

Household Durables — 0.4%
D.R. Horton, Inc.*(a)		45,200		1,008,864
Garmin Ltd.(a)		16,200		748,764
Harman International Industries, Inc.		13,200		1,080,420
Leggett & Platt, Inc.(a)		26,200		810,628
Lennar Corp. (Class A Stock)(a)		24,300		961,308
Mohawk Industries, Inc.*		6,900		1,027,410
Newell Rubbermaid, Inc.		51,249		1,660,980
PulteGroup, Inc.		53,685		1,093,563
Whirlpool Corp.		13,907		2,181,452

				10,573,389

Household Products — 2.0%
Clorox Co. (The)(a)		22,500		2,087,100
Colgate-Palmolive Co.		151,100		9,853,231
Kimberly-Clark Corp.		66,488		6,945,336
Procter & Gamble Co. (The)		465,606		37,904,984

				56,790,651

Independent Power Producers & Energy Traders — 0.1%
AES Corp.		111,800		1,622,218
NRG Energy, Inc.		49,500		1,421,640

				3,043,858

SEE NOTES TO FINANCIAL STATEMENTS.

A110


COMMON STOCKS (continued)	Shares		Value (Note 2)
Industrial Conglomerates — 2.5%
3M Co.		109,700	$	15,385,425
Danaher Corp.		102,200		7,889,840
General Electric Co.		1,729,775		48,485,593

				71,760,858

Insurance — 2.9%
ACE Ltd.		62,100		6,429,213
Aflac, Inc.		85,000		5,678,000
Allstate Corp. (The)		82,788		4,515,258
American International Group, Inc.		258,429		13,192,800
Aon PLC		54,525		4,574,102
Assurant, Inc.		19,400		1,287,578
Chubb Corp. (The)		46,100		4,454,643
Cincinnati Financial Corp.(a)		30,128		1,577,803
Genworth Financial, Inc. (Class A Stock)*		103,200		1,602,696
Hartford Financial Services Group, Inc. (The)		80,100		2,902,023
Lincoln National Corp.		54,363		2,806,218
Loews Corp.		58,826		2,837,766
Marsh & McLennan Cos., Inc.		103,400		5,000,424
MetLife, Inc.		193,400		10,428,128
Principal Financial Group, Inc.		52,700		2,598,637
Progressive Corp. (The)		109,000		2,972,430
Torchmark Corp.		20,750		1,621,613
Travelers Cos., Inc. (The)		67,498		6,111,269
Unum Group		54,956		1,927,856
XL Group PLC		59,500		1,894,480

				84,412,937

Internet & Catalog Retail — 1.4%
Amazon.com, Inc.*		63,200		25,203,528
Expedia, Inc.		16,700		1,163,322
Netflix, Inc.*		9,400		3,460,798
priceline.com, Inc.*		8,800		10,229,120
TripAdvisor, Inc.*(a)		15,700		1,300,431

				41,357,199

Internet Software & Services — 3.1%
Akamai Technologies, Inc.*		30,400		1,434,272
eBay, Inc.*		200,100		10,983,489
Facebook, Inc. (Class A Stock)*		271,200		14,823,792
Google, Inc. (Class A Stock)*		48,035		53,833,305
VeriSign, Inc.*(a)		22,700		1,357,006
Yahoo!, Inc.*		163,900		6,628,116

				89,059,980

IT Services — 3.5%
Accenture PLC (Class A Stock)		108,500		8,920,870
Alliance Data Systems Corp.*(a)		6,100		1,603,873
Automatic Data Processing, Inc.		80,700		6,521,367
Cognizant Technology Solutions Corp. (Class A Stock)*		51,800		5,230,764
Computer Sciences Corp.		26,300		1,469,644
Fidelity National Information Services, Inc.		47,100		2,528,328
Fiserv, Inc.*		43,600		2,574,580
International Business Machines Corp.		174,525		32,735,654


COMMON STOCKS (continued)	Shares		Value (Note 2)
IT Services (continued)
MasterCard, Inc. (Class A Stock)		17,700	$	14,787,642
Paychex, Inc.		54,850		2,497,321
Teradata Corp.*(a)		29,600		1,346,504
Total System Services, Inc.		29,993		998,167
Visa, Inc. (Class A Stock)		86,300		19,217,284
Western Union Co. (The)		99,104		1,709,544

				102,141,542

Leisure Equipment & Products — 0.1%
Hasbro, Inc.(a)		19,050		1,047,941
Mattel, Inc.		57,681		2,744,462

				3,792,403

Life Sciences Tools & Services — 0.5%
Agilent Technologies, Inc.		56,482		3,230,206
Life Technologies Corp.*		30,630		2,321,754
PerkinElmer, Inc.		20,000		824,600
Thermo Fisher Scientific, Inc.(a)		63,600		7,081,860
Waters Corp.*		14,500		1,450,000

				14,908,420

Machinery — 1.7%
Caterpillar, Inc.		107,800		9,789,318
Cummins, Inc.		30,500		4,299,585
Deere & Co.		64,450		5,886,219
Dover Corp.		30,500		2,944,470
Flowserve Corp.		25,200		1,986,516
Illinois Tool Works, Inc.		69,475		5,841,458
Ingersoll-Rand PLC		46,300		2,852,080
Joy Global, Inc.(a)		16,600		970,934
PACCAR, Inc.		61,128		3,616,944
Pall Corp.		20,100		1,715,535
Parker Hannifin Corp.		26,087		3,355,832
Pentair Ltd.		34,107		2,649,091
Snap-on, Inc.		11,000		1,204,720
Stanley Black & Decker, Inc.		26,835		2,165,316
Xylem, Inc.		27,600		954,960

				50,232,978

Media — 3.6%
Cablevision Systems Corp. (Class A Stock)(a)		33,800		606,034
CBS Corp. (Class B Stock)		93,468		5,957,650
Comcast Corp. (Class A Stock)		449,946		23,381,444
DIRECTV*		86,325		5,964,194
Discovery Communications, Inc. (Class A Stock)*(a)		37,100		3,354,582
Gannett Co., Inc.		39,200		1,159,536
Interpublic Group of Cos., Inc. (The)		76,362		1,351,607
News Corp. (Class A Stock)*		88,125		1,588,013
Omnicom Group, Inc.		45,300		3,368,961
Scripps Networks Interactive, Inc. (Class A Stock)		15,600		1,347,996
Time Warner Cable, Inc.		49,326		6,683,673
Time Warner, Inc.		157,315		10,968,002
Twenty-First Century Fox, Inc. (Class A Stock)		337,900		11,887,322
Viacom, Inc. (Class B Stock)		70,743		6,178,694
Walt Disney Co. (The)		280,576		21,436,006

				105,233,714

SEE NOTES TO FINANCIAL STATEMENTS.

