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: | 10/31/2015 | |
Date of reporting period: | 4/30/2015 |
Item 1 – Reports to Stockholders
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL INTERNATIONAL EQUITY FUND
SEMIANNUAL REPORT · APRIL 30, 2015
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Quantitative Management Associates, LLC (QMA) is a wholly owned subsidiary of Prudential Investment Management, Inc. (PIM). QMA and PIM are registered investment advisers and Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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June 15, 2015
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, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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
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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 |
| |||||||||||||||
Six Months | One Year | Five Years | Ten Years | |||||||||||||
Class A | 4.19 | % | 1.57 | % | 43.60 | % | 49.92 | % | ||||||||
Class B | 3.89 | 0.88 | 38.70 | 39.61 | ||||||||||||
Class C | 3.89 | 0.88 | 38.70 | 39.63 | ||||||||||||
Class Z | 4.36 | 1.89 | 45.36 | 53.74 | ||||||||||||
MSCI All Country World Ex-US Index | 5.56 | 2.63 | 34.10 | 83.52 | ||||||||||||
Lipper International Multi-Cap Core Funds Average | 5.93 | 2.36 | 41.78 | 73.16 | ||||||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 |
| |||||||||||||||
One Year | Five Years | Ten Years | ||||||||||||||
Class A | –8.44 | % | 4.50 | % | 2.72 | % | ||||||||||
Class B | –8.52 | 4.79 | 2.59 | |||||||||||||
Class C | –4.75 | 4.99 | 2.59 | |||||||||||||
Class Z | –2.91 | 5.93 | 3.56 | |||||||||||||
MSCI All Country World Ex-US Index | –1.01 | 4.82 | 5.46 | |||||||||||||
Lipper International Multi-Cap Core Funds Average | –0.58 | 6.06 | 4.87 |
Source: Prudential Investments LLC and Lipper Inc.
2 | Visit our website at www.prudentialfunds.com |
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class B* | Class C | Class Z | |||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1% on sales of $1 million or more made within 12 months of purchase | 5%(Yr.1) 4%(Yr.2) 3%(Yr.3) 2%(Yr.4) 1%(Yr.5) 1%(Yr.6) 0%(Yr.7) | 1% on sales made within 12 months of purchase | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .30% | 1% | 1% | None |
*Class B shares are closed to all purchase activity and no additional Class B shares may be purchased or acquired except by exchange from Class B shares of another Fund or through dividend or capital gains reinvestment.
Benchmark Definitions
MSCI All Country World Ex-US Index
The Morgan Stanley Capital International All Country World ex-US Index (MSCI ACWI ex-US Index) is an unmanaged, market-capitalization weighted index designed to provide a broad measure of stock performance throughout the world, with the exception of US based companies. The MSCI ACWI ex-US Index includes both developed and emerging markets.
Lipper International Multi-Cap Core Funds Average
The Lipper International Multi-Cap Core Funds Average (Lipper Average) is based on the average return of all funds in the Lipper International Multi-Cap Core Funds category for the periods noted. Funds in the Lipper 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. International multi-cap core funds typically have average characteristics compared to the MSCI EAFE Index.
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.
Prudential International Equity Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 |
| |||
Novartis AG, Pharmaceuticals | 1.9 | % | ||
Nestle SA, Food Products | 1.8 | |||
Mitsubishi UFJ Financial Group, Inc., Banks | 1.2 | |||
Taiwan Semiconductor Manufacturing Co. Ltd., Semiconductors & Semiconductor Equipment | 1.2 | |||
Total SA, Oil, Gas & Consumable Fuels | 1.2 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/15 |
| |||
Banks | 14.7 | % | ||
Pharmaceuticals | 8.0 | |||
Oil, Gas & Consumable Fuels | 7.3 | |||
Insurance | 4.7 | |||
Automobiles | 4.5 |
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, 2014, at the beginning of the period, and held through the six-month period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investments funds, including the Fund, that you own. You should consider
Prudential International Equity Fund | 5 |
Fees and Expenses (continued)
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.
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, 2014 | Ending Account April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,041.90 | 1.62 | % | $ | 8.20 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.76 | 1.62 | % | $ | 8.10 | ||||||||||
Class B | Actual | $ | 1,000.00 | $ | 1,038.90 | 2.32 | % | $ | 11.73 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.29 | 2.32 | % | $ | 11.58 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,038.90 | 2.32 | % | $ | 11.73 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.29 | 2.32 | % | $ | 11.58 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,043.60 | 1.32 | % | $ | 6.69 | |||||||||
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, 2015, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2015 (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 |
The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||||||
A | 1.62 | % | 1.62 | % | ||||
B | 2.32 | 2.32 | ||||||
C | 2.32 | 2.32 | ||||||
Z | 1.32 | 1.32 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential International Equity Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 99.6% | ||||||||
COMMON STOCKS 96.6% | ||||||||
Australia 4.2% | ||||||||
BHP Billiton Ltd. | 93,895 | $ | 2,397,744 | |||||
Commonwealth Bank of Australia | 52,430 | 3,669,950 | ||||||
Evolution Mining Ltd. | 1,749,861 | 1,396,295 | ||||||
Federation Centres Ltd., REIT | 667,127 | 1,549,950 | ||||||
Fortescue Metals Group Ltd.(a) | 441,536 | 745,895 | ||||||
Independence Group NL | 197,606 | 922,083 | ||||||
Lend Lease Group | 129,009 | 1,630,069 | ||||||
National Australia Bank Ltd. | 24,895 | 720,846 | ||||||
Primary Health Care Ltd. | 33,900 | 132,685 | ||||||
Sandfire Resources NL | 101,251 | 391,750 | ||||||
Telstra Corp. Ltd. | 32,068 | 157,637 | ||||||
Woodside Petroleum Ltd. | 11,805 | 325,550 | ||||||
|
| |||||||
14,040,454 | ||||||||
Austria 0.5% | ||||||||
ANDRITZ AG | 27,100 | 1,586,619 | ||||||
Belgium 0.3% | ||||||||
Anheuser-Busch InBev NV | 1,218 | 148,290 | ||||||
Delhaize Group SA | 5,413 | 435,749 | ||||||
Melexis NV | 6,237 | 385,807 | ||||||
|
| |||||||
969,846 | ||||||||
Brazil 0.5% | ||||||||
Banco do Brasil SA | 105,100 | 913,580 | ||||||
Porto Seguro SA | 62,400 | 770,227 | ||||||
|
| |||||||
1,683,807 | ||||||||
Canada 5.7% | ||||||||
Alimentation Couche-Tard, Inc. (Class B Stock) | 6,900 | 264,104 | ||||||
BCE, Inc. | 17,600 | 775,917 | ||||||
Canadian Imperial Bank of Commerce | 6,900 | 554,059 | ||||||
Canadian National Railway Co. | 38,376 | 2,477,821 | ||||||
Canadian Natural Resources Ltd. | 25,100 | 834,032 | ||||||
Canfor Pulp Products, Inc. | 33,200 | 424,046 | ||||||
Empire Co. Ltd. (Class A Stock) | 22,700 | 1,640,082 | ||||||
Enbridge, Inc. | 22,100 | 1,155,098 | ||||||
Fairfax Financial Holdings Ltd. | 300 | 163,862 |
See Notes to Financial Statements.
Prudential International Equity Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Canada (cont’d.) | ||||||||
Great Canadian Gaming Corp.* | 27,300 | $ | 535,139 | |||||
Imperial Oil Ltd. | 4,800 | 211,574 | ||||||
Intact Financial Corp. | 24,600 | 1,894,802 | ||||||
Linamar Corp. | 8,500 | 504,857 | ||||||
Metro, Inc. | 65,400 | 1,890,719 | ||||||
Royal Bank of Canada | 51,200 | 3,399,612 | ||||||
Suncor Energy, Inc. | 73,800 | 2,403,317 | ||||||
|
| |||||||
19,129,041 | ||||||||
Chile | ||||||||
Inversiones La Construccion SA | 11,171 | 143,005 | ||||||
China 6.2% | ||||||||
Agricultural Bank of China Ltd. (Class H Stock) | 3,441,000 | 1,937,216 | ||||||
Bank of China Ltd. (Class H Stock) | 4,665,000 | 3,196,474 | ||||||
Bank of Chongqing Co. Ltd. (Class H Stock) | 676,500 | 725,770 | ||||||
Bank of Communications Co. Ltd. (Class H Stock) | 141,000 | 144,534 | ||||||
Beijing Capital Land Ltd. (Class H Stock) | 662,000 | 546,977 | ||||||
China Communications Construction Co. Ltd. (Class H Stock) | 305,000 | 554,751 | ||||||
China Construction Bank Corp. (Class H Stock) | 1,266,000 | 1,228,950 | ||||||
China Everbright Bank Co. Ltd. (Class H Stock) | 2,952,000 | 2,000,111 | ||||||
China Lumena New Materials Corp.*(b) | 5,060,000 | 6,529 | ||||||
China Merchants Bank Co. Ltd. (Class H Stock) | 72,000 | 216,118 | ||||||
China Power International Development Ltd. | 2,152,000 | 1,387,321 | ||||||
China Telecom Corp. Ltd. (Class H Shares) | 1,154,000 | 854,893 | ||||||
Evergrande Real Estate Group Ltd. | 1,334,000 | 1,261,417 | ||||||
Fufeng Group Ltd. | 792,000 | 618,862 | ||||||
Huaneng Power International, Inc. (Class H Stock) | 1,482,000 | 2,101,799 | ||||||
Industrial & Commercial Bank of China Ltd. (Class H Stock) | 1,079,000 | 935,990 | ||||||
Jiangnan Group Ltd. | 3,120,000 | 999,526 | ||||||
Kaisa Group Holdings Ltd.* | 1,496,000 | 301,109 | ||||||
KWG Property Holding Ltd. | 1,207,500 | 1,220,054 | ||||||
Powerlong Real Estate Holdings Ltd.* | 1,054,000 | 229,504 | ||||||
Sinotruk Hong Kong Ltd. | 334,500 | 238,579 | ||||||
|
| |||||||
20,706,484 | ||||||||
Denmark 1.8% | ||||||||
A.P. Moeller - Maersk A/S (Class A Stock) | 622 | 1,199,152 | ||||||
Novo Nordisk A/S (Class B Stock) | 60,879 | 3,417,788 | ||||||
Novozymes A/S (Class B Stock) | 3,753 | 173,150 |
See Notes to Financial Statements.
10 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Denmark (cont’d.) | ||||||||
Schouw & Co. | 4,984 | $ | 255,595 | |||||
Vestas Wind Systems A/S | 25,608 | 1,161,514 | ||||||
|
| |||||||
6,207,199 | ||||||||
Finland 0.1% | ||||||||
Fortum OYJ | 15,977 | 315,505 | ||||||
Wartsila OYJ Abp | 2,845 | 130,529 | ||||||
|
| |||||||
446,034 | ||||||||
France 6.0% | ||||||||
Airbus Group NV | 13,178 | 913,265 | ||||||
AXA SA | 99,025 | 2,503,934 | ||||||
Cap Gemini SA | 8,843 | 787,873 | ||||||
Electricite de France SA | 38,662 | 983,751 | ||||||
Faurecia | 26,023 | 1,233,565 | ||||||
Groupe Fnac* | 5,679 | 342,045 | ||||||
Hermes International | 2,751 | 1,037,483 | ||||||
Natixis SA | 201,219 | 1,665,585 | ||||||
Orange SA | 128,167 | 2,111,083 | ||||||
Pernod-Ricard SA | 5,683 | 706,306 | ||||||
Peugeot SA* | 10,383 | 196,297 | ||||||
Publicis Groupe SA | 3,281 | 275,180 | ||||||
Renault SA | 4,395 | 462,432 | ||||||
Safran SA | 10,843 | 792,270 | ||||||
Sanofi | 14,987 | 1,525,536 | ||||||
Teleperformance | 7,851 | 590,198 | ||||||
Total SA | 73,312 | 3,969,846 | ||||||
|
| |||||||
20,096,649 | ||||||||
Germany 5.1% | ||||||||
Aareal Bank AG | 19,202 | 825,912 | ||||||
Allianz SE | 17,794 | 3,028,804 | ||||||
Bayer AG | 12,506 | 1,800,023 | ||||||
Bayerische Motoren Werke AG | 18,979 | 2,238,853 | ||||||
Daimler AG | 36,864 | 3,544,358 | ||||||
Deutsche Post AG | 15,532 | 511,442 | ||||||
Hannover Rueck SE | 2,000 | 203,302 | ||||||
K+S AG | 51,769 | 1,687,642 | ||||||
KUKA AG(a) | 13,189 | 936,966 | ||||||
Siemens AG | 1,552 | 168,830 |
See Notes to Financial Statements.
Prudential International Equity Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Germany (cont’d.) | ||||||||
Symrise AG | 2,131 | $ | 129,210 | |||||
Volkswagen AG | 7,984 | 2,022,460 | ||||||
|
| |||||||
17,097,802 | ||||||||
Greece 0.1% | ||||||||
Aegean Airlines SA | 21,322 | 179,561 | ||||||
Hong Kong 1.6% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 17,000 | 144,014 | ||||||
CK Hutchison Holdings Ltd. | 32,000 | 694,150 | ||||||
Galaxy Entertainment Group Ltd. | 402 | 1,932 | ||||||
Huabao International Holdings Ltd. | 354,000 | 397,628 | ||||||
Hysan Development Co. Ltd. | 223,000 | 1,030,406 | ||||||
Link REIT (The) | 334,500 | 2,074,897 | ||||||
Orient Overseas International Ltd. | 75,500 | 463,380 | ||||||
Power Assets Holdings Ltd. | 21,500 | 217,007 | ||||||
TCC International Holdings Ltd. | 688,000 | 290,301 | ||||||
|
| |||||||
5,313,715 | ||||||||
Hungary 0.1% | ||||||||
Magyar Telekom Telecommunications PLC* | 197,287 | 295,297 | ||||||
India 1.0% | ||||||||
ICICI Bank Ltd., ADR | 54,100 | 591,313 | ||||||
Infosys Ltd., ADR(a) | 66,400 | 2,057,072 | ||||||
Reliance Industries Ltd., GDR, 144A | 16,878 | 454,018 | ||||||
Wipro Ltd., ADR(a) | 9,100 | 104,377 | ||||||
|
| |||||||
3,206,780 | ||||||||
Indonesia | ||||||||
PT Bank Negara Indonesia (Persero) Tbk | 261,600 | 129,104 | ||||||
Ireland 0.5% | ||||||||
Greencore Group PLC | 92,406 | 501,445 | ||||||
Ryanair Holdings PLC, ADR | 4,100 | 265,885 | ||||||
Shire PLC | 9,319 | 757,291 | ||||||
Smurfit Kappa Group PLC | 9,500 | 290,857 | ||||||
|
| |||||||
1,815,478 |
See Notes to Financial Statements.
12 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Israel 1.4% | ||||||||
Bank Hapoalim BM | 374,811 | $ | 1,874,789 | |||||
Teva Pharmaceutical Industries Ltd. | 44,325 | 2,693,380 | ||||||
|
| |||||||
4,568,169 | ||||||||
Italy 1.0% | ||||||||
Eni SpA | 55,262 | 1,060,250 | ||||||
Luxottica Group SpA | 12,110 | 797,528 | ||||||
Snam SpA | 33,349 | 173,720 | ||||||
UnipolSai SpA | 444,772 | 1,244,636 | ||||||
|
| |||||||
3,276,134 | ||||||||
Japan 16.9% | ||||||||
Alpine Electronics, Inc. | 8,373 | 170,150 | ||||||
Alps Electric Co. Ltd. | 25,100 | 623,494 | ||||||
Asahi Kasei Corp. | 21,000 | 197,749 | ||||||
Brother Industries Ltd. | 6,900 | 109,782 | ||||||
Daicel Corp. | 11,000 | 132,617 | ||||||
Daikin Industries Ltd. | 28,700 | 1,933,492 | ||||||
FANUC Corp. | 13,100 | 2,881,511 | ||||||
Fast Retailing Co. Ltd. | 900 | 354,492 | ||||||
Fuji Heavy Industries Ltd. | 61,300 | 2,049,873 | ||||||
FUJIFILM Holdings Corp. | 54,700 | 2,060,386 | ||||||
Hoya Corp. | 5,300 | 204,267 | ||||||
Japan Tobacco, Inc. | 51,200 | 1,787,948 | ||||||
KDDI Corp. | 120,300 | 2,846,580 | ||||||
Keihin Corp. | 9,400 | 153,968 | ||||||
Keyence Corp. | 800 | 427,079 | ||||||
Koito Manufacturing Co. Ltd. | 4,100 | 143,469 | ||||||
Kubota Corp. | 14,779 | 231,307 | ||||||
KYORIN Holdings, Inc. | 6,800 | 156,412 | ||||||
Medipal Holdings Corp. | 42,500 | 579,807 | ||||||
Mitsubishi Electric Corp. | 178,000 | 2,324,628 | ||||||
Mitsubishi Materials Corp. | 458,000 | 1,648,789 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 567,000 | 4,028,167 | ||||||
Mitsui & Co. Ltd. | 46,000 | 643,362 | ||||||
Mizuho Financial Group, Inc. | 1,340,600 | 2,555,560 | ||||||
Murata Manufacturing Co. Ltd. | 18,100 | 2,550,544 | ||||||
NHK Spring Co. Ltd. | 41,000 | 469,391 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 711,000 | 1,849,465 | ||||||
Nippon Telegraph & Telephone Corp. | 42,392 | 2,862,520 |
See Notes to Financial Statements.
Prudential International Equity Fund | 13 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Nitto Denko Corp. | 2,700 | $ | 173,031 | |||||
NOK Corp. | 5,000 | 157,127 | ||||||
NSK Ltd. | 108,000 | 1,686,725 | ||||||
Oriental Land Co. Ltd. | 3,200 | 216,641 | ||||||
ORIX Corp. | 21,100 | 324,484 | ||||||
Otsuka Holdings Co. Ltd. | 65,300 | 2,061,165 | ||||||
Panasonic Corp. | 180,600 | 2,586,891 | ||||||
Resona Holdings, Inc. | 98,200 | 523,609 | ||||||
Rohm Co. Ltd. | 2,100 | 145,666 | ||||||
Sekisui Chemical Co. Ltd. | 15,000 | 200,009 | ||||||
Shimano, Inc. | 1,300 | 186,226 | ||||||
Sony Corp.* | 101,967 | 3,082,640 | ||||||
Sumitomo Metal Mining Co. Ltd. | 28,000 | 410,402 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 71,800 | 3,135,118 | ||||||
Taisei Corp. | 22,000 | 127,443 | ||||||
Tokio Marine Holdings, Inc. | 11,300 | 460,653 | ||||||
Tokyo Electron Ltd. | 2,132 | 116,860 | ||||||
Toyota Industries Corp. | 21,300 | 1,206,311 | ||||||
Toyota Motor Corp. | 54,333 | 3,782,073 | ||||||
West Japan Railway Co. | 4,100 | 227,072 | ||||||
|
| |||||||
56,786,955 | ||||||||
Luxembourg 0.3% | ||||||||
Altice SA* | 9,700 | 1,027,954 | ||||||
Malaysia 0.6% | ||||||||
Carlsberg Brewery Malaysia Bhd | 93,100 | 349,900 | ||||||
IGB Real Estate Investment Trust, REIT | 495,600 | 190,566 | ||||||
Sunway Bhd | 361,600 | 384,120 | ||||||
YTL Corp. Bhd | 1,556,400 | 729,801 | ||||||
YTL Power International Bhd | 499,900 | 224,580 | ||||||
|
| |||||||
1,878,967 | ||||||||
Mexico 0.2% | ||||||||
Grupo Televisa SAB* | 78,400 | 570,804 | ||||||
Netherlands 1.4% | ||||||||
Koninklijke Ahold NV | 15,415 | 298,653 | ||||||
Royal Dutch Shell PLC (Class A Stock) | 101,532 | 3,201,310 | ||||||
Royal Dutch Shell PLC (Class B Stock) | 37,682 | 1,206,413 | ||||||
|
| |||||||
4,706,376 |
See Notes to Financial Statements.
14 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
New Zealand 0.4% | ||||||||
Air New Zealand Ltd. | 532,994 | $ | 1,095,320 | |||||
Xero Ltd.* | 13,190 | 199,225 | ||||||
|
| |||||||
1,294,545 | ||||||||
Norway 1.4% | ||||||||
DNB ASA | 118,042 | 2,097,041 | ||||||
Leroy Seafood Group ASA | 5,258 | 174,442 | ||||||
Salmar ASA | 33,029 | 536,240 | ||||||
SpareBank 1 SMN | 21,078 | 188,285 | ||||||
Statoil ASA | 7,133 | 151,222 | ||||||
Yara International ASA | 33,775 | 1,730,546 | ||||||
|
| |||||||
4,877,776 | ||||||||
Poland 1.1% | ||||||||
Asseco Poland SA | 39,018 | 657,324 | ||||||
PGE Polska Grupa Energetyczna SA | 313,699 | 1,805,070 | ||||||
Powszechny Zaklad Ubezpieczen SA | 10,084 | 1,315,204 | ||||||
|
| |||||||
3,777,598 | ||||||||
Portugal 0.4% | ||||||||
Altri SGPS SA | 129,005 | 553,273 | ||||||
Sonae SGPS SA | 623,289 | 866,642 | ||||||
|
| |||||||
1,419,915 | ||||||||
Russia 0.8% | ||||||||
Gazprom OAO, ADR | 141,081 | 835,764 | ||||||
Lukoil OAO, ADR | 14,482 | 741,478 | ||||||
Magnit PJSC, GDR, RegS | 4,245 | 234,112 | ||||||
MMC Norilsk Nickel OJSC, ADR | 7,332 | 137,695 | ||||||
NOVATEK OAO, GDR, RegS | 1,343 | 130,540 | ||||||
Rosneft OAO, GDR, RegS | 68,985 | 340,786 | ||||||
Surgutneftegas OAO, ADR | 23,126 | 167,663 | ||||||
|
| |||||||
2,588,038 | ||||||||
Singapore 1.5% | ||||||||
Mapletree Commercial Trust, REIT | 357,000 | 415,182 | ||||||
Mapletree Greater China Commercial Trust, REIT | 1,483,700 | 1,187,634 | ||||||
Mapletree Industrial Trust, REIT | 255,000 | 309,968 | ||||||
Oversea-Chinese Banking Corp. Ltd. | 180,100 | 1,450,323 |
See Notes to Financial Statements.
Prudential International Equity Fund | 15 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Singapore (cont’d.) | ||||||||
Wilmar International Ltd. | 715,500 | $ | 1,757,356 | |||||
|
| |||||||
5,120,463 | ||||||||
South Africa 2.7% | ||||||||
AVI Ltd. | 156,023 | 1,069,172 | ||||||
FirstRand Ltd. | 456,842 | 2,182,378 | ||||||
Hyprop Investments Ltd. | 13,039 | 134,267 | ||||||
Mondi PLC | 55,163 | 1,116,942 | ||||||
Mr Price Group Ltd. | 6,067 | 129,531 | ||||||
Sasol Ltd. | 42,052 | 1,693,160 | ||||||
Sibanye Gold Ltd. | 497,276 | 1,180,186 | ||||||
Standard Bank Group Ltd. | 31,477 | 461,388 | ||||||
Telkom SA SOC Ltd.* | 156,863 | 1,078,315 | ||||||
|
| |||||||
9,045,339 | ||||||||
South Korea 3.2% | ||||||||
Hanil Cement Co. Ltd. | 2,194 | 307,750 | ||||||
Hyundai Hysco Co. Ltd. | 2,454 | 151,177 | ||||||
Hyundai Steel Co. | 7,972 | 582,687 | ||||||
KT&G Corp. | 24,378 | 2,162,638 | ||||||
LF Corp. | 22,071 | 725,719 | ||||||
LG Display Co. Ltd. | 58,807 | 1,628,548 | ||||||
LG Uplus Corp. | 12,099 | 121,040 | ||||||
Samjin Pharmaceutical Co. Ltd. | 11,949 | 270,076 | ||||||
Samsung Electronics Co. Ltd. | 1,713 | 2,247,206 | ||||||
Seah Besteel Corp. | 5,013 | 171,614 | ||||||
SK Hynix, Inc. | 47,243 | 2,021,296 | ||||||
SK Telecom Co. Ltd. | 822 | 220,274 | ||||||
|
| |||||||
10,610,025 | ||||||||
Spain 2.6% | ||||||||
Amadeus IT Holding SA (Class A Stock) | 8,093 | 368,895 | ||||||
Banco Santander SA | 364,204 | 2,753,594 | ||||||
Distribuidora Internacional de Alimentacion SA | 80,209 | 642,385 | ||||||
Endesa SA | 87,597 | 1,735,588 | ||||||
Repsol SA | 17,300 | 356,622 | ||||||
Telefonica SA | 180,979 | 2,754,584 | ||||||
|
| |||||||
8,611,668 |
See Notes to Financial Statements.
16 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Sweden 3.1% | ||||||||
Assa Abloy AB (Class B Stock) | 16,931 | $ | 982,232 | |||||
Axfood AB | 8,616 | 136,113 | ||||||
Bilia AB (Class A Stock) | 7,095 | 251,913 | ||||||
Boliden AB | 8,600 | 186,841 | ||||||
Electrolux AB (Class B Stock) | 52,303 | 1,566,089 | ||||||
Haldex AB | 9,712 | 145,130 | ||||||
Hennes & Mauritz AB (Class B Stock) | 7,055 | 280,484 | ||||||
Hexagon AB (Class B Stock) | 3,694 | 136,827 | ||||||
Investment AB Kinnevik (Class B Stock) | 46,393 | 1,598,838 | ||||||
Investor AB (Class B Stock) | 47,348 | 1,929,324 | ||||||
Klovern AB (Class A Stock) | 124,987 | 139,942 | ||||||
Skanska AB (Class B Stock) | 75,642 | 1,683,275 | ||||||
Svenska Cellulosa AB SCA (Class B Stock) | 51,978 | 1,314,782 | ||||||
|
| |||||||
10,351,790 | ||||||||
Switzerland 5.5% | ||||||||
Lonza Group AG | 12,235 | 1,729,907 | ||||||
Nestle SA | 76,579 | 5,941,322 | ||||||
Novartis AG | 60,704 | 6,196,190 | ||||||
Roche Holding AG | 11,587 | 3,315,679 | ||||||
Swiss Life Holding AG | 539 | 127,905 | ||||||
Swiss Re AG | 10,976 | 973,653 | ||||||
|
| |||||||
18,284,656 | ||||||||
Taiwan 3.7% | ||||||||
Advanced Semiconductor Engineering, Inc. | 108,000 | 153,157 | ||||||
AU Optronics Corp. | 249,000 | 124,960 | ||||||
Fubon Financial Holding Co. Ltd. | 949,000 | 2,040,879 | ||||||
Hua Nan Financial Holdings Co. Ltd. (Class C Stock) | 334,000 | 205,167 | ||||||
Innolux Corp. | 3,425,000 | 1,766,742 | ||||||
King Slide Works Co. Ltd. | 10,000 | 157,279 | ||||||
Mega Financial Holding Co. Ltd. | 164,891 | 146,664 | ||||||
Namchow Chemical Industrial Co. Ltd. | 240,000 | 532,351 | ||||||
Pegatron Corp. | 509,000 | 1,507,888 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 830,000 | 3,995,846 | ||||||
Wan Hai Lines Ltd. | 1,001,000 | 1,109,874 | ||||||
Wisdom Marine Lines Co. Ltd. | 567,000 | 744,075 | ||||||
|
| |||||||
12,484,882 |
See Notes to Financial Statements.
Prudential International Equity Fund | 17 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Thailand 1.5% | ||||||||
Ananda Development PCL | 2,474,000 | $ | 267,176 | |||||
Bangkok Expressway PCL | 320,000 | 378,583 | ||||||
GFPT PCL | 1,119,500 | 400,731 | ||||||
Krungthai Card PCL | 93,000 | 299,044 | ||||||
Major Cineplex Group PCL | 238,400 | 242,269 | ||||||
PTT PCL | 179,900 | 1,939,693 | ||||||
STP & I PCL | 1,200,200 | 593,456 | ||||||
Thanachart Capital PCL | 808,200 | 833,575 | ||||||
|
| |||||||
4,954,527 | ||||||||
Turkey 0.9% | ||||||||
Akcansa Cimento AS | 39,743 | 244,436 | ||||||
Cimsa Cimento Sanayi VE Ticaret AS | 96,410 | 591,554 | ||||||
Gubre Fabrikalari TAS | 125,103 | 334,034 | ||||||
Koza Altin Isletmeleri AS | 108,105 | 1,129,317 | ||||||
Selcuk Ecza Deposu Ticaret ve Sanayi A.S. | 141,910 | 147,534 | ||||||
Trakya Cam Sanayii AS | 613,551 | 738,662 | ||||||
|
| |||||||
3,185,537 | ||||||||
United Arab Emirates 0.3% | ||||||||
Air Arabia PJSC | 1,679,194 | 745,306 | ||||||
RAK Properties PJSC | 1,017,046 | 206,078 | ||||||
|
| |||||||
951,384 | ||||||||
United Kingdom 11.9% | ||||||||
3i Group PLC | 232,958 | 1,804,654 | ||||||
ARM Holdings PLC | 55,055 | 935,455 | ||||||
Ashtead Group PLC | 58,914 | 1,010,227 | ||||||
AstraZeneca PLC | 20,347 | 1,396,337 | ||||||
BAE Systems PLC | 277,925 | 2,153,129 | ||||||
Bellway PLC | 23,404 | 711,529 | ||||||
Betfair Group PLC | 24,500 | 873,031 | ||||||
BG Group PLC | 52,500 | 950,955 | ||||||
BP PLC | 342,012 | 2,466,712 | ||||||
British American Tobacco PLC | 20,344 | 1,117,766 | ||||||
BT Group PLC | 447,840 | 3,123,480 | ||||||
Capita PLC | 13,475 | 235,854 | ||||||
Centamin PLC | 869,919 | 849,616 | ||||||
Dixons Carphone PLC | 242,605 | 1,574,456 | ||||||
easyJet PLC | 13,507 | 373,475 |
See Notes to Financial Statements.
18 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom (cont’d.) | ||||||||
GlaxoSmithKline PLC | 144,400 | $ | 3,335,141 | |||||
HSBC Holdings PLC | 161,320 | 1,611,497 | ||||||
Imperial Tobacco Group PLC | 54,720 | 2,671,989 | ||||||
Intu Properties PLC, REIT | 328,204 | 1,721,756 | ||||||
J. Sainsbury PLC | 329,027 | 1,368,111 | ||||||
Legal & General Group PLC | 531,186 | 2,111,493 | ||||||
National Grid PLC | 60,597 | 815,227 | ||||||
Phoenix Group Holdings | 74,381 | 959,909 | ||||||
Provident Financial PLC | 20,745 | 956,886 | ||||||
Prudential PLC | 15,399 | 383,395 | ||||||
Rightmove PLC | 25,267 | 1,223,153 | ||||||
Unilever NV, CVA | 65,253 | 2,846,378 | ||||||
Wolseley PLC | 4,188 | 247,695 | ||||||
WS Atkins PLC | 7,506 | 154,008 | ||||||
|
| |||||||
39,983,314 | ||||||||
United States 0.1% | ||||||||
Catamaran Corp.* | 3,600 | 213,762 | ||||||
lululemon athletica, Inc.* | 48 | 3,055 | ||||||
|
| |||||||
216,817 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 323,620,508 | |||||||
|
| |||||||
EXCHANGE TRADED FUNDS 0.5% | ||||||||
United States | ||||||||
iShares MSCI EAFE Index Fund | 20,850 | 1,386,733 | ||||||
iShares MSCI Emerging Markets Index Fund | 8,200 | 351,616 | ||||||
|
| |||||||
TOTAL EXCHANGE TRADED FUNDS | 1,738,349 | |||||||
|
| |||||||
PREFERRED STOCKS 2.5% | ||||||||
Brazil 2.3% | ||||||||
Banco ABC Brasil SA (PRFC) | 53,300 | 234,397 | ||||||
Banco Bradesco SA (PRFC) | 202,800 | 2,166,018 | ||||||
Banco do Estado do Rio Grande do Sul SA (PRFC) (Class B Stock) | 58,300 | 219,620 | ||||||
Cia Energetica de Minas Gerais (PRFC) | 409,000 | 1,975,124 | ||||||
Itau Unibanco Holding SA (PRFC) | 173,800 | 2,226,038 | ||||||
Itau Unibanco Holding SA (PRFC), ADR | 17,490 | 224,222 |
See Notes to Financial Statements.
Prudential International Equity Fund | 19 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
PREFERRED STOCKS (Continued) | ||||||||
Brazil (cont’d.) | ||||||||
Oi SA (PRFC)* | 258,090 | $ | 488,263 | |||||
|
| |||||||
7,533,682 | ||||||||
Germany 0.2% | ||||||||
Volkswagen AG (PRFC) | 3,156 | 812,500 | ||||||
South Korea | ||||||||
Samsung Electronics Co. Ltd. (PRFC) | 131 | 132,925 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 8,479,107 | |||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 333,837,964 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT 1.3% | ||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | 4,202,633 | 4,202,633 | ||||||
|
| |||||||
TOTAL INVESTMENTS 100.9% | 338,040,597 | |||||||
Liabilities in excess of other assets (0.9)% | (2,920,321 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 335,120,276 | ||||||
|
|
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 Aandelen (Bearer)
EAFE—Europe, Australasia and Far East
GDR—Global Depositary Receipt
MSCI—Morgan Stanley Capital International
PRFC—Preference Shares
REIT—Real Estate Investment Trust
See Notes to Financial Statements.
