<PAGE>
(ICON)
SEMIANNUAL REPORT JULY 31, 2000
Prudential
20/20 Focus Fund
Fund Type Stock
Objective Long-term growth of capital
Build On The Rock
(GRAPHIC)
The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.
This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a
current prospectus.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
The Prudential 20/20 Focus Fund's two investment managers
each invest primarily in up to 20 stocks selected for
their superior potential for long-term capital growth.
Bradley Goldberg focuses on out-of-favor companies that
he believes will experience a dynamic earnings cycle over
the next 12 to 18 months, as well as companies that
display good growth characteristics but are, in his view,
mispriced by the market. Spiros "Sig" Segalas employs a
growth investment style, concentrating on stocks of
established companies that he believes will have superior
absolute and relative earnings growth. There can be no
assurance that the Fund will achieve its investment
objective.
Portfolio Composition
Sectors expressed as a percentage of net assets as of 7/31/00
35.4% Technology
32.0 Consumer Growth
11.2 Consumer Cyclical
8.0 Industrial
7.5 Finance
3.0 Utility
2.9 Cash & Equivalents
Top Five Value Holdings
Expressed as a percentage of net assets as of 7/31/00
4.4% Tenet Healthcare Corp.
Health Care
4.3 HCA-The Healthcare Corp.
Health Care
4.3 Wellpoint Health Networks, Inc.
Health Care
3.0 Hilton Hotels Corp.
Hotels
3.0 Loews Corp.
Diversified Consumer Products
Top Five Growth Holdings
Expressed as a percentage of net assets as of 7/31/00
4.1% Goldman Sachs Group, Inc.
Banks & Financial Services
3.7 Cisco Systems, Inc.
Computer Software & Services
3.6 EMC Corp.
Computer Software & Services
3.6 Hewlett-Packard Co.
Computer Hardware
3.4 Citigroup, Inc.
Banks & Financial Services
Holdings are subject to change.
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 7/31/00
<TABLE>
<CAPTION>
Six One Since
Months Year Inception2
<S> <C> <C> <C>
Class A -0.65% 10.81% 37.42%
Class B -1.04 9.95 35.14
Class C -1.04 9.95 35.14
Class Z -0.49 11.05 37.99
Lipper Large-Cap
Core Fund Avg.3 4.21 12.97 54.18
</TABLE>
Average Annual Total Returns1 As of 7/31/00
<TABLE>
<CAPTION>
One Since
Year Inception2
<S> <C> <C>
Class A 5.27% 13.65%
Class B 4.95 14.31
Class C 7.85 15.00
Class Z 11.05 16.71
</TABLE>
Past performance is not indicative of future results.
Principal and investment return will fluctuate, so that
an investor's shares, when redeemed, may be worth more or
less than their original cost.
1 Source: Prudential Investments Fund Management LLC and
Lipper Inc. The cumulative total returns do not take into
account sales charges. The average annual total returns
do take into account applicable sales charges. The Fund
charges a maximum front-end sales charge of 5% for Class
A shares. Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%, 3%,
2%, 1%, and 1% for six years. Class B shares will
automatically convert to Class A shares, on a quarterly
basis, approximately seven years after purchase. Class C
shares are subject to a front-end sales charge of 1% and
a CDSC of 1% for 18 months. Class Z shares are not
subject to a sales charge or distribution and service
(12b-1) fees.
2 Inception date: Class A, B, C, and Z, 7/1/98.
3 Lipper average returns are for all funds in each share
class for the six-month, one-year, and since
inception periods in the Large-Cap Core Fund category.
The Lipper average is unmanaged. The Lipper Large-Cap
Core Fund average includes funds that invest at least 75%
of their equity assets in companies with market
capitalizations (on a three-year weighted basis) greater
than 300% of the dollar-weighted median of the S&P(r)
Mid-Cap 400 Index, have wide latitude in the companies in
which they invest, and have average price/earnings ratio,
price-to-book ratio, and three-year earnings growth
figure.
S&P(r) is a registered trademark of The McGraw-Hill
Companies, Inc.
1
<PAGE>
(LOGO) September 15, 2000
Dear Shareholder,
The concentrated nature of the Prudential 20/20 Focus
Fund makes it more vulnerable to volatility than a larger
diversified portfolio. Although the Fund's return was
much above the Lipper Large-Cap Core Fund Average for its
fiscal year ended January 31, 2000, it trailed the Lipper
Average during the very unsettled stock markets in the
six months ended July 31, 2000. Its return was
essentially flat at -0.65%, while the Lipper Large-Cap
Core Fund Average gained 4.21%.
The Fund's performance was negatively affected by its
focuses in basic materials, wireless telephony, and the
Internet. The strong style characteristics of its
holdings in these sectors-value for basic materials and
growth for telecommunications-performed poorly, on
average, in a market that swung frequently from one
style to another. Moreover, growth in both of these sectors
was threatened by the series of Federal Reserve interest
rate increases. The Fund's return was sustained primarily
by strong gains in its technology and healthcare holdings.
Sincerely,
John R. Strangfeld, President
Prudential 20/20 Focus Fund
2
<PAGE>
Prudential 20/20 Focus Fund
Semiannual Report July 31, 2000
Investment Adviser's Report
What went wrong
The six-month reporting period ended July 31, 2000, was a
disappointment for the Prudential 20/20 Focus Fund. Its
slightly negative return trailed both the Standard &
Poor's 500 Composite Stock Price Index (S&P 500 Index)
and the Lipper Large-Cap Core Fund Average. The stock
market showed no clear leadership over this period-
investors could not sustain enthusiasm for long for
either inexpensive value stocks or high-growth stocks.
