SEMI ANNUAL REPORT November 30, 1994
Prudential
Global Genesis Fund
(ICON)
(LOGO)
<PAGE>
Letter to Shareholders
January 9, 1995
Dear Shareholder:
Small stocks did not perform that well over the last six months -- both here
and abroad. The reason was rising interest rates. Smaller stocks are typically
more interest rate sensitive than stocks of larger companies, and they have
generally underperformed large stocks all year as rates were climbing.
We are disappointed to report that the Prudential Global Genesis Fund posted
negative returns for the six months ended November 30, 1994, and that those
losses are greater than those recorded by the average small company global
fund, as reported by Lipper Analytical Services, which is an internationally
known and independent mutual fund ratings service. The Fund did, however, post
modest gains for the last 12 months.
The Fund's Objective
The Prudential Global Genesis Fund seeks long-term growth of capital through
investment in a diversified portfolio composed primarily of common stocks of
smaller foreign and U.S. companies. The Fund also invests in common stock
equivalents and other equity securities. Investors should keep in mind that
there are special risks associated with foreign investing, such as currency
fluctuations, economic, political and social developments. These risks are
described in detail in the Fund's prospectus. Moreover, while the Fund has not
done so during this reporting period, it may occasionally use derivatives, like
options and futures among others.
The Market
Since the Federal Reserve began raising short-term interest rates early this
year, stock market investors around the world have seen rocky times. Global
investors were worried about the effectiveness of the Fed's policy against
inflation, as well as the U.S. economy's ability to maintain growth in the face
of stiffly higher interest rates. If the U.S. sinks back into recession, it is
likely the rest of world would follow suit.
-1-
<PAGE>
Those concerns are reflected in returns: the S&P 500, a weighted index
comprising 500 stocks which provide a broad indicator of stock prices
movements, was up a meager 0.81% for the six months ended November 30. The
Russell 2000, a widely regarded small stock index comprising 2000 small stocks,
was down -1.24%. The Morgan Stanley Capital International Index (MSCI), a
global large-cap index, gained a slight 0.39% over the same time period.
What we did well...
Early in 1994, we took some defensive measures to protect the Fund against
interest rate rises and resulting stock declines. Until September of this year,
we held 15% of the Fund's assets in cash.
Once the markets calmed down, we pursued the following investment themes:
- Restructuring in Europe. We continued to increase our exposure to Europe.
Industrial companies there are reporting improved earnings--a positive
sign since many of them produce the materials used to make consumer goods,
which indicates economic strength at the consumer level. We also
participated in Europe's economic recovery by investing in global
companies. One of our holdings, Sidel SA, a French machinery and
engineering company, has received a tremendous number of orders out of
Latin America, Eastern Europe and Southeast Asia.
- Economic Growth in the Pacific Rim. Despite their lackluster performance
in 1994, we continue to focus on Southeast Asia's newly industrializing
nations for their unsurpassed economic growth potential. Now that these
stocks have become more affordable, we believe they may be poised for
gains in coming months.
...And where we could have done better
Interest rates aside, a few factors relating to specific Fund holdings also
contributed to our rather anemic performance this year.
We may have been a bit early in our commitment to stronger consumer spending
in Europe. While the current global recovery has been accompanied by a growing
demand for basic materials, we also figured that as these economies grew, a
rapid rise in consumer spending would follow. That's been slow to happen,
though. One of our holdings, Kong Wah Holdings, Ltd., a Chinese producer of
television sets for sale to China and also for European export, proved
particularly disappointing.
-2-
<PAGE>
Looking Ahead to 1995...
Looking ahead to the next 12 months, we expect small cap stocks outside the
U.S. to pick up steam. Worldwide economic growth is continuing at a steady
clip, which we expect will funnel over to stock prices in 1995. Interest rates
are holding back healthy returns, but we expect them to settle into a more
comfortable range early next year. In the meantime, we will continue to look
for small cap stocks with high growth potential, mostly outside the U.S.
In closing, we are realistic but optimistic. Despite weak performance over
the last six months, we believe there is an underlying tone of confidence in
the stock markets. We are pleased you've chosen the Prudential Global Genesis
Fund for your global small company investment.
Sincerely,
Lawrence C. McQuadex
President
Daniel J. Duanex
Portfolio Manager
Media Mention... The Prudential Global Genesis Fund was mentioned in Worth
Financial Investments in November.
-3-
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND Portfolio of Investments
November 30, 1994 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--88.3%
Common Stocks--79.7%
Australia--3.8%
2,074,300 AAPC, Ltd. .............. $ 1,147,528
(Merchandising)
1,650,000 Australia Media ......... 1,331,167
(Services)
2,190,000 Burswood Property Trust .. 2,002,397
(Leisure & tourism)
700,000 Publishing & Broadcasting, 1,882,458
Ltd. ..................
