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: | 655 Broad Street, 17th Floor | |
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Deborah A. Docs | |
655 Broad Street, 17th Floor | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 800-225-1852 | |
Date of fiscal year end: | 10/31/2016 | |
Date of reporting period: | 4/30/2016 |
Item 1 – Reports to Stockholders
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential QMA International Equity Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
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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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company. © 2016 Prudential Financial, Inc. and its related entities. The Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Letter from the President
Dear Shareholder:
We hope you find the semiannual report for the Prudential QMA International Equity Fund informative and useful. The report covers performance for the six-month period that ended April 30, 2016.
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 QMA International Equity Fund
June 15, 2016
Prudential QMA International Equity Fund | 3 |
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 4/30/16 | ||||||||
Six Months (%) | One Year (%) | Five Years (%) | Ten Years (%) | |||||
Class A | –3.83 | –14.50 | 1.90 | –3.82 | ||||
Class B | –4.09 | –15.03 | –1.42 | –10.32 | ||||
Class C | –4.10 | –15.17 | –1.58 | –10.46 | ||||
Class Z | –3.48 | –14.12 | 3.62 | –1.17 | ||||
MSCI All Country World Ex-US Index | –1.75 | –11.28 | –0.63 | 18.31 | ||||
Lipper International Multi-Cap Core Funds Average | –2.74 | –9.73 | 6.35 | 15.23 | ||||
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||||||
One Year (%) | Five Years (%) | Ten Years (%) | ||||||
Class A | –15.62 | 0.13 | –0.60 | |||||
Class B | –15.75 | 0.38 | –0.74 | |||||
Class C | –12.24 | 0.57 | –0.74 | |||||
Class Z | –10.36 | 1.57 | 0.23 | |||||
MSCI All Country World Ex-US Index | –9.19 | 0.31 | 1.94 | |||||
Lipper International Multi-Cap Core Funds Average | –7.77 | 1.95 | 1.60 |
Source: Prudential Investments LLC and Lipper Inc.
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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 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 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. 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 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 above-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 QMA International Equity Fund | 5 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/16 (%) | ||||
Roche Holding AG, Pharmaceuticals | 1.6 | |||
Novartis AG, Pharmaceuticals | 1.5 | |||
Total SA, Oil, Gas & Consumable Fuels | 1.3 | |||
HSBC Holdings PLC, Banks | 1.2 | |||
British American Tobacco PLC, Tobacco | 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 4/30/16 (%) | ||||
Banks | 13.2 | |||
Pharmaceuticals | 8.7 | |||
Oil, Gas & Consumable Fuels | 6.5 | |||
Insurance | 4.8 | |||
Automobiles | 3.2 |
Industry weightings reflect only long-term investments and are subject to change.
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Fees and Expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your
Prudential QMA International Equity Fund | 7 |
Fees and Expenses (continued)
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 QMA International Equity Fund | Beginning Account Value November 1, 2015 | Ending Account April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 961.70 | 1.70 | % | $ | 8.29 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,016.41 | 1.70 | % | $ | 8.52 | ||||||||||
Class B | Actual | $ | 1,000.00 | $ | 959.10 | 2.40 | % | $ | 11.69 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,012.93 | 2.40 | % | $ | 12.01 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 959.00 | 2.40 | % | $ | 11.69 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,012.93 | 2.40 | % | $ | 12.01 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 965.20 | 1.40 | % | $ | 6.84 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.90 | 1.40 | % | $ | 7.02 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (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, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 1.70 | 1.70 | ||
B | 2.40 | 2.40 | ||
C | 2.40 | 2.40 | ||
Z | 1.40 | 1.40 |
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 QMA International Equity Fund | 9 |
Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 99.1% | ||||||||
COMMON STOCKS 95.6% | ||||||||
Australia 4.2% | ||||||||
Amcor Ltd. | 118,551 | $ | 1,382,177 | |||||
CIMIC Group Ltd. | 6,931 | 187,457 | ||||||
Coca-Cola Amatil Ltd. | 133,629 | 870,593 | ||||||
Commonwealth Bank of Australia | 49,587 | 2,768,305 | ||||||
Dexus Property Group, REIT | 237,196 | 1,512,408 | ||||||
Evolution Mining Ltd. | 617,933 | 933,504 | ||||||
Fortescue Metals Group Ltd.(a) | 479,587 | 1,232,540 | ||||||
Goodman Group, REIT | 119,265 | 621,356 | ||||||
GPT Group (The), REIT | 27,527 | 104,837 | ||||||
Macquarie Group Ltd. | 3,360 | 160,961 | ||||||
Oz Minerals Ltd. | 213,269 | 946,837 | ||||||
Seven West Media Ltd. | 359,202 | 287,377 | ||||||
Sydney Airport | 27,783 | 143,251 | ||||||
|
| |||||||
11,151,603 | ||||||||
Austria | ||||||||
ANDRITZ AG | 1,897 | 106,483 | ||||||
Belgium 0.1% | ||||||||
Anheuser-Busch InBev SA/NV | 1,473 | 182,732 | ||||||
Brazil 1.0% | ||||||||
Banco Santander Brasil SA | 276,600 | 1,495,092 | ||||||
JBS SA | 350,800 | 925,131 | ||||||
MRV Engenharia e Participacoes SA | 60,800 | 212,316 | ||||||
|
| |||||||
2,632,539 | ||||||||
Canada 5.7% | ||||||||
Bank of Montreal | 35,200 | 2,293,176 | ||||||
Bank of Nova Scotia (The) | 16,000 | 839,085 | ||||||
Canadian Imperial Bank of Commerce | 6,200 | 500,764 | ||||||
Canadian National Railway Co. | 5,000 | 307,882 | ||||||
CCL Industries, Inc. (Class B Stock) | 9,000 | 1,648,003 | ||||||
Constellation Software, Inc. | 400 | 156,321 | ||||||
Fairfax Financial Holdings Ltd. | 300 | 160,795 | ||||||
Genworth MI Canada, Inc.(a) | 35,800 | 926,743 | ||||||
Magna International, Inc. | 36,700 | 1,541,476 | ||||||
Metro, Inc. | 27,800 | 930,359 | ||||||
Open Text Corp. | 1,900 | 106,380 | ||||||
Royal Bank of Canada | 13,500 | 838,384 | ||||||
Suncor Energy, Inc. | 63,300 | 1,858,085 |
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Canada (cont’d.) | ||||||||
Toronto-Dominion Bank (The) | 64,900 | $ | 2,888,870 | |||||
|
| |||||||
14,996,323 | ||||||||
Chile 0.2% | ||||||||
Enersis Americas SA | 3,403,978 | 578,394 | ||||||
China 5.4% | ||||||||
Air China Ltd. | 1,682,000 | 1,273,415 | ||||||
Alibaba Group Holding Ltd., ADR*(a) | 7,700 | 592,438 | ||||||
Baidu, Inc., ADR* | 9,300 | 1,806,990 | ||||||
Bank of Chongqing Co. Ltd. (Class H Stock) | 26,000 | 20,538 | ||||||
Bank of Communications Co. Ltd. (Class H Stock) | 2,135,000 | 1,345,621 | ||||||
China CITIC Bank Corp. Ltd. (Class H Stock)* | 725,000 | 454,685 | ||||||
China Communications Construction Co. Ltd. (Class H Stock) | 88,000 | 105,630 | ||||||
China Construction Bank Corp. (Class H Stock) | 1,266,000 | 804,071 | ||||||
China Everbright Bank Co. Ltd. (Class H Stock) | 2,903,000 | 1,316,364 | ||||||
China Lumena New Materials Corp.*(b)(c) | 5,060,000 | 6,523 | ||||||
China Railway Construction Corp. Ltd. (Class H Stock) | 83,000 | 105,517 | ||||||
China Railway Group Ltd. (Class H Stock) | 129,000 | 102,107 | ||||||
China Telecom Corp. Ltd. (Class H Stock) | 792,000 | 392,092 | ||||||
China Vanke Co. Ltd. (Class H Stock) | 578,200 | 1,443,202 | ||||||
Citic Securities Co. Ltd. | 591,500 | 1,299,988 | ||||||
Guangzhou R&F Properties Co. Ltd. | 179,600 | 250,456 | ||||||
Huadian Power International Corp. Ltd. (Class H Stock) | 596,000 | 305,610 | ||||||
Huaneng Power International, Inc. (Class H Stock) | 914,000 | 651,919 | ||||||
JinkoSolar Holding Co. Ltd., ADR*(a) | 10,200 | 227,154 | ||||||
Kaisa Group Holdings Ltd.*(b) | 1,496,000 | — | ||||||
Powerlong Real Estate Holdings Ltd. | 923,000 | 199,251 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. (Class H Stock) | 50,500 | 107,038 | ||||||
Tencent Holdings Ltd. | 51,900 | 1,056,078 | ||||||
Tianneng Power International Ltd.* | 384,000 | 314,515 | ||||||
Yuzhou Properties Co. Ltd.* | 492,000 | 134,398 | ||||||
|
| |||||||
14,315,600 | ||||||||
Colombia 0.3% | ||||||||
Almacenes Exito SA | 160,984 | 905,316 | ||||||
Denmark 2.1% | ||||||||
A.P. Moeller - Maersk A/S (Class A Stock) | 1,142 | 1,555,889 | ||||||
Chr Hansen Holding A/S | 1,641 | 102,187 | ||||||
Novo Nordisk A/S (Class B Stock) | 34,816 | 1,943,930 | ||||||
Vestas Wind Systems A/S | 28,677 | 2,052,760 | ||||||
|
| |||||||
5,654,766 |
See Notes to Financial Statements.
12 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Finland 1.7% | ||||||||
Fortum OYJ | 102,125 | $ | 1,539,697 | |||||
Kone OYJ (Class B Stock) | 22,976 | 1,049,834 | ||||||
UPM-Kymmene OYJ | 97,953 | 1,875,033 | ||||||
|
| |||||||
4,464,564 | ||||||||
France 6.0% | ||||||||
Atos SE | 9,884 | 879,746 | ||||||
AXA SA | 99,025 | 2,500,354 | ||||||
Capgemini SA | 2,656 | 247,919 | ||||||
Orange SA | 15,834 | 263,066 | ||||||
Peugeot SA* | 43,209 | 696,367 | ||||||
Publicis Groupe SA | 14,501 | 1,073,126 | ||||||
Renault SA | 15,969 | 1,540,821 | ||||||
Safran SA | 4,909 | 338,426 | ||||||
Sanofi | 24,837 | 2,047,239 | ||||||
Thales SA | 1,598 | 138,288 | ||||||
Total SA | 68,537 | 3,463,931 | ||||||
Valeo SA | 3,636 | 576,741 | ||||||
Vinci SA | 26,585 | 1,985,599 | ||||||
|
| |||||||
15,751,623 | ||||||||
Germany 5.3% | ||||||||
Aareal Bank AG | 25,714 | 915,426 | ||||||
adidas AG | 17,185 | 2,217,175 | ||||||
Allianz SE | 17,794 | 3,027,271 | ||||||
Bayer AG | 3,838 | 443,548 | ||||||
Deutsche Telekom AG | 34,945 | 613,408 | ||||||
Hannover Rueck SE | 16,410 | 1,876,016 | ||||||
Henkel AG & Co. KGaA | 2,673 | 271,911 | ||||||
ProSiebenSat.1 Media SE | 2,314 | 118,211 | ||||||
Siemens AG | 25,513 | 2,669,904 | ||||||
Volkswagen AG | 11,047 | 1,764,175 | ||||||
|
| |||||||
13,917,045 | ||||||||
Greece 0.8% | ||||||||
Aegean Airlines SA | 35,435 | 325,111 | ||||||
JUMBO SA* | 60,677 | 794,760 | ||||||
Metka SA | 16,582 | 126,835 | ||||||
Motor Oil Hellas Corinth Refineries SA | 43,499 | 496,096 | ||||||
Mytilineos Holdings SA* | 76,165 | 305,830 | ||||||
|
| |||||||
2,048,632 |
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 13 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Hong Kong 2.8% | ||||||||
Cathay Pacific Airways Ltd. | 61,000 | $ | 97,255 | |||||
China High Speed Transmission Equipment Group Co. Ltd.* | 1,172,000 | 908,285 | ||||||
CK Hutchison Holdings Ltd. | 43,500 | 520,418 | ||||||
Galaxy Entertainment Group Ltd. | 402 | 1,351 | ||||||
Henderson Land Development Co. Ltd. | 211,000 | 1,315,066 | ||||||
Ju Teng International Holdings Ltd. | 386,000 | 173,269 | ||||||
Kingboard Chemical Holdings Ltd. | 67,000 | 128,859 | ||||||
Link REIT (The), REIT | 330,500 | 2,005,104 | ||||||
WH Group Ltd., 144A* | 1,739,500 | 1,405,040 | ||||||
Wheelock & Co. Ltd. | 183,000 | 847,218 | ||||||
|
| |||||||
7,401,865 | ||||||||
Hungary 0.1% | ||||||||
Magyar Telekom Telecommunications PLC* | 197,287 | 342,679 | ||||||
India 0.5% | ||||||||
Reliance Industries Ltd., GDR, 144A | 38,164 | 1,129,655 | ||||||
Reliance Infrastructure Ltd., GDR | 8,164 | 204,916 | ||||||
|
| |||||||
1,334,571 | ||||||||
Indonesia 0.1% | ||||||||
United Tractors Tbk PT | 207,200 | 234,556 | ||||||
Ireland 0.7% | ||||||||
Paddy Power Betfair PLC | 6,590 | 881,731 | ||||||
Ryanair Holdings PLC, ADR | 3,997 | 323,557 | ||||||
Shire PLC | 11,632 | 725,863 | ||||||
|
| |||||||
1,931,151 | ||||||||
Israel 1.4% | ||||||||
Check Point Software Technologies Ltd.*(a) | 17,200 | 1,425,364 | ||||||
Teva Pharmaceutical Industries Ltd. | 40,891 | 2,246,266 | ||||||
|
| |||||||
3,671,630 | ||||||||
Italy 0.6% | ||||||||
Intesa Sanpaolo SpA | 213,947 | 594,733 | ||||||
Intesa Sanpaolo SpA - RSP | 274,305 | 722,571 | ||||||
Recordati SpA | 5,049 | 128,477 | ||||||
|
| |||||||
1,445,781 | ||||||||
Japan 14.8% | ||||||||
Astellas Pharma, Inc. | 123,100 | 1,659,707 | ||||||
Canon Marketing Japan, Inc. | 47,500 | 851,308 |
See Notes to Financial Statements.
14 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Central Japan Railway Co. | 9,400 | $ | 1,646,652 | |||||
Dai-ichi Life Insurance Co. Ltd. (The) | 65,300 | 784,886 | ||||||
Daiichi Sankyo Co. Ltd. | 85,900 | 2,024,439 | ||||||
Daiwa House Industry Co. Ltd. | 23,300 | 622,500 | ||||||
Dentsu, Inc. | 4,500 | 228,641 | ||||||
Fuji Heavy Industries Ltd. | 32,400 | 1,063,854 | ||||||
FUJIFILM Holdings Corp. | 7,300 | 299,653 | ||||||
Hazama Ando Corp. | 158,800 | 774,633 | ||||||
Hitachi High-Technologies Corp. | 47,300 | 1,279,828 | ||||||
Hoshizaki Electric Co. Ltd. | 1,300 | 109,100 | ||||||
ITOCHU Corp. | 24,100 | 306,277 | ||||||
Japan Airlines Co. Ltd. | 37,900 | 1,364,184 | ||||||
Japan Exchange Group, Inc. | 17,500 | 260,632 | ||||||
Japan Tobacco, Inc. | 55,900 | 2,283,959 | ||||||
KDDI Corp. | 89,300 | 2,572,352 | ||||||
Koito Manufacturing Co. Ltd. | 31,600 | 1,369,047 | ||||||
Konami Holdings Corp. | 30,500 | 961,649 | ||||||
Matsumotokiyoshi Holdings Co. Ltd. | 18,300 | 895,728 | ||||||
Medipal Holdings Corp. | 42,500 | 672,402 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 198,200 | 914,657 | ||||||
Mizuho Financial Group, Inc. | 1,340,600 | 2,009,441 | ||||||
Nikon Corp. | 93,900 | 1,368,818 | ||||||
Nippon Telegraph & Telephone Corp. | 51,284 | 2,294,976 | ||||||
Nissan Motor Co. Ltd. | 38,300 | 339,875 | ||||||
NTT DOCOMO, Inc. | 15,100 | 362,158 | ||||||
Obayashi Corp. | 111,700 | 1,094,698 | ||||||
ORIX Corp. | 125,400 | 1,773,775 | ||||||
Penta-ocean Construction Co. Ltd. | 52,600 | 236,874 | ||||||
Ricoh Co. Ltd. | 77,300 | 787,758 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 68,000 | 2,046,237 | ||||||
Taisei Corp. | 22,000 | 150,162 | ||||||
TDK Corp. | 23,300 | 1,363,373 | ||||||
Tokio Marine Holdings, Inc. | 19,700 | 644,633 | ||||||
Tokyo Electron Ltd. | 3,200 | 211,495 | ||||||
Tosoh Corp. | 47,000 | 214,826 | ||||||
Toyota Boshoku Corp. | 21,100 | 392,539 | ||||||
Toyota Motor Corp. | 17,033 | 863,399 | ||||||
|
| |||||||
39,101,125 | ||||||||
Malaysia 0.5% | ||||||||
MISC Bhd | 62,100 | 134,326 | ||||||
Padini Holdings Bhd | 222,100 | 124,510 | ||||||
Top Glove Corp. Bhd | 539,800 | 684,904 |
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 15 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Malaysia (cont’d.) | ||||||||
Unisem M Bhd | 771,600 | $ | 436,190 | |||||
|
| |||||||
1,379,930 | ||||||||
Mexico 0.9% | ||||||||
America Movil SAB de CV (Class L Stock) | 2,137,900 | 1,513,522 | ||||||
Industrias Bachoco SAB de CV | 131,800 | 552,338 | ||||||
Wal-Mart de Mexico SAB de CV | 81,600 | 201,668 | ||||||
|
| |||||||
2,267,528 | ||||||||
Netherlands 2.7% | ||||||||
Heineken Holding NV | 13,734 | 1,133,840 | ||||||
Heineken NV | 3,526 | 330,836 | ||||||
Koninklijke Ahold NV | 12,642 | 275,271 | ||||||
NN Group NV | 32,926 | 1,142,951 | ||||||
NXP Semiconductors NV* | 5,400 | 460,512 | ||||||
Royal Dutch Shell PLC (Class A Stock) | 63,388 | 1,660,340 | ||||||
Royal Dutch Shell PLC (Class B Stock) | 32,670 | 857,750 | ||||||
Steinhoff International Holdings NV | 45,952 | 287,454 | ||||||
Wolters Kluwer NV | 26,157 | 996,394 | ||||||
|
| |||||||
7,145,348 | ||||||||
New Zealand 0.7% | ||||||||
Air New Zealand Ltd. | 456,882 | 783,942 | ||||||
Auckland International Airport Ltd. | 196,817 | 844,291 | ||||||
Spark New Zealand Ltd. | 49,465 | 127,905 | ||||||
|
| |||||||
1,756,138 | ||||||||
Norway 0.9% | ||||||||
Austevoll Seafood ASA | 52,553 | 442,132 | ||||||
DNB ASA | 86,552 | 1,107,556 | ||||||
Frontline Ltd./Bermuda | 55,907 | 463,577 | ||||||
Leroy Seafood Group ASA | 2,537 | 123,818 | ||||||
Yara International ASA | 2,796 | 111,834 | ||||||
|
| |||||||
2,248,917 | ||||||||
Philippines 0.1% | ||||||||
Nickel Asia Corp. | 3,111,300 | 353,210 | ||||||
Poland 0.6% | ||||||||
Ciech SA* | 30,373 | 563,080 | ||||||
Energa SA | 300,239 | 978,219 | ||||||
Polski Koncern Naftowy Orlen SA | 6,998 | 126,212 | ||||||
|
| |||||||
1,667,511 |
See Notes to Financial Statements.
16 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Portugal 0.7% | ||||||||
Altri SGPS SA | 197,706 | $ | 770,200 | |||||
Navigator Co. SA (The) | 73,874 | 263,615 | ||||||
Sonae SGPS SA | 819,000 | 909,528 | ||||||
|
| |||||||
1,943,343 | ||||||||
Russia 0.8% | ||||||||
Gazprom PAO, ADR | 141,081 | 729,107 | ||||||
Lukoil PJSC, ADR | 14,482 | 613,820 | ||||||
Magnit PJSC, GDR, RegS | 4,245 | 146,877 | ||||||
MMC Norilsk Nickel PJSC, ADR | 7,332 | 108,147 | ||||||
Novatek OAO, GDR, RegS | 1,343 | 128,928 | ||||||
Rosneft OAO, GDR, RegS | 68,985 | 376,658 | ||||||
Surgutneftegas OAO, ADR | 23,126 | 122,336 | ||||||
|
| |||||||
2,225,873 | ||||||||
Singapore 0.7% | ||||||||
Ascendas Real Estate Investment Trust, REIT | 110,500 | 201,672 | ||||||
Wilmar International Ltd. | 569,600 | 1,564,678 | ||||||
|
| |||||||
1,766,350 | ||||||||
South Africa 1.6% | ||||||||
Redefine Properties Ltd. | 786,219 | 678,657 | ||||||
Resilient REIT Ltd. | 137,138 | 1,310,233 | ||||||
Standard Bank Group Ltd. | 165,282 | 1,484,289 | ||||||
Telkom SA SOC Ltd. | 153,073 | 610,316 | ||||||
|
| |||||||
4,083,495 | ||||||||
South Korea 4.2% | ||||||||
Com2uSCorp* | 7,598 | 859,610 | ||||||
Hyundai Steel Co. | 18,911 | 1,037,298 | ||||||
Korea Electric Power Corp. | 37,483 | 2,036,030 | ||||||
KT Corp. | 53,617 | 1,436,243 | ||||||
Lotte Chemical Corp. | 5,103 | 1,301,619 | ||||||
Samsung Electronics Co. Ltd. | 2,507 | 2,732,208 | ||||||
Shinhan Financial Group Co. Ltd. | 6,769 | 248,192 | ||||||
Sk Holdings Co. Ltd. | 546 | 107,010 | ||||||
SK Innovation Co. Ltd. | 9,348 | 1,262,517 | ||||||
|
| |||||||
11,020,727 | ||||||||
Spain 1.4% | ||||||||
Amadeus IT Holding SA (Class A Stock) | 8,093 | 369,045 | ||||||
Endesa SA | 24,208 | 509,335 |
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 17 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Spain (cont’d.) | ||||||||
Gamesa Corp. Tecnologica SA | 45,595 | $ | 900,413 | |||||
Industria de Diseno Textil SA | 28,891 | 929,878 | ||||||
Sacyr SA | 273,887 | 584,984 | ||||||
Telefonica SA | 33,273 | 363,982 | ||||||
|
| |||||||
3,657,637 | ||||||||
Sweden 2.5% | ||||||||
Axfood AB | 49,186 | 911,974 | ||||||
Bilia AB (Class A Stock) | 21,533 | 515,721 | ||||||
Boliden AB | 17,980 | 314,476 | ||||||
Investor AB (Class B Stock) | 47,348 | 1,739,571 | ||||||
Skanska AB (Class B Stock) | 64,861 | 1,429,593 | ||||||
Svenska Cellulosa AB SCA (Class B Stock) | 51,978 | 1,639,991 | ||||||
|
| |||||||
6,551,326 | ||||||||
Switzerland 5.4% | ||||||||
ABB Ltd. | 42,126 | 891,819 | ||||||
Kuehne + Nagel International AG | 901 | 130,028 | ||||||
Nestle SA | 32,025 | 2,390,336 | ||||||
Novartis AG | 50,206 | 3,820,790 | ||||||
Roche Holding AG | 16,716 | 4,229,302 | ||||||
Schindler Holding AG | 3,034 | 558,187 | ||||||
Swiss Re AG | 23,883 | 2,122,688 | ||||||
|
| |||||||
14,143,150 | ||||||||
Taiwan 3.5% | ||||||||
Formosa Petrochemical Corp. | 474,000 | 1,344,437 | ||||||
Fubon Financial Holding Co. Ltd. | 1,106,000 | 1,339,718 | ||||||
Gourmet Master Co. Ltd. | 50,000 | 402,001 | ||||||
Grand Pacific Petrochemical | 1,041,000 | 539,773 | ||||||
Kinsus Interconnect Technology Corp. | 473,000 | 913,595 | ||||||
Mega Financial Holding Co. Ltd. | 1,524,000 | 1,080,049 | ||||||
Pegatron Corp. | 619,000 | 1,304,026 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 110,000 | 505,381 | ||||||
Tripod Technology Corp. | 455,000 | 832,053 | ||||||
Winbond Electronics Corp.* | 3,391,000 | 878,286 | ||||||
|
| |||||||
9,139,319 | ||||||||
Thailand 0.7% | ||||||||
Airports of Thailand PCL | 9,100 | 102,017 | ||||||
BJC Heavy Industries PCL | 1,453,128 | 263,750 | ||||||
Kiatnakin Bank PCL | 231,200 | 274,417 |
See Notes to Financial Statements.
18 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Thailand (cont’d.) | ||||||||
SPCG PCL | 965,200 | $ | 576,725 | |||||
SVI PCL* | 4,375,293 | 612,180 | ||||||
|
| |||||||
1,829,089 | ||||||||
Turkey 1.4% | ||||||||
Akcansa Cimento AS | 30,035 | 155,126 | ||||||
Aygaz AS | 135,770 | 559,481 | ||||||
Cimsa Cimento Sanayi VE Ticaret AS | 38,013 | 221,238 | ||||||
Eregli Demir VE Celik Fabrikalari TAS | 855,107 | 1,426,380 | ||||||
Koza Altin Isletmeleri AS* | 140,809 | 921,794 | ||||||
Tupras-turkiye Petrol Rafinerileri AS | 10,114 | 266,762 | ||||||
|
| |||||||
3,550,781 | ||||||||
United Arab Emirates 0.6% | ||||||||
Abu Dhabi Commercial Bank PJSC | 365,366 | 653,972 | ||||||
Aldar Properties PJSC | 445,805 | 328,445 | ||||||
Dubai Islamic Bank PJSC | 407,111 | 642,536 | ||||||
|
| |||||||
1,624,953 | ||||||||
United Kingdom 11.9% | ||||||||
3i Group PLC | 16,052 | 111,338 | ||||||
Anglo American PLC | 10,303 | 115,242 | ||||||
AstraZeneca PLC | 3,019 | 173,208 | ||||||
Barratt Developments PLC | 19,521 | 152,018 | ||||||
Bellway PLC | 22,839 | 817,805 | ||||||
Berkeley Group Holdings PLC | 18,126 | 794,293 | ||||||
BP PLC | 490,546 | 2,702,615 | ||||||
British American Tobacco PLC | 51,511 | 3,140,744 | ||||||
British Land Co. PLC (The), REIT | 15,532 | 163,420 | ||||||
BT Group PLC | 147,147 | 953,821 | ||||||
DCC PLC | 9,950 | 882,520 | ||||||
easyJet PLC | 38,830 | 836,917 | ||||||
Fiat Chrysler Automobiles NV | 13,511 | 108,773 | ||||||
Galliford Try PLC | 21,980 | 410,892 | ||||||
GKN PLC | 338,680 | 1,382,132 | ||||||
GlaxoSmithKline PLC | 131,671 | 2,814,143 | ||||||
HSBC Holdings PLC | 484,082 | 3,207,963 | ||||||
Imperial Brands PLC | 46,542 | 2,530,647 | ||||||
J. Sainsbury PLC | 384,340 | 1,626,077 | ||||||
Legal & General Group PLC | 94,706 | 309,490 | ||||||
Lloyds Banking Group PLC | 1,213,741 | 1,191,305 | ||||||
National Grid PLC | 60,597 | 864,638 |
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 19 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom (cont’d.) | ||||||||
Reckitt Benckiser Group PLC | 10,885 | $ | 1,060,408 | |||||
Safestore Holdings PLC | 42,775 | 212,070 | ||||||
Taylor Wimpey PLC | 291,703 | 786,888 | ||||||
Unilever NV, CVA | 24,984 | 1,097,549 | ||||||
Vodafone Group PLC | 410,482 | 1,322,511 | ||||||
WPP PLC | 72,931 | 1,703,863 | ||||||
|
| |||||||
31,473,290 | ||||||||
United States | ||||||||
lululemon athletica, Inc.*(a) | 48 | 3,146 | ||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 252,000,039 | ||||||
|
| |||||||
EXCHANGE TRADED FUNDS 1.1% | ||||||||
United States | ||||||||
iShares MSCI EAFE Index Fund(a) | 38,000 | 2,220,340 | ||||||
iShares MSCI Emerging Markets Index Fund(a) | 16,100 | 553,679 | ||||||
|
| |||||||
TOTAL EXCHANGE TRADED FUNDS |
| 2,774,019 | ||||||
|
| |||||||
PREFERRED STOCKS 2.4% | ||||||||
Brazil 1.5% | ||||||||
Banco Bradesco SA (PRFC) | 215,210 | 1,625,065 | ||||||
Braskem SA (PRFC) | 203,300 | 1,454,739 | ||||||
Itausa - Investimentos Itau SA (PRFC) | 378,700 | 948,058 | ||||||
|
| |||||||
4,027,862 | ||||||||
Colombia 0.1% | ||||||||
Grupo Aval Acciones y Valores SA (PRFC) | 705,981 | 294,913 | ||||||
Germany 0.8% | ||||||||
Volkswagen AG (PRFC) | 13,649 | 1,979,977 | ||||||
South Korea | ||||||||
Samsung Electronics Co. Ltd. (PRFC) | 131 | 119,641 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS | 6,422,393 | |||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 261,196,451 | |||||||
|
|
See Notes to Financial Statements.
20 |
Description | Shares | Value (Note 1) | ||||||
SHORT-TERM INVESTMENT 3.2% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund (cost $8,291,639; includes $7,340,996 of cash collateral for securities on loan) (Note 3)(d)(e) | 8,291,639 | $ | 8,291,639 | |||||
|
| |||||||
TOTAL INVESTMENTS 102.3% | 269,488,090 | |||||||
Liabilities in excess of other assets (2.3)% | (5,974,670 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 263,513,420 | ||||||
|
|
The following abbreviations are used in the semiannual report:
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
OTC—Over-the-counter
PRFC—Preference Shares
REIT—Real Estate Investment Trust
RSP—Risparmio (Savings Shares)
* | Non-income producing security. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $7,139,818; cash collateral of $7,340,996 (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 Level 3 security. The aggregate value of Level 3 security is $6,523 and 0.0% of net assets. |
(c) | Indicates a security or securities that has been deemed illiquid. |
(d) | Prudential Investments LLC, the manager of the Series also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund. |
(e) | 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.