Moreover, basic materials and communications services-two
economic groups in which the Fund was focused-were the
two worst performing groups in the S&P 500 Index, falling
16% and 20%, respectively, over this period. We believe
these price reversals are temporary.
Basic materials stocks-including Mead and Temple Inland
(both paper) and Freeport-McMoran Copper & Gold (metals)-
fell primarily because investors were concerned that the
U.S. economy would be derailed by rising interest rates.
In addition, global commodity prices are denominated in
U.S. dollars, and international demand was suppressed by
the strong dollar. Although these stocks had performed
well in 1999, prices of paper and
copper are rising, and the stocks remain inexpensive. The
earnings of our paper companies are growing.
The two factors that we believe depressed share prices in
this reporting period should be short-lived; there are
increasing signs that the U.S. economy is
stabilizing at a sustainable rate of growth, while
overseas economies continue to grow. The strong dollar is
widely viewed as overvalued, particularly compared with
the euro, and is expected to correct. We believe the
stocks of these companies will recover the upward
momentum they exhibited in 1999. During the period, we
added Georgia-Pacific, the world's second largest forest
and paper products company. Its recent acquisition of
Fort James makes it number one in tissue paper.
3
<PAGE>
Prudential 20/20 Focus Fund
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings-Growth Portfolio As of 7/31/00
----------------------------------------------------------------------
4.1% Goldman Sachs Group, Inc./Banks & Financial Services
Privately owned until 1999, Goldman Sachs is the world
leader in mergers and acquisitions and one of the top
underwriters of initial public offerings in the United
States. It is particularly well positioned to benefit
from the rapid pace of industrial reorganization in
Europe, with many international mergers and an increase
in entrepreneurial ventures.
3.7% Cisco Systems, Inc./Computer Software & Services
Leading data networking equipment manufacturer. Provides
most of the Internet switching infrastructure for both
carriers and corporate entry points, as well as internal
corporate networks. A long-term high-growth business.
3.6% EMC Corp./Computer Software & Services
The world's leading supplier of intelligent enterprise
storage and retrieval technology, designing systems for
open system, mainframe, and midrange environments. EMC's
enterprise storage products allow organizations to
leverage their growing volumes of information in ways
that may enhance their profitability and competitive
advantage. Demand for storage is even higher than had
been anticipated.
3.6% Hewlett-Packard Co./Computer Hardware
As the world's second largest computer company, Hewlett-
Packard provides imaging and printing systems, computing
systems, and information technology services for business
and home. To further fuel its growth, HP is restructuring
itself as an Internet specialist providing Web hardware,
software, and support to corporate customers.
3.4% Citigroup, Inc./Banks & Financial Services
A diversified financial services holding company that
provides a broad range of financial services to consumer
and corporate customers around the world. The company's
services include investment banking, retail brokerage,
corporate banking, and cash management products and
services.
Holdings are subject to change.
4
<PAGE>
www.prudential.com (800) 225-1852
Comments on Largest Holdings-Value Portfolio As of 7/31/00
----------------------------------------------------------------------
4.4% Tenet Healthcare Corp./Health Care
Second largest hospital chain in the United States. Sales
were up 10% in 1999. Should benefit from recovery of
industry pricing, its continued cost-control efforts, and
the growth in healthcare demand as the average age in the
United States rises. Government pressure on pricing has
eased substantially.
4.3% HCA-The Healthcare Corp./Health Care
Largest hospital chain in the United States. New
management stopped aggressive expansion to focus on
getting its operations under control. Settlement of
government billing suit cost it less than expected.
Pricing for the hospital industry appears to have
bottomed. Should benefit from growth in healthcare demand
as the average age in the United States rises.
4.3% Wellpoint Health Networks, Inc./Health Care
One of the best-managed U.S. healthcare companies, in our
view. It is benefiting from better pricing, good control
over its costs, increasing business, and no exposure to
Medicare problems.
3.0% Hilton Hotels Corp./Hotels
Having sold its gaming properties, Hilton is focusing on
hotels, almost 1,800 of them, under brand names such as
Doubletree and Embassy Suites, as well as Hilton. Sales
growth in 1999 was 21.5%, but the share price is well
below last year's highs and only about 14 times estimated
2000 earnings.
3.0% Loews Corp./Diversified Consumer Products
Primarily an insurance company, through its CNA Financial
subsidiary. Property and casualty insurance prices have
begun to improve, but Loews' share price is still down
and only at about eight times estimated 2000 earnings,
even after substantial gains during the year.
Holdings are subject to change.
5
<PAGE>
Prudential 20/20 Focus Fund
Semiannual Report July 31, 2000
Telecommunications services stocks-including NTL (which
offers a wide range of services to U.K. customers via its
digital fiberoptic network), Vodafone (the largest
wireless service in the world), Global Crossing
(fiberoptic networks), and America On-Line-and mobile
telephone hardware companies-Nokia and Ericsson-had a
sharp drop. They are correcting from a substantial upward
run in 1999. Telecommunications services companies must
be large current consumers of capital in order to build
the infrastructure that is expected to produce a long run
of high returns. Nonetheless, their share prices had
climbed to high multiples of their near-term income. As
interest rates rose, investors became wary of paying the
high prices for earnings that were primarily in the
future. The hardware companies, which also sold for high
multiples of their earnings, suffered when it appeared
that the explosive growth of mobile telephone handsets
may slow. "Sig" Segalas thinks the growth scenarios for
these two industries are still sound, particularly for
the leading companies that are held by the 20/20 Focus
Fund portfolio.
