THE PRUDENTIAL SERIES FUND, INC.
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PROSPECTUS
September 15, 2000
SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE FUND'S SHARES NOR HAS THE SEC DETERMINED THAT THIS
PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.
[Logo Prudential Investments]
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TABLE OF CONTENTS
1 RISK/RETURN SUMMARY
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
3 HOW THE PORTFOLIO INVESTS
3 Investment Objective and Policies
5 OTHER INVESTMENTS AND STRATEGIES
5 ADRs
5 Convertible Debt and Convertible Preferred Stock
5 Derivatives
5 Forward Foreign Currency Exchange Contracts
6 Futures
6 Joint Repurchase Account
6 Mortgage-related Securities
6 Options
6 Repurchase Agreements
7 Short Sales
7 Short Sales Against-the-Box
7 When-issued and Delayed Delivery Securities
7 HOW THE FUND IS MANAGED
7 Board of Directors
7 Investment Adviser
8 Investment Sub-Adviser
8 Portfolio Managers
8 HOW TO BUY AND SELL SHARES OF THE FUND
8 Net Asset Value
9 Distributor
10 OTHER INFORMATION
10 Federal Income Taxes
10 European Monetary Union
10 Monitoring for Possible Conflicts
For more information see back cover
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RISK/RETURN SUMMARY
This prospectus provides information about the SP Jennison International Growth
Portfolio (the Portfolios), which is a separate portfolio of The Prudential
Series Fund, Inc. (the Fund).
The Fund offers two classes of shares: Class I and Class II. This prospectus
relates only to Class II shares of the Portfolio. Class II shares are sold only
to separate accounts of insurance companies other than The Prudential Insurance
Company of America (Prudential) as an investment option under variable life
insurance and variable annuity contracts (the Contracts). (A separate account is
simply an accounting device used to keep the assets invested in certain
insurance contracts separate from the general assets and liabilities of the
insurance company.)
The following section highlights key information about the Portfolio. Additional
information follows this summary and is also provided in the Fund's Statement of
Additional Information (SAI), which provides information with respect to all of
the investment portfolios of the Fund, including the SP Jennison International
Growth Portfolio.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
The following summarizes the investment objective, principal strategies and
principal risks for the Portfolios. We describe the terms "company risk,"
"credit risk," "derivatives risk," "foreign investment risk," "interest rate
risk" and "market risk" in the section on Portfolio Risks below.
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SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
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The Portfolio's investment objective is LONG-TERM GROWTH OF CAPITAL. The
Portfolio seeks to achieve this objective by investing in equity-related
securities of foreign issuers. This means the Portfolio looks for investments
that Jennison thinks will increase in value over a period of years. To achieve
its objective, the Portfolio invests primarily in the common stock of large and
medium-sized foreign companies. Under normal circumstances, the Portfolio
invests at least 65% of its total assets in common stock foreign companies
operating or based in at least five different countries. The Portfolio looks
primarily for stocks of companies whose earnings are growing at a faster rate
than other companies. These companies typically have characteristics such as
above average growth in earnings and cash flow, improving profitability, strong
balance sheets, management strength and strong market share for its products.
The Portfolio also tries to buy such stocks at attractive prices in relation to
their growth prospects. Loss of money is a risk of investing in this Portfolio.
PRINCIPAL RISKS:
o COMPANY RISK
o CREDIT RISK
o DERIVATIVES RISK
o FOREIGN INVESTMENT RISK
o INTEREST RATE RISK
o MARKET RISK
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Like any mutual
fund, an investment in the Portfolio could lose value, and you could lose money.
The following summarizes the significant risks of investing in the Portfolio.
COMPANY RISK. The price of the stock of a particular company can vary based on a
variety of factors, such as the company's financial performance, changes in
management and product trends, and the potential for takeover and acquisition.
CREDIT RISK. Debt obligations are generally subject to the risk that the issuer
may be unable to make principal and interest payments when they are due. There
is also the risk that the securities could lose value because of a loss of
confidence in the ability of the borrower to pay back debt. Non-investment grade
debt--also known as "high-yield bonds" and "junk bonds"--have a higher risk of
default and tend to be less liquid than higher-rated securities.
