<PAGE>
Strategic PartnersSM
(ICON)
Strategic Partners Focused Growth Fund
SEMIANNUAL REPORT
AUGUST 31, 2000
Fund Type Stock
Objective Long-term growth of capital
(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.
<PAGE>
Strategic PartnersSM Strategic Partners Focused Growth Fund
Performance at a Glance
Investment Goals and Style
The Strategic Partners Focused Growth Fund seeks
long-term growth of capital. We normally invest at
least 65% of total assets in equity-related
securities of U.S. companies that we believe have
strong capital appreciation potential. The Fund's
strategy is to combine the efforts of two
investment advisers and to invest in the favorite
stock selection ideas of three portfolio managers
(two of whom invest as a team). In deciding which
stocks to buy, each investment adviser uses a
growth investment style. This means that each
adviser will invest in stocks it believes could
experience superior sales or earnings growth.
Portfolio Composition
Sectors expressed as a percentage of
net assets as of 8/31/00
29.2% Technology
22.1 Telecommunications
13.3 Financial Services
10.7 Retail
7.5 Pharmaceuticals
3.9 Media
2.5 Internet
2.5 Oil & Gas
2.4 Biotechnology
1.8 Airlines
4.1 Cash & Equivalents
Five Largest Holdings-Alliance
Expressed as a percentage of
net assets as of 8/31/00
3.9% Citigroup, Inc.
Financial Services
3.4 Kohl's Corp.
Retail
3.1 Home Depot, Inc.
Retail
3.1 Cisco Systems, Inc.
Technology
3.0 Pfizer, Inc.
Pharmaceuticals
Five Largest Holdings-Jennison
Expressed as a percentage of
net assets as of 8/31/00
4.7% Goldman Sachs Group Inc.
Financial Services
3.7 Cisco Systems, Inc.
Technology
3.3 Intel Corp.
Technology
3.3 Citigroup, Inc.
Financial Services
2.9 JDS Uniphase Corp.
Telecommunications
Holdings are subject to change.
<PAGE>
www.prudential.com (800) 225-1852
Cumulative Total Returns1 As of 8/31/00
Since Inception2 Since Inception2
(Without sales charge) (With sales charge)
Class A 8.40% 2.98%
Class B 8.20 3.20
Class C 8.20 6.12
Class Z 8.50 8.50
Lipper Large-Cap
Growth Fund Avg.3 15.47 N/A
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. Since the Fund has been in
existence less than one year, returns are
cumulative, and therefore no average annual total
returns are presented. 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, 6/1/00.
3 The Lipper Since Inception return is for all
funds in each share class in the Large-Cap Growth
Fund category. The Lipper Large-Cap Growth Fund Average
is unmanaged and 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&Pr Mid-Cap 400 Index, invest in
companies with long-term earnings expected to grow
significantly faster than the earnings of the
stocks represented in a major unmanaged stock
index, and have an above-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.
1
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Strategic PartnersSM
Strategic Partners Focused Growth Fund
Dear Shareholder,
The short reporting period between the June 1,
2000, inception of the Strategic Partners Focused
Growth Fund and the August 31 end of its fiscal
half-year was a good one for growth investing. The
Fund's Class A shares returned 8.40% over these
three months-2.98% for those paying the maximum
one-time Class A share sales charge.
Despite the Fund's high return, it trailed the
15.47% Lipper Large-Cap Growth Fund Average
primarily because it had substantial holdings of
telecommunications-related and media stocks-growth
sectors that fell in value over this period. Their
decline was a correction to their exceptional gains
in 1999 and early 2000. Some of the Fund's
retailers and an airline stock also held back
performance, while its financial holdings and some
of its technology investments drove its strong
overall return.
During calendar year 2000, both before and after
this reporting period, investment styles have
alternated in market favor with astonishing
rapidity. In addition, the behavior of the equity
markets overall was very erratic as investors
shifted their primary concern about the economy
between fear that rapid growth would cause
inflation and fear that slow growth would hurt
profits.
By the end of September, the Russell 1000 Growth
Index (which represents the Fund's target universe
of stocks) had a negative 1.37% return for the year
to date. However, stock investors with a longer
time horizon would see that return in perspective:
over the past 10 years, the Russell 1000 Growth
Index averaged an annual return above 20%.
Volatility in the short term is normal. Needless to
say, a return over three months is no basis for
expectations about future performance.
