<PAGE>
FUND TYPE:
-------------------------------------
Money market
INVESTMENT OBJECTIVE:
-------------------------------------
The highest level of current income that is exempt
from Massachusetts state and federal income taxes,
consistent with liquidity and the preservation of
capital
[LOGO]
PRUDENTIAL
MUNICIPAL SERIES FUND
---------------------------------------------------------------
MASSACHUSETTS MONEY MARKET SERIES
PROSPECTUS: DECEMBER 23, 1999
<TABLE>
<S> <C>
As with all mutual funds, the
Securities and Exchange Commission has
not approved or disapproved the
Series' shares nor has the SEC
determined that this prospectus is
complete or accurate. It is a criminal
offense to state otherwise. [LOGO]
</TABLE>
<PAGE>
TABLE OF CONTENTS
-------------------------------------
<TABLE>
<S> <C>
1 RISK/RETURN SUMMARY
1 Investment Objective and Principal Strategies
1 Principal Risks
3 Evaluating Performance
4 Fees and Expenses
5 HOW THE SERIES INVESTS
5 Investment Objective and Policies
7 Other Investments and Strategies
8 Investment Risks
12 HOW THE SERIES IS MANAGED
12 Board of Trustees
12 Manager
12 Investment Adviser
13 Distributor
13 Year 2000 Readiness Disclosure
14 SERIES DISTRIBUTIONS AND TAX ISSUES
14 Distributions
15 Tax Issues
16 HOW TO BUY, SELL AND EXCHANGE SHARES OF THE SERIES
16 How to Buy Shares
21 How to Sell Your Shares
25 How to Exchange Your Shares
26 Telephone Redemptions or Exchanges
27 FINANCIAL HIGHLIGHTS
28 THE PRUDENTIAL MUTUAL FUND FAMILY
FOR MORE INFORMATION (Back Cover)
</TABLE>
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MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
RISK/RETURN SUMMARY
-------------------------------------
This section highlights key information about the MASSACHUSETTS MONEY MARKET
SERIES (the Series) of the PRUDENTIAL MUNICIPAL SERIES FUND (the Fund).
Additional information follows this summary.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is to provide the highest level of CURRENT INCOME that
is EXEMPT FROM MASSACHUSETTS STATE AND FEDERAL INCOME TAXES consistent with
liquidity and the preservation of capital. This means we invest primarily in
short-term Massachusetts state and municipal bonds, which are debt obligations
or fixed income securities, including notes, commercial paper and other
securities, as well as short-term obligations of other issuers that pay interest
income that is exempt from those taxes (collectively called "Massachusetts
obligations"). The Series invests in Massachusetts obligations which are
high-quality money market instruments with remaining maturities of 13 months or
less. In pursuing our objective, the Series will invest at least 80% of its
total assets in municipal securities which pay income exempt from federal income
taxes; these primarily will be Massachusetts obligations unless the investment
adviser is unable to purchase Massachusetts obligations that meet the investment
policies of the Series. The Series may invest in municipal bonds the interest
and/or principal payments on which are insured by the bond issuers or other
parties. The Series may also invest in certain municipal bonds the interest on
which is subject to the federal alternative minimum tax (AMT).
While we make every effort to achieve our investment objective and maintain
a net asset value of $1 per share, we can't guarantee success.
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. The securities
in which the Series invests are generally subject to the risk that the issuer
may be unable to make principal and interest payments when they are due, as well
as the risk that the securities may lose value because interest rates change or
because there is a lack of confidence in the issuer.
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MONEY MARKET FUNDS
Money market funds--which hold high-quality short-term debt obligations--
provide investors with a lower risk, highly liquid investment option. These
funds attempt to maintain a net asset value of $1 per share, although there can
be no guarantee that they will always be able to do so.
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1
<PAGE>
RISK/RETURN SUMMARY
------------------------------------------------
The Series may purchase insured municipal bonds to reduce credit risks.
Although insurance coverage reduces credit risks by providing that the insurer
will make timely payment of interest and/or principal, it does not provide
protection against the market fluctuations of insured bonds or fluctuations in
the price of the shares of the Series. An insured municipal bond fluctuates in
value largely based on factors relating to the insurer's creditworthiness or
ability to satisfy its obligations.
Municipal bonds may also be subject to the risk that the borrower may not
set aside funds to make the bond payments.
Because the Series will concentrate its investments in Massachusetts
obligations, the Series is more susceptible to economic, political and other
developments that may adversely affect issuers of Massachusetts obligations than
a municipal money market fund that is not as geographically concentrated. By way
of illustration, although Massachusetts has a relatively diversified economy,
Massachusetts' largest economic sector, the service sector, concentrates in the
health care, information technology, knowledge creation and financial services
industries. The Series, therefore, may be more susceptible to developments
affecting those industries than a municipal bond fund that invests in
obligations of several states. This example illustrates just one of the risks of
investing in Massachusetts obligations. For more information on the risks of
investing in Massachusetts obligations, see "Description of the Fund, Its
Investments and Risks" in the Statement of Additional Information.
The Series is nondiversified, meaning that we can invest a higher percentage
of its assets in the securities of fewer issuers than a diversified fund.
Investing in a nondiversified series involves greater risk than investing in a
diversified series.
Although investments in mutual funds involve risk, investing in money market
portfolios like the Series is generally less risky than investments in other
types of funds. This is because the Series invests only in high-quality
securities with remaining maturities of 13 months or less and limits the average
maturity of the portfolio to 90 days or less. To satisfy the average maturity
and maximum maturity requirements, securities with demand features are treated
as maturing on the date that the Series can demand repayment of the security.
For more information about the risks associated with the Series, see "How
the Series Invests--Investment Risks."
An investment in the Series is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
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2 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
RISK/RETURN SUMMARY
------------------------------------------------
government agency. Although we seek to preserve the value of your investment at
$1 per share, it is possible to lose money by investing in the Series.
EVALUATING PERFORMANCE
A number of factors--including risk--can affect how the Series performs. The
following bar chart shows the Series' performance for each full calendar year of
operation. The tables provide additional performance information for the periods
indicated. The bar chart and tables below demonstrate the risk of investing in
the Series and how returns can change from year to year. The Average Annual
Returns table also compares the Series' performance to the performance of a
tax-free money market index. Past performance does not mean that the Series will
achieve similar results in the future. For current yield information, you can
call us at (800) 225-1852.