DERIVATIVES RISK. Derivatives are financial contracts whose value depends on, or
is derived from, the value of an underlying asset, interest rate or index. The
Portfolios typically use derivatives as a substitute for taking a
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position in the underlying asset and/or as part of a strategy designed to reduce
exposure to other risks, such as interest rate or currency risk. A Portfolio may
also use derivatives for leverage, in which case their use would involve
leveraging risk. A Portfolio's use of derivative instruments involves risks
different from or possibly greater than, the risks associated with investing
directly in securities and other traditional investments. Derivatives are
subject to a number of risks described elsewhere, such as interest rate risk,
market risk, and credit risk. They also involve the risk of mispricing or
improper valuation and the risk that changes in the value of the derivative may
not correlate perfectly with the underlying asset, rate or index. A Portfolio
investing in a derivative instrument could lose more than the principal amount
invested. Also, suitable derivative transactions may not be available in all
circumstances.
FOREIGN INVESTMENT RISK. Investing in foreign securities generally involves
more risk than investing in securities of U.S. issuers. Foreign investment risk
is comprised of the specific risks described below.
FOREIGN MARKET RISK. Foreign markets, especially those in developing
countries, tend to be more volatile than U.S. markets and are generally not
subject to regulatory requirements comparable to those in the U.S. Because of
differences in accounting standards and custody and settlement practices,
investing in foreign securities generally involves more risk than investing in
securities of U.S. issuers.
CURRENCY RISK. Changes in currency exchange rates may affect the value of
foreign securities held by the Portfolio and the amount of income available for
distribution. If a foreign currency grows weaker relative to the U.S. dollar,
the value of securities denominated in that foreign currency generally decreases
in terms of U.S. dollars. If the Portfolio does not correctly anticipate changes
in exchange rates, its share price could decline as a result. In addition,
certain hedging activities may cause the Portfolio to lose money and could
reduce the amount of income available for distribution.
POLITICAL DEVELOPMENTS. Political developments may adversely affect the
value of the Portfolio's foreign securities.
INTEREST RATE RISK. Fixed income securities are subject to the risk that
the securities could lose value because of interest rate changes. For example,
bonds tend to decrease in value if interest rates rise. Debt obligations with
longer maturities typically offer higher yields, but are subject to greater
price shifts as a result of interest rate changes than debt obligations with
shorter maturities.
MARKET RISK. Common stocks are subject to market risk stemming from factors
independent of any particular security. Investment markets fluctuate. All
markets go through cycles and market risk involves being on the wrong side of a
cycle. Factors affecting market risk include political events, broad economic
and social changes, and the mood of the investing public. You can see market
risk in action during large drops in the stock market. If investor sentiment
turns gloomy, the price of all stocks may decline. It may not matter that a
particular company has great profits and its stock is selling at a relatively
low price. If the overall market is dropping, the values of all stocks are
likely to drop. Generally, the stock prices of large companies are more stable
than the stock prices of smaller companies, but this is not always the case.
Smaller companies often offer a smaller range of products and services than
large companies. They may also have limited financial resources and may lack
management depth. As a result, stocks issued by smaller companies may fluctuate
in value more than the stocks of larger, more established companies.
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For more information about the risks associated with the Portfolio, see
"How the Portfolio Invests--Investment Risks."
* * *
EVALUATING PERFORMANCE
The SP Jennison International Growth Portfolio is newly-created, and
therefore does not have any performance history.
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HOW THE PORTFOLIO INVESTS
INVESTMENT OBJECTIVE AND POLICIES
We describe the Portfolio's investment objective and policies below. We describe
certain investment instruments that appear in bold lettering below in the
section entitled "Other Investments and Strategies." Although we make every
effort to achieve the Portfolio's objective, we can't guarantee success. The
Portfolio's investment objective is a fundamental policy that cannot be changed
without shareholder approval. The Board of Directors can change investment
policies that are not fundamental.
An investment in the Portfolio is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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SP JENNISON INTERNATIONAL GROWTH PORTFOLIO
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The investment objective of the Portfolio is to SEEK LONG-TERM GROWTH OF
CAPITAL. The Portfolio seeks to achieve its objective through investment in
equity-related securities of foreign companies.
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A FOREIGN STOCK GROWTH PORTFOLIO
The Portfolio seeks long-term growth by investing in the common
stock of foreign companies. The Portfolio generally invests in
about 60 securities of issuers located in at least five different
foreign countries.
