<PAGE>
(ICON)
Prudential
Pacific
Growth
Fund, Inc.
ANNUAL
REPORT
Oct. 31, 1999
(LOGO)
<PAGE>
A Message from the Fund's President December 15, 1999
(PHOTO)
Dear Shareholder,
At the beginning of Prudential Pacific Growth Fund's fiscal
year, Pacific region stocks had just begun to rebound from
their three-year bear market. In 1998, the Morgan Stanley
Capital International (MSCI) All Country (AC) Asia Pacific
Index had plunged 31% (peak to trough). From such depressed
levels, the Index gained 54.22% (in U.S. dollars) over the
12 months ended October 31, 1999. Prudential Pacific Growth
Fund beat the MSCI Index during this period with a 55.11%
return.
Despite this strong performance, the Fund trailed the 67.12%
Lipper Pacific Region Fund Average of competing funds. Many
stocks in the region were rebounding sharply from very
steep prior declines. Even after their rebounds, many
country indexes were still far below their earlier
peaks. Prudential Pacific Growth Fund began the fiscal
year with a defensive strategy--one whose purpose was to
reduce the risk of further losses--then became fully
invested and moved into more volatile markets only
when its managers became convinced that real economic
change was well established. They view the incremental
gains it passed up as investments in a more stable return.
A 55.11% gain, despite its very defensive stance when its
fiscal year began, is an excellent achievement. By the
last quarter of its reporting period, the Fund's
performance was in line with the Lipper average.
Over the past year, Pacific region stocks benefited
from the return of investment funds to these markets
after a period of disinterest. We expect that as global
portfolios return to geographical balance, this rebound
effect, which contributed to this year's exceptional
performance, will taper off. Since different regions
of the world have periods of superior stock performance
and underperformance, diversification is always a good
idea to smooth the overall return of your investments.
Sincerely,
John R. Strangfeld
President
Prudential Pacific Growth Fund, Inc.
<PAGE>
Performance Review
(PHOTO) (PHOTO)
Steve Auth and Dave Descalzi--Fund Managers
Investment Goals and Style
Prudential Pacific Growth Fund invests primarily in stocks
of companies in the Pacific Basin, selecting a diversified
portfolio aimed at long-term growth of capital. Steve Auth,
head of Prudential's global equity group, and Dave Descalzi
design overall strategy and set country allocations. Dave
also manages our Hong Kong-based team. The Fund is subject
to all of the risks associated with foreign investing,
including currency, political and social risks, and
potential illiquidity. There can be no assurance that
the Fund will achieve its investment objective.
Up from the bottom
The Pacific region's moribund economies began to show signs
of life. Stock investors normally act in anticipation of
economic events, so stocks rebounded at the first indicators
of a bottom. Japan, with the world's second largest economy,
dominates the region. Its longest economic recession in 50
years had helped cause the region-wide economic contraction.
Although smaller countries, such as Korea, had begun to
take appropriate steps to revive their economies, Japanese
inertia still was a threat. By the end of our fiscal year,
however, there were clear signs that Japan had begun to
move. Nine of the 10 largest contributors to our return
were Japanese stocks.
We began the period positioned defensively, with hedges
against currency movements, a focus in economically sound
Australia, and an emphasis on companies with strong
balance sheets in industries with deeply established
growth trends, such as telecommunications. Although
this positioning initially hurt our performance, as
the economic situation in the region clarified, we
reoriented our holdings and finished the fiscal year
with a greater weight in Japan and less in Australia
and Hong Kong.
Japan
Our Japanese holdings are focused on three themes. We
call the largest the "New Japan." These are companies,
such as Avex (a music production company targeted at the
high-spending teen and young adult market), that are
entrepreneurial, customer focused, and profit making.
They are models of what Japan can become. Avex was the
largest contributor to our return over the 12-month
period. Other substantial contributions came from
Benesse (an instruction and educational software firm) and from
two companies whose outsourcing services facilitate the
corporate restructuring process: Nichii Gakkan and
Bellsystem24. The former is a hospital management
company; the latter a telemarketing concern. We
added Fancl, a direct-sale cosmetics company. We
believe such new- economy firms will outpace Japan's
slow economic recovery. The stocks mentioned in this
paragraph all quadrupled or better over our reporting
period.
Our second theme is companies that are restructuring
themselves to improve productivity and profitability.
World Company (an apparel company) and Sumitomo Bakelite
(a manufacturer of specialty resins and molded plastic
products) were among our largest holdings in Japan on
October 31, 1999. World more than doubled in price over
the 12 months.
<PAGE>
We recently added Toyo Trust & Banking, and are
actively looking for more restructuring stories.
The third theme is Japanese technology. Among the new
technology firms in our portfolio are NTT Mobile Communications
(now our second largest holding), Tokyo Electronics, and NEC.
These companies have strong technical capacities and should benefit
from the computer-led resurgence of the global economy. They
also have been leaders in the corporate restructuring process.
Our investment in Nichiei Co. Ltd., a loan company,
suffered substantial losses because government regulators
are reviewing its collection methods. At period end, it
was priced well below its breakup value, so we continued
to hold it.
Restructuring is a regional theme
Korea had the strongest economic turnaround in the region,
with a reform-minded government pushing the kinds of
corporate restructuring that will refresh the country's
competitive strength. Companies are reducing debt,
closing unprofitable factories, firing unnecessary
workers, and selling off unproductive units. Interest
rates have fallen, and earnings are moving up. Despite
the stock
<TABLE>
Performance at a Glance
<CAPTION>
Cumulative Total Returns1 As of 10/31/99
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 55.11% -1.43% 69.53%
Class B 54.28 -4.69 60.94
Class C 54.28 -4.69 -5.04
Class Z 56.05 N/A 0.05
Lipper Pacific Region Fund Avg3 67.12 2.20 ***
</TABLE>
<TABLE>
Average Annual Total Returns1 As of 9/30/99
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 49.20% -1.77% 6.46%
Class B 50.86 -1.66 6.45
Class C 53.30 -1.64 -1.70
Class Z 57.89 N/A -0.74
</TABLE>
Past performance is not indicative of future results.
Principal and investment return will fluctuate so that
an investor's shares, when redeemed, may be worth more
or less than their original cost.
1 Source: Prudential Investments Fund Management LLC and
Lipper, Inc. The cumulative total returns do not take
into account sales charges. The average annual total
returns do take into account applicable sales charges.
The Fund charges a maximum front-end sales charge of
5% for Class A shares. Class B shares are subject to
a declining contingent deferred sales charge (CDSC) of
5%, 4%, 3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class C shares bought before November 2, 1998, have
a 1% CDSC if sold within one year. Class Z
shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2 Inception dates: Class A and Class B, 7/24/92;
Class C, 8/1/94; Class Z, 3/1/96.
3 Lipper average returns are for all funds in each
share class for the one- and five-year periods in
the Pacific Region Fund category. The Lipper average
is unmanaged. Pacific Region funds concentrate
investments in equity securities with primary
trading markets or operations concentrated in
the Western Pacific Basin region or a single
country within this region.
***Lipper Since Inception returns are 80.54% for
Class A and Class B, 0.90% for Class C, and 4.31%
for Class Z, based on all funds in each share class.
1
<PAGE>
Review Cont'd.
market's rebound above pre-crisis levels in Korea's currency,
the won (just below pre-crisis levels in dollars), we think
there still are good values available. Our return benefited
considerably from our holdings of Lucky Goldstar Chemical,
Lucky Goldstar Securities, and Housing & Commercial Bank,
but particularly from Samsung Electronics, which tripled
in value over our fiscal year.
