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: | 10/31/2018 | |
Date of reporting period: | 4/30/2018 |
Item 1 – Reports to Stockholders
PGIM QMA INTERNATIONAL EQUITY FUND
(Formerly known as Prudential QMA International Equity Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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PGIM QMA International Equity Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM QMA International Equity Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors
participate in opportunities across global markets while meeting their toughest investment
challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM QMA International Equity Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM QMA International Equity Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||||||
Six Months* (%) | One Year (%) | Five Years (%) | Ten Years (%) | Since Inception (%) | ||||||
Class A | 2.01 | 9.32 | 3.82 | 0.71 | — | |||||
Class B | 1.41 | 9.52 | 4.05 | 0.55 | — | |||||
Class C | 1.67 | 13.82 | 4.28 | 0.58 | — | |||||
Class Z | 2.15 | 15.87 | 5.34 | 1.56 | — | |||||
Class R6** | 2.31 | 16.35 | N/A | N/A | 21.76 (12/28/16) | |||||
MSCI All Country World Ex-US Index | ||||||||||
3.47 | 15.91 | 5.46 | 2.26 | — | ||||||
Lipper International Multi-Cap Core Funds Average | ||||||||||
2.50 | 13.78 | 5.89 | 2.46 | — |
Source: PGIM Investments LLC and Lipper Inc.
*Not annualized
**Formerly known as Class Q shares.
Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the class’ inception date.
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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 | Class R6** | ||||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | None | |||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 5.00% (Yr.1) 4.00% (Yr.2) 3.00% (Yr.3) 2.00% (Yr.4) 1.00% (Yr.5) 1.00% (Yr.6) 0.00% (Yr.7) | 1.00% 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) | 0.30% | 1.00% | 1.00% | None | 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.
**Formerly known as Class Q shares.
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 average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 20.12%.
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 universe 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. The average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class R6 shares is 18.69%.
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 of a mutual fund, but not sales charges or taxes.
PGIM QMA International Equity Fund | 7 |
Your Fund’s Performance (continued)
Presentation of Fund Holdings
Five Largest Holdings expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Toyota Motor Corp., Automobiles | 1.3 | |||
Roche Holding AG, Pharmaceuticals | 1.3 | |||
Novartis AG, Pharmaceuticals | 1.3 | |||
Allianz SE, Insurance | 1.2 | |||
Toronto-Dominion Bank (The), Banks | 1.1 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Banks | 15.2 | |||
Oil, Gas & Consumable Fuels | 7.3 | |||
Pharmaceuticals | 5.7 | |||
Metals & Mining | 5.6 | |||
Insurance | 4.2 |
Industry weightings reflect only long-term investments and are subject to change.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the
PGIM QMA International Equity Fund | 9 |
Fees and Expenses (continued)
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.
PGIM QMA International Equity Fund | Beginning Account Value November 1, 2017 | Ending Account April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,020.10 | 1.35 | % | $ | 6.76 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.10 | 1.35 | % | $ | 6.76 | ||||||||||
Class B | Actual | $ | 1,000.00 | $ | 1,014.10 | 2.53 | % | $ | 12.63 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,012.25 | 2.53 | % | $ | 12.62 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,016.70 | 2.11 | % | $ | 10.55 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,014.33 | 2.11 | % | $ | 10.54 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,021.50 | 1.00 | % | $ | 5.01 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.84 | 1.00 | % | $ | 5.01 | ||||||||||
Class R6** | Actual | $ | 1,000.00 | $ | 1,023.10 | 0.78 | % | $ | 3.91 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.93 | 0.78 | % | $ | 3.91 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**Formerly known as Class Q shares.
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Schedule of Investments (unaudited)
as of April 30, 2018
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.2% |
| |||||||
COMMON STOCKS 96.3% |
| |||||||
Australia 3.9% |
| |||||||
Aristocrat Leisure Ltd. | 96,093 | $ | 1,927,675 | |||||
BHP Billiton Ltd. | 41,282 | 963,075 | ||||||
BHP Billiton PLC | 27,058 | 576,946 | ||||||
CIMIC Group Ltd. | 31,900 | 1,085,515 | ||||||
CSL Ltd. | 16,626 | 2,129,602 | ||||||
Insurance Australia Group Ltd. | 29,591 | 175,176 | ||||||
Macquarie Group Ltd. | 24,094 | 1,962,167 | ||||||
Metcash Ltd. | 393,032 | 1,060,833 | ||||||
Wesfarmers Ltd. | 30,107 | 990,505 | ||||||
|
| |||||||
10,871,494 | ||||||||
Austria 1.2% |
| |||||||
Austria Technologie & Systemtechnik AG | 23,904 | 590,252 | ||||||
OMV AG | 21,582 | 1,336,681 | ||||||
voestalpine AG | 25,850 | 1,363,773 | ||||||
|
| |||||||
3,290,706 | ||||||||
Belgium 0.6% |
| |||||||
KBC Group NV | 19,811 | 1,722,366 | ||||||
Brazil 1.3% |
| |||||||
Banco Bradesco SA | 13,000 | 118,897 | ||||||
Banco Santander Brasil SA | 161,600 | 1,759,370 | ||||||
Engie Brasil Energia SA | 120,900 | 1,285,546 | ||||||
Petroleo Brasileiro SA* | 40,600 | 286,722 | ||||||
SLC Agricola SA | 20,000 | 256,280 | ||||||
|
| |||||||
3,706,815 | ||||||||
Canada 5.2% |
| |||||||
Bank of Montreal | 8,400 | 637,941 | ||||||
BRP, Inc. | 24,200 | 978,970 | ||||||
Canadian Imperial Bank of Commerce | 20,500 | 1,785,517 | ||||||
CGI Group, Inc. (Class A Stock)* | 17,300 | 1,002,469 | ||||||
Genworth MI Canada, Inc.(a) | 10,100 | 326,453 | ||||||
Magna International, Inc. | 4,300 | 253,958 | ||||||
Royal Bank of Canada | 34,900 | 2,654,025 | ||||||
Shopify, Inc. (Class A Stock)* | 1,100 | 147,366 | ||||||
Sun Life Financial, Inc. | 28,800 | 1,188,831 | ||||||
Suncor Energy, Inc. | 6,300 | 240,921 |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Canada (cont’d.) | ||||||||
Teck Resources Ltd. (Class B Stock) | 66,400 | $ | 1,666,788 | |||||
Toronto-Dominion Bank (The) | 56,300 | 3,161,956 | ||||||
TransCanada Corp. | 11,200 | 474,885 | ||||||
|
| |||||||
14,520,080 | ||||||||
Chile 0.0% |
| |||||||
Enel Chile SA | 333,925 | 41,577 | ||||||
China 7.5% |
| |||||||
Agricultural Bank of China Ltd. (Class H Stock) | 3,109,000 | 1,752,893 | ||||||
Alibaba Group Holding Ltd., ADR*(a) | 6,600 | 1,178,364 | ||||||
China Construction Bank Corp. (Class H Stock) | 2,742,000 | 2,872,681 | ||||||
China Resources Land Ltd. | 36,000 | 135,206 | ||||||
China Shenhua Energy Co. Ltd. (Class H Shares) | 44,500 | 109,152 | ||||||
China Telecom Corp. Ltd. (Class H Stock) | 3,028,000 | 1,467,768 | ||||||
Citic Ltd. | 137,000 | 208,925 | ||||||
CNOOC Ltd. (Class H Stock) | 228,000 | 385,711 | ||||||
Country Garden Holdings Co. Ltd. | 832,000 | 1,696,503 | ||||||
Future Land Development Holdings Ltd. | 388,000 | 321,290 | ||||||
Geely Automobile Holdings Ltd. | 219,000 | 575,977 | ||||||
Industrial & Commercial Bank of China Ltd. (Class H Stock) | 2,758,000 | 2,421,198 | ||||||
Lonking Holdings Ltd. | 1,556,000 | 707,080 | ||||||
Ping An Insurance Group Co. of China Ltd. (Class H Stock) | 65,000 | 635,141 | ||||||
Shanghai Industrial Holdings Ltd. | 40,000 | 104,892 | ||||||
Sino-Ocean Group Holdings Ltd. | 1,872,000 | 1,299,846 | ||||||
Sinotruk Hong Kong Ltd. | 722,000 | 845,913 | ||||||
Soho China Ltd. | 263,000 | 135,047 | ||||||
Tencent Holdings Ltd. | 42,600 | 2,094,341 | ||||||
Weibo Corp., ADR* | 900 | 103,068 | ||||||
Weichai Power Co. Ltd. (Class H Stock) | 902,000 | 1,044,198 | ||||||
West China Cement Ltd.* | 1,296,000 | 262,862 | ||||||
Yanzhou Coal Mining Co. Ltd. | 86,000 | 107,614 | ||||||
Yuexiu Property Co. Ltd. | 1,350,000 | 303,725 | ||||||
YY, Inc., ADR* | 1,100 | 106,029 | ||||||
|
| |||||||
20,875,424 | ||||||||
Colombia 0.0% |
| |||||||
Ecopetrol SA | 126,571 | 139,235 | ||||||
Denmark 1.2% |
| |||||||
Danske Bank A/S | 6,810 | 237,003 | ||||||
Novo Nordisk A/S (Class B Stock) | 24,004 | 1,128,859 |
See Notes to Financial Statements.
12 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Denmark (cont’d.) | ||||||||
Orsted A/S, 144A | 5,319 | $ | 350,179 | |||||
Scandinavian Tobacco Group A/S, 144A | 49,524 | 827,204 | ||||||
Topdanmark A/S* | 20,292 | 954,326 | ||||||
|
| |||||||
3,497,571 | ||||||||
Finland 0.2% |
| |||||||
Finnair OYJ | 7,774 | 105,965 | ||||||
UPM-Kymmene OYJ | 13,199 | 470,961 | ||||||
|
| |||||||
576,926 | ||||||||
France 6.2% |
| |||||||
AXA SA | 86,293 | 2,467,860 | ||||||
Derichebourg SA | 105,743 | 935,833 | ||||||
Edenred | 3,116 | 107,348 | ||||||
Eiffage SA | 1,013 | 120,579 | ||||||
Faurecia SA | 17,203 | 1,404,776 | ||||||
Kering SA | 370 | 214,044 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 7,755 | 2,698,830 | ||||||
Natixis SA | 161,323 | 1,324,935 | ||||||
Orange SA | 101,146 | 1,838,794 | ||||||
Sanofi | 30,089 | 2,378,903 | ||||||
Television Francaise 1 | 22,088 | 276,129 | ||||||
Total SA | 24,974 | 1,569,657 | ||||||
Vinci SA | 20,238 | 2,023,467 | ||||||
|
| |||||||
17,361,155 | ||||||||
Germany 4.6% |
| |||||||
Allianz SE | 14,048 | 3,322,683 | ||||||
BASF SE | 13,654 | 1,420,608 | ||||||
Bayer AG | 22,070 | 2,637,794 | ||||||
Covestro AG, 144A | 12,330 | 1,120,362 | ||||||
CTS Eventim AG & Co. KGaA | 8,739 | 408,690 | ||||||
Deutsche Lufthansa AG | 48,733 | 1,416,434 | ||||||
E.ON SE | 75,702 | 828,918 | ||||||
Henkel AG & Co. KGaA | 1,391 | 165,589 | ||||||
Linde AG* | 2,350 | 520,608 | ||||||
Siemens Healthineers AG, 144A* | 3,161 | 123,239 | ||||||
Siltronic AG* | 5,730 | 917,525 | ||||||
|
| |||||||
12,882,450 |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Greece 0.5% | ||||||||
Hellenic Petroleum SA | 39,867 | $ | 405,643 | |||||
Motor Oil Hellas Corinth Refineries SA | 43,154 | 1,028,232 | ||||||
|
| |||||||
1,433,875 | ||||||||
Hong Kong 3.3% | ||||||||
Galaxy Entertainment Group Ltd. | 160,402 | 1,403,940 | ||||||
Haitong International Securities Group Ltd.(a) | 1,641,000 | 956,601 | ||||||
Hang Seng Bank Ltd. | 61,400 | 1,555,257 | ||||||
I-CABLE Communications Ltd.* | 62,085 | 1,321 | ||||||
Jardine Matheson Holdings Ltd. | 17,200 | 1,044,556 | ||||||
Kerry Properties Ltd. | 344,000 | 1,644,500 | ||||||
Kingboard Laminates Holdings Ltd. | 323,000 | 430,524 | ||||||
WH Group Ltd., 144A | 1,739,500 | 1,800,862 | ||||||
Wharf Holdings Ltd. (The) | 103,000 | 342,666 | ||||||
|
| |||||||
9,180,227 | ||||||||
Hungary 0.1% | ||||||||
Magyar Telekom Telecommunications PLC | 81,603 | 141,146 | ||||||
MOL Hungarian Oil & Gas PLC | 22,056 | 254,874 | ||||||
|
| |||||||
396,020 | ||||||||
India 1.4% | ||||||||
Infosys Ltd. | 66,384 | 1,189,754 | ||||||
Larsen & Toubro Infotech Ltd., 144A | 43,421 | 1,016,626 | ||||||
PC Jeweller Ltd. | 21,351 | 46,010 | ||||||
Tech Mahindra Ltd. | 153,143 | 1,532,140 | ||||||
|
| |||||||
3,784,530 | ||||||||
Israel 0.1% | ||||||||
Check Point Software Technologies Ltd.* | 1,700 | 164,067 | ||||||
Italy 2.0% | ||||||||
Enel SpA | 110,951 | 703,842 | ||||||
Intesa Sanpaolo SpA | 548,274 | 2,085,608 | ||||||
Mediobanca Banca di Credito Finanziario SpA | 135,978 | 1,647,714 | ||||||
Telecom Italia SpA*(a) | 1,140,083 | 1,124,699 | ||||||
|
| |||||||
5,561,863 | ||||||||
Japan 17.5% | ||||||||
Astellas Pharma, Inc. | 115,000 | 1,682,017 | ||||||
Canon, Inc. | 53,500 | 1,840,357 | ||||||
Central Japan Railway Co. | 5,300 | 1,062,038 |
See Notes to Financial Statements.
14 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Japan (cont’d.) | ||||||||
Daiwa House Industry Co. Ltd. | 46,300 | $ | 1,692,787 | |||||
Fast Retailing Co. Ltd. | 3,800 | 1,668,260 | ||||||
Hitachi Ltd. | 286,000 | 2,087,388 | ||||||
Honda Motor Co. Ltd. | 63,600 | 2,186,947 | ||||||
ITOCHU Corp. | 118,200 | 2,363,814 | ||||||
Japan Tobacco, Inc. | 44,200 | 1,188,149 | ||||||
JFE Holdings, Inc. | 69,900 | 1,434,512 | ||||||
JXTG Holdings, Inc. | 267,900 | 1,746,378 | ||||||
KDDI Corp. | 49,100 | 1,318,021 | ||||||
Kirin Holdings Co. Ltd. | 10,600 | 297,532 | ||||||
Komatsu Ltd. | 3,600 | 122,719 | ||||||
Marubeni Corp. | 69,400 | 521,163 | ||||||
MINEBEA MITSUMI, Inc. | 5,000 | 100,004 | ||||||
Mitsubishi Chemical Holdings Corp. | 187,500 | 1,773,675 | ||||||
Mitsubishi Corp. | 81,500 | 2,247,407 | ||||||
Mitsui & Co. Ltd. | 64,200 | 1,157,088 | ||||||
Nexon Co. Ltd.* | 96,000 | 1,396,934 | ||||||
Nippon Telegraph & Telephone Corp. | 46,284 | 2,196,416 | ||||||
Olympus Corp. | 9,300 | 346,802 | ||||||
ORIX Corp. | 125,400 | 2,199,372 | ||||||
Shin-Etsu Chemical Co. Ltd. | 5,600 | 561,959 | ||||||
Shionogi & Co. Ltd. | 3,800 | 195,288 | ||||||
Sony Corp. | 54,500 | 2,545,483 | ||||||
Sumitomo Chemical Co. Ltd. | 20,000 | 114,433 | ||||||
Sumitomo Corp. | 114,800 | 2,060,723 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 19,700 | 821,062 | ||||||
Suzuki Motor Corp. | 17,200 | 924,463 | ||||||
Taisei Corp. | 37,400 | 2,017,579 | ||||||
Tokyo Electron Ltd. | 10,500 | 2,016,557 | ||||||
Tosoh Corp. | 5,300 | 93,748 | ||||||
Toyota Motor Corp. | 55,833 | 3,661,104 | ||||||
Toyota Tsusho Corp. | 4,500 | 161,354 | ||||||
TS Tech Co. Ltd. | 22,500 | 910,341 | ||||||
|
| |||||||
48,713,874 | ||||||||
Luxembourg 0.6% | ||||||||
ArcelorMittal* | 53,000 | 1,796,362 | ||||||
Malaysia 1.1% | ||||||||
AirAsia Group Bhd | 1,591,000 | 1,554,277 | ||||||
Tenaga Nasional Bhd | 378,900 | 1,525,707 | ||||||
|
| |||||||
3,079,984 |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 15 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Mexico 0.9% | ||||||||
America Movil SAB de CV (Class L Stock) | 424,400 | $ | 392,584 | |||||
Grupo Financiero Banorte SAB de CV (Class O Stock) | 288,400 | 1,803,613 | ||||||
Wal-Mart de Mexico SAB de CV | 67,900 | 188,792 | ||||||
|
| |||||||
2,384,989 | ||||||||
Netherlands 3.1% | ||||||||
ABN AMRO Group NV, CVA, 144A | 45,981 | 1,425,926 | ||||||
BE Semiconductor Industries NV* | 9,464 | 654,086 | ||||||
Koninklijke Ahold Delhaize NV | 77,493 | 1,869,477 | ||||||
Philips Lighting NV, 144A | 25,244 | 767,716 | ||||||
Randstad NV | 1,647 | 106,006 | ||||||
Royal Dutch Shell PLC (Class A Stock) | 56,521 | 1,966,447 | ||||||
Royal Dutch Shell PLC (Class B Stock) | 50,070 | 1,787,454 | ||||||
|
| |||||||
8,577,112 | ||||||||
New Zealand 0.3% | ||||||||
Air New Zealand Ltd. | 405,982 | 931,552 | ||||||
Norway 1.4% | ||||||||
Aker ASA | 15,503 | 968,929 | ||||||
DNB ASA | 57,058 | 1,067,062 | ||||||
Marine Harvest ASA* | 76,095 | 1,656,426 | ||||||
Orkla ASA | 10,436 | 96,587 | ||||||
|
| |||||||
3,789,004 | ||||||||
Pakistan 0.2% | ||||||||
SUI Northern Gas Pipeline | 444,300 | 436,206 | ||||||
Poland 0.2% | ||||||||
Enea SA | 158,480 | 469,455 | ||||||
Portugal 0.3% | ||||||||
Sonae SGPS SA | 660,449 | 898,115 | ||||||
Qatar 0.1% | ||||||||
Ooredoo QPSC | 18,518 | 402,856 | ||||||
Russia 0.9% | ||||||||
Gazprom PJSC, ADR | 134,274 | 621,420 | ||||||
Lukoil PJSC, ADR | 9,593 | 640,812 | ||||||
Novatek PJSC, GDR | 1,121 | 142,367 | ||||||
Sberbank of Russia PJSC, ADR | 48,247 | 718,880 | ||||||
Tatneft PJSC | 5,629 | 363,071 | ||||||
|
| |||||||
2,486,550 |
See Notes to Financial Statements.
16 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Singapore 1.0% | ||||||||
Oversea-Chinese Banking Corp. Ltd. | 211,300 | $ | 2,182,431 | |||||
Venture Corp. Ltd. | 38,600 | 603,745 | ||||||
Wilmar International Ltd. | 45,900 | 112,291 | ||||||
|
| |||||||
2,898,467 | ||||||||
South Africa 1.5% | ||||||||
Adcock Ingram Holdings Ltd. | 101,208 | 551,291 | ||||||
Astral Foods Ltd. | 37,309 | 920,321 | ||||||
Growthpoint Properties Ltd. | 709,923 | 1,657,155 | ||||||
RMB Holdings Ltd. | 16,936 | 106,227 | ||||||
Standard Bank Group Ltd. | 15,473 | 265,371 | ||||||
Tongaat Hulett Ltd. | 84,512 | 612,624 | ||||||
|
| |||||||
4,112,989 | ||||||||
South Korea 4.4% | ||||||||
F&F Co. Ltd. | 13,057 | 532,067 | ||||||
Hana Financial Group, Inc. | 34,022 | 1,511,707 | ||||||
Kakao M Corp. | 2,828 | 236,275 | ||||||
KB Financial Group, Inc. | 19,201 | 1,090,906 | ||||||
LG Electronics, Inc. | 1,418 | 134,453 | ||||||
Lotte Chemical Corp.* | 3,420 | 1,316,963 | ||||||
Orion Holdings Corp. | 4,532 | 103,505 | ||||||
POSCO | 5,979 | 2,060,129 | ||||||
Samsung Electronics Co. Ltd. | 556 | 1,378,106 | ||||||
Samsung SDS Co. Ltd. | 477 | 108,345 | ||||||
SK Hynix, Inc. | 32,646 | 2,567,413 | ||||||
SK Innovation Co. Ltd. | 6,069 | 1,112,122 | ||||||
SK Telecom Co. Ltd. | 518 | 110,678 | ||||||
|
| |||||||
12,262,669 | ||||||||
Spain 1.2% | ||||||||
Amadeus IT Group SA | 30,116 | 2,197,255 | ||||||
Iberdrola SA | 14,802 | 114,359 | ||||||
Repsol SA | 52,797 | 1,007,514 | ||||||
|
| |||||||
3,319,128 | ||||||||
Sweden 2.3% | ||||||||
Atlas Copco AB (Class A Stock) | 24,961 | 976,133 | ||||||
Atlas Copco AB (Class B Stock) | 5,159 | 182,853 | ||||||
Hexagon AB (Class B Stock) | 3,321 | 191,751 | ||||||
Peab AB | 90,568 | 801,831 |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 17 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Sweden (cont’d.) | ||||||||
Sandvik AB | 37,866 | $ | 645,632 | |||||
Swedish Match AB | 41,507 | 1,862,013 | ||||||
Volvo AB (Class B Stock) | 100,392 | 1,701,281 | ||||||
|
| |||||||
6,361,494 | ||||||||
Switzerland 4.7% | ||||||||
Ferrexpo PLC | 223,474 | 723,544 | ||||||
Georg Fischer AG | 233 | 289,632 | ||||||
Nestle SA | 22,881 | 1,772,593 | ||||||
Novartis AG | 46,235 | 3,558,908 | ||||||
Oriflame Holding AG* | 18,783 | 890,073 | ||||||
Resurs Holding AB, 144A | 27,281 | 175,762 | ||||||
Roche Holding AG | 16,161 | 3,590,772 | ||||||
Swiss Re AG | 19,777 | 1,884,141 | ||||||
Zurich Insurance Group AG | 1,028 | 328,380 | ||||||
|
| |||||||
13,213,805 | ||||||||
Taiwan 2.6% | ||||||||
AU Optronics Corp. | 2,055,000 | 847,391 | ||||||
Chroma Ate, Inc. | 162,000 | 814,575 | ||||||
CTBC Financial Holding Co. Ltd. | 231,000 | 164,741 | ||||||
Formosa Petrochemical Corp. | 29,000 | 118,330 | ||||||
Globalwafers Co. Ltd. | 7,000 | 112,928 | ||||||
Gourmet Master Co. Ltd. | 61,385 | 707,304 | ||||||
King’s Town Bank Co. Ltd. | 523,000 | 626,453 | ||||||
Lien Hwa Industrial Corp. | 394,000 | 502,992 | ||||||
Nanya Technology Corp. | 447,000 | 1,391,458 | ||||||
President Chain Store Corp. | 55,000 | 540,621 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 128,000 | 975,020 | ||||||
Uni-President Enterprises Corp. | 61,000 | 146,807 | ||||||
Walsin Lihwa Corp. | 258,000 | 175,420 | ||||||
Yuanta Financial Holding Co. Ltd. | 280,000 | 133,631 | ||||||
|
| |||||||
7,257,671 | ||||||||
Thailand 1.6% | ||||||||
Airports of Thailand PCL | 308,200 | 693,476 | ||||||
Beauty Community PCL | 1,383,695 | 1,016,714 | ||||||
PTT Global Chemical PCL | 37,500 | 115,898 | ||||||
PTT PCL | 650,000 | 1,159,319 | ||||||
Thai Oil PCL | 390,700 | 1,163,092 | ||||||
Thanachart Capital PCL | 216,600 | 367,802 | ||||||
|
| |||||||
4,516,301 |
See Notes to Financial Statements.
18 |
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Turkey 1.1% | ||||||||
Akbank Turk A/S | 44,973 | $ | 93,574 | |||||
Aygaz A/S | 129,156 | 429,333 | ||||||
Ford Otomotiv Sanayi A/S | 21,454 | 295,350 | ||||||
Tekfen Holding A/S | 203,079 | 768,500 | ||||||
Turkiye Garanti Bankasi A/S | 558,794 | 1,265,351 | ||||||
Turkiye Petrol Rafinerileri A/S | 3,678 | 94,018 | ||||||
|
| |||||||
2,946,126 | ||||||||
United Kingdom 10.0% | ||||||||
Anglo American PLC | 96,538 | 2,271,483 | ||||||
Berkeley Group Holdings PLC | 27,257 | 1,525,966 | ||||||
BP PLC | 246,518 | 1,831,139 | ||||||
British American Tobacco PLC | 20,376 | 1,117,580 | ||||||
Britvic PLC | 84,628 | 836,505 | ||||||
BT Group PLC | 105,261 | 361,294 | ||||||
CMC Markets PLC, 144A | 274,412 | 715,833 | ||||||
CNH Industrial NV | 13,244 | 162,961 | ||||||
esure Group PLC | 120,265 | 372,366 | ||||||
Fiat Chrysler Automobiles NV* | 14,364 | 319,150 | ||||||
HSBC Holdings PLC | 106,372 | 1,059,045 | ||||||
IG Group Holdings PLC | 10,840 | 123,777 | ||||||
Imperial Brands PLC | 49,831 | 1,782,947 | ||||||
Inchcape PLC | 94,811 | 947,202 | ||||||
Legal & General Group PLC | 75,658 | 280,220 | ||||||
Lloyds Banking Group PLC | 1,999,812 | 1,773,739 | ||||||
Old Mutual PLC | 63,250 | 217,902 | ||||||
Persimmon PLC | 45,497 | 1,699,571 | ||||||
Rio Tinto Ltd. | 5,546 | 330,065 | ||||||
Rio Tinto PLC | 41,503 | 2,262,175 | ||||||
Schroders PLC | 2,307 | 104,371 | ||||||
Smith & Nephew PLC | 89,212 | 1,708,514 | ||||||
Spectris PLC | 25,586 | 944,055 | ||||||
SSE PLC | 20,541 | 389,842 | ||||||
Unilever NV, CVA | 26,298 | 1,507,625 | ||||||
Unilever PLC | 15,216 | 853,502 | ||||||
Vodafone Group PLC | 826,358 | 2,411,506 | ||||||
|
| |||||||
27,910,335 | ||||||||
United States 0.0% |
| |||||||
Lululemon Athletica, Inc.* | 48 | 4,790 | ||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 268,776,215 | ||||||
|
|
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 19 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
EXCHANGE TRADED FUNDS 0.9% |
| |||||||
United States |
| |||||||
iShares MSCI EAFE ETF | 30,266 | $ | 2,141,017 | |||||
iShares MSCI Emerging Markets ETF | 10,814 | 507,393 | ||||||
|
| |||||||
TOTAL EXCHANGE TRADED FUNDS |
| 2,648,410 | ||||||
|
| |||||||
PREFERRED STOCKS 2.0% |
| |||||||
Brazil 0.9% |
| |||||||
Banco do Estado do Rio Grande do Sul SA (PRFC)(Class B Stock) | 130,900 | 747,316 | ||||||
Cia Paranaense de Energia (PRFC) | 123,400 | 947,551 | ||||||
Itau Unibanco Holding SA (PRFC) | 55,600 | 807,368 | ||||||
|
| |||||||
2,502,235 | ||||||||
Germany 0.9% |
| |||||||
Henkel AG & Co. KGaA (PRFC) | 869 | 110,437 | ||||||
Volkswagen AG (PRFC) | 11,856 | 2,445,117 | ||||||
|
| |||||||
2,555,554 | ||||||||
South Korea 0.2% |
| |||||||
Samsung Electronics Co. Ltd. (PRFC) | 230 | 457,331 | ||||||
|
| |||||||
TOTAL PREFERRED STOCKS |
| 5,515,120 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS |
| 276,939,745 | ||||||
|
| |||||||
SHORT-TERM INVESTMENTS 1.4% |
| |||||||
AFFILIATED MUTUAL FUNDS |
| |||||||
Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund(w) | 207,524 | 207,524 | ||||||
Prudential Investment Portfolios 2 - PGIM Institutional Money Market Fund | 3,728,466 | 3,728,466 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 3,935,990 | ||||||
|
| |||||||
TOTAL INVESTMENTS 100.6% | 280,875,735 | |||||||
Liabilities in excess of other assets (0.6)% | (1,765,740 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 279,109,995 | ||||||
|
|
See Notes to Financial Statements.
20 |
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
CVA—Certificate Van Aandelen (Bearer)
EAFE—Europe, Australasia and Far East
ETF—Exchange Traded Funds
GDR—Global Depositary Receipt
LIBOR—London Interbank Offered Rate
MSCI—Morgan Stanley Capital International
PJSC—Public Joint-Stock Company
PRFC—Preference Shares
REIT(s)—Real Estate Investment Trust(s)
* | Non-income producing security. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $3,577,193; cash collateral of $3,725,702 (included in liabilities) was received with which the Portfolio purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund and the PGIM Institutional Money Market Fund. |
Fair Value Measurements:
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—unadjusted 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, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities |
| |||||||||||
Common Stocks |
| |||||||||||
Australia | $ | — | $ | 10,871,494 | $ | — | ||||||
Austria | — | 3,290,706 | — | |||||||||
Belgium | — | 1,722,366 | — | |||||||||
Brazil | 3,706,815 | — | — | |||||||||
Canada | 14,520,080 | — | — | |||||||||
Chile | 41,577 | — | — | |||||||||
China | 1,387,461 | 19,487,963 | — |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 21 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) |
| |||||||||||
Common Stocks (continued) |
| |||||||||||
Colombia | $ | 139,235 | $ | — | $ | — | ||||||
Denmark | — | 3,497,571 | — | |||||||||
Finland | — | 576,926 | — | |||||||||
France | — | 17,361,155 | — | |||||||||
Germany | 123,239 | 12,759,211 | — | |||||||||
Greece | — | 1,433,875 | — | |||||||||
Hong Kong | 1,044,556 | 8,135,671 | — | |||||||||
Hungary | — | 396,020 | — | |||||||||
India | — | 3,784,530 | — | |||||||||
Israel | 164,067 | — | — | |||||||||
Italy | — | 5,561,863 | — | |||||||||
Japan | — | 48,713,874 | — | |||||||||
Luxembourg | — | 1,796,362 | — | |||||||||
Malaysia | — | 3,079,984 | — | |||||||||
Mexico | 2,384,989 | — | — | |||||||||
Netherlands | — | 8,577,112 | — | |||||||||
New Zealand | — | 931,552 | — | |||||||||
Norway | — | 3,789,004 | — | |||||||||
Pakistan | — | 436,206 | — | |||||||||
Poland | — | 469,455 | — | |||||||||
Portugal | — | 898,115 | — | |||||||||
Qatar | — | 402,856 | — | |||||||||
Russia | 2,486,550 | — | — | |||||||||
Singapore | — | 2,898,467 | — | |||||||||
South Africa | — | 4,112,989 | — | |||||||||
South Korea | — | 12,262,669 | — | |||||||||
Spain | — | 3,319,128 | — | |||||||||
Sweden | — | 6,361,494 | — | |||||||||
Switzerland | — | 13,213,805 | — | |||||||||
Taiwan | — | 7,257,671 | — | |||||||||
Thailand | — | 4,516,301 | — | |||||||||
Turkey | — | 2,946,126 | — | |||||||||
United Kingdom | — | 27,910,335 | — | |||||||||
United States | 4,790 | — | — | |||||||||
Exchange Traded Funds | ||||||||||||
United States | 2,648,410 | — | — | |||||||||
Preferred Stocks | ||||||||||||
Brazil | 2,502,235 | — | — | |||||||||
Germany | — | 2,555,554 | — | |||||||||
South Korea | — | 457,331 | — | |||||||||
Affiliated Mutual Funds | 3,935,990 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 35,089,994 | $ | 245,785,741 | $ | — | ||||||
|
|
|
|
|
|
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
See Notes to Financial Statements.
22 |
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2018 were as follows:
Banks | 15.2 | % | ||
Oil, Gas & Consumable Fuels | 7.3 | |||
Pharmaceuticals | 5.7 | |||
Metals & Mining | 5.6 | |||
Insurance | 4.2 | |||
Automobiles | 3.7 | |||
Semiconductors & Semiconductor Equipment | 3.1 | |||
Trading Companies & Distributors | 3.0 | |||
Food Products | 2.9 | |||
Real Estate Management & Development | 2.7 | |||
Diversified Telecommunication Services | 2.7 | |||
IT Services | 2.5 | |||
Chemicals | 2.5 | |||
Construction & Engineering | 2.4 | |||
Machinery | 2.4 | |||
Tobacco | 2.4 | |||
Electronic Equipment, Instruments & Components | 2.3 | |||
Household Durables | 2.1 | |||
Food & Staples Retailing | 2.0 | |||
Capital Markets | 1.9 | |||
Electric Utilities | 1.6 | |||
Wireless Telecommunication Services | 1.5 | |||
Hotels, Restaurants & Leisure | 1.4 | |||
Airlines | 1.4 | |||
Affiliated Mutual Funds (including 1.3% of collateral for securities on loan) | 1.4 | |||
Technology Hardware, Storage & Peripherals | 1.3 | |||
Internet Software & Services | 1.3 | |||
Textiles, Apparel & Luxury Goods | 1.2 | |||
Diversified Financial Services | 1.2 | |||
Personal Products | 1.2 | |||
Specialty Retail | 1.0 | % | ||
Exchange Traded Funds | 0.9 | |||
Auto Components | 0.9 | |||
Health Care Equipment & Supplies | 0.8 | |||
Biotechnology | 0.8 | |||
Equity Real Estate Investment Trusts (REITs) | 0.6 | |||
Software | 0.6 | |||
Industrial Conglomerates | 0.5 | |||
Independent Power & Renewable Electricity Producers | 0.5 | |||
Beverages | 0.4 | |||
Road & Rail | 0.4 | |||
Commercial Services & Supplies | 0.4 | |||
Leisure Products | 0.4 | |||
Distributors | 0.3 | |||
Electrical Equipment | 0.3 | |||
Media | 0.3 | |||
Gas Utilities | 0.3 | |||
Multi-Utilities | 0.3 | |||
Transportation Infrastructure | 0.2 | |||
Paper & Forest Products | 0.2 | |||
Thrifts & Mortgage Finance | 0.1 | |||
Household Products | 0.1 | |||
Construction Materials | 0.1 | |||
Consumer Finance | 0.1 | |||
Professional Services | 0.0 | * | ||
|
| |||
100.6 | ||||
Liabilities in excess of other assets | (0.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05% |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series entered into financial instruments/transactions 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 financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 23 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 3,577,193 | $ | (3,577,193 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
24 |
This Page Intentionally Left Blank
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets | ||||
Investments at value, including securities on loan of $3,577,193: | ||||
Unaffiliated investments (cost $236,651,294) | $ | 276,939,745 | ||
Affiliated investments (cost $3,935,732) | 3,935,990 | |||
Foreign currency, at value (cost $337,804) | 336,948 | |||
Tax reclaim receivable | 1,284,088 | |||
Dividends receivable | 984,076 | |||
Receivable for Series shares sold | 182,646 | |||
Prepaid expenses | 822 | |||
|
| |||
Total Assets | 283,664,315 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 3,725,702 | |||
Payable for Series shares reacquired | 296,535 | |||
Transfer agent fees | 188,813 | |||
Management fee payable | 142,368 | |||
Distribution fee payable | 66,539 | |||
Affiliated transfer agent fee payable | 64,417 | |||
Foreign capital gains tax liability | 59,278 | |||
Accrued expenses and other liabilities | 10,668 | |||
|
| |||
Total Liabilities | 4,554,320 | |||
|
| |||
Net Assets | $ | 279,109,995 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 351,027 | ||
Paid-in capital in excess of par | 231,947,557 | |||
|
| |||
232,298,584 | ||||
Undistributed net investment income | 704,304 | |||
Accumulated net realized gain on investment and foreign currency transactions | 5,963,138 | |||
Net unrealized appreciation on investments and foreign currencies | 40,143,969 | |||
|
| |||
Net assets, April 30, 2018 | $ | 279,109,995 | ||
|
|
See Notes to Financial Statements.
26 |
Class A |
| |||
Net asset value and redemption price per share | $ | 7.96 | ||
Maximum sales charge (5.50% of offering price) | 0.46 | |||
|
| |||
Maximum offering price to public | $ | 8.42 | ||
|
| |||
Class B |
| |||
Net asset value, offering price and redemption price per share | $ | 7.62 | ||
|
| |||
Class C |
| |||
Net asset value, offering price and redemption price per share | $ | 7.63 | ||
|
| |||
Class Z |
| |||
Net asset value, offering price and redemption price per share | $ | 8.02 | ||
|
| |||
Class R6 |
| |||
Net asset value, offering price and redemption price per share | $ | 8.03 | ||
|
|
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 27 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) |
| |||
Income |
| |||
Unaffiliated dividend income (net of foreign withholding taxes of $462,019) | $ | 3,944,189 | ||
Income from securities lending, net (including affiliated income of $2,143) | 27,524 | |||
Affiliated dividend income | 2,820 | |||
|
| |||
Total income | 3,974,533 | |||
|
| |||
Expenses |
| |||
Management fee | 1,066,449 | |||
Distribution fee(a) | 409,093 | |||
Transfer agent’s fees and expenses (affiliated expense of $106,301)(a) | 314,398 | |||
Custodian and accounting fees | 102,127 | |||
Shareholders’ reports | 37,583 | |||
Registration fees(a) | 33,557 | |||
Audit fee | 15,184 | |||
Legal fees and expenses | 9,769 | |||
Directors’ fees | 8,186 | |||
Miscellaneous | 29,766 | |||
|
| |||
Total expenses | 2,026,112 | |||
Less: Fee waiver and/or expense reimbursement(a) | (169,597 | ) | ||
|
| |||
Net expenses | 1,856,515 | |||
|
| |||
Net investment income (loss) | 2,118,018 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions |
| |||
Net realized gain (loss) on: |
| |||
Investment transactions (including affiliated of $(73)) (net of foreign capital gains taxes $(67,047)) | 17,978,755 | |||
Foreign currency transactions | (49,947 | ) | ||
|
| |||
17,928,808 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: |
| |||
Investments (net change in foreign capital gain taxes $(59,278)) | (14,095,308 | ) | ||
Foreign currencies | 19,431 | |||
|
| |||
(14,075,877 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 3,852,931 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 5,970,949 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class B | Class C | Class Z | Class R6 | ||||||||||||||||
Distribution fee | 311,422 | 14,542 | 83,129 | — | — | |||||||||||||||
Transfer agent’s fees and expenses | 270,892 | 10,821 | 20,154 | 12,467 | 64 | |||||||||||||||
Registration fees | 7,351 | 6,895 | 6,919 | 6,317 | 6,075 | |||||||||||||||
Fee waiver and/or expense reimbursement | (114,188 | ) | (8,426 | ) | (9,144 | ) | (9,667 | ) | (28,172 | ) |
See Notes to Financial Statements.
28 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 2,118,018 | $ | 4,384,696 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 17,928,808 | 27,025,193 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (14,075,877 | ) | 28,366,824 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 5,970,949 | 59,776,713 | ||||||
|
|
|
| |||||
Dividends from net investment income | ||||||||
Class A | (3,767,555 | ) | (3,575,263 | ) | ||||
Class B | (34,288 | ) | (42,092 | ) | ||||
Class C | (206,355 | ) | (214,555 | ) | ||||
Class Z | (363,327 | ) | (1,161,844 | ) | ||||
Class R6 | (939,275 | ) | — | |||||
|
|
|
| |||||
(5,310,800 | ) | (4,993,754 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 7,948,034 | 12,665,842 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 5,229,466 | 4,913,253 | ||||||
Cost of shares reacquired | (18,757,513 | ) | (42,098,907 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | (5,580,013 | ) | (24,519,812 | ) | ||||
|
|
|
| |||||
Total increase (decrease) | (4,919,864 | ) | 30,263,147 | |||||
Net Assets: | ||||||||
Beginning of period | 284,029,859 | 253,766,712 | ||||||
|
|
|
| |||||
End of period(a) | $ | 279,109,995 | $ | 284,029,859 | ||||
|
|
|
| |||||
(a) Includes undistributed/(distributions in excess of) net investment income of: | $ | 704,304 | $ | 3,897,086 | ||||
|
|
|
|
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 29 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven series: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM QMA International Equity Fund (the “Series”). Effective June 11, 2018, the Series’ name was changed by replacing “Prudential” with “PGIM” in Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is to seek long-term growth of capital.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
30 |
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally 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 is 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 for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
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
PGIM QMA International Equity Fund | 31 |
Notes to Financial Statements (unaudited) (continued)
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Fund. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the period, the Series does not 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
32 |
foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
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.
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned 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 and on the change in the value of the collateral invested that may occur during the term of
PGIM QMA International Equity Fund | 33 |
Notes to Financial Statements (unaudited) (continued)
the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 or 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 specific identification method. Dividend income is recorded on the ex-date. 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to pay dividends from 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 gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
34 |
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with Quantitative Management Associates LLC (“QMA”). The subadvisory agreement provides that QMA will furnish 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. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly, at an annual rate of 0.75% of the average daily net assets of the Series up to and including $2 billion, 0.70% of the average daily net assets of the Series in excess of $2 billion up to and including $5 billion and 0.69% of the average daily net assets of the Series over $5 billion. The effective management fee rate before any waivers and/or expense reimbursements, was 0.75% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 29, 2020, to limit total annual Series operating expenses after fee waivers and/or expense reimbursements to 2.53% of average daily net assets for Class B shares, and 0.78% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Series expenses such as dividend and interest expense and broker charges on short sales. To the extent shared expenses which are exclusive of class specific expenses are waived and/or reimbursed for any specific share class the Manager has voluntarily agreed to waive and/or reimburse shared expenses equally for all share classes. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate net of waivers and/or expense reimbursements, was 0.63% for the six months ended April 30, 2018.
PGIM QMA International Equity Fund | 35 |
Notes to Financial Statements (unaudited) (continued)
The Fund, on behalf of the Series, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C, Class Z and Class R6 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 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 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 $58,295 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $1,054 and $327 in contingent deferred sales charges imposed upon redemptions by certain Class B and Class C shareholders, respectively.
PGIM Investments, PIMS and QMA are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money
36 |
Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30 2018, PGIM, Inc. was compensated $177 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018, were $165,706,018 and $175,131,245, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 234,025 | $ | 22,605,975 | $ | 22,632,476 | $ | — | $ | — | $ | 207,524 | $ | 207,524 | $ | 2,820 | ||||||||||||||||
PGIM Institutional Money Market Fund | 7,029,505 | 15,286,424 | 18,587,639 | 249 | (73 | ) | 3,728,466 | 3,728,466 | 2,143 | |||||||||||||||||||||||
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| |||||||||||||||||||
$ | 7,263,530 | $ | 37,892,399 | $ | 41,220,115 | $ | 249 | $ | (73 | ) | $ | 3,935,990 | $ | 4,963 | ||||||||||||||||||
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|
|
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|
|
|
|
|
* | The Funds did not have any capital gain distributions during the reporting period. |
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 242,481,918 | ||
|
| |||
Gross Unrealized Appreciation | 43,537,758 | |||
Gross Unrealized Depreciation | (5,143,941 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 38,393,817 | ||
|
|
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 Fund 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
PGIM QMA International Equity Fund | 37 |
Notes to Financial Statements (unaudited) (continued)
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. Additionally, the Series had capital loss carryforwards of approximately $180,326,000 expire unused. Additionally, the Series utilized approximately $25,475,000 of its capital loss carryforward to offset capital gains during the fiscal year ended October 31, 2017. 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, 2017, the pre and post-enactment losses were approximately:
Post-Enactment Losses: | $ | 2,441,000 | ||
|
| |||
Pre-Enactment Losses: | ||||
Expiring 2018 | $ | 8,337,000 | ||
|
|
Management has analyzed the Series’ tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
6. Capital and Ownership
The Series offers Class A, Class B, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. 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 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 sales made within 12 months of purchase. Class Z and Class R6 shares are not subject to any sales or redemption charge and are available 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.
