Target Portfolio Trust N14 Registration statement for investment companies business combination

As filed with the Securities and Exchange Commission on January 16, 2015

Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 o

o PRE-EFFECTIVE AMENDMENT NO.

o POST-EFFECTIVE AMENDMENT NO.

The Target Portfolio Trust

(Exact Name of Registrant as Specified in Charter)

Gateway Center Three, 4th Floor

100 Mulberry Street

Newark, New Jersey 07102

(Address of Principal Executive Offices)

(973) 367-7521

(Registrant’s Telephone Number)

Deborah A. Docs

Gateway Center Three, 4th Floor

100 Mulberry Street

Newark, New Jersey 07102

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective under the Securities Act of 1933.

Title of the securities being registered: Shares of beneficial interest, par value $0.001 per share, of Target Small Capitalization Value Portfolio, a series of the Registrant.

It is proposed that this filing become effective on February 17, 2015, pursuant to Rule 488(a) under the Securities Act of 1933.

No filing fee is due because the Registrant is relying on Section 24(f) of the Investment Company Act of 1940, as amended.

PRUDENTIAL SMALL CAP VALUE FUND,

a series of Prudential Investment Portfolios 5

Gateway Center Three

100 Mulberry Street

Newark, New Jersey 07102

IMPORTANT PROXY MATERIALS

PLEASE VOTE NOW

February 17, 2015

Dear Shareholder:

I am writing to ask you to vote on an important proposal (the “Proposal”) whereby all of the assets of Prudential Small Cap Value Fund (the “Prudential Fund”), a series of Prudential Investment Portfolios 5 (“PIP5”), would be acquired by the Target Small Capitalization Value Portfolio (the “Target Portfolio,” and together with the Prudential Fund, the “Funds” and each, individually a “Fund”), a series of The Target Portfolio Trust (the “Trust”), and the Target Portfolio would assume all of the liabilities of the Prudential Fund (the “Reorganization”). Each of PIP5 and the Trust is a Delaware statutory trust. The shareholders’ meeting (the “Meeting”) is scheduled for Monday, May 11, 2015 at 3:00 p.m. Eastern time.

The Board of Trustees of PIP5 has reviewed and approved the Proposal and recommended that the Proposal be presented to shareholders of the Prudential Fund for their consideration. Although the Trustees have determined that the Proposal is in your best interest, the final decision to approve the Proposal is up to you.

Remember, your vote is extremely important, no matter how large or small your holdings. By voting now, you can help avoid additional costs that would be incurred with follow-up letters and calls.

If approved, combining the Funds would give you the opportunity to participate in a fund with identical investment objectives and substantially similar investment policies to those of the Prudential Fund, and will allow you to enjoy a substantially larger asset base over which expenses may be spread.

The accompanying combined prospectus/proxy statement includes a detailed description of the Proposal. Please read the enclosed materials carefully and cast your vote.

To vote, you may use any of the following methods:

·By Mail. Please complete, date and sign your proxy card before mailing it in the enclosed postage paid envelope. Proxy cards must be received by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.

·By Internet. Have your proxy card available. Go to the web site: www.proxyvote.com. Enter your control number from your proxy card. Follow the simple instructions found on the web site. Votes must be entered by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.

·By Telephone. Have your proxy card available. If your fund shares are held in your own name, call 1-800-690-6903 toll-free. If your fund shares are held on your behalf in a brokerage account, call 1-800-454-8683 toll-free. Enter your control number from your proxy card. Follow the simple instructions. Votes must be entered by 11:59 p.m. Eastern time on the day prior to the Meeting to be counted.

Special Note for Systematic Investment Plans (e.g., Automatic Investment Plan, Systematic Exchange, etc.). Shareholders in systematic investment plans must contact their financial adviser or call our customer service division, toll free, at 1-800-225-1852 to change their investment options. Otherwise, if the proposed transaction is approved, starting on the day following the closing of the proposed transaction (which is expected to occur during the second quarter of 2015), future purchases will automatically be made in shares of the Target Portfolio. The Reorganization is expected to occur on or about the close of business on May 15, 2015, if shareholder approval is obtained by the May 11, 2015 meeting date. If the meeting date is adjourned, the Reorganization may occur on a different date.

If you have any questions before you vote, please call D. F. King & Co., Inc., at 1-866-828-6929 toll-free. They will be happy to help you understand the Proposal and assist you in voting.

Stuart Parker

President

PRUDENTIAL SMALL CAP VALUE FUND,

a series of Prudential Investment Portfolios 5

Gateway Center Three

100 Mulberry Street

Newark, New Jersey 07102

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Our Shareholders:

Notice is hereby given that a Special Meeting of Shareholders (the “Meeting”) of Prudential Small Cap Value Fund (the “Prudential Fund”), a series of Prudential Investment Portfolios 5 (“PIP5”), a Delaware statutory trust, is scheduled to be held at 100 Mulberry Street, Gateway Center Three, 4th Floor, Newark, New Jersey 07102, on Monday, May 11, 2015, at 3:00 p.m. Eastern time, for the following purposes:

1. To approve or disapprove a Plan of Reorganization under which the Prudential Fund will transfer all of its assets to, and all of its liabilities will be assumed by, the Target Small Capitalization Value Portfolio (the “Target Portfolio”), a series of The Target Portfolio Trust (the “Trust”), a Delaware statutory trust, and the Prudential Fund will be dissolved (the “Proposal”). In connection with this proposed transfer and dissolution, whole and fractional shares of each share class of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of the same share class of the Target Portfolio, except that each whole and fractional share of Class B shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class A shares of the Target Portfolio and each whole and fractional share of Class Z shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class T shares of the Target Portfolio, and outstanding shares of the Prudential Fund will be cancelled. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio.

2. To transact such other business as may properly come before the Meeting or any adjournments of the Meeting.

The Board of Trustees of PIP5 has fixed the close of business on February 10, 2015 as the record date for the determination of the shareholders of the Prudential Fund entitled to notice of, and to vote at, the Meeting and any adjournments of the Meeting.

Deborah A. Docs

Secretary

Dated: February 17, 2015

Shareholders are invited to attend the Meeting in person. Any shareholder who does not expect to attend the Meeting is urged to complete the enclosed proxy card, date and sign it, and return it in the envelope provided, which needs no postage if mailed in the United States. You may also vote by telephone or over the internet as described in the materials provided to you. In order to avoid unnecessary expense, we ask for your cooperation in mailing your proxy card promptly, no matter how large or small your holdings may be. A copy of this combined Prospectus and Proxy Statement is available at PIP5’s website at www.prudentialfunds.com/fundchanges.

The Board of Trustees of PIP5 recommends that you vote FOR the Proposal.

Your vote is important.

Please return your proxy card promptly

or vote by telephone or over the internet.

INSTRUCTIONS FOR EXECUTING YOUR PROXY CARD

The following general rules for executing proxy cards may be of assistance to you and may help avoid the time and expense involved in validating your vote if you fail to execute your proxy card properly.

1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears on the account registration shown on the proxy card.

2. JOINT ACCOUNTS: Both owners must sign and the signatures should conform exactly to the names shown on the account registration.

3. ALL OTHER ACCOUNTS should show the capacity of the individual signing. This can be shown either in the form of account registration or by the individual executing the proxy card. For example:

VALID SIGNATURE
A.	1.	XYZ Corporation	John Smith, President

	2.	XYZ Corporation c/o John Smith, President	John Smith, President

B.	1.	ABC Company Profit Sharing Plan	Jane Doe, Trustee

	2.	Jones Family Trust	Charles Jones, Trustee

	3.	Sarah Clark, Trustee u/t/d 7/1/85	Sarah Clark, Trustee

C.	1.	Thomas Wilson, Custodian f/b/o Jessica Wilson UTMA New Jersey	Thomas Wilson, Custodian

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS and PROXY STATEMENT

for

PRUDENTIAL SMALL CAP VALUE FUND, A SERIES OF PRUDENTIAL INVESTMENT PORTFOLIOS 5

and

PROSPECTUS

for

TARGET SMALL CAPITALIZATION VALUE PORTFOLIO, A SERIES OF THE TARGET PORTFOLIO TRUST

Gateway Center Three

100 Mulberry Street

Newark, New Jersey 07102-4077

(973) 367-7521

Dated February 17, 2015

Acquisition of the Assets and Assumption of the Liabilities of

Prudential Small Cap Value Fund

By and in Exchange for Shares of Target Small Capitalization Value Portfolio

This combined Proxy Statement and Prospectus (“Prospectus/Proxy Statement”) is being furnished to the shareholders of the Prudential Small Cap Value Fund (the “Prudential Fund”), a series of Prudential Investment Portfolios 5 (“PIP5”), a Delaware statutory trust, in connection with the solicitation of proxies by the Board of Trustees of PIP5 for use at a special meeting of shareholders of the Prudential Fund and at any adjournments or postponements thereof (the “Meeting”).

The Meeting will be held at Gateway Center Three, 100 Mulberry Street, 4th Floor, Newark, New Jersey 07102 on Monday, May 11, 2015 at 3:00 p.m. Eastern time. This Prospectus/Proxy Statement first will be sent to shareholders on or about March 6, 2015.

The purpose of the Meeting is for shareholders of the Prudential Fund to vote on a Plan of Reorganization (the “Plan”) under which the Prudential Fund will transfer substantially all of its assets to, and substantially all of its liabilities will be assumed by, Target Small Capitalization Value Portfolio (the “Target Portfolio”), a series of The Target Portfolio Trust (the “Trust”), a Delaware statutory trust, in exchange for shares of the Target Portfolio, which will be distributed to shareholders of the Prudential Fund, and the subsequent cancellation of shares of the Prudential Fund and its liquidation and dissolution (the “Reorganization”). In connection with this proposed transfer and dissolution, whole and fractional shares of each share class of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of the same share class of the Target Portfolio, except that each whole and fractional share of Class B shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class A shares of the Target Portfolio and each whole and fractional share of Class Z shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class T shares of the Target Portfolio. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio. Each of the Prudential Fund and the Target Portfolio is a “Fund” and together they are referred to as the “Funds.” The fund resulting from the Reorganization is sometimes referred to herein as the “Combined Fund.”

If the shareholders of the Prudential Fund approve the Plan, they will become shareholders of the Target Portfolio.

The investment objectives of the Funds are identical and the investment policies of the Funds are substantially similar. The investment objective of both the Target Portfolio and the Prudential Fund is to seek above-average capital appreciation. The Target Portfolio seeks to achieve its objective by investing at least 80% of its investable assets in equity and equity-related securities of small-cap companies, defined as companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index. The Prudential Fund seeks to achieve its objective by investing at least 80% of its investable assets in common stocks and securities convertible into common stocks of small-cap companies, also defined as companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index (measured at the time of purchase). Although the Prudential Fund and the Target Portfolio are managed by the same subadviser in a manner that is substantially similar in all respects, there are some differences in investment policies and prospectus and SAI disclosure between the two Funds. These differences in the Funds’ policies and disclosure are explained in more detail below, but these differences do not affect the subadviser’s substantially similar management of the Funds.

