The Prudential
Institutional
Fund
(LOGO)
SEMI-ANNUAL REPORT
MARCH 31, 1994
GROWTH STOCK FUND
STOCK INDEX FUND
INTERNATIONAL STOCK FUND
BALANCED FUND
<PAGE>
THE PRUDENTIAL
TABLE OF
(LOGO) INSTITUTIONAL
CONTENTS
FUND
<TABLE>
<S> <C>
LETTER TO SHAREHOLDERS 1
GROWTH STOCK FUND 2
STOCK INDEX FUND 5
INTERNATIONAL STOCK FUND 15
BALANCED FUND 19
FINANCIAL STATEMENTS 24
NOTES TO FINANCIAL STATEMENTS 28
</TABLE>
<PAGE>
<PAGE>
THE PRUDENTIAL
LETTER TO
(LOGO) INSTITUTIONAL
SHAREHOLDERS
FUND
May 11, 1994
We are pleased to provide you with the semi-annual report of The Prudential
Institutional Fund for the six months ended March 31, 1994. During this period,
the total net assets of the Fund's four portfolios have grown from $134.5
million on September 30, 1993 to $210.4 million on March 31, 1994. Each
portfolio continues to provide competitive investment results in pursuing its
own distinct investment objective and management style.
Economy
For the six months ended March 31, 1994, the U.S. economy grew at an annual
rate of 5%, as measured by the increase in gross domestic product (GDP).
Recoveries in housing and consumer durables and increased capital spending and
exports helped fuel U.S. economic expansion. Areas like defense, consumer
staples, energy and health care continue to be buffeted by persistent structural
changes.
Inflationary fears sparked by the growing economy caused the Federal Reserve
to increase short-term interest rates twice during the first quarter and again
in April. As a result, long-term rates also rose, and stock and bond markets
declined.
Market Review
For the six months ended March 31, 1994, the U.S. stock market, as measured
by the S&P 500, declined 1.6%. Following strong gains in 1993, the market
continued its upward rise through January 1994. By the end of March, however,
the market underwent a significant correction.
International stock markets, as measured by the Morgan Stanley Europe,
Australia, Far East Index (EAFE) rose 4.4% for the period. As in the U.S.,
overseas markets increased through January before pulling back somewhat in
February and March.
Rising U.S. rates also caused bond prices to erode. During the period, the
Lehman Aggregate Index declined 2.8%.
Fund Performance
With the exception of the International Stock Fund, Prudential Institutional
Fund returns generally declined during the six months ended March 31. Results
for one year and since inception for each Fund were positive and compared
favorably with their respective benchmark indices. Performance information,
comments from the investment adviser as well as holdings for each Fund can be
found in the following pages.
In summary, we are pleased with the growth in Fund assets and the performance
results achieved thus far. We again would like to emphasize the importance of
maintaining a long-term view toward investing retirement assets. Market declines
can provide an advantage for those who invest systematically (e.g., through
payroll deductions). We encourage all participants to pursue their retirement
investing with disciplined saving, diligent planning and appropriate time
horizons.
Sincerely,
Mark R. Fetting
President
1
<PAGE>
THE PRUDENTIAL
GROWTH STOCK FUND
(LOGO) INSTITUTIONAL
FUND
OBJECTIVE: To achieve long-term growth of capital through investment primarily
in equity securities of established companies with above-
average growth prospects. Current income, if any, is incidental.
INVESTMENT APPROACH: The Adviser concentrates
on large capitalization companies with the potential for above-average growth.
Stocks are selected on a company-by-company basis through the use of fundamental
analysis.
The Adviser looks for attractively valued companies that demonstrate superior
sales growth, high levels of unit growth, high return on assets and equity and
a
strong balance sheet.
ADVISER: The Growth Stock Fund is managed by Jennison Associates Capital Corp.
Founded in 1969 and acquired by The Prudential in 1985, Jennison adheres to
clearly defined investment philosophies and is dedicated to achieving superior
investment results for institutional investors. Jennison manages over $21
billion in equity, balanced and fixed income accounts.
ADVISER'S COMMENTS: Since the Fund's inception, the stock market has been
characterized by broad swings in performance, as the markets reacted to changing
economic fundamentals. Toward the end of the first quarter, the stock market
declined as the Federal Reserve raised interest rates to curtail potential
inflation. For the last two years, value stocks continued to outperform growth
stocks, and stocks of small companies have generally done better than those of
large companies. In both instances, the performance divergence has been
narrowing. While future results cannot be assured, we believe this points to a
possible trend toward superior relative performance for growth stocks in the
near future. As a medium-to large-capitalization growth stock fund, careful
selection of growth stocks will continue to be of primary importance in
providing positive results.
Since inception, the Fund has done reasonably well despite periods of short-term
underperformance. This has been a result of careful selection of reasonably
priced growth socks in several groups, including health care, selective consumer
staples, basic industry and technology. While there is no assurance as to future
results, we remain cautiously optimistic that the Fund should provide
competitive returns during the year, even if the market does not rise
significantly.
<TABLE>
<CAPTION>
PERFORMANCE RESULTS:
<S> <C> <C>
Periods ended 3/31/94 Fund S&P 500
------------------------- ------- ----------
Six Months............... -2.40% -1.55%
One Year................. 5.72% 1.47%
From Inception
(11/5/92)................ 12.76% 7.65%
</TABLE>
Returns from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends and distributions. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Past performance
cannot guarantee comparable future results. The manager is currently limiting
the expenses of the Fund. Without this reduction of expenses, the total return
would have been lower.
2
<PAGE>
<PAGE>
THE PRUDENTIAL
GROWTH STOCK FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks--97.8%
Banking--2.1%
21,200 Fleet Financial Group, Inc.......... $ 744,650
91,100 Hibernia Corp....................... 671,862
-----------
1,416,512
-----------
Chemical - Specialty--1.5%
9,700 Morton International, Inc........... 968,788
-----------
Computer Software & Services--6.3%
Computer Associates International,
37,300 Inc............................... 1,151,637
31,800 Oracle Systems Corp.*............... 1,019,588
20,500 Sybase, Inc.*....................... 927,625
57,000 Symbol Technologies, Inc.*.......... 1,097,250
-----------
4,196,100
-----------
Consumer Goods--6.3%
39,775 Bombay Co........................... 989,403
28,400 General Nutrition Cos, Inc.*........ 710,000
19,200 Goodyear Tire & Rubber Co........... 777,600
Kimberly Clark de Mexico S.A.
19,100 (Mexico).......................... 661,338
17,500 Perrigo Co.*........................ 389,375
36,500 Whole Foods Market, Inc.*........... 670,687
-----------
4,198,403
-----------
Cosmetics & Soaps--1.7%
18,200 Gillette Co......................... 1,151,150
-----------
Drugs & Medical Supplies--1.1%
20,900 Biogen, Inc.*....................... 728,888
-----------
Electronics--11.6%
25,200 Adobe Systems, Inc.................. 607,950
33,400 Hewlett-Packard Co.................. 2,742,975
24,200 Intel Corp.......................... 1,630,475
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
<C> <S> <C>
15,800 Microsoft Corp.*.................... $ 1,343,000
75,200 Novell, Inc.*....................... 1,358,300
-----------
7,682,700
-----------
Entertainment--4.2%
24,800 Disney (Walt) Co.................... 1,038,500
38,300 Gaylord Entertainment Co............ 967,075
14,900 Grupo Television S.A.* (Mexico)..... 759,900
-----------
2,765,475
-----------
Financial Services--5.6%
20,800 Block (H&R), Inc.................... 894,400
25,300 Dow Jones & Co., Inc................ 961,400
12,300 Federal National Mortgage Assn...... 956,325
16,400 First Financial Mgmt. Corp.......... 885,600
-----------
3,697,725
-----------
Food & Beverages--1.2%
36,300 McCormick & Co., Inc................ 784,988
-----------
Health Care Services--5.2%
59,400 United Healthcare Corp.............. 2,539,350
24,400 Value Health, Inc.*................. 936,350
-----------
3,475,700
-----------
Insurance--5.7%
21,200 EXEL Ltd............................ 850,650
26,500 Life Re Corp........................ 490,250
26,100 National Re Corp.................... 730,800
1 Travelers, Inc...................... 35
32,000 UNUM Corp........................... 1,688,000
-----------
3,759,735
-----------
Leisure--3.1%
35,500 Bell Sports Corp.*.................. 1,220,312
25,000 Hasbro, Inc......................... 868,750
-----------
2,089,062
-----------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
<PAGE>
THE PRUDENTIAL
GROWTH STOCK FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Lodging--2.6%
12,900 Hilton Hotels Corp.................. $ 735,300
25,450 Promus Cos., Inc.*.................. 1,002,094
-----------
1,737,394
-----------
Miscellaneous Basic Industry--2.9%
28,400 Applied Materials, Inc.*............ 1,267,350
13,600 Roche Holdings Ltd. (ADR)........... 676,686
-----------
1,944,036
-----------
Petroleum Services--2.0%
28,300 Astra Class A* (Sweden)............. 551,850
32,900 YPF Sociedad Anonima (ADR).......... 781,375
-----------
1,333,225
-----------
Railroads--1.9%
Wisconsin Central Transportation
18,200 Corp.*............................ 1,294,475
-----------
Restaurants--2.0%
23,200 McDonald's Corp..................... 1,319,500
-----------
Retail--10.5%
28,000 Bed Bath & Beyond, Inc.*............ 812,000
199,200 Cifra, S.A. Class C* (Mexico)....... 498,000
19,600 Harcourt General, Inc............... 649,250
24,000 Heilig Meyers, Co................... 744,000
32,833 Home Depot, Inc..................... 1,337,945
19,600 Kohls Corp.*........................ 955,500
12,900 Lowes Companies, Inc................ 832,050
53,600 Shaw Industries, Inc................ 1,092,100
-----------
6,920,845
-----------
Technology--12.9%
12,200 3Com Corp.*......................... 682,437
17,300 AutoDesk, Inc....................... 1,001,237
14,300 BMC Software, Inc.*................. 881,237
10,500 Boeing Co........................... 471,188
152,000 Champion Technology Holdings Ltd.... 250,800
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
25,950 Cheyenne Software, Inc.*............ $ 668,213
32,400 Cisco Systems, Inc.*................ 1,105,650
12,800 Lotus Development Corp.*............ 904,000
18,400 Motorola, Inc....................... 1,863,000
54,000 Valence Technology, Inc.*........... 769,500
-----------
8,597,262
-----------
Telecommunications--4.9%
Ericsson (L.M.) Telephone Co.,
16,600 (ADR)............................. 698,237
43,600 MCI Communications Corp............. 1,021,875
25,200 Telefonos de Mexico S.A. (ADR)...... 1,518,300
-----------
3,238,412
-----------
Transportation--1.5%
17,700 Consolidated Rail Corp.............. 1,022,175
-----------
Utilities--1.0%
17,800 Telephone & Data System, Inc........ 671,950
-----------
Total common stocks
(cost $63,713,041).................. 64,994,500
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENT
- --------
Repurchase Agreement--6.2%
$ 4,103 Joint Repurchase Agreement Account,
3.46%, 4/4/94, (Note 5)
(cost $4,103,000)................... 4,103,000
-----------
Total Investments--104.0%
(cost $67,816,041; Note 4).......... 69,097,500
Liabilities in excess of other
assets--(4.0%)...................... (2,678,153)
-----------
Net Assets--100%.................... $66,419,347
-----------
-----------
- ---------------
* Non-income producing security.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
FUND
OBJECTIVE: To provide investment results that
correspond to the price and yield performance of
the S&P 500 Composite Stock Index.
INVESTMENT APPROACH: The portfolio is
managed using a passive, indexing approach
instead of traditional methods of security analysis.
The Advisor tries to accomplish this goal by
purchasing securities that, as a group, reflect the
price and yield performance of the S&P 500.
The Fund will not adopt a temporary defensive
investment posture in times of declining market
conditions; therefore, investors bear the risk of such
market conditions.