20 |
* | 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 $3,829,928; cash collateral of $4,202,139 (included in liabilities) was received with which the Series purchased highly liquid short-term investments. Securities on loan are subject to contractual netting arrangements. |
(b) | Indicates a security or securities that has been deemed illiquid. |
(c) | Prudential Investments LLC, the manager of the Series also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund. |
(d) | Represents security, or a portion thereof, purchased with cash collateral received for securities on loan. |
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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | — | $ | 14,040,454 | $ | — | ||||||
Austria | — | 1,586,619 | — | |||||||||
Belgium | 385,807 | 584,039 | — | |||||||||
Brazil | 1,683,807 | — | — | |||||||||
Canada | 19,129,041 | — | — | |||||||||
Chile | 143,005 | — | — | |||||||||
China | — | 20,398,846 | 307,638 | |||||||||
Denmark | 255,595 | 5,951,604 | — | |||||||||
Finland | — | 446,034 | — | |||||||||
France | 932,243 | 19,164,406 | — | |||||||||
Germany | — | 17,097,802 | — | |||||||||
Greece | 179,561 | — | — | |||||||||
Hong Kong | — | 5,313,715 | — | |||||||||
Hungary | 295,297 | — | — | |||||||||
India | 3,206,780 | — | — | |||||||||
Indonesia | — | 129,104 | — |
See Notes to Financial Statements.
Prudential International Equity Fund | 21 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
Ireland | $ | 265,885 | $ | 1,549,593 | $ | — | ||||||
Israel | — | 4,568,169 | — | |||||||||
Italy | — | 3,276,134 | — | |||||||||
Japan | — | 56,786,955 | — | |||||||||
Luxembourg | 1,027,954 | — | — | |||||||||
Malaysia | 954,381 | 924,586 | — | |||||||||
Mexico | 570,804 | — | — | |||||||||
Netherlands | — | 4,706,376 | — | |||||||||
New Zealand | — | 1,294,545 | — | |||||||||
Norway | — | 4,877,776 | — | |||||||||
Poland | — | 3,777,598 | — | |||||||||
Portugal | — | 1,419,915 | — | |||||||||
Russia | 2,588,038 | — | — | |||||||||
Singapore | — | 5,120,463 | — | |||||||||
South Africa | 134,267 | 8,911,072 | — | |||||||||
South Korea | 2,162,638 | 8,447,387 | — | |||||||||
Spain | — | 8,611,668 | — | |||||||||
Sweden | — | 10,351,790 | — | |||||||||
Switzerland | — | 18,284,656 | — | |||||||||
Taiwan | — | 12,484,882 | — | |||||||||
Thailand | — | 4,954,527 | — | |||||||||
Turkey | — | 3,185,537 | — | |||||||||
United Arab Emirates | — | 951,384 | — | |||||||||
United Kingdom | — | 39,983,314 | — | |||||||||
United States | 216,817 | — | — | |||||||||
Exchange Traded Funds | ||||||||||||
United States | 1,738,349 | — | — | |||||||||
Preferred Stocks | ||||||||||||
Brazil | 7,533,682 | — | — | |||||||||
Germany | — | 812,500 | — | |||||||||
South Korea | — | 132,925 | — | |||||||||
Affiliated Money Market Mutual Fund | 4,202,633 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 47,606,584 | $ | 290,126,375 | $ | 307,638 | ||||||
|
|
|
|
|
|
See Notes to Financial Statements.
22 |
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2015 was as follows:
Banks | 14.7 | % | ||
Pharmaceuticals | 8.0 | |||
Oil, Gas & Consumable Fuels | 7.3 | |||
Insurance | 4.7 | |||
Automobiles | 4.5 | |||
Metals & Mining | 4.4 | |||
Diversified Telecommunication Services | 4.3 | |||
Food Products | 4.2 | |||
Household Durables | 2.6 | |||
Diversified Financial Services | 2.5 | |||
Machinery | 2.5 | |||
Real Estate Management & Development | 2.4 | |||
Real Estate Investment Trusts (REITs) | 2.4 | |||
Food & Staples Retailing | 2.3 | |||
Semiconductors & Semiconductor Equipment | 2.2 | |||
Tobacco | 2.2 | |||
Electronic Equipment, Instruments & Components | 2.2 | |||
Electric Utilities | 2.2 | |||
Technology Hardware, Storage & Peripherals | 1.8 | |||
Chemicals | 1.7 | |||
Electrical Equipment | 1.3 | |||
Affiliated Money Market Mutual Fund (including 1.3% of collateral for securities on loan) | 1.3 | |||
Auto Components | 1.1 | |||
Aerospace & Defense | 1.1 | |||
Building Products | 1.1 | |||
Media | 1.1 | |||
Independent Power & Renewable Electricity Producers | 1.0 | |||
Marine | 0.9 | |||
IT Services | 0.9 | |||
Wireless Telecommunication Services | 0.9 | % | ||
Specialty Retail | 0.9 | |||
Road & Rail | 0.8 | |||
Airlines | 0.8 | |||
Textiles, Apparel & Luxury Goods | 0.7 | |||
Construction & Engineering | 0.7 | |||
Paper & Forest Products | 0.6 | |||
Trading Companies & Distributors | 0.6 | |||
Hotels, Restaurants & Leisure | 0.6 | |||
Capital Markets | 0.5 | |||
Multi-Utilities | 0.5 | |||
Exchange Traded Funds | 0.5 | |||
Life Sciences Tools & Services | 0.5 | |||
Construction Materials | 0.5 | |||
Household Products | 0.4 | |||
Consumer Finance | 0.4 | |||
Beverages | 0.4 | |||
Health Care Providers & Services | 0.3 | |||
Professional Services | 0.3 | |||
Software | 0.3 | |||
Thrifts & Mortgage Finance | 0.2 | |||
Air Freight & Logistics | 0.1 | |||
Transportation Infrastructure | 0.1 | |||
Containers & Packaging | 0.1 | |||
Leisure Products | 0.1 | |||
Gas Utilities | 0.1 | |||
Industrial Conglomerates | 0.1 | |||
|
| |||
100.9 | ||||
Liabilities in excess of other assets | (0.9 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 23 |
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets | ||||
Investments at value, including securities on loan of $3,829,928: | ||||
Unaffiliated investments (cost $289,335,485) | $ | 333,837,964 | ||
Affiliated investments (cost $4,202,633) | 4,202,633 | |||
Cash | 44,463 | |||
Foreign currency, at value (cost $106,724) | 107,244 | |||
Receivable for investments sold | 2,283,220 | |||
Dividends receivable | 992,964 | |||
Tax reclaim receivable | 899,482 | |||
Receivable for Series shares sold | 111,743 | |||
Prepaid expenses | 1,693 | |||
|
| |||
Total assets | 342,481,406 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan (Note 3) | 4,202,139 | |||
Loan payable (Note 7) | 2,089,000 | |||
Accrued expenses and other liabilities | 372,040 | |||
Payable for Series shares reacquired | 312,133 | |||
Management fee payable | 230,013 | |||
Distribution fee payable | 83,158 | |||
Affiliated transfer agent fee payable | 72,381 | |||
Loan interest payable (Note 7) | 266 | |||
|
| |||
Total liabilities | 7,361,130 | |||
|
| |||
Net Assets | $ | 335,120,276 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 449,100 | ||
Paid-in capital in excess of par | 483,507,491 | |||
|
| |||
483,956,591 | ||||
Undistributed net investment income | 663,130 | |||
Accumulated net realized loss on investment and foreign currency transactions | (188,693,721 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 39,194,276 | |||
|
| |||
Net assets, April 30, 2015 | $ | 335,120,276 | ||
|
|
See Notes to Financial Statements.
24 |
Class A | ||||
Net asset value and redemption price per share | $ | 7.48 | ||
Maximum sales charge (5.50% of offering price) | 0.44 | |||
|
| |||
Maximum offering price to public | $ | 7.92 | ||
|
| |||
Class B | ||||
Net asset value, offering price and redemption price per share | ||||
($5,666,058 ÷ 788,366 shares of common stock issued and outstanding) | $ | 7.19 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | ||||
($22,147,901 ÷ 3,082,349 shares of common stock issued and outstanding) | $ | 7.19 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | ||||
($58,241,081 ÷ 7,735,018 shares of common stock issued and outstanding) | $ | 7.53 | ||
|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 25 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Income | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $480,852) | $ | 4,393,013 | ||
Affiliated income from securities lending, net | 16,338 | |||
Affiliated dividend income | 509 | |||
|
| |||
Total income | 4,409,860 | |||
|
| |||
Expenses | ||||
Management fee | 1,312,672 | |||
Distribution fee—Class A | 345,742 | |||
Distribution fee—Class B | 26,601 | |||
Distribution fee—Class C | 101,265 | |||
Transfer agent’s fees and expenses (including affiliated expense of $92,000) | 372,000 | |||
Custodian and accounting fees | 174,000 | |||
Shareholders’ reports | 81,000 | |||
Registration fees | 35,000 | |||
Audit fee | 15,000 | |||
Legal fees and expenses | 12,000 | |||
Directors’ fees | 10,000 | |||
Commitment fee on syndicated credit agreement | 3,000 | |||
Insurance expenses | 2,000 | |||
Loan interest expense | 1,754 | |||
Miscellaneous | 27,122 | |||
|
| |||
Total expenses | 2,519,156 | |||
|
| |||
Net investment income | 1,890,704 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 1,764,172 | |||
Foreign currency transactions | (146,609 | ) | ||
|
| |||
1,617,563 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 11,020,192 | |||
Foreign currencies | 10,877 | |||
|
| |||
11,031,069 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 12,648,632 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 14,539,336 | ||
|
|
See Notes to Financial Statements.
26 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 1,890,704 | $ | 6,147,243 | ||||
Net realized gain on investment and foreign currency transactions | 1,617,563 | 36,678,107 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 11,031,069 | (37,219,559 | ) | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 14,539,336 | 5,605,791 | ||||||
|
|
|
| |||||
Dividends from net investment income (Note 1) | ||||||||
Class A | (5,047,078 | ) | (4,392,794 | ) | ||||
Class B | (85,957 | ) | (82,095 | ) | ||||
Class C | (310,179 | ) | (258,429 | ) | ||||
Class F | — | (2,101 | ) | |||||
Class X | — | (2,191 | ) | |||||
Class Z | (1,263,747 | ) | (1,570,284 | ) | ||||
|
|
|
| |||||
(6,706,961 | ) | (6,307,894 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 9,644,259 | 17,501,842 | ||||||
Net asset value of shares issued in reinvestment of dividends | 6,566,173 | 6,176,619 | ||||||
Net asset value of shares issued in merger (Note 9) | 50,163,770 | — | ||||||
Cost of shares reacquired | (29,211,059 | ) | (65,161,727 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | 37,163,143 | (41,483,266 | ) | |||||
|
|
|
| |||||
Total increase (decrease) | 44,995,518 | (42,185,369 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 290,124,758 | 332,310,127 | ||||||
|
|
|
| |||||
End of period(a) | $ | 335,120,276 | $ | 290,124,758 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | 663,130 | $ | 5,479,387 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential International Equity Fund | 27 |
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 six series: Prudential International Equity Fund (the “Series”), Prudential Jennison Global Infrastructure Fund, Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity 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 seek long-term growth of capital.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund and the Series consistently follow such policies in the preparation of their financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
28 |
Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Prudential International Equity Fund | 29 |
Notes to Financial Statements
(Unaudited) continued
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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.
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
30 |
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, forward contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the difference between the amounts of interest, dividends 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.
Concentration of Risk: The ability of debt securities issuers (other than those issued or guaranteed by the U.S. Government) held by the Series to meet its 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 U.S. companies 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 basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures 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 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. With
Prudential International Equity Fund | 31 |
Notes to Financial Statements
(Unaudited) continued
exchange-traded futures contracts, there is minimal counterparty credit risk to the Series since the exchanges’ clearing house acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.
Master Netting Arrangements: The Series is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadvisor may have negotiated and entered into on behalf of the Series. 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. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there were no instances where the right of set-off existed and management has not elected to offset.
REITs: The Series invests in real estate investment trusts (“REITs”), which report information on the source of their distributors annually. Based on current and historical information, a portion of distributions received from REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. These estimates are adjusted periodically when the actual source of distributions is disclosed by the REITs.
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 in the open market using the collateral. 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
32 |
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. The Series holds such warrants and rights as long positions until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board of Directors’ 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 an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.
Net investment income or loss (other than 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: For federal income tax purposes, the Series 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 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.
Prudential International Equity Fund | 33 |
Notes to Financial Statements
(Unaudited) continued
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 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 accrued 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 .85% for the six months ended April 30, 2015.
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, served 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.
34 |
PIMS has advised the Series that they received $54,350 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2015. 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, 2015 it received $295, $4,401 and $100 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.
PI, QMA, PAD 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. Earnings from securities lending are disclosed on the Statement of Operations as “Affiliated income from securities lending, net”. For the six months ended April 30, 2015, PIM has been compensated approximately $4,900 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, 2015 aggregated $154,083,484 and $170,214,433, respectively.
Prudential International Equity Fund | 35 |
Notes to Financial Statements
(Unaudited) continued
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2015 were as follows:
Tax Basis | $ | 296,052,450 | ||
|
| |||
Appreciation | 51,040,519 | |||
Depreciation | (9,052,372 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 41,988,147 | ||
|
|
The book basis may differ from tax basis due to certain tax-related adjustments.
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 October 31, 2013 and October 31, 2014 (“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. The Series utilized approximately $34,677,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended October 31, 2014. 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, 2014, the pre and post-enactment losses were approximately:
Post-Enactment Losses: | $ | 0 | ||
|
| |||
Pre-Enactment Losses: | ||||
Expiring 2017 | $ | 180,326,000 | ||
Expiring 2018 | 8,337,000 | |||
|
| |||
$ | 188,663,000 | |||
|
|
Management has analyzed the Series’ tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
36 |
Note 6. Capital
The Series offers Class A, B, C, 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 shares are sold with a CDSC which declines from 5% to zero depending on the period of time the shares are held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Class B Shares are closed to new purchases. Class C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months after purchase. The last conversion of Class F and Class X shares to Class A shares was completed as of March 14, 2014 and April 11, 2014, respectively. There are no Class F and Class X shares outstanding and Class F and Class X shares are no longer being offered for sale. 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 875 million authorized shares of common stock at $.01 par value per share, designated Class A, Class B, Class C and Class Z, each of which consists of 325 million, 150 million, 150 million and 250 million authorized shares, respectively.
Prudential International Equity Fund | 37 |
Notes to Financial Statements
(Unaudited) continued
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 498,933 | $ | 3,566,743 | |||||
Shares issued in merger | 4,537,435 | 31,535,171 | ||||||
Shares issued in reinvestment of dividends and distributions | 721,043 | 4,924,725 | ||||||
Shares reacquired | (2,213,019 | ) | (15,706,262 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 3,544,392 | 24,320,377 | ||||||
Shares issued upon conversion from Class B | 67,760 | 465,568 | ||||||
Shares reacquired upon conversion into Class Z | (42,916 | ) | (303,341 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 3,569,236 | $ | 24,482,604 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 997,836 | $ | 7,437,126 | |||||
Shares issued in reinvestment of dividends and distributions | 606,075 | 4,278,811 | ||||||
Shares reacquired | (3,845,795 | ) | (28,680,565 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (2,241,884 | ) | (16,964,628 | ) | ||||
Shares issued upon conversion from Class B, Class F, Class X and Class Z | 217,343 | 1,616,468 | ||||||
Shares reacquired upon conversion into Class Z | (68,971 | ) | (522,940 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (2,093,512 | ) | $ | (15,871,100 | ) | |||
|
|
|
| |||||
Class B | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 29,497 | $ | 204,816 | |||||
Shares issued in merger | 164,257 | 1,100,522 | ||||||
Shares issued in reinvestment of dividends and distributions | 12,718 | 83,686 | ||||||
Shares reacquired | (57,405 | ) | (392,597 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 149,067 | 996,427 | ||||||
Shares reacquired upon conversion into Class A | (70,380 | ) | (465,568 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 78,687 | $ | 530,859 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 115,280 | $ | 820,488 | |||||
Shares issued in reinvestment of dividends and distributions | 11,788 | 80,161 | ||||||
Shares reacquired | (115,309 | ) | (828,558 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 11,759 | 72,091 | ||||||
Shares reacquired upon conversion into Class A | (159,740 | ) | (1,144,832 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (147,981 | ) | $ | (1,072,741 | ) | |||
|
|
|
|
38 |
Class C | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 65,302 | $ | 449,026 | |||||
Shares issued in merger | 656,750 | 4,400,227 | ||||||
Shares issued in reinvestment of dividends and distributions | 46,372 | 305,125 | ||||||
Shares reacquired | (255,323 | ) | (1,748,102 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 513,101 | 3,406,276 | ||||||
Shares reacquired upon conversion into Class Z | (4,246 | ) | (29,462 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 508,855 | $ | 3,376,814 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 250,597 | $ | 1,782,658 | |||||
Shares issued in reinvestment of dividends and distributions | 36,950 | 251,259 | ||||||
Shares reacquired | (452,927 | ) | (3,246,557 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (165,380 | ) | (1,212,640 | ) | ||||
Shares reacquired upon conversion into Class Z | (15,245 | ) | (112,272 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (180,625 | ) | $ | (1,324,912 | ) | |||
|
|
|
| |||||
Class F | ||||||||
Period ended March 14, 2014*: | ||||||||
Shares issued in reinvestment of dividends and distributions | 86 | $ | 583 | |||||
Shares reacquired | (5,211 | ) | (37,196 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (5,125 | ) | (36,613 | ) | ||||
Shares reacquired upon conversion into Class A | (14,245 | ) | (97,276 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (19,370 | ) | $ | (133,889 | ) | |||
|
|
|
| |||||
Class X | ||||||||
Period ended April 11, 2014**: | ||||||||
Shares sold | 14 | $ | 99 | |||||
Shares issued in reinvestment of dividends and distributions | 311 | 2,117 | ||||||
Shares reacquired | (1,493 | ) | (10,397 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,168 | ) | (8,181 | ) | ||||
Shares reacquired upon conversion into Class A | (29,057 | ) | (203,038 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (30,225 | ) | $ | (211,219 | ) | |||
|
|
|
|
Prudential International Equity Fund | 39 |
Notes to Financial Statements
(Unaudited) continued
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 754,856 | $ | 5,423,674 | |||||
Shares issued in merger | 1,878,090 | 13,127,850 | ||||||
Shares issued in reinvestment of dividends and distributions | 182,334 | 1,252,637 | ||||||
Shares reacquired | (1,601,365 | ) | (11,364,098 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,213,915 | 8,440,063 | ||||||
Shares issued upon conversion from Class A and Class C | 46,687 | 332,803 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,260,602 | $ | 8,772,866 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 999,881 | $ | 7,461,471 | |||||
Shares issued in reinvestment of dividends and distributions | 220,238 | 1,563,688 | ||||||
Shares reacquired | (4,459,314 | ) | (32,358,454 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (3,239,195 | ) | (23,333,295 | ) | ||||
Shares issued upon conversion from Class A and Class C | 83,020 | 635,212 | ||||||
Shares reacquired upon conversion into Class A | (21,953 | ) | (171,322 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (3,178,128 | ) | $ | (22,869,405 | ) | |||
|
|
|
|
* | As of March 14, 2014, the last conversion of Class F shares to Class A shares was completed. There are no Class F shares outstanding and Class F shares are no longer being offered for sale. |
** | As of April 11, 2014, the last conversion of Class X shares to Class A shares was completed. There are no Class X shares outstanding and Class X shares are no longer being offered for sale. |
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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 utilized the SCA during the six months ended April 30, 2015. The average daily balance for the 85 days that the Series had loans outstanding during the period was $501,024, borrowed at a weighted average interest rate of 1.42%. The maximum loan outstanding amount during the period was $2,168,000. There was a balance of $2,089,000 outstanding at April 30, 2015.
40 |
Note 8. Ownership
As of April 30, 2015, approximately 27% of the Series was owned by two institutional shareholders for the beneficial interest of their underlying account holders.
Note 9. Reorganization
On December 10, 2014, shareholders of the Prudential International Value Fund (“Value Fund”) approved the reorganization of the Fund into the Prudential International Equity Fund (“Equity Fund”). As a result of the reorganization, the assets and liabilities of the Value Fund were exchanged for shares of the Equity Fund and the shareholders of the Value Fund are now shareholders of the Equity Fund. The reorganization took place on December 19, 2014.
The purpose of the transaction was to combine two Funds with substantially similar investment objectives and policies. The acquiring fund, the Equity Fund, has the same contractual investment management fee and lower annualized operating expenses as well as stronger historical investment performance.
The acquisition was accomplished by a tax-free exchange of the following shares on December 19, 2014:
Merged Fund | Acquiring Fund | |||||||||||||||
Prudential International Value Fund | Prudential International Equity Fund | |||||||||||||||
Class | Shares | Class | Shares | Value | ||||||||||||
A | 1,463,874 | A | 4,537,435 | $ | 31,535,171 | |||||||||||
B | 53,470 | B | 164,257 | 1,100,522 | ||||||||||||
C | 213,549 | C | 656,750 | 4,400,227 | ||||||||||||
Z | 605,891 | Z | 1,878,090 | 13,127,850 |
For financial reporting purposes, assets received and shares issued by the Equity Fund were recorded at fair value; however, the cost basis of the investments received from the Value Fund was carried forward to reflect the tax-free status of the acquisition.
Prudential International Equity Fund | 41 |
Notes to Financial Statements
(Unaudited) continued
The net assets and net unrealized appreciation (depreciation) immediately before the acquisition were as follows:
Merged Fund | Acquiring Fund | |||||||||||||||
Prudential International Value Fund | Prudential International Equity Fund | |||||||||||||||
Class | Net Assets | Unrealized Appreciation (Depreciation) | Class | Net Assets | ||||||||||||
A | $ | 31,535,171 | $ | (18,392,510 | ) | A | $ | 208,078,146 | ||||||||
B | 1,100,522 | (4,110,791 | ) | B | 4,535,327 | |||||||||||
C | 4,400,227 | (2,470,294 | ) | C | 17,155,951 | |||||||||||
Z | 13,127,850 | 30,218,558 | Z | 46,771,671 |
Assuming the acquisition had been completed on November 1, 2014, the Equity Fund’s results of operations for the six months ended April 30, 2015 were as follows:
Net investment income | $ | 1,887,301 | (a) | |
Net realized and unrealized gain (loss) on investments | $ | 23,856,827 | (b) | |
|
| |||
Net increase (decrease) in net assets resulting from operations | $ | 25,744,128 | ||
|
|
(a) | $1,890,704, as reported in the Statement of Operations, plus $(3,403) Net Investment Loss from the Value Fund pre-merger. |
(b) | $12,648,632, as reported in the Statement of Operations, plus $11,208,195 Net Realized and Unrealized Gain (Loss) on Investments from the Value Fund pre-merger. |
Because both the Equity Fund and the Value Fund sold and redeemed shares throughout the period, it is not practicable to provide pro-forma information on a per-share basis.
Because the combined investment Funds have been managed as a single integrated Fund since the acquisition was completed, it is also not practicable to separate the amounts of revenue and earnings of the Value Fund that have been included in the Equity Fund’s Statement of Operations since December 19, 2014.
42 |
Note 10. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
Prudential International Equity Fund | 43 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2015 | 2014(a) | 2013(a) | 2012(a) | 2011(a) | 2010(a) | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.36 | $7.37 | $6.02 | $5.72 | $6.17 | $5.77 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .05 | .15 | .12 | .12 | .09 | .08 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .24 | (.02 | ) | 1.36 | .29 | (.46 | ) | .36 | ||||||||||||||||||
Total from investment operations | .29 | .13 | 1.48 | .41 | (.37 | ) | .44 | |||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.17 | ) | (.14 | ) | (.13 | ) | (.11 | ) | (.11 | ) | (.10 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | .03 | .06 | ||||||||||||||||||||
Net asset value, end of period | $7.48 | $7.36 | $7.37 | $6.02 | $5.72 | $6.17 | ||||||||||||||||||||
Total Return(b): | 4.19% | 1.84% | 25.06% | 7.40% | (5.61)% | 8.78% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $249,065 | $218,909 | $234,668 | $209,568 | $214,610 | $260,555 | ||||||||||||||||||||
Average net assets (000) | $232,405 | $232,049 | $221,300 | $204,088 | $247,859 | $257,553 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.62% | (e) | 1.59% | 1.59% | 1.67% | 1.64% | 1.57% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.62% | (e) | 1.59% | 1.59% | 1.67% | 1.64% | 1.57% | |||||||||||||||||||
Net investment income | 1.22% | (e) | 2.02% | 1.83% | 2.18% | 1.51% | 1.35% | |||||||||||||||||||
Portfolio turnover rate | 49% | (f) | 134% | 114% | 83% | 70% | 96% |
(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 a 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.
44 |
Class B Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2015 | 2014(a) | 2013(a) | 2012(a) | 2011(a) | 2010(a) | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | $5.56 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .02 | .10 | .07 | .08 | .05 | .04 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .24 | (.03 | ) | 1.32 | .27 | (.45 | ) | .35 | ||||||||||||||||||
Total from investment operations | .26 | .07 | 1.39 | .35 | (.40 | ) | .39 | |||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.12 | ) | (.09 | ) | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | .03 | .06 | ||||||||||||||||||||
Net asset value, end of period | $7.19 | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | ||||||||||||||||||||
Total Return(b): | 3.89% | 1.10% | 24.26% | 6.50% | (6.27)% | 8.11% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $5,666 | $5,006 | $6,066 | $5,439 | $6,720 | $9,160 | ||||||||||||||||||||
Average net assets (000) | $5,364 | $5,868 | $5,690 | $5,823 | $8,320 | $9,246 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.32% | (e) | 2.29% | 2.29% | 2.37% | 2.34% | 2.27% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.32% | (e) | 2.29% | 2.29% | 2.37% | 2.34% | 2.27% | |||||||||||||||||||
Net investment income | .50% | (e) | 1.35% | 1.13% | 1.48% | .83% | .66% | |||||||||||||||||||
Portfolio turnover rate | 49% | (f) | 134% | 114% | 83% | 70% | 96% |
(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 a 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 | Year Ended October 31, | |||||||||||||||||||||||||
2015 | 2014(a) | 2013(a) | 2012(a) | 2011(a) | 2010(a) | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | $5.56 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .03 | .10 | .07 | .08 | .05 | .04 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .23 | (.03 | ) | 1.32 | .27 | (.45 | ) | .35 | ||||||||||||||||||
Total from investment operations | .26 | .07 | 1.39 | .35 | (.40 | ) | .39 | |||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.12 | ) | (.09 | ) | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | .03 | .06 | ||||||||||||||||||||
Net asset value, end of period | $7.19 | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | ||||||||||||||||||||
Total Return(b): | 3.89% | 1.10% | 24.27% | 6.51% | (6.27)% | 8.11% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $22,148 | $18,146 | $19,472 | $17,658 | $21,310 | $26,625 | ||||||||||||||||||||
Average net assets (000) | $20,421 | $19,402 | $18,341 | $19,019 | $25,128 | $26,974 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.32% | (e) | 2.29% | 2.29% | 2.37% | 2.34% | 2.27% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.32% | (e) | 2.29% | 2.29% | 2.37% | 2.34% | 2.27% | |||||||||||||||||||
Net investment income | .54% | (e) | 1.32% | 1.13% | 1.49% | .81% | .66% | |||||||||||||||||||
Portfolio turnover rate | 49% | (f) | 134% | 114% | 83% | 70% | 96% |
(a) Calculated based on average shares outstanding during the year.
(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 a 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 |
Class F Shares | ||||||||||||||||||||||||||
Period Ended March 14, | Year Ended October 31, | |||||||||||||||||||||||||
2014(g) | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.08 | $5.79 | $5.50 | $5.94 | $5.56 | $4.62 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .01 | .09 | .09 | .06 | .05 | .06 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.05 | ) | 1.31 | .29 | (.44 | ) | .35 | 1.01 | ||||||||||||||||||
Total from investment operations | (.04 | ) | 1.40 | .38 | (.38 | ) | .40 | 1.07 | ||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.11 | ) | (.11 | ) | (.09 | ) | (.09 | ) | (.08 | ) | (.13 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | .03 | .06 | - | ||||||||||||||||||||
Net asset value, end of period | $6.93 | $7.08 | $5.79 | $5.50 | $5.94 | $5.56 | ||||||||||||||||||||
Total Return(b): | (.51)% | 24.51% | 6.98% | (6.05)% | 8.35% | 24.04% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $5 | $137 | $681 | $1,572 | $3,355 | $5,226 | ||||||||||||||||||||
Average net assets (000) | $71 | $423 | $1,044 | $2,442 | $4,064 | $5,769 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.03% | (e) | 2.04% | 2.12% | 2.09% | 2.02% | 1.99% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.03% | (e) | 2.04% | 2.12% | 2.09% | 2.02% | 1.99% | |||||||||||||||||||
Net investment income | .27% | (e) | 1.36% | 1.74% | 1.07% | .95% | 1.35% | |||||||||||||||||||
Portfolio turnover rate | 134% | (f) | 114% | 83% | 70% | 96% | 76% |
(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 a 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) Calculated as of October 31, 2014.
(g) As of March 14, 2014, the last conversion of Class F shares to Class A shares was completed. There are no Class F shares outstanding and Class F shares are no longer being offered for sale.
See Notes to Financial Statements.
Prudential International Equity Fund | 47 |
Financial Highlights
(Unaudited) continued
Class X Shares | ||||||||||||||||||||||||||
Period Ended April 11, | Year Ended October 31, | |||||||||||||||||||||||||
2014(g) | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.07 | $5.79 | $5.50 | $5.94 | $5.56 | $4.61 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income (loss) | - | (h) | .07 | .08 | .05 | .04 | .05 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .15 | 1.31 | .28 | (.45 | ) | .35 | 1.02 | |||||||||||||||||||
Total from investment operations | .15 | 1.38 | .36 | (.40 | ) | .39 | 1.07 | |||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.09 | ) | (.10 | ) | (.07 | ) | (.07 | ) | (.07 | ) | (.12 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | .03 | .06 | - | ||||||||||||||||||||
Net asset value, end of period | $7.13 | $7.07 | $5.79 | $5.50 | $5.94 | $5.56 | ||||||||||||||||||||
Total Return(b): | 2.25% | 24.05% | 6.69% | (6.27)% | 8.11% | 23.82% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $11 | $214 | $707 | $1,569 | $3,067 | $5,957 | ||||||||||||||||||||
Average net assets (000) | $102 | $449 | $1,077 | $2,351 | $4,020 | $6,611 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.28% | (e) | 2.29% | 2.37% | 2.34% | 2.27% | 2.24% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.28% | (e) | 2.29% | 2.37% | 2.34% | 2.27% | 2.24% | |||||||||||||||||||
Net investment income (loss) | (.04)% | (e) | 1.05% | 1.45% | .80% | .66% | 1.10% | |||||||||||||||||||
Portfolio turnover rate | 134% | (f) | 114% | 83% | 70% | 96% | 76% |
(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 a 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) Calculated as of October 31, 2014.
(g) As of April 11, 2014, the last conversion of Class X shares to Class A shares was completed. There are no Class X shares outstanding and Class X shares are no longer being offered for sale.
(h) Less than $.005 per share.
See Notes to Financial Statements.
48 |
Class Z Shares | ||||||||||||||||||||||||||
Six Months | Year Ended October 31, | |||||||||||||||||||||||||
2015 | 2014(a) | 2013(a) | 2012(a) | 2011(a) | 2010(a) | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.42 | $7.43 | $6.07 | $5.77 | $6.22 | $5.82 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .07 | .16 | .15 | .14 | .11 | .13 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .23 | (.01 | ) | 1.36 | .29 | (.46 | ) | .33 | ||||||||||||||||||
Total from investment operations | .30 | .15 | 1.51 | .43 | (.35 | ) | .46 | |||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.19 | ) | (.16 | ) | (.15 | ) | (.13 | ) | (.13 | ) | (.12 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | .03 | .06 | ||||||||||||||||||||
Net asset value, end of period | $7.53 | $7.42 | $7.43 | $6.07 | $5.77 | $6.22 | ||||||||||||||||||||
Total Return(b): | 4.36% | 2.12% | 25.36% | 7.69% | (5.30)% | 8.98% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $58,241 | $48,064 | $71,753 | $50,531 | $44,573 | $44,833 | ||||||||||||||||||||
Average net assets (000) | $54,720 | $53,881 | $60,981 | $45,946 | $46,529 | $149,685 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.32% | (e) | 1.29% | 1.29% | 1.37% | 1.34% | 1.27% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.32% | (e) | 1.29% | 1.29% | 1.37% | 1.34% | 1.27% | |||||||||||||||||||
Net investment income | 1.55% | (e) | 2.07% | 2.17% | 2.46% | 1.77% | 2.12% | |||||||||||||||||||
Portfolio turnover rate | 49% | (f) | 134% | 114% | 83% | 70% | 96% |
(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 a 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 | 49 |
Results of Proxy Voting
(Unaudited)
At a special meeting of shareholders held on November 26, 2014, shareholders of the Prudential World Fund, Inc., which is comprised of Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund, Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund and Prudential Emerging Markets Debt Local Currency Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:
Proposal: To elect twelve Directors:
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Ellen S. Alberding | ||||||||||||
FOR | 40,430,355.469 | 98.29 | % | 69.20 | % | |||||||
WITHHELD | 703,232.767 | 1.71 | % | 1.20 | % | |||||||
Kevin J. Bannon | ||||||||||||
FOR | 40,500,752.683 | 98.46 | % | 69.32 | % | |||||||
WITHHELD | 632,835.553 | 1.54 | % | 1.08 | % | |||||||
Linda W. Bynoe | ||||||||||||
FOR | 40,463,969.413 | 98.37 | % | 69.25 | % | |||||||
WITHHELD | 669,618.823 | 1.63 | % | 1.15 | % | |||||||
Keith F. Hartstein | ||||||||||||
FOR | 40,502,519.384 | 98.47 | % | 69.32 | % | |||||||
WITHHELD | 631,068.852 | 1.53 | % | 1.08 | % | |||||||
Michael S. Hyland | ||||||||||||
FOR | 40,454,955.187 | 98.35 | % | 69.24 | % | |||||||
WITHHELD | 678,633.049 | 1.65 | % | 1.16 | % | |||||||
Stephen P. Munn | ||||||||||||
FOR | 40,350,089.935 | 98.10 | % | 69.06 | % | |||||||
WITHHELD | 783,498.301 | 1.90 | % | 1.34 | % | |||||||
James E. Quinn | ||||||||||||
FOR | 40,472,965.987 | 98.39 | % | 69.27 | % | |||||||
WITHHELD | 660,622.249 | 1.61 | % | 1.13 | % | |||||||
Richard A. Redeker | ||||||||||||
FOR | 40,445,890.390 | 98.33 | % | 69.22 | % | |||||||
WITHHELD | 687,697.846 | 1.67 | % | 1.18 | % | |||||||
Stephen G. Stoneburn | ||||||||||||
FOR | 40,484,781.265 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 648,806.971 | 1.58 | % | 1.11 | % | |||||||
Grace C. Torres | ||||||||||||
FOR | 40,481,896.899 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 651,691.337 | 1.58 | % | 1.11 | % |
50 |
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Stuart S. Parker | ||||||||||||
FOR | 40,486,057.825 | 98.43 | % | 69.29 | % | |||||||
WITHHELD | 647,530.411 | 1.57 | % | 1.11 | % | |||||||
Scott E. Benjamin | ||||||||||||
FOR | 40,475,216.348 | 98.40 | % | 69.27 | % | |||||||
WITHHELD | 658,371.888 | 1.60 | % | 1.13 | % |
The special meeting of shareholders of the Fund held on November 26, 2014, was adjourned to December 3, 2014, and further adjourned to December 10, 2014, and January 9, 2015 to permit further solicitation of proxies on the proposals noted below.
