(ICON)
Prudential
Global
Limited
Maturity
Fund, Inc.
Limited Maturity
Portfolio
SEMI
ANNUAL
REPORT
April 30, 1996
(LOGO)
<PAGE>
Prudential Global Limited Maturity Fund, Inc.
Limited Maturity Portfolio
Performance At A Glance.
Global bonds benefited from slow worldwide economic growth late in 1995, but
signs of developing strength in the U.S. economy early in 1996 raised fears
of inflation and weakened bond prices. The Prudential Global Limited Maturity
Fund: Limited Maturity Portfolio provided solid returns for the six-month period
ended April 30, 1996, performing better than the general world income and short
world income fund averages measured by Lipper Analytical Services.
Cumulative Total Returns1 As of 4/30/96
<TABLE>
<CAPTION>
Six One Five Since
Months Year Years Inception2
<S> <C> <C> <C> <C>
Class A 5.5% 10.0% 23.4% 29.5%
Class B 5.2 9.2 19.2 24.5
Class C 5.2 9.2 N/A 10.8
Lipper General World Universe Avg3 4.0 10.4 44.6 46.8
Lipper Short World Multi Mkt Avg3 3.9 9.0 20.6 23.0
</TABLE>
Average Annual Total Returns1 As of 3/31/96
<TABLE>
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 6.2% 3.7% 4.0%
Class B 5.7 3.5 3.9
Class C 7.7 N/A 5.5
</TABLE>
<TABLE>
<CAPTION>
Total Dividends 30-Day
Paid for Six Mos. SEC Yield
<S> <C> <C>
Dividends
& Yields Class A $0.29 6.13%
As of Class B $0.26 5.72
4/30/96 Class C $0.26 5.85
</TABLE>
Past performance is not indicative of future results. Total return and principal
will fluctuate so that an investor's shares, when redeemed, may be worth more
or
less than their original cost.
1Source: Prudential Mutual Fund Management and Lipper Analytical Services. The
cumulative total returns do not take into account sales charges. The average
annual total returns do take into account sales charges. The Fund charges a
maximum front-end sales load of 3% for Class A shares. Class B shares are
subject to a declining contingent deferred sales charge (CDSC) of 3%, 2%, 1%
and 1% over four years. Class C shares have a 1% CDSC for one year. Class B
shares will automatically convert to Class A shares on a quarterly basis after
approximately five years.
2Inception dates: 11/1/90 for Class A and Class B shares; 8/1/94 for Class C
shares.
3This is the General World Universe Average of 163 funds for six months, 150
funds for one year, 34 funds for five years and 30 funds since inception of
the Class A and Class B shares on 11/1/90 as measured by Lipper Analytical
Services. Also listed is the Lipper Short World Multi Market Average for 34
funds for six months, 34 funds for one year, 13 funds for five years and 10
funds since inception of Class A and B shares on 11/1/90.
How Investments Compared.
(As of 4/30/96)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial markets change, so a mutual fund's
past performance should never be used to predict future results. The risks to
each of the investments listed above are different -- we provide 12-month total
returns for several Lipper mutual fund categories to show you that reaching for
higher yields means tolerating more risk. The greater the risk, the larger the
potential reward or loss. In addition, we've included historical 20-year average
annual returns. These returns assume the reinvestment of dividends.
U.S. Growth Funds will fluctuate a great deal. Investors have received higher
historical total returns from stocks than from most other investments. Smaller
capitalization stocks offer greater potential for long-term growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than stock funds, which can help smooth
out their total returns year by year. But their prices still fluctuate
(sometimes significantly) and their returns have been historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds issued by state governments, state
agencies and/or municipalities. This investment provides income that is usually
exempt from federal and state income taxes.
Money Market Funds attempt to preserve a constant share value; they don't
fluctuate much in price but, historically, their returns have been generally
among the lowest of the major investment categories.
<PAGE>
Gabriel Irwin and Simon Wells, Fund Managers
(PHOTO)
Portfolio
Managers' Report
The Portfolio invests in debt securities denominated in the U.S. dollar and a
range of foreign currencies. The Portfolio's weighted average maturity is more
than two years but less than five years, with each security generally maturing
in no more than 10 years. The Portfolio may invest up to 20% of total net assets
in securities rated B or below investment grade. The Portfolio is
non-diversified, meaning it may invest more than 5% of its total assets in the
securities of one or more issuers. This carries greater risk than investments
held in a more diversified portfolio.
(PHOTO)
Strategy Session.
Short-term interest rates worldwide held steady or fell during the last six
months, while longer-term rates generally rose sharply worldwide this spring.
The rise in long-term interest rates was most pronounced in the United States,
where the 10-year U.S. government bond yield rose by more than one full
percentage point. Non-U.S. bonds generally performed better, particularly those
issued in the southern European countries, such as Italy and Spain, as the
outlook for the European Monetary Union (EMU) strengthened and inflation fell.
For example, in the first quarter, Italy had the strongest market, returning
2.9%, while the U.S. performed poorly, losing 1.9%.
We adjusted maturities and deployed assets when we saw opportunity. We sold
some of our short-term securities in Australia, Canada and New Zealand and
bought higher-yielding U.S.-dollar denominated bonds with slightly longer
maturities. We also reduced our holdings in Irish securities to 7% of total
net assets on April 30, 1996, from 10% six months ago, and in the United
Kingdom, to 6% from 14%, after these bonds had appreciated substantially as
interest rates fell.
Some of these funds were reinvested in short-dated, Czech, Hungarian and Polish
securities which offered higher yields and new opportunity -- these markets
were just opening up to investors.
Our Dollar
Position.
As of April 30, 1996, the Prudential Global Limited Maturity Fund: Limited
Maturity Portfolio held nearly all of its total net assets in U.S. dollars or
dollar-bloc currencies in an attempt to avoid currency losses as the dollar
strengthened. Since the U.S. bond market has been difficult, our gains have
been in our foreign-currency denominated bonds. But these currencies have been
weakening against the dollar, so to protect our gains, we purchased contracts
to deliver the foreign currency in the future in exchange for dollars.