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This means the Portfolio seeks investments--primarily the common stock of
foreign companies--that will increase in value over a period of years. A company
is considered to be a foreign company if it satisfies at least one of the
following criteria: its securities are traded principally on stock exchanges in
one or more foreign countries; it derives 50% or more of its total revenue from
goods produced, sales made or services performed in one or more foreign
countries; it maintains 50% or more of its assets in one or more foreign
countries; it is organized under the laws of a foreign country; or its principal
executive office is located in a foreign country.
The Portfolio invests in about 60 securities of primarily non U.S. growth
companies whose shares appear attractively valued on a relative and absolute
basis. The Portfolio looks for companies that have above-average actual and
potential earnings growth over the long term and strong financial and
operational characteristics. The Portfolio selects stocks on the basis of
individual company research. Thus, country, currency and industry weightings are
primarily the result of individual stock selections. Although the Portfolio may
invest in companies of all sizes, the Portfolio typically focuses on large and
medium sized companies. Under normal conditions, the Portfolio intends to invest
at least 65% of its total assets in the equity-related securities of foreign
companies in at least five foreign countries. The Portfolio may invest anywhere
in the world, including North America, Western Europe, the United Kingdom and
the Pacific Basin, but generally not the U.S.
The principal type of equity-related security in which the Portfolio invests is
common stock. In addition to common stock, the Portfolio may invest in other
equity-related securities that include, but are not limited to, preferred stock,
rights that can be exercised to obtain stock, warrants and debt securities or
preferred stock convertible or exchangeable for common or preferred stock and
master limited partnerships. The Portfolio may also invest in AMERICAN
DEPOSITORY RECEIPTS (ADRS).
HOW THE PORTFOLIO INVESTS
In deciding which stocks to purchase for the Portfolio, Jennison looks for
growth companies that have both strong fundamentals and appear to be
attractively valued relative to their growth potential. Jennison uses a
bottom-up approach in selecting securities for the Portfolio, which means that
they select stocks based on individual company research, rather than allocating
by country or sector. In researching which stocks to buy, they look at a
company's basic financial and operational characteristics as well as compare the
company's stock price to the price of stocks of other companies that are its
competitors, absolute historic valuation levels for that company's stock, its
earnings
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growth and the price of existing portfolio holdings. Another important part of
Jennison's research process is to have regular contact with management of the
companies that they purchase in order to confirm earnings expectations and to
assess management's ability to meet its stated goals. Although the Portfolio may
invest in companies of all sizes, it typically focuses on large and medium sized
companies.
Generally, Jennison looks for companies that have one or more of the following
characteristics: actual and potential growth in earnings and cash flow; actual
and improving profitability; strong balance sheets; management strength; and
strong market share for the company's products.
In addition, Jennison looks for companies whose securities appear to be
attractively valued relative to: each company's peer group; absolute historic
valuations; and existing holdings of the Portfolio. Generally, they consider
selling a security when there is an identifiable change in a company's
fundamentals or when expectations of future earnings growth become fully
reflected in the price of that security.
OTHER INVESTMENTS AND STRATEGIES
MONEY MARKET INSTRUMENTS, BONDS AND OTHER FIXED-INCOME OBLIGATIONS
Money market instruments and bonds are known as fixed-income securities because
issuers of these securities are obligated to pay interest and principal.
Typically, FIXED-INCOME securities don't increase or decrease in value in
relation to an issuer's financial condition or business prospects to the extent
that stocks may, although their value does fluctuate inversely to changes in
interest rates generally and directly in relation to their perceived credit
quality. The Portfolio may buy obligations of companies, foreign countries or
the U.S. Government. Money market instruments include the commercial paper and
short-term obligations of foreign and domestic corporations, banks and
governments and their agencies.
Generally, the Portfolio will purchase only "Investment-Grade" commercial paper
and bonds. This means the commercial paper and bonds have received one of the
four highest quality ratings determined by Moody's Investors Service, Inc.
(Moody's), or Standard & Poor's Ratings Group (S&P), or one of the other
nationally recognized statistical rating organizations (NRSROs). Obligations
rated in the fourth category (Baa for Moody's or BBB for S&P) have speculative
characteristics and are subject to a greater risk of loss of principal and
interest. On occasion, the Portfolio may buy instruments that are not rated, but
that are of comparable quality to the investment-grade bonds described above.