(Services)
2,324,600 Sea World Property, Ltd... 1,786,107
------------
(Leisure & tourism)
8,149,657
------------
Belgium--0.9%
25,000 Barco Industries N.V. ... 1,911,706
(Financial services) ------------
Denmark--1.1%
32,000 Danske Traelastko* ...... 2,419,512
(Services) ------------
Federal Republic of Germany--1.5%
3,565 Bilfinger & Berger AG ... 1,856,310
(Construction & housing)
2,153 Computer 2000 ........... 603,024
(Business & public
services)
1,271 Hornbach Baumarkt AG .... 647,252
(Merchandising) ------------
3,106,586
------------
France--5.7%
32,400 Lapeyre ................. 1,754,211
(Building & related
industries)
13,038 Manutan* ................ 1,003,947
(Merchandising)
30,712 Naf Naf ................. $ 1,908,993
(Merchandising)
13,600 Nrj SA .................. 1,438,352
(Services)
9,216 Plastic Omnium SA ....... 1,073,875
(Automobiles)
11,600 Rexel ................... 1,577,660
(Electronics)
16,100 Sidel SA ................ 3,271,083
(Machinery & ------------
engineering)
12,028,121
------------
Hong Kong--8.9%
3,430,000 Alco Holdings, Ltd. ..... 749,528
(Electronics)
3,400,000 Chen Hsong Holdings ..... 2,132,199
(Machinery)
14,994,000 CNT Group, Ltd. ......... 1,046,932
(Multi-industry)
4,764,000 Esprit Asia Holdings, Ltd. 2,063,591
(Services)
4,043,795 First Pacific Co., Ltd. .. 2,797,370
(Banking)
504,000 Guoco Group, Ltd. ....... 2,202,695
(Financial services)
6,593,000 Hung Hing Printing Group, 1,440,711
Ltd. .
(Broadcasting &
publishing)
1,350,000 Jinhui Shipping* ........ 1,991,250
(Transportation)
4,682,000 Kong Wah Holdings, Ltd. .. 496,423
(Electronics)
255,500 Liu Chong Hing Bank, Ltd.* 303,939
(Financial services)
2,555,000 Liu Chong Hing Investment, 2,527,315
Ltd.
(Real estate)
8,713,000 Techtronic Industries, Co. 1,070,282
------------
(Machinery &
engineering)
18,822,235
------------
</TABLE>
-4- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
India--0.3%
186,900 Videocon International, $ 794,325
Ltd. (ADR)* ------------
(Electronics)
Indonesia--1.0%
1,000,000 Putra Surya Per Kasa .... 1,377,062
(Multi-industry)
536,400 Sekar Laut* ............. 677,102
(Multi-industry) ------------
2,054,164
------------
Italy--0.8%
423,600 Sasib S.P.A. ............ 1,807,384
(Machinery) ------------
Japan--8.6%
87,000 Aiwa Co. ................ 2,110,690
(Appliances & household
durables)
2,800 Autobacs Seven Co. ...... 317,008
(Automotive)
100,000 Daikin Manufacturing Co... 2,163,255
(Materials)
24,000 Japan Associates Finance 3,299,469
Co. ...................
(Financial services)
90,000 Kato Denki Co. .......... 2,392,722
(Merchandising)
87,000 Kokusai Securities Co., 1,275,208
Ltd. ..................
(Financial services)
5,000 Misumi Corp. ............ 192,944
(Services)
57,200 Nichiei Co. ............. 3,238,009
(Financial services)
64,300 Nissen Co., Ltd. ........ 2,183,957
(Merchandising)
11,400 Tsutsumi Jewelry, Ltd. .. 1,049,826
------------
(Merchandising)
18,223,088
------------
Korea--5.6%
33,553 Chung Ho Computer* $ 2,270,809
(Rights) ..............
(Electronics)
11,330 Daewoo Securities Co., 510,752
Ltd.* .................
(Financial services)
9,560 Daishin Securities* ..... 198,515
(Financial services)
65,028 Hanjin Heavy Industries* . 1,014,784
(Transportation /
shipping)
70,000 Hanwha Chemical Corp.* .. 1,700,227
(Chemicals)
3,840 Kyungwon Century* ....... 158,510
(Consumer durable goods)
1,500 Mando Machinery Corp.* ... 110,055
(Automotive parts)
12,005 Samsung Electronics Co. .. 1,909,440
(Electronics)
25,300 Shinwon Corp.* .......... 1,235,389
(Textiles & apparel)
87,500 Shinyoung Wacoal* ....... 2,774,981
(Financial services) ------------
11,883,462
------------
Malaysia--6.7%
138,000 Berjaya South Island 1,042,141
Berhad ................