ADVISER: Prudential Diversified Investment
Strategies (PDI) is a business unit of The Prudential
Investment Corporation dedicated to equity index
and balanced fund investing for institutional
clients. Established in 1975, PDI began managing
equity index portfolios in 1979 and currently
manages over $3 billion in stock index funds.
ADVISER'S COMMENTS: The S&P 500 index is an
unmanaged index representing the performance of
500 major companies. It is widely recognized as an
indicator of general stock market performance.
During the six months ended March 31, 1994, the
Fund has continued to achieve investment results
that track the S&P 500 before subtracting Fund
expenses. Ongoing contributions to the Fund have
been invested in a manner that minimizes tracking
errors, the amount by which investment results
differ from the index results. From time to time,
S&P 500 index futures are used to improve the
efficiency of investing ongoing cash flow by
optimizing timing and reducing transaction costs.
Please see the Fund's prospectus for a discussion of
the risks associated with futures investing.
<TABLE>
<CAPTION>
PERFORMANCE RESULTS:
<S> <C> <C>
Periods ended 3/31/94 Fund S&P 500
------------------------- ------- ----------
Six Months............... -1.89% -1.55%
One Year................. 0.73% 1.47%
From Inception
(11/5/92)................ 6.78% 7.65%
</TABLE>
Returns from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends and distributions. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Past performance
cannot guarantee comparable future results. The manager is currently limiting
the expenses of the Fund. Without this reduction of expenses, the total return
would have been lower.
5
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks--90.7%
Aerospace/ Defense--1.9%
2,800 Allied-Signal, Inc.................. $ 102,550
3,300 Boeing Co........................... 148,087
300 E-Systems, Inc...................... 13,125
300 General Dynamics Corp............... 25,462
400 Grumman Corp........................ 25,850
600 Lockheed Corp....................... 38,550
800 Loral Corp.......................... 30,000
900 Martin Marietta Corp................ 39,600
400 McDonnell Douglas Corp.............. 43,050
500 Northrop Corp....................... 19,938
1,400 Raytheon Co......................... 90,475
2,200 Rockwell International Corp......... 87,450
-----------
664,137
-----------
Airlines--0.3%
750 AMR Corp.*.......................... 42,750
500 Delta Airlines, Inc................. 22,625
230 UAL Corp.*.......................... 29,325
500 USAir Group, Inc.*.................. 4,063
-----------
98,763
-----------
Aluminum--0.4%
2,200 Alcan Aluminum Ltd.................. 48,400
900 Aluminum Co. of America............. 64,463
550 Reynolds Metals Co.................. 25,231
-----------
138,094
-----------
Automobiles & Trucks--2.9%
3,400 Chrysler Corp....................... 175,525
400 Cummins Engine, Inc................. 19,700
500 Dana Corp........................... 28,625
600 Echlin, Inc......................... 17,700
4,900 Ford Motor Co....................... 287,875
7,000 General Motors Corp................. 378,000
1,200 Genuine Parts Co.................... 42,000
400 Johnson Controls, Inc............... 22,000
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
<C> <S> <C>
620 Navistar International Corp.*....... $ 13,795
500 Safety Kleen Corp................... 7,000
-----------
992,220
-----------
Banking--5.1%
3,637 Banc One Corp....................... 120,021
1,000 Bank of Boston Corp................. 23,750
3,500 BankAmerica Corp.................... 137,812
800 Bankers Trust NY Corp............... 56,700
900 Barnett Banks, Inc.................. 39,713
1,000 Boatmen's Bancshares................ 29,688
1,900 Chase Manhattan Corp................ 61,512
2,500 Chemical Banking Corp............... 90,937
3,700 Citicorp*........................... 138,750
1,300 CoreStates Financial Corp........... 33,800
800 First Chicago Corp.................. 38,400
800 First Fidelity Bancorp.............. 35,500
800 First Interstate Bank Corp.......... 58,600
1,600 First Union Corp.................... 66,600
1,300 Fleet Financial Group, Inc.......... 45,663
600 Golden West Financial Corp.......... 23,025
1,400 Great Western Financial Corp........ 22,400
1,100 H.F. Ahmanson & Co.................. 18,563
2,300 KeyCorp............................. 69,000
650 Mellon Bank Corp.................... 36,481
1,900 Morgan (J.P.) & Co., Inc............ 118,987
2,600 NationsBank Corp.................... 118,950
1,500 NBD Bancorp, Inc.................... 42,563
3,000 Norwest Corp........................ 71,625
2,200 PNC Financial Corp.................. 58,575
900 Shawmut National Corp............... 18,225
1,200 Suntrust Banks, Inc................. 53,550
900 U.S. Bancorp........................ 22,781
600 Wells Fargo & Co.................... 83,625
-----------
1,735,796
-----------
Beverages--3.1%
300 Adolph Coors Co..................... 5,475
2,600 Anheuser Busch Cos., Inc............ 137,800
300 Brown-Forman Corp................... 25,688
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Beverages, cont'd.
12,700 Coca-Cola Co........................ $ 515,937
7,800 PepsiCo, Inc........................ 285,675
3,600 Seagram Co., Ltd.................... 99,900
-----------
1,070,475
-----------
Chemicals--2.6%
1,100 Air Products & Chemicals, Inc....... 49,087
550 Albemarle Corporation*.............. 8,113
850 American Cyanamid Co................ 39,525
2,700 Dow Chemical Co..................... 162,337
6,600 duPont (E.I.) de Nemours & Co....... 349,800
800 Eastman Chemical Co.*............... 32,200
900 Grace (W.R.) & Co................... 37,125
400 Hercules, Inc....................... 45,900
1,200 Monsanto Co......................... 93,300
700 Nalco Chemical Co................... 23,888
700 Rohm & Haas Co...................... 38,238
1,400 Union Carbide Corp.................. 31,500
-----------
911,013
-----------
Chemical - Specialty--0.5%
950 Engelhard Corp...................... 26,363
100 First Mississippi Corp.............. 1,450
700 Great Lakes Chemical Corp........... 49,350
500 Morton International, Inc........... 49,937
1,300 Praxair, Inc........................ 22,588
400 Raychem Corp........................ 14,950
-----------
164,638
-----------
Commercial Services--0.2%
800 Deluxe Corp......................... 24,700
300 Harland (John H) Co................. 6,713
900 Moore Corp., Ltd.................... 16,762
400 Ogden Corp.......................... 8,900
-----------
57,075
-----------
Computer Software & Services--1.1%
300 AutoDesk, Inc....................... 17,362
1,400 Automatic Data Processing, Inc...... 71,750
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
400 Ceridian Corp.*..................... $ 9,300
Computer Associates International,
1,600 Inc............................... 49,400
550 Computer Sciences Corp.*............ 20,075
300 Intergraph Corp*.................... 2,719
400 Lotus Development Corp.*............ 28,250
3,100 Novell, Inc.*....................... 55,994
2,800 Oracle Systems Corp.*............... 89,775
900 Sun Microsystems, Inc.*............. 24,581
1,100 Tandem Computers, Inc.*............. 15,538
-----------
384,744
-----------
Construction--0.2%
900 Fluor Corp.......................... 45,000
300 Foster Wheeler Corp................. 12,000
300 Kaufman & Broad Home Corp........... 5,925
200 Pulte Corp.......................... 5,800
-----------
68,725
-----------
Consumer Goods--0.7%
300 Centex Corp......................... 9,263
100 Fedders Corp.*...................... 775
400 Fleetwood Enterprises, Inc.......... 8,150
750 Lowes Companies, Inc................ 48,375
1,500 Masco Corp.......................... 47,250
1,100 Maytag Corp......................... 20,625
400 Owens Corning Fiberglass Corp.*..... 14,000
Pioneer Hi Bred International,
900 Inc............................... 29,587
100 Skyline Corp........................ 1,938
400 Stanley Works....................... 15,750
700 Whirlpool Corp...................... 42,525
-----------
238,238
-----------
Containers--0.1%
200 Ball Corp........................... 5,125
500 Bemis, Inc.......................... 10,938
900 Crown Cork & Seal, Inc.*............ 35,212
-----------
51,275
-----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Cosmetics & Soaps--2.0%
300 Alberto Culver Co................... $ 6,225
750 Avon Products, Inc.................. 42,375
500 Clorox Co........................... 25,063
1,500 Colgate-Palmolive Co................ 86,812
2,200 Gillette Co......................... 139,150
International Flavors & Fragrances,
1,150 Inc............................... 41,975
6,700 Procter & Gamble Co................. 359,287
-----------
700,887
-----------
Diversified Gas--0.2%
1,100 Arkla, Inc.......................... 7,425
1,000 Coastal Corp........................ 30,500
200 Eastern Enterprises, Inc............ 5,350
600 Enserch Corp........................ 7,950
500 NICOR, Inc.......................... 12,750
200 Oneok, Inc.......................... 3,425
-----------
67,400
-----------
Drugs & Medical Supplies--6.2%
8,100 Abbott Laboratories................. 215,662
700 ALZA Corp.*......................... 15,925
3,100 American Home Products Corp......... 179,800
1,300 Amgen, Inc.*........................ 49,562
500 Bard (C.R.), Inc.................... 12,125
600 Bausch & Lomb, Inc.................. 28,200
2,700 Baxter International, Inc........... 61,087
700 Becton Dickinson & Co............... 26,250
1,000 Biomet, Inc.*....................... 10,313
5,150 Bristol Myers-Squibb Co............. 265,869
6,400 Johnson & Johnson Co................ 241,600
2,900 Lilly (Eli) & Co.................... 144,275
600 Medtronic, Inc...................... 48,000
12,600 Merck & Co., Inc.................... 374,850
3,100 Pfizer, Inc......................... 167,400
1,900 Schering-Plough Corp................ 106,875
500 St. Jude Medical, Inc............... 13,750
2,100 Syntex Corp......................... 29,138
500 United States Surgical Corp......... 9,000
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
1,700 Upjohn Co........................... $ 46,113
1,300 Warner Lambert Co................... 80,437
-----------
2,126,231
-----------
Electronics--3.6%
900 Advanced Micro Devices, Inc.*....... 27,788
1,000 Amdahl Corp......................... 6,500
1,000 AMP, Inc............................ 60,250
1,100 Apple Computer...................... 36,438
200 Cray Research, Inc.*................ 5,550
200 Data General Corp.*................. 1,600
1,300 Digital Equipment Corp.*............ 38,350
500 EG&G, Inc........................... 8,188
2,200 Emerson Electric Co................. 130,625
400 Harris Corp......................... 18,850
2,500 Hewlett-Packard Co.................. 205,312
4,100 Intel Corp.......................... 276,237
2,650 Motorola, Inc....................... 268,312
1,100 National Semiconductors Corp.*...... 23,100
400 Perkin Elmer Corp................... 13,350
600 Tandy Corp.......................... 21,750
200 Tektronix, Inc...................... 6,100
900 Texas Instruments, Inc.............. 69,525
250 Thomas & Betts Corp................. 15,500
300 Zenith Electronics Corp.*........... 2,925
-----------
1,236,250
-----------
Energy--0.2%
1,300 Burlington Resources, Inc........... 55,250
-----------
Financial Services--2.3%
4,700 American Express Co................. 129,837
500 Beneficial Corp..................... 18,313
1,100 Block (H&R), Inc.................... 47,300
1,658 Dean Witter Discover & Co........... 54,092
1,800 Federal Home Loan Mortgage Corp..... 91,350
2,750 Federal National Mortgage Assn...... 213,812
900 Household International Corp........ 26,663
1,450 MBNA Corp........................... 30,631
2,100 Merrill Lynch & Co., Inc............ 78,225
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Financial Services, cont'd.