TEMPORARY DEFENSIVE INVESTMENTS
In response to adverse market, economic or political conditions, the Portfolio
may temporarily invest up to 100% of its assets in money market instruments or
in the stock and other equity-related securities of U.S. companies. Investing
heavily in money market instruments limits the ability to achieve capital
appreciation, but may help to preserve the Portfolio's assets when global or
international markets are unstable. When the Portfolio is temporarily invested
in equity-related securities of U.S. companies, the Portfolio may achieve
capital appreciation, although not through investment in foreign companies.
REPURCHASE AGREEMENTS
The Portfolio may also use REPURCHASE AGREEMENTS.
DERIVATIVE STRATEGIES
The Portfolio may use a number of alternative derivative strategies--including
derivatives--to try to improve its returns or protect its assets, although the
Portfolio cannot guarantee these strategies will work, that the instruments
necessary to implement these strategies will be available, or that the Portfolio
will not lose money.
OPTIONS
The Portfolio may purchase and sell put and call OPTIONS on equity securities,
stock indices and foreign currencies that are traded on U.S. or foreign
securities exchanges, on NASDAQ or in the over-the-counter market.
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FUTURES CONTRACTS AND RELATED OPTIONS, FOREIGN CURRENCY FORWARD CONTRACTS. The
Portfolio may purchase and sell stock and bond index futures contracts and
related options on stock and bond index futures. The Portfolio also may purchase
and sell futures contracts on foreign currencies and related options on foreign
currency futures contracts.
OTHER STRATEGIES
The Portfolio follows certain policies when it borrows money (the Portfolio can
borrow up to 331 @3% of the value of its total assets); lends its securities to
others (as an operating policy, which may be changed without stockholder
approval, the Portfolio will not lend more than 30% of the value of its total
assets, which for this purpose includes the value of any collateral received in
the transaction); and holds illiquid securities (the Portfolio may hold up to
15% of its net assets in illiquid securities, including restricted securities
with legal or contractual restrictions, those without a readily available market
and repurchase agreements with maturities longer than seven days).
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The Statement of Additional Information--which we refer to as the SAI--contains
additional information about the SP Jennison International Growth Portfolio. To
obtain a copy, see the back cover page of this prospectus.
* * *
OTHER INVESTMENTS AND STRATEGIES
As indicated in the description of the Portfolios above, we may use the
following investment strategies to increase the Portfolio's return or protect
its assets if market conditions warrant.
ADRS--ADRs are certificates representing the right to receive foreign securities
that have been deposited with a U.S. bank or a foreign branch of a U.S. bank.
CONVERTIBLE DEBT AND CONVERTIBLE PREFERRED STOCK--A convertible security is a
security--for example, a bond or preferred stock--that may be converted into
common stock of the same or different issuer. The convertible security sets the
price, quantity of shares and time period in which it may be so converted.
Convertible stock is senior to a company's common stock but is usually
subordinated to debt obligations of the company. Convertible securities provide
a steady stream of income which is generally at a higher rate than the income on
the company's common stock but lower than the rate on the company's debt
obligations. At the same time, they offer--through their conversion
mechanism--the chance to participate in the capital appreciation of the
underlying common stock. The price of a convertible security tends to increase
and decrease with the market value of the underlying common stock.
DERIVATIVES--A derivative is an investment instrument that derives its price,
performance, value, or cash flow from one or more underlying securities or other
interests. Derivatives involve costs and can be volatile. With derivatives, the
investment adviser tries to predict whether the underlying investment--a
security, market index, currency, interest rate or some other benchmark--will go
up or down at some future date. We may use derivatives to try to reduce risk or
to increase return consistent with the Portfolio's overall investment objective.