(Prime utilities)
738,000 Federal Furniture Holdings 1,160,840
(Appliances & household
durables)
350,000 Gadek Berhad ............ 2,122,706
(Machinery)
678,000 Hock Hua Bank Berhad .... 2,002,935
(Banking)
456,000 Malayan Cement Berhad
Class B ............... 784,650
(Building & related
industries)
509,500 Malayan Cement Berhad ... 877,177
(Building & related
industries)
</TABLE>
-5- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Malaysia--(cont'd)
686,000 Minho Berhad* ........... $ 1,436,045
(Forest products)
1,000 Multi-Purpose Holdings 1,463
Berhad .
(Multi-industry)
406,500 Park May Berhad ......... 1,105,441
(Transportation /
shipping)
374,000 Resorts World ........... 2,121,924
(Leisure & tourism)
438,000 Technology Resources
Industries Berhad* .... 1,491,020
(Data processing & ------------
reproduction)
14,146,342
------------
Mexico--1.2%
Grupo Financiero Banamex
Accival, S.A. de C.V.
175,100 Class C (Old)............. 1,232,704
6,460 Class L (New) ........... 43,223
(Banking)
53,000 Grupo Simec (ADR)* ...... 1,219,000
(Metals) ------------
2,494,927
------------
Netherlands--1.7%
44,000 Randstad Holdings* ...... 2,216,196
(Business & public
services)
67,650 Royal Boskalis Westminster 1,369,114
N.V.* ------------
(Construction & housing)
3,585,310
------------
New Zealand--0.8%
379,000 Fletcher Challenge, Ltd. 952,578
.......................
(Forest products)
616,000 Fletcher Forestry, Ltd. .. 716,068
------------
(Forest products)
1,668,646
------------
Singapore--6.3%
310,000 Jurong Engineering, Ltd. . 2,021,509
(Machinery)
1,902,000 QAF, Ltd. ............... $ 2,155,903
(Food & household
products)
263,000 Robinson & Co. .......... 1,122,397
(Merchandising)
459,250 Sembawang Maritime, Ltd. . 2,163,759
(Transportation /
shipping)
835,000 Singapore Finance, Ltd. .. 1,459,611
(Financial services)
1,114,000 Tiger Medicals, Ltd. .... 1,232,284
(Health & personal care)
1,873,000 Wing Tai Holdings ....... 3,261,283
(Multi-industry) ------------
13,416,746
------------
Spain--3.5%
18,000 Acerinox S.A. ........... 1,956,895
(Metals-steel)
Acerinox S.A.
1,800 (Rights) ................ 109,861
(Metals-steel)
17,200 Azkoyen S.A. ............ 1,089,147
(Machinery &
engineering)
96,725 Centros Commerciales 1,564,425
(Pryca) ...............
(Merchandising)
19,670 Construcciones y Aux Ferr 1,146,510
(Construction & housing)
23,520 Cubiertas Y Mzov ........ 1,650,841
(Multi-industry) ------------
7,517,679
------------
Sweden--3.0%
176,000 Allgon AB ............... 3,104,901
(Data processing &
reproduction)
63,800 Celsius Industriar AB ... 1,548,657
(Construction & housing)
34,650 Hennes & Mauritz B Free .. 1,801,659
------------
(Merchandising)
6,455,217
------------
</TABLE>
-6- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Thailand--0.4%
49,201 Land & House Public Co., $ 887,619
Ltd. . ------------
(Construction & housing)
United Kingdom--6.8%
680,000 BBA Group PLC ........... 2,182,319
(Industrial components)
270,000 Capital Radio PLC* ...... 1,411,776
(Consumer electronics)
244,900 Dorling Kindersley 1,104,172
Holdings, Ltd.
(Broadcasting &
publishing)
259,400 Lloyds Chemists PLC ..... 1,279,193
(Health & personal care)
1,000,000 Morrison Supermarket .... 2,144,747
(Food & household
products)
265,100 Powerscreen International 1,132,995
(Construction & housing)
250,000 Smith Holdings .......... 2,074,299
(Forest products)
1,052,000 Telewest Communications 3,096,200
PLC* . ------------
(Telecommunications)
14,425,701
------------
United States--11.1%
122,800 Adaptec, Inc.* .......... 2,701,600
(Electronics)
145,000 Adflex Solutions, Inc.* .. 2,193,125
(Electronics)
108,000 ADVO, Inc. .............. 1,930,500
(Advertising)
42,300 Cirrus Logic, Inc.* ..... 1,068,075
(Electronics)
100,000 Coram Healthcare Corp.* .. 1,687,500
(Health care services)
50,000 Electroglas, Inc. ....... $ 1,875,000
(Electronics)
61,600 Electronic Arts, Inc.* ... 1,224,300
(Recreation & other
consumer goods)
25,000 Fritz Companies, Inc.* .. 1,131,250
(Transportation /
shipping)
83,500 Haverty Furniture Cos., 1,148,125
Inc. ..................