Loral Space & Communications, a large manufacturer and
operator of satellites, is a value investment in this group.
Globalstar, its global telecommunications system, is
taking longer to become operational and build a
customer base than had been anticipated, but Globalstar
works, whereas there were performance questions about its
now-bankrupt competitor Iridium. Brad Goldberg thinks
satellite transmission is essential for providing
wireless service to rural or mountainous areas, where
building a wired service network can be very expensive.
The satellite system currently is also the only truly
global wireless system. Moreover, he believes that even
if Loral's investment in Globalstar is completely
discounted, the rest of the company is worth more than
the stock currently sells for.
What went right
With few exceptions, the Fund's largest holdings in both
growth and value styles were among the largest
contributors to its return. Its growth holdings are
heavily focused in the technology sector, and EMC,
Hewlett-Packard,
6
<PAGE>
www.prudential.com (800) 225-1852
and Cisco Systems (see Comments on Largest Holdings) rose
between 20% and 60% in the half-year. We also had
particularly strong contributions from Texas Instruments,
whose 9% half-year gain was strong for the period's
sluggish market, and from JDS Uniphase and Hewlett-
Packard, which we added during the period.
The other two of our five largest growth holdings are
financial firms, another sector that performed well over
the period. Citigroup had a gain in the same range as our
technology holdings. We sold our position in Merrill
Lynch & Company and took some profits on American
International Group, in favor of Goldman Sachs (see
Comments on Largest Holdings), which was added toward the
end of the period. "Sig" Segalas believes Goldman is
better positioned to benefit from the surge in investment
banking-initial public offerings (IPOs) of stock, as well
as mergers and acquisitions of older firms-taking place
in Europe.
Our three largest value holdings are in the healthcare
sector, which strengthened considerably over the period.
Tenet Healthcare, HCA-The Healthcare Corporation, and
Wellpoint Health Networks (see Comments on Largest
Holdings) returned between 28% and 34% over the six-month
reporting period. As HMOs (such as Wellpoint) improve
their pricing power and their earnings, they are able to
pay hospital managers (such as Tenet and HCA) a fairer
return for their services.
Looking Ahead
The prices of the goods and services of our value
holdings are rising: tobacco, healthcare, paper, copper,
and chemical prices are all increasing. These higher
prices are flowing through to better earnings. This
earnings growth is being realized in companies whose
stocks were purchased very inexpensively. Moreover, there
are signs of slowing economic growth in the United
States. These signs have led the U.S. Federal Reserve to
hold interest rates steady for a while. When investors become
more confident that economic growth is progressing at a healthy
and not overheated pace, we expect they will once
7
<PAGE>
Prudential 20/20 Focus Fund
Semiannual Report July 31, 2000
again be prepared to pay a premium for long-term growth.
However, we think the retreat from Internet-related
stocks in March signaled a turn from blind
speculation. At least for a while, investors will prefer
companies that have demonstrated records of earnings
growth. This caution is beneficial to our holdings,
which, in our view, include the strongest, best-managed
competitors in rapidly growing industries, as well as
companies whose somewhat slower growth is matched to
significantly lower share prices.
Prudential 20/20 Focus Fund Management Team
8
<PAGE>
Prudential 20/20 Focus Fund
Portfolio of Investments as of July 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 97.1%
Common Stocks
-------------------------------------------------------------------------------------
Banks & Financial Services 7.5%
561,900 Citigroup, Inc. $ 39,649,069
477,300 Goldman Sachs Group, Inc. 47,222,868
----------------
86,871,937
-------------------------------------------------------------------------------------
Chemicals 1.9%
459,600 Eastman Chemical Co. 21,543,750
-------------------------------------------------------------------------------------
Computer Hardware 6.1%
1,049,900 Compaq Computer Corp. 29,462,819
382,200 Hewlett-Packard Co. 41,731,463
----------------
71,194,282
-------------------------------------------------------------------------------------
Computer Software & Services 7.3%
661,200 Cisco Systems, Inc.(a) 43,267,275
490,500 EMC Corp.(a) 41,753,812
----------------
85,021,087
-------------------------------------------------------------------------------------
Diversfied Consumer Products 5.8%
554,600 Loews Corp. 34,801,150
1,312,700 Philip Morris Companies, Inc. 33,145,675
----------------
67,946,825
-------------------------------------------------------------------------------------
Drugs & Health Care 17.9%
382,100 American Home Products Corp. 20,275,181
1,460,200 HCA-The Healthcare Corp. 49,646,800
855,800 Pfizer, Inc. 36,906,375
1,688,000 Tenet Healthcare Corp.(a) 51,378,500
567,200 Wellpoint Health Networks, Inc.(a) 49,452,750
----------------
207,659,606
-------------------------------------------------------------------------------------
Electronic Components 3.0%
590,300 Texas Instruments, Inc. 34,643,231
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential 20/20 Focus Fund
Portfolio of Investments as of July 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Forest & Paper Products 6.6%
1,010,400 Georgia-Pacific Group $ 25,070,550
1,007,800 Mead Corp. 25,572,925
600,000 Temple-Inland, Inc. 26,062,500
----------------
76,705,975
-------------------------------------------------------------------------------------
Hotels 3.0%
3,442,300 Hilton Hotels Corp. 35,283,575
-------------------------------------------------------------------------------------
Insurance 0.9%
448,800 SAFECO Corp. 10,350,450
-------------------------------------------------------------------------------------
Media 2.6%
244,000 Univision Communications, Inc. (Class A)(a) 30,317,000
-------------------------------------------------------------------------------------
Office Equipment & Supplies 0.1%
1,000,800 Lanier Worldwide, Inc.(a) 688,050
-------------------------------------------------------------------------------------
Photography 2.9%
604,100 Eastman Kodak Co. 33,149,988
-------------------------------------------------------------------------------------
Precious Metals 1.4%
1,972,400 Freeport-McMoRan Copper & Gold, Inc. (Class A)(a) 16,888,675
-------------------------------------------------------------------------------------
Retail 8.1%
1,256,400 Dillards, Inc. (Class A) 17,196,975
561,700 Kohl's Corp.(a) 31,876,475
408,300 RadioShack Corp. 23,017,912