The investment adviser will consider other factors (such as cost) in deciding
whether to employ any particular strategy, or use any particular instrument. Any
derivatives we use may not fully offset the Portfolio's underlying positions and
this could result in losses to the Portfolio that would not otherwise have
occurred.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS--A foreign currency forward contract
is an obligation to buy or sell a given currency on a future date at a set
price. When the Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when the Portfolio anticipates
the receipt in a foreign currency of dividends or interest payments on a
security which it holds, the Portfolio may desire to "lock-in" the U.S. dollar
price of the security or the U.S. dollar equivalent of such dividend or interest
payment, as the case may be. By entering into a forward contract for a fixed
amount of dollars, for the purchase or sale of the amount of foreign currency
involved in the underlying transactions, the Portfolio will be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the foreign currency during the period
between the date on which the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received. At the maturity of a forward contract, the
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Portfolio may either sell the security and make delivery of the foreign currency
or it may retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an "offsetting" contract with the
same currency trader obligating it to purchase, on the same maturity date, the
same amount of the foreign currency.
FUTURES--A futures contract is an agreement to buy or sell a set quantity of an
underlying product at a future date, or to make or receive a cash payment based
on the value of a securities index. When a futures contract is entered into,
each party deposits with a futures commission merchant (or in a segregated
account) approximately 5% of the contract amount. This is known as the "initial
margin." Every day during the futures contract, either the buyer or the futures
commission merchant will make payments of "variation margin." In other words, if
the value of the underlying security, index or interest rate increases, then the
buyer will have to add to the margin account so that the account balance equals
approximately 5% of the value of the contract on that day. The next day, the
value of the underlying security, index or interest rate may decrease, in which
case the buyer would receive money from the account equal to the amount by which
the account balance exceeds 5% of the value of the contract on that day. A stock
index futures contract is an agreement between the buyer and the seller of the
contract to transfer an amount of cash equal to the daily variation margin of
the contract. No physical delivery of the underlying stocks in the index is
made.
JOINT REPURCHASE ACCOUNT--In a joint repurchase transaction, uninvested cash
balances of various Portfolios of the Fund are added together and invested in
one or more repurchase agreements. Each of the participating Portfolios receives
a portion of the income earned in the joint account based on the percentage of
its investment.
MORTGAGE-RELATED SECURITIES are usually pass-through instruments that pay
investors a share of all interest and principal payments from an underlying pool
of fixed or adjustable rate mortgages. We may invest in mortgage-related
securities issued and guaranteed by the U.S. government or its agencies like the
Federal National Mortgage Association (Fannie Maes) and the Government National
Mortgage Association (Ginnie Maes) and debt securities issued (but not
guaranteed) by the Federal Home Loan Mortgage Company (Freddie Macs). Private
mortgage-related securities that are not guaranteed by U.S. governmental
entities generally have one or more types of credit enhancement to ensure timely
receipt of payments and to protect against default.
Mortgage-related securities include collateralized mortgage obligations,
multi-class pass through securities and stripped mortgage-backed securities. A
collateralized mortgage-backed obligation (CMO) is a security backed by an
underlying portfolio of mortgages or mortgage-backed securities that may be
issued or guaranteed by entities such as banks, U.S. governmental entities or
broker-dealers. A multi-class pass-through security is an equity interest in a
trust composed of underlying mortgage assets. Payments of principal and interest
on the mortgage assets and any reinvestment income provide the money to pay debt
service on the CMO or to make scheduled distributions on the multi-class
pass-through security. A stripped mortgage-backed security (MBS strip) may be
issued by U.S. governmental entities or by private institutions. MBS strips take
the pieces of a debt security (principal and interest) and break them apart. The
resulting securities may be sold separately and may perform differently. MBS
strips are highly sensitive to changes in prepayment and interest rates.
OPTIONS--A call option on stock is a short-term contract that gives the option
purchaser or "holder" the right to acquire a particular equity security for a
specified price at any time during a specified period. For this right, the
option purchaser pays the option seller a certain amount of money or "premium"
which is set before the option contract is entered into. The seller or "writer"
of the option is obligated to deliver the particular security if the option
purchaser exercises the option. A put option on stock is a similar contract. In
a put option, the option purchaser has the right to sell a particular security
to the option seller for a specified price at any time during a specified
period. In exchange for this right, the option purchaser pays the option seller
a premium. Options on debt securities are similar to stock options except that
the option holder has the right to acquire or sell a debt security rather than
an equity security. Options on stock indexes are similar to options on stocks,
except that instead of giving the option holder the right to receive or sell a
stock, it gives the holder the right to receive an amount of cash if the closing
level of the stock index is greater than (in the case of a call) or less than
(in the case of a put) the exercise price of the option. The amount of cash the
holder will receive is determined by multiplying the difference between the
index's closing price and the option's exercise price, expressed in dollars, by
a specified "multiplier". Unlike stock options, stock index options are always
settled in cash, and gain or loss depends on price movements in the stock market
generally (or a particular market segment, depending on the index) rather than
the price movement of an individual stock.