38 |
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 700 million shares authorized for the Series, divided into six classes, designated Class A, Class B, Class C, Class Z, Class T and Class R6 common stock, each of which consists of 100 million, 5 million, 100 million, 180 million, 135 million and 180 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
As of April 30, 2018, Prudential, through its affiliate entities, including affiliated funds (if applicable), owned 4,646,085 Class R6 shares of the Series. At reporting period end, four shareholders of record held 41% of the Series’ outstanding shares on behalf of multiple beneficial owners, of which 5% were held by an affiliate of Prudential.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 582,347 | $ | 4,686,359 | |||||
Shares issued in reinvestment of dividends and distributions | 477,662 | 3,697,101 | ||||||
Shares reacquired | (1,455,130 | ) | (11,711,162 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding before conversion | (395,121 | ) | (3,327,702 | ) | ||||
Shares issued upon conversion from other share class(es) | 45,451 | 360,036 | ||||||
Shares reacquired upon conversion into other share class(es) | (84,718 | ) | (681,550 | ) | ||||
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| |||||
Net increase (decrease) in shares outstanding | (434,388 | ) | $ | (3,649,216 | ) | |||
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|
| |||||
Year ended October 31, 2017: | ||||||||
Shares sold | 752,431 | $ | 5,382,926 | |||||
Shares issued in reinvestment of dividends and distributions | 558,922 | 3,504,441 | ||||||
Shares reacquired | (3,695,192 | ) | (25,772,057 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (2,383,839 | ) | (16,884,690 | ) | ||||
Shares issued upon conversion from other share class(es) | 184,434 | 1,286,550 | ||||||
Shares reacquired upon conversion into other share class(es) | (243,609 | ) | (1,688,042 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (2,443,014 | ) | $ | (17,286,182 | ) | |||
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| |||||
Class B | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 28,886 | $ | 223,555 | |||||
Shares issued in reinvestment of dividends and distributions | 4,495 | 33,444 | ||||||
Shares reacquired | (21,949 | ) | (170,020 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 11,432 | 86,979 | ||||||
Shares reacquired upon conversion into other share class(es) | (46,438 | ) | (353,268 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (35,006 | ) | $ | (266,289 | ) | |||
|
|
|
| |||||
Year ended October 31, 2017: | ||||||||
Shares sold | 70,167 | $ | 511,080 | |||||
Shares issued in reinvestment of dividends and distributions | 6,760 | 40,832 | ||||||
Shares reacquired | (55,031 | ) | (363,862 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 21,896 | 188,050 | ||||||
Shares reacquired upon conversion into other share class(es) | (120,582 | ) | (808,620 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (98,686 | ) | $ | (620,570 | ) | |||
|
|
|
|
PGIM QMA International Equity Fund | 39 |
Notes to Financial Statements (unaudited) (continued)
Class C | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 77,914 | $ | 596,966 | |||||
Shares issued in reinvestment of dividends and distributions | 27,319 | 202,979 | ||||||
Shares reacquired | (162,096 | ) | (1,247,021 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (56,863 | ) | (447,076 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (2,871 | ) | (22,263 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (59,734 | ) | $ | (469,339 | ) | |||
|
|
|
| |||||
Year ended October 31, 2017: | ||||||||
Shares sold | 151,352 | $ | 1,041,106 | |||||
Shares issued in reinvestment of dividends and distributions | 34,905 | 210,474 | ||||||
Shares reacquired | (470,230 | ) | (3,105,114 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (283,973 | ) | (1,853,534 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (84,714 | ) | (563,607 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (368,687 | ) | $ | (2,417,141 | ) | |||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 94,174 | $ | 760,430 | |||||
Shares issued in reinvestment of dividends and distributions | 45,785 | 356,667 | ||||||
Shares reacquired | (167,919 | ) | (1,358,638 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (27,960 | ) | (241,541 | ) | ||||
Shares issued upon conversion from other share class(es) | 82,816 | 671,075 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 54,856 | $ | 429,534 | |||||
|
|
|
| |||||
Year ended October 31, 2017: | ||||||||
Shares sold | 650,610 | $ | 4,273,750 | |||||
Shares issued in reinvestment of dividends and distributions | 183,440 | 1,157,506 | ||||||
Shares reacquired | (825,492 | ) | (5,651,314 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 8,558 | (220,058 | ) | |||||
Shares issued upon conversion from other shares class(es) | 241,534 | 1,676,815 | ||||||
Shares reacquired upon conversion into other share class(es) | (5,687,349 | ) | (35,945,590 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (5,437,257 | ) | $ | (34,488,833 | ) | |||
|
|
|
|
40 |
Class R6 | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 208,526 | $ | 1,680,724 | |||||
Shares issued in reinvestment of dividends and distributions | 120,574 | 939,275 | ||||||
Shares reacquired | (523,815 | ) | (4,270,672 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (194,715 | ) | (1,650,673 | ) | ||||
Shares issued upon conversion from other share class(es) | 3,193 | 25,970 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (191,522 | ) | $ | (1,624,703 | ) | |||
|
|
|
| |||||
Period* ended October 31, 2017: | ||||||||
Shares sold | 201,769 | $ | 1,456,980 | |||||
Shares reacquired† | (1,003,132 | ) | (7,206,560 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | (801,363 | ) | (5,749,580 | ) | ||||
Shares issued upon conversion from other share class(es) | 5,700,179 | 36,042,494 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 4,898,816 | $ | 30,292,914 | |||||
|
|
|
|
* | Commencement of offering was December 28, 2016. |
† | Includes affiliated redemption of 1,582 shares with a value of $12,199 for Class R6 shares. |
7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series utilized the SCA during the reporting period ended April 30, 2018. The average daily balance for the 47 days that the Series had loans outstanding during the period was $383,128, borrowed at a weighted average interest rate of 2.95%. The maximum loan balance outstanding during the period was $1,855,000. At April 30, 2018, the Series did not have an outstanding loan balance.
PGIM QMA International Equity Fund | 41 |
Financial Highlights
Class A Shares | ||||||||||||||||||||||||||||
Six Months | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.95 | $6.48 | $6.65 | $7.36 | $7.37 | $6.02 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.06 | 0.11 | 0.11 | 0.11 | 0.15 | 0.12 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.10 | 1.49 | (0.17 | ) | (0.65 | ) | (0.02 | ) | 1.36 | |||||||||||||||||||
Total from investment operations | 0.16 | 1.60 | (0.06 | ) | (0.54 | ) | 0.13 | 1.48 | ||||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.13 | ) | (0.11 | ) | (0.17 | ) | (0.14 | ) | (0.13 | ) | ||||||||||||||||
Net asset value, end of period | $7.96 | $7.95 | $6.48 | $6.65 | $7.36 | $7.37 | ||||||||||||||||||||||
Total Return(b): | 2.01% | 25.17% | (0.93)% | (7.37)% | 1.84% | 25.06% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $204,488 | $207,626 | $185,120 | $211,314 | $218,909 | $234,668 | ||||||||||||||||||||||
Average net assets (000) | $209,335 | $192,517 | $189,980 | $229,598 | $232,049 | $221,300 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.35% | (d) | 1.58% | 1.66% | 1.62% | 1.59% | 1.59% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.46% | (d) | 1.59% | 1.66% | 1.62% | 1.59% | 1.59% | |||||||||||||||||||||
Net investment income (loss) | 1.44% | (d) | 1.62% | 1.69% | 1.39% | 2.02% | 1.83% | |||||||||||||||||||||
Portfolio turnover rate(f) | 58% | (e) | 105% | 114% | 111% | 134% | 114% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not Annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
42 |
Class B Shares | ||||||||||||||||||||||||||||
Six Months | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.60 | $6.21 | $6.37 | $7.05 | $7.07 | $5.78 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.01 | 0.05 | 0.06 | 0.05 | 0.10 | 0.07 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.10 | 10.43 | (0.16 | ) | (0.61 | ) | (0.03 | ) | 1.32 | |||||||||||||||||||
Total from investment operations | 0.11 | 1.48 | (0.10 | ) | (0.56 | ) | 0.07 | 1.39 | ||||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.09 | ) | (0.06 | ) | (0.12 | ) | (0.09 | ) | (0.10 | ) | ||||||||||||||||
Net asset value, end of period | $7.62 | $7.60 | $6.21 | $6.37 | $7.05 | $7.07 | ||||||||||||||||||||||
Total Return(b): | 1.41% | 24.12% | (1.55)% | (7.96)% | 1.10% | 24.26% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $2,762 | $3,020 | $3,080 | $4,774 | $5,006 | $6,066 | ||||||||||||||||||||||
Average net assets (000) | $2,933 | $2,833 | $3,710 | $5,313 | $5,868 | $5,690 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.53% | (d) | 2.39% | 2.36% | 2.32% | 2.29% | 2.29% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 3.11% | (d) | 2.72% | 2.36% | 2.32% | 2.29% | 2.29% | |||||||||||||||||||||
Net investment income (loss) | 0.25% | (d) | 0.75% | 0.96% | 0.68% | 1.35% | 1.13% | |||||||||||||||||||||
Portfolio turnover rate(f) | 58% | (e) | 105% | 114% | 111% | 134% | 114% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not Annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 43 |
Financial Highlights (continued)
Class C Shares | ||||||||||||||||||||||||||||
Six Months | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.60 | $6.20 | $6.37 | $7.05 | $7.07 | $5.78 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.03 | 0.06 | 0.06 | 0.06 | 0.10 | 0.07 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.09 | 1.43 | (0.17 | ) | (0.62 | ) | (0.03 | ) | 1.32 | |||||||||||||||||||
Total from investment operations | 0.12 | 1.49 | (0.11 | ) | (0.56 | ) | 0.07 | 1.39 | ||||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.09 | ) | (0.06 | ) | (0.12 | ) | (0.09 | ) | (0.10 | ) | ||||||||||||||||
Net asset value, end of period | $7.63 | $7.60 | $6.20 | $6.37 | $7.05 | $7.07 | ||||||||||||||||||||||
Total Return(b): | 1.67% | 24.33% | (1.71)% | (7.96)% | 1.10% | 24.27% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $16,268 | $16,661 | $15,892 | $18,209 | $18,146 | $19,472 | ||||||||||||||||||||||
Average net assets (000) | $16,763 | $15,736 | $16,416 | $20,086 | $19,402 | $18,341 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 2.11% | (d) | 2.32% | 2.36% | 2.32% | 2.29% | 2.29% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.22% | (d) | 2.33% | 2.36% | 2.32% | 2.29% | 2.29% | |||||||||||||||||||||
Net investment income (loss) | 0.69% | (d) | 0.86% | 0.98% | 0.71% | 1.32% | 1.13% | |||||||||||||||||||||
Portfolio turnover rate(f) | 58% | (e) | 105% | 114% | 111% | 134% | 114% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
44 |
Class Z Shares | ||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.02 | $6.54 | $6.70 | $7.42 | $7.43 | $6.07 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||
Net investment income (loss) | 0.07 | 0.11 | 0.13 | 0.13 | 0.16 | 0.15 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.10 | 1.52 | (0.16 | ) | (0.66 | ) | (0.01 | ) | 1.36 | |||||||||||||||||
Total from investment operations | 0.17 | 1.63 | (0.03 | ) | (0.53 | ) | 0.15 | 1.51 | ||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||||
Dividends from net investment income | (0.17 | ) | (0.15 | ) | (0.13 | ) | (0.19 | ) | (0.16 | ) | (0.15 | ) | ||||||||||||||
Net asset value, end of period | $8.02 | $8.02 | $6.54 | $6.70 | $7.42 | $7.43 | ||||||||||||||||||||
Total Return(b): | 2.15% | 25.46% | (0.44)% | (7.15)% | 2.12% | 25.36% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||
Net assets, end of period (000) | $17,795 | $17,344 | $49,675 | $54,726 | $48,064 | $71,753 | ||||||||||||||||||||
Average net assets (000) | $17,722 | $21,567 | $50,923 | $55,405 | $53,881 | $60,981 | ||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.00% | (d) | 1.31% | 1.36% | 1.32% | 1.29% | 1.29% | |||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.11% | (d) | 1.32% | 1.36% | 1.32% | 1.29% | 1.29% | |||||||||||||||||||
Net investment income (loss) | 1.81% | (d) | 1.57% | 1.99% | 1.69% | 2.07% | 2.17% | |||||||||||||||||||
Portfolio turnover rate(f) | 58% | (e) | 105% | 114% | 111% | 134% | 114% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM QMA International Equity Fund | 45 |
Financial Highlights (continued)
Class R6 Shares | ||||||||||||
Six Months Ended April 30, 2018 | December 28, 2016(a) through October 31, 2017 | |||||||||||
Per Share Operating Performance(b): | ||||||||||||
Net Asset Value, Beginning of Period | $8.04 | $6.32 | ||||||||||
Income (loss) from investment operations: | ||||||||||||
Net investment income (loss) | 0.08 | 0.15 | ||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 0.10 | 1.57 | ||||||||||
Total from investment operations | 0.18 | 1.72 | ||||||||||
Less Dividends: | ||||||||||||
Dividends from net investment income | (0.19 | ) | - | |||||||||
Net asset value, end of period | $8.03 | $8.04 | ||||||||||
Total Return(c): | 2.31% | 27.22% | ||||||||||
Ratios/Supplemental Data: | ||||||||||||
Net assets, end of period (000) | $37,797 | $39,379 | ||||||||||
Average net assets (000) | $39,991 | $37,891 | ||||||||||
Ratios to average net assets(d): | ||||||||||||
Expenses after waivers and/or expense reimbursement | 0.78% | (e) | 0.95% | (e) | ||||||||
Expenses before waivers and/or expense reimbursement | 0.92% | (e) | 0.99% | (e) | ||||||||
Net investment income (loss) | 2.01% | (e) | 2.45% | (e) | ||||||||
Portfolio turnover rate(g) | 58% | (f) | 105% | (f) |
(a) | Commencement of offering. |
(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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
46 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
INVESTMENT SUBADVISER | Quantitative Management Associates LLC | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
| ||||
DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
| ||||
CUSTODIAN | The Bank of New York Mellon | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM QMA International Equity Fund, PGIM 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 |
PGIM QMA INTERNATIONAL EQUITY FUND
SHARE CLASS | A | B | C | Z | R6* | |||||
NASDAQ | PJRAX | PJRBX | PJRCX | PJIZX | PJRQX | |||||
CUSIP | 743969859 | 743969867 | 743969875 | 743969883 | 743969578 |
*Formerly known as Class Q shares.
MF190E2
PGIM EMERGING MARKETS DEBT
LOCAL CURRENCY FUND
(Formerly known as Prudential Emerging Markets Debt Local Currency Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.com/edelivery
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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2018 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at pgiminvestments.com |
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11 |
PGIM Emerging Markets Debt Local Currency Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Emerging Markets Debt Local Currency Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors
participate in opportunities across global markets while meeting their toughest investment
challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Emerging Markets Debt Local Currency Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Emerging Markets Debt Local Currency Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||||
Six Months* (%) | One Year (%) | Five Years (%) | Since Inception (%) | |||||
Class A | 4.48 | 2.44 | –3.34 | –0.68 (3/30/11) | ||||
Class C | 3.89 | 5.22 | –3.18 | –0.66 (3/30/11) | ||||
Class Z | 4.23 | 7.11 | –2.19 | 0.27 (3/30/11) | ||||
Class R6** | 4.53 | 7.33 | –2.08 | 0.35 (3/30/11) | ||||
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index | ||||||||
5.15 | 8.38 | –1.92 | 0.63 | |||||
Lipper Emerging Markets Local Currency Debt Funds Average | ||||||||
3.71 | 6.66 | –2.14 | 0.46 |
Source: PGIM Investments LLC, Lipper, Inc. and JP Morgan
*Not annualized
**Formerly known as Class Q shares.
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
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 | Class R6* | |||||
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) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | ||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.25% | 1.00% | None | None |
*Formerly known as Class Q shares.
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Benchmark Definitions
JP Morgan Government Bond Index-Emerging Markets Global Diversified Index—The JP Morgan Government Bond Index-Emerging Markets Global Diversified Index, an unmanaged index, is a comprehensive emerging markets debt benchmark that tracks local currency bonds issued by emerging market governments.
Lipper Emerging Markets Local Currency Debt Funds Average—The Lipper Emerging Markets Local Currency Debt Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Emerging Markets Local Currency Debt Funds universe for the periods noted. Funds in the Lipper Average seek either current income or total return by investing at least 65% of total assets in debt issues denominated in the currency of their market of issuance. “Emerging markets” are defined by a country’s GNP per capita or other economic measures.
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
Distributions and Yields as of 4/30/18 | ||||||
Total Distributions Paid for Six Months ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||
Class A | 0.19 | 5.14 | 4.40 | |||
Class C | 0.16 | 4.56 | 2.17 | |||
Class Z | 0.20 | 5.58 | 5.23 | |||
Class R6*** | 0.20 | 5.66 | –200.00 |
*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.
***Formerly known as Class Q shares.
PGIM Emerging Markets Debt Local Currency Fund | 7 |
Your Fund’s Performance (continued)
Credit Quality expressed as a percentage of total investments as of 4/30/18 (%) | ||||
AAA | 1.5 | |||
AA | 5.3 | |||
A | 30.5 | |||
BBB | 35.4 | |||
BB | 14.9 | |||
B | 10.8 | |||
Cash/Cash Equivalents | 1.7 | |||
Total Investments | 100.0 |
Source: PGIM Fixed Income
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investor Service, Inc. (Moody’s), S&P Global Ratings (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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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period
PGIM Emerging Markets Debt Local Currency Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Emerging Markets Debt Local Currency Fund | Beginning Account Value November 1, 2017 | Ending Account April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,044.80 | 1.13 | % | $ | 5.73 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.19 | 1.13 | % | $ | 5.66 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,038.90 | 1.88 | % | $ | 9.50 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.47 | 1.88 | % | $ | 9.39 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,042.30 | 0.88 | % | $ | 4.46 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.43 | 0.88 | % | $ | 4.41 | ||||||||||
Class R6** | Actual | $ | 1,000.00 | $ | 1,045.30 | 0.88 | % | $ | 4.46 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.43 | 0.88 | % | $ | 4.41 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**Formerly known as Class Q shares.
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Schedule of Investments (unaudited)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
LONG-TERM INVESTMENTS 96.7% |
| |||||||||||||||
SOVEREIGN BONDS 91.9% |
| |||||||||||||||
Argentina 1.8% |
| |||||||||||||||
Argentine Bonos Del Tesoro, Bonds(a) | 21.200 | % | 09/19/18 | ARS | 7,650 | $ | 360,405 | |||||||||
Argentine Republic Government International Bond, Sr. Unsec’d. Notes | 5.625 | 01/26/22 | 260 | 262,210 | ||||||||||||
Provincia de Buenos Aires, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.125 | 03/16/24 | 350 | 388,500 | ||||||||||||
Sr. Unsec’d. Notes | 9.950 | 06/09/21 | 140 | 155,357 | ||||||||||||
|
| |||||||||||||||
1,166,472 | ||||||||||||||||
Brazil 11.7% |
| |||||||||||||||
Brazil Loan Trust I, Gov’t. Gtd. Notes | 5.477 | 07/24/23 | 108 | 111,072 | ||||||||||||
Brazil Notas do Tesouro Nacionalie, | ||||||||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/21 | BRL | 3,834 | 1,149,416 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/23 | BRL | 12,181 | 3,620,622 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/25 | BRL | 2,751 | 809,671 | |||||||||||
Notes, Ser. NTNF | 10.000 | 01/01/27 | BRL | 5,755 | 1,679,391 | |||||||||||
Brazilian Government International Bond, Sr. Unsec’d. Notes | 8.500 | 01/05/24 | BRL | 54 | 15,922 | |||||||||||
State of Minas Gerais, Sec’d. Notes | 5.333 | 02/15/28 | 435 | 432,825 | ||||||||||||
|
| |||||||||||||||
7,818,919 | ||||||||||||||||
Chile 2.9% | ||||||||||||||||
Bonos De La Tesoreria De La Republica En Pesos, Bonds | 4.500 | 03/01/26 | CLP | 1,190,000 | 1,947,049 | |||||||||||
Colombia 4.0% | ||||||||||||||||
Colombian TES, | ||||||||||||||||
Bonds, Ser. B | 6.000 | 04/28/28 | COP | 5,815,000 | 2,003,447 | |||||||||||
Bonds, Ser. B | 10.000 | 07/24/24 | COP | 1,580,000 | 679,608 | |||||||||||
|
| |||||||||||||||
2,683,055 | ||||||||||||||||
Cote d’lvoire 0.4% | ||||||||||||||||
Ivory Coast Government International Bond, Sr. Unsec’d. Notes | 5.375 | 07/23/24 | 250 | 244,650 | ||||||||||||
Czech Republic 1.9% | ||||||||||||||||
Czech Republic Government Bond, | ||||||||||||||||
Bonds, Ser. 46 | 3.750 | 09/12/20 | CZK | 6,500 | 328,635 | |||||||||||
Bonds, Ser. 89 | 2.400 | 09/17/25 | CZK | 9,190 | 460,915 | |||||||||||
Bonds, Ser. 95 | 0.450 | 10/25/23 | CZK | 3,270 | 148,067 | |||||||||||
Bonds, Ser. 95 | 1.000 | 06/26/26 | CZK | 7,100 | 319,013 | |||||||||||
|
| |||||||||||||||
1,256,630 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Ecuador 1.0% | ||||||||||||||||
Ecuador Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.950 | % | 06/20/24 | 200 | $ | 188,000 | ||||||||||
Sr. Unsec’d. Notes | 10.750 | 03/28/22 | 460 | 485,300 | ||||||||||||
|
| |||||||||||||||
673,300 | ||||||||||||||||
Egypt 0.3% | ||||||||||||||||
Egypt Government International Bond, Sr. Unsec’d. Notes, MTN | 6.125 | 01/31/22 | 215 | 220,633 | ||||||||||||
El Salvador 0.3% | ||||||||||||||||
El Salvador Government International Bond, Sr. Unsec’d. Notes | 7.750 | 01/24/23 | 185 | 199,115 | ||||||||||||
Gabon 0.3% | ||||||||||||||||
Gabon Government International Bond, Bonds | 6.375 | 12/12/24 | 200 | 194,918 | ||||||||||||
Ghana 0.6% | ||||||||||||||||
Ghana Government International Bond, Sr. Unsec’d. Notes | 7.875 | 08/07/23 | 400 | 433,880 | ||||||||||||
Greece 0.6% | ||||||||||||||||
Hellenic Republic Government Bond, Sr. Unsec’d Notes | 3.500 | 01/30/23 | EUR | 310 | 385,040 | |||||||||||
Hungary 2.1% | ||||||||||||||||
Hungary Government Bond, | ||||||||||||||||
Bonds, Ser. 21/B | 2.500 | 10/27/21 | HUF | 76,900 | 311,998 | |||||||||||
Bonds, Ser. 23/A | 6.000 | 11/24/23 | HUF | 68,710 | 328,199 | |||||||||||
Bonds, Ser. 25/B | 5.500 | 06/24/25 | HUF | 89,380 | 422,390 | |||||||||||
Bonds, Ser. 31/A | 3.250 | 10/22/31 | HUF | 88,930 | 349,035 | |||||||||||
|
| |||||||||||||||
1,411,622 | ||||||||||||||||
Indonesia 10.5% | ||||||||||||||||
Indonesia Treasury Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. FR53 | 8.250 | 07/15/21 | IDR | 7,820,000 | 590,189 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR56 | 8.375 | 09/15/26 | IDR | 17,020,000 | 1,323,064 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR59 | 7.000 | 05/15/27 | IDR | 4,890,000 | 354,119 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR61 | 7.000 | 05/15/22 | IDR | 3,000,000 | 218,868 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR63 | 5.625 | 05/15/23 | IDR | 250,000 | 17,367 | |||||||||||
Sr. Unsec’d Notes, Ser. FR64 | 6.125 | 05/15/28 | IDR | 10,305,000 | 696,259 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR65 | 6.625 | 05/15/33 | IDR | 5,700,000 | 387,784 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR68 | 8.375 | 03/15/34 | IDR | 13,300,000 | 1,040,101 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR70 | 8.375 | 03/15/24 | IDR | 7,910,000 | 609,594 | |||||||||||
Sr. Unsec’d. Notes, Ser. FR71 | 9.000 | 03/15/29 | IDR | 7,310,000 | 600,990 |
See Notes to Financial Statements.
12 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Indonesia (cont’d.) | ||||||||||||||||
Indonesia Treasury Bond, (cont’d.) | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. FR72 | 8.250 | % | 05/15/36 | IDR | 12,850,000 | $ | 989,669 | |||||||||
Sr. Unsec’d. Notes, Ser. FR73 | 8.750 | 05/15/31 | IDR | 2,705,000 | 218,247 | |||||||||||
|
| |||||||||||||||
7,046,251 | ||||||||||||||||
Iraq 1.0% | ||||||||||||||||
Iraq International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.752 | 03/09/23 | 480 | 479,649 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.752 | 03/09/23 | 200 | 199,853 | ||||||||||||
|
| |||||||||||||||
679,502 | ||||||||||||||||
Malaysia 7.2% | ||||||||||||||||
Malaysia Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, Ser. 0111 | 4.160 | 07/15/21 | MYR | 130 | 33,510 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0116 | 3.800 | 08/17/23 | MYR | 2,000 | 505,125 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0118 | 3.882 | 03/14/25 | MYR | 1,400 | 354,095 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0216 | 4.736 | 03/15/46 | MYR | 560 | 138,235 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0217 | 4.059 | 09/30/24 | MYR | 335 | 85,949 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0311 | 4.392 | 04/15/26 | MYR | 660 | 171,034 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0313 | 3.480 | 03/15/23 | MYR | 1,750 | 435,579 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0315 | 3.659 | 10/15/20 | MYR | 520 | 132,525 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0316 | 3.900 | 11/30/26 | MYR | 3,070 | 767,796 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0411 | 4.232 | 06/30/31 | MYR | 1,770 | 437,486 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0413 | 3.844 | 04/15/33 | MYR | 1,335 | 310,761 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0417 | 3.899 | 11/16/27 | MYR | 130 | 32,458 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0515 | 3.759 | 03/15/19 | MYR | 520 | 132,828 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0517 | 3.441 | 02/15/21 | MYR | 2,250 | 569,145 | |||||||||||
Sr. Unsec’d. Notes, Ser. 0902 | 4.378 | 11/29/19 | MYR | 710 | 183,078 | |||||||||||
Malaysia Government Investment Issue Sr. Unsec’d. Notes, Ser. 0416 | 3.226 | 04/15/20 | MYR | 2,180 | 549,697 | |||||||||||
|
| |||||||||||||||
4,839,301 | ||||||||||||||||
Mexico 10.3% | ||||||||||||||||
Mexican Bonos, | ||||||||||||||||
Bonds, Ser. M | 6.500 | 06/09/22 | MXN | 25,750 | 1,333,718 | |||||||||||
Bonds, Ser. M | 8.000 | 06/11/20 | MXN | 6,550 | 355,020 | |||||||||||
Bonds, Ser. M | 8.000 | 11/07/47 | MXN | 19,850 | 1,101,108 | |||||||||||
Bonds, Ser. M 20 | 7.500 | 06/03/27 | MXN | 59,311 | 3,172,918 | |||||||||||
Bonds, Ser. M 30 | 10.000 | 11/20/36 | MXN | 11,233 | 741,954 | |||||||||||
Sr. Unsec’d. Notes, Ser. M | 8.000 | 12/07/23 | MXN | 3,127 | 172,025 | |||||||||||
|
| |||||||||||||||
6,876,743 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Mongolia 0.7% | ||||||||||||||||
Mongolia Government International Bond, Sr. Unsec’d. Notes, MTN | 10.875 | % | 04/06/21 | 400 | $ | 457,175 | ||||||||||
Nigeria 0.5% | ||||||||||||||||
Nigeria Government International Bond, | 5.625 | 06/27/22 | 350 | 356,125 | ||||||||||||
Pakistan 0.9% | ||||||||||||||||
Pakistan Government International Bond, | 8.250 | 04/15/24 | 200 | 207,831 | ||||||||||||
Third Pakistan International Sukuk Co. Ltd/The, Sr. Unsec’d. Notes, 144A | 5.625 | 12/05/22 | 400 | 385,485 | ||||||||||||
|
| |||||||||||||||
593,316 | ||||||||||||||||
Peru 2.8% | ||||||||||||||||
Peru Government Bond, | ||||||||||||||||
Bonds | 6.950 | 08/12/31 | PEN | 190 | 65,983 | |||||||||||
Sr. Unsec’d. Notes, 144A | 6.150 | 08/12/32 | PEN | 285 | 91,732 | |||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.200 | 09/12/23 | PEN | 233 | 75,028 | |||||||||||
Sr. Unsec’d. Notes | 6.950 | 08/12/31 | PEN | 4,735 | 1,644,373 | |||||||||||
|
| |||||||||||||||
1,877,116 | ||||||||||||||||
Philippines 0.1% | ||||||||||||||||
Philippine Government Bond, Sr. Unsec’d. Notes | 3.625 | 09/09/25 | PHP | 5,600 | 94,147 | |||||||||||
Poland 4.7% | ||||||||||||||||
Republic of Poland Government Bond, | ||||||||||||||||
Bonds, Ser. 0727 | 2.500 | 07/25/27 | PLN | 9,750 | 2,656,502 | |||||||||||
Bonds, Ser. 0123 | 2.500 | 01/25/23 | PLN | 810 | 232,118 | |||||||||||
Bonds, Ser. 1023 | 4.000 | 10/25/23 | PLN | 870 | 266,613 | |||||||||||
|
| |||||||||||||||
3,155,233 | ||||||||||||||||
Romania 0.8% | ||||||||||||||||
Romania Government Bond, Bonds, Ser. 5YR | 3.250 | 03/22/21 | RON | 2,065 | 530,454 | |||||||||||
Russia 3.7% | ||||||||||||||||
Russian Federal Bond - OFZ, | ||||||||||||||||
Bonds, Ser. 6218 | 8.500 | 09/17/31 | RUB | 52,800 | 924,948 | |||||||||||
Bonds, Ser. 6219 | 7.750 | 09/16/26 | RUB | 29,850 | 492,034 | |||||||||||
Bonds, Ser. 6221 | 7.700 | 03/23/33 | RUB | 43,100 | 701,879 | |||||||||||
Bonds, Ser. 6222 | 7.100 | 10/16/24 | RUB | 20,650 | 330,223 | |||||||||||
|
| |||||||||||||||
2,449,084 |
See Notes to Financial Statements.
14 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Singapore 1.5% | ||||||||||||||||
Singapore Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 1.750 | % | 02/01/23 | SGD | 225 | $ | 166,443 | |||||||||
Sr. Unsec’d. Notes | 2.375 | 06/01/25 | SGD | 1,091 | 818,908 | |||||||||||
|
| |||||||||||||||
985,351 | ||||||||||||||||
South Africa 8.5% | ||||||||||||||||
Republic of South Africa Government Bond, | ||||||||||||||||
Bonds, Ser. 2032 | 8.250 | 03/31/32 | ZAR | 13,784 | 1,060,898 | |||||||||||
Bonds, Ser. 2044 | 8.750 | 01/31/44 | ZAR | 15,490 | 1,203,154 | |||||||||||
Bonds, Ser. 2048 | 8.750 | 02/28/48 | ZAR | 3,081 | 239,679 | |||||||||||
Bonds, Ser. 2040 | 9.000 | 01/31/40 | ZAR | 16,820 | 1,346,870 | |||||||||||
Bonds, Ser. R186 | 10.500 | 12/21/26 | ZAR | 20,227 | 1,851,036 | |||||||||||
|
| |||||||||||||||
5,701,637 | ||||||||||||||||
South Korea 0.5% |
| |||||||||||||||
Korea Treasury Bond, Sr. Unsec’d. Notes, Ser. 1906 | 1.500 | 06/10/19 | KRW | 350,000 | 326,301 | |||||||||||
Sri Lanka 0.3% |
| |||||||||||||||
Republic Of Sri Lanka, Sr. Unsec’d Notes | 6.250 | 07/27/21 | 200 | 205,840 | ||||||||||||
Thailand 4.1% |
| |||||||||||||||
Thailand Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.125 | 12/17/26 | THB | 11,900 | 367,230 | |||||||||||
Sr. Unsec’d. Notes | 2.875 | 06/17/46 | THB | 3,150 | 90,110 | |||||||||||
Sr. Unsec’d. Notes | 3.400 | 06/17/36 | THB | 31,850 | 1,045,292 | |||||||||||
Sr. Unsec’d. Notes | 3.625 | 06/16/23 | THB | 8,530 | 291,910 | |||||||||||
Sr. Unsec’d. Notes | 3.775 | 06/25/32 | THB | 600 | 20,739 | |||||||||||
Sr. Unsec’d. Notes | 3.875 | 06/13/19 | THB | 10,200 | 331,783 | |||||||||||
Sr. Unsec’d. Notes | 4.875 | 06/22/29 | THB | 15,170 | 578,655 | |||||||||||
|
| |||||||||||||||
2,725,719 | ||||||||||||||||
Turkey 4.6% |
| |||||||||||||||
Turkey Government Bond, | ||||||||||||||||
Bonds | 7.100 | 03/08/23 | TRY | 3,515 | 690,031 | |||||||||||
Bonds | 8.000 | 03/12/25 | TRY | 2,258 | 445,808 | |||||||||||
Bonds | 8.800 | 09/27/23 | TRY | 975 | 204,860 | |||||||||||
Bonds | 10.600 | 02/11/26 | TRY | 4,664 | 1,050,580 | |||||||||||
Turkey Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 5.625 | 03/30/21 | 100 | 103,129 | ||||||||||||
Sr. Unsec’d. Notes | 6.250 | 09/26/22 | 550 | 578,194 | ||||||||||||
|
| |||||||||||||||
3,072,602 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 15 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) |
| |||||||||||||||
Ukraine 1.0% |
| |||||||||||||||
Ukraine Government International Bond, Sr. Unsec’d. Notes | 7.750 | % | 09/01/22 | 665 | $ | 678,140 | ||||||||||
Uruguay 0.3% |
| |||||||||||||||
Uruguay Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.875 | 06/20/22 | UYU | 3,260 | 119,251 | |||||||||||
Sr. Unsec’d. Notes, 144A | 8.500 | 03/15/28 | UYU | 1,870 | 62,782 | |||||||||||
|
| |||||||||||||||
182,033 | ||||||||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS |
| 61,467,353 | ||||||||||||||
|
| |||||||||||||||
CORPORATE BONDS 4.8% |
| |||||||||||||||
Bermuda 0.3% |
| |||||||||||||||
Digicel Limited, Sr. Unsec’d. Notes | 6.750 | 03/01/23 | 235 | 214,776 | ||||||||||||
Brazil 1.4% |
| |||||||||||||||
Petrobras Global Finance BV, | ||||||||||||||||
Gtd. Notes | 6.250 | 03/17/24 | 865 | 909,980 | ||||||||||||
Gtd. Notes, 144A | 5.299 | 01/27/25 | 20 | 19,670 | ||||||||||||
|
| |||||||||||||||
929,650 | ||||||||||||||||
Mexico 1.8% |
| |||||||||||||||
America Movil SAB de CV, Sr. Unsec’d. Notes | 6.450 | 12/05/22 | MXN | 7,500 | 369,645 | |||||||||||
Petroleos Mexicanos, | ||||||||||||||||
Gtd. Notes, MTN | 4.625 | 09/21/23 | 280 | 276,351 | ||||||||||||
Gtd. Notes | 6.500 | 03/13/27 | 190 | 196,766 | ||||||||||||
Gtd. Notes, MTN | 6.875 | 08/04/26 | 125 | 133,875 | ||||||||||||
Gtd. Notes, 144A | 7.650 | 11/24/21 | MXN | 4,120 | 212,463 | |||||||||||
|
| |||||||||||||||
1,189,100 | ||||||||||||||||
Russia 0.3% |
| |||||||||||||||
Vnesheconombank Via VEB Finance PLC, Sr. Unsec’d. Notes | 5.942 | 11/21/23 | 200 | 207,718 | ||||||||||||
South Africa 0.7% |
| |||||||||||||||
Eskom Holding SOC Ltd., Sr. Unsec’d. Notes | 5.750 | 01/26/21 | 435 | 433,756 | ||||||||||||
Tunisia 0.3% |
| |||||||||||||||
Banque Centrale de Tunisie International Bond, Sr. Unsec’d. Notes | 5.625 | 02/17/24 | EUR | 180 | 220,988 | |||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS |
| 3,195,988 | ||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS |
| 64,663,341 | ||||||||||||||
|
|
See Notes to Financial Statements.
16 |
Description | Shares | Value | ||||||||||||||
SHORT-TERM INVESTMENTS 1.5% |
| |||||||||||||||
AFFILIATED MUTUAL FUNDS 1.4% |
| |||||||||||||||
Prudential Investment Portfolios 2 - PGIM Core | 574,168 | $ | 574,168 | |||||||||||||
Prudential Investment Portfolios 2 - PGIM Institutional | 402,577 | 402,577 | ||||||||||||||
|
| |||||||||||||||
TOTAL AFFILIATED MUTUAL FUNDS | 976,745 | |||||||||||||||
|
| |||||||||||||||
OPTIONS PURCHASED~* 0.1% | ||||||||||||||||
TOTAL OPTIONS PURCHASED | 46,035 | |||||||||||||||
|
| |||||||||||||||
TOTAL SHORT-TERM INVESTMENTS | 1,022,780 | |||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN 98.2% | 65,686,121 | |||||||||||||||
|
| |||||||||||||||
OPTIONS WRITTEN~* (0.0)% | ||||||||||||||||
TOTAL OPTIONS WRITTEN | (25,087 | ) | ||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 98.2% | 65,661,034 | |||||||||||||||
Other assets in excess of liabilities(z) 1.8% | 1,201,131 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 66,862,165 | ||||||||||||||
|
|
The following abbreviations are used in the semiannual report:
M—Monthly payment frequency for swaps
Q—Quarterly payment frequency for swaps
S—Semiannual payment frequency for swaps
144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.
LIBOR—London Interbank Offered Rate
MTN—Medium Term Note
OTC—Over-the-counter
ARS—Argentine Peso
AUD—Australian Dollar
BRL—Brazilian Real
CAD—Canadian Dollar
CHF—Swiss Franc
CLP—Chilean Peso
CNH—Chinese Renminbi (offshore)
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 17 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
COP—Colombian Peso
CZK—Czech Koruna
EUR—Euro
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
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
UYU—Uruguayan Peso
ZAR—South African Rand
* | Non-income producing security. |
~ | See tables subsequent to the Schedule of Investments for options detail. |
# | Principal or notional amount is shown in U.S. dollars unless otherwise stated. |
(a) | All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $384,400; cash collateral of $401,905 (included with liabilities) was received with which the Series purchased highly liquid short-term investments. Securities on loan are subject to contractual netting arrangements. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
(z) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end, with the exception of options which are included in total investments, net of written options, at market value. |
OTC Options Purchased: |
| |||||||||||||||||||||||
OTC Traded |
| |||||||||||||||||||||||
Description | Call/Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs BRL | Call | Citigroup Global Markets | 02/21/19 | 4.15 | — | EUR 200 | $ | 20,384 | ||||||||||||||||
Currency Option USD vs MXN | Call | UBS AG | 01/25/19 | 18.75 | — | 400 | 25,651 | |||||||||||||||||
|
| |||||||||||||||||||||||
Total Options Purchased | $ | 46,035 | ||||||||||||||||||||||
|
|
See Notes to Financial Statements.
18 |
OTC Options Written: |
| |||||||||||||||||||||||
OTC Traded |
| |||||||||||||||||||||||
Description | Call/Put | Counterparty | Expiration Date | Strike | Contracts | Notional Amount (000)# | Value | |||||||||||||||||
Currency Option EUR vs BRL | Call | Citigroup Global Markets | 02/21/19 | 4.55 | — | EUR 200 | $ | (9,293 | ) | |||||||||||||||
Currency Option USD vs MXN | Call | UBS AG | �� | 01/25/19 | 20.75 | — | 400 | (9,869 | ) | |||||||||||||||
Currency Option EUR vs BRL | Put | Citigroup Global Markets | 02/21/19 | 3.90 | — | EUR 200 | (1,709 | ) | ||||||||||||||||
Currency Option USD vs MXN | Put | UBS AG | 01/25/19 | 17.75 | — | 400 | (4,216 | ) | ||||||||||||||||
|
| |||||||||||||||||||||||
Total Options Written |
| $ | (25,087 | ) | ||||||||||||||||||||
|
|
Forward foreign currency exchange contracts outstanding at April 30, 2018:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts: |
| |||||||||||||||||||||
Argentine Peso, | ||||||||||||||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | ARS | 11,931 | $ | 586,866 | $ | 579,788 | $ | — | $ | (7,078 | ) | ||||||||||
Expiring 05/24/2018 | BNP Paribas | ARS | 3,222 | 156,388 | 153,215 | — | (3,173 | ) | ||||||||||||||
Australian Dollar, | ||||||||||||||||||||||
Expiring 07/12/2018 | Citigroup Global Markets | AUD | 462 | 359,524 | 348,281 | — | (11,243 | ) | ||||||||||||||
Brazilian Real, | ||||||||||||||||||||||
Expiring 05/03/2018 | Barclays Capital Group | BRL | 130 | 39,815 | 37,165 | — | (2,650 | ) | ||||||||||||||
Expiring 05/03/2018 | Barclays Capital Group | BRL | 155 | 47,273 | 44,227 | — | (3,046 | ) | ||||||||||||||
Expiring 05/03/2018 | Barclays Capital Group | BRL | 684 | 205,785 | 195,053 | — | (10,732 | ) | ||||||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | BRL | 494 | 148,298 | 141,000 | — | (7,298 | ) | ||||||||||||||
Expiring 05/03/2018 | Goldman Sachs & Co. | BRL | 752 | 226,820 | 214,473 | — | (12,347 | ) | ||||||||||||||
Expiring 05/03/2018 | JPMorgan Chase | BRL | 342 | 103,583 | 97,459 | — | (6,124 | ) | ||||||||||||||
Expiring 05/03/2018 | JPMorgan Chase | BRL | 448 | 136,792 | 127,901 | — | (8,891 | ) | ||||||||||||||
Expiring 05/03/2018 | Morgan Stanley | BRL | 410 | 125,889 | 116,979 | — | (8,910 | ) | ||||||||||||||
Expiring 05/03/2018 | UBS AG | BRL | 91 | 27,565 | 26,081 | — | (1,484 | ) | ||||||||||||||
Expiring 05/03/2018 | UBS AG | BRL | 489 | 146,755 | 139,667 | — | (7,088 | ) | ||||||||||||||
Expiring 07/03/2018 | Goldman Sachs & Co. | BRL | 1,275 | 363,638 | 361,647 | — | (1,991 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 19 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Brazilian Real, (cont’d.) | ||||||||||||||||||||||
Expiring 07/03/2018 | JPMorgan Chase | BRL | 259 | $ | 74,002 | $ | 73,576 | $ | — | $ | (426 | ) | ||||||||||
Expiring 02/25/2019 | Citigroup Global Markets | BRL | 857 | 253,700 | 238,941 | — | (14,759 | ) | ||||||||||||||
British Pound, | ||||||||||||||||||||||
Expiring 07/26/2018 | JPMorgan Chase | GBP | 247 | 345,882 | 341,302 | — | (4,580 | ) | ||||||||||||||
Chilean Peso, | ||||||||||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | CLP | 129,290 | 214,756 | 210,748 | — | (4,008 | ) | ||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | CLP | 323,430 | 538,538 | 527,206 | — | (11,332 | ) | ||||||||||||||
Expiring 07/13/2018 | JPMorgan Chase | CLP | 24,668 | 40,365 | 40,210 | — | (155 | ) | ||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||
Expiring 07/24/2018 | Barclays Capital Group | CNH | 40 | 6,416 | 6,369 | — | (47 | ) | ||||||||||||||
Colombian Peso, | ||||||||||||||||||||||
Expiring 06/15/2018 | Barclays Capital Group | COP | 3,186,248 | 1,106,835 | 1,133,619 | 26,784 | — | |||||||||||||||
Expiring 06/15/2018 | Citigroup Global Markets | COP | 248,935 | 90,932 | 88,567 | — | (2,365 | ) | ||||||||||||||
Expiring 06/15/2018 | Citigroup Global Markets | COP | 488,136 | 170,680 | 173,671 | 2,991 | — | |||||||||||||||
Expiring 06/15/2018 | Citigroup Global Markets | COP | 596,077 | 214,756 | 212,075 | — | (2,681 | ) | ||||||||||||||
Expiring 06/15/2018 | Citigroup Global Markets | COP | 3,186,248 | 1,109,031 | 1,133,619 | 24,588 | — | |||||||||||||||
Expiring 06/15/2018 | Hong Kong & Shanghai Bank | COP | 839,000 | 293,255 | 298,504 | 5,249 | — | |||||||||||||||
Expiring 06/15/2018 | JPMorgan Chase | COP | 214,154 | 75,027 | 76,193 | 1,166 | — | |||||||||||||||
Expiring 06/15/2018 | JPMorgan Chase | COP | 623,176 | 222,008 | 221,717 | — | (291 | ) | ||||||||||||||
Expiring 06/15/2018 | JPMorgan Chase | COP | 823,572 | 296,249 | 293,015 | — | (3,234 | ) | ||||||||||||||
Expiring 06/15/2018 | UBS AG | COP | 59,583 | 21,086 | 21,199 | 113 | — | |||||||||||||||
Expiring 06/15/2018 | UBS AG | COP | 264,469 | 95,279 | 94,094 | — | (1,185 | ) | ||||||||||||||
Czech Koruna, | ||||||||||||||||||||||
Expiring 07/12/2018 | Citigroup Global Markets | CZK | 2,550 | 121,095 | 120,806 | — | (289 | ) | ||||||||||||||
Expiring 07/12/2018 | Citigroup Global Markets | CZK | 50,055 | 2,435,722 | 2,371,729 | — | (63,993 | ) | ||||||||||||||
Expiring 07/12/2018 | Hong Kong & Shanghai Bank | CZK | 6,989 | 333,869 | 331,166 | — | (2,703 | ) | ||||||||||||||
Expiring 07/12/2018 | JPMorgan Chase | CZK | 1,255 | 61,736 | 59,468 | — | (2,268 | ) |
See Notes to Financial Statements.