651,800 Tiffany & Co. 22,324,150
----------------
94,415,512
-------------------------------------------------------------------------------------
Telecommunications 11.3%
1,530,100 AT&T Corp.-Liberty Media Corp. (Class A)(a) 34,044,725
838,600 Global Crossing, Ltd.(a) 20,388,463
1,954,900 Loral Space & Communications, Ltd.(a) 10,141,044
210,600 NTL, Inc.(a) 9,490,162
604,500 Qwest Communications International, Inc.(a) 28,373,719
667,800 Vodafone Group PLC (ADR) (United Kingdom) 28,798,875
----------------
131,236,988
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential 20/20 Focus Fund
Portfolio of Investments as of July 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Telecommunications Equipment 10.7%
1,164,900 Ericsson AB (ADR) (Sweden) $ 22,861,162
1,000,800 Harris Corp. 34,277,400
296,900 JDS Uniphase Corp.(a) 35,071,313
730,000 Nokia Corp. (ADR) (Finland) 32,348,125
----------------
124,558,000
----------------
Total long-term investments (cost $1,085,076,031) 1,128,474,931
----------------
SHORT-TERM INVESTMENTS 2.9%
<CAPTION>
Principal
Amount
(000)
<C> <S> <C> <C>
-------------------------------------------------------------------------------------
Commercial Paper 2.0%
$ 23,339 American Express Credit Corp.,
6.50%, 8/1/00 23,339,000
-------------------------------------------------------------------------------------
Repurchase Agreement 0.9%
10,298 Joint Repurchase Agreement Account,
6.54%, 8/1/00 (Note 5) 10,298,000
----------------
Total short-term investments (cost $33,637,000) 33,637,000
----------------
Total Investments 100.0%
(cost $1,118,713,031; Note 4) 1,162,111,931
Liabilities in excess of other assets (507,758)
----------------
Net Assets 100% $ 1,161,604,173
----------------
----------------
</TABLE>
--------------------------------------------------------------------------------
(a) Non-income producing security.
AB--Aktiebolag (Swedish Stock Company).
ADR--American Depository Receipt.
See Notes to Financial Statements 11
<PAGE>
Prudential 20/20 Focus Fund
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
July 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $1,118,713,031) $1,162,111,931
Cash 103,863
Receivable for investments sold 8,720,021
Receivable for Fund shares sold 954,294
Dividends and interest receivable 384,525
Prepaid expenses 1,130
--------------
Total assets 1,172,275,764
--------------
LIABILITIES
Payable for investments purchased 5,638,855
Payable for Fund shares repurchased 3,262,745
Distribution fee payable 784,233
Management fee payable 755,880
Accrued expenses 219,825
Withholding taxes payable 10,053
--------------
Total liabilities 10,671,591
--------------
NET ASSETS $1,161,604,173
--------------
--------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 94,322
Paid-in capital in excess of par 1,016,616,082
--------------
1,016,710,404
Accumulated net investment loss (3,910,344)
Accumulated net realized gain on investments 105,405,213
Net unrealized appreciation on investments 43,398,900
--------------
Net assets, July 31, 2000 $1,161,604,173
--------------
--------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Prudential 20/20 Focus Fund
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
July 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($269,542,987 / 21,650,440 shares of beneficial interest
issued and outstanding) $12.45
Maximum sales charge (5% of offering price) .66
--------------
Maximum offering price to public $13.11
--------------
--------------
Class B:
Net asset value, offering price and redemption price per
share ($686,866,068 / 56,030,211 shares of beneficial
interest issued and outstanding) $12.26
--------------
--------------
Class C:
Net asset value and redemption price per share
($140,522,858 / 11,463,041 shares of beneficial interest
issued and outstanding) $12.26
Sales charge (1% of offering price) .12
--------------
Offering price to public $12.38
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per
share ($64,672,260 / 5,178,642 shares of beneficial
interest issued and outstanding) $12.49
--------------
--------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential 20/20 Focus Fund
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
July 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Dividends (net of foreign withholding taxes of $17,171) $ 5,142,101
Interest 1,199,202
-------------
Total income 6,341,303
-------------
Expenses
Management fee 4,465,364
Distribution fee--Class A 344,818
Distribution fee--Class B 3,575,810
Distribution fee--Class C 727,768
Transfer agent's fees and expenses 738,000
Reports to shareholders 129,000
Registration fees 125,000
Custodian's fees and expenses 86,000
Legal fees and expenses 25,000
Audit fee 14,000
Trustees' fees and expenses 11,000
Miscellaneous 9,887
-------------
Total expenses 10,251,647
-------------
Net investment loss (3,910,344)
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions 105,756,710
Net change in unrealized appreciation on investments (113,073,255)
-------------
Net loss on investments (7,316,545)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (11,226,889)
-------------
-------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential 20/20 Focus Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
July 31, 2000 January 31, 2000
<S> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (3,910,344) $ (6,002,235)
Net realized gain on investments 105,756,710 118,380,454
Net change in unrealized appreciation on
investments (113,073,255) 60,959,722
-------------- -----------------
Net increase (decrease) in net assets
resulting from operations (11,226,889) 173,337,941
-------------- -----------------
Dividends and distributions (Note 1)
Distributions from net realized gains
Class A (12,726,163) (11,076,868)
Class B (33,732,246) (30,844,040)
Class C (6,904,261) (6,030,035)
Class Z (3,130,610) (2,663,051)
-------------- -----------------
(56,493,280) (50,613,994)
-------------- -----------------
Fund share transactions (net of share
conversions) (Note 6)
Net proceeds from shares sold 173,728,069 561,896,628
Net asset value of shares issued in
reinvestment of distributions 54,500,499 48,732,464
Cost of shares reacquired (212,355,151) (227,459,344)
-------------- -----------------
Net increase in net assets from Fund
share transactions 15,873,417 383,169,748
-------------- -----------------
Total increase (decrease) (51,846,752) 505,893,695
NET ASSETS
Beginning of period 1,213,450,925 707,557,230
-------------- -----------------
End of period $1,161,604,173 $ 1,213,450,925
-------------- -----------------
-------------- -----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited)
Prudential 20/20 Focus Fund (the 'Fund') is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The investment objective of the Fund is long-term growth of
capital. The Fund invests primarily in up to 40 equity securities of U.S.