One-Third In U.S. Bonds.
Investments expressed as a percentage of total net assets as of 4/30/96.
(GRAPH)
<PAGE>
What Went Well.
We Increased Our
Dollar Bloc Holdings.
We continued to increase our dollar-bloc holdings to 54% of total net assets,
up from 43% on April 30, 1995, which helped performance. (dollar-bloc countries
are the U.S., Australia, Canada and New Zealand, and are so named because their
currencies tend to move in value with the U.S. dollar.) These currencies seemed
to be the strongest worldwide over the past six months, led by the Australian
dollar, which was helped by rising commodity prices. The U.S. dollar gained as
the U.S. economy strengthened and inflation remained low. The U.S. dollar
increased in value by nearly 20% over the Japanese Yen and between 5% and 10%
against the core European currencies since April 30, 1995. When the dollar
rises against another currency, foreign-denominated holdings fall in value,
which erodes returns for U.S. dollar-based investors.
And Not So Well.
We Should Have Bought
French Bonds.
Our performance would have been better if we had owned French bonds. We avoided
them because they were more expensive than German and Dutch bonds, and we
thought there was little likelihood that the French would comply with terms
of the Maastricht Treaty for European Monetary Union. (The treaty imposes
strict requirements for member countries' budget deficits, inflation, long-term
interest rates and currency stability). Despite this, the French market
outperformed others amid rising expectations that a political solution will be
found to achieve union.
Looking Ahead.
Inflation is the bond holder's enemy because it shrinks the value of the bond's
fixed stream of interest payments. Bond investors also prefer stable economic
growth because rapid growth can foster inflation. At the moment, our outlook
for both inflation and economic growth is mildly positive for the world bond
markets.
- - Inflation is subdued, especially in Japan and Europe. Inflation in the
European Union fell to 2.7% in February, a nine-year low. For example, in
Germany, inflation is now below 2%; in Italy, it is below 5.5% and in Spain it
is below 4%.
- - Economic growth varies worldwide. English-speaking countries, led by the
U.S., are growing steadily. Activity is not quite so robust in Japan and Europe,
where the central banks have been working for some time to stimulate their
economies. This is likely to increase fears of future inflation. But for now,
world bond markets offer very attractive rates of return, considering today's
level of inflation.
We also believe the U.S. dollar will perform well. We expect further narrowing
of the Japanese trade surplus, which helps our currency because it forces the
U.S. to sell fewer dollars to bring the account into balance. Plus, we see no
sign of a surge in imports into the U.S., and low interest rates in Japan and
Europe.
Five Largest
Issuers.
6.1% Denmark Bonds
Gov't Bonds
5.5% Ireland
Gov't Bonds
5.1% U.S. Treasury Notes
4.7% Canada
Gov't Bonds
4.7% Spain
Gov't Bonds
Expressed as a percentage of total net assets as of 4/30/96.
<PAGE>
President's LetterJune 3, 1996
(PHOTO)
Dear Shareholder:
Last year, U.S. stocks and bonds generally posted extraordinary returns.
Investors celebrated this performance by putting record amounts of new money
into mutual funds in the first few months of 1996. According to figures
released by the Investment Company Institute, a mutual fund industry trade
group, new investments in mutual funds reached an all-time monthly high of $33
billion in January of 1996. An additional $66 billion was invested in the
following three months.
While we are pleased that mutual funds are attracting new investors, we're
concerned that some of them may be "buying last year's returns." Few expect
1995's virtual non-stop returns from the stock and bond markets. In fact,
1996's markets have been volatile so far (stock and bond prices go down just
as they go up). There's no better time than now to be talking with your
Financial Advisor or Registered Representative. She or he can help you
determine reasonable expectations about both the potential performance and
risks associated with your investments.
Board of Directors Election.
Late this summer, we'll be sending you a notice about a special shareholder
meeting to elect new Prudential mutual fund boards of directors. Your Board
of Directors has approved a proposal to place a common board of experienced
directors across many of Prudential's mutual funds to improve business
efficiency. The materials you'll receive this summer will contain more
complete information about this proposal.
Changes at Prudential.
Finally, there have been some important changes recently at Prudential that
were made with you in mind. Prudential Mutual Funds has moved under the
umbrella of Prudential's newly created "Money Management Group." This group
manages and administers nearly $190 billion in client assets and provides
mutual funds, annuities, defined benefit and defined contribution plans to our
individual and institutional investors. We plan to improve the range and
quality of investment products and services that we can provide you by better
leveraging Prudential's strengths. There will, however, be no change in the
service you receive from your Financial Advisor, Registered Representative or
our Customer Service unit.
We're excited about our future and hope that you are, too. Thank you for your
continued support and confidence in Prudential Mutual Funds.
Sincerely,
Richard A. Redeker
President
<PAGE>
PRUDENTIAL GLOBAL LIMITED
Portfolio of Investments as of April 30, 1996 MATURITY FUND, INC.