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REPURCHASE AGREEMENTS--In a repurchase transaction, the Portfolio agrees to
purchase certain securities and the seller agrees to repurchase the same
securities at an agreed upon price on a specified date. This creates a fixed
return for the Portfolio.
SHORT SALES--In a short sale, we sell a security we do not own to take advantage
of an anticipated decline in the stock's price. The Portfolio borrows the stock
for delivery and if it can buy the stock later at a lower price, a profit
results.
SHORT SALES AGAINST-THE-BOX--A short sale against-the-box means the Portfolio
owns securities identical to those sold short.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--With when-issued or delayed
delivery securities, the delivery and payment can take place a month or more
after the date of the transaction. The Portfolio will make commitments for
when-issued transactions only with the intention of actually acquiring the
securities. The Portfolio's custodian will maintain in a segregated account,
liquid assets having a value equal to or greater than such commitments. If the
Portfolio chooses to dispose of the right to acquire a when-issued security
prior to its acquisition, it could, as with the disposition of any other
security, incur a gain or loss.
* * *
The Portfolio also follows certain policies when it borrows money; lends its
securities; and holds illiquid securities (the Portfolio may hold up to 15% of
its net assets in illiquid securities, including securities with legal or
contractual restrictions on resale, those without a readily available market and
repurchase agreements with maturities longer than seven days). If the Portfolio
were to exceed this limit, the investment adviser would take prompt action to
reduce a Portfolio's holdings in illiquid securities to no more than 15% of its
net assets, as required by applicable law.
We will consider other factors (such as cost) in deciding whether to employ any
particular strategy or use any particular instrument. For more information about
these strategies, see the SAI, "Investment Objectives and Policies of the
Portfolios."
HOW THE FUND IS MANAGED
BOARD OF DIRECTORS
The Board of Directors oversees the actions of the Investment Adviser, the
sub-advisers and the 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.
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INVESTMENT ADVISER
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Prudential serves as the investment manager for the Prudential Jennison.
Prudential has retained Jennison Associates to provide the day-to-day investment
management for this Portfolio. Prudential, not the Portfolio, pays the fees of
Jennison.
Prudential Investments Fund Management LLC, located at 100 Mulberry Street, New
Jersey, NJ is the investment adviser to the SP Jennison International Growth
Portfolio. PIFM is responsible for selecting and monitoring one or more
sub-advisers to handle the day-to-day investment management of the Portfolio.
PIFM, not the Portfolio, pays the fees of the sub-advisers. PIFM employs
Jennison Associates LLC as subadviser to this Portfolio. Pursuant to an order
issued by the SEC, the SP Jennison International Growth Portfolio may add or
change sub-advisers, or change the agreement with its sub-advisers, if PIFM and
the Board of Directors concludes that doing so is in the best interests of
contract owners investing in the Portfolio and certain other conditions are met.
PIFM can make these changes without contract owner approval, but will notify
contract owners investing in the Portfolio of any such changes.
Prudential was founded in 1987, and as of December 31, 1999, it had total assets
under management of approximately $364 billion. Prudential's headquarters are
located at 751 Broad Street, Newark, NJ. PIFM is an indirect wholly-owned
subsidiary of Prudential. It and its predecessors have served as manager and
administrator to
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investment companies since 1987. As of December 31, 1999, PIFM served as the
manager to 42 mutual funds and as manager or administrator to 22 closed-end
investment companies, with aggregate assets of approximately $75.6 billion.
PIFM's headquarters are located at 100 Mulberry Street, Newark, NJ.
The following chart lists the annual investment advisory fees payable as a
percentage of the Portfolio's average net assets.
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PORTFOLIO | TOTAL ADVISORY FEES AS % OF
| AVERAGE NET ASSETS
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SP Jennison International Growth Portfolio 0.85
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INVESTMENT SUB-ADVISER
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Jennison Associates LLC (Jennison), a wholly owned subsidiary of Prudential,
provides substantially all of the investment advisory services for the SP
Jennison International Growth Portfolio. Jennison's address is 466 Lexington
Avenue, New York, New York 10017. As of December 31, 1999, Jennison had over $59
billion in assets under management for institutional and mutual fund clients.