An abstention or a broker non-vote is considered present for purposes of determining a quorum but has the effect of a vote against such matters. At the special meeting of shareholders held on January 9, 2015, insufficient votes were obtained to approve the following proposals:
Proposal: To permit Prudential Investments LLC (PI) to enter into or make material changes to the Fund’s subadvisory agreements with subadvisers that are wholly-owned subsidiaries of PI or a sister company of PI (wholly-owned subadvisers) without shareholder approval.
SHARES VOTED | % OF VOTED | % OF TOTAL | ||||||||||
FOR | 9,858,378.915 | 40.299 | % | 24.782 | % | |||||||
AGAINST | 570,265.174 | 2.332 | % | 1.434 | % | |||||||
ABSTAIN | 238,915.014 | 0.976 | % | 0.600 | % | |||||||
BROKER NON-VOTE | 13,795,834.814 | 56.393 | % | 34.680 | % | |||||||
TOTAL | 24,463,393.917 | 100.00 | % | 61.496 | % |
Proposal: To designate the Fund’s investment objective as a non-fundamental policy of the Fund, meaning that the Fund’s investment objective could be changed with the approval of the Fund’s Board of Directors, but without shareholder approval.
SHARES VOTED | % OF VOTED | % OF TOTAL | ||||||||||
FOR | 9,721,471.198 | 39.739 | % | 24.438 | % | |||||||
AGAINST | 658,482.289 | 2.692 | % | 1.655 | % | |||||||
ABSTAIN | 287,605.616 | 1.176 | % | 0.723 | % | |||||||
BROKER NON-VOTE | 13,795,834.814 | 56.393 | % | 34.680 | % | |||||||
TOTAL | 24,463,393.917 | 100.000 | % | 61.496 | % |
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 |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Chad A. Earnst, Chief Compliance Officer • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Quantitative Management Associates LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 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 | ||
| ||||
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 | Z | ||||
NASDAQ | PJRAX | PJRBX | PJRCX | PJIZX | ||||
CUSIP | 743969859 | 743969867 | 743969875 | 743969883 |
MF190E2 0278720-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON GLOBAL INFRASTRUCTURE FUND
SEMIANNUAL REPORT · APRIL 30, 2015
Objective
Total return
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC. Jennison Associates is a registered investment adviser. Both are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, Jennison Associates, Jennison, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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June 15, 2015
Dear Shareholder:
We hope you find the semiannual report for the Prudential Jennison Global Infrastructure Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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 Infrastructure Fund
Prudential Jennison Global Infrastructure 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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 | ||||||||||
Six Months | One Year | Since Inception | ||||||||
Class A | 3.01 | % | 11.40 | % | 31.68% (9/25/13) | |||||
Class C | 2.54 | 10.54 | 29.98 (9/25/13) | |||||||
Class Z | 3.10 | 11.67 | 32.05 (9/25/13) | |||||||
S&P Global Infrastructure Index | 2.72 | 6.58 | 20.90 | |||||||
S&P 500 Index | 4.39 | 12.96 | 28.01 | |||||||
Lipper Global Infrastructure Funds Average | 2.42 | 6.89 | 21.63 | |||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 |
| |||||||||
One Year | Since Inception | |||||||||
Class A | 2.15 | % | 12.04% (9/25/13) | |||||||
Class C | 6.31 | 15.41 (9/25/13) | ||||||||
Class Z | 8.35 | 16.58 (9/25/13) | ||||||||
S&P Global Infrastructure Index | 3.93 | 10.31 | ||||||||
S&P 500 Index | 12.71 | 17.15 | ||||||||
Lipper Global Infrastructure Funds Average | 4.40 | 11.12 |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
2 | Visit our website at www.prudentialfunds.com |
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | ||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | |||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | |||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .30% (.25% currently) | 1% | None |
Benchmark Definitions
S&P Global Infrastructure Index
The S&P Global Infrastructure Index is an unmanaged index that consists of 75 companies from around the world that represent the listed infrastructure universe. To create diversified exposure across the global listed infrastructure market, the Index has balanced weights across three distinct infrastructure clusters: Utilities, Transportation, and Energy.
S&P 500 Index
The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.
Lipper Global Infrastructure Funds Average
The Lipper Global Infrastructure Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Global Infrastructure Funds category for the periods noted. Funds in the Lipper Average invest primarily in equity securities of domestic and foreign companies engaged in an infrastructure industry, including but not limited to transportation, communication, and waste management.
Investors cannot invest directly in an index or average. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the inception date for the indicated share class.
Prudential Jennison Global Infrastructure Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 | ||||
Groupe Eurotunnel SE, Transportation Infrastructure | 4.1 | % | ||
Atlantia SpA, Transportation Infrastructure | 3.7 | |||
Ferrovial SA, Construction & Engineering | 3.4 | |||
Terraform Power, Inc., Independent Power & Renewable Electricity Producers | 2.3 | |||
SBA Communications Corp., Wireless Telecommunication Services | 2.2 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/15 | ||||
Oil, Gas & Consumable Fuels | 18.0 | % | ||
Transportation Infrastructure | 14.5 | |||
Independent Power & Renewable Electricity Producers | 13.5 | |||
Electric Utilities | 10.3 | |||
Multi-Utilities | 10.1 |
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, 2014, at the beginning of the period, and held through the initial fiscal period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the 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
Prudential Jennison Global Infrastructure Fund | 5 |
Fees and Expenses (continued)
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.
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 Infrastructure Fund | Beginning Account Value November 1, 2014 | Ending Account April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,030.10 | 1.50 | % | $ | 7.55 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.36 | 1.50 | % | $ | 7.50 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,025.40 | 2.25 | % | $ | 11.30 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.64 | 2.25 | % | $ | 11.23 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,031.00 | 1.25 | % | $ | 6.29 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.60 | 1.25 | % | $ | 6.26 |
*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, 2015, and divided by the 365 days in the Fund's fiscal year ending October 31, 2015 (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 |
The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||||||
A | 1.70 | % | 1.50 | % | ||||
C | 2.40 | 2.25 | ||||||
Z | 1.40 | 1.25 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential Jennison Global Infrastructure Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 96.8% | ||||||||
COMMON STOCKS | ||||||||
Australia 5.4% | ||||||||
APA Group | 125,367 | $ | 948,152 | |||||
APA Group, 144A | 35,256 | 266,642 | ||||||
Spotless Group Holdings Ltd.* | 640,573 | 1,151,068 | ||||||
Spotless Group Holdings Ltd., 144A* | 89,870 | 161,491 | ||||||
Transurban Group | 177,640 | 1,388,809 | ||||||
Transurban Group, 144A | 9,961 | 77,876 | ||||||
|
| |||||||
3,994,038 | ||||||||
Canada 2.9% | ||||||||
Canadian Pacific Railway Ltd. | 7,356 | 1,402,487 | ||||||
Enbridge, Inc. | 14,402 | 753,657 | ||||||
|
| |||||||
2,156,144 | ||||||||
China 6.8% | ||||||||
Beijing Enterprises Water Group Ltd.* | 1,185,768 | 1,022,655 | ||||||
CGN Power Co. Ltd. (Class H Stock)* | 1,381,096 | 772,818 | ||||||
China Longyuan Power Group Corp. Ltd. (Class H Stock) | 906,791 | 1,123,780 | ||||||
China Merchants Holdings International Co. Ltd. | 242,043 | 1,098,069 | ||||||
Huadian Fuxin Energy Corp. Ltd. (Class H Stock) | 1,827,893 | 983,158 | ||||||
|
| |||||||
5,000,480 | ||||||||
France 6.8% | ||||||||
Eiffage SA | 16,954 | 1,033,896 | ||||||
Groupe Eurotunnel SE | 188,397 | 3,020,489 | ||||||
Veolia Environnement SA | 44,902 | 950,128 | ||||||
|
| |||||||
5,004,513 | ||||||||
Hong Kong 1.5% | ||||||||
HKBN Ltd.* | 696,091 | 899,915 | ||||||
HKBN Ltd., 144A* | 145,329 | 187,883 | ||||||
|
| |||||||
1,087,798 | ||||||||
Italy 6.4% | ||||||||
Atlantia SpA | 96,387 | 2,710,885 | ||||||
Enel SpA | 280,452 | 1,329,328 | ||||||
Telecom Italia SpA* | 600,614 | 708,886 | ||||||
|
| |||||||
4,749,099 |
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Malaysia 0.6% | ||||||||
Malaysia Airports Holdings Bhd | 262,424 | $ | 474,590 | |||||
Mexico 4.8% | ||||||||
Grupo Aeroportuario Del Pacifico SAB de CV (Class B Stock) | 157,564 | 1,119,750 | ||||||
Infraestructura Energetica Nova SAB de CV | 244,601 | 1,427,557 | ||||||
Promotora y Operadora de Infraestructura SAB de CV* | 89,490 | 1,026,609 | ||||||
|
| |||||||
3,573,916 | ||||||||
New Zealand 1.1% | ||||||||
Meridian Energy Ltd. | 503,606 | 772,596 | ||||||
Spain 7.7% | ||||||||
Abengoa Yield PLC | 40,596 | 1,376,610 | ||||||
Endesa SA | 18,098 | 358,582 | ||||||
Endesa SA, 144A | 20,805 | 412,216 | ||||||
Ferrovial SA | 110,572 | 2,507,547 | ||||||
Saeta Yield SA, 144A* | 89,235 | 1,002,978 | ||||||
|
| |||||||
5,657,933 | ||||||||
Switzerland 1.1% | ||||||||
Flughafen Zuerich AG | 1,012 | 788,132 | ||||||
United Kingdom 2.6% | ||||||||
Liberty Global PLC (Class C Stock)* | 21,660 | 1,092,747 | ||||||
National Grid PLC, ADR | 12,325 | 831,075 | ||||||
|
| |||||||
1,923,822 | ||||||||
United States 49.1% | ||||||||
American Tower Corp., REIT | 13,748 | 1,299,598 | ||||||
American Water Works Co., Inc. | 17,093 | 931,910 | ||||||
Cheniere Energy Partners LP Holdings LLC | 41,245 | 1,043,498 | ||||||
Cheniere Energy, Inc.* | 8,581 | 656,361 | ||||||
Columbia Pipeline Partners LP, MLP* | 45,958 | 1,243,164 | ||||||
Crown Castle International Corp., REIT | 15,201 | 1,269,740 | ||||||
CyrusOne, Inc., REIT | 29,649 | 963,000 | ||||||
Dominion Midstream Partners LP, MLP | 18,999 | 776,109 | ||||||
Dominion Resources, Inc. | 16,935 | 1,213,901 | ||||||
Dynegy, Inc.* | 44,983 | 1,496,584 | ||||||
Edison International | 25,203 | 1,535,871 | ||||||
Energy Transfer Equity LP, MLP | 20,936 | 1,395,594 |
See Notes to Financial Statements.
10 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United States (cont’d.) | ||||||||
EQT Midstream Partners LP, MLP | 7,471 | $ | 658,942 | |||||
Exelon Corp. | 33,052 | 1,124,429 | ||||||
Genesee & Wyoming, Inc. (Class A Stock)* | 9,142 | 849,749 | ||||||
Kinder Morgan, Inc. | 27,440 | 1,178,548 | ||||||
MPLX LP, MLP | 14,440 | 1,122,710 | ||||||
NextEra Energy, Inc. | 14,348 | 1,448,144 | ||||||
NiSource, Inc. | 32,417 | 1,407,546 | ||||||
NRG Energy, Inc. | 25,489 | 643,342 | ||||||
NRG Yield, Inc. (Class A Stock) | 27,923 | 1,373,812 | ||||||
PG&E Corp. | 28,787 | 1,523,408 | ||||||
Phillips 66 Partners LP, MLP | 15,292 | 1,159,898 | ||||||
SBA Communications Corp. (Class A Stock)* | 14,315 | 1,657,963 | ||||||
SemGroup Corp. (Class A Stock) | 12,947 | 1,090,008 | ||||||
Sempra Energy | 14,624 | 1,552,630 | ||||||
Shell Midstream Partners LP, MLP | 31,674 | 1,272,978 | ||||||
Terraform Power, Inc. (Class A Stock)* | 42,348 | 1,674,016 | ||||||
Time Warner Cable, Inc. | 5,656 | 879,621 | ||||||
Union Pacific Corp. | 8,403 | 892,651 | ||||||
Williams Cos., Inc. (The) | 18,282 | 935,856 | ||||||
|
| |||||||
36,271,581 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 71,454,642 | ||||||
|
| |||||||
SHORT-TERM INVESTMENT 2.9% | ||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money | 2,186,600 | 2,186,600 | ||||||
|
| |||||||
TOTAL INVESTMENTS 99.7% |
| 73,641,242 | ||||||
Other assets in excess of liabilities 0.3% |
| 201,265 | ||||||
|
| |||||||
NET ASSETS 100.0% |
| $ | 73,842,507 | |||||
|
|
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.
ADR—American Depositary Receipt
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
MLP—Master Limited Partnership
REIT—Real Estate Investment Trust
* | 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 Fund’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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | — | $ | 3,994,038 | $ | — | ||||||
Canada | 2,156,144 | — | — | |||||||||
China | — | 5,000,480 | — | |||||||||
France | — | 5,004,513 | — | |||||||||
Hong Kong | 899,915 | 187,883 | — | |||||||||
Italy | — | 4,749,099 | — | |||||||||
Malaysia | — | 474,590 | — | |||||||||
Mexico | 3,573,916 | — | — | |||||||||
New Zealand | 772,596 | — | — | |||||||||
Spain | 1,376,610 | 4,281,323 | — | |||||||||
Switzerland | — | 788,132 | — | |||||||||
United Kingdom | 1,923,822 | — | — | |||||||||
United States | 36,271,581 | — | — | |||||||||
Affiliated Money Market Mutual Fund | 2,186,600 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 49,161,184 | $ | 24,480,058 | $ | — | ||||||
|
|
|
|
|
|
See Notes to Financial Statements.
12 |
The following is a reconciliation of assets in which unobservable inputs (Level 3) were used in determining fair value:
Common Stock | ||||
Balance as of 10/31/14 | $ | 1,024,974 | ||
Accrued discount/premium | — | |||
Realized gain (loss) | 1,198,842 | |||
Change in unrealized appreciation (depreciation) | (140,895 | ) | ||
Purchases | — | |||
Sales | (2,082,921 | ) | ||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
|
| |||
Balance as of 04/30/15 | $ | — | ||
|
|
It is the Fund’s policy to recognize transfers in and transfers out at the fair value as of the beginning of period. At the reporting period end, securities transferred levels as follows:
Investments | Amount Transferred | Level Transfer | Logic | |||||||
Common Stocks | $ | 1,284,116 | L1 to L2 | Official Close to Model Price |
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2015 was as follows:
Oil, Gas & Consumable Fuels | 18.0 | % | ||
Transportation Infrastructure | 14.5 | |||
Independent Power & Renewable Electricity Producers | 13.5 | |||
Electric Utilities | 10.3 | |||
Multi-Utilities | 10.1 | |||
Construction & Engineering | 6.2 | |||
Real Estate Investment Trusts (REITs) | 4.7 | |||
Road & Rail | 4.2 | |||
Gas Utilities | 3.6 | |||
Affiliated Money Market Mutual Fund | 2.9 | % | ||
Media | 2.7 | |||
Water Utilities | 2.7 | |||
Diversified Telecommunication Services | 2.4 | |||
Wireless Telecommunication Services | 2.2 | |||
Commercial Services & Supplies | 1.7 | |||
|
| |||
99.7 | ||||
Other assets in excess of liabilities | 0.3 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 13 |
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets |
| |||
Investments at value: | ||||
Unaffiliated investments (cost $64,474,761) | $ | 71,454,642 | ||
Affiliated investments (cost $2,186,600) | 2,186,600 | |||
Receivable for investments sold | 738,953 | |||
Receivable for Series shares sold | 170,045 | |||
Dividends receivable | 49,541 | |||
Tax reclaim receivable | 17,800 | |||
Prepaid expenses | 224 | |||
|
| |||
Total assets | 74,617,805 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 583,616 | |||
Payable for Series shares reacquired | 86,946 | |||
Management fee payable | 48,495 | |||
Accrued expenses and other liabilities | 43,352 | |||
Distribution fee payable | 10,537 | |||
Affiliated transfer agent fee payable | 2,352 | |||
|
| |||
Total liabilities | 775,298 | |||
|
| |||
Net Assets | $ | 73,842,507 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 56,918 | ||
Paid-in capital in excess of par | 67,410,961 | |||
|
| |||
67,467,879 | ||||
Distributions in excess of net investment income | (92,709 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (508,750 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 6,976,087 | |||
|
| |||
Net assets, April 30, 2015 | $ | 73,842,507 | ||
|
|
See Notes to Financial Statements.
14 |
Class A |
| |||
Net asset value and redemption price per share, | ||||
($25,011,548 ÷ 1,927,502 shares of common stock issued and outstanding) | $ | 12.98 | ||
Maximum sales charge (5.50% of offering price) | 0.76 | |||
|
| |||
Maximum offering price to public | $ | 13.74 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | ||||
($7,010,851 ÷ 543,287 shares of common stock issued and outstanding) | $ | 12.90 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | ||||
($41,820,108 ÷ 3,221,044 shares of common stock issued and outstanding) | $ | 12.98 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 15 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Income |
| |||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $34,091) | $ | 467,985 | ||
Affiliated dividend income | 1,873 | |||
|
| |||
Total income | 469,858 | |||
|
| |||
Expenses | ||||
Management fee | 321,998 | |||
Distribution fee—Class A | 31,332 | |||
Distribution fee—Class C | 27,725 | |||
Custodian and accounting fees | 43,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $6,400) | 19,000 | |||
Registration fees | 18,000 | |||
Reports to shareholders | 13,000 | |||
Audit fee | 12,000 | |||
Legal fees and expenses | 11,000 | |||
Directors’ fees | 7,000 | |||
Miscellaneous | 6,996 | |||
|
| |||
Total expenses | 511,051 | |||
Less: Management fee waiver and/or expense reimbursement | (49,497 | ) | ||
Distribution fee waiver—Class A | (5,222 | ) | ||
|
| |||
Net expenses | 456,332 | |||
|
| |||
Net investment income | 13,526 | |||
|
| |||
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions | ||||
Net realized loss on: | ||||
Investment transactions | (286,250 | ) | ||
Foreign currency transactions | (2,818 | ) | ||
|
| |||
(289,068 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 3,084,090 | |||
Foreign currencies | (2,445 | ) | ||
|
| |||
3,081,645 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 2,792,577 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 2,806,103 | ||
|
|
See Notes to Financial Statements.
16 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 13,526 | $ | 396,330 | ||||
Net realized loss on investment and foreign currency transactions | (289,068 | ) | (308,944 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 3,081,645 | 3,688,546 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 2,806,103 | 3,775,932 | ||||||
|
|
|
| |||||
Dividends and Distributions (Note 1) | ||||||||
Dividends from net investment income: | ||||||||
Class A | (29,951 | ) | (26,294 | ) | ||||
Class C | — | (3,856 | ) | |||||
Class Z | (88,384 | ) | (267,600 | ) | ||||
|
|
|
| |||||
(118,335 | ) | (297,750 | ) | |||||
|
|
|
| |||||
Distributions from net realized gains: | ||||||||
Class A | — | (188 | ) | |||||
Class C | — | (45 | ) | |||||
Class Z | — | (5,357 | ) | |||||
|
|
|
| |||||
— | (5,590 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 30,171,042 | 53,476,844 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 114,696 | 296,204 | ||||||
Cost of shares reacquired | (10,274,391 | ) | (11,410,715 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 20,011,347 | 42,362,333 | ||||||
|
|
|
| |||||
Total increase | 22,699,115 | 45,834,925 | ||||||
Net Assets: | ||||||||
Beginning of period | 51,143,392 | 5,308,467 | ||||||
|
|
|
| |||||
End of period(a) | $ | 73,842,507 | $ | 51,143,392 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | — | $ | 12,100 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 17 |
Notes to Financial Statements
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 six series: Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund (the “Series”), Prudential Jennison Emerging Markets Equity 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 Jennison Global Infrastructure Fund. The financial statements of the other series are not presented herein.
The investment objective of the Series is to achieve total return.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Series consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly- scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
18 |
Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Prudential Jennison Global Infrastructure Fund | 19 |
Notes to Financial Statements
continued
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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: Subject to guidelines adopted by the Board, the Series may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the 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 Directors of the Series. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
20 |
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 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, forward currency contracts, disposition 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.
REITs: The Series invests in real estate investment trusts (“REITs”), which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from REITs during the year is estimated to be dividend income, capital gain or return of capital and is recorded accordingly. These estimates are adjusted periodically when the actual source of distributions is disclosed by the REITs.
Prudential Jennison Global Infrastructure Fund | 21 |
Notes to Financial Statements
continued
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.
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 quarterly 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.
22 |
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 the subadvisor’s performance of such services. PI 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 1.00% of the average daily net assets of the Series. The effective management fee rate, net of waivers and/or expense reimbursement, was .85%.
PI has contractually agreed, through February 29, 2016, to limit net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, acquired fund fees and expenses, extraordinary and certain other expenses, including taxes, interest and brokerage commissions) of each class of shares to 1.25% of the Series’s 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, C, and Z shares of the Series. The Series compensates PIMS for distributing and servicing the Fund’s Class A and C shares, pursuant to plans of distribution (the “Distribution Plans”) regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor for Class Z shares of the Series.
Prudential Jennison Global Infrastructure Fund | 23 |
Notes to Financial Statements
continued
Pursuant to the Distribution 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, 2015, PIMS contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares.
PIMS has advised the Series that it has received $129,732 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2015. 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, 2015, it has received $2,425 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PI, Jennison 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.
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 portfolio securities, other than short-term investments, for the six months ended April 30, 2015, aggregated $49,886,534 and $30,867,875, respectively.
24 |
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2015 were as follows:
Tax Basis | $ | 66,781,565 | ||
|
| |||
Appreciation | 7,357,506 | |||
Depreciation | (497,829 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 6,859,677 | ||
|
|
The book basis may differ from tax basis due to certain tax-related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2014 of approximately $99,000 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, state and local 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, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Note 6. Capital
The Series offers Class A, C, 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 C shares are sold with a CDSC of 1% on shares redeemed within the first 12 months 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.
Prudential Jennison Global Infrastructure Fund | 25 |
Notes to Financial Statements
continued
There are 525 million authorized shares of common stock at $.01 par value per share, designated Class A, Class C, and Class Z, each of which consists of 200 million, 100 million, and 225 million authorized shares, respectively.
As of April 30, 2015, PI owned 1,014, 1,008 and 509,673 Class A, C and Z shares of the Series, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 1,045,559 | $ | 12,805,088 | |||||
Shares issued in reinvestment of dividends and distributions | 2,217 | 26,312 | ||||||
Shares reacquired | (334,585 | ) | (4,113,060 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 713,191 | 8,718,340 | ||||||
Shares reacquired upon conversion into Class Z | (15,563 | ) | (184,249 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 697,628 | $ | 8,534,091 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 1,489,657 | $ | 18,591,711 | |||||
Shares issued in reinvestment of dividends and distributions | 1,572 | 19,650 | ||||||
Shares reacquired | (263,419 | ) | (3,183,158 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,227,810 | $ | 15,428,203 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 302,338 | $ | 3,702,425 | |||||
Shares reacquired | (63,948 | ) | (778,870 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 238,390 | $ | 2,923,555 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 312,101 | $ | 3,876,606 | |||||
Shares issued in reinvestment of dividends and distributions | 290 | 3,597 | ||||||
Shares reacquired | (11,304 | ) | (137,633 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 301,087 | $ | 3,742,570 | |||||
|
|
|
|
26 |
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 1,116,001 | $ | 13,663,529 | |||||
Shares issued in reinvestment of dividends and distributions | 7,452 | 88,384 | ||||||
Shares reacquired | (436,566 | ) | (5,382,461 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 686,887 | 8,369,452 | ||||||
Shares issued upon conversion from Class A | 15,554 | 184,249 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 702,441 | $ | 8,553,701 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 2,642,919 | $ | 31,008,527 | |||||
Shares issued in reinvestment of dividends and distributions | 22,904 | 272,957 | ||||||
Shares reacquired | (650,889 | ) | (8,089,924 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,014,934 | $ | 23,191,560 | |||||
|
|
|
|
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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 six months ended April 30, 2015.
Note 8. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
Prudential Jennison Global Infrastructure Fund | 27 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | September 25, 2013(b) through October 31, 2013 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $12.62 | $10.42 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income (loss) | - | (g) | .09 | - | (g) | |||||||||||
Net realized and unrealized gain on investments | .38 | 2.26 | .42 | |||||||||||||
Total from investment operations | .38 | 2.35 | .42 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.02 | ) | (.14 | ) | - | |||||||||||
Distributions from net realized gains on investments | - | (.01 | ) | - | ||||||||||||
Total dividends and distributions | (.02 | ) | (.15 | ) | - | |||||||||||
Net asset value, end of period | $12.98 | $12.62 | $10.42 | |||||||||||||
Total Return(a) | 3.01% | 22.67% | 4.20% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $25,012 | $15,521 | $21 | |||||||||||||
Average net assets (000) | $21,061 | $4,906 | $17 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expense after waivers and/or expense reimbursement | 1.50% | (e) | 1.50% | 1.50% | (e) | |||||||||||
Expense before waivers and/or expense reimbursement | 1.70% | (e) | 1.95% | 25.87% | (e) | |||||||||||
Net investment income (loss) | (.05)% | (e) | .73% | .28% | (e) | |||||||||||
Portfolio turnover rate | 49% | (f) | 49% | 10% | (f) |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations.
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Annualized.
(f) Not annualized.
(g) Less than $.005
See Notes to Financial Statements.
28 |
Class C Shares | ||||||||||||||||
Six Months Ended April 30, 2015 | Year Ended | September 25, 2013(b) through October 31, 2013 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $12.58 | $10.41 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income (loss) | (.05 | ) | .01 | .01 | ||||||||||||
Net realized and unrealized gain on investments | .37 | 2.25 | .40 | |||||||||||||
Total from investment operations | .32 | 2.26 | .41 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | - | (.08 | ) | - | ||||||||||||
Distributions from net realized gains on investments | - | (.01 | ) | - | ||||||||||||
Total dividends and distributions | - | (.09 | ) | - | ||||||||||||
Net asset value, end of period | $12.90 | $12.58 | $10.41 | |||||||||||||
Total Return(a) | 2.54% | 21.76% | 4.10% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $7,011 | $3,835 | $40 | |||||||||||||
Average net assets (000) | $5,591 | $1,104 | $17 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expense after waivers and/or expense reimbursement | 2.25% | (e) | 2.25% | 2.25% | (e) | |||||||||||
Expense before waivers and/or expense reimbursement | 2.40% | (e) | 2.70% | 38.05% | (e) | |||||||||||
Net investment income (loss) | (.81)% | (e) | .12% | .52% | (e) | |||||||||||
Portfolio turnover rate | 49% | (f) | 49% | 10% | (f) |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations.
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 29 |
Financial Highlights
(Unaudited) continued
Class Z Shares | ||||||||||||||||
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | September 25, 2013(b) through October 31, 2013 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $12.62 | $10.42 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income | .01 | .22 | .01 | |||||||||||||
Net realized and unrealized gain on investments | .38 | 2.15 | .41 | |||||||||||||
Total from investment operations | .39 | 2.37 | .42 | |||||||||||||
Less Dividends and Distributions: | ||||||||||||||||
Dividends from net investment income | (.03 | ) | (.16 | ) | - | |||||||||||
Distributions from net realized gains on investments | - | (.01 | ) | - | ||||||||||||
Total dividends and distributions | (.03 | ) | (.17 | ) | - | |||||||||||
Net asset value, end of period | $12.98 | $12.62 | $10.42 | |||||||||||||
Total Return(a) | 3.10% | 22.91% | 4.20% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $41,820 | $31,788 | $5,247 | |||||||||||||
Average net assets (000) | $38,282 | $20,117 | $5,113 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expense after waivers and/or expense reimbursement | 1.25% | (e) | 1.25% | 1.25% | (e) | |||||||||||
Expense before waivers and/or expense reimbursement | 1.40% | (e) | 2.08% | 22.65% | (e) | |||||||||||
Net investment income | .22% | (e) | 1.79% | .56% | (e) | |||||||||||
Portfolio turnover rate | 49% | (f) | 49% | 10% | (f) |
(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations.
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
30 |
Results of Proxy Voting
(Unaudited)
At a special meeting of shareholders held on November 26, 2014, shareholders of the Prudential World Fund, Inc., which is comprised of Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund, Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund and Prudential Emerging Markets Debt Local Currency Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:
Proposal: To elect twelve Directors:
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Ellen S. Alberding | ||||||||||||
FOR | 40,430,355.469 | 98.29 | % | 69.20 | % | |||||||
WITHHELD | 703,232.767 | 1.71 | % | 1.20 | % | |||||||
Kevin J. Bannon | ||||||||||||
FOR | 40,500,752.683 | 98.46 | % | 69.32 | % | |||||||
WITHHELD | 632,835.553 | 1.54 | % | 1.08 | % | |||||||
Linda W. Bynoe | ||||||||||||
FOR | 40,463,969.413 | 98.37 | % | 69.25 | % | |||||||
WITHHELD | 669,618.823 | 1.63 | % | 1.15 | % | |||||||
Keith F. Hartstein | ||||||||||||
FOR | 40,502,519.384 | 98.47 | % | 69.32 | % | |||||||
WITHHELD | 631,068.852 | 1.53 | % | 1.08 | % | |||||||
Michael S. Hyland | ||||||||||||
FOR | 40,454,955.187 | 98.35 | % | 69.24 | % | |||||||
WITHHELD | 678,633.049 | 1.65 | % | 1.16 | % | |||||||
Stephen P. Munn | ||||||||||||
FOR | 40,350,089.935 | 98.10 | % | 69.06 | % | |||||||
WITHHELD | 783,498.301 | 1.90 | % | 1.34 | % | |||||||
James E. Quinn | ||||||||||||
FOR | 40,472,965.987 | 98.39 | % | 69.27 | % | |||||||
WITHHELD | 660,622.249 | 1.61 | % | 1.13 | % | |||||||
Richard A. Redeker | ||||||||||||
FOR | 40,445,890.390 | 98.33 | % | 69.22 | % | |||||||
WITHHELD | 687,697.846 | 1.67 | % | 1.18 | % | |||||||
Stephen G. Stoneburn | ||||||||||||
FOR | 40,484,781.265 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 648,806.971 | 1.58 | % | 1.11 | % | |||||||
Grace C. Torres | ||||||||||||
FOR | 40,481,896.899 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 651,691.337 | 1.58 | % | 1.11 | % |
Prudential Jennison Global Infrastructure Fund | 31 |
Results of Proxy Voting
(Unaudited) continued
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Stuart S. Parker | ||||||||||||
FOR | 40,486,057.825 | 98.43 | % | 69.29 | % | |||||||
WITHHELD | 647,530.411 | 1.57 | % | 1.11 | % | |||||||
Scott E. Benjamin | ||||||||||||
FOR | 40,475,216.348 | 98.40 | % | 69.27 | % | |||||||
WITHHELD | 658,371. 888 | 1.60 | % | 1.13 | % |
32 |
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 |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Chad A. Earnst, Chief Compliance Officer • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
| ||||
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 | ||
| ||||
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 Infrastructure 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 INFRASTRUCTURE FUND
SHARE CLASS | A | C | Z | |||
NASDAQ | PGJAX | PGJCX | PGJZX | |||
CUSIP | 743969792 | 743969784 | 743969776 |
MF217E2 0278738-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL EMERGING MARKETS DEBT LOCAL CURRENCY FUND
SEMIANNUAL REPORT · APRIL 30, 2015
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Prudential Fixed Income is a unit of Prudential Investment Management, Inc. (PIM), a registered investment adviser. PIMS and PIM are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
![]() |
PRUDENTIAL WORLD FUND, INC.
