PRUDENTIAL 20/20 FOCUS FUND, N-30D, 2000-04-10

PRUDENTIAL 20/20 FOCUS FUND
N-30D, 2000-04-10

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<PAGE>

(ICON)

Prudential
20/20 Focus Fund

Annual Report
January 31, 2000

(LOGO)

<PAGE>

A Message From the Fund's President March 16, 2000
- -------------------------------------------------------------------------------
(PHOTO)

Dear Shareholder,
The 12-month period ended January 31, 2000 was particularly volatile for
stocks, and it showed off the architecture of Prudential 20/20 Focus Fund to
strong advantage. The Fund's Class A shares finished the period with a 20.07%
gain, seven percentage points ahead of their Lipper peer group and nine
percentage points ahead of the S&P 500 Index. Including sales charges, the
Fund's Class A shares returned 14.07%. This is a very good performance. Each
portfolio manager beat his respective style benchmark. In addition, as the
chart to the left shows, the Fund's asset value grew more smoothly on a
month-by-month basis than either the S&P/Barra Value or the S&P/Barra Growth
Index. Over the full year, Sig Segalas' growth selections made the larger
contribution to the Fund's performance.

I wanted to show you the chart because it is such an excellent example of the
benefits of diversification. Market favor shifted from value to growth over
the course of the year, yet the Fund lost ground only when both indexes fell
(performance that may not be sustained indefinitely). Diversification across
asset classes, as well as investment styles, also can smooth the performance
of your investments.

New benchmark
Our benchmark in this report reflects the new categories for mutual funds
introduced by Lipper Inc. in September 1999. Funds now are classified by their
actual holdings instead of by their objectives. They are in peer groups with
the same investment style--value, growth, or core--and with holdings of the
same general average market capitalization. Prudential 20/20 Focus Fund is
classified as a core fund because it is split between value and growth styles.

Different strengths
The Fund's strongest value performers included Tandy (an electronics retailer),
Freeport McMoran Copper and Gold, and two integrated oil companies. Its
strongest growth performers were technology companies--such as Cisco Systems
(computer networking), Texas Instruments (semiconductors), EMC Corporation
(large computer disk drive systems), and NTL (a European cable and
telecommunications operator)--and media and advertising firms such as Univision
Communications and CBS.

Yours sincerely,

John R. Strangfeld
President
Prudential 20/20 Focus Fund

(GRAPH)

* The chart is based on the growth of a $1.00 investment in Prudential 20/20
Focus Fund "Class A with a similar investment in the S&P/Barra Growth Index and
the S&P/Barra Value Index. The S&P/Barra Growth Index contains companies within
the S&P 500 with higher price-to-book ratios. The S&P/Barra Value Index
contains companies within the S&P 500 with lower price-to-book ratios. The
performance does not include sales charges, but does include the operating
expenses incurred in the Fund. Investors cannot invest directly in an index.

<PAGE>

Performance Review
- -------------------------------------------------------------------------------
(PHOTOS)

Thomas R. Jackson and
Spiros "Sig" Segalas
Fund Managers

Investment Goals and Style
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. Tom Jackson looks for bargains. He uses a strict value investment style
to buy stocks whose prices he believes are too low given their underlying
earnings, assets, cash flow, dividends, or book value. Spiros "Sig" Segalas
uses 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's investment objective will be
achieved.

This period's returns again reflected the benefit of having two portfolio
managers with different styles. They looked for good investments in very
different places. Growth-style opportunities were plentiful among technology
companies, for example, while good value was found in basic materials.

Technology
Sig Segalas' selections were heavily focused in the technology sector, which
far outperformed other sectors over our reporting period, while Tom Jackson's
technology holdings were very light. Cisco Systems and EMC are described in our
table of largest growth-stock holdings. They had substantial price appreciation
over our reporting year. So did Texas Instruments, which makes the chips that
are built into autos, cellular phones, and electronic appliances.

Basic Materials
Whereas our growth holdings included no basic materials companies, Tom Jackson
positioned the Fund to benefit from the increased demand for industrial
commodities as Asian economic growth resumed. The paper company Mead, Freeport
McMoran Copper and Gold (which owns a gold and copper mine in Indonesia that is
among the world's largest), and the oil companies Elf Aquitaine and Atlantic
Richfield (both of which attracted takeover offers) all contributed
significantly to the period's return.

