Performance Charts
A. Historical Investment Results
The chart shows comparative historical investment results for the
one-year, five-year and since inception periods ended November 30,
1993 for the Class A shares of the Fund, the Class B shares of the
Fund, the Lipper Small Co. Average and Morgan Stanley World Index,
without taking into account front-end or contingent deferred sale
charges.
B. Average Annual Total Returns
The chart also shows the average annual total returns for the one-
year, five-year and since inception periods ended December 31, 1993
for Class A and Class B shares taking into account any applicable
sales charges.
Mountain Charts
Two mountain charts show the growth of an assumed investment
of $10,000 in Prudential Global Genesis Fund. The charts
represent historical performance and are not a guarantee of future
performance of Class A shares or Class B shares.
A. Class A shares
The chart shows the growth of a $10,000 investment in Class A
shares from inception on January 22, 1990 through December 31,
1993, and assumes a front-end sales charge of 5.25%. The chart
shows the value of the investment as of December 31, 1993 (i) with
the reinvestment of dividends and distributions in additional
shares of the Fund and (ii) with all dividends and distributions
taken in cash.
B. Class B shares
The chart shows the growth of a $10,000 investment in Class B
shares from inception on January 29, 1988 through December 31,
1993, and does not assume the effect of a contingent deferred sales
charge on redemptions. The chart shows the value of the investment
as of December 31, 1993 (i) with the reinvestment of dividends and
distributions in additional shares of the Fund and (ii) with all
dividends and distributions taken in cash.
Pie chart showing portfolio composition, by country, as a
percentage of net assets: Pacific Basin 45% (not including Japan),
Europe 14%, Japan 13%, U.K. 3%, U.S. 13%, Mexico 2% and Cash 10%.
Letter to Shareholders
January 10, 1994
Over the past six months, lower interest rates in Europe, a weak yen and the
modest economic recovery in the United States helped global markets perform
strongly. During this six-month period, the Prudential Global Genesis Fund
produced substantial returns in this environment.
Worldwide Recovery
Global stocks have performed well in the past six months, driven largely by
investor optimism about a worldwide economic recovery. In Europe, Germany's
central bank lowered interest rates twice, easing some of the burden of
recession. In Japan, a new government took office, headed by a young prime
minister who pledged to break with the past and liberalize the economy.
Growth Around the Globe
The Fund's strategy has not changed substantially over the past six months;
holdings in the Pacific Basin (not including Japan) are generally overweighted,
while positions in the U.S. and Japan are underweighted. In addition, the
Fund's Continental European allocation of 14% is comparable to that of other
global small company funds in its universe.
In Japan, we restructured holdings in anticipation of the new government's pro-
consumer stance.Japan's old Liberal Democratic policy generally favored rural
dwellers over urbanites, large companies over small ones, and export-oriented
manufacturing companies over domestic service firms. The new coalition
government wants to upend the old order and, among other things, aims to make
housing more affordable in cities. We took profits in public works and
construction companies like P.S. Concrete, one of our top holdings six months
ago, and in Nishimatsu and used the proceeds to buy homebuilders that should
benefit from this trend including Higashi Nihon House.
We also started buying Japanese companies that are restructuring their
operations to remain competitive in the global marketplace. One company is
probably familiar: Aiwa, an electronics maker and pioneer in mini-stereo
systems. Like many Japanese firms, Aiwa must trim its workforce to cope with
higher wages and the rising yen.
-1-
<PAGE>
Many of Japan's neighbors in the Pacific Basin are becoming some of the world's
biggest manufacturing centers by virtue of their low cost structures. For
example, Korean autos and electronics are gaining wider acceptance and their
prices are very attractive in the face of a rising yen. We have a position in
Shinwon Corp., a manufacturer and retailer of apparel. We also own stock in
Sembawang Maritime, a Singaporean oil field services provider that concentrates
its business in the Far East. Overall, you'll notice that we have made a
substantial commitment--about 58% of assets--to the Pacific Basin and Japan
because we believe this region will be among the world's leaders in economic
growth for some time to come.
In Europe, we have increased our emphasis on companies that are doing more
business with the developing world. Nokia, one of the Fund's top holdings, is a
Finnish cellular telephone equipment manufacturer that sells its product in
China.
In the United States, we continued to focus on technology companies expected to
benefit from the multimedia explosion. One of our holdings is Adaptec, which
makes software that allows peripheral personal computers to ""talk'' to central
processor units.
Looking Ahead
Asia appears to be the growth jewel in the world's investment crown. The mature
economies of the U.S. and Europe seem to be settling into periods of slow,
although steady, economic growth. On the other hand, we believe Japan's trend
toward a consumer-based economy should bode well for all the booming nearby
economies, including Malaysia, Singapore and Korea. Investors who seek longer
term capital growth and have the risk tolerance and patience to ride out
possible market fluctuations should find opportunities there.
As always, we are pleased to have you as a shareholder of the Prudential Global
Genesis Fund and to report our activities to you.