(Merchandising)
61,600 Holophone Corp.* ........ 970,200
(Electronics)
56,100 Jacobs Engineering Group,
Inc.*
(Rights) ................
(Machinery &
engineering)
1,065,900
111,000 NEXTEL Communications, 1,970,250
Inc.* .
(Telecommunications)
33,000 Parcplace Systems, Inc.* . 635,250
(Data processing &
reproduction)
157,000 Sinter Metals, Inc.* .... 1,550,375
(Materials)
45,200 T. Rowe Price & Assoc., 1,322,100
Inc. ..................
(Financial services)
115,000 Western National Corp. ... 1,207,500
------------
(Insurance)
23,681,050
------------
Total common stocks
(cost US$164,695,871)... 169,479,477
------------
Preferred Stocks--5.4%
Finland--3.0%
47,600 Nokia Corp. ............. 6,507,277
(Television & ------------
electronics)
Federal Republic of Germany--1.7%
2,110 Hornbach AG ............. 1,907,254
(Merchandising)
8,500 Jungheinrich PFD ........ 1,812,597
(Machinery) ------------
3,719,851
------------
</TABLE>
-7- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Korea--0.7%
19,000 Daishin Securities Co.* .. $ 272,590
(Financial services)
17,890 Hanwha Chemical Corp.* .. 274,676
(Chemicals)
19,200 Mando Machinery Corp.* .. 840,876
------------
(Automotive parts)
1,388,142
------------
Total preferred stocks
(cost US$6,582,407)....... 11,615,270
------------
Depository Receipts--1.9%
India--1.1%
196,000 Gujarat Narmada Valley 2,254,000
Fertilizers ------------
(Materials)
United States--0.8%
47,000 Bajaj Auto, Ltd.* ....... 1,210,250
(Consumer durable goods)
19,000 PT Indonesia Satellite 501,125
(ADR)* ................ ------------
(Telecommunications)
1,711,375
------------
Total depository receipts
(cost US$4,125,640)..... 3,965,375
------------
Warrants*--0.5%
<CAPTION>
Warrants France
- -----------
<C> <S> <C>
Naf Naf
3,412 expiring Feb. '98 @ FF 460 11,522
. ------------
(Merchandising)
Japan--0.3%
Nissen Co., Ltd.
218 expiring Nov. '96 @(YEN) 242,847
1,681 .................
(Merchandising)
Nitori Co.
3,300 expiring Feb. '98 @(YEN) 461,851
3,268 ................. ------------
(Merchandising)
704,698
------------
Korea--0.1%
Hanjin Heavy Industries,
Co.
17,980 expiring Jan.'95 @ KRW $ 174,234
7,700 ------------
(Transportation /
shipping)
Malaysia
Multi-Purpose Holdings
Berhad
66,600 expiring May '99 @ MYR 52,640
4.00 ------------
(Consumer goods)
Singapore--0.1%
QAF, Ltd.
403,200 expiring Nov. '98 @ SGD 240,901
1.00 ------------
(Food & household
products)
Total warrants
(cost US$877,855)....... 1,183,995
------------
<CAPTION>
Principal
Amount Corporate Bonds--0.8%
(000) India--0.6%
- -----------
<C> <S> <C>
Gujarat Ambuja Cement CV*
USD 750 3.50%, 6/30/99 .......... 1,278,750
(Building & related ------------
industries)
Singapore--0.2%
QAF, Ltd.
Loan Stock
SED 201,600# 2.00%, 11/3/98 .......... 108,750
(Food & household
products)
Sembawang Maritime, Ltd.
SED 173,000 Convertible unsecured loan
stock 1.50%, 10/25/98 ..