Media and Healthcare
Our growth holdings saw large gains from media companies, particularly
Univision, which operates the largest Spanish-language television network in
the United States. CBS, which is being acquired by Viacom, was another large
holding. Our value selections included no media, but they did include hospital
managers such as Columbia/HCA Healthcare and Tenet Healthcare, whose stocks
were recovering as pricing in the sector recovered. Columbia made a
substantial contribution to the period's return. The Fund also owns Wellpoint
Health Network (described in our table of largest holdings). Despite its
earnings growth and high returns on capital, its share price fell over our

Portfolio Composition

Sectors expressed as a percentage of net assets as of 1/31/00

Consumer Growth 28.6%
Technology 25.6
Utility 16.1
Finance 13.4
Industrial 8.1
Consumer Cyclical 3.6
Cash & Equivalents 4.6

<PAGE>

reporting period. Tom Jackson expects a rebound as both pricing and demand for
care improve.

The growth industry in healthcare is pharmaceuticals, but it suffered despite
considerable consolidation activity. Pharmaceuticals were hurt by concerns that
the U.S. government would fund Medicare coverage of drugs--an action that could
decrease pricing power for the industry. The Fund sold its shares of American
Home Products and Schering Plough (both of which lost ground over the reporting
period) and of Glaxo Wellcome (which was less attractive than our other growth
holdings).

Financial Services
Both managers had investments in financial services companies, which included
Citigroup, Morgan Stanley Dean Witter, and JP Morgan, all of which contributed
to our return. The first two made quite substantial contributions. However, we
also owned MBNA (credit cards), Safeco (insurance), and Loews (a conglomerate
predominantly in insurance), all of which detracted from performance over this
period. We sold the MBNA shares.

Performance at a Glance

Cumulative Total Returns1 As of 1/31/00
<TABLE>
<CAPTION>
One Since
Year Inception2
<S> <C> <C>
Class A 20.07% 38.32%
Class B 19.16 36.57
Class C 19.16 36.57
Class Z 20.25 38.67
Lipper Large-Cap Core Fund Avg.3 12.75 26.38
</TABLE>

Average Annual Total Returns1 As of 1/31/00
<TABLE>
<CAPTION>
One Since
Year Inception2
<S> <C> <C>
Class A 14.07% 18.80%
Class B 14.16 19.46
Class C 16.97 20.96
Class Z 20.25 22.90
</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 one-year
and since inception periods in the Large-Cap Core Fund category. The Lipper
average is unmanaged. Large-Cap Core funds, by portfolio practice, 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
market capitalization of the S&P(R) Mid-Cap 400 Index. Large-Cap Core funds
have wide latitude in the companies in which they invest. These funds will
normally have an average price/earnings ratio, price-to-book ratio, and
three-year earnings growth figure compared to the U.S. diversified large-cap
funds universe average.

S&P(R) is a registered trademark of The McGraw-Hill Companies, Inc.

<PAGE>

Review Cont'd.
- -------------------------------------------------------------------------------

Five Largest Growth and Value Holdings
Expressed as a percentage of net assets as of 1/31/00

<TABLE>
<CAPTION>
Security/Industry/% of Net Assets
Growth Stocks Comments
<S> <C>
Cisco Systems Leading data networking equipment manufacturer. Provides most of
Communications Equipment the Internet switching infrastructure for both carriers and corporate entry
4.8% points, as well as internal corporate networks. A long-term high-growth business.

EMC Corporation The world's leading supplier of intelligent enterprise storage and retrieval technology,
Computer Hardware designing systems for open system, mainframe, and midrange environments. EMC's enterprise
4.6% storage products allow organizations to leverage their growing volumes of information in ways
which may enhance their profitability and competitive advantage.

Citigroup A diversified financial services holding company that provides a broad range of financial
Financial Services services to consumer and corporate customers around the world. The company's services
4.5% include investment banking, retail brokerage, corporate banking, and cash management
products and services.

NTL Incorporated NTL provides the "last mile" into the homes of U.K. telecommunications customers. It
Telecommunications Services operates a digital fiberoptic network, by which it provides Internet access, TV
4.5% programming (it plans to offer video-on-demand), and local, long-distance, and
international phone service to one million business and residential customers. NTL also
offers TV and radio broadcast transmission services and wholesales network access.

Hewlett-Packard As the world's second-largest computer company, Hewlett-Packard provides imaging and
Computer Hardware printing systems, computing systems, and information technology services for business and
4.5% home. To further fuel its growth, HP is restructuring itself as an Internet specialist
providing Web hardware, software, and support to corporate customers.

Value Stocks

Wellpoint Health Network A converted California Blue Cross/Blue Shield company with very strong management, innovative
Hospital Management product design, well-above-average enrollment and earnings growth, and high returns on capital.
3.2% Should benefit from continued growth in the demand for healthcare and the recovery in industry
pricing.