2
<PAGE>
We believe investors should diversify their holdings, and not
expect the strong style dominance of the past few
years to be repeated in either direction.
Historically, growth and value styles both have
good long-term records, with market favor often
alternating between the two. Diversification is the
best buffer against such changes, while a time
horizon beyond five years helps you ride out the
volatility calmly. Few doubt that current trends in
several industries are dramatically changing the
way we live. The Strategic Partners Focused Growth
Fund looks for companies that will benefit most
from those changes.
We appreciate your confidence, and look forward to
serving your investment needs in the future.
Sincerely,
John R. Strangfeld, President
Strategic Partners Focused Growth Fund
3
<PAGE>
Strategic PartnersSM Strategic Partners Focused Growth Fund
Semiannual Report August 31, 2000
INVESTMENT ADVISER'S REPORT
BETTER PERFORMING SECTORS
Financials. Our return over the brief three-month
reporting period was
substantial. We invested in three of the world's
largest investment banks: Goldman Sachs, Citigroup,
and Merrill Lynch. While the investment business is
booming-mergers/acquisitions and stock market
transactions were very lively-the number of
competitors has been shrinking. Dominant firms are
absorbing rivals. Together, the firms in which we
invested have a large
market share, and their stock performance reflected
that strength. We also benefited from our holdings
in MBNA, a credit card-focused bank. MBNA also was
helped by consolidation in its sector, and by a
relatively low share price for its estimated 20%
long-term earnings growth.
Technology. Internet infrastructure is still being
built up rapidly, and stocks of the companies
supplying the components continue to do well. Our
large gainers included EMC (large computer memory
systems), Intel (computer chips), Sun Microsystems
(networking computers), and Nortel Networks and
Global Crossing (both in digital fiberoptic cable
systems). We took our gains on JDS Uniphase (fiber
optics).
Retailers. Tiffany is a luxury goods company. It
benefited from the economic recovery in Asia,
accelerating economies in Europe, and continuing
strength in the United States. Kohl's, a U.S.-based
lower-end retailer, had more modest gains. Our
performance was hurt by our holdings in Home Depot.
Analysts have come to expect extraordinary growth
from Home Depot, and even their expectations in the
strong 20%-25% range-slightly below the stock's
growth rate over the past few years-may have
disappointed. Those expectations for long-term
profit growth are, however, about twice the
expectations for the S&P 500.
4
<PAGE>
www.prudential.com (800) 225-1852
WEAK PERFORMING SECTORS
Our performance was hurt by investments in a few
industries that declined over this period.
Telecommunications. Mobile communications hardware
firms (Nokia and Ericsson) and some service
providers (such as Vodafone, the world's largest,
and AT&T) were hurt by fears of a slowdown in
growth. While Vodafone made a large investment in
bandwidth licenses (room in the available
broadcasting space), there was some fear of a
temporary saturation in the European markets.
However, our investment in Qwest, a U.S.
telecommunications service provider, made strong
gains.
Two cable TV companies, Univision and Liberty
Media, also declined over the period.
Airlines. Our investment in UAL was hurt by the
double impact of rapidly rising jet fuel prices and
higher labor costs after the precedent-setting
contract that settled its pilots' strike.
Nonetheless, airlines are flying full, and demand
is not likely to abate. Moreover, Internet-related
price cutting is moderating. We believe that as
both business and retirement travel increases, the
industry is on a long-term growth path.