A111


COMMON STOCKS (continued)	Shares		Value (Note 2)
Metals & Mining — 0.5%
Alcoa, Inc.(a)		182,276	$	1,937,594
Allegheny Technologies, Inc.		15,440		550,127
Cliffs Natural Resources, Inc.(a)		26,000		681,460
Freeport-McMoRan Copper & Gold, Inc.		177,412		6,695,529
Newmont Mining Corp.		89,403		2,058,951
Nucor Corp.		56,300		3,005,294
United States Steel Corp.(a)		19,740		582,330

				15,511,285

Multiline Retail — 0.7%
Dollar General Corp.*		48,700		2,937,584
Dollar Tree, Inc.*(a)		37,100		2,093,182
Family Dollar Stores, Inc.		16,400		1,065,508
Kohl’s Corp.		35,900		2,037,325
Macy’s, Inc.		64,520		3,445,368
Nordstrom, Inc.		24,300		1,501,740
Target Corp.		108,468		6,862,770

				19,943,477

Multi-Utilities — 1.1%
Ameren Corp.		42,000		1,518,720
CenterPoint Energy, Inc.		73,110		1,694,690
CMS Energy Corp.		45,800		1,226,066
Consolidated Edison, Inc.		52,400		2,896,672
Dominion Resources, Inc.		99,184		6,416,213
DTE Energy Co.		29,600		1,965,144
Integrys Energy Group, Inc.		12,050		655,641
NiSource, Inc.		49,600		1,630,848
PG&E Corp.		76,900		3,097,532
Public Service Enterprise Group, Inc.		89,200		2,857,968
SCANA Corp.		22,200		1,041,846
Sempra Energy		39,654		3,559,343
TECO Energy, Inc.(a)		34,200		589,608
Wisconsin Energy Corp.(a)		39,600		1,637,064

				30,787,355

Office Electronics — 0.1%
Xerox Corp.		206,511		2,513,239

Oil, Gas & Consumable Fuels — 8.2%
Anadarko Petroleum Corp.		86,426		6,855,310
Apache Corp.		69,250		5,951,345
Cabot Oil & Gas Corp.		73,600		2,852,736
Chesapeake Energy Corp.(a)		89,400		2,426,316
Chevron Corp.		328,642		41,050,672
ConocoPhillips		209,229		14,782,029
CONSOL Energy, Inc.(a)		35,600		1,354,224
Denbury Resources, Inc.*		66,900		1,099,167
Devon Energy Corp.		66,700		4,126,729
EOG Resources, Inc.		47,200		7,922,048
EQT Corp.		26,400		2,370,192
Exxon Mobil Corp.		746,504		75,546,205
Hess Corp.		47,875		3,973,625
Kinder Morgan, Inc.		109,943		3,957,948
Marathon Oil Corp.		122,594		4,327,568
Marathon Petroleum Corp.		51,647		4,737,579
Murphy Oil Corp.		30,800		1,998,304
Newfield Exploration Co.*		23,700		583,731


COMMON STOCKS (continued)	Shares		Value (Note 2)
Oil, Gas & Consumable Fuels (continued)
Noble Energy, Inc.		62,800	$	4,277,308
Occidental Petroleum Corp.		137,400		13,066,740
Peabody Energy Corp.		47,100		919,863
Phillips 66		104,164		8,034,169
Pioneer Natural Resources Co.		22,400		4,123,168
QEP Resources, Inc.		28,200		864,330
Range Resources Corp.		27,900		2,352,249
Southwestern Energy Co.*		62,500		2,458,125
Spectra Energy Corp.		116,742		4,158,350
Tesoro Corp.		24,100		1,409,850
Valero Energy Corp.		91,600		4,616,640
Williams Cos., Inc. (The)		116,500		4,493,405
WPX Energy, Inc.*(a)		36,133		736,397

				237,426,322

Paper & Forest Products — 0.1%
International Paper Co.		75,567		3,705,050

Personal Products — 0.1%
Avon Products, Inc.		76,700		1,320,774
Estee Lauder Cos., Inc. (The) (Class A Stock)		40,500		3,050,460

				4,371,234

Pharmaceuticals — 5.7%
AbbVie, Inc.		274,500		14,496,345
Actavis, Inc.*		28,400		4,771,200
Allergan, Inc.		49,650		5,515,122
Bristol-Myers Squibb Co.		285,140		15,155,191
Eli Lilly & Co.		171,300		8,736,300
Forest Laboratories, Inc.*		40,900		2,455,227
Hospira, Inc.*(a)		28,920		1,193,818
Johnson & Johnson		484,996		44,420,784
Merck & Co., Inc.		501,504		25,100,267
Mylan, Inc.*		68,500		2,972,900
Perrigo Co. PLC		19,100		2,931,086
Pfizer, Inc.		1,113,623		34,110,272
Zoetis, Inc.		79,800		2,608,662

				164,467,174

Professional Services — 0.2%
Dun & Bradstreet Corp. (The)		7,200		883,800
Equifax, Inc.		21,500		1,485,435
Nielsen Holdings NV		36,300		1,665,807
Robert Half International, Inc.		23,100		969,969

				5,005,011

Real Estate Investment Trusts (REITs) — 1.8%
American Tower Corp.		71,500		5,707,130
Apartment Investment & Management Co. (Class A Stock)		24,074		623,757
AvalonBay Communities, Inc.		19,418		2,295,790
Boston Properties, Inc.		26,200		2,629,694
Equity Residential(a)		55,600		2,883,972
General Growth Properties, Inc.(a)		81,000		1,625,670
HCP, Inc.		78,700		2,858,384
Health Care REIT, Inc.(a)		46,300		2,480,291
Host Hotels & Resorts, Inc.(a)		123,726		2,405,233
Kimco Realty Corp.		76,400		1,508,900
Macerich Co. (The)		20,200		1,189,578

SEE NOTES TO FINANCIAL STATEMENTS.

A112


COMMON STOCKS (continued)	Shares		Value (Note 2)
Real Estate Investment Trusts (REITs) (continued)
Plum Creek Timber Co., Inc.(a)		25,900	$	1,204,609
Prologis, Inc.		82,828		3,060,495
Public Storage		25,400		3,823,208
Simon Property Group, Inc.		55,001		8,368,952
Ventas, Inc.		51,204		2,932,965
Vornado Realty Trust		32,157		2,855,220
Weyerhaeuser Co.		99,310		3,135,217

				51,589,065

Real Estate Management & Development
CBRE Group, Inc. (Class A Stock)*		53,500		1,407,050

Road & Rail — 0.9%
CSX Corp.		176,672		5,082,853
Kansas City Southern		16,800		2,080,344
Norfolk Southern Corp.		54,300		5,040,669
Ryder System, Inc.		9,100		671,398
Union Pacific Corp.		79,250		13,314,000

				26,189,264

Semiconductors & Semiconductor Equipment — 2.0%
Altera Corp.		52,500		1,707,825
Analog Devices, Inc.		52,900		2,694,197
Applied Materials, Inc.		213,900		3,783,891
Broadcom Corp. (Class A Stock)		86,950		2,578,068
First Solar, Inc.*(a)		7,200		393,408
Intel Corp.		852,900		22,141,284
KLA-Tencor Corp.		28,700		1,850,002
Lam Research Corp.*		29,750		1,619,888
Linear Technology Corp.(a)		42,300		1,926,765
LSI Corp.		93,600		1,031,472
Microchip Technology, Inc.		31,900		1,427,525
Micron Technology, Inc.*		165,900		3,609,984
NVIDIA Corp.(a)		96,450		1,545,129
Texas Instruments, Inc.		190,000		8,342,900
Xilinx, Inc.		44,000		2,020,480