Thailand, whose currency devaluation precipitated the
1998 crisis, also has shown a strong determination to
address its root causes. Our largest Thai holding at
period end was BEC World Public, a broadcasting company
we added in the first half of our reporting period. We
continued to increase our investments in Thailand after
the period ended.
Technology also is a broad theme
In addition to Japan and Korea, we have found strong
technology companies in Taiwan, India, and Singapore.
Taiwan's economy, among the most reliable in the region,
is powered by its technology sector. Our largest commitments
are to Taiwan Semiconductor and Asustek Computer, both of
which doubled or better over the year. We think growing PC
sales, increasing domestic demand, and heavy industry will
make Taiwan stocks generally very attractive, so we are
increasing our holdings there. In India, we favor
software services--a national strength--as well as
drugs, domestic cyclicals, and telecommunications.
We increased our holdings there because India is
enjoying better economic growth than the rest of
the region, despite unstable governments. The
reelection of the government--the first to be
returned to power since 1971--is a sign of
improving stability. Infosys Technologies was
our largest holding in India after more than
tripling over the year.
Singapore is a much smaller market, but has had a
national focus on technology and finance. Although
its strong banking system and fiscal policies made
it a good defensive location during the regional
recession, its very strong economic recovery
pushed the prices on stocks available to foreigners
up 58% in U.S. dollars. We believe Singapore's
relative safety will continue to make it
attractive into the year 2000.
The blue-chip option
Hong Kong's close ties to China and its currency's peg
to the U.S. dollar reduced the impact of the regional
recovery. Nonetheless, Hong Kong stock prices had declined
60% from their peak and then rebounded in our reporting
period. We view it as the blue-chip location in the region.
Some of our holdings (Hutchinson Whampoa, Television
Broadcasting, Cheung Kong Holdings, and HSBC) were
strong contributors to our return, but others declined
in value substantially. For example, Hong Kong
Electronics was a defensive stock that fell in the
rising market.
Resource providers
In Australia, Publishing and Broadcasting, Howard Smith,
and Brambles made substantial contributions to our return.
We took some profits on all three when we decided to move
to a more aggressive overall strategy. Because there are
few real growth companies in Australia, compared with
opportunities elsewhere in the Pacific, we are increasing
our focus on resource companies, which should benefit from
almost universal economic growth. As demand for resources
grows, prices can rise substantially.
Geographic Concentration
Expressed as a percentage of net assets
as of 10/31/99
Japan 39.9%
Other Pacific Basin 17.4
Australia 10.6
Hong Kong 9.6
Korea 8.9
Cash & Equivalents 13.6
2
<PAGE>
However, two food-related businesses--Woolworth's and
Goodman Fielder--were among our largest holdings at
the beginning of this period. We had larger investments
in these firms than we would have had if prospects
elsewhere had not been so risky. As it
turned out, the shares of both companies declined,
and we eliminated both from our portfolio.
Indonesian investments are dominated by political risk.
However, the results of the recent transfer of power
to a new government are encouraging, and the country's
tremendous strength in natural resources (minerals,
timber, cocoa, fish, etc.) should
benefit from accelerating global growth.
Five Largest Holdings Expressed as a percentage of net
assets as of 10/31/99
Security/Industry Comments
% of Net Assets
World Co., Ltd.
Apparel
2.3% New management in 1997 shifted World's
focus to in-house label fashion,
which is already increasing profits.
Its stock price rose substantially
during our reporting period.
NTT Mobile Communications
Telecommunications
2.1% Benefiting from the change from
wired lines to wireless and from
voice traffic to data and Internet.
Above 60% market share in Japan's
wireless market and ties with
Sun Microsystems and Microsoft on
next-generation wireless Internet
technology. Its stock more than
quadrupled during our reporting period.
Toyo Trust & Banking
Commercial Banking
2.1% Toyo has a relatively healthy balance
sheet and stable earnings outlook
and is well positioned to benefit
from bank consolidations. It has
strong relationships with Sanwa Bank,
one of the two major banks that
haven't yet made merger decisions.
Toyo's stock more than tripled
during our reporting period.
Sumitomo Bakelite
Chemicals
2.0% A processor of synthetic resins,
its business is focusing increasingly
on electronic parts, such as
printed circuit boards and
semiconductor sealings for
electronic components. It had
modest gains over our reporting
period, but we believe its
corporate restructuring will pay off.
Daifuku Co., Ltd.
Machinery & Equipment
1.8% The leading global supplier of
automated distribution equipment,
a market expanding because of the
spread of e-commerce and supply
chain management. The stock declined
because investors view Daifuku as
an equipment firm, not yet as part of
the technological revolution in
management. We are enthusiastic
about its growth potential.
3
<PAGE>
Portfolio of Investments as
of October 31, 1999 PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--86.4%
COMMON STOCKS--86.4%
- ------------------------------------------------------------
Australia--10.6%
343,255 AAPT, Ltd.(a) $ 1,110,488
156,800 AMP, Ltd. 1,595,463
43,491 Brambles Industries, Ltd. 1,223,846
184,000 Broken Hill Proprietary Co., Ltd. 1,902,871
159,000 Coles Myer, Ltd. 791,372
42,750 Commonwealth Bank of Australia 701,065
109,200 Computershare, Ltd. 397,179
513,050 Fosters Brewing Group, Ltd. 1,364,509
169,310 Leighton Holdings, Ltd. 615,809
76,457 National Australia Bank, Ltd. 1,180,651
260,000 Normandy Mining, Ltd. 197,428
1,365,859 Pasminco, Ltd. 1,307,332
187,885 Publishing & Broadcasting, Ltd. 1,114,972
106,600 Rio Tinto, Ltd. 1,714,617
136,242 Smith (Howard), Ltd. 977,509
381,200 Southcorp, Ltd. 1,325,679
62,200 St. George Bank, Ltd. 409,639
109,662 Tab Corp. Holdings, Ltd. 695,555
201,800 Telstra Corp., Ltd. 1,027,187
227,900 Western Mining Corp. Holdings, Ltd. 978,697
200,600 Westpac Banking Corp. 1,287,965
-------------
21,919,833
- ------------------------------------------------------------
Hong Kong--9.6%
714,500 Amoy Properties, Ltd. 616,186
193,400 Bank of East Asia, Ltd. 423,195
346,000 Beijing Datang Power Generation Co. 72,148
288,000 Cheung Kong Holdings, Ltd. 2,613,464
806,000 China Everbright, Ltd. 575,788
640,000 China Merchants China Direct
Investments, Ltd. 506,629
155,000 China Telecom, Ltd. 530,699
174,000 Citic Pacific, Ltd. 450,174
251,000 Guangdong Kelon Electrical Holdings
