PROSPECTUS AND FINANCIAL PRIVACY NOTICE JANUARY 31, 2001
PRUDENTIAL
GOVERNMENT SECURITIES TRUST
SHORT-INTERMEDIATE TERM SERIES
FUND TYPE Government securities
OBJECTIVE High level of income consistent with providing reasonable safety
Build on the Rock
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Trust's shares nor has the SEC determined that this
prospectus is complete or accurate. It is a criminal offense to state otherwise.
[PRUDENTIAL LOGO]
TABLE OF CONTENTS
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1 RISK/RETURN SUMMARY
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
3 Fees and Expenses
5 HOW THE SERIES INVESTS
5 Investment Objective and Policies
7 Other Investments and Strategies
11 Investment Risks
15 HOW THE SERIES IS MANAGED
15 Board of Trustees
15 Manager
15 Investment Adviser
16 Distributor
17 SERIES DISTRIBUTIONS AND TAX ISSUES
17 Distributions
18 Tax Issues
19 If You Sell or Exchange Your Shares
21 HOW TO BUY, SELL AND EXCHANGE SHARES OF THE SERIES
21 How to Buy Shares
25 How to Sell Your Shares
27 How to Exchange Your Shares
29 Telephone Redemptions or Exchanges
30 FINANCIAL HIGHLIGHTS
30 Class A Shares
31 Class Z Shares
32 THE PRUDENTIAL MUTUAL FUND FAMILY
I YOUR FINANCIAL SECURITY, YOUR SATISFACTION & YOUR PRIVACY
FOR MORE INFORMATION (Back Cover)
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SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
RISK/RETURN SUMMARY
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This section highlights key information about the SHORT-INTERMEDIATE TERM
SERIES, which we refer to as "the Series." Additional information follows this
summary.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is to achieve a HIGH LEVEL OF INCOME CONSISTENT WITH
PROVIDING REASONABLE SAFETY. To achieve this objective, we invest at least 65%
of the Series' total assets in U.S. Government securities, including U.S.
Treasury bills, notes, bonds and other debt securities, such as mortgage-related
and asset-backed securities, issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. While we make every effort to achieve our
investment objective, we can't guarantee success.
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. The securities
in which the Series invests are generally subject to the risk that the
securities may lose value because interest rates rise or because there is a lack
of confidence in the borrower. In addition, these securities may be subject to
the risk that the issuer may be unable to make principal and interest payments
when they are due. Mortgage-related and asset-backed securities may also be
subject to prepayment risk, which means that if they are prepaid, the Series may
have to replace them with lower-yielding securities.
The Series may actively and frequently trade its portfolio securities. High
portfolio turnover results in higher transaction costs and can affect the
Series' performance and have adverse tax consequences.
Some of our investment strategies involve additional risks. Like any mutual
fund, an investment in the Series could lose value, and you could lose money.
For more detailed information about the risks associated with the Series, see
"How the Series Invests--Investment Risks."
An investment in the Series is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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1
RISK/RETURN SUMMARY
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EVALUATING PERFORMANCE
A number of factors--including risk--can affect how the Series performs. The
following bar chart shows the Series' performance for each full calendar year of
operations for the last 10 years. The bar chart and table below demonstrate the
risk of investing in the Series by showing how returns can change from year to
year and by showing how the Series' average annual total returns compare with
those of a broad measure of market performance and a group of similar mutual
funds. Past performance does not mean that the Series will achieve similar
results in the future.
ANNUAL RETURNS* (CLASS A SHARES)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1991 13.16%
1992 6.19%
1993 7.19%
1994 -2.35%
1995 12.94%
1996 4.00%
1997 6.99%
1998 6.00%
1999 0.55%
2000 8.91%
BEST QUARTER: 4.89% (4th quarter of 1991)
WORST QUARTER: -2.00% (1st quarter of 1994)
* THE RETURN OF THE CLASS A SHARES FROM 1-1-00 TO 12-31-00 WAS 8.91%.
AVERAGE ANNUAL RETURNS(1) (AS OF 12-31-00)
1 YR 5 YRS 10 YRS SINCE INCEPTION
Class A Shares 8.91% 5.24% 6.25% 7.89% (since 9-22-82)
Class Z Shares 9.08% N/A N/A 5.84% (since 2-26-97)
Lipper Average(2) 8.56% 5.16% 6.44% **(2)
Lehman Brothers Intermediate
Government Bond Index(3) 10.47% 6.19% 7.19% **(3)
1 THE SERIES' RETURNS ARE AFTER DEDUCTION OF EXPENSES.
2 THE LIPPER AVERAGE IS BASED ON THE AVERAGE RETURN OF ALL MUTUAL FUNDS IN
THE LIPPER SHORT-INTERMEDIATE U.S. GOVERNMENT FUND CATEGORY. LIPPER RETURNS
SINCE THE INCEPTION OF EACH CLASS ARE 7.95% FOR CLASS A AND 5.65% FOR
CLASS Z SHARES. SOURCE: LIPPER INC.
3 THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT BOND INDEX--(INTERMEDIATE
GOVERNMENT BOND INDEX) AN UNMANAGED WEIGHTED INDEX COMPRISED OF SECURITIES
ISSUED OR BACKED BY THE U.S. GOVERNMENT, ITS AGENCIES AND INSTRUMENTALITIES
WITH A REMAINING MATURITY OF ONE TO TEN YEARS--GIVES A BROAD LOOK AT HOW
U.S. GOVERNMENT BONDS WITH SUCH MATURITIES HAVE PERFORMED. THE INTERMEDIATE
GOVERNMENT BOND INDEX INCLUDES REINVESTED DIVIDENDS, BUT DOES NOT INCLUDE
THE EFFECT OF ANY OPERATING EXPENSES OF A MUTUAL FUND. THESE RETURNS WOULD
BE LOWER IF THEY INCLUDED THE EFFECT OF OPERATING EXPENSES. INTERMEDIATE
GOVERNMENT BOND INDEX RETURNS SINCE THE INCEPTION OF EACH CLASS ARE 8.98%
FOR CLASS A AND 6.87% FOR CLASS Z SHARES. SOURCE: LEHMAN BROTHERS.
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2 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
RISK/RETURN SUMMARY
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FEES AND EXPENSES
These tables show the sales charges, fees and expenses that you may pay if you
buy and hold shares of each class of the Series--Class A and Class Z. Each share
class has different expenses, but represents an investment in the same series.
Class Z shares are available only to a limited group of investors. For more
information about which share class may be right for you, see "How to Buy, Sell
and Exchange Shares of the Series."
SHAREHOLDER FEES(1) (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS A CLASS Z
Maximum sales charge (load) imposed on
purchases (as a percentage of
offering price) None None
Maximum deferred sales charge (load)
(as a percentage of the lower of
original purchase price or sale
proceeds) None None
Maximum sales charge (load) imposed on
reinvested dividends and other
distributions None None
Redemption fees None None
Exchange fee None None
ANNUAL SERIES OPERATING EXPENSES (DEDUCTED FROM SERIES ASSETS)
CLASS A CLASS Z
Management fees .40% .40%
+ Distribution and service (12b-1)
fees .18% None
+ Other expenses .36% .36%
= TOTAL ANNUAL SERIES OPERATING
EXPENSES .94% .76%
(1) YOUR BROKER MAY CHARGE YOU A SEPARATE OR ADDITIONAL FEE FOR PURCHASES AND
SALES OF SHARES.
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RISK/RETURN SUMMARY
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EXAMPLE
This example will help you compare the fees and expenses of the Series' two
share classes and compare the cost of investing in the Series with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the Series for the time
periods indicated and then sell all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Series' operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions, your costs would be:
1 YR 3 YRS 5 YRS 10 YRS
Class A shares $96 $300 $520 $1,155
Class Z shares $78 $243 $422 $942
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4 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW THE SERIES INVESTS
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INVESTMENT OBJECTIVE AND POLICIES
The Series' investment objective is to achieve a HIGH LEVEL OF INCOME CONSISTENT
WITH PROVIDING REASONABLE SAFETY. This means we seek investments that will
increase in value, as well as pay the Series interest and other income. While we
make every effort to achieve our objective, we can't guarantee success.
The Series invests at least 65% of its total assets in U.S. GOVERNMENT
SECURITIES. U.S. Government securities include U.S. Treasury bills, notes,
bonds, and other DEBT SECURITIES ISSUED BY THE U.S. TREASURY and obligations,
including MORTGAGE-BACKED SECURITIES, ASSET-BACKED SECURITIES and other
securities that are issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. These guarantees do not extend to the yield or value of the
securities or the Series' shares. Not all U.S. Government securities are backed
by the full faith and credit of the United States. Some are supported only by
the credit of the issuing agency.
