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: | 811-03981 | |
Exact name of registrant as specified in charter: | Prudential World Fund, Inc. | |
Address of principal executive offices: | Gateway Center 3, | |
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Deborah A. Docs | |
Gateway Center 3, | ||
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 10/31/2013 | |
Date of reporting period: | 4/30/2013 |
Item 1 – Reports to Stockholders
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL INTERNATIONAL EQUITY FUND
SEMIANNUAL REPORT · APRIL 30, 2013
Fund Type
International Stock
Objective
Long-term growth of capital
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
The accompanying financial statements as of April 30, 2013, were not audited, and accordingly, no auditor’s opinion is expressed on them.
Prudential Investments, 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.
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June 14, 2013
Dear Shareholder:
We hope you find the semiannual report for the Prudential International Equity Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2013.
We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.
Thank you for choosing the Prudential Investments family of funds.
Sincerely,
Stuart S. Parker, President
Prudential International Equity Fund
*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.
Prudential International Equity Fund | 1 |
Your Fund’s Performance (Unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. Class A shares have a maximum initial sales charge of 5.50%. Gross operating expenses: Class A, 1.62%; Class B, 2.32%; Class C, 2.32%; Class F, 2.07%; Class X, 2.32%; Class Z, 1.32%. Net operating expenses: Class A, 1.62%; Class B, 2.32%; Class C, 2.32%; Class F, 2.07%; Class X, 2.32%; Class Z, 1.32%.
Cumulative Total Returns (Without Sales Charges) as of 4/30/13 | ||||||||||||||||||
Six Months | One Year | Five Years | Ten Years | Since Inception | ||||||||||||||
Class A | 16.91 | % | 19.70 | % | –11.03 | % | 120.67 | % | — | |||||||||
Class B | 16.53 | 18.79 | –14.13 | 105.08 | — | |||||||||||||
Class C | 16.53 | 18.79 | –14.02 | 105.11 | — | |||||||||||||
Class F | 16.60 | 19.07 | –12.96 | N/A | –10.90% (12/18/06) | |||||||||||||
Class X | 16.33 | 18.79 | –14.13 | N/A | –13.02 (3/19/07) | |||||||||||||
Class Z | 16.92 | 19.89 | –10.00 | 125.89 | — | |||||||||||||
MSCI EAFE ND Index | 16.90 | 19.39 | –4.56 | 141.68 | — | |||||||||||||
Lipper International Large-Cap Core Funds Average | 14.84 | 16.71 | –5.38 | 134.91 | — | |||||||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/13 | ||||||||||||||||||
One Year | Five Years | Ten Years | Since Inception | |||||||||||||||
Class A | 6.43 | % | –3.37 | % | 8.30 | % | — | |||||||||||
Class B | 6.68 | –3.17 | 8.08 | — | ||||||||||||||
Class C | 10.68 | –2.98 | 8.08 | — | ||||||||||||||
Class F | 6.94 | –2.90 | N/A | –2.59% (12/18/06) | ||||||||||||||
Class X | 5.68 | –3.53 | N/A | –3.37 (3/19/07) | ||||||||||||||
Class Z | 12.84 | –2.05 | 9.13 | — | ||||||||||||||
MSCI EAFE ND Index | 11.27 | –0.88 | 9.70 | — | ||||||||||||||
Lipper International Large-Cap Core Funds Average | 9.69 | –0.94 | 9.32 | — |
2 | Visit our website at www.prudentialfunds.com |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 5.50% and a 12b-1 fee of 0.30%, annually. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund. Class B and Class F shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1%, respectively, for the first six years after purchase and 12b-1 fees of 1% and 0.75%, respectively, annually. Approximately seven years after purchase, Class B and Class F will automatically convert to Class A shares on a quarterly basis. Class C shares are not subject to a front-end sales charge, but charge a CDSC of 1% for shares sold within 12 months from the date of purchase and an annual 12b-1 fee of 1%. Class X shares purchased are not subject to a front-end sales charge, but charge a CDSC of 6% and a 12b-1 fee of 1%. The CDSC for Class X shares declines by 1% annually to 4% in the third and fourth year after purchase, 3% in the fifth year after purchase, 2% in the sixth and seventh year after purchase, 1% in the eighth year after purchase, and 0% in the ninth and 10th year after purchase. Class X shares convert to Class A shares on a monthly basis approximately 10 years after purchase. Class X shares are not offered to new purchasers and are available only through exchanges from the same share class of certain other Prudential Investments mutual funds. Class Z shares are not subject to a front-end sales charge, a CDSC, or a 12b-1 fee. The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
Benchmark Definitions
Morgan Stanley Capital International Europe, Australasia, and Far East Net Dividend Index
The Morgan Stanley Capital International Europe, Australasia, and Far East Net Dividend (MSCI EAFE ND) Index is an unmanaged, weighted index of performance that reflects stock price movements of developed-country markets in Europe, Australasia, and the Far East. The ND version of the MSCI EAFE Index reflects the impact of the maximum withholding taxes on reinvested dividends. MSCI EAFE ND Index Closest Month-End to Inception cumulative total returns as of 4/30/13 are 1.90% for Class F; and –2.09% for Class X. MSCI EAFE ND Index Closest Month-End to Inception average annual total returns as of 3/31/13 are –0.51% for Class F; and –1.19% for Class X.
Lipper International Large-Cap Core Funds Average
The Lipper International Large-Cap Core Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper International Large-Cap Core Funds category. Funds in the Lipper Average invest at least 75% of their equity assets in companies strictly outside of the United States with market capitalizations (on a three-year weighted basis) greater than the 250th largest company in the S&P Developed ex-U.S. Broad Market Index (BMI). Large-Cap Core funds typically have an average price-to-cash-flow ratio, price-to-book ratio, and three-year sales-per-share-growth value compared with the S&P Developed ex-U.S. BMI. Lipper Average Closest Month-End to Inception cumulative total returns as of 4/30/13 are 2.20% for Class F; and –1.39% for Class X. Lipper Average Closest Month-End to Inception average annual total returns as of 3/31/13 are –0.40% for Class F; and –1.01% for Class X.
Prudential International Equity Fund | 3 |
Your Fund’s Performance (continued)
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.
Five Largest Holdings in Long-Term Portfolio expressed as a percentage of net assets as of 4/30/13 | ||||
Roche Holding AG, Pharmaceuticals | 2.0 | % | ||
Nestle SA, Food Products | 1.6 | |||
BP PLC, Oil, Gas & Consumable Fuels | 1.5 | |||
Commonwealth Bank of Australia, Commercial Banks | 1.5 | |||
Westpac Banking Corp., Commercial Banks | 1.4 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries in Long-Term Portfolio expressed as a percentage of net assets as of 4/30/13 | ||||
Commercial Banks | 13.0 | % | ||
Pharmaceuticals | 8.6 | |||
Oil, Gas & Consumable Fuels | 7.4 | |||
Insurance | 5.5 | |||
Automobiles | 3.9 |
Industry weightings reflect only long-term investments and are subject to change.
4 | Visit our website at www.prudentialfunds.com |
Fees and Expenses (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2012, at the beginning of the period, and held through the six-month period ended April 30, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on
Prudential International Equity Fund | 5 |
Fees and Expenses (continued)
the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Prudential International Equity Fund | Beginning Account Value November 1, 2012 | Ending Account April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,169.10 | 1.62 | % | $ | 8.71 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.76 | 1.62 | % | $ | 8.10 | ||||||||||
Class B | Actual | $ | 1,000.00 | $ | 1,165.30 | 2.32 | % | $ | 12.46 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.29 | 2.32 | % | $ | 11.58 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,165.30 | 2.32 | % | $ | 12.46 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.29 | 2.32 | % | $ | 11.58 | ||||||||||
Class F | Actual | $ | 1,000.00 | $ | 1,166.00 | 2.07 | % | $ | 11.12 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.53 | 2.07 | % | $ | 10.34 | ||||||||||
Class X | Actual | $ | 1,000.00 | $ | 1,163.30 | 2.32 | % | $ | 12.44 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.29 | 2.32 | % | $ | 11.58 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,169.20 | 1.32 | % | $ | 7.10 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.25 | 1.32 | % | $ | 6.61 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2013, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
6 | Visit our website at www.prudentialfunds.com |
Portfolio of Investments
as of April 30, 2013 (Unaudited)
Shares | Description | Value (Note 1) | ||||
LONG-TERM INVESTMENTS 99.4% |
| |||||
COMMON STOCKS 96.9% |
| |||||
Australia 7.4% |
| |||||
4,227 | ASX Ltd. | $ | 164,812 | |||
24,425 | Australia & New Zealand Banking Group Ltd. | 806,233 | ||||
78,633 | BHP Billiton Ltd. | 2,665,664 | ||||
86,470 | CFS Retail Property Trust Group | 197,215 | ||||
61,894 | Commonwealth Bank of Australia | 4,712,953 | ||||
9,129 | CSL Ltd. | 595,855 | ||||
4,121 | Flight Centre Ltd. | 163,071 | ||||
423,595 | Fortescue Metals Group Ltd.(a) | 1,536,992 | ||||
15,590 | GPT Group | 66,265 | ||||
50,672 | Insurance Australia Group Ltd. | 305,734 | ||||
159,125 | Lend Lease Group | 1,778,320 | ||||
2,535 | National Australia Bank Ltd. | 89,353 | ||||
6,787 | Ramsay Health Care Ltd. | 225,084 | ||||
306,359 | SP AusNet | 398,591 | ||||
33,752 | Tatts Group Ltd. | 114,420 | ||||
16,600 | Toll Holdings Ltd. | 98,092 | ||||
23,703 | Wesfarmers Ltd. | 1,065,726 | ||||
627,843 | Westfield Retail Trust | 2,147,918 | ||||
127,926 | Westpac Banking Corp. | 4,482,582 | ||||
5,581 | Woodside Petroleum Ltd. | 217,315 | ||||
40,929 | Woolworths Ltd. | 1,544,915 | ||||
|
| |||||
23,377,110 | ||||||
Austria 0.6% |
| |||||
40,042 | OMV AG | 1,881,262 | ||||
Belgium 1.4% |
| |||||
48,824 | Ageas | 1,788,792 | ||||
3,784 | Anheuser-Busch InBev NV | 360,046 | ||||
34,566 | Delhaize Group SA | 2,167,289 | ||||
|
| |||||
4,316,127 | ||||||
Brazil 0.2% |
| |||||
4,300 | Banco do Brasil SA | 54,160 | ||||
1,500 | Cia de Bebidas das Americas | 61,544 | ||||
6,000 | CCR SA | 58,688 | ||||
19,900 | JBS SA | 62,761 | ||||
19,900 | Petroleo Brasileiro SA | 190,371 | ||||
3,500 | Tractebel Energia SA | 62,207 |
See Notes to Financial Statements.
Prudential International Equity Fund | 7 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Brazil (cont’d.) |
| |||||
7,931 | Vale SA, ADR | $ | 135,541 | |||
|
| |||||
625,272 | ||||||
Chile |
| |||||
1,900 | Cia Cervecerias Unidas SA, ADR | 65,607 | ||||
China 1.7% |
| |||||
16,500 | Anhui Conch Cement Co. Ltd. (Class H Stock) | 59,748 | ||||
491,000 | Bank of China Ltd. (Class H Stock) | 229,677 | ||||
2,102,000 | Bank of Communications Co. Ltd. (Class H Stock) | 1,671,274 | ||||
75,500 | BBMG Corp. (Class H Stock) | 60,613 | ||||
67,000 | China Communications Construction Co. Ltd. (Class H Stock) | 64,150 | ||||
972,000 | China Construction Bank Corp. (Class H Stock) | 814,160 | ||||
31,000 | China Merchants Bank Co. Ltd. (Class H Stock) | 66,073 | ||||
1,454,000 | China Minsheng Banking Corp. Ltd. (Class H Stock) | 1,868,054 | ||||
50,000 | China National Building Material Co. Ltd. (Class H Stock) | 59,019 | ||||
120,000 | China Petroleum & Chemical Corp. (Class H Stock) | 131,286 | ||||
21,000 | China Shenhua Energy Co. Ltd. (Class H Stock) | 74,283 | ||||
423,000 | Industrial & Commercial Bank of China Ltd. (Class H Stock) | 297,621 | ||||
|
| |||||
5,395,958 | ||||||
Denmark 0.6% |
| |||||
2,699 | Coloplast A/S (Class B Stock) | 146,843 | ||||
9,580 | Novo Nordisk A/S (Class B Stock) | 1,680,405 | ||||
|
| |||||
1,827,248 | ||||||
Finland 1.7% |
| |||||
7,239 | Fortum OYJ | 134,516 | ||||
7,350 | Kone OYJ (Class B Stock) | 649,016 | ||||
4,080 | Neste Oil OYJ | 63,564 | ||||
59,154 | Orion OYJ (Class B Stock) | 1,698,283 | ||||
3,735 | Pohjola Bank PLC (Class A Stock) | 63,551 | ||||
31,882 | Sampo OYJ (Class A Stock) | 1,272,207 | ||||
226,696 | Stora Enso OYJ (Class R Stock) | 1,574,838 | ||||
|
| |||||
5,455,975 | ||||||
France 7.4% |
| |||||
3,517 | Accor SA | 116,256 | ||||
5,228 | Alstom SA | 214,537 | ||||
80,880 | AXA SA | 1,514,110 |
See Notes to Financial Statements.
8 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
France (cont’d.) |
| |||||
27,489 | Cap Gemini SA | $ | 1,264,343 | |||
16,226 | Carrefour SA | 480,799 | ||||
16,083 | Casino Guichard Perrachon SA | 1,738,285 | ||||
7,031 | Cie Generale des Etablissements Michelin | 593,810 | ||||
5,711 | Electricite de France SA | 127,633 | ||||
53,615 | European Aeronautic Defence and Space Co. NV | 2,831,746 | ||||
5,784 | Imerys SA | 378,958 | ||||
1,901 | PPR | 418,213 | ||||
26,973 | Publicis Groupe SA | 1,876,278 | ||||
27,779 | Renault SA | 1,914,052 | ||||
28,293 | Sanofi | 3,100,817 | ||||
2,559 | Schneider Electric SA | 195,127 | ||||
11,872 | Thales SA | 515,637 | ||||
83,487 | Total SA | 4,207,719 | ||||
42,385 | Vinci SA | 2,040,741 | ||||
|
| |||||
23,529,061 | ||||||
Germany 7.2% |
| |||||
9,959 | Allianz SE | 1,469,593 | ||||
41,361 | BASF SE | 3,863,040 | ||||
29,679 | Bayer AG | 3,096,375 | ||||
20,715 | Deutsche Post AG | 491,597 | ||||
109,171 | Deutsche Telekom AG | 1,291,367 | ||||
131,998 | E.ON SE | 2,391,967 | ||||
2,777 | Fresenius SE & Co. KGaA | 348,236 | ||||
3,753 | Hannover Rueckversicherung AG | 316,914 | ||||
3,356 | HeidelbergCement AG | 241,624 | ||||
3,177 | Henkel AG & Co. KGaA | 248,736 | ||||
40,547 | K+S AG | 1,792,584 | ||||
724 | Linde AG | 136,919 | ||||
12,947 | Muenchener Rueckversicherungs AG | 2,589,127 | ||||
2,074 | SAP AG | 164,728 | ||||
19,650 | Siemens AG | 2,052,131 | ||||
51,943 | Suedzucker AG | 2,093,919 | ||||
726 | Volkswagen AG | 141,121 | ||||
|
| |||||
22,729,978 | ||||||
Greece |
| |||||
7,208 | OPAP SA | 71,099 |
See Notes to Financial Statements.
Prudential International Equity Fund | 9 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Hong Kong 4.2% |
| |||||
979,000 | Agricultural Bank of China Ltd. (Class H Stock) | $ | 468,044 | |||
420,200 | Bank of East Asia Ltd. | 1,727,335 | ||||
55,000 | Cheung Kong Infrastructure Holdings Ltd. | 399,026 | ||||
38,000 | China Mobile Ltd. | 415,984 | ||||
25,000 | China Overseas Land & Investment Ltd. | 76,352 | ||||
44,000 | China Unicom Hong Kong Ltd. | 63,164 | ||||
75,000 | CNOOC Ltd. | 139,946 | ||||
110,000 | Hang Lung Properties Ltd. | 428,084 | ||||
52,000 | Hutchison Whampoa Ltd. | 564,886 | ||||
335,000 | Hysan Development Co. Ltd. | 1,659,858 | ||||
349,000 | Link REIT (The) | 1,976,579 | ||||
146,000 | New World Development Co. Ltd. | 254,742 | ||||
33,500 | Power Assets Holdings Ltd. | 327,223 | ||||
146,000 | Shougang Fushan Resources Group Ltd. | 57,007 | ||||
86,000 | Sino Land Co. Ltd. | 141,410 | ||||
38,000 | Sun Hung Kai Properties Ltd. | 549,422 | ||||
40,000 | Want Want China Holdings Ltd. | 63,401 | ||||
249,000 | Wharf Holdings Ltd. | 2,222,025 | ||||
310,000 | Wheelock & Co. Ltd. | 1,725,740 | ||||
|
| |||||
13,260,228 | ||||||
India 0.2% |
| |||||
2,800 | HDFC Bank Ltd., ADR(a) | 118,832 | ||||
4,048 | Reliance Industries Ltd., GDR, 144A | 119,295 | ||||
46,000 | Sterlite Industries India Ltd., ADR | 332,580 | ||||
|
| |||||
570,707 | ||||||
Indonesia 0.1% |
| |||||
60,500 | PT Bank Mandiri Pesero Tbk | 65,338 | ||||
120,500 | PT Bank Negara Indonesia Persero Tbk | 66,927 | ||||
68,500 | PT Bank Rakyat Indonesia Persero Tbk | 66,228 | ||||
25,000 | PT Indocement Tunggal Prakarsa Tbk | 67,884 | ||||
33,000 | PT Semen Indonesia Persero Tbk | 62,453 | ||||
62,000 | PT Telekomunikasi Indonesia Persero Tbk | 74,610 | ||||
|
| |||||
403,440 | ||||||
Ireland 0.3% |
| |||||
21,000 | Ryanair Holdings PLC, ADR | 910,140 |
See Notes to Financial Statements.
10 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Israel 1.0% |
| |||||
168,960 | Bank Hapoalim BM* | $ | 784,710 | |||
41,422 | Bezeq (The) Israeli Telecommunication Corp. Ltd. | 60,082 | ||||
58,057 | Teva Pharmaceutical Industries Ltd. | 2,272,077 | ||||
3,400 | Teva Pharmaceutical Industries Ltd., ADR | 130,186 | ||||
|
| |||||
3,247,055 | ||||||
Italy 2.2% |
| |||||
128,620 | Eni SpA | 3,076,053 | ||||
143,805 | Fiat Industrial SpA | 1,623,021 | ||||
296,471 | Fiat SpA*(a) | 1,773,368 | ||||
539,731 | Telecom Italia SpA-RSP | 375,302 | ||||
|
| |||||
6,847,744 | ||||||
Japan 21.0% |
| |||||
2,000 | AEON Financial Service Co. Ltd. | 59,927 | ||||
4,000 | Air Water, Inc. | 64,625 | ||||
4,600 | Aisin Seiki Co. Ltd. | 165,861 | ||||
566,000 | Aozora Bank Ltd. | 1,770,837 | ||||
6,100 | Asahi Group Holdings Ltd. | 151,679 | ||||
30,000 | Asahi Kasei Corp. | 201,262 | ||||
29,000 | Bank of Yokohama Ltd. (The) | 176,109 | ||||
5,700 | Brother Industries Ltd. | 65,136 | ||||
8,000 | Canon, Inc. | 286,813 | ||||
22,600 | Central Japan Railway Co. | 2,724,009 | ||||
14,000 | Dai Nippon Printing Co. Ltd. | 136,862 | ||||
8,000 | Daicel Corp. | 64,420 | ||||
5,000 | Daihatsu Motor Co. Ltd. | 99,092 | ||||
2,500 | Dena Co. Ltd.(a) | 71,267 | ||||
69,000 | Denki Kagaku Kogyo K.K. | 251,977 | ||||
11,800 | Denso Corp. | 528,358 | ||||
14,900 | East Japan Railway Co. | 1,256,378 | ||||
1,300 | Fast Retailing Co. Ltd. | 476,073 | ||||
22,000 | Fuji Electric Co. Ltd. | 75,150 | ||||
138,000 | Fuji Heavy Industries Ltd. | 2,604,708 | ||||
11,300 | Fujifilm Holdings Corp. | 231,599 | ||||
17,470 | Hakuhodo DY Holdings, Inc. | 1,439,033 | ||||
169,000 | Hino Motors Ltd. | 2,577,863 | ||||
2,700 | Hitachi Construction Machinery Co. Ltd. | 64,035 | ||||
32,100 | Hitachi Ltd. | 204,813 | ||||
700 | Idemitsu Kosan Co. Ltd. | 59,096 |
See Notes to Financial Statements.
Prudential International Equity Fund | 11 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Japan (cont’d.) |
| |||||
53 | Inpex Corp. | $ | 255,527 | |||
158,300 | Itochu Corp. | 1,956,727 | ||||
1,400 | Japan Airlines Co. Ltd. | 70,944 | ||||
13,700 | Japan Exchange Group, Inc. | 1,680,792 | ||||
78,500 | Japan Tobacco, Inc. | 2,967,354 | ||||
12,200 | JFE Holdings, Inc. | 263,811 | ||||
3,000 | JGC Corp. | 88,783 | ||||
4,400 | JSR Corp. | 101,238 | ||||
53,300 | JX Holdings, Inc. | 288,684 | ||||
11,000 | Kaneka Corp. | 66,123 | ||||
6,000 | Kansai Paint Co. Ltd. | 76,873 | ||||
2,100 | Kao Corp. | 72,596 | ||||
35,000 | Kawasaki Heavy Industries Ltd. | 111,299 | ||||
63,600 | KDDI Corp. | 3,053,270 | ||||
1,200 | Keyence Corp. | 380,366 | ||||
21,000 | Kirin Holdings Co. Ltd. | 367,718 | ||||
4,000 | Koito Manufacturing Co. Ltd. | 77,222 | ||||
11,500 | Konica Minolta, Inc. | 81,279 | ||||
26,000 | Kubota Corp. | 372,591 | ||||
8,300 | Kuraray Co. Ltd. | 125,924 | ||||
6,000 | Kyowa Hakko Kirin Co. Ltd. | 73,550 | ||||
2,700 | Makita Corp. | 164,241 | ||||
39,722 | Marubeni Corp. | 284,005 | ||||
66,000 | Mazda Motor Corp.* | 226,127 | ||||
4,000 | Medipal Holdings Corp. | 62,738 | ||||
1,300 | Miraca Holdings, Inc. | 64,810 | ||||
9,000 | Mitsubishi Gas Chemical Co., Inc. | 68,688 | ||||
67,000 | Mitsubishi Heavy Industries Ltd. | 461,168 | ||||
5,400 | Mitsubishi Tanabe Pharma Corp. | 82,037 | ||||
299,700 | Mitsubishi UFJ Financial Group, Inc. | 2,038,274 | ||||
13,900 | Mitsubishi UFJ Lease & Finance Co. Ltd. | 78,280 | ||||
13,800 | Mitsui & Co. Ltd. | 189,408 | ||||
989,200 | Mizuho Financial Group, Inc. | 2,181,648 | ||||
4,800 | Murata Manufacturing Co. Ltd. | 390,460 | ||||
65,000 | Namco Bandai Holdings, Inc. | 1,183,515 | ||||
499,000 | NEC Corp. | 1,295,040 | ||||
21,000 | Nippon Express Co. Ltd. | 109,217 | ||||
53,100 | Nippon Telegraph & Telephone Corp. | 2,628,174 | ||||
3,800 | Nitto Denko Corp. | 249,474 | ||||
2,600 | Nomura Research Institute Ltd. | 78,279 |
See Notes to Financial Statements.
12 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Japan (cont’d.) |
| |||||
19,000 | OJI Holdings Corp. | $ | 67,631 | |||
5,000 | Omron Corp. | 157,717 | ||||
8,100 | Oriental Land Co. Ltd. | 1,309,494 | ||||
600 | Otsuka Corp. | 61,979 | ||||
8,900 | Otsuka Holdings Co. Ltd. | 320,449 | ||||
3,400 | Park24 Co. Ltd. | 68,534 | ||||
64,000 | Resona Holdings, Inc. | 341,386 | ||||
158,000 | Ricoh Co., Ltd. | 1,760,148 | ||||
5,100 | Secom Co. Ltd. | 284,598 | ||||
13,000 | Sekisui House Ltd. | 194,830 | ||||
2,400 | Shin-Etsu Chemical Co. Ltd. | 161,502 | ||||
7,200 | Shionogi & Co. Ltd. | 177,110 | ||||
42,000 | Showa Denko K.K.(a) | 67,641 | ||||
22,500 | SoftBank Corp. | 1,113,633 | ||||
39,300 | Sojitz Corp. | 61,680 | ||||
24,500 | Sony Corp. | 405,380 | ||||
25,200 | Sumitomo Corp. | 314,338 | ||||
17,900 | Sumitomo Electric Industries Ltd. | 237,602 | ||||
126,000 | Sumitomo Metal Mining Co. Ltd. | 1,753,931 | ||||
32,300 | Sumitomo Mitsui Financial Group, Inc. | 1,525,789 | ||||
76,000 | Sumitomo Mitsui Trust Holdings, Inc. | 381,228 | ||||
70,400 | Suzuki Motor Corp. | 1,803,962 | ||||
27,000 | Taiheiyo Cement Corp. | 70,072 | ||||
25,000 | Taisei Corp. | 83,346 | ||||
3,600 | Terumo Corp. | 178,735 | ||||
27,000 | Tokyu Corp. | 214,095 | ||||
35,000 | Toray Industries, Inc. | 245,576 | ||||
99,000 | Toshiba Corp. | 545,345 | ||||
7,000 | TOTO Ltd. | 72,524 | ||||
74,600 | Toyoda Gosei Co., Ltd. | 1,933,011 | ||||
81,400 | Toyota Boshoku Corp. | 1,168,165 | ||||
61,634 | Toyota Motor Corp. | 3,565,838 | ||||
84,100 | Toyota Tsusho Corp. | 2,338,771 | ||||
19,100 | West Japan Railway Co. | 922,819 | ||||
4,896 | Yahoo! Japan Corp. | 2,448,377 | ||||
|
| |||||
66,532,472 | ||||||
Malaysia |
| |||||
6,700 | Tenaga Nasional BHD, ADR | 68,340 |
See Notes to Financial Statements.
Prudential International Equity Fund | 13 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Mexico 0.1% |
| |||||
23,900 | ALFA SAB de CV (Class A Stock) | $ | 55,487 | |||
12,400 | Fomento Economico Mexicano SAB de CV | 140,623 | ||||
23,200 | Grupo Mexico SAB de CV (Class B Stock) | 83,286 | ||||
|
| |||||
279,396 | ||||||
Netherlands 3.8% |
| |||||
293,205 | Aegon NV | 1,934,930 | ||||
28,165 | Heineken Holding NV | 1,693,616 | ||||
2,856 | Heineken NV | 201,676 | ||||
24,102 | Koninklijke Ahold NV | 380,259 | ||||
8,580 | Koninklijke Boskalis Westminster NV | 357,345 | ||||
22,888 | Koninklijke Philips Electronics NV | 632,085 | ||||
43,410 | Royal Dutch Shell PLC (Class A Stock) | 1,478,086 | ||||
104,963 | Royal Dutch Shell PLC (Class B Stock) | 3,673,387 | ||||
39,140 | Unilever NV - CVA | 1,665,949 | ||||
|
| |||||
12,017,333 | ||||||
New Zealand |
| |||||
26,543 | Auckland International Airport Ltd. | 70,529 | ||||
Norway 1.1% |
| |||||
3,679 | Aker Solutions ASA | 51,359 | ||||
96,675 | Gjensidige Forsikring ASA | 1,557,462 | ||||
39,346 | Yara International ASA | 1,842,265 | ||||
|
| |||||
3,451,086 | ||||||
Philippines |
| |||||
2,380 | SM Investments Corp. | 66,208 | ||||
Portugal 0.6% |
| |||||
533,800 | EDP - Energias de Portugal SA | 1,834,799 | ||||
Russia 0.8% |
| |||||
36,007 | Gazprom OAO, ADR | 285,716 | ||||
24,475 | LUKOIL OAO, ADR | 1,551,715 | ||||
1,572 | Magnit OJSC, GDR, RegS | 80,172 | ||||
6,502 | MMC Norilsk Nickel OJSC, ADR | 99,611 | ||||
3,200 | Mobile Telesystems OJSC, ADR | 66,240 | ||||
8,756 | Rosneft OAO, GDR, RegS | 59,847 | ||||
2,664 | Rostelecom OJSC, ADR | 59,407 | ||||
16,907 | Sberbank of Russia, ADR | 217,424 |
See Notes to Financial Statements.
14 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Russia (cont’d.) |
| |||||
14,556 | Surgutneftegas OAO, ADR | $ | 123,726 | |||
1,676 | Tatneft OAO, ADR | 63,336 | ||||
1,611 | Uralkali OJSC, GDR, RegS | 58,302 | ||||
|
| |||||
2,665,496 | ||||||
Singapore 0.7% |
| |||||
49,000 | CapitaCommercial Trust | 68,028 | ||||
602,000 | ComfortDelGro Corp. Ltd. | 970,180 | ||||
1,469,000 | Golden Agri-Resources Ltd. | 632,110 | ||||
25,000 | Oversea-Chinese Banking Corp. Ltd. | 220,224 | ||||
17,000 | Singapore Technologies Engineering Ltd. | 60,729 | ||||
11,000 | UOL Group Ltd. | 63,676 | ||||
47,000 | Wilmar International Ltd. | 127,068 | ||||
|
| |||||
2,142,015 | ||||||
South Africa 0.6% |
| |||||
36,960 | African Rainbow Minerals Ltd. | 728,532 | ||||
2,272 | Bidvest Group Ltd. | 59,084 | ||||
115,060 | FirstRand Ltd. | 399,796 | ||||
1,236 | Kumba Iron Ore Ltd. | 65,189 | ||||
4,502 | MTN Group Ltd. | 81,165 | ||||
2,394 | Naspers Ltd. (Class N Stock) | 160,205 | ||||
3,330 | Remgro Ltd. | 67,157 | ||||
13,319 | RMB Holdings Ltd. | 59,118 | ||||
3,236 | Sasol Ltd. | 139,858 | ||||
7,304 | Standard Bank Group Ltd. | 91,244 | ||||
1,883 | Tiger Brands Ltd. | 58,569 | ||||
8,046 | Woolworths Holdings Ltd. | 62,711 | ||||
|
| |||||
1,972,628 | ||||||
South Korea 1.6% | ||||||
423 | Hyundai Mobis | 96,023 | ||||
945 | Hyundai Motor Co. | 171,186 | ||||
1,619 | Kia Motors Corp. | 80,561 | ||||
45,680 | KT Corp. | 1,495,291 | ||||
849 | KT&G Corp. | 61,133 | ||||
300 | LG Chem Ltd. | 70,825 | ||||
852 | LG Electronics, Inc. | 68,157 | ||||
170 | Lotte Shopping Co. Ltd. | 63,443 | ||||
257 | NHN Corp. | 69,075 | ||||
407 | POSCO | 116,043 |
See Notes to Financial Statements.
Prudential International Equity Fund | 15 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
South Korea (cont’d.) |
| |||||
1,093 | Samsung C&T Corp. | $ | 58,555 | |||
1,047 | Samsung Electronics Co. Ltd. | 1,445,056 | ||||
1,630 | Samsung Electronics Co. Ltd., GDR, RegS | 1,124,852 | ||||
3,260 | SK Hynix, Inc.* | 88,508 | ||||
|
| |||||
5,008,708 | ||||||
Spain 2.4% | ||||||
86,475 | Banco Santander SA | 625,333 | ||||
72,175 | Enagas SA | 1,922,880 | ||||
104,979 | Ferrovial SA | 1,737,138 | ||||
37,062 | Gas Natural SDG SA | 776,060 | ||||
4,898 | Inditex SA | 658,266 | ||||
31,249 | Red Electrica Corp. SA | 1,662,185 | ||||
14,921 | Repsol SA | 349,774 | ||||
|
| |||||
7,731,636 | ||||||
Sweden 2.7% | ||||||
6,601 | Boliden AB | 104,499 | ||||
19,038 | Industrivarden AB (Class C Stock) | 355,436 | ||||
70,411 | Investor AB (Class B Stock) | 2,075,050 | ||||
63,617 | Nordea Bank AB | 762,200 | ||||
192,655 | Skandinaviska Enskilda Banken (Class A Stock) | 1,976,772 | ||||
21,717 | Svenska Cellulosa AB (Class B Stock) | 563,947 | ||||
111,153 | Swedbank AB (Class A Stock) | 2,735,499 | ||||
|
| |||||
8,573,403 | ||||||
Switzerland 7.1% | ||||||
9,834 | Actelion Ltd. | 601,272 | ||||
2,154 | Banque Cantonale Vaudoise | 1,191,905 | ||||
2,060 | Cie Financiere Richemont SA | 166,386 | ||||
1,225 | EMS-Chemie Holding AG | 354,075 | ||||
666 | Geberit AG | 162,668 | ||||
200 | Givaudan SA* | 257,260 | ||||
1,231 | Lonza Group AG | 85,725 | ||||
71,763 | Nestle SA | 5,124,826 | ||||
44,146 | Novartis AG | 3,278,427 | ||||
931 | Partners Group Holding AG | 238,808 | ||||
25,619 | Roche Holding AG | 6,403,372 | ||||
740 | Swatch Group AG (The) | 423,801 | ||||
35,319 | Swiss Re AG | 2,809,034 | ||||
2,268 | Syngenta AG | 969,352 |
See Notes to Financial Statements.
16 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Switzerland (cont’d.) |
| |||||
8,838 | Transocean Ltd.* | $ | 451,215 | |||
|
| |||||
22,518,126 | ||||||
Taiwan 0.4% | ||||||
5,000 | Asustek Computer, Inc. | 58,197 | ||||
13,000 | Catcher Technology Co. Ltd. | 65,854 | ||||
15,000 | Delta Electronics, Inc. | 71,920 | ||||
48,000 | Fubon Financial Holding Co. Ltd. | 68,555 | ||||
63,000 | Hon Hai Precision Industry Co. Ltd. | 162,666 | ||||
74,000 | Mega Financial Holding Co. Ltd. | 57,045 | ||||
160,000 | Taiwan Semiconductor Manufacturing Co. Ltd. | 593,657 | ||||
3,000 | TPK Holding Co. Ltd. | 60,890 | ||||
35,000 | Uni-President Enterprises Corp. | 68,904 | ||||
|
| |||||
1,207,688 | ||||||
Thailand 0.1% | ||||||
79,275 | Krung Thai Bank PCL | 66,985 | ||||
25,400 | PTT Global Chemical PCL | 63,176 | ||||
5,300 | PTT PCL | 58,869 | ||||
10,800 | Siam Commercial Bank PCL | 68,443 | ||||
|
| |||||
257,473 | ||||||
Turkey | ||||||
6,000 | Akbank TAS, ADR | 62,880 | ||||
United Kingdom 17.7% | ||||||
350,155 | Aberdeen Asset Management PLC | 2,440,539 | ||||
111,031 | ARM Holdings PLC | 1,717,801 | ||||
18,320 | Associated British Foods PLC | 550,650 | ||||
71,513 | AstraZeneca PLC | 3,713,006 | ||||
348,290 | BAE Systems PLC | 2,031,516 | ||||
103,556 | BHP Billiton PLC | 2,880,979 | ||||
668,979 | BP PLC | 4,846,635 | ||||
75,455 | British American Tobacco | 4,179,638 | ||||
568,859 | BT Group PLC | 2,440,605 | ||||
71,818 | Bunzl PLC | 1,426,833 | ||||
86,384 | Burberry Group PLC | 1,792,706 | ||||
50,650 | Capita PLC | 710,061 | ||||
75,925 | Diageo PLC | 2,316,304 | ||||
54,251 | GlaxoSmithKline PLC | 1,399,316 | ||||
299,413 | HSBC Holdings PLC | 3,271,930 |
See Notes to Financial Statements.