263,427
(Transportation / ------------
shipping)
372,177
------------
Total corporate bonds
(cost US$1,111,674)..... 1,650,927
------------
Total long-term
investments
(cost US$177,393,447)... 187,895,044
------------
</TABLE>
-8- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
SHORT-TERM INVESTMENTS--2.6%
Repurchase Agreement--2.6%
Joint Repurchase Agreement
Account,
$5,511 5.69%, 12/1/94
(cost US$5,511,000; Note
5)...................... $ 5,511,000
------------
Total Investments--90.9%
(cost US$182,904,447; Note
4)...................... 193,406,044
Other assets in excess of
liabilities--9.1%......... 19,273,079
------------
Net Assets--100%.......... $212,679,123
------------
------------
</TABLE>
- ---------------
* Non-income producing security.
ADR--American Depository Receipt.
# Loan stock unit (each unit is comprised of two
warrants and principal amount of bond).
-9- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
Assets November 30, 1994
-----------------
<S> <C>
Investments, at value (cost $182,904,447)............................................. $193,406,044
Foreign currency, at value (cost $23,212,348)......................................... 23,149,301
Cash.................................................................................. 190,160
Receivable for investments sold....................................................... 2,746,117
Receivable for foreign currency....................................................... 1,488,489
Receivable for Fund shares sold....................................................... 494,476
Dividends and interest receivable..................................................... 271,468
------------------
Total assets...................................................................... 221,746,055
------------------
Liabilities
Payable for investments purchased..................................................... 4,857,613
Payable for Fund shares reacquired.................................................... 2,432,745
Payable for foreign currency.......................................................... 1,488,489
Due to Distributors................................................................... 162,431
Due to Manager........................................................................ 90,144
Withholding taxes payable............................................................. 18,441
Deferred Thailand capital gains tax liability......................................... 17,069
------------------
Total liabilities................................................................. 9,066,932
------------------
Net Assets............................................................................ $212,679,123
------------------
------------------
Net assets were comprised of:
Common stock, at par................................................................ $ 121,534
Paid-in capital in excess of par.................................................... 199,706,590
------------------
199,828,124
Undistributed net investment income................................................. 200,928
Accumulated net realized gain on investment and foreign currency transactions....... 2,223,665
Net unrealized appreciation on investment and foreign currency transactions......... 10,426,406
------------------
Net assets, November 30, 1994....................................................... $212,679,123
------------------
------------------
Class A:
Net asset value and redemption price per share
($29,512,226 / 1,644,560 shares of common stock issued and outstanding)........... $17.95
Maximum sales charge (5% of offering price)......................................... .94
------------------
Maximum offering price to public.................................................... $18.89
------------------
------------------
Class B:
Net asset value, offering and redemption price per share
($182,251,890 / 10,456,298 shares of common stock issued and outstanding)......... $17.43
------------------
------------------
Class C:
Net asset value, offering price and redemption price per share
($915,007 / 52,496 shares of common stock issued and outstanding)................. $17.43
------------------
------------------
</TABLE>
See Notes to Financial Statements.
-10-
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
November 30,
Net Investment Loss 1994
------------
<S> <C>
Income
Dividends (net of foreign
withholding taxes of $129,107).... $ 1,211,724
Interest (net of foreign withholding
taxes of $390).................... 227,646
------------
Total income...................... 1,439,370
------------
Expenses
Distribution fee--Class A........... 36,867
Distribution fee--Class B........... 933,196
Distribution fee--Class C........... 1,735
Management fee, net of waiver of
$541,200.......................... 541,200
Custodian's fees and expenses....... 226,000
Transfer agent's fees and
expenses............................ 185,000
Registration fees................... 45,000
Audit fee........................... 30,000
Reports to shareholders............. 20,000
Directors' fees..................... 13,000
Legal fees.......................... 13,000
Miscellaneous....................... 5,116
------------
Total expenses.................... 2,050,114
------------
Net investment loss................... (610,744)
------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on:
Investments......................... 3,102,437
Foreign currency transactions....... 406,446
------------
3,508,883
------------
Net change in unrealized
appreciation/depreciation on:
Investments (net of deferred
Thailand capital gains tax of
$17,069).......................... (12,169,840)
Foreign currency transactions....... 46,738
------------
(12,123,102)
------------
Net loss on investments and foreign
currencies.......................... (8,614,219)
------------
Net Decrease in Net Assets
Resulting from Operations............. $ (9,224,963)
------------
------------
</TABLE>
PRUDENTIAL GLOBAL GENESIS FUND
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) November 30, May 31,
in Net Assets 1994 1994
------------ ------------
<S> <C> <C>
Operations
Net investment
(loss)................. $ (610,744) $ (960,289)
Net realized gain on
investment and
foreign currency
transactions......... 3,508,883 1,075,107
Net change in
unrealized
appreciation/depreciation
of investments and
foreign currencies... (12,123,102) 14,010,981
------------ ------------
Net increase/decrease
in net assets
resulting from
operations........... (9,224,963) 14,125,799
------------ ------------
Net equalization
credits................ 17,329 --
------------ ------------
Dividends to
shareholders in
excess of net
investment income
(Note 1)
Class A.............. (107,971) (49,552)
Class B.............. -- (148,112)
Class C.............. -- --
------------ ------------
(107,971) (197,664)
------------ ------------
Distributions to
shareholders from net
realized gains on
investment and
foreign currency
transactions
Class A.............. (46,273) (192,564)
Class B.............. (303,736) (1,141,075)
Class C.............. (370) --
------------ ------------
(350,379) (1,333,639)
------------ ------------
Fund share transactions
(Note 6)
Net proceeds from
shares subscribed.... 100,677,883 228,856,244
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends
and distributions.... 427,844 1,453,440
Cost of shares
reacquired............. (82,641,046) (78,594,707)
------------ ------------
Net increase in net
assets from Fund
share transactions... 18,464,681 151,714,977
------------ ------------
Total increase........... 8,798,697 164,309,473
Net Assets
Beginning of period...... 203,880,426 39,570,953
------------ ------------
End of period............ $212,679,123 $203,880,426
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
-11-
<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 which it seeks to achieve by
investing primarily in equity securities of foreign and domestic companies with
market capitalizations of less than U.S. $1 billion, as measured at time of
purchase.
