Download Asset ALLOCAtION FUNDs - PGIM Investments

Asset ALLOCATION FUNDS
One-step diversified investment plan
•• Leading investment managers
•• Conservative, moderate, and
growth models
•• Allocations to equity, bond, and
specialty asset classes
A time-tested approach to investing
Professionals who manage pension plans and institutional
accounts rely on the time-tested strategies of asset allocation
and diversification to help select suitable investments in any
environment. PGIM Investments offers you a simple way to
follow the investing approach favored by large institutions:
PGIM Investments Asset Allocation Funds.
Before looking at the Funds in more detail, it’s important to
see how asset allocation and diversification help experts avoid
the mistakes often made by less experienced investors.
We all have goals—a comfortable retirement, being able to
afford good schools for our children, buying a nicer home,
or even starting a business. No matter what you have planned
for your future, it will probably involve saving and investing
your money.
The question is: What’s the best way to invest for your
financial goals?
We all have goals—a comfortable
retirement, being able to afford good
schools for our children, buying a nicer
home, or even starting a business.
3
Emotional investing is a common mistake
Everyone wants to “buy low and sell high,” but most investors do the opposite.
150,000
Investors buy when
stock prices are highest
100,000
2,000
Lost opportunity
of a rising market
1,600
1,200
800
0
S&P 500 Index
Dollars in millions
50,000
Investors sell when
stock prices are lowest
–50,000
400
–100,000
0
3/96 12/96
12/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14
Equity Cash Flows
S&P 500 Index
Source: Strategic Insight and Yahoo Finance, as of 12/31/2014.
Past performance does not guarantee future results. Quarterly net equity sales measure the amount of net sales into retail equity mutual funds. The S&P 500 Index is an unmanaged, weighted index of
500 U.S. stocks, providing a broad indicator of price movement. Investors cannot invest directly in the Index. Index performance is not representative of the performance of a specific security.
4
Trying to time the market can lead to long-term underperformance.
Average annual returns January 1995–December 2016
Stock investors averaged almost
half the Index returns
S&P 500
Index
7.68%
Bond investors averaged a
fraction of the Index returns
Average Stock
Fund Investor
4.79%
Bloomberg
Barclays
Aggregate
Bond Index
4.96%
Average Bond
Fund Investor
0.48%
Inflation
2.13%
Source: DALBAR Quantitative Analysis of Investor Behavior (QAIB), © 2016 DALBAR, Inc.
DALBAR is an independent, Boston-based financial research firm which is not affiliated with Prudential Financial, Inc. and its affiliates. The “average investor” refers to the universe of all mutual
fund investors whose actions and financial results are restated to represent a single investor. Doing so allows the entire universe of mutual fund investors to be used as the statistical sample.
For “average investor behavior,” QAIB quantitatively measures sales, redemptions, and exchanges provided by the Investment Company Institute (ICI) and describes these measures as investor
behaviors. The measurement of investor behavior is the net dollar volume of these activities that occur in a single month during the period being analyzed. Average stock and bond investor
performance results represent hypothetical returns based on cash flows in and out of all equity funds that track the S&P 500 Index for the average stock investor, and cash flows in and out of
all fixed income funds that track the Bloomberg Barclays Aggregate Bond Index for the average bond investor. The calculations assume a $10,000 initial investment over the specific time period
from 1994 through 2016. Using monthly fund data supplied by the ICI, QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. This method of
calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms,
two percentages are calculated for the period examined: Total investor return rate and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a
percentage of the net of the sales, redemptions, and exchanges for the period. Past performance is no guarantee of future results. Returns do not include sales charges or the effect of any taxes.
If such charges had been included, performance would be lower. Indexes and averages are shown for illustrative purposes and do not represent the performance of any actual investment portfolio.
Investments cannot be made directly in an index. See back cover for index definitions.
5
A diversified long-term plan can help
Stocks have produced the greatest returns over time.
Value of $1 invested 1/1/1926 through 12/31/2016
$100,000
Small Company Stocks
$33,212
10,000
Large Company Stocks
$6,023
1,000
Long-Term
Government Bonds $134
100
Treasury Bills $21
Inflation $14
10
1
0
1926
1932
1938
1944
1950
1956
1962
1968
1974
1980
1986
1992
1998
2004
2010
2015
2016
Keep in mind that with greater returns, there may be greater volatility (risk) involved.
Source: Calculated by PGIM Investments using data presented in Morningstar Software products. All rights reserved. Used with permission. Assumes reinvestment of income and no transaction
costs or taxes. This is for illustrative purposes only and not indicative of any investment. Past performance is no guarantee of future results.