The Series may also invest up to 35% of its assets in the following
PRIVATELY-ISSUED instruments: (1) fixed rate and adjustable rate mortgage-
backed securities, including collateralized mortgage obligations, multi-class
pass-through securities and stripped mortgage-backed securities, (2) asset-
backed securities, (3) corporate debt securities and (4) money market
instruments. These privately-issued securities must be rated A or better by a
major rating service. Money market instruments must also have a comparable
short-term rating. A rating is an assessment of the likelihood of the timely
payment of interest and principal by the issuer of the security. The Series may
also invest in unrated securities, if the Series' investment adviser determines
them to be of comparable quality.
MORTGAGE-BACKED SECURITIES are usually pass-through instruments that pay
investors a share of all interest and principal payments from an underlying pool
of fixed or adjustable rate mortgages. Some mortgage-related securities are
backed by the full faith and credit of the U.S. Government like obligations of
the Government National Mortgage Association (GNMA or "Ginnie Mae"). Debt
securities issued by the Federal Home Loan Mortgage Corporation (FHLMC or
"Freddie Mac") are not backed by the full faith and credit of the U.S.
Government. However, these issuers have the right to borrow from the
U.S.Treasury to meet their obligations. Privately-issued mortgage-related
securities are not guaranteed by U.S. governmental entities, and generally have
one or more types of credit
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5
HOW THE SERIES INVESTS
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enhancement to ensure timely receipt of payments and to protect against default.
Mortgage pass-through securities include collateralized
mortgage obligations, multiclass pass-through securities and stripped
mortgage-backed securities. A COLLATERALIZED MORTGAGE OBLIGATION (CMO) is a
security backed by an underlying portfolio of mortgages or mortgage-backed
securities that may be issued or guaranteed by a bank or by U.S. governmental
entities. A MULTICLASS PASS-THROUGH SECURITY is an equity interest in a trust
composed of underlying mortgage assets. Payments of principal of and interest on
the mortgage assets and any reinvestment income thereon provide funds to pay
debt service on the CMO or to make scheduled distributions on the multi-class
pass-through security. A STRIPPED MORTGAGE-BACKED SECURITY (MBS STRIP) may be
issued by U.S. governmental entities or by private institutions. MBS strips take
the pieces of a debt security (principal and interest) and break them apart. The
resulting securities may be sold separately and may perform differently.
The values of mortgage-related securities vary with changes in market
interest rates generally and changes in yields among various kinds of
mortgage-related securities. Such values are particularly sensitive to changes
in prepayments of the underlying mortgages. For example, during periods of
falling interest rates, prepayments tend to accelerate as homeowners and others
refinance their higher-rate mortgages; these prepayments reduce the anticipated
duration of the mortgage-related securities. Conversely, during periods of
rising interest rates, prepayments can be expected to decelerate, which has the
effect of extending the anticipated duration at the same time that the value of
the securities declines. MBS strips tend to be even more highly sensitive to
changes in prepayment and interest rates than mortgage-related securities and
CMOs generally.
We may invest in privately-issued ASSET-BACKED DEBT SECURITIES. An asset-
backed security is another type of pass-through instrument that pays interest
based upon the cash flow of an underlying pool of assets, such as automobile
loans and credit card receivables.
A corporation that wishes to raise cash may choose to issue a CORPORATE DEBT
SECURITY. The corporation pays the investor a fixed or variable rate of interest
and must repay the amount borrowed at maturity.
MONEY MARKET INSTRUMENTS include bank obligations, obligations of savings
institutions, fully insured certificates of deposit and commercial paper
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6 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW THE SERIES INVESTS
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of a comparable short-term rating.
It is currently anticipated that the Series will invest primarily in
securities with maturities ranging from two to five years, but depending on
market and changing economic conditions, the Series may invest in securities of
any maturity of 10 years or less or, for hedging purposes, in longer term
securities, including 30 year futures.
The Series may also engage in ACTIVE TRADING--that is, frequent trading of
its securities--in order to take advantage of new investment opportunities or
yield differentials. There may be tax consequences, such as a possible increase
in short-term capital gains or losses, when the Series sells a security without
regard to how long it has held the security. In addition, active trading may
result in greater transaction costs, which will reduce the Series' return.
For more information, see "Investment Risks" below and the Statement of
Additional Information, "Description of the Trust, Its Investments and Risks."
The Statement of Additional Information--which we refer to as the SAI--contains
additional information about the Series. To obtain a copy, see the back cover
page of this prospectus.
The Series' investment objective is a fundamental policy that cannot be
changed without shareholder approval. The Board of the Trust can change
investment policies of the Series that are not fundamental.
OTHER INVESTMENTS AND STRATEGIES
In addition to the principal strategies, we also may use the following
investment strategies to increase the Series' returns or protect its assets if
market conditions warrant.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
The Series may use REPURCHASE AGREEMENTS, where a party agrees to sell a
security to the Series and then repurchases it at an agreed-upon price at a
stated time. A repurchase agreement is like a loan by the Series to the other
party which creates a fixed return for the Series. Repurchase agreements are
used for cash management purposes.
The Series may use REVERSE REPURCHASE AGREEMENTS, where the Series borrows
money on a temporary basis by selling a security with an obligation to
repurchase it at an agreed-upon price and time.
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7
HOW THE SERIES INVESTS
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DOLLAR ROLLS
The Series may enter into DOLLAR ROLLS in which the Series sells securities to
be delivered in the current month and repurchases substantially similar (same
type and coupon) securities to be delivered on a specified future date by the
same party. The Series is paid the difference between the current sales price
and the forward price for the future purchase as well as the interest earned on
the cash proceeds of the initial sale.
TEMPORARY DEFENSIVE INVESTMENTS
In response to adverse market, economic or political conditions, the Series may
invest up to 100% of its assets in cash, U.S. Government securities and high
quality money market instruments. Investing heavily in these securities limits
our ability to achieve a high level of income, but can help to preserve the
Series' assets.
For more information about these strategies, see the SAI, "Description of
the Trust, Its Investments and Risks."
DERIVATIVE STRATEGIES
We may use various DERIVATIVE STRATEGIES to try to improve the Series' returns.
We may use hedging techniques to try to protect the Series' assets. We cannot
guarantee that these strategies and techniques will work, that the instruments
necessary to implement these strategies and techniques will be available, or
that the Series will not lose money. Derivatives--such as futures contracts,
options on futures and interest rate swaps--involve costs and can be volatile.
With derivatives, the investment adviser tries to predict if the underlying
investment, whether a security, market index, currency, interest rate, or some
other investment, will go up or down at some future date. We may use derivatives
to try to reduce risk or to increase return consistent with the Series' overall
investment objective. The investment adviser 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 the
Series' underlying holdings.
OPTIONS
The Series may purchase and sell put and call options on debt securities traded
on U.S. securities exchanges or in the over-the-counter market. An
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8 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW THE SERIES INVESTS
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OPTION is the right to buy or sell securities in exchange for a premium. The
Series will sell only covered options.
FUTURES CONTRACTS AND RELATED OPTIONS
The Series may purchase and sell futures contracts and related options on
financial futures. A FUTURES CONTRACT is an agreement to buy or sell a set
quantity of an underlying product at a future date, or to make or receive a cash
payment based on the value of a securities index.
INTEREST RATE SWAP TRANSACTIONS
The Series may enter into INTEREST RATE SWAP TRANSACTIONS. In a swap
transaction, the Series and another party "trade" income streams. The swap is
done to preserve a return or spread on a particular investment or portion of a
portfolio or to protect against any increase in the price of securities the
Series anticipates purchasing at a later date.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
The Series may purchase money market obligations on a WHEN-ISSUED or
DELAYED-DELIVERY basis. When the Series 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 Series does not earn
interest income until the date the obligations are delivered.
FLOATING RATE DEBT SECURITIES AND VARIABLE RATE DEBT SECURITIES
The Series may invest in floating rate debt securities and variable rate debt
securities. FLOATING RATE DEBT SECURITIES are debt securities that have an
interest rate that is set as a specific percentage of a designated rate, such as
the rate on Treasury debt obligations or the prime rate at major commercial
banks. The interest rate on floating rate debt securities changes when there is
a change in the designated rate. VARIABLE RATE DEBT SECURITIES are debt
securities that have an interest rate that is adjusted periodically based on the
market rate at a specified time. They generally allow the Series to demand full
payment of the debt securities on short notice. At times the Series may receive
an amount that may be more or less than the amount paid for the debt securities.
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9
HOW THE SERIES INVESTS
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FOREIGN DEBT SECURITIES
The Series may also purchase U.S. dollar-denominated FOREIGN DEBT SECURITIES,
which include securities that are issued by foreign governments and
corporations. Foreign government debt securities include securities issued by
quasi-governmental entities, governmental agencies, supranational entities and
other governmental entities.