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 21 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The following is a summary of the inputs used as of April 30, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | — | $ | 11,151,603 | $ | — | ||||||
Austria | — | 106,483 | — | |||||||||
Belgium | — | 182,732 | — | |||||||||
Brazil | 2,632,539 | — | — | |||||||||
Canada | 14,996,323 | — | — | |||||||||
Chile | 578,394 | — | — | |||||||||
China | 2,626,582 | 11,682,495 | 6,523 | |||||||||
Colombia | 905,316 | — | — | |||||||||
Denmark | — | 5,654,766 | — | |||||||||
Finland | — | 4,464,564 | — | |||||||||
France | — | 15,751,623 | — | |||||||||
Germany | — | 13,917,045 | — | |||||||||
Greece | 622,931 | 1,425,701 | — | |||||||||
Hong Kong | — | 7,401,865 | — | |||||||||
Hungary | — | 342,679 | — | |||||||||
India | 1,334,571 | — | — | |||||||||
Indonesia | — | 234,556 | — | |||||||||
Ireland | 323,557 | 1,607,594 | — | |||||||||
Israel | 1,425,364 | 2,246,266 | — | |||||||||
Italy | — | 1,445,781 | — | |||||||||
Japan | — | 39,101,125 | — | |||||||||
Malaysia | 258,836 | 1,121,094 | — | |||||||||
Mexico | 2,267,528 | — | — | |||||||||
Netherlands | 460,512 | 6,684,836 | — | |||||||||
New Zealand | — | 1,756,138 | — | |||||||||
Norway | — | 2,248,917 | — | |||||||||
Philippines | — | 353,210 | — | |||||||||
Poland | — | 1,667,511 | — | |||||||||
Portugal | — | 1,943,343 | — | |||||||||
Russia | 2,225,873 | — | — | |||||||||
Singapore | — | 1,766,350 | — | |||||||||
South Africa | — | 4,083,495 | — | |||||||||
South Korea | — | 11,020,727 | — | |||||||||
Spain | — | 3,657,637 | — | |||||||||
Sweden | — | 6,551,326 | — | |||||||||
Switzerland | — | 14,143,150 | — | |||||||||
Taiwan | — | 9,139,319 | — | |||||||||
Thailand | — | 1,829,089 | — | |||||||||
Turkey | 559,481 | 2,991,300 | — | |||||||||
United Arab Emirates | — | 1,624,953 | — |
See Notes to Financial Statements.
22 |
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
United Kingdom | $ | 1,097,549 | $ | 30,375,741 | $ | — | ||||||
United States | 3,146 | — | — | |||||||||
Exchange Traded Funds | ||||||||||||
United States | 2,774,019 | — | — | |||||||||
Preferred Stocks | ||||||||||||
Brazil | 4,027,862 | — | — | |||||||||
Colombia | 294,913 | — | — | |||||||||
Germany | — | 1,979,977 | — | |||||||||
South Korea | — | 119,641 | — | |||||||||
Affiliated Mutual Fund | 8,291,639 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 47,706,935 | $ | 221,774,632 | $ | 6,523 | ||||||
|
|
|
|
|
|
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2016 were as follows:
Banks | 13.2 | % | ||
Pharmaceuticals | 8.7 | |||
Oil, Gas & Consumable Fuels | 6.5 | |||
Insurance | 4.8 | |||
Automobiles | 3.2 | |||
Affiliated Mutual Fund (including 2.8% of collateral for securities on loan) | 3.2 | |||
Tobacco | 3.1 | |||
Diversified Telecommunication Services | 2.9 | |||
Metals & Mining | 2.8 | |||
Food Products | 2.8 | |||
Construction & Engineering | 2.8 | |||
Real Estate Investment Trusts (REITs) | 2.7 | |||
Food & Staples Retailing | 2.6 | |||
Electric Utilities | 2.3 | |||
Wireless Telecommunication Services | 2.2 | |||
Auto Components | 2.1 | |||
Real Estate Management & Development | 2.0 | |||
Diversified Financial Services | 2.0 | |||
Technology Hardware, Storage & Peripherals | 1.9 | |||
Airlines | 1.8 | |||
Electrical Equipment | 1.8 | |||
Household Durables | 1.7 | |||
Electronic Equipment, Instruments & Components | 1.7 | |||
Media | 1.6 | |||
Chemicals | 1.5 | |||
Industrial Conglomerates | 1.5 | |||
Semiconductors & Semiconductor Equipment | 1.5 | |||
Software | 1.3 | |||
Internet Software & Services | 1.3 | |||
Containers & Packaging | 1.1 | % | ||
Household Products | 1.1 | |||
Paper & Forest Products | 1.1 | |||
Exchange Traded Fund | 1.1 | |||
Beverages | 0.9 | |||
Specialty Retail | 0.9 | |||
Machinery | 0.8 | |||
Textiles, Apparel & Luxury Goods | 0.8 | |||
Marine | 0.8 | |||
Road & Rail | 0.7 | |||
Thrifts & Mortgage Finance | 0.7 | |||
Capital Markets | 0.6 | |||
Independent Power & Renewable Electricity Producers | 0.5 | |||
IT Services | 0.5 | |||
Hotels, Restaurants & Leisure | 0.5 | |||
Transportation Infrastructure | 0.5 | |||
Personal Products | 0.4 | |||
Multi-Utilities | 0.3 | |||
Distributors | 0.3 | |||
Health Care Providers & Services | 0.3 | |||
Health Care Equipment & Supplies | 0.2 | |||
Gas Utilities | 0.2 | |||
Aerospace & Defense | 0.2 | |||
Construction Materials | 0.2 | |||
Trading Companies & Distributors | 0.1 | |||
|
| |||
102.3 | ||||
Liabilities in excess of other assets | (2.3 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 23 |
Statement of Assets and Liabilities (unaudited)
as of April 30, 2016
Assets |
| |||
Investments at value, including securities on loan of $7,139,818: | ||||
Unaffiliated investments (cost $241,378,993) | $261,196,451 | |||
Affiliated investments (cost $8,291,639) | 8,291,639 | |||
Foreign currency, at value (cost $2,357,302) | 2,356,055 | |||
Receivable for investments sold | 30,392,781 | |||
Dividends and interest receivable | 917,247 | |||
Tax reclaim receivable | 866,049 | |||
Receivable for Series shares sold | 38,195 | |||
Prepaid expenses | 1,612 | |||
|
| |||
Total Assets | 304,060,029 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 29,914,095 | |||
Payable to broker for collateral for securities on loan | 7,340,996 | |||
Payable to custodian | 2,170,801 | |||
Payable for Series shares reacquired | 463,593 | |||
Accrued expenses and other liabilities | 339,988 | |||
Management fee payable | 184,264 | |||
Affiliated transfer agent fee payable | 69,130 | |||
Distribution fee payable | 63,742 | |||
|
| |||
Total liabilities | 40,546,609 | |||
|
| |||
Net Assets | $263,513,420 | |||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ 419,525 | |||
Paid-in capital in excess of par | 460,626,961 | |||
|
| |||
461,046,486 | ||||
Undistributed net investment income | 251,193 | |||
Accumulated net realized loss on investment and foreign currency transactions | (217,592,245 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 19,807,986 | |||
|
| |||
Net assets, April 30, 2016 | $263,513,420 | |||
|
|
See Notes to Financial Statements.
24 |
Class A |
| |||
Net asset value and redemption price per share | ||||
($191,974,881 ÷ 30,507,176 shares of common stock issued and outstanding) | $6.29 | |||
Maximum sales charge (5.50% of offering price) | 0.37 | |||
|
| |||
Maximum offering price to public | $6.66 | |||
|
| |||
Class B | ||||
Net asset value, offering price and redemption price per share | ||||
($3,727,729 ÷ 616,496 shares of common stock issued and outstanding) | $6.05 | |||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | ||||
($16,599,576 ÷ 2,746,026 shares of common stock issued and outstanding) | $6.04 | |||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | ||||
($51,211,234 ÷ 8,082,768 shares of common stock issued and outstanding) | $6.34 | |||
|
|
See Notes to Financial Statements.
Prudential QMA International Equity Fund | 25 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Income |
| |||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $637,821) | $ | 3,710,794 | ||
Affiliated income from securities lending, net | 124,202 | |||
Affiliated dividend income | 832 | |||
|
| |||
Total income | 3,835,828 | |||
|
| |||
Expenses | ||||
Management fee | 1,118,144 | |||
Distribution fee—Class A | 287,324 | |||
Distribution fee—Class B | 20,169 | |||
Distribution fee—Class C | 83,494 | |||
Transfer agent’s fees and expenses (including affiliated expense of $108,800) | 401,000 | |||
Custodian and accounting fees | 163,000 | |||
Shareholders’ reports | 40,000 | |||
Registration fees | 32,000 | |||
Audit fee | 16,000 | |||
Legal fees and expenses | 12,000 | |||
Directors’ fees | 8,000 | |||
Insurance expenses | 2,000 | |||
Loan interest expense | 1,160 | |||
Miscellaneous | 48,064 | |||
|
| |||
Total expenses | 2,232,355 | |||
|
| |||
Net investment income | 1,603,473 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (17,965,264 | ) | ||
Foreign currency transactions | 5,458 | |||
|
| |||
(17,959,806 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 5,043,480 | |||
Foreign currencies | 119,722 | |||
|
| |||
5,163,202 | ||||
|
| |||
Net loss on investment and foreign currency transactions | (12,796,604 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (11,193,131 | ) | |
|
|
See Notes to Financial Statements.
26 |
Statement of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2016 | Year Ended | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 1,603,473 | $ | 4,308,344 | ||||
Net realized loss on investment and foreign currency transactions | (17,959,806 | ) | (7,863,520 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 5,163,202 | (18,763,386 | ) | |||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (11,193,131 | ) | (22,318,562 | ) | ||||
|
|
|
| |||||
Dividends from net investment income (Note 1) | ||||||||
Class A | (3,287,114 | ) | (5,047,051 | ) | ||||
Class B | (41,536 | ) | (85,958 | ) | ||||
Class C | (170,911 | ) | (310,179 | ) | ||||
Class Z | (1,031,700 | ) | (1,263,747 | ) | ||||
|
|
|
| |||||
(4,531,261 | ) | (6,706,935 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 7,427,325 | 18,775,253 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 4,447,405 | 6,566,147 | ||||||
Net asset value of shares issued in merger (Note 9) | — | 50,163,770 | ||||||
Cost of shares reacquired | (21,660,294 | ) | (47,581,055 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | (9,785,564 | ) | 27,924,115 | |||||
|
|
|
| |||||
Total decrease | (25,509,956 | ) | (1,101,382 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 289,023,376 | 290,124,758 | ||||||
|
|
|
| |||||
End of period(a) | $ | 263,513,420 | $ | 289,023,376 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | 251,193 | $ | 3,178,981 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential QMA 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 QMA International Equity Fund (the “Series”, formerly Prudential International Equity Fund), 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 QMA 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 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 (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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
28 |
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.
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. The models generate an evaluated adjustment factor for each security, which can be applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price to the extent that the valuation meets the established confidence level for each security. Such confidence level is a measure of the probability of a relationship between a given equity security and the factors used in the models. If the confidence level is not met or the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
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 OTC 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
OTC 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 QMA 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 generally 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: 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.
30 |
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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Series does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gain (loss) on foreign currency transactions.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from holdings of foreign currencies, forward currency contracts, disposition of foreign currencies, currency gains (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 (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period-end exchange rates are reflected as a component of unrealized appreciation (depreciation) on investments and 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.
Master Netting Arrangements: The Series is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of 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. In addition to the master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable
Prudential QMA International Equity Fund | 31 |
Notes to Financial Statements (unaudited) (continued)
amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.
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 ultra short-term bond 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 borrower receives all interest and dividends and such payments are passed back to the lender in amounts equivalent thereto. The Series also continues to receive interest and dividends or amounts equivalent thereto, on the securities loaned and recognizes any unrealized gain (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 (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-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 (loss) (other than distribution fees, which are charged directly to the respective class) and unrealized and realized gains (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.
32 |
REITs: The Series may invest 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 when the actual sources of distributions are disclosed by the REITs.
Dividends and Distributions: The Series expects to pay dividends from 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 may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income (loss), accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Taxes: For federal income tax purposes, the Series is treated 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 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 subadviser’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, 2016.
The Series has distribution agreements with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C and Class Z
Prudential QMA International Equity Fund | 33 |
Notes to Financial Statements (unaudited) (continued)
shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A, Class B and Class C shares, pursuant to plans of distribution (the “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 of the Class Z shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at the annual rate of up to .30%, 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively.
PIMS has advised the Series that it has received $54,257 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2016. 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, 2016 it has received $2,523 and $99 in contingent deferred sales charges imposed upon redemptions by certain Class B and Class C shareholders, respectively.
PI, QMA and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Series’ transfer agent. Transfer agent’s fees and expenses on the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
PGIM, Inc., an indirect, wholly-owned subsidiary of Prudential, is the Series’ securities lending agent. Net 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, 2016, PGIM, Inc. has been compensated approximately $26,300 for these services. Effective February 5, 2016, PGIM, Inc. is being paid no compensation for acting as securities lending agent. In addition, the securities lending agent continues to absorb the transaction costs associated with the securities lending activity. Prior to January 4, 2016, PGIM, Inc. was known as Prudential Investment Management, Inc. (“PIM”).
The Series may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or
34 |
between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
The Series invests in the Prudential Core Ultra Short Bond Fund, (formerly known as 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
The cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2016, were $186,395,798 and $200,334,520, 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, 2016 were as follows:
Tax Basis | $ | 252,094,051 | ||
|
| |||
Appreciation | 28,971,084 | |||
Depreciation | (11,577,045 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 17,394,039 | ||
|
|
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 is permitted to carryforward capital losses realized on or after November 1, 2011 (“post-enactment losses”) for an unlimited period. Post-enactment losses are required to be utilized before the utilization of losses incurred prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before October 31, 2012 (“pre-enactment losses”) may have an increased likelihood to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of October 31, 2015, the pre and post-enactment losses were approximately:
Post-Enactment Losses: | $ | 8,431,000 | ||
|
| |||
Pre-Enactment Losses: | ||||
Expiring 2016 | $ | 978,000 | ||
Expiring 2017 | 180,326,000 | |||
Expiring 2018 | 8,337,000 | |||
|
| |||
$ | 189,641,000 | |||
|
|
Prudential QMA International Equity Fund | 35 |
Notes to Financial Statements (unaudited) (continued)
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 B, Class C, and Class Z shares. Class A shares are sold with a front-end sales charge of up to 5.50%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%. 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. 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.
36 |
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 513,076 | $ | 3,151,511 | |||||
Shares issued in reinvestment of dividends and distributions | 512,662 | 3,219,513 | ||||||
Shares reacquired | (2,346,753 | ) | (14,475,366 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (1,321,015 | ) | (8,104,342 | ) | ||||
Shares issued upon conversion from other share class(es) | 72,673 | 449,250 | ||||||
Shares reacquired upon conversion into other share class(es) | (28,564 | ) | (174,686 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,276,906 | ) | $ | (7,829,778 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 1,048,819 | $ | 7,448,060 | |||||
Shares issued in merger | 4,537,435 | 31,535,171 | ||||||
Shares issued in reinvestment of dividends and distributions | 721,039 | 4,924,699 | ||||||
Shares reacquired | (3,970,694 | ) | (27,890,695 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 2,336,599 | 16,017,235 | ||||||
Shares issued upon conversion from other share class(es) | 248,806 | 1,769,005 | ||||||
Shares reacquired upon conversion into other share class(es) | (536,321 | ) | (3,794,099 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,049,084 | $ | 13,992,141 | |||||
|
|
|
| |||||
Class B | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 6,348 | $ | 38,631 | |||||
Shares issued in reinvestment of dividends and distributions | 6,686 | 40,452 | ||||||
Shares reacquired | (71,381 | ) | (424,103 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (58,347 | ) | (345,020 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (75,006 | ) | (445,133 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (133,353 | ) | $ | (790,153 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 114,895 | $ | 806,872 | |||||
Shares issued in merger | 164,257 | 1,100,522 | ||||||
Shares issued in reinvestment of dividends and distributions | 12,718 | 83,686 | ||||||
Shares reacquired | (107,836 | ) | (724,595 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 184,034 | 1,266,485 | ||||||
Shares reacquired upon conversion into other share class(es) | (143,864 | ) | (956,537 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 40,170 | $ | 309,948 | |||||
|
|
|
|
Prudential QMA International Equity Fund | 37 |
Notes to Financial Statements (unaudited) (continued)
Class C | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 181,911 | $ | 1,107,413 | |||||
Shares issued in reinvestment of dividends and distributions | 27,456 | 166,109 | ||||||
Shares reacquired | (324,013 | ) | (1,914,282 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (114,646 | ) | (640,760 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1 | ) | (3 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (114,647 | ) | $ | (640,763 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 176,343 | $ | 1,212,887 | |||||
Shares issued in merger | 656,750 | 4,400,227 | ||||||
Shares issued in reinvestment of dividends and distributions | 46,372 | 305,125 | ||||||
Shares reacquired | (471,245 | ) | (3,191,508 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 408,220 | 2,726,731 | ||||||
Shares reacquired upon conversion into other share class(es) | (121,041 | ) | (853,662 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 287,179 | $ | 1,873,069 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 516,984 | $ | 3,129,770 | |||||
Shares issued in reinvestment of dividends and distributions | 161,859 | 1,021,331 | ||||||
Shares reacquired | (785,741 | ) | (4,846,543 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (106,898 | ) | (695,442 | ) | ||||
Shares issued upon conversion from other share class(es) | 28,367 | 174,689 | ||||||
Shares reacquired upon conversion into other share class(es) | (668 | ) | (4,117 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (79,199 | ) | $ | (524,870 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 1,322,244 | $ | 9,307,434 | |||||
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 | (2,233,139 | ) | (15,774,257 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,149,529 | 7,913,664 | ||||||
Shares issued upon conversion from other share class(es) | 538,030 | 3,835,345 | ||||||
Shares reacquired upon conversion into other share class(es) | (8 | ) | (52 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,687,551 | $ | 11,748,957 | |||||
|
|
|
|
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused
38 |
portion of the SCA. Prior to October 8, 2015, the Series had another SCA that provided a commitment of $900 million and the Series paid an annualized commitment fee of .075% of the unused portion of the SCA. Interest on any borrowings under the SCA is paid at contracted market rates. The Series’ portion of 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, 2016. The average daily balance for the 71 days that the Series had loans outstanding during the period was $342,873, borrowed at a weighted average interest rate of 1.64%. The maximum loan outstanding amount during the period was $828,000. At April 30, 2016, the Series did not have an outstanding loan amount.
Note 8. Ownership
As of April 30, 2016, 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 Value Fund into the Prudential QMA 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. On such date, the merged portfolio had total investments cost and value of $44,833,696 and $50,087,941, respectively, representing the principal assets acquired by the acquiring fund.
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 QMA 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 |
Prudential QMA International Equity Fund | 39 |
Notes to Financial Statements (unaudited) (continued)
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.
The net assets and net unrealized appreciation (depreciation) immediately before the acquisition were as follows:
Merged Fund | Acquiring Fund | |||||||
Prudential International Value Fund | Prudential QMA International Equity Fund | |||||||
Net Assets | Unrealized Appreciation | Net Assets | ||||||
$50,163,770 | $ | 5,244,963 | $ | 276,541,095 |
Assuming the acquisition had been completed on November 1, 2014, the Equity Fund’s results of operations for the year ended October 31, 2015 were as follows:
Net investment income | $ | 4,304,941 | (a) | |||
Net realized and unrealized (loss) on investments | $ | (27,557,139 | )(b) | |||
|
| |||||
Net decrease in net assets resulting from operations | $ | (23,252,198 | ) | |||
|
|
(a) | $4,308,344, as reported in the Statement of Operations, plus $(3,403) Net Investment Loss from the Value Fund pre-merger. |
(b) | $(26,626,906), as reported in the Statement of Operations, plus $(930,233) 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.
Note 10. New Accounting Pronouncements
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.
40 |
Management has evaluated the implications of ASU No. 2015-07 and has determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
Prudential QMA International Equity Fund | 41 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.65 | $7.36 | $7.37 | $6.02 | $5.72 | $6.17 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .04 | .11 | .15 | .12 | .12 | .09 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.29 | ) | (.65 | ) | (.02 | ) | 1.36 | .29 | (.46 | ) | ||||||||||||||||
Total from investment operations | (.25 | ) | (.54 | ) | .13 | 1.48 | .41 | (.37 | ) | |||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.11 | ) | (.17 | ) | (.14 | ) | (.13 | ) | (.11 | ) | (.11 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | - | .03 | ||||||||||||||||||||
Net asset value, end of period | $6.29 | $6.65 | $7.36 | $7.37 | $6.02 | $5.72 | ||||||||||||||||||||
Total Return(b): | (3.83)% | (7.37)% | 1.84% | 25.06% | 7.40% | (5.61)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $191,975 | $211,314 | $218,909 | $234,668 | $209,568 | $214,610 | ||||||||||||||||||||
Average net assets (000) | $192,595 | $229,598 | $232,049 | $221,300 | $204,088 | $247,859 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.70% | (e) | 1.62% | 1.59% | 1.59% | 1.67% | 1.64% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.70% | (e) | 1.62% | 1.59% | 1.59% | 1.67% | 1.64% | |||||||||||||||||||
Net investment income | 1.22% | (e) | 1.39% | 2.02% | 1.83% | 2.18% | 1.51% | |||||||||||||||||||
Portfolio turnover rate | 70% | (f) | 111% | 134% | 114% | 83% | 70% |
(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, if any. 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 year ended October 31, 2011. 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.
42 |
Class B Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.37 | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .01 | .05 | .10 | .07 | .08 | .05 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.27 | ) | (.61 | ) | (.03 | ) | 1.32 | .27 | (.45 | ) | ||||||||||||||||
Total from investment operations | (.26 | ) | (.56 | ) | .07 | 1.39 | .35 | (.40 | ) | |||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.06 | ) | (.12 | ) | (.09 | ) | (.10 | ) | (.07 | ) | (.07 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | - | .03 | ||||||||||||||||||||
Net asset value, end of period | $6.05 | $6.37 | $7.05 | $7.07 | $5.78 | $5.50 | ||||||||||||||||||||
Total Return(b): | (4.09)% | (7.96)% | 1.10% | 24.26% | 6.50% | (6.27)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $3,728 | $4,774 | $5,006 | $6,066 | $5,439 | $6,720 | ||||||||||||||||||||
Average net assets (000) | $4,056 | $5,313 | $5,868 | $5,690 | $5,823 | $8,320 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.40% | (e) | 2.32% | 2.29% | 2.29% | 2.37% | 2.34% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.40% | (e) | 2.32% | 2.29% | 2.29% | 2.37% | 2.34% | |||||||||||||||||||
Net investment income | .47% | (e) | .68% | 1.35% | 1.13% | 1.48% | .83% | |||||||||||||||||||
Portfolio turnover rate | 70% | (f) | 111% | 134% | 114% | 83% | 70% |
(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, if any. 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 year ended October 31, 2011. 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 QMA International Equity Fund | 43 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.37 | $7.05 | $7.07 | $5.78 | $5.50 | $5.94 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .02 | .06 | .10 | .07 | .08 | .05 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.29 | ) | (.62 | ) | (.03 | ) | 1.32 | .27 | (.45 | ) | ||||||||||||||||
Total from investment operations | (.27 | ) | (.56 | ) | .07 | 1.39 | .35 | (.40 | ) | |||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.06 | ) | (.12 | ) | (.09 | ) | (.10 | ) | (.07 | ) | (.07 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | - | .03 | ||||||||||||||||||||
Net asset value, end of period | $6.04 | $6.37 | $7.05 | $7.07 | $5.78 | $5.50 | ||||||||||||||||||||
Total Return(b): | (4.25)% | (7.96)% | 1.10% | 24.27% | 6.51% | (6.27)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $16,600 | $18,209 | $18,146 | $19,472 | $17,658 | $21,310 | ||||||||||||||||||||
Average net assets (000) | $16,790 | $20,086 | $19,402 | $18,341 | $19,019 | $25,128 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.40% | (e) | 2.32% | 2.29% | 2.29% | 2.37% | 2.34% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.40% | (e) | 2.32% | 2.29% | 2.29% | 2.37% | 2.34% | |||||||||||||||||||
Net investment income | .51% | (e) | .71% | 1.32% | 1.13% | 1.49% | .81% | |||||||||||||||||||
Portfolio turnover rate | 70% | (f) | 111% | 134% | 114% | 83% | 70% |
(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, if any. 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 year ended October 31, 2011. 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 Z Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.70 | $7.42 | $7.43 | $6.07 | $5.77 | $6.22 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .05 | .13 | .16 | .15 | .14 | .11 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.28 | ) | (.66 | ) | (.01 | ) | 1.36 | .29 | (.46 | ) | ||||||||||||||||
Total from investment operations | (.23 | ) | (.53 | ) | .15 | 1.51 | .43 | (.35 | ) | |||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (.13 | ) | (.19 | ) | (.16 | ) | (.15 | ) | (.13 | ) | (.13 | ) | ||||||||||||||
Capital Contributions(d): | - | - | - | - | - | .03 | ||||||||||||||||||||
Net asset value, end of period | $6.34 | $6.70 | $7.42 | $7.43 | $6.07 | $5.77 | ||||||||||||||||||||
Total Return(b): | (3.48)% | (7.15)% | 2.12% | 25.36% | 7.69% | (5.30)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $51,211 | $54,726 | $48,064 | $71,753 | $50,531 | $44,573 | ||||||||||||||||||||
Average net assets (000) | $51,093 | $55,405 | $53,881 | $60,981 | $45,946 | $46,529 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.40% | (e) | 1.32% | 1.29% | 1.29% | 1.37% | 1.34% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.40% | (e) | 1.32% | 1.29% | 1.29% | 1.37% | 1.34% | |||||||||||||||||||
Net investment income | 1.53% | (e) | 1.69% | 2.07% | 2.17% | 2.46% | 1.77% | |||||||||||||||||||
Portfolio turnover rate | 70% | (f) | 111% | 134% | 114% | 83% | 70% |
(a) | Calculated based on average shares outstanding during the period. |
(b) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total 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 year ended October 31, 2011. 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 QMA International Equity Fund | 45 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Quantitative Management Associates LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 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 | ||
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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 QMA International Equity Fund, Prudential Investments, Attn: Board of Directors, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 QMA INTERNATIONAL EQUITY FUND
SHARE CLASS | A | B | C | Z | ||||
NASDAQ | PJRAX | PJRBX | PJRCX | PJIZX | ||||
CUSIP | 743969859 | 743969867 | 743969875 | 743969883 |
MF190E2 0293032-00001-00
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential Emerging Markets Debt Local Currency Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
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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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. Prudential Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2016 Prudential Financial, Inc. and its related entities. The Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at prudentialfunds.com |
Letter from the President
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, 2016.
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
June 15, 2016
Prudential Emerging Markets Debt Local Currency Fund | 3 |
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 4/30/16 | ||||||||
Six Months (%) | One Year (%) | Five Years (%) | Since Inception (%) | |||||
Class A | 8.13 | –2.74 | –13.01 | –10.33 (3/30/11) | ||||
Class C | 7.55 | –3.51 | –15.69 | –13.08 (3/30/11) | ||||
Class Q | 8.19 | –2.27 | –11.31 | –8.50 (3/30/11) | ||||
Class Z | 8.03 | –2.42 | –11.53 | –8.73 (3/30/11) | ||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | 8.93 | –1.98 | –11.46 | –7.28 | ||||
Lipper Emerging Markets Local Currency Debt Funds Average | 7.60 | –3.33 | –13.13 | –9.08 | ||||
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||||||
One Year (%) | Five Years (%) | Since Inception (%) | ||||||
Class A | –6.78 | –3.59 | –3.59 (3/30/11) | |||||
Class C | –4.22 | –3.29 | –3.28 (3/30/11) | |||||
Class Q | –2.18 | –2.34 | –2.33 (3/30/11) | |||||
Class Z | –2.20 | –2.35 | –2.35 (3/30/11) | |||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | –1.65 | –2.00 | –2.00 | |||||
Lipper Emerging Markets Local Currency Debt Funds Average | –3.21 | –2.49 | –2.49 |
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 at redemption) | 1% on sales of $1 million or more made within 12 months of purchase | 1% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | .25% | 1% | None | None |
Benchmark Definitions
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index—The JP Morgan Government Bond Index-Emerging Markets Global Diversified Index (JP Morgan GBI-EM Global Diversified Index), an unmanaged index, is a comprehensive emerging markets debt benchmark that tracks local currency bonds issued by emerging market governments.
Lipper Emerging Markets Local Currency Debt Funds Average—The Lipper Emerging Markets Local Currency Debt Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Emerging Markets Local Currency Debt Funds category for the periods noted. Funds in the Lipper Average seek either current income or total return by investing at least 65% of total assets in debt issues denominated in the currency of their market of issuance. “Emerging market” is defined by a country’s GNP per capita or other economic measures.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. The Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the inception date for the indicated share class.
Prudential Emerging Markets Debt Local Currency Fund | 5 |
Your Fund’s Performance (continued)
Distributions and Yields as of 4/30/16 | ||||||
Total Distributions Paid for Six Months ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||
Class A | 0.17 | 4.37 | 3.39 | |||
Class C | 0.15 | 3.82 | 2.80 | |||
Class Q | 0.18 | 4.88 | 3.91 | |||
Class Z | 0.18 | 4.77 | 3.76 |
*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements).
**SEC 30-Day Unsubsidized Yield (%)— A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses.
Credit Quality expressed as a percentage of total investments as of 4/30/16 (%) | ||||
AAA | 0.2 | |||
AA | 1.3 | |||
A | 24.9 | |||
BBB | 51.2 | |||
BB | 13.7 | |||
B | 3.0 | |||
C | 0.1 | |||
Not Rated | 0.2 | |||
Cash/Cash Equivalents | 5.5 | |||
Total Investments | 100.0 |
Source: PGIM, Inc.
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as 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, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by a NRSRO. Credit ratings are subject to change. Values may not sum to 100.0% due to rounding.