Sincerely,
Lawrence C. McQuade
President
Daniel J. Duane
Portfolio Manager
-2-
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND - PORTFOLIO COMPOSITION
(November 30, 1993)
[Pie chart to come]
Geographic Allocation
<TABLE>
<S> <C>
Europe 15
U. S. 13
Japan 13
U. K. 3
Mexico 2
Other Pac. Basin 43
Cash 11
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--88.2%
Common Stocks--80.4%
Australia--2.9%
1,530,600 AAPC, Ltd.* ............. $ 866,469
(Merchandising)
349,098 Bank of Melbourne, Ltd. .. 1,466,093
(Banking)
1,715,400 Sea World Property, Ltd... 959,794
(Leisure & tourism) ------------
3,292,356
------------
Federal Republic of Germany--2.6%
1,684 Bilfinger & Berger AG ... 830,476
(Construction & housing)
1,553 Computer 2000 (Rights) ... 770,405
(Business & public
services)
641+ Hornbach AG
(cost 392,804
$338,972-purchased-1993)
(Merchandising)
1,135 Weru AG ................. 910,808
(Construction & housing) ------------
2,904,493
------------
France--3.3%
18,000 Lapeyre ................. 829,927
(Building & related
industries)
5,319 Manutan ................. 619,846
(Merchandising)
15,000 Naf Naf* ................ 800,540
(Merchandising)
5,800 Plastic Omnium SA ....... 617,125
(Automobiles)
9,500 Rexel ................... 922,564
(Electronics) ------------
3,790,002
------------
Hong Kong--11.0%
11,066,000 CNT Group, Ltd. ......... 1,661,726
(Multi-industry)
3,218,000 Fairwood Holdings Corp. .. $ 1,499,688
(Merchandising)
1,660,000 Giordano Holdings, Ltd. .. 897,175
(Merchandising)
372,000 Guoco Group, Ltd. ....... 1,685,481
(Financial services)
4,866,000 Hung Hing Printing Group, 1,433,066
Ltd. .
(Broadcasting &
publishing)
1,056,000 JCG Holdings ............ 840,721
(Financial services)
1,887,000 Liu Chong Hing Investment,
Ltd. ............ 2,100,791
(Real estate)
6,431,000 Techtronic Industries,
Ltd. .................. 1,240,443
(Machinery &
engineering)
1,901,000 Yaohan International 719,814
Caterers, Ltd.
(Food & household
products)
1,546,000 Yips Hang Cheung Holdings. 480,322
(Chemicals) ------------
12,559,227
------------
Indonesia--0.8%
220,000 Sekar Laut* ............. 915,207
(Multi-industry) ------------
Japan--11.2%
55,000 Aiwa Co. ................ 813,467
(Appliances & household
durables)
24,000 Aoyama Trading Co., Ltd. . 1,633,733
(Merchandising)
1,000 Autobacs Seven Co. ...... 107,482
(Automotive)
23,000 Higashi Nihon House ..... 1,183,225
(Construction & housing)
7,000 Japan Associates Finance
Co. ................... 610,904
(Financial services)
29,000 Juntendo Co. ............ 253,089
(Merchandising)
</TABLE>
-3- See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Japan--(cont'd)
21,000 Koei Co. ................ $ 1,099,628
(Recreation & other
consumer goods)
16,000 Kyocera, Ltd. ........... 745,212
(Electronics)
29,000 Mitsui Home Co. ......... 482,201
(Construction & housing)
13,000 Nichiei Co. ............. 1,062,882
(Financial services)
32,000 Nissen Co., Ltd. ........ 1,381,654
(Merchandising)
6,000 P.S. Concrete* .......... 115,199
(Construction & housing)
10,800 Sega Enterprises, Ltd. .. 791,732
(Recreation & other
consumer goods)
39,000 Sho-Bond Construction Co., 1,038,997
Ltd.
(Construction & housing)
19,000 Tsutsumi Jewelry, Ltd. ... 1,518,534
(Merchandising) ------------
12,837,939
------------
Korea--3.8%
1,000 Daewoo Securities Co., 32,174
Ltd. ..................
(Financial services)
9,000 Daishin Securities* ..... 212,721
(Financial services)
Dong-Ah Construction Ind.
Co., Ltd.
4,997 (New)*.................... 160,775
25,800 (Old)* .................. 852,444
(Construction & housing)
Hanjin Heavy Industries
2,641 (New)*.................... 38,564
62,387 (Old)* .................. 910,985
(Transportation/shipping)
15,000 Kun Young Construction $ 250,588
Corp.* ................
(Construction & housing)
22,680 Pusan Steel Pipe* ....... 791,457
(Steel)
Samsung Electronics Co.
288 (New)*.................... 12,759
5,700 (Old)* .................. 349,152
(Electronics)
25,300 Shinwon Corp.* .......... 729,477
(Textiles & apparel) ------------
4,341,096
------------
Malaysia--14.5%
110,000 Aokam Perdana Berhad .... 1,075,059
(Forest products)
190,000 Arab-Malaysian Finance 765,051
Berhad*
(Banking)
170,000 Berjaya Sports Toto ..... 382,134
(Real estate)
545,000 Federal Furniture 931,059
Holdings* .............