SHORT SALES
The Series may use SHORT SALES, where it sells a security it does not own, with
the expectation of a decline in the market value of that security. To complete
the transaction, the Series will borrow the security to make delivery to the
buyer. The Series must replace the borrowed security by purchasing it at market
price at the time of replacement. The price at that time may be more or less
than the price at which the Series sold the security. The Series is required to
pay the lender any dividends or interest accrued. To borrow the security, the
Series may pay a premium which would increase the cost of the security sold. In
a short sale "against the box," the Series owns or has the right to acquire the
security at no additional cost through conversion or exchange of other
securities it owns. The Series' use of short sales is subject to certain
fundamental restrictions described in the SAI.
For more information about these strategies, see the SAI, "Description of
the Trust, Its Investments and Risks."
ADDITIONAL STRATEGIES
The Series also follows certain policies when it BORROWS MONEY (the Series can
borrow up to 33 1/3% of the value of its total assets); LENDS ITS SECURITIES to
others (the Series may lend up to 30% of the value of its total assets); and
HOLDS ILLIQUID SECURITIES (the Series may hold up to 15% of its net assets in
illiquid securities, including securities with legal or contractual restrictions
on resale, those without a readily available market and repurchase agreements
with maturities longer than seven days). The Series is subject to certain
investment restrictions that are fundamental policies, which means they cannot
be changed without shareholder approval. For more information about these
restrictions, see the SAI.
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10 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW THE SERIES INVESTS
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INVESTMENT RISKS
As noted, all investments involve risk, and investing in the Series is no
exception. Since the Series' holdings can vary significantly from broad market
indexes, performance of the Series can deviate from performance of the indexes.
This chart outlines the key risks and potential rewards of the Series' principal
investments and certain other non-principal investments the Series may make.
See, too, "Description of the Trust, Its Investments and Risks," in the SAI.
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11
HOW THE SERIES INVESTS
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INVESTMENT TYPE
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
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U.S. GOVERNMENT -- Credit risk--the risk -- Regular interest
SECURITIES that the borrower income
can't pay back the -- Generally more secure
UP TO 100%; AT LEAST 65% money borrowed or than lower quality
make interest debt securities and
payments (relatively equity securities
low for U.S. -- May preserve the
Government Series' assets
securities) -- The U.S. Government
-- Market risk--the risk guarantees interest
that debt and principal
obligations will payments on certain
lose value in the U.S. Government
market, sometimes securities
rapidly or -- If interest rates
unpredictably, decline, long-term
because interest yields should be
rates rise or there higher than money
is a lack of market yields
confidence in the -- Bonds have generally
borrower outperformed money
-- Not all U.S. market instruments
Government over the long term
securities are -- Most bonds rise in
insured or value when interest
guaranteed by the rates fall
U.S.
Government--some are
backed by the
issuing agency
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MORTGAGE-RELATED -- Prepayment risk--the -- Regular interest
SECURITIES risk that the income
underlying mortgages -- The U.S. Government
PERCENTAGE VARIES may be prepaid, guarantees interest
partially or and principal
completely, payments on certain
generally during securities
periods of falling -- May benefit from
interest rates, security interest in
which could real estate
adversely affect collateral
yield to maturity -- Pass-through
and could require instruments provide
the Series to greater
reinvest in lower diversification than
yielding securities direct ownership of
-- Credit risk--the risk loans
that the underlying
mortgages will not
be paid by debtors
or by credit
insurers or
guarantors of such
instruments. Some
private mortgage
securities are
unsecured or secured
by lower-rated
insurers or
guarantors and thus
may involve greater
risk
-- See market risk
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HOW THE SERIES INVESTS
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INVESTMENT TYPE
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
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ASSET-BACKED SECURITIES -- The security interest -- Regular interest
in the underlying income
USUALLY LESS THAN 20% collateral may not -- Prepayment risk is
be as great as with generally lower than
mortgage-related with
securities mortgage-related
-- Credit risk--the risk securities
that the underlying -- Pass-through
receivables will not instruments provide
be paid by debtors greater
or by credit diversification than
insurers or direct ownership of
guarantors of such loans
instruments. Some -- May offer higher
asset-backed yield due to their
securities are structure
unsecured or secured
by lower-rated
insurers or
guarantors and thus
may involve greater
risk
-- See market risk and
prepayment risk
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CORPORATE -- See credit risk and -- Regular interest
DEBT SECURITIES market risk income
-- Generally more secure
USUALLY LESS THAN 20% than equity
securities
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DERIVATIVES -- Derivatives such as -- The Series could make
futures, options, money and protect
PERCENTAGE VARIES options on futures against losses if
and interest rate the investment
swaps that are used analysis proves
for hedging purposes correct
may not fully offset -- One way to manage the
the underlying Series' risk/return
positions and this balance is to lock
could result in in the value of an
losses to the Series investment ahead of
that would not have time
otherwise occurred -- Derivatives used for
-- Derivatives used for return enhancement
risk management may purposes involve a
not have the type of leverage and
intended effects and could generate
may result in losses substantial gains at
or missed low cost
opportunities
-- The other party to a
derivatives contract
could default
-- Derivatives used for
return enhancement
purposes involve a
type of leverage
(borrowing for
investment) and
could magnify losses
-- Certain types of
derivatives involve
costs to the Series
that can reduce
returns
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HOW THE SERIES INVESTS
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INVESTMENT TYPE
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
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WHEN-ISSUED AND -- May magnify -- May magnify
DELAYED-DELIVERY underlying underlying
SECURITIES, REPURCHASE investment losses investment gains
AGREEMENTS, REVERSE -- Investment costs may
REPURCHASE AGREEMENTS, exceed potential
DOLLAR ROLLS AND SHORT underlying
SALES investment gains
PERCENTAGE VARIES
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ILLIQUID SECURITIES -- Illiquidity risk--the -- May offer a more
risk that bonds may attractive yield or
UP TO 15% OF NET ASSETS be difficult to potential for growth
value precisely and than more widely
sell at time or traded securities
price desired, in
which case valuation
would depend more on
investment adviser's
judgment than is
generally the case
with other types of
debt securities
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MONEY MARKET -- See credit risk and -- May preserve the
INSTRUMENTS market risk (which Series' assets
are less of a
UP TO 100% ON A concern for money
TEMPORARY BASIS market instruments)
-- Limits potential for
capital appreciation
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VARIABLE/FLOATING RATE -- Value lags value of -- May offer protection
DEBT SECURITIES fixed-rate against interest
securities when rate increases
PERCENTAGE VARIES interest rates
change
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FOREIGN DEBT SECURITES -- Foreign markets, -- Investors can
economies and participate in the
PERCENTAGE VARIES; political systems growth of foreign
UP TO 20% may not be as stable markets and
as those in the companies operating
U.S., particularly in those markets
those in developing -- Opportunities for
countries diversification
-- May be less liquid
than U.S. debt
securities
-- Differences in
foreign laws,
accounting
standards, public
information, custody
and settlement
practices provide
less reliable
information on
foreign investments
and involve more
risks
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14 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW THE SERIES IS MANAGED
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BOARD OF TRUSTEES
The Board of Trustees oversees the actions of the Manager, investment adviser
and Distributor and decides on general policies. The Board also oversees the
Series' officers, who conduct and supervise the daily business operations of the
Series.
MANAGER
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC (PIFM)
GATEWAY CENTER THREE, 100 MULBERRY STREET
NEWARK, NJ 07102-4077
Under a Management Agreement with the Trust, PIFM manages the Series'
investment operations and administers its business affairs. PIFM is also
responsible for supervising the Series' investment adviser. For the fiscal year
ended November 30, 2000, the Series paid PIFM management fees of .40% of the
Series' average daily net assets.
PIFM and its predecessors have served as manager or administrator to
investment companies since 1987. As of December 31, 2000, PIFM served as the
manager to all 40 of the Prudential mutual funds, and as manager or
administrator to 21 closed-end investment companies, with aggregate assets of
approximately $76 billion.
INVESTMENT ADVISER
The Prudential Investment Corporation, called Prudential Investments, is the
Series' investment adviser and has served as an investment adviser to investment
companies since 1984. Its address is Prudential Plaza, 751 Broad Street, Newark,
NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and pays Prudential Investments for its
services.
Prudential Investments' Fixed Income Group manages more than $135 billion
for Prudential's retail investors, institutional investors, and policyholders.
Senior Managing Director James J. Sullivan heads the Group, which is organized
into teams specializing in different market sectors. Top-down, broad investment
decisions are made by the Fixed Income Policy Committee, whereas bottom-up
security selection is made by the sector teams.
Mr. Sullivan has overall responsibility for overseeing portfolio management
and credit research. Prior to joining Prudential Investments in 1998,
- --------------------------------------------------------------------------------
15
HOW THE SERIES IS MANAGED
- ------------------------------------------------
he was a managing director in Prudential's Capital Management Group, where he
oversaw portfolio management and credit research for Prudential's General
Account and subsidiary fixed-income portfolios. He has more than 16 years of
experience in risk management, arbitrage trading, and corporate bond investing.