Prudential Emerging Markets Debt Local Currency Fund
Supplement dated March 9, 2015 to the
Currently Effective Prospectus
In an effort to further enhance the trading capabilities of the Prudential Emerging Markets Debt Local Currency Fund (the “Fund”), a series of Prudential World Fund, Inc., the Board of Directors has approved the addition of Pramerica Investment Management Limited (“PIML”), an indirect, wholly-owned subsidiary of Prudential Investment Management, Inc. (“PIM”), as a sub-subadviser to the Fund. PIM will continue to serve as the Fund’s subadviser with PIML providing investment advisory services with respect to securities in certain foreign markets.
To reflect this change, the Prospectus is revised as follows, effective on March 9, 2015:
I. | In the section of the Prospectus entitled Fund Summary – Management of the Fund, the following footnote is hereby added beneath the chart: |
Pramerica Investment Management Limited (PIML), an indirect wholly-owned subsidiary of Prudential Investment Management, Inc., serves as a sub-subadviser to the Fund. |
II. | In the section of the Prospectus entitled How the Fund is Managed – Investment Subadviser, the following is hereby added: |
Pramerica Investment Management Limited (PIML), an indirect wholly-owned subsidiary of PIM, serves as a sub-subadviser to the Fund pursuant to a sub-subadvisory agreement with PIM. PIML is located at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PIML provides investment advisory services with respect to securities in certain foreign markets. As of October 2014, PIML managed approximately $18.4 billion in assets. |
LR735
June 15, 2015
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, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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
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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 |
| |||||||||||
Six Months | One Year | Since Inception | ||||||||||
Class A | –7.07 | % | –7.94 | % | –7.81% (3/30/11) | |||||||
Class C | –7.48 | –8.80 | –9.91 (3/30/11) | |||||||||
Class Q | –6.94 | –7.70 | –6.37 (3/30/11) | |||||||||
Class Z | –6.89 | –7.76 | –6.46 (3/30/11) | |||||||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | –8.24 | –9.35 | –5.41 | |||||||||
Lipper Emerging Markets Local Currency Debt Funds Average | –7.02 | –8.09 | –5.17 | |||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 |
| |||||||||||
One Year | Since Inception | |||||||||||
Class A | –13.81 | % | –3.89% (3/30/11) | |||||||||
Class C | –11.32 | –3.28 (3/30/11) | ||||||||||
Class Q | –9.40 | –2.37 (3/30/11) | ||||||||||
Class Z | –9.33 | –2.39 (3/30/11) | ||||||||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | –11.14 | –2.09 | ||||||||||
Lipper Emerging Markets Local Currency Debt Funds Average | –9.70 | –2.02 |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
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The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Q | Class Z | |||||
Maximum initial sales charge | 4.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .25% | 1% | None | None |
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 Local Currency Debt Funds Average
The Lipper Emerging Markets Local Currency Debt Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Emerging Markets Local Currency Debt Funds category for the periods noted. Funds in the Lipper Average seek either current income or total return by investing at least 65% of total assets in debt issues denominated in the currency of their market of issuance. “Emerging market” is defined by a country’s GNP per capita or other economic measures.
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. The Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the inception date for the indicated share class.
Distributions and Yields as of 4/30/15 |
| |||||||
Total Distributions Paid for Six Months | 30-Day SEC Yield | |||||||
Class A | $ | 0.21 | 6.52 | % | ||||
Class C | 0.19 | 6.04 | ||||||
Class Q | 0.23 | 7.13 | ||||||
Class Z | 0.22 | 7.01 |
Prudential Emerging Markets Debt Local Currency Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 |
| |||
South Africa Government Bond, (South Africa), Sr. Unsec’d. Notes, Ser. R209, 6.250%, 03/31/2036 | 4.9 | % | ||
Poland Government Bond, (Poland), Bonds, Ser. 0725, 3.250%, 07/25/2025 | 4.3 | |||
Colombian TES, (Colombia), Bonds, Ser. B, 6.000%, 04/28/2028 | 3.6 | |||
Turkey Government Bond, (Turkey), Bonds, 8.500%, 09/14/2022 | 2.8 | |||
Mexican Bonos, (Mexico), Bonds, Ser. M, 7.750%, 05/29/2031 | 2.8 |
Holdings reflect only long-term investments and are subject to change.
Credit Quality expressed as a percentage of total investments as of 4/30/15 |
| |||
AA | 0.09 | % | ||
A | 27.45 | |||
BBB | 55.29 | |||
BB | 6.37 | |||
B | 0.63 | |||
CCC | 1.64 | |||
Not Rated | 0.04 | |||
Cash/Cash Equivalents | 8.49 | |||
Total Investments | 100.00 | % |
Source: PIM
Credit ratings reflect the highest rating assigned by Moody’s Investor Service, Inc. (Moody’s), Standard & Poor’s (S&P) or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, Moody’s ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. The Not Rated category consists of securities that have not been rated by Moody’s, S&P or Fitch. Credit ratings 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, 2014, at the beginning of the period, and held through the six-month period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of
Prudential Emerging Markets Debt Local Currency Fund | 5 |
Fees and Expenses (continued)
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.
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, 2014 | Ending Account April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 929.30 | 1.30 | % | $ | 6.22 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.35 | 1.30 | % | $ | 6.51 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 925.20 | 2.05 | % | $ | 9.79 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.63 | 2.05 | % | $ | 10.24 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 930.60 | 1.05 | % | $ | 5.03 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.59 | 1.05 | % | $ | 5.26 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 931.10 | 1.05 | % | $ | 5.03 | |||||||||
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, 2015, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2015 (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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The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||
A | 2.39% | 1.30% | ||
C | 3.09 | 2.05 | ||
Q | 1.95 | 1.05 | ||
Z | 2.09 | 1.05 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential Emerging Markets Debt Local Currency Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
LONG-TERM INVESTMENTS 89.8% | ||||||||||||||
FOREIGN BONDS | ||||||||||||||
Argentina 0.9% | ||||||||||||||
Argentina Boden Bonds, | 7.000% | 10/03/15 | 290 | $ | 284,281 | |||||||||
Brazil 9.4% | ||||||||||||||
Brazil Notas do Tesouro Nacionalie, | ||||||||||||||
Notes, Ser. NTNB | 6.000 | 08/15/50 | BRL | 307 | 266,758 | |||||||||
Notes, Ser. NTNF | 10.000 | 01/01/18 | BRL | 698 | 216,191 | |||||||||
Notes, Ser. NTNF | 10.000 | 01/01/19 | BRL | 380 | 115,649 | |||||||||
Notes, Ser. NTNF | 10.000 | 01/01/21 | BRL | 2,869 | 847,980 | |||||||||
Notes, Ser. NTNF | 10.000 | 01/01/23 | BRL | 1,617 | 466,622 | |||||||||
Notes, Ser. NTNF | 10.000 | 01/01/25 | BRL | 1,360 | 383,737 | |||||||||
Sr. Notes, Ser. NTNF | 10.000 | 01/01/17 | BRL | 2,345 | 739,673 | |||||||||
Brazilian Government International Bond, | 8.500 | 01/05/24 | BRL | 54 | 18,236 | |||||||||
Itau Unibanco Holding SA, | 10.500 | 11/23/15 | BRL | 300 | 97,181 | |||||||||
|
| |||||||||||||
3,152,027 | ||||||||||||||
Colombia 5.7% | ||||||||||||||
Colombia Government International Bond, | 9.850 | 06/28/27 | COP | 97,000 | 53,387 | |||||||||
Colombian TES, | ||||||||||||||
Bonds, Ser. B | 6.000 | 04/28/28 | COP | 3,188,600 | 1,193,619 | |||||||||
Bonds, Ser. B | 7.500 | 08/26/26 | COP | 1,078,600 | 468,804 | |||||||||
Bonds, Ser. B | 10.000 | 07/24/24 | COP | 348,500 | 178,566 | |||||||||
|
| |||||||||||||
1,894,376 | ||||||||||||||
Dominican Republic 0.6% | ||||||||||||||
Dominican Republic International Bond, | 9.040 | 01/23/18 | 190 | 205,868 | ||||||||||
Hungary 4.5% | ||||||||||||||
Hungary Government Bond, | ||||||||||||||
Bonds, Ser. 19/A | 6.500 | 06/24/19 | HUF | 78,500 | 331,910 | |||||||||
Bonds, Ser. 23/A | 6.000 | 11/24/23 | HUF | 165,000 | 726,031 | |||||||||
Bonds, Ser. 25/B | 5.500 | 06/24/25 | HUF | 40,850 | 175,762 | |||||||||
Hungary Government International Bond, | 4.125 | 02/19/18 | 80 | 83,500 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||
Hungary (cont’d.) | ||||||||||||||
Magyar Export-Import Bank Zrt, | 4.000% | 01/30/20 | 200 | $ | 203,500 | |||||||||
|
| |||||||||||||
1,520,703 | ||||||||||||||
Indonesia 10.5% | ||||||||||||||
Berau Capital Resources Pte Ltd., | 12.500 | 07/08/15 | 145 | 78,880 | ||||||||||
Indonesia Treasury Bond, | ||||||||||||||
Sr. Unsec’d. Notes, Ser. FR53 | 8.250 | 07/15/21 | IDR | 4,000,000 | 316,081 | |||||||||
Sr. Unsec’d. Notes, Ser. FR56 | 8.375 | 09/15/26 | IDR | 1,000,000 | 79,846 | |||||||||
Sr. Unsec’d. Notes, Ser. FR58 | 8.250 | 06/15/32 | IDR | 1,700,000 | 133,443 | |||||||||
Sr. Unsec’d. Notes, Ser. FR59 | 7.000 | 05/15/27 | IDR | 3,800,000 | 273,659 | |||||||||
Sr. Unsec’d. Notes, Ser. FR61 | 7.000 | 05/15/22 | IDR | 2,000,000 | 148,505 | |||||||||
Sr. Unsec’d. Notes, Ser. FR63 | 5.625 | 05/15/23 | IDR | 3,100,000 | 209,855 | |||||||||
Sr. Unsec’d. Notes, Ser. FR65 | 6.625 | 05/15/33 | IDR | 5,700,000 | 379,267 | |||||||||
Sr. Unsec’d. Notes, Ser. FR67 | 8.750 | 02/15/44 | IDR | 2,700,000 | 223,915 | |||||||||
Sr. Unsec’d. Notes, Ser. FR68 | 8.375 | 03/15/34 | IDR | 3,100,000 | 246,924 | |||||||||
Sr. Unsec’d. Notes, Ser. FR70 | 8.375 | 03/15/24 | IDR | 9,200,000 | 739,903 | |||||||||
Sr. Unsec’d. Notes, Ser. FR71 | 9.000 | 03/15/29 | IDR | 4,400,000 | 370,839 | |||||||||
Majapahit Holding BV, Sr. Unsec’d. Notes, RegS | 7.750 | 01/20/20 | 100 | 117,392 | ||||||||||
Majapahit Holding BV, Sr. Unsec’d. Notes, RegS | 8.000 | 08/07/19 | 160 | 187,408 | ||||||||||
|
| |||||||||||||
3,505,917 | ||||||||||||||
Kazakhstan 0.9% | ||||||||||||||
KazMunayGas National Co. JSC, | 9.125 | 07/02/18 | 260 | 293,930 | ||||||||||
Lithuania 0.9% | ||||||||||||||
Lithuania Government International Bond, | 7.375 | 02/11/20 | 250 | 303,500 | ||||||||||
Luxembourg 0.6% | ||||||||||||||
Millicom International Cellular SA, | 4.750 | 05/22/20 | 200 | 197,000 | ||||||||||
Malaysia 4.8% | ||||||||||||||
Malaysia Government Bond, | ||||||||||||||
Sr. Unsec’d. Notes, Ser. 0111 | 4.160 | 07/15/21 | MYR | 265 | 76,121 | |||||||||
Sr. Unsec’d. Notes, Ser. 0114 | 4.181 | 07/15/24 | MYR | 600 | 172,380 |
See Notes to Financial Statements.
10 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||
Malaysia (cont’d.) | ||||||||||||||
Malaysia Government Bond, (cont’d.) | ||||||||||||||
Sr. Unsec’d. Notes, Ser. 0115 | 3.955% | 09/15/25 | MYR | 680 | $ | 192,472 | ||||||||
Sr. Unsec’d. Notes, Ser. 0412 | 4.127 | 04/15/32 | MYR | 1,800 | 505,318 | |||||||||
Sr. Unsec’d. Notes, Ser. 0413 | 3.844 | 04/15/33 | MYR | 850 | 228,886 | |||||||||
Sr. Unsec’d. Notes, Ser. 0414 | 3.654 | 10/31/19 | MYR | 950 | 267,550 | |||||||||
Sr. Unsec’d. Notes, Ser. 0612 | 3.492 | 03/31/20 | MYR | 530 | 147,738 | |||||||||
|
| |||||||||||||
1,590,465 | ||||||||||||||
Mexico 11.7% | ||||||||||||||
America Movil SAB de CV, | 6.450 | 12/05/22 | MXN | 7,500 | 473,895 | |||||||||
Cemex SAB de CV, | 9.500 | 06/15/18 | 200 | 222,000 | ||||||||||
Mexican Bonos, | ||||||||||||||
Bonds, Ser. M | 6.250 | 06/16/16 | MXN | 1,970 | 132,034 | |||||||||
Bonds, Ser. M | 6.500 | 06/09/22 | MXN | 1,525 | 103,864 | |||||||||
Bonds, Ser. M | 7.750 | 05/29/31 | MXN | 12,588 | 936,878 | |||||||||
Bonds, Ser. M | 8.000 | 12/07/23 | MXN | 9,000 | 669,101 | |||||||||
Bonds, Ser. M-10 | 8.500 | 12/13/18 | MXN | 1,460 | 106,228 | |||||||||
Bonds, Ser. M-20 | 7.500 | 06/03/27 | MXN | 3,900 | 282,682 | |||||||||
Bonds, Ser. M-30 | 10.000 | 11/20/36 | MXN | 3,290 | 303,686 | |||||||||
Petroleos Mexicanos, | 7.650 3.500 | | 11/24/21 07/18/18 | | MXN | 4,120 400 | | | 275,881 412,500 | | ||||
|
| |||||||||||||
3,918,749 | ||||||||||||||
Nigeria 1.4% | ||||||||||||||
Nigeria Government Bond, | ||||||||||||||
Bonds, Ser. 5YR | 15.100 | 04/27/17 | NGN | 35,370 | 180,849 | |||||||||
Bonds, Ser. 7 | 16.000 | 06/29/19 | NGN | 25,215 | 134,248 | |||||||||
Bonds, Ser. 10YR | 7.000 | 10/23/19 | NGN | 42,000 | 162,745 | |||||||||
|
| |||||||||||||
477,842 | ||||||||||||||
Peru 2.1% | ||||||||||||||
Peruvian Government International Bond, Bonds | 6.950 | 08/12/31 | PEN | 190 | 62,787 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||
Peru (cont’d.) | ||||||||||||||
Sr. Unsec’d. Notes, RegS | 6.950% | 08/12/31 | PEN | 1,910 | $ | 631,173 | ||||||||
|
| |||||||||||||
693,960 | ||||||||||||||
Philippines 0.8% | ||||||||||||||
Philippine Government International Bond, | 6.250 | 01/14/36 | PHP | 10,000 | 263,081 | |||||||||
Poland 4.8% | ||||||||||||||
Poland Government Bond, | ||||||||||||||
Bonds, Ser. 0725 | 3.250 | 07/25/25 | PLN | 4,925 | 1,440,212 | |||||||||
Bonds, Ser. 1023 | 4.000 | 10/25/23 | PLN | 540 | 166,252 | |||||||||
|
| |||||||||||||
1,606,464 | ||||||||||||||
Romania 1.4% | ||||||||||||||
Romania Government Bond, | ||||||||||||||
Bonds, Ser.10Y | 5.850 | 04/26/23 | RON | 720 | 216,901 | |||||||||
Bonds, Ser.10YR | 6.750 | 06/11/17 | RON | 850 | 237,797 | |||||||||
|
| |||||||||||||
454,698 | ||||||||||||||
Russia 8.4% | ||||||||||||||
AHML Finance Ltd., Unsec’d. Notes, 144A | 7.750 | 02/13/18 | RUB | 12,250 | 203,769 | |||||||||
Gazprom OAO Via Gaz Capital SA, | 9.250 | 04/23/19 | 230 | 255,185 | ||||||||||
Russian Agricultural Bank OJSC Via RSHB Capital SA, | 8.700 | 03/17/16 | RUB | 23,500 | 437,052 | |||||||||
Sr. Unsec’d. Notes, RegS | 8.625 | 02/17/17 | RUB | 10,400 | 183,691 | |||||||||
Russian Federal Bond - OFZ, | 6.200 | 01/31/18 | RUB | 10,810 | 186,882 | |||||||||
Bonds, Ser. 6205 | 7.600 | 04/14/21 | RUB | 1,000 | 16,909 | |||||||||
Bonds, Ser. 6212 | 7.050 | 01/19/28 | RUB | 26,823 | 398,413 | |||||||||
Bonds, Ser. 6216 | 6.700 | 05/15/19 | RUB | 4,400 | 74,017 | |||||||||
Russian Foreign Bond - Eurobond, | 11.000 | 07/24/18 | 230 | 280,869 | ||||||||||
Russian Railways via RZD Capital PLC, | 8.300 | 04/02/19 | RUB | 30,200 | 503,099 | |||||||||
VimpelCom Holdings BV, Gtd. Notes, 144A | 9.000 | 02/13/18 | RUB | 5,000 | 86,804 |
See Notes to Financial Statements.
12 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||
Russia (cont’d.) | ||||||||||||||
Vnesheconombank Via VEB Finance PLC, | 4.224% | 11/21/18 | 200 | $ | 180,500 | |||||||||
|
| |||||||||||||
2,807,190 | ||||||||||||||
South Africa 7.9% | ||||||||||||||
Eskom Holdings SOC Ltd., Govt. Gtd., | 10.000 | 01/25/23 | ZAR | 7,500 | 685,425 | |||||||||
South Africa Government Bond, | 7.000 | 02/28/31 | ZAR | 4,710 | 346,710 | |||||||||
Sr. Unsec’d. Notes, Ser. R209 | 6.250 | 03/31/36 | ZAR | 24,811 | 1,623,659 | |||||||||
|
| |||||||||||||
2,655,794 | ||||||||||||||
South Korea 0.1% | ||||||||||||||
Export-Import Bank Of Korea, | 0.500 | 01/25/17 | TRY | 100 | 31,237 | |||||||||
Thailand 3.4% | ||||||||||||||
Thailand Government Bond, | 3.580 | 12/17/27 | THB | 2,400 | 79,263 | |||||||||
Sr. Unsec’d. Notes | 3.625 | 06/16/23 | THB | 1,477 | 48,777 | |||||||||
Sr. Unsec’d. Notes | 3.775 | 06/25/32 | THB | 600 | 19,222 | |||||||||
Sr. Unsec’d. Notes | 3.875 | 06/13/19 | THB | 5,000 | 163,272 | |||||||||
Sr. Unsec’d. Notes | 4.875 | 06/22/29 | THB | 9,350 | 351,753 | |||||||||
Sr. Unsec’d. Notes | 5.670 | 03/13/28 | THB | 5,000 | 198,082 | |||||||||
Sr. Unsec’d. Notes - Inflation Linked, RegS | 1.200 | 07/14/21 | THB | 5,832 | 171,758 | |||||||||
Unsec’d. Notes - Inflation Linked, RegS | 1.250 | 03/12/28 | THB | 4,069 | 113,125 | |||||||||
|
| |||||||||||||
1,145,252 | ||||||||||||||
Turkey 8.5% | ||||||||||||||
Turkey Government Bond, | 7.100 | 03/08/23 | TRY | 1,435 | 473,036 | |||||||||
Bonds | 8.500 | 07/10/19 | TRY | 495 | 179,471 | |||||||||
Bonds | 8.500 | 09/14/22 | TRY | 2,625 | 946,605 | |||||||||
Bonds | 8.800 | 11/14/18 | TRY | 200 | 73,374 | |||||||||
Bonds | 8.800 | 09/27/23 | TRY | 1,570 | 573,344 | |||||||||
Bonds | 9.000 | 07/24/24 | TRY | 350 | 130,304 | |||||||||
Bonds | 9.500 | 01/12/22 | TRY | 415 | 156,832 | |||||||||
Bonds | 10.500 | 01/15/20 | TRY | 520 | 204,685 | |||||||||
Bonds, Series 5Y | 6.300 | 02/14/18 | TRY | 350 | 120,809 | |||||||||
|
| |||||||||||||
2,858,460 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 13 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||
Uruguay | ||||||||||||||
Uruguay Government International Bond, | 4.375% | 12/15/28 | UYU | 265 | $ | 10,058 | ||||||||
Venezuela 0.5% | ||||||||||||||
Petroleos de Venezuela SA, Gtd. Notes, RegS | 8.500 | 11/02/17 | 55 | 42,543 | ||||||||||
Venezuela Government International Bond, | ||||||||||||||
Sr. Unsec’d. Notes | 9.250 | 09/15/27 | 200 | 98,000 | ||||||||||
Sr. Unsec’d. Notes, RegS | 5.750 | 02/26/16 | 40 | 34,000 | ||||||||||
|
| |||||||||||||
174,543 | ||||||||||||||
|
| |||||||||||||
TOTAL LONG-TERM INVESTMENTS | 30,045,395 | |||||||||||||
|
| |||||||||||||
SHORT-TERM INVESTMENT 9.7% | ||||||||||||||
Shares | ||||||||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | 3,238,603 | 3,238,603 | ||||||||||||
|
| |||||||||||||
TOTAL INVESTMENTS 99.5% | 33,283,998 | |||||||||||||
Other assets in excess of liabilities(b) 0.5% | 170,482 | |||||||||||||
|
| |||||||||||||
NET ASSETS 100.0% | $ | 33,454,480 | ||||||||||||
|
|
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.
LIBOR—London Interbank Offered Rate
MTN—Medium Term Note
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.
WIBOR—Warsaw Interbank Offered Rate
BRL—Brazilian Real
CAD—Canadian Dollar
See Notes to Financial Statements.
14 |
CHF—Swiss Franc
CLP—Chilean Peso
COP—Colombian Peso
EUR—Euro
HUF—Hungarian Forint
IDR—Indonesian Rupiah
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
NGN—Nigerian Naira
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RON—Romanian Leu
RUB—Russian Ruble
THB—Thai Baht
TRY—Turkish Lira
TWD—New Taiwanese Dollar
USD—United States Dollar
UYU—Uruguayan Peso
ZAR—South African Rand
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(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. |
(b) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end: |
Forward foreign currency exchange contracts outstanding at April 30, 2015:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Brazilian Real, | ||||||||||||||||||
Expiring 06/26/2015 | Bank of America | BRL | 250 | $ | 77,927 | $ | 81,315 | $ | 3,388 | |||||||||
Expiring 06/26/2015 | Barclays Capital Group | BRL | 893 | 271,000 | 290,550 | 19,550 | ||||||||||||
Expiring 06/26/2015 | Citigroup Global Markets | BRL | 518 | 160,422 | 168,623 | 8,201 | ||||||||||||
Expiring 07/14/2015 | Barclays Capital Group | BRL | 455 | 141,365 | 147,113 | 5,748 | ||||||||||||
Expiring 07/14/2015 | Toronto Dominion | BRL | 182 | 60,850 | 58,857 | (1,993 | ) | |||||||||||
Canadian Dollar, | ||||||||||||||||||
Expiring 05/11/2015 | JPMorgan Chase | CAD | 191 | 154,000 | 158,670 | 4,670 | ||||||||||||
Expiring 07/16/2015 | BNP Paribas | CAD | 37 | 30,391 | 30,299 | (92 | ) | |||||||||||
Expiring 07/16/2015 | Citigroup Global Markets | CAD | 184 | 151,000 | 152,627 | 1,627 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 15 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Expiring 07/16/2015 | Citigroup Global Markets | CAD | 187 | $ | 152,617 | $ | 154,823 | $ | 2,206 | |||||||||
Expiring 07/16/2015 | Citigroup Global Markets | CAD | 224 | 185,000 | 185,832 | 832 | ||||||||||||
Colombian Peso, | ||||||||||||||||||
Expiring 05/22/2015 | Barclays Capital Group | COP | 305,965 | 118,499 | 128,159 | 9,660 | ||||||||||||
Expiring 05/22/2015 | BNP Paribas | COP | 635,154 | 242,703 | 266,046 | 23,343 | ||||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 431,540 | 162,600 | 180,758 | 18,158 | ||||||||||||
Expiring 05/22/2015 | Credit Suisse First Boston Corp. | COP | 193,894 | 77,822 | 81,216 | 3,394 | ||||||||||||
Expiring 05/22/2015 | Goldman Sachs & Co. | COP | 535,864 | 223,091 | 224,456 | 1,365 | ||||||||||||
Expiring 05/22/2015 | Goldman Sachs & Co. | COP | 633,343 | 243,781 | 265,287 | 21,506 | ||||||||||||
Euro, | ||||||||||||||||||
Expiring 07/23/2015 | Citigroup Global Markets | EUR | 277 | 305,399 | 311,388 | 5,989 | ||||||||||||
Expiring 07/28/2015 | Barclays Capital Group | EUR | 664 | 719,516 | 746,903 | 27,387 | ||||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 179 | 199,771 | 201,236 | 1,465 | ||||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 210 | 227,979 | 236,087 | 8,108 | ||||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 241 | 269,065 | 270,938 | 1,873 | ||||||||||||
Expiring 07/28/2015 | JPMorgan Chase | EUR | 51 | 56,294 | 57,550 | 1,256 | ||||||||||||
Hungarian Forint, | ||||||||||||||||||
Expiring 07/22/2015 | Barclays Capital Group | HUF | 42,011 | 153,125 | 155,002 | 1,877 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | HUF | 21,811 | 79,064 | 80,475 | 1,411 | ||||||||||||
Expiring 07/22/2015 | Deutsche Bank AG | HUF | 22,116 | 80,512 | 81,599 | 1,087 | ||||||||||||
Indian Rupee, | ||||||||||||||||||
Expiring 05/11/2015 | Credit Suisse First Boston Corp. | INR | 4,884 | 77,615 | 76,702 | (913 | ) | |||||||||||
Expiring 07/24/2015 | Goldman Sachs & Co. | INR | 9,905 | 154,930 | 153,195 | (1,735 | ) | |||||||||||
Expiring 07/24/2015 | UBS AG | INR | 1,479 | 23,058 | 22,868 | (190 | ) | |||||||||||
Indonesia Rupiah, | ||||||||||||||||||
Expiring 06/19/2015 | JPMorgan Chase | IDR | 697,713 | 52,638 | 53,245 | 607 | ||||||||||||
Expiring 07/10/2015 | Barclays Capital Group | IDR | 3,786,736 | 286,982 | 287,549 | 567 | ||||||||||||
Malaysian Ringgit, | ||||||||||||||||||
Expiring 05/18/2015 | Barclays Capital Group | MYR | 296 | 79,550 | 82,882 | 3,332 | ||||||||||||
Expiring 05/18/2015 | Barclays Capital Group | MYR | 2,754 | 737,118 | 772,060 | 34,942 | ||||||||||||
Expiring 05/18/2015 | Credit Suisse First Boston Corp. | MYR | 56 | 15,198 | 15,818 | 620 | ||||||||||||
Expiring 05/18/2015 | Deutsche Bank AG | MYR | 419 | 118,478 | 117,446 | (1,032 | ) | |||||||||||
Expiring 05/18/2015 | UBS AG | MYR | 63 | 16,746 | 17,602 | 856 | ||||||||||||
Expiring 05/18/2015 | UBS AG | MYR | 301 | 85,327 | 84,342 | (985 | ) | |||||||||||
Expiring 05/18/2015 | UBS AG | MYR | 2,754 | 743,164 | 772,060 | 28,896 | ||||||||||||
Mexican Peso, | ||||||||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 1,159 | 74,678 | 75,098 | 420 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 1,403 | 90,812 | 90,870 | 58 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 2,339 | 152,861 | 151,573 | (1,288 | ) |
See Notes to Financial Statements.
16 |
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 2,340 | $ | 152,001 | $ | 151,609 | $ | (392 | ) | ||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 2,773 | 179,000 | 179,658 | 658 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 3,516 | 228,000 | 227,785 | (215 | ) | |||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 3,723 | 240,492 | 241,217 | 725 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 5,627 | 368,230 | 364,570 | (3,660 | ) | |||||||||||
Nigerian Naira, | ||||||||||||||||||
Expiring 06/26/2015 | Barclays Capital Group | NGN | 9,615 | 47,155 | 47,527 | 372 | ||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||
Expiring 06/11/2015 | Barclays Capital Group | PEN | 104 | 33,125 | 32,894 | (231 | ) | |||||||||||
Expiring 06/11/2015 | BNP Paribas | PEN | 549 | 175,745 | 174,100 | (1,645 | ) | |||||||||||
Philippine Peso, | ||||||||||||||||||
Expiring 05/11/2015 | UBS AG | PHP | 5,400 | 121,168 | 121,183 | 15 | ||||||||||||
Expiring 05/11/2015 | UBS AG | PHP | 5,420 | 122,571 | 121,638 | (933 | ) | |||||||||||
Expiring 08/11/2015 | JPMorgan Chase | PHP | 1,812 | 40,847 | 40,430 | (417 | ) | |||||||||||
Polish Zloty, | ||||||||||||||||||
Expiring 07/23/2015 | Citigroup Global Markets | PLN | 4,239 | 1,136,576 | 1,174,276 | 37,700 | ||||||||||||
Expiring 07/23/2015 | UBS AG | PLN | 909 | 248,777 | 251,915 | 3,138 | ||||||||||||
Romanian Leu, | ||||||||||||||||||
Expiring 07/23/2015 | Deutsche Bank AG | RON | 303 | 75,862 | 76,711 | 849 | ||||||||||||
Expiring 07/23/2015 | Deutsche Bank AG | RON | 1,343 | 322,706 | 340,360 | 17,654 | ||||||||||||
Russian Ruble, | ||||||||||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 4,659 | 74,485 | 89,074 | 14,589 | ||||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 6,648 | 122,999 | 127,103 | 4,104 | ||||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 10,120 | 162,751 | 193,478 | 30,727 | ||||||||||||
Expiring 06/10/2015 | JPMorgan Chase | RUB | 3,851 | 73,633 | 73,626 | (7 | ) | |||||||||||
South African Rand, | ||||||||||||||||||
Expiring 07/20/2015 | Citigroup Global Markets | ZAR | 489 | 40,361 | 40,514 | 153 | ||||||||||||
Expiring 07/20/2015 | Citigroup Global Markets | ZAR | 937 | 75,522 | 77,662 | 2,140 | ||||||||||||
Expiring 07/20/2015 | Citigroup Global Markets | ZAR | 2,447 | 204,000 | 202,867 | (1,133 | ) | |||||||||||
Expiring 07/20/2015 | Deutsche Bank AG | ZAR | 2,475 | 206,652 | 205,208 | (1,444 | ) | |||||||||||
South Korean Won, | ||||||||||||||||||
Expiring 06/11/2015 | BNP Paribas | KRW | 168,360 | 149,654 | 156,861 | 7,207 | ||||||||||||
Expiring 06/11/2015 | BNP Paribas | KRW | 180,091 | 164,617 | 167,791 | 3,174 | ||||||||||||
Thai Baht, | ||||||||||||||||||
Expiring 07/22/2015 | Barclays Capital Group | THB | 3,462 | 104,265 | 104,766 | 501 | ||||||||||||
Expiring 07/22/2015 | Barclays Capital Group | THB | 4,817 | 147,915 | 145,752 | (2,163 | ) | |||||||||||
Turkish Lira, | ||||||||||||||||||
Expiring 07/24/2015 | Citigroup Global Markets | TRY | 812 | 298,959 | 296,454 | (2,505 | ) | |||||||||||
Expiring 07/24/2015 | Hong Kong & Shanghai Bank | TRY | 1,660 | 600,060 | 605,840 | 5,780 | ||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 13,171,076 | $ | 13,521,988 | $ | 350,912 | |||||||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 17 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Brazilian Real, | ||||||||||||||||||
Expiring 06/26/2015 | Barclays Capital Group | BRL | 456 | $ | 150,058 | $ | 148,291 | $ | 1,767 | |||||||||
Expiring 06/26/2015 | Barclays Capital Group | BRL | 200 | 64,993 | 65,144 | (151 | ) | |||||||||||
Expiring 06/26/2015 | Barclays Capital Group | BRL | 195 | 63,600 | 63,499 | 101 | ||||||||||||
Expiring 06/26/2015 | Barclays Capital Group | BRL | 79 | 24,447 | 25,796 | (1,349 | ) | |||||||||||
Expiring 06/26/2015 | Credit Suisse First Boston Corp. | BRL | 708 | 232,075 | 230,248 | 1,827 | ||||||||||||
Expiring 07/14/2015 | Barclays Capital Group | BRL | 80 | 26,581 | 25,882 | 699 | ||||||||||||
Expiring 07/14/2015 | Citigroup Global Markets | BRL | 561 | 197,358 | 181,494 | 15,864 | ||||||||||||
Expiring 07/14/2015 | Deutsche Bank AG | BRL | 74 | 23,366 | 23,886 | (520 | ) | |||||||||||
Canadian Dollar, | ||||||||||||||||||
Expiring 05/11/2015 | Citigroup Global Markets | CAD | 191 | 157,346 | 158,670 | (1,324 | ) | |||||||||||
Expiring 07/16/2015 | Citigroup Global Markets | CAD | 224 | 185,000 | 185,421 | (421 | ) | |||||||||||
Expiring 07/16/2015 | JPMorgan Chase | CAD | 202 | 168,615 | 167,304 | 1,311 | ||||||||||||
Chilean Peso, | ||||||||||||||||||
Expiring 05/11/2015 | Barclays Capital Group | CLP | 201,820 | 329,824 | 329,592 | 232 | ||||||||||||
Expiring 05/11/2015 | UBS AG | CLP | 19,943 | 32,812 | 32,569 | 243 | ||||||||||||
Colombian Peso, | ||||||||||||||||||
Expiring 05/22/2015 | Barclays Capital Group | COP | 344,745 | 134,077 | 144,403 | (10,326 | ) | |||||||||||
Expiring 05/22/2015 | Barclays Capital Group | COP | 125,986 | 48,182 | 52,772 | (4,590 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 220,097 | 88,570 | 92,191 | (3,621 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 200,784 | 83,660 | 84,102 | (442 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 200,784 | 83,417 | 84,102 | (685 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 194,042 | 77,369 | 81,278 | (3,909 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 163,625 | 67,052 | 68,537 | (1,485 | ) | |||||||||||
Expiring 05/22/2015 | Citigroup Global Markets | COP | 102,163 | 40,413 | 42,793 | (2,380 | ) | |||||||||||
Expiring 05/22/2015 | Credit Suisse First Boston Corp. | COP | 189,836 | 76,365 | 79,516 | (3,151 | ) | |||||||||||
Expiring 05/22/2015 | Deutsche Bank AG | COP | 35,410 | 13,859 | 14,832 | (973 | ) | |||||||||||
Euro, | ||||||||||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 280 | 304,097 | 314,783 | (10,686 | ) | |||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 241 | 269,899 | 270,938 | (1,039 | ) | |||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 150 | 168,587 | 168,634 | (47 | ) | |||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 47 | 50,587 | 52,838 | (2,251 | ) | |||||||||||
Expiring 07/28/2015 | Citigroup Global Markets | EUR | 33 | 36,912 | 37,099 | (187 | ) | |||||||||||
Hungarian Forint, | ||||||||||||||||||
Expiring 07/22/2015 | Barclays Capital Group | HUF | 134,615 | 482,619 | 496,676 | (14,057 | ) | |||||||||||
Indonesia Rupiah, | ||||||||||||||||||
Expiring 06/19/2015 | Barclays Capital Group | IDR | 806,754 | 60,228 | 61,566 | (1,338 | ) | |||||||||||
Expiring 06/19/2015 | UBS AG | IDR | 872,363 | 64,499 | 66,572 | (2,073 | ) | |||||||||||
Expiring 07/10/2015 | Barclays Capital Group | IDR | 1,154,314 | 87,448 | 87,654 | (206 | ) |
See Notes to Financial Statements.