Tenet Healthcare Second-largest hospital chain in the U.S. Sales were up 10% in 1999. Should benefit from the
Hospital Management recovery of industry pricing, its continued cost-control efforts, and the growth in
3.2% healthcare demand as the average age in the U.S. rises.

Loral Space & Communications A large manufacturer and operator of satellites. Launching a global satellite-based wireless
Telecommunications Services communications service operated by its 42%-owned Globalstar Limited Partnership. Share
3.2% price is currently depressed by the bankruptcy of its higher-cost competitor Iridium.
Showing operating losses because it is still in the capital investment stage on many projects.

Eastman Kodak Inexpensive because it's perceived as "old economy." A very strong franchise in photography;
Diversified Consumer adding digital imaging to its product line while increasing sales and earnings. Focused on
3.1% becoming more cost-competitive. We think the expanding U.S. market for digital photography and
global market for film (which is relatively cheap) mean strong earnings growth.

Columbia/HCA Healthcare Largest hospital chain in the U.S. Stock suffered from federal investigation into its Medicare
Hospital Management and referral procedures. New management stopped aggressive expansion to focus on getting its
2.8% operations under control. Pricing for the hospital industry appears to have bottomed. Should
benefit from growth in healthcare demand as the average age in the U.S. rises.
</TABLE>
2
<PAGE>

Retail
The Fund benefited from its holdings of Tiffany, the leading fine jewelry
company in the world. It has very strong earnings momentum, reflecting both
strength in the U.S. economy and recovering Asian markets. In addition, it has
recently started website sales, which should be a nice additive to long-term
growth. Tandy, which was our strongest value holding, is focusing on its Radio
Shack retail locations, providing sales outlets for the very competitive
computer and cellular telephone industries. Its stock is being driven by two
years of double-digit increases in same-store sales and by strong profit
growth.

We lost ground on Dillards, an inexpensively purchased department store chain
(the third largest upscale chain in the United States) that has had trouble
integrating its acquisition of the Mercantile stores. In Tom Jackson's view,
the value of its assets exceeds its current market price.

Additional Performance Tracking Tools
You can access comprehensive information about the performance of your
Prudential mutual funds 24 hours a day through our website and automated phone
service. At www.prudential.com/investing, you'll find the daily closing values,
changes from the previous day, and quarterly performance for all of our retail
mutual funds. Other available resources include daily, monthly, and quarterly
market commentary.

Prudential is committed to meeting shareholders' needs. That is why we continue
to upgrade and make improvements to our website. Please send us your comments
about how we can continue to improve our site to meet your needs.

Daily fund values are also a toll-free call away from any touch-tone phone.
Call (800) 225-1852 and follow the voice prompts to obtain mutual fund closing
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specific Prudential mutual funds.

Mutual Fund Automated Service: (800) 225-1852

Main Menu Submenus
1. Account information 1. Account balance
2. Transactions
3. Order forms
2. Prices and yields
3. Transactions
4. Order checks and statements
5. PIN change
3

<PAGE>

Portfolio of Investments as of January 31, 2000 PRUDENTIAL 20/20 FOCUS FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--95.2%
COMMON STOCKS
- ------------------------------------------------------------
Banks & Financial Services--6.4%
956,500 Citigroup, Inc. $ 54,938,969
182,800 Morgan (J.P.) & Co., Inc. 22,450,125
--------------
77,389,094
- ------------------------------------------------------------
Chemicals--1.5%
459,600 Eastman Chemical Co. 18,326,550
- ------------------------------------------------------------
Computer Hardware--6.4%
879,400 Compaq Computer Corp. 24,073,575
499,200 Hewlett-Packard Co. 54,038,400
--------------
78,111,975
- ------------------------------------------------------------
Computer Software & Services--12.2%
537,000 Cisco Systems, Inc.(a) 58,801,500
521,500 EMC Corp.(a) 55,539,750
346,100 Microsoft Corp.(a) 33,874,537
--------------
148,215,787
- ------------------------------------------------------------
Diversfied Consumer Products--4.5%
489,400 Loews Corp. 27,406,400
1,312,700 Philip Morris Companies, Inc. 27,484,656
--------------
54,891,056
- ------------------------------------------------------------
Electronic Components--4.4%
494,700 Texas Instruments, Inc. 53,365,762
- ------------------------------------------------------------
Entertainment--0.1%
67,700 Park Place Entertainment Corp. 710,850
- ------------------------------------------------------------
Forest Products--3.7%
686,600 Mead Corp. 25,575,850
352,500 Temple-Inland, Inc. 19,717,969
--------------
45,293,819
- ------------------------------------------------------------
Health Care--9.1%
1,238,400 Columbia/HCA Healthcare Corp. $ 33,823,800
1,688,000 Tenet Healthcare Corp.(a) 38,402,000
567,200 Wellpoint Health Networks, Inc. 38,569,600
--------------
110,795,400
- ------------------------------------------------------------
Hotels--2.0%
2,790,600 Hilton Hotels Corp. 23,545,688
- ------------------------------------------------------------
Insurance--4.7%
444,025 American International Group, Inc. 46,234,103
448,800 SAFECO Corp. 10,995,600
--------------
57,229,703
- ------------------------------------------------------------
Media--5.4%
567,200 CBS Corp. 33,074,850
377,400 Clear Channel Communications,
Inc.(a) 32,597,925
--------------
65,672,775
- ------------------------------------------------------------
Office Equipment & Supplies--2.7%
1,000,800 Harris Corp. 29,023,200
1,000,800 Lanier Worldwide 3,502,800
--------------
32,526,000
- ------------------------------------------------------------
Photography--3.1%
604,100 Eastman Kodak Co. 37,378,688
- ------------------------------------------------------------
Precious Metals--2.6%
1,972,400 Freeport-McMoRan Copper & Gold,
Inc.(a) 31,558,400
- ------------------------------------------------------------
Retail--6.5%
1,256,400 Dillards Department Stores, Inc. 24,107,175
408,300 Tandy Corp. 19,955,662
475,800 Tiffany & Co. 35,209,200
--------------
79,272,037
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4