				56,672,818

Software — 3.4%
Adobe Systems, Inc.*		76,875		4,603,275
Autodesk, Inc.*		36,900		1,857,177
CA, Inc.		56,973		1,917,141
Citrix Systems, Inc.*		32,400		2,049,300
Electronic Arts, Inc.*(a)		52,800		1,211,232
Intuit, Inc.(a)		49,000		3,739,680
Microsoft Corp.		1,300,300		48,670,229
Oracle Corp.		610,095		23,342,235
Red Hat, Inc.*		33,300		1,866,132
Salesforce.com, Inc.*(a)		90,000		4,967,100
Symantec Corp.		124,211		2,928,895

				97,152,396

Specialty Retail — 2.2%
AutoNation, Inc.*		6,089		302,562
AutoZone, Inc.*(a)		5,600		2,676,464
Bed Bath & Beyond, Inc.*(a)		36,400		2,922,920
Best Buy Co., Inc.		48,025		1,915,237
CarMax, Inc.*(a)		40,000		1,880,800
GameStop Corp. (Class A Stock)		21,800		1,073,868


COMMON STOCKS (continued)	Shares		Value (Note 2)
Specialty Retail (continued)
Gap, Inc. (The)		46,387	$	1,812,804
Home Depot, Inc. (The)		241,069		19,849,621
L Brands, Inc.		42,496		2,628,378
Lowe’s Cos., Inc.		180,325		8,935,104
O’Reilly Automotive, Inc.*(a)		17,100		2,200,941
PetSmart, Inc.(a)		19,100		1,389,525
Ross Stores, Inc.		37,800		2,832,354
Staples, Inc.		110,800		1,760,612
Tiffany & Co.		19,400		1,799,932
TJX Cos., Inc. (The)		122,700		7,819,671
Urban Outfitters, Inc.*		19,000		704,900

				62,505,693

Textiles, Apparel & Luxury Goods — 0.8%
Coach, Inc.		50,500		2,834,565
Fossil Group, Inc.*		8,300		995,502
Michael Kors Holdings Ltd.*		27,700		2,248,963
NIKE, Inc. (Class B Stock)		129,800		10,207,472
PVH Corp.		12,000		1,632,240
Ralph Lauren Corp.		11,000		1,942,270
VF Corp.		62,144		3,874,057

				23,735,069

Thrifts & Mortgage Finance — 0.1%
Hudson City Bancorp, Inc.		86,900		819,467
People’s United Financial, Inc.		59,200		895,104

				1,714,571

Tobacco — 1.5%
Altria Group, Inc.		344,900		13,240,711
Lorillard, Inc.		62,493		3,167,145
Philip Morris International, Inc.		273,600		23,838,768
Reynolds American, Inc.		53,800		2,689,462

				42,936,086

Trading Companies & Distributors — 0.2%
Fastenal Co.(a)		47,600		2,261,476
W.W. Grainger, Inc.		10,700		2,732,994

				4,994,470

Wireless Telecommunication Services — 0.1%
Crown Castle International Corp.*		52,700		3,869,758

TOTAL LONG-TERM INVESTMENTS (cost $1,062,854,343)				2,820,811,157

SHORT-TERM INVESTMENTS — 5.5%
AFFILIATED MONEY MARKET MUTUAL FUND — 5.4%
Prudential Investment Portfolios 2 —Prudential Core Taxable Money Market Fund (cost $156,953,844; includes $94,754,164 of cash collateral for securities on loan) (Note 4)(b)(c)		156,953,844		156,953,844

SEE NOTES TO FINANCIAL STATEMENTS.

A113


SHORT-TERM INVESTMENTS (continued)	Principal Amount (000)#		Value (Note 2)
U.S. TREASURY OBLIGATION — 0.1%
U.S. Treasury Bill, 0.057%, 03/20/14 (cost $3,799,534)(d)(e)	$	3,800	$	3,799,514

TOTAL SHORT-TERM INVESTMENTS (cost $160,753,378)				160,753,358

TOTAL INVESTMENTS — 103.1% (cost $1,223,607,721)				2,981,564,515
LIABILITIES IN EXCESS OF OTHER ASSETS(f) — (3.1)%				(91,014,730	)

NET ASSETS — 100.0%			$	2,890,549,785

The following abbreviation is used in the Portfolio descriptions:


REIT		Real Estate Investment Trust

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

*	Non-income producing security.

(a)	All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $92,674,777; cash collateral of $94,754,164 (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.

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

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

(e)	Represents security, or a portion thereof, segregated as collateral for futures contracts.

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

Open futures contracts outstanding at December 31, 2013:


Number of Contracts	Type	Expiration Date		Value at Trade Date		Value at December 31, 2013		Unrealized Appreciation
Long Position:
153	S&P 500 Index		Mar. 2014	$	67,743,757	$	70,422,075	$	2,678,318

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 generally in active markets for identical securities.

Level 2—

Level 3—

significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:


	Level 1		Level 2		Level 3
Investments in Securities
Common Stocks	$	2,820,811,157	$	—	$	—
Affiliated Money Market Mutual Fund		156,953,844		—		—
U.S. Treasury Obligation		—		3,799,514		—
Other Financial Instruments*
Futures Contract		2,678,318		—		—

Total	$	2,980,443,319	$	3,799,514	$	—

*	Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swaps contracts, which are recorded at the unrealized appreciation/depreciation of the instrument.

SEE NOTES TO FINANCIAL STATEMENTS.

A114

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:


Oil, Gas & Consumable Fuels	8.2	%
Pharmaceuticals	5.7
Affiliated Money Market Mutual Fund (including 3.3% of collateral received for securities on loan)	5.4
Diversified Financial Services	5.1
Computers & Peripherals	4.0
Media	3.6
IT Services	3.5
Software	3.4
Internet Software & Services	3.1
Insurance	2.9
Commercial Banks	2.7
Aerospace & Defense	2.7
Chemicals	2.5
Industrial Conglomerates	2.5
Biotechnology	2.4
Food & Staples Retailing	2.3
Capital Markets	2.2
Specialty Retail	2.2
Beverages	2.1
Diversified Telecommunication Services	2.1
Health Care Providers & Services	2.0
Health Care Equipment & Supplies	2.0
Household Products	2.0
Semiconductors & Semiconductor Equipment	2.0
Energy Equipment & Services	1.8
Real Estate Investment Trusts (REITs)	1.8
Machinery	1.7
Communications Equipment	1.7
Hotels, Restaurants & Leisure	1.7
Electric Utilities	1.6
Food Products	1.5
Tobacco	1.5
Internet & Catalog Retail	1.4
Multi-Utilities	1.1