Co., Ltd.(a) 222,924
83,000 Henderson Land Development, Ltd. 378,195
408,500 Hong Kong Electric Holdings, Ltd.(a) $ 1,248,793
604,600 Hong Kong Telecommunications, Ltd. 1,381,343
53,212 HSBC Holdings Public Co., Ltd. 638,695
590,700 Hung Hing Printing Group, Ltd. 226,198
274,600 Hutchison Whampoa, Ltd. 2,756,957
764,000 International Bank of Asia 170,127
182,000 New World Development Co., Ltd. 344,369
2,562,000 Shanghai Petrochemical Co., Ltd. 524,338
249,000 Sun Hung Kai Properties, Ltd. 2,011,166
249,400 Swire-Pacific, Ltd. 'A' 1,235,925
184,300 Television Broadcasts, Ltd. 984,483
406,000 Varitronix International, Ltd. 875,338
357,000 Wing Hang Bank, Ltd. 1,164,880
-------------
19,952,014
- ------------------------------------------------------------
India--4.7%
39,000 Glaxo India, Ltd. 664,461
23,500 Hindustan Lever, Ltd. 1,246,705
50,200 ICICI, Ltd. (ADR) 552,200
9,000 Infosys Technologies, Ltd. (ADR) 1,441,660
19,700 ITC, Ltd. (GDR) 371,936
42,500 Larsen & Toubro, Ltd. (GDR) 920,125
44,300 Mahindra & Mahindra, Ltd. (GDR)(c) 346,426
16,500 NIIT, Ltd. 823,764
40,000 Ranbaxy Laboratories, Ltd. (GDR) 802,000
24,000 Satyam Computer Services, Ltd. 703,816
65,950 State Bank of India (GDR) 877,795
61,400 Videsh Sanchar Nigam, Ltd. (GDR) 979,330
-------------
9,730,218
- ------------------------------------------------------------
Indonesia--0.3%
3,445,400 PT Bank Pan Indonesia Tbk 402,971
237,000 PT Ramayana Lestari Sentosa Tbk 166,316
-------------
569,287
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as
of October 31, 1999 PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Japan--39.9%
15,050 Avex, Inc. $ 3,178,306
356,000 Bank of Fukuoka, Ltd. 2,744,113
2,000 Bellsystem 24, Inc. 1,919,846
6,100 Benesse Corp. 1,305,784
60,000 C. Uyemura & Co., Ltd. 1,969,762
96,000 Canon, Inc. 2,718,502
585,000 Daifuku Co., Ltd. 3,812,959
241,000 Daikin Industries, Ltd. 2,660,427
11,100 Fancl Corp. 3,196,544
10,400 Hirose Electric Co., Ltd. 1,815,944
34,500 ITO EN, Ltd. 3,543,556
717,000 Kawasaki Steel Corp. 1,624,305
66,300 Ministop Co., Ltd. 1,858,373
120,000 NEC Corp. 2,430,525
56,300 Nichiei Co., Ltd. 2,918,358
15,200 Nichii Gakkan Co. 2,480,441
168 NTT Mobile Communications 4,467,099
199,000 Olympus Optical Co., Ltd. 2,693,448
8,900 Ryohin Keikaku Co., Ltd. 1,713,789
92,000 Skylark Co., Ltd. 2,578,738
426,000 Sumitomo Bakelite Co., Ltd. 4,207,862
16,000 TDK Corp. 1,568,131
114,000 Terumo Corp. 3,468,970
205,000 Tokio Marine & Fire Insurance Co.,
Ltd. 2,686,105
43,000 Tokyo Electron, Ltd. 3,574,562
127,000 Toyo Seikan Kaisha, Ltd. 2,767,363
694,000 Toyo Trust & Banking Co., Ltd. 4,396,832
19,000 Trend Micro Inc. 3,775,378
46,800 World Co., Ltd. 4,739,525
-------------
82,815,547
- ------------------------------------------------------------
Korea--8.9%
79,600 Housing & Commercial Bank 2,103,643
41,000 Keum Kang Development Ind. Co. 488,787
58,300 Korea Electric Power Corp. 1,705,986
61,140 L.G. Chemical, Ltd. 1,850,256
26,106 L.G. Securities Co., Ltd. 563,689
29,400 Pohang Iron & Steel Co., Ltd. (ADR) 981,225
20,260 Pusan City Gas Co., Ltd. 440,839
49,800 Samsung Electro-Mechanics Co. 2,408,003
19,361 Samsung Electronics Co. $ 3,228,178
155,070 Samsung Corp. 2,456,298
98,900 Shinhan Bank 1,047,128
8,537 Sindo Ricoh 290,379
46,300 Sk Corp. 887,787
-------------
18,452,198
- ------------------------------------------------------------
The Philippines--0.5%
1,603,600 Ayala Land, Inc. 409,898
69,300 Manila Electric Co. 'B' 190,100
42,630 Metropolitan Bank & Trust Co. 318,928
9,000 Philippine Long Distance Telephone
Co. (ADR)(b) 185,063
-------------
1,103,989
- ------------------------------------------------------------
Singapore--4.7%
196,000 City Developments, Ltd. 1,014,505
34,000 Cycle & Carriage, Ltd. 115,618
151,250 DBS Land, Ltd. 280,379
105,833 Development Bank of Singapore, Ltd. 1,197,509
143,800 Elec & Eltek International Co., Ltd. 488,920
114,000 Natsteel Electronics, Ltd. 445,983
129,600 Oversea-Chinese Banking Corp., Ltd. 975,023
118,083 Overseas Union Bank, Ltd. 511,704
106,000 Sembawang Maritime, Ltd. 395,546
401,000 Sembcorp Industries, Ltd. 506,831
87,000 Singapore Airlines, Ltd. 921,577
45,900 Singapore Press Holdings, Ltd. 787,331
472,000 Singapore Technologies Engineering,
Ltd.(a) 684,634
457,000 Singapore Telecommunications, Ltd. 869,166
38,000 United Overseas Bank, Ltd. 288,173
35,000 Venture Manufacturing, Ltd. 311,766
-------------
9,794,665
- ------------------------------------------------------------
Taiwan--5.1%
28,100 Advanced Semiconductor Engineering,
Inc. (GDR)(a) 569,025
190,599 Asustek Computer, Inc.(a) 2,000,929
732,652 Bank Sinopac 413,445
251,620 Cathay Life Insurance Co., Ltd. 650,468
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
Portfolio of Investments as
of October 31, 1999 PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Taiwan (cont'd.)
1,193,000 Chinatrust Commercial Bank $ 1,094,461
168,093 Compal Electronics, Inc.(a) 564,373
360,800 D-Link Corp. 602,850
578,000 Formosa Plastics Corp. 1,157,093
407,369 Phoenixtec Power Co., Ltd.(a) 828,351
57,820 President Chain Store Corp. 163,143
752,640 Taishin International Bank 429,470
451,643 Taiwan Semiconductor Manufacturing
Co.(a) 2,007,619
-------------
10,481,227
- ------------------------------------------------------------
Thailand--2.1%
47,100 Advanced Info Service Public Co.,
Ltd. 549,022
148,700 Bangkok Bank Public Co., Ltd. 346,665
178,700 BEC World Public Co., Ltd. 1,083,170
409,500 Electricity Generating Public Co.,
Ltd. 540,979
94,900 PTT Exploration & Production Public
Co., Ltd. 693,221
16,800 Siam Cement Public Co., Ltd. (a) 435,177
437,200 Thai Farmers Bank Public Co., Ltd. 617,210
-------------
4,265,444
-------------
Total common stocks
(cost $138,693,773) 179,084,422
-------------
Units
WARRANTS(a)
- ------------------------------------------------------------
Indonesia
PT Bank Pan Indonesia Tbk
834,300 expiring June 2000 @ IDR573
(cost $0) 32,933
-------------
Total long-term investments
(cost $138,693,773) 179,117,355
-------------
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS--10.2%
United States--10.2%
- ------------------------------------------------------------
U.S. Government Securities--0.2%
United States Treasury Bills(b)
$300 5.148%, 12/2/99 $ 296,379
50 5.24%, 3/9/00 49,150
(cost $345,505)
-------------
345,529
-------------
- ------------------------------------------------------------
Repurchase Agreement--10.0%
20,687 Joint Repurchase Agreement Account,
5.214%, 11/1/99
(cost $20,687,000; Note 5) 20,687,000
-------------
Total short-term investments
(cost $21,032,505) 21,032,529
- ------------------------------------------------------------
Total Investments--96.6%
(cost $159,726,278; Note 4) 200,149,884
Other assets in excess of
liabilities--3.4% 7,341,708
-------------
Net Assets--100% $ 207,491,592
-------------
-------------
</TABLE>
- ---------------
(a) Non-income producing security.