1,100 Salomon, Inc........................ $ 53,213
750 Transamerica Corp................... 37,875
-----------
781,311
-----------
Food & Beverages--3.0%
3,225 Archer-Daniels-Midland Co........... 77,400
1,300 Borden, Inc......................... 17,388
2,500 Campbell Soup Co.................... 99,687
2,400 ConAgra, Inc........................ 64,200
1,500 CPC Int'l., Inc..................... 71,062
300 Fleming Cos., Inc................... 7,388
1,550 General Mills, Inc.................. 86,219
700 Gerber Products Co.................. 21,438
600 Giant Foods, Inc.................... 13,500
2,500 Heinz (H.J.) Co..................... 83,750
900 Hershey Foods Corp.................. 41,625
2,250 Kellogg Co.......................... 114,750
1,000 Pet, Inc............................ 18,000
700 Quaker Oats Co...................... 43,837
1,000 Ralston Purina Co................... 45,500
4,700 Sara Lee Corp....................... 102,225
1,800 Sysco Corp.......................... 46,125
1,200 Wrigley (W.M.) Junior Co............ 60,900
-----------
1,014,994
-----------
Forest Products--1.6%
300 Boise Cascade Corp.................. 6,825
900 Champion International Corp......... 26,100
400 Federal Paper Board, Inc............ 9,000
850 Georgia Pacific Corp................ 54,400
1,200 International Paper Co.............. 81,750
800 James River Corp.................... 14,500
1,600 Kimberly Clark Corp................. 84,600
1,100 Louisiana Pacific Corp.............. 39,737
600 Mead Corp........................... 24,600
300 Potlatch Corp....................... 12,563
700 Scott Paper Co...................... 29,313
800 Stone Container Corp.,.............. 10,600
600 Temple Inland, Inc.................. 27,450
700 Union Camp Corp..................... 30,975
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
600 Westvaco Corp....................... $ 19,125
2,000 Weyerhaeuser Co..................... 86,500
-----------
558,038
-----------
Gas Pipelines--0.5%
500 Columbia Gas System, Inc.*.......... 13,062
900 Consolidated Natural Gas Co......... 36,000
2,400 Enron Corp.......................... 73,200
1,200 Panhandle Eastern Corp.............. 25,200
300 Peoples Energy Corp................. 8,213
300 Transco Energy Co................... 4,425
1,000 Williams Cos., Inc.................. 24,000
-----------
184,100
-----------
Hospital Management--0.6%
700 Beverly Enterprises, Inc.*.......... 9,187
3,352 Columbia Healthcare Corp............ 134,918
400 Community Psychiatric Centers....... 6,400
500 Manor Care, Inc..................... 13,625
National Medical Enterprises,
1,600 Inc............................... 25,800
800 Service Corp. International......... 20,200
200 Shared Medical Systems Corp......... 5,238
-----------
215,368
-----------
Housing Construction--0.1%
400 Armstrong World Industries.......... 21,600
-----------
Insurance--3.1%
1,100 Aetna Life & Casualty Co............ 58,438
Alexander & Alexander Services,
400 Inc............................... 7,050
2,100 American General Corp............... 58,013
American International Group,
3,075 Inc............................... 258,684
1,000 Capital Holding Corp................ 31,625
850 Chubb Corp.......................... 62,156
750 CIGNA Corp.......................... 44,531
500 Continental Corp.................... 11,313
900 General Corp........................ 96,637
450 Jefferson-Pilot Corp................ 21,206
900 Lincoln National Corp............... 36,225
700 Marsh & McLennan Cos................ 58,275
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Insurance, cont'd.
600 SAFECO Corp......................... $ 31,650
400 St. Paul Companies, Inc............. 31,100
750 Torchmark Corp...................... 30,188
3,131 Travelers, Inc...................... 109,976
800 UNUM Corp........................... 42,200
800 USF&G Corp.......................... 10,500
200 USLIFE Corp......................... 7,725
1,700 Wachovia Corp....................... 53,975
-----------
1,061,467
-----------
Leisure--1.1%
300 Bally Manufacturing Co.*............ 2,063
2,200 Blockbuster Entertainment Corp...... 55,550
1,000 Brunswick Corp...................... 21,125
5,200 Disney (Walt) Co.................... 217,750
200 Handleman Co........................ 2,200
900 Hasbro, Inc......................... 31,275
300 King World Productions, Inc.*....... 11,137
1,600 Mattel, Inc......................... 40,200
100 Outboard Marine Corp................ 1,925
-----------
383,225
-----------
Lodging--0.3%
500 Hilton Hotels Corp.................. 28,500
1,100 Marriott International, Inc.,....... 30,938
1,000 Promus Cos., Inc.*.................. 39,375
-----------
98,813
-----------
Machinery--1.3%
150 Briggs & Stratton Corp.............. 12,600
1,050 Caterpillar, Inc.................... 117,994
300 Cincinnati Milacron, Inc............ 7,013
200 Clark Equipment Co.*................ 11,850
1,100 Cooper Industries, Inc.............. 40,700
800 Deere & Co.......................... 67,200
600 Dover Corp.......................... 35,925
700 Eaton Corp.......................... 40,512
300 Giddings & Lewis, Inc............... 7,575
200 Harnischfeger Industries, Inc....... 4,200
1,000 Ingersoll Rand Co................... 37,250
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
402 PACCAR Inc.......................... $ 20,351
500 Parker Hannifin Corp................ 17,687
400 Snap-On Tools Corp.................. 16,000
50 SPX Corp............................ 800
300 Timken Co........................... 9,863
400 Varity Corp.*....................... 16,750
-----------
464,270
-----------
Media--2.3%
160 Capital Cities/ABC, Inc............. 109,440
150 CBS, Inc............................ 45,900
2,150 Comcast Corp........................ 38,163
1,500 Donnelley (R.R.) & Sons, Co......... 42,187
900 Dow Jones & Co., Inc................ 34,200
1,800 Dun & Bradstreet Corp............... 105,750
1,450 Gannett, Inc........................ 76,306
700 Interpublic Group Cos., Inc......... 20,825
550 Knight Rider, Inc................... 31,556
500 McGraw Hill, Inc.................... 32,688
200 Meredith Corp....................... 8,475
1,000 New York Times Co................... 27,375
3,600 Time Warner, Inc.................... 139,500
1,200 Times Mirror Co..................... 37,350
700 Tribune Co.......................... 41,650
-----------
791,365
-----------
Mineral Resources--0.9%
American Barrick Resources Corp.
2,800 (ADR)*............................ 71,050
400 ASARCO, Inc......................... 8,950
850 Cyprus Minerals Corp................ 24,544
1,000 Echo Bay Mines, Ltd................. 13,250
1,300 Homestake Mining Co................. 29,250
1,100 INCO, Ltd........................... 27,225
700 Newmont Mining Corp................. 40,163
700 Phelps-Dodge Corp................... 36,575
400 Pittston Minerals Group............. 8,900
2,300 Placer Dome, Inc.................... 56,637
-----------
316,544
-----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Miscellaneous Basic Industry--4.8%
Bassett Furniture Industries,
125 Inc............................... $ 3,484
1,700 Browning Ferris Industries, Inc..... 42,925
200 Crane Co............................ 5,000
600 Ecolab, Inc......................... 12,300
350 FMC Corp.*.......................... 16,625
8,350 General Electric Co................. 831,869
500 General Signal Corp................. 16,500
500 Grainger (W.W.), Inc................ 31,750
1,100 Illinois Tool Works, Inc............ 44,550
1,200 ITT Corp............................ 102,900
700 Mallinckrodt Group Incorporated*.... 22,400
300 Millipore Corp...................... 13,537
300 Morrison Knudsen Corp............... 8,138
150 NACCO Industries, Inc............... 7,575
1,133 Pall Corp........................... 18,836
1,100 PPG Industries, Inc................. 81,812
300 Rayonier, Inc.*..................... 8,400
Rollins Environmental Services,
300 Inc............................... 1,388
500 Teledyne, Inc....................... 8,625
900 Textron, Inc........................ 48,600
300 Trinova Corp........................ 10,388
600 TRW, Inc............................ 41,100
500 Tyco Labs, Inc...................... 24,937
1,200 United Technologies Corp............ 74,550
3,400 Westinghouse Electric Corp.......... 40,800
4,700 WMX Technologies, Inc............... 111,625
100 Zurn Industries, Inc................ 2,350
-----------
1,632,964
-----------
Miscellaneous Consumer Growth--2.2%
600 Allergan, Inc....................... 12,225
800 American Greetings Corp............. 21,150
800 Black & Decker Corp................. 16,400
2,000 Corning, Inc........................ 64,750
500 Dial Corp........................... 20,875
3,200 Eastman Kodak Co.................... 142,000
400 Jostens, Inc........................ 6,800
Minnesota Mining & Manufacturing
2,150 Co................................ 213,119
100 National Education Corp.*........... 613
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
500 Polaroid Corp....................... $ 15,937
300 Premark International, Inc.......... 21,600
1,600 Rubbermaid, Inc..................... 43,600
1,550 Unilever N.V........................ 162,362
1,000 Whitman Corp........................ 15,125
-----------
756,556
-----------
Office Equipment & Supplies--1.9%
500 Alco Standard Corp.................. 26,187
600 Avery Dennison Corp................. 16,725
800 Compaq Computer Corp.*.............. 78,200
1,300 Honeywell, Inc...................... 43,712
International Business Machines
5,700 Corp.............................. 310,650
1,600 Pitney Bowes, Inc................... 65,000
1,500 Unisys Corp.*....................... 22,313
1,050 Xerox Corp.......................... 100,275
-----------
663,062
-----------
Petroleum--8.4%
900 Amerada Hess Corp................... 40,275
4,900 Amoco Corp.......................... 260,312
600 Ashland Oil, Inc.................... 24,450
1,550 Atlantic Richfield Co............... 147,250
3,250 Chevron Corp........................ 273,812
12,150 Exxon Corp.......................... 763,931
500 Kerr McGee Corp..................... 20,750
300 Louisiana Land & Exploration Co..... 10,838
1,300 Maxus Energy Corp.*................. 5,688
3,900 Mobil Corp.......................... 290,062
3,000 Occidental Petroleum Corp........... 48,375
500 Pennzoil Co......................... 25,000
2,500 Phillips Petroleum Co............... 66,562
5,250 Royal Dutch Petroleum Co............ 521,719
900 Santa Fe Energy Resources, Inc...... 7,650
1,100 Sun Co., Inc........................ 35,613
1,700 Tenneco, Inc........................ 89,675
2,500 Texaco, Inc......................... 157,500
2,300 Unocal Corp......................... 58,075
2,800 USX Marathon Group.................. 46,200
-----------
2,893,737
-----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Petroleum Services--0.9%
1,300 Baker Hughes, Inc................... $ 23,075
1,700 Dresser Industries, Inc............. 36,125
1,100 Halliburton Co...................... 32,037
200 Helmerich & Payne, Inc.............. 5,200
500 McDermott International, Inc........ 10,125
900 Oryx Energy Co...................... 14,513
800 Rowan Cos., Inc.*................... 5,600
2,400 Schlumberger, Ltd................... 126,900
900 Sonat, Inc.......................... 24,975
500 Western Atlas, Inc.*................ 20,625
-----------
299,175
-----------
Railroads--1.2%
900 Burlington Northern, Inc............ 53,550
800 Consolidated Rail Corp.............. 46,200
1,000 CSX Corp............................ 82,000
1,400 Norfolk Southern Corp............... 90,475
1,700 Santa Fe Pacific Corp............... 38,675
2,000 Union Pacific Corp.................. 113,500
-----------
424,400
-----------
Restaurants--0.7%
200 Luby's Cafeterias, Inc.............. 4,625
3,500 McDonald's Corp..................... 199,062
400 Ryans Family Steak Houses, Inc.*.... 3,050
400 Shoney's, Inc.*..................... 8,450
900 Wendys International, Inc........... 15,413
-----------
230,600
-----------
Retail--6.5%
2,500 Albertsons, Inc..................... 71,875
700 American Stores Co.................. 35,875
200 Brown Group, Inc.................... 7,325
600 Brunos, Inc......................... 4,688
900 Charming Shoppes, Inc............... 10,800
900 Circuit City Stores, Inc............ 17,888
700 Dayton Hudson Corp.................. 51,100
1,100 Dillard Department Stores, Inc...... 36,850
1,400 Gap, Inc............................ 62,125
100 Genesco, Inc.*...................... 413
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
Great Atlantic & Pacific Tea,