companies that are selected by the Fund's two investment advisers (up to 20 by
each) as having strong capital appreciation potential. The Fund issued 2,500
shares each of Class A, Class B, Class C and Class Z shares of beneficial
interest for $100,000 on April 14, 1998 to Prudential Investments Fund
Management LLC ('PIFM').
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Investments traded on a national securities
exchange and NASDAQ National Market System securities are valued at the last
reported sales price on the primary exchange on which they are traded or, if
there was no sale, at the mean between the last bid and asked prices or at the
last bid price in the absence of an asked price. Securities for which reliable
market quotations are not readily available are valued by the Valuation
Committee or Board of Trustees in consultation with the Manager and Subadvisers.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost which approximates market value.
Repurchase Agreements: In connection with transactions in repurchase
agreements with United States financial institutions, it is the Fund's policy
that its custodian or designated subcustodians under triparty repurchase
agreements, as the case may be, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited.
All securities are valued as of 4:15 p.m., New York time.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses on sales
of investments are calculated on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income is recorded on the accrual
basis. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.
16
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited) Cont'd.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Dividends and Distributions: Dividends from net investment income are
declared and paid semi-annually. The Fund will distribute at least annually net
capital gains in excess of capital loss carryforwards, if any. Dividends and
distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Taxes: It is the Fund's policy to continue to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Note 2. Agreements
The Fund has a management agreement with PIFM. Pursuant to this agreement, PIFM
has responsibility for all investment advisory services. PIFM has entered into
Subadvisory Agreements with The Prudential Investment Corporation ('PIC') and
Jennison Associates LLC ('Jennison'). The Subadvisory Agreements provide that
each Subadviser furnish investment advisory services in connection with the
management of the Fund. In connection therewith, each Subadviser is obligated to
keep certain books and records of the Fund. PIFM continues to have
responsibility for all investment advisory services pursuant to the Management
Agreement and supervises each Subadviser's performance of such services. PIFM
pays for the services of PIC and Jennison, the cost of compensation of officers
of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund.
The Fund bears all other costs and expenses. Each of the two Subadvisers manages
approximately 50% of the assets of the Fund. In general, in order to maintain an
approximately equal division of assets between the two Subadvisers, all daily
cash inflows (i.e., subscriptions and reinvested distributions) and outflows
(i.e., redemptions and expense items) will be divided between the two
Subadvisers as PIFM deems appropriate. In addition, there will be periodic
rebalancing of the portfolio's assets to take account of market fluctuations in
order to maintain the approximate equal allocation. As a consequence, the
portfolio will allocate assets from the better performing of the two Subadvisers
to the other.
17
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited) Cont'd.
The management fee paid to PIFM is computed daily and payable monthly, at
an annual rate of .75 of 1% of the Fund's average daily net assets up to and
including $1 billion and .70 of 1% of such average daily net assets in excess of
$1 billion. The subadvisory fee paid to PIC by PIFM is computed daily and
payable monthly at an annual rate of .375 of 1% of the average daily net assets
of the Fund. Jennison is compensated by PIFM for its services at the rate of .30
of 1% of the average daily net assets of the portion of the Fund that Jennison
manages up to and including $300 million and .25 of 1% of such average daily net
assets in excess of $300 million.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution (the 'Class A, B and C Plans'), regardless of
expenses actually incurred by them. The distribution fees for Class A, B and C
shares are accrued daily and payable monthly. No distribution or service fees
are paid to PIMS as distributor of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Class A, Class B and Class C Plans were .25 of 1%, 1%
and 1%, respectively, of the average daily net assets of Class A, Class B and
Class C shares for the six months ended July 31, 2000.
PIMS has advised the Fund that it has received approximately $354,300 and
$151,500 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the six months ended July 31, 2000. From these
fees, PIMS paid such sales charges to affiliated broker-dealers which in turn
paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Fund that it has received approximately $1,401,800
and $64,200 in contingent deferred sales charges imposed upon certain
redemptions by Class B and Class C shareholders, respectively, during the six
months ended July 31, 2000.