(Appliances & household
durables)
399,000 Granite Industries Berhad* 2,292,924
(Leisure & tourism)
70,000 Hong Leong Industries 380,375
Berhad ................
(Building & related
industries)
22,000 Kedah Cement Holdings 33,886
Berhad .
(Building & related
industries)
297,500 Magnum Corp. Berhad* .... 709,441
(Leisure & tourism)
256,500 Malayan Cement Berhad ... 457,248
(Building & related
industries)
456,000 Malayan Cement Berhad 806,550
Class B .
(Building & related
industries)
222,000 MGR Corp.* .............. 676,935
(Forest products)
506,000 Minho Berhad* ........... 1,285,770
(Forest products)
</TABLE>
-4- See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Malaysia--(cont'd)
303,000 Multi-Purpose Holdings $ 769,937
Berhad .
(Multi-industry)
200,000 Park May Berhad ......... 985,144
(Transportation/shipping)
816,500 Pilecon Engineering Berhad 1,643,853
(Machinery &
engineering)
328,000 Resorts World ........... 1,782,330
(Leisure & tourism)
394,000 Tech Resources Industries 1,617,279
Berhad* ------------
(Data processing &
reproduction)
16,594,975
------------
Mexico--1.6%
Grupo Financiero Banamex
Acci.
69,000 Class A................... 514,793
60,200 Class C (Old)*............ 449,138
6,460 Class L (New)*............ 42,679
87,500 Transportacion Maritima
Mexico
(ADR)* . . . . . . . . . 853,125
------------
(Transportation/shipping)
1,859,735
------------
Netherlands--1.4%
67,650 Royal Boskalis Westminster 1,600,663
NV ------------
(Construction & housing)
Singapore--9.1%
717,000 Kim England Holdings .... 1,487,775
(Financial services)
1,404,000 QAF, Ltd. ............... 1,263,600
(Food & household
products)
284,250 Sembawang Maritime, Ltd. . 1,270,242
(Transportation/shipping)
Sembawang Maritime, Ltd.,
173,000 Convertible unsecured loan $ 243,281
stock
(Transportation/shipping)
124,000 Sembawang Shipyard, Ltd. . 1,038,500
(Machinery & engineering)
921,000 Tiger Medicals, Ltd.* ... 1,496,625
(Health & personal care)
751,000 Van Der Horst* .......... 1,821,175
(Machinery & engineering)
724,000 Wing Tai Holdings Ltd. .. 1,737,600
(Multi-industry) ------------
10,358,798
------------
Spain--1.6%
12,600 Azkoyen SA .............. 418,194
(Machinery &
engineering)
16,270 Construcciones y Aux Ferr* 699,573
(Construction & housing)
63,425 Pryca SA* ............... 682,910
(Merchandising) ------------
1,800,677
------------
Sweden--0.7%
28,150 Hennes & Mauritz B Free .. 805,903
(Merchandising) ------------
United Kingdom--3.1%
244,900 Dorling Kindersley 1,132,751
Holdings, Ltd.
(Broadcasting &
publishing)
214,400 Lloyds Chemists Plc ..... 1,007,621
(Health & personal care)
27,800 Micro Focus Group Ex L* .. 551,965
(Multi-industry)
195,600 Powerscreen International 887,266
(Construction & housing) ------------
3,579,603
------------
United States--12.8%
37,100 Adaptec, Inc.* .......... 1,224,300
(Electronics)
</TABLE>
-5- See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
United States--(cont'd)
40,000 Barnes & Noble, Inc.* ... $ 1,160,000
(Merchandising)
35,000 Cirrus Logic, Inc.* ..... 1,205,313
(Electronics)
61,600 Haverty Furniture Cos, 1,047,200
Inc. ..................