300 Inc............................... $ 7,350
700 Harcourt General, Inc............... 23,187
300 Hartmarx Corp.*..................... 1,913
4,366 Home Depot, Inc..................... 177,914
4,000 K-mart Corp......................... 72,500
1,000 Kroger Co.*......................... 23,875
3,500 Limited, Inc........................ 73,062
800 Liz Claiborne, Inc.................. 18,900
200 Longs Drug Stores Corp.............. 6,675
2,400 May Department Stores Co............ 99,900
400 McKesson Corp....................... 23,800
1,000 Melville Corp....................... 38,125
400 Mercantile Stores, Inc.............. 15,300
800 Newell Co........................... 31,400
800 NIKE, Inc........................... 42,400
800 Nordstrom, Inc...................... 32,000
100 Oshkosh `B` Gosh, Inc............... 1,500
2,300 Penney (J.C.), Inc.................. 121,612
600 Pep Boys - Manny, Moe & Jack........ 16,950
2,052 Price Costco, Inc.*................. 37,064
800 Reebok International Ltd............ 27,400
700 Rite-Aid Corp....................... 13,300
3,500 Sears Roebuck & Co.................. 150,500
800 Sherwin Williams Co................. 25,500
400 Stride Rite Corp.................... 5,900
700 Supervalue, Inc..................... 24,237
700 TJX Companies, Inc.................. 18,463
2,900 Toys `R` Us, Inc.*.................. 100,775
22,600 Wal-Mart Stores, Inc................ 584,775
1,200 Walgreen Co......................... 48,150
800 Winn-Dixie Stores, Inc.............. 43,900
1,300 Woolworth Corp...................... 19,663
-----------
2,226,929
-----------
Rubber--0.3%
800 Cooper Tire & Rubber................ 20,400
200 Goodrich (B.F.) Co.................. 8,500
1,500 Goodyear Tire & Rubber Co........... 60,750
-----------
89,650
-----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Steel--0.4%
800 Armco, Inc.......................... $ 3,800
1,000 Bethlehem Steel Corp.*.............. 20,000
400 Inland Steel Industries, Inc.*...... 12,050
50 National Intergroup, Inc............ 800
900 Nucor Corp.......................... 54,562
700 USX Corp. - U.S. Steel Group........ 25,988
850 Worthington Industries, Inc......... 16,681
-----------
133,881
-----------
Technology--0.2%
2,400 Cisco Systems, Inc.*................ 81,900
-----------
Telecommunications--4.2%
American Telephone & Telegraph
13,300 Co................................ 681,625
5,300 Ameritech Corp...................... 202,062
300 Andrew Corp.*....................... 9,600
600 DSC Communications Corp.*........... 30,187
100 M/A-Com, Inc.*...................... 588
McCaw Cellular Communications,
2,000 Inc.*............................. 98,750
5,200 MCI Communications Corp............. 121,875
2,400 Northern Telecom Ltd................ 67,200
350 Scientific Atlanta, Inc............. 9,625
3,300 Sprint Corp......................... 113,025
4,400 Tele-Communications, Inc.*.......... 91,300
-----------
1,425,837
-----------
Textiles--0.2%
500 National Service Industries, Inc.... 12,625
400 Russell Corp........................ 11,350
200 Springs Industries, Inc............. 6,900
600 VF Corp............................. 30,000
-----------
60,875
-----------
Tobacco--1.6%
2,000 American Brands, Inc................ 60,500
8,550 Philip Morris Cos., Inc............. 433,913
2,000 UST, Inc............................ 49,500
-----------
543,913
-----------
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
Trucking & Shipping--0.3%
300 Consolidated Freightways, Inc.*..... $ 7,875
600 Federal Express Corp.*.............. 40,125
400 Roadway Services, Inc............... 27,000
700 Ryder System, Inc................... 17,325
300 Yellow Corp......................... 7,181
-----------
99,506
-----------
Utility - Communications--4.9%
4,300 Bell Atlantic Corp.................. 222,525
4,900 BellSouth Corp...................... 282,975
9,300 GTE Corp............................ 288,300
4,000 NYNEX Corp.......................... 138,000
4,100 Pacific Telesis Group............... 215,763
5,900 Southwestern Bell Corp.............. 238,212
2,200 Texas Utilities Co.................. 82,225
4,300 U.S. West, Inc...................... 175,225
1,000 Union Electric Co................... 35,250
-----------
1,678,475
-----------
Utility - Electric--3.6%
1,800 American Electric Power, Inc........ 55,350
1,400 Baltimore Gas & Electric............ 32,375
1,600 Carolina Power & Light Co........... 41,600
1,800 Central & South West Corp........... 44,550
2,100 Commonwealth Edison Co.............. 52,762
2,300 Consolidated Edison Co.............. 66,987
1,400 Detroit Edison Co................... 37,100
1,700 Dominion Resources, Inc............. 68,000
2,000 Duke Power Co....................... 72,250
2,300 Entergy Corp........................ 73,025
1,900 FPL Group, Inc...................... 62,937
1,300 Houston Industries, Inc............. 46,150
1,400 Niagara Mohawk Power Corp........... 25,025
700 Northern States Power Co............ 28,613
1,500 Ohio Edison Co...................... 28,500
800 Pacific Enterprises................. 16,200
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE PRUDENTIAL
STOCK INDEX FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Utility - Electric, cont'd.
4,200 Pacific Gas & Electric Co........... $ 122,325
2,700 Pacificorp.......................... 47,588
2,200 PECO Energy Co...................... 61,050
500 PSI Resources, Inc.................. 11,688
2,400 Public Service Enterprise Group..... 66,900
4,400 SCE Corp............................ 72,600
6,300 Southern Co......................... 120,487
-----------
1,254,062
-----------
Total common stocks
(cost $30,802,853).................. 31,147,828
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
SHORT-TERM INVESTMENTS--9.5%
U. S. Government Security--0.6%
$ 200 (D) United States Treasury Bill
3.54%, 6/16/94
(cost $198,507).................... $ 198,507
-----------
Repurchase Agreement--8.9%
3,057 Joint Repurchase Agreement Account,
3.46%, 4/4/94, (Note 5)
(cost $3,057,000).................. 3,057,000
-----------
Total short-term investments
(cost $3,255,507).................. 3,255,507
-----------
Total Investments--100.2%
(cost $34,058,360; Note 4)......... 34,403,335
Liabilities in excess of other
assets--(0.2%)..................... (68,493)
-----------
Net Assets--100%................... $34,334,842
-----------
-----------
--------
* Non-income producing security.
(D)Pledged as initial margin on futures contracts.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
<PAGE>
THE PRUDENTIAL
INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL
FUND
OBJECTIVE: To achieve long-term growth of capital through investment in equity
securities of foreign companies. Income is a secondary objective.
INVESTMENT APPROACH: While the Fund may invest anywhere outside the U.S., it
is
expected that most investments will be made in developed countries in North
America, Western Europe and the Pacific Basin.
The Adviser maintains a consistently applied valuation process and remains
sensitive to stock prices and keeping a long-term, global perspective. To this
end, each market is screened for undervalued securities using both historical
and forecasted data.
ADVISER: The Fund's Adviser is Mercator Asset Management, a wholly-owned
subsidiary of The Prudential. Mercator is dedicated to global and international
common stock investing. Organized in 1984 by senior professionals formerly
associated with Templeton Investment Counsel, Mercator is a conservative,
value-oriented manager, which places great emphasis on capital preservation.
Mercator manages $2.0 billion for institutional clients.
ADVISER'S COMMENTS: Foreign stock markets began the six-month period with
strong gains, providing double-digit returns for the Fund through January, 1994.
Since then, we have lapsed into a correction phase, triggered by the increase
in
U.S. interest rates. On a global basis, long-term interest rates have risen
about 100 basis points from their 1993 lows. This has clearly unsettled most
stock markets around the world. There is good reason to believe that rates will
fall again in many countries as inflation remains subdued and economies are not
overheating. Markets will now focus more on earnings. Consequently, stock
selectivity becomes even more important as we move forward.
On the economic front, the English speaking countries of the United States, the
United Kingdom and Australia, are experiencing a strong build up of demand. By
contrast, Continental Europe and Japan are just now stabilizing at low operating
levels. Europe should begin to accelerate as we move further into the year.
Little has changed recently in terms of where the best stock values are found.
Japan, Germany and Hong Kong continue to look relatively rich, although that
could change as we move further into 1994. We are identifying attractive stocks
in the Netherlands, Australia, New Zealand and Mexico.
Over the near term, investors may continue to witness high volatility in the
world's stock markets. Such events may offer opportunities for the prudent
investor to buy shares at depressed levels. Investors, as always, should focus
on the long-term as short-term market action tends to be driven more by
emotional and psychological factors than sound fundamentals.
<TABLE>
<CAPTION>
PERFORMANCE RESULTS:
<S> <C> <C>
Periods ended 3/31/94 Fund EAFE Index
------------------------- ------- ----------
Six Months............... 16.70% 4.39%
One Year................. 27.10% 22.51%
From Inception
(11/5/92)................ 30.02% 26.45%
</TABLE>
Results from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends and distributions. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Past performance
cannot guarantee comparable future results. Investing in foreign markets
involves additional risks such as currency fluctuations and political and social
developments, which are described in detail in the Fund's prospectus. The
manager is currently limiting the expenses of the Fund. Without this reduction
of expenses, the total return would have been lower.
15
<PAGE>
<PAGE>
THE PRUDENTIAL
INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks and Equivalents--93.4%
Australia--4.9%
455,000 CSR Ltd. .......................... $ 1,483,674
(Multi-Industry)
80,000 National Australia Bank Ltd. ...... 638,420
(Commercial Banking)
640,000 Pioneer International Ltd. ........ 1,301,524
(Building Materials & Components) -----------
3,423,618
-----------
Belgium--2.0%
11,000 Group Brussels Lambert S.A. ....... 1,375,960
(Finance) -----------
Canada--3.7%
67,000 Bank of Nova Scotia ............... 1,337,482
(Commercial Banking)
80,000 MacMillan Bloedel Ltd. ............ 1,235,683
(Forestry & Paper) -----------
2,573,165
-----------
Finland--1.9%
190,000 Enso-Gutzeit, Class R ............. 1,311,089
(Forestry & Paper) -----------
France--8.7%
10,000 Bon Marche ........................ 1,425,503
(Consumer Goods)
5,500 Chargeurs Reunis S.A. ............. 1,360,715
(Multi-Industry)
16,200 Gan ............................... 1,349,231
(Insurance)
5,000 Michelin .......................... 218,296
(Tires & Rubber)
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
<C> <S> <C>
8,000 Peugeot S.A. ...................... $ 1,202,122
(Automobile Manufacturing)
7,500 Societe Elf Aquitane S.A. ......... 486,565
(Energy Sources) -----------
6,042,432
-----------
Ireland--0.2%
35,000 Allied Irish Banks PLC ............ 124,799
(Commercial Banking) -----------
Italy--4.7%
185,000 Avir Finanziaria S.P.A. ........... 821,070
(Misc. Materials & Commodities)
260,000 Banca Commerciale Italiana ........ 937,372
(Commercial Banking)
880,000 Pirelli, S.P.A. ................... 1,498,800
(Tires & Rubber) -----------
3,257,242
-----------
Mexico--7.5%
48,000 Cementos Mexicanos S.A. ........... 1,163,619
(Misc. Materials & Commodities)
785,000 Grupo Financiero Bancomer ......... 1,220,352
(Commercial Banking)
490,263 Grupo Situr S.A. .................. 1,255,662
(Real Estate)
79,000 Industrias Penoles, S.A. de C.V. 225,862
.................................
(Metals - Non Ferrous)
185,000 Vitro, S.A. ....................... 1,289,237
(Industrial Components) -----------
5,154,732
-----------
Netherlands--11.7%
10,000 Akzo Nobel N.V. ................... 1,156,637
(Chemicals)
19,000 Gamma Holdings N.V. ............... 1,018,726
(Textiles & Apparel)
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
<PAGE>
THE PRUDENTIAL
INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Netherlands, cont'd
33,000 Internationale Nederlander Bank $ 1,411,972
N.V. .............................