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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, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your
Prudential Emerging Markets Debt Local Currency Fund | 7 |
Fees and Expenses (continued)
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, 2015 | Ending Account April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,081.30 | 1.30 | % | $ | 6.73 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.40 | 1.30 | % | $ | 6.52 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,075.50 | 2.05 | % | $ | 10.58 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.67 | 2.05 | % | $ | 10.27 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 1,081.90 | 1.05 | % | $ | 5.44 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.64 | 1.05 | % | $ | 5.27 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,080.30 | 1.05 | % | $ | 5.43 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.64 | 1.05 | % | $ | 5.27 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (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, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 2.45 | 1.30 | ||
C | 3.19 | 2.05 | ||
Q | 2.17 | 1.05 | ||
Z | 2.18 | 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 | 9 |
Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||||
LONG-TERM INVESTMENTS 92.6% |
| |||||||||||||||
FOREIGN BONDS |
| |||||||||||||||
Argentina 3.0% |
| |||||||||||||||
Argentina Bonar Bonds, Sr. Unsec’d. Notes, Ser. X | 7.000 | % | 04/17/17 | 575 | $ | 584,832 | ||||||||||
Argentine Republic Government International Bond, Sr. Unsec’d. Notes, 144A | 6.250 | 04/22/19 | 200 | 207,400 | ||||||||||||
Letras Del Banco Central De La Republica Argentina, |
| |||||||||||||||
Bills | 40.200 | (a) | 06/08/16 | ARS | 1,150 | 77,409 | ||||||||||
Bills | 41.110 | (a) | 06/01/16 | ARS | 1,130 | 76,402 | ||||||||||
|
| |||||||||||||||
946,043 | ||||||||||||||||
Brazil 11.4% |
| |||||||||||||||
Brazil Notas do Tesouro Nacionalie, | ||||||||||||||||
Notes, Ser. NTNB | 6.000 | 08/15/50 | BRL | 563 | 465,863 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/18 | BRL | 2,248 | 628,735 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/19 | BRL | 800 | 220,174 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/21 | BRL | 2,729 | 725,820 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/23 | BRL | 2,217 | 570,608 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/25 | BRL | 2,230 | 560,095 | |||||||||||
Sr. Notes, Ser. NTNF | 10.000 | 01/01/17 | BRL | 575 | 163,388 | |||||||||||
Brazilian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.500 | 01/05/24 | BRL | 54 | 13,762 | |||||||||||
Sr. Unsec’d. Notes | 8.875 | 10/14/19 | 75 | 90,000 | ||||||||||||
JBS USA LLC/JBS USA Finance, Inc., Sr. Unsec’d. Notes, 144A(original cost $48,000; purchased 01/27/16)(b)(c) | 5.875 | 07/15/24 | 60 | 55,800 | ||||||||||||
Petrobras Global Finance BV, Gtd. Notes | 6.125 | 10/06/16 | 130 | 131,300 | ||||||||||||
|
| |||||||||||||||
3,625,545 | ||||||||||||||||
Colombia 3.3% |
| |||||||||||||||
Colombian TES, | ||||||||||||||||
Bonds, Ser. B | 6.000 | 04/28/28 | COP | 1,039,300 | 303,790 | |||||||||||
Bonds, Ser. B | 7.000 | 09/11/19 | COP | 612,200 | 211,568 | |||||||||||
Bonds, Ser. B | 7.000 | 05/04/22 | COP | 646,800 | 218,599 | |||||||||||
Bonds, Ser. B | 7.500 | 08/26/26 | COP | 871,300 | 292,952 | |||||||||||
Pacific Rubiales Energy Corp., Gtd. Notes, RegS(original cost $112,118; purchased 05/13/15)(b)(c) | 5.375 | (d) | 01/26/19 | 125 | 18,750 | |||||||||||
|
| |||||||||||||||
1,045,659 | ||||||||||||||||
Czech Republic 0.9% |
| |||||||||||||||
Czech Republic Government Bond, Bonds, Ser. 41, RegS | 4.600 | 08/18/18 | CZK | 6,240 | 292,441 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Dominican Republic 0.7% | ||||||||||||||||
Dominican Republic International Bond, Sr. Unsec’d. Notes, RegS | 7.500 | % | 05/06/21 | 200 | $ | 219,000 | ||||||||||
Hungary 4.6% | ||||||||||||||||
Hungary Government Bond, | ||||||||||||||||
Bonds, Ser. 17/A | 6.750 | 11/24/17 | HUF | 54,510 | 217,684 | |||||||||||
Bonds, Ser. 19/A | 6.500 | 06/24/19 | HUF | 85,000 | 358,542 | |||||||||||
Bonds, Ser. 20/A | 7.500 | 11/12/20 | HUF | 10,000 | 45,191 | |||||||||||
Bonds, Ser. 23/A | 6.000 | 11/24/23 | HUF | 117,790 | 524,525 | |||||||||||
Bonds, Ser. 25/B | 5.500 | 06/24/25 | HUF | 14,180 | 61,484 | |||||||||||
Hungary Government International Bond, Sr. Unsec’d. Notes | 6.375 | 03/29/21 | 210 | 239,085 | ||||||||||||
|
| |||||||||||||||
1,446,511 | ||||||||||||||||
Indonesia 12.7% |
| |||||||||||||||
Indonesia Treasury Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. FR53 | 8.250 | 07/15/21 | IDR | 12,000,000 | 941,292 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR56 | 8.375 | 09/15/26 | IDR | 3,200,000 | 253,879 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR58 | 8.250 | 06/15/32 | IDR | 1,700,000 | 133,109 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR59 | 7.000 | 05/15/27 | IDR | 3,800,000 | 271,342 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR61 | 7.000 | 05/15/22 | IDR | 2,300,000 | 169,781 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR63 | 5.625 | 05/15/23 | IDR | 3,100,000 | 209,854 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR65 | 6.625 | 05/15/33 | IDR | 5,700,000 | 381,768 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR67 | 8.750 | 02/15/44 | IDR | 600,000 | 48,371 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR68 | 8.375 | 03/15/34 | IDR | 9,000,000 | 714,383 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR70 | 8.375 | 03/15/24 | IDR | 3,000,000 | 237,343 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR71 | 9.000 | 03/15/29 | IDR | 5,500,000 | 453,454 | |||||||||||
Pertamina Persero PT, | ||||||||||||||||
Sr. Unsec’d. Notes, RegS | 5.250 | 05/23/21 | 200 | 210,232 | ||||||||||||
|
| |||||||||||||||
4,024,808 | ||||||||||||||||
Kazakhstan 0.4% | ||||||||||||||||
KazMunayGas National Co. JSC, | ||||||||||||||||
Sr. Unsec’d. Notes, MTN, RegS | 9.125 | 07/02/18 | 125 | 136,875 | ||||||||||||
Malaysia 4.7% | ||||||||||||||||
Malaysia Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. 0114 | 4.181 | 07/15/24 | MYR | 600 | 156,093 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0115 | 3.955 | 09/15/25 | MYR | 1,900 | 487,298 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0116 | 3.800 | 08/17/23 | MYR | 600 | 153,341 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0215 | 3.795 | 09/30/22 | MYR | 560 | 143,484 |
See Notes to Financial Statements.
12 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Malaysia (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. 0310 | 4.498 | % | 04/15/30 | MYR | 500 | $ | 131,558 | |||||||||
Sr. Unsec’d. Notes, Ser. 0313 | 3.480 | 03/15/23 | MYR | 180 | 45,266 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0314 | 4.048 | 09/30/21 | MYR | 1,060 | 276,148 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0412 | 4.127 | 04/15/32 | MYR | 270 | 67,900 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0413 | 3.844 | 04/15/33 | MYR | 160 | 38,576 | |||||||||||
|
| |||||||||||||||
1,499,664 | ||||||||||||||||
Mexico 8.5% | ||||||||||||||||
America Movil SAB de CV, | 6.450 | 12/05/22 | MXN | 7,500 | 421,761 | |||||||||||
Mexican Bonos, | ||||||||||||||||
Bonds, Ser. M | 7.750 | 05/29/31 | MXN | 6,045 | 400,481 | |||||||||||
Bonds, Ser. M | 8.000 | 06/11/20 | MXN | 4,560 | 293,543 | |||||||||||
Bonds, Ser. M-30 | 10.000 | 11/20/36 | MXN | 4,500 | 368,304 | |||||||||||
Sr. Unsec’d. Notes, Ser. M | 8.000 | 12/07/23 | MXN | 6,620 | 439,821 | |||||||||||
Petroleos Mexicanos, | ||||||||||||||||
Gtd. Notes | 3.500 | 07/18/18 | 400 | 403,600 | ||||||||||||
Gtd. Notes | 4.875 | 01/24/22 | 30 | 30,225 | ||||||||||||
Gtd. Notes, 144A | 5.500 | 02/04/19 | 35 | 36,592 | ||||||||||||
Gtd. Notes, 144A | 6.875 | 08/04/26 | 45 | 49,657 | ||||||||||||
Gtd. Notes, 144A | 7.650 | 11/24/21 | MXN | 4,120 | 234,221 | |||||||||||
|
| |||||||||||||||
2,678,205 | ||||||||||||||||
Peru 0.8% | ||||||||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Bonds | 6.950 | 08/12/31 | PEN | 190 | 59,866 | |||||||||||
Sr. Unsec’d. Notes, RegS | 6.950 | 08/12/31 | PEN | 624 | 196,613 | |||||||||||
|
| |||||||||||||||
256,479 | ||||||||||||||||
Philippines 1.1% | ||||||||||||||||
Philippine Government International Bond, | 6.250 | 01/14/36 | PHP | 15,000 | 358,904 | |||||||||||
Poland 8.2% | ||||||||||||||||
Poland Government Bond, | ||||||||||||||||
Bonds, Ser. 0421 | 2.000 | 04/25/21 | PLN | 2,300 | 595,470 | |||||||||||
Bonds, Ser. 0725 | 3.250 | 07/25/25 | PLN | 4,975 | 1,337,663 | |||||||||||
Bonds, Ser. 0726 | 2.500 | 07/25/26 | PLN | 1,500 | 372,991 | |||||||||||
Bonds, Ser. 1017 | 5.250 | 10/25/17 | PLN | 1,105 | 305,239 | |||||||||||
|
| |||||||||||||||
2,611,363 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 13 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Romania 4.6% | ||||||||||||||||
Romania Government Bond, | ||||||||||||||||
Bonds, Ser. 10Y | 4.750 | % | 02/24/25 | RON | 500 | $ | 138,105 | |||||||||
Bonds, Ser. 10Y | 5.850 | 04/26/23 | RON | 2,620 | 773,223 | |||||||||||
Bonds, Ser. 4YR | 3.250 | 01/17/18 | RON | 850 | 224,841 | |||||||||||
Bonds, Ser. 10YR | 6.750 | 06/11/17 | RON | 1,130 | 307,161 | |||||||||||
|
| |||||||||||||||
1,443,330 | ||||||||||||||||
Russia 6.7% |
| |||||||||||||||
Gazprom OAO Via Gaz Capital SA, Sr. Unsec’d. Notes, RegS | 9.250 | 04/23/19 | 230 | 263,910 | ||||||||||||
Russian Agricultural Bank OJSC Via RSHB Capital SA, Sr. Unsec’d. Notes, RegS | 8.625 | 02/17/17 | RUB | 10,400 | 157,434 | |||||||||||
Russian Federal Bond - OFZ, | ||||||||||||||||
Bonds, Ser. 6211 | 7.000 | 01/25/23 | RUB | 26,245 | 369,937 | |||||||||||
Bonds, Ser. 6212 | 7.050 | 01/19/28 | RUB | 54,422 | 739,379 | |||||||||||
Bonds, Ser. 6215 | 7.000 | 08/16/23 | RUB | 28,850 | 404,874 | |||||||||||
Vnesheconombank Via VEB Finance PLC, Sr. Unsec’d. Notes, RegS | 4.224 | 11/21/18 | 200 | 199,750 | ||||||||||||
|
| |||||||||||||||
2,135,284 | ||||||||||||||||
Singapore 0.2% |
| |||||||||||||||
Singapore Government Bond, Sr. Unsec’d. Notes | 2.750 | 07/01/23 | SGD | 95 | 74,454 | |||||||||||
South Africa 9.8% | ||||||||||||||||
Eskom Holdings SOC Ltd., Govt. Gtd., Ser. ES23, MTN | 10.000 | 01/25/23 | ZAR | 7,500 | 537,276 | |||||||||||
South Africa Government Bond, | ||||||||||||||||
Bonds, Ser. 2023 | 7.750 | 02/28/23 | ZAR | 1,385 | 92,064 | |||||||||||
Bonds, Ser. 2032 | 8.250 | 03/31/32 | ZAR | 1,240 | 78,101 | |||||||||||
Bonds, Ser. 2044 | 8.750 | 01/31/44 | ZAR | 18,965 | 1,205,798 | |||||||||||
Bonds, Ser. R207 | 7.250 | 01/15/20 | ZAR | 16,210 | 1,097,501 | |||||||||||
Sr. Unsec’d. Notes, Ser. R209 | 6.250 | 03/31/36 | ZAR | 1,916 | 95,307 | |||||||||||
|
| |||||||||||||||
3,106,047 | ||||||||||||||||
South Korea 0.3% |
| |||||||||||||||
Export-Import Bank Of Korea, Sr. Unsec’d. Notes, EMTN | 0.500 | 01/25/17 | TRY | 300 | 99,302 | |||||||||||
Thailand 4.0% | ||||||||||||||||
Thailand Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 3.250 | 06/16/17 | THB | 10,000 | 292,392 | |||||||||||
Sr. Unsec’d. Notes | 3.400 | 06/17/36 | THB | 9,130 | 306,348 |
See Notes to Financial Statements.
14 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value (Note 1) | ||||||||||||
FOREIGN BONDS (Continued) | ||||||||||||||||
Thailand (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes | 3.775 | % | 06/25/32 | THB | 600 | $ | 20,569 | |||||||||
Sr. Unsec’d. Notes | 4.875 | 06/22/29 | THB | 3,140 | 118,399 | |||||||||||
Sr. Unsec’d. Notes | 5.125 | 03/13/18 | THB | 7,000 | 213,967 | |||||||||||
Sr. Unsec’d. Notes - Inflation Linked, RegS | 1.200 | 07/14/21 | THB | 10,552 | 296,827 | |||||||||||
|
| |||||||||||||||
1,248,502 | ||||||||||||||||
Turkey 6.7% |
| |||||||||||||||
Turkey Government Bond, | ||||||||||||||||
Bonds | 3.000 | 02/23/22 | TRY | 873 | 325,557 | |||||||||||
Bonds | 7.100 | 03/08/23 | TRY | 3 | 806 | |||||||||||
Bonds | 8.000 | 03/12/25 | TRY | 4,435 | 1,483,221 | |||||||||||
Bonds | 8.800 | 09/27/23 | TRY | 535 | 188,627 | |||||||||||
Bonds | 9.000 | 07/24/24 | TRY | 350 | 124,464 | |||||||||||
|
| |||||||||||||||
2,122,675 | ||||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS |
| 29,371,091 | ||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENT 4.8% |
| |||||||||||||||
AFFILIATED MUTUAL FUND |
| |||||||||||||||
Prudential Investment Portfolios 2 - Prudential Core |
| 1,523,707 | 1,523,707 | |||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 97.4% |
| 30,894,798 | ||||||||||||||
Other assets in excess of liabilities(f) 2.6% |
| 819,884 | ||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% |
| $ | 31,714,682 | |||||||||||||
|
|
The following abbreviations are used in the semiannual report:
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.
EMTN—Euro Medium Term Note
MTN—Medium Term Note
OTC—Over-the-counter
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.
ARS—Argentine Peso
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 15 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
AUD—Australian Dollar
BRL—Brazilian Real
CAD—Canadian Dollar
CLP—Chilean Peso
CNH—Chinese Renminbi
COP—Colombian Peso
CZK—Czech Koruna
EUR—Euro
GBP—British Pound
HUF—Hungarian Forint
IDR—Indonesian Rupiah
ILS—Israeli Shekel
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
NZD—New Zealand Dollar
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RON—Romanian Leu
RUB—Russian Ruble
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
TWD—New Taiwanese Dollar
ZAR—South African Rand
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | Represents zero coupon bond. Rate quoted represents effective yield at April 30, 2016. |
(b) | Indicates a security or securities that have been deemed illiquid. |
(c) | Indicates a restricted security; the aggregate original cost of the restricted securities is $160,118. The aggregate value of $74,550 is approximately 0.2% of net assets. |
(d) | Represents issuer in default on interest payments. Non-income producing security. |
(e) | Prudential Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund. |
(f) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end: |
See Notes to Financial Statements.
16 |
Forward foreign currency exchange contracts outstanding at April 30, 2016:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts: |
| |||||||||||||||||
Brazilian Real, | ||||||||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | BRL | 550 | $ | 149,277 | $ | 159,167 | $ | 9,890 | |||||||||
Expiring 05/12/2016 | Citigroup Global Markets | BRL | 735 | 199,570 | 212,982 | 13,412 | ||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | BRL | 913 | 245,934 | 264,349 | 18,415 | ||||||||||||
Expiring 05/12/2016 | Goldman Sachs & Co. | BRL | 1,607 | 454,200 | 465,416 | 11,216 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | BRL | 29 | 8,001 | 8,398 | 397 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | BRL | 69 | 19,000 | 19,894 | 894 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | BRL | 77 | 21,000 | 22,369 | 1,369 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | BRL | 82 | 22,000 | 23,792 | 1,792 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | BRL | 92 | 25,000 | 26,514 | 1,514 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | BRL | 205 | 55,407 | 59,388 | 3,981 | ||||||||||||
Expiring 06/02/2016 | Bank of America | BRL | 97 | 27,125 | 27,837 | 712 | ||||||||||||
Expiring 06/02/2016 | Bank of America | BRL | 273 | 76,500 | 78,508 | 2,008 | ||||||||||||
Expiring 06/02/2016 | JPMorgan Chase | BRL | 130 | 37,181 | 37,341 | 160 | ||||||||||||
Canadian Dollar, | ||||||||||||||||||
Expiring 07/14/2016 | Toronto Dominion | CAD | 589 | 459,733 | 469,525 | 9,792 | ||||||||||||
Chilean Peso, | ||||||||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | CLP | 102,354 | 151,300 | 154,748 | 3,448 | ||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | CLP | 71,681 | 103,600 | 108,363 | 4,763 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | CLP | 20,851 | 29,072 | 31,521 | 2,449 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | CLP | 71,639 | 103,600 | 108,300 | 4,700 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | CLP | 99,255 | 149,201 | 150,049 | 848 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | CLP | 145,726 | 213,700 | 220,301 | 6,601 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CLP | 7,400 | 11,000 | 11,182 | 182 | ||||||||||||
Chinese Renminbi, | ||||||||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 58 | 9,000 | 9,004 | 4 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 65 | 10,000 | 10,044 | 44 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 92 | 14,000 | 14,111 | 111 | ||||||||||||
Colombian Peso, | ||||||||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 130,662 | 39,018 | 45,774 | 6,756 | ||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 231,694 | 68,589 | 81,168 | 12,579 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 89,085 | 26,380 | 31,209 | 4,829 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 124,608 | 36,931 | 43,653 | 6,722 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 133,050 | 39,399 | 46,611 | 7,212 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 585,347 | 175,002 | 205,062 | 30,060 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 2,384,655 | 695,305 | 835,406 | 140,101 | ||||||||||||
Expiring 05/13/2016 | Credit Suisse First Boston Corp. | COP | 206,571 | 68,811 | 72,367 | 3,556 | ||||||||||||
Expiring 05/13/2016 | Goldman Sachs & Co. | COP | 360,369 | 116,248 | 126,247 | 9,999 | ||||||||||||
Expiring 05/13/2016 | Goldman Sachs & Co. | COP | 1,058,080 | 351,814 | 370,673 | 18,859 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 17 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Colombian Peso (cont’d.) | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | COP | 30,917 | $ | 10,000 | $ | 10,823 | $ | 823 | |||||||||
Expiring 05/18/2016 | Barclays Capital Group | COP | 60,200 | 20,000 | 21,073 | 1,073 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | COP | 179,165 | 57,777 | 62,717 | 4,940 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | COP | 38,448 | 12,000 | 13,459 | 1,459 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | COP | 44,123 | 15,000 | 15,445 | 445 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | COP | 63,231 | 21,000 | 22,134 | 1,134 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | COP | 66,896 | 23,000 | 23,417 | 417 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | COP | 69,240 | 24,000 | 24,238 | 238 | ||||||||||||
Expiring 05/27/2016 | JPMorgan Chase | COP | 67,421 | 23,513 | 23,568 | 55 | ||||||||||||
Czech Koruna, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 215 | 9,000 | 9,117 | 117 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 409 | 17,000 | 17,319 | 319 | ||||||||||||
Expiring 07/22/2016 | JPMorgan Chase | CZK | 38 | 1,590 | 1,601 | 11 | ||||||||||||
Euro, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 8 | 9,000 | 9,367 | 367 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 9 | 10,000 | 10,132 | 132 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 10 | 11,000 | 11,002 | 2 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 10 | 10,999 | 11,271 | 272 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 11 | 13,000 | 13,079 | 79 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 13 | 14,000 | 14,413 | 413 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 19 | 21,000 | 21,212 | 212 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 20 | 23,000 | 23,173 | 173 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 37 | 42,000 | 42,528 | 528 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 38 | 43,000 | 43,690 | 690 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 42 | 48,000 | 48,193 | 193 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 72 | 81,000 | 82,278 | 1,278 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 73 | 82,000 | 83,156 | 1,156 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 81 | 91,000 | 92,688 | 1,688 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 99 | 112,000 | 112,953 | 953 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 103 | 117,000 | 117,625 | 625 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | EUR | 27 | 30,000 | 30,389 | 389 | ||||||||||||
Expiring 07/27/2016 | Citigroup Global Markets | EUR | 238 | 269,510 | 273,696 | 4,186 | ||||||||||||
Expiring 07/27/2016 | JPMorgan Chase | EUR | 112 | 128,000 | 128,055 | 55 | ||||||||||||
Expiring 07/27/2016 | JPMorgan Chase | EUR | 118 | 134,750 | 135,292 | 542 | ||||||||||||
Hungarian Forint, | ||||||||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | HUF | 18,452 | 67,592 | 67,671 | 79 | ||||||||||||
Expiring 07/22/2016 | Deutsche Bank AG | HUF | 4,419 | 16,222 | 16,206 | (16 | ) | |||||||||||
Expiring 07/22/2016 | Goldman Sachs & Co. | HUF | 42,115 | 152,005 | 154,449 | 2,444 | ||||||||||||
Expiring 07/22/2016 | JPMorgan Chase | HUF | 4,102 | 14,875 | 15,043 | 168 |
See Notes to Financial Statements.
18 |
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Indian Rupee, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | INR | 1,202 | $ | 18,000 | $ | 18,057 | $ | 57 | |||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 532 | 7,999 | 7,989 | (10 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 733 | 11,000 | 11,017 | 17 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 1,432 | 21,000 | 21,507 | 507 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 1,494 | 22,000 | 22,440 | 440 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 1,531 | 23,000 | 22,996 | (4 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 1,735 | 26,000 | 26,063 | 63 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 2,217 | 33,000 | 33,299 | 299 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 2,321 | 34,000 | 34,864 | 864 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 2,364 | 34,000 | 35,518 | 1,518 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 5,099 | 76,391 | 76,603 | 212 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | INR | 4,226 | 63,000 | 63,485 | 485 | ||||||||||||
Expiring 05/23/2016 | Barclays Capital Group | INR | 8,134 | 121,221 | 122,068 | 847 | ||||||||||||
Expiring 05/23/2016 | Barclays Capital Group | INR | 18,865 | 281,778 | 283,113 | 1,335 | ||||||||||||
Expiring 05/23/2016 | Citigroup Global Markets | INR | 10,774 | 160,557 | 161,691 | 1,134 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | INR | 12,887 | 192,119 | 191,259 | (860 | ) | |||||||||||
Expiring 07/22/2016 | JPMorgan Chase | INR | 911 | 13,546 | 13,527 | (19 | ) | |||||||||||
Indonesia Rupiah, | ||||||||||||||||||
Expiring 06/06/2016 | Barclays Capital Group | IDR | 397,906 | 29,750 | 29,994 | 244 | ||||||||||||
Expiring 06/06/2016 | JPMorgan Chase | IDR | 324,478 | 24,500 | 24,459 | (41 | ) | |||||||||||
Expiring 06/06/2016 | JPMorgan Chase | IDR | 455,277 | 34,335 | 34,318 | (17 | ) | |||||||||||
Israeli Shekel, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ILS | 38 | 10,000 | 10,076 | 76 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ILS | 75 | 20,000 | 20,186 | 186 | ||||||||||||
Japanese Yen, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,133 | 10,000 | 10,653 | 653 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,185 | 11,000 | 11,140 | 140 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,359 | 12,000 | 12,780 | 780 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,474 | 13,000 | 13,858 | 858 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,667 | 15,000 | 15,673 | 673 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,735 | 16,000 | 16,317 | 317 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 2,271 | 20,000 | 21,354 | 1,354 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 2,727 | 25,000 | 25,645 | 645 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 2,955 | 26,000 | 27,787 | 1,787 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 3,368 | 30,000 | 31,663 | 1,663 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 3,642 | 33,000 | 34,241 | 1,241 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 5,353 | 49,000 | 50,330 | 1,330 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 6,295 | 58,000 | 59,185 | 1,185 |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 19 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Japanese Yen (cont’d.) | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 7,210 | $ | 64,000 | $ | 67,789 | $ | 3,789 | |||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 7,761 | 69,000 | 72,968 | 3,968 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 18,648 | 173,000 | 175,336 | 2,336 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | JPY | 2,002 | 18,000 | 18,825 | 825 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | JPY | 10,696 | 100,000 | 100,571 | 571 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | JPY | 6,227 | 56,000 | 58,552 | 2,552 | ||||||||||||
Malaysian Ringgit, | ||||||||||||||||||
Expiring 05/12/2016 | Bank of America | MYR | 3,851 | 919,357 | 984,716 | 65,359 | ||||||||||||
Expiring 05/12/2016 | Barclays Capital Group | MYR | 158 | 37,389 | 40,286 | 2,897 | ||||||||||||
Expiring 05/12/2016 | Barclays Capital Group | MYR | 346 | 83,124 | 88,592 | 5,468 | ||||||||||||
Expiring 05/12/2016 | Barclays Capital Group | MYR | 1,052 | 255,615 | 268,911 | 13,296 | ||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | MYR | 567 | 134,282 | 144,944 | 10,662 | ||||||||||||
Expiring 05/12/2016 | JPMorgan Chase | MYR | 168 | 42,875 | 42,897 | 22 | ||||||||||||
Expiring 05/12/2016 | JPMorgan Chase | MYR | 354 | 84,000 | 90,494 | 6,494 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MYR | 31 | 8,000 | 7,931 | (69 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MYR | 98 | 25,000 | 25,031 | 31 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MYR | 168 | 42,577 | 42,874 | 297 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MYR | 37 | 9,000 | 9,385 | 385 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MYR | 90 | 22,000 | 23,126 | 1,126 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MYR | 93 | 23,000 | 23,726 | 726 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MYR | 140 | 34,000 | 35,834 | 1,834 | ||||||||||||
Expiring 07/28/2016 | JPMorgan Chase | MYR | 138 | 35,154 | 35,034 | (120 | ) | |||||||||||
Expiring 08/29/2016 | Citigroup Global Markets | MYR | 2,429 | 566,069 | 616,412 | 50,343 | ||||||||||||
Mexican Peso, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 158 | 9,000 | 9,151 | 151 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 285 | 16,000 | 16,530 | 530 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 375 | 21,000 | 21,768 | 768 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 392 | 22,000 | 22,725 | 725 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 478 | 27,000 | 27,760 | 760 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 488 | 28,000 | 28,310 | 310 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 500 | 29,000 | 29,027 | 27 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 542 | 31,413 | 31,255 | (158 | ) | |||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 1,615 | 92,730 | 93,110 | 380 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 1,679 | 96,209 | 96,794 | 585 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 3,327 | 188,939 | 191,779 | 2,840 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 18,865 | 1,083,551 | 1,087,526 | 3,975 | ||||||||||||
Expiring 07/22/2016 | Hong Kong & Shanghai Bank | MXN | 812 | 46,887 | 46,810 | (77 | ) | |||||||||||
Expiring 07/22/2016 | JPMorgan Chase | MXN | 1,289 | 73,500 | 74,328 | 828 | ||||||||||||
Expiring 07/22/2016 | JPMorgan Chase | MXN | 3,330 | 191,790 | 191,982 | 192 |
See Notes to Financial Statements.
20 |
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TWD | 355 | $ | 11,000 | $ | 10,994 | $ | (6 | ) | ||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 452 | 14,000 | 14,020 | 20 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,203 | 36,000 | 37,296 | 1,296 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,205 | 36,000 | 37,376 | 1,376 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,805 | 55,000 | 55,972 | 972 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,837 | 56,000 | 56,977 | 977 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,856 | 57,000 | 57,552 | 552 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 2,833 | 87,000 | 87,841 | 841 | ||||||||||||
Expiring 07/13/2016 | Bank of America | TWD | 3,055 | 94,392 | 94,803 | 411 | ||||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | TWD | 6,085 | 188,231 | 188,806 | 575 | ||||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | TWD | 8,468 | 264,515 | 262,769 | (1,746 | ) | |||||||||||
Expiring 07/13/2016 | JPMorgan Chase | TWD | 34,651 | 1,077,297 | 1,075,202 | (2,095 | ) | |||||||||||
New Zealand Dollar, | ||||||||||||||||||
Expiring 07/14/2016 | Citigroup Global Markets | NZD | 440 | 303,392 | 306,005 | 2,613 | ||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 350 | 104,049 | 106,366 | 2,317 | ||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 370 | 107,500 | 112,377 | 4,877 | ||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 461 | 135,480 | 140,062 | 4,582 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 79 | 23,625 | 24,129 | 504 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 184 | 53,725 | 55,852 | 2,127 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 650 | 183,570 | 197,674 | 14,104 | ||||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 678 | 190,315 | 206,227 | 15,912 | ||||||||||||
Expiring 05/13/2016 | Credit Suisse First Boston Corp. | PEN | 50 | 14,959 | 15,159 | 200 | ||||||||||||
Expiring 05/13/2016 | Credit Suisse First Boston Corp. | PEN | 184 | 53,725 | 55,975 | 2,250 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PEN | 56 | 17,000 | 16,925 | (75 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PEN | 59 | 18,000 | 17,905 | (95 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 48 | 14,000 | 14,570 | 570 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 197 | 58,000 | 59,948 | 1,948 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 495 | 145,000 | 150,396 | 5,396 | ||||||||||||
Philippine Peso, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PHP | 924 | 20,000 | 19,686 | (314 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PHP | 1,984 | 43,000 | 42,262 | (738 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PHP | 2,674 | 58,000 | 56,980 | (1,020 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 420 | 9,000 | 8,946 | (54 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 784 | 17,000 | 16,704 | (296 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 1,075 | 23,000 | 22,914 | (86 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 2,487 | 53,000 | 52,988 | (12 | ) |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 21 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Polish Zloty, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PLN | 31 | $ | 8,000 | $ | 7,991 | $ | (9 | ) | ||||||||
Expiring 07/22/2016 | Citigroup Global Markets | PLN | 365 | 94,570 | 95,453 | 883 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | PLN | 484 | 128,400 | 126,630 | (1,770 | ) | |||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | PLN | 769 | 201,043 | 201,145 | 102 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | PLN | 1,370 | 361,276 | 358,262 | (3,014 | ) | |||||||||||
Expiring 07/22/2016 | Morgan Stanley | PLN | 146 | 38,163 | 38,197 | 34 | ||||||||||||
Romanian Leu, | ||||||||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | RON | 184 | 47,120 | 47,111 | (9 | ) | |||||||||||
Russian Ruble, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | RUB | 2,041 | 29,151 | 31,347 | 2,196 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | RUB | 578 | 8,000 | 8,884 | 884 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | RUB | 649 | 9,000 | 9,972 | 972 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | RUB | 690 | 10,000 | 10,601 | 601 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | RUB | 895 | 12,000 | 13,744 | 1,744 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | RUB | 919 | 12,000 | 14,115 | 2,115 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | RUB | 901 | 13,000 | 13,841 | 841 | ||||||||||||
Expiring 07/20/2016 | Barclays Capital Group | RUB | 5,962 | 88,100 | 90,071 | 1,971 | ||||||||||||
Expiring 07/20/2016 | Barclays Capital Group | RUB | 12,667 | 188,232 | 191,357 | 3,125 | ||||||||||||
Expiring 07/20/2016 | Citigroup Global Markets | RUB | 4,294 | 63,875 | 64,873 | 998 | ||||||||||||
Expiring 07/20/2016 | Citigroup Global Markets | RUB | 6,824 | 100,684 | 103,084 | 2,400 | ||||||||||||
Expiring 07/20/2016 | JPMorgan Chase | RUB | 1,598 | 24,202 | 24,142 | (60 | ) | |||||||||||
Singapore Dollar, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 18 | 13,000 | 13,312 | 312 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 31 | 22,000 | 23,074 | 1,074 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 52 | 37,000 | 38,649 | 1,649 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | SGD | 59 | 44,000 | 43,963 | (37 | ) | |||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | SGD | 399 | 298,020 | 296,118 | (1,902 | ) | |||||||||||
South African Rand, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ZAR | 444 | 28,964 | 31,085 | 2,121 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | ZAR | 277 | 19,000 | 19,390 | 390 | ||||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | ZAR | 506 | 34,956 | 34,926 | (30 | ) | |||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | ZAR | 6,254 | 426,046 | 431,602 | 5,556 | ||||||||||||
Expiring 07/26/2016 | Deutsche Bank AG | ZAR | 269 | 18,375 | 18,560 | 185 | ||||||||||||
Expiring 07/26/2016 | JPMorgan Chase | ZAR | 1,306 | 89,700 | 90,094 | 394 | ||||||||||||
South Korean Won, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | KRW | 18,580 | 16,000 | 16,303 | 303 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | KRW | 19,740 | 17,000 | 17,321 | 321 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | KRW | 9,525 | 8,000 | 8,357 | 357 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | KRW | 10,238 | 9,000 | 8,983 | (17 | ) |
See Notes to Financial Statements.