This Prospectus/Proxy Statement sets forth concisely the information about the proposed Reorganization and the issuance of shares of the Target Portfolio that you should know about before voting. You should retain it for future reference. Additional information about the Target Portfolio and the proposed Reorganization has been filed with the Securities and Exchange Commission (“SEC”) and can be found in the following documents, which are incorporated by reference into this Prospectus/Proxy Statement:

· The Prospectus for the Target Portfolio, dated September 25, 2014, which is enclosed and incorporated by reference into this Prospectus/Proxy Statement;

· The Statement of Additional Information (“SAI”) for the Target Portfolio, dated September 25, 2014, which has been filed with the SEC and is incorporated by reference into this Prospectus/Proxy Statement.

· An SAI, dated February 17, 2015, relating to this Prospectus/Proxy Statement, which has been filed with the SEC and is incorporated by reference into this Prospectus/Proxy Statement.

· An Annual Report to Shareholders for the Target Portfolio for the fiscal year ended July 31, 2014, which is enclosed and incorporated by reference into this Prospectus/Proxy Statement.

You may request a free copy of these documents by calling 1-800-225-1852 or by writing to the Prudential Fund at the above address.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this Prospectus/Proxy Statement. Any representation to the contrary is a criminal offense.

Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed by, any bank, and are not insured by the Federal Deposit Insurance Corporation or any other U.S. government agency. Mutual fund shares involve investment risks, including the possible loss of principal.

SUMMARY

The following is a summary of certain information contained elsewhere in this Prospectus/Proxy Statement, including the Plan. You should read the more complete information in the rest of this Prospectus/Proxy Statement, including the Plan (attached as Exhibit A), the Prospectus for the Target Portfolio (Exhibit B to this Prospectus/Proxy Statement and which is enclosed), the Target Portfolio’s Annual Report to Shareholders for its fiscal year ended July 31, 2014 (Exhibit C to this Prospectus/Proxy Statement and which is enclosed), and the SAI relating to this Prospectus/Proxy Statement. This Prospectus/Proxy Statement is qualified in its entirety by reference to these documents. You should read these materials for more complete information.

The Proposal

You are being asked to consider and approve a Plan that will have the effect of combining the Prudential Fund and the Target Portfolio into a single mutual fund. The Reorganization is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under the Internal Revenue Code of 1986, as amended (the “Code”). It is expected that the shareholders of the Prudential Fund will not recognize gain or loss upon the exchange of all of their shares of the Prudential Fund solely for shares of the Target Portfolio, as described in this Prospectus/Proxy Statement and the Plan. The Prudential Fund does not currently expect to sell or otherwise dispose of any investments in a significant amount prior to the implementation of the Reorganization, except pursuant to transactions made in the ordinary course of business or with respect to investments that are not freely transferable or are otherwise restricted, if any. If the Prudential Fund were to sell its investments in a significant amount in anticipation of the Reorganization, the Prudential Fund could generate capital gains for shareholders if such gains exceeded the Prudential Fund’s available capital loss carryforwards.

The Prudential Fund and the Target Portfolio are open-end investment companies that are each organized as a Delaware statutory trust. The Prudential Fund is a series of PIP5 and the Target Portfolio is a series of the Trust.

If the shareholders of the Prudential Fund vote to approve the Plan, the assets of the Prudential Fund will be transferred to, and all of the liabilities of the Prudential Fund will be assumed by, the Target Portfolio. Whole and fractional shares of each share class of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of the same share class of the Target Portfolio, except that Class B shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class A shares of the Target Portfolio and each whole and fractional share of Class Z shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class T shares of the Target Portfolio. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio. After the transfer of assets and exchange of shares has been completed, the Prudential Fund will be liquidated and dissolved. If shareholders approve the Plan, you will cease to be a shareholder of the Prudential Fund and will become a shareholder of the Target Portfolio.

For the reasons set forth in the “Reasons for the Reorganization” section, the Board of Trustees of PIP5 and the Board of Trustees of the Trust have determined that the proposed Reorganization is in the best interests of the Prudential Fund and Target Portfolio, and have also concluded that the interests of the existing shareholders of the Funds will not be diluted as a result of the Reorganization.

The Board of Trustees of PIP5, on behalf of the Prudential Fund, has approved the Plan and unanimously recommends that you vote to approve the Plan.

Shareholder Voting

Shareholders who own shares of the Prudential Fund at the close of business on February 10, 2015 (the “Record Date”) will be entitled to vote at the Meeting and any adjournments thereof, and will be entitled to one vote for each full share and a fractional vote for each fractional share that they hold of the Prudential Fund. The approval of the Plan requires the affirmative vote of a 1940 Act Majority (as defined below) of the total outstanding voting shares of the Prudential Fund.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), a majority means that approval of the Plan requires the vote of the lesser of (i) 67% or more of the outstanding voting shares of the Prudential Fund represented at a meeting at which more than 50% of the outstanding voting shares of the Prudential Fund are present in person or represented by proxy; or (ii) more than 50% of the outstanding voting shares of the Prudential Fund (a “1940 Act Majority”).

Please vote your shares as soon as you receive this Prospectus/Proxy Statement. You may vote by completing and signing the enclosed ballot (proxy card) or over the Internet or by phone. If you vote by any of these methods, your votes will be officially cast at the Meeting for you by persons appointed as proxies. If you own shares in multiple accounts, you will receive multiple proxy cards. Each proxy card must be voted for all of your shares to be voted.

You can revoke or change your voting instructions at any time until the vote is taken at the Meeting. For more details about shareholder voting, see the “Voting Information” section of this Prospectus/Proxy Statement.

COMPARISON OF IMPORTANT FEATURES

The Investment Objectives, Policies and Principal Risks of the Funds

This section describes the investment objectives and policies of the Funds and the differences between them. For a complete description of the investment policies and risks for the Target Portfolio, you should read the Prospectus for the Target Portfolio (enclosed as Exhibit B), which is incorporated by reference into this Prospectus/Proxy Statement. Additional information is included in the Target Portfolio’s SAI, which is also incorporated by reference into this Prospectus/Proxy Statement.

The investment objectives of the Funds are identical and the investment policies of the Funds are substantially similar. The Funds are managed by the same subadviser in a manner that is substantially similar in all respects. The investment objective of both the Target Portfolio and the Prudential Fund is to seek above-average capital appreciation. The Target Portfolio seeks to achieve its objective by investing at least 80% of its investable assets in equity and equity-related securities of small-cap companies, defined as companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index. The Prudential Fund seeks to achieve its objective by investing at least 80% of its investable assets in common stocks and securities convertible into common stocks of small-cap companies, also defined as companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index (measured at the time of purchase). Certain differences in the Funds’ policies are explained in more detail below. The subadviser to both the Target Portfolio and the Prudential Fund is Quantitative Management Associates LLC (“QMA”), an affiliate of the investment manager of both Funds, Prudential Investments LLC (the “Manager” or “PI”).

Comparison of Investment Policies

The Prudential Fund and the Target Portfolio are managed by QMA in a manner that is substantially similar in all respects. The Funds have identical investment objectives and substantially similar investment strategies and risk profiles. Because the Target Portfolio is a series of the Trust and the Prudential Fund is a series of PIP5, and because the Funds were each launched at different times, there are some differences between the Funds with respect to investment policies and disclosure that appears in each of their prospectuses and SAIs. This section compares the Funds with respect to those differences in policies and disclosure, but those differences do not affect QMA’s substantially similar management of each Fund.

Each Fund pursues its investment objective through various investment strategies that are employed by QMA. As noted above, the principal investment policies and strategies of each Fund are substantially similar, and are reflected in detail in the table below. Due to the similarity of investment policies and strategies followed by the Funds, investments in the Funds are exposed to a similar set of principal risks, which are also discussed in more detail below.

Policy		The Prudential Fund		The Target Portfolio
Investment Objective		The Prudential Fund seeks above-average capital appreciation.		The Target Portfolio seeks above-average capital appreciation.

Principal Investments/Small Cap Value	The Prudential Fund normally invests at least 80% of its investable assets in common stocks and securities convertible into common stocks of small-cap companies, which the subadviser considers to be companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index (measured at the time of purchase).	The Target Portfolio normally invests at least 80% of the Portfolio’s investable assets in equity and equity-related securities of small-cap companies. Equity and equity-related securities include common and preferred stock, exchange-traded funds (ETFs), securities convertible into common stock, securities having common stock characteristics, futures contracts, and other derivative instruments whose value is based on common stock, such as rights, warrants, or options to purchase common stock. The subadviser considers small cap companies to be companies with market capitalizations within the market cap range of companies included in the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index (measured at the time of purchase). While most assets will typically be invested in U.S. equity and equity-related securities, including real estate investment trusts (REITs), the Target Portfolio may also invest in foreign equity and equity related securities.

Foreign Investments	The Prudential Fund may invest up to 20% of its assets in foreign securities, including stocks and other equity-related investments and other investment-grade fixed-income securities of foreign issuers. The Prudential Fund’s investments in foreign securities may include issuers located in emerging markets. American Depositary Receipts (ADRs), American Depositary Shares (ADSs) and other similar receipts or shares traded in US markets are not considered to be foreign securities. The Prudential Fund’s investments in ADRs, ADSs and other similar receipts or shares may include unsponsored receipts of shares.	The Target Portfolio may invest in foreign equity securities but does not have a specific investment limitation with respect to those securities.

REITs	The Prudential Fund may invest up to 25% of Fund assets in REITs.	The Target Portfolio may invest in REITs but does not have a specific investment limitation with respect to those securities.

Short Sales	The Prudential Fund may invest up to 25% of net assets in short sales.	The Target Portfolio does not invest in short sales.

Exchange-Traded Funds	The Prudential Fund may invest in exchange-traded funds (ETFs) but does not have a specific investment limitation with respect to those securities.	The Target Portfolio may invest up to 10% of total assets in ETFs.

Debt Obligations	The Prudential Fund may invest up to 20% of its investable assets in debt obligations.	The Target Portfolio may invest in debt obligations but does not have a specific investment limitation with respect to those securities, although it is also, in effect, limited by its policy to invest 80% of its investable assets in equity and equity-related securities and securities convertible into equity securities of small-cap companies.

Performance Benchmark	Russell 2000 Value Index Russell 2000 Index	Russell 2000 Value Index Russell 2000 Index

Portfolio Turnover	89%	42%

Principal Risks of Investing in the Funds. All investments have risks to some degree. Loss of money is a risk of investing in the Funds. Please remember that an investment in the Funds is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is

subject to investment risks, including possible loss of your original investment. The table below compares the principal risks of the Funds.