Prudential International Equity Fund | 17 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
United Kingdom (cont’d.) |
| |||||
22,419 | International Consolidated Airlines Group SA* | $ | 94,479 | |||
953,912 | ITV PLC | 1,865,535 | ||||
322,768 | J Sainsbury PLC | 1,910,727 | ||||
48,538 | Meggitt PLC | 353,308 | ||||
222,242 | National Grid PLC | 2,829,074 | ||||
27,723 | Next PLC | 1,877,139 | ||||
108,209 | Prudential PLC | 1,857,355 | ||||
37,716 | Reckitt Benckiser Group PLC | 2,751,205 | ||||
2,253 | SABMiller PLC | 121,387 | ||||
6,800 | Schroders PLC | 246,641 | ||||
116,083 | Standard Chartered PLC | 2,915,734 | ||||
330,380 | TUI Travel PLC | 1,612,974 | ||||
692,760 | Vodafone Group PLC | 2,111,306 | ||||
|
| |||||
56,265,383 | ||||||
United States | ||||||
1,634 | Millicom International Cellular SA | 133,623 | ||||
1,700 | Southern Copper Corp. | 56,661 | ||||
|
| |||||
190,284 | ||||||
|
| |||||
Total common stocks | 307,429,894 | |||||
|
| |||||
EXCHANGE TRADED FUND 1.2% | ||||||
United States | ||||||
63,300 | iShares MSCI EAFE Index Fund | 3,920,802 | ||||
|
| |||||
PREFERRED STOCKS 1.3% | ||||||
Brazil 1.1% | ||||||
13,800 | Banco Bradesco SA | 226,787 | ||||
4,800 | Cia de Bebidas das Americas | 200,805 | ||||
5,400 | Cia Energetica de Minas Gerais | 68,743 | ||||
15,800 | Itausa - Investimentos Itau SA | 78,181 | ||||
8,600 | Klabin SA | 57,555 | ||||
432,100 | Oi SA | 1,058,248 | ||||
28,000 | Petroleo Brasileiro SA | 279,475 | ||||
2,200 | Telefonica Brasil SA | 58,410 | ||||
94,000 | Vale SA | 1,526,458 | ||||
|
| |||||
3,554,662 |
See Notes to Financial Statements.
18 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
PREFERRED STOCKS (Continued) |
| |||||
Germany 0.1% | ||||||
1,283 | Bayerische Motoren Werke AG | $ | 89,179 | |||
South Korea 0.1% | ||||||
447 | Samsung Electronics Co. Ltd. | 353,525 | ||||
|
| |||||
Total preferred stocks | 3,997,366 | |||||
|
| |||||
Units | ||||||
RIGHT | ||||||
Spain | ||||||
2,543 | Banco Santander SA | 18,390 | ||||
|
| |||||
Total long-term investments | 315,366,452 | |||||
|
| |||||
Principal Amount (000) | ||||||
SHORT-TERM INVESTMENTS 1.2% | ||||||
United States Government Security | ||||||
$ 150 | U.S. Treasury Bill | 149,996 | ||||
|
| |||||
Shares | ||||||
Affiliated Money Market Mutual Fund 1.2% | ||||||
3,828,491 | Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | 3,828,491 | ||||
|
| |||||
Total short-term investments | 3,978,487 | |||||
|
| |||||
Total Investments 100.6% | 319,344,939 | |||||
Liabilities in excess of other assets(f) (0.6%) | (1,985,853 | ) | ||||
|
| |||||
Net Assets 100.0% | $ | 317,359,086 | ||||
|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 19 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
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.
ADR—American Depositary Receipt
CVA—Certificate Van Aandelan (Bearer)
GDR—Global Depositary Receipt
RSP—Risparmio Shares
* | 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 $3,511,070; cash collateral of $3,827,616 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. |
(b) | Represents security, or a portion thereof, segregated as collateral for futures contract. |
(c) | Rate quoted represents yield-to-maturity as of purchase date. |
(d) | Prudential Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund. |
(e) | Represents security, or a portion thereof, purchased with cash collateral received for securities on loan. |
(f) | Includes net unrealized appreciation on the following derivative contracts held at reporting period end: |
Open futures contracts outstanding at April 30, 2013:
Number of Contracts | Type | Expiration Date | Value at April 30, 2013 | Value at Trade Date | Unrealized Appreciation/ (Depreciation) | |||||||||||||||
Long Positions: | ||||||||||||||||||||
2 | DAX Index | Jun. 2013 | $ | 521,578 | $ | 525,809 | $ | (4,231 | ) | |||||||||||
5 | TOPIX Index | Jun. 2013 | 598,554 | 588,086 | 10,468 | |||||||||||||||
4 | FTSE 100 Index | Jun. 2013 | 396,632 | 398,497 | (1,865 | ) | ||||||||||||||
|
| |||||||||||||||||||
$ | 4,372 | |||||||||||||||||||
|
|
Various inputs are used in determining the value of the Series’ 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.
See Notes to Financial Statements.
20 | Visit our website at www.prudentialfunds.com |
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 April 30, 2013 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | 23,377,110 | $ | — | $ | — | ||||||
Austria | 1,881,262 | — | — | |||||||||
Belgium | 4,316,127 | — | — | |||||||||
Brazil | 625,272 | — | — | |||||||||
Chile | 65,607 | — | — | |||||||||
China | 5,395,958 | — | — | |||||||||
Denmark | 1,827,248 | — | — | |||||||||
Finland | 5,455,975 | — | — | |||||||||
France | 23,529,061 | — | — | |||||||||
Germany | 22,729,978 | — | — | |||||||||
Greece | 71,099 | — | — | |||||||||
Hong Kong | 13,260,228 | — | — | |||||||||
India | 570,707 | — | — | |||||||||
Indonesia | 403,440 | — | — | |||||||||
Ireland | 910,140 | — | — | |||||||||
Israel | 3,247,055 | — | — | |||||||||
Italy | 6,847,744 | — | — | |||||||||
Japan | 66,532,472 | — | — | |||||||||
Malaysia | 68,340 | — | — | |||||||||
Mexico | 279,396 | — | — | |||||||||
Netherlands | 12,017,333 | — | — | |||||||||
New Zealand | 70,529 | — | — | |||||||||
Norway | 3,451,086 | — | — | |||||||||
Philippines | 66,208 | — | — | |||||||||
Portugal | 1,834,799 | — | — | |||||||||
Russia | 2,665,496 | — | — | |||||||||
Singapore | 2,142,015 | — | — | |||||||||
South Africa | 1,972,628 | — | — | |||||||||
South Korea | 5,008,708 | — | — | |||||||||
Spain | 7,731,636 | — | — | |||||||||
Sweden | 8,573,403 | — | — | |||||||||
Switzerland | 22,518,126 | — | — | |||||||||
Taiwan | 1,207,688 | — | — | |||||||||
Thailand | — | 257,473 | — |
See Notes to Financial Statements.
Prudential International Equity Fund | 21 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
Turkey | $ | 62,880 | $ | — | $ | — | ||||||
United Kingdom | 56,265,383 | — | — | |||||||||
United States | 190,284 | — | — | |||||||||
Exchange Traded Fund | ||||||||||||
United States | 3,920,802 | — | — | |||||||||
Preferred Stocks | ||||||||||||
Brazil | 3,554,662 | — | — | |||||||||
Germany | 89,179 | — | — | |||||||||
South Korea | 353,525 | — | — | |||||||||
Right | ||||||||||||
Spain | 18,390 | — | — | |||||||||
United States Government Security | — | 149,996 | — | |||||||||
Affiliated Money Market Mutual Fund | 3,828,491 | — | — | |||||||||
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| |||||||
318,937,470 | 407,469 | — | ||||||||||
Other Financial Instruments* | ||||||||||||
Futures Contracts | 4,372 | — | — | |||||||||
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|
|
|
| |||||||
Total | $ | 318,941,842 | $ | 407,469 | $ | — | ||||||
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* | 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 industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2013 was as follows:
Commercial Banks | 13.0 | % | ||
Pharmaceuticals | 8.6 | |||
Oil, Gas & Consumable Fuels | 7.4 | |||
Insurance | 5.5 | |||
Automobiles | 3.9 | |||
Metals & Mining | 3.9 | |||
Chemicals | 3.5 | |||
Food Products | 3.3 | |||
Diversified Telecommunication Services | 3.0 | |||
Food & Staples Retailing | 3.0 | |||
Real Estate Management & Development | 2.8 | |||
Tobacco | 2.3 | |||
Wireless Telecommunication Services | 2.2 | |||
Trading Companies & Distributors | 2.1 | |||
Road & Rail | 2.0 | |||
Machinery | 1.9 | |||
Aerospace & Defense | 1.8 | |||
Beverages | 1.8 | % | ||
Media | 1.7 | |||
Multi-Utilities | 1.7 | |||
Semiconductors & Semiconductor Equipment | 1.7 | |||
Diversified Financial Services | 1.6 | |||
Electric Utilities | 1.6 | |||
Auto Components | 1.4 | |||
Real Estate Investment Trusts | 1.4 | |||
Construction & Engineering | 1.4 | |||
Exchange Traded Fund | 1.2 | |||
Affiliated Money Market Mutual Fund (including 1.2% of collateral received for securities on loan) | 1.2 | |||
Industrial Conglomerates | 1.1 | |||
Hotels, Restaurants & Leisure | 1.1 | |||
Household Products | 1.1 | |||
Capital Markets | 0.9 |
See Notes to Financial Statements.
22 | Visit our website at www.prudentialfunds.com |
Industry (cont’d.) | ||||
Gas Utilities | 0.9 | % | ||
Internet Software & Services | 0.8 | |||
Multiline Retail | 0.8 | |||
Textiles, Apparel & Luxury Goods | 0.8 | |||
Office Electronics | 0.7 | |||
Computers & Peripherals | 0.6 | |||
Electronic Equipment, Instruments & Components | 0.5 | |||
Paper & Forest Products | 0.5 | |||
IT Services | 0.4 | |||
Biotechnology | 0.4 | |||
Leisure Equipment & Products | 0.4 | |||
Specialty Retail | 0.4 | |||
Airlines | 0.3 | |||
Construction Materials | 0.3 | % | ||
Electrical Equipment | 0.2 | |||
Healthcare Providers & Services | 0.2 | |||
Professional Services | 0.2 | |||
Household Durables | 0.2 | |||
Air Freight & Logistics | 0.2 | |||
Energy Equipment & Services | 0.2 | |||
Commercial Services & Supplies | 0.2 | |||
Healthcare Equipment & Supplies | 0.1 | |||
Building Products | 0.1 | |||
Software | 0.1 | |||
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| |||
100.6 | ||||
Liabilities in excess of other assets | (0.6 | ) | ||
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| |||
100.0 | % | |||
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|
The Series invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Series’ 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 April 30, 2013 as presented in the Statement of Assets and Liabilities:
Derivatives not designated | Asset Derivatives | Liability Derivatives | ||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||
Equity contracts | Due from broker—variation margin | $ | 4,372 | * | — | $ | — | |||||
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* | Includes cumulative appreciation/depreciation as reported in the schedule of open futures contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
See Notes to Financial Statements.
Prudential International Equity Fund | 23 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
The effects of derivative instruments on the Statement of Operations for the period ended April 30, 2013 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||||||||
Derivatives not designated as hedging | Futures | Rights | Total | |||||||||
Equity contracts | $ | 133,185 | $ | 46,891 | $ | 180,076 | ||||||
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| |||||||
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||||||||||
Derivatives not designated as hedging | Futures | Rights | Total | |||||||||
Equity contracts | $ | 11,689 | $ | (14,977 | ) | $ | (3,288 | ) | ||||
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For the six months ended April 30, 2013, the average value at trade date for futures contracts was $1,248,326.
See Notes to Financial Statements.
24 | Visit our website at www.prudentialfunds.com |
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
FINANCIAL STATEMENTS
(UNAUDITED)
SEMIANNUAL REPORT · APRIL 30, 2013
Prudential International Equity Fund
Statement of Assets and Liabilities
as of April 30, 2013 (Unaudited)
Assets | ||||
Investments at value, including securities on loan of $3,511,070: | ||||
Unaffiliated investments (cost $253,646,051) | $ | 315,516,448 | ||
Affiliated investments (cost $3,828,491) | 3,828,491 | |||
Foreign currency, at value (cost $948,071) | 953,117 | |||
Dividends and interest receivable | 1,430,025 | |||
Receivable for investments sold | 971,605 | |||
Foreign tax reclaim receivable | 894,545 | |||
Receivable for Series shares sold | 48,421 | |||
Due from broker—variation margin | 5,966 | |||
Prepaid expenses | 1,442 | |||
|
| |||
Total assets | 323,650,060 | |||
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| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 3,827,616 | |||
Loan payable | 884,000 | |||
Payable for Series shares reacquired | 705,931 | |||
Accrued expenses | 333,766 | |||
Management fee payable | 215,696 | |||
Payable for investments purchased | 177,366 | |||
Distribution fee payable | 74,985 | |||
Affiliated transfer agent fee payable | 71,614 | |||
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| |||
Total liabilities | 6,290,974 | |||
|
| |||
Net Assets | $ | 317,359,086 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 461,724 | ||
Paid-in capital in excess of par | 494,853,344 | |||
|
| |||
495,315,068 | ||||
Undistributed net investment income | 1,620,554 | |||
Accumulated net realized loss on investment and foreign currency transactions | (241,480,125 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 61,903,589 | |||
|
| |||
Net assets, April 30, 2013 | $ | 317,359,086 | ||
|
|
See Notes to Financial Statements.
26 | Visit our website at www.prudentialfunds.com |
Class A | ||||
Net asset value and redemption price per share | $ | 6.89 | ||
Maximum sales charge (5.50% of offering price) | 0.40 | |||
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| |||
Maximum offering price to public | $ | 7.29 | ||
|
| |||
Class B | ||||
Net asset value, offering price and redemption price per share | $ | 6.63 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 6.63 | ||
|
| |||
Class F | ||||
Net asset value, offering price and redemption price per share | $ | 6.63 | ||
|
| |||
Class X | ||||
Net asset value, offering price and redemption price per share | $ | 6.63 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 6.93 | ||
|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 27 |
Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Net Investment Income | ||||
Income | ||||
Unaffiliated dividends (net of foreign withholding taxes of $428,542) | $ | 5,295,781 | ||
Affiliated income from securities loaned, net | 12,119 | |||
Interest income | 633 | |||
Affiliated dividend income | 516 | |||
|
| |||
Total income | 5,309,049 | |||
|
| |||
Expenses | ||||
Management fee | 1,262,697 | |||
Distribution fee—Class A | 324,144 | |||
Distribution fee—Class B | 28,004 | |||
Distribution fee—Class C | 90,087 | |||
Distribution fee—Class F | 2,181 | |||
Distribution fee—Class X | 2,852 | |||
Transfer agent’s fees and expenses (including affiliated expense of $57,400) (Note 3) | 435,000 | |||
Custodian’s fees and expenses | 122,000 | |||
Registration fees | 50,000 | |||
Reports to shareholders | 26,000 | |||
Audit fee | 17,000 | |||
Legal fees and expenses | 12,000 | |||
Directors’ fees | 8,000 | |||
Insurance | 3,000 | |||
Loan interest expense (Note 7) | 1,982 | |||
Miscellaneous | 28,990 | |||
|
| |||
Total expenses | 2,413,937 | |||
|
| |||
Net investment income | 2,895,112 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment, Futures And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 16,774,364 | |||
Foreign currency transactions | (105,891 | ) | ||
Financial futures transactions | 133,185 | |||
|
| |||
16,801,658 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 26,699,971 | |||
Foreign currencies | 18,989 | |||
Financial futures contracts | 11,689 | |||
|
| |||
26,730,649 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 43,532,307 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 46,427,419 | ||
|
|
See Notes to Financial Statements.
28 | Visit our website at www.prudentialfunds.com |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2013 | Year Ended October 31, 2012 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 2,895,112 | $ | 6,127,882 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 16,801,658 | (6,974,442 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 26,730,649 | 20,668,340 | ||||||
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| |||||
Net increase in net assets resulting from operations | 46,427,419 | 19,821,780 | ||||||
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Dividends from net investment income (Note 1) | ||||||||
Class A | (4,559,841 | ) | (4,099,544 | ) | ||||
Class B | (87,134 | ) | (85,513 | ) | ||||
Class C | (283,431 | ) | (268,526 | ) | ||||
Class F | (10,934 | ) | (23,756 | ) | ||||
Class L | — | (145,518 | ) | |||||
Class M | — | (8,376 | ) | |||||
Class X | (9,832 | ) | (19,252 | ) | ||||
Class Z | (1,229,773 | ) | (1,011,006 | ) | ||||
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| |||||
(6,180,945 | ) | (5,661,491 | ) | |||||
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| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 12,887,726 | 14,167,452 | ||||||
Net asset value of shares issued in reinvestment of dividends | 6,043,854 | 5,514,066 | ||||||
Cost of shares reacquired | (26,404,427 | ) | (48,997,598 | ) | ||||
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| |||||
Net decrease in net assets from Series share transactions | (7,472,847 | ) | (29,316,080 | ) | ||||
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| |||||
Total increase (decrease) | 32,773,627 | (15,155,791 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 284,585,459 | 299,741,250 | ||||||
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| |||||
End of period(a) | $ | 317,359,086 | $ | 284,585,459 | ||||
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| |||||
(a) Includes undistributed net investment income of: | $ | 1,620,554 | $ | 4,906,387 | ||||
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|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 29 |
Notes to Financial Statements
(Unaudited)
Prudential World Fund, Inc. (the “Fund”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”) and currently consists of five series: Prudential International Equity Fund (the “Series”), Prudential International Value Fund, Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund and Prudential Emerging Markets Debt Local Currency Fund. These financial statements relate to the Prudential International Equity Fund. The financial statements of the other series are not presented herein.
The investment objective of the Series is to achieve long-term growth of capital.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of the financial statements.
Securities Valuation: The Series holds portfolio 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 delegated fair valuation responsibilities to Prudential Investments LLC (“PI” or “Manager”) through the adoption of Valuation Procedures for valuation of the Series’ securities. Under the current Valuation Procedures, a Valuation Committee is established and responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures allow the Series to utilize independent pricing vendor services, quotations from market makers and other valuation methods in events when market quotations are not readily available or not representative of the fair value of the securities. A record of the Valuation Committee’s actions is subject to review, approval and ratification by the Board at its next regularly scheduled quarterly meeting.
Various inputs are used in determining the value of the Series’ investments, which are summarized in the three broad level hierarchies based on any observable inputs used as described in the table following the Portfolio of Investments. The valuation
30 | Visit our website at www.prudentialfunds.com |
methodologies and significant inputs used in determining the fair value of securities and other assets classified as Level 1, Level 2 and Level 3 of the hierarchy are as follows:
Common stocks, exchange-traded funds and financial derivative instruments (including futures contracts and certain options and swap contracts on securities), 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 of the fair value hierarchy.
In the event there is no sale or official closing price on such day, these securities are valued at the mean between the last reported bid and asked prices, or at the last bid price in absence of an asked price. These securities are classified as Level 2 of the fair value hierarchy as these inputs are considered as significant other observable inputs to the valuation.
For common stocks traded on foreign securities exchanges, certain valuation adjustments will be applied when events occur after the close of the security’s foreign market and before the Series’ normal pricing time. These securities 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 of the fair value hierarchy as the adjustment factors are considered as significant other observable inputs 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 as they have the ability to be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market, such as corporate bonds, municipal bonds, U.S. Government agencies issues and guaranteed obligations, U.S. Treasury obligations and sovereign issues are usually valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices usually after evaluating observable inputs including yield curves, credit rating, yield spreads, default rates, cash flows as well as broker/dealer quotations and reported trades. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Prudential International Equity Fund | 31 |
Notes to Financial Statements
(Unaudited) continued
Asset-backed and mortgage-related securities are usually valued by approved independent pricing vendors. The pricing vendors provide the prices using their internal pricing models with inputs from deal terms, tranche level attributes, yield curves, prepayment speeds, default rates and broker/dealer quotes. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Short-term debt securities of sufficient credit quality, which mature in sixty days or less, are valued using amortized cost method, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy.
Over-the-counter financial derivative instruments, such as option contracts, foreign currency contracts and swaps agreements, are usually valued using pricing vendor services, which derive the valuation based on underlying asset prices, indices, spreads, interest rates, exchange rates and other inputs. These instruments are categorized as Level 2 of the fair value hierarchy.
Securities and other assets that cannot be priced using the methods described above are valued with pricing methodologies approved by the Valuation Committee. In the event there are unobservable inputs used when determining such valuations, the securities will be classified as Level 3 of 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.
32 | Visit our website at www.prudentialfunds.com |
Foreign Currency Translation: The books and records of the Series 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 are presented at the foreign exchange rates and market values at the close of the period, the Series 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 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, realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.
Net realized gains or losses on foreign currency transactions represent net foreign exchange gains or losses from holdings of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability, or the level of governmental supervision and regulation of foreign securities markets.
Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Series 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 Series 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
Prudential International Equity Fund | 33 |
Notes to Financial Statements
(Unaudited) continued
basis as unrealized gain or loss. When the contract expires or is closed, the gain or loss is realized and is presented in the Statement of Operations as net realized gain or loss on financial futures transactions. The Series invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Series intends to purchase, against fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates. Should interest rates move unexpectedly, the Series 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 both risk in excess of the amounts reflected on the Statement of Assets and Liabilities.
With exchange-traded futures, there is a minimal counterparty credit risk to the Series since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Securities Lending: The Series may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in a highly liquid short-term money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Series. Upon termination of the loan, the borrower will return to the Series securities identical to the loaned securities. Should the borrower of the securities fail financially, the Series has the right to repurchase the securities using the collateral in the open market. The Series recognizes income, net of any rebate and securities lending agent fees, for lending its securities, and any interest on the investment of cash received as collateral. The Series 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.
Warrants and Rights: The Series may 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 Series until
34 | Visit our website at www.prudentialfunds.com |
exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board of Trustees’ approved fair valuation procedures.
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.
Net investment income or loss (other than distribution fees which are charged directly 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.
Dividends and Distributions: The Series expects to pay dividends from net investment income and distributions from net realized capital gains, if any, at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends are recorded, net of reclaimable amounts, at the time the related income is earned.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement for the Series with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises
Prudential International Equity Fund | 35 |
Notes to Financial Statements
(Unaudited) continued
the subadvisor’s performance of such services. PI entered into a subadvisory agreement with Quantitative Management Associates LLC (“QMA”). The subadvisory agreement provides that QMA furnishes investment advisory services in connection with the management of the Series. In connection therewith, QMA is obligated to keep certain books and records of the Series. PI pays for the services of QMA, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly, at an annual rate of .85% of the average daily net assets of the Series up to and including $300 million, .75% of the average daily net assets in excess of $300 million up to and including $1.5 billion and .70% of the Series’ average daily net assets over $1.5 billion. The effective management fee was 0.85% for the six months ended April 30, 2013.
The Series has distribution agreements with Prudential Investment Management Services LLC (“PIMS”) and Prudential Annuities Distributors, Inc. (“PAD”). PIMS and PAD are both affiliates of PI and indirect, wholly-owned subsidiaries of Prudential. PIMS serves as the distributor of the Series’ Class A, Class B, Class C, Class F, and Class Z shares. PIMS, together with PAD, serves as co-distributor of the Series’ Class X shares.
The Series has adopted a separate Distribution and Service plan (each a “Plan” and collectively the “Plans”) for the Class A, Class B, Class C, Class F and Class X shares of the Series in accordance with Rule 12b-1 of the 1940 Act. No distribution or service fees are paid to PIMS as distributor for the Series’ Class Z shares. Under the Plans, the Series compensates PIMS and PAD a distribution and service fee at the annual rate of .30%, 1%, 1%, .75% and 1% of the average daily net assets of the Class A, B, C, F and X shares, respectively.
PIMS has advised the Series that they received $36,474 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2013. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that for the six months ended April 30, 2013 it received $167, $4,712, $134, and $17 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B, Class C and Class F shareholders, respectively.
36 | Visit our website at www.prudentialfunds.com |
PI, QMA and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ 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.
Prudential Investment Management, Inc. (“PIM”), an indirect, wholly-owned subsidiary of Prudential, is the Series’ security lending agent. For the six months ended April 30, 2013, PIM has been compensated approximately $3,600 for these services.
The Series invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a series of the Prudential Investment Portfolios 2, registered under the 1940 Act, and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2013 aggregated $178,258,790 and $190,052,711, respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2013 were as follows:
Tax Basis | Appreciation | Depreciation | Net Appreciation | |||
$262,466,655 | $60,503,357 | $(3,625,073) | $56,878,284 |
The difference between book basis and tax basis were primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies as of the most recent fiscal year end.
Under the Regulated Investment Company Modernization Act of 2010 (“the Act”), the Series are permitted to carryforward capital losses incurred in the fiscal year ended
Prudential International Equity Fund | 37 |
Notes to Financial Statements
(Unaudited) continued
October 31, 2012 (“post-enactment losses”) for an unlimited period. Post-enactment losses are required to be utilized before the utilization of losses incurred prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before October 31, 2012 (“pre-enactment losses”) may have an increased likelihood to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of October 31, 2012, the pre and post-enactment losses were approximately:
Post-Enactment Losses: | $ | 10,497,000 | ||
|
| |||
Pre-Enactment Losses: | ||||
Expiring 2016 | $ | 51,069,000 | ||
Expiring 2017 | 184,078,000 | |||
Expiring 2018 | 8,337,000 | |||
|
| |||
$ | 243,484,000 | |||
|
|
Management has analyzed the Series’ 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 Series’ financial statements for the current reporting period. The Series’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Note 6. Capital
The Series offers Class A, B, C, F, X and Z shares. Class A shares are sold with a front-end sales charge of up to 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. The Class A CDSC is waived for purchases by certain retirement and/or benefit plans. Class B and F shares are sold with a CDSC which declines from 5% to zero depending on the period of time the shares are held. Class B and F shares will automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months after purchase. As of April 13, 2012, the last conversion of Class M shares to Class A shares
38 | Visit our website at www.prudentialfunds.com |
was completed. There are no Class M shares outstanding and Class M shares are no longer being offered for sale. As of August 24, 2012, the last conversion of Class L to Class A shares was completed. There are no Class L shares outstanding and Class L shares are no longer being offered for sale. Class X shares are sold with a CDSC which declines from 6% to zero depending on the period of time the shares are held. Class X shares will automatically convert to Class A shares on a quarterly basis approximately ten years after purchase. A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock.
There are 1 billion authorized shares of common stock at $.01 par value per share, designated Class A, Class B, Class C, Class F, Class X, Class New X and Class Z, each of which consists of 225 million, 150 million, 150 million, 50 million, 50 million, 50 million and 225 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 570,703 | $ | 3,658,698 | |||||
Shares issued in reinvestment of dividends | 709,935 | 4,437,093 | ||||||
Shares reacquired | (2,976,317 | ) | (18,939,655 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,695,679 | ) | (10,843,864 | ) | ||||
Shares issued upon conversion from Class B, F, X, Z | 149,719 | 967,268 | ||||||
Shares reacquired upon conversion into Class Z | (24,106 | ) | (155,557 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,570,066 | ) | $ | (10,032,153 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 864,508 | $ | 4,905,840 | |||||
Shares issued in reinvestment of dividends | 728,075 | 3,975,267 | ||||||
Shares reacquired | (6,177,492 | ) | (34,983,562 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (4,584,909 | ) | (26,102,455 | ) | ||||
Shares issued upon conversion from Class B, F, L, M, X and Z | 1,928,338 | 11,103,809 | ||||||
Shares reacquired upon conversion into Class Z | (25,419 | ) | (142,616 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (2,681,990 | ) | $ | (15,141,262 | ) | |||
|
|
|
|
Prudential International Equity Fund | 39 |
Notes to Financial Statements
(Unaudited) continued
Class B | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 61,321 | $ | 378,895 | |||||
Shares issued in reinvestment of dividends | 14,301 | 86,379 | ||||||
Shares reacquired | (65,759 | ) | (402,911 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 9,863 | 62,363 | ||||||
Shares reacquired upon conversion into Class A | (58,589 | ) | (365,786 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (48,726 | ) | $ | (303,423 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 111,371 | $ | 613,085 | |||||
Shares issued in reinvestment of dividends | 15,550 | 82,106 | ||||||
Shares reacquired | (179,800 | ) | (991,389 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (52,879 | ) | (296,198 | ) | ||||
Shares reacquired upon conversion into Class A | (228,345 | ) | (1,240,947 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (281,224 | ) | $ | (1,537,145 | ) | |||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 97,603 | $ | 603,618 | |||||
Shares issued in reinvestment of dividends | 45,635 | 275,180 | ||||||
Shares reacquired | (342,206 | ) | (2,090,696 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (198,968 | ) | $ | (1,211,898 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 82,903 | $ | 448,880 | |||||
Shares issued in reinvestment of dividends | 48,720 | 256,753 | ||||||
Shares reacquired | (953,320 | ) | (5,234,986 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (821,697 | ) | $ | (4,529,353 | ) | |||
|
|
|
| |||||
Class F | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 1 | $ | 7 | |||||
Shares issued in reinvestment of dividends | 1,732 | 10,446 | ||||||
Shares reacquired | (6,539 | ) | (39,654 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (4,806 | ) | (29,201 | ) | ||||
Shares reacquired upon conversion into Class A | (43,495 | ) | (271,508 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (48,301 | ) | $ | (300,709 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | — | $ | — | |||||
Shares issued in reinvestment of dividends | 4,166 | 21,956 | ||||||
Shares reacquired | (35,112 | ) | (191,289 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (30,946 | ) | (169,333 | ) | ||||
Shares reacquired upon conversion into Class A | (136,961 | ) | (744,258 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (167,907 | ) | $ | (913,591 | ) | |||
|
|
|
|
40 | Visit our website at www.prudentialfunds.com |
Class L | Shares | Amount | ||||||
Period ended August 24, 2012*: | ||||||||
Shares sold | 3,145 | $ | 18,342 | |||||
Shares issued in reinvestment of dividends | 25,883 | 141,578 | ||||||
Shares reacquired | (216,083 | ) | (1,216,032 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (187,055 | ) | (1,056,112 | ) | ||||
Shares reacquired upon conversion into Class A | (1,322,525 | ) | (7,692,865 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,509,580 | ) | $ | (8,748,977 | ) | |||
|
|
|
| |||||
Class M | ||||||||
Period ended April 13, 2012**: | ||||||||
Shares sold | 68 | $ | 390 | |||||
Shares issued in reinvestment of dividends | 1,251 | 6,604 | ||||||
Shares reacquired | (6,526 | ) | (33,729 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (5,207 | ) | (26,735 | ) | ||||
Shares reacquired upon conversion into Class A | (129,902 | ) | (704,453 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (135,109 | ) | $ | (731,188 | ) | |||
|
|
|
| |||||
Class X | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 1,413 | $ | 8,762 | |||||
Shares issued in reinvestment of dividends | 1,618 | 9,772 | ||||||
Shares reacquired | (6,292 | ) | (38,305 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (3,261 | ) | (19,771 | ) | ||||
Shares reacquired upon conversion into Class A | (53,151 | ) | (327,781 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (56,412 | ) | $ | (347,552 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 1,009 | $ | 5,961 | |||||
Shares issued in reinvestment of dividends | 3,618 | 19,104 | ||||||
Shares reacquired | (38,488 | ) | (209,600 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (33,861 | ) | (184,535 | ) | ||||
Shares reacquired upon conversion into Class A | (129,227 | ) | (708,225 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (163,088 | ) | $ | (892,760 | ) | |||
|
|
|
|
Prudential International Equity Fund | 41 |
Notes to Financial Statements
(Unaudited) continued
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 1,263,157 | $ | 8,237,746 | |||||
Shares issued in reinvestment of dividends | 194,751 | 1,224,984 | ||||||
Shares reacquired | (751,823 | ) | (4,893,206 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 706,085 | 4,569,524 | ||||||
Shares issued upon conversion from Class A | 23,945 | 155,557 | ||||||
Shares reacquired upon conversion into Class A | (341 | ) | (2,193 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 729,689 | $ | 4,722,888 | |||||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 1,463,078 | $ | 8,174,954 | |||||
Shares issued in reinvestment of dividends | 184,098 | 1,010,698 | ||||||
Shares reacquired | (1,067,476 | ) | (6,137,011 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 579,700 | 3,048,641 | ||||||
Shares issued upon conversion from Class A and C | 25,254 | 142,616 | ||||||
Shares reacquired upon conversion into Class A | (2,366 | ) | (13,061 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 602,588 | $ | 3,178,196 | |||||
|
|
|
|
* | As of August 24, 2012, the last conversion of Class L shares to Class A shares was completed. There are no Class L shares outstanding and Class L shares are no longer being offered for sale. |
** | As of April 13, 2012, the last conversion of Class M shares to Class A shares was completed. There are no Class M shares outstanding and Class M shares are no longer being offered for sale. |
Note 7. Borrowing
The Series, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 15, 2012 through November 14, 2013. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 15, 2012, the Funds had another Syndicated Credit Agreement with substantially similar terms. Interest on any borrowings under the Syndicated Credit Agreement is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly.
The Series utilized the SCA during the six months ended April 30, 2013. The average daily balance for the 99 days that the Series had loans outstanding during the period
42 | Visit our website at www.prudentialfunds.com |
was approximately $426,000, borrowed at a weighted average interest rate of 1.46%. At April 30, 2013, the Series has an outstanding loan amount of $884,000.
Note 8. Ownership
As of April 30, 2013, approximately 34% of the Series was owned by three institutional shareholders for the beneficial interest of their underlying account holders.
Note 9. New Accounting Pronouncement
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities”. The amendments, which will be effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial statements has not yet been determined.
In June 2013, the FASB issued guidance that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statement disclosures.
Prudential International Equity Fund | 43 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.02 | $5.72 | $6.17 | $5.77 | $4.80 | $10.49 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .06 | .12 | .09 | .08 | .08 | .16 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .94 | .29 | (.46 | ) | .36 | 1.06 | (5.37 | ) | ||||||||||||||||||
Total from investment operations | 1.00 | .41 | (.37 | ) | .44 | 1.14 | (5.21 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.13 | ) | (.11 | ) | (.11 | ) | (.10 | ) | (.17 | ) | (.14 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.13 | ) | (.11 | ) | (.11 | ) | (.10 | ) | (.17 | ) | (.48 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.89 | $6.02 | $5.72 | $6.17 | $5.77 | $4.80 | ||||||||||||||||||||
Total Return(b): | 16.91% | 7.40% | (5.61)% | 8.78% | 24.65% | (51.87)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $228,854 | $209,568 | $214,610 | $260,555 | $275,993 | $246,234 | ||||||||||||||||||||
Average net assets (000) | $217,899 | $204,088 | $247,859 | $257,553 | $240,744 | $438,831 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees(g) | 1.62% | (e) | 1.67% | 1.64% | 1.57% | 1.54% | 1.43% | |||||||||||||||||||
Net investment income | 1.93% | (e) | 2.18% | 1.51% | 1.35% | 1.75% | 1.94% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
(g) The distributor of the Series had contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares through February 28, 2008.