ANNUAL RETURNS(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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<S> <C>
1992 2.85%
1993 1.96%
1994 2.19%
1995 3.31%
1996 2.96%
1997 3.00%
1998 2.63%
BEST QUARTER: 1.03% (4th quarter of 1991)
WORST QUARTER: .40% (1st quarter of 1994)
</TABLE>
AVERAGE ANNUAL RETURNS(1) (AS OF 12-31-98)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
1 YR 5 YRS SINCE INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series shares 2.62% 2.83% 2.29% (since 8-5-91)
IBC Average(2) 2.80% 2.69% 2.75% (since 8-5-91)
</TABLE>
YIELD(1) (AS OF 12-31-98)
<TABLE>
<S> <C>
7-Day yield of the Series 2.79%
7-Day tax-equivalent yield of the Series 5.25%
</TABLE>
<TABLE>
<S> <C>
1 THE SERIES' RETURNS AND YIELD ARE AFTER DEDUCTION OF
EXPENSES. TAX-EQUIVALENT YIELD IS CALCULATED BASED ON A
FEDERAL TAX RATE OF 39.6% AND THE APPLICABLE STATE INCOME
TAX RATE.
2 THE IBC AVERAGE IS BASED UPON THE AVERAGE RETURN OF ALL
MUTUAL FUNDS IN THE INTERNATIONAL BUSINESS COMMUNICATIONS
FINANCIAL DATA TAX-FREE STATE-SPECIFIC MONEY FUND
(MASSACHUSETTS) CATEGORY.
</TABLE>
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3
<PAGE>
RISK/RETURN SUMMARY
------------------------------------------------
FEES AND EXPENSES
These tables show the fees and expenses that you may pay if you buy and hold
shares of the Series.
SHAREHOLDER FEES(1) (PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<S> <C>
Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) None
Maximum deferred sales charge (load) (as a percentage of
the lower of original purchase price or sale proceeds) None
Maximum sales charge (load) imposed on reinvested
dividends and other distributions None
Redemption fees None
Exchange fee None
</TABLE>
ANNUAL SERIES OPERATING EXPENSES (DEDUCTED FROM SERIES ASSETS)
<TABLE>
<S> <C>
Management fees .500%
+ Distribution (12b-1) and service fees .125%
+ Other expenses .255%
= TOTAL ANNUAL SERIES OPERATING EXPENSES .88%
</TABLE>
<TABLE>
<S> <C>
(1) YOUR BROKER MAY CHARGE YOU A SEPARATE OR ADDITIONAL FEE FOR
PURCHASES AND SALES OF SHARES.
</TABLE>
EXAMPLE
This example will help you compare the cost of investing in the Series with the
cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Series for the time
periods indicated and then sell all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Series' operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
1 YR 3 YRS 5 YRS 10 YRS
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series shares $90 $281 $488 $1,084
</TABLE>
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4 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW THE SERIES INVESTS
-------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
The Series' investment objective is to provide the highest level of CURRENT
INCOME that is EXEMPT FROM MASSACHUSETTS STATE AND FEDERAL INCOME TAXES
consistent with liquidity and the preservation of capital. While we make every
effort to achieve our objective, we can't guarantee success.
The Series invests in high-quality money market instruments to try to
provide investors with current tax-free income while maintaining a stable net
asset value of $1 per share. We manage the Series to comply with specific rules
designed for money market mutual funds. To date, the Series' net asset value has
never deviated from $1 per share.
In pursuing the Series' objective, we invest primarily in short-term
MASSACHUSETTS OBLIGATIONS, including Massachusetts state and municipal bonds as
well as obligations of other issuers (such as issuers located in Puerto Rico,
the Virgin Islands and Guam) that pay interest income that is exempt from
Massachusetts state and federal income taxes. We normally invest so that at
least 80% of the total assets of the Series will be invested in municipal
securities which pay income exempt from federal income taxes; these primarily
will be Massachusetts obligations unless the investment adviser is unable to
purchase Massachusetts obligations that meet the investment policies of the
Series. The Series, however, may hold private activity bonds, which are
municipal bonds the interest on which is subject to the federal alternative
minimum tax (AMT).
Municipal bonds include GENERAL OBLIGATION BONDS and REVENUE BONDS. General
obligation bonds are obligations supported by the credit of an issuer that has
the power to tax and are payable from that issuer's general revenues and not
from any specific source. Revenue bonds, on the other hand, are payable from
revenues from a particular source.
The obligations that we purchase must be rated in one of the two highest
rating categories by at least two nationally recognized statistical rating
organizations (NRSROs), such as Moody's Investors Service, Inc. (rated at least
Aa, MIG-2 or Prime-2) or Standard & Poor's Rating Group (rated at least AA, SP-2
or A-2) or, if unrated, of comparable quality. We
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States and municipalities issue bonds in order to borrow money to finance a
project. You can think of bonds as loans that investors make to the state, local
government or other issuer. The issuer gets the cash needed to complete the
project and investors earn income on their investment.
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5
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
may also invest in insured municipal bonds. A rating is an assessment of the
likelihood of timely repayment of interest and principal (with respect to a
municipal bond) or payment of claims (with respect to an insurer of a municipal
bond) and can be useful when comparing different municipal bonds. These ratings
are not a guarantee of quality. The opinions of the rating agencies do not
reflect market risk and they may at times lag behind the current financial
conditions of the issuer or insurer. An investor can evaluate the expected
likelihood of debt repayment by an issuer by looking at its ratings as compared
to another similar issuer.
In determining which securities to buy and sell, the investment adviser will
consider, among other things, yield, maturity, issue, quality characteristics
and expectations regarding economic and political developments, including
movements in interest rates and demand for municipal bonds. The investment
adviser will seek to anticipate interest rate movements and will purchase and
sell municipal bonds accordingly. The investment adviser will also consider the
claims-paying ability with respect to insurers of municipal bonds. The
investment adviser will also seek to take advantage of differentials in yields
with respect to securities with similar credit ratings and maturities, but which
vary according to the purpose for which they were issued. The investment adviser
will also seek to take advantage of differentials in yields with respect to
securities issued for similar purposes with similar maturities, but which vary
according to ratings.