Generally, stock returns are due to capital appreciation and the reinvestment of gains. Bond returns are due mainly to reinvesting interest. Also, stock prices are usually more volatile than bond
prices over the long term. Small company stock returns for 1926–1980 are those of stocks comprising the fifth quintile of the New York Stock Exchange. Thereafter, returns are those of the
Dimensional Fund Advisors (DFA) Small Company Fund. Large company stock returns are based on the S&P Composite Index, a market-weighted, unmanaged index of 500 stocks (currently) in a
variety of industries. It is often used as a broad measure of stock market performance. Investments cannot be made directly in an index. Long-term government bond returns are measured using
a constant one-bond portfolio with a maturity of roughly 20 years. Treasury bill returns are for a one-month bill. Treasuries are guaranteed by the government as to the timely payment of principal
and interest; equities are not. Inflation is measured by the Consumer Price Index (CPI).
6
A competitive-performing asset
class one year may be a poor
performer the next year.
Market leadership changes from year to year.
2012
2013
2014
2015
2016
Global Real Estate
27.83%
Small Cap Growth
43.30%
Mid Cap Value
14.75%
Large Cap Growth
5.67%
Small Cap Value
31.74%
Mid Cap Value
18.51%
Small Caps
38.82%
Global Real Estate
14.25%
Large Cap
0.92%
Small Cap
21.31%
Small Cap Value
18.05%
Mid Cap Growth
35.74%
Large Cap Value
13.45%
Global Real Estate
0.87%
Mid Cap Value
20.00%
Large Cap Value
17.51%
Mid Cap
34.76%
Large Cap
13.24%
Fixed Income
0.55%
Large Cap Value
17.34%
International
17.32%
Small Cap Value
34.52%
Mid Cap
13.22%
Mid Cap Growth
–0.20%
Mid Cap
13.80%
Mid Cap
17.28%
Large Cap Growth
33.48%
Large Cap Growth
13.05%
International
–0.81%
Large Cap
12.05%
Large Cap
16.42%
Mid Cap Value
33.46%
Mid Cap Growth
11.90%
Small Cap Growth
–1.38%
Small Cap Growth
11.32%
Small Cap
16.35%
Large Cap
33.11%
Fixed Income
5.97%
Mid Cap
–2.44%
Mid Cap Growth
7.33%
Mid Cap Growth
15.81%
Large Cap Value
32.53%
Small Cap Growth
5.60%
Large Cap Value
–3.83%
Large Cap Growth
7.08%
Large Cap Growth
15.26%
International
22.78%
Small Caps
4.89%
Small Caps
–4.41%
Global Real Estate
4.43%
Small Cap Growth
14.59%
Global Real Estate
5.01%
Small Cap Value
4.22%
Mid Cap Value
–4.78%
Fixed Income
2.65%
Fixed Income
4.21%
Fixed Income
–2.02%
International
–4.90%
Small Cap Value
–7.47%
International
1.00%
23.62%
45.32%
19.65%
13.14%
30.74%
The performance between the best and worst asset classes in a given year can be considerable. By diversifying your portfolio,
you may help ensure that a portion of your assets are in the “right place at the right time.”
Source: Calculated by PGIM Investments using data presented in Morningstar Software products. All rights reserved. Used with permission. See back cover for index definitions.
7
PGIM Investments Asset Allocation Funds
The PGIM Investments Asset Allocation Funds offer you a diversified long-term investment plan, based on your risk tolerance,
in one investment. Each Fund offers equity, bond, and specialty funds in a wide range of investment styles. And the managers
of the funds are the same PGIM professionals who manage money for major corporations and pension funds around the world.
That means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated
investors.
Choose a portfolio
that’s right for you
Each PGIM Investments Asset Allocation
Fund invests in a mix of stock and
bond mutual funds within the PGIM
Investments fund family in proportions
intended to reflect a given level of
risk tolerance. You and your financial
professional select the portfolio that best
addresses your needs.
Prudential Conservative Allocation Fund
This Fund’s investment objective is current income and a reasonable level of capital
appreciation. Approximate target allocation as of March 2017: 40% stock funds and
60% bond funds.
Percent
Asset Allocation
23.6%
22.1%
11.6%
11.4%
10.2%
6.9%
5.3%
5.0%
3.0%
Short-Term Bond
Intermediate-Term Bond
Small/Mid-Cap
High Yield Bond
International Equity
Large-Cap Value
Large-Cap Growth
Global Real Estate
Long Short
This may be a good choice if you are in or near retirement, or hesitant about putting too much money in the stock market. There
is no guarantee that the Fund’s objective will be achieved.