(Merchandising)
50,000 Holophone Corp.* ........ 737,500
(Electronics)
35,000 Itron, Inc.* ............ 538,125
(Electronics)
20,000 Iwerks Entertainment, Inc.* 557,500
(Leisure & tourism)
Jacobs Engineering Group,
Inc.*
37,900 (Rights) ................ 942,763
(Machinery & engineering)
41,800 Jones Apparel Group, Inc.* 1,316,700
(Textiles & apparel)
69,000 Kemet Corp.* ............ 1,009,125
(Multi-industry)
35,500 Media Vision, Inc.* ..... 1,384,500
(Business & public
services)
31,200 Piper Jaffray, Inc. ..... 1,099,800
(Financial services)
38,300 S3, Inc.* ............... 1,316,563
(Electronics)
16,700 T. Rowe Price & 1,008,263
Associates, Inc. ------------
(Financial services)
14,547,652
------------
Total common stocks
(cost US$77,278,199).... 91,788,326
------------
Preferred Stocks--5.0%
Australia--0.2%
24,226 Bank of Melbourne ....... 210,499
(Banking) ------------
Austria--0.7%
7,420 Maculan Holding AG ...... 763,710
(Construction & housing) ------------
Federal Republic of Germany--1.4%
1,710 Hornbach AG* ............ $ 1,636,698
(Merchandising) ------------
Finland--1.8%
43,300 Nokia Corp. ............. 2,070,563
(Multi-industry) ------------
Korea--0.9%
19,000 Daishin Securities * .... 423,215
(Financial services)
15,000 Mando Machinery Corp. ... 605,123
(Machinery & ------------
engineering)
1,028,338
------------
Total preferred stocks
(cost US$4,553,923)..... 5,709,808
------------
Warrants*--0.4%
Japan
50 Autobacs Seven Co.,
expiring Feb. '95 @
Y48,089 . 140,625
(Automotive)
218 Nissen Co., Ltd.,
expiring Nov. '96 @
Y41,681 . 308,529
(Merchandising) ------------
Total warrants
(cost US$263,392)....... 449,154
------------
<CAPTION>
Principal
Amount
(000) Corporate Bonds--2.4%
- - ----------
Japan--1.0%
Y4 89,000 Capcom, Ltd.,
3.90%, 9/30/96 .......... 1,178,163
(Recreation & other ------------
consumer goods)
Malaysia--0.5%
USD 500 Gujurat Ambuja Cement,
3.50%, 6/30/99 ........ 590,000
(Building & related ------------
industries)
</TABLE>
-6- See Notes to Financial Statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal Value
Amount Description (Note 1)
(000)
<C> <S> <C>
Singapore--0.1%
SED 201 QAF, Ltd.,
2.00%, 11/3/98 ........ $ 161,280
(Food & household ------------
products)
Thailand--0.8%
USD 600 Land & House Public Co.,
Ltd.,
5.00%, 4/29/03 ........ 855,000
(Construction & housing) ------------
Total corporate bonds
(cost US$2,529,121)..... 2,784,443
------------
Total long-term
investments
(cost US$84,624,635).... 100,731,731
------------
SHORT-TERM INVESTMENTS--9.8%
Repurchase Agreement
USD 11,258 Joint Repurchase Agreement
Account,
3.21%, 12/1/93
(cost US$11,258,000;
Note 5)................. 11,258,000
------------
Total Investments--98.0%
(cost US$95,882,635;
Note 4)................. 111,989,731
Other assets in excess of
liabilities--2.0%....... 2,240,504
------------
Net Assets--100%.......... $114,230,235
------------
------------
</TABLE>
- - ---------------
* Non-income producing security.
+ Security restricted as to resale. The value of such security represents
approximately .34% of net assets.
ADR--American Depository Receipt.
-7- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
November 30, 1993
------------------
<S> <C>
Assets
Investments, at value (cost $95,882,635).............................................. $111,989,731
Foreign currency, at value (cost $1,862,381).......................................... 1,849,554
Cash.................................................................................. 21,208
Receivable for Fund shares sold....................................................... 2,589,643
Receivable for investments sold....................................................... 470,428
Dividends and interest receivable..................................................... 103,630
Deferred expenses..................................................................... 675
------------------
Total assets...................................................................... 117,024,869
------------------
Liabilities
Payable for investments purchased..................................................... 1,681,865
Payable for Fund shares reacquired.................................................... 867,850
Accrued expenses and other liabilities................................................ 110,645
Due to Distributors................................................................... 77,875
Due to Manager........................................................................ 44,791
Withholding taxes payable............................................................. 11,608
------------------
Total liabilities................................................................. 2,794,634
------------------
Net Assets............................................................................ $114,230,235
------------------
------------------
Net assets were comprised of:
Common stock, at par................................................................ $ 65,758
Paid-in capital in excess of par.................................................... 96,336,369
------------------
96,402,127
Accumulated net investment loss..................................................... (337,079)
Accumulated net realized gains on investment and foreign currency transactions...... 2,069,998
Net unrealized appreciation on investments and foreign currencies................... 16,095,189
------------------
Net assets, November 30, 1993....................................................... $114,230,235
------------------
------------------
Class A:
Net asset value and redemption price per share ($18,313,567 3 1,032,475 shares of
common stock issued and outstanding).............................................. $17.74
Maximum sales charge (5.25% of offering price)...................................... .98
------------------
Maximum offering price to public.................................................... $18.72
------------------
------------------
Class B:
Net asset value,offering and redemption price per share ($95,916,668 3 5,543,347
shares of common stock issued and outstanding).................................... $17.30
------------------
------------------
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
November 30,
Net Investment Income 1993
------------
<S> <C>
Dividends (net of foreign withholding
taxes of $41,201)................... $ 335,734
Interest (net of foreign withholding
taxes of $1,378).................... 74,004
------------
Total income........................ 409,738
------------
Expenses
Management fee, net of waiver of
$273,289.............................. 44,791
Distribution fee--Class A............. 8,270
Distribution fee--Class B............. 276,728
Transfer agent's fees and expenses.... 65,000
Custodian's fees and expenses......... 64,000
Audit fee............................. 30,000
Registration fees..................... 18,000
Directors' fees....................... 12,500
Reports to shareholders............... 7,500
Legal fees............................ 5,000
Miscellaneous......................... 6,812
------------
Total expenses...................... 538,601
------------
Net investment loss..................... (128,863)
------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investment transactions............... 1,974,524
Foreign currency transactions......... 54,176
------------
2,028,700
------------
Net change in unrealized appreciation/
depreciation of:
Investments........................... 7,613,674
Foreign currencies.................... (57,013)
------------
7,556,661
------------
Net gain on investments and foreign
currencies............................ 9,585,361
------------
Net Increase in Net Assets
Resulting from Operations............... $ 9,456,498
------------
------------
</TABLE>
See Notes to Financial Statements.