PIFM, PIMS, PIC and Jennison are wholly owned subsidiaries of The
Prudential Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an
18
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited) Cont'd.
alternative source of funding for capital share redemptions. The Funds pay a
commitment fee of .080 of 1% of the unused portion of the credit facility. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
The expiration date of the SCA is March 9, 2001. Prior to March 9, 2000, the
commitment fee was .065 of 1% of the unused portion of the credit facility. The
Fund did not borrow any amounts pursuant to the SCA during the six months ended
July 31, 2000.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the six months ended July 31,
2000, the Fund incurred fees of approximately $637,900 for the services of PMFS.
As of July 31, 2000, approximately $102,200 of such fees were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended July 31, 2000 aggregated $592,178,356 and $611,867,431,
respectively.
The federal income tax basis of the Fund's investments at July 31, 2000
was $1,118,713,031 and, accordingly, net unrealized appreciation for federal
income tax purposes was $43,398,900 (gross unrealized
appreciation--$195,885,108; gross unrealized depreciation--$152,486,208).
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Government or federal agency obligations. As of July 31, 2000, the Fund
had a 1.8% undivided interest in repurchase agreements in the joint account. The
undivided interest for the Fund represented $10,298,000 in principal amount. As
of such date, each repurchase agreement in the joint account and the value of
the collateral therefor was as follows:
ABN AMRO Incorporated, 6.56%, in the principal amount of $100,000,000,
repurchase price $100,018,222, due 8/1/00. The value of the collateral including
accrued interest was $102,000,029.
Bear, Stearns & Co. Inc., 6.55%, in the principal amount of $100,000,000,
repurchase price $100,018,194, due 8/1/00. The value of the collateral including
accrued interest was $102,926,906.
19
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited) Cont'd.
Greenwich Capital Markets, Inc., 6.57%, in the principal amount of
$110,000,000, repurchase price $110,020,075, due 8/1/00. The value of the
collateral including accrued interest was $112,201,716.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 6.45%, in the principal
amount of $97,030,000, repurchase price $97,047,385, due 8/1/00. The value of
the collateral including accrued interest was $98,970,864.
Salomon Smith Barney, Inc., 6.55%, in the principal amount of
$155,000,000, repurchase price $155,028,201, due 8/1/00. The value of the
collateral including accrued interest was $158,174,190.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualified to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
There is an unlimited number of shares of beneficial interest, $.001 par
value per share, divided into four classes, designated Class A, Class B, Class C
and Class Z.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
----------------------------------------------------------- ---------- ------------
<S> <C> <C>
Six months ended July 31, 2000:
Shares sold 3,920,330 $ 50,762,198
Shares issued in reinvestment of distributions 1,045,113 12,248,719
Shares reacquired (5,042,363) (64,765,136)
---------- ------------
Net decrease in shares outstanding before conversion (76,920) (1,754,219)
Shares issued upon conversion from Class B 1,241,608 15,767,735
---------- ------------
Net increase in shares outstanding 1,164,688 $ 14,013,516
---------- ------------
---------- ------------
Year ended January 31, 2000:
Shares sold 10,107,012 $125,259,647
Shares issued in reinvestment of distributions 830,011 10,649,040
Shares reacquired (5,052,322) (62,914,846)
---------- ------------
Net increase in shares outstanding before conversion 5,884,701 72,993,841
Shares issued upon conversion from Class B 698,940 8,763,860
---------- ------------
Net increase in shares outstanding 6,583,641 $ 81,757,701
---------- ------------
---------- ------------
</TABLE>
20
<PAGE>
Prudential 20/20 Focus Fund
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
----------------------------------------------------------- ---------- ------------
Six months ended July 31, 2000:
<S> <C> <C>
Shares sold 5,985,654 $ 77,478,258
Shares issued in reinvestment of distributions 2,802,908 32,401,614
Shares reacquired (7,446,240) (95,348,262)
---------- ------------
Net increase in shares outstanding before conversion 1,342,322 14,531,610
Shares reacquired upon conversion into Class A (1,258,435) (15,767,735)
---------- ------------
Net increase in shares outstanding 83,887 $ (1,236,125)
---------- ------------
---------- ------------
Year ended January 31, 2000:
Shares sold 23,777,037 $291,788,460
Shares issued in reinvestment of distributions 2,324,567 29,545,248
Shares reacquired (8,189,070) (101,234,812)
---------- ------------
Net increase in shares outstanding before conversion 17,912,534 220,098,896
Shares reacquired upon conversion into Class A (704,230) (8,763,860)
---------- ------------
Net increase in shares outstanding 17,208,304 $211,335,036
---------- ------------
---------- ------------
<CAPTION>
Class C
-----------------------------------------------------------
<S> <C> <C>
Six months ended July 31, 2000:
Shares sold 1,424,683 $ 18,410,532
Shares issued in reinvestment of distributions 583,010 6,739,596
Shares reacquired (1,723,735) (21,889,754)
---------- ------------
Net increase in shares outstanding 283,958 $ 3,260,374
---------- ------------
---------- ------------
Year ended January 31, 2000:
Shares sold 5,803,272 $ 71,399,010
Shares issued in reinvestment of distributions 463,070 5,885,623
Shares reacquired (2,166,404) (26,773,332)
---------- ------------
Net increase in shares outstanding 4,099,938 $ 50,511,301
---------- ------------
---------- ------------
<CAPTION>
Class Z
-----------------------------------------------------------
<S> <C> <C>
Six months ended July 31, 2000:
Shares sold 2,073,130 $ 27,077,081
Shares issued in reinvestment of distributions 264,729 3,110,570
Shares reacquired (2,335,611) (30,351,999)
---------- ------------
Net increase in shares outstanding 2,248 $ (164,348)
---------- ------------
---------- ------------
Year ended January 31, 2000:
Shares sold 5,930,034 $ 73,449,511
Shares issued in reinvestment of distributions 206,424 2,652,553
Shares reacquired (2,952,230) (36,536,354)
---------- ------------
Net increase in shares outstanding 3,184,228 $ 39,565,710
---------- ------------
---------- ------------
</TABLE>
Note 7. Subsequent Event
On August 22, 2000, the Board of Trustees approved an interim subadvisory
agreement with Jennison to manage up to 100% of the total assets of the Fund.