Strategic Partners Focused Growth Management Team
5
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Portfolio of Investments as of August 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 95.9%
Common Stocks
-------------------------------------------------------------------------------------
Airlines 1.8%
163,700 UAL Corp. $ 7,816,675
-------------------------------------------------------------------------------------
Biotechnology 2.4%
141,400 Amgen, Inc. (a) 10,719,888
-------------------------------------------------------------------------------------
Financial Services 13.3%
544,867 Citigroup, Inc. 31,806,591
163,600 Goldman Sachs Group, Inc. 20,951,025
181,500 MBNA Corp. 6,409,219
----------------
59,166,835
-------------------------------------------------------------------------------------
Internet 2.5%
90,700 Yahoo! Inc. (a) 11,020,050
-------------------------------------------------------------------------------------
Media 3.9%
160,400 Univision Communications, Inc. (a) 7,077,650
151,400 Viacom, Inc.(a) 10,191,112
----------------
17,268,762
-------------------------------------------------------------------------------------
Oil & Gas 2.5%
196,700 BP Amoco Plc (ADR) 10,867,675
-------------------------------------------------------------------------------------
Pharmaceuticals 7.5%
143,200 American Home Products Corp. 7,759,650
590,100 Pfizer, Inc. 25,521,825
----------------
33,281,475
-------------------------------------------------------------------------------------
Retail 10.7%
290,500 Home Depot, Inc. 13,962,156
434,800 Kohl's Corp. (a) 24,348,800
221,300 Tiffany & Co. 9,211,613
----------------
47,522,569
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Portfolio of Investments as of August 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Technology 29.2%
135,600 Applied Materials, Inc. (a) $ 11,703,975
438,800 Cisco Systems, Inc. (a) 30,112,650
236,200 EMC Corp. (a) 23,147,600
344,000 Intel Corp. 25,757,000
40,000 PMC-Sierra, Inc. (a) 9,440,000
80,000 Sun Microsystems, Inc. (a) 10,155,000
288,900 Texas Instruments, Inc. 19,338,244
----------------
129,654,469
-------------------------------------------------------------------------------------
Telecommunications 22.1%
97,500 Amdocs Ltd. (a) 6,965,156
480,200 AT&T Corp. 10,264,275
353,500 Global Crossing Ltd. (a) 10,627,094
140,800 JDS Uniphase Corp. (a) 17,527,400
274,700 L.M. Ericsson AB (ADR) 5,631,350
282,400 Nortel Networks Corp. 23,033,250
181,100 Qwest Communications International, Inc. (a) 9,349,288
359,800 Vodafone Group Plc (ADR) 14,729,312
----------------
98,127,125
----------------
Total long-term investments (cost $393,843,735) 425,445,523
----------------
SHORT-TERM INVESTMENTS 3.6%
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Moody's Interest Maturity Value
(000) Description Ratings Rate Date (Note 1)
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Commercial Paper 3.6%
$8,093 American Express Co. P1 6.55% 9/1/00 8,093,000
7,943 General Electric Capital Corp. P1 6.65% 9/1/00 7,943,000
--------------
Total short-term investments
(cost $16,036,000) 16,036,000
--------------
Total Investments 99.5%
(cost $409,879,735) 441,481,523
Other assets in excess of
liabilities 0.5% 2,076,038
--------------
Net Assets 100% $ 443,557,561
--------------
--------------
</TABLE>
------------------------------
(a) Non-income producing security.
ADR--American Depository Receipt.
See Notes to Financial Statements 7
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
August 31, 2000
<S> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $409,879,735) $ 441,481,523
Receivable for Fund shares sold 3,405,986
Dividends and interest receivable 171,979
Deferred offering cost 153,891
Deferred organizational cost 18,052
Prepaid assets 2,882
---------------
Total assets 445,234,313
---------------
LIABILITIES
Bank overdraft 40,340
Payable for Fund shares reacquired 546,784
Accrued expenses and other liabilities 471,059
Management fee payable 321,452
Distribution fee payable 289,773
Foreign withholding taxes payable 7,344
---------------
Total liabilities 1,676,752
---------------
NET ASSETS $ 443,557,561
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 40,963
Paid-in capital in excess of par 414,297,197
---------------
414,338,160
Accumulated net investment loss (1,170,103)
Accumulated net realized loss on investments (1,212,284)
Net unrealized appreciation on investments 31,601,788
---------------
Net assets, August 31, 2000 $ 443,557,561
---------------
---------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
August 31,
2000
<S> <C> <C>
--------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($72,672,241
/ 6,703,385 shares of common stock issued and
outstanding) $10.84
Maximum sales charge (5% of offering price) .57
--------------
Maximum offering price to public $11.41
--------------
--------------
Class B:
Net asset value and redemption price per share ($195,794,336
/ 18,089,886 shares of common stock issued and
outstanding) $10.82
--------------
--------------
Class C:
Net asset value and redemption price per share ($146,680,932
/ 13,552,172 shares of common stock issued and
outstanding) $10.82
Sales charge (1% of offering price) .11
--------------
Maximum offering price to public $10.93
--------------
--------------
Class Z:
Net asset value and redemption price per share ($28,410,052
/ 2,618,027 shares of common stock issued and
outstanding) $10.85
--------------
--------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
June 2, 2000(a)
Through
August 31, 2000
<S> <C> <C>
-----------------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Dividends (net of foreign withholding tax of $11,294) $ 368,879
Interest 593,966
------------------
Total income 962,845
------------------
Expenses
Management fee 885,735
Distribution fee--Class A 41,950
Distribution fee--Class B 427,730
Distribution fee--Class C 325,477
Registration fees 175,000
Transfer agent's fees and expenses 75,000
Reports to shareholders 74,000
Amortization of offering costs 51,109
Custodian's fees and expenses 40,000
Audit fee and expense 10,000
Trustees' fees 9,000
Legal fees 8,000
Miscellaneous expenses 9,947
------------------
Total expenses 2,132,948
------------------
Net investment loss (1,170,103)
------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions (1,212,284)
Net unrealized appreciation on investments 31,601,788
------------------
Net gain on investments 30,389,504
------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 29,219,401
------------------
------------------
---------------
(a) Commencement of investment operations.