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Changes in Net Assets
(Unuadited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) November 30, May 31,
in Net Assets 1993 1993
------------ ------------
<S> <C> <C>
Operations
Net investment income
(loss).................. $ (128,863) $ 21,117
Net realized gain on
investment and foreign
currency
transactions.......... 2,028,700 3,863,158
Net change in unrealized
appreciation/depreciation
of investments and
foreign currencies.... 7,556,661 2,251,281
------------ ------------
Net increase in net
assets resulting from
operations............ 9,456,498 6,135,556
------------ ------------
Dividends and distributions (Note 1)
Dividends to
shareholders in excess
of net investment
income
Class A............... (49,544) --
Class B............... (148,152) --
------------ ------------
(197,696) --
------------ ------------
Distributions to
shareholders from net
realized gains on
investment and foreign
currency transactions
Class A............... (29,710) --
Class B............... (266,381) --
------------ ------------
(296,091) --
------------ ------------
Fund share transactions
(Note 6)
Net proceeds from shares
subscribed............ 81,863,659 12,830,751
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions......... 467,012 --
Cost of shares
reacquired.............. (16,634,100) (18,868,583)
------------ ------------
Net increase (decrease)
in net assets from
Fund share
transactions.......... 65,696,571 (6,037,832)
------------ ------------
Total increase............ 74,659,282 97,724
Net Assets
Beginning of period....... 39,570,953 39,473,229
------------ ------------
End of period............. $114,230,235 $ 39,570,953
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Notes to Financial Statements
(Unaudited)
Prudential-Bache Global Genesis Fund, Inc., doing business as Prudential
Global Genesis Fund (the ``Fund''), is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. The Fund's
investment objective is long-term growth of capital by investing primarily in
equity securities of foreign and domestic companies with market capitalizations
of less than U.S.$750 million.
Note 1. Accounting The following is a summary of significant
Policies accounting policies followed by the
Fund in the preparation of its financial
statements.
Security Valuation: Securities traded on an exchange (whether domestic or
foreign) are valued at the last reported sales price on the primary exchange on
which they are traded. Securities traded in the over-the-counter market
(including securities listed on exchanges for which a last sales price is not
available) are valued at the average of the last reported bid and asked prices.
Securities for which market quotations are not readily available, including
restricted securities, will be valued at fair value as determined in good faith
according to a pricing procedure developed by the Investment Adviser under
procedures established by and under the general supervision of the Fund's Board
of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian take possession of the
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction including accrued interest. If the seller
defaults and the value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
The Fund may invest up to 5% of its total assets in securities which are not
readily marketable, including those which are restricted as to disposition under
securities law (``restricted securities''). With regards to the restricted
security held by the Fund at November 30, 1993, the Fund may not demand
registration by the issuer. Restricted securities are valued pursuant to the
valuation procedures noted above.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at
the closing rates of exchange.
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented using the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the fiscal period.
Net realized gain on foreign currency transactions of $54,176 represents net
foreign exchange gains from disposition of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security transactions,
and the difference between the amounts of dividends, interest and foreign taxes
recorded on the Fund's books and the U.S. dollar equivalent amounts actually
received or paid. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities (other than investments) at fiscal period end
exchange rates are reflected as a component of unrealized appreciation on
foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political or economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date and interest income is recorded on an accrual basis.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to
-10-
<PAGE>
<PAGE>
each class of shares of the Fund based upon the relative proportion of net
assets of each class at the beginning of the day.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no federal income tax provision is required.
Withholding taxes on foreign interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital gains, if any, at least
annually. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for wash sale transactions.
Reclassification of Capital Accounts: Effective June 1, 1993, the Fund began
accounting and reporting for distributions to shareholders in accordance with
Statement of Position 93-2: Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions by
Investment Companies. As a result of this statement, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. The effect caused by adopting this
statement was to decrease paid-in capital by $1,226,725, decrease accumulated
net investment loss by $1,381,176 and decrease accumulated net realized gains on
investments by $154,451 with respect to amounts reported through May 31, 1993.
Net investment income, net realized gains and net assets were affected by this
change.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund
Management, Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility
for all investment advisory services and supervises the subadviser's performance
of such services. PMF has entered into a subadvisory agreement with The
Prudential Investment Corporation (``PIC''); PIC furnishes investment advisory
services in connection with the management of the Fund. PMF pays for the
services of PIC, the compensation of officers of the Fund, occupancy and certain
clerical and bookkeeping costs of the Fund. The Fund bears all other costs and
expenses.