Effective September 7, 2000, Jennison became subadvisor for all the Fund's
assets. The Board of Trustees also approved a proposed new subadvisory
agreement, with the same terms as the interim agreement, which would take effect
after share holder approval.
21
<PAGE>
Prudential 20/20 Focus Fund
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------
Six Months July 1, 1998(a)
Ended Year Ended Through
July 31, January 31, January 31,
2000(d) 2000(d) 1999(d)
---------------- ----------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $ 13.18 $ 11.49 $ 10.00
---------------- ----------- ---------------
Income from investment
operations
Net investment income (loss) (.01) (.01) .01
Net realized and unrealized
gain (loss) on investments
and foreign currencies (.11) 2.30 1.51
---------------- ----------- ---------------
Total from investment
operations (.12) 2.29 1.52
---------------- ----------- ---------------
Less distributions:
Distributions from net realized
gains (.61) (.60) --
Tax return of capital
distribution -- -- (.03)
---------------- ----------- ---------------
Total distributions (.61) (.60) (.03)
---------------- ----------- ---------------
Net asset value, end of period $ 12.45 $ 13.18 $ 11.49
---------------- ----------- ---------------
---------------- ----------- ---------------
TOTAL RETURN(b): (.65)% 20.07% 15.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $269,543 $ 270,027 $ 159,777
Average net assets (000) $277,370 $ 205,515 $ 131,335
Ratios to average net assets:
Expenses, including
distribution fee and
service (12b-1) fees 1.18%(c) 1.20% 1.32%(c)
Expenses, excluding
distribution fee and
service (12b-1) fees .93%(c) .95% 1.07%(c)
Net investment income (loss) (.13)%(c) (.10)% .13%(c)
For Class A, B, C and Z shares:
Portfolio turnover 52% 105% 70%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported. Total returns for periods of less than one
full year are not annualized.
(c) Annualized.
(d) Calculations are made based on average month-end shares outstanding during
the period.
22 See Notes to Financial Statements
<PAGE>
Prudential 20/20 Focus Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
------------------------------------------------------
Six Months July 1, 1998(a)
Ended Year Ended Through
July 31, January 31, January 31,
2000(e) 2000(e) 1999(e)
---------------- ----------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $ 13.04 $ 11.46 $ 10.00
---------------- ----------- ---------------
Income from investment
operations
Net investment loss (.05) (.10) (.04)
Net realized and unrealized
gain (loss) on investments
and foreign currencies (.12) 2.28 1.50
---------------- ----------- ---------------
Total from investment
operations (.17) 2.18 1.46
---------------- ----------- ---------------
Less distributions:
Distributions from net realized
gains (.61) (.60) --
Tax return of capital
distribution -- -- --(d)
---------------- ----------- ---------------
Total distributions (.61) (.60) --
---------------- ----------- ---------------
Net asset value, end of period $ 12.26 $ 13.04 $ 11.46
---------------- ----------- ---------------
---------------- ----------- ---------------
TOTAL RETURN(b): (1.04)% 19.16% 14.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $686,866 $ 729,339 $ 443,798
Average net assets (000) $719,091 $ 581,150 $ 334,157
Ratios to average net assets:
Expenses, including
distribution fee and
service (12b-1) fees 1.93%(c) 1.95% 2.07%(c)
Expenses, excluding
distribution fee and
service (12b-1) fees .93%(c) .95% 1.07%(c)
Net investment income (loss) (.88)%(c) (.85)% (.62)%(c)
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported. Total returns for periods of less than one
full year are not annualized.
(c) Annualized.
(d) Less than .005 per share.
(e) Calculations are made based on average month-end shares outstanding during
the period.
See Notes to Financial Statements 23
<PAGE>
Prudential 20/20 Focus Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
------------------------------------------------------
Six Months July 1, 1998(a)
Ended Year Ended Through
July 31, January 31, January 31,
2000(e) 2000(e) 1999(e)
---------------- ----------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $ 13.04 $ 11.46 $ 10.00
---------------- ----------- ---------------
Income from investment
operations
Net investment loss (.05) (.10) (.03)
Net realized and unrealized
gain (loss) on investments
and foreign currencies (.12) 2.28 1.49
---------------- ----------- ---------------
Total from investment
operations (.17) 2.18 1.46
---------------- ----------- ---------------
Less distributions:
Distributions from net realized
gains (.61) (.60) --
Tax return of capital
distribution -- -- --(d)
---------------- ----------- ---------------
Total distributions (.61) (.60) --
---------------- ----------- ---------------
Net asset value, end of period $ 12.26 $ 13.04 $ 11.46
---------------- ----------- ---------------
---------------- ----------- ---------------
TOTAL RETURN(b): (1.04)% 19.16% 14.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $140,553 $ 145,733 $ 81,100
Average net assets (000) $146,353 $ 111,039 $ 64,848
Ratios to average net assets:
Expenses, including
distribution fee and
service (12b-1) fees 1.93%(c) 1.95% 2.07%(c)
Expenses, excluding
distribution fee and
service (12b-1) fees .93%(c) .95% 1.07%(c)
Net investment income (loss) (.88)%(c) (.84)% (.62)%(c)
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported. Total returns for periods of less than one
full year are not annualized.