22 |
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Thai Baht, | ||||||||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | THB | 1,191 | $ | 34,000 | $ | 34,067 | $ | 67 | |||||||||
Expiring 05/18/2016 | Citigroup Global Markets | THB | 1,440 | 41,000 | 41,219 | 219 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | THB | 1,610 | 46,000 | 46,068 | 68 | ||||||||||||
Expiring 07/22/2016 | Bank of America | THB | 60,177 | 1,723,535 | 1,719,673 | (3,862 | ) | |||||||||||
Expiring 07/22/2016 | Barclays Capital Group | THB | 1,170 | 33,250 | 33,440 | 190 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | THB | 552 | 15,750 | 15,778 | 28 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | THB | 1,099 | 31,413 | 31,411 | (2 | ) | |||||||||||
Expiring 07/22/2016 | Morgan Stanley | THB | 944 | 27,006 | 26,982 | (24 | ) | |||||||||||
Turkish Lira, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 23 | 8,000 | 8,152 | 152 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 24 | 8,000 | 8,394 | 394 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 30 | 10,000 | 10,508 | 508 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 36 | 12,000 | 12,697 | 697 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 57 | 19,000 | 20,104 | 1,104 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 59 | 20,000 | 21,109 | 1,109 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TRY | 166 | 57,426 | 59,024 | 1,598 | ||||||||||||
Expiring 05/20/2016 | Barclays Capital Group | TRY | 108 | 35,875 | 38,410 | 2,535 | ||||||||||||
Expiring 05/20/2016 | Barclays Capital Group | TRY | 260 | 88,734 | 92,523 | 3,789 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 106 | 37,114 | 37,628 | 514 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 107 | 36,997 | 37,876 | 879 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 168 | 59,685 | 59,550 | (135 | ) | |||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 255 | 85,788 | 90,612 | 4,824 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 379 | 132,931 | 134,586 | 1,655 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 487 | 170,045 | 173,083 | 3,038 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 512 | 170,241 | 181,918 | 11,677 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 532 | 182,553 | 189,071 | 6,518 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 835 | 281,200 | 296,614 | 15,414 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 865 | 290,840 | 307,335 | 16,495 | ||||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 884 | 298,600 | 314,108 | 15,508 | ||||||||||||
Expiring 05/20/2016 | Deutsche Bank AG | TRY | 129 | 45,862 | 45,824 | (38 | ) | |||||||||||
Expiring 05/20/2016 | Goldman Sachs & Co. | TRY | 181 | 63,875 | 64,378 | 503 | ||||||||||||
Expiring 05/20/2016 | JPMorgan Chase | TRY | 112 | 37,187 | 39,948 | 2,761 | ||||||||||||
Expiring 05/20/2016 | JPMorgan Chase | TRY | 876 | 305,050 | 311,195 | 6,145 | ||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 22,868,997 | $ | 23,617,489 | $ | 748,492 | |||||||||||||
|
|
|
|
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 23 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Brazilian Real, | ||||||||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | BRL | 147 | $ | 39,950 | $ | 42,446 | $ | (2,496 | ) | ||||||||
Expiring 05/12/2016 | Citigroup Global Markets | BRL | 146 | 39,950 | 42,354 | (2,404 | ) | |||||||||||
Expiring 05/12/2016 | Credit Suisse First Boston Corp. | BRL | 3,153 | 780,905 | 913,145 | (132,240 | ) | |||||||||||
Expiring 05/12/2016 | Goldman Sachs & Co. | BRL | 865 | 239,344 | 250,418 | (11,074 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | BRL | 60 | 17,000 | 17,362 | (362 | ) | |||||||||||
Expiring 06/02/2016 | Citigroup Global Markets | BRL | 423 | 117,900 | 121,621 | (3,721 | ) | |||||||||||
Expiring 06/02/2016 | Goldman Sachs & Co. | BRL | 438 | 125,652 | 125,969 | (317 | ) | |||||||||||
British Pound, | ||||||||||||||||||
Expiring 07/14/2016 | Citigroup Global Markets | GBP | 317 | 451,329 | 462,929 | (11,600 | ) | |||||||||||
Chilean Peso, | ||||||||||||||||||
Expiring 05/12/2016 | Citigroup Global Markets | CLP | 201,183 | 293,612 | 304,166 | (10,554 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | CLP | 195,502 | 271,153 | 295,548 | (24,395 | ) | |||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | CLP | 94,443 | 135,471 | 142,774 | (7,303 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CLP | 17,441 | 26,000 | 26,353 | (353 | ) | |||||||||||
Chinese Renminbi, | ||||||||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 299 | 46,000 | 46,071 | (71 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 282 | 43,000 | 43,386 | (386 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 267 | 41,000 | 41,213 | (213 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 164 | 25,000 | 25,212 | (212 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 131 | 20,000 | 20,177 | (177 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 65 | 10,000 | 10,009 | (9 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | CNH | 52 | 8,000 | 8,076 | (76 | ) | |||||||||||
Colombian Peso, | ||||||||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 640,308 | 196,896 | 224,316 | (27,420 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 622,706 | 192,312 | 218,150 | (25,838 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 306,193 | 95,150 | 107,267 | (12,117 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | COP | 288,582 | 86,350 | 101,098 | (14,748 | ) | |||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 298,616 | 91,600 | 104,613 | (13,013 | ) | |||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | COP | 288,841 | 86,350 | 101,188 | (14,838 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | COP | 59,527 | 19,000 | 20,838 | (1,838 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | COP | 39,936 | 13,000 | 13,980 | (980 | ) | |||||||||||
Expiring 05/27/2016 | Citigroup Global Markets | COP | 336,501 | 113,300 | 117,627 | (4,327 | ) | |||||||||||
Expiring 08/05/2016 | Goldman Sachs & Co. | COP | 118,264 | 40,837 | 40,854 | (17 | ) | |||||||||||
Czech Koruna, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 781 | 32,000 | 33,096 | (1,096 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 620 | 26,000 | 26,242 | (242 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 595 | 25,000 | 25,217 | (217 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 428 | 18,000 | 18,113 | (113 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 294 | 12,000 | 12,467 | (467 | ) |
See Notes to Financial Statements.
24 |
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Czech Koruna (cont’d.) | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 194 | $ | 8,000 | $ | 8,214 | $ | (214 | ) | ||||||||
Expiring 05/18/2016 | Barclays Capital Group | CZK | 192 | 8,000 | 8,114 | (114 | ) | |||||||||||
Euro, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 194 | 221,000 | 222,222 | (1,222 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 123 | 137,000 | 140,398 | (3,398 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 70 | 78,000 | 80,545 | (2,545 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 63 | 69,000 | 72,149 | (3,149 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 32 | 36,000 | 36,589 | (589 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 26 | 30,000 | 30,191 | (191 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 18 | 20,000 | 20,456 | (456 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 14 | 16,000 | 16,095 | (95 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | EUR | 12 | 14,000 | 14,264 | (264 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | EUR | 112 | 128,000 | 127,978 | 22 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | EUR | 14 | 15,000 | 15,778 | (778 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | EUR | 9 | �� | 10,000 | 10,238 | (238 | ) | ||||||||||
Hungarian Forint, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | HUF | 4,498 | 16,000 | 16,507 | (507 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | HUF | 3,846 | 14,000 | 14,114 | (114 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | HUF | 3,732 | 13,000 | 13,694 | (694 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | HUF | 2,811 | 10,000 | 10,313 | (313 | ) | |||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | HUF | 5,990 | 21,989 | 21,967 | 22 | ||||||||||||
Indian Rupee, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | INR | 736 | 11,000 | 11,051 | (51 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | INR | 734 | 11,000 | 11,029 | (29 | ) | |||||||||||
Expiring 05/23/2016 | Credit Suisse First Boston Corp. | INR | 861 | 12,953 | 12,927 | 26 | ||||||||||||
Indonesia Rupiah, | ||||||||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | IDR | 1,414,175 | 106,250 | 106,942 | (692 | ) | |||||||||||
Expiring 06/06/2016 | Barclays Capital Group | IDR | 1,037,382 | 77,660 | 78,197 | (537 | ) | |||||||||||
Expiring 06/06/2016 | Hong Kong & Shanghai Bank | IDR | 9,472,377 | 715,868 | 714,018 | 1,850 | ||||||||||||
Expiring 06/06/2016 | JPMorgan Chase | IDR | 499,811 | 37,696 | 37,675 | 21 | ||||||||||||
Israeli Shekel, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ILS | 321 | 84,662 | 85,920 | (1,258 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ILS | 55 | 14,000 | 14,626 | (626 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | ILS | 31 | 7,999 | 8,372 | (373 | ) | |||||||||||
Japanese Yen, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 17,939 | 161,000 | 168,668 | (7,668 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 16,671 | 150,000 | 156,748 | (6,748 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 8,307 | 74,000 | 78,103 | (4,103 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 6,574 | 59,000 | 61,812 | (2,812 | ) |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 25 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Japanese Yen (cont’d.) | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 6,564 | $ | 60,000 | $ | 61,720 | $ | (1,720 | ) | ||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 3,445 | 31,000 | 32,387 | (1,387 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 3,437 | 31,000 | 32,319 | (1,319 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 2,042 | 18,000 | 19,203 | (1,203 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 1,739 | 16,000 | 16,346 | (346 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | JPY | 893 | 8,000 | 8,397 | (397 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | JPY | 1,802 | 16,000 | 16,942 | (942 | ) | |||||||||||
Malaysian Ringgit, | ||||||||||||||||||
Expiring 05/12/2016 | Bank of America | MYR | 613 | 147,185 | 156,877 | (9,692 | ) | |||||||||||
Expiring 05/12/2016 | Credit Suisse First Boston Corp. | MYR | 119 | 30,625 | 30,359 | 266 | ||||||||||||
Expiring 05/12/2016 | Goldman Sachs & Co. | MYR | 178 | 46,114 | 45,601 | 513 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MYR | 91 | 23,000 | 23,141 | (141 | ) | |||||||||||
Expiring 08/29/2016 | Citigroup Global Markets | MYR | 2,429 | 559,625 | 616,411 | (56,786 | ) | |||||||||||
Mexican Peso, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | MXN | 393 | 22,000 | 22,802 | (802 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | MXN | 429 | 25,000 | 24,881 | 119 | ||||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | MXN | 3,382 | 194,761 | 194,953 | (192 | ) | |||||||||||
Expiring 07/22/2016 | JPMorgan Chase | MXN | 1,242 | 71,702 | 71,584 | 118 | ||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TWD | 1,421 | 44,000 | 44,072 | (72 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TWD | 1,135 | 35,000 | 35,209 | (209 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TWD | 323 | 10,000 | 10,029 | (29 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 2,584 | 80,000 | 80,116 | (116 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 2,099 | 65,000 | 65,078 | (78 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,777 | 55,000 | 55,093 | (93 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | TWD | 1,417 | 44,000 | 43,942 | 58 | ||||||||||||
Expiring 12/15/2016 | Barclays Capital Group | TWD | 34,702 | 1,030,352 | 1,079,928 | (49,576 | ) | |||||||||||
New Zealand Dollar, | ||||||||||||||||||
Expiring 07/14/2016 | Citigroup Global Markets | NZD | 445 | 305,850 | 309,483 | (3,633 | ) | |||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 245 | 73,500 | 74,578 | (1,078 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 110 | 32,376 | 33,372 | (996 | ) | |||||||||||
Expiring 05/13/2016 | Barclays Capital Group | PEN | 69 | 19,250 | 20,868 | (1,618 | ) | |||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 1,325 | 373,426 | 402,798 | (29,372 | ) | |||||||||||
Expiring 05/13/2016 | Citigroup Global Markets | PEN | 197 | 58,000 | 59,944 | (1,944 | ) | |||||||||||
Expiring 05/13/2016 | JPMorgan Chase | PEN | 98 | 27,562 | 29,868 | (2,306 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 333 | 98,828 | 101,217 | (2,389 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 48 | 14,000 | 14,570 | (570 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PEN | 25 | 7,000 | 7,540 | (540 | ) | |||||||||||
Expiring 09/08/2016 | Credit Suisse First Boston Corp. | PEN | 488 | 137,706 | 146,356 | (8,650 | ) |
See Notes to Financial Statements.
26 |
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
Philippine Peso, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PHP | 370 | $ | 8,000 | $ | 7,878 | $ | 122 | |||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 3,262 | 70,000 | 69,510 | 490 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 3,126 | 67,000 | 66,599 | 401 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 2,299 | 49,000 | 48,983 | 17 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 798 | 17,000 | 16,994 | 6 | ||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PHP | 557 | 11,999 | 11,865 | 134 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | PHP | 1,304 | 28,000 | 27,788 | 212 | ||||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | PHP | 786 | 17,000 | 16,752 | 248 | ||||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | PHP | 4,995 | 106,905 | 106,026 | 879 | ||||||||||||
Expiring 07/26/2016 | JPMorgan Chase | PHP | 5,130 | 109,698 | 108,884 | 814 | ||||||||||||
Polish Zloty, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PLN | 95 | 25,001 | 24,789 | 212 | ||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | PLN | 60 | 15,000 | 15,631 | (631 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | PLN | 117 | 30,000 | 30,618 | (618 | ) | |||||||||||
Expiring 05/18/2016 | Goldman Sachs & Co. | PLN | 162 | 42,881 | 42,394 | 487 | ||||||||||||
Expiring 07/22/2016 | Goldman Sachs & Co. | PLN | 587 | 150,741 | 153,442 | (2,701 | ) | |||||||||||
Romanian Leu, | ||||||||||||||||||
Expiring 07/22/2016 | Barclays Capital Group | RON | 1,973 | 501,315 | 504,657 | (3,342 | ) | |||||||||||
Expiring 07/22/2016 | Hong Kong & Shanghai Bank | RON | 308 | 77,685 | 78,663 | (978 | ) | |||||||||||
Russian Ruble, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | RUB | 729 | 11,000 | 11,194 | (194 | ) | |||||||||||
Expiring 07/20/2016 | Citigroup Global Markets | RUB | 11,846 | 174,100 | 178,950 | (4,850 | ) | |||||||||||
Expiring 07/20/2016 | Goldman Sachs & Co. | RUB | 3,318 | 50,261 | 50,127 | 134 | ||||||||||||
Singapore Dollar, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 55 | 41,000 | 41,231 | (231 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 23 | 17,000 | 17,019 | (19 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 22 | 16,000 | 16,390 | (390 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 18 | 13,000 | 13,067 | (67 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 17 | 12,000 | 12,316 | (316 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | SGD | 11 | 8,000 | 8,017 | (17 | ) | |||||||||||
Expiring 07/13/2016 | Bank of America | SGD | 258 | 188,783 | 191,239 | (2,456 | ) | |||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | SGD | 408 | 301,172 | 302,738 | (1,566 | ) | |||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | SGD | 169 | 124,999 | 125,282 | (283 | ) | |||||||||||
Expiring 07/13/2016 | Citigroup Global Markets | SGD | 106 | 78,672 | 78,991 | (319 | ) | |||||||||||
South African Rand, | ||||||||||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | ZAR | 1,178 | 81,674 | 81,297 | 377 | ||||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | ZAR | 1,115 | 77,131 | 76,965 | 166 | ||||||||||||
Expiring 07/26/2016 | Citigroup Global Markets | ZAR | 368 | 25,433 | 25,366 | 67 | ||||||||||||
Expiring 07/26/2016 | Goldman Sachs & Co. | ZAR | 7,512 | 513,687 | 518,369 | (4,682 | ) | |||||||||||
Expiring 07/26/2016 | JPMorgan Chase | ZAR | 1,324 | 90,413 | 91,360 | (947 | ) |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 27 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Forward foreign currency exchange contracts outstanding at April 30, 2016 (continued):
Sale Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation (Depreciation) | |||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||
South Korean Won, | ||||||||||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | KRW | 43,435 | $ | 38,000 | $ | 38,111 | $ | (111 | ) | ||||||||
Expiring 05/18/2016 | Citigroup Global Markets | KRW | 40,180 | 35,000 | 35,255 | (255 | ) | |||||||||||
Thai Baht, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | THB | 316 | 9,000 | 9,035 | (35 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | THB | 1,176 | 33,000 | 33,639 | (639 | ) | |||||||||||
Expiring 05/18/2016 | Citigroup Global Markets | THB | 1,169 | 33,000 | 33,452 | (452 | ) | |||||||||||
Expiring 05/18/2016 | JPMorgan Chase | THB | 9,718 | 276,799 | 278,099 | (1,300 | ) | |||||||||||
Expiring 07/22/2016 | Citigroup Global Markets | THB | 10,341 | 294,283 | 295,516 | (1,233 | ) | |||||||||||
Turkish Lira, | ||||||||||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 89 | 31,000 | 31,711 | (711 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 74 | 26,000 | 26,347 | (347 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 69 | 24,000 | 24,659 | (659 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 66 | 23,000 | 23,502 | (502 | ) | |||||||||||
Expiring 05/18/2016 | Barclays Capital Group | TRY | 66 | 23,000 | 23,390 | (390 | ) | |||||||||||
Expiring 05/20/2016 | Bank of America | TRY | 686 | 242,137 | 243,826 | (1,689 | ) | |||||||||||
Expiring 05/20/2016 | Barclays Capital Group | TRY | 272 | 89,857 | 96,544 | (6,687 | ) | |||||||||||
Expiring 05/20/2016 | BNP Paribas | TRY | 351 | 122,174 | 124,890 | (2,716 | ) | |||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 521 | 171,300 | 185,165 | (13,865 | ) | |||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 457 | 154,769 | 162,489 | (7,720 | ) | |||||||||||
Expiring 05/20/2016 | Citigroup Global Markets | TRY | 165 | 57,692 | 58,735 | (1,043 | ) | |||||||||||
|
|
|
|
|
| |||||||||||||
$ | 14,813,561 | $ | 15,413,949 | (600,388 | ) | |||||||||||||
|
|
|
|
|
| |||||||||||||
$ | 148,104 | |||||||||||||||||
|
|
Cross currency exchange contracts outstanding at April 30, 2016:
Settlement | Type | Notional Amount (000)# | In Exchange For (000) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||
OTC cross currency exchange contracts: |
| |||||||||||||||||||
05/20/2016 | Buy | TRY | 847 | EUR | 258 | $ | 5,142 | Citigroup Global Markets | ||||||||||||
07/14/2016 | Buy | AUD | 396 | NZD | 442 | (7,207 | ) | Barclays Capital Group | ||||||||||||
07/14/2016 | Buy | CAD | 194 | GBP | 107 | (1,016 | ) | Citigroup Global Markets | ||||||||||||
07/22/2016 | Buy | PLN | 729 | EUR | 170 | (3,988 | ) | Citigroup Global Markets | ||||||||||||
07/22/2016 | Buy | PLN | 738 | EUR | 168 | 373 | Citigroup Global Markets | |||||||||||||
07/22/2016 | Buy | PLN | 73 | EUR | 17 | 32 | Deutsche Bank AG | |||||||||||||
07/27/2016 | Buy | GBP | 210 | CAD | 384 | 550 | JPMorgan Chase | |||||||||||||
|
| |||||||||||||||||||
$ | (6,114 | ) | ||||||||||||||||||
|
|
See Notes to Financial Statements.
28 |
Interest rate swap agreements outstanding at April 30, 2016:
Notional | Termination Date | Fixed Rate | Floating | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||||||
| OTC swap agreements: |
| ||||||||||||||||||||||||
MXN | 4,000 | 10/28/16 | 3.840% | 28 Day Mexican Interbank Rate(1) | $ | (430 | ) | $ | (77 | ) | $ | (353 | ) | Morgan Stanley | ||||||||||||
THB | 9,000 | 02/28/26 | 2.300% | 6 Month Thailand Fixing Rate(1) | 1,260 | — | 1,260 | JPMorgan Chase | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||
$ | 830 | $ | (77 | ) | $ | 907 | ||||||||||||||||||||
|
|
|
|
|
|
Notional | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at April 30, 2016 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
| Centrally cleared swap agreements: |
| ||||||||||||||||||||||
MXN | 4,500 | 02/16/21 | 5.400% | 28 Day Mexican Interbank Rate(1) | $ | (2 | ) | $ | 1,203 | $ | 1,205 | |||||||||||||
MXN | 3,300 | 02/21/22 | 6.620% | 28 Day Mexican Interbank Rate(1) | 1,325 | 11,026 | 9,701 | |||||||||||||||||
MXN | 20,650 | 06/04/25 | 6.470% | 28 Day Mexican Interbank Rate(1) | (1,386 | ) | 42,341 | 43,727 | ||||||||||||||||
MXN | 3,400 | 01/05/26 | 6.260% | 28 Day Mexican Interbank Rate(2) | (103 | ) | (3,029 | ) | (2,926 | ) | ||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
$ | (166 | ) | $ | 51,541 | $ | 51,707 | ||||||||||||||||||
|
|
|
|
|
|
Cash of $170,000 has been segregated with Citigroup Global Markets to cover requirements for open centrally cleared interest rate swap contracts at April 30, 2016.
(1) | The Series pays the floating rate and receives the fixed rate. |
(2) | The Series pays the fixed rate and receives the floating rate. |
Various inputs are used in determining the value of the Series’ investments. These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices generally in active markets for identical securities.
Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.
Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 29 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The following is a summary of the inputs used as of April 30, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Foreign Bonds | ||||||||||||
Argentina | $ | — | $ | 946,043 | $ | — | ||||||
Brazil | — | 3,625,545 | — | |||||||||
Colombia | — | 1,045,659 | — | |||||||||
Czech Republic | — | 292,441 | — | |||||||||
Dominican Republic | — | 219,000 | — | |||||||||
Hungary | — | 1,446,511 | — | |||||||||
Indonesia | — | 4,024,808 | — | |||||||||
Kazakhstan | — | 136,875 | — | |||||||||
Malaysia | — | 1,499,664 | — | |||||||||
Mexico | — | 2,678,205 | — | |||||||||
Peru | — | 256,479 | — | |||||||||
Philippines | — | 358,904 | — | |||||||||
Poland | — | 2,611,363 | — | |||||||||
Romania | — | 1,443,330 | — | |||||||||
Russia | — | 2,135,284 | — | |||||||||
Singapore | — | 74,454 | — | |||||||||
South Africa | — | 3,106,047 | — | |||||||||
South Korea | — | 99,302 | — | |||||||||
Thailand | — | 1,248,502 | — | |||||||||
Turkey | — | 2,122,675 | — | |||||||||
Affiliated Mutual Fund | 1,523,707 | — | — | |||||||||
Other Financial Instruments* | ||||||||||||
OTC Forward Foreign Currency Exchange Contracts | — | 148,104 | — | |||||||||
OTC Cross Currency Exchange Contracts | — | (6,114 | ) | — | ||||||||
OTC Interest Rate Swap Agreements | 830 | |||||||||||
Centrally Cleared Interest Rate Swap Agreements | — | 51,707 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,523,707 | $ | 29,565,618 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation/depreciation on the instrument, and OTC swap contracts which are recorded at fair value. |
See Notes to Financial Statements.
30 |
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2016 were as follows:
Foreign Government Obligations | 82.5 | % | ||
Foreign Agencies | 6.7 | |||
Affiliated Mutual Fund | 4.8 | |||
Foreign Corporations | 2.7 | |||
Foreign Government Bonds | 0.7 | |||
|
| |||
97.4 | ||||
Other assets in excess of liabilities | 2.6 | |||
|
| |||
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.
Fair values of derivative instruments as of April 30, 2016 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted | Asset Derivatives | Liability Derivatives | ||||||||||
Balance | Fair Value | Balance Sheet Location | Fair Value | |||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | $ | 775,110 | Unrealized depreciation on OTC forward foreign currency exchange contracts | $ | 627,006 | ||||||
Foreign exchange contracts | Unrealized appreciation on OTC cross currency exchange contracts | 6,097 | Unrealized depreciation on OTC cross currency exchange contracts | 12,211 | ||||||||
Interest rate contracts | Due from/to broker—variation margin swaps | 54,633 | * | Due from/to broker—variation margin swaps | 2,926 | * | ||||||
Interest rate contracts | — | — | Premium received for OTC swap agreements | 77 | ||||||||
Interest rate contracts | Unrealized appreciation on OTC swap agreements | 1,260 | Unrealized depreciation on OTC swap agreements | 353 | ||||||||
|
|
|
| |||||||||
Total | $ | 837,100 | $ | 642,573 | ||||||||
|
|
|
|
* | Includes cumulative appreciation/depreciation as reported in the schedule of open futures contracts and exchange-traded swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Asset and Liabilities. |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 31 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The effects of derivative instruments on the Statement of Operations for the period ended April 30, 2016 are as follows:
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||||||||
Derivatives not accounted for as hedging | Forward and Cross Currency Contracts* | Swaps | Total | |||||||||
Foreign exchange contracts | $ | (355,182 | ) | $ | — | $ | (355,182 | ) | ||||
Interest rate contracts | — | 19,229 | 19,229 | |||||||||
|
|
|
|
|
| |||||||
$ | (355,182 | ) | $ | 19,229 | $ | (335,953 | ) | |||||
|
|
|
|
|
|
* | 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 | Forward and Cross Currency Contracts* | Swaps | Total | |||||||||
Foreign exchange contracts | $ | 212,526 | $ | — | $ | 212,526 | ||||||
Interest rate contracts | — | 19,090 | 19,090 | |||||||||
|
|
|
|
|
| |||||||
$ | 212,526 | $ | 19,090 | $ | 231,616 | |||||||
|
|
|
|
|
|
* | Included in net change in unrealized appreciation (depreciation) on foreign currencies in the Statement of Operations. |
For the period ended April 30, 2016, the Series’ average volume of derivative activities are as follows:
Forward Foreign Currency | Forward Foreign Currency Exchange Contracts— Sold(1) | Cross Currency Exchange Contracts(2) | Interest Rate Swap Agreements(3) | |||||||||||||||
$ | 20,424,609 | $ | 17,956,069 | $ | 549,202 | $ | 1,960 |
(1) | Value at Settle Date. |
(2) | Value at Trade Date. |
(3) | Notional Amount in USD (000). |
See Notes to Financial Statements.
32 |
Offsetting of 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 | Net Amount | ||||||||||||
Bank of America | $ | 68,490 | $ | (17,699 | ) | $ | — | $ | 50,791 | |||||||
Barclays Capital Group | 127,094 | (127,094 | ) | — | — | |||||||||||
BNP Paribas | — | — | — | — | ||||||||||||
Citigroup Global Markets | 499,220 | (218,386 | ) | — | 280,834 | |||||||||||
Credit Suisse First Boston Corp. | 6,298 | (6,298 | ) | — | — | |||||||||||
Deutsche Bank AG | 217 | (54 | ) | — | 163 | |||||||||||
Goldman Sachs & Co. | 48,882 | (18,791 | ) | — | 30,091 | |||||||||||
Hong Kong & Shanghai Bank | 1,850 | (1,055 | ) | — | 795 | |||||||||||
JPMorgan Chase | 20,590 | (6,905 | ) | — | 13,685 | |||||||||||
Morgan Stanley | 34 | (34 | ) | — | — | |||||||||||
Toronto Dominion | 9,792 | — | — | 9,792 | ||||||||||||
|
| |||||||||||||||
$ | 782,467 | |||||||||||||||
|
| |||||||||||||||
Counterparty | Gross Amounts of Recognized Liabilities(2) | Gross Amounts Available for Offset | Collateral Pledged | Net Amount | ||||||||||||
Bank of America | $ | (17,699 | ) | $ | 17,699 | $ | — | $ | — | |||||||
Barclays Capital Group | (232,697 | ) | 127,094 | — | (105,603 | ) | ||||||||||
BNP Paribas | (2,716 | ) | — | — | (2,716 | ) | ||||||||||
Citigroup Global Markets | (218,386 | ) | 218,386 | — | — | |||||||||||
Credit Suisse First Boston Corp. | (140,890 | ) | 6,298 | — | (134,592 | ) | ||||||||||
Deutsche Bank AG | (54 | ) | 54 | — | — | |||||||||||
Goldman Sachs & Co. | (18,791 | ) | 18,791 | — | — | |||||||||||
Hong Kong & Shanghai Bank | (1,055 | ) | 1,055 | — | — | |||||||||||
JPMorgan Chase | (6,905 | ) | 6,905 | — | — | |||||||||||
Morgan Stanley | (454 | ) | 34 | — | (420 | ) | ||||||||||
Toronto Dominion | — | — | — | — | ||||||||||||
|
| |||||||||||||||
$ | (639,647 | ) | ||||||||||||||
|
|
(1) | Includes unrealized appreciation on swaps and forwards and premiums paid on swap agreements. |
(2) | Includes unrealized depreciation on swaps and forwards and premiums received on swap agreements. |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 33 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2016
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $31,110,391) | $ | 29,371,091 | ||
Affiliated investments (cost $1,523,707) | 1,523,707 | |||
Cash | 1,445 | |||
Foreign currency, at value (cost $201,697) | 214,011 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 775,110 | |||
Dividends and interest receivable | 565,172 | |||
Receivable for investments sold | 312,676 | |||
Deposit with Broker | 170,000 | |||
Receivable for Series shares sold | 110,040 | |||
Tax reclaim receivable | 17,937 | |||
Unrealized appreciation on OTC cross currency exchange contracts | 6,097 | |||
Due from Manager | 5,784 | |||
Unrealized appreciation on OTC swap agreements | 1,260 | |||
Due from broker—variation margin swaps | 774 | |||
Prepaid expenses | 206 | |||
|
| |||
Total Assets | 33,075,310 | |||
|
| |||
Liabilities | ||||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 627,006 | |||
Payable for investments purchased | 603,510 | |||
Accrued expenses and other liabilities | 72,576 | |||
Foreign capital gains tax liability | 30,255 | |||
Unrealized depreciation on OTC cross currency exchange contracts | 12,211 | |||
Payable for Series shares reacquired | 9,860 | |||
Dividends payable | 2,904 | |||
Distribution fee payable | 1,263 | |||
Affiliated transfer agent fee payable | 613 | |||
Unrealized depreciation on OTC swap agreements | 353 | |||
Premium received for OTC swap agreements | 77 | |||
|
| |||
Total Liabilities | 1,360,628 | |||
|
| |||
Net Assets | $ | 31,714,682 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 47,945 | ||
Paid-in capital in excess of par | 40,939,235 | |||
|
| |||
40,987,180 | ||||
Distributions in excess of net investment income | (176,972 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (7,550,808 | ) | ||
Net unrealized depreciation on investments and foreign currencies | (1,544,718 | ) | ||
|
| |||
Net assets, April 30, 2016 | $ | 31,714,682 | ||
|
|
See Notes to Financial Statements.