(Insurance)
14,000 KLM Royal Dutch Airlines .......... 356,274
(Aerospace/ Military Technology)
55,000 Knp Bt (kon) Nv ................... 1,320,422
(Forestry & Paper)
50,000 Pakhoed Holdings N.V. ............. 1,331,093
(Energy Equipment & Services)
63,000 Stork N.V. ........................ 1,509,123
(Machinery & Engineering) -----------
8,104,247
-----------
New Zealand--3.7%
750,000 Fletcher Challenge Industries Ltd. 1,261,745
.................................
(Forestry & Paper)
640,000 Lion Nathan Ltd. .................. 1,314,352
(Beverages & Tobacco) -----------
2,576,097
-----------
Norway--6.6%
80,000 Aker A.S. ......................... 1,122,954
(Multi-Industry)
71,000 Hafslund Nycomed A.S. ............. 1,289,745
(Health & Personal Care)
39,000 Orkla Borregaard A.S. ............. 1,325,664
(Food & Household Products)
40,000 Unitor Shipping Service, A.S. ..... 798,178
(Business & Public Services) -----------
4,536,541
-----------
South Korea--6.5%
17,000 Dong Shin Pharmaceuticals ......... 1,032,026
(Health & Personal Care)
33,000 Hyundai Motor Co. ................. 907,500
(Automobile Manufacturing)
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
16,850 Korea First Bank .................. $ 227,547
(Commercial Banking)
5,108 Korea Long Term Credit Bank ....... 145,676
(Commercial Banking)
17,000 Korea Zinc ........................ 360,156
(Metals - Non Ferrous)
9,000 Lucky Development Co. ............. 188,441
(Construction & Housing)
4,500 Pohang Iron & Steel Co., Ltd. ..... 287,679
(Metals - Steel)
25,000 Samo Yang Co. ..................... 888,930
(Misc. Materials & Commodities)
7,000 Tong Yang Cement .................. 308,741
(Construction & Housing)
11,551 Woosung Construction .............. 161,713
(Construction & Housing) -----------
4,508,409
-----------
Spain--5.1%
61,000 Banco Bilbao Vizcaya, S.A. ........ 1,413,128
(Commercial Banking)
13,000 Banco de Andalucia ................ 1,501,011
(Commercial Banking)
4,000 Cristaleria Espanola .............. 160,324
(Misc. Materials & Commodities)
23,614 Prosegur Compania ................. 460,210
(Business and Public Services) -----------
3,534,673
-----------
Sweden--3.5%
27,000 Electrolux AB ..................... 1,242,879
(Appliances)
15,000 Volvo AB .......................... 1,169,995
(Automobile Manufacturing) -----------
2,412,874
-----------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
THE PRUDENTIAL
INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Switzerland--11.5%
3,300 Alusuisse-Lonza Holdings Ltd. ..... $ 1,451,579
(Metals - Non Ferrous)
3,300 Alusuisse-Lonza Holdings Ltd.
Rights expiring April '94* ...... 49,752
(Metals - Non Ferrous)
2,300 Ciba-Geigy Ltd. ................... 1,439,234
(Chemicals)
2,700 Hero .............................. 1,302,589
(Food & Household Products)
5,900 Merkur Holding AG ................. 1,444,129
(Merchandising)
1,600 Sulzer Ltd. ....................... 1,143,100
(Machinery & Engineering)
400 Sulzer Ltd. 3,902
Warrants expiring July '94* .....
(Machinery & Engineering)
1,200 Zurich Versicherung ............... 1,117,843
(Insurance) -----------
7,952,128
-----------
United Kingdom--11.2%
150,000 Allied-Lyons PLC .................. 1,156,623
(Beverages & Tobacco)
23,076 Allied-Lyons PLC
Rights expiring April '94* ...... 12,685
(Beverages & Tobacco)
700,000 Babcock International Group ....... 363,997
(Electrical & Electronics)
150,000 British Aerospace PLC ............. 1,076,395
(Aerospace/ Military Technology)
460,000 Ladbroke Group PLC ................ 1,319,010
(Leisure & Tourism)
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
80,000 National Westminster Bank PLC ..... $ 545,552
(Commercial Banking)
135,000 Rank Organisation PLC ............. 778,213
(Leisure & Tourism)
415,000 Tesco PLC ......................... 1,313,291
(Food & Household Products)
155,000 Whitbread & Co., Ltd. ............. 1,195,177
(Beverages & Tobacco) -----------
7,760,943
-----------
Total common stocks and equivalents
(cost $57,447,165).................. 64,648,949
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENTS--7.1%
- --------
Corporate Bond--0.3%
$ 244 Chemical Bank N.A.,
3.50%, 4/1/94
(cost $244,000)..................... 244,000
-----------
Repurchase Agreement--6.8%
4,700 Joint Repurchase Agreement Account,
3.46%, 4/4/94, (Note 5)
(cost $4,700,000)................... 4,700,000
-----------
Total short-term investments
(cost $4,944,000)................... 4,944,000
-----------
Total Investments--100.5%
(cost $62,391,165; Note 4).......... 69,592,949
Liabilities in excess of other
assets--(0.5%)...................... (378,721)
-----------
Net Assets--100%.................... $69,214,228
-----------
-----------
- ---------------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
THE PRUDENTIAL
BALANCED FUND
(LOGO) INSTITUTIONAL
FUND
OBJECTIVE: To realize long-term total return
consistent with moderate portfolio risk.
INVESTMENT APPROACH: Under normal operating
parameters, the Adviser will use the following
ranges, as a percentage of total assets, for each type
of security to be purchased by the Fund:
- 25%-50% will be invested in common and
preferred stocks and other equity-related
securities.
- 30%-60% will be invested in investment-grade
fixed income securities of intermediate
maturities.
- 0%-45% will be invested in money market
instruments.
ADVISER: Prudential Diversified Investment
Strategies (PDI) is a business unit of The Prudential
Investment Corporation dedicated to equity index
and balanced fund investing for institutional
clients. Established in 1975, PDI is among the oldest
quantitatively oriented balanced managers in the
country, currently managing $16.0 billion in equity,
balanced and fixed income accounts.
ADVISER'S COMMENTS: The bond rally fizzled at
the close of 1993, and both bonds and stocks fell
once the Federal Reserve Board began increasing
short term interest rates in early February. This
preemptive strike against inflation produced
less-than-desirable returns for the first quarter of
1994. Looking ahead, we believe stocks should
outperform bonds, given solid corporate earnings
and an improving economy. The Fund's allocation
as of March 31, 1994 shows we are slightly
overweighted in stocks (43.2% of assets) versus
bonds (41.0%) and short-term securities (15.4%).
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Composite
Periods ended 3/31/94 Fund Index (1)
------------------------- ------- ----------
<S> <C> <C>
Six Months............... -3.39% -2.07%
One Year................. 4.21% 2.21%
From Inception (11/5/92) 10.20% 6.81%
</TABLE>
Results from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends and distributions. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Past performance
cannot guarantee comparable future results. The manager is currently limiting
the expenses of the Fund. Without this reduction of expenses, the total return
would have been lower.
(1) The Composite Index is a weighted average as follows: 45% S&P 500; 45%
Lehman Brothers Government/Corporate Index; 10% T-Bill return. The Fund, on
average, has been invested approximately 44% in stocks, 42% in bonds and 14% in
short-term investments for each of the periods. The S&P 500 returned -1.55%,
1.47% and 7.65%; the Lehman Gov't/Corp. Index returned -3.41%, 2.78% and 6.73%;
and T-bills returned 1.62%, 3.18% and 3.19% for each of the periods,
respectively.
19
<PAGE>
<PAGE>
THE PRUDENTIAL
BALANCED FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
LONG-TERM INVESTMENTS--84.2%
Common Stocks--43.2%
Aerospace/Defense--1.1%
2,800 Boeing Co........................... $ 125,650
7,000 Martin Marietta Corp................ 308,000
-----------
433,650
-----------
Aluminum--0.5%
2,600 Aluminum Co. of America............. 186,225
-----------
Automobiles & Trucks--2.1%
2,700 Donaldson Co. Inc................... 122,512
7,000 Ford Motor Co....................... 411,250
7,600 Goodyear Tire & Rubber Co........... 307,800
-----------
841,562
-----------
Capital Goods--0.6%
800 ABT Building Products Corp.*........ 21,500
5,000 Astec Inds., Inc.*.................. 89,063
Fisher Scientific International,
3,500 Inc............................... 116,375
-----------
226,938
-----------
Chemicals--1.1%
3,700 Air Products & Chemicals, Inc....... 165,112
725 Eastman Chemical Co................. 29,181
2,500 IMC Fertilizer Group, Inc........... 98,750
2,100 Imperial Chemical Ind. (ADR)........ 96,338
2,300 Praxair, Inc........................ 39,963
-----------
429,344
-----------
Commercial Services--0.4%
300 ADVO, Inc........................... 5,513
400 DeVRY, Inc.*........................ 11,400
5,100 ServiceMaster L. P.................. 125,587
-----------
142,500
-----------
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
<C> <S> <C>
Computer Software & Services--0.6%
4,800 Automatic Data Processing, Inc...... $ 246,000
500 Fiserv, Inc.*....................... 10,188
-----------
256,188
-----------
Consumer Goods--1.7%
11,600 Archer-Daniels-Midland Co........... 278,400
900 Danaher Corp........................ 33,413
2,200 First Brands Corp................... 74,800
2,400 Industrie Natuzzi SPA (ADR)*........ 61,200
2,400 Kendall International, Inc.*........ 95,400
2,700 Modine Manufacturing Co............. 68,850
3,000 Rival Co............................ 61,875
-----------
673,938
-----------
Containers--0.1%
1,300 IMCO Recycling, Inc.*............... 16,900
-----------
Diversified Gas--0.1%
1,500 Coastal Corp........................ 45,750
-----------
Drugs & Medical Supplies--0.4%
2,800 Schering-Plough Corp................ 157,500
-----------
Electronics--1.2%
4,160 Baldor Electric Co.................. 98,280
5,100 Emerson Electric Co................. 302,812
900 Lindsay Manufacturing Co.*.......... 28,688
4,150 Thermotrex Corp.*................... 60,694
-----------
490,474
-----------
Energy--0.2%
4,700 Baker Hughes, Inc................... 83,425
-----------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
<PAGE>
THE PRUDENTIAL
BALANCED FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Financial Services--4.7%
4,000 Block (H&R), Inc.................... $ 172,000
6,900 Dean Witter Discover & Co........... 225,112
4,500 Equitable Companies, Inc............ 151,875
5,800 First Data Corp..................... 244,325
3,120 First Financial Mgmt. Corp.......... 168,480
2,000 John Nuveen Co...................... 45,500
Kansas City Southern Industries,
1,700 Inc............................... 86,063
2,200 Penncorp Financial Group, Inc....... 35,750
Price, (T Rowe) & Associates,
1,600 Inc............................... 45,400
7,700 Riggs National Corp.*............... 74,594
4,200 Salomon, Inc........................ 203,175
1,300 SPS Transaction Services, Inc.*..... 66,625
2,900 State Street Boston Corp............ 104,400
1,100 United Asset Management Corp........ 36,850
1,600 Wells Fargo & Co.................... 223,000
-----------
1,883,149
-----------
Food & Beverage--0.8%
3,100 Dr. Pepper/Seven Up Cos., Inc.*..... 74,400
4,700 PepsiCo, Inc........................ 172,137
2,000 Sbarro, Inc......................... 76,750
-----------
323,287
-----------
Forest Products--0.7%
1,200 Longview Fibre Co................... 21,600
5,600 Willamette Industries, Inc.......... 266,000
-----------
287,600
-----------
Gas Pipelines--0.2%
4,000 Seagull Energy Corp.*............... 95,000
-----------
General Business--1.1%
8,800 ADT, Ltd.*.......................... 90,200
3,287 AES Corp............................ 65,740
6,000 Agency Rent-A-Car, Inc.*............ 76,125
2,500 National Data Corp.................. 46,875
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
2,600 Shaw Communications, Inc............ $ 48,849
5,300 Sothebys Holdings Inc............... 90,100
600 Viacom, Inc.*....................... 15,900
-----------
433,789
-----------
Hospital Management--1.6%
9,262 Columbia Healthcare Corp............ 372,795
2,900 Health Care & Retirement Corp.*..... 74,313
4,000 Healthtrust-The Hospital Co......... 123,500
National Medical Enterprises,
5,900 Inc............................... 95,137
-----------
665,745
-----------
Housing Related--1.1%
2,050 Clayton Homes, Inc.*................ 43,306
2,300 Federal Realty Investment Trust..... 56,637
2,900 Manufactured Home Community, Inc.... 119,987
4,800 Property Trust America.............. 91,800
500 TJ International Incorporated....... 11,688
3,700 Toll Brothers, Inc.*................ 51,338
2,000 Weingarten Realty Investors......... 77,000
-----------
451,756
-----------
Insurance--1.2%
2,900 CCP Insurance, Inc.................. 63,075
2,100 Chubb Corp.......................... 153,562
1,880 General Re Corp..................... 201,865
2,400 Liberty Media Corp.*................ 48,600
-----------
467,102
-----------
Leisure--1.6%
6,900 Carnival Cruise Lines, Inc.......... 306,187
5,900 Cedar Fair, L.P..................... 198,387
3,700 Disney (Walt) Co.................... 154,938
200 Host Marriott Corp.*................ 2,000
200 Marriott International, Inc......... 5,625
-----------
667,137
-----------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
<PAGE>
THE PRUDENTIAL
BALANCED FUND
<LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Machinery--0.2%
3,400 Gorman-Rupp Co...................... $ 90,100
-----------
Media--2.7%
5,000 American Business Information*...... 83,125
300 Capital Cities/ABC, Inc............. 205,200
3,700 Enquirer Star Group, Inc............ 60,125
1,900 Grupo Televisa S.A.*................ 96,900
7,100 Placer Dome, Inc.................... 174,837
6,200 Rogers Communications, Inc.*........ 95,205
1,800 Scholastic Corp.*................... 68,400
2,700 TCA Cable TV, Inc................... 58,725
26,000 Television Broadcasts, Ltd.......... 91,854
300 Times Mirror Co..................... 9,338
2,500 Tribune Co.......................... 148,750
-----------
1,092,459
-----------
Miscellaneous Basic Industry--4.4%
4,000 Belden, Inc......................... 71,500
1,600 Cabot Corp.......................... 86,400
4,700 Caremark International, Inc......... 87,538
1,900 Duke Realty Investments, Inc........ 45,600
3,250 General Electric Co................. 323,781
5,700 Illinois Tool Works, Inc............ 230,850
1,800 ITT Corp............................ 154,350
5,000 Martin Marietta Materials, Inc.*.... 110,000
4,500 Potash Corp......................... 114,187
4,000 Thermo Electron Corp.*.............. 155,500
5,500 Thermo Fibertek, Inc.*.............. 79,750
2,950 Thermo Instrument System, Inc.*..... 85,919
3,000 Tuscarora, Inc...................... 47,250
1,000 USX Corp.-US Steel Group............ 37,125
1,800 Valspar Corp........................ 75,150
3,400 Wellman, Inc........................ 70,125
-----------
1,775,025
-----------
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
Miscellaneous Consumer Growth--0.3%
2,700 Eastman Kodak Co.................... $ 119,813
-----------
Petroleum--2.9%
3,000 Amoco Corp.......................... 159,375
Broken Hill Proprietary Ltd.