(c) Annualized.
(d) Less than .005 per share.
(e) Calculations are made based on average month-end shares outstanding during
the period.
24 See Notes to Financial Statements
<PAGE>
Prudential 20/20 Focus Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
------------------------------------------------------
Six Months July 1, 1998(a)
Ended Year Ended Through
July 31, January 31, January 31,
2000(d) 2000(d) 1999(d)
---------------- ----------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period $ 13.20 $ 11.49 $ 10.00
---------------- ----------- ---------------
Income from investment
operations
Net investment income .01 .02 .02
Net realized and unrealized
gain (loss) on investments
and foreign currencies (.11) 2.29 1.51
---------------- ----------- ---------------
Total from investment
operations (.10) 2.31 1.53
---------------- ----------- ---------------
Less distributions:
Distributions from net realized
gains (.61) (.60) --
Tax return of capital
distribution -- -- (.04)
---------------- ----------- ---------------
Total distributions (.61) (.60) (.04)
---------------- ----------- ---------------
Net asset value, end of period $ 12.49 $ 13.20 $ 11.49
---------------- ----------- ---------------
---------------- ----------- ---------------
TOTAL RETURN(b): (.49)% 20.25% 15.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 64,672 $ 68,352 $ 22,882
Average net assets (000) $ 68,585 $ 45,183 $ 12,905
Ratios to average net assets:
Expenses, including
distribution fee and
service (12b-1) fees .93%(c) .95% 1.07%(c)
Expenses, excluding
distribution fee and
service (12b-1) fees .93%(c) .95% 1.07%(c)
Net investment income (loss) .12%(c) .16% .38%(c)
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported. Total returns for periods of less than one
full year are not annualized.
(c) Annualized.
(d) Calculations are made based on average month-end shares outstanding during
the period.
See Notes to Financial Statements 25
<PAGE>
Prudential 20/20 Focus Fund
Prudential Mutual Funds
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
Large Capitalization Stock Funds
Prudential 20/20 Focus Fund
Prudential Equity Fund, Inc.
Prudential Stock Index Fund
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Strategic Partners Focused Growth Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Value Fund
Small- to Mid-Capitalization Stock Funds
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Prudential Small Company Fund, Inc.
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential U.S. Emerging Growth Fund, Inc.
Target Funds
Small Capitalization Growth Fund
Small Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Equity Opportunity Fund
Sector Stock Funds
Prudential Natural Resources Fund, Inc.
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Global/International Stock Funds
Global Utility Fund, Inc.
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Target Funds
International Equity Fund
BALANCED/ALLOCATION FUNDS
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
<PAGE>
www.prudential.com (800) 225-1852
BOND FUNDS
Taxable Bond Funds
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
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-Free 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
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
Global/International Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond 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
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
Prudential MoneyMart Assets, Inc.
Prudential Special Money Market Fund, Inc.
Money Market Series
Tax-Free Money Market Funds
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
Prudential Tax-Free Money Fund, Inc.
Other Money Market Funds
COMMAND Government Fund
COMMAND Money Fund
COMMAND Tax-Free Fund
<PAGE>
Prudential 20/20 Focus Fund
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you
receive financial advice from a Prudential Securities
Financial Advisor or Pruco Securities registered
representative. Your advisor or representative can
provide you with the following services:
There's No Reward Without Risk; but Is This Risk Worth It?
Your financial advisor or registered representative can
help you match the reward you seek with the risk you can
tolerate. Risk can be difficult to gauge-sometimes even
the simplest investments bear surprising risks. The
educated investor knows that markets seldom move in just
one direction. There are times when a market sector or
asset class will lose value or provide little in the way
of total return. Managing your own expectations is easier
with help from someone who understands the markets and
who knows you!
Keeping Up With the Joneses
A financial advisor or registered representative can help
you wade through the numerous available mutual funds to
find the ones that fit your individual investment profile
and risk tolerance. While the newspapers and popular
magazines are full of advice about investing, they are
aimed at generic groups of people or representative
individuals-not at you personally. Your financial advisor
or registered representative will review your investment
objectives with you. This means you can make financial
decisions based on the assets and liabilities in your
current portfolio and your risk tolerance-not just based
on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the most common investor mistakes. But
sometimes it's difficult to hold on to an investment when
it's losing value every month. Your financial advisor or
registered representative can answer questions when
you're confused or worried about your investment, and
should remind you that you're investing for the long
haul.
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Trustees
Saul K. Fenster, Ph.D.
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
Robin B. Smith
John R. Strangfeld
Louis A. Weil, III
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
Marguerite E. H. Morrison, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
Fund Symbols NASDAQ CUSIP
Class A PTWAX 743979106
Class B PTWBX 743979205
Class C PTWCX 743979304
Class Z PTWZX 743979403
The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.
The accompanying financial statements as
of July 31, 2000, were not audited and, accordingly, no
opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
MF183E2 743979106 743979205 743979304 743979403
(LOGO) Printed on Recycled Paper