Debt obligations in general, including those listed above and any others
that we may purchase, are basically written promises to repay a debt. Among the
various types of debt securities we may purchase, the terms of repayment may
vary, as may the commitment of other parties to honor the obligations of the
issuer of the security. We may purchase securities that include demand features,
which allow us to demand repayment of a debt obligation before the obligation is
due or "matures." This means that we can purchase longer-term securities because
of our expectation that we can demand repayment of the obligation at an agreed-
upon price within a relatively short period of time. This procedure follows the
rules applicable to money market funds.
The securities that we may purchase may change over time as new types of
money market instruments are developed. We will purchase these new instruments,
however, only if their characteristics and features follow the rules governing
the operation of money market funds.
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6 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
For more information, see "Investment Risks" and the Statement of Additional
Information, "Description of the Fund, Its Investment and Risks." The Statement
of Additional Information--which we refer to as the "SAI"--contains additional
information about the Series. To obtain a copy, see the back cover page of this
prospectus.
The Series' investment objective is a fundamental policy that cannot be
changed without shareholder approval. The Board of the Prudential Municipal
Series Fund can change investment policies that are not fundamental.
OTHER INVESTMENTS AND STRATEGIES
In addition to the principal strategies, we may also make the following
investments to try to increase the Series' returns or protect its assets if
market conditions warrant.
MUNICIPAL ASSET-BACKED SECURITIES
The Series may invest in MUNICIPAL ASSET-BACKED SECURITIES. A municipal
asset-backed security is a type of pass-through instrument that pays interest
which is eligible for exclusion from federal income taxation based upon the
income from an underlying pool of municipal bonds.
FLOATING RATE BONDS AND VARIABLE RATE BONDS
The Series may invest in floating rate bonds and variable rate bonds. FLOATING
RATE BONDS are municipal bonds that have an interest rate that is set as a
specific percentage of a designated rate, such as the rate on Treasury bonds or
the prime rate at major commercial banks. The interest rate on floating rate
bonds changes when there is a change in the designated rate. VARIABLE RATE BONDS
are municipal bonds that have an interest rate that is adjusted, based on the
market rate at a specified period. They generally allow the Series to demand
payment of the bond on short notice for an amount that may be more or less than
the amount paid.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
The Series may purchase municipal bonds on a "WHEN-ISSUED" or "DELAYED-DELIVERY"
basis, without limit. When the Series makes this type of purchase, the price and
rate are fixed at the time of purchase, but delivery and payment for the bonds
take place at a later time. The Series does not earn interest income until the
date the bonds are delivered.
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7
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
REPURCHASE AGREEMENTS
The Series may use REPURCHASE AGREEMENTS where a party agrees to sell a security
to the Series and then repurchase it at an agreed-upon price at a stated time. A
repurchase agreement is like a loan by the Series to the other party which
creates a fixed return for the Series.
LIQUIDITY PUTS
The Series may purchase and exercise PUTS on municipal bonds without limit. Puts
give the Series the right to sell securities at a specified price and date. Puts
may be acquired to reduce the risk of the securities subject to the puts, but
puts may involve additional costs to the Series, which could reduce the Series'
return.
TEMPORARY DEFENSIVE STRATEGY
For temporary defensive purposes, the Series may hold up to 100% of its assets
in cash or short-term investment-grade bonds, including bonds that are not
exempt from state, local and federal income taxation. Investing heavily in these
securities can limit our ability to achieve the Series' objective, but can help
to preserve the Series' assets.
ADDITIONAL STRATEGIES
The Series also follows certain policies when it: BORROWS MONEY (the Series can
borrow up to 33 1/3% of the value of its total assets); and HOLDS ILLIQUID
SECURITIES (the Series may hold up to 10% of its net assets in illiquid
securities, including certain securities with legal or contractual restrictions
on resale, those without a readily available market and repurchase agreements
with maturities longer than 7 days). The Series is subject to certain investment
restrictions that are fundamental policies and cannot be changed without
shareholder approval. For more information about these restrictions, see the
SAI.
INVESTMENT RISKS
As noted, all investments involve risk, and investing in the Series is no
exception. Since the Series' holdings can vary significantly from broad market
indexes, performance of the Series can deviate from performance of the indexes.
This chart outlines the key risks and potential rewards of the Series' principal
investments and certain of the Series' non-principal investments and strategies.
See, too, "Description of the Fund, Its Investments and Risks" in the SAI.
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8 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
INVESTMENT TYPE
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS -- Concentration -- Tax-exempt interest
risk--the risk that income, except with
AT LEAST 80% bonds may lose value respect to certain
because of political, bonds, such as
economic or other private activity
events affecting bonds, which are
issuers of subject to the
Massachusetts federal alternative
obligations minimum tax (AMT)
-- Credit risk--the risk
that the borrower
can't pay back the
money borrowed or
make interest
payments
-- Market risk--the risk
that bonds will lose
value in the market
because interest
rates change or there
is a lack of
confidence in the
borrower
-- Illiquidity risk--the
risk that it may be
difficult to value
precisely and sell at
time or price desired
-- Nonappropriation
risk--the risk that
the municipality may
not include the bond
obligations in future
budgets
-- Tax risk--the risk
that federal, state
or local income tax
rates may decrease,
which could decrease
demand for municipal
bonds, or that a
change in law may
limit or eliminate
exemption of interest
on municipal bonds
from such taxes
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</TABLE>
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9
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
INVESTMENT TYPE (CONT'D)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL ASSET-BACKED -- Prepayment risk--the -- Regular interest
SECURITIES risk that the income
underlying bonds may -- Pass-through
PERCENTAGE VARIES be prepaid, partially instruments provide
or completely, greater
generally during diversification than
periods of falling direct ownership of
interest rates, which municipal bonds
could adversely
affect yield to
maturity and could
require the Series to
reinvest in lower
yielding bonds
-- Credit risk--the risk
that the underlying
municipal bonds will
not be paid by
issuers or by credit
insurers or
guarantors of such
instruments. Some
municipal
asset-backed
securities are
unsecured or secured
by lower-rated
insurers or
guarantors and thus
may involve greater
risk
-- Market risk
-- Tax risk
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VARIABLE/FLOATING RATE -- Value lags value of -- May offer protection
SECURITIES fixed-rate securities against interest rate
when interest rates changes
PERCENTAGE VARIES change
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</TABLE>
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10 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW THE SERIES INVESTS
------------------------------------------------
INVESTMENT TYPE (CONT'D)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
% OF SERIES' TOTAL ASSETS RISKS POTENTIAL REWARDS
------------------------------------------------------------------------------------
<S> <C> <C>
WHEN-ISSUED AND -- May magnify underlying -- May magnify underlying
DELAYED-DELIVERY investment losses investment gains
SECURITIES -- Investment costs may
exceed potential
PERCENTAGE VARIES underlying investment
gains
------------------------------------------------------------------------------------
ILLIQUID SECURITIES -- May be difficult to -- May offer more
value precisely attractive yield or
UP TO 10% OF NET ASSETS -- May be difficult to potential for growth
sell at the time or than more widely
price desired traded securities
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</TABLE>
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11
<PAGE>
HOW THE SERIES IS MANAGED
-------------------------------------
BOARD OF TRUSTEES
The Fund's Board of Trustees oversees the actions of the Manager, Investment
Adviser and Distributor and decides on general policies. The Board also oversees
the Fund's officers who conduct and supervise the daily business operations of
the Fund.