34 |
Class A | ||||
Net asset value and redemption price per share ($3,415,219 ÷ 520,518 shares of common stock issued and outstanding) | $ | 6.56 | ||
Maximum sales charge (4.50% of offering price) | 0.31 | |||
|
| |||
Maximum offering price to public | $ | 6.87 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share ($760,407 ÷ 115,360 shares of common stock issued and outstanding) | $ | 6.59 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share ($915 ÷ 138.2 shares of common stock issued and outstanding) | $ | 6.62 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share ($27,538,141 ÷ 4,158,526 shares of common stock issued and outstanding) | $ | 6.62 | ||
|
|
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 35 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Income | ||||
Income | ||||
Interest income (net of foreign withholding taxes of $27,137) | $ | 890,010 | ||
Affiliated dividend income | 1,929 | |||
|
| |||
Total income | 891,939 | |||
|
| |||
Expenses | ||||
Management fee | 111,908 | |||
Distribution fee—Class A | 3,809 | |||
Distribution fee—Class C | 3,434 | |||
Custodian and accounting fees | 80,000 | |||
Registration fees | 32,000 | |||
Audit fee | 31,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $1,900) | 14,000 | |||
Shareholders’ reports | 13,000 | |||
Legal fees and expenses | 9,000 | |||
Directors’ fees | 6,000 | |||
Miscellaneous | 7,954 | |||
|
| |||
Total expenses | 312,105 | |||
Less: Expense reimbursement | (157,995 | ) | ||
|
| |||
Net expenses | 154,110 | |||
|
| |||
Net investment income | 737,829 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (4,522,263 | ) | ||
Swap agreement transactions | 19,229 | |||
Foreign currency transactions | (370,531 | ) | ||
|
| |||
(4,873,565 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (net of change in foreign capital gains taxes $(30,155)) | 6,193,131 | |||
Swap agreements | 19,090 | |||
Foreign currencies | 244,422 | |||
|
| |||
6,456,643 | ||||
|
| |||
Net gain on investment and foreign currency transactions | 1,583,078 | |||
|
| |||
Net Increase In Net Assets Resulting From Operations | $ | 2,320,907 | ||
|
|
See Notes to Financial Statements.
36 |
Statement of Changes in Net Assets (unaudited)
Six Months April 30, 2016 | Year Ended October 31, 2015 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 737,829 | $ | 1,694,341 | ||||
Net realized loss on investment and foreign currency transactions | (4,873,565 | ) | (3,023,649 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 6,456,643 | (4,322,521 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 2,320,907 | (5,651,829 | ) | |||||
|
|
|
| |||||
Dividends and Distributions (Note 1) | ||||||||
Dividends from net investment income* | ||||||||
Class A | (87,236 | ) | (45,844 | ) | ||||
Class C | (17,239 | ) | (7,298 | ) | ||||
Class Q | (25 | ) | (10 | ) | ||||
Class Z | (722,132 | ) | (285,001 | ) | ||||
|
|
|
| |||||
(826,632 | ) | (338,153 | ) | |||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (210,631 | ) | |||||
Class C | — | (33,532 | ) | |||||
Class Q | — | (47 | ) | |||||
Class Z | — | (1,309,420 | ) | |||||
|
|
|
| |||||
— | (1,553,630 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 2,052,582 | 6,141,515 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 809,469 | 1,809,657 | ||||||
Cost of shares reacquired | (1,372,021 | ) | (7,173,758 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 1,490,030 | 777,414 | ||||||
|
|
|
| |||||
Total increase (decrease) | 2,984,305 | (6,766,198 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 28,730,377 | 35,496,575 | ||||||
|
|
|
| |||||
End of period | $ | 31,714,682 | $ | 28,730,377 | ||||
|
|
|
|
* | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
See Notes to Financial Statements.
Prudential Emerging Markets Debt Local Currency Fund | 37 |
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 Fund 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 (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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
38 |
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.
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. The models generate an evaluated adjustment factor for each security, which can be applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price to the extent that the valuation meets the established confidence level for each security. Such confidence level is a measure of the probability of a relationship between a given equity security and the factors used in the models. If the confidence level is not met or the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
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 OTC 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
OTC derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads,
Prudential Emerging Markets Debt Local Currency Fund | 39 |
Notes to Financial Statements (unaudited) (continued)
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 generally 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.
40 |
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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Series does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gain (loss) on foreign currency transactions.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from holdings of foreign currencies, forward currency contracts, disposition of foreign currencies, currency gains (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 (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 their obligations may be affected by the economic or political developments in a specific industry, region or country. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political or economic instability, or the level of governmental supervision and regulation of foreign securities markets.
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. 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 (loss) is included in net unrealized appreciation or
Prudential Emerging Markets Debt Local Currency Fund | 41 |
Notes to Financial Statements (unaudited) (continued)
depreciation on foreign currencies. Gain (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 (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 may either purchase or write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates or foreign currency exchange rates, with respect to securities which the Series currently owns or intends to purchase. The Series may also use options to gain additional market exposure. The Series’ principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the 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 (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Series has realized a gain (loss). The difference between the premium and the amount received or paid at the closing of a purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on options written transactions. 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. The Series, as purchaser of an OTC option, also bears 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.
42 |
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 OTC market and may be executed either directly with counterparty (“OTC-traded”) or through a central clearing facility, such as a registered commodities exchange. 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. Centrally cleared 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 (losses) upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Portfolio of Investments.
Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount for a specified period. The Series is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. The Series used interest rate swaps to maintain its ability to generate steady cash flow by receiving a stream of fixed-rate payments and to increase exposure to prevailing market rates by receiving floating rate payments. The Series’ maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life.
Master Netting Arrangements: The Series is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of 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. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.
The Series is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the 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
Prudential Emerging Markets Debt Local Currency Fund | 43 |
Notes to Financial Statements (unaudited) (continued)
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.
In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
As of April 30, 2016, 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 and swaps 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 (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-date. Interest income, including amortization of premium and accretion of discount on debt securities, as
44 |
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 (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 from net investment income daily and payment is made monthly. Distributions from net realized capital and currency gains, if any, are paid annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income (loss), accumulated net realized gain (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 subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Fixed Income (“PFI”), which is a business unit of PGIM, Inc. The subadvisory agreement provides that PFI will furnish investment advisory services in connection with the management of the Series. In connection therewith, PFI is obligated to keep certain books and records of the Series. PI pays for the services of PFI, 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. Prior to January 4, 2016, PGIM, Inc. was known as Prudential Investment Management, Inc. (“PIM”).
Effective October 1, 2015, the management fee paid to PI is accrued daily and payable monthly at an annual rate of 0.80% on average daily net assets up to and including $1 billion; 0.78% on the next $2 billion of average daily net assets; 0.76% on the next
Prudential Emerging Markets Debt Local Currency Fund | 45 |
Notes to Financial Statements (unaudited) (continued)
$2 billion of average daily net assets; 0.75% on the next $5 billion of average daily net assets; and 0.74% on average daily net assets exceeding $10 billion. Prior to October 1, 2015, the management fee paid to PI was 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, 2016, the expense reimbursement exceeded the effective management fee.
PI has contractually agreed through February 28, 2017 to limit net annual Series operating expenses (excluding distribution and service (12b-1) fees, extraordinary and certain other expenses such as taxes, interest and brokerage commissions) to each class of shares to 1.05% of the Series’ average daily net assets.
The Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) who acts as the distributor of the Class A, Class C, Class Q and Class Z shares. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C, pursuant to plans of distribution (the “Class A and C Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Q and Z shares of the Series.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .25% and 1% of the average daily net assets of the Class A and C shares, respectively. 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 contractual 12b-1 fee waiver of .05% was terminated.
PIMS has advised the Series that it received $16,330 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2016. 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, 2016, it received $161 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PI, PGIM, Inc. 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
46 |
and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
The Series invests in the Prudential Core Ultra Short Bond Fund, (formerly known as 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
The cost of purchases and proceeds from sales of portfolio securities, other than short-term investments and U.S. Government securities, for the six months ended April 30, 2016, were $29,783,593 and $29,192,793, respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized depreciation as of April 30, 2016 were as follows:
Tax Basis | $ | 34,769,675 | ||
|
| |||
Appreciation | 1,025,577 | |||
Depreciation | (4,900,454 | ) | ||
|
| |||
Net Unrealized Depreciation | $ | (3,874,877 | ) | |
|
|
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, 2015 of approximately $597,000 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.
Prudential Emerging Markets Debt Local Currency Fund | 47 |
Notes to Financial Statements (unaudited) (continued)
Note 6. Capital
The Series offers Class A, Class C, Class Q and Class Z shares. Class A shares are sold with a front-end sales charge of up to 4.50%. 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, 2016, no such exchanges were made.
As of April 30, 2016, Prudential, through its affiliates, owned 138 Class Q shares and 3,260,395 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, 2016: | ||||||||
Shares sold | 87,330 | $ | 538,567 | |||||
Shares issued in reinvestment of dividends and distributions | 11,758 | 71,969 | ||||||
Shares reacquired | (92,487 | ) | (560,179 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 6,601 | $ | 50,357 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 185,886 | $ | 1,291,306 | |||||
Shares issued in reinvestment of dividends and distributions | 25,398 | 175,719 | ||||||
Shares reacquired | (453,659 | ) | (3,168,756 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (242,375 | ) | (1,701,731 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (262 | ) | (1,855 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (242,637 | ) | $ | (1,703,586 | ) | |||
|
|
|
|
48 |
Class C | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 19,053 | $ | 118,661 | |||||
Shares issued in reinvestment of dividends and distributions | 2,587 | 15,900 | ||||||
Shares reacquired | (17,803 | ) | (107,783 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 3,837 | $ | 26,778 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 31,763 | $ | 222,194 | |||||
Shares issued in reinvestment of dividends and distributions | 5,619 | 38,860 | ||||||
Shares reacquired | (42,223 | ) | (299,638 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (4,841 | ) | $ | (38,584 | ) | |||
|
|
|
| |||||
Class Q | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares issued in reinvestment of dividends and distributions | 4 | $ | 24 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 4 | $ | 24 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares issued in reinvestment of dividends and distributions | 8 | $ | 57 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 8 | $ | 57 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 220,133 | $ | 1,395,354 | |||||
Shares issued in reinvestment of dividends and distributions | 116,766 | 721,576 | ||||||
Shares reacquired | (114,977 | ) | (704,059 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 221,922 | $ | 1,412,871 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 643,090 | $ | 4,628,015 | |||||
Shares issued in reinvestment of dividends and distributions | 230,457 | 1,595,021 | ||||||
Shares reacquired | (516,937 | ) | (3,705,364 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 356,610 | 2,517,672 | ||||||
Shares issued upon conversion from other shares class(es) | 261 | 1,855 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 356,871 | $ | 2,519,527 | |||||
|
|
|
|
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% of the unused portion of the SCA. Interest on any borrowings under the SCA is paid at contracted market rates. The Fund’s portion of the commitment fee for the unused amount is accrued daily and paid quarterly.
Prudential Emerging Markets Debt Local Currency Fund | 49 |
Notes to Financial Statements (unaudited) (continued)
The Series did not utilize the SCA during the six months ended April 30, 2016.
Note 8. New Accounting Pronouncements
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 Series 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. Management has evaluated the implications of ASU No. 2015-07 and has determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
50 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.24 | $7.92 | $8.67 | $9.61 | $9.36 | $10.00 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .16 | .37 | .49 | .47 | .42 | .32 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .33 | (1.64 | ) | (.71 | ) | (.76 | ) | .35 | (.62 | ) | ||||||||||||||||
Total from investment operations | .49 | (1.27 | ) | (.22 | ) | (.29 | ) | .77 | (.30 | ) | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.17 | ) | (.06 | ) | (.07 | ) | (.30 | ) | (.52 | ) | (.13 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.35 | ) | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.17 | ) | (.41 | ) | (.53 | ) | (.65 | ) | (.52 | ) | (.34 | ) | ||||||||||||||
Net asset value, end of period | $6.56 | $6.24 | $7.92 | $8.67 | $9.61 | $9.36 | ||||||||||||||||||||
Total Return(c): | 8.13% | (16.41)% | (2.47)% | (3.23)% | 8.53% | (3.14)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $3,415 | $3,208 | $5,991 | $10,862 | $5,985 | $2,620 | ||||||||||||||||||||
Average net assets (000) | $3,063 | $4,341 | $6,701 | $12,797 | $2,721 | $1,634 | ||||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.30% | (f) | 1.30% | (e) | 1.30% | 1.30% | 1.30% | 1.30% | (f) | |||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.45% | (f) | 2.39% | (e) | 2.13% | 1.78% | 2.09% | 2.81% | (f) | |||||||||||||||||
Net investment income | 5.14% | (f) | 5.32% | (e) | 5.99% | 5.07% | 4.73% | 4.85% | (f) | |||||||||||||||||
Portfolio turnover rate | 109% | (g) | 101% | 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, if any. 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.
Prudential Emerging Markets Debt Local Currency Fund | 51 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.28 | $7.97 | $8.72 | $9.65 | $9.41 | $10.00 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .13 | .32 | .43 | .40 | .37 | .31 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .33 | (1.65 | ) | (.71 | ) | (.75 | ) | .32 | (.57 | ) | ||||||||||||||||
Total from investment operations | .46 | (1.33 | ) | (.28 | ) | (.35 | ) | .69 | (.26 | ) | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.15 | ) | (.01 | ) | (.01 | ) | (.23 | ) | (.45 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.35 | ) | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.15 | ) | (.36 | ) | (.47 | ) | (.58 | ) | (.45 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $6.59 | $6.28 | $7.97 | $8.72 | $9.65 | $9.41 | ||||||||||||||||||||
Total Return(c): | 7.55% | (17.00)% | (3.21)% | (3.85)% | 7.55% | (2.72)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $760 | $701 | $927 | $1,469 | $1,025 | $398 | ||||||||||||||||||||
Average net assets (000) | $691 | $789 | $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% | 2.05% | (e) | ||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 3.19% | (e) | 3.11% | 2.82% | 2.47% | 2.78% | 3.52% | (e) | ||||||||||||||||||
Net investment income | 4.37% | (e) | 4.52% | 5.17% | 4.26% | 3.89% | 4.09% | (e) | ||||||||||||||||||
Portfolio turnover rate | 109% | (f) | 101% | 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, if any. 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.
52 |
Class Q Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.30 | $7.98 | $8.71 | $9.66 | $9.37 | $10.00 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .16 | .39 | .51 | .58 | .47 | .29 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .34 | (1.63 | ) | (.69 | ) | (.86 | ) | .37 | (.59 | ) | ||||||||||||||||
Total from investment operations | .50 | (1.24 | ) | (.18 | ) | (.28 | ) | .84 | (.30 | ) | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.18 | ) | (.09 | ) | (.09 | ) | (.32 | ) | (.55 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.35 | ) | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.18 | ) | (.44 | ) | (.55 | ) | (.67 | ) | (.55 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $6.62 | $6.30 | $7.98 | $8.71 | $9.66 | $9.37 | ||||||||||||||||||||
Total Return(c): | 8.19% | (15.94)% | (1.97)% | (3.06)% | 9.31% | (3.14)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $1 | $1 | $1 | $1 | $1 | $1 | ||||||||||||||||||||
Average net assets (000) | $1 | $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% | 1.05% | (e) | ||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.17% | (e) | 2.01% | 1.69% | 1.39% | 1.71% | 2.67% | (e) | ||||||||||||||||||
Net investment income | 5.34% | (e) | 5.60% | 6.17% | 6.22% | 5.06% | 4.98% | (e) | ||||||||||||||||||
Portfolio turnover rate | 109% | (f) | 101% | 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, if any. 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 | 53 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 30, 2011(a) through October 31, | ||||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012(b) | 2011 | |||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $6.31 | $7.98 | $8.72 | $9.66 | $9.37 | $10.00 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income | .16 | .38 | .51 | .49 | .47 | .29 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | .33 | (1.62 | ) | (.70 | ) | (.76 | ) | .36 | (.59 | ) | ||||||||||||||||
Total from investment operations | .49 | (1.24 | ) | (.19 | ) | (.27 | ) | .83 | (.30 | ) | ||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||
Dividends from net investment income | (.18 | ) | (.08 | ) | (.09 | ) | (.32 | ) | (.54 | ) | (.12 | ) | ||||||||||||||
Distributions from net realized gains | - | - | - | (.05 | ) | - | - | |||||||||||||||||||
Tax return of capital | - | (.35 | ) | (.46 | ) | (.30 | ) | - | (.21 | ) | ||||||||||||||||
Total dividends and distributions | (.18 | ) | (.43 | ) | (.55 | ) | (.67 | ) | (.54 | ) | (.33 | ) | ||||||||||||||
Net asset value, end of period | $6.62 | $6.31 | $7.98 | $8.72 | $9.66 | $9.37 | ||||||||||||||||||||
Total Return(c): | 8.03% | (15.90)% | (2.12)% | (2.98)% | 9.21% | (3.14)% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $27,538 | $24,821 | $28,578 | $31,330 | $33,559 | $26,532 | ||||||||||||||||||||
Average net assets (000) | $24,373 | $25,969 | $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% | 1.05% | (e) | ||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.18% | (e) | 2.11% | 1.82% | 1.49% | 1.81% | 2.72% | (e) | ||||||||||||||||||
Net investment income | 5.32% | (e) | 5.50% | 6.14% | 5.25% | 4.96% | 4.99% | (e) | ||||||||||||||||||
Portfolio turnover rate | 109% | (f) | 101% | 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, if any. 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.
54 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Prudential Fixed Income | 655 Broad Street Newark, NJ 07102 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 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 | ||
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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, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 0293031-00001-00
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential Jennison Emerging Markets Equity Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
| ![]() |
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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2016 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Letter from the President
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, 2016.
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
June 15, 2016
Prudential Jennison Emerging Markets Equity Fund | 3 |
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 4/30/16 | ||||||
Six Months (%) | One Year (%) | Since Inception (%) | ||||
Class A | –2.95 | –14.84 | –14.50 (9/16/14) | |||
Class C | –3.32 | –15.50 | –15.50 (9/16/14) | |||
Class Q | –2.83 | –14.71 | –14.16 (9/16/14) | |||
Class Z | –2.72 | –14.71 | –14.20 (9/16/14) | |||
MSCI Emerging Markets Index | –0.13 | –17.87 | –13.64 | |||
Lipper Emerging Markets Funds Average | –0.20 | –15.53 | –14.30 |
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||
One Year (%) | Since Inception (%) | |||
Class A | –17.66 | –12.59 (9/16/14) | ||
Class C | –14.29 | –9.94 (9/16/14) | ||
Class Q | –12.65 | –9.09 (9/16/14) | ||
Class Z | –12.65 | –9.12 (9/16/14) | ||
MSCI Emerging Markets Index | –12.03 | –9.64 | ||
Lipper Emerging Markets Funds Average | –11.58 | –10.58 |
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 | 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 (Lipper 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 | 5 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/16 (%) | ||||
Tencent Holdings Ltd., Internet Software & Services | 7.3 | |||
Alibaba Group Holding Ltd., ADR, Internet Software & Services | 5.0 | |||
Ctrip.com International Ltd., ADR, Internet & Catalog Retail | 4.5 | |||
Universal Robina Corp., Food Products | 3.6 | |||
MercadoLibre, Inc., Internet Software & Services | 3.4 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/16 (%) | ||||
Internet Software & Services | 21.3 | |||
Automobiles | 7.3 | |||
Internet & Catalog Retail | 7.2 | |||
Biotechnology | 7.1 | |||
Food Products | 5.4 |
Industry weightings reflect only long-term investments and are subject to change.
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Fees and Expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses
Prudential Jennison Emerging Markets Equity Fund | 7 |
Fees and Expenses (continued)
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, 2015 | Ending Account April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 970.50 | 1.45 | % | $ | 7.10 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.65 | 1.45 | % | $ | 7.27 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 966.80 | 2.20 | % | $ | 10.76 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.92 | 2.20 | % | $ | 11.02 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 971.70 | 1.20 | % | $ | 5.88 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.90 | 1.20 | % | $ | 6.02 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 972.80 | 1.20 | % | $ | 5.89 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.90 | 1.20 | % | $ | 6.02 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
The Fund’s annualized expense ratios for the six-month period ended April 30, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 4.20 | 1.45 | ||
C | 4.87 | 2.20 | ||
Q | 3.25 | 1.20 | ||
Z | 3.85 | 1.20 |
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.
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Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 98.2% | ||||||||
COMMON STOCKS 87.8% | ||||||||
Argentina 3.4% | ||||||||
MercadoLibre, Inc. | 2,701 | $ | 337,328 | |||||
Brazil 6.2% | ||||||||
BM&FBovespa SA - Bolsa de Valores Mercadorias e Futuros | 36,677 | 182,572 | ||||||
Cia de Saneamento Basico do Estado de Sao Paulo | 25,118 | 192,151 | ||||||
Raia Drogasil SA | 14,719 | 237,609 | ||||||
|
| |||||||
612,332 | ||||||||
China 29.2% | ||||||||
58.Com, Inc., ADR* | 6,034 | 329,758 | ||||||
Alibaba Group Holding Ltd., ADR* | 6,389 | 491,570 | ||||||
Baidu, Inc., ADR* | 1,172 | 227,720 | ||||||
China Biologic Products, Inc.* | 2,397 | 280,449 | ||||||
China Machinery Engineering Corp. (Class H Stock) | 176,000 | 119,574 | ||||||
Ctrip.com International Ltd., ADR* | 10,227 | 445,999 | ||||||
JD.com, Inc., ADR* | 10,510 | 268,635 | ||||||
Tencent Holdings Ltd. | 35,447 | 721,287 | ||||||
|
| |||||||
2,884,992 | ||||||||
Hong Kong 4.4% | ||||||||
Guotai Junan International Holdings Ltd. | 605,220 | 201,511 | ||||||
Sands China Ltd. | 65,672 | 233,969 | ||||||
|
| |||||||
435,480 | ||||||||
India 1.8% | ||||||||
HDFC Bank Ltd., ADR | 2,903 | 182,512 | ||||||
Indonesia 6.8% | ||||||||
Astra International Tbk PT | 518,201 | 262,964 | ||||||
Matahari Department Store Tbk PT | 188,392 | 270,128 | ||||||
Mitra Keluarga Karyasehat Tbk PT | 672,510 | 135,120 | ||||||
|
| |||||||
668,212 | ||||||||
Malaysia 2.0% | ||||||||
IHH Healthcare Bhd | 118,829 | 199,240 | ||||||
Mexico 4.4% | ||||||||
Alsea SAB de CV | 56,349 | 216,001 | ||||||
Grupo Aeroportuario Del Centro Norte SAB de CV | 37,157 | 215,452 | ||||||
|
| |||||||
431,453 |
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 9 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Philippines 5.2% | ||||||||
Ayala Land, Inc. | 213,910 | $ | 157,828 | |||||
Universal Robina Corp. | 79,713 | 353,975 | ||||||
|
| |||||||
511,803 | ||||||||
South Africa 2.3% | ||||||||
Aspen Pharmacare Holdings Ltd.* | 5,276 | 123,885 | ||||||
Mr. Price Group Ltd. | 7,856 | 99,402 | ||||||
|
| |||||||
223,287 | ||||||||
South Korea 9.1% | ||||||||
Amorepacific Corp. | 851 | 303,500 | ||||||
Celltrion, Inc.* | 1,900 | 167,168 | ||||||
Medy-Tox, Inc. | 671 | 248,045 | ||||||
Osstem Implant Co. Ltd.* | 2,886 | 180,709 | ||||||
|
| |||||||
899,422 | ||||||||
Taiwan 3.3% | ||||||||
Hota Industrial Manufacturing Co. Ltd. | 25,000 | 120,144 | ||||||
Largan Precision Co. Ltd. | 3,000 | 209,412 | ||||||
|
| |||||||
329,556 | ||||||||
Thailand 5.3% | ||||||||
Airports of Thailand PCL | 11,797 | 132,391 | ||||||
Bangkok Dusit Medical Services PCL | 272,797 | 185,696 | ||||||
CP ALL PCL | 159,216 | 208,535 | ||||||
|
| |||||||
526,622 | ||||||||
Turkey 4.4% | ||||||||
Tofas Turk Otomobil Fabrikasi A/S | 33,044 | 261,429 | ||||||
Ulker Biskuvi Sanayi A/S | 21,890 | 174,294 | ||||||
|
| |||||||
435,723 | ||||||||
TOTAL COMMON STOCKS | 8,677,962 | |||||||
|
| |||||||
Units | ||||||||
PARTICIPATORY NOTES† 10.4% | ||||||||
India | ||||||||
Ashok Leyland Ltd., expiring 10/29/17 144A(a) | 166,555 | 267,731 | ||||||
Asian Paints Ltd., expiring 05/31/18 144A(a) | 12,586 | 164,097 | ||||||
Dish TV India Ltd., expiring 08/04/16, RegS 144A*(a) | 78,923 | 107,504 | ||||||
Eicher Motors Ltd., expiring 08/27/18 144A(a) | 590 | 177,915 |
See Notes to Financial Statements.
10 |
Description | Units | Value (Note 1) | ||||||
PARTICIPATORY NOTES† (Continued) | ||||||||
India (cont’d.) | ||||||||
Lupin Ltd., expiring 10/29/17 144A(a) | 4,496 | $ | 108,763 | |||||
Maruti Suzuki India Ltd., expiring 12/8/20 144A(a) | 3,441 | 196,529 | ||||||
|
| |||||||
TOTAL PARTICIPATORY NOTES |
| 1,022,539 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 9,700,501 | ||||||
|
| |||||||
Shares | ||||||||
SHORT-TERM INVESTMENT 1.5% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - | 152,946 | 152,946 | ||||||
|
| |||||||
TOTAL INVESTMENTS 99.7% |
| 9,853,447 | ||||||
Other assets in excess of liabilities 0.3% |
| 25,323 | ||||||
|
| |||||||
NET ASSETS 100.0% |
| $ | 9,878,770 | |||||
|
|
The following abbreviations are used in the semiannual report:
OTC—Over-the-counter
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
L1—Level 1
L2—Level 2
† | Participatory notes represented 10.4% of net assets, of which the Series attributed 3.5% to Bank of America, 3.8% to Goldman Sachs & Co., and 3.1% to JPMorgan Chase as counterparties to the securities. |
* | 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 Ultra Short Bond Fund. |
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
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, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 337,328 | $ | — | $ | — | ||||||
Brazil | 612,332 | — | — | |||||||||
China | 2,044,131 | 840,861 | — | |||||||||
Hong Kong | — | 435,480 | — | |||||||||
India | 182,512 | — | — | |||||||||
Indonesia | — | 668,212 | — | |||||||||
Malaysia | 199,240 | — | — | |||||||||
Mexico | 431,453 | — | — | |||||||||
Philippines | — | 511,803 | — | |||||||||
South Africa | — | 223,287 | — | |||||||||
South Korea | — | 899,422 | — | |||||||||
Taiwan | — | 329,556 | — | |||||||||
Thailand | 340,926 | 185,696 | — | |||||||||
Turkey | — | 435,723 | — | |||||||||
Participatory Notes | ||||||||||||
India | — | 1,022,539 | — | |||||||||
Affiliated Mutual Fund | 152,946 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 4,300,868 | $ | 5,552,579 | $ | — | ||||||
|
|
|
|
|
|
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:
Investment in Securities | Amount Transferred | Level Transfer | Logic | |||||||||
Common Stocks | $ | 120,630 | L1 to L2 | Official Close to Model Price | ||||||||
Common Stocks | $ | 174,615 | L2 to L1 | Model Price to Official Close |
See Notes to Financial Statements.
12 |
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2016 were as follows:
Internet Software & Services | 21.3 | % | ||
Automobiles | 7.3 | |||
Internet & Catalog Retail | 7.2 | |||
Biotechnology | 7.1 | |||
Food Products | 5.4 | |||
Health Care Providers & Services | 5.3 | |||
Hotels, Restaurants & Leisure | 4.6 | |||
Food & Staples Retailing | 4.5 | |||
Machinery | 4.5 | |||
Transportation Infrastructure | 3.5 | |||
Personal Products | 3.1 | |||
Multiline Retail | 2.7 | |||
Pharmaceuticals | 2.4 | |||
Electronic Equipment, Instruments & Components | 2.1 | |||
Capital Markets | 2.0 | |||
Water Utilities | 1.9 | % | ||
Diversified Financial Services | 1.9 | |||
Banks | 1.8 | |||
Health Care Equipment & Supplies | 1.8 | |||
Chemicals | 1.7 | |||
Real Estate Management & Development | 1.6 | |||
Affiliated Mutual Fund | 1.5 | |||
Auto Components | 1.2 | |||
Construction & Engineering | 1.2 | |||
Media | 1.1 | |||
Specialty Retail | 1.0 | |||
|
| |||
99.7 | ||||
Other assets in excess of liabilities | 0.3 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 13 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2016
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $9,383,700) | $ | 9,700,501 | ||
Affiliated investments (cost $152,946) | 152,946 | |||
Receivable for investments sold | 174,202 | |||
Dividends receivable | 13,886 | |||
Due from Manager | 7,402 | |||
Receivable for Series shares sold | 2,489 | |||
Prepaid expenses | 207 | |||
|
| |||
Total assets | 10,051,633 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 119,615 | |||
Accrued expenses and other liabilities | 49,879 | |||
Payable for Series shares reacquired | 2,407 | |||
Distribution fee payable | 655 | |||
Affiliated transfer agent fee payable | 307 | |||
|
| |||
Total liabilities | 172,863 | |||
|
| |||
Net Assets | $ | 9,878,770 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 11,527 | ||
Paid-in capital in excess of par | 11,403,002 | |||
|
| |||
11,414,529 | ||||
Accumulated net investment loss | (49,879 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (1,802,952 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 317,072 | |||
|
| |||
Net assets, April 30, 2016 | $ | 9,878,770 | ||
|
|
See Notes to Financial Statements.