2,100 (ADR)............................. 97,125
9,800 Cross Timbers Oil Co................ 137,200
5,600 Exxon Corp.......................... 352,100
1,500 Kaydon Corp......................... 35,062
4,000 Royal Dutch Petroleum Co............ 397,500
-----------
1,178,362
-----------
Petroleum Services--0.3%
2,200 Schlumberger, Ltd................... 116,325
-----------
Railroads--0.8%
3,600 Consolidated Rail Corp.............. 207,900
2,600 Illinois Central Corp............... 87,750
2,200 Southern Pacific Rail Corp.*........ 46,200
-----------
341,850
-----------
Regional Banks--1.8%
5,500 Bank of New York, Inc............... 280,500
7,900 Norwest Corp........................ 188,612
1,800 Summit Bancorporation............... 35,325
5,900 Union Planters Corp................. 146,763
4,900 Washington Mutual Savings Bank...... 94,325
-----------
745,525
-----------
Retail--1.7%
2,300 Edison Brothers Stores, Inc......... 67,563
3,350 Kellwood Co......................... 80,819
2,800 Maybelline, Inc..................... 80,500
5,400 Newell Co........................... 211,950
2,300 Penney (J.C.), Inc.................. 121,612
400 Rayonier, Inc....................... 11,200
1,500 Tiffany & Co........................ 45,750
1,700 VF Corp............................. 85,000
-----------
704,394
-----------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
THE PRUDENTIAL
BALANCED FUND
(LOGO) INSTITUTIONAL
PORTFOLIO OF INVESTMENTS
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Steel--0.7%
1,800 Rouge Steel Co.*.................... $ 38,700
11,700 Worthington Industries, Inc......... 229,613
-----------
268,313
-----------
Technology--1.4%
American Management Systems,
3,400 Inc.*............................. 67,362
2,500 Anthem Electronics, Inc.*........... 74,375
International Business Machines
3,100 Corp.............................. 168,950
2,900 Loral Corp.......................... 108,750
1,200 Microsoft Corp.*.................... 102,000
1,800 Policy Management Systems Corp.*.... 56,025
-----------
577,462
-----------
Telecommunications--2.3%
1,400 LDDS Communications, Inc.*.......... 33,425
6,300 MCI Communications Corp............. 147,656
1,100 Nordson Corp........................ 66,414
12,400 Tele-Communications, Inc.*.......... 257,300
6,100 Telefonos de Mexico S.A. (ADR)...... 367,524
1,500 Telephone & Data Systems, Inc....... 56,625
-----------
928,944
-----------
Trucking & Shipping--0.1%
3,500 Expeditors International, Inc....... 63,000
-----------
U. S. Government Agency--0.5%
4,300 Federal Home Loan Mortgage Corp..... 218,225
-----------
Total common stocks
(cost $17,245,133).................. 17,478,756
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
Debt Obligations
U. S. Government Securities--41.0%
United States Treasury Bonds,
$ 3,500 11.25%, 2/15/15.................... $ 5,004,440
500 7.125%, 2/15/23.................... 494,060
United States Treasury Notes,
1,000 7.25%, 11/15/96.................... 1,040,620
2,000 6.00%, 11/30/97.................... 2,003,440
5,000 9.00%, 5/15/98..................... 5,528,100
2,500 6.375%, 1/15/99.................... 2,514,850
-----------
Total U. S. government securities
(cost $17,285,002)................. 16,585,510
-----------
Total long-term investments
(cost $34,530,135)................. 34,064,266
-----------
SHORT-TERM INVESTMENT
Repurchase Agreement--15.4%
6,240 Joint Repurchase Agreement Account,
3.46%, 4/4/94, (Note 5)
(cost $6,240,000)................ 6,240,000
-----------
Total Investments--99.6%
(cost $40,770,135; Note 4)......... 40,304,266
Other assets in excess of
liabilities--0.4%.................. 158,475
-----------
Net Assets--100%................... $40,462,741
-----------
-----------
--------
* Non-income producing security.
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE PRUDENTIAL
STATEMENT OF ASSETS
(LOGO) INSTITUTIONAL
AND LIABILITIES
FUND
MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH
STOCK INTERNATIONAL
STOCK
INDEX STOCK BALANCED
FUND
FUND FUND FUND
<S> <C>
<C> <C> <C>
- ----------- ----------- ----------------- -----------
Assets
Investments, at value (cost $67,816,041, $34,058,360, $62,391,165
and $40,770,135, respectively)....................................
$69,097,500 $34,403,335 $69,592,949 $40,304,266
Cash................................................................
42,239 -- 13,349 56,423
Foreign currency, at value (cost $81,061 and $105,001,
respectively).....................................................
- -- -- 81,100 104,986
Receivable for investments sold.....................................
113,960 21,938 -- 201,949
Interest and dividends receivable...................................
39,720 84,655 80,015 347,717
Due from Manager....................................................
- -- 2,297 -- --
Due from broker-variation margin receivable.........................
- -- 4,180 -- --
Deferred expenses and other assets..................................
58,616 78,805 69,976 77,697
- ----------- ----------- ----------------- -----------
Total assets..................................................
69,352,035 34,595,210 69,837,389 41,093,038
- ----------- ----------- ----------------- -----------
Liabilities
Payable for investments purchased...................................
2,799,620 157,854 497,634 568,669
Accrued expenses and other liabilities..............................
92,917 98,376 49,266 41,877
Management fee payable..............................................
32,100 -- 67,954 15,041
Administration fee payable..........................................
8,051 4,138 8,307 4,710
- ----------- ----------- ----------------- -----------
Total liabilities.............................................
2,932,688 260,368 623,161 630,297
- ----------- ----------- ----------------- -----------
Net Assets..........................................................
$66,419,347 $34,334,842 $69,214,228 $40,462,741
- ----------- ----------- ----------------- -----------
- ----------- ----------- ----------------- -----------
Net assets were comprised of:
Shares of beneficial interest, at par............................... $
5,643 $ 3,208 $ 4,863 $ 3,709
Paid-in capital in excess of par....................................
65,752,484 33,743,981 61,243,490 39,951,533
- ----------- ----------- ----------------- -----------
65,758,127 33,747,189 61,248,353 39,955,242
Undistributed net investment income.................................
35,639 392,980 474,169 640,255
Accumulated net realized gain (loss) on investments.................
(655,878) 14,428 288,859 333,022
Net unrealized appreciation (depreciation) on investments and
foreign currencies................................................
1,281,459 180,245 7,202,847 (465,778)
- ----------- ----------- ----------------- -----------
Net assets, March 31, 1994..........................................
$66,419,347 $34,334,842 $69,214,228 $40,462,741
- ----------- ----------- ----------------- -----------
- ----------- ----------- ----------------- -----------
Shares of beneficial interest issued and outstanding................
5,643,393 3,208,194 4,863,498 3,708,893
- ----------- ----------- ----------------- -----------
- ----------- ----------- ----------------- -----------
Net asset value per share...........................................
$11.77 $10.70 $14.23 $10.91
- ----------- ----------- ----------------- -----------
- ----------- ----------- ----------------- -----------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
<PAGE>
THE PRUDENTIAL
STATEMENT OF
(LOGO) INSTITUTIONAL
OPERATIONS
FUND
SIX MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH
STOCK INTERNATIONAL
STOCK
INDEX STOCK BALANCED
FUND
FUND FUND FUND
- ----------- ----------- ----------------- -----------
<S> <C>
<C> <C> <C>
Net Investment Income
Interest
Interest.......................................................... $
52,592 $ 49,730 $ 98,646 $ 459,313
Dividends(D)......................................................
216,550 388,738 261,637 119,712
- ----------- ----------- ----------------- -----------
Total income......................................................
269,142 438,468 360,283 579,025
- ----------- ----------- ----------------- -----------
Expenses
Management fee....................................................
197,317 63,348 290,828 116,340
Administration fee................................................
39,125 21,981 35,101 23,068
Custodian's fees and expenses.....................................
52,000 53,000 40,500 41,000
Registration fees.................................................
42,000 20,500 16,500 10,000
Transfer agent's fees and expenses................................
8,118 4,561 7,283 4,786
Amortization of organization expenses.............................
6,674 6,674 6,674 6,674
Legal fees........................................................
6,500 6,500 6,500 6,500
Reports to shareholders...........................................
5,000 5,000 5,000 5,000
Audit fee.........................................................
5,000 5,000 6,500 5,000
Trustees' fees....................................................
4,500 4,500 4,500 4,500
Miscellaneous.....................................................
7,821 6,309 1,991 828
- ----------- ----------- ----------------- -----------
Total expenses..................................................
374,055 197,373 421,377 223,696
Less: expense subsidy (Note 2)....................................