See Notes to Financial Statements.
44 | Visit our website at www.prudentialfunds.com |
Class B Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.78 | $5.50 | $5.94 | $5.56 | $4.61 | $10.09 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .04 | .08 | .05 | .04 | .05 | .09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .91 | .27 | (.45 | ) | .35 | 1.02 | (5.16 | ) | ||||||||||||||||||
Total from investment operations | .95 | .35 | (.40 | ) | .39 | 1.07 | (5.07 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.07 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.41 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.63 | $5.78 | $5.50 | $5.94 | $5.56 | $4.61 | ||||||||||||||||||||
Total Return(b): | 16.53% | 6.50% | (6.27)% | 8.11% | 23.82% | (52.22)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $5,910 | $5,439 | $6,720 | $9,160 | $9,976 | $11,205 | ||||||||||||||||||||
Average net assets (000) | $5,648 | $5,823 | $8,320 | $9,246 | $9,229 | $22,786 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.32% | (e) | 2.37% | 2.34% | 2.27% | 2.24% | 2.15% | |||||||||||||||||||
Net investment income | 1.22% | (e) | 1.48% | .83% | .66% | 1.06% | 1.17% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential International Equity Fund | 45 |
Financial Highlights
(Unaudited) continued
Class C Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.78 | $5.50 | $5.94 | $5.56 | $4.61 | $10.09 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .04 | .08 | .05 | .04 | .05 | .09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .91 | .27 | (.45 | ) | .35 | 1.02 | (5.16 | ) | ||||||||||||||||||
Total from investment operations | .95 | .35 | (.40 | ) | .39 | 1.07 | (5.07 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.07 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.41 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.63 | $5.78 | $5.50 | $5.94 | $5.56 | $4.61 | ||||||||||||||||||||
Total Return(b): | 16.53% | 6.51% | (6.27)% | 8.11% | 23.83% | (52.22)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $18,917 | $17,658 | $21,310 | $26,625 | $29,326 | $28,858 | ||||||||||||||||||||
Average net assets (000) | $18,168 | $19,019 | $25,128 | $26,974 | $26,677 | $55,111 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.32% | (e) | 2.37% | 2.34% | 2.27% | 2.24% | 2.15% | |||||||||||||||||||
Net investment income | 1.22% | (e) | 1.49% | .81% | .66% | 1.06% | 1.19% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
46 | Visit our website at www.prudentialfunds.com |
Class F Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.79 | $5.50 | $5.94 | $5.56 | $4.62 | $10.11 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .03 | .09 | .06 | .05 | .06 | .11 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .92 | .29 | (.44 | ) | .35 | 1.01 | (5.17 | ) | ||||||||||||||||||
Total from investment operations | .95 | .38 | (.38 | ) | .40 | 1.07 | (5.06 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.11 | ) | (.09 | ) | (.09 | ) | (.08 | ) | (.13 | ) | (.09 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.11 | ) | (.09 | ) | (.09 | ) | (.08 | ) | (.13 | ) | (.43 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.63 | $5.79 | $5.50 | $5.94 | $5.56 | $4.62 | ||||||||||||||||||||
Total Return(b): | 16.60% | 6.98% | (6.05)% | 8.35% | 24.04% | (52.10)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $460 | $681 | $1,572 | $3,355 | $5,226 | $8,171 | ||||||||||||||||||||
Average net assets (000) | $586 | $1,044 | $2,442 | $4,064 | $5,769 | $18,310 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.07% | (e) | 2.12% | 2.09% | 2.02% | 1.99% | 1.90% | |||||||||||||||||||
Net investment income | 1.13% | (e) | 1.74% | 1.07% | .95% | 1.35% | 1.37% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential International Equity Fund | 47 |
Financial Highlights
(Unaudited) continued
Class L Shares | ||||||||||||||||||||||
Period Ended August 24, | Year Ended October 31, | |||||||||||||||||||||
2012(h) | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.73 | $6.17 | $5.77 | $4.79 | $10.48 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income | .10 | .08 | .07 | .07 | .14 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .09 | (.45 | ) | .36 | 1.06 | (5.38 | ) | |||||||||||||||
Total from investment operations | .19 | (.37 | ) | .43 | 1.13 | (5.24 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (.10 | ) | (.10 | ) | (.09 | ) | (.15 | ) | (.11 | ) | ||||||||||||
Distributions from net realized gains | - | - | - | - | (.34 | ) | ||||||||||||||||
Total dividends and distributions | (.10 | ) | (.10 | ) | (.09 | ) | (.15 | ) | (.45 | ) | ||||||||||||
Capital Contributions(d): | - | .03 | .06 | - | - | |||||||||||||||||
Net asset value, end of period | $5.82 | $5.73 | $6.17 | $5.77 | $4.79 | |||||||||||||||||
Total Return(b): | 3.42% | (5.62)% | 8.59% | 24.49% | (52.07)% | |||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of period (000) | $7,694 | $8,644 | $10,919 | $12,342 | $12,621 | |||||||||||||||||
Average net assets (000) | $8,019 | $10,189 | $11,216 | $11,250 | $24,942 | |||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 1.90% | (e) | 1.84% | 1.77% | 1.74% | 1.65% | ||||||||||||||||
Net investment income | 2.22% | (e) | 1.31% | 1.16% | 1.56% | 1.68% | ||||||||||||||||
Portfolio turnover rate | 83% | (f)(g) | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
(g) Calculated as of October 31, 2012.
(h) As of August 24, 2012, the last conversion of Class L shares to Class A shares was completed. There are no Class L shares outstanding and Class L shares are no longer being offered for sale.
See Notes to Financial Statements.
48 | Visit our website at www.prudentialfunds.com |
Class M Shares | ||||||||||||||||||||||
Period Ended April 13, | Year Ended October 31, | |||||||||||||||||||||
2012(h) | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.50 | $5.94 | $5.56 | $4.61 | $10.09 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income | .01 | .05 | .04 | .05 | .07 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .09 | (.45 | ) | .35 | 1.02 | (5.14 | ) | |||||||||||||||
Total from investment operations | .10 | (.40 | ) | .39 | 1.07 | (5.07 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.07 | ) | ||||||||||||
Distributions from net realized gains | - | - | - | - | (.34 | ) | ||||||||||||||||
Total dividends and distributions | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.41 | ) | ||||||||||||
Capital Contributions(d): | - | .03 | .06 | - | - | |||||||||||||||||
Net asset value, end of period | $5.53 | $5.50 | $5.94 | $5.56 | $4.61 | |||||||||||||||||
Total Return(b): | 1.90% | (6.27)% | 8.11% | 23.82% | (52.22)% | |||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of period (000) | $29 | $743 | $2,985 | $6,622 | $11,467 | |||||||||||||||||
Average net assets (000) | $342 | $1,768 | $4,441 | $7,957 | $34,319 | |||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.40% | (e) | 2.34% | 2.27% | 2.24% | 2.15% | ||||||||||||||||
Net investment income | .26% | (e) | .76% | .68% | 1.09% | .92% | ||||||||||||||||
Portfolio turnover rate | 83% | (f)(g) | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
(g) Calculated as of October 31, 2012.
(h) As of April 13, 2012, the last conversion of Class M shares to Class A shares was completed. There are no Class M shares outstanding and Class M shares are no longer being offered for sale.
See Notes to Financial Statements.
Prudential International Equity Fund | 49 |
Financial Highlights
(Unaudited) continued
Class X Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $5.79 | $5.50 | $5.94 | $5.56 | $4.61 | $10.09 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .03 | .08 | .05 | .04 | .05 | .09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .91 | .28 | (.45 | ) | .35 | 1.02 | (5.16 | ) | ||||||||||||||||||
Total from investment operations | .94 | .36 | (.40 | ) | .39 | 1.07 | (5.07 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.07 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | (.41 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.63 | $5.79 | $5.50 | $5.94 | $5.56 | $4.61 | ||||||||||||||||||||
Total Return(b): | 16.33% | 6.69% | (6.27)% | 8.11% | 23.82% | (52.22)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $436 | $707 | $1,569 | $3,067 | $5,957 | $8,597 | ||||||||||||||||||||
Average net assets (000) | $575 | $1,077 | $2,351 | $4,020 | $6,611 | $17,864 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.32% | (e) | 2.37% | 2.34% | 2.27% | 2.24% | 2.15% | |||||||||||||||||||
Net investment income | .91% | (e) | 1.45% | .80% | .66% | 1.10% | 1.18% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
50 | Visit our website at www.prudentialfunds.com |
Class Z Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.07 | $5.77 | $6.22 | $5.82 | $4.85 | $10.60 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .08 | .14 | .11 | .13 | .10 | .18 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment, futures and foreign currency transactions | .93 | .29 | (.46 | ) | .33 | 1.06 | (5.43 | ) | ||||||||||||||||||
Total from investment operations | 1.01 | .43 | (.35 | ) | .46 | 1.16 | (5.25 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.15 | ) | (.13 | ) | (.13 | ) | (.12 | ) | (.19 | ) | (.16 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (.34 | ) | |||||||||||||||||||
Total dividends and distributions | (.15 | ) | (.13 | ) | (.13 | ) | (.12 | ) | (.19 | ) | (.50 | ) | ||||||||||||||
Capital Contributions(d): | - | - | .03 | .06 | - | - | ||||||||||||||||||||
Net asset value, end of period | $6.93 | $6.07 | $5.77 | $6.22 | $5.82 | $4.85 | ||||||||||||||||||||
Total Return(b): | 16.92% | 7.69% | (5.30)% | 8.98% | 24.95% | (51.77)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $62,782 | $50,531 | $44,573 | $44,833 | $229,771 | $169,874 | ||||||||||||||||||||
Average net assets (000) | $56,708 | $45,946 | $46,529 | $149,685 | $184,038 | $285,097 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 1.32% | (e) | 1.37% | 1.34% | 1.27% | 1.24% | 1.15% | |||||||||||||||||||
Net investment income | 2.36% | (e) | 2.46% | 1.77% | 2.12% | 2.05% | 2.22% | |||||||||||||||||||
Portfolio turnover rate | 59% | (f) | 83% | 70% | 96% | 76% | 74% |
(a) Calculated based on average shares outstanding during the period.
(b) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolios in which the Series invests.
(d) The Series received payments related to a former affiliate’s settlement of regulatory proceedings involving allegations of improper trading in Series shares during the fiscal years ended October 31, 2011 and October 31, 2010. The Series was not involved in the proceedings or in the calculation of the amount of settlement.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential International Equity Fund | 51 |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.prudentialfunds.com |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Stuart S. Parker • Richard A. Redeker • Robin B. Smith • Stephen G. Stoneburn |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Bruce Karpati, Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Amanda S. Ryan, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Quantitative Management Associates LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street | ||
| ||||
CUSTODIAN | The Bank of New York Mellon | One Wall Street New York, NY 10286 | ||
| ||||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential International Equity Fund, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PRUDENTIAL INTERNATIONAL EQUITY FUND
SHARE CLASS | A | B | C | F | X | Z | ||||||
NASDAQ | PJRAX | PJRBX | PJRCX | N/A | DEIQX | PJIZX | ||||||
CUSIP | 743969859 | 743969867 | 743969875 | 743969842 | 743969818 | 743969883 |
MF190E2 0246150-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL INTERNATIONAL VALUE FUND
SEMIANNUAL REPORT · APRIL 30, 2013
Fund Type
International Stock
Objective
Long-term growth of capital
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
The accompanying financial statements as of April 30, 2013, were not audited, and accordingly, no auditor’s opinion is expressed on them.
Prudential Investments, 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.
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June 14, 2013
Dear Shareholder:
We hope you find the semiannual report for the Prudential International Value Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2013.
We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.
Thank you for choosing the Prudential Investments family of funds.
Sincerely,
Stuart S. Parker, President
Prudential International Value Fund
*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.
Prudential International Value Fund | 1 |
Your Fund’s Performance (Unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The maximum initial sales charge is 5.50% (Class A shares). Gross operating expenses: Class A, 1.81%; Class B, 2.51%; Class C, 2.51%; Class Z, 1.51%. Net operating expenses: Class A, 1.76%; Class B, 2.51%; Class C, 2.51%; Class Z, 1.51%, after contractual reduction for Class A shares through 2/28/2014.
Cumulative Total Returns (Without Sales Charges) as of 4/30/13 |
| |||||||||||||||
Six Months | One Year | Five Years | Ten Years | |||||||||||||
Class A | 12.62 | % | 14.28 | % | –9.18 | % | 119.00 | % | ||||||||
Class B | 12.19 | 13.42 | –12.88 | 102.97 | ||||||||||||
Class C | 12.23 | 13.45 | –12.51 | 103.15 | ||||||||||||
Class Z | 12.86 | 14.62 | –7.92 | 124.69 | ||||||||||||
MSCI EAFE ND Index | 16.90 | 19.39 | –4.56 | 141.68 | ||||||||||||
Lipper International Multi-Cap Core Funds Average | 14.20 | 16.47 | –4.35 | 127.84 | ||||||||||||
Lipper Customized Blend Funds Average | 14.52 | 16.65 | –4.61 | 131.35 | ||||||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/13 |
| |||||||||||||||
One Year | Five Years | Ten Years | ||||||||||||||
Class A | 2.09 | % | –2.84 | % | 8.25 | % | ||||||||||
Class B | 2.22 | –2.69 | 8.04 | |||||||||||||
Class C | 6.20 | –2.46 | 8.05 | |||||||||||||
Class Z | 8.35 | –1.46 | 9.14 | |||||||||||||
MSCI EAFE ND Index | 11.27 | –0.88 | 9.70 | |||||||||||||
Lipper International Multi-Cap Core Funds Average | 10.12 | –0.93 | 8.93 | |||||||||||||
Lipper Customized Blend Funds Average | 10.06 | –0.91 | 9.12 |
Source: Prudential Investments LLC and Lipper Inc.
The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 5.50%, and a 12b-1 fee of 0.30% annually. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund. Class B shares are not subject to a front-end sales charge but are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1%, respectively, for the first six years after purchase and a 12b-1 fee of 1% annually. Approximately seven years after purchase, Class B shares
2 | Visit our website at www.prudentialfunds.com |
will automatically convert to Class A shares on a quarterly basis. Class C shares purchased are not subject to a front-end sales charge, but are subject to a CDSC of 1% for Class C shares sold within 12 months from the date of purchase, and an annual 12b-1 fee of 1%. Class Z shares are not subject to a front-end sales charge, a CDSC, or 12b-1 fees. The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
Benchmark Definitions
Morgan Stanley Capital International Europe, Australasia, and Far East Net Dividend Index
The Morgan Stanley Capital International Europe, Australasia, and Far East Index (MSCI EAFE ND Index) is an unmanaged, weighted index of performance that reflects stock price movements of developed-country markets in Europe, Australasia, and the Far East. The Net Dividend (ND) version of the MSCI EAFE Index reflects the impact of the maximum withholding taxes on reinvested dividends.
Lipper International Multi-Cap Core Funds Average
Funds that, by portfolio practice, invest in a variety of market-capitalization ranges without concentrating 75% of their equity assets in any one market-capitalization range over an extended period of time. International multi-cap core funds typically have average characteristics compared to the MSCI EAFE Index.
Lipper Customized Blend Funds Average
The Lipper Customized Blend Funds Average is a 50/50 blend of the Lipper International Multi-Cap Core Funds and Lipper International Large-Cap Core Funds Averages.
Note: Although Lipper classifies the Prudential International Value Fund in the Lipper International Multi-Cap Core Funds Performance Universe, the Lipper Customized Blend Funds Performance Universe is utilized because the Fund’s investment manager believes that the funds included in this custom blend universe provide a more appropriate basis for Portfolio performance comparisons.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses, or taxes. Returns for the Lipper Averages reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
Five Largest Holdings expressed as a percentage of net assets as of 4/30/13 | ||||
Royal Dutch Shell PLC (Class B Stock), Oil, Gas & Consumable Fuels | 1.6 | % | ||
Roche Holding AG, Pharmaceuticals | 1.6 | |||
Novartis AG, Pharmaceuticals | 1.6 | |||
Mitsubishi UFI Financial Group, Inc., Banks | 1.5 | |||
KDDI Corp., Telecommunications | 1.3 |
Holdings reflect only long-term investments and are subject to change.
Prudential International Value Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Industries expressed as a percentage of net assets as of 4/30/13 | ||||
Banks | 13.6 | % | ||
Pharmaceuticals | 8.8 | |||
Oil, Gas & Consumable Fuels | 8.5 | |||
Insurance | 7.4 | |||
Telecommunications | 6.3 |
Industry weightings reflect only long-term investments and are subject to change.
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Fees and Expenses (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2012, at the beginning of the period, and held through the six-month period ended April 30, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before
Prudential International Value Fund | 5 |
Fees and Expenses (continued)
expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Prudential International Value Fund | Beginning Account Value November 1, 2012 | Ending Account Value April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,126.20 | 1.76 | % | $ | 9.28 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.07 | 1.76 | % | $ | 8.80 | ||||||||||
Class B | Actual | $ | 1,000.00 | $ | 1,121.90 | 2.51 | % | $ | 13.21 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,012.35 | 2.51 | % | $ | 12.52 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,122.30 | 2.51 | % | $ | 13.21 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,012.35 | 2.51 | % | $ | 12.52 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,128.60 | 1.51 | % | $ | 7.97 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.31 | 1.51 | % | $ | 7.55 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2013, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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Portfolio of Investments
as of April 30, 2013 (Unaudited)
Shares | Description | Value (Note 1) | ||||
LONG-TERM INVESTMENTS 97.1% | ||||||
COMMON STOCKS 96.4% | ||||||
Argentina 0.3% | ||||||
2,800 | MercadoLibre, Inc. | $ | 281,652 | |||
Australia 3.9% | ||||||
176,200 | Arrium Ltd. | 155,266 | ||||
42,900 | Ausdrill Ltd. | 67,379 | ||||
33,100 | Bendigo and Adelaide Bank Ltd. | 379,521 | ||||
29,500 | Bradken Ltd. | 157,195 | ||||
11,900 | Caltex Australia Ltd. | 265,733 | ||||
82,600 | Challenger Ltd. | 359,652 | ||||
71,625 | Downer EDI Ltd. | 364,585 | ||||
253,200 | Emeco Holdings Ltd. | 120,746 | ||||
171,558 | Goodman Fielder Ltd.* | 137,837 | ||||
37,900 | Lend Lease Group | 423,556 | ||||
77,000 | Metcash Ltd. | 326,488 | ||||
24,000 | National Australia Bank Ltd. | 845,946 | ||||
88,300 | Pacific Brands Ltd. | 78,725 | ||||
38,800 | Toll Holdings Ltd. | 229,276 | ||||
|
| |||||
3,911,905 | ||||||
Austria 0.7% | ||||||
10,700 | OMV AG | 502,710 | ||||
5,700 | Voestalpine AG | 177,944 | ||||
|
| |||||
680,654 | ||||||
Belgium 0.5% | ||||||
32,700 | AGFA-Gevaert NV* | 58,998 | ||||
7,300 | Delhaize Group SA | 457,710 | ||||
4,935 | Dexia SA* | 325 | ||||
|
| |||||
517,033 | ||||||
Brazil 0.9% | ||||||
14,017 | Embraer SA, ADR | 489,614 | ||||
17,900 | Natura Cosmeticos SA | 448,585 | ||||
|
| |||||
938,199 | ||||||
Canada 2.0% | ||||||
4,946 | Canadian National Railway Co. | 484,217 | ||||
11,611 | Cenovus Energy, Inc. | 347,483 |
See Notes to Financial Statements.
Prudential International Value Fund | 7 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
Canada (cont’d.) | ||||||
16,150 | Potash Corp. of Saskatchewan, Inc. | $ | 679,915 | |||
20,600 | Teck Resources Ltd. (Class B Stock) | 547,997 | ||||
|
| |||||
2,059,612 | ||||||
Cayman Islands 0.6% | ||||||
7,087 | Baidu, Inc., ADR* | 608,419 | ||||
China 1.5% | ||||||
76,365 | China Merchants Bank Co. Ltd. (Class H Stock) | 162,765 | ||||
1,338,640 | Industrial & Commercial Bank of China Ltd. (Class H Stock) | 941,860 | ||||
152,862 | Sinopharm Group Co. Ltd. (Class H Stock) | 454,046 | ||||
|
| |||||
1,558,671 | ||||||
Denmark 1.4% | ||||||
8,300 | H. Lundbeck A/S | 165,968 | ||||
6,911 | Novo Nordisk A/S (Class B Stock) | 1,212,242 | ||||
|
| |||||
1,378,210 | ||||||
Finland 0.3% | ||||||
13,700 | Tieto Oyj | 293,366 | ||||
France 8.8% | ||||||
7,448 | Air Liquide SA | 942,807 | ||||
20,000 | AXA SA | 374,409 | ||||
8,100 | BNP Paribas | 451,333 | ||||
10,055 | Cie Generale des Etablissements Michelin (Class B Stock) | 849,205 | ||||
2,700 | Ciments Francais SA | 147,529 | ||||
37,707 | Credit Agricole SA* | 345,175 | ||||
6,540 | LVMH Moet Hennessy Louis Vuitton SA | 1,132,591 | ||||
12,744 | Publicis Groupe SA | 886,490 | ||||
4,600 | Renault SA | 316,953 | ||||
11,100 | Sanofi | 1,216,522 | ||||
8,900 | SCOR SE | 270,107 | ||||
5,863 | Societe Generale SA | 212,953 | ||||
5,900 | Thales SA | 256,255 | ||||
12,100 | Total SA | 609,836 | ||||
5,100 | Valeo SA | 296,195 | ||||
27,796 | Vivendi SA | 629,623 | ||||
|
| |||||
8,937,983 |
See Notes to Financial Statements.
8 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
Germany 10.4% | ||||||
9,836 | Adidas AG | $ | 1,027,215 | |||
8,021 | Allianz SE | 1,183,613 | ||||
3,300 | Aurubis AG | 207,345 | ||||
6,200 | BASF SE | 579,068 | ||||
3,100 | Bayer AG | 323,419 | ||||
7,500 | Daimler AG | 414,988 | ||||
28,666 | Deutsche Bank AG | 1,317,912 | ||||
12,200 | E.ON SE | 221,079 | ||||
19,300 | Freenet AG | 480,638 | ||||
13,349 | Fresenius Medical Care AG & Co. KGaA | 921,191 | ||||
2,600 | Hannover Rueckversicherung AG | 219,551 | ||||
2,600 | Lanxess AG | 189,351 | ||||
1,500 | Merck KGaA | 228,359 | ||||
1,800 | Muenchener Rueckversicherungs-Gesellschaft AG | 359,962 | ||||
5,100 | Rheinmetall AG | 241,557 | ||||
7,300 | RWE AG | 262,792 | ||||
11,326 | SAP AG | 899,571 | ||||
7,962 | Siemens AG | 831,505 | ||||
3,300 | Volkswagen AG | 641,460 | ||||
|
| |||||
10,550,576 | ||||||
Hong Kong 3.6% | ||||||
203,280 | AIA Group Ltd. | 902,430 | ||||
17,000 | Cheung Kong Holdings Ltd. | 255,871 | ||||
375,478 | CNOOC Ltd. | 700,621 | ||||
326,000 | First Pacific Co. Ltd. | 451,182 | ||||
47,999 | Hong Kong Exchanges and Clearing Ltd. | 807,803 | ||||
354,000 | Huabao International Holdings Ltd. | 162,399 | ||||
58,100 | Kingboard Chemical Holdings Ltd. | 157,975 | ||||
68,200 | Yue Yuen Industrial Holdings Ltd. | 235,971 | ||||
|
| |||||
3,674,252 | ||||||
Ireland 0.7% | ||||||
8,879 | Accenture PLC (Class A Stock) | 723,106 | ||||
405 | Covidien PLC | 25,855 | ||||
15,600 | Permanent TSB Group Holdings PLC* | 719 | ||||
|
| |||||
749,680 |
See Notes to Financial Statements.
Prudential International Value Fund | 9 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
Israel 1.0% | ||||||
62,300 | Bank Hapoalim BM* | $ | 289,343 | |||
2,043 | Check Point Software Technologies Ltd.* | 95,245 | ||||
6,200 | Elbit Systems Ltd. | 258,549 | ||||
9,100 | Teva Pharmaceutical Industries Ltd. | 356,131 | ||||
|
| |||||
999,268 | ||||||
Italy 2.1% | ||||||
14,400 | Banco Popolare Societa Cooperativa* | 20,765 | ||||
124,700 | Enel SpA | 482,161 | ||||
35,100 | Eni SpA | 839,445 | ||||
15,200 | Finmeccanica SpA* | 79,110 | ||||
18,700 | Parmalat SpA | 57,627 | ||||
16,702 | Saipem SpA | 472,908 | ||||
251,900 | Telecom Italia SpA | 213,143 | ||||
|
| |||||
2,165,159 | ||||||
Japan 17.7% | ||||||
8,373 | Alpine Electronics, Inc. | 85,289 | ||||
11,400 | Aoyama Trading Co. Ltd. | 340,649 | ||||
16,546 | Bridgestone Corp. | 623,753 | ||||
3,201 | Fanuc Corp. | 482,687 | ||||
73,900 | Fukuoka Financial Group, Inc. | 377,517 | ||||
8,700 | Fuyo General Lease Co. Ltd. | 395,353 | ||||
17,600 | Heiwa Corp. | 364,511 | ||||
1,490 | Japan Exchange Group, Inc. | 182,801 | ||||
57,894 | JX Holdings, Inc. | 313,566 | ||||
27,780 | KDDI Corp. | 1,333,645 | ||||
9,400 | Keihin Corp. | 153,509 | ||||
34,598 | Komatsu Ltd. | 943,695 | ||||
31,823 | Kubota Corp. | 456,037 | ||||
50,100 | Kurabo Industries Ltd. | 94,048 | ||||
15,800 | Kyorin Holdings, Inc. | 422,046 | ||||
25,600 | Kyowa Exeo Corp. | 301,733 | ||||
76,000 | Marubeni Corp. | 543,386 | ||||
3,900 | Miraca Holdings, Inc. | 194,430 | ||||
5,900 | Mitsubishi Corp. | 105,793 | ||||
230,479 | Mitsubishi UFJ Financial Group, Inc. | 1,567,498 | ||||
25,800 | Mitsui & Co. Ltd. | 354,110 | ||||
248,700 | Mizuho Financial Group, Inc. | 548,500 | ||||
66,000 | Morinaga Milk Industry Co. Ltd. | 194,307 |
See Notes to Financial Statements.
10 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
Japan (cont’d.) | ||||||
28,800 | Nichii Gakkan Co. | $ | 292,771 | |||
14,700 | Nippon Electric Glass Co. Ltd. | 74,793 | ||||
22,800 | Nippon Shokubai Co. Ltd. | 223,591 | ||||
12,300 | Nippon Telegraph & Telephone Corp. | 608,786 | ||||
78,700 | Nishi-Nippon City Bank Ltd. (The) | 262,374 | ||||
300 | NTT DoCoMo, Inc. | 495,461 | ||||
12,100 | Otsuka Holdings Co. Ltd. | 435,667 | ||||
3,400 | Sankyo Co. Ltd. | 154,855 | ||||
49,800 | Sankyu, Inc. | 222,219 | ||||
29,400 | Seino Holdings Co. Ltd. | 256,649 | ||||
13,500 | Shimachu Co. Ltd. | 356,316 | ||||
25,400 | Shizuoka Gas Co. Ltd. | 201,147 | ||||
10,428 | SoftBank Corp. | 516,132 | ||||
38,600 | Sumitomo Corp. | 481,485 | ||||
17,900 | Sumitomo Mitsui Financial Group, Inc. | 845,561 | ||||
14,006 | Sumitomo Mitsui Trust Holdings, Inc. | 70,256 | ||||
52,600 | Toagosei Co. Ltd. | 226,619 | ||||
16,700 | Toppan Forms Co. Ltd. | 156,405 | ||||
21,502 | Toyota Motor Corp. | 1,243,999 | ||||
36,900 | Yokohama Rubber Co. Ltd. (The) | 483,748 | ||||
|
| |||||
17,987,697 | ||||||
Liechtenstein 0.1% | ||||||
1,400 | Verwaltungs-und Privat-Bank AG | 112,175 | ||||
Mexico 0.7% | ||||||
214,556 | Wal-Mart de Mexico SAB de CV (Class V Stock) | 680,653 | ||||
Netherlands 3.9% | ||||||
18,800 | Aegon NV | 124,066 | ||||
9,044 | ASML Holding NV | 672,348 | ||||
44,700 | ING Groep NV, CVA* | 366,864 | ||||
40,800 | Koninklijke Ahold NV | 643,704 | ||||
4,700 | Koninklijke DSM NV | 302,860 | ||||
8,366 | Koninklijke Philips Electronics NV | 231,039 | ||||
2,000 | Nutreco NV | 189,825 | ||||
13,307 | Schlumberger Ltd. | 990,440 | ||||
15,414 | Yandex NV (Class A Stock)* | 396,756 | ||||
|
| |||||
3,917,902 |
See Notes to Financial Statements.
Prudential International Value Fund | 11 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
New Zealand 0.4% | ||||||
279,800 | Air New Zealand Ltd. | $ | 359,745 | |||
Norway 0.7% | ||||||
20,700 | DnB ASA | 338,329 | ||||
9,700 | Statoil ASA | 236,676 | ||||
3,600 | Yara International ASA | 168,560 | ||||
|
| |||||
743,565 | ||||||
Singapore 0.3% | ||||||
578,400 | Golden Agri-Resources Ltd. | 248,885 | ||||
South Korea 0.7% | ||||||
516 | Samsung Electronics Co. Ltd. | 712,176 | ||||
Spain 1.6% | ||||||
8,567 | Amadeus IT Holding SA (Class A Stock) | 252,893 | ||||
28,659 | Banco Bilbao Vizcaya Argentaria SA | 278,162 | ||||
19,900 | Banco Espanol de Credito SA* | 91,595 | ||||
47,500 | Banco Santander SA | 343,490 | ||||
20,300 | Repsol SA | 475,867 | ||||
12,200 | Telefonica SA | 178,984 | ||||
|
| |||||
1,620,991 | ||||||
Sweden 1.7% | ||||||
25,500 | Boliden AB | 403,685 | ||||
20,316 | Hennes & Mauritz AB (Class B Stock) | 718,782 | ||||
5,500 | NCC AB (Class B Stock) | 130,264 | ||||
5,700 | Oriflame Cosmetics SA, SDR | 206,416 | ||||
11,000 | Swedbank AB (Class A Stock) | 270,712 | ||||
|
| |||||
1,729,859 | ||||||
Switzerland 7.6% | ||||||
4,500 | Baloise Holding AG | 463,164 | ||||
13,112 | Credit Suisse Group AG* | 363,554 | ||||
500 | Georg Fischer AG* | 217,385 | ||||
12,296 | Julius Baer Group Ltd.* | 489,830 | ||||
3,000 | Lonza Group AG* | 208,916 | ||||
6,896 | Nestle SA | 492,465 | ||||
21,237 | Novartis AG | 1,577,129 |
See Notes to Financial Statements.
12 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
Switzerland (cont’d.) | ||||||
6,552 | Roche Holding AG | $ | 1,637,648 | |||
435 | Swatch Group AG (The) | 249,126 | ||||
2,100 | Swiss Life Holding AG* | 332,007 | ||||
6,400 | Swiss Re AG* | 509,013 | ||||
1,490 | Syngenta AG | 636,831 | ||||
2,000 | Zurich Insurance Group AG* | 558,400 | ||||
|
| |||||
7,735,468 | ||||||
United Kingdom 20.8% | ||||||
38,100 | Alent PLC | 200,747 | ||||
28,795 | ARM Holdings PLC | 445,498 | ||||
18,200 | AstraZeneca PLC | 944,957 | ||||
60,800 | Aviva PLC | 288,148 | ||||
100,100 | BAE Systems PLC | 583,866 | ||||
85,481 | Barclays PLC | 379,823 | ||||
75,157 | Beazley PLC | 262,093 | ||||
15,600 | Berendsen PLC | 187,436 | ||||
116,400 | BP PLC | 843,297 | ||||
14,322 | British American Tobacco PLC | 793,331 | ||||
184,500 | BT Group PLC | 791,570 | ||||
23,371 | Burberry Group PLC | 485,013 | ||||
285,700 | Cable & Wireless Communications PLC | 187,635 | ||||
16,409 | Carnival PLC | 591,343 | ||||
29,400 | Dairy Crest Group PLC | 209,938 | ||||
8,900 | GlaxoSmithKline PLC | 229,561 | ||||
40,400 | Home Retail Group PLC | 97,773 | ||||
86,300 | HSBC Holdings PLC | 939,718 | ||||
55,000 | Intermediate Capital Group PLC | 360,874 | ||||
97,500 | J. Sainsbury PLC | 577,182 | ||||
154,385 | Kingfisher PLC | 750,857 | ||||
187,000 | Legal & General Group PLC | 492,357 | ||||
24,800 | Marks & Spencer Group PLC | 157,405 | ||||
48,900 | Marston’s PLC | 109,988 | ||||
28,400 | Mondi PLC | 375,640 | ||||
142,800 | Old Mutual PLC | 454,728 | ||||
26,934 | Pearson PLC | 489,922 | ||||
15,001 | Reckitt Benckiser Group PLC | 1,094,252 | ||||
40,190 | Rolls-Royce Holdings PLC* | 705,449 | ||||
76,124 | Royal Bank of Scotland Group PLC* | 362,191 |
See Notes to Financial Statements.
Prudential International Value Fund | 13 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
United Kingdom (cont’d.) | ||||||
46,900 | Royal Dutch Shell PLC (Class B Stock) | $ | 1,641,358 | |||
100,287 | RSA Insurance Group PLC | 173,384 | ||||
12,275 | SABMiller PLC | 661,352 | ||||
37,527 | Standard Chartered PLC | 942,591 | ||||
82,300 | Tesco PLC | 468,089 | ||||
50,700 | Tullett Prebon PLC | 192,556 | ||||
20,008 | Tullow Oil PLC | 311,105 | ||||
38,100 | Vesuvius PLC | 205,956 | ||||
308,814 | Vodafone Group PLC | 941,164 | ||||
135,800 | WM Morrison Supermarkets PLC | 616,170 | ||||
30,202 | WPP PLC | 499,168 | ||||
|
| |||||
21,045,485 | ||||||
United States 1.5% | ||||||
10,569 | Lululemon Athletica, Inc.* | 804,618 | ||||
10,350 | Yum! Brands, Inc. | 705,042 | ||||
|
| |||||
1,509,660 | ||||||
|
| |||||
TOTAL COMMON STOCKS | 97,708,900 | |||||
|
| |||||
PREFERRED STOCKS 0.7% | ||||||
Brazil 0.7% | ||||||
41,467 | Itau Unibanco Holding SA, ADR (PRFC) | 697,890 | ||||
United Kingdom | ||||||
4,782,610 | Rolls-Royce Holdings PLC (PRFC C)*(b) | 7,429 | ||||
|
| |||||
TOTAL PREFERRED STOCKS | 705,319 | |||||
|
| |||||
TOTAL LONG-TERM INVESTMENTS | 98,414,219 | |||||
|
|
See Notes to Financial Statements.