The Fixed Income Investment Policy Committee is comprised of key senior
investment managers. Members include seven sector team leaders, the chief
investment strategist, and the head of risk management. The Committee uses a
top-down approach to investment strategy, asset allocation, and general risk
management, identifying sectors in which to invest.
The U.S. Liquidity Team, headed by Michael Lillard, is primarily responsible
for overseeing the day-to-day management of the Series. This Team uses a
bottom-up approach, which focuses on individual securities, while staying within
the guidelines of the Investment Policy Committee and the Series' investment
restrictions and policies. In addition, the Credit Research team of analysts
supports the sector teams using bottom-up fundamentals, as well as economic and
industry trends. Other sector teams may contribute to securities selection when
appropriate.
U.S. LIQUIDITY
ASSETS UNDER MANAGEMENT: $25.6 billion (as of June 30, 2000).
TEAM LEADER: Michael Lillard. GENERAL INVESTMENT EXPERIENCE: 12 years.
PORTFOLIO MANAGERS: 9. AVERAGE GENERAL INVESTMENT EXPERIENCE: 9 years, which
includes team members with significant mutual fund experience.
SECTOR: U.S. Treasuries, agencies and mortgages.
INVESTMENT STRATEGY: Focus is on high quality, liquidity and controlled risk.
DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Series'
shares under a Distribution Agreement with the Series. The Series has a
Distribution and Service Plan under Rule 12b-1 of the Investment Company Act for
Class A shares. Under the Plan and Distribution Agreement, PIMS pays the
expenses of distributing the Series' Class A and Class Z shares and provides
certain shareholder support services. The Series pays distribution and other
fees to PIMS as compensation for its services for Class A shares, but not for
Class Z shares. These fees--known as 12b-1 fees--are shown in the "Fees and
Expenses" tables.
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16 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
SERIES DISTRIBUTIONS AND TAX ISSUES
- -------------------------------------
Investors who buy shares of the Series should be aware of some important income
tax issues. For example, the Series distributes DIVIDENDS of net investment
income monthly and CAPITAL GAINS, if any, at least annually to shareholders.
These distributions are subject to federal income taxes, unless you hold your
shares in a 401(k) plan, an Individual Retirement Account (IRA) or some other
qualified or tax-deferred plan or account. Dividends and distributions from the
Series also may be subject to state and local income tax in the state where you
live.
Also, if you sell shares of the Series for a profit, you may have to pay
capital gains taxes on the amount of your profit, again unless you hold your
shares in a qualified or tax-deferred plan or account.
The following briefly discusses some of the important tax issues you should
be aware of, but is not meant to be tax advice. For tax advice, please speak
with your tax adviser.
DISTRIBUTIONS
The Series distributes DIVIDENDS out of any net investment income, plus
short-term capital gains, to shareholders every month. For example, if the
Series owns a U.S. Government bond and the bond pays interest, the Series will
pay out a portion of this interest as a dividend to its shareholders, assuming
the Series' income is more than its costs and expenses. The dividends you
receive from the Series will be taxed as ordinary income, whether or not they
are reinvested in the Series. Corporate shareholders are not eligible for the
70% dividends-received deduction on dividends paid by the Series.
The Series also distributes LONG-TERM CAPITAL GAINS to shareholders--
typically once a year. Long-term capital gains are generated when the Series
sells assets that it held for more than 12 months for a profit. For an
individual, the maximum long-term capital gains rate is 20% for federal income
tax purposes. The maximum capital gains rate for corporate shareholders
currently is the same as the maximum tax rate for ordinary income.
For your convenience, Series distributions of dividends and capital gains
are AUTOMATICALLY REINVESTED in the Series. If you ask us to pay the
distributions in cash, we will send you a check if your account is with the
Transfer Agent. Otherwise, if your account is with a broker, you will receive a
credit to your account. Either way, the distributions may be subject to
- --------------------------------------------------------------------------------
17
SERIES DISTRIBUTIONS AND TAX ISSUES
- ------------------------------------------------
taxes, unless your shares are held in a qualified or tax-deferred plan or
account. For more information about automatic reinvestment and other shareholder
services, see "Step 4: Additional Shareholder Services" in the next section.
As of November 30, 2000, the Series had a capital loss carryforward for
federal income tax purposes of approximately $28,698,000. Accordingly, no
capital gains distribution is expected to be paid to shareholders until we have
realized net gains greater than that carryforward.
TAX ISSUES
FORM 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and long-term capital gains we distributed to you during the prior year. If you
own shares of the Series as part of a qualified or tax-deferred plan or account,
your taxes are deferred, so you will not receive a Form 1099. However, you will
receive a Form 1099 when you take any distributions from your qualified or
tax-deferred plan or account.
Series distributions are generally taxable to you in the calendar year they
are received, except when we declare certain dividends in the fourth quarter,
and actually pay them in January of the following year. In such cases, the
dividends are treated as if they were paid on December 31 of the prior year.
WITHHOLDING TAXES
If federal law requires you to provide the Series with your taxpayer
identification number and certifications as to your tax status, and you fail to
do this, or if you are otherwise subject to backup withholding, we will withhold
and pay to the U.S. Treasury 31% of your taxable distributions and gross sale
proceeds. Dividends of net investment income and short-term capital gains paid
to a nonresident foreign shareholder generally will be subject to a U.S.
withholding tax of 30%. This rate may be lower, depending on any tax treaty the
U.S. may have with the shareholder's country.
IF YOU PURCHASE JUST BEFORE RECORD DATE
If you buy shares of the Series just before the record date for a distribution
(the date that determines who receives the distribution), that distribution will
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18 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
SERIES DISTRIBUTIONS AND TAX ISSUES
- ------------------------------------------------
be paid to you. As explained above, the distribution may be subject to income or
capital gains taxes. You may think you've done well, since you bought shares one
day and soon thereafter received a distribution. That is not so because when
dividends are paid out, the value of each share of the Series decreases by the
amount of the dividend to reflect the payout although this may not be apparent
because the value of each share of the Series also will be affected by market
changes, if any. The distribution you receive makes up for the decrease in share
value. However, the timing of your purchase does mean that part of your
investment came back to you as taxable income.
QUALIFIED AND TAX-DEFERRED RETIREMENT PLANS
Retirement plans and accounts allow you to defer paying taxes on investment
income and capital gains. Contributions to these plans may also be tax
deductible, although distributions from these plans generally are taxable. In
the case of Roth IRA accounts, contributions are not tax deductible, but
distributions from the plan may be tax-free. Please contact your financial
adviser for information on a variety of Prudential mutual funds that are
suitable for retirement plans offered by Prudential.
IF YOU SELL OR EXCHANGE YOUR SHARES
If you sell any shares of the Series for a profit, you have REALIZED A CAPITAL
GAIN which is subject to tax, unless the shares are held in a qualified or tax-
deferred plan or account. For individuals, the maximum capital gains tax rate is
20% for shares held for more than twelve months. If you sell shares of the
Series for a loss, you may have a capital loss, which you may use to offset
certain capital gains you have.
[RECEIPTS FROM SALES CHART]
If you sell shares and realize a loss, you will not be permitted to use the
loss to the extent you replace the shares (including pursuant to the
reinvestment of a dividend) within a 61-day period (beginning 30 days before the
sale of the shares).
- --------------------------------------------------------------------------------
19
SERIES DISTRIBUTIONS AND TAX ISSUES
- ------------------------------------------------
Exchanging your shares of the Series for the shares of another Prudential
mutual fund is considered a sale for tax purposes. In other words, it's a
"taxable event." Therefore, if the shares you exchanged have increased in value
since you purchased them, you have capital gains, which are subject to the taxes
described above.
Any gain or loss you may have from selling or exchanging Series shares will
not be reported on Form 1099; however, proceeds from the sale or exchange will
be reported on Form 1099-B. Therefore, unless you hold your shares in a
qualified or tax-deferred plan or account, you or your financial adviser should
keep track of the dates on which you buy and sell--or exchange--Series shares,
as well as the amount of any gain or loss on each transaction. For tax advice,
please see your tax adviser.
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20 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- -------------------------------------
HOW TO BUY SHARES
STEP 1: OPEN AN ACCOUNT
If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Series for you, call Prudential Mutual Fund Services
LLC (PMFS) at (800) 225-1852, or contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INVESTMENT SERVICES
P.O. BOX 15020
NEW BRUNSWICK, NJ 08906-5020
You may purchase shares by check or wire. We do not accept cash or money
orders. To purchase by wire, call the number above to obtain an application.
After PMFS receives your completed application, you will receive an account
number. For additional information about purchasing shares of the Series, see
the back cover page of this prospectus. We have the right to reject any purchase
order (including an exchange into the Series) or suspend or modify the Series'
sale of its shares.