Consumer Finance	1.0	%
Road & Rail	0.9
Textiles, Apparel & Luxury Goods	0.8
Air Freight & Logistics	0.8
Electrical Equipment	0.8
Automobiles	0.7
Multiline Retail	0.7
Metals & Mining	0.5
Life Sciences Tools & Services	0.5
Commercial Services & Supplies	0.5
Electronic Equipment, Instruments & Components	0.4
Auto Components	0.4
Household Durables	0.4
Containers & Packaging	0.2
Airlines	0.2
Professional Services	0.2
Trading Companies & Distributors	0.2
Construction & Engineering	0.2
Personal Products	0.1
Wireless Telecommunication Services	0.1
U.S. Treasury Obligation	0.1
Leisure Equipment & Products	0.1
Paper & Forest Products	0.1
Gas Utilities	0.1
Independent Power Producers & Energy Traders	0.1
Health Care Technology	0.1
Office Electronics	0.1
Distributors	0.1
Building Products	0.1
Diversified Consumer Services	0.1
Thrifts & Mortgage Finance	0.1

	103.1
Liabilities in excess of other assets	(3.1	)

	100.0	%

Fair values of derivative instruments as of December 31, 2013 as presented in the Statement of Assets and Liabilities:

Derivatives not accounted for as hedging
instruments, carried at fair value

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Equity contracts

Due from broker — variation margin

2,678,318

—

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

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:


Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Equity contracts	$	14,568,035


Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments, carried at fair value	Futures
Equity contracts	$	3,070,209

For the year ended December 31, 2013, the Fund’s average value at trade date for futures long positions was $62,711,799.

SEE NOTES TO FINANCIAL STATEMENTS.

A115

Offsetting of financial instrument and derivative assets and liabilities:


Description	Gross Amounts Recognized		Gross Amounts not subject to netting		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position
Assets:
Securities on loan	$	92,674,777	$	—	$	—	$	92,674,777
Exchange-traded and cleared derivatives		244,800				—		244,800

								92,919,577

Collateral Amounts Pledged/(Received):
Securities on loan								(92,674,777	)
Exchange-traded and cleared derivatives								—

Net Amount							$	244,800

SEE NOTES TO FINANCIAL STATEMENTS.

A116


		*STOCK INDEX PORTFOLIO (continued)*

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2013


ASSETS
Investments, at value including securities on loan of $92,674,777:
Unaffiliated investments (cost $1,066,653,877)	$	2,824,610,671
Affiliated investments (cost $156,953,844)		156,953,844
Cash		16,482
Receivable for investments sold		4,173,595
Dividends and interest receivable		3,863,431
Due from broker—variation margin		244,800
Prepaid expenses		24,238
Receivable for Series shares sold		6,102

Total Assets		2,989,893,163

LIABILITIES
Collateral for securities on loan		94,754,164
Payable for Series shares repurchased		1,988,618
Payable for investments purchased		1,705,348
Management fee payable		722,914
Accrued expenses and other liabilities		171,408
Affiliated transfer agent fee payable		926

Total Liabilities		99,343,378

NET ASSETS	$	2,890,549,785

Net assets were comprised of:
Paid-in capital	$	954,708,112
Retained earnings		1,935,841,673

Net assets, December 31, 2013	$	2,890,549,785

Net asset value and redemption price per share, $2,890,549,785 / 61,470,972 outstanding shares of beneficial interest	$	47.02

STATEMENT OF OPERATIONS

Year Ended December 31, 2013


INVESTMENT INCOME
Unaffiliated dividend income (net of foreign withholding taxes of $29,873)	$	54,718,373
Affiliated income from securities loaned, net		187,931
Affiliated dividend income		89,609
Interest		1,306

		54,997,219

EXPENSES
Management fee		9,223,633
Custodian’s fees and expenses		265,000
Shareholders’ reports		150,000
Trustees’ fees		33,000
Insurance expenses		30,000
Audit fee		20,000
Legal fees and expenses		14,000
Transfer agent’s fee and expenses (including affiliated expense of $5,600) (Note 4)		12,000
Commitment fee on syndicated credit agreement		4,000
Miscellaneous		25,228

Total expenses		9,776,861
Less: Management fee waiver (Note 3)		(1,317,662	)

Net expenses		8,459,199

NET INVESTMENT INCOME		46,538,020

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Investment transactions		63,099,810
Futures transactions		14,568,035

		77,667,845

Net change in unrealized appreciation (depreciation) on:
Investments		596,802,571
Futures		3,070,209

		599,872,780

NET GAIN ON INVESTMENTS		677,540,625

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	724,078,645

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31,
	2013			2012
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	46,538,020		$	45,446,287
Net realized gain on investments		77,667,845			55,517,092
Net change in unrealized appreciation (depreciation) on investments		599,872,780			230,843,600

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		724,078,645			331,806,979

DISTRIBUTIONS		—			(45,812,464	)

SERIES SHARE TRANSACTIONS:
Series shares sold [952,181 and 1,497,834 shares, respectively]		39,860,195			52,031,635
Series shares issued in reinvestment of distributions [0 and 1,398,000 shares, respectively]		—			45,812,464
Series shares repurchased [5,120,314 and 5,978,533 shares, respectively]		(213,653,470	)		(205,985,546	)

NET DECREASE IN NET ASSETS RESULTING FROM SERIES SHARE TRANSACTIONS		(173,793,275	)		(108,141,447	)

TOTAL INCREASE IN NET ASSETS		550,285,370			177,853,068
NET ASSETS:
Beginning of year		2,340,264,415			2,162,411,347

End of year	$	2,890,549,785		$	2,340,264,415

SEE NOTES TO FINANCIAL STATEMENTS.

A117

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 (“1940 Act”). The Series Fund is composed of eighteen Portfolios (“Portfolio” or “Portfolios”), each with separate series shares. The information presented in these financial statements pertains to the 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.

Diversified Bond Portfolio: High level of income over a longer term while providing reasonable safety of capital.

Equity Portfolio: Long-term growth of capital.

Flexible Managed Portfolio: Total return consistent with an aggressively managed diversified portfolio.

Global Portfolio: Long-term growth of capital.

Government Income Portfolio: High level of income over the long-term consistent with the preservation of capital.

Stock Index Portfolio: Achieve investment results that generally correspond to the performance of publicly traded common stocks.

The ability of debt securities issuers (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 accounting policies conform to U.S. generally accepted accounting principles. The Series Fund and the Portfolios consistently follow such policies in the preparation of their financial statements.

Security Valuation: Each Portfolio holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Trustees (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit a Portfolio to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

Various inputs determine how each Portfolio’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following each Portfolio’s Schedule of Investments.

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

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, each Portfolio may hold up to 15% of their net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above.

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

Net realized gains or losses on foreign currency transactions represent net foreign exchange gains or losses from the holding of foreign currencies, currency gains or losses realized between the trade and settlement

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

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 negotiated 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. A 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.

Short Sales: Certain Portfolios of the Series Fund may sell a security they do 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 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 at the closing of a 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. Over-the-counter options involve 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. Swap agreements are negotiated in the over-the-counter market and may be executed either directly with a counterparty (“OTC Traded”) or through a central clearing facility, such as a registered commodities exchange (“Exchange Traded”). 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. Exchange Traded swaps pay or receive an amount, known as “variation margin”, based on daily changes in the valuation of the swap contract. 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. Certain Portfolios are subject to interest rate risk exposure in the normal course of pursuing their investment objectives. Certain Portfolios used interest rate swaps to either maintain their ability to generate steady cash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments using interest rate swap contracts. A 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.

