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Prudential Mutual Funds
Supplement dated November 14, 1996
The following information supplements the Statement of Additional
Information of each of the Funds listed below:
On October 30, 1996, shareholders voted for the proposals summarized below.
Election of Directors/Trustees
All Funds. The shareholders elected each of Edward D. Beach, Delayne Dedrick
Gold, Robert F. Gunia, Douglas H. McCorkindale, Donald D. Lennox, Mendel A.
Melzer, Thomas T. Mooney, Stephen P. Munn, Richard A. Redeker, Robin B. Smith,
Louis A. Weil, III and Clay T. Whitehead as Directors/Trustees of each of the
Funds.
Investments in Securities of Other Investment Companies
Prudential Equity Income Fund and Prudential Small Companies Fund, Inc. Each
Fund's investment restriction regarding the purchase of shares of investment
companies is modified to permit each Fund to invest up to 10% of its total
assets in the shares of other investment companies. Generally, the Funds will
not invest more than 5% of its total assets in such securities. To the extent
that a Fund does invest in securities of other investment companies,
shareholders may be subject to duplicate management and advisory fees.
Investment in Unseasoned Issuers
Prudential Equity Fund, Inc., Prudential Equity Income Fund, Prudential
Intermediate Global Income Fund, Inc., Prudential Jennison Series Fund, Inc. and
Prudential Small Companies Fund, Inc. The restriction regarding the purchase of
securities issued by unseasoned issuers (companies less than three years old) is
no longer fundamental and may, therefore, be modified or eliminated in the
future by the Board of Director/Trustees without shareholder approval.
Securities Lending
Prudential Equity Fund, Inc. and Prudential Multi-Sector Fund, Inc. Each
Fund's fundamental restriction regarding securities lending is modified to
permit each Fund to make loans of portfolio securities in amounts up to 30% of
the Fund's total assets.
Options on Stock and Stock Indices
Prudential Small Companies Fund, Inc. The Fund is permitted to purchase and
sell over-the-counter (OTC) options on stocks and options on stock indices in
addition to its current ability to purchase and sell options on (i) equity
securities that are traded on securities exchanges or (ii) stock indices that
are traded on national securities exchanges or listed on NASDAQ (listed
options). The Fund intends to use OTC options for the same purposes for which it
currently used, or considers for use listed options, namely to reduce certain
risks of its investments and to attempt to enhance return.
Foreign Currency Exchange Transactions
Prudential Small Companies Fund, Inc. The restrictions regarding the Fund's
ability to engage in foreign currency exchange transactions have been modified
to permit the Fund to hedge the foreign portion of its portfolio by entering
into forward foreign currency exchange contracts, options on foreign currencies
and futures contracts on foreign currencies and options thereon. Currently the
Fund is permitted to invest up to 15% of its total assets in foreign securities.
Participation in the options or futures markets involves investment risks
and transaction costs to which the Fund would not be subject absent the use of
these strategies. If the investment adviser's prediction of movements in the
direction of the securities and interest rate markets are inaccurate, the
adverse consequences to the Fund may leave the Fund in a worse position that if
such strategies were not used. Risks inherent in the use of options and futures
contracts and options on futures contracts include (1) dependence on the
investment adviser's ability to predict correctly movements in the direction of
interest rates, securities prices and markets; (2) imperfect correlation between
the price of options and stock index futures and options thereon and movements
in the prices of the securities being hedged; (3) the fact that skills needed to
use these strategies are different from those needed to select portfolio
securities; (4) the possible absence of liquid secondary market for any
particular instrument at any time; (5) the possible need to defer closing out
certain hedged positions to avoid adverse tax consequences; and (6) the possible
inability of the Fund to purchase or sell a portfolio security at a time that
otherwise would be favorable for it to do so, or the possible need for the Fund
to sell a portfolio security at a
disadvantageous time, due to the need for the Fund to maintain ``cover'' or to
segregate securities in connection with hedging transactions.
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Segregation of Assets
Prudential Equity Fund, Inc., Prudential Equity Income Fund, Prudential
Multi-Sector Fund, Inc., Prudential Small Companies Fund, Inc. and Prudential
Utility Fund, Inc.
In circumstances where a Fund's custodian maintains a segregated account
of the Fund for options transactions, futures contracts and options thereon
and/or forward foreign currency exchange contracts, the funds to be maintained
in a segregated account include cash, U.S. Government securities, equity
securities or other liquid, unencumbered assets, marked-to-market daily, having
a value equal to or greater than the Fund's commitments.
Listed below are the names of the Prudential Mutual Funds and the dates of
the Statements of Additional Information (SAI) to which this Supplement relates.
Name of Fund SAI Date
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Prudential Allocation Fund September 27, 1996
Prudential Equity Fund, Inc. March 1, 1996
Prudential Equity Income Fund January 2, 1996
Prudential Global Limited Maturity Fund, Inc. February 26, 1996
Prudential Intermediate Global Income Fund, Inc. March 1, 1996
Prudential Jennison Series Fund, Inc. September 12, 1996
Prudential Multi-Sector Fund, Inc. June 28, 1996
Prudential Small Companies Fund, Inc. November 29, 1995
Prudential Utility Fund, Inc. March 1, 1996
The Global Government Plus Fund, Inc. January 15, 1996
The Global Total Return Fund, Inc. January 15, 1996
MF 960C-7 (11/14/96)