Note 1. Accounting The following is a summary
Policies of significant 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 or designated
subcustodians, as the case may be under triparty repurchase agreements, 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.
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 daily 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 year, 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 fiscal year end. 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 year.
Net realized gain on foreign currency transactions of $406,446 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 unrealized currency gains and losses from valuing foreign
currency denominated assets and liabilities (other than investments) at fiscal
year end exchange rates are reflected as a component of net unrealized
depreciation 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 the regulation of foreign securities
markets.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
currency transactions 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 each class of shares of the Fund
based upon the relative proportion of net assets of each class at the beginning
of the day.
-12-
<PAGE>
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 of wash sales, passive investment companies, and foreign currencies
transactions.
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the A.I.C.P.A.'s Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. For the six months ended November 30, 1994, the Fund increased
undistributed net investment income by $406,446, and decreased accumulated net
realized gain on investments by $406,446. Net realized gains and net assets
were not 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 six
months ended November 30, 1994, PMF voluntarily waived 50% of its management
fee. For the six months ended November 30, 1994, management fees waived amounted
to $541,200 ($.05 per share and .25% 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 Prudential Securities Incorporated (``PSI''), which acts
as distributor of the Class B shares and Class C shares of the Fund
(collectively the ``Distributors''). The Fund compensates the Distributors for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution, (the ``Class A, B and C Plans'') regardless
of expenses actually incurred by them. The distribution fees are accrued daily
and payable monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B Plans under which the distribution plans became compensation plans,
effective August 1, 1994. Prior thereto, the distribution plans were
reimbursement plans, under which PMFD and PSI were reimbursed for expenses
actually incurred by them up to the amount permitted under the Class A and Class
B Plans, respectively. The Fund is not obligated to pay any prior or future
excess distribution costs (costs incurred by the Distributors in excess of
distribution fees paid by the Fund or contingent deferred sales charges received
by the Distributors). The rate of the distribution fees charged to Class A and
Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, 1% and
1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .25% of 1%, 1% and 1% of the
average daily net assets of the Class A, B and C shares, respectively, for the
six months ended November 30, 1994.
PMFD has advised the Fund that it has received approximately $152,000 in
front-end sales charges resulting from sales of Class A shares during the six
months ended November 30, 1994. From these fees, PMFD paid such sales charges to
PSI and PRUCO Securities Corporation, affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.
PSI advised the Fund that for the six months ended November 30, 1994, it
received approximately $291,000 in contingent deferred sales charges imposed
upon certain redemptions by Class B and Class C shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are (indirect)
wholly-owned subsidiaries of The Prudential Insurance Company of America.
(``Prudential'')
-13-
<PAGE>
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
With Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the six months ended November 30, 1994, the Fund incurred fees of
approximately $184,000 for the services of PMFS. As of November 30, 1994,
approximately $30,000 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.
Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments, for the six months ended
November 30, 1994 aggregated $83,974,666 and $71,046,401, respectively.
The federal income tax basis of the Fund's investments at November 30, 1994
was $182,905,435 and accordingly, net unrealized appreciation for federal income
tax purposes was $10,500,609 (gross unrealized appreciation--$26,329,562; gross
unrealized depreciation--$15,828,953).