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
June 2, 2000(a)
Through
August 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (1,170,103)
Net realized loss on investments (1,212,284)
Net unrealized appreciation on investments 31,601,788
------------------
Net increase in net assets resulting from operations 29,219,401
------------------
Fund share transactions (Net of share conversions) (Note 5)
Net proceeds from shares sold 431,817,698
Cost of shares reacquired (17,579,538)
------------------
Net increase in net assets from Fund share transactions 414,238,160
------------------
Total increase 443,457,561
NET ASSETS
Beginning of period 100,000
------------------
End of period $ 443,557,561
------------------
------------------
------------------------------
(a) Commencement of investment operations.
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Notes to Financial Statements (Unaudited)
Strategic Partners Series (the 'Company') is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The Company currently consists of two Portfolios: Strategic
Partners Series--Strategic Partners Focused Growth Fund (the 'Fund') and
Strategic Partners New Era Growth Fund. The Company was established as a
Delaware business Trust on January 28, 2000. The Fund had no significant
operations other than the issuance of 2,500 shares of each Class A, Class B,
Class C and Class Z shares of beneficial interest for $100,000 on March 15, 2000
to Prudential Investments Fund Management LLC ('PIFM').
The investment objective of the Fund is long-term growth of capital. The
Fund pursues its objective by investing primarily in approximately 40
equity-related securities that are selected by the Fund's two investment
advisers (up to approximately 20 each) as having strong capital appreciation
potential.
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: Securities for which the primary market is on an
exchange and NASDAQ National Market Securities are valued at the last sales
price on such exchange on the day of valuation, or, if there was no sale on such
day, at the mean between the last bid and asked prices on such day or at the bid
price on such day in the absence of an asked price. Securities that are actively
traded in the over-the-counter market, including listed securities for which the
primary market is believed by PIFM, in consultation with the subadvisor, to be
over-the-counter, are valued by an independent pricing agent or principal market
maker. Privately placed securities including equity securities for which market
prices may be obtained from primary dealers shall be valued at the bid prices
provided by such primary dealers. Securities for which market quotations are not
readily available, may be valued using the last available market quotation for a
period not to exceed five days, provided PIFM and the subadvisors feel this is
representative of market value, afterwards, such securities are valued in good
faith under procedures adopted by the Trustees.
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.
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
12
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Notes to Financial Statements (Unaudited) Cont'd.
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 annually, and distributions of net realized capital gains, if
any, 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: For federal income tax purposes, each series in the Company is
treated as a separate tax paying entity. 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 $19,000 was incurred
and expensed in connection with the organization of the Fund. Offering cost of
approximately $205,000 are being amortized ratably over a period of twelve
months from the date the Fund commenced investment operations.
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'), Alliance Capital
Management, L.P. ('Alliance') and Jennison Associates LLC ('Jennison'). Each
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.,
13
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Notes to Financial Statements (Unaudited) Cont'd.
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 .90 of 1% of the Fund's average daily net assets up to and
including $1 billion and .85 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 PIC 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. Alliance is compensated by PIFM for its
services at the rate .60 of 1% of the average daily net assets of the portion of
the Fund that Alliance manages up to and including $1 billion and .55 of 1% of
such average daily net assets in excess of $1 billion.
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 .25 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 period ended August 31, 2000.
PIMS has advised the Fund that it has received approximately $2,671,600
and $1,367,800 in front-end sales charges resulting from sales of Class A and
Class C shares, respectively, during the period ended August 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 $78,800 and
$19,600 in contingent deferred sales charges imposed upon certain redemptions by
Class B and Class C shareholders, respectively.