<PAGE>

<PAGE>
Statement of Assets and Liabilities PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets January 31, 2000
<S> <C>
Investments, at value (cost $1,063,799,792)............................................................... $1,220,271,947
Cash...................................................................................................... 13,066
Receivable for investments sold........................................................................... 8,826,311
Receivable for Fund shares sold........................................................................... 5,299,946
Dividends and interest receivable......................................................................... 261,823
Prepaid expenses.......................................................................................... 8,667
----------------
Total assets........................................................................................... 1,234,681,760
----------------
Liabilities
Payable for investments purchased......................................................................... 15,913,874
Payable for Fund shares repurchased....................................................................... 3,429,262
Distribution fee payable.................................................................................. 814,029
Management fee payable.................................................................................... 784,763
Accrued expenses.......................................................................................... 288,907
----------------
Total liabilities...................................................................................... 21,230,835
----------------
Net Assets................................................................................................ $1,213,450,925
----------------
----------------
Net assets were comprised of:
Shares of beneficial interest, at par.................................................................. $ 92,787
Paid-in capital in excess of par....................................................................... 1,000,744,200
----------------
1,000,836,987
Accumulated net realized gain on investments........................................................... 56,141,783
Net unrealized appreciation on investments............................................................. 156,472,155
----------------
Net assets, January 31, 2000.............................................................................. $1,213,450,925
----------------
----------------
Class A:
Net asset value and redemption price per share
($270,027,206 / 20,485,752 shares of beneficial interest issued and outstanding).................... $13.18
Maximum sales charge (5% of offering price)............................................................ .69
----------------
Maximum offering price to public....................................................................... $13.87
----------------
----------------
Class B:
Net asset value, offering price and redemption price per share
($729,338,711 / 55,946,324 shares of beneficial interest issued and outstanding).................... $13.04
----------------
----------------
Class C:
Net asset value and redemption price per share
($145,733,098 / 11,179,083 shares of beneficial interest issued and outstanding).................... $13.04
Sales charge (1% of offering price).................................................................... .13
----------------
Offering price to public............................................................................... $13.17
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per share
($68,351,910 / 5,176,394 shares of beneficial interest issued and outstanding)...................... $13.20
----------------
----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6

<PAGE>

PRUDENTIAL 20/20 FOCUS FUND
Statement of Operations
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended
Net Investment Loss January 31, 2000
<S> <C>
Income
Dividends (net of foreign withholding taxes
of $32,280)............................. $ 8,150,726
Interest................................... 2,199,254
----------------
Total income............................ 10,349,980
----------------
Expenses
Management fee............................. 7,071,654
Distribution fee--Class A.................. 513,787
Distribution fee--Class B.................. 5,811,503
Distribution fee--Class C.................. 1,110,391
Transfer agent's fees and expenses......... 1,105,000
Registration fees.......................... 251,000
Reports to shareholders.................... 210,000
Custodian's fees and expenses.............. 170,000
Legal fees and expenses.................... 35,000
Amortization of deferred offering costs.... 28,000
Audit fees and expenses.................... 27,000
Trustees' fees and expenses................ 18,000
Miscellaneous.............................. 880
----------------
Total expenses.......................... 16,352,215
----------------
Net investment loss........................... (6,002,235)
----------------
Realized and Unrealized Gain
on Investments
Net realized gain on:
Investment transactions.................... 118,380,454
Net change in unrealized appreciation on
investments............................. 60,959,722
----------------
Net gain on investments....................... 179,340,176
----------------
Net Increase in Net Assets
Resulting from Operations..................... $173,337,941
----------------
----------------
</TABLE>