Note 5. Joint The Fund, along with other
Repurchase affiliated registered invest-
Agreement Account ment 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. At November 30, 1994, the Fund had a 0.73% undivided interest in
the repurchase agreements in the joint account. The undivided interest for the
Fund represented $5,511,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the value of the collateral
therefor were as follows:
Goldman, Sachs & Co., 5.70%, in the principal amount of $250,000,000,
repurchase price $250,039,583, due 12/1/94. The value of the collateral
including accrued interest is $255,000,187.
Morgan (J.P.) Securities Inc., 5.68%, in the principal amount of
$200,000,000, repurchase price $200,031,556, due 12/1/94. The value of the
collateral including accrued interest is $204,329,069.
Morgan Stanley & Co. Inc., 5.68%, in the principal amount of $200,000,000,
repurchase price $200,031,556, due 12/1/94. The value of the collateral
including accrued interest is $204,148,271.
Smith Barney, Inc., 5.72%, in the principal amount of $100,000,000,
repurchase price $100,015,889, due 12/1/94. The value of the collateral
including accrued interest is $102,000,653.
Note 6. Capital The Fund offers Class A,
Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing on or about February 1995. The Fund has
authorized 500 million shares of common stock at $.01 par value per share
equally divided into three classes, designated Class A, Class B and Class C
common stock.
-14-
<PAGE>
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- -------------------------------- ---------- ------------
<S> <C> <C>
Six months ended November 30,
1994:
Shares sold..................... 1,710,831 $ 32,202,582
Shares issued in reinvestment of
dividends and distributions... 7,157 138,849
Shares reacquired............... (1,631,903) (30,886,573)
---------- ------------
Net increase in shares
outstanding................... 86,085 $ 1,454,858
---------- ------------
---------- ------------
Year ended May 31, 1994:
Shares sold..................... 3,021,009 $ 55,660,417
Shares issued in reinvestment of
dividends and distributions... 12,903 226,280
Shares reacquired............... (1,699,370) (32,003,995)
---------- ------------
Net increase in shares
outstanding................... 1,334,542 $ 23,882,702
---------- ------------
---------- ------------
Class B
- -------
Six months ended November 30,
1994:
Shares sold..................... 3,640,343 $ 67,414,784
Shares issued in reinvestment of
dividends and distributions... 15,287 288,625
Shares reacquired............... (2,785,539) (51,667,104)
---------- ------------
Net increase in shares
outstanding................... 870,091 $ 16,036,305
---------- ------------
---------- ------------
Year ended May 31, 1994:
Shares sold..................... 9,682,744 $173,195,827
Shares issued in reinvestment of
dividends and distributions... 71,710 1,227,160
Shares reacquired............... (2,588,620) (46,590,712)
---------- ------------
Net increase in shares
outstanding................... 7,165,834 $127,832,275
---------- ------------
---------- ------------
Class C
- -------
August 1, 1994 through
November 30, 1994:*
Shares sold..................... 57,227 $ 1,060,517
Shares issued in reinvestment of
dividends and distributions... 20 370
Shares reacquired............... (4,751) (87,369)
---------- ------------
Net increase in shares
outstanding................... 52,496 $ 973,518
---------- ------------
---------- ------------
</TABLE>
- ---------------
* Commencement of offering of Class C shares.
-15-
<PAGE>
PRUDENTIAL GLOBAL GENESIS FUND
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------------------------------------------- -----------------------
January 22, Year
Six Months 1990@ Six Months Ended
Ended Year Ended May 31, through Ended May 31,
PER SHARE OPERATING November 30, -------------------------------------------------- May 31, November 30, --------
PERFORMANCE: 1994(D)(D) 1994(D)(D) 1993(D)(D) 1992(D)(D) 1991 1990 1994(D)(D) 1994(D)(D)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------ ------- ------- ------- ------ ----------- ------------ --------
Net asset value,
beginning of
period............. $ 18.75 $ 15.34 $12.62 $11.95 $12.62 $ 12.41 $ 18.22 $ 14.93
------ ------- ----- ----- ------ ------ ------------ --------
Income from
investment
operations
Net investment
income (loss)(D)... .01 (.03) .10 .02 (.03) (.04) (.06) (.16)