MANAGER
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC (PIFM)
GATEWAY CENTER THREE, 100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
Under a management agreement with the Fund, PIFM manages the Series'
investment operations and administers its business affairs. For the fiscal year
ended August 31, 1999, the Series paid PIFM management fees of .50% of the
Series' average net assets.
PIFM and its predecessors have served as manager or administrator to
investment companies since 1987. As of October 31, 1999, PIFM served as the
manager to all 46 of the Prudential mutual funds, and as manager or
administrator to 22 closed-end investment companies, with aggregate assets of
approximately $72 billion.
INVESTMENT ADVISER
The Prudential Investment Corporation, called Prudential Investments, is the
Series' investment adviser and has served as an investment adviser to investment
companies since 1984. Its address is Prudential Plaza, 751 Broad Street, Newark,
NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and reimburses Prudential Investments for its
reasonable costs and expenses.
Prudential Investments' Fixed Income Group is organized into teams that
specialize in different market sectors. The Fixed Income Policy Committee, which
is comprised of senior investment staff from each sector team, provides guidance
to the teams regarding duration risk, asset allocations and general risk
parameters. Portfolio managers contribute bottom-up security selection within
those guidelines. The Money Market Sector Team, headed by Joseph Tully, is
responsible for overseeing the day-to-day management of the Series.
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12 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW THE SERIES IS MANAGED
------------------------------------------------
DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Series'
shares under a Distribution Agreement with the Fund. The Fund has a Distribution
and Service Plan under Rule 12b-1 of the Investment Company Act. Under the Plan
and the Distribution Agreement, PIMS pays the expenses of distributing the
Series' shares and provides certain shareholder support services. The Fund pays
distribution and other fees to PIMS as compensation for its services. These
fees--known as 12b-1 fees--are shown in the "Fees and Expenses" tables.
YEAR 2000 READINESS DISCLOSURE
The services provided to the Fund and the shareholders by the Manager, the
Distributor, the Transfer Agent and the Custodian depend on the smooth
functioning of their computer systems and those of outside service providers.
Many computer software systems in use today cannot distinguish the year 2000
from the year 1900 because of the way dates are encoded and calculated. Such
event could have a negative impact on handling securities trades, payments of
interest and dividends, pricing and account services. Although, at this time,
there can be no assurance that there will be no adverse impact on the Fund, the
Manager, the Distributor, the Transfer Agent and the Custodian have advised the
Fund that they have been actively working on necessary changes to their computer
systems to prepare for the year 2000. The Fund and its Board receive, and have
received since early 1998, satisfactory quarterly reports from the principal
service providers as to their preparations for year 2000 readiness, although
there can be no assurance that the service providers (or other securities market
participants) will successfully complete the necessary changes in a timely
manner. Moreover, the Fund at this time has not considered retaining alternative
service providers or directly undertaken efforts to achieve year 2000 readiness,
the latter of which would involve substantial expenses without an assurance of
success.
Additionally, issuers of securities generally, as well as those purchased by
the Series, may confront year 2000 compliance issues which, if material and not
resolved, could have an adverse impact on securities markets and/ or a specific
issuer's performance and result in a decline in the value of the securities held
by the Series.
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13
<PAGE>
SERIES DISTRIBUTIONS AND TAX ISSUES
-------------------------------------
Investors who buy shares of the Series should be aware of some important tax
issues. For example, the Series distributes DIVIDENDS of ordinary income and any
REALIZED NET CAPITAL GAINS to shareholders. Dividends generally will be exempt
from federal income taxes. If, however, the Series invests in taxable
obligations, it will pay dividends that are not exempt from these income taxes.
The following briefly discusses some of the important state and federal tax
issues you should be aware of, but is not meant to be tax advice. For tax
advice, please speak with your tax adviser.
DISTRIBUTIONS
The Series distributes DIVIDENDS of any net investment income to shareholders
every month. For example, if the Series owns a City XYZ bond and the bond pays
interest, the Series will pay out a portion of this interest as a dividend to
its shareholders, assuming the Series' income is more than its costs and
expenses. These dividends generally will be EXEMPT FROM FEDERAL INCOME TAXES, as
long as 50% or more of the value of the Series' assets at the end of each
quarter is invested in state, municipal and other obligations, the interest on
which is excluded from gross income for federal income tax purposes.
As we mentioned before, the Series will concentrate its investments in
Massachusetts obligations. Series' dividends are EXEMPT FROM MASSACHUSETTS
PERSONAL INCOME TAXES FOR MASSACHUSETTS RESIDENT INDIVIDUALS AND OTHER RESIDENT
NONCORPORATE SHAREHOLDERS to the extent that they are derived from interest
payments on Massachusetts obligations or from certain long-term capital gains on
certain Massachusetts obligations. Dividends attributable to the interest on
taxable bonds held by the Series, market discount on taxable and tax-exempt
obligations and short-term capital gains, however, will be subject to federal,
state and local income tax at ordinary income tax rates.
Some shareholders may be subject to federal alternative minimum tax (AMT)
liability. Tax-exempt interest from certain bonds is treated as an item of tax
preference, and may be attributed to shareholders. A portion of all tax-exempt
interest is includable as an upward adjustment in determining a corporation's
alternative minimum taxable income. These rules could make you liable for the
AMT.
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14 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
SERIES DISTRIBUTIONS AND TAX ISSUES
------------------------------------------------
Although the Series is not likely to realize capital gains because of the
types of securities we purchase, any REALIZED NET CAPITAL GAINS will be paid to
shareholders (typically once a year). Capital gains are generated when the
Series sells assets for a profit.