PRUDENTIAL 20/20 FOCUS FUND
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year July 1, 1998(a)
Increase in Ended Through
Net Assets January 31, 2000 January 31, 1999
<S> <C> <C>
Operations
Net investment loss........... $ (6,002,235) $ (1,316,014)
Net realized gain (loss) on
investments................ 118,380,454 (5,548,276)
Net change in unrealized
appreciation on
investments................ 60,959,722 95,512,433
---------------- ----------------
Net increase in net assets
resulting from
operations................. 173,337,941 88,648,143
---------------- ----------------
Dividends and distributions (Note
1)
Distributions from net
realized gains
Class A.................... (11,076,868) --
Class B.................... (30,844,040) --
Class C.................... (6,030,035) --
Class Z.................... (2,663,051) --
---------------- ----------------
(50,613,994) --
---------------- ----------------
Tax return of capital
distribution
Class A.................... -- (349,450)
Class B.................... -- (35,325)
Class C.................... -- (6,617)
Class Z.................... -- (44,675)
---------------- ----------------
-- (436,067)
---------------- ----------------
Fund share transactions (net of
share conversions) (Note 6)
Proceeds from shares sold..... 561,896,628 689,777,037
Net asset value of shares
issued in reinvestment of
distributions.............. 48,732,464 422,572
Cost of shares reacquired..... (227,459,344) (70,954,455)
---------------- ----------------
Net increase in net assets
from Fund share
transactions............... 383,169,748 619,245,154
---------------- ----------------
Total increase................... 505,893,695 707,457,230
Net Assets
Beginning of period.............. 707,557,230 100,000
---------------- ----------------
End of period.................... $ 1,213,450,925 $707,557,230
---------------- ----------------
---------------- ----------------
- ---------------
(a) Commencement of investment operations.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7

<PAGE>
Notes to Financial Statements PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
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.

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.

Offering and Organization Expenses: Approximately $96,000 was incurred and
expensed in connection with the organization of the Fund. Offering cost of
approximately $67,000 were amortized ratably over a period of twelve months from
the date the Fund commenced investment operations.

Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants, Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income; Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to decrease net investment loss by $6,002,235, decrease
accumulated net realized gain on investments by $5,974,712 and decrease paid-in
capital in excess of par by $27,523 due to a net operating loss and certain
non-deductible expenses for the year ended January 31, 2000. Net investment
income, net realized gains and net assets were not affected by this change.

- ------------------------------------------------------------
Note 2. Agreements

The Fund has a management agreement with PIFM. Pursuant to this agreement, PIFM
has responsibility for all investment advisory services and supervises the
subadvisers' performance of such services. PIFM has entered into subadvisory
agreements with The Prudential Investment Corporation ('PIC') and Jennison
Associates LLC ('Jennison'). Each
- --------------------------------------------------------------------------------
8

<PAGE>
Notes to Financial Statements PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
Subadviser furnishes investment advisory services in connection with the
management of the Fund. PIFM pays for the cost of the Subadviser's services, the
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 approximately equal allocation. As
a consequence, the portfolio will allocate assets from the better performing of
the two Subadvisers to the other.

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. PIFM pays a portion of its management fee to PIC for its subadvisory
services. 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%, 1% and 1%,
respectively, of the average daily net assets of Class A, Class B and Class C
shares for the year ended January 31, 2000.
PIMS has advised the Fund that it has received approximately $1,273,800 and
$607,100 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended January 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 $1,834,100 and
$90,400 in contingent deferred sales charges imposed upon certain redemptions by
Class B and Class C shareholders, respectively.

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 and
interest on any borrowings will be at market rates. For the period
3/11/99-3/9/00, the commitment fee on the unused portion of the credit facility
was .065 of 1%. Subsequent to March 9, 2000, the SCA was renewed with a maximum
commitment of $1 billion at a commitment fee of .080 of 1% of the unused portion
of the credit facility. The expiration date of the SCA is March 9, 2001. The
commitment fee is accrued and paid quarterly on a pro rata basis by the Funds.
Prior to March 11, 1999, the Funds had a credit agreement with a maximum
commitment of $200,000,000. The commitment fee was .055 of 1% on the unused
portion of the credit facility. The Fund did not borrow any amounts during the
year ended January 31, 2000. The purpose of the credit agreements is to serve as
an alternative source of funding for capital share redemptions.