The management fee paid PMF is computed daily and payable monthly, at an
annual rate of 1% of the average daily net assets of the Fund. For the period
ended October 31, 1993, PMF voluntarily waived 100% of its management fee.
Effective November 1, 1993, PMF reduced the management fee waiver to 50%
totalling $273,289 ($.13 per share or .86% (annualized) of average net assets).
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and PSI, which acts as distributor of the Class B shares of
the Fund (collectively the ``Distributors''). To reimburse the Distributors for
their expenses incurred in distributing the Fund's Class A and Class B shares,
the Fund, pursuant to plans of distribution, pays the Distributors a
reimbursement accrued daily and payable monthly.
Pursuant to the Class A Plan, the Fund reimburses PMFD for its
distribution-related expenses with respect to Class A shares at an annual rate
of up to .30 of 1% of the average daily net assets of the Class A shares. Such
expenses under the Class A Plan were .20 of 1% of the average daily net assets
of the Class A shares for the six months ended November 30, 1993. PMFD pays
various broker-dealers, including PSI and Pruco Securities Corporation
(``Prusec''), affiliated broker-dealers, for account servicing fees and other
expenses incurred by such broker-dealers.
Pursuant to the Class B Plan, the Fund reimburses PSI for its
distribution-related expenses with respect to Class B shares at an annual rate
of up to 1% of the average daily net assets of the Class B shares.
The Class B distribution expenses include commission credits for payments of
commissions and account servicing fees to financial advisers and an allocation
for overhead and other distribution-related expenses, interest and/or carrying
charges, the cost of printing and mailing prospectuses to potential investors
and of advertising incurred in connection with the distribution of shares.
The Distributors recover the distribution expenses and service fees incurred
through the receipt of reimbursement payments from the Fund under the plans and
the receipt of initial sales charges (Class A only) and contingent deferred
sales charges (Class B only) from shareholders.
PMFD has advised the Fund that it has received approximately $246,200 in
front-end sales charges resulting from sales of Class A shares during the six
months ended November 30, 1993. From these fees, PMFD paid such sales charges to
dealers (PSI and Prusec) which in turn paid commissions to salespersons.
-11-
<PAGE>
<PAGE>
With respect to the Class B Plan, at any given time, the amount of expenses
incurred by PSI in distributing the Fund's shares and not recovered through the
imposition of contingent deferred sales charges in connection with certain
redemptions of shares may exceed the total payments made by the Fund pursuant to
the Class B Plan. For the six months ended November 30, 1993, PSI advised the
Fund that it received approximately $37,200 in contingent deferred sales charges
imposed upon certain redemptions by investors. PSI, as distributor, has also
advised the Fund that at November 30, 1993, the amount of distribution expenses
incurred by PSI and not yet reimbursed by the Fund or recovered through
contingent deferred sales charges approximated $2,432,000. This amount may be
recovered through future payments under the Class B Plan or contingent deferred
sales charges.
In the event of termination or noncontinuation of the Class B Plan, the Fund
would not be contractually obligated to pay PSI, as distributor, for any
expenses not previously reimbursed or recovered through contingent deferred
sales charges.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund Services Inc. (``PMFS``),
Transactions a wholly-owned subsidiary of PMF, serves as
With Affiliates the Fund's transfer agent and during the
six months ended November 30, 1993, the Fund
incurred fees of approximately $60,000 for the services of PMFS. As of November
30, 1993, approximately $27,000 of such fees were due to PMFS. Transfer agent
fees and expenses in the Statement of Operations include certain out-of-pocket
expenses paid to non-affiliates.
For the six months ended November 30, 1993, PSI and/or its foreign affiliates
earned approximately $3,200 in brokerage commissions from portfolio transactions
executed on behalf of the Fund.
Note 4. Portfolio Purchases and sales of
Securities investment securities, other
than short-term investments, for the six months
ended November 30, 1993 aggregated $65,440,520 and $12,048,676, respectively.
The federal income tax basis of the Fund's investments at November 30, 1993
was $95,896,047 and accordingly, net unrealized appreciation for federal income
tax purposes was $16,093,684 (gross unrealized appreciation-- $18,355,050; gross
unrealized depreciation--$2,261,366).
Note 5. Joint The Fund along with other
Repurchase affiliated registered investment
Agreement Account companies, transfers
uninvested cash balances into a single joint
account, the daily aggregate balance of which is invested in one or more
repurchase agreements collateralized by U.S. Treasury or federal agency
obligations. As of November 30, 1993, the Fund had a 0.7% undivided interest in
the repurchase agreements in the joint account. The undivided interest for the
Fund represented $11,258,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefor were as
follows:
Bear Stearns & Co., 3.23%, dated 11/30/93, in the principal amount of
$484,000,000, repurchase price $484,043,426, due 12/1/93; collateralized by
$190,685,000 U.S. Treasury Notes, 4.25%, due 11/30/95 and $300,000,000 U.S.
Treasury Notes, 5.75%, due 8/15/03; approximate aggregate value including
accrued interest--$496,292,534.