18 |
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Expiring 07/10/2015 | Barclays Capital Group | IDR | 240,873 | $ | 18,255 | $ | 18,291 | $ | (36 | ) | ||||||||
Expiring 07/10/2015 | BNP Paribas | IDR | 283,872 | 21,344 | 21,556 | (212 | ) | |||||||||||
Japanese Yen, | ||||||||||||||||||
Expiring 07/28/2015 | Goldman Sachs & Co. | JPY | 50,432 | 424,500 | 422,846 | 1,654 | ||||||||||||
Expiring 07/28/2015 | JPMorgan Chase | JPY | 4,734 | 39,871 | 39,690 | 181 | ||||||||||||
Malaysian Ringgit, | ||||||||||||||||||
Expiring 05/18/2015 | Barclays Capital Group | MYR | 108 | 30,271 | 30,325 | (54 | ) | |||||||||||
Expiring 05/18/2015 | Barclays Capital Group | MYR | 90 | 24,092 | 25,116 | (1,024 | ) | |||||||||||
Expiring 05/18/2015 | BNP Paribas | MYR | 79 | 21,333 | 22,161 | (828 | ) | |||||||||||
Expiring 05/18/2015 | Citigroup Global Markets | MYR | 112 | 30,024 | 31,294 | (1,270 | ) | |||||||||||
Expiring 05/18/2015 | Citigroup Global Markets | MYR | 111 | 31,202 | 31,206 | (4 | ) | |||||||||||
Mexican Peso, | ||||||||||||||||||
Expiring 07/22/2015 | Barclays Capital Group | MXN | 3,890 | 254,369 | 252,068 | 2,301 | ||||||||||||
Expiring 07/22/2015 | Citigroup Global Markets | MXN | 2,758 | 179,000 | 178,707 | 293 | ||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||
Expiring 05/18/2015 | JPMorgan Chase | TWD | 1,737 | 55,441 | 56,733 | (1,292 | ) | |||||||||||
Expiring 07/24/2015 | Credit Suisse First Boston Corp. | TWD | 11,011 | 355,017 | 359,613 | (4,596 | ) | |||||||||||
Expiring 07/24/2015 | UBS AG | TWD | 1,261 | 41,460 | 41,183 | 277 | ||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||
Expiring 06/11/2015 | BNP Paribas | PEN | 350 | 110,789 | 111,035 | (246 | ) | |||||||||||
Expiring 06/11/2015 | Citigroup Global Markets | PEN | 271 | 86,631 | 85,861 | 770 | ||||||||||||
Expiring 06/26/2015 | Barclays Capital Group | PEN | 288 | 90,999 | 91,056 | (57 | ) | |||||||||||
Philippine Peso, | ||||||||||||||||||
Expiring 05/11/2015 | Citigroup Global Markets | PHP | 717 | 16,151 | 16,097 | 54 | ||||||||||||
Expiring 05/11/2015 | Credit Suisse First Boston Corp. | PHP | 3,431 | 77,000 | 77,001 | (1 | ) | |||||||||||
Polish Zloty, | ||||||||||||||||||
Expiring 07/23/2015 | Barclays Capital Group | PLN | 614 | 168,103 | 170,139 | (2,036 | ) | |||||||||||
Expiring 07/23/2015 | Barclays Capital Group | PLN | 61 | 16,817 | 16,855 | (38 | ) | |||||||||||
Russian Ruble, | ||||||||||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 6,518 | 123,338 | 124,623 | (1,285 | ) | |||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 2,817 | 53,814 | 53,855 | (41 | ) | |||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 1,802 | 30,114 | 34,461 | (4,347 | ) | |||||||||||
Expiring 06/10/2015 | Barclays Capital Group | RUB | 1,738 | 33,506 | 33,234 | 272 | ||||||||||||
Expiring 06/10/2015 | Citigroup Global Markets | RUB | 2,558 | 40,866 | 48,909 | (8,043 | ) | |||||||||||
Expiring 06/10/2015 | Deutsche Bank AG | RUB | 25,320 | 393,172 | 484,089 | (90,917 | ) | |||||||||||
Expiring 06/10/2015 | JPMorgan Chase | RUB | 4,283 | 79,379 | 81,876 | (2,497 | ) | |||||||||||
South African Rand, | ||||||||||||||||||
Expiring 07/20/2015 | Barclays Capital Group | ZAR | 3,599 | 295,219 | 298,444 | (3,225 | ) | |||||||||||
Expiring 07/20/2015 | Barclays Capital Group | ZAR | 939 | 78,255 | 77,883 | 372 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 19 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
Expiring 07/20/2015 | Citigroup Global Markets | ZAR | 2,222 | $ | 187,000 | $ | 184,271 | $ | 2,729 | |||||||||
Expiring 07/20/2015 | Goldman Sachs & Co. | ZAR | 2,543 | 213,197 | 210,898 | 2,299 | ||||||||||||
South Korean Won, | ||||||||||||||||||
Expiring 06/11/2015 | Barclays Capital Group | KRW | 350,583 | 312,853 | 326,637 | (13,784 | ) | |||||||||||
Swiss Franc, | ||||||||||||||||||
Expiring 07/16/2015 | JPMorgan Chase | CHF | 27 | 28,366 | 28,917 | (551 | ) | |||||||||||
Expiring 07/16/2015 | UBS AG | CHF | 145 | 150,214 | 155,892 | (5,678 | ) | |||||||||||
Expiring 07/16/2015 | UBS AG | CHF | 145 | 151,000 | 155,834 | (4,834 | ) | |||||||||||
Thai Baht, | ||||||||||||||||||
Expiring 07/22/2015 | Deutsche Bank AG | THB | 8,024 | 246,015 | 242,790 | 3,225 | ||||||||||||
Turkish Lira, | ||||||||||||||||||
Expiring 07/24/2015 | Citigroup Global Markets | TRY | 625 | 229,262 | 228,025 | 1,237 | ||||||||||||
Expiring 07/24/2015 | Citigroup Global Markets | TRY | 324 | 118,151 | 118,223 | (72 | ) | |||||||||||
Expiring 07/24/2015 | Citigroup Global Markets | TRY | 92 | 33,633 | 33,607 | 26 | ||||||||||||
Expiring 07/24/2015 | Citigroup Global Markets | TRY | 84 | 30,220 | 30,562 | (342 | ) | |||||||||||
|
|
|
|
|
| |||||||||||||
$ | 8,814,158 | $ | 8,990,945 | $ | (176,787 | ) | ||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 174,125 | |||||||||||||||||
|
|
Interest rate swap agreements outstanding at April 30, 2015:
Notional | Termination Date | Fixed Rate | Floating | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||||||
| Over-the-counter swap agreements: |
| ||||||||||||||||||||||||
PLN | 1,000 | 02/26/20 | 1.830% | 6 Month WIBOR(1) | $ | (3,612 | ) | $ | — | $ | (3,612 | ) | Barclays Capital Group | |||||||||||||
MXN | 3,300 | 02/21/22 | 6.620% | 28 Day Mexican Interbank Rate(1) | 11,817 | — | 11,817 | Barclays Capital Group | ||||||||||||||||||
KRW | 100,000 | 11/05/24 | 2.425% | 3 Month LIBOR(1) | 1,359 | — | 1,359 | Barclays Capital Group | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||
$ | 9,564 | $ | — | $ | 9,564 | |||||||||||||||||||||
|
|
|
|
|
|
(1) | The Series pays the floating rate and receives the fixed rate. |
See Notes to Financial Statements.
20 |
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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities |
| |||||||||||
Foreign Bonds |
| |||||||||||
Argentina | $ | — | $ | 284,281 | $ | — | ||||||
Brazil | — | 3,152,027 | — | |||||||||
Colombia | — | 1,894,376 | — | |||||||||
Dominican Republic | — | 205,868 | — | |||||||||
Hungary | — | 1,520,703 | — | |||||||||
Indonesia | — | 3,505,917 | — | |||||||||
Kazakhstan | — | 293,930 | — | |||||||||
Lithuania | — | 303,500 | — | |||||||||
Luxembourg | — | 197,000 | — | |||||||||
Malaysia | — | 1,590,465 | — | |||||||||
Mexico | — | 3,918,749 | — | |||||||||
Nigeria | — | 477,842 | — | |||||||||
Peru | — | 693,960 | — | |||||||||
Philippines | — | 263,081 | — | |||||||||
Poland | — | 1,606,464 | — | |||||||||
Romania | — | 454,698 | — | |||||||||
Russia | — | 2,807,190 | — | |||||||||
South Africa | — | 2,655,794 | — | |||||||||
South Korea | — | 31,237 | — | |||||||||
Thailand | — | 1,145,252 | — | |||||||||
Turkey | — | 2,858,460 | — | |||||||||
Uruguay | — | 10,058 | — | |||||||||
Venezuela | — | 174,543 | — | |||||||||
Affiliated Money Market Mutual Fund | 3,238,603 | — | — |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 21 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Level 1 | Level 2 | Level 3 | ||||||||||
Other Financial Instruments* | ||||||||||||
Forward Foreign Currency Exchange Contracts | $ | — | $ | 174,125 | $ | — | ||||||
Interest Rate Swap Agreements | ||||||||||||
Over-the-counter swap agreements | — | 9,564 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,238,603 | $ | 30,229,084 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and exchange-traded swap contracts, which are recorded at the unrealized appreciation/depreciation on the instrument, and over-the-counter swap contracts which are recorded at fair value. |
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2015 was as follows (Unaudited):
Foreign Government Obligations | 74.5 | % | ||
Foreign Agencies | 11.8 | |||
Affiliated Money Market Mutual Fund | 9.7 | |||
Foreign Corporations | 3.5 | |||
|
| |||
99.5 | ||||
Other assets in excess of liabilities | 0.5 | |||
|
| |||
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 are 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.
22 |
Fair values of derivative instruments as of April 30, 2015 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for | Asset Derivatives | Liability Derivatives | ||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||
Foreign exchange contracts | Unrealized appreciation on forward foreign currency contracts | $ | 411,619 | Unrealized depreciation on forward foreign currency contracts | $ | 237,494 | ||||||
Interest rate contracts | Unrealized appreciation on swap agreements | 13,176 | Unrealized depreciation on swap agreements | 3,612 | ||||||||
|
|
|
| |||||||||
Total | $ | 424,795 | $ | 241,106 | ||||||||
|
|
|
|
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2015 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging | Options Purchased* | Options Written | Forward Currency Contracts** | Swaps | Total | |||||||||||||||
Foreign exchange contracts | $ | (9,845 | ) | $ | 7,253 | $ | 164,587 | $ | — | $ | 161,995 | |||||||||
Interest rate contracts | — | — | — | (53,591 | ) | (53,591 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | (9,845 | ) | $ | 7,253 | $ | 164,587 | $ | (53,591 | ) | $ | 108,404 | |||||||||
|
|
|
|
|
|
|
|
|
|
* | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
** | Included in net realized gain (loss) on foreign currency transactions in the Statement of Operations. |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging | Options Purchased* | Options Written | Forward Currency Contracts** | Swaps | Total | |||||||||||||||
Foreign exchange contracts | $ | 9,844 | $ | 74,651 | $ | 49,439 | $ | — | $ | 133,934 | ||||||||||
Interest rate contracts | — | — | — | 38,399 | 38,399 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 9,844 | $ | 74,651 | $ | 49,439 | $ | 38,399 | $ | 172,333 | |||||||||||
|
|
|
|
|
|
|
|
|
|
* | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
** | Included in net change in unrealized appreciation (depreciation) on foreign currencies in the Statement of Operations. |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 23 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
For the six months ended April 30, 2015, the Series’ average volume of derivative activities are as follows:
Options Purchased (Cost) | Options Written (Notional Amount in USD (000)) | Forward Currency Contracts— Purchased (Value at Settlement Date) | Forward Currency Contracts— Sold (Value at Settlement Date) | Cross Currency Contracts (Notional Amount in USD (000)) | Interest Rate Swaps (Notional Amount in USD (000)) | |||||||||||||||||
$ | 3,282 | $ | 955 | $ | 13,603,159 | $ | 13,164,911 | $ | 182 | $ | 693 |
Offsetting of over-the-counter (OTC) derivative assets and liabilities:
The Series invested in OTC derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives, where the legal right to set-off exists, is presented in the summary below.
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts Available for Offset | Collateral Received(3) | Net Amount | ||||||||||||
Bank of America | $ | 3,388 | $ | — | $ | — | $ | 3,388 | ||||||||
Barclays Capital Group | 172,276 | (63,950 | ) | — | 108,326 | |||||||||||
BNP Paribas | 33,724 | (3,023 | ) | — | 30,701 | |||||||||||
Citigroup Global Markets | 112,697 | (47,401 | ) | — | 65,296 | |||||||||||
Credit Suisse First Boston Corp. | 5,841 | (5,841 | ) | — | — | |||||||||||
Deutsche Bank AG | 22,815 | (22,815 | ) | — | — | |||||||||||
Goldman Sachs & Co. | 26,824 | (1,735 | ) | — | 25,089 | |||||||||||
Hong Kong & Shanghai Bank | 5,780 | — | — | 5,780 | ||||||||||||
JPMorgan Chase | 8,025 | (4,764 | ) | — | 3,261 | |||||||||||
Toronto Dominion | — | — | — | — | ||||||||||||
UBS AG | 33,425 | (14,693 | ) | — | 18,732 | |||||||||||
|
| |||||||||||||||
$ | 424,795 | |||||||||||||||
|
|
See Notes to Financial Statements.
24 |
Counterparty | Gross Amounts of Recognized Liabilities(2) | Gross Amounts Available for Offset | Collateral Pledged(3) | Net Amount | ||||||||||||
Bank of America | $ | — | $ | — | $ | — | $ | — | ||||||||
Barclays Capital Group | (63,950 | ) | 63,950 | — | — | |||||||||||
BNP Paribas | (3,023 | ) | 3,023 | — | — | |||||||||||
Citigroup Global Markets | (47,401 | ) | 47,401 | — | — | |||||||||||
Credit Suisse First Boston Corp. | (8,661 | ) | 5,841 | — | (2,820 | ) | ||||||||||
Deutsche Bank AG | (94,886 | ) | 22,815 | — | (72,071 | ) | ||||||||||
Goldman Sachs & Co. | (1,735 | ) | 1,735 | — | — | |||||||||||
Hong Kong & Shanghai Bank | — | — | — | — | ||||||||||||
JPMorgan Chase | (4,764 | ) | 4,764 | — | — | |||||||||||
Toronto Dominion | (1,993 | ) | — | — | (1,993 | ) | ||||||||||
UBS AG | (14,693 | ) | 14,693 | — | — | |||||||||||
|
| |||||||||||||||
$ | (241,106 | ) | ||||||||||||||
|
|
(1) | Included unrealized appreciation on swaps and forwards, premiums paid on swap agreements and market value of purchased options. |
(2) | Includes unrealized depreciation on swaps and forwards, premiums received on swap agreements and market value of written options. |
(3) | Amounts shown reflect actual collateral received or pledged by the Series. Such amounts are applied up to 100% of the Series’s OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 25 |
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets | ||||
Investments at value: | ||||
Unaffiliated Investments (cost $35,848,137) | $ | 30,045,395 | ||
Affiliated Investments (cost $3,238,603) | 3,238,603 | |||
Cash | 77,109 | |||
Foreign currency, at value (cost $372,556) | 374,004 | |||
Receivable for investments sold | 1,290,669 | |||
Interest receivable | 575,608 | |||
Unrealized appreciation on forward foreign currency exchange contracts | 411,619 | |||
Receivable for Series shares sold | 69,694 | |||
Tax reclaim receivable | 18,796 | |||
Unrealized appreciation on over-the-counter swap agreements | 13,176 | |||
Due from Manager | 9,401 | |||
Prepaid expenses | 225 | |||
|
| |||
Total assets | 36,124,299 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 2,304,703 | |||
Unrealized depreciation on forward foreign currency exchange contracts | 237,494 | |||
Accrued expenses and other liabilities | 91,325 | |||
Payable for Series shares reacquired | 23,779 | |||
Dividends payable | 6,628 | |||
Unrealized depreciation on over-the-counter swap agreements | 3,612 | |||
Distribution fee payable | 1,543 | |||
Affiliated transfer agent fee payable | 735 | |||
|
| |||
Total liabilities | 2,669,819 | |||
|
| |||
Net Assets | $ | 33,454,480 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 46,447 | ||
Paid-in capital in excess of par | 43,086,824 | |||
|
| |||
43,133,271 | ||||
Distributions in excess of net investment income | (588,466 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (3,435,863 | ) | ||
Net unrealized depreciation on investments and foreign currencies | (5,654,462 | ) | ||
|
| |||
Net assets, April 30, 2015 | $ | 33,454,480 | ||
|
|
See Notes to Financial Statements.
26 |
Class A | ||||
Net asset value and redemption price per share | $ | 7.15 | ||
Maximum sales charge (4.50% of offering price) | 0.34 | |||
|
| |||
Maximum offering price to public | $ | 7.49 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 7.19 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share | $ | 7.21 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 7.21 | ||
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 27 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Income | ||||
Income | ||||
Interest income (net of foreign withholding taxes of $31,529) | $ | 1,024,326 | ||
Affiliated dividend income | 496 | |||
|
| |||
Total income | 1,024,822 | |||
|
| |||
Expenses | ||||
Management fee | 126,297 | |||
Distribution fee—Class A | 7,335 | |||
Distribution fee—Class C | 3,998 | |||
Custodian and accounting fees | 90,000 | |||
Audit fee | 30,000 | |||
Registration fees | 26,000 | |||
Shareholders’ reports | 16,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $2,300) | 16,000 | |||
Legal fees and expenses | 11,000 | |||
Directors’ fees | 7,000 | |||
Miscellaneous | 7,771 | |||
|
| |||
Total expenses | 341,401 | |||
Less: Expense reimbursement | (164,301 | ) | ||
Distribution fee waiver—Class A | (950 | ) | ||
|
| |||
Net expenses | 176,150 | |||
|
| |||
Net investment income | 848,672 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (1,258,090 | ) | ||
Options written transactions | 7,253 | |||
Swap agreements transactions | (53,591 | ) | ||
Foreign currency transactions | 6,067 | |||
|
| |||
(1,298,361 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (net of capital gains tax) | (2,151,600 | ) | ||
Options written | 74,651 | |||
Swap agreements | 38,399 | |||
Foreign currencies | 62,928 | |||
|
| |||
(1,975,622 | ) | |||
|
| |||
Net loss on investment and foreign currency transactions | (3,273,983 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (2,425,311 | ) | |
|
|
See Notes to Financial Statements.
28 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 848,672 | $ | 2,322,326 | ||||
Net realized loss on investment and foreign currency transactions | (1,298,361 | ) | (3,954,794 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (1,975,622 | ) | 497,978 | |||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (2,425,311 | ) | (1,134,490 | ) | ||||
|
|
|
| |||||
Dividends from net investment income | ||||||||
Class A | (151,320 | ) | (69,495 | ) | ||||
Class C | (20,595 | ) | (10,949 | ) | ||||
Class Q | (30 | ) | (11 | ) | ||||
Class Z | (786,176 | ) | (321,017 | ) | ||||
|
|
|
| |||||
(958,121 | ) | (401,472 | ) | |||||
|
|
|
| |||||
Tax Return of Capital | ||||||||
Class A | — | (367,986 | ) | |||||
Class C | — | (57,974 | ) | |||||
Class Q | — | (56 | ) | |||||
Class Z | — | (1,699,832 | ) | |||||
|
|
|
| |||||
— | (2,125,848 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 4,935,228 | 7,683,127 | ||||||
Net asset value of shares issued in reinvestment of dividends and tax return of capital | 904,841 | 2,370,809 | ||||||
Cost of shares reacquired | (4,498,732 | ) | (14,557,474 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | 1,341,337 | (4,503,538 | ) | |||||
|
|
|
| |||||
Total decrease | (2,042,095 | ) | (8,165,348 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 35,496,575 | 43,661,923 | ||||||
|
|
|
| |||||
End of period | $ | 33,454,480 | $ | 35,496,575 | ||||
|
|
|
|
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 six series: Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund, Prudential Jennison International Opportunities Fund, Prudential Emerging Markets Debt Local Currency Fund, Prudential Jennison Emerging Markets Equity Fund and Prudential Jennison Global Opportunities Fund. These financial statements relate to Prudential Emerging Markets Debt Local Currency Fund (the “Series”). 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 total return, through a combination of current income and capital appreciation.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund and the Series consistently follow such policies in the preparation of their financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
30 |
Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Prudential Emerging Markets Debt Local Currency Fund | 31 |
Notes to Financial Statements
(Unaudited) continued
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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: Subject to guidelines adopted by the Board, the Series may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the 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
32 |
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 Directors of 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, forward currency contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the 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.
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,
Prudential Emerging Markets Debt Local Currency Fund | 33 |
Notes to Financial Statements
(Unaudited) continued
region or country. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. companies 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.
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 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.
Cross Currency Exchange Contracts: A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.
Options: The Series purchased options and wrote 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 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
34 |
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 options contracts, there is minimal counterparty credit risk to the Series since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the 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. Exchange-traded swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. Payments received or paid by the 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 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 rate swap contracts. The Series is subject to interest rate risk exposure in the normal course of pursuing its investment objectives.
Prudential Emerging Markets Debt Local Currency Fund | 35 |
Notes to Financial Statements
(Unaudited) continued
Master Netting Arrangements: The Series is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadvisor may have negotiated and entered into on behalf of the Series. 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. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there were no instances where the right of set-off existed and management has not elected to offset.
The Series is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements with certain counterparties that govern over-the-counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Series is held in a segregated account by the Series’ custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Portfolio of Investments. Collateral pledged by the Series is segregated by the Series’ custodian and identified in the Portfolio of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Series and the applicable counterparty. Collateral requirements are determined based on the Series’ net position with each counterparty. Termination events applicable to the Series may occur upon a decline in the Series’ net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Series’ counterparties to elect early termination could impact the Series’ future derivative activity.
36 |
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such over-the-counter derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
As of April 30, 2015, the Series has not met conditions under such agreements which give the counterparty the right to call for an early termination.
Forward currency contracts, written options, short sales, swaps and financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.
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 that may differ from actual.
Net investment income or loss (other than distribution fees, which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share 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.
Prudential Emerging Markets Debt Local Currency Fund | 37 |
Notes to Financial Statements
(Unaudited) continued
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 estimates.
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 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 accrued daily and payable monthly at an annual rate of .80% of the average daily net assets of the Series. For the six months ended April 30, 2015, the expense reimbursement exceeded the effective management fee rate.
PI has contractually agreed through February 29, 2016 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.
38 |
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, 2015, PIMS contractually agreed to limit such expenses to .25% of the average daily net assets of the Class A shares through March 8, 2015. Effective March 9, 2015, the Class A contractual distribution and service (12b-1) fees were reduced from .30% to .25% of the average daily net assets and the .05% contractual 12b-1 fee waiver was terminated.
PIMS has advised the Series that it received $7,302 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2015. 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 for the six months ended April 30, 2015, it received $1,739 in contingent deferred sales charges imposed upon certain redemptions by Class A shareholders.
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’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 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”.
Prudential Emerging Markets Debt Local Currency Fund | 39 |
Notes to Financial Statements
(Unaudited) continued
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, 2015, were $14,696,266 and $15,180,122, respectively.
Transactions in options written during the six months ended April 30, 2015, were as follows:
Notional Amount | Premiums Received | |||||||
Options outstanding at October 31, 2014 | $ | 2,864,000 | $ | 7,253 | ||||
Options written | — | — | ||||||
Options expired | (2,864,000 | ) | (7,253 | ) | ||||
|
|
|
| |||||
Options outstanding at April 30, 2015 | $ | — | $ | — | ||||
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|
|
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Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized depreciation as of April 30, 2015 were as follows:
Tax Basis | $ | 41,475,259 | ||
|
| |||
Appreciation | 201,948 | |||
Depreciation | (8,393,209 | ) | ||
|
| |||
Net Unrealized Depreciation | $ | (8,191,261 | ) | |
|
|
The book basis may differ from tax basis due to certain tax related adjustments.
The Fund utilized approximately $129,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended October 31, 2014.
Management has analyzed the Series’ tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
40 |
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%. 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 CDSC 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, 2015, no such exchanges were made.
As of April 30, 2015, Prudential Financial, Inc. through its affiliates owned 130 Class Q shares and 3,067,753 Class Z shares of the Series.
There are 425 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 250 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 97,817 | $ | 716,160 | |||||
Shares issued in reinvestment of dividends and distributions | 13,532 | 98,999 | ||||||
Shares reacquired | (284,009 | ) | (2,052,758 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (172,660 | ) | (1,237,599 | ) | ||||
Shares reacquired upon conversion into Class Z | (211 | ) | (1,496 | ) | ||||
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|
|
| |||||
Net increase (decrease) in shares outstanding | (172,871 | ) | $ | (1,239,095 | ) | |||
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| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 279,301 | $ | 2,302,607 | |||||
Shares issued in reinvestment of dividends and tax return of capital | 36,690 | 299,271 | ||||||
Shares reacquired | (781,785 | ) | (6,398,476 | ) | ||||
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|
| |||||
Net increase (decrease) in shares outstanding before conversion | (465,794 | ) | (3,796,598 | ) | ||||
Shares reacquired upon conversion into Class Z | (30,119 | ) | (247,386 | ) | ||||
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|
| |||||
Net increase (decrease) in shares outstanding | (495,913 | ) | $ | (4,043,984 | ) | |||
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|
|
|
Prudential Emerging Markets Debt Local Currency Fund | 41 |
Notes to Financial Statements
(Unaudited) continued
Class C | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 13,077 | $ | 94,466 | |||||
Shares issued in reinvestment of dividends and distributions | 2,698 | 19,822 | ||||||
Shares reacquired | (25,124 | ) | (188,023 | ) | ||||
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|
| |||||
Net increase (decrease) in shares outstanding | (9,349 | ) | $ | (73,735 | ) | |||
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| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 60,555 | $ | 508,979 | |||||
Shares issued in reinvestment of dividends and tax return of capital | 7,366 | 60,508 | ||||||
Shares reacquired | (118,303 | ) | (981,084 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (50,382 | ) | (411,597 | ) | ||||
Shares reacquired upon conversion into Class Z | (1,820 | ) | (15,115 | ) | ||||
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|
| |||||
Net increase (decrease) in shares outstanding | (52,202 | ) | $ | (426,712 | ) | |||
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| |||||
Class Q | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares issued in reinvestment of dividends and distributions | 4.0 | $ | 30 | |||||
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|
| |||||
Net increase (decrease) in shares outstanding | 4.0 | $ | 30 | |||||
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| |||||
Year ended October 31, 2014: | ||||||||
Shares issued in reinvestment of dividends and tax return of capital | 8.2 | $ | 67 | |||||
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| |||||
Net increase (decrease) in shares outstanding | 8.2 | $ | 67 | |||||
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| |||||
Class Z | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 568,274 | $ | 4,124,602 | |||||
Shares issued in reinvestment of dividends and distributions | 106,762 | 785,990 | ||||||
Shares reacquired | (301,091 | ) | (2,257,951 | ) | ||||
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|
| |||||
Net increase (decrease) in shares outstanding before conversion | 373,945 | 2,652,641 | ||||||
Shares issued upon conversion from Class A | 209 | 1,496 | ||||||
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|
| |||||
Net increase (decrease) in shares outstanding | 374,154 | $ | 2,654,137 | |||||
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| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 584,734 | $ | 4,871,541 | |||||
Shares issued in reinvestment of dividends and tax return of capital | 244,501 | 2,010,963 | ||||||
Shares reacquired | (873,483 | ) | (7,177,914 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (44,248 | ) | (295,410 | ) | ||||
Shares issued upon conversion from Class A and Class C | 31,701 | 262,501 | ||||||
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|
|
| |||||
Net increase (decrease) in shares outstanding | (12,547 | ) | $ | (32,909 | ) | |||
|
|
|
|
42 |
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 5, 2014 through November 4, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to November 5, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 six months ended April 30, 2015.