20 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Egyptian Pound, | ||||||||||||||||||||||
Expiring 09/27/2018 | Citigroup Global Markets | EGP | 4,643 | $ | 252,913 | $ | 255,709 | $ | 2,796 | $ | — | |||||||||||
Expiring 10/11/2018 | Citigroup Global Markets | EGP | 3,195 | 171,480 | 175,455 | 3,975 | — | |||||||||||||||
Expiring 10/11/2018 | JPMorgan Chase | EGP | 3,157 | 171,259 | 173,395 | 2,136 | — | |||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||
Expiring 07/24/2018 | Citigroup Global Markets | HUF | 27,778 | 107,640 | 107,535 | — | (105 | ) | ||||||||||||||
Expiring 07/24/2018 | Citigroup Global Markets | HUF | 34,413 | 134,077 | 133,224 | — | (853 | ) | ||||||||||||||
Expiring 07/24/2018 | Deutsche Bank AG | HUF | 675,873 | 2,695,300 | 2,616,507 | — | (78,793 | ) | ||||||||||||||
Indian Rupee, | ||||||||||||||||||||||
Expiring 07/20/2018 | Barclays Capital Group | INR | 50,883 | 766,107 | 755,799 | — | (10,308 | ) | ||||||||||||||
Expiring 07/20/2018 | Citigroup Global Markets | INR | 3,392 | 51,471 | 50,389 | — | (1,082 | ) | ||||||||||||||
Expiring 07/20/2018 | Deutsche Bank AG | INR | 53,257 | 802,486 | 791,068 | — | (11,418 | ) | ||||||||||||||
Expiring 07/20/2018 | Morgan Stanley | INR | 14,209 | 216,811 | 211,053 | — | (5,758 | ) | ||||||||||||||
Expiring 07/20/2018 | UBS AG | INR | 3,930 | 58,000 | 58,368 | 368 | — | |||||||||||||||
Expiring 07/20/2018 | UBS AG | INR | 11,619 | 173,000 | 172,592 | — | (408 | ) | ||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||
Expiring 07/16/2018 | Barclays Capital Group | IDR | 1,470,560 | 104,000 | 104,767 | 767 | — | |||||||||||||||
Expiring 07/16/2018 | Barclays Capital Group | IDR | 3,510,967 | 248,000 | 250,132 | 2,132 | — | |||||||||||||||
Expiring 07/16/2018 | Citigroup Global Markets | IDR | 824,772 | 59,490 | 58,759 | — | (731 | ) | ||||||||||||||
Expiring 07/16/2018 | JPMorgan Chase | IDR | 3,078,900 | 220,000 | 219,350 | — | (650 | ) | ||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||
Expiring 07/26/2018 | Morgan Stanley | ILS | 10 | 2,889 | 2,877 | — | (12 | ) | ||||||||||||||
Japanese Yen, | ||||||||||||||||||||||
Expiring 07/26/2018 | Citigroup Global Markets | JPY | 38,776 | 361,022 | 356,901 | — | (4,121 | ) | ||||||||||||||
Malaysian Ringgit, | ||||||||||||||||||||||
Expiring 05/22/2018 | Barclays Capital Group | MYR | 98 | 24,889 | 24,952 | 63 | — | |||||||||||||||
Expiring 05/22/2018 | UBS AG | MYR | 292 | 75,672 | 74,319 | — | (1,353 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 21 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||
Expiring 06/28/2018 | Citigroup Global Markets | MXN | 2,780 | $ | 149,865 | $ | 147,251 | $ | — | $ | (2,614 | ) | ||||||||||
Expiring 06/28/2018 | Citigroup Global Markets | MXN | 6,532 | 358,342 | 345,985 | — | (12,357 | ) | ||||||||||||||
Expiring 06/28/2018 | Goldman Sachs & Co. | MXN | 8,945 | 470,558 | 473,815 | 3,257 | — | |||||||||||||||
Expiring 06/28/2018 | Hong Kong & Shanghai Bank | MXN | 5,793 | 312,238 | 306,833 | — | (5,405 | ) | ||||||||||||||
Expiring 06/28/2018 | JPMorgan Chase | MXN | 455 | 24,436 | 24,118 | — | (318 | ) | ||||||||||||||
Expiring 06/28/2018 | Morgan Stanley | MXN | 2,319 | 125,000 | 122,820 | — | (2,180 | ) | ||||||||||||||
Expiring 06/28/2018 | Morgan Stanley | MXN | 4,376 | 236,623 | 231,810 | — | (4,813 | ) | ||||||||||||||
Expiring 01/29/2019 | JPMorgan Chase | MXN | 586 | 30,823 | 30,028 | — | (795 | ) | ||||||||||||||
Expiring 01/29/2019 | UBS AG | MXN | 3,778 | 191,000 | 193,672 | 2,672 | — | |||||||||||||||
Expiring 01/29/2019 | UBS AG | MXN | 4,131 | 209,000 | 211,780 | 2,780 | — | |||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | TWD | 2,464 | 84,000 | 83,726 | — | (274 | ) | ||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | TWD | 3,696 | 127,000 | 125,615 | — | (1,385 | ) | ||||||||||||||
Expiring 07/13/2018 | Toronto Dominion | TWD | 3,795 | 131,000 | 128,971 | — | (2,029 | ) | ||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 2,725 | 92,000 | 92,615 | 615 | — | |||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 2,795 | 95,000 | 94,968 | — | (32 | ) | ||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 3,351 | 115,000 | 113,891 | — | (1,109 | ) | ||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 5,331 | 183,000 | 181,166 | — | (1,834 | ) | ||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 6,568 | 223,000 | 223,221 | 221 | — | |||||||||||||||
Expiring 07/13/2018 | UBS AG | TWD | 7,447 | 255,000 | 253,086 | — | (1,914 | ) | ||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | PEN | 143 | 44,135 | 43,900 | — | (235 | ) | ||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | PEN | 3,276 | 1,012,429 | 1,004,945 | — | (7,484 | ) | ||||||||||||||
Expiring 07/13/2018 | JPMorgan Chase | PEN | 153 | 47,093 | 46,931 | — | (162 | ) | ||||||||||||||
Philippine Peso, | ||||||||||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 16,746 | 320,000 | 322,843 | 2,843 | — | |||||||||||||||
Expiring 06/14/2018 | Deutsche Bank AG | PHP | 18,796 | 360,814 | 362,376 | 1,562 | — |
See Notes to Financial Statements.
22 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Polish Zloty, | ||||||||||||||||||||||
Expiring 07/24/2018 | Hong Kong & Shanghai Bank | PLN | 464 | $ | 133,271 | $ | 132,480 | $ | — | $ | (791 | ) | ||||||||||
Expiring 07/24/2018 | UBS AG | PLN | 14,883 | 4,394,465 | 4,247,281 | — | (147,184 | ) | ||||||||||||||
Romanian Leu, | ||||||||||||||||||||||
Expiring 07/24/2018 | Citigroup Global Markets | RON | 182 | 47,091 | 47,074 | — | (17 | ) | ||||||||||||||
Expiring 07/24/2018 | Citigroup Global Markets | RON | 5,355 | 1,423,651 | 1,387,387 | — | (36,264 | ) | ||||||||||||||
Russian Ruble, | ||||||||||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | RUB | 13,540 | 217,358 | 213,082 | — | (4,276 | ) | ||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | RUB | 183,019 | 3,142,355 | 2,880,296 | — | (262,059 | ) | ||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||
Expiring 05/11/2018 | Bank of America | SGD | 359 | 269,720 | 270,453 | 733 | — | |||||||||||||||
Expiring 05/11/2018 | Deutsche Bank AG | SGD | 359 | 270,268 | 270,452 | 184 | — | |||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 20 | 15,228 | 15,027 | — | (201 | ) | ||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 43 | 32,864 | 32,485 | — | (379 | ) | ||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 54 | 41,382 | 40,818 | — | (564 | ) | ||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 658 | 496,586 | 496,606 | 20 | — | |||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 45 | 34,304 | 33,898 | — | (406 | ) | ||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 48 | 36,000 | 35,894 | — | (106 | ) | ||||||||||||||
South African Rand, | ||||||||||||||||||||||
Expiring 06/12/2018 | Barclays Capital Group | ZAR | 2,426 | 206,202 | 193,511 | — | (12,691 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | ZAR | 1,324 | 108,720 | 105,559 | — | (3,161 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | ZAR | 1,426 | 119,878 | 113,693 | — | (6,185 | ) | ||||||||||||||
Expiring 06/12/2018 | Goldman Sachs & Co. | ZAR | 3,313 | 280,686 | 264,200 | — | (16,486 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 256 | 21,754 | 20,426 | — | (1,328 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 602 | 49,739 | 48,045 | — | (1,694 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 1,632 | 135,681 | 130,160 | — | (5,521 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 1,675 | 137,755 | 133,574 | — | (4,181 | ) | ||||||||||||||
Expiring 06/12/2018 | Morgan Stanley | ZAR | 2,199 | 183,908 | 175,410 | — | (8,498 | ) | ||||||||||||||
Expiring 06/12/2018 | Toronto Dominion | ZAR | 3,327 | 276,063 | 265,356 | — | (10,707 | ) | ||||||||||||||
Expiring 06/12/2018 | UBS AG | ZAR | 507 | 42,371 | 40,414 | — | (1,957 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 23 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
South Korean Won, | ||||||||||||||||||||||
Expiring 05/09/2018 | Barclays Capital Group | KRW | 381,922 | $ | 362,481 | $ | 357,669 | $ | — | $ | (4,812 | ) | ||||||||||
Expiring 05/09/2018 | Citigroup Global Markets | KRW | 55,139 | 51,704 | 51,638 | — | (66 | ) | ||||||||||||||
Expiring 05/09/2018 | Deutsche Bank AG | KRW | 3,862 | 3,573 | 3,617 | 44 | — | |||||||||||||||
Expiring 05/09/2018 | Deutsche Bank AG | KRW | 237,463 | 219,345 | 222,383 | 3,038 | — | |||||||||||||||
Thai Baht, | ||||||||||||||||||||||
Expiring 05/11/2018 | Barclays Capital Group | THB | 643 | 20,514 | 20,393 | — | (121 | ) | ||||||||||||||
Expiring 05/11/2018 | BNP Paribas | THB | 36,000 | 1,144,252 | 1,141,049 | — | (3,203 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 1,092 | 35,064 | 34,602 | — | (462 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 1,521 | 48,913 | 48,206 | — | (707 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 1,772 | 56,000 | 56,161 | 161 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,423 | 77,680 | 76,794 | — | (886 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,804 | 89,888 | 88,885 | — | (1,003 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,930 | 93,000 | 92,853 | — | (147 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 4,294 | 136,000 | 136,104 | 104 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 4,841 | 154,000 | 153,444 | — | (556 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 7,523 | 242,000 | 238,442 | — | (3,558 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 11,377 | 361,701 | 360,601 | — | (1,100 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 64,781 | 2,056,206 | 2,053,279 | — | (2,927 | ) | ||||||||||||||
Expiring 05/11/2018 | Hong Kong & Shanghai Bank | THB | 3,314 | 106,247 | 105,054 | — | (1,193 | ) | ||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | THB | 1,640 | 52,465 | 51,993 | — | (472 | ) |
See Notes to Financial Statements.
24 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||
Expiring 06/12/2018 | Barclays Capital Group | TRY | 606 | $ | 143,809 | $ | 147,087 | $ | 3,278 | $ | — | |||||||||||
Expiring 06/12/2018 | Barclays Capital Group | TRY | 1,394 | 343,670 | 338,526 | — | (5,144 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 89 | 21,900 | 21,726 | — | (174 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 90 | 22,208 | 21,929 | — | (279 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 180 | 43,900 | 43,665 | — | (235 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 231 | 56,389 | 56,032 | — | (357 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 350 | 86,647 | 85,085 | — | (1,562 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 899 | 218,570 | 218,183 | — | (387 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,036 | 263,242 | 251,463 | — | (11,779 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,288 | 312,918 | 312,778 | — | (140 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,338 | 332,654 | 324,904 | — | (7,750 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,466 | 362,550 | 355,926 | — | (6,624 | ) | ||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 8,596 | 2,197,132 | 2,087,107 | — | (110,025 | ) | ||||||||||||||
Expiring 06/12/2018 | Goldman Sachs & Co. | TRY | 43 | 10,403 | 10,416 | 13 | — | |||||||||||||||
Expiring 06/12/2018 | Goldman Sachs & Co. | TRY | 270 | 65,622 | 65,654 | 32 | — | |||||||||||||||
Expiring 06/12/2018 | Goldman Sachs & Co. | TRY | 1,081 | 259,500 | 262,490 | 2,990 | — | |||||||||||||||
Expiring 06/12/2018 | Morgan Stanley | TRY | 363 | 89,762 | 88,224 | — | (1,538 | ) | ||||||||||||||
Expiring 06/12/2018 | UBS AG | TRY | 801 | 197,730 | 194,364 | — | (3,366 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
$ | 45,147,011 | $ | 44,182,554 | $ | 97,675 | $ | (1,062,132 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 25 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts: |
| |||||||||||||||||||||
Argentine Peso, | ||||||||||||||||||||||
Expiring 05/03/2018 | BNP Paribas | ARS | 2,313 | $ | 112,840 | $ | 112,411 | $ | 429 | $ | — | |||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | ARS | 6,148 | 300,000 | 298,744 | 1,256 | — | |||||||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | ARS | 4,139 | 201,467 | 201,142 | 325 | — | |||||||||||||||
Expiring 05/24/2018 | Citigroup Global Markets | ARS | 669 | 31,333 | 31,807 | — | (474 | ) | ||||||||||||||
Australian Dollar, | ||||||||||||||||||||||
Expiring 07/12/2018 | Citigroup Global Markets | AUD | 466 | 358,369 | 350,966 | 7,403 | — | |||||||||||||||
Brazilian Real, | ||||||||||||||||||||||
Expiring 05/03/2018 | Bank of America | BRL | 321 | 94,210 | 91,636 | 2,574 | — | |||||||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | BRL | 1,474 | 429,512 | 420,515 | 8,997 | — | |||||||||||||||
Expiring 05/03/2018 | Citigroup Global Markets | BRL | 125 | 36,620 | 35,528 | 1,092 | — | |||||||||||||||
Expiring 05/03/2018 | Goldman Sachs & Co. | BRL | 1,275 | 365,504 | 363,829 | 1,675 | — | |||||||||||||||
Expiring 05/03/2018 | Goldman Sachs & Co. | BRL | 398 | 117,349 | 113,576 | 3,773 | — | |||||||||||||||
Expiring 05/03/2018 | UBS AG | BRL | 403 | 117,000 | 114,921 | 2,079 | — | |||||||||||||||
Expiring 07/03/2018 | BNP Paribas | BRL | 1,240 | 352,171 | 351,635 | 536 | — | |||||||||||||||
Chilean Peso, | ||||||||||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | CLP | 78,137 | 128,771 | 127,367 | 1,404 | — | |||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | CLP | 65,934 | 109,000 | 107,476 | 1,524 | — | |||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | CLP | 37,779 | 62,020 | 61,582 | 438 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | CLP | 380,882 | 628,331 | 620,855 | 7,476 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | CLP | 87,411 | 143,332 | 142,484 | 848 | — | |||||||||||||||
Expiring 07/13/2018 | UBS AG | CLP | 53,413 | 89,000 | 87,066 | 1,934 | — | |||||||||||||||
Colombian Peso, | ||||||||||||||||||||||
Expiring 06/15/2018 | Citigroup Global Markets | COP | 402,696 | 141,000 | 143,273 | — | (2,273 | ) | ||||||||||||||
Expiring 06/15/2018 | UBS AG | COP | 948,179 | 336,472 | 337,348 | — | (876 | ) |
See Notes to Financial Statements.
26 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Czech Koruna, | ||||||||||||||||||||||
Expiring 07/12/2018 | Morgan Stanley | CZK | 4,612 | $ | 220,107 | $ | 218,507 | $ | 1,600 | $ | — | |||||||||||
Expiring 07/12/2018 | Morgan Stanley | CZK | 1,224 | 59,000 | 57,997 | 1,003 | — | |||||||||||||||
Expiring 07/12/2018 | UBS AG | CZK | 7,098 | 336,374 | 336,323 | 51 | — | |||||||||||||||
Euro, | ||||||||||||||||||||||
Expiring 07/26/2018 | Citigroup Global Markets | EUR | 554 | 672,748 | 673,300 | — | (552 | ) | ||||||||||||||
Expiring 07/26/2018 | Goldman Sachs & Co. | EUR | 81 | 100,593 | 98,810 | 1,783 | — | |||||||||||||||
Expiring 07/26/2018 | Toronto Dominion | EUR | 132 | 162,436 | 160,507 | 1,929 | — | |||||||||||||||
Expiring 02/25/2019 | Citigroup Global Markets | EUR | 200 | 253,730 | 247,817 | 5,913 | — | |||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||
Expiring 07/24/2018 | Morgan Stanley | HUF | 59,160 | 230,216 | 229,025 | 1,191 | — | |||||||||||||||
Expiring 07/24/2018 | Morgan Stanley | HUF | 26,725 | 104,000 | 103,459 | 541 | — | |||||||||||||||
Indian Rupee, | ||||||||||||||||||||||
Expiring 07/20/2018 | UBS AG | INR | 7,319 | 108,268 | 108,714 | — | (446 | ) | ||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||
Expiring 07/16/2018 | Citigroup Global Markets | IDR | 1,407,410 | 101,669 | 100,268 | 1,401 | — | |||||||||||||||
Expiring 07/16/2018 | JPMorgan Chase | IDR | 1,792,078 | 127,823 | 127,673 | 150 | — | |||||||||||||||
Expiring 07/16/2018 | UBS AG | IDR | 6,009,963 | 427,756 | 428,168 | — | (412 | ) | ||||||||||||||
Israeli Shekel, | ||||||||||||||||||||||
Expiring 07/26/2018 | Citigroup Global Markets | ILS | 3,772 | 1,069,667 | 1,053,616 | 16,051 | — | |||||||||||||||
Japanese Yen, | ||||||||||||||||||||||
Expiring 07/26/2018 | Citigroup Global Markets | JPY | 39,026 | 361,021 | 359,206 | 1,815 | — | |||||||||||||||
Malaysian Ringgit, | ||||||||||||||||||||||
Expiring 05/22/2018 | Barclays Capital Group | MYR | 334 | 85,000 | 84,975 | 25 | — | |||||||||||||||
Expiring 05/22/2018 | Barclays Capital Group | MYR | 164 | 42,371 | 41,727 | 644 | — | |||||||||||||||
Expiring 05/22/2018 | Barclays Capital Group | MYR | 58 | 14,943 | 14,841 | 102 | — | |||||||||||||||
Expiring 07/26/2018 | Barclays Capital Group | MYR | 1,397 | 356,654 | 355,173 | 1,481 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 27 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Mexican Peso, | ||||||||||||||||||||||
Expiring 06/28/2018 | Bank of America | MXN | 3,961 | $ | 214,717 | $ | 209,799 | $ | 4,918 | $ | — | |||||||||||
Expiring 06/28/2018 | Citigroup Global Markets | MXN | 2,164 | 114,999 | 114,635 | 364 | — | |||||||||||||||
Expiring 06/28/2018 | Goldman Sachs & Co. | MXN | 5,776 | 312,931 | 305,953 | 6,978 | — | |||||||||||||||
Expiring 06/28/2018 | Morgan Stanley | MXN | 9,284 | 487,420 | 491,754 | — | (4,334 | ) | ||||||||||||||
Expiring 06/28/2018 | UBS AG | MXN | 2,221 | 120,051 | 117,651 | 2,400 | — | |||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | TWD | 37,209 | 1,284,082 | 1,264,495 | 19,587 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | TWD | 1,746 | 60,221 | 59,329 | 892 | — | |||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | PEN | 236 | 73,240 | 72,474 | 766 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | PEN | 1,173 | 363,815 | 359,719 | 4,096 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | PEN | 1,154 | 356,584 | 354,003 | 2,581 | — | |||||||||||||||
Expiring 07/13/2018 | UBS AG | PEN | 172 | 53,000 | 52,738 | 262 | — | |||||||||||||||
Philippine Peso, | ||||||||||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 17,965 | 340,186 | 346,356 | — | (6,170 | ) | ||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 12,759 | 244,000 | 245,979 | — | (1,979 | ) | ||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 6,495 | 124,000 | 125,209 | — | (1,209 | ) | ||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 5,673 | 108,000 | 109,366 | — | (1,366 | ) | ||||||||||||||
Expiring 06/14/2018 | Barclays Capital Group | PHP | 3,578 | 68,000 | 68,984 | — | (984 | ) | ||||||||||||||
Expiring 06/14/2018 | Deutsche Bank AG | PHP | 6,974 | 132,957 | 134,446 | — | (1,489 | ) | ||||||||||||||
Polish Zloty, | ||||||||||||||||||||||
Expiring 07/24/2018 | Citigroup Global Markets | PLN | 565 | 161,460 | 161,221 | 239 | — | |||||||||||||||
Expiring 07/24/2018 | Morgan Stanley | PLN | 1,445 | 414,051 | 412,301 | 1,750 | — | |||||||||||||||
Expiring 07/24/2018 | Morgan Stanley | PLN | 604 | 173,000 | 172,275 | 725 | — |
See Notes to Financial Statements.
28 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Romanian Leu, | ||||||||||||||||||||||
Expiring 07/24/2018 | Morgan Stanley | RON | 405 | $ | 105,218 | $ | 104,937 | $ | 281 | $ | — | |||||||||||
Russian Ruble, | ||||||||||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | RUB | 13,401 | 211,300 | 210,902 | 398 | — | |||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | RUB | 10,839 | 173,000 | 170,583 | 2,417 | — | |||||||||||||||
Expiring 07/13/2018 | Barclays Capital Group | RUB | 10,101 | 166,220 | 158,963 | 7,257 | — | |||||||||||||||
Expiring 07/13/2018 | Citigroup Global Markets | RUB | 9,746 | 153,734 | 153,376 | 358 | — | |||||||||||||||
Expiring 07/13/2018 | JPMorgan Chase | RUB | 5,129 | 80,730 | 80,721 | 9 | — | |||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | SGD | 223 | 169,488 | 167,878 | 1,610 | — | |||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 464 | 349,381 | 350,084 | — | (703 | ) | ||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | SGD | 240 | 182,895 | 180,770 | 2,125 | — | |||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 265 | 202,000 | 199,632 | 2,368 | — | |||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 93 | 70,000 | 69,896 | 104 | — | |||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 74 | 56,023 | 56,108 | — | (85 | ) | ||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 73 | 54,999 | 55,136 | — | (137 | ) | ||||||||||||||
Expiring 05/11/2018 | Morgan Stanley | SGD | 60 | 45,000 | 45,070 | — | (70 | ) | ||||||||||||||
South African Rand, | ||||||||||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | ZAR | 1,013 | 80,730 | 80,813 | — | (83 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 3,063 | 254,947 | 244,287 | 10,660 | — | |||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 2,030 | 169,583 | 161,896 | 7,687 | — | |||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 1,682 | 133,999 | 134,134 | �� | (135 | ) | ||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 1,137 | 95,317 | 90,678 | 4,639 | — | |||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | ZAR | 807 | 66,736 | 64,344 | 2,392 | — | |||||||||||||||
Expiring 06/12/2018 | Morgan Stanley | ZAR | 4,849 | 387,817 | 386,685 | 1,132 | — | |||||||||||||||
South Korean Won, | ||||||||||||||||||||||
Expiring 05/09/2018 | BNP Paribas | KRW | 198,505 | 184,000 | 185,899 | — | (1,899 | ) | ||||||||||||||
Expiring 05/09/2018 | BNP Paribas | KRW | 107,323 | 101,000 | 100,507 | 493 | — | |||||||||||||||
Expiring 05/09/2018 | BNP Paribas | KRW | 92,149 | 85,000 | 86,297 | — | (1,297 | ) | ||||||||||||||
Expiring 05/09/2018 | Citigroup Global Markets | KRW | 146,816 | 137,000 | 137,493 | — | (493 | ) | ||||||||||||||
Expiring 05/09/2018 | UBS AG | KRW | 29,996 | 27,787 | 28,091 | — | (304 | ) | ||||||||||||||
Swiss Franc, | ||||||||||||||||||||||
Expiring 07/24/2018 | Bank of America | CHF | 858 | 885,139 | 872,956 | 12,183 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 29 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d.): |
| |||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||
Expiring 05/11/2018 | BNP Paribas | THB | 4,260 | $ | 135,815 | $ | 135,039 | $ | 776 | $ | — | |||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 8,043 | 258,000 | 254,918 | 3,082 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 3,186 | 100,913 | 100,986 | — | (73 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 3,121 | 98,610 | 98,907 | — | (297 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,670 | 84,409 | 84,631 | — | (222 | ) | ||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,516 | 80,000 | 79,759 | 241 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,451 | 78,000 | 77,679 | 321 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 2,393 | 76,000 | 75,850 | 150 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 1,882 | 59,899 | 59,652 | 247 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 1,224 | 39,000 | 38,796 | 204 | — | |||||||||||||||
Expiring 05/11/2018 | Citigroup Global Markets | THB | 974 | 31,000 | 30,877 | 123 | — | |||||||||||||||
Expiring 05/11/2018 | JPMorgan Chase | THB | 17,008 | 544,592 | 539,075 | 5,517 | — | |||||||||||||||
Turkish Lira, | ||||||||||||||||||||||
Expiring 06/12/2018 | Barclays Capital Group | TRY | 812 | 204,740 | 197,041 | 7,699 | — | |||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,301 | 327,112 | 315,933 | 11,179 | — | |||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 1,067 | 264,271 | 258,983 | 5,288 | — | |||||||||||||||
Expiring 06/12/2018 | Citigroup Global Markets | TRY | 222 | 53,820 | 53,799 | 21 | — | |||||||||||||||
Expiring 06/12/2018 | JPMorgan Chase | TRY | 605 | 146,573 | 146,824 | — | (251 | ) | ||||||||||||||
Expiring 06/12/2018 | Morgan Stanley | TRY | 1,143 | 276,453 | 277,418 | — | (965 | ) | ||||||||||||||
Expiring 06/12/2018 | Morgan Stanley | TRY | 715 | 177,601 | 173,663 | 3,938 | — | |||||||||||||||
Expiring 06/12/2018 | UBS AG | TRY | 1,379 | 341,753 | 334,767 | 6,986 | — | |||||||||||||||
Expiring 06/12/2018 | UBS AG | TRY | 1,346 | 341,361 | 326,822 | 14,539 | — | |||||||||||||||
Expiring 06/12/2018 | UBS AG | TRY | 1,100 | 274,711 | 267,193 | 7,518 | — | |||||||||||||||
Expiring 06/12/2018 | UBS AG | TRY | 821 | 206,018 | 199,299 | 6,719 | — | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
$ | 23,025,085 | $ | 22,799,001 | $ | 255,662 | $ | (29,578 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
$ | 353,337 | $ | (1,091,710 | ) | ||||||||||||||||||
|
|
|
|
See Notes to Financial Statements.
30 |
Cross currency exchange contract outstanding at April 30, 2018:
Settlement | Type | Notional Amount (000) | In Exchange For (000) | Unrealized Appreciation | Unrealized Depreciation | Counterparty | ||||||||||||||||
OTC cross currency exchange contracts: |
| |||||||||||||||||||||
Expiring 07/24/2018 | Buy | CHF | 434 | EUR | 362 | $ | 218 | $ | — | Citigroup Global Markets | ||||||||||||
|
|
|
|
Interest rate swap agreements outstanding at April 30, 2018:
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Value at Trade Date | Value at April 30, 2018 | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
Centrally cleared swap agreements: | ||||||||||||||||||||||||
MXN | 14,650 | 06/04/25 | 6.470%(Q) | 28 Day Mexican Interbank Rate(2)(M) | $ | 12 | $ | (49,938 | ) | $ | (49,950 | ) | ||||||||||||
|
|
|
|
|
|
Notional Amount (000)# | Termination Date | Fixed Rate | Floating Rate | Fair Value | Upfront Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Counterparty | |||||||||||||||||||
OTC swap agreement: | ||||||||||||||||||||||||||
MYR 1,650 | 05/20/21 | 3.770%(Q) | 3 Month KLIBOR(2)(Q) | $ | (1,167 | ) | $ | — | $ | (1,167 | ) | JPMorgan Chase | ||||||||||||||
|
|
|
|
|
|
Cash of $170,000 has been segregated with Citigroup Global Markets to cover requirements for open centrally cleared swap contracts at April 30, 2018.
(1) | The Fund pays the fixed rate and receives the floating rate. |
(2) | The Fund pays the floating rate and receives the fixed rate. |
Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:
Premiums Paid | Premiums Received | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||
OTC Swap Agreements | $ | — | $ | — | $ | — | $ | (1,167 | ) | |||||||
|
|
|
|
|
|
|
|
Fair Value Measurements:
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—unadjusted 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.
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 31 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
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, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Sovereign Bonds | ||||||||||||
Argentina | $ | — | $ | 1,166,472 | $ | — | ||||||
Brazil | — | 7,818,919 | — | |||||||||
Chile | — | 1,947,049 | — | |||||||||
Colombia | — | 2,683,055 | — | |||||||||
Cote d’lvoire | — | 244,650 | — | |||||||||
Czech Republic | — | 1,256,630 | — | |||||||||
Ecuador | — | 673,300 | — | |||||||||
Egypt | — | 220,633 | — | |||||||||
El Salvador | — | 199,115 | — | |||||||||
Gabon | — | 194,918 | — | |||||||||
Ghana | — | 433,880 | — | |||||||||
Greece | — | 385,040 | — | |||||||||
Hungary | — | 1,411,622 | — | |||||||||
Indonesia | — | 7,046,251 | — | |||||||||
Iraq | — | 679,502 | — | |||||||||
Malaysia | — | 4,839,301 | — | |||||||||
Mexico | — | 6,876,743 | — | |||||||||
Mongolia | — | 457,175 | — | |||||||||
Nigeria | — | 356,125 | — | |||||||||
Pakistan | — | 593,316 | — | |||||||||
Peru | — | 1,877,116 | — | |||||||||
Philippines | — | 94,147 | — | |||||||||
Poland | — | 3,155,233 | — | |||||||||
Romania | — | 530,454 | — | |||||||||
Russia | — | 2,449,084 | — | |||||||||
Singapore | — | 985,351 | — | |||||||||
South Africa | — | 5,701,637 | — | |||||||||
South Korea | — | 326,301 | — | |||||||||
Sri Lanka | — | 205,840 | — | |||||||||
Thailand | — | 2,725,719 | — | |||||||||
Turkey | — | 3,072,602 | — | |||||||||
Ukraine | — | 678,140 | — | |||||||||
Uruguay | — | 182,033 | — |
See Notes to Financial Statements.
32 |
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Corporate Bonds | ||||||||||||
Bermuda | $ | — | $ | 214,776 | $ | — | ||||||
Brazil | — | 929,650 | — | |||||||||
Mexico | — | 1,189,100 | — | |||||||||
Russia | — | 207,718 | — | |||||||||
South Africa | — | 433,756 | — | |||||||||
Tunisia | — | 220,988 | — | |||||||||
Affiliated Mutual Funds | 976,745 | — | — | |||||||||
Options Purchased | — | 46,035 | — | |||||||||
Options Written | — | (25,087 | ) | — | ||||||||
Other Financial Instruments* | ||||||||||||
OTC Forward Foreign Currency Exchange Contracts | — | (738,373 | ) | — | ||||||||
OTC Cross Currency Exchange Contract | — | 218 | — | |||||||||
Centrally Cleared Interest Rate Swap Agreement | — | (49,950 | ) | — | ||||||||
OTC Interest Rate Swap Agreement | — | (1,167 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 976,745 | $ | 63,895,017 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule 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. |
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
Industry Classification:
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2018 were as follows:
Sovereign Bonds | 91.9 | % | ||
Oil & Gas | 2.6 | |||
Affiliated Mutual Funds (including 0.6% of collateral for securities on loan) | 1.4 | |||
Telecommunications | 0.9 | |||
Electric | 0.7 | |||
Banks | 0.6 | |||
Options Purchased | 0.1 | % | ||
|
| |||
98.2 | ||||
Options Written | (0.0 | )* | ||
Other assets in excess of liabilities | 1.8 | |||
|
| |||
100.0 | % | |||
|
|
* | Less than +/- 0.05% |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 33 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Series invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are foreign exchange contracts risk and interest rate contracts 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, 2018 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for as hedging instruments, carried at fair value | Asset Derivatives | Liability Derivatives | ||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Foreign exchange contracts | Unaffiliated investments | $46,035 | Options written outstanding, at value | $ | 25,087 | |||||||
Foreign exchange contracts | Unrealized appreciation on OTC cross currency exchange contracts | 218 | — | — | ||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | 353,337 | Unrealized depreciation on OTC forward foreign currency exchange contracts | 1,091,710 | ||||||||
Interest rate contracts | — | — | Due from/to broker—variation margin swaps | 49,950 | * | |||||||
Interest rate contracts | — | — | Unrealized depreciation on OTC swap agreements | 1,167 | ||||||||
|
|
|
| |||||||||
Total | $ | 399,590 | $ | 1,167,914 | ||||||||
|
|
|
|
* | Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities. |
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2018 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options Purchased(1) | Options Written | Forward & Cross Currency Contracts | Swaps | ||||||||||||
Foreign exchange contracts | $ | (34,937 | ) | $ | 44,931 | $ | 389,730 | $ | — | |||||||
Interest rate contracts | — | — | — | 15,999 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | (34,937 | ) | $ | 44,931 | $ | 389,730 | $ | 15,999 | |||||||
|
|
|
|
|
|
|
|
(1) | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
See Notes to Financial Statements.
34 |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not accounted for as hedging instruments, carried at fair value | Options Purchased(2) | Options Written | Forward & Cross Currency Exchange Contracts | Swaps | ||||||||||||
Foreign exchange contracts | $ | (11,878 | ) | $ | (13,068 | ) | $ | (566,060 | ) | $ | — | |||||
Interest rate contracts | — | — | — | (24,995 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | (11,878 | ) | $ | (13,068 | ) | $ | (566,060 | ) | $ | (24,995 | ) | ||||
|
|
|
|
|
|
|
|
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
For the six months ended April 30, 2018, the Series’ average volume of derivative activities is as follows:
Options Purchased(1) | Options Written(4) | Forward Foreign Currency Exchange Contracts— Purchased(3) | Forward Foreign Currency Exchange Contracts— Sold(3) | Cross Currency Exchange Contracts(2) | Interest Rate Swap Agreements(4) | |||||||||||||||||
$ | 90,196 | $ | 2,579,253 | $ | 31,441,999 | $ | 17,733,289 | $ | 371,706 | $ | 1,582,783 |
(1) | Cost. |
(2) | Value at Trade Date. |
(3) | Value at Settlement Date. |
(4) | Notional Amount in USD. |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series invested in OTC derivatives and entered into financial instruments/transactions 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 and financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(2) | Net Amount | |||||||||
Securities on Loan | $ | 384,400 | $ | (384,400 | ) | $ | — | |||||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 35 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Offsetting of OTC derivative assets and liabilities:
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts of Recognized Liabilities(1) | Net Amounts of Recognized Assets/ (Liabilities) | Collateral Pledged/ (Received)(2) | Net Amount | |||||||||||||||
Bank of America | $ | 20,408 | $ | — | $ | 20,408 | $ | — | $ | 20,408 | ||||||||||
Barclays Capital Group | 79,609 | (327,594 | ) | (247,985 | ) | — | (247,985 | ) | ||||||||||||
BNP Paribas | 2,234 | (9,572 | ) | (7,338 | ) | — | (7,338 | ) | ||||||||||||
Citigroup Global Markets | 138,790 | (368,107 | ) | (229,317 | ) | — | (229,317 | ) | ||||||||||||
Deutsche Bank AG | 4,828 | (91,700 | ) | (86,872 | ) | — | (86,872 | ) | ||||||||||||
Goldman Sachs & Co. | 20,501 | (30,824 | ) | (10,323 | ) | — | (10,323 | ) | ||||||||||||
Hong Kong & Shanghai Bank | 5,249 | (10,092 | ) | (4,843 | ) | — | (4,843 | ) | ||||||||||||
JPMorgan Chase | 36,501 | (44,018 | ) | (7,517 | ) | — | (7,517 | ) | ||||||||||||
Morgan Stanley | 14,633 | (38,284 | ) | (23,651 | ) | — | (23,651 | ) | ||||||||||||
Toronto Dominion | 1,929 | (12,736 | ) | (10,807 | ) | — | (10,807 | ) | ||||||||||||
UBS AG | 74,908 | (185,037 | ) | (110,129 | ) | — | (110,129 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 399,590 | $ | (1,117,964 | ) | $ | (718,374 | ) | $ | — | $ | (718,374 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities. |
(2) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions and the Series’ OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
36 |
This Page Intentionally Left Blank
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets |
| |||
Investments at value, including securities on loan of $384,400: | ||||
Unaffiliated investments (cost $65,714,249) | $ | 64,709,376 | ||
Affiliated investments (cost $976,704) | 976,745 | |||
Foreign currency, at value (cost $12,814,957) | 12,867,076 | |||
Deposit with broker for centrally cleared swaps | 170,000 | |||
Dividends and interest receivable | 1,168,202 | |||
Receivable for investments sold | 616,360 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 353,337 | |||
Tax reclaim receivable | 37,242 | |||
Receivable for Series shares sold | 21,570 | |||
Unrealized appreciation on OTC cross currency exchange contracts | 218 | |||
Prepaid expenses | 282 | |||
|
| |||
Total Assets | 80,920,408 | |||
|
| |||
Liabilities | ||||
Due to Broker | 12,141,806 | |||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 1,091,710 | |||
Payable to broker for collateral for securities on loan | 401,905 | |||
Payable for investments purchased | 213,679 | |||
Due to custodian | 55,449 | |||
Accrued expenses and other liabilities | 51,732 | |||
Payable for Series shares reacquired | 32,903 | |||
Options written outstanding, at value (premiums received $32,936) | 25,087 | |||
Management fee payable | 22,756 | |||
Foreign capital gains tax liability | 14,782 | |||
Due to broker—variation margin swaps | 2,308 | |||
Distribution fee payable | 1,626 | |||
Unrealized depreciation on OTC swap agreements | 1,167 | |||
Dividends payable | 814 | |||
Affiliated transfer agent fee payable | 519 | |||
|
| |||
Total Liabilities | 14,058,243 | |||
|
| |||
Net Assets | $ | 66,862,165 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 101,957 | ||
Paid-in capital in excess of par | 72,263,953 | |||
|
| |||
72,365,910 | ||||
Distributions in excess of net investment income | (461,346 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (3,166,695 | ) | ||
Net unrealized depreciation on investments and foreign currencies | (1,875,704 | ) | ||
|
| |||
Net assets, April 30, 2018 | $ | 66,862,165 | ||
|
|
See Notes to Financial Statements.
38 |
Class A |
| |||
Net asset value and redemption price per share | $ | 6.50 | ||
Maximum sales charge (4.50% of offering price) | 0.31 | |||
|
| |||
Maximum offering price to public | $ | 6.81 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | ||||
($747,528 ÷ 114,136 shares of common stock issued and outstanding) | $ | 6.55 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | ||||
($61,313,032 ÷ 9,342,431 shares of common stock issued and outstanding) | $ | 6.56 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share | ||||
($1,024 ÷ 156 shares of common stock issued and outstanding) | $ | 6.56 | ||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 39 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) |
| |||
Income | ||||
Interest income (net of foreign withholding taxes of $35,665) | $ | 1,444,226 | ||
Affiliated dividend income | 16,520 | |||
Income from securities lending, net (including affiliated income of $84) | 84 | |||
|
| |||
Total income | 1,460,830 | |||
|
| |||
Expenses | ||||
Management fee | 183,869 | |||
Distribution fee(a) | 8,766 | |||
Custodian and accounting fees | 68,452 | |||
Audit fee | 31,835 | |||
Registration fees(a) | 27,864 | |||
Shareholders’ reports | 16,022 | |||
Legal fees and expenses | 8,565 | |||
Transfer agent’s fees and expenses (including affiliated expense of $1,487)(a) | 7,100 | |||
Directors’ fees | 5,857 | |||
Miscellaneous | 7,020 | |||
|
| |||
Total expenses | 365,350 | |||
Less: Fee waiver and/or expense reimbursement(a) | (154,194 | ) | ||
|
| |||
Net expenses | 211,156 | |||
|
| |||
Net investment income (loss) | 1,249,674 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $1) | (576,584 | ) | ||
Options written transactions | 44,931 | |||
Swap agreement transactions | 15,999 | |||
Forward and cross currency contract transactions | 389,730 | |||
Foreign currency transactions | (71,252 | ) | ||
|
| |||
(197,176 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (net of change in foreign capital gain taxes of $15,510; including affiliated of $41) | 733 | |||
Options written | (13,068 | ) | ||
Swap agreements | (24,995 | ) | ||
Forward and cross currency contracts | (566,060 | ) | ||
Foreign currencies | (25,309 | ) | ||
|
| |||
(628,699 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (825,875 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 423,799 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 5,093 | 3,673 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 3,124 | 605 | 3,354 | 17 | ||||||||||||
Registration fees | 6,966 | 6,966 | 6,966 | 6,966 | ||||||||||||
Fee waiver and/or expense reimbursement | (21,656 | ) | (9,735 | ) | (115,818 | ) | (6,985 | ) |
See Notes to Financial Statements.