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PORTFOLIO MANAGERS
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The Portfolio is co-managed by Howard Moss and Blair Boyer. Mr. Moss and Mr.
Boyer have worked together managing international equity portfolios since 1989.
Howard Moss has been an Executive Vice President and Director of Jennison since
1993. Mr. Moss has been in the investment business for 30 years. Mr. Moss
received a B.A. from the University of Liverpool. Blair Boyer is an Executive
Vice President and Director of Jennison and has been with Jennison since 1993.
Mr. Boyer received a B.A. from Bucknell University and an M.B.A. from New York
University.
HOW TO BUY AND SELL SHARES OF THE FUND
The Fund offers two classes of shares in a Portfolio--Class I and Class II. This
prospectus relates only to Class II shares of the Portfolio. Class I shares are
sold only to separate accounts of Prudential as investment options under certain
Contracts. Class II shares are offered only to separate accounts of
non-Prudential insurance companies as investment options under certain of their
Contracts.
The way to invest in a Portfolio is through certain variable life insurance and
variable annuity contracts. Together with this prospectus, you should have
received a prospectus for such a Contract. You should refer to that prospectus
for further information on investing in a Portfolio.
Both Class I and Class II shares of a Portfolio are sold without any sales
charge at the net asset value of the Portfolio. Class II shares, however, are
subject to an annual distribution or "12b-1" fee of 0.25% and an administration
fee of 0.15% of the average daily net assets of Class II. Class I shares do not
have a distribution or administration fee.
Shares are redeemed for cash within seven days of receipt of a proper notice of
redemption or sooner if required by law. There is no redemption charge. We may
suspend the right to redeem shares or receive payment when the New York Stock
Exchange is closed (other than weekends or holidays), when trading on the New
York Stock Exchange is restricted, or as permitted by the SEC.
NET ASSET VALUE
Any purchase or sale of Portfolio shares is made at the net asset value, or NAV,
of such shares. The price at which a purchase or redemption is made is based on
the next calculation of the NAV after the order is received in good order. The
NAV of each share of the Portfolio is determined once a day--at 4:00 p.m. New
York time--on each day the New York Stock Exchange is open for business. If the
New York Stock Exchange closes early on a day, the Portfolio's NAV will be
calculated some time between the closing time and 4:00 p.m. on that day.
The NAV for the Portfolio is determined by a simple calculation. It's the total
value of the Portfolio (assets minus liabilities) divided by the total number of
shares outstanding.
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To determine the Portfolio's NAV, its holdings are valued as follows:
EQUITY SECURITIES are generally valued at the last sale price on an exchange or
NASDAQ, or if there is not a sale on that day, at the mean between the most
recent bid and asked prices on that day. If there is no asked price, the
security will be valued at the bid price. Equity securities that are not sold on
an exchange or NASDAQ are generally valued by an independent pricing agent or
principal market maker.
The Portfolio may own securities that are primarily listed on foreign exchanges
that trade on weekends or other days when the Portfolio does not price its
shares. Therefore, the value of the Portfolio's assets may change on days when
shareholders cannot purchase or redeem Portfolio shares.
Short-term debt securities, including bonds, notes, debentures and other debt
securities, and money market instruments such as certificates of deposit,
commercial paper, bankers' acceptances and obligations of domestic and foreign
banks, with remaining maturities of more than 60 days, for which market
quotations are readily available, are valued by an independent pricing agent or
principal market maker (if available, otherwise a primary market dealer).
Short-term debt securities with remaining maturities of 60 days or less are
valued at cost with interest accrued or discount amortized to the date of
maturity, unless such valuation, in the judgment of Prudential or a sub-adviser,
does not represent fair value.
CONVERTIBLE DEBT SECURITIES that are traded in the over-the-counter market,
including listed convertible debt securities for which the primary market is
believed by Prudential or a sub-adviser to be over-the-counter, are valued at
the mean between the last bid and asked prices provided by a principal market
maker (if available, otherwise a primary market dealer).