14 |
Class A | ||||
Net asset value and redemption price per share, | ||||
($555,815 ÷ 65,008 shares of common stock issued and outstanding) | $ | 8.55 | ||
Maximum sales charge (5.50% of offering price) | 0.50 | |||
|
| |||
Maximum offering price to public | $ | 9.05 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | ||||
($668,084 ÷ 79,045 shares of common stock issued and outstanding) | $ | 8.45 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share, | ||||
($8,593,898 ÷ 1,001,515 shares of common stock issued and outstanding) | $ | 8.58 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | ||||
($60,973 ÷ 7,108 shares of common stock issued and outstanding) | $ | 8.58 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity Fund | 15 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Loss | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $5,225) | $ | 34,881 | ||
Affiliated dividend income | 521 | |||
|
| |||
Total income | 35,402 | |||
|
| |||
Expenses | ||||
Management fee | 49,434 | |||
Distribution fee—Class A | 545 | |||
Distribution fee—Class C | 3,194 | |||
Custodian and accounting fees | 30,000 | |||
Registration fees | 28,000 | |||
Audit fee | 15,000 | |||
Shareholders’ reports | 10,000 | |||
Legal fees and expenses | 8,000 | |||
Directors’ fees | 5,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $900) | 3,000 | |||
Miscellaneous | 7,797 | |||
|
| |||
Total expenses | 159,970 | |||
Less: Management fee waiver and/or expense reimbursement | (99,736 | ) | ||
Distribution fee waiver—Class A | (91 | ) | ||
|
| |||
Net expenses | 60,143 | |||
|
| |||
Net investment loss | (24,741 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized loss on: | ||||
Investment transactions | (719,289 | ) | ||
Foreign currency transactions | (4,125 | ) | ||
|
| |||
(723,414 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 469,507 | |||
Foreign currencies | 337 | |||
|
| |||
469,844 | ||||
|
| |||
Net loss on investment and foreign currency transactions | (253,570 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (278,311 | ) | |
|
|
See Notes to Financial Statements.
16 |
Statement of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (24,741 | ) | $ | (48,688 | ) | ||
Net realized loss on investment and foreign currency transactions | (723,414 | ) | (1,035,669 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 469,844 | (298,727 | ) | |||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (278,311 | ) | (1,383,084 | ) | ||||
|
|
|
| |||||
Dividends from net investment income (Note 1) | ||||||||
Class Q | — | (5,005 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 392,071 | 955,438 | ||||||
Net asset value of shares issued in reinvestment of dividends | — | 5,005 | ||||||
Cost of shares reacquired | (108,170 | ) | (328,954 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 283,901 | 631,489 | ||||||
|
|
|
| |||||
Total increase (decrease) | 5,590 | (756,600 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 9,873,180 | 10,629,780 | ||||||
|
|
|
| |||||
End of period | $ | 9,878,770 | $ | 9,873,180 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Emerging Markets Equity 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”). The Fund currently consists of six series: Prudential Jennison Emerging Markets Equity Fund, (the “Series”), Prudential Jennison Global Infrastructure Fund, Prudential QMA 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 financial statements of the other series are not presented herein. The Series commenced investment operations on September 16, 2014. The investment objective of the Series is to seek long-term growth of capital.
Note 1. Accounting Policies
The Fund 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 (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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
18 |
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.
Common and preferred stocks traded on a 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. 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.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
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 OTC 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
OTC 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 | 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 generally 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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations: such amounts are included in net realized gain (loss) on foreign currency transactions.
20 |
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the holding of foreign currencies, forward currency contracts disposition of foreign currencies, currency gains (losses) realized between the trade date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Series’ books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (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/Warrants: 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 broker-dealer, 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 the 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 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
Prudential Jennison Emerging Markets Equity Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
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 (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 (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.
Dividends and Distributions: The Series expects to pay dividends of net investment income and distributions of net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income (loss), accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends are recorded, net of reclaimable amounts, at the time the related income is earned.
22 |
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 subadviser’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. Prior to January 4, 2016, PGIM, Inc. was known as Prudential Investment Management, Inc. (“PIM”).
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 up to $5 billion and 1.025% of the Series’ average daily net assets in excess of $5 billion. For the six months ended April 30, 2016, the effective management fee rate before any waivers and/or expense reimbursement was 1.05% and the waivers and/or expense reimbursements exceeded the effective management fee rate.
Prior to October 1, 2015, the management fee was accrued daily and paid monthly at an annual rate of 1.05% of the Series’ average daily net assets.
Effective October 1, 2015, PI has contractually agreed to limit net annual Series’ operating expenses (exclusive of distribution and service (12b-1) fees, extraordinary and certain other expenses, such as taxes, interest and brokerage commissions) of each class of shares to 1.20% of the Series’ average daily net assets through February 28, 2017. Prior to October 1, 2015, PI contractually agreed to limit net annual Fund operating expenses (exclusive of distribution and service (12b-1) fees, extraordinary and certain other expenses such as taxes, interest and brokerage commissions) of 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 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 28, 2017.
Prudential Jennison Emerging Markets Equity Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
PIMS has advised the Series that it received $9,412 in front-end sales charges resulting from sales of Class A shares, during the six months ended April 30, 2016. 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, 2016, they did not receive any contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PGIM, Inc., 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. The Transfer agent’s fees and expenses in the Statement of Operations also include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
The Series invests in the Prudential Core Ultra Short Bond Fund (formerly known as 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
The cost of purchases and proceeds from sales of investment securities, other than short-term investments, for the six months ended April 30, 2016 were $2,791,188 and $2,401,692, 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, 2016 were as follows:
Tax Basis | $ | 9,536,646 | ||
|
| |||
Appreciation | 945,210 | |||
Depreciation | (628,409 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 316,801 | ||
|
|
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, 2015 of approximately $1,080,000 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, 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.
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, 2016, Prudential, 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.
Prudential Jennison Emerging Markets Equity Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
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, 2016: | ||||||||
Shares sold | 41,267 | $ | 353,799 | |||||
Shares reacquired | (9,197 | ) | (80,296 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding before conversion | 32,070 | 273,503 | ||||||
Shares reacquired upon conversion into other share class(es) | (2,403 | ) | (21,648 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 29,667 | $ | 251,855 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 62,926 | $ | 591,480 | |||||
Shares reacquired | (25,927 | ) | (245,166 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding before conversion | 36,999 | 346,314 | ||||||
Shares reacquired upon conversion into other share class(es) | (3,444 | ) | (28,723 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 33,555 | $ | 317,591 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 4,305 | $ | 35,198 | |||||
Shares reacquired | (1,037 | ) | (9,014 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 3,268 | $ | 26,184 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 31,697 | $ | 309,514 | |||||
Shares reacquired | (5,597 | ) | (50,302 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 26,100 | $ | 259,212 | |||||
|
|
|
| |||||
Class Q | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares issued in reinvestment of dividends and distributions | — | $ | — | |||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | — | $ | — | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 515 | $ | 5,005 | |||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 515 | $ | 5,005 | |||||
|
|
|
|
26 |
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 365 | $ | 3,074 | |||||
Shares reacquired | (2,439 | ) | (18,860 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding before conversion | (2,074 | ) | (15,786 | ) | ||||
Shares issued upon conversion from other share class(es) | 2,400 | 21,648 | ||||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 326 | $ | 5,862 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 6,334 | $ | 54,444 | |||||
Shares reacquired | (3,988 | ) | (33,486 | ) | ||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 2,346 | 20,958 | ||||||
Shares issued upon conversion from other share class(es) | 3,436 | 28,723 | ||||||
|
|
|
| |||||
Net Increase (decrease) in shares outstanding | 5,782 | $ | 49,681 | |||||
|
|
|
|
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% 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, 2016.
Note 8. New Accounting Pronouncements
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. Management has evaluated the implications of ASU No. 2015-07 and has been determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the
Prudential Jennison Emerging Markets Equity Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications. of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
28 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | September 16, 2014(b) through October 31, 2014 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $8.81 | $10.09 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment loss | (.02 | ) | (.04 | ) | (.01 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | (.24 | ) | (1.24 | ) | .10 | |||||||||||
Total from investment operations | (0.26 | ) | (1.28 | ) | .09 | |||||||||||
Net asset value, end of period | $8.55 | $8.81 | $10.09 | |||||||||||||
Total Return(a) | (2.95 | )% | (12.69 | )% | .90% | |||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $556 | $311 | $18 | |||||||||||||
Average net assets (000) | $366 | $208 | $15 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.45% | (e) | 1.54% | 1.55% | (e) | |||||||||||
Expenses before waiver and/or expense reimbursement | 4.20% | (e) | 3.40% | 14.06% | (e) | |||||||||||
Net investment loss | (.59)% | (e) | (.48)% | (.93)% | (e) | |||||||||||
Portfolio turnover rate | 26% | (f) | 67% | 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, if any. 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 | 29 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | September 16, 2014(b) through October 31, 2014 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $8.74 | $10.08 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment loss | (.06 | ) | (.13 | ) | (.02 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | (.23 | ) | (1.21 | ) | .10 | |||||||||||
Total from investment operations | (.29 | ) | (1.34 | ) | .08 | |||||||||||
Net asset value, end of period | $8.45 | $8.74 | $10.08 | |||||||||||||
Total Return(a) | (3.32)% | (13.29)% | .80% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $668 | $662 | $501 | |||||||||||||
Average net assets (000) | $642 | $699 | $296 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expenses after waiver and/or expense reimbursement | 2.20% | (e) | 2.29% | 2.30% | (e) | |||||||||||
Expenses before waiver and/or expense reimbursement | 4.87% | (e) | 4.12% | 15.19% | (e) | |||||||||||
Net investment loss | (1.44)% | (e) | (1.36)% | (1.79)% | (e) | |||||||||||
Portfolio turnover rate | 26% | (f) | 67% | 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, if any. 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) | Annualized. |
(f) | Not annualized. |
See Notes to Financial Statements.
30 |
Class Q Shares | ||||||||||||||||
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | September 16, 2014(b) through October 31, 2014 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $8.83 | $10.09 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment loss | (.02 | ) | (.04 | ) | (.01 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | (.23 | ) | (1.21 | ) | .10 | |||||||||||
Total from investment operations | (.25 | ) | (1.25 | ) | .09 | |||||||||||
Less Dividends: | ||||||||||||||||
Dividends from net investment income | - | (.01 | ) | - | ||||||||||||
Net asset value, end of period | $8.58 | $8.83 | $10.09 | |||||||||||||
Total Return(a) | (2.83)% | (12.44)% | .90% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $8,594 | $8,840 | $10,101 | |||||||||||||
Average net assets (000) | $8,391 | $9,518 | $9,785 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.20% | (e) | 1.29% | 1.30% | (e) | |||||||||||
Expenses before waiver and/or expense reimbursement | 3.25% | (e) | 2.91% | 13.37% | (e) | |||||||||||
Net investment loss | (.45)% | (e) | (.40)% | (.68)% | (e) | |||||||||||
Portfolio turnover rate | 26% | (f) | 67% | 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, if any. 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 | 31 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||||||||||||||
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | September 16, 2014(b) through October 31, 2014 | ||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||
Net Asset Value, Beginning of Period | $8.82 | $10.09 | $10.00 | |||||||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment loss | (.02 | ) | (.04 | ) | (.01 | ) | ||||||||||
Net realized and unrealized gain on investments | (.22 | ) | (1.23 | ) | .10 | |||||||||||
Total from investment operations | (.24 | ) | (1.27 | ) | .09 | |||||||||||
Net asset value, end of period | $8.58 | $8.82 | $10.09 | |||||||||||||
Total Return(a) | (2.72)% | (12.59)% | .90% | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $61 | $60 | $10 | |||||||||||||
Average net assets (000) | $69 | $17 | $10 | |||||||||||||
Ratios to average net assets(d): | ||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.20% | (e) | 1.29% | 1.30% | (e) | |||||||||||
Expenses before waiver and/or expense reimbursement | 3.85% | (e) | 3.48% | 13.51% | (e) | |||||||||||
Net investment loss | (.50)% | (e) | (.44)% | (.67)% | (e) | |||||||||||
Portfolio turnover rate | 26% | (f) | 67% | 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, if any. 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.
32 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad 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 | 655 Broad Street Newark, NJ 07102 | ||
| ||||
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 | ||
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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, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 0293008-00001-00
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential Jennison Global Opportunities Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
| ![]() |
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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates is a registered investment adviser. Both are Prudential Financial companies. © 2016 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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Letter from the President
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, 2016.
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
June 15, 2016
Prudential Jennison Global Opportunities Fund | 3 |
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 4/30/16 | ||||||
Six Months (%) | One Year (%) | Since Inception (%) | ||||
Class A | –8.45 | –6.10 | 43.10 (3/14/12) | |||
Class C | –8.75 | –6.79 | 38.70 (3/14/12) | |||
Class Q | –8.30 | –5.79 | 2.26 (12/22/14) | |||
Class Z | –8.31 | –5.86 | 44.60 (3/14/12) | |||
MSCI ACWI ND Index | –0.94 | –5.66 | — | |||
Lipper Global Multi-Cap Growth Funds Average | –3.21 | –5.97 | — | |||
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||||
One Year (%) | Since Inception (%) | |||||
Class A | –10.11 | 7.98 (3/14/12) | ||||
Class C | –6.54 | 8.66 (3/14/12) | ||||
Class Q | –4.51 | 2.48 (12/22/14) | ||||
Class Z | –4.64 | 9.78 (3/14/12) | ||||
MSCI ACWI ND Index | –4.34 | — | ||||
Lipper Global Multi-Cap Growth Funds Average | –5.38 | — |
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 | 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 ACWI ND Index—The Morgan Stanley Capital International All Country World Net Dividend Index (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 ND Index 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 ND version of the MSCI ACWI Index reflects the impact of the maximum withholding taxes on reinvested dividends. 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 4/30/16 are 32.74% and –0.69% 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 3/31/16 is 6.80% and –1.71% for Class Q shares.
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 Growth 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
Prudential Jennison Global Opportunities Fund | 5 |
Your Fund’s Performance (continued)
measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 4/30/16 are 33.89% and –0.81% 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 3/31/16 is 7.11% and –1.22% for Class Q shares.
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 4/30/16 (%) | ||||
Tencent Holdings Ltd., Internet Software & Services | 6.4 | |||
Facebook, Inc. (Class A Stock), Internet Software & Services | 5.5 | |||
MasterCard, Inc. (Class A Stock), IT Services | 5.4 | |||
Amazon.com, Inc., Internet & Catalog Retail | 4.7 | |||
Alphabet Inc. (Class A Stock), Internet Software & Services | 4.4 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/16 (%) | ||||
Internet Software & Services | 20.8 | |||
Internet & Catalog Retail | 11.6 | |||
Textiles, Apparel & Luxury Goods | 10.9 | |||
Specialty Retail | 10.4 | |||
Pharmaceuticals | 10.2 |
Industry weightings reflect long-term investments and are subject to change.
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Fees and Expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your
Prudential Jennison Global Opportunities Fund | 7 |
Fees and Expenses (continued)
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, 2015 | Ending Account Value April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 915.50 | 1.16 | % | $ | 5.52 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.10 | 1.16 | % | $ | 5.82 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 912.50 | 1.91 | % | $ | 9.08 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.37 | 1.91 | % | $ | 9.57 | ||||||||||
Class Q | Actual | $ | 1,000.00 | $ | 917.00 | 0.84 | % | $ | 4.00 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.69 | 0.84 | % | $ | 4.22 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 916.90 | 0.91 | % | $ | 4.34 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.34 | 0.91 | % | $ | 4.57 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (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, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 1.31 | 1.16 | ||
C | 2.01 | 1.91 | ||
Q | 0.94 | 0.84 | ||
Z | 1.01 | 0.91 |
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 | 9 |
Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 98.1% | ||||||||
COMMON STOCKS | ||||||||
Argentina 1.8% | ||||||||
MercadoLibre, Inc. | 44,084 | $ | 5,505,651 | |||||
China 13.6% | ||||||||
Alibaba Group Holding Ltd., ADR* | 107,883 | 8,300,518 | ||||||
Ctrip.com International Ltd., ADR* | 179,214 | 7,815,523 | ||||||
JD.com, Inc., ADR* | 218,675 | 5,589,333 | ||||||
Tencent Holdings Ltd. | 957,281 | 19,479,056 | ||||||
|
| |||||||
41,184,430 | ||||||||
Denmark 2.6% | ||||||||
Novo Nordisk A/S (Class B Stock) | 140,398 | 7,839,038 | ||||||
France 2.4% | ||||||||
Dassault Systemes SA | 94,124 | 7,362,089 | ||||||
Germany 1.3% | ||||||||
adidas AG | 29,598 | 3,818,675 | ||||||
Indonesia 1.8% | ||||||||
Astra International Tbk PT | 10,623,747 | 5,391,073 | ||||||
Ireland 1.0% | ||||||||
Shire PLC | 49,851 | 3,110,813 | ||||||
Italy 3.6% | ||||||||
Luxottica Group SpA | 129,305 | 7,056,162 | ||||||
Moncler SpA | 228,677 | 3,716,879 | ||||||
|
| |||||||
10,773,041 | ||||||||
Japan 4.5% | ||||||||
FANUC Corp. | 19,354 | 2,859,012 | ||||||
Shionogi & Co. Ltd. | 128,000 | 6,533,397 | ||||||
Sysmex Corp. | 68,933 | 4,311,022 | ||||||
|
| |||||||
13,703,431 | ||||||||
Singapore 2.4% | ||||||||
Broadcom Ltd. | 48,702 | 7,098,316 | ||||||
South Korea 2.3% | ||||||||
Amorepacific Corp. | 19,863 | 7,083,930 | ||||||
Spain 6.8% | ||||||||
Amadeus IT Holding SA (Class A Stock) | 169,554 | 7,731,762 | ||||||
Inditex SA | 400,622 | 12,894,307 | ||||||
|
| |||||||
20,626,069 |
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Thailand 1.9% | ||||||||
CP ALL PCL | 4,418,600 | $ | 5,776,996 | |||||
United Kingdom 3.1% | ||||||||
Atlassian Corp. PLC (Class A Stock)* | 127,883 | 2,963,049 | ||||||
St. James’s Place PLC | 503,720 | 6,394,087 | ||||||
|
| |||||||
9,357,136 | ||||||||
United States 49.0% | ||||||||
Allergan PLC* | 20,274 | 4,390,537 | ||||||
Alphabet Inc. (Class A Stock)* | 18,744 | 13,268,503 | ||||||
Amazon.com, Inc.* | 21,487 | 14,172,610 | ||||||
Apple, Inc. | 77,918 | 7,304,033 | ||||||
BioMarin Pharmaceutical, Inc.* | 59,175 | 5,010,939 | ||||||
Bristol-Myers Squibb Co. | 127,105 | 9,174,439 | ||||||
Celgene Corp.* | 35,247 | 3,644,892 | ||||||
Facebook, Inc. (Class A Stock)* | 141,789 | 16,671,551 | ||||||
Home Depot, Inc. (The) | 93,730 | 12,549,510 | ||||||
MasterCard, Inc. (Class A Stock) | 167,504 | 16,246,213 | ||||||
Netflix, Inc.* | 80,982 | 7,290,809 | ||||||
NIKE, Inc. (Class B Stock) | 210,612 | 12,413,471 | ||||||
Palo Alto Networks, Inc.* | 17,868 | 2,695,745 | ||||||
Regeneron Pharmaceuticals, Inc.* | 7,024 | 2,646,011 | ||||||
Starbucks Corp. | 48,536 | 2,729,179 | ||||||
Tesla Motors, Inc.* | 26,080 | 6,279,021 | ||||||
TJX Cos., Inc. (The) | 81,480 | 6,177,814 | ||||||
Under Armour, Inc. (Class A Stock)* | 87,487 | 3,844,179 | ||||||
Under Armour, Inc. (Class C Stock)* | 44,556 | 1,817,885 | ||||||
|
| |||||||
148,327,341 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 296,958,029 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT 0.5% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund | 1,464,200 | 1,464,200 | ||||||
|
| |||||||
TOTAL INVESTMENTS 98.6% | 298,422,229 | |||||||
Other assets in excess of liabilities 1.4% | 4,267,677 | |||||||
|
| |||||||
NET ASSETS 100.0% | $ | 302,689,906 | ||||||
|
|
See Notes to Financial Statements.
12 |
The following abbreviations are used in the semiannual report:
ADR—American Depositary Receipt
OTC—Over-the-counter
* | 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 Ultra Short Bond 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, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 5,505,651 | $ | — | $ | — | ||||||
China | 21,705,374 | 19,479,056 | — | |||||||||
Denmark | — | 7,839,038 | — | |||||||||
France | — | 7,362,089 | — | |||||||||
Germany | — | 3,818,675 | — | |||||||||
Indonesia | — | 5,391,073 | — | |||||||||
Ireland | — | 3,110,813 | — | |||||||||
Italy | — | 10,773,041 | — | |||||||||
Japan | — | 13,703,431 | — | |||||||||
Singapore | 7,098,316 | — | — | |||||||||
South Korea | — | 7,083,930 | — | |||||||||
Spain | — | 20,626,069 | — | |||||||||
Thailand | — | 5,776,996 | — | |||||||||
United Kingdom | 2,963,049 | 6,394,087 | — | |||||||||
United States | 148,327,341 | — | — | |||||||||
Affiliated Mutual Fund | 1,464,200 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 187,063,931 | $ | 111,358,298 | $ | — | ||||||
|
|
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 13 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2016 were as follows:
Internet Software & Services | 20.8 | % | ||
Internet & Catalog Retail | 11.6 | |||
Textiles, Apparel & Luxury Goods | 10.9 | |||
Specialty Retail | 10.4 | |||
Pharmaceuticals | 10.2 | |||
IT Services | 7.9 | |||
Automobiles | 3.9 | |||
Biotechnology | 3.8 | |||
Software | 3.4 | |||
Technology Hardware, Storage & Peripherals | 2.4 | |||
Semiconductors & Semiconductor Equipment | 2.4 | |||
Personal Products | 2.3 | % | ||
Insurance | 2.1 | |||
Food & Staples Retailing | 1.9 | |||
Health Care Equipment & Supplies | 1.4 | |||
Machinery | 0.9 | |||
Hotels, Restaurants & Leisure | 0.9 | |||
Communications Equipment | 0.9 | |||
Affiliated Mutual Fund | 0.5 | |||
|
| |||
98.6 | ||||
Other assets in excess of liabilities | 1.4 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
14 |
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Statement of Assets and Liabilities, Statement of Operations and Statement of Changes in Net Assets (unaudited)
SEMIANNUAL REPORT | April 30, 2016 |
Prudential Jennison Global Opportunities Fund
Statement of Assets & Liabilities (unaudited)
as of April 30, 2016
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $284,890,602) | $ | 296,958,029 | ||
Affiliated investments (cost $1,464,200) | 1,464,200 | |||
Receivable for investments sold | 9,465,929 | |||
Receivable for Series shares sold | 1,237,187 | |||
Dividends receivable | 506,249 | |||
Tax reclaim receivable | 50,421 | |||
Prepaid expenses and other assets | 367 | |||
|
| |||
Total Assets | 309,682,382 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 5,383,315 | |||
Payable for Series shares reacquired | 1,342,343 | |||
Management fee payable | 183,218 | |||
Distribution fee payable | 66,174 | |||
Affiliated transfer agent fee payable | 10,215 | |||
Accrued expenses and other liabilities | 7,211 | |||
|
| |||
Total Liabilities | 6,992,476 | |||
|
| |||
Net Assets | $ | 302,689,906 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 211,663 | ||
Paid-in capital in excess of par | 314,100,946 | |||
|
| |||
�� | 314,312,609 | |||
Accumulated net investment loss | (965,733 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (22,737,267 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 12,080,297 | |||
|
| |||
Net assets, April 30, 2016 | $ | 302,689,906 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value and redemption price per share | $ | 14.31 | ||
Maximum sales charge (5.50% of offering price) | 0.83 | |||
|
| |||
Maximum offering price to public | $ | 15.14 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 13.87 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share | $ | 14.47 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 14.46 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Opportunities Fund | 17 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Income | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $91,880) | $ | 1,220,973 | ||
Affiliated dividend income | 13,271 | |||
|
| |||
Total income | 1,234,244 | |||
|
| |||
Expenses | ||||
Management fee | 1,215,637 | |||
Distribution fee—Class A | 151,500 | |||
Distribution fee—Class C | 232,033 | |||
Transfer agent’s fees and expenses (including affiliated expense of $29,300) | 102,000 | |||
Custodian and accounting fees | 78,000 | |||
Registration fees | 40,000 | |||
Audit fee | 14,000 | |||
Shareholders’ reports | 11,000 | |||
Legal fees and expenses | 10,000 | |||
Directors’ fees | 7,000 | |||
Insurance expenses | 1,000 | |||
Loan interest expense | 257 | |||
Miscellaneous | 8,737 | |||
|
| |||
Total expenses | 1,871,164 | |||
Less: Expense reimbursement | (147,660 | ) | ||
Distribution fee waiver—Class A | (25,244 | ) | ||
|
| |||
Net expenses | 1,698,260 | |||
|
| |||
Net investment loss | (464,016 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized loss on: | ||||
Investment transactions | (19,489,717 | ) | ||
Foreign currency transactions | (1,581 | ) | ||
|
| |||
(19,491,298 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | (10,549,334 | ) | ||
Foreign currencies | 17,365 | |||
|
| |||
(10,531,969 | ) | |||
|
| |||
Net loss on investment and foreign currency transactions | (30,023,267 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (30,487,283 | ) | |
|
|
See Notes to Financial Statements.
18 |
Statement of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment loss | $ | (464,016 | ) | $ | (585,924 | ) | ||
Net realized loss on investment and foreign currency transactions | (19,491,298 | ) | (2,115,700 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (10,531,969 | ) | 10,587,386 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (30,487,283 | ) | 7,885,762 | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 238,244,971 | 166,549,415 | ||||||
Cost of shares reacquired | (110,910,378 | ) | (28,969,945 | ) | ||||
|
|
|
| |||||
Net increase in net assets from Series share transactions | 127,334,593 | 137,579,470 | ||||||
|
|
|
| |||||
Total increase | 96,847,310 | 145,465,232 | ||||||
Net Assets: | ||||||||
Beginning of period | 205,842,596 | 60,377,364 | ||||||
|
|
|
| |||||
End of period | $ | 302,689,906 | $ | 205,842,596 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Global 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 Global Opportunities Fund (the “Series”), Prudential Jennison Global Infrastructure Fund, Prudential QMA 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 Fund 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 (generally, 4:00 pm Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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
20 |
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.
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. The models generate an evaluated adjustment factor for each security, which can be applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price to the extent that the valuation meets the established confidence level for each security. Such confidence level is a measure of the probability of a relationship between a given equity security and the factors used in the models. If the confidence level is not met or the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
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 OTC 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
OTC 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 | 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 generally 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: The Series may hold up to 15% of its net assets 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.
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;
22 |
(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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Series does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gain (loss) on foreign currency transactions.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from holdings of foreign currencies, forward currency contracts, disposition of foreign currencies, currency gains (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 (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of 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 (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-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 (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 Global 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-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income (loss), accumulated net realized gain (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 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 subadviser’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.
Effective July 1, 2015, the management fee paid to PI is accrued daily and payable monthly at an annual rate of .825% of the Series’ average daily net assets up to $1 billion and .80% of such assets in excess of $1 billion. Prior to July 1, 2015, the management fee paid to PI was accrued daily and payable monthly at an annual rate of .90% of the Series’ average daily net assets. The effective management fee rate before any waivers and/or expense reimbursement was .825% for the six months ended April 30, 2016. The effective management fee rate net of waivers and/or expense reimbursement was .725%.
Effective July 1, 2015, PI has contractually agreed to limit net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, extraordinary and certain other
24 |
expenses, including taxes, interest, transfer agency expenses (including sub-transfer agency and networking fees), brokerage commissions and acquired fund fees and expenses) of each class of shares to .84% of the Series’ average daily net assets through February 28, 2017. Prior to July 1, 2015, PI had contractually agreed to limit net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, extraordinary and certain other expenses, including taxes, interest and brokerage commissions) of 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.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively. PIMS has contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares through February 28, 2017.
PIMS has advised the Series that it has received $510,998 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2016. 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, 2016, it has received $13,845 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 on the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
Prudential Jennison Global Opportunities Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
The Series invests in the Prudential Core Ultra Short Bond Fund, (formerly known as 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
The cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2016 were $223,762,345 and $95,038,332, 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, 2016 were as follows:
Tax Basis | $ | 288,192,319 | ||
|
| |||
Appreciation | 20,107,459 | |||
Depreciation | (9,877,549 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 10,229,910 | ||
|
|
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, 2015 of approximately $1,408,000 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 Series elected to treat certain late-year ordinary income losses of approximately $495,000 as having been incurred in the following fiscal year (October 31, 2016).
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.
26 |
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.
There are 675 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 150 million, 125 million, 200 million, and 200 million authorized shares, respectively.