Principal Risks	The Prudential Fund	The Target Portfolio
Market Events. The global financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities and unprecedented volatility in the markets. In response to the crisis, the U.S. government and the Federal Reserve, as well as certain foreign governments and their central banks, have taken steps to support financial markets, including keeping interest rates low. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. This environment could make identifying investment risks and opportunities especially difficult for the subadviser, and whether or not the Funds invest in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Funds’ investments may be negatively affected. In addition, policy and legislative changes in the United States and other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time.	Yes	Yes

Risk of Increase in Expenses. Your actual cost of investing in the Funds may be higher than the expenses shown in the expense tables for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.	Yes	Yes

Equity Securities Risk. The price of a particular stock the Funds own could go down and you could lose money. In addition to an individual stock losing value, the value of the equity markets or a sector of them in which the Funds invest could go down. Different sectors of a market can react differently to adverse issuer, market, regulatory, political and economic developments.	Yes	Yes

Small Company Risk. Small company stocks present above-average risks. This means that when stock prices decline overall, the Funds may decline more than a broad-based securities market index. These companies usually offer a smaller range of products and services than larger companies. Smaller companies may also have limited financial resources and may lack management depth. As a result, stocks issued by smaller companies may be less liquid and fluctuate in value more than the stocks of larger, more established companies.	Yes	Yes

Value Style Risk. Since the Funds follow a value investment style, there is the risk that the value style may be out of favor for a period of time, that the market will not recognize a security’s intrinsic value for a long time or that a stock judged to be undervalued may actually be appropriately priced.	Yes	Yes

Market Risk. The securities markets are volatile and the market prices of the Funds’ securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Funds fall, the value of your investment in the Funds will decline.	Yes	Yes

Management Risk. The value of your investment may decrease if judgments by the subadviser about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements are incorrect.	Yes	Yes

Real Estate Investment Trust (REIT) Risk. 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 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 must also meet certain requirements under the Code to avoid entity level tax and be eligible to pass-through certain tax attributes of their income to shareholders. REITs are consequently subject to the risk of failing to meet these requirements for favorable tax treatment and of failing to maintain their exemptions from registration under the 1940 Act. REITs are subject to the risks of changes in the Code affecting	Yes	Yes

their tax status. REITs (especially mortgage REITs) are subject to interest rate risks. Small capitalization REITs may have limited financial resources, may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities. REITs may incur significant amounts of leverage. The Funds’ investments in REITs may subject a Fund to duplicate management and/or advisory fees.

Foreign Securities Risk. The Prudential Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Prudential Fund may invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Prudential Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities.

The Prudential Fund may invest in the securities of foreign issuers in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. The Prudential Fund may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the U.S. and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.

Yes

No, although the Target Portfolio may invest in foreign equity securities, such transactions are not a principal risk of the Target Portfolio.

Comparison of Other Policies

Temporary Defensive Investments. In response to adverse market, economic or political conditions, each Fund may take a temporary defensive position and invest up to 100% of its assets in money market instruments, including short-term obligations of, or securities guaranteed by, the U.S. Government, its agencies or instrumentalities or in high-quality obligations of domestic or foreign banks and corporations, and may hold up to 100% of its assets in cash or cash equivalents. Investing heavily in these securities is inconsistent with and limits each Fund’s ability to achieve its investment objectives, but may help to preserve each Fund’s assets.

Investments in Affiliated Funds. Each Fund may also invest its assets in affiliated money market funds or open-end short-term bond funds. The affiliated funds are registered investment companies under the 1940 Act. Each Fund can invest its free cash balances in the affiliated funds to obtain income on short-term cash balances while awaiting attractive investment opportunities, to provide liquidity in preparation for anticipated redemptions or for defensive purposes. Such an investment could also allow the Funds to obtain the benefits of a more diversified portfolio than might otherwise be available through direct investments in those asset classes, and will subject the Funds to the risks associated with the particular asset class. As a shareholder in the affiliated funds, each Fund will pay its proportional share of the expenses of the affiliated funds. The affiliated funds, however, do not pay a management fee to the Manager. Thus, shareholders of each Fund are not paying management fees for each Fund as well as the affiliated funds. The investment results of the portions of each Fund’s assets invested in the affiliated funds will be based on the investment results of the affiliated funds.

Money Market Instruments. Each Fund may hold cash and/or invest in money market instruments, including commercial paper of a US or foreign company, foreign government securities, certificates of deposit, bankers’ acceptances, time deposits of domestic and foreign banks, and obligations issued or guaranteed by the US Government or its agencies or instrumentalities. These obligations may be US dollar-denominated or denominated in a foreign currency. Money market instruments typically have a maturity of one year or less as measured from the date of purchase.

Exchange-Traded Funds (“ETFs”). Each Fund may invest in securities of ETFs, subject to certain limits on investment in securities of non-affiliated investment companies. Securities of ETFs represent shares of ownership in either a mutual fund or unit investment trust that generally holds a portfolio of securities that may include bonds, common stocks, other instruments or a combination of all three and which is designed to provide exposure to the market represented by the portfolio of those securities. Such holdings are subject to any management fees of the mutual fund or unit investment trust. The Target Portfolio may invest up to 10% of total assets in ETFs, while the Prudential Fund does not have a specific limit with respect to ETF investments.

Repurchase Agreements. Each Fund may use repurchase agreements, where a party agrees to sell a security to a Fund and then repurchases it at an agreed-upon price at a stated time. This creates a fixed return for a Fund, and is, in effect, a loan by a Fund. Repurchase agreements are used for cash management purposes only.

Convertible Securities. Each Fund may invest in convertible securities, which include convertible preferred stocks, nonconvertible preferred stocks, and debt securities of a corporation that may be converted into underlying shares of common stock either because they have warrants attached or otherwise permit the holder to buy common stock of the corporation at a set price. Convertible

securities provide an income stream (usually lower than non-convertible bonds) and give investors opportunities to participate in the capital appreciation of the underlying common stock. Convertible securities typically offer greater potential for appreciation than nonconvertible debt securities.

Derivative Strategies. Each Fund may use various derivative strategies to try to improve its returns. Each Fund may also use hedging techniques to try to protect its assets. The Funds cannot guarantee that these strategies and techniques will work, that the instruments necessary to implement these strategies and techniques will be available, or that it will not lose money. The use of derivatives—such as futures, foreign currency forward contracts, options on futures, indexed and inverse floating rate securities and various types of swaps—involves costs and can be volatile. With derivatives, we try to predict if the underlying investment—a security, market index, currency, interest rate or some other benchmark—will go up or down at some future date. The Funds may use derivatives to try to reduce risk or to increase return consistent with its overall investment objective. The Funds will consider other factors (such as cost) in deciding whether to employ any particular strategy or technique, or use any particular instrument. Any derivatives we may use may not match or offset the Funds’ underlying position and this could result in losses to a Fund that would not otherwise have occurred. Derivatives that involve leverage could magnify losses. When the Funds use derivative strategies, it designates certain assets as segregated or otherwise covers its exposure, as required by the rules of the SEC.

Futures Contracts and Related Options. Each Fund may purchase and sell financial futures contracts and related options on financial futures. A futures contract is an agreement to buy or sell a set quantity of an underlying asset at a future date, or to make or receive a cash payment based on the value of a securities index, or some other asset, at a stipulated future date. The terms of futures contracts are standardized. In the case of a financial futures contract based upon a broad index, there is no delivery of the securities comprising the underlying index, margin is uniform, a clearing corporation or an exchange is the counterparty and a Fund makes daily margin payments based on price movements in the index. An option gives the purchaser the right to buy or sell securities or currencies, or in the case of an option on a futures contract, the right to buy or sell a futures contract in exchange for a premium.

Foreign Currency Forward Contracts. Each Fund may enter into foreign currency forward contracts to protect the value of its assets against future changes in the level of foreign exchange rates. A foreign currency forward contract is an obligation to buy or sell a given currency on a future date and at a set price or to make or receive a cash payment based on the value of a given currency at a future date. Delivery of the underlying currency is expected, the terms are individually negotiated, the counterparty is not a clearing corporation or an exchange, and payment on the contract is made upon delivery, rather than daily.

Swap Transactions. The Prudential Fund may enter into swap transactions. Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. There are various types of swaps, including but not limited to credit default swaps, interest rate swaps, total return swaps and index swaps.

Swap Options. The Prudential Fund may enter into swap options. A swap option is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms.

Options on Securities and Financial Indexes. The Prudential Fund may purchase and sell put and call options on securities and financial indexes traded on US or foreign securities exchanges, on NASDAQ or in the over-the-counter market. An option gives the purchaser the right to buy or sell securities in exchange for a premium. A Fund will sell only covered options.

US Government Securities. The Funds may invest in securities issued or guaranteed by the US Government or by an agency or instrumentality of the US Government. Some US Government securities are backed by the full faith and credit of the United States, which means that payment of principal and interest is guaranteed but market value is not. Some are supported only by the credit of the issuing agency or instrumentality and depend entirely on the agency or instrumentality’s own resources to repay their debt and are subject to the risk of default like private issuers.

Debt Obligations. The Funds may invest in debt obligations for their appreciation potential. The Prudential Fund may invest in debt obligations issued by US and foreign companies that are rated at least A by S&P or by Moody’s or the equivalent by another major rating service. The Funds may also invest in asset-backed securities from time to time.

Short Sales. The Prudential Fund may make short sales of a security. This means that the Prudential Fund may sell a security that it does not own, which it may do, for example, when the investment subadviser thinks the value of the security will decline. The

Prudential Fund generally borrows the security to deliver to the buyers in a short sale. The Prudential Fund must then replace the borrowed security by purchasing it at the market price at the time of replacement. Short sales involve costs and risks, including potentially unlimited losses. The Prudential Fund must pay the lender any dividends or interest that accrues on the security it borrows, and the Prudential Fund will lose money if the price of the security increases between the time of the short sale and the date when the Prudential Fund replaces the borrowed security. The Prudential Fund may make short sales “against the box.” In a short sale against the box, at the time of sale, the Prudential Fund owns or has the right to acquire the identical security at no additional cost through conversion or exchange of other securities it owns. When selling short against the box, the Prudential Fund gives up the opportunity for capital appreciation in the security.

When-Issued and Delayed-Delivery Securities. The Prudential Fund may purchase securities, including money market obligations, bonds or other obligations, on a when-issued, delayed-delivery or forward commitment basis. When the Prudential Fund makes this type of purchase, the price and interest rate are fixed at the time of purchase, but delivery and payment for the obligations take place at a later time. The Prudential Fund does not earn interest income until the date the obligations are expected to be delivered. These types of investments potentially leverage the Prudential Fund, which could magnify losses. The Prudential Fund will segregate liquid assets, marked-to-market daily, with a value equal to any such investments.

Reverse Repurchase Agreements and Dollar Rolls. The Target Portfolio may enter into reverse repurchase agreements. A reverse repurchase agreement involves the sale of a portfolio-eligible security by a fund, coupled with its agreement to repurchase the instrument at a specified time and price. Reverse repurchase agreements are considered a borrowing by a fund.

The Target Portfolio also may enter into dollar rolls. In a dollar roll, a fund sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type and coupon) securities on a specified future date from the same party. During the roll period, the Target Portfolio forgoes principal and interest paid on the securities. The Target Portfolio is compensated by the difference between the current sale price and the forward price for the future purchase (often referred to as the drop) as well as by the interest earned on the cash proceeds of the initial sale. The Target Portfolio will establish a segregated account in which it will maintain cash or other liquid assets, marked-to-market daily, having a value equal to its obligations in respect of dollar rolls.