PRUDENTIAL MODERATE ALLOCATION FUND
This Fund’s investment objective is capital appreciation and a reasonable level of
current income. Approximate target allocation as of March 2017: 65% stock funds
and 35% bond funds.
Diversification does not assure a profit or protect against loss
in declining markets.
8
Percent
Asset Allocation
19.7%
15.5%
13.6%
12.9%
12.0%
10.0%
6.4%
5.0%
4.0%
Small/Mid-Cap
International Equity
Intermediate-Term Bond
Large-Cap Value
Short-Term Bond
Large-Cap Growth
High Yield Bond
Global Real Estate
Long Short
This may be a good choice if you are investing for goals that may be 10 or more years away, or if you’re a retiree and need to add
more growth potential to a portfolio that’s heavily weighted in fixed income. There is no guarantee that the Fund’s objective will
be achieved.
Prudential Growth Allocation Fund
This Fund’s investment objective is long-term capital appreciation. Approximate
target allocation as of March 2017: 90% stock funds and 10% bond funds.
Percent
Asset Allocation
26.9%
24.7%
17.4%
13.0%
5.0%
5.0%
4.1%
1.5%
1.4%
Small/Mid-Cap
International Equity
Large-Cap Value
Large-Cap Growth
Global Real Estate
Long Short
Intermediate-Term Bond
Short-Term Bond
High Yield Bond
You may wish to consider this Fund if you are an investor with a long time horizon or if you can accept greater risk as you seek
higher growth. There is no guarantee that the Fund’s objective will be achieved.
Allocation strategies managed by QMA
PGIM Investments Asset Allocation Funds feature portfolios that are managed by QMA. QMA blends the
output of quantitative computer models with the judgment of its experienced investment professionals
in seeking to reduce risk and improve performance for clients. It uses the following to build and monitor
portfolios for the Funds:
•• Asset class modeling:Develops allocations for each major asset class consistent with portfolio objectives.
•• Portfolio design:Selects PGIM Investments mutual funds to fulfill style combinations required by each
asset class.
•• Quarterly review of fund-style consistency:Periodic reviews ensure that investment-style exposures
are consistent with intended asset class models.
•• Annual review of asset class modeling:Reviews asset class models to reflect identified long-term trends.
•• Day-to-day management:Reviews the portfolios on a daily basis as well as periodically rebalancing each
portfolio to bring them back to their target allocations.
QMA is the primary business name for Quantitative Management Associates LLC.
Actual percentages for all three funds may fluctuate due to market changes. The manager may also vary the allocation ranges for each underlying fund of a portfolio at any time if the manager
believes that doing so will better enable the portfolio to pursue its investment objective. There is no guarantee that the Funds’ objectives will be achieved. Please see the prospectus for the target
asset allocation ranges.
9
Keeping your asset allocation on track
Once you’ve selected your portfolio, QMA oversees your investment on a day-to-day basis to make sure the
portfolio is managed efficiently. Since allocations can drift out of balance due to changes in the market, QMA
periodically rebalances the three asset class portfolios to bring them back to their original allocations.
Why is rebalancing important? Consider this example: If large-cap stocks have a great year and long-term
bonds don’t, your portfolio’s exposure to large-cap stocks would increase, which could increase your risk
beyond your comfort level. If, in the next year, large-cap stocks have a poor year and long-term bonds have
a great year, your portfolio’s exposure to large-cap stocks would decrease, which could reduce your growth
potential and limit your ability to reach your long-term goals.
In PGIM Investments Asset Allocation Fund portfolios, periodic rebalancing by QMA will correct these
imbalances and return your portfolio to its original allocation. Keep in mind that diversification and asset
allocation do not assure a profit or protect against loss in declining markets.
Why diversification and rebalancing are important
Consider the following example: At the end of 2006, you created a portfolio that was 50% stocks and 50%
bonds, but did not rebalance periodically. Due to changes in the market, by the end of 2016 your allocation
to bonds would exceed your original target and, as a result, could disrupt your investment goals.
Hypothetical Portfolio without Rebalancing
December 31, 2016
Hypothetical Portfolio
December 31, 2006
50%
Bonds
50%
Stocks
44%
Bonds
56%
Stocks
Source: Calculated by PGIM Investments using data presented in Morningstar software products. As of 12/31/2016. All rights reserved. Used with permission.