STEP 2: CHOOSE A SHARE CLASS
Individual investors can choose between Class A and Class Z shares of the
Series, although Class Z shares are available only to a limited group of
investors.
When choosing a share class, you should consider the following:
-- The amount of your investment
-- Whether you qualify to purchase Class Z shares.
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21
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
SHARE CLASS COMPARISON. Use this chart to help you compare the Series' two
share classes.
CLASS A CLASS Z
Minimum purchase amount(1) $1,000 None
Minimum amount for subsequent
purchases(1) $ 100 None
Maximum initial sales charge None None
Contingent Deferred Sales Charge
(CDSC) None None
Annual distribution and service
(12b-1) fees
(shown as a percentage of average net
assets)(2) .18 of 1% currently None
1 THE MINIMUM INVESTMENT REQUIREMENTS DO NOT APPLY TO CERTAIN RETIREMENT AND
EMPLOYEE SAVINGS PLANS AND CUSTODIAL ACCOUNTS FOR MINORS. THE MINIMUM
INITIAL AND SUBSEQUENT INVESTMENT FOR PURCHASES MADE THROUGH THE AUTOMATIC
INVESTMENT PLAN IS $50. FOR MORE INFORMATION, SEE "ADDITIONAL SHAREHOLDER
SERVICES--AUTOMATIC INVESTMENT PLAN."
2 THESE DISTRIBUTION AND SERVICE (12b-1) FEES ARE PAID FROM THE SERIES'
ASSETS ON A CONTINUOUS BASIS. OVER TIME, THE FEES WILL INCREASE THE COST OF
YOUR INVESTMENT AND MAY COST YOU MORE THAN PAYING OTHER TYPES OF SALES
CHARGES. CLASS A SHARES MAY PAY A SERVICE FEE OF UP TO .25 OF 1%,
CALCULATED IN THE SAME MANNER AS THE DISTRIBUTION FEE. THE DISTRIBUTION FEE
FOR CLASS A SHARES (INCLUDING UP TO .25 OF 1% AS A SERVICE FEE, CALCULATED
IN THE SAME MANNER AS THE DISTRIBUTION FEE) IS LIMITED TO THE LESSER OF
(I) .25 OF 1% PER ANNUM OF THE AGGREGATE SALES OF THE SERIES' SHARES, NOT
INCLUDING SHARES ISSUED IN CONNECTION WITH REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS FROM THE SERIES, ISSUED ON OR AFTER JULY 1,
1985 LESS THE AGGREGATE NET ASSET VALUE OF ANY SUCH SHARES REDEEMED, OR
(II) .25 OF 1% PER ANNUM OF THE AVERAGE DAILY NET ASSET VALUE OF THE
SERIES' SHARES ISSUED AFTER JULY 1, 1985.
QUALIFYING FOR CLASS Z SHARES
BENEFIT PLANS. Certain group retirement plans may purchase Class Z shares if
they meet the required minimum for amount of assets, average account balance or
number of eligible employees. For more information about these requirements,
call Prudential at (800) 353-2847.
MUTUAL FUND PROGRAMS. Class Z shares also can be purchased by participants in
any fee-based program or trust program sponsored by Prudential or an affiliate
that includes the Series as an available option. Class Z shares also can be
purchased by investors in certain programs sponsored by broker-dealers,
investment advisers and financial planners who have agreements with Prudential
Investments Advisory Group relating to:
-- Mutual fund "wrap" or asset allocation programs, where the sponsor
places Series trades, links its clients' accounts to a master account
in the sponsor's name and charges its clients a management,
consulting or other fee for its services
-- Mutual fund "supermarket" programs, where the sponsor links its
clients' accounts to a master account in the sponsor's name and the
sponsor charges a fee for its services.
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22 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
Broker-dealers, investment advisers or financial planners sponsoring these
mutual fund programs may offer their clients more than one class of shares in
the Series in connection with different pricing options for their programs.
Investors should consider carefully any separate transaction and other fees
charged by these programs in connection with investing in each available share
class before selecting a share class.
OTHER TYPES OF INVESTORS. Class Z shares also can be purchased by any of the
following:
-- Certain participants in the MEDLEY Program (group variable annuity
contracts) sponsored by Prudential for whom Class Z shares of the
Prudential mutual funds are an available option
-- Current and former Directors/Trustees of the Prudential mutual funds
(including the Series)
-- Prudential, with an investment of $10 million or more.
In connection with the sale of shares, the Manager, the Distributor or one
of their affiliates may pay brokers, financial advisers and other persons a
finder's fee for Class A or Class Z shares from their own resources based on a
percentage of the net asset value of shares sold or otherwise.
STEP 3: UNDERSTANDING THE PRICE YOU'LL PAY
The price you pay for each share of the Series is based on the share value. The
share value of a mutual fund--known as the NET ASSET VALUE or NAV--is determined
by a simple calculation: it's the total value of the Series (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). Portfolio
securities are valued based upon market quotations or, if not readily available,
at fair value as determined in good faith under procedures established by the
Board of the Trust. Most national newspapers report the NAVs of most mutual
funds, which allows investors to
- -------------------------------------------------------------------
MUTUAL FUND SHARES
The NAV of mutual fund shares changes every day because the value of a fund's
portfolio changes constantly. For example, if Fund XYZ holds ACME Corp. bonds in
its portfolio and the price of ACME bonds goes up while the value of the fund's
other holdings remains the same and expenses don't change, the NAV of Fund XYZ
will increase.
- -------------------------------------------------------------------
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23
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
check the price of mutual funds daily.
We determine the NAV of our shares once each business day at 4:15 p.m., New
York time, on days that the New York Stock Exchange (NYSE) is open for trading.
The NYSE is closed on most national holidays and Good Friday. We do not
determine the NAV on days when we have not received any orders to purchase, sell
or exchange Series shares, or when changes in the value of the Series' portfolio
do not materially affect the NAV.
WHAT PRICE WILL YOU PAY FOR SHARES OF THE SERIES?
For Class A and Class Z shares, you'll pay the public offering price, which is
the NAV next determined after we receive your order to purchase. Your broker may
charge you a separate or additional fee for purchases of shares.
STEP 4: ADDITIONAL SHAREHOLDER SERVICES
As a Series shareholder, you can take advantage of the following services and
privileges:
AUTOMATIC REINVESTMENT. As we explained in the "Series Distributions and Tax
Issues" section, the Series pays out--or distributes--its net investment income
and any capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Series at NAV. If you want your
distributions paid in cash, you can indicate this preference on your
application, notify your broker, or notify the Transfer Agent in writing (at the
address below) not less than five full business days before the date we
determine who receives dividends.
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: ACCOUNT MAINTENANCE
P.O. BOX 8159
PHILADELPHIA, PA 19101
AUTOMATIC INVESTMENT PLAN. You can make regular purchases of the Series for as
little as $50 by having the money automatically withdrawn from your bank or
brokerage account at specified intervals.
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24 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
RETIREMENT PLAN SERVICES. Prudential offers a wide variety of retirement plans
for individuals and institutions, including large and small businesses. For
information on IRAs, including Roth IRAs or SEP-IRAs for a one-person business,
please contact your financial adviser. If you are interested in opening a 401(k)
or other company-sponsored retirement plan (SIMPLEs, SEP plans, Keoghs, 403(b)
plans, pension and profit-sharing plans), your financial adviser will help you
determine which retirement plan best meets your needs. Complete instructions
about how to establish and maintain your plan and how to open accounts for you
and your employees will be included in the retirement plan kit you receive in
the mail.
THE PRUTECTOR PROGRAM. Optional group term life insurance--which protects the
value of your Prudential mutual fund investment for your beneficiaries against
market declines--is available to investors who purchase their shares through
Prudential. Eligible investors who apply for PruTector coverage after the
initial 6-month enrollment period will need to provide satisfactory evidence of
insurability. This insurance is subject to other restrictions and is not
available in all states.
SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan is available that will
provide you with monthly, quarterly, semi-annual or annual redemption checks.
REPORTS TO SHAREHOLDERS. Every year we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Series. To reduce Series expenses, we will send
one annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.
HOW TO SELL YOUR SHARES
You can sell your shares of the Series for cash (in the form of a check) at any
time, subject to certain restrictions.
When you sell shares of the Series--also known as redeeming your shares--the
price you will receive will be the NAV next determined after the Transfer Agent,
the Distributor or your broker receives your order to sell. If
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25
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
your broker holds your shares, your broker must receive your order to sell by
4:15 p.m., New York time, to process the sale on that day. Otherwise, contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: REDEMPTION SERVICES
P.O. BOX 8149
PHILADELPHIA, PA 19101
Generally, we will pay you for the shares that you sell within seven days
after the Transfer Agent, the Distributor or your broker receives your sell
order. If you hold shares through a broker, payment will be credited to your
account. If you are selling shares you recently purchased with a check, we may
delay sending you the proceeds until your check clears, which can take up to 10
days from the purchase date. You can avoid delay if you purchase by wire,
certified check or cashier's check. Your broker may charge you a separate or
additional fee for sales of shares.