(Unaudited) LIMITED MATURITY PORTFOLIO
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--71.4%
- ------------------------------------------------------------
Australia--6.6%
A$ 5,000 Queensland Treasury Corp.,
8.00%, 7/14/99 $ 3,895,976
5,000 South Australia Fin. Auth.,
12.50%, 10/15/00 4,506,260
------------
8,402,236
- ------------------------------------------------------------
Canada--5.9%
Canadian Gov't. Bonds,
C$ 3,000 6.25%, 2/1/98 2,211,651
5,000 7.50%, 3/1/01 3,733,838
2,000 Swedish National Hsg.,
8.00%, 12/18/97 1,509,698
------------
7,455,187
- ------------------------------------------------------------
Czech Republic--0.6%
CZK 10,370 Skoda Finance,
11.625%, 2/9/98 376,593
10,000 International Fin. Corp.,
10.50%, 11/30/98 362,616
------------
739,209
- ------------------------------------------------------------
Denmark--6.1%
Kingdom of Denmark,
DKr 15,000 7.00%, 8/15/97 2,627,631
30,000 7.00%, 12/15/04 5,068,065
------------
7,695,696
- ------------------------------------------------------------
Germany--3.7%
DM 1,000 Nacional Financier,
10.00%, 8/17/98 688,486
3,000 Republic Of Columbia,
7.25%, 12/21/00 1,991,133
$3,000 Tokyo Gas Co.,
7.00%, 7/27/05 $ 1,997,001
------------
4,676,620
- ------------------------------------------------------------
Ireland--5.3%
IEP 1,000 Euro Investor Bank,
7.75%, 8/5/03 1,600,683
Irish Gov't. Bonds,
1,500 9.75%, 6/1/98 2,506,521
1,500 9.25%, 7/11/03 2,612,948
------------
6,720,152
- ------------------------------------------------------------
Italy--2.8%
Lira 1,500,000 Abbey National Treasury,
10.00%, 8/24/00 971,912
4,000,000 Pepsico, Inc.,
11.375%, 2/13/98 2,642,834
------------
3,614,746
- ------------------------------------------------------------
Netherlands--4.3%
NLG 7,000 Dutch Gov't. Bonds,
6.50%, 4/15/03 4,227,969
2,000 Republic Of Argentina,
8.00%, 8/9/97 1,194,012
------------
5,421,981
- ------------------------------------------------------------
New Zealand--1.5%
NZ$ 2,750 New Zealand Gov't. Bonds,
10.00%, 7/15/97 1,904,950
- ------------------------------------------------------------
Poland--0.2%
PLN 750 General Electric Capital Corp.
18.25%, 2/27/98 281,483
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
Portfolio of Investments as of April 30, 1996 MATURITY FUND, INC.
(Unaudited) LIMITED MATURITY PORTFOLIO
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Spain--5.8%
Pts 180,000 Republic of Argentina,
12.80%, 12/9/97 $ 1,438,021
Spanish Gov't. Bonds,
400,000 11.45%, 8/30/98 3,369,992
300,000 10.30%, 6/15/02 2,518,539
------------
7,326,552
- ------------------------------------------------------------
United Kingdom--5.3%
BP 1,000 Halifax Building Society,
8.75%, 10/17/97 1,538,923
2,000 Kingdom of Denmark,
6.75%, 8/24/98 2,977,351
1,500 United Kingdom Treasury Bonds,
8.00%, 6/10/03 2,275,199
------------
6,791,473
- ------------------------------------------------------------
United States--23.3%
Corporate Bonds--1.6%
US$ 750 Banco Del Estado Chile,
8.39%, 8/1/01 787,500
250 Bco Central De Brazil,
6.4375%, 10/15/99 239,375
1,000 Cadbury Schweppes,
6.25%, 10/4/99 990,000
------------
2,016,875
Sovereign Bonds--16.0%
US$ 1,250 Bancomer SA,
8.00%, 7/7/98 1,214,062
1,000 Cemex SA,
8.875%, 6/10/98 983,750
3,080 Empresa De Petroleos,
7.25%, 7/8/98 3,064,600
2,500 Empresas Louisiana Modern,
10.25%, 11/12/97 2,534,375
3,000 Fomento Economico Mexicano SA,
9.50%, 7/22/97 3,037,500
$2,000 Ford Motor Credit Co.,
6.25%, 11/8/00 $ 1,952,500
2,000 Madrid Comunidad,
5.75%, 7/8/98 1,977,500
1,000 Nacional Financier,
5.875%, 2/17/98 951,250
465 Republic of Brazil,
6.375%, 1/1/01 426,056
3,000 Republic of Finland,
6.75%, 11/24/97 3,030,000
1,015 Trinidad & Tobago Republic,
9.75%, 11/3/00 1,032,763
------------
20,204,356
Supranational Bond--1.0%
1,300 Corporacion Andina de Formento,
7.25%, 4/30/98 1,304,550
------------
U.S. Government Obligations--4.7%
United States Treasury Notes,
1,500 5.875%, 8/15/98 1,492,260
4,500 6.125%, 9/30/00 4,453,605
------------
5,945,865
------------
29,471,646
------------
Total long-term investments
(cost US$91,432,047) 90,501,931
------------
SHORT-TERM INVESTMENTS--26.7%
- ------------------------------------------------------------
Australia--2.1%
Australian Time Deposits,
A$ 1,700 7.1875%, 5/2/96 1,338,688
1,700 7.25%, 5/7/96 1,338,688
------------
2,677,376
- ------------------------------------------------------------
Canada--1.4%
C$ 1,300 Province Of New Brunswick,
10.25%, 9/25/96 970,559
1,000 Rabobank Nederland,
8.50%, 6/19/96 737,350
------------
1,707,909
</TABLE>
- --------------------------------------------------------------------------------
- ----- 4 See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
Portfolio of Investments as of April 30, 1996 MATURITY FUND, INC.