40 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 1,249,674 | $ | 1,701,413 | ||||
Net realized gain (loss) on investment and foreign currency transactions | (197,176 | ) | (532,379 | ) | ||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (628,699 | ) | 488,486 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 423,799 | 1,657,520 | ||||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Dividends from net investment income | ||||||||
Class A | (115,314 | ) | (85,906 | ) | ||||
Class C | (18,082 | ) | (13,215 | ) | ||||
Class Z | (1,196,990 | ) | (640,570 | ) | ||||
Class R6 | (32 | ) | (23 | ) | ||||
|
|
|
| |||||
(1,330,418 | ) | (739,714 | ) | |||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (127,487 | ) | |||||
Class C | — | (19,611 | ) | |||||
Class Z | — | (950,614 | ) | |||||
Class R6 | — | (35 | ) | |||||
|
|
|
| |||||
— | (1,097,747 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 42,155,381 | 7,471,777 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 1,324,529 | 1,804,721 | ||||||
Cost of shares reacquired | (6,535,047 | ) | (10,512,516 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | 36,944,863 | (1,236,018 | ) | |||||
|
|
|
| |||||
Total increase (decrease) | 36,038,244 | (1,415,959 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 30,823,921 | 32,239,880 | ||||||
|
|
|
| |||||
End of period(a) | $ | 66,862,165 | $ | 30,823,921 | ||||
|
|
|
| |||||
(a) Includes (distributions in excess of) net investment income of: | $ | (461,346 | ) | $ | (380,602 | ) | ||
|
|
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 41 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven funds: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Emerging Markets Debt Local Currency Fund (the “Series”). Effective June 11, 2018, the Series’ names were changed by replacing “Prudential” with “PGIM” in each Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is total return, through a combination of current income and capital appreciation.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
42 |
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
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 classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on 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. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
OTC derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. The Series utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing OTC derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated OTC derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain OTC derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income
PGIM Emerging Markets Debt Local Currency Fund | 43 |
Notes to Financial Statements (unaudited) (continued)
approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
44 |
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.
Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
Forward and Cross 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 and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation (depreciation) on investments and 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 forward and cross currency contract 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
PGIM Emerging Markets Debt Local Currency Fund | 45 |
Notes to Financial Statements (unaudited) (continued)
loss from counterparty credit risk is the net value of the cash flows to be received from the counterparty at the end of the contract’s life. A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.
Options: The Series purchased or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates with respect to securities or financial instruments 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 or financial instruments 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 or financial instrument underlying the written option. The Series, as purchaser of an OTC option, 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.
When the Series writes an option on a swap, an amount equal to any premium received by the Series is recorded as a liability and is subsequently adjusted to the current market value of the written option on the swap. If a call option on a swap is exercised, the Series becomes obligated to pay a fixed interest rate (noted as the strike price) and receive a variable interest rate on a notional amount. If a put option on a swap is exercised, the Series becomes obligated to pay a variable interest rate and receive a fixed interest rate (noted as the strike price) on a notional amount. Premiums received from writing options
46 |
on swaps that expire or are exercised are treated as realized gains upon the expiration or exercise of such options on swaps. The risk associated with writing put and call options on swaps is that the Series will be obligated to be party to a swap agreement if an option on a swap is exercised.
Swap Agreements: The Series may enter into credit default, interest rate and other types of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation (depreciation) on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. Any upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. 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 Schedule 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 objective. 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 present 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 Fund, on behalf of 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
PGIM Emerging Markets Debt Local Currency Fund | 47 |
Notes to Financial Statements (unaudited) (continued)
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 Schedule of Investments. Collateral pledged by the Series is segregated by the Series’ custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the 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, 2018, the Series has not met conditions under such agreements which give the counterparty the right to call for an early termination.
Forward currency contracts, forward rate agreements, 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.
48 |
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned 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 and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 the 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 specific identification method. 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 the 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
PGIM Emerging Markets Debt Local Currency Fund | 49 |
Notes to Financial Statements (unaudited) (continued)
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to declare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain(loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Series through its PGIM Fixed Income unit. The subadvisory agreement provides that PGIM, Inc. will furnish investment advisory services in connection with the management of the Series. In connection therewith, PGIM, Inc. is obligated to keep
50 |
certain books and records of the Series. PGIM Investments pays for the services of PGIM, Inc., 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 PGIM Investments 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 $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. The effective management fee rate before any waivers and/or expense reimbursements, was 0.80% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 28, 2019, to limit Total Annual Fund Operating Expenses after fee waivers and/or expense reimbursements to 1.13% of average daily net assets for Class A shares, 1.88% of average daily net assets for Class C shares, 0.88% of average daily net assets for Class Z shares, and 0.88% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements, was 0.13% for the six months ended April 30, 2018.
The Fund, on behalf of 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 Z and Class R6 shares. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C, 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 or Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and Class C shares, respectively.
PIMS has advised the Series that it has received $4,364 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $35 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PGIM Emerging Markets Debt Local Currency Fund | 51 |
Notes to Financial Statements (unaudited) (continued)
PGIM Investments, PGIM, Inc. and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30, 2018, PGIM, Inc. was compensated $32 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018 were $61,551,708 and $25,542,673, respectively.
52 |
A summary of cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 481,154 | $ | 45,845,922 | $ | 45,752,908 | $ | — | $ | — | $ | 574,168 | 574,168 | $ | 16,520 | |||||||||||||||||
PGIM Institutional Money Market Fund | — | 417,983 | 15,448 | 41 | 1 | 402,577 | 402,577 | 84 | ||||||||||||||||||||||||
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$ | 481,154 | $ | 46,263,905 | $ | 45,768,356 | $ | 41 | $ | 1 | $ | 976,745 | $ | 16,604 | |||||||||||||||||||
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* | The Funds did not have any capital gain distributions during the reporting period. |
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized depreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 67,268,231 | ||
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| |||
Gross Unrealized Appreciation | 1,783,408 | |||
Gross Unrealized Depreciation | (4,179,877 | ) | ||
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Net Unrealized Depreciation | $ | (2,396,469 | ) | |
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The book basis may differ from tax basis due to certain tax-related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2017 of approximately $2,856,000 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.
6. Capital and Ownership
The Series offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase
PGIM Emerging Markets Debt Local Currency Fund | 53 |
Notes to Financial Statements (unaudited) (continued)
Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class R6 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.
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 550 million shares authorized for the Series, divided into five classes, designated Class A, Class C, Class Z, Class T and Class R6 common stock, each of which consists of 10 million, 50 million, 250 million, 190 million and 50 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
As of April 30, 2018, Prudential, through its affiliate entities, including affiliated funds (if applicable), owned 156 Class R6 shares and 3,194,469 Class Z shares of the Series. At reporting period end, three shareholders of record held 90% of the Series’ outstanding shares on behalf of multiple beneficial owners, of which 31% were held by an affiliate of Prudential.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 305,511 | $ | 2,037,994 | |||||
Shares issued in reinvestment of dividends and distributions | 16,620 | 110,503 | ||||||
Shares reacquired | (59,263 | ) | (389,898 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 262,868 | 1,758,599 | ||||||
Shares issued upon conversion from other share class(es) | 447 | 3,014 | ||||||
Shares reacquired upon conversion into other share class(es) | (6,295 | ) | (42,786 | ) | ||||
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Net increase (decrease) in shares outstanding | 257,020 | $ | 1,718,827 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 411,807 | $ | 2,625,583 | |||||
Shares issued in reinvestment of dividends and distributions | 30,171 | 192,867 | ||||||
Shares reacquired | (514,542 | ) | (3,279,092 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (72,564 | ) | (460,642 | ) | ||||
Shares issued upon conversion from other share class(es) | 32,906 | 196,522 | ||||||
Shares reacquired upon conversion into other share class(es) | (98,133 | ) | (619,781 | ) | ||||
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Net increase (decrease) in shares outstanding | (137,791 | ) | $ | (883,901 | ) | |||
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54 |
Class C | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 11,624 | $ | 77,641 | |||||
Shares issued in reinvestment of dividends and distributions | 2,668 | 17,862 | ||||||
Shares reacquired | (11,242 | ) | (74,689 | ) | ||||
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Net increase (decrease) in shares outstanding | 3,050 | $ | 20,814 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 35,784 | $ | 236,548 | |||||
Shares issued in reinvestment of dividends and distributions | 4,923 | 31,728 | ||||||
Shares reacquired | (50,941 | ) | (317,283 | ) | ||||
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Net increase (decrease) in shares outstanding | (10,234 | ) | $ | (49,007 | ) | |||
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Class Z | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 5,903,984 | $ | 40,039,746 | |||||
Shares issued in reinvestment of dividends and distributions | 178,332 | 1,196,133 | ||||||
Shares reacquired | (916,451 | ) | (6,070,460 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 5,165,865 | 35,165,419 | ||||||
Shares issued upon conversion from other share class(es) | 6,231 | 42,786 | ||||||
Shares reacquired upon conversion into other share class(es) | (443 | ) | (3,014 | ) | ||||
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Net increase (decrease) in shares outstanding | 5,171,653 | $ | 35,205,191 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 698,617 | $ | 4,609,646 | |||||
Shares issued in reinvestment of dividends and distributions | 244,834 | 1,580,068 | ||||||
Shares reacquired† | (1,059,507 | ) | (6,916,141 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (116,056 | ) | (726,427 | ) | ||||
Shares issued upon conversion from other shares class(es) | 97,078 | 619,781 | ||||||
Shares reacquired upon conversion into other share class(es) | (32,483 | ) | (196,522 | ) | ||||
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Net increase (decrease) in shares outstanding | (51,461 | ) | $ | (303,168 | ) | |||
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Class R6 | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares issued in reinvestment of dividends and distributions | 4 | $ | 31 | |||||
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Net increase (decrease) in shares outstanding | 4 | $ | 31 | |||||
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Year ended October 31, 2017: | ||||||||
Shares issued in reinvestment of dividends and distributions | 9 | $ | 58 | |||||
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Net increase (decrease) in shares outstanding | 9 | $ | 58 | |||||
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† | Includes affiliated redemptions of 455,235 shares with a value of $ 3,000,000 for Class Z. |
7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the
PGIM Emerging Markets Debt Local Currency Fund | 55 |
Notes to Financial Statements (unaudited) (continued)
Board, is accrued daily and paid quarterly. The interest on borrowings under the SCA is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series utilized the SCA during the reporting period ended April 30, 2018. The average daily balance for the 1 day that the Series had loans outstanding during the period was $2,223,000, borrowed at a weighted average interest rate of 3.15%. The maximum loan balance outstanding during the period was $2,223,000. At April 30, 2018, the Series did not have an outstanding loan balance.
56 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.40 | $6.44 | $6.24 | $7.92 | $8.67 | $9.61 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.17 | 0.35 | 0.33 | 0.37 | 0.49 | 0.47 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.12 | (0.02 | ) | 0.23 | (1.64 | ) | (0.71 | ) | (0.76 | ) | ||||||||||||||||||
Total from investment operations | 0.29 | 0.33 | 0.56 | (1.27 | ) | (0.22 | ) | (0.29 | ) | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income(f) | (0.19 | ) | (0.15 | ) | - | (e) | (0.06 | ) | (0.07 | ) | (0.30 | ) | ||||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Tax return of capital distributions | - | (0.22 | ) | (0.36 | ) | (0.35 | ) | (0.46 | ) | (0.30 | ) | |||||||||||||||||
Total dividends and distributions | (0.19 | ) | (0.37 | ) | (0.36 | ) | (0.41 | ) | (0.53 | ) | (0.65 | ) | ||||||||||||||||
Net asset value, end of period | $6.50 | $6.40 | $6.44 | $6.24 | $7.92 | $8.67 | ||||||||||||||||||||||
Total Return(b): | 4.48% | 5.36% | 9.29% | (16.41)% | (2.47)% | (3.23)% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $4,801 | $3,085 | $3,990 | $3,208 | $5,991 | $10,862 | ||||||||||||||||||||||
Average net assets (000) | $4,108 | $3,639 | $3,343 | $4,341 | $6,701 | $12,797 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.13% | (g) | 1.13% | 1.28% | 1.30% | (d) | 1.30% | 1.30% | ||||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 2.19% | (g) | 2.15% | 2.33% | 2.39% | (d) | 2.13% | 1.78% | ||||||||||||||||||||
Net investment income (loss) | 5.29% | (g) | 5.42% | 5.20% | 5.32% | (d) | 5.99% | 5.07% | ||||||||||||||||||||
Portfolio turnover rate(i) | 60% | (h) | 186% | 196% | 101% | 110% | 102% |
(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 return may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Effective March 9, 2015, the contractual distribution and service (12b-1) fees were reduced from 0.30% to 0.25% of the average daily net assets and the 0.05% contractual 12b-1 fee waiver was terminated. |
(e) | Less than $0.005. |
(f) | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(g) | Annualized. |
(h) | Not annualized. |
(i) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 57 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.46 | $6.49 | $6.28 | $7.97 | $8.72 | $9.65 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.15 | 0.30 | 0.28 | 0.32 | 0.43 | 0.40 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.10 | (0.01 | ) | 0.25 | (1.65 | ) | (0.71 | ) | (0.75 | ) | ||||||||||||||||||
Total from investment operations | 0.25 | 0.29 | 0.53 | (1.33 | ) | (0.28 | ) | (0.35 | ) | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income(e) | (0.16 | ) | (0.13 | ) | - | (d) | (0.01 | ) | (0.01 | ) | (0.23 | ) | ||||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Tax return of capital distributions | - | (0.19 | ) | (0.32 | ) | (0.35 | ) | (0.46 | ) | (0.30 | ) | |||||||||||||||||
Total dividends and distributions | (0.16 | ) | (0.32 | ) | (0.32 | ) | (0.36 | ) | (0.47 | ) | (0.58 | ) | ||||||||||||||||
Net asset value, end of period | $6.55 | $6.46 | $6.49 | $6.28 | $7.97 | $8.72 | ||||||||||||||||||||||
Total Return(b): | 3.89% | 4.66% | 8.61% | (17.00)% | (3.21)% | (3.85)% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $748 | $718 | $787 | $701 | $927 | $1,469 | ||||||||||||||||||||||
Average net assets (000) | $741 | $649 | $721 | $789 | $1,207 | $1,585 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 1.88% | (f) | 1.88% | 2.03% | 2.05% | 2.05% | 2.05% | |||||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 4.53% | (f) | 2.88% | 3.07% | 3.11% | 2.82% | 2.47% | |||||||||||||||||||||
Net investment income (loss) | 4.52% | (f) | 4.63% | 4.40% | 4.52% | 5.17% | 4.26% | |||||||||||||||||||||
Portfolio turnover rate(h) | 60% | (g) | 186% | 196% | 101% | 110% | 102% |
(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 return may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Less than $0.005. |
(e) | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(f) | Annualized. |
(g) | Not annualized. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
58 |
Class Z Shares | ||||||||||||||||||||||||||||
Six Months | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.48 | $6.50 | $6.31 | $7.98 | $8.72 | $9.66 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.18 | 0.36 | 0.34 | 0.38 | 0.51 | 0.49 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.10 | 0.01 | 0.23 | (1.62 | ) | (0.70 | ) | (0.76 | ) | |||||||||||||||||||
Total from investment operations | 0.28 | 0.37 | 0.57 | (1.24 | ) | (0.19 | ) | (0.27 | ) | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income(e) | (0.20 | ) | (0.16 | ) | - | (d) | (0.08 | ) | (0.09 | ) | (0.32 | ) | ||||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Tax return of capital distributions | - | (0.23 | ) | (0.38 | ) | (0.35 | ) | (0.46 | ) | (0.30 | ) | |||||||||||||||||
Total dividends and distributions | (0.20 | ) | (0.39 | ) | (0.38 | ) | (0.43 | ) | (0.55 | ) | (0.67 | ) | ||||||||||||||||
Net asset value, end of period | $6.56 | $6.48 | $6.50 | $6.31 | $7.98 | $8.72 | ||||||||||||||||||||||
Total Return(b): | 4.23% | 5.85% | 9.31% | (15.90)% | (2.12)% | (2.98)% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $61,313 | $27,020 | $27,462 | $24,821 | $28,578 | $31,330 | ||||||||||||||||||||||
Average net assets (000) | $41,499 | $26,437 | $25,994 | $25,969 | $30,288 | $35,341 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 0.88% | (f) | 0.88% | 1.03% | 1.05% | 1.05% | 1.05% | |||||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 1.44% | (f) | 1.88% | 2.06% | 2.11% | 1.82% | 1.49% | |||||||||||||||||||||
Net investment income (loss) | 5.47% | (f) | 5.58% | 5.36% | 5.50% | 6.14% | 5.25% | |||||||||||||||||||||
Portfolio turnover rate(h) | 60% | (g) | 186% | 196% | 101% | 110% | 102% |
(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 return may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Less than $0.005. |
(e) | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(f) | Annualized. |
(g) | Not annualized. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Local Currency Fund | 59 |
Financial Highlights (unaudited) (continued)
Class R6 Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.47 | $6.50 | $6.30 | $7.98 | $8.71 | $9.66 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.37 | 0.35 | 0.39 | 0.51 | 0.58 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.10 | - | (d) | 0.23 | (1.63 | ) | (0.69 | ) | (0.86 | ) | ||||||||||||||||||
Total from investment operations | 0.29 | 0.37 | 0.58 | (1.24 | ) | (0.18 | ) | (0.28 | ) | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income(e) | (0.20 | ) | (0.16 | ) | - | (d) | (0.09 | ) | (0.09 | ) | (0.32 | ) | ||||||||||||||||
Distributions from net realized gains | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Tax return of capital distributions | - | (0.24 | ) | (0.38 | ) | (0.35 | ) | (0.46 | ) | (0.30 | ) | |||||||||||||||||
Total dividends and distributions | (0.20 | ) | (0.40 | ) | (0.38 | ) | (0.44 | ) | (0.55 | ) | (0.67 | ) | ||||||||||||||||
Net asset value, end of period | $6.56 | $6.47 | $6.50 | $6.30 | $7.98 | $8.71 | ||||||||||||||||||||||
Total Return(b): | 4.53% | 5.82% | 9.55% | (15.94)% | (1.97)% | (3.06)% | ||||||||||||||||||||||
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(c): | ||||||||||||||||||||||||||||
Expenses after advisory fee waivers and/or expense reimbursement | 0.88% | (f) | 0.88% | 1.03% | 1.05% | 1.05% | 1.05% | |||||||||||||||||||||
Expenses before advisory fee waivers and/or expense reimbursement | 1371.11% | (f) | 1.83% | 2.06% | 2.01% | 1.69% | 1.39% | |||||||||||||||||||||
Net investment income (loss) | 5.72% | (f) | 5.73% | 5.47% | 5.60% | 6.17% | 6.22% | |||||||||||||||||||||
Portfolio turnover rate(h) | 60% | (g) | 186% | 196% | 101% | 110% | 102% |
(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 return may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Less than $0.005. |
(e) | Dividends from net investment income may include other items that are ordinary income for tax purposes. |
(f) | Annualized. |
(g) | Not annualized. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
60 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | PGIM 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 | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Emerging Markets Debt Local Currency Fund, PGIM 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 |
PGIM EMERGING MARKETS DEBT LOCAL CURRENCY FUND
SHARE CLASS | A | C | Z | R6* | ||||
NASDAQ | EMDAX | EMDCX | EMDZX | EMDQX | ||||
CUSIP | 743969750 | 743969743 | 743969727 | 743969735 |
*Formerly known as Class Q shares.
MF212E2
PGIM JENNISON EMERGING MARKETS EQUITY OPPORTUNITIES FUND
(Formerly known as Prudential Jennison Emerging Markets Equity Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at pgiminvestments.com |
Table of Contents
5 | ||||
6 | ||||
9 | ||||
11 |
PGIM Jennison Emerging Markets Equity Opportunities Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Jennison Emerging Markets Equity Opportunities Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Emerging Markets Equity Opportunities Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||
Six Months* (%) | One Year (%) | Since Inception (%) | ||||
Class A | 8.32 | 16.89 | 3.79 (9/16/14) | |||
Class C | 7.87 | 21.81 | 4.65 (9/16/14) | |||
Class Z | 8.43 | 24.06 | 5.69 (9/16/14) | |||
Class R6** | 8.43 | 24.06 | 5.71 (9/16/14) | |||
MSCI Emerging Markets Index | ||||||
4.80 | 21.71 | 6.48 | ||||
Lipper Emerging Markets Funds Average | ||||||
3.90 | 17.95 | 4.97 |
Source: PGIM Investments LLC and Lipper Inc.
*Not annualized
**Formerly known as Class Q shares.
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to the Fund’s inception date.
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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 | Class R6* | |||||
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) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% 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) | 0.30% (0.25% currently) | 1.00% | None | None |
*Formerly known as Class Q shares.
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 24 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, 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 of a mutual fund, but not sales charges or taxes.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 7 |
Your Fund’s Performance (continued)
Presentation of Fund Holdings
Five Largest Holdings expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Tencent Holdings Ltd., Internet Software & Services | 7.9 | |||
MercadoLibre, Inc., Internet Software & Services | 6.4 | |||
Alibaba Group Holding Ltd., Internet Software & Services | 6.0 | |||
MakeMyTrip Ltd., Internet & Direct Marketing Retail | 4.8 | |||
Biocon Ltd., Biotechnology | 3.8 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Internet Software & Services | 24.3 | |||
Internet & Direct Marketing Retail | 11.6 | |||
Banks | 8.5 | |||
Food & Staples Retailing | 6.2 | |||
Beverages | 5.8 |
Industry weightings reflect only long-term investments and are subject to change.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period
PGIM Jennison Emerging Markets Equity Opportunities Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Jennison Emerging Markets Equity Opportunities Fund | Beginning Account Value November 1, 2017 | Ending Account April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,083.20 | 1.45 | % | $ | 7.49 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.60 | 1.45 | % | $ | 7.25 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,078.70 | 2.20 | % | $ | 11.34 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.88 | 2.20 | % | $ | 10.99 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,084.30 | 1.20 | % | $ | 6.20 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.84 | 1.20 | % | $ | 6.01 | ||||||||||
Class R6** | Actual | $ | 1,000.00 | $ | 1,084.30 | 1.20 | % | $ | 6.20 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.84 | 1.20 | % | $ | 6.01 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund's fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**Formerly known as Class Q shares.
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Schedule of Investments (unaudited)
as of April 30, 2018
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 98.9% |
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COMMON STOCKS 97.1% |
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Argentina 6.4% |
| |||||||
MercadoLibre, Inc. | 3,618 | $ | 1,228,709 | |||||
Brazil 4.9% |
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Lojas Renner SA | 38,345 | 355,736 | ||||||
Pagseguro Digital Ltd. (Class A Stock) | 8,764 | 291,228 | ||||||
Raia Drogasil SA | 15,070 | 295,618 | ||||||
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942,582 | ||||||||
Chile 2.4% |
| |||||||
Sociedad Quimica y Minera de Chile SA, ADR(a) | 8,367 | 459,265 | ||||||
China 34.9% |
| |||||||
Alibaba Group Holding Ltd., ADR*(a) | 6,539 | 1,167,473 | ||||||
Baidu, Inc., ADR* | 2,100 | 526,890 | ||||||
Ctrip.com International Ltd., ADR* | 13,648 | 558,203 | ||||||
Hangzhou Hikvision Digital Technology Co. Ltd. | 500 | 3,036 | ||||||
Hangzhou Hikvision Digital Technology Co. Ltd. (Class A Stock) | 30,185 | 183,265 | ||||||
Iqiyi, Inc., ADR* | 13,700 | 247,011 | ||||||
JD.com, Inc., ADR* | 14,023 | 511,980 | ||||||
Jiangsu Hengrui Medicine Co. Ltd. (Class A Stock) | 45,840 | 602,288 | ||||||
Kweichow Moutai Co. Ltd. (Class A Stock) | 6,550 | 683,681 | ||||||
Tencent Holdings Ltd. | 31,031 | 1,525,575 | ||||||
Vipshop Holdings Ltd., ADR* | 15,876 | 245,761 | ||||||
Wuxi Biologics Cayman, Inc., 144A* | 53,951 | 489,386 | ||||||
|
| |||||||
6,744,549 | ||||||||
Hong Kong 1.3% |
| |||||||
Sands China Ltd. | 42,836 | 247,565 | ||||||
India 23.5% |
| |||||||
Ashok Leyland Ltd. | 213,565 | 523,824 | ||||||
Asian Paints Ltd. | 21,320 | 382,929 | ||||||
Biocon Ltd. | 73,147 | 728,939 | ||||||
Eicher Motors Ltd. | 729 | 339,026 | ||||||
Godrej Consumer Products Ltd. | 30,913 | 515,609 | ||||||
HDFC Bank Ltd., ADR | 3,876 | 371,360 | ||||||
MakeMyTrip Ltd.* | 25,070 | 925,083 | ||||||
Maruti Suzuki India Ltd. | 4,243 | 558,331 | ||||||
Titan Co. Ltd. | 13,692 | 200,789 | ||||||
|
| |||||||
4,545,890 |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Indonesia 10.2% |
| |||||||
Ace Hardware Indonesia Tbk PT | 5,467,747 | $ | 510,995 | |||||
Astra International Tbk PT | 680,138 | 348,113 | ||||||
Bank Rakyat Indonesia Persero Tbk PT | 1,743,668 | 402,035 | ||||||
Matahari Department Store Tbk PT | 348,324 | 257,907 | ||||||
Mitra Adiperkasa Tbk PT | 763,499 | 452,665 | ||||||
|
| |||||||
1,971,715 | ||||||||
Malaysia 1.6% |
| |||||||
IHH Healthcare Bhd | 205,448 | 317,408 | ||||||
Mexico 2.3% |
| |||||||
Arca Continental SAB de CV | 63,551 | 437,944 | ||||||
Peru 1.6% |
| |||||||
Credicorp Ltd. | 1,310 | 304,562 | ||||||
Russia 1.2% | ||||||||
X5 Retail Group NV, GDR* | 661 | 18,906 | ||||||
X5 Retail Group NV, GDR* | 7,546 | 215,061 | ||||||
|
| |||||||
233,967 | ||||||||
South Korea 1.0% | ||||||||
Samsung Biologics Co. Ltd., 144A* | 444 | 201,661 | ||||||
Thailand 5.8% | ||||||||
Bangkok Dusit Medical Services PCL (Class F Stock) | 364,036 | 259,321 | ||||||
CP ALL PCL | 240,542 | 661,820 | ||||||
Kasikornbank Pcl, NVDR | 32,846 | 202,548 | ||||||
|
| |||||||
1,123,689 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 18,759,506 | |||||||
|
| |||||||
PREFERRED STOCK 1.8% | ||||||||
Brazil | ||||||||
Itau Unibanco Holding SA (PRFC) | 24,684 | 358,437 | ||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 19,117,943 | |||||||
|
|
See Notes to Financial Statements.
12 |
Description | Shares | Value | ||||||
SHORT-TERM INVESTMENTS 10.3% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund(b) | 381,406 | $ | 381,406 | |||||
Prudential Investment Portfolios 2 - PGIM Institutional Money Market Fund | 1,604,903 | 1,604,903 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 1,986,309 | |||||||
|
| |||||||
TOTAL INVESTMENTS 109.2% | 21,104,252 | |||||||
Liabilities in excess of other assets (9.2)% | (1,775,887 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 19,328,365 | ||||||
|
|
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
GDR—Global Depositary Receipt
LIBOR—London Interbank Offered Rate
NVDR—Non-voting Depositary Receipt
PRFC—Preference 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 $1,576,287; cash collateral of $1,602,852 (included in liabilities) was received with which the Series purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
Fair Value Measurements:
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—unadjusted 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.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
The following is a summary of the inputs used as of April 30, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 1,228,709 | $ | — | $ | — | ||||||
Brazil | 942,582 | — | — | |||||||||
Chile | 459,265 | — | — | |||||||||
China | 3,257,318 | 3,487,231 | — | |||||||||
Hong Kong | — | 247,565 | — | |||||||||
India | 1,296,443 | 3,249,447 | — | |||||||||
Indonesia | — | 1,971,715 | — | |||||||||
Malaysia | — | 317,408 | — | |||||||||
Mexico | 437,944 | — | — | |||||||||
Peru | 304,562 | — | — | |||||||||
Russia | 233,967 | — | — | |||||||||
South Korea | — | 201,661 | — | |||||||||
Thailand | — | 1,123,689 | — | |||||||||
Preferred Stock |
| |||||||||||
Brazil | 358,437 | — | — | |||||||||
Affiliated Mutual Funds | 1,986,309 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 10,505,536 | $ | 10,598,716 | $ | — | ||||||
|
|
|
|
|
|
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2018 were as follows:
Internet Software & Services | 24.3 | % | ||
Internet & Direct Marketing Retail | 11.6 | |||
Affiliated Mutual Funds (including 8.3% of collateral for securities on loan) | 10.3 | |||
Banks | 8.5 | |||
Food & Staples Retailing | 6.2 | |||
Beverages | 5.8 | |||
Multiline Retail | 5.5 | |||
Automobiles | 4.7 | |||
Machinery | 4.5 | |||
Chemicals | 4.3 | |||
Biotechnology | 3.8 | |||
Life Sciences Tools & Services | 3.6 | |||
Pharmaceuticals | 3.1 | |||
Health Care Providers & Services | 3.0 | % | ||
Personal Products | 2.7 | |||
Specialty Retail | 2.6 | |||
IT Services | 1.5 | |||
Hotels, Restaurants & Leisure | 1.3 | |||
Textiles, Apparel & Luxury Goods | 1.0 | |||
Electronic Equipment, Instruments & Components | 0.9 | |||
|
| |||
109.2 | ||||
Liabilities in excess of other assets | (9.2 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
14 |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series entered into financial instruments/transactions 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 financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 1,576,287 | $ | (1,576,287 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 15 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets |
| |||
Investments at value, including securities on loan of $1,576,287: | ||||
Unaffiliated investments (cost $13,865,753) | $ | 19,117,943 | ||
Affiliated investments (cost $1,986,263) | 1,986,309 | |||
Foreign currency, at value (cost $3,615) | 3,621 | |||
Receivable for Series shares sold | 32,363 | |||
Dividends and interest receivable | 19,462 | |||
Receivable for investments sold | 169 | |||
Prepaid expenses | 282 | |||
|
| |||
Total assets | 21,160,149 | |||
|
| |||
Liabilities |
| |||
Payable to broker for collateral for securities on loan | 1,602,852 | |||
Payable for investments purchased | 178,053 | |||
Accrued expenses and other liabilities | 23,708 | |||
Foreign capital gains tax liability | 23,683 | |||
Distribution fee payable | 2,340 | |||
Management fee payable | 1,112 | |||
Affiliated transfer agent fee payable | 36 | |||
|
| |||
Total liabilities | 1,831,784 | |||
|
| |||
Net Assets | $ | 19,328,365 | ||
|
| |||
Net assets were comprised of: |
| |||
Common stock, at par | $ | 15,905 | ||
Paid-in capital in excess of par | 16,075,935 | |||
|
| |||
16,091,840 | ||||
Accumulated net investment loss | (73,382 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (1,918,296 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 5,228,203 | |||
|
| |||
Net assets, April 30, 2018 | $ | 19,328,365 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value, offering price and redemption price per share, | $ | 12.11 | ||
Maximum sales charge (5.50% of offering price) | 0.70 | |||
|
| |||
Maximum offering price to public | $ | 12.81 | ||
|
| |||
Class C |
| |||
Net asset value, offering price and redemption price per share, | ||||
($1,941,552 ÷ 164,674 shares of common stock issued and outstanding) | $ | 11.79 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | ||||
($1,598,680 ÷ 130,861 shares of common stock issued and outstanding) | $ | 12.22 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share, | ||||
($12,221,314 ÷ 1,000,515 shares of common stock issued and outstanding) | $ | 12.22 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 17 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $7,000) | $ | 66,976 | ||
Affiliated dividend income | 3,618 | |||
Income from securities lending, net (including affiliated income of $386) | 1,751 | |||
|
| |||
Total income | 72,345 | |||
|
| |||
Expenses | ||||
Management fee | 95,467 | |||
Distribution fee(a) | 13,377 | |||
Custodian and accounting fees | 30,537 | |||
Registration fees(a) | 27,750 | |||
Audit fee | 14,670 | |||
Shareholders’ reports | 10,249 | |||
Legal fees and expenses | 8,915 | |||
Directors’ fees | 5,756 | |||
Transfer agent’s fees and expenses (including affiliated expense of $105)(a) | 4,257 | |||
Miscellaneous | 8,326 | |||
|
| |||
Total expenses | 219,304 | |||
Less: Fee waiver and/or expense reimbursement(a) | (96,821 | ) | ||
Distribution fee waiver(a) | (722 | ) | ||
|
| |||
Net expenses | 121,761 | |||
|
| |||
Net investment income (loss) | (49,416 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of ( $124)) | 320,759 | |||
Foreign currency transactions | (1,151 | ) | ||
|
| |||
319,608 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (Including affiliated of $46) | 1,026,446 | |||
Foreign currencies | (200 | ) | ||
|
| |||
1,026,246 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 1,345,854 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 1,296,438 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 4,331 | 9,046 | — | — | ||||||||||||
Registration fees | 6,937 | 6,937 | 6,938 | 6,938 | ||||||||||||
Transfer agent’s fees and expenses | 2,651 | 799 | 783 | 24 | ||||||||||||
Fee waiver and or expense reimbursement | (19,831 | ) | (14,179 | ) | (12,434 | ) | (50,377 | ) | ||||||||
Distribution fee waiver | (722 | ) | — | — | — |
See Notes to Financial Statements.
18 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets |
| |||||||
Operations |
| |||||||
Net investment income (loss) | $ | (49,416 | ) | $ | (29,547 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 319,608 | (116,094 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 1,026,246 | 2,602,531 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 1,296,438 | 2,456,890 | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) |
| |||||||
Net proceeds from shares sold | 2,640,500 | 3,369,561 | ||||||
Cost of shares reacquired | (579,703 | ) | (1,045,433 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from fund share transactions | 2,060,797 | 2,324,128 | ||||||
|
|
|
| |||||
Total increase (decrease) | 3,357,235 | 4,781,018 | ||||||
Net Assets: |
| |||||||
Beginning of period | 15,971,130 | 11,190,112 | ||||||
|
|
|
| |||||
End of period(a) | $ | 19,328,365 | $ | 15,971,130 | ||||
|
|
|
| |||||
(a) Includes accumulated net investment loss of: | $ | (73,382 | ) | $ | (23,966 | ) | ||
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 19 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven funds: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Jennison Emerging Markets Equity Opportunities Fund (the “Series”). Effective June 11, 2018, the Series’ names were changed by replacing “Prudential” with “PGIM” in each Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is to seek long-term growth of capital.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
20 |
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally 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 is 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 for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
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
PGIM Jennison Emerging Markets Equity Opportunities Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the period, the Series does not 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
22 |
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.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
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.
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned 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
PGIM Jennison Emerging Markets Equity Opportunities Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 or 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 specific identification method. Dividend income is recorded on the ex-date. 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to pay dividends from 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 gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
24 |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PGIM Investments 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 PGIM Investments 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. The effective management fee rate before any waivers and/or expense reimbursements, was 1.05% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 28, 2019, to limit total annual Series operating expenses after fee waivers and/or expense reimbursements to 1.45% of average daily net assets for Class A shares, 2.20% of average daily net assets for Class C shares, 1.20% of average daily net assets for Class Z shares, and 1.20% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the
PGIM Jennison Emerging Markets Equity Opportunities Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
recoupment for that fiscal year. The waiver and/or expense reimbursements exceeded the effective management fee rate for the six months ended April 30, 2018.
The Fund, on behalf of 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 Z and Class R6 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 “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 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30% 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 0.25% of the average daily net assets of the Class A shares through February 28, 2019.
PIMS has advised the Series that it has received $24,411 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $5 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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.
26 |
Such transactions are subject to ratification by the Board. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30 2018, PGIM, Inc. was compensated $319 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018 were $3,568,919 and $1,433,666, respectively.
A summary of cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 380,415 | $ | 2,904,319 | $ | 2,903,328 | $ | — | $ | — | $ | 381,406 | 381,406 | $ | 3,618 | |||||||||||||||||
PGIM Institutional Money Market Fund | 23,897 | 6,656,222 | 5,075,138 | 46 | (124 | ) | 1,604,903 | 1,604,903 | 386 | |||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
$ | 404,312 | $ | 9,560,541 | $ | 7,978,466 | $ | 46 | $ | (124 | ) | $ | 1,986,309 | $ | 4,004 | ||||||||||||||||||
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|
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|
|
* | The Series did not have any capital gain distributions during the reporting period. |
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 15,876,051 | ||
|
| |||
Gross Unrealized Appreciation | 5,478,308 | |||
Gross Unrealized Depreciation | (250,107 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 5,228,201 | ||
|
|
The book basis may differ from tax basis due to certain tax-related adjustments.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
For federal income tax purposes, the Series had a capital loss carryforward of approximately $2,238,000 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 late year ordinary losses of approximately $24,000 as having been incurred in the following fiscal year (October 31, 2018).
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.
6. Capital and Ownership
The Series offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. 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 C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class R6 shares are not subject to any sales or redemption charge and are available 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.
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 865 million shares authorized for the Series, divided into five classes, designated Class A, Class C, Class Z, Class T and Class R6 common stock, each of which consists of 25 million, 65 million, 300 million, 225 million and 250 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
28 |
As of April 30, 2018, Prudential, through its affiliate entities, including affiliated funds (if applicable), owned 1,000,515 shares of Class R6 shares of the Series. At reporting period end, three shareholders of record held 81% of the Series’ outstanding shares on behalf of multiple beneficial owners, of which 63% were held by an affiliate of Prudential.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: |
| |||||||
Shares sold | 124,157 | $ | 1,542,323 | |||||
Shares reacquired | (25,762 | ) | (317,176 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 98,395 | 1,225,147 | ||||||
Shares reacquired upon conversion into other share class(es) | (984 | ) | (11,614 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 97,411 | $ | 1,213,533 | |||||
|
|
|
| |||||
Year ended October 31, 2017: |
| |||||||
Shares sold | 156,262 | $ | 1,561,350 | |||||
Shares reacquired | (50,106 | ) | (484,454 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 106,156 | 1,076,896 | ||||||
Shares reacquired upon conversion into other share class(es) | (2,111 | ) | (22,119 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 104,045 | $ | 1,054,777 | |||||
|
|
|
| |||||
Class C | ||||||||
Six months ended April 30, 2018: |
| |||||||
Shares sold | 27,472 | $ | 324,316 | |||||
Shares reacquired | (1,531 | ) | (17,844 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 25,941 | $ | 306,472 | |||||
|
|
|
| |||||
Year ended October 31, 2017: |
| |||||||
Shares sold | 77,848 | $ | 791,362 | |||||
Shares reacquired | (10,893 | ) | (103,832 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 66,955 | $ | 687,530 | |||||
Shares reacquired upon conversion into other share class(es) | (7,961 | ) | (85,348 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 58,994 | $ | 602,182 | |||||
|
|
|
| |||||
Class Z | ||||||||
Six months ended April 30, 2018: |
| |||||||
Shares sold | 62,723 | $ | 773,861 | |||||
Shares reacquired | (19,831 | ) | (244,683 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 42,892 | 529,178 | ||||||
Shares issued upon conversion from other share class(es) | 977 | 11,614 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 43,869 | $ | 540,792 | |||||
|
|
|
| |||||
Year ended October 31, 2017: |
| |||||||
Shares sold | 101,704 | $ | 1,016,849 | |||||
Shares reacquired | (44,028 | ) | (446,412 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding before conversion | 57,676 | 570,437 | ||||||
Shares issued upon conversion from other share class(es) | 9,834 | 107,467 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 67,510 | $ | 677,904 | |||||
|
|
|
|
PGIM Jennison Emerging Markets Equity Opportunities Fund | 29 |
Notes to Financial Statements (unaudited) (continued)
Class R6 | Shares | Amount | ||||||
Six months ended April 30, 2018: |
| |||||||
Shares sold | — | $ | — | |||||
Shares reacquired | — | — | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | — | $ | — | |||||
|
|
|
| |||||
Period ended October 31, 2017: | ||||||||
Shares reacquired | (1,000 | ) | (10,735 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (1,000 | ) | $ | (10,735 | ) | |||
|
|
|
|
7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series did not utilize the SCA during the reporting period ended April 30, 2018.
30 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 16, 2014(b) through October 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.19 | $9.34 | $8.81 | $10.09 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.01 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.96 | 1.89 | 0.57 | (1.24 | ) | 0.10 | ||||||||||||||||||
Total from investment operations | 0.92 | 1.85 | 0.53 | (1.28 | ) | 0.09 | ||||||||||||||||||
Net asset value, end of period | $12.11 | $11.19 | $9.34 | $8.81 | $10.09 | |||||||||||||||||||
Total Return(a) | 8.22% | 19.81% | 6.02% | (12.69)% | 0.90% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $3,567 | $2,204 | $869 | $311 | $18 | |||||||||||||||||||
Average net assets (000) | $2,911 | $1,363 | $528 | $208 | $15 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.45% | (e) | 1.45% | 1.45% | 1.54% | 1.55% | (e) | |||||||||||||||||
Expenses before waiver and/or expense reimbursement | 2.87% | (e) | 3.28% | 3.87% | 3.40% | 14.06% | (e) | |||||||||||||||||
Net investment income (loss) | (0.61)% | (e) | (0.35)% | (0.49)% | (0.48)% | (0.93)% | (e) | |||||||||||||||||
Portfolio turnover rate(g) | 8% | (f) | 45% | 44% | 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 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 average shares outstanding during the period. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 31 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 16, 2014(b) through October 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.93 | $9.20 | $8.74 | $10.08 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.08 | ) | (0.11 | ) | (0.11 | ) | (0.13 | ) | (0.02 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.94 | 1.84 | 0.57 | (1.21 | ) | 0.10 | ||||||||||||||||||
Total from investment operations | 0.86 | 1.73 | 0.46 | (1.34 | ) | 0.08 | ||||||||||||||||||
Net asset value, end of period | $11.79 | $10.93 | $9.20 | $8.74 | $10.08 | |||||||||||||||||||
Total Return(a) | 7.87% | 18.80% | 5.26% | (13.29)% | 0.80% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $1,942 | $1,516 | $734 | $662 | $501 | |||||||||||||||||||
Average net assets (000) | $1,824 | $973 | $672 | $699 | $296 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waiver and/or expense reimbursement | 2.20% | (e) | 2.20% | 2.20% | 2.29% | 2.30% | (e) | |||||||||||||||||
Expenses before waiver and/or expense reimbursement | 3.77% | (e) | 4.00% | 4.62% | 4.12% | 15.19% | (e) | |||||||||||||||||
Net investment income (loss) | (1.40)% | (e) | (1.17)% | (1.29)% | (1.36)% | (1.79)% | (e) | |||||||||||||||||
Portfolio turnover rate(g) | 8% | (f) | 45% | 44% | 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 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 average shares outstanding during the period. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
32 |
Class Z Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 16, 2014(b) through October 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.27 | $9.39 | $8.82 | $10.09 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.04 | ) | (0.01 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.97 | 1.90 | 0.60 | (1.23 | ) | 0.10 | ||||||||||||||||||
Total from investment operations | 0.95 | 1.88 | 0.57 | (1.27 | ) | 0.09 | ||||||||||||||||||
Net asset value, end of period | $12.22 | $11.27 | $9.39 | $8.82 | $10.09 | |||||||||||||||||||
Total Return(a) | 8.43% | 20.02% | 6.46% | (12.59)% | 0.90% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $1,599 | $980 | $183 | $60 | $10 | |||||||||||||||||||
Average net assets (000) | $1,338 | $490 | $102 | $17 | $10 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.20% | (e) | 1.20% | 1.20% | 1.29% | 1.30% | (e) | |||||||||||||||||
Expenses before waiver and/or expense reimbursement | 3.07% | (e) | 2.94% | 3.55% | 3.48% | 13.51% | (e) | |||||||||||||||||
Net investment income (loss) | (0.37)% | (e) | (0.19)% | (0.31)% | (0.44)% | (0.67)% | (e) | |||||||||||||||||
Portfolio turnover rate(g) | 8% | (f) | 45% | 44% | 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 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 average shares outstanding during the period. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Emerging Markets Equity Opportunities Fund | 33 |
Financial Highlights (unaudited) (continued)
Class R6 Shares | ||||||||||||||||||||||||
Six Months | Year Ended October 31, | September 16, 2014(b) through October 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $11.27 | $9.39 | $8.83 | $10.09 | $10.00 | |||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | (0.03 | ) | (0.01 | ) | (0.03 | ) | (0.04 | ) | (0.01 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.98 | 1.89 | 0.59 | (1.21 | ) | 0.10 | ||||||||||||||||||
Total from investment operations | 0.95 | 1.88 | 0.56 | (1.25 | ) | 0.09 | ||||||||||||||||||
Less Dividends: | ||||||||||||||||||||||||
Dividends from net investment income | - | - | - | (0.01 | ) | - | ||||||||||||||||||
Net asset value, end of period | $12.22 | $11.27 | $9.39 | $8.83 | $10.09 | |||||||||||||||||||
Total Return(a) | 8.43% | 20.02% | 6.34% | (12.44)% | 0.90% | |||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $12,221 | $11,271 | $9,404 | $8,840 | $10,101 | |||||||||||||||||||
Average net assets (000) | $12,261 | $9,893 | $8,722 | $9,518 | $9,785 | |||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waiver and/or expense reimbursement | 1.20% | (e) | 1.20% | 1.20% | 1.29% | 1.30% | (e) | |||||||||||||||||
Expenses before waiver and/or expense reimbursement | 2.03% | (e) | 2.78% | 3.13% | 2.91% | 13.37% | (e) | |||||||||||||||||
Net investment income (loss) | (0.42)% | (e) | (0.13)% | (0.29)% | (0.40)% | (0.68)% | (e) | |||||||||||||||||
Portfolio turnover rate(g) | 8% | (f) | 45% | 44% | 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 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 average shares outstanding during the period. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
34 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM 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 | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Jennison Emerging Markets Equity Opportunities Fund, PGIM 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 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 |
PGIM JENNISON EMERGING MARKETS EQUITY OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | R6* | ||||
NASDAQ | PDEAX | PDECX | PDEZX | PDEQX | ||||
CUSIP | 743969644 | 743969636 | 743969610 | 743969628 |
*Formerly known as Class Q shares.