RESTRICTIONS ON SALES
There are certain times when you may not be able to sell shares of the Series,
or when we may delay paying you the proceeds from a sale. As permitted by the
Securities and Exchange Commission, this may happen only during unusual market
conditions or emergencies when the Series can't determine the value of its
assets or sell its holdings. For more information, see the SAI, "Purchase,
Redemption and Pricing of Trust Shares--Sale of Shares."
If you are selling more than $100,000 of shares, if you want the redemption
proceeds payable to or sent to someone or some place that is not in our records,
or you are a business or a trust and if you hold your shares directly with the
Transfer Agent, you will need to have the signature on your sell order signature
guaranteed by an "eligible guarantor institution." An "eligible guarantor
institution" includes any bank, broker-dealer or credit union. For more
information, see the SAI, "Purchase, Redemption and Pricing of Trust
Shares--Sale of Shares--Signature Guarantee."
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26 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
REDEMPTION IN KIND
If the sales of Series shares you make during any 90-day period reach the lesser
of $250,000 or 1% of the value of the Series' net assets, we can then give you
securities from the Series' portfolio instead of cash. If you want to sell the
securities for cash, you would have to pay the costs charged by a broker.
SMALL ACCOUNTS
If you make a sale that reduces your account value to less than $500, we may
sell the rest of your shares and close your account. We would do this to
minimize the Series' expenses paid by other shareholders. We will give you 60
days' notice, during which time you can purchase additional shares to avoid this
action. This involuntary sale does not apply to shareholders who own their
shares as part of a 401(k) plan, an IRA or some other qualified or tax-deferred
plan or account.
RETIREMENT PLANS
To sell shares and receive a distribution from a retirement account, call your
broker or the Transfer Agent for a distribution request form. There are special
distribution and income tax withholding requirements for distributions from
retirement plans and you must submit a withholding form with your request to
avoid delay. If your retirement plan account is held for you by your employer or
plan trustee, you must arrange for the distribution request to be signed and
sent by the plan administrator or trustee. For additional information, see the
SAI.
HOW TO EXCHANGE YOUR SHARES
You can exchange your shares of the Series for shares of other series of the
Trust of the same class and certain other Prudential mutual funds--including
certain money market funds--if you satisfy the minimum investment requirements.
For example, you can exchange Class A shares of the Series for Class A shares of
another Prudential mutual fund, on the basis of the relative NAV plus the
applicable sales charge, but you can't exchange Class A shares for Class B,
Class C or Class Z shares. We may change the terms of the exchange privilege
after giving you 60 days' notice.
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27
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
If you hold shares through a broker, you must exchange shares through your
broker. Otherwise contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: EXCHANGE PROCESSING
P.O. BOX 8157
PHILADELPHIA, PA 19101
When you exchange Class A shares of the Series for Class A shares of any
other Prudential mutual fund, you will be subject to any sales charge that may
be imposed by such other Prudential mutual fund. The sales charge is imposed at
the time of your exchange.
Remember as we explained in the section entitled "Series Distributions and
Tax Issues--If You Sell or Exchange Your Shares," exchanging shares is
considered a sale for tax purposes. Therefore, if the shares you exchange are
worth more than you paid for them, you may have to pay capital gains tax. For
additional information about exchanging shares, see the SAI, "Shareholder
Investment Account--Exchange Privilege."
FREQUENT TRADING
Frequent trading of Series shares in response to short-term fluctuations in the
market--also known as "market timing"--may make it very difficult to manage the
Series' investments. When market timing occurs, the Series 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 the Series' 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 the Series will
have to invest. When, in our opinion, such activity would have a disruptive
effect on portfolio management, the Series reserves the right to refuse purchase
orders and exchanges into the Series by any person, group or commonly controlled
account. The decision may be based upon dollar amount, volume and frequency of
trading. The Series may notify a market timer of rejection of an exchange or
purchase order after the day the order is placed. If the Series allows a market
timer to trade Series shares, it may require the market timer to enter into a
written agreement to follow certain proceedings and limitations.
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28 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
HOW TO BUY, SELL AND EXCHANGE
SHARES OF THE SERIES
- ------------------------------------------------
TELEPHONE REDEMPTIONS OR EXCHANGES
You may redeem or exchange your shares in any amount by calling the Series at
(800) 225-1852. In order to redeem or exchange your shares by telephone, you
must call the Series before 4:15 p.m., New York time. You will receive a
redemption or exchange amount based on that day's NAV.
The Series' Transfer Agent will record your telephone instructions and
request specific account information before redeeming or exchanging shares. The
Series will not be liable if it follows instructions that it reasonably believes
are made by the shareholder. If the Series does not follow reasonable
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions.
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 privileges may be modified or
terminated at any time. If this occurs, you will receive a written notice from
the Series.
- --------------------------------------------------------------------------------
29
FINANCIAL HIGHLIGHTS
- -------------------------------------
The financial highlights will help you evaluate the Series' financial
performance. The TOTAL RETURN in the chart represents the rate that a
shareholder earned on an investment in the Series, assuming reinvestment of all
dividends and other distributions. The information is for each share class of
the Series for the periods indicated.
Review each chart with the financial statements and the report of
independent accountants, which appear in the annual report and the SAI and are
available upon request. Additional performance information is contained in the
annual report, which you can receive at no charge.
CLASS A SHARES
The financial highlights were audited by PricewaterhouseCoopers LLP, independent
accountants, whose reports were unqualified.
CLASS A SHARES (FISCAL YEARS ENDED 11-30)
PER SHARE OPERATING PERFORMANCE 2000 1999 1998 1997 1996
NET ASSET VALUE, BEGINNING OF YEAR $9.41 $9.77 $9.74 $9.70 $9.74
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .51 .47 .51 .56 .51
Net realized and unrealized gain
(loss) on investment transactions .14 (.35) .06 -- (.01)
TOTAL FROM INVESTMENT OPERATIONS .65 .12 .57 .56 .50
- ------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.45) (.48) (.54) (.52) (.54)
NET ASSET VALUE, END OF YEAR $9.61 $9.41 $9.77 $9.74 $9.70
TOTAL RETURN(1) 7.13% 1.26% 6.01% 5.96% 5.34%
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000) $106,048 $127,298 $149,508 $149,162 $185,235
AVERAGE NET ASSETS (000) $113,860 $138,847 $155,680 $166,651 $186,567
RATIO TO AVERAGE NET ASSETS:
Expenses, including distribution
and service (12b-1) fees .94% .92% .96% .97% 1.01%
Expenses, excluding distribution
and service (12b-1) fees .76% .73% .78% .77% .79%
Net investment income 5.38% 4.90% 5.26% 5.76% 5.99%
Portfolio turnover rate 370% 304% 155% 210% 132%
1 TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND ANY OTHER DISTRIBUTIONS.
IT IS CALCULATED ASSUMING SHARES ARE PURCHASED ON THE FIRST DAY AND SOLD ON
THE LAST DAY OF EACH YEAR REPORTED.
- -------------------------------------------------------------------
30 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
FINANCIAL HIGHLIGHTS
- ------------------------------------------------
CLASS Z SHARES
The financial highlights were audited by PricewaterhouseCoopers LLP, independent
accountants, whose reports were unqualified.
CLASS Z SHARES (FISCAL YEARS ENDED 11-30)
PER SHARE OPERATING PERFORMANCE 2000 1999 1998 1997(1)
NET ASSET VALUE, BEGINNING OF
PERIOD $9.45 $9.81 $9.77 $9.64
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .52 .51 .47 0.47
Net realized and unrealized
gain (loss) on
investment transactions .16 (.37) .13 0.07
TOTAL FROM INVESTMENT
OPERATIONS .68 .14 .60 .54
- -----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.47) (.50) (.56) (.41)
NET ASSET VALUE, END OF PERIOD $9.66 $9.45 $9.81 $9.77
TOTAL RETURN(2) 7.41% 1.46% 6.31% 5.70%
- -----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA 2000 1999 1998 1997(1)
- -----------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000) $7,041 $8,360 $4,635 $207(4)
AVERAGE NET ASSETS (000) $7,073 $8,798 $3,631 $202(4)
RATIO TO AVERAGE NET ASSETS:
Expenses .76% .73% .78% .77%(3)
Net investment income 5.56% 5.09% 5.36% 6.52%(3)
Portfolio turnover rate 370% 304% 155% 210%
1 INFORMATION SHOWN IS FOR THE PERIOD FROM FEBRUARY 26, 1997 (WHEN CLASS Z
SHARES WERE FIRST OFFERED) THROUGH NOVEMBER 30, 1997.