(Unaudited) LIMITED MATURITY PORTFOLIO
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal US$
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Czech Republic--0.6%
CZK 20,000 Unilever,
10.95%, 7/22/96 $ 701,130
- ------------------------------------------------------------
European Community--1.4%
ECU 1,481 Nacional Financiera SNC,
10.25%, 3/11/97 1,815,378
- ------------------------------------------------------------
Hungarian--0.5%
HUF 100,000 Ing Ecp
25.25%, 5/6/96 676,627
- ------------------------------------------------------------
Ireland--1.5%
IEP 1,200 Irish Gov't. Bonds,
9.00%, 7/30/96 1,881,012
- ------------------------------------------------------------
Italy--3.5%
Lira 7,000,000 Export Finance of Norway,
12.25%, 8/5/96 4,484,200
- ------------------------------------------------------------
New Zealand--3.8%
NZ$ 7,000 New Zealand Gov't. Bonds,
9.00%, 11/15/96 4,798,682
- ------------------------------------------------------------
Poland--0.4%
Polish Treasury Bills,
PLN 750 21.25%, 6/5/96 277,571
750 21.25%, 7/24/96 268,954
------------
546,525
- ------------------------------------------------------------
Spain--1.3%
Pts 200,000 Kingdom of Spain,
11.85%, 8/30/96 1,580,817
United Kingdom--0.9%
BP 750 Kingdom Of Sweden,
8.75%, 5/29/96 $ 1,126,980
- ------------------------------------------------------------
United States--9.3%
US$ 2,000 Council Of Europe,
6.00%, 6/28/96 2,000,000
2,000 Financiera Energetica Nacional,
6.625%, 12/13/96 2,002,000
500 General Electric Capital Corp.,
8.25%, 11/18/96 756,337
1,936 Joint Repurchase Agreement
Account,
5.33%, 5/1/96 (Note 5) 1,936,000
600 Nafin Securities,
6.00%, 12/19/96 594,000
1,000 Osterreiche Kentrollbank,
8.25%, 7/15/96 1,004,006
1,500 Petroleos Mexicano,
6.25%, 6/10/96 1,498,781
10,000 Swedish Export Credit,
10.50%, 9/25/96 1,490,524
500 United States Treasury Notes,
6.875%, 10/31/96 503,516
------------
11,785,164
------------
Total short-term investments
(cost US$34,300,751) 33,781,800
------------
- ------------------------------------------------------------
Total Investments--98.1%
(cost US$125,732,798; Note 4) 124,283,731
Other assets in excess of
liabilities--1.9% 2,350,727
------------
Net Assets--100% $126,634,458
------------
------------
</TABLE>
- ---------------
Portfolio securities are classified by country according to the
security's currency denomination.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S>
<C>
Assets
April 30, 1996
Investments, at value (cost
$125,732,798)...................................................................
$124,283,731
Foreign currency, at value (cost
$983,356)..................................................................
983,269
Cash.........................................................................
............................... 56,535
Interest
receivable...................................................................
...................... 4,560,718
Forward currency contracts - net amount receivable from
counterparties...................................... 522,060
Receivable for Fund shares
sold.........................................................................
.... 3,920
Deferred expenses and other
assets..........................................................................
6,896
--------------
Total
assets.......................................................................
...................... 130,417,129
--------------
Liabilities
Payable for investments
purchased....................................................................
....... 2,642,048
Payable for Fund shares
reacquired...................................................................
....... 693,203
Dividends
payable......................................................................
..................... 200,249
Accrued
expenses.....................................................................
....................... 95,761
Due to
Manager......................................................................
........................ 58,252
Due to
Distributor..................................................................
........................ 50,798
Forward currency contracts - net amount payable to
counterparties........................................... 42,360
--------------
Total
liabilities..................................................................
...................... 3,782,671
--------------
Net
Assets.......................................................................
........................... $126,634,458
--------------
--------------
Net assets were comprised of:
Common stock, at
par..........................................................................
........... $ 14,771
Paid-in capital in excess of
par.........................................................................
164,212,697
--------------
164,227,468
Undistributed net investment
income......................................................................
3,828,219
Accumulated net realized loss on
investments.............................................................
(40,396,752)
Net unrealized depreciation on investments and foreign
currencies........................................ (1,024,477)
--------------
Net assets, April 30,
1996.........................................................................
......... $126,634,458
--------------
--------------
Class A:
Net asset value and redemption price per share
($56,586,251 / 6,612,038 shares of common stock issued and
outstanding).................................. $8.56
Maximum sales charge (3.00% of offering
price)...........................................................
.26
--------------
Maximum offering price to
public.........................................................................
$8.82
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share
($70,047,417 / 8,158,560 shares of common stock issued and
outstanding).................................. $8.59
--------------
--------------
Class C:
Net asset value, offering price and redemption price per share
($790 / 92 shares of common stock issued and
outstanding)................................................ $8.59
--------------
--------------
</TABLE>
- --------------------------------------------------------------------------------
- ----- 6 See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income April 30, 1996
<S> <C>
Income
Interest.................................. $ 5,360,216
--------------
Expenses
Distribution fee--Class A................. 32,802
Distribution fee--Class B................. 314,492
Management fee............................ 350,900
Transfer agent's fees and expenses........ 116,000
Custodian's fees and expenses............. 105,000
Reports to shareholders................... 61,000
Registration fees......................... 29,000
Directors' fees and expenses.............. 27,000
Audit fees and expenses................... 19,000
Legal fees and expenses................... 14,000
Miscellaneous............................. 4,706
--------------
Total expenses......................... 1,073,900
--------------
Net investment income........................ 4,286,316
--------------
Realized and Unrealized
Gain(Loss) on Investments and
Foreign Currency Transactions
Net realized gain(loss) on:
Investment transactions................... (71,458)
Foreign currency transactions............. 4,163,787
--------------
4,092,329
--------------
Net change in unrealized depreciation of:
Investments............................... (1,669,135)
Foreign currencies........................ (354,565)
--------------
(2,023,700)
--------------
Net gain on investments and foreign
currencies................................ 2,068,629
--------------
Net Increase in Net Assets
Resulting from Operations.................... $ 6,354,945
--------------
--------------
</TABLE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended
Increase (Decrease) Ended October 31,
in Net Assets April 30, 1996 1995
<S> <C> <C>
Operations
Net investment income......... $ 4,286,316 $ 10,669,508
Net realized gain (loss) on
investment and foreign
currency transactions...... 4,092,329 (4,677,372)
Net change in unrealized
appreciation/depreciation
of investments and foreign
currencies................. (2,023,700) 139,570
-------------- -------------
Net increase in net assets
resulting from operations..... 6,354,945 6,131,706
-------------- -------------
Net equalization debits.......... -- (165,706)
-------------- -------------
Dividends and distributions (Note
1):
Dividends from net investment
income
Class A.................... (1,478,286) (1,153,940)