Note 8. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
Prudential Emerging Markets Debt Local Currency Fund | 43 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||
2014(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.92 | $8.67 | $9.61 | $9.36 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | .19 | .49 | .47 | .42 | .32 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.75 | ) | (.71 | ) | (.76 | ) | .35 | (.62 | ) | |||||||||||||||
Total from investment operations | (.56 | ) | (.22 | ) | (.29 | ) | .77 | (.30 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (.21 | ) | (.07 | ) | (.30 | ) | (.52 | ) | (.13 | ) | ||||||||||||||
Distributions from net realized gains | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | (.46 | ) | (.30 | ) | - | (.21 | ) | |||||||||||||||||
Total dividends and distributions | (.21 | ) | (.53 | ) | (.65 | ) | (.52 | ) | (.34 | ) | ||||||||||||||
Net asset value, end of period | $7.15 | $7.92 | $8.67 | $9.61 | $9.36 | |||||||||||||||||||
Total Return(c): | (7.07)% | (2.47)% | (3.23)% | 8.53% | (3.14)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $4,172 | $5,991 | $10,862 | $5,985 | $2,620 | |||||||||||||||||||
Average net assets (000) | $5,150 | $6,701 | $12,797 | $2,721 | $1,634 | |||||||||||||||||||
Ratios to average net assets(d)(e): | ||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.30% | (f) | 1.30% | 1.30% | 1.30% | 1.30% | (f) | |||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.39% | (f) | 2.13% | 1.78% | 2.09% | 2.81% | (f) | |||||||||||||||||
Net investment income | 5.26% | (f) | 5.99% | 5.07% | 4.73% | 4.85% | (f) | |||||||||||||||||
Portfolio turnover rate | 48% | (g) | 110% | 102% | 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) Effective March 9, 2015, the contractual distribution and service (12b-1) fees were reduced from .30% to .25% of the average daily net assets and the .05% contractual 12b-1 fee waiver was terminated.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
44 |
Class C Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||
2014(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.97 | $8.72 | $9.65 | $9.41 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | .16 | .43 | .40 | .37 | .31 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.75 | ) | (.71 | ) | (.75 | ) | .32 | (.57 | ) | |||||||||||||||
Total from investment operations | (.59 | ) | (.28 | ) | (.35 | ) | .69 | (.26 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (.19 | ) | (.01 | ) | (.23 | ) | (.45 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | (.46 | ) | (.30 | ) | - | (.21 | ) | |||||||||||||||||
Total dividends and distributions | (.19 | ) | (.47 | ) | (.58 | ) | (.45 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $7.19 | $7.97 | $8.72 | $9.65 | $9.41 | |||||||||||||||||||
Total Return(c): | (7.48)% | (3.21)% | (3.85)% | 7.55% | (2.72)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $770 | $927 | $1,469 | $1,025 | $398 | |||||||||||||||||||
Average net assets (000) | $806 | $1,207 | $1,585 | $786 | $211 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 2.05% | (e) | 2.05% | 2.05% | 2.05% | 2.05% | (e) | |||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 3.09% | (e) | 2.82% | 2.47% | 2.78% | 3.52% | (e) | |||||||||||||||||
Net investment income | 4.46% | (e) | 5.17% | 4.26% | 3.89% | 4.09% | (e) | |||||||||||||||||
Portfolio turnover rate | 48% | (f) | 110% | 102% | 70% | 60% | (f) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of 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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 45 |
Financial Highlights
(Unaudited) continued
Class Q Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||
2014(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.98 | $8.71 | $9.66 | $9.37 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | .20 | .51 | .58 | .47 | .29 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.74 | ) | (.69 | ) | (.86 | ) | .37 | (.59 | ) | |||||||||||||||
Total from investment operations | (.54 | ) | (.18 | ) | (.28 | ) | .84 | (.30 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (.23 | ) | (.09 | ) | (.32 | ) | (.55 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.23 | ) | (.55 | ) | (.67 | ) | (.55 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $7.21 | $7.98 | $8.71 | $9.66 | $9.37 | |||||||||||||||||||
Total Return(c): | (6.81)% | (1.97)% | (3.06)% | 9.31% | (3.14)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $1 | $1 | $1 | $1 | $1 | |||||||||||||||||||
Average net assets (000) | $1 | $1 | $1 | $1 | $1 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.05% | (e) | 1.05% | 1.05% | 1.05% | 1.05% | (e) | |||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 1.95% | (e) | 1.69% | 1.39% | 1.71% | 2.67% | (e) | |||||||||||||||||
Net investment income | 5.59% | (e) | 6.17% | 6.22% | 5.06% | 4.98% | (e) | |||||||||||||||||
Portfolio turnover rate | 48% | (f) | 110% | 102% | 70% | 60% | (f) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of 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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
46 |
Class Z Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||
2014(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $7.98 | $8.72 | $9.66 | $9.37 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | .20 | .51 | .49 | .47 | .29 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.75 | ) | (.70 | ) | (.76 | ) | .36 | (.59 | ) | |||||||||||||||
Total from investment operations | (.55 | ) | (.19 | ) | (.27 | ) | .83 | (.30 | ) | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (.22 | ) | (.09 | ) | (.32 | ) | (.54 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.22 | ) | (.55 | ) | (.67 | ) | (.54 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $7.21 | $7.98 | $8.72 | $9.66 | $9.37 | |||||||||||||||||||
Total Return(c): | (6.89)% | (2.12)% | (2.98)% | 9.21% | (3.14)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $28,512 | $28,578 | $31,330 | $33,559 | $26,532 | |||||||||||||||||||
Average net assets (000) | $25,879 | $30,288 | $35,341 | $30,441 | $25,697 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.05% | (e) | 1.05% | 1.05% | 1.05% | 1.05% | (e) | |||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.09% | (e) | 1.82% | 1.49% | 1.81% | 2.72% | (e) | |||||||||||||||||
Net investment income | 5.43% | (e) | 6.14% | 5.25% | 4.96% | 4.99% | (e) | |||||||||||||||||
Portfolio turnover rate | 48% | (f) | 110% | 102% | 70% | 60% | (f) |
(a) Commencement of operations.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of 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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 47 |
Results of Proxy Voting
(Unaudited)
At a special meeting of shareholders held on November 26, 2014, shareholders of the Prudential World Fund, Inc., which is comprised of Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund, Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund and Prudential Emerging Markets Debt Local Currency Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:
Proposal: To elect twelve Directors:
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Ellen S. Alberding | ||||||||||||
FOR | 40,430,355.469 | 98.29 | % | 69.20 | % | |||||||
WITHHELD | 703,232.767 | 1.71 | % | 1.20 | % | |||||||
Kevin J. Bannon | ||||||||||||
FOR | 40,500,752.683 | 98.46 | % | 69.32 | % | |||||||
WITHHELD | 632,835.553 | 1.54 | % | 1.08 | % | |||||||
Linda W. Bynoe | ||||||||||||
FOR | 40,463,969.413 | 98.37 | % | 69.25 | % | |||||||
WITHHELD | 669,618.823 | 1.63 | % | 1.15 | % | |||||||
Keith F. Hartstein | ||||||||||||
FOR | 40,502,519.384 | 98.47 | % | 69.32 | % | |||||||
WITHHELD | 631,068.852 | 1.53 | % | 1.08 | % | |||||||
Michael S. Hyland | ||||||||||||
FOR | 40,454,955.187 | 98.35 | % | 69.24 | % | |||||||
WITHHELD | 678,633.049 | 1.65 | % | 1.16 | % | |||||||
Stephen P. Munn | ||||||||||||
FOR | 40,350,089.935 | 98.10 | % | 69.06 | % | |||||||
WITHHELD | 783,498.301 | 1.90 | % | 1.34 | % | |||||||
James E. Quinn | ||||||||||||
FOR | 40,472,965.987 | 98.39 | % | 69.27 | % | |||||||
WITHHELD | 660,622.249 | 1.61 | % | 1.13 | % | |||||||
Richard A. Redeker | ||||||||||||
FOR | 40,445,890.390 | 98.33 | % | 69.22 | % | |||||||
WITHHELD | 687,697.846 | 1.67 | % | 1.18 | % | |||||||
Stephen G. Stoneburn | ||||||||||||
FOR | 40,484,781.265 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 648,806.971 | 1.58 | % | 1.11 | % | |||||||
Grace C. Torres | ||||||||||||
FOR | 40,481,896.899 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 651,691.337 | 1.58 | % | 1.11 | % |
48 |
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Stuart S. Parker | ||||||||||||
FOR | 40,486,057.825 | 98.43 | % | 69.29 | % | |||||||
WITHHELD | 647,530.411 | 1.57 | % | 1.11 | % | |||||||
Scott E. Benjamin | ||||||||||||
FOR | 40,475,216.348 | 98.40 | % | 69.27 | % | |||||||
WITHHELD | 658,371.888 | 1.60 | % | 1.13 | % |
At the same special meeting, shareholders of the Prudential Emerging Markets Debt Local Currency Fund approved the following proposal:
Proposal: To permit Prudential Investments LLC (PI) to enter into or make material changes to the Fund’s subadvisory agreements with subadvisers that are wholly-owned subsidiaries of PI or a sister company of PI (wholly-owned subadvisers) without shareholder approval:
SHARES VOTED | % OF VOTED | % OF TOTAL | ||||||||||
FOR | 3,149,612.877 | 71.87 | % | 69.80 | % | |||||||
AGAINST | 17,312.093 | 0.40 | % | 0.38 | % | |||||||
ABSTAIN | 10,174.753 | 0.23 | % | 0.23 | % | |||||||
BROKER NON-VOTE | 1,205,453.174 | 27.50 | % | 26.71 | % | |||||||
TOTAL | 4,382,552.897 | 100.00 | % | 97.12 | % |
Prudential Emerging Markets Debt Local Currency Fund | 49 |
Approval of Advisory Agreement
Approval of New Sub-Subadvisory Agreement
As required by the Investment Company Act of 1940, as amended (the 1940 Act), at an in-person meeting of the Board of Directors (the Board) held on March 3-5, 2015, the Board, including a majority of the Independent Directors, considered and approved a proposed sub-subadvisory agreement (the “Sub-Subadvisory Agreement”) between Prudential Investment Management, Inc. (PIM or the Subadviser) and Pramerica Investment Management Limited (PIML or the Sub-Subadviser), under which PIM may delegate subadvisory authority to PIML such that PIML may execute trades directly on behalf of the Fund. The Board noted that counsel to the Fund had issued an opinion that the delegation of subadvisory services by PIM to PIML with respect to the Fund would not constitute an assignment of the current subadvisory agreement between Prudential Investments LLC (the Manager) and PIM with respect to the Fund or a material amendment of the agreement, so that PIM and PIML could enter into the Sub-Subadvisory Agreement with respect to the Fund with Board approval but without shareholder approval being required under the 1940 Act.
In approving the Sub-Subadvisory Agreement, the Board, including the Independent Directors advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services to be provided to the Fund by the Sub-Subadviser; any relevant comparable performance information; the fees, if any, proposed to be paid by PIM to the Sub-Subadviser under the Sub-Subadvisory Agreement and the potential for economies of scale that may be shared with the Fund and its shareholders. In connection with its deliberations, the Board considered information provided by the Manager, the Subadviser and the Sub-Subadviser at or in advance of the meetings on March 3-5, 2015. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the Sub-Subadvisory Agreement with respect to the Fund.
The Directors determined that the overall arrangements between the Manager, the Subadviser and the Sub-Subadviser, which will serve as a sub-subadviser to the Fund pursuant to the terms of the Sub-Subadvisory Agreement, are in the best interests of the Fund and its shareholders in light of the services to be performed, the fees to be charged, if any, under the Sub-Subadvisory Agreement and such other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the Directors’ reaching their determinations to approve the Sub-Subadvisory Agreement with respect to the Fund are separately discussed below.
Prudential Emerging Markets Debt Local Currency Fund
Approval of Advisory Agreement (continued)
Nature, Quality and Extent of Services
The Board noted that it had received and considered information regarding the nature and extent of services currently provided to the Fund by PIM under the current subadvisory agreement at the meetings on June 9-11, 2014. The Board also noted that PIM proposed to formally delegate trading and limited management authority for the Fund to PIML so that PIML will be authorized to act on behalf of the Fund and conduct real-time trading in either the United States or the United Kingdom, where PIML is organized. The Board noted the Manager’s statement that the existing arrangements, which require all trades on behalf of the Fund to be routed through PIM personnel in the US, create delays that potentially disadvantage the Fund and its shareholders.
With respect to the quality of services, the Board considered, among other things, the background and experience of the PIML management team and compliance personnel. The Board met with representatives from PIM and PIML and reviewed the qualifications, backgrounds and responsibilities of the personnel who would be authorized to act on behalf of the Funds. The Board was also provided with information pertaining to the organizational structure, senior management, investment operations, and other relevant information pertaining to PIML. The Board noted that it received a favorable compliance report from the Fund’s Chief Compliance Officer (CCO) as to PIML.
The Board concluded that it was satisfied with the nature, extent and quality of the investment sub-subadvisory services anticipated to be provided to the Fund by PIML and that there was a reasonable basis on which to conclude that the Fund would benefit from the additional subadvisory services to be provided by PIML under the new Sub-Subadvisory Agreement. The Board noted the Manager’s statement that no member of the PIML portfolio management team would serve as a portfolio manager of the Fund.
Performance of the Fund
The Board noted that performance of other accounts managed by PIML was not a relevant factor for its consideration since PIML would not be responsible for managing Fund assets under the Sub-Subadvisory Agreement. The Board noted the Manager’s statements that PIML’s role would be limited to trading on behalf of the Fund and that PIM portfolio managers will oversee all transactions executed by PIML.
Investment Subadvisory Fee Rates
The Board noted that under the Sub-Subadvisory Agreement PIML will be paid a subadvisory fee, if any, by PIM, not the Fund or the Manager. The Board noted the
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Manager’s statement that the fees and expenses of the Fund and the fees paid by the Manager to PIM will not increase as a result of the Sub-Subadvisory Agreement.
Sub-Subadviser’s Profitability
The Board noted that any fee to be paid to PIML for sub-subadvisory services would be paid by PIM, not the Manager or the Fund. The Board further noted that PIML is affiliated with PIM and the Manager and, a result, the Board will not separately consider PIML’s profitability since PIML’s profitability will be reflected in the Manager’s profitability report.
Economies of Scale
The Board noted that any fee to be paid to PIML for sub-subadvisory services would be paid by PIM, not the Manager or the Fund. The Board noted that it would review economies of scale in connection with future annual reviews of advisory agreements.
Other Benefits to the Sub-Subadviser or its Affiliates from Serving as Sub-Subadviser
The Board considered potential “fall-out” or ancillary benefits that might be received by PIML and its affiliates as a result of their relationships with the Fund. The Board concluded that any potential benefits to be derived by PIML, which included potential access to additional research resources and benefits to its reputation, were consistent with the types of benefits generally derived by subadvisers to mutual funds.
* * *
After full consideration of these factors, the Board concluded that the approval of the Sub-Subadvisory Agreement was in the best interests of the Fund and its shareholders.
Prudential Emerging Markets Debt Local Currency Fund
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 |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Chad A. Earnst, Chief Compliance Officer • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Prudential Investment Management, Inc. | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
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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 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 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
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 0278672-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON GLOBAL OPPORTUNITIES FUND
SEMIANNUAL REPORT · APRIL 30, 2015
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Jennison Associates is a registered investment adviser. Both are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, Jennison Associates, Jennison, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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June 15, 2015
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, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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
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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 | ||||||||||||
Six Months | One Year | Since Inception | ||||||||||
Class A | 8.24 | % | 16.34 | % | 52.40% (3/14/12) | |||||||
Class C | 7.90 | 15.53 | 48.80 (3/14/12) | |||||||||
Class Q | N/A | N/A | 8.55 (12/22/14) | |||||||||
Class Z | 8.40 | 16.63 | 53.60 (3/14/12) | |||||||||
MSCI ACWI World ND Index | 4.97 | 7.46 | — | |||||||||
Lipper Global Multi-Cap Core Funds Average | 4.72 | 6.61 | — | |||||||||
Lipper Global Multi-Cap Growth Funds Average | 5.04 | 8.13 | — | |||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 | ||||||||||||
One Year | Since Inception | |||||||||||
Class A | 4.18 | % | 12.57% (3/14/12) | |||||||||
Class C | 8.45 | 13.81 (3/14/12) | ||||||||||
Class Q | N/A | N/A (12/22/14) | ||||||||||
Class Z | 10.55 | 14.98 (3/14/12) | ||||||||||
MSCI ACWI World ND Index | 5.42 | — | ||||||||||
Lipper Global Multi-Cap Core Funds Average | 4.91 | — | ||||||||||
Lipper Global Multi-Cap Growth Funds Average | 5.72 | — |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
2 | Visit our website at www.prudentialfunds.com |
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Q | Class Z | |||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .30% (.25% | 1% | None | None |
Benchmark Definitions
MSCI ACWI ND Index
The MSCI ACWI ND Index is an unmanaged free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes. The developed market country indexes included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, 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 included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates. The cumulative total returns for the Index measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 4/30/2015 are 40.71% and 5.27% for Class Q shares. The average annual total return for the Index measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 3/31/15 is 10.68%. Class Q shares have been in existence for less than one year and have no average annual total return performance information available.
Lipper Global Multi-Cap Core Funds Average
The Lipper Global Multi-Cap Core Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Global Multi-Cap Core Funds category for the periods noted. Funds in the Lipper 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. The cumulative total returns for the Lipper Average measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 4/30/2015 are 37.79% and 5.08% for Class Q shares. The average annual total return for the Lipper Average measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 3/31/15 is 10.01%. Class Q shares have been in existence for less than one year and have no average annual total return performance information available.
Prudential Jennison Global Opportunities Fund | 3 |
Your Fund’s Performance (continued)
Lipper Global Multi-Cap Growth Funds Average
The Lipper Global Multi-Cap Growth Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Global Multi-Cap Core Funds category for the periods noted. Funds in the Lipper 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. The cumulative total returns for the Lipper Average measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 4/30/2015 are 39.96% and 5.01% for Class Q shares. The average annual total return for the Lipper Average measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 3/31/15 is 10.86%. Class Q shares have been in existence for less than one year and have no average annual total return performance information available.
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. The Since Inception returns for the Index and the Lipper Averages are measured from the closest month-end to the inception date for the indicated share class.
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 | ||||
Tencent Holdings Ltd., Internet Software & Services | 5.7 | % | ||
Facebook, Inc. (Class A Stock), Internet Software & Services | 4.9 | |||
MasterCard, Inc. (Class A Stock), IT Services | 4.7 | |||
Bristol-Myers Squibb Co., Pharmaceuticals | 3.9 | |||
Inditex SA, Specialty Retail | 3.3 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/15 | ||||
Internet Software & Services | 19.6 | % | ||
Biotechnology | 13.2 | |||
Pharmaceuticals | 13.1 | |||
Textiles, Apparel & Luxury Goods | 8.4 | |||
Internet & Catalog Retail | 7.2 |
Industry weightings reflect 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, 2014, at the beginning of the period, and held through the six-month period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of
Prudential Jennison Global Opportunities Fund | 5 |
Fees and Expenses (continued)
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.
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, 2014 | Ending Account Value April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,082.40 | 1.60 | % | $ | 8.26 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.86 | 1.60 | % | $ | 8.00 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,079.00 | 2.35 | % | $ | 12.11 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.14 | 2.35 | % | $ | 11.73 | ||||||||||
Class Q | Actual** | $ | 1,000.00 | $ | 1,084.80 | 1.29 | % | $ | 4.75 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.40 | 1.29 | % | $ | 6.46 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,084.00 | 1.35 | % | $ | 6.98 | |||||||||
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, 2015, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2015 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
**“Actual” expenses are calculated using the 130 day period ended April 30, 2015 due to the Class Q inception date of December 22, 2014.
6 | Visit our website at www.prudentialfunds.com |
The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||||||
A | 1.70 | % | 1.60 | % | ||||
C | 2.40 | 2.35 | ||||||
Q | 1.29 | 1.29 | ||||||
Z | 1.40 | 1.35 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential Jennison Global Opportunities Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 97.8% | ||||||||
COMMON STOCKS | ||||||||
Argentina 2.0% | ||||||||
MercadoLibre, Inc. | 10,156 | $ | 1,445,504 | |||||
China 14.2% | ||||||||
Alibaba Group Holding Ltd., ADR* | 22,976 | 1,867,719 | ||||||
JD.com, Inc., ADR* | 69,564 | 2,334,568 | ||||||
Tencent Holdings Ltd. | 203,260 | 4,195,059 | ||||||
Vipshop Holdings Ltd., ADR* | 72,254 | 2,044,066 | ||||||
|
| |||||||
10,441,412 | ||||||||
Denmark 1.5% | ||||||||
Novo Nordisk A/S (Class B Stock) | 19,694 | 1,105,634 | ||||||
Germany 4.6% | ||||||||
Bayer AG | 9,649 | 1,388,807 | ||||||
Continental AG | 8,527 | 1,998,346 | ||||||
|
| |||||||
3,387,153 | ||||||||
Ireland 2.6% | ||||||||
Shire PLC | 23,240 | 1,888,554 | ||||||
Italy 2.8% | ||||||||
Azimut Holding SpA | 26,101 | 766,136 | ||||||
Luxottica Group SpA | 19,462 | 1,281,708 | ||||||
|
| |||||||
2,047,844 | ||||||||
Japan 8.0% | ||||||||
FANUC Corp. | 8,365 | 1,839,988 | ||||||
Fuji Heavy Industries Ltd. | 45,358 | 1,516,772 | ||||||
Murata Manufacturing Co. Ltd. | 8,149 | 1,148,309 | ||||||
Sysmex Corp. | 25,522 | 1,412,177 | ||||||
|
| |||||||
5,917,246 | ||||||||
Spain 3.3% | ||||||||
Inditex SA | 76,297 | 2,448,303 | ||||||
Taiwan 2.0% | ||||||||
Hermes Microvision, Inc. | 21,000 | 1,476,674 |
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom 6.7% | ||||||||
ARM Holdings PLC | 100,647 | $ | 1,710,121 | |||||
Ashtead Group PLC | 52,311 | 897,002 | ||||||
Burberry Group PLC | 27,726 | 739,143 | ||||||
St. James’s Place PLC | 115,004 | 1,568,726 | ||||||
|
| |||||||
4,914,992 | ||||||||
United States 50.1% | ||||||||
Actavis PLC* | 8,324 | 2,354,527 | ||||||
Apple, Inc. | 17,233 | 2,156,710 | ||||||
Biogen Idec, Inc.* | 5,925 | 2,215,535 | ||||||
BioMarin Pharmaceutical, Inc.* | 14,946 | 1,674,699 | ||||||
Bristol-Myers Squibb Co. | 44,532 | 2,838,024 | ||||||
Celgene Corp.* | 21,043 | 2,273,907 | ||||||
Facebook, Inc. (Class A Stock)* | 45,282 | 3,566,863 | ||||||
Gilead Sciences, Inc.* | 9,975 | 1,002,587 | ||||||
Google, Inc. (Class A Stock)* | 2,357 | 1,293,451 | ||||||
Home Depot, Inc. (The) | 19,019 | 2,034,653 | ||||||
Incyte Corp Ltd.* | 20,558 | 1,997,415 | ||||||
LendingClub Corp.* | 19,961 | 348,319 | ||||||
LinkedIn Corp. (Class A Stock)* | 5,391 | 1,359,233 | ||||||
MasterCard, Inc. (Class A Stock) | 38,244 | 3,449,991 | ||||||
Netflix, Inc.* | 1,594 | 887,061 | ||||||
NIKE, Inc. (Class B Stock) | 20,978 | 2,073,466 | ||||||
Regeneron Pharmaceuticals, Inc.* | 1,100 | 503,206 | ||||||
Starbucks Corp. | 22,528 | 1,116,938 | ||||||
Tesla Motors, Inc.* | 5,430 | 1,227,451 | ||||||
Twitter, Inc.* | 9,282 | 361,627 | ||||||
Under Armour, Inc. (Class A Stock)* | 26,732 | 2,073,067 | ||||||
|
| |||||||
36,808,730 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 71,882,046 | ||||||
|
|
See Notes to Financial Statements.
10 |
Description | Shares | Value (Note 1) | ||||||
SHORT-TERM INVESTMENT 3.0% | ||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund | 2,182,338 | $ | 2,182,338 | |||||
|
| |||||||
TOTAL INVESTMENTS 100.8% | 74,064,384 | |||||||
Liabilities in excess of other assets (0.8)% | (588,685 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 73,475,699 | ||||||
|
|
The following abbreviation is used in the portfolio descriptions:
ADR—American Depositary Receipt
* | 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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 1,445,504 | $ | — | $ | — | ||||||
China | 6,246,353 | 4,195,059 | — | |||||||||
Denmark | — | 1,105,634 | — | |||||||||
Germany | — | 3,387,153 | — | |||||||||
Ireland | — | 1,888,554 | — | |||||||||
Italy | — | 2,047,844 | — | |||||||||
Japan | — | 5,917,246 | — | |||||||||
Spain | — | 2,448,303 | — | |||||||||
Taiwan | — | 1,476,674 | — |
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
United Kingdom | $ | — | $ | 4,914,992 | $ | — | ||||||
United States | 36,808,730 | — | — | |||||||||
Affiliated Money Market Mutual Fund | 2,182,338 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 46,682,925 | $ | 27,381,459 | $ | — | ||||||
|
|
|
|
|
|
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2015 was as follows:
Internet Software & Services | 19.6 | % | ||
Biotechnology | 13.2 | |||
Pharmaceuticals | 13.1 | |||
Textiles, Apparel & Luxury Goods | 8.4 | |||
Internet & Catalog Retail | 7.2 | |||
Specialty Retail | 6.1 | |||
IT Services | 4.7 | |||
Semiconductors & Semiconductor Equipment | 4.3 | |||
Automobiles | 3.8 | |||
Affiliated Money Market Mutual Fund | 3.0 | |||
Technology Hardware, Storage & Peripherals | 2.9 | |||
Auto Components | 2.7 | |||
Machinery | 2.5 | % | ||
Insurance | 2.2 | |||
Health Care Equipment & Supplies | 1.9 | |||
Electronic Equipment & Instruments | 1.5 | |||
Hotels, Restaurants & Leisure | 1.5 | |||
Trading Companies & Distributors | 1.2 | |||
Capital Markets | 1.0 | |||
|
| |||
100.8 | ||||
Liabilities in excess of other assets | (0.8 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
12 |
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
FINANCIAL STATEMENTS
(UNAUDITED)
SEMIANNUAL REPORT · APRIL 30, 2015
Prudential Jennison Global Opportunities Fund
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets |
| |||
Investments at value: | ||||
Unaffiliated investments (cost $55,662,220) | $ | 71,882,046 | ||
Affiliated investments (cost $2,182,338) | 2,182,338 | |||
Receivable for Series shares sold | 998,522 | |||
Receivable for investments sold | 501,477 | |||
Dividend receivable | 98,170 | |||
Tax reclaim receivable | 10,400 | |||
Prepaid expenses | 275 | |||
|
| |||
Total assets | 75,673,228 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 1,947,340 | |||
Payable for Series shares reacquired | 136,349 | |||
Management fee payable | 53,636 | |||
Accrued expenses and other liabilities | 46,231 | |||
Distribution fee payable | 12,272 | |||
Affiliated transfer agent fee payable | 1,701 | |||
|
| |||
Total liabilities | 2,197,529 | |||
|
| |||
Net Assets | $ | 73,475,699 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 48,169 | ||
Paid-in capital in excess of par | 58,097,971 | |||
|
| |||
58,146,140 | ||||
Accumulated net investment loss | (607,552 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (283,789 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 16,220,900 | |||
|
| |||
Net assets, April 30, 2015 | $ | 73,475,699 | ||
|
|
See Notes to Financial Statements.
14 |
Class A |
| |||
Net asset value and redemption price per share | $ | 15.24 | ||
Maximum sales charge (5.50% of offering price) | 0.89 | |||
|
| |||
Maximum offering price to public | $ | 16.13 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 14.88 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share | $ | 15.35 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 15.36 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 15 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Income |
| |||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $11,070) | $ | 209,130 | ||
Affiliated dividend income | 779 | |||
|
| |||
Total income | 209,909 | |||
|
| |||
Expenses | ||||
Management fee | 282,376 | |||
Distribution fee—Class A | 33,363 | |||
Distribution fee—Class C | 31,850 | |||
Custodian and accounting fees | 43,000 | |||
Registration fees | 27,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $4,500) | 26,000 | |||
Shareholders’ reports | 16,000 | |||
Legal fees and expenses | 14,000 | |||
Audit fee | 13,000 | |||
Directors’ fees | 7,000 | |||
Commitment fee on syndicated credit agreement | 1,000 | |||
Insurance expenses | 1,000 | |||
Miscellaneous | 8,210 | |||
|
| |||
Total expenses | 503,799 | |||
Less: Expense reimbursement | (15,303 | ) | ||
Distribution fee waiver—Class A | (5,561 | ) | ||
|
| |||
Net expenses | 482,935 | |||
|
| |||
Net investment loss | (273,026 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 973,500 | |||
Foreign currency transactions | (44,509 | ) | ||
|
| |||
928,991 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 4,193,976 | |||
Foreign currencies | 2,044 | |||
|
| |||
4,196,020 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 5,125,011 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 4,851,985 | ||
|
|
See Notes to Financial Statements.
16 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | Year Ended October 31, 2014 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (273,026 | ) | $ | (392,170 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 928,991 | (356,367 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 4,196,020 | 4,132,098 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 4,851,985 | 3,383,561 | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 12,456,945 | 32,490,687 | ||||||
Cost of shares reacquired | (4,210,595 | ) | (12,408,615 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 8,246,350 | 20,082,072 | ||||||
|
|
|
| |||||
Total increase | 13,098,335 | 23,465,633 | ||||||
Net Assets: | ||||||||
Beginning of period | 60,377,364 | 36,911,731 | ||||||
|
|
|
| |||||
End of period | $ | 73,475,699 | $ | 60,377,364 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Global 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 six series: Prudential Jennison Global Opportunities Fund (the “Series”), Prudential Jennison Global Infrastructure Fund, Prudential International Equity Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund and Prudential Emerging Markets Debt Local Currency Fund. These financial statements relate to 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 seek long-term growth of capital.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services – Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund and the Series consistently follow such policies in the preparation of their financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
18 |
Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Prudential Jennison Global Opportunities Fund | 19 |
Notes to Financial Statements
(Unaudited) continued
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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.
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
20 |
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, forward currency contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the 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.
Concentration of Risk: Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.
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 that may differ from actual.
Net investment income or loss (other than distribution fees, which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share 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
Prudential Jennison Global Opportunities Fund | 21 |
Notes to Financial Statements
(Unaudited) continued
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 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 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 29, 2016 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, Class Q 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 Q and Class Z shares of the Series.
22 |
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 29, 2016.
PIMS has advised the Series that they received $66,494 in front-end sales charges resulting from sales of Class A shares during the period ended April 30, 2015. 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 for the six months ended April 30, 2015, it received $524 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
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, 2015 were $26,253,765 and $19,346,999, respectively.
Prudential Jennison Global Opportunities Fund | 23 |
Notes to Financial Statements
(Unaudited) continued
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2015 were as follows:
Tax Basis | $ | 57,967,345 | ||
|
| |||
Appreciation | 16,524,810 | |||
Depreciation | (427,771 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 16,097,039 | ||
|
|
The book basis may differ from tax basis due to certain tax related adjustments.
Management has analyzed the Series’ tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Note 6. Capital
The Series offers Class A, Class C, Class Q 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 Q and 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, 2015, Prudential owned 707 shares of Class Q and 1,725,023 shares of Class Z.
24 |
There are 865 million shares of common stock at $.01 par value per share, designated Class A, Class C, Class Q and Class Z common stock each of which consists of 250 million, 65 million, 250, and 300 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 509,721 | $ | 7,727,630 | |||||
Shares reacquired | (166,601 | ) | (2,412,988 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 343,120 | 5,314,642 | ||||||
Shares issued upon conversion from Class Z | 2,593 | 40,533 | ||||||
Shares reacquired upon conversion into Class Z | (12,612 | ) | (189,496 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 333,101 | $ | 5,165,679 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 1,366,347 | $ | 19,010,157 | |||||
Shares reacquired | (602,003 | ) | (8,185,086 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 764,344 | 10,825,071 | ||||||
Shares issued upon conversion from Class Z | (37,512 | ) | (510,417 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 726,832 | $ | 10,314,654 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 194,831 | $ | 2,876,942 | |||||
Shares reacquired | (31,611 | ) | (452,126 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 163,220 | 2,424,816 | ||||||
Shares reacquired upon conversion into Class Z | (4,609 | ) | (62,682 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 158,611 | $ | 2,362,134 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 329,291 | $ | 4,481,893 | |||||
Shares reacquired | (40,122 | ) | (536,545 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 289,169 | 3,945,348 | ||||||
Shares reacquired upon conversion into Class Z | (4,058 | ) | (53,560 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 285,111 | $ | 3,891,788 | |||||
|
|
|
| |||||
Class Q | ||||||||
Six months ended April 30, 2015*: | ||||||||
Shares sold | 707 | $ | 10,000 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 707 | $ | 10,000 | |||||
|
|
|
|
Prudential Jennison Global Opportunities Fund | 25 |
Notes to Financial Statements
(Unaudited) continued
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 121,705 | $ | 1,842,373 | |||||
Shares reacquired | (93,735 | ) | (1,345,481 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 27,970 | 496,892 | ||||||
Shares issued upon conversion from Class A and C | 17,006 | 252,178 | ||||||
Shares reacquired upon conversion into Class A | (2,574 | ) | (40,533 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 42,402 | $ | 708,537 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 655,167 | $ | 8,998,637 | |||||
Shares reacquired | (273,142 | ) | (3,686,984 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 382,025 | 5,311,653 | ||||||
Shares reacquired upon conversion into Class A | 41,268 | 563,977 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 423,293 | $ | 5,875,630 | |||||
|
|
|
|
* | Commencement of offering was December 22, 2014. |
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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 six months ended April 30, 2015.
26 |
Note 8. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
Prudential Jennison Global Opportunities Fund | 27 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||
2015(b) | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $14.08 | $12.94 | $9.86 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (.07 | ) | (.11 | ) | (.06 | ) | (.02 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.23 | 1.25 | 3.14 | (.12 | ) | |||||||||||||||
Total from investment operations | 1.16 | 1.14 | 3.08 | (.14 | ) | |||||||||||||||
Net asset value, end of period | $15.24 | $14.08 | $12.94 | $9.86 | ||||||||||||||||
Total Return(c): | 8.24% | 8.81% | 31.24% | (1.40)% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $27,968 | $21,150 | $10,035 | $3,898 | ||||||||||||||||
Average net assets (000) | $22,427 | $19,352 | $4,982 | $2,967 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.60% | (e) | 1.60% | 1.60% | 1.60% | (e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.70% | (e) | 1.71% | 2.19% | 3.10% | (e) | ||||||||||||||
Net investment loss | (.92)% | (e) | (.78)% | (.54)% | (.30)% | (e) | ||||||||||||||
Portfolio turnover rate | 31% | (f) | 68% | 70% | 48% | (f) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the year.
(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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
28 |
Class C Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||
2015(b) | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $13.79 | $12.77 | $9.81 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (.12 | ) | (.21 | ) | (.14 | ) | (.06 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.21 | 1.23 | 3.10 | (.13 | ) | |||||||||||||||
Total from investment operations | 1.09 | 1.02 | 2.96 | (.19 | ) | |||||||||||||||
Net asset value, end of period | $14.88 | $13.79 | $12.77 | $9.81 | ||||||||||||||||
Total Return(c): | 7.90% | 7.99% | 30.17% | (1.90)% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $8,533 | $5,723 | $1,659 | $593 | ||||||||||||||||
Average net assets (000) | $6,423 | $4,361 | $950 | $300 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.35% | (e) | 2.35% | 2.35% | 2.35% | (e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.40% | (e) | 2.41% | 2.89% | 3.85% | (e) | ||||||||||||||
Net investment loss | (1.65)% | (e) | (1.54)% | (1.26)% | (.97)% | (e) | ||||||||||||||
Portfolio turnover rate | 31% | (f) | 68% | 70% | 48% | (f) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the year.
(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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 29 |
Financial Highlights
(Unaudited) continued
Class Q Shares | ||||
December 22, 2014(a) through April 30, 2015 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning Of Period | $14.15 | |||
Income from investment operations: | ||||
Net investment loss | (.03 | ) | ||
Net realized and unrealized gain on investment and foreign currency transactions | 1.23 | |||
Total from investment operations | 1.20 | |||
Net asset value, end of period | $15.35 | |||
Total Return(c): | 8.48% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $11 | |||
Average net assets (000) | $10 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 1.29% | (e) | ||
Expenses before waivers and/or expense reimbursement | 1.29% | (e) | ||
Net investment income | (.54)% | (e) | ||
Portfolio turnover rate | 31% | (f) |
(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 of less than one full year are not annualized.