- ------------------------------------------------------------
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 year ended January 31, 2000,
the Fund incurred fees of approximately $968,000 for the services of PMFS. As of
January 31, 2000, approximately $99,000 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.

For the year ended January 31, 2000, Prudential Securities Incorporated, an
indirect wholly owned subsidiary of Prudential, earned $23,200 in brokerage
commissions from portfolio transactions executed on behalf of the Fund.

- ------------------------------------------------------------
Note 4. Portfolio Securities

Purchases and sales of investment securities, other than short-term investments,
for the year ended January 31, 2000 aggregated $1,238,248,684 and $942,258,368,
respectively.
- --------------------------------------------------------------------------------
9

<PAGE>
Notes to Financial Statements PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
The federal income tax basis of the Fund's investments at January 31, 2000 was
$1,064,087,228 and, accordingly, net unrealized appreciation for federal income
tax purposes was $156,184,719 (gross unrealized appreciation--$221,275,853;
gross unrealized depreciation--$65,091,134).

For federal income tax purposes, the Fund utilized its capital loss carryforward
of approximately $3,039,528 to partially offset the Fund's net taxable gains
realized and recognized in the year ended January 31, 2000.

- ------------------------------------------------------------
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 January 31, 2000, the
Fund had a 5.6% undivided interest in repurchase agreements in the joint
account. The undivided interest for the Fund represented $39,443,000 in
principal amount. As of such date, each repurchase agreement in the joint
account and the value of the collateral therefor was as follows:

Bear, Stearns & Co., Inc., 5.72%, in the principal amount of $150,000,000,
repurchase price $150,023,833, due 02/01/00. The value of the collateral
including accrued interest was $153,133,078.

Credit Suisse First Boston Corporation, 5.74%, in the principal amount of
$75,000,000, repurchase price $75,011,958, due 02/01/00. The value of the
collateral including accrued interest was $77,491,043.

Credit Suisse First Boston Corporation, 5.73%, in the principal amount of
$125,000,000, repurchase price $125,019,896, due 02/01/00. The value of the
collateral including accrued interest was $129,169,641.

Greenwich Capital Markets, Inc., 5.72%, in the principal amount of $100,000,000,
repurchase price $100,015,888, due 02/01/00. The value of the collateral
including accrued interest was $102,001,008.

Goldman, Sachs & Co., 5.70%, in the principal amount of $230,536,000, repurchase
price $230,572,502, due 02/01/00. The value of the collateral including accrued
interest was $235,147,150.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.60%, in the principal amount of
$25,000,000, repurchase price $25,003,889, due 02/01/00. The value of the
collateral including accrued interest was $25,501,335.

- ------------------------------------------------------------
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>
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
---------- ------------
---------- ------------
July 1, 1998(a) through
January 31, 1999:
Shares sold.......................... 16,742,582 $167,315,504
Shares issued in reinvestment of
distributions...................... 33,206 338,369
Shares reacquired.................... (2,906,652) (28,864,601)
---------- ------------
Net increase in shares outstanding
before conversion.................. 13,869,136 138,789,272
Shares issued upon conversion from
Class B............................ 30,475 305,798
---------- ------------
Net increase in shares outstanding... 13,899,611 $139,095,070
---------- ------------
---------- ------------
<CAPTION>
Class B
- -------------------------------------
<S> <C> <C>
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
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
10

<PAGE>
Notes to Financial Statements PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares Amount
- ------------------------------------- ---------- ------------
<S> <C> <C>
July 1, 1998(a) through
January 31, 1999:
Shares sold.......................... 41,599,322 $415,817,933
Shares issued in reinvestment of
distributions...................... 3,323 33,793
Shares reacquired.................... (2,836,718) (27,718,475)
---------- ------------
Net increase in shares outstanding
before conversion.................. 38,765,927 388,133,251
Shares reacquired upon conversion
into Class A....................... (30,407) (305,798)
---------- ------------
Net increase in shares outstanding... 38,735,520 $387,827,453
---------- ------------
---------- ------------
<CAPTION>
Class C
- -------------------------------------
<S> <C> <C>
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
---------- ------------
---------- ------------
July 1, 1998(a) through
January 31, 1999:
Shares sold.......................... 7,993,762 $ 80,272,330
Shares issued in reinvestment of
distributions...................... 630 6,403
Shares reacquired.................... (917,747) (8,944,615)
---------- ------------
Net increase in shares outstanding... 7,076,645 $ 71,334,118
---------- ------------
---------- ------------
<CAPTION>
Class Z
- -------------------------------------
<S> <C> <C>
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
---------- ------------
---------- ------------
July 1, 1998(a) through
January 31, 1999:
Shares sold.......................... 2,526,447 $ 26,371,270
Shares issued in reinvestment of
distributions...................... 4,323 44,007
Shares reacquired.................... (541,104) (5,426,764)
---------- ------------
Net increase in shares outstanding... 1,989,666 $ 20,988,513
---------- ------------
---------- ------------
</TABLE>
- ---------------
(a) Commencement of offering of Class A, B, C and Z shares.
- --------------------------------------------------------------------------------
11