(92,155) (101,819) (15,991) (57,495)
- ----------- ----------- ----------------- -----------
Net expenses........................................................
281,900 95,554 405,386 166,201
- ----------- ----------- ----------------- -----------
Net investment income (loss)........................................
(12,758) 342,914 (45,103) 412,824
- ----------- ----------- ----------------- -----------
Realized and Unrealized Gain
(Loss) on Investment and
Foreign Currency Transactions
Net realized gain (loss) on securities............................
(609,120) 38,465 674,976 460,116
Net realized gain (loss) on futures transactions..................
- -- 39,890 -- (7,150)
Net realized gain (loss) on foreign currency transactions.........
(14) 24 (77,688) 106
- ----------- ----------- ----------------- -----------
(609,134) 78,379 597,288 453,072
- ----------- ----------- ----------------- -----------
Net change in unrealized appreciation/depreciation on:
Securities........................................................
(1,714,288) (1,079,207) 4,916,387 (2,312,812)
Financial futures contracts.......................................
- -- (166,260) -- --
- ----------- ----------- ----------------- -----------
(1,714,288) (1,245,467) 4,916,387 (2,312,812)
- ----------- ----------- ----------------- -----------
Net gain (loss) on investments and foreign currencies...............
(2,323,422) (1,167,088) 5,513,675 (1,859,740)
- ----------- ----------- ----------------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations...........................................
$(2,336,180) $ (824,174) $ 5,468,572 $(1,446,916)
- ----------- ----------- ----------------- -----------
- ----------- ----------- ----------------- -----------
(D) Net of foreign withholding taxes of $1,549, $532, $35,339 and $472,
respectively.
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
<PAGE>
THE PRUDENTIAL
STATEMENT OF CHANGES
(LOGO) INSTITUTIONAL
IN NET ASSETS
FUND
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH STOCK
INTERNATIONAL
STOCK INDEX
STOCK BALANCED
FUND FUND
FUND FUND
--------------------------
- ------------------------------ -------------------------- -----------
Six November 5, Six November
5, Six November 5, Six
Months 1992* Months 1992*
Months 1992* Months
Ended Through Ended Through
Ended Through Ended
March 31, September 30, March 31, September
30, March 31, September 30, March 31,
1994 1993 1994 1993
1994 1993 1994
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
<C> <C> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment income
(loss)............... $ (12,758 ) $ 48,664 $ 342,914 $ 408,753
$ (45,103 ) $ 188,224 $ 412,824
Net realized gain
(loss) on investments
and foreign currency
transactions......... (609,134 ) 84,385 78,379 42,988
597,288 184,668 453,072
Net change in
unrealized
appreciation/
depreciation on
investments and
foreign currencies... (1,714,288 ) 2,995,747 (1,245,467 ) 1,425,712
4,916,387 2,286,460 (2,312,812)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Net increase (decrease)
in net assets
resulting from
operations........... (2,336,180 ) 3,128,796 (824,174 ) 1,877,453
5,468,572 2,659,352 (1,446,916)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Net equalization
credits................ 20,289 45,668 85,686 108,290
258,761 185,770 219,919
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (43,710 ) (22,514) (481,227 )
(71,436) (98,619 ) (14,864) (604,065)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Distributions to
shareholders from net
realized gains....... (131,129 ) -- (106,939 )
- -- (493,097 ) -- (735,383)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Fund share transactions
Net proceeds from
shares sold.......... 28,469,707 49,088,805 10,969,624 27,729,562
40,637,469 31,029,495 15,946,076
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 174,839 22,514 588,166 71,436
591,716 14,864 1,339,448
Cost of shares
redeemed............. (7,732,474 ) (4,290,264) (3,038,621 )
(2,597,978) (8,858,161 ) (2,192,030) (1,918,923)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Net increase in net
assets from Fund
share transactions... 20,912,072 44,821,055 8,519,169 25,203,020
32,371,024 28,852,329 15,366,601
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Net increase............ 18,421,342 47,973,005 7,192,515 27,117,327
37,506,641 31,682,587 12,800,156
Net Assets
Beginning of period.... 47,998,005 25,000 27,142,327 25,000
31,707,587 25,000 27,662,585
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
End of period.......... $66,419,347 $47,998,005 $34,334,842 $27,142,327
$69,214,228 $31,707,587 $40,462,741
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
* Commencement of investment operations.
<CAPTION>
November 5,
1992*
Through
September 30,
1993
-------------
<S> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment income
(loss)............... $ 496,213
Net realized gain
(loss) on investments
and foreign currency
transactions......... 615,333
Net change in
unrealized
appreciation/
depreciation on
investments and
foreign currencies... 1,847,034
-------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,958,580
-------------
Net equalization
credits................ 178,724
-------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (63,360)
-------------
Distributions to
shareholders from net
realized gains....... --
-------------
Fund share transactions
Net proceeds from
shares sold.......... 25,721,891
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 63,360
Cost of shares
redeemed............. (1,221,610)
-------------
Net increase in net
assets from Fund
share transactions... 24,563,641
-------------
Net increase............ 27,637,585
Net Assets
Beginning of period.... 25,000
-------------
End of period.......... $27,662,585
-------------
-------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
<PAGE>
THE PRUDENTIAL
FINANCIAL HIGHLIGHTS
(LOGO) INSTITUTIONAL
FUND
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH STOCK
INTERNATIONAL
STOCK INDEX
STOCK BALANCED
FUND FUND
FUND FUND
--------------------------
- ------------------------------ -------------------------- -----------
Six November 5, Six November
5, Six November 5, Six
Months 1992* Months 1992*
Months 1992* Months
Ended Through Ended Through
Ended Through Ended
March 31, September 30, March 31, September
30, March 31, September 30, March 31,
1994 1993 1994 1993
1994 1993 1994
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
<C> <C> <C>
PER SHARE
OPERATING PERFORMANCE:
Net asset value,
beginning of period.... $ 12.10 $ 10.00 $ 11.12 $ 10.00
$ 12.35 $ 10.00 $ 11.80
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Income from
investment operations:
Net investment
income(D).............. -- .04 .12 .23
(.01 ) .16 .14
Net realized and
unrealized gains
(losses) on investment
and foreign currency
transactions........... (.29 ) 2.08 (.32 ) .94
2.07 2.21 (.52)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Total from investment
operations........... (.29 ) 2.12 (.20 ) 1.17
2.06 2.37 (.38)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Less distributions:
Dividends from net
investment income...... (.01 ) (.02) (.18 )
(.05) (.03 ) (.02) (.23)
Distributions from net
realized gains......... (.03 ) -- (.04 )
- -- (.15 ) -- (.28)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Total distributions..... (.04 ) (.02) (.22 )
(.05) (.18 ) (.02) (.51)
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
Net asset value, end of
period................. $ 11.77 $ 12.10 $ 10.70 $ 11.12
$ 14.23 $ 12.35 $ 10.91
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
----------- ------------- -----------
- ----------------- ----------- ------------- -----------
TOTAL RETURN#........... (2.40 )% 21.22% (1.89 )%
11.73% 16.70% 23.74% (3.39)%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)........... $ 66,419 $ 47,998 $ 34,335 $ 27,142
$ 69,214 $ 31,708 $ 40,463
Average net assets
(000).................. $ 56,531 $ 17,592 $ 31,761 $ 18,807
$ 50,718 $ 14,491 $ 33,331
Ratios to average net
assets: (D)/(D)(D)
Expenses............... 1.00% 1.00% .60% .60%
1.60% 1.60% 1.00%
Net investment
income............... (.05 )% .31% 2.17% 2.41%
(.18)% 1.44% 2.48%
Portfolio turnover
rate................... 34% 84% 1%
1% 7% 15% 33%
<CAPTION>
November 5,
1992*
Through
September 30,
1993
-------------
<S> <C>
PER SHARE
OPERATING PERFORMANCE:
Net asset value,
beginning of period.... $ 10.00
-------------
Income from
investment operations:
Net investment
income(D).............. .31
Net realized and
unrealized gains
(losses) on investment
and foreign currency
transactions........... 1.54
-------------
Total from investment
operations........... 1.85
-------------
Less distributions:
Dividends from net
investment income...... (.05)
Distributions from net
realized gains......... --
-------------
Total distributions..... (.05)
-------------
Net asset value, end of
period................. $ 11.80
-------------
-------------
TOTAL RETURN#........... 18.58%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)........... $ 27,663
Average net assets
(000).................. $ 17,401
Ratios to average net
assets: (D)/(D)(D)
Expenses............... 1.00%
Net investment
income............... 3.16%
Portfolio turnover
rate................... 74%
</TABLE>
- ---------------
* Commencement of investment operations.
(D) Net of expense subsidy.
(D)(D) Annualized.
# 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 return for
periods of less than a full year are not
annualized.
See Notes to Financial Statements.
27
<PAGE>
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
The Prudential Institutional Fund (the Company) is registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company. The Company was established as a Delaware business trust on May 11,
1992 and consists of seven separate funds. The information presented in these
financial statements pertains to only four funds (Fund or Funds): Growth Stock
Fund, Stock Index Fund, International Stock Fund and Balanced Fund. The Company
had no operations until July 7, 1992 when 10,000 shares of beneficial interest
(2,500 shares of each Fund) were sold for $100,000 to Prudential Institutional
Fund Management, Inc. (PIFM). Investment operations commenced on November 5,
1992 for each Fund.
The Funds' investment objectives are as follows: Growth Stock Fund--long-term
growth of capital through investment primarily in equity securities of
established companies with above-average growth prospects; Stock Index
Fund--investment results that correspond to the price and yield performance of
Standard & Poor's 500 Composite Stock Price Index; International Stock
Fund--long-term growth of capital through investment in equity securities of
foreign issues with income as a secondary objective; and Balanced
Fund--long-term total return consistent with moderate portfolio risk.
The ability of issuers of debt securities, other than those issued or
guaranteed by the U.S. Government, held by the Funds to meet their obligations
may be affected by economic developments in a specific industry, region, or
country.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund.
Securities Valuations: Securities, including options, warrants, futures
contracts and options thereon, for which the primary market is on a national
securities exchange, commodities exchange or board of trade and NASDAQ national
market equity securities are valued at the last sale price on such exchange or
board of trade on the date of valuation or, if there was no sale on such day,
at
the average of readily available closing bid and asked prices on such day.
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, shall be valued at the average of the most recently quoted bid
and asked prices provided by a principal market maker or dealer.
U.S. Government securities for which market quotations are available shall
be
valued at a price provided by an independent broker/dealer or pricing service.
Securities for which reliable market quotations are not available or for
which the pricing agent or principal market maker does not provide a valuation
or provides a valuation that, in the judgment of one of the subadvisers, does
not represent fair value, shall be valued at fair value as determined under
procedures established by the Trustees.
Quotations of foreign securities in a foreign currency shall be converted to
U.S. dollar equivalents at the current rate obtained from a recognized bank or
dealer.
Forward currency exchange contracts shall be valued at the current cost of
covering or offsetting such contracts.
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. In the event that a Subadviser determines that
amortized cost does not represent fair value regarding certain short-term
securities with remaining maturities of 60 days or less, such securities will
be
valued at market value.
In connection with transactions in repurchase agreements, it is the Company's
policy that its
28
<PAGE>
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
custodian take possession of the underlying collateral securities, the value of
which exceeds the principal amount of the repurchase transaction, including
accrued interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is marked-to-market on a daily basis
to ensure the adequacy of the collateral. 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
Company may be delayed or limited.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities are
calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
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,
a 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 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 until
the contracts expire or are closed, at which time the gain or loss is
reclassified to realized gain or loss. The Funds invest in financial futures
contracts solely for the purpose of hedging their existing portfolio securities
or securities the Funds intend to purchase against fluctuations in value caused
by changes in prevailing market conditions. Should market conditions move
unexpectedly, a 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, interest rates and the underlying hedged assets.
Foreign Currency Translation: The books and records of the Funds 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 Funds are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Funds do 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
Funds do not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the fiscal period. Accordingly, these realized foreign
currency gains (losses) are included in the reported net realized gains (losses)
on investment transactions.