Class B.................... (2,558,734) (7,189,730)
Class C.................... (25) (76)
-------------- -------------
(4,037,045) (8,343,746)
-------------- -------------
Tax return of capital
distributions
Class A.................... -- (212,807)
Class B.................... -- (1,325,913)
Class C.................... -- (14)
-------------- -------------
-- (1,538,734)
-------------- -------------
Fund share transactions (net of
share conversions) (Note 6)
Net proceeds from shares
sold....................... 24,718,008 10,196,786
Net asset value of shares
issued in reinvestment of
dividends and
distributions.............. 2,252,529 5,727,225
Cost of shares reacquired..... (29,325,257) (103,144,120)
-------------- -------------
Net decrease in net assets from
Fund share transactions....... (2,354,720) (87,220,109)
-------------- -------------
Total decrease................... (36,820) (91,136,589)
Net Assets
Beginning of period.............. 126,671,278 217,807,867
-------------- -------------
End of period.................... $ 126,634,458 $ 126,671,278
-------------- -------------
-------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7 -----
<PAGE>
<PAGE>
PRUDENTIALGLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
Prudential Global Limited Maturity Fund, Inc. (the ``Fund'') is registered under
the Investment Company Act of 1940 as a non-diversified, open-end management
investment company. Prior to January 19, 1996 the Fund consisted of two series,
namely: Limited Maturity Portfolio and Global Assets Portfolio. On January 19,
1996, the Limited Maturity Portfolio acquired the assets of the Global Assets
Portfolio. The Fund was incorporated in Maryland on February 21, 1990 and had
no
significant operations other than the issuance of 5,000 shares each of Class A
and Class B common stock of the Limited Maturity Portfolio for $100,000 on
September 21, 1990 to Prudential Mutual Fund Management, Inc. (``PMF''). The
Limited Maturity Portfolio (the ``Portfolio'') commenced investment operations
on November 1, 1990. The investment objective of the Portfolio is to maximize
total return, the components of which are current income and capital
appreciation, by investing primarily in a portfolio of investment grade debt
securities. The ability of the issuers of the debt securities held by the Fund
to meet their obligations may be affected by economic developments in a specific
country or industry.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund, and the Portfolio in the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Government securities for which quotations are
available will be based on prices provided by an independent pricing service or
principal market makers. Other portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the average of the
quoted bid and asked prices provided by an independent pricing service or by
principal market makers. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the 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
closing daily rate 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 at 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 debt
securities sold during the fiscal period. Accordingly, such realized foreign
currency gains and losses are included in the reported net realized gains/losses
on investment transactions.
Net realized gain on foreign currency transactions represents net foreign
exchange gains or losses from sales and maturities of short-term securities,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of 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 at fiscal period end exchange rates are reflected as a component of
net unrealized appreciation/depreciation on investments and foreign currencies.
- --------------------------------------------------------------------------------
- ----- 8
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis. Expenses are recorded on the accrual basis which
may require the use of certain estimates by management.
Net investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares based upon the
relative proportion of net assets of each class at the beginning of the day.
Equalization: During the six months ended April 30, 1996, the Fund discontinued
the accounting practice of equalization. Equalization is a practice whereby a
portion of the proceeds from sales and costs of repurchases of capital shares,
equivalent on a per-share basis to the amount of distributable net investment
income on the date of the transaction, is credited or charged to undistributed
net investment income. The accumulated distributions in excess of net investment
income balance of $11,290,809 at October 31, 1995, resulting from equalization,
was transferred to paid-in capital in excess of par.
Dividends and Distributions: The Fund declares daily and pays dividends from
book basis net investment income monthly and makes distributions at least
annually of any net capital gains. 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
foreign currency transactions.
Reclassification of Capital Accounts: The Portfolio accounts and reports for
distributions to shareholders in accordance with American Institute of Certified
Public Accountants (AICPA) Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to increase undistributed net investment income and increase
accumulated net realized loss on investments by $4,314,883. This was primarily
the result of net foreign currency gains incurred for the six months ended April
30, 1996. Net investment income, net realized gains and net assets were not
affected by this change.
Federal Income Taxes: It is the intent of the Fund 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 have been provided for in accordance with
the Fund's understanding of the applicable country's tax rules and rates.
- ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Mutual Fund Management
(``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 cost of the subadviser's
services, 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.
- --------------------------------------------------------------------------------
9 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
The management fee paid PMF is computed daily and payable monthly at an annual
rate of .55 of 1% of the average daily net assets of the Portfolio.
The Portfolio had a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acted as the distributor of the Class A
shares of the Fund, through January 1, 1996. Effective January 2, 1996
Prudential Securities Incorporated (``PSI''), became the distributor of the
Class A shares of the Fund and is serving the Fund under the same terms and
conditions as under the arrangement with PMFD. PSI is also the distributor of
the Class B and Class C shares of the Fund. The Portfolio compensated PMFD and
PSI 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.
Pursuant to the Class A, B and C Plans, the Fund compensates PSI, and PMFD for
the period September 1, 1995 through January 1, 1996 with respect to Class A
shares, 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 .15 of 1%, .75 of 1% and .75
of
1%, of the average daily net assets of the Class A, B and C shares,
respectively, for the six months ended April 30, 1996.
PMFD and PSI has advised the Fund that it has received approximately $400 in
front-end sales charges resulting from sales of Class A shares during the six
months ended April 30, 1996. From these fees, PMFD and PSI paid such sales
charges to Pruco Securities Corporation, affiliated broker-dealers, which in
turn paid commissions to salespersons and incurred other distribution costs.
PSI has advised the Fund that for the six months ended April 30, 1996, it
received approximately $24,800 in contingent deferred sales charges imposed upon
certain redemptions by Class B shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI and PMF are indirect, wholly-owned
subsidiaries of The Prudential Insurance Company of America.
- ------------------------------------------------------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services, Inc. (``PMFS'') a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and during the six months ended April
30, 1996, the Portfolio incurred fees of approximately $103,900 for the services
of PMFS. As of April 30, 1996, approximately $17,300 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 Securities
Purchases and sales of investment securities, other than short-term investments
and options, for the six months ended April 30, 1996 aggregated $69,068,129 and
$71,835,469, respectively.