For your convenience, Series distributions of dividends and capital gains
are AUTOMATICALLY REINVESTED in the Series. If you ask us to pay the
distributions in cash, we will send you a check if your account is with the
Transfer Agent. Otherwise, if your account is with a broker you will receive a
credit to your account. Either way, the distributions may be subject to taxes.
For more information about Automatic Reinvestment and other shareholder
services, see "How to Buy, Sell and Exchange Shares of the Series--How To Buy
Shares" at Step 3: Additional Shareholder Services.
TAX ISSUES
FORM 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year.
Series distributions are generally taxable in the year they are received,
except where we declare certain dividends in December of a calendar year but
actually pay them in January of the following year. In such cases, the dividends
are treated as if they were paid on December 31 of the prior year. Corporate
shareholders are not eligible for the 70% dividends-received deduction on
dividends paid by the Series.
WITHHOLDING TAXES
If federal law requires you to provide the Series with your tax identification
number and certifications as to your tax status, and you fail to do this, or if
you are otherwise subject to back-up withholding, we generally withhold and pay
to the U.S. Treasury 31% of your distributions and gross sale proceeds.
Dividends of net investment income and short-term capital gains paid to a
NONRESIDENT FOREIGN SHAREHOLDER generally will be subject to a U.S. withholding
tax of 30%. This rate may be lower, depending on any tax treaty the U.S. may
have with the shareholder's country.
--------------------------------------------------------------------------------
15
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
-------------------------------------
HOW TO BUY SHARES
STEP 1: OPEN AN ACCOUNT
If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Series for you, call PRUDENTIAL MUTUAL FUND SERVICES
LLC (PMFS) at (800) 225-1852 or contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INVESTMENT SERVICES
P.O. BOX 15020
NEW BRUNSWICK, NJ 08906-5020
To purchase by wire, call the number above to obtain an application. After
PMFS receives your completed application, you will receive an account number.
For additional information about purchasing shares of the Series, see the back
cover page of this prospectus. We have the right to reject any purchase order
(including an exchange into the Series) or suspend or modify the Series' sale of
its shares.
Except as noted below, the minimum initial investment for Series shares is
$1,000 and the minimum subsequent investment is $100. All minimum investment
requirements are waived for certain retirement and employee savings plans and
custodial accounts for the benefit of minors.
PURCHASES THROUGH PRUDENTIAL SECURITIES
Purchases of shares of the Series through Prudential Securities are made through
automatic investment procedures (the Autosweep program). You cannot purchase
shares through Prudential Securities other than through the Autosweep program,
except as specifically provided (that is, you cannot make a manual purchase).
The Autosweep program allows you to designate a money market fund as your
primary money sweep fund. If you do not designate a primary money sweep fund,
Prudential MoneyMart Assets, Inc. will automatically be your primary money sweep
fund. You have the option to change your primary money sweep fund at any time by
notifying your Prudential Securities Financial Advisor. The following discussion
assumes that you have selected the Series as your primary money sweep fund.
For individual retirement accounts (IRAs) and benefit plans in the Autosweep
program, all credit balances (that is, immediately available
-------------------------------------------------------------------
16 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
funds) of $1.00 or more will be invested in the Series on a daily basis.
Prudential Securities will arrange for the investment of the credit balance in
the Series and will purchase shares of the Series equal to that amount. This
will occur on the business day following the availability of the credit balance.
Prudential Securities may use and retain the benefit of credit balances in your
account until Series shares are purchased.
For accounts other than IRAs and benefit plans, shares of the Series will be
purchased as follows:
-- When your account has a credit balance of $10,000 or more, Prudential
Securities will arrange for the automatic purchase of shares of the
Series. This will occur on the business day following the
availability of the credit balance
-- When your account has a credit balance that results from a securities
sale totaling $1,000 or more, the available cash will be invested in
the Series on the settlement date
-- For all other credit balances of $1.00 or more, shares will be
purchased automatically at least once a month on the last business
day of each month
Purchases through the Autosweep program are subject to a minimum initial
investment of $1,000, which is waived for certain retirement and employee
savings plans and custodial accounts for the benefit of minors. You will begin
earning dividends on your shares purchased through the Autosweep program on the
first business day after the order is placed. Prudential Securities will
purchase shares of the Series at the price determined at 4:30 p.m. New York time
on the business day following the existence of the credit balance, which is the
second business day after the availability of the credit balance. Prudential
Securities will use and retain the benefit of credit balances in your account
until Series shares are purchased.
Your investment in the Series will be held in the name of Prudential
Securities. Prudential Securities will receive all statements and dividends from
the Fund and will, in turn, send you account statements showing your purchases,
sales and dividends.
The charges and expenses of the Autosweep program are not reflected in the
Fees and Expenses tables. For information about participating in the Autosweep
program, you should contact your Prudential Securities Financial Advisor.
--------------------------------------------------------------------------------
17
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
PURCHASES THROUGH THE PRUDENTIAL ADVANTAGE ACCOUNT PROGRAM
The Prudential Advantage Account Program (the Advantage Account Program) is a
financial services program available to clients of Pruco Securities Corporation
(Pruco) and provides for an automatic investment procedure similar to the
Autosweep program. The Advantage Account Program consists of two types of
accounts: the Investor Account and the Advantage Account, which offers
additional services, such as a debit card and check writing.
The Advantage Account Program allows you to designate a money market fund as
your primary money sweep fund. If you do not designate a primary money sweep
fund, Prudential MoneyMart Assets, Inc. will automatically be your primary money
sweep fund. You have the option to change your primary money sweep fund at any
time by notifying your Pruco representative or the Advantage Service Center. The
following discussion assumes that you have selected the Series as your primary
money sweep fund.
With the Advantage Account as well as the Investor Account for benefit plans
and individual retirement accounts (IRAs), all credit balances (that is,
immediately available funds) of $1.00 or more will be invested in the Series on
a daily basis. Prudential Securities (Pruco's clearing broker) arranges for the
investment of the credit balance in the Series and will purchase shares of the
Series equal to that amount. This will occur on the business day following the
availability of the credit balance. Prudential Securities may use and retain the
benefit of credit balances in your account until Series shares are purchased.