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 (collectively a “credit event”) for the referenced entity, 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.

Certain Portfolios are subject to credit risk in the normal course of pursuing their investment objectives. Certain Portfolios have entered into 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. A Portfolios’ maximum risk of loss from counterparty credit risk for purchased credit default swaps is the inability of the counterparty to honor the contract up to the notional value based on a credit event.

As a seller of protection on credit default swap agreements, the Portfolio generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Portfolio effectively increases its investment risk because, in addition to its total net assets, the Portfolio may be subject to investment exposure on the notional amount of the swap.

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 to 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 which the Portfolio entered 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 or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk 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 indicators of the current status of the payment/performance risk. Wider credit spreads and increased 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 of risk of default or other credit event occurring as defined under the terms of the agreement.

Currency Swaps: Certain Portfolios entered into currency swap agreements primarily to gain yield exposure on foreign bonds. Currency swap agreements involve two parties exchanging two different currencies with an agreement to reverse the exchange at a later date at specified exchange rates.

Master Netting Arrangements: Certain Portfolios are subject to various Master Agreements, or netting arrangements, with select counterparties. A master netting arrangement between the Portfolio and the counterparty 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. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there were no instances where the right of set-off existed and management has not elected to offset.

Certain Portfolios are parties to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over-the-counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Portfolio is held in a segregated account by the Portfolio’s custodian, and with respect to those amounts which can be sold or re-pledged, are presented in the Schedule of Investments. Collateral pledged by the Portfolio is segregated by the Portfolio’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Portfolio and the applicable counterparty. Collateral requirements are determined based on the Portfolio’s net position with each counterparty. Termination events applicable to the Portfolio may occur upon a decline in the Portfolio’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Portfolio’s counterparties to elect early termination could impact the Portfolio’s future derivative activity.

In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of

default or bankruptcy/insolvency of either party. Such 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, 2013, 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. Such risks may be mitigated by having master netting arrangements.

Warrants and Rights: Certain Portfolios of the Series Fund hold warrants and rights acquired either through a direct purchase, included as part of a private placement, or pursuant to corporate actions. Warrants and rights entitle the holder to buy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such warrants and rights are held as long positions by the Portfolio until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board approved fair valuation procedures.

Securities Lending: Each Portfolio of the Series Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in a highly liquid short-term money market and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the 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 in the open market using the collateral. The Portfolio recognizes income, net of any rebate and securities lending agent fees, for lending its securities and any 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 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 or losses from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on the accrual basis, which may require the use of certain estimates by management, that may differ from actual.

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

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 (Participating Insurance Companies). 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. 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”), Brown Advisory, LLC (“Brown”), LSV Asset Management (“LSV”), Quantitative Management Associates LLC (“QMA”), T. Rowe Price Associates, Inc. (“T. Rowe”) and William Blair & Co. LLC (“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 accrued daily and payable monthly, using the value of each of the Portfolio’s average daily net assets, at the respective annual rates specified below.


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		0.30	*

Effective August 1, 2010, PI has voluntarily agreed to waive a portion of its management fee equal to an annual rate of 0.05% of the average daily net assets of the Portfolio.

Effective July 1, 2013, PI has contractually agreed, through June 30, 2014, to waive a portion of its management fee equal to an annual rate of 0.01% of the average net assets of the Portfolio.

At December 31, 2013, the Subadvisors that provide investment advisory services to the Portfolios are listed directly below. 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		Brown*, LSV, QMA, T. Rowe & William Blair
Government Income Portfolio		PIM
Stock Index Portfolio		QMA

Effective June 17, 2013, Brown replaced Marsico Capital Management, LLC.

The Series Fund has a distribution agreement, pursuant to Rule 12b-1 under the 1940 Act, 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.

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

Certain Portfolios have entered into a brokerage commission recapture agreement with certain registered broker-dealers. Under the brokerage commission recapture program, a portion of the commission is returned to the Portfolio on whose behalf the trades were made. Commission recapture is paid solely to those portfolios generating the applicable trades. Such amounts are included with realized gain or loss on investment transactions presented in the Statement of Operations. For the year ended December 31, 2013, brokerage commission recaptured under these agreements was as follows:


Portfolio	Amount
Equity Portfolio	$	327,037
Global Portfolio		10,550

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, 2013, PIM was compensated as follows for these services by the Series Fund Portfolios:


Portfolio		Amount
Conservative Balanced Portfolio		$58,423
Diversified Bond Portfolio		42,369
Equity Portfolio		154,613
Flexible Managed Portfolio		63,420
Global Portfolio		9,724
Government Income Portfolio		18,321
Stock Index Portfolio		56,135

Certain Portfolios invest in the Prudential Core Short-Term Bond Fund and in the Prudential Core Taxable Money Market Fund (the “Core Funds”), each a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act, as amended, and managed by PI. Earnings from the Core Funds are disclosed on the Statement of Operations as affiliated dividend income.

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, 2013 were as follows:


Portfolio	Cost of Purchases		Proceeds from Sales
Conservative Balanced Portfolio	$	3,265,647,924	$	3,517,597,896
Diversified Bond Portfolio		714,275,381		730,599,512
Equity Portfolio		1,542,217,332		1,804,007,113
Flexible Managed Portfolio		5,977,365,074		6,160,852,936
Global Portfolio		450,199,419		475,325,106
Government Income Portfolio		4,613,567,528		4,626,048,667
Stock Index Portfolio		66,804,219		189,640,875

Options written transactions, during the year ended December 31, 2013, were as follows:


Conservative Balanced Portfolio	Contracts			Premiums
Balance as of December 31, 2012		—		$	—
Options written		14,512,453			111,097
Options terminated in closing purchase transactions		(14,512,194	)		(70,929	)
Options expired		(259	)		(40,168	)

Balance as of December 31, 2013		—		$	—


Diversified Bond Portfolio	Contracts			Premiums
Balance as of December 31, 2012		—		$	—
Options written		20,185,218			91,338
Options terminated in closing purchase transactions		(20,185,218	)		(91,338	)
Options expired

Balance as of December 31, 2013		—		$	—


Flexible Managed Portfolio	Contracts			Premiums
Balance as of December 31, 2012		—		$	—
Options written		17,544,586			137,948
Options terminated in closing purchase transactions		(17,544,255	)		(87,828	)
Options expired		(331	)		(50,120	)

Balance as of December 31, 2013		—		$	—


Government Income Portfolio	Contracts			Premiums
Balance as of December 31, 2012		—		$	—
Options written		11,592,452			98,166
Options terminated in closing purchase transactions		(11,592,198	)		(61,410	)
Options expired		(254	)		(36,756	)

Balance as of December 31, 2013		—		$	—

Note 6:

Tax Information

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.