MF225E2
PGIM JENNISON GLOBAL OPPORTUNITIES FUND
(Formerly known as Prudential Jennison Global Opportunities Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at pgiminvestments.com |
Table of Contents
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11 |
PGIM Jennison Global Opportunities Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Jennison Global Opportunities Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Global Opportunities Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Jennison Global Opportunities Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||||
Six Months* (%) | One Year (%) | Five Years (%) | Since Inception (%) | |||||
Class A | 7.48 | 20.05 | 13.69 | 12.91 (3/14/12) | ||||
Class C | 7.10 | 25.10 | 14.13 | 13.09 (3/14/12) | ||||
Class Z | 7.67 | 27.38 | 15.27 | 14.23 (3/14/12) | ||||
Class R6** | 7.69 | 27.49 | N/A | 15.09 (12/22/14) | ||||
MSCI ACWI ND Index | ||||||||
3.56 | 14.16 | 8.80 | — | |||||
Lipper Global Multi-Cap Growth Funds Average*** | ||||||||
4.79 | 16.93 | 10.33 | — | |||||
Lipper Global Large-Cap Growth Funds Average*** | ||||||||
4.27 | 16.43 | 9.73 | — |
Source: PGIM Investments LLC and Lipper Inc.
*Not annualized
**Formerly known as Class Q shares.
***The Fund is compared to the Lipper Global Multi-Cap Growth Funds Average performance universe, although Lipper classifies the Fund in the Lipper Global Large-Cap Growth Funds performance universe. The Lipper Global Multi-Cap Growth Funds performance universe is utilized because the Fund’s manager believes that the funds included in this universe provide a more appropriate basis for fund performance comparison.
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index and the Lipper Averages are measured from the closest month-end to the class’ inception date.
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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 | Class R6* | |||||
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) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% 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) | 0.30% (0.25% currently) | 1.00% | None | None |
*Formerly known as Class Q shares.
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 ND version of the MSCI ACWI Index reflects the impact of the maximum withholding taxes on reinvested dividends. The average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 9.45% and 8.32% for Class R6 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 universe 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 average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 10.46% and 9.30% for Class R6 shares.
Lipper Global Large-Cap Growth Funds Average—The Lipper Global Large-Cap Growth Funds Average (Lipper Average) is based on the average return of all funds in the Lipper Global Large-Cap Growth Funds universe for the periods noted. Funds in the Lipper Average are funds that, by portfolio practice, invest at least 75% of their
PGIM Jennison Global Opportunities Fund | 7 |
Your Fund’s Performance (continued)
equity assets in companies both inside and outside of the US with market capitalizations (on a three-year weighted basis) above Lipper’s global large-cap floor. Global large-cap growth funds typically have above average characteristics compared to their large-cap specific subset of the MSCI World Index. The average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 10.30% and 9.40% for Class R6 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 Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
Presentation of Fund Holdings
Five Largest Holdings expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Alibaba Group Holding Ltd., ADR, Internet Software & Services | 5.7 | |||
Amazon.com, Inc., Internet & Direct Marketing Retail | 5.7 | |||
Tencent Holdings Ltd., Internet Software & Services | 5.5 | |||
Kering SA, Textiles, Apparel & Luxury Goods | 5.2 | |||
Netflix, Inc., Internet & Direct Marketing Retail | 4.9 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Internet Software & Services | 17.2 | |||
Internet & Direct Marketing Retail | 14.4 | |||
Textiles, Apparel & Luxury Goods | 12.0 | |||
IT Services | 10.9 | |||
Software | 5.3 |
Industry weightings reflect only long-term investments and are subject to change.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period
PGIM Jennison Global Opportunities Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Jennison Global Opportunities Fund | Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,074.80 | 1.17 | % | $ | 6.02 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.99 | 1.17 | % | $ | 5.86 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,071.00 | 1.91 | % | $ | 9.81 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.32 | 1.91 | % | $ | 9.54 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,076.70 | 0.90 | % | $ | 4.63 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.33 | 0.90 | % | $ | 4.51 | ||||||||||
Class R6** | Actual | $ | 1,000.00 | $ | 1,076.90 | 0.84 | % | $ | 4.33 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.63 | 0.84 | % | $ | 4.21 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**Formerly known as Class Q shares.
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Schedule of Investments (unaudited)
as of April 30, 2018
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 98.4% | ||||||||
COMMON STOCKS | ||||||||
Argentina 2.5% | ||||||||
MercadoLibre, Inc.(a) | 81,058 | $ | 27,528,107 | |||||
Brazil 1.1% | ||||||||
Raia Drogasil SA | 643,641 | 12,625,888 | ||||||
China 12.9% | ||||||||
Alibaba Group Holding Ltd., ADR*(a) | 356,982 | 63,735,567 | ||||||
JD.com, Inc., ADR*(a) | 399,026 | 14,568,439 | ||||||
Tencent Holdings Ltd. | 1,254,109 | 61,655,670 | ||||||
Tencent Holdings Ltd., 144A | 66,669 | 3,277,643 | ||||||
|
| |||||||
143,237,319 | ||||||||
France 10.4% | ||||||||
Kering SA | 99,514 | 57,568,420 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 118,622 | 41,281,835 | ||||||
Remy Cointreau SA | 126,178 | 17,383,925 | ||||||
|
| |||||||
116,234,180 | ||||||||
Germany 3.1% | ||||||||
Wirecard AG | 256,492 | 34,703,583 | ||||||
India 2.3% | ||||||||
HDFC Bank Ltd., ADR | 267,580 | 25,636,840 | ||||||
Italy 2.4% | ||||||||
Ferrari NV | 220,082 | 26,998,944 | ||||||
Japan 4.2% | ||||||||
FANUC Corp. | 71,798 | 15,379,895 | ||||||
Keyence Corp. | 51,387 | 31,334,745 | ||||||
|
| |||||||
46,714,640 | ||||||||
Netherlands 1.9% | ||||||||
ASML Holding NV | 108,280 | 20,614,729 | ||||||
Switzerland 1.1% | ||||||||
Straumann Holding AG | 17,603 | 11,949,392 | ||||||
Thailand 2.8% | ||||||||
CP ALL PCL | 11,226,790 | 30,889,072 |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
United Kingdom 2.5% | ||||||||
ASOS PLC* | 348,603 | $ | 27,922,091 | |||||
United States 51.2% | ||||||||
Activision Blizzard, Inc. | 234,243 | 15,542,023 | ||||||
Adobe Systems, Inc.* | 96,975 | 21,489,660 | ||||||
Albemarle Corp. | 139,141 | 13,491,111 | ||||||
Alphabet, Inc. (Class A Stock)* | 14,162 | 14,425,130 | ||||||
Amazon.com, Inc.* | 40,355 | 63,201,176 | ||||||
Boeing Co. (The) | 116,630 | 38,903,103 | ||||||
Charter Communications, Inc. (Class A Stock)* | 37,210 | 10,094,701 | ||||||
Estee Lauder Cos., Inc. (The) (Class A Stock) | 245,647 | 36,377,864 | ||||||
Facebook, Inc. (Class A Stock)* | 118,543 | 20,389,396 | ||||||
Home Depot, Inc. (The) | 133,769 | 24,720,511 | ||||||
Intuitive Surgical, Inc.* | 36,682 | 16,168,692 | ||||||
Mastercard, Inc. (Class A Stock) | 202,406 | 36,082,918 | ||||||
Netflix, Inc.* | 174,978 | 54,673,626 | ||||||
NIKE, Inc. (Class B Stock) | 513,249 | 35,101,099 | ||||||
PayPal Holdings, Inc.* | 432,997 | 32,305,906 | ||||||
Square, Inc. (Class A Stock)*(a) | 378,290 | 17,908,248 | ||||||
Tesla, Inc.*(a) | 87,673 | 25,767,095 | ||||||
UnitedHealth Group, Inc. | 187,555 | 44,338,002 | ||||||
Vertex Pharmaceuticals, Inc.* | 175,156 | 26,826,893 | ||||||
Workday, Inc. (Class A Stock)* | 174,182 | 21,744,881 | ||||||
|
| |||||||
569,552,035 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 1,094,606,820 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 13.8% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund(w) | 15,094,645 | 15,094,645 | ||||||
Prudential Investment Portfolios 2 - PGIM Institutional Money Market Fund | 138,436,965 | 138,436,965 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 153,531,610 | |||||||
|
| |||||||
TOTAL INVESTMENTS 112.2% | 1,248,138,430 | |||||||
Liabilities in excess of other assets (12.2)% | (136,107,380 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 1,112,031,050 | ||||||
|
|
See Notes to Financial Statements.
12 |
The following abbreviations are used in the semiannual report:
ADR—American Depositary Receipt
LIBOR—London Interbank Offered Rate
* | 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 $135,674,940; cash collateral of $138,243,593 (included in liabilities) was received with which the Series purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
Fair Value Measurements:
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—unadjusted 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, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 27,528,107 | $ | — | $ | — | ||||||
Brazil | 12,625,888 | — | — | |||||||||
China | 78,304,006 | 64,933,313 | — | |||||||||
France | — | 116,234,180 | — | |||||||||
Germany | — | 34,703,583 | — | |||||||||
India | 25,636,840 | — | — | |||||||||
Italy | — | 26,998,944 | — | |||||||||
Japan | — | 46,714,640 | — | |||||||||
Netherlands | — | 20,614,729 | — | |||||||||
Switzerland | — | 11,949,392 | — | |||||||||
Thailand | — | 30,889,072 | — | |||||||||
United Kingdom | — | 27,922,091 | — | |||||||||
United States | 569,552,035 | — | — | |||||||||
Affiliated Mutual Funds | 153,531,610 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 867,178,486 | $ | 380,959,944 | $ | — | ||||||
|
|
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2018 were as follows:
Internet Software & Services | 17.2 | % | ||
Internet & Direct Marketing Retail | 14.4 | |||
Affiliated Mutual Funds (including 12.4% of collateral for securities on loan) | 13.8 | |||
Textiles, Apparel & Luxury Goods | 12.0 | |||
IT Services | 10.9 | |||
Software | 5.3 | |||
Automobiles | 4.7 | |||
Health Care Providers & Services | 4.0 | |||
Food & Staples Retailing | 3.9 | |||
Aerospace & Defense | 3.5 | |||
Personal Products | 3.3 | |||
Electronic Equipment, Instruments & Components | 2.8 | |||
Health Care Equipment & Supplies | 2.5 | % | ||
Biotechnology | 2.4 | |||
Banks | 2.3 | |||
Specialty Retail | 2.2 | |||
Semiconductors & Semiconductor Equipment | 1.9 | |||
Beverages | 1.6 | |||
Machinery | 1.4 | |||
Chemicals | 1.2 | |||
Media | 0.9 | |||
|
| |||
112.2 | ||||
Liabilities in excess of other assets | (12.2 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series entered into financial instruments/transactions 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 financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 135,674,940 | $ | (135,674,940 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
14 |
This Page Intentionally Left Blank
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets | ||||
Investments at value, including securities on loan of $135,674,940: | ||||
Unaffiliated investments (cost $922,894,742) | $ | 1,094,606,820 | ||
Affiliated investments (cost $153,526,252) | 153,531,610 | |||
Receivable for investments sold | 14,490,038 | |||
Receivable for Series shares sold | 7,132,913 | |||
Dividends receivable | 1,275,857 | |||
Tax reclaim receivable | 122,267 | |||
Prepaid expenses | 59,302 | |||
|
| |||
Total Assets | 1,271,218,807 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 138,243,593 | |||
Payable for investments purchased | 18,099,160 | |||
Payable for Series shares reacquired | 1,838,974 | |||
Management fee payable | 671,863 | |||
Accrued expenses and other liabilities | 177,817 | |||
Distribution fee payable | 134,992 | |||
Affiliated transfer agent fee payable | 21,358 | |||
|
| |||
Total Liabilities | 159,187,757 | |||
|
| |||
Net Assets | $ | 1,112,031,050 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 496,531 | ||
Paid-in capital in excess of par | 960,181,758 | |||
|
| |||
960,678,289 | ||||
Accumulated net investment loss | (2,333,717 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (18,015,446 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 171,701,924 | |||
|
| |||
Net assets, April 30, 2018 | $ | 1,112,031,050 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value and redemption price per share | $ | 22.26 |
| |
Maximum sales charge (5.50% of offering price) | 1.30 | |||
|
| |||
Maximum offering price to public | $ | 23.56 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 21.25 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 22.60 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share | $ | 22.67 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 17 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $243,789) | $ | 2,838,662 | ||
Income from securities lending, net (including affiliated income of $41,272) | 160,528 | |||
Affiliated dividend income | 152,399 | |||
|
| |||
Total income | 3,151,589 | |||
|
| |||
Expenses | ||||
Management fee | 3,176,526 | |||
Distribution fee(a) | 701,019 | |||
Transfer agent’s fees and expenses (affiliated expense of $56,220)(a) | 221,938 | |||
Custodian and accounting fees | 82,074 | |||
Registration fees(a) | 41,372 | |||
Shareholders’ reports | 23,789 | |||
Audit fee | 13,686 | |||
Directors’ fees | 10,952 | |||
Legal fees and expenses | 10,237 | |||
Miscellaneous | 13,730 | |||
|
| |||
Total expenses | 4,295,323 | |||
Less: Fee waiver and/or expense reimbursement(a) | (138,085 | ) | ||
Less: Distribution fee waiver(a) | (28,599 | ) | ||
|
| |||
Net expenses | 4,128,639 | |||
|
| |||
Net investment income (loss) | (977,050 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(9,786)) | 1,012,866 | |||
Foreign currency transactions | 16,988 | |||
|
| |||
1,029,854 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $4,662) | 39,504,903 | |||
Foreign currencies | (13,265 | ) | ||
|
| |||
39,491,638 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 40,521,492 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 39,544,442 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 171,586 | 529,433 | — | — | ||||||||||||
Transfer agent’s fees and expenses | 48,607 | 39,307 | 133,969 | 55 | ||||||||||||
Registration fees | 11,285 | 8,951 | 13,363 | 7,773 | ||||||||||||
Fee waiver and/or expense reimbursement | (24,564 | ) | (21,518 | ) | (74,609 | ) | (17,394 | ) | ||||||||
Distribution fee waiver | (28,599 | ) | — | — | — |
See Notes to Financial Statements.
18 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | (977,050 | ) | $ | (1,676,165 | ) | ||
Net realized gain (loss) on investment and foreign currency transactions | 1,029,854 | 10,626,478 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 39,491,638 | 97,281,693 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 39,544,442 | 106,232,006 | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 614,466,424 | 276,077,034 | ||||||
Cost of shares reacquired | (75,565,136 | ) | (113,423,243 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | 538,901,288 | 162,653,791 | ||||||
|
|
|
| |||||
Total increase (decrease) | 578,445,730 | 268,885,797 | ||||||
Net Assets: | ||||||||
Beginning of period | 533,585,320 | 264,699,523 | ||||||
|
|
|
| |||||
End of period(a) | $ | 1,112,031,050 | $ | 533,585,320 | ||||
|
|
|
| |||||
(a) Includes accumulated net investment loss: | $ | (2,333,717 | ) | $ | (1,356,667 | ) | ||
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 19 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven series: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Jennison Global Opportunities Fund (the “Series”). Effective June 11, 2018, the Series’ names were changed by replacing “Prudential” with “PGIM” in each Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is to seek long-term growth of capital.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
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For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally 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 is 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 for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
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
PGIM Jennison Global Opportunities Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the period, the Series does not 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
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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.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
Master Netting Arrangements: The Fund, on behalf of 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.
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The
PGIM Jennison Global Opportunities Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
Series also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 or 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 specific identification method. Dividend income is recorded on the ex-date. 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to pay dividends from 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 gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
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Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly, at an annual rate of 0.825% of the Series’ average daily net assets up to $1 billion and 0.80% of such assets in excess of $1 billion. The effective management fee rate, before any waivers and/or expense reimbursements, was 0.825% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 28, 2019, to limit the net annual Series operating expenses (exclusive of distribution and service (12b-1) fees, transfer agency expenses (including sub-transfer agency and networking fees), taxes (such as income and foreign withholdings taxes, stamp duty and deferred tax expenses), interest, acquired fund fees and expenses, brokerage, extraordinary expenses and certain other expenses, such as dividend, broker charges and interest expense on short sales) of each class of shares to 0.84% of the Series’ average daily net assets. Fees and/or expenses waived and/or reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements, was 0.789% for the six months ended April 30, 2018.
PGIM Jennison Global Opportunities Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
The Fund, on behalf of 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 Z and Class R6 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 “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 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30% and 1% of the average daily net assets of the Class A and Class C shares, respectively. PIMS has contractually agreed to limit such fees to 0.25% of the average daily net assets of the Class A shares through February 28, 2019.
PIMS has advised the Series that it has received $1,052,395 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $678 and $8,137 in contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders.
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
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The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30, 2018, PGIM, Inc. was compensated $34,427 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018 were $769,499,507 and $241,469,616, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 5,431,483 | $ | 266,708,274 | $ | 257,045,112 | $ | — | $ | — | $ | 15,094,645 | 15,094,645 | $ | 152,399 | |||||||||||||||||
PGIM Institutional Money Market Fund | 56,735,133 | 319,027,171 | 237,320,215 | 4,662 | (9,786 | ) | 138,436,965 | 138,436,965 | 41,272 | |||||||||||||||||||||||
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$ | 62,166,616 | $ | 585,735,445 | $ | 494,365,327 | $ | 4,662 | $ | (9,786 | ) | $ | 153,531,610 | $ | 193,671 | ||||||||||||||||||
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* | The Funds did not have any capital gain distributions during the reporting period. |
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 1,078,098,361 | ||
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Gross Unrealized Appreciation | 195,960,357 | |||
Gross Unrealized Depreciation | (25,920,288 | ) | ||
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Net Unrealized Appreciation | $ | 170,040,069 | ||
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The book basis may differ from tax basis due to certain tax-related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2017 of approximately $17,383,000 which can be carried forward for an unlimited period. The Series utilized approximately $10,095,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended October 31, 2017.
PGIM Jennison Global Opportunities Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
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 $1,351,000 as having been incurred in the following fiscal year (October 31, 2018).
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.
6. Capital and Ownership
The Series offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class R6 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.
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which are divided into seven series. There are 725 million shares authorized for the Series, divided into five classes, designated Class A, Class C, Class Z, Class T and Class R6 common stock, each of which consists of 25 million, 65 million, 200 million, 235 million and 200 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
At reporting period end, eight shareholders of record held 68% of the Series’ outstanding shares.
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Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 2,570,256 | $ | 57,340,907 | |||||
Shares reacquired | (493,188 | ) | (11,026,765 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 2,077,068 | 46,314,142 | ||||||
Shares issued upon conversion from other share class(es) | 63,301 | 1,394,115 | ||||||
Shares reacquired upon conversion into other share class(es) | (238,123 | ) | (5,454,402 | ) | ||||
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Net increase (decrease) in shares outstanding | 1,902,246 | $ | 42,253,855 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 2,078,996 | $ | 38,260,950 | |||||
Shares reacquired | (1,776,496 | ) | (28,917,700 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 302,500 | 9,343,250 | ||||||
Shares issued upon conversion from other share class(es) | 33,357 | 589,430 | ||||||
Shares reacquired upon conversion into other share class(es) | (1,897,150 | ) | (30,135,824 | ) | ||||
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Net increase (decrease) in shares outstanding | (1,561,293 | ) | $ | (20,203,144 | ) | |||
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Class C | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 2,705,027 | $ | 57,632,703 | |||||
Shares reacquired | (250,298 | ) | (5,286,957 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 2,454,729 | 52,345,746 | ||||||
Shares reacquired upon conversion into other share class(es) | (62,763 | ) | (1,323,668 | ) | ||||
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Net increase (decrease) in shares outstanding | 2,391,966 | $ | 51,022,078 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 1,591,435 | $ | 28,218,908 | |||||
Shares reacquired | (1,038,579 | ) | (16,015,909 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 552,856 | 12,202,999 | ||||||
Shares reacquired upon conversion into other share class(es) | (121,302 | ) | (2,004,556 | ) | ||||
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Net increase (decrease) in shares outstanding | 431,554 | $ | 10,198,443 | |||||
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Class Z | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 17,078,744 | $ | 386,873,396 | |||||
Shares reacquired | (2,565,912 | ) | (57,605,374 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 14,512,832 | 329,268,022 | ||||||
Shares issued upon conversion from other share class(es) | 284,935 | 6,576,697 | ||||||
Shares reacquired upon conversion into other share class(es) | (64,031 | ) | (1,434,290 | ) | ||||
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Net increase (decrease) in shares outstanding | 14,733,736 | $ | 334,410,429 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 10,560,611 | $ | 193,966,873 | |||||
Shares reacquired | (4,030,257 | ) | (68,348,380 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 6,530,354 | 125,618,493 | ||||||
Shares issued upon conversion from other shares class(es) | 1,977,600 | 31,909,367 | ||||||
Shares reacquired upon conversion into other share class(es) | (30,248 | ) | (537,355 | ) | ||||
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Net increase (decrease) in shares outstanding | 8,477,706 | $ | 156,990,505 | |||||
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PGIM Jennison Global Opportunities Fund | 29 |
Notes to Financial Statements (unaudited) (continued)
Class R6 | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 5,007,233 | $ | 112,619,418 | |||||
Shares reacquired | (72,512 | ) | (1,646,040 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 4,934,721 | 110,973,378 | ||||||
Shares issued upon conversion from other share class(es) | 10,529 | 241,548 | ||||||
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Net increase (decrease) in shares outstanding | 4,945,250 | $ | 111,214,926 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 811,863 | $ | 15,630,303 | |||||
Shares reacquired | (7,440 | ) | (141,254 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 804,423 | 15,489,049 | ||||||
Shares issued upon conversion from other share class(es) | 9,725 | 178,938 | ||||||
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Net increase (decrease) in shares outstanding | 814,148 | $ | 15,667,987 | |||||
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7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series did not utilize the SCA during the reporting period ended April 30, 2018.
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Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $20.72 | $15.14 | $15.63 | $14.08 | $12.94 | $9.86 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.04 | ) | (0.09 | ) | (0.05 | ) | (0.09 | ) | (0.11 | ) | (0.06 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.58 | 5.67 | (0.44 | ) | 1.64 | 1.25 | 3.14 | |||||||||||||||||||||
Total from investment operations | 1.54 | 5.58 | (0.49 | ) | 1.55 | 1.14 | 3.08 | |||||||||||||||||||||
Net asset value, end of period | $22.26 | $20.72 | $15.14 | $15.63 | $14.08 | $12.94 | ||||||||||||||||||||||
Total Return(b): | 7.43% | 36.86% | (3.13)% | 11.01% | 8.81% | 31.24% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $139,340 | $90,247 | $89,579 | $74,049 | $21,150 | $10,035 | ||||||||||||||||||||||
Average net assets (000) | $115,338 | $70,810 | $100,220 | $36,635 | $19,352 | $4,982 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.17% | (d) | 1.19% | 1.20% | 1.38% | 1.60% | 1.60% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.27% | (d) | 1.33% | 1.36% | 1.56% | 1.71% | 2.19% | |||||||||||||||||||||
Net investment income (loss) | (0.40)% | (d) | (0.55)% | (0.31)% | (0.63)% | (0.78)% | (0.54)% | |||||||||||||||||||||
Portfolio turnover rate(f) | 31% | (e) | 79% | 88% | 58% | 68% | 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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 31 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $19.85 | $14.61 | $15.20 | $13.79 | $12.77 | $9.81 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.12 | ) | (0.22 | ) | (0.15 | ) | (0.20 | ) | (0.21 | ) | (0.14 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.52 | 5.46 | (0.44 | ) | 1.61 | 1.23 | 3.10 | |||||||||||||||||||||
Total from investment operations | 1.40 | 5.24 | (0.59 | ) | 1.41 | 1.02 | 2.96 | |||||||||||||||||||||
Net asset value, end of period | $21.25 | $19.85 | $14.61 | $15.20 | $13.79 | $12.77 | ||||||||||||||||||||||
Total Return(b): | 7.05% | 35.87% | (3.88)% | 10.22% | 7.99% | 30.17% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $135,993 | $79,531 | $52,246 | $28,982 | $5,723 | $1,659 | ||||||||||||||||||||||
Average net assets (000) | $106,764 | $55,922 | $50,113 | $11,330 | $4,361 | $950 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.91% | (d) | 1.94% | 1.95% | 2.12% | 2.35% | 2.35% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.95% | (d) | 2.03% | 2.06% | 2.27% | 2.41% | 2.89% | |||||||||||||||||||||
Net investment income (loss) | (1.13)% | (d) | (1.28)% | (1.07)% | (1.37)% | (1.54)% | (1.26)% | |||||||||||||||||||||
Portfolio turnover rate(f) | 31% | (e) | 79% | 88% | 58% | 68% | 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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
32 |
Class Z Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.00 | $15.31 | $15.77 | $14.17 | $12.99 | $9.87 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | (0.05 | ) | (0.01 | ) | (0.06 | ) | (0.08 | ) | (0.03 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.61 | 5.74 | (0.45 | ) | 1.66 | 1.26 | 3.15 | |||||||||||||||||||||
Total from investment operations | 1.60 | 5.69 | (0.46 | ) | 1.60 | 1.18 | 3.12 | |||||||||||||||||||||
Net asset value, end of period | $22.60 | $21.00 | $15.31 | $15.77 | $14.17 | $12.99 | ||||||||||||||||||||||
Total Return(b): | 7.62% | 37.17% | (2.92)% | 11.29% | 9.08% | 31.61% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $693,332 | $334,783 | $114,228 | $102,800 | $33,504 | $25,219 | ||||||||||||||||||||||
Average net assets (000) | $489,096 | $193,977 | $131,042 | $48,494 | $30,965 | $18,340 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.90% | (d) | 0.94% | 0.95% | 1.15% | 1.35% | 1.35% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.93% | (d) | 1.02% | 1.06% | 1.28% | 1.42% | 1.89% | |||||||||||||||||||||
Net investment income (loss) | (0.08)% | (d) | (0.28)% | (0.07)% | (0.41)% | (0.56)% | (0.25)% | |||||||||||||||||||||
Portfolio turnover rate(f) | 31% | (e) | 79% | 88% | 58% | 68% | 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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Opportunities Fund | 33 |
Financial Highlights (unaudited) (continued)
Class R6 Shares | ||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | December 22, 2014(a) through October 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.06 | $15.33 | $15.78 | $14.15 | ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | 0.01 | (0.04 | ) | 0.01 | (0.03 | ) | ||||||||||||||||||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | 1.60 | 5.77 | (0.46 | ) | 1.66 | |||||||||||||||||||
Total from investment operations | 1.61 | 5.73 | (0.45 | ) | 1.63 | |||||||||||||||||||
Net asset value, end of period | $22.67 | $21.06 | $15.33 | $15.78 | ||||||||||||||||||||
Total Return(c): | 7.64% | 37.38% | (2.85)% | 11.52% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $143,366 | $29,023 | $8,647 | $11 | ||||||||||||||||||||
Average net assets (000) | $65,251 | $14,700 | $7,736 | $11 | ||||||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.84% | (e) | 0.84% | 0.84% | 1.09% | (e) | ||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.89% | (e) | 0.92% | 0.95% | 1.18% | (e) | ||||||||||||||||||
Net investment income (loss) | 0.11% | (e) | (0.23)% | 0.05% | (0.27)% | (e) | ||||||||||||||||||
Portfolio turnover rate(g) | 31% | (f) | 79% | 88% | 58% |
(a) | Commencement of offering. |
(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 funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Series’ portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Series’ portfolio turnover rate may be higher. |
See Notes to Financial Statements.
34 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Jennison Global Opportunities Fund, PGIM 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 |
PGIM JENNISON GLOBAL OPPORTUNITIES FUND
SHARE CLASS | A | C | Z | R6* | ||||
NASDAQ | PRJAX | PRJCX | PRJZX | PRJQX | ||||
CUSIP | 743969719 | 743969693 | 743969685 | 743969594 |
*Formerly known as Class Q shares.
MF214E2
PGIM JENNISON INTERNATIONAL OPPORTUNITIES FUND
(Formerly known as Prudential Jennison International Opportunities Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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PGIM Jennison International Opportunities Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Jennison International Opportunities Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison International Opportunities Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Jennison International Opportunities Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||||
Six Months* (%) | One Year (%) | Five Years (%) | Since Inception (%) | |||||
Class A | 4.85 | 20.68 | 7.28 | 10.09 (6/5/12) | ||||
Class C | 4.38 | 25.66 | 7.69 | 10.32 (6/5/12) | ||||
Class R** | 2.16 | N/A | N/A | N/A (11/20/17) | ||||
Class Z | 4.98 | 28.10 | 8.78 | 11.43 (6/5/12) | ||||
Class R6*** | 5.02 | 28.05 | N/A | 14.47 (12/23/15) | ||||
MSCI ACWI ex-US Index | ||||||||
3.47 | 15.91 | 5.46 | — | |||||
Lipper International Multi-Cap Growth Funds Average | ||||||||
3.03 | 16.03 | 6.37 | — |
Source: PGIM Investments LLC and Lipper Inc.
* Not annualized
** Since inception
*** Formerly known as Class Q shares.
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index and the Lipper Average are measured from the closest month-end to each classes inception date.
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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 R | Class Z | Class R6* | ||||||
Maximum initial sales charge | 5.50% of the public offering price | None | None | None | None | |||||
Contingent deferred sales charge (CDSC) (as a percentage of the lower of original purchase price or net asset value at redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% on sales made within 12 months of purchase | None | None | None | |||||
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | 0.75% (0.50% currently) | None | None |
* Formerly known as Class Q shares.
Benchmark Definitions
MSCI All Country World Index 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 provide a broad measure of stock performance throughout the world, with the exception of US-based companies. The average annual total returns for the MSCI ACWI ex-US Index measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 9.16% and 13.16% for Class R6 shares.
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 universe for the periods noted. Funds in the Lipper Average, by portfolio practice, invest in a variety of market-capitalization ranges without concentrating 75% of their equity assets in any one market-capitalization range over an extended period of time. International multi-cap growth funds typically have above-average characteristics compared to the MSCI EAFE Index. The average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 9.80% and 11.47% for Class R6 shares.
PGIM Jennison International Opportunities Fund | 7 |
Your Fund’s Performance (continued)
Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses of a mutual fund, but not sales charges or taxes.
Presentation of Fund Holdings
Five Largest Holdings expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Alibaba Group Holding Ltd., Internet Software & Services | 7.0 | |||
Tencent Holdings Ltd., Internet Software & Services | 6.4 | |||
Kering SA, Textiles, Apparel & Luxury Goods | 6.2 | |||
Wirecard AG, IT Services | 4.0 | |||
LVMH Moet Hennessy Louis Vuitton SE, Textiles, Apparel & Luxury Goods | 3.8 |
Holdings reflect only long-term investments and are subject to change.
Five Largest Industries expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Internet Software & Services | 17.7 | |||
Textiles, Apparel & Luxury Goods | 14.5 | |||
Health Care Equipment & Supplies | 5.8 | |||
Personal Products | 5.5 | |||
IT Services | 5.1 |
Industry weightings reflect only long-term investments and are subject to change.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period
PGIM Jennison International Opportunities Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Jennison International Opportunities Fund | Beginning Account Value November 1, 2017 | Ending Account April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,048.50 | 1.17 | % | $ | 5.94 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.99 | 1.17 | % | $ | 5.86 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,043.80 | 1.91 | % | $ | 9.68 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.32 | 1.91 | % | $ | 9.54 | ||||||||||
Class R | Actual** | $ | 1,000.00 | $ | 1,021.60 | 1.44 | % | $ | 6.42 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.65 | 1.44 | % | $ | 7.20 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,049.80 | 0.87 | % | $ | 4.42 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.48 | 0.87 | % | $ | 4.36 | ||||||||||
Class R6*** | Actual | $ | 1,000.00 | $ | 1,050.20 | 0.84 | % | $ | 4.27 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.63 | 0.84 | % | $ | 4.21 |
*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**“Actual” expenses are calculated using the 161 days in the period ended April 30, 2018 due to the class’ inception date of November 20, 2017.
***Formerly known as Class Q shares.
10 | Visit our website at pgiminvestments.com |
Schedule of Investments (unaudited)
as of April 30, 2018
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 96.7% | ||||||||
COMMON STOCKS 93.9% | ||||||||
Argentina 2.5% | ||||||||
MercadoLibre, Inc. | 31,653 | $ | 10,749,675 | |||||
Brazil 2.2% | ||||||||
PagSeguro Digital Ltd. (Class A Stock)* | 136,511 | 4,536,260 | ||||||
Raia Drogasil SA* | 247,727 | 4,859,500 | ||||||
|
| |||||||
9,395,760 | ||||||||
Canada 1.7% | ||||||||
Shopify, Inc. (Class A Stock)* | 54,991 | 7,348,447 | ||||||
China 15.0% | ||||||||
Alibaba Group Holding Ltd., ADR*(a) | 167,262 | 29,862,958 | ||||||
JD.com, Inc., ADR*(a) | 183,483 | 6,698,964 | ||||||
Tencent Holdings Ltd. | 560,704 | 27,565,850 | ||||||
|
| |||||||
64,127,772 | ||||||||
Denmark 1.1% | ||||||||
Novozymes A/S (Class B Stock) | 102,520 | 4,819,760 | ||||||
France 20.7% | ||||||||
Dassault Systemes SE | 103,713 | 13,440,150 | ||||||
Kering SA | 45,598 | 26,378,247 | ||||||
L’Oreal SA | 63,465 | 15,281,702 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 47,041 | 16,370,815 | ||||||
Pernod-Ricard SA | 51,329 | 8,525,019 | ||||||
Remy Cointreau SA | 63,283 | 8,718,690 | ||||||
|
| |||||||
88,714,623 | ||||||||
Germany 8.4% | ||||||||
Fresenius SE & Co. KGaA | 99,742 | 7,595,771 | ||||||
Infineon Technologies AG | 430,523 | 11,023,834 | ||||||
Wirecard AG | 127,423 | 17,240,439 | ||||||
|
| |||||||
35,860,044 | ||||||||
Hong Kong 2.1% | ||||||||
Techtronic Industries Co. Ltd. | 1,514,539 | 8,872,460 | ||||||
India 5.2% | ||||||||
HDFC Bank Ltd., ADR | 121,418 | 11,633,059 | ||||||
Maruti Suzuki India Ltd. | 79,570 | 10,470,523 | ||||||
|
| |||||||
22,103,582 |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Italy 8.5% | ||||||||
Brembo SpA | 401,820 | $ | 5,919,831 | |||||
Brunello Cucinelli SpA, 144A | 5,417 | 179,926 | ||||||
Brunello Cucinelli SpA | 296,781 | 9,857,568 | ||||||
Ferrari NV | 89,363 | 10,962,762 | ||||||
Moncler SpA | 207,201 | 9,338,930 | ||||||
|
| |||||||
36,259,017 | ||||||||
Japan 7.3% | ||||||||
FANUC Corp. | 33,591 | 7,195,549 | ||||||
Keyence Corp. | 25,423 | 15,502,427 | ||||||
Kose Corp. | 45,377 | 8,385,521 | ||||||
|
| |||||||
31,083,497 | ||||||||
Netherlands 1.7% | ||||||||
ASML Holding NV | 38,524 | 7,334,335 | ||||||
Sweden 1.7% | ||||||||
Atlas Copco AB (Class A Stock) | 184,415 | 7,211,796 | ||||||
Switzerland 5.3% | ||||||||
Givaudan SA | 4,392 | 9,776,810 | ||||||
Straumann Holding AG | 19,304 | 13,104,077 | ||||||
|
| |||||||
22,880,887 | ||||||||
Thailand 2.0% | ||||||||
CP ALL PCL | 3,077,215 | 8,466,562 | ||||||
United Kingdom 7.1% | ||||||||
Ashtead Group PLC | 398,068 | 11,055,515 | ||||||
ASOS PLC* | 134,980 | 10,811,507 | ||||||
St. James’s Place PLC | 554,294 | 8,634,449 | ||||||
|
| |||||||
30,501,471 | ||||||||
United States 1.4% | ||||||||
Albemarle Corp. | 62,698 | 6,079,198 | ||||||
|
| |||||||
TOTAL COMMON STOCKS | 401,808,886 | |||||||
|
|
See Notes to Financial Statements.
12 |
Description | Shares | Value | ||||||
PREFERRED STOCK 2.8% | ||||||||
Germany | ||||||||
Sartorius AG (PRFC) | 76,871 | $ | 11,807,436 | |||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 413,616,322 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS 10.9% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund(w) | 11,773,435 | 11,773,435 | ||||||
Prudential Investment Portfolios 2 - PGIM Institutional Money Market Fund | 35,121,475 | 35,121,475 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 46,894,910 | |||||||
|
| |||||||
TOTAL INVESTMENTS 107.6% | 460,511,232 | |||||||
Liabilities in excess of other assets (7.6)% | (32,425,051 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 428,086,181 | ||||||
|
|
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
LIBOR—London Interbank Offered Rate
PRFC—Preference 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 $34,865,224; cash collateral of $35,067,474 (included in liabilities) was received with which the Series purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Fair Value Measurements:
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—unadjusted 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, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 10,749,675 | $ | — | $ | — | ||||||
Brazil | 9,395,760 | — | — | |||||||||
Canada | 7,348,447 | — | — | |||||||||
China | 36,561,922 | 27,565,850 | — | |||||||||
Denmark | — | 4,819,760 | — | |||||||||
France | — | 88,714,623 | — | |||||||||
Germany | — | 35,860,044 | — | |||||||||
Hong Kong | — | 8,872,460 | — | |||||||||
India | 11,633,059 | 10,470,523 | — | |||||||||
Italy | — | 36,259,017 | — | |||||||||
Japan | — | 31,083,497 | — | |||||||||
Netherlands | — | 7,334,335 | — | |||||||||
Sweden | — | 7,211,796 | — | |||||||||
Switzerland | — | 22,880,887 | — | |||||||||
Thailand | — | 8,466,562 | — | |||||||||
United Kingdom | — | 30,501,471 | — | |||||||||
United States | 6,079,198 | — | — | |||||||||
Preferred Stock | ||||||||||||
Germany | — | 11,807,436 | — | |||||||||
Affiliated Mutual Funds | 46,894,910 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 128,662,971 | $ | 331,848,261 | $ | — | ||||||
|
|
|
|
|
|
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
See Notes to Financial Statements.
14 |
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2018 were as follows:
Internet Software & Services | 17.7 | % | ||
Textiles, Apparel & Luxury Goods | 14.5 | |||
Affiliated Mutual Funds (including 8.2% of collateral for securities on loan) | 10.9 | |||
Health Care Equipment & Supplies | 5.8 | |||
Personal Products | 5.5 | |||
IT Services | 5.1 | |||
Automobiles | 5.0 | |||
Chemicals | 4.8 | |||
Semiconductors & Semiconductor Equipment | 4.3 | |||
Internet & Direct Marketing Retail | 4.1 | |||
Beverages | 4.0 | |||
Electronic Equipment, Instruments & Components | 3.6 | |||
Machinery | 3.4 | % | ||
Software | 3.2 | |||
Food & Staples Retailing | 3.1 | |||
Banks | 2.7 | |||
Trading Companies & Distributors | 2.6 | |||
Household Durables | 2.1 | |||
Capital Markets | 2.0 | |||
Health Care Providers & Services | 1.8 | |||
Auto Components | 1.4 | |||
|
| |||
107.6 | ||||
Liabilities in excess of other assets | (7.6 | ) | ||
|
| |||
100.0 | % | |||
|
|
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series entered into financial instruments/transactions 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 financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 34,865,224 | $ | (34,865,224 | ) | $ | — | |||||
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 15 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets | ||||
Investments at value, including securities on loan of $34,865,224: | ||||
Unaffiliated investments (cost $373,067,343) | $ | 413,616,322 | ||
Affiliated investments (cost $46,893,507) | 46,894,910 | |||
Foreign currency, at value (cost $163,756) | 163,012 | |||
Tax reclaim receivable | 1,996,769 | |||
Dividends receivable | 825,327 | |||
Receivable for Series shares sold | 242,398 | |||
Receivable for investments sold | 163,727 | |||
Prepaid expenses | 2,429 | |||
|
| |||
Total Assets | 463,904,894 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 35,067,474 | |||
Payable for Series shares reacquired | 192,358 | |||
Management fee payable | 184,396 | |||
Payable for investments purchased | 163,251 | |||
Distribution fee payable | 136,847 | |||
Affiliated transfer agent fee payable | 74,387 | |||
|
| |||
Total Liabilities | 35,818,713 | |||
|
| |||
Net Assets | $ | 428,086,181 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 237,599 | ||
Paid-in capital in excess of par | 386,838,715 | |||
|
| |||
387,076,314 | ||||
Distribution in excess of net investment income | (142,322 | ) | ||
Accumulated net realized gain on investment and foreign currency transactions | 581,233 | |||
Net unrealized appreciation on investments and foreign currencies | 40,570,956 | |||
|
| |||
Net assets, April 30, 2018 | $ | 428,086,181 | ||
|
|
See Notes to Financial Statements.
16 |
Class A | ||||
Net asset value and redemption price per share | $ | 17.93 | ||
Maximum sales charge (5.50% of offering price) | 1.04 | |||
|
| |||
Maximum offering price to public | $ | 18.97 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share | $ | 17.15 | ||
|
| |||
Class R | ||||
Net asset value, offering price and redemption price per share | $ | 18.00 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share | $ | 18.12 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share | $ | 18.12 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 17 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) | ||||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $263,938) | $ | 2,040,695 | ||
Affiliated dividend income | 35,047 | |||
Income from securities lending, net (including affiliated income of $11,667) | 17,993 | |||
|
| |||
Total income | 2,093,735 | |||
|
| |||
Expenses | ||||
Management fee | 1,413,887 | |||
Distribution fee(a) | 964,758 | |||
Transfer agent’s fees and expenses (affiliated expense of $130,179)(a) | 146,465 | |||
Custodian and accounting fees | 64,639 | |||
Registration fees(a) | 34,608 | |||
Shareholders’ reports | 19,067 | |||
Audit fee | 14,491 | |||
Legal fees and expenses | 11,103 | |||
Directors’ fees | 6,957 | |||
Miscellaneous | 17,165 | |||
|
| |||
Total expenses | 2,693,140 | |||
Less: Fee waiver and/or reimbursement(a) | (147,016 | ) | ||
Distribution fee waiver(a) | (315,294 | ) | ||
|
| |||
Net expenses | 2,230,830 | |||
|
| |||
Net investment income (loss) | (137,095 | ) | ||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(1,299)) | 3,135,142 | |||
Foreign currency transactions | (54,590 | ) | ||
|
| |||
3,080,552 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $1,403) | 14,291,756 | |||
Foreign currencies | 18,620 | |||
|
| |||
14,310,376 | ||||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 17,390,928 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 17,253,833 | ||
|
|
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class R | Class Z | Class R6 | ||||||||||||||||
Distribution fee | 11,819 | 12,968 | 939,971 | — | — | |||||||||||||||
Transfer agent’s fees and expenses | 4,471 | 1,287 | 132,726 | 7,877 | 104 | |||||||||||||||
Registration fees | 6,966 | 6,965 | 7,607 | 6,703 | 6,367 | |||||||||||||||
Fee waiver and/or reimbursement | (12,540 | ) | (8,632 | ) | (74,802 | ) | (29,833 | ) | (21,209 | ) | ||||||||||
Distribution fee waiver | (1,970 | ) | — | (313,324 | ) | — | — |
See Notes to Financial Statements.