The performance shown does not reflect the actual performance of any investment and is for illustrative purposes only. Equity returns reflect performance of the S&P 500 Index, an unmanaged,
weighted index of 500 U.S. stocks, providing a broad indicator of price movement. Fixed Income returns reflect performance of the Bloomberg Barclays U.S. Aggregate Bond Index, an unmanaged
index composed of securities from the Bloomberg Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index. Total return comprises price
appreciation/depreciation and income as a percentage of the original investment. Past performance is no guarantee of future results. Index performance is not representative of the performance
of a specific security. Investors cannot invest directly in an index.
10
Four leading asset managers
PGIM Investments Asset Allocation Funds invest in a mix of PGIM Investments stock and bond mutual
funds. The managers of these funds manage money for major corporations, foundations, and pension funds
around the world.
When you choose PGIM Investments mutual funds, you benefit from the same processes, research,
risk management, and competitive performance demanded by many of today’s largest investors.
PGIM Investments’ Featured Asset Managers
Jennison Associates
PGIM Fixed Income
The true measure of an investment manager is the ability
to deliver long-term competitive performance. Jennison
Associates has been meeting that standard since 1969. The
Jennison approach combines the experience and judgment
of its portfolio managers with a consistent and disciplined
investment process built on fundamental research and
specialized teamwork.
Since 1875, PGIM Fixed Income has been a research-driven
manager with a keen eye for managing risk. Its distinctive
approach to managing assets gives equal weight to risk
management, credit research, and portfolio management to
seek competitive returns while managing volatility.
PGIM Real Estate
QMA
PGIM Real Estate is among the largest and most experienced
global real estate investors. It has almost 300 investment
professionals on the ground in 12 countries, with a more
than 40-year track record of managing institutional real estate
assets worldwide.
QMA has been a leader in the application of advanced
portfolio management techniques to meet its clients’
investment needs since 1975. It brings a level of
sophistication and experience to individually managed
accounts and mutual funds that is ordinarily available
only to large institutional investors.
QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM.
11
Funds at a glance
Each PGIM Investments Asset Allocation Fund invests in a mix of the following stock and bond mutual funds in proportions
appropriate to a given level of risk. With a single investment, you’ll receive a complete asset allocation based on your needs.
You and your financial professional will decide which portfolio is right for you based on your goals, the time you have to achieve
them, and your attitude toward risk.
Equity
Prudential QMA International Equity Fund (PJIZX)
Managed by QMA; seeks to outperform the MSCI EAFE
benchmark while quantitatively controlling for risk in a
well-diversified portfolio of non-U.S. stocks.
Prudential Jennison 20/20 Focus Fund (PJTQX)
Managed by Jennison Associates; seeks long-term growth of
capital by investing in up to 20 value and 20 growth stocks of
mid- to large-cap companies.
Prudential Jennison Equity Opportunity Fund (PJGZX)
Managed by Jennison Associates; seeks long-term growth of
capital by investing in established yet undervalued companies
with good growth prospects.
Prudential Jennison Growth Fund (PJFZX)
Managed by Jennison Associates; seeks long-term growth of
capital by investing in growth-oriented stocks of medium and
large U.S. companies.
Prudential Jennison International Opportunities
Fund (PWJQX)
Managed by Jennison Associates; seeks long-term growth of
capital by investing primarily in companies outside the U.S.
Prudential Jennison Mid-Cap Growth Fund, Inc. (PJGQX)
Managed by Jennison Associates; seeks long-term capital
appreciation by investing in stocks of small and midsize U.S.
companies that may offer above-average growth potential.
12
Prudential Jennison Small Company Fund, Inc. (PJSQX)
Managed by Jennison Associates; seeks capital growth by
investing in the stocks of smaller companies with aboveaverage growth prospects that the managers believe are
underpriced by the market.
Prudential Jennison Value Fund (PJVQX)
Managed by Jennison Associates; seeks capital appreciation
by investing in established companies the managers believe
to be undervalued.
Prudential QMA Large-Cap Core Equity Fund (PTEZX)
Managed by QMA; seeks to outperform the S&P 500
benchmark, while helping to quantitatively control for risk in a
tax-efficient manner, by investing in a well-diversified portfolio
of growth and value stocks.
Prudential QMA Mid-Cap Value Fund (PMVQX)
Managed by QMA; seeks long-term growth of capital by
investing in stocks of mid-cap U.S. companies that the Fund’s
management considers undervalued.
Prudential QMA Small-Cap Value Fund (TSVQX)
Managed by QMA; seeks above-average capital appreciation
by investing in stocks of small-cap U.S. companies that the
Fund’s management team considers undervalued.