14 | Visit our website at www.prudentialfunds.com |
Shares | Description | Value (Note 1) | ||||
SHORT-TERM INVESTMENT 1.7% | ||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||
1,705,035 | Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund (Note 3) | $ | 1,705,035 | |||
|
| |||||
TOTAL INVESTMENTS 98.8% | 100,119,254 | |||||
Other assets in excess of liabilities(c) 1.2% | 1,254,369 | |||||
|
| |||||
NET ASSETS 100% | $ | 101,373,623 | ||||
|
|
The following abbreviations are used in the Portfolio descriptions:
ADR—American Depositary Receipt
CVA—Certificate Van Aandelen (Bearer)
PRFC—Preference Shares
SDR—Special Drawing Rights
CHF—Swiss Franc
EUR—Euro
JPY—Japanese Yen
* | Non-income producing security. |
(a) | Prudential Investments LLC, the manager of the Portfolio, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund. |
(b) | Indicates a security or securities that have been deemed illiquid. |
(c) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end: |
Forward foreign currency exchange contracts outstanding at April 30, 2013:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date Payable | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Euro, | ||||||||||||||||||
Expiring 05/08/13 | State Street Bank | EUR | 738 | $ | 973,622 | $ | 971,302 | $ | (2,320 | ) | ||||||||
Japanese Yen, | ||||||||||||||||||
Expiring 05/01/13 | Brown Brothers | JPY | 10,867 | 109,588 | 111,471 | 1,883 | ||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 1,083,210 | $ | 1,082,773 | $ | (437 | ) | ||||||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
Prudential International Value Fund | 15 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date Receivable | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Euro, | ||||||||||||||||||
Expiring 05/08/13 | State Street Bank | EUR | 738 | $ | 946,050 | $ | 971,302 | $ | (25,252 | ) | ||||||||
Expiring 10/29/13 | State Street Bank | EUR | 3,002 | 3,908,254 | 3,958,718 | (50,464 | ) | |||||||||||
Japanese Yen, | ||||||||||||||||||
Expiring 07/08/13 | State Street Bank | JPY | 161,793 | 1,846,629 | 1,660,297 | 186,332 | ||||||||||||
Expiring 07/08/13 | State Street Bank | JPY | 129,387 | 1,309,997 | 1,327,751 | (17,754 | ) | |||||||||||
Expiring 07/08/13 | State Street Bank | JPY | 79,963 | 821,165 | 820,567 | 598 | ||||||||||||
Expiring 07/08/13 | State Street Bank | JPY | 56,459 | 567,199 | 579,373 | (12,174 | ) | |||||||||||
Expiring 07/08/13 | State Street Bank | JPY | 54,428 | 567,338 | 558,528 | 8,810 | ||||||||||||
Swiss Franc, | ||||||||||||||||||
Expiring 05/03/13 | Bank of New York Mellon | CHF | 9 | 9,816 | 9,896 | (80 | ) | |||||||||||
|
|
|
|
|
| |||||||||||||
$ | 9,976,448 | $ | 9,886,432 | $ | 90,016 | |||||||||||||
|
|
|
|
|
|
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 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 Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2013 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks: | ||||||||||||
Argentina | $ | 281,652 | $ | — | $ | — | ||||||
Australia | 3,911,905 | — | — | |||||||||
Austria | 680,654 | — | — | |||||||||
Belgium | 517,033 | — | — | |||||||||
Brazil | 938,199 | — | — | |||||||||
Canada | 2,059,612 | — | — |
See Notes to Financial Statements.
16 | Visit our website at www.prudentialfunds.com |
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued): | ||||||||||||
Cayman Islands | $ | 608,419 | $ | — | $ | — | ||||||
China | 1,558,671 | — | — | |||||||||
Denmark | 1,378,210 | — | — | |||||||||
Finland | 293,366 | — | — | |||||||||
France | 8,937,983 | — | — | |||||||||
Germany | 10,550,576 | — | — | |||||||||
Hong Kong | 3,674,252 | — | — | |||||||||
Ireland | 749,680 | — | — | |||||||||
Israel | 999,268 | — | — | |||||||||
Italy | 2,165,159 | — | — | |||||||||
Japan | 17,987,697 | — | — | |||||||||
Liechtenstein | 112,175 | — | — | |||||||||
Mexico | 680,653 | — | — | |||||||||
Netherlands | 3,917,902 | — | — | |||||||||
New Zealand | 359,745 | — | — | |||||||||
Norway | 743,565 | — | — | |||||||||
Singapore | 248,885 | — | — | |||||||||
South Korea | 712,176 | — | — | |||||||||
Spain | 1,620,991 | — | — | |||||||||
Sweden | 1,729,859 | — | — | |||||||||
Switzerland | 7,735,468 | — | — | |||||||||
United Kingdom | 21,045,485 | — | — | |||||||||
United States | 1,509,660 | — | — | |||||||||
Preferred Stocks: | ||||||||||||
Brazil | 697,890 | — | ||||||||||
United Kingdom | — | 7,429 | — | |||||||||
Affiliated Money Market Mutual Fund | 1,705,035 | — | — | |||||||||
Other Financial Instruments* | ||||||||||||
Foreign Forward Currency Exchange Contracts | — | 89,579 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 100,111,825 | $ | 97,008 | $ | — | ||||||
|
|
|
|
|
|
* | 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. |
See Notes to Financial Statements.
Prudential International Value Fund | 17 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2013 were as follows:
Banks | 13.6 | % | ||
Pharmaceuticals | 8.8 | |||
Oil, Gas & Consumable Fuels | 8.5 | |||
Insurance | 7.4 | |||
Telecommunications | 6.3 | |||
Food & Beverage | 5.4 | |||
Chemicals | 4.8 | |||
Retail & Merchandising | 4.7 | |||
Apparel | 2.9 | |||
Diversified Financial Services | 2.8 | |||
Automobile Manufacturers | 2.5 | |||
Aerospace & Defense | 2.5 | |||
Automotive Parts | 1.9 | |||
Semiconductors | 1.8 | |||
Affiliated Money Market Mutual Fund | 1.7 | |||
Machinery & Equipment | 1.6 | |||
Metals & Mining | 1.5 | |||
Computer Services & Software | 1.5 | |||
Miscellaneous Manufacturing | 1.5 | |||
Distribution/Wholesale | 1.4 | |||
Advertising | 1.4 | |||
Internet Software & Services | 1.3 | |||
Transportation | 1.2 | |||
Consumer Products & Services | 1.2 | % | ||
Entertainment & Leisure | 1.2 | |||
Agriculture | 1.1 | |||
Utilities | 1.0 | |||
Healthcare Providers & Services | 0.9 | |||
Engineering & Construction | 0.8 | |||
Commercial Services | 0.8 | |||
IT Services | 0.7 | |||
Real Estate | 0.6 | |||
Cosmetics/Personal Care | 0.6 | |||
Auto Manufacturers | 0.6 | |||
Media & Entertainment | 0.5 | |||
Diversified Machinery | 0.4 | |||
Forest & Paper Products | 0.4 | |||
Airlines | 0.4 | |||
Electronic Components & Equipment | 0.3 | |||
Building Materials | 0.2 | |||
Home Furnishings | 0.1 | |||
|
| |||
98.8 | ||||
Other assets in excess of liabilities | 1.2 | |||
|
| |||
100.0 | % | |||
|
|
The Series invested in various derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments was foreign exchange risk. The effect of such derivative instruments on the Series’ 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 April 30, 2013 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted | Asset Derivatives | Liability Derivatives | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
Foreign exchange contracts | Unrealized appreciation on forward foreign currency contracts | $ | 197,623 | Unrealized depreciation on forward foreign currency contracts | $ | 108,044 | ||||||
|
|
|
|
See Notes to Financial Statements.
18 | Visit our website at www.prudentialfunds.com |
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2013 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Forward Currency Contracts | |||
Foreign exchange contracts | $ | 74,309 | ||
|
|
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Forward Currency Contracts | |||
Foreign exchange contracts | $ | 56,211 | ||
|
|
For the six months ended April 30, 2013, the Series’ average value at settlement date payable for forward foreign currency exchange purchase contracts was $1,340,710 and the Fund’s average value at settlement date receivable for forward foreign currency exchange sale contracts was $5,241,472.
See Notes to Financial Statements.
Prudential International Value Fund | 19 |
Statement of Assets and Liabilities
as of April 30, 2013 (Unaudited)
Assets |
| |||
Investments at value: | ||||
Unaffiliated investments (cost $81,140,270) | $ | 98,414,219 | ||
Affiliated investments (cost $1,705,035) | 1,705,035 | |||
Foreign currency, at value (cost $651,768) | 659,252 | |||
Dividends and interest receivable | 472,809 | |||
Tax reclaim receivable | 309,985 | |||
Unrealized appreciation on forward foreign currency contracts | 197,623 | |||
Receivable for investments sold | 160,779 | |||
Receivable for Series shares sold | 64,446 | |||
Prepaid expenses | 488 | |||
|
| |||
Total Assets | 101,984,636 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 184,861 | |||
Payable for Series shares reacquired | 108,649 | |||
Unrealized depreciation on forward foreign currency contracts | 108,044 | |||
Accrued expenses | 97,680 | |||
Advisory fee payable | 80,757 | |||
Affiliated transfer agent fee payable | 18,297 | |||
Distribution fee payable | 12,233 | |||
Loan interest payable | 492 | |||
|
| |||
Total Liabilities | 611,013 | |||
|
| |||
Net Assets | $ | 101,373,623 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par value | $ | 47,386 | ||
Paid-in capital in excess of par | 107,801,971 | |||
|
| |||
107,849,357 | ||||
Undistributed net investment income | 380,115 | |||
Accumulated net realized loss on investment and foreign currency transactions | (24,231,181 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 17,375,332 | |||
|
| |||
Net Assets, April 30, 2013 | $ | 101,373,623 | ||
|
|
See Notes to Financial Statements.
20 | Visit our website at www.prudentialfunds.com |
Class A: |
| |||
Net asset value and redemption price per share | $ | 21.38 | ||
Maximum sales charge (5.50% of offering price) | 1.24 | |||
|
| |||
Maximum offering price to public | $ | 22.62 | ||
|
| |||
Class B: | ||||
Net asset value, offering price and redemption price per share | $ | 20.43 | ||
|
| |||
Class C: | ||||
Net asset value, offering price and redemption price per share | $ | 20.47 | ||
|
| |||
Class Z: | ||||
Net asset value, offering price and redemption price per share | $ | 21.51 | ||
|
|
See Notes to Financial Statements.
Prudential International Value Fund | 21 |
Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Net Investment Income |
| |||
Investment income |
| |||
Unaffiliated dividend income (net of foreign withholding taxes of $97,495) | $ | 1,411,454 | ||
Affiliated dividend income | 1,721 | |||
Interest income | 68 | |||
|
| |||
Total income | 1,413,243 | |||
|
| |||
Expenses | ||||
Advisory fee | 494,441 | |||
Distribution fee—Class A | 43,076 | |||
Distribution fee—Class B | 7,222 | |||
Distribution fee—Class C | 23,821 | |||
Custodian’s fees and expenses | 79,000 | |||
Transfer agent’s fee and expenses (including affiliated expense of $45,000) (Note 3) | 78,000 | |||
Registration fees | 26,000 | |||
Audit fee | 15,000 | |||
Reports to shareholders | 15,000 | |||
Legal fees and expenses | 13,000 | |||
Directors’ fees | 6,000 | |||
Insurance fees | 1,000 | |||
Interest expense (Note 7) | 492 | |||
Miscellaneous | 20,882 | |||
|
| |||
Total expenses | 822,934 | |||
|
| |||
Net investment income | 590,309 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currencies |
| |||
Net realized gain (loss) on: | ||||
Investment transactions | 2,306,956 | |||
Foreign currency transactions | (24,219 | ) | ||
|
| |||
2,282,737 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 8,890,398 | |||
Foreign currencies | 69,375 | |||
|
| |||
8,959,773 | ||||
|
| |||
Net gain on investments and foreign currencies | 11,242,510 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 11,832,819 | ||
|
|
See Notes to Financial Statements.
22 | Visit our website at www.prudentialfunds.com |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2013 | Year Ended October 31, 2012 | |||||||
Increase (Decrease) in Net Assets |
| |||||||
Operations |
| |||||||
Net investment income | $ | 590,309 | $ | 1,601,893 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 2,282,737 | (23,959 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 8,959,773 | 2,917,818 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 11,832,819 | 4,495,752 | ||||||
|
|
|
| |||||
Dividends and Distributions (Note 1) | ||||||||
Dividends from net investment income | ||||||||
Class A | (674,229 | ) | (610,527 | ) | ||||
Class B | (19,472 | ) | (17,304 | ) | ||||
Class C | (65,031 | ) | (53,269 | ) | ||||
Class Z | (1,269,401 | ) | (978,760 | ) | ||||
|
|
|
| |||||
(2,028,133 | ) | (1,659,860 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 5,698,859 | 11,836,699 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 2,004,448 | 1,623,732 | ||||||
Cost of shares reacquired | (12,887,140 | ) | (18,408,704 | ) | ||||
|
|
|
| |||||
Net decrease in net assets from Series share transactions | (5,183,833 | ) | (4,948,273 | ) | ||||
|
|
|
| |||||
Total increase (decrease) | 4,620,853 | (2,112,381 | ) | |||||
Net Assets | ||||||||
Beginning of period | 96,752,770 | 98,865,151 | ||||||
|
|
|
| |||||
End of period(a) | $ | 101,373,623 | $ | 96,752,770 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | 380,115 | $ | 1,817,939 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential International Value Fund | 23 |
Notes to Financial Statements
(Unaudited)
Prudential World Fund, Inc. (the “Fund”), is registered under the Investment Company Act of 1940, as amended, (“1940 Act”) as an open-end diversified management investment company and currently consists of five series: Prudential International Value Fund (the “Series”), Prudential International Equity Fund, Prudential Emerging Markets Debt Local Currency Fund, Prudential Jennison Global Opportunities Fund and Prudential Jennison International Opportunities Fund. These financial statements relate to Prudential International Value Fund. The financial statements of the other series are not presented herein. The investment objective of the Series is to achieve long-term growth of capital.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of its financial statements.
Securities Valuation: The Series holds portfolio 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 delegated fair valuation responsibilities to Prudential Investments LLC (“PI” or “Manager”) through the adoption of Valuation Procedures for valuation of the Fund’s securities. Under the current Valuation Procedures, a Valuation Committee is established and responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures allow the Series to utilize independent pricing vendor services, quotations from market makers and other valuation methods in events when market quotations are not readily available or not representative of the fair value of the securities. A record of the Valuation Committee’s actions is subject to review, approval and ratification by the Board at its next regularly scheduled quarterly meeting.
Various inputs are used in determining the value of the Series’ investments, which are summarized in the three broad level hierarchies based on any observable inputs used as described in the table following the Series’ Portfolio of Investments. The valuation methodologies and significant inputs used in determining the fair value of securities and other assets classified as Level 1, Level 2 and Level 3 of the hierarchy are as follows:
Common stock, exchange-traded funds and financial derivative instruments (including futures contracts and certain options contracts on securities), that are
24 | Visit our website at www.prudentialfunds.com |
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 of the fair value hierarchy.
In the event there is no sale or official closing price on such day, these securities are 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 of the fair value hierarchy as these inputs are considered as significant other observable inputs to the valuation.
For common stocks traded on foreign securities exchanges, certain valuation adjustments will be applied when events occur after the close of the security’s foreign market and before the Series’ normal pricing time. These securities 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 of the fair value hierarchy as the adjustment factors are considered as significant other observable inputs 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 as they have the ability to be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market, such as corporate bonds, municipal bonds, U.S. Government agencies, issues and guaranteed obligations, U.S. Treasury obligations and sovereign issues are usually valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices usually after evaluating observable inputs including yield curves, credit rating, yield spreads, default rates, cash flows as well as broker/dealer quotations and reported trades. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Asset-backed and mortgage-related securities are usually valued by approved independent pricing vendors. The pricing vendors provide the prices using their internal pricing model with input from deal terms, tranche level attributes, yield
Prudential International Value Fund | 25 |
Notes to Financial Statements
(Unaudited) continued
curves, prepayment speeds, default rates and broker/dealer quotes. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Short-term debt securities of sufficient credit quality, which mature in sixty days or less, are valued using amortized cost method, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy.
Over-the-counter financial derivative instruments, such as option contracts, foreign currency contracts and swaps agreements, are usually valued using pricing vendor services, which derive the valuation based on underlying asset prices, indices, spreads, interest rates, exchange rates and other inputs. These instruments are categorized as Level 2 of the fair value hierarchy.
Securities and other assets that cannot be priced using the methods described above are valued with pricing methodologies approved by the Valuation Committee. In the event there are unobservable inputs used when determining such valuations, the securities will be classified as Level 3 of the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Series 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.
26 | Visit our website at www.prudentialfunds.com |
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the fiscal period, the Series 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 securities held at the end of the fiscal period. Similarly, the Series 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 fiscal period. Accordingly, 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 date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ 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 investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.
Foreign 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. The Series enters into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or specific receivables and payables denominated in a foreign currency. The contracts are valued daily at current forward 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 elements of both market and credit risk in excess
Prudential International Value Fund | 27 |
Notes to Financial Statements
(Unaudited) continued
of the amounts reflected on the Statement of Assets and Liabilities. The Series’ 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. A master netting agreement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.
Warrants and Rights: The Series may 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 at a specific price and time through the expiration dates. Such warrants and rights are held as long positions by the Series until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board of Directors’ approved fair valuation procedures.
Restricted and Illiquid Securities: The Series may invest up to 15% of its net assets in illiquid securities. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Series has valued the investment. Therefore, the Series may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur expenses that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Series’ Subadviser under the guidelines adopted by the Series. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized and unrealized 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
28 | Visit our website at www.prudentialfunds.com |
of premium and accretion of discount on debt securities, as required, is recorded on an accrual basis. Expenses are recorded on the accrual basis, which may require the use of certain estimates by management, that may differ from actual.
Net investment income or loss, (other than distribution fees which are charged directly to the respective class) and unrealized and realized gains 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.
Dividends and Distributions: The Series expects to pay dividends of net investment income and distributions of net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.
Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends are recorded, net of reclaimable amounts, at the time the related income is earned.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement for the Series with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into subadvisory agreements with LSV Asset Management (“LSV”) and Thornburg Investment Management, Inc. (“Thornburg”) for the Series.
Prudential International Value Fund | 29 |
Notes to Financial Statements
(Unaudited) continued
The subadvisory agreements provide that LSV and Thornburg furnish investment advisory services in connection with the management of the Series. In connection therewith, LSV and Thornburg are obligated to keep certain books and records of the Series. PI pays for the services of the subadvisors, the compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an annual rate of 1% of the average daily net assets up to $300 million, .95% of the next $700 million of average daily net assets and .90% of average daily net assets in excess of $1 billion of the Series. The effective management fee rate as of April 30, 2013 was 1.00%.
The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C and Class Z shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A, Class B and Class C shares pursuant to plans of distribution (the “Class A, B and C Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Series.
Pursuant to the Class A, B and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30%, 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively. For the six months ended April 30, 2013, PIMS contractually agreed to limit such fee to .25% of the average daily net assets of the Class A shares.
PIMS has advised the Series that it received $18,565 in front-end sales charges resulting from sales of Class A shares, during the six months ended April 30, 2013. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
PIMS advised the Series that for the six months ended April 30, 2013, it received $196, $1,137 and $36 in contingent deferred sales charges imposed upon certain redemptions by Class A, Class B and Class C shareholders, respectively.
PI and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
30 | Visit our website at www.prudentialfunds.com |
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly owned subsidiary of Prudential, serves as the Series’ transfer agent. The transfer agent fees and expenses in the Statement of Operations also include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of Prudential Investment Portfolios 2 registered under the 1940 Act, and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments, for the six months ended April 30, 2013 were $11,253,238 and $18,064,974, respectively.
Note 5. Distributions and Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2013 were as follows:
Tax Basis | Appreciation | Depreciation | Net | |||
$83,331,475 | $24,172,231 | $(7,384,452) | $16,787,779 |
The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies as of the most recent fiscal year end.
Under the Regulated Investment Company Modernization Act of 2010 (“the Act”), the Series is permitted to carryforward capital losses incurred in the fiscal year ended October 31, 2012 (“post-enactment losses”) for an unlimited period. Post-enactment losses are required to be utilized before the utilization of losses incurred prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before October 31, 2012 (“pre-enactment losses”) may
Prudential International Value Fund | 31 |
Notes to Financial Statements
(Unaudited) continued
have an increased likelihood to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of October 31, 2012, the pre and post-enactment losses were approximately:
Post-Enactment Losses: | $ | 581,000 | ||
|
| |||
Pre-Enactment Losses: | ||||
Expiring 2017 | 24,486,000 | |||
Expiring 2018 | 978,000 | |||
|
| |||
$ | 25,464,000 | |||
|
|
Management has analyzed the Series’ 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 Series’ financial statements for the current reporting period. The Series’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Note 6. Capital
The Series offers Class A, Class B, Class C and Class Z shares. Class A shares are sold with a front-end sales charge of up to 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a CDSC which declines from 5% to zero depending upon the period of time the shares are held. Class C shares are sold with a CDSC of 1% during the first 12 months from the date of purchase. Class B shares will automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock.
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There are 250 million authorized shares of $.01 par value common stock, divided into four classes, designated Class A, Class B, Class C and Class Z common stock, each of which consists of 75 million, 50 million, 50 million and 75 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 73,734 | $ | 1,499,605 | |||||
Shares issued in reinvestment of dividends and distributions | 32,904 | 653,810 | ||||||
Shares reacquired | (175,254 | ) | (3,526,846 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (68,616 | ) | (1,373,431 | ) | ||||
Shares issued upon conversion from Class B | 8,440 | 171,760 | ||||||
Shares reacquired upon conversion into Class Z | (2,840 | ) | (57,629 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (63,016 | ) | $ | (1,259,300 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 88,449 | $ | 1,631,363 | |||||
Shares issued in reinvestment of dividends and distributions | 32,651 | 585,430 | ||||||
Shares reacquired | (457,841 | ) | (8,354,606 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (336,741 | ) | (6,137,813 | ) | ||||
Shares issued upon conversion from Class B | 20,082 | 366,930 | ||||||
Shares reacquired upon conversion into Class Z | (6,033 | ) | (107,215 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (322,692 | ) | $ | (5,878,098 | ) | |||
|
|
|
| |||||
Class B | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 10,361 | $ | 202,868 | |||||
Shares issued in reinvestment of dividends and distributions | 966 | 18,389 | ||||||
Shares reacquired | (5,444 | ) | (103,947 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 5,883 | 117,310 | ||||||
Shares reacquired upon conversion into Class A | (8,842 | ) | (171,760 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (2,959 | ) | $ | (54,450 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 8,208 | $ | 144,803 | |||||
Shares issued in reinvestment of dividends and distributions | 929 | 15,993 | ||||||
Shares reacquired | (19,508 | ) | (346,846 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (10,371 | ) | (186,050 | ) | ||||
Shares reacquired upon conversion into Class A | (20,816 | ) | (366,930 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (31,187 | ) | $ | (552,980 | ) | |||
|
|
|
|
Prudential International Value Fund | 33 |
Notes to Financial Statements
(Unaudited) continued
Class C | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 5,938 | $ | 115,055 | |||||
Shares issued in reinvestment of dividends and distributions | 3,380 | 64,459 | ||||||
Shares reacquired | (31,776 | ) | (615,556 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (22,458 | ) | $ | (436,042 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 20,549 | $ | 365,925 | |||||
Shares issued in reinvestment of dividends and distributions | 3,028 | 52,206 | ||||||
Shares reacquired | (95,948 | ) | (1,677,033 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (72,371 | ) | $ | (1,258,902 | ) | |||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 190,303 | $ | 3,881,331 | |||||
Shares issued in reinvestment of dividends and distributions | 63,485 | 1,267,790 | ||||||
Shares reacquired | (423,924 | ) | (8,640,791 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (170,136 | ) | (3,491,670 | ) | ||||
Shares reacquired upon conversion into Class A | 2,823 | 57,629 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (167,313 | ) | $ | (3,434,041 | ) | |||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 529,417 | $ | 9,694,608 | |||||
Shares issued in reinvestment of dividends and distributions | 53,865 | 970,103 | ||||||
Shares reacquired | (428,040 | ) | (8,030,219 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 155,242 | 2,634,492 | ||||||
Shares reacquired upon conversion into Class A | 6,006 | 107,215 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 161,248 | $ | 2,741,707 | |||||
|
|
|
|
Note 7. Borrowings
The Series, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 15, 2012 through November 14, 2013. The Funds pay an annualized commitment fee of .08% of the unused portion of the SCA. Prior to November 15, 2012, the Funds had another Syndicated Credit Agreement 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.
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The Series utilized the SCA during the six months ended April 30, 2013. The average daily balance for the 4 days the Series had loans outstanding during the period was approximately $3,048,000, borrowed at a weighted average interest rate of 1.45%. At April 30, 2013, the Series did not have an outstanding loan amount.
Note 8. New Accounting Pronouncement
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities.” The amendments, which will be effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial statements has not yet been determined.
In June 2013, the FASB issued guidance that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure non-controlling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Series’ financial statement disclosures.
Prudential International Value Fund | 35 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, 2013 | Year Ended October 31, | |||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $19.36 | $18.80 | $20.29 | $18.45 | $15.28 | $34.10 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .11 | .29 | .32 | .22 | .20 | .44 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.30 | .57 | (1.64 | ) | 1.71 | 3.59 | (14.93 | ) | ||||||||||||||||||
Total from investment operations | 2.41 | .86 | (1.32 | ) | 1.93 | 3.79 | (14.49 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.39 | ) | (.30 | ) | (.17 | ) | (.12 | ) | (.62 | ) | (.38 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (3.95 | ) | |||||||||||||||||||
Total dividends and distributions | (.39 | ) | (.30 | ) | (.17 | ) | (.12 | ) | (.62 | ) | (4.33 | ) | ||||||||||||||
Capital Contributions(g) | - | - | - | .03 | - | - | ||||||||||||||||||||
Net Asset Value, end of period | $21.38 | $19.36 | $18.80 | $20.29 | $18.45 | $15.28 | ||||||||||||||||||||
Total Return(a): | 12.62% | 4.71% | (6.56)% | 10.68% | 26.03% | (48.33)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $35,942 | $33,759 | $38,858 | $45,598 | $45,945 | $40,580 | ||||||||||||||||||||
Average net assets (000) | $34,747 | $34,669 | $44,169 | $44,626 | $39,582 | $71,618 | ||||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees(c) | 1.76% | (e) | 1.79% | 1.78% | 1.66% | 1.65% | 1.56% | |||||||||||||||||||
Net investment income | 1.10% | (e) | 1.59% | 1.56% | 1.17% | 1.30% | 1.79% | |||||||||||||||||||
Portfolio turnover rate | 12% | (f) | 16% | 25% | 40% | 40% | 27% |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Calculated based on the average shares outstanding during the period.
(c) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% of the average daily assets of the Class A shares.
(d) Does not include expenses of the underlying portfolio in which the Series invests.
(e) Annualized.
(f) Not Annualized.
(g) The Series received payments related to a former affiliate’s settlement of regulatory proceedings, involving allegations of improper trading in Series shares during the fiscal year ended October 31, 2010. The Series was not involved in the proceedings or in the calculations of the amount of settlement.
See Notes to Financial Statements.
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Class B Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, 2013 | Year Ended October 31, | |||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.46 | $17.93 | $19.37 | $17.64 | $14.58 | $32.73 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .03 | .15 | .16 | .08 | .08 | .24 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.20 | .54 | (1.56 | ) | 1.63 | 3.45 | (14.29 | ) | ||||||||||||||||||
Total from investment operations | 2.23 | .69 | (1.40 | ) | 1.71 | 3.53 | (14.05 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.26 | ) | (.16 | ) | (.04 | ) | (.01 | ) | (.47 | ) | (.15 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (3.95 | ) | |||||||||||||||||||
Total dividends and distributions | (.26 | ) | (.16 | ) | (.04 | ) | (.01 | ) | (.47 | ) | (4.10 | ) | ||||||||||||||
Capital Contributions(f) | - | - | - | .03 | - | - | ||||||||||||||||||||
Net Asset Value, end of period | $20.43 | $18.46 | $17.93 | $19.37 | $17.64 | $14.58 | ||||||||||||||||||||
Total Return(a): | 12.19% | 3.91% | (7.26)% | 9.86% | 25.11% | (48.74)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $1,552 | $1,457 | $1,975 | $3,093 | $3,839 | $5,143 | ||||||||||||||||||||
Average net assets (000) | $1,456 | $1,655 | $2,651 | $3,314 | $3,985 | $10,730 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.51% | (d) | 2.54% | 2.52% | 2.41% | 2.40% | 2.31% | |||||||||||||||||||
Net investment income | .34% | (d) | .83% | .81% | .43% | .58% | 1.01% | |||||||||||||||||||
Portfolio turnover rate | 12% | (e) | 16% | 25% | 40% | 40% | 27% |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Calculated based on the average shares outstanding during the period.
(c) Does not include expenses of the underlying portfolio in which the Series invests.
(d) Annualized.
(e) Not Annualized.
(f) The Series received payments related to a former affiliate’s settlement of regulatory proceedings, involving allegations of improper trading in Series shares during the fiscal year ended October 31, 2010. The Series was not involved in the proceedings or in the calculations of the amount of settlement.
See Notes to Financial Statements.
Prudential International Value Fund | 37 |
Financial Highlights
(Unaudited) continued
Class C Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, 2013 | Year Ended October 31, | |||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.49 | $17.96 | $19.40 | $17.66 | $14.60 | $32.77 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .03 | .15 | .16 | .07 | .08 | .24 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.21 | .54 | (1.56 | ) | 1.65 | 3.45 | (14.31 | ) | ||||||||||||||||||
Total from investment operations | 2.24 | .69 | (1.40 | ) | 1.72 | 3.53 | (14.07 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.26 | ) | (.16 | ) | (.04 | ) | (.01 | ) | (.47 | ) | (.15 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (3.95 | ) | |||||||||||||||||||
Total dividends and distributions | (.26 | ) | (.16 | ) | (.04 | ) | (.01 | ) | (.47 | ) | (4.10 | ) | ||||||||||||||
Capital Contributions(f) | - | - | - | .03 | - | - | ||||||||||||||||||||
Net Asset Value, end of period | $20.47 | $18.49 | $17.96 | $19.40 | $17.66 | $14.60 | ||||||||||||||||||||
Total Return(a): | 12.23% | 3.90% | (7.25)% | 9.91% | 25.08% | (48.74)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $4,836 | $4,784 | $5,947 | $6,828 | $7,507 | $7,355 | ||||||||||||||||||||
Average net assets (000) | $4,804 | $5,132 | $6,690 | $6,760 | $6,807 | $13,571 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.51% | (d) | 2.54% | 2.53% | 2.41% | 2.40% | 2.31% | |||||||||||||||||||
Net investment income | .32% | (d) | .83% | .81% | .42% | .58% | 1.04% | |||||||||||||||||||
Portfolio turnover rate | 12% | (e) | 16% | 25% | 40% | 40% | 27% |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Calculated based on the average shares outstanding during the period.
(c) Does not include expenses of the underlying portfolio in which the Series invests.
(d) Annualized.
(e) Not Annualized.
(f) The Series received payments related to a former affiliate’s settlement of regulatory proceedings, involving allegations of improper trading in Series shares during the fiscal year ended October 31, 2010. The Series was not involved in the proceedings or in the calculations of the amount of settlement.
See Notes to Financial Statements.
38 | Visit our website at www.prudentialfunds.com |
Class Z Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, 2013 | Year Ended October 31, | |||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $19.48 | $18.93 | $20.42 | $18.55 | $15.37 | $34.30 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .13 | .34 | .24 | .26 | .24 | .50 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 2.34 | .56 | (1.51 | ) | 1.74 | 3.62 | (15.02 | ) | ||||||||||||||||||
Total from investment operations | 2.47 | .90 | (1.27 | ) | 2.00 | 3.86 | (14.52 | ) | ||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.44 | ) | (.35 | ) | (.22 | ) | (.16 | ) | (.68 | ) | (.46 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (3.95 | ) | |||||||||||||||||||
Total dividends and distributions | (.44 | ) | (.35 | ) | (.22 | ) | (.16 | ) | (.68 | ) | (4.41 | ) | ||||||||||||||
Capital Contributions(f) | - | - | - | .03 | - | - | ||||||||||||||||||||
Net Asset Value, end of period | $21.51 | $19.48 | $18.93 | $20.42 | $18.55 | $15.37 | ||||||||||||||||||||
Total Return(a): | 12.86% | 4.92% | (6.30)% | 11.01% | 26.41% | (48.23)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $59,043 | $56,753 | $52,086 | $159,020 | $136,238 | $115,710 | ||||||||||||||||||||
Average net assets (000) | $58,701 | $53,465 | $79,550 | $139,023 | $115,310 | $186,380 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 1.51% | (d) | 1.54% | 1.47% | �� | 1.41% | 1.40% | 1.31% | ||||||||||||||||||
Net investment income | 1.34% | (d) | 1.86% | 1.16% | 1.41% | 1.58% | 2.06% | |||||||||||||||||||
Portfolio turnover rate | 12% | (e) | 16% | 25% | 40% | 40% | 27% |
(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Calculated based on the average shares outstanding during the period.
(c) Does not include expenses of the underlying portfolio in which the Series invests.
(d) Annualized.
(e) Not Annualized.
(f) The Series received payments related to a former affiliate’s settlement of regulatory proceedings, involving allegations of improper trading in Series shares during the fiscal year ended October 31, 2010. The Series was not involved in the proceedings or in the calculations of the amount of settlement.
See Notes to Financial Statements.
Prudential International Value Fund | 39 |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.prudentialfunds.com |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s investment subadvisers the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Stuart S. Parker • Richard A. Redeker • Robin B. Smith • Stephen G. Stoneburn |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Bruce Karpati, Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Amanda S. Ryan, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISERS | LSV Asset Management | 155 North Wacker Drive 46th Floor Chicago, IL 60606 | ||
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Thornburg Investment Management, Inc. | 2300 North Ridgetop Road Santa Fe, NM 87506 | |||
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DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | One Wall Street New York, NY 10286 | ||
| ||||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential International Value Fund, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PRUDENTIAL INTERNATIONAL VALUE FUND
SHARE CLASS | A | B | C | Z | ||||
NASDAQ | PISAX | PISBX | PCISX | PISZX | ||||
CUSIP | 743969503 | 743969602 | 743969701 | 743969800 |
MF115E2 0246202-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL EMERGING MARKETS DEBT LOCAL CURRENCY FUND
SEMIANNUAL REPORT · APRIL 30, 2013
Fund Type
Emerging Market Bond
Objective
Total return, through a combination of current income and capital appreciation
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
The accompanying financial statements as of April 30, 2013, were not audited, and accordingly, no auditor’s opinion is expressed on them.
Prudential Investments, 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.
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June 14, 2013
Dear Shareholder:
We hope you find the semiannual report for the Prudential Emerging Markets Debt Local Currency Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2013.
We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.
Thank you for choosing the Prudential Investments family of funds.
Sincerely,
Stuart S. Parker, President
Prudential Emerging Markets Debt Local Currency Fund
*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.
Prudential Emerging Markets Debt Local Currency Fund | 1 |
Your Fund’s Performance (Unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. Class A shares have a maximum initial sales charge of 4.50%. Gross operating expenses: Class A, 1.80%; Class C, 2.50%; Class Q, 1.36%; Class Z, 1.52%. Net operating expenses: Class A, 1.30%; Class C, 2.05%; Class Q, 1.05%; Class Z, 1.05%, after contractual reduction through 2/28/2014.