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 no provision for income tax is required in the Portfolios’ financial statements for the current period. 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, 2013, 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, 2013:
Series shares sold		497,608		$	15,342,872
Series shares issued in reinvestment of distributions		—			—
Series shares repurchased		(7,725,116	)		(238,388,587	)

Net increase (decrease) in shares outstanding		(7,227,508	)	$	(223,045,715	)

Year ended December 31, 2012:
Series shares sold		665,566		$	17,089,685
Series shares issued in reinvestment of distributions		764,646			18,817,932
Series shares repurchased		(9,596,928	)		(249,386,485	)

Net increase (decrease) in shares outstanding		(8,166,716	)	$	(213,478,868	)


Class II
Year ended December 31, 2013:
Series shares sold		14,609		$	480,313
Series shares issued in reinvestment of distributions		—			—
Series shares repurchased		(17,287	)		(551,629	)

Net increase (decrease) in shares outstanding		(2,678	)	$	(71,316	)

Year ended December 31, 2012:
Series shares sold		2,851		$	75,562
Series shares issued in reinvestment of distributions		170			4,233
Series shares repurchased		(18,112	)		(453,228	)

Net increase (decrease) in shares outstanding		(15,091	)	$	(373,433	)

Note 8:

Borrowings

The Portfolios, along with other affiliated registered investment companies (the “Funds”), are a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 5, 2013 through November 4, 2014. The Funds pay an annualized commitment fee of 0.08% of the unused portion of the SCA. Prior to November 5, 2013, the Funds had another SCA with substantially similar terms. Interest on any borrowings under the SCA is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly.

The Portfolios presented in these financial statements did not borrow any amounts pursuant to the SCA during the year ended December 31, 2013.

Note 9:

Ownership and Affiliates

As of December 31, 2013, all of Class I shares of record of each Portfolio were owned by the Prudential Insurance Company of America (“PICA”) on behalf of the owners of the variable insurance products issued by PICA.

B10

Financial Highlights


	Conservative Balanced Portfolio
	Year Ended December 31,
	2013(a)			2012			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	17.77		$	16.32		$	15.96		$	14.65		$	12.69

Income (Loss) From Investment Operations:
Net investment income		.35			.38			.36			.37			.39
Net realized and unrealized gain on investments		2.51			1.43			.37			1.31			2.08

Total from investment operations		2.86			1.81			.73			1.68			2.47

Less Distributions		—			(.36	)		(.37	)		(.37	)		(.51	)

Net Asset Value, end of year	$	20.63		$	17.77		$	16.32		$	15.96		$	14.65

Total Return(b)		16.09	%		11.23	%		4.60	%		11.74	%		20.01	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,504.4		$	2,287.0		$	2,191.6		$	2,234.7		$	2,138.7
Ratios to average net assets(c):
Expenses		.58	%		.58	%		.59	%		.59	%		.59	%
Net investment income		1.84	%		2.11	%		2.12	%		2.32	%		2.68	%
Portfolio turnover rate		196	%		188	%		215	%		185	%		250	%

	Diversified Bond Portfolio
	Year Ended December 31,
	2013			2012(a)			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	11.88		$	11.74		$	11.67		$	11.16		$	9.89

Income (Loss) From Investment Operations:
Net investment income		.48			.54			.56			.52			.50
Net realized and unrealized gain (loss) on investments		(.56	)		.66			.30			.63			1.46

Total from investment operations		(.08	)		1.20			.86			1.15			1.96

Less Distributions		(.79	)		(1.06	)		(.79	)		(.64	)		(.69	)

Net Asset Value, end of year	$	11.01		$	11.88		$	11.74		$11.67			$	11.16

Total Return(b)		(.71	)%		10.68	%		7.51	%		10.57	%		20.51	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	1,197.5		$	1,305.9		$	1,556.9		$	1,522.9		$	1,363.5
Ratios to average net assets(c):
Expenses		.44	%		.44	%		.42	%		.46	%		.44	%
Net investment income		4.10	%		4.57	%		4.76	%		4.46	%		4.79	%
Portfolio turnover rate		111	%		144	%		167	%		191	%		401	%

(a)	Calculated based on 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 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.

SEE NOTES TO FINANCIAL STATEMENTS.

Financial Highlights


	Equity Portfolio
	Class I
	Year Ended December 31,
	2013			2012(c)			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	26.81		$	23.73		$	24.75		$	22.30		$	16.40

Income (Loss) From Investment Operations:
Net investment income		.27			.27			.13			.15			.16
Net realized and unrealized gain (loss) on investments		8.73			2.96			(.98	)		2.48			6.04

Total from investment operations		9.00			3.23			(.85	)		2.63			6.20

Less Distributions:		—			(.15	)		(.17	)		(.18	)		(.30	)

Net Asset Value, end of year	$	35.81		$	26.81		$	23.73		$	24.75		$	22.30

Total Return(a)		33.57	%		13.69	%		(3.47	)%		11.90	%		38.17	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	3,970.9		$	3,167.0		$	2,997.5		$	3,324.3		$	3,195.1
Ratios to average net assets(b):
Expenses		.47	%		.47	%		.48	%		.48	%		.48	%
Net investment income		.86	%		1.04	%		.58	%		.71	%		.90	%
Portfolio turnover rate		45	%		48	%		49	%		68	%		98	%

	Equity Portfolio
	Class II
	Year Ended December 31,
	2013			2012(c)			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	27.10		$	23.99		$	25.00		$	22.46		$	16.47

Income (Loss) From Investment Operations:
Net investment income		.13			.17			.06			.04			.09
Net realized and unrealized gain (loss) on investments		8.82			3.00			(1.03	)		2.54			6.07

Total from investment operations		8.95			3.17			(.97	)		2.58			6.16

Less Distributions:		—			(.06	)		(.04	)		(.04	)		(.17	)

Net Asset Value, end of year	$	36.05		$	27.10		$	23.99		$	25.00		$	22.46

Total Return(a)		33.03	%		13.23	%		(3.87	)%		11.50	%		37.58	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2.3		$	1.8		$	2.0		$	1.9		$	.4
Ratios to average net assets(b):
Expenses		.87	%		.87	%		.88	%		.88	%		.88	%
Net investment income		.47	%		.63	%		.19	%		.34	%		.52	%
Portfolio turnover rate		45	%		48	%		49	%		68	%		98	%

(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 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 return for all periods 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)	Calculated based on average shares outstanding during the year.

SEE NOTES TO FINANCIAL STATEMENTS.