18 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets |
| |||||||
Operations |
| |||||||
Net investment income (loss) | $ | (137,095 | ) | $ | 110,477 | |||
Net realized gain (loss) on investment and foreign currency transactions | 3,080,552 | 2,352,828 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | 14,310,376 | 14,853,126 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 17,253,833 | 17,316,431 | ||||||
|
|
|
| |||||
Dividends from net investment income |
| |||||||
Class Z | (54,385 | ) | (41,518 | ) | ||||
Class R6 | (54,898 | ) | (71,620 | ) | ||||
|
|
|
| |||||
(109,283 | ) | (113,138 | ) | |||||
|
|
|
| |||||
Series share transactions (Net of share conversions) |
| |||||||
Net proceeds from shares sold | 33,840,487 | 11,624,932 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 109,172 | 113,138 | ||||||
Net asset value of shares issued in merger | 372,771,258 | — | ||||||
Cost of shares reacquired | (57,704,866 | ) | (12,451,939 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from Series share transactions | 349,016,051 | (713,869 | ) | |||||
|
|
|
| |||||
Total increase (decrease) | 366,160,601 | 16,489,424 | ||||||
Net Assets: |
| |||||||
Beginning of period | 61,925,580 | 45,436,156 | ||||||
|
|
|
| |||||
End of period(a) | $ | 428,086,181 | $ | 61,925,580 | ||||
|
|
|
| |||||
(a) Includes undistributed/(distributions in excess of) net investment income of: | $ | (142,322 | ) | $ | 104,056 | |||
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 19 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven funds: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Jennison International Opportunities Fund (the “Series”). Effective June 11, 2018, the Series’ name was changed by replacing “Prudential” with “PGIM” in each Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is to seek long-term growth of capital.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
20 |
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally 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 is 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 for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
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
PGIM Jennison International Opportunities Fund | 21 |
Notes to Financial Statements (unaudited) (continued)
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the period, the Series does not 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
22 |
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.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
Master Netting Arrangements: The Fund, on behalf of 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.
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto. The
PGIM Jennison International Opportunities Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
Series also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 or 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 specific identification method. Dividend income is recorded on the ex-date. 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to pay dividends from 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 gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
24 |
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly, at an annual rate of 0.825% of the Series’ average daily net assets up to and including $1 billion and 0.80% of such assets in excess of $1 billion. The effective management fee rate, before any waivers and/or expense reimbursements, was 0.825% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 29, 2020, to reimburse and/or waive fees so that the Fund’s net annual operating expenses of each class do not exceed 0.84% of the Fund’s average daily net assets (exclusive of distribution and service (12b-1) fees, transfer agencyIsub-transfer agency fees and networking expenses, extraordinary expenses and certain other expenses, such as taxes, interest and brokerage commissions). Separately, PGIM Investments has contractually agreed to waive and/or reimburse up to 0.06% of certain other expenses on an annualized basis, through February 29, 2020, to the extent that the Fund’s total net annual operating expenses (exclusive of taxes, interest, and certain extraordinary expenses) exceed 1.15% of average daily net assets for Class A shares, 1.90% of average daily net assets for Class C shares, 1.48% of average daily net assets for Class R shares, 0.90% of average daily net assets for Class Z shares, and 0.84%
PGIM Jennison International Opportunities Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
of average daily net assets for Class R6 shares. To the extent shared expenses which are exclusive of class specific expenses are waived and/or reimbursed for any specific share class the Manager has voluntarily agreed to waive and/or reimburse shared expenses equally for all share classes. Fees and/or expenses waived and/or reimbursed by PGIM Investments may be recouped by PGIM Investments within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements was 0.739% for the six months ended April 30, 2018.
The Fund, on behalf of 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 R, Class Z and Class R6 shares of the Series. The Series compensates PIMS for distributing and servicing the Series’ Class A, Class C and Class R 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 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30%, 1% and 0.75% of the average daily net assets of the Class A, Class C and Class R shares, respectively. PIMS has contractually agreed through February 28, 2019 to limit such expenses to 0.25% and 0.50% of the average daily net assets of the Class A and Class R shares, respectively.
PIMS has advised the Series that it has received $52,035 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $660 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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.
26 |
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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30 2018, PGIM, Inc. was compensated $8,697 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018 were $113,639,496 and $104,015,708, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 1,267,836 | $ | 471,940,705 | $ | 461,435,106 | $ | — | $ | — | $ | 11,773,435 | 11,773,435 | $ | 35,047 | |||||||||||||||||
PGIM Institutional Money Market Fund | 5,918,998 | 113,730,535 | 84,528,162 | 1,403 | (1,299 | ) | 35,121,475 | 35,121,475 | 11,667 | |||||||||||||||||||||||
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$ | 7,186,834 | $ | 585,671,240 | $ | 545,963,268 | $ | 1,403 | $ | (1,299 | ) | $ | 46,894,910 | $ | 46,714 | ||||||||||||||||||
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* | The Funds did not have any capital gain distributions during the reporting period. |
PGIM Jennison International Opportunities Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 419,974,281 | ||
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Gross Unrealized Appreciation | 50,792,536 | |||
Gross Unrealized Depreciation | (10,255,585 | ) | ||
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Net Unrealized Appreciation | $ | 40,536,951 | ||
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The book basis may differ from tax basis due to certain tax-related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward as of October 31, 2017 of approximately $2,465,000 which can be carried forward for an unlimited period. The Series utilized approximately $2,367,000 of its capital loss carryforward during the fiscal year ended October 31, 2017 to offset capital gains. 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.
6. Capital and Ownership
The Series offers Class A, Class C, Class R, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class R, Class Z and Class R6 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.
28 |
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 850 million shares authorized for the Series, divided into six classes, designated Class A, Class C, Class R, Class Z, Class T and Class R6 common stock, each of which consists of 40 million, 75 million, 175 million, 175 million, 210 million and 175 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
As of April 30, 2018, Prudential, through its affiliate entities, owned 1,385,416 Class R6 shares of the Series. At reporting period end, three shareholders of record held 46% of the Series’ outstanding shares.
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 299,777 | $ | 5,404,419 | |||||
Shares reacquired | (45,261 | ) | (807,436 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 254,516 | 4,596,983 | ||||||
Shares reacquired upon conversion into other share class(es) | (3,428 | ) | (62,809 | ) | ||||
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Net increase (decrease) in shares outstanding | 251,088 | $ | 4,534,174 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 178,060 | $ | 2,725,886 | |||||
Shares reacquired | (71,108 | ) | (952,807 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 106,952 | 1,773,079 | ||||||
Shares reacquired upon conversion into other share class(es) | (32,857 | ) | (412,542 | ) | ||||
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Net increase (decrease) in shares outstanding | 74,095 | $ | 1,360,537 | |||||
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Class C | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 124,178 | $ | 2,132,957 | |||||
Shares reacquired | (21,743 | ) | (376,307 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 102,435 | 1,756,650 | ||||||
Shares reacquired upon conversion into other share class(es) | (777 | ) | (13,207 | ) | ||||
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Net increase (decrease) in shares outstanding | 101,658 | $ | 1,743,443 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 65,162 | $ | 925,090 | |||||
Shares reacquired | (23,164 | ) | (312,798 | ) | ||||
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Net increase (decrease) in shares outstanding | 41,998 | $ | 612,292 | |||||
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Class R | ||||||||
Six months ended April 30, 2018*: | ||||||||
Shares sold | 276,357 | $ | 4,947,486 | |||||
Shares issued in merger | 19,031,205 | 329,810,775 | ||||||
Shares reacquired | (1,618,758 | ) | (29,325,315 | ) | ||||
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Net increase (decrease) in shares outstanding | 17,688,804 | $ | 305,432,946 | |||||
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PGIM Jennison International Opportunities Fund | 29 |
Notes to Financial Statements (unaudited) (continued)
Class Z | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 1,115,823 | $ | 20,242,619 | |||||
Shares issued in reinvestment of dividends and distributions | 3,125 | 54,275 | ||||||
Shares issued in merger | 2,461,464 | 42,854,094 | ||||||
Shares reacquired | (1,333,286 | ) | (23,612,866 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 2,247,126 | 39,538,122 | ||||||
Shares issued upon conversion from other share class(es) | 4,132 | 76,016 | ||||||
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Net increase (decrease) in shares outstanding | 2,251,258 | $ | 39,614,138 | |||||
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Year ended October 31, 2017: | ||||||||
Shares sold | 317,602 | $ | 4,781,956 | |||||
Shares issued in reinvestment of dividends and distributions | 3,504 | 41,518 | ||||||
Shares reacquired | (192,382 | ) | (2,704,237 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 128,724 | 2,119,237 | ||||||
Shares issued upon conversion from other shares class(es) | 32,543 | 412,542 | ||||||
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Net increase (decrease) in shares outstanding | 161,267 | $ | 2,531,779 | |||||
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Class R6 | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 62,190 | $ | 1,113,006 | |||||
Shares issued in reinvestment of dividends and distributions | 3,160 | 54,897 | ||||||
Shares issued in merger | 6,114 | 106,389 | ||||||
Shares reacquired | (195,003 | ) | (3,582,942 | ) | ||||
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Net increase (decrease) in shares outstanding | (123,539 | ) | $ | (2,308,650 | ) | |||
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Year ended October 31, 2017: | ||||||||
Shares sold | 252,504 | $ | 3,192,000 | |||||
Shares issued in reinvestment of dividends and distributions | 6,044 | 71,620 | ||||||
Shares reacquired | (585,779 | ) | (8,482,097 | ) | ||||
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Net increase (decrease) in shares outstanding | (327,231 | ) | $ | (5,218,477 | ) | |||
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* | Commencement of offering was November 20, 2017. |
7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
30 |
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series utilized the SCA during the reporting period ended April 30, 2018. The average daily balance for the 7 days that the Series had loans outstanding during the period was $4,599,714, borrowed at a weighted average interest rate of 3.14%. The maximum loan balance outstanding during the period was $5,658,000. At April 30, 2018, the Series did not have an outstanding loan balance.
8. Reorganization
On June 7, 2017, the Board approved an Agreement and Plan of Reorganization (the “Plans”) which provided for the transfer of all the assets of Target International Equity Portfolio (the “Merged Portfolio”) for shares of Jennison International Opportunities Fund (the “Acquiring Fund”) and the assumption of the liabilities of the Merged Portfolio respectively. Shareholders approved the Plan at a meeting on November 28, 2017 and the reorganization took place on December 15, 2017.
On the reorganization date, the Merged Portfolio had the following total investment cost and value, representing the principal assets acquired by the Acquiring Fund:
Merged Portfolio | Total Investment Value | Total Investment Cost | ||||||
Target International Equity Portfolio | $ | 325,194,328 | $ | 319,368,212 |
The purpose of the transaction was to combine two portfolios with substantially similar investment objectives and policies.
The acquisition was accomplished by a tax-free exchange of the following shares on December 15, 2017:
Merged Portfolio | Acquiring Fund | |||||||||||||
Target International Equity Portfolio | Jennison International Opportunities Fund | |||||||||||||
Class | Shares | Class | Shares | Value | ||||||||||
R | 28,199,749 | R | 19,031,205 | $ | 329,810,775 | |||||||||
Z | 3,655,174 | Z | 2,461,464 | 42,854,094 | ||||||||||
R6 | 9,077 | R6 | 6,114 | 106,389 |
PGIM Jennison International Opportunities Fund | 31 |
Notes to Financial Statements (unaudited) (continued)
For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Merged Portfolio were carried forward to reflect the tax-free status of the acquisition.
The net assets and net unrealized appreciation immediately before the acquisition were as follows:
Merged Portfolio | Acquiring Fund | |||||||||||||
Target International Equity Portfolio | Jennison International Opportunities Fund | |||||||||||||
Class | Net assets | Unrealized Appreciation on investments | Class | Net Assets | ||||||||||
R | $ | 329,810,775 | $ | 4,460,684 | R | $ | 9,834 | |||||||
Z | 42,854,094 | 1,007,049 | Z | 31,606,586 | ||||||||||
R6 | 106,389 | 358,052 | R6 | 26,367,768 |
Assuming the acquisition had been completed on August 1, 2017, the Acquiring Fund's unaudited pro forma results of operations for the six months ended April 30, 2018 would have been as follows:
Acquiring Fund | Net Investment income (a) | Net realized and unrealized gain on investments (b) | Net increase in net assets resulting from operations | |||||||||
Jennison International Opportunities Fund | $ | 1,144,264 | $ | 30,997,026 | $ | 32,141,290 |
(a) | Net investment income (loss) as reported in the Statement of Operations (Six months ended April 30, 2018) of the Acquiring Fund, plus net investment income from the Merged Portfolio pre-merger as follows: Target International Equity Portfolio $1,281,359. |
(b) | Net realized and unrealized gain (loss) on investments as reported in the Statement of Operations (Six months ended April 30, 2018) of the Acquiring Fund, plus net realized and unrealized gain (loss) on investments from the Merged Portfolio pre-merger as follows: Target International Equity Portfolio $13,606,098. |
Since both the Merged Portfolio and the Acquiring Fund sold and redeemed shares throughout the period, it is not practicable to provide pro-forma information on a per-share basis.
Since the combined investment portfolios had been managed as a single integrated portfolio since the acquisition was completed, it is also not practicable to separate the amounts of revenue and earnings of the Merged Portfolio that have been included in the Acquiring Fund's Statement of Operations since December 15, 2017 for the Plan.
32 |
Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.10 | $12.36 | $13.09 | $13.06 | $13.51 | $11.30 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | - | (d) | (0.01 | ) | 0.02 | (0.05 | ) | (0.06 | ) | (0.01 | ) | |||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.83 | 4.75 | (0.75 | ) | 0.08 | 0.09 | 2.27 | |||||||||||||||||||||
Total from investment operations | 0.83 | 4.74 | (0.73 | ) | 0.03 | 0.03 | 2.26 | |||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.48 | ) | - | |||||||||||||||||||||
Total dividends and distributions | - | - | - | - | (0.48 | ) | (0.05 | ) | ||||||||||||||||||||
Net asset value, end of period | $17.93 | $17.10 | $12.36 | $13.09 | $13.06 | $13.51 | ||||||||||||||||||||||
Total Return(b): | 4.85% | 38.35% | (5.58)% | 0.23% | 0.20% | 20.04% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $10,060 | $5,303 | $2,918 | $4,167 | $1,833 | $889 | ||||||||||||||||||||||
Average net assets (000) | $7,945 | $3,121 | $3,575 | $3,179 | $1,467 | $356 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.17% | (e) | 1.15% | 1.15% | 1.55% | 1.60% | 1.60% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.53% | (e) | 1.63% | 1.74% | 1.67% | 1.90% | 3.16% | |||||||||||||||||||||
Net investment income (loss) | 0.03% | (e) | (0.07)% | 0.15% | (0.39)% | (0.48)% | (0.08)% | |||||||||||||||||||||
Portfolio turnover rate(g) | 32% | (f) | 69% | 65% | 75% | 61% | 86% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Less than $0.005. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 33 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.43 | $11.96 | $12.77 | $12.82 | $13.37 | $11.27 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.06 | ) | (0.11 | ) | (0.08 | ) | (0.15 | ) | (0.16 | ) | (0.14 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.78 | 4.58 | (0.73 | ) | 0.10 | 0.09 | 2.29 | |||||||||||||||||||||
Total from investment operations | 0.72 | 4.47 | (0.81 | ) | (0.05 | ) | (0.07 | ) | 2.15 | |||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | - | - | - | - | - | (0.05 | ) | |||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.48 | ) | - | |||||||||||||||||||||
Total dividends and distributions | - | - | - | - | (0.48 | ) | (0.05 | ) | ||||||||||||||||||||
Net asset value, end of period | $17.15 | $16.43 | $11.96 | $12.77 | $12.82 | $13.37 | ||||||||||||||||||||||
Total Return(b): | 4.38% | 37.37% | (6.34)% | (0.39)% | (0.57)% | 19.11% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $3,580 | $1,759 | $779 | $1,215 | $465 | $181 | ||||||||||||||||||||||
Average net assets (000) | $2,615 | $1,080 | $895 | $903 | $362 | $38 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 1.91% | (d) | 1.89% | 1.90% | 2.30% | 2.35% | 2.35% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.58% | (d) | 2.32% | 2.44% | 2.37% | 2.60% | 4.09% | |||||||||||||||||||||
Net investment income (loss) | (0.69)% | (d) | (0.80)% | (0.67)% | (1.15)% | (1.21)% | (1.12)% | |||||||||||||||||||||
Portfolio turnover rate(f) | 32% | (e) | 69% | 65% | 75% | 61% | 86% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
34 |
Class R Shares | ||||
November 20, 2017(a) through April 30, 2018 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $17.62 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | (0.02 | ) | ||
Net realized and unrealized gain (loss) on investment transactions | 0.40 | |||
Total from investment operations | 0.38 | |||
Net asset value, end of period | $18.00 | |||
Total Return(c): | 2.16% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $318,397 | |||
Average net assets (000) | $284,133 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 1.44% | (e) | ||
Expenses before waivers and/or expense reimbursement | 1.75% | (e) | ||
Net investment income (loss) | (0.19)% | (e) | ||
Portfolio turnover rate(g) | 32% | (f) |
(a) | Commencement of offering. |
(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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 35 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Per Share Operating Performance(a): | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.29 | $12.50 | $13.20 | $13.13 | $13.55 | $11.32 | ||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.03 | 0.03 | 0.03 | (0.03 | ) | (0.02 | ) | 0.02 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.83 | 4.79 | (0.73 | ) | 0.10 | 0.08 | 2.26 | |||||||||||||||||||||
Total from investment operations | 0.86 | 4.82 | (0.70 | ) | 0.07 | 0.06 | 2.28 | |||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.03 | ) | (0.03 | ) | - | - | - | (0.05 | ) | |||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.48 | ) | - | |||||||||||||||||||||
Total dividends and distributions | (0.03 | ) | (0.03 | ) | - | - | (0.48 | ) | (0.05 | ) | ||||||||||||||||||
Net asset value, end of period | $18.12 | $17.29 | $12.50 | $13.20 | $13.13 | $13.55 | ||||||||||||||||||||||
Total Return(b): | 4.98% | 38.65% | (5.30)% | 0.53% | 0.42% | 20.24% | ||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $70,779 | $28,612 | $18,667 | $46,105 | $46,996 | $16,487 | ||||||||||||||||||||||
Average net assets (000) | $55,596 | $21,756 | $23,274 | $47,187 | $38,835 | $13,938 | ||||||||||||||||||||||
Ratios to average net assets(c): | ||||||||||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.87% | (d) | 0.89% | 0.90% | 1.31% | 1.35% | 1.35% | |||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 0.98% | (d) | 1.34% | 1.41% | 1.40% | 1.54% | 2.73% | |||||||||||||||||||||
Net investment income (loss) | 0.33% | (d) | 0.23% | 0.25% | (0.19)% | (0.13)% | 0.13% | |||||||||||||||||||||
Portfolio turnover rate(f) | 32% | (e) | 69% | 65% | 75% | 61% | 86% |
(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 returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than one full year are not annualized. |
(c) | Does not include expenses of the underlying funds in which the Series invests. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
36 |
Class R6 Shares | ||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | December 23, 2015(a) through October 31, | ||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
Per Share Operating Performance(b): | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.29 | $12.50 | $13.25 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss) | 0.02 | 0.04 | 0.06 | |||||||||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.85 | 4.79 | (0.81 | ) | ||||||||||||||||
Total from investment operations | 0.87 | 4.83 | (0.75 | ) | ||||||||||||||||
Less Dividends: | ||||||||||||||||||||
Dividends from net investment income | (0.04 | ) | (0.04 | ) | - | |||||||||||||||
Net asset value, end of period | $18.12 | $17.29 | $12.50 | |||||||||||||||||
Total Return(c): | 5.02% | 38.75% | (5.66)% | |||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $25,270 | $26,252 | $23,073 | |||||||||||||||||
Average net assets (000) | $26,709 | $24,927 | $23,677 | |||||||||||||||||
Ratios to average net assets(d): | ||||||||||||||||||||
Expenses after waivers and/or expense reimbursement | 0.84% | (e) | 0.84% | 0.84% | (e) | |||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.00% | (e) | 1.30% | 1.43% | (e) | |||||||||||||||
Net investment income (loss) | 0.17% | (e) | 0.28% | 0.60% | (e) | |||||||||||||||
Portfolio turnover rate(g) | 32% | (f) | 69% | 65% |
(a) | Commencement of offering. |
(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 funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison International Opportunities Fund | 37 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Jennison International Opportunities Fund, PGIM 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 |
PGIM JENNISON INTERNATIONAL OPPORTUNITIES FUND
SHARE CLASS | A | C | R | Z | R6* | |||||
NASDAQ | PWJAX | PWJCX | PWJRX | PWJZX | PWJQX | |||||
CUSIP | 743969677 | 743969669 | 743969487 | 743969651 | 743969586 |
*Formerly known as Class Q shares.
MF215E2
PGIM JENNISON GLOBAL INFRASTRUCTURE FUND
(Formerly known as Prudential Jennison Global Infrastructure Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.com/edelivery
Objective: Total return |
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
2 | Visit our website at pgiminvestments.com |
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PGIM Jennison Global Infrastructure Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Jennison Global Infrastructure Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018,
Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors
participate in opportunities across global markets while meeting their toughest investment
challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Jennison Global Infrastructure Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Jennison Global Infrastructure Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | Average Annual Total Returns as of 4/30/18 (with sales charges) | |||||
Six Months* (%) | One Year (%) | Since Inception (%) | ||||
Class A | 1.43 | 1.60 | 6.12 (9/25/13) | |||
Class C | 0.95 | 5.59 | 6.61 (9/25/13) | |||
Class Z | 1.46 | 7.77 | 12.95 (9/25/13) | |||
Class R6** | 1.46 | 7.77 | 7.68 (12/28/16) | |||
S&P Global Infrastructure Index | ||||||
–2.75 | 4.98 | — | ||||
S&P 500 Index | ||||||
3.82 | 13.26 | — | ||||
Lipper Global Infrastructure Funds Average | ||||||
–1.63 | 4.13 | — |
Source: PGIM Investments LLC and Lipper Inc.
*Not annualized
**Formerly known as Class Q shares.
Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Average are measured from the closest month-end to the class’ inception date.
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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 | Class R6* | |||||
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) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% 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) | 0.30% (0.25% currently) | 1.00% | None | None |
*Formerly known as Class Q shares.
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. The average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 6.18% and 11.06% for Class R6 shares.
S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price 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. The average annual total return for the Index measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 12.70% and 15.62% for Class R6 shares.
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 universe 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. The average annual total return for the Lipper Average measured from the month-end closest to the inception date of the Fund’s Class A, Class C, and Class Z shares is 6.25% and 10.30% for Class R6 shares.
PGIM Jennison Global Infrastructure Fund | 7 |
Your Fund’s Performance (continued)
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 of a mutual fund, but not sales charges or taxes.
Presentation of Fund Holdings
Five Largest Holdings expressed as a percentage of net assets as of 4/30/18 (%) | ||||
Eiffage SA, Construction & Engineering | 4.7 | |||
NextEra Energy, Inc., Electric Utilities | 4.5 | |||
NRG Energy, Inc., Independent Power & Renewable Electricity Producers | 3.9 | |||
Italgas SpA, Gas Utilities | 3.5 | |||
Vinci SA, Construction & Engineering | 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 4/30/18 (%) | ||||
Transportation Infrastructure | 19.3 | |||
Oil, Gas & Consumable Fuels | 16.9 | |||
Electric Utilities | �� | 15.2 | ||
Construction & Engineering | 9.1 | |||
Independent Power & Renewable Electricity Producers | 8.7 |
Industry weightings reflect only long-term investments and are subject to change.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the
PGIM Jennison Global Infrastructure Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Jennison Global Infrastructure Fund | Beginning Account Value November 1, 2017 | Ending Account Value April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,014.30 | 1.50 | % | $ | 7.49 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,017.36 | 1.50 | % | $ | 7.50 | ||||||||||
Class C | Actual | $ | 1,000.00 | $ | 1,009.50 | 2.25 | % | $ | 11.21 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,013.64 | 2.25 | % | $ | 11.23 | ||||||||||
Class Z | Actual | $ | 1,000.00 | $ | 1,014.60 | 1.25 | % | $ | 6.24 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.60 | 1.25 | % | $ | 6.26 | ||||||||||
Class R6** | Actual | $ | 1,000.00 | $ | 1,014.60 | 1.25 | % | $ | 6.24 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,018.60 | 1.25 | % | $ | 6.26 |
* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**Formerly known as Class Q shares.
10 | Visit our website at pgiminvestments.com |
Schedule of Investments (unaudited)
as of April 30, 2018
Description | Shares | Value | ||||||
LONG-TERM INVESTMENTS 99.1% | ||||||||
COMMON STOCKS | ||||||||
Argentina 0.9% | ||||||||
Pampa Energia SA, ADR*(a) | 9,624 | $ | 548,953 | |||||
Australia 6.0% | ||||||||
Macquarie Atlas Roads Group | 196,768 | 951,403 | ||||||
Sydney Airport | 144,491 | 773,615 | ||||||
Transurban Group | 208,686 | 1,818,423 | ||||||
|
| |||||||
3,543,441 | ||||||||
Canada 7.4% | ||||||||
Pembina Pipeline Corp. | 49,797 | 1,586,532 | ||||||
TransCanada Corp. | 43,963 | 1,864,049 | ||||||
Westshore Terminals Investment Corp. | 50,493 | 871,864 | ||||||
|
| |||||||
4,322,445 | ||||||||
China 3.3% | ||||||||
ENN Energy Holdings Ltd. | 65,374 | 611,347 | ||||||
Huaneng Renewables Corp. Ltd. (Class H Stock) | 2,995,225 | 1,330,188 | ||||||
|
| |||||||
1,941,535 | ||||||||
France 9.9% | ||||||||
Aeroports de Paris | 4,755 | 1,046,685 | ||||||
Eiffage SA | 22,965 | 2,733,558 | ||||||
Vinci SA | 20,092 | 2,008,869 | ||||||
|
| |||||||
5,789,112 | ||||||||
Germany 1.8% | ||||||||
E.ON SE | 50,288 | 550,641 | ||||||
RWE AG | 22,218 | 531,048 | ||||||
|
| |||||||
1,081,689 | ||||||||
India 2.5% | ||||||||
NTPC Ltd. | 560,388 | 1,442,211 | ||||||
Italy 10.8% | ||||||||
Atlantia SpA | 53,269 | 1,763,194 | ||||||
Enav SpA, 144A | 113,943 | 621,077 | ||||||
Enel SpA | 302,291 | 1,917,647 | ||||||
Italgas SpA | 316,495 | 2,048,073 | ||||||
|
| |||||||
6,349,991 | ||||||||
Malaysia 1.1% | ||||||||
Malaysia Airports Holdings Bhd | 286,407 | 656,155 |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Shares | Value | ||||||
COMMON STOCKS (Continued) | ||||||||
Mexico 2.0% | ||||||||
CFE Capital S de RL de CV, REIT* | 114,049 | $ | 114,646 | |||||
CFE Capital S de RL de CV, REIT, 144A* | 491,373 | 493,947 | ||||||
Infraestructura Energetica Nova SAB de CV | 121,524 | 535,492 | ||||||
|
| |||||||
1,144,085 | ||||||||
Philippines 0.4% | ||||||||
International Container Terminal Services, Inc. | 153,077 | 249,674 | ||||||
Spain 5.4% | ||||||||
Aena SME SA, 144A | 8,458 | 1,743,433 | ||||||
Cellnex Telecom SA, 144A | 31,624 | 848,131 | ||||||
Ferrovial SA | 27,589 | 589,277 | ||||||
|
| |||||||
3,180,841 | ||||||||
Switzerland 1.5% | ||||||||
Flughafen Zurich AG | �� | 4,125 | 861,425 | |||||
United States 46.1% | ||||||||
American Electric Power Co., Inc. | 24,892 | 1,741,942 | ||||||
American Tower Corp., REIT | 9,349 | 1,274,830 | ||||||
American Water Works Co., Inc. | 7,137 | 617,922 | ||||||
Cheniere Energy Partners LP Holdings LLC | 33,670 | 939,393 | ||||||
Cheniere Energy, Inc.* | 20,328 | 1,182,277 | ||||||
CSX Corp. | 29,328 | 1,741,790 | ||||||
Equinix, Inc., REIT | 1,422 | 598,363 | ||||||
Exelon Corp. | 32,408 | 1,285,949 | ||||||
FedEx Corp. | 4,367 | 1,079,522 | ||||||
Genesee & Wyoming, Inc. (Class A Stock)* | 15,231 | 1,084,447 | ||||||
Great Plains Energy, Inc. | 22,749 | 744,575 | ||||||
NextEra Energy, Inc. | 16,180 | 2,652,064 | ||||||
NRG Energy, Inc. | 73,098 | 2,266,038 | ||||||
ONEOK, Inc. | 25,449 | 1,532,539 | ||||||
Public Service Enterprise Group, Inc. | 19,015 | 991,632 | ||||||
SBA Communications Corp., REIT* | 7,133 | 1,142,921 | ||||||
Sempra Energy | 15,489 | 1,731,670 | ||||||
Targa Resources Corp. | 21,534 | 1,011,452 | ||||||
Union Pacific Corp. | 12,094 | 1,616,121 | ||||||
Williams Cos., Inc. (The) | 70,691 | 1,818,879 | ||||||
|
| |||||||
27,054,326 | ||||||||
|
| |||||||
TOTAL LONG-TERM INVESTMENTS | 58,165,883 | |||||||
|
|
See Notes to Financial Statements.
12 |
Description | Shares | Value | ||||||
SHORT-TERM INVESTMENTS 1.4% | ||||||||
AFFILIATED MUTUAL FUNDS | ||||||||
Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund(w) | 286,035 | $ | 286,035 | |||||
Prudential Investment Portfolios 2 - PGIM Institutional Money Market Fund (cost $525,525; includes $524,652 of cash collateral for securities on loan)(b)(w) | 525,508 | 525,507 | ||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | 811,542 | |||||||
|
| |||||||
TOTAL INVESTMENTS 100.5% | 58,977,425 | |||||||
Liabilities in excess of other assets (0.5)% | (297,572 | ) | ||||||
|
| |||||||
NET ASSETS 100.0% | $ | 58,679,853 | ||||||
|
|
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
LIBOR—London Interbank Offered Rate
REIT(s)—Real Estate Investment Trust(s)
* | 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 $536,176; cash collateral of $524,652 (included in liabilities) was received with which the Series purchased highly liquid short-term investments. |
(b) | Represents security purchased with cash collateral received for securities on loan and includes dividend reinvestment. |
(w) | PGIM Investments LLC, the manager of the Series, also serves as manager of the Prudential Investment Portfolios 2—PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund. |
Fair Value Measurements:
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—unadjusted 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.
PGIM Jennison Global Infrastructure Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
The following is a summary of the inputs used as of April 30, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Common Stocks | ||||||||||||
Argentina | $ | 548,953 | $ | — | $ | — | ||||||
Australia | — | 3,543,441 | — | |||||||||
Canada | 4,322,445 | — | — | |||||||||
China | — | 1,941,535 | — | |||||||||
France | — | 5,789,112 | — | |||||||||
Germany | — | 1,081,689 | — | |||||||||
India | — | 1,442,211 | — | |||||||||
Italy | — | 6,349,991 | — | |||||||||
Malaysia | — | 656,155 | — | |||||||||
Mexico | 1,144,085 | — | — | |||||||||
Philippines | — | 249,674 | — | |||||||||
Spain | — | 3,180,841 | — | |||||||||
Switzerland | — | 861,425 | — | |||||||||
United States | 27,054,326 | — | — | |||||||||
Affiliated Mutual Funds | 811,542 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 33,881,351 | $ | 25,096,074 | $ | — | ||||||
|
|
|
|
|
|
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
Industry Classification:
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2018 were as follows:
Transportation Infrastructure | 19.3 | % | ||
Oil, Gas & Consumable Fuels | 16.9 | |||
Electric Utilities | 15.2 | |||
Construction & Engineering | 9.1 | |||
Independent Power & Renewable Electricity Producers | 8.7 | |||
Road & Rail | 7.6 | |||
Multi-Utilities | 6.4 | |||
Gas Utilities | 5.4 | |||
Equity Real Estate Investment Trusts (REITs) | 5.1 | |||
Air Freight & Logistics | 1.8 | % | ||
Diversified Telecommunication Services | 1.4 | |||
Affiliated Mutual Funds (including 0.9% of collateral for securities on loan) | 1.4 | |||
Water Utilities | 1.1 | |||
Banks | 1.1 | |||
|
| |||
100.5 | ||||
Liabilities in excess of other assets | (0.5 | ) | ||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
14 |
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Series invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity contracts 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.
The Series did not hold any derivative instruments as of April 30, 2018, accordingly, no
derivative positions were presented in the Statement of Assets and Liabilities.
The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2018 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Rights(1) | |||
Equity contracts | $ | 7,654 | ||
|
|
(1) | Included in net realized gain (loss) on investment transactions in the Statement of Operations. |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging | Rights(2) | |||
Equity contracts | $ | (1,126 | ) | |
|
|
(2) | Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations. |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
The Series entered into financial instruments/transactions 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 financial instruments/transactions, where the legal right to set-off exists, is presented in the summary below.
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 15 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Offsetting of financial instrument/transaction assets and liabilities:
Description | Gross Market Value of Recognized Assets/(Liabilities) | Collateral Pledged/(Received)(1) | Net Amount | |||||||||
Securities on Loan | $ | 536,176 | $ | (524,652 | ) | $ | 11,524 | |||||
|
|
(1) | Collateral amount disclosed by the Series is limited to the market value of financial instruments/transactions. |
See Notes to Financial Statements.
16 |
This Page Intentionally Left Blank
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets | ||||
Investments at value, including securities on loan of $536,176: | ||||
Unaffiliated investments (cost $47,874,713) | $ | 58,165,883 | ||
Affiliated investments (cost $811,560) | 811,542 | |||
Receivable for investments sold | 160,370 | |||
Dividends and interest receivable | 83,232 | |||
Receivable for Series shares sold | 65,283 | |||
Tax reclaim receivable | 58,262 | |||
Prepaid expenses | 332 | |||
|
| |||
Total assets | 59,344,904 | |||
|
| |||
Liabilities | ||||
Payable to broker for collateral for securities on loan | 524,652 | |||
Payable for Series shares reacquired | 49,371 | |||
Management fee payable | 35,526 | |||
Accrued expenses and other liabilities | 30,270 | |||
Audit fee payable | 13,902 | |||
Distribution fee payable | 6,739 | |||
Foreign capital gains tax liability | 2,338 | |||
Affiliated transfer agent fee payable | 2,253 | |||
|
| |||
Total liabilities | 665,051 | |||
|
| |||
Net Assets | $ | 58,679,853 | ||
|
| |||
Net assets were comprised of: | ||||
Common stock, at par | $ | 44,530 | ||
Paid-in capital in excess of par | 54,124,395 | |||
|
| |||
54,168,925 | ||||
Undistributed net investment income | 193,868 | |||
Accumulated net realized loss on investment and foreign currency transactions | (5,973,389 | ) | ||
Net unrealized appreciation on investments and foreign currencies | 10,290,449 | |||
|
| |||
Net assets, April 30, 2018 | $ | 58,679,853 | ||
|
|
See Notes to Financial Statements.
18 |
Class A | ||||
Net asset value and redemption price per share, | $ | 13.19 | ||
Maximum sales charge (5.50% of offering price) | 0.77 | |||
|
| |||
Maximum offering price to public | $ | 13.96 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | $ | 13.08 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | $ | 13.19 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share, | $ | 13.19 | ||
|
|
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 19 |
Statement of Operations (unaudited)
Six Months Ended April 30, 2018
Net Investment Income (Loss) | �� | |||
Income | ||||
Unaffiliated dividend income (net of foreign withholding taxes of $64,099) | $ | 906,992 | ||
Affiliated dividend income | 8,986 | |||
Interest income | 2,392 | |||
Income from securities lending, net (including affiliated income of $292) | 563 | |||
|
| |||
Total income | 918,933 | |||
|
| |||
Expenses | ||||
Management fee | 331,735 | |||
Distribution fee(a) | 45,552 | |||
Custodian and accounting fees | 35,511 | |||
Registration fees(a) | 31,678 | |||
Transfer agent’s fees and expenses (including affiliated expense of $6,979)(a) | 28,055 | |||
Shareholders’ reports | 19,916 | |||
Audit fee | 13,902 | |||
Legal fees and expenses | 8,970 | |||
Directors’ fees | 6,483 | |||
Miscellaneous | 9,130 | |||
|
| |||
Total expenses | 530,932 | |||
Less: Fee waiver and/or expense reimbursement(a) | (69,622 | ) | ||
Distribution fee waiver(a) | (2,707 | ) | ||
|
| |||
Net expenses | 458,603 | |||
|
| |||
Net investment income (loss) | 460,330 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions (including affiliated of $(57)) | 832,981 | |||
Foreign currency transactions | 10,390 | |||
|
| |||
843,371 | ||||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments (including affiliated of $(18)) (net of change in foreign capital gain taxes $18,254) | (549,808 | ) | ||
Foreign currencies | 2,171 | |||
|
| |||
(547,637 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | 295,734 | |||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | 756,064 | ||
|
|
(a) | Class specific expenses were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 16,245 | 29,307 | — | — | ||||||||||||
Transfer Agency fees and expenses | 9,986 | 4,526 | 13,519 | 24 | ||||||||||||
Registration fees | 8,013 | 7,792 | 8,150 | 7,723 | ||||||||||||
Fee waiver and/or expense reimbursement | (19,650 | ) | (13,215 | ) | (26,101 | ) | (10,656 | ) | ||||||||
Distribution fee waiver | (2,707 | ) | — | — | — |
See Notes to Financial Statements.
20 |
Statements of Changes in Net Assets (unaudited)
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income (loss) | $ | 460,330 | $ | 749,814 | ||||
Net realized gain (loss) on investment and foreign currency transactions | 843,371 | 1,768,892 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (547,637 | ) | 5,851,698 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 756,064 | 8,370,404 | ||||||
|
|
|
| |||||
Dividends and Distributions | ||||||||
Dividends from net investment income | ||||||||
Class A | (38,819 | ) | (118,512 | ) | ||||
Class C | (5,795 | ) | (39,550 | ) | ||||
Class Z | (128,718 | ) | (379,823 | ) | ||||
Class R6 | (93,130 | ) | (159,950 | ) | ||||
|
|
|
| |||||
(266,462 | ) | (697,835 | ) | |||||
|
|
|
| |||||
Tax return of capital distributions | ||||||||
Class A | — | (58,583 | ) | |||||
Class C | — | (19,550 | ) | |||||
Class Z | — | (187,756 | ) | |||||
Class R6 | — | (79,068 | ) | |||||
|
|
|
| |||||
— | (344,957 | ) | ||||||
|
|
|
| |||||
Series share transactions (Net of share conversions) | ||||||||
Net proceeds from shares sold | 8,082,134 | 24,826,946 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 259,578 | 1,001,786 | ||||||
Cost of shares reacquired | (18,751,794 | ) | (23,382,391 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from share transactions | (10,410,082 | ) | 2,446,341 | |||||
|
|
|
| |||||
Total increase (decrease) | (9,920,480 | ) | 9,773,953 | |||||
Net Assets: | ||||||||
Beginning of period | 68,600,333 | 58,826,380 | ||||||
|
|
|
| |||||
End of period(a) | $ | 58,679,853 | $ | 68,600,333 | ||||
|
|
|
| |||||
(a) Includes undistributed/(distributions in excess of) net investment income of: | $ | 193,868 | $ | — | ||||
|
|
|
|
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 21 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven funds: PGIM Jennison Emerging Markets Equity Opportunity Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Jennison Global Infrastructure Fund (the “Series”). Effective June 11, 2018, the Series’ Funds’ name were changed by replacing “Prudential” with “PGIM” in each Series’ Fund’s name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is to achieve total return.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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.
22 |
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.
Foreign equities traded on foreign securities exchanges are generally 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 is 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 for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
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
PGIM Jennison Global Infrastructure Fund | 23 |
Notes to Financial Statements (unaudited) (continued)
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
Foreign Currency Translation: The books and records of the Series are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities — at the current rates of exchange;
(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Series are presented at the foreign exchange rates and market values at the close of the period, the Series does not 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
24 |
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.
Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
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.
Rights: The Series may hold rights acquired either through a direct purchase, included as part of a private placement, or pursuant to corporate actions. Rights entitle the holder to buy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such rights are held as long positions by the Series until exercised, sold or expired. Rights are valued at fair value in accordance with the Board approved fair valuation procedures.
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 an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. 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
PGIM Jennison Global Infrastructure Fund | 25 |
Notes to Financial Statements (unaudited) (continued)
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 in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned 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 and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed on the Statement of Operations as “Income from securities lending, net”.
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 or economic instability or the level of governmental supervision and regulation of foreign securities markets.
Equity and Mortgage Real Estate Investment Trusts (REITs): The Series invests in equity REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from equity REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the equity REITs.
Concentration of Risk for REITs: Real estate securities are subject to similar risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of default or of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. The value of these securities will rise and fall in response to many factors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management of the underlying properties.
In addition, investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are
26 |
dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Series will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Series.
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 specific identification method. Dividend income is recorded on the ex-date. 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 class specific expenses and waivers, which are allocated as noted below) 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.
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to pay dividends from net investment income quarterly. Distributions from net realized capital and currency gains, if any, are declared and paid 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 gain (loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
PGIM Jennison Global Infrastructure Fund | 27 |
Notes to Financial Statements (unaudited) (continued)
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with Jennison Associates LLC (“Jennison”). The subadvisory agreement provides that Jennison will furnish investment advisory services in connection with the management of the Series. In connection therewith, Jennison is obligated to keep certain books and records of the Series. PGIM Investments 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 PGIM Investments is accrued daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets up to $1 billion, 0.98% of the next $2 billion, 0.96% of the next $2 billion, 0.95% of the next $5 billion and 0.94% of the Series’ average daily net assets in excess of $10 billion. The effective management fee rate before any waivers and/or expense reimbursements was 1.00% for the six months ended April 30, 2018.
PGIM Investments has contractually agreed, through February 28, 2019, to limit total annual fund operating expenses after fee waivers and/or reimbursements to 1.50% of average daily net assets for Class A shares, 2.25% of average daily net assets for Class C shares, 1.25% of average daily net assets for Class Z shares, and 1.25% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales. Expenses waived/reimbursed by the Manager in accordance with this agreement may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if
28 |
such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The effective management fee rate, net of waivers and/or expense reimbursements was 0.79% for the six months ended April 30, 2018.
The Fund, on behalf of 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 Z and Class R6 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 “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 and Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.30% 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 0.25% of the average daily net assets of the Class A shares through February 28, 2019.
PIMS has advised the Series that it has received $10,878 in front-end sales charges resulting from sales of Class A shares during the six months ended April 30, 2018. 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, 2018 it received $55 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders.
PGIM Investments, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money
PGIM Jennison Global Infrastructure Fund | 29 |
Notes to Financial Statements (unaudited) (continued)
Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. For the reporting period ended April 30, 2018, PGIM, Inc. was compensated $211 by PGIM Investments for managing the Series’ securities lending cash collateral as subadviser to the Money Market Fund. Earnings from the Core Fund and Money Market Fund are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the six months ended April 30, 2018 were $18,755,154 and $29,345,538, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the six months ended April 30, 2018, is presented as follows:
Affiliated Mutual Funds* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | 135,581 | $ | 19,988,750 | $ | 19,838,296 | $ | — | $ | — | $ | 286,035 | 286,035 | $ | 8,986 | |||||||||||||||||
PGIM Institutional Money Market Fund | — | 1,375,428 | 849,846 | (18 | ) | (57 | ) | 525,507 | 525,508 | 292 | ||||||||||||||||||||||
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$ | 135,581 | $ | 21,364,178 | $ | 20,688,142 | $ | (18 | ) | $ | (57 | ) | $ | 811,542 | $ | 9,278 | |||||||||||||||||
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* | The Series did not have any capital gain distributions during the reporting period. |
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 49,414,582 | ||
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Gross Unrealized Appreciation | 10,658,214 | |||
Gross Unrealized Depreciation | (1,095,371 | ) | ||
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Net Unrealized Appreciation | $ | 9,562,843 | ||
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The book basis may differ from tax basis due to certain tax-related adjustments.
For federal income tax purposes, the Series had a capital loss carryforward at October 31, 2017 of approximately $6,089,000 which can be carried forward for an unlimited period. During the year ended October 31, 2017, the Series utilized approximately $1,785,000 to offset capital gains. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.
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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.