Cumulative Total Returns (Without Sales Charges) as of 4/30/13 | ||||||||||
Six Months | One Year | Since Inception | ||||||||
Class A | 7.42 | % | 11.67 | % | 12.92% | |||||
Class C | 7.20 | 11.25 | 12.16 | |||||||
Class Q | 7.55 | 12.10 | 13.87 | |||||||
Class Z | 7.62 | 12.00 | 13.85 | |||||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | 7.02 | 10.31 | 15.20 | |||||||
Lipper Emerging Markets Debt Funds Average | 6.23 | 9.94 | 14.02 | |||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/13 | ||||||||||
One Year | Since Inception | |||||||||
Class A | 3.95 | % | 2.03% | |||||||
Class C | 7.46 | 4.09 | ||||||||
Class Q | 9.29 | 4.84 | ||||||||
Class Z | 9.18 | 4.83 | ||||||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | 7.68 | 5.54 | ||||||||
Lipper Emerging Markets Debt Funds Average | 7.16 | 5.10 |
Source: Prudential Investments LLC and Lipper Inc.
Inception date: 3/30/11
The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 4.50% and a 12b-1 fee of up to 0.30% annually. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund. Class C shares are not subject to a front-end sales charge, but charge a CDSC of 1% for shares sold within 12 months from the date of purchase and an annual 12b-1 fee of 1%. Class Q and Class Z shares are not subject to a front-end sales charge, a CDSC or
2 | Visit our website at www.prudentialfunds.com |
12b-1 fee. The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
Benchmark Definitions
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index
The JP Morgan Government Bond Index-Emerging Markets Global Diversified Index (GBI-EM Global Diversified), an unmanaged index, is a comprehensive emerging markets debt benchmark that tracks local currency bonds issued by emerging market governments.
Lipper Emerging Markets Debt Funds Average
Funds in the Lipper Emerging Markets Debt Funds Average seek either current income or total return by investing at least 65% of total assets in emerging market debt securities, where “emerging market” is defined by a country’s GNP per capita or other economic measure.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.
Distributions and Yields as of 4/30/13 |
| |||||||
Total Distributions Paid for Six Months | 30-Day SEC Yield | |||||||
Class A | $ | 0.31 | 3.52 | % | ||||
Class C | 0.27 | 2.90 | ||||||
Class Q | 0.33 | 3.81 | ||||||
Class Z | 0.32 | 3.91 |
Five Largest Issues expressed as a percentage of net assets as of 4/30/13 |
| |||
Turkey Government Bond, Bonds, Ser. 5YR, 9.000%, 03/08/17 | 5.1 | % | ||
South Africa Government Bond, Bonds, Ser. R209, 6.250%, 03/31/36 | 4.8 | |||
Indonesia Treasury Bond, Sr. Unsec’d. Notes, Ser. FR65, 6.625%, 05/15/33 | 2.7 | |||
Poland Government Bond, Bonds, Ser. 1023, 4.000%, 10/25/23 | 2.7 | |||
Philippine Government International Bond, Sr. Unsec’d. Notes, 4.950%, 01/15/21 | 2.3 |
Issues reflect only long-term investments and are subject to change.
Prudential Emerging Markets Debt Local Currency Fund | 3 |
Your Fund’s Performance (continued)
Credit Quality* expressed as a percentage of net assets as of 4/30/13 |
| |||
A | 10.8 | % | ||
Baa | 61.9 | |||
Ba | 18.3 | |||
B | 1.2 | |||
Not Rated** | 5.9 | |||
Total Investments | 98.1 | |||
Other assets in excess of liabilities | 1.9 | |||
Net Assets | 100.0 | % | ||
|
|
*Source: Moody’s rating, defaulting to S&P when not rated by Moody’s.
**Approximately 2.5% of Not Rated is invested in affiliated money market mutual funds.
Credit Quality is subject to change.
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Fees and Expenses (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2012, at the beginning of the period, and held through the six-month period ended April 30, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before
Prudential Emerging Markets Debt Local Currency Fund | 5 |
Fees and Expenses (continued)
expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Prudential Emerging Markets Debt Local Currency Fund | Beginning Account Value November 1, 2012 | Ending Account April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,074.20 | 1.30 | % | $ | 6.69 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.35 | 1.30 | % | $ | 6.51 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,072.00 | 2.05 | % | $ | 10.53 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.63 | 2.05 | % | $ | 10.24 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 1,075.50 | 1.05 | % | $ | 5.40 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.59 | 1.05 | % | $ | 5.26 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,076.20 | 1.05 | % | $ | 5.41 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.59 | 1.05 | % | $ | 5.26 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2013, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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Portfolio of Investments
as of April 30, 2013 (Unaudited)
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
LONG-TERM INVESTMENTS 95.6% | ||||||||||||||||
FOREIGN BONDS | ||||||||||||||||
Barbados 0.3% | ||||||||||||||||
Columbus International, Inc., | ||||||||||||||||
Sr. Sec’d. Notes, RegS (original cost $188,913; purchased 09/18/12)(a)(b) | B2 | 11.500% | 11/20/14 | 170 | $ | 189,125 | ||||||||||
Brazil 10.1% | ||||||||||||||||
Banco Santander Brasil SA, | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, 144A | Baa1 | 8.000 | 03/18/16 | BRL | 2,250 | 1,150,657 | ||||||||||
Banco Votorantim Ltd., Sr. Unsec’d. Notes, MTN, RegS | Baa2 | 10.625 | 04/10/14 | BRL | 415 | 210,550 | ||||||||||
Brazil Notas do Tesouro Nacional, | ||||||||||||||||
Bonds, Ser. NTNB - Inflation Linked | Baa2 | 6.000 | 08/15/18 | BRL | 298 | 379,184 | ||||||||||
Notes, Ser. NTNB - Inflation Linked | Baa2 | 6.000 | 08/15/22 | BRL | 513 | 677,962 | ||||||||||
Notes, Ser. NTNF | Baa2 | 10.000 | 01/01/18 | BRL | 530 | 274,281 | ||||||||||
Notes, Ser. NTNF | Baa2 | 10.000 | 01/01/21 | BRL | 1,553 | 799,843 | ||||||||||
Notes, Ser. NTNF | Baa2 | 10.000 | 01/01/23 | BRL | 2,441 | 1,249,813 | ||||||||||
Sr. Notes, Ser. NTNF | Baa2 | 10.000 | 01/01/17 | BRL | 1,576 | 813,056 | ||||||||||
Brazilian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | Baa2 | 8.500 | 01/05/24 | BRL | 500 | 278,146 | ||||||||||
Itau Unibanco Holding SA, | ||||||||||||||||
Sr. Unsec’d. Notes, RegS | Baa1 | 10.500 | 11/23/15 | BRL | 300 | 161,377 | ||||||||||
|
| |||||||||||||||
5,994,869 | ||||||||||||||||
Colombia 2.3% | ||||||||||||||||
Colombia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | Baa3 | 7.750 | 04/14/21 | COP | 197,000 | 135,012 | ||||||||||
Sr. Unsec’d. Notes | Baa3 | 9.850 | 06/28/27 | COP | 180,000 | 153,047 | ||||||||||
Colombian TES, | ||||||||||||||||
Bonds, Ser. B | Baa3 | 11.000 | 07/24/20 | COP | 880,000 | 658,932 | ||||||||||
Bonds, Ser. B | Baa3 | 11.250 | 10/24/18 | COP | 305,000 | 219,824 | ||||||||||
Empresas Publicas de Medellin ESP, | ||||||||||||||||
Sr. Unsec’d. Notes, RegS | Baa3 | 8.375 | 02/01/21 | COP | 300,000 | 193,224 | ||||||||||
|
| |||||||||||||||
1,360,039 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 7 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Costa Rica 0.9% | ||||||||||||||||
Costa Rica Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, RegS | Baa3 | 6.548% | 03/20/14 | 500 | $ | 517,500 | ||||||||||
Czech Republic 0.4% | ||||||||||||||||
Czech Republic Government Bond, | ||||||||||||||||
Bonds, Ser. 51 | A1 | 4.000 | 04/11/17 | CZK | 4,000 | 230,643 | ||||||||||
Dominican Republic 0.3% | ||||||||||||||||
Dominican Republic International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, RegS | B1 | 9.040 | 01/23/18 | 153 | 171,073 | |||||||||||
Ghana 0.2% | ||||||||||||||||
Ghana Government Bond, Bonds, Ser. 3YR | B1 | 16.900 | 03/07/16 | GHS | 260 | 127,613 | ||||||||||
Hungary 3.0% | ||||||||||||||||
Hungary Government Bond, Bonds, | ||||||||||||||||
Ser. 16/C | Ba1 | 5.500 | 02/12/16 | HUF | 33,080 | 149,482 | ||||||||||
Ser. 17/B | Ba1 | 6.750 | 02/24/17 | HUF | 208,060 | 974,870 | ||||||||||
Ser. 23/A | Ba1 | 6.000 | 11/24/23 | HUF | 139,710 | 646,039 | ||||||||||
|
| |||||||||||||||
1,770,391 | ||||||||||||||||
Indonesia 8.2% | ||||||||||||||||
Indonesia Treasury Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, | ||||||||||||||||
Ser. FR36 | Baa3 | 11.500 | 09/15/19 | IDR | 2,200,000 | 302,129 | ||||||||||
Ser. FR53 | Baa3 | 8.250 | 07/15/21 | IDR | 4,970,000 | 605,951 | ||||||||||
Ser. FR54 | Baa3 | 9.500 | 07/15/31 | IDR | 4,000,000 | 549,341 | ||||||||||
Ser. FR56 | Baa3 | 8.375 | 09/15/26 | IDR | 1,000,000 | 123,992 | ||||||||||
Ser. FR58 | Baa3 | 8.250 | 06/15/32 | IDR | 4,300,000 | 530,347 | ||||||||||
Ser. FR59 | Baa3 | 7.000 | 05/15/27 | IDR | 3,800,000 | 422,405 | ||||||||||
Ser. FR60 | Baa3 | 6.250 | 04/15/17 | IDR | 1,500,000 | 162,571 | ||||||||||
Ser. FR61 | Baa3 | 7.000 | 05/15/22 | IDR | 4,800,000 | 547,820 | ||||||||||
Ser. FR65 | Baa3 | 6.625 | 05/15/33 | IDR | 15,200,000 | 1,598,959 | ||||||||||
|
| |||||||||||||||
4,843,515 |
See Notes to Financial Statements.
8 | Visit our website at www.prudentialfunds.com |
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Malaysia 3.2% | ||||||||||||||||
Malaysia Government Bond, | ||||||||||||||||
Ser. 0111 | A3 | 4.160% | 07/15/21 | MYR | 2,710 | $ | 940,481 | |||||||||
Ser. 0112 | A3 | 3.418 | 08/15/22 | MYR | 280 | 92,139 | ||||||||||
Ser. 0311 | A3 | 4.392 | 04/15/26 | MYR | 340 | 120,894 | ||||||||||
Ser. 0412 | A3 | 4.127 | 04/15/32 | MYR | 1,870 | 639,802 | ||||||||||
Ser. 0413 | A3 | 3.844 | 04/15/33 | MYR | 250 | 82,497 | ||||||||||
|
| |||||||||||||||
1,875,813 | ||||||||||||||||
Mexico 11.2% | ||||||||||||||||
America Movil SAB de CV, | A2 | 6.450 | 12/05/22 | MXN | 7,500 | 671,470 | ||||||||||
Mexican Bonos, Bonds, | ||||||||||||||||
Ser. M | Baa1 | 6.000 | 06/18/15 | MXN | 6,481 | 555,681 | ||||||||||
Ser. M | Baa1 | 6.500 | 06/10/21 | MXN | 2,000 | 187,819 | ||||||||||
Ser. M | Baa1 | 6.500 | 06/09/22 | MXN | 11,175 | 1,057,942 | ||||||||||
Ser. M | Baa1 | 7.750 | 05/29/31 | MXN | 8,893 | 963,877 | ||||||||||
Ser. M 10 | Baa1 | 7.750 | 12/14/17 | MXN | 9,900 | 938,790 | ||||||||||
Ser. M 10 | Baa1 | 8.500 | 12/13/18 | MXN | 2,150 | 215,044 | ||||||||||
Ser. M 20 | Baa1 | 8.500 | 05/31/29 | MXN | 1,400 | 160,776 | ||||||||||
Petroleos Mexicanos, | Baa1 | 4.770 | 05/12/14 | MXN | 6,000 | 493,399 | ||||||||||
Gtd. Notes | Baa1 | 9.100 | 01/27/20 | MXN | 9,650 | 977,398 | ||||||||||
Gtd. Notes, 144A | Baa1 | 7.650 | 11/24/21 | MXN | 4,120 | 390,512 | ||||||||||
|
| |||||||||||||||
6,612,708 | ||||||||||||||||
Netherlands 0.6% | ||||||||||||||||
VimpelCom Holdings BV, | Ba3 | 4.284 | 06/29/14 | 200 | 203,799 | |||||||||||
Gtd. Notes, 144A | Ba3 | 9.000 | 02/13/18 | RUB | 5,000 | 168,022 | ||||||||||
|
| |||||||||||||||
371,821 | ||||||||||||||||
Nigeria 2.6% | ||||||||||||||||
Nigeria Treasury Bond, Bonds, | ||||||||||||||||
Ser. 3YR | Ba3 | 10.500 | 03/18/14 | NGN | 5,740 | 35,964 | ||||||||||
Ser. 5YR | Ba3 | 4.000 | 04/23/15 | NGN | 122,540 | 672,031 | ||||||||||
Ser. 5YR | Ba3 | 15.100 | 04/27/17 | NGN | 33,495 | 233,193 | ||||||||||
Ser. 7YR | Ba3 | 16.000 | 06/29/19 | NGN | 20,805 | 153,654 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 9 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Nigeria (cont’d.) | ||||||||||||||||
Ser. 10YR | Ba3 | 16.390% | 01/27/22 | NGN | 45,225 | $ | 356,848 | |||||||||
Ser. 20YR | Ba3 | 10.000 | 07/23/30 | NGN | 20,390 | 108,173 | ||||||||||
|
| |||||||||||||||
1,559,863 | ||||||||||||||||
Peru 4.0% | ||||||||||||||||
Peru Government Bond, | Baa2 | 6.950 | 08/12/31 | PEN | 190 | 89,544 | ||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | Baa2 | 7.840 | 08/12/20 | PEN | 650 | 307,711 | ||||||||||
Sr. Unsec’d. Notes, RegS | Baa2 | 6.950 | 08/12/31 | PEN | 1,560 | 735,201 | ||||||||||
Sr. Unsec’d. Notes, RegS | Baa2 | 7.840 | 08/12/20 | PEN | 2,565 | 1,214,274 | ||||||||||
|
| |||||||||||||||
2,346,730 | ||||||||||||||||
Philippines 2.8% | ||||||||||||||||
Philippine Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | Ba1 | 4.950 | 01/15/21 | PHP | 49,000 | 1,333,334 | ||||||||||
Sr. Unsec’d. Notes | Ba1 | 6.250 | 01/14/36 | PHP | 10,000 | 317,379 | ||||||||||
|
| |||||||||||||||
1,650,713 | ||||||||||||||||
Poland 6.2% | ||||||||||||||||
Poland Government Bond, Bonds, | ||||||||||||||||
Ser. 0415 | A2 | 5.500 | 04/25/15 | PLN | 1,705 | 569,152 | ||||||||||
Ser. 0417 | A2 | 4.750 | 04/25/17 | PLN | 1,230 | 418,804 | ||||||||||
Ser. 1017 | A2 | 5.250 | 10/25/17 | PLN | 1,410 | 493,479 | ||||||||||
Ser. 1020 | A2 | 5.250 | 10/25/20 | PLN | 840 | 305,471 | ||||||||||
Ser. 1023 | A2 | 4.000 | 10/25/23 | PLN | 4,690 | 1,581,911 | ||||||||||
Ser. CPI - Inflation Linked | A2 | 2.750 | 08/25/23 | PLN | 772 | 275,277 | ||||||||||
|
| |||||||||||||||
3,644,094 | ||||||||||||||||
Romania 0.4% | ||||||||||||||||
Romania Government Bond, Bonds, Ser. 5YR | Baa3 | 5.600 | 11/28/18 | RON | 800 | 249,753 | ||||||||||
Russia 9.6% | ||||||||||||||||
AHML Finance Ltd., | Baa1 | 7.750 | 02/13/18 | RUB | 12,250 | 397,719 |
See Notes to Financial Statements.
10 | Visit our website at www.prudentialfunds.com |
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Russia (cont’d.) | ||||||||||||||||
Home Credit & Finance Bank Via Eurasia Capital SA, | Ba3 | 7.000% | 03/18/14 | 250 | $ | 258,125 | ||||||||||
Russian Agricultural Bank | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | Baa1 | 8.625 | 02/17/17 | RUB | 3,000 | 100,211 | ||||||||||
Sr. Unsec’d. Notes, RegS | Baa1 | 7.875 | 02/07/18 | RUB | 11,200 | 360,632 | ||||||||||
Sr. Unsec’d. Notes, RegS | Baa1 | 8.625 | 02/17/17 | RUB | 20,900 | 698,138 | ||||||||||
Sr. Unsec’d. Notes, Ser. E, MTN, RegS | Baa1 | 8.700 | 03/17/16 | RUB | 18,000 | 601,845 | ||||||||||
Russian Federal Bond - OFZ, Bonds, | ||||||||||||||||
Ser. 6205 | Baa1 | 7.600 | 04/14/21 | RUB | 12,445 | 432,433 | ||||||||||
Ser. 6207 | Baa1 | 8.150 | 02/03/27 | RUB | 20,000 | 726,852 | ||||||||||
Ser. 6211 | Baa1 | 7.000 | 01/25/23 | RUB | 8,350 | 279,458 | ||||||||||
Ser. 6212 | Baa1 | 7.050 | 01/19/28 | RUB | 23,890 | 787,656 | ||||||||||
RZD Capital Ltd., | Baa1 | 8.300 | 04/02/19 | RUB | 30,200 | 1,017,280 | ||||||||||
|
| |||||||||||||||
5,660,349 | ||||||||||||||||
Singapore 0.3% | ||||||||||||||||
Berau Capital Resources Pte Ltd., | ||||||||||||||||
Sr. Sec’d. Notes, RegS | B1 | 12.500 | 07/08/15 | 145 | 154,425 | |||||||||||
South Africa 10.2% | ||||||||||||||||
Eskom Holdings Ltd., Notes, | Baa2 | 10.000 | 01/25/23 | ZAR | 7,500 | 1,032,549 | ||||||||||
South Africa Government Bond, Bonds, | ||||||||||||||||
Ser. 2023 | Baa1 | 7.750 | 02/28/23 | ZAR | 3,375 | 416,565 | ||||||||||
Ser. R186 | Baa1 | 10.500 | 12/21/26 | ZAR | 4,243 | 628,589 | ||||||||||
Ser. R204 | Baa1 | 8.000 | 12/21/18 | ZAR | 2,855 | 351,661 | ||||||||||
Ser. R207 | Baa1 | 7.250 | 01/15/20 | ZAR | 3,120 | 372,515 | ||||||||||
Ser. R208 | Baa1 | 6.750 | 03/31/21 | ZAR | 3,500 | 407,160 | ||||||||||
Ser. R209 | Baa1 | 6.250 | 03/31/36 | ZAR | 29,914 | 2,859,263 | ||||||||||
|
| |||||||||||||||
6,068,302 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 11 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Spain 1.5% | ||||||||||||||||
Spain Government International Bond, | Baa3 | 4.000% | 03/06/18 | 500 | $ | 511,000 | ||||||||||
Sr. Unsec’d. Notes, Ser. E, MTN | Baa3 | 3.625 | 06/17/13 | 400 | 400,922 | |||||||||||
|
| |||||||||||||||
911,922 | ||||||||||||||||
Thailand 3.6% | ||||||||||||||||
Thailand Government Bond, Bonds, | ||||||||||||||||
Sr. Unsec’d. Notes | Baa1 | 3.580 | 12/17/27 | THB | 11,900 | 407,956 | ||||||||||
Sr. Unsec’d. Notes | Baa1 | 3.625 | 06/16/23 | THB | 4,177 | 144,835 | ||||||||||
Sr. Unsec’d. Notes | Baa1 | 3.650 | 12/17/21 | THB | 2,000 | 69,723 | ||||||||||
Sr. Unsec’d. Notes | Baa1 | 3.775 | 06/25/32 | THB | 600 | 20,270 | ||||||||||
Sr. Unsec’d. Notes | Baa1 | 3.850 | 12/12/25 | THB | 2,000 | 70,268 | ||||||||||
Sr. Unsec’d. Notes | Baa1 | 5.670 | 03/13/28 | THB | 5,000 | 209,674 | ||||||||||
Sr. Unsec’d. Notes - Inflation Linked | Baa1 | 1.200 | 07/14/21 | THB | 35,340 | 1,234,002 | ||||||||||
|
| |||||||||||||||
2,156,728 | ||||||||||||||||
Turkey 8.8% | ||||||||||||||||
Turkey Government Bond, | ||||||||||||||||
Bonds | Ba1 | 9.000 | 01/27/16 | TRY | 1,360 | 825,748 | ||||||||||
Bonds | Ba1 | 10.000 | 06/17/15 | TRY | 815 | 496,887 | ||||||||||
Bonds | Ba1 | 10.500 | 01/15/20 | TRY | 775 | 537,561 | ||||||||||
Bonds, Ser. CPI - Inflation Linked | Ba1 | 3.000 | 07/21/21 | TRY | 536 | 348,497 | ||||||||||
Bonds, Ser. 5YR | Ba1 | 9.000 | 03/08/17 | TRY | 4,865 | 3,028,498 | ||||||||||
|
| |||||||||||||||
5,237,191 | ||||||||||||||||
Ukraine 0.4% | ||||||||||||||||
NAK Naftogaz Ukraine, | NR | 9.500 | 09/30/14 | 230 | 238,533 | |||||||||||
United Arab Emirates 0.7% | ||||||||||||||||
Dubai DOF Sukuk Ltd., | NR | 6.396 | 11/03/14 | 155 | 164,300 | |||||||||||
Emirate of Dubai Government International Bonds, | NR | 6.700 | 10/05/15 | 250 | 275,625 | |||||||||||
|
| |||||||||||||||
439,925 |
See Notes to Financial Statements.
12 | Visit our website at www.prudentialfunds.com |
Description | Moody’s Ratings† | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | |||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Uruguay 1.5% | ||||||||||||||||
Uruguay Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | Baa3 | 4.375% | 12/15/28 | UYU | 6,739 | $ | 451,273 | |||||||||
Sr. Unsec’d. Notes | Baa3 | 5.000 | 09/14/18 | UYU | 7,059 | 435,769 | ||||||||||
|
| |||||||||||||||
887,042 | ||||||||||||||||
Venezuela 2.3% | ||||||||||||||||
Petroleos de Venezuela SA, | B1 | 8.000 | 11/17/13 | 40 | 40,240 | |||||||||||
Sr. Unsec’d. Notes, Ser. 2014 | NR | 4.900 | 10/28/14 | 1,340 | 1,291,760 | |||||||||||
|
| |||||||||||||||
1,332,000 | ||||||||||||||||
|
| |||||||||||||||
Total long-term investments | 56,602,680 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENTS 2.5% | ||||||||||||||||
Affiliated Money Market Mutual Fund 2.5% |
| |||||||||||||||
Prudential Investment | 1,485,771 | 1,485,771 | ||||||||||||||
|
| |||||||||||||||
Notional | ||||||||||||||||
OPTIONS PURCHASED* | ||||||||||||||||
Call Options | ||||||||||||||||
Euro/Polish Zloty expiring 10/24/2013 @ 4.135 | EUR | 750 | 28,193 | |||||||||||||
|
| |||||||||||||||
Total short-term investments | 1,513,964 | |||||||||||||||
|
| |||||||||||||||
Total Investments 98.1% | 58,116,644 | |||||||||||||||
Other assets in excess of liabilities(e) 1.9% | 1,113,525 | |||||||||||||||
|
| |||||||||||||||
Net Assets 100.0% | $ | 59,230,169 | ||||||||||||||
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 13 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
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.
BRL—Brazilian Real
CLP—Chilean Peso
CNY—Chinese Yuan Renminbi
COP—Colombian Peso
CZK—Czech Koruna
EUR—Euro
GHS—Ghana Cedi
HUF—Hungarian Forint
IDR—Indonesian Rupiah
ILS—Israeli New Shekel
JPY—Japanese Yen
KRW—South Korean Won
MTN—Medium Term Note
MXN—Mexican Peso
MYR—Malaysian Ringgit
NGN—Nigerian Naira
NR—Not Rated by Moody’s or Standard & Poor’s
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RON—Romanian Leu
RUB—Russian Ruble
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
UYU—Uruguayan Peso
ZAR—South African Rand
† | The ratings reflected are as of April 30, 2013. Ratings of certain bonds may have changed subsequent to that date. The Series’ current Statement of Additional Information contains a description of Moody’s and Standard & Poor’s ratings. |
# | Principal amount shown in U.S. dollars unless otherwise stated. |
* | Non-income producing security. |
(a) | Indicates a security that has been deemed illiquid. |
(b) | Indicates a restricted security, the aggregate original cost of such securities is $188,913. The aggregate value of $189,125 is approximately 0.3% of net assets. |
(c) | Variable rate instrument. The interest rate shown reflects the rate in effect at April 30, 2013. |
See Notes to Financial Statements.
14 | Visit our website at www.prudentialfunds.com |
(d) | Prudential Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolio 2 - Prudential Core Taxable Money Market Fund. |
(e) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end: |
Forward foreign currency exchange contracts outstanding at April 30, 2013:
Purchase Contracts | Counterparty | Notional Amount | Value at Settlement Date Payable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Brazilian Real | ||||||||||||||||||
Expiring 07/18/13 | Citibank NA | BRL | 700,481 | $ | 350,574 | $ | 346,219 | $ | (4,355 | ) | ||||||||
Expiring 07/18/13 | Citibank NA | BRL | 224,560 | 112,000 | 110,991 | (1,009 | ) | |||||||||||
Expiring 07/18/13 | UBS AG | BRL | 97,695 | 48,400 | 48,287 | (113 | ) | |||||||||||
Chilean Peso | ||||||||||||||||||
Expiring 06/11/13 | Citibank NA | CLP | 266,583,281 | 554,469 | 562,616 | 8,147 | ||||||||||||
Expiring 06/11/13 | Citibank NA | CLP | 70,529,400 | 148,000 | 148,850 | 850 | ||||||||||||
Chinese Yuan Renminbi | ||||||||||||||||||
Expiring 06/21/13 | Citibank NA | CNY | 1,788,362 | 284,726 | 289,321 | 4,595 | ||||||||||||
Expiring 06/21/13 | Goldman Sachs Group LP | CNY | 2,527,000 | 402,388 | 408,817 | 6,429 | ||||||||||||
Colombian Peso | ||||||||||||||||||
Expiring 07/18/13 | Citibank NA | COP | 884,104,200 | 478,800 | 481,180 | 2,380 | ||||||||||||
Expiring 07/18/13 | Citibank NA | COP | 365,000,000 | 200,000 | 198,654 | (1,346 | ) | |||||||||||
Expiring 07/18/13 | Citibank NA | COP | 341,310,000 | 186,000 | 185,760 | (240 | ) | |||||||||||
Expiring 07/18/13 | UBS AG | COP | 22,952,188 | 12,500 | 12,492 | (8 | ) | |||||||||||
Euro | ||||||||||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 500,000 | 652,978 | 658,872 | 5,894 | ||||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 444,000 | 581,284 | 585,078 | 3,794 | ||||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 266,000 | 347,266 | 350,520 | 3,254 | ||||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 45,000 | 58,866 | 59,299 | 433 | ||||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 45,000 | 58,871 | 59,299 | 428 | ||||||||||||
Hungarian Forint | ||||||||||||||||||
Expiring 07/24/13 | Citibank NA | HUF | 192,706,082 | 832,582 | 840,727 | 8,145 | ||||||||||||
Expiring 07/24/13 | Citibank NA | HUF | 51,595,722 | 223,795 | 225,099 | 1,304 | ||||||||||||
Expiring 07/24/13 | UBS AG | HUF | 4,771,397 | 20,800 | 20,817 | 17 | ||||||||||||
Indonesian Rupiah | ||||||||||||||||||
Expiring 05/06/13 | Merrill Lynch & Co., Inc. | IDR | 1,343,852,000 | 139,000 | 138,114 | (886 | ) | |||||||||||
Expiring 05/07/13 | Barclays Capital, Inc. | IDR | 728,028,000 | 74,900 | 74,814 | (86 | ) | |||||||||||
Expiring 05/07/13 | Barclays Capital, Inc. | IDR | 589,782,000 | 60,000 | 60,607 | 607 | ||||||||||||
Expiring 05/07/13 | Barclays Capital, Inc. | IDR | 488,302,500 | 49,700 | 50,179 | 479 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 15 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Purchase Contracts | Counterparty | Notional Amount | Value at Settlement Date Payable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Expiring 05/07/13 | Citibank NA | IDR | 2,147,961,210 | $ | 219,900 | $ | 220,729 | $ | 829 | |||||||||
Expiring 05/07/13 | Citibank NA | IDR | 357,152,500 | 36,500 | 36,702 | 202 | ||||||||||||
Expiring 05/07/13 | Credit Suisse International | IDR | 1,172,862,805 | 120,727 | 120,526 | (201 | ) | |||||||||||
Expiring 05/07/13 | Credit Suisse International | IDR | 527,326,800 | 54,600 | 54,189 | (411 | ) | |||||||||||
Expiring 05/07/13 | Credit Suisse International | IDR | 390,614,100 | 40,100 | 40,140 | 40 | ||||||||||||
Expiring 05/07/13 | Credit Suisse International | IDR | 283,678,000 | 29,200 | 29,151 | (49 | ) | |||||||||||
Expiring 05/07/13 | Goldman Sachs Group LP | IDR | 483,021,000 | 49,500 | 49,636 | 136 | ||||||||||||
Expiring 05/07/13 | JPMorgan Chase Bank | IDR | 585,494,200 | 60,100 | 60,167 | 67 | ||||||||||||
Expiring 05/07/13 | UBS AG | IDR | 4,853,702,800 | 495,200 | 498,776 | 3,576 | ||||||||||||
Expiring 05/07/13 | UBS AG | IDR | 2,446,920,000 | 252,000 | 251,450 | (550 | ) | |||||||||||
Expiring 05/07/13 | UBS AG | IDR | 385,110,000 | 39,600 | 39,575 | (25 | ) | |||||||||||
Expiring 08/02/13 | Citibank NA | IDR | 2,840,119,580 | 290,594 | 288,584 | (2,010 | ) | |||||||||||
Expiring 08/02/13 | UBS AG | IDR | 1,343,852,000 | 137,254 | 136,549 | (705 | ) | |||||||||||
Expiring 08/02/13 | UBS AG | IDR | 397,575,500 | 40,600 | 40,398 | (202 | ) | |||||||||||
Malaysian Ringgit | ||||||||||||||||||
Expiring 06/17/13 | UBS AG | MYR | 4,563,939 | 1,499,323 | 1,494,694 | (4,629 | ) | |||||||||||
Expiring 07/15/13 | Citibank NA | MYR | 4,563,939 | 1,494,413 | 1,491,682 | (2,731 | ) | |||||||||||
Expiring 07/15/13 | UBS AG | MYR | 135,642 | 44,400 | 44,333 | (67 | ) | |||||||||||
Expiring 10/17/13 | Barclays Capital, Inc. | MYR | 4,563,939 | 1,488,322 | 1,481,874 | (6,448 | ) | |||||||||||
Mexican Peso | ||||||||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 7,834,474 | 630,000 | 640,666 | 10,666 | ||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 3,844,825 | 311,000 | 314,411 | 3,411 | ||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 2,297,199 | 185,730 | 187,854 | 2,124 | ||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 2,028,329 | 166,000 | 165,867 | (133 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 948,261 | 76,507 | 77,544 | 1,037 | ||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 793,003 | 64,000 | 64,848 | 848 | ||||||||||||
Expiring 07/22/13 | UBS AG | MXN | 1,204,691 | 97,000 | 98,514 | 1,514 | ||||||||||||
Expiring 07/22/13 | UBS AG | MXN | 528,405 | 43,200 | 43,210 | 10 | ||||||||||||
Nigerian Naira | ||||||||||||||||||
Expiring 05/13/13 | Citibank NA | NGN | 20,254,500 | 126,000 | 127,721 | 1,721 | ||||||||||||
Expiring 05/13/13 | JPMorgan Chase Bank | NGN | 30,690,897 | 192,661 | 193,532 | 871 | ||||||||||||
Expiring 08/02/13 | UBS AG | NGN | 2,238,943 | 13,900 | 13,784 | (116 | ) |
See Notes to Financial Statements.
