For the fiscal year ended July 31, 2000.
File number: 811-05055
Prudential Balanced Fund
SUB-ITEM 77D
Policies With Respect to Security Investment
Supplement Dated May 5, 2000
Prospectus Dated October 4, 1999
The Board of Trustees of Prudential Balanced Fund (the Fund) has recently
approved a proposal to exchange the assets and liabilities of the Fund
for shares of
Prudential Active Balanced Fund, a series of The Prudential Investment
Portfolios,
Inc. Class A, Class B, Class C and Class Z shares of the Fund would be
exchanged at net asset value for respective Class A, Class B, Class C
and Class Z
shares of equivalent value of Prudential Active Balanced Fund.
The transfer is subject to approval by the shareholders of the Fund. The
shareholders' meeting is scheduled to occur in September 2000. It is
anticipated
that a proxy statement/prospectus relating to the transaction will be
mailed to the
Fund's shareholders in July 2000.
Under the terms of the proposal, shareholders of the Fund would become
shareholders of Prudential Active Balanced Fund. No sales charges would be
imposed on the proposed transfer. The Fund anticipates obtaining an opinion of
its counsel that the transaction will not result in gain or loss to
shareholders of the
Fund for federal income tax purposes.
Effective immediately, the Fund will no longer accept orders to
purchase or exchange into its shares of any class, except for (1) Retirement
Programs, PruArray Association Benefit Plans and PruArray Savings
Programs that are currently shareholders, and successor or related programs
and plans, (2) investors who have executed a Letter of Intent prior to May 5,
2000, (3) shareholders who have elected to reinvest dividends and/or
distributions and (4) current shareholders participating in automatic
investment plans. The current exchange privilege of obtaining shares of other
Prudential Mutual Funds and the current redemption rights remain in
effect. The current exchange privilege of obtaining shares of other
Prudential Mutual Funds and the current redemption rights will
remain in effect until the transaction is consummated.
The investment objective of Prudential Active Balanced Fund is to seek
income and long-term growth of capital by investing in a portfolio of equity,
fixed-income and money market securities which is actively managed to
capitalize on opportunities created by perceived misvaluation.
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