Financial Highlights


	Flexible Managed Portfolio
	Year Ended December 31,
	2013(a)			2012			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	17.77		$	15.99		$	15.63		$	14.28		$	12.34

Income (Loss) From Investment Operations:
Net investment income		.36			.37			.33			.31			.34
Net realized and unrealized gain on investments		3.22			1.74			.34			1.37			2.05

Total from investment operations		3.58			2.11			.67			1.68			2.39

Less Distributions		—			(.33	)		(.31	)		(.33	)		(.45	)

Net Asset Value, end of year	$	21.35		$	17.77		$	15.99		$	15.63		$	14.28

Total Return(b)		20.15	%		13.37	%		4.34	%		12.03	%		19.95	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	3,730.6		$	3,265.8		$	3,036.8		$	3,077.3		$	2,906.0
Ratios to average net assets(c):
Expenses		.63	%		.63	%		.63	%		.64	%		.63	%
Net investment income		1.86	%		2.05	%		2.01	%		2.06	%		2.50	%
Portfolio turnover rate(d)		210	%		214	%		246	%		205	%		248	%

	Global Portfolio
	Year Ended December 31,
	2013			2012			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	19.57		$	16.94		$	18.49		$	16.68		$	13.07

Income (Loss) From Investment Operations:
Net investment income		.31			.36			.29			.28			.28
Net realized and unrealized gain (loss) on investments		5.03			2.57			(1.56	)		1.79			3.75

Total from investment operations		5.34			2.93			(1.27	)		2.07			4.03

Less Distributions		—			(.30	)		(.28	)		(.26	)		(.42	)

Net Asset Value, end of year	$	24.91		$	19.57		$	16.94		$	18.49		$	16.68

Total Return(b)		27.29	%		17.52	%		(6.97	)%		12.74	%		31.39	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	744.5		$	611.2		$	564.2		$	648.5		$	619.5
Ratios to average net assets(c):
Expenses after waivers and/or expense reimbursements		.84	%		.84	%		.84	%		.87	%		.85	%
Expenses before waivers and/or expense reimbursements		.84	%		.84	%		.84	%		.87	%		.85	%
Net investment income		1.29	%		1.82	%		1.54	%		1.60	%		1.77	%
Portfolio turnover rate		70	%		57	%		69	%		69	%		50	%

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

(b)

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

(d)	The Portfolio accounts for mortgage dollar roll transactions as purchases and sales which, as a result, can increase its portfolio turnover rate.

SEE NOTES TO FINANCIAL STATEMENTS.

Financial Highlights


	Government Income Portfolio
	Year Ended December 31,
	2013			2012			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	12.15		$	12.37		$	12.03		$	11.86		$	11.40

Income (Loss) From Investment Operations:
Net investment income		.21			.25			.30			.35			.37
Net realized and unrealized gain (loss) on investments		(.49	)		.19			.60			.47			.49

Total from investment operations		(.28	)		.44			.90			.82			.86

Less Distributions		(.57	)		(.66	)		(.56	)		(.65	)		(.40	)

Net Asset Value, end of year	$	11.30		$	12.15		$	12.37		$	12.03		$	11.86

Total Return(a)		(2.34	)%		3.63	%		7.63	%		6.99	%		7.71	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	341.1		$	382.9		$	416.7		$	399.2		$	375.4
Ratios to average net assets(b):
Expenses		.49	%		.48	%		.46	%		.50	%		.47	%
Net investment income		1.78	%		1.96	%		2.48	%		2.87	%		3.11	%
Portfolio turnover rate(c)		1135	%		1154	%		1554	%		1122	%		1179	%

	Stock Index Portfolio
	Year Ended December 31,
	2013(d)			2012			2011			2010			2009
Per Share Operating Performance:
Net Asset Value, beginning of year	$	35.65		$	31.47		$	31.37		$	27.89		$	22.76

Income (Loss) From Investment Operations:
Net investment income		.73			.68			.54			.48			.49
Net realized and unrealized gain on investments		10.64			4.19			.07			3.51			5.32

Total from investment operations		11.37			4.87			.61			3.99			5.81

Less Distributions		—			(.69	)		(.51	)		(.51	)		(.68	)

Net Asset Value, end of year	$	47.02		$	35.65		$	31.47		$	31.37		$	27.89

Total Return(a)		31.89	%		15.68	%		1.95	%		14.59	%		26.07	%
Ratios/Supplemental Data:
Net assets, end of year (in millions)	$	2,890.5		$	2,340.3		$	2,162.4		$	2,277.6		$	2,098.1
Ratios to average net assets(b):
Expenses after waivers and/or expense reimbursements		.32	%		.32	%		.33	%		.36	%		.37	%
Expenses before waivers and/or expense reimbursements		.37	%		.37	%		.38	%		.38	%		.37	%
Net investment income		1.77	%		1.97	%		1.74	%		1.70	%		2.06	%
Portfolio turnover rate		3	%		2	%		2	%		4	%		5	%

(a)

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

(c)	The Portfolio accounts for mortgage dollar roll transactions as purchases and sales which, as a result, can increase its portfolio turnover rate.

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

SEE NOTES TO FINANCIAL STATEMENTS.

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 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 “Portfolios”), each a portfolio of The Prudential Series Fund, including the schedules of investments, as of December 31, 2013, 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 Portfolios’ 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, 2013, 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 Portfolios as of December 31, 2013, 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.

LOGO

New York, New York

February 14, 2014

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 Investment Company Act of 1940, 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 Investment Company Act of 1940.


Independent Trustees⁽¹⁾
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Susan Davenport Austin (46) No. of Portfolios Overseen: 98	Vice Chairman (since 2013), Senior Vice President and Chief Financial Officer (2007-2012) and Vice President of Strategic Planning and Treasurer (2002-2007) of Sheridan Broadcasting Corporation; President of Sheridan Gospel Network (Since 2004); Vice President, Goldman, Sachs & Co. (2000-2001); Associate Director, Bear, Stearns & Co. Inc. (1997-2000); Vice President, Salomon Brothers Inc. (1993-1997); President of the Board, The MacDowell Colony (Since 2010); Chairman of the Board of Directors, Broadcast Music, Inc. (Since 2011); Member of the Board of Directors, Hubbard Radio, LLC (Since 2011); President, Candide Business Advisors, Inc. (Since 2011); formerly Member of the Board of Directors, National Association of Broadcasters (2004-2010).	None.
Sherry S. Barrat (64) No. of Portfolios Overseen: 98	Formerly, Vice Chairman of Northern Trust Corporation (financial services and banking institution) (2011-June 2012); formerly, President, Personal Financial Services, Northern Trust Corporation (2006-2010); formerly, Chairman & CEO, Western US Region, Northern Trust Corporation (1999-2005); formerly, President & CEO, Palm Beach/Martin County Region, Northern Trust.	Director of NextEra Energy, Inc. (formerly, FPL Group, Inc.) (1998-Present); Director of Arthur J. Gallagher & Company (since July 2013).
Kay Ryan Booth (63) No. of Portfolios Overseen: 98	Managing Director of Cappello Waterfield & Co. LLC (since 2011); formerly, Vice Chair, Global Research, J.P. Morgan (financial services and investment banking institution) (June 2008-January 2009); formerly, Global Director of Equity Research, Bear Stearns & Co., Inc. (financial services and investment banking institution) (1995-2008); formerly, Associate Director of Equity Research, Bear Stearns & Co., Inc. (1987-1995).	None.
Delayne Dedrick Gold (75) No. of Portfolios Overseen: 98	Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc.	None.
Robert F. Gunia (67) No. of Portfolios Overseen: 98	Independent Consultant (since October 2009); formerly Chief Administrative Officer (September 1999-September 2009) and Executive Vice President (December 1996-September 2009) of Prudential Investments LLC; formerly Executive Vice President (March 1999-September 2009) and Treasurer (May 2000-September 2009) of Prudential Mutual Fund Services LLC; formerly President (April 1999-December 2008) and Executive Vice President and Chief Operating Officer (December 2008-December 2009) of Prudential Investment Management Services LLC; formerly 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.
W. Scott McDonald, Jr., Ph.D. (76) No. of Portfolios Overseen: 98	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 (72) No. of Portfolios Overseen: 98	Formerly Chief Executive Officer, Excell Partners, Inc. (2005-2007); founding partner of High Technology of Rochester and the Lennox Technology Center; formerly President of the Greater Rochester Metro Chamber of Commerce (1976-2004) formerly Rochester City Manager (1973); formerly Deputy Monroe County Executive (1974-1976).	None.