OTHER DEBT SECURITIES--those that are not valued on an amortized cost basis--are
valued using an independent pricing service.
OPTIONS ON STOCK AND STOCK INDEXES that are traded on a national securities
exchange are valued at the last sale price on such exchange on the day of
valuation or, if there was no such sale on such day, at the mean between the
most recently quoted bid and asked prices on such exchange.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS are valued at the last sale
price at the close of the commodities exchange or board of trade on which they
are traded. If there has been no sale that day, the securities will be valued at
the mean between the most recently quoted bid and asked prices on that exchange
or board of trade.
FORWARD CURRENCY EXCHANGE CONTRACTS are valued at the cost of covering or
offsetting such contracts calculated on the day of valuation. Securities which
are valued in accordance herewith in a currency other than U.S. dollars shall be
converted to U.S. dollar equivalents at a rate obtained from a recognized bank,
dealer or independent service on the day of valuation.
OVER-THE-COUNTER (OTC) OPTIONS are valued at the mean between bid and asked
prices provided by a dealer (which may be the counterparty). The sub-adviser
will monitor the market prices of the securities underlying the OTC options with
a view to determining the necessity of obtaining additional bid and ask
quotations from other dealers to assess the validity of the prices received from
the primary pricing dealer.
SECURITIES FOR WHICH NO MARKET QUOTATIONS ARE AVAILABLE will be valued at fair
value by Prudential or PIFM under the direction of the Fund's Board of
Directors.
DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund. PIMS' principal business
address is 751 Broad Street, Newark, New Jersey 07102-3777. The Fund has adopted
a distribution plan under Rule 12b-1 of the Investment Company Act of 1940
coveringClass II shares. Under that plan, Class II of each Portfolio pays to
PIMS a distribution or "12b-1" fee at the annual rate of 0.25% of the average
daily net assets of Class II. This fee pays for distribution services for Class
II shares. Because these fees are paid out of the Portfolio's assets on an
on-going basis, over time these fees will increase
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the cost of your investment in Class II shares and may cost you more than paying
other types of sales charges. These 12b-1 fees do not apply to Class I.
OTHER INFORMATION
FEDERAL INCOME TAXES
If you own or are considering purchasing a variable contract, you should consult
the prospectus for the variable contract for tax information about that variable
contract. You should also consult with a qualified tax adviser for information
and advice.
The SAI provides information about certain tax laws applicable to the Fund.
EUROPEAN MONETARY UNION
On January 1, 1999, 11 of the 15 member states of the European Monetary Union
introduced the "euro" as a common currency. During a three-year transitional
period, the euro will coexist with each participating state's currency and, on
July 1, 2002, the euro is expected to become the sole currency of the
participating states. During the transition period, the Fund will treat the euro
as a separate currency from that of any participating state. The conversion may
adversely affect the Fund if the euro does not take effect as planned; if a
participating state withdraws from the European Monetary Union; or if the
computing, accounting and trading systems used by the Fund's service providers,
or by entities with which the Fund or its service providers do business, are not
capable to recognizing the euro as a distinct currency at the time of, and
following, euro conversion. In addition, the conversion could cause markets to
become more volatile.
MONITORING FOR POSSIBLE CONFLICTS
The Fund sells its shares to fund variable life insurance contracts and variable
annuity contracts and is authorized to offer its shares to qualified retirement
plans. Because of differences in tax treatment and other considerations, it is
possible that the interest of variable life insurance contract owners, variable
annuity contract owners and participants in qualified retirement plans could
conflict. The Fund will monitor the situation and in the event that a material
conflict did develop, the Fund would determine what action, if any, to take in
response.
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FOR MORE INFORMATION
Additional information about the Fund and the Portfolio
can be obtained upon request without charge and
can be found in the following documents:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
(incorporated by reference into this prospectus)
ANNUAL REPORT
(including a discussion of market conditions and strategies that significantly
affected the Portfolio's performance during the previous year)
SEMI-ANNUAL REPORT
To obtain these documents or to ask any questions about the Fund:
Call toll-free (800) 778-2255
Write to The Prudential Series Fund, Inc., 751 BROAD STREET, NEWARK, NJ
07102-3777
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 1-202-942-8090
Via the Internet:
-----------------
on the EDGAR Database at
http://www.sec.gov
SEC File No. 811-03623