The United States federal income tax basis of the Fund's investments at April
30, 1996 was substantially the same as for financial reporting purposes and,
accordingly, net unrealized depreciation of investments, for United States
federal income tax purposes was $1,449,067 (gross unrealized
appreciation--$1,117,393; gross unrealized depreciation--$2,566,460).
For federal income tax purposes, the Portfolio had a capital loss carryforward
as of October 31, 1995, of approximately $40,174,000 of which $26,697,000
expires in 2001, $12,011,000 expires in 2002 and $1,466,000 expires in 2003.
Accordingly, no capital gains distributions are expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
At April 30, 1996, the Portfolio had outstanding forward currency contracts to
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- -------------------------- --------------- ----------- -----------
<S> <C> <C> <C>
British Pounds,
expiring 5/28/96........ $ 1,976,743 $ 1,962,577 $ 14,166
Deutschemarks,
expiring 5/28/96........ 15,856,425 15,702,156 154,269
European Currency Units,
expiring 5/28/96........ 1,678,361 1,661,651 16,710
French Francs,
expiring 9/16/96........ 3,050,000 3,049,263 737
Irish Punts,
expiring 5/28/96........ 6,925,950 6,885,021 40,929
Japanese Yen,
expiring 5/28/96........ 2,241,580 2,283,940 (42,360)
Netherland Guilders,
expiring 5/28/96........ 18,091,034 17,888,202 202,832
Spanish Pesetas,
expiring 5/28/96........ 988,435 980,231 8,204
</TABLE>
- --------------------------------------------------------------------------------
- ----- 10
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- -------------------------- --------------- ----------- -----------
<S> <C> <C> <C>
Swedish Krona,
expiring 5/28/96........ $ 966,787 $ 954,619 $ 12,168
Swiss Francs,
expiring 5/28/96........ 5,805,217 5,733,172 72,045
--------------- ----------- -----------
$57,580,532 $57,100,832 $ 479,700
--------------- ----------- -----------
--------------- ----------- -----------
</TABLE>
- ------------------------------------------------------------
Note 5. Joint Repurchase Agreement Account
The Portfolio, along with other affiliated registered investment 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 April 30,
1996, the Portfolio has a 0.12% undivided interest in the repurchase agreements
in the joint account. The undivided interest for the Portfolio represents
$1,936,000 in principal amount. As of such date, each repurchase agreement in
the joint account and the value of the collateral therefor were as follows:
Morgan Stanley & Co., Inc., 5.30%, in the principal amount of $22,851,000,
repurchase price $22,854,364, due 5/1/96. The value of the collateral including
accrued interest is $23,347,897.
Bear, Stearns & Co., 5.32%, in the principal amount of $535,000,000, repurchase
price $535,079,061, due 5/1/96. The value of the collateral including accrued
interest is $547,286,203.
Goldman, Sachs & Co., 5.33%, in the principal amount of $535,000,000, repurchase
price $535,079,210, due 5/1/96. The value of the collateral including accrued
interest is $545,700,215.
Smith Barney, Shearson Inc., 5.33%, in the principal amount of $535,000,000,
repurchase price $535,079,210, due 5/1/96. The value of the collateral including
accrued interest is $545,700,779.
- ------------------------------------------------------------
Note 6. Capital
The Portfolio offers Class A, Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 3.0%. Class B shares are sold with
a
contingent deferred sales charge which declines from 3% 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 five
years after purchase. A special exchange privilege is also available for
shareholders who qualified to purchase Class A shares at net asset value. The
Portfolio has authorized 1.5 billion shares of common stock at $.001 par value
per share equally divided into Class A, B and C shares.
Transactions in shares of common stock for the six months ended April 30, 1996
and the year ended October 31, 1995 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------ ---------- ------------
<S> <C> <C>
Six months ended April 30, 1996:
Shares sold......................... 134,588 $ 1,158,619
Shares acquired in connection with
acquisition of Prudential Global
Assets Portfolio (Note 7)......... 2,681,423 22,872,534
Shares issued in reinvestment of
dividends......................... 93,274 791,323
Shares reacquired................... (1,319,664) (11,231,654)
---------- ------------
Net increase in shares outstanding
before conversion................. 1,589,621 13,590,822
Shares issued upon conversion from
Class B........................... 2,851,402 23,964,216
---------- ------------
Net increase in shares
outstanding....................... 4,441,023 $ 37,555,038
---------- ------------
---------- ------------
Year ended October 31, 1995:
Shares sold......................... 1,053,579 $ 8,628,977
Shares issued in reinvestment of
dividends and distributions....... 92,661 767,975
Shares reacquired................... (3,098,461) (25,766,282)
---------- ------------
Net decrease in shares outstanding
before conversion................. (1,952,221) (16,369,330)
Shares issued upon conversion from
Class B........................... 753,377 6,258,466
---------- ------------
Net decrease in shares
outstanding....................... (1,198,844) $(10,110,864)
---------- ------------
---------- ------------
<CAPTION>
Class B
- ------------------------------------
<S> <C> <C>
Six months ended April 30, 1996:
Shares sold......................... 80,756 $ 686,855
Shares issued in reinvestment of
dividends......................... 172,339 1,461,186
Shares reacquired................... (2,134,379) (18,093,603)
---------- ------------
Net decrease in shares outstanding
before conversion................. (1,881,284) (15,945,562)
Shares reacquired upon conversion
into Class A...................... (2,843,937) (23,964,216)
---------- ------------
Net decrease in shares
outstanding....................... (4,725,221) $(39,909,778)
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
11 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares Amount
- ------------------------------------ ---------- ------------
<S> <C> <C>
Year ended October 31, 1995:
Shares sold......................... 185,701 $ 1,562,291
Shares issued in reinvestment of
dividends and distributions....... 592,358 4,959,179
Shares reacquired................... (9,224,908) (77,372,755)
---------- ------------
Net decrease in shares outstanding
before conversion................. (8,446,849) (70,851,285)
Shares reacquired upon conversion
into Class A...................... (751,567) (6,258,466)
---------- ------------
Net decrease in shares
outstanding....................... (9,198,416) $(77,109,751)
---------- ------------
---------- ------------
<CAPTION>
Class C
- ------------------------------------
<S> <C> <C>
Six months ended April 30, 1996:
Shares issued in reinvestment of
dividends......................... 2 $ 20
---------- ------------
Net increase in shares
outstanding....................... 2 $ 20
---------- ------------
---------- ------------
Year ended October 31, 1995:
Shares sold......................... 664 $ 5,518
Shares issued in reinvestment of
dividends and distributions....... 9 71
Shares reacquired................... (606) (5,083)
---------- ------------
Net increase in shares
outstanding....................... 67 $ 506
---------- ------------
---------- ------------
</TABLE>
- ------------------------------------------------------------
Note 7. Acquisition of Global Assets Portfolio
On January 19, 1996, the Portfolio acquired all the net assets of the Global
Assets Portfolio pursuant to a plan of reorganization approved by Global Assets
shareholders on January 12, 1996. The acquisition was accomplished by a tax-free
exchange of 2,681,423 Class A shares of the Portfolio valued at $22,872,534 on
January 19, 1996. The net assets of the Portfolio and Global Assets Portfolio
immediately before the acquisition were $117,661,601 and $22,872,534 (including
$1,001,747 of net unrealized appreciation), respectively.