16 | Visit our website at www.prudentialfunds.com |
Purchase Contracts | Counterparty | Notional Amount | Value at Settlement Date Payable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Peruvian Nuevo Sol | ||||||||||||||||||
Expiring 07/10/13 | HSBC | PEN | 647,250 | $ | 250,000 | $ | 243,871 | $ | (6,129 | ) | ||||||||
Expiring 07/10/13 | UBS AG | PEN | 25,995 | 9,800 | 9,794 | (6 | ) | |||||||||||
Philippine Peso | ||||||||||||||||||
Expiring 06/05/13 | Barclays Capital, Inc. | PHP | 214,491 | 5,300 | 5,204 | (96 | ) | |||||||||||
Expiring 06/05/13 | Barclays Capital, Inc. | PHP | 137,666 | 3,400 | 3,340 | (60 | ) | |||||||||||
Expiring 06/05/13 | Citibank NA | PHP | 7,077,800 | 172,000 | 171,706 | (294 | ) | |||||||||||
Expiring 06/05/13 | Citibank NA | PHP | 3,496,050 | 85,000 | 84,813 | (187 | ) | |||||||||||
Expiring 06/05/13 | Credit Suisse International | PHP | 5,510,080 | 134,000 | 133,673 | (327 | ) | |||||||||||
Polish Zloty | ||||||||||||||||||
Expiring 07/24/13 | Barclays Capital, Inc. | PLN | 736,648 | 232,000 | 231,762 | (238 | ) | |||||||||||
Expiring 07/24/13 | Citibank NA | PLN | 6,628,292 | 2,093,222 | 2,085,376 | (7,846 | ) | |||||||||||
Expiring 07/24/13 | Citibank NA | PLN | 279,858 | 88,000 | 88,048 | 48 | ||||||||||||
Expiring 07/24/13 | Citibank NA | PLN | 42,746 | 13,329 | 13,449 | 120 | ||||||||||||
Expiring 07/24/13 | Credit Suisse International | PLN | 423,452 | 132,000 | 133,225 | 1,225 | ||||||||||||
Expiring 07/24/13 | UBS AG | PLN | 132,780 | 41,800 | 41,775 | (25 | ) | |||||||||||
Romanian Leu | ||||||||||||||||||
Expiring 07/24/13 | Barclays Capital, Inc. | RON | 513,350 | 152,000 | 154,970 | 2,970 | ||||||||||||
Expiring 07/24/13 | Barclays Capital, Inc. | RON | 459,732 | 136,526 | 138,784 | 2,258 | ||||||||||||
Russian Ruble | ||||||||||||||||||
Expiring 05/07/13 | Bank of New York Mellon (The) | RUB | 5,447,468 | 175,047 | 174,748 | (299 | ) | |||||||||||
Expiring 07/15/13 | Barclays Capital, Inc. | RUB | 7,207,313 | 225,000 | 228,453 | 3,453 | ||||||||||||
Expiring 07/18/13 | Barclays Capital, Inc. | RUB | 3,536,120 | 112,000 | 112,034 | 34 | ||||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 8,877,767 | 283,000 | 281,272 | (1,728 | ) | |||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 4,721,027 | 150,709 | 149,575 | (1,134 | ) | |||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 2,652,300 | 84,000 | 84,032 | 32 | ||||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 1,645,946 | 51,722 | 52,148 | 426 | ||||||||||||
Expiring 07/18/13 | HSBC | RUB | 4,386,493 | 139,000 | 138,976 | (24 | ) | |||||||||||
Expiring 07/18/13 | UBS AG | RUB | 1,381,984 | 44,100 | 43,785 | (315 | ) | |||||||||||
Singapore Dollar | ||||||||||||||||||
Expiring 07/23/13 | Citibank NA | SGD | 676,220 | 546,573 | 549,045 | 2,472 | ||||||||||||
South African Rand | ||||||||||||||||||
Expiring 07/30/13 | Barclays Capital, Inc. | ZAR | 2,248,377 | 247,000 | 247,404 | 404 | ||||||||||||
Expiring 07/30/13 | Barclays Capital, Inc. | ZAR | 1,850,756 | 200,000 | 203,651 | 3,651 | ||||||||||||
Expiring 07/30/13 | Citibank NA | ZAR | 354,962 | 39,000 | 39,059 | 59 | ||||||||||||
Expiring 07/30/13 | UBS AG | ZAR | 415,404 | 45,700 | 45,709 | 9 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 17 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Purchase Contracts | Counterparty | Notional Amount | Value at Settlement Date Payable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
South Korean Won | ||||||||||||||||||
Expiring 07/15/13 | Barclays Capital, Inc. | KRW | 56,300,000 | $ | 50,000 | $ | 50,974 | $ | 974 | |||||||||
Expiring 07/15/13 | Citibank NA | KRW | 128,449,965 | 115,300 | 116,298 | 998 | ||||||||||||
Expiring 07/15/13 | Citibank NA | KRW | 92,013,800 | 83,000 | 83,308 | 308 | ||||||||||||
Expiring 07/15/13 | Citibank NA | KRW | 56,926,200 | 51,000 | 51,541 | 541 | ||||||||||||
Expiring 07/15/13 | Credit Suisse International | KRW | 225,140,100 | 201,000 | 203,840 | 2,840 | ||||||||||||
Expiring 07/15/13 | HSBC | KRW | 94,881,250 | 85,000 | 85,905 | 905 | ||||||||||||
Expiring 07/15/13 | HSBC | KRW | 89,788,500 | 81,000 | 81,294 | 294 | ||||||||||||
Expiring 07/15/13 | UBS AG | KRW | 85,429,858 | 74,383 | 77,347 | 2,964 | ||||||||||||
Thai Baht | ||||||||||||||||||
Expiring 05/28/13 | Citibank NA | THB | 52,699,536 | 1,758,938 | 1,792,534 | 33,596 | ||||||||||||
Expiring 05/28/13 | Citibank NA | THB | 3,048,511 | 105,777 | 103,693 | (2,084 | ) | |||||||||||
Expiring 05/28/13 | Citibank NA | THB | 1,169,780 | 40,200 | 39,789 | (411 | ) | |||||||||||
Expiring 05/28/13 | Citibank NA | THB | 809,480 | 27,600 | 27,534 | (66 | ) | |||||||||||
Expiring 05/28/13 | Credit Suisse International | THB | 1,345,224 | 46,000 | 45,757 | (243 | ) | |||||||||||
Expiring 05/28/13 | JPMorgan Chase Bank | THB | 5,195,750 | 175,000 | 176,729 | 1,729 | ||||||||||||
Expiring 05/28/13 | UBS AG | THB | 912,241 | 31,100 | 31,029 | (71 | ) | |||||||||||
Turkish Lira | ||||||||||||||||||
Expiring 07/30/13 | Citibank NA | TRY | 1,380,723 | 760,799 | 762,991 | 2,192 | ||||||||||||
Expiring 07/30/13 | UBS AG | TRY | 80,521 | 44,500 | 44,496 | (4 | ) | |||||||||||
|
|
|
|
|
| |||||||||||||
$ | 23,798,054 | $ | 23,888,457 | $ | 90,403 | |||||||||||||
|
|
|
|
|
|
Sales Contracts | Counterparty | Notional Amount | Value at Settlement Date Receivable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Chilean Peso | ||||||||||||||||||
Expiring 06/11/13 | Citibank NA | CLP | 54,919,500 | $ | 114,000 | $ | 115,906 | $ | (1,906 | ) | ||||||||
Expiring 06/11/13 | Credit Suisse International | CLP | 33,733,000 | 70,000 | 71,193 | (1,193 | ) | |||||||||||
Expiring 06/11/13 | JPMorgan Chase Bank | CLP | 45,790,000 | 95,000 | 96,638 | (1,638 | ) | |||||||||||
Colombian Peso | ||||||||||||||||||
Expiring 07/18/13 | Citibank NA | COP | 809,242,396 | 440,140 | 440,436 | (296 | ) | |||||||||||
Expiring 07/18/13 | Citibank NA | COP | 264,166,500 | 142,600 | 143,774 | (1,174 | ) |
See Notes to Financial Statements.
18 | Visit our website at www.prudentialfunds.com |
Sales Contracts | Counterparty | Notional Amount | Value at Settlement Date Receivable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Czech Koruna | ||||||||||||||||||
Expiring 07/24/13 | Citibank NA | CZK | 4,620,756 | $ | 233,298 | $ | 236,029 | $ | (2,731 | ) | ||||||||
Euro | ||||||||||||||||||
Expiring 07/22/13 | Citibank NA | EUR | 218,000 | 285,598 | 287,262 | (1,664 | ) | |||||||||||
Expiring 07/25/13 | Barclays Capital, Inc. | EUR | 404,000 | 528,197 | 532,369 | (4,172 | ) | |||||||||||
Expiring 07/25/13 | Barclays Capital, Inc. | EUR | 20,385 | 26,534 | 26,862 | (328 | ) | |||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 45,000 | 58,521 | 59,298 | (777 | ) | |||||||||||
Expiring 07/25/13 | Citibank NA | EUR | 5,000 | 6,536 | 6,589 | (53 | ) | |||||||||||
Expiring 07/25/13 | Credit Suisse International | EUR | 338,935 | 440,979 | 446,629 | (5,650 | ) | |||||||||||
Indonesian Rupiah | ||||||||||||||||||
Expiring 05/06/13 | UBS AG | IDR | 1,343,852,000 | 138,200 | 138,115 | 85 | ||||||||||||
Expiring 05/07/13 | Barclays Capital, Inc. | IDR | 3,152,420,000 | 326,000 | 323,949 | 2,051 | ||||||||||||
Expiring 05/07/13 | Citibank NA | IDR | 2,840,119,580 | 292,193 | 291,856 | 337 | ||||||||||||
Expiring 05/07/13 | Citibank NA | IDR | 2,184,085,200 | 224,400 | 224,441 | (41 | ) | |||||||||||
Expiring 05/07/13 | Citibank NA | IDR | 1,123,871,688 | 115,198 | 115,491 | (293 | ) | |||||||||||
Expiring 05/07/13 | Credit Suisse International | IDR | 2,702,896,215 | 275,230 | 277,755 | (2,525 | ) | |||||||||||
Expiring 05/07/13 | UBS AG | IDR | 2,308,240,000 | 236,500 | 237,199 | (699 | ) | |||||||||||
Expiring 05/07/13 | UBS AG | IDR | 1,128,323,232 | 113,984 | 115,949 | (1,965 | ) | |||||||||||
Israeli New Shekel | ||||||||||||||||||
Expiring 07/24/13 | HSBC | ILS | 801,082 | 220,344 | 222,839 | (2,495 | ) | |||||||||||
Japanese Yen | ||||||||||||||||||
Expiring 07/25/13 | Barclays Capital, Inc. | JPY | 63,663,084 | 640,748 | 653,375 | (12,627 | ) | |||||||||||
Expiring 07/25/13 | Citibank NA | JPY | 49,066,986 | 502,000 | 503,575 | (1,575 | ) | |||||||||||
Malaysian Ringgit | ||||||||||||||||||
Expiring 07/15/13 | Citibank NA | MYR | 251,214 | 81,895 | 82,107 | (212 | ) | |||||||||||
Expiring 07/15/13 | Citibank NA | MYR | 217,814 | 71,000 | 71,190 | (190 | ) | |||||||||||
Expiring 07/15/13 | JPMorgan Chase Bank | MYR | 288,439 | 94,000 | 94,274 | (274 | ) | |||||||||||
Expiring 07/15/13 | JPMorgan Chase Bank | MYR | 283,743 | 93,000 | 92,739 | 261 | ||||||||||||
Mexican Peso | ||||||||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 5,250,999 | 425,000 | 429,402 | (4,402 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 4,954,528 | 405,230 | 405,158 | 72 | ||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 4,787,765 | 387,760 | 391,521 | (3,761 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 3,550,539 | 289,259 | 290,346 | (1,087 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 3,473,217 | 282,000 | 284,023 | (2,023 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 2,641,014 | 213,474 | 215,969 | (2,495 | ) | |||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 1,061,519 | 86,000 | 86,806 | (806 | ) |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 19 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Sales Contracts | Counterparty | Notional Amount | Value at Settlement Date Receivable | Value at April 30, 2013 | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Expiring 07/22/13 | Citibank NA | MXN | 343,902 | $ | 28,000 | $ | 28,123 | $ | (123 | ) | ||||||||
Expiring 07/22/13 | Credit Suisse International | MXN | 4,334,910 | 350,750 | 354,488 | (3,738 | ) | |||||||||||
Peruvian Nuevo Sol | ||||||||||||||||||
Expiring 07/10/13 | Citibank NA | PEN | 2,344,084 | 903,830 | 883,206 | 20,624 | ||||||||||||
Expiring 07/10/13 | Citibank NA | PEN | 1,050,462 | 397,000 | 395,794 | 1,206 | ||||||||||||
Philippine Peso | ||||||||||||||||||
Expiring 06/05/13 | Citibank NA | PHP | 38,555,840 | 954,352 | 935,356 | 18,996 | ||||||||||||
Expiring 06/05/13 | Citibank NA | PHP | 45,964 | 1,124 | 1,115 | 9 | ||||||||||||
Expiring 06/05/13 | HSBC | PHP | 11,507,500 | 283,925 | 279,169 | 4,756 | ||||||||||||
Expiring 06/05/13 | HSBC | PHP | 5,807,875 | 142,981 | 140,898 | 2,083 | ||||||||||||
Romanian Leu | ||||||||||||||||||
Expiring 07/24/13 | Credit Suisse International | RON | 449,341 | 133,000 | 135,647 | (2,647 | ) | |||||||||||
Russian Ruble | ||||||||||||||||||
Expiring 07/15/13 | Citibank NA | RUB | 7,159,081 | 223,000 | 226,924 | (3,924 | ) | |||||||||||
Expiring 07/17/13 | Citibank NA | RUB | 4,169,295 | 130,000 | 132,115 | (2,115 | ) | |||||||||||
Expiring 07/17/13 | JPMorgan Chase Bank | RUB | 3,014,016 | 94,000 | 95,507 | (1,507 | ) | |||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 5,447,468 | 172,914 | 172,591 | 323 | ||||||||||||
Expiring 07/18/13 | Citibank NA | RUB | 5,326,705 | 169,789 | 168,764 | 1,025 | ||||||||||||
South African Rand | ||||||||||||||||||
Expiring 07/30/13 | Credit Suisse International | ZAR | 3,390,797 | 367,450 | 373,112 | (5,662 | ) | |||||||||||
Thai Baht | ||||||||||||||||||
Expiring 05/28/13 | Citibank NA | THB | 2,191,047 | 74,600 | 74,527 | 73 | ||||||||||||
Expiring 05/28/13 | Citibank NA | THB | 1,641,566 | 54,856 | 55,836 | (980 | ) | |||||||||||
|
|
|
|
|
| |||||||||||||
$ | 12,436,389 | $ | 12,464,236 | (27,847 | ) | |||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 62,556 | |||||||||||||||||
|
|
See Notes to Financial Statements.
20 | Visit our website at www.prudentialfunds.com |
Interest rate swap agreements outstanding as of April 30, 2013:
Notional | Termination Date | Fixed Rate | Floating | Fair Value | Upfront Premiums Paid/ (Received) | Unrealized Appreciation | Counterparty | |||||||||||||||||||
| Over-the-counter swap agreements: | |||||||||||||||||||||||||
MXN | 8,000 | 02/21/22 | 6.620% | 28 Day Mexican Interbank Rate(1) | $ | 79,593 | $ | — | $ | 79,593 | Barclays Bank PLC | |||||||||||||||
MXN | 3,000 | 02/28/22 | 6.440 | 28 Day Mexican Interbank Rate(1) | 27,092 | — | 27,092 | Barclays Bank PLC | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||
$ | 106,685 | $ | — | $ | 106,685 | |||||||||||||||||||||
|
|
|
|
|
|
(1) | Fund pays the floating rate and receives the fixed rate. |
Various inputs are used in determining the value of the Series’ 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 Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2013 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Foreign Bonds: | ||||||||||||
Barbados | $ | — | $ | 189,125 | $ | — | ||||||
Brazil | — | 5,994,869 | — | |||||||||
Colombia | — | 1,360,039 | — | |||||||||
Costa Rica | — | 517,500 | — | |||||||||
Czech Republic | — | 230,643 | — | |||||||||
Dominican Republic | — | 171,073 | — | |||||||||
Ghana | — | 127,613 | — | |||||||||
Hungary | — | 1,770,391 | — |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 21 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Level 1 | Level 2 | Level 3 | ||||||||||
Foreign Bonds (continued): | ||||||||||||
Indonesia | $ | — | $ | 4,843,515 | $ | — | ||||||
Malaysia | — | 1,875,813 | — | |||||||||
Mexico | — | 6,119,309 | 493,399 | |||||||||
Netherlands | — | 371,821 | — | |||||||||
Nigeria | — | 1,559,863 | — | |||||||||
Peru | — | 2,346,730 | — | |||||||||
Philippines | — | 1,650,713 | — | |||||||||
Poland | — | 3,644,094 | — | |||||||||
Romania | — | 249,753 | — | |||||||||
Russia | — | 5,660,349 | — | |||||||||
Singapore | — | 154,425 | — | |||||||||
South Africa | — | 6,068,302 | — | |||||||||
Spain | — | 911,922 | — | |||||||||
Thailand | — | 2,156,728 | — | |||||||||
Turkey | — | 5,237,191 | — | |||||||||
Ukraine | — | 238,533 | — | |||||||||
United Arab Emirates | — | 439,925 | — | |||||||||
Uruguay | — | 887,042 | — | |||||||||
Venezuela | — | 1,332,000 | — | |||||||||
Affiliated Money Market Mutual Fund | 1,485,771 | — | — | |||||||||
Options Purchased | — | 28,193 | — | |||||||||
Other Financial Instruments* | ||||||||||||
Forward Foreign Currency Exchange Contracts | — | 62,556 | — | |||||||||
Interest Rate Swap Agreements | — | 106,685 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,485,771 | $ | 56,306,715 | $ | 493,399 | ||||||
|
|
|
|
|
|
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Foreign Bonds | ||||
Balance as of 10/31/12 | $ | 458,225 | ||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation)** | 35,174 | |||
Purchases | — | |||
Sales | — | |||
Accrued discount/premium | — | |||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
|
| |||
Balance as of 04/30/13 | $ | 493,399 | ||
|
|
See Notes to Financial Statements.
22 | Visit our website at www.prudentialfunds.com |
* | 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. |
** | Of which, $35,174 was included in Net Assets relating to securities held at the reporting period end. |
Included in the table above, under Level 3 securities are foreign bonds being fair valued using pricing methodologies approved by the Valuation Committee, 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 using fixed income securities valuation model.
The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2013 was as follows:
Foreign Government Obligations | 76.7 | % | ||
Foreign Agencies | 13.2 | |||
Foreign Corporations | 5.7 | |||
Affiliated Money Market Mutual Fund | 2.5 | |||
|
| |||
98.1 | ||||
Other assets in excess of liabilities | 1.9 | |||
|
| |||
Net Assets | 100.0 | % | ||
|
|
Prudential Emerging Markets Debt Local Currency Fund (the “Series”) invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments is foreign exchange risk and interest rate risk. The effect of such derivative instruments on the Series’ financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 23 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Fair values of derivative instruments as of April 30, 2013 as presented in the Statement of Assets and Liabilities:
Derivatives not designated | Asset Derivatives | Liability Derivatives | ||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||
Foreign exchange contracts | Unrealized appreciation on forward foreign currency contracts | $ | 190,211 | Unrealized depreciation on forward foreign currency contracts | $ | 127,655 | ||||||
Foreign exchange contracts | Unaffiliated investments | 28,193 | — | — | ||||||||
Interest rate contracts | Unrealized appreciation on swap agreements | 106,685 | — | — | ||||||||
|
|
|
| |||||||||
$ | 325,089 | $ | 127,655 | |||||||||
|
|
|
|
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2013 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not designated as hedging | Options Purchased | Forward Currency Contracts | Swaps | Total | ||||||||||||
Foreign exchange contracts | $ | (16,685 | ) | $ | 436,685 | $ | — | $ | 420,000 | |||||||
Interest rate contracts | — | — | 8,833 | 8,833 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | (16,685 | ) | $ | 436,685 | $ | 8,833 | $ | 428,833 | |||||||
|
|
|
|
|
|
|
|
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not designated as hedging | Options Purchased | Forward Currency Contracts | Swaps | Total | ||||||||||||
Foreign exchange contracts | $ | 1,660 | $ | (27,444 | ) | $ | — | $ | (25,784 | ) | ||||||
Interest rate contracts | — | — | 60,602 | 60,602 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,660 | $ | (27,444 | ) | $ | 60,602 | $ | 34,818 | |||||||
|
|
|
|
|
|
|
|
For the six months ended April 30, 2013, the Series' average volume of derivative activities are as follows:
Options Purchased (Cost) | Forward Currency Contracts—Purchased (Value at Settlement Date Payable) | Forward Currency Contracts—Sold (Value at Settlement Date Receivable) | Interest Rate Swaps (Notional amount in USD (000)) | |||||||||||
$ | 8,844 | $ | 30,356,487 | $ | 18,112,020 | $ | 870 |
See Notes to Financial Statements.
24 | Visit our website at www.prudentialfunds.com |
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
FINANCIAL STATEMENTS
(UNAUDITED)
SEMIANNUAL REPORT · APRIL 30, 2013
Prudential Emerging Markets Debt Local Currency Fund
Statement of Assets and Liabilities
as of April 30, 2013 (Unaudited)
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $54,917,292) | $ | 56,630,873 | ||
Affiliated investments (cost $1,485,771) | 1,485,771 | |||
Foreign currency, at value (cost $711,701) | 715,407 | |||
Dividends and interest receivable | 900,310 | |||
Receivable for investments sold | 412,347 | |||
Receivable for Series shares sold | 387,509 | |||
Unrealized appreciation on forward foreign currency contracts | 190,211 | |||
Unrealized appreciation on swap agreements | 106,685 | |||
Foreign tax reclaim receivable | 14,266 | |||
Prepaid expenses | 283 | |||
|
| |||
Total assets | 60,843,662 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 930,921 | |||
Payable to custodian | 317,797 | |||
Accrued expenses | 128,378 | |||
Unrealized depreciation on forward foreign currency contracts | 127,655 | |||
Payable for Series shares reacquired | 76,974 | |||
Management fee payable | 20,038 | |||
Dividends payable | 6,184 | |||
Distribution fee payable | 4,962 | |||
Affiliated transfer agent fee payable | 584 | |||
|
| |||
Total liabilities | 1,613,493 | |||
|
| |||
Net Assets | $ | 59,230,169 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 59,298 | ||
Paid-in capital in excess of par | 57,751,264 | |||
|
| |||
57,810,562 | ||||
Distributions in excess of net investment income | (923,040 | ) | ||
Accumulated net realized gain on investment and foreign currency transactions | 506,764 | |||
Net unrealized appreciation on investments and foreign currencies (net of capital gains tax) | 1,835,883 | |||
|
| |||
Net assets, April 30, 2013 | $ | 59,230,169 | ||
|
|
See Notes to Financial Statements.
26 | Visit our website at www.prudentialfunds.com |
Class A | ||||
Net asset value and redemption price per share | $ | 9.95 | ||
Maximum sales charge (4.50% of offering price) | 0.47 | |||
|
| |||
Maximum offering price to public | $ | 10.42 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 10.01 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share | $ | 10.00 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 10.01 | ||
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 27 |
Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Net Investment Income | ||||
Income | ||||
Interest income (net of foreign withholding taxes of $49,956) | $ | 1,429,724 | ||
Affiliated dividend income | 1,535 | |||
|
| |||
Total income | 1,431,259 | |||
|
| |||
Expenses | ||||
Management fee | 196,336 | |||
Distribution fee—Class A | 14,224 | |||
Distribution fee—Class C | 7,272 | |||
Custodian’s fees and expenses | 77,000 | |||
Audit fee | 30,000 | |||
Registration fees | 26,000 | |||
Reports to shareholders | 10,000 | |||
Legal fees and expenses | 9,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $1,454) (Note 3) | 7,000 | |||
Directors’ fees | 6,000 | |||
Insurance | 1,000 | |||
Miscellaneous | 10,244 | |||
|
| |||
Total expenses | 394,076 | |||
|
| |||
Expense reimbursement (Note 2) | (114,827 | ) | ||
|
| |||
Net expenses | 279,249 | |||
|
| |||
Net investment income | 1,152,010 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currencies | ||||
Net realized gain on: | ||||
Investment transactions | 304,288 | |||
Foreign currency transactions | 476,642 | |||
Swap agreement transactions | 8,833 | |||
|
| |||
789,763 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (net of capital gains tax) | 1,488,528 | |||
Foreign currencies | (20,057 | ) | ||
Swap agreements | 60,602 | |||
|
| |||
1,529,073 | ||||
|
| |||
Net gain on investments and foreign currencies | 2,318,836 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 3,470,846 | ||
|
|
See Notes to Financial Statements.
28 | Visit our website at www.prudentialfunds.com |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2013 | Year Ended October 31, 2012 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 1,152,010 | $ | 1,670,398 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 789,763 | (229,215 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 1,529,073 | 1,619,136 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 3,470,846 | 3,060,319 | ||||||
|
|
|
| |||||
Dividends and Distributions (Note 1) | ||||||||
Dividends from net investment income | ||||||||
Class A | (345,338 | ) | (150,328 | ) | ||||
Class C | (38,926 | ) | (36,880 | ) | ||||
Class Q | (36 | ) | (58 | ) | ||||
Class Z | (1,198,594 | ) | (1,755,165 | ) | ||||
|
|
|
| |||||
(1,582,894 | ) | (1,942,431 | ) | |||||
|
|
|
| |||||
Distributions from net realized gains | ||||||||
Class A | (38,994 | ) | — | |||||
Class C | (5,218 | ) | — | |||||
Class Q | (5 | ) | — | |||||
Class Z | (175,654 | ) | — | |||||
|
|
|
| |||||
(219,871 | ) | — | ||||||
|
|
|
| |||||
Series share transactions (Note 6) | ||||||||
Net proceeds from shares sold | 21,474,365 | 12,318,655 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 1,773,102 | 1,894,634 | ||||||
Cost of shares reacquired | (6,256,232 | ) | (4,310,811 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 16,991,235 | 9,902,478 | ||||||
|
|
|
| |||||
Total increase | 18,659,316 | 11,020,366 | ||||||
Net Assets: | ||||||||
Beginning of period | 40,570,853 | 29,550,487 | ||||||
|
|
|
| |||||
End of period | $ | 59,230,169 | $ | 40,570,853 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 29 |
Notes to Financial Statements
(Unaudited)
Prudential World Fund, Inc. (the “Fund”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”) and currently consists of five series: Prudential International Equity Fund, Prudential International Value Fund, Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, and Prudential Emerging Markets Debt Local Currency Fund (the “Series”). These financial statements relate to the Prudential Emerging Markets Debt Local Currency Fund. The financial statements of the other series are not presented herein. The Series commenced investment operations on March 30, 2011. The Series is non-diversified.
The investment objective of the Series is to seek total return, through a combination of current income and capital appreciation.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of the financial statements.
Securities Valuation: The Series holds portfolio 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 Directors (the “Board”) has delegated fair valuation responsibilities to Prudential Investments LLC (“PI” or “Manager”) through the adoption of Valuation Procedures for valuation of the Series’ securities. Under the current Valuation Procedures, a Valuation Committee is established and responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures allow the Series to utilize independent pricing vendor services, quotations from market makers and other valuation methods in events when market quotations are not readily available or not representative of the fair value of the securities. A record of the Valuation Committee’s actions is subject to review, approval and ratification by the Board at its next regularly scheduled quarterly meeting.
Various inputs are used in determining the value of the Series’ investments, which are summarized in the three broad level hierarchies based on any observable inputs used as described in the table following the Portfolio of Investments. The valuation
30 | Visit our website at www.prudentialfunds.com |
methodologies and significant inputs used in determining the fair value of securities and other assets classified as Level 1, Level 2 and Level 3 of the hierarchy are as follows:
Common stocks, exchange-traded funds and financial derivative instruments (including futures contracts and certain options and swap contracts on securities), 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 of the fair value hierarchy.
In the event there is no sale or official closing price on such day, these securities are valued at the mean between the last reported bid and asked prices, or at the last bid price in absence of an asked price. These securities are classified as Level 2 of the fair value hierarchy as these inputs are considered as significant other observable inputs to the valuation.
For common stocks traded on foreign securities exchanges, certain valuation adjustments will be applied when events occur after the close of the security’s foreign market and before the Series’ normal pricing time. These securities 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 of the fair value hierarchy as the adjustment factors are considered as significant other observable inputs 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 as they have the ability to be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market, such as corporate bonds, municipal bonds, U.S. Government agencies issues and guaranteed obligations, U.S. Treasury obligations and sovereign issues are usually valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices usually after evaluating observable inputs including yield curves, credit rating, yield spreads, default rates, cash flows as well as broker/dealer quotations and reported trades. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Prudential Emerging Markets Debt Local Currency Fund | 31 |
Notes to Financial Statements
(Unaudited) continued
Asset-backed and mortgage-related securities are usually valued by approved independent pricing vendors. The pricing vendors provide the prices using their internal pricing models with inputs from deal terms, tranche level attributes, yield curves, prepayment speeds, default rates and broker/dealer quotes. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Short-term debt securities of sufficient credit quality, which mature in sixty days or less, are valued using amortized cost method, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy.
Over-the-counter financial derivative instruments, such as option contracts, foreign currency contracts and swaps agreements, are usually valued using pricing vendor services, which derive the valuation based on underlying asset prices, indices, spreads, interest rates, exchange rates and other inputs. These instruments are categorized as Level 2 of the fair value hierarchy.
Securities and other assets that cannot be priced using the methods described above are valued with pricing methodologies approved by the Valuation Committee. In the event there are unobservable inputs used when determining such valuations, the securities will be classified as Level 3 of 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.
Restricted and Illiquid Securities: The Series may invest up to 15% of its net assets in illiquid securities. Illiquid securities are those that, because of the absence of a readily
32 | Visit our website at www.prudentialfunds.com |
available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Series has valued the investment. Therefore, the Series may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur expenses that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Series’ Subadviser under the guidelines adopted by the Series. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series 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 are presented at the foreign exchange rates and market values at the close of the period, the Series 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 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 holdings of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ 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
Prudential Emerging Markets Debt Local Currency Fund | 33 |
Notes to Financial Statements
(Unaudited) continued
(depreciation) on foreign currencies. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability, or the level of governmental supervision and regulation of foreign securities markets.
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. The Series entered into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or specific receivables and payables denominated in a foreign currency. 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. The Series’ 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. Such credit risk may be mitigated by entering into a master netting arrangement between the Series and the counterparty which may permit the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ exposure to the counterparty. However, there are no assurances that such mitigating factors are easily enforceable.
Options: The Series purchased options and may write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates, with respect to securities which the Series currently owns or intends to purchase. The Series’ principal reason for writing options would be to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Series purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Series writes an option, it receives a premium and an
34 | Visit our website at www.prudentialfunds.com |
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 Series 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 Series has realized a gain or loss. The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain or loss. Gain or loss on purchased options is included in net realized gain or loss on investment transactions. Gain or loss on written options is presented separately as net realized gain or loss on options written. The Series, 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 Series 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 Series 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: The Series entered into interest rate 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 counterparty (“OTC Traded”) or through a central clearing facility, such as a registered commodities exchange (“Exchange Traded”). The swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments. Payments received or paid by the Series 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 Portfolio of Investments.
Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Series is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. The Series used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed rate payments and to increase exposure to prevailing market rates by receiving floating rate payments using interest
Prudential Emerging Markets Debt Local Currency Fund | 35 |
Notes to Financial Statements
(Unaudited) continued
rate swap contracts. The Series’ 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. Such credit risk may be mitigated by entering into a master netting arrangement between the Series and the counterparty which may permit the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ exposure to the counterparty. However, there are no assurances that such mitigating factors are easily enforceable.
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate), swap agreements involve, to varying degrees, elements of credit, market risk and documentation risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, that there will be unfavorable changes in net interest rates. In connection with these agreements, securities in the portfolio may be identified as collateral or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and serve as recourse in the event of default or bankruptcy/insolvency of either party.
Such over-the-counter derivative agreements include conditions which when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
As of April 30, 2013, the Series has not met conditions under such agreements that give the counterparty the right to call for an early termination.
Concentration of Risk: The ability of issuers of debt securities (other than those issued or guaranteed by the U.S. Government), held by the Series, 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 or economic instability, or the level of governmental supervision and regulation of foreign securities markets.
36 | Visit our website at www.prudentialfunds.com |
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 an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management, which may differ from actual.
Net investment income or loss (other than distribution fees which are charged directly to the respective class) and unrealized and realized gains 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.
Dividends and Distributions: The Series declares dividends of net investment income daily and payment is made monthly. Distributions from net realized capital and currency gains, if any, are made annually. Dividends and distributions are recorded on the ex-dividend date. Dividends and distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. Permanent book/tax differences relating to income and gains are reclassified amongst distribution in excess of net investment income, accumulated net realized gain or loss and paid-in-capital in excess of par, as appropriate.
Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is each series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign interest are recorded, net of reclaimable amounts, at the time the related income is earned.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those amounts.
Note 2. Agreements
The Series has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement
Prudential Emerging Markets Debt Local Currency Fund | 37 |
Notes to Financial Statements
(Unaudited) continued
provides that PIM will furnish investment advisory services in connection with the management of the Series. In connection therewith, PIM is obligated to keep certain books and records of the Series. PI pays for the services of PIM, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an annual rate of .80% of the average daily net assets of the Series.
PI has contractually agreed through February 28, 2014 to limit net annual Series operating expenses (excluding distribution and service (12b-1) fees, extraordinary and certain other expenses such as taxes, interest and brokerage commissions) to each class of shares to 1.05% of the Series’ average daily net assets.
The Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) who acts as the distributor of the Class A, Class C, Class Q and Class Z shares. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C, pursuant to plans of distribution (the “Class A and C Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Q and Z shares of the Series.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively. For the six-months ended April 30, 2013, PIMS contractually agreed to limit such expenses to .25% of the average daily net assets of the Class A shares.
PIMS has advised the Series that it received $36,255 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2013. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that it has received $558 in contingent deferred sales charges imposed upon certain redemptions by Class C Shareholders for the six months ended April 30, 2013.
38 | Visit our website at www.prudentialfunds.com |
PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ transfer agent. Transfer agent fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a Series of the Prudential Investment Portfolios 2 registered under the 1940 Act, and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments and U.S. Government securities, for the six months ended April 30, 2013, were $34,433,610 and $16,764,112, respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2013 were as follows:
Tax Basis | Appreciation | Depreciation | Net | |||
$57,303,648 | $1,539,685 | $(726,689) | $812,996 |
The difference between book basis and tax basis is primarily attributable to the difference in the treatment of amortization of premiums, wash sales and straddle loss deferrals as of the most recent fiscal year end.
Management has analyzed the Series’ 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 Series’ financial statements for the current reporting period. The Series’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Prudential Emerging Markets Debt Local Currency Fund | 39 |
Notes to Financial Statements
(Unaudited) continued
Note 6. Capital
The Series offers Class A, Class C, Class Q and Class Z shares. Class A shares are sold with a front-end sales charge of up to 4.50%. All Investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%. The Class A CDSC is waived for purchases by certain retirement and/or benefit plans. Class C shares are sold with a contingent deferred sales charge of 1% on shares redeemed within the first 12 months after purchase. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class Q and Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share classes of the Series to one or more other share classes of the Series as presented in the table of transactions in shares of common stock. For the six months ended April 30, 2013, no such exchanges were made.
As of April 30, 2013, Prudential Financial, Inc. through its affiliates owned 113 Class A shares, 112 Class C shares, 114 Class Q shares and 114 Class Z shares of the Series.
There are 250 million shares of common stock at $0.01 par value per share, designated Class A, Class C, Class Q and Class Z common stock, each of which consists of 75 million, 50 million, 50 million and 75 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 1,373,014 | $ | 13,451,023 | |||||
Shares issued in reinvestment of dividends and distributions | 36,612 | 358,147 | ||||||
Shares reacquired | (350,112 | ) | (3,431,462 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,059,514 | $ | 10,377,708 | |||||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 507,223 | $ | 4,807,892 | |||||
Shares issued in reinvestment of dividends | 13,747 | 128,087 | ||||||
Shares reacquired | (178,210 | ) | (1,655,069 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 342,760 | $ | 3,280,910 | |||||
|
|
|
|
40 | Visit our website at www.prudentialfunds.com |
Class C | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 131,990 | $ | 1,301,395 | |||||
Shares issued in reinvestment of dividends and distributions | 4,189 | 41,180 | ||||||
Shares reacquired | (26,178 | ) | (255,350 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 110,001 | $ | 1,087,225 | |||||
|
|
|
| |||||
Year ended October 31, 2012: | ||||||||
Shares sold | 76,112 | $ | 714,307 | |||||
Shares issued in reinvestment of dividends | 3,789 | 35,467 | ||||||
Shares reacquired | (15,867 | ) | (147,837 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 64,034 | $ | 601,937 | |||||
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Class Q | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares issued in reinvestment of dividends and distributions | 4.4 | $ | 42 | |||||
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Net increase (decrease) in shares outstanding | 4.4 | $ | 42 | |||||
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Year ended October 31, 2012: | ||||||||
Shares issued in reinvestment of dividends | 6.1 | $ | 58 | |||||
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Net increase (decrease) in shares outstanding | 6.1 | $ | 58 | |||||
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Class Z | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 680,589 | $ | 6,721,947 | |||||
Shares issued in reinvestment of dividends and distributions | 139,703 | 1,373,733 | ||||||
Shares reacquired | (261,956 | ) | (2,569,420 | ) | ||||
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Net increase (decrease) in shares outstanding | 558,336 | $ | 5,526,260 | |||||
|
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Year ended October 31, 2012: | ||||||||
Shares sold | 721,461 | $ | 6,796,456 | |||||
Shares issued in reinvestment of dividends | 185,266 | 1,731,022 | ||||||
Shares reacquired | (264,332 | ) | (2,507,905 | ) | ||||
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|
|
| |||||
Net increase (decrease) in shares outstanding | 642,395 | $ | 6,019,573 | |||||
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Note 7. Borrowings
The Series, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 15, 2012 through November 14, 2013. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 15, 2012, 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.