(b) Pledged as initial margin with a broker for financial futures contracts.
(c) Illiquid security.
ADR--American Depository Receipt.
GDR--Global Depository Receipt.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
Portfolio of Investments as
of October 31, 1999 PRUDENTIAL PACIFIC GROWTH FUND, INC.
- ------------------------------------------------------------
The industry classification of portfolio holdings and other
assets in excess of liabilities shown as a percentage of net
assets as of October 31, 1999 was as follows:
Commercial Banking.................................... 10.7%
Repurchase Agreements................................. 10.0
Electronic Components................................. 7.7
Telecommunications.................................... 5.4
Retail................................................ 4.8
Chemicals............................................. 3.9
Computer Software & Services.......................... 3.7
Diversified Industries................................ 3.4
Electronics........................................... 3.0
Commercial Services................................... 2.9
Real Estate........................................... 2.8
Diversified Operations................................ 2.7
Medical Products...................................... 2.4
Insurance............................................. 2.4
Food & Beverage....................................... 2.4
Mining................................................ 2.0
Broadcasting & Publishing............................. 1.9
Utilities-Electric & Gas.............................. 1.8
Machinery & Equipment................................. 1.8
Financial Services.................................... 1.6
Building Materials.................................... 1.6
Office Equipment & Supplies........................... 1.5
Cosmetics/Toiletries.................................. 1.5
Audio/Visual.......................................... 1.5
Steel - Producers..................................... 1.3
Containers............................................ 1.3
Restaurants........................................... 1.2
Oil & Gas Services.................................... 1.2
Health Care Services.................................. 1.2
Computers............................................. 1.2
Real Estate-Development............................... 1.1
Plastic Products...................................... 0.6
Engineering & Construction............................ 0.6
Diversified Consumer Products......................... 0.6
Business & Public Services............................ 0.6
Miscellaneous......................................... 0.4
Airlines.............................................. 0.4
Gaming................................................ 0.3
Building & Construction............................... 0.3
U.S. Government Securities............................ 0.2
Energy Equipment & Services........................... 0.2
Auto & Truck.......................................... 0.2
Forest Products & Paper............................... 0.1
Electrical Goods & Equipment.......................... 0.1
Other assets in excess of liabilities................. 3.5
-----
100.0%
-----
-----
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7
<PAGE>
Statement of Assets and Liabilities PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets October 31, 1999
<S> <C>
Investments, at value (cost $139,039,278)................................................................. $179,462,884
Repurchase agreements, at value (cost $20,687,000)........................................................ 20,687,000
Foreign currency, at value (cost $7,077,104).............................................................. 7,541,257
Cash...................................................................................................... 481,810
Receivable for investments sold........................................................................... 2,764,446
Receivable for Fund shares sold........................................................................... 2,649,317
Forward currency contracts - amount receivable from counterparties........................................ 1,872,153
Dividends and interest receivable......................................................................... 240,293
Due from broker - variation margin........................................................................ 27,200
Deferred expenses and other assets........................................................................ 12,670
----------------
Total assets........................................................................................... 215,739,030
----------------
Liabilities
Payable for Fund shares reacquired........................................................................ 4,024,814
Payable for investments purchased......................................................................... 1,869,068
Forward currency contracts - amount payable to counterparties............................................. 1,839,695
Withholding taxes payable................................................................................. 152,111
Accrued expenses.......................................................................................... 138,926
Management fee payable.................................................................................... 121,104
Distribution fee payable.................................................................................. 101,720
----------------
Total liabilities...................................................................................... 8,247,438
----------------
Net Assets................................................................................................ $207,491,592
----------------
----------------
Net assets were comprised of:
Common stock, at par................................................................................... $ 15,095
Paid-in capital in excess of par....................................................................... 193,586,788
----------------
193,601,883
Undistributed net investment income.................................................................... 1,775,693
Accumulated net realized loss on investments, foreign currency transactions and financial futures...... (28,701,739)
Net unrealized appreciation on investments, foreign currencies and financial futures................... 40,815,755
----------------
Net assets, October 31, 1999.............................................................................. $207,491,592
----------------
----------------
Class A:
Net asset value and redemption price per share
($49,338,135 / 3,520,884 shares of common stock issued and outstanding)............................. $14.01
Maximum sales charge (5% of offering price)............................................................ .74
----------------
Maximum offering price to public....................................................................... $14.75
----------------
----------------
Class B:
Net asset value, offering price and redemption price per share
($107,769,208 / 7,982,548 shares of common stock issued and outstanding)............................ $13.50
----------------
----------------
Class C:
Net asset value and redemption price per share
($7,072,911 / 523,863 shares of common stock issued and outstanding)................................ $13.50
Sales charge (1% of offering price).................................................................... .14
----------------
Offering price to public............................................................................... $13.64
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per share
($43,311,338 / 3,067,424 shares of common stock issued and outstanding)............................. $14.12
----------------
----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 8
<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Operations
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Loss October 31, 1999
<S> <C>
Income
Dividends (net of foreign withholding
taxes
of $130,852)......................... $ 1,728,082
Interest (net of foreign witholding
taxes of $3,626)..................... 245,615
----------------
Total income......................... 1,973,697
----------------
Expenses
Management fee.......................... 1,067,910
Distribution fee--Class A............... 78,202
Distribution fee--Class B............... 851,933
Distribution fee--Class C............... 31,029
Transfer agent's fees and expenses...... 441,000
Custodian's fees and expenses........... 335,000
Registration fees....................... 66,200
Reports to shareholders................. 60,000
Audit fees and expenses................. 36,000
Legal fees and expenses................. 35,000
Directors' fees......................... 26,000
Miscellaneous........................... 23,232
----------------
Total expenses....................... 3,051,506
----------------
Net investment loss........................ (1,077,809)
----------------
Realized and Unrealized Gain (Loss) on
Investments, Foreign Currency and
Financial Futures Transactions
Net realized gain (loss) on:
Investment transactions................. 20,732,041
Foreign currency transactions........... (1,801,195)
Financial futures transactions.......... (791,411)
----------------
18,139,435
----------------
Net change in unrealized appreciation (depreciation) on:
Investments............................. 45,747,964
Foreign currencies...................... 1,830,994
Financial futures....................... 144,278
----------------
47,723,236
----------------
Net gain on investments, foreign currencies
and financial futures................... 65,862,671
----------------
Net Increase in Net Assets
Resulting from Operations.................. $ 64,784,862
----------------
----------------
</TABLE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended October 31,
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment income
(loss)................... $ (1,077,809) $ 183,911
Net realized gain (loss) on
investments, foreign
currency transactions and
financial futures........ 18,139,435 (43,735,875)
Net change in unrealized
appreciation on
investments, foreign
currency transactions and
financial futures........ 47,723,236 17,748,671
------------- ---------------
Net increase (decrease) in
net assets resulting from
operations............... 64,784,862 (25,803,293)
------------- ---------------
Distributions from net
investment income
Class A.................. (200,274) (1,079,173)
Class B.................. (82,000) (2,945,918)
Class C.................. (1,966) (50,643)
Class Z.................. (143,977) (685,936)
------------- ---------------
(428,217) (4,761,670)
------------- ---------------
Distributions from net
realized gains
Class A.................. -- (2,309,696)
Class B.................. -- (8,685,264)
Class C.................. -- (149,828)
Class Z.................. -- (1,332,334)
------------- ---------------
-- (12,477,122)
------------- ---------------
Fund share transactions (net of
share conversions) (Note 6)
Net proceeds from shares
sold..................... 413,445,094 141,655,986
Net asset value of shares
issued in reinvestment of
distributions............ 412,010 16,174,424
Cost of shares reacquired... (381,886,447) (190,629,423)
------------- ---------------
Net increase (decrease) in
net assets from Fund
share transactions....... 31,970,657 (32,799,013)
------------- ---------------
Total increase (decrease)...... 96,327,302 (75,841,098)
Net Assets
Beginning of year.............. 111,164,290 187,005,388
------------- ---------------
End of year(a)................. $ 207,491,592 $ 111,164,290
------------- ---------------
------------- ---------------
(a) Includes undistributed net
investment income of....... $ 1,775,693 $ 5,082,914
------------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 9
<PAGE>
Notes to Financial Statements PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
Prudential Pacific Growth Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund was incorporated in Maryland on August 14, 1991 and commenced
investment operations on July 24, 1992. The investment objective of the Fund is
to seek long-term capital growth by investing primarily in common stocks, common
stock equivalents and other securities of companies doing business in or
domiciled in the Pacific Basin region.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities 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.