(d) Does not include expenses of the underlying portfolio in which the Series invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
30 |
Class Z Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||
2015(b) | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $14.17 | $12.99 | $9.87 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (.05 | ) | (.08 | ) | (.03 | ) | - | (e) | ||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.24 | 1.26 | 3.15 | (.13 | ) | |||||||||||||||
Total from investment operations | 1.19 | 1.18 | 3.12 | (.13 | ) | |||||||||||||||
Net asset value, end of period | $15.36 | $14.17 | $12.99 | $9.87 | ||||||||||||||||
Total Return(c): | 8.40% | 9.08% | 31.61% | (1.30)% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $36,964 | $33,504 | $25,219 | $15,002 | ||||||||||||||||
Average net assets (000) | $34,413 | $30,965 | $18,340 | $14,655 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.35% | (f) | 1.35% | 1.35% | 1.35% | (f) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.40% | (f) | 1.42% | 1.89% | 2.72% | (f) | ||||||||||||||
Net investment loss | (.69)% | (f) | (.56)% | (.25)% | (.03)% | (f) | ||||||||||||||
Portfolio turnover rate | 31% | (g) | 68% | 70% | 48% | (g) |
(a) Commencement of Series.
(b) Calculated based on average shares outstanding during the year.
(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) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 31 |
Results of Proxy Voting
(Unaudited)
At a special meeting of shareholders held on November 26, 2014, shareholders of the Prudential World Fund, Inc., which is comprised of Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund, Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund and Prudential Emerging Markets Debt Local Currency Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:
Proposal: To elect twelve Directors:
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Ellen S. Alberding | ||||||||||||
FOR | 40,430,355.469 | 98.29 | % | 69.20 | % | |||||||
WITHHELD | 703,232.767 | 1.71 | % | 1.20 | % | |||||||
Kevin J. Bannon | ||||||||||||
FOR | 40,500,752.683 | 98.46 | % | 69.32 | % | |||||||
WITHHELD | 632,835.553 | 1.54 | % | 1.08 | % | |||||||
Linda W. Bynoe | ||||||||||||
FOR | 40,463,969.413 | 98.37 | % | 69.25 | % | |||||||
WITHHELD | 669,618.823 | 1.63 | % | 1.15 | % | |||||||
Keith F. Hartstein | ||||||||||||
FOR | 40,502,519.384 | 98.47 | % | 69.32 | % | |||||||
WITHHELD | 631,068.852 | 1.53 | % | 1.08 | % | |||||||
Michael S. Hyland | ||||||||||||
FOR | 40,454,955.187 | 98.35 | % | 69.24 | % | |||||||
WITHHELD | 678,633.049 | 1.65 | % | 1.16 | % | |||||||
Stephen P. Munn | ||||||||||||
FOR | 40,350,089.935 | 98.10 | % | 69.06 | % | |||||||
WITHHELD | 783,498.301 | 1.90 | % | 1.34 | % | |||||||
James E. Quinn | ||||||||||||
FOR | 40,472,965.987 | 98.39 | % | 69.27 | % | |||||||
WITHHELD | 660,622.249 | 1.61 | % | 1.13 | % | |||||||
Richard A. Redeker | ||||||||||||
FOR | 40,445,890.390 | 98.33 | % | 69.22 | % | |||||||
WITHHELD | 687,697.846 | 1.67 | % | 1.18 | % | |||||||
Stephen G. Stoneburn | ||||||||||||
FOR | 40,484,781.265 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 648,806.971 | 1.58 | % | 1.11 | % | |||||||
Grace C. Torres | ||||||||||||
FOR | 40,481,896.899 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 651,691.337 | 1.58 | % | 1.11 | % |
32 |
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Stuart S. Parker | ||||||||||||
FOR | 40,486,057.825 | 98.43 | % | 69.29 | % | |||||||
WITHHELD | 647,530.411 | 1.57 | % | 1.11 | % | |||||||
Scott E. Benjamin | ||||||||||||
FOR | 40,475,216.348 | 98.40 | % | 69.27 | % | |||||||
WITHHELD | 658,371.888 | 1.60 | % | 1.13 | % |
The special meeting of shareholders of the Fund held on November 26, 2014, was adjourned to December 3, 2014, and further adjourned to December 10, 2014, and January 9, 2015 to permit further solicitation of proxies on the proposal noted below.
An abstention or a broker non-vote is considered present for purposes of determining a quorum but has the effect of a vote against such matters. At the special meeting of shareholders held on January 9, 2015, insufficient votes were obtained to approve the following proposal:
Proposal: To permit Prudential Investments LLC (PI) to enter into or make material changes to the Fund’s subadvisory agreements with subadvisers that are wholly-owned subsidiaries of PI or a sister company of PI (wholly-owned subadvisers) without shareholder approval.
SHARES VOTED | % OF VOTED | % OF TOTAL | ||||||||||
FOR | 2,166,842.345 | 56.265 | % | 49.425 | % | |||||||
AGAINST | 12,279.608 | 0.319 | % | 0.280 | % | |||||||
ABSTAIN | 18,649.840 | 0.485 | % | 0.425 | % | |||||||
BROKER NON-VOTE | 1,653,370.121 | 42.931 | % | 37.712 | % | |||||||
TOTAL | 3,851,141.914 | 100.00 | % | 87.842 | % |
Prudential Jennison Global Opportunities Fund | 33 |
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 |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Chad A. Earnst, Chief Compliance Officer • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
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 | ||
| ||||
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 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 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
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 | Q | Z | ||||
NASDAQ | PRJAX | PRJCX | PRJQX | PRJZX | ||||
CUSIP | 743969719 | 743969693 | 743969594 | 743969685 |
MF214E2 0278724-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON INTERNATIONAL OPPORTUNITIES FUND
SEMIANNUAL REPORT · APRIL 30, 2015
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC. Jennison Associates is a registered investment adviser. Both are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, Jennison Associates, Jennison, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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June 15, 2015
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, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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
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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 |
| |||||||||||
Six Months | One Year | Since Inception | ||||||||||
Class A | 6.20 | % | 6.77 | % | 44.34% (6/5/12) | |||||||
Class C | 5.93 | 6.01 | 41.38 (6/5/12) | |||||||||
Class Z | 6.40 | 7.05 | 45.43 (6/5/12) | |||||||||
MSCI All Country World Index ex-US | 5.56 | 2.63 | 45.06 | |||||||||
Lipper International Multi-Cap Core Funds Average* | 5.93 | 2.36 | 50.22 | |||||||||
Lipper International Multi-Cap Growth Funds Average* | 6.30 | 3.49 | 46.22 | |||||||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 |
| |||||||||||
One Year | Since Inception | |||||||||||
Class A | –3.67 | % | 11.04% (6/5/12) | |||||||||
Class C | 0.13 | 12.44 (6/5/12) | ||||||||||
Class Z | 2.15 | 13.56 (6/5/12) | ||||||||||
MSCI All Country World Index ex-US | –1.01 | 12.06 | ||||||||||
Lipper International Multi-Cap Core Funds Average* | –0.58 | 13.83 | ||||||||||
Lipper International Multi-Cap Growth Funds Average* | –0.17 | 12.82 |
Source: Prudential Investments LLC and Lipper Inc.
Inception returns are provided for any share class with less than 10 calendar years of returns.
*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.
2 | Visit our website at www.prudentialfunds.com |
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Z | ||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | |||
Contingent deferred sales charge (CDSC) | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | |||
Annual distribution and service (12b-1) fees | .30% (.25% currently) | 1% | None |
Benchmark Definitions
MSCI All Country World ex-US Index
The Morgan Stanley Capital International All Country World ex-US Index (MSCI ACWI ex-US Index) is an unmanaged free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the US. The MSCI ACWI ex US Index consists of 45 country indexes comprising 22 developed and 23 emerging market country indexes. The developed market country indexes included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The emerging market country indexes included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates.
Lipper International Multi-Cap Core Funds Average
The Lipper International Multi-Cap Core Funds Average (Lipper Average) is based on the average return of all funds in the Lipper International Multi-Cap Core Funds category for the periods noted. Funds in the Lipper Average, 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
The Lipper International Multi-Cap Growth Funds Average (Lipper Average) is based on the average return of all funds in the Lipper International Multi-Cap Core Funds category for the periods noted. Funds in the Lipper Average, 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.
Prudential Jennison International Opportunities 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 Averages reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Index and the Lipper Averages are measured from the closest month-end to the inception date for the indicated share class.
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 | ||||
Tencent Holdings Ltd., Internet Software & Services | 5.6 | % | ||
Dassault Systemes SA, Software | 4.2 | |||
Inditex SA, Specialty Retail | 3.5 | |||
Vipshop Holdings Ltd., ADS, Internet & Catalog Retail | 3.3 | |||
Shire PLC, Pharmaceuticals | 3.2 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/15 | ||||
Pharmaceuticals | 22.9 | % | ||
Internet Software & Services | 11.9 | |||
Machinery | 6.4 | |||
Internet & Catalog Retail | 6.3 | |||
Household Products | 5.0 |
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, 2014, at the beginning of the period, and held through the six-month period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of
Prudential Jennison International Opportunities Fund | 5 |
Fees and Expenses (continued)
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.
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, 2014 | Ending Account April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,062.00 | 1.60 | % | $ | 8.18 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.86 | 1.60 | % | $ | 8.00 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,059.30 | 2.35 | % | $ | 12.00 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.14 | 2.35 | % | $ | 11.73 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,064.00 | 1.35 | % | $ | 6.91 | |||||||||
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, 2015, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2015 (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 |
The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||||||
A | 1.77 | % | 1.60 | % | ||||
C | 2.47 | 2.35 | ||||||
Z | 1.47 | 1.35 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential Jennison International Opportunities Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 99.5% | ||||||||
COMMON STOCKS 99.5% | ||||||||
Argentina 1.8% | ||||||||
MercadoLibre, Inc. | 6,542 | $ | 931,123 | |||||
China 14.4% | ||||||||
Alibaba Group Holding Ltd., ADR* | 16,389 | 1,332,262 | ||||||
JD.com, Inc., ADR* | 47,860 | 1,606,182 | ||||||
Tencent Holdings Ltd. | 145,776 | 3,008,653 | ||||||
Vipshop Holdings Ltd., ADS* | 61,918 | 1,751,660 | ||||||
|
| |||||||
7,698,757 | ||||||||
Denmark 1.8% | ||||||||
Novo Nordisk A/S (Class B Stock) | 16,937 | 950,855 | ||||||
France 5.0% | ||||||||
Dassault Systemes SA | 29,185 | 2,248,893 | ||||||
Kering | 2,362 | 436,821 | ||||||
|
| |||||||
2,685,714 | ||||||||
Germany 8.9% | ||||||||
Bayer AG | 10,952 | 1,576,352 | ||||||
Continental AG | 6,955 | 1,629,940 | ||||||
KUKA AG | 10,576 | 751,334 | ||||||
Wirecard AG | 18,422 | 809,079 | ||||||
|
| |||||||
4,766,705 | ||||||||
Indonesia 0.5% | ||||||||
PT Tower Bersama Infrastructure Tbk | 332,884 | 217,642 | ||||||
PT Tower Bersama Infrastructure Tbk, 144A(a) | 72,770 | 47,578 | ||||||
|
| |||||||
265,220 | ||||||||
Ireland 3.2% | ||||||||
Shire PLC | 21,127 | 1,716,845 | ||||||
Italy 6.0% | ||||||||
Anima Holding SpA* | 53,995 | 480,750 | ||||||
Anima Holding SpA, 144A*(a) | 8,700 | 77,461 | ||||||
Azimut Holding SpA | 18,903 | 554,855 | ||||||
Brembo SpA | 15,968 | 638,763 | ||||||
Luxottica Group SpA | 22,138 | 1,457,941 | ||||||
|
| |||||||
3,209,770 |
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan 19.0% | ||||||||
FANUC Corp. | 6,371 | $ | 1,401,382 | |||||
Fuji Heavy Industries Ltd. | 37,925 | 1,268,213 | ||||||
Minebea Co. Ltd. | 82,180 | 1,260,077 | ||||||
Murata Manufacturing Co. Ltd. | 11,520 | 1,623,329 | ||||||
Ono Pharmaceutical Co. Ltd. | 7,921 | 858,472 | ||||||
Pigeon Corp. | 53,565 | 1,418,534 | ||||||
Sysmex Corp. | 18,812 | 1,040,901 | ||||||
Unicharm Corp. | 50,155 | 1,262,410 | ||||||
|
| |||||||
10,133,318 | ||||||||
Mexico 0.9% | ||||||||
Alsea SAB de CV* | 141,758 | 425,958 | ||||||
Alsea SAB de CV, 144A*(a) | 23,432 | 70,409 | ||||||
|
| |||||||
496,367 | ||||||||
Philippines 1.8% | ||||||||
Universal Robina Corp. | 195,771 | 954,696 | ||||||
South Africa 3.5% | ||||||||
Aspen Pharmacare Holdings Ltd. | 36,283 | 1,103,350 | ||||||
Aspen Pharmacare Holdings Ltd., 144A(a) | 1,095 | 33,298 | ||||||
Mr. Price Group Ltd. | 33,803 | 721,698 | ||||||
|
| |||||||
1,858,346 | ||||||||
South Korea 1.2% | ||||||||
Amorepacific Corp. | 181 | 655,787 | ||||||
Spain 3.5% | ||||||||
Inditex SA | 57,736 | 1,852,697 | ||||||
Sweden 2.9% | ||||||||
Assa Abloy AB (Class B Stock) | 15,048 | 872,992 | ||||||
Hexagon AB (Class B Stock) | 17,626 | 652,871 | ||||||
|
| |||||||
1,525,863 | ||||||||
Switzerland 2.8% | ||||||||
Novartis AG | 14,702 | 1,500,665 | ||||||
Thailand 0.7% | ||||||||
Minor International PCL | 346,659 | 347,027 |
See Notes to Financial Statements.
10 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom 16.0% | ||||||||
Aldermore Group PLC* | 39,099 | $ | 141,039 | |||||
Aldermore Group PLC, 144A*(a) | 32,490 | 117,199 | ||||||
ARM Holdings PLC | 80,143 | 1,361,732 | ||||||
Ashtead Group PLC | 63,198 | 1,083,686 | ||||||
AstraZeneca PLC | 13,883 | 952,737 | ||||||
BTG PLC* | 49,802 | 549,516 | ||||||
Burberry Group PLC | 20,462 | 545,493 | ||||||
ITV PLC | 254,683 | 988,805 | ||||||
Just Eat PLC* | 76,176 | 534,179 | ||||||
Just Eat PLC, 144A*(a) | 79,394 | 556,744 | ||||||
OneSavings Bank PLC* | 62,307 | 277,358 | ||||||
St. James’s Place PLC | 105,615 | 1,440,654 | ||||||
|
| |||||||
8,549,142 | ||||||||
United States 5.6% | ||||||||
Actavis PLC* | 5,135 | 1,452,486 | ||||||
Jazz Pharmaceuticals PLC* | 8,585 | 1,534,140 | ||||||
|
| |||||||
2,986,626 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 53,085,523 | ||||||
|
| |||||||
Units | ||||||||
WARRANTS* | ||||||||
Thailand | ||||||||
Minor International PCL, expiring 11/03/17 | 15,664 | 2,129 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 53,087,652 | ||||||
|
| |||||||
Shares | ||||||||
SHORT-TERM INVESTMENT 0.5% | ||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund (cost $271,337) (Note 3)(b) | 271,337 | 271,337 | ||||||
|
| |||||||
TOTAL INVESTMENTS 100.0% |
| 53,358,989 | ||||||
Other assets in excess of liabilities |
| 6,819 | ||||||
|
| |||||||
NET ASSETS 100.0% |
| $ | 53,365,808 | |||||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (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.
ADR—American Depositary Receipt
ADS—American Depositary Share
* | Non-income producing security. |
(a) | Indicates a security or securities that have been deemed illiquid. |
(b) | 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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 931,123 | $ | — | $ | — | ||||||
China | 4,690,104 | 3,008,653 | — | |||||||||
Denmark | — | 950,855 | — | |||||||||
France | — | 2,685,714 | — | |||||||||
Germany | — | 4,766,705 | — | |||||||||
Indonesia | 217,642 | 47,578 | — | |||||||||
Ireland | — | 1,716,845 | — | |||||||||
Italy | — | 3,209,770 | — | |||||||||
Japan | — | 10,133,318 | — | |||||||||
Mexico | 425,958 | 70,409 | — | |||||||||
Philippines | — | 954,696 | — | |||||||||
South Africa | — | 1,858,346 | — | |||||||||
South Korea | — | — | 655,787 |
See Notes to Financial Statements.
12 |
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
Spain | $ | — | $ | 1,852,697 | $ | — | ||||||
Sweden | — | 1,525,863 | — | |||||||||
Switzerland | — | 1,500,665 | — | |||||||||
Thailand | — | 347,027 | — | |||||||||
United Kingdom | 418,397 | 8,130,745 | — | |||||||||
United States | 2,986,626 | — | — | |||||||||
Warrants | ||||||||||||
Thailand | 2,129 | — | — | |||||||||
Affiliated Money Market Mutual Fund | 271,337 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 9,943,316 | $ | 42,759,886 | $ | 655,787 | ||||||
|
|
|
|
|
|
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Common Stocks | ||||
Balance as of 10/31/14 | $ | — | ||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation)* | 85,803 | |||
Purchases | 569,984 | |||
Sales | — | |||
Accrued discount/premium | — | |||
Transfers into Level 3 | — | |||
Transfers out of Level 3 | — | |||
|
| |||
Balance as of 4/30/15 | $ | 655,787 | ||
|
|
* | Of which, $85,803 was relating to securities held at the reporting period end. |
Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by Board, which contain unobservable inputs as follows:
Level 3 Securities | Fair Value as of | Valuation | Unobservable Inputs | |||
Common Stocks | $655,787 | Stale pricing | Unadjusted last trade price |
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 13 |
Portfolio of Investments
as of April 30, 2015 (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, 2015 was as follows:
Pharmaceuticals | 22.9 | % | ||
Internet Software & Services | 11.9 | |||
Machinery | 6.4 | |||
Internet & Catalog Retail | 6.3 | |||
Household Products | 5.0 | |||
Specialty Retail | 4.8 | |||
Textiles, Apparel & Luxury Goods | 4.6 | |||
Auto Components | 4.3 | |||
Electronic Equipment, Instruments & Components | 4.3 | |||
Software | 4.2 | |||
Insurance | 2.7 | |||
Semiconductors & Semiconductor Equipment | 2.6 | |||
Automobiles | 2.4 | |||
Capital Markets | 2.1 | |||
Trading Companies & Distributors | 2.0 | % | ||
Health Care Equipment & Supplies | 1.9 | |||
Media | 1.9 | |||
Food Products | 1.8 | |||
Building Products | 1.6 | |||
Hotels, Restaurants & Leisure | 1.6 | |||
IT Services | 1.5 | |||
Personal Products | 1.2 | |||
Thrifts & Mortgage Finance | 0.5 | |||
Affiliated Money Market Mutual Fund | 0.5 | |||
Wireless Telecommunication Services | 0.5 | |||
Banks | 0.5 | |||
|
| |||
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 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, 2015 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for | Asset Derivatives | Liability Derivatives | ||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Equity contracts | Unaffiliated investments | $ | 2,129 | — | $ | — |
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2015 are as follows:
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Warrants* | |||
Equity contracts | $ | 2,129 |
* | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
See Notes to Financial Statements.
14 |
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
FINANCIAL STATEMENTS
(UNAUDITED)
SEMIANNUAL REPORT · APRIL 30, 2015
Prudential Jennison International Opportunities Fund
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $44,051,851) | $ | 53,087,652 | ||
Affiliated investments (cost $271,337) | 271,337 | |||
Cash | 18,115 | |||
Foreign currency, at value (cost $12,291) | 12,290 | |||
Receivable for Series shares sold | 168,342 | |||
Dividends receivable | 118,741 | |||
Receivable for investments sold | 55,939 | |||
Tax reclaim receivable | 37,261 | |||
Prepaid expenses | 244 | |||
|
| |||
Total assets | 53,769,921 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 282,922 | |||
Accrued expenses | 78,925 | |||
Management fee payable | 36,917 | |||
Payable for Series shares reacquired | 3,678 | |||
Distribution fee payable | 1,225 | |||
Affiliated transfer agent fee payable | 446 | |||
|
| |||
Total liabilities | 404,113 | |||
|
| |||
Net Assets | $ | 53,365,808 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 38,239 | ||
Paid-in capital in excess of par | 47,132,233 | |||
|
| |||
47,170,472 | ||||
Accumulated net investment loss | (125,407 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (2,712,473 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 9,033,216 | |||
|
| |||
Net assets, April 30, 2015 | $ | 53,365,808 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value and redemption price per share | $ | 13.87 | ||
Maximum sales charge (5.50% of offering price) | 0.81 | |||
|
| |||
Maximum offering price to public | $ | 14.68 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 13.58 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 13.97 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 17 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Income | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $25,718) | $ | 250,801 | ||
Affiliated dividend income | 616 | |||
|
| |||
Total income | 251,417 | |||
|
| |||
Expenses | ||||
Management fee | 223,265 | |||
Distribution fee—Class A | 3,202 | |||
Distribution fee—Class C | 2,799 | |||
Custodian and accounting fees | 56,000 | |||
Registration fees | 21,000 | |||
Audit fee | 13,000 | |||
Shareholders’ reports | 11,000 | |||
Legal fees and expenses | 10,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $1,100) | 10,000 | |||
Directors’ fees | 7,000 | |||
Miscellaneous | 13,750 | |||
|
| |||
Total expenses | 371,016 | |||
Less: Expense reimbursement | (30,121 | ) | ||
Distribution fee waiver-Class A | (534 | ) | ||
|
| |||
Net expenses | 340,361 | |||
|
| |||
Net investment loss | (88,944 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized loss on: | ||||
Investment transactions | (1,262,531 | ) | ||
Foreign currency transactions | (18,652 | ) | ||
|
| |||
(1,281,183 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 4,477,052 | |||
Foreign currencies | 372 | |||
|
| |||
4,477,424 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 3,196,241 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 3,107,297 | ||
|
|
See Notes to Financial Statements.
18 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | Year Ended | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (88,944 | ) | $ | (62,712 | ) | ||
Net realized loss on investment and foreign currency transactions | (1,281,183 | ) | (1,451,522 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 4,477,424 | 1,186,368 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 3,107,297 | (327,866 | ) | |||||
|
|
|
| |||||
Distributions from net realized gains (Note 1) | ||||||||
Class A | — | (37,150 | ) | |||||
Class C | — | (8,564 | ) | |||||
Class Z | — | (594,595 | ) | |||||
|
|
|
| |||||
— | (640,309 | ) | ||||||
|
|
|
| |||||
Series share transactions (Note 6) | ||||||||
Net proceeds from shares sold | 4,807,712 | 34,825,121 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | — | 625,061 | ||||||
Cost of shares reacquired | (3,842,954 | ) | (2,744,792 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 964,758 | 32,705,390 | ||||||
|
|
|
| |||||
Total increase | 4,072,055 | 31,737,215 | ||||||
Net Assets: | ||||||||
Beginning of period | 49,293,753 | 17,556,538 | ||||||
|
|
|
| |||||
End of period | $ | 53,365,808 | $ | 49,293,753 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 19 |
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 six series: Prudential Jennison International Opportunities Fund (the “Series”), Prudential Jennison Global Infrastructure Fund, Prudential International Equity Fund, Prudential Jennison Global Opportunities Fund, Prudential Emerging Markets Debt Local Currency Fund and Prudential Jennison Emerging Markets Equity 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 seek long-term growth of capital.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services – Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Series consistently follows such policies in the preparation of its financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table
20 |
following the Portfolio of Investments. Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Prudential Jennison International Opportunities Fund | 21 |
Notes to Financial Statements
(Unaudited) continued
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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.
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
22 |
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 sales and maturities of short-term securities and forward currency contracts, disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the difference between the amounts of interest, dividends 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.
Concentration of Risk: Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.
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. The Series holds such warrants and rights as long positions until exercised, sold or expired. Warrants and rights are valued at fair value in accordance with the Board of Directors’ 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 an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.
Net investment income or loss (other than 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.
Prudential Jennison International Opportunities Fund | 23 |
Notes to Financial Statements
(Unaudited) continued
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.
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 accrued daily and payable monthly at an annual rate of .90% of the Series’ average daily net assets.
PI has contractually agreed through February 29, 2016 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.
24 |
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 29, 2016.
PIMS has advised the Series that it has received $10,392 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2015. From these fees, PIMS paid such sales charges to broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
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 (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, 2015 were $19,440,193 and $18,024,333, respectively.
Prudential Jennison International Opportunities Fund | 25 |
Notes to Financial Statements
(Unaudited) continued
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2015 were as follows:
Tax Basis | $ | 44,333,387 | ||
|
| |||
Appreciation | 9,367,930 | |||
Depreciation | (342,328 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 9,025,602 | ||
|
|
The book basis may differ from tax basis due to certain tax related adjustments.
For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2014 of approximately $1,421,000 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.
The Fund elected to treat certain late-year ordinary income losses of approximately $36,000 as having been incurred in the following fiscal year (October 31, 2015).
Management has analyzed the Series’ tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
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.
26 |
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, 2015, Prudential Financial, Inc. through its affiliates owned 1,041 Class C shares and 1,041,033 Class Z shares of the Series.
There are 600 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 200 million authorized shares.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 114,119 | $ | 1,569,824 | |||||
Shares reacquired | (4,174 | ) | (54,884 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 109,945 | $ | 1,514,940 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 93,987 | $ | 1,237,390 | |||||
Shares issued in reinvestment of dividends and distributions | 2,534 | 33,628 | ||||||
Shares reacquired | (21,896 | ) | (286,332 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 74,625 | $ | 984,686 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 30,791 | $ | 412,419 | |||||
Shares reacquired | (2,250 | ) | (28,309 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 28,541 | $ | 384,110 | |||||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 25,563 | $ | 337,317 | |||||
Shares issued in reinvestment of dividends and distributions | 627 | 8,234 | ||||||
Shares reacquired | (3,468 | ) | (43,798 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 22,722 | $ | 301,753 | |||||
|
|
|
|
Prudential Jennison International Opportunities Fund | 27 |
Notes to Financial Statements
(Unaudited) continued
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 209,637 | $ | 2,825,469 | |||||
Shares reacquired | (280,259 | ) | (3,759,761 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (70,622 | ) | $ | (934,292 | ) | |||
|
|
|
| |||||
Year ended October 31, 2014: | ||||||||
Shares sold | 2,499,565 | $ | 33,250,414 | |||||
Shares issued in reinvestment of dividends and distributions | 43,784 | 583,199 | ||||||
Shares reacquired | (180,716 | ) | (2,414,662 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,362,633 | $ | 31,418,951 | |||||
|
|
|
|
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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 six months ended April 30, 2015.
Note 8. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
28 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||
2015 | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $13.06 | $13.51 | $11.30 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (.02 | ) | (.06 | ) | (.01 | ) | (.01 | ) | ||||||||||||
Net realized and unrealized gain on investment transactions | .83 | .09 | 2.27 | 1.31 | ||||||||||||||||
Total from investment operations | .81 | .03 | 2.26 | 1.30 | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | - | (.05 | ) | - | |||||||||||||||
Distributions from net realized gains | - | (.48 | ) | - | - | |||||||||||||||
Total dividends and distributions | - | (.48 | ) | (.05 | ) | - | ||||||||||||||
Net asset value, end of period | $13.87 | $13.06 | $13.51 | $11.30 | ||||||||||||||||
Total Return(c): | 6.20% | .20% | 20.04% | 13.00% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $3,473 | $1,833 | $889 | $94 | ||||||||||||||||
Average net assets (000) | $2,153 | $1,467 | $356 | $32 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.60% | (e) | 1.60% | 1.60% | 1.60% | (e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.77% | (e) | 1.90% | 3.16% | 4.42% | (e) | ||||||||||||||
Net investment loss | (.47)% | (e) | (.48)% | (.08)% | (.61)% | (e) | ||||||||||||||
Portfolio turnover rate | 36% | (f) | 61% | 86% | 28% | (f) |
(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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 29 |
Financial Highlights
(Unaudited) continued
Class C Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||
2015 | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $12.82 | $13.37 | $11.27 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss | (.07 | ) | (.16 | ) | (.14 | ) | (.05 | ) | ||||||||||||
Net realized and unrealized gain on investment transactions | .83 | .09 | 2.29 | 1.32 | ||||||||||||||||
Total from investment operations | .76 | (.07 | ) | 2.15 | 1.27 | |||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | - | (.05 | ) | - | |||||||||||||||
Distributions from net realized gains | - | (.48 | ) | - | - | |||||||||||||||
Total dividends and distributions | - | (.48 | ) | (.05 | ) | - | ||||||||||||||
Net asset value, end of period | $13.58 | $12.82 | $13.37 | $11.27 | ||||||||||||||||
Total Return(c): | 5.93% | (.57)% | 19.11% | 12.70% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $880 | $465 | $181 | $11 | ||||||||||||||||
Average net assets (000) | $564 | $362 | $38 | $11 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.35% | (e) | 2.35% | 2.35% | 2.35% | (e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.47% | (e) | 2.60% | 4.09% | 5.29% | (e) | ||||||||||||||
Net investment loss | (1.21)% | (e) | (1.21)% | (1.12)% | (1.16)% | (e) | ||||||||||||||
Portfolio turnover rate | 36% | (f) | 61% | 86% | 28% | (f) |
(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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
30 |
Class Z Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||
2015 | 2014(b) | 2013(b) | 2012 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net Asset Value, Beginning Of Period | $13.13 | $13.55 | $11.32 | $10.00 | ||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | (.02 | ) | (.02 | ) | .02 | (.01 | ) | |||||||||||||
Net realized and unrealized gain on investment transactions | .86 | .08 | 2.26 | 1.33 | ||||||||||||||||
Total from investment operations | .84 | .06 | 2.28 | 1.32 | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||
Dividends from net investment income | - | - | (.05 | ) | - | |||||||||||||||
Distributions from net realized gains | - | (.48 | ) | - | - | |||||||||||||||
Total dividends and distributions | - | (.48 | ) | (.05 | ) | - | ||||||||||||||
Net asset value, end of period | $13.97 | $13.13 | $13.55 | $11.32 | ||||||||||||||||
Total Return(c): | 6.40% | .42% | 20.24% | 13.20% | ||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $49,013 | $46,996 | $16,487 | $11,962 | ||||||||||||||||
Average net assets (000) | $47,308 | $38,835 | $13,938 | $11,061 | ||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.35% | (e) | 1.35% | 1.35% | 1.35% | (e) | ||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.47% | (e) | 1.54% | 2.73% | 4.28% | (e) | ||||||||||||||
Net investment income (loss) | (.34)% | (e) | (.13)% | .13% | (.17)% | (e) | ||||||||||||||
Portfolio turnover rate | 36% | (f) | 61% | 86% | 28% | (f) |
(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) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 31 |
Results of Proxy Voting
(Unaudited)
At a special meeting of shareholders held on November 26, 2014, shareholders of the Prudential World Fund, Inc., which is comprised of Prudential Jennison Global Opportunities Fund, Prudential Jennison International Opportunities Fund, Prudential Jennison Emerging Markets Equity Fund, Prudential International Equity Fund, Prudential Jennison Global Infrastructure Fund and Prudential Emerging Markets Debt Local Currency Fund (collectively, the “Funds”), approved the following proposal. Shareholders of all Funds voted together on the proposal:
Proposal: To elect twelve Directors:
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Ellen S. Alberding | ||||||||||||
FOR | 40,430,355.469 | 98.29 | % | 69.20 | % | |||||||
WITHHELD | 703,232.767 | 1.71 | % | 1.20 | % | |||||||
Kevin J. Bannon | ||||||||||||
FOR | 40,500,752.683 | 98.46 | % | 69.32 | % | |||||||
WITHHELD | 632,835.553 | 1.54 | % | 1.08 | % | |||||||
Linda W. Bynoe | ||||||||||||
FOR | 40,463,969.413 | 98.37 | % | 69.25 | % | |||||||
WITHHELD | 669,618.823 | 1.63 | % | 1.15 | % | |||||||
Keith F. Hartstein | ||||||||||||
FOR | 40,502,519.384 | 98.47 | % | 69.32 | % | |||||||
WITHHELD | 631,068.852 | 1.53 | % | 1.08 | % | |||||||
Michael S. Hyland | ||||||||||||
FOR | 40,454,955.187 | 98.35 | % | 69.24 | % | |||||||
WITHHELD | 678,633.049 | 1.65 | % | 1.16 | % | |||||||
Stephen P. Munn | ||||||||||||
FOR | 40,350,089.935 | 98.10 | % | 69.06 | % | |||||||
WITHHELD | 783,498.301 | 1.90 | % | 1.34 | % | |||||||
James E. Quinn | ||||||||||||
FOR | 40,472,965.987 | 98.39 | % | 69.27 | % | |||||||
WITHHELD | 660,622.249 | 1.61 | % | 1.13 | % | |||||||
Richard A. Redeker | ||||||||||||
FOR | 40,445,890.390 | 98.33 | % | 69.22 | % | |||||||
WITHHELD | 687,697.846 | 1.67 | % | 1.18 | % | |||||||
Stephen G. Stoneburn | ||||||||||||
FOR | 40,484,781.265 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 648,806.971 | 1.58 | % | 1.11 | % | |||||||
Grace C. Torres | ||||||||||||
FOR | 40,481,896.899 | 98.42 | % | 69.29 | % | |||||||
WITHHELD | 651,691.337 | 1.58 | % | 1.11 | % |
32 |
SHARES VOTED | % VOTED | % OF T/O | ||||||||||
Stuart S. Parker | ||||||||||||
FOR | 40,486,057.825 | 98.43 | % | 69.29 | % | |||||||
WITHHELD | 647,530.411 | 1.57 | % | 1.11 | % | |||||||
Scott E. Benjamin | ||||||||||||
FOR | 40,475,216.348 | 98.40 | % | 69.27 | % | |||||||
WITHHELD | 658,371.888 | 1.60 | % | 1.13 | % |
At the same meeting, shareholders approved the following proposal.
