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Prudential Global Limited Maturity Fund, Inc.
(formerly Prudential Short-Term Global Income Fund, Inc.)
(Limited Maturity Portfolio formerly Short-Term Global Income Portfolio)
(Global Assets Portfolio)
Supplement dated October 17, 1995
to Prospectus dated January 3, 1995
New Fund Name
The Board of Directors of Prudential Short-Term Global Income Fund, Inc. has
approved changes in certain investment policies of the Short-Term Global Income
Portfolio, such changes which are more fully described below. In connection with
these investment policy modifications, the Fund and such Portfolio have changed
their name to Prudential Global Limited Maturity Fund, Inc. and Limited Maturity
Portfolio, respectively.
Proposed Reorganization
The Board of Directors of Prudential Global Limited Maturity Fund, Inc. (the
Fund) has recently approved a proposal to sell the assets and liabilities of the
Fund's Global Assets Portfolio for shares of the Fund's Limited Maturity
Portfolio. Class A shares of the Global Assets Portfolio would be exchanged at
net asset value for Class A shares of equivalent value of Limited Maturity
Portfolio.
The transaction has been approved by the Fund's Board of Directors and is
subject to approval by the shareholders of the Global Assets Portfolio. It is
anticipated that the proxy statement/prospectus relating to the proposed
transaction will be mailed to Global Assets Portfolio shareholders in November
1995.
Under the terms of the proposal, shareholders of Global Assets Portfolio
would become shareholders of the Limited Maturity Portfolio. No sales charges
would be imposed on the proposed transfer. The Fund anticipates obtaining an
opinion of counsel that no gain or loss for federal income tax purposes would be
recognized by shareholders of either portfolio as a result of the proposed
transaction.
Global Assets Portfolio no longer accepts purchase orders of its Class A
shares, except for purchases by certain Retirement and Employee Plans
(excluding IRA accounts). Existing shareholders may continue to acquire shares
through dividend reinvestment. The current exchange privilege of obtaining
shares of other Prudential Mutual Funds and the current redemption privilege
for Global Assets Portfolio shareholders will remain in effect. Notwithstanding
the above exceptions, no shares may be acquired by any means beginning four
days prior to the date of closing of the proposed reorganization.
Limited Maturity Portfolio, formerly Short-Term Global Income Portfolio
The Board of Directors has approved changes in certain investment policies
which are effective immediately. In connection with such changes the Portfolio
has changed its name to Limited Maturity Portfolio. This name change reflects
the lengthening of the Portfolio's weighted average maturity from not more than
3 years, to more than 2, but less than 5 years. Other changes approved by the
Fund's Board of Directors are reflected below.
The following replaces the first paragraph under and supplements the
information in ``How the Fund Invests--Investment Objectives and Policies.''
The Limited Maturity Portfolio's investment objective is to maximize total
return, the components of which are current income and capital appreciation.
The Portfolio seeks to achieve its objective by investing primarily in a
portfolio of investment grade debt securities. The Portfolio will maintain a
weighted average maturity of more than 2, but less than 5 years, and the
maturity for any individual security will generally not exceed 10
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years. The Portfolio may also invest up to 15% of its total assets in
non-investment grade securities with a minimum rating of B (as determined by the
Standard & Poor's Ratings Group, Moody's Investors Services, Inc. or by another
nationally recognized statistical ratings organization, or if unrated, deemed to
be of equivalent quality by the Portfolio's investment adviser). Investment in
non-investment grade securities may entail additional risks to the Portfolio.
See ``How the Fund Invests--Risk Factors--Medium and Lower-Rated Securities.''
There is no assurance that the Portfolio will achieve its investment objective.
The Limited Maturity Portfolio will under normal circumstances invest in a
minimum of five different countries, and will invest at least 30% of its total
assets in securities denominated in U.S. Dollars and in cash, and at least 50%
of its total assets in Dollar Bloc currencies (U.S., Canada, Australia or New
Zealand). The Portfolio may invest 100% of its assets in securities denominated
in U.S. Dollars or in cash for temporary, extraordinary or emergency purposes.
The following supplements ``How the Fund Invests--Other Investments and
Investment Techniques.''
Zero Coupon Securities
The Limited Maturity Portfolio may invest up to 10% of its total assets in
zero coupon securities. Zero coupon securities are securities that are sold
at a discount to par value and on which interest payments are not made during
the life of the security. Upon maturity, the holder is entitled to receive the
par value of the security. While interest payments are not made on such
securities, holders of such securities are deemed to have received annually
``phantom income.'' The Portfolio accrues income with respect to these
securities prior to the receipt of cash payments. Zero coupon securities may be
subject to greater fluctuation in value and lesser liquidity in the event of
adverse market conditions than comparable rated securities paying cash interest
at regular intervals.
Convertible Securities
The Limited Maturity Portfolio may invest up to 5% of its total assets in
convertible securities. A convertible security is generally a corporate bond
(or preferred stock) which may be converted at a stated price within a
specified period of time into a certain quantity of the common stock of the
same or a different issuer. Convertible securities are senior to common stocks
in a corporation's capital structure, but are usually subordinated to similar
nonconvertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from a common stock but lower than
that afforded by a similar nonconvertible security), a convertible security
also affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation dependent upon a market price advance
in the convertible security's underlying common stock. The Portfolio may from
time to time hold common stock received upon the conversion of a convertible
security. The Portfolio does not intend to retain the common stock in its
portfolio and will sell it as soon as reasonably practicable. Convertible
securities also include preferred stock which technically is an equity
security.
In general, the market value of a convertible security is at least the
higher of its ``investment value'' (i.e., its value as a fixed-income security)
or its ``conversion value'' (i.e., its value upon conversion into its underlying
common stock). As a fixed-income security, a convertible security tends to
increase in market value when interest rates decline and tends to decrease in
value when interest rates rise. However, the price of a convertible security is
also influenced by the market value of the security's underlying stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of
the underlying stock declines.
Securities of Other Investment Companies
The Limited Maturity Portfolio may invest up to 5% of its total assets in
shares of closed-end investment companies or investment trusts. If the
Portfolio does invest in securities of other investment companies, shareholders
of the Portfolio may be subject to duplicate management and advisory fees.
MF950C-15
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