Prudential QMA Strategic Value Fund (SUVZX)
Managed by QMA; seeks long-term growth by investing in
stocks of large U.S. companies believed by the managers to
be undervalued.
Taxable Fixed Income
Specialty
Prudential Absolute Return Bond Fund (PADQX)
Managed by PGIM Fixed Income; seeks positive returns over
the long term, regardless of market conditions, by investing in
a wide range of fixed income sectors and securities.
Prudential Global Real Estate Fund (PGRQX)
Managed by PGIM Real Estate; seeks to provide capital
appreciation and income by investing primarily in domestic
and international real estate securities.
Prudential Emerging Markets Debt Local Currency
Fund (EMDQX)
Managed by PGIM Fixed Income; seeks total return through
current income and capital appreciation by investing primarily
in currencies of, and fixed income instruments denominated
in, local currencies of emerging market countries.
Prudential QMA Long-Short Fund (PLHZX)
Managed by QMA; seeks long-term capital appreciation by
investing in both long and short equity positions across the full
spectrum of market capitalization.
Prudential Floating Rate Income Fund (PFRIX)
Managed by PGIM Fixed Income; seeks to maximize current
income and, secondarily, generate capital growth by investing
in senior floating rate loans.
Prudential Government Income Fund (PGVZX)
Managed by PGIM Fixed Income; seeks high current income
by investing in U.S. government and U.S. Treasury securities.
Prudential High Yield Fund (PHYQX)
Managed by PGIM Fixed Income; seeks maximum current
income by investing in below-investment-grade bonds
commonly known as high yield or “junk” bonds.
Prudential Short Duration Multi-Sector Bond Fund (SDMQX)
Managed by PGIM Fixed Income; seeks total return by
investing in a diversified portfolio of bonds from multiple fixed
income sectors.
Prudential Short-Term Corporate Bond Fund, Inc. (PSTQX)
Managed by PGIM Fixed Income; seeks high current
income by investing in investment-grade corporate debt with
maturities of six years or less.
Prudential Total Return Bond Fund (PTRQX)
Managed by PGIM Fixed Income; seeks current income
and capital appreciation by investing in bonds issued by the
U.S. government, mortgage- and asset-backed securities,
corporate bonds, and foreign securities.
Prudential Jennison Natural Resources Fund, Inc. (PJNQX)
Managed by Jennison Associates; seeks long-term
growth of capital by investing in the stocks of companies that
own, explore, mine, process, or otherwise develop natural
resource commodities.
As funds of funds, the PGIM Investments Asset Allocation
Funds invest in Class Q shares of the Underlying Funds, all of
which are other mutual funds in the Prudential Investments
fund family. If an Underlying Fund does not offer Class Q
shares, then the Funds will invest in Class Z shares of the
Underlying Fund. Similar to Class Z shares, Class Q shares
carry no load, distribution, or service fees, but they pay lower
transfer agency fees than Class Z shares.
While there are no duplicative advisory fees, you will pay
indirectly for certain expenses of the underlying funds, in
addition to the expenses of the PGIM Investments Asset
Allocation Fund you own, such as fees for custodian services,
directors’ fees, legal and accounting services, and transfer
agency services.
We will make every effort to avoid duplicative expenses where
possible. Please refer to the prospectus for more information
about the fees and expenses associated with the Funds. There
is no guarantee that the Funds’ objectives will be achieved.
13
PGIM Investments Asset Allocation Funds
Questionnaire
PGIM Investments Asset Allocation Funds help simplify your investment decisions because they offer a diversified asset
allocation in a single investment. Each Fund corresponds to a specific type of investor, from conservative to growth-oriented.
This questionnaire will help you and your financial professional determine your investor profile—your time horizon and risk
tolerance—and select a fund that may be appropriate for you. The hypothetical performance scenarios illustrated within this
questionnaire are not meant to be representative of the performance of the PGIM Investments Asset Allocation Funds.
This questionnaire has been designed to initiate a discussion on your investment goals and risk tolerance between you and
your financial advisor and is not intended to be a substitute for a profile on investment suitability.
investor Name
dATE
Financial Professional
Account Number
This questionnaire measures your ability (time horizon) and willingness (risk tolerance) to accept uncertainties in your
investment’s performance. The total score indicates which of the three risk profiles is most appropriate for you (see page 18).
The results of this document are based on the data and assumptions you provide. Consequently, inaccurate or
unreasonable data and/or assumptions may have a considerable impact on the results.
Time Horizon
As you answer each question, record your points (indicated in parentheses) in the space provided on page 16.