Net realized and
unrealized gain
(loss) on
investment and
foreign currency
transactions....... (.71) 3.83 2.62 .65 (.64) .25 (.70) 3.74
------ ------- ----- ----- ------ ----- ------- ------
Total from
investment
operations....... (.70) 3.80 2.72 .67 (.67) .21 (.76) 3.58
------ ------- ----- ----- ----- ------- ------
Less distributions
Dividends in excess
of net investment
income............. (.07) (.15) -- -- -- -- -- (.05)
Distributions paid
to shareholders
from net realized
gains on investment
and foreign
currency
transactions....... (.03) (.24) -- -- -- -- (.03) (.24)
------ ------- ----- ----- ----- ---------- ---------
Total
distributions...... (.10) (.39) -- -- -- -- (.03) (.29)
------ ------- ----- ----- ------ ----- ---------- ---------
Net asset value, end
of period.......... $ 17.95 $ 18.75 $15.34 $12.62 $11.95 $ 12.62 $ 17.43 $ 18.22
------ ------- ----- ------ ------- ------ ---------- ---------
TOTAL RETURN (1):... (3.77)% 25.09% 21.55% 5.61% (5.31)% 1.69% (4.18)% 24.16%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)....... $ 29,512 $29,221 $3,435 $3,829 $4,059 $ 2,137 $182,252 $174,659
Average net assets
(000).............. $ 29,413 $16,909 $3,106 $3,771 $2,569 $ 1,204 $185,129 $102,451
Ratios to average
net assets:#
Expenses, including
distribution
fees(D).......... 1.25%** 1.48% 1.49% 1.50% 2.72% 3.90%** 2.00%** 2.25%
Expenses, excluding
distribution
fees(D).......... 1.00%** 1.25% 1.29% 1.30% 2.52% 3.70%** 1.00%** 1.25%
Net investment
income
(loss)(D)........ 0.07%** (0.17)% .79% .19% (.61)% (1.71)%** (0.66)%** (0.91)%
Portfolio turnover
rate............... 34% 31% 67% 57% 95% 72% 34% 31%
- ---------------
<CAPTION>
Class C
------------
August 1,
1994*
Through
PER SHARE OPERATING November 30,
PERFORMANCE: 1993(D)(D) 1992(D)(D) 1991 1990 1994(D)(D)
<S> <C> <C> <C> <C> <C>
-------- ------ ------- ------- ------------
Net asset value,
beginning of
period............. $ 12.38 $ 11.82 $ 12.58 $ 12.28 $18.44
------ ------ ----- ------- ---------
Income from
investment
operations
Net investment
income (loss)(D)... -- (.07) (.15) (.14) (.06)
Net realized and
unrealized gain
(loss) on
investment and
foreign currency
transactions....... 2.55 .63 (.61) 1.30 (.92)
------ ------ ------- ------- ------
Total from
investment
operations....... 2.55 .56 (.76) 1.16 (.98)
------ ------ ------ ----- ------
Less distributions
Dividends in excess
of net investment
income............. -- -- -- -- --
Distributions paid
to shareholders
from net realized
gains on investment
and foreign
currency
transactions....... -- -- -- (.86) (.03)
------ ------ ----- ------- -------
Total
distributions...... -- -- -- (.86) --
------ ------ ----- ------- --------
Net asset value, end
of period.......... $ 14.93 $ 12.38 $ 11.82 $ 12.58 $17.43
------ ------ ----- ------- --------
------ ------ ----- ------- --------
TOTAL RETURN (1):... 20.60% 4.74% (6.04)% 9.72% (5.22)%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)....... $ 36,136 $ 35,644 $40,200 $39,868 $ 915
Average net assets
(000).............. $ 31,561 $ 37,236 $37,689 $26,161 $ 528
Ratios to average
net assets:#
Expenses, including
distribution
fees(D).......... 2.29% 2.30% 3.48% 3.66% 2.00%**
Expenses, excluding
distribution
fees(D).......... 1.29% 1.30% 2.48% 2.70% 1.00%**
Net investment
income
(loss)(D)........ (.01)% (.57)% (1.45)% (1.76)% (1.21)%**
Portfolio turnover
rate............... 67% 57% 95% 72% 34%
- ---------------
</TABLE>
@ Commencement of offering of Class A shares.
* Commencement of offering of Class C shares.
** Annualized.
(D) Net of expense subsidies and/or fee waivers (all reported periods except
1991).
(D)(D) Calculated based upon average shares outstanding during the fiscal
period.
# Because of the event referred to in * and the timing of such, the ratios
for Class C shares are not necessarily comparable to that of Class A or
Class B shares and are not necessarily indicative of future ratios.
(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.
See Notes to Financial Statements.
-16-
<PAGE>
(CHARTS)
For more complete information on any of the funds, including
charges and expenses, ask your Prudential Securities Financial
Advisor, your Pruco Securities Registered Representative, or call
1-800-225-1852 for a free prospectus. Please read the prospectus
carefully before you invest or send money.
744333105 MF 136E
744333204 Prudential Mutual Fund Management (LOGO) Cat #430150J