Prudential Emerging Markets Debt Local Currency Fund | 41 |
Notes to Financial Statements
(Unaudited) continued
The Series did not utilize the SCA during the period ended April 30, 2013.
Note 8. New Accounting Pronouncement
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities.” The amendments, which will be effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial statements has not yet been determined.
In June 2013, the FASB issued guidance that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure non-controlling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statement disclosures.
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Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||
Six Months Ended April 30, 2013(b) | Year Ended October 31, 2012(b) | March 30, 2011(a) through October 31, 2011 | ||||||||||||||
Per Share Operating Performance: | ||||||||||||||||
Net Asset Value, Beginning Of Period | $9.61 | $9.36 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income | .22 | .42 | .32 | |||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | .48 | .35 | (.62 | ) | ||||||||||||
Total from investment operations | .70 | .77 | (.30 | ) | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.31 | ) | (.52 | ) | (.13 | ) | ||||||||||
Distributions from net realized gains | (.05 | ) | - | - | ||||||||||||
Tax return of capital | - | - | (.21 | ) | ||||||||||||
Total dividends and distributions | (.36 | ) | (.52 | ) | (.34 | ) | ||||||||||
Net asset value, end of period | $9.95 | $9.61 | $9.36 | |||||||||||||
Total Return(c): | 7.42% | 8.53% | (3.14)% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $16,728 | $5,985 | $2,620 | |||||||||||||
Average net assets (000) | $11,473 | $2,721 | $1,634 | |||||||||||||
Ratios to average net assets(d)(e): | ||||||||||||||||
Expenses, including distribution and service (12b-1) fees(f) | 1.30% | (g) | 1.30% | 1.30% | (g) | |||||||||||
Net investment income | 4.51% | (g) | 4.73% | 4.85% | (g) | |||||||||||
Portfolio turnover rate | 37% | (h) | 70% | 60% | (h) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the reporting period, and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform to generally accepted accounting principles. Total return for a period less than a full year is not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratio including distribution and service (12b-1) fees and net investment income ratio would be 1.75% and 4.06%, respectively, for the six months ended April 30, 2013, 2.04% and 3.99%, respectively, for the year ended October 31, 2012, and 2.76% and 3.39%, respectively, for the period ended October 31, 2011.
(f) The distributor of the Series has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares.
(g) Annualized.
(h) Not annualized.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 43 |
Financial Highlights
(Unaudited) continued
Class C Shares | ||||||||||||||||
Six Months Ended April 30, 2013(b) | Year Ended October 31, 2012(b) | March 30, 2011(a) through October 31, 2011 | ||||||||||||||
Per Share Operating Performance: | ||||||||||||||||
Net Asset Value, Beginning Of Period | $9.65 | $9.41 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income | .18 | .37 | .31 | |||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | .50 | .32 | (.57 | ) | ||||||||||||
Total from investment operations | .68 | .69 | (.26 | ) | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.27 | ) | (.45 | ) | (.12 | ) | ||||||||||
Distributions from net realized gains | (.05 | ) | - | - | ||||||||||||
Tax return of capital | - | - | (.21 | ) | ||||||||||||
Total dividends and distributions | (.32 | ) | (.45 | ) | (.33 | ) | ||||||||||
Net asset value, end of period | $10.01 | $9.65 | $9.41 | |||||||||||||
Total Return(c): | 7.20% | 7.55% | (2.72)% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $2,164 | $1,025 | $398 | |||||||||||||
Average net assets (000) | $1,467 | $786 | $211 | |||||||||||||
Ratios to average net assets(d)(e): | ||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 2.05% | (f) | 2.05% | 2.05% | (f) | |||||||||||
Net investment income | 3.75% | (f) | 3.89% | 4.09% | (f) | |||||||||||
Portfolio turnover rate | 37% | (g) | 70% | 60% | (g) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the reporting period, and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform to generally accepted accounting principles. Total return for a period less than a full year is not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratio including distribution and service (12b-1) fees and net investment income ratio would be 2.50% and 3.30%, respectively, for the six months ended April 30, 2013, 2.78% and 3.16%, respectively, for the year ended October 31, 2012, and 3.52% and 2.62%, respectively, for the period ended October 31, 2011.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
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Class Q Shares | ||||||||||||||||
Six Months Ended April 30, 2013(b) | Year Ended October 31, 2012(b) | March 30, 2011(a) through October 31, 2011 | ||||||||||||||
Per Share Operating Performance: | ||||||||||||||||
Net Asset Value, Beginning Of Period | $9.66 | $9.37 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income | .24 | .47 | .29 | |||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | .48 | .37 | (.59 | ) | ||||||||||||
Total from investment operations | .72 | .84 | (.30 | ) | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.33 | ) | (.55 | ) | (.12 | ) | ||||||||||
Distributions from net realized gains | (.05 | ) | - | - | ||||||||||||
Tax return of capital | - | - | (.21 | ) | ||||||||||||
Total dividends and distributions | (.38 | ) | (.55 | ) | (.33 | ) | ||||||||||
Net asset value, end of period | $10.00 | $9.66 | $9.37 | |||||||||||||
Total Return(c): | 7.55% | 9.31% | (3.14)% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $1 | $1 | $1 | |||||||||||||
Average net assets (000) | $1 | $1 | $1 | |||||||||||||
Ratios to average net assets(d)(e): | ||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 1.05% | (f) | 1.05% | 1.05% | (f) | |||||||||||
Net investment income | 4.85% | (f) | 5.06% | 4.98% | (f) | |||||||||||
Portfolio turnover rate | 37% | (g) | 70% | 60% | (g) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the reporting period, and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform to generally accepted accounting principles. Total return for a period less than a full year is not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratio and net investment income ratio would be 1.36% and 4.54%, respectively, for the six months ended April 30, 2013, 1.71% and 4.40%, respectively, for the year ended October 31, 2012, and 2.67% and 3.36%, respectively, for the period ended October 31, 2011.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 45 |
Financial Highlights
(Unaudited) continued
Class Z Shares | ||||||||||||||||
Six Months Ended April 30, 2013(b) | Year Ended October 31, 2012(b) | March 30, 2011(a) through October 31, 2011 | ||||||||||||||
Per Share Operating Performance: | ||||||||||||||||
Net Asset Value, Beginning Of Period | $9.66 | $9.37 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income | .23 | .47 | .29 | |||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | .49 | .36 | (.59 | ) | ||||||||||||
Total from investment operations | .72 | .83 | (.30 | ) | ||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.32 | ) | (.54 | ) | (.12 | ) | ||||||||||
Distributions from net realized gains | (.05 | ) | - | - | ||||||||||||
Tax return of capital | - | - | (.21 | ) | ||||||||||||
Total dividends and distributions | (.37 | ) | (.54 | ) | (.33 | ) | ||||||||||
Net asset value, end of period | $10.01 | $9.66 | $9.37 | |||||||||||||
Total Return(c): | 7.62% | 9.21% | (3.14)% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $40,337 | $33,559 | $26,532 | |||||||||||||
Average net assets (000) | $36,552 | $30,441 | $25,697 | |||||||||||||
Ratios to average net assets(d)(e): | ||||||||||||||||
Expenses, including distribution and service (12b-1) fees | 1.05% | (f) | 1.05% | 1.05% | (f) | |||||||||||
Net investment income | 4.79% | (f) | 4.96% | 4.99% | (f) | |||||||||||
Portfolio turnover rate | 37% | (g) | 70% | 60% | (g) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of the reporting period, and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform to generally accepted accounting principles. Total return for a period less than a full year is not annualized.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratio and net investment income ratio would be 1.52% and 4.32%, respectively, for the six months ended April 30, 2013, 1.81% and 4.20%, respectively, for the year ended October 31, 2012, and 2.72% and 3.32%, respectively, for the period ended October 31, 2011.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
46 | Visit our website at www.prudentialfunds.com |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.prudentialfunds.com |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Stuart S. Parker • Richard A. Redeker • Robin B. Smith • Stephen G. Stoneburn |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Bruce Karpati, Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Amanda S. Ryan, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Prudential Investment Management, Inc. | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street | ||
| ||||
CUSTODIAN | The Bank of New York Mellon | One Wall Street New York, NY 10286 | ||
| ||||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
| ||||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential Emerging Markets Debt Local Currency Fund, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PRUDENTIAL EMERGING MARKETS DEBT LOCAL CURRENCY FUND
SHARE CLASS | A | C | Q | Z | ||||
NASDAQ | EMDAX | EMDCX | EMDQX | EMDZX | ||||
CUSIP | 743969750 | 743969743 | 743969735 | 743969727 |
MF212E2 0246114-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON GLOBAL OPPORTUNITIES FUND
SEMIANNUAL REPORT · APRIL 30, 2013
Fund Type
Global Stock
Objective
To seek long-term growth of capital
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
The accompanying financial statements as of April 30, 2013, were not audited, and accordingly, no auditor’s opinion is expressed on them.
Prudential Investments, Prudential, Jennison, 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.
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June 14, 2013
Dear Shareholder:
We hope you find the semiannual report for the Prudential Jennison Global Opportunities Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2013.
We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.
Thank you for choosing the Prudential Investments family of funds.
Sincerely,
Stuart S. Parker, President
Prudential Jennison Global Opportunities Fund
*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates LLC, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.
Prudential Jennison Global Opportunities Fund | 1 |
Your Fund’s Performance (Unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. Class A shares have a maximum initial sales charge of 5.50%. Gross operating expenses: Class A, 2.31%; Class C, 3.01%; Class Z, 2.01%. Net operating expenses: Class A, 1.60%; Class C, 2.35%; Class Z, 1.35%, after contractual reduction through 2/28/2014.
Cumulative Total Returns (Without Sales Charges) as of 4/30/13 | ||||||||||||
Six Months | One Year | Since Inception | ||||||||||
Class A | 12.37 | % | 9.49 | % | 10.80% (3/14/12) | |||||||
Class C | 11.93 | 8.71 | 9.80 (3/14/12) | |||||||||
Class Z | 12.56 | 9.78 | 11.10 (3/14/12) | |||||||||
MSCI AC World ND Index | 13.46 | 15.02 | 14.46 | |||||||||
Lipper Global Multi-Cap Core Funds Average | �� | 13.42 | 14.20 | 14.16 | ||||||||
Lipper Global Multi-Cap Growth Funds Average | 12.53 | 11.15 | N/A | |||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/13 | ||||||||||||
One Year | Since Inception | |||||||||||
Class A | 2.45 | % | 3.31% (3/14/12) | |||||||||
Class C | 6.53 | 8.09 (3/14/12) | ||||||||||
Class Z | 8.71 | 9.33 (3/14/12) | ||||||||||
MSCI AC World ND Index | 10.53 | 10.35 | ||||||||||
Lipper Global Multi-Cap Core Funds Average | 10.16 | 10.63 | ||||||||||
Lipper Global Multi-Cap Growth Funds Average | 8.00 | N/A |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 5.50% and a 12b-1 fee of 0.30% annually. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund. Class C shares are not subject to a front-end sales charge, but charge a CDSC of 1% for shares sold within 12 months from the date of purchase and an annual 12b-1 fee of 1%. Class Z shares are not subject to a front-end sales charge, CDSC or 12b-1 fee. The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
2 | Visit our website at www.prudentialfunds.com |
Benchmark Definitions
Morgan Stanley Capital International (MSCI) All Country (AC) World Net Dividend (ND) Index
The MSCI AC World ND Index (MSCI AC World ND) is an unmanaged free-float-adjusted, market-capitalization-weighted index designed to measure the equity market performance of developed and emerging markets. The MSCI AC World ND Index comprises 24 developed market country indexes and 21 emerging market country indexes. The developed market country indexes include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. The emerging market country indexes include Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
Lipper Global Multi-Cap Core Funds Average
Funds in the Lipper Global Multi-Cap Core Funds Average are funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Global multi-cap core funds typically have average characteristics compared to the MSCI World Index.
Lipper Global Multi-Cap Growth Funds Average
Funds in the Lipper Global Multi-Cap Growth Funds Average are funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Global multi-cap growth funds typically have above-average characteristics compared to the MSCI World Index.
Note: Although the Fund is classified by Lipper in its Global Multi-Cap Core Funds Performance Universe, the Global Multi-Cap Growth Funds Performance Universe was utilized for performance comparisons, because the Fund’s investment manager believes that the Global Multi-Cap Growth Funds Performance Universe provides a more appropriate basis for Fund performance comparisons.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Averages reflect the deduction of operating expenses, but not sales charges or taxes.
Five Largest Holdings expressed as a percentage of net assets as of 4/30/13 | ||||
MasterCard, Inc. (Class A Stock), United States | 4.1 | % | ||
LinkedIn Corp. (Class A Stock), United States | 3.8 | |||
Home Depot, Inc. (The), United States | 3.7 | |||
Gilead Sciences, Inc., United States | 3.3 | |||
Biogen Idec, Inc., United States | 3.0 |
Prudential Jennison Global Opportunities Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Industries expressed as a percentage of net assets as of 4/30/13 | ||||
Biotechnology | 10.0 | % | ||
Specialty Retail | 8.7 | |||
Internet Software & Services | 8.3 | |||
Textiles, Apparel & Luxury Goods | 7.9 | |||
Internet & Catalog Retail | 7.3 |
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Fees and Expenses (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2012, at the beginning of the period, and held through the six-month period ended April 30, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Prudential Jennison Global Opportunities Fund | 5 |
Fees and Expenses (continued)
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Prudential Jennison Global Opportunities Fund | Beginning Account Value November 1, 2012 | Ending Account April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,123.70 | 1.60 | % | $ | 8.42 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.86 | 1.60 | % | $ | 8.00 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,119.30 | 2.35 | % | $ | 12.35 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.14 | 2.35 | % | $ | 11.73 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,125.60 | 1.35 | % | $ | 7.11 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.10 | 1.35 | % | $ | 6.76 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2013, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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Portfolio of Investments
as of April 30, 2013 (Unaudited)
Shares | Description | Value (Note 1) | ||||
LONG-TERM INVESTMENTS 97.8% | ||||||
COMMON STOCKS | ||||||
Brazil 3.7% | ||||||
18,329 | Arezzo Industria e Comercio SA | $ | 386,231 | |||
3,257 | Grupo BTG Pactual, 144A | 53,671 | ||||
23,904 | Grupo BTG Pactual | 393,910 | ||||
|
| |||||
833,812 | ||||||
China 1.1% | ||||||
6,902 | Tencent Holdings Ltd. | 236,763 | ||||
Denmark 2.7% | ||||||
3,416 | Novo Nordisk A/S (Class B Stock) | 599,192 | ||||
France 3.0% | ||||||
2,055 | Essilor International SA | 231,229 | ||||
2,024 | PPR | 445,273 | ||||
|
| |||||
676,502 | ||||||
Hong Kong 1.0% | ||||||
309,728 | Sino Biopharmaceutical | 213,533 | ||||
Italy 4.7% | ||||||
9,791 | Luxottica Group SpA | 509,710 | ||||
60,247 | Prada SpA | 543,067 | ||||
|
| |||||
1,052,777 | ||||||
Japan 1.4% | ||||||
2,015 | FANUC Corp. | 303,847 | ||||
Macau 1.4% | ||||||
59,540 | Sands China Ltd. | 312,272 | ||||
South Korea 1.7% | ||||||
268 | Samsung Electronics Co. Ltd. | 369,890 | ||||
Spain 2.7% | ||||||
4,411 | Inditex SA | 592,815 | ||||
Thailand 1.8% | ||||||
278,866 | CP ALL PCL | 403,809 |
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 7 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) | ||||||
United Kingdom 16.7% | ||||||
37,382 | ARM Holdings PLC | $ | 578,351 | |||
36,531 | Ashtead Group PLC | 333,379 | ||||
9,574 | ASOS PLC* | 475,896 | ||||
83,124 | Barclays PLC | 369,350 | ||||
14,238 | Diageo PLC | 434,370 | ||||
8,425 | Intertek Group PLC | 432,917 | ||||
31,323 | Rolls-Royce Holdings PLC | 549,808 | ||||
10,311 | SABMiller PLC | 555,535 | ||||
|
| |||||
3,729,606 | ||||||
United States 55.9% | ||||||
3,994 | Allergan, Inc. | 453,519 | ||||
2,012 | Amazon.com, Inc.* | 510,666 | ||||
1,159 | Apple, Inc. | 513,147 | ||||
3,023 | Biogen Idec, Inc.* | 661,825 | ||||
7,216 | BioMarin Pharmaceutical, Inc.* | 473,370 | ||||
3,184 | Canadian Pacific Railway Ltd. | 396,790 | ||||
2,991 | Celgene Corp.* | 353,147 | ||||
2,399 | Core Laboratories NV | 347,327 | ||||
6,212 | Cree, Inc.* | 351,413 | ||||
4,176 | Discovery Communications, Inc. (Class A Stock)* | 329,152 | ||||
9,165 | eBay, Inc.* | 480,154 | ||||
10,606 | Facebook, Inc. (Class A Stock)* | 294,423 | ||||
14,554 | Gilead Sciences, Inc.* | 737,015 | ||||
3,925 | Goldman Sachs Group, Inc. (The) | 573,325 | ||||
11,333 | Home Depot, Inc. (The) | 831,276 | ||||
835 | Intuitive Surgical, Inc.* | 411,062 | ||||
4,390 | LinkedIn Corp. (Class A Stock)* | 843,275 | ||||
1,659 | MasterCard, Inc. (Class A Stock) | 917,311 | ||||
5,479 | Michael Kors Holdings Ltd.* | 311,974 | ||||
3,711 | Monsanto Co. | 396,409 | ||||
930 | priceline.com, Inc.* | 647,271 | ||||
5,423 | Salesforce.com, Inc.* | 222,939 | ||||
8,741 | Splunk, Inc.* | 356,633 | ||||
10,523 | TJX Cos., Inc. | 513,207 | ||||
2,404 | TransDigm Group, Inc. | 352,907 | ||||
2,603 | Workday, Inc. (Class A Stock)* | 163,078 | ||||
|
| |||||
12,442,615 | ||||||
|
| |||||
Total common stocks | 21,767,433 | |||||
|
|
See Notes to Financial Statements.
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Shares | Description | Value (Note 1) | ||||
PREFERRED STOCK | ||||||
United Kingdom | ||||||
3,727,437 | Rolls-Royce Holdings PLC (Class C Stock)* | $ | 5,790 | |||
|
| |||||
Total long-term investments | 21,773,223 | |||||
|
| |||||
SHORT-TERM INVESTMENT 0.7% | ||||||
Affiliated Money Market Mutual Fund | ||||||
163,236 | Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | 163,236 | ||||
|
| |||||
Total Investments 98.5% | 21,936,459 | |||||
Other assets in excess of liabilities 1.5% | 329,011 | |||||
|
| |||||
Net Assets 100.0% | $ | 22,265,470 | ||||
|
|
The following abbreviation is 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 liquid.
* | Non-income producing security. |
(a) | Prudential Investments LLC, the manager of the Series, 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 Series’ 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 Board approved fair valuation procedures.
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 9 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
The following is a summary of the inputs used as of April 30, 2013 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks: | ||||||||||||
Brazil | $ | 833,812 | $ | — | $ | — | ||||||
China | 236,763 | — | — | |||||||||
Denmark | 599,192 | — | — | |||||||||
France | 676,502 | — | — | |||||||||
Hong Kong | 213,533 | — | — | |||||||||
Italy | 1,052,777 | — | — | |||||||||
Japan | 303,847 | — | — | |||||||||
Macau | 312,272 | — | — | |||||||||
South Korea | 369,890 | — | — | |||||||||
Spain | 592,815 | — | — | |||||||||
Thailand | 403,809 | — | — | |||||||||
United Kingdom | 3,729,606 | — | — | |||||||||
United States | 12,442,615 | — | — | |||||||||
Preferred Stock: | ||||||||||||
United Kingdom | — | 5,790 | — | |||||||||
Affiliated Money Market Mutual Fund | 163,236 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 21,930,669 | $ | 5,790 | $ | — | ||||||
|
|
|
|
|
|
Fair value of Level 2 investments at 10/31/12 was $369,831, which was a result of valuing investments using third party vendor modeling tools. An amount of $367,417 was transferred from Level 2 into Level 1 at 04/30/13 as a result of using quoted prices in active markets for such foreign securities.
It is the Portfolio’s policy to recognize transfers in and transfers out at the fair value as of the beginning of period.
See Notes to Financial Statements.
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The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2013 were as follows:
Biotechnology | 10.0 | % | ||
Specialty Retail | 8.7 | |||
Internet Software & Services | 8.3 | |||
Textiles, Apparel & Luxury Goods | 7.9 | |||
Internet & Catalog Retail | 7.3 | |||
Semiconductors & Semiconductor Equipment | 5.8 | |||
Pharmaceuticals | 5.7 | |||
Beverages | 4.4 | |||
Aerospace & Defense | 4.1 | |||
IT Services | 4.1 | |||
Software | 3.3 | |||
Healthcare Equipment & Supplies | 2.9 | |||
Capital Markets | 2.6 | |||
Computers & Peripherals | 2.3 | |||
Diversified Financial Services | 2.0 | |||
Multiline Retail | 2.0 | % | ||
Professional Services | 1.9 | |||
Chemicals | 1.8 | |||
Food & Staples Retailing | 1.8 | |||
Road & Rail | 1.8 | |||
Commercial Banks | 1.7 | |||
Energy Equipment & Services | 1.6 | |||
Media | 1.5 | |||
Trading Companies & Distributors | 1.5 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Machinery | 1.4 | |||
Affiliated Money Market Mutual Fund | 0.7 | |||
|
| |||
98.5 | ||||
Other assets in excess of liabilities | 1.5 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 11 |
Statement of Assets and Liabilities
as of April 30, 2013 (Unaudited)
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $18,229,385) | $ | 21,773,223 | ||
Affiliated investments (cost $163,236) | 163,236 | |||
Cash | 43 | |||
Receivable for investments sold | 390,885 | |||
Foreign tax reclaim receivable | 6,263 | |||
Dividends receivable | 5,563 | |||
Prepaid expenses | 205 | |||
Receivable for Series shares sold | 198 | |||
|
| |||
Total assets | 22,339,616 | |||
|
| |||
Liabilities | ||||
Accrued expenses | 40,597 | |||
Payable for investments purchased | 27,058 | |||
Management fee payable | 4,625 | |||
Distribution fee payable | 1,715 | |||
Affiliated transfer agent fee payable | 151 | |||
|
| |||
Total liabilities | 74,146 | |||
|
| |||
Net Assets | $ | 22,265,470 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 20,061 | ||
Paid-in capital in excess of par | 19,914,153 | |||
|
| |||
19,934,214 | ||||
Accumulated net investment loss | (79,407 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (1,133,264 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 3,543,927 | |||
|
| |||
Net assets, April 30, 2013 | $ | 22,265,470 | ||
|
|
See Notes to Financial Statements.
12 | Visit our website at www.prudentialfunds.com |
Class A | ||||
Net asset value and redemption price per share | $ | 11.08 | ||
Maximum sales charge (5.50% of offering price) | 0.64 | |||
|
| |||
Maximum offering price to public | $ | 11.72 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 10.98 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 11.11 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 13 |
Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Net Investment Loss | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $3,335) | $ | 84,076 | ||
Affiliated dividend income | 242 | |||
|
| |||
Total income | 84,318 | |||
|
| |||
Expenses | ||||
Management fee | 94,608 | |||
Distribution fee—Class A | 5,500 | |||
Distribution fee—Class C | 3,728 | |||
Custodian’s fees and expenses | 39,000 | |||
Registration fees | 27,000 | |||
Audit fee | 13,000 | |||
Reports to shareholders | 9,000 | |||
Legal fees and expenses | 9,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $400) (Note 3) | 6,000 | |||
Directors’ fees | 5,000 | |||
Miscellaneous | 9,206 | |||
|
| |||
Total expenses | 221,042 | |||
Expense reimbursement (Note 2) | (69,504 | ) | ||
|
| |||
Net expenses | 151,538 | |||
|
| |||
Net investment loss | (67,220 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 41,005 | |||
Foreign currency transactions | (1,701 | ) | ||
|
| |||
39,304 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 2,498,859 | |||
Foreign currencies | 211 | |||
|
| |||
2,499,070 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 2,538,374 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 2,471,154 | ||
|
|
See Notes to Financial Statements.
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Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2013 | March 14, 2012* through October 31, 2012 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (67,220 | ) | $ | (10,654 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 39,304 | (1,195,648 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 2,499,070 | 1,044,857 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 2,471,154 | (161,445 | ) | |||||
|
|
|
| |||||
Series share transactions (Note 6) | ||||||||
Net proceeds from shares sold | 908,059 | 19,692,646 | ||||||
Cost of shares reacquired | (606,780 | ) | (38,164 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 301,279 | 19,654,482 | ||||||
|
|
|
| |||||
Total increase | 2,772,433 | 19,493,037 | ||||||
Net Assets: | ||||||||
Beginning of period | 19,493,037 | — | ||||||
|
|
|
| |||||
End of period | $ | 22,265,470 | $ | 19,493,037 | ||||
|
|
|
|
* | Commencement of Series. |
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 15 |
Notes to Financial Statements
(Unaudited)
Prudential World Fund, Inc. (the “Fund”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”) and currently consists of five series: Prudential Jennison Global Opportunities Fund (the “Series”), Prudential International Equity Fund, Prudential International Value Fund, Prudential Jennison International Opportunities Fund and Prudential Emerging Markets Debt Local Currency Fund. These financial statements relate to the Prudential Jennison Global Opportunities Fund. The financial statements of the other series are not presented herein. The Series commenced investment operations on March 14, 2012. The investment objective of the Series is to achieve long-term growth of capital.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of the financial statements.
Securities Valuation: The Series holds portfolio 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 Directors (the “Board”) has delegated fair valuation responsibilities to Prudential Investments LLC (“PI” or “Manager”) through the adoption of Valuation Procedures for valuation of the Series’ securities. Under the current Valuation Procedures, a Valuation Committee is established and responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures allow the Series to utilize independent pricing vendor services, quotations from market makers and other valuation methods in events when market quotations are not readily available or not representative of the fair value of the securities. A record of the Valuation Committee’s actions is subject to review, approval and ratification by the Board at its next regularly scheduled quarterly meeting.
Various inputs are used in determining the value of the Series’ investments, which are summarized in the three broad level hierarchies based on any observable inputs used as described in the table following the Portfolio of Investments. The valuation methodologies and significant inputs used in determining the fair value of securities and other assets classified as Level 1, Level 2 and Level 3 of the hierarchy are as follows:
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Common stocks, exchange-traded funds and financial derivative instruments (including futures contracts and certain options and swap contracts on securities), 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 of the fair value hierarchy.
In the event there is no sale or official closing price on such day, these securities are valued at the mean between the last reported bid and asked prices, or at the last bid price in absence of an asked price. These securities are classified as Level 2 of the fair value hierarchy as these inputs are considered as significant other observable inputs to the valuation.
For common stocks traded on foreign securities exchanges, certain valuation adjustments will be applied when events occur after the close of the security’s foreign market and before the Series’ normal pricing time. These securities 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 of the fair value hierarchy as the adjustment factors are considered as significant other observable inputs 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 as they have the ability to be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market, such as corporate bonds, municipal bonds, U.S. Government agencies issues and guaranteed obligations, U.S. Treasury obligations and sovereign issues are usually valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices usually after evaluating observable inputs including yield curves, credit rating, yield spreads, default rates, cash flows as well as broker/dealer quotations and reported trades. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Asset-backed and mortgage-related securities are usually valued by approved independent pricing vendors. The pricing vendors provide the prices using their internal pricing models with inputs from deal terms, tranche level attributes, yield
Prudential Jennison Global Opportunities Fund | 17 |
Notes to Financial Statements
(Unaudited) continued
curves, prepayment speeds, default rates and broker/dealer quotes. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Short-term debt securities of sufficient credit quality, which mature in sixty days or less, are valued using amortized cost method, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy.
Over-the-counter financial derivative instruments, such as option contracts, foreign currency contracts and swaps agreements, are usually valued using pricing vendor services, which derive the valuation based on underlying asset prices, indices, spreads, interest rates, exchange rates and other inputs. These instruments are categorized as Level 2 of the fair value hierarchy.
Securities and other assets that cannot be priced using the methods described above are valued with pricing methodologies approved by the Valuation Committee. In the event there are unobservable inputs used when determining such valuations, the securities will be classified as Level 3 of the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.
Foreign Currency Translation: The books and records of the Series 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;
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(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 are presented at the foreign exchange rates and market values at the close of the fiscal period, the Series 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 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, 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 date and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability and the level of governmental supervision and regulation of foreign securities markets.
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. The Series enters into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or specific receivables and payables denominated in a foreign currency. 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
Prudential Jennison Global Opportunities Fund | 19 |
Notes to Financial Statements
(Unaudited) continued
of the amounts reflected on the Statement of Assets and Liabilities. The Series’ 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. A master netting arrangement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.
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 an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management, which may differ from actual.
Net investment income or loss (other than distribution fees which are charged directly to the respective class) and unrealized and realized gains 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.
Dividends and Distributions: The Series expects to pay dividends of net investment income and distributions from net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date.
Taxes: For federal income tax purposes, each Series in the Fund is treated as a separate taxpaying entity. It is each Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends are recorded net of reclaimable amounts, at the time the related income is earned.
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Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement for the Series with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison furnishes investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PI pays for the services of Jennison, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an annual rate of .90% of the Series’ average daily net assets. PI has contractually agreed through February 28, 2014 to limit net annual Series operating expenses (excluding distribution and service (12b-1) fees, extraordinary and certain other expenses such as taxes, interest and brokerage commissions) to each class of shares to 1.35% of the Series’ average daily net assets.
The Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C and Class Z shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C shares, pursuant to plans of distribution (the “Class A and C Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Series.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively. PIMS has contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares through February 28, 2014.
PIMS has advised the Series that they received $3,354 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2013. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
Prudential Jennison Global Opportunities Fund | 21 |
Notes to Financial Statements
(Unaudited) continued
PIMS has advised the Series that for the six months ended April 30, 2013, there were no contingent deferred sales charges imposed.
PI, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2013 were $9,736,158 and $9,815,600, respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2013 were as follows:
Tax Basis | Appreciation | Depreciation | Net Unrealized | |||
$18,435,443 | $3,791,113 | $(290,097) | $3,501,016 |
The difference between book basis and tax basis is primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies as of the most recent fiscal year end.
22 | Visit our website at www.prudentialfunds.com |
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2012 of approximately $1,133,000 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Management has analyzed the Series’ 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 Series’ financial statements for the current reporting period.
Note 6. Capital
The Series offers Class A, Class C and Class Z shares. Class A shares are subject to a maximum front-end sales charge of 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%. The Class A CDSC is waived for purchases by certain retirement or benefits plans. Class C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months after purchase. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value.
Under certain circumstances, an exchange may be made from specified share classes of the Series to one or more other share classes of the Series as presented in the table of transactions in shares of capital stock.
At April 30, 2013, Prudential Financial, Inc. through its affiliates owned 1,000 Class A shares, 1,000 Class C shares and 1,500,000 Class Z shares of the Series.
There are 900 million shares of common stock, $.01 par value per share, divided into three classes, designated Class A, Class C and Class Z common stock, each of which consists of 300,000,000 authorized shares.
Prudential Jennison Global Opportunities Fund | 23 |
Notes to Financial Statements
(Unaudited) continued
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 56,107 | $ | 579,912 | |||||
Shares reacquired | (50,178 | ) | (546,291 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 5,929 | $ | 33,621 | |||||
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|
| |||||
Period ended October 31, 2012*: | ||||||||
Shares sold | 399,078 | $ | 3,930,985 | |||||
Shares reacquired | (3,880 | ) | (38,164 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding | 395,198 | $ | 3,892,821 | |||||
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Class C | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 30,069 | $ | 320,897 | |||||
Shares reacquired | (2,260 | ) | (24,096 | ) | ||||
|
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|
| |||||
Net increase (decrease) in shares outstanding | 27,809 | $ | 296,801 | |||||
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Period ended October 31, 2012*: | ||||||||
Shares sold | 60,499 | $ | 579,898 | |||||
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Net increase (decrease) in shares outstanding | 60,499 | $ | 579,898 | |||||
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Class Z | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 682 | $ | 7,250 | |||||
Shares reacquired | (3,299 | ) | (36,393 | ) | ||||
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| |||||
Net decrease (decrease) in shares outstanding | (2,617 | ) | $ | (29,143 | ) | |||
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Period ended October 31, 2012*: | ||||||||
Shares sold | 1,519,236 | $ | 15,181,763 | |||||
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| |||||
Net increase (decrease) in shares outstanding | 1,519,236 | $ | 15,181,763 | |||||
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* | Commenced operations on March 14, 2012. |
Note 7. Borrowings
The Series, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 15, 2012 through November 14, 2013. The Funds pay an
24 | Visit our website at www.prudentialfunds.com |
annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 15, 2012, 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 Series did not utilize the SCA during the period ended April 30, 2013.
Note 8. New Accounting Pronouncement
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities.” The amendments, which will be effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial statements has not yet been determined.
In June 2013, the FASB issued guidance that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statement disclosures.
Prudential Jennison Global Opportunities Fund | 25 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||
Six Months Ended April 30, 2013(b) | March 14, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $9.86 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.04 | ) | (.02 | ) | ||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.26 | (.12 | ) | |||||||
Total from investment operations | 1.22 | (.14 | ) | |||||||
Net asset value, end of period | $11.08 | $9.86 | ||||||||
Total Return(c): | 12.37% | (1.40 | )% | |||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $4,445 | $3,898 | ||||||||
Average net assets (000) | $4,437 | $2,967 | ||||||||
Ratios to average net assets(d)(e): | ||||||||||
Expenses, including distribution and service (12b-1) fees | 1.60% | (f)(g) | 1.60% | (f)(g) | ||||||
Net investment loss | (.81)% | (f)(g) | (.30)% | (f)(g) | ||||||
Portfolio turnover rate | 46% | (h) | 48% | (h) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares.
(f) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratio would have been 2.26% and (1.47)%, respectively, for the six months ended April 30, 2013 and 3.05% and (1.75)%, respectively, for the period ended October 31, 2012.
(g) Annualized.
(h) Not annualized.
See Notes to Financial Statements.
26 | Visit our website at www.prudentialfunds.com |
Class C Shares | ||||||||||
Six Months Ended April 30, 2013(b) | March 14, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $9.81 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.08 | ) | (.06 | ) | ||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.25 | (.13 | ) | |||||||
Total from investment operations | 1.17 | (.19 | ) | |||||||
Net asset value, end of period | $10.98 | $9.81 | ||||||||
Total Return(c): | 11.93% | (1.90 | )% | |||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $970 | $593 | ||||||||
Average net assets (000) | $752 | $300 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expenses, including distribution and service (12b-1) fees | 2.35% | (e)(f) | 2.35% | (e)(f) | ||||||
Net investment loss | (1.57)% | (e)(f) | (.97)% | (e)(f) | ||||||
Portfolio turnover rate | 46% | (g) | 48% | (g) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratio would have been 3.01% and (2.23)%, respectively, for the six months ended April 30, 2013 and 3.85% and (2.47)%, respectively, for the period ended October 31, 2012.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 27 |
Financial Highlights
(Unaudited) continued
Class Z Shares | ||||||||||
Six Months Ended April 30, 2013(b) | March 14, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $9.87 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.03 | ) | - | (e) | ||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.27 | (.13 | ) | |||||||
Total from investment operations | 1.24 | (.13 | ) | |||||||
Net asset value, end of period | $11.11 | $9.87 | ||||||||
Total Return(c): | 12.56% | (1.30 | )% | |||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $16,850 | $15,002 | ||||||||
Average net assets (000) | $16,011 | $14,655 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expenses, including distribution and service (12b-1) fees | 1.35% | (f)(g) | 1.35% | (f)(g) | ||||||
Net investment loss | (.55)% | (f)(g) | (.03)% | (f)(g) | ||||||
Portfolio turnover rate | 46% | (h) | 48% | (h) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Less than $.005 per share.
