Download Prudential Short Duration High Yield Income Fund

PGIM INVESTMENTS | Bringing you the investment managers of Prudential Financial, Inc.
SEEKS HIGH INCOME, NOT HIGH RISK
PRUDENTIAL SHORT DURATION HIGH YIELD INCOME FUND
The Prudential Short Duration High Yield Income Fund takes on the challenge of providing high income at reasonable risk by
investing in short duration (three years or less), higher-rated (BB- and B-rated) high yield bonds. This approach helps reduce
both interest rate and credit risk compared to most high yield bond funds.
HISTORICALLY FAVORABLE RETURNS
WITH LESS RISK
Short duration, higher-rated high yield
bonds have provided 94% of the return
of high yield bonds with 67% of the
volatility, and 84% of the return of
stocks with 40% of the volatility.1
POTENTIALLY LOWER DEFAULT RATES
LARGE AND EXPERIENCED TEAM
The Fund’s focus is on BB- and B-rated
bonds, which has resulted in fewer defaults
and stronger risk-adjusted returns.
17 global leveraged finance portfolio
managers average 18 years of
experience, supported by 30 global
credit analysts averaging 18 years of
experience.
Credit Quality:
Average Default Rate:
BB
1.0%
B
3.2%
CCC
10.5%
Return (%)
Higher performance
PROVIDED STRONGER RISK-ADJUSTED RETURNS1
Stocks
8
0.72%
7
0.56%
High Yield Bonds
0.44%
Short Duration,
Higher-Rated
High Yield Bonds
6
Lower performance
Sharpe Ratio
5
4
5
10
15
Less risk
20
More risk
Standard Deviation (%)
Stocks
High Yield Bonds
Short Duration, Higher-Rated High Yield Bonds
1
Return (%)
7.96
7.09
6.65
Standard Deviation (%)
15.12
9.07
6.10
From 1/1/97 to 6/30/2017.
Source: The statistics stated above are derived from Morningstar Direct and Bloomberg Barclays, as of 6/30/2017. Calculated by PGIM Investments using data from Morningstar. All rights reserved.
Used with permission. Source of default data: Moody’s as of 12/31/2016. Annualized returns and standard deviation for risk/return are based on indexes. Short duration, higher-rated high yield
bonds are represented by the Bloomberg Barclays U.S. High Yield Ba/B 1–5 Year 1% Constrained Index, which represents the performance of U.S. short duration, higher-rated high yield bonds;
high yield bonds are represented by the Bloomberg Barclays U.S. Corporate High Yield Index, which measures the market of U.S.-dollar-denominated, non-investment-grade, fixed rate, taxable
corporate bonds; stocks are represented by the S&P 500 Index, which is a market-weighted index of 500 of the largest U.S. stocks in a variety of industry sectors. All indexes are unmanaged.
Investors cannot invest directly in an index.
Credit quality is calculated using the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s, S&P, or Fitch. The Not Rated category consists of
securities that have not been rated by an NRSRO. Average maturity is the average time to maturity for a bond. Duration measures investment risk that takes into account both a bond’s interest
payments and its value to maturity. Sharpe ratio measures the quality of the returns for an investment on a risk-adjusted basis over a given period. It is defined as the excess returns of an
investment divided by the standard deviation of returns. Excess returns are the returns of the investment minus the risk-free rate of return offered in the market, typically measured by short-term
government instruments such as 3-month T-bills. Standard deviation is the statistical measurement of dispersion that measures how widely a stock’s or portfolio’s returns varied over a certain
period of time. Due to the data availability, statistics may not be as of the current reporting period. Returns are based on past performance and there is no guarantee of future returns.