- --------------------------------------------------------------------------------
- ----- 12
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
- ------------------------------------------------------------------------
Six Months
Ended
Year Ended October 31,
April 30,
- ---------------------------------------------------------
1996 1995 1994
1993 1992 1991
---------- ------- -------
------- -------- --------
<S> <C> <C> <C>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 8.39 $ 8.56 $ 9.29
$ 9.16 $ 9.97 $ 10.00
---------- ------- -------
------- -------- --------
Income from investment operations
Net investment income..................... .30(b) .61 .70
.97 .96 1.03
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions........................... .16(b) (.21) (.86)
(.26) (.95) (.02)
---------- ------- -------
------- -------- --------
Total from investment operations....... .46 .40 (.16)
.71 .01 1.01
---------- ------- -------
------- -------- --------
Less distributions
Dividends from net investment income...... (.29) (.48) --
(.58) (.82) (1.03)
Tax return of capital distributions....... -- (.09) (.57)
-- -- --
Distributions from net capital gains...... -- -- --
-- -- (.01)
---------- ------- -------
------- -------- --------
Total distributions.................... (.29) (.57) (.57)
(.58) (.82) (1.04)
---------- ------- -------
------- -------- --------
Net asset value, end of period............ $ 8.56 $ 8.39 $ 8.56
$ 9.29 $ 9.16 $ 9.97
---------- ------- -------
------- -------- --------
---------- ------- -------
------- -------- --------
TOTAL RETURN(a):.......................... 5.51% 4.92%
(1.89)% 7.96% (0.07)% 10.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $ 56,586 $18,216 $28,841
$59,458 $101,358 $105,148
Average net assets (000).................. $ 43,976 $20,153 $38,000
$70,347 $119,171 $ 51,830
Ratios to average net assets:
Expenses, including distribution
fees................................ 1.28%(c) 1.21% 1.17%
1.02% 1.08% 1.01%
Expenses, excluding distribution
fees................................ 1.13%(c) 1.06% 1.02%
.87% .93% .86%
Net investment income.................. 7.12%(c) 7.25% 7.67%
10.81% 9.93% 10.23%
Portfolio turnover rate................... 121% 199% 232%
307% 180% 66%
</TABLE>
- ---------------
(a) 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.
(b) Calculated based upon average shares outstanding during the period.
(c) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13 -----
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
- ---------------------------------------------------------------------------
Six Months
Ended
Year Ended October 31,
April 30,
- ------------------------------------------------------------
1996 1995 1994
1993 1992 1991
---------- --------
- -------- -------- -------- --------
<S> <C> <C> <C>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 8.42 $ 8.56 $
9.29 $ 9.16 $ 9.97 $ 10.00
---------- --------
- -------- -------- -------- --------
Income from investment operations
Net investment income..................... .28(b) .56
.62 .88 .88 .95
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions........................... .15(b) (.19)
(.86) (.26) (.95) (.02)
---------- --------
- -------- -------- -------- --------
Total from investment operations....... .43 .37
(.24) .62 (.07) .93
---------- --------
- -------- -------- -------- --------
Less distributions
Dividends from net investment income...... (.26) (.43)
-- (.49) (.74) (.95)
Tax return of capital distributions....... (.08)
(.49) -- -- --
Distributions from net capital gains...... -- --
-- -- -- (.01)
---------- --------
- -------- -------- -------- --------
Total distributions.................... (.26) (.51)
(.49) (.49) (.74) (.96)
---------- --------
- -------- -------- -------- --------
Net asset value, end of period............ $ 8.59 $ 8.42 $
8.56 $ 9.29 $ 9.16 $ 9.97
---------- --------
- -------- -------- -------- --------
---------- --------
- -------- -------- -------- --------
TOTAL RETURN(a):.......................... 5.16% 4.60%
(2.62)% 7.00% (0.86)% 9.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $ 70,047 $108,454
$188,966 $375,013 $606,899 $669,086
Average net assets (000).................. $ 84,324 $139,248
$281,143 $474,175 $814,734 $349,607
Ratios to average net assets:
Expenses, including distribution
fees................................ 1.89%(c) 1.83%
1.97% 1.87% 1.93% 1.87%
Expenses, excluding distribution
fees................................ 1.14%(c) 1.08%
1.02% .87% .93% .87%
Net investment income.................. 6.52%(c) 6.61%
6.82% 9.42% 9.05% 9.46%
Portfolio turnover rate................... 121% 199%
232% 307% 180% 66%
<CAPTION>
Class C
- ------------------------------------------
<S> <C> <C> <C>
August 1,
Six Months Year
1994(d)
Ended Ended
Through
April 30, October 31,
October 31,
1996 1995
1994
----- -----
- -----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 8.42 $ 8.56 $
8.61
----- -----
- -----------
Income from investment operations
Net investment income..................... .28(b) .54
.14
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions........................... .15(b) (.17)
(.06)
----- -----
- -----------
Total from investment operations....... .43 .37
.08
----- -----
- -----------
Less distributions
Dividends from net investment income...... (.26) (.43)
--
Tax return of capital distributions....... -- (.08)
(.13)
Distributions from net capital gains...... -- --
--
----- -----
- -----------
Total distributions.................... (.26) (.51)
(.13)
----- -----
- -----------
Net asset value, end of period............ $ 8.59 $ 8.42 $
8.56
----- -----
----- -----
- -----------
- -----------
TOTAL RETURN(a):.......................... 5.16% 4.60%
0.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $ 790(e) $ 755(e) $
200(e)
Average net assets (000).................. $ 771(e) $ 1,461(e) $
199(e)
Ratios to average net assets:
Expenses, including distribution
fees................................ 1.89%(c) 1.70%
.93%(c)
Expenses, excluding distribution
fees................................ 1.14%(c) .95%
.18%(c)
Net investment income.................. 6.52%(c) 6.43%
7.02%(c)
Portfolio turnover rate................... 121% 199%
232%
</TABLE>
- ---------------
(a) 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.