Dollar rolls involve the risk that the market value of the securities retained by the Target Portfolio may decline below the price of the securities the Target Portfolio has sold but is obligated to repurchase under the agreement. In the event the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, the Target Portfolio’s use of the proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Target Portfolio’s obligation to repurchase the securities. Cash proceeds from dollar rolls may be invested in cash or other liquid assets.

Investment Restrictions

Neither Fund may change a fundamental investment restriction without the prior approval of its shareholders. Except as noted, each Fund has adopted substantially similar fundamental investment restrictions, whereby it shall not:

1. Issue senior securities, borrow money or pledge its assets, except that (1) the Target Portfolio may borrow from banks or through dollar rolls or reverse repurchase agreements up to 33 1/3% of the value of its total assets (calculated when the loan is made) for temporary, extraordinary or emergency purposes, to take advantage of investment opportunities or for the clearance of transactions and may pledge its assets to secure such borrowings and (2) the Prudential Fund may issue senior securities or borrow money or pledge its assets as permitted to do so by exemptive order, SEC release, no-action letter or similar relief or interpretations (collectively, “the 1940 Act Laws, Interpretations and Exemptions”). For purposes of this investment restriction, under the 1940 Act, each Fund can borrow money from a bank provided that immediately after such borrowing there is asset coverage of at least 300% for all borrowings. If the asset coverage falls below 300%, a Fund must, within three business days, reduce the amount of its borrowings to satisfy the 300% requirement.

· With regards to the Target Portfolio, for purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, forward foreign currency exchange contracts and collateral arrangements relating thereto, and collateral arrangements with respect to futures contracts and options thereon and with respect to the writing of options and obligations of the Trust to Trustees pursuant to deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security subject to this restriction.

· With regards to the Prudential Fund, for purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, reverse repurchase agreements, dollar rolls, short sales, derivative and hedging transactions such as interest rate swap transactions, and collateral arrangements with respect thereto, and transactions similar to any of the foregoing and collateral arrangements with respect thereto, and obligations

of the Prudential Fund to Trustees pursuant to deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security.

2. Purchase any security if as a result 25% or more of a Fund’s total assets would be invested in the securities of issuers having their principal business activities in the same industry, except that this limitation does not apply to securities issued or guaranteed by the U.S. government, its agencies or instrumentalities.

· For the Prudential Fund, this exception also does not apply for temporary defensive purposes.

3. Act as underwriter except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws. Each Fund may purchase restricted securities without limit.

4. Buy or sell real estate.

· Except, with regards to the Target Portfolio, the Target Portfolio may purchase and sell mortgaged-backed securities, securities collateralized by mortgages, securities which are secured by real estate, securities of companies which invest or deal in real estate and publicly traded securities of real estate investment trusts. In addition, for the Target Portfolio, this restriction applies to interests in real estate.

· Except, with regards to the Prudential Fund, investment in securities of issuers that invest in real estate and investments in mortgage-backed securities, mortgage participations or other instruments supported or secured by interests in real estate are not subject to this limitation, and except that the Prudential Fund may exercise rights relating to such securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.

Whenever any fundamental investment policy or investment restriction states a maximum percentage of a Fund’s assets, it is intended that if the percentage limitation is met at the time the investment is made, a later change in percentage resulting from changing total or net asset values will not be considered a violation of such policy. However, in the event that a Fund’s asset coverage for borrowings falls below 300%, a Fund will take prompt action to reduce its borrowings, as required by the Investment Company Act Laws, Interpretations and Exemptions.

The Target Portfolio also has the following fundamental policies under which it may not:

· Purchase securities on margin (but the Target Portfolio may obtain such short-term credits as may be necessary for the clearance of transactions); provided that the deposit or payment by the Target Portfolio of initial or variation margin in connection with options or futures contracts is not considered the purchase of a security on margin.

· Make short sales of securities, or maintain a short position if, when added together, more than 25% of the value of the Fund’s net assets would be (1) deposited as collateral for the obligation to replace securities borrowed to effect short sales and (2) allocated to segregated accounts in connection with short sales. Short sales “against-the-box” are not subject to this limitation.

· Purchase any security (other than obligations of the US Government, its agencies and instrumentalities) if, as a result, with respect to 75% of its total assets, more than 5% of the Target Portfolio’s total assets (determined at the time of investment) would then be invested in securities of a single issuer, except as permitted by Section 5(b)(1)of the 1940 Act or any successor provision on the requirements applicable to diversified investment companies.

· Make investments for the purpose of exercising control or management.

· Make loans, except through (1) repurchase agreements and (2) loans of portfolio securities limited to 33 1/3% of the value of the Target Portfolio’s total assets. For purposes of this limitation on securities lending, the value of the Target Portfolio’s total assets includes the collateral received in the transactions.

· Purchase more than 10% of all outstanding voting securities of any one issuer.

The Prudential Fund also has the following fundamental policies where it may not:

· Purchase the securities of any issuer if, as a result, the Prudential Fund would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as each may be amended from time to time except to the extent that the Prudential Fund may be permitted to do so by the 1940 Act Laws, Interpretations and Exemptions.

· Buy or sell physical commodities or contracts involving physical commodities. The Prudential Fund may purchase and sell (i) derivative, hedging and similar instruments such as financial futures and options thereon, and (ii) securities or instruments backed by, or the return from which is linked to, physical commodities or currencies, such as forward currency exchange contracts, and the Prudential Fund may exercise rights relating to such instruments, including the right to enforce security interests and to hold physical commodities and contracts involving physical commodities acquired as a result of the Prudential Fund’s ownership of instruments supported or secured thereby until they can be liquidated in an orderly manner.

· ThePrudential Fund may make loans, including loans of assets of the Prudential Fund, repurchase agreements, trade claims, loan participations or similar investments, or as permitted by the 1940 Act Laws, Interpretations and Exemptions. The acquisition of bonds, debentures, other debt securities or instruments, or participations or other interests therein and investments in government

obligations, commercial paper, certificates of deposit, bankers’ acceptances or instruments similar to any of the foregoing will not be considered the making of a loan, and is permitted if consistent with the Prudential Fund’s investment objective.

As a non-fundamental operating policy, each Fund may not invest in the securities of other investment companies, except that subject to certain restrictions, each Fund may purchase securities of other investment companies in the open market involving customary brokerage commissions.

From time to time, the Target Portfolio may voluntarily participate in actions (for example, rights offerings, conversion privileges, exchange offers, credit event settlements, etc.) where the issuer or counterparty offers securities or instruments to holders or counterparties, such as the Target Portfolio, and the acquisition is determined to be beneficial to the Target Portfolio’s shareholders (“Voluntary Action”). Notwithstanding any percentage investment limitation listed under the investment restrictions above or any percentage investment limitation of the 1940 Act or rules thereunder, if the Target Portfolio has the opportunity to acquire a permitted security or instrument through a Voluntary Action, and the Target Portfolio will exceed a percentage investment limitation following the acquisition, it will not constitute a violation if, prior to the receipt of the securities or instruments and after announcement of the offering, the Target Portfolio sells an offsetting amount of assets that are subject to the investment limitation in question at least equal to the value of the securities or instruments to be acquired.

As a matter of non-fundamental operating policy, the Prudential Fund will not purchase rights if as a result the Prudential Fund would then have more than 5% of its assets (determined at the time of investment) invested in rights.

PIP5 will provide 60 days’ prior written notice to shareholders of a change in the Prudential Fund’s non-fundamental policy of investing a certain percentage of its “investable assets” (that is, net assets plus borrowings for investment purposes) in the type of investments suggested by the Prudential Fund’s name.

Federal Income Tax Considerations

Each Fund is treated as a separate entity for federal income tax purposes. Each Fund has qualified and elected to be treated as a “regulated investment company” under Subchapter M of the Code, and intends to continue to so qualify in the future. As a regulated investment company, a Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to certain loans of stock and securities, gains from the sale or other disposition of stock, securities or foreign currency and other income (including but not limited to gains from options, futures, and forward contracts) derived with respect to its business of investing in such stock, securities or foreign currency; and (b) diversify its holdings so that, at the end of each quarter of its taxable year, (i) at least 50% of the value of the Fund’s total assets is represented by cash, cash items, U.S. Government securities, securities of other regulated investment companies, and other securities limited, in respect of any one issuer, to an amount not greater than 5% of the Fund’s total assets, and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities of any one issuer (other than U.S. government securities or securities of other regulated investment companies) or two or more issuers that are controlled by the Fund and are determined, pursuant to Department of the Treasury regulations, to be in the same, similar or related trades or businesses. As a regulated investment company, a Fund (as opposed to its shareholders) will not be subject to federal income taxes on the net investment income and capital gain that it distributes to its shareholders, provided that at least 90% of its net investment income and realized net short-term capital gain in excess of net long-term capital loss for the taxable year is distributed in accordance with the Code’s distribution requirements.

The Reorganization may lead to various tax consequences, which are discussed under the caption “Certain Federal Tax Consequences of the Reorganization.”

Comparison of Organizational Structures

Description of Shares and Organizational Structure

The Prudential Fund and the Target Portfolio each operate pursuant to an Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”) and By-Laws. The Prudential Fund and the Target Portfolio are each governed by a Board of Trustees. We refer to each Board of Trustees as a “Board” and sometimes refer separately to “Trustees.” We have summarized below certain rights of shareholders of each of the Prudential Fund and the Target Portfolio to highlight differences in the governing documents. The following is only a summary and is not a complete description of the respective governing documents. You should refer to the Declaration of Trust and By-Laws of PIP5 and the Trust for more complete information.

The Prudential Fund

The Prudential Fund is a series of PIP5. PIP5 was organized as a statutory trust in 1999 under the laws of Delaware. PIP5 is a trust fund of the type commonly known as a “statutory trust.” Prior to February 16, 2010, PIP5 was known as Strategic Partners Style

Specific Funds. PIP5 is comprised of three series: the Prudential Fund, Prudential Jennison Conservative Growth Fund and Prudential Jennison Rising Dividend Fund.

The Strategic Partners Large Capitalization Value Fund, which was a series of PIP5, was reorganized (merged) into the Prudential Jennison Value Fund as of March 2, 2007.

PIP5 is authorized to issue an unlimited number of shares of beneficial interest, $.001 par value per share, currently divided into three series and six classes, designated Class A, Class B, Class C, Class Q, Class R and Class Z shares. Each series of PIP 5 offers only certain of these share classes, as identified in each series’ prospectus. Each class of shares represents an interest in the same assets of a series and is identical in all respects except that (1) each class is subject to different sales charges and distribution and/or service fees (except for Class Q and Class Z, which are not subject to any sales charges and distribution and/or service fees), which may affect performance, (2) each class has exclusive voting rights on any matter submitted to shareholders that relates solely to its arrangement and has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class, (3) each class has a different exchange privilege, (4) Class B shares have a conversion feature, and (5) Class Q shares are offered exclusively for sale to a limited group of investors. In accordance with PIP5’s Declaration of Trust, the Trustees may authorize the creation of additional series and classes within such series, with such preferences, privileges, limitations and voting and dividend rights as the Trustees may determine. The voting rights of the shareholders of a series or class can be modified only by the vote of shareholders of that series or class.