(f) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratio would have been 2.01% and (1.21)%, respectively, for the six months ended April 30, 2013 and 2.72% and (1.40)%, respectively, for the period ended October 31, 2012.
(g) Annualized.
(h) Not annualized.
See Notes to Financial Statements.
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n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.prudentialfunds.com |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Stuart S. Parker • Richard A. Redeker • Robin B. Smith • Stephen G. Stoneburn |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Bruce Karpati, Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Amanda S. Ryan, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street | ||
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CUSTODIAN | The Bank of New York Mellon | One Wall Street New York, NY 10286 | ||
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TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential Jennison Global Opportunities Fund, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PRUDENTIAL JENNISON GLOBAL OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | |||
NASDAQ | PRJAX | PRJCX | PRJZX | |||
CUSIP | 743969719 | 743969693 | 743969685 |
MF214E2 0246188-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON INTERNATIONAL OPPORTUNITIES FUND
SEMIANNUAL REPORT · APRIL 30, 2013
Fund Type
International Stock
Objective
To seek long-term growth of capital
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
The accompanying financial statements as of April 30, 2013, were not audited, and accordingly, no auditor’s opinion is expressed on them.
Prudential Investments, Prudential, Jennison, 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.
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June 14, 2013
Dear Shareholder:
We hope you find the semiannual report for the Prudential Jennison International Opportunities Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2013.
We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.
Thank you for choosing the Prudential Investments family of funds.
Sincerely,
Stuart S. Parker, President
Prudential Jennison International Opportunities Fund
*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates LLC, QMA, and PIM are registered investment advisers and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.
Prudential Jennison International Opportunities Fund | 1 |
Your Fund’s Performance (Unaudited)
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. Class A shares have a maximum initial sales charge of 5.50%. Gross operating expenses: Class A, 2.95%; Class C, 3.65%; Class Z, 2.65%. Net operating expenses: Class A, 1.60%; Class C, 2.35%; Class Z, 1.35%, after contractual reduction through 2/28/2014.
Cumulative Total Returns (Without Sales Charges) as of 4/30/13 |
| |||||||
Six Months | Since Inception | |||||||
Class A | 9.73 | % | 24.10% (6/5/12) | |||||
Class C | 9.31 | 23.30 (6/5/12) | ||||||
Class Z | 9.86 | 24.36 (6/5/12) | ||||||
MSCI All Country World Index ex-US | 12.78 | 28.77 | ||||||
Lipper International Multi-Cap Core Funds Average | 14.20 | 29.83 | ||||||
Lipper International Multi-Cap Growth Funds Average | 12.71 | 26.62 | ||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/13 |
| |||||||
Since Inception | ||||||||
Class A | N/A (6/5/12) | |||||||
Class C | N/A (6/5/12) | |||||||
Class Z | N/A (6/5/12) | |||||||
MSCI All Country World Index ex-US | N/A | |||||||
Lipper International Multi-Cap Core Funds Average | N/A | |||||||
Lipper International Multi-Cap Growth Funds Average | N/A |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
The average annual total returns take into account applicable sales charges. Class A shares are subject to a maximum front-end sales charge of 5.50% and a 12b-1 fee of 0.30% annually. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund. Class C shares are not subject to a front-end sales charge, but charge a CDSC of 1% for shares sold within 12 months from the date of purchase and an annual 12b-1 fee of 1%. Class Z shares are not subject to a front-end sales charge, CDSC or 12b-1 fee. The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.
2 | Visit our website at www.prudentialfunds.com |
Benchmark Definitions
Morgan Stanley Capital International (MSCI) All Country (AC) World Index ex-US
The MSCI AC World Index ex-US is an unmanaged free-float-adjusted, market capitalization-weighted index designed to measure the equity market performance of developed and emerging markets, excluding the U.S. The MSCI AC World Index ex-US comprises 23 developed market country indexes and 21 emerging market country indexes. The developed market country indexes include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The emerging market country indexes include Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
Lipper International Multi-Cap Core Funds Average
Funds that, by portfolio practice, invest in a variety of market-capitalization ranges without concentrating 75% of their equity assets in any one market-capitalization range over an extended period of time. International multi-cap core funds typically have average characteristics compared to the MSCI EAFE Index.
Lipper International Multi-Cap Growth Funds Average
Funds that, by portfolio practice, invest in a variety of market-capitalization ranges without concentrating 75% of their equity assets in any one market-capitalization range over an extended period of time. International multi-cap growth funds typically have above-average characteristics compared to the MSCI EAFE Index.
Note: Although Lipper classifies the Fund in its International Multi-Cap Core Funds category, the Fund utilizes the Lipper International Multi-Cap Growth Funds category because the Fund’s investment manager believes that the Lipper International Multi-Cap Growth Funds category provides a more appropriate basis for Fund performance comparisons.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Averages reflect the deduction of operating expenses, but not sales charges or taxes.
Five Largest Holdings expressed as a percentage of net assets as of 4/30/13 | ||||
Inditex SA, Spain | 3.0 | % | ||
Novo Nordisk A/S (Class B Stock), Denmark | 2.9 | |||
SABMiller PLC, United Kingdom | 2.9 | |||
Rolls-Royce Holdings PLC, United Kingdom | 2.9 | |||
Barclays PLC, United Kingdom | 2.7 |
Prudential Jennison International Opportunities Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Industries expressed as a percentage of net assets as of 4/30/13 | ||||
Textiles, Apparel & Luxury Goods | 9.8 | % | ||
Pharmaceuticals | 9.4 | |||
Beverages | 8.0 | |||
Commercial Banks | 4.9 | |||
Semiconductors & Semiconductor Equipment | 4.5 |
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Fees and Expenses (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2012, at the beginning of the period, and held through the six-month period ended April 30, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before
Prudential Jennison International Opportunities Fund | 5 |
Fees and Expenses (continued)
expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Prudential Jennison International Opportunities Fund | Beginning Account Value November 1, 2012 | Ending Account April 30, 2013 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual** | $ | 1,000.00 | $ | 1,097.30 | 1.60 | % | $ | 8.32 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.86 | 1.60 | % | $ | 8.00 | ||||||||||
Class C | Actual** | $ | 1,000.00 | $ | 1,093.10 | 2.35 | % | $ | 12.20 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.14 | 2.35 | % | $ | 11.73 | ||||||||||
Class Z | Actual** | $ | 1,000.00 | $ | 1,098.60 | 1.35 | % | $ | 7.02 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.10 | 1.35 | % | $ | 6.76 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2013, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2013 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
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Portfolio of Investments
as of April 30, 2013 (Unaudited)
Shares | Description | Value (Note 1) | ||||
LONG-TERM INVESTMENTS 97.6% |
| |||||
COMMON STOCKS 96.3% |
| |||||
Brazil 5.6% |
| |||||
4,738 | Abril Educacao SA, 144A | $ | 102,231 | |||
7,479 | Arezzo Industria e Comercio SA | 157,598 | ||||
13,240 | BR Properties SA | 146,776 | ||||
15,151 | Grupo BTG Pactual | 249,671 | ||||
8,588 | Mills Estruturas e Servicos de Engenharia SA | 141,134 | ||||
|
| |||||
797,410 | ||||||
China 3.0% |
| |||||
42,153 | Great Wall Motor Co. Ltd. (Class H Stock) | 182,786 | ||||
4,299 | Tencent Holdings Ltd. | 147,471 | ||||
31,309 | Tong Ren Tang Technologies Co. Ltd. (Class H Stock) | 104,092 | ||||
|
| |||||
434,349 | ||||||
Denmark 2.9% |
| |||||
2,404 | Novo Nordisk A/S (Class B Stock) | 421,680 | ||||
France 8.3% |
| |||||
2,902 | BNP Paribas SA | 161,700 | ||||
1,547 | Dassault Systemes SA | 188,656 | ||||
1,972 | Pernod-Ricard SA | 244,120 | ||||
1,091 | PPR | 240,016 | ||||
1,480 | Remy Cointreau SA | 172,319 | ||||
1,629 | Technip SA | 174,843 | ||||
|
| |||||
1,181,654 | ||||||
Germany 5.1% |
| |||||
3,144 | Bayer AG | 328,010 | ||||
1,258 | Brenntag AG | 214,463 | ||||
2,384 | SAP AG | 189,350 | ||||
|
| |||||
731,823 | ||||||
Indonesia 0.6% |
| |||||
69,128 | PT Tower Bersama Infrastructure Tbk* | 40,172 | ||||
72,770 | PT Tower Bersama Infrastructure Tbk, 144A* | 42,289 | ||||
|
| |||||
82,461 | ||||||
Ireland 2.0% |
| |||||
16,475 | Experian PLC | 289,695 |
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 7 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Italy 11.3% |
| |||||
10,553 | Azimut Holding SpA | $ | 196,237 | |||
5,365 | Brunello Cucinelli SpA* | 114,884 | ||||
12,048 | Eni SpA | 288,138 | ||||
5,839 | Luxottica Group SpA | 303,973 | ||||
38,988 | Prada SpA | 351,438 | ||||
1,434 | Tod’s SpA | 208,113 | ||||
8,283 | Yoox SpA* | 155,552 | ||||
|
| |||||
1,618,335 | ||||||
Japan 6.5% |
| |||||
1,310 | FANUC Corp. | 197,538 | ||||
15,030 | Hino Motors Ltd. | 229,262 | ||||
2,656 | Murata Manufacturing Co. Ltd. | 216,054 | ||||
4,401 | Unicharm Corp. | 284,416 | ||||
|
| |||||
927,270 | ||||||
Macau 1.4% |
| |||||
37,070 | Sands China Ltd. | 194,423 | ||||
Mexico 1.0% |
| |||||
60,800 | Corp. Inmobiliaria Vesta SAB de CV, 144A | 140,154 | ||||
South Africa 2.6% |
| |||||
7,705 | Aspen Pharmacare Holdings Ltd. | 167,349 | ||||
3,181 | Naspers Ltd. (Class N Stock) | 212,870 | ||||
|
| |||||
380,219 | ||||||
South Korea 1.8% |
| |||||
190 | Samsung Electronics Co. Ltd. | 262,235 | ||||
Spain 3.0% |
| |||||
3,183 | Inditex SA | 427,779 | ||||
Switzerland 5.0% |
| |||||
4,434 | Novartis AG | 329,283 | ||||
894 | Syngenta AG | 382,099 | ||||
|
| |||||
711,382 | ||||||
Thailand 1.3% |
| |||||
133,251 | CP ALL PCL | 192,953 |
See Notes to Financial Statements.
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Shares | Description | Value (Note 1) | ||||
COMMON STOCKS (Continued) |
| |||||
Turkey 3.2% |
| |||||
4,304 | BIM Birlesik Magazalar AS | $ | 220,872 | |||
138,847 | Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 237,769 | ||||
|
| |||||
458,641 | ||||||
United Kingdom 22.4% |
| |||||
24,694 | ARM Holdings PLC | 382,050 | ||||
25,152 | Ashtead Group PLC | 229,535 | ||||
4,840 | ASOS PLC* | 240,583 | ||||
88,505 | Barclays PLC | 393,259 | ||||
20,743 | Compass Group PLC | 272,913 | ||||
10,411 | Diageo PLC | 317,617 | ||||
4,121 | Intertek Group PLC | 211,757 | ||||
23,771 | Rolls-Royce Holdings PLC | 417,249 | ||||
4,000 | Rotork PLC | 180,748 | ||||
7,746 | SABMiller PLC | 417,338 | ||||
9,565 | Telecity Group PLC | 137,063 | ||||
|
| |||||
3,200,112 | ||||||
United States 9.3% |
| |||||
4,726 | Accenture PLC (Class A Stock) | 384,885 | ||||
2,232 | Canadian Pacific Railway Ltd. | 278,152 | ||||
1,714 | Core Laboratories NV | 248,153 | ||||
979 | Credicorp Ltd. | 147,428 | ||||
4,725 | Michael Kors Holdings Ltd.* | 269,042 | ||||
|
| |||||
1,327,660 | ||||||
|
| |||||
Total common stocks | 13,780,235 | |||||
|
| |||||
PREFERRED STOCKS 1.3% |
| |||||
Germany 1.3% |
| |||||
912 | Volkswagen AG | 184,843 | ||||
United Kingdom |
| |||||
2,828,749 | Rolls-Royce Holdings PLC (Class C Stock)* | 4,394 | ||||
|
| |||||
Total preferred stocks | 189,237 | |||||
|
| |||||
Total long-term investments | 13,969,472 | |||||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 9 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
Shares | Description | Value (Note 1) | ||||
SHORT-TERM INVESTMENT 4.3% |
| |||||
Affiliated Money Market Mutual Fund |
| |||||
614,785 | Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | $ | 614,785 | |||
|
| |||||
Total Investments 101.9% | 14,584,257 | |||||
Liabilities in excess of other assets (1.9%) | (273,258 | ) | ||||
|
| |||||
Net Assets 100.0% | $ | 14,310,999 | ||||
|
|
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.
* | Non-income producing security. |
(a) | Prudential Investments LLC, the manager of the Series, 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 Series’ 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 Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2013 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Brazil | $ | 797,410 | $ | — | $ | — | ||||||
China | 434,349 | — | — | |||||||||
Denmark | 421,680 | — | — | |||||||||
France | 1,181,654 | — | — |
See Notes to Financial Statements.
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Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
Germany | $ | 731,823 | $ | — | $ | — | ||||||
Indonesia | 82,461 | — | — | |||||||||
Ireland | 289,695 | — | — | |||||||||
Italy | 1,618,335 | — | — | |||||||||
Japan | 927,270 | — | — | |||||||||
Macau | 194,423 | — | — | |||||||||
Mexico | 140,154 | — | — | |||||||||
South Africa | 380,219 | — | — | |||||||||
South Korea | 262,235 | — | — | |||||||||
Spain | 427,779 | — | — | |||||||||
Switzerland | 711,382 | — | — | |||||||||
Thailand | 192,953 | — | — | |||||||||
Turkey | 458,641 | — | — | |||||||||
United Kingdom | 3,200,112 | — | — | |||||||||
United States | 1,327,660 | — | — | |||||||||
Preferred Stocks | ||||||||||||
Germany | 184,843 | — | — | |||||||||
United Kingdom | — | 4,394 | — | |||||||||
Affiliated Money Market Mutual Fund | 614,785 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 14,579,863 | $ | 4,394 | $ | — | ||||||
|
|
|
|
|
|
Fair value of Level 2 investments at October 31, 2012 was $175,730, which was a result of valuing investments using third party vendor modeling tools. An amount of $172,814 was transferred from Level 2 into Level 1 at April 30, 2013 as a result of using quoted prices in active markets for such foreign securities.
It is the Portfolio’s policy to recognize transfers in and transfers out at the fair value as of the beginning of period.
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 11 |
Portfolio of Investments
as of April 30, 2013 (Unaudited) continued
The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2013 were as follows:
Textiles, Apparel & Luxury Goods | 9.8 | % | ||
Pharmaceuticals | 9.4 | |||
Beverages | 8.0 | |||
Commercial Banks | 4.9 | |||
Semiconductors & Semiconductor Equipment | 4.5 | |||
Affiliated Money Market Mutual Fund | 4.3 | |||
Machinery | 4.2 | |||
Trading Companies & Distributors | 4.1 | |||
Professional Services | 3.5 | |||
Hotels Restaurants & Leisure | 3.3 | |||
Energy Equipment & Services | 3.0 | |||
Specialty Retail | 3.0 | |||
Aerospace & Defense | 2.9 | |||
Food & Staples Retailing | 2.9 | |||
Internet & Catalog Retail | 2.8 | |||
Chemicals | 2.7 | |||
IT Services | 2.7 | |||
Automobiles | 2.6 | |||
Software | 2.6 | % | ||
Household Products | 2.0 | |||
Internet Software & Services | 2.0 | |||
Oil, Gas & Consumable Fuels | 2.0 | |||
Real Estate Management & Development | 2.0 | |||
Road & Rail | 1.9 | |||
Diversified Financial Services | 1.7 | |||
Multiline Retail | 1.7 | |||
Real Estate Investment Trusts | 1.7 | |||
Electronic Equipment & Instruments | 1.5 | |||
Media | 1.5 | |||
Capital Markets | 1.4 | |||
Diversified Consumer Services | 0.7 | |||
Wireless Telecommunication Services | 0.6 | |||
|
| |||
101.9 | ||||
Liabilities in excess of other assets | (1.9 | ) | ||
|
| |||
100.0 | % | |||
|
|
The Series invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Series’ financial performance as reflected in the Statement of Operations is presented in the summary below.
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2013 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||
Derivatives not designated as hedging | Right | |||
Equity contracts | $ | 3 | ||
|
|
See Notes to Financial Statements.
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PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
FINANCIAL STATEMENTS
(UNAUDITED)
SEMIANNUAL REPORT · APRIL 30, 2013
Prudential Jennison International Opportunities Fund
Statement of Assets and Liabilities
as of April 30, 2013 (Unaudited)
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $11,680,056) | $ | 13,969,472 | ||
Affiliated investments (cost $614,785) | 614,785 | |||
Foreign currency, at value (cost $11,686) | 11,732 | |||
Receivable for investments sold | 75,571 | |||
Receivable for Series shares sold | 24,869 | |||
Dividends receivable | 9,776 | |||
Foreign tax reclaim receivable | 5,592 | |||
Due from Manager | 4,112 | |||
Prepaid expenses | 201 | |||
|
| |||
Total assets | 14,716,110 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 253,721 | |||
Payable to custodian | 106,690 | |||
Accrued expenses | 37,126 | |||
Payable for Series shares reacquired | 7,387 | |||
Affiliated transfer agent fee payable | 99 | |||
Distribution fee payable | 88 | |||
|
| |||
Total liabilities | 405,111 | |||
|
| |||
Net Assets | $ | 14,310,999 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 11,562 | ||
Paid-in capital in excess of par | 11,767,509 | |||
|
| |||
11,779,071 | ||||
Distributions in excess of net investment income | (55,076 | ) | ||
Accumulated net realized gain on investment and foreign currency transactions | 297,660 | |||
Net unrealized appreciation on investments and foreign currencies | 2,289,344 | |||
|
| |||
Net Assets, April 30, 2013 | $ | 14,310,999 | ||
|
|
See Notes to Financial Statements.
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Class A | ||||
Net asset value and redemption price per share | $ | 12.36 | ||
Maximum sales charge (5.50% of offering price) | 0.72 | |||
|
| |||
Maximum offering price to public | $ | 13.08 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 12.28 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 12.38 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 15 |
Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Net Investment Loss | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $5,552) | $ | 79,261 | ||
Affiliated dividend income | 230 | |||
|
| |||
Total income | 79,491 | |||
|
| |||
Expenses | ||||
Management fee | 58,566 | |||
Distribution fee—Class A | 241 | |||
Distribution fee—Class C | 100 | |||
Custodian’s fees and expenses | 42,000 | |||
Registration fees | 27,000 | |||
Audit fee | 14,000 | |||
Legal fees and expenses | 10,000 | |||
Reports to shareholders | 6,000 | |||
Directors’ fees | 5,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $200) (Note 3) | 1,000 | |||
Miscellaneous | 8,596 | |||
|
| |||
Total expenses | 172,503 | |||
Expense reimbursement (Note 2) | (84,508 | ) | ||
|
| |||
Net expenses | 87,995 | |||
|
| |||
Net investment loss | (8,504 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 376,455 | |||
Foreign currency transactions | (1,362 | ) | ||
|
| |||
375,093 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 853,888 | |||
Foreign currencies | (38 | ) | ||
|
| |||
853,850 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 1,228,943 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 1,220,439 | ||
|
|
See Notes to Financial Statements.
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Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2013 | June 5, 2012* through October 31, 2012 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (8,504 | ) | $ | (7,704 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 375,093 | (71,729 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 853,850 | 1,435,494 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 1,220,439 | 1,356,061 | ||||||
|
|
|
| |||||
Dividends from net investment income (Note 1) | ||||||||
Class A | (532 | ) | — | |||||
Class C | (54 | ) | — | |||||
Class Z | (56,371 | ) | — | |||||
|
|
|
| |||||
(56,957 | ) | — | ||||||
|
|
|
| |||||
Series share transactions (Note 6) | ||||||||
Net proceeds from shares sold | 1,066,136 | 10,711,411 | ||||||
Net asset value of shares issued in reinvestment of dividends | 56,957 | — | ||||||
Cost of shares reacquired | (43,048 | ) | — | |||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 1,080,045 | 10,711,411 | ||||||
|
|
|
| |||||
Total increase | 2,243,527 | 12,067,472 | ||||||
Net Assets: | ||||||||
Beginning of period | 12,067,472 | — | ||||||
|
|
|
| |||||
End of period(a) | $ | 14,310,999 | $ | 12,067,472 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | — | $ | 10,385 | ||||
|
|
|
|
* | Commencement of Series. |
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 17 |
Notes to Financial Statements
(Unaudited)
Prudential World Fund, Inc. (the “Fund”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”) and currently consists of five series: Prudential Jennison International Opportunities Fund (the “Series”), Prudential International Equity Fund, Prudential International Value Fund, Prudential Jennison Global Opportunities Fund and Prudential Emerging Markets Debt Local Currency Fund. These financial statements relate to the Prudential Jennison International Opportunities Fund. The financial statements of the other series are not presented herein. The Series commenced investment operations on June 5, 2012.
The investment objective of the Series is to achieve long-term growth of capital.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in the preparation of the financial statements.
Securities Valuation: The Series holds portfolio 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 Directors (the “Board”) has delegated fair valuation responsibilities to Prudential Investments LLC (“PI” or “Manager”) through the adoption of Valuation Procedures for valuation of the Series’ securities. Under the current Valuation Procedures, a Valuation Committee is established and responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures allow the Series to utilize independent pricing vendor services, quotations from market makers and other valuation methods in events when market quotations are not readily available or not representative of the fair value of the securities. A record of the Valuation Committee’s actions is subject to review, approval and ratification by the Board at its next regularly scheduled quarterly meeting.
Various inputs are used in determining the value of the Series’ investments, which are summarized in the three broad level hierarchies based on any observable inputs used as described in the table following the Portfolio of Investments. The valuation methodologies and significant inputs used in determining the fair value of securities and other assets classified as Level 1, Level 2 and Level 3 of the hierarchy are as follows:
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Common stocks, exchange-traded funds and financial derivative instruments (including futures contracts and certain options and swap contracts on securities), 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 of the fair value hierarchy.
In the event there is no sale or official closing price on such day, these securities are valued at the mean between the last reported bid and asked prices, or at the last bid price in absence of an asked price. These securities are classified as Level 2 of the fair value hierarchy as these inputs are considered as significant other observable inputs to the valuation.
For common stocks traded on foreign securities exchanges, certain valuation adjustments will be applied when events occur after the close of the security’s foreign market and before the Series’ normal pricing time. These securities 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 of the fair value hierarchy as the adjustment factors are considered as significant other observable inputs 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 as they have the ability to be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market, such as corporate bonds, municipal bonds, U.S. Government agencies issues and guaranteed obligations, U.S. Treasury obligations and sovereign issues are usually valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices usually after evaluating observable inputs including yield curves, credit rating, yield spreads, default rates, cash flows as well as broker/dealer quotations and reported trades. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Prudential Jennison International Opportunities Fund | 19 |
Notes to Financial Statements
(Unaudited) continued
Asset-backed and mortgage-related securities are usually valued by approved independent pricing vendors. The pricing vendors provide the prices using their internal pricing models with inputs from deal terms, tranche level attributes, yield curves, prepayment speeds, default rates and broker/dealer quotes. Securities valued using such vendor prices are classified as Level 2 of the fair value hierarchy.
Short-term debt securities of sufficient credit quality, which mature in sixty days or less, are valued using amortized cost method, which approximates fair value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. These securities are categorized as Level 2 of the fair value hierarchy.
Over-the-counter financial derivative instruments, such as option contracts, foreign currency contracts and swaps agreements, are usually valued using pricing vendor services, which derive the valuation based on underlying asset prices, indices, spreads, interest rates, exchange rates and other inputs. These instruments are categorized as Level 2 of the fair value hierarchy.
Securities and other assets that cannot be priced using the methods described above are valued with pricing methodologies approved by the Valuation Committee. In the event there are unobservable inputs used when determining such valuations, the securities will be classified as Level 3 of 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.
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Foreign Currency Translation: The books and records of the Series 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 are presented at the foreign exchange rates and market values at the close of the fiscal period, the Series 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 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, 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 date and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability and the level of governmental supervision and regulation of foreign securities markets.
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. The Series enters into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or specific receivables and payables denominated in a foreign currency. 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
Prudential Jennison International Opportunities Fund | 21 |
Notes to Financial Statements
(Unaudited) continued
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. The Series’ 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. A master netting arrangement between the Series and the counterparty permits the Series to offset amounts payable by the Series to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Series to cover the Series’ exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable.
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.
Net investment income or loss (other than distribution fees which are charged directly 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.
Dividends and Distributions: The Series expects to pay dividends of net investment income and distributions from net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date.
Taxes: For federal income tax purposes, each Series in the Fund is treated as a separate taxpaying entity. It is each Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment
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companies and to distribute all of its taxable net investment income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends are recorded net of reclaimable amounts, at the time the related income is earned.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement for the Series with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor’s performance of such services. PI has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison furnishes investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PI pays for the services of Jennison, the compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly at an annual rate of .90% of the Series’ average daily net assets.
PI has contractually agreed through February 28, 2014 to limit net annual Series operating expenses (excluding distribution and service (12b-1) fees, extraordinary and certain other expenses such as taxes, interest and brokerage commissions) to each class of shares to 1.35% of the Series’ average daily net assets.
The Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C and Class Z shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C shares, pursuant to plans of distribution (the “Class A and C Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Series.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30% and 1% of the average daily net
Prudential Jennison International Opportunities Fund | 23 |
Notes to Financial Statements
(Unaudited) continued
assets of the Class A and C shares, respectively. PIMS has contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares through February 28, 2014.
PIMS has advised the Series that they received $4,279 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2013. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that for the six months ended April 30, 2013, there were no contingent deferred sales charges imposed.
PI, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ transfer agent. Transfer agent’s fees and expenses on the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series invests in the Prudential Core Taxable Money Market Fund, a portfolio of the Prudential Investment Portfolios 2, registered under the Investment Company Act of 1940 and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2013 were $6,496,031 and $5,716,507, respectively.
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Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2013 were as follows:
Tax Basis | Appreciation | Depreciation | Net Unrealized Appreciation | |||
$12,338,787 | $2,311,001 | $(65,531) | $2,245,470 |
The difference between book basis and tax basis is primarily attributable to deferred losses on wash sales and investments in passive foreign investment companies as of the most recent fiscal year end.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2012 of approximately $77,000 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
Management has analyzed the Series’ tax positions for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period.
Note 6. Capital
The Series offers Class A, Class C and Class Z shares. Class A shares are subject to a maximum front-end sales charge of 5.50%. Investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are not subject to an initial sales charge but are subject to a contingent deferred sales charge (CDSC) of 1%. The Class A CDSC is waived for purchases by certain retirement or benefits plans. The CDSC for Class C shares is 1% for shares redeemed within 12 months of purchase. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value.
Under certain circumstances, an exchange may be made from specified share classes of the Series to one or more other share classes of the Series as presented in the table of transactions in shares of capital stock.
At April 30, 2013, Prudential Financial, Inc. through its affiliates owned 1,004 Class A shares, 1,004 Class C shares and 1,005,515 Class Z shares of the Series.
Prudential Jennison International Opportunities Fund | 25 |
Notes to Financial Statements
(Unaudited) continued
There are 900 million shares of common stock, $.01 par value per share, divided into three classes, designated Class A, Class C and Class Z common stock, each of which consists of 300,000,000 authorized shares.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 24,568 | $ | 295,925 | |||||
Shares issued in reinvestment of dividends | 45 | 532 | ||||||
Shares reacquired | (2,108.2 | ) | (25,564 | ) | ||||
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Net increase (decrease) in shares outstanding | 22,504.8 | $ | 270,893 | |||||
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Period ended October 31, 2012*: | ||||||||
Shares sold | 8,321.2 | $ | 91,261 | |||||
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Net increase in shares outstanding | 8,321.2 | $ | 91,261 | |||||
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Class C | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 1,179 | $ | 14,260 | |||||
Shares issued in reinvestment of dividends | 4.6 | 54 | ||||||
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Net increase in shares outstanding | 1,183.6 | $ | 14,314 | |||||
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Period ended October 31, 2012*: | ||||||||
Shares sold | 1,013.4 | $ | 10,150 | |||||
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Net increase in shares outstanding | 1,013.4 | $ | 10,150 | |||||
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Class Z | ||||||||
Six months ended April 30, 2013: | ||||||||
Shares sold | 62,887 | $ | 755,951 | |||||
Shares issued in reinvestment of dividends | 4,798 | 56,371 | ||||||
Shares reacquired | (1,429 | ) | (17,484 | ) | ||||
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Net increase (decrease) in shares outstanding | 66,256 | $ | 794,838 | |||||
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Period ended October 31, 2012*: | ||||||||
Shares sold | 1,056,892 | $ | 10,610,000 | |||||
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Net increase in shares outstanding | 1,056,892 | $ | 10,610,000 | |||||
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* | Commenced operations on June 5, 2012. |
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Note 7. Borrowings
The Series, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 15, 2012 through November 14, 2013. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 15, 2012, 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 Series did not utilize the SCA during the period ended April 30, 2013.
Note 8. New Accounting Pronouncement
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities”. The amendments, which will be effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial statements has not yet been determined.
In June 2013, the FASB issued guidance that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statement disclosures.
Prudential Jennison International Opportunities Fund | 27 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||
Six Months Ended April 30, 2013(b) | June 5, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $11.30 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.01 | ) | (.01 | ) | ||||||
Net realized and unrealized gain on investment and foreign currency transactions | 1.12 | 1.31 | ||||||||
Total from investment operations | 1.11 | 1.30 | ||||||||
Less Dividends: | ||||||||||
Dividends from net investment income | (.05 | ) | - | |||||||
Net asset value, end of period | $12.36 | $11.30 | ||||||||
Total Return(c): | 9.73% | 13.00% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $381 | $94 | ||||||||
Average net assets (000) | $195 | $32 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expenses, including distribution and service (12b-1) fees(e) | 1.60% | (f)(g) | 1.60% | (f)(g) | ||||||
Net investment loss | (.12)% | (f)(g) | (.61)% | (f)(g) | ||||||
Portfolio turnover rate | 44% | (h) | 28% | (h) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) The distributor of the Series has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares.
(f) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratios would be 2.90% and (1.42)%, respectively, for the six months ended April 30, 2013 and 4.37% and (3.38)%, respectively, for the period ended October 31, 2012.
(g) Annualized.
(h) Not annualized.
See Notes to Financial Statements.
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Class C Shares | ||||||||||
Six Months Ended April 30, 2013(b) | June 5, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $11.27 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.06 | ) | (.05 | ) | ||||||
Net realized and unrealized gain on investment and foreign currency transactions | 1.12 | 1.32 | ||||||||
Total from investment operations | 1.06 | 1.27 | ||||||||
Less Dividends: | ||||||||||
Dividends from net investment income | (.05 | ) | - | |||||||
Net asset value, end of period | $12.28 | $11.27 | ||||||||
Total Return(c): | 9.31% | 12.70% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $27 | $11 | ||||||||
Average net assets (000) | $20 | $11 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expenses, including distribution and service (12b-1) fees | 2.35% | (e)(f) | 2.35% | (e)(f) | ||||||
Net investment loss | (.98)% | (e)(f) | (1.16)% | (e)(f) | ||||||
Portfolio turnover rate | 44% | (g) | 28% | (g) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratios would be 3.65% and (2.28)%, respectively, for the six months ended April 30, 2013 and 5.29% and (4.10)%, respectively, for the period ended October 31, 2012.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 29 |
Financial Highlights
(Unaudited) continued
Class Z Shares | ||||||||||
Six Months Ended April 30, 2013(b) | June 5, 2012(a) through October 31, 2012 | |||||||||
Per Share Operating Performance: | ||||||||||
Net Asset Value, Beginning Of Period | $11.32 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.01 | ) | (.01 | ) | ||||||
Net realized and unrealized gain on investment and foreign currency transactions | 1.12 | 1.33 | ||||||||
Total from investment operations | 1.11 | 1.32 | ||||||||
Less Dividends: | ||||||||||
Dividends from net investment income | (.05 | ) | - | |||||||
Net asset value, end of period | $12.38 | $11.32 | ||||||||
Total Return(c): | 9.86% | 13.20% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $13,903 | $11,962 | ||||||||
Average net assets (000) | $12,909 | $11,061 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expenses, including distribution and service (12b-1) fees | 1.35% | (e)(f) | 1.35% | (e)(f) | ||||||
Net investment loss | (.13)% | (e)(f) | (.17)% | (e)(f) | ||||||
Portfolio turnover rate | 44% | (g) | 28% | (g) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(d) Does not include expenses of the underlying fund in which the Series invests.
(e) Net of expense waiver/reimbursement. If the investment manager had not waived/reimbursed expenses, the expense ratios including distribution and services (12b-1) fees and net investment loss ratios would be 2.65% and (1.43)%, respectively, for the six months ended April 30, 2013 and 4.28% and (3.10)%, respectively, for the period ended October 31, 2012.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
30 | Visit our website at www.prudentialfunds.com |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.prudentialfunds.com |
PROXY VOTING |
The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
DIRECTORS |
Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Michael S. Hyland • Douglas H. McCorkindale • Stephen P. Munn • Stuart S. Parker • Richard A. Redeker • Robin B. Smith • Stephen G. Stoneburn |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Bruce Karpati, Chief Compliance Officer • Theresa C. Thompson, Deputy Chief Compliance Officer • Richard W. Kinville, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • Amanda S. Ryan, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street | ||
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CUSTODIAN | The Bank of New York Mellon | One Wall Street New York, NY 10286 | ||
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TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 9658 Providence, RI 02940 | ||
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 345 Park Avenue New York, NY 10154 | ||
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FUND COUNSEL | Willkie Farr & Gallagher LLP | 787 Seventh Avenue New York, NY 10019 |
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing. |
E-DELIVERY |
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above. |
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS |
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential Jennison International Opportunities Fund, Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee. |
AVAILABILITY OF PORTFOLIO SCHEDULE |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (202) 551-8090. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
PRUDENTIAL JENNISON INTERNATIONAL OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | |||
NASDAQ | PWJAX | PWJCX | PWJZX | |||
CUSIP | 743969677 | 743969669 | 743969651 |
MF215E2 0246200-00001-00
Item 2 – Code of Ethics – Not required, as this is not an annual filing.
Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.
Item 5 – Audit Committee of Listed Registrants – Not applicable.
Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable. |
Item 10 – Submission of Matters to a Vote of Security Holders – 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 – Not required, as this is not an annual filing. |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.
(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | Prudential World Fund, Inc. | |
By: | /s/ Deborah A. Docs | |
Deborah A. Docs | ||
Secretary | ||
Date: | June 20, 2013 |
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: | June 20, 2013 | |
By: | /s/ Grace C. Torres | |
Grace C. Torres | ||
Treasurer and Principal Financial Officer | ||
Date: | June 20, 2013 |