Proposal: To permit Prudential Investments LLC (PI) to enter into or make material changes to the Fund’s subadvisory agreements with subadvisers that are wholly-owned subsidiaries of PI or a sister company of PI (wholly-owned subadvisers) without shareholder approval.
SHARES VOTED | % OF VOTED | % OF TOTAL | ||||||||||
FOR | 3,235,976.569 | 87.712 | % | 85.794 | % | |||||||
AGAINST | 12,973.630 | 0.352 | % | 0.344 | % | |||||||
ABSTAIN | 2,654.486 | 0.071 | % | 0.070 | % | |||||||
BROKER NON-VOTE | 437,742.994 | 11.865 | % | 11.606 | % | |||||||
TOTAL | 3,689,347.679 | 100.000 | % | 97.814 | % |
Prudential Jennison International Opportunities Fund | 33 |
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 |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Deborah A. Docs, Secretary • Chad A. Earnst, Chief Compliance Officer • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, Assistant Treasurer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
| ||||
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 | ||
| ||||
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 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month. |
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 0278662-00001-00
PRUDENTIAL INVESTMENTS»MUTUAL FUNDS
PRUDENTIAL JENNISON
EMERGING MARKETS EQUITY FUND
SEMIANNUAL REPORT · APRIL 30, 2015
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, 2015, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Jennison Associates is a registered investment advisor. Both are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related entities. Prudential Investments LLC, Prudential, Jennison Associates, Jennison, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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June 15, 2015
Dear Shareholder:
We hope you find the semiannual report for the Prudential Jennison Emerging Markets Equity Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2015.
Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.
Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. 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 Emerging Markets Equity Fund
Prudential Jennison Emerging Markets 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.
Cumulative Total Returns (Without Sales Charges) as of 4/30/15 | ||||||
Six Months | Since Inception | |||||
Class A | –0.50 | % | 0.40% (9/16/14) | |||
Class C | –0.79 | 0.00 (9/16/14) | ||||
Class Q | –0.25 | 0.65 (9/16/14) | ||||
Class Z | –0.30 | 0.60 (9/16/14) | ||||
MSCI Emerging Markets Index | 3.92 | 5.14 | ||||
Lipper Emerging Markets Funds Average | 0.68 | 1.47 | ||||
Average Annual Total Returns (With Sales Charges) as of 3/31/15 | ||||||
Since Inception | ||||||
Class A | N/A (9/16/14) | |||||
Class C | N/A (9/16/14) | |||||
Class Q | N/A (9/16/14) | |||||
Class Z | N/A (9/16/14) | |||||
MSCI Emerging Markets Index | N/A | |||||
Lipper Emerging Markets 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.
2 | Visit our website at www.prudentialfunds.com |
The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.
Class A | Class C | Class Q | Class Z | |||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | ||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .30% (.25% currently) | 1% | None | None |
Benchmark Definitions
MSCI Emerging Markets Index
The MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates.
Lipper Emerging Markets Funds Average
The Lipper Emerging Markets Funds Average includes funds that seek long-term capital appreciation by investing at least 65% of total assets in emerging market equity securities, where “emerging market” is defined by a country’s GNP per capita or other economic measures.
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. The Since Inception returns for the Index and Lipper Average are measured from the closest month-end to the inception date for the indicated share class.
Prudential Jennison Emerging Markets Equity Fund | 3 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/15 | ||||
Tencent Holdings Ltd., Internet Software & Services | 6.6 | % | ||
Vipshop Holdings Ltd., ADS, Internet & Catalog Retail | 5.3 | |||
Alibaba Group Holding Ltd., ADR, Internet Software & Services | 4.1 | |||
JD.com, Inc., ADR, Internet & Catalog Retail | 3.9 | |||
Universal Robina Corp., Food Products | 3.5 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/15 | ||||
Internet Software & Services | 16.8 | % | ||
Internet & Catalog Retail | 11.7 | |||
Pharmaceuticals | 6.1 | |||
Food Products | 5.0 | |||
Health Care Providers & Services | 4.7 |
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, 2014, at the beginning of the period, and held through the six-month period ended April 30, 2015. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the 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 Jennison Emerging Markets Equity Fund | 5 |
Fees and Expenses (continued)
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.
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 Emerging Markets Equity Fund | Beginning Account Value November 1, 2014 | Ending Account April 30, 2015 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 995.00 | 1.55 | % | $ | 7.67 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.11 | 1.55 | % | $ | 7.75 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 992.10 | 2.30 | % | $ | 11.36 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.39 | 2.30 | % | $ | 11.48 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 997.50 | 1.30 | % | $ | 6.44 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.35 | 1.30 | % | $ | 6.51 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 997.00 | 1.30 | % | $ | 6.44 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.35 | 1.30 | % | $ | 6.51 |
* 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, 2015, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2015 (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 |
The Fund’s annualized expense ratios for the six-month period ended April 30, 2015, are as follows:
Class | Gross Operating Expenses | Net Operating Expenses | ||||||
A | 3.64 | % | 1.55 | % | ||||
C | 4.77 | 2.30 | ||||||
Q | 3.16 | 1.30 | ||||||
Z | 3.85 | 1.30 |
Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.
Prudential Jennison Emerging Markets Equity Fund | 7 |
Portfolio of Investments
as of April 30, 2015 (Unaudited)
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 100.4% | ||||||||
COMMON STOCKS 87.6% | ||||||||
Argentina 2.7% | ||||||||
MercadoLibre, Inc. | 2,109 | $ | 300,174 | |||||
Brazil 1.6% | ||||||||
Cielo SA | 12,759 | 175,529 | ||||||
China 39.2% | ||||||||
Alibaba Group Holding Ltd., ADR* | 5,617 | 456,606 | ||||||
Baidu, Inc., ADR* | 1,172 | 234,728 | ||||||
CGN Power Co. Ltd. (Class H Stock), 144A*(a) | 9,128 | 5,108 | ||||||
CGN Power Co. Ltd. (Class H Stock)* | 446,097 | 249,622 | ||||||
China Biologic Products, Inc.* | 2,397 | 229,249 | ||||||
China Machinery Engineering Corp. (Class H Stock) | 176,000 | 233,643 | ||||||
Ctrip.com International Ltd., ADR* | 4,322 | 275,225 | ||||||
JD.com, Inc., ADR* | 12,991 | 435,978 | ||||||
Ping An Insurance Group Co. of China Ltd. (Class H Stock) | 24,195 | 346,019 | ||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd. (Class H Stock) | 39,262 | 149,427 | ||||||
Tencent Holdings Ltd. | 35,447 | 731,586 | ||||||
Vipshop Holdings Ltd., ADS* | 20,933 | 592,195 | ||||||
WuXi PharmaTech Cayman, Inc., ADR* | 4,942 | 213,346 | ||||||
Zhuzhou CSR Times Electric Co. Ltd. (Class H Stock) | 26,900 | 228,733 | ||||||
|
| |||||||
4,381,465 | ||||||||
Hong Kong 2.3% | ||||||||
Guotai Junan International Holdings Ltd. | 152,401 | 250,897 | ||||||
India 2.1% | ||||||||
Axis Bank Ltd., GDR, RegS | 5,108 | 228,174 | ||||||
Indonesia 7.0% | ||||||||
Bank Mandiri Persero Tbk PT | 215,864 | 177,557 | ||||||
Jasa Marga Persero Tbk PT | 248,280 | 118,286 | ||||||
Kalbe Farma Tbk PT | 1,132,869 | 156,616 | ||||||
Matahari Department Store Tbk PT | 117,046 | 157,416 | ||||||
Tower Bersama Infrastructure Tbk PT | 269,172 | 175,987 | ||||||
|
| |||||||
785,862 | ||||||||
Malaysia 1.8% | ||||||||
IHH Healthcare Bhd | 118,829 | 197,520 |
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 9 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Mexico 6.1% | ||||||||
Alsea SAB de CV* | 47,074 | $ | 141,449 | |||||
Corporacion Inmobiliaria Vesta SAB de CV | 108,130 | 202,982 | ||||||
Grupo Aeroportuario Del Centro Norte SAB de CV* | 27,411 | 136,858 | ||||||
Infraestructura Energetica Nova SAB de CV | 34,180 | 199,484 | ||||||
|
| |||||||
680,773 | ||||||||
Philippines 5.1% | ||||||||
Ayala Land, Inc. | 213,910 | 185,062 | ||||||
Universal Robina Corp. | 79,713 | 388,728 | ||||||
|
| |||||||
573,790 | ||||||||
South Africa 4.3% | ||||||||
Aspen Pharmacare Holdings Ltd.* | 5,276 | 160,441 | ||||||
Mediclinic International Ltd. | 14,648 | 155,113 | ||||||
Mr Price Group Ltd. | 7,856 | 167,727 | ||||||
|
| |||||||
483,281 | ||||||||
South Korea 5.5% | ||||||||
Amorepacific Corp. | 63 | 228,290 | ||||||
Medy-Tox, Inc. | 671 | 231,967 | ||||||
NAVER Corp. | 257 | 155,402 | ||||||
|
| |||||||
615,659 | ||||||||
Taiwan 1.9% | ||||||||
Hermes Microvision, Inc. | 3,000 | 210,953 | ||||||
Thailand 4.1% | ||||||||
Bangkok Dusit Medical Services PCL | 272,797 | 166,666 | ||||||
Home Product Center PCL | 600,123 | 131,075 | ||||||
Minor International PCL | 162,641 | 162,814 | ||||||
|
| |||||||
460,555 | ||||||||
Turkey 3.9% | ||||||||
BIM Birlesik Magazalar A/S | 7,107 | 131,576 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi A/S, REIT | 119,725 | 138,295 | ||||||
Ulker Biskuvi Sanayi A/S | 21,890 | 167,267 | ||||||
|
| |||||||
437,138 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 9,781,770 | ||||||
|
|
See Notes to Financial Statements.
10 |
Description | Units | Value (Note 1) | ||||||
PARTICIPATORY NOTES 12.8% | ||||||||
India | ||||||||
Ashok Leyland Ltd., expiring 10/29/15 144A*(a) | 205,513 | $ | 224,643 | |||||
Asian Paints Ltd., expiring 05/31/18 144A*(a) | 14,070 | 168,750 | ||||||
Barthi Infratel Ltd., expiring 01/25/24 144A*(a) | 30,989 | 195,850 | ||||||
Eicher Motors Ltd., expiring 08/27/15 144A*(a) | 885 | 211,629 | ||||||
Indiabulls Housing Finance Ltd., expiring 12/12/18 144A*(a) | 22,651 | 211,560 | ||||||
Lupin Ltd., expiring 10/29/15 144A(a) | 7,725 | 215,279 | ||||||
Maruti Suzuki India Ltd., expiring 11/03/15 144A*(a) | 3,441 | 201,780 | ||||||
|
| |||||||
TOTAL PARTICIPATORY NOTES |
| 1,429,491 | ||||||
|
| |||||||
RIGHTS* | ||||||||
India | ||||||||
Tata Motors Ltd., ADR | 185 | 1,230 | ||||||
|
| |||||||
WARRANTS* | ||||||||
Thailand | ||||||||
Minor International PCL , expiring 11/03/17 | 7,392 | 1,005 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 11,213,496 | ||||||
|
| |||||||
SHORT-TERM INVESTMENT 3.4% | ||||||||
Shares | ||||||||
AFFILIATED MONEY MARKET MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Taxable Money | 371,304 | 371,304 | ||||||
|
| |||||||
TOTAL INVESTMENTS 103.8% | 11,584,800 | |||||||
Liabilities in excess of other assets (3.8)% | (419,733 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 11,165,067 | ||||||
|
|
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.
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 11 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
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
ADS—American Depositary Share
GDR—Global Depositary Receipt
REIT—Real Estate Investment Trust
* | Non-income producing security. |
(a) | Indicates a security or securities that has been deemed illiquid. |
(b) | 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—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
The following is a summary of the inputs used as of April 30, 2015 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 300,174 | $ | — | $ | — | ||||||
Brazil | 175,529 | — | — | |||||||||
China | 2,437,327 | 1,944,138 | — | |||||||||
Hong Kong | — | 250,897 | — | |||||||||
India | 228,174 | — | — | |||||||||
Indonesia | 175,987 | 609,875 | — | |||||||||
Malaysia | 197,520 | — | — | |||||||||
Mexico | 680,773 | — | — | |||||||||
Philippines | — | 573,790 | — | |||||||||
South Africa | — | 483,281 | — | |||||||||
South Korea | — | 387,369 | 228,290 | |||||||||
Taiwan | — | 210,953 | — | |||||||||
Thailand | 293,889 | 166,666 | — | |||||||||
Turkey | — | 437,138 | — | |||||||||
Participatory Notes | ||||||||||||
India | — | 1,429,491 | — |
See Notes to Financial Statements.
12 |
Level 1 | Level 2 | Level 3 | ||||||||||
Rights | ||||||||||||
India | $ | — | $ | — | $ | 1,230 | ||||||
Warrants | ||||||||||||
Thailand | — | 1,005 | — | |||||||||
Affiliated Money Market Mutual Fund | 371,304 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 4,860,677 | $ | 6,494,603 | $ | 229,520 | ||||||
|
|
|
|
|
|
The following is a reconciliation of assets in which unobservable inputs (Level 3) were used in determining fair value:
Common Stock | Rights | |||||||
Balance as of 10/31/14 | $ | — | $ | — | ||||
Accrued discount/premium | — | — | ||||||
Realized gain (loss) | — | — | ||||||
Change in unrealized appreciation (depreciation)* | 38,044 | 1,230 | ||||||
Purchases | 190,246 | — | ||||||
Sales | — | — | ||||||
Transfers into Level 3 | — | — | ||||||
Transfers out of Level 3 | — | — | ||||||
|
|
|
| |||||
Balance as of 4/30/15 | $ | 228,290 | $ | 1,230 | ||||
|
|
|
|
* | Of which, $39,274 was relating to securities held at the reporting period end. |
Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by Board, which contain unobservable inputs as follows:
Level 3 Securities | Fair Value as of April 30, 2015 | Valuation | Unobservable | |||||
Common Stocks | $ | 228,290 | Stale pricing | Unadjusted last trade price | ||||
Rights | $ | 1,230 | Formula pricing | Stale underlined price |
It is the Series’ policy to recognize transfers in and transfers out at the fair value as of the beginning of period. At the reporting period end, securities transferred levels as follows:
Investments in Securities | Amount Transferred | Level Transfer | Logic | |||||
Common Stocks | $353,064 | L2 to L1 | Model Price to Official Close |
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 13 |
Portfolio of Investments
as of April 30, 2015 (Unaudited) continued
The Fund invested in various 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 Fund's financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.
Fair values of derivative instruments as of April 30, 2015 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for | Asset Derivatives | Liability Derivatives | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
Equity contracts | Unaffiliated investments | $ | 1,431,726 | — | $ | — | ||||||
|
|
|
|
The Series invested in various derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk.
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2015 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Warrants(1) | |||
Equity contracts | $ | (9,475 | ) | |
|
|
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not accounted for as hedging | Participatory Notes(2) | Rights(2) | Warrants(2) | Total | ||||||||||||
Equity contracts | $ | 215,430 | $ | 1,230 | $ | 1,005 | $ | 217,665 | ||||||||
|
|
|
|
|
|
|
|
(1) | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
See Notes to Financial Statements.
14 |
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2015 was as follows:
Internet Software & Services | 16.8 | % | ||
Internet & Catalog Retail | 11.7 | |||
Pharmaceuticals | 6.1 | |||
Food Products | 5.0 | |||
Health Care Providers & Services | 4.7 | |||
Biotechnology | 4.1 | |||
Machinery | 3.9 | |||
Banks | 3.6 | |||
Real Estate Management & Development | 3.5 | |||
Affiliated Money Market Mutual Fund | 3.3 | |||
Wireless Telecommunication Services | 3.3 | |||
Insurance | 3.1 | |||
Hotels, Restaurants & Leisure | 2.7 | |||
Specialty Retail | 2.7 | |||
Capital Markets | 2.3 | |||
Transportation Infrastructure | 2.3 | |||
Independent Power & Renewable Electricity Producers | 2.3 | |||
Construction & Engineering | 2.1 | % | ||
Electrical Equipment | 2.1 | |||
Personal Products | 2.0 | |||
Life Sciences Tools & Services | 1.9 | |||
Semiconductors & Semiconductor Equipment | 1.9 | |||
Thrifts & Mortgage Finance | 1.9 | |||
Automobiles | 1.8 | |||
Gas Utilities | 1.8 | |||
IT Services | 1.6 | |||
Chemicals | 1.5 | |||
Multiline Retail | 1.4 | |||
Real Estate Investment Trusts (REITs) | 1.2 | |||
Food & Staples Retailing | 1.2 | |||
|
| |||
103.8 | ||||
Liabilities in excess of other assets | (3.8 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 15 |
Statement of Assets & Liabilities
as of April 30, 2015 (Unaudited)
Assets |
| |||
Investments at value: | ||||
Unaffiliated investments (cost $10,256,561) | $ | 11,213,496 | ||
Affiliated investments (cost $371,304) | 371,304 | |||
Dividends receivable | 6,253 | |||
Due from Manager | 2,578 | |||
Receivable for Series shares sold | 308 | |||
Prepaid expenses | 223 | |||
|
| |||
Total assets | 11,594,162 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 332,515 | |||
Accrued expenses and other liabilities | 95,731 | |||
Distribution fee payable | 691 | |||
Affiliated transfer agent fee payable | 158 | |||
|
| |||
Total liabilities | 429,095 | |||
|
| |||
Net Assets | $ | 11,165,067 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 11,106 | ||
Paid-in capital in excess of par | 11,071,349 | |||
|
| |||
11,082,455 | ||||
Accumulated net investment loss | (43,116 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (831,143 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 956,871 | |||
|
| |||
Net assets, April 30, 2015 | $ | 11,165,067 | ||
|
|
See Notes to Financial Statements.
16 |
Class A |
| |||
Net asset value and redemption price per share, | ||||
($295,925 ÷ 29,463 shares of common stock issued and outstanding) | $ | 10.04 | ||
Maximum sales charge (5.50% of offering price) | 0.58 | |||
|
| |||
Maximum offering price to public | $ | 10.62 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | ||||
($780,454 ÷ 78,009 shares of common stock issued and outstanding) | $ | 10.00 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share, | ||||
($10,072,146 ÷ 1,001,515 shares of common stock issued and outstanding) | $ | 10.06 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | ||||
($16,542 ÷ 1,644 shares of common stock issued and outstanding) | $ | 10.06 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 17 |
Statement of Operations
Six Months Ended April 30, 2015 (Unaudited)
Net Investment Loss |
| |||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $5,029) | $ | 29,198 | ||
Affiliated dividend income | 173 | |||
|
| |||
Total income | 29,371 | |||
|
| |||
Expenses | ||||
Management fee | 55,405 | |||
Distribution fee—Class A | 189 | |||
Distribution fee—Class C | 3,435 | |||
Custodian and accounting fees | 38,000 | |||
Registration fees | 19,000 | |||
Audit fee | 16,000 | |||
Legal fees and expenses | 12,000 | |||
Reports to shareholders | 12,000 | |||
Directors’ fees | 6,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $300) | 2,000 | |||
Miscellaneous | 8,352 | |||
|
| |||
Total expenses | 172,381 | |||
Less: Management fee waiver and/or expense reimbursement | (100,161 | ) | ||
Distribution fee waiver—Class A | (32 | ) | ||
|
| |||
Net expenses | 72,188 | |||
|
| |||
Net investment loss | (42,817 | ) | ||
|
| |||
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (792,347 | ) | ||
Foreign currency transactions | 2,993 | |||
|
| |||
(789,354 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 810,970 | |||
Foreign currencies | (54 | ) | ||
|
| |||
810,916 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 21,562 | |||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (21,255 | ) | |
|
|
See Notes to Financial Statements.
18 |
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended April 30, 2015 | September 16, 2014* through October 31, 2014 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (42,817 | ) | $ | (9,021 | ) | ||
Net realized loss on investment and foreign currency transactions | (789,354 | ) | (34,266 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 810,916 | 145,955 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (21,255 | ) | 102,668 | |||||
|
|
|
| |||||
Dividends from net investment income (Note 1) | ||||||||
Class Q | (5,005 | ) | — | |||||
|
|
|
| |||||
(5,005 | ) | — | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 642,957 | 10,528,444 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 5,005 | — | ||||||
Cost of shares reacquired | (86,415 | ) | (1,332 | ) | ||||
|
|
|
| |||||
Net increase in net assets resulting from Series share transactions | 561,547 | 10,527,112 | ||||||
|
|
|
| |||||
Total increase | 535,287 | 10,629,780 | ||||||
Net Assets | ||||||||
Beginning of period | 10,629,780 | — | ||||||
|
|
|
| |||||
End of period(a) | $ | 11,165,067 | $ | 10,629,780 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | — | $ | 4,706 | ||||
|
|
|
|
* | Commencement of operations. |
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 19 |
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 six series: Prudential Jennison Emerging Markets Equity Fund, (the “Series”), Prudential Jennison Global Infrastructure Fund, 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 Jennison Emerging Markets Equity Fund. The Series commenced operations on September 16, 2014. The financial statements of the other series are not presented herein. The investment objective of the Series is to seek long-term growth of capital.
Note 1. Accounting Policies
The Series follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund and the Series consistently follows such policies in the preparation of their financial statements.
Securities Valuation: The Series holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Series to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Series’ investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
20 |
Common and preferred stocks, exchange-traded funds, and derivative instruments such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable.
Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Prudential Jennison Emerging Markets Equity Fund | 21 |
Notes to Financial Statements
(Unaudited) continued
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.
Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the 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.
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
22 |
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, forward currency contracts disposition of foreign currencies, currency gains or losses realized between the trade and settlement date on securities transactions, and the difference between the amounts of interest, dividends 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.
Participatory Notes (P-notes): The Series may gain exposure to securities in certain foreign markets through investments in participatory notes (“P-notes”). The Series may purchase P-notes pending ability to invest directly in a foreign market due to restrictions applicable to foreign investors or other market factors. P-notes are generally issued by banks or broker-dealers and are designed to offer a return linked to a particular underlying security. P-notes involve transaction costs, which may be higher than those applicable to the equity securities. An investment in a P-note may involve risks, including counter-party risk, beyond those normally associated with a direct investment in the underlying security. The Series must rely on the creditworthiness of the counterparty and would have no rights against the issuer of the underlying security. Furthermore, the P-note’s performance may differ from that of the underlying security. The holder of a P-note is entitled to receive from the bank or brokerdealer, an amount equal to dividends paid by the issuer of the underlying security; however, the holder is not entitled to the same rights (e.g., dividends, voting rights) as an owner of the underlying security. There is also no assurance that there will be a secondary trading market for a P-note or that the trading price of a P-note will equal the value of the underlying security.
Concentration of Risk: Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets.
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
Prudential Jennison Emerging Markets Equity Fund | 23 |
Notes to Financial Statements
(Unaudited) continued
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’s approved fair valuation procedures.
Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Series may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the 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 Directors of 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 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 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 transfer agency fees specific to Class Q shares which are charged to that share 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.
24 |
Dividends and Distributions: The Series expects to pay dividends of net investment income and distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-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 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 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 accrued daily and payable monthly at an annual rate of 1.05% of the Series’ average daily net assets. PI has contractually agreed through February 29, 2016 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 1.30% 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, Class Q
Prudential Jennison Emerging Markets Equity Fund | 25 |
Notes to Financial Statements
(Unaudited) continued
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 Q shares and 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 fee to .25% of the average daily net assets of the Class A shares through February 29, 2016.
PIMS has advised the Series that it received $2,893 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2015. 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, 2015, it received $181 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PI 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. 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”.
26 |
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments, for the six months ended April 30, 2015, were $4,769,342 and $3,962,604, 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, 2015 were as follows:
Tax Basis | $ | 10,627,865 | ||
|
| |||
Appreciation | $ | 1,269,079 | ||
Depreciation | $ | (312,144 | ) | |
|
| |||
Net Unrealized Appreciation | $ | 956,935 | ||
|
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The book basis may differ from tax basis due to certain tax related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2014 of approximately $42,000 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 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, Class Q and Class Z shares. Class A shares are subject to a maximum 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. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Class C shares are sold with a CDSC of 1% during the first 12 months from the date 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 qualify to purchase Class A shares at net asset value.
Prudential Jennison Emerging Markets Equity Fund | 27 |
Notes to Financial Statements
(Unaudited) continued
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.
At April 30, 2015, Prudential Financial, Inc. through its affiliates owned 1,000 shares of Class A, 1,000 shares of Class C, 1,001,515 shares of Class Q and 1,000 shares of Class Z.
There are 865 million authorized shares of $.01 par value common stock, divided into four classes, designated Class A, Class C, Class Q and Class Z common stock, each of which consists of 250 million, 65 million, 250 million and 300 million authorized shares, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 34,764 | $ | 340,785 | |||||
Shares reacquired | (7,056 | ) | (68,194 | ) | ||||
|
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| |||||
Net increase (decrease) in shares outstanding before conversion | 27,708 | 272,591 | ||||||
Shares reacquired upon conversion into Class Z | (31 | ) | (310 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding | 27,677 | $ | 272,281 | |||||
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| |||||
Period* ended October 31, 2014: | ||||||||
Shares sold | 1,923 | $ | 19,219 | |||||
Shares reacquired | (137 | ) | (1,332 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding | 1,786 | $ | 17,887 | |||||
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| |||||
Class C | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 30,216 | $ | 295,913 | |||||
Shares reacquired | (1,884 | ) | (18,221 | ) | ||||
|
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| |||||
Net increase (decrease) in shares outstanding | 28,332 | $ | 277,692 | |||||
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| |||||
Period* ended October 31, 2014: | ||||||||
Shares sold | 49,677 | $ | 489,225 | |||||
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| |||||
Net increase (decrease) in shares outstanding | 49,677 | $ | 489,225 | |||||
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28 |
Class Q | Shares | Amount | ||||||
Six months ended April 30, 2015: | ||||||||
Shares issued in reinvestment of dividends and distributions | 515 | $ | 5,005 | |||||
|
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| |||||
Net increase (decrease) in shares outstanding | 515 | $ | 5,005 | |||||
|
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|
| |||||
Period* ended October 31, 2014: | ||||||||
Shares sold | 1,001,000 | $ | 10,010,000 | |||||
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| |||||
Net increase (decrease) in shares outstanding | 1,001,000 | $ | 10,010,000 | |||||
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Class Z | ||||||||
Six months ended April 30, 2015: | ||||||||
Shares sold | 613 | $ | 6,259 | |||||
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| |||||
Net increase (decrease) in shares outstanding before conversion | 613 | 6,259 | ||||||
Shares issued upon conversion from Class A | 31 | 310 | ||||||
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| |||||
Net increase (decrease) in shares outstanding | 644 | $ | 6,569 | |||||
|
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| |||||
Period* ended October 31, 2014: | ||||||||
Shares sold | 1,000 | $ | 10,000 | |||||
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| |||||
Net increase (decrease) in shares outstanding | 1,000 | $ | 10,000 | |||||
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* | Commencement of operations was September 16, 2014. |
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 October 9, 2014 through October 8, 2015. The Funds pay an annualized commitment fee of .075% of the unused portion of the SCA. Prior to October 9, 2014, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .08% of the unused portion of the SCA. 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 six months ended April 30, 2015.
Note 8. New Accounting Pronouncement
In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal
Prudential Jennison Emerging Markets Equity Fund | 29 |
Notes to Financial Statements
(Unaudited) continued
years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. At this time, management is evaluating the implications of ASU No. 2015-07 and its impact on the financial statement disclosures has not yet been determined.
30 |
Financial Highlights
(Unaudited)
Class A Shares | ||||||||||
Six Months Ended April 30, | September 16, 2014(b) through October 31, | |||||||||
2015 | 2014 | |||||||||
Per Share Operating Performance(c): | ||||||||||
Net Asset Value, Beginning of Period | $10.09 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.04 | ) | (.01 | ) | ||||||
Net realized and unrealized gain (loss) on investments | (.01 | ) | .10 | |||||||
Total from investment operations | (.05 | ) | .09 | |||||||
Net asset value, end of period | $10.04 | $10.09 | ||||||||
Total Return(a) | (.50)% | .90% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $296 | $18 | ||||||||
Average net assets (000) | $127 | $15 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expense after waiver and/or expense reimbursement | 1.55% | (e) | 1.55% | (e) | ||||||
Expense before waiver and/or expense reimbursement | 3.64% | (e) | 14.06% | (e) | ||||||
Net investment loss | (.81%) | (e) | (.93%) | (e) | ||||||
Portfolio turnover rate | 38% | (f) | 15% | (f) |
(a) Total return does not consider the effect of sales load. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 31 |
Financial Highlights
(Unaudited) continued
Class C Shares | ||||||||||
Six Months Ended April 30, | September 16, 2014(b) through October 31, | |||||||||
2015 | 2014 | |||||||||
Per Share Operating Performance(c): | ||||||||||
Net Asset Value, Beginning of Period | $10.08 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.08 | ) | (.02 | ) | ||||||
Net realized and unrealized gain (loss) on investments | - | (e) | .10 | |||||||
Total from investment operations | (.08 | ) | .08 | |||||||
Net asset value, end of period | $10.00 | $10.08 | ||||||||
Total Return(a) | (.79)% | .80% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $780 | $501 | ||||||||
Average net assets (000) | $693 | $296 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expense after waiver and/or expense reimbursement | 2.30% | (f) | 2.30% | (f) | ||||||
Expense before waiver and/or expense reimbursement | 4.77% | (f) | 15.19% | (f) | ||||||
Net investment loss | (1.71)% | (f) | (1.79)% | (f) | ||||||
Portfolio turnover rate | 38% | (g) | 15% | (g) |
(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 return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolio in which the Series invests.
(e) Less than $.005.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
32 |
Class Q Shares | ||||||||||
Six Months Ended April 30, | September 16, 2014(b) through October 31, | |||||||||
2015 | 2014 | |||||||||
Per Share Operating Performance(c): | ||||||||||
Net Asset Value, Beginning of Period | $10.09 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.04 | ) | (.01 | ) | ||||||
Net realized and unrealized gain (loss) on investments | .02 | .10 | ||||||||
Total from investment operations | (.02 | ) | .09 | |||||||
Less Dividends: | ||||||||||
Dividends from net investment income | (.01 | ) | - | |||||||
Net asset value, end of period | $10.06 | $10.09 | ||||||||
Total Return(a) | (.25)% | .90% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $10,072 | $10,101 | ||||||||
Average net assets (000) | $9,810 | $9,785 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expense after waiver and/or expense reimbursement | 1.30% | (e) | 1.30% | (e) | ||||||
Expense before waiver and/or expense reimbursement | 3.16% | (e) | 13.37% | (e) | ||||||
Net investment loss | (.75)% | (e) | (.68)% | (e) | ||||||
Portfolio turnover rate | 38% | (f) | 15% | (f) |
(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total investment return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 33 |
Financial Highlights
(Unaudited) continued
Class Z Shares | ||||||||||
Six Months Ended April 30, | September 16, 2014(b) through October 31, | |||||||||
2015 | 2014 | |||||||||
Per Share Operating Performance(c): | ||||||||||
Net Asset Value, Beginning of Period | $10.09 | $10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||
Net investment loss | (.03 | ) | (.01 | ) | ||||||
Net realized and unrealized gain on investments | - | (e) | .10 | |||||||
Total from investment operations | (.03 | ) | .09 | |||||||
Net asset value, end of period | $10.06 | $10.09 | ||||||||
Total Return(a) | (.30)% | .90% | ||||||||
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000) | $17 | $10 | ||||||||
Average net assets (000) | $11 | $10 | ||||||||
Ratios to average net assets(d): | ||||||||||
Expense after waiver and/or expense reimbursement | 1.30% | (f) | 1.30% | (f) | ||||||
Expense before waiver and/or expense reimbursement | 3.85% | (f) | 13.51% | (f) | ||||||
Net investment loss | (.71)% | (f) | (.67)% | (f) | ||||||
Portfolio turnover rate | 38% | (g) | 15% | (g) |
(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 investment return may reflect adjustments to conform with generally accepted accounting principles. Total returns for periods less than one full year are not annualized.
(b) Commencement of operations
(c) Calculated based on average shares outstanding during the period.
(d) Does not include expenses of the underlying portfolios in which the Series invests.
(e) Less than $.005.
(f) Annualized.
(g) Not annualized.
See Notes to Financial Statements.
34 |
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 Trustees of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website. |
TRUSTEES |
Ellen S. Alberding • Kevin J. Bannon • Scott E. Benjamin • Linda W. Bynoe • Keith F. Hartstein • Michael S. Hyland • Stephen P. Munn • Stuart S. Parker • James E. Quinn • Richard A. Redeker • Stephen G. Stoneburn • Grace C. Torres |
OFFICERS |
Stuart S. Parker, President • Scott E. Benjamin, Vice President • M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer • Raymond A. O’Hara, Chief Legal Officer • Chad A. Earnst, Chief Compliance Officer • Deborah A. Docs, Secretary • 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 • Peter Parrella, Assistant Treasurer • Lana Lomuti, Assistant Treasurer • Linda McMullin, Assistant Treasurer • Kelly A. Coyne, 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 TRUSTEES |
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Prudential Jennison Emerging Markets Equity Fund, Prudential Investments, Attn: Board of Trustees, 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 EMERGING MARKETS EQUITY FUND
SHARE CLASS | A | C | Q | Z | ||||
NASDAQ | PDEAX | PDECX | PDEQX | PDEZX | ||||
CUSIP | 743969644 | 743969636 | 743969628 | 743969610 |
MF225E2 0278712-00001-00
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 18, 2015 |
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 18, 2015 | |||
By: | /s/ M. Sadiq Peshimam | |||
M. Sadiq Peshimam | ||||
Treasurer and Principal Financial and Accounting Officer | ||||
Date: | June 18, 2015 |