1.
14
What is your age? If this is a joint account, what is the average age of the participants?
Less than 31 years [6]
31–40 years [5]
41–50 years [4]
51–60 years [3]
61–70 years [2]
More than 70 years [0]
2.
How long do you plan to invest your money before you begin to make withdrawals?
0–2 years [0]
3–5 years [10]
6–10 years [20]
11–15 years [23]
16–20 years [25]
Over 20 years [27]
3.
Over the next five years, do you expect your financial situation to:
Dramatically improve? [9]
Improve somewhat? [7]
Stay about the same? [5] Worsen? [0]
4.
There is a natural trade-off between potential investment performance and the risk of a decline in portfolio
value. Usually, the higher the return, the greater the risk. Select the investment below that would be most likely
to meet your expectations for returns in “average” and “good” years without making you uncomfortable during
“bad” years. The returns depicted below are hypothetical and are being used to determine your risk tolerance.
Typical Return
Bad Year
Average Year
Good Year
Score
Investment A
0%
+ 4%
+ 8%
[0]
Investment B
–2%
+ 6%
+14%
[6]
Investment C
–4%
+ 8%
+17%
[11]
Investment D
–6%
+ 9%
+ 20%
[17]
Investment E
–10%
+10%
+ 25%
[20]
The previous question (Question 4) dealt with what might be considered “normal” market conditions.
Now we would like to have you answer a question that deals with periods of “unusual” market conditions.
5.
n rare occasions, unusually large and/or prolonged market declines may occur. As a result, investors may
O
suffer greater-than-normal interim portfolio losses. The table below shows the cumulative losses that might
be expected for four hypothetical $100,000 portfolios over large and/or prolonged market declines lasting for
12-, 24-, and 36-month periods. Please select the hypothetical portfolio with the maximum cumulative interim
losses you may be able to tolerate.
12 Months
24 Months
36 Months
Score
Portfolio A
– $36,000
– $47,000
– $52,000
[20]
Portfolio B
– $27,000
– $36,000
– $39,000
[15]
Portfolio C
– $13,000
– $16,000
– $15,000
[8]
Portfolio D
– $5,000
– $2,000
—
[2]
15
6.
hen investing, you must consider several risks. The risk of a “decline in value” is the most common definition
W
of risk and the one many people think of avoiding first. However, you cannot reduce this risk without assuming
others, such as the risk of inflation. Please indicate in Part A which type of risk concerns you most. In Part B,
indicate your next most important concern. (Do not choose the same answer for Part A and Part B.)
Part APart B
7.
• The possibility that my investment may not grow enough to meet my future needs
[14]
[7]
• The risk of a sharp decline in value in a short period of time (one to six months)
[0]
[0]
• A decline in portfolio value over the course of one to two years
[6]
[3]
• The risk that my portfolio may not grow enough to keep pace with inflation
[8]
[4]
• The risk of not earning a rate of return greater than the general stock market
[20]
[10]
• The risk that my portfolio will not generate enough current income
[2]
[1]
hich statement most accurately describes your attitude and expectations when investing over a market cycle of
W
five to seven years?
It is more important to do well in “up” markets than it is to limit losses in “down” markets. [8]
I am comfortable with “normal” returns in both “up” and “down” markets. [4]
It is more important to limit losses in “down” markets than it is to do well in “up” markets. [0]
8.
The graph below shows the returns of a hypothetical investment over time. If you owned this investment, given its
historical and current returns, what action would you take today (year 18)?
I would immediately sell all of the investment and cut my losses. [0]
I would sell some of the investment to protect myself from further loss. [2]
I would continue to hold the investment with the expectation of higher future returns. [6]
I would invest more now since the price is lower. [8]
Return
30%
25%
20%
15%
10%
5%
0
–5%
–10%
–15%
–20%
1
2
3
4
5
6
7
8
9
YEAR
16
10
11
12
13
14
15
16
17
18
Scoring
Add up your total score and place it in the column to the right. You will need this
number as you refer to the grid below.
Please remember that all the numerical performance illustrations in this
questionnaire are hypothetical and do not represent the past or future
performance of any investment. There is no guarantee that your targeted returns
and investment objectives will be achieved. Past performance is not a guarantee
of future results.
1.
2.
3.
4.
5.
6.
7.
8.
Total:
Determine Which Asset Allocation Fund May Be Right for You
Using your total score, select the PGIM Investments Asset Allocation Fund
that is appropriate for you. It is recommended that you discuss these results with
your financial professional and review the Fund’s prospectus before investing.