If you have an Investor Account (non-IRAs), shares of the Series will be
purchased as follows:
-- When your account has a credit balance of $10,000 or more, Prudential
Securities will arrange for the automatic purchase of shares of the
Series with all cash balances of $1.00 or more. This will occur on
the business day following the availability of the credit balance
-- When your account has a credit balance that results from a securities
sale totaling more than $1,000, all cash balances of $1.00 or more
will be invested in the Series on the business day following the
settlement date
-------------------------------------------------------------------
18 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
-- For all other credit balances of $1.00 or more, shares will be
purchased automatically at least once a month on the last business
day of each month
You will begin earning dividends on your shares purchased through the
Advantage Account Program on the first business day after the order is placed.
Prudential Securities will purchase shares of the Series at the price determined
at 4:30 p.m. New York time on the business day following the availability of the
credit balance. Prudential Securities will use and retain the benefit of credit
balances in your account until Series shares are purchased.
Purchases of, withdrawals from and dividends from the Series will be shown
on your Advantage Account or Investor Account statement.
The charges and expenses of the Advantage Account Program are not reflected
in the Fees and Expenses tables. For information about participating in the
Advantage Account Program, you should call (800) 235-7637.
PURCHASES THROUGH THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM
Class A shares of the Series are available to shareholders who meet the minimum
investment requirements and participate in either the corporate COMMAND-SM-
Account Program (the COMMAND Program), which is available through Prudential
Securities, or the Prudential BusinessEdge-SM- Account Program (the BusinessEdge
Program), which is available either through Prudential Securities or Pruco.
These programs offer integrated financial services that link together various
product components with the ability to invest in shares of the Series. If you
participate in the COMMAND Program or the BusinessEdge Program, your purchase of
Series shares must be made through your Prudential Securities Financial Advisor
or your Pruco broker, as applicable.
MANUAL PURCHASES
You may make a manual purchase (that is, a non-money market sweep purchase) of
Series shares in either of the following situations:
-- You do not participate in a money market sweep program (E.G., the
Autosweep program or the Advantage Account Program), or
-- You participate in a money market sweep program, but the Series is
not designated as your primary money market sweep fund
--------------------------------------------------------------------------------
19
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
The minimum initial investment for a manual purchase for shares of the
Series is $1,000 and the minimum subsequent investment is $100, except that all
minimum investment requirements are waived for certain retirement and employee
savings plans and custodial accounts for the benefit of minors.
If you make a manual purchase through Prudential Securities, Prudential
Securities will place your order for shares of the Series on the business day
after the purchase order is received for settlement that day, which is the
second business day after receipt of the purchase order by Prudential
Securities. Prudential Securities may use and retain the benefit of credit
balances in a client's brokerage account until monies are delivered to the
Series (Prudential Securities delivers federal funds on the business day after
settlement).
If you make a manual purchase through the Fund's Distributor, through your
broker or dealer (other than Prudential Securities) or directly from the Fund,
shares will be purchased at the net asset value next determined after receipt of
your order and payment in proper form. When your payment is received by
4:30 p.m., New York time, shares will be purchased that day and you will begin
to earn dividends on the following business day. If you purchase shares through
a broker or dealer, your broker or dealer will forward your order and payment to
the Fund. You should contact your broker or dealer for information about
services that they may provide, including an automatic sweep feature.
Transactions in Series shares may be subject to postage and other charges
imposed by your broker or dealer. Any such charge is retained by your broker or
dealer and is not sent to the Fund.
STEP 2: UNDERSTANDING THE PRICE YOU'LL PAY
When you invest in a mutual fund, you buy shares of the Series. Shares of a
money market mutual fund, like the Series, are priced differently than shares of
common stock and other securities.
The price you pay for each share of the Series is based on the share value.
The share value of a mutual fund--known as the NET ASSET VALUE or NAV--is
determined by a simple calculation: it's the total value of the Series (assets
minus liabilities) divided by the total number of shares outstanding. In
determining NAV, the Series values its securities using the amortized cost
method. The Series seeks to maintain an NAV of $1 per
-------------------------------------------------------------------
20 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
share at all times. Your broker may charge you a separate or additional fee for
purchases of shares.
We determine the NAV of our shares once each business day at 4:30 p.m. New
York time on days that the New York Stock Exchange (NYSE) is open for trading.
The NYSE is closed on national holidays and Good Friday. We do not determine NAV
on days when we have not received any orders to purchase, sell, or exchange or
when changes in the value of the Series' portfolio do not affect the NAV.
STEP 3: ADDITIONAL SHAREHOLDER SERVICES
As a Series shareholder, you can take advantage of the following services and
privileges:
AUTOMATIC REINVESTMENT. As we explained in the "Series Distributions and Tax
Issues" section, the Series pays out--or distributes--its net investment income
and capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Series at NAV. If you want your
distributions paid in cash, you can indicate this preference on your
application, notify your broker or notify the Transfer Agent in writing (at the
address below) at least five business days before the date we determine who
receives dividends.
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTENTION: ACCOUNT MAINTENANCE
P.O. BOX 15015
NEW BRUNSWICK, NJ 08906-5015
REPORTS TO SHAREHOLDERS. Every year we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Series. To reduce Series expenses, we will send
one annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.
HOW TO SELL YOUR SHARES
You can sell your shares of the Series at any time, subject to certain
restrictions.
--------------------------------------------------------------------------------
21
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
When you sell shares of the Series--also known as REDEEMING shares--the
price you will receive will be the NAV next determined after the Transfer Agent,
the Distributor or your broker receives your order to sell. If your broker holds
your shares, he must receive your order to sell by 4:30 p.m. New York time to
process the sale on that day. Otherwise contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTENTION: REDEMPTION SERVICES
P.O. BOX 15010
NEW BRUNSWICK, NJ 08906-5010
Generally, we will pay you for the shares that you sell within seven days
after the Transfer Agent, the Distributor or your broker receives your sell
order. If you hold shares through a broker, payment will be credited to your
account. If you are selling shares you recently purchased with a check, we may
delay payment of your proceeds until your check clears, which can take up to 10
days from the purchase date. You can avoid delay if you purchase shares by wire,
certified check or cashier's check. Your broker may charge you a separate or
additional fee for sales of shares.
RESTRICTIONS ON SALES. There are certain times when you may not be able to sell
shares of the Series or when we may delay paying you the proceeds from a sale.
This may happen during unusual market conditions or emergencies when the Series
can't determine the value of its assets or sell its holdings. For more
information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares--Sale
of Shares."