2 TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND ANY OTHER DISTRIBUTIONS.
IT IS CALCULATED ASSUMING SHARES ARE PURCHASED ON THE FIRST DAY AND SOLD ON
THE LAST DAY OF EACH PERIOD REPORTED. TOTAL RETURNS FOR PERIODS OF LESS
THAN A FULL YEAR ARE NOT ANNUALIZED.
3 ANNUALIZED.
4 FIGURE IS ACTUAL AND NOT ROUNDED TO NEAREST THOUSAND.
- --------------------------------------------------------------------------------
31
THE PRUDENTIAL MUTUAL FUND FAMILY
- -------------------------------------
Prudential offers a broad range of mutual funds designed to meet your individual
needs. For information about these funds, contact your financial adviser or call
us at (800) 225-1852. Read the prospectus carefully before you invest or send
money.
STOCK FUNDS
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL INDEX SERIES FUND
PRUDENTIAL STOCK INDEX FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL JENNISON EQUITY OPPORTUNITY FUND
PRUDENTIAL JENNISON GROWTH FUND
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL SECTOR FUNDS, INC.
PRUDENTIAL FINANCIAL SERVICES FUND
PRUDENTIAL HEALTH SCIENCES FUND
PRUDENTIAL TECHNOLOGY FUND
PRUDENTIAL UTILITY FUND
PRUDENTIAL SMALL COMPANY FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
PRUDENTIAL TAX-MANAGED EQUITY FUND
PRUDENTIAL TAX-MANAGED SMALL-CAP FUND, INC.
PRUDENTIAL U.S. EMERGING GROWTH FUND, INC.
PRUDENTIAL VALUE FUND
PRUDENTIAL 20/20 FOCUS FUND
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
TARGET FUNDS
LARGE CAPITALIZATION GROWTH FUND
LARGE CAPITALIZATION VALUE FUND
SMALL CAPITALIZATION GROWTH FUND
SMALL CAPITALIZATION VALUE FUND
ASSET ALLOCATION/BALANCED FUNDS
PRUDENTIAL DIVERSIFIED FUNDS
CONSERVATIVE GROWTH FUND
MODERATE GROWTH FUND
HIGH GROWTH FUND
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
PRUDENTIAL ACTIVE BALANCED FUND
GLOBAL FUNDS
GLOBAL STOCK FUNDS
PRUDENTIAL EUROPE GROWTH FUND, INC.
PRUDENTIAL NATURAL RESOURCES FUND, INC.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL GLOBAL GROWTH FUND
PRUDENTIAL INTERNATIONAL VALUE FUND
PRUDENTIAL JENNISON INTERNATIONAL GROWTH FUND
GLOBAL UTILITY FUND, INC.
TARGET FUNDS
INTERNATIONAL EQUITY FUNDS
GLOBAL BOND FUND
PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- -------------------------------------------------------------------
32 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
- -------------------------------------
BOND FUNDS
TAXABLE BOND FUNDS
PRUDENTIAL GOVERNMENT INCOME FUND, INC.
PRUDENTIAL HIGH YIELD FUND, INC.
PRUDENTIAL HIGH YIELD TOTAL RETURN FUND, INC.
PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC.
INCOME PORTFOLIO
PRUDENTIAL TOTAL RETURN BOND FUND, INC.
TARGET FUNDS
TOTAL RETURN BOND FUND
TAX-EXEMPT BOND FUNDS
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA SERIES
CALIFORNIA INCOME SERIES
PRUDENTIAL MUNICIPAL BOND FUND
HIGH INCOME SERIES
INSURED SERIES
PRUDENTIAL MUNICIPAL SERIES FUND
FLORIDA SERIES
NEW JERSEY SERIES
NEW YORK SERIES
PENNSYLVANIA SERIES
PRUDENTIAL NATIONAL MUNICIPALS FUND, INC.
MONEY MARKET FUNDS
TAXABLE MONEY MARKET FUNDS
CASH ACCUMULATION TRUST
LIQUID ASSETS FUND
NATIONAL MONEY MARKET FUND
PRUDENTIAL GOVERNMENT SECURITIES TRUST
MONEY MARKET SERIES
U.S. TREASURY MONEY MARKET SERIES
SPECIAL MONEY MARKET FUND, INC.
MONEY MARKET SERIES
PRUDENTIAL MONEYMART ASSETS, INC.
TAX-FREE MONEY MARKET FUNDS
PRUDENTIAL TAX-FREE MONEY FUND, INC.
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
CALIFORNIA MONEY MARKET SERIES
PRUDENTIAL MUNICIPAL SERIES FUND
NEW JERSEY MONEY MARKET SERIES
NEW YORK MONEY MARKET SERIES
COMMAND FUNDS
COMMAND MONEY FUND
COMMAND GOVERNMENT FUND
COMMAND TAX-FREE FUND
INSTITUTIONAL MONEY MARKET FUND
PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
33
Notes
- -------------------------------------------------------------------
34 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
Notes
- --------------------------------------------------------------------------------
35
Notes
- -------------------------------------------------------------------
36 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
Notes
- --------------------------------------------------------------------------------
37
Notes
- -------------------------------------------------------------------
38 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
Notes
- --------------------------------------------------------------------------------
39
Notes
- -------------------------------------------------------------------
40 SHORT-INTERMEDIATE TERM SERIES [LOGO] (800) 225-1852
YOUR FINANCIAL SECURITY, YOUR SATISFACTION & YOUR PRIVACY
ACCESSING INFORMATION
Access to customer information is authorized for Prudential business
purposes only. Employees who have access to customer information are required to
protect it and keep it confidential.
COLLECTING INFORMATION TO CONDUCT BUSINESS
Prudential collects information about you to help us serve your financial
needs, provide customer service, offer new products or services, and fulfill
legal and regulatory requirements. The type of information that Prudential
collects varies according to the products or services you request, and may
include:
- information included on your application and related forms (such as name,
address, Social Security number, assets and income);
- information about your relationships with us (such as products or services
purchased, account balances and payment history);
- information from your employer, benefit plan sponsor, or association for
any Prudential group product you may have (such as name, address, Social
Security number, age and marital status);
- information from consumer reporting agencies (such as credit relationships
and history);
- information from other non-Prudential sources (such as motor vehicle
reports, medical information, and demographic information); and
- information from visitors to Prudential websites (such as that provided
through online forms, site visitorship data and online information
collecting devices known as "cookies").
SECURITY STANDARDS
We continue to assess new technology to provide additional protection of
your personal information. We safeguard customer information in accordance with
federal standards and established security procedures. Measures we take include
implementation of physical, electronic and procedural safeguards.
SHARING INFORMATION WITHIN PRUDENTIAL
We may disclose the previously described information about our customers and
former customers to other Prudential businesses, such as our securities
broker-dealers, our insurance companies and agencies, our banks and our real
estate brokerage franchise company. We may share information to:
- provide customer service or account maintenance; or
- tell you about other products or services offered by Prudential.
SHARING INFORMATION IN OTHER CIRCUMSTANCES
In compliance with federal and state laws, we may disclose some or all of
the information we collect about our customers and former customers, as
described above, to non-Prudential businesses, such as:
- companies that perform services for us or on our behalf (such as
responding to customer requests, providing you with information about our
products, or maintaining or developing software); or
- financial services companies (such as banks, insurance companies,
securities brokers or dealers) and non-financial companies (such as real
estate brokers or financial publications) with whom we have marketing
agreements.
We will not share medical information or motor vehicle reports for marketing
purposes.
Many employers or other plan sponsors restrict the information that can be
shared about their employees or members. In our business with institutions, we
always honor these restrictions. If you have a relationship with Prudential as a
result of products or services provided through an employer or other plan
sponsor, we will abide by the specific privacy rules imposed by that
organization.
We may also disclose information to non-affiliated parties as allowed by
law, such as in responding to a subpoena, preventing fraud, or complying with an
inquiry by a government agency or regulator.
IT'S YOUR CHOICE
Our customers periodically receive information about products and services
available from the Prudential family of companies, as well as from select
business partners, including financial services and non-financial services
companies with whom we have marketing agreements. Many of our customers
appreciate receiving this information. However, if you do not want us to share
your information for these purposes or communicate offers to you -- either by
phone or mail -- please complete the attached form and return it to us.
If there are multiple owners of an account, any one of them may request on
behalf of any or all of the others that their information not be disclosed and
their names be removed from our phone or mailing lists.
While you may receive more than one copy of this notice, if you choose to
limit the sharing of your information, you only need to inform us of your choice
once. Unless you modify this decision, we will continue to honor it.
NOT PART OF PROSPECTUS
i
THIS NOTICE IS BEING PROVIDED ON BEHALF OF THE FOLLOWING PRUDENTIAL
AFFILIATES:
Prudential Insurance Company of America, The
Prudential Property and Casualty Insurance Company
Prudential Securities Incorporated
Prudential Investment Corporation, The
Prudential Bank and Trust Company, The
Prudential 20/20 Focus Fund
Prudential California Municipal Fund
Prudential Commercial Insurance Company
Prudential Commercial Insurance Company of New Jersey, The
Prudential Direct Insurance Agency of Texas, Inc.