Summary Scoring Grid
Total Risk Score
3–40
Prudential Conservative Allocation Fund
41–92
Prudential Moderate Allocation Fund
93–128
Prudential Growth Allocation Fund
17
The Importance of Professional Guidance
The knowledge and experience of a financial professional can be a valuable advantage. Your financial
professional can help you determine if a mutual fund is the right choice for you, depending on your goals,
investment time horizon, tolerance for risk, and existing investments. He or she can offer the guidance you
need to decide if the PGIM Investments Asset Allocation Funds are a suitable choice for you.
18
PRUDENTIAL CONSERVATIVE
ALLOCATION FUND
PRUDENTIAL MODERATE
ALLOCATION FUND
PRUDENTIAL GROWTH
ALLOCATION FUND
Share Class / NASDAQ
A: JDUAX
C: JDACX
R: JDARX
Z: JDAZX
Share Class / NASDAQ
A: JDTAX
C: JDMCX
R: JMARX
Z: JDMZX
Share Class / NASDAQ
A: JDAAX
C: JDGCX
R: JGARX
Z: JDGZX
Risk Information—Mutual fund investing involves risks.
Some funds are riskier than others. The risks associated with
investing in these funds include but are not limited to: derivative
securities, which may carry market, credit, and liquidity risks
(all the funds); short sales, which involve costs and the risk of
potentially unlimited losses (PADQX, PHYQX, PJTQX, PJGZX,
PJFZX, PLHZX, PJGQX, PJNQX, PJSQX, PJVQX, PMVQX,
PSTQX, TASVX, PTRQX); leveraging, which may magnify losses
(PADQX, PGVZX, PHYQX, PLHZX, PSTQX, PTRQX); high yield
(“junk”) bonds, which are subject to greater market risks
(PADQX, EMDQX, FRFZX, PHYQX, PSTQX, PTRQX); small/
mid-cap stocks, which may be subject to more erratic market
movements than large-cap stocks (PLHZX, PJGQX, PJSQX,
PMVQX, TASVX); foreign securities, which are subject to
currency fluctuation and political uncertainty (PADQX, FRFZX,
PURZX, PJIZX, PJTQX, PJGZX, PJFZX, PLHZX, PJGQX, PJNQX,
PJSQX, PJVQX, PMVQX, TASVX, PTRQX, PWJZX); real estate,
which poses certain risks related to overall and specific economic
conditions as well as risks related to individual property, credit,
and interest rate fluctuations (PURZX); and mortgage-backed
securities, which are subject to prepayment and extension risks
(PADQX, PGVZX, PSTQX, PTRQX). Sector funds and specialty
funds may not be suitable for all investors. Such funds are nondiversified, so a loss resulting from a particular security will have
greater impact on the fund’s return (PURZX, PJTQX, PJNQX).
Investments in emerging markets are subject to greater volatility
and price declines (PADQX, EMDQX).
Other risks include call and redemption risk, where the issuer may
call a bond held by the Fund for redemption before it matures and
the Fund may lose income (PADQX, FRFZX); risk of investment
in loans, which includes collateral and uncollateralized loans
and their possible inability to meet obligations (PADQX, FRFZX);
liquidity risk, which exists when particular investments are
difficult to sell (PADQX, EMDQX, FRFZX); currency risk, in
that the value of a particular currency will change in relation
to other currencies (EMDQX); and geographic concentration
risk, where the impact of a single country or region can result
in more pronounced risks (EMDQX). Fixed income investments
are subject to interest rate risk, and their value will decline as
interest rates rise (PADQX, EMDQX, FRFZX, PGVZX, PHYQX,
PSTQX, PTRQX, SDMZX). Diversification does not assure a profit
or protect against loss in declining markets (PADQX, EMDQX,
FRFZX, PJTQX, PJGQX, PMVQX, PTRQX).
The risks associated with each fund are explained more fully
in each fund’s respective prospectus. There is no guarantee a
fund’s objectives will be achieved.
Class Q and Z shares are available to individual investors
through certain retirement and wrap fee programs, and to
institutions at an investment minimum of $5,000,000.
Performance by share class may vary. In addition to the ones
shown above, other classes, which contain either a sales load
or a contingent deferred sales charge, are also available.
These expenses will generally lower total fund return. Please
see the prospectus for additional information about fees,
expenses, and investor eligibility requirements.
Definitions—Consumer Price Index (CPI). Measures the variation in prices paid by typical
consumers for retail goods and other items. Bloomberg Barclays Government Index. Composed of
the Treasury Bond Index (all public obligations of the U.S. Treasury, excluding flower bonds and
foreign-targeted issues) and the Agency Bond Index (all publicly issued debt of U.S. government
agencies, quasi-federal corporations, and corporate debt guaranteed by the U.S. government).