Shares of PIP5, when issued, are fully paid, nonassessable, fully transferable and redeemable at the option of the holder. Shares are also redeemable at the option of PIP5 under certain circumstances. Each share of each class is equal as to earnings, assets and voting privileges, except as noted above, and each class of shares (with the exception of Class Q and Class Z shares, which are not subject to any distribution or services fees) bears the expenses related to the distribution of its shares. Except for the conversion feature applicable to the Class B shares, there are no conversion, preemptive or other subscription rights. In the event of liquidation, each share of a series is entitled to its portion of all of the series’ assets after all debt and expenses of the series have been paid. Since Class B and Class C shares generally bear higher distribution expenses than Class A shares, and Class Q and Class Z shares which are not subject to any distribution and/or service fees, the liquidation proceeds to shareholders of those classes are likely to be lower than to Class A and Class Q shareholders.

PIP5 does not intend to hold annual meetings of shareholders unless otherwise required by law. PIP5 will not be required to hold meetings of shareholders unless, for example, the election of Trustees is required to be acted on by shareholders under the 1940 Act. Shareholders have certain rights, including the right to call a meeting upon the vote of 10% of PIP5’s outstanding shares for the purpose of voting on the removal of one or more Trustees or to transact any other business. PIP5 will render assistance to those shareholders who call such a meeting.

Under the Declaration of Trust, the Trustees may authorize the creation of additional series of shares (the proceeds of which would be invested in separate, independently managed portfolios with distinct investment objectives and policies and share purchase, redemption and net asset value procedures) with such preferences, privileges, limitations and voting and dividend rights as the Trustees may determine. All consideration received by PIP5 for shares of any additional series, and all assets in which such consideration is invested, would belong to that series (subject only to the rights of creditors of that series) and would be subject to the liabilities related thereto. Under the 1940 Act, shareholders of any additional series of shares would normally have to approve the adoption of any advisory contract relating to such series and of certain changes in the investment policies related thereto.

The Target Portfolio

The Target Portfolio is a series of the Trust, an open-end management investment company organized as a Delaware statutory trust.

The shareholders of the Target Portfolio are each entitled to a full vote for each full share of beneficial interest (par value $.001 per share) held (and fractional votes for fractional shares). Shares of the Target Portfolio are entitled to vote as a class only to the extent required by the provisions of the 1940 Act or when the matter involves any action that the Trustees have determined will affect only the interests of one or more classes of shares of the Target Portfolio. Pursuant to the 1940 Act, shareholders of the Target Portfolio must approve changes in certain investment policies of the Target Portfolio. In accordance with the Trust’s Declaration of Trust, the Board may authorize the creation of additional series of shares and classes within such series, with such preferences, privileges, limitations and voting and dividend rights as the Trustees may determine.

Portfolio is entitled to its portion of all of its assets after all debts and expenses have been paid. The Trust’s shares do not have cumulative voting rights for the election of Trustees.

The Trust does not intend to hold annual meetings of shareholders unless otherwise required by law. The Trust will not be required to hold meetings of shareholders unless, for example, the election of Trustees is required to be acted on by shareholders under the 1940 Act. Shareholders have certain rights, including the right to call a meeting upon a vote of 10% or more of the Trust’s outstanding shares for the purpose of voting on the removal of one or more Trustees or to transact any other business. The Trust will render assistance to those shareholders who call such a meeting.

Shareholder Meetings

Place of Meeting. PIP5 and the Trust may hold shareholder meetings at any place in the United States set by the respective Board.

Record Date. Each Board has the sole power to set a record date, which must be at or after the close of business on the day the record date is fixed, and may not be more than 90 or fewer than 10 days prior to the applicable meeting of shareholders.

Annual Meetings. PIP5 and the Trust are not required to hold annual meetings of their shareholders in any year in which the election of Trustees is not required to be acted upon under the 1940 Act.

Quorum. The presence, in person or by proxy, of shareholders entitled to cast one-third of all the votes entitled to be cast of the meeting, as required by federal law, including the 1940 Act, shall constitute a quorum for the Funds.

Adjournments. PIP5 and the Trust can adjourn a meeting of shareholders without notice thereof if the time and date of the meeting are announced at the meeting and the adjourned meeting is held within a reasonable time after the date of the original meeting.

Amendments to Declaration of Trust

PIP5’s and the Trust’s Boards are each entitled to amend the respective Declaration of Trust without shareholder approval, except that shareholders have the right to vote on (1) any amendment that is required to be approved by shareholders pursuant to the 1940 Act and (2) any amendment submitted to the shareholders by the Board at its discretion.

Amendment of By-Laws

PIP5’s and the Trust’s By-Laws can be amended by majority vote of the shareholders or of the Board; provided, however, that no By-Law may be amended, adopted or repealed by the Board if such amendment, adoption or repeal is required by applicable law to be submitted to a vote of shareholders.

Board of Trustees

Number of Members. PIP5’s number of Trustees shall be at least one (1) and no more than fifteen (15) as determined from time to time under the Declaration of Trust. The Trust’s number of Trustees shall be at least two (2) and no more than fifteen (15) and as determined from time to time under the Declaration of Trust.

Removal of Board Members. The Trustees of PIP5 and the Trust may remove any Trustee with or without cause at any time by an instrument signed by at least two-thirds of the number of Trustees prior to such removal, and any Trustee may be removed at any meeting of shareholders by a vote of two-thirds of the outstanding shares.

Board Vacancies. A vacancy on the Board of PIP5 and the Trust may be filled by a majority of the Board; provided that in the event that less than the majority of the Trustees holding office have been elected by the shareholders, to the extent required by the 1940 Act, but only to such extent, the Trustees then in office shall call a shareholders’ meeting for the election of Trustees.

Limitation on Liability of Trustees and Officers. The Declarations of Trust of PIP5 and the Trust each provide that a Trustee, when acting in such capacity, shall not be personally liable to any person for any act, omission or obligation of PIP5 or the Trust, of such Trustee or of any other Trustee, and shall be liable to PIP5 or the Trust and its shareholders solely for such Trustee’s own willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and shall not be liable for any neglect or wrongdoing of any officer, agent, employee, manager or principal underwriter of PIP5 or the Trust.

Indemnification of Directors/Trustees, Officers, Employees and Agents. PIP5’s and the Trust’s By-Laws each provide that PIP5 and the Trust shall indemnify Trustees, officers, employees and agents to the fullest extent permitted by law except that no indemnification shall be provided where there has been an adjudication of willful misfeasance, bad faith, gross negligence or reckless disregard of duties (“disabling conduct”), or, with respect to any proceeding disposed of without an adjudication, unless there has been a determination that the indemnitee did not engage in disabling conduct by the court or other body before which the proceeding was

brought, by a majority of disinterested Trustees or by written legal opinion of independent legal counsel. Additionally, under the 1940 Act, such indemnification provisions may not cover willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of one’s office.

Liability of Shareholders

PIP5’s and the Trust’s Declarations of Trust provides that if any shareholder or former shareholder is exposed to liability relating to his or her status as a shareholder, and not because of the actions or omissions of such person or entity, such person or entity shall be entitled to be held harmless from and indemnified out of the assets of the particular series of PIP 5 or the Trust of which such person or entity is or was a shareholder and in relation to which such liability arose against all loss and expense arising from such liability.

Under Delaware law, the Target Portfolio shareholders generally have no personal liability for the debts or obligations of the Prudential Fund as a result of their status as shareholders.

Termination and Dissolution

PIP5 and the Trust may be dissolved at any time by the Board by written notice to the shareholders, and any series or class thereof may be terminated at any time by the Board by written notice to the shareholders of such series or class.

Management of the Funds

Under investment management agreements with each of PIP5 and the Trust on behalf of the Prudential Fund (the “Prudential Fund Management Agreement”) and the Target Portfolio (the “Target Portfolio Management Agreement”), PI, located at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey, manages the Funds’ investment operations and administers their business affairs and is responsible for supervising QMA, the subadviser of each of the Funds. Each of the Prudential Fund Management Agreement and the Target Portfolio Management Agreement is a “Management Agreement” and together are referred to as the “Management Agreements.” Pursuant to the Management Agreements, PI, subject to the supervision of the Boards and in conformity with the stated policies of the Funds, manages both the investment operations of the Funds and the composition of the Funds’ portfolios, including the purchase, retention, disposition and loan of securities and other assets. In connection therewith, the Manager is obligated to keep certain books and records of the Funds. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Funds. The Manager will continue to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements. PI will review the performance of the investment subadvisers and make recommendations to the Board with respect to the retention of investment subadvisers and the renewal of contracts. The Manager also administers the Funds’ corporate affairs and, in connection therewith, furnishes the Funds with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Funds’ custodian and transfer agent. The management services of PI to the Funds are not exclusive under the terms of the Management Agreements and PI is free to, and does, render management services to others.

PI and its predecessors have served as manager or administrator to investment companies since 1987. PI is a wholly owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). Founded in 1875, Prudential Financial is a publicly held financial services company primarily engaged in providing life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services through its wholly-owned subsidiaries. As of December 31, 2014, PI had total assets under management of approximately $251.6 billion.

PI and the Target Portfolio operate under an exemptive order (the “Order”) from the SEC that generally permits PI to enter into or amend agreements with unaffiliated investment subadvisers (“unaffiliated subadvisers”) and with certain subadvisers that are affiliates of PI (“affiliated subadvisers”) without obtaining shareholder approval. PI also has the discretion to terminate any subadviser and allocate and reallocate the Funds’ assets among any other subadvisers (including terminating an unaffiliated subadviser and replacing it with an affiliated subadviser). PI, subject to the approval of the Board, is also able to materially amend an existing subadvisory agreement with any such subadviser without shareholder approval. This authority is subject to certain conditions, including the requirement that the Board must approve any new or amended agreements with an unaffiliated or affiliated investment subadviser. Shareholders of the Target Portfolio still have the right to terminate these agreements at any time by a vote of the majority of outstanding shares of the Target Portfolio. The Target Portfolio will notify shareholders of any new investment subadvisers engaged or material amendments to subadvisory agreements made pursuant to the Order.

Subadvisers and Portfolio Managers.

The Prudential Fund and the Target Portfolio

QMA is the subadviser for both the Target Portfolio and the Prudential Fund.

QMA is a wholly-owned subsidiary of Prudential Investment Management, Inc. QMA manages equity and asset allocation portfolios for institutional and retail clients. As of September 30, 2014, QMA managed approximately $112 billion in assets. The address of QMA is Gateway Center Two, 100 Mulberry Street, Newark, New Jersey 07102.

QMA typically follows a team approach in the management of its portfolios. QMA uses a disciplined investment process based on fundamental data, driven by its quantitative investment models. QMA incorporates into its investment process insights gained from its original research and the seasoned judgment of its portfolio managers and analysts. The members of QMA’s portfolio management team with primary responsibility for Fund management are listed below.