If you are selling more than $100,000 of shares, if you want the check sent
to someone or some place that is not in our records, or you are a business or a
trust, and if you hold your shares directly with the Transfer Agent, you may
have to have the signature on your sell order signature guaranteed by an
"eligible guarantor institution." An "eligible guarantor institution" includes
any bank, broker, dealer or credit union. For more information, see the SAI,
"Purchase, Redemption and Pricing of Fund Shares--Sale of Shares--Signature
Guarantee."
REDEMPTION IN KIND. If the sales of Series shares you make during any 90-day
period reach the lesser of $250,000 or 1% of the value of the Series' net
assets, we can then give you securities from the Series' portfolio instead of
cash. If you want to sell the securities for cash, you would have
-------------------------------------------------------------------
22 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
to pay the costs charged by a broker.
AUTOMATIC REDEMPTION FOR AUTOSWEEP. If you participate in the Autosweep program,
your Series shares may be automatically redeemed to cover any deficit in your
Prudential Securities account. The amount redeemed will be the nearest dollar
amount necessary to cover the deficit.
The amount of the redemption will be the lesser of the total value of Series
shares held in your Prudential Securities account or the deficit in your
Prudential Securities account. If you use this automatic redemption procedure
and want to pay for a securities transaction in your account other than through
this procedure, you must deposit cash in your securities account before the
settlement date. If you use this automatic redemption procedure and want to pay
any other deficit in your securities account other than through this procedure,
you must deposit cash in your securities account before you incur the deficit.
Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests. Your account will be automatically scanned for
deficits each day and, if there is insufficient cash in your account, we will
redeem an appropriate number of shares of the Series at the next determined NAV
to satisfy any remaining deficit. You are entitled to any dividends declared on
the redeemed shares through the day before the redemption is made. Dividends
declared on the redemption date will be retained by Prudential Securities, which
has advanced monies to satisfy deficits in your account.
AUTOMATIC REDEMPTION FOR THE ADVANTAGE ACCOUNT. If you participate in the
Advantage Account Program, your Series shares may be automatically redeemed to
cover any deficit in your securities account. The amount redeemed will be the
nearest dollar amount necessary to cover the deficit.
The amount of the redemption will be the lesser of the total value of Series
shares held in your securities account or the deficit in your securities
account. A deficit in your Advantage Account may result from activity arising
under the program, such as debit balances incurred by the use of the
Visa-Registered Trademark- Account, including Visa purchases, cash advances and
Visa Account checks. Your account will be automatically scanned for deficits
each day and, if there is insufficient cash in your account, we will redeem an
appropriate number of shares of the Series to satisfy any remaining deficit. You
are entitled to any dividends declared on the redeemed shares
--------------------------------------------------------------------------------
23
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
through the day before the redemption is made. Dividends declared on the
redemption date will be retained by Prudential Securities, which has advanced
monies to satisfy deficits in your account.
Redemptions are automatically made by Prudential Securities, to the nearest
dollar, on each day to satisfy deficits from securities transactions or to honor
your redemption requests.
AUTOMATIC REDEMPTION FOR THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM. If you
participate in the COMMAND Program or the BusinessEdge Program, your Series
shares will be automatically redeemed to cover any deficit in your account. The
amount of the redemption will be the nearest dollar amount necessary to cover
the deficit.
The amount of the redemption will be the lesser of the total value of Series
shares held in your account or the deficit in your account. A deficit in your
COMMAND Program account or BusinessEdge Program account may result from activity
arising under the Program, such as debit balances incurred by the use of the
Visa-Registered Trademark- Gold Debit Card Account (for the COMMAND Program) or
the BusinessEdge Visa-Registered Trademark- Debit Card Account (for the
BusinessEdge Program), as well as ATM transactions, cash advances and Program
account checks. Your account will be automatically scanned for deficits each day
and, if there is insufficient cash in your account, we will redeem an
appropriate number of shares of the Series to satisfy any remaining deficit. You
are entitled to any dividends declared on the redeemed shares through the day
before the redemption is made. Dividends declared on the redemption date will be
retained by Prudential Securities or Pruco, as applicable, which has advanced
monies to satisfy deficits in your account.
Redemptions are automatically made, to the nearest dollar, on each day to
satisfy account deficits or to honor your redemption requests.
MANUAL REDEMPTION FOR THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM. If you
participate in the COMMAND Program or the BusinessEdge Program, you may redeem
your Series shares by submitting a written request to your Prudential Securities
Financial Advisor or Pruco broker, as applicable. You should not send a manual
redemption request to the Fund. If you do, we will forward the request to
Prudential Securities or Pruco, as appropriate, which could delay your requested
redemption.
The proceeds from a manual redemption will immediately become a free cash
balance in your Program account and will be automatically
-------------------------------------------------------------------
24 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
invested in the money market mutual fund that you selected as the "Primary Fund"
for cash sweeps in your account. Both the COMMAND Program and the BusinessEdge
Program require that your written redemption request be signed by all persons in
whose name Series shares are registered, exactly as they appear on your Program
account client statement. In certain situations, additional documents such as
trust instruments, death certificates, appointments as executor or
administrator, or certificates of corporate authority may be required.
Under the COMMAND Program, Prudential Securities has the right to terminate
your Program account at any time for any reason. Likewise, under the
BusinessEdge Program, Prudential Securities or Pruco, as applicable, has the
right to terminate your Program account at any time for any reason. If a Program
account is terminated, all shares of the Series held in the account will be
redeemed.
HOW TO EXCHANGE YOUR SHARES
You can exchange your shares of the Series for shares in certain other
Prudential mutual funds--including certain money market funds--if you satisfy
the minimum investment requirements of such other Prudential mutual fund. You
can exchange shares of the Series for Class A shares of another Prudential
mutual fund, but you can't exchange Series shares for Class B, Class C or Class
Z shares, except that shares purchased prior to January 22, 1990 that are
subject to a contingent deferred sales charge can be exchanged for Class B
shares.
If you hold shares through a broker, you must exchange shares through your
broker. Otherwise, contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: EXCHANGE PROCESSING
P.O. BOX 15010
NEW BRUNSWICK, NJ 08906-5010
When you exchange shares of the Series for Class A shares of any other
Prudential mutual fund, you will be subject to any sales charge that may be
imposed by such other Prudential mutual fund. The sales charge is imposed at the
time of your exchange.