6. Capital and Ownership
The Series offers Class A, Class C, Class Z, and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class R6 shares are not subject to any sales or redemption charge and are available 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.
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 510 million shares authorized for the Series, divided into five classes, designated Class A, Class C, Class Z, Class T and Class R6 common stock, each of which consists of 20 million, 100 million, 150 million, 115 million and 125 million authorized shares, respectively.
The Series currently does not have any Class T shares outstanding.
As of April 30, 2018, Prudential, through its affiliate entities, including affiliated funds (if applicable), owned 532,634 Class Z shares and 1,123,498 Class R6 shares of the Series. At reporting period end, five shareholders of record held 77% of the Series’ outstanding shares on behalf of multiple beneficial owners, of which 37% were held by an affiliate of Prudential.
PGIM Jennison Global Infrastructure Fund | 31 |
Notes to Financial Statements (unaudited) (continued)
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 114,374 | $ | 1,534,731 | |||||
Shares issued in reinvestment of dividends and distributions | 2,915 | 38,453 | ||||||
Shares reacquired | (116,061 | ) | (1,525,510 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 1,228 | 47,674 | ||||||
Shares issued upon conversion from other share class(es) | 758 | 10,337 | ||||||
Shares reacquired upon conversion into other share class(es) | (114,962 | ) | (1,557,565 | ) | ||||
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Net increase (decrease) in shares outstanding | (112,976 | ) | $ | (1,499,554 | ) | |||
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Year ended October 31, 2017: | ||||||||
Shares sold | 279,822 | $ | 3,391,012 | |||||
Shares issued in reinvestment of dividends and distributions | 13,824 | 168,066 | ||||||
Shares reacquired | (184,608 | ) | (2,241,919 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 109,038 | 1,317,159 | ||||||
Shares issued upon conversion from other share class(es) | 9,426 | 116,828 | ||||||
Shares reacquired upon conversion into other share class(es) | (280,568 | ) | (3,367,052 | ) | ||||
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Net increase (decrease) in shares outstanding | (162,104 | ) | $ | (1,933,065 | ) | |||
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Class C | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 23,646 | $ | 307,627 | |||||
Shares issued in reinvestment of dividends and distributions | 388 | 5,115 | ||||||
Shares reacquired | (59,455 | ) | (778,183 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (35,421 | ) | (465,441 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (1,973 | ) | (25,470 | ) | ||||
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Net increase (decrease) in shares outstanding | (37,394 | ) | $ | (490,911 | ) | |||
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Year ended October 31, 2017: | ||||||||
Shares sold | 143,195 | $ | 1,702,514 | |||||
Shares issued in reinvestment of dividends and distributions | 4,347 | 52,151 | ||||||
Shares reacquired | (149,323 | ) | (1,820,597 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (1,781 | ) | (65,932 | ) | ||||
Shares reacquired upon conversion into other share class(es) | (24,441 | ) | (298,815 | ) | ||||
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Net increase (decrease) in shares outstanding | (26,222 | ) | $ | (364,747 | ) | |||
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Class Z | Shares | Amount | ||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 240,802 | $ | 3,139,965 | |||||
Shares issued in reinvestment of dividends and distributions | 9,330 | 122,879 | ||||||
Shares reacquired | (460,731 | ) | (6,002,101 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (210,599 | ) | (2,739,257 | ) | ||||
Shares issued upon conversion from other share class(es) | 116,833 | 1,583,035 | ||||||
Shares reacquired upon conversion into other share class(es) | (758 | ) | (10,337 | ) | ||||
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Net increase (decrease) in shares outstanding | (94,524 | ) | $ | (1,166,559 | ) | |||
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Year ended October 31, 2017: | ||||||||
Shares sold | 758,227 | $ | 9,087,558 | |||||
Shares issued in reinvestment of dividends and distributions | 45,023 | 542,551 | ||||||
Shares reacquired | (963,920 | ) | (11,483,699 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | (160,670 | ) | (1,853,590 | ) | ||||
Shares issued upon conversion from other share class(es) | 296,886 | 3,566,596 | ||||||
Shares reacquired upon conversion into other share class(es) | (1,443,112 | ) | (16,437,911 | ) | ||||
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Net increase (decrease) in shares outstanding | (1,306,896 | ) | $ | (14,724,905 | ) | |||
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Class R6 | ||||||||
Six months ended April 30, 2018: | ||||||||
Shares sold | 234,689 | $ | 3,099,811 | |||||
Shares issued in reinvestment of dividends and distributions | 7,057 | 93,131 | ||||||
Shares reacquired | (801,753 | ) | (10,446,000 | ) | ||||
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Net increase (decrease) in shares outstanding | (560,007 | ) | $ | (7,253,058 | ) | |||
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Period ended October 31, 2017*: | ||||||||
Shares sold | 851,072 | $ | 10,645,862 | |||||
Shares issued in reinvestment of dividends and distributions | 18,790 | 239,018 | ||||||
Shares reacquired | (628,004 | ) | (7,836,176 | ) | ||||
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Net increase (decrease) in shares outstanding before conversion | 241,858 | 3,048,704 | ||||||
Shares issued upon conversion from other share class(es) | 1,441,647 | 16,420,354 | ||||||
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Net increase (decrease) in shares outstanding | 1,683,505 | $ | 19,469,058 | |||||
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* | Commencement of operations was December 28, 2016. |
7. Borrowings
The Fund, on behalf of 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 5, 2017 through October 4, 2018. The Funds pay an annualized commitment fee of 0.15% of the unused portion of the SCA. The Series’ portion of the commitment fee for the unused amount, allocated based upon a method approved by the Board, is accrued daily and paid quarterly. The interest on borrowings under the SCAs is paid monthly and at a per annum interest rate based upon a contractual spread plus the higher of (1) the effective federal funds rate, (2) the 1-month LIBOR rate or (3) zero percent.
PGIM Jennison Global Infrastructure Fund | 33 |
Notes to Financial Statements (unaudited) (continued)
Other affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Funds in the SCA equitably.
The Series utilized the SCA during the reporting period ended April 30, 2018. The average daily balance for the 9 days that the Series had loans outstanding during the period was $1,430,556 borrowed at a weighted average interest rate of 3.05%. The maximum loan balance outstanding during the period was $3,353,000. At April 30, 2018, the Series did not have an outstanding loan balance.
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Financial Highlights (unaudited)
Class A Shares | ||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.05 | $11.61 | $11.48 | $12.62 | $10.42 | $10.00 | ||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.09 | 0.14 | 0.09 | 0.06 | 0.09 | - | (g) | |||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.10 | 1.49 | 0.21 | (1.12 | ) | 2.26 | 0.42 | |||||||||||||||||||||||||
Total from investment operations | 0.19 | 1.63 | 0.30 | (1.06 | ) | 2.35 | 0.42 | |||||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.05 | ) | (0.13 | ) | (0.08 | ) | (0.05 | ) | (0.14 | ) | - | |||||||||||||||||||||
Tax return of capital distributions | - | (0.06 | ) | (0.09 | ) | (0.03 | ) | - | - | |||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.01 | ) | - | |||||||||||||||||||||||||
Total dividends and distributions | (0.05 | ) | (0.19 | ) | (0.17 | ) | (0.08 | ) | (0.15 | ) | - | |||||||||||||||||||||
Net Asset Value, end of period | $13.19 | $13.05 | $11.61 | $11.48 | $12.62 | $10.42 | ||||||||||||||||||||||||||
Total Return(a): | 1.43% | 14.15% | 2.62% | (8.46)% | 22.67% | 4.20% | ||||||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||
Net assets, end of period (000) | $10,318 | $11,689 | $12,277 | $22,353 | $15,521 | $21 | ||||||||||||||||||||||||||
Average net assets (000) | $10,919 | $11,433 | $16,694 | $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% | 1.50% | 1.50% | (e) | ||||||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.92% | (e) | 1.81% | 1.79% | 1.78% | 1.95% | 25.87% | (e) | ||||||||||||||||||||||||
Net investment income (loss) | 1.30% | (e) | 1.10% | 0.76% | 0.52% | 0.73% | 0.28% | (e) | ||||||||||||||||||||||||
Portfolio turnover rate(h) | 29% | (f) | 80% | 82% | 94% | 49% | 10% | (f) |
(a) | Total return does not consider the effect 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 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 funds in which the Series invests. |
(e) | Annualized. |
(f) | Not Annualized. |
(g) | Less than $0.005. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 35 |
Financial Highlights (unaudited) (continued)
Class C Shares | ||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $12.97 | $11.55 | $11.42 | $12.58 | $10.41 | $10.00 | ||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.04 | 0.04 | - | (g) | (0.03 | ) | 0.01 | 0.01 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.08 | 1.50 | 0.21 | (1.13 | ) | 2.25 | 0.40 | |||||||||||||||||||||||||
Total from investment operations | 0.12 | 1.54 | 0.21 | (1.16 | ) | 2.26 | 0.41 | |||||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.01 | ) | (0.08 | ) | (0.04 | ) | - | (g) | (0.08 | ) | - | |||||||||||||||||||||
Tax return of capital distributions | - | (0.04 | ) | (0.04 | ) | - | (g) | - | - | |||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.01 | ) | - | |||||||||||||||||||||||||
Total dividends and distributions | (0.01 | ) | (0.12 | ) | (0.08 | ) | - | (0.09 | ) | - | ||||||||||||||||||||||
Net Asset Value, end of period | $13.08 | $12.97 | $11.55 | $11.42 | $12.58 | $10.41 | ||||||||||||||||||||||||||
Total Return(a): | 0.95% | 13.39% | 1.88% | (9.21)% | 21.76% | 4.10% | ||||||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||
Net assets, end of period (000) | $5,666 | $6,101 | $5,738 | $6,775 | $3,835 | $40 | ||||||||||||||||||||||||||
Average net assets (000) | $5,910 | $6,111 | $5,783 | $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% | 2.25% | 2.25% | (e) | ||||||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 2.70% | (e) | 2.51% | 2.49% | 2.48% | 2.70% | 38.05% | (e) | ||||||||||||||||||||||||
Net investment income (loss) | 0.55% | (e) | 0.34% | (0.02)% | (0.22)% | 0.12% | 0.52% | (e) | ||||||||||||||||||||||||
Portfolio turnover rate(h) | 29% | (f) | 80% | 82% | 94% | 49% | 10% | (f) |
(a) | Total return does not consider the effect 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 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 funds in which the Series invests. |
(e) | Annualized. |
(f) | Not Annualized. |
(g) | Less than $0.005. |
(h) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
36 |
Class Z Shares | ||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | September 25, 2013(b) through October 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Per Share Operating Performance(c): | ||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.06 | $11.61 | $11.47 | $12.62 | $10.42 | $10.00 | ||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.10 | 0.18 | 0.11 | 0.09 | 0.22 | 0.01 | ||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.09 | 1.49 | 0.23 | (1.13 | ) | 2.15 | 0.41 | |||||||||||||||||||||||||
Total from investment operations | 0.19 | 1.67 | 0.34 | (1.04 | ) | 2.37 | 0.42 | |||||||||||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.14 | ) | (0.09 | ) | (0.08 | ) | (0.16 | ) | - | |||||||||||||||||||||
Tax return of capital distributions | - | (0.08 | ) | (0.11 | ) | (0.03 | ) | - | - | |||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.01 | ) | - | |||||||||||||||||||||||||
Total dividends and distributions | (0.06 | ) | (0.22 | ) | (0.20 | ) | (0.11 | ) | (0.17 | ) | - | |||||||||||||||||||||
Net Asset Value, end of period | $13.19 | $13.06 | $11.61 | $11.47 | $12.62 | $10.42 | ||||||||||||||||||||||||||
Total Return(a): | 1.46% | 14.51% | 2.96% | (8.28)% | 22.91% | 4.20% | ||||||||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||
Net assets, end of period (000) | $27,881 | $28,831 | $40,811 | $47,305 | $31,788 | $5,247 | ||||||||||||||||||||||||||
Average net assets (000) | $28,578 | $29,597 | $40,236 | $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% | 1.25% | 1.25% | (e) | ||||||||||||||||||||||||
Expenses before waivers and/or expense reimbursement | 1.44% | (e) | 1.51% | 1.49% | 1.48% | 2.08% | 22.65% | (e) | ||||||||||||||||||||||||
Net investment income (loss) | 1.57% | (e) | 1.49% | 0.94% | 0.75% | 1.79% | 0.56% | (e) | ||||||||||||||||||||||||
Portfolio turnover rate(g) | 29% | (f) | 80% | 82% | 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 funds in which the Series invests. |
(e) | Annualized. |
(f) | Not Annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Jennison Global Infrastructure Fund | 37 |
Financial Highlights (unaudited) (continued)
Class R6 Shares | ||||||||||||
Six Months Ended April 30, 2018 | December 28, October 31, 2017 | |||||||||||
Per Share Operating Performance(b): | ||||||||||||
Net Asset Value, Beginning of Period | $13.06 | $11.39 | ||||||||||
Income (loss) from investment operations: | ||||||||||||
Net investment income (loss) | 0.09 | 0.11 | ||||||||||
Net realized and unrealized gain (loss) on investment transactions | 0.10 | 1.71 | ||||||||||
Total from investment operations | 0.19 | 1.82 | ||||||||||
Less Dividends and Distributions: | ||||||||||||
Dividends from net investment Income | (0.06 | ) | (0.10 | ) | ||||||||
Tax return of capital distributions | - | (0.05 | ) | |||||||||
Total dividends and distributions | (0.06 | ) | (0.15 | ) | ||||||||
Net asset value, end of period | $13.19 | $13.06 | ||||||||||
Total Return(c): | 1.46% | 16.02% | ||||||||||
Ratios/Supplemental Data: | ||||||||||||
Net assets, end of period (000) | $14,815 | $21,979 | ||||||||||
Average net assets (000) | $21,489 | $19,274 | ||||||||||
Ratios to average net assets(d): | ||||||||||||
Expenses after waivers and/or expense reimbursement | 1.25% | (e) | 1.25% | (e) | ||||||||
Expenses before waivers and/or expense reimbursement | 1.35% | (e) | 1.40% | (e) | ||||||||
Net investment income (loss) | 1.42% | (e) | 1.00% | (e) | ||||||||
Portfolio turnover rate(g) | 29% | (f) | 80% | (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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
38 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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. 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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | Jennison Associates LLC | 466 Lexington Avenue New York, NY 10017 | ||
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DISTRIBUTOR | Prudential Investment Management Services LLC | 655 Broad Street Newark, NJ 07102 | ||
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CUSTODIAN | The Bank of New York Mellon | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Jennison Global Infrastructure Fund, PGIM 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 |
PGIM JENNISON GLOBAL INFRASTRUCTURE FUND
SHARE CLASS | A | C | Z | R6* | ||||
NASDAQ | PGJAX | PGJCX | PGJZX | PGJQX | ||||
CUSIP | 743969792 | 743969784 | 743969776 | 743969560 |
*Formerly | known as Class Q shares. |
MF217E2
PGIM EMERGING MARKETS DEBT HARD
CURRENCY FUND
(Formerly known as Prudential Emerging Markets Debt Hard Currency Fund)
SEMIANNUAL REPORT
APRIL 30, 2018
To enroll in e-delivery, go to pgiminvestments.com/edelivery
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 information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.
The accompanying financial statements as of April 30, 2018 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. © 2018 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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5 | ||||
6 | ||||
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Holdings and Financial Statements | 11 |
PGIM Emerging Markets Debt Hard Currency Fund | 3 |
This Page Intentionally Left Blank
Dear Shareholder:
We hope you find the semiannual report for PGIM Emerging Markets Debt Hard Currency Fund informative and useful. The report covers performance for the six-month period ended April 30, 2018.
We have important information to share with you. Effective June 11, 2018, Prudential Mutual Funds were renamed PGIM Funds. This renaming is part of our ongoing effort to further build our reputation and establish our global brand, which began when our firm adopted PGIM Investments as its name in April 2017. Please note that only the Fund’s name has changed. Your Fund’s management and operation, along with its symbols, remained the same.*
Regarding your investments with PGIM, 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. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.
Thank you for choosing our family of funds.
Sincerely,
Stuart S. Parker, President
PGIM Emerging Markets Debt Hard Currency Fund
June 15, 2018
*The Prudential Day One Funds did not change their names.
PGIM Emerging Markets Debt Hard Currency Fund | 5 |
Your Fund’s Performance (unaudited)
Performance data quoted represents 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.pgiminvestments.com or by calling (800) 225-1852.
Total Returns as of 4/30/18 (without sales charges) | ||
Since Inception* (%) | ||
Class A | –3.09 (12/12/17) | |
Class C | –3.47 (12/12/17) | |
Class Z | –3.00 (12/12/17) | |
Class R6** | –2.98 (12/12/17) | |
JP Morgan EMBI Global Diversified Index | ||
–2.46 | ||
Lipper Emerging Market Debt Hard Currency Debt Funds Average | ||
–1.16 |
Source: PGIM Investments LLC and Lipper Inc.
*Not annualized
**Formerly known as Class Q shares.
Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Indexes and the Lipper Averages are measured from closest month-end to the fund’s inception date.
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 | Class R6* | |||||
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) | 1.00% on sales of $1 million or more made within 12 months of purchase | 1.00% 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) | 0.25% | 1.00% | None | None |
*Formerly known as Class Q shares.
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Benchmark Definitions
JP Morgan EMBI Global Diversified Index—The JP Morgan EMBI Global Diversified Index is an unmanaged, comprehensive emerging markets index that tracks hard currency bonds issued by emerging markets issuers.
Lipper Emerging Market Hard Currency Debt Funds Average—The Lipper Emerging Market Hard Currency Debt Funds Average (Lipper Average) is based upon the return of all mutual funds in the Lipper Emerging Market Hard Currency Debt Funds universe.
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 of a mutual fund, but not sales charges or taxes.
Credit Quality expressed as a percentage of total investments as of 4/30/18 (%) | ||||
A | 6.7 | |||
BBB | 23.8 | |||
BB | 24.2 | |||
B | 43.0 | |||
CCC | 0.3 | |||
C | 1.7 | |||
Cash/Cash Equivalents | 0.3 | |||
Total | 100.0 |
Source: PGIM Fixed Income
Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investor Service, Inc. (Moody’s), S&P Global Ratings (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.
Distributions and Yields as of 4/30/18 | ||||||
Total Distributions Paid for Six Months ($) | SEC 30-Day Subsidized Yield* (%) | SEC 30-Day Unsubsidized Yield** (%) | ||||
Class A | 0.18 | 4.60 | –133.29 | |||
Class C | 0.16 | 4.05 | –137.55 | |||
Class Z | 0.19 | 5.10 | –8.97 | |||
Class R6 | 0.20 | 5.16 | 4.22 |
PGIM Emerging Markets Debt Hard Currency Fund | 7 |
Your Fund’s Performance (continued)
*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.
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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 held through the six-month period ended April 30, 2018. 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 PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period
PGIM Emerging Markets Debt Hard Currency Fund | 9 |
Fees and Expenses (continued)
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.
PGIM Emerging Markets Debt Hard Currency Fund | Beginning Account Value November 1, 2017 | Ending Account April 30, 2018 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period* | ||||||||||||||
Class A | Actual** | $ | 1,000.00 | $ | 969.10 | 1.05 | % | $ | 3.97 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,019.59 | 1.05 | % | $ | 5.26 | ||||||||||
Class C | Actual** | $ | 1,000.00 | $ | 965.30 | 1.80 | % | $ | 6.78 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,015.87 | 1.80 | % | $ | 9.00 | ||||||||||
Class Z | Actual** | $ | 1,000.00 | $ | 970.00 | 0.80 | % | $ | 3.02 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,020.83 | 0.80 | % | $ | 4.01 | ||||||||||
Class R6*** | Actual** | $ | 1,000.00 | $ | 970.20 | 0.74 | % | $ | 2.80 | |||||||||
Hypothetical | $ | 1,000.00 | $ | 1,021.12 | 0.74 | % | $ | 3.71 |
* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended April 30, 2018, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2018 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying funds in which the Fund may invest.
**“Actual” expenses are calculated using the 140 days in the period ended April 30, 2018 due to the Fund’s inception date of December 12, 2017.
***Formerly known as Class Q shares.
10 | Visit our website at pgiminvestments.com |
Schedule of Investments (unaudited)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
LONG-TERM INVESTMENTS 97.8% |
| |||||||||||||||
CORPORATE BONDS 18.0% |
| |||||||||||||||
Argentina 0.7% | �� | |||||||||||||||
YPF SA, Sr. Unsec’d. Notes | 8.500 | % | 07/28/25 | 155 | $ | 169,260 | ||||||||||
Brazil 1.5% | ||||||||||||||||
Petrobras Global Finance BV, | ||||||||||||||||
Gtd. Notes | 5.299 | 01/27/25 | 125 | 122,938 | ||||||||||||
Gtd. Notes | 5.999 | 01/27/28 | 85 | 82,862 | ||||||||||||
Gtd. Notes | 6.250 | 03/17/24 | 15 | 15,780 | ||||||||||||
Gtd. Notes | 6.750 | 01/27/41 | 60 | 56,940 | ||||||||||||
Gtd. Notes | 7.375 | 01/17/27 | 10 | 10,725 | ||||||||||||
Gtd. Notes | 8.750 | 05/23/26 | 65 | 76,131 | ||||||||||||
|
| |||||||||||||||
365,376 | ||||||||||||||||
Chile 0.8% | ||||||||||||||||
Corp Nacional del Cobre de Chile, Sr. Unsec’d. Notes, 144A | 4.875 | 11/04/44 | 200 | 206,930 | ||||||||||||
China 1.6% | ||||||||||||||||
CNAC HK Finbridge Co. Ltd., Gtd. Notes | 4.875 | 03/14/25 | 240 | 237,939 | ||||||||||||
Sinochem Overseas Capital Co. Ltd., Gtd. Notes | 6.300 | 11/12/40 | 130 | 158,664 | ||||||||||||
|
| |||||||||||||||
396,603 | ||||||||||||||||
India 0.8% | ||||||||||||||||
HPCL-Mittal Energy Ltd., Sr. Unsec’d. Notes | 5.250 | 04/28/27 | 200 | 192,154 | ||||||||||||
Indonesia 1.0% | ||||||||||||||||
Saka Energi Indonesia PT, Sr. Unsec’d. Notes | 4.450 | 05/05/24 | 250 | 241,799 | ||||||||||||
Malaysia 0.8% | ||||||||||||||||
Petronas Capital Ltd., Gtd. Notes | 3.500 | 03/18/25 | 200 | 194,347 | ||||||||||||
Mexico 4.7% | ||||||||||||||||
Mexichem SAB de CV, Gtd. Notes | 5.500 | 01/15/48 | 200 | 182,250 | ||||||||||||
Petroleos Mexicanos, | ||||||||||||||||
Gtd. Notes | 4.875 | 01/18/24 | 140 | 138,880 | ||||||||||||
Gtd. Notes | 6.500 | 03/13/27 | 275 | 284,793 | ||||||||||||
Gtd. Notes | 6.500 | 06/02/41 | 410 | 392,575 | ||||||||||||
Gtd. Notes | 6.875 | 08/04/26 | 140 | 149,940 | ||||||||||||
|
| |||||||||||||||
1,148,438 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 11 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
CORPORATE BONDS (Continued) |
| |||||||||||||||
Russia 1.5% | ||||||||||||||||
Gazprom OAO Via Gaz Capital SA, Sr. Unsec’d. Notes, EMTN | 8.625 | % | 04/28/34 | 120 | $ | 152,165 | ||||||||||
Vnesheconombank Via VEB Finance PLC, Sr. Unsec’d. Notes | 5.942 | 11/21/23 | 205 | 212,911 | ||||||||||||
|
| |||||||||||||||
365,076 | ||||||||||||||||
South Africa 1.9% | ||||||||||||||||
Eskom Holdings SOC Ltd., | ||||||||||||||||
Sr. Unsec’d. Notes | 5.750 | 01/26/21 | 200 | 199,428 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.750 | 08/06/23 | 250 | 253,125 | ||||||||||||
|
| |||||||||||||||
452,553 | ||||||||||||||||
Trinidad and Tobago 0.6% | ||||||||||||||||
Petroleum Co. of Trinidad & Tobago Ltd., Sr. Unsec’d. Notes | 6.000 | 05/08/22 | 137 | 137,012 | ||||||||||||
Tunisia 0.7% | ||||||||||||||||
Banque Centrale de Tunisie International Bond, Sr. Unsec’d. Notes | 5.625 | 02/17/24 | EUR | 140 | 171,879 | |||||||||||
Venezuela 1.4% | ||||||||||||||||
Petroleos de Venezuela SA, | ||||||||||||||||
Gtd. Notes(d) | 5.375 | 04/12/27 | 205 | 53,607 | ||||||||||||
Gtd. Notes(d) | 6.000 | 05/16/24 | 45 | 11,363 | ||||||||||||
Gtd. Notes(d) | 6.000 | 11/15/26 | 65 | 16,309 | ||||||||||||
Sr. Sec’d. Notes | 8.500 | 10/27/20 | 308 | 266,295 | ||||||||||||
|
| |||||||||||||||
347,574 | ||||||||||||||||
|
| |||||||||||||||
TOTAL CORPORATE BONDS | 4,389,001 | |||||||||||||||
|
| |||||||||||||||
SOVEREIGN BONDS 79.8% | ||||||||||||||||
Angola 0.9% | ||||||||||||||||
Angolan Government International Bond, Sr. Unsec’d. Notes | 9.500 | 11/12/25 | 200 | 224,540 | ||||||||||||
Argentina 6.2% | ||||||||||||||||
Provincia de Buenos Airesgentina, Sr. Unsec’d. Notes, 144A | 9.125 | 03/16/24 | 245 | 271,950 |
See Notes to Financial Statements.
12 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Argentina (cont’d.) | ||||||||||||||||
Argentine Republic Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 2.500 | %(cc) | 12/31/38 | 110 | $ | 71,775 | ||||||||||
Sr. Unsec’d. Notes | 8.280 | 12/31/33 | 210 | 225,553 | ||||||||||||
Sr. Unsec’d. Notes | 6.875 | 04/22/21 | 150 | 157,425 | ||||||||||||
Sr. Unsec’d. Notes | 7.500 | 04/22/26 | 240 | 251,520 | ||||||||||||
Sr. Unsec’d. Notes | 4.625 | 01/11/23 | 40 | 38,220 | ||||||||||||
Sr. Unsec’d. Notes | 6.875 | 01/11/48 | 30 | 26,655 | ||||||||||||
Sr. Unsec’d. Notes | 2.260 | (cc) | 12/31/38 | EUR | 70 | 57,921 | ||||||||||
Sr. Unsec’d. Notes | 8.280 | 12/31/33 | 42 | 44,059 | ||||||||||||
Sr. Unsec’d. Notes | 7.820 | 12/31/33 | EUR | 179 | 236,598 | |||||||||||
Provincia de Buenos Airesgentina, Sr. Unsec’d. Notes | 5.375 | 01/20/23 | EUR | 100 | 124,983 | |||||||||||
|
| |||||||||||||||
1,506,659 | ||||||||||||||||
Armenia 0.9% | ||||||||||||||||
Republic of Armenia International Bond, Sr. Unsec’d. Notes | 7.150 | 03/26/25 | 200 | 214,650 | ||||||||||||
Azerbaijan 1.1% | ||||||||||||||||
Republic of Azerbaijan International Bond, Sr. Unsec’d. Notes | 4.750 | 03/18/24 | 275 | 273,665 | ||||||||||||
Bahrain 0.8% | ||||||||||||||||
Bahrain Government International Bond, Sr. Unsec’d. Notes | 6.750 | 09/20/29 | 200 | 184,320 | ||||||||||||
Belarus 0.9% | ||||||||||||||||
Republic of Belarus International Bond, Sr. Unsec’d. Notes | 6.875 | 02/28/23 | 200 | 209,304 | ||||||||||||
Brazil 4.0% | ||||||||||||||||
Brazilian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.250 | 01/20/34 | 205 | 253,997 | ||||||||||||
Sr. Unsec’d. Notes | 7.125 | 01/20/37 | 120 | 136,800 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 01/07/41 | 120 | 114,061 | ||||||||||||
Brazil Minas SPE via State of Minas Gerais, Gov’t. Gtd. Notes | 5.333 | 02/15/28 | 485 | 482,575 | ||||||||||||
|
| |||||||||||||||
987,433 | ||||||||||||||||
Colombia 2.0% | ||||||||||||||||
Colombia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.375 | 09/18/37 | 275 | 348,562 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 01/18/41 | 135 | 152,550 | ||||||||||||
|
| |||||||||||||||
501,112 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 13 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Congo 0.2% | ||||||||||||||||
Congolese International Bond, Sr. Unsec’d. Notes | 6.000 | %(cc) | 06/30/29 | 69 | $ | 59,555 | ||||||||||
Costa Rica 1.6% | ||||||||||||||||
Costa Rica Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.158 | 03/12/45 | 200 | 202,532 | ||||||||||||
Sr. Unsec’d. Notes | 4.375 | 04/30/25 | 200 | 184,856 | ||||||||||||
|
| |||||||||||||||
387,388 | ||||||||||||||||
Cote d’lvoire 1.3% | ||||||||||||||||
Ivory Coast Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.375 | 03/03/28 | 200 | 201,290 | ||||||||||||
Sr. Unsec’d. Notes | 5.125 | 06/15/25 | EUR | 100 | 127,562 | |||||||||||
|
| |||||||||||||||
328,852 | ||||||||||||||||
Dominican Republic 2.8% | ||||||||||||||||
Dominican Republic International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.450 | 04/30/44 | 240 | 262,800 | ||||||||||||
Sr. Unsec’d. Notes | 7.500 | 05/06/21 | 110 | 116,215 | ||||||||||||
Sr. Unsec’d. Notes | 5.875 | 04/18/24 | 305 | 314,912 | ||||||||||||
|
| |||||||||||||||
693,927 | ||||||||||||||||
Ecuador 2.9% | ||||||||||||||||
Ecuador Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.875 | 10/23/27 | 300 | 282,750 | ||||||||||||
Sr. Unsec’d. Notes | 10.500 | 03/24/20 | 200 | 206,000 | ||||||||||||
Sr. Unsec’d. Notes | 10.750 | 03/28/22 | 200 | 211,000 | ||||||||||||
|
| |||||||||||||||
699,750 | ||||||||||||||||
Egypt 2.4% | ||||||||||||||||
Egypt Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.500 | 01/31/47 | 250 | 267,839 | ||||||||||||
Sr. Unsec’d. Notes | 6.125 | 01/31/22 | 300 | 307,860 | ||||||||||||
|
| |||||||||||||||
575,699 | ||||||||||||||||
El Salvador 2.2% | ||||||||||||||||
El Salvador Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.375 | 01/18/27 | 75 | 74,062 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 01/24/23 | 250 | 269,075 | ||||||||||||
Sr. Unsec’d. Notes | 8.250 | 04/10/32 | 45 | 49,591 | ||||||||||||
Sr. Unsec’d. Notes | 7.375 | 12/01/19 | 135 | 139,270 | ||||||||||||
|
| |||||||||||||||
531,998 |
See Notes to Financial Statements.
14 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Gabon 0.8% | ||||||||||||||||
Gabon Government International Bond, Bonds | 6.375 | % | 12/12/24 | 200 | $ | 194,918 | ||||||||||
Ghana 1.1% | ||||||||||||||||
Ghana Government International Bond, Bank Gtd. Notes | 10.750 | 10/14/30 | 200 | 258,540 | ||||||||||||
Greece 0.9% | ||||||||||||||||
Hellenic Republic Government Bond, Bonds | 3.000 | (cc) | 02/24/37 | EUR | 200 | 215,225 | ||||||||||
Honduras 0.9% | ||||||||||||||||
Honduras Government International Bond, Sr. Unsec’d. Notes | 7.500 | 03/15/24 | 200 | 216,920 | ||||||||||||
Hungary 0.9% | ||||||||||||||||
Hungary Government International Bond, Sr. Unsec’d. Notes | 7.625 | 03/29/41 | 154 | 216,737 | ||||||||||||
Indonesia 3.3% | ||||||||||||||||
Indonesia Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.750 | 01/15/44 | 300 | 372,109 | ||||||||||||
Sr. Unsec’d. Notes | 8.500 | 10/12/35 | 150 | 210,114 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 01/17/38 | 160 | 213,038 | ||||||||||||
|
| |||||||||||||||
795,261 | ||||||||||||||||
Iraq 1.8% | ||||||||||||||||
Iraq International Bond, | ||||||||||||||||
Unsec’d. Notes | 5.800 | 01/15/28 | 250 | 235,805 | ||||||||||||
Sr. Unsec’d. Notes | 6.752 | 03/09/23 | 200 | 199,854 | ||||||||||||
|
| |||||||||||||||
435,659 | ||||||||||||||||
Jamaica 1.1% | ||||||||||||||||
Jamaica Government International Bond, Sr. Unsec’d. Notes | 7.625 | 07/09/25 | 225 | 259,875 | ||||||||||||
Jordan 0.8% | ||||||||||||||||
Jordan Government International Bond, Sr. Unsec’d. Notes | 7.375 | 10/10/47 | 200 | 194,764 | ||||||||||||
Kazakhstan 1.0% | ||||||||||||||||
Kazakhstan Government International Bond, Sr. Unsec’d. Notes, EMTN | 6.500 | 07/21/45 | 200 | 238,340 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 15 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Kenya 1.7% | ||||||||||||||||
Kenya Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 7.250 | % | 02/28/28 | 200 | $ | 206,435 | ||||||||||
Sr. Unsec’d. Notes | 6.875 | 06/24/24 | 200 | 207,224 | ||||||||||||
|
| |||||||||||||||
413,659 | ||||||||||||||||
Lebanon 2.7% | ||||||||||||||||
Lebanon Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.400 | 05/26/23 | 150 | 141,751 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 8.250 | 04/12/21 | 245 | 250,524 | ||||||||||||
Sr. Unsec’d. Notes, EMTN | 6.100 | 10/04/22 | 100 | 95,137 | ||||||||||||
Sr. Unsec’d. Notes | 6.650 | 04/22/24 | 75 | 71,017 | ||||||||||||
Sr. Unsec’d. Notes | 6.000 | 01/27/23 | 102 | 96,125 | ||||||||||||
|
| |||||||||||||||
654,554 | ||||||||||||||||
Malaysia 0.5% | ||||||||||||||||
Malaysia Government Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.378 | 11/29/19 | MYR | 305 | 78,646 | |||||||||||
Sr. Unsec’d. Notes | 3.580 | 09/28/18 | MYR | 200 | 51,004 | |||||||||||
|
| |||||||||||||||
129,650 | ||||||||||||||||
Mexico 0.8% | ||||||||||||||||
Mexico Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.050 | 01/11/40 | 92 | 101,108 | ||||||||||||
Sr. Unsec’d. Notes, GMTN | 5.750 | 10/12/2110 | 94 | 92,590 | ||||||||||||
|
| |||||||||||||||
193,698 | ||||||||||||||||
Mongolia 1.0% | ||||||||||||||||
Mongolia Government International Bond, Sr. Unsec’d. Notes, EMTN | 8.750 | 03/09/24 | 220 | 243,648 | ||||||||||||
Nigeria 2.2% | ||||||||||||||||
Nigeria Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 7.143 | 02/23/30 | 200 | 204,500 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 7.696 | 02/23/38 | 200 | 205,500 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 06/27/22 | 130 | 132,275 | ||||||||||||
|
| |||||||||||||||
542,275 | ||||||||||||||||
Oman 1.6% | ||||||||||||||||
Oman Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 6.500 | 03/08/47 | 225 | 207,472 | ||||||||||||
Sr. Unsec’d. Notes, 144A | 6.750 | 01/17/48 | 200 | 188,280 | ||||||||||||
|
| |||||||||||||||
395,752 |
See Notes to Financial Statements.
16 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Pakistan 2.1% | ||||||||||||||||
Pakistan Government International Bond, Sr. Unsec’d. Notes | 8.250 | % | 04/15/24 | 300 | $ | 311,747 | ||||||||||
Second Pakistan International Sukuk Co. Ltd. (The), Sr. Unsec’d. Notes | 6.750 | 12/03/19 | 200 | 204,136 | ||||||||||||
|
| |||||||||||||||
515,883 | ||||||||||||||||
Panama 1.7% | ||||||||||||||||
Panama Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 9.375 | 04/01/29 | 105 | 149,363 | ||||||||||||
Sr. Unsec’d. Notes | 6.700 | 01/26/36 | 220 | 271,700 | ||||||||||||
|
| |||||||||||||||
421,063 | ||||||||||||||||
Peru 2.0% | ||||||||||||||||
Peruvian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 8.750 | 11/21/33 | 265 | 390,212 | ||||||||||||
Sr. Unsec’d. Notes | 6.550 | 03/14/37 | 75 | 94,238 | ||||||||||||
|
| |||||||||||||||
484,450 | ||||||||||||||||
Philippines 1.1% | ||||||||||||||||
Philippine Government International Bond, Sr. Unsec’d. Notes | 7.750 | 01/14/31 | 200 | 268,886 | ||||||||||||
Romania 0.5% | ||||||||||||||||
Romanian Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, EMTN | 3.875 | 10/29/35 | EUR | 11 | 14,094 | |||||||||||
Sr. Unsec’d. Notes, EMTN | 6.125 | 01/22/44 | 98 | 113,680 | ||||||||||||
|
| |||||||||||||||
127,774 | ||||||||||||||||
Russia 2.0% | ||||||||||||||||
Russian Foreign Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 12.750 | 06/24/28 | 50 | 80,809 | ||||||||||||
Sr. Unsec’d. Notes | 4.750 | 05/27/26 | 200 | 203,162 | ||||||||||||
Sr. Unsec’d. Notes | 5.625 | 04/04/42 | 200 | 209,600 | ||||||||||||
|
| |||||||||||||||
493,571 | ||||||||||||||||
Senegal 0.8% | ||||||||||||||||
Senegal Government International Bond, | 6.750 | 03/13/48 | 205 | 193,213 |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 17 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
South Africa 1.8% | ||||||||||||||||
Republic of South Africa Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 4.665 | % | 01/17/24 | 100 | $ | 99,522 | ||||||||||
Sr. Unsec’d. Notes | 6.250 | 03/08/41 | 130 | 135,597 | ||||||||||||
Sr. Unsec’d. Notes | 4.875 | 04/14/26 | 200 | 196,433 | ||||||||||||
|
| |||||||||||||||
431,552 | ||||||||||||||||
Sri Lanka 2.4% | ||||||||||||||||
Sri Lanka Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes, 144A | 5.750 | 04/18/23 | 200 | 198,735 | ||||||||||||
Sr. Unsec’d. Notes | 6.200 | 05/11/27 | 200 | 192,965 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 01/18/22 | 200 | 201,482 | ||||||||||||
|
| |||||||||||||||
593,182 | ||||||||||||||||
Turkey 4.7% | ||||||||||||||||
Turkey Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.375 | 02/05/25 | 10 | 10,959 | ||||||||||||
Sr. Unsec’d. Notes | 6.875 | 03/17/36 | 230 | 236,213 | ||||||||||||
Sr. Unsec’d. Notes | 5.125 | 03/25/22 | 350 | 353,868 | ||||||||||||
Sr. Unsec’d. Notes | 4.875 | 04/16/43 | 200 | 159,050 | ||||||||||||
Sr. Unsec’d. Notes | 5.750 | 03/22/24 | 200 | 202,754 | ||||||||||||
Export Credit Bank of Turkey, Sr. Unsec’d. Notes | 5.375 | 10/24/23 | 200 | 195,600 | ||||||||||||
|
| |||||||||||||||
1,158,444 | ||||||||||||||||
Ukraine 4.4% | ||||||||||||||||
Ukraine Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/21 | 110 | 113,597 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/23 | 160 | 161,286 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/24 | 135 | 134,662 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/25 | 115 | 114,138 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/26 | 200 | 197,152 | ||||||||||||
Sr. Unsec’d. Notes | 7.750 | 09/01/27 | 150 | 147,078 | ||||||||||||
Ukreximbank Via Biz Finance PLC, Sr. Unsec’d. Notes | 9.750 | 01/22/25 | 200 | 209,250 | ||||||||||||
|
| |||||||||||||||
1,077,163 | ||||||||||||||||
Uruguay 1.2% | ||||||||||||||||
Uruguay Government International Bond, | ||||||||||||||||
Sr. Unsec’d. Notes | 7.625 | 03/21/36 | 185 | 240,787 | ||||||||||||
Sr. Unsec’d. Notes | 5.100 | 06/18/50 | 60 | 58,950 | ||||||||||||
|
| |||||||||||||||
299,737 |
See Notes to Financial Statements.
18 |
Description | Interest Rate | Maturity Date | Principal Amount (000)# | Value | ||||||||||||
SOVEREIGN BONDS (Continued) | ||||||||||||||||
Venezuela 0.2% | ||||||||||||||||
Venezuela Government International Bond, Sr. Unsec’d. Notes(d) | 12.750 | % | 08/23/22 | 180 | $ | 56,700 | ||||||||||
Vietnam 0.8% | ||||||||||||||||
Vietnam Government International Bond, Sr. Unsec’d. Notes | 4.800 | 11/19/24 | 200 | 203,251 | ||||||||||||
Zambia 0.8% | ||||||||||||||||
Zambia Government International Bond, Sr. Unsec’d. Notes | 8.500 | �� | 04/14/24 | 200 | 201,970 | |||||||||||
|
| |||||||||||||||
TOTAL SOVEREIGN BONDS | 19,505,166 | |||||||||||||||
|
| |||||||||||||||
TOTAL LONG-TERM INVESTMENTS | 23,894,167 | |||||||||||||||
|
| |||||||||||||||
Shares | ||||||||||||||||
SHORT-TERM INVESTMENT 0.8% | ||||||||||||||||
AFFILIATED MUTUAL FUND | ||||||||||||||||
Prudential Investment Portfolios 2 - PGIM Core | 183,504 | 183,504 | ||||||||||||||
|
| |||||||||||||||
TOTAL INVESTMENTS 98.6% | 24,077,671 | |||||||||||||||
Other assets in excess of liabilities(z) 1.4% | 351,788 | |||||||||||||||
|
| |||||||||||||||
NET ASSETS 100.0% | $ | 24,429,459 | ||||||||||||||
|
|
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
GMTN—Global Medium Term Note
ARS—Argentine Peso
AUD—Australian Dollar
BRL—Brazilian Real
CHF—Swiss Franc
CLP—Chilean Peso
CNH—Chinese Renminbi (offshore)
COP—Colombian Peso
CZK—Czech Koruna
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 19 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
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
PEN—Peruvian Nuevo Sol
PHP—Philippine Peso
PLN—Polish Zloty
RUB—Russian Ruble
SGD—Singapore Dollar
THB—Thai Baht
TRY—Turkish Lira
TWD—New Taiwanese Dollar
USD—United States Dollar
ZAR—South African Rand
# | Principal amount is shown in U.S. dollars unless otherwise stated. |
(cc) | Variable rate instrument. The rate shown is based on the latest available information as of April 30, 2018. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(d) | Represents issuer in default on interest payments and/or principal repayment. Non-income producing security. Such securities may be post maturity. |
(w) | PGIM Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - PGIM Core Ultra Short Bond Fund. |
(z) | Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end: |
Forward foreign currency exchange contracts outstanding at April 30, 2018:
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts: |
| |||||||||||||||||||||
Argentine Peso, | ||||||||||||||||||||||
Expiring 05/03/18 | Citigroup Global Markets | ARS | 2,462 | $ | 121,079 | $ | 119,608 | $ | — | $ | (1,471 | ) | ||||||||||
Australian Dollar, | ||||||||||||||||||||||
Expiring 07/12/18 | Citigroup Global Markets | AUD | 121 | 93,851 | 90,916 | — | (2,935 | ) |
See Notes to Financial Statements.