<PAGE>
Financial Highlights PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B Class C
--------------------------------- -------------------------------- -----------
July 1, 1998(a) July 1, 1998(a)
Year Ended Through Year Ended Through Year Ended
January 31, January 31, January 31, January 31, January 31,
2000(e) 1999(e) 2000(e) 1999(e) 2000(e)
----------- ----------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 11.49 $ 10.00 $ 11.46 $ 10.00 $ 11.46
----------- ------- ----------- ------- -----------
Income from investment operations
Net investment income (loss)......... (.01) .01 (.10) (.04) (.10)
Net realized and unrealized gain on
investments and foreign
currencies........................ 2.30 1.51 2.28 1.50 2.28
----------- ------- ----------- ------- -----------
Total from investment
operations..................... 2.29 1.52 2.18 1.46 2.18
----------- ------- ----------- ------- -----------
Less distributions:
Distributions from net realized
gains............................. (.60) -- (.60) -- (.60)
Tax return of capital distribution... -- (.03) -- --(d) --
----------- ------- ----------- ------- -----------
Total distributions............... (.60) (.03) (.60) -- (.60)
----------- ------- ----------- ------- -----------
Net asset value, end of period....... $ 13.18 $ 11.49 $ 13.04 $ 11.46 $ 13.04
----------- ------- ----------- ------- -----------
----------- ------- ----------- ------- -----------
TOTAL RETURN(b):..................... 20.07% 15.19% 19.16% 14.61% 19.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $ 270,027 $ 159,777 $ 729,339 $443,798 $ 145,733
Average net assets (000)............. $ 205,515 $ 131,335 $ 581,150 $334,157 $ 111,039
Ratios to average net assets:
Expenses, including distribution
fees........................... 1.20% 1.32%(c) 1.95% 2.07%(c) 1.95%
Expenses, excluding distribution
fees........................... .95% 1.07%(c) .95% 1.07%(c) .95%
Net investment income (loss)...... (.10)% .13%(c) (.85)% (.62)%(c) (.84)%
For Class A, B, C and Z shares
Portfolio turnover................... 105% 70%
<CAPTION>
Class Z
--------------------------------
July 1, 1998(a) July 1, 1998(a)
Through Year Ended Through
January 31, January 31, January 31,
1999(e) 2000(e) 1999(e)
---------------- ----------- ----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 10.00 $ 11.49 $ 10.00
------ ----------- ------
Income from investment operations
Net investment income (loss)......... (.03) .02 .02
Net realized and unrealized gain on
investments and foreign
currencies........................ 1.49 2.29 1.51
------ ----------- ------
Total from investment
operations..................... 1.46 2.31 1.53
------ ----------- ------
Less distributions:
Distributions from net realized
gains............................. -- (.60) --
Tax return of capital distribution... --(d) -- (.04)
------ ----------- ------
Total distributions............... -- (.60) (.04)
------ ----------- ------
Net asset value, end of period....... $ 11.46 $ 13.20 $ 11.49
------ ----------- ------
------ ----------- ------
TOTAL RETURN(b):..................... 14.61% 20.25% 15.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...... $ 81,100 $ 68,352 $ 22,882
Average net assets (000)............. $ 64,848 $ 45,183 $ 12,905
Ratios to average net assets:
Expenses, including distribution
fees........................... 2.07%(c) .95% 1.07%(c)
Expenses, excluding distribution
fees........................... 1.07%(c) .95% 1.07%(c)
Net investment income (loss)...... (.62)%(c) .16% .38%(c)
For Class A, B, C and Z shares
Portfolio turnover...................
</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. 12

<PAGE>
Report of Independent Accountants PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
The Shareholders and Board of Trustees of
Prudential 20/20 Focus Fund:

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential 20/20 Focus Fund (the
'Fund') at January 31, 2000, the results of its operations for the year then
ended, the changes in its net assets and the financial highlights for the year
then ended and for the period July 1, 1998 (commencement of operations) through
January 31, 1999, in conformity with accounting principles generally accepted in
the United States. These financial statements and financial highlights
(hereafter referred to as 'financial statements') are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at January 31, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
March 21, 2000

Tax Information (Unaudited) PRUDENTIAL 20/20 FOCUS FUND
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (January 31, 2000) as to the federal tax status of
dividends paid by the Fund during its fiscal year ended January 31, 2000.