John P. Leib, CFA, is a Principal and Portfolio Manager for the QMA Value Equity Team. He joined a predecessor unit in 1987 and has been a portfolio manager since 1988. His responsibilities include portfolio management, analysis, and involvement in the research effort. Mr. Leib earned a BA in Economics and Mathematics from Hamilton College and an MBA in Finance from New York University and holds the Chartered Financial Analyst (“CFA”) designation. Mr. Leib is a Portfolio Manager for the Prudential Fund, but not for the Target Portfolio.

Mitchell Stern, PhD, is a Managing Director for QMA and co-Head of Research and Portfolio Management for Value Equity. Since joining QMA in 1997, Mr. Stern has held multiple roles including leading value research and managing large-cap. small-cap, long-short, and derivative portfolios. Previously, he was the lead researcher for Dreman Value Management. Earlier in his career, Mr. Stern was an Assistant Professor of Finance at the University of Tennessee and Fairfield University. Mr. Stern is a Portfolio Manager for both the Prudential Fund and the Target Portfolio.

Stephen Courtney is a Managing Director for QMA and co-Head of Research and Portfolio Management for Value Equity. Prior to joining QMA, Mr. Courtney was a Director at ClearBridge Investments and its predecessor organizations, where he served as a research analyst and portfolio manager for 26 years. He earned a BA in Political Science from Boston College. Mr. Courtney is a Portfolio Manager for both the Prudential Fund and the Target Portfolio.

Deborah D. Woods is a Principal and Portfolio Manager for the QMA Value Equity Team. She joined a predecessor organization in 1979, and has been associated with the value team since 1984. Her responsibilities include portfolio management, analysis and involvement in the research effort. Ms. Woods began her career at Prudential Financial as an industry analyst. She earned a BA in History from Wellesley College. Ms. Woods is a Portfolio Manager for both the Prudential Fund and the Target Portfolio.

Robert Leung, CFA, is a Senior Associate and Portfolio Manager for the QMA Value Equity Team and has been a member of the team since 1996. His responsibilities include portfolio management, analysis, and involvement in the research effort. Mr. Leung began with the team as a Portfolio Analyst/Research Assistant. He earned a BA in Economics from Union College and holds the CFA designation. Mr. Leung is a Portfolio Manager for both the Prudential Fund and the Target Portfolio.

Investment Management Fees

Each of the Prudential Fund Management Agreement and the Target Portfolio Management Agreement provide that PI will not be liable for any error of judgment by PI or for any loss suffered by a Fund in connection with the matters to which the Management Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence or reckless disregard of duties. Each Management Agreement provides that it will terminate automatically, if assigned (as defined in the 1940 Act), and that it may be terminated without penalty by either PI or a Fund by the Board or by vote of a majority of the outstanding voting securities of a Fund (as defined in the 1940 Act), upon not more than 60 days nor less than 30 days written notice. Each Management Agreement will continue in effect for a period of more than two years from the date of execution only so long as such continuance is specifically approved at least annually in accordance with the requirements of the 1940 Act.

Fees payable under each Management Agreement are computed daily and paid monthly. The investment management fee rate payable to PI for each Fund, as well as the investment management fees paid by each Fund to PI for the past fiscal periods set forth below.

The Prudential Fund

Management Fee Rate: 0.70% of average daily net assets.

Fees Paid to PI:

Fiscal year ended July 31, 2014	$	1,226,270
Fiscal year ended July 31, 2013	$	1,032,063
Fiscal year ended July 31, 2012	$	953,782

The Target Portfolio

Management Fee Rate: 0.60% up to $2 billion of average daily net assets, and 0.575% over $2 billion of average daily net assets. Prior to January 15, 2015, the management fee rate for the Target Portfolio was 0.60% of average daily net assets. During 2014, the Target Portfolio changed its fiscal year-end from October 31st to July 31st. The figures shown below are for the fiscal period from November 1, 2013 through July 31, 2014, and the fiscal years ended October 31, 2013, 2012 and 2011.

Fees Paid to PI:

Fiscal period ended July 31, 2014	$	8,604,472
Fiscal year ended October 31, 2013	$	8,655,977
Fiscal year ended October 31, 2012	$	6,457,730
Fiscal year ended October 31, 2011	$	5,615,636

If shareholders of the Prudential Fund approve the Plan, upon implementation of the Reorganization, shareholders’ net expenses are not expected to increase as a result of the implementation of the Reorganization due to PI’s waiver and/or reimbursement of certain fees. PI has contractually agreed to waive and/or reimburse up to 0.01% of its management fees on the Target Portfolio on an annualized basis for the period from the closing date (as defined below) of the Reorganization through November 30, 2016, to the extent that the Target Portfolio’s net operating expenses (exclusive of taxes, interest, distribution (12b-1) fees, and certain extraordinary expenses) exceed 0.68% of the Target Portfolio’s average daily net assets on an annualized basis as a result of the Reorganization.

Distribution Plan

PIMS serves as the principal underwriter and distributor for both Funds. Each of the Trust and the Prudential Fund have adopted a Distribution and Service Plan (commonly known as a 12b-1 Plan) for each class of shares (other than Class Q, Class T and Class Z shares) to compensate PIMS for its services and expenses in distributing shares and servicing shareholder accounts. Under the 12b-1 Plan for each share class, each Fund is authorized to pay PIMS at the following annual rates for assets attributable to the indicated share class:

Share Class		Rate
Class A		0.30% of the Fund’s average daily net assets attributable to Class A shares

Class B		1.00% of the Prudential Fund’s average daily net assets attributable to Class B shares

Class C		1.00% of the Fund’s average daily net assets attributable to Class C shares

Class Q		None

Class R		0.75% of the Fund’s average daily net assets attributable to Class R shares

Class T		None

Class Z		None

· PIMS has contractually agreed to reduce its distribution and service (12b-1) fees for Class A shares to 0.25% of average daily net assets of the Target Portfolio and the Prudential Fund through November 30, 2016.

· PIMS has contractually agreed to reduce its distribution and service (12b-1) fees for Class R shares to 0.50% of average daily net assets of the Target Portfolio and the Prudential Fund through November 30, 2016.

· Class Q, Class T, and Class Z shares are not subject to any distribution or service fees.

· The Prudential Fund does not offer Class T shares; the Target Portfolio does not currently offer Class B shares or Class Z shares. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio.

Because these fees are paid out of each Fund’s assets on an ongoing basis, these fees may, over time, increase the cost of an investment in that Fund and may be more costly than other types of sales charges.

PIMS may use distribution and service fees received under the 12b-1 Plan to compensate qualified brokers for services provided in connection with the sale of shares and the maintenance of shareholder accounts.

Valuation

In connection with the Reorganization, each whole and fractional share of the Prudential Fund will be exchanged for a whole and fractional share of the same class of the Target Portfolio, except that: (i) Class B shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class A shares of the Target Portfolio; and (ii) each and whole fractional share of Class Z shares of the Prudential Fund will be exchanged for whole and fractional shares of equal dollar value of Class T shares of the Target Portfolio. The share value of a mutual fund—known as the net asset value per share or NAV—is determined by a simple calculation: it is the total value of a Fund (assets minus liabilities) divided by the total number of shares outstanding. For example, if the value of the investments held by fund XYZ (minus its liabilities) is $1,000 and there are 100 shares of fund XYZ owned by shareholders, the price of one share of the fund—or the NAV—is $10 ($1,000 divided by 100). As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio.

The price an investor pays for a Fund share is based on the share value. The share value—known as the net asset value per share or NAV—is determined by subtracting Fund liabilities from the value of Fund assets and dividing the remainder by the number of outstanding shares. NAV is calculated separately for each class. The Funds will compute their NAV once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. Eastern time. For purposes of computing NAV, the Funds will value futures contracts generally 15 minutes after the close of regular trading on the NYSE. The Funds may not compute their NAV on days on which no orders to purchase, sell or exchange shares of the Funds have been received or on days on which changes in the value of the Funds’ portfolio securities do not materially affect NAV. Please see the NYSE website (www.nyse.com) for a specific list of the holidays on which the NYSE is closed.

In accordance with procedures adopted by the Board, the value of investments listed on a securities exchange (other than options on stock and stock indices) are valued at the last sale price on the day of valuation or, if there was no sale on such day, the mean between the last bid and asked prices on such day, or at the bid price on such day in the absence of an asked price, as provided by a pricing service or principal market marker. Securities included on the Nasdaq Market are valued at the Nasdaq Official Closing Price (“NOCP”) on the day of valuation, or if there was no NOCP, at the last sale price. Nasdaq Market Securities for which there was no NOCP or last sale price are valued at the mean between the last bid and asked prices on the day of valuation, or the last bid price in the absence of an asked price. Corporate bonds (other than convertible debt securities) and U.S. government securities that are actively traded in the OTC market, including listed securities for which the primary market is believed by PI in consultation with the subadviser to be OTC, are valued on the basis of valuations provided by an independent pricing agent which uses information with respect to transactions in bonds, quotations from bond dealers, agency ratings, market transactions in comparable securities and various relationships between securities in determining value. Convertible debt securities that are actively traded in the OTC market, including listed securities for which the primary market is believed by PI in consultation with the subadviser to be OTC, are valued at the mean between the last reported bid and asked prices provided by principal market makers.

OTC options on stock and stock indices traded on an exchange are valued at the mean between the most recently quoted bid and asked prices on the respective exchange and futures contracts and options thereon are valued at their last sale prices as of the close of trading on the applicable commodities exchange or if there was no sale on the applicable commodities exchange on such day, at the mean between the most recently quoted bid and asked prices on such exchange or at the last bid price in the absence of an asked price. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents at the current rate obtained from a recognized bank, dealer or independent service, and forward currency exchange contracts are valued at the current cost of covering or offsetting such contacts. Should an extraordinary event, which is likely to affect the value of the security, occur after the close of an exchange on which a portfolio security is traded, such security will be valued at fair value considering factors determined in good faith by the subadviser or PI under procedures established by and under the general supervision of each Funds’ respective Board.

Under the 1940 Act, each Board is responsible for determining in good faith the fair value of securities of the Funds. Portfolio securities for which reliable market quotations are not readily available or for which the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of PI or subadviser (or Valuation Committee or Board) does not represent fair value (“Fair Value Securities”), are valued by the Valuation Committee or Board in consultation with the subadviser or PI, as applicable, including, as applicable, their portfolio managers, traders, research and credit analysts, and legal and compliance personnel, on the basis of the following factors: the nature of any restrictions on disposition of the securities; assessment of the general liquidity/illiquidity 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 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 PI or subadviser regarding the issuer or the markets or industry in which it operates; other analytical data; consistency with valuation of similar securities held by other PI mutual funds; and such other factors as may be determined by the subadviser, PI, Board or Valuation Committee to materially affect the value of the security. Fair Value Securities may include, but are not limited to, the following: certain private placements and restricted securities that do not have an active trading market; securities whose trading has been suspended or for which market quotes are no longer available; debt securities that have recently gone into default and for which

there is no current market; securities whose prices are stale; securities affected by significant events; and securities that the subadviser or PI believes were priced incorrectly.