Goldman Sachs & Co., 3.18%, dated 11/30/93, in the principal amount of
$287,000,000, repurchase price $287,025,352, due 12/1/93; collateralized by
$213,355,000 U.S. Treasury Bonds, 10.375%, due 11/15/12; approximate value
including accrued interest-- $297,013,953.
Smith Barney Shearson, Inc., 3.22%, dated 11/30/93, in the principal amount
of $175,000,000, repurchase price $175,015,653, due 12/1/93; collateralized by
$20,000,000 U.S. Treasury Bills, 3.22%, due 12/16/93; $20,000,000 U.S. Treasury
Notes, 4.875%, due 1/31/94; $50,000,000 U.S. Treasury Bills, 3.22% due 3/24/94;
$560,000 U.S. Treasury Bills, 3.22%, due 3/31/94; $30,000,000 U.S. Treasury
Bonds, 7.50%, due 11/15/16; $19,455,000 U.S. Treasury Bonds, 8.125% due 8/15/21
and $26,000,000 U.S. Treasury Bonds, 8.00%, due 11/15/21; approximate aggregate
value including accrued interest--$179,435,385.
J.P. Morgan Securities, Inc., 3.20%, dated 11/30/93, in the principal amount
of $325,000,000, repurchase price $325,028,889, due 12/1/93; collateralized by
$50,000,000 U.S. Treasury Notes, 4.25%, due 7/31/95; $23,113,000 U.S. Treasury
Notes, 6.00%, due 11/30/97; $50,000,000 U.S. Treasury Notes, 4.875% due 1/31/94;
$50,000,000 U.S. Treasury Notes, 8.625, due 8/15/94; $100,000,000 U.S. Treasury
Notes, 5.75%, due 3/31/94 and $50,000,000 U.S. Treasury Notes, 5.125%, due
2/28/98; approximate aggregate value including accrued interest--$331,826,945.
-12-
<PAGE>
<PAGE>
Kidder Peabody & Co., 3.23%, dated 11/30/93, in the principal amount of
$375,000,000, repurchase price $375,033,646, due 12/1/93; collateralized by
$16,765,000 U.S. Treasury Notes, 9.25%, due 1/15/96 and $298,000,000 U.S.
Treasury Bonds, 8.125%, due 8/15/21; approximate aggregate value including
accrued interest--$387,047,017.
Note 6. Capital The Fund offers both Class
A and Class B shares. Class A shares are sold
with a front-end sales charge of up to 5.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Both classes of shares have equal rights as
to earnings, assets and voting privileges except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. There are 500 million shares of common stock, $.01 par value
per share, divided into two classes, designated Class A and B common stock, each
of which consists of 250 million authorized shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Shares Amount
- - -------- ----------- -------------
Six months ended November
30, 1993:
Shares sold................. 1,097,407 $ 18,879,421
Shares issued in
reinvestment of dividends
and distributions......... 4,664 72,705
Shares reacquired........... (293,529) (5,191,685)
----------- -------------
Net increase in shares
outstanding............... 808,542 $ 13,760,441
----------- -------------
----------- -------------
Year ended May 31, 1993:
Shares sold................. 70,451 $ 936,730
Shares reacquired........... (149,896) (1,845,560)
----------- -------------
Net decrease in shares
outstanding............... (79,445) $ (908,830)
----------- -------------
----------- -------------
<CAPTION>
<S> <C> <C>
Class B Shares Amount
- - ------- ----------- -------------
Six months ended November
30, 1993:
Shares sold................. 3,787,863 $ 62,984,238
Shares issued in
reinvestment of dividends
and distributions......... 25,873 394,307
Shares reacquired........... (690,761) (11,442,415)
----------- -------------
Net increase in shares
outstanding............... 3,122,975 $ 51,936,130
----------- -------------
----------- -------------
Year ended May 31, 1993:
Shares sold................. 914,538 $ 11,894,021
Shares reacquired........... (1,374,192) (17,023,023)
----------- -------------
Net decrease in shares
outstanding............... (459,654) $ (5,129,002)
----------- -------------
----------- -------------
</TABLE>
-13-
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Class B
----------------------------------------------------- --------------------------------------------------------------
January 22,
Six Months 1990@ Six Months
PER SHARE Ended Year Ended May 31, through Ended Year Ended May 31,
OPERATING November 30, ------------------------ May 31, November 30, -----------------------------------------------
PERFORMANCE: 1993++ 1993++ 1992++ 1991 1990 1993++ 1993++ 1992++ 1991 1990 1989
------------ ------ ------ ------ ----------- ------------ ------- ------- ------- ------- -------
Net asset
value,
beginning
of
period... $ 15.34 $12.62 $11.95 $12.62 $ 12.41 $ 14.93 $ 12.38 $ 11.82 $ 12.58 $ 12.28 $ 10.80
------------ ------ ------ ------ ----------- ------------ ------- ------- ------- ------- -------
Income
from
investment
operations
Net
investment
income