Independent Trustees⁽¹⁾
Name, Address, Age No. of Portfolios Overseen	Principal Occupation(s) During Past Five Years	Other Directorships Held
Thomas M. O’Brien (63) No. of Portfolios Overseen: 98	Director, The BankUnited (NYSE: BKU) (since May 2012); Consultant, Valley National Bancorp, Inc. and Valley National Bank (since January 2012); Formerly President and COO (November 2006-December 2011) and CEO (April 2007-December 2011) of State Bancorp, Inc. and State Bank; formerly Vice Chairman (January 1997-April 2000) of North Fork Bank; formerly 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 (April 2008-January 2012) of Federal Home Loan 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 (November 2006-January 2012) of State Bancorp, Inc. (NASDAQ: STBC) and State Bank of Long Island.
Interested Trustees⁽¹⁾
Robert F. O’Donnell (45) No. of Portfolios Overseen: 98	President of Prudential Annuities (since April 2012); Senior Vice President, Head of Product, Investment Management & Marketing for Prudential Annuities (October 2008-April 2012); Senior Vice President, Head of Product (July 2004-October 2008).	None.
Timothy S. Cronin (48) Number of Portfolios Overseen: 98	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).	None.
Bruce W. Ferris (58) Number of Portfolios Overseen: 98	Senior Vice President, Sales and Distribution, Product, Marketing, Prudential Annuities (since May 2006); Vice President-Sales, The Hartford Insurance Company (October 1994-April 2005); Sales Manager, Aetna Investment Services (October 1993-September 1994).	None.

⁽¹⁾ The year that each Trustee joined the Fund’s Board is as follows: Susan Davenport Austin, 2011; Sherry S. Barrat, 2013; Kay Ryan Booth, 2013; Delayne Dedrick Gold, 2001; Robert F. Gunia, 2001; W. Scott McDonald, Jr. 1983; Thomas T. Mooney, 2001; Thomas M. O’Brien, 2003; Robert F. O’Donnell, 2012; Timothy S. Cronin, 2011; Bruce W. Ferris, 2013.


Fund Officers^(a)(1)
Name, Address and Age Position with the Fund		Principal Occupation(s) During the Past Five Years
Raymond A. O’Hara (58) Chief Legal Officer		Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988-August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).
Deborah A. Docs (56) Secretary		Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Kathleen DeNicholas (39) Assistant Secretary		Vice President and Corporate Counsel (since May 2013) of Prudential; Managing Counsel at The Bank of New York Mellon Corporation (2011-2013); formerly Senior Counsel (2007-2011) and Assistant General Counsel (2001-2007) of The Dreyfus Corporation; Chief Legal Officer and Secretary of MBSC Securities Corporation (2011-2013); Vice President and Assistant Secretary of The Dreyfus Family of Funds (2010-2012).
Claudia DiGiacomo (39) Assistant Secretary		Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown Wood LLP (1999-2004).
Jonathan D. Shain (55) Assistant Secretary		Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
Andrew R. French (51) Assistant Secretary		Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.
Amanda S. Ryan (36) Assistant Secretary		Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray (2008-2012).
Bruce Karpati (44) Chief Compliance Officer		Chief Compliance Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, the Prudential Series Fund and Prudential’s Gibraltar Fund, Inc. (May 2013-Present); formerly National Chief (May 2012-May 2013) and Co-Chief (January 2010-May 2012) of the Asset Management Unit, Division of Enforcement, of the U.S. Securities & Exchange Commission; Assistant Regional Director (January 2005-January 2010) of the U.S. Securities & Exchange Commission.
Theresa C. Thompson (51) Deputy Chief Compliance Officer		Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).


Fund Officers^(a)(1)
Name, Address and Age Position with the Fund		Principal Occupation(s) During the Past Five Years
Richard W. Kinville (45) Anti-Money Laundering Compliance Officer		Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).
Grace C. Torres (54) Treasurer and Principal Financial and Accounting Officer		Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of Prudential Investments LLC; 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 (50) Assistant Treasurer		Vice President (since 2005) of Prudential Investments LLC.
Peter Parrella (55) 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 (57) Assistant Treasurer		Vice President and Corporate Counsel – Tax, Prudential Financial, Inc. (since October 2003).

^(a) Excludes Mr. O’Donnell and Mr. Cronin, Interested Trustees who also serve as President and Vice President, respectively.

⁽¹⁾ The year in which each individual became an Officer of the Fund is as follows: Raymond A. O’Hara, 2012; Deborah A. Docs, 2005; Kathleen DeNicholas, 2013; Claudia DiGiacomo, 2005; Jonathan D. Shain, 2005; Andrew R. French, 2006; Amanda S. Ryan, 2012; Bruce Karpati, 2013; Theresa C. Thompson, 2008; Richard W. Kinville, 2011; 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 Investment Company Act of 1940, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC. Robert F. O’Donnell, Timothy S. Cronin and Bruce W. Ferris are Interested Trustees because they are employed by an affiliate of the Manager of the Fund.

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 78, provided that the Board may extend the retirement age on a year-by-year basis for a Trustee.

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. Please be sure to have your contract number available when you call.

(800) 458-6333

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.

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, 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 each Account’s proxy voting policies and procedures is available without charge, upon request. MEDLEY participants should call 800-458-6333 to obtain a description of the Account’s proxy voting policies and procedures. 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 Securities and Exchange Commission (the “Commission”) at www.sec.gov and on the Account’s website.

The Account’s Statement of Additional Information contains additional information about the Accounts’ 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 Insurance Company of America 751 Broad Street Newark, NJ 07102-3777				Presorted Standard U.S. Postage PAID Prudential

Prudential Retirement, Prudential, the Prudential logo, the Rock symbol, and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

0239747-00002-00 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, 2013 and December 31, 2012, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $19,000 and $19,000, 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.

(d) All Other Fees

None.

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

THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

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 2013 and 2012. 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 2013 and 2012 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:		/s/ Deborah A. Docs
		Deborah A. Docs
		Secretary

Date:		February 19, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Stuart S. Parker
		Stuart S. Parker
		President and Principal Executive Officer

Date:		February 19, 2014

By:		/s/ Grace C. Torres
		Grace C. Torres
		Treasurer and Principal Financial Officer

Date:		February 19, 2014

CONSERVATIVE BALANCED PORTFOLIO

SCHEDULE OF INVESTMENTS

December 31, 2013