As of April 30, 2016, Prudential through its affiliates, owned 707 Class Q shares of the Series.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 4,383,519 | $ | 66,178,509 | |||||
Shares reacquired | (1,515,501 | ) | (21,525,543 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 2,868,018 | 44,652,966 | ||||||
Shares issued upon conversion from other share class(es) | 23,327 | 338,598 | ||||||
Shares reacquired upon conversion into other share class(es) | (89,412 | ) | (1,315,903 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,801,933 | $ | 43,675,661 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 4,298,012 | $ | 66,366,441 | |||||
Shares reacquired | (766,765 | ) | (11,329,060 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 3,531,247 | 55,037,381 | ||||||
Shares issued upon conversion from other share class(es) | 6,271 | 97,035 | ||||||
Shares reacquired upon conversion into other share class(es) | (302,683 | ) | (4,604,448 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 3,234,835 | $ | 50,529,968 | |||||
|
|
|
|
Prudential Jennison Global Opportunities Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
Class C | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 2,417,582 | $ | 35,695,484 | |||||
Shares reacquired | (547,632 | ) | (7,533,218 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,869,950 | 28,162,266 | ||||||
Shares reacquired upon conversion into other share class(es) | (10,374 | ) | (156,699 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,859,576 | $ | 28,005,567 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 1,607,386 | $ | 24,055,556 | |||||
Shares reacquired | (105,939 | ) | (1,539,083 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,501,447 | 22,516,473 | ||||||
Shares reacquired upon conversion into other share class(es) | (9,846 | ) | (143,223 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,491,601 | $ | 22,373,250 | |||||
|
|
|
| |||||
Class Q | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 563,204 | $ | 9,000,000 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 563,204 | $ | 9,000,000 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 707 | $ | 10,000 | |||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 707 | $ | 10,000 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 8,431,995 | $ | 127,370,978 | |||||
Shares reacquired† | (5,729,649 | ) | (81,851,617 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 2,702,346 | 45,519,361 | ||||||
Shares issued upon conversion from other share class(es) | 98,588 | 1,472,602 | ||||||
Shares reacquired upon conversion into other share class(es) | (23,108 | ) | (338,598 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,777,826 | $ | 46,653,365 | |||||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 4,928,215 | $ | 76,117,418 | |||||
Shares reacquired | (1,077,251 | ) | (16,101,802 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 3,850,964 | 60,015,616 | ||||||
Shares issued upon conversion from other shares class(es) | 309,766 | 4,747,671 | ||||||
Shares reacquired upon conversion into other share class(es) | (6,222 | ) | (97,035 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 4,154,508 | $ | 64,666,252 | |||||
|
|
|
|
† | Includes affiliated redemption of 1,169,182 shares with a value of $18,000,000 for Class Z shares. |
28 |
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% 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, 2016. The average daily balance for the 8 days the Series had loans outstanding during the period was $684,500, borrowed at a weighted average interest rate of 1.69%. The maximum loan outstanding amount during the period was $1,115,000. As of April 30, 2016, the Series did not have an outstanding loan amount.
Note 8. New Accounting Pronouncements
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. Management has evaluated the implications of ASU No. 2015-07 and has determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
Prudential Jennison Global Opportunities Fund | 29 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $15.63 | $14.08 | $12.94 | $9.86 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (.02) | (.09 | ) | (.11 | ) | (.06 | ) | (.02 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (1.30) | 1.64 | 1.25 | 3.14 | (.12 | ) | ||||||||||||||||||
Total from investment operations | (1.32) | 1.55 | 1.14 | 3.08 | (.14 | ) | ||||||||||||||||||
Net asset value, end of period | $14.31 | $15.63 | $14.08 | $12.94 | $9.86 | |||||||||||||||||||
Total Return(c): | (8.45)% | 11.01% | 8.81% | 31.24% | (1.40)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $107,904 | $74,049 | $21,150 | $10,035 | $3,898 | |||||||||||||||||||
Average net assets (000) | $101,534 | $36,635 | $19,352 | $4,982 | $2,967 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.16% | (e) | 1.38% | 1.60% | 1.60% | 1.60% | (e) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.31% | (e) | 1.56% | 1.71% | 2.19% | 3.10% | (e) | |||||||||||||||||
Net investment loss | (.31)% | (e) | (.63)% | (.78)% | (.54)% | (.30)% | (e) | |||||||||||||||||
Portfolio turnover rate | 33% | (f) | 58% | 68% | 70% | 48% | (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 each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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 C Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $15.20 | $13.79 | $12.77 | $9.81 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (.07) | (.20 | ) | (.21 | ) | (.14 | ) | (.06 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (1.26) | 1.61 | 1.23 | 3.10 | (.13 | ) | ||||||||||||||||||
Total from investment operations | (1.33) | 1.41 | 1.02 | 2.96 | (.19 | ) | ||||||||||||||||||
Net asset value, end of period | $13.87 | $15.20 | $13.79 | $12.77 | $9.81 | |||||||||||||||||||
Total Return(c): | (8.75)% | 10.22% | 7.99% | 30.17% | (1.90)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $52,229 | $28,982 | $5,723 | $1,659 | $593 | |||||||||||||||||||
Average net assets (000) | $46,654 | $11,330 | $4,361 | $950 | $300 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.91% | (e) | 2.12% | 2.35% | 2.35% | 2.35% | (e) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.01% | (e) | 2.27% | 2.41% | 2.89% | 3.85% | (e) | |||||||||||||||||
Net investment loss | (1.06)% | (e) | (1.37)% | (1.54)% | (1.26)% | (.97)% | (e) | |||||||||||||||||
Portfolio turnover rate | 33% | (f) | 58% | 68% | 70% | 48% | (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 each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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 | 31 |
Financial Highlights (unaudited) (continued)
Class Q Shares | ||||||||
Six Months | December 22, 2015 | |||||||
Per Share Operating Performance(b): | ||||||||
Net Asset Value, Beginning Of Period | $15.78 | $14.15 | ||||||
Income (loss) from investment operations: | ||||||||
Net investment income (loss) | - | (g) | (.03 | ) | ||||
Net realized and unrealized gain on investment and foreign currency transactions | (1.31 | ) | 1.66 | |||||
Total from investment operations | (1.31 | ) | 1.63 | |||||
Net asset value, end of period | $14.47 | $15.78 | ||||||
Total Return(c): | (8.30)% | 11.52% | ||||||
Ratios/Supplemental Data: | ||||||||
Net assets, end of period (000) | $8,159 | $11 | ||||||
Average net assets (000) | $6,916 | $11 | ||||||
Ratios to average net assets(d): | ||||||||
Expenses after waivers and/or expense reimbursement | .84% | (e) | 1.09% | (e) | ||||
Expenses before waivers and/or expense reimbursement | .94% | (e) | 1.18% | (e) | ||||
Net investment income (loss) | .01% | (e) | (.27)% | (e) | ||||
Portfolio turnover rate | 33% | (f) | 58% | (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 each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods 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. |
(g) | Less than $.005 per share. |
See Notes to Financial Statements.
32 |
Class Z Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | March 14, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $15.77 | $14.17 | $12.99 | $9.87 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (.01) | (.06 | ) | (.08 | ) | (.03 | ) | - | (e) | |||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (1.30) | 1.66 | 1.26 | 3.15 | (.13 | ) | ||||||||||||||||||
Total from investment operations | (1.31) | 1.60 | 1.18 | 3.12 | (.13 | ) | ||||||||||||||||||
Net asset value, end of period | $14.46 | $15.77 | $14.17 | $12.99 | $9.87 | |||||||||||||||||||
Total Return(c): | (8.31)% | 11.29% | 9.08% | 31.61% | (1.30)% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $134,399 | $102,800 | $33,504 | $25,219 | $15,002 | |||||||||||||||||||
Average net assets (000) | $141,175 | $48,494 | $30,965 | $18,340 | $14,655 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | .91% | (f) | 1.15% | 1.35% | 1.35% | 1.35% | (f) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.01% | (f) | 1.28% | 1.42% | 1.89% | 2.72% | (f) | |||||||||||||||||
Net investment loss | (.09)% | (f) | (.41)% | (.56)% | (.25)% | (.03)% | (f) | |||||||||||||||||
Portfolio turnover rate | 33% | (g) | 58% | 68% | 70% | 48% | (g) |
(a) | Commencement of operations. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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 | 33 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
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 Opportunities Fund, Prudential Investments, Attn: Board of Directors, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 0293000-00001-00
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential Jennison International Opportunities Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
| ![]() |
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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates is a registered investment adviser. Both are Prudential Financial companies. © 2016 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at prudentialfunds.com |
Letter from the President
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, 2016.
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
June 15, 2016
Prudential Jennison International Opportunities Fund | 3 |
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 4/30/16 | ||||||
Six Months (%) | One Year (%) | Since Inception (%) | ||||
Class A | –6.11 | –11.39 | 27.90 (6/5/12) | |||
Class C | –6.50 | –12.08 | 24.31 (6/5/12) | |||
Class Q | N/A | N/A | –6.34 (12/23/15) | |||
Class Z | –5.98 | –11.17 | 29.19 (6/5/12) | |||
MSCI All Country World ex-US Index | –1.75 | –11.28 | — | |||
Lipper International Multi-Cap Growth Funds Average | –2.57 | –8.23 | — | |||
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||||
One Year (%) | Since Inception (%) | |||||
Class A | –14.77 | 5.15 (6/5/12) | ||||
Class C | –11.29 | 5.95 (6/5/12) | ||||
Class Q | N/A | N/A (12/23/15) | ||||
Class Z | –9.53 | 7.00 (6/5/12) | ||||
MSCI All Country World ex-US Index | –9.19 | — | ||||
Lipper International Multi-Cap Growth Funds Average | –5.91 | — |
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 | 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 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. The cumulative total returns for the MSCI ACWI ex-US Index measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 4/30/16 are 28.70% and 2.25% for Class Q shares. The average annual total return for the MSCI ACWI ex-US Index measured from the month-end closest to the inception date for Class A, Class C, and Class Z shares through 3/31/16 is 6.08%. Class Q shares have been in existence for less than one year and have no average annual total return performance information available.
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 Growth Funds category for the periods noted. Funds in the Lipper Average, by portfolio practice, invest in a
Prudential Jennison International Opportunities Fund | 5 |
Your Fund’s Performance (continued)
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. 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 4/30/16 are 34.90% and -0.69% 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 3/31/16 is 7.70%. Class Q shares have been in existence for less than one year and have no average annual total return performance information available.
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 4/30/16 (%) | ||||
Tencent Holdings Ltd., Internet Software & Services | 6.7 | |||
Dassault Systemes SA, Software | 4.9 | |||
Industria de Diseno Textil SA, Specialty Retail | 4.4 | |||
Ono Pharmaceutical Co. Ltd., Pharmaceuticals | 3.3 | |||
adidas AG, Textiles, Apparel & Luxury Goods | 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 4/30/16 (%) | ||||
Pharmaceuticals | 14.0 | |||
Internet Software & Services | 10.6 | |||
Textiles, Apparel & Luxury Goods | 8.7 | |||
Auto Components | 6.3 | |||
Software | 5.8 |
Industry weightings reflect only long-term investments and are subject to change.
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Fees and Expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses
Prudential Jennison International Opportunities Fund | 7 |
Fees and Expenses (continued)
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, 2015 | Ending Account April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 938.90 | 1.14 | % | $ | 5.50 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.19 | 1.14 | % | $ | 5.72 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 935.00 | 1.89 | % | $ | 9.09 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.47 | 1.89 | % | $ | 9.47 | ||||||||||
Class Q | Actual** | $ | 1,000.00 | $ | 936.60 | 0.84 | % | $ | 2.87 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.69 | 0.84 | % | $ | 4.22 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 940.20 | 0.89 | % | $ | 4.29 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.44 | 0.89 | % | $ | 4.47 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (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 129 day period ended April 30, 2016 due to the class’s inception date of December 23, 2015.
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The Fund’s annualized expense ratios for the six-month period ended April 30, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 1.67 | 1.14 | ||
C | 2.37 | 1.89 | ||
Q | 1.32 | 0.84 | ||
Z | 1.37 | 0.89 |
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 | 9 |
Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 97.5% | ||||||||
COMMON STOCKS 94.8% | ||||||||
Argentina 1.6% | ||||||||
MercadoLibre, Inc. | 6,257 | $ | 781,437 | |||||
China 12.9% | ||||||||
Alibaba Group Holding Ltd., ADR* | 14,284 | 1,099,011 | ||||||
Ctrip.com International Ltd., ADR* | 22,764 | 992,738 | ||||||
JD.com, Inc., ADR* | 34,584 | 883,967 | ||||||
Tencent Holdings Ltd. | 159,381 | 3,243,135 | ||||||
|
| |||||||
6,218,851 | ||||||||
Denmark 1.9% | ||||||||
Novo Nordisk A/S (Class B Stock) | 16,580 | 925,734 | ||||||
France 8.2% | ||||||||
Dassault Systemes SA | 30,122 | 2,356,050 | ||||||
JCDecaux SA | 11,015 | 488,052 | ||||||
Valeo SA | 6,999 | 1,110,179 | ||||||
|
| |||||||
3,954,281 | ||||||||
Germany 9.4% | ||||||||
adidas AG | 11,938 | 1,540,217 | ||||||
Continental AG | 4,808 | 1,058,791 | ||||||
Fresenius SE & Co. KGaA | 17,567 | 1,280,961 | ||||||
KUKA AG | 6,508 | 642,806 | ||||||
|
| |||||||
4,522,775 | ||||||||
Hong Kong 1.1% | ||||||||
Techtronic Industries Co. Ltd. | 138,153 | 517,890 | ||||||
India 1.5% | ||||||||
HDFC Bank Ltd., ADR | 11,495 | 722,691 | ||||||
Indonesia 2.4% | ||||||||
PT Astra International Tbk | 1,748,203 | 887,134 | ||||||
PT Tower Bersama Infrastructure Tbk* | 563,923 | 252,670 | ||||||
PT Tower Bersama Infrastructure Tbk, 144A*(a) | 72,770 | 32,605 | ||||||
|
| |||||||
1,172,409 | ||||||||
Ireland 1.7% | ||||||||
Shire PLC | 13,287 | 829,138 |
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Italy 7.1% | ||||||||
Anima Holding SpA | 55,315 | $ | 392,851 | |||||
Anima Holding SpA, 144A(a) | 8,700 | 61,788 | ||||||
Brembo SpA | 16,358 | 880,094 | ||||||
Luxottica Group SpA | 21,812 | 1,190,279 | ||||||
Moncler SpA | 54,771 | 890,239 | ||||||
|
| |||||||
3,415,251 | ||||||||
Japan 11.5% | ||||||||
FANUC Corp. | 3,002 | 443,462 | ||||||
Ono Pharmaceutical Co. Ltd. | 34,959 | 1,575,178 | ||||||
Pigeon Corp. | 29,626 | 778,146 | ||||||
Santen Pharmaceutical Co. Ltd. | 32,195 | 461,406 | ||||||
Shimano, Inc. | 3,688 | 529,123 | ||||||
Shionogi & Co. Ltd. | 20,510 | 1,046,875 | ||||||
Sysmex Corp. | 11,573 | 723,767 | ||||||
|
| |||||||
5,557,957 | ||||||||
Jordan 1.6% | ||||||||
Hikma Pharmaceuticals PLC | 23,794 | 767,136 | ||||||
Mexico 1.4% | ||||||||
Alsea SAB de CV | 146,310 | 560,845 | ||||||
Alsea SAB de CV, 144A(a) | 23,432 | 89,821 | ||||||
|
| |||||||
650,666 | ||||||||
Netherlands 1.5% | ||||||||
ASML Holding NV | 7,299 | 705,494 | ||||||
Singapore 1.9% | ||||||||
Broadcom Ltd. | 6,361 | 927,116 | ||||||
South Korea 2.7% | ||||||||
Amorepacific Corp. | 3,588 | 1,279,622 | ||||||
Spain 7.3% | ||||||||
Amadeus IT Holding SA (Class A Stock) | 30,741 | 1,401,808 | ||||||
Industria de Diseno Textil SA | 66,342 | 2,135,265 | ||||||
|
| |||||||
3,537,073 | ||||||||
Sweden 4.3% | ||||||||
Assa Abloy AB (Class B Stock) | 61,714 | 1,296,750 | ||||||
Hexagon AB (Class B Stock) | 19,550 | 780,921 | ||||||
|
| |||||||
2,077,671 |
See Notes to Financial Statements.
12 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom 11.3% | ||||||||
Aldermore Group PLC* | 103,960 | $ | 285,835 | |||||
Aldermore Group PLC, 144A*(a) | 68,642 | 188,729 | ||||||
Atlassian Corp. PLC (Class A Stock)* | 19,250 | 446,022 | ||||||
Hargreaves Lansdown PLC | 44,554 | 838,840 | ||||||
ITV PLC | 307,142 | 1,012,423 | ||||||
OneSavings Bank PLC | 122,405 | 512,771 | ||||||
OneSavings Bank PLC, 144A(a) | 30,999 | 129,859 | ||||||
St. James’s Place PLC | 108,197 | 1,373,424 | ||||||
Worldpay Group PLC* | 175,351 | 683,888 | ||||||
|
| |||||||
5,471,791 | ||||||||
United States 3.5% | ||||||||
Allergan PLC* | 5,372 | 1,163,360 | ||||||
lululemon athletica, Inc.* | 7,645 | 501,130 | ||||||
|
| |||||||
1,664,490 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 45,699,473 | |||||||
|
| |||||||
PARTICIPATORY NOTES† 2.7% | ||||||||
India | ||||||||
CS Bharti Infratel Ltd., expiring 06/18/20, Private Placement, 144A(a) | 116,596 | 657,018 | ||||||
GS Maruti Suzuki India, expiring 07/29/16, Private Placement, 144A(a) | 11,627 | 663,651 | ||||||
|
| |||||||
TOTAL PARTICIPATORY NOTES | 1,320,669 | |||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 47,020,142 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT 3.1% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - | 1,484,125 | $ | 1,484,125 | |||||
|
| |||||||
TOTAL INVESTMENTS 100.6% | 48,504,267 | |||||||
Liabilities in excess of other assets (0.6)% | (274,064 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 48,230,203 | ||||||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 13 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The following abbreviations are used in the semiannual report:
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
OTC—Over-the-counter
* | Non-income producing security. |
† | Participatory notes represented 2.7% of net assets, of which the Series attributed 1.3% to Credit Suisse First Boston Corp. and 1.4% to Goldman Sachs & Co. as counterparties to the securities. |
(a) | Indicates a security 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 Ultra Short Bond 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, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 781,437 | $ | — | $ | — | ||||||
China | 2,975,716 | 3,243,135 | — | |||||||||
Denmark | — | 925,734 | — | |||||||||
France | — | 3,954,281 | — | |||||||||
Germany | — | 4,522,775 | — | |||||||||
Hong Kong | — | 517,890 | — | |||||||||
India | 722,691 | — | — | |||||||||
Indonesia | — | 1,172,409 | — | |||||||||
Ireland | — | 829,138 | — | |||||||||
Italy | — | 3,415,251 | — | |||||||||
Japan | — | 5,557,957 | — | |||||||||
Jordan | — | 767,136 | — | |||||||||
Mexico | 560,845 | 89,821 | — | |||||||||
Netherlands | — | 705,494 | — | |||||||||
Singapore | 927,116 | — | — |
See Notes to Financial Statements.
14 |
Level 1 | Level 2 | Level 3 | ||||||||||
Common Stocks (continued) | ||||||||||||
South Korea | $ | — | $ | 1,279,622 | $ | — | ||||||
Spain | — | 3,537,073 | — | |||||||||
Sweden | — | 2,077,671 | — | |||||||||
United Kingdom | 958,793 | 4,512,998 | — | |||||||||
United States | 1,664,490 | — | — | |||||||||
Participatory Notes | ||||||||||||
India | — | 1,320,669 | — | |||||||||
Affiliated Mutual Fund | 1,484,125 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 10,075,213 | $ | 38,429,054 | $ | — | ||||||
|
|
|
|
|
|
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2016 were as follows:
Pharmaceuticals | 14.0 | % | ||
Internet Software & Services | 10.6 | |||
Textiles, Apparel & Luxury Goods | 8.7 | |||
Auto Components | 6.3 | |||
Software | 5.8 | |||
Specialty Retail | 4.4 | |||
IT Services | 4.3 | |||
Internet & Catalog Retail | 3.9 | |||
Semiconductors & Semiconductor Equipment | 3.4 | |||
Automobiles | 3.2 | |||
Media | 3.1 | |||
Affiliated Mutual Fund | 3.1 | |||
Insurance | 2.8 | |||
Building Products | 2.7 | |||
Health Care Providers & Services | 2.7 | |||
Personal Products | 2.7 | |||
Capital Markets | 2.6 | % | ||
Banks | 2.5 | |||
Machinery | 2.2 | |||
Electronic Equipment, Instruments & Components | 1.6 | |||
Household Products | 1.6 | |||
Health Care Equipment & Supplies | 1.5 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Thrifts & Mortgage Finance | 1.4 | |||
Diversified Telecommunication Services | 1.3 | |||
Leisure Products | 1.1 | |||
Household Durables | 1.1 | |||
Wireless Telecommunication Services | 0.6 | |||
|
| |||
100.6 | ||||
Liabilities in excess of other assets | (0.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 15 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2016
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $43,102,632) | $ | 47,020,142 | ||
Affiliated investments (cost $1,484,125) | 1,484,125 | |||
Foreign currency, at value (cost $5,514) | 5,598 | |||
Receivable for investments sold | 520,292 | |||
Dividends and interest receivable | 171,784 | |||
Receivable for Series shares sold | 135,176 | |||
Tax reclaim receivable | 55,230 | |||
Prepaid expenses | 246 | |||
|
| |||
Total assets | 49,392,593 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 1,098,406 | |||
Payable for Series shares reacquired | 29,907 | |||
Accrued expenses | 20,904 | |||
Management fee payable | 10,908 | |||
Distribution fee payable | 1,543 | |||
Affiliated transfer agent fee payable | 722 | |||
|
| |||
Total liabilities | 1,162,390 | |||
|
| |||
Net Assets | $ | 48,230,203 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 38,930 | ||
Paid-in capital in excess of par | 47,783,870 | |||
|
| |||
47,822,800 | ||||
Undistributed net investment income | 46,821 | |||
Accumulated net realized loss on investment and foreign currency transactions | (3,558,535 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 3,919,117 | |||
|
| |||
Net assets, April 30, 2016 | $ | 48,230,203 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value and redemption price per share | $ | 12.29 | ||
Maximum sales charge (5.50% of offering price) | 0.72 | |||
|
| |||
Maximum offering price to public | $ | 13.01 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 11.94 | ||
|
| |||
Class Q | ||||
Net asset value, offering price and redemption price per share | $ | 12.41 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 12.41 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison International Opportunities Fund | 17 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Income | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $29,541) | $ | 298,308 | ||
Affiliated dividend income | 2,098 | |||
|
| |||
Total income | 300,406 | |||
|
| |||
Expenses | ||||
Management fee | 198,447 | |||
Distribution fee—Class A | 5,705 | |||
Distribution fee—Class C | 4,967 | |||
Custodian and accounting fees | 47,000 | |||
Registration fees | 25,000 | |||
Audit fee | 14,000 | |||
Shareholders’ reports | 10,000 | |||
Legal fees and expenses | 9,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $3,700) | 9,000 | |||
Directors’ fees | 5,000 | |||
Loan interest expense | 21 | |||
Miscellaneous | 9,183 | |||
|
| |||
Total expenses | 337,323 | |||
Less: Expense reimbursement | (116,136 | ) | ||
Distribution fee waiver—Class A | (951 | ) | ||
|
| |||
Net expenses | 220,236 | |||
|
| |||
Net investment income | 80,170 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investment And Foreign Currency Transactions | ||||
Net realized loss on: | ||||
Investment transactions | (1,396,418 | ) | ||
Foreign currency transactions | (25,154 | ) | ||
|
| |||
(1,421,572 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | (1,639,340 | ) | ||
Foreign currencies | 6,451 | |||
|
| |||
(1,632,889 | ) | |||
|
| |||
Net loss on investment and foreign currency transactions | (3,054,461 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (2,974,291 | ) | |
|
|
See Notes to Financial Statements.
18 |
Statement of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2016 | Year Ended | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 80,170 | $ | (112,197 | ) | |||
Net realized loss on investment and foreign currency transactions | (1,421,572 | ) | (740,303 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (1,632,889 | ) | 996,214 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (2,974,291 | ) | 143,714 | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 3,866,117 | 10,063,474 | ||||||
Cost of shares reacquired | (4,149,123 | ) | (8,013,441 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | (283,006 | ) | 2,050,033 | |||||
|
|
|
| |||||
Total increase (decrease) | (3,257,297 | ) | 2,193,747 | |||||
Net Assets: | ||||||||
Beginning of period | 51,487,500 | 49,293,753 | ||||||
|
|
|
| |||||
End of period(a) | $ | 48,230,203 | $ | 51,487,500 | ||||
|
|
|
| |||||
(a) Includes undistributed net investment income of: | $ | 46,821 | $ | — | ||||
|
|
|
|
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 QMA 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 Fund 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 (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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
20 |
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.
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. The models generate an evaluated adjustment factor for each security, which can be applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price to the extent that the valuation meets the established confidence level for each security. Such confidence level is a measure of the probability of a relationship between a given equity security and the factors used in the models. If the confidence level is not met or the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
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 OTC 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
Prudential Jennison International Opportunities Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
OTC 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 generally 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: The Series may hold up to 15% of its net assets 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
22 |
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.
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.
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 generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Series does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gains (losses) on foreign currency transactions.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from holdings of foreign currencies, forward currency contracts, disposition of foreign currencies, currency gains (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 (losses) from valuing foreign currency denominated assets and liabilities (other than investments) at period-end exchange rates are reflected as a component of 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.
Prudential Jennison International Opportunities Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
Participatory Notes/Warrants: 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 counterparty 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 the P-note is entitled to receive from the bank or broker-dealer, 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.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-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 (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 may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are
24 |
reclassified amongst undistributed net investment income (loss), accumulated net realized gain (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 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 subadviser’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.
Effective October 1, 2015, the management fee paid to PI is accrued daily and payable monthly at an annual rate of .825% of the Series’ average daily net assets up to $1 billion and .80% of such assets in excess of $1 billion. Prior to October 1, 2015, the management fee paid to PI was accrued daily and payable monthly at an annual rate of .90% of the Series’ average daily net assets. The effective management fee rate before any waivers and/or expense reimbursements was .825% for the six months ended April 30, 2016. The effective management fee rate, net of waivers and/or expense reimbursements was .343%.
Effective October 1, 2015, PI has contractually agreed to limit net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, transfer agency/sub-transfer agency fees and networking fees, extraordinary and certain other expenses, such as taxes, interest and brokerage commissions) of each class of shares to .84% of the Series’ average daily net assets through February 28, 2017. Prior to October 1, 2015, PI had contractually agreed to limit net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, extraordinary and certain other expenses, such as taxes, interest and brokerage commissions) of each class of shares to 1.35% of the Series’ average daily net assets.
Prudential Jennison International Opportunities Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
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.
Pursuant to the Class A and C Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively. PIMS has contractually agreed to limit such fees to .25% of the average daily net assets of the Class A shares through February 28, 2017.
PIMS has advised the Series that it has received $11,726 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2016. 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, 2016, it has received $6 in contingent deferred sales charges imposed upon redemption 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 on the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.
The Series may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
The Series invests in the Prudential Core Ultra Short Bond Fund, (formerly known as Prudential Core Taxable Money Market Fund), (the “Core Fund”), a portfolio of the
26 |
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
The cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, for the six months ended April 30, 2016 were $12,750,826 and $14,018,979, 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, 2016 were as follows:
Tax Basis | $ | 44,618,292 | ||
|
| |||
Appreciation | 5,748,263 | |||
Depreciation | (1,862,288 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 3,885,975 | ||
|
|
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, 2015 of approximately $2,105,000 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 Series elected to treat certain late-year ordinary income losses of approximately $33,000 as having been incurred in the following fiscal year (October 31, 2016).
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%. 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
Prudential Jennison International Opportunities Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
of 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.
There are 850 million shares of common stock, $.01 par value per share, designated Class A, Class C, Class Q and Class Z common stock, each of which consists of 200 million, 200 million, 250 million and 200 million authorized shares, respectively.
As of April 30, 2016, Prudential, through its affiliates, owned 1,041 of Class A, 755 of Class Q and 1,041,033 of Class Z shares of the Series, respectively.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 43,006 | $ | 530,241 | |||||
Shares reacquired | (54,898 | ) | (673,986 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (11,892 | ) | $ | (143,745 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 244,088 | $ | 3,370,573 | |||||
Shares reacquired | (61,632 | ) | (819,951 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 182,456 | 2,550,622 | ||||||
Shares reacquired upon conversion into other share class(es) | (4,627 | ) | (60,515 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 177,829 | $ | 2,490,107 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 12,874 | $ | 162,372 | |||||
Shares reacquired | (35,699 | ) | (440,868 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (22,825 | ) | $ | (278,496 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 78,839 | $ | 1,061,115 | |||||
Shares reacquired | (19,930 | ) | (246,472 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 58,909 | $ | 814,643 | |||||
|
|
|
|
28 |
Class Q | Shares | Amount | ||||||
Period ended April 30, 2016*: | ||||||||
Shares sold | 174,579 | $ | 2,085,000 | |||||
Shares reacquired | (122,988 | ) | (1,560,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 51,591 | 525,000 | ||||||
Shares issued upon conversion from other share class(es) | 1,917,143 | 25,402,138 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,968,734 | $ | 25,927,138 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 87,603 | $ | 1,088,504 | |||||
Shares reacquired | (117,042 | ) | (1,474,269 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (29,439 | ) | (385,765 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1,917,143 | ) | (25,402,138 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,946,582 | ) | $ | (25,787,903 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 422,403 | $ | 5,631,786 | |||||
Shares reacquired | (514,187 | ) | (6,947,018 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (91,784 | ) | (1,315,232 | ) | ||||
Shares issued upon conversion from other shares class(es) | 4,591 | 60,515 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (87,193 | ) | $ | (1,254,717 | ) | |||
|
|
|
|
* | Commencement of offering was December 23, 2015. |
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% of the unused portion of the SCA. Interest on any borrowings under the SCA is paid at contracted market rates. The Fund’s portion of 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, 2016. The average daily balance for the 5 days the Series had loans outstanding during the period was $103,000, borrowed at a weighted average interest rate of 1.45%. The maximum loan outstanding amount during the period was $103,000. As of April 30, 2016, the Series did not have an outstanding loan amount.