FREQUENT TRADING
Frequent trading of Series shares in response to short-term fluctuations in the
market--also known as "market timing"--may make it very difficult to
--------------------------------------------------------------------------------
25
<PAGE>
HOW TO BUY, SELL AND
EXCHANGE SHARES OF THE SERIES
------------------------------------------------
manage the Series' investments. When market timing occurs, the Series may have
to sell portfolio securities to have the cash necessary to redeem the market
timer's shares. This can happen at a time when it is not advantageous to sell
any securities, so the Series' performance may be hurt. When large dollar
amounts are involved, market timing can also make it difficult to use long-term
investment strategies because we cannot predict how much cash the Series will
have to invest. When in our opinion such activity would have a disruptive effect
on portfolio management, the Fund reserves the right to refuse purchase orders
and exchanges into the Series by any person, group or commonly controlled
accounts. The decision may be based upon dollar amount, volume and frequency of
trading. The Fund may notify a market timer of rejection of an exchange purchase
order after the day the order is placed. If the Fund allows a market timer to
trade Series shares, it may require the market timer to enter into a written
agreement to follow certain procedures and limitations.
TELEPHONE REDEMPTIONS OR EXCHANGES
You may redeem or exchange your shares in any amount by calling the Fund at
(800) 225-1852. In order to redeem or exchange your shares by telephone, you
must complete an authorization form for telephone transactions. If you have
elected telephone redemption and exchange privileges and you call the Fund
before 4:15 p.m., New York time, you will receive a redemption amount based on
that day's NAV.
The Fund's Transfer Agent will record your telephone instructions and
request specific account information before redeeming or exchanging shares. The
Fund will not be liable if it follows instructions that it reasonably believes
are made by the shareholder. If the Fund does not follow reasonable procedures,
it may be liable for losses due to unauthorized or fraudulent telephone
instructions.
In the event of drastic economic or market changes, you may have difficulty
in redeeming or exchanging your shares by telephone. If this occurs, you should
consider redeeming or exchanging your shares by mail.
The telephone redemption or exchange privilege may be modified or terminated
at any time. If this occurs, you will receive a written notice from the Fund.
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26 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
FINANCIAL HIGHLIGHTS
-------------------------------------
The financial highlights will help you evaluate the Series' financial
performance. The TOTAL RETURN in the chart represents the rate that a
shareholder earned on an investment in the Series, assuming reinvestment of all
dividends and other distributions. The information is for shares of the Series
for the periods indicated.
Review this chart with the financial statements which appear in the SAI.
Additional performance information is contained in the annual report, which you
can receive at no charge.
The financial highlights for the three fiscal years ended August 31, 1999
were audited by PricewaterhouseCoopers LLP, independent accountants, and the
financial highlights for the two years ended August 31, 1996 were audited by
other independent auditors, whose reports were unqualified.
SERIES SHARES (FISCAL YEAR ENDED 8-31)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income and net
realized gains .02 .03 .03(2) .03(2) .03(2)
Dividends and distributions to
shareholders (.02) (.03) (.03) (.03) (.03)
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN(1) 2.35% 2.77% 3.08% 3.12% 3.10%
---------------------------------------
<CAPTION>
------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------
----------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS, END OF YEAR (000) $55,504 $62,460 $53,441 $50,511 $56,822
AVERAGE NET ASSETS (000) $58,654 $55,540 $53,078 $54,689 $42,919
RATIOS TO AVERAGE NET ASSETS:
Expenses, including distribution fee .88% .84% .54%(2) .55%(2) .63%(2)
Expenses, excluding distribution fee .76% .71% .42%(2) .43%(2) .50%(2)
Net investment income 2.33% 2.73% 3.04%(2) 3.08%(2) 3.14%(2)
---------------------------------------
</TABLE>
<TABLE>
<S> <C>
1 TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND ANY OTHER
DISTRIBUTIONS. IT IS CALCULATED ASSUMING SHARES ARE
PURCHASED ON THE FIRST DAY AND SOLD ON THE LAST DAY OF EACH
PERIOD REPORTED.
2 NET OF EXPENSE SUBSIDY AND/OR MANAGEMENT FEE WAIVER.
</TABLE>
--------------------------------------------------------------------------------
27
<PAGE>
THE 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
dealer or call us at (800) 225-1852. Read the prospectus carefully before you
invest or send money.
STOCK FUNDS
PRUDENTIAL DISTRESSED SECURITIES FUND, INC.
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 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.
GLOBAL SERIES
INTERNATIONAL STOCK SERIES
GLOBAL UTILITY FUND, INC.
TARGET FUNDS
INTERNATIONAL EQUITY FUND
-------------------------------------------------------------------
28 MASSACHUSETTS MONEY MARKET SERIES [ICON] (800) 225-1852
<PAGE>
THE PRUDENTIAL MUTUAL FUND FAMILY
-------------------------------------
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
--------------------------------------------------------------------------------
29
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FOR MORE INFORMATION
--------------------------------------------------------------------------------
Please read this prospectus before you invest in the Series and keep it for
future reference. For information or shareholder questions contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
P.O. BOX 15005
NEW BRUNSWICK, NJ 08906-5005
(800) 225-1852
(732) 417-7555
(if calling from outside the U.S.)
--------------------------------
Outside Brokers Should Contact:
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC
P.O. BOX 15035
NEW BRUNSWICK, NJ 08906-5035
(800) 778-8769
------------------------------------
Visit Prudential's Web Site At:
http://www.prudential.com
--------------------------------
Additional information about the Series can be obtained without charge and can
be found in the following documents:
STATEMENT OF ADDITIONAL
INFORMATION (SAI)
(incorporated by reference into this
prospectus)
ANNUAL REPORT
SEMI-ANNUAL REPORT
You can also obtain copies of Fund documents from the Securities and Exchange
Commission as follows:
By Mail:
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-6009
By Electronic Request:
[email protected]
(The SEC charges a fee to copy documents.)
In Person:
Public Reference Room in
Washington, DC
(For hours of operation, call 1(800) SEC-0330)
Via the Internet:
on the EDGAR Database at
http://www.sec.gov
--------------------------------
CUSIP Number: 74435M-63-0
Quotron Symbol: PRMXX
Investment Company Act File No:
811-4023
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MF153A [LOGO] Printed on Recycled Paper
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