20 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d): |
| |||||||||||||||||||||
Brazilian Real, | ||||||||||||||||||||||
Expiring 05/03/18 | Barclays Capital Group | BRL | 154 | $ | 46,434 | $ | 44,012 | $ | — | $ | (2,422 | ) | ||||||||||
Expiring 05/03/18 | Goldman Sachs & Co. | BRL | 154 | 46,328 | 43,806 | — | (2,522 | ) | ||||||||||||||
Expiring 05/03/18 | Morgan Stanley | BRL | 1,061 | 325,947 | 302,878 | — | (23,069 | ) | ||||||||||||||
Expiring 07/03/18 | Goldman Sachs & Co. | BRL | 847 | 241,683 | 240,359 | — | (1,324 | ) | ||||||||||||||
British Pound, | ||||||||||||||||||||||
Expiring 07/26/18 | JPMorgan Chase | GBP | 67 | 94,404 | 93,154 | — | (1,250 | ) | ||||||||||||||
Chilean Peso, | ||||||||||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | CLP | 33,696 | 55,971 | 54,926 | — | (1,045 | ) | ||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | CLP | 42,446 | 70,022 | 69,188 | — | (834 | ) | ||||||||||||||
Chinese Renminbi, | ||||||||||||||||||||||
Expiring 07/24/18 | Barclays Capital Group | CNH | 1 | 206 | 204 | — | (2 | ) | ||||||||||||||
Colombian Peso, | ||||||||||||||||||||||
Expiring 06/15/18 | Barclays Capital Group | COP | 252,504 | 87,715 | 89,837 | 2,122 | — | |||||||||||||||
Expiring 06/15/18 | Citigroup Global Markets | COP | 133,446 | 46,660 | 47,478 | 818 | — | |||||||||||||||
Expiring 06/15/18 | Citigroup Global Markets | COP | 155,353 | 55,971 | 55,272 | — | (699 | ) | ||||||||||||||
Expiring 06/15/18 | Citigroup Global Markets | COP | 252,504 | 87,889 | 89,837 | 1,948 | — | |||||||||||||||
Czech Koruna, | ||||||||||||||||||||||
Expiring 07/12/18 | Citigroup Global Markets | CZK | 3,007 | 146,318 | 142,474 | — | (3,844 | ) | ||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||
Expiring 07/24/18 | Deutsche Bank AG | HUF | 28,715 | 114,514 | 111,166 | — | (3,348 | ) | ||||||||||||||
Indian Rupee, | ||||||||||||||||||||||
Expiring 07/20/18 | Barclays Capital Group | INR | 15,575 | 234,496 | 231,340 | — | (3,156 | ) | ||||||||||||||
Expiring 07/20/18 | Deutsche Bank AG | INR | 16,301 | 245,631 | 242,136 | — | (3,495 | ) | ||||||||||||||
Expiring 07/20/18 | Morgan Stanley | INR | 3,705 | 56,538 | 55,036 | — | (1,502 | ) | ||||||||||||||
Expiring 07/20/18 | UBS AG | INR | 1,355 | 20,000 | 20,127 | 127 | — | |||||||||||||||
Expiring 07/20/18 | UBS AG | INR | 4,030 | 60,000 | 59,858 | — | (142 | ) | ||||||||||||||
Indonesian Rupiah, | ||||||||||||||||||||||
Expiring 07/16/18 | Barclays Capital Group | IDR | 509,040 | 36,000 | 36,266 | 266 | — | |||||||||||||||
Expiring 07/16/18 | Barclays Capital Group | IDR | 1,189,199 | 84,000 | 84,722 | 722 | — | |||||||||||||||
Expiring 07/16/18 | Deutsche Bank AG | IDR | 1,856,542 | 134,066 | 132,266 | — | (1,800 | ) | ||||||||||||||
Expiring 07/16/18 | JPMorgan Chase | IDR | 1,133,595 | 81,000 | 80,761 | — | (239 | ) | ||||||||||||||
Japanese Yen, | ||||||||||||||||||||||
Expiring 07/26/18 | Citigroup Global Markets | JPY | 10,002 | 93,125 | 92,062 | — | (1,063 | ) | ||||||||||||||
Mexican Peso, | ||||||||||||||||||||||
Expiring 06/28/18 | Morgan Stanley | MXN | 835 | 45,000 | 44,215 | — | (785 | ) | ||||||||||||||
Expiring 06/28/18 | Morgan Stanley | MXN | 7,233 | 384,608 | 383,132 | — | (1,476 | ) | ||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | TWD | 851 | 29,000 | 28,905 | — | (95 | ) | ||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | TWD | 1,252 | 43,000 | 42,531 | — | (469 | ) | ||||||||||||||
Expiring 07/13/18 | Toronto Dominion | TWD | 1,304 | 45,000 | 44,303 | — | (697 | ) |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 21 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d): |
| |||||||||||||||||||||
New Taiwanese Dollar, (cont’d.) |
| |||||||||||||||||||||
Expiring 07/13/18 | UBS AG | TWD | 1,166 | $ | 40,000 | $ | 39,614 | $ | — | $ | (386 | ) | ||||||||||
Expiring 07/13/18 | UBS AG | TWD | 1,835 | 63,000 | 62,369 | — | (631 | ) | ||||||||||||||
Expiring 07/13/18 | UBS AG | TWD | 2,541 | 87,000 | 86,347 | — | (653 | ) | ||||||||||||||
Expiring 07/13/18 | UBS AG | TWD | 918 | 31,000 | 31,207 | 207 | — | |||||||||||||||
Expiring 07/13/18 | UBS AG | TWD | 941 | 32,000 | 31,989 | — | (11 | ) | ||||||||||||||
Expiring 07/13/18 | UBS AG | TWD | 2,239 | 76,000 | 76,075 | 75 | — | |||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | PEN | 49 | 15,000 | 14,889 | — | (111 | ) | ||||||||||||||
Philippine Peso, | ||||||||||||||||||||||
Expiring 06/14/18 | Deutsche Bank AG | PHP | 4,899 | 94,038 | 94,445 | 407 | — | |||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 5,704 | 109,000 | 109,968 | 968 | — | |||||||||||||||
Polish Zloty, | ||||||||||||||||||||||
Expiring 07/24/18 | UBS AG | PLN | 592 | 174,803 | 168,948 | — | (5,855 | ) | ||||||||||||||
Russian Ruble, | ||||||||||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | RUB | 3,512 | 56,388 | 55,278 | — | (1,110 | ) | ||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | RUB | 5,898 | 101,269 | 92,823 | — | (8,446 | ) | ||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||
Expiring 05/11/18 | Bank of America | SGD | 234 | 176,251 | 176,730 | 479 | — | |||||||||||||||
Expiring 05/11/18 | Deutsche Bank AG | SGD | 234 | 176,610 | 176,730 | 120 | — | |||||||||||||||
Expiring 05/11/18 | Morgan Stanley | SGD | 29 | 22,000 | 21,935 | — | (65 | ) | ||||||||||||||
South African Rand, | ||||||||||||||||||||||
Expiring 06/12/18 | Barclays Capital Group | ZAR | 654 | 55,594 | 52,172 | — | (3,422 | ) | ||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | ZAR | 343 | 28,174 | 27,355 | — | (819 | ) | ||||||||||||||
Expiring 06/12/18 | Toronto Dominion | ZAR | 2,574 | 213,556 | 205,273 | — | (8,283 | ) | ||||||||||||||
South Korean Won, | ||||||||||||||||||||||
Expiring 05/09/18 | Barclays Capital Group | KRW | 98,711 | 93,687 | 92,443 | — | (1,244 | ) | ||||||||||||||
Expiring 05/09/18 | Deutsche Bank AG | KRW | 201,390 | 186,317 | 188,601 | 2,284 | — | |||||||||||||||
Thai Baht, | ||||||||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,071 | 34,000 | 33,946 | — | (54 | ) | ||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,107 | 35,000 | 35,101 | 101 | — | |||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,484 | 47,000 | 47,036 | 36 | — | |||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,635 | 52,000 | 51,812 | — | (188 | ) | ||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 2,611 | 84,000 | 82,765 | — | (1,235 | ) | ||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 6,193 | 196,557 | 196,277 | — | (280 | ) | ||||||||||||||
Turkish Lira, | ||||||||||||||||||||||
Expiring 06/12/18 | Barclays Capital Group | TRY | 158 | 37,540 | 38,395 | 855 | — | |||||||||||||||
Expiring 06/12/18 | Barclays Capital Group | TRY | 376 | 92,656 | 91,268 | — | (1,388 | ) | ||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 30 | 7,400 | 7,341 | — | (59 | ) |
See Notes to Financial Statements.
22 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Purchase Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d): |
| |||||||||||||||||||||
Turkish Lira, (cont’d.) |
| |||||||||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 75 | $ | 18,470 | $ | 18,137 | $ | — | $ | (333 | ) | ||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 149 | 37,977 | 36,075 | — | (1,902 | ) | ||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 231 | 56,288 | 56,187 | — | (101 | ) | ||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 261 | 63,516 | 63,486 | — | (30 | ) | ||||||||||||||
Expiring 06/12/18 | Citigroup Global Markets | TRY | 303 | 74,933 | 73,563 | — | (1,370 | ) | ||||||||||||||
Expiring 06/12/18 | Goldman Sachs & Co. | TRY | 285 | 68,300 | 69,086 | 786 | — | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
$ | 5,963,780 | $ | 5,878,441 | $ | 12,321 | $ | (97,660 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts: |
| |||||||||||||||||||||
Argentine Peso, | ||||||||||||||||||||||
Expiring 05/03/18 | BNP Paribas | ARS | 479 | $ | 23,365 | $ | 23,274 | $ | 91 | $ | — | |||||||||||
Expiring 05/03/18 | Citigroup Global Markets | ARS | 1,117 | 54,519 | 54,286 | 233 | — | |||||||||||||||
Expiring 05/03/18 | Citigroup Global Markets | ARS | 857 | 41,716 | 41,645 | 71 | — | |||||||||||||||
Australian Dollar, | ||||||||||||||||||||||
Expiring 07/12/18 | Citigroup Global Markets | AUD | 121 | 93,338 | 91,410 | 1,928 | — | |||||||||||||||
Brazilian Real, | ||||||||||||||||||||||
Expiring 05/03/18 | Citigroup Global Markets | BRL | 384 | 111,942 | 109,597 | 2,345 | — | |||||||||||||||
Expiring 05/03/18 | Goldman Sachs & Co. | BRL | 847 | 242,923 | 241,810 | 1,113 | — | |||||||||||||||
Expiring 05/03/18 | UBS AG | BRL | 138 | 40,000 | 39,289 | 711 | — | |||||||||||||||
Expiring 07/03/18 | BNP Paribas | BRL | 325 | 92,278 | 92,137 | 141 | — | |||||||||||||||
Chilean Peso, | ||||||||||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | CLP | 23,591 | 39,000 | 38,455 | 545 | — | |||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | CLP | 21,596 | 35,590 | 35,202 | 388 | — | |||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | CLP | 10,441 | 17,141 | 17,020 | 121 | — | |||||||||||||||
Expiring 07/13/18 | Citigroup Global Markets | CLP | 24,159 | 39,614 | 39,380 | 234 | — | |||||||||||||||
Expiring 07/13/18 | UBS AG | CLP | 18,005 | 30,000 | 29,348 | 652 | — | |||||||||||||||
Colombian Peso, | ||||||||||||||||||||||
Expiring 06/15/18 | Citigroup Global Markets | COP | 102,816 | 36,000 | 36,580 | — | (580 | ) | ||||||||||||||
Czech Koruna, | ||||||||||||||||||||||
Expiring 07/12/18 | Morgan Stanley | CZK | 394 | 19,000 | 18,677 | 323 | — | |||||||||||||||
Expiring 07/12/18 | UBS AG | CZK | 1,947 | 92,289 | 92,275 | 14 | — | |||||||||||||||
Euro, | ||||||||||||||||||||||
Expiring 07/26/18 | Citigroup Global Markets | EUR | 152 | 184,578 | 184,729 | — | (151 | ) | ||||||||||||||
Expiring 07/26/18 | Goldman Sachs & Co. | EUR | 23 | 28,640 | 28,132 | 508 | — | |||||||||||||||
Expiring 07/26/18 | Toronto Dominion | EUR | 611 | 751,589 | 742,658 | 8,931 | — |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 23 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d): |
| |||||||||||||||||||||
Hungarian Forint, | ||||||||||||||||||||||
Expiring 07/24/18 | Morgan Stanley | HUF | 9,765 | $ | 38,000 | $ | 37,802 | $ | 198 | $ | — | |||||||||||
Israeli Shekel, | ||||||||||||||||||||||
Expiring 07/26/18 | Citigroup Global Markets | ILS | 566 | 160,603 | 158,193 | 2,410 | — | |||||||||||||||
Japanese Yen, | ||||||||||||||||||||||
Expiring 07/26/18 | Citigroup Global Markets | JPY | 10,067 | 93,125 | 92,657 | 468 | — | |||||||||||||||
Mexican Peso, | ||||||||||||||||||||||
Expiring 06/28/18 | Citigroup Global Markets | MXN | 715 | 38,000 | 37,880 | 120 | — | |||||||||||||||
New Taiwanese Dollar, | ||||||||||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | TWD | 12,528 | 432,347 | 425,751 | 6,596 | — | |||||||||||||||
Peruvian Nuevo Sol, | ||||||||||||||||||||||
Expiring 07/13/18 | UBS AG | PEN | 65 | 20,000 | 19,901 | 99 | — | |||||||||||||||
Philippine Peso, | ||||||||||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 4,896 | 92,716 | 94,398 | — | (1,682 | ) | ||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 4,392 | 84,000 | 84,681 | — | (681 | ) | ||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 2,147 | 41,000 | 41,400 | — | (400 | ) | ||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 1,996 | 38,000 | 38,480 | — | (480 | ) | ||||||||||||||
Expiring 06/14/18 | Barclays Capital Group | PHP | 1,263 | 24,000 | 24,347 | — | (347 | ) | ||||||||||||||
Expiring 06/14/18 | Deutsche Bank AG | PHP | 1,349 | 25,715 | 26,003 | — | (288 | ) | ||||||||||||||
Polish Zloty, | ||||||||||||||||||||||
Expiring 07/24/18 | Morgan Stanley | PLN | 220 | 63,000 | 62,736 | 264 | — | |||||||||||||||
Russian Ruble, | ||||||||||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | RUB | 3,717 | 58,600 | 58,489 | 111 | — | |||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | RUB | 1,867 | 29,800 | 29,383 | 417 | — | |||||||||||||||
Expiring 07/13/18 | Barclays Capital Group | RUB | 1,772 | 29,160 | 27,887 | 1,273 | — | |||||||||||||||
Singapore Dollar, | ||||||||||||||||||||||
Expiring 05/11/18 | JPMorgan Chase | SGD | 40 | 30,000 | 30,045 | — | (45 | ) | ||||||||||||||
Expiring 05/11/18 | Morgan Stanley | SGD | 90 | 69,000 | 68,191 | 809 | — | |||||||||||||||
Expiring 05/11/18 | Morgan Stanley | SGD | 32 | 24,000 | 23,964 | 36 | — | |||||||||||||||
Expiring 05/11/18 | Morgan Stanley | SGD | 25 | 19,000 | 19,047 | — | (47 | ) | ||||||||||||||
South African Rand, | ||||||||||||||||||||||
Expiring 06/12/18 | Morgan Stanley | ZAR | 615 | 49,000 | 49,050 | — | (50 | ) | ||||||||||||||
South Korean Won, | ||||||||||||||||||||||
Expiring 05/09/18 | BNP Paribas | KRW | 66,887 | 62,000 | 62,640 | — | (640 | ) | ||||||||||||||
Expiring 05/09/18 | BNP Paribas | KRW | 37,191 | 35,000 | 34,829 | 171 | — | |||||||||||||||
Expiring 05/09/18 | BNP Paribas | KRW | 32,523 | 30,000 | 30,458 | — | (458 | ) | ||||||||||||||
Expiring 05/09/18 | Citigroup Global Markets | KRW | 52,511 | 49,000 | 49,176 | — | (176 | ) | ||||||||||||||
Swiss Franc, | ||||||||||||||||||||||
Expiring 07/24/18 | Bank of America | CHF | 194 | 200,447 | 197,689 | 2,758 | — |
See Notes to Financial Statements.
24 |
Forward foreign currency exchange contracts outstanding at April 30, 2018 (continued):
Sales Contracts | Counterparty | Notional Amount (000) | Value at Settlement Date | Current Value | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||||||||
OTC forward foreign currency exchange contracts (cont’d): |
| |||||||||||||||||||||||
Thai Baht, | ||||||||||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 2,743 | $ | 88,000 | $ | 86,949 | $ | 1,051 | $ | — | |||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,573 | 50,000 | 49,850 | 150 | — | |||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 1,540 | 49,000 | 48,798 | 202 | — | |||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 913 | 29,000 | 28,943 | 57 | — | |||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 690 | 22,000 | 21,885 | 115 | — | |||||||||||||||||
Expiring 05/11/18 | Citigroup Global Markets | THB | 566 | 18,000 | 17,929 | 71 | — | |||||||||||||||||
Turkish Lira, | ||||||||||||||||||||||||
Expiring 06/12/18 | Barclays Capital Group | TRY | 222 | 56,065 | 53,956 | 2,109 | — | |||||||||||||||||
Expiring 06/12/18 | UBS AG | TRY | 375 | 92,838 | 90,939 | 1,899 | — | |||||||||||||||||
Expiring 06/12/18 | UBS AG | TRY | 368 | 93,321 | 89,345 | 3,976 | — | |||||||||||||||||
Expiring 06/12/18 | UBS AG | TRY | 299 | 74,742 | 72,695 | 2,047 | — | |||||||||||||||||
Expiring 06/12/18 | UBS AG | TRY | 223 | 56,038 | 54,209 | 1,829 | — | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$4,438,039 | $ | 4,396,479 | 47,585 | (6,025 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 59,906 | $ | (103,685 | ) | ||||||||||||||||||||
|
|
|
|
Settlement | Type | Notional Amount (000) | In Exchange For (000) | Unrealized Appreciation | Unrealized Depreciation | Counterparty | ||||||||||||||||||||
OTC cross currency exchange contract: |
| |||||||||||||||||||||||||
07/24/2018 | Buy | CHF | 98 | EUR | 82 | $ | 50 | $ | — | Citigroup Global Markets |
Fair Value Measurements:
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—unadjusted 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.
PGIM Emerging Markets Debt Hard Currency Fund | 25 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
The following is a summary of the inputs used as of April 30, 2018 in valuing such portfolio securities:
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities | ||||||||||||
Corporate Bonds | ||||||||||||
Argentina | $ | — | $ | 169,260 | $ | — | ||||||
Brazil | — | 365,376 | — | |||||||||
Chile | — | 206,930 | — | |||||||||
China | — | 396,603 | — | |||||||||
India | — | 192,154 | — | |||||||||
Indonesia | — | 241,799 | — | |||||||||
Malaysia | — | 194,347 | — | |||||||||
Mexico | — | 1,148,438 | — | |||||||||
Russia | — | 365,076 | — | |||||||||
South Africa | — | 452,553 | — | |||||||||
Trinidad and Tobago | — | 137,012 | — | |||||||||
Tunisia | — | 171,879 | — | |||||||||
Venezuela | — | 347,574 | — | |||||||||
Sovereign Bonds | ||||||||||||
Angola | — | 224,540 | — | |||||||||
Argentina | — | 1,506,659 | — | |||||||||
Armenia | — | 214,650 | — | |||||||||
Azerbaijan | — | 273,665 | — | |||||||||
Bahrain | — | 184,320 | — | |||||||||
Belarus | — | 209,304 | — | |||||||||
Brazil | — | 987,433 | — | |||||||||
Colombia | — | 501,112 | — | |||||||||
Congo | — | 59,555 | — | |||||||||
Costa Rica | — | 387,388 | — | |||||||||
Cote d’lvoire | — | 328,852 | — | |||||||||
Dominican Republic | — | 693,927 | — | |||||||||
Ecuador | — | 699,750 | — | |||||||||
Egypt | — | 575,699 | — | |||||||||
El Salvador | — | 531,998 | — | |||||||||
Gabon | — | 194,918 | — | |||||||||
Ghana | — | 258,540 | — | |||||||||
Greece | — | 215,225 | — | |||||||||
Honduras | — | 216,920 | — | |||||||||
Hungary | — | 216,737 | — | |||||||||
Indonesia | — | 795,261 | — | |||||||||
Iraq | — | 435,659 | — | |||||||||
Jamaica | — | 259,875 | — | |||||||||
Jordan | — | 194,764 | — | |||||||||
Kazakhstan | — | 238,340 | — | |||||||||
Kenya | — | 413,659 | — |
See Notes to Financial Statements.
26 |
Level 1 | Level 2 | Level 3 | ||||||||||
Investments in Securities (continued) | ||||||||||||
Sovereign Bonds (continued) | ||||||||||||
Lebanon | $ | — | $ | 654,554 | $ | — | ||||||
Malaysia | — | 129,650 | — | |||||||||
Mexico | — | 193,698 | — | |||||||||
Mongolia | — | 243,648 | — | |||||||||
Nigeria | — | 542,275 | — | |||||||||
Oman | — | 395,752 | — | |||||||||
Pakistan | — | 515,883 | — | |||||||||
Panama | — | 421,063 | — | |||||||||
Peru | — | 484,450 | — | |||||||||
Philippines | — | 268,886 | — | |||||||||
Romania | — | 127,774 | — | |||||||||
Russia | — | 493,571 | — | |||||||||
Senegal | — | 193,213 | — | |||||||||
South Africa | — | 431,552 | — | |||||||||
Sri Lanka | — | 593,182 | — | |||||||||
Turkey | — | 1,158,444 | — | |||||||||
Ukraine | — | 1,077,163 | — | |||||||||
Uruguay | — | 299,737 | — | |||||||||
Venezuela | — | 56,700 | — | |||||||||
Vietnam | — | 203,251 | — | |||||||||
Zambia | — | 201,970 | — | |||||||||
Affiliated Mutual Fund | 183,504 | — | — | |||||||||
Other Financial Instruments* |
| |||||||||||
OTC Forward Foreign Currency Exchange Contracts | — | (43,779 | ) | — | ||||||||
OTC Cross Currency Exchange Contract | — | 50 | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 183,504 | $ | 23,850,438 | $ | — | ||||||
|
|
|
|
|
|
* | Other financial instruments are derivative instruments not reflected in the Schedule 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. |
During the period, there were no transfers between Level 1, Level 2 and Level 3 to report.
The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2018 were as follows:
Industry Classification:
Sovereign Bonds | 79.8 | % | ||
Oil & Gas | 11.4 | |||
Electric | 1.9 | |||
Chemicals | 1.7 | |||
Banks | 1.6 | |||
Mining | 0.8 | |||
Affiliated Mutual Fund | 0.8 | % | ||
Holding Companies—Diversified | 0.6 | |||
|
| |||
98.6 | ||||
Other assets in excess of liabilities | 1.4 | |||
|
| |||
100.0 | % | |||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 27 |
Schedule of Investments (unaudited) (continued)
as of April 30, 2018
Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:
The Series invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is foreign exchange contracts 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, 2018 as presented in the Statement of Assets and Liabilities:
Derivatives not accounted for as hedging instruments, carried at fair value | Asset Derivatives | Liability Derivatives | ||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Foreign exchange contracts | Unrealized appreciation on OTC cross currency exchange contracts | $ | 50 | — | $ | — | ||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward foreign currency exchange contracts | 59,906 | Unrealized depreciation on OTC forward foreign currency exchange contracts | 103,685 | ||||||||
|
|
|
| |||||||||
Total | $ | 59,956 | $ | 103,685 | ||||||||
|
|
|
|
The effects of derivative instruments on the Statement of Operations for the period ended April 30, 2018 are as follows:
Amount of Realized Gain (Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Forward & Cross Currency Exchange Contracts | |||
Foreign exchange contracts | $ | (34,499 | ) | |
|
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments, carried at fair value | Forward & Cross Currency Contracts | |||
Foreign exchange contracts | $ | (43,729 | ) | |
|
|
See Notes to Financial Statements.
28 |
For the period ended April 30, 2018, the Series’ average volume of derivative activities is as follows:
Forward Foreign Currency Exchange Contracts— Purchased(1) | Forward Foreign Currency Exchange Contracts— Sold(1) | Cross Currency Exchange Contracts(2) | ||||||||
$ | 5,824,551 | $ | 4,378,627 | $ | 49,643 |
(1) | Value at Settlement Date. |
(2) | Value at Trade Date. |
Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:
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.
Offsetting of OTC derivative assets and liabilities:
Counterparty | Gross Amounts of Recognized Assets(1) | Gross Amounts of Recognized Liabilities(1) | Net Amounts of Recognized Assets/ (Liabilities) | Collateral Pledged/ (Received)(2) | Net Amount | |||||||||||||||
Bank of America | $ | 3,237 | $ | — | $ | 3,237 | $ | — | $ | 3,237 | ||||||||||
Barclays Capital Group | 16,493 | (24,780 | ) | (8,287 | ) | — | (8,287 | ) | ||||||||||||
BNP Paribas | 403 | (1,098 | ) | (695 | ) | — | (695 | ) | ||||||||||||
Citigroup Global Markets | 12,408 | (19,844 | ) | (7,436 | ) | — | (7,436 | ) | ||||||||||||
Deutsche Bank AG | 2,811 | (8,931 | ) | (6,120 | ) | — | (6,120 | ) | ||||||||||||
Goldman Sachs & Co. | 2,407 | (3,846 | ) | (1,439 | ) | — | (1,439 | ) | ||||||||||||
JPMorgan Chase | — | (1,534 | ) | (1,534 | ) | — | (1,534 | ) | ||||||||||||
Morgan Stanley | 1,630 | (26,994 | ) | (25,364 | ) | — | (25,364 | ) | ||||||||||||
Toronto Dominion | 8,931 | (8,980 | ) | (49 | ) | — | (49 | ) | ||||||||||||
UBS AG | 11,636 | (7,678 | ) | 3,958 | — | 3,958 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 59,956 | $ | (103,685 | ) | $ | (43,729 | ) | $ | — | $ | (43,729 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities. |
(2) | Collateral amount disclosed by the Fund is limited to the Fund's OTC derivative exposure by counterparty. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 29 |
Statement of Assets & Liabilities (unaudited)
as of April 30, 2018
Assets | ||||
Investments at value: | ||||
Unaffiliated investments (cost $24,967,333) | $ | 23,894,167 | ||
Affiliated investments (cost $183,504) | 183,504 | |||
Cash | 8,940 | |||
Foreign currency, at value (cost $2,389) | 2,330 | |||
Interest receivable | 328,638 | |||
Receivable for investments sold | 258,118 | |||
Unrealized appreciation on OTC forward foreign currency exchange contracts | 59,906 | |||
Due from Manager | 9,212 | |||
Unrealized appreciation on OTC cross currency exchange contracts | 50 | |||
Prepaid expenses | 49,270 | |||
|
| |||
Total assets | 24,794,135 | |||
|
| |||
Liabilities | ||||
Payable for investments purchased | 239,621 | |||
Unrealized depreciation on OTC forward foreign currency exchange contracts | 103,685 | |||
Custodian and accounting fees payable | 20,799 | |||
Accrued expenses and other liabilities | 530 | |||
Affiliated transfer agent fee payable | 31 | |||
Distribution fee payable | 10 | |||
|
| |||
Total liabilities | 364,676 | |||
|
| |||
Net Assets | $ | 24,429,459 | ||
|
| |||
Net assets were comprised of: | ||||
Common Stock, at par | $ | 25,699 | ||
Paid-in capital in excess of par | 25,661,605 | |||
|
| |||
25,687,304 | ||||
Distributions in excess of net investment income | (69,008 | ) | ||
Accumulated net realized loss on investment and foreign currency transactions | (66,327 | ) | ||
Net unrealized depreciation on investments and foreign currencies | (1,122,510 | ) | ||
|
| |||
Net assets, April 30, 2018 | $ | 24,429,459 | ||
|
|
See Notes to Financial Statements.
30 |
Class A | ||||
Net asset value, offering price and redemption price per share, | $ | 9.51 | ||
Maximum sales charge (4.50% of offering price) | 0.45 | |||
|
| |||
Maximum offering price to public | $ | 9.96 | ||
|
| |||
Class C | ||||
Net asset value, offering price and redemption price per share, | $ | 9.50 | ||
|
| |||
Class Z | ||||
Net asset value, offering price and redemption price per share, | $ | 9.51 | ||
|
| |||
Class R6 | ||||
Net asset value, offering price and redemption price per share, | $ | 9.51 | ||
|
|
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 31 |
Statement of Operations (unaudited)
Period Ended April 30, 2018*
Net Investment Income (Loss) | ||||
Income | ||||
Interest income | $ | 492,790 | ||
Affiliated dividend income | 5,832 | |||
|
| |||
Total income | 498,622 | |||
|
| |||
Expenses | ||||
Management fee | 68,342 | |||
Distribution fee(a) | 48 | |||
Custodian and accounting fees | 37,855 | |||
Registration fees(a) | 29,384 | |||
Audit fee | 15,123 | |||
Legal fees and expenses | 10,802 | |||
Shareholders’ reports | 6,913 | |||
Directors’ fees | 4,320 | |||
Transfer agent’s fees and expenses (including affiliated expense of $86)(a) | 2,116 | |||
Miscellaneous | 6,698 | |||
|
| |||
Total expenses | 181,601 | |||
Less: Fee waiver and/or expense reimbursement(a) | (111,275 | ) | ||
|
| |||
Net expenses | 70,326 | |||
|
| |||
Net investment income (loss) | 428,296 | |||
|
| |||
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (39,670 | ) | ||
Forward and cross currency transactions | (34,499 | ) | ||
Foreign currency transactions | 7,842 | |||
|
| |||
(66,327 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | (1,073,166 | ) | ||
Forward and cross currency contracts | (43,729 | ) | ||
Foreign currencies | (5,615 | ) | ||
|
| |||
(1,122,510 | ) | |||
|
| |||
Net gain (loss) on investment and foreign currency transactions | (1,188,837 | ) | ||
|
| |||
Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (760,541 | ) | |
|
|
* | Commencement of operations was December 12, 2017. |
(a) | Class specific expenses and waivers were as follows: |
Class A | Class C | Class Z | Class R6 | |||||||||||||
Distribution fee | 10 | 38 | — | — | ||||||||||||
Registration fees | 7,346 | 7,346 | 7,346 | 7,346 | ||||||||||||
Transfer agent’s fees and expenses | 691 | 691 | 691 | 43 | ||||||||||||
Fee waiver and/or expense reimbursement | (8,067 | ) | (8,066 | ) | (8,488 | ) | (86,654 | ) |
See Notes to Financial Statements.
32 |
Statements of Changes in Net Assets (unaudited)
December 12, 2017* through April 30, 2018 | ||||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income (loss) | $ | 428,296 | ||
Net realized gain (loss) on investment and foreign currency transactions | (66,327 | ) | ||
Net change in unrealized appreciation (depreciation) on investments and foreign currencies | (1,122,510 | ) | ||
|
| |||
Net increase (decrease) in net assets resulting from operations | (760,541 | ) | ||
|
| |||
Dividends from net investment income | ||||
Class A | (186 | ) | ||
Class C | (158 | ) | ||
Class Z | (3,026 | ) | ||
Class R6 | (493,934 | ) | ||
|
| |||
(497,304 | ) | |||
|
| |||
Series share transactions | ||||
Net proceeds from shares sold | 25,190,000 | |||
Net asset value of shares issued in reinvestment of dividends and distributions | 497,304 | |||
|
| |||
Net increase (decrease) in net assets from share transactions | 25,687,304 | |||
|
| |||
Total increase (decrease) | 24,429,459 | |||
Net Assets: | ||||
Beginning of period | — | |||
|
| |||
End of period(a) | $ | 24,429,459 | ||
|
| |||
(a) Includes undistributed/(distributions in excess of) net investment income of: | $ | (69,008 | ) | |
|
|
* | Commencement of operations. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 33 |
Notes to Financial Statements (unaudited)
Prudential World Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company and currently consists of seven series: PGIM Jennison Emerging Markets Equity Opportunities Fund (formerly known as Prudential Jennison Emerging Markets Equity Fund), PGIM Jennison Global Infrastructure Fund, PGIM Jennison Global Opportunities Fund, PGIM Jennison International Opportunities Fund and PGIM QMA International Equity Fund, each of which are diversified funds and PGIM Emerging Markets Debt Hard Currency Fund and PGIM Emerging Markets Debt Local Currency Fund, each of which are non-diversified funds for purposes of the 1940 Act and may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund. These financial statements relate only to the PGIM Emerging Markets Debt Hard Currency Fund (the “Series”). The Fund commenced operations on December 12, 2017. Effective June 11, 2018, the Series’ name was changed by replacing “Prudential” with “PGIM” in each Series’ name and Class Q shares were renamed Class R6 shares.
The investment objective of the Series is total return, through a combination of current income and capital appreciation.
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 and liabilities 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 PGIM Investments LLC (“PGIM Investments” or “the Manager”). Under the current valuation procedures, the Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets and liabilities. 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
34 |
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.
For the fiscal reporting period-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Series’ foreign investments may change on days when investors cannot purchase or redeem Series shares.
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 Schedule of Investments.
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 classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Series utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on 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. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
OTC derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. The Series utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing OTC derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows.
PGIM Emerging Markets Debt Hard Currency Fund | 35 |
Notes to Financial Statements (unaudited) (continued)
In addition, the third-party vendors’ valuation techniques used to derive the evaluated OTC derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain OTC derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.
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 Manager 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 unaffiliated 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 transaction costs 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 Board of the Company. However, the liquidity of the Series’ investments in Rule 144A securities could be impaired if trading does not develop or declines.
36 |
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.
Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings 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.
Forward and Cross 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 and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation (depreciation) on investments and 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 forward and cross currency contract 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
PGIM Emerging Markets Debt Hard Currency Fund | 37 |
Notes to Financial Statements (unaudited) (continued)
counterparty at the end of the contract’s life. 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.
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.
Forward and cross currency contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.
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 the 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 specific identification method. 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 the 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 class specific expenses and waivers, which are allocated as noted below) 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.
38 |
Class specific expenses and waivers, where applicable, are charged to the respective share classes. Class specific expenses include distribution fees and distribution fee waivers, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements.
Taxes: It is the Series’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.
Dividends and Distributions: The Series expects to declare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gain(loss) are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.
Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund, on behalf of the Series, has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and supervises the Subadviser’s performance of such services. In addition, under the management agreement, PGIM Investments provides all of the administrative functions necessary for the organization, operation and management of the Series. PGIM Investments administers the corporate affairs of the Series and, in connection therewith, furnishes the Series with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Series’ custodian (the Custodian), and the Series’ transfer agent. PGIM Investments is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Series. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Series, including, but not limited to, the custodian, transfer agent, and accounting agent.
PGIM Investments has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Series through its PGIM Fixed Income unit. The subadvisory agreement provides that PGIM, Inc. will furnish investment advisory services in connection with the management of the Series. In connection therewith, PGIM, Inc. is
PGIM Emerging Markets Debt Hard Currency Fund | 39 |
Notes to Financial Statements (unaudited) (continued)
obligated to keep certain books and records of the Series. PGIM Investments pays for the services of PGIM, Inc., 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 PGIM Investments is accrued daily and payable monthly at an annual rate of 0.72% on average daily net assets up to and including $1 billion; 0.70% from $1 billion to 3 billion of average daily net assets; 0.68% from $3 billion to 5 billion of average daily net assets; 0.67% from 5 billion to 10 billion of average daily net assets; and 0.66% on average daily net assets exceeding $10 billion. The effective management fee rate before any waivers and/or expense reimbursements, was 0.72% for the period ended April 30, 2018.
PGIM Investments has contractually agreed, through February 28, 2019, to limit total annual Series operating expenses after fee waivers and/or expense reimbursements to 1.05% of average daily net assets for Class A shares, 1.80% of average daily net assets for Class C shares, 0.80% of average daily net assets for Class Z shares, and 0.74% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Series expenses such as dividend and interest expense and broker charges on short sales. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The waivers and/or expense reimbursements exceeded the effective management fee rate for the period ended April 30, 2018.
The Fund, on behalf of 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 Z and Class R6 shares. The Series compensates PIMS for distributing and servicing the Series’ Class A and Class C, 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 or Class R6 shares of the Series.
Pursuant to the Distribution Plans, the Series compensates PIMS for distribution related activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and C shares, respectively.
PIMS has advised the Series that it has not received any front-end sales charges resulting from sales of Class A shares during the period ended April 30, 2018. From these fees,
40 |
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 period ended April 30, 2018 it did not received any contingent deferred sales charges imposed upon redemptions by certain Class A and Class C shareholders.
PGIM Investments, PGIM, Inc. and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments 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. For the reporting period ended April 30, 2018 no such transactions were entered into by the Series.
The Series may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the period ended April 30, 2018 were $26,951,274 and $1,932,713, respectively.
A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual fund for the period ended April 30, 2018, is presented as follows:
Affiliated Mutual Fund* | Value, Beginning of Period | Cost of Purchases | Proceeds from Sales | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Value, End of Period | Shares, End of Period | Dividend Income | ||||||||||||||||||||||||
PGIM Core Ultra Short Bond Fund | $ | — | $ | 26,230,135 | $ | 26,046,631 | $ | — | $ | — | $ | 183,504 | 183,504 | $ | 5,832 |
* | The Fund did not have any capital gain distributions during the reporting period. |
PGIM Emerging Markets Debt Hard Currency Fund | 41 |
Notes to Financial Statements (unaudited) (continued)
5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized depreciation as of April 30, 2018 were as follows:
Tax Basis | $ | 25,156,452 | ||
|
| |||
Gross Unrealized Appreciation | 58,289 | |||
Gross Unrealized Depreciation | (1,180,799 | ) | ||
|
| |||
Net Unrealized Depreciation | $ | (1,122,510 | ) | |
|
|
Management has analyzed the Series’ tax positions taken and has concluded that no provision for income tax is required in the Series’ financial statements for the current reporting period. The Series’ 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.
6. Capital and Ownership
The Series offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class C shares are sold with a CDSC of 1% on sales made within 12 months of purchase. Class Z and Class R6 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.
The Fund is authorized to issue 4.8 billion shares of common stock, with a par value of $0.01 per share, which is divided into seven series. There are 600 million shares authorized for the Series, divided into four classes, designated Class A, Class C, Class Z and Class R6 common stock, each of which consists of 100 million, 100 million, 200 million, and 200 million authorized shares, respectively.
As of April 30, 2018, Prudential, through its affiliate entities, owned 1,019 Class A shares, 1,016 Class C shares, 1,020 Class Z shares and 2,551,539 Class R6 shares of the Series. At reporting period end, Prudential owned 99.3% of the Series’ outstanding shares.
42 |
Transactions in shares of common stock were as follows:
Class A | Shares | Amount | ||||||
Period ended April 30, 2018*: | ||||||||
Shares sold | 1,000 | $ | 10,000 | |||||
Shares issued in reinvestment of dividends and distributions | 19 | 186 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,019 | $ | 10,186 | |||||
|
|
|
| |||||
Class C | ||||||||
Period ended April 30, 2018*: | ||||||||
Shares sold | 1,000 | $ | 10,000 | |||||
Shares issued in reinvestment of dividends and distributions | 16 | 158 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 1,016 | $ | 10,158 | |||||
|
|
|
| |||||
Class Z | ||||||||
Period ended April 30, 2018*: | ||||||||
Shares sold | 15,985 | $ | 160,000 | |||||
Shares issued in reinvestment of dividends and distributions | 310 | 3,026 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 16,295 | $ | 163,026 | |||||
|
|
|
| |||||
Class R6 | ||||||||
Period ended April 30, 2018*: | ||||||||
Shares sold | 2,501,000 | $ | 25,010,000 | |||||
Shares issued in reinvestment of dividends and distributions | 50,539 | 493,934 | ||||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,551,539 | $ | 25,503,934 | |||||
|
|
|
|
* | Commencement of operations was December 12, 2017. |
PGIM Emerging Markets Debt Hard Currency Fund | 43 |
Financial Highlights (unaudited)
Class A Shares | ||||
December 12, 2017(a) through April 30, 2018 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $10.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.16 | |||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.47 | ) | ||
Total from investment operations | (0.31 | ) | ||
Less Dividends: | ||||
Dividends from net investment income | (0.18 | ) | ||
Net asset value, end of period | $9.51 | |||
Total Return(c): | (3.09)% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $10 | |||
Average net assets (000) | $10 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 1.05% | (e) | ||
Expenses before waivers and/or expense reimbursement | 213.63% | (e) | ||
Net investment income (loss) | 4.16% | (e) | ||
Portfolio turnover rate(g) | 8% | (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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
44 |
Class C Shares | ||||
December 12, 2017(a) through April 30, 2018 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $10.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.13 | |||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.47 | ) | ||
Total from investment operations | (0.34 | ) | ||
Less Dividends: | ||||
Dividends from net investment income | (0.16 | ) | ||
Net asset value, end of period | $9.50 | |||
Total Return(c): | (3.47)% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $10 | |||
Average net assets (000) | $10 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 1.80% | (e) | ||
Expenses before waivers and/or expense reimbursement | 214.59% | (e) | ||
Net investment income (loss) | 3.41% | (e) | ||
Portfolio turnover rate(g) | 8% | (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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 45 |
Financial Highlights (unaudited) (continued)
Class Z Shares | ||||
December 12, 2017(a) through April 30, 2018 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $10.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.17 | |||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.47 | ) | ||
Total from investment operations | (0.30 | ) | ||
Less Dividends: | ||||
Dividends from net investment income | (0.19 | ) | ||
Net asset value, end of period | $9.51 | |||
Total Return(c): | (3.00)% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $155 | |||
Average net assets (000) | $150 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 0.80% | (e) | ||
Expenses before waivers and/or expense reimbursement | 15.59% | (e) | ||
Net investment income (loss) | 4.53% | (e) | ||
Portfolio turnover rate(g) | 8% | (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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
46 |
Class R6 Shares | ||||
December 12, 2017(a) through April 30, 2018 | ||||
Per Share Operating Performance(b): | ||||
Net Asset Value, Beginning of Period | $10.00 | |||
Income (loss) from investment operations: | ||||
Net investment income (loss) | 0.17 | |||
Net realized and unrealized gain (loss) on investment and foreign currency transactions | (0.46 | ) | ||
Total from investment operations | (0.29 | ) | ||
Less Dividends: | ||||
Dividends from net investment income | (0.20 | ) | ||
Net asset value, end of period | $9.51 | |||
Total Return(c): | (2.98)% | |||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $24,255 | |||
Average net assets (000) | $24,577 | |||
Ratios to average net assets(d): | ||||
Expenses after waivers and/or expense reimbursement | 0.74% | (e) | ||
Expenses before waivers and/or expense reimbursement | 1.66% | (e) | ||
Net investment income (loss) | 4.51% | (e) | ||
Portfolio turnover rate(g) | 8% | (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 one full year are not annualized. |
(d) | Does not include expenses of the underlying funds in which the Series invests. |
(e) | Annualized. |
(f) | Not annualized. |
(g) | The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher. |
See Notes to Financial Statements.
PGIM Emerging Markets Debt Hard Currency Fund | 47 |
∎ TELEPHONE | ∎ WEBSITE | |||
655 Broad Street Newark, NJ 07102 | (800) 225-1852 | www.pgiminvestments.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 • Barry H. Evans • Keith F. Hartstein • Laurie Simon Hodrick • Michael S. Hyland • Stuart S. Parker • Richard A. Redeker • Brian K. Reid • 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 • Dino Capasso, Vice President and Deputy Chief Compliance Officer • Charles H. Smith, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, 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 | PGIM Investments LLC | 655 Broad Street Newark, NJ 07102 | ||
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INVESTMENT SUBADVISER | PGIM 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 | 225 Liberty 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.pgiminvestments.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.pgiminvestments.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, PGIM Emerging Markets Debt Hard Currency Fund, PGIM 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 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 |
PGIM EMERGING MARKETS DEBT HARD CURRENCY FUND
SHARE CLASS | A | C | Z | R6* | ||||
NASDAQ | PDHAX | PDHCX | PDHVX | PDHQX | ||||
CUSIP | 743969479 | 743969461 | 743969446 | 743969453 |
*Formerly known as Class Q shares.
MF239E2
Item 2 – Code of Ethics – Not required, as this is not an annual filing.
Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.
Item 5 – Audit Committee of Listed Registrants – Not applicable.
Item 6 – | Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form. |
Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable. |
Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – Not applicable. |
Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable. |
Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.
Item 11 – Controls and Procedures
(a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
(b) | There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12 – Exhibits
(a) (1) | Code of Ethics – Not required, as this is not an annual filing. |
(2) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT. |
(3) | Any written solicitation to purchase securities under Rule 23c-1. – Not applicable. |
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | Prudential World Fund, Inc. | |
By: | /s/ Deborah A. Docs | |
Deborah A. Docs | ||
Secretary | ||
Date: | June 18, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Stuart S. Parker | |
Stuart S. Parker | ||
President and Principal Executive Officer | ||
Date: | June 18, 2018 | |
By: | /s/ M. Sadiq Peshimam | |
M. Sadiq Peshimam | ||
Treasurer and Principal Financial and Accounting Officer | ||
Date: | June 18, 2018 |