PRUDENTIAL SHORT DURATION HIGH YIELD INCOME FUND
A. HYSAX C: HYSCX Q: HYSQX Z: HYSZX
CREDIT QUALITY (% OF ASSETS)
FUND STATISTICS (YEARS)
6.2% BBB
45.9% BB
43.1% B
4.5% CCC
0.1% D
0.7% Not Rated
-0.5% Cash/Equiv
GEOGRAPHIC CONCENTRATION (% OF ASSETS)
82.2% United States
6.2% Canada
1.9% Australia
1.8% Luxembourg
1.4% Brazil
1.4% Italy
1.1% France
1.0% Netherlands
0.9% Ireland
2.5% Other
-0.5% Cash/Equiv
PORTFOLIO MANAGEMENT
Average Duration
2.2 years
(Less than 3 years by prospectus)
Average Maturity
3.9 years
(Less than 5 years by prospectus)
Altice USA
Freeport-McMoRan
Tenet Healthcare
NRG Energy
Softbank Group
Dell
Lennar
Dynegy
Univision Communications
Hamlet Holdings
Top Ten of 209
3.3%
2.4%
2.4%
1.9%
1.7%
1.7%
1.6%
1.6%
1.5%
1.5%
AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 6/30/2017
SEC Standardized Returns (Class A)
Total Returns (Class A)
3.15
6.37
3.67
Robert Spano, CFA
20 years of experience
Ryan Kelly, CFA
21 years of experience
Brian Clapp, CFA
26 years of experience
Daniel Thorogood, CFA
21 years of experience
19.6%
Holdings/allocations may vary. Total number of holdings based on issuers. Totals may not sum due to rounding. This is not a
recommendation to buy or sell any security listed.
SEC Standardized Returns (Class Z)
Terence Wheat, CFA
24 years of experience
LARGEST ISSUERS (% OF ASSETS)
1
2
3
4
5
6
7
8
9
10
YTD 1-year 3-year
Robert Cignarella, CFA
22 years of experience
SI
SUBADVISOR
Inception
PGIM Fixed Income
4.17 10/26/2012
• Managing Assets since 1875
–
2.77
2.28
3.17 10/26/2012
• 17 Portfolio Managers
3.02
6.23
3.41
3.90 10/26/2012
• 30 Credit Research Analysts
Past performance does not guarantee future results, and current performance may be lower or higher than the past
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or less than the original cost. For the most recent month-end performance, visit our website at pgiminvestments.com. Maximum
sales charges: Class A, 3.25%. Gross operating expenses: Class A, 1.08%; Class Z, 0.83%. Net operating expenses apply to:
Class A, 1.00%; Class Z, 0.75%, after contractual reduction through 12/31/2018.
ALL INFORMATION IS UPDATED AS OF 6/30/2017.
Source: Benchmarks and statistics, Lipper Inc. All other data from PGIM, Inc. This is not a recommendation to buy or sell any securities listed. Allocations may vary, all data is unaudited and subject
to change. Total return describes the return to the investor after net operating expenses but before any sales charges are imposed. SEC standardized return describes the return to the investor after
net operating expenses and maximum sales charges are imposed. All returns assume share price changes as well as the compounding effect of reinvested dividends and capital gains. Returns may
reflect fee waivers and/or expense reimbursements. Without such, returns would be lower. All returns 1-year or less are cumulative. Credit quality is calculated using the highest rating assigned by a
nationally recognized statistical rating organization (NRSRO) such as Moody’s, S&P, or Fitch. The Not Rated category consists of securities that have not been rated by an NRSRO. Class Z shares do not
have sales charges and may be available to group retirement plans and institutional investors through certain retirement, mutual fund wrap, and asset allocation programs and to institutions at an
investment minimum of $5,000,000
RISK INFORMATION—High yield (“junk”) bonds have greater credit and market risks; liquidity risk, when particular investments may be difficult to sell;
foreign securities have risks of currency fluctuation and political uncertainty; and derivatives have market, credit, and liquidity risks. Fixed income
investments are subject to credit, market, and interest rate risks, and their value will decline as interest rates rise. 'LYHUVLÝFDWLRQ does not assure a profit
or protect against loss in declining markets. As an actively managed fund, the Fund is also subject to management risk and certain investment techniques
may not produce the desired results. The risks are more fully explained in the prospectus and summary prospectus. These risks may result in greater share
price volatility. There is no guarantee the Fund’s objective will be achieved.
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
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Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS) and member SIPC. PGIM Fixed Income is a unit of PGIM, a registered investment advisor. PIMS and PGIM
are Prudential Financial companies. © 2017 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are servicemarks 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 assets. In
providing these materials PGIM Investments is not acting as your fiduciary as defined by the Department of Labor.
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
0245178-00021-00 PI3663 Expiration: 10/31/2017