During the fiscal year, the Fund paid dividends of $.60 per Class A, B, C and Z
shares. Of these amounts, $.239 per Class A, B, C and Z shares represent
distributions from long-term capital gains and is taxable as such. The remaining
$.361 per Class A, B, C and Z shares represent dividends from ordinary income
(short-term capital gains). Further, we wish to advise you that 18.45% of the
ordinary income dividends paid during the fiscal year qualified for the
corporate dividends received deduction available to corporate taxpayers.

For the purpose of preparing your annual federal income tax return, however, you
should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute 1099-DIV.
- --------------------------------------------------------------------------------
13
<PAGE>

Comparing a $10,000 Investment
- -------------------------------------------------------------------------------
Prudential 20/20 Focus Fund vs. the S&P 500 Index

Class A
(CHART)

Average Annual Total Returns

With Sales Charge As of 1/31/00
Since Inception 18.80%
One Year 14.07
- ----------------------------------
Without Sales Charge As of 1/31/00
Since Inception 22.71%
One Year 20.07

Class B
(CHART)

Average Annual Total Returns

With Sales Charge As of 1/31/00
Since Inception 19.46%
One Year 14.16
- ----------------------------------
Without Sales Charge As of 1/31/00
Since Inception 21.73%
One Year 19.16

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.

These graphs compare a $10,000 investment in Prudential 20/20 Focus Fund (Class
A, B, C, and Z shares) with a similar investment in the Standard & Poor's 500
Composite Stock Price Index (S&P 500 Index) by portraying the initial account
values of Class A, B, C, and Z shares, and their values at the end of the
fiscal year (January 31), as measured on a quarterly basis, beginning July 1,
1998. For purposes of the graphs, and unless otherwise indicated, it has been
assumed that (a) the maximum applicable front-end sales charge was deducted
from the initial $10,000 investment in Class A and Class C shares; (b) the
maximum applicable contingent deferred sales charges were deducted from the
value of the investment in Class B and Class C shares, assuming full redemption
on January 31, 2000; (c) all recurring fees (including management fees) were
deducted; and (d) all dividends and distributions were reinvested. Class Z
shares are not subject to a sales charge or distribution and service (12b-1)
fees.

<PAGE>

Class C
(CHART)

Average Annual Total Returns

With Sales Charge As of 1/31/00
Since Inception 20.96%
One Year 16.97
- ----------------------------------
Without Sales Charge As of 1/31/00
Since Inception 21.73%
One Year 19.16

Class Z
(CHART)

Average Annual Total Returns

As of 1/31/00
Since Inception 22.90%
One Year 20.25

The S&P 500 Index is an unmanaged index of 500 stocks of large U.S. companies.
It gives a broad look at how stock prices have performed. The S&P 500 Index
returns include the reinvestment of all dividends, but do not include the
effect of sales charges or operating expenses of a mutual fund. The securities
in the Index may differ substantially from the securities in the Fund. The
Index is not the only one that may be used to characterize performance of
equity funds, and other indexes may portray different comparative performance.
Investors cannot invest directly in an index.

These graphs are furnished to you in accordance with SEC regulations.

<PAGE>

Prudential Mutual Fund Family
- -------------------------------------------------------------------------------
Prudential offers a broad range of mutual funds designed to meet your
individual needs. For information about these funds, contact your financial
adviser or call us at (800) 225-1852. Read the prospectus carefully before you
invest or send money.

STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund

Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund

GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
Prudential Europe Index Fund
Prudential Pacific Index Fund
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Global Utility Fund, Inc.
Target Funds
International Equity Fund

Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.

BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
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 Index Series Fund
Prudential Bond Market Index Fund
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Target Funds
Total Return Bond Fund

Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series

Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.

MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.

Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series

COMMAND Funds
COMMAND Money Fund
COMMAND Government Fund
COMMAND Tax-Free Fund

Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series

<PAGE>

Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

(800) 225-1852

Fund Symbols NASDAQ CUSIP
Class A PTWAX 743979106
Class B PTWBX 743979205
Class C PTWCX 743979304
Class Z PTWZX 743979403

- ---------------------------------------
visit our website at www.prudential.com
- ---------------------------------------

Trustees
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
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
Stephen M. Ungerman, Assistant Treasurer

Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Investment Advisers
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777

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 15005
New Brunswick, NJ 08906

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

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) Printed on Recycled Paper

<PAGE>

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.

This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.

MF183E (LOGO) Printed on Recycled Paper