Bloomberg Barclays Corporate Bond Index. Covers the U.S. investment-grade fixed rate bond market
(measuring bonds with maturities of at least one year), with index components for government and
corporate securities, mortgage pass-through securities, and asset-backed securities. These major
sectors are subdivided into more specific indices that are calculated and reported on a regular basis.
Bloomberg Barclays Mortgage-Backed Securities Index. A market value-weighted index which
covers the mortgage-backed securities component of the Barclays U.S. Aggregate Bond Index.
The index is composed of agency mortgage-backed pass-through securities of the Government
National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie
Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) with a minimum $150
million par amount outstanding and a weighted-average maturity of at least 1 year. The index
includes reinvestment of income. Bloomberg Barclays Asset-Backed Securities Index. The MBS
component of the Bloomberg Barclays U.S. Aggregate Index and covers agency mortgagebacked pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie
Mac (FHLMC). Large Cap (LC)—Russell 1000® Index. Measures the performance of the 1,000 largest
companies in the Russell 3000® Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. Large Cap Growth (LCG)—Russell 1000® Growth Index.
Measures the performance of those Russell 1000 companies with higher price-to-book ratios and
higher forecasted growth values. Large Cap Value (LCV)—Russell 1000® Value Index. Measures the
performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values. Global Real Estate (GRE)—S&P Developed Property Index. This is a broad market
index of more than 400 companies from 21 countries, and is available for a wide range of regions
(including ex-U.S.) as well as by country. The Global Property Index is intended to provide a measure
of the global property market, reflecting the risk and return characteristics of the broader universe
on an ongoing basis. Returns are quoted gross of foreign withholding taxes. Mid Cap (MC)—Russell
Midcap® Index. Measures the performance of the 800 smallest companies in the Russell 1000 Index,
which represent approximately 30% of the total market capitalization of the Russell 1000 Index. Mid
Cap Growth (MCG)—Russell Midcap® Growth Index. Measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks
are also members of the Russell 1000 Growth Index. Mid Cap Value (MCV)—Russell Midcap® Value
Index. Measures the performance of those Russell Midcap companies with lower price-to-book ratios
and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index.
Small Cap (SC)—Russell 2000® Index. Measures the performance of the 2,000 smallest companies
in the Russell 3000 Index, which represents approximately 8% of the total market capitalization
of the Russell 3000 Index. Small Cap Growth (SCG)—Russell 2000® Growth Index. Measures the
performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted
growth values. Small Cap Value (SCV)—Russell 2000® Value Index. Measures the performance of
those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
International (Intl)—Morgan Stanley Capital International Europe, Australasia, Far East Index–
MSCI EAFE® Index. This is a weighted, unmanaged index of performance that reflects stock price
movements within Europe, Australasia, and the Far East. Fixed Income (FI)—Bloomberg Barclays
Aggregate Bond Index. This is a market-value-weighted index that includes U.S. government,
corporate, mortgage-backed securities, and asset-backed securities.
Source: Lipper Inc., Prudential Financial, Bloomberg, 12/2016. All indexes are unmanaged. An
investment cannot be made directly in an index.
19
Helping investors
participate in
global markets
At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in
opportunities across global markets while meeting their toughest investment challenges. We are part of
PGIM—the 9th-largest global investment manager1 with more than $1 trillion in assets under management.2
PGIM’s scale and investment process allow us to deliver actively managed funds and strategies to meet the
needs of investors around the globe.
1
Pensions & Investments Top Money Managers list, 5/30/16. Represents assets managed by Prudential Financial as of 12/31/2015.
2
PGIM data as of 12/31/16.
For more information, contact your financial professional or visit our website at pgiminvestments.com
Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this
and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. Jennison Associates and PGIM, Inc. (PGIM) are registered investment
advisors and Prudential Financial companies. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real
Estate are units of PGIM. © 2017 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, the Prudential logo, and the Rock symbol are service marks of
Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
These materials are for informational or educational purposes only. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement
savings. In providing these materials PGIM Investments is not acting as your fiduciary as defined by the Department of Labor. Please consult with a qualified investment professional if you wish to
obtain investment advice.
Mutual Funds | Are not insured by the FDIC or any federal government agency | May lose value | Are not a deposit of or guaranteed by any bank or any bank affiliate
0202414-00013-00 PI151 Expiration: 07/31/2017