14
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Notes to Financial Statements (Unaudited) Cont'd.
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 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 period ended August 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 period ended August 31, 2000,
the Fund incurred fees of approximately $52,500 for the services of PMFS. As of
August 31, 2000, approximately $27,000 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 period ended August 31, 2000, Prudential Securities Incorporated,
an indirect wholly owned subsidiary of Prudential, earned $5,800 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 period ended August 31, 2000 aggregated $512,376,008 and $117,319,989,
respectively.
The federal income tax basis of the Fund's investments at August 31, 2000
was $410,605,352 and, accordingly, net unrealized appreciation for federal
income tax purposes was $30,876,171 (gross unrealized appreciation--$39,928,624;
gross unrealized depreciation--$9,052,453).
Note 5. 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
15
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Notes to Financial Statements (Unaudited) Cont'd.
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>
June 2, 2000(a) through
August 31, 2000:
Shares sold 7,301,347 $ 73,767,200
Shares reacquired (609,988) (6,469,166)
---------- ------------
Net increase in shares outstanding before conversion 6,691,359 67,298,034
Shares issued upon conversion from Class B 9,526 99,923
---------- ------------
Net increase in shares outstanding 6,700,885 $ 67,397,957
---------- ------------
---------- ------------
<CAPTION>
Class B
-----------------------------------------------------------
<S> <C> <C>
June 2, 2000(a) through
August 31, 2000:
Shares sold 18,325,517 $185,800,779
Shares reacquired (228,605) (2,434,102)
---------- ------------
Net increase in shares outstanding before conversion 18,096,912 183,366,677
Shares reacquired upon conversion into Class A (9,526) (99,923)
---------- ------------
Net increase in shares outstanding 18,087,386 $183,266,754
---------- ------------
---------- ------------
<CAPTION>
Class C
-----------------------------------------------------------
<S> <C> <C>
June 2, 2000(a) through
August 31, 2000:
Shares sold 13,789,244 $139,676,904
Shares reacquired (239,572) (2,559,302)
---------- ------------
Net increase in shares outstanding 13,549,672 $137,117,602
---------- ------------
---------- ------------
<CAPTION>
Class Z
-----------------------------------------------------------
<S> <C> <C>
June 2, 2000(a) through
August 31, 2000:
Shares sold 3,202,109 $ 32,572,815
Shares reacquired (586,582) (6,116,968)
---------- ------------
Net increase in shares outstanding 2,615,527 $ 26,455,847
---------- ------------
---------- ------------
</TABLE>
---------------
(a) Commencement of investment operations.
16
<PAGE>
Strategic Partners Series Strategic Partners Focused Growth Fund
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A Class B Class C Class Z
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
June 2, June 2, June 2, June 2,
2000(a) 2000(a) 2000(a) 2000(a)
Through Through Through Through
August 31, August 31, August 31, August 31,
2000 2000 2000 2000
------------- ------------- ------------- -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 10.00 $ 10.00 $ 10.00 $ 10.00
------------- ------------- ------------- -------------
Income from investment
operations
Net investment loss (0.02) (0.03) (0.03) (0.01)
Net realized and unrealized gain
on investments and foreign
currencies 0.86 0.85 0.85 0.86
------------- ------------- ------------- -------------
Total from investment
operations 0.84 0.82 0.82 0.85
------------- ------------- ------------- -------------
Net asset value, end of period $ 10.84 $ 10.82 $ 10.82 $ 10.85
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
TOTAL RETURN(b): 8.40% 8.20% 8.20% 8.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 72,672 $ 195,795 $ 146,681 $ 28,410
Average net assets (000) $ 67,305 $ 171,562 $ 130,548 $ 25,315
Ratios to average net assets:(c)
Expenses, including
distribution fees 1.26% 2.01% 2.01% 1.01%
Expenses, excluding
distribution fees 1.01% 1.01% 1.01% 1.01%
Net investment loss (0.46)% (1.03)% (1.03)% (0.26)%
For Class A, B, C and Z shares
Portfolio turnover 30% 30% 30% 30%
</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.
See Notes to Financial Statements 17
<PAGE>
Strategic PartnersSM Strategic Partners Focused Growth Fund
Getting the Most from Your Mutual Fund
Some mutual fund shareholders won't ever read this-
they don't read annual and semiannual reports. It's
quite understandable. These annual and semiannual
reports are prepared to comply with federal
regulations, and are often written in language that
is difficult to understand. So when most people run
into those particularly daunting sections of these
reports, they don't read them.