Any securities or other assets for which current market quotations are not
readily available are valued at fair value as determined in good faith under
procedures established by and under the general supervision and responsibility
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.
Repurchase Agreements: 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 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 at the foreign exchange rates
and market values at the close of the 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 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 period. Accordingly, realized foreign currency gains (losses) are
included in the reported net realized gain on investment transactions.
Net realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from forward currency contracts, 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 interest, dividends and foreign taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net currency
gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of
unrealized appreciation (depreciation) on investments and 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 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.
- --------------------------------------------------------------------------------
10
<PAGE>
Notes to Financial Statements PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of securities at a set price
for delivery on a future date. Upon entering into a financial futures contract,
the Fund is required to pledge to the broker an amount of cash and/or other
assets equal to a certain percentage of the contract amount. This amount is
known as the 'initial margin.' Subsequent payments, known as 'variation margin,'
are made or received by the Fund each day, depending on the daily fluctuations
in the value of the underlying security. Such variation margin is recorded for
financial statement purposes on a daily basis as unrealized gain or loss. When
the contract expires or is closed, the gain or loss is realized and is presented
in the statement of operations as net realized gain (loss) on financial futures
contracts.
The Fund invests in financial futures contracts in order to hedge existing
portfolio securities, or securities the Fund intends to purchase, against
fluctuations in value. Under a variety of circumstances, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts and the underlying
assets.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign 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. Expenses are recorded on the accrual basis which
may require the use of certain estimates by management.
Net investment income or loss, 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.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital and currency gains, if any,
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.
Taxes: It is the Fund's policy 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 dividends, interest and capital gains have been
provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' 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 decrease undistributed net investment income by $1,801,195
and increase accumulated net realized gains by $1,801,195 for differences in the
treatment for book and tax purposes of certain transactions involving foreign
securities, currencies and withholding taxes. Net investment income, net
realized gains and net assets were not affected by this change.
- ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM 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. PIFM 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.
The management fee paid PIFM is computed daily and payable monthly at an annual
rate of .75 of 1% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A, Class B,
Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution, (the 'Class A, Class B and Class C Plans'),
regardless of expenses actually incurred by them. The distribution fees are
accrued daily and payable monthly. No distribution or service fees are paid to
PIMS as distributor of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS 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 Class A, Class B and Class C Plans
- --------------------------------------------------------------------------------
11
<PAGE>
Notes to Financial Statements PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
were .25%, 1% and 1%, respectively, of the average daily net assets of the Class
A, Class B and Class C shares for the year ended October 31, 1999.
PIMS has advised the Fund that it received approximately $70,700 and $21,600 in
front-end sales charges resulting from sales of Class A and Class C shares,
respectively, during the year ended October 31, 1999. From these fees, PIMS paid
such sales charges to affiliated broker-dealers, which in turn paid commissions
to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the year ended October 31, 1999, it received
approximately $200,700 and $5,200 in contingent deferred sales charges imposed
upon certain redemptions by Class B and Class C shareholders, respectively.
PIMS, PIFM and PIC are wholly owned subsidiaries of The Prudential Insurance
Company of America ('Prudential').
As of March 11, 1999, the Fund, along with other affiliated registered
investment companies (the 'Funds'), entered into a syndicated agreement ('SCA')
with an unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any borrowings will be at market rates. The Funds pay a commitment
fee at an annual rate of .065 of 1% on the unused portion of the credit
facility, which is accrued and paid quarterly on a pro rata basis by the Funds.
The SCA expires on March 9, 2000. Prior to March 11, 1999, the Funds had a
credit agreement with a maximum commitment of $200,000,000. The commitment fee
was .055 of 1% on the unused portion of the credit facility. The Fund did not
borrow any amounts pursuant to either agreement during the year ended October
31, 1999. The purpose of the agreements is to serve as an alternative source of
funding for capital share redemptions.
- ------------------------------------------------------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the year ended October 31, 1999, the
Fund incurred fees of approximately $391,700 for the services of PMFS. As of
October 31, 1999, approximately $33,000 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 nonaffiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the year ended October 31, 1999 were $172,664,374 and $134,436,874,
respectively.
At October 31, 1999, the Fund had outstanding forward currency contracts, both
to purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
<S> <C> <C> <C>
- -------------------- --------------- ----------- --------------
Japanese Yen,
expiring 11/8/99 -
12/7/99........... $14,187,041 $16,059,194 $ 1,872,153
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Date Current Appreciation
Sale Contracts Payable Value (Depreciation)
<S> <C> <C> <C>
- -------------------- --------------- ----------- --------------
Hong Kong Dollars,
expiring
4/26/00........... $ 7,663,569 $ 7,701,002 $ (37,433)
Japanese Yen,
expiring 11/8/99 -
12/7/99........... 14,059,947 15,862,209 (1,802,262)
--------------- ----------- --------------
$21,723,516 $23,563,211 $ (1,839,695)
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>
The federal income tax basis of the Fund's investments at October 31, 1999 was
$160,327,418 and accordingly, net unrealized appreciation for federal income tax
purposes was $39,822,466 (gross unrealized appreciation--$46,473,850; gross
unrealized depreciation--$6,651,384).
For federal income tax purposes, the Fund had a capital loss carryforward as of
October 31, 1999 of approximately $28,532,000 which expires in 2006.
Accordingly, no capital gains distributions are expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
During the year ended October 31, 1999, the Fund entered into financial futures
contracts. Details of open contracts at October 31, 1999 are as follows:
<TABLE>
<CAPTION>
Value at Value at
Number of Expiration October 31, Trade Unrealized
Contracts Type Date 1999 Date Appreciation
- ----------- ----------- ------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Long Position:
Nikkei 225
17 (CME) Dec. 99 $1,530,850 $1,497,225 $ 33,625
------
------
</TABLE>
- ------------------------------------------------------------
Note 5. Joint Repurchase Agreement Account
The Fund, 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 October 31, 1999, the Fund
had a 2.2% undivided interest in the repurchase agreements in the joint account.
The undivided interest for the Fund represented $20,687,000 in principal amount.
As of such date, each
- --------------------------------------------------------------------------------
12
<PAGE>
Notes to Financial Statements PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
repurchase agreement in the joint account and the value of the collateral
therefore was as follows:
Bear, Stearns & Co. Inc., 5.23%, in the principal amount of $250,000,000,
repurchase price $250,108,958, due 11/1/99. The value of the collateral
including accrued interest was $255,352,721.
Goldman, Sachs & Co., 5.18%, in the principal amount of $194,830,000, repurchase
price $194,914,102, due 11/1/99. The value of the collateral including accrued
interest was $198,727,175.