A “significant event” (which includes, but is not limited to, an extraordinary political or market event) is an event that the subadviser or PI believes with a reasonably high degree of certainty has caused the closing market prices of portfolio securities to no longer reflect their value at the time of the NAV calculation. On a day that PI determines that one or more portfolio securities constitute Fair Value Securities, PI’s Fair Valuation Committee may determine the fair value of these securities if the fair valuation of each security results in a change of less than $0.01 to a Fund’s NAV and/or the fair valuation of the securities in the aggregate results in a change of one half of one percent or more of a Fund’s daily net assets and the Fair Valuation Committee presents these valuations to the Board for its ratification. In the event that the fair valuation of a security results in a NAV change of $0.01 or more per share and/or in the aggregate results in a change of one half of one percent or more of the daily NAV, the Board shall promptly be notified, in detail, of the fair valuation, and the fair valuation will be reported on and presented for ratification at the next regularly scheduled Board meeting. Also, the Board receives, on an interim basis, minutes of the meetings of the Valuation Committee that occur between regularly scheduled Board meetings.

In addition, the Funds use a service provided by a pricing vendor to fair value foreign Fair Value Securities, which are securities that are primarily traded in non-U.S. markets and subject to a valuation adjustment upon the reaching of a valuation “trigger” determined by the Board. The fair value prices of foreign Fair Value Securities reflect an adjustment to closing market prices that is intended to reflect the causal link between movements in the U.S. market and the non-U.S. market on which the securities trade.

The use of fair value pricing procedures involves subjective judgments and it is possible that the fair value determined for a security may be materially different from the value that could be realized upon the sale of that security. Accordingly, there can be no assurance that a Fund could obtain the fair value assigned to a security if it were to sell the security at approximately the same time at which the NAV per share is determined.

Securities for which reliable market quotations are not available or for which the pricing agent or principal market maker does not provide a valuation or provides a valuation that, in the judgment of the Manager, does not present fair value, shall be valued in accordance with the following procedures: At the time of purchase, the duration of the security is to be determined. A Treasury issue (or similar security or index for which market quotes are readily available) (the “Proxy”) of similar duration will then be selected to serve as a Proxy for the price movements of the security. The price of the security will fluctuate exactly as does the Proxy while maintaining the initial price spread constant. The duration of the security will be reviewed once a month by one or more of the portfolio managers, and at any other time that a portfolio manager believes that there may have been a material change in the duration of the security. Should the duration change, another security or index of similar duration will be chosen to serve as proxy, at which point the price spread will be determined. In addition, the validity of the pricing methodology will be monitored by (1) comparing the actual sales proceeds of the security to its price reported by a Fund at the time of the sale and (2) periodically obtaining actual market quotes for the security.

Generally, the Funds’ futures contracts are valued at the close of trading for those contracts (normally 15 minutes after the close of regular trading on the NYSE). If, in the judgment of the subadviser or PI, the closing price of a contract is materially different from the contract price at the NYSE close, a fair value price for the contract will be determined.

If dividends are declared daily, the NAV of each class of shares will generally be the same. It is expected, however, that the dividends, if any, will differ by approximately the amount of the distribution and/or service fee expense accrual differential among the classes.

Although the legal rights of each class of shares of each Fund are substantially identical, the different expenses borne by each class will result in different NAVs and dividends. NAV is calculated separately for each class of each Fund. The NAVs of Class B, Class C, and Class R shares, as applicable, of each Fund’s shares will generally be lower than the NAV of Class A shares of each Fund as a result of the larger distribution-related fee to which Class B, Class C, and Class R shares, as applicable, are subject. It is expected, however, that the NAV of each Fund’s share classes will tend to converge immediately after the recording of dividends, if any, that will differ by approximately the amount of the distribution and/or service fee expense accrual differential among the classes.

Frequent Purchases and Redemptions of Fund Shares

Each Fund seeks to prevent patterns of frequent purchases and redemptions of Fund shares by its shareholders. Frequent purchases and sales of shares of a Fund may adversely affect Fund performance and the interests of long-term investors. When a shareholder engages in frequent or short-term trading, a Fund may have to sell portfolio securities to have the cash necessary to redeem the shareholder’s shares. This can happen when it is not advantageous to sell any securities, so a Fund’s performance may be hurt. When large dollar amounts are involved, frequent trading can also make it difficult to use long-term investment strategies because a Fund cannot predict how much cash it will have to invest. In addition, if a Fund is forced to liquidate investments due to short-term trading activity, it may incur increased brokerage and tax costs. Similarly, a Fund may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading.

Moreover, frequent or short-term trading by certain shareholders may cause dilution in the value of Fund shares held by other shareholders. Funds that invest in foreign securities may be particularly susceptible to frequent trading because time zone differences among international stock markets can allow a shareholder engaging in frequent trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the fund calculates its own share price. A Fund that invests in certain fixed-income securities, such as high-yield bonds or certain asset-backed securities, may also constitute an effective vehicle for a shareholder’s frequent trading strategy.

The Funds do not knowingly accomodate or permit frequent trading, and the Board has adopted policies and procedures designed to discourage or prevent frequent trading activities by shareholders. In an effort to prevent such practices, the Funds’ transfer agent monitors trading activity on a daily basis. The Funds have implemented a trading policy that limits the number of times a shareholder may purchase Fund shares or exchange into a Fund and then sell those shares within a specified period of time (a “round-trip transaction”) as established by the Funds’ Chief Compliance Officer (“CCO”). The CCO is authorized to set and modify the parameters of the trading policy at any time as required to prevent the adverse impact of frequent trading on Fund shareholders.

The CCO has defined frequent trading as one or more round-trip transactions in shares of a Fund within a 30-day period. If this occurs, the shareholder’s account will be subject to a 60-day warning period. If a second round-trip occurs before the conclusion of the 60-day warning period, a trading suspension will be placed on the account by the Funds’ transfer agent that will remain in effect for 90 days. The trading suspension will relate to purchases and exchange purchases (but not redemptions) in a Fund in which the frequent trading occurred. Exceptions to the trading policy will not normally be granted.

Transactions in the Prudential Investments money market funds are excluded from this policy. In addition, transactions by affiliated mutual funds, which are structured as “funds-of-funds,” and invest primarily in other mutual funds within the Prudential Investments fund family, are not subject to the limitations of the trading policy and are not considered frequent or short-term trading.

Each Fund reserves the right to reject or cancel, without prior notice, all additional purchases or exchanges into a Fund by a shareholder who has violated this policy. Moreover, a Fund may direct a broker-dealer or other intermediary to block a shareholder account from future trading in a Fund. The transfer agent will monitor trading activity over $25,000 per account on a daily basis for a rolling 30-day period. If a purchase into a Fund is rejected or cancelled for violations of the trading policy, the shareholder will receive a return of the purchase amount.

If a Fund is offered to qualified plans on an omnibus basis or if Fund shares may be purchased through other omnibus arrangements, such as through a financial intermediary such as a broker-dealer, a bank, an insurance company separate account, an investment adviser, or an administrator or trustee of a retirement plan (“Intermediaries”) that holds your shares in an account under its name, Intermediaries maintain the individual beneficial owner records and submit to a Fund only aggregate orders combining the transactions of many beneficial owners. Each Fund itself generally cannot monitor trading by particular beneficial owners. Each Fund communicates to Intermediaries in writing that it expects the Intermediaries to impose restrictions on transfers by beneficial owners. Intermediaries may impose different or stricter restrictions on transfers by beneficial owners. Consistent with the restrictions described above, investments in a Fund through retirement programs administered by Prudential Retirement will be similarly identified for frequent purchases and redemptions and appropriately restricted.

The transfer agent also reviews the aggregate net flows in excess of $1 million. In those cases, the trade detail is reviewed to determine if any of the activity relates to previously identified policy offenders. In cases of omnibus orders, the Intermediary may be contacted by the transfer agent to obtain additional information. The transfer agent has the authority to cancel all or a portion of the trade if the information reveals that the activity relates to previously identified policy offenders. Where appropriate, the transfer agent may request that the Intermediary block a financial adviser or client from accessing a Fund. If necessary, a Fund may be removed from a particular Intermediary’s platform.

Shareholders seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Funds to prevent such trading, there is no guarantee that the Funds, the transfer agent or Intermediaries will be able to identify these shareholders or curtail their trading practices. The Funds do not have any arrangements intended to permit trading of their shares in contravention of the policies described above.

Purchases, Redemptions, Exchanges and Distributions

The purchase policies for each Fund are identical. The offering price is the NAV per share plus any initial sales charge that applies. Class A shares of each Fund are sold at NAV plus an initial sales charge that varies depending on the amount of your investment. In certain circumstances, Class A shares are subject to a contingent deferred sales charge (“CDSC”). Class B shares of the Prudential Fund are sold at NAV per share without an initial sales charge. However, if Class B shares are redeemed within seven years of their purchase, a CDSC will be deducted from the redemption proceeds. Class B shares generally are no longer offered for purchase. Class C shares are sold at NAV per share without an initial sales charge. In addition, if Class C shares are redeemed within 12 calendar months of their purchase, a CDSC of 1.00% will be deducted from the redemption proceeds. As applicable, the Funds’ Class T, Class Q shares, Class R shares and Class Z shares are sold at NAV without an initial sales charge. The Prudential Fund does not offer Class T shares and the Target Portfolio does not offer Class B shares or Class Z shares. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio. The following section provides information regarding purchase, redemption, and exchange for Class C shares of the Target Portfolio.

The redemption policies for the Funds are identical. Your shares will be sold at the next NAV per share determined after your order to sell is received, less any applicable CDSC imposed and less such redemption fee or deferred sales charges as may be set by the relevant Fund’s Board from time to time. Refer to each Fund’s Prospectus for more information regarding how to sell shares.

Shares of each Fund may be exchanged for shares of the same class of other funds in the mutual fund complex, including those of the Trust and PIP5, at NAV per share at the time of exchange without a sales charge. However, the Class T shares of the Target Portfolio may only be exchanged for other Class T shares of the other series of the Trust (since no other funds in the complex offer Class T shares). If you exchange such shares for the same class of shares of another Fund, any applicable CDSC and the conversion of Class B shares to Class A shares will be calculated based on the date on which you acquired the original shares. After an exchange, at redemption, the CDSC will be calculated from the first day of the month after initial purchase, excluding any time shares were held in a money market fund. The Funds may change the terms of any exchange privilege after giving you 60 days’ notice. Exchanges of shares involve redemption of the shares of the Fund you own and a purchase of shares of another Fund. Shares are normally redeemed and purchased in the exchange transaction on the business day on which the transfer agent receives an exchange request that is in proper form, if the request is received by the close of the NYSE that day.

Frequent trading of Fund shares in response to short-term fluctuations in the market—also known as “market timing”—may make it very difficult to manage a Fund’s investments. When market timing occurs, the Funds may have to sell portfolio securities to have the cash necessary to redeem the market timer’s shares. This can happen at a time when it is not advantageous to sell any securities, so a Fund’s performance may be hurt. When large dollar amounts are involved, market timing can also make it difficult to use long-term investment strategies because we cannot predict how much cash a Fund will have to invest. When, in the opinion of PI, such activity would have a disruptive effect on portfolio management, the Funds reserve the right to refuse purchase orders and exchanges into the Funds by any person, group or commonly controlled account. The decision may be based on dollar amount, volume, or frequency of trading. A Fund will notify a market timer of a rejection of an exchange or purchase order. There can be no assurance that a Fund’s procedures will be effective in limiting the practice of market timing in all cases.