Note 8. New Accounting Pronouncements
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
Prudential Jennison International Opportunities Fund | 29 |
Notes to Financial Statements (unaudited) (continued)
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. Management has evaluated the implications of ASU No. 2015-07 and has determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
30 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||
Six Months | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $13.09 | $13.06 | $13.51 | $11.30 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | .01 | (.05 | ) | (.06 | ) | (.01 | ) | (.01 | ) | |||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.81 | ) | .08 | .09 | 2.27 | 1.31 | ||||||||||||||||||
Total from investment operations | (.80 | ) | .03 | .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 | $12.29 | $13.09 | $13.06 | $13.51 | $11.30 | |||||||||||||||||||
Total Return(c): | (6.11)% | .23% | .20% | 20.04% | 13.00% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $3,765 | $4,167 | $1,833 | $889 | $94 | |||||||||||||||||||
Average net assets (000) | $3,824 | $3,179 | $1,467 | $356 | $32 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.14%(e) | 1.55% | 1.60% | 1.60% | 1.60% | (e) | ||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.67%(e) | 1.67% | 1.90% | 3.16% | 4.42% | (e) | ||||||||||||||||||
Net investment income (loss) | .09%(e) | (.39)% | (.48)% | (.08)% | (.61)% | (e) | ||||||||||||||||||
Portfolio turnover rate | 27%(f) | 75% | 61% | 86% | 28% | (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 each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $12.77 | $12.82 | $13.37 | $11.27 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment loss | (.04 | ) | (.15 | ) | (.16 | ) | (.14 | ) | (.05 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.79 | ) | .10 | .09 | 2.29 | 1.32 | ||||||||||||||||||
Total from investment operations | (.83 | ) | (.05 | ) | (.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 | $11.94 | $12.77 | $12.82 | $13.37 | $11.27 | |||||||||||||||||||
Total Return(c): | (6.50)% | (.39)% | (.57)% | 19.11% | 12.70% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $863 | $1,215 | $465 | $181 | $11 | |||||||||||||||||||
Average net assets (000) | $999 | $903 | $362 | $38 | $11 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.89% | (e) | 2.30% | 2.35% | 2.35% | 2.35% | (e) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.37% | (e) | 2.37% | 2.60% | 4.09% | 5.29% | (e) | |||||||||||||||||
Net investment loss | (.73)% | (e) | (1.15)% | (1.21)% | (1.12)% | (1.16)% | (e) | |||||||||||||||||
Portfolio turnover rate | 27% | (f) | 75% | 61% | 86% | 28% | (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 each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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.
32 |
Class Q Shares | ||||
December 23, 2015(a) through April 30, 2016 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $13.25 | |||
Income (loss) from investment operations: | ||||
Net investment income | .03 | |||
Net realized and unrealized loss on investment transactions | (.87 | ) | ||
Total from investment operations | (.84 | ) | ||
Net asset value, end of period | $12.41 | |||
Total Return(c): | (6.34)% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $24,428 | |||
Average net assets (000) | $23,673 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | .84% | (e) | ||
Expenses before waivers and/or expense reimbursement | 1.32% | (e) | ||
Net investment income | .79% | (e) | ||
Portfolio turnover rate | 27% | (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 each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods 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.
Prudential Jennison International Opportunities Fund | 33 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||||||||||||||||||||||
Six Months | Year Ended October 31, | June 5, 2012(a) through October 31, | ||||||||||||||||||||||
2016(b) | 2015(b) | 2014(b) | 2013(b) | 2012 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning Of Period | $13.20 | $13.13 | $13.55 | $11.32 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | .01 | (.03 | ) | (.02 | ) | .02 | (.01 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | (.80 | ) | .10 | .08 | 2.26 | 1.33 | ||||||||||||||||||
Total from investment operations | (.79 | ) | .07 | .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 | $12.41 | $13.20 | $13.13 | $13.55 | $11.32 | |||||||||||||||||||
Total Return(c): | (5.98)% | .53% | .42% | 20.24% | 13.20% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $19,175 | $46,105 | $46,996 | $16,487 | $11,962 | |||||||||||||||||||
Average net assets (000) | $27,296 | $47,187 | $38,835 | $13,938 | $11,061 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | .89% | (e) | 1.31% | 1.35% | 1.35% | 1.35% | (e) | |||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.37% | (e) | 1.40% | 1.54% | 2.73% | 4.28% | (e) | |||||||||||||||||
Net investment income (loss) | .13% | (e) | (.19)% | (.13)% | .13% | (.17)% | (e) | |||||||||||||||||
Portfolio turnover rate | 27% | (f) | 75% | 61% | 86% | 28% | (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 each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than 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.
34 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
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, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 | Q | Z | ||||
NASDAQ | PWJAX | PWJCX | PWJQX | PWJZX | ||||
CUSIP | 743969677 | 743969669 | 743969586 | 743969651 |
MF215E2 0292999-00001-00
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Prudential Jennison Global Infrastructure Fund
SEMIANNUAL REPORT | APRIL 30, 2016 |
To enroll in e-delivery, go to prudentialfunds.com/edelivery
| ![]() |
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, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.
Mutual funds are distributed by Prudential Investment Management Services LLC, member SIPC. Jennison Associates LLC is a registered investment adviser. Both are Prudential Financial companies. © 2016 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at prudentialfunds.com |
Letter from the President
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, 2016.
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
June 15, 2016
Prudential Jennison Global Infrastructure Fund | 3 |
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 4/30/16 | ||||||
Six Months (%) | One Year (%) | Since Inception (%) | ||||
Class A | 0.79 | –10.43 | 17.94 (9/25/13) | |||
Class C | 0.45 | –11.06 | 15.60 (9/25/13) | |||
Class Z | 0.94 | –10.21 | 18.57 (9/25/13) | |||
S&P Global Infrastructure Index | 3.33 | –5.73 | 13.97 | |||
S&P 500 Index | 0.43 | 1.21 | 29.55 | |||
Lipper Global Infrastructure Funds Average | 2.37 | –6.29 | 14.45 | |||
Average Annual Total Returns (With Sales Charges) as of 3/31/16 | ||||||
One Year (%) | Since Inception (%) | |||||
Class A | –12.95 | 3.64 (9/25/13) | ||||
Class C | –9.49 | 5.19 (9/25/13) | ||||
Class Z | –7.72 | 6.22 (9/25/13) | ||||
S&P Global Infrastructure Index | –3.82 | 4.42 | ||||
S&P 500 Index | 1.78 | 10.74 | ||||
Lipper Global Infrastructure Funds Average | –4.96 | 4.52 |
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 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 over 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 | 5 |
Your Fund’s Performance (continued)
Five Largest Holdings expressed as a percentage of net assets as of 4/30/16 (%) | ||||
NextEra Energy, Inc., Electric Utilities | 4.3 | |||
PG&E Corp., Electric Utilities | 4.1 | |||
Sempra Energy, Multi-Utilities | 3.4 | |||
Sydney Airport, Transportation Infrastructure | 3.3 | |||
Atlantia SpA, Transportation Infrastructure | 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 4/30/16 (%) | ||||
Oil, Gas & Consumable Fuels | 19.8 | |||
Transportation Infrastructure | 19.5 | |||
Electric Utilities | 17.3 | |||
Real Estate Investment Trusts (REITs) | 9.5 | |||
Multi-Utilities | 7.4 |
Industry weightings reflect only long-term investments and are subject to change.
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Fees and Expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution, and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on November 1, 2015, at the beginning of the period, and held through the six-month period ended April 30, 2016. 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 the additional fees that were charged to your
Prudential Jennison Global Infrastructure Fund | 7 |
Fees and Expenses (continued)
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, 2015 | Ending Account Value April 30, 2016 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,007.90 | 1.50 | % | $ | 7.49 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.40 | 1.50 | % | $ | 7.52 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,004.50 | 2.25 | % | $ | 11.21 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.67 | 2.25 | % | $ | 11.26 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,009.40 | 1.25 | % | $ | 6.25 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.65 | 1.25 | % | $ | 6.27 |
*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 182 days in the six-month period ended April 30, 2016, and divided by the 366 days in the Fund’s fiscal year ending October 31, 2016 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.
The Fund’s annualized expense ratios for the six-month period ended April 30, 2016, are as follows:
Class | Gross Operating Expenses (%) | Net Operating Expenses (%) | ||
A | 1.79 | 1.50 | ||
C | 2.49 | 2.25 | ||
Z | 1.49 | 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.
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Portfolio of Investments (unaudited)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
LONG-TERM INVESTMENTS 98.9% | ||||||||
COMMON STOCKS | ||||||||
Australia 6.4% | ||||||||
Sydney Airport | 403,231 | $ | 2,079,091 | |||||
Transurban Group | 211,278 | 1,853,920 | ||||||
Transurban Group, 144A | 7,675 | 67,347 | ||||||
|
| |||||||
4,000,358 | ||||||||
Canada 8.1% | ||||||||
Enbridge, Inc. (NYSE) | 21,028 | 873,503 | ||||||
Enbridge, Inc. (TSX) | 21,238 | 882,223 | ||||||
Keyera Corp. | 15,808 | 509,127 | ||||||
Pembina Pipeline Corp. | 37,324 | 1,119,347 | ||||||
Transcanada Corp. (NYSE) | 16,072 | 666,827 | ||||||
Transcanada Corp. (TSX) | 15,445 | 641,336 | ||||||
Transcanada Corp., Sub. Receipt | 9,648 | 388,165 | ||||||
|
| |||||||
5,080,528 | ||||||||
France 7.3% | ||||||||
Aeroports de Paris | 10,635 | 1,338,627 | ||||||
Eiffage SA | 19,521 | 1,552,950 | ||||||
Groupe Eurotunnel SE | 79,934 | 1,020,581 | ||||||
Veolia Environnement SA | 25,810 | 634,040 | ||||||
|
| |||||||
4,546,198 | ||||||||
Hong Kong 2.3% | ||||||||
Guangdong Investment Ltd. | 374,933 | 529,428 | ||||||
HKBN Ltd. | 722,500 | 888,445 | ||||||
|
| |||||||
1,417,873 | ||||||||
Italy 8.0% | ||||||||
Atlantia SpA | 71,746 | 1,999,894 | ||||||
Enel SpA | 216,989 | 986,182 | ||||||
Infrastrutture Wireless Italiane SpA* | 104,280 | 535,445 | ||||||
Infrastrutture Wireless Italiane SpA, 144A* | 54,971 | 282,259 | ||||||
Snam SpA | 201,930 | 1,234,888 | ||||||
|
| |||||||
5,038,668 | ||||||||
Japan 2.8% | ||||||||
East Japan Railway Co. | 9,596 | 844,218 | ||||||
Nippon Prologis REIT, Inc. | 326 | 781,695 | ||||||
Nippon Prologis REIT, Inc., 144A | 52 | 124,688 | ||||||
|
| |||||||
1,750,601 |
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 9 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
Mexico 4.7% | ||||||||
Grupo Aeroportuario del Pacifico SAB de CV (Class B Stock) | 132,771 | $ | 1,253,652 | |||||
Infraestructura Energetica Nova SAB de CV | 169,749 | 662,138 | ||||||
Promotora y Operadora de Infraestructura SAB de CV | 78,782 | 998,750 | ||||||
|
| |||||||
2,914,540 | ||||||||
Spain 5.2% | ||||||||
Abengoa Yield PLC | 39,790 | 717,414 | ||||||
Cellnex Telecom SAU | 35,902 | 593,336 | ||||||
Ferrovial SA | 89,624 | 1,933,654 | ||||||
|
| |||||||
3,244,404 | ||||||||
Switzerland 2.5% | ||||||||
Flughafen Zuerich AG | 1,732 | 1,591,130 | ||||||
United States 51.6% | ||||||||
American Electric Power Co., Inc. | 23,814 | 1,512,189 | ||||||
American Tower Corp., REIT | 11,805 | 1,238,108 | ||||||
American Water Works Co., Inc. | 19,803 | 1,440,866 | ||||||
Atmos Energy Corp. | 21,525 | 1,561,639 | ||||||
Charter Communications, Inc. (Class A Stock)* | 3,092 | 656,246 | ||||||
Cheniere Energy Partners LP Holdings LLC | 40,827 | 795,310 | ||||||
Comcast Corp. (Class A Stock) | 9,708 | 589,858 | ||||||
Crown Castle International Corp., REIT | 14,239 | 1,237,084 | ||||||
CyrusOne, Inc., REIT | 37,278 | 1,645,078 | ||||||
Digital Realty Trust, Inc., REIT | 10,765 | 947,105 | ||||||
Dominion Resources, Inc. | 12,084 | 863,644 | ||||||
Edison International | 26,922 | 1,903,655 | ||||||
Energy Transfer Partners LP, MLP | 36,859 | 1,305,914 | ||||||
Enterprise Products Partners LP, MLP | 63,267 | 1,688,596 | ||||||
EQT GP Holdings LP, MLP | 15,845 | 419,259 | ||||||
Exelon Corp. | 29,427 | 1,032,594 | ||||||
NextEra Energy, Inc. | 23,101 | 2,716,216 | ||||||
NiSource, Inc. | 44,423 | 1,008,846 | ||||||
Norfolk Southern Corp. | 11,598 | 1,045,096 | ||||||
NRG Yield, Inc. (Class A Stock) | 9,857 | 149,136 | ||||||
ONEOK Partners LP, MLP | 25,479 | 903,485 | ||||||
PG&E Corp. | 44,027 | 2,562,371 | ||||||
Plains All American Pipeline LP, MLP | 36,653 | 840,820 | ||||||
SemGroup Corp. (Class A Stock) | 14,949 | 458,336 | ||||||
Sempra Energy | 20,646 | 2,133,764 | ||||||
Targa Resources Corp. | 15,612 | 631,662 | ||||||
Time Warner Cable, Inc. | 2,911 | 617,452 |
See Notes to Financial Statements.
10 |
Description | Shares | Value (Note 1) | ||||||
COMMON STOCKS (Continued) | ||||||||
United States (cont’d.) | ||||||||
Williams Partners LP, MLP | 10,829 | $ | 327,361 | |||||
|
| |||||||
32,231,690 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 61,815,990 | |||||||
|
| |||||||
SHORT-TERM INVESTMENT 1.2% | ||||||||
AFFILIATED MUTUAL FUND | ||||||||
Prudential Investment Portfolios 2 - | 718,173 | 718,173 | ||||||
|
| |||||||
TOTAL INVESTMENTS 100.1% | 62,534,163 | |||||||
Liabilities in excess of other assets (0.1)% | (44,454 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 62,489,709 | ||||||
|
|
The following abbreviations are used in the semiannual report:
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.
MLP—Master Limited Partnership
NYSE—New York Stock Exchange
OTC—Over-the-counter
REIT—Real Estate Investment Trust
TSX—Toronto Stock Exchange
* | 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 Ultra Short Bond 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.
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 11 |
Portfolio of Investments (unaudited) (continued)
as of April 30, 2016
The following is a summary of the inputs used as of April 30, 2016 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Australia | $ | — | $ | 4,000,358 | $ | — | ||||||
Canada | 5,080,528 | — | — | |||||||||
France | — | 4,546,198 | — | |||||||||
Hong Kong | — | 1,417,873 | — | |||||||||
Italy | — | 5,038,668 | — | |||||||||
Japan | — | 1,750,601 | — | |||||||||
Mexico | 2,914,540 | — | — | |||||||||
Spain | 717,414 | 2,526,990 | — | |||||||||
Switzerland | — | 1,591,130 | — | |||||||||
United States | 32,231,690 | — | — | |||||||||
Affiliated Mutual Fund | 718,173 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 41,662,345 | $ | 20,871,818 | $ | — | ||||||
|
|
|
|
|
|
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2016 were as follows:
Oil, Gas & Consumable Fuels | 19.8 | % | ||
Transportation Infrastructure | 19.5 | |||
Electric Utilities | 17.3 | |||
Real Estate Investment Trusts (REITs) | 9.5 | |||
Multi-Utilities | 7.4 | |||
Construction & Engineering | 5.6 | |||
Gas Utilities | 5.6 | |||
Diversified Telecommunication Services | 3.6 | |||
Water Utilities | 3.2 | |||
Road & Rail | 3.1 | |||
Media | 3.0 | |||
Independent Power & Renewable Electricity Producers | 1.3 | |||
Affiliated Mutual Fund | 1.2 | |||
|
| |||
100.1 | ||||
Liabilities in excess of other assets | (0.1 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
12 |
PRUDENTIAL INVESTMENTS, A PGIM BUSINESS | MUTUAL FUNDS
Statement of Assets and Liabilities, Statement of Operations and Statement of Changes in Net Assets (unaudited)
SEMIANNUAL REPORT | APRIL 30, 2016 |
Prudential Jennison Global Infrastructure Fund
Statement of Assets & Liabilities (unaudited)
as of April 30, 2016
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $55,067,169) | $ | 61,815,990 | ||
Affiliated investments (cost $718,173) | 718,173 | |||
Cash | 603 | |||
Receivable for Series shares sold | 180,078 | |||
Receivable for investments sold | 158,371 | |||
Dividends receivable | 112,545 | |||
Tax reclaim receivable | 24,117 | |||
Prepaid expenses | 307 | |||
|
| |||
Total assets | 63,010,184 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 288,654 | |||
Payable for Series shares reacquired | 114,607 | |||
Accrued expenses and other liabilities | 69,629 | |||
Management fee payable | 37,346 | |||
Distribution fee payable | 8,071 | |||
Affiliated transfer agent fee payable | 2,168 | |||
|
| |||
Total liabilities | 520,475 | |||
|
| |||
Net Assets | $ | 62,489,709 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 54,362 | ||
Paid-in capital in excess of par | 66,847,911 | |||
|
| |||
66,902,273 | ||||
Distributions in excess of net investment income | (408,690 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (10,751,102 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 6,747,228 | |||
|
| |||
Net assets, April 30, 2016 | $ | 62,489,709 | ||
|
|
See Notes to Financial Statements.
14 |
Class A | ||||
Net asset value and redemption price per share, | $ | 11.50 | ||
Maximum sales charge (5.50% of offering price) | 0.67 | |||
|
| |||
Maximum offering price to public | $ | 12.17 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | $ | 11.42 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | $ | 11.50 | ||
|
|
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 15 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2016
Net Investment Income | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $28,812) | $ | 485,080 | ||
Affiliated dividend income | 2,097 | |||
|
| |||
Total income | 487,177 | |||
|
| |||
Expenses | ||||
Management fee | 322,728 | |||
Distribution fee—Class A | 26,801 | |||
Distribution fee—Class C | 28,892 | |||
Custodian and accounting fees | 43,000 | |||
Transfer agent’s fees and expenses (including affiliated expense of $7,000) | 37,000 | |||
Registration fees | 24,000 | |||
Shareholders’ reports | 19,000 | |||
Audit fee | 12,000 | |||
Legal fees and expenses | 9,000 | |||
Directors’ fees | 6,000 | |||
Insurance expenses | 1,000 | |||
Loan interest expense | 717 | |||
Miscellaneous | 8,161 | |||
|
| |||
Total expenses | 538,299 | |||
Less: Management fee waiver and/or expense reimbursement | (78,437 | ) | ||
Distribution fee waiver—Class A | (4,467 | ) | ||
|
| |||
Net expenses | 455,395 | |||
|
| |||
Net investment income | 31,782 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | �� | (5,970,264 | ) | |
Foreign currency transactions | 1,140 | |||
|
| |||
(5,969,124 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 5,223,776 | |||
Foreign currencies | 3,151 | |||
|
| |||
5,226,927 | ||||
|
| |||
Net loss on investment and foreign currency transactions | (742,197 | ) | ||
|
| |||
Net Decrease In Net Assets Resulting From Operations | $ | (710,415 | ) | |
|
|
See Notes to Financial Statements.
16 |
Statement of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2016 | Year Ended October 31, 2015 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 31,782 | $ | 420,933 | ||||
Net realized loss on investment and foreign currency transactions | (5,969,124 | ) | (4,609,595 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 5,226,927 | (2,374,141 | ) | |||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (710,415 | ) | (6,562,803 | ) | ||||
|
|
|
| |||||
Dividends and Distributions (Note 1) | ||||||||
Dividends from net investment income | ||||||||
Class A | (114,585 | ) | (99,616 | ) | ||||
Class C | (26,647 | ) | (703 | ) | ||||
Class Z | (299,240 | ) | (285,862 | ) | ||||
|
|
|
| |||||
(440,472 | ) | (386,181 | ) | |||||
|
|
|
| |||||
Tax return of capital | ||||||||
Class A | — | (43,879 | ) | |||||
Class C | — | (309 | ) | |||||
Class Z | — | (125,915 | ) | |||||
|
|
|
| |||||
— | (170,103 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 6,658,777 | 56,052,307 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 417,885 | 534,566 | ||||||
Cost of shares reacquired | (19,868,668 | ) | (24,178,576 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | (12,792,006 | ) | 32,408,297 | |||||
|
|
|
| |||||
Total increase (decrease) | (13,942,893 | ) | 25,289,210 | |||||
Net Assets: | ||||||||
Beginning of period | 76,432,602 | 51,143,392 | ||||||
|
|
|
| |||||
End of period | $ | 62,489,709 | $ | 76,432,602 | ||||
|
|
|
|
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure 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 QMA 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 Fund 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 (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. 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.
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.
18 |
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.
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. The models generate an evaluated adjustment factor for each security, which can be applied to the local closing price to adjust it for post closing market movements. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price to the extent that the valuation meets the established confidence level for each security. Such confidence level is a measure of the probability of a relationship between a given equity security and the factors used in the models. 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.
Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.
Investments in open-end, non-exchange-traded mutual funds are generally valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally 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.
Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.
OTC 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 (unaudited) (continued)
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are generally 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 period, the Series does not generally 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, holding period realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gains (losses) on foreign currency transactions.
Net realized gains (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 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 (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.
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.
MLPs: The Series invests in MLPs. Distributions received from the Series’ investments in MLPs generally are comprised of income and return of capital. The Series records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on historical information available from each MLP and other industry sources. These estimates may subsequently be revised based on information received from MLPs after their respective tax reporting periods have concluded.
REITs: The Series invests in REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions
Prudential Jennison Global Infrastructure Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
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.
Securities Lending: The Series may lend its portfolio securities to banks and brokerdealers. 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 ultra short-term bond 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 borrower receives all interest and dividends and such payments are passed back to the lender in amounts equivalent thereto. The Series also continues to recognize any unrealized gain (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 (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-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 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 may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income (loss), accumulated net realized gain (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
22 |
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 1.00% of the average daily net assets of the Series. The effective management fee rate, net of waivers and/or expense reimbursement, was .76%.
PI has contractually agreed, through February 28, 2017, 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’ 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.
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, 2016, 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 $9,731 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2016. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
Prudential Jennison Global Infrastructure Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
PIMS has advised the Series that for the six months ended April 30, 2016, it has received $704 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 may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.
The Series invests in the Prudential Core Ultra Short Bond Fund, (formerly known as 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, 2016, aggregated $24,201,468 and $35,292,621, respectively.
Note 5. Tax Information
In order to present distributions in excess of net investment income, accumulated net realized loss on investment and foreign currencies and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments will be made at the end of each fiscal year end. These tax adjustments include but are not limited to certain transactions involving foreign securities and currencies, investment in passive foreign investment companies and investment in partnerships.
24 |
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2016 were as follows:
Tax Basis | $ | 56,228,332 | ||
|
| |||
Appreciation | 7,260,734 | |||
Depreciation | (954,903 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 6,305,831 | ||
|
|
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, 2015 of approximately $4,339,000 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.
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, 2016, Prudential, through its affiliates, owned 515,528 Class Z shares of the Series.
Prudential Jennison Global Infrastructure Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 95,526 | $ | 1,030,951 | |||||
Shares issued in reinvestment of dividends and distributions | 9,037 | 95,880 | ||||||
Shares reacquired† | (588,892 | ) | (6,319,039 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (484,329 | ) | (5,192,208 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (641 | ) | (7,028 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (484,970 | ) | $ | (5,199,236 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 1,595,465 | $ | 19,553,250 | |||||
Shares issued in reinvestment of dividends, distributions and tax return of capital | 10,216 | 122,173 | ||||||
Shares reacquired | (863,175 | ) | (10,381,343 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 742,506 | 9,294,080 | ||||||
Shares reacquired upon conversion into other share class(es) | (24,630 | ) | (295,257 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 717,876 | $ | 8,998,823 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 29,795 | $ | 322,682 | |||||
Shares issued in reinvestment of dividends and distributions | 2,387 | 25,211 | ||||||
Shares reacquired† | (121,063 | ) | (1,289,187 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (88,881 | ) | $ | (941,294 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 425,583 | $ | 5,219,036 | |||||
Shares issued in reinvestment of dividends, distributions and tax return of capital | 83 | 957 | ||||||
Shares reacquired | (137,452 | ) | (1,634,771 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 288,214 | $ | 3,585,222 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2016: | ||||||||
Shares sold | 488,670 | $ | 5,305,144 | |||||
Shares issued in reinvestment of dividends and distributions | 27,999 | 296,794 | ||||||
Shares reacquired | (1,170,576 | ) | (12,260,442 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (653,907 | ) | (6,658,504 | ) | ||||
Shares issued upon conversion from other share class(es) | 641 | 7,028 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (653,266 | ) | $ | (6,651,476 | ) | |||
|
|
|
| |||||
Year ended October 31, 2015: | ||||||||
Shares sold | 2,545,641 | $ | 31,280,021 | |||||
Shares issued in reinvestment of dividends, distributions and tax return of capital | 34,390 | 411,436 | ||||||
Shares reacquired | (1,000,815 | ) | (12,162,462 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 1,579,216 | 19,528,995 | ||||||
Shares issued upon conversion from other share class(es) | 24,614 | 295,257 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,603,830 | $ | 19,824,252 | |||||
|
|
|
|
† | Includes affiliated redemption of 1,019 shares with a value of $11,243 for Class A shares and 1,007 shares with a value of $11,065 for Class C shares. |
26 |
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 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% of the unused portion of the SCA. Interest on any borrowings under the SCA is paid at contracted market rates. The Series’ portion of the commitment fee for the unused amount is accrued daily and paid quarterly.
The Fund utilized the SCA during the six months ended April 30, 2016. The average daily balance for the 13 days that the Fund had loans outstanding during the period was $1,181,923 borrowed at a weighted average interest rate of 1.68%. The maximum loan balance outstanding during the period was $2,614,000. At April 30, 2016, the Fund did not have an outstanding loan balance.
Note 8. New Accounting Pronouncements
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. Management has evaluated the implications of ASU No. 2015-07 and it has been determined that there is no impact on the financial statement disclosures.
In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.
Prudential Jennison Global Infrastructure Fund | 27 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.48 | $12.62 | $10.42 | $10.00 | ||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income | - | (g) | .06 | .09 | - | (g) | ||||||||||||||||
Net realized and unrealized gain (loss) on investments | .09 | (1.12 | ) | 2.26 | .42 | |||||||||||||||||
Total from investment operations | .09 | (1.06 | ) | 2.35 | .42 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (.07 | ) | (.05 | ) | (.14 | ) | - | |||||||||||||||
Tax return of capital | - | (.03 | ) | - | - | |||||||||||||||||
Distributions from net realized gains | - | - | (.01 | ) | - | |||||||||||||||||
Total dividends and distributions | (.07 | ) | (.08 | ) | (.15 | ) | - | |||||||||||||||
Net Asset Value, end of period | $11.50 | $11.48 | $12.62 | $10.42 | ||||||||||||||||||
Total Return(a): | .79% | (8.46)% | 22.67% | 4.20% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of period (000) | $16,819 | $22,353 | $15,521 | $21 | ||||||||||||||||||
Average net assets (000) | $17,965 | $22,695 | $4,906 | $17 | ||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.50% | (e) | 1.50% | 1.50% | 1.50% | (e) | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.79% | (e) | 1.78% | 1.95% | 25.87% | (e) | ||||||||||||||||
Net investment income | .02% | (e) | .52% | .73% | .28% | (e) | ||||||||||||||||
Portfolio turnover rate | 37% | (f) | 94% | 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(b) | Commencement of operations. |
(c) | Calculated based on the average shares outstanding during the period. |
(d) | Does not include expenses of the underlying portfolio in which the Fund invests. |
(e) | Annualized. |
(f) | Not Annualized. |
(g) | Less than $.005. |
See Notes to Financial Statements.
28 |
Class C Shares | ||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.42 | $12.58 | $10.41 | $10.00 | ||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (.04 | ) | (.03 | ) | .01 | .01 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments | .09 | (1.13 | ) | 2.25 | .40 | |||||||||||||||||
Total from investment operations | .05 | (1.16 | ) | 2.26 | .41 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (.05 | ) | - | (g) | (.08 | ) | - | |||||||||||||||
Tax return of capital | - | - | (g) | - | - | |||||||||||||||||
Distributions from net realized gains | - | - | (.01 | ) | - | |||||||||||||||||
Total dividends and distributions | (.05 | ) | - | (.09 | ) | - | ||||||||||||||||
Net Asset Value, end of period | $11.42 | $11.42 | $12.58 | $10.41 | ||||||||||||||||||
Total Return(a): | .45% | (9.21)% | 21.76% | 4.10% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of period (000) | $5,759 | $6,775 | $3,835 | $40 | ||||||||||||||||||
Average net assets (000) | $5,810 | $6,353 | $1,104 | $17 | ||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.25% | (e) | 2.25% | 2.25% | 2.25% | (e) | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.49% | (e) | 2.48% | 2.70% | 38.05% | (e) | ||||||||||||||||
Net investment income (loss) | (.77) | (e) | (.22)% | .12% | .52% | (e) | ||||||||||||||||
Portfolio turnover rate | 37% | (f) | 94% | 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(b) | Commencement of operations. |
(c) | Calculated based on the average shares outstanding during the period. |
(d) | Does not include expenses of the underlying portfolio in which the Fund invests. |
(e) | Annualized. |
(f) | Not Annualized. |
(g) | Less than $.005. |
See Notes to Financial Statements.
Prudential Jennison Global Infrastructure Fund | 29 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.47 | $12.62 | $10.42 | $10.00 | ||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income | .01 | .09 | .22 | .01 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | .09 | (1.13 | ) | 2.15 | .41 | |||||||||||||||||
Total from investment operations | .10 | (1.04 | ) | 2.37 | .42 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends from net investment income | (.07 | ) | (.08 | ) | (.16 | ) | - | |||||||||||||||
Tax return of capital | - | (.03 | ) | - | - | |||||||||||||||||
Distributions from net realized gains | - | - | (.01 | ) | - | |||||||||||||||||
Total dividends and distributions | (.07 | ) | (.11 | ) | (.17 | ) | - | |||||||||||||||
Net Asset Value, end of period | $11.50 | $11.47 | $12.62 | $10.42 | ||||||||||||||||||
Total Return(a): | .94% | (8.28)% | 22.91% | 4.20% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||
Net assets, end of period (000) | $39,911 | $47,305 | $31,788 | $5,247 | ||||||||||||||||||
Average net assets (000) | $41,133 | $42,210 | $20,117 | $5,113 | ||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.25% | (e) | 1.25% | 1.25% | 1.25% | (e) | ||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.49% | (e) | 1.48% | 2.08% | 22.65% | (e) | ||||||||||||||||
Net investment income | .26% | (e) | .75% | 1.79% | .56% | (e) | ||||||||||||||||
Portfolio turnover rate | 37% | (f) | 94% | 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, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(b) | Commencement of operations. |
(c) | Calculated based on the average shares outstanding during the period. |
(d) | Does not include expenses of the underlying portfolio in which the Fund invests. |
(e) | Annualized. |
(f) | Not Annualized. |
See Notes to Financial Statements.
30 |
n MAIL | n TELEPHONE | n WEBSITE | ||
655 Broad 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 • Stuart S. Parker • 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 | 655 Broad Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
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, 655 Broad Street, 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 no sooner than 15 days after the end of the 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 0293004-00001-00
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 17, 2016 |
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 17, 2016 | |
By: | /s/ M. Sadiq Peshimam | |
M. Sadiq Peshimam | ||
Treasurer and Principal Financial and Accounting Officer | ||
Date: | June 17, 2016 |