Net realized gains (losses) on foreign currency transactions, if any,
represent net foreign exchange gains (losses) from holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates of securities transactions, and the difference between the amounts of
dividends and foreign taxes recorded on the Funds' 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
29
<PAGE>
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
at period end exchange rates are reflected as a component of net 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 level of governmental supervision and regulation of
foreign securities markets and the possibility of political or economic
instability.
Equalization: The Funds follow the accounting practice known as equalization
by which a portion of the proceeds from sales and costs of reacquisitions of
Fund 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. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Funds' shares.
Dividends and Distributions: Dividends and distributions, if any, of each
Fund are declared in cash and automatically reinvested in additional shares of
the Fund. Each Fund will declare and distribute a dividend of its net investment
income and a distribution of its net capital gains, if any, at least annually.
Distributions of income dividends and capital gains distributions of each Fund
are made on the payment date and reinvested at the per share net asset value as
of the record date or such other date as the Board may determine. On the
``ex-dividend'' date, the net asset value per share excludes the dividend (i.e.,
is reduced by the amount of the distribution).
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 Funds' policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income to its shareholders. Therefore, no
federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in accordance
with the Funds' understanding of the applicable country's tax rules and rates.
Deferred Organizational Expenses: Costs incurred, estimated at $450,000, in
connection with the organization and initial registration of the Company were
paid initially by PIFM and Prudential Mutual Fund Management, Inc. (PMF). These
costs have been deferred and will be amortized ratably over the period of
benefit not to exceed 60 months from the date each of the Funds' commenced
investment operations.
Note 2. Agreements
The Company has entered into a management agreement with PIFM. Pursuant to
this agreement, PIFM has responsibility for all investment advisory services and
supervises the subadviser's performance of such services. PIFM is an indirect,
wholly-owned subsidiary of The Prudential Insurance Company of America
(Prudential).
PIFM has entered into subadvisory agreements with The Prudential Investment
Corporation (PIC), Jennison Associates Capital Corp. (Jennison) and Mercator
Asset Management, Inc. (Mercator), each an indirect wholly-owned subsidiary of
Prudential. Each subadviser will furnish investment advisory services in
connection with the management of the various Funds. Jennison serves as
subadviser to the Growth Stock Fund. PIC serves as subadviser to the Balanced
Fund and the Stock Index Fund. Mercator serves as subadviser to the
International Stock Fund. PIFM will pay for the costs and expenses attributable
to the subadvisory agreements and the salaries and expenses of all personnel of
the Company except for fees and expenses of unaffiliated Trustees. The Funds
will bear all other costs and expenses.
30
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
Each Fund will pay PIFM a fee for its services provided to the Fund that is
computed daily and payable monthly at the annual rate specified below of the
value of each Funds' average daily net assets:
<TABLE>
<CAPTION>
Fund Management Fee
- -------------------------- ---------------
<S> <C>
Growth Stock Fund .70%
Stock Index Fund .40
International Stock Fund 1.15
Balanced Fund .70
</TABLE>
PIFM has voluntarily agreed to subsidize a portion of the operating expenses
of the Funds until September 30, 1996. For the six months ended March 31, 1994,
PIFM subsidized the following amounts:
<TABLE>
<CAPTION>
Percentage of
Average Net Amount per
Fund Assets Share
- --------------------------- ------------- ------------------
<S> <C> <C>
Growth Stock Fund .33% $ .016
Stock Index Fund .64 .032
International Stock Fund .06 .004
Balanced Fund .35 .019
</TABLE>
The Company has entered into an administration agreement with PMF, an
indirect wholly-owned subsidiary of Prudential. The administration fee paid PMF
will be computed daily and payable monthly, at an annual rate of .17% of the
Company's daily net assets up to $250 million and .15% of the Company's average
daily net assets in excess of $250 million. PMF will furnish to the Company such
services as the Company may require in connection with administration of the
Company's business affairs. PMF will also provide certain transfer agent
services through its wholly-owned subsidiary, Prudential Mutual Fund Services,
Inc. (PMFS). For such services, PMFS will be paid .03% of the Company's daily
net assets up to $250 million and .02% of the Company's average daily net assets
in excess of $250 million from the administration fee paid to PMF.
Note 3. Other Transactions with Affiliates
For the six months ended March 31, 1994, Prudential Securities Incorporated,
an affiliate of PIFM, earned $1,139 in brokerage commissions from portfolio
transactions executed on behalf of the Balanced Fund.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, excluding short-term
investments, for the six months ended March 31, 1994 were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ----------------------------- ----------- -----------
<S> <C> <C>
Growth Stock Fund $56,272,619 $17,608,439
Stock Index Fund 6,935,796 269,220
International Stock Fund 33,050,681 3,376,397
Balanced Fund 20,873,397 9,557,788
</TABLE>
The federal income tax basis and unrealized appreciation/depreciation of the
Fund's investments as of March 31, 1994 were as follows:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation/ Gross Unrealized
Fund Basis Depreciation Appreciation Depreciation
- -------------------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Growth Stock Fund $67,854,204 $1,243,296 $4,394,415 $3,151,119
Stock Index Fund 34,059,593 343,742 2,138,084 1,794,342
International Stock 62,391,165 7,201,784 8,298,896 1,097,112
Balanced Fund 40,777,959 (473,693) 863,710 1,337,403
</TABLE>
At March 31, 1994, the Stock Index Fund purchased seven financial futures
contracts on the S&P 500 Index expiring June 1994. The value at disposition of
such contracts was $3,291,980. The value of such contracts on March 31, 1994,
was $3,127,250, thereby resulting in an unrealized loss of $164,730. The Stock
Index Fund has pledged $200,000 United States Treasury Bills as initial margin
on such contracts.
Note 5. Joint Repurchase Agreement Account
The Company, 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. At
31
<PAGE>
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
March 31, 1994, the following four funds had a 1.94% undivided interest, in the
aggregate, in the repurchase agreements in the joint account which represented
$18,100,000 in principal amount, in the aggregate, as follows:
<TABLE>
<CAPTION>
Percentage Principal
Company Interest Amount
- ---------------------------- ---------- ----------
<S> <C> <C>
Growth Stock Fund .44% $4,103,000
Stock Index Fund .33 3,057,000
International Stock Fund .50 4,700,000
Balanced Fund .67 6,240,000
</TABLE>
As of such date, each repurchase agreement in the joint account and the
collateral therefor was as follows:
Bear, Stearns & Co., Inc., 3.30%, dated 3/31/94, in the principal amount of
$226,643,000, repurchase price $226,726,102, due 4/4/94; collateralized by
$7,965,000 U.S. Treasury Note, 7.625%, due 4/30/96; $89,000,000 U.S. Treasury
Note, 5.125%, due 6/30/98 and $140,230,000 U.S. Treasury Note, 5.125%, due
3/31/98; aggregate value including accrued interest--$231,552,457.
BT Securities Corp., 3.55%, dated 3/31/94, in the principal amount of
$175,000,000, repurchase price $175,069,028, due 4/4/94; collateralized by
$37,860,000 U.S. Treasury Note, 7.875%, due 8/15/01; $20,320,000 U.S. Treasury
Note, 8.50%, due 2/15/00; $50,000,000 U.S. Treasury Bond, 10.75%, due 2/15/03
and $39,569,000 U.S. Treasury Bond, 10.75%, due 5/15/03; aggregate value
including accrued interest--$179,069,820.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 3.40%, dated 3/31/94, in the
principal amount of $280,000,000, repurchase price $280,105,778, due 4/4/94;
collateralized by $289,950,000 U.S. Treasury Note, 5.875%, due 3/31/99 and
$750,000 U.S. Treasury Note, 5.375%, due 4/30/94; aggregate value including
accrued interest--$286,345,112.
Morgan (J.P.) Securities, Inc., 3.45%, dated 3/31/94, in the principal amount
of $100,000,000, repurchase price $100,038,333, due 4/4/94; collateralized by
$3,268,000 U.S. Treasury Note, 5.00%, due 1/31/99 and $100,000,000 U.S. Treasury
Note, 5.125%, due 3/31/96; aggregate value including accrued
interest--$103,036,460.
Morgan Stanley & Co., Inc., 3.45%, dated 3/31/94, in the principal amount of
$152,000,000, repurchase price $152,058,267, due 4/4/94; collateralized by
$155,615,000 U.S. Treasury Note, 4.25%, due 12/31/95; aggregate value including
accrued interest--$155,168,195.
Note 6. Capital
Each Fund has authorized an unlimited number of shares of beneficial
interest at $.001 par value per share. Of the shares outstanding at March 31,
1994, PIFM and affiliates owned the following shares:
<TABLE>
<CAPTION>
Fund Shares
- -------------------------- ----------
<S> <C>
Growth Stock Fund 2,927,423
Stock Index Fund 2,577,158
International Stock Fund 4,014,268
Balanced Fund 2,781,959
</TABLE>
32
<PAGE>
<PAGE>
THE PRUDENTIAL
NOTES TO
(LOGO) INSTITUTIONAL
FINANCIAL STATEMENTS
FUND (UNAUDITED)
Transactions in shares of beneficial interest during the six months ended
March 31, 1994 and for the period ended September 30, 1993 were as follows:
Six months ended March 31, 1994:
<TABLE>
<CAPTION>
Shares
Issued in
Reinvestment
of Dividends Increase
Shares and Shares in Shares
Fund Sold Distributions Redeemed Outstanding
- ------------------------ --------- ------------- --------- -----------
<S> <C> <C> <C> <C>
Growth Stock Fund 2,288,214 14,450 (625,800 ) 1,676,864
Stock Index Fund 987,658 52,328 (272,909 ) 767,077
International Stock Fund 2,876,685 42,326 (622,663 ) 2,296,348
Balanced Fund 1,416,425 118,117 (170,181 ) 1,364,361
</TABLE>
Period ended September 30, 1993:
<TABLE>
<CAPTION>
Shares
Issued in Increase
Shares Reinvestment Shares in Shares
Fund Sold of Dividends Redeemed Outstanding
- ----------------------- ---------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
Growth Stock Fund 4,341,461 2,064 (379,496 ) 3,964,029
Stock Index Fund 2,674,154 6,823 (242,360 ) 2,438,617
International Stock
Fund 2,749,239 1,453 (186,042 ) 2,564,650
Balanced Fund 2,447,014 6,175 (111,157 ) 2,342,032
</TABLE>
33
<PAGE>
<PAGE>
THE PRUDENTIAL
(LOGO) INSTITUTIONAL
FUND
Trustees
William P. Link, Chairman
Mark R. Fetting
David A. Finley
William E. Fruhan, Jr.
August G. Olsen
James W. Stevens
Herbert G. Stolzer
Officers
Mark R. Fetting, President
Thomas A. Early, Vice President
Robert F. Gunia, Vice President
Walter E. Watkins, Jr., Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Domenick Pugliese, Assistant Secretary
Manager
Prudential Institutional Fund Management, Inc.
30 Scranton Office Park
Moosic, PA 18507
Investment Advisers
The Prudential Investment Corporation
751 Broad Street
Newark, NJ 07102
Jennison Associates Capital Corp.
466 Lexington Avenue
New York, NY 10017
Mercator Asset Management, Inc.
2400 East Commercial Boulevard
Fort Lauderdale, FL 33308
Administrator
Prudential Mutual Fund Management, Inc.
199 Water Street
New York, NY 10292
Distributor
Prudential Retirement Services, Inc.
30 Scranton Office Park
Moosic, PA 18507
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
Raritan Plaza One
Edison, NJ 08837
Independent Accountants
Deloitte & Touche
1633 Broadway
New York, NY 10019
Legal Counsel
Arnold & Porter
399 Park Avenue
New York, NY 10022
The accompanying financial statements as of March 31, 1994 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.
The Prudential Institutional Fund
21 Prudential Plaza
751 Broad Street
Newark, NJ 07102-3777
(800) 824-7513
<PAGE>
<PAGE>
The Prudential Institutional Fund
21 Prudential Plaza
751 Broad Street
Newark, NJ 07102-3777
(LOGO)<PAGE>