Purchase, Redemption and Exchange Information for Class C Shares of the Target Portfolio

The following relates to the Class C shares of the Target Portfolio. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio.

The Target Portfolio makes Class C shares available to individual investors. The purchase and redemption policies for Class C shares of each Fund are identical. Class C shares of the Target Portfolio are sold at NAV per share without an initial sales charge. In addition, if Class C shares are redeemed within 12 calendar months of their purchase, a CDSC of 1.00% will be deducted from the redemption proceeds. The operating expenses of Class C shares are higher than the operating expenses of Class A shares.

The minimum initial and subsequent investment requirements otherwise applicable to Class C shares do not apply to employee savings plan accounts, payroll deduction plan accounts, or when exchanging all shares of an account to an existing account with the same registration. The minimum initial investment for retirement accounts and custodial accounts for minors is $1,000. The minimum initial and subsequent investment for automatic investment plan (AIP) accounts is $50 (if your shares are held through a broker or other financial intermediary, the broker or intermediary is responsible for determining the minimum initial and subsequent investment for AIP accounts).

If the value of your Class C account with Prudential Mutual Fund Services LLC (“PMFS” or the “Transfer Agent”) is less than $10,000, the Target Portfolio will deduct a $15 annual account maintenance fee from your account. The $15 annual account maintenance fee will be assessed during the 4th calendar quarter of each year. Any applicable CDSC on the shares redeemed to pay the $15 account maintenance fee will be waived. The $15 account maintenance fee will not be charged on: (i) accounts during the first six months from inception of the account, (ii) accounts which are authorized for electronic delivery of account statements, transaction confirmations, prospectuses and fund shareholder reports, (iii) omnibus accounts or accounts for which a broker or other financial intermediary is responsible for recordkeeping, (iv) institutional accounts, (v) group retirement plans, (vi) AIP accounts or employee savings plan accounts, (vii) accounts with the same registration associated with multiple share classes within the Target Portfolio, provided that the aggregate value of share classes with the same registration within the Target Portfolio is $10,000 or more, or (viii) clients with assets of $50,000 or more across the Prudential Investments family of mutual funds. For more information, see “Purchase, Redemption and Pricing of Fund Shares—Account Maintenance Fee” in the Target Portfolio’s SAI.

Contingent Deferred Sales Charge (“CDSC”)

If you sell Class C shares within 12 months of purchase, you will have to pay a CDSC. To keep the CDSC as low as possible, we will sell amounts representing shares in the following order:

·	Amounts representing shares you purchased with reinvested dividends and distributions,
·	Amounts representing the increase in NAV above the total amount of payments for shares made during the past 12 months, and
·	Amounts representing the cost of shares held beyond the CDSC period (12 months)

Since shares that fall into any of the categories listed above are not subject to the CDSC, selling them first helps you to avoid—or at least minimize—the CDSC.

Having sold the exempt shares first, if there are any remaining shares that are subject to the CDSC, we will apply the CDSC to amounts representing the cost of shares held for the longest period of time within the applicable CDSC period.

The CDSC is calculated based on the lesser of the original purchase price or the redemption proceeds. The rate decreases on the anniversary date of your purchase.

The holding period for purposes of determining the applicable CDSC will be calculated from the anniversary date of the purchase, excluding any time Class C shares were held in a money market fund.

Waiver of the CDSC

The CDSC will be waived if the Class C shares are sold:

·	After a shareholder is deceased or permanently disabled (or, in the case of a trust account, after the death or permanent disability of the grantor). This waiver applies to individual shareholders, as well as shares held in joint tenancy, provided the shares were purchased before the death or permanent disability;
·	To provide for certain distributions—made without IRS penalty—from a qualified or tax-deferred retirement plan, benefit plan, IRA or Section 403(b) custodial account;
·	To withdraw excess contributions from a qualified or tax-deferred retirement plan, IRA or Section 403(b) custodial account; and
·	The CDSC will be waived for redemptions by certain group retirement plans for which Prudential or brokers not affiliated with Prudential provide administrative or recordkeeping services. The CDSC also will be waived for certain redemptions by benefit plans sponsored by Prudential and its affiliates. For more information, call Prudential at (800) 353-2847.

Involuntary Redemption of Small Accounts

If the value of your account with PMFS is less than $500 for any reason, we may sell your Class C shares (without charging any CDSC) and close your account. We would do this to minimize the Target Portfolio’s expenses paid by other shareholders. The involuntary sale provisions do not apply to AIP accounts, employee savings plan accounts, payroll deduction plan accounts, retirement accounts (such as a 401(k) plan, an IRA or other qualified or tax-deferred plan or account), omnibus accounts, and accounts for which a broker or other financial intermediary is responsible for recordkeeping. Prior thereto, if you make a sale that reduces your account value to less than the threshold, we may sell the rest of your shares (without charging any CDSC) and close your account; this involuntary sale does not apply to shareholders who own their shares as part of a retirement account. For more information, see “Purchase, Redemption and Pricing of Fund Shares—Involuntary Redemption” in the Target Portfolio’s SAI.

Account Maintenance Fee

If the value of your account with PMFS is less than $10,000, with certain exclusions, a $15 annual account maintenance fee will be deducted from your account during the 4th calendar quarter of each year. Any applicable CDSC on the shares redeemed to pay the account maintenance fee will be waived. For more information, see “Purchase, Redemption and Pricing of Fund Shares—Account Maintenance Fee” in the Target Portfolio’s SAI.

90-Day Repurchase Privilege

After you redeem your shares, you have a 90-day period during which you may reinvest back into your account any of the redemption proceeds in shares of the Target Portfolio without paying an initial sales charge. If you paid a CDSC when you redeemed your shares, we will credit your account with the appropriate number of shares to reflect the amount of the CDSC you paid on that reinvested portion of your redemption proceeds. In order to take advantage of this one-time privilege, you must notify the Transfer Agent or your broker at the time of the repurchase. For more information, see the Target Portfolio’s SAI.

How to Exchange Your Shares

You can exchange your Class C shares of the Target Portfolio for shares of the same class in certain other Prudential Investments mutual funds—including Prudential MoneyMart Assets (a money market fund)—if you satisfy the minimum investment requirements. After an exchange, at redemption, any CDSC will be calculated from the date of the initial purchase, excluding any time that Class C shares were held in Prudential MoneyMart Assets. We may change the terms of any exchange privilege after giving you 60 days’ notice.

There is no sales charge for exchanges. However, if you exchange—and then sell—shares within the applicable CDSC period, you must still pay the applicable CDSC. At the time of exchange, CDSC liable shares and free shares move proportionally according to the percentage of total shares you are exchanging. If you have exchanged Class C shares into Prudential MoneyMart Assets, the time you hold the Class C shares in the money market fund will not be counted in calculating the required holding period for CDSC liability. Remember, exchanging shares is considered a sale for tax purposes. Therefore, if the shares you exchange are worth more than the amount that you paid for them, you may have to pay capital gains tax. For additional information about exchanging shares, see the Target Portfolio’s SAI.

Telephone Redemptions or Exchanges

You may redeem your Class C shares of the Target Portfolio if the proceeds of the redemption do not exceed $100,000 or exchange your shares in any amount by calling the Target Portfolio at (800) 225-1852 and communicating your instructions in good order to a customer service representative before 4:00 p.m. Eastern time. You will receive a redemption or exchange amount based on that day’s NAV. Certain restrictions apply; please see the section entitled “How to Sell Your Shares—Restrictions on Sales” in the Target Portfolio’s

prospectus for additional information. In the event that regular trading on the NYSE closes before 4:00 p.m. Eastern time, you will receive the following day’s NAV if your order to sell or exchange is received after the close of regular trading on the NYSE. The Transfer Agent will record your telephone instructions and request specific account information before redeeming or exchanging shares. The Target Portfolio will not be liable for losses due to unauthorized or fraudulent telephone instructions if it follows instructions that it reasonably believes are made by the shareholder. If the Portfolio does not follow reasonable procedures, it may be liable.

In the event of drastic economic or market changes, you may have difficulty in redeeming or exchanging your shares by telephone. If this occurs, you should consider redeeming or exchanging your shares by mail or through your broker.

The telephone redemption and exchange procedures may be modified or terminated at any time. If this occurs, you will receive a written notice from the Target Portfolio.

Expedited Redemption Privilege

If you have selected the Expedited Redemption Privilege, you may have your redemption proceeds from the sale of Class C shares sent directly to your bank account. Expedited redemption requests may be made by telephone or letter, must be received by the Target Portfolio prior to 4:00 p.m. Eastern time to receive a redemption amount based on that day’s NAV and are subject to the terms and conditions regarding the redemption of shares. In the event that regular trading on the NYSE closes before 4:00 p.m. Eastern time, you will receive the following day’s NAV if your order to sell is received after the close of regular trading on the NYSE. For more information, see the Target Portfolio’s SAI. The Expedited Redemption Privilege may be modified or terminated at any time without notice.

Tax Information

Each Fund’s dividends and distributions are taxable and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.

The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.

Expected Distribution Schedule*	Prudential Fund	Target Portfolio

Dividends	Annually	Annually

Short-Term Capital Gains	Annually	Annually

Long-Term Capital Gains	Annually	Annually

* Under certain circumstances, each Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year.

FEES AND EXPENSES

The following tables describe the fees and expenses that shareholders may pay if they hold shares of the Funds, as well as the unaudited pro forma fees and expenses of the Target Portfolio that will continue in effect after consummation of the Reorganization if the Plan is approved. The holding period for shares held by investors in the Funds will be counted in computing the holding period of shares subsequently held in the Target Portfolio after the Reorganization for purposes of determining any applicable CDSCs. The fees and expenses below of the pro forma Target Portfolio after the Reorganization are based on estimated expenses of the Target Portfolio during the twelve months ended July 31, 2014.

The Prudential Fund does not offer Class T shares and the Target Portfolio does not currently offer Class B shares or Class Z shares. As part of the Reorganization, Class C shares will be created for the Target Portfolio in order to accommodate the Class C shareholders of the Prudential Fund who will become shareholders of the Target Portfolio.

“Certain Expenses” are defined herein as taxes, interest, distribution (12b-1) fees and certain extraordinary expenses.

Shareholder Fees and Operating Expenses****

Class A Shares (for the twelve months ended July 31, 2014)

Shareholder Fees (fees paid directly from your investment)

	The Prudential Fund			The Target Portfolio			Pro Forma Target Portfolio After Reorganization
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)	5.50		%	5.50		%	5.50		%
Maximum deferred sales charge (load) (as a percentage of the lower of original purchase price or net asset value at redemption)	1.00		%	1.00		%	1.00		%
Maximum sales charge (load) imposed on reinvested dividends and other distributions	None			None			None
Redemption fee	None			None			None
Exchange fee	None			None			None
Maximum account fee (accounts under $10,000)	$	15		$	15		$	15