We think that's a mistake
We believe you will find this report easy to
understand and pleasant to read. We hope you'll
find it profitable to spend a few minutes
familiarizing yourself with your investment. Here's what you'll
find in the report:
Performance at a Glance
Since an investment's performance is often a
shareholder's primary concern, we present
performance information in two different formats.
You'll find it first on the "Performance at a
Glance" page where we compare the Fund and the
comparable average calculated by Lipper, Inc., a
nationally recognized mutual fund rating agency. We
report both the cumulative total returns and the
average annual total returns. The cumulative total
return is the total amount of income and
appreciation the Fund has achieved in various time
periods. The average annual total return is an
annualized representation of the Fund's
performance. It gives you an idea of how much the
Fund has earned in an average year for a given time
period. Under the performance box, you'll see
legends that explain the performance information,
whether fees and sales charges have been included
in returns, and the inception dates for the Fund's
share classes.
See the performance comparison charts at the back
of the report for more performance information.
Please keep in mind that past performance is not
indicative of future results.
<PAGE>
www.prudential.com (800) 225-1852
INVESTMENT ADVISER'S REPORT
The portfolio manager, who invests your money for
you, reports on successful-and not-so-successful-strategies in this
section of your report. Look for recent purchases
and sales here, as well as information about the
sectors the portfolio manager favors, and any
changes that are on the
drawing board.
Portfolio of Investments
This is where the report begins to appear
technical, but it's really just a
listing of each security held at the end of the
reporting period, along with valuations and other
information. Please note that sometimes we discuss
a security in the "Investment Adviser's Report"
section that doesn't appear in this listing because
it was sold before the close of the reporting
period.
Statement of Assets and Liabilities
The balance sheet shows the assets (the value of the Fund's holdings),
liabilities (how much the Fund owes), and net assets (the Fund's
equity, or holdings after the Fund pays its debts)
as of the end of the reporting period. It also
shows how we calculate the net asset value per
share for each class of shares. The net asset value
is reduced by payment of your
dividend, capital gain, or other distribution, but
remember that the money or new shares are being
paid or issued to you. The net asset value
fluctuates daily, along with the value of every
security in the portfolio.
Statement of Operations
This is the income statement, which details income
(mostly interest and
dividends earned) and expenses (including what you
pay us to manage your money). You'll also see
capital gains here-both realized and unrealized.
<PAGE>
Strategic PartnersSM Strategic Partners Focused Growth Fund
Getting the Most from Your Mutual Fund
Statement of Changes in Net Assets
This schedule shows how income and expenses
translate into changes
in net assets. The Fund is required to pay out the
bulk of its income to shareholders every year, and
this statement shows you how we do it (through
dividends and distributions) and how that affects
the net assets. This statement also shows how money
from investors flowed into and out of the Fund.
Notes to Financial Statements
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition,
they outline how securities are priced. The Notes
also explain who manages and distributes the Fund's
shares and, more importantly, how much they are
paid for doing so. Finally, the Notes explain how
many shares are outstanding and the number issued
and redeemed over the period.
Financial Highlights
This information contains many elements from prior
pages, but on a per-share basis. It is designed to help you
understand how the Fund performed, and to compare this year's performance
and expenses to those of prior years.
Independent accountant's Report
Once a year, an outside auditor looks over our
books and certifies that
the financial statements are fairly presented and
comply with generally accepted accounting principles.
Tax Information
This is information that we report annually about
how much of your total return is taxable. Should
you have any questions, you may want to consult a
tax adviser.
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906-5005
(800) 225-1852
(732) 482-7555 (calling from outside the U.S.)
Trustees
Eugene C. Dorsey
Saul K. Fenster, Ph.D.
Robert F. Gunia
Prof. Maurice F. Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
David R. Odenath, Jr.
Stephen Stoneburn
John R. Strangfeld, Jr.
Joseph Weber
Clay T. Whitehead
Officers
John R. Strangfeld, Jr., President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
William V. Healey, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, NY 10105
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 SPFAX 86276R106
Class B SPFBX 86276R205
Class C SPFCX 86276R304
Class Z SPFZX 86276R403
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 August 31, 2000, were not audited and,
accordingly, no opinion is expressed on them.
<PAGE>
<PAGE>
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