Morgan (J.P.) Securities, Inc., 5.22%, in the principal amount of $250,000,000,
repurchase price $250,108,750, due 11/1/99. The value of the collateral
including accrued interest was $255,000,115.
Salomon Smith Barney, Inc., 5.22%, in the principal amount of $250,000,000,
repurchase price $250,108,750, due 11/1/99. The value of the collateral
including accrued interest was $255,452,608.
- ------------------------------------------------------------
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with an initial sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending upon
the period of time the shares are held. Prior to November 2, 1998 Class C shares
were sold with a contingent deferred sales charge of 1% during the first year.
Effective November 2, 1998, Class C shares are sold with a front-end sales
charge of 1% and a contigent deferred sales charge of 1% during the first 18
months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualify to purchase Class A
shares at net asset value. Class Z shares are not subject to any sales or
redemption charge and are offered exclusively for sale to a limited group of
investors.
The Fund has authorized 2 billion shares of common stock at $.001 par value per
share divided into four classes, designated Class A, Class B, Class C and Class
Z common stock each consisting of 500 million authorized shares.
Transactions in shares of common stock for the year ended October 31, 1999 and
1998 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- --------------------------------- ----------- ---------------
<S> <C> <C>
Year ended October 31, 1999:
Shares sold...................... 11,346,118 $ 134,170,719
Shares issued in reinvestment of
distributions.................. 20,322 188,589
Shares reacquired................ (10,664,886) (126,529,666)
----------- ---------------
Net increase in shares
outstanding before
conversion..................... 701,554 7,829,642
Shares issued upon conversion
from Class B................... 343,160 4,472,184
----------- ---------------
Net increase in shares
outstanding.................... 1,044,714 $ 12,301,826
----------- ---------------
----------- ---------------
Year ended October 31, 1998:
Shares sold...................... 4,437,257 $ 42,845,381
Shares issued in reinvestment of
distributions.................. 329,658 3,143,003
Shares reacquired................ (5,369,479) (52,502,540)
----------- ---------------
Net decrease in shares
outstanding before
conversion..................... (602,564) (6,514,156)
Shares issued upon conversion
from Class B................... 143,203 1,354,722
----------- ---------------
Net decrease in shares
outstanding.................... (459,361) $ (5,159,434)
----------- ---------------
----------- ---------------
<CAPTION>
Class B
- ---------------------------------
<S> <C> <C>
Year ended October 31, 1999:
Shares sold...................... 5,245,557 $ 59,201,089
Shares issued in reinvestment of
distributions.................. 8,624 77,617
Shares reacquired................ (5,390,404) (58,251,940)
----------- ---------------
Net decrease in shares
outstanding before
conversion..................... (136,223) 1,026,766
Shares reacquired upon conversion
into Class A................... (355,605) (4,472,184)
----------- ---------------
Net decrease in shares
outstanding.................... (491,828) $ (3,445,418)
----------- ---------------
----------- ---------------
Year ended October 31, 1998:
Shares sold...................... 3,108,133 $ 29,692,991
Shares issued in reinvestment of
distributions.................. 1,170,551 10,820,405
Shares reacquired................ (6,591,555) (63,034,383)
----------- ---------------
Net decrease in shares
outstanding before
conversion..................... (2,312,871) (22,520,987)
Shares reacquired upon conversion
into Class A................... (148,409) (1,354,722)
----------- ---------------
Net decrease in shares
outstanding.................... (2,461,280) $ (23,875,709)
----------- ---------------
----------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
Notes to Financial Statements PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Shares Amount
- --------------------------------- ----------- ---------------
<S> <C> <C>
Year ended October 31, 1999:
Shares sold...................... 3,334,684 $ 37,227,569
Shares issued in reinvestment of
distributions.................. 215 1,933
Shares reacquired................ (2,999,313) (33,491,014)
----------- ---------------
Net increase in shares
outstanding.................... 335,586 $ 3,738,488
----------- ---------------
----------- ---------------
Year ended October 31, 1998:
Shares sold...................... 1,915,959 $ 17,541,510
Shares issued in reinvestment of
distributions.................. 21,081 194,900
Shares reacquired................ (1,997,866) (18,435,258)
----------- ---------------
Net decrease in shares
outstanding.................... (60,826) $ (698,848)
----------- ---------------
----------- ---------------
<CAPTION>
Class Z
- ---------------------------------
<S> <C> <C>
Year ended October 31, 1999:
Shares sold...................... 15,314,574 $ 182,845,717
Shares issued in reinvestment of
distributions.................. 15,420 143,871
Shares reacquired................ (13,617,992) (163,613,827)
----------- ---------------
Net increase in shares
outstanding.................... 1,712,002 $ 19,375,761
----------- ---------------
----------- ---------------
Year ended October 31, 1998:
Shares sold...................... 5,371,303 $ 51,576,104
Shares issued in reinvestment of
distributions.................. 211,034 2,016,116
Shares reacquired................ (5,816,918) (56,657,242)
----------- ---------------
Net decrease in shares
outstanding.................... (234,581) $ (3,065,022)
----------- ---------------
----------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
14
<PAGE>
Financial Highlights PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(a)
---------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............ $ 9.14 $ 12.22 $ 15.86 $ 15.75 $ 16.90
------- ------- ------- -------- --------
Income from investment operations
Net investment income (loss).................. (.04) .06 .02 .07 .04
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 4.99 (1.88) (3.31) .23 (1.09)
------- ------- ------- -------- --------
Total from investment operations........... 4.95 (1.82) (3.29) .30 (1.05)
------- ------- ------- -------- --------
Less distributions
Distributions from net investment income...... (.08) -- -- -- --
Distributions in excess of net investment
income..................................... -- (.40) -- (.19) --
Distributions from net realized gains......... -- (.86) (.35) -- (.10)
------- ------- ------- -------- --------
Total distributions........................ (.08) (1.26) (.35) (.19) (.10)
------- ------- ------- -------- --------
Net asset value, end of year.................. $ 14.01 $ 9.14 $ 12.22 $ 15.86 $ 15.75
------- ------- ------- -------- --------
------- ------- ------- -------- --------
TOTAL RETURN(b)............................... 55.11% (15.53)% (21.32)% 1.97% (6.23)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $49,338 $22,624 $35,860 $113,585 $ 98,998
Average net assets (000)...................... $31,281 $26,845 $73,942 $106,148 $101,920
Ratios to average net assets:
Total expenses............................. 1.72% 1.70% 1.48% 1.37% 1.46%
Operating expenses, including distribution
fees.................................... 1.72% 1.70% 1.42% 1.37% 1.46%
Operating expenses, excluding distribution
fees.................................... 1.47% 1.45% 1.17% 1.12% 1.21%
Net investment income (loss)............... (.34)% .63% .14% .44% .26%
For Class A, B, C and Z shares:
Portfolio turnover rate.................... 104% 94% 81% 91% 54%
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) 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 year reported and includes reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 15
<PAGE>
Financial Highlights PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B(a)
-----------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............ $ 8.79 $ 11.77 $ 15.40 $ 15.38 $ 16.62
-------- ------- -------- -------- --------
Income from investment operations
Net investment loss........................... (.12) (.01) (.09) (.04) (.08)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 4.84 (1.82) (3.19) .25 (1.06)
-------- ------- -------- -------- --------
Total from investment operations........... 4.72 (1.83) (3.28) .21 (1.14)
-------- ------- -------- -------- --------
Less distributions
Distributions from net investment income...... (.01) -- -- -- --
Distributions in excess of net investment
income..................................... -- (.29) -- (.19) --
Distributions from net realized gains......... -- (.86) (.35) -- (.10)
-------- ------- -------- -------- --------
Total distributions........................ (.01) (1.15) (.35) (.19) (.10)
-------- ------- -------- -------- --------
Net asset value, end of year.................. $ 13.50 $ 8.79 $ 11.77 $ 15.40 $ 15.38
-------- ------- -------- -------- --------
-------- ------- -------- -------- --------
TOTAL RETURN(b)............................... 54.28% (16.32)% (21.84)% 1.36% (6.82)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $107,769 $74,457 $128,694 $327,315 $344,313
Average net assets (000)...................... $ 85,193 $91,983 $244,462 $357,548 $368,771
Ratios to average net assets:
Total expenses............................. 2.47% 2.45% 2.23% 2.12% 2.21%
Operating expenses, including distribution
fees.................................... 2.47% 2.45% 2.17% 2.12% 2.21%
Operating expenses, excluding distribution
fees.................................... 1.47% 1.45% 1.17% 1.12% 1.21%
Net investment loss........................ (1.09)% (.12)% (.61)% (.25)% (.55)%
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) 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 year reported and includes reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 16
<PAGE>
Financial Highlights PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C(a)
---------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ -------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............ $ 8.79 $11.77 $15.40 $ 15.38 $ 16.62
------ ------ ------ -------- -----
Income from investment operations
Net investment loss........................... (.12) (.01) (.09) (.04) (.08)
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 4.84 (1.82) (3.19) .25 (1.06)
------ ------ ------ -------- -----
Total from investment operations........... 4.72 (1.83) (3.28) .21 (1.14)
------ ------ ------ -------- -----
Less distributions
Distributions from net investment income...... (.01) -- -- -- --
Distributions in excess of net investment
income..................................... -- (.29) -- (.19) --
Distributions from net realized gains......... -- (.86) (.35) -- (.10)
------ ------ ------ -------- -----
Total distributions........................ (.01) (1.15) (.35) (.19) (.10)
------ ------ ------ -------- -----
Net asset value, end of year.................. $13.50 $ 8.79 $11.77 $ 15.40 $ 15.38
------ ------ ------ -------- -----
------ ------ ------ -------- -----
TOTAL RETURN(b)............................... 54.28% (16.32)% (21.84)% 1.36% (6.82)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $7,073 $1,654 $2,932 $ 12,360 $ 2,443
Average net assets (000)...................... $3,103 $2,276 $6,557 $ 6,402 $ 1,624
Ratios to average net assets:
Total expenses............................. 2.47% 2.45% 2.23% 2.12% 2.21%
Operating expenses, including distribution
fees.................................... 2.47% 2.45% 2.17% 2.12% 2.21%
Operating expenses, excluding distribution
fees.................................... 1.47% 1.45% 1.17% 1.12% 1.21%
Net investment loss........................ (1.09)% (.12)% (.61)% (.25)% (.43)%
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) 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 year reported and includes reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 17
<PAGE>
Financial Highlights PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class Z(a)
-----------------------------------------------
March 1,
1996(c)
Year Ended October 31, Through
------------------------------- October 31,
1999 1998 1997 1996
------- ------- ------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 9.17 $ 12.28 $ 15.89 $ 16.57
------- ------- ------- -----------
Income from investment operations
Net investment income......................... -- .08 .06 .11
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................... 5.06 (1.89) (3.32) (.79)
------- ------- ------- -----------
Total from investment operations........... 5.06 (1.81) (3.26) (.68)
------- ------- ------- -----------
Less distributions
Distributions from net investment income...... (.11) -- -- --
Distributions in excess of net investment
income..................................... -- (.44) -- --
Distributions from net realized gains......... -- (.86) (.35) --
------- ------- ------- -----------
Total distributions........................ (.11) (1.30) (.35) --
------- ------- ------- -----------
Net asset value, end of period................ $ 14.12 $ 9.17 $ 12.28 $ 15.89
------- ------- ------- -----------
------- ------- ------- -----------
TOTAL RETURN(b)............................... 56.05% (15.36)% (21.02)% (4.09)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $43,311 $12,429 $19,520 $37,288
Average net assets (000)...................... $22,811 $15,099 $31,945 $33,868
Ratios to average net assets:
Total expenses............................. 1.47% 1.45% 1.23% 1.12%(c)
Operating expenses, including distribution
fees.................................... 1.47% 1.45% 1.17% 1.12%(c)
Operating expenses, excluding distribution
fees.................................... 1.47% 1.45% 1.17% 1.12%(c)
Net investment income (loss)............... (.03)% .82% .39% .68%(c)
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) 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.
(c) Commencement of offering of Class Z shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 18
<PAGE>
Report of Independent Accountants PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Prudential Pacific Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Pacific Growth Fund,
Inc. (the 'Fund') at October 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as 'financial statements') are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above. The accompanying financial highlights for each of the two periods in the
period ended October 31, 1996 were audited by other independent accountants,
whose opinion dated December 12, 1996 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 20, 1999
- --------------------------------------------------------------------------------
19
<PAGE>
Federal Income Tax Information (Unaudited) PRUDENTIAL PACIFIC GROWTH FUND, INC.
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (October 31, 1999) as to the federal tax status of
dividends paid by the Fund during such fiscal year. Accordingly, we are advising
you that in the fiscal year ended October 31, 1999, the Fund paid ordinary
dividends of $.08 per Class A share, $.01 per Class B share, $.01 per Class C
share and $.105 per Class Z share.
The Fund has elected to give the benefit of foreign tax credits to its
shareholders. Accordingly, shareholders who must report their gross income
dividends and distributions in a federal income tax return will be entitled to a
foreign tax credit, or an itemized deduction, in computing their U.S. income tax
liability. It is generally more advantageous to claim a credit rather than to
take a deduction. For the fiscal year ended October 31, 1999, the Fund intends
on passing through 5.20% of ordinary income distributions as a foreign tax
credit.
We wish to advise you that the corporate dividends received deduction for the
Fund is zero. Only funds that invest in U.S. equity securities are entitled to
pass-through a corporate dividends received deduction.
In January 2000, you will be advised on IRS Form 1099 DIV, or substitute Form
1099, as to the federal tax status of the distributions received by you in
calendar year 1999.
- --------------------------------------------------------------------------------
20
<PAGE>
Getting the Most from Your Prudential Mutual Fund
How many times have you read these reports--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: 1/100th of 1%. For example, one-half of
one percent is 50 basis points.
Collateralized Mortgage Obligations (CMOs): Mortgage-backed
bonds that separate mortgage pools into different maturity
classes, called tranches. 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 other
securities. The rate of return of these financial instruments
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 member banks.
Federal Funds Rate: The interest rate charged by one bank
to another on overnight loans.
Futures Contract: An agreement to purchase or sell a
specific amount of a commodity or financial instrument
at a set price at a specified date in the future.
Leverage: The use of borrowed assets to enhance return.
The expectation is that the interest rate charged on
borrowed funds 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 product) 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 purchase or 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; often used to
describe the difference between "bid" and "asked" prices
of a security, or between the yields of two similar maturity bonds.
Yankee Bond: A bond sold by a foreign company or government
in the U.S. market and denominated in U.S. dollars.
<PAGE>
Getting the Most from Your Prudential Mutual Fund
Some mutual fund shareholders won't ever read this--they
don't read annual and semiannual reports. It's quite
understandable. These annual and semiannual reports
are prepared to comply with federal regulations, and
are often written in language that is difficult to
understand. So, when most people run into those
particularly daunting sections of these reports,
they don't read them.
We think that's a mistake.
At Prudential Mutual Funds, we've made some changes to
our report to make it easier to understand and more
pleasant to read. We hope you'll find it profitable
to spend a few minutes familiarizing yourself with
your investment. Here's what you'll find in the report:
Performance at a Glance
Since an investment's performance is often a shareholder's
primary concern, we present performance information in two
different formats. You'll find it first on the "Performance
at a Glance" page where we compare the Fund and the comparable average
calculated by Lipper, Inc., a nationally recognized mutual
fund rating agency. We report both the cumulative total
returns and the average annual total returns. The cumulative
total return is the total amount of income and appreciation
the Fund has achieved in various time periods. The average
annual total return is an annualized representation of the
Fund's performance. It gives you an idea of how much the
Fund has earned in an average year for a given time period.
Under the performance box, you'll see legends that explain
the performance information, whether fees and sales charges
have been included in returns, and the inception dates for
the Fund's share classes.
See the performance comparison charts at the back of the
report for more performance information. Please keep in
mind that past performance is not indicative of future results.
Portfolio Manager's Report
The portfolio manager, who invests your money for you,
reports on successful--and not-so-successful--strategies
in this section of your report. Look for recent purchases
and sales here, as well as information about the sectors
the portfolio manager favors, and any changes that are on
the drawing board.
Portfolio of Investments
This is where the report begins to appear technical, but
it's really just a listing of each security held at the
end of the reporting period, along with valuations and
other information. Please note that sometimes we discuss
a security in the Portfolio Manager's Report that doesn't
appear in this listing because it was sold before the
close of the reporting period.
<PAGE>
Statement of Assets and Liabilities
The balance sheet shows the assets (the value of the
Fund's holdings), liabilities (how much the Fund owes),
and net assets (the Fund's equity, or holdings after the
Fund pays its debts) as of the end of the reporting period.
It also shows how we calculate the net asset value per share
for each class of shares. The net asset value is reduced by
payment of your dividend, capital gain, or other distribution,
but remember that the money or new shares are being paid or
issued to you. The net asset value fluctuates daily, along
with the value of every security in the portfolio.
Statement of Operations
This is the income statement, which details income (mostly
interest and dividends earned) and expenses (including what
you pay us to manage your money). You'll also see capital
gains here--both realized and unrealized.
Statement of Changes in Net Assets
This schedule shows how income and expenses translate into
changes in net assets. The Fund is required to pay out the
bulk of its income to shareholders every year, and this
statement shows you how we do it--through dividends and
distributions--and how that affects the net assets. This
statement also shows how money from investors flowed
into and out of the Fund.
Notes to Financial Statements
This is the kind of technical material that can intimidate
readers, but it does contain useful information. The Notes
provide a brief history and explanation of your Fund's
objectives. In addition, they outline how Prudential Mutual
Funds prices securities. The Notes also explain who manages
and distributes the Fund's shares and, more importantly,
how much they are paid for doing so. Finally, the Notes
explain how many shares are outstanding and the number
issued and redeemed over the period.
Financial Highlights
This information contains many elements from prior pages,
but on a per-share basis. It is designed to help you
understand how the Fund performed, and to compare this
year's performance and expenses to those of prior years.
Independent Auditor's Report
Once a year, an outside auditor looks over our books and
certifies that the information is fairly presented and
complies with generally accepted accounting principles.
Tax Information
This is information which we report annually about how
much of your total return is taxable. Should you have
any questions, you may want to consult a tax adviser.
Performance Comparison
These charts are included in the annual report and are
required by the Securities Exchange Commission. Performance
is presented here as a hypothetical $10,000 investment in
the Fund since its inception or for 10 years (whichever is
shorter). To help you put that return in context, we are
required to include the performance of an unmanaged,
broad-based securities index as well. The index does
not reflect the cost of buying the securities it contains
or the cost of managing a mutual fund. Of
course, the index holdings do not mirror those of the
Fund--the index is a broad-based reference point commonly
used by investors to measure how well they are doing. A
definition of the selected index is also provided.
Investors cannot invest directly in an index.
<PAGE>
Comparing a $10,000 Investment
- ---------------------------------------------------
Prudential Pacific Growth Fund, Inc. vs. the Morgan
Stanley Capital International (MSCI) AC Asia Pacific Index
Class A Average Annual Total Returns
(GRAPH) As of 10/31/99
With Sales Load
Since Inception 6.78%
Five Years -1.31%
One Year 47.36%
Without Sales Load
Since Inception 7.53%
Five Years -0.29%
One Year 55.11%
Class B Average Annual Total Returns
(GRAPH) As of 10/31/99
With Sales Load
Since Inception 6.77%
Five Years -1.17%
One Year 49.28%
Without Sales Load
Since Inception 6.77%
Five Years -0.96%
One Year 54.28%
Past performance is not indicative of future results. Principal
and investment return will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The information beneath the graphs is designed to
give you an idea of how much the Fund's returns can fluctuate
from year to year by measuring the best and worst calendar years
in terms of total annual return since inception of each share class.
These graphs compare a $10,000 investment in the Prudential
Pacific Growth Fund, Inc. (Class A, B, C, and Z shares) with
a similar investment in the Morgan Stanley Capital International
(MSCI) All Country (AC) Asia Pacific Index (the Index) by
portraying the initial account values of Class A, B, C, and Z
shares at the commencement of operations, as measured on a
quarterly basis, beginning in 1992 for Class A and Class B,
1994 for Class C, and 1996 for Class Z shares, and at the
end of the fiscal year (October 31). For purposes of the
graphs, and unless otherwise indicated, it has been assumed
that (a) the maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in Class A and
Class C shares; (b) the maximum applicable contingent deferred
sales charges were deducted from the value of the investment
in Class B and Class C shares, assuming full
<PAGE>
Class C Average Annual Total Returns
(GRAPH) As of 10/31/99
With Sales Load
Since Inception -1.17%
Five Years -1.16%
One Year 51.74%
Without Sales Load
Since Inception -0.98%
Five Years -0.96%
One Year 54.28%
Class Z Average Annual Total Returns
(GRAPH) As of 10/31/99
Since Inception 0.01%
One Year 56.05%
redemption on October 31, 1999; (c) all recurring fees
(including management fees) were deducted; and (d) all
dividends and distributions were reinvested. Class B
shares will automatically convert to Class A shares, on
a quarterly basis, approximately seven years after
purchase. This conversion feature is not reflected
in the graphs. Class Z shares are not subject to a
sales charge or distribution and service (12b-1) fees.
The Index is a weighted, unmanaged index comprising
approximately 950 securities listed on the stock
exchanges of Australasia, Hong Kong, Japan, Malaysia,
Singapore, Indonesia, Sri Lanka, China (free), Pakistan,
Taiwan, India, Korea, the Philippines, and Thailand. The
Index returns include the reinvestment of all dividends,
but do not include the effect of sales charges or operating
expenses of a mutual fund. The securities in the Index may
differ substantially from the securities
in the Fund. The Index is not the only one that may be used
to characterize performance of equity funds, and other indexes
may portray different comparative performance. Investors
cannot invest directly in an index.
These graphs are furnished to you in accordance with SEC regulations.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Class NASDAQ Cusip
A PRPAX 743941106
B PRPBX 743941205
C -- 743941304
Z PPGZX 743941403
Trustees
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Robin B. Smith
Stephen Stoneburn
John R. Strangfeld
Nancy H. Teeters
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Robert C. Rosselot, Secretary
Stephen M. Ungerman, Assistant Treasurer
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street, Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza, Newark, NJ 07102-3777
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street, Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive, North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005, New Brunswick, NJ 08906
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas, New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street, New York, NY 10004
Prudential Investments is a unit of The Prudential Insurance
Company of America, 751 Broad Street, Newark, NJ 07102.
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.
This report is not authorized for distribution to
prospective investors unless preceded or accompanied
by a current prospectus.
MF157E