(loss)+... .03 .10 .02 (.03) (.04) (.07) -- (.07) (.15) (.14) (.13)
Net
realized
and
unrealized
gain
(loss)
on
investment
and
foreign
currency
transactions.. 2.61 2.62 .65 (.64) .25 2.58 2.55 .63 (.61) 1.30 1.74
------- ------ ------ ------ ------- ------- ------- ------- ------- ------- ------
Total
from
investment
operations... 2.64 2.72 .67 (.67) .21 2.51 2.55 .56 (.76) 1.16 1.61
------ ------ ------ ------ ------- ------- ------ ------- ------- ------- ------
Less
distributions
Dividends
from
net
investment
income... (.15) -- -- -- -- (.05) -- -- -- -- --
Distributions
paid to
shareholders
from net
realized
gains
on
investment
and
foreign
currency
transactions... (.09) -- -- -- -- (.09) -- -- -- (.86) (.13)
------ ------ ------ ------ ------- ------- ------- ------- ------- ------- ------
Total
distributions... (.24) -- -- -- -- (.14) -- -- -- -- --
------ ------ ------ ------ ------- ------- ------- ------- ------- ------- -------
Net asset
value,
end of
period... $ 17.74 $15.34 $12.62 $11.95 $ 12.62 $ 17.30 $ 14.93 $ 12.38 $ 11.82 $ 12.58 $ 12.28
-------- ------ ------ ------ -------- --------- ------- ------- ------- ------- -------
-------- ------ ------ ------ -------- --------- ------- ------- ------- ------- -------
TOTAL
RETURN
(1):... 17.43% 21.55% 5.61% (5.31)% 1.69% 16.94% 20.60% 4.74% (6.04)% 9.72% 15.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets,
end of
period
(000).. $ 18,313 $3,435 $3,829 $4,059 $ 2,137 $ 95,917 $36,136 $35,644 $40,200 $39,868 $13,254
Average
net
assets
(000)... $ 8,248 $3,106 $3,771 $2,569 $ 1,204 $ 55,194 $31,561 $37,236 $37,689 $26,161 $11,495
Ratios to
average
net
assets:
Expenses,
including
distribution
fees+... 1.00%** 1.49% 1.50% 2.72%# 3.90%** 1.80%** 2.29% 2.30% 3.48%# 3.66%# 3.52%#
Expenses,
excluding
distribution
fees+... .80%** 1.29% 1.30% 2.52%# 3.70%** .80%** 1.29% 1.30% 2.48%# 2.70%# 2.52%#
Net
investment
income
(loss)+.. .25%** .79% .19% (.61)% (1.71)%** (.50)%** (.01)% (.57)% (1.45)% (1.76)% (1.18)%
Portfolio
turnover
rate... 20% 67% 57% 95% 72% 20% 67% 57% 95% 72% 60%
<CAPTION>
- - ---------------
</TABLE>
<TABLE>
<C> <S>
@ Commencement of offering of Class A shares.
** Annualized.
+ Net of expense subsidies and/or fee waivers (all reported periods except 1991).
++ Calculated based upon average shares outstanding during the fiscal period.
# Restated to reflect reclassification of foreign withholding taxes as a reduction of related income.
(1) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase
of shares on the first day and a sale on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a full year are not annualized.
</TABLE>
See Notes to Financial Statements.
-14-
Chart entitled Prudential Mutual Funds: Risk/Reward Spectrum.
The chart shows a graphic representation of the spectrum of risks
of various categories of Prudential Mutual Funds including stock
funds, tax-exempt bond funds, taxable bond funds and global taxable
bond funds. The chart rates the risk of individual Prudential
Mutual Funds relative to other Prudential Mutual Funds in each
category.
Under the category of stock funds, the chart lists from low risk to
high risk the following funds (beginning at the low end of the
spectrum):
FlexiFund (The Conservatively Managed Portfolio)
IncomeVertible Fund
FlexiFund (The Strategy Portfolio)
Equity Income Fund
Utility Fund
Global Utility Fund
Equity Fund
Growth Fund
Global Fund
Nicholas-Applegate Growth Equity Fund
Growth Opportunity Fund
Multi-Sector Fund
Global Natural Resources Fund
Global Genesis Fund
Pacific Growth Fund
Under the category of tax-exempt bond funds, the chart lists from
low risk to high risk the following funds (beginning at the low end
of the spectrum):
Municipal Bond Fund (Modified Term Series)
Municipal Bond Fund (Insured Series)
National Municipals Fund
Municipal Series Fund (State Series Fund)
California Municipal Fund (California Income Series)
Municipal Bond Fund (High Yield Series)
Under the category of taxable bond funds, the chart lists from low
risk to high risk the following funds (beginning at the low end of
the spectrum):
Adjustable Rate Securities Fund
The BlackRock Government Income Fund
Structured Maturity Fund (Income Portfolio)
Government Securities Trust (Intermediate Term Series)
GNMA Fund
Government Plus Fund
U.S. Government Fund
High Yield Fund
Under the category of global taxable bond funds, the chart lists
from low risk to high risk the following funds (beginning at the
low end of the spectrum):
Short-Term Global Income Fund (Global Assets Portfolio)
Short-Term Global Income Fund (Short-Term Global Income
Portfolio)
Intermediate Global Income Fund