(b) Calculated based upon average shares outstanding during the period.
(c) Annualized.
(d) Commencement of offering of Class C shares.
(e) Figures are actual and not rounded to the nearest thousand.
- --------------------------------------------------------------------------------
- ----- 14 See Notes to Financial Statements.
<PAGE>
<PAGE>
Getting
The Most
From Your
Prudential
Mutual
Fund
When you invest through Prudential Mutual Funds, you receive financial advice
through a Prudential Securities financial advisor or Prudential/Pruco Securities
registered representative. Your advisor or representative can provide you with
the following services:
There's No Reward Without Risk; But Is This Risk Worth It?
Your financial advisor or registered representative can help you match the
reward you seek with the risk you can tolerate. And risk can be difficult to
gauge -- sometimes even the simplest investments bear surprising risks.
The educated investor knows that markets seldom move in just one direction
-- there are times when a market sector or asset class will lose value or
provide little in the way of total return. Managing your own expectations is
easier with help from someone who understands the markets and who knows you!
Keeping Up With The Joneses. A financial advisor or registered representative
can help you wade through the numerous mutual funds available to find the ones
that fit your own individual investment profile and risk tolerance. While the
newspapers and popular magazines are full of advice about investing, they are
aimed at generic groups of people or representative individuals, not at you
personally. Your financial advisor or registered representative will review
your investment objectives with you. This means you can make financial
decisions based on the assets and liabilities in your current portfolio and
your risk tolerance -- not just based on the current investment fad.
Buy Low, Sell High.
Buying at the top of a market cycle and selling at the bottom are among the
most common investor mistakes. But sometimes it's difficult to hold on to an
investment when it's losing value every month. Your financial advisor or
registered representative can answer questions when you're confused or worried
about your investment, and remind you that you're investing for the long haul.
<PAGE>
Getting
The Most
From Your
Prudential
Mutual
Fund
How many times have you read these letters -- or other financial materials
-- and stumbled across a word that you don't understand?
Many shareholders have run into the same problem. We'd like to help. So we'll
use this space from time to time to explain some of the words you might have
read, but not understood. And if you have a favorite word that no one can
explain to your satisfaction, please write to us.
Basis Point: One 1/100th of 1%. For example, one half of one percentage point
is 50 basis points.
Call Option: A contract giving the holder a right to buy stocks or bonds at a
predetermined price (called the strike price) before a predetermined expiration
date. A buyer of a call option generally expects to benefit from a rise in the
price of the stock or bond.
Capital Gain/Capital Loss: The difference between the cost of a capital asset
(for example, a stock, bond or mutual fund share) and its selling price. Under
current law the federal income tax rate for individuals on a long-term capital
gain is up to 28%.
Collateralized Mortgage Obligations (CMOs): Pools of mortgage-backed securities
sliced in maturity ranges that bear differing interest rates. These instruments
are sensitive to changes in interest rates and homeowner refinancing activity.
They are subject to prepayment and maturity extension risk.
Derivatives: Securities that derive their value from another security. The rate
of return of these financial products rises and falls -- sometimes very
suddenly -- in response to changes in some specific interest rate, currency,
stock or other variable.
Discount Rate: The interest rate charged by the Federal Reserve on loans to
banks and other depository institutions.
Federal Funds Rate: The interest rate charged by one bank to another on
overnight loans.
Futures Contract: An agreement to deliver a specific amount of a commodity
or financial instrument at a set price at a stipulated time in the future.
Leverage: The use of borrowed assets to enhance return on equity. The
expectation is that the interest rate charged will be lower than the
return on the investment. While leverage can increase profits, it can also
magnify losses.
Liquidity: The ease with which a financial instrument (or mutual fund) can
be bought or sold (converted into cash) in the financial markets.
Price/Earnings Ratio: The price of a share of stock divided by the earnings
per share for a 12-month period.
Option: An agreement to sell something, such as shares of stock, by a certain
time for a specified price. An option need not be exercised.
Spread: The difference between two values; most often used to describe the
difference between prices bid and asked for a security.
Yankee Bond: A bond denominated in U.S. dollars but sold by a foreign company
or government in the U.S. market.
<PAGE>
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
(800) 225-1852
http:\\www.prudential.com
Directors
Stephen C. Eyre
Delayne D. Gold
Don G. Hoff
Harry A Jacobs, Jr.
Sidney R. Knafel
Robert E. LaBlanc
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Ellyn C. Acker, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Auditors
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281
Legal Counsel
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, NY 10022
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
The accompanying financial statements as of April 30, 1996 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
(800) 225-1852
74433F108
74433F207 MF144E2
74433F504 Cat# 4443640