Prudential Direct Insurance Agency of Alabama, Inc.
Prudential Direct Insurance Agency of Massachusetts, Inc.
Prudential Direct Insurance Agency of New Mexico, Inc.
Prudential Direct Insurance Agency of Ohio, Inc.
Prudential Direct Insurance Agency of Wyoming, Inc.
Prudential Direct, Inc.
Prudential Diversified Funds
Prudential Equity Fund, Inc.
Prudential Equity Investors, Inc.
Prudential Europe Growth Fund, Inc.
Prudential General Agency of Ohio, Inc.
Prudential General Insurance Agency of Florida, Inc.
Prudential General Insurance Agency of Kentucky, Inc.
Prudential General Insurance Agency of Massachusetts, Inc.
Prudential General Insurance Agency of Mississippi, Inc.
Prudential General Insurance Agency of Nevada, Inc.
Prudential General Insurance Agency of New Mexico, Inc.
Prudential General Insurance Agency of Texas, Inc.
Prudential General Insurance Agency of Wyoming, Inc.
Prudential General Insurance Company
Prudential General Insurance Company of New Jersey, The
Prudential Global Total Return Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Index Series Fund
Prudential Institutional Liquidity Portfolio, Inc.
Prudential Insurance Brokerage, Inc.
Prudential International Bond Fund, Inc.
Prudential Investment Management Services LLC
Prudential Investment Portfolios, Inc., The
Prudential Investments Fund Management LLC
Prudential MoneyMart Assets, Inc.
Prudential Municipal Bond Fund
Prudential Municipal Series Fund
Prudential National Municipal Funds, Inc.
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Property and Casualty Insurance Company of New Jersey, The
Prudential Property and Casualty New Jersey Insurance Brokerage, Inc., The
Prudential Real Estate Securities Fund
Prudential Savings Bank, F.S.B., The
Prudential Sector Funds, Inc.
Prudential Select Life Insurance Company of America
Prudential Series Fund, Inc., The
Prudential Short-Term Corporate Bond Fund, Inc.
Prudential Small Company Fund, Inc.
Prudential Special Money Market Fund, Inc.
Prudential Tax-Free Money Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential Total Return Bond Fund, Inc.
Prudential Trust Company
Prudential U.S. Emerging Growth Fund, Inc.
Prudential Value Fund
Prudential World Fund, Inc.
Pruco Life Insurance Company
Pruco Life Insurance Company of New Jersey
Pruco Securities Corporation
Asia Pacific Fund, Inc., The
Bache Insurance Agency Incorporated
Bache Insurance Agency of Alabama, Inc.
Bache Insurance Agency of Oklahoma, Inc.
Bache Insurance Agency of Texas, Inc.
Cash Accumulation Trust
COMMAND Government Fund
COMMAND Money Fund
COMMAND Tax-Free Fund
Duff & Phelps Utilities Tax-Free Income Fund, Inc.
First Financial Fund, Inc.
Global Utility Fund, Inc.
High Yield Income Fund, Inc., The
High Yield Plus Fund, Inc., The
Hochman & Baker Investment Advisory Services
Hochman & Baker Securities
Hochman & Baker, Inc.
Jennison Associates LLC
Merastar Insurance Company
Nicholas-Applegate Fund, Inc.
Quick Sure Auto Agency
Strategic Partners Series
Target Funds
Target Portfolio Trust, The
Titan Auto Agency, Inc.
Titan Auto Insurance
Titan Auto Insurance of Arizona, Inc.
Titan Auto Insurance of New Mexico
Titan Auto Insurance of Pennsylvania
Titan Auto Insurance, Inc.
Titan Indemnity Company
Titan Insurance Company
Titan Insurance Services, Inc.
Titan National Auto Call Center, Inc.
Victoria Automobile Insurance Company
Victoria Fire & Casualty Company
Victoria Insurance Agency, Inc.
Victoria National Insurance Company
Victoria Select Insurance Company
Victoria Specialty Insurance Company
W. I. of Florida, Inc.
WHI of New York, Inc.
Whitehall Insurance Agency of Texas, Inc.
Whitehall of Indiana, Inc.
In this notice, the phrase "third party" refers to any organization that is not
a Prudential affiliate.
The words "you" and "customer," as used in this notice, mean any individual who
obtains or has obtained a financial product or service from a Prudential
affiliate that is to be used primarily for personal, family, or household
purposes.
We will process your request as quickly as possible. In some cases, 6 to 8 weeks
may be required for your request(s) to become effective. Prudential will
continue to provide you with important information about your existing accounts,
including inserts enclosed with your account statements and other notices
regarding the Prudential products that you own. You may also receive
communications from your Prudential Professional or from independently owned and
operated franchisees of The Prudential Real Estate Affiliates, Inc.
If any of your information changes, please let us know so that we can update
your records and continue to serve you as you have requested.
NOT PART OF PROSPECTUS
ii
WE WANT TO KNOW YOUR PREFERENCE
If you do not want us to share the previously described information with
Prudential businesses or non-Prudential businesses, to inform you of other
products or services we believe may be of interest to you, complete item #1. In
addition, if you do not want to receive communications regarding other products
or services by mail or phone, complete item #2.
1. / / Do not share my information to inform me of other products or services.
2. Please remove my name from Prudential's corporate marketing lists for
receiving information:
/ / by U.S. mail / / by telephone
TO ENABLE US TO PROCESS YOUR REQUEST, PLEASE PROVIDE YOUR ACCOUNT / POLICY
NUMBER EXACTLY AS IT APPEARS ON YOUR STATEMENT:
- -
- ----------------------------------------
Account/Policy Number (required for processing)
PLEASE PRINT YOUR NAME AND ADDRESS EXACTLY AS IT APPEARS ON YOUR STATEMENT:
- -
- ----------------------------------------
Last Name
- -
- -----------------------------------------------
First Name
- -
- -----------------------------------------------
Address (Line 1)
- -
- -----------------------------------------------
Address (Line 2)
- -
- -----------------------------------------------
City
- -
- -----------------------------------------------
State ZIP Code
- -
- -----------------------------------------------
(Area Code) Phone Number
MAIL TO:
PRUDENTIAL -- CUSTOMER PRIVACY
P.O. BOX 4600
TRENTON, NEW JERSEY 08650
NAMES OF JOINT OWNERS
- -
- ----------------------------------------
Last Name
- -
- -----------------------------------------------
First Name
- -
- -----------------------------------------------
Address (Line 1)
- -
- -----------------------------------------------
Address (Line 2)
- -
- -----------------------------------------------
City
- -
- -----------------------------------------------
State ZIP Code
- -
- -----------------------------------------------
Last Name
- -
- -----------------------------------------------
First Name
- -
- -----------------------------------------------
Address (Line 1)
- -
- -----------------------------------------------
Address (Line 2)
- -
- -----------------------------------------------
City
- -
- -----------------------------------------------
State ZIP Code
IF THERE ARE JOINT OWNERS TO WHICH THIS REQUEST WILL APPLY PLEASE PROVIDE THEIR
INFORMATION ON THE BACK OF THIS FORM.
0001
NOT PART OF PROSPECTUS
iii
FOR MORE INFORMATION
Please read this prospectus before you invest in the Series and keep it for
future reference. For information or shareholder questions contact
PRUDENTIAL MUTUAL FUND SERVICES LLC
P.O. BOX 8098
PHILADELPHIA, PA 19101
(800) 225-1852
(732) 482-7555 (Calling from outside the U.S.)
Outside Brokers should contact
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
P.O. BOX 8310
PHILADELPHIA, PA 19101
(800) 778-8769
Visit Prudential's website at
http://www.prudential.com
Additional information about the Series can
be obtained without charge and can be
found in the following documents
STATEMENT OF ADDITIONAL INFORMATION (SAI)
(incorporated by reference into this prospectus)
ANNUAL REPORT
(contains a discussion of the market conditions and investment strategies that
significantly affected the Series' performance)
SEMI-ANNUAL REPORT
You can also obtain copies of Series documents from the Securities and Exchange
Commission as follows
BY MAIL
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102
BY ELECTRONIC REQUEST
publicinfo@sec.gov
(The SEC charges a fee to copy documents.)
IN PERSON
Public Reference Room in Washington, DC
(For hours of operation, call
1-202-942-8090)
VIA THE INTERNET
on the EDGAR Database at
http://www.sec.gov
CUSIP Numbers NASDAQ Symbols
Class A Shares 744342-10-6 PBGVX
Class Z Shares 744342-60-1 PSH2X
Investment Company Act File No